ACME SOAP WORKS, MUMBAI V. DCIT IT 18 (1) NEW 21(1), MUMBAI

ITA 511/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2529 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: RAJIV KALLIANPUR
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.511 & 512/M/2015 ASSESSMENT YEARS: 2004-05 & 2005-06 M/S. ACME SOAP WORKS, NEXT TO RAM MANDIR, RAM MANDIR ROAD, MUMBAI 400 104 PAN: AAAFA1575G VS. THE DEPUTY COMMISSIONER OF I.T., 18(1) NEW 21(1), BANDRA KURLA COMPLEX, BANDRA, MUMBAI - 400051 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RAJIV KALLIANPUR, A.R. REVENUE BY : SHRI C.W. ANGOLKAR, D.R. DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 20.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY TH E ASSESSEE AGAINST THE ORDERS BOTH DATED 19.11.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2004-05 & 2005-06. 2. THE SOLE ISSUE RAISED BY THE ASSESSEE IN BOTH TH E APPEALS IS AGAINST THE ADJUSTMENT OF THE PROFIT EARNED BY THE 80IB ELIGIBL E UNIT OF THE ASSESSEE AGAINST LOSS SUSTAINED BY NON ELIGIBLE UNIT OF THE ASSESSEE . SHRI RAJIV KALLIANPUR, DIRECTOR OF THE COMPANY HAS APPEARED AND RELIED UPO N THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DE WAN KRAFT SYSTEM P. LTD. (2008) 297 ITR 305 (DELHI) WHEREIN THE HONBLE DELH I HIGH COURT, WHILE INTERPRETING THE PROVISIONS OF SECTION 80IA, HAS HE LD THAT FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION UNDER SECTION 80IA(5) OF THE ACT, THE ITA NOS.511 & 512/M/2015 M/S. ACME SOAP WORKS 2 INCOME OF THE UNIT IS TO BE COMPUTED IF SUCH ELIGIB LE BUSINESS OF THE SAID UNIT IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. THE PRO FITS OF THE ELIGIBLE UNIT CANNOT BE MIXED WITH THE PROFITS OF INELIGIBLE UNIT . THE ELIGIBLE UNIT IS TO BE TREATED AS AN INDEPENDENT UNIT AND THE SAME IS TO B E TREATED AS THE ONLY SOURCE OF INCOME OF THE ASSESSEE FOR THE PURPOSE OF COMPUT ING THE DEDUCTION UNDER SECTION 80IA OF THE ACT. 3. THE LD. D.R., ON THE OTHER HAND, HAS RELIED UPON CERTAIN PROVISIONS OF SECTION 80A(2) TO CONTEND THAT THE AGGREGATE AMOUNT OF DEDUCTION UNDER CHAPTER VIA CANNOT EXCEED THE GROSS TOTAL INCOME OF THE ASSESSEE. HOWEVER, THE LD. D.R. HAS FAIRLY ADMITTED THAT THE IMPUGNED ORDER OF THE LD. CIT(A) IS A VERY CRYPTIC ORDER. THE LD. CIT(A) HAS NOT PROPERL Y EXAMINED THE ISSUE. HE SIMPLY DISMISSED THE APPEAL OF THE ASSESSEE OBSERVI NG THAT THE ASSESSEE IS HAVING SAME PAN NUMBER FOR IT PURPOSES IN RESPECT O F BOTH THE UNITS. 4. WE FIND THAT THIS TYPE OF FINDING IS TOTALLY WRO NG AND BASELESS. AN ASSESSEE, MAY BE HAVING MANY UNITS, BUT THE ASSESSE E HAS TO FILE THE RETURN UNDER ONE PAN NUMBER IN RELATION TO THE TOTAL INCOM E OF THE ASSESSEE EARNED FROM VARIOUS UNITS. HENCE, THERE CANNOT BE SEPARAT E PAN NUMBERS IN RELATION TO EACH UNIT. THE LD. D.R., AT THIS STAGE, HAS FAI RLY ADMITTED THAT THE ABOVE FINDING OF THE LD. CIT(A) IS NOT CORRECT. HE, HOWE VER, HAS SUBMITTED THAT THE ISSUE NEEDS EXAMINATION AT THE HANDS OF LD. CIT(A) REGARDING THE CLAIM OF DEDUCTION FROM THE ELIGIBLE UNIT OF THE ASSESSEE. SHRI RAJIV KALLIANPUR, DIRECTOR OF THE COMPANY HAS ALSO NOT OBJECTED TO TH E ABOVE SUBMISSION OF THE LD. D.R. 5. IN VIEW OF THIS, THE IMPUGNED ORDER OF THE LD. C IT(A) IS HEREBY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE LD. C IT(A) TO DECIDE IT AFRESH IN ACCORDANCE WITH LAW. ITA NOS.511 & 512/M/2015 M/S. ACME SOAP WORKS 3 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 20.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.