KDS Wind Farms Pvt Ltd., Pollachi V. DCIT, Coimbatore

MA 100/CHNY/2019

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5069 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 7 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-10-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 24-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा.जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER Miscellaneous Application No.100/Chny/2019 (in ITA No.1261/Chny/2017) िनधा रण वष /Assessment Year: 2013-14 M/s.K D S Wind Farms Pvt. Ltd., 75/1, Dr.Ansari Street, Pollachi-642 001. [PAN: AAECK 7320 E] v. The Dy. Commissioner – of Income Tax, Corporate Circle-1, Coimbatore. (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Shri T. Banusekar, Adv. यथ क ओर से /Respondent by : Shri Sajit Kumar, JCIT सुनवाई क तारीख/Date of Hearing : 13.10.2023 घोषणा क तारीख /Date of Pronouncement : 29.11.2023 आदेश / O R D E R PER MANJUNATHA.G, AM: The assessee has filed present Miscellaneous Application u/s.254(2) of the Income Tax Act, 1961, against the order of the Tribunal in ITA No.1261/Chny/2017 dated 27.11.2018, and pertains to assessment year 2013-14. 2. The assessee has narrated the facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 27.11.2018 MA No.100/Chny/2019 (in ITA No.1261/Chny/2017) :: 2 :: and relevant contents of Miscellaneous Application filed by the assessee for the AY 2013-14 in ITA No.1261/Chny/2017 are reproduced as under: The petitioner is a company assessed to tax by the Deputy Commissioner of Income Tax, Corporate Circle - 1, Chennai. For the assessment year 2013-14, the Assessing Officer completed assessment u/s.143(3) vide order dated 29.01.2016 disallowed the claim of deduction u/s.80-IA and brought the entire income to tax. Aggrieved by the assessment order, the petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) - 1, Coimbatore. The Commissioner of Income Tax (Appeals) vide order dated 23.02.2017 allowed the appeal of the petitioner. Thereafter, the revenue filed an appeal before the Hon'ble Income Tax Appellate Tribunal against the order of the Commissioner of income Tax (Appeals) and the petitioner filed its memorandum of cross objections. The Hon'ble Income Tax Tribunal vide order dated 27.11.2018 in ITA No.1261/Chny/2017 and CO No.112/Chny/2017 set aside the order of the Commissioner of Income Tax (Appeals) on the issue of deduction u/s.80-IA and restored the order of the Assessing Officer. In this connection, it is most humbly submitted that the Hon'ble Income Tax Tribunal has at para 6.1 of page 5 held as follows: "6.1 It is an admitted fact that the firm, M/s.Kalyani Distribution Services, who was carrying on the business of wholesale pharmaceutical distribution, had also installed windmills in various assessment years, which was purchased in firm's name. Thus, the findings of the Id.CIT(A) that the firm was renamed as M/s.KDS Wind Farms and was] subsequently converted into a private limited company is not factually correct. Because, we find from the assessment order that M/s.Kalyani Distribution Services (assessed to tax with PAN: AAIFK6480E) dealing with pharmacy and windmills had been split upon 10.03.2012 into two entities viz., M/s.Kalyani Distribution Services (with different PAN: AAMFK0290Q assessed to tax in NCC-4, Coimbatore) dealing with only pharmacy and the other entity M/s.KDS Wind Farms dealing with only windmills was subsequently formed into a company by name M/s.Kalyani Distribution Services is simply renamed as M/s.KDS Wind Farms and functioning an organization, then, M/s.KDS Wind Farms should have continued the entire business of pharmacy as well as windmill and M/s.Kalyani Distribution Services would not have been existed anymore. By virtue of these facts, it is clear that the assessee has not fulfilled all the conditions laid down under section 80IA(3) of the Act. The case law filed by the assessee has no application to the facts of the present case. In view of the above, we set aside the order of the Id. CIT(A) on this issue and restore that of the Assessing Officer." In this connection, it is most humbly submitted that on 11.03.2012, a new partnership firm was formed under the name and style of Kalyani Distribution Services in which the primary business was wholesale distribution of chemist, drugs and pharma. On the very same day, the old firm Kalyani Distribution Services was reconstituted and renamed as KDS Wind Farms and the business of windmills and non-conventional energy was continued in the old firm. It is pertinent to note that the windmills were held by the same firm and that there was no splitting of the windmill business in respect of which deduction u/s.80-IA has been claimed. MA No.100/Chny/2019 (in ITA No.1261/Chny/2017) :: 3 :: Hence, it is most humbly submitted that the observation by the Hon'ble Tribunal that M/s.Kalyani Distribution Services dealing with pharmacy and windmills had been split into two entities viz.Kalyani Distribution Services dealing with only pharmacy and KDS Wind Farms dealing only with windmills is factually incorrect. Since the above mentioned error is apparent from record, it is most humbly prayed that the Hon'ble Tribunal may be pleased to rectify the same arising from the order of the Hon'ble Tribunal in ITA No.1261 /Chny/2017 and CO No.112/Chny/2017 for the impugned assessment year, dated 27.11.2018. The petitioner also prays for a condonation of any delay that may have occurred in the filing of this petition. The petitioner undertakes to produce ail the necessary material before the Hon'ble Tribunal for it to decide the matter on merits, if this petition is allowed. 3. We have heard both the sides and considered the contents of Miscellaneous Application filed by the assessee in light of order of the Tribunal in ITA No.1261/Chny/2017 and we find that the Tribunal at Para No.6.1 on Page No.5, had recorded categorical findings that it is an admitted fact that the firm M/s.Kalyani Distribution Services, who was carrying on the business of wholesale pharmaceutical distribution, had also installed windmills in various assessment years, which was purchased in firm’s name. Thus, the findings of the Ld.CIT(A) that the firm was renamed M/s.KDS Wind Farms Pvt. Ltd., and subsequently converted into a Private Ltd. Co., is not factually correct. Because, from the assessment order that M/s.Kalyani Distribution Services, dealing with pharmacy and M/s.KDS Wind Farms Pvt. Ltd., had been split up on 10.03.2012 into two entities, viz., M/s.Kalyani Distribution Services dealing with only pharmacy and other entity M/s.KDS Wind Farms Pvt. Ltd., dealing with only windmills. It was the arguments of the assessee that partnership firm M/s.Kalyani Distribution Services was constituted on 11.03.2012 with the main objects of dealing in pharmacy business and the existing firm M/s.Kalyani MA No.100/Chny/2019 (in ITA No.1261/Chny/2017) :: 4 :: Distribution Services was renamed as M/s.KDS Wind Farms Pvt. Ltd. The said M/s.KDS Wind Farms, a partnership firm had been subsequently converted into M/s.KDS Wind Farms Pvt. Ltd., under Part-9 of the Companies Act, 1956. The Ld.Counsel for the assessee has also explained with reference to PAN numbers of the erstwhile partnership M/s.Kalyani Distribution Services and new partnership firm M/s.Kalyani Distribution Services and argued that it is not a case of the earlier partnership firm has been continued for the purpose of carrying out pharmacy business, but a case of new partnership firm with a new constitution has been formed on 11.03.2012. Although, these facts have been explained before the Tribunal but the Tribunal has recorded findings that an erstwhile firm has been split into two entities i.e. one for pharmacy business and other for windmill business and said findings constitute a mistake apparent on record which needs to be rectified u/s.254(2) of the Act. 4. Having heard both the sides, we find that there is a factual error in the order of the Tribunal in as much as recording a findings that the erstwhile firm M/s.Kalyani Distribution Services with PAN No.AAIFK 6480 E is continued to carrying on the business of pharmacy business after splitting the windmill business into a new partnership firm M/s.KDS Wind Farms, because, earlier partnership firm M/s.Kalyani Distribution Services, was renamed as M/s.KDS Wind Farms, and then, subsequently converted into M/s.KDS Wind Farms, which continued to carry on the business of windmill. The new partnership firm M/s.Kalyani Distribution Services has been MA No.100/Chny/2019 (in ITA No.1261/Chny/2017) :: 5 :: constituted with a separate PAN No.AAMFK0290Q. From the above, it is clear that the findings recorded by the Tribunal in Para No.6.1 of the order dated 27.11.2018 is contrary to the facts available on record, and thus, in our considered view, said findings constitute a mistake apparent on record which needs to be rectified u/s.254(2) of the Act. Thus, we recall the order of the Tribunal dated 27.11.2018 in ITA No.1261/Chny/2017 and direct the Registry to list the appeal for hearing in due course and intimate both the parties. 5. In the result, the Miscellaneous Application filed by the assessee is allowed. Order pronounced on the 29 th day of November, 2023, in Chennai. Sd/- ( वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 29 th November, 2023. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 3. आयकर आयु /CIT 5. गाड फाईल/GF 2. यथ /Respondent 4. िवभागीय ितिनिध/DR