ACIt, Thiruvalla V. All-Gayathri Trading Co.P.Ltd, Chengannur

ITA 478/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0999 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 10-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Section: 10B

Judgement Text

1 ITA NO. 478/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO.478/COCH/2011 (ASSESSMENT YEAR 2006-07) A.C.I.T., CIR.1 VS M/S AL-GAYATHRI TRADING CO THIRUVALLA PVT LTD, 363-A, GAYATHRI HOUSE CHERIYANAD P.O., CHENGANNUR PAN : AABCA9766B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M ANIL KUMAR, C.I.T. & SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI ARUN RAJ S DATE OF HEARING : 31-01-2013 DATE OF PRONOUNCEMENT : 28-02-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, TRIVANDRUM DATED 10-03-2011 AND PERTAINS TO ASSESSM ENT YEAR 2006-07. 2 ITA NO. 478/COCH/2011 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEDUC TION U/S 10A OF THE ACT. 3. SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT TH E TAXPAYER IS IN THE BUSINESS OF PACKING TEA IN TEA BAGS AND BOTTLES AND EXPORTING THE SAME TO FOREIGN COUNTRIES. THEREFORE, ACCORDING TO THE LD. DR, THERE WAS NO MANUFACTURING OR PRODUCTION OF TEA, THEREFORE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE TAXPAYER. ACCORDING TO THE LD.DR, IN THE ABSENCE OF ANY MANUFACTURE OR PRODUCTION, THE TAXPA YER IS NOT ENTITLED FOR ANY DEDUCTION U/S 10A OF THE ACT. 4. ON THE CONTRARY SHRI ARUN RAJ, THE LD.COUNSEL FO R THE TAXPAYER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2004-05 A SI MILAR ISSUE CAME UP BEFORE THIS TRIBUNAL IN THE TAXPAYERS OWN CASE. T HIS TRIBUNAL, AFTER CONSIDERING THE JUDGMENT OF THE KERALA HIGH COURT I N TATA TEA LTD VS A.C.I.T. (2011) 338 ITR 285 (KER) FOUND THAT THE TAXPAYER IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT. THE LD.COUNSEL FURTHER SUBMITT ED THAT THE TAXPAYER UNDERTAKING WAS ESTABLISHED IN THE SPECIAL ECONOMIC ZONE, KAKKANAD FOR MANUFACTURING TEA BULK, TEA IN BOTTLES / PACKETS AN D TEA BAGS. SINCE IT WAS 3 ITA NO. 478/COCH/2011 ESTABLISHED IN SPECIAL ECONOMIC ZONE, THE DEFINITIO N CONTAINED IN IMPORT / EXPORT REGULATIONS IS APPLICABLE. THEREFORE, ACCOR DING TO THE LD.COUNSEL, EXPORT OF TEA BULK, TEA IN BOTTLES / PACKETS AND TE A BAGS AFTER THE SAME IS PACKED ACCORDING TO THE NEEDS OF THE IMPORTER IS AL SO A MANUFACTURE ACTIVITY. THEREFORE, THE LD.COUNSEL SUBMITTED THAT THE ORDER OF THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2004-05 IS EQUALLY APPLICAB LE FOR THE YEAR UNDER CONSIDERATION ALSO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE TAXPAYER UNIT WAS ESTABLISHED IN THE SPECIAL ECONOM IC ZONE. THE KERALA HIGH COURT, AFTER CONSIDERING THE DEFINITION FOUND IN THE INCOME-TAX ACT IN RESPECT OF UNIT FOUND IN THE SPECIAL ECONOMIC ZONE UNDER IMPORT / EXPORT REGULATIONS FOUND THAT THE UNITS ESTABLISHED IN SPE CIAL ECONOMIC ZONE FOR BLENDING AND PACKAGE OF TEA IS ELIGIBLE FOR DEDUCTI ON U/S 10A OF THE ACT. IN THE CASE OF TATA TEA LTD (SUPRA), THE KERALA HIGH C OURT, AFTER CONSIDERING THE JUDGMENT OF THE APEX COURT IN CIT VS TARC AGENC IES 292 ITR 444 (SC) FOUND THAT BLENDING AND PACKING OF TEA AMOUNTS TO MANUFACTURE, THEREFORE, THE TAXPAYER IS ELIGIBLE FOR DEDUCTION U /S 10A OF THE ACT. THE 4 ITA NO. 478/COCH/2011 KERALA HIGH COURT SPECIFICALLY OBSERVED IN THE CASE OF GIRNAR INDUSTRIES 338 ITR 277 (KER) THAT THE EXPORT PROCESSING ZONE AND F REE TRADE ZONE AND 100% EXPORT ORIENTED UNITS ARE COVERED BY SECTIONS 10, 1 0AA, 10B OF THE ACT. THEREFORE, IT WAS FOUND THAT THE JUDGMENT OF THE KE RALA HIGH COURT IN THE CASE OF GIRNAR INDUSTRIES (SUPRA) IS APPLICABLE EVE N AFTER THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS TARA AGENCY 29 2 ITR 444 (SC). IN THE CASE BEFORE US, THE TAXPAYER IS ADMITTEDLY ESTABLIS HED IN THE SPECIAL ECONOMIC ZONE AND TRADE LICENCE WAS GRANTED FOR MAN UFACTURE OF TEA BAGS, ETC. FOR 100% EXPORT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DECISION OF THIS TRIBUNAL FOR THE ASSESSME NT YEAR 2004-05 IS EQUALLY APPLICABLE FOR THE YEAR UNDER CONSIDERATION. WE DO NOT FIND ANY REASON TO COME TO A DIFFERENT VIEW FOR THE YEAR UNDER CONSIDE RATION. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH FEBRUARY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 28 TH FEBRUARY, 2013 PK/- 5 ITA NO. 478/COCH/2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX BY ORDER 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH