M/s. T. Devender Reddy, Hyderabad, Hyderabad V. The ITO, Ward 6(3), Hyderabad

ITA 57/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59188 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: B SAI PRASAD
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 57/HYD/2011 ASSESSMENT YEAR : 2006-07 SHRI T. DEVENDER REDDY HYDERABAD PAN: AAWPT6174G V S. INCOME TAX OFFICER WARD-6(3) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI B. SAI PRASAD RESPONDENT BY: SMT. NIVEDITA BISWAS DATE OF HEARING: 11 . 0 1.201 2 DATE OF PRONOUNCEMENT: 03.02.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-VI, HYDERABAD DATED 29.10.2010 FOR A.Y. 2006-07. 2. THE ASSESSEE'S GRIEVANCE IN THIS APPEAL IS WITH REG ARD TO DISALLOWANCE OF DEDUCTION U/S. 80IB(11A) OF THE INC OME-TAX ACT, 1961. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE DERI VES INCOME FROM HOUSE PROPERTY AND PROFIT FROM M/S. GAYATRI GA RDENS, M/S. ANJALI WAREHOUSE AND BALEMIA WAREHOUSE. THE ASSESS EE CLAIMED DEDUCTION U/S. 80IB(11A) OF THE ACT IN RESPECT OF P ROFIT DERIVED FROM ANJALI WAREHOUSE AND BALEMIA WAREHOUSE. ACCOR DING TO THE ASSESSEE THE ASSESSEE IS CARRYING ON INTEGRATED BUS INESS OF HANDLING AND STORAGE OF TRANSPORTATION OF FOOD GRAI NS. THEREFORE, 100% DEDUCTION OF PROFIT FROM ANJALI WAREHOUSE AND BALEMIA WAREHOUSE IS ALLOWABLE. I.T.A. NO. 57/HYD/2011 SRI T. DEVENDER REDDY ================== 2 4. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE WA S ONLY RECEIVING RENTAL INCOME IN RESPECT OF ANJALI WAREHO USE FROM A.P. STATE WAREHOUSING CORPORATION (APSWC) AND THERE WAS NO RECEIPT OF HANDLING AND TRANSPORTATION CHARGES FROM APSWC. FURTHER ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE IS GETTING ONLY RENTAL INCOME FROM APSWC. FURTHER IT WAS OBSERVED THAT BALEMIA WAREHOUSE PROVIDES STORAGE FACILITY TO FARMERS AND ALSO TRANSPORTATION, HANDLING, ETC., AS AND WHEN REQUIRE D. THUS, IT WAS CLAIMED THAT THE ASSESSEE IS ENGAGED IN INTEGRATED BUSINESS AS ENUMERATED U/S. 80IB OF THE ACT. HOWEVER, THE CLAI M OF THE ASSESSEE HAS BEEN REJECTED BY THE ASSESSING OFFICE R ON THE REASON THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT HANDLING AND TRANSPORTATION IS BEING DONE IN ADDITION TO STORAGE FOR APSWC. ACCORDINGLY, THE RENT RECEIVED BY THE ASSESSEE ON PROVIDING WAREHOUSING FACILITIES CANNOT BE ALLOW ABLE FOR DEDUCTION U/S. 80IB. ACCORDINGLY, THE CLAIM WAS RE JECTED BY THE ASSESSING OFFICER. 5. ON APPEAL, THE CIT(A) AGREED WITH THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL B EFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE THE ASSESSEE'S CLAIM IS WITH REGARD TO DEDUCTION U/S. 80IB(11A) OF THE ACT IN RESPECT OF I NCOME DERIVED FROM INTEGRATED BUSINESS OF HOARDING, STORAGE AND T RANSPORTATION OF FOOD GRAINS. IT IS AN ADMITTED FACT THAT THE AS SESSEE'S FIRST YEAR OF CLAIM OF THIS DEDUCTION IS A.Y. 2003-04 AND THE SAME WAS ALLOWED BY THE ASSESSING OFFICER VIDE ASSESSMENT OR DER PASSED U/S. 143(3) DATED 26.12.2005. SIMILARLY, IN SUBSEQ UENT ASSESSMENT YEARS THE ASSESSEE CLAIM HAS BEEN ALLOWE D FOR A.Y. 2004-05 AND A.Y. 2005-06. FURTHER FOR A.Y. 2007-08 THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED WHILE PASSING THE ASS ESSMENT ORDER U/S. 143(3) DATED 15.10.2009. THE CLAIM OF THE ASS ESSEE IS I.T.A. NO. 57/HYD/2011 SRI T. DEVENDER REDDY ================== 3 REJECTED ONLY FOR THIS ASSESSMENT YEAR, I.E., A.Y. 2006-07. IN OUR OPINION, THIS ACTION OF THE LOWER AUTHORITIES IS NO T JUSTIFIED. ONCE THE ASSESSEE'S CLAIM IS ALLOWED IN ONE ASSESSMENT Y EAR, THE SAME CANNOT BE DISALLOWED IN SUBSEQUENT ASSESSMENT YEARS WITHOUT ANY GOOD AND SUFFICIENT REASON OR CHANGE OF CIRCUMSTANC ES. THE REASONS GIVEN BY THE ASSESSING OFFICER FOR REJECTIN G THE CLAIM OF THE ASSESSEE ARE NOT GOOD ENOUGH TO SUSTAIN THE DISALLO WANCE. 7. WE PLACE RELIANCE ON THE ORDER OF THE TRIBUNAL, VISAKHAPATNAM BENCH IN THE CASE OF TIRUMALA DAIRY P VT. LTD. IN THE COMBINED ORDER IN I.T.A. NOS. 153 & 154/VIZAG/0 9, 397/VIZAG/10, 60/VIZAG/11. THE TRIBUNAL VIDE ORDER DATED 11 TH AUGUST, 2011 HELD AS FOLLOWS: IT SHOULD BE STATED THAT THERE IS NO PROVISION IN THE SCHEME OF S. 80J SIMILAR TO THE ONE WHICH ONE FINDS IN THE CASE OF DEVELOPMENT REBATE WHICH COULD BE WITHDRAWN IN SUBSEQUENT YEAR FOR BREACH OF CERTAIN CONDITIONS. NO DOUBT, THE RELIEF OF TAX HOLIDAY UN DER S. 80J CAN BE WITHHELD OR DISCONTINUED PROVIDED THE R ELIEF GRANTED IN THE INITIAL YEAR OF ASSESSMENT IS DISTU RBED OR CHANGED ON VALID GROUNDS. BUT WITHOUT DISTURBIN G THE RELIEF GRANTED IN THE INITIAL YEAR THE ITO CANN OT EXAMINE THE QUESTION AGAIN AND DECIDE TO WITHHOLD O R WITHDRAW THE RELIEF WHICH HAS BEEN ALREADY ONCE GRANTED. THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THERE WAS NO CASE FOR THE REVENUE TO WITHDRAW THE ASSESSEES CLAIM UNDER S. 80J FOR THE YEAR UNDER REFERENCE, WHEN SUCH CLAIM HAD BEEN ACCEPTED IN THE EARLIER ASSESSMENT YEAR, WHICH ASSESSMENT HAD NOT BEEN DISTURBED. 8. FURTHER IN THE CASE OF MICRO INSTRUMENTS CO. LTD., VS. ITO [12 DTR (CHD.) 501] IT WAS HELD AS UNDER: THE ASSESSEE INITIALLY CLAIMED DEDUCTION UNDER S. 80IB FOR THE IMPUGNED UNIT IN THE ASST. YR. 2001-02 AND THE SAME WAS ALLOWED. IN THIS ASSESSMENT YEAR, I.E., 2 003- 04 THE CLAIM OF THE ASSESSEE WAS IN CONTINUATION OF THE CLAIMS MADE IN THE EARLIER ASSESSMENT YEARS FOR THE IMPUGNED ASSESSMENT YEAR FALLS WITHIN THE NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THE SECTION IN WHI CH THE CLAIM IS ELIGIBLE. IT IS ALSO A PERTINENT FACT POSITION I.T.A. NO. 57/HYD/2011 SRI T. DEVENDER REDDY ================== 4 THAT THE CLAIM ALLOWED TO THE ASSESSEE IN THE INITI AL ASSESSMENT YEAR OF 2001-02 AND THEREAFTER IN THE AS ST. YR. 2002-03 HAS NOT BEEN WITHDRAWN. THERE IS NO CONTRAVENTION FROM THE REVENUE EITHER AT THE STAGE OF THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES OR EVE N BEFORE THE TRIBUNAL. THUS, FACTUALLY SPEAKING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S. 80IB STANDS ADMITTED IN THE INITIAL ASSESSMENT YEAR AND ALSO THEREAFTER UP TO THE ASSESSMENT YEAR PRIOR TO THE Y EAR UNDER CONSIDERATION. ON THE FACTUAL MATRIX, THERE IS NO JUSTIFICATION FOR THE AO TO DENY THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S. 80IB. THE IMPLICAT ION OF THE EARLIER ASSESSMENT MADE FOR THE INITIAL ASSESSMENT YEAR UNDER S. 143(3) IS THAT THE ASSESSE E HAS FULFILLED THE CONDITIONS PRESCRIBED IN THE SAID SECTION. THEREAFTER, IT IS NOT OPEN FOR THE AO TO RE- EXAMINE THE ISSUE ALL OVER AGAIN AND COME TO A DIFF ERENT CONCLUSION IN A SUBSEQUENT YEAR WITHOUT JUSTIFYING SUCH DEPARTURE. IN THE ASSESSMENT ORDER, THERE IS NO DISCUSSION BY THE ASSESSING OFFICER ON THIS ASPECT IN SPITE OF THE FACT THAT THE ASSESSEE HAD TAKEN A SPE CIFIC POSITION BASED ON THE RELIEF ALLOWED IN THE PAST. FURTHER, THE CLAIM ACCEPTED BY THE AO IN THE ASST. YR. 2001-02 AND THEREAFTER IN 2002-03 HAS NOT BEEN DISTURBED. CLEARLY, IN A SUCH A SITUATION, THE ONU S WHICH WAS ON THE REVENUE HAS NOT BEEN DISCHARGED. INSOFAR AS THE JUSTIFICATION FOR THE CLAIMS OF EXEMPTION/TAX RELIEFS ARE CONCERNED THE ONUS IS ON THE ASSESSEE TO ESTABLISH AND JUSTIFY THE CLAIMS. SO, HOWEVER, IN A SITUATION LIKE THE PRESENT SITUATION, THE AO OUGHT TO HAVE JUSTIFIED THIS DEPARTURE FROM THE EARLIER ACCEPTED POSITION WHEREBY SIMILAR CLAIM HAS BEEN ACCEPTED IN THE PAST. IT IS IN THE BACKGROUND THE ONUS WAS ON THE AO TO JUSTIFY THE DENIAL OF DEDUCTI ON UNDER S. 80IB IN VIEW OF THE PAST HISTORY. THEREFO RE, IN THIS BACKGROUND THERE IS NO JUSTIFICATION TO UPHOLD THE STAND OF THE IT AUTHORITIES TO DENY THE CLAIM OF TH E ASSESSEE FOR DEDUCTION UNDER S. 80IB IN RELATION TO THE PROFITS AND GAINS. SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD. VS. CIT (1979) 11 CTR (GUJ) 139; (1 980) 123 ITR 669 (GUJ) AND CIT VS. PAUL BROTHERS (1995) 216 ITR 548 (BOM) RELIED ON. 9. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPIN ION THAT THE ASSESSEE'S CLAIM U/S. 80IB(11A) HAS TO BE ALLOW ED IN THIS ASSESSMENT YEAR ALSO. ACCORDINGLY, THE CLAIM OF TH E ASSESSEE IS ALLOWED. I.T.A. NO. 57/HYD/2011 SRI T. DEVENDER REDDY ================== 5 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 3 RD FEBRUARY, 2012 COPY FORWARDED TO: 1. SRI T. DEVENDER REDDY, C/O. M/S. RAO & SAI, ADVOCAT ES & TAX CONSULTANTS, 6-3-570/1&2, ROCK VISTA, ROCKDALE COMPOUND, SOMAJIGUDA, HYDERABAD-500 082. 2. THE INCOME TAX OFFICER , WARD - 6(3), HYDERABAD. 3. THE CIT(A) - VI, HYDERABAD. 4. THE CIT - II I, HYDERABAD. 5 . THE DR A BENCH, ITAT, HYDERABAD TPRAO