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

ITA 3403/MUM/2008 | 1999-2000
Pronouncement Date: 30-04-2010 | Result: Dismissed

Appeal Details

RSA Number 340319914 RSA 2008
Bench Mumbai
Appeal Number ITA 3403/MUM/2008
Duration Of Justice 1 year(s) 11 month(s) 15 day(s)
Appellant ITO 17(3)(2), MUMBAI
Respondent JITENDRA B. DOSHI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
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 15-05-2008
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 INCOME 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.138/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 MUMBAI. 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) 1999-2000 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. DOSHI MUMBAI. INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. 2000-01 ASSESSEE BY : SHRI JA YANT R. BHATT REVENUE BY : SHRI L.K. AGRAWAL ITA NOS.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 S HRI 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 20 00-01 RESPECTIVELY AGAINST WHICH BOTH ASSESSEES HAVE ALSO FILED CR OSS OBJECTIONS. SINCE FACTS ARE IDENTICAL AND GROUNDS ARE COMM ON ALL THESE APPEALS AND CROSS OBJECTIONS ARE DISPOSED OF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE LEAD MATTER IN THIS BATCH OF APPEALS IS APPEAL IN ITA NO.3403/M/2008 PERTAINING TO ITO VS. JITENDRA B. DOSHI FOR THE ASSESSMENT YEAR 1999-00. BRIEFLY STATED FACTS OF THE CASE A RE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING OUT BUSINESS IN THE NAME OF NAME AND STYLE OF M/S. JATIN INDUSTRIES (SILVASA). THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF NUT AND BOLTS ETC.. THE ASSESSING OFFICER ON VERIFICATION OF ASSESSMENT RECORD FOR ASSESSMENT Y EAR 2001- 02 NOTED THAT THE CIT-17 MUMBAI DURING THE COURSE OF PROCEEDINGS U/S.263 OF 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-O PENED THE ITA NOS.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. 80 IA/80IB FOR THESE YEARS UNDER CONSIDERATION IS WRONG AND THE ASSESSEE H AS UNDERSTATED THE INCOME LIABLE TO TAX. ACCORDINGLY A N OTICE U/S.148 WAS ISSUED. IN RESPONSE THE ASSESSEE REQUESTED THE ASSESSING OFFICE R TO TREAT THE RETURN OF INCOME ALREADY FILED AS DEEMED TO BE FILED IN RESPONSE TO NOTICE U/S.148. SUBSEQUENTLY THE ASSESSEE FAILE D 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 ADHO C ADDITION ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATE RIAL IN SUPPORT ALSO ALLOWED THE DEDUCTION U/S.80IA AND 80IB FOLLOWING THE ORDER OF THE TRIBUNAL IN RESPECT OF APPEAL FILED AGAINST THE R EVISION ORDER PASSED BY THE CIT IN ASSESSEES OWN CASE IN ITA NO.5779/M/04 FOR ASSESSMENT YEAR 2001-02 DATED 4.9.2006. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING EFFECTIVE GROUNDS OF APPEAL: ITA NOS.3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y:99-00 00-01 4 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION ON ACCOUNT OF ESTIMATION OF INCOM E 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 HEARING BOTH PARTIES AGREED THAT B OTH THE ISSUES ARE COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN JITENDRA B . DOSHI VS. ITO IN ITA NO.5779/M/04 FOR ASSESSMENT YEAR 2001-02 DAT ED 4.9.2006 WHEREIN THE TRIBUNAL HAS ALLOWED THE ASSESSEE' S CLAIM U/S. 80 IB OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE FURTH ER SUBMITS THAT THE SIMILAR ORDER OF THE TRIBUNAL IN THE CASE OF JAYA NT BABULAL DOSHI VS. ITO IN ITA NO.5780/M/04 FOR ASSESSMENT YEAR 2001-02 DAT ED 4.9.2006 HAS ALSO BEEN UPHELD BY THE HONBLE JURISDICTI ONAL 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 T HE SAID ORDER. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISIO N IN CIT VS. PENWALT INDIA LTD.(1992) 196 ITR 813(BOM.) TO SHOW T HAT 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 HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT FOR THE ITA NOS.