DCIT, New Delhi V. M/s Anmol Polymers Pvt. Ltd., New Delhi

ITA 4804/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4776 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .4804 4804 4804 4804/DEL/2012 /DEL/2012 /DEL/2012 /DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), 1(1), 1(1), 1(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. V VV VS. S.S. S. M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., 1003, G.D. 1003, G.D. 1003, G.D. 1003, G.D. ITL TOWERS, ITL TOWERS, ITL TOWERS, ITL TOWERS, NETAJI SUBHASH PALACE, NETAJI SUBHASH PALACE, NETAJI SUBHASH PALACE, NETAJI SUBHASH PALACE, RING ROAD, PITAMPURA, RING ROAD, PITAMPURA, RING ROAD, PITAMPURA, RING ROAD, PITAMPURA, DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. PAN : PAN : PAN : PAN : AAACA0870F. AAACA0870F. AAACA0870F. AAACA0870F. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEYUR PATEL, SR.DR. RESPONDENT BY : SHRI KAPIL GOEL, ADVOCATE. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-IV, NEW DELHI DATED 1 ST JUNE, 2012 FOR THE AY 2009-10. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THIS AP PEAL READS AS UNDER:- THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW TO AL LOW THE DEDUCTION U/S 80IC AMOUNTING TO RS.2,77,80,153/-. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE ASSESSEE IS A COMPANY WHICH IS ENGA GED IN THE BUSINESS OF TRADING AND MANUFACTURING OF CHEMICALS. THE ASSESSEE WAS ALLOWED DEDUCTION UNDER SECTION 80IC FOR THE PRECED ING EIGHT YEARS AND IT WAS THE NINTH YEAR IN WHICH SUCH DEDUCTION W AS CLAIMED. HOWEVER, THE ASSESSING OFFICER DENIED THE DEDUCTION CLAIMED UNDER SECTION 80IC WITH THE FOLLOWING FINDING:- ITA-4804/DEL/2012 2 4.10 FROM THE ANALYSIS OF THE BUSINESS ACTIVITY OF THE ASSESSEE COMPANY AND THE THIRTEENTH SCHEDULE READ W ITH SECTION 80IC, IT IS QUITE CLEAR THAT THE ASSESSEES BUSINESS ACTIVITY IS COVERED UNDER THIS PROHIBITED CATEGORY. THE ASSESSEE CONTENTION THAT IN EARLIER YEAR THE CLAIM OF 80IB/IC HAS BEEN ACCEPTED BY THE DEPARTMENT IS NOT TENABLE. THE PRINCIPLE OF RES-JUDICATA DOES NOT AP PLY TO INCOME TAX PROCEEDINGS. FURTHER, IN VARIOUS AUTHOR ITATIVE JUDICIAL PRONOUNCEMENTS, IT HAS BEEN CLEARLY LAID D OWN THAT FOLLOWING CORRECT PRINCIPLES/METHODS TO ARRIVE AT T HE INCOME OF THE ASSESSEE IS MORE IMPORTANT THAN THE PRINCIPLE OF CONSISTENCY. JUST BECAUSE THE WRONG C LAIM WAS BEING ACCEPTED IN EARLIER YEARS, IT CANNOT BE HELD THAT THIS YEAR ALSO THE ASSESSEE BE ALLOWED THE DEDUCTION FOR WHICH IT IS NOT ENTITLED. HENCE, THE DEDUCTION U/S 80IC IS NOT ALLOWABLE IN THIS CASE. 4. ON APPEAL, LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION WITH THE FOLLOWING FINDING:- 5.1 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND THE SUBMISSION MADE BY THE LD.AR ON THE ABOVE ISSUE . AS PER THE ASSESSMENT ORDER, THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF CHEMICALS. THE APPELLANT HAD CLAIMED DEDUCTION U/S 80IC AT RS.2,77,80,153/- FOR THE YEAR UNDER CONSIDERATION I N RESPECT OF ITS UNIT AT KALAMBH, H.P. IT WAS EXPLAI NED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS THAT IT IS MANUFACTURING POLY VINYL ALCOHOL WHICH IS USED FOR MANUFACTURING OF PAPER AND PULP. THE AO HAS OBSERV ED THAT THE ABOVE ITEM FALLS UNDER THE PROHIBITED CATE GORY AS PER THE THIRTEENTH SCHEDULE. THE AO HAS ACCORDINGL Y DISALLOWED THE DEDUCTION UNDER SECTION 80IC. 5.2 IN THIS REGARD, IT IS SUBMITTED BY THE LD. AR T HAT THE APPELLANT HAS BEEN CLAIMING DEDUCTION U/S 80IC SINC E ITS INCEPTION IN AY 2001-02 WHICH HAS BEEN ALLOWED BY T HE DEPARTMENT IN ALL THE YEARS INCLUDING IN SCRUTINY ASSESSMENTS U/S 143(3) MADE FOR AYS 2001-02, 2003-0 4, 2004-05 AND 2006-07. IT IS SUBMITTED THAT THE YEAR UNDER CONSIDERATION, I.E. AY 2009-10, IS THE NINTH YEAR O F DEDUCTION U/S 80IC IN THE CASE OF THE APPELLANT. I T IS SUBMITTED THAT NONE OF THE ITEMS MENTIONED BY THE A O ARE INCLUDED IN THE NEGATIVE LIST AS PER THE THIRTEENTH SCHEDULE. FOR EXAMPLE, ROSIN AND RESIN MENTIONED I N PARA 4.9 OF ASSESSMENT ORDER FALL IN ITEM CODE NOS. 3806 2000 ITA-4804/DEL/2012 3 AND 38099200 RESPECTIVELY, WHEREAS THE STIPULATED PROHIBITED ITEMS ARE ONLY 3808.10 AND 39.09 TO 39.1 5 WHICH DO NOT INCLUDE ROSIN AND RESIN. FURTHER, AS PER THE AO'S OWN ADMISSION THE ITEM MANUFACTURED BY THE ASSESSEE FALLS UNDER THE CLASSIFICATION 3905300 WHI CH IS NOT INCLUDED IN THE PROHIBITED LIST. BESIDES, THE ITEM ANMOSOLE MENTIONED BY THE AO FALLS UNDER THE CLASSIFICATION 39059990 WHICH IS NOT AN ITEM IN THE NEGATIVE LIST. SIMILARLY, ALL OTHER ITEMS REFERRED TO BY THE AO AR E ALSO NOT IN THE NEGATIVE LIST. THE LD.AR HAS FURNISHED COPY OF THE AUDITED ACCOUNTS AND TAX AUDIT REPORT, COPY OF AUDI T REPORT FORMAT APPROVED BY THE EXCISE DEPARTMENT, COPY OF E XCISE RETURNS FOR THE PERIOD UNDER CONSIDERATION AND COPY OF VAT RETURNS IN SUPPORT OF ITS ABOVE CLAIM. THE LD.AR H AS ALSO RELIED UPON A NUMBER OF CASE LAWS IN SUPPORT OF HIS ARGUMENTS. IT IS ALSO ARGUED THAT THE PRINCIPLE OF CONSISTENCY DEMANDS THAT THE DEDUCTION UNDER SECTIO N 80IC WHICH HAS BEEN ALLOWED BY THE DEPARTMENT IN TH E PRECEDING 8 YEARS SHOULD NOT BE INTERFERED WITH. 5.3 ON CAREFUL EXAMINATION, I FIND THAT THE AO HAS CONFUSED THE EXCISE CLASSIFICATIONS FOR THE ITEMS B EING MANUFACTURED BY THE APPELLANT COMPANY AND HAS ERRONEOUSLY HELD THE SAME TO BE COVERED UNDER THE NEGATIVE LIST. THE AO'S OBSERVATIONS IN THE ASSESS MENT ORDER APPEAR TO BE SELF-CONTRADICTORY AND DO NOT SH OW HOW THE SAID ITEMS ARE INCLUDED IN THE NEGATIVE LIST. THE AO HAS NOT GIVEN ANY REASON FOR DISCARDING THE APPELLANTS SUBMISSIONS. AS SUCH, THE DISALLOWANCE MADE BY THE AO APPEARS TO BE MISCONCEIVED. FURTHER, AS POINTED OU T BY THE LD.AR, WHICH WAS ALSO POINTED OUT BEFORE THE AO AT THE ASSESSMENT STAGE, THIS IS THE NINTH YEAR OF DEDUCTI ON U/S 80IC IN THE CASE OF THE APPELLANT AND THE DEPARTMEN T HAS ALLOWED THE APPELLANTS CLAIM OF DEDUCTION U/S 80IC IN ALL THE EARLIER YEARS UNDER SIMILAR FACTS INCLUDING IN SCRUTINY ASSESSMENTS U/S 143(3) MADE FOR VARIOUS YEARS AS MENTIONED SUPRA. CONSIDERING THE ABOVE, THE ADDITI ON OF RS.2,77,80,153/- MADE BY THE AO ON THIS COUNT CANNO T BE SUSTAINED. THE SAME IS, THEREFORE, DELETED. 5. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE DO NOT FIND ANY JUSTIFICATION TO IN TERFERE WITH THE ORDER OF LEARNED CIT(A). IT IS NOT IN DISPUTE THAT THE N ATURE OF THE BUSINESS ACTIVITY OF THE ASSESSEE AND THE ITEMS MANUFACTURED BY IT WAS THE SAME IN THIS YEAR AS WAS IN THE PRECEDING YEARS. T HAT IN AY 2001-02, ITA-4804/DEL/2012 4 2003-04, 2004-05 & 2006-07, ASSESSMENTS WERE COMPLE TED UNDER SECTION 143(3). THE EARLIER ASSESSMENTS HAVE NOT B EEN REOPENED OR DISTURBED. THE FIRST YEAR IN WHICH DEDUCTION WAS C LAIMED AND ALLOWED WAS 2001-02 AND, THEREAFTER, CONTINUOUSLY FOR EIGHT YEARS, I.E., UP TO AY 2008-09, THE DEDUCTION WAS ALLOWED. OUT OF THE EIG HT YEARS, FOUR YEARS WERE SUMMARY ASSESSMENT AND FOUR YEARS IT WAS AFTER THE SCRUTINY OF THE RETURN UNDER SECTION 143(3). ON THESE FACTS, I N OUR OPINION, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. DELHI PRESS PATRA PRAKASHAN LTD. (NO.2) [2013] 355 ITR 14 (DELHI) WOULD BE SQUARELY APPLICABLE, WHEREIN THEIR LORDSHIPS HELD A S UNDER:- (V) THAT THE ASSESSING OFFICERS OVER A PERIOD OF T HREE YEARS BEING ASSESSMENT YEARS 1988-89, 1989-1990 AND 1990-1991 HAD CONSISTENTLY ACCEPTED THE CLAIM OF TH E ASSESSEE FOR DEDUCTION UNDER SECTION 80-I AND IT WO ULD NOT BE OPEN FOR THE ASSESSING OFFICER TO DENY THE DEDUC TION UNDER SECTION 80-I ON THE GROUND OF NON-FULFILLMENT OF THE CONDITIONS UNDER SECTION 80-I(2) WITHOUT DISTURBING THE ASSESSMENT FOR THE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEARS IN WHICH THE SECOND AND THIRD UNITS WERE ESTABLISHED. 6. THAT THE HONBLE APEX COURT IN THE CASE OF CIT V S. EXCEL INDUSTRIES LTD., VIDE CIVIL APPEAL NO.125 OF 2013, WHILE REITERATING THEIR DECISION IN THE CASE OF RADHASOAMI SATSANG SAOMI BA GH VS. CIT [1992] 193 ITR 321 AND PARASHURAM POTTERY WORKS LTD . VS. ITO [1977] 106 ITR 1, HELD AS UNDER:- 31. IT APPEARS FROM THE RECORD THAT IN SEVERAL ASSESSMENT YEARS, THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND DID NOT PURS UE THE MATTER ANY FURTHER BUT IN RESPECT OF SOME ASSESSMEN T YEARS THE MATTER WAS TAKEN UP IN APPEAL BEFORE THE BOMBAY HIGH COURT BUT WITHOUT ANY SUCCESS. THAT BE ING SO, THE REVENUE CANNOT BE ALLOWED TO FLIP-FLOP ON T HE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN SPEND THE TAX PAYERS MONEY IN PURSUING LITIGATION FOR THE SAKE O F IT. ITA-4804/DEL/2012 5 7. THE RATIO OF THE ABOVE DECISION OF HONBLE APEX COURT AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT WOULD BE SQUARELY APPLICABLE ON THE FACTS OF THE ASSESSEES CASE. THIS IS THE NINTH YE AR OF RELIEF BEING CLAIMED BY THE ASSESSEE. IN ALL THE EARLIER EIGHT YEARS, RELIEF HAS BEEN ALLOWED ON IDENTICAL FACTS AND THE SAME HAS NOT BEE N DISTURBED. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS HON'BLE SUPREM E COURT, WE ARE OF THE OPINION THAT ON THE PRINCIPLE OF CONSISTENCY, L EARNED CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALL OW DEDUCTION UNDER SECTION 80IC OF THE ACT. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2013. SD/- SD/- ( (( (A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 13.12.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TA X, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), NEW DELHI. 1(1), NEW DELHI. 1(1), NEW DELHI. 1(1), NEW DELHI. 2. RESPONDENT : M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., M/S ANMOL POLYMERS PVT.LTD., 1003, G.D. 1003, G.D. 1003, G.D. 1003, G.D. ITL TOWERS ITL TOWERS ITL TOWERS ITL TOWERS, ,, , NETAJI SUBHASH PALACE, RING ROAD, PITAMPURA, NETAJI SUBHASH PALACE, RING ROAD, PITAMPURA, NETAJI SUBHASH PALACE, RING ROAD, PITAMPURA, NETAJI SUBHASH PALACE, RING ROAD, PITAMPURA, DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR