ACIT 24(2), MUMBAI V. H.K.DESIGNS(INDIA), MUMBAI

ITA 4388/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7851 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 17-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL K MODY
• Keywords: Opportunity of being heard
• Section: 143(3); 10AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.4388/MUM/2015 (AY. 2011-12) THE ACIT-24(2), ROOM NO.509, 5 TH FLR., PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI ...... APPELL ANT VS. M/S. H.K.DESIGNS, UNITS NO.113, SDF-IV, SEEPZ, SEZ, ANDHERI (E), MUMBAI 400096. PAN: AAEFH0962N .... RESPONDENT APPELLANT BY : SHRI RAHUL RAMAN RESPONDENT BY : S/ SHRI NITESH JO SHI & VIPUL K. MODY DATE OF HEARING : 30/03/2017 DATE OF PRONOUNCEMENT : 31/03/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE REVENUE PERTA INING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST AN ORDE R PASSED BY CIT(A)-36 MUMBAI DATED 29/05/2015, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT), DATED 25/03/2014. 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 2 ITA NO.4388/MUM/2015 (AY. 2011-12) (1) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING ASSES-SEE'S CLAIM OF E XEMPTION/SO 10AA, FOR A SUM OF RS. 21,32,51,394 IGNORING THE FACT THAT THE UNDERTA KING WAS FORMED BY RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE IN THE NAME AND STYLE H.K. JEWELS BY WAY OF ASSIGNMENT TO THE ASSESSEE FIRM VIZ. H.K. DESIGNS (INDIA).' (2) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEE'S PLEA T HAT EARLIER UNDERTAKING HAS NOT DONE ANY BUSINESS IGNORING THE FACT EMANATING FROM LETTER DT. 13.09.2005 OF H.K. JEWELS TO SEEPZ AUTHORITY, AUDIT REPORT AND OTHER T HINGS WHICH SHOW THAT MANUFACTURING ACTIVITY BEGAN PRIOR TO 01-04-2006.' (3) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING ASSESSEE'S EXEMPTION U /S. 10AA IGNORING THE FACT THAT THE ASSESSEE HAS USED OLD MACHINERY AND MACHINERY P URCHASED IN THE NAME OF H.K. JEWELS.' (4) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT T HE ASSESSEE IS NO AN ENTREPRENEUR IN TERMS OF SECTION 2(J) OF SPECIAL ECONOMIC ZONES ACT, 2005 AND THE LETTER OF APPROVAL FROM DEVELOPMENT COMMISSIONER U/S. 15(9) W AS ISSUED TO H.K. JEWELS, HAVING PAN AACFH4846F, AND NOT TO H. K. JEWELS WHIC H TRANSFERRED APPROVAL TO THE ASSESSEE'. ' (5) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO ASSESS THE REC EIPTS FROM SALE OF DUST OF RS.8,77,638/ - AND JOB WORK CHARGES OF RS.7,87,635/ - AS INCOME FROM BUSINESS (DOMESTIC SALES) AND TO ALLOW DEDUCTION US. 10AA IG NORING THE PROVISIONS OF SECTION 10AA(1) OF THE I.T. ACT, 1961.' (6) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT( APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. AS THE GROUNDS OF APPEAL REVEAL THAT THE ONLY IS SUE IN THIS APPEAL RELATES TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION10AA OF THE ACT. AT THE TIME OF HEARING IT WAS A COMMON POINT BETWEEN THE PARTIES THAT SIMILAR DISPUTE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSMENT YEARS 2007- 08 TO 2009-10 AND VIDE ORDER DATED 04/11/2015 IN IT A NOS. 5192/MUM/2010,4058/MUM/2011& 3213/MUM/2012, AND THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. THE LD. REPRESENTATIVE FOR 3 ITA NO.4388/MUM/2015 (AY. 2011-12) THE ASSESSEE POINTED OUT THAT IN SO FAR AS THE ASSE SSMENT YEAR 2007-08 IS CONCERNED, IN THE REMAND PROCEEDINGS THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 143(3) R.W.S. 254 OF THE ACT DATED 31/12/2016 HAS ALLOWED THE CLAIM OF THE ASSESSEE FOR EXEMPTION UND ER SECTION 10AA OF THE ACT . IN THIS CONTEXT, A COPY OF THE ORDER OF THE A SSESSING OFFICER HAS ALSO BEEN PLACED ON RECORD. 4. IN THE ABOVE BACK GROUND, WE DEEM IT FIT AND PRO PER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL APPLY THE ORDER OF THE TRIBUNAL DATED 04/11/2015 (SUPRA) IN THIS YEAR A LSO, IN THE SAME MANNER AS DONE BY HIM IN ASSESSMENT YEAR 2007-08. NEEDLESS T O MENTION, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD IN THE MATTER. 5. ACCORDINGLY, IN VIEW OF THE AFORESAID PRECEDENT, THE ORDER OF THE CIT(A) IS SET-ASIDE AND THE MATTER IS REMANDED BACK TO THE FILE OF ASSESSING OFFICER TO CARRY OUT THE AFORESAID DIRECTIONS. 6. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/2017 SD/- SD/- (AMARJIT SINGH ) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 31/03/2017 VM , SR. PS 4 ITA NO.4388/MUM/2015 (AY. 2011-12) 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