JITENDRA DOSHI, MUMBAI v. ITO 17(3)(2), MUMBAI

CO 138/MUM/2009 | 1999-2000
Pronouncement Date: 30-04-2010 | Result: Dismissed

Appeal Details

RSA Number 13819923 RSA 2009
Assessee PAN AAAPD7702J
Bench Mumbai
Appeal Number CO 138/MUM/2009
Duration Of Justice 9 month(s) 13 day(s)
Appellant JITENDRA DOSHI, MUMBAI
Respondent ITO 17(3)(2), MUMBAI
Appeal Type Cross Objection
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 30-04-2010
Date Of Final Hearing 22-04-2010
Next Hearing Date 22-04-2010
Assessment Year 1999-2000
Appeal Filed On 17-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI T.R. SOOD (AM) SL.NO. ITA NO./CROSS OBJECTION NO. APPELLANT /CROSS OBJECTOR RESPONDENT /APPELLANT IN APPEAL ASSESSMENT YEAR 1. 3403/M/2008 INCOM E TAX OFFICER WARD 17(3)(2) ROOM NO.611 6 TH FLOOR PIRAMAL CHAMBERS MUMBAI - 400 012 SHRI JITENDRA B. DOSHI PROP. A.V. ENGINEERS 44 PRAGATI INDUSTRIAL ESTATE GROUND FLOOR N.M. JOSHI MARG MUMBAI - 400 011. P.A. NO. (AAAPD 7702 J) 1999 - 2000 2. C.O. NO.13 8/M/2009 SHRI JITENDRA B. DOSHI MUMBAI. INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. 1999 - 2000 3. ITA NO.3404/MUM/2008 INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. SHRI JITENDRA B. DOSHI MUMBAI. 2000 - 01 4. C.O. NO.135/M/2009 SHRI JITENDRA B. DOSHI MU MBAI. INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. 2000 - 01 5. ITA NO.3405/MUM/2008 INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. SHRI JAYANT B. DOSHI 44 PRAGATI INDUSTRIAL ESTATE GROUND FLOOR N.M. JOSHI MARG MUMBAI - 400 011. (P.A. NO.AAAPD 7703 K) 1999 - 20 00 6. C.O. NO.136/M/2009 SHRI JAYANT B. DOSHI MUMBAI. INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. 1999 - 2000 7. ITA NO.3406/MUM/2008 INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. SHRI JAYANT B. DOSHI MUMBAI. 2000 - 01 8. C.O. NO.137/M/2009 SHRI JAYANT B. DO SHI MUMBAI. INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. 2000 - 01 A SSESSEE BY : SHRI JAYANT R. BHATT RE VENUE BY : SHRI L.K. AG R AWAL ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 2 O R D E R PER BENCH ALL THESE FOUR APPEALS IN RESPECT OF TWO ASSESSEES NAMELY SHRI JITENDRA B. DOSHI AND SHRI JAYANT B. DOSHI PREFERRED BY THE REVENUE ARE DIRECTED AGAINST TWO COMMON ORDERS DATED 28.2.2008 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEARS 1999 - 00 AND 2000 - 01 RESPECTIVELY AGAINST WH ICH BOTH ASSESSEES HAVE ALSO FILED CROSS OBJECTIONS. SINCE FACTS ARE IDENTICAL AND GROUNDS ARE COMMON ALL THESE APPEALS AND CROSS OBJECTIONS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE LEAD MATTER IN THIS BATCH OF APP EALS IS APPEAL IN ITA NO.3403/M/2008 PERTAINING TO ITO VS. JITENDRA B. DOSHI FOR THE ASSESSMENT YEAR 19 99 - 00. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING OUT BUSINESS IN THE NAME OF NAME AND STYLE OF M/S. JATIN INDUST RIES (SILVASA). THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF NUT AND BOLTS ETC. . T HE ASSESSING OFFICER ON VERIFICATION OF ASSESSMENT RECORD FOR ASSESSMENT YEAR 2001 - 02 NOTED THAT THE CIT - 17 MUMBAI DURING THE COURSE OF PROCEEDINGS U/S.263 O F THE I.T. ACT 1961 (THE ACT) FOUND THAT THE ASSESSEE HAS NOT COMPLIED WITH ALL THE TERMS AND CONDITIONS LAID DOWN U/S.80IA/80IB AND ACCORDINGLY THE CLAIM OF DEDUCTION OF THE ASSESSEE WAS WITHDRAWN. KEEPING IN VIEW OF THESE FACTS THE ASSESSING OFFICER RE - OPENED THE ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 3 ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 1999 - 2000 & 2000 - 2001 FOR THE REASON THAT THE CLAIM OF THE ASSESSEE U/S. 80IA/80IB FOR THESE YEARS UNDER CONSIDERATION IS WRONG AND THE ASSESSEE HAS UNDERSTATED THE INCOME LIABLE TO TAX. ACCORDING LY A NOTICE U/S.148 WAS ISSUED. IN RESPONSE THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO TREAT THE RETURN OF INCOME ALREADY FILED AS DEEMED TO BE FILED IN RESPONSE TO NOTICE U/S.148. SUBSEQUENTLY THE ASSESSEE FAILED TO COMPLY WITH THE STATUTORY NOTICES U/S.143(2)/142(1) OF THE I.T. ACT. IN VIEW OF THE ABOVE FACTS THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.144 OF THE ACT ESTIMATING THE TOTAL INCOME OF THE ASSESSEE AT RS.15 00 000/ - AND DID NOT ALLOW DEDUCTION U/S.80IA/80IB OF THE ACT. 3. ON APPEAL THE LD. CIT(A) WHILE DELETING THE ADHOC ADDITION ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL IN SUPPORT ALSO ALLOWED THE DEDUCTION U/S.80IA AND 80IB FOLLOWING THE ORDER OF THE TRIBUNAL IN RESPECT OF APPEAL FILED AGAINST THE REV ISION ORDER PASSED BY THE CIT IN ASSESSEE S OWN CASE IN ITA NO.5779/M/04 FOR ASSESSMENT YEAR 20 01 - 02 DATED 4.9.2006. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING EFFECTIVE GROUNDS OF APPEAL: ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 4 1. T HE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION ON ACCOUNT OF ESTIMATION OF INCOME AT RS.15 LACS. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S.80IA/80 - IB. 5. AT THE TIME OF HE ARING BOTH PARTIES AGREED THAT BOTH THE ISSUES ARE COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ASSESSEE S OWN CASE IN JITENDRA B. DOSHI VS. ITO IN ITA NO.5779/M/04 FOR ASSESSMENT YEAR 20 01 - 02 DATED 4.9.2006 WHE REIN THE TRIBUNAL HAS ALLOWED THE ASSESSEE'S CLAIM U/S. 80 IB OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THE SIMILAR ORDER OF THE TRIBUNAL IN THE CASE OF JAYANT BABULAL DOSHI VS. ITO IN ITA NO.5780/M/04 FOR ASSESSMENT YEAR 20 01 - 02 D ATED 4.9. 20 06 HAS ALSO BEEN UPHELD BY THE HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. JAYANT BABULAL DOSHI IN INCOME TAX APPEAL NO.531 OF 2009 DATED 24.4.2009. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER. THE LD. COUNSEL FOR THE ASSESSEE ALSO REL IED ON THE DECISION IN CIT VS. PENWALT INDIA LTD.(1992) 196 ITR 813(BOM.) TO SHOW THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF SUGAR AND TEA MACHINERY IS QUALIFIED FOR RELIEF U/S.80 - I ON THE MANY ACTIVITIES EXCEPT ONE UNDERTAKEN BY THE ASSESSEE. 6. WE H AVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT FOR THE ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 5 ASSESSMENT YEAR 2001 - 02 ON EXAMINING THE ASSESSMENT RECORDS IN EXERCISE OF HIS POWERS U /S.263 OF THE ACT IT WAS FOUND BY THE LD. CIT THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN SO FAR AS THE DEDUCTION GRANTED U/S.80IB IS CONCERNED. THE LD. CIT AFTER CONSIDERING THE ASSESSEE'S SUBMISSION OBSERVED THAT THE POWER CONSUMPTION RECOR DED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IS SO LOW WHICH IS NOT COMMENSURATE WITH THE PRODUCTION AND ACTIVITIES REPORTED BY THE ASSESSEE. H E ALSO FOUND THAT OUT OF 10 WORKERS ENROLLED IN THE ACQUITTANCE REGISTER OF THE ASSESSEE ONLY 8 PERSONS WERE WOR KERS ENGAGED IN THE MANUFACTURING PROCESS AND OUT OF THE REMAINING TWO PERSONS ONE WAS CLERK AND THE OTHER A WATCHMAN. THEREFORE THE LD. CIT HELD THAT THE ASSESSEE HAS VIOLATED THE CONDITION THAT IF THE UNIT IS WORKING WITH THE AID OF POWER AT LEAST 10 WORKERS SHOULD BE EMPLOYED IN THE MANUFACTURING PROCESS SO AS TO CLAIM DEDUCTION U/S.80IB AND ACCORDINGLY HE DIRECTED THE AO TO WITHDRAW THE DEDUCTION U/S.80IB AND RE - COMPUTE THE INCOME. AGAINST THE SAID ORDER OF THE LD. CIT THE ASSESSEE FILED APPEAL BEFOR E THE TRIBUNAL. THE TRIBUNAL IN ASSESSEE S APPEAL IN ITA NO.5779/M/04 FOR ASSESSMENT YEAR 2001 - 02 DATED 4.9.2006 HAS ACCEPTED THE A SSESSEE'S EXPLANATION THAT HE HAS EMPLOYED 10 WORKERS AND EVEN THOUGH DESIGNATED IN DIFFERENT NAMES AT DIFFERENT TIMES VIR TUALLY ALL OF THEM WERE WORKING IN DIFFERENT ASPECTS OF THE MANUFACTURING PROCESS OF THE ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 6 ASSESSEE. THE TRIBUNAL FURTHER HELD THAT THE PRESUMPTION OF THE COMMISSIONER THAT THE CONSUMPTION OF ELECTRICITY WAS NOT SUFFICIENT COULD BE TREATED ONLY AS AN OBSERV ATION AND NOT AS A MATERIAL FACT ON RECORD SO AS TO DISCREDIT THE FINDING OF THE AO AND ACCORDINGLY SET ASIDE THE REVISION ORDER PASSED BY THE LD. CIT. FURTHER I N THE CASE OF CIT VS. JAYANT BABULAL DOSHI IN INCOME TAX APPEAL NO.531 OF 2009 DATED 24.4.2009 THEIR LORDSHIPS ON THE SIMILAR ISSUES HAVE HELD THAT THE FINDINGS RECORDED BY THE TRIBUNAL IS BASED ON APPRECIATION OF EVIDENCE CONSEQUENTLY NO QUESTION OF LAW IS INVOLVED AND DISMISSED THE APPEAL IN LIMINI. WE FURTHER FIND THAT IN THE MEAN TIME THE AO ON THE BASIS OF FINDING RECORDED U/S.263 OF THE ACT HAS ISSUED NOTICE U/S. 148 TO WITHDRAW THE CLAIM OF DEDUCTION U/S.80 IA/80IB. IN THE ABSENCE OF ANY COMPLIANCE BY THE ASSESSEE OF THE STATUTORY NOTICE ISSUED U/S.143(2)/142(1) OF THE ACT THE AO ESTIMAT ED THE ASSESSEE'S INCOME AT RS. 15 .00 LACS ON AVERAGE BASIS AND DID NOT ALLOW THE ASSESSEE'S CLAIM OF DEDUCTION U/S.80IA/80IB ON THE GROUND THAT THE NATURE OF BUSINESS CONDUCTED BY THE ASSESSEE IS NOT FALLING UNDER THE MEANING OF ELIGIBLE BUSINESS AS DEFINE D UNDER THAT SAID PROVISIONS. ON APPEAL THE LD. CIT(A) DELETED THE ADHOC ADDITION AND ALLOWED THE DEDUCTION U/S.80IA/80IB FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEE S OWN CASE (SUPRA). ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 7 7. THERE IS NO QUARREL ON THE RATIO OF DECISION IN PENWALT INDI A LTD. SUPRA RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. HOWEVER THE SAME IS ON A DIFFERENT ISSUE AND DOES NOT PERTAIN TO ISSUE OF NUMBER OF WORKERS EMPLOYED THEREFORE THE SAME IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 8. SINCE THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED WITHOUT BRINGING ANY MATERIAL ON RECORD AND KEEPING IN VIEW THAT THE TRIBUNAL IN ASSESSMENT YEAR 2001 - 02 HAS ALREADY HELD THAT THE ASSESSEE HAS EMPLOYED 10 WORKERS AND ELIGIBLE FOR DEDUCTION U/S.80 - IB AND IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE TO SHOW THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80 - IA AND 80 - IB WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) UPHOLD THE FINDING OF THE LD. CIT(A) I N DELETING THE ADDITION MADE BY THE AO AND IN ALLOWING THE DEDUCTION U/S.80 - IA AND 80 - IB OF THE ACT. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. C . O . NO.138/M UM / 20 09 (A . Y . 19 99 - 00)(BY ASSESSEE): 9. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER : - THE LD. CIT(A) HAS ERRED IN CONFIRMING THE AO S ACTION IN RE - OPENING THE ASSESSMENT U/S.147 OF THE ACT. ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 8 10. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH WAS NOT OBJE CTED TO BY THE LD. DR. 11. THIS BEING SO AND IN THE ABSENCE OF ANY SUPPORTING MATERIAL PLACED ON RECORD THE GROUND RAISED BY THE ASSESSEE IS TREATED AS DISMISSED BEING WITHDRAWN. ITA NO. 3404/MUM/2008 (A . Y . 2000 - 01 ) (BY REVENUE ) ITA NO.340 5 /MUM/2008 (A .Y. 1999 - 00 ) (BY REVENUE) ITA NO.340 6 /MUM/2008 (A .Y. 2000 - 01) (BY REVENUE) 12. AT THE TIME OF HEARING IT HAS BEEN AGREED BY THE PARTIES THAT THE FACTS AND ISSUES OF THE ABOVE APPEALS ARE IDENTICAL THEREFORE THE PLEA TAKEN BY THEM IN THE APPEAL IN ITA NO.3403/M/08 MAY BE CONSIDERED WHILE DECIDING THE SE APPEALS. 13. THIS BEING SO AND IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE WE KEEPING IN VIEW OF OUR FINDING RECORDED IN REVENUE S APPEAL IN ITA NO.3403/MUM/2008 FOR THE A SSESSMENT YEAR 1999 - 00 IN PARA S NO. 6 TO 8 OF THIS ORDER DECIDE BOTH THE ISSUES AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. WE HOLD AND ORDER ACCORDINGLY. C.O. NO.13 5 /MUM/2009 (A. Y. 2000 - 01 )(BY ASSESSEE): C.O. NO.13 6 /MUM/2009 (A. Y. 1999 - 00)(BY A SSESSEE): C.O. NO.13 7 /MUM/2009 (A. Y. 2000 - 01 )(BY ASSESSEE): ITA NO S . 3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y: 99 - 00 00 - 01 9 14. THE COMMON GROUND TAKEN BY THE ASSESSEE READS AS UNDER : - THE LD. CIT(A) HAS ERRED IN CONFIRMING THE AO S ACTION IN RE - OPENING THE ASSESSMENT U/S.147 OF THE ACT. 15. AT THE TIME OF HE ARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH WAS NOT OBJECTED TO BY THE LD. DR. 16. THIS BEING SO AND IN THE ABSENCE OF ANY SUPPORTING MATERIAL PLACED ON RECORD THE GROUND RAISED BY THE ASSESSEE IS T REATED AS DISMISSED BEING WITHDRAWN. 17. IN THE RESULT THE REVENUE S APPEALS AND ASSESSE E S CROSS OBJECTION S STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.4.2010. SD/ - SD/ - ( T.R. SOOD ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 30.4. 20 10 . JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCER NED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.