ASST CIT 30(1), MUMBAI V. ESTER LUB TECHNOLOGIES, MUMBAI

ITA 5377/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0185 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: BHARAT P SHAH
• Keywords: Additional evidence
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 5377/MUM/2016 (ASSESSMENT YEAR: 2012-13) A C I T - 30(1) C-13, 5TH FLOOR, R. NO. 503 PRATYAKSHA KAR BHAVAN BKC COMPLEX, BANDRA (E) MUMBAI 400051 VS. M/S. ESTER LUB TECHNOLOGIES 205/206, KALPTARU PLAZA CHINCHOLI BUNDER ROAD MALAD (W), MUMBAI 400064 PAN AAKFM0861D APPELLANT RESPONDENT APPELLANT BY: SHRI V. VIDHYADHAR RESPONDENT BY: SHRI BHARAT P. SHAH DATE OF HEARING: 19.02.2018 DATE OF PRONOUNCEMENT: 21.02.2018 O R D E R PER C.N. PRASAD, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-41, MUMBAI DATED 16.06.2016 FOR A.Y. 2012-13 . 2. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN NOT ALLOWING DEDUCTION UNDER SECTION 80IB( 5) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOLLOWING THE DEC ISION OF HIS PREDECESSOR IN ASSESSEES CASE FOR ASSESSMENT YEARS 2010-11 AND 20 11-12. 3. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IN THE APPEAL IS SQUARELY COVERED BY THE DECI SION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2 010-11 AND 2011-12 IN ITA NOS. 5034 & 6975/MUM/2014 DATED 08.08.2017, COPY OF WHICH IS PLACED AT PAGE 29 OF THE PAPER BOOK. THE LEARNED CO UNSEL, REFERRING TO THE PAPER BOOK FILED, SUBMITS THAT THIS ISSUE IS COMING UP FROM A.Y. 2007-08 AND THE TRIBUNAL CONSISTENTLY HOLDING THAT THE ASSE SSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IB IN RESPECT OF THE INCO ME EARNED BY THE ITA NO. 5377/MUM/2016 M/S. ESTER LUB TECHNOLOGIES 2 ASSESSEE FOR THE JOB WORK CARRIED ON BY IT TO ITS S ISTER CONCERN. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT DURIN G ASSESSMENT YEARS 2010-11 AND 2011-12 DEDUCTION UNDER SECTION 80IB WA S DENIED ON THE GROUND THAT THERE AS RECONSTRUCTION OF EXISTING BUS INESS FOR THE REASON THAT THE ASSESSEE FIRM WAS CREATED IN 2004-05 TO MA NUFACTURE EMULSIFIERS ON BEHALF OF ITS SISTER CONCERN M/S. WITMANS INDUST RIES. THE AO IGNORED THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEES UNIT IS A NEW UNIT FORMED WITH NEW PLANT AND MACHINERY AT A NEW PLACE WITH NEW WORKERS AND POWER CONNECTION. NO MACHINERY WAS TAKEN FROM W ITMANS INDUSTRIES AND THERE WAS NO RECONSTRUCTION OF BUSINESS ON CREA TION OF THE FIRM BY THE ASSESSEE. THE LEARNED COUNSEL SUBMITS THAT ON SIMIL AR LINES THE AO DISALLOWED THE BENEFIT OF DEDUCTION UNDER SECTION 8 0IB DURING THE CURRENT ASSESSMENT YEAR, I.E. A.Y. 2012-13. THE LEARNED COU NSEL SUBMITS THAT FOR ASSESSMENT YEARS 2010-11 AND 2011-12 THE COORDINATE BENCH CONSIDERED THE SAID ISSUE AND HELD THAT THE ASSESSEE IS ENTITL ED FOR DEDUCTION UNDER SECTION 80IB. 4. THE LEARNED D.R., ON THE OTHER HAND, VEHEMENTLY SUP PORTED THE ORDER OF THE ASSESSING OFFICER. