DCIT 8(2), MUMBAI V. LEXI P.LTD, MUMBAI

ITA 6162/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1325 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 18-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-10-2014
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Section: 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.6162/MUM /2014 ASSESSMENT YEAR-2011-12 DCIT-8(2), R. NO.209, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S LEXI PVT. LTD. B-33, 6 TH FLOOR, LEXI CENTRE, OFF. NEW LINK ROAD, ANDERI (WEST), MUMBAI-400053 PAN NO. AAACL7243D ( / REVENUE) ( / ASSESSEE) / REVENUE BY SHRI RAJESH KUMAR YADAV- DR / ASSESSEE BY NONE / DATE OF HEARING : 18/04/2017 / DATE OF ORDER: 21/04/2017 ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 31/07/2014 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI, ALLOWING THE DEDUCTION U/S 80IB OF THE INCO ME TAX ACT, 1961 (HEREINAFTER THE ACT), AMOUNTING TO RS.4,04,93,929/-, WITHOUT APPRECIATING THE PROVISIO N OF THE ACT AND THE CLAIM OF EARLIER YEARS (2005-06 AND 2006- 07) HAS BEEN CHALLENGED BY THE DEPARTMENT BEFORE TH E HON'BLE HIGH COURT. 2. DURING HEARING, SHRI RAJESH KR. YADAV, LD. DR, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUN D RAISED BY CONTENDING THAT FOR ASSESSMENT YEAR 2005- 06 AND 2006-07, THE DEDUCTION GRANTED TO THE ASSESSEE HAS BEEN CHALLENGED BY THE DEPARTMENT BEFORE THE HON'BL E HIGH COURT. NONE WAS PRESENT FOR THE ASSESSEE IN SP ITE OF ISSUANCE OF REGISTERED NOTICES, ON EARLIER OCCASION S ALSO. TODAY ALSO, NOBODY APPEARED FOR THE ASSESSEE NOR AN Y ADJOURNMENT PETITION WAS FILED. IT SEEMS THAT THE A SSESSEE HAS NOTHING TO SAY. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFOR E COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUN DER THE RELEVANT FINDING RECORDED BY THE LD. COMMISSION ER OF INCOME TAX (APPEAL) FOR READY REFERENCE AND ANALYSI S:- 1.3.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 3 CONTENTION OF THE LD. AR OF THE APPELLANT AND ALSO CAREFULLY GONE THROUGH THE FACTS AND EXPLANATION GIVEN BY THE LD. AR OF THE APPELLANT AS WELL AS THE LD. AO. SIMILAR ISSUE HAS ARISEN IN THE ASSESSEE'S OWN CASE FOR AY 2010-11 WHEREIN MY LD. PREDECESSOR VIDE ORDER NO. CIT(A)-17/IT112/2012-13, DATED 09.05.2013 IN PARA NO. 4.2 AND 6.2 HAS DECIDED THE ISSUES AS UNDER:. ' 4.2 I HAVE. CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE ORDER OF THE A 0 THE CIT(A)-7, MUMBAI IN TH E APPELLANT'S OWN CASE FOR AY 2010-11 ON THE ISSUE OF CLAIM U/S 8019 VIDE ITS ORDER NO CIT(A)-17/IT-112/2012-13 , DATED 95 2013 IN PARA 42 AND 43 HAS DECIDED AS UNDER '4. 2 HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AN D ORDER OF THE A0 THE CIT(A)-17, MUMBAI IN THE APPELLANT'S OWN CASE FOR AY 2009-10 ON THE ISSUE OF CLAIM U/S8OIB VIDE ITS ORDER NO. IT(A) 7/IT-I 94/20 11-12, DATED 20.06.2012 IN PARA 3.3 AND 3.4 HAS DECIDED AS UNDER: '33 I HAVE PERUSED THE FACTS IN THIS CASE. THE ENTR E DISALLOWANCE HAS BEEN MADE BASED UPON THE ORDERS FO R AYS 2004-05; THE ORDER FOR ASSESSMENT YEAR 2004-05 AS SUBMITTED ABOVE, WAS SET ASIDE BY THE TRIBUNAL FOR RE- ADJUDICATION BY THE A0 AFTER RE-ADJUDICATION THE M ATTER CAME UP BEFORE THE CIT APPEAL, 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 COMIN G TO AN ERRONEOUS VIEW THAT OLD MACHINERY HAD BEEN TRANSFER RED FROM THE MUMBAI UNIT TO THE DAMAN UNIT AND WHICH WAS MOR E THAN 20% OF THE TOTAL VALUE OF PLANT AND MACHINERY. THERE IS OVERWHELMING EVIDENCE TO CLEARLY SHOW THAT THERE WAS NO TRANSFER OF PLANT AND MACHINERY DURING THE F INANCIAL YEAR 2003-04; THAT THE MUMBAI UNIT SITUATED AT SAKINAKA CONTINUED WITH ITS MOULDING AND MANUFACTURING OPERATIONS DURING TH E FINANCIAL YEAR CONCERNED WHICH IS EVIDENT FROM THE DETAILS OF SALES, .PURCHASES, MANUFACTURING EXPENSES AND STATUTORY COMPLIANCES MADE BY THE MUMBAI UNIT; THAT: THE PURC HASE OF CAPITAL GOODS AND WORK-IN-PROGRESS OF THE DAMAN UNI T, THE PURCHASES OF RAW MATERIALS AND SALES DURING THE YEA R AS ALSO THE EXPENSES CONCERNED CLEARLY REVEALS THAT THE DAMAN U NIT 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 SAKINAKA ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 4 UNIT AT MUMBAI TO THE NEZV UNIT AT DAMAN AND THEREF ORE, IT IS APPARENT THAT THE AO COMMITTED AN ERROR IN DENYING THE DEDUCTION U/S. 80IB. IN MAY VIEW, THE APPELLANT IS ENTITLED TO THE 'DEDUCTION AS CLAIMED. THE AO SHALL RECOMPUTED THE INCOME . ACCORDINGLY. THE AFORESAID GROUNDS ARE ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE.' 3.4 THE DISALLOWANCE IN THE CURRENT YEAR HAS ALSO B EEN BASED UPON THE FACT FINDING IN ASSESSMENT YEAR 2004 -05. AS CITED SUPRA, THE CIT APPEAL HAS HELD IN THAT YEAR T HAT THE APPELLANT WAS ELIGIBLE FOR DEDUCTION U/S. 80IB. SIM ILAR IS THE POSITION AS REGARDS TO THE ALLOWABILITY OF DEDUCTIO N U/S. 80IB FOR AYS 2005-06 TO AY 2008-09, WHEREIN THE APPEAL OF THE AP PELLANT WAS ALLOWED BY MY PREDECESSOR AS WELL AS THE TRIBUNAL. THEREFORE, FOLLOWING THE DECISION OF THE HONOURABLE ITAT AS WE LL AS THE DECISION OF MY LD. PREDECESSORS, THE AO IS DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT U/S. 80IB. THIS GROUND OF AP PEAL, THEREFORE, STANDS ALLOWED' 4.3 . FOLLOWING THE ABOVE DECISION OF THE MY PREDECESSOR IN THE APPELLANT'S OWN CASE FOR AY 2009 -10 AND SINCE THERE IS NO CHANGE IN THE FACTS, THE GROUND OF APPE AL IN THE INSTANT CASE FOR A Y 2010-11 IS ALSO ALLOWED.'.' 4.3. FOLLOWING THE: ABOVE DECISION OF THE MY PREDEC ESSOR IN THE APPELLANT'S OWN CASE FOR AY 2010-11 AND SINCE THERE IS NO CHANGE IN THE FACTS, THE GROUND OF , THE GROUND OF APPEAL IN THE INSTANT CASE FOR A Y 2011-12 IS ALSO ALLOWED AND AO IS DIRECTED TO G RANT THE DEDUCTION U/S 80IB AMOUNTING TO RS.4,04,93,929/- A S CLAIMED BY THE APPELLANT. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 1.3.2. RESPECTFULLY, FOLLOWING THE ABOVE DECISION O F MY LD. PREDECESSOR IN THE ASSESSEES OWN CASE, THESE GROUN DS OF APPEAL ARE THUS DISMISSED. 2.2. THE FACTS, IN BRIEF, ARE THAT DURING ASSESSME NT PROCEEDINGS, THE LD. ASSESSING OFFICER OBSERVED THA T THE ASSESSEE COMPUTED GROSS TOTAL INCOME AT RS.16,35,15,381/- AND 30% OF THE SAME I.E. 4,04,93, 929/- WAS CLAIMED AS DEDUCTION U/S 80IB OF THE ACT. THE L D. ASSESSING OFFICER WAS ASKED TO SUBMIT THE NECESSARY DETAILS LIKE BILLS OF PLANT AND MACHINERY, WHICH WE RE PUT TO USE. THE ASSESSEE VIDE LETTER DATED 25/11/2013 SUBM IT ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 5 THE JUSTIFICATION FOR THE CLAIMED DEDUCTION, HOWEVE R, THE LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE CL AIM AND DISALLOWED THE SAME. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), AS REPRODUCED HEREINABOVE, THE CLAIM OF THE ASSESSEE WAS ALLOWED, WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL. WE FIND T HAT FOR CLAIMING THE DEDUCTION U/S 80IB OF THE ACT, THE ASS ESSEE HAS TO FULFIL THE CONDITIONS CONTAINED IN SUB-SECTI ON(2) OF THE SECTION. THESE CONDITIONS HAS BEEN ENUMERATED/D EALT WITH BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IN THE ORDER ALONG WITH THE FACTUM OF ESTABLISHING THE FACTORY SET-UP ON DAMAN. THERE IS UNCONTROVERTED FINDING TH AT NEW INDUSTRIAL UNDERTAKING WAS FORMED AT DAMAN BY TRANSFERRING MORE THAN 20% OF THE PLANT AND MACHINE RY PREVIOUSLY USED BY THE ASSESSEE IN ITS INDUSTRIAL P REMISES AT BOMBAY. THE LD. COMMISSIONER OF INCOME TAX (APPE AL) HAS ALREADY PLACED RELIANCE UPON THE DECISION IN CI T VS KEDARNATH JUTE MFG. CO. 82 ITR 363 (SC), TUTICORIN ALKALIS CHEMICALS AND FERTILIZERS LTD. 227 ITR 172 AND MC.DOWELLS CO. LTD. 154 ITR 148 ALONG WITH OTHER DECISIONS OF THE TRIBUNAL. SO FAR AS, THE CONTENTIO N OF THE REVENUE THAT THE ORDER OF THE TRIBUNAL HAS BEEN CHALLENGED BEFORE THE HON'BLE HIGH COURT, IS CONCER NED, NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE, THEREF ORE, THE ORDER OF THE TRIBUNAL AS ON DATE, STANDS. THE ASSES SEE SET- UP THE INDUSTRIAL UNDERTAKING IN INDUSTRIALLY BACKW ARD THE STATE, WHEREIN, CERTAIN BENEFITS ARE EXTENDED TO TH E ASSESSEE. THE OPERATION OF MUMBAI UNIT CONTINUED DU RING ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 6 THE FINANCIAL YEAR-2003-04 AT THE NORMAL SCALE. IN THE NEW UNIT, AT DAMAN, NEW PLANT AND MACHINERY WAS INSTALLED DURING THE FIRST YEAR OF OPERATION AND FU RTHER NEW ADDITIONS WERE MADE DURING THE FINANCIAL YEAR 2004- 05. IT IS ALSO NOTED THAT FOR ASSESSMENT YEAR 2005-06, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL ) WAS AFFIRMED BY THE TRIBUNAL AND THE APPEAL OF THE REVE NUE WAS DISMISSED. AGAINST THE SAID ORDER, THE MISCELLA NEOUS APPLICATION FILED BEFORE THE TRIBUNAL AGAINST THE S AID ORDER WAS ALSO DISMISSED. THUS, IN THE ABSENCE OF ANY CON TRARY DECISION/FACTS, THE CLAIMED DEDUCTION WAS RIGHTLY A LLOWED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL). IT IS ALSO NOTED THAT THE FIRST APPELLATE AUTHORITY HAS RELIED UPON THE EARLIER ORDERS OF THE TRIBUNAL AND ALSO OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTANTLY, T HE APPEAL OF THE REVENUE IS HAVING NO MERIT, THEREFORE , DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 18/04/2017. SD/- SD/ - (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; # DATED : 21/04/2017 ITA NO.6162/MUM/2014 M/S LEXI PVT. LTD. 7 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. %& '( / THE APPELLANT (RESPECTIVE ASSESSEE) 2. )*'( / THE RESPONDENT. 3. + + , ( %& ) / THE CIT, MUMBAI. 4. + + , / CIT(A)- , MUMBAI, 5. /01 )2 , + %& %23 , / DR, ITAT, MUMBAI 6. 14 5 / GUARD FILE. / BY ORDER, */& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI