PRINCIPAL COMMMISSIONER OF INCOME TAX 2 vs. MAPS ENZYMES LIMITED

TAXAP/82/2019HC GujaratGJHC24012542201906 August 2019Author: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE A.C. RAO20 pages
AI SummaryDismissed

What were the facts?

The assessee, Maps Enzymes Limited, filed its return for Assessment Year (AY) 2008-09, claiming deductions under Sections 80IB and 80JJA. The Assessing Officer (AO) reopened the assessment under Section 147, alleging that the deduction claimed under Section 80JJA of Rs. 64,04,327/- was inadmissible as it was the eighth year of business operation, while the deduction was only for five years from the commencement of business. The AO also re-calculated the deduction under Section 80IB. The assessee contended that the business of manufacturing enzymes, qualifying for 80JJA, commenced in FY 2003-04 (AY 2004-05), making AY 2008-09 the fifth and final year for the deduction. The Income Tax Appellate Tribunal (ITAT) deleted the disallowance. The Revenue appealed this order.

What did the High Court hold?

The High Court held that the Appellate Tribunal committed no error in passing the impugned order. The Court noted that the Revenue had allowed the deduction for four consecutive years prior to AY 2008-09. Therefore, there was no valid reason for the Revenue to object to the admissibility of the deduction under Section 80JJA in the fifth and final assessment year. The Court found that the department's consistent treatment of the claim in earlier years indicated acceptance of the assessee's position regarding the commencement of the qualifying business. The Court referred to decisions in Paul Brothers and Dinshaw Frozen Food Ltd. to support its view. The substantial question of law was answered in favour of the assessee.

What were the issues?

1. Whether the Appellate Tribunal erred in law and fact in deleting the disallowance of Rs. 64,04,327/- claimed under Section 80JJA of the Income Tax Act, 1961, when the assessment year in question was the eighth year of business operation? (Question of law and fact, concerning Section 80JJA). Assessee's Contention: The assessee argued that the deduction under Section 80JJA is available for five consecutive assessment years beginning with the assessment year relevant to the previous year in which 'such business' commences. They contended that their business of manufacturing enzymes, qualifying for 80JJA, commenced in FY 2003-04 (AY 2004-05), making AY 2008-09 the fifth and final year for the deduction. They relied on the specific wording of Section 80JJA, emphasizing the word 'such' business. Revenue's Contention: The Revenue contended that the business commenced in FY 1999-2000 (AY 2000-01), making AY 2008-09 the eighth year, thus exceeding the five-year limit for the deduction under Section 80JJA. They relied on the overall commencement of business operations.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80JJA,Section 143(1),Section 143(3),Section 148,Section 147,Section 143(2),Section 142(1),Section 80IB,Section 10B

AI-generated summary — verify with the full judgment below

C/TAXAP/82/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 82 of 2019

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? Yes 2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? No ========================================================== PRINCIPAL COMMMISSIONER OF INCOME TAX 2 Versus MAPS ENZYMES LIMITED ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR B S SOPARKAR(6851) for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO

Date : 06/08/2019

ORAL JUDGME

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