SHALIMAR PACKAGING P. LTD ( NOW MERGED WITH TIME TECHNOPLAST LTD, MUMBAI V. DCIT RG 8(3), MUMBAI

ITA 3432/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1951 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 26-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MAYANK PRIYADARSHI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, E BENCH, MUMBAI. BEFORE SHRI S.V.MEHROTRA, AM & SMT ASHA VIJAYRAGHA VAN,JM I.T.A. NO. 3432 /MUM/2009 ASSESSMENT YEAR: 2005-06 SHALIMAR PACKAGING P.LTD., V. THE DCIT, RANGE 8(3 ), (NOW MERGED WITH TIME TCHNOPLAST LTD.), MUMBAI. 102, TODI COMPLEX, 35 SAKI VIHAR ROAD, ANDHERI(E), MUMBAI. PA NO.AADCS 9560 K (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI RAKESH JOSHI REVENUE BY : SHRI MAYANK PRIYADARSHI O R D E R PER S.V.MEHROTRA, AM THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 21.4.2009 OF LD CIT (A)-XXVIII, MUMBAI TREATING THE INTEREST ON FDR OF RS.4,07,902/- AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME FOR THE ASSESSMENT YEAR 2006-07. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE, IN THE REL EVANT ASSESSMENT YEAR, WAS ENGAGED IN THE MANUFACTURING OF PLASTIC ARTIFICIAL TURF AND LAWN & TRADING IN GOODS. IT HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.40,90 ,132/-, INTER ALIA, CLAIMING DEDUCTION U/S. 80IB. THE AO NOTICED THAT THE ASSESSEE HAD DE BITED INTEREST EXPENSES OF RS.23,13,506/- AFTER NETTING IT OFF WITH INTEREST I NCOME OF RS.4,07,902/- ON FDRS. HE OBSERVED THAT INCOME OF RS.4,07,902/- WAS ASSESSABL E AS INCOME FROM OTHER SOURCES. HE FURTHER OBSERVED THAT THIS INTEREST INCOME WAS NOT DERIVED FROM MANUFACTURING ACTIVITY ALSO AND, THEREFORE, NOT ELIGIBLE FOR DEDUCTION U/S . 80IB. LD CIT (A) REJECTED THIS GROUND OF APPEAL FOLLOWING THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF PANDIAN CHEMICALS LTD V. CIT, 262 ITR 278 (SC). 2 3. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSES SEE FILED BEFORE US A COPY OF TRIBUNALS ORDER DATED 5 TH JUNE, 2008 IN ITA NO.6360/M/2005 FOR THE ASSESSMEN T YEAR 2002-03 IN ITS OWN CASE, WHEREIN, THE TRIBUNAL HAD ALLOWED THE ASSESSES CLAIM ON THIS COUNT. HE, THEREFORE, SUBMITTED THAT THE ASSESSEE S CLAIM BE ALLOWED. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT NOW THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA, 317 ITR 218 (SC), WHEREIN, I T WAS HELD THAT SECTION 80-IB PROVIDES FOR ALLOWING OF DEDUCTION IN RESPECT OF PROFITS AND GAINS DERIVED FROM THE ELIGIBLE BUSINESS. THE CONNOTATION OF THE WORDS DERIVED FRO M IS NARROWER AS COMPARED TO THAT OF THE WORDS ATTRIBUTABLE TO. BY USING THE EXPRESSI ON DERIVED FROM PARLIAMENT INTENDED TO COVER SOURCES NOT BEYOND THE FIRST DEGREE. IN THIS CASE, THE SOURCE OF INCOME IS FIXED DEPOSIT AND NOT INDUSTRIAL UNDERTAKING. THEREFO RE, FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA), WE UPHOLD THE ORDER OF LD CIT(A) AND REJECT THE GROUND TAKEN BY THE ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS DISMISSED. PRONOUNCED ON 30 TH APRIL, 2010 SD/- (ASHA VIJAYRAGHAVAN) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANTMEMBER) MUMBAI, DATED 30 TH APRIL, 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 3 DATE INITIALS 1. DRAFT DICTATED ON 21.4.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 21.4.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER 4