ITO 25(2)(4), MUMBAI v. SHRI. GIRISH A. SONI, MUMBAI

ITA 6433/MUM/2008 | 2005-2006
Pronouncement Date: 28-05-2010 | Result: Allowed

Appeal Details

RSA Number 643319914 RSA 2008
Assessee PAN AMYPS0274J
Bench Mumbai
Appeal Number ITA 6433/MUM/2008
Duration Of Justice 1 year(s) 6 month(s) 23 day(s)
Appellant ITO 25(2)(4), MUMBAI
Respondent SHRI. GIRISH A. SONI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted G
Tribunal Order Date 28-05-2010
Date Of Final Hearing 26-03-2010
Next Hearing Date 26-03-2010
Assessment Year 2005-2006
Appeal Filed On 05-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI T.R. SOOD AM AND SHRI V.DURGA RAO JM I.T.A.NO. 6433/MUM/2008 ASSESSMENT YEAR : 2005-06 THE INCOME-TAX OFFICER-25(2)(4) MUMBAI VS. SHRI GIRISH A. SONI 501/A MOHAN TERRACE MUMBAI 400092 OR C-803 YAMUNADRI MAHAVIR NAGAR MUMBAI 400 057. PAN: AMYPS 0274 J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MOHD USMAN RESPONDENT BY : SHRI ANIL THAKRAR O R D E R PER T.R. SOOD AM: IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN GRANTING DEDUCTION UNDE R SECTION 80IB(5) TO THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD.CIT(A) ERRED IN GRANTING DEDUCTION UNDER SEC TION 80IB(5) TO THE ASSESSEE WHEN THE ASSESSEE FAILED TO ESTABLISH MANUFACTURING ACTIVITIES AT SILVASSA FACTORY WHICH WAS FOUND CLOSED BY THE POSTAL AUTHORITIES. 2. AFTER HEARING BOTH THE PARTIES WE FIND THAT DUR ING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSE SSEE HAD CLAIMED DEDUCTION U/S.80-IB OF THE ACT. HOWEVER THE ASSESSING OFFICE R OBSERVED THAT THOUGH THE ASSESSEE HAD CLAIMED THAT ITS FACTORY WAS SITUATED AT SILVASA WHICH WAS A NOTIFIED BACKWARD DISTRICT BUT NO ELECTRICITY BILLS WERE PR ODUCED. IT AS FURTHER NOTICED THAT NO ASSETS WERE APPEARING IN THE STATEMENT OF ASSETS IN RESPECT OF THIS FACTORY. ASSESSING OFFICER ALSO NOTICED THAT EVEN NOTICE COU LD NOT BE SERVED AT THE ADDRESS OF THE FACTORY AND POSTAL AUTHORITIES HAD SENT THE NOTICE BACK WITH THE REMARKS CLOSED. IN THIS BACKGROUND THE AO WAS OF THE VIE W THAT THE FACTORY AT SILVASA WAS CLOSED. HE HAS ALSO NOTICED THAT EVEN THE MATER IALS PURCHASED BY THE ASSESSEE ITA NO.6433/M/08 M/S. GIRISH A. SONI 2 HAVE BEEN DIRECTLY SENT TO BHAYANDER (EAST) WHICH F ALLS IN GUJARAT WHICH FURTHER SHOWS THAT SILVASA FACTORY WAS NOT WORKING AND THER EFORE DEDUCTION U/S.80IB WAS DENIED. 3. BEFORE THE CIT(A) IT WAS MAINLY SUBMITTED THAT T HE FACTORY IN SILVASA WAS TAKEN ON RENT AND THE RENT OF RS.88 000/- WAS DEBIT ED TO PROFIT & LOSS ACCOUNT. SOME DETAILS REGARDING FIXED ASSETS ETC. WERE ALSO FILED. IT WAS EXPLAINED THAT RAW- MATERIALS WAS BEING SENT TO BHAYANDER WAS ONLY FOR SOME JOB WORK CONSISTING OF BUFFING AND POLISHING AND LATER ON SUCH MATERIAL WA S SENT TO SILVASSA FACTORY. 4. THE LEARNED CIT(A) ALLOWED THE DEDUCTION VIDE PA RA 3.6 OF HIS ORDER WHICH READS AS UNDER: PERUSAL OF RETURN FILED BY THE APPELLANT DETAILS G IVEN AT THE TIME OF ASSESSMENT PROCEEDINGS AND THROUGH LETTER DATED 17. 12.2007 AND CLARIFICATION SUBMITTED BEFORE THE UNDERSIGNED PROV E THAT APPELLANT HAD MANUFACTURED STAINLESS STEEL UTENSILS OF SILVASSA. THE FACTORY SHED WAS NOT OWNED BY HIM HENCE HE TOOK IT ON RENT AND LEASE RE NTALS OF RS.88 000/- FOR THE FACTORY ARE DEBITED TO PROFIT AND LOSS ACCOUNT. ONLY JOB WORK OF BUFFING AND POLISHING IS GOT DONE FROM BHANANDER. REST OF T HE MANUFACTURING WORK OF UTENSILS IS DONE AT SILVASSA. APPELLANT PAID SAL ES TAX AT SILVASSA. FINISHED GOODS ARE EXPORTED OUT FROM DRONAGIRI AND NAVASEVA SEA PORT JNPT WHICH ARE THE NEAREST PORTS FROM SILVASSA. BILLS OF EXPO RT SALES AND PURCHASES SHOW THAT ALL THE PURCHASES AND SALES ARE DONE FROM SILVASSA. ONLY SOME BILLS OF PURCHASE OF MATERIAL SHOW DIRECT DELIVERY OF RAW MATERIAL AT BHAYANDER. OTHER BILLS SHOW DIRECT DELIVERY OF MAT ERIAL AT SILVASSA ELECTRICITY BILLS SHOW PAYMENT OF ELECTRICITY CHARG ES BY M/S. PRIT ENTERPRISES TO ELECTRICITY DEPARTMENT DADRA & NAGAR HAVELI SI LVASSA. TELEPHONE BILLS ARE ALSO CALLED BY THE UNDERSIGNED WHICH SHOWS PAYM ENT FOR LANDLINE TELEPHONE NO. 2630558 TO BHARAT SANCHAR NIGAM LIMIT ED VALSAD FOR THE TELEPHONE INSTALLED AT FACTORY PREMISES OF APPELLAN T AT SILVASSA. LEASE AGREEMENT FOR THE FACTORY PREMISES WAS ENTERED ON 0 5.10.1999 BETWEEN M/S. KRISHNA DEVELOPERS (LESSOR) AND M/S. PRIT ENTE RPRISES PROPRIETOR GIRISH SONI (LESSEE) FOR GALA NO. 102 ADMEASURING 9 61.25 SQ.FT. AREA IN KRISHNA INDUSTRIAL ESTATE AT DADRA & NAGAR HAVELI. LEASE RENT WAS FIXED AT RS. 4 000/- PER MONTH ON 05.10.1999 AND WAS TO BE I NCREASED 10% AFTER EVERY ONE YEAR. APPELLANT PAID SECURITY DEPOSIT OF RS. 25 000/- IN1999 FOR THE PREMISES. APPELLANT OBTAINED POLLUTION CONTROL CERTIFICATE FROM THE POLLUTION CONTROL COMMITTEE DAMAN & DIU AND DADRA & NAGAR HAVELI ON 06.11.2002 FOR M/S. PRIT ENTERPRISES FOR MANUFACTUR ING STAINLESS STEEL UTENSILS. APPELLANT PURCHASED 3 BUFFING MOTORS ON 1 2.04.2001 FURTHER 3 BUFFING MACHINES ON 20.04.2001. 1 KNIFE GRINDING MA CHINE ON 24.04.2001 1 MORE KNIFE GRINDING MACHINE ON 04.05.2001 PIPE P UFFING MACHINE ON 09.05.2001 10 HAND PRESS ON 17.05.2001 FURTHER 12 HAND PRESS ON 19.05.2001 FURTHER 18 HAD PRESS ON 26.05.2001 AND ALL THESE PLANT AND MACHINERIES ARE DELIVERED AND INSTALLED AT THE FACT ORY PREMISES OF APPELLANT AT SILVASSA. THE APPELLANT HAS BEEN DOING MANUFACT URING ACTIVITY FROM THE ABOVE PREMISES SINCE HE TOOK THE FACTORY PREMISES O N LEASE. MOREOVER APPELLANT HA BEEN ALLOWED DEDUCTION U/S.80IB(5) IN ALL THE EARLIER YEARS. THIS IS THE 4 TH YEAR OF CLAIM. ALL THE ABOVE DETAILS SHOW THAT THE APPELLANT ITA NO.6433/M/08 M/S. GIRISH A. SONI 3 SET UP ITS INDUSTRY IN 1999-2000 STARTING MANUFACTU RING OF STEEL UTENSILS GOT SOME JOB WORK LIKE POLISHING BUFFING AND CUTTI NG DONE FROM 3 JOB WORKERS AT BHAYANDAR DISPATCHED GOODS FOR EXPORT F ROM NAVA SEVA SEA PORT JNPT HAS ELECTRIC CONNECTION AND PAID ELECTRI CITY BILLS AT SILVASSA HAS LAND LINE TELEPHONE OF FACTORY PREMISES AT SILVASSA AND IS GRANTED POLLUTION CONTROL CERTIFICATE FROM POLLUTION CONTROL COMMITTE E BY DADRA & NAGAR HAVELI OFFICE. IN VIEW OF ABOVE I AM SATISFIED THA T APPELLANT WAS ENGAGED IN MANUFACTURING OF GOODS AT BACKWARD AREA HENCE IS ENTITLED FOR DEDUCTION U/S.80IB(5) OF THE INCOME-TAX ACT 1961. AO IS DIRE CTED TO ALLOW DEDUCTION AS DISCUSSED ABOVE. 5. BOTH THE PARTIES WERE HEARD IN DETAIL. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY AND FIND THAT SOME DETAILS LI KE DETAILS OF FIXED ASSETS OR ELECTRICITY BILLS WERE NOT FILED BEFORE THE AO AND CIT(A) HAD ALLOWED THE RELIEF ON THE BASIS OF SOME MATERIALS WHICH HE NEVER GOT VERI FIED FROM ASSESSING OFFICER. THEREFORE IT WAS PROPOSED THAT THE MATTER MAY TRAV EL BACK TO THE AO FOR WHICH THE LEARNED COUNSEL FOR THE ASSESSEE HAVE NO OBJECT ION. THEREFORE IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE LEARNED C IT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE A.O. FOR RE-CONSIDERATION OF THE ISSUE AFTER CONSIDERING THE FRESH MATERIAL WHICH MAY BE FILED BEFORE HIM AND/OR WHICH WAS FILED BEFORE THE CIT(A). 6. IN THE RESULT THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MAY 2010. SD. SD. (V. DURGA RAO) (T. R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED THE 28 TH MAY 2010. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT MUMBAI CITY -25 MUMBAI 4. THE CIT(A)-XXV MUMBAI 5. THE DR G BENCH MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR ITAT MUMBAI