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Income Tax Appellate Tribunal, G Bench, Mumbai
Before: Shri C.N. Prasad & Shri A.L. Saini
This appeal has been filed by the Revenue against the order of the CIT(A)-41, Mumbai dated 16.06.2016 for A.Y. 2012-13.
The only grievance of the Revenue in this appeal is that the CIT(A) erred in not allowing deduction under Section 80IB(5) of the Income Tax Act, 1961 (hereinafter “the Act”) following the decision of his predecessor in assessee’s case for assessment years 2010-11 and 2011-12.
At the outset the learned counsel for the assessee submits that the issue in the appeal is squarely covered by the decision of the Coordinate Bench in assessee’s own case for assessment years 2010-11 and 2011-12 in & 6975/Mum/2014 dated 08.08.2017, copy of which is placed at page 29 of the paper book. The learned counsel, referring to the paper book filed, submits that this issue is coming up from A.Y. 2007-08 and the Tribunal consistently holding that the assessee is entitled for deduction under Section 80IB in respect of the income earned by the M/s. Ester Lub Technologies assessee for the job work carried on by it to its sister concern. The learned counsel for the assessee further submits that during assessment years 2010-11 and 2011-12 deduction under Section 80IB was denied on the ground that there as reconstruction of existing business for the reason that the assessee firm was created in 2004-05 to manufacture emulsifiers on behalf of its sister concern M/s. Witmans Industries. The AO ignored the submission of the assessee that the assessee’s unit is a new unit formed with new plant and machinery at a new place with new workers and power connection. No machinery was taken from Witmans Industries and there was no reconstruction of business on creation of the firm by the assessee. The learned counsel submits that on similar lines the AO disallowed the benefit of deduction under Section 80IB during the current assessment year, i.e. A.Y. 2012-13. The learned counsel submits that for assessment years 2010-11 and 2011-12 the Coordinate Bench considered the said issue and held that the assessee is entitled for deduction under Section 80IB.
The learned D.R., on the other hand, vehemently supported the order of the Assessing Officer.
We heard the rival submissions and perused the orders of the authorities below. The AO, while completing the assessment, denied deduction under Section 80IB(5) of the Act to the assessee based on the assessment made for A.Y. 2011-12 wherein similar disallowance was made by the AO. On appeal the learned CIT(A), following the order of his predecessor for assessment years 2010-11 and 2011-12 allowed the claim of the assessee. On a perusal of the order of the Tribunal for assessment years 2010-11 and 2011-2 we find that the Tribunal allowed the claim of the assessee by observing as under: -
“4. Now coming to the appeals filed by the Revenue the learned D.R. fairly conceded that the issue involved in both the appeals for assessment years 2010-11 and 2011-12 are common and whatever view the Tribunal may take in A.Y. 2010-11 the same view may be taken in A.Y. 2011-12. The grounds of appeal in both the years read as under: - M/s. Ester Lub Technologies “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in allowing deduction u/s 80IB(5) merely on the basis of the erroneous decision given by the Assessing Officer in the set aside proceeding of A.Y. 2007-08 without going into merits of the case and records of the assessee.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not considering the relevant issue raised specifically in the assessment proceedings of A.Y. 2010-11 available on the record regarding splitting the existing unit of sister concern and setting up the assessee’s undertaking.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in admitting additional evidence in the form of assessment order for A.Y. 2007-08 in set aside proceeding passed after the filing of appeal, without confronting the department.”
5. We have heard the learned D.R. and carefully perused the orders of the tax authorities below. We noted that the conditions as stipulated under section 80IB for the eligibility of the claim, whether the assessee is engaged in manufacturing or not had to be satisfied in the first year and even the condition whether the unit was formed by splitting of any other unit or not has also to be decided on the basis of the facts in the initial assessment year. The CIT(A) in this case has allowed the claim of the assessee and held that the assessee’s undertaking has not established by splitting the existing unit of the sister concern. Since the claim of the assessee has been allowed in A.Y. 2007-08 by this Tribunal vide order dated 13.06.2012, therefore in our view the CIT(A) was correct in law in allowing the claim of the assessee. We, therefore, do not find any illegality or infirmity in the order of the CIT(A).” Since there is no change in the facts and circumstances during the assessment year under consideration, respectfully following the said decision we uphold the order of the learned CIT(A) in allowing the claim for deduction under Section 80IB(5) of the Act to the assessee.
In the result, the appeal filed by the Revenue is dismissed.