DCIT 9(2), MUMBAI V. JYOTI PLASTICS WORK P.LTD, MUMBAI

ITA 5333/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71778 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 04-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Keywords: Depreciation
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI BEFORE SHRI VIJAY PAL RAO , JM & SHRI D.KARUNAKARA RAO, AM ITA NO. 5333 /MUM/201 2 ( ASSESSMENT YEAR :200 9 - 20 10 ) DCIT - 9(2 ), MUMBAI - 20 VS. M/S JYOTI PLASTICS WORKS PVT. LTD., BOMBAY TALKIES COMPOUND, 94 HIMANSHU RAI ROAD, MALAD (W) - 400 064 PAN/GIR NO. : A AACJ 1381 Q ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR . ASHOK SURI /ASSESSEE BY : MR. M.M.GOLVALA DATE OF HEARING : 2 7 TH NOVEMBER , 201 3 DATE OF P RONOUNCEMENT : 2 7 TH NOVEMBER,2013 O R D E R PER D.KARUNAKARA RAO ( A .M.) : TH IS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18 - 6 - 2012 , PASSED BY THE LEARNED CIT(A) - 20 , MUMBAI FOR THE ASSESSMENT YEAR 200 9 - 20 10 . 2 . THE REVENUE IN ITS APPEALS HAS RAISED THE FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) IS RIGHT IN ALLOWING DEDUCTION U/S80IB OF THE I.T. ACT. 2. WITHOUT PREJUDICE TO GROUND NO.1, THE CIT(A) ERRED IN HOLDING T HAT THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTION 80IB(2)(III) & 80IB(2)(IV) OF THE I.T. ACT. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO. 5 333 /201 2 2 3 . BRIEFLY STATED THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF ENGINEERING PLASTIC PRODUCTS. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.2,13,06,490/ - . DURING THE ASSESSMENT PROCEEDINGS, THE AO COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS. 2,83,63,440/ - AND DENIED DEDUCTION OF RS.68,37,223/ - CLAIMED BY THE ASSESSEE UNDER SECTION 80IB OF THE ACT ON THE GROUND THAT CLAUSES 80IB(2)(III) & (IV) WERE NOT SATISFIED. IN APPEAL, THE CIT(A) ALL OWED THE DEDUCTION UNDER SECTION 80IB OF THE ACT. NOW, THE REVENUE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 4 . AT THE OUTSET, BY REFERRING TO THE EXPRESSIONS, NAMELY, S ECTION 80IB(2)(III) OF THE ACT USED IN GROUND NO.2 , LEARNED COUNSEL MENTIONED THAT THE RE VENUE HAS NOT RAISED THE GROUND PROPERLY AND THE SAME CONTRADICTS WITH THE FINDINGS OF THE CIT(A) IN PARA 3.2, WHERE THE VIOLATION IS ONLY WITH REFERENCE TO THE PROVISIONS OF SECTION 80IB(2) OF THE ACT AND NOT CLAUSE (IIII) &(IV) OF THE SAID SECTION . AS PE R THE LEARNED COUNSEL, ON THE SIMILAR ISSUES IN ASSESSEES OWN CASE FOR THE A.Y.1999 - 2000 AND OTHERS , THE MATTER TRAVELLED UPTO THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY VIDE ITA NO. 5045 OF 2010 (AY1999 - 2000) , DATED 15 - 11 - 2011 ( CIT VS. JYOTI PLASTIC WORKS PRIVATE LIMITED, REPORTED IN 339 ITR 491 ) , WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IB AND CONSEQUENTLY THE REVENUES APPEAL WAS DISMISSED. ITA NO. 5 333 /201 2 3 5 . THE FACTS ARE UNDISPUTEDLY IDENTICAL AND COMPA RABLE TO THE FACTS CONSIDER ED FOR THE A.Y.1999 - 2000 (SUPRA) . IN THIS REGARD, LEARNED COUNSEL FILED THE AFORESAID JUDGMENT OF THE HON BLE HIGH COURT AND BROUGHT OUR NOTICE TO PARA 8 TO 11 OF THE SAID ORDER. FURTHER, HE BROUGHT OUR ATTENTION TO PARA 3.3 OF THE IMPUGNED ORDER WHICH CONTAINS THE EXTRACT OF THE SAID PARAGRAPHS OF THE JUDGMENT OF THE HONBLE HIGH COURT . F URTHER HE SUBMITTED THAT, I N VIEW OF THE BINDING NATURE, THE CIT(A) HAS RIGHTLY GRANTED RELIEF TO THE ASSESSEE AND , THEREFORE, THE IMPUGNED ORD E R DOES NOT CALL FOR ANY CHANGES BY THIS TRIBUNAL. 6 . PER CONTRA , LEARNED DR RELIED UPON THE ORDER OF THE AO. 7 . WE HAVE HEARD THE PARTIES AND CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO PERUSED PARA 3.3 OF THE ORDER OF THE CI T(A) AND FOR THE SAKE OF READY REFERENCE, WE WOULD LIKE TO REPRODUCE THE SAME AS UNDER : - 3.3..FURTHER, THE HIGH COURT, IN PARAGRAPH 8 - 11 ALSO DEALT WITH THE ISSUE AND HELD AS UNDER : - '8. WE SEE NO MERIT IN THE ABOVE CONTENTIONS ADVANCED ON BEHALF O F THE REVENUE. 9. AS RIGHTLY CONTENDED BY MR. TOPRANI, LEARNED COUNSEL FOR THE ASSESSEE, THE FINDING RECORDED BY THE TRIBUNAL ON VERIFICATION OF THE BOOKS MAINTAINED BY THE ASSESSEE IS THAT (A) THE ASSESSEE HAD PURCHASED RAW MATERIALS AND UTILIZED THE SA ME IN THE MANUFACTURE OF THE FINAL PRODUCTS; (B) IN THE ASSESSMENT YEAR IN QUESTION, THE ASSESSEE HAS PAID CENTRAL EXCISE DUTY AMOUNTING TO RS. 106.97 LAKHS AND CLAIMED CENVAT CREDIT OF RS.53.73 LAKHS; (C) THE ASSESSEE OWNED PLANT AND MACHINERY WORTH RS.2. 32 CRORES BEFORE DEPRECIATION AND THE VALUE OF THE SAID PLANT AND MACHINERY AFTER DEPRECIATION CAME TO RS.1.04 CRORES; .(D) THE ASSESSEE HOLDS SSI CERTIFICATE FROM THE DEPARTMENT OF INDUSTRIES, ADMINISTRATION OF DAMAN AND DIU FOR MANUFACTURING THE ITA NO. 5 333 /201 2 4 PLASTIC GOODS; (E) THE ASSESSEE HAS PAID IN THE ASSESSMENT YEAR IN QUESTION ELECTRICITY CHARGES WORTH RS. 38. 94 LAKHS AND HAD ALSO SPENT RS. 12.01 LAKHS TOWARDS REPAIRS AND MAINTENANCE OF ITS MACHINERY. 10. THE AFORESAID FACTS, WHICH ARE UNCONTROVERTED CLEARLY ESTABLISH THAT THE MANUFACTURING ACTIVITY WAS CARRIED OUT AT THE FACTORY PREMISES OF THE ASSESSEE AND, THEREFORE, NO FAULT CAN BE FOUND WITH THE DECISION OF THE TRIBUNAL IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 8018 OF THE ACT. 11. THE INFERENCE DRAWN BY THE ASSESSING OFFICER THAT BECAUSE' THE ASSESSEE HAS PAID JOB WORK CHARGES, THE ASSESSEE MUST HAVE GOT THE GOODS MANUFACTURED FROM THE JOB - WORKER CANNOT BE ACCEPTED BECAUSE, THE FINDING OF FACT RECORDED BY THE TRIBUNAL IS THAT IN THE ASSESSMENT YEAR IN QUESTION, THE ASSESSEE HAS PAID TO THE JOB - WORKER RS.9,60,575/ - WHICH IS NEGLIGIBLE AS COMPARED TO THE QUANTITY OF GOODS MANUFACTURED AND CLEARED ON PAYMENT OF CENTRAL EXCISE DUTY AMOUNTING TO RS. 106.97 LAKHS. MOREOVER, THE FINDI NG OF FACT RECORDED BY THE TRIBUNAL IS THAT THE ASSESSEE IN ADDITION TO ITS REGULAR EMPLOYEES (WHICH IS LESS THAN TEN), THE ASSESSEE HAD EMPLOYED BETWEEN 84 TO 123 CONTRACT LABOURERS PER MONTH FOR MANUFACTURING THE GOODS IN ITS FACTORY. THUS, THE DECISION OF THE TRIBUNAL IN HOLDING THAT THE ASSESSEE HAS CARRIED ON WITH THE MANUFACTURING ACTIVITY IN ITS OWN FACTORY WITH THE HELP OF EMPLOYEES EMPLOYED ON REGULAR BASIS AND ON CONTRACT LABOUR BASIS CANNOT BE FAULTED. ACCORDINGLY, THE FIRST QUESTION RAISED BY TH E REVENUE IS ANSWERED IN THE AFFIRMATIVE, THAT IS, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE'. X X X X X X X X IN THE LIGHT OF THE ABOVE FACTS, AND FOLLOWING THE ORDER OF THE TRIBUNAL AND THE JURISDICTIONAL HIGH COURT ON THE VERY SAME ISSUE, TH ESE GROUNDS OF APPEAL ARE ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION CLAIMED U/S.80IB. 8 . CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE DECISION OF THE CIT(A) IS JUST AND PROPER , WHICH DOES NOT REQUIRE ANY INTERFERENCE OR AMENDMENT. ACCORDINGLY, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED . ITA NO. 5 333 /201 2 5 9 . RESULTANTLY , APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 7 TH OF NOV. 201 3 . 2 7 TH 201 3 SD/ - SD/ - ( ) ( VIJAY PAL RAO ( ) ( D.KARUNAKARA RAO ) / JUDICIALMEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 2 7 /11/ 2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//