ACIT CIR 6(3), MUMBAI v. HEALING CROSS PHARMA P. LTD, MUMBAI

ITA 4245/MUM/2009 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 424519914 RSA 2009
Assessee PAN AAACH7040N
Bench Mumbai
Appeal Number ITA 4245/MUM/2009
Duration Of Justice 2 year(s) 12 day(s)
Appellant ACIT CIR 6(3), MUMBAI
Respondent HEALING CROSS PHARMA P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 22-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2006-2007
Appeal Filed On 10-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.4245/MUM/2009 (ASSESSMENT YEAR: 2006-07) ITA NO.3652/MUM/2010 (ASSESSMENT YEAR: 2007-08) ACIT CIR.6(3) ROOM NO.522 5TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI -400 020 ....... APPELLANT VS M/S. HEALING CROSS PHARMA PVT. LTD. 86-A HOMJI HALL COMPOUND MAZGAON MUMBAI -400 010 ..... RESPONDENT PAN: AAACH 7040 N APPELLANT BY: SHRI M.R. KUBAL RESPONDENT BY: SHRI DINESH JAIN O R D E R PER R.S. PADVEKAR JM THESE TWO APPEALS ARE FILED BY THE REVENUE FOR THE A.YS. 2006-07 AND 2007-08 CHALLENGING THE RESPECTIVE IMPUGNED ORD ERS OF THE LD. CIT (A)12 MUMBAI IN THE APPEAL FOR THE A.Y. 2006- 07 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT - (A) ERRED IN ALLOWING THE DEDUCTION U/S.80IB AMOUNTING TO ` 1 08 94 996/- BY RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF M/S. LUCKY MINMAT PVT. LTD. VS. CIT (24 5 ITR 830) AND MADRAS HIGH COURT DECISION IN THE CASE OF TAJ F IRE WORKS INDUSTRIES (288 ITR 323) AND BOMBAY HIGH COURT DECI SION IN ITA 4245/MUM/2009 ITA 3652/MUM/2010 M/S. HEALING CROSS PHARMA PVT. LTD. 2 THE CASE OF CIT VS. BANGALORE CLOTHING CO. (260 ITR 371) AND WITHOUT APPRECIATING THE FACT THAT THIS DEDUCTION W AS NOT ALLOWABLE IN VIEW OF THE EXPLANATION TO SECTION 80I A INSERTED BY THE FINANCE ACT 2007 WITH RETROSPECTIVE EFFECT FROM 01.04.2000 WHICH CLEARLY STIPULATES THE CONDITION THAT WORK CONTRACTORS ARE NOT ELIGIBLE FOR DEDUCTION UNDER SE CTION 80IB. 2. THE ASSESSEE HAS RAISED THE IDENTICAL GROUND IN THE A.Y. 2007- 08 EXCEPT THE QUANTUM OF DEDUCTION U/S.80IB. 3. WE HAVE HEARD THE PARTIES. THE ASSESSEE-COMPANY IS IN THE PHARMACEUTICAL FORMULATIONS. THE ASSESSEE CLAIMED THE DEDUCTION U/S.80IB OF THE I.T. ACT OF ` 1 08 94.996/- IN THE A.Y. 2006-07 AND ` 1 14 09 572/- IN THE A.Y. 2007-08. AS NOTED BY THE A.O. THE ASSESSEE-COMPANY HAS ENTERED INTO AGREEMENT WITH M/ S. CIPLA LTD. AND M/S. OSAKA PHARMA P. LTD. AND THE ASSESSEE IS E XECUTING WORKS CONTRACTS FOR THE SAID COMPANIES. THE ASSESSEE MAN UFACTURES MEDICINAL FORMULATIONS AT ITS PREMISES STRICTLY ON THE TERMS AND CONDITIONS LAID DOWN BY THE PRINCIPAL VIZ. M/S. CIP LA LTD. AND M/S. OSAKA PHARMA P. LTD. ALL THE REQUIRED RAW MATERIAL AND PACKAGING MATERIALS FOR THE MANUFACTURED PRODUCTS ARE SUPPLIE D BY THOSE TWO COMPANIES. THE OTHER EXPENDITURE IS ALSO BORNE BY THOSE PRINCIPALS ONLY FOR WHICH THE ASSESSEE WAS CARRYING OUT THE MA NUFACTURING. IN THE OPINION OF THE A.O. AS THE ASSESSEE DID NOT MA NUFACTURE ITS OWN PRODUCTS AND ONLY CARRIES THE WORKS CONTRACT FOR OT HER PHARMACEUTICAL COMPANIES HENCE NOT ELIGIBLE FOR DEDUCTION U/S.80 IB. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CI T (A). THE LD. CIT (A) FOLLOWING THE DECISION IN THE CASE OF M/S. ADVA NCE REMEDIES P. LTD. ALLOWED THE DEDUCTION. NOW THE REVENUE IS IN APPE AL BEFORE US. 4. THE LD. COUNSEL SUBMITS THAT WHILE ALLOWING THE DEDUCTION THE LD. CIT (A) RELIED ON THE DECISION IN THE CASE OF M /S. ADVANCE REMEDIES P. LTD. AND THE DECISION / ORDER IS NOW C ONFIRMED BY THE ITA 4245/MUM/2009 ITA 3652/MUM/2010 M/S. HEALING CROSS PHARMA PVT. LTD. 3 TRIBUNAL. THE LD. COUNSEL FILED THE COPY OF THE TR IBUNAL ORDER IN THE CASE OF ITO -6(1)(1) MUMBAI VS. M/S. ADVANCED REME DIES PVT. LTD. ( ITA NO.5714/MUM/2008) WHICH IS PLACED ON RECORD. H E FURTHER SUBMITS THAT IN THE ANOTHER GROUP COMPANY I.E. M/S. GOLDEN CROSS PHARMA PVT. LTD. ON THE IDENTICAL SET OF FACTS FO LLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. ADVANCE REMEDIES P VT. LTD. IN ITA 5714/M/2008 DATED 31.8.2009 THE TRIBUNAL HAS CONFIR MED THE ORDER OF THE LD. CIT(A) ALLOWING THE DEDUCTION TO THE SAI D ASSESSEE U/S.80IB. THE LD. COUNSEL FILED THE COPY OF THE TRIBUNAL ORDE R IN THE CASE OF M/S. GOLDEN CROSS PHARMA PVT. LTD. (ITA NO.4021/MUM /2009 DATED 21.5.2010) WHICH IS ALSO PLACED ON RECORD. PER CON TRA THE LD. D.R. FILES THE COPY OF THE DECISION IN THE CASE OF P.A. TIME INDUSTRIES VS. DY. CIT 101 ITD 132. 5. WE FIND THAT IN THE CASE OF M/S. ADVANCE REMEDIE S P. LTD. (SUPRA) THE ASSESSEE WAS CARRYING OUT THE JOB WORK FOR M/S. CIPLA LTD. AND THE DEDUCTION U/S.80IB WAS DENIED BY THE A.O. THE TRIBUNAL CONFIRMED THE ORDER OF THE LD. CIT (A) ALLOWING THE DEDUCTION TO THE SAID ASSESSEE U/S.80IB EVEN IN THE CASE WHERE THE A SSESSEE UNDERTAKES THE JOB WORK OR WORKS CONTRACT FOR OTHER COMPANIES LIKE THE PRESENT ASSESSEE. 6. IN THE CASE OF GOLDEN CROSS PHARMA PVT. LTD. (SU PRA) THE SAID COMPANY CARRIED OUT THE PRODUCTION ON THE WORKS CON TRACT BASIS FOR M/S. CIPLA LTD. AND M/S. OSAKA PHARMA PVT. LTD. AND IN THE SAID CASE ALSO A DEDUCTION WAS DENIED TO THE ASSESSEE U/S.80I B. THE LD. CIT (A) ALLOWED THE CLAIM OF SAID COMPANY. WHEN THE REVENUE FILED THE APPEAL BEFORE THE TRIBUNAL THE ORDER OF THE LD. CIT (A) H AS BEEN CONFIRMED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. IN THE PRESENT CASE THE LD. CIT (A) HAS FOLLOWED THE DECISION IN THE CA SE OF M/S. ADVANCE REMEDIES PVT. LTD. (SUPRA) WHICH HAS BEEN AFFIRMED BY THE TRIBUNAL. WE FIND NO REASON TO INTERFERE WITH THE ORDER OF TH E LD. CIT (A) AND ACCORDINGLY THE SAME IS CONFIRMED. ITA 4245/MUM/2009 ITA 3652/MUM/2010 M/S. HEALING CROSS PHARMA PVT. LTD. 4 7. IN THE RESULT BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 2ND JULY 2011. SD/- SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI DATE : 22ND JULY 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)12/4 MUMBAI. 4) THE CIT-CITY-6 MUMBAI. 5) THE D.R. H BENCH MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T. MUMBAI *CHAVAN ITA 4245/MUM/2009 ITA 3652/MUM/2010 M/S. HEALING CROSS PHARMA PVT. LTD. 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 11/12.07.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 13.07.2011 SR.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 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER