ACIT CIR 4(3), MUMBAI V. YASHASVI YARNS LTD, MUMBAI

ITA 4145/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2392 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-04-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, G BENCH, MUMBAI. BEFORE S/SHRI S.V.MEHROTRA, AM & V.DURGA RAO, JM I.T.A. NO.4145/MUM/2009 ASSESSMENT YEAR: 2006-07 THE ACIT 4(3), V. M/S. YASHASVI YARNS LIMITED, AAYAKAR BHAVAN, M.K. ROAD, A-46, NAND JYOTI INDL . ESTATE, MUMBAI. ANDHERI KURLA ROAD, SAFED POOL, SAKINAKA, MUMBAI-72. PA NO.AAACY 0123 F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MOHD USMAN RESPONDENT BY : NONE O R D E R PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER DATED 9.4.2009 OF LD CIT (A)-XIV, MUMBAI HOLDING THAT TWISTING AND TE XTURISING OF YARN AMOUNTED TO MANUFACTURING FOR THE PURPOSE OF GRANTING DEDUCTION U/S.80-IB FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE COMPANY HAD MANUFACTURING UNIT OF T EXTURISING OF YARN AT SILVASA AND DADRA & NAGAR HAVELI. IT HAD CLAIMED DEDUCTION U/S. 80IB, WHICH WAS DENIED BY THE AO ON THE GROUND THAT THE ACTIVITY COULD NOT BE TRE ATED AS MANUFACTURING ACTIVITY. ON APPEAL, LD CIT (A) ALLOWED THE ASSESSEES APPEAL FO LLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. EMPTEE POLY -YARN P.LTD., 305 ITR 309 (BOM), WHEREIN, IT WAS HELD THAT THE PROCESS APPLIED TO P OY EITHER FOR THE PURPOSE OF TEXTURISING OR TWISTING CONSTITUTES MANUFACTURE AS THE ARTICLE PRODUCED IS RECOGNIZED IN THE TRADE AS A 2 DISTINCT COMMODITY PURSUANT TO THE PROCESS IT UNDER GOES WHICH AMOUNTS TO MANUFACTURE . THE PROCESS WHICH POY UNDERGOES IN THE PROCESS OF T EXTURISING AND TWISTING RESULTS IN A NEW AND DISTINCT PRODUCT AND REGARDED IN THE TRADE AS DISTINCT FROM THE COMMODITY INVOLVED IN THE MANUFACTURE. THE PROCESS AMOUNTS T O MANUFACTURE AS THE ORIGINAL COMMODITY LOSES ITS IDENTITY. THE ASSESSEE WAS ENT ITLED TO SPECIAL DEDUCTION UNDER SECTION 80-IA. 3. WE HAVE HEARD LD D.R. AND PERUSED THE RECORD OF THE CASE. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF EMPTEE POLY-YARN P.LTD(SUPRA). THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF LD CIT (A) TO INTERFERE. ACCORDINGLY, WE DISMISS THE GROUND TAKEN BY THE REVENUE. 4. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. PRONOUNCED ON 6 TH APRIL, 2010 SD/- (V. DURGA RAO) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANTMEMBER) MUMBAI, DATED 6 TH APRIL , 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH G, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 3 DATE INITIALS 1. DRAFT DICTATED ON 1.4.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 1.4.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER 4