DCIT CC 8(1), MUMBAI V. JSK INDUSTRIES P.LTD, MUMBAI

ITA 2767/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5799 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Period of limitation; Additional evidence; Reasonable cause; Scheme of amalgamation; Time period of passing order
• Section: 10AA; 133A; 115JB; 80IB; 10B; 80IA; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2767 /MUM/20 1 7 ASSESSMENT YEAR: 2011 - 2012 & ITA NO. 2768 /MUM/201 7 ASSESSMENT YEAR: 2012 - 2013 THE DCIT CENT. CIRCLE - 8(1), ROOM NO. 656, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S JSK INDUSTRIES PVT. LTD., 19, NEAR NEW EMPIRE CINEMA, A.K. NAIK MARG, CST (VT), MUMBAI - 400001 PAN: AABCJ5937F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SAURABH KUMAR RAI ( DR ) ASSESSEE BY : SHRI DHAVAL SHAH (A R) DATE OF HEARING: 05/11 /201 8 DATE OF PRONOUNCEMENT: 12 / 12 /201 8 O R D E R PER RAM LAL NEGI, JM THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE TWO ORDER S DATED 01.12.2016 PASSED BY THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) - 5 , MUMBAI , FOR THE ASSESSMENT YEAR S 2011 - 2012 AND 2012 - 13 , WHEREBY THE LD. CIT (A) HAS ALLOWED THE APPEAL S FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER S PASSED U/S 14 3 (3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE AND ISSUES INVOLVED ARE IDENTICAL, SAME WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 ITA NO. 2767/MUM/2017 (ASSESSMENT YEAR: 2011 - 2012 ) 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF ALUMINIUM PRODUCTS, CONDUCTORS AND RODS, FILED ITS RETURN OF INC OME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 11,25,40,323/ - , AFTER CLAIMING DEDUCTION OF RS. 3,21,95,745/ - U/S 80IB OF THE ACT. THE RETURN WAS PROCESSED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT WAS RE - OPENED U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 ON THE GROUND THAT THE ASSESSEE HA S WRONGLY CLAIMED DEDUCTION U/S 80IB ON UNIT - II SITUATED AT VILLAGE RAKHOLI, SILVASA (UT) AS T HE SAID UNIT WAS ACQUIRED BY THE ASSESSEE ON SLUMP SALE BASIS FROM HIREN ALUMINIUM LTD. AND THAT THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB HAS BEEN DISALLOWED IN THE ASSESSMENT YEAR 2010 - 11. IN RESPONSE TO N OTICE U/S 143 (2) AND 142 (1) OF THE ACT, THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED TH E DETAILS AND DISCUSSED THE CASE . THE AO COMPLETED THE ASSESSMENT REJECTING THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT AMOUNTING TO RS. 3,21,95,745/ - AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 14,47,36,068/ - UNDER THE NORMAL PROVISIONS OF ACT A ND RS. 16,98,02,326/ - UNDER SECTION 115JB OF THE ACT. 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE DELETED THE ADDITION BY FOLLOWING THE ORDER PASSED BY THE THEN LD. CIT (A) IN THE ASSE SSEES OWN CASE FOR THE A.Y. 2010 - 11. AGAINST THE SAID FINDINGS OF THE LD. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4 . THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 3 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 3,21,95,745/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DOES NOT FULFIL THE CONDITIONS LAID DOWN U/S 80IB OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 3,21,95,745/ - WITHOUT APPRECIATING THAT THE SECTION 80IB WOULD BE APPLICABLE ON AN ELIGI BLE 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, AS LAID DOWN IN THE PROVISIONS OF THE ACT. 5. THERE IS A DELAY OF 27 DAYS IN FILING THE PRESENT APPEAL S . THE APPELLANT/REVENUE HAS MOVED APPLICATION S FOR CONDONATION OF THE SAID DELAY ON THE GROUND THAT POST DEMONETIZATION THE DEPARTMENT REMAINED BUSY WITH VERIFICATION OF CASH DEPOSIT S , SPORT SURVEY ACTION S U/S 133A OF THE ACT AT VARIOUS PREMISES, DUE TO WHICH THE PRESENT APPEAL S COULD NOT BE FILED WITHIN LIMITATION PERIOD. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT SINCE THE DELAY WAS NOT INTENTIONAL OR DUE TO INACTION ON THE PART OF THE APPELL ANT, THE APPLICATIONS MAY BE ALLOWED AND THE APPEALS MAY BE HEARD ON MERITS. THE LD. COUNSEL FOR THE ASSESSEE DID NOT OPPOSE THE APPLICATIONS. 6. SUB - SECTION 5 OF SECTION 253 OF THE INCOME TAX ACT PROVIDES THAT THE TRIBUNAL MAY ADMIT APPEAL OR PERMIT FILIN G OF MEMORANDUM OF CROSS - OBJECTION OF RESPONDENT AFTER EXPIRY OF RELEVANT PERIOD OF LIMITATION REFERRED TO IN SUB - SECTION 3 AND 4 SECTION 253, IF IT IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD . FROM THE CONTENTS O F THE APPLICATION, WE ARE SATISFIED THAT THERE WAS A REASONABLE CAUSE WHICH PREVENTED THE APPELLANT FROM FILING THE PRESENT APPEAL WITHIN LIMITATION PERIOD AND IN OUR CONSIDERED VIEW THE SAID CAUSE IS SUFFICIENT TO CONDONE THE DELAY IN FILING PRESENT APPEA LS . WE ACCORDINGLY ALLOW ED THE APPLICATION S IN THE INTEREST OF JUSTICE AND CONDONE 4 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 THE DELAY OF 27 DAYS IN FILING THESE APPEAL S AND ALLOWED THE LD. DEPARTMENTAL REPRESENTATIVE (DR) TO ARGUE THE APPEALS ON MERITS. 7. B EFORE US, THE LD. DR RELYING ON THE A SSESSMENT ORDER S PASSED BY THE AO SUBMITTED THAT SINCE THE ASSESSEE HAS ACQUIRED UNIT - II SITUATED AT 126/1B, VILLAGE RAKHOLI, SILVASA IN SLUMP SALE UNDER A SLUMP SALE AGREEMENT AND NOT UNDER ANY SCHEME OF MERGER/AMALGAMATION , THE ASSESSEE IS NOT ENTITLED T O CLAIM DEDUCTION U/S 10IB OF THE ACT, THEREFORE, LD. CIT (A) OUGHT TO HAVE CONFIRMED THE ACTION OF THE AO. 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER DATED 23.02.2018 RENDERED BY THE ITAT, MUMBAI IN THE ASSESSEES OWN CASE, ITA NO. 2639/MUM/2014 FOR THE A.Y. 2010 - 11. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE ITAT HAS DISMISSED THE IDENTICAL ISSUE RAISED BY THE DEPARTMENT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2 010 - 11 AND SINCE THE ISSUE IN THE PRESENT CASE ARE IDENTICAL, THE APPEAL OF THE REVENUE DESERVES DISMISSAL . 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL ON RECORD INCLUDING THE ORDER OF THE COORDINATE BENCH PASSED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2010 - 11. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A ) ERRED IN DELETING THE ADDITION OF THE AMOUNT CLAIMED BY THE ASSESSEE U/S 80IB OF THE ACT ? AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISS ED THE APPEAL FILED BY THE REVENUE AGAINST THE FINDINGS OF THE LD. CIT (A) IN THE ASSESSEES OWN CASE FOR THE A.Y. 2010 - 11. THE RELEVANT PORTION OF THE DECISION OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES CASE FOR THE A.Y. 2010 - 11 READS AS UNDER: - 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO DENIED 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 5 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 PERMIT THE DEDUCTION UNLESS TRANSFER OF UNDERTAKING PURSUANT TO THE SCHEME OF AMALGAMATION OR DEMERGER. TH E OTHER REASON WAS THAT THE PREVIOUS OWNER OF THE UNDERTAKING I.E. M/S HIREN ALUMINIUM LTD. IN THE ASSESSMENT ORDER FOR AY 2005 - 06 ONWARD DENIED THE DEDUCTION CLAIMED UNDER SECTION 80IB. WE HAVE NOTED THAT AGAINST THE DISALLOWANCE OF DEDUCTION UNDER SECTIO N 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 DISALLOWANCE UNDER SECTION 80IB. AGAINST THE ORDER OF LD. CIT(A) - VIII, AHMEDABAD, THE REVENUE FILED APPEAL BEFOR E THE ITAT, AHMADABAD. THE TRIBUNAL IN ITS ORDER DATED 18.08.2017 IN ITA NO. 2900/AHD/2008 & ORS. FOR AY 2004 - 05 TO 2009 - 10 CONFIRMED THE ACTION OF LD. CIT(A), AHMADABAD, 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 ASSESSING OFFICER'S THREE FOLD FINDINGS I.E. THE ASSESSEE DOES NOT OWN ANY PLANT AND MACHINERY PERTAINING TO ITS UNIT - II, NO WORK FORCE WAS EMPLOYED THE REIN AS PER FORM 3CCB REPORT, THE SAID LATTER UNIT LACKED APPROVAL FROM THE CONCERNED CENTRAL I STATE GOVERNMENT DEPARTMENTS AND NO SEPARATE BOOKS HAD BEEN MAINTAINED QUA THE SAME. WE REFER TO THE CIT(A)'S ABOVE EXTRACTED DISCUSSION INDICATING THAT THE ASS ESSEE HAD IN FACT ADDED FIXED ASSETS ON LEASE QUA ITS LATTER UNIT - 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 I S NOWHERE MANDATORY IN SECTION 80IB DEDUCTION CLAIM. THE ASSESSEE HAS FURTHER DEMONSTRATED TO HAVE EMPLOYED SUFFICIENT WORK FORCE (MORE THAN 10 WORKERS) BY PLACING ON RECORD ITS CORRESPONDING PROVIDENT FUND CHALLAN. ITS SUBMISSIONS DATED 10.03.2007 (SUPRA) 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 NECESSARY REGISTRATION/CERTIFICATIONS/APPROVALS/INSPECTIONS UNDER CENTRAL EXCISE LAW, SALES TAX (BOTH CENTRAL AS WELL AS STATE), FACTORY LICENSE, EPFO'S LETTER, DIPP CORRESPONDENCE, SERVICE TAX AND POWER GRID'S, REPORTS DISCUSSED HEREINABOVE. NEITHER THE ASSESSING OFFICER'S REMAND REPORT NOR REVENUE'S ARGUMENT BEFORE US ARE ABLE TO REBUT CORRECTNESS OF TH E SAID OVERWHELMING EVIDENCE FORMING PART OF CASE RECORDS RUNNING INTO MORE THAN 330 PAGES. WE ARE NOT TOUCHING UPON CONTENTS OF EACH AND EVERY DOCUMENT IN ORDER TO AVOID LENGTHY REPETITION FOR THE SAKE OF 6 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 BREVITY. SUFFICE TO SAY, THE ASSESSEE HAS PLACED O N RECORD ALL NECESSARY DETAILS IN SUPPORT OF ITS DEDUCTING CLAIM RAISED U/S.80IB OF THE ACT. 14. LEARNED DEPARTMENTAL REPRESENTATIVE REITERATES THAT ASSESSEE'S FORM 3CD DOES NOT REVEAL ANY PLANT AND MACHINERY. PAGE 121 ONWARDS IN CASE RECORD HOWEVER SPEA K OTHERWISE DEMONSTRATING A DETAILED LIST OF RELEVANT FIXED ASSETS AS WELL AS VARIOUS ADDITIONS MADE THEREIN PERTAINING SPECIFICALLY TO UNIT - II IN DISPUTE. 15. MR. MADHUSUDAN'S NEXT ARGUMENT IS THAT THE CIT(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 ADDITIONAL 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 C LAUSES (A) TO (C) THEREIN. WE HOWEVER FIND THAT THE ASSESSEE'S CASE IN ITS ADDITIONAL EVIDENCE PLEADED FOR PLACING RELEVANT DOCUMENTS ON RECORD UNDER RULE 46A(4) BY STATING THAT THE SAME WERE VERY MUCH RELEVANT AND VITAL TO DECIDE THE INSTANT ISSUE OF SECT ION 80IB DEDUCTION. THIS IS NOT REVENUE'S CASE THAT THE CORRESPONDING ADDITIONAL EVIDENCE IS NOT GERMANE TO SECTION 80IB DEDUCTION CLAIM. THE CIT(A) HAS ADMITTEDLY GRANTED SUFFICIENT TIME AND OPPORTUNITY TO THE ASSESSING OFFICER FOR SUBMITTING REMAND REPOR T. THERE IS THEREFORE NO VIOLATION OF PRINCIPLES 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 CONCLUDE THAT THE CTT(A) HAS RIGHTLY ADMITTED THE INSTANT ADDITIONAL EVIDENCE 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 RELEVANT DOCUMENTS HEREINABOVE AS ADDITIONAL EVID ENCE AFTER COMMITTING PERJURY BY PLEADING 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 PRAC TICE IN THE COURSE OF SCRUTINY. MR. MADHUSUDAN AS WELL AS MR. SOPARAKAR STRONGLY SUPPORT THEIR RESPECTIVE PARTIES' STAND THAT THE ASSESSEE'S AND ASSESSING OFFICER'S CONDUCT WAS FOUND WANTING. WE HOWEVER ARE OF THE VIEW THAT THIS PERSONAL ISSUE BETWEEN THE PARTIES IS MERE ACADEMIC NOW AS THE ASSESSEE'S RELEVANT EVIDENCE AS ADMITTED IN LOWER APPELLATE 7 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 PROCEEDINGS HAS SUCCESSFULLY DEMONSTRATED IT TO BE ELIGIBLE FOR SECTION 80IB DEDUCTION . 17. THE REVENUE'S LAST ARGUMENT IS THAT THE CIT(A) HAS NEITHER EXAMINE D HIMSELF ASSESSEE'S ADDITIONAL EVIDENCE NOR THE ASSESSING OFFICER COULD DO SO SINCE IT HAD NOT PLACED ON RECORD THE SAID DOCUMENT BEFORE THE ASSESSING OFFICER. IT HOWEVER EMERGES THAT THE RELEVANT ADDITIONAL EVIDENCE IS MORE OR LESS IN THE FORM OF NECESSA RY APPROVALS OBTAINED FROM VARIOUS CENTRAL AND STATE GOVERNMENTS' DEPARTMENTS (SUPRA) LIKE CENTRAL EXCISE SALES TAX ETC. 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 ISSUES INSTEAD OF DEPUTING SOMEONE FOR NECESSARY VERIFICATION. WE THEREFORE ARE OF THE OPINION THAT IT WAS INCUMBENT FOR THE ASSESSING OFFICER TO GET A LL 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 FROM THE RELEVANT FIELD AUTHORITIES/STATUTORY BODIES. WE THEREFORE REJECT ALL OF ITS LEGAL AS WELL AS FACTUAL ARGUMENTS IN SUPPORT OF THE INSTANT SUBSTANTIVE GROUND SEEKING TO REVERSE CIT(A)'S CONCLUSION IN HOLDING ASSESSEE'S LATTER UNIT - II ELIGIBLE FOR SE CTION 80IB DEDUCTION. 7. IN VIEW OF THE ABOVE FACTUAL AND LEGAL DISCUSSION, THE OBJECTION OF AO/REVENUE THAT THE EARLIER OWNER WAS NOT ALLOWED THE DEDUCTION UNDER SECTION 80IB HAS BECOME MERITLESS. 8. FOR SECOND /OTHER OBJECTION REGARDING NON - APPLICAB ILITY OF THE BENEFIT OF DEDUCTION ON ACCOUNT OF SLUMP SALE, WE FIND THAT THE ASSESSEE HAS ACQUIRED THE ENTIRE UNDERTAKING OF M/S HIREN ALUMINIUM LTD. WHICH WAS DECLARED LIGIBLE FOR DEDUCTION UNDER SECTION 80IB. IN OUR VIEW, WHEN THE ENTIRE UNDERTAKING IS T RANSFERRED, MERELY BECAUSE THE OWNERSHIP 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 DURING HIS COURSE OF SUBMISSION RELIED UPON THE CIRCULAR NO. 1/2013 ISSUED BY CBDT ON 17.01.2013. THE PERUSAL OF CLAUSE - (IV) OF PARAGRAPH 2 OF SAID CIRCULAR PROVIDES THAT THE BENEFIT UNDER SECTION 10A/10AA AND 8 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 10B WOULD CONTINUE TO REMAIN AVAILABLE IN CASE OF SLUMP SALE OF UNDERTAKING. THE CLAUSE (IV) O F 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 WOULD BE FACTS SUCH AS HOW A S LUMP - SALE IS MADE AND WHAT IS ITS NATURE. IT WILL ALSO BE IMPORTANT TO ENSURE THAT THE SLUMP SALE WOULD NOT RESULT INTO ANY SPLITTING OR RECONSTRUCTION OF EXISTING BUSINESS. THESE ARE FACTUAL ISSUES REQUIRING VERIFICATION OF FACTS. IT IS, HOWEVER, CLARIFIE D THAT ON THE SOLE GROUND OF CHANGE IN OWNERSHIP OF AN UNDERTAKING, THE CLAIM OF EXEMPTION CANNOT BE DENIED TO AN OTHERWISE ELIGIBLE UNDERTAKING AND THE TAX HOLIDAY CAN BE AVAILED OF FOR THE UNEXPIRED PERIOD AT THE RATES AS APPLICABLE FOR THE REMAINING YEA RS, SUBJECT TO FULFILMENT OF PRESCRIBED CONDITIONS. 9. THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. HEARTLAND DELHI TRANSCRIPTION SERVICES PVT. LTD. (SUPRA) WHILE EXAMINING THE SCOPE OF EXEMPTION UNDER SECTION 10B HELD THAT FORMATION OF UNDERTAKING, WHEN IT WAS FORMED SATISFIED AND DULY FULFILLED THE REQUIREMENT OF THE CLAUSES OF SECTION 10B(2) OR CLAUSE (2) & (3) AS IT WAS NOT FORMED BY SPLITTING UP OF RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE AND THERE WAS NO FACTUAL FINDING THAT AT THE TIME O F ESTABLISHMENT OF FORMATION OF UNDERTAKING BUSINESS ALREADY IN EXISTE NCE WAS SPLIT OR RECONSTRUCTED. THERE WAS NO BAR IN SECTION 10B ON TRANSFER OR SALE OF UNDERTAKING BY 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 TO AN UNDERTAKING COULD NOT BE DENIED TO THE ASSESSEE FOR REMAINING PERIOD ON THE GROUND THAT SUBSECTION (12) OF SECTION 80IA EMPRESSES ONLY IN CASE OF AMALGAMATION OR DEMERGE R OF AN INDIAN COMPANY AND THEREFORE, SUCH BENEFIT WOULD NOT BE AVAILABLE IN CASE OF CHANGE FROM PROPRIETORSHIP TO PARTNERSHIP. 11.THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. SONATA SOFTWARE LTD. [343 ITR 397] WHILE DISCUSSING THE CONDITION PRECEDEN T 9 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 FOR EXEMPTION UNDER SECTION 10A HELD THAT THERE ARE TWO CONDITION CAST IN NEGATIVE TERM; (I) INDUSTRIAL UNDERTAKING IS NOT FIRMED BY SPLITTING UP RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE (II) INDUSTRIAL UNDERTAKING IS NOT FIRMED BY TRANSFER TO A N EW BUSINESS MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. 12. FURTHER, THE HONBLE DELHI HIGH COURT IN ACIT VS. IIS INFOTECH LTD. [82 TTJ 174] WHILE DISCUSSING THE SCOPE OF EXEMPTION UNDER SECTION 10B HELD THAT BENEFIT UNDER SECTION 10 IS ALWAYS A TTACHED TO THE INDUSTRIAL UNDERTAKING IRRESPECTIVE OF THE FACT WHO OWNS IT 100% EXPORT ORIENTED UNIT AND ENJOYING TAX EXEMPTION UNDER SECTION 10B MERGED WITH ASSESSEE, WOULD BE ENTITLED TO SAME BENEFIT WITH RESPECT TO SAID UNIT EVEN AFTER MERGER OF UNIT BE ING OF AN INDEPENDENT UNIT. 13. THE CAREFUL READING OF SUB - SECTION (2) OF SECTION 80IB MAKE IT CLEAR THAT THERE ARE TWO CONDITIONS ARE PROVIDED IN NEGATIVE TERM I.E. (I) INDUSTRIAL UNDERTAKING IS NOT FORMED BY SPLITTING UP RECONSTRUCTION OF BUSINESS ALR EADY IN EXISTENCE, (II) IS NOT FORMED BY TRANSFER OF NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. THE ASSESSING OFFICER HAS NOT DISPUTED ABOUT THE MANUFACTURING OR PRODUCE PRODUCT OF ANY ARTICLE OR THINGS NOT BEING ANY ARTICLE OR THI NGS SPECIFIED IN XI SCHEDULE OR OPERATE ONE OR MORE COLD - STORAGE OR PLANT IN ANY PART OF INDIA. FURTHER, THERE IS NO DISPUTE THAT INDUSTRIAL UNDERTAKING MANUFACTURES OR PRODUCE ARTICLES OR THINGS UNDERTAKING EMPLOYED 10 OR MORE WORKERS IN A MANUFACTURING P ROCESS CARRIED OUT WITH THE AID OF POWER, OR EMPLOYED 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 OTHERWISE, THE ASSESSEE HAS PLACED ON RECORD THE SUFFICIENT EV IDENCE TO SUBSTANTIATE 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 N O DISPUTE THAT THE INDUSTRIAL UNDERTAKING IS SITUATED IN INDUSTRIAL BACKWARD STATE. 14. IN OUR VIEW, THERE IS NO BAR OR PROHIBITION IN SECTION 80IB ON SALE (SLUMPSALE) OF ELIGIBLE UNDERTAKING TO ANOTHER ASSESSEE AND THE BENEFIT ATTACHED WITH ELIGIBLE UND ERTAKING CANNOT BE DENIED TO 10 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 ANOTHER ASSESSEE. THERE ARE ONLY TWO NEGATIVE TERMS PRESCRIBED UNDER SUB - SECTION (2) OF SECTION 80IB, WHICH WE HAVE REFERRED ABOVE. THUS, WE HAVE NO HESITATION IN ACCEPTING THE SUBMISSIONS OF LD . AR FOR THE ASSESSEE THAT HE BEN EFITS OF SECTION 80IB ARE TRAVELLED (TRANSFERRED) WITH THE UNDERTAKING AND THE FACT OF CHANGE OF OWNERSHIP DOES NOT AFFECT THE DEDUCTION. SUB - SECTION (1) & (2) OF SECTION 80IB CATEGORICALLY REFERS TO THE BUSINESS CARRIED OUT BY INDUSTRIAL UNDERTAKING. THUS , MERE CHANGE OF OWNERSHIP WOULD NOT AFFECT THE CLAIM OF DEDUCTIONS. WITH THE ABOVE FACTUAL AND LEGAL DISCUSSION, WE CONFIRMED THE ORDER OF LD. CIT(A) AND DISMISSED THE APPEAL OF REVENUE. 15.IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED. 10. SINC E, THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.Y. 2010 - 11 DISCUSSED ABOVE AND SINCE THE FACTS OF THE CASE AND THE ISSUES INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS AND ISS UES IN THE ASSESSEES CASE FOR THE A.Y. 2010 - 11, WE FIND NO REASON TO DEVIATE FROM THE VIEW ALREADY TAKEN BY THE COORDINATE BENCH AND INTERFERE WITH THE FINDINGS OF THE LD. CIT (A ), WHICH IS IN ACCORDANCE WITH THE FINDINGS OF THE ORDER OF THE COORDINATE BE NCH . HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS BOTH THE GROUNDS OF THE APPEAL OF THE REVENUE. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE ADDITION. ITA NO. 2768 /MUM/2017 (ASS ESSMENT YEAR: 2012 - 2013 ) THE FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE ASSESSEES CASE FOR THE A.Y. 2011 - 12 DISCUSSED ABOVE EXCEPT THE AMOUNT OF DE DUCTION CLAIMED BY THE ASSESSEE. IN THE PRESENT CASE ALSO, THE LD. CIT (A) DELETED THE A DDITION OF THE AMOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB OF THE ACT AND THE REVENUE HAS CHALLENGED THE FINDINGS OF THE LD. CIT (A). 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD . CIT (A): - 11 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 5,23,86,563 / - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DOES NOT FULFIL THE CONDITIONS L AID DOWN U/S 80IB OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 80IB OF THE I.T. ACT AMOUNTING TO RS. 5,23,86,563 / - 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, AS LAID DOWN IN THE PROVISIONS OF THE ACT. 3. SINCE, THE FACTS AND THE ISSUES INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS AND ISSUES INVOLVED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2011 - 12 AND SINCE WE HAVE DISMISSED THE REVENUES APPEAL BY FOLLOWING THE DECISION OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2010 - 11, CONSISTENT WITH OUR FINDINGS, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS BOTH THE GROUNDS OF APPEAL OF THE REVENUE IN THIS APPEAL FOR THE SAME REASONS . IN THE RESULT, BOTH THE A PPEALS FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2011 - 2012 AND 2012 - 13 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER , 2018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) AC COUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 12 / 12 / 2018 ALINDRA PS 12 ITA NO S . 2767 & 2768/MUM/2017 ASSESSMENT YEAR S : 2011 - 2012 AND 2012 - 13 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI