M/s Tirumala Milk Products Pvt Ltd, Visakhapatnam v. The JCIT Range-2 Guntur, Guntur

ITA 247/VIZ/2011 | 2008-2009
Pronouncement Date: 08-09-2011 | Result: Allowed

Appeal Details

RSA Number 24725314 RSA 2011
Assessee PAN AABCT7907M
Bench Visakhapatnam
Appeal Number ITA 247/VIZ/2011
Duration Of Justice 1 month(s) 17 day(s)
Appellant M/s Tirumala Milk Products Pvt Ltd, Visakhapatnam
Respondent The JCIT Range-2 Guntur, Guntur
Appeal Type Income Tax Appeal
Pronouncement Date 08-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 08-09-2011
Assessment Year 2008-2009
Appeal Filed On 22-07-2011
Judgment Text
ITA NO247/V/2011 TIRUMALA MILK PRODUCTS PVT. LTD. N ARASARAOPETA. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 247 /VIZAG/ 20 11 ASSESSMENT YEAR : 2008 - 09 M/S. TIRUMALA MILK PRODUCTS PVT. LTD. NARASARAOPETA VS. JCIT RANGE - 2 GUNTUR (APPELLANT) (RESPONDENT) PAN NO.AABCT 7907M APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI TH.L. PETER CIT(DR) DATE OF HEAR I NG: 06.09.2011 DATE OF PRONOUNCEMENT: 08 .09.2011 ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) MAINLY ON TWO GROUNDS I.E. FIRST IS WITH REG ARD TO THE DISALLOWANCE OF CLAIM OF DEDUCTION RAISED U/S 80IB OF THE INCOME TA X ACT (HEREINAFTER CALLED AS AN ACT) AND THE SECOND IS FOR DISALLOWANCE OF ADDITIONAL DEPRECIATION. 2. DURING THE COURSE OF HEARING OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE IMPUGNED ISSUES IN THIS APPEAL ARE SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSE ES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 2002-03 & 2007-08. COPY O F THE ORDER OF THE TRIBUNAL IS PLACED ON RECORD. 3. WITH REGARD TO THE DEDUCTION CLAIMED U/S 80IB OF THE ACT LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TRIBUNAL HA S EXAMINED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS AND FI NALLY CONCLUDED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT AS IT WAS ALLOWED IN EARLIER YEARS BY THE REVENUE. THE RELEVANT OBSERVA TIONS OF THE TRIBUNAL ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- ITA NO247/V/2011 TIRUMALA MILK PRODUCTS PVT. LTD. N ARASARAOPETA. 2 ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF B.J. CHITALE WAS PASSED ON 6.6.2008 WHEREAS THE AS SESSMENT ORDER IN THESE CASES WERE PASSED IN DECEMBER 2007. THEREFORE THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN T HE CASE OF B.J. CHITALE CANNOT BE CALLED TO BE AVAILABLE WITH THE A SSESSING OFFICER TO TAKE A VIEW CONTRARY TO THE VIEW TAKEN IN EARLIER A SSESSMENT YEARS. MOREOVER WE DO NOT FIND ANY VALID REASONS WITH THE ASSESSING OFFICERS TO REJECT THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT ALLOWED IN EARLIER YEARS IN SUCCEEDING YEARS. AFTER THIS ORDER OF THE SPECIAL BENCH IN THE CASE OF B.J. CHITALE VARIOUS JUDGEMEN TS ARE RENDERED BY THE APEX COURT AND VARIOUS HIGH COURTS ON THIS S UBJECT AND IN CASE OF INDIA CINE AGENCIES THE HONORABLE APEX COU RT VIDE ITS