Income-tax Officer, V. M/s. Dirk India Private Ltd., Nashik

ITA 869/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4840 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH GAWLI
• Assessee Lawyers: RONAK G DOSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 869/PUN/2016 '% & '& / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD 1(5), NASHIK. ....... / APPELLANT (% / V/S. M/S. DIRK INDIA PRIVATE LIMITED. PLOT NO. 10, INDIA HOUSE, GITANJALI COLONY, INDIRA NAGAR, NASHIK-422 009. PAN : AABCD2232P . / RESPONDENT REVENUE BY : SHRI RAJESH GAWLI ASSESSEE BY : SHRI RONAK G. DOSHI / DATE OF HEARING : 16.10.2018 / DATE OF PRONOUNCEMENT : 24.10.2018 ) / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY REVENUE AGAINST THE ORDER OF CIT (APPEAL)-1, NASHIK DATED 17.02.2016 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ISSUE RAISED IN THE PRESENT APPEAL RELATES TO ALLO WABILITY OF DEDUCTION U/S.80IA(4) OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS THE ACT) WHICH WAS NOT ORIGINALLY CLAIMED IN THE RETURN O F INCOME FILED U/S. 139(1) OF THE ACT. 2 ITA NO. 869/PUN/2016 A.Y.2010-11 3. BRIEFLY STATED RELEVANT FACTS INCLUDE, THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF POZZOCRETE FROM FLY-AS H. ASSESSEE FILED THE RETURN OF INCOME ON 30.09.2010 DECLARING TOTAL INCOME AT RS.5,26,13,543/-. DURING SCRUTINY ASSESSMENT PROCEEDINGS U /S.143(3) OF THE ACT, THE ASSESSING OFFICER ASSESSED TOTAL INCOME OF ASSESSE E AT RS.6,57,30,020/-. THE ASSESSING OFFICER DENIED THE CLAIM OF AS SESSEE U/S.80IA(4) OF THE ACT BY OBSERVING THAT THE ASSESSEE IS NOT AN INFRASTRUCTURE FACILITY BUT ONLY A MANUFACTURER OF A SPECIALIZED PRODUCT PO ZZOCRETE FOR WHICH FLY ASH. THE ASSESSING OFFICER ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT, R EPORTED AS 284 ITR 323 (SC) AND REJECTED THE ASSESSEES CLAIM OF DEDUCTION U/S.80IA(4) OF T HE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE FILED APP EAL BEFORE THE CIT(A). DURING FIRST APPELLATE PROCEEDINGS, ASSESSEE RAISED T HE SAID ISSUE OF ALLOWABILITY OF DEDUCTION U/S.80IA(4) OF THE ACT AS THE ASSESS EE IS ENGAGED IN THE INFRASTRUCTURAL ACTIVITIES. THE CIT(A), NASHIK EXAMINED T HE ISSUE AND CONSIDERED THE ASSESSEE TO BE ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IA(4) OF THE ACT AND ALLOWED THE APPEAL OF THE ASSESSEE AS PER DIS CUSSION GIVEN IN PARA 4.8 OF THE CIT(A)S ORDER. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APP EAL BEFORE THE TRIBUNAL BY RAISING FOUR GROUNDS. THE GROUND NOS. 2, 3 AND 4 ARE GENERAL IN NATURE AND CONSEQUENTIAL AND HENCE, REQUIRE NO ADJUDICAT ION. ACCORDINGLY, GROUND NOS. 2, 3 AND 4 ARE DISMISSED . NOW, THE GROUND WHICH LEFT FOR ADJUDICATION IS GROUND NO. 1 AND THE SAME READS AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, NASHIK WAS JUSTIFIED IN ALLOWING THE CLAI M OF SECTION 80IA(4) OF THE INCOME TAX ACT, 1961 IRRESPECTIVE OF THE FACT T HAT ASSESSEE HAS NOT CLAIMED DEDUCTION U/S.80IA(4) IN THE RETURN OF INCO ME UNDER THE 3 ITA NO. 869/PUN/2016 A.Y.2010-11 PROVISIONS OF SECTION 139(1) OF THE I.T. ACT AND HA S ALSO NOT REVISED THE COMPUTATION OF TOTAL INCOME . FROM THE ABOVE, IT IS EVIDENT THAT THE SOLITARY OBJECTION OF THE REVENUE RELATES TO ALLOWABILITY OF CLAIM OF DEDUCTION U/S.80IA(4) OF THE ACT WHEN THE ASSESSEE FAILED TO CLAIM THE SAME IN THE ORIGINAL RETURN OF IN COME FILED U/S.139 OF THE ACT. THE ASSESSEE HAS MADE CLAIM IN THE R EVISED RETURN AFTER COMPUTATION OF TOTAL INCOME. THE CIT(A) EXAMINED THIS ISSUE A ND RELIED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF C IT VS. M/S. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD., REPORTED AS 349 ITR 336 AND ALLOWED THE APPEAL OF THE ASSESSEE AS PER DISCUSSION GIVEN IN PARA 4.8 OF THE ORDER OF CIT(A). 6. THE LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDE R OF ASSESSING OFFICER AND ARGUMENT/CONCLUSION MADE BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER. 7. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE SUBMITTED THAT CIT(A) IS AN APPELLATE AUTHORITY AND IS JUSTIFIED IN FOLLOWING THE RATIO LAID D OWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PR UTHVI BROKERS AND SHAREHOLDERS PVT. LTD.(SUPRA.). HE FURTHER SUBMITTED THAT CI T(A) HAS RIGHTLY ADJUDICATED THIS ISSUE RELATING TO ALLOWABILITY OF DEDUCTION U/ S.80IA(4) OF THE ACT. THE LD. AR FOR THE ASSESSEE ALSO MENTIONED THAT RE VENUE HAS NO OBJECTION IN TREATING THE MANUFACTURING ACTIVITIES OF THE ASSESSEE AS INFRASTRUCTURAL ACTIVITIES AS DEFINED U/S.80IA(4) OF THE ACT. B RINGING OUR ATTENTION TO PARA 4.8 OF THE ORDER OF CIT(A), LD. AR FOR THE ASSESSEE PRAYED FOR CONFIRMING THE ORDER OF CIT(A) WITHOUT ANY AMENDMENT. 8. WE HAVE HEARD BOTH THE PARTIES ON THE SOLITARY ISSUE AND THE QUESTION THAT ARISES BEFORE US RELATES TO WHETHER THE CIT(A) IS JU STIFIED IN ENTERTAINING 4 ITA NO. 869/PUN/2016 A.Y.2010-11 FRESH CLAIM OF THE ASSESSEE RELATING TO ALLOWABILITY OF CLAIM OF D EDUCTION U/S.80IA(4) OF THE ACT. IN THIS REGARD, IN THE LIGHT OF THE JU DGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. PRUTH VI BROKERS AND SHAREHOLDERS PVT. LTD.(SUPRA.), WE ARE OF THE CONSIDERED OPIN ION THAT CIT(A), BEING APPELLATE AUTHORITY, IS RIGHT IN ASSUMING JURISDICTION IN ENTERTAINING THE CLAIM OF THE ASSESSEE AND ALLOWING THE CLAIM OF DEDUCTION U/S .80IA(4) OF THE ACT. WE PERUSE THE CONTENTS OF PARA 4.8 OF THE SAID APPE LLATE ORDER. FOR THE SAKE OF COMPLETENESS, THE SAME ARE EXTRACTED AS UNDER: 4.8 FURTHER, THE CLAIM OF SECTION 80IA THOUGH THROUG H A LETTER AMIDST AO IS ADMISSIBLE BEFORE ME IN VIEW OF JURISDICTIONAL H IGH COURT DECISION IN THE CASE PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD. (349 ITR 336) WHEREIN IT IS HELD INTERALIA AS UNDER : IT IS WELL SETTLED THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE A UTHORITIES, BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE T HEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETHER O R NOT TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOW EVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME . THAT THEY MAY CHOOSE NOT TO EXERCISE THEIR JURISDICTION IN A GIVE N CASE IS ANOTHER MATTER. THE EXERCISE OF DISCRETION IS ENTIRELY DIFF ERENT FROM THE EXISTENCE OF JURISDICTION. GOETZE WAS CONFINED TO A CASE WHERE THE CLAIM WAS MADE ONLY BEFORE THE AO AND NOT BEFORE TH E APPELLATE AUTHORITIES. THE JURISDICTION OF THE APPE LLATE AUTHORITIES TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE SUPREME COURT IN THIS JUDGMENT. ON FACTS, THERE WAS NOTHING TO SHOW THAT THE CLAIM ENTERTAINED BY THE C IT(A) /ITAT WAS IMPROPER. (JAI PARABOLIC 306 ITR 42 (DEL.) REF ERRED) IN THE INSTANT CASE THE ASSESSEE HAS MADE CLAIM OF SECTION 80IA AND FILED ALL DETAILS WITH AO. THE AO HAS EXAMINED THE SAME AND THEN DENIED IT STATING THAT THE FLY ASH IS ONE OF THE IN GREDIENTS IN MANUFACTURE OF POZZOCRETE. THIS VIEW OF AO IS NOT CORRECT. ON E XAMINATION OF COMPOSITION OF POZZOCRETE IT IS OBSERVED THAT FLY A SH IS THE MAJOR COMPONENT. POZZOCRETE IS PROCESSED FLY ASH FOR ECO FRIENDLY, MORE DURABLE AND PERFORMANCE IMPROVED CONCRETE. IT IS OBTAINED B Y PROCESSING FLY ASH PRODUCT AS A BY-PRODUCT AT COAL-FIRED ELECTRICITY G ENERATING POWER STATIONS. THE WORD SOLID WASTE MANAGEMENT IS NOT DE FINED IN INCOME TAX. AS PER GLOSSARY OF ENVIRONMENT STATISTICS SOLID WAS TE MANAGEMENT REFERS TO THE SUPERVISED HANDLING OF WASTE MATERIAL FROM G ENERATION AT THE SOURCE THROUGH THE RECOVERY PROCESSES TO DISPOSAL. IN THE INSTANT CASE THE ASSESSEE PROCURES THE FLY ASH FROM MSEB. THE FLY AS H SO PROCURED IS PROCESSED AND POZZOCRETE. POZZOCRETE HAS A SUCCESSF UL HISTORY 'OF USE IN CONCRETE AROUND THE WORLD AS POZZOLANIC MATERIAL THEREFORE ASSESSEE IS HANDLING THE WASTE MATERIAL GENERATED FROM COAL FIR ED ELECTRICITY GENERATING POWER STATIONS TO ITS FINAL DISPOSAL. TH IS MAKES THE ASSESSEE QUALIFY AS SOLID WASTE MANAGEMENT COMPANY . IN VIEW OF THE AFORESAID DISCUSSION AND FACTS OF THE CASE THE ASSESSEE BEING SOLID WASTE MANAGEMENT COMPANY AS ENVISAGED UNDER SECTION 80IA( 4) EXPLANATION C, IN MY OPINION, AS IT QUALIFIES THE CONDITION MENTIONED UNDER SECTION 80IA(4), IT IS ENTITLED FOR DEDUCTION UNDER SECTION 80IA OF THE ACT . THE AO IS DIRECTED TO ALLOW THE CLAIM OF SECTION 80IA AFTER PROPER VERIFICATION. 5 ITA NO. 869/PUN/2016 A.Y.2010-11 CONSIDERING THE ABOVE FACTS AND THE SETTLED POSITION OF LA W, WE ARE OF THE OPINION THAT THE ORDER OF CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. AS SUCH, THERE IS NO MERIT IN THE OBJ ECTION OF REVENUE IN THE GROUND FOR TREATING THE MANUFACTURING ACTIVITIES OF POZ ZOCRETE FROM FLY- ASH AS INFRASTRUCTURAL ACTIVITIES WITHIN THE SCOPE OF THE PR OVISIONS OF SECTION 80IA(4) OF THE ACT. ACCORDINGLY, GROUND NO.1 RAISED IN APPEAL BY THE REVENUE IS DISMISSED . 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 24 TH DAY OF OCTOBER, 2018. SD/- SD/- ( ! /VIKAS AWASTHY) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; !' / DATED : 24 TH OCTOBER, 2018. SB ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL)-1, NASHIK. 4. THE PR. CIT-1, NASHIK. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // * 2 / BY ORDER, 3 (- /PRIVATE SECRETARY * () , / ITAT, PUNE.