DCIT 9(3), MUMBAI V. PIPLY TEXTILE & CHEMICALS P.LTD ( CHANGED NAME AS VAASTU PAINTS & CHEMICALS LTD), MUMBAI

ITA 4293/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83729 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALL KIND OF INTE RIOR
• Keywords: Depreciation; Assessment record; Revised return
• Section: 80IB; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER ITA NO.4293/MUM/2013 ASSESSMENT YEAR: -2006-07 DCIT -9(3) 2 ND FLOOR, ROOM NO. 229, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS.` PIPLY TEXTILE & CHEMICALS PVT. LTD. (CHANGED NAME AS VASSTU PAINTS & CHEMICALS LTD. KAMLESH DAVE, CAS, 38/304, ANAND NAGAR, VAKOLA POLICE STATION LANE, SANTACRUZ (W), MUMBAI 400 054. PAN:- AADCP1114F APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 6.13.2013 OF CIT(A) FOR ASSESSMENT YEAR 2006-07. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THIS APPEAL:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) IS CORRECT IN ALLOWING THE ADDITIONAL CLAIM OF DEDUCTI ON U/S 80IB OF THE I.T. ACT., OF RS. 96,28,900/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT CLAIMED THE SAID DEDUCTION IN ITS INCOME TAX RETURN. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SYNTHETIC ENEMAL PAINTS, PRIMERS AND ALL KIND OF INTE RIOR AND EXTERIOR PAINTS. THE MANUFACTURING UNIT OF THE ASSESSEE LOCATED AT SILVA SA, THE CAPITAL OF DADAR & NAGAR HAVELI (A UNION TERRITORY)., WHICH IS NOTIFIED EXEMP T ZONE UNDER INCOME TAX ACT. THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 10A IN THE RETURN OF INCOME. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAI MED THAT THE DEDUCTION U/S REVENUE BY SHRI O.P. MEENA ASSESSEE BY SHRI VISHWAS V. MEHANDALE. DATE OF HEARING 10.09.2014 DATE OF PRONOUNCEMENT 17.09.2014 ITA NO.4293/MUM/2013 ASSESSMENT YEAR: -2006-07 2 | P A G E 10A WAS CLAIMED ERRONEOUSLY AND THE ASSESSEE COMPANY WAS ELIGIBLE FOR DEDUCTION U/S 80IB OF INCOME TAX ACT . THE ASSESSING OFFICER DISALLOED THE CLAIM OF HE ASSESSEE U/S 80IB ON THE GROUND THAT THE AUDITO RS REPORT IN THE FORM NO. 10CCB CERTIFYING THE DEDUCTION U/S 80IB HAS NOT BEEN FURNISHED. THE ASSESSING OFFICER STATED THAT THE ONLY CERTIFICATE THAT IS FI LED IS IN THE FORM NO 56F CLAIMING DEDUCTION U/S. 10A . THUS THE ASSESSING OFFICER HELD T HAT EVEN THE ASSESSEES REVISED CLAIM OF DEDUCTION U/S 80IB, IS ADMISSIBLE ONL Y IF THE ACCOUNTS OF THE UNDERTAKING HAVE BEEN AUDITED BY AN ACCOUNTANT, AND T HE AUDIT REPORT OF SUCH AUDIT IN FORM NO. 10CCB DULY SIGNED AND VERIFIED BY SUC H ACCOUNTANT IS FILED ALONG WITH RETURN OF INCOME. 3. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING O FFICER BEFORE CIT(A). HOWEVER THE CLAIM OF THE ASSESSEE WAS ORIGINALLY DIS MISSED BY THE CIT(A) VIDE ORDER DATED 25.01.2010 ON THE GROUND OF DELAY OF 15 DAYS AND ALSO NON REPRESENTATION FROM THE SIDE OF THE ASSESSEE. THE M ATTER WAS RESTORED BY THE TRIBUNAL TO THE RECORD OF CIT(A) WITH THE DIRECTION TO GIVE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ADJUDICATE THE MATTER ON MERITS ON PETITION SEEKING CONDONATION OF DELAY. CONSEQUENTLY THE CIT(A) HAS P ASSED THE IMPUGNED ORDER WHEREBY THE CLAIM OF THE ASSESSEE U/S 80IB HAS BEE N ALLOWED. 