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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI SANDEEP GOSAIN, JM
आदेश / O R D E R PER SANDEEP GOSAIN, JUDICIAL MEMBER:
This is an Appeal filed by the Assessee directed against the Order of the Ld. Commissioner of Income Tax (Appeals)- 9, Mumbai (‘CIT(A)’ for short) dated 08.9.2014, whereby partly allowing the Assessee’s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2010-11 vide order dated 26.03.2013.
The grounds of appeal
s raised by the assessee reads as under: Ground No I: Disallowance of deduction claimed u/s. 10B Rs. 29,54,863/-:
1. On the facts and circumstances of the case, the Ld. CIT (A) - 9 erred in confirming the disallowance of deduction u/s 10B of Rs. 29,54,863/- made by the Ld. AO.
2. The Ld. CIT (A) - 9 erred in confirming the disallowance of deduction u/s 10B made by the Ld. AO which was bad in law as well as equity.
2 6972/Mum/2014 (A.Y. 2010-11) Shah Nilesh Yashwant vs. ITO 3. The Ld. CIT (A) - 9 has erred in not following the decision of ITAT Pune in the case of M/s Cat Labs Pvt. Ltd. (ITA No. 131/PN/2013/AY 2009-10 dated 26/02/2014) which was delivered after taking into account die facts of Delhi High Court in the case of Regency Creations Limited (27 taxman 322 dated 17/09/2012) 4. The appellant prays that the disallowance made u/s 10B be deleted in toto. Ground No. II: Lew of Interest of u/s 234B of Rs. 2,94,048/- & 234D of Rs. 4,087/-:
1. 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) — 9 erred in confirming the levy of interest u/s.234B and 234D of the Act.
2. The levy of interest is not justified as the issue is of highly debatable nature. The same may also be deleted being consequential in nature.
3. The Appellant prays that levy of interest be deleted Ground No. III: Initiation of Penalty Proceedings: 1. On the facts and circumstances of the case, the Ld. CIT (A) - 9 erred in not ordering to delete findings in the order as to initiation of penalty proceedings u/s 271 (1) (c) for making an erroneous and unsubstantiated claim u/s 10B of the act.
2. The initiation of penalty proceeding is bad in law as well as equity.
3. The Appellant prays that it be held that the findings of the Ld. AO of initiating penalty against the Appellant be deleted.
At the very outset, it is noticed that none has appeared on behalf of assessee and even no application for adjournment was moved today. On the other hand Ld. DR is present in the court and is ready with arguments. Therefore we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material on record.
The solitary ground raised by the assessee is against challenging the order of Ld. CIT(A) in confirming the disallowance of deduction u/s 10B of Rs. 29,54,863 made by the AO.
3 6972/Mum/2014 (A.Y. 2010-11) Shah Nilesh Yashwant vs. ITO 5. We have heard the counsels for Ld. DR the parties and we have also perused the material placed on record as well as the orders passed by revenue authorities.
Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the revenue in para no. 3 to 5 of its order. The operative portion of the order of Ld. CIT(A) is contained in para no. 5 of its order and the same is reproduced below:-
DECISION: 5.1 I have carefully considered the facts and circumstances of the case, relevant assessment order and the submissions made by the LAR. Ground No.1 in this appeal is against the denial of exemption claimed by the appellant u/s 10B of the I.T. Act. The AO has primarily denied the exemption claimed by the appellant on the ground that in the case of the appellant there is no approval from the competent authority i.e. Board of Approval, which has been specifically set up for approvals for an STE/EOU in order to qualify for the exemption u/s lOB of I.T. Act. While coming to this conclusion the AO has relied upon the decision of Hon'ble Delhi High Court in the case of M/ s Regency Creations Ltd. 27 Taxman 322, wherein it was categorically held that in want of approval from the competent authority i.e. Board of Approval in the instant case, exemption u/s 10B is not available to the assessee. Though the appellant has vehemently relied on the decision of ITAT Pune in the case of M/s Cat Labs Pvt. Ltd. (supra) alongwith some other decisions, but the same are not relevant because in the judicial hierarchy the decision of Hon'ble High Court will prevail upon the decision of ITAT. The appellant has 4 6972/Mum/2014 (A.Y. 2010-11) Shah Nilesh Yashwant vs. ITO also argued that it has claimed and has been allowed the deduction in earlier year so it should be allowed this year also. I do not agree with this contentiori, of the appellant because a mistake due to wrong interpretation of law cannot be repeated in the subsequent years. The matter has been decided by Delhi High Court, so respectfully following the decision of Hon'ble Delhi High Court in the case of M/s Regency Creations Ltd., it is held that in want of approval of BOA, the AO has correctly denied the exemption claimed by the appellant. This ground of appeal is therefore dismissed.
6. After having gone through the facts of the present case as well as considering orders passed by revenue authorities and submissions made by Ld. DR, we find that Ld. CIT(A) has dealt with this ground after considering the facts of the present case and after relying upon judgment passed by Hon’ble Delhi High Court in the case of M/s Regency Creations Ltd. wherein it was categorically held that for want of approval of BOA, the AO has rightly denied the exemptions claimed by the assessee. The said judgment is based on identical facts as are available in the present case. Further no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the assessee stands dismissed.