ASST CIT 19(3), MUMBAI V. NISHIKANT S. SHIRODKAR, MUMBAI

ITA 7626/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93325 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SUBRAMANIAN
• Assessee Lawyers: DR YOGESH KAMAT
• Section: 80IB; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.7626/M/2013 ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX 19(3), MUMBAI, 305, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012 VS. SHRI NISHIKANT S. SHIRODKAR, 5, CLIFF TOWER, MOUNT MARRY ROAD, BANDRA (WEST), MUMBAI 400 050 PAN: AMBPS 5493C (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. YOGESH KAMAT, D.R. REVENUE BY : SHRI M. SUBRAMANIAN, A.R. DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 29.07.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREIN AFTER REFERRED TO AS THE CIT(A)] DATED 11.10.2013. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE LOSS OF ONE UN IT OF BUSINESS NEED NOT BE ADJUSTED AGAINST THE PROFIT OF OTHER UNIT OF BUSINE SS IN ORDER TO ARRIVE AT THE GROSS TOTAL INCOME FOR AVAILING DEDUCTION U/S 80IB. (2) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. (3) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ITA NO.7626/M/2013 SHRI NISHIKANT S. SHIRODKAR 2 3. THE LD. AR OF THE ASSESSEE AT THE OUTSET HAS STA TED THAT THE ABOVE LEGAL ISSUE RAISED BY THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THE TRIBUNAL AS WELL BY THAT O F THE DELHI HIGH COURT IN THE CASE OF SONA KOYO STEERING SYSTEMS LTD. 230 CTR 251 WHEREIN THE HONBLE HIGH COURT HAS HELD THAT S. 80-I DEDUCTION IS ALLOW ABLE WITHOUT SETTING OFF LOSS OF OTHER UNITS AS EACH UNIT IS TO BE TREATED AS A SEPARATE AND INDEPENDENT UNIT U/S 80-I (6) OF THE I.T. ACT AND THE DEDUCTION HAS TO BE COMPUTED AS IF THE INDUSTRIAL UNDERTAKING WAS THE ONLY SOURCE OF INCOM E OF THE ASSESSEE. IT IS ONLY THOSE INDUSTRIAL UNDERTAKINGS WHICH HAVE A PROFIT O R GAIN WHICH HAVE TO BE CONSIDERED FOR COMPUTING THE DEDUCTION. THE LOSS MA KING INDUSTRIAL UNDERTAKING WOULD NOT COME INTO THE PICTURE AT ALL. THE LOSS OF ONE SUCH INDUSTRIAL UNDERTAKING CANNOT BE SET OFF AGAINST TH E PROFIT OF ANOTHER SUCH INDUSTRIAL UNDERTAKING TO ARRIVE AT A COMPUTATION O F THE QUANTUM OF DEDUCTION THAT IS TO BE ALLOWED TO THE ASSESSEE U/S 80-I (1). 4. IT IS PERTINENT TO MENTION HERE THAT AS PER SUBS ECTION (5) OF SECTION 80-IA IS ALMOST IDENTICALLY WORDED AS SECTION 80-I(6), W HICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: SECTION 80-IA(5): NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PRO VISION OF THIS ACT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROV ISIONS OF SUB-SECTION (1) APPLY SHALL, FOR THE PURPOSES OF DETERMINING THE QUANTUM OF DEDUCTION UNDER THAT SUB- SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEED ING THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS I F SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING TH E PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASS ESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMI NATION IS TO BE MADE. IT MAY BE FURTHER NOTED THAT AS PER SECTION 80-IB( 13), THE PROVISIONS OF SUB SECTION (5) OF SECTION 80 IA SHALL APPLY TO THE ELI GIBLE BUSINESS UNDER SECTION 80IB. 5. THE LD. CIT(A) THEREFORE CORRECTLY APPLIED THE LAW LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF SONA KOYO STEERING SYSTEMS LTD ITA NO.7626/M/2013 SHRI NISHIKANT S. SHIRODKAR 3 (SUPRA). WE FURTHER FIND THAT THE LD. CIT(A) HAS AL SO RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MEERA COTTON & SYNTHETIC MILLS LTD. [2009] 29 SOT 177(MUM.) WHEREIN THE TRIB UNAL HAS ALSO HELD THAT DEDUCTION U/S 80IB IS TO BE ALLOWED WITH REFERENCE TO PROFITS OF A PARTICULAR UNDERTAKING AND THAT THE LOSS SUFFERED IN OTHER ELI GIBLE UNIT OF THE ASSESSEE CAN NOT BE SET OFF AGAINST THE PROFITS OF ELIGIBLE UNIT IN QUESTION WHILE CALCULATING THE AMOUNT OF DEDUCTION U/S 80IB OF THE ACT. 6. THE LD. DR HAS NOT BROUGHT TO OUR KNOWLEDGE ANY LAW CONTRARY TO THE ABOVE STATED PROPOSITION. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN RELATION TO HIS FINDINGS ON THE ABOVE STATED LEGAL ISSUE AND THE SAME ARE ACCORDINGLY UPHELD. 7. THE APPEAL OF THE REVENUE IS THEREFORE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 29.07.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 29.07.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.