FLAWLESS DIAMOND (I) LTD, MUMBAI V. DCIT RG 5(1), MUMBAI

ITA 328/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75870 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 328/MUM/2014 ( / ASSESSMENT YEAR: 2010-11) FLAWLESS DIAMOND (INDIA) LTD. 136, PANCHRATNA, OPERA HOUSE, MUMBAI / VS. DY. CIT, RANGE 5 (1), ROOM NO.525, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 # ./$ ./PAN/GIR NO. AAACF 0778 R ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) #% ( ) / APPELLANT BY : SHRI VIJAY MEHTA &'#% ( ) / RESPONDENT BY : SHRI GIRIJA DAYAL *+ ( , / DATE OF HEARING : 12.03.2014 - ./ ( , / DATE OF PRONOUNCEMENT : 12.03.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-9, MUMBAI (CIT(A) FOR SHO RT) DATED 20.11.2013, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2010-11 VIDE ORDER DATED 22.03.2013. 2.1 OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE ASSESSEE, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE PRINCIPAL ISSUE 2 ITA NO.328/MUM/2014 (A.Y. 2010-11) FLAWLESS DIAMOND (INDIA) LTD. VS. DY. CIT ARISING IN THE INSTANT APPEAL, I.E., THE RESTRICTIO N IN THE DEDUCTION U/S.80-IC OF THE ACT, STANDS SINCE DECIDED BY THE TRIBUNAL IN ITS FAVOUR VIDE ITS ORDER FOR THE IMMEDIATELY TWO PRECEDING YEARS, BEING A.YS. 2008-09 & 2009-10, TAK ING US THROUGH THE RELEVANT PART (PARAS 16-18) OF ITS COMBINED ORDER FOR THAT YEAR ( IN ITA NOS. 2886 & 5617/MUM/2012 DATED 14.02.2014/PB PGS.1-23). FURTHER, THAT THIS W AS PRECISELY THE ISSUE FOR THOSE YEARS WOULD BE APPARENT FROM THE ASSESSMENT ORDER, AND TO WARD WHICH HE WOULD TAKE US THROUGH PARA 4 OF THE ASSESSMENT ORDER. IN FACT, EV EN THE LD. CIT(A) HAS FOR THE CURRENT YEAR FOLLOWED THE ORDER BY THE FIRST APPELLATE AUTH ORITY IN THE ASSESSEES CASE FOR THE PRECEDING YEAR. 2.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON TH E OTHER HAND, WOULD SUBMIT THAT THE ISSUE AS TO WHETHER THE ASSESSEES ACTIVITY OF CUTTING AND POLISHING OF DIAMONDS CONSTITUTES A MANUFACTURING ACTIVITY OR NOT, AS PER THE LATEST DECISION DATED 18.11.2014 OF THE APEX COURT BY A BENCH OF THREE JUDGES IN THE CA SE OF HEAVEN DIAMONDS PVT. LTD. (IN CIVIL APPEAL NO. 9936 OF 2012), SHALL HAVE TO BE DE CIDED ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF EACH CASE, AND THAT A SIMPLE RELIANC E ON THE DECISION IN THE CASE OF CIT VS. GEM INDIA MANUFACTURING CO. [2001] 249 ITR 307 (SC) WOULD NOT BE CORRECT. HOWEV ER, ON BEING QUERIED AS TO IF THE TRIBUNAL HAD CONSIDER ED THE SAID DECISION BY THE APEX COURT, OR THE FACTS OF THE ASSESSEES CASE, HE WOULD RATHE R CONCEDE TO IT BEING SO, NOR COULD POINT OUT ANY INFIRMITY EITHER IN LAW OR ON FACTS IN THE SAID ORDER, EVEN AS THE ORDER BY THE TRIBUNAL IN THE CASE OF M/S. BHAVANI GEMS VS. DY. CIT (IN ITA NO.6459/MUM/2011 DATED 22.11.2013) WAS PLACED BY HIM ON RECORD. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. NO DISTINGUISHING FEATURE WHATSOEVER HAS BEEN BROUGHT TO OUR NOTICE B Y THE LD. DR, WITH, RATHER, THE AUTHORITIES BELOW HAVING FOLLOWED THEIR DECISION FO R THE PRECEDING YEARS. THE TRIBUNAL HAS DISCUSSED THE FACTS OF THE CASE IN LIGHT OF THE OBT AINING LEGAL POSITION, AND WE FIND NO REASON TO TAKE ANY DIFFERENT VIEW IN THE MATTER. WE , ACCORDINGLY, ALLOW THE ASSESSEES APPEAL. THIS ANSWERS ASSESSEES GROUND NOS. 2 TO 5. FURTHER, WHILE GROUND NO. 1 IS GENERAL 3 ITA NO.328/MUM/2014 (A.Y. 2010-11) FLAWLESS DIAMOND (INDIA) LTD. VS. DY. CIT IN NATURE, WARRANTING NO ADJUDICATION, GROUND # 6, CHALLENGING THE LEVY OF MANDATORY INTEREST U/SS.234A, 234B & 234C OF THE ACT IS CONSE QUENTIAL IN NATURE. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 0/ 1 *2 30 ( + 4 ( 56 ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 12, 201 4 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 7 MUMBAI; 8* DATED : 26.03.2014 +.*../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. ;+< = &*>2 , , >2/ , 7 / DR, ITAT, MUMBAI 6. = ?3 @ / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 7 / ITAT, MUMBAI