HINDUSTAN ESSENTIAL OIL CO., MUMBAI V. ITO 14(2)-1, MUMBAI

ITA 3580/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1726 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R.K. PANDA, AM & SMT. ASHA VIJAYARAGHAVAN, JM I.T.A. NO. 3580/MUM/2009 (ASSESSMENT YEAR 2006-07) M/S. HINDUSTAN ESSENTIAL OIL CO. 206, 2 ND FLOOR, ANAND BHAVAN, 17, BABU GENU ROAD, MUMBAI-400 002 PAN: AAAFH2700G VS. THE I.T.O.-14(2)-1 MUMBAI APPELLANT RESPONDENT I.T.A. NO. 3684/MUM/2009 (ASSESSMENT YEAR 2006-07) THE ASST. CIT-14(2) EARNEST HOUSE, 3 RD FLOOR, NATIMAN POINT, MUMBAI-400 021 VS. M/S. HINDUSTAN ESSENTIAL OIL CO. 206, 2 ND FLOOR, ANAND BHAVAN, 17, BABU GENU ROAD, MUMBAI-400 002 PAN: AAAFH2700G APPELLANT RESPONDENT ASSESSEE BY: MR. NARESH JAIN REVENUE BY: MR. KESHAVE SAXENA O R D E R DATE OF HEARING: 03.06.2010 DATE OF ORDER: 11.06.2010 PER R.K. PANDA, AM: THESE ARE CROSS APPEALS, THE FIRST ONE FILED BY T HE ASSESSEE AND THE SECOND ONE FILED BY THE REVENUE AN D ARE DIRECTED AGAINST THE ORDER DATED 30 TH MARCH, 2009 OF THE CIT(A)-XIV, MUMBAI RELATING TO ASSESSMENT YEAR 2006 -07. FOR THE SAKE OF CONVENIENCE, BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. I.T.A. NOS. 3580&3684/MUM/2009 M/S. HINDUSTAN ESSENTIAL OIL CO. ======================== 2 I.T.A. NO. 3580/MUM/09 (BY THE ASSESSEE) 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (A)- XIV ERRED IN MAKING THE APPORTIONMENT OF EXPENSES FROM MUMBAI UNIT TO NILAKOTTAI UNIT IN THE RATIO OF TURNOVER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (A)- XIV ERRED IN UNDERTAKING ENHANCEMENT PROCEEDING WITH RESPECT TO APPORTIONMENT OF EXPENSES FROM MUMBAI UNIT TO NILAKOTTAI UNIT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , SUBMITTED THAT THE ABOVE GROUNDS ARE AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSE ES OWN CASE VIDE I.T.A. NO. 4884/MUM/08 ORDER DATED 2 ND DECEMBER,2009. IN VIEW OF THE ABOVE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE, THE GROUNDS RAISE D BY THE ASSESSEE ARE DISMISSED. I.T.A. NO. 3684/MUM/2009 (BY THE REVENUE) : 4. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN HOLDING THAT APPELLANT WAS ENGAGED IN THE MANUFACTURING OF PERFUMERY PRODUCTS WHICH WAS COMMERCIALLY AND CHEMICALLY DIFFERENT FROM THE RAW MATERIAL AND THEREFORE, THE APPELLANT FULFILLED THE CONDITIONS OF SEC. 10B IN RESPECT OF NILAKOTTAI UNIT AND THEREFORE, THE AO WAS NOT JUSTIFIED TO DENY DEDUCTION U/S. 10B IN RESPECT OF THE PROFIT FROM NILAKOTTAI UNIT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD SIMPLY DIVERTED ITS BUSINESS FROM MUMBAI UNIT TO NILAKOTTAI UNIT WHICH AMOUNTS TO SPLITTING UP OF THE BUSINESS ALREADY IN EXISTENCE AND THE PROCESS OF I.T.A. NOS. 3580&3684/MUM/2009 M/S. HINDUSTAN ESSENTIAL OIL CO. ======================== 3 MAKING INDIA ATTARS BASICALLY CONSISTS OF BLENDING DIFFERENT OIL CHEMICALS, SPICES AND PERFUMES WHICH CAN AT BEST BE CALLED PROCESSING AND NOT MANUFACTURING OR PRODUCTION OF ANY ARTICLE OR THING. 3. FOR THESE AND OTHER REASONS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A) BE QUASHED AND THAT OF THE AO RESTORED. 5. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF INDIAN ATTAR, ESSENTIAL OIL AND PERFUMERY COMPOUNDS, ETC. THE AS SESSEE FILED ITS RETURN OF INCOME DECLARING NIL INCOME A FTER CLAIMING DEDUCTION OF RS.47,21,702 U/S. 10B OF THE INCOME-TAX ACT, 1961 (THE ACT) IN RESPECT OF PROFIT DERIVED FROM ITS NILAKOTTAI UNIT. THE ASSESSING OFFICER FO LLOWING HIS ORDER FOR THE EARLIER YEAR REJECTED THE CLAIM O F THE ASSESSEE AND BROUGHT TO TAX THE AMOUNT OF RS.47,21, 702. 6. IN APPEAL, THE CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR FOR A.Y. 2003-04 DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S. 10B OF THE ACT. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 7. AFTER HEARING BOTH THE SIDES, WE FIND THE TRIBUNAL IN THE APPEAL FILED BY THE REVENUE FOR THE A.Y. 2003-0 4 VIDE I.T.A. NO. 4100/MUM/2008 ORDER DATED 2 ND DECEMBER, 2009 HAS DISCUSSED THE ISSUE IN GREAT DETAIL AND AT PARA 11 OF THE ORDER HAS HELD THAT THE ASSESSEE IS ELIGI BLE FOR DEDUCTION U/S. 10B BOTH ON FACTS AND IN LAW. ACCOR DINGLY THE ORDER OF THE CIT(A) WAS CONFIRMED AND THE GROUN D RAISED BY THE REVENUE WAS DISMISSED. SINCE THE FAC TS FOR THE INSTANT YEAR ARE IDENTICAL TO THE FACTS OF THE A.Y. 2003- 04, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUN AL IN I.T.A. NOS. 3580&3684/MUM/2009 M/S. HINDUSTAN ESSENTIAL OIL CO. ======================== 4 ASSESSEES OWN CASE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 11 TH JUNE, 2010. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 11 TH JUNE, 2010 COPY TO: (1) THE APPELLANT, (2) THE RESPONDENT, (3) THE CIT(A), CENTRAL-IV, MUMBAI, (4) THE CIT, CENTRAL-II, MUMBAI, (5) THE DR, H BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO