ITO 8(3)(3), MUMBAI v. TECHNO PRODUCTS (BOMBAY) P. LTD, MUMBAI

ITA 3439/MUM/2010 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 343919914 RSA 2010
Assessee PAN AAACT4030E
Bench Mumbai
Appeal Number ITA 3439/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 22 day(s)
Appellant ITO 8(3)(3), MUMBAI
Respondent TECHNO PRODUCTS (BOMBAY) P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 22-07-2011
Date Of Final Hearing 19-07-2011
Next Hearing Date 19-07-2011
Assessment Year 2006-2007
Appeal Filed On 30-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI V.DURGA RAO JM ITA NO.2779/MUM/2010 : ASST.YEAR 2006-2007 M/S.TECHNO PRODUCTS (B) PRIVATE LIMITED C-WING EAST WEST INDUSTRIAL CENTRE ANDHERI KURLA ROAD SAFED POOL MUMBAI 400 072. PAN : AAACT4030E. VS. THE INCOME TAX OFFICER WARD 8(3)-3 MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.3439/MUM/2010 : ASST.YEAR 2006-2007 THE INCOME TAX OFFICER WARD 8(3)-3 MUMBAI. VS. M/S.TECHNO PRODUCTS (B) PRIVATE LIMITED C-WING EAST WEST INDUSTRIAL CENTRE ANDHERI KURLA ROAD SAFED POOL MUMBAI 400 072. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI G.P.TRIVEDI ASSESSEE BY : DR.K.SHIVRAM O R D E R PER R.S.SYAL AM : THESE ARE TWO CROSS APPEALS - ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASS ED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 22.02.2010 IN RELATION TO THE ASSESSMENT YE AR 2006-2007. 2. FIRST ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE U/S.14A TO THE TUNE OF RS.93 591. THE A.O. HAS COMPUTED THE DISALLOWANCE U/S.14A AT RS.9 3 591. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. AGGRIEVED THEREBY THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DISALLOWANCE U/S 14A IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE H ONBLE BOMBAY HIGH COURT IN GODREJ & BOYCE LTD. MFG. CO. VS. DCIT (2010) 328 ITR 81 (BOM) HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICAB LE IN CIRCUMSTANCES AS ARE PREVAILING ITA NOS.2779 & 3439/MUM/2010 M/S.TECHNO PRODUCTS (B) PVT. LTD. 2 PRESENTLY AND THE DISALLO WANCE HAS TO BE WORKED OUT BY THE AO ON SOME `REASONABLE BASIS AND NOT RULE 8D. UNDER SUCH CIRCUMSTANCES WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISALLOWANCE AS PER THE AF ORE-NOTED JUDGMENT AFTER ALLOWING A REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 4. SECOND ISSUE RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDITION OF RS.3 09 260 MADE BY THE ASSESSING OFFICER U/ S.50C OF THE ACT. BR IEFLY STATED THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE SOLD TWO PROPERTIE S FOR A SUM OF RS.5 20 000 AND RS.5 30 000 RESPECTIVELY. THE ASS ESSING OFFICER APPLIED THE PROVISIONS OF SECTION 50C FOR DETERMINING THE AMOUNT OF CAPITAL GAIN BY ADOPTING FULL VALUE OF CONSIDERATION AS STAMP VALUE TAKEN BY THE REGISTRAR. THE ASSESSEES CONTENTION THAT THE CAPITAL GAIN ARISING FROM THE TRANSFER OF DEPRECIABLE ASSET COULD NOT BE CONSIDERED IN THE PROVISIONS OF SECTION 50C DID NOT FIND FAVOUR WITH THE AUTHORITIES BELOW. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTED THAT THE SPECIAL BE NCH OF THE TRIBUNAL IN THE CASE OF ITO VS. UNITED MARINE ACADEMY [(2 011) 130 ITD 113 (MUM) (SB)] HAS HELD THAT IN THE CASE OF CAPITAL GAIN ARISING FROM THE TRAN SFER OF DEPRECIABLE ASSET U/S.50 THE PROVISIONS OF SECTION 50C CAN BE APPLIED TO ADOPT THE VA LUE ASSESSED FOR STAMP DUTY PAYMENT AS FULL VALUE OF C ONSIDERATION. THE LEARNED C OUNSEL FOR THE ASSESSEE WAS FAIR ENOUGH TO ACCEPT THIS PROPOSITION. WE THEREFORE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 6. THE ONLY ISSUE RAISED BY THE REVENUE IN ITS APPEAL IS AGAINST NOT ALLOWING DEDUCTION U/S.80-IB AMOUNTING TO RS.1 14 06 863. AT THE VERY OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE PL ACED ON RECORD A COPY OF THE ORDER PASSED BY THE TRIBUNAL IN ITS OWN CASE IN THE IMMEDI ATELY PRECEDING ASSESSMENT YEAR I.E. 2005- 2006 IN WHICH THE MATTER OF DEDUCTION U/S 80-IB HAS BEEN RESTORED TO THE FILE OF ITA NOS.2779 & 3439/MUM/2010 M/S.TECHNO PRODUCTS (B) PVT. LTD. 3 A.O. FOR CONSIDERING AS TO WHETHER THE REQUISITE NUMBER OF EMPLOYEES WERE EMPLOYED BY THE ASSESSEE OR NOT. BOTH THE SIDE S ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE REVENUE IN ITS APPEAL ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF ASSESS MENT YEAR 2005-2006 DISCU SSED ABOVE. RESPECTFULLY FOLLOWING THE ORDER PASSED BY THE TRIBUNAL DATED 15.12. 2010 IN ASSESSEES OWN CASE IN ITA NO.4799/MUM/2008 WE SET ASIDE THE IMPUGNED OR DER ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF A. O. FOR DECIDING IT AFRESH BY TAKING INTO CONSIDERATION THE FINAL VIEW TAKEN BY HIM IN ASSESSMENT YEAR 2005-2006 PURSUANT TO THE SAID ORDER OF THE TRIBUNAL. 7. IN THE RESULT THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THAT OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 22 ND DAY OF JULY 2011 . SD/- SD/- ( V.DURGA RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 22 ND JULY 2011 . DEVDAS*` COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XVIII MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.