DCIT 3(2), MUMBAI V. PARKER MARKWEL INDUSTRIES P. LTD, MUMBAI

ITA 2638/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8699 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA
• Assessee Lawyers: DR K SHIVRAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI B.R.JAIN (ACCOUNTANT MEMBER) ITA NOS.2637& 2638/MUM/2009 ASSESSMENT YEARS: 2004-05 & 2006-07 DCIT 3(2), ROOM NO.608, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 M/S. PARKER MARKWEL INDUSTRIES P LTD. (FORMERLY KNOWN AS MARKWEL HOSE INDUSTRIES PVT LTD), PLOT NO.EL-26, MIDC TTC INDUSTRIAL AREA, HAHAPE, NAVI MUMBAI PA NO.AAACM 9967 D (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI PRAVIN VARMA RESPONDENT BY: DR. K.SHIVRAM DATE OF HEARING: 8.10.2012 DATE OF PRONOUNCEMENT: 12 .10.2012 ORDER PER B.R.MITTAL, JM: THESE TWO APPEALS ARE FILED BY THE DEPARTMENT FOR A SSESSMENT YEARS 2004-05 AND 2006-07 AGAINST TWO SEPARATE ORDERS OF LD CIT ( A) BOTH DATED 20.2.2009 ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD CIT(A) ERRED IN HOLDING THAT THE NEW IND USTRIAL UNDERTAKING HAD BEEN ESTABLISHED BY THE COMPANY WIT HOUT APPRECIATING THAT THE UNIT IN RESPECT OF WHICH DEDU CTION U/S.10B HAS BEEN CLAIMED HAS COME UP BY PARTIAL CONVERSION OF THE EXISTING UNIT WHERE ASSETS OF THE OLD UNIT INCLUDING BUILDING, PLANT AND MACHINERY HAD BEEN TRANSFERRED TO THE NEW UNIT, MANUFACTURED PRODUCT O F EXISTING UNIT AND HAS NOT MADE 100% EXPORT OF ITS P RODUCT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD CIT(A) HAS FAILED TO BRING ANY EVIDENCE ON RECORD TO PROVE THAT THE TOTAL MACHINERY TRANSFERRED FROM OLD BUSINESS TO THE NEW BUSINESS WAS LESS THAN 20%. 2. DURING THE COURSE OF HEARING, LD REPRESENTATIVES OF BOTH PARTIES SUBMITTED THAT LD CIT(A) HAS FOLLOWED HIS ORDER FOR ASSESSMENT YEAR 2 004-05 WHILE DECIDING THE APPEAL FOR ITA NOS.2637& 2638/MUM/2009 ASSESSMENT YEARS: 2004-05 & 2006 - 07 2 ASSESSMENT YEAR 2006-07. IT WAS FURTHER SUBMITTED BY LD REPRESENTATIVES OF PARTIES THAT THE ISSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICA L. HOWEVER, IT WAS NOTICED THAT NAME OF THE ASSESSEE COMPANY WAS CHANGED PRIOR TO FEBRUA RY, 2007. THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05 IS PASSED IN EARLIER NA ME OF THE ASSESSEE COMPANY, NAMELY, M/S. MARKWEL HOSE INDUSTRIES PVT LTD. IT A PPEARS THAT ASSESSEE HAD NOT BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THE CHANGE OF NAME OF ASSESSEE COMPANY. IT IS ALSO OBSERVED THAT LD CIT(A) HAS ALSO PASSED THE ORDER FOR ASSESSMENT YEAR 2004-05 IN THE ERSTWHILE NAME OF THE ASSESSEE COMPANY NAMEL Y, MARKWEL HOSE INDUSTRIES PVT LTD. THEREFORE, ASSESSMENT WAS MADE IN THE NAME OF THE ASSESSEE COMPANY WHICH WAS CHANGED BEFORE THE ASSESSMENT ORDER WAS PASSED. DU RING THE COURSE OF HEARING, LD REPRESENTATIVES OF BOTH PARTIES SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE AO IS NOT CORRECT AS THE NAME OF THE ASSESSEE COMPANY IS NOT CORRECTLY STATED ON THE DATE THE SAID ASSESSMENT WAS MADE. 3. IT IS ALSO OBSERVED THAT AO HAS DENIED THE DEDUC TION CLAIMED BY THE ASSESSEE U/S.10B OF THE ACT ON THE GROUND THAT THE BUSINESS OF OLD AND NEW ALLEGED UNIT REMAINS THE SAME I.E. MANUFACTURING OF HOSE PIPES AND THE M ACHINERIES RELATING TO OLD UNIT WERE TRANSFERRED TO THE NEW UNIT FOR WHICH ASSESSEE HAS CLAIMED DEDUCTION U/S.10B OF THE ACT. IT IS OBSERVED THAT ASSESSEE STATED BEFORE THE AO T HAT PERCENTAGE OF NEW MACHINERIES PURCHASED AND COMMISSIONED IN NEW EO UNIT WORKS OUT TO 90% (APPROX) AND OLD MACHINERIES TRANSFERRED WORKS OUT TO 9% (APPROX). FURTHER, AO HAS NOT STATED ANY FACTS TO REJECT THE ABOVE CONTENTIONS OF THE ASSESSEE. D URING THE COURSE OF HEARING, IT WAS BROUGHT TO OUR NOTICE THAT LD CIT(A) HAS REVERSED T HE ACTION OF AO WITHOUT GIVING ANY FACTS AND MERELY BY COMMENTING ON THE ASSESSMENT OR DER 4. CONSIDERING THE ABOVE FACTS THAT THE ORDERS OF A UTHORITIES BELOW ARE NOT SELF- CONTAINED AND ALSO THE FACT THAT THE ASSESSMENT ORD ER FOR ASSESSMENT YEAR 2004-05 IS NOT CORRECTLY PASSED IN THE NAME OF THE ASSESSEE CO MPANY, IT WAS SUBMITTED BY LD REPRESENTATIVES OF BOTH PARTIES THAT ORDERS OF AUTH ORITIES BELOW BE SET ASIDE AND THE MATTER BE RESTORED TO THE FILE OF AO TO PASS FRESH ASSESSMENT ORDER IN THE NAME OF THE PRESENT ASSESSEE AND ALSO CONSIDERING SUCH EVIDENCE S AS MAY BE FURNISHED BY A SPEAKING ORDER. SINCE THE AUTHORITIES BELOW, FOR A SSESSMENT YEAR 2006-07, HAVE FOLLOWED THE ORDER FOR ASSESSMENT YEAR 2004-05, IT WAS SUBMITTED BY LD REPRESENTATIVES ITA NOS.2637& 2638/MUM/2009 ASSESSMENT YEARS: 2004-05 & 2006 - 07 3 OF PARTIES THAT THE ISSUE INVOLVED FOR ASSESSMENT Y EAR 2006-07 MAY ALSO BE RESTORED TO THE FILE OF AO FOR PASSING FRESH ASSESSMENT ORDER A S PER LAW. 5. IN VIEW OF ABOVE, WE SET ASIDE THE ORDERS OF AUT HORITIES BELOW FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND RESTORE TH E ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO PASS FRESH ASSESSMENT ORDERS AFTER GIV ING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ALSO CONSIDERING SUCH EVIDENCES AS MAY BE PLACED BEFORE HIM AS PER LAW. 6. IN THE RESULT, APPEALS FOR BOTH ASSESSMENT YEARS I.E. 2004-05 AND 2006-07 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2012 SD/- (B.R.JAIN) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 12 TH OCTOBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),III, MUMBA I 4. COMMISSIONER OF INCOME TAX, 3 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI