ACIT, CHENNAI v. M/s. Capricorn Food Products India Ltd., CHENNAI

ITA 687/CHNY/2010 | 2006-2007
Pronouncement Date: 20-01-2011 | Result: Allowed

Appeal Details

RSA Number 68721714 RSA 2010
Assessee PAN AABCC1550B
Bench Chennai
Appeal Number ITA 687/CHNY/2010
Duration Of Justice 8 month(s) 9 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. Capricorn Food Products India Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 20-01-2011
Date Of Final Hearing 18-01-2011
Next Hearing Date 18-01-2011
Assessment Year 2006-2007
Appeal Filed On 11-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI (BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER) ..... I.T.A. NO. 687/MDS/2010 & I.T.A. NO. 891/MDS/2010 ASSESSMENT YEARS : 2006-07 & 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE I(3) CHENNAI - 600 034. (APPELLANT) V. M/S CAPRICORN FOOD PRODUCTS INDIA LTD. 81 NEW AVADI ROAD KILPAUK CHENNAI - 600 010. PAN : AABCC1550B (RESPONDENT) APPELLANT BY: SHRI K.E.B. RENGARAJAN JUNIOR STANDING COUNSEL RESPONDENT BY: SH RI V. SRINIVAS O R D E R PER HARI OM MARATHA JUDICIAL MEMBER : THESE ARE APPEALS BY THE REVENUE FOR ASSESSMENT YE ARS 2006- 07 AND 2007-08. IN BOTH THESE APPEALS IDENTICAL I SSUES ARE INVOLVED. THEREFORE FOR THE SAKE OF CONVENIENCE AND BREVITY WE ARE PROCEEDING TO DECIDE THEM BY COMMON ORDER. 2. THE ASSESSEE IS A DOMESTIC COMPANY MANUFACTURING VARIOUS FOOD PRODUCTS. IN BOTH THESE YEARS A CLAIM UNDER SECTION 10B OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) HAS BEEN MADE BUT IN I.T.A. NOS. 687 & 891/MDS/10 2 ARREAR YEARS NO SUCH CLAIM WAD MADE. AS PER THE AS SESSEE A LEAD UNIT HAS COMMENCED PRODUCTION WITH EFFECT FROM 1.4. 2002 AND IS NOT EXTENSION OF ALL UNITS NOR IS IT FORMED BY SPLITTIN G OF THE MACHINERIES OF ALL THE UNITS. IT WAS STATED THAT MACHINERY INSTAL LED IN THE NEW UNIT WAS INDEPENDENT AND SOPHISTICATED ONE FOR WHICH NEC ESSARY PERMISSION FROM THE AUTHORITIES CONCERNED WAS ALSO OBTAINED. BUT THE A.O. WAS NOT AGREEABLE BECAUSE IN HIS OPINION T HE FACTORY IN QUESTION HAS BEEN FUNCTION AT THE VERY SAME ADDRESS WHERE IT WAS ORIGINALLY ESTABLISHED; THAT NO ADDITIONAL BUILDING S HAVE BEEN ERECTED TO INSTALL NEW MACHINERY; THAT CERTIFICATE OF APPRO VAL AS 100% EOU DATED 16.3.2001 WAS VALID UPTO 31 ST MARCH 2007 AND AT THE BACK SIDE OF THIS CERTIFICATE APPROVAL WAS ACCORDED FOR ADDIT IONAL ITEMS AND THE ADDITIONAL ITEMS WERE APPROVED ONLY ON 14.5.2007; S EPARATE BOOKS OF ACCOUNTS WERE NOT MAINTAINED FOR LOCAL AND OVERSEAS EXPORT; THAT DEDUCTION UNDER SECTION 80HHC WAS CLAIMED DURING EA RLIER YEARS AND THAT THIS WAS MERE EXTENSION OF THE OLD UNITS IN AN Y CASE. WITH THE ABOVE REASONING THE A.O. DECLINED TO GIVE DEDUCTIO N UNDER SECTION 10 OF THE ACT TO THE ASSESSEE. AGGRIEVED THE ASSE SSEE TOOK THE MATTER IN APPEAL BEFORE THE CIT(APPEALS) AND THE CI T(APPEALS) HAS GIVEN RELIEF TO THE ASSESSEE. NOW THE REVENUE IS AGGRIEVED AND HAS OBJECTED TO THE GRANT OF DEDUCTION UNDER SECTION 10 B OF THE ACT TO THE ASSESSEE FOR BOTH THE YEARS ONLY THE ONLY PREMISE T HAT THIS RELIEF HAS I.T.A. NOS. 687 & 891/MDS/10 3 BEEN GIVEN TO THE ASSESSEE ON THE BASIS OF FRESH MA TERIALS WHICH WERE PRODUCED BEFORE HIM FOR THE FIRST TIME AND THE SE DOCUMENTS WERE NOT CONFRONTED WITH THE A.O. 3. AFTER HEARING BOTH SIDES WE HAVE FOUND THAT THE LD. CIT(APPEALS) HAS GIVEN RELIEF TO THE ASSESSEE ON TH E BASIS OF FRESH EVIDENCES FILED BEFORE HIM AND THESE EVIDENCES WERE CONFRONTED TO THE A.O. IT WAS ARGUED BY THE LEARNED A.R. THAT FO R ASSESSMENT YEAR 2008-09 THE A.O. HIMSELF HAS FOUND THE ASSESSEE AS ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT BUT HAS NOT ALLOWED THIS CLAIM. 4. AFTER CONSIDERING RIVAL SUBMISSIONS WE FIND EVE N FROM THE APPELLATE ORDERS THAT THE CERTIFICATE OF APPROVAL W HERE 100% EOU WAS FOUND TO BE VALID UPTO 31 ST MARCH 2007 AND THEREOF ADDITIONAL ITEMS WERE APPROVED ONLY FROM 14.5.2007 ONWARDS UPTO 31.3 .2012. THEREFORE THE FACTS ARE SO JUMBLED FOR THESE TWO A SSESSMENT YEARS THAT THE MATTER NEEDS TO GO BACK TO THE FILE OF THE A.O. IN VIEW OF THE SPECIFIC GROUND TAKEN BY THE REVENUE THAT RULE 46A OF THE INCOME- TAX RULES 1962 HAS NOT BEEN FOLLOWED AS NO OPPORTU NITY WAS GIVEN TO THE A.O. TO EXAMINE THE DETAILS CONSIDERED IN SUPPO RT OF THE CLAIM AND AGAINST THE FINDINGS GIVEN IN THE REMAND REPORT FRO M THE A.O. WHERE HE HAD MADE ADVERSE REMARKS BUT STILL THE LD. CIT( APPEALS) HAS I.T.A. NOS. 687 & 891/MDS/10 4 CONSIDERED THE FRESH MATERIAL. IN THESE CIRCUMSTAN CES IT BECOMES IMPERATIVE TO SET ASIDE THE FINDING OF LD. CIT(APPE ALS) IN THIS REGARD AND TO RESTORE THESE APPEALS FOR BOTH THE YEARS TO THE FILE OF THE A.O. FOR DECIDING THIS ISSUE ONLY AFTER CONSIDERING THE ENTIRE EVIDENCES PRODUCED BEFORE THE CIT(APPEALS) OR TO BE PRODUCED AFRESH BY THE ASSESSEE. NO NEED TO MENTION THAT THE A.O. SHALL G IVE AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON 20 TH JANUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) (HAR I OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI DATED THE 20 TH JANUARY 2011. KRI . COPY FORWARDED TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-III CHENNAI (4) CIT CHENNAI-I CHENNAI (5) D.R. (6) GUARD FILE