ITO 16(1)(2), MUMBAI V. MAYURI C SHAH, MUMBAI

ITA 5173/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55892 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-11-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 10-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M A MAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D. MANMOHAN, (VICE PRESIDENT [MZ]) AND SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER) ITA NO.5173/MUM/2009 ASSESSMENT YEAR : 1998-99 THE INCOME TAX OFFICER WARD 16(1)(2) MATRU MANDIR MUMBAI-400 007. ..( APPELLANT ) VS. SMT. MAYURI C. SHAH 232. PANCHRATNA OPERA HOUSE MUMBAI. ..( RESPONDENT ) P.A. NO. (AROPS 0152 Q) APPELLANT BY : SHRI M.A. MAO RESPONDENT BY : SHRI PR AKASH JOTWANI DATE OF HEARING : 16.11.11 DATE OF PRONOUNCEMENT : 30 TH NOVEMBER, 2011 O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDE R DATED 29.6.2009 OF CIT(A) FOR ASSESSMENT YEAR 1998-99. THE O NLY DISPUTE RAISED IN THIS APPEAL IS REGARDING ALLOWABILITY OF DED UCTION UNDER SECTION 80IA IN RESPECT OF DAMAN UNIT. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FOR THE RELEV ANT YEAR HAD CLAIMED DEDUCTION OF RS.51,01,110/- IN RESPECT OF DAMAN UNIT BEING ITA NO.5173/M/09 A.Y:98-99 2 THE INCOME FROM MANUFACTURING OF SALE OF DIAMOND STUDD ED SILVER JEWELLERY. THE AO ON EXAMINATION OF RECORDS POINTED OUT DEFECTS IN THE CLAIM OF THE ASSESSEE SUCH AS FORM 10CCB BEING NOT COMPL ETE; DETAILS FOR ELECTRICITY AND FUEL EXPENSE BEING NOT PROD UCED; SALES TAX REGISTRATION CERTIFICATE BEING NOT PRODUCED; DETAILS OF REGISTRATION AS SSI NOT AVAILABLE; PROOF OF DELIVERY OF GOODS/RAW M ATERIAL PURCHASED FOR DAMAN UNIT; THE CA IN THE FORM 3CD DID NOT GIVE THE NATURE OF BUSINESS AND IN THE COLUMN NO.12 OF FORM 3CD, THERE WAS NO DETAILS OF JEWELLERY EITHER IN OPEN STOCK OR CLOSING STOCK. THE AO A LSO NOTED THAT THE ASSESSEE DID NOT GIVE THE DETAILS OF MANUFACTURING ACC OUNT AND ALL SALES WERE MADE TO THE SISTER CONCERN M/S. SHUKRA JEWELLER Y. THE AO THEREFORE, REJECTED THE CLAIM OF THE ASSESSEE AS A MANUFACT URER OF DIAMOND STUDDED SILVER JEWELLERY IN RESPECT OF DAMAN U NIT AND ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTI ON 80IA. 2.1 THE ASSESSEE DISPUTED THE DECISION OF AO AND SUBMITTED BEFORE CIT(A) THAT THE ASSESSEE HAD MANUFACTURED JEWELLERY WH ICH WERE SOLD TO M/S. SHUKRA JEWELLERY LTD. THE ASSESSEE FILED COPY O F SALE INVOICES WHICH WERE INVARIABLY ACCOMPANIED BY PACKING SLIPS, WHI CH SHOWED THAT THE ASSESSEE WAS MANUFACTURING RINGS, PENDANTS AND EAR RINGS. ALL THE INVOICES SHOWED THE TOTAL QUANTITY OF JEWELLERY IN CARATS AND GRAMS OF DIAMONDS AND SILVER AS WELL AS DESCRIPTION OF JEWELL ERY. THE ASSESSEE ALSO PRODUCED THE COPY OF THE ASSESSMENT ORDER FOR ITA NO.5173/M/09 A.Y:98-99 3 ASSESSMENT YEAR 1998-99 IN CASE OF M/S. SHUKRA JEWELLERY P ASSED UNDER SECTION 143(3). CIT(A) NOTED THAT M/S. SHUKRA JEWELLERY HAD IN TURN SOLD DIAMOND STUDDED JEWELLERY TO VARIOUS OTHER E NTITIES. THE CASE OF M/S. SHUKRA JEWELLERY HAD BEEN SCRUTINIZED BY TH E ADDL CIT SPECIAL RANGE-16,MUMBAI FOR THE ASSESSMENT YEAR 1998-99 IN WHICH IT WAS MENTIONED THAT IT HAD PURCHASED DIAMOND STUDDED SI LVER JEWELLERY FROM THE ASSESSEE. CIT(A) ALSO OBSERVED THAT THE AO HAD NOT MADE ANY CASE THAT THE ASSESSEE HAD PURCHASED THE DIAMOND STUDDED SILVER JEWELLERY FROM THIRD PARTIES. THE ASSESSEE HAD EXPLAIN ED THAT ALL ROUGH DIAMONDS WERE IN OPENING STOCK AND SHE HAD PURCHASED 25 00GMS 100T SILVER FOR RS.16,250/- ; 2500 GMS OF COPPER ALLOY FOR RS.750/- WHICH WAS INCLUDED UNDER HEAD SUNDRY EXPENSES. THE SIL VER AND COPPER ALLOYS WERE CONSUMED IN THE MANUFACTURING AND, TH EREFORE, DID NOT APPEAR IN THE CLOSING STOCK. THE ASSESSEE WAS MANUFACTU RING JEWELLERY ON SPECIFIC ORDERS FROM SISTER CONCERN WHO HAD SO LD THE SAME TO OTHER PARTIES. THE ASSESSEE HAD ALSO PRODUCED REPORT BEFORE CIT(A) IN WHICH CA HAD CERTIFIED THE BUSINESS OF THE ASSESSEE AND THE LICENSE TO WORK AS FACTORY ISSUED BY CHIEF INSPECTOR OF FACTORIES ADMINISTRATION AS WELL AS CERTIFICATE OF REGISTRATION I SSUED BY SALES TAX OFFICER TO RUN A BUSINESS IN THE NAME OF MARK DIAMOND EXPORTS. CIT(A) OBSERVED THOUGH THE ASSESSEE HAD NOT PRODUCED THE SE CERTIFICATES BEFORE AO BUT CONSIDERING THE FACT THE ASSESSEE HAD SOLD ITA NO.5173/M/09 A.Y:98-99 4 50T DIAMOND STUDDED SILVER JEWELLERY TO M/S. SHUKRA JE WELLERY P. LTD. AND THE LATTER HAD SOLD THE SAME TO OTHER PARTIES AND CONSIDERING THE OTHER MATERIAL ON RECORD CIT(A) HELD THAT THE ASSESSEE W AS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA. AGGRIEVED BY THE SAID D ECISION THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US, THE LD. AR FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT IDENTICAL ISSUE HAD BEEN CONSIDERED BY THE TRIBUNAL IN THE CASE OF MR. JAYENDRA H. SHAH IN ITA NO.5172/MUM/2009 FOR ASSESSM ENT YEAR 1998-99 IN THE ORDER DATED 14.9.11 IN WHICH CASE ALSO I DENTICAL ISSUE OF MANUFACTURING OF DIAMOND STUDDED SILVER JEWELLERY WAS INVOLVED AND AO HAD DISALLOWED CLAIM CITING THE SAME REASONS AS IN THE CASE OF THE ASSESSEE. IN THAT CASE ALSO JEWELLERY HAD BEEN SOLD TO M/S. SHUKRA JEWELLERY P. LTD. CIT(A) IN THAT CASE ALSO HAD ALLOWED THE CLAIM BY WAY OF AN IDENTICAL ORDER AS IN CASE OF THE ASSESSEE GIVING THE SAME REASONS AS IN THE PRESENT CASE. THE TRIBUNAL AFTER CONSIDE RING THE VARIOUS ASPECTS OF THE CASE CONFIRMED THE ORDER OF CIT(A) ALLOWING DEDUCTION UNDER SECTION 80IA. IT WAS ALSO POINTED OUT THAT THE SAID ORDER WAS LATER FOLLOWED BY ANOTHER BENCH OF THE TRIB UNAL AS IN THE CASE OF ITO VS. CHANDRAKANT SHAH IN ITA NO.5171/M/2009 ORDER DATED 5.10.2011 FOR THE ASSESSMENT YEAR 1998-99. IT WAS ACCORD INGLY URGED THAT FOLLOWING THE DECISIONS OF THE TRIBUNAL, THE CLAI M OF THE ASSESSEE ITA NO.5173/M/09 A.Y:98-99 5 SHOULD BE ALLOWED. THE LD. DEPARTMENTAL REPRESENTATI VE ON THE OTHER HAND PLACED RELIANCE ON THE ORDER OF THE AO. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ALLOWA BILITY OF DEDUCTION UNDER SECTION 80IA. THE AO HAD DISALLOWED TH E CLAIM CITING VARIOUS REASONS AS MENTIONED IN PARA 2 OF THIS ORDER. T HE CIT(A) HOWEVER NOTED THAT THE ASSESSEE HAD SOLD 50T DIAMOND STUD DED JEWELLERY TO M/S. SHUKRA JEWELLERY P. LTD. WHO IN TU RN HAD SOLD JEWELLERY TO VARIOUS OTHER PARTIES. THE CIT(A) ALSO NOTED THAT ADDL. CIT(A) SPECIAL RANGE-16 HAD SCRUTINIZED THE CASE OF M/S. SHUKRA JEWELLERY P. LTD. IN 1998-99 IN WHICH IT HAD BEEN ST ATED THAT M/S. SHUKRA JEWELLERY P. LTD. HAD PURCHASED DIAMOND STUDDE D SILVER JEWELLERY FROM THE ASSESSEE. THOUGH THERE WAS NO OPENIN G STOCK OF SILVER ETC. EXCEPT DIAMOND, THE ASSESSEE HAD PRODUCED EVID ENCE REGARDING PURCHASE OF SILVER AND COPPER ALLOY. THE ASSESSE E HAD ALSO PRODUCED THE FACTORY LICENSE ISSUED BY CHIEF INSPECTOR AND CERTIFICATE ISSUED BY SALES TAX OFFICER TO RUN THE BUSINESS IN THE NAM E OF MARK DIAMOND EXPORTS. CONSIDERING ALL THESE FACTS, CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. IDENTICAL CASE HAD ALSO COME UP BEFO RE THE TRIBUNAL IN THE CASE OF JAYENDRA H. SHAH (SUPRA), IN WHICH ALSO THE AO HAD DISALLOWED CLAIM CITING THE SAME REASONS AS IN TH E CASE OF THE ASSESSEE AND CIT(A) HAD ALLOWED THE CLAIM OF THE ASSESSEE BY PASSING ITA NO.5173/M/09 A.Y:98-99 6 AN IDENTICAL ORDER AS IN THE CASE OF THE ASSESSEE. THE LD. DR DID NOT POINT OUT ANY DISTINGUISHING FEATURES. THEREFORE, RESPE CTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF JAYENDRA H. SHAH (SUPRA), WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE AND SAME IS, THEREFORE, UPHELD. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2011. SD/- SD/- (D. MANMOHAN) (RAJENDRA SINGH ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 30/11/2011. 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.