ITO WD 8(2)(1), MUMBAI V. HEXAGAON NUTRITION P.LTD, MUMBAI

ITA 6720/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3490 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 27-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATYANARAYANA RAJU
• Section: 115JB; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SANJAY ARORA , A M AND SHRI AMARJIT SINGH , J M ./ I.T.A. NO. 6720/MUM/2014 ( / ASSESSMENT YEAR: 2011 - 12 ) ITO, WARD 8(2) (1), 2 ND FLOOR, ROOM NO. 216 - A, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. HEXAGAON NUTRITION PVT. LTD. 404, GLOBLE CHAMBERS, ADARSH NAGAR, ANDHERI (W), MUMBAI - 400 053 ./ ./ PAN/GIR NO. AAACH 2359 E ( / AP PELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SATYANARAYANA RAJU / RESPONDENT BY : MS. VINITA SHAH / DATE OF HEARING : 28.6.2016 / DATE OF PRONOUNCEMENT : 0 7 .7.2016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI (CIT(A) FOR SHORT) DATED 07.8.2014 , PARTLY ALLOWING THE A SSESSEES APPEAL CONTESTING ITS ASSESS MENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2011 - 12 VIDE ORDER DATED 21.2.2014 . 2. THE ISSUE ARISING IN THE INSTANT APPEAL IS THE EXIGIBILITY TO TAX UNDER BOOK PROFIT TAX U/S. 115JB OF THE ACT OF THE INCOME OF THE ASSESSEES SEZ UNIT ; THE INCOME THERE - FROM BEING OTHERWISE EXEMPT UNDER CHAPTER III OF THIS ACT. 2 ITA NO. 6720/MUM/2014 (A.Y. 2011 - 12) ITO VS. HEXAGAON N UTRITION PVT. LTD. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. THE FACTS ARE NOT IN DISPUTE . T HE ASSESSEE D E RIV ES INCOME FROM ITS , AS STATE D, S O LE U NIT LOCATED IN MEPZ - SEZ, TAMHARAM, CHENNAI. T HE REVENUE DISALLOWS THE ASSESSEES CLAIM FOR EXCLUSION OF THE PROFIT OF ITS SAID UNIT IN THE COMPUTATION OF BOOK PROFIT U/S. 115JB OF THE ACT ON THE BASIS THAT THE SAME, EXEMPT U/S. 10A , WOULD NEVERTHE LESS STAND TO BE INCLUDED THEREIN IN VIEW OF THE AMENDMENT TO CLAUSE S (F) AND (II) OF EXPLANATION 1 TO SECTION 115JB BY FINANCE ACT , 2007 W.E.F. 01.4.2008, I.E., A .Y. 2008 - 09 ONWARDS, OMITTING THE WORDS SECTION 10A OR SECTION 10 - B THE RE - FROM. THE BASIS O F THE A SSESSEES CLAIM S IS THAT ITS U NIT IS A SEZ UNIT, SO THAT PROFIT THEREOF WOULD STAND TO BE EXCLUDED FROM BOOK PROFIT TAX (MINIMUM ALTERNATE TAX MAT ) PROVISION S BY VIRTUE OF SECTION 115JB(6) , WHICH READS AS UNDER: SPECIAL PROVISION FOR PAYMENT O F TAX BY CERTAIN COMPANIES. 115JB. (6) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO THE INCOME ACCRUED OR ARISING ON OR AFTER THE 1ST DAY OF APRIL, 2005 FROM ANY BUSINESS CARRIED ON, OR SERVICES RENDERED, BY AN ENTREPRENEUR OR A DEVELOPER, IN A UNIT OR SPECIAL ECONOMIC ZONE, AS THE CA SE MAY BE. PROVIDED THAT THE PROVISIONS OF THIS SUB - SECTION SHALL CEASE TO HAVE EFFECT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2012. THE T RIBUNAL , FOL LOWING ITS DECISION IN GENESYS INTERNATIONAL CORPN. LTD. VS. ASST. CIT [2013] 55 SOT 10 (MUM), ALLOWED RELIEF TO THE ASSESSEE FOR A.Y. 2008 - 09 (IN ITA NO. 4035/MUM/2012 DATED 08.5.2015/COPY ON RECORD). THE TRIBUNAL , IN THE CASE OF GENESYS INTERNATIONAL CO RPN. LTD. (SUPRA) , AFTER ANALYZING THE RELEVANT PROVISIONS , HELD THAT EVEN THOUGH CLAUSE S (F) AND (II ) OF EXPLANATION 1 TO SECTION 115JB STAND SINCE AMENDED, I.E., W.E.F. A.Y. 2008 - 09, THE PROVISION OF SECTION 115JB(6) , BROUGHT ON STATUTE W.E.F. 01.4.2005, I.E., BY SPECIAL ECONOMIC ZONE ACT, 2005 W.E.F. 10/2/2006, SHALL PREVAIL, EXCLUDING THE INCOME O F A SEZ UNIT FROM BOOK - PROFIT TAX. THAT THE INCOME IS OTHERWISE EXEMPT U/S. 10A (OR FOR THAT MATTER SECTION 3 ITA NO. 6720/MUM/2014 (A.Y. 2011 - 12) ITO VS. HEXAGAON N UTRITION PVT. LTD. 10B) , IT OPINED, IS OF NO CONSEQUENCE. THE TRIBUNAL , IN ARRIVING AT ITS DECISION, ALSO EXAMINED THE PROVISIONS OF THE SEZ ACT, 2005, ALSO NOTING THAT THE EXCEPTION TO THE SEZ U NITS STANDS SINCE WITHDRAWN BY PROVISO TO S. 115 - JB (6) WITH EFFECT FROM ASSESSMENT YEAR COMMENCING 01 /4/2012 ONWARDS. REFERENCE IN THIS REGARD BE MADE TO PARAS 21 & 22 OF THE ORDER. NO CONTRARY DECISION BY A HIGHER COURT OR, IN FACT, EVEN BY THE TRIBUNAL, HAS BEEN BROUGHT ON RECORD BY THE REVENUE, DESPITE THE LD. DR SEEKING TIME FOR THE PUR POSE. WE, THEREFORE , A CC ORD ING DUE DEFEREN CE TO THE SAID DECISION S BY THE TRIBUNAL, DIRECT LIKEWISE , UPHOLD ING THE ASSESSEES CLAIM. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 07 , 201 6 SD/ - SD/ - ( AMARJIT SINGH ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 07 . 0 7 .201 6 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCE RNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI