DCIT, Jaipur V. Goenka jewellers, Jaipur

ITA 728/JPR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5180 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: G G MUNDRA C A DHK
• Section: 143(3); 10AA; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 728/JP/2014. FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. DY. COMMISSIONER OF INCOME - TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S. GOENKA JEWELLERS, 401, PANCHRATNA, MSB KA RASTA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABFG 8810 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI MUKESH VERMA (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI G.G. MUNDRA (C.A) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.08.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 22/08/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-1, JAIPUR DATED 19.08.2014 PERTAINING TO ASSESSMENT YE AR 2011-12. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN ALLOWING THE DEDUCTION OF RS. 5,83,01,240/- U/S 10AA OF THE ACT, EVEN THOUGH THE CONDITIONS LAI D DOWN IN SECTION 10AA OF THE ACT, FOR CLAIMING THE DEDUCTION ARE NOT FULFILLED. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND ASSESSMENT WAS FRAMED V IDE ORDER DATED 05.03.2014. WHILE FRAMING THE ASSESSMENT, THE AO OBSERVED THAT THE ASSESSEE MADE RE-EXPORT OF IMPORTED GOODS AMOUNTING TO RS. 64,17,95,696/- AND DECLARED NET PROFIT OF RS. 2 ITA NO. 728/JP/2014 DCIT VS. M/S. GOENKA JEWELLERS 6,15,00,974/- WHICH HAS BEEN CLAIMED AS DEDUCTION U /S 10AA OF THE ACT. IT WAS OBSERVED BY THE AO THAT ONE OF THE UNITS OF THE ASS ESSEE FIRM WAS SITUATED IN SEZ SURAT WHERE THE ASSESSEE HAS ONLY IMPORTED AND RE-E XPORTED THE DIAMONDS WITHOUT MANUFACTURING OR PROCESSING ACTIVITY. THE AO OBSERV ED THAT AS PER PROVISIONS OF SECTION 10AA OF THE ACT, SOME OF THE BASIC CONDITIO NS ARE REQUIRED TO BE FULFILLED. IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS CLAIME D THE DEDUCTION UNDER SECTION 10AA PURELY ON THE TRADING ACTIVITY I.E. IMPORT OF DIAMONDS AND RE-EXPORT OF THE SAME WITHOUT ANY MANUFACTURING OR PROCESSING OR PRO VIDING ANY SERVICES. ACCORDINGLY, HE HELD THAT THE ASSESSEE IS NOT ELIGI BLE TO CLAIM DEDUCTION U/S 10AA AND CLAIM OF RS. 5,83,01,240/- MADE UNDER SECTION 1 0AA OF THE ACT WAS DISALLOWED. AGGRIEVED BY THIS ORDER, ASSESSEE PREFERRED AN APPE AL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUB MISSIONS AND PERUSING THE MATER IAL AVAILABLE ON RECORD AND FOLLOWING THE DECISION OF THE COORDINATE BENCHES OF THE TRIBUNAL, DELETED THE DISALLOWANCE. 3. NOW THE REVENUE IS IN APPEAL BEFORE US. THE ONLY EFFECTIVE GROUND IS AGAINST THE DELETION OF DISALLOWANCE OF RS. 5,83,01,240/-. 4. THE LD. D/R VEHEMENTLY ARGUED THAT THE LD. CIT ( A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUBMITTED THAT THE DEDUC TION U/S 10AA WOULD BE AVAILABLE IF THE ASSESSEE HAS CARRIED OUT ANY MANUFACTURING, PRODUCING OR PROVIDING ANY SERVICES. HE SUBMITTED THAT TRADING OF GOODS WOULD NOT FALL IN ANY OF THE CATEGORY. 4.1. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND REIT ERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS MADE BY THE LD. COUNSEL IN THE WRITTEN BRIEF ARE AS UNDER :- 3 ITA NO. 728/JP/2014 DCIT VS. M/S. GOENKA JEWELLERS THE FACTS OF THE CASE AND ISSUE INVOLVED IN APPEA L IS EXACTLY SAME AS HAS BEEN DECIDED BY THE HONBLE BENCH IN CA SE OF DCIT VS. GOENKA DIAMOND & JEWELS LTD., JAIPUR A.Y. 2008-09 ( ITA NO. 509/JP/2011 ORDER DATED 31.1.2012) COPY OF WHICH IS PLACED ON P.B. PAGE 17-35 WHICH WAS FOLLOWED IN THE SAME CASE FOR A.Y. 2009-10. THERE ARE JUDGMENTS OF OTHER ITAT BENCHES IN WHICH AFTER REFERRING THE SAID JUDGMENT OF DCIT VS. GOENKA DIAM ONDS & JEWELS LTD. (ITA NO. 509/JP/2011 ORDER DATED 31.1.2012) TH E SAME ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE. ITA NO. 6947-48/MUM/2011 ORDER DATED 8.5.2013 GITANJALI EXPORTS CORPORATION LTD.(MUMBAI BENCH) ITA NO. 30/KOL/2012 ORDER DATED 3.11.2013 ITO VS. MIDAS DFS PVT. LTD. (KOLKATA BENCH) THE COPIES OF THESE ORDERS ARE ALSO PLACED IN PB PA GE 40 TO 61. THE ASSESSING OFFICER HAS NOT BROUGHT ANY NEW FACT ON RECORD IN ASSESSMENT ORDER BUT REPEATED THE FINDING RECORDED IN THE ASSESSMENT ORDER FOR A.Y. 2007-08. IN VIEW OF THESE FACTS THE CASE OF ASSESSEE IS COVERED IN HIS FAVOUR FROM AFORESAID APPEAL ORDER P ASSED BY HONBLE ITAT, JAIPUR BENCH, JAIPUR AND OTHER ORDERS OF ITAT BENCHES REFERRED ABOVE. FURTHER IN CASE OF ASSESSEE FIRM ITSELF THE HONBLE ITAT, JAIPUR BENCH, JAIPUR WHILE CANCELING THE ORDER OF CIT U/S 263 FOR A.Y. 2007- 08 & 2008-09 DECIDED THE ISSUE IN FAVOUR OF ASSESSE E (ITA NO. 357/JP/2012 & 384/JP/2013 ORDER DATED 30.10.2015 (P .B. PAGE 1-8) AND IN APPEAL FILED BY DEPARTMENT AGAINST ORDER OF CIT (A) FOR A.Y. 2010-11 IN WHICH CIT (A) DELETED THE DISALLOWANCE U /S 10AA MADE BY LD. AO IN ASSESSMENT U/S 143(3) THE HONBLE ITAT DE CIDED THE ISSUE IN FAVOUR OF ASSESSEE DISMISSING THE APPEAL FILED BY D EPARTMENT (ITA NO. 663/JP/13 ORDER DATED 6.1.2016 (PB PAGE 9-13). THUS ISSUE IS COVERED IN FAVOUR OF ASSESSEE FROM SAID APPEAL ORDER IN CAS E OF ASSESSEE FIRM ITSELF. 4 ITA NO. 728/JP/2014 DCIT VS. M/S. GOENKA JEWELLERS IN THE CASE OF CIT VS. WESTERN OUTDOOR INTERACTIVE P. LTD. (2012) 254 CTR (BOMB) 593 THE HONBLE BOMBAY HIGH C OURT HAS HELD THAT WHERE A BENEFIT OF DEDUCTION IS AVAILABLE FOR NUMBER OF YEARS ON SATISFACTION OF CERTAIN CONDITIONS UNDER THE PROVIS IONS OF THE I.T. ACT THAN UNLESS THE RELIEF GRANTED FOR FIRST ASSESSMENT IN WHICH THE CLAIM WAS MADE AND ACCEPTED IS WITHDRAWN OR SET ASIDE THE SAME IS TO BE ALLOWED FOR ALL THE SUBSEQUENT YEARS AS PER PROVISI ON OF STATUTE. IN THE CASE OF ASSESSEE IN FIRST ASSESSMENT YEAR 2007-08 R ELIEF HAS BEEN GRANTED AND THEREFORE DEDUCTION OF HUNDRED PER CENT OF PROFITS AND GAINS FOR FIVE CONSECUTIVE ASSESSMENT YEARS AND FIF TY PERCENT OF PROFITS AND GAINS FOR NEXT FIVE CONSECUTIVE YEARS IS ALLOWA BLE AS PER PROVISIONS OF SECTION 10AA OF I.T. ACT, 1961. THUS THE ISSUE RAISED BY DEPARTMENT IN ITS GROUND O F APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE FROM THE SAID APP EAL ORDERS OF HONBLE BENCH. THE APPEAL FILED BY DEPARTMENT DESER VES TO BE DISMISSED AND THE ORDER OF CIT (A) MAY KINDLY BE CO NFIRMED. 4.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE CONTENTION OF THE ASSESSEE IS THAT IN EARLIER YEAR SUCH DISALLOWANCE WAS DELETED BY THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 645/JP/2012 PERTAINI NG TO ASSESSMENT YEAR 2009-10. RELIANCE IS ALSO PLACED ON THE DECISION OF THE COOR DINATE BENCH IN ASSESSEES OWN CASE PERTAINING TO A.Y. 2010-11 IN ITA NO. 663/JP/2 013. APART FROM THESE DECISIONS, THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RE LIANCE ON THE DECISIONS OF COORDINATE BENCH IN ITA NO. 509/JP/2011 IN THE CASE OF DCIT VS. GOENKA DIAMOND & JEWELS LTD. AND IN ITA NOS. 365/JP/2012 & 384/JP/ 2013 IN ASSESSEES OWN CASE. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE FACTS INVOLVED IN THIS APPEAL 5 ITA NO. 728/JP/2014 DCIT VS. M/S. GOENKA JEWELLERS ARE IDENTICAL AND THERE IS NO CHANGE IN THE FACTS A ND CIRCUMSTANCES OF THE CASE. RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS :- CIT VS. WESTERN OUTDOOR INTERACTIVE P. LTD. (2012) 254 CTR (BOMB.) 593. ITA NO. 6947-48/MUM/2011 ORDER DATED 8.5.2013 GITANJALI EXPORTS CORPORATION LTD.(MUMBAI BENCH) ITA NO. 30/KOL/2012 ORDER DATED 3.11.2013 ITO VS. MIDAS DFS PVT. LTD. (KOLKATA BENCH) RESPECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCHES OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A) WHICH IS HEREBY UPHELD. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 22/08/2016 . SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 22/08/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CIRCLE-2, JAIPUR. 2. THE RESPONDENT M/S. GOENKA JEWELLERS, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 728/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 728/JP/2014 DCIT VS. M/S. GOENKA JEWELLERS