DCIT 4(1), MUMBAI V. ART CHATONS P.LTD, MUMBAI

ITA 658/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75229 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 01-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K SHIVRAM
• Assessee Lawyers: M L PERUMAL
• Keywords: Difference of opinion; Change of opinion
• Section: 147; 148; 12; 143(3); 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND N.K.BILLAIYA (AM ) . . , . . , ./I.T.A.NO.658/MUM/2012 ( / ASSESSMENT YEAR: 2005-06) DY. COMMISSIONER OF INCOME TAX -4(1), ROOM NO.640, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S KRUPA CHATONS MFG. CO. PVT. LTD., 5/32, 2 ND PANJARPOLE LANE, C.P.TANK ROAD, MUMBAI-400004 ./ ./PAN/GIR NO. : AAAC16011L ( ' / APPELLANT) .. ( ( ' / RESPONDENT) CROSS OBJECTION/ ( NO.120/MUM/2013 IN ./I.T.A. NO.658/MUM/2012 ( / ASSESSMENT YEAR : 2005-06) ART CHATONS P.LTD (NOW MERGED WITH M/S KRUPA CHATONS MFG. CO. PVT. LTD.), 5/32, 2 ND PANJARPOLE LANE, C.P.TANK ROAD, MUMBAI-400004 / VS. DY. COMMISSIONER OF INCOME TAX - 4(1), ROOM NO.640, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ./ ./PAN/GIR NO. : AAAC16011L ' / APPELLANT BY : SHRI M.L.PERUMAL ( ' * /REVENUE BY SHRI K SHIVRAM * - / DATE OF HEARING : 1.1.2014 * - /DATE OF PRONOUNCEMENT : 1.1.2014 / O R D E R PER B.R.MITTAL, JM THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSME NT YEAR 2005-06 AGAINST ORDER OF LD. CIT(A) DATED 2.11.2011 ON FOLLOWING G ROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE EXCESS DEDUCTION U/S 8 0IB OF RS.37,68,576/- IN RESPECT OF UNIT I 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE A ND THAT OF THE AO BE RESTORED 2. THE ASSESSEE HAS ALSO FILED CROSS-OBJECTION THER EIN BY TAKING FOLLOWING GROUNDS : I.T.A.NO.658/MUM/2012 CROSS OBJECTION NO.120/MUM/2013 2 1. THE REASSESSMENT U/S 148, IS BAD IN LAW, A ND LIABLE TO BE QUASHED. 2. THE LD. CIT(A) ERRED IN UPHOLDING THE RE-AS SESSMENT U/S 148 WITHOUT APPRECIATING THE FACT THAT, IN THE EARLIER ASSESSMENT PROCEEDINGS ALL THE DETAILS WERE FILED, AND THE LD. AO ALLOWED THE DEDUCTION U/S 80IB VIDE ASSESSMENT U/S 143(3) AFTER DUE APPLICATION OF MIND. HENCE REOPENING IS NOTHING BUT CHANGE OF OPINION AND HENC E LIABLE TO BE QUASHED. 3. FACTS GIVING RISE TO THIS APPEAL ARE THAT THE AS SESSEE FILED RETURN OF INCOME ON 28.1.2005 DECLARING TOTAL INCOME OF RS.3,38,63,10 4/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, 1961. (THE ACT) ON 31.12.2 007 DETERMINING THE TOTAL INCOME AT RS.3,93,38,810/-. SUBSEQUENTLY, AO OBSERVED THAT TH E ASSESSEE CLAIMED EXCESSIVE DEDUCTION U/S 80IB TO THE TUNE OF RS.37,68,576/-. T HEREFORE, AO INITIATED PROCEEDINGS U/S 147 AND 148 OF THE ACT AND REOPENED THE ASSESS MENT. THE ASSESSEE DID NOT COMPLY WITH THE NOTICES ISSUED BY AO ON THE GROUND THAT THE POINT WAS LOOKED INTO WHILE FINALIZING THE ORIGINAL ASSESSMENT AND HENC E AGAIN RE-OPENING OF THE ASSESSMENT WILL AMOUNT TO CHANGE OF OPINION. THE AO DID NOT A CCEPT THE SUBMISSIONS OF THE ASSESSEE FOR THE REASONS GIVEN IN ASSESSMENT ORDER AND ADDED AN AMOUNT OF RS.37,68,576/- TO THE TOTAL INCOME OF ASSESSEE. BEI NG AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESS EE REITERATED THE CONTENTIONS AS MENTIONED IN THE ASSESSMENT ORDER AND ALSO RELIED O N THE DECISIONS IN THE CASES OF CIT V/S CANARA WORKSHOP (P) LTD (1986) 161 ITR 320 (SC) , HINDUSTAN UNILEVER LTD V/S DCIT (325 ITR 102) (MUM) AND MEERA COTTON AND SYNTHETIC MILLS (P) LTD V/S CIT(2009) 29 SOT 177 (MUM). THE LD. CIT(A) AFTER CONSIDERING TH E CONTENTIONS OF THE ASSESSEE AND DECISIONS RELIED UPON BY THE ASSESSEE, OBSERVED AND HELD THAT THE AO HAS COMPLETELY MISINTERPRETED THE RELEVANT PROVISIONS WHEN HE HELD THAT THAT THE LOSS SUFFERED BY THE ASSESSEE IN THE NON-ELIGIBLE UNIT II BE REDUCED FR OM THE PROFIT OF THE ELIGIBLE UNIT-I FOR GRANTING THE DEDUCTION U/S 80IB(3) EVEN WHEN THE AS SESSEE HAD A POSITIVE GROSS TOTAL INCOME OF RS.5,38,23,793/- BEFORE CLAIMING DEDUCTIO N U/S 80IB AGAINST THE PROFIT OF UNIT-I. ACCORDINGLY, THE LD. CIT(A) ALLOWED DEDUCT ION AT 30% U/S 80IB(3) ON THE PROFIT OF RS.6,62,35,625/-. AGGRIEVED BY THE ORDER OF LD. CIT (A), THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. LD. DR NARRATED THE FACTS OF THE CASE SAVE AND E XCEPT RELIED ON THE ORDER OF AO. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE I SSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN I.T.A.NO.658/MUM/2012 CROSS OBJECTION NO.120/MUM/2013 3 UNILEVER LTD (SUPRA) AND HONBLE APEX COURT IN TH E CASE OF SYNCO INDUSTRIES LTD. V/S ASSESSING OFFICER [2008] 299 ITR 444 (SC). 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. RE PRESENTATIVES OF THE PARTIES, PERUSED THE ORDERS OF AUTHORITIES BELOW INCLUDING T HE CASE LAW RELIED UPON BY THE ASSESSEE. WE FIND THAT THE ISSUE RAISED IN THIS APP EAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF HINDUSTAN UNILEVER LTD (SUPRA) AS WELL AS THE DECISION OF HO NBLE APEX COURT IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA). THE LD. DR COULD NOT BRI NG ANY DECISION OR MATERIAL TO CONTRADICT THE ABOVE FACTS. IN VIEW OF THIS POSITI ON, WE ARE OF THE CONSIDERED VIEW THAT THE FINDING OF THE LD. CIT(A) IS JUSTIFIED. ACCORD INGLY, WE CONFIRM THE ORDER OF LD. CIT(A) BY DISMISSING THE APPEAL FILED BY REVENUE. CROSS OBJECTION 7. AT THE TIME OF HEARING, LD. AR DID NOT PRESS CR OSS-OBJECTION FILED BY THE ASSESSEE. THEREFORE, WE DISMISS THE CROSS-OBJECTIO N OF THE ASSESSEE AS NOT PRESSED FOR. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT AS WELL AS CROSS-OBJECTION FILED BY ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF JANUARY, 2014 * 1 2 1 ST DAY OF JANUARY, 2014 * SD SD ( . . /N.K.BILLAIYA ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. ( ' / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. ? (A , - A , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - A , /ITAT, MUMBAI