JUDGEMENT DATED 12.11.2008 HAS CLARIFIED THE EXPRES SION PRODUCTION AND MANUFACTURE AND HELD THAT PACKIN G LABELING RE- LABELLING CONTAINERS REPACKING FROM BULK PACKAGE TO RETAIL PACKAGE AND THE ADOPTION OF OTHER METHOD TO RENDER THE PROD UCT MARKETABLE ARE ALSO A PART OF PRODUCTIONS. THE DED UCTION U/S 80IB IS TO BE ALLOWED WHEN THE ASSESSEE IS ENGAGED IN TH E ACTIVITIES OF MANUFACTURE OR PRODUCTION. ADMITTEDLY THE ASSESSE E IS ENGAGED IN PROCESSING AND TRADING OF MILK AND MILK PRODUCTS. THE BULK OF MILK IS BEING PROCURED FROM DIFFERENT PLACES AND AFTER I TS PASTEURIZATION IT WAS PACKED IN SMALL PACKETS FOR ITS MARKETING AN D THE PACKING FROM BULK MATERIAL TO RETAIL PACKAGE AMOUNTS TO A P RODUCTION AS PER THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE C ASE OF INDIA CINE AGENCIES (SUPRA). THEREFORE ONCE THE REVENUE IN THE INITIAL YEAR HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND ALL OWED DEDUCTION U/S 80IB WHICH HAS TO BE ALLOWED CONSECUTIVELY FOR 10 SUCCEEDING YEARS THE REVENUE SHOULD NOT HAVE TAKEN A VIEW CON TRARY TO THE EARLIER VIEW IN SUCCEEDING YEAR TO DISALLOW THE CLA IM OF THE ASSESSEES. ADMITTEDLY THERE IS NO CHANGE IN THE L EGAL PROPOSITION. THEREFORE WE ARE OF THE VIEW THAT REVENUE WAS NOT JUSTIFIED IN TAKING A CONTRARY VIEW IN SUCCEEDING YEARS. WE THE REFORE SET ASIDE THE ORDER OF THE CIT(A) IN ALL THESE CASES AND DIRE CT THE A.O. TO ALLOW THE CLAIM OF DEDUCTION U/S 80IB TO THE ASSESS EES. 4. THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED THA T THE TRIBUNAL HAS MAINLY GRANTED THE RELIEF TO THE ASSESSEE FOR THE R EASONS THAT THIS CLAIM WAS ALLOWED BY THE REVENUE IN EARLIER ASSESSMENT YEARS AND WHEN THE ASSESSING OFFICER HAS PASSED AN ORDER THE ORDER OF THE SPECI AL BENCH OF THE TRIBUNAL IN THE CASE OF B.J. CHITALE WAS NOT RENDERED AT ALL AN D THEREFORE THE ASSESSING OFFICER HAS NO JURISDICTION TO TAKE A VIEW CONTRARY TO THE VIEW TAKEN IN EARLIER YEARS. BUT IN THE IMPUGNED ASSESSMENT YEAR THE AS SESSING OFFICER HAS TAKEN INTO ACCOUNT THE ORDER OF THE SPECIAL BENCH AND DEC IDED THE ISSUE ACCORDINGLY. THEREFORE THE REVENUE HAS RIGHTLY DISALLOWED THE C LAIM RAISED U/S 80IB OF THE ACT. ITA NO247/V/2011 TIRUMALA MILK PRODUCTS PVT. LTD. N ARASARAOPETA. 3 5. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE W E FIND THAT THE IDENTICAL ISSUE WAS EXAMINED BY THE TRIBUNAL IN EARLIER ASSES SMENT YEARS IN WHICH THE TRIBUNAL HAS ALLOWED THE RELIEF TO THE ASSESSEES IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS AND ALSO THE FACT THAT THE CLAIM WAS ALLOWED BY THE REVENUE IN EARLIER YEARS. SIMILAR IS THE POSITION IN THE I NSTANT CASE. SINCE THE CLAIM OF DEDUCTION WAS ALLOWED IN EARLIER YEARS IT CANNOT B E DISALLOWED IN THE IMPUGNED ASSESSMENT YEARS. AFTER THE ORDER OF THE SPECIAL BENCH VARIOUS JUDGEMENTS ON THE IMPUGNED ISSUE WAS RENDERED BY TH E VARIOUS HIGH COURTS CLARIFYING THE LEGAL POSITION ON THE SUBJECT. THE TRIBUNAL HAS ALSO GIVEN A SPECIFIC FINDING IN ITS ORDER THAT ONCE THE REVENUE IN THE INITIAL YEAR HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND ALLOWED THE DEDUCTION U/S 80IB WHICH IS TO BE ALLOWED CONSECUTIVELY FOR 10 SUCCEEDING YE ARS THE REVENUE SHOULD NOT HAVE TAKEN A VIEW CONTRARY TO THE EARLIER VIEW IN SUCCEEDING YEARS TO DISALLOW THE CLAIM OF THE ASSESSEES. SIMILAR IS TH E POSITION IN THE IMPUGNED ASSESSMENT YEAR. THEREFORE WE FIND NO REASON TO T AKE A CONTRARY VIEW. MOREOVER THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEES AFTER HAVING EXAMINED THE VARIOUS JUDICIAL PRONOUNCEMENTS RENDER ED ON THE ISSUE. THEREFORE FOLLOWING THE AFORESAID ORDER OF THE TRI BUNAL WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE A.O. TO ALLOW TH E CLAIM OF THE ASSESSEE. 6. WITH REGARD TO THE SECOND GROUND OF HIGHER/ADDIT IONAL DEPRECIATION WE FIND THAT THIS GROUND IS ALSO COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2002-0 3 2005-06 AND 2007- 08. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE EXTRACTED HEREUNDER: HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAR EFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT UNDENIABLY THE AUDIT REPORT WAS NOT FILED ALONG WIT H THE RETURN OF INCOME BUT SUBSEQUENTLY IT WAS FILED. NO DOUBT AS PER THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT THE AS SESSEE IS REQUIRED TO FILE THE AUDIT REPORT ALONG WITH THE RETURN OF I NCOME TO CLAIM ADDITIONAL DEPRECIATION. BUT IN CASE IT IS NOT FIL ED ALONG WITH THE RETURN AND FILED SUBSEQUENTLY THE CLAIM OF THE DEP RECIATION SHOULD NOT BE DENIED ONLY FOR THE TECHNICAL DEFAULT. SINC E THE AUDIT REPORT WAS FILED SUBSEQUENTLY THE CLAIM OF THE ADDITIONAL DEPRECIATION SHOULD HAVE BEEN EXAMINED BY THE A.O. IN ACCORDANCE WITH LAW. ITA NO247/V/2011 TIRUMALA MILK PRODUCTS PVT. LTD. N ARASARAOPETA. 4 WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD AND DIRECT THE A.O. TO RE-EXAMINE THE CLAIM OF ADDITION AL DEPRECIATION AS PER PROVISIONS OF LAW. SO FAR AS THE ISSUE OF INDUSTRIAL UNDERTAKING IS CO NCERNED WE FIND THAT ASSESSEE WAS REGISTERED AS A SSI WITH THE CONCERNED AUTHORITIES AND CERTIFICATE TO THIS EFFECT IS ALSO PLACED ON RECORD. NOTHING IS PLACED ON RECORD BY THE REVENUE THAT THE REGISTRATION GRANTED TO THE ASSESSEES AS A SSI WAS EVER WITHDRAW N BY THE CONCERNED AUTHORITIES. MOREOVER IT IS ALSO NOTICE D THAT AT THE TIME OF GRANT OF REGISTRATION AS A SSI THE REQUISITE CO NDITIONS WERE ALSO FULFILLED. WE THEREFORE OF THE VIEW THAT UNTIL AND UNLESS THE REGISTRATION GRANTED AS A SSI BY THE CONCERNED AUTH ORITIES IS NOT WITHDRAWN THE ASSESSEE SHOULD BE TREATED AS A SMAL L SCALE INDUSTRIAL UNDERTAKING. THE SMALL SCALE INDUSTRIAL UNDERTAKING IS DEFINED IN CLAUSE (G) OF SUB-SECTION 14 OF SECTION 80IB ACCORDING TO WHICH SMALL SCALE INDUSTRIAL UNDERTAKING MEANS AN I NDUSTRIAL UNDERTAKING RECOGNIZED AS SSI U/S 11B OF THE INDUST RIES (DEVELOPMENT AND REGULATION) ACT 1951. SINCE THE A SSESSEE IS RECOGNIZED AS SSI BY THE COMPETENT AUTHORITY TILL D ATE WE FIND NO MERIT IN THESE FINDINGS OF THE CIT(A) THAT THE ASSE SSEE WAS NOT AN INDUSTRIAL UNDERTAKING. 7. IN THAT YEAR THE CLAIM OF THE ASSESSEE FOR ADDIT IONAL DEPRECIATION WAS DISALLOWED ON TWO POINTS; ONE IS ON NON-FILING OF A UDIT REPORT ALONG WITH THE RETURN OF INCOME AND THE SECOND FOR NON-RECOGNITION OF THE ASSESSEE AS A SMALL SCALE INDUSTRY. WITH REGARD TO THE NON-FILIN G OF AUDIT REPORT ALONG WITH THE RETURN THE TRIBUNAL HAS HELD THAT SINCE THE AU DIT REPORT WAS FILED SUBSEQUENTLY THE CLAIM OF ADDITIONAL DEPRECIATION S HOULD HAVE BEEN EXAMINED BY THE A.O. IN ACCORDANCE WITH LAW AND THE MATTER W AS SET ASIDE TO THE A.O. FOR RE-ADJUDICATION. SO FAR AS THE ISSUE OF INDUST RIAL UNDERTAKING IS CONCERNED THE TRIBUNAL HAS HELD THAT THE ASSESSEE WAS REGISTE RED AS A SSI WITH THE COMPETENT AUTHORITIES AND THE REGISTRATION EARLIER GRANTED AS AN SSI WAS NEVER WITHDRAWN. THEREFORE THE ASSESSEE SHOULD BE TREATED AS AN INDUSTRIAL UNDERTAKING. BUT IN THE IMPUGNED ASSESSMENT YEAR THE CLAIM OF DEPRECIATION WAS DISALLOWED ON THE GROUND THAT COMPANY IS NEITHE R A MANUFACTURING COMPANY NOR A PROCESSING COMPANY AND IS NOT ENGAGED IN PRODUCTION OR MANUFACTURE OF ARTICLES OR THING. IN THE AFORESAI D ORDER OF THE TRIBUNAL THE TRIBUNAL HAS CATEGORICALLY HELD THAT THE ASSESSEE I S A SMALL SCALE INDUSTRY AND IS ALSO ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. MEANING THEREBY THE ASSESSEE IS ENGAGED EITHER IN MANUFACTURING OR PROD UCTION OF ARTICLES. SINCE ITA NO247/V/2011 TIRUMALA MILK PRODUCTS PVT. LTD. N ARASARAOPETA. 5 THESE FINDINGS OF THE TRIBUNAL HAS NOT BEEN REVERSE D SO FAR THE ASSESSEE IS TO BE HELD TO BE THE SMALL SCALE INDUSTRY ENGAGED IN M ANUFACTURING OR PRODUCTION OF ANY ARTICLE OR THING. THEREFORE THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION IN ACCORDANCE WITH LAW. IT IS ALSO NOT CLEAR FROM THE ORDER OF THE LOWER AUTHORITIES WHETHER THE A.O. HA S EXAMINED THE OTHER CONDITIONS FOR ALLOWING AN ADDITIONAL DEPRECIATION TO THE ASSESSEES BECAUSE HE HAS DISALLOWED THE CLAIM OF THE ASSESSEES ON THE GR OUND THAT ASSESSEE WAS NEITHER A MANUFACTURING COMPANY NOR A PROCESSING CO MPANY AND IS NOT ENGAGED IN PRODUCTION OR MANUFACTURING OF ANY ARTIC LE OR THING. THEREFORE WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE TH E MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO EXAMINE OTHER CONDITIONS A ND ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW AND THE TERMS INDICATED HEREIN ABOVE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 08.09.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 08 TH SEPTEMBER 2011 COPY TO 1 SHRI G.V.N. HARI G.V.N. HARI & CO. CHARTERED ACCO UNTANTS 2 ND FLOOR 30 - 14-11 DABBIRU MANSIONS DABAGARDENS VISAKHAPATNAM -530 020. 2 JCIT RANGE - 2 GUNTUR 3 THE CI T GUNTUR 4 THE CIT (A) GUNTUR 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM