IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH `F' BENCH
BEFORE SHRI I.P.BANSAL(JUDICIAL MEMBER) AND
SHRI B.RAMAKOTAIAH (ACCOUNTANT MEMBER)
ITA No.6862/Mum/2011
Assessment Year: 2005-06
ACIT 2(3), M/s. Umesh Pencils Processors Pvt Ltd.,
Aayakar Bhavan, M.K. Road, 309, Himalaya House, 79, Palton Road,
Mumbai. Mumbai-001.
Vs.
PA No.AAACU 0701 F
(Appellant) (Respondent)
Appellant by : Shri Manjunath Karkitalli
Respondent by: Manpreet Kaur Padam
Date of hearing: 10.9.2012
Date of pronouncement: 14 .9.2012
ORDER
Per I.P.Bansal, JM:
The department has filed this appeal. It is directed against order dated
26.7.2011 of ld CIT(A) for assessment year 2005-06. Grounds read as under:
"1. On the facts and in the circumstances of the case and in law, ld
CIT(A) erred allowing the claim of deduction u/s. 80IA & 80IB based on
the decision of Hon'ble ITAT `I' Bench Bombay in the case of M/s.
Hindustan Pencil Ltd.
2. On the facts and in the circusmtacnes of the case and in law, ld CIT(A)
failed to appreciate that the judgment of M/s. Hindustan Pencil Ltd. is
based on the decision of Tribunal on M/s. Patel Stationers Pvt Ltd., & M/s
Kirti Statioenrs Pvt Ltd., where both have been challenged by the
revenue before the Hon'ble High Court. Appeal should also be filed in the
line with the precedence of other assessment years in the same ground."
2. Facts in brief are that the assessee is engaged in manufacturing Paste in Silvassa
Unit and unpolished pencils at Pollachi Unit. The AO during the course of assessment
proceedings noticed that assessee had claimed deduction of Rs.1,04,943 u/s. 80IA of
the Act in respect of its silvasa unit and Rs.14,59,882 u/s. 80IB of the Act in respect of
2 ITA No.6862/Mum/2011
Assessment Year: 2005-06
its Pollachi Unit. The AO disallowed the claim of the assessee on the ground that
assessee did not satisfy the conditions laid down in sections 80IA & 80IB of the Act. On
appeal filed by assessee, ld CIT(A) following the orders of ld CIT(A) for assessment
years 2000-2001 and 2001-02 with respect to silvasa unit and for assessment year
2006-07 with respect to Pollachi unit directed the AO to allow deduction u/s. 80IA and
80IB of the Act after verifying the conditions regarding the number of workers
employed. Being aggrieved, department is in appeal before us.
3. At the time of hearing, it was brought to our notice that the issue under
consideration is covered by the decision dated 4.7.2012 of co-ordinate Bench of this
Tribunal in assessee's own case for assessment years 1998-99, 2000-2001, 2001-02,
2003-04, 2006-07 and 2007-08 in I.T.A. Nos.4775 to 4780/M/20011, copy placed on
record.
4. We have heard both the sides and have perused the material on record. We find
that similar issue had come up for consideration before the Tribunal in the appeals filed
by the department against the orders of ld CIT(A) for assessment years 1998-99, 2000-
2001, 2001-02, 2006-07 and 2007-08 and the Tribunal vide paras 2 to 8 of its order
rejected the appeals filed by department. A copy of the order has been given to ld D.R.
The relevant observations of the Tribunal read as under:
"2. The grounds of appeal taken in all the six appeals by the department are
common, which are as under:
1. On the facts and in the circumstances of the case and in law the
Ld.CIT(A) erred in allowing the claim of deduction u/s 80IA & 80IB based
on the decision of Hon'ble ITAT `I' Bench, Bombay in the case of M/s.
Hindustan Pencil Ltd.
2. On the facts and in the circumstances of the case and in law the Ld.
CIT(A) failed to appreciate that the judgment of M/s Hindustan Pencil Ltd.
is based on the decision of Tribunal on M/s Patel Stationers P. Ltd. & M/s
Kirti Stationers P. Ltd. where both have been challenged by the revenue
before the Hon'ble High Court. Appeal should also be filed in line with the
precedence of other assessment years in the same ground.
3. On the facts and in the circumstances of the case and in law the
Ld.CIT(A) erred in allowing assessee's claim of 80IA deduction in respect
of Umergaon unit wherein it was conclusively proved that all the
conditions laid down in sec. 80IA(2) were not fully adhered to.
3 ITA No.6862/Mum/2011
Assessment Year: 2005-06
4. For these and other grounds that may be urged at the time of hearing,
the decision of CIT(A) may be set aside and that of the AO restored.
3. At the time of hearing, the Authorised Representative for the assessee made a
preliminary objection on the maintainability of four out of the six appeals filed by
the department, on account of tax effect for the purposes of the appeals filed
before the ITAT. The AR placed a chart with the working of the tax effect in each
of the six appeals filed by the department and pointed out that in assessment
years 1998-99, 2000-01 2001-02 and 2003-04 the tax effect is less then Rs.
3,00,000/- as per the instruction No. 3/2011 dated 09-02-2011 read with
instruction No. 5/2008 dated 15-05-2008. Thus according to the chart, appeals
filed by the department in assessment years 1998-99, 2000- 01, 2001-02 and
2003-04 are non maintainable, falling within the purview of the aforesaid
instructions and assessment years 2006-07 and 2007-08 are not in the purview
of the said instructions.
4. The AR further pointed out that the basis of filing of the present appeals and
keeping the issue alive in all the cases of the assessee, was that the Department
had filed appeals before the Hon'ble Bombay High Court against the decision of
the co-ordinate Bench in the case of Patel Stationers Pvt. Ltd., which was
followed by the CIT(A) in allowing relief to the assessee. The AR pointed out that
vide order dated 21-02- 2011, the Hon'ble Bombay High Court has dismissed the
appeal filed by the department in the case of Patel Stationers (P) Ltd., meaning
thereby that the order of the ITAT has become final.
5. The AR, therefore, submitted that under both circumstances, the appeals filed
by the department need to be dismissed.
6. The DR relied on the order of the AO.
7. We have heard the AR, both on the preliminary objections and the merits and
have also perused the case of Patel Stationers (P) Ltd. We find merit on both the
grounds and we agree with the AR that so far as assessment years 1998-99,
2000-01, 2001-02 and 2003-04 are concerned, the department's appeals fail
under both the circumstances, i.e. maintainability and dismissing of the appeals
by the Hon'ble Bombay High Court u/s 260A filed against the base order of Patel
Stationers (P) Ltd. and so far as assessment years 2006-07 and 2007-08 are
concerned, the appeals fail on account of dismissing of the appeal u/s 260A filed
by the department in the case of Patel Stationers (P) Ltd.
8. In the result, all six appeals filed by the department are dismissed."
5. In this view of the above situation and respectfully following the aforementioned
order of the Tribunal, in which one of us ( Accountant Member) is a party, we find no
infirmity in the order of ld CIT(A). Hence, we uphold the same.
4 ITA No.6862/Mum/2011
Assessment Year: 2005-06
6. In the result, appeal filed by department is dismissed.
Pronounced in the open court on 14th September, 2012
Sd/- Sd/-
(B.RAMAKOTAIAH) (I.P.BANSAL)
Accountant Member Judicial Member
Mumbai, Dated 14th September, 2012
Parida
Copy to:
1. The appellant
2. The respondent
3. Commissioner of Income Tax (Appeals),6, Mumbai
4. Commissioner of Income Tax, 2 , Mumbai
5. Departmental Representative, Bench `F' Mumbai
//TRUE COPY// BY ORDER
ASSTT. REGISTRAR, ITAT, MUMBAI
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