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 PREJUD ICIAL TO THE INTERESTS OF THE REVENUE IN SO FAR AS THE DEDUCTION GRAN TED U/S.80IB IS CONCERNED. THE LD. CIT AFTER CONSIDERING THE ASSESSEE'S SUBMI SSION OBSERVED THAT THE POWER CONSUMPTION RECORDED IN THE BOO KS OF ACCOUNT OF THE ASSESSEE IS SO LOW WHICH IS NOT COMMENSURATE WITH THE PRODUCTION AND ACTIVITIES REPORTED BY THE ASSESSEE. HE ALSO FOUND THAT OUT OF 10 WORKERS ENROLLED IN THE ACQUITTANCE REGISTER OF THE ASSESSEE ONLY 8 PERSONS WERE WORKERS ENGAGED IN THE MANUFACTURIN G 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 AI D OF POWER AT LEAST 10 WORKERS SHOULD BE EMPLOYED IN THE MANUFACTURING PRO CESS 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 IN COME. AGAINST THE SAID ORDER OF THE LD. CIT THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL IN ASSESSEES APPEAL IN ITA NO. 5779/M/04 FOR ASSESSMENT YEAR 2001-02 DATED 4.9.2006 HAS ACCEPTED THE ASSE SSEE'S EXPLANATION THAT HE HAS EMPLOYED 10 WORKERS AND EVEN THOUGH DESIGNATED IN DIFFERENT NAMES AT DIFFERENT TIMES VIRT UALLY ALL OF THEM WERE WORKING IN DIFFERENT ASPECTS OF THE MANUFACTURING PROCESS OF THE ITA NOS.3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y:99-00 00-01 6 ASSESSEE. THE TRIBUNAL FURTHER HELD THAT THE PRESUMPTIO N OF THE COMMISSIONER THAT THE CONSUMPTION OF ELECTRICITY WAS NOT SUFFICIENT COULD BE TREATED ONLY AS AN OBSERVATION AND NOT AS A MA TERIAL FACT ON RECORD SO AS TO DISCREDIT THE FINDING OF THE AO AND ACCO RDINGLY SET ASIDE THE REVISION ORDER PASSED BY THE LD. CIT. FURTHER IN THE CASE OF CIT VS. JAYANT BABULAL DOSHI IN INCOME TAX APPEAL NO.5 31 OF 2009 DATED 24.4.2009 THEIR LORDSHIPS ON THE SIMILAR ISSUES H AVE HELD THAT THE FINDINGS RECORDED BY THE TRIBUNAL IS BASED ON APPRE CIATION OF EVIDENCE CONSEQUENTLY NO QUESTION OF LAW IS INVOLVED A ND 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 ISS UED 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 N OTICE ISSUED U/S.143(2)/142(1) OF THE ACT THE AO ESTIMATED T HE ASSESSEE'S INCOME AT RS.15.00 LACS ON AVERAGE BASIS AND DID NOT ALLO W 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 DEFINED UNDER THAT SAID PROVISIONS. ON APPEAL THE LD. CIT(A) DELETED THE ADHOC ADDITION AN D ALLOWED THE DEDUCTION U/S.80IA/80IB FOLLOWING THE ORDER OF THE TR IBUNAL IN ASSESSEES OWN CASE (SUPRA). ITA NOS.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 PEN WALT INDIA LTD. SUPRA RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. HO WEVER THE SAME IS ON A DIFFERENT ISSUE AND DOES NOT PERTAIN TO ISSUE OF NUMBER OF WORKERS EMPLOYED THEREFORE THE SAME IS DISTINGUISHABL E AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 8. SINCE THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED WITH OUT BRINGING ANY MATERIAL ON RECORD AND KEEPING IN VIEW THAT THE TRIBUNAL IN ASSESSMENT YEAR 2001-02 HAS ALREADY HELD THAT THE ASSE SSEE 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 TRIBUNA L (SUPRA) UPHOLD THE FINDING OF THE LD. CIT(A) IN DELETING THE ADDIT ION 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/MUM /2009 (A. Y. 1999-00)(BY ASSESSEE): 9. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER :- THE LD. CIT(A) HAS ERRED IN CONFIRMING THE AOS ACTION IN RE-OPENING THE ASSESSMENT U/S.147 OF THE ACT. ITA NOS.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 A SSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH W AS NOT OBJECTED TO BY THE LD. DR. 11. THIS BEING SO AND IN THE ABSENCE OF ANY SUPPORTING M ATERIAL PLACED ON RECORD THE GROUND RAISED BY THE ASSESSEE IS TREA TED AS DISMISSED BEING WITHDRAWN. ITA NO.3404/MUM/2008 (A. Y. 2000-01) (BY REVENUE) ITA NO.3405/MUM/2008 (A.Y. 1999-00) (BY REVENUE) ITA NO.3406/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 THER EFORE THE PLEA TAKEN BY THEM IN THE APPEAL IN ITA NO.3403/M/08 MAY BE CONSIDERED WHILE DECIDING THESE APPEALS. 13. THIS BEING SO AND IN THE ABSENCE OF ANY CONTRARY MAT ERIAL PLACED ON RECORD BY THE REVENUE WE KEEPING IN VIEW OF OUR F INDING RECORDED IN REVENUES APPEAL IN ITA NO.3403/MUM/2008 FOR THE ASSESSM ENT YEAR 1999-00 IN PARAS 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.135/MUM/2009 (A. Y. 2000-01)(BY ASSESSEE): C.O. NO.136/MUM/2009 (A. Y. 1999-00)(BY ASSESSEE): C.O. NO.137/MUM/2009 (A. Y. 2000-01)(BY ASSESSEE): ITA NOS.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 AOS A CTION IN RE-OPENING THE ASSESSMENT U/S.147 OF THE ACT. 15. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH W AS NOT OBJECTED TO BY THE LD. DR. 16. THIS BEING SO AND IN THE ABSENCE OF ANY SUPPORTING M ATERIAL PLACED ON RECORD THE GROUND RAISED BY THE ASSESSEE IS TREAT ED AS DISMISSED BEING WITHDRAWN. 17. IN THE RESULT THE REVENUES APPEALS AND ASSESSEES CR OSS OBJECTIONS 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: 30.4.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. ITA NOS.3403 04 05 & 06 + COS 135 TO 138/M/09 A.Y:99-00 00-01 10 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 23.4.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 26.4.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 30.4.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 30.4.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER