DCIT RG 4(1), MUMBAI V. SVG FASHIONS LTD, MUMBAI

ITA 417/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84520 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Depreciation
• Section: 143(3); 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C.SHARMA, AM ITA NO. 417 / MUM /20 1 1 ( ASSESSMENT YEAR : 200 7 - 20 08 ) DCIT, RG.4(1), MUMBAI VS. M/S S VG FASHIONS LTD., 235, VENKATESHWAR BHAWAN, 3 RD FLOOR, KALBADEVI ROAD, MUMBAI - 400 002 PAN/GIR NO. : A A ACD 1621 K ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SHRI NEIL PHILIP /ASSESSEE BY : SHRI SASHI TULSIYAN DATE OF HEARING : 1 5 TH DECEMBER , 201 4 DATE OF PRONOUNCEMENT 15 / 12 / 2014 O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY REVENUE AGAINST THE ORDER OF CIT(A) DATED 10 - 11 - 2010, FOR THE ASSESSMENT YEAR 200 7 - 2008 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2 . THE ONLY GRIE VANCE OF THE REVENUE RELATES TO DELETION OF DISALLOWANCE MADE U/S. 80IB IN RESPECT OF UNIT IV WHICH HAS NOT COMMENCED COMMERCIAL PRODUCTION BEFORE 31 - 3 - 2004. 3 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE CIT(A) HAS DELETED THE DISALLOWANCE BY F OLLOWING THE ORDER OF CIT(A) DATED 1 - 6 - 2009 FOR THE A.Y.2006 - 07, WHICH WAS DECIDED IN FAVOR OF THE ASSESSEE. ITA NO. 417 /1 1 2 4. LEARNED AR PLACED ON RECORD ORDER OF THE TRIBUNAL DATED 30 - 10 - 2009 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06, WHEREIN THE ISSUE WI TH REGARD TO CLAIM OF DEDUCTION U/S.80IB OF UNIT IV WAS ALLOWED BY OBSERVING THAT COMMERCIAL PRODUCTION STARTED ON 21 - 3 - 2004. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER : - 8.1 WE HAVE SEEN THE FINDINGS OF THE ID CIT(A) AND ALSO THE COPY OF THE E VIDENCES PLACED ON RECORD AND FOUND THAT THEY ARE NOT SELF SERVING DOCUMENTS BUT THEY ARE RELEVANT EVIDENCES WHICH PROVE THAT THE MACHINERIES WERE PURCHASED AND THEY WERE INSTALLED IN UNIT NO.4. THE MACHINERIES WERE PUT TO USE AND THE PRODUCTION WAS STARTE D. AFTER THE PRODUCTION SALES WERE AFFECTED IN THE OPEN MARKET. TO CONTROVERT THESE FINDINGS, NOTHING HAS BEEN BROUGHT ON RECORD EITHER BY THE AO DURING THE ASSESSMENT PROCEEDINGS OR BY THE LD DR DURING THE APPELLATE PROCEEDINGS, 8.2 THE FACT REGARDING THE PROOF OF MACHINERIES IMPORTED, CERTIFICATE OF ORIGIN DATED 19,3.2004, BILL OF LADING DATED 22.2.2004, COPY OF MARINE CARGO POLICY FOR THE SAID SIX MACHINES FROM 22.2.2004, BILL OF ENTRY FOR HOME CONSUMPTION PROVIDED CERTIFIES THAT THE SIX MACHINES ENTE RED THE INDIAN PORT AT JAWAHAR CUSTOMS ON 11.3.2004; BILL OF AJAY CLEARING ENTERPRISES DT 15.3.2004 GIVING TRUCK NUMBER ALONG WITH WEIGHT OF SUCH MACHINES 'HAVING TRANSPORTED TO THE FACTORY OF THE ASSESSEE FROM JAWAHAR CUSTOM PORT, COPY OF EXCISE RECORDS S HOWING ENTRY OF MACHINERIES IN INDIA DT 11.3.2004 AND PUT TO USE AT THE FACTORY OF THE ASSESSEE COMPANY ON 21.3.2004, COPY OF CERTIFICATE FROM THE SUPPLIERS OF THE MACHINE THAT THE, .MACHINES WERE INSTALLED AND WAS READY FOR COMMERCIAL PRODUCTION ON 19..3. 2004 AND THE BANK CERTIFICATE STATING THAT COMMERCIAL PRODUCTION STARTED ON 21.3.2004 WERE EXAMINED BY THE CIT(A). THE CIT(A) HAS CATEGORICALLY MENTIONED IN HIS ORDER THAT THE AO IN THE ASSESSMENT PROCEEDINGS AND EVEN IN THE REMAND REPORT HAS NOT TAKEN CO GNIZANCE OF ALL THESE EVIDENCES PRODUCED BEFORE HIM AND HAS MERELY STUCK TO THE STAND THAT FOR AY 2004 - 05 THE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S.80IB. 8.3 WE FURTHER NOTED THAT THE ASSESSMENT FOR AY 2004 - 05 WAS REOPENED BY ISSUING NOTICE U/S. 148. THE ASSESSEE FILED COMPLETE DETAILS ALO NG WITH RETURN FILED IN RESPONSE TO NOTICE U/ S 148. ONE OF THE REASONS FOR REOPENING OF THE ASSESSMENT WAS ALLOWING THE EXCESS DEPRECIATION INCLUDING THE DEPRECIATION ON THE MACHINERIES INSTALLED AT UNIT NO.4 . IT IS, SEE N THAT DEPRECIATION WAS ALLOWED ORIGINALLY WHILE COMPLETING THE 'ASSESSMENT U/ S 143(3) FOR A Y 2004 - 05 A ND THEREAFTER, IN THE ASSESSMENT COMPLETED U/S. 143(3) R.W.S 147, THE DEPRECIATION HAS BEEN ALLOWED ON THE MACHINERIES INSTALLED IN UNIT NO.4. FROM THESE FACTS ALONE, IT IS AMPLY PROVED THAT THE MACHINERIES INSTALLED IN UNIT NO.4 WERE USED FOR THE PURPOSE OF BUSINESS AND PRODUCTION WAS STARTED; THEREFORE, NO DOUBT REMAIN THAT PRODUCTION WAS REPORTED BEFORE 31.3.2004. THE R E ASON FOR NOT ITA NO. 417 /1 1 3 CLAIMING DEDUCTION U /S.80IB F OR AY 2004 - 05 HAS BEEN EXPLAINED ABOVE THAT DUE TO LOSS IN THE UNIT THE DEDUCTION WAS NOT ALLOWABLE AND HENCE' WAS CLAIMED: THEREFORE, IN - VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE DETAILED FINDINGS OF THE LD CIT(A), WE SEE NO REASON TO INTERFERE WITH THE FINDINGS OF THE ID CIT (A). ACCORDINGLY, THE FINDINGS OF THE LD CIT(A) ARE CONFIRMED IN THIS REGARD. 5. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2005 - 06 AND FOUND THAT A CATEGORICAL FINDING HAS BEEN RECORDED TO THE EFFECT THAT PRODUCTION WAS STARTED IN UNIT N O. IV BEFORE 31 - 3 - 2004. RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING DISALLOWANCE OF CLAIM U/S. 80IB. 6 . IN TH E RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 /12 / 201 4 . 15 /12 / 2014 SD/ - SD/ - ( ) ( JOGINDER SINGH ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 15 /12 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COP Y//