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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Joginder Singh & Shri Rajendra
आदेश / O R D E R Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 31/07/2014 of the Ld. First Appellate Authority, Mumbai, allowing the deduction u/s 80IB of the Income Tax Act, 1961 (hereinafter the Act), amounting to Rs.4,04,93,929/-, without appreciating the provision of the Act and the claim of earlier years (2005-06 and 2006- 07) has been challenged by the Department before the Hon'ble High Court.
During hearing, Shri Rajesh Kr. Yadav, ld. DR, advanced arguments, which is identical to the ground raised by contending that for Assessment Year 2005-06 and 2006-07, the deduction granted to the assessee has been challenged by the Department before the Hon'ble High Court. None was present for the assessee in spite of issuance of registered notices, on earlier occasions also. Today also, nobody appeared for the assessee nor any adjournment petition was filed. It seems that the assessee has nothing to say.
2.1. We have considered the submissions of Ld. DR and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant finding recorded by the Ld. Commissioner of Income Tax (Appeal) for ready reference and analysis:-
“1.3.1 I have carefully considered the submissions and contention of the Ld. AR of the appellant and also carefully gone through the facts and explanation given by the Ld. AR of the appellant as well as the Ld. AO. Similar issue has arisen in the assessee's own case for AY 2010-11 wherein my Ld. Predecessor vide order No. CIT(A)-17/IT112/2012-13, dated 09.05.2013 in para No. 4.2 and 6.2 has decided the issues as under:. "4.2 I have. considered the submission of the appellant and the order of the A 0 The CIT(A)-7, Mumbai in the appellant's own case for AY 2010-11 on the issue of claim u/s 8019 vide its order No CIT(A)-17/IT-112/2012-13, dated 95 2013 in para 42 and 43 has decided as under "4.2 have considered the submission of the Appellant and order of the A0 The CIT(A)-17, Mumbai in the Appellant's own case for AY 2009-10 on the issue of claim u/s8OIB vide its order No. IT(A) 7/IT-I 94/2011-12, dated 20.06.2012 in para 3.3 and 3.4 has decided as under: "33 I have perused the facts in this case. The entre disallowance has been made based upon the orders for AYs 2004-05; The order for assessment year 2004-05 as submitted above, was set aside by the Tribunal for re- adjudication by the A0 After re-adjudication the matter came up before the CIT appeal, vide his order dated 16.02.2012 held as under: "I have carefully examined the issue and hold that the AO erred in denying the deduction claimed u/s. 80IB by coming to an erroneous view that old machinery had been transferred from the Mumbai unit to the Daman unit and which was more than 20% of the total value of plant and machinery. There is overwhelming evidence to clearly show that there was no transfer of plant and machinery during the Financial Year 2003-04; that the Mumbai unit situated at Sakinaka continued with its moulding and manufacturing operations during the financial year concerned Which is evident from the details of sales, .purchases, manufacturing expenses and statutory compliances made by the Mumbai Unit; that: the purchase of capital goods and work-in-progress of the Daman Unit, the purchases of raw materials and sales during the year as also the expenses concerned Clearly reveals that the Daman Unit had nothing to do with the unit at Mumbai.
Thus, it can be concluded that the appellant had requisite evidence and which had been placed before the AO and which has not been rebutted in the assessment order, clearly showing that no asset had been transferred from the Sakinaka
Unit at Mumbai to the nezv Unit at Daman and therefore, it is apparent that the AO committed an error in denying the deduction u/s. 80IB. In may view, the• appellant is entitled to the 'deduction as claimed. The AO shall recomputed the income. accordingly. The aforesaid grounds are accordingly allowed in favour of the assessee."
3.4 The disallowance in the current year has also been based upon the fact finding in assessment year 2004-05. As cited supra, the CIT appeal has held in that year that the appellant was eligible for deduction u/s. 80IB. Similar is the position as regards to the allowability of deduction u/s. 80IB for AYs 2005-06 to AY 2008-09, wherein the appeal of the appellant was allowed by my predecessor as well as the Tribunal. Therefore, following the decision of the Honourable ITAT as well as the decision of my Ld. Predecessors, the AO is directed to allow the claim of the appellant u/s. 80IB. This ground of appeal, therefore, stands allowed" 4.3. Following the above decision of the my predecessor in the appellant's own case for AY 2009-10 and since there is no Change in the facts, the ground of appeal in the instant case for A Y 2010-11 is also allowed.'.'
4.3. Following the: above decision of the my predecessor in the appellant's own case for AY 2010-11 and since there is no change in the facts, the ground of , the ground of appeal in the instant case for A Y 2011-12 is also allowed and AO is directed to grant the deduction u/s 80IB amounting to Rs.4,04,93,929/- as claimed by the appellant.
Hence, this ground of appeal is allowed.” 1.3.2. Respectfully, following the above decision of my Ld. Predecessor in the assessee’s own case, these grounds of appeal are thus dismissed.
2.2. The facts, in brief, are that during assessment proceedings, the ld. Assessing Officer observed that the assessee computed gross total income at Rs.16,35,15,381/- and 30% of the same i.e. 4,04,93,929/- was claimed as deduction u/s 80IB of the Act. The Ld. Assessing Officer was asked to submit the necessary details like bills of plant and machinery, which were put to use. The assessee vide letter dated 25/11/2013 submit the justification for the claimed deduction, however, the Ld. Assessing Officer was not satisfied with the claim and disallowed the same. On appeal before the Ld. Commissioner of Income Tax (Appeal), as reproduced hereinabove, the claim of the assessee was allowed, which is under challenge before this Tribunal. We find that for claiming the deduction u/s 80IB of the Act, the assessee has to fulfil the conditions contained in sub-section(2) of the section. These conditions has been enumerated/dealt with by the Ld. Commissioner of Income Tax (Appeal) in the order along with the factum of establishing the factory set-up on Daman. There is uncontroverted finding that new industrial undertaking was formed at Daman by transferring more than 20% of the plant and machinery previously used by the assessee in its industrial premises at Bombay. The Ld. Commissioner of Income Tax (Appeal) has already placed reliance upon the decision in CIT vs Kedarnath Jute Mfg. Co. 82 ITR 363 (SC), Tuticorin Alkalis Chemicals and Fertilizers Ltd. 227 ITR 172 and Mc.Dowells Co. Ltd. 154 ITR 148 along with other decisions of the Tribunal. So far as, the contention of the Revenue that the order of the Tribunal has been challenged before the Hon'ble High Court, is concerned, no contrary decision was brought to our notice, therefore, the order of the Tribunal as on date, stands. The assessee set- up the industrial undertaking in industrially backward the state, wherein, certain benefits are extended to the assessee. The operation of Mumbai unit continued during the Financial Year-2003-04 at the normal scale. In the new unit, at Daman, new plant and machinery was installed during the first year of operation and further new additions were made during the Financial Year 2004-05. It is also noted that for Assessment Year 2005-06, the order of the Ld. Commissioner of Income Tax (Appeal) was affirmed by the Tribunal and the appeal of the Revenue was dismissed. Against the said order, the miscellaneous application filed before the Tribunal against the said order was also dismissed. Thus, in the absence of any contrary decision/facts, the claimed deduction was rightly allowed by the Ld. Commissioner of Income Tax (Appeal). It is also noted that the First Appellate Authority has relied upon the earlier orders of the Tribunal and also of the Ld. Commissioner of Income Tax (Appeal), resultantly, the appeal of the Revenue is having no merit, therefore, dismissed.
Finally, the appeal of the Revenue is dismissed.
This order was pronounced in the open in the presence of ld. DR at the conclusion of the hearing on 18/04/2017.