ACIT 20(3), MUMBAI V. RELISHAH EXPORTS, MUMBAI

ITA 4278/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7911 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A N SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4278/MUM/2015 ASSESSMENT YEAR: 2011-12 ACIT 20(3) VS. M/S. RELISHAH EXPORTS 6 TH FLOOR, R. NO. 615 214, 2 ND FLOOR, T.V. INDL. ESTATE PIRAMAL CHAMBERS, PAREL S.K. AHIRE MARG, WORLI MUMBAI 400012 MUMBAI - 400030 PAN NO. AAAFR6167P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PURUSHOTTAM KUMAR, DR ASSESSEE BY: SHRI A. N. SHAH, AR DATE OF HEARING : 22/0 3/2017 DATE OF PRONOUNCEMENT: 24/03/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 33, MUMBAI AND ARISES OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER:- I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) 33, MUMBAI ERRED IN HOLDING THAT THE NOTIONAL LOSSES INCURRED BY THE ASSESSEE CANNOT BE CARRIED FORWARD IN RESPECT OF THE WIND MILL UNIT AND SET OFF AGAINST THE PROFITS OF THE INITIAL ASSESSMENT YEAR BEFORE A LLOWING THE DEDUCTION U/S 80IA. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) 33, MUMBAI ERRED IN ALLOWING THE ASSESSEES CLAIM OF RS. 32,52,730/- U/S 80IA ITA NO. 4278/MUM/2015 2 NOTWITHSTANDING THE DECISION OF THE HON'BLE AHMEDABAD T RIBUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES AND FINANCE P. LTD. 133 I TD 209 (AHD) (SB). 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE CLAIMED A DEDUCTION OF RS. 32,52,730/- U/S 80IA OF THE ACT. T HE DETAILS ON THE ABOVE WERE FILED BEFORE THE ASSESSING OFFICER (AO). THE ASSESSEE COMMENCED THE OPERATION / ACTIVITY OF THE WIND POWE R UNDERTAKING DURING THE PREVIOUS YEAR ENDED 31.03.2007 I.E. A.Y. 2007-08. HOWEVER, THE ASSESSEE OPTED TO CLAIM THE DEDUCTION U/S 80IA W.E.F. A.Y. 2010-11. AFTER THE AMENDMENT IN SECTION 80IA B Y THE FINANCE ACT 1999, AN ASSESSEE HAS AN OPTION FOR SELECTING THE I NITIAL ASSESSMENT YEAR. THE AO WAS CONVINCED WITH THE ALLOWABLITY OF DEDUCTION U/S 80IA AS CONDITIONS LAID DOWN THERE WERE FULFILLED B Y THE ASSESSEE. BUT THE AO DENIED THE DEDUCTION U/S 80IA BY RELYING ON THE DECISION IN ACIT VS. GOLDMINE SHARES & FINANCE (P) LTD. 113 ITD 209 (AHD) (SB), WHEREIN THE LOSSES OF THE EARLIER YEARS HAVE TO BE BROUGHT FORWARD NOTIONALLY FOR SET OFF AGAINST THE INCOME OF THE CU RRENT YEAR FOR DETERMINING THE QUANTUM OF DEDUCTION U/S 80IA OF TH E ACT. IN VIEW OF THE ABOVE, THE AO MADE A DISALLOWANCE OF RS. 32,52, 730/- U/S 80IA OF THE ACT. 4. THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER O F THE AO BEFORE THE LEARNED CIT(A). WE FIND THE LEARNED CIT(A) RELY ING ON THE DECISION IN SHEVIE EXPORTS VS. JCIT , TAXMANN.COM 446 (MUM.-TRIB), AND ANIL H LAD VS. CIT [TS-140-HIGH COURT-2014 (KAR)] DELETED THE ADDITIO N OF RS. 32,52,730/- MADE BY THE AO. 5. BEFORE US, THE LEARNED DR RELIES ON THE ORDER OF THE AO. ON THE OTHER HAND THE LEARNED COUNSEL OF THE ASSESSEE SUPP ORTS THE ORDER PASSED BY THE LEARNED CIT(A). ITA NO. 4278/MUM/2015 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND AFTER THE AMENDMENT IN SECTION 80IA BY THE FINANCE ACT 1999, AN ASSESSEE HAS AN OPTION FOR SELECTING THE INITIAL ASSESSMENT YEAR. THE LOSSES PRIOR TO THE IN ITIAL ASSESSMENT YEAR WHICH HAS ALREADY BEEN SET OFF CANNOT BE BROUGHT FO RWARD AND ADJUSTED INTO THE PERIOD OF 10 YEARS FROM THE INITI AL ASSESSMENT YEAR AS CHOSEN BY THE ASSESSEE. IT IS ONLY WHEN THE LOSS HAS BEEN INCURRED FROM THE INITIAL ASSESSMENT YEAR, THEN THE ASSESSEE HAS TO ADJUST LOSS IN SUBSEQUENT YEARS AND IT HAS TO BE COMPUTED AS IF ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME AND THEN ONLY DEDUCTIO NS U/S 80IA CAN BE DETERMINED. 6.1 THE SPECIAL BENCH DECISION RELIED ON BY THE A.O . IS NOT APPLICABLE SINCE THE SAME PERTAINS TO A.Y. 1996-97 AND 1997-98 I.E. PRIOR TO THE AMENDMENT. MOREOVER, THE ASSESSEE HAS CLEARLY SHOWN IN THE INSTANT APPEAL THAT THE INITIAL YEAR OF ASSESSM ENT FOR CLAIMING OF DEDUCTION IS A.Y. 2010-11. 6.2 IN THE CASE OF SHEVIE EXPORTS (SUPRA) , IT HAS BEEN HELD THAT IN TERMS OF PROVISION OF SECTION 80IA (5), LOSS INCURR ED PRIOR TO INITIAL ASSESSMENT YEAR OF CLAIMING DEDUCTION IS NOT REQUIR ED TO BE NOTIONALLY CARRIED FORWARD AND ADJUSTED AGAINST ELI GIBLE PROFIT SO AS TO DISALLOW A PART OF DEDUCTION CLAIMED. IN THE CASE O F DEVI SEAFOODS LTD. VS. JCIT [2016] 70 TAXMANN.COM 57 (VISAKHAPATNAM-TRIB.), IT HAS BEEN HELD THAT IN ORDER TO CLAIM DEDUCTION U/S 80IA, THE INITIAL ASSESSMENT YEAR WOULD MEAN 1 ST YEAR ADOPTED BY THE ASSESSEE FOR CLAIMING DEDUCTION AND NOT THE YEAR IN WHICH ELIGIBLE BUSINE SS WAS COMMENCED. THE SAME IS REITERATED IN M/S. HYDERABAD CHEMICAL ITA NO. 4278/MUM/2015 4 PRODUCTS PVT. LTD. VS. ACIT (ITA NO. 1033/HYD/2015) BY THE ITAT B BENCH HYDERABAD FOR THE A.Y. 2008-09. 6.3 IN VIEW OF THE REASONS NARRATED PARA 6 TO 6.2 H ERE-IN-ABOVE, WE UPHOLD THE ORDER PASSED BY THE LEARNED CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/03/2017 SD/- SD/ (JOGINDER SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI;: DATED: 24/03/2017 BISWAJIT, SR. P.S. 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