DCIT, Jaipur V. SHRI AMIT BASU, Jaipur

ITA 727/JPR/2012

• Counselvise Citation: 72723114 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Revised return
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 727/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 D.C.I.T. CIRCLE-2, JAIPUR. CUKE VS. AMIT BASU, PROP- GLOBAL VISION CO., 21/59, BRIGHU PATH, MANSAROVAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ABFPB 2314 J VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : KAILASH MANGAL (JCIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/03/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 10/04/2015 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST T HE ORDER DATED 06/06/2012 PASSED BY THE LEARNED CIT(A)-I, JAIPUR F OR A.Y. 2009-10. THE SOLE GROUND OF APPEAL IS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN DELETING TH E ADDITION OF RS. 1,03,87,392/- MADE BY THE A.O. DESPITE THE F ACTS THAT THE ASSESSEE WAS NOT ENGAGED IN MANUFACTURING ACTIVITIES AS REQUIRED U/S 10BA. ITA 727/JP/2012_ DCIT VS. AMIT BASU 2 2. THE SOLE GROUND OF APPEAL IS AGAINST DELETING THE ADDITION OF RS. 1,03,87,392/- MADE BY THE ASSESSING OFFICER DESPITE THE FACT THAT THE ASSESSEE WAS NOT ENGAGED IN MANUFACTURING ACTIVITIES REQUIRED U/S 10BA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE FILED RETURN OF INCOME ON 30/09/2008 DECLARING TOTAL INCO ME OF RS. 27,21,220/-, WHICH WAS REVISED AT RS. 22,55,320/- ON 22/09/2010. IN THE REVISED RETURN SET OFF OF UNABSORBED DEPRECIATI ON OF RS., 4,75,900/- WAS TAKEN, WHICH WAS NOT CLAIMED IN THE ORIGINAL RETUR N. THIS CASE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE ASSESSEE IS ENGAGED IN PROCESSING AND EXPORT OF WOODEN ITEMS AND OTHER RELA TED COMMODITIES IN THE NAME AND STYLE M/S GLOBAL VISION CO. IT IS F URTHER OBSERVED THAT THE ASSESSEE IS CLAIMED DEDUCTION U/S 10BA OF THE A CT AT RS. 1,03,87,392/-. THE ASSESSING OFFICER GAVE REASONABL E OPPORTUNITY OF BEING HEARD WHETHER THE ASSESSEES ACTIVITIES COVERE D AS MANUFACTURER, WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 2 9/11/2010 AND EXPLAINED THE WHOLE PROCESS OF MANUFACTURING. THE AS SESSING OFFICER ALSO RECORDED THE STATEMENT OF SHRI DHARMENDRA JANG ID AND SHRI RAM KISHOR JANGID, SUPPLIER OF GOODS, WHICH HAS BEEN REP RODUCED BY THE ASSESSING OFFICER ON PAGE 6 TO 9, IT HAS BEEN CONCL UDED BY THE ASSESSING OFFICER ON THE BASIS OF STATEMENT AND EVI DENCE COLLECTED BY ITA 727/JP/2012_ DCIT VS. AMIT BASU 3 THE ASSESSING OFFICER THAT THESE PERSONS SUPPLIED C OMPLETE FINISHED ITEMS ON WHICH ONLY POLISHING IS DONE BY THE ASSESSE E. FURTHER, CLAIM OF THE ASSESSEE THAT HE DID CARVING WAS BASELESS AS THE ABOVE STATEMENT MAKES IT CLEAR THAT THE MATERIAL WHICH WAS SUPPLIED TO THE ASSESSEE DID NOT HAVE SCOPE OF FURTHER CARVING OR OTHER ACTIVITY . THE PHOTOS PREPARED BY THE SUPPLIER WERE EXAMINED, WHICH ALSO SH OWED THAT THE ITEM WAS SOLD TO THE ASSESSEE IN FINISHED FORM ONLY. HE