M/s. Olam Exports(India) Ltd, Kollam v. ACIT, Kollam

CO 31/COCH/2009 | misc
Pronouncement Date: 20-12-2011

Appeal Details

RSA Number 3121923 RSA 2009
Assessee PAN AAACO4020D
Bench Cochin
Appeal Number CO 31/COCH/2009
Duration Of Justice 2 year(s) 2 month(s) 21 day(s)
Appellant M/s. Olam Exports(India) Ltd, Kollam
Respondent ACIT, Kollam
Appeal Type Cross Objection
Pronouncement Date 20-12-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 20-12-2011
Date Of Final Hearing 20-12-2011
Next Hearing Date 20-12-2011
Assessment Year misc
Appeal Filed On 29-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM I.T.A NO. 669/COCH/2008 & C.O. NO. 31/COCH/2009 (BY THE ASSESSEE) ASSESSMENT YEAR:2004-05 THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1 KOLLAM. VS. M/S. OLAM EXPORT (INDIA) LTD. BISHOP JEROME NAGAR KOLLAM. [PAN:AAACO 4020D] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY MS. S. VIJAYAPRABHA JR. DR ASSESSEE BY NONE DATE OF HEARING 20/12/2011 DATE OF PRONOUNCEMENT 20/12/2011 O R D E R PER SANJAY ARORA AM: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION (C. O.) BY THE ASSESSEE ARISE OUT OF THE ORDER BY THE COMMISSIONER OF INCOME-TAX (APP EALS)-IV KOCHI (CIT(A) FOR SHORT) DATED 22-02-2008 PARTLY ALLOWING THE ASSESS EES APPEAL CONTESTING ITS ASSESSMENT FOR THE ASSESSMENT YEAR (A.Y.) 2004-05 VIDE ORDER U /S. 143(3) OF THE INCOME-TAX ACT 1961 ('THE ACT' HEREINAFTER) DATED 29-12-2006. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN AS THE DATE OF THE HEARING I.E. 20- 12-2011 WAS DULY NOTED BY THE LD. COUNSEL PLACING HIS SIGNATURE IN TOKEN THEREOF ON 06- 09-2011 THE DATE OF THE LAST POSTING ON WHICH THE HEARING COULD NOT BE PROCEEDED WITH ON ACCOUNT OF THE BENCH NOT FUNCTIONING. ALSO NO A DJOURNMENT APPLICATION STANDS RECEIVED FOR OR ON BEHALF OF THE ASSESSEE. IT IS A LSO NOTED THAT THE ISSUES ARISING IN APPEAL I.T.A. NO. 669/COCH/2008 & C.O.NO. 31/COCH/2009 ACIT KOLLAM VS. OLAM EXPORTS (I) LTD . 2 ARE ABIDING ISSUES BEING THE SUBJECT MATTER OF APP EALS FOR THE PRECEDING YEARS BEFORE THE TRIBUNAL AS WELL. ACCORDINGLY THE MATTER WAS PROC EEDED WITH. 3. WE HAVE HEARD THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. 4. WE SHALL DEAL FIRST WITH THE ASSESSEES CROSS OB JECTION (C.O.) WHICH WE OBSERVE TO BE LARGELY SUPPORTIVE IN NATURE. THE SAME IS TI ME BARRED BY A PERIOD OF 457 DAYS. A REQUEST FOR CONDONING THE DELAY HAS BEEN FILED BY T HE ASSESSEE-COMPANY WHICH STATES LACK OF EFFECTIVE COMMUNICATION BETWEEN THE COMPANY S KOLLAM OFFICE AND ITS REGISTERED OFFICE AT NEW DELHI AS THE REASON FOR THE DELAY. TH E DATE OF THE SHIFTING OF THE COMPANYS REGISTERED OFFICE TO NEW DELHI THOUGH EXTREMELY PE RTINENT HAS HOWEVER NOT BEEN MENTIONED IN THE PETITION. RATHER WE OBSERVER THE SAME TO BE A RECURRING FEATURE IN THE ASSESSEES APPEALS BEFORE THE TRIBUNAL EVEN AS THE ASSESSEE-COMPANY CONTINUES TO BE ASSESSED WITH THE INCOME TAX DEPARTMENT AT KOLLAM KERALA WITH ITS APPEALS BEFORE THE FIRST APPELLATE AUTHORITY LYING BEFORE THE CIT(A) AND WHICH IS IN FACT IN TIME AND FURTHER DULY REPRESENTED. AS SUCH CLEARLY NO VALID REASON FOR A HUGE DELAY OF 15 MONTHS STANDS ADVANCED. UNDER THE CIRCUMSTANCES WE DO NOT FIND I T TO BE FIT CASE FOR CONDONING THE DELAY AND ACCORDINGLY HOLD THE ASSESSEES C.O. AS INCOMPETENT. 5. COMING TO THE REVENUES APPEAL THE SAME RAISES IN EFFECT A SINGLE ISSUE I.E. THE MAINTAINABILITY OF THE ASSESSEES CLAIM FOR DEDUCTI ON U/S. 80IB OF THE ACT WHICH STANDS CLAIMED AT A SUM OF ` 1908914/-. THE MATTER HAS BEEN DEALT WITH AT PARA 10 AND PARAS 4 TO 9 OF THE ASSESSMENT AND THE APPELLATE ORDER RESPECT IVELY; THE AUTHORITIES BELOW HAVING EXTENSIVELY DISCUSSED THE ISSUES UNDER REFERENCE. T HE BRIEF FACTS ARE THAT THE ASSESSEE- COMPANY A SUBSIDIARY OF KOLLAM INVESTMENTS LTD. MA URITIUS ENGAGED IN SEVERAL BUSINESSES IN INDIA CLAIMED DEDUCTION IN RESPECT O F PROCESSING OF RAW CASHEWNUTS INTO KERNELS WHICH IS UNDERTAKEN IN FACTORIES CLASSIFI ED AS `OWN FACTORIES (THREE NOS.); `LEASE FACTORIES (THREE NOS.) AND `TOLL FACTORIES (SEVEN NOS.) THE DETAILS OF WHICH APPEAR AT PARA 4 AND PARA 6 OF THE APPELLATE ORDER. I.T.A. NO. 669/COCH/2008 & C.O.NO. 31/COCH/2009 ACIT KOLLAM VS. OLAM EXPORTS (I) LTD . 3 5.1 IN RESPECT OF `OWN FACTORIES THE CLAIM I S MADE FOR TWO FACTORIES AT AN AGGREGATE OF ` 207594/- WHICH WAS DENIED BY THE AUTHORITIES BELOW ON THE BASIS THAT THE PROFIT AROSE ONLY ON ACCOUNT OF SALE OF IMPORT LICENSE/S WHICH THOUGH AN EXPORT INCENTIVE ASSESSABLE U/S. 28 OF THE ACT COULD NOT BE CONSIDERED AS PROF ITS DERIVED FROM THE ELIGIBLE UNDERTAKINGS; THE IMMEDIATE SOURCE BEING THE RELEVA NT SCHEME OF THE GOVERNMENT OF INDIA. EXCLUDING THE SAID AMOUNT; THE ASSESSEES AC COUNTS EXHIBITING NO COST INCURRED IN THEIR RESPECT SO THAT THE ENTIRE OF IT IS PROFIT WOULD LEAD TO A NEGATIVE INCOME. THE FACTS ARE NOT DISPUTED AND THE LAW IN THE MATTER IS CLEA R FOR WHICH WE MAY REFER TO THE DECISIONS BY THE APEX COURT INTER ALIA IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (SC); AND CIT VS. STERLING PRODUCTS (1999) 237 ITR 579 (SC) AS ALSO OTHERS LISTED BY THE AUTHORITIES BELOW IN THEIR ORDERS INCLUDING BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BHARAT SEA FOODS VS. CIT 224 ITR 735. 5.2 WITH REGARD TO THE `LEASE FACTORIES FOR WHICH THE REVENUE IS IN APPEAL THE SAME STANDS DECIDED BY THE LD. CIT(A) IN FAVOUR OF THE A SSESSEE IN VIEW OF THE DECISION BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. RAJMOHAN CASHEWS (P.) LTD . REPORTED AT 185 ITR 472. AS NOTED EARLIER THIS ISSUE IS A R EGULAR FEATURE OF THE ASSESSEES ASSESSMENTS AND STANDS DECIDED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2001- 02 TO AY 2003-04. THE RESPECTIVE CASES OF BOTH THE PARTIES BEING THE SAME IT WOULD BE RELEVANT TO REPRODUCE THE FINDINGS AND THE DECISION BY THE TRIBUNAL PER ITS COMBINED ORDER FOR AY 2000-01 & 2001-02 IN RELATION TO THE REVENU ES APPEAL FOR AY 2001-02 (IN I.T.A. NO. 413/COCH/2009 DATED 25.11.2011/COPY PLAC ED ON RECORD) WHICH ARE AS UNDER: 8. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. THE VERY SAME ISSUE I.E. THE QUESTION OF THE ELIGIBILITY FOR DEDUCTION U/S. 80IB TO THE ASSESSEE STANDS DISCUSSED THOROUGHLY BY THE TRIBU NAL VIDE ITS ORDER DATED 30.3.2010 (I.T.A. NO. 247/COCH/2007 COPY PLACED I N FILE) IN THE ASSESSEES CASE FOR THE YEAR IMMEDIATELY FOLLOWING YEAR THAT RELIE D UPON BY THE LD. CIT(A) I.E. A.Y. 2003-04. THE MATTER HAS BEEN EXAMINED IN ABUN DANT DETAIL INCLUDING THE RELIANCE BY THE ASSESSEE ON THE DECISION IN THE CA SE OF CIT V. RAJMOHAN CASHEWS (P.) LTD. (SUPRA) AS WELL AS ON THAT BY THE TRIBUNAL IN THE ASSESSE ES OWN CASE FOR A.Y. 2002-03 DISCUSSING THE RELEVANT FINDINGS FOR THAT YEAR AT PARA 7.1 TO 7.3 OF ITS SAID ORDER ALSO ADVERTING TO THE SETTLED LEGAL PO SITION IN THE MATTER INCLUDING BY I.T.A. NO. 669/COCH/2008 & C.O.NO. 31/COCH/2009 ACIT KOLLAM VS. OLAM EXPORTS (I) LTD . 4 THE APEX COURT AND HONBLE JURISDICTIONAL HIGH COU RT DIRECTLY ON THE POINT. LIKEWISE THE DECISION BY THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT V. RAJMOHAN CASHEWS (P.) LTD. (SUPRA) STANDS DISCUSSED AT PARA 7.4 OF ITS ORDER. THE REVENUES OBJECTION QUA NON-MAINTENANCE OF SEPARAT E BOOKS STANDS ALSO DEALT WITH PER PARA 7.5 OF THE SAID ORDER. UNDER THE CIR CUMSTANCES THEREFORE THE ASSESSEES CASE BEING CONFINED TO A DECISION WHIC H STANDS DISCUSSED IN DETAIL BY THE TRIBUNAL PER ITS ORDER AFORESAID FOR A SUBSEQ UENT YEAR WE HAVE NO REASON TO TAKE A DIFFERENT VIEW IN THE MATTER AND ACCORDING LY THE MATTER IS REMITTED BACK TO THE FILE OF THE LD. CIT(A) FOR A DECISION ON MERI TS IN ACCORDANCE WITH LAW AND IN THE LIGHT OF THE DECISION BY THE TRIBUNAL IN THE A SSESSEES OWN CASE FOR A SUCCEEDING YEAR I.E. A.Y. 2003-04. WE DECIDE ACCORDINGLY. THE MATTER IT WOULD BE SEEN STANDS RESTORED BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY TO BE DECIDED IN TERMS OF THE FINDINGS A ND DECISION BY THE TRIBUNAL IN THE ASSESSEES CASE FOR AY 2003-04 (IN I.T.A. NO. 247/C OCH/2007 DATED 30/3/2010 COPY PLACED ON RECORD). THE TRIBUNAL WITH REFERENCE TO THE RELEVANT PROVISION OF LAW AS EXPLAINED BY THE HIGHER COURTS OF LAW INCLUDING TH E HONBLE JURISDICTIONAL HIGH COURT WHICH HAVE ABUNDANTLY CLARIFIED THAT THE DEDUCTION IS IN RESPECT OF `MANUFACTURING AND `NEW UNDERTAKINGS FOR A LIMITED SPECIFIED PERIOD OF TIME SOUGHT TO EMPHASIZE THE RELEVANT PARAMETERS OF BOTH THE QUALIFYING TERMS S O THAT THESE NEED TO BE SATISFIED. AGAIN WITH REFERENCE TO THE SAID CITED DECISIONS THE DE FINING ATTRIBUTES OF `PROCESSING AS WELL AS THE FACT THAT AN ARRANGEMENT OF `LEASE ENABLES AN ALMOST PERPETUAL CLAIM FOR DEDUCTION HIGHLIGHTED THE FACTUAL ASPECTS OF THE MATTER. WE S EE NO REASON NOT TO ADOPT THE CONSISTENT VIEW OF THIS TRIBUNAL AS EXPRESSED IN DETAIL PER I TS ORDER FOR THAT YEAR SO THAT THE MATTER IS ACCORDINGLY RESTORED TO THE FILE OF THE SAID AUTHOR ITY WITH LIKE DIRECTIONS AS IN THE PAST AND BY FOLLOWING THE DUE PROCESS OF LAW INCLUDING AS TO HEARING. WE DECIDE ACCORDINGLY. 5.3 AS REGARDS THE `TOLL FACTORIES THE MATTER HAS AGAIN BEEN AFTER FACTUALLY EXAMINING THE MATTER ADJUDICATED BY THE LD. CIT(A) IN FAVOUR OF THE REVENUE SO THAT IT IS NOT A SUBJECT MATTER OF THE REVENUES APPEAL. IN FACT I T IS A CLEAR CASE OF OUTSOURCING OF `PROCESSING BY PAYING `PROCESSING CHARGES SO THA T THERE WAS NO QUESTION OF DEDUCTION U/S. 80IB. IN FACT IN ITS APPEAL FOR A.Y. 2001-02 THE ASSESSEES COUNSEL HIMSELF CLARIFIED THAT IT HAD NOT CLAIMED DEDUCTION U/S. 80IB IN RESP ECT OF TOLL UNITS. WE DECIDE ACCORDINGLY. I.T.A. NO. 669/COCH/2008 & C.O.NO. 31/COCH/2009 ACIT KOLLAM VS. OLAM EXPORTS (I) LTD . 5 6. IN THE RESULT THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES AND THE ASSESSEES C.O. IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 20/12/2011 SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 20TH DECEMBER 2011 GJ COPY TO: 1. M/S. OLAM EXPORT (INDIA) LTD. BISHOP JEROME NAG AR KOLLAM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -1 KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV KOC HI. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE .