ADLL.CI.T. -8(2), MUMBAI V. LEXI PVT LTD., MUMBAI

ITA 5445/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84074 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Section: 80IB; 2

Judgement Text

, ( ), IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI . . , , . , ,, , ! '#$ BEFORE SHRI H L KARWA, PRESIDENT, & SHRI D KARUNAKA RA RAO, AM ' ./ITA NO.5445/MUM/2012 ( %& '& / ASSESSMENT YEAR : 2009-10) THE ADDL. CIT - 8(2), MUMBAI VS. LEXI PVT. LTD., B-33, LEXI CENTRE, 6 TH FLOOR, OFF NEW LINK ROAD, OPP. FAME ADLABS, ANDHERI (W), MUMBAI- 400 053 PAN AAACL7243D ( () /APPELLANT) ( *+() / RESPONDENT) APPELLANT BY : SHRI ASGHAR ZAIN V P RESPONDENT BY : NONE DATE OF HEARING : 05.11.2014 DATE OF PRONOUNCEME NT : 05.11.2014 # , / O R D E R PER H L KARWA, PRESIDENT : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE CIT(A)- 17, MUMBAI, DATED 20.06.2012, FOR THE ASSESSMENT YE AR 2009-10. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 80IB OF THE ACT CLAIMED BY THE ASSESSEE AMOUNTING TO RS.3,65,32,035 /- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 80I B, WITHOUT APPRECIATING THAT THE ASSESSEE HAS CONTRAVENED THE PROVISIONS OF 2 ITA NO.5445/MUM/2012 AY:2009-10 SECTION 80IB IN THE FIRST YEAR OF ITS CLAIM I.E. AY 2004-05 AND HENCE, IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE I.T ACT , WHICH MATTER IS BEING DISPUTED BY THE DEPARTMENT BEFORE HONBLE ITA T 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN RELYING UPON THE DECISION I N THE ASSESSEES OWN CASE FOR EARLIER YEARS WITHOUT APPRECIATING THE FAC T THAT THE DEPARTMENT HAS CONTESTED THE ISSUE IN A.Y. 2005-06 AND AY 2006 07 BEFORE THE HONBLE HIGH COURT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF BALL POINT PENS AND RE FILLS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DECLARED TURNOVER OF RS .56.09 CRORES. THE ASSESSEE CLAIMED DEDUCTION OF RS.3,65,32,035/-U/S. 80IB AND IN SUPPORT OF THE SAME AUDIT REPORT IN FORM NO.10CCB WAS FILED. THE AO DISALLOW ED THE CLAIM OF THE ASSESSEE RELYING ON THE ASSESSMENT ORDERS FOR A.YS 2004-05 T O 2008-09. 4. ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE A SSESSEE ON THE BASIS OF APPELLATE ORDERS PASSED BY HIM FOR A.YS. 2005-06 TO 2008-09. THE LEARNED CIT(A) ALSO OBSERVED THAT THE ABOVE ORDERS WERE CONFIRMED BY THE TRIBUNAL. NOW, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE LEARNED DR AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ISSUE RAISED IN THIS APPEAL I.E. DISALLOWANCE OF DEDUCTION U/S. 80IB OF THE ACT IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE ORDERS OF THE TRIBUNAL P ASSED IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS. WHILE DECIDING THE ISSUE , THE CIT(A) HAS OBSERVED AS UNDER: 3.3 I HAVE PERUSED THE FACTS IN THIS CASE. THE EN TIRE DISALLOWANCE HAS BEEN MADE BASED UPON THE ORDERS FOR ASSESSMENT YEARS 2004-05. THE ORDER FOR ASSESSMENT YEAR 2004-05, AS SUBMITTED ABOVE, WAS SET ASIDE BY THE TRIBUNAL FOR RE-ADJUDICATION BY THE AO . AFTER RE- ADJUDICATION THE MATTER CAME UP BEFORE THE CIT APPE AL, VIDE HIS ORDER DATED 16/02/2012, HELD AS UNDER: I HAVE CAREFULLY EXAMINED THE ISSUE AND HOLD THAT THE AO ERRED IN DENYING THE DEDUCTION CLAIMED U/S 80IB BY COMING TO AN ERRONEOUS VIEW THAT OLD MACHINERY HAS BEEN TRANSFER RED FROM THE MUMBAI UNIT TO THE DAMAN UNIT AND WHICH WAS MORE TH AN 20% OF THE TOTAL VALUE OF PLANT & MACHINERY 3 ITA NO.5445/MUM/2012 AY:2009-10 THERE IS OVERWHELMING EVIDENCE TO CLEARLY SHOW THAT THERE WAS NO TRANSFER OF PLANT & MACHINERY DURING THE FINANCI AL YEAR 2003- 04; THAT THE MUMBAI UNIT SITUATED AT SAKINAKA CONTI NUED WITH ITS MOULDING AND MANUFACTURING OPERATIONS DURING THE FI NANCIAL YEAR CONCERNED WHICH IS EVIDENT FROM THE DETAILS OF SALE S, PURCHASES, MANUFACTURING EXPENSES AND STATUTORY COMPLIANCES MA DE BY THE MUMBAI UNIT; THAT THE PURCHASE OF CAPITAL GOODS AND WORK-IN- PROGRESS OF THE DAMAN UNIT, THE PURCHASES OF RAW MA TERIALS AND SALES DURING THE YEAR AS ALSO THE EXPENSES CONCERNE D CLEARLY REVEALS THAT THE DAMAN UNIT HAD NOTHING TO DO WITH THE UNIT AT MUMBAI. THUS, IT CAN BE CONCLUDED THAT THE APPELLANT HAD RE QUISITE EVIDENCE AND WHICH HAD BEEN PLACED BEFORE THE AO AN D WHICH HAS NOT BEEN REBUTTED IN THE ASSESSMENT ORDER, CLEA RLY SHOWING THAT NO ASSET HAD BEEN TRANSFERRED FROM THE SAKINAK A UNIT AT MUMBAI TO THE NEW UNIT AT DAMAN AND THEREFORE, IT I S APPARENT THAT THE AO COMMITTED AN ERROR IN DENYING THE DEDUC TION U/S. 80IB. IN MY VIEW, THE APPELLANT IS ENTITLED TO THE DEDUCTION AS CLAIMED. THE AO SHALL RECOMPUTE THE INCOME ACCORDI NGLY. THE AFORESAID GROUNDS ARE ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE. 6. FROM THE ABOVE OBSERVATIONS OF THE CIT(A), IT IS CLEAR THAT THE CLAIM OF THE ASSESSEE WAS ALLOWED BY CIT(A) FOR A.YS. 2005-06 TO 2008-09 AND THE SAID ORDERS OF THE CIT(A) WERE CONFIRMED BY THE TRIBUNAL. THEREFO RE, WE DO NOT SEE ANY GROUND FOR INTERFERING WITH THE ORDER OF THE CIT(A) ON THI S ISSUE PARTICULARLY WHEN THE FACTS OF THE PRESENT YEAR ARE SIMILAR TO THAT OF EARLIER YEARS. CONSEQUENTLY, WE DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF NOVEMBER, 2014. SD/- SD/- (D KARUNAKARA RAO) (H L KARWA) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DT : 5 TH NOVEMBER, 2014 SA 4 ITA NO.5445/MUM/2012 AY:2009-10 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, MUMBAI A BENCH BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI