M/s Jay Tuljabhavani Sah. Patpedhi Ltd, Raigad V. ITO, Panvel

ITA 979/PUN/2010

• Counselvise Citation: 97924514 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEERA MALHOTRA
• Assessee Lawyers: NIKHIL PATHAK
• Section: 43B; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 979/PN/2010 : A.Y. 2006-07 JAY TULJABHAVANI SAH. PATPEDHI PRAGATI, PLOT NO. 9, SECTOR 19 NEW PANVEL , DIST. RAIGAD PAN AAAAJ 2329 Q APPELLANT VS. I.T.O. WARD 1, PANVEL RESPONDENT APPELLANT BY: SHRI NIKHIL PATHAK RESPONDENT BY: MS. NEERA MALHOTRA DATE OF HEARING: 28-12-2011 DATE OF PRONOUNCEMENT: 30-12-2011 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT-(A)-I, THANE DATED 26-2-2010 FOR A .Y. 2006-07 ON THE FOLLOWING GROUNDS. 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF COMMISSION PAYMENT OF RS.7,10,470/- U/S 40(A)(IA) OF THE ACT. 2. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ASSESSEE SUBMITS THAT THE LEARNED CIT(A) ERRED IN HOLDING TH AT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION U/ S 80P IN RESPECT OF THE AMOUNT DISALLOWED U/S 40(A)(I A) WITHOUT APPRECIATING THAT THE SAID DISALLOWANCE RESULTED IN HIGHER INCOME FROM BANKING BUSINESS AND ACCORDINGLY, THE DEDUCTION OUGHT TO HAVE BEEN ALLOW ED. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE DISALLOWANCE U/S 40(A)(IA) RESULTED IN HIGHER INCOM E 2 ITA NO. 979/PN/2010 JAY TULJABHAVANI PATPEDHI A.Y. 2006-07 FROM BANKING BUSINESS AND ACCORDINGLY, THE DEDUCTIO N U/S 80P SHOULD HAVE BEEN ALLOWED ON THE AMOUNT DISALLOWED U/S 40(A)(IA) OF THE ACT. 2. AT THE TIME OF HEARING OF THIS APPEAL, THE LEARN ED COUNSEL FOR THE ASSESSEE DID NOT PRESS THE FIRST IS SUE PERTAINING TO CONFIRMATION OF DISALLOWANCE OF COMMI SSION PAYMENT OF RS. 7,10,470/- U/S 40(A)(IA) OF THE ACT. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 3. THE NEXT ISSUE PERTAINS TO THE CLAIM OF DEDUCTIO N U/S 80P IN RESPECT OF THE AMOUNT DISALLOWED U/S 40(A)(I A) OF THE ACT. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE BY DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF DY. CIT VS. BORA AGRO FOODS IN ITA NO. 1438/PN/2 010 FOR A.Y. 2007-08 WHEREIN VIDE ITS ORDER DATED 31-3- 2011, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 3. HAVING GONE THROUGH THE FIRST APPELLATE ORDER, WE FIND THAT THE ISSUE RAISED IS FULLY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH CURT IN THE CASE OF CIT VS. GEM PLUS JEWELLERY INDIA LTD., IN I TA NO 2426 OF 2009 DATED 21-3-2010 HOLDING THAT THE APPELLANT WAS ELIGIBLE FOR ADDITIONAL CLAIM U/S 10A DUE TO ENHANCEMENT OF INCOME ON ACCOUNT OF DISALLOWANCE U/S 43B OF THE ACT. THE HONBLE HIGH COURT WAS PLEASED TO HOLD THEREIN THAT THIS ENHANCEMENT RESUL TED IN INCREASE IN THE BUSINESS PROFIT OF THE ASSESSEE WHICH WAS ELIGIBLE FOR DEDUCTION U/S 10A. THE BOMBAY BENCH OF THE TRIBUNAL IN THE CASE OF SABA SOFTWARE PVT. LTD. VS. ITO IN ITA NO. 1454/BOM/2009 DATED 27-1-2010 HAS ALSO GIVEN SIMILAR DECISION. FOLLOWING THESE DECISIONS AS WELL AS DECISION OF PU NE BENCH OF THE TRIBUNAL IN THE CASE OF VERITAS SOFTWA RE INDIA LTD., ITA NO. 135 AND 1374/PN/2006 IN THIS RESPECT THE LD. CIT(A) HAS ALLOWED THE CLAIMED DEDUCTION U/S 10B OF THE ACT TO THE ASSESSEE ON THE ADDITION MADE BY WAY OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT MADE ON ACCOUNT OF NON-DEDUCTION OF TDS. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER ON THE ISSUE. THE SAME IS UPHELD. THE 3 ITA NO. 979/PN/2010 JAY TULJABHAVANI PATPEDHI A.Y. 2006-07 ISSUE IS THUS DECIDED AGAINST THE REVENUE. RELATED GROUNDS NO. 1 TO 5 INVOLVING THE ISSUE ARE THUS REJECTED. 4. WE ALSO FIND THAT THE AFORESAID DECISION OF THE TRIBUNAL IN THE CASE OF BORA AGRO FOODS (SUPRA) HAS BEEN FOLLOWED BY CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF DY. CIT VS. SHRI AGRASEN SAH. PATSANSTHA MARYADI T, DHULE IN ITA NO. 1459 AND 1460/PN/2005 FOR AY. 1999 -00 AND 2000-01 VIDE ITS ORDER DATED 30-6-2011. SIMILA R VIEW HAS BEEN TAKEN BY ITAT MUMBAI E BENCH IN THE CASE OF S.B. BUILDERS AND DEVELOPERS VS. ITO (2011) 50 DTR 299. FACTS BEING SIMILAR, SO FOLLOWING THE REASONING GIV EN IN THE AFORESAID DECISIONS OF VARIOUS BENCHES OF THE TRIBU NAL, WE DIRECT THE AUTHORITIES BELOW TO ALLOW THE CLAIM OF DEDUCTION U/S 80P MADE BY THE ASSESSEE ON ENHANCED INCOME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON 30-12-2011. SD/- SD/- D. KARUNAKARA RAO SHAILENDRA KUMAR YADAV ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 30 TH DECEMBER 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-(A)-I THANE 4. THE CIT-II THANE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL 4 ITA NO. 979/PN/2010 JAY TULJABHAVANI PATPEDHI A.Y. 2006-07