Asst. Commissioner of Income tax, Margao V. M/s Pentair Water India Pvt. Ltd., Goa

ITA 76/PAN/2013

• Counselvise Citation: 7624114 RSA 2013
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHA DESAI
• Section: 80HHC; 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 76/PNJ/20 13 : (ASST. YEAR : 2005 - 06 ) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, MARGAO (APPELLANT) VS. M/S. PENTAIR WATER INDIA PVT. LTD., I - 55, VERNA INDUSTRIAL ESTATE, VERNA, SALCETE, GOA 403 722 PAN : AABCS8856L (RESPONDENT) APPELLANT BY : SMT. ASHA DESAI, DR RESPONDENT BY : SANDIP BHANDARE, CA DATE OF HEARING : 05/08/2013 DATE OF PRONOUNCEMENT : 13 /0 9 /2013 O R D E R PER D.T. GARASIA : 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 6.3.2013 FOR THE A.Y 2005 - 06 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE ORDER OF LD. CIT(A) IS OPPOSED TO LAW AND FACT OF THE CASE. 2. THE LD. CIT(A) PANAJI, HAS ERRED IN DELETING THE ADDITION U/S 80IB OF THE I.T. ACT MADE BY AO AMOUNTING TO RS.92,05,500/ - . 3. THE LD. CIT( A), PANAJI HAS ERRED IN DIRECTING AO TO ALLOW BOTH THE CLAIMS U/S 10B AND U/S. 80IB OF THE ASSESSEE, AS THE PROVISION OF SECTION 10B(6) ARE VERY CLEAR IN THIS REGARD AND PROHIBIT ASSESSEE FOR CLAIMING ANY DEDUCTION U/S 80IB FOR SAME EXPORT ORIENTED UNDERTA KING. 2. SINCE ALL THE GROUNDS ARE INTERCONNECTED, THEREFORE, DISPOSED OFF BY THIS COMMON ORDER. 3. THE SHORT FACTS OF THE CASE ARE AS UNDER : 2 ITA NO. 76/PNJ/2013 (ASST. YEAR : 2005 - 06) 3.1 A LL THE GROUNDS OF THE APPELLANT RELATE TO ONLY ONE ISSUE OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IB. IN THIS CASE THE A.O. MADE THIS DISALLOWANCE WITH THE FOLLOWING REMARKS: THE ISSUE IS REGARDING SIMULTAMOUS CLAIM OF THE ASSESSEE U/S 10B AND 80IB OF THE I.T. ACT. THE PROVISION OF S. 10B (6)( III) CLEARLY STATES THAT NO DEDUCTION SHALL BE ALLOWED TO THE ASSESSEE U/S 80IB IN RELATION TO THE PROFITS AND GAINS OF THE UNDERTAKING WHEN THE ASSESSEE IS ALREADY AVAILING THE EXEMPTION U/S 10B. THEREFORE, SINCE THE ASSESSEE HAS ALREADY CLAIMED THE EXEMP TION ON PROFIT ON EXPORT SALES U/S 10B FOR RS. 13,67,93,948/ - THE DEDUCTION U/S 80IB FOR RS. 92,05,500/ - CANNOT BE ALLOWED AND SHOULD BE ADDED BACK TO THE RETURNED INCOME AS THIS WOULD AMOUNT TO ALLOWING DOUBLE DEDUCTION TO THE ASSESSEE WHICH IS NOT PERMIT TED UNDER THE I.T ACT. THEREFORE, AN AMOUNT OF R S. 92,05,500/ - IS ADDED BACK U/S 10B(6)(III). 3.2 THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER : 6. I HAVE GONE THROUGH THE ORDER OF THE HON'BLE ITAT, WHICH DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE WITH FOLLOWING REMARKS: ADMITTEDLY, THE ASSESSEE IS A 100% EOU AND CLAIMS TO HAVE SATISFIED ALL THE CONDITIONS FOR ELIGIBILITY OF DEDUCTION U/S 80IB OF THE ACT. THE REVENUE'S CASE IS THAT SEC. 10B(6)(III) OF THE ACT DOES NOT PERMIT DEDUCTION U/S 80IA IN RELATION TO THE PROFITS AND GAINS OF THE UNDERTAKI NG AND THUS THE LEARNED CIT(A) HAS ERRED IN ALLOWING SUCH DEDUCTION SEPARATELY EVEN THOUGH THE ASSESSEE'S UNDERTAKING HAS AVAILED EXEMPTION U/S 10B OF THE ACT. WE, HOWEVER, DO NOT FIND ANY UNIT IN THE PLEA SO RAISED BY THE REVENUE IN AS MUCH AS SEC. 10B(6) (III)OF THE ACT IS OPERATIVE TO THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE LAST OF THE RELEVANT ASSESSMENT YEARS IN WHICH THE UNDERTAKING HAS BEEN ALLOWED EXEMPTION U/S 10B OF THE ACT. IN OTHER WORDS, 10B(6)(III) IS ATTRACTED AFTER THE PERIOD TO CLAIM EXEMPTION U/S 10B HAS BEEN EXHAUSTED. IN THIS VIEW OF THE MATTER AND THE REVENUE HAVING NOT SHOWN THAT THE ASSESSEE'S UNDERTAKING IS NOT OTHERWISE ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT, THE LD. CIT(A) CANNOT BE SAID TO HAVE ERRED IN ALLOWING SUCH DEDUCTION TO THE ASSESSEE. THAT APART, THE REVENUE HAS ALSO NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE PROFITS ON WHICH DEDUCTION U/S 10B HAS BEEN CLAIMED ARE SAME PROFITS ON WHICH DEDUCTION U/S 80HHC/ 80IB IS BEING CLAIMED BY THE ASSESSEE. THE LEARNED 3 ITA NO. 76/PNJ/2013 (ASST. YEAR : 2005 - 06) CIT(A) WAS THEREFORE, NOT JUSTIFIED IN DENYING, DEDUCTION U/ S 80HHC OF THE ACT ON THE GROUND THAT THE CLAIM OF THE ASSESSEE IS HIT BY THE PROVISIONS OF SEC. 80A(4) BROUGHT INTO STATUTE BY THE FINANCE ACT, 2009 WITH RETROSPECT IVE EFFECT FROM 01.04.2003. IN THIS VIEW OF THE MATTER, GROUND NO. L(C) RAISED BY THE ASSESSEE STANDS ALLOWED AND GROUND NO. 3 IN APPEAL BY THE REVENUE STANDS DISMISSED. REVENUE WENT IN APPEAL TO THE HON'BLE HIGH COURT ON THIS ISSUE. THE HON'BLE HIGH COU RT, BOMBAY, PANAJI BENCH UPHELD THE DECISION OF THE ITAT AND DISMISSED THE APPEAL OF THE REVENUE. IN VIEW OF THE ABOVE DISCUSSION, RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE ITAT AND HON'BLE HIGH COURT, THE A.O. IS DIRECTED TO ALLOW BOTH THE CLAIMS U/S 10B AND S. 80IB, OF THE ASSESSEE. THE ADDITION AMOUNTING TO RS. 92,05,500/ - IS HEREBY DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.3 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE ISSUE IN CONTROVERSY IS C OVERED BY THE DECISION IN THE ASSESSEES OWN CASE WHEREIN THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE REVENUE WENT IN APPEAL BEFORE THE HON'BLE HIGH COURT ON THIS ISSUE AND THE HON'BLE HIGH COURT HAS UPHELD THE DECISION OF THE ITAT AND DISM ISSED THE APPEAL OF THE REVENUE. THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE ITAT AND THE HON'BLE HIGH COURTS IN THE ASSESSEES OWN CASE, WE ALLOW THE CLAIM OF THE ASSESSEE U/S 10B & 80IB OF THE ACT. 4. IN THE RESULT, THE APPEAL IS DISMISSED . 5. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /0 9 /2013. SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER SD/ - (D.T.GARASIA) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 13 /0 9 / 2013 *SSL* 4 ITA NO. 76/PNJ/2013 (ASST. YEAR : 2005 - 06) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT, PANAJI (4) CIT(A), PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , SR. P RIVATE S ECRETARY ITAT, PANAJI, GOA