ACIT 20(1), MUMBAI V. JAGDISH P KHANDELWAL, MUMBAI

ITA 5068/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3731 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 05-08-2014
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Assessee Lawyers: NISHIT GANDHI AR
• Section: 143(3); 10B

Judgement Text

, , J, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.5068/MUM/2014 ASSESSMENT YEAR: 2011-12 A CIT - 20(1) R.NO.603, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL MUMBAI- 400012 / VS. JAGDISH P KHANDELWAL PROP OF AMRIT IMPEX 13 KONARK EXPRESS, DR E. MOSES RD. WORLI NAKA, MUMBAI-400018 (ASSESSEE ) (REVENUE) P.A. NO . AABPK1144L REVENUE BY SHRI K.MOHANDAS CIT (DR) RESPONDENT BY SHRI NISHIT GANDHI (AR) $ % & '( / DATE OF HEARING : 18/02/2016 & '( / DATE OF ORDER: 11/03/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 31 {(IN SHORT CIT(A)}, DATED 15.05.2014 PASSED AG AINST JAGDISH P KHANDELWAL 2 ASSESSMENT ORDER U/S 143(3) DATED 24.02.2014 FOR T HE ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW AN D IN THE CIRCUMSTANCES OF THE CASE IN NOT APPRECIATING T HE FACT THAT THE ASSESSEE HAS NOT COMPLIED WITH THE TE RM OF STIPULATIONS CONTAINED IN SEC LOB IN ITS ENTIRETY. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE IN NOT CONSIDERING THE FA CT THAT THE ASSESSEE ACTUALLY SPLIT UP AND RECONSTRUCTED HI S BUSINESS WHICH WAS ALREADY IN EXISTENCE. 3. THE CIT(A) HAS ERRED ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE IN RELYING UPON THE DECIS ION OF THE TRIBUNAL IN THE CASE OF ASSESSEE FOR EARLIER YE ARS 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE IN RELYING ON THE DEC ISION OF THE HON'BLE TRIBUNAL DATED 21.09.2011 PASSED BY THE HON'BLE TRIBUNAL, MUMBAI 'I' BENCH IS OTHERWISE BAD IN LAW AND NOT MAINTAINABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI NISHIT GANDHI, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI K.MOHANDAS, DEPARTMENTA L REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSE E, AT THE VERY OUTSET THAT THE ISSUES RAISED IN THIS APPEAL S TANDS JAGDISH P KHANDELWAL 3 COVERED WITH THE JUDGMENT OF THE TRIBUNAL IN ASSESS EES OWN CASE FOR VARIOUS EARLIER ASSESSMENT YEARS, AND WHIL E ALLOWING THE CLAIM TO THE ASSESSEE, LD. CIT(A) HAS FOLLOWED THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE. 4. ON THE OTHER HAND, NO SERIOUS OBJECTION WAS RAISED BY THE LD. DR ON THE AFORESAID SUBMISSIONS OF THE LD. COUN SEL. IT IS NOTED BY US FROM THE GROUNDS RAISED BY THE REVENUE THAT LD. CIT(A) HAS FOLLOWED AN EARLIER ORDER OF THE TRIBUNA L DATED 29.09.2011. 5. IT HAS BEEN STATED IN THE GROUNDS RAISED BEFORE TH E TRIBUNAL THAT EARLIER ORDER OF THE TRIBUNAL DT 29.09.2011 IS BAD IN LAW. WE FIND THAT THE APPROACH OF THE REVENUE BY RAISING THE GROUNDS IN THIS MANNER AGAINST THE JUDICIAL DECORUM . THE ORDER PASSED BY THE TRIBUNAL CAN BE CONTESTED BY TH E REVENUE BEFORE THE HONBLE HIGH COURT, IF THE SAME IS NOT F OUND TO BE IN ACCORDANCE WITH LAW BY THE REVENUE. BUT MAKING AN A LLEGATION IN ITS GROUND BEFORE THE TRIBUNAL ITSELF THAT THE E ARLIER ORDER OF THE TRIBUNAL IS BAD IN LAW, IS BEYOND THE HORIZONS OF JUDICIAL DECORUM AND THUS NOT ACCEPTABLE. 6 . BE THAT AS IT MAY, THE EFFECTIVE ISSUE RAISED BEF ORE US BY THE REVENUE IN ITS GROUNDS IS THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 10B, ON THE GROUND THAT ASSESSEE HAD SPLIT UP AND RECONSTRUCTED HIS BUSINESS. IN THIS REGARD IT I S NOTED THAT YEAR BEFORE US IS NOT THE FIRST YEAR IN WHICH CLAIM U/S 10B WAS MADE BY THE ASSESSEE. THIS CLAIM HAS BEEN MADE BY T HE JAGDISH P KHANDELWAL 4 ASSESSEE IN EARLIER YEARS ALSO, WHEREIN IT WAS DISA LLOWED BY THE AO BUT ALLOWED BY THE TRIBUNAL IN VARIOUS ORDERS PA SSED BY IT. IT IS NOTED THAT LD. CIT(A) HAS RELIED UPON ALL THE SE ORDERS WHILE ACCEPTING THE CLAIM OF THE ASSESSEE, AND THE RELEVANT PORTION OF HIS ORDER IS REPRODUCED BELOW: I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE AR AS DISCUSSED ABOVE. FROM THE FACTS BROUGHT ON RECORD, AS DISCUSSED ABOVE, I FIND THAT THIS ISSUE IS DECIDED BY THE HON'BLE ITAT IN I TA NOS.4975/MUM/2007 FOR A.Y. 2002-03, ITA NO. 6102/MUM/2006 FOR THE A.Y. 2003-04 DATED 16.12.2008, ITA NO. 4976/MUM/2007 FOR A.Y. 2004-05 DATED 10-12-2009 AND IN ITA NO. 4763/MUM/2010 FOR A.Y. 2007-08 DATED 21-09- 2011. THE RELEVANT FINDINGS OF THE HON'BLE ITAT GIVEN AS PER PARAS-10 & 11 OF ITS ORDER DATED 10- 12-2009 DEALING WITH A.Y. 2006-07 READ AS UNDER:- 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING OTHER MATERIALS ON RECORD, WE FIND THAT THERE IS NO SUBSTANCE IN THE APPEALS OF T HE DEPARTMENT. WE NOTE THAT THE AO FIRSTLY HELD THAT DEDUCTION U/S 10B IS NOT ALLOWABLE. THEREAFTER, WIT HOUT PREJUDICE, THE AO HELD THAT THE ASSESSEE IS NOT ENT ITLED FOR DEDUCTION ON CUT AND POLISHED DIAMONDS AND THEREAFTER WITHOUT PREJUDICE THE AO HELD THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION ON STUDDED JEWELLERY WITH GOLD. WE NOTICE THAT THE CIT(A) HAS DECIDED THE ISSUE THAT THE ASSESSEE IS ENTITLED FOR DEDUCTI ON U/S 10B ONLY BECAUSE OF THE REASONS THAT BEFORE THE CIT (A) THE ASSESSEE HAS RAISED A GROUND THAT THE AO WAS NOT JUSTIFIED IN NOT ALLOWING DEDUCTION U/S 1OB. ALTERN ATE FINDINGS OF THE AO IN RESPECT OF CUT AND POLISHED DIAMOND JEWELLERY AND STUDDED JEWELLERY WITH GOLD W ERE NOT CHALLENGED BEFORE THE CIT(A) BY THE ASSESSEE. REGARDING THE ISSUE IN RESPECT OF DEDUCTION ALLOWAB LE U/S 1OB, IT HAS ALREADY BEEN DECIDED BY THE TRIBUNA L JAGDISH P KHANDELWAL 5 WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2 003- 04 IN ITA NO. 61 02/M106 AND C.O. NO.92/M107 VIDE ORDER DATED 16.12.2008. COPY OF THE ORDER OF THE TRIBUNAL IS PLACED AT PAGES 57 TO 66 OF THE PAPER B OOK FILED BY THE ASSESSEE. THEREFORE, WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10B. FOR THE SAKE OF CLARIFICATION, WE MAY MENTION THAT NEITHER THE ISSU E IN RESPECT OF CUT AND POLISHED DIAMOND JEWELLERY WAS DECIDED BY THE CIT(A) NOR ANY GROUND HAS BEEN TAKEN BEFORE THE TRIBUNAL BY THE DEPARTMENT. THEREFORE, T HE CONTENTIONS OF THE ID. D.R. THAT THE DEDUCTION IS N OT ALLOWABLE ON CUT AND POLISHED DIAMOND JEWELLERY ARE NOT LIABLE TO BE CONSIDERED. THEREFORE, THE SAME ARE NO T CONSIDERED. 11. REGARDING MALLEABILITY OF DEDUCTION U/S 10B, WE HAVE ALREADY STATE ABOVE THAT THE TRIBUNAL HAS ALREADY HELD THAT DEDUCTION U/S 10B ALLOWABLE TO TH E ASSESSEE. MOREOVER, THE DETAILED REASONING GIVEN BY THE ID. CIT(A) COULD NOT BE CONTROVERTED BY THE ID. D.R . THEREFORE, WE HOI THAT THERE IS NO INFIRMITY IN THE FINDING OF CIT(A) IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 108. ACCORDINGLY, THE GR OUNDS OF THE DEPARMT4NT IN ALL ITS APPEALS ARE DISMISSED.' 2.3.1 FROM THE ABOVE DECISION, IT IS CLEAR THAT THE ISSUE IS COVERED IN FAVOUR THE APPELLANT BY VIRTUE OF THE DECISION OF THE HON'BLE ITAT IN ITS OWN CASE RELEVA NT FACTS BEING IDENTICAL, FOLLOWING MY OWN APPELLATE O RDER FOR A.YRS. 2009 TO 2010-11, THIS GROUND OF APPEAL I S DECIDED IN FAVOUR OF THE APPELLANT. AO IS DIRECTED TO ALLOW THE DEDUCTION U/S 10B CLAIMED BY THE APPELLAN T AND GROUND OF APPEAL IS, THEREFORE, ALLOWED. 7. DURING THE COURSE OF HEARING, NO DISTINCTION HAS B EEN MADE EITHER ON FACTS OR ON LAW BY LD. DR. THUS, RESPECTF ULLY FOLLOWING THE ORDERS OF THE TRIBUNAL OF EARLIER YEA RS, WE DECIDE JAGDISH P KHANDELWAL 6 THIS ISSUE IN FAVOUR OF THE ASSESSEE AND UPHOLD THE ORDER OF LD. CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2 016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER $ % MUMBAI; * DATED : 11/03/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. , -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1' 1 $ 2 ( , ) / THE CIT, MUMBAI. 4. 1' 1 $ 2 / CIT(A)- , MUMBAI 5. 56 / 78 , 1' ,( 78'9 , $ % / DR, ITAT, MUMBAI 6. : ; % / GUARD FILE. / BY ORDER, 0 5, / //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI