DCIT 2(2), MUMBAI V. JSK INDUSTRIES P.LTD, MUMBAI

ITA 2639/MUM/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0416 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARJU GARODIA
• Keywords: Principle of natural justice; Additional evidence; Scheme of amalgamation
• Section: 10AA; 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J, MU MBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2639/MUM/2014 (ASSESSMENT YEAR- 2010-11) DCIT-2(2), ROOM NO. 545, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. VS. M/S JSK INDUSTRIES PVT. LTD. 9, A.K. NAIK MARG, NEAR NEW EMPIRE CINEMA, CST (V.T.), MUMBAI-400001. PAN: AABCJ5937F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI AARJU GARODIA (DR) ASSESSEE BY : SHRI DHARMESH SHAH (AR) DATE OF HEARING : 13.02.2018 DATE OF PRONOUNCEMENT : 23.02.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-5, [CIT(A)] MUMBAI DATED 15.01.2014 FOR ASSESSMENT YEA R 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 4,68,67,102/- WITHOUT APPRECIATING THE FACT THAT TH E ASSESSEE DOES NOT FULFIL THE CONDITIONS LAID DOWN U/S 80IB OF THE ACT. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 4,68,67,102/- WITHOUT APPRECIATING THAT THE SECTION 80IB WOULD BE APPLICABLE ON AN ELIGIBLE UNDERTAKING WHICH IS TRANSFERRED IN A SCHEME OF AMALGAMATION OR DEMERGER. HOWEVER, THE ASSESSEE ACQUIRED THE PLANT UNDER A SLUMP SALE AGREEMENT AND NOT BY ANY SCHEME OF AMALGAMATION OR DEMERGER. 2 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-COMPANY I S ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF ALUMINIUM PRODUCTS, CONDUCTORS AND RODS, FILED ITS RETURN OF INCOME FOR RELEVANT ASSES SMENT YEAR 20010-11 ON 30.09.2010 DECLARING TOTAL INCOME AT RS. 17,08,66,5 87/-. THE ASSESSMENT WAS COMPLETED ON 14.02.2013 UNDER SECTION 143(3). T HE ASSESSING OFFICER (AO) WHILE PASSING THE ASSESSMENT ORDER BESIDES THE OTHER DISALLOWANCE, DISALLOWED THE DEDUCTION OF UNDER SECTION 80IB FOR RS. 4,68,67,102/-. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE WAS ALL OWED FULL RELIEF FOR CLAIM OF DEDUCTION UNDER SECTION 80IB. THUS, AGGRIEVED B Y THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BE FORE US. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSES SEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR FOR THE RE VENUE RELIED UPON THE ORDER OF AO AND SUBMITS THAT THE AO RIGHTLY DISALLO WED THE DEDUCTION UNDER SECTION 80IB. THE ASSESSEE ACQUIRED THE SAID ELIGIBLE UNIT FROM M/S HIREN ALUMINIUM LTD. UNDER SLUMP SALE. THE ASSESSEE HAS ACQUIRED THE ELIGIBLE UNIT UNDER A SCHEME UNDER SLUMP SALE AND I S NOT ELIGIBLE FOR DEDUCTIONS UNDER SECTION 80IB. THE OTHER REASON FOR DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB WAS THAT THE UNIT WHIC H WAS PURCHASED BY ASSESSEE UNDER SLUMP SALE WAS DENIED DEDUCTION UNDE R OWNERSHIP OF M/S HIREN ALUMINIUM LTD FOR ASSESSMENT YEAR 2004-05 TO 2009-10. 