ORIENTAL VENEER PRODUCTS LTD, MUMBAI v. DCIT CIR 7(1), MUMBAI

ITA 4982/MUM/2009 | 2001-2002
Pronouncement Date: 14-05-2010 | Result: Allowed

Appeal Details

RSA Number 498219914 RSA 2009
Assessee PAN AAACO0490M
Bench Mumbai
Appeal Number ITA 4982/MUM/2009
Duration Of Justice 8 month(s) 13 day(s)
Appellant ORIENTAL VENEER PRODUCTS LTD, MUMBAI
Respondent DCIT CIR 7(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 14-05-2010
Assessment Year 2001-2002
Appeal Filed On 01-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI T.R. SOOD (AM) ITA NO.4982/MUM/2009 ASSESSMENT YEAR : 2001-02 ORIENTAL VENEER PRODUCTS LTD. 25 MOHAMMEDI LAKDA BAZAAR NO.1 MAULANA SHAUKAT ALI ROAD GRANT ROAD MUMBAI-400 008. ..( APPELLANT ) P.A. NO. (AAACO 0490 M) VS. DY. COMMISSIONER OF INCOME TAX CIRCLE -7(1) AAYAKAR BHAVAN M.K. ROAD MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI SAMEER G. DALAL RESPONDENT BY : SHRI B. K. SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 15.6.2009 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2001-02 CONFIRMING THE PENALTY IMPOSED BY THE ASS ESSING OFFICER U/S.271(1)(C)OF THE INCOME TAX ACT 1961 (THE ACT) RS.13 52 450/-. ITA NO.4982/M/09 A.Y:01-02 2 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT IN THE QUANTUM APPEAL THE TRIBUNAL IN ORIENTA L VENEER PRODUCTS LTD. VS. ACIT IN ITA NO.1453 & 1454/MUM/2007 FOR ASSE SSMENT YEAR 2001-02 AND 2002-03 ORDER DATED 18.8.2009 HAS ALLOWE D THE ASSESSEE'S APPEAL BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FO R DEDUCTION U/S.80I AND 80HH OF THE ACT ON THE INTEREST EARNED ON SHO RT TERM DEPOSITS. HE THEREFORE SUBMITS THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER ON THE SAME IS LIABLE TO BE DELETED. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. 3. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A). 4. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND TH AT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF V ENEER AND COMPREG BOARDS FILED ITS RETURN DECLARING TOTAL INCOME AT RS.90 16 338/-. DURING THE COURSE OF ASSESSMENT IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB BY CONSIDERING THE INTEREST INCOME O N FDRS AS PART OF THE INCOME DERIVED FROM THE INDUSTRIAL UNDERT AKING. HOWEVER THE ASSESSMENT WAS COMPLETED AFTER DISALLOWING THE INTEREST EARNED ON FDRS FROM THE COMPUTATION OF BUSINESS INCOME FOR THE PUR POSE OF ITA NO.4982/M/09 A.Y:01-02 3 ALLOWING DEDUCTION U/S.80IB OF THE ACT AT AN INCOME OF RS.1 30 95 470/- VIDE ORDER DATED 27.2.2006 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT. ON APPEAL THE LD. CIT(A) UPH ELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN THE MEANTI ME THE ASSESSING OFFICER IMPOSED PENALTY OF RS.13 52 450/- ON TH E DISALLOWANCE OF DEDUCTION U/S.80IB VIDE ORDER DATED 2 8.3.2007 PASSED U/S. 274 R.W.S. 271 (1)(C) OF THE ACT. ON APPEAL THE LD. CIT(A) CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER . 5. IN THE QUANTUM APPEAL IN ORIENTAL VENEER PRODUCTS LTD.(SUPRA) IT HAS BEEN HELD BY THE TRIBUNAL VIDE PARA-9 OF ITS O RDER DATED 18.8.2009 AS UNDER : 9. WE FIND THAT THE INTEREST EARNED BY THE APPELLANT OF RS.1 55 80 163/- IS ON ACCOUNT OF FIX ED DEPOSIT PLACED WITH THE BANK FOR THE PURPOSE OF OBT AINING LETTER OF CREDIT FACILITIES AND IS COVERED BY THE D ECISION OF CIT VS. INDO SWISS JEWELS LTD. AND ANOTHER 284 ITR 389 (BOM.) WHEREIN IT HAS BEEN HELD THAT INTEREST EARNE D ON SHORT TERM DEPOSIT ON THE MONEY KEPT APART FOR THE PURPOSES OF BUSINESS HAS TO BE TREATED AS INCOME E ARNED FROM THE BUSINESS AND COULD NOT BE TREATED AS INC OME FROM OTHER SOURCES AND THE SAME WAS ELIGIBLE FOR DEDUCTION U/S.80I AND 80HH OF THE INCOME TAX ACT. RESPECTIVELY FOLLOWING THE DECISION OF THE JURISDIC TIONAL HIGH COURT WE ALLOW THE ASSESSEES APPEAL ON THIS I SSUE. 6. SINCE THE ADDITION ON WHICH THE PENALTY WAS IMPOSED HAS BEEN DELETED BY THE TRIBUNAL SUPRA WE ARE OF THE VIEW THAT THE PENALTY HAS ITA NO.4982/M/09 A.Y:01-02 4 NO LEGS TO STAND AND ACCORDINGLY THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS DELETED. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. 6. IN THE RESULT ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.5.2010. SD/- SD/- (T.R. SOOD) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 14.5.2010. 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. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 5.5.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 6.5.10 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 14.5.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 17.5.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER