ACIT 14(1), MUMBAI V. TRIBHUVANDAS BHIMJI ZAVERI, MUMBAI

ITA 6523/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62297 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Assessee Lawyers: K M MODI
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI P.M. JAGTAP (ACCOUNTANT MEMBER) AND SHRI VIVEK VARMA (JUDICIAL MEMBER) ITA NO. 6523/MUM/2010 ASSESSMENT YEAR-2007-08 THE ACIT-14(1), 202, 2 ND FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021 VS. M/S. TRIBHOVANDAS BHIMJI ZAVERI, 241/243, ZAVERI BAZAR, MUMBAI-400 002 PAN-AAAFT 0950A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI B. JAYA KUMAR RESPONDENT BY: SHRI K.M. MODI DATE OF HEARING : 04.4.2012 DATE OF PRONOUNCEMENT:16.4.2012 O R D E R PER VIVEK VARMA, JM : THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2007-08 AGAINST ORDER OF CIT(A) 25, DT. 25.6.2010. 2. THE ONLY EFFECTIVE GROUND IN THE GROUNDS OF APPE AL IS WITH REGARD TO DISALLOWANCE OF DEDUCTION U/S. 80IB OF I.T. ACT. 3. IN THE ASSESSMENT PROCEEDINGS, THE AO HAD MAINLY RELIED ON THE DETAILED REASONING GIVEN IN THE FINDINGS ARRIVED AT BY THE AO IN ASSESSMENT YEAR 2006-07, WHEREIN THE AO TRIED TO DISTINGUISH T HE CASE OF ASSESSEE HOLDING THAT THERE IS NO MANUFACTURING ACTIVITY OR WORKERS IN THE HYDERABAD BRANCH FOR MANUFACTURE OF JEWELLERY. THE AO OBSERVE D THAT EVEN AT THE HEAD OFFICE AT MUMBAI, THERE IS NO MANUFACTURING ACTIVIT Y ON ITS OWN BUT ITS GETS JEWELLERY MADE BY A LARGE NUMBER OF KARIGARS TO WHO M THE DESIGNS ARE PROVIDED BY THE ASSESSEE AND THESE KARIGARS MAKE TH E JEWELLERY AT THEIR OWN PREMISES. FINALLY THE AO OBSERVES THAT EVEN IN TAX AUDIT REPORT IN FORM NO. ITA NO. 6523/M/2010 2 3CD, THE NATURE OF BUSINESS DOES NOT MENTION MANUFA CTURING NAD TRADING BUT IT ONLY MENTIONS JEWELLERS. THE AO FINALLY HOLDS TH AT SINCE THE FACTS AND LEGAL POSITION FOR THIS ASSESSMENT YEAR REMAINS THE SAME AS IN THE EARLIER ASSESSMENT YEARS, AS ALSO THE SUBMISSIONS MADE BY T HE ASSESSEE, RELIANCE IS PLACED ON THE FINDS GIVEN IN THE ORDER FOR AY 2006- 07 IN ADDITIONS TO THE OBSERVATIONS MADE ABOVE. THE APPEAL OF THE DEPARTME NT FOR A.Y.S 2002-03 TO 2005-06 ARE ALSO PENDING BEFORE THE HONBLE HIGH CO URT OR ITAT AS THE CASE MAY BE. IN VIEW OF ALL THE ABOVE DISCUSSION, THE DE DUCTION CLAIMED U/S 80IB OF RS. 2,02,54,435 BY THE ASSESSEE IS HEREBY DISALL OWED. 4. THE ASSESSEE, NOT SATISFIED BY THE FINDS OF T HE AO, APPROACHED THE CIT(A), WHO, FOLLOWED HIS OWN ORDER IN ASSESSMENT Y EAR 2005-06 AND REPRODUCED THE RELEVANT PORTION OF THE ORDER IN PAR A 6, IN THE IMPUGNED ORDER AND DELETED THE DISALLOWANCE. 5. THE DEPARTMENT IS NOW IN APPEAL AGAINST T HE FINDINGS OF THE CIT(A). 6. WE HAVE GONE THROUGH THE FACTS AND THE ORDER S OF THE TWO REVENUE AUTHORITIES. THE FACTS SEEN FROM THE ORDER OF CIT(A ) AND THE SYNOPSIS GIVEN BY AR, IT IS SEEN THAT THE MATTER IS COVERED IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2006-07 WHEREIN DEPARTMENTAL APPEAL , ITA NO. 6447/MUM/2009, BEFORE H BENCH WAS DISMISSED VIDE ORDER DT. 24.6.2011, WHEREIN THE HONBLE CO-ORDINATE BENCH ACCEPTED THE VIEW TAKEN BY THE CIT(A). 7. IT IS SEEN FROM THE SYNOPSIS THAT HONBLE ITA T HAD ALREADY BEEN DISMISSED THE DEPARTMENTAL APPEALS FOR ASSESSMENT Y EARS 2002-03 TO 2006-07 THROUGH VARIOUS ORDERS. IT IS FURTHER SEEN THAT FOR ASSESSMENT YEARS 2002-03 TO 2004-05, THE DEPARTMENT HAD APPROACHED THE HONB LE BOMBAY HIGH COURT ON THIS ISSUE WHERE HONBLE JURISDICTIONAL HIGH COU RT HAVE DISMISSED THE DEPARTMENTAL APPEALS. IT IS FURTHER SEEN THAT DEDUC TION HAS BEEN ALLOWED BY AO IN THE SUBSEQUENT YEARS I.E. 2008-09 AND 2009-10 . ITA NO. 6523/M/2010 3 8. IN VIEW OF ALL THESE FACTS, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED COURT ON THIS 16 TH DAY OF APRIL, 2012 SD/- SD/- (P.M. JAGTAP) (VIVEK VARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 16 TH APRIL, 2012 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI