STANDARD PLASTICS, MUMBAI V. ACIT RG 17(3), MUMBAI

ITA 4903/MUM/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70909 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 22-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 26-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.4903/MUM/2009 ASSESSMENT YEAR : 2005-06 M/S. S TANDARD PLASTICS 51/52, KEDY SHOPPING CENTRE G-FLOOR, BELLASIS ROAD MUMBAI-400 008. PAN NO.AAXFS 9428 D VS. ACIT, RANGE 17(3), PIRAMAL CHAMBERS LALBAUG PAREL MUMBAI-400 012. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANUJ KISNADWALA REVENUE B Y : SHRI O.P. SINGH DATE OF HEARING : 22/8/2013 DATE OF PRONOUNCEMENT : 30 / 0 8 /2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF CIT (A)-XXVII, MUMBAI DATED 04.06.2009. THE ASSESSEE RAISED THE FO LLOWING GROUND:- DISALLOWANCE OF DEDUCTION U/S. 80-IB AMOUNTING TO RS.12,08,574/- THE LD. CIT(A)- 27 ERRED IN CONFIRMING THE DISALL OWANCE OF DEDUCTION U/S. 80IB DUE TO NON FULFILLING CONDITIONS SPECIFIE D FOR CLAIMING DEDUCTION U/S. 80IB. 2. IN THE COURSE OF APPELLATE PROCEEDINGS ASSESSEE RAISED AN ADDITIONAL GROUND ON THE ISSUE OF SERVICE OF NOTICE U/S. 143(2) WITHOUT THE RETURN. THE ADDITIONAL GROUND READS AS UNDER :- ITA NO.4903/M/09 A.Y.05-06 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ORDER PASSED BY AO U/S. 143(3) OF THE ACT WAS ILLEGAL AND BAD IN LAW AS THE NOTICE U/S. 1 43(2) OF THE ACT WAS ISSUED WITHOUT HAVING THE BENEFIT OF THE RETURN OF INCOME. 3. BRIEFLY STATED, THE ASSESSEE IS A PARTNERSHIP FI RM STATED TO BE CARRYING ON BUSINESS OF MANUFACTURING OF INJECTION MOULDED/BLOW MOULDED INDUSTRIAL AND HOUSEHOLD PRODUCTS WITH THE AID OF POWER. THE AO AFTER ANALYZING THE SALES AND PURCHASES AND VARI OUS EXPENDITURES WAS OF THE VIEW THAT ASSESSEE DOES NOT HAVE ANY ASS ETS, DOES NOT HAVE ANY FACTORY PREMISES TO CARRYOUT PRODUCTION / MANUF ACTURING ACTIVITY AND FURTHER HE HAS NOT SPENT ANY AMOUNT TOWARDS SAL ARY. THEREFORE, CONDITIONS MENTIONED UNDER SECTION 80IB ARE NOT FUL FILLED. HE DENIED THE DEDUCTION UNDER SECTION 80IB. BEFORE THE LD. CIT(A) THE ASSESSEE MADE SUBMISSIONS AND PLACED DOCUMENTS ON RECORD FROM PAG E-1 TO 82 SUCH AS ELECTRICITY BILLS, MACHINERY BILLS, LABOUR PAYMENTS , RAW MATERIAL CONSUMPTION, REGISTRATION CERTIFICATE OF SMALL SCAL E INDUSTRY AND ALSO LEASE AGREEMENT FOR HIRE OF FACTORY PREMISES IN SUP PORT OF ITS CONTENTIONS. LD. CIT(A) HOWEVER DID NOT CONSIDER ANY OF THEM, RE PEATED FINDINGS GIVEN BY AO VIDE PARA-16 AND APPROVED THE ORDER OF THE AO . 4. IT IS THE SUBMISSION BY THE LD. COUNSEL THAT THE LD. CIT(A) DID NOT EXAMINE THE EVIDENCE PLACED ON RECORD BY THE ASSESS EE NOR GAVE ANY FINDINGS REJECTING THE SAME BUT SIMPLY FOLLOWED THE AOS ORDER IN DENYING THE BENEFIT. IT WAS FURTHER SUBMITTED THAT ORIGINAL LY DEDUCTION WAS ALLOWED TO THE UNIT WHEN THIS WAS UNDER PROPRIETARY CONCERN AND LATER ON IT BECAME A FIRM AND ASSESSEE HAS RELEVANT DETAILS TO SUPPORT THAT CONDITIONS UNDER SECTION 80IB(10) ARE SATISFIED. TH EREFORE, IT WAS REQUESTED FOR RESTORING THE MATTER FOR EXAMINING TH ESE DETAILS AND ALLOWING DEDUCTION UNDER SECTION 80IB. WITH REFEREN CE TO ADDITIONAL GROUND, IT WAS SUBMITTED THAT RETURN OF INCOME FILE D WITH ITO -15(1)(2) ON 28.10.2005 WHICH WAS NOT TRANSFERRED TO THE PRESENT AO AS PER THE LETTERS DT 14 TH JUNE, 2007 AND 17 TH OCTOBER, 2007 MENTIONED IN THE FIRST ITA NO.4903/M/09 A.Y.05-06 3 PAGE OF ORDER BY AO. BUT IT WAS STATED THAT NOTICE UNDER SECTION 143(2) WAS ISSUED ON 11.10.2006. THEREFORE, IT WAS SUBMITT ED THAT AT THE TIME OF ISSUANCE OF NOTICE, THE RETURN WAS NOT AVAILABLE WI TH THE AO. THEREFORE, THE ASSESSEE HAS RAISED LEGAL GROUND ABOUT THE NOTI CE UNDER SECTION 143(2). 5. THE LD. DR HOWEVER, REFERRED TO THE ASSESSMENT O RDER TO SUBMIT THAT THE RETURN WAS FILED AND THROUGH COMPUTER ASSI STED SCRUTINY SYSTEM (CASS) SELECTED FOR SCRUTINY AS STATED IN TH E ASSESSMENT ORDER. THEREFORE, NOTICE UNDER SECTION 143(2) WAS ISSUED C ORRECTLY BY THE AO. IT MAY BE THAT AFTER NOTICE WAS ISSUED FILE MIGHT HAVE BEEN TRANSFERRED TO PRESENT AO AS STATED IN THE ORDER. HE OBJECTED TO T HE ADDITIONAL GROUND. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND EXA MINED THE RECORD. AS SEEN FROM THE ORDER THE AO WAS REQUESTING THE IT O-15(1)(2) FOR FORWARDING CASE RECORDS AS LATE AS 17.10.2007 AND S INCE NO RECORDS WERE RECEIVED, XEROX COPIES OF RETURN ALONG WITH ENCLOSU RES WERE OBTAINED FROM THE ASSESSEE AND ASSESSMENT PROCEEDINGS WERE COMPLE TED. THIS FACT, AS RECORDED BY THE AO IN THE FIRST PAGE OF THE ORDER, DO INDICATE THAT THE AO DID NOT HAVE MORE THAN TWO MONTHS TIME TO COMPLETE THE ASSESSMENT PROCEEDINGS. WE ARE OF THE OPINION THAT AO DID NOT VERIFY ANY FACTUAL ASPECT OF ASSESSEES MANUFACTURING ACTIVITY, CONTEN TIONS AND SIMPLY DISALLOWED THE CLAIM BY ANALYZING THE P&L ACCOUNT, BALANCE SHEET ON VARIOUS PRESUMPTIONS. ASSESSEE STATED TO HAVE SUBMI TTED THE DETAILS BEFORE LD. CIT(A). INSTEAD OF REMANDING THE MATTER FOR FRESH EXAMINATION, LD CIT(A) REPEATED THE FINDINGS OF THE AO IN THE OR DER AT PARA-16 AND DISMISSED THE APPEAL. WE ARE OF THE OPINION THAT AS SESSEE SHOULD GET DUE OPPORTUNITY TO JUSTIFY ITS CLAIMS, MORE APPROPRIATE LY IN THE LIGHT OF ITS SUBMISSIONS AS STATED IN PARA-14 OF THE CIT(A) ORDE R. THEREFORE, WE ORDER FRESH EXAMINATION OF THE FACTS BY THE AO WITH REFER ENCE TO VARIOUS CONTENTIONS. THE AO ALSO SHOULD EXAMINE THE ADDITIO NAL GROUND RAISED ITA NO.4903/M/09 A.Y.05-06 4 BEFORE US SO AS TO CLARIFY THE MATTER TO THE ASSESS EE. THEREFORE, WITHOUT GIVING ANY FINDINGS ON MERITS OF THE CONTENTIONS RA ISED BEFORE US, WE RESTORE THE ASSESSMENT TO THE FILE OF AO WITH A DIR ECTION TO GIVE DUE OPPORTUNITY TO THE ASSESSEE AND COMPLETE THE ASSESS MENT PROCEEDINGS ACCORDING TO THE FACTS AND LAW. ASSESSEE CAN RAISE OBJECTION WITH REFERENCE TO ADDITIONAL GROUND RAISED BEFORE US BEF ORE AO WHO SHOULD ALSO EXAMINE THIS ASPECT IN ADDITION TO THE CLAIM O F 80IB DEDUCTION. THE ORDERS OF THE AO AND CIT(A) ARE SET ASIDE AND ASSES SMENT PROCEEDINGS ARE RESTORED TO THE FILE OF AO FOR FRESH CONSIDERAT ION. 7. IN THE RESULT, ASSESSEE APPEAL IS CONSIDERED ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2013. SD/- SD/- (AMIT SHUKLA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 30/08/2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.