ACIT 25(1), MUMBAI V. BIO-VET INDUSTRIES, MUMBAI

ITA 4320/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101291 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2013
• Court: TRIBUNAL
• Department Lawyers: DR SANTOSH MANKASKAR
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI RAJENDRA , ACCOUNTAN T MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER . / ITA NO . 4320 / MUM./ 2013 ( / ASSESSMENT YEAR : 20 08 09 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 25(1), C 11, PRATYAKSHA KAR BHAWAN, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI 400 051 .. / APPELLANT V/S M/S. BIO VET INDUSTRIES SHANTI VILLA, SHANTIVAN TOWER DEVIDAS LANE, NEAR CLUB AQUARIA BORIVALI (W), MUMBAI 400 103 PAN = AADFB3600L .... / RESPONDENT / REVENUE BY : DR. SANTOSH MANKASKAR / ASSESSEE BY : NONE / DATE OF HEARING 2 9 .09.2015 / DATE OF ORDER 09.10.2015 / ORDER , / PER SAKTIJIT DEY, J.M. THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST THE ORD ER DATED 22 ND MARCH 2003, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 35, M/S. BIO VET INDUSTRIES 2 MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2008 09. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, TH E LD. CIT (A) ERRED IN ALLOWING DEDUCTION OF RS 8,24,335/ - CLAIMED BY THE ASSESSEE UNDER SECTION 801B OF THE INCOME TAX ACT 1961 FOR ITS UNIT NO. II WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE UNIT NO. II IS ONLY AN EXTENSION OF UNIT NO. I AND THEREFOR E UNIT II IS NOT ENTITLED FOR 100% EDUC A TION UNDER SECTION 801B OF THE INCOME TAX ACT 1961. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT (A) ERRED IN ALLOWING DEDUCTION OF RS 8,24,335/ - CLAIMED BY THE ASSESSEE UNDE R SECTION 801B OF THE INCOME TAX ACT 1961 FOR ITS UNIT NO.II WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD DIVERTED THE EXPENSES OF ITS UNIT II TO UNIT I AND HAD REDUCED THE TAXABLE PROFITS OF UNIT I AND INCREASED THE PROFIT OF UNIT II AND CLAIMED 10 0% EXEMPTION ON THE PROFIT OF UNIT II' 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN ALLOWING DEDUCTION UNDER SECTION 801B OF THE INCOME TAX ACT 1961 CLAIMED BY THE ASSESSEE FOR ITS UNIT NO.II WITHOUT APPR ECIATING THE FACT THAT THE NEW UNIT AND THE OLD UNIT ARE AN INTEGRATED SINGLE UNIT FORMING PART OF THE ACTIVITIES OF THE ASSESSEE . 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED . ' 2. WHEN THE CASE WAS CALLED FOR HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT ASSESSEE. CONSIDERING THE NATURE OF DISPUTE, WE PROCEED TO DISPOSE OF THE PRESENT APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. M/S. BIO VET INDUSTRIES 3 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, A PARTNERSHIP FIRM, IS ENGAGED IN THE BUSINESS OF POULTRY AND CATTLE FIELDS. FOR THIS PURPOSE, THE ASSESSEE HAS SET ING A UNIT AT DHABOL IN DAMAN. FOR THE ASSESSMENT YEAR UN DER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2008, DECLARING TOTAL INCOME OF ` 48,65,970. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS TWO UNITS NAMELY UNIT I AND UNIT II AND AS FAR AS U NIT II IS CONCERNED, THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). THE ASSESSING OFFICER, OBSERVING THAT DEDUCTION CLAIMED UNDER SECTION 80IB FOR UNIT II, HAS BEEN DISALLOWED IN THE ASSESSMENT ORDE R PASSED FOR THE ASSESSMENT YEAR 2003 04 TO 2007 08, BY HOLDING THAT UNIT II IS NOT A NEW UNIT BUT AN EXTENSION OF UNIT I, DISALLOWED ASSESSEES CLAIM UNDER SECTION 80IB. BEING AGGRIEVED OF SUCH DISALLOWANCE, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. IN THE COURSE OF HEARING BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SUBMITTED BY THE ASSESSEE THAT WHILE DECIDING ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2003 04, THE TRIBUNAL, VIDE ORDER DATED 25 TH FEBRUARY 2010, PASSED IN ITA NO .5928 AND 6826/MUM./2006, HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT BY HOLDING THAT UNIT II OF THE ASSESSEE IS A SEPARATE INDUSTRIAL UNDERTAKING, HENCE, ENTITLED FOR DEDUCTION UNDER SECTION 80IB. IT WAS SUBMITTED, FOLLOWING TH E ORDER PASSED FOR THE ASSESSMENT YEAR 2003 M/S. BIO VET INDUSTRIES 4 04, THE TRIBUNAL ALSO ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB FOR UNIT II IN THE ASSESSMENT YEAR 2004 05. THE FIRST APPELLATE AUTHORITY, AFTER PERUSING THE ORDER OF THE TRIBUNAL HAVING FOUND THAT THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB FOR UNIT II, WAS ACCEPTED BY THE TRIBUNAL, ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB FOR THE IMPUGNED ASSESSMENT YEAR AND DELETED THE ADDITION OF ` 8,24,335, MADE BY THE ASSESSING OFFICER . 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. AS COULD BE SEEN, THE SOLITARY ISSUE IN DISPUTE IN THE PRESENT APPEAL IS IN RELATION TO ASSESSEES CLAIM OF DEDUC TION UNDER SECTION 80IB OF THE ACT FOR UNIT II. THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM OF DEDUCTION BY RELYING UPON THE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2003 04 TO 2007 08. HOWEVER, AS COULD BE SEEN FROM THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS), THE TRIBUNAL, WHILE DECIDING ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2003 04, ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB, BY HOLDING THAT UNIT II, IS A SEPARATE INDUSTRIAL UNDERTAKING. THIS DECISION WAS AGAIN FOLLOWED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004 05 IN ITA NO.5328/MUM./ 2007 AND ITA NO.3398/MUM./2008, ORDER DATED 8 TH JUNE 2012. THE FINDING OF THE TRIBUNAL IN THE SAID ORDER IS REPRODUCED HEREIN BELOW: M/S. BIO VET INDUSTRIES 5 5. WE OBSERVE THAT IN RESPECT OF D EDUCTION U/S 80IB OF THE ACT OF THE ASSESSEE, THE TRIBUNAL CONSIDERED THE SAID ISSUE IN A.Y. 2003 04 VIDE ITS ORDER DATED 25.2.2010 IN I.T. ACT NOS.5928 & 6826/M/2006 AND HAS HELD THAT UNIT II IS NEW ONE AND IS A SEPARATE INDUSTRIAL UNDERTAKING WHICH IS EN TITLED TO DEDUCTION U/S 80IB OF THE ACT @ 100%. HOWEVER, A.O. MADE THE DISALLOWANCE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION U/S 80IB OF THE ACT BY FOLLOWING HIS ORDER FOR A.Y. 2003 04. IN VIEW OF FACT THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE TO HOLD THAT UNIT II OF THE ASSESSEE IS A SEPARATE INDUSTRIAL UNDERTAKING AND IS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT AND LEARNED CIT(A) HAS FOLLOWED THE SAID ORDER OF THE TRIBUNAL WHILE ALLOWING THE CLAIM OF THE ASSESSEE, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) THEREFORE, GROUND 1 OF APPEAL TAKEN BY THE DEPARTMENT IS REJECTED. 6. THUS, AS COULD BE SEEN FROM THE ORDER OF THE CO ORDINATE BENCH REPRODUCED HEREIN ABOVE, THE TRIBUNAL HOLDING THAT UNIT II, IS A SEPARAT E INDUSTRIAL UNDERTAKING HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT. THE LEARNED COMMISSIONER (APPEALS), HAVING ALLOWED ASSESSEES CLAIM OF DEDUCTION FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, THERE IS NO REASON TO INTER FERE WITH THE SAME WHICH IS HEREBY UPHELD. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 09.10.2015 SD/ - RAJENDRA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 09.10.2015 M/S. BIO VET INDUSTRIES 6 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE; (2) / THE REVENUE; (3) ( ) / THE CIT(A); (4) / THE CIT, M UMBAI CITY CONCERNED; (5) , , / THE DR, ITAT, MUMBAI; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI