DCIT 8(1), MUMBAI V. ENEM NOSTRUM REMEDIES P.LTD, MUMBAI

ITA 5698/MUM/2013

• Counselvise Citation: 569819914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI A.D.JAIN (JM) AND RAJENDRA (AM) . . , , ./ I.T.A. NO. 569 8 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 09 - 10 ) DY . COMMISIONER OF INCOME TAX - 8(1), ROOM NO.2 60A, 2 ND FLOOR,, AAYAKAR BHAV AN , M K ROAD, MUBMAI - 400020 / VS. M/S ENEM NOSTRUM REMEDIES PVT.LTD, UNIT NO.201 - 204, GAYATRI COMMERCIAL COMPLEX, AN DHERI KURLA ROAD, BEHIND MITTAL INDUSTRIAL ESTATE, ANDHEIR (E), MUMBAI - 400059 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAACE 8 766G / APPELLANT BY SHRI S S RANA / RSPONDENT BY MS.KAVITA MEHANDALE / DATE OF HEARING : 2 9 . 7 . 201 5 / DATE OF PRONOUNCEMENT : 7. 8. 201 5 / O R D E R PER A D JAIN ( J M) TH IS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 200 9 - 10 AGAINST THE ORDER OF LD.CIT(A) IN DIRECTING THE AO TO ALLOW DEDUCTION TO THE ASSESSEE U/S 80IB (8A) OF THE ACT ON THE BASIS OF DIRECTIONS GIVEN BY THE ITAT IN THE ORDER PASSED FOR THE ASSESSMENT YEARS 2004 - 05 TO 2006 - 07. 2. THE OPERATIVE PORTION OF THE LD.CIT(A)S ORDER IS AS FOLLOWS: 2.3 THE AO'S ORDER, THE CONTENTIONS OF THE APPELLANT, AND ITA NO. 569 8 / MUM/20 1 3 2 MATERIALS ON RECORD HAVE BEEN CONSIDERED. IDENTICAL ISSUE HAD COME UP IN APPEAL IN EARLIER YEARS. IN APPEAL ORDER DATED 20/02/2012 IN APPE AL NO. CIT(A) - 16/DC - 8(1)/IT - 153/2011 - 12 FOR AY 2008 - 09, THE CIT(A) HELD 'L HAVE CAREFULLY CONSIDER THE CONTENTION OF THE APPELLANT AND ALSO CAREFULLY GONE THROUGH THE DOCUMENTS AVAILABLE ON RECORD. I FIND THAT THE CLAIM OF THE APPELLANT U/S.80IB(8A) WAS AL LOWED BY THE HON'BLE TRIBUNAL IN THE A. Y. 2004 - 05 TO 2006 - 07 IN THE APPELLANT'S OWN CASE. FOLLOWING THE DECISION OF THE HON'BLE ITAT, THE LD.AO IS DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT U/S. 80IB (8A)'. FOLLOWING THE SAME FINDING, THE AO IS DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT U/ S 80IB(8A) IN AY 2009 - 10. 3. FROM THE ABOVE, IT IS EVIDENT THA T THE LD. CIT(A) HAS FOLLOWED THE FIRST APPELLATE ORDER FOR THE AY 2008 - 09, WHEREIN, THE TRIBUNAL ORDER IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2004 - 05 TO 2006 - 07 WAS FOLLOWED. IT WAS IN THIS MANNER THAT THE LD. CIT(A) DIRECTED THE AO THAT THE CLAIM OF UNDER SECTION 80IB(8A) OF THE ASSESSEE TO BE ALLOWED, FOR THE YEAR UNDER CONSIDERATION. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESS EE HAS PLACED RELIANCE ON THE TRIBUNAL ORDERS PASSED IN ITA NO.4277/MUM/2011, DATED 30.3.2012, IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08, IN ITA NO.4076/MUM/2009 FOR THE ASSESSMENT YEAR 2006 - 07 IN ITA, DATED 30.4.2010, IN ITA NO.2036/MUM /2008 FOR THE ASSESSMENT YEAR 2005 - 06, DATED 28.8.2008, AND IN ITA NO. IN ITA NO.1180/MUM/2008 , FOR THE ASSESSMENT YEAR 2004 - 05 , DATED 28.8.2008. 