3 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. 4. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMI TS THAT ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB IN RESPECT OF UNIT-2 S ITUATED IN VILLAGE RAKHOLI, SILVASA UNION TERRITORY OF DADAR AND NAGAR HAVELI. THE SAID UNIT WAS ACQUIRED BY ASSESSEE FROM M/S HIREN ALUMINIUM L TD. ON SLUMP SALE BASIS VIDE AGREEMENT DATED 30.11.2007. THE AO DISAL LOWED THE DEDUCTION FOR TWO REASONS. FIRST REASON WAS THAT PREVIOUS OWN ER NAMELY M/S HIREN ALUMINIUM LTD. WAS DENIED DEDUCTION UNDER SECTION 8 0IB FROM ASSESSMENT YEAR 2004-05 TO 2009-10 FOR THE REASON F OR NON-FULFILMENT OF CERTAIN CONDITION LAID DOWN UNDER SECTION 80IB. THE OTHER REASONS TAKEN BY ASSESSING OFFICER THAT THE UNDERTAKING WAS ACQUIRE D BY ASSESSEE BY WAY OF SLUMP SALE AND NOT THROUGH AMALGAMATION OF MERGER A S PROVIDED UNDER SECTION 80IB(12). THE LD. AR OF THE ASSESSEE FURTHE R SUBMITS THAT ON DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB BY ASS ESSING OFFICER, THE PREVIOUS OWNER OF ELIGIBLE UNDERTAKING (M/S HIREN A LUMINIUM LTD.) FILED APPEAL BEFORE THE LD. CIT(A)-VIII, AHMADABAD. THE L D. CIT(A)-VIII AHMEDABAD ALLOWED THE APPEAL AND ALLOWED DEDUCTIONS OF SECTION 80IB TO THE PREVIOUS OWNER BEING ELIGIBLE UNDERTAKING (M/S HIREN ALUMINIUM LTD). AGAINST THE ORDER OF LD CIT(A) VIII AHMEDABA D, THE REVENUE/DEPARTMENT PREFERRED APPEAL BEFORE THE TRIB UNAL IN ITA NO. 2900/AHD/2008 & ORS FOR AY 2004-05 TO 2009-10. HOWE VER, THE APPEAL OF THE REVENUE WAS DISMISSED VIDE DATED 18.08.2017, COPY OF WHICH IS FILED. THUS, THE FIRST REASON FOR DISALLOWANCE HAS BEEN SE T-ASIDE BY THE TRIBUNAL. 4 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. THE SECOND REASON FOR DISALLOWANCE WAS THAT ASSESSE E ACQUIRED THE ELIGIBLE UNIT UNDER SLUMP SALE AND NOT ON ACCOUNT OF MERGER OR AMALGAMATION. THE ASSESSEE HAS ACQUIRED THE ENTIRE UNIT/UNDERTAKING U NDER THE SLUMP SALE. THE DEDUCTION UNDER SECTION 80IB CANNOT BE DENIED BECAU SE THE BENEFITS ARE CONNECTED TO THE UNDERTAKING AND NOT TO THE ASSESSE E. THE BENEFITS OF SECTION 80IB ARE TRAVELLED (TRANSFERRED) WITH THE U NDERTAKING AND THE FACT OF CHANGE OF OWNERSHIP DOES NOT AFFECT THE DEDUCTIO N. SUB-SECTION (1) & (2) OF SECTION 80IB CATEGORICALLY REFERS TO THE BUSINES S CARRIED OUT BY INDUSTRIAL UNDERTAKING. THUS, MERE CHANGE OF OWNERSHIP WOULD N OT AFFECT THE CLAIM OF DEDUCTIONS. 5. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASS ESSEE RELIED UPON THE CIRCULAR NO. 1/2013 DATED 17.02.2013 ISSUED WITH RE GARD TO THE PROVISIONS OF SECTION 10A & 10B WHEREIN CBDT CLARIFIED THAT ON THE GROUND OF CHANGE OF OWNERSHIP OF UNDERTAKING BY WAY OF SLUMP SALE, THE CLAIM OF EXEMPTION CANNOT BE DENIED TO AND OTHERWISE ELIGIBL E UNDERTAKING. THE LD. AR OF THE ASSESSEE SUBMITS THAT LANGUAGE OF SECTION 10A &10B IS IDENTICAL WORDED TO THE LANGUAGE IN SECTION 80IB. THUS, THE C IRCULAR ISSUED BY CBDT IS SQUARELY APPLICABLE ON THE FACT OF THE PRES ENT CASE. THE LD AR FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF DELH I HIGH COURT IN CIT VS. HEARTLAND DELHI TRANSCRIPTION SERVICES PVT. LTD. [3 66 ITR 523], PUNJAB & HARYANA HIGH COURT IN CIT VS. MEGA PACKAGES [203 TA XMAN 236 (P&H)], DELHI TRIBUNAL IN ITO VS. ADVANCE VALVES GLOBAL [8 ITR 684 (DEL TRIB]. 5 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. THE LD. AR OF THE ASSESSEE ALSO FILED ALSO FILED AN AFFIDAVIT OF SHRI ANISH DINESH SHAH, DIRECTOR OF THE ASSESSEE-COMPANY TO SU BSTANTIATE THE CONTENTION THAT THERE IS NO VIOLATION OF CONDITION PRESCRIBED UNDER SECTION 80IB(2). THE DIRECTOR OF THE ASSESSEE COMPANY ALSO DEPOSED THAT THE ELIGIBLE UNIT IS NOT FORMED BY SPLITTING UP OR RE-C ONSTRUCTION OF THE BUSINESS ALREADY IN EXISTENCE, NOT FORMED BY TRANSFER OF NEW BUSINESS OR MACHINERY OF PLANT PREVIOUSLY USED FOR THAT PURPOSE, MANUFACT URES GOODS WHICH ARE NOT LISTED IN XI SCHEDULE AND EMPLOYED MORE THAN 10 WORKERS. THE ACQUIRED UNDERTAKING IS LOCATED IN INDUSTRIAL BACKW ARD UNION TERRITORY AS SPECIFIED IN H SCHEDULE OF INCOME-TAX ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO DEN IED THE DEDUCTION UNDER SECTION 80IB HOLDING THAT THE BENEFIT IS NOT AVAILABLE IN CASE OF SLUMP SALE AND THAT PROVISIONS OF SECTION 80IB DOES NOT P ERMIT THE DEDUCTION UNLESS TRANSFER OF UNDERTAKING PURSUANT TO THE SCHE ME OF AMALGAMATION OR DEMERGER. THE OTHER REASON WAS THAT THE PREVIOUS OW NER OF THE UNDERTAKING I.E. M/S HIREN ALUMINIUM LTD. IN THE ASSESSMENT ORD ER FOR AY 2005-06 ONWARD DENIED THE DEDUCTION CLAIMED UNDER SECTION 8 0IB. WE HAVE NOTED THAT AGAINST THE DISALLOWANCE OF DEDUCTION UNDER S ECTION 80IB, THE PREVIOUS OWNER OF ELIGIBLE UNIT FILED APPEAL BEFORE THE LD. CIT(A)VIII, AHMEDABAD, THE LD CIT(A) VIII AHMEDABAD ALLOWED THE RELIEF DI SALLOWANCE UNDER SECTION 80IB. AGAINST THE ORDER OF LD. CIT(A)-VIII, AHMEDABAD, THE 6 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. REVENUE FILED APPEAL BEFORE THE ITAT, AHMADABAD. TH E TRIBUNAL IN ITS ORDER DATED 18.08.2017 IN ITA NO. 2900/AHD/2008 & O RS. FOR AY 2004-05 TO 2009-10 CONFIRMED THE ACTION OF LD. CIT(A), AHMA DABAD, THEREBY SUSTAINED THE DEDUCTION ALLOWED UNDER SECTION 80IB TO M/S HIREN ALUMINIUM LTD. THE RELEVANT PART ORDER OF TRIBUNAL IS EXTRACTED BELOW: 13. MR. MADHUSUDAN FIRST OF ALL REITERATES ASSESSI NG OFFICER'S THREE FOLD FINDINGS I.E. THE ASSESSEE DOES NOT OWN ANY PLANT A ND MACHINERY PERTAINING TO ITS UNIT-II, NO WORK FORCE WAS EMPLOYED THEREIN AS PER FORM 3CCB REPORT, THE SAID LATTER UNIT LACKED APPROVAL FROM THE CONCERNED CENT RAL I STATE GOVERNMENT DEPARTMENTS AND NO SEPARATE BOOKS HAD BEEN MAINTAIN ED QUA THE SAME. WE REFER TO THE CIT(A)'S ABOVE EXTRACTED DISCUSSION INDICATI NG THAT THE ASSESSEE HAD IN FACT ADDED FIXED ASSETS ON LEASE QUA ITS LATTER UNI T-II FROM M/S PANKAJ ALUMINIUM. NECESSARY LIST OF SUCH ASSETS FORMS PART OF CASE RECORDS BEFORE US. WE QUOTE ABOVE REFERRED CASE LAW (SUPRA) MAKING IT CLEAR THAT OWNERSHIP/PURCHASE OF ASSETS IS NOWHERE MANDATORY I N SECTION 80IB DEDUCTION CLAIM. THE ASSESSEE HAS FURTHER DEMONSTRATED TO HAV E EMPLOYED SUFFICIENT WORK FORCE (MORE THAN 10 WORKERS) BY PLACING ON RECORD I TS CORRESPONDING PROVIDENT FUND CHALLAN. ITS SUBMISSIONS DATED 10.03.2007 (SUP RA) HAVE ALREADY REFERRED TO SEPARATELY MAINTAINED BOOKS OF ACCOUNT IN RELATION TO THE ELIGIBLE UNIT-II TO REBUT ASSESSMENT FINDINGS. ALL THIS IS FOLLOWED BY NECESS ARY REGISTRATION/CERTIFICATIONS/APPROVALS/INSPECTIONS U NDER CENTRAL EXCISE LAW, SALES TAX (BOTH CENTRAL AS WELL AS STATE), FACTORY LICENS E, EPFO'S LETTER, DIPP CORRESPONDENCE, SERVICE TAX AND POWER GRID'S, REPOR TS DISCUSSED HEREINABOVE. NEITHER THE ASSESSING OFFICER'S REMAND REPORT NOR R EVENUE'S ARGUMENT BEFORE US ARE ABLE TO REBUT CORRECTNESS OF THE SAID OVERWHELM ING EVIDENCE FORMING PART OF CASE RECORDS RUNNING INTO MORE THAN 330 PAGES. WE A RE NOT TOUCHING UPON CONTENTS OF EACH AND EVERY DOCUMENT IN ORDER TO AVO ID LENGTHY REPETITION FOR THE SAKE OF BREVITY. SUFFICE TO SAY, THE ASSESSEE HAS P LACED ON RECORD ALL NECESSARY DETAILS IN SUPPORT OF ITS DEDUCTING CLAIM RAISED U/ S.80IB OF THE ACT. 7 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. 14. LEARNED DEPARTMENTAL REPRESENTATIVE REITERATES THAT ASSESSEE'S FORM 3CD DOES NOT REVEAL ANY PLANT AND MACHINERY. PAGE 121 O NWARDS IN CASE RECORD HOWEVER SPEAK OTHERWISE DEMONSTRATING A DETAILED LI ST OF RELEVANT FIXED ASSETS AS WELL AS VARIOUS ADDITIONS MADE THEREIN PERTAINING S PECIFICALLY TO UNIT-II IN DISPUTE. 15. MR. MADHUSUDAN'S NEXT ARGUMENT IS THAT THE CI T(A) HAS ERRED IN ADMITTING ASSESSEE'S ADDITIONAL EVIDENCE VIOLATING NECESSARY CONDITIONS ENUMERATED IN RULE 46A OF THE INCOME TAX RULES. HE SEEKS TO RAISE AN A DDITIONAL SUBSTANTIVE GROUND AT REVENUE'S BEHEST IN THIS REGARD THAT THE CIT(A)' S ACTION UNDER CHALLENGE IS NOT AS PER LAW SINCE NOT COVERED IN CLAUSES (A) TO (C) THEREIN. WE HOWEVER FIND THAT THE ASSESSEE'S CASE IN ITS ADDITIONAL EVIDENCE PLEA DED FOR PLACING RELEVANT DOCUMENTS ON RECORD UNDER RULE 46A(4) BY STATING TH AT THE SAME WERE VERY MUCH RELEVANT AND VITAL TO DECIDE THE INSTANT ISSUE OF SECTION 80IB DEDUCTION. THIS IS NOT REVENUE'S CASE THAT THE CORRESPONDING A DDITIONAL EVIDENCE IS NOT GERMANE TO SECTION 80IB DEDUCTION CLAIM. THE CIT(A) HAS ADMITTEDLY GRANTED SUFFICIENT TIME AND OPPORTUNITY TO THE ASSESSING OF FICER FOR SUBMITTING REMAND REPORT. THERE IS THEREFORE NO VIOLATION OF PRINCIPL ES OF NATURAL JUSTICE. WE THUS QUOTE HON'BLE JURISDICTIONAL HIGH COURT'S DECISION IN CIT VS. KAMLABEN SURESHCHANDRA BHATTI (2014) 367 ITR 692 (GUJ.) TO C ONCLUDE THAT THE CTT(A) HAS RIGHTLY ADMITTED THE INSTANT ADDITIONAL EVIDENC E FOR DECIDING THE ISSUE IN QUESTION IN APPROPRIATE MANNER. 16. LEARNED DEPARTMENTAL REPRESENTATIVE THEREAFTER MADE A VERY STRONG EFFORT TO HIGHLIGHT THE FACT THAT THE ASSESSEE HAD FILED RELE VANT DOCUMENTS HEREINABOVE AS ADDITIONAL EVIDENCE AFTER COMMITTING PERJURY BY PLE ADING THAT IT HAD ALREADY PLACED THE SAME BEFORE THE ASSESSING OFFICER ON 26. 12.2006 IN THE COURSE OF SCRUTINY. LOT OF ARGUMENTS HAVE TAKEN PLACE BETWEEN BOTH PARTIES ACCUSING EACH OTHER OF HAVING INDULGED IN UNFAIR PRACTICE IN THE COURSE OF SCRUTINY. MR. MADHUSUDAN AS WELL AS MR. SOPARAKAR STRONGLY SUPPOR T THEIR RESPECTIVE PARTIES' STAND THAT THE ASSESSEE'S AND ASSESSING OFFICER'S C ONDUCT WAS FOUND WANTING. WE HOWEVER ARE OF THE VIEW THAT THIS PERSONAL ISSUE BE TWEEN THE PARTIES IS MERE ACADEMIC NOW AS THE ASSESSEE'S RELEVANT EVIDENCE AS ADMITTED IN LOWER APPELLATE PROCEEDINGS HAS SUCCESSFULLY DEMONSTRATED IT TO BE ELIGIBLE FOR SECTION 80IB DEDUCTION. 8 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. 17. THE REVENUE'S LAST ARGUMENT IS THAT THE CIT(A) HAS NEITHER EXAMINED HIMSELF ASSESSEE'S ADDITIONAL EVIDENCE NOR THE ASSESSING OF FICER COULD DO SO SINCE IT HAD NOT PLACED ON RECORD THE SAID DOCUMENT BEFORE THE A SSESSING OFFICER. IT HOWEVER EMERGES THAT THE RELEVANT ADDITIONAL EVIDENCE IS MO RE OR LESS IN THE FORM OF NECESSARY APPROVALS OBTAINED FROM VARIOUS CENTRAL A ND STATE GOVERNMENTS' DEPARTMENTS (SUPRA) LIKE CENTRAL EXCISE SALES TAX E TC. WE REPEAT THAT THE CIT(A)'S ABOVE EXTRACTED FINDINGS SUFFICIENTLY INDICATE THAT HE HAD MADE ALL EFFORTS TO GET NECESSARY REMAND REPORT FROM ASSESSING OFFICER WHO DID NOT DO THE NEEDFUL. THE SAID LATTER AUTHORITY RATHER RAISED ALL TECHNICAL I SSUES INSTEAD OF DEPUTING SOMEONE FOR NECESSARY VERIFICATION. WE THEREFORE ARE OF THE OPINION THAT IT WAS INCUMBENT FOR THE ASSESSING OFFICER TO GET ALL FACTS VERIFIED THAN HARPING ON TECHNICAL IFS AND BUTS. WE FURTHER MAKE IT CLEAR THAT THE INSTANT APPEAL WAS FILED IN THE YEAR 2008. THERE IS NO EVIDENCE FORTHCOMING FROM REVENUE SIDE TILL DATE INDICATING ANY MISTAKE IN ASSESSEE'S ABOVE RECORDS DETECTED FR OM THE RELEVANT FIELD AUTHORITIES/STATUTORY BODIES. WE THEREFORE REJECT A LL OF ITS LEGAL AS WELL AS FACTUAL ARGUMENTS IN SUPPORT OF THE INSTANT SUBSTANTIVE GRO UND SEEKING TO REVERSE CIT(A)'S CONCLUSION IN HOLDING ASSESSEE'S LATTER UN IT-II ELIGIBLE FOR SECTION 80IB DEDUCTION. 7. IN VIEW OF THE ABOVE FACTUAL AND LEGAL DISCUSSION, THE OBJECTION OF AO/REVENUE THAT THE EARLIER OWNER WAS NOT ALLOWED T HE DEDUCTION UNDER SECTION 80IB HAS BECOME MERITLESS. 8. FOR SECOND /OTHER OBJECTION REGARDING NON-APPLICABI LITY OF THE BENEFIT OF DEDUCTION ON ACCOUNT OF SLUMP SALE, WE FIND THAT TH E ASSESSEE HAS ACQUIRED THE ENTIRE UNDERTAKING OF M/S HIREN ALUMINIUM LTD. WHICH WAS DECLARED LIGIBLE FOR DEDUCTION UNDER SECTION 80IB. IN OUR VI EW, WHEN THE ENTIRE UNDERTAKING IS TRANSFERRED, MERELY BECAUSE THE OWNE RSHIP OF UNDERTAKING CHANGES THE HAND, THE DEDUCTION UNDER SECTION 80IB IS CONNECTED WITH THE UNDERTAKING AND IS STILL AVAILABLE TO THE ASSESSEE. THE LD. AR OF THE ASSESSEE 9 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. DURING HIS COURSE OF SUBMISSION RELIED UPON THE CIR CULAR NO. 1/2013 ISSUED BY CBDT ON 17.01.2013. THE PERUSAL OF CLAUSE-(IV) O F PARAGRAPH 2 OF SAID CIRCULAR PROVIDES THAT THE BENEFIT UNDER SECTION 10 A/10AA AND 10B WOULD CONTINUE TO REMAIN AVAILABLE IN CASE OF SLUMP SALE OF UNDERTAKING. THE CLAUSE (IV) OF CIRCULAR IS EXTRACTED BELOW: (IV) WHETHER TAX BENEFITS UNDER SECTIONS 10A, 10AA AND 10B WOULD CONTINUE TO REMAIN AVAILABLE IN CASE OF A SLUMPP-SALE OF A UNIT/UNDERTAKING, THE VITAL FACTOR IN DETERMINING THE ABOVE ISSUE WOU LD BE FACTS SUCH AS HOW A SLUMP-SALE IS MADE AND WHAT IS ITS NATURE. IT WILL ALSO BE IMPORTANT TO ENSURE THAT THE SLUMP SALE WOULD NOT RESULT INTO ANY SPLIT TING OR RECONSTRUCTION OF EXISTING BUSINESS. THESE ARE FACTUAL ISSUES REQUIRI NG VERIFICATION OF FACTS. IT IS, HOWEVER, CLARIFIED THAT ON THE SOLE GROUND OF CHANG E IN OWNERSHIP OF AN UNDERTAKING, THE CLAIM OF EXEMPTION CANNOT BE DENIE D TO AN OTHERWISE ELIGIBLE UNDERTAKING AND THE TAX HOLIDAY CAN BE AVAILED OF F OR THE UNEXPIRED PERIOD AT THE RATES AS APPLICABLE FOR THE REMAINING YEARS, SU BJECT TO FULFILMENT OF PRESCRIBED CONDITIONS. 9. THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. HEA RTLAND DELHI TRANSCRIPTION SERVICES PVT. LTD. (SUPRA) WHILE EXAM INING THE SCOPE OF EXEMPTION UNDER SECTION 10B HELD THAT FORMATION OF UNDERTAKING, WHEN IT WAS FORMED SATISFIED AND DULY FULFILLED THE REQUIRE MENT OF THE CLAUSES OF SECTION 10B(2) OR CLAUSE (2) & (3) AS IT WAS NOT FO RMED BY SPLITTING UP OF RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE AND THERE WAS NO FACTUAL FINDING THAT AT THE TIME OF ESTABLISHMENT OF FORMAT ION OF UNDERTAKING BUSINESS ALREADY IN EXISTENCE WAS SPLIT OR RECONSTR UCTED. THERE WAS NO BAR 10 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. IN SECTION 10B ON TRANSFER OR SALE OF UNDERTAKING B Y ASSESSEE WHICH HAS FORMED SISTER CONCERNED. 10. THE HONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. MEGA PACKAGES (SUPRA) HELD THAT THE BENEFIT ADMISSIBLE T O AN UNDERTAKING COULD NOT BE DENIED TO THE ASSESSEE FOR REMAINING PERIOD ON THE GROUND THAT SUB- SECTION (12) OF SECTION 80IA EMPRESSES ONLY IN CASE OF AMALGAMATION OR DEMERGER OF AN INDIAN COMPANY AND THEREFORE, SUCH B ENEFIT WOULD NOT BE AVAILABLE IN CASE OF CHANGE FROM PROPRIETORSHIP TO PARTNERSHIP. 11. THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. SO NATA SOFTWARE LTD. [343 ITR 397] WHILE DISCUSSING THE CONDITION PRECED ENT FOR EXEMPTION UNDER SECTION 10A HELD THAT THERE ARE TWO CONDITION CAST IN NEGATIVE TERM; (I) INDUSTRIAL UNDERTAKING IS NOT FIRMED BY SPLITTI NG UP RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE (II) INDUSTRIAL UNDER TAKING IS NOT FIRMED BY TRANSFER TO A NEW BUSINESS MACHINERY OR PLANT PREVI OUSLY USED FOR ANY PURPOSE. 12. FURTHER, THE HONBLE DELHI HIGH COURT IN ACIT VS. I IS INFOTECH LTD. [82 TTJ 174] WHILE DISCUSSING THE SCOPE OF EXEMPTION UN DER SECTION 10B HELD THAT BENEFIT UNDER SECTION 10 IS ALWAYS ATTACHED TO THE INDUSTRIAL UNDERTAKING IRRESPECTIVE OF THE FACT WHO OWNS IT 10 0% EXPORT ORIENTED UNIT AND ENJOYING TAX EXEMPTION UNDER SECTION 10B MERGED WITH ASSESSEE, WOULD BE ENTITLED TO SAME BENEFIT WITH RESPECT TO S AID UNIT EVEN AFTER MERGER OF UNIT BEING OF AN INDEPENDENT UNIT. 11 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. 13. THE CAREFUL READING OF SUB-SECTION (2) OF SECTION 8 0IB MAKE IT CLEAR THAT THERE ARE TWO CONDITIONS ARE PROVIDED IN NEGATIVE TERM I.E. (I) INDUSTRIAL UNDERTAKING IS NOT FORMED BY SPLITTING UP RECONSTRU CTION OF BUSINESS ALREADY IN EXISTENCE, (II) IS NOT FORMED BY TRANSFER OF NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. THE ASSESSIN G OFFICER HAS NOT DISPUTED ABOUT THE MANUFACTURING OR PRODUCE PRODUCT OF ANY ARTICLE OR THINGS NOT BEING ANY ARTICLE OR THINGS SPECIFIED IN XI SCHEDULE OR OPERATE ONE OR MORE COLD-STORAGE OR PLANT IN ANY PART OF IN DIA. FURTHER, THERE IS NO DISPUTE THAT INDUSTRIAL UNDERTAKING MANUFACTURES OR PRODUCE ARTICLES OR THINGS UNDERTAKING EMPLOYED 10 OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED OUT WITH THE AID OF POWER, OR EMPLO YED 20 OR MORE WORKERS IN MANUFACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER. THE AO HAS NOT DISPUTED ANYONE OF TWO NEGATIVE TERMS. EVEN OTH ERWISE, THE ASSESSEE HAS PLACED ON RECORD THE SUFFICIENT EVIDENCE TO SUB STANTIATE THE REQUIREMENT OF FULFILMENT OF CONDITION LAID DOWN UNDER SECTION 80IB CONSISTING OF EVIDENCE RELATED WITH THE CHALLAN OF PROVIDENT FUND OF MORE THAN 21 EMPLOYEES WITH THE UNDERTAKING DURING THE RELEVANT PERIOD. MOREOVER, THERE IS NO DISPUTE THAT THE INDUSTRIAL UNDERTAKING IS SI TUATED IN INDUSTRIAL BACKWARD STATE. 14. IN OUR VIEW, THERE IS NO BAR OR PROHIBITION IN SEC TION 80IB ON SALE (SLUMP- SALE) OF ELIGIBLE UNDERTAKING TO ANOTHER ASSESSEE A ND THE BENEFIT ATTACHED WITH ELIGIBLE UNDERTAKING CANNOT BE DENIED TO ANOTH ER ASSESSEE. THERE ARE 12 ITA NO.2639/M/2014 M/S JSK INDUSTRIES PVT. LTD. ONLY TWO NEGATIVE TERMS PRESCRIBED UNDER SUB-SECTIO N (2) OF SECTION 80IB, WHICH WE HAVE REFERRED ABOVE. THUS, WE HAVE NO HESI TATION IN ACCEPTING THE SUBMISSIONS OF LD AR FOR THE ASSESSEE THAT HE BENEF ITS OF SECTION 80IB ARE TRAVELLED (TRANSFERRED) WITH THE UNDERTAKING AND TH E FACT OF CHANGE OF OWNERSHIP DOES NOT AFFECT THE DEDUCTION. SUB-SECTIO N (1) & (2) OF SECTION 80IB CATEGORICALLY REFERS TO THE BUSINESS CARRIED O UT BY INDUSTRIAL UNDERTAKING. THUS, MERE CHANGE OF OWNERSHIP WOULD N OT AFFECT THE CLAIM OF DEDUCTIONS. WITH THE ABOVE FACTUAL AND LEGAL DISCUS SION, WE CONFIRMED THE ORDER OF LD. CIT(A) AND DISMISSED THE APPEAL OF REV ENUE. 15. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2018. SD/- SD/- /- (R.C. SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 23/02/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/