Amit Basu , Jaipur vs Department Of Income Tax

Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM

vk;dj vihy la-@ITA No. 727/JP/2012 fu/kZkj.k o"kZ@Assessment Year : 2009-10

D.C.I.T. cuke Amit Basu, Prop- Global Vision Circle-2, Jaipur. Vs. Co., 21/59, Brighu Path, Mansarovar, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABFPB 2314 J vihykFkhZ@Appellant izR;FkhZ@Respondent

jktLo dh vksj ls@ Revenue by : Kailash Mangal (JCIT) fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.)

lquokbZ dh rkjh[k@ Date of Hearing : 16/03/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2015

vkns'k@ ORDER

PER: T.R. MEENA, A.M.

This is an appeal filed by the department against the order dated

06/06/2012 passed by the learned CIT(A)-I, Jaipur for A.Y. 2009-10.

The sole ground of appeal is as under:-

"Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in deleting the addition of Rs. 1,03,87,392/- made by the A.O. despite the facts that the assessee was not engaged in manufacturing activities as required U/s 10BA."

2 ITA 727/JP/2012_ DCIT Vs. Amit Basu

2. The sole ground of appeal is against deleting the addition of Rs.

1,03,87,392/- made by the Assessing Officer despite the fact that the

assessee was not engaged in manufacturing activities required U/s

10BA of the Income Tax Act, 1961 (in short the Act). The assessee filed

return of income on 30/09/2008 declaring total income of Rs.

27,21,220/-, which was revised at Rs. 22,55,320/- on 22/09/2010. In

the revised return set off of unabsorbed depreciation of Rs., 4,75,900/-

was taken, which was not claimed in the original return. This case was

scrutinized U/s 143(3) of the Act. The assessee is engaged in

processing and export of wooden items and other related commodities

in the name and style M/s Global vision Co. It is further observed that

the assessee is claimed deduction U/s 10BA of the Act at Rs.

1,03,87,392/-. The Assessing Officer gave reasonable opportunity of

being heard whether the assessee's activities covered as manufacturer,

which was replied by the assessee vide letter dated 29/11/2010 and

explained the whole process of manufacturing. The Assessing Officer

also recorded the statement of Shri Dharmendra Jangid and Shri Ram

Kishor Jangid, supplier of goods, which has been reproduced by the

Assessing Officer on page 6 to 9, it has been concluded by the

Assessing Officer on the basis of statement and evidence collected by 3 ITA 727/JP/2012_ DCIT Vs. Amit Basu

the Assessing Officer that these persons supplied complete finished

items on which only polishing is done by the assessee. Further, claim of

the assessee that he did carving was baseless as the above statement

makes it clear that the material which was supplied to the assessee did

not have scope of further carving or other activity. The photos

prepared by the supplier were examined, which also showed that the

item was sold to the assessee in finished form only. He further recorded

statement of Shri Mohan Lal Choudhary, Supervisor of the assessee,

which was also supported that the assessee has done only polishing on

the furniture supplied by the supplier. The assessee was just doing the

work of finishing, polishing and packing. Moreover, goods manufactured

by them and sold to the assessee are made through use of Power and

machines. Actually no handmade items were produced. Thus the initial

condition of eligible articles is vitiated. Another condition of eligible

articles is that the article should be of artistic value, for which she relied

on the decision of Hon'ble Supreme Court in the case of Collector of

Central Excise New Delhi Vs. Louis Shoppe where the Hon'ble Supreme

Court has not considered the wooden furniture as handicraft items. The

ld Assessing Officer also correlated the produced items with the sale

items. It is found that the artistic work done by the assessee in 5 to 8 4 ITA 727/JP/2012_ DCIT Vs. Amit Basu

days. These items were exported within 10 to 15 days from its

purchase. The Assessing Officer again gave the show cause notice for

disallowance of deduction claimed U/s 10BA of the Act on 25/11/2011,

which was again replied by the assessee on 29/11/2011, which has

been reproduced by the Assessing Officer on page 15 to 20. The ld.

Assessing Officer after considering the assessee's reply again observed

that the primary condition for eligibility of deduction U/s 10BA of the Act

is that the concern must be involved in manufacturing or production of

eligible articles or things. She again analysed the definition of

manufacturing on page 21 and also considered the Hon'ble Supreme

Court decision in the case of CIT Vs. N.C. Budhiraja & Co. (1993) 204

ITR 412 (SC) and the decision of the Hon'ble jurisdictional High Court in

the case of DD Shah & Bros. 283 ITR 486 (Raj.). He also examined the

difference between processing and manufacturing by considering the

Hon'ble Supreme Court decision in the case of CIT Vs. Sterling Foods

(Goa) 213 ITR 851. Again she further analysed the Hon'ble Supreme

Court decision in the case of DCIT Vs. Plow Food Packers 198 Supply

SCC 174, Union of India Vs. Delhi Cloth 7 General Mills (1977) ELT (J)

199 (SC), CIT Vs. Lucky Mineral Pvt. Ltd. (1997) 226 ITR 245 (Raj.),

Lucky Minmat Pvt. Ltd. Vs. CIT 245 ITR 830 (SC) and Gem India 249 5 ITA 727/JP/2012_ DCIT Vs. Amit Basu

ITR 307 (SC). It is further observed that in assessee's case, the Hon'ble

ITAT Jaipur Bench, Jaipur has allowed the deduction U/s 10BA of the

Act in preceding year but the same has been challenged before the

Hon'ble Rajasthan High Court. Therefore, she disallowed the claim of

the assessee U/s 10BA of the Act at Rs. 1,03,87,292/-.

3. Being aggrieved by the order of the Assessing Officer, the

assessee carried the matter before the learned CIT(A), who had allowed

the appeal by observing as under:-

"4.3 I have carefully perused the order of the A.O. and the submissions of the AR. On perusal of the statements taken by the A.O. at the time of order passed by her, it is seen that similar statements had been recorded in the past of the A.O. and the matter had been agitated before the Hon'ble ITAT on same/similar grounds. It is seen that the facts of the case remain the same during this year and a categorical finding of the Hon'ble ITAT, Jaipur Bench has been given in favour of the assessee on the same facts for admitting the claim of the assessee for exemption U/s 10BA vide their orders ITA No. 198/JP/2008 for A.Y. 2004-05 and ITA No. 166/JP/2009 for A.Y. 2006-07. Pursuant to these findings on the same facts of the Hon'ble ITAT, Jaipur Bench the impugned addition of Rs. 1,03,87,392 on account of disallowance of exemption U/s 10BA is directed to be deleted."

6 ITA 727/JP/2012_ DCIT Vs. Amit Basu

4. Now the Revenue is in appeal before us. The learned D.R.

vehemently supported the order of the Assessing Officer.

5. At the outset, the learned A.R. for the assessee submitted that

the assessee's case is covered by the Hon'ble ITAT decision in

assessee's own case in ITA No. 960/JP/2009 for A.Y. 2006-07 and ITA

NO. 198/JP/2008 for A.Y. 2004-05 and the Hon'ble ITAT has allowed

the deduction U/s 10BA of the Act. The facts and circumstances of the

year under consideration are identical, therefore, the assessee may be

allowed the deduction U/s 10BA of the Act.

6. We have heard the rival contentions of both the parties and

perused the material on record. The assessee is engaged in processing

and export of the wooden items and other related commodities. The

assessee purchased furniture from the supplier thereafter he polishes

through labours. The polish work starts after the furniture with carving

is received by it. The Coordinate Bench in its various orders mentioned

above has held as under:-

"2.3 We have heard both the parties. The ld CIT(A) has directed the A.O. to allow deduction on account of the order of the Tribunal in the case of the assessee for the assessment year 2004-05 and 2006-07. We find no

7 ITA 727/JP/2012_ DCIT Vs. Amit Basu

infirmity in the order of the ld CIT(A) vide which he has followed the order of the Tribunal. Following our findings for the earlier assessment years, we hold that the ld CIT(A) was justified in directing the A.O. to allow deduction u/s 10BA. Thus the first ground of appeal of the Revenue is dismissed."

By respectfully following the Coordinate Bench decision in assessee's

own case, we do not find any infirmity in the order of ld. CIT(A).

Accordingly we upheld the order of the Ld. CIT(A).

7. In the result, the revenue's appeal is dismissed.

Order pronounced in the open court on 10/04/2015.

Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated 10th April, 2015

*Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the Order forwarded to:

1. vihykFkhZ@The Appellant- The DCIT, Circle-2, Jaipur.

2. izR;FkhZ@ The Respondent- Shri Amit Basu, Jaipur.

8 ITA 727/JP/2012_ DCIT Vs. Amit Basu

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr@ vk;dj vk;qDr¼vihy½@The CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 727/JP/2012).

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar