ACIT CEN CIR 2, MUMBAI V. OKASA PHARMA P.LTD, MUMBAI

ITA 5435/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83661 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C B ENCH, MUMBAI , , ! '#$ , % & BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO.5248/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR : 2009-10 THE ACIT, CEN. CIR-2, PRATISHTA BHAVAN, MARINE LINES, MUMBAI-400 020 / VS. M/S. OKASA PVT. LTD., 12, GUNBOW STREET, HORNBY VIEW BLDG., FORT, MUMBAI-400 001 ./I .T.A. NO.5435/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR : 2009-10 THE ACIT, CEN. CIR-2, PRATISHTA BHAVAN, MARINE LINES, MUMBAI-400 020 / VS. M/S. OKASA PHARMA PVT. LTD., 12, GUNBOW STREET, HORNBY VIEW BLDG., FORT, MUMBAI-400 001 ( % ./ ) ./ PAN/GIR NO. : AAACO 0677L ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / REVENUE BY: MS. PARMINDER +,(* . - / ASSESSEE BY: SHRI V. MOHAN . /0% / DATE OF HEARING :01.09.2014 12' . /0% / DATE OF PRONOUNCEMENT :2.09.2014 3 / O R D E R PER N.K. BILLAIYA, AM: ITA NOS. 5428 & 5435/M/2012 2 THESE TWO APPEALS BY THE REVENUE ARE PREFERRED AG AINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-36, MUMBAI DT. 19 .6.2012 PERTAINING TO A.Y. 2009-10 IN RESPECT OF TWO DIFFERENT ASSESSEES. SINCE THE ISSUES IN BOTH THESE APPEALS ARE COMMON, THEY WERE HEARD TOGE THER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. ITA NO. 5428/M/2012 2. THE FIRST GROUND RELATES TO ALLOWING THE CLAIM O F DEDUCTION U/S. 80IB ON THE PROFITS DERIVED FROM THE WORK/MANUFACTU RING GOT DONE THROUGH LEASE AND LICENSE MANUFACTURERS (LLMS). 3. AT THE OUTSET, BOTH SIDES AGREED THAT THE ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ITA N O. 2980/M/2010 AND C.O. NO. 8/M/2011 PERTAINING TO A.Y. 2007-08. 4. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBU NAL AT PARA-3 OF ITS ORDER. THE TRIBUNAL HAS FOLLOWED THE DECISION OF T HE CO ORDINATE BENCH IN ITA NO. 5428/M/09 FOR A.Y. 2005-06. AS NO DISTI NGUISHING FACT HAS BEEN BROUGHT ON RECORD BEFORE US, RESPECTFULLY FOL LOWING THE DECISION OF THE CO ORDINATE BENCH, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A). THIS GROUND OF THE REVENUE IS ACCORDINGLY DISMISSED . 5. GROUND NO. 2 RELATES TO THE DIRECTION GIVEN BY T HE LD. CIT(A) TO MAKE ADJUSTMENT FOR VALUATION OF OPENING STOCK WIT H CORRESPONDING ADDITION MADE TO CLOSING STOCK IN THE IMMEDIATELY P RECEDING YEAR ON ACCOUNT OF UNUTILIZED MODVAT. ITA NOS. 5428 & 5435/M/2012 3 6. ONCE AGAIN BOTH SIDES AGREED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE HIGH COURT IN THE CASE OF CIT VS MAHALAXMI GLASS WORKS (P) LTD 318 IT R 116. AS FACTS AND ISSUES ARE IDENTICAL, RESPECTFULLY FOLLOWING TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND A NY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). GROUND NO. 2 IS ACCORDINGLY DISMISSED. 7. GROUND NO. 3 RELATES TO RESTORING THE ISSUE OF D ISALLOWANCE U/S. 14A R.W. RULE 8D. 7.1. IT IS THE CLAIM OF THE REVENUE THAT DISALLOWAN CE WITH RULE 8D IS MANDATORY W.E. F A.Y. 2008-09. THE LD. CIT(A) HAS DISCUSSED THIS ISSUE AT PARA-9 OF HIS ORDER AND AT PARA-9.1, THE LD. CIT (A) OBSERVED THAT THE AO HAS OMITTED TO ALLOCATE THE DISALLOWANCES MADE I N THE ASSESSMENT TO THE PROFITS OF THE INDUSTRIAL UNDERTAKING ELIGIBLE FOR RELIEF U/S. 80IB. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE AO TO VERI FY THE FACT AND ALLOW HIGHER 80IB AND FURTHER DIRECTED TO SEE THAT THE CL AIM SHOULD NOT GO BELOW THE INCOME RETURNED BY THE ASSESSEE. CONSIDERING T HIS FINDING OF THE LD. CIT(A), WE FIND THAT THE ISSUE IS NOT WHETHER THE D ISALLOWANCE U/S. 14A HAS TO BE MADE WITH RULE 8D, THE ISSUE IS WHETHER T HE AMOUNT DISALLOWED HAS TO BE ALLOCATED WITH ELIGIBLE AND NON ELIGIBLE UNIT. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GRIEVANCE OF THE REVENUE . GROUND NO. 3 IS ACCORDINGLY DISMISSED. 7.2. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 5435/M/2012 ITA NOS. 5428 & 5435/M/2012 4 8. THE FIRST GROUND RELATES TO THE ADJUSTMENT FOR V ALUATION OF OPENING STOCK ON ACCOUNT OF UNUTILIZED MODVAT. 9. THIS GRIEVANCE IS SIMILAR TO GROUND NO. 2 OF ITA NO. 5428/M/12. FOR SIMILAR REASONS, THIS GROUND OF THE REVENUE IS DISMISSED. 10. GROUND NO. 2 RELATES TO THE GRIEVANCE THAT THE LD. CIT(A) ERRED IN RESTORING THE ISSUE OF DISALLOWANCE U/S. 14A READ W ITH RULE 8D. 11. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE AT PAR A-6 OF HIS ORDER AND AT PARA-6.1 HE HAS FOLLOWED HIS OWN FINDINGS GIVEN IN THE CASE OF M/S. OKASA PVT. LTD. WHICH IS IN ITA NO. 5428/M/12. FOR SIMILAR REASONS, THIS GROUND OF THE REVENUE IS DISMISSED. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND SEPTEMBER, 2014 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) / JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 4 DATED : 2 ND SEPTEMBER, 2014 . . ./ RJ , SR. PS ITA NOS. 5428 & 5435/M/2012 5 3 3 3 3 . .. . +/ +/ +/ +/ 5 '/ 5 '/ 5 '/ 5 '/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 +/ , , / DR, ITAT, MUMBAI 6. 89 : / GUARD FILE. 3 3 3 3 / BY ORDER, ,/ +/ //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI