ESTER LUB TECHNOLOGIES, MUMBAI V. ITO 15(2)(3), MUMBAI

ITA 3626/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0512 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Additional evidence
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PWAN SINGH, JUDICIAL MEMBER ITA NO.3626 /MUM/2013 (ASSESSMENT YEAR: 2006-07) M/S. ESTER - LUB TECHNOLOGIES VS. INCOME TAX OFFICER - 15(2)(3) 205/206, KALPATRU PLAZA CHINCHOLI BUNDER ROAD MALAD (W), MUMBAI 400064 MUMBAI PAN AAK MF 0861D APPELLANT RESPONDENT ITA NOS.5304 & 6975 /MUM/2014 (ASSESSMENT YEARS: 2010-11 & 2011-12) ACIT, CIRCLE 15(2) VS. M/S. ESTER - LUB TECHNOLOGIES ROOM NO. 113, MATRU MANDIR GRANT ROAD (WEST) MUMBAI 400007 205/206, KALPATARU PLAZA CHINCHOLI BUNDER ROAD MALAD (W), MUMBAI 400064 PAN AAKFM0861D APPELLANT RESPONDENT ASSESSEE BY: NONE REVENUE BY: SHRI V. JUSTIN DATE OF HEARING: 03.08.2017 DATE OF PRONOUNCEMENT: 08.08.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THESE APPEALS HAVE BEEN FILED AGAINST THE ORDERS OF THE CIT(A)-26, MUMBAI FOR ASSESSMENT YEARS 2006-07, 2010-11 AND 20 11-12. ASSESSEE HAS FILED APPEAL FOR A.Y. 2006-07 WHILE THE REVENUE HAS COME IN APPEAL FOR ASSESSMENT YEARS 2010-11 & 2011-12. 2. ASSESSEE HAS TAKEN AS MANY AS SIX GROUNDS OF APPEAL BUT DID NOT PRESS GROUND NOS. 1, 3, 5 AND 6. THUS, GROUND NOS. 2 AND 4 SURVIVE FOR OUR ADJUDICATION AS UNDER. 2. WHETHER CIT (APPEAL) IS CORRECT IN FACT AND IN LAW ON NOT DECIDING THE ISSUE OF WHETHER LABOUR JOB ACTIVITY IS MANUFAC TURING ACTIVITY WHICH WAS GROUND OF APPEAL BEFORE HIM. ITA NOS. 3626. 5304 & 6974/MUM/2014 M/S. ESTER-LUB TECHNOLOGIES 2 4. WHETHER CIT (APPEAL) IS CORRECT IN HOLDING THAT ASSESSEES UNITS IS FORMED BY SPLITTING UP OR RECONSTRUCTION OF A BU SINESS IN EXISTENCE AND DISALLOWING THE CLAIM OF DEDUCTION U/ S 80IB OF RS.60,04,840/-. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE , WE HAVE DECIDED TO DISPOSE OFF THESE APPEALS AFTER HEARING THE LEAR NED D.R. WE HAVE HEARD THE LEARNED D.R. AND CAREFULLY CONSIDERED THE ORDER S OF THE AUTHORITIES BELOW. WE NOTED THAT THE ASSESSEE HAS TAKEN A GROUN D BEFORE THE CIT(A) IN THE IMPUGNED ASSESSMENT YEAR IN RESPECT OF ASSESSEE S CLAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF LABOUR CHARGES EAR NED AMOUNTING TO ` 60,04,835/-. WE NOTED THAT THE AO UNDER PAR 4.9 OF HIS ORDER TOOK THE VIEW THAT OUT OF THE LABOUR CHARGERS RECEIVED BY THE ASS ESSEE AMOUNTING TO ` 85,78,335/- AN AMOUNT OF ` 60,04,835/- @70% WOULD NOT QUALIFY FOR DEDUCTION UNDER SECTION 80IB(5). THE CIT(A) DID NOT CONSIDER THIS GROUND. IN VIEW OF THIS WE SET ASIDE THE ORDER OF THE CIT(A) A ND RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) WITH THE DIRECTION THAT THE CIT( A) SHALL ADJUDICATE THIS ISSUE AND GIVE A FINDING IN ACCORDANCE WITH LAW AS TO WHE THER THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IB OR NOT. 4. NOW COMING TO THE APPEALS FILED BY THE REVENUE THE LEARNED D.R. FAIRLY CONCEDED THAT THE ISSUE INVOLVED IN BOTH THE APPEALS FOR ASSESSMENT YEARS 2010-11 AND 2011-12 ARE COMMON AND WHATEVER V IEW THE TRIBUNAL MAY TAKE IN A.Y. 2010-11 THE SAME VIEW MAY BE TAKEN IN A.Y. 2011-12. THE GROUNDS OF APPEAL IN BOTH THE YEARS READ AS UND ER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB(5) MERELY ON THE BASIS OF THE ERRONEOUS DECISION GIVEN BY THE ASSESSING OFFICER I N THE SET ASIDE PROCEEDING OF A.Y. 2007-08 WITHOUT GOING INTO MERIT S OF THE CASE AND RECORDS OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE RELEVANT ISSUE RAI SED SPECIFICALLY IN THE ASSESSMENT PROCEEDINGS OF A.Y. 2010-11 AVAILABL E ON THE RECORD REGARDING SPLITTING THE EXISTING UNIT OF SISTER CON CERN AND SETTING UP THE ASSESSEES UNDERTAKING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE IN THE F ORM OF ASSESSMENT ORDER FOR A.Y. 2007-08 IN SET ASIDE PROCEEDING PASS ED AFTER THE FILING OF APPEAL, WITHOUT CONFRONTING THE DEPARTMENT. ITA NOS. 3626. 5304 & 6974/MUM/2014 M/S. ESTER-LUB TECHNOLOGIES 3 5. WE HAVE HEARD THE LEARNED D.R. AND CAREFULLY PERUS ED THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE CONDIT IONS AS STIPULATED UNDER SECTION 80IB FOR THE ELIGIBILITY OF THE CLAIM, WHET HER THE ASSESSEE IS ENGAGED IN MANUFACTURING OR NOT HAD TO BE SATISFIED IN THE FIRST YEAR AND EVEN THE CONDITION WHETHER THE UNIT WAS FORMED BY SPLITTING OF ANY OTHER UNIT OR NOT HAS ALSO TO BE DECIDED ON THE BASIS OF THE FACTS IN THE INITIAL ASSESSMENT YEAR. THE CIT(A) IN THIS CASE HAS ALLOWED THE CLAIM OF THE ASSESSEE AND HELD THAT THE ASSESSEES UNDERTAKING HAS NOT ESTABLISHED BY SPLITTING THE EXISTING UNIT OF THE SISTER CONCERN. SINCE THE CLAI M OF THE ASSESSEE HAS BEEN ALLOWED IN A.Y. 2007-08 BY THIS TRIBUNAL VIDE ORDER DATED 13.06.2012, THEREFORE IN OUR VIEW THE CIT(A) WAS CO RRECT IN LAW IN ALLOWING THE CLAIM OF THE ASSESSEE. WE, THEREFORE, DO NOT FI ND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A). 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES WHILE BOTH THE APPEALS OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2017. SD/ - SD/ - (PWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED 8 TH AUGUST, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -26, MUMBAI 4. THE CIT - 15, MUMBAI 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.