4. BEFORE US, THE LD. DR HAS SUBMITTED THE CIT(A) HAS ALLOWED THE ADDITIONAL CLAIM OF THE ASSESSEE WITHUT FULFILING THE CONDITION S OF FILING THE AUDIT REPORT/CERTIFICATE IN THE FORM 10CCB AS RECORDED BY T HE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THUS THE LD. DR HAS SUBMITTED THAT WHEN THE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S 80IB(10) IN THE RETURN OF INCOME AND FURTHER IN THE EARLIER YEARS, THE ASSESSEE CLAIMED THE EXEMPTION U.S 10A ON LY, THEREFORE, THE CONTENTION ITA NO.4293/MUM/2013 ASSESSMENT YEAR: -2006-07 3 | P A G E OF THE ASSESSEE THAT THE CLAIM U/S 10A WAS ERRONEOU SLY MADE, IS CONTRARY TO THE FACTS AND RECORD. HE HAS RELIED UPON THE ORDERS OF AUT HORITIES BELOW. 5. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTAT IVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE DULY FILED FORM NO. 10CCB BEFORE THE FIRST ASSESSING OFFICER AND THEREAFTER, THE MATTER WAS TRANSFERRED TO THE PRESENT ASSESSING OFFICER. THE CIT(A) HAS RECORDED THE FACT THAT AS PE R CORRESPONDENCE, THE ASSESSEE HAS ALREADY FILED THE AUDIT REPORT IN THE FORM NO. 1 0CCB WHICH HAS BEEN DULY ACKNOWLEDGED BY THE ERSTWHILE ASSESSING OFFICER. THE REFORE, THE ASSESSEE COMPLIED WITH ALL THE CONDITIONS REQUIRED FOR EXEMPT ION U/S 80IB. HE HAS SUPPORTED THE ORDER OF CIT(A). 6. HAVING CONSIDERED RIVAL SUBMISSIONS AS WELL AS REL EVANT MATERIAL ON RECORD, WE NOTE THAT THE ASSESSING OFFICER DISALLOWED THE CL AIM OF DEDUCTION U/S 80IB ON THE TECHNICAL GROUND THAT THE ASSESSEE HAS NOT SUBMI TTED THE AUDIT REPORT IN THE FORM NO. 10CCB. EVEN BEFORE US, THE REVENUE HAS NOT DISPUTED THE ELIGIBILITY OF THE ASSESSEE OF DEDUCTION U/S 80IB BUT THE GRIEVANCE OF THE REVENUE IS ONLY WITH REGARD TO THE FULFILMENT OF CONDITIONS AS THE CERT IFICATE / AUDIT REPORT IN THE FORM NO. 10CCB HAS NOT BEEN FILED. THUS THE REVENUE HAS R AISED ONLY A TECHNICAL OBJECTION AND HAS NOT DISPUTED THE ELIGIBILITY OF ASSE SSEES MANUFACTURING UNIT FOR DEDUCTION U/S 80IB. WE FIND THAT CIT(A) HAS ALLOWED TH E CLAIM OF THE ASSESSEE AFTER NOTING THE FACT THAT THE ASSESSEE HAD DULY SUBM ITTED THE AUDIT REPORT IN THE FORM NO. 10CCB BEFORE THE FIRST ASSESSING OFFICER F ROM WHERE THE CASE WAS TRANSFERRED TO THE PRESENT ASSESSING OFFICER. THE RE LEVANT PART OF THE FINDING OF CIT(A) ON THIS POING IS GIVEN IN PARA 2.4 OF THE IM PUGNED ORDER AS UNDER:- ITA NO.4293/MUM/2013 ASSESSMENT YEAR: -2006-07 4 | P A G E 2.4 AS REGARDS, MERIT OF THE CASE, I FIND THAT LD. ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE APPELLANT U/S.80LB PURELY ON TECHNICAL GROUND THAT DEDUCTION U/S.80IB WAS CLAIMED THROUGH A REVISED COMPUTATION OF INCOME AND NOT BY REVISED RETURN OF INCOME WHICH COULD HAVE BEEN FILED ON OR BEFORE 3L. 03.2008 AS PER SECTION 139(5) OF THE I.T. ACT. THIS STAND OF THE ASSESSING OFFICER IS NOT LEGALLY TENABLE. FURTHER, VARIOUS FACTS ON RECORD ALSO SUGGEST THAT APPELLANT IS ENTITLED FORDEDUCTION U/S.80LB OF THE I.T.ACT. AS PER THE ORIGINAL RETURN OF INCOM E, APPELLANTS HAD CLAIMED THE DEDUCTION U/S LOA OF THE ACT BY FILING THE REQUISIT E AUDIT REPORT FROM CA IN SUPPORT OF THE SAID CLAIM. HOWEVER DURING THE SCRUTINY ASSE SSMENT PROCEEDINGS, THE APPELLANT HAD REQUESTED FOR GRANTING. THE DEDUCTION U/S 80LB OF THE ACT INSTEAD OF S.10A. APPELLANTS CLAIMED TO HAVE FILED A COPY OF T HE AUDIT REPORT IN SUPPORT OF THE SAID CLAIM VIDE A COPY OF IT LETTER DATED 31-03-200 8 SUBMITTED TO THE O/O IST ASSESSING OFFICER ON 04-04-2008. FURTHER, THIS FACT GET CORROBORATED BY THE REFERENCE IN LETTER DATED 25.11.2008 RECEIVED BY THE ASSESSIN G OFFICER ON 1.12.2008, BEING PAGE NO.12 - 14 OF THE PAPER BOOK. THROUGH THIS LET TER APPELLANT HAD SUBMITTED A AUDIT REPORT IN FORM NO.10CCB. THIS LETTER IS NOT A VAILABLE ON ASSESSMENT RECORD BUT IT IS PERTINENT TO MENTION THAT SAME HAS BEEN D ULY ACKNOWLEDGE BY THE OFFICE OF ERSTWHILE ASSESSING OFFICER. IT IS VERYEVIDENT THAT INITIAL ALL THE COMMUNICATION WERE MADE BY THE APPELLANT WITH ACIT 15(3) WHEREAS, LATE R ON, ON TRANSFER, ASSESSMENT WAS COMPLETED BY NEW ASSESSING OFFICER I.E. ITO 9(2 )(1). TO PROVE THE GENUINENESS OF THE SAID SUBMISSION DATED 31-03-2008, DURING THE APPELLATE PROCEEDINGS, APPELLANTS' COUNSEL, CA VISHWAS MEHENDALE ALSO DREW MY ATTENTION TO CA KAMLESH DAVE'S LETTER DATED 25-11-2008 (ACKNOWLEDGED BY THE ITO-9(2)(L) ON 01-02-2008), WHEREIN ON THE FIRST PAGE, IT HAS BEEN STATED THAT THE APPELLANTS HAD CORRECTED THE DEPRECIATION CALCULATION AND REQUESTED FOR THE CORR ECTION OF ALLOWABLE DEPRECIATION AND ALSO MENTIONED THAT IT HAD' ALREAD Y FILED THE AUDIT. REPORT IN FORM 10CCB FOR REVISED FIGURES OF DEPRECIATION AND THE D EDUCTION U/S 80LB OF. IT ACT. IT WAS FURTHER SUBMITTED THAT, DURING THE SCRUTINY PRO CEEDINGS, THE LD. AO HAD NOT OBJECTED TO THE SAME NOR HAD HE INFORMED CA KAMLESH DAVE REGARDING NON AVAILABILITY OF THE AUDIT REPORT ON HIS RECORDS. IT WAS SUBMITTED THAT, ON PAGE 2 OF THE ASSESSMENT ORDER, THE LD. AO HAS REFERRED TO TH E SAID LETTER DATED 25-11-2008. HOWEVER, SURPRISINGLY, IN ASSESSMENT 'ORDER FATED 2 4-12- 2008 HE TOOK A STAND THAT APPELLANTS DID NOT FURNISH THE SAID AUDIT REPORT. A PPELLANTS' COUNSEL THUS SUBMITTED THAT THE APPELLANTS ARE NOT AWARE AS TO HOW THE SAI D LETTER WAS NOT AVAILABLE ON ASSESSMENT RECORDS 7. THUS IT IS CLEAR THAT THE ASSESSEE PRODUCED THE E VIDENCE AND CORRESPONDENCE WHICH HAS ESTABLISHED THE FACT THAT TH E ASSESSEE SUBMITTED THE AUDIT REPORT IN THE FORM NO. 10CCB BEFORE THE FIRST ASSESSING OFFICER AND, THEREAFTER, THE CASE WAS TRANSFERRED TO THE PRESENT ASSESSING OFFICER. EVEN IF THE SAID REPORT WAS NOT AVAILABLE WITH THE SECOND ASSESSI NG OFFICER, THE ASSESSEE ITA NO.4293/MUM/2013 ASSESSMENT YEAR: -2006-07 5 | P A G E CANNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80IB WHEN I T HAD ALREADY COMPLIED WITH THE REQUIREMENTS OF CLAIM OF DEDUCTION U/S 80IB. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN AL LOWING THE CLAIM OF THE ASSESSEE. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF SEPTEMBER 2014 SD/- SD/- (N.K. BILLAIYA) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D U;KF;D U;KF;D U;KF;D LNL; LNL; LNL; LNL; ) MUMBAI DATED 17-9 -2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI