The DCIT Circle-4(1) Visakhapatnam, Visakhapatnam V. M/s RK Hair Products P Ltd, Tanuku

ITA 292/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56862 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 05-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Section: 10B

Judgement Text

I 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NOS.292 & 293/VIZAG/201 1 ASSESSMENT YEARS : 2004-05 & 2008-09 DCIT, CIR-4(1), VISAKHAPATNAM VS- R.K. HAIR PRODUCTS PVT.LTD., TANUKU. (PAN: AACCR 8421 R) (APPELLANT) (RESPONDENT) APPELLANT BY: SMT D. KOMALI KRISHNA RESPONDENT BY: SHRI GVN HARI DATE OF HEARING: 15-12-2011 DATE OF PRONOUNCEMENT: 15 -12-2011. ORDER PER D. MANMOHAN, VICE PRESIDENT:- THESE TWO APPEALS, FILED AT THE INSTANCE OF THE RE VENUE, ARE DIRECTED AGAINST THE COMMON ORDER DATED 22-6-2011 PASSED BY THE CIT (A), VISAKHAPATNAM AND THEY PERTAIN TO THE ASSESSMENT YE ARS 2004-05 AND 2008- 09. SINCE THE ISSUE INVOLVED IN THESE APPEALS IS I DENTICAL IN NATURE, WE PREFER TO DISPOSE OF THESE APPEALS BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY COMMON ISSUE IN THESE APPEALS IS WHETHE R THE ACTIVITY UNDERTAKEN BY THE ASSESSEE AMOUNTS TO MANUFACTURE O R PRODUCTION OF AN ARTICLE OR THING AND WHETHER THE ASSESSEE IS ENTITL ED TO DEDUCTION UNDER SECTION 10B OF THE ACT OR NOT. ITA NOS. 292 & 293/VIZAG/2011 R K HAIR PRODUCTS PVT. LTD.,TANUKU. =============== 2 3. THE ASSESSEE IS IN THE BUSINESS OF PROCESSING OF HUMAN HAIR AND MAKING WIGS OUT OF THE SAME. APART FROM MAKING THE SAME, IT ALSO EXPORTS HAIR OF DIFFERENT SIZES AND SHAPES AND VARIOUS COMM ERCIAL NAMES WERE ATTACHED THERETO. THE ASSESSEE OBTAINS HUMAN HAIR AND AFTER VARIOUS STAGES OF PROCESSING OPERATIONS SUCH AS WASHING, DRYING, H ACKLING, CUTTING AND CONDITIONING ETC., IT MAKES WIGS FOR SALE AND ALSO SELLS THE FINISHED PRODUCTS WITH THE NAMES SUCH AS SPRING CURLY HAIR PIECES, YA KY WAVY HAIR PIECES AND JACKSON WAVY HAIR PIECES ETC. IT IS CONTENDED BY THE ASSESSEE THAT THE ORIGINAL PRODUCT CONVERTS INTO A DIFFERENT ARTI CLE WITH A NEW COMMERCIAL NAME AND HENCE THE SAME HAS TO BE TREATED AS PRODUC TION OR MANUFACTURING PROCESS. CONSEQUENTLY, PROFIT EARNED ON SUCH EXPOR TS SHOULD BE CONSIDERED FOR EXEMPTION UNDER SECTION 10B OF THE ACT. THE ASS ESSING OFFICER REJECTED THE CONTENTIONS OF THE ASSESSEE FOR THE DETAILED REASON S GIVEN IN HIS ORDER. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT (A) WHEREIN HE STRONGLY RELIED ON THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07. SINCE THE SAME ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE IN ITA NO .189/VIZAG/2009 DATED 25 TH JUNE, 2009, BY RESPECTFULLY FOLLOWING THE SAME, TH E LEARNED CIT (A) DIRECTED THE ASSESSING OFFICER TO ACCEPT THE CLAIM OF THE ASSESSEE. AGGRIEVED BY THE FINDINGS OF THE CIT (A), THE REVENUE IS IN A PPEAL BEFORE US. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AS WELL AS THE LEARNED COUNSEL FOR THE ASSESSEE. IT IS NOT IN DISP UTE THAT THE DECISION OF THE ITAT SQUARELY COVERS THE ISSUE ON HAND. THE ONLY P LEA OF THE REVENUE IS THAT THE ORDER OF THE ITAT, VIZAG BENCH PASSED IN ITA NO .189/VIZAG/2009 HAS NOT ATTAINED FINALITY SINCE THE DEPARTMENT HAS PREFERRE D AN APPEAL BEFORE THE HONBLE HIGH COURT OF ANDHRA PRADESH. HOWEVER, THE FACT REMAINS THAT THE ORDER OF THE ITAT (SUPRA) WAS NOT SUSPENDED OR STAY ED BY THE HONBLE HIGH COURT AND THUS IT STANDS AS A VALID PRECEDENT IN TH E INSTANT CASE. SINCE THE LEARNED CIT (A) HAS FOLLOWED THE ORDER OF THE JURIS DICTIONAL TRIBUNAL I.E., IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 MENTIONED SUPRA, WE ITA NOS. 292 & 293/VIZAG/2011 R K HAIR PRODUCTS PVT. LTD.,TANUKU. =============== 3 DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY TH E LEARNED CIT (A) AND ACCORDINGLY WE UPHOLD HIS FINDINGS FOR THE YEARS U NDER CONSIDERATION. 6. IN VIEW OF THE ABOVE, AS DECLARED IN THE OPEN COU RT, THESE APPEALS FILED BY THE REVENUE STAND DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 15-12-20 11. SD/- SD/- ( B.R. BASKARAN ) ( D.MANMOHAN ) ACCOUNTANT MEMBER VICE PRESIDENT JMR* VISAKHAPATNAM, DATED 15-12- 2011 COPY TO 1 DCIT, CIR-4(1), DIRECT TAXES BUILDING, MVP COLONY DOUBLE ROAD, VISAKHAPASTNAM. 2 M/S. RK HAIR PRODUCTS PVT. LTD., B1-INDUSTRIAL ES TATE TETALI, TANUKU, WG DISTRICT. 3 CIT, RAJAHMUNDRY 4 THE CIT (A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM