M/s. MANGALAM DRUGS & ORGANICS LTD., MUMBAI V. DCIT CIR - 4(2), MUMBAI

ITA 3756/MUM/2008

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9151 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 17-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard
• Section: 80HHC; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 3756/MUM/2008 ( / ASSESSMENT YEAR : 2004 - 05 M/S. MANGALAM DRUGS & ORGANICS LTD., 292, PRINCESS STREET, 2 ND FLOOR, NEAR FLYOVER MUMBAI - 400 002 / VS. THE DCIT, CIR. 4(2), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AAACM 7880P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI M. SUBRAMANIAN / RESPONDENT BY : SHRI JEETENDRA KUMAR / DATE OF HEARING : 17 . 0 3 .2015 / DATE OF PRONOUNCEMENT : 25 .03 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - IV, MUMBAI DT. 10.3.2008 PERTAINING TO ASSESSMENT YEAR 2004 - 05. 2. GROUND NO. 1 IS GENERAL IN NATURE AND DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. 3. GROUND NO. 2 RELATES TO THE ADDITION OF RS. 3,75,000/ - ON ACCOUNT OF INTEREST. ITA. NO. 3756/M/08 2 4. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN ITA NO. 2972 & 4476/M/06 AND 5913/M/09. 5. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED TO THIS. 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW, THE FACTS IN ISSUE AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA). WE FIND THAT THIS ISSUE WAS CONSIDERED BY THE TRIBUNAL AT PARA - 2.1 OF ITS ORDER AND AT PARA - 2.1.3, THE TRIBUNAL DIRE CTED FOR THE DELETION OF THE ADDITION MADE ON THIS ACCOUNT. FINDING THE FACTS TO BE IDENTICAL, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL, WE DIRECT THE AO TO DELETE THE ADDITION OF RS. 3,75,000/ - . GROUND NO. 2 IS ACCORDINGLY ALLOWED. 7. GROUN D NO. 3 RELATES TO THE DENIAL OF THE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT. 8. THE AO HAS DISCUSSED THIS ISSUE AT LENGTH AT PARA - 6.1 OF HIS ORDER. IT WAS NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB OF THE ACT IN RESPECT OF SALES/TURNOVER OF THE FOLLOWING FOUR PRODUCTS: 1) CHLOROQUINE PHOSPHATE RS. 10,88,63,105/ - 2) NIMESULIDE RS. 11,27,83,990/ - 3) 4 - 7 DICHLOROQUINOLINE RS. 18,78,079/ - 4) AMODIAQUINE RS. 1,78,23,813/ - 9. IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT DEDUCTION U/S. 80IB IS ALLOWED IN RESPECT OF AN ELIGIBLE INDUSTRIAL UNDERTAKING AND NOT IN RESPECT OF TURNOVER OF CERTAIN ITEMS. THE ASSESSEE WAS THEREFORE ASKED TO ITA. NO. 3756/M/08 3 GIVE THE UNIT - WISE WORKING IN SUPPORT OF ITS CLAIM OF DEDUCTION. THE ASSESSEE FILED A DETAILED WORKING WHICH IS INCORPORATED BY THE AO AT PAGE - 3 OF HIS ORDER. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THAT THE PR ODUCTION OF THE ITEMS CLAIMED BY IT HAS RESULTED INTO ANY PROFIT TO BE ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB OF THE ACT , ACCORDINGLY, THE AO DENIED ANY DEDUCTION TO THE ASSESSEE. 10. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 11. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION ON PAGE - 11 OF THE PAPER BOOK AND POINTED OUT THAT THE ASSESSEE HAS SHOWN PROFIT AND THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB OF THE ACT. I T WAS BROUGHT TO THE NOTICE OF THE LD. COUNSEL THAT ITEM NO. B ON PAGE - 11 OF THE PAPER BOOK , WHICH SHOWS THE TURNOVER OF FOUR ITEMS. THE LD. COUNSEL WAS ASKED TO EXPLAIN WHY DEDUCTION HAS BEEN CLAIMED ON THE TURNOVER OF THESE FOUR ITEMS WHEN THE DEDUCTION IS ALLOWABLE TO THE INDUSTRIAL UNDERTAKING AS A WHOLE. THE LD. COUNSEL STATED THAT SOME ERROR HAS CREPT IN EXPLAINING THE CLAIM OF DEDUCTION U/S. 80IB AND PRAYED THAT THE MATTER MAY BE SENT BACK SO THAT THE ASSESSEE CAN DEMONSTRATE ITS CLAIM FOR DEDUCTIO N U/S. 80IB OF THE ACT. IN THE INTEREST OF JUSTICE AND FAIR PLAY TO THE ASSESSEE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE ASSESSEE IS DIRECTED TO FURNISH/DEMONSTRATE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT AS PER PROVISIONS OF THE LAW. THE AO I S DIRECTED TO VERIFY THE SAID CLAIM AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO. 3 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ITA. NO. 3756/M/08 4 12. GROUND NO. 4 RELATES TO THE DENIAL OF CLAIM U/S. 80HHC OF THE ACT IN RESPECT OF CERTA IN ITEMS. 13. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE TRIBUNAL IN ASSESSEES OWN CASE. 14. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBUNAL REFERRED TO ELSEWHERE. WE FIND THAT THE TRIBUNAL AT PARA - 2.6.3 OF ITS ORDER HAS DECIDED THIS ISSUE AGAINST THE ASSESSEE. RESPECTFULLY FOLLOWING THE FINDINGS OF THE C O - ORDINATE B ENCH, GROUND NO. 4 IS DISMISSED. 15. GROUND NO. 5 RELATES TO APPLICATION OF THE PROVIS IONS OF SEC. 80IA(9) OF THE ACT. 16. IN OUR UNDERSTANDING OF THE LAW, THIS GROUND IS CONSEQUENTIAL TO THE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT WHICH ISSUE WE HAVE SET ASIDE THE FILES OF THE AO. WE, ACCORDINGLY RESTORE THIS ISSUE ALSO TO BE DECIDED DE NOVO AFTER DECIDING THE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 25 TH MARCH, 2015 SD/ - SD/ - ( VIJAY PAL RAO ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 25 TH MARCH, 2015 . . ./ RJ , SR. PS ITA. NO. 3756/M/08 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI