M/s. N Core Cables, Daman V. The Income tax Officer, Vapi Ward-4, Nani Daman

ITA 71/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72886 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: M K PATEL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.71/AHD/2011 A.Y. 2007-08 N CORE CABLES, GALA NO.7, PLOT NO.10, PREMIER INDUSTRIAL AREA, KACHIGAM, DAMAN. PAN: AAEFN 7954N V/S. ITO, VAPI WARD-4, DR. JEEVANJI HOTEL BUILDING, DEVKA ROAD, KATHIRIA, NANI DAMAN, U.T. OF DAMAN & DIU (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J.P. JHANGID, SR.D.R. ASSESSEE(S) BY : SHRI M.K. PATEL, AR / DATE OF HEARING : 20/01/2014 / DATE OF PRONOUNCEMENT: 24/01/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF LEARNED CIT(A)-VALSAD, DATED 29.09.2010 AND THE GROUNDS RAISED ARE REPRODUCED BELOW: 01. THE ORDER OF ASSESSMENT IS CONTRARY TO THE FAC TS AND PREJUDICIAL TO THE APPELLANT. 02. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE DISALLOWANCES MADE BY THE LEARNED ASSESSIN G OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CONTRARY TO LAW AND BASED ON ERRONEOUS UNDERSTANDIN G OF THE FACTS. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN TREATING THE INCOME EARNED BY THE APPELL ANT AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 80IB. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE PROVISIONS OF SECTION 80IB ON A PLAIN READING AND LITERAL INTERPR ETATION OF THE LAW AND HENCE DESERVES TO BE DELETED. 04. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN ITA NO.71/AHD/2011 N. CORE CABLES, DAMAN VS. ITO VAPI WARD 4, NANI DAM AN A.Y. 2007- 08 - 2 - CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER OF NOT GRANTING DEDUCTION TO THE APPELLANT U/S 80IB OF THE INCOME T AX ACT. 06. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, MODIF Y OR ALTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE P ROCEEDINGS. 07. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE A LLOWED IN TOTO. 2. AT THE OUTSET, LEARNED AR, MR. M.K. PATEL HAS ST ATED BEFORE US THAT GROUNDS NO.1, 2, 6 AND 7 ARE GENERAL IN NAT URE; HENCE, NEEDS NO SPECIFIC LEGAL ADJUDICATION; HENCE NOT PRESSED. IN VIEW OF THIS STATEMENT OF LEARNED AR, THESE GROUNDS ARE HEREBY D ISMISSED. NOW WE ARE LEFT WITH GROUND NOS. 3 AND 4 ONLY WHICH ARE DECIDED HEREINBELOW. 3. WE HAVE BEEN INFORMED THAT WHILE DECIDING THE IS SUE, LEARNED CIT(A) HAS FOLLOWED A.Y. 2004-05 AND TAKEN THE DECISION IN FAVOUR OF THE REVENUE AS FOLLOWS: THIS GROUND RELATES TO THE DISALLOWANCE OF SECTION 80IB BENEFITS TO THE APPELLANT BY THE AO. ON THE BASIS OF FACTS AND CIRCUMSTANCE EXISTED IN THE A.Y. 2004-05, THE AO DISALLOWED THE DEDUCTION U/S.80IB CLAIMED BY THE APPELLANT. THE LD. CIT(A) UPHELD THE DECISIONS OF THE AO FOR THE A.Y.2004-05. THEREAFTER THE AO MADE DISA LLOWANCE FOR THE SUBSEQUENT YEARS (A.Y.2005-06 & 2006-07) WHICH WAS CONFIRMED BY THE LD. CIT(A) VIDE APPEAL NO.CIT(A)/VLS/130/07-08 FOR A.Y. 2005-06 AND APPEAL NO.CIT(A)/VLS/189/08-09 FOR A.Y.2006-07 BOTH DATED: 18.11.2009. THE FACTS AND CIRCUMSTANCES ARE IDENTIC AL IN THIS YEAR TOO. IN VIEW OF THE ABOVE, THE APPEAL UNDER THIS YEAR AL SO MEET THE SIMILAR FATE. THUS, THIS GROUND OF APPEAL IS DISMISSED. 4. NOW BEFORE US, AN ORDER FOR A.Y. 2004-05 PASSED BY ITAT C BENCH IN ASSESSEES OWN CASE BEARING ITA NO.3207/AHD/2007, DATED 12.11.2010 IS PLACED, ACCOR DING TO WHICH THE MATTER WAS RESTORED TO THE STAGE OF FIRST APPEAL IN THE FOLLOWING MANNER: WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS O F THE CASE. A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE ID. CIT(A) UPHELD THE ITA NO.71/AHD/2011 N. CORE CABLES, DAMAN VS. ITO VAPI WARD 4, NANI DAM AN A.Y. 2007- 08 - 3 - FINDINGS OF THE AO SINCE THE ASSESSEE DID NOT FURNI SH ANY DETAILS OF DIESEL PURCHASED FOR RUNNING GENERATOR OR ANY OTHER EVIDEN CE THAT A PORTION OF GOODS WERE MANUFACTURED IN THE ASSESSEE'S OWN FACIL ITY NOR ANY EVIDENCE THAT GOODS MANUFACTURED IN THE FACILITY OF M/S NAGARWALA CHEMICAL INDUSTRIES WERE UNDER THE SUPERVISION OF THE PARTNER USING HIS TECHNICAL KNOWHOW. THE LD. AR APPEARING BEFORE US NOW RAISED MODIFIED AND ADDITIONAL GROUNDS, CONTENDING THAT PVC/TPR INSULATED WIRES AND CABLES OF THE VALUE OF RS.19,12,835/- WERE PRODUCED IN THE INDUSTRIAL UNDE RTAKING OF THE ASSESSEE USING THEIR OWN MACHINERIES AND POWER GENERATED FRO M DIESEL GENERATOR AND THAT EXPENSES FOR DIESEL WERE DEBITED UNDER THE HEA D REPAIR AND MAINTENANCE. IT WAS POINTED OUT THAT GOODS MANUFACT URED THROUGH JOB WORK HAVE INDEED BEEN SOLD DURING THE YEAR AND NOTHING W AS AVAILABLE IN THE CLOSING STOCK. EVEN THOUGH THE AO AND THE ID. CIT(A ) HAVE CONCLUDED THAT THE ASSESSEE DID NOT UNDERTAKE ANY MANUFACTURING OR PRODUCTION ACTIVITIES IN ITS INDUSTRIAL UNDERTAKING, THEY DID NOT DOUBT THE PURCHASE OF RAW MATERIAL AND NOWHERE CONCLUDED THAT THE ENTIRE RAW MATERIAL PURCHASED BY THE ASSESSEE WAS CONSUMED IN JOB WORK NOR EVEN DOUBTED THE WAGES DEBITED TO THE ACCOUNTS. RATHER, THE AO HAS ALLOWED EVEN DEPRE CIATION ON VARIOUS ASSETS INCLUDING PLANT AND MACHINERY WHILE DETERMIN ING TOTAL INCOME AND DID NOT DOUBT THE GENUINENESS OF PURCHASE OF RAW MATERI AL OR SALE OF GOODS, CLAIMED TO HAVE BEEN MANUFACTURED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN COMPLETE FACTS ARE NOT EVIDENT FROM THE RELEVANT ORDERS WHILE THE LEARNED CIT(A) HAVE NOT RECORDED ANY FINDINGS O N THE SPECIFIC ISSUES NOW RAISED IN THE ADDITIONAL GROUNDS RAISED BEFORE US, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER OF THE ID. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE CLAIM FOR DEDUC TION U/S 801B OF THE ACT AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF OUR A FORESAID OBSERVATIONS AND OF COURSE, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF HON'BLE MP HIGH COURT IN C1T VS. TOLLARAM HASSOMAL.298 ITR 22(MP).NEEDLESS TO SAY TH AT THE ID. CIT(A) MAY HAVE ANY INDEPENDENT INQUIRIES MADE IN ORDER TO ASC ERTAIN THE CORRECT FACTS, IF HE FEELS NECESSARY. WITH THESE OBSERVATIONS, GRO UND NO.1 IN THE APPEAL IS DISPOSED OF. 5. WE HAVE FURTHER BEEN INFORMED THAT FOR A.YS.2005 -06 AND 2006-07 AGAIN THE ITAT C BENCH AHMEDABAD IN ASSES SEES OWN CASE IN A BUNCH OF CASES BEARING ITA NO.1487, 1364, 1488/AHD/2010 & 225/AHD/2013, VIDE ORDER DATED 31.1 0.2013 HAS RESTORED THE MATTER BY FOLLOWING AN EARLIER ORDER O F THE TRIBUNAL AS FOLLOWS: 4. GROUND NOS.3 AND 4 ARE AGAINST THE DISALLOWANCE OF CLAIM MADE U/S.80IB OF THE ACT. LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT IN RESPECT OF THE A.Y. 2004-05, THE MATTER RAISED UPTO THE STAGE OF THE TRIBUNAL AND THE HONBLE TRIBUNAL IN ITA NO.3207/AH D/2007 HAS RESTORED THIS ISSUE TO THE FILE OF LD. CIT(A). IT I S SUBMITTED BY THE LD. ITA NO.71/AHD/2011 N. CORE CABLES, DAMAN VS. ITO VAPI WARD 4, NANI DAM AN A.Y. 2007- 08 - 4 - COUNSEL FOR THE ASSESSEE THAT LD. CIT(A) HAS NOT DE CIDED THIS ISSUE. THIS FACT IS NOT CONTROVERTED BY THE LD. SR.D.R. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS ISS UED BY THE AUTHORITIES BELOW: WE FIND THAT THE HONBLE CO-ORDINATE BENCH (ITAT C BENCH AHMEDABAD) IN ITA NO.3207/AHD/2007 DATED 12.11.2010 IN ASSESEES OWN CASE VIDE PARAGRAPH NO.6 OF ITS ORDER HAS HELD AS UNDER: .. 5.1 SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE, THEREFORE THIS ISSUE IN THIS YEAR ALS O IS RESTORED TO THE FILE OF THE LD. CIT(A) TO DECIDE IT AFRESH AFTER GIVING SUFFICIENT OPPORTUNITIES TO THE CONCERNED PARTIES. GROUND NOS.3 AND 4 ARE AL LOWED BUT FOR STATISTICAL PURPOSES ONLY. 6. MOREOVER, LEARNED AR HAS ALSO STATED BEFORE US T HAT THE PRESENT POSITION IS THAT THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S.80IB IS STILL PENDING BEFORE LEARNED CIT(A). SI NCE, IN THE PAST THE MATTER HAS ALREADY BEEN RESTORED FOR LEGAL ADJU DICATION AT THE STAGE OF THE FIRST APPEAL AND THAT THE MATTER IS ST ILL PENDING, THEREFORE, IT IS PROPER FOR US TO RESTORE THIS VERY ISSUE FOR THE YEAR UNDER CONSIDERATION, AS WELL, BACK TO THE STAGE OF LEARNED CIT(A) TO BE DECIDED ALONG WITH OTHER YEARS. RESULTANTLY, THESE GROUNDS MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPO SE ONLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED THAT TOO FOR STATISTICAL PURPOSE ONLY. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED /01/2014 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY TRUE COPY TRUE COPY TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT ITA NO.71/AHD/2011 N. CORE CABLES, DAMAN VS. ITO VAPI WARD 4, NANI DAM AN A.Y. 2007- 08 - 5 - 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD