The ITO, Ward-4(4), Baroda V. M/s. Tonira Pharma Ltd., Baroda

ITA 3002/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94544 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-10-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 02-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER INCOME TAX OFFICER, WARD 4(4), BARODA (APPELLANT) VS M/S. TONIRA PHARMA LTD, PLOT NO. 23 - 24, GIDC ESTATE, NANDESARI, BARODA - 391340, PAN: AABCT0638G (RESPONDENT) REVENUE BY : S H RI RAJ DEEP SINGH , SR. D . R. ASSESSEE BY: S H RI S.N. SOPARKAR , A.R. DATE OF HEARING : 08 - 10 - 2 015 DATE OF PRONOUNCEMENT : 14 - 10 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS R EVENUE S APPEAL FOR A.Y. 2004 - 05 , AR ISES FROM ORDER OF THE CIT(A) - III, BARODA DATED 22 - 09 - 2011 IN APPEAL NO. CAB/III - 130 /09 - 10, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 3002 / A HD/20 11 A SS ESSMENT YEAR 200 4 - 05 I.T.A NO. 3002 /AHD/2011 A.Y. 2004 - 05 PAGE NO ITO VS. M/S. TONIRA PHARMA LTD 2 2. THE REVENUE S GROUN D S PLEADED IN THE APPEAL READ AS FOLLOWS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE U/S 10B OVERLOOKING THE NEW FACTS BROUGHT IN BY THE ASSESSING OFFICER REGARDING EXPENSES INCURRED JOINTLY AND APPORTIONED BETWEEN THE GENERAL UNIT AND E.O.U. UNIT, THUS THE DEDUCTION U/S 10B IS NOT ALLOWABLE TO THE ASSESSEE AS THE ASSESSEE DOES NOT FULFILL THE CONDITION OF SECTION 10B OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE AO NOT TO SET OFF THE LOSS AND DEPRECIATION INCLUDING UNABSORBED DEPRECIATION OF THE NON - ELIGIBLE UNITS AGAINST THE PROFITS OF THE ELIGIBLE UNITS, WHILE DETERMINING DEDUCTION U/S 10B OF THE AC T EVEN THOUGH SECTION 10B DOES NOT PROVIDE SO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN SETTING - ASIDE THE ISSUE OF DEDUCTION OF 35D OF THE ACT DES PITE THE FACT THAT ITAT HAD EARLIER DISMISSED THE APP EAL OF THE ASSESSEE ON THIS ISSUE IN THE RELEVANT ASSESSMENT YEAR. 3. THE REVENUE STRONGLY ARGUES IN FAVOUR OF ITS PLEADINGS TO SEEK RESTORATION OF ASSESSING OFFICER S FINDINGS/ADDITIONS HEREINABOVE AS REVERSED IN THE LOWER APPELLATE ORDER UNDER CHALLENG E. IT ACCORDINGLY PRAYS ACCEPTANCE OF ITS APPEAL. 4. THE ASSESSEE SUPPORTS CIT(A) S ORDER. IT PLACES ON RECORD COPY OF TRIBUNAL S ORDER DATED 14 - 05 - 2010 IN ITA NO. 3636/AHD/2007 IN ITS OWN CASE ARISING FROM SCRUTINY ASSESSMENT (REOPENED LATER ON SUBJE CT MATTER OF INSTANT APPEAL) HOLDING IT ENTITLED FOR SECTION 10B DEDUCTION. ITS CASE QUA REVENUE S GROUND NO. 2 IS TO QUA SET OFF OF I.T.A NO. 3002 /AHD/2011 A.Y. 2004 - 05 PAGE NO ITO VS. M/S. TONIRA PHARMA LTD 3 LOSSES AND DEPRECIATION INCLUDING UNABSORBED DEPRECIATION OF THE NON ELI GIBLE UNITS AGAINST PROFITS OF THE ELIGIBLE UNITS DRAW SUPPORT FROM HON BLE JURISDICTIONAL HIGH COURT IN (2015) 370 ITR 21 (GUJ) CIT VS. ACE SOFTWARE EXPORT LTD AS WELL AS THE TRIBUNAL S SPECIAL BENCH DECISION IN SCIENTIFIC ATLANTA INDIA T ECHNOLOGY PVT. LTD VS. ACIT 129 TTJ 273 (CHENNAI) DECIDING THE VERY ISSUE AGAINST THE REVENUE. THE ASSESSEE S SUBMISSION QUA SECTION 35D DEDUCTION RAISED IN GROUND NO. 3 IS THAT THE TRIBUNAL (SUPRA) HAS ALREADY DECIDED THIS ISSUE IN THE REVENUE S FAVOUR. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILE. THE REVENUE S FIRST SUBSTANTIVE GROUND CHALLENGES SECTION 10B DEDUCTION ALLOWED TO THE ASSESSEE. IT HAS COME ON RECORD THAT THE TRIBUNAL IN MAIN ASSESSMENT (SUPRA) HAS RELIED UPON EARLIER DECISIONS IN ASSESSMENT YEAR 2000 - 01, 01 - 02, 03 - 04 AND 2006 - 07 HOLD ING THE ASSESSEE ENTITLED FOR THE IMPUGNED DEDUCTION. NO DISTINCTION ON FACTS IS POINTED OUT. THE REVENUE S FIRST GROUND ACCORDINGLY FAILS. COMI NG TO ITS SECOND GROUND OF SET OFF OF LOSS/ DEPRECIATION VIS - - VIS SECTION 10B DEDUCTION IS ALREADY COVERED BY HON BLE JURISDICTIONAL HIGH COURT DECISION AND THAT OF THE TRIBUNAL (SUPRA). WE ACCORDINGLY REJECT THIS SECOND GROUND AS WELL. WE PROCEED FURTHER AND FIND THAT LD. CO - ORDINATE BENCH HAS DECIDED THE VERY ISSUE OF SECTION 35D DEDUCTION (SUPRA) AGAINST TH E ASSESSEE. WE APPRECIATE THE FAIR STAND ADOPTED BY THE LEARNED AUTHORIZED REPRESENTATIVE IN THIS REGARD. THIS THIRD GROUND SUCCEEDS. I.T.A NO. 3002 /AHD/2011 A.Y. 2004 - 05 PAGE NO ITO VS. M/S. TONIRA PHARMA LTD 4 6. THIS REVENUE S APPEAL IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 14 - 10 - 2015 SD/ - SD/ - ( MANISH BORAD ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 14 /10 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER/ , / ,