FURTHER RECORDED STATEMENT OF SHRI MOHAN LAL CHOUDHARY, SUPERVISOR O F THE ASSESSEE, WHICH WAS ALSO SUPPORTED THAT THE ASSESSEE HAS DONE O NLY POLISHING ON THE FURNITURE SUPPLIED BY THE SUPPLIER. THE ASSESSEE WAS JUST DOING THE WORK OF FINISHING, POLISHING AND PACKING. MOREOVER, GOODS MANUFACTURED BY THEM AND SOLD TO THE ASSESSEE ARE MADE THROUGH U SE OF POWER AND MACHINES. ACTUALLY NO HANDMADE ITEMS WERE PRODUCED. THUS THE INITIAL CONDITION OF ELIGIBLE ARTICLES IS VITIATED. ANOTHER CONDITION OF ELIGIBLE ARTICLES IS THAT THE ARTICLE SHOULD BE OF ARTISTIC VALUE, FOR WHICH SHE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CAS E OF COLLECTOR OF CENTRAL EXCISE NEW DELHI VS. LOUIS SHOPPE WHERE THE HON'BLE SUPREME COURT HAS NOT CONSIDERED THE WOODEN FURNITURE AS HAN DICRAFT ITEMS. THE LD ASSESSING OFFICER ALSO CORRELATED THE PRODUCED I TEMS WITH THE SALE ITEMS. IT IS FOUND THAT THE ARTISTIC WORK DONE BY TH E ASSESSEE IN 5 TO 8 ITA 727/JP/2012_ DCIT VS. AMIT BASU 4 DAYS. THESE ITEMS WERE EXPORTED WITHIN 10 TO 15 DAYS F ROM ITS PURCHASE. THE ASSESSING OFFICER AGAIN GAVE THE SHOW CAUSE NOTICE FOR DISALLOWANCE OF DEDUCTION CLAIMED U/S 10BA OF THE AC T ON 25/11/2011, WHICH WAS AGAIN REPLIED BY THE ASSESSEE ON 29/11/2011 , WHICH HAS BEEN REPRODUCED BY THE ASSESSING OFFICER ON PAGE 15 TO 20. THE LD. ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEES REPLY AGAIN OBSERVED THAT THE PRIMARY CONDITION FOR ELIGIBILITY OF DEDUC TION U/S 10BA OF THE ACT IS THAT THE CONCERN MUST BE INVOLVED IN MANUFACTURI NG OR PRODUCTION OF ELIGIBLE ARTICLES OR THINGS. SHE AGAIN ANALYSED THE DEFINITION OF MANUFACTURING ON PAGE 21 AND ALSO CONSIDERED THE HO N'BLE SUPREME COURT DECISION IN THE CASE OF CIT VS. N.C. BUDHIRAJA & CO. (1993) 204 ITR 412 (SC) AND THE DECISION OF THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF DD SHAH & BROS. 283 ITR 486 (RAJ.). HE A LSO EXAMINED THE DIFFERENCE BETWEEN PROCESSING AND MANUFACTURING BY C ONSIDERING THE HON'BLE SUPREME COURT DECISION IN THE CASE OF CIT VS . STERLING FOODS (GOA) 213 ITR 851. AGAIN SHE FURTHER ANALYSED THE HO N'BLE SUPREME COURT DECISION IN THE CASE OF DCIT VS. PLOW FOOD PAC KERS 198 SUPPLY SCC 174, UNION OF INDIA VS. DELHI CLOTH 7 GENERAL M ILLS (1977) ELT (J) 199 (SC), CIT VS. LUCKY MINERAL PVT. LTD. (1997) 226 ITR 245 (RAJ.), LUCKY MINMAT PVT. LTD. VS. CIT 245 ITR 830 (SC) AND G EM INDIA 249 ITA 727/JP/2012_ DCIT VS. AMIT BASU 5 ITR 307 (SC). IT IS FURTHER OBSERVED THAT IN ASSESSE ES CASE, THE HONBLE ITAT JAIPUR BENCH, JAIPUR HAS ALLOWED THE DEDUCTION U /S 10BA OF THE ACT IN PRECEDING YEAR BUT THE SAME HAS BEEN CHALLEN GED BEFORE THE HONBLE RAJASTHAN HIGH COURT. THEREFORE, SHE DISALLO WED THE CLAIM OF THE ASSESSEE U/S 10BA OF THE ACT AT RS. 1,03,87,292 /-. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT( A), WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 4.3 I HAVE CAREFULLY PERUSED THE ORDER OF THE A.O. AND THE SUBMISSIONS OF THE AR. ON PERUSAL OF THE STATEMENTS TAKEN BY THE A.O. AT THE TIME OF ORDER PASSED BY HER, IT IS SEEN THAT SIMILAR STATEMENTS HAD BEEN RECORDED IN THE PA ST OF THE A.O. AND THE MATTER HAD BEEN AGITATED BEFORE TH E HONBLE ITAT ON SAME/SIMILAR GROUNDS. IT IS SEEN TH AT THE FACTS OF THE CASE REMAIN THE SAME DURING THIS YEAR AND A CATEGORICAL FINDING OF THE HONBLE ITAT, JAIPUR BEN CH HAS BEEN GIVEN IN FAVOUR OF THE ASSESSEE ON THE SAME FA CTS FOR ADMITTING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U /S 10BA VIDE THEIR ORDERS ITA NO. 198/JP/2008 FOR A.Y. 2004 -05 AND ITA NO. 166/JP/2009 FOR A.Y. 2006-07. PURSUANT TO T HESE FINDINGS ON THE SAME FACTS OF THE HONBLE ITAT, JAIP UR BENCH THE IMPUGNED ADDITION OF RS. 1,03,87,392 ON ACCOUNT OF DISALLOWANCE OF EXEMPTION U/S 10BA IS DIR ECTED TO BE DELETED. ITA 727/JP/2012_ DCIT VS. AMIT BASU 6 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LEARNE D D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. 5. AT THE OUTSET, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES CASE IS COVERED BY THE HONBLE ITAT D ECISION IN ASSESSEES OWN CASE IN ITA NO. 960/JP/2009 FOR A.Y. 2006-07 AND ITA NO. 198/JP/2008 FOR A.Y. 2004-05 AND THE HONBLE IT AT HAS ALLOWED THE DEDUCTION U/S 10BA OF THE ACT. THE FACTS AND CIR CUMSTANCES OF THE YEAR UNDER CONSIDERATION ARE IDENTICAL, THEREFORE, THE ASSESSEE MAY BE ALLOWED THE DEDUCTION U/S 10BA OF THE ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS ENGA GED IN PROCESSING AND EXPORT OF THE WOODEN ITEMS AND OTHER RELATED CO MMODITIES. THE ASSESSEE PURCHASED FURNITURE FROM THE SUPPLIER THER EAFTER HE POLISHES THROUGH LABOURS. THE POLISH WORK STARTS AFTER THE F URNITURE WITH CARVING IS RECEIVED BY IT. THE COORDINATE BENCH IN ITS VARIO US ORDERS MENTIONED ABOVE HAS HELD AS UNDER:- 2.3 WE HAVE HEARD BOTH THE PARTIES. THE LD CIT(A) HA S DIRECTED THE A.O. TO ALLOW DEDUCTION ON ACCOUNT OF T HE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FO R THE ASSESSMENT YEAR 2004-05 AND 2006-07. WE FIND NO ITA 727/JP/2012_ DCIT VS. AMIT BASU 7 INFIRMITY IN THE ORDER OF THE LD CIT(A) VIDE WHICH HE HAS FOLLOWED THE ORDER OF THE TRIBUNAL. FOLLOWING OUR FIND INGS FOR THE EARLIER ASSESSMENT YEARS, WE HOLD THAT THE L D CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O. TO ALLOW DEDUCTIO N U/S 10BA. THUS THE FIRST GROUND OF APPEAL OF THE REVENUE IS DISMISSED. BY RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECIS ION IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F LD. CIT(A). ACCORDINGLY WE UPHELD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 10/04/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED 10 TH APRIL, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE DCIT, CIRCLE-2, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI AMIT BASU, JAIPUR. ITA 727/JP/2012_ DCIT VS. AMIT BASU 8 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 727/JP/2012). VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR