JAGDISH PRASAD M. JOSHI, V. DCIT CEN CIR 11,

MA 282/MUM/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2701 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2000-2001
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUDOPL N DSOUZA
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J B ENCH, MUMBAI , , !'# , $ % BEFORE SHRI VIJAY PAL RAO,JUDICIAL MEMBER & SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER M.A.NO.282/MUM/2014 ARISING OUT OF I . T.A. NO.5224/MUM/2012 ASSESSMENT YEAR :2000-2001 SHRI JAGDISHPRASAD M. JOSHI, 6 TH FLOOR, JMJ HOUSE, ORCHARD AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI-400 076 / VS. THE DCIT, CENTRAL CIRCLE11, OLD CGO BLDG. (ANNEX), MUMBAI-400 020 M.A.NO.283/MUM/2014 ARISING OUT OF I.T.A. NO.5225/MUM/2012 ASSESSMENT YEAR :2002-03 SHRI JAGDISHPRASAD M. JOSHI, 6 TH FLOOR, JMJ HOUSE, ORCHARD AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI-400 076 / VS. THE DCIT, CENTRAL CIRCLE11, OLD CGO BLDG. (ANNEX), MUMBAI-400 020 M.A.NO.366/MUM/2014 ARISING OUT OF I.T.A. NO.5082/MUM/2012 ASSESSMENT YEAR :2002-03 SHRI JAGDISHPRASAD M. JOSHI, 6 TH FLOOR, JMJ HOUSE, ORCHARD AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI-400 076 / VS. THE DCIT, CENTRAL CIRCLE11, OLD CGO BLDG. (ANNEX), MUMBAI-400 020 366-MA JAGDISHPRASAD JO SHI 2 MA NO.284/MUM/2014 ARISING OUT OF ITA NO. 6631/MUM/2011 ASSESSMENT YEAR :2003-04 SHRI JAGDISHPRASAD M. JOSHI, 6 TH FLOOR, JMJ HOUSE, ORCHARD AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI-400 076 / VS. THE DCIT, CENTRAL CIRCLE11, OLD CGO BLDG. (ANNEX), MUMBAI-400 020 & $ ./ ' ./ PAN/GIR NO. : AAAPJ 5006B APPLICANT .. RESPONDENT ) APPLICANT BY SHRI RAVI KHANDELWAL / NEELKANT KHANDELWAL RESPONDENT BY SHRI RUDOPL N. DSOUZA ) *+$ / DATE OF HEARING :23/01/2015 ,-. ) *+$ / DATE OF PRONOUNCEMENT :28/01/2015 / / O R D E R PER N.K.BILLAIYA, J.M: MISCELLANEOUS APPLICATION NOS.282, 283, 284 & 366/M UM/2014 BY THE ASSESSEE ARE ARISING OUT OF THE VERY SAME O RDER OF THE TRIBUNAL IN ITA NOS. 5224/MUM/2012, ITA NO.5225/MUM/2012, 5082/ MUM/2012 & 6631/MUM/2011. ALL THESE MISCELLANEOUS APPLICATIO NS WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. MA NO.284/MUM/2014 (ARISING OUT OF ITA NO.6631/MUM /2011): 366-MA JAGDISHPRASAD JO SHI 3 2. THE ASSESSEE POINTED OUT THAT WHILE DISPOSING OF THE APPEAL, THE TRIBUNAL HAS NOT DISPOSED OF GROUND NO.2 OF THE AP PEAL, WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE THE LD. CIT(A) FAILED TO APPRECIATE THAT THE TRANSACTION OF SALE A ND PURCHASE WAS ENTIRELY WITH M/S. YOGESH PERFUMERY AND ESSENTIAL O IL AND M/S. SACHIN PERFUMERY COSMETICS BEING PROPRIETARY CONCER N AND THUS, BETWEEN TWO ARMS OF THE SAME BUSINESS OF THE ASSESS EE. 3. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE STA TED THAT THE ISSUE RAISED VIDE GROUND NO.2 WHICH REMAINS TO BE DECIDE D IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE PROVISIONS OF SECTION 80 IB(13) OF THE ACT. 4. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBU NAL. WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE. GROUND NO.2 STA TED HEREINABOVE WAS NOT DISPOSED OF IN ITA NO.6631/MUM/2011. WE ACCORD INGLY, DECIDE THIS GROUND WHICH WILL COME AFTER PARA-11 OF THE ORDER O F THE TRIBUNAL AS PARA -11(A). PARA-11(A): WE HAVE CAREFULLY PERUSED THE ORDER OF THE AUTHORITIES BELOW VIZ-A-VIZ GROUND TAKEN BY THE REV ENUE. THE ISSUE RAISED BY THIS GROUND ARE DEALT WITH IN SECTION 80I B (13) OF THE ACT WHICH HAS TO BE READ WITH 80 IA(8), WHICH READS AS UNDER: 80IA (8) WHERE ANY GOODS (OR SERVICES) HELD FOR TH E PURPOSES OF THE ELIGIBLE BUSINESS ARE TRANSFERRED T O ANY OTHER BUSINESS CARRIED ON BY THE ASSESSEE, OR WHERE ANY G OODS (OR SERVICES) HELD FOR THE PURPOSES OF ANY OTHER BUSINE SS CARRIED ON BY THE ASSESSEE ARE TRANSFERRED TO THE ELIGIBLE BUS INESS AND, IN EITHER CASE, THE CONSIDERATION, IF ANY, FOR SUCH TR ANSFER AS RECORDED IN THE ACCOUNTS OF THE ELIGIBLE BUSINESS D OES NOT CORRESPOND TO THE MARKET VALUE OF SUCH GOODS (OR SE RVICES) AS ON THE DATE OF THE TRANSFER, THEN, FOR THE PURPOSES OF THE DEDUCTION 366-MA JAGDISHPRASAD JO SHI 4 UNDER THIS SECTION, THE PROFITS AND GAINS OF SUCH E LIGIBLE BUSINESS SHALL BE COMPUTED AS IF THE TRANSFER, IN EITHER CA SE, HAD BEEN MADE AT THE MARKET VALUE OF SUCH GOODS (OR SERVICES ) AS ON THAT DATE: IT IS NOT THE CASE OF THE REVENUE THAT THE TRANSAC TIONS WITH M/S.YOGESH PERFUMERY AND ESSENTIAL OIL & M/S. SACHI N PERFUMERY COSMETICS CARRIED ON BY THE ASSESSEE , THE CONSIDER ATION FOR WHICH TRANSFER AS RECORDED IN THE ACCOUNTS OF THE ELIGIBL E BUSINESS DOES NOT CORRESPOND TO THE MARKET VALUE OF SUCH GOODS AS ON THE DATE OF THE TRANSFER. WE ACCORDINGLY HOLD THAT THE TRANSACTIO NS WITH M/S.YOGESH PERFUMERY AND ESSENTIAL OIL & M/S. SACHIN PERFUMERY COSMETICS ARE WELL COVERED BY THE PROVISIONS OF SECTION 80 I B(13). IN THE RESULT, GROUND NO.2 RAISED BY THE REVENUE IS DISMIS SED. 5. WITH THE ABOVE AMENDMENT TO THE ORDER OF THE TR IBUNAL IN ITA NO.6631/MUM/2011, THE MISCELLANEOUS APPLICATION NO. 284/MUM/2014 IS ALLOWED. MA NO.366/MUM/2014(ARISING OUT ITA NO.5082/MUM/2012 ): 6. WITH THIS MISCELLANEOUS APPLICATION THE ASSESSEE BRINGS TO THE NOTICE OF THE TRIBUNAL THAT WHILE DECIDING THE AP PEAL THE TRIBUNAL HAS CONSIDERED GROUND NO.2 FOR ASSESSMENT YEARS 2001-02 AND 2002-03 AS IDENTICAL , WHEREAS FOR ASSESSMENT YEAR 2002-03 THE ASSESSEES GROUND OF APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW HE HAS ERRED IN DENYING THE DEDUCTION U/S.80IA/80IB IN RESPECT OF INCOME FROM JOB WORK (WHICH IS PART OF MANUFACTURING ACTIVITIES ) HOLDING THAT THE SAME HAS NO NEXUS WITH THE INDUSTRIAL UNDERTAKI NG. INTER-ALIA THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 8 0 IB ON INTEREST INCOME/OTHER INCOME/JOB WORK INCOME. 366-MA JAGDISHPRASAD JO SHI 5 7 BEFORE US THE LD. COUNSEL FOR THE ASSESSEE POINT ED OUT THAT THOUGH THE CLAIM OF DEDUCTION U/S.80IB IS COMMON IN A.Y 20 00-01 AND 2002-03, HOWEVER, FOR INCOME TAX ASSESSMENT YEAR 2002-03, TH E GROUND OF APPEAL ALSO INCLUDED INCOME FROM JOB WORK AND OTHER INCOM E. 8. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBU NAL VIZ-A-VIZ ORDERS OF THE AUTHORITIES BELOW. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL IN ASSESSMENT YEAR 2002-03. THE ASSES SEE HAS ALSO CLAIMED DEDUCTION U/S.80 IB IN RESPECT OF OTHER INCOME AND JOB WORK CHARGES. WE HAVE ALSO CAREFULLY PERUSED THE ASSESSMENT ORDER . UNDOUBTEDLY, THE JOB WORK CHARGES ARE DIRECTLY RELATED WITH THE BUSI NESS OF THE ASSESSEE, HENCE, ELIGIBLE FOR DEDUCTION U/S. 80 IB OF THE AC T. WE ORDER ACCORDINGLY. HOWEVER, IN RESPECT OF THE CLAIM OF O THER INCOME WHICH RELATES TO SUNDRY BALANCES WRITTEN BACK, WE FIND T HAT THE SUNDRY BALANCES WRITTEN BACK RELATES TO THE PURCHASES/EXPENSES MADE IN THE EARLIER YEARS. HOWEVER, THIS FACT NEEDS TO BE VERIFIED BY THE AO. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE AO FOR THE LIMITED PU RPOSE OF VERIFICATION OF THE WRITTEN BACK AMOUNT RELATING TO THE PURCHASES/E XPENSES OF EARLIER YEARS. THE AO IS DIRECTED TO VERIFY AND IF FOUND TO BE RELATED WITH THE PURCHASES /EXPENSES OF EARLIER YEARS, THE SAME HAS TO BE TREATED AS ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. WITH THESE MODIFICATIONS TO THE ORDER OF THE TRIBUNAL IN ITA NO.5082/MUM/2012, MA NO.366/MUM/2014 IS TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. MA NO.282 & 283/MUM/2014 (ARISING OUT OF ITA NOS. 5224 & 5225/MUM/2012): 9. THE COMMON GRIEVANCE RAISED BY THESE TWO MISCEL LANEOUS APPLICATIONS RELATE TO THE FINDINGS GIVEN BY THE T RIBUNAL FOR GROUND NO.2 366-MA JAGDISHPRASAD JO SHI 6 OF THE APPEAL FILED BY THE REVENUE FOR ASSESSMENT Y EARS 2000-01 AND 2002-03. 10. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE PO INTED OUT THAT THE TRIBUNAL AT PARA -13 ON PAGE -8 OF ITS ORDER HAS CO NSIDERED THE ISSUES RAISED BY THE REVENUE AS MENTIONED ON PARA-12 AT PA GE-8 OF ITS ORDER AND AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AT PARA-18 THE TRIBUNAL HAS DISMISSED THE REVENUES APPEAL. 11. IT IS THE SAY OF THE LD. COUNSEL THAT AT THE T IME OF HEARING ITSELF IT WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL THAT THE REVENUES GROUND RELATES TO BOGUS AND FABRICATED PURCHASE AND SALE WITH TWO ARMS OF THE SAME BUSINESS OF THE ASSESSEE WHICH MEANS THAT THE GRIEVANCE OF THE REVENUE ONLY RELATED TO THE SALE MADE BY ONE CONCER N OF THE ASSESSEE TO ANOTHER CONCERN OF THE ASSESSEE. 12. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIB UNAL VIZ-A-VIZ GROUND NO.2 OF THE REVENUE IN ASSESSMENT YEAR 2000- 2001 AND 2002-03. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. IT IS AN UNDISPUTED FACT THAT THERE IS NO ISSUE/DISPUTE IN RELATION TO THIRD PARTY SALES, WHEREAS THE TRIBUNAL HAS CONSIDERED AND ACCEPTED THE GENUIN ENESS OF THE SALES MADE TO : (I) M/S. SURYAVINAYAK AROMATICS (II) LAVE ESHA ENTERPRISES (III) JAYWANT INDUSTRIES LTD. & (IV) JAYWANT PRODUCTS LTD . 13. AFTER PARA -17 OF THE TRIBUNALS ORDER FOLLOWIN G PARA -17(A) IS TO BE INSERTED WHICH READS AS UNDER: PARA-17(A) :TO COMPLETE THE ADJUDICATION WE HAVE CONSIDERED THE SALES MADE TO AFOREMENTIONED PARTIES THOUGH THE SALE MADE TO THESE PARTIES IS NOT THE ISSUE RAISED BY THE REV ENUE IN ITS GROUND. 366-MA JAGDISHPRASAD JO SHI 7 14. WITH THE ABOVE OBSERVATIONS, MA NOS.282 & 283/M UM/2014 ARE ALLOWED. 15. IN THE RESULT, MISCELLANEOUS APPLICATIONS NOS .284, 282 & 283/MUM/2014 ARE ALLOWED AND MA NO.366/MUM/2014 IS ALLOWED FOR STATISTICAL PURPOSE FOR LIMITED PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2015 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 0 DATED 28/01/2015 . . ./ RJ , SR. PS / / / / ) )) ) 1* 1* 1* 1* 2.* 2.* 2.* 2.* / COPY OF THE ORDER FORWARDED TO : 1. &3 / THE APPELLANT 2. 14&3 / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 67 1* , , / DR, ITAT, MUMBAI 6. 78 9 / GUARD FILE. / / / / / BY ORDER, 4* 1* //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI