NIRMAL INDUSTRIAL CONTROAL P.LTD, MUMBAI V. ACIT 10(3), MUMBAI

ITA 5641/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9603 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 08-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Opportunity of being heard
• Section: 143(3); 80IB; 147

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNA L B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN , AM AND SHRI AMARJIT SINGH , JM / I .T.A. NO. 5641 / M/ 20 1 4 ( / ASSESSMENT YEAR: 20 0 5 - 0 6 ) NIRMAL INDUSTRIAL CONTROAL. P. LTD. 1 ST FLOOR, SAMRIDHI, LBS MARG, NEAR TALWALKAR GYM, OFF LBS MARG, MULUND (W) MUMBAI. PIN:400080 / VS. ACIT 10(3) AAYAKAR BHAVAN, M.K. RD MUMBAI. PIN:400020 ./ ./ PAN/GIR NO. : AABCN 1777 B ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 15 .0 6 .2017 / DATE OF PRONOUNCEMENT : . 13. 0 9 .2017 / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 15 .0 7 .201 4 PASSED BY THE COMMIS SIONER OF INCOME TAX (APPEALS ) - 22 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 200 5 - 06 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NOT ALLOWING U/S 80IA CLAIMED BY THE APPELLANT. THE SAID DEDUCTION MAY PLEASE BY GRANTED TO THE ASSESSEE. ASSESSEE BY: SHRI BHAVIN PARIKH DEPARTMENT BY: SHRI SUMAN KUMAR (DR) NIRMAL INDUSTRIAL CONTROL 2 WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) - 22 MUMBAI, HEREINAFTER REFERRED TO AS THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF SERVICE TAX SET OFF, E XCISE DUTY SET OFF , SALES TAX SET OFF, INCOME FROM SERVICE CHARGES AND LABOUR CHARGES FOR THE PURPOSE OF DEDUCTION U/S 80IB. THE SAID CLAIM IS PROPER, AUTHENTIC GENUINE AND IN ACCORDANCE WITH THE PROVISIONS OF THE LAW. WE REQUEST YOUR HONOR TO KINDLY GRAN TS US DEDUCTION U/S 80IB FOR THE SAID CREDITS. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DROP THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 26.10.2005 DECL ARING TOTAL INCOME TO THE TUNE OF RS.1,15,23,889/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961 ON 25.02.2006 ACCEPTING THE INCOME RETURNED. THE ASSESSEE CLAIMED DEDUCTION U/S 80IA OF THE ACT OF RS.45,75,383/ - . THE ASSESSMENT U/S 143(3) WAS COMPLETED ON 30.08.2007 ACCEPTING THE RETURNED INCOME. SUBSEQUENTLY, IT WAS FOUND THAT THE DEDUCTION U/S 80IA WAS WRONGLY ALLOWED AND THE ASSESSEE FAILED T O FURNISH THE AUDIT REPORT IN FO RM NO. 10CCB UNDER RULE 18BBB ALONGWITH THE RETURN OF INCOME FILED ON 26.10.2005 WHICH WAS MANDATORY AS PER SECTION 80IA(7) OF THE ACT. FURTHER, NO P& L ACCOUNT AND BALANCE - SHEET OF THE UNDERTAKING CLAIMED TO BE ELIGIBLE FOR DEDUCTION U/S 80IA WAS FILED WITH THE RETURN OF INCOME OR SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDING . THEREFORE, THE CONDITIONS ELIGIBLE FOR THE CLAIM OF THE DEDUCTION U/S 80IA OF THE ACT WAS VIOLATED. WITHOUT PREJUDICE TO THE ABOVE , THE ASSE SSEE HAS ADOPTED PRO - RATA PROFIT FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 80IA OF THE ACT WHICH WAS NOT AS NIRMAL INDUSTRIAL CONTROL 3 PER THE PROVISION OF THE ACT. MOREOVER W HILE COMPUTING THE PRO - RATA PROFIT, THE TURNOVER OF THE ASANGAOAN UNIT WAS ADOPTED AT RS.19,62,87,878/ - WHER EAS THE P & L ACCOUNT SPEAKS ABOUT THE MANUFACTURING SALE TO THE TUNE OF RS.18,12,75,606/ - ONLY. THUS, THE CLAIM OF THE ASSESSEE WAS ASSESSING DEDUCTION U/S 80IA. W ITHOUT PREJUDICE TO THE ABOVE , ON PERUSAL OF THE P & L ACCOUNT IT WAS FOUND THAT THE PROFIT OF THE BUSINESS INCLUDE S SERVICE AND LABOUR CHARGES TO THE TUNE OF RS.6,51,767/ - , DEPB LICENCE PREMIUM SET - OFF OF RS.53,422/ - INTEREST & ROYALTY INCOME OF RS.10,17,380/ - WHICH W ERE NOT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. THUS, THE CLAIM OF THE ASSESSEE WAS REOPENED U/S 147 OF THE ACT AND THE CLAIMED U/S 80IA OF THE ACT WAS DECLINED AND THE INCOME OF ASSESSEE WAS ASSESSED TO THE TUNE OF RS.56,34,744/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALSO REJECTED THE CLAIM OF THE ASSESSEE THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. GROUND NO.1 & 2 : - 4 . UNDER THESE ISSUES THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF DEDUCTIO N U/S 80IA OF THE ACT. THE LD. R EPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE M ATTER OF CONTROVERSY HAS ALREADY BEEN ADJUDICATED BY THE HONBLE ITAT IN ITA. NO. 5911/MUM/2013 FOR THE A.Y. 200 6 - 07 IN THE ASSESSEES OWN CASE, T HEREFORE, THE DEDUCTION U/S 80IA OF THE ACT OTHER RELEVANT BENEFITS ARE LIABLE TO BE ALLOWED ACCORDINGLY . ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTIONS. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. WE OBSERVED THAT THE PRESENT CASE IS THE CASE OF NIRMAL INDUSTRIAL CONTROL 4 THE A. Y. 2005 - 06 AND THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED FOR THE A.Y. 2006 - 07 IN ITA. NO.5911/MUM/2013 BY THE HONBLE ITAT MUMBAI BENCH BY VIRTUE OF ORDER DATED 25.02.2015 IN THE ASSESSEES OWN CASE . IN VIEW OF THE SAID CIRCUMSTANCES, WE REMAND THE CASE O F THE ASSESSEE BEFORE THE AO DECIDE THE MATTER OF CONTROVERSY AFRESH IN VIEW OF THE ORDER PASSED BY THE HONBLE ITAT IN 5911/MUM/2013 FOR THE A.Y. 2006 - 07 BY THE HONBLE MUMBAI BENCH DATED 25.02.2015. NEEDLESS TO SAY THAT THE ASSESSING OFFICER WOULD PROVID E AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUES AND DIRECT THE AO TO DECIDE THE MATTER AFRESH IN VIEW OF ABOVE MENTIONED ORDER. THE APPEAL OF THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED ACCORDINGLY. 6 . IN THE RESULT , APPEAL OF THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 13. 09 . 2017 SD/ - SD/ - ( B.R. BASKARAN ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 13 .0 9 . 201 7 V.P.SINGH NIRMAL INDUSTRIAL CONTROL 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI