THE ACIT, 4(1), Bhopal V. M/s. R.M. CHEMICALS PRIVATE LIMITED, Bhopal

ITA 512/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5601 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: S S DESH
• Keywords: Business income
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ACIT, 4(1), BHOPAL .. ./ PAN: AAACR7154D VS. M/S. R.M.CHEMICALS PRIVATE LIMITED, BHOPAL / APPELLANT / RESPONDENT / APPELLANT BY SHRI LALCHAND, CIT DR / RESPONDENT BY SHRI S.S.DESHPANDE, C. A. DATE OF HEARING 17.11.2016 DATE OF PRONOUNCEMENT 22.11.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, BHOPAL [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 09.02 .2016 AND .. . / I.T.A. NO. 512/IND/2016 %' ' / ASSESSMENT YEAR: 2009-10 I.T.A.NO. 512/IND/2016 A.Y.2009-10 M/S. R.M. CHEMICALS PRIVATE LIMITED, BHOPAL PAGE 2 OF 5 PERTAINS TO ASSESSMENT YEAR 2009-10 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER PASSED U/S 143(3) OF T HE ACT DATED 19.12.2011 OF ACIT, 3(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. 2. THE ONLY GROUND OF APPEAL TAKEN BY THE REVENUE READ S AS UNDER :- THE LD. CIT(A)-II HAS ERRED IN DELETING THE ADDITI ON OF RS. 4,24,84,795/- MADE BY THE AO ON ACCOUNT OF DEDUCTION U/S 80IC OF THE INCOME-TAX ACT, 1961. 3. AT THE OUTSET, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE STATED THAT THIS APPEAL IS COVERED IN THE ASSESSEES OWN CASE BY THE DECISION OF I.T.A.T., INDORE BENCH, INDORE ORDER DATED 21.11.2011 PASSED IN I.T.A.NO. 597/IND/ 2010 FOR THE ASSESSMENT YEAR 2007-08. 4. THE LD. CIT DR AGREED TO IT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE P ERUSED THE ORDER OF THE TRIBUNAL PASSED IN ASSESSEES OWN CASE, WHEREIN THE I.T.A.T. INDORE BENCH, INDORE, HAS HELD AS UND ER :- I.T.A.NO. 512/IND/2016 A.Y.2009-10 M/S. R.M. CHEMICALS PRIVATE LIMITED, BHOPAL PAGE 3 OF 5 IN THE CASE OF THE ASSESSEE COMPANY MERELY JOB WORK ON BEHALF OF HLL WAS DONE. IN THAT WAY ASSESSEE COMPANY IS NOT INVOLVED IN THE RISK OF AN ENTERPRISE. NEITHER ASSESSEE COMPANY HAS TO BOTHER ABOUT PURCHASE, PACKAGING AND MARKETING OF FINISHED PRODUCTS. IN THAT WAY ASSESSEE IS NOT INDULGING IN A BUSINESS ACTIVITY IN A MANNER THAT CAN SATISFY LEGISLATIVE INTENT OF CHAPTER VIA. BECAUSE THESE SECTIONS CLEARLY GIVE BENEFIT FOR BUSINESS UNDERTAKING ESTABLISHED WITH ENTREPRENEURIAL SKILLS TO DO THE BUSINESS BEARING ALL THE RISKS INVOLVED. THEREFORE, CLAIM OF ASSESSEE OF DEDUCTION CANNOT BE ALLOWED AND TREATED AS HIS BUSINESS INCOME IN NORMAL COURSE. IF THE AFORESAID REASONING OF THE LD. AO IS KEPT IN JUXTAPOSITION WITH THE PROVISIONS OF THE ACT, SUB- SECTION (1) OF SECTION 80IC SPEAKS ABOUT GROSS TOTA L INCOME WHICH INCLUDES ANY PROFIT AND GAINS DERIVE D BY AN UNDERTAKING OR AN ENTERPRISES FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (2) BE ALLOWE D IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE FROM SUC H I.T.A.NO. 512/IND/2016 A.Y.2009-10 M/S. R.M. CHEMICALS PRIVATE LIMITED, BHOPAL PAGE 4 OF 5 PROFIT AND GAINS AS SPECIFIED. SUB-SECTION (4) SPEA KS ABOUT FULFILLMENT OF CERTAIN CONDITIONS. HOWEVER, THE DEDUCTION HAS BEEN DISALLOWED BY THE LD. AO MERELY ON THE PLEA THAT THE ASSESSEE COMPANY WAS DOING JOB WORK ON BEHALF OF HLL AND ALL RISK RELATING TO THE BUSINESS IS BORNE BY THE HLL AND NOT BY THE ASSESSEE COMPANY. NO SUCH DIFFERENTIATION HAS BEEN MADE IN THE PROVISIONS OF THE ACT WHETHER THE MANUFACTURING HAS BEEN DONE ON JOB WORK OR FOR ITS OWN BUSINESS. SECTION CLEARLY SPEAKS ABOUT ANY PROFIT FROM ANY BUSINESS. THERE IS NO DISPUTE BY THE REVENUE THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN THE SECTION. THE ASSESSEE STARTED MANUFACTURING DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2006-07 AND THE SAME WAS ALLOWED. SINCE THE FACTS ARE IDENTICAL TO ASSESSMENT YEAR 2006-07 AND THE ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND THE REVENUE HAS NOT DIFFERENTIATED THE FACTS. THEREFORE , I.T.A.NO. 512/IND/2016 A.Y.2009-10 M/S. R.M. CHEMICALS PRIVATE LIMITED, BHOPAL PAGE 5 OF 5 WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) . THE SAME IS UPHELD. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NO MER IT, THEREFORE DISMISSED. 6. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF I. T.A.T. IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007- 08, WE DISMISS THE REVENUES APPEAL AS THE FACTS FOR THIS ASSESSMENT YEAR I.E. 2009-10 ARE IDENTICAL. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 22 ND NOVEMBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 22 ND NOVEMBER, 2016. 20.22 CPU*