M/S. STABLIX SOLUTIONS (P) LTD V. UNION OF INDIA

WP(C)/22046/2014

AI Insights

The case involves M/S. Stablix Solutions (P) Ltd., which filed a writ petition against the Union of India and other respondents concerning the rejection of their stay petition for two assessment years, 2005-06 and 2006-07. The core issue was the denial of exemption under Section 10B of the Income Tax Act, specifically due to non-compliance with the conditions of sub-section (2), clause (iii), which pertains to the use of previously used machinery or plant. The petitioner argued that the computers in question were not capitalized, thus should not disqualify them from the exemption. The court decided to keep the recovery in abeyance pending the decision on the appeal, provided the petitioner complies with the financial condition set by the court.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 739181 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 25-08-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: M NAMBIAR; P MENON; P THOMAS; K MATHAI; JOSON ALAN; KURYAN THOMAS
• Keywords: Appeal; Assessment Order; Exemption; Income Tax; Stay Petition
• Section: 10B

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY , THE 25TH DAY OF AUGUST 2014/3RD BHADRA, 1936 WP(C).NO. 22046 OF 2014 (E) ---------------------------- PETITIONER(S): -------------------------- M/S. STABLIX SOLUTIONS (P) LTD., 212, NILA TECHNOPARK CAMPUS, THIRUVANANTHAPURAM- 695 581, REPRESENTED BY ITS AUTHORISED SIGNATORY MR.ABHILASH .K. BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR, SRI.P.GOPINATH MENON, SRI.P.BENNY THOMAS, SRI.K.JOHN MATHAI, SRI.JOSON MANAV ALAN, SRI.KURYAN THOMAS. RESPONDENT(S): ---------------------------- 1. THE UNION OF INDIA, REPRESENTED BY THE SECRETARY , MINISTRY OF FINANCE, (DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI- 110 001. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, KOWDIYAR, THIRUVANANTHAPURAM- 695 003. 3. THE INCOME TAX OFFICER, WARD 1(1), AAYAKAR BHAVAN, KOWDIYAR, THIRUVANANTHAPURAM -695 003. BY ADV. SRI.JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. WP(C).NO. 22046 OF 2014 (E) APPENDIX PETITIONER'S EXHIBITS:- EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 05/03/2013 FOR 2005-06 TO THE PETITIONER BY THE 3RD RESPONDENT. EXHIBIT P2 COPY OF THE ASSESSMENT ORDER DATED 06/03/2013 FOR 2006-07 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT. EXHIBIT P3 COPY OF THE APPEAL DATED 05/04/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT (AY 2005-06). EXHIBIT P4 COPY OF THE APPEAL DATED 05/04/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT (AY 2006-07). EXHIBIT P5 COPY OF THE STA Y PETITION DATED 05/04/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT (AY 2005-06). EXHIBIT P6 COPY OF THE STA Y PETITION DATED 05/04/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT (AY 2006-07). EXHIBIT P7 COPY OF THE INTERIM ORDER IN ITA NO.32/2011 DATED 11/03/2011 ISSUED TO THE PETITIONER BY THIS HON'BLE COURT. EXHIBIT P8 COPY OF THE ORDER DATED 12/08/2014 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P9 COPY OF THE PETITION FOR THE YEAR 2005-06 DATED 18/08/2014 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P10 COPY OF THE PETITION FOR THE YEAR 2006-07 DATED 18/08/2014 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.A. TO JUDGE rs. K.VINOD CHANDRAN, J - - - - - - - - - - - - - - - - - - - - W.P.(C).No. 22046 of 2014 - - - - - - - - - - - - - - - - Dated 25th August, 2014 - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT The petitioner is aggrieved by the order passed at Ext.P8 wherein the stay petition in the appeal was rejected for two assessment years, being 2005-06 and 2006-07. The essential additions made in the assessment order are with respect to the exemption claimed under Section 10B of the Income Tax Act (for short 'the Act'). The ground on which such exemption was declined was for reason of non compliance of the conditions in sub- section (2) of Section 10B, specifically clause (iii) of the Act. As per the aforesaid clause, if the Unit claiming exemption has obtained transfer of a machinery or plant which has been previously used for any purpose, then, exemption shall not be granted. The assessee contends that since the computers which are said to be leased out was not capitalized, the same would not dis-entitle the petitioner under clause (3). The learned Standing WP(C).22046/14 2 Counsel contends that since no capitalization has been specifically referred to in the provision, on acceptance of plant and machinery which has been previously used, the assessee would be dis- entitled from claiming exemption. For the previous years, similar question was raised and the same is pending in appeal before this Court, is the contention. In such circumstances, this Court is of the opinion that the recovery can be kept in abeyance on condition of the petitioner remitting 30% of the amounts demanded in both the orders, within a period of six weeks from today. Ext.P8 shall stand modified to that extent. On the petitioner complying with the condition, the appeal shall be disposed of on merits and recovery shall be kept in abeyance till then. The writ petition stands disposed of. Sd/- K.VINOD CHANDRAN Judge Mrcs //True Copy// "