RAMAN POLYMERS, MUMBAI v. JCIT RG 20(2), MUMBAI

ITA 3764/MUM/2009 | 2005-2006
Pronouncement Date: 09-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 376419914 RSA 2009
Assessee PAN AAFFR2904R
Bench Mumbai
Appeal Number ITA 3764/MUM/2009
Duration Of Justice 1 year(s) 29 day(s)
Appellant RAMAN POLYMERS, MUMBAI
Respondent JCIT RG 20(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 09-07-2010
Date Of Final Hearing 13-04-2010
Next Hearing Date 13-04-2010
Assessment Year 2005-2006
Appeal Filed On 10-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 3764/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. RAMAN POLYMERS JCIT RANGE 20(2) 902 EMBASSY TOWER AAYAKAR BHAVAN M.K. ROAD 7 BUNGALOWS VERSOVA VS. MUMBAI 400020 ANDHERI (W) MUMBAI 400058 PAN - AAFFR 2904 R APPELLANT RESPONDENT APPELLANT BY: SHRI K.R. LAKSHMINARAYANAN RESPONDENT BY: SHRI SUNIL KUMAR SINGH O R D E R PER B. RAMAKOTAIAH A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)-XX MUMBAI DATED 16.03.2009. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 2. THE LEARNED CIT(A) ERRED IN OMITTING TO PASS OR DER ON GR. NO. 2 OF FORM NO. 35 AND IN NOT DELETING THE RE-WORKING OF W DV OF ASSETS MADE BY THE A.O. BY TAKING INTO A/C. NOTIONAL DEPRE CIATION DEEMED TO HAVE BEEN ALLOWED ON ASSET FOR EARLIER YEARS UPT O AND INCLUSIVE OF ASSESSMENT YEAR 2001-2002 WHEN DEPRECIATION WAS NEI THER CLAIMED BY APPELLATE NOR GRANTED BY THE DEPT. 3. THE LEARNED CIT(A) ERRED IN NOT TAKING INTO A/C. THE DECISION OF THE MUMBAI ITAT IN THE CASE OF SADHURAM PATEL AND SONS V ITO 309 ITR AT 3. 4. THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE DED UCTION U/S. 80IB(4) TO DISALLOWANCE MADE ON CAR & TELEPHONE EXP. AS PER GROUND RAISED IN G.R. NO. 5 OF FORM NO. 35. 5. IT IS PRAYED THE DISALLOWANCE OF RS.1 20 587/- O UT OF DEPRECIATION MAY BE DELETED AND DEDUCTION U/S. 80-IB(4) MAY BE A LLOWED ON THE INCOME OF THE INDUSTRIAL UNDERTAKING WHEN INCLUDE T O DISALLOWANCE OUT OF CAR & TELEPHONE EXPENSES. 3. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE. THE ISSUE IN GROUND NOS. 2 & 3 IS WITH REFERENCE TO THE ISSUE OF CLAIM OF DEPR ECIATION. THE ASSESSEE HAS ITA NO. 3764/MUM/2009 M/S. RAMAN POLYMERS 2 NOT CLAIMED DEPRECIATION FROM A.Y. 2001-02 ONWARDS AND CLAIMED DEDUCTION UNDER SECTION 80IB AMOUNTING TO 100% OF THE GROSS T OTAL INCOME. IN THIS YEAR THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB BEING 6 TH YEAR OF CLAIM ON A REDUCED PERCENTAGE. THE A.O. WHI LE WORKING OUT THE DEDUCTION FOLLOWING THE JUDGEMENT OF THE JURISDICTI ONAL HIGH COURT IN THE CASE OF INDIA RAYON LTD. 261 ITR 98 WORKED OUT THE DEPRECIATION AS IF DEPRECIATION WAS DEEMED TO HAVE BEEN ALLOWED IN EAR LIER YEARS AND REFIXED THE OPENING WDV. HE CALCULATED THE ALLOWABLE DEPREC IATION AT RS.5 90 950/- AS AGAINST RS.7 11 537/-. THE ADDITION MADE WAS RS .1 20 587/-. BEFORE THE CIT(A) IT WAS CONTENDED THAT THE ASSESSEE WAS ELIGI BLE FOR CLAIMING DEPRECIATION ON HIGHER WDV AS THE SAID DECISION REL IED UPON BY THE A.O. IS DISTINGUISHABLE IN VIEW OF THE DECISION OF THE HON' BLE SUPREME COURT IN THE CASE OF MAHENDRA MILLS LTD. 243 ITR 56 AND THE ORDE R OF THE ITAT MUMBAI IN THE CASE OF PLASTIC BENDS INDIA 94 ITD 295. THE CIT (A) HOWEVER DID NOT AGREE WITH THE CONTENTIONS AND FOLLOWING THE DECISI ON OF THE ITAT SPECIAL BENCH IN THE CASE OF VAHID PAPER CONVERTERS 98 ITD 165 AND OTHER JUDGEMENTS OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. SCOOP INDUSTRIES PVT. LTD. 206-TIOL-392 (BOM) DATED 10.10.2006 CONFI RMED THE ACTION OF THE A.O. HENCE THE ASSESSEE IS AGGRIEVED. 4. AT THE OUTSET THE LEARNED D.R. SUBMITTED THAT THESE GROUNDS ARE TO BE DISMISSED IN VIEW OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PLASTIC BENDS INDIA 185 TAXMAN 182 (BOM) WHICH HAD REVERSED THE ITAT DECISION. IN VIEW OF THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT THE ASSESSEES GROUNDS ARE REJECTED AND THE ORDER OF THE CIT(A) IS CONFIRMED. 5. GROUND NO. 4 AND 5 IS WITH REFERENCE TO NOT ALLOWIN G THE DEDUCTION UNDER SECTION 80IB(4) ON THE ITEMS OF DISALLOWANCE CLAIMED OUT OF CAR AND TELEPHONE EXPENSES WHICH WERE RAISED BEFORE THE CIT (A) AS GROUND NO. 5 IN FORM NO. 35. AS SEEN FROM THE ORDER OF THE CIT(A) T HIS GROUND WAS NOT DISPOSED OFF. HOWEVER IT WAS SUBMITTED THAT THE A. O. CAN BE DIRECTED TO CONSIDER THE DEDUCTION UNDER SECTION 80IB ON THE DI SALLOWANCE MADE OUT OF TELEPHONE AND CAR EXPENSES AS THE ASSESSEE WAS ENTI TLED FOR DEDUCTION UNDER SECTION 80IB. ITA NO. 3764/MUM/2009 M/S. RAMAN POLYMERS 3 6. THE LEARNED D.R. HOWEVER AGREED TO RESTORE THE MA TER TO THE FILE OF THE A.O. 7. ON THIS IT IS NOTICED THAT THE A.O. HAS NOT QUANTI FIED THE TOTAL INCOME CORRECTLY. THE A.O. STARTED THE COMPUTATION WITH TH E RETURNED INCOME AND HE ADDED THE DISALLOWANCE OUT OF RE-WORKING OF DEPR ECIATION AND DISALLOWANCE OF TELEPHONE AND CAR EXPENSES. THIS CO MPUTATION RESULTED IN NOT CONSIDERING ASSESSEES 80IB DEDUCTION ON THE BA SIS OF PROFITS OF THE UNDERTAKING. SINCE THE ASSESSEES INCOME OF THE UNI T GETS INCREASED TO THE EXTENT OF DISALLOWANCE OF EXPENDITURE CLAIMS THE GR OUND IS ALLOWABLE. THE A.O. IS DIRECTED TO REWORK OUT THE BUSINESS PROFIT OF THE UNDERTAKING AND THEN ALLOW THE NECESSARY DEDUCTION UNDER SECTION 80 IB ON THESE AMOUNTS WHICH WERE ALSO DISALLOWED OUT OF CAR AND TELEPHONE EXPENSES. ASSESSEES GROUND IS ALLOWED. A.O. IS DIRECTED TO REWORK OUT T HE DEDUCTION ACCORDINGLY. 8. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 9 TH JULY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XX MUMBAI 4. THE CIT XX MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.