ITO, Jaipur V. M/S B B MODES, Jaipur

ITA 700/JPR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62012 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 28-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: U C JAIN
• Keywords: Benefit of exemption

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : B JAIPUR. BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NO. 700/JP/2011 ASSTT. YEAR : 2008-09 PAN : AABFB 6583 G THE ITO VS. M/S. B.B. MODES WARD- 2(3) 1/3, HOTHROI MARKET JAIPUR R AJMER ROAD, JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD JOHRI (ADJ. APPLICAT ION REJECTED) RESPONDENT BY SHRI U.C. JAIN DATE OF HEARING : 26.04.2012 DATE OF PRONOUNCEMENT : 11.05.2012 ORDER DATE OF ORDER : 11/05/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) RELATING TO ASSESSMENT YEAR 2008-09 WHEREIN THE DEPARTMENT IS A GITATED IN ALLOWING DEDUCTION U/S 10BA OF THE ACT. 2.1 THE FACTS OF THE CASE ARE THAT THE RETURN OF IN COME DECLARING NIL INCOME IN THIS CASE WAS FILED ON 23-08-2008 ALONGWITH TAX AUDIT RE PORT IN FORM NO. 3CB AND 3CD. THE CASE WAS SELECTED FOR SCRUTINY AS PER BOARDS GUIDE LINES. FURTHER, THE ASSESSEE DECLARED TOTAL INCOME OF RS. 28,00,880/- AND CLAIMED EXEMPTI ON U/S 10BA @ 100%. THE ASSESSEE IS ENGAGED IN MANUFACTURING AND EXPORT OF HANDICRAF T ITEMS MADE OF WOOD, IRON, BRASS AND MARBLE. THE ASSESSEE CLAIMED DEDUCTION U/S 10BA ON ITS EXPORT INCOME. THE AO REJECTED THE CLAIM OF DEDUCTION U/S 10BA ON THE FOLLOWING GR OUNDS:- 2 (A) THAT THE ITEMS WERE MANUFACTURED BY USE OF POWER. (B) THAT THE AR FAILED TO PROVIDE DETAILS/ EVIDENCE ABO UT THE FACT WHICH PROVED THAT VARIOUS PROCEDURES OF MANUFACTUR ING AND PRODUCTION WERE CARRIED OUT BY THE WORKERS IN THE F ACTORY WHICH RESULTED INTO PRODUCING A NEW MARKETABLE COMMODITIE S. 2.2 FOLLOWING SUBMISSIONS WERE MADE BEFORE THE LD. CIT(A):- THE AR OF THE ASSESSEE SHRI RAJENDER JAIN ATTENDE D AND FILED HIS SUBMISSION. CONTENTION OF THE AR IS THAT THE ITEM A RE MAN MADE. THE USE OF MACHINERY IS ONLY LIKE A TOOL OR HAND TOOL USED FOR CUTTING ETC. THE REAL MANUFACTURING IS BY LOCAL ARTISANS ONLY. THE RAW WO OD IS PURCHASED IN LARGE QUANTITY. THE ARTISANS/ SUPPLIERS MANUFACTURE D THE GOODS UNDER EFFECTIVE SUPERVISION AND CONTROL OF THE ASSESSEE. THE APPELLANTS CASE IS SQUARELY COVERED BY THE DECISION OF HON'BLE ITAT J AIPUR BENCH AS WELL AS JODHPUR BENCH. THE HON'BLE ITAT JAIPUR IN THE CASE OF G.P. SINGHAL VS. ITO 40 TW 175 (JP) HAS OBSERVED THAT STRESS OF LEGI SLATURE HAS NOT BEEN ON MANUFACTURING OR PRODUCTION BUT THE ARTICLES SHOULD BE WOODEN HANDICRAFT ARTICLE HAVING ARTISTIC VALUE AND THE PROFIT IS DER IVED FROM THE EXPORT THEREOF. THE ULTIMATE PRODUCT NO MORE REMAINS MERE FURNITURE. REGARDING USE OF MACHINERY, THE TRIBUNAL HAS OBSERVED THAT MA CHINE WORK IS CONFINED TO SEASONING OF WOODS. THE HON'BLE ITAT JA IPUR BENCH IN THE CASE OF MANGALAM ARTS 120 TTJ 198 HAS HELD THAT PRO VISION IN TAXING STATUTE GRANTING INCENTIVES FOR PROMOTING, GROWTH A ND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY. FINALLY, IT WAS SUBMITTED T HAT IN THE IMMEDIATELY PRECEDING YEAR I.E. 2005-06, THE HON'BLE ITAT JAIP UR BENCH HAD ALLOWED BENEFIT OF EXEMPTION U/S 10BA TO THE APPELLANT VIDE THEIR ORDER DATED 29- 05-2009. THE FACT OF THE CASE FOR THE YEAR UNDER C ONSIDERATION AS WELL AS IN EARLIER ASSESSMENT YEARS ARE SAME AND THERE IS N O DIFFERENCE EITHER IN SYSTEM OF ACCOUNTING OR THE MODUS OPERANDI IN CARRY ING ON THE BUSINESS. THE ASSESSEE DISALLOWANCE ON THE CLAIM IS CONTRARY TO THE PRINCIPLES OF CONSISTENCY WHICH HAS BEEN WELL RECOGNIZED IN THE V ARIOUS CASES. 3 2.3 AFTER CONSIDERING THE SUBMISSIONS, THE LD. CIT( A) FOUND THAT THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE ASS ESSEE ITSELF WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2005-06 WHERE SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. FURTHER ONE MORE DECISION OF THE TRIBUNAL WAS FOUND ON THE SAME IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. ACCORDINGLY, HE DIREC TED THE AO TO ALLOW DEDUCTION U/S 10BA OF THE ACT. 2.4 NOW THE DEPARTMENT IS IN APPEAL BEFORE US. 2.5 THE LD. DR PLACED RELIANCE ON THE ORDER OF THE AO. 2.6 ON THE OTHER HAND, THE LD. AR PLACED RELIANCE O N THE ORDER OF THE LD. CIT(A). THE COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF TH E ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2007-08 DECIDED IN ITA NO.621/JP/2010 DATED 13-01-2 011 AND THE ORDER OF THE TRIBUNAL FOR THE ASSESSEE 2005-06 WAS ALSO FILED. 2.7 AFTER CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AND THE ORDERS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF, WE FOU ND THAT THE TRIBUNAL HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2005- 06. THE COPY OF THE TRIBUNAL ORDER FOR THE ASSESSME NT YEAR 2005-06 IS PLACED ON RECORD AT PAGES 24 TO 28 OF THE ASSESSEE'S PAPER BOOK. THE FI NDING OF THE TRIBUNAL HAS BEEN GIVEN AT PARA 6 OF ITS ORDER. WE FURTHER NOTED THAT ON THE S IMILAR FACTS IN THE CASE OF THE CIT VS. ARTS & CRAFTS EXPORTS, 66 DTR 85, THE HON'BLE BOMB AY HIGH COURT HAS ALLOWED THE DEDUCTION U/S 10BA OF THE ACT. WE FURTHER NOTED THA T THE LD. CIT(A) HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE OR DER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2005-06 WHERE ON SIMILAR FACTS THE DEDUCTION U /S 10BA WAS REFUSED BY THE AO. SINCE THE ISSUE IS COVERED BY THE DECISION OF THE T RIBUNAL IN THE CASE OF THE ASSESSEE ITSELF, THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FIN DINGS OF THE LD. CIT(A) WHO HAS GIVEN 4 THE FINDING IN CONSONANCE WITH THE FINDING OF THE T RIBUNAL FOR THE ASSESSMENT YEAR 2005- 06. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CI T(A). 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11-0 5-2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, *MISHRA COPY FORWARDED TO :- THE ITO , WARD- 2 (3), JAIPUR M/S. B.B. MODES, THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 700/JP/2011) BY ORDER, AR ITAT JAIPUR.