MEHER SYNTHETICS P.LTD,MUMBAI vs. ITO RG 1(2)(3), MUMBAI

The assessee has filed the present appeal against the order dated 30.06.2011 passed by the Commissioner of Income Tax (Appeals)-2, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2003- 04.

The assessee has raised the following grounds:- “1. (a) On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in passing the order u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 and the reasons assigned for ITA No.6222.M.11 A.Y. 2003-04 doing so are wrong and contrary to the facts and circumstances of the case, provisions of the Income Tax Act, 1961 and the Rules made thereunder; (b) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in not appreciating that the Assessing Officer’s initiation of proceedings u/s.147 of the Income Tax Act, 1961 and consequent completion of re-assessment vide assessment order dated 31.12.2009 are illegal and bad in law.

The brief facts of the case are that the assessee filed its return of income on 28.11.2003 declaring total income to the tune of Rs. Nil after claiming deduction u/s.80IB of the Income Tax Act, 1961 ( in short “the Act”) to the tune of Rs.10,88,406/-. The return was processed on 03.01.2004. Thereafter, the proceedings u/s.147 of the Act was initiated by issuance of notice u/s.148 of the Act dated 28.03.2008 which was served 2

Thereafter, by giving an opportunity of being heard, the Assessing Officer disallowed the claim from Reliance Industries Ltd. to the tune of Rs.3,24,000/- and disallowed the Insurance claim to the tune of Rs.2,42,400/- and also disallowed the Reliance Infocom Incentive to the tune of Rs.2,400/- and assessed the total income to the tune of Rs.6,76,290/-. The Assessing Officer was of the view that the above said claim was not covered by the provision of section 80IB of the Act. Feeling aggrieved the assessee filed an appeal before the CIT(A) who uphold the order of the Assessing Officer, therefore, the assessee has filed the present appeal before us. However, at the time of hearing the representative of the assessee was not present. ISSUE NO.1 TO 3:- 5. Issue no.1 to 3 are interconnected, therefore, are being taken up together for adjudication. The assessee pleaded that the Assessing Officer has wrongly invoked the provision u/s.147 of the Act because the claim of the assessee was duly covered by the provision of section 80IB of the Act, therefore the assessment order dated 31.12.2008 is wrong against law and facts and is liable to be set aside. On the other hand, the learned representative of the department represented that the claim from Reliance Industries Ltd., Insurance Claim and Reliance Infocom Incentive are not covered in view of the provision of section 80IB of the Act, therefore, the assessee has claimed the excess deduction u/s.80IB of the Act, therefore, the Assessing Officer has rightly invoked the provision u/s.147 of the Act in accordance with law. In support of these contentions the learned

Keeping in view of the argument advanced by the learned representative of the revenue and perusing the record carefully, we are of the view that while filing the return on 28.11.2003 the claim from Reliance Industries Ltd., Insurance Claim and Reliance Infocom Incentive was not examined by the Assessing Officer. The assessee has claimed the deduction u/s.80IB of the Act @ 100% of the gross total income. The assessee claimed the relief from Reliance Industries Ltd. to the tune of Rs.3,24,000/-, Insurance claim to the tune of Rs.2,42,400/-, Reliance Infocom Incentives to the tune of Rs.2,400/- total to the tune of Rs.5,87,800/- u/s.80IB of the Act. In view of the above said law relied by the learned departmental representative, it is not in dispute that the assessee is liable to get the exemption u/s.80IB of the Act on the income derived from industrial undertaking. The income discussed above cannot be said to be derived from the industrial undertaking which entitles the assessee to get the exemption u/s.80IB of the Act. In view of the said circumstances and in view of the above mentioned law i.e. [2009] 183 taxman 349 (SC) in case titled as Liberty India Vs. Commissioner of Income Tax and M/s. Radha Madha Industries Vs. Income Tax Officer in ITA No.1935/Ahd/2007 decided by Hon’ble Income Tax Appellate Tribunal, Ahmedabad. We are of the view that the Assessing Officer has rightly invoked the provision u/s.147 of the 5