LOVELY FRAGRANCES, MUMBAI V. DCIT 24(2), MUMBAI

ITA 3352/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4501 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Opportunity of being heard
• Section: 80IA; 201

Judgement Text

1 I.T.A. NO. 3352 /MUM/2019 I N THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) I.T.A. NO. 3352 /MUM/201 9 (ASSESSMENT YEAR 20 08 - 09 ) M/S LOVELY FRAGRANCE 303/A, SKYLINE ICON NEAR MITTAL INDUSTRIAL ESTATE ANDHERI KURLA ROAD, ANDHERI(E) MUMBAI - 400 059 PAN : AAAFL1837E VS DCIT, CIRCLE 24(2), MUMBAI APPELLANT RESPONDENT APPELLANT BY S HRI MAHAVIR JAIN , AR RESPONDENT BY SMT. SMITA VERMA, DR DATE OF HEARING 25 - 0 3 - 2021 DATE OF PRONOUNCEMENT 1 5 - 0 4 - 2021 O R D E R PER SAKTIJIT DEY, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DATED 0 7 - 0 2 - 201 9 OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 39 , MUMBAI, FOR THE ASSESSMENT YEAR 20 08 - 09 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO DISALLOWANCE OF A PART OF DEDUCTION CLAIMED U NDER SECTION 80IA OF THE INCOME TAX ACT , 1961 . 2 I.T.A. NO. 3352 /MUM/2019 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, A PARTNERSHIP FIRM , IS ENGAGED IN MANUFACTURING OF FRAGRANCE, ATTAR AND ALLIED PRODUCTS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 30 - 09 - 2008 DECLARING TOTAL INCOME OF RS.8,30,100/ - AFTER CLAIMING DEDUCTION U NDER SECTION 80IA OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, WHILE EXAMINING THE COMPUTATI ON OF DEDUCTION U NDER SECTION 80IA OF THE ACT, NOTICED THAT THE ASSESSEE HAS CLAIMED THE DEDUCTION WITHOUT REDUCING THE LOSS OF THE EARLIER YEARS. THEREFORE, HE RE - COMPUTED THE DEDUCTION U NDER SECTION 80IA OF THE ACT, AFTER REDUCING THE LOSS FROM THE BUSI NESS PROFIT OF THE CURRENT YEAR. ASSESSEE CHALLENGED THE AFORESAID DECISION OF THE ASSESSING OFFICER BEFORE THE FIRST APPELLATE AUTHORITY STATING THAT LOSS PERTAINING TO EARLIER YEARS PRIOR TO THE INITIAL ASSESSMENT YEAR , WHEREIN , THE ASSESSEE FIRST TIME B ECAME ELIGIBLE FOR DEDUCTION U NDER SECTION 80IA OF THE ACT, CANNOT BE REDUCED FROM THE BUSINESS PROFIT OF THE CURRENT YEAR FOR COMPUTING DEDUCTION U NDER SECTION 80IA OF THE ACT. THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS), HOWEVER, DID NOT ACCEPT THE AFORESAID CLAIM OF THE ASSESSEE. 4. R EITERATING THE STAND TAKEN BEFORE THE FIRST APPELLATE AUTHORITY , LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT V S HERCULES HOISTS LTD IN INCOME TAX APPEAL NO.707OF 2014 DATED 14 TH JUNE,2017. 5. THE L EARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED, SINCE , THE ASSESSEE DID NOT FURNISH THE FACTUAL DET AILS EITHER AT THE ASSESSMENT STAGE OR EVEN BEFORE THE FIRST APPELLATE AUTHORITY, THE CLAIM OF THE ASSESSEE HAS TO BE FACTUALLY EXAMINED BY THE ASSESSING OFFICER. 3 I.T.A. NO. 3352 /MUM/2019 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. THOUGH , WE ACCEPT T HE LEGAL PROPOSITION ADVANCED BY THE L EARNED COUNSEL FOR THE ASSESSEE THAT LOSSES PERTAINING TO ASSESSMENT YEARS PRIOR TO THE INITIAL ASSESSMENT YEAR , WHEREIN , THE ASSESSEE BECAME EL I GIBLE TO CLAIM DEDUCTION U NDER SECTION 80IA OF THE ACT CANNOT BE REDUCED FROM THE BUSINESS PROFIT ; HOWEVER, ON PERUSAL OF THE IMPUGNED ORDER OF L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) , WE FIND THAT HE HAS DISALLOWED ASSESSEES CLAIM ON THE REASONING THAT THE ASSESSEE RAISED THE ISSUE FOR THE FIRST TIME BEFORE HIM THROUGH A N ADDITIONAL GROUND AND THE CRUCIAL FACTS RELATING TO THE YEAR OF COMMENCEMENT OF BUSINESS, THE INITIAL YEAR OF CLAIM, PROFITS FROM THE UNIT SINCE THE INITIAL YEAR, ETC. WERE NOT PLACED BEFORE HIM. IN OUR VIEW, THE AFORESAID FACTUAL DETAILS , AS MENTIONED BY THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) , REQUIRES TO BE VERIFIED BEFORE APPLYING THE LEGAL PRINCIPLES FOR THE PURPOSE OF ALLOWING ASSESSEES CLAIM OF DEDUCTION. SINCE , ALL THESE FACTS HAVE NEITHER BEEN BROUGHT ON RECORD NOR VERIFIED BY ANY OF T HE DEPARTMENTAL AUTHORITIES, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER EXAMINING ALL RELEVANT FACTS. IT IS ALSO MADE CLEAR , THE ASSESSING OFFICER, AFTER VERIFYING THE FACTS , MUST DECIDE THE ISSUE KEEPING IN VIEW THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS HERCULES HOISTS LTD (SUPRA). NEEDLESS TO MENTION, ASSESSEE MUST BE PROVIDED A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE ISSUE. GROUNDS ARE ALLOWED FOR STATISTICAL PURP OSE. 6 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 4 I.T.A. NO. 3352 /MUM/2019 ORDER PRONOUNCED ON 1 5 /0 4 /2021. S D / - S D / - ( MANOJ KUMAR AGGARWAL ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 5 /0 4 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI