Amman Granite Exports Pvt. Ltd., CHENNAI V. ITO, CHENNAI

ITA 568/CHNY/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2686 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHALJCIT
• Assessee Lawyers: P RAJAVELU
• Keywords: Validity of assessment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.568 /MDS./2014 ( / ASSESSMENT YEAR :2002-03) M/S.AMMAN GRANITE EXPORTS PVT LTD., M.G.COLONY,HARUR DHARMAPURI DISTRICT 636 903. VS. THE INCOME TAX OFFICER, COMPANY WARD-1(1), CHENNAI-34. PAN AAACA 4104 E ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.P.RAJAVELU,ADVOCATE / RESPONDENT BY : DR.B.NISCHAL,JCIT, D.R / DATE OF HEARING : 29.02.2016 ! /DATE OF PRONOUNCEMENT : 16.03.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, AP PEALS ITA NO.568/MDS/2014 2 (CENTRAL)-I, CHENNAI DATED 24.12.2013 PERTAINING TO THE ASSESSMENT YEAR 2002-03 . 2. THE ASSESSEE HAS RAISED THE GROUNDS WITH REGARD TO WITHDRAWING OF DEDUCTION U/S.10B OF THE ACT AND GRA NTING OF DEDUCTION U/S.80HHC OF THE ACT CONSEQUENT TO THE CIT-I, CHENN AI IN HIS ORDER PASSED U/S.263 OF THE ACT DATED 29.12.2006. 3.1 THE FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 ON 29. 09.2003 ADMITTING A TOTAL INCOME OF ` 26,44,401/- AFTER CLAIMING DEDUCTION U/S.80HHC OF THE ACT AND THE ASSESSMENT WAS COMPLE TED U/S.143(3) OF THE ACT ON 24.03.2005. THEREAFTER, THE CIT-I CHE NNAI INITIATED ACTION U/S.263 OF THE ACT AND PASSED ORDER U/S.263 DATED 29.12.2006 SETTING ASIDE THE ASSESSMENT WITH THE DIRECTION TO RE-COMPUTE THE INCOME AFTER WITHDRAWING THE DEDUCTION U/S.10B OF T HE ACT AND TO CONSIDER THE DEDUCTION U/S.80HHC OF THE ACT CLAIMED BY THE ASSESSEE IN ITS ORIGINAL RETURN FILED ON 29.09.2003 . ACCORDINGLY, THE RE-ASSESSMENT WAS COMPLETED BY THE AO AFTER WITHDRA WING DEDUCTION ITA NO.568/MDS/2014 3 U/S.10B AND GRANTING DEDUCTION U/S.80HHC OF THE ACT , AS PER THE ORDER U/S.263 OF THE ACT. AGAINST THIS, THE ASSES SEE WAS IN APPEAL BEFORE THE LD.CIT(A). 3.2 ON APPEAL, THE CIT(A) OBSERVED THAT THE ACTION OF THE AO IS JUSTIFIED AS THE ASSESSEE HAS FAILED TO SUBSTANTIAT E ITS CLAIM MADE IN THE GROUNDS WITH ANY COGENT EVIDENCE BEFORE THE FIR ST APPELLATE PROCEEDINGS, DESPITE SEVERAL OPPORTUNITIES. HENCE, CIT(A) UPHELD THE ACTION OF THE AO. 4. BEFORE US, LD.A.R SUBMITS THAT THE CIT IN HIS O RDER DATED 29.12.2006 PASSED U/S.263 OF THE ACT SET ASIDE THE ASSESSMENT ORDER MADE ON 24.03.2005 AND DIRECTED THE AO TO RE-COMPUT E THE INCOME OF THE ASSESSMENT YEAR UNDER CONSIDERATION WITHDRAW ING THE DEDUCTION GRANTED U/S.10B OF THE ACT TO THE ASSESSE E AND TO ISSUE FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. ACC ORDING TO THE LD.A.R, CIT HAS ALSO GIVEN A DIRECTION TO CONSIDER THE DEDUCTION U/S.80HHC OF THE ACT CLAIMED BY THE ASSESSEE IN IT S ORIGINAL RETURN OF INCOME. ACCORDING TO THE LD.A.R, THE ORDER OF ASSE SSMENT DATED 31.12.2007 AS DIRECTED BY THE REVISIONAL AUTHORITY IS AMENABLE TO APPEAL FOR ORDER ON MERITS BY THE FIRST APPELLATE A UTHORITY, AND IF SUCH ITA NO.568/MDS/2014 4 APPEAL PREFERRED BY THE ASSESSEE NOTWITHSTANDING TH E DIRECTION ISSUED BY THE HONOURABLE MADRAS HIGH COURT IS NOT M AINTAINABLE OR ENTERTAINED BY THE FIRST APPELALTE AUTHORITY WRONGL Y WITHOUT MAKING ANY VERIFICATION OF THE MAINTAINABILITY QUESTION, T HE DEPARTMENT SHOULD HAVE PREFERRED SECOND APPEAL BEFORE THIS HONOURABLE TRIBUNAL QUESTIONING THE MAINTAINABILITY OF THE BEFORE THE FIRST APPELLATE AUTHORITY. THE LD.A.R FURTHER SUBMITTED THAT HAVING FAILED TO DO SO THAT TOO AFTER A LAPSE OF LONG LENGTHY AT THIS JUNCTURE, TRIBUNAL MAY NOT HAVE GONE INTO THE QUESTION OF MAINTAINABILITY AND IT IS RESPECTFULLY PRAYED FOR ORDER ON MERITS AS THE ASSESSEE IS QUEST IONING THE VALIDITY OF ASSESSMENT HE SUBMITTED THAT THE FIRST APPEAL W AS PREFERRED BY THE ASSESSEE AS DIRECTED BY THE HONOURABLE MADRAS H IGH COURT AND THE REVISIONAL AUTHORITY HAS NOT GIVEN ANY AUTHORIT ATIVE DIRECTION TO THE AO FOR RE-DING THE ASSESSMENT ON MERITS. LD.A. R SUBMITTED THAT IF THE CLAIM OF EXEMPTION U/S.10B WAS FOUND TO BE WRON G, THEN THE REVISIONAL AUTHORITY SHOULD HAVE REJECTED THE CLAIM BY SETTING ASIDE THE ORDER OF THE AO DATED 24.03.2005 WITHOUT GIVING ANY FURTHER DIRECTION FOR RE-DOING THE ASSESSMENT . FURTHER, TH E LD.A.R SUBMITTED THAT FOR ASSESSMENT YEARS 2001-02,2003-04 & 2005-05 , SIMILAR ISSUE ITA NO.568/MDS/2014 5 WAS CONSIDERED BY THIS TRIBUNAL IN ASSESSEE'S OWN CASE VIDE ORDER DATED 22.06.2011 IN ITA NO.970 TO 972/MDS./2010 AND THEREIN THE TRIBUNAL DECIDED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.10B OF THE ACT. ACCORDING TO LD.A.R, THE FACTS AND CIR CUMSTANCES OF THE PRESENT CASE IS SIMILAR TO THAT ONE CONSIDERED BY T HE TRIBUNAL ON EARLIER OCCASION FOR ASSESSMENT YEARS 2001-02,2003- 04 & 2004-05 AND THE DEDUCTION U/S.10B IS TO BE GRANTED TO THE A SSESSEE. 5. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THERE IS A REVISIONAL ORDER PASSED U/S.263 OF THE ACT ON 29.12.2006 WHERE IN CIT HAS GIVEN A SPECIFIC DIRECTION TO THE AO TO RE-COMPUTE THE IN COME OF ASSESSEE BY WITHDRAWING THE DEDUCTION U/S.10B OF THE ACT. W HILE ADJUDICATING THE ABOVE ISSUE BY THE CIT IN HIS ORDER PASSED U/S. 263, HE RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. VIJAY GRANITES P.LTD. REPORTED IN [2004] 267 ITR 606 (MAD ) WHEREIN HELD THAT MANUFACTURING IMPLIES THE PRODUCTION OF ARTIC LES FOR USE FROM RAW MATERIAL OR PREPARED MATERIALS BY GIVING SUCH M ATERIAL INTO NEW FORM, QUALITY OR COMBINATIONS WHERE BY HAND OR LABO UR OR MACHINE. IF THE CHANGE MADE IN THE ARTICLES RESULTS IN A NEW AN D DIFFERENT ARTICLES, THEN IT WOULD AMOUNT TO A MANUFACTURING ACTIVITY. T HE JURISDICTIONAL ITA NO.568/MDS/2014 6 HIGH COURT HELD THAT THE ACT OF CUTTING AND POLISHI NG GRANITE SLABS BEFORE EXPORTING THEM DID NOT INVOLVE ANY PROCESS O F MANUFACTURE OR PRODUCTION. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE ARE OF THE OPINION THAT EARLIER ORDER P ASSED BY THE TRIBUNAL IS NOT TAKEN A NOTE OF THE BINDING DECISIO N OF JURISDICITIONAL HIGH COURT IN THE CASE OF CIT VS. VIJAY GRANITES P.LTD.(SUPRA). BEING SO, THE ASSESSEE CANNOT THRUST UPON THE REVENUE AUT HORITIES TO FOLLOW THE TRIBUNAL ORDER. FURTHER, IT IS ALSO ADMITTED F ACT THAT THE ORDER OF THE CIT PASSED U/S.263 OF THE ACT HAS REACHED FINA LITY AS THERE IS NO APPEAL FILED BY THE ASSESSEE AGAINST THAT ORDER. F OR THIS PROPOSITION, WE PLACED RELIANCE ON THE JUDGEMENT OF HONBLE BOMB AY HIGH COURT IN THE CASE OF HARDILLIA CHEMICALS LTD. V. CIT REP ORTED IN [1996] 221 ITR 194 (BOM) WHEREIN HELD THAT ANY APPEAL AGAINST THE FRESH ORDER PASSED BY ITO GIVING EFFECT TO REVISIONAL OR APPELA LTES ORDER, ONLY SUCH ISSUE CAN BE AGITATED WHICH HAVE NOT ATTAINED FINALITY BY VIRTUE OF EARLIER ORDERS OF THE REVISIONAL, OR APPELLATE A UTHORITIES. IN THE PRESENT CASE, ADMITTEDLY THE ASSESSEE NOT FILED ANY APPEAL AGAINST THE ORDER PASSED U/S.263 OF THE ACT. AS SUCH THE I SSUES RAISED BY THE ITA NO.568/MDS/2014 7 CIT IN HIS ORDER PASSED U/S.263 OF THE ACT HAS REAC HED FINALITY. IN OUR CONSIDERED OPINION, THE LOWER AUTHORITIES ARE JUSTI FIED IN FOLLOWING THE ORDER OF CIT PASSED U/S.263 OF THE ACT. THE SAME I S CONFIRMED. ACCORDINGLY, WE ARE INCLINED TO DISMISS THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. ORDER PRONOUNCED ON WEDNESDAY , THE 16 TH OF MARCH,2016 AT CHENNAI. SD/- SD/- ' # $ . % & ' ( DUVVURU RL REDDY ) ) ( ( ( ) * + ) ) ' CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 16 TH MARCH,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,'' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4,6 /GF