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDE RS OF THE AUTHORITIES BELOW. THE AO, WHILE COMPLETING THE ASS ESSMENT, DENIED DEDUCTION UNDER SECTION 80IB(5) OF THE ACT TO THE A SSESSEE BASED ON THE ASSESSMENT MADE FOR A.Y. 2011-12 WHEREIN SIMILAR DI SALLOWANCE WAS MADE BY THE AO. ON APPEAL THE LEARNED CIT(A), FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEARS 2010-11 AND 2011-1 2 ALLOWED THE CLAIM OF THE ASSESSEE. ON A PERUSAL OF THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEARS 2010-11 AND 2011-2 WE FIND THAT THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: - 4. NOW COMING TO THE APPEALS FILED BY THE REVENUE THE LEARNED D.R. FAIRLY CONCEDED THAT THE ISSUE INVOLVED IN BOTH THE APPEALS FOR ASSESSMENT YEARS 2010-11 AND 2011-12 ARE COMMON AND WHATEVER VIEW THE TRIBUNAL MAY TAKE IN A.Y. 2010-11 THE SAME VIEW MAY BE TAKEN IN A.Y. 2011-12. THE GROUNDS OF APPEAL IN BOT H THE YEARS READ AS UNDER: - ITA NO. 5377/MUM/2016 M/S. ESTER LUB TECHNOLOGIES 3 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB(5) MERELY ON THE BASIS OF THE ERRONEOUS DECISION GIVEN BY THE ASSESS ING OFFICER IN THE SET ASIDE PROCEEDING OF A.Y. 2007-08 WITHOUT GO ING INTO MERITS OF THE CASE AND RECORDS OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE RELEVANT IS SUE RAISED SPECIFICALLY IN THE ASSESSMENT PROCEEDINGS OF A.Y. 2010-11 AVAILABLE ON THE RECORD REGARDING SPLITTING THE EXI STING UNIT OF SISTER CONCERN AND SETTING UP THE ASSESSEES UNDERT AKING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE I N THE FORM OF ASSESSMENT ORDER FOR A.Y. 2007-08 IN SET ASIDE PROC EEDING PASSED AFTER THE FILING OF APPEAL, WITHOUT CONFRONTING THE DEPARTMENT. 5. WE HAVE HEARD THE LEARNED D.R. AND CAREFULLY PER USED THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE CON DITIONS AS STIPULATED UNDER SECTION 80IB FOR THE ELIGIBILITY O F THE CLAIM, WHETHER THE ASSESSEE IS ENGAGED IN MANUFACTURING OR NOT HAD TO BE SATISFIED IN THE FIRST YEAR AND EVEN THE CONDITION WHETHER THE U NIT WAS FORMED BY SPLITTING OF ANY OTHER UNIT OR NOT HAS ALSO TO BE D ECIDED ON THE BASIS OF THE FACTS IN THE INITIAL ASSESSMENT YEAR. THE CIT(A ) IN THIS CASE HAS ALLOWED THE CLAIM OF THE ASSESSEE AND HELD THAT THE ASSESSEES UNDERTAKING HAS NOT ESTABLISHED BY SPLITTING THE EX ISTING UNIT OF THE SISTER CONCERN. SINCE THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED IN A.Y. 2007-08 BY THIS TRIBUNAL VIDE ORDER DATED 13.0 6.2012, THEREFORE IN OUR VIEW THE CIT(A) WAS CORRECT IN LAW IN ALLOWI NG THE CLAIM OF THE ASSESSEE. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A). SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTA NCES DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, RESPECTFULLY F OLLOWING THE SAID DECISION WE UPHOLD THE ORDER OF THE LEARNED CIT(A) IN ALLOWING THE CLAIM FOR DEDUCTION UNDER SECTION 80IB(5) OF THE ACT TO THE A SSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2018. SD/ - SD/ - (A.L. SAINI) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 21 ST FEBRUARY, 2018 ITA NO. 5377/MUM/2016 M/S. ESTER LUB TECHNOLOGIES 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -41, MUMBAI 4. THE PR. CIT - 24/30, MUMBAI 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.