POSHS METAL INDUSTRIES LTD., MUMBAI V. D.C.I.T.-10(2), MUMBAI

ITA 3703/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7392 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 08-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Assessee Lawyers: SAMEER G DALAL
• Keywords: Reasonable cause
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SR.VP AND SHRI P.M. JAGT AP, AM ITA. NO.3703/MUM/2009 (ASSESSMENT YEAR : 2005-06) POSHS METAL INDUSTRIES P.LTD. 2A RALYANDHAM, SION TROMBAY ROAD, MANKHURD, MUMBAI. PAN:AABCP4751D VS. THE DEPUTY COMMISSIONER OF INCOME TAX 10(2), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SAMEER G.DALAL RESPONDENT BY : MR. NAVEEN GUPTA, DR O R D E R PER R.V.EASWAR, SENIOR VICE PRESIDENT: THERE IS A DELAY OF FIVE DAYS IN FILING THE APPEAL. AN AFFIDAVIT FROM THE DIRECTOR OF THE ASSESSEE COMPANY HAS BEEN FILED EXPLAINING THE DELAY. WE ARE SATISFIED ON GOING THROUGH THE AFFIDAVIT THAT T HERE WAS REASONABLE CAUSE FOR THE DELAY. ACCORDINGLY, WE CON DONE THE SAME AND ADMIT THE APPEAL. 2. THE ISSUE IN THE APPEAL IS WHETHER THE CIT(A) WA S JUSTIFIED IN REJECTING THE ASSESSEES CLAIM FOR DEDUCTION OF RS.32,57,894/- UNDER SECTION 80IB OF THE INCOME TAX ACT. THE ASSES SEE IS A COMPANY AND ITS MAIN ACTIVITY INVOLVES THE PROCESSI NG OF HR/CR COILS RECEIVED FROM TATA IRON & STEEL CO. AND CONVE RSION OF THE SAME INTO SHEETS BY DE-COILING, STRAIGHTENING AND S HEARING OPERATIONS AND ALSO CONVERSION OF THE COILS INTO ST RIPS, BLANKS AND PACKING THE SAME. AFTER THIS OPERATION IS CARRI ED OUT, THE PRODUCT IS HANDED BACK TO TATA IRON & STEEL CO. ALO NG WITH THE SCRAP THAT IS GENERATED DURING THE OPERATION. THE ASSESSING OFFICER AND THE CIT(A) HAVE HELD THAT THIS IS NOT A MANUFACTURING ACTIVITY AND THEREFORE, THE ASSESSEE IS NOT ITA NO.3703/MUM/09 2 ENTITLED TO DEDUCTION. WE MAY CLARIFY THAT UNDER C LAUSE (III) OF SUB-SECTION (2) OF SECTION 80IB, THE ASSESSEE IS R EQUIRED TO MANUFACTURE OR PRODUCE ANY ARTICLE OR THING IN ORD ER TO CLAIM DEDUCTION UNDER THE SECTION. 3. THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESS EE BY THE ORDER OF THE TRIBUNAL DATED 10 TH FEBRUARY, 2009 IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IN ITA NO.4160/MUM/2007 (COPY FILED). IN THIS CASE, THE TR IBUNAL HAS FOLLOWED ITS OWN ORDER IN THE CASE OF COMET FOODS & METAL LTD. VS. ITO AND HELD THAT IN THAT CASE SIMILAR ACTIVITY CARRIED ON BY THE ASSESSEE THEREIN HAS BEEN HELD TO BE A MANUFACT URING ACTIVITY. THE JUDGEMENT OF SUPREME COURT DATED 12 .11.2008 IN THE CASE OF M/S. INDIA CINE AGENCIES VS. CIT., MADR AS, IN WHICH IT WAS HELD THAT CONVERSION OF JUMBO ROLLS OF PHOTO GRAPHIC FILMS INTO SMALL FLATS AND ROLLS IN THE DESIRED SIZES AMO UNTED TO MANUFACTURE/PRODUCTION WAS ALSO FOLLOWED. FOLLOWIN G THE AFORESAID TWO AUTHORITIES, THE TRIBUNAL UPHELD THE ASSESSEES CLAIM THAT IT WAS ENGAGED IN THE MANUFACTURE OR PRO DUCTION OF AN ARTICLE OR THING. SINCE THE FACTS FOR THE YEAR U NDER APPEAL ARE THE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 , WE UPHOLD THE ASSESSEES CLAIM FOR DEDUCTION UNDER SEC TION 80IB AND ALLOW THE APPEAL WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED ON THIS 12 TH DAY OF MARCH, 2010. SD/- ( P.M. JAGTAP ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI, DATED 12 TH MARCH , 2010. SOMU ITA NO.3703/MUM/09 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CITY-6, MUMBAI. 4. THE CIT(A)-VI, MUMBAI 5. THE DR C BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI