ITO 8(3)(3), MUMBAI V. TEHCNO TARP & POLYMERS P.LTD, MUMBAI

ITA 4980/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4313 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 02-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEYDR
• Assessee Lawyers: DEVANG DIVECH A ARS
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 10B; 10

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- E,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO.4980/MUM/2013 /ASSESSMENT YEAR-2010-11 INCOME TAX OFFICER-8(3)(3) ROOM NO.202 AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. VS. M/S. TECHNO TARP & POLYMERS PVT. LTD.B-310, EVEREST GRANDE, 3 RD FLOOR,MAHAKALI CAVES ROAD OPP. AHURA CENTRE,ANDHERI(E) MUMBAI-400 093. PAN:AACCT 3607 R ( / ASSESSEE ) ( / RESPONDENT) /ASSESSEE BY :SH.BHARATVYAS & SHRI DEVANG DIVECH A - ARS / REVENUE BY :SH. SACHIDANAND DUBEY-DR / DATE OF HEARING :18 - 11 -2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 18.4.2013 OF CIT(A)-18, MUMBAI THE AO HAS FILED THE PRESENT APPEAL. 2. ASSESSEE-COMPANY,A 100% EXPORT ORIENTED UNIT IS ENG AGED IN THE BUSINESS OF MANUFACTURING OF TARPAULIN PRODUCTS.IT FILED ITS RETURN OF INCOME ON 11.10.10 DECLARING TOTAL INCOME AT RS.NIL. THE AO COMPLETED THE ASSESSMENT ON 27.3.12 U/S.143( 3) OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S.10B OF THE ACT OF RS.1.30 CRORES FROM CURRENT B USINESS PROFITS BEFORE SETTING OFF OF THE BROUGHT FORWARD DEPRECIATION LOSSES OF EARLIER YEAR S.HE WAS OF THE OPINION THAT ASSESSEE SHOULD HAVE ADJUSTED BROUGHT FORWARD UNABSORBED DEP RECIATION OF EARLIER YEARS AMOUNTING TO RS.25.71.LACS FROM THE CURRENT BUSINESS PROFIT,THER EFORE, HE HELD THAT THE DEDUCTION WILL BE ALLOWABLE ONLY AFTER SETTING OFF OF THE UNABSORBED DEPRECIATION PERTAINING TO AY 2009-10. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, AS SESSEE PREFERRED AN APPEAL BEFORE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM, IT WAS ARGUED THAT THE TRIBUNAL VIDE ITS ORDER DATED 14.1.2013 HAD ALLOWED THE APPEAL FILED BY THE ASSES SEE FOR AY 2009-10, WHEREIN SIMILAR ADDITION WAS MADE BY THE AO AND WAS UPHELD BY THE F AA. AFTER CONSIDERING THE ASSESSMENT ORDER AND SUBMISSION OF THE ASSESSEE THE FAA REFERR ED TO THE CASES OF BLACK AND VEATCH CONSULTING(P)LTD.(208TAXMANN144),YOKOGAVA INDIA LTD .(21TAXMANN154)AND TEI TECHNOLO - GIES (P.) LTD.(25 TAXMANN.COM 5).RELYING UPON THE A BOVE MENTIONED CASES AND THE DECISION OF THE TRIBUNAL FOR AY 2009-10, HE ALLOWED THE APPE AL OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW DEDUCTION U/S. 10B BEFORE ADJUSTING UNABSORBE D DEPRECIATION AND CARRYFORWARD LOSSES. 4. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE (DR) STA TED THAT THE MATTER COULD BE DECIDED ON MERITS. THE AUTHORIZED REPRESENTATIVE (AR) SUPPORTE D THE ORDER OF THE FAA. 4890/M/13-TECHNO TARP 2 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE WOULD LIKE TO REFER TO THE JUDGMENT OF THE HON'BLE BOMBAY HIGH CO URT DELIVERED IN THE CASE OF BLACK AND VEATCH CONSULTING (P.) LTD. (SUPRA). IN THAT MATTER THE HONBLE COURT HAD HELD THAT DEDUCTION U/S. 10A IN RESPECT OF AN ELIGIBLE UNIT HAD TO BE A LLOWED BEFORE SETTING OFF BROUGHT FORWARD DEPRECIATION AND LOSSES. IN THE CASE OF TEI TECHNOL OGIES (P.) LTD.(SUPRA), THE HONBLE DELHI HIGH COURT IN PARA- 19 CLEARLY HELD THAT SECTION 10 A PROVIDED FOR EXEMPTION AND SAME HAS TO BE GIVEN BEFORE ADJUSTMENT OF CURRENT AS WELL AS PA ST LOSSES.IN THE CASE OF VALUE PROCESS TECHNOLOGIES (I)(P) LTD. (31 TAXMANN.CO 152) IT HAS BEEN HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S.10A BEFORE SET OFF OF CARRY FORWARD LOSSES AND UNABSORBED DEPRECIA - TION OF THE EARLIER YEARS.CONSIDERING THE ABOVE,WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY.SO,CON FIRMING HIS ORDER,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISS ED. . ORDER PRONOUNCED IN THE OPE N COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( /SANDEEP GOSAIN ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI, DATE: 01.01.2016 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.