5. BEFORE US, THE LD. DR HAS CONTENDED THAT THE TRIBUNALS ORDER S IN THE ASSESSEES OWN CASE FOR THE ASSES SMENT YEARS 2004 - 05 TO 2006 - 07, AND PASSED IN ITA NO.4277/MUM/2011, DATED 30.3.2012 WHICH WERE RELIED ON BY THE LD CIT(A) TO ALLOW THE RELIEF TO THE ASSESSEE, HA VE BEEN ACCEPTED BY THE DEPARTMENT. ITA NO. 569 8 / MUM/20 1 3 3 6. HAVING CONSIDERED THE RIVAL CONTENTIONS, IN THE LI GHT OF THE MATERIAL PLACED ON RECORD, WE FIND THE MATTER TO BE COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID TRIBUNAL ORDERS IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004 - 05 TO 2007 - 08. IN THE ORDER DATED 20.8.2008, FOR THE ASSESSMENT YEA R 2004 - 05, THE TRIBUNAL HAS HELD AS UNDER : 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDLY THERE IS NO CROSS APPEAL BY THE REV E NUE. SO WE NEED TO EXAMINE ONLY THOSE ASPECTS WH I CH 'WE I GHED WITH THE L D. C IT ( A) FOR THE DENIAL OR DEDUCTION. SUB SECTION (8A) OF SECTION 80 80IB , WHICH IS RELEVANT FOR OUR PURPOSE, READS AS UNDER : - 'THE AMOUNT OF DEDUCTION IN THE CASE OF ANY COMPANY CARRYING ON SCIENTIFIC RESEARCH AND DEVELOPMENT SHALL BE HUNDRED PER CENT OF T HE PROFITS AND GAINS OF SUCH BUSINESS FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS, BE GINNING FROM THE INITIAL ASSESSMENT YEAR, IF SUCH COMPANY - ( I ) IS REGISTERED IN INDIA; II) HAS ITS MAIN OBJECT THE SCIENTIFIC AND INDUSTRIAL RESEARCH AND DEVELO PMENT; ( II ) IS FOR THE TIME BEING APPROVED BY THE PRESCRIBED. AUTHORITY AT ANY TIME AFTER THE 31ST DAY OF MARCH, 2000 BUT BEF ORE THE 1ST D AY OF APRIL, 2007; ( III ) FULFILLS SUCH OTHER CONDITIONS AS MAY BE PRESCRIBED .' 17. THERE REMAINS NO DISPUTE ON BEHALF OF TH E REVENUE QUA THE FULFILLMENT OF THE ABOVE FOUR CONDITIONS . THE L D. CIT(A) HAS DENIED THE BENEFIT OF DEDUCTION ON THE GROUND THAT THE ASSESSEE HAS NOT SATISFIED THE REQUIREMENT OF SECTION 80IB(2)(III) AS IT HAS NOT MANUFACTURED OR PRODUCED AN Y ARTICLE NO T SPECIFIED IN THE LIST GIVEN IN THE ELEVENTH SCHEDULE. IN THE OPINION OF THE LD. CIT(A), THE ASSESSEE, OUGHT TO HAVE MET THIS REQUIREMENT OF MANUFACTURING OR PRODUCING ANY ARTICLE, AND SINCE NOTHING WAS PRODUCED OR MANUFACTURED BY THE ASSESSEE, HE THEREF ORE, HELD THAT THE DEDUCTION CANNOT BE GRANTED: 18. SUB - SECTION (1) OF SECTION 80IB PROVIDES THAT WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY' PROFITS' AND GAINS DERIVED FROM ANY BUSINESS REFERRED TO IN SUB - SECTIONS (3) TO (11), ( 11 A), AND ( 11 B), THERE SHALL BE ALLOWED A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OF' ASSESSMENT YEARS AS IS SPECIFIED IN THIS SECTION SUBJECT TO AND IN ACCORDANCE WITH THE PROVISIONS ITA NO. 569 8 / MUM/20 1 3 4 OF THIS SECTION, SUB - SECT ION (2) DEALS W I TH INDUSTRIAL UNDERTAKINGS WHICH ARE ELIGIBLE FOR DEDUCTION AND NEED TO FULFILL THE CONDITIONS ENSHRINED IN CLAUSES (I ) TO (IV ) O F THIS SUB - SECTION. IN OTHER WORDS, IF THE ELIGIBLE ASSESSEE IS AN INDUSTRIAL UNDERTAKING THEN IT IS INCUMBENT UPON - I T TO SATISFY ALL THE 4 CONDITIO NS CUMULATIVELY AS SPECIFIED IN SUB - SECTION (2). ON GOING FURTHER WE NOTE THAT SUB - SECTION (3 ) PROVIDES DEDUCTION IN THE CASE OF CASE OF INDUSTRIAL UNDERTAKING I F IT IS A SMALL SCA LE INDUSTRIAL UNDERTAKING AND BEGINS T O MANUFACTURE ARTICLES O R THINGS DURING THE PERIOD SPECIFIED. SIMILARLY SUB - SECTION (4) AGAIN APPLIES TOAN INDUSTRIAL UNDERTAKING WHICH IS ESTABLISHED IN INDUSTRIALLY BACKWARD STATE SPECIFIED IN THE EIGHTH SCHEDULE SUB - SECT I ON (5) ALSO APPLIES TO INDUSTRIA L UNDERTAKING LOCATED IN SUCH INDU STRIAL BACKWARD DISTRICTS AS CENTRAL GOVERNMENT MAY SPECIFY. THUS IT CAN BE SEEN THAT SUB - SECTIONS (3) TO (5) PERMIT DEDUCTION TO INDUSTRIAL UNDERTAKINGS FULFILLING THE REQUISITE CONDITIONS AND SUB - SECTION (2) OPENS WITH T HE WORDS: 'THIS SECTION APPLIES TO ANY INDUSTRIAL UNDERTAKING WHICH FULFILLS ALL TH E FOLLOWING CONDITIONS NAMELY . GOING FURTHER WE OBSERVE THAT 'SUB - SECTIONS '(6) TO (8A) GRANT DEDUCTION TO THE ASSESSEE WHO ARE NOT COVERED WITHIN THE MEANING O F 'INDUSTR IAL UNDERTAKINGS', BUT ARE ENGAGED IN OTHER SPECIFIED BUSINESSES. AS CAN BE SEEN THAT SUB - SECTION (6 ) APPLIES TO AN ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF SHIPPING. SIMILARLY SUB - SECTION (7) PROVIDES DEDUCTION TO HOTELS ; SUB - SECTION. (7A ) TO MULTIPLEX THEATRES ; SUB - SECTION (7B) TO CONVENTION CENTRES AND SUB - S ECTION (8A) TO COMPANIES CARRYING ON SCIENTIFIC RESEARCH AND DEVELOPMENT. IT IS UNDER THIS LAST SUB - SECTION THAT THE ASSESSEE HAS BEEN GRANTED APPROVAL BY THE GOVERNMENT OF INDIA. ON GOING THROUG H THE SCHEME OF SECTION 80 IB IN TOTALITY, WE OBSERVE THAT THE FOUR CONDITIONS STIPULATED UNDER SUB - SECTION (2) ARE TO BE FULFILLED ONLY IF THE ELIGIBLE ASSESSEE IS AN INDUSTRIAL UNDERTAKING WITHIN THE MEANING OF SUB - SECTIONS (3) TO (5), AS THE CASE MAY BE . IF THE ASS ESSEE IS NOT AN 'INDUSTRIAL UNDERTAKING' BUT IS OTHERWISE ELIGIBLE FOR DEDUCTI ON UNDER ANY OF OTHER SUB - SECTIONS DISCUSSED ABOVE; THEN THERE IS NO REQUIREMENT FOR IMPORTING THE CONDITIONS STIPULATED IN SUB - SECTION '(2) WHICH ARE APPLICABLE T O INDUSTRIAL UNDERTAKINGS, AND REQUIRING THEIR SATISFACTI ON . SINCE THE INSTANT ASSESSEE IS ENGAGED IN THE BUSINESS OF CARRYING OUT SCIENTIFIC RESEARCH AND DEVELOPMENT AND HAS BEEN A PPROVED BY THE GOVERNMENT OF INDIA FOR THE BENEFIT - OF DEDUCTION U/S 80IB( 8A) IN OUR CONSIDERED OPINION THE CONDITIONS OF SUB - SECTION (2) ARE NOT REQUIRED TO BE FULFILLED BY IT. THE LD. CIT(A ) HAS INTERPRETED SECTION 80 I B IN AN INCONSISTENT MANNER SO ,AS TO CAST SUCH OBLIGATIONS ON THE ASSE SSEE WHICH HAVE NOT BEE N I M POSED BY T HE STATUTE . WE ,THEREFORE, OVERTURN THE IMPUGNED ORDER ON THIS ISSUE AND DIRECT THE ASSESSING OFFI CER TO ALLOW DE DUCTION. 19. IN THE RESULT, THIS APPEAL IS PART LY ALLOWED. ITA NO. 569 8 / MUM/20 1 3 5 7. IT IS T HIS REASONING, WHICH HAS BEEN FOLLOWED IN THE SUCCEEDING YEARS BY T HE TRIBUNAL. TH IS REASONING OF THE TRIBUNAL HA S NOT BEEN SHOWN TO HAVE BEEN EITHER REVERSED, OR EVEN STAYED ON APPEAL. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVESAID TRIBUNAL ORDER S IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS, THE ORDER PASSED BY THE LD. CIT(A) FOR THE YEAR UNDER CONSIDERATION IS UPHELD. THE GRIEVANCE OF THE DEPARTMENT BY WAY OF THE GROUNDS OF APPEAL RAISED IS FOUND TO BE SHORN OF MERIT . IT REJECTED AS SUCH. 8 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. PRON OUNCED ACCORDINGLY ON 7TH AUG , 2015. 7TH AUG , 2015 SD SD ( / RAJENDRA) ( . . / A.D. JAIN ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: 7TH AUG ,2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI