ACIT 2(1), MUMBAI V. JUPITER REMEDIES (P) LTD, MUMBAI

ITA 3120/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49151 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 06-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: D R JAI N
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, I, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND T.R.SOOD (A.M ) ITA NO.3120/MUM/2010 (ASSESSMENT YEAR:2007-08) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1), ROOM NO.575, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 M/S JUPITER REMEDIES (P) LTD., (NOW KNOWN AS ADVANCE REMEDIES (P) LTD.) 12, GUNBOW STREET, FORT, MUMBAI-400001 PAN: AAACO1162G APPELLANT V/S RESPONDENT APPELLANT BY : SHRI S.K.S INGH RESPONDENT BY : SHRI D.R.JAI N O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 12.2.2010 PASSED BY THE LEA RNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2007-08. . 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURI NG AND SALE OF PHARMACEUTICAL PRODUCTS, FILED RETURN DECLA RING AN INCOME OF RS.1,28,80,716/-. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80-IB OF THE INCOME TAX ACT , 1961, (THE ACT) AMOUNTING TO RS.50,38,314/-. THE AO HAS NOT ITA NO.3120/MUM/2010 (ASSESSMENT YEAR:2007-08) 2 2 ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THA T THE ASSESSEE IS DOING LABOUR JOBS ON CONTRACT BASIS AND THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER S ECTION 80- IB OF THE ACT ON CONTRACT RECEIPT AND ACCORDINGLY THE AO AFTER DISALLOWING THE DEDUCTION CLAIMED UNDER SECTI ON 80-IB COMPLETED THE ASSESSMENT AT AN INCOME OF RS.1,79,19 ,034/- VIDE ORDER DATED 23.9.2009 PASSED UNDER SECTION 14 3(3) OF THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF IN COME TAX (A) FOLLOWING THE APPELLATE ORDER IN THE ASSESS EES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 AND THE JUDGME NT IN THE CASE OF CIT V/S TAJ FIRE WORKS INDUSTRIES (288 ITR 92), CIT V/S NORTHERN AROMATICS LTD. (196 CTR 479) AND T HE DECISION OF THE TRIBUNAL IN ADVANCE REMEDIES PVT. LTD. IN ITA NO.5714/MUM/2008 (AY-2005-06) ORDER DATED 31.8. 2009 HELD THAT THE JOB WORK CHARGES RECEIVED BY THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT AND ACCORDINGLY ALLOWED THE CLAIM OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE REVENUE IS IN A PPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE DELETI ON OF DISALLOWANCE OF DEDUCTION UNDER SECTION 80-IB OF T HE ACT. 4. AT THE TIME OF HEARING, THE LEARNED D.R. SUPPORT S THE ORDER OF THE AO. ITA NO.3120/MUM/2010 (ASSESSMENT YEAR:2007-08) 3 3 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE WHILE RELYING ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A) SUBMITS THAT THE ISS UE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORD ER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN THE ACIT 2(1 ) V/S M/S.JUPITER REMEDIES (P) LTD. IN ITA NO.681/M/2010 (AY- 2006-07) ORDER DATED 31.08.2010, THEREFORE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A) BE U PHELD. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND MERIT IN THE PLEA OF THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE ISSUE STANDS COVERED AGAINST THE REVENUE A ND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNA L IN ASSESSEES OWN CASE (SUPRA) WHEREIN THE TRIBUNAL V IDE PARAGRAPH 3 OF THE ORDER DATED 31.8.2010 HAS HELD A S UNDER : 3. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DI SPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTIO N 80IB IN RESPECT OF MANUFACTURING OF PHARMACEUTICAL FORMULATION ON JOB WORK BASIS. THERE IS NO DISPUTE THAT THE ASSESSEE WAS MANUFACTURING FORMULATIONS USING B ULK DRUGS AND THE FINAL PRODUCTS WERE COMMERCIALLY DIST INCT FROM THE RAW MATERIAL AND THEREFORE IT IS A CASE OF MANUFACTURING ACTIVITY. THE CLAIM HAS BEEN DISALLOW ED BY THE AO ON THE GROUND THE GOODS HAD BEEN PRODUCED ON JOB WORK BASIS FOR OTHERS. BUT THE DEDUCTION CANNOT BE ITA NO.3120/MUM/2010 (ASSESSMENT YEAR:2007-08) 4 4 DISALLOWED ONLY ON THE GROUND THAT THE ASSESSEE IS MANUFACTURING GOODS FOR OTHERS ON JOB WORK BASIS AS HELD BY THE HONBLE HIGH COURT OF MADRAS IN CASE OF CIT VS TAJ FIRE WORKS INDUSTRIES (288 ITR 92). SAME VIEW H AS BEEN TAKEN BY HONBLE HIGH COURT OF DELHI IN CASE O F CIT VS NORTHERN AROMATICS LTD. (196 ITR 479). NO CONTRA RY JUDGMENT OF THE JURISDICTIONAL HIGH COURT OR THE AP EX COURT HAS BEEN BROUGHT TO OUR NOTICE. WE THEREFORE SEE NO INFIRMITY IN THE ORDER OF CIT(A) ALLOWING THE DE DUCTION TO THE ASSESSEE AND THE SAME IS THEREFORE UPHELD. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING TH E ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA) HOL D THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) WAS FULLY JU STIFIED IN HOLDING THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE JOB WORK CHARGES RECEIVED BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT AND ACCOR DINGLY THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A) IS UPHELD. THE GROUNDS TAKEN BY THE REVENUE ARE TH EREFORE REJECTED. 7. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2011. SD SD (T.R.SOOD) (D.K.AGARWAL) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED 10TH JUNE, 2011. SRL: ITA NO.3120/MUM/2010 (ASSESSMENT YEAR:2007-08) 5 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI