J & B INDUSTRIES, MUMBAI V. ITO 20(1)(3), MUMBAI

ITA 3722/MUM/2010

• Counselvise Citation: 372219914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VANDANA SAGAR
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI. BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.3722/MUM/10 (ASSESSMENT YEAR : 2006-07) M/S. J.B. INDUSTRIES, 21, UNIQUE HOUSE, CHAKALA ROAD, CHAKALA, ANDHERI (E), MUMBAI-400093 PAN AACFJ 6338C VS. INCOME TAX OFFICER 20(1)(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIMAL PUNMIYA. RESPONDENT BY : SMT. VANDANA SAGAR. O R D E R PER R.S. PADVEKAR, J.M. : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IM PUGNED ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-31, MU MBAI DT.15.2.2010. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GRO UNDS : 1. THE LEARNED CIT(A) ERRED IN DISALLOWING THE CLAIM OF APPELLANT UNDER SECTION 80IB OF RS.2,87,790 AND THEREBY ERRED IN ADDING THE SAME INCOME OF THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE I NTEREST U/S.234A, 234B, 234C & 234D OF THE INCOME TAX ACT, 1961. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PROVISIONS OF SECTION 271(1)(C) & 271(1)(B) OF THE INCOME TAX ACT, 1961. 3. BRIEFLY STATED FACTS ARE AS UNDER : 3.1 THE ASSESSEE FIRM IS ENGAGED IN THE MANUFACTURI NG OF GARMENTS. THE ASSESS HAS CLAIMED DEDUCTION U/S. 80IB OF THE INCOM E TAX ACT, 1961 (THE ACT) OF RS.2,88,790. THE A.O. HAS NOTED THAT THE ASSESS EE DID NOT FILE THE AUDIT ITA NO.3722/MUM/10 2 REPORT IN FORM 10CCB ALONG WITH THE RETURN OF INCOM E IN SUPPORT OF THE CLAIM OF DEDUCTION U/S.80IB. THE A.O. FURTHER NOTE D THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITT ED THAT IT IS IN THE BUSINESS OF MANUFACTURE OF P.P. CAPS. THE A.O. HAS RESERVATION FOR ALLOWING THE DEDUCTION TO THE ASSESSEE ON TWO REASONS VIZ. I ) THE ASSESSEE HAS FILED AUDIT REPORT IN FORM 10CCB AFTER MORE THAN 24 MONTH S FROM THE DATE OF FILING OF RETURN. THE ASSESSEE CLAIMED THAT THE AUDIT REP ORT WAS SINGED ON 30.10.2006 BUT THAT WAS INADVERTENTLY NOT FILED WIT H RETURN OF INCOME. (II) SECOND RESERVATION WAS IN RESPECT OF NATURE OF THE BUSINESS SHOWN IN THE AUDIT REPORT. THE A.O. REJECTED THE CLAIM OF THE A SSESSEE U/S.80IB. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LEARNED CIT(A) BUT WITHOUT SUCCESS, AS THE ORDER OF THE A.O. WAS CONFI RMED BY DENYING THE DEDUCTION TO THE ASSESSEE. HENCE THE ASSESSEE IS I N APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAS BEEN CONSISTENTLY ALLOWED THE CLAIM U/ S.80 IB UP TO THE ASST. YEAR 2003-04. HE FURTHER SUBMITS THAT THERE WAS A MISTAKE IN MENTIONING THE NATURE OF ACTIVITY IN THE AUDIT REPORT BY THE C ONCERNED C.A. AND THE ASSESSEE SHOULD NOT BE PENALIZED FOR THAT MISTAKE. HE FURTHER SUBMITS THAT THE ASSESSEE FILED AUDIT REPORT AT THE TIME OF ASSE SSMENT AND NO WHERE IT IS A CASE OF THE A.O. THAT THE SAID AUDIT REPORT IS PREP ARED AFTER THE DATE OF THE SIGNATURE OF C.A. HE ALSO RELIED ON THE DECISION O F DELHI HIGH COURT DECISION IN ITA NO.;1366/2008 IN CIT VS. CONTIMETERS ELECTRI CALS PVT. LTD. AND ITA NO.3722/MUM/10 3 PLEADED THAT THE REQUIREMENT OF FILING OF THE AUDIT REPORT ALONG WITH RETURN IS NOT MANDATORY BUT DIRECTORY. WE ALSO HEARD THE D.R . 5. WE FIND THAT THE AUDIT REPORT WAS SUBMI TTED BEFORE THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE DID NO T ENCLOSE THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME. IN OUR OPINION, D ENIAL OF LEGITIMATE CLAIM OF THE ASSESSEE MERELY BECAUSE THE AUDIT REPORT WAS NO T ENCLOSED WITH THE RETURN OF INCOME BUT FILED AT THE TIME OF ASSESSMEN T, IS NOT CORRECT. MOREOVER, IT IS MADE CLEAR THAT IT IS A MISTAKE IN THE AUDIT REPORT IN RESPECT OF MENTIONING OF THE NATURE OF BUSINESS. IN OUR OPINI ON, MERELY ON THESE TWO GROUNDS, THE ASSESSEE SHOULD NOT BE DENIED OF THE L EGITIMATE CLAIM. WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF ASSES SING OFFICER WITH A DIRECTION THAT HE SHOULD ADMIT THE AUDIT REPORT FILED BY THE ASSESSEE AND ALLOW THE CLAIM U/S. 80IB AS PER LAW. 6. SO FAR AS GROUND NO.2 IS CONCERNED, IT IS CONSEQ UENTIAL IN NATURE. 7. SO FAR AS GROUND NO.3 IS CONCERNED, THE LEARNED COUNSEL SUBMITS THAT THE SAME IS TAKEN INADVERTENTLY AND NOT PRESSED. 8. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY AL LOWED. PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2011. SD/- SD/- (RAJENDRA SINGH) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT.17 TH JUNE, 2011. *GPR ITA NO.3722/MUM/10 4 COPIES OF THE ORDER FORWARDED TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT, MUMBAI (4) CIT(A), MUMBAI (5) DR, (6) GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES