ASST CIT 8(1), MUMBAI V. ENEM NOSTRUM REMEDIES P. LTD, MUMBAI

ITA 3164/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5087 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 20-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Section: 80IB; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI , BEFORE SHRI D.KARUNAKARA RAO , A M & SHRI SANJAY GARG , J M ITA NO. 31 64 /MUM/201 2 ( ASSESSMENT YEAR :200 8 - 200 9 ) ACIT - 8(1) , MUMBAI - 20 VS. M/S ENEM NOSTRUM REMEDIES PVT. LTD., 201 - 204, GAYATRI COMMERCIAL COMPLEX, MAROL, ANDHERI (E), MUMBAI - 400 059 PAN/GIR NO. : A AACE 8766 G ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR . GIRIJA DAYAL /ASSESSEE BY : MR. ANIL SATHE DATE OF HEARING : 20 TH NOVEMBER , 201 3 DATE OF PRONO UNCEMENT : 20 TH NOVEMBER,2013 O R D E R PER D.KARUNAKARA RAO ( A .M.) : TH IS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 20 - 2 - 2012 , PASSED BY THE LEARNED CIT(A) - 16 , MUMBAI FOR THE ASSESSMENT YEAR 200 8 - 2009 . 2 . THE ONLY ISSUE INVOLVED IN ALL THE FOUR GROUNDS RAISED BY THE REVENUE IN ITS APPEAL IS IN REGARD TO ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB(8A) OF THE ACT. 3 . AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE FILED A COP Y OF THE ORDER OF THE MUMBAI BENCH OF TH E TRIBUNAL PASSED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2003 - 04 & 2004 - 05, IN ITA ITA NO. 31 64 /20 1 2 2 NOS.1179 & 1180/M/2008, VIDE ORDER DATED 28 - 8 - 2008 AND MENTIONED THAT SIMILAR CLAIM OF THE ASSESSEE IN EARLIER YEARS ARE ALLOWED. LEARNED COUNSEL FOR THE ASSESSEE ALSO BROUGHT OUR ATTENTION TO THE CONTENTS OF THE PARA 18 OF THE ORDER OF THE TRIBUNA L (SUPRA) AND SUBMITTED THAT THE TRIBUNAL REVERSED THE ORDER OF THE CIT(A) AND DIRECTED THE AO TO ALLOW THE DEDUCTION UNDER SECTION 80IB(8A) OF THE ACT. FURTHER, THE ASSESSEE A LSO FILED A COPY OF ANOTHER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006 - 07, DECIDED IN ITA NO.4076/M/2009, VIDE ORDER DATED 30 - 4 - 2010, WHEREIN AN IDENTICAL ISSUE WAS ADJUDICATED BY THIS ORDER OF THE TRIBUNAL IN FAVOUR OF THE A SSESSEE AND DISMISSED THE APPEAL OF THE REVENUE BY THIS ORDER. 4 . ON THE OTHER HAND, LEARNED DR FOR THE REVENUE FAIRLY RELIED UPON THE ORDER OF THE AO. 5 . WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE TRIBUNAL. WE FOUND THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF CONTRACT RESEARCH AND PROVIDING LABORATORY FACILITIES. WE ALSO FOUND THAT THE FACTS ARE IDENTICAL TO ON ES DISCUSSED AND DELIBERATED IN THE EARLIER ORDERS FOR THE ASSESSMENT YEARS 200 3 - 04, 2004 - 05 & 2006 - 07, WHEREIN T HE TRIBUNAL HAS D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THE AO WAS ACCORDINGLY DIRECTED TO GRANT THE DEDUCTION UNDER SECTION 80IB(8A) OF THE ACT. IN PARA 18 OF THE ORDER DATED 28 - 8 - 2008, DECIDED IN ITA NOS. 1179 & 1180/M/2008, THE TRIBUNAL HAS HELD AS UNDER : - ITA NO. 31 64 /20 1 2 3 18. SUB - SECTION (I) OF SECTION 80IB PROVIDES THAT WHERE THE GROSS TOTAL INCOME OF AN ASSES SEE INCLUDES ANY PROFITS AND GA IN DERIVED FROM ANY BUSINESS REFERRED TO IN SUB - SECTIONS (3) TO (11), (11A), AND (11B) , THERE SHALL BE ALLOWED A DEDUCTION FROM SUCH PROFI TS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OR ASSESSMENT YEARS AS IS SPECIFIED IN THIS SECTION SUBJECT TO AND IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, SUB - SECTION(2) DEALS WI TH INDUSTRIAL UNDERTAKINGS WHICH ARE ELIGIBL E [OR DEDUCTION AND NEED TO FULFILL THE CONDITIONS ENSHRINED IN CLAUSES (I) TO [IV] .OF THIS SUB - SECTION, IN OTHER 'WORDS, IF THE ELIGIBLE ASSESSEE IS AN INDUSTRIAL UNDERTAKING THEN IT IS INCUMBENT UPON IT TO SATISFY ALL THE 4 CONDITIONS CUMULATIVELY AS SP ECIFIED IN SUB - SECTION (2). ON GOING FURTHER WE NOTE THAT SUB - SECTION (3) PROVIDES DEDUCTION IN T HE CASE OF INDUSTRIAL UNDERTAKING I F IT IS A SMALL SCALE INDUSTRIAL UNDERTAKING AND BEGINS TO MANUFACTURE ARTICLES OR TH I NGS DURING THE PERIOD SPECIFIED. SIMIL ARLY SUB - SECTION (4) AGAIN APPLIES TO AN INDUSTRIAL UNDERTAKING WHICH IS ESTABLISHED IN INDUSTRIALLY BACKWARD STATE SPECIFIED IN THE EIGHTH SCHEDULE. SUB - SECTION (5) ALSO APPLIES TO INDUSTRIAL UNDERTAKING LOCATED IN SUC H I N DUSTRIAL BACKWARD DISTRICTS AS CE NTRAL GOVERNMENT MAY SPE CIFY . THUS IT CAN BE SEEN, THAT SUB - SECTIONS (3) TO (5) PERMIT DEDUCTION TO INDUSTRIAL U NDERTAKINGS FULFILLING THE REQUISITE CONDITIONS AND SUB - SECT ION (2) OPENS WITH THE WORDS: 'T HIS SECTION APPLIES TO ANY INDUSTRIAL UNDERTAKING WH ICH FULFILLS ALL THE FOLLOWING CONDITIONS NAMELY .. ' . GOING FURTHER WE OBSER VE THAT SUB - SECTIONS (6) TO ( 8 A) GRANT DEDUCTION TO THE ASSESSEES WHO ARE NOT COVERED WITHIN THE MEANING OF 'INDUSTRIAL UNDERTAKINGS', BUT ARE ENGAGED IN OTHER SPECIFIED BUSINESSE S. AS CAN BE SEEN THAT SUB - SECTION (6) APPLIES 'TO AN ASSESSEE W HO IS ENGAGED IN THE BUSINESS OF SHIPPING. SIMILARLY SUB - SECTION (7) PROVIDES DEDUCTION TO HOTELS ; SUB - SECTION (7A) TO MULTIPLEX THEATRES ; SUB - SECTION (7B) TO CONVE NTION CENTRES AND SUB - SEC TION (8 A) TO COMPANIES CARRYING ON SCIENTIFIC RESEARCH AND DEVELOPMENT. IT IS UNDER THIS LAST SUB - SECTION THAT THE ASSESSEE 'HAS BEEN GRANTED APPROVAL THE GOVERNMENT OF INDIA. ON GOING THROUGH THE SCHEME OF SECTION 80IB IN TOTALITY, WE OBSERVE THAT TH E FOUR CONDITIONS STIPULATED UNDER S U B - SECTION (2) ARE TO BE FULL F ILLED ONLY LF THE ELIGIBLE ASSESSEE IS AN INDUSTRIAL UNDERTAKING W ITHIN THE MEANING OF SUB - SECTIONS (3) TO (5), AS THE CASE MAY BE. THE ASSESSEE IS NOT AN INDUSTRIAL UNDERTAKING BUT IS OTHERWISE ELIGIBLE FOR DEDUCTION UNDER ANY OF OTHER SUB - SECTIONS DISCUSSED ABOVE, THEN THERE IS NO REQUIREMENT FOR IMPORTING THE CONDITIONS STIPULATED IN SUB - SECTION (2) WHICH ARE APPLICABLE TO INDUSTRIAL UNDERTAKINGS, AND REQUIRING THEIR SATISFACTION. S INCE THE INSTANT ASSESSEE IS ENGAGED IN THE BUSINESS OF CARRYING OUT SCIENTIFIC RESEARCH AND DEVELOPMENT AND HAS BEEN APPROVED BY THE GOVERNMENT OF INDIA FOR THE BENEFIT OF ITA NO. 31 64 /20 1 2 4 DEDUCTION U/S.80IB(8A), IN OUR CONSIDERED OPINION THE CONDITIONS OF SUB - SECTION (2) ARE NOT REQUIRED TO BE FULFILLED BY IT. THE LD. CIT(A) HAS INTERPRETED SECTION 80IB IN AN INCONSISTENT MANNER SO AS TO CAST SUCH OBLIGATIONS ON THE ASSESSEE WHICH HAVE NOT BEEN IMPOSED BY THE STATUTE. WE THEREFORE, OVERTURN THE IMPUGNED ORDER ON THIS ISSU E AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION. AND, IN PARA S 5 & 6 OF THE ORDER DATED 30 - 4 - 2010, DECIDED IN ITA NO.4076/M/2009, THE TRIBUNAL HAS HELD AS UNDER : - 5. IN APPEAL, THE CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL VIDE I.T.A. NOS. 1179 /MUM/08 AND 1180/MUM/08 ORDER DATED 20 TH AUGUST, 2008 FOR THE A.YS. 2003 - 04 AND 2004 - 05 ALLOWED THE CLAIM OF THE ASSESSEE FOR GRANT OF DEDUCTION U/S. 80IB(8A). AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DR FAIRLY CONCEDED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL AND THE REVENUE HAS GONE TO THE HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL. SINCE THE LEARNED CIT(A) HAS FOLLOWED THE ORDER OF THE TRIBUNAL FOR A.YS. 20 0 3 - 04 AND 20 04 - 05 IN ASSESSEES OWN CASE FOR THE EARLIER YEARS AND SINCE THE ORDER OF THE TRIBUNAL HAS NOT YET BEEN REVERSED BY THE HIGH COURT, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF THE CIT(A). THE G ROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 6 . CONSIDERING THE ABOVE SETTLED NATURE OF ISSUE ON SIMILAR FACTS, WE F OUND THAT THE GROUNDS RAISED BY THE REVENUE ARE NOT SUSTAINABLE. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF NOV. 201 3 . 20 TH 201 3 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( D.KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 20/11 /2013 /PKM , PS ITA NO. 31 64 /20 1 2 5 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPON DENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI