M/s. EDAC Engineering Limited, CHENNAI V. DCIT, CHENNAI

MA 28/CHNY/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7718 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-03-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 16-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER .. M.P. NO. 28/MDS/2011 (IN I.T.A. NO. 1606/MDS/2011) ASSESSMENT YEAR : 2002-03 M/S EDAC ENGINEERING LIMITED FORMERLY M/S SPIC JEL ENGINEERING CONSTRUCTION LTD., SPIC HOUSE, 88, MOUNT ROAD, GUINDY, CHENNAI - 600 032. PAN : AABCS0231G (PETITIONER) V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY RANGE V(1), CHENNAI - 600 034 . (RESPONDENT) PETITIONER BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI SHAJI P. JACOB DATE OF HEARING : 16.3.2012 DATE OF PRONOUNCEMENT: 30.3.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS MISCELLANEOUS PETITION FILED BY THE ASSES SEE, ITS GRIEVANCE IS THAT THE TRIBUNAL HAD DIRECTED THE ASS ESSING OFFICER TO LOOK INTO THE DETAILS OF ALL THE PROJECTS AND DISAL LOW AMOUNTS RELATABLE TO MANPOWER FOR SHUTTING DOWN OF THE PROJECT. AS P ER THE ASSESSEE, M.P. NO. 28/MDS/11 2 SINCE THE TRIBUNAL USED THE TERM ANY PROJECT IN P ARA 8 OF ITS ORDER, THE ASSESSING OFFICER WAS ENABLED TO GO INTO THE DE TAILS OF ALL THE THREE PROJECTS, WHEREAS THE QUESTION OF SHUTTING DO WN WAS NOT AT ALL THERE IN RELATION TO TWO PROJECTS AT NETHERLANDS AN D SHARJAH. AS PER THE ASSESSEE, THEREFORE, THERE WAS A REQUIREMENT TO ISSUE NECESSARY CLARIFICATION ON THE ORDER OF THE TRIBUNAL IN THE I NTEREST OF JUSTICE. 2. SHORT FACTS APROPOS ARE THAT THIS TRIBUNAL HAD, IN ASSESSEE'S OWN CASE FOR EARLIER ASSESSMENT YEAR IN I.T.A. NO. 1777/MDS/06 DATED 30.11.2007, HELD THAT SHUTTING DOWN OF REFINE RY WOULD NOT QUALIFY AS FOREIGN PROJECT FOR THE PURPOSE OF CLAIM ING OF DEDUCTION UNDER SECTION 80HHB OF INCOME-TAX ACT, 1961 (IN SHO RT 'THE ACT'). THIS PARTLY OVERRULED THE LD. CIT(APPEALS) WHO HELD THAT SECTION 80HHB PROVIDED FOR DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM EXECUTION OF ANY TYPE OF FOREIGN PROJECT. IN SHORT , THE VIEW TAKEN BY THE TRIBUNAL WAS THAT NO DEDUCTION UNDER SECTION 80 HHB OF THE ACT WILL BE AVAILABLE ON MANPOWER EMPLOYED FOR SHUTTING DOWN WORK IN RELATION TO A FOREIGN PROJECT. FOR THE IMPUGNED AS SESSMENT YEAR, ASSESSEE HAD THE FOLLOWING PROJECTS AS SEEN FROM TH E TRIBUNAL ORDER (SUPRA).:- M.P. NO. 28/MDS/11 3 (I) THERMIT, WELDING, STACKER AND RECLAIMER RAIL WORK A T SHARJAH CEMENT FACTORY M/S GULF SPIC ENGINEERING. (II) ERECTION & INSTALLATION OF STEAM TURBINE, MECHANICA L ERECTION WORKS FOR M/S CURACO JURONG ENGINEERING, NETHERLANDS. (III) FABRICATION & ERECTION WORK FOR REFINERY SHUT DOWN & FERTIL SHUT DOWN FROM M/S KUWAIT NATIONAL PETROLEUM COMPANY. THE FINDING OF THE TRIBUNAL WITH REGARD TO THE ARGU MENT OF THE ASSESSEE THAT SECTION 80HHB CLAIM MUST BE ALLOWED O N ALL THE THREE PROJECTS, WAS AS UNDER:- FROM THE ABOVE IT IS SEEN THAT OUT OF THE THREE WOR KS, ONLY ONE WORK INVOLVED REFINERY SHUT DOWN AND FERTI L SHUT DOWN, WHICH IS FROM KUWAIT NATIONAL PETROLEUM COMPANY. T HE OTHER TWO WORKS SEEM TO BE ERECTION AND INSTALLATION. EVEN T HE TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR THE EARLIER YEAR HAS ON LY HELD THAT THE WORK IN CONNECTION WITH SHUT DOWN OF REFINERY W ILL NOT QUALIFY AS FOREIGN PROJECT AS DEFINED IN SUB-SECTION 92)9II ) THE ASSEMBLY OR INSTALLATION OF ANY MACHINERY OR PLANT OUTSIDE INDIA OF SECTION 80HHB. THUS, IN THIS CASE, THE EARLIER ORDER OF THIS TRIBUNAL WOULD BE APPLICABLE FOR THE FOLLOWING WORK :- (I) FABRICATION & ERECTION WORK FOR REFINERY SHUT DOWN & FERTIL SHUT DOWN FROM M/S KUWAIT NATIONAL PETROLEUM COMPANY. IN RESPECT OF THE OTHER TWO WORKS UNDERTAKEN BY THE ASSESSEE, IT APPEARS THAT THEY ARE FOR ASSEMBLING AND INSTALLATI ON. HENCE, WE DIRECT THE ASSESSING OFFICER TO LOOK INTO THE DETAI LS OF THE WORKS AND DISALLOW THE AMOUNT IN CONNECTION WITH MA NPOWER RELATING TO SHUT DOWN OF ANY PROJECT. THUS, THIS I SSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE ABOVE DIRECTION. M.P. NO. 28/MDS/11 4 3. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT THE E ARLIER ORDER OF THE TRIBUNAL COVERED ONLY SHUT DOWN OF REFINERY WHI CH WAS HELD AS NOT QUALIFYING AS A FOREIGN PROJECT FOR DEDUCTION UNDER SECTION 80HHB OF THE ACT. ACCORDING TO HIM, AMONG THE ABOVE THREE P ROJECTS, SHUT DOWN WAS THERE ONLY IN THE CASE OF REFINERY OF M/S KUWAIT NATIONAL PETROLEUM COMPANY. THEREFORE, ORDER OF THE TRIBUNA L WAS NOT CLEAR, SINCE IT APPEARED THAT THE DIRECTION GIVEN BY THE T RIBUNAL GAVE LIBERTY TO THE A.O. FOR GOING INTO THE PROJECTS RELATING TO M/S GULF SPIC ENGINEERING AND M/S CURACO JURONG ENGINEERING AS WE LL. 4. PER CONTRA, LEARNED D.R. SUBMITTED THAT THERE WA S NO MISTAKE IN THE ORDER OF TRIBUNAL IN WHICH IT HAD REQUIRED THE A.O. TO LOOK INTO THE DETAILS OF THE WORKS AND DISALLOW THE AMOUNT IN CON NECTION WITH MANPOWER RELATING TO SHUT DOWN OF ANY PROJECT. 5. WE HAVE PERUSED THE ORDER OF THE TRIBUNAL AS ALS O CAREFULLY HEARD THE RIVAL SUBMISSIONS. NO DOUBT, THE TRIBUNA L HAD HELD IN ASSESSEE'S OWN CASE FOR EARLIER YEAR THAT SHUT DOWN OF REFINERY WOULD NOT QUALIFY AS FOREIGN PROJECT FOR THE PURPOSE OF D EDUCTION UNDER SECTION 80HHB OF THE ACT. FOLLOWING SUCH EARLIER O RDER, THIS TRIBUNAL FOR THE IMPUGNED ASSESSMENT YEAR ALSO HELD THAT WOR K IN CONNECTION M.P. NO. 28/MDS/11 5 WITH SHUT DOWN OF REFINERY WOULD NOT QUALIFY AS A F OREIGN PROJECT. THE REASON WHY SUCH CONCLUSION WAS DRAWN WAS THAT SHUT DOWN OF PROJECT INVOLVED MANPOWER UTILIZATION AND EXECUTION OF A F OREIGN PROJECT MENTIONED IN SECTION 80HHB COULD NOT BE EXTRAPOLATE D TO BRING INTO ITS REALM, SUPPLY OF MANPOWER. IF WE LOOK AT FROM THIS ANGLE, IT IS CLEAR THAT THE TRIBUNAL HAD FOLLOWED ITS EARLIER ORDER AN D DIRECTED THE ASSESSING OFFICER TO LOOK INTO ALL THE WORKS OF THE ASSESSEE AND TO DISALLOW THE CLAIM WITH REGARD TO MANPOWER RELATING TO SHUT DOWN OF ANY PROJECT. IF THE ASSESSEE IS CONVINCED THAT THE WORK RELATING TO M/S GULF SPIC ENGINEERING AND M/S CURACO JURONG ENGINEE RING DID NOT INVOLVE ANY MANPOWER RELATING TO SHUT DOWN, IT CAN VERY WELL SHOW THIS TO THE ASSESSING OFFICER AND GET THE DEDUCTION . THE TRIBUNAL HAD ONLY KEPT OPEN THE ISSUE FOR THE ASSESSING OFFICER TO LOOK AT ALL THE PROJECTS AND DECIDE WHETHER THERE WERE ANY MANPOWER USED FOR SHUTTING DOWN WORK THEREIN. ACCORDINGLY, WE ARE OF THE OPINION THAT THERE IS NO ERROR IN SUCH DIRECTION GIVEN BY THE TR IBUNAL. ASSESSEE HAS NOT BEEN ABLE TO SHOW ANY MISTAKE MUCH LESS ANY MISTAKE APPARENT ON RECORD. THUS, THE MISCELLANEOUS PETITI ON FILED BY THE ASSESSEE IS DEVOID OF ANY MERITS. M.P. NO. 28/MDS/11 6 6. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30 TH MARCH, 2012. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH MARCH , 2012. KRI. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE