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Dy. Commissioner of Income Tax -4(1), Room No.640, 6th Floor, Aayakar Bhavan, M.K.Road, Mumbai-400020 Vs. M/s Krupa Chatons Mfg. Co. Pvt. Ltd., 5/32, 2nd Panjarpole Lane, C.P.Tank Road, Mumbai-400004
January, 07th 2014
                     ,                  `'          
       IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI
           BEFORE S/SHRI B.R.MITTAL,(JM) AND N.K.BILLAIYA (AM)
        ..  ,                                    .  .  ,     

                        ./I.T.A.No.658/Mum/2012
                     (   / Assessment Year: 2005-06)
      Dy. Commissioner of Income / M/s Krupa Chatons Mfg. Co. Pvt. Ltd.,
      Tax -4(1), Room No.640,    Vs. 5/32, 2nd Panjarpole Lane,
      6th Floor, Aayakar Bhavan,     C.P.Tank Road,
      M.K.Road,                      Mumbai-400004
      Mumbai-400020
           . /   . /PAN/GIR No. : AAAC16011L
           ( /Appellant)         ..  (  / Respondent)

                     Cross objection/       No.120/Mum/2013
                                          In
                        ./I.T.A. No.658/Mum/2012
                     (   / Assessment Year : 2005-06)

     Art Chatons P.Ltd (now merged    /         Dy. Commissioner of Income Tax -
     with M/s Krupa Chatons Mfg.      Vs.       4(1), Room No.640,
     Co. Pvt. Ltd.),                            6th Floor, Aayakar Bhavan,
     5/32, 2nd Panjarpole Lane,                 M.K.Road,
     C.P.Tank Road,                             Mumbai-400020
     Mumbai-400004

                 . /   . /PAN/GIR No. :                            AAAC16011L

              / Appellant by                :    Shri M.L.Perumal
                /Revenue by                      Shri K Shivram

                  / Date of Hearing
                                                      : 1.1.2014
              /Date of Pronouncement : 1.1.2014

                                     / O R D E R
Per B.R.Mittal, JM

        The Department has filed     this appeal for assessment year     2005-06 against
order of ld. CIT(A) dated 2.11.2011 on following grounds :
        "1.    On the facts and in the circumstances of the case and in law, the ld
        CIT(A) erred in allowing the excess deduction u/s 80IB of Rs.37,68,576/- in
        respect of Unit ­I"
        2.      On the facts and in the circumstances of the case, the impugned order of
        the ld. CIT(A) is contrary to law to be set aside and that of the AO be restored"

2.      The assessee has also filed cross-objection therein by taking following grounds :
                                                                       I.T.A.No.658/Mum/2012
                                               2                 Cross objection No.120/Mum/2013







               "1.   The reassessment u/s 148, is bad in law, and liable to be quashed.

               2.       The ld. CIT(A) erred in upholding the re-assessment u/s 148
               without appreciating the fact that, in the earlier assessment proceedings
               all the details were filed, and the ld. AO allowed the deduction u/s 80IB
               vide assessment u/s 143(3) after due application of mind. Hence
               reopening is nothing but change of opinion and hence liable to be
               quashed."

3.     Facts giving rise to this appeal are that the assessee filed return of income on
28.1.2005 declaring total income of Rs.3,38,63,104/-. The assessment was completed
u/s 143(3) of the Act, 1961. (the Act) on 31.12.2007 determining the total income at
Rs.3,93,38,810/-. Subsequently, AO observed that the assessee claimed               excessive
deduction u/s 80IB to the tune of Rs.37,68,576/-. Therefore, AO initiated proceedings
u/s 147 and 148 of the      Act and reopened the assessment. The assessee did not
comply with the notices issued by AO on the ground that         the point was looked into
while finalizing the original assessment and hence again re-opening of the assessment
will amount to change of opinion.      The AO did not accept the submissions of the
assessee     for the reasons given in assessment order and added an amount of
Rs.37,68,576/- to the total income of assessee. Being aggrieved, the assessee filed
appeal before the First Appellate Authority.

4.     Before the First Appellate Authority, the assessee reiterated the contentions as
mentioned in the assessment order and also relied on the decisions in the cases of CIT
V/s Canara Workshop (P) Ltd (1986) 161 ITR 320 (SC), Hindustan Unilever Ltd V/s DCIT
(325 ITR 102) (Mum) and Meera Cotton and Synthetic Mills (P) Ltd V/s CIT(2009) 29
SOT 177 (Mum). The ld. CIT(A) after considering the contentions of the assessee and
decisions relied upon by the assessee, observed and held that the AO has completely
misinterpreted the relevant provisions when he held that that the loss suffered by the
assessee in the non-eligible Unit ­II be reduced from the profit of the eligible Unit-I for
granting the deduction u/s 80IB(3) even when the assessee had a positive gross total
income of Rs.5,38,23,793/- before claiming deduction u/s 80IB against the profit of
Unit-I. Accordingly, the ld. CIT(A) allowed deduction at 30% u/s 80IB(3) on the profit of
Rs.6,62,35,625/-. Aggrieved by the order of ld. CIT(A), the Revenue is in further appeal
before us.


5.     Ld. DR narrated the facts of the case save and except relied on the order of AO.
On the other hand, the ld. AR submitted that the issue stands covered in favour of the
assessee by the decisions of Hon'ble Bombay High Court in the case of Hindustan
                                                                       I.T.A.No.658/Mum/2012
                                             3                   Cross objection No.120/Mum/2013


Unilever Ltd (supra) and Hon'ble Apex Court in the case of Synco Industries Ltd. V/s
Assessing Officer [2008] 299 ITR 444 (SC).




6.     We have considered the submissions of the ld. Representatives of the parties,
perused the orders of authorities below including the case law relied upon by the
assessee. We find that the issue raised in this appeal is squarely covered in favour of
the assessee by the decision of Hon'ble Bombay High Court in the case of Hindustan
Unilever Ltd (supra) as well as the decision of Hon'ble Apex Court in the case of Synco
Industries Ltd. (supra).   The ld. DR could not       bring any decision or material to
contradict the above facts. In view of this position, we are of the considered view that
the finding of the ld. CIT(A) is justified. Accordingly, we confirm the order of ld. CIT(A)
by dismissing the appeal filed by revenue.

Cross objection
7.     At the time of hearing,      ld. AR did not press cross-objection filed by the
assessee. Therefore, we dismiss the cross-objection of the assessee as not pressed for.

8.     In the result, the appeal of the department as well as cross-objection filed by
assessee both are dismissed.

       Order pronounced in the open court on 1st day of January, 2014
               1st day of January, 2014   

         Sd                                                     sd
(.  .  /N.K.BILLAIYA)                                    (..  /B.R.MITTAL)
   / ACCOUNTANT MEMBER                                     / JUDICIAL MEMBER

  Mumbai

. ../ SRL , Sr. PS
        /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent.
3.     () / The CIT(A)-
4.      / CIT
5.      ,     ,        / DR, ITAT,
     Mumbai
6.     / Guard file.
                                                                    / BY ORDER,
               True copy
                                                           (Asstt. Registrar)
                                           ,   /ITAT, Mumbai

 
 
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