MEHER SYNTHETICS P.LTD, MUMBAI V. ITO RG 1(2)(3), MUMBAI

ITA 6222/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9074 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 08-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: IN CIRCUMSTANCES OF CA SE; REASONS ASSIGNED
• Keywords: Opportunity of being heard; Reason to believe
• Section: 80IB; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNALB BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.6222/MUM/2011 ( / ASSESSMENT YEAR: 2003-04) M/S. MEHER SYNTHETICS PVT. LTD. 412-A, LOTUS HOUSE, 33-A, NEW MARINE LINES, MUMBAI - 400020 / VS. INCOME TAX OFFICER 1(2)(3) AAYKAR BHAVAN, MUMBAI - 400020 ./ ./ PAN/GIR NO. AACCM1573H ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 04.10.2016 /DATE OF PRONOUNCEMENT:.06.01.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 30.06.2011 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2003- 04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ORDER U/S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961 AND THE REASONS ASSIGNED FOR ASSESSEE BY: NONE DEPARTMENT BY: SHRI MANOJ KUMAR ITA NO.6222.M.11 A.Y. 2003-04 2 DOING SO ARE WRONG AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF THE INCOME TAX ACT, 1961 AND THE RULES MADE THEREUNDER; (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE ASSESSING OFFICERS INITIATION OF PROCEEDINGS U/S.147 OF THE INCOME TAX ACT, 1961 AND CONSEQUENT COMPLETION OF RE-ASSESSMENT VIDE ASSESSMENT ORDER DATED 31.12.2009 ARE ILLEGAL AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES ERRED IN NOT ALLOWING THE CLAIM FOR DEDUCTION UNDER SECTION 80IB IN RESPECT OF AN AMOUNT OF RS.3,24,000/- BEING COMPENSATION RECEIVED FROM RELIANCE INDUSTRIES LTD. TOWARDS PRODUCTION LOSS SUFFERED BY THE APPELLANT AND THE REASONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF THE INCOME TAX ACT, 1961 AND RULES MADE THEREUNDER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES ERRED IN NOT ALLOWING THE CLAIM FOR DEDUCTION UNDER SECTION 80IB IN RESPECT OF AN AMOUNT OF RS.2,41,400/- BEING INSURANCE CLAIM RECEIVED FROM RELIANCE INDUSTRIES LTD. TOWARDS PRODUCTION LOSS SUFFERED BY THE APPELLANT AND THE REASONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF THE INCOME TAX ACT, 1961 AND RULES MADE THEREUNDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.11.2003 DECLARING TOTAL INCOME TO THE TUNE OF RS. NIL AFTER CLAIMING DEDUCTION U/S.80IB OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) TO THE TUNE OF RS.10,88,406/-. THE RETURN WAS PROCESSED ON 03.01.2004. THEREAFTER, THE PROCEEDINGS U/S.147 OF THE ACT WAS INITIATED BY ISSUANCE OF NOTICE U/S.148 OF THE ACT DATED 28.03.2008 WHICH WAS SERVED ITA NO.6222.M.11 A.Y. 2003-04 3 UPON THE ASSESSEE ON 31.03.2008. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED THE RETURN OF INCOME AND REQUESTED TO PROVIDE THE REASONS. THEREAFTER, THE REASONS WERE GIVEN BY VIRTUE OF LETTER DATED 03.12.2008 WHICH IS HEREBY REPRODUCED AS UNDER:- THE RETURN OF INCOME HAS BEEN FILED ON 28.11.2003. IT WAS ACCEPTED ON 03.01.2004. AS PER THE COMPUTATION FILED, THE TOTAL INCOME HAS BEEN SHOWN AT NIL AFTER CLAIMING DEDUCTION U/S.80IB @100% OF THE GROSS TOTAL INCOME. ON PERUSAL OF THE P&L A/C. FILED ALONGWITH THE RETURN OF INCOME, IT IS SEEN THAT THE ASSESSEE HAS SHOWN MISCELLANEOUS INCOME OF RS.10,72,857/- WHICH INCLUDES INCOME OF RS.5,87,800/- AS UNDER: CLAIM FROM RELIANCE INDUSTRIES LTD. RS.3,24,000/- INSURANCE CLAIM RS.2,42,400/- RELIANCE INFOCOM INCENTIVE RS. 2,400/- TOTAL RS.5,87,800/- THE ABOVE INCOME OF THE ASSESSEE IS NOT CONNECTED WITH MANUFACTURING ACTIVITY. THE SAME THEREFORE IS NOT ELIGIBLE TO BE CONSIDERED FOR DEDUCTION U/S.80IB. THUS, THE ASSESSEE HAS CLAIMED EXCESS DEDUCTION U/S.80IB. I HAVE THEREFORE, REASON TO BELIEVE THAT THERE HAS BEEN ESCAPEMENT OF INCOME OF RS.5,87,800/- IN THIS CASE AND IT IS A FIT CASE FOR REOPENING U/S.147 OF THE I.T.ACT, 1961. ITA NO.6222.M.11 A.Y. 2003-04 4 4. THEREAFTER, BY GIVING AN OPPORTUNITY OF BEING HEARD, THE ASSESSING OFFICER DISALLOWED THE CLAIM FROM RELIANCE INDUSTRIES LTD. TO THE TUNE OF RS.3,24,000/- AND DISALLOWED THE INSURANCE CLAIM TO THE TUNE OF RS.2,42,400/- AND ALSO DISALLOWED THE RELIANCE INFOCOM INCENTIVE TO THE TUNE OF RS.2,400/- AND ASSESSED THE TOTAL INCOME TO THE TUNE OF RS.6,76,290/-. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ABOVE SAID CLAIM WAS NOT COVERED BY THE PROVISION OF SECTION 80IB OF THE ACT. FEELING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO UPHOLD THE ORDER OF THE ASSESSING OFFICER, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. HOWEVER, AT THE TIME OF HEARING THE REPRESENTATIVE OF THE ASSESSEE WAS NOT PRESENT. ISSUE NO.1 TO 3:- 5. ISSUE NO.1 TO 3 ARE INTERCONNECTED, THEREFORE, ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. THE ASSESSEE PLEADED THAT THE ASSESSING OFFICER HAS WRONGLY INVOKED THE PROVISION U/S.147 OF THE ACT BECAUSE THE CLAIM OF THE ASSESSEE WAS DULY COVERED BY THE PROVISION OF SECTION 80IB OF THE ACT, THEREFORE THE ASSESSMENT ORDER DATED 31.12.2008 IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE OF THE DEPARTMENT REPRESENTED THAT THE CLAIM FROM RELIANCE INDUSTRIES LTD., INSURANCE CLAIM AND RELIANCE INFOCOM INCENTIVE ARE NOT COVERED IN VIEW OF THE PROVISION OF SECTION 80IB OF THE ACT, THEREFORE, THE ASSESSEE HAS CLAIMED THE EXCESS DEDUCTION U/S.80IB OF THE ACT, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISION U/S.147 OF THE ACT IN ACCORDANCE WITH LAW. IN SUPPORT OF THESE CONTENTIONS THE LEARNED ITA NO.6222.M.11 A.Y. 2003-04 5 REPRESENTATIVE OF THE DEPARTMENT HAS PLACED RELIANCE UPON THE LAW SETTLED IN [2009] 183 TAXMAN 349 (SC) IN CASE TITLED AS LIBERTY INDIA VS. COMMISSIONER OF INCOME TAX AND M/S. RADHA MADHA INDUSTRIES VS. INCOME TAX OFFICER IN ITA NO.1935/AHD/2007 DECIDED BY HONBLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD. 6. KEEPING IN VIEW OF THE ARGUMENT ADVANCED BY THE LEARNED REPRESENTATIVE OF THE REVENUE AND PERUSING THE RECORD CAREFULLY, WE ARE OF THE VIEW THAT WHILE FILING THE RETURN ON 28.11.2003 THE CLAIM FROM RELIANCE INDUSTRIES LTD., INSURANCE CLAIM AND RELIANCE INFOCOM INCENTIVE WAS NOT EXAMINED BY THE ASSESSING OFFICER. THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S.80IB OF THE ACT @ 100% OF THE GROSS TOTAL INCOME. THE ASSESSEE CLAIMED THE RELIEF FROM RELIANCE INDUSTRIES LTD. TO THE TUNE OF RS.3,24,000/-, INSURANCE CLAIM TO THE TUNE OF RS.2,42,400/-, RELIANCE INFOCOM INCENTIVES TO THE TUNE OF RS.2,400/- TOTAL TO THE TUNE OF RS.5,87,800/- U/S.80IB OF THE ACT. IN VIEW OF THE ABOVE SAID LAW RELIED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT IS NOT IN DISPUTE THAT THE ASSESSEE IS LIABLE TO GET THE EXEMPTION U/S.80IB OF THE ACT ON THE INCOME DERIVED FROM INDUSTRIAL UNDERTAKING. THE INCOME DISCUSSED ABOVE CANNOT BE SAID TO BE DERIVED FROM THE INDUSTRIAL UNDERTAKING WHICH ENTITLES THE ASSESSEE TO GET THE EXEMPTION U/S.80IB OF THE ACT. IN VIEW OF THE SAID CIRCUMSTANCES AND IN VIEW OF THE ABOVE MENTIONED LAW I.E. [2009] 183 TAXMAN 349 (SC) IN CASE TITLED AS LIBERTY INDIA VS. COMMISSIONER OF INCOME TAX AND M/S. RADHA MADHA INDUSTRIES VS. INCOME TAX OFFICER IN ITA NO.1935/AHD/2007 DECIDED BY HONBLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD. WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISION U/S.147 OF THE ITA NO.6222.M.11 A.Y. 2003-04 6 ACT AND ON MERITS THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION IN QUESTION. IN VIEW OF THE SAID CIRCUMSTANCES, IT IS QUITE CLEAR THAT THE CIT(A) HAS PASSED THE ORDER JUDICIOUSLY AND CORRECTLY WHICH IS NOT REQUIRE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. HENCE THESE ISSUES ARE DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY 2017. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 6 TH JANUARY, 2017 MP / 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