ACIT CC 33, MUMBAI V. UMESH PENCILS PROCESSORS P. LTD, MUMBAI

ITA 6862/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9033 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATH KARKITALLI
• Assessee Lawyers: MANPREET KAUR PADAM
• Keywords: Tax effect
• Section: 260A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F BENCH BEFORE SHRI I.P.BANSAL(JUDICIAL MEMBER) AND SHRI B.RAMAKOTAIAH (ACCOUNTANT MEMBER) ITA NO.6862/MUM/2011 ASSESSMENT YEAR: 2005-06 ACIT 2(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. M/S. UMESH PENCILS PROCESSORS PVT LTD., 309, HIMALAYA HOUSE, 79, PALTON ROAD, MUMBAI-001. PA NO.AAACU 0701 F (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI MANJUNATH KARKITALLI RESPONDENT BY: MANPREET KAUR PADAM DATE OF HEARING: 10.9.2012 DATE OF PRONOUNCEMENT: 14 .9.2012 ORDER PER I.P.BANSAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL. IT IS DIREC TED AGAINST ORDER DATED 26.7.2011 OF LD CIT(A) FOR ASSESSMENT YEAR 2005-06 . GROUNDS READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD CIT(A) ERRED ALLOWING THE CLAIM OF DEDUCTION U/S. 8 0IA & 80IB BASED ON THE DECISION OF HONBLE ITAT I BENCH BOMBAY IN TH E CASE OF M/S. HINDUSTAN PENCIL LTD. 2. ON THE FACTS AND IN THE CIRCUSMTACNES OF THE CAS E AND IN LAW, LD CIT(A) FAILED TO APPRECIATE THAT THE JUDGMENT OF M/S. HIND USTAN PENCIL LTD. IS BASED ON THE DECISION OF TRIBUNAL ON M/S. PATEL STA TIONERS PVT LTD., & M/S KIRTI STATIOENRS PVT LTD., WHERE BOTH HAVE BEEN C HALLENGED BY THE REVENUE BEFORE THE HONBLE HIGH COURT. APPEAL SHOU LD ALSO BE FILED IN THE LINE WITH THE PRECEDENCE OF OTHER ASSESSMENT YEARS IN THE SAME GROUND. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING PASTE IN SILVASSA UNIT AND UNPOLISHED PENCILS AT POLLACHI UNIT. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSESSEE HAD CLAIMED DEDU CTION OF RS.1,04,943 U/S. 80IA OF THE ACT IN RESPECT OF ITS SILVASA UNIT AND RS.14,59 ,882 U/S. 80IB OF THE ACT IN RESPECT OF ITA NO.6862/MUM/2011 ASSESSMENT YEAR: 2005-06 2 ITS POLLACHI UNIT. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT ASSESSEE DID NOT SATISFY THE CONDITIONS LAID DOWN I N SECTIONS 80IA & 80IB OF THE ACT. ON APPEAL FILED BY ASSESSEE, LD CIT(A) FOLLOWING THE ORDERS OF LD CIT(A) FOR ASSESSMENT YEARS 2000-2001 AND 2001-02 WITH RESPECT TO SILVASA UNIT AND FOR ASSESSMENT YEAR 2006-07 WITH RESPECT TO POLLACHI UNIT DIRECTED THE AO TO ALLOW DEDUCTION U/S. 80IA AND 80IB OF THE ACT AFTER VERIFYING THE CONDITIONS REGA RDING THE NUMBER OF WORKERS EMPLOYED. BEING AGGRIEVED, DEPARTMENT IS IN APPEA L BEFORE US. 3. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR NO TICE THAT THE ISSUE UNDER CONSIDERATION IS COVERED BY THE DECISION DATED 4.7. 2012 OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 1998-99, 2000-2001, 2001-02, 2003-04, 2006-07 AND 2007-08 IN I.T.A. NOS.4775 TO 4780/M/20011, COPY PLACED ON RECORD. 4. WE HAVE HEARD BOTH THE SIDES AND HAVE PERUSED TH E MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BE FORE THE TRIBUNAL IN THE APPEALS FILED BY THE DEPARTMENT AGAINST THE ORDERS OF LD CIT(A) FOR ASSESSMENT YEARS 1998-99, 2000- 2001, 2001-02, 2006-07 AND 2007-08 AND THE TRIBUNA L VIDE PARAS 2 TO 8 OF ITS ORDER REJECTED THE APPEALS FILED BY DEPARTMENT. A COPY OF THE ORDER HAS BEEN GIVEN TO LD D.R. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS UNDER: 2. THE GROUNDS OF APPEAL TAKEN IN ALL THE SIX APPE ALS BY THE DEPARTMENT ARE COMMON, WHICH ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IA & 80IB BASED ON THE DECISION OF HONBLE ITAT I BENCH, BOMBAY I N THE CASE OF M/S. HINDUSTAN PENCIL LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THAT THE JUDGMENT OF M/ S HINDUSTAN PENCIL LTD. IS BASED ON THE DECISION OF TRIBUNAL ON M/S PATEL S TATIONERS P. LTD. & M/S KIRTI STATIONERS P. LTD. WHERE BOTH HAVE BEEN CHALL ENGED BY THE REVENUE BEFORE THE HONBLE HIGH COURT. APPEAL SHOULD ALSO B E FILED IN LINE WITH THE PRECEDENCE OF OTHER ASSESSMENT YEARS IN THE SAME GR OUND. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING ASSESSEES CLAIM OF 80I A DEDUCTION IN RESPECT OF UMERGAON UNIT WHEREIN IT WAS CONCLUSIVELY PROVED THAT ALL THE CONDITIONS LAID DOWN IN SEC. 80IA(2) WERE NOT FULLY ADHERED TO. ITA NO.6862/MUM/2011 ASSESSMENT YEAR: 2005-06 3 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF CIT(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 3. AT THE TIME OF HEARING, THE AUTHORISED REPRESENT ATIVE FOR THE ASSESSEE MADE A PRELIMINARY OBJECTION ON THE MAINTAINABILITY OF FOU R OUT OF THE SIX APPEALS FILED BY THE DEPARTMENT, ON ACCOUNT OF TAX EFFECT FOR THE PU RPOSES OF THE APPEALS FILED BEFORE THE ITAT. THE AR PLACED A CHART WITH THE WOR KING OF THE TAX EFFECT IN EACH OF THE SIX APPEALS FILED BY THE DEPARTMENT AND POIN TED OUT THAT IN ASSESSMENT YEARS 1998-99, 2000-01 2001-02 AND 2003-04 THE TAX EFFECT IS LESS THEN RS. 3,00,000/- AS PER THE INSTRUCTION NO. 3/2011 DATED 09-02-2011 READ WITH INSTRUCTION NO. 5/2008 DATED 15-05-2008. THUS ACCOR DING TO THE CHART, APPEALS FILED BY THE DEPARTMENT IN ASSESSMENT YEARS 1998-99 , 2000- 01, 2001-02 AND 2003-04 ARE NON MAINTAINABLE, FALLING WITHIN THE PU RVIEW OF THE AFORESAID INSTRUCTIONS AND ASSESSMENT YEARS 2006-07 AND 2007- 08 ARE NOT IN THE PURVIEW OF THE SAID INSTRUCTIONS. 4. THE AR FURTHER POINTED OUT THAT THE BASIS OF FIL ING OF THE PRESENT APPEALS AND KEEPING THE ISSUE ALIVE IN ALL THE CASES OF THE ASS ESSEE, WAS THAT THE DEPARTMENT HAD FILED APPEALS BEFORE THE HON'BLE BOMBAY HIGH CO URT AGAINST THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF PATEL STATIONE RS PVT. LTD., WHICH WAS FOLLOWED BY THE CIT(A) IN ALLOWING RELIEF TO THE AS SESSEE. THE AR POINTED OUT THAT VIDE ORDER DATED 21-02- 2011, THE HON'BLE BOMBAY HI GH COURT HAS DISMISSED THE APPEAL FILED BY THE DEPARTMENT IN THE CASE OF PATEL STATIONERS (P) LTD., MEANING THEREBY THAT THE ORDER OF THE ITAT HAS BECOME FINAL . 5. THE AR, THEREFORE, SUBMITTED THAT UNDER BOTH CIR CUMSTANCES, THE APPEALS FILED BY THE DEPARTMENT NEED TO BE DISMISSED. 6. THE DR RELIED ON THE ORDER OF THE AO. 7. WE HAVE HEARD THE AR, BOTH ON THE PRELIMINARY OB JECTIONS AND THE MERITS AND HAVE ALSO PERUSED THE CASE OF PATEL STATIONERS (P) LTD. WE FIND MERIT ON BOTH THE GROUNDS AND WE AGREE WITH THE AR THAT SO FAR AS ASS ESSMENT YEARS 1998-99, 2000-01, 2001-02 AND 2003-04 ARE CONCERNED, THE DEP ARTMENTS APPEALS FAIL UNDER BOTH THE CIRCUMSTANCES, I.E. MAINTAINABILITY AND DISMISSING OF THE APPEALS BY THE HONBLE BOMBAY HIGH COURT U/S 260A FILED AGA INST THE BASE ORDER OF PATEL STATIONERS (P) LTD. AND SO FAR AS ASSESSMENT YEARS 2006-07 AND 2007-08 ARE CONCERNED, THE APPEALS FAIL ON ACCOUNT OF DISMISSIN G OF THE APPEAL U/S 260A FILED BY THE DEPARTMENT IN THE CASE OF PATEL STATIONERS ( P) LTD. 8. IN THE RESULT, ALL SIX APPEALS FILED BY THE DEPA RTMENT ARE DISMISSED. 5. IN THIS VIEW OF THE ABOVE SITUATION AND RESPECTF ULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL, IN WHICH ONE OF US ( ACCOUNT ANT MEMBER) IS A PARTY, WE FIND NO INFIRMITY IN THE ORDER OF LD CIT(A). HENCE, WE UPH OLD THE SAME. ITA NO.6862/MUM/2011 ASSESSMENT YEAR: 2005-06 4 6. IN THE RESULT, APPEAL FILED BY DEPARTMENT IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER, 2012 SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (I.P.BANSAL) JUDICIAL MEMBER MUMBAI, DATED 14 TH SEPTEMBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),6, MUMBAI 4. COMMISSIONER OF INCOME TAX, 2 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH F MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI