DCIT 8(3), MUMBAI V. UNISOUND P. LTD, MUMBAI

ITA 4265/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84325 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Assessee Lawyers: RAHUL R SARDA
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 10AA; 115JB; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNALF BENCH, MUMB AI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM ITA NOS.4265/MUM/2013 ASSESSMENT YEARS-2007-08 DEPUTY COMMISSIONER OF INCOME-TAX-8(3), ROOM NO.217, AAYAKAR BHAVAN, M.K.MARG, MUMBAI-400020 / VS. M/S UNISOUND P. LTD, UNIT NO.17-A, SDF-I, SEEPZ, ANDHERI (E), MUMBAI-400069 ./ PAN :AAACU1670P ( / REVENUE ) .. ( / RESPONDENT ) / REVENUE BY: SHRI PAWAN KUMAR BEERLA / RESPONDENT BY : SHRI RAHUL R.SARDA ! '# $% / DATE OF HEARING 26/11/2014 &'( $% / DATE OF PRONOUNCEMENT : 26/11/2014 * / O R D E R PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 21/03/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE ASSESSEE IS NOT LIABLE TO PAY MAT, IN VIEW OF SECTION 115JB(6) OF THE ACT, AS THE ASSESSEE 2 M/S UNISOUND PVT. LTD. UNIT IS LOCATED IN SEEPZ(SEZ), WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE TO SHOW THA T ITS UNDERTAKING IS ELIGIBLE FOR DEDUCTION U/S 10AA AND HENCE ELIGIBLE FOR EXCLUSION U/S115JB(6) OF THE ACT. 2. AT THE TIME OF HEARING, THE LD. DR, SHRI PAWAN KUMAR BEERLA ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL T O THE GROUND RAISED BY DEFENDING THE ASSESSMENT ORDER. O N THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, SHREE RAHUL R. SHARDA DEFENDED THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY ASSERTING T HAT THE ASSESSEE UNIT WAS DECLARED AS SPECIAL ECONOMIC ZONE AND THUS ENTITLED TO EXEMPTION FROM PAYMENT OF MINIMUM ALTER NATE TAX (MAT) ON THE BOOK PROFITS IN RESPECT OF INCOME ACCR UED OR ARISING ON OR AFTER 1 ST APRIL 2005. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BR IEF, ARE THAT THE ASSESSEE UNIT DECLARED NIL INCOME IN ITS RETURN FILED ON 31/10/2007 WHICH WAS PROCESSED U/S 143(1) OF THE IN COME- TAX ACT, 1961 (HEREINAFTER THE ACT) ACCEPTING THE R ETURNED INCOME. SINCE, THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT, THEREAFTER, ORDER WAS PASSED U/S 143(3) OF THE ACT ON 07/05/2009 ASSESSING THE TOTAL INCOME AT NIL AFTER SETTING OFF BROUGHT FORWARD LOSSES AMOUNTING TO RS.54,46,982/-. THE CASE OF THE ASSESSEE WAS REOPENED THEREAFTER, ON TH E PLEA THAT AS PER SECTION 115JB OF THE ACT, THE ASSESSEE WAS L IABLE TO PAY MINIMUM 10% OF THE TAX WORKED OUT ON NORMAL BOOK PR OFIT. 3 M/S UNISOUND PVT. LTD. AS PER THE ASSESSING OFFICER, IN VIEW OF SECTION 11 5JB(2)(III), THE BOOK PROFIT WAS TO BE REDUCED BY THE AMOUNT OF LOSS BROUGHT FORWARD/UNABSORBED DEPRECIATION, WHICHEVER IS LESS. HOWEVER, THE ASSESSEE BEFORE THE LD. COMMISSIONER O F INCOME TAX (APPEALS) VIDE LETTER DATED 03/07/2012 EXPLAINE D THAT THE CONDITIONS ENSHRINED IN SECTION 115JB(6) OF THE ACT WERE COMPLIED WITH AS THE ASSESSEE UNIT IS LOCATED IN SE EPZ WHICH IS DECLARED AS SEZ. IT WAS FURTHER CLAIMED THAT TH E ENTIRE INCOME WAS DERIVED FROM MANUFACTURING OF ELECTRON ICS GOODS BY THE ASSESSEE UNIT LOCATED IN SEZ. WE NOTE THAT THE ASSESSEE UNIT IS LOCATED AT 28, SDF-1, SEEPZ, ANDHE RI (EAST) WHICH WAS DECLARED AS SEZ VIDE ORDER NOVEMBER 2000 AND THE ASSESSEE IS ENGAGED IN MANUFACTURING OF ELECTRONICS GOODS SINCE 1977. THERE IS UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT THE ENTIRE INCOME OF THE ASSESSEE IS DE RIVED FROM MANUFACTURING THROUGH THIS UNIT LOCATED IN SEZ. WE FURTHER NOTE THAT THE LD. ASSESSING OFFICER DISALLOWED THE BENEFIT TO THE ASSESSEE MERELY ON THE BASIS OF AUDIT REPORT, FILED ALONG WITH THE RETURN MENTIONING THAT THE PROVISION OF MAT ARE NOT APPLICABLE TO THE ASSESSEE UNIT AND THE ASSESSEE HA S NOT FILED ANY EVIDENCE TO THE EFFECT THAT THE ASSESSEE UNIT W AS LOCATED IN SEZ. SINCE, THE ASSESSEE UNIT IS UNCONTROVERTEDLY LOCATED IN SEZ AND THE CLAIMED DEDUCTION U/S 10AA WAS ALLOWED TO THE ASSESSEE, THEREFORE, THE ASSESSEE IS NOT LIABLE TO PAY MAT IN VIEW OF SECTION 115JB(6) OF THE ACT FROM ANY BUSINE SS CARRIED ON, OR SERVICES RENDERED BY AN ENTREPRENEUR OR DEVE LOPER IN A UNIT IN SPECIFIED ECONOMIC ZONE, MORE SPECIFICALLY WHEN THE 4 M/S UNISOUND PVT. LTD. ASSESSMENT YEAR IS INVOLVED IN 2007-08, WHICH IS WI THIN THE PRESCRIBED PERIOD. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCO ME TAX (APPEALS). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED, IN THE OPEN COURT, IN TH E PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING, ON 26 TH NOVEMBER, 2014. SD/- SD/- (SANJAY ARORA) ( JOGINDER SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER ! +# MUMBAI; ,' DATED.- 26/11/2014 F{X~{T? P.S/. ' . . !' #'$ / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. / THE RESPONDENT. 3. ! /$ ( -. ) / THE CIT(A)- CONCERNED, MUMBAI 4. ! /$ / CIT CONCERNED, MUMBAI 5. 01 $'2 , -.% -2( , ! +# / DR, ITAT, MUMBAI E BENCH 6. 34 5# / GUARD FILE. % / BY ORDER, 0.$ $ //TRUE COPY// & / %' ( (DY./ASSTT. REGISTRAR) , ! +# / ITAT, MUMBAI.