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IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
BEFORE S/SHRI A.D.JAIN (JM) AND RAJENDRA (AM)
.. , ,
./I.T.A. No.5698/Mum/2013
( / Assessment Year :2009-10)
Dy. Commisioner of Income / M/s Enem Nostrum Remedies
Tax-8(1), Vs. Pvt.Ltd,
Room No.260A, 2nd floor,, Unit No.201-204,
Aayakar Bhavan, M K Road, Gayatri Commercial Complex,
Mubmai-400020 Andheri Kurla Road,
Behind Mittal Industrial Estate,
Andheir (E),
Mumbai-400059
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. :AAACE8766G
/ Appellant by Shri S S Rana
/Rspondent by Ms.Kavita Mehandale
/ Date of Hearing : 29. 7.2015
/Date of Pronouncement : 7. 8.2015
/ O R D E R
PER A D JAIN (JM)
This is department's appeal for assessment year 2009-10 against the
order of ld.CIT(A) in directing the AO to allow deduction to the assessee u/s 80IB
(8A) of the Act on the basis of directions given by the ITAT in the order passed
for the assessment years 2004-05 to 2006-07.
2. The operative portion of the ld.CIT(A)'s order is as follows:
"2.3 The AO's order, the contentions of the appellant, and
2 I T A N o . 5 6 9 8 / Mu m / 2 0 1 3
materials on record have been considered. Identical issue had
come up in appeal in earlier years. In appeal order dated
20/02/2012 in Appeal No. CIT(A)-16/DC-8(1)/IT-153/2011-12 for
AY 2008-09, the CIT(A) held "l have carefully consider the contention
of the appellant and also carefully gone through the documents available
on record. I find that the claim of the appellant u/s.80IB(8A) was allowed
by the Hon'ble Tribunal in the A. Y. 2004-05 to 2006-07 in the appellant's
own case. Following the decision of the Hon'ble ITAT, the Ld.AO is
directed to allow the claim of the appellant u/s. 80IB (8A)". Following
the same finding, the AO is directed to allow the claim of the
appellant u/ s 80IB(8A) in AY 2009-10".
3. From the above, it is evident that the ld. CIT(A) has followed the First
Appellate Order for the AY 2008-09, wherein, the Tribunal order in the assessee's
own case for assessment years 2004-05 to 2006-07 was followed. It was in this
manner that the ld. CIT(A) directed the AO that the claim of under section
80IB(8A) of the assessee to be allowed, for the year under consideration.
4. On the other hand, the ld. Counsel for the assessee has placed reliance on
the Tribunal orders passed in ITA No.4277/Mum/2011, dated 30.3.2012, in the
assessee's own case for the assessment year 2007-08, in ITA
No.4076/Mum/2009 for the assessment year 2006-07 in ITA, dated 30.4.2010, in
ITA No.2036/Mum/2008 for the assessment year 2005-06, dated 28.8.2008, and
in ITA No. in ITA No.1180/Mum/2008, for the assessment year 2004-05, dated
28.8.2008.
5. Before us, the ld. DR has contended that the Tribunal's orders in the
assessee's own case for the assessment years 2004-05 to 2006-07, and passed
in ITA No.4277/Mum/2011, dated 30.3.2012 which were relied on by the ld
CIT(A) to allow the relief to the assessee, have been accepted by the
department.
3 I T A N o . 5 6 9 8 / Mu m / 2 0 1 3
6. Having considered the rival contentions, in the light of the material placed
on record, we find the matter to be covered in favour of the assessee by the
aforesaid Tribunal orders in the assessee's own case for the assessment years
2004-05 to 2007-08. In the order dated 20.8.2008, for the assessment year
2004-05, the Tribunal has held as under :
"16. We have heard the rival submissions and perused the relevant
material on record. Admittedly there is no cross appeal by the Revenue.
So we need to examine only those aspects which 'weighed with the ld.
CIT(A) for the denial or deduction. Sub section (8A) of section 8080IB,
which is relevant for our purpose, reads as under :-
"The amount of deduction in the case of any company carrying on
scientific research and development shall be hundred per cent of
the profits and gains of such business for a period of ten
consecutive assessment years, beginning from the initial
assessment year, if such company -
(i) is registered in India;
ii) has its main object the scientific and industrial research and
development;
(ii) is for the time being approved by the prescribed. authority
at any time after the 31st day of March, 2000 but before the
1st day of April, 2007;
(iii) fulfills such other conditions as may be prescribed ."
17. There remains no dispute on behalf of the Revenue qua the
fulfillment of the above four conditions. The ld. CIT(A) has denied the
benefit of deduction on the ground that the assessee has not satisfied the
requirement of section 80IB(2)(iii) as it has not manufactured or produced
any article not specified in the list given in the Eleventh Schedule. In the
opinion of the ld. CIT(A), the assessee, ought to have met this
requirement of manufacturing or producing any article, and since nothing
was produced or manufactured by the assessee, he therefore, held that
the deduction cannot be granted:
18. Sub-section (1) of section80IB provides that where the gross total
income of an assessee includes any' profits' and gains derived from any
business referred to in sub-sections (3) to (11), (11A), and (11 B), there
shall be allowed a deduction from such profits and gains of an amount
equal to such percentage and for such number of' assessment years as is
specified in this section subject to and in accordance with the provisions
4 I T A N o . 5 6 9 8 / Mu m / 2 0 1 3
of this section, Sub-section (2) deals with industrial undertakings which
are eligible for deduction and need to fulfill the conditions enshrined in
clauses (i) to (iv) of this sub-section. In other words, if the eligible
assessee is an industrial undertaking then it is incumbent upon-it to satisfy
all the 4 conditions cumulatively as specified in sub-section (2). On going
further we note that sub-section (3) provides deduction in the case of
case of industrial undertaking if it is a small scale industrial undertaking
and begins to manufacture articles or things during the period specified.
Similarly sub-section (4) again applies toan industrial undertaking which is
established in industrially backward state specified in the Eighth Schedule
Sub-section (5) also applies to industrial undertaking located in such
industrial backward districts as Central government may specify. Thus it
can be seen that sub-sections (3) to (5) permit deduction to industrial
undertakings fulfilling the requisite conditions and sub-section (2) opens
with the words: "This section applies to any industrial undertaking which
fulfills all the following conditions namely...." Going further we observe
that 'sub-sections '(6) to (8A) grant deduction to the assessee who are
not covered within the meaning of 'industrial undertakings', but are
engaged in other specified businesses. As can be seen that sub-section
(6) applies to an assessee who is engaged in the business of shipping.
Similarly sub-section (7) provides deduction to Hotels ; sub-section. (7A)
to Multiplex theatres ; sub- section (7B) to Convention centres and sub-
section (8A) to companies carrying on scientific research and
development. It is under this last sub-section that the assessee has been
granted approval by the Government of India. On going through the
scheme of section 80IB in totality, we· observe that the four conditions
stipulated under sub-section (2) are to be fulfilled only if the eligible
assessee is an industrial undertaking within the meaning of sub-
sections (3) to (5), as the case may be. If the assessee is not an
'industrial undertaking' but is otherwise eligible for deduction under any of
other sub-sections discussed above; then there is no requirement for
importing the conditions stipulated in sub-section '(2) which are applicable
to industrial undertakings, and requiring their satisfaction. Since the
instant assessee is engaged in the business of carrying out scientific
research and development and has been approved by the Government of
India for the benefit- of deduction u/s 80IB(8A) in our considered opinion
the conditions of sub- section (2) are not required to be fulfilled by it. The
ld.CIT(A) has interpreted section 80IB in an inconsistent manner so ,as to
cast such obligations on the assessee which have not been imposed by
the statute. We ,therefore, overturn the impugned order on this issue and
direct the Assessing Officer to allow deduction.
19. In the result, this appeal is partly allowed."
5 I T A N o . 5 6 9 8 / Mu m / 2 0 1 3
7. It is this reasoning, which has been followed in the succeeding years by
the Tribunal. This reasoning of the Tribunal has not been shown to have been
either reversed, or even stayed on appeal. Therefore, respectfully following the
abovesaid Tribunal orders in the assessee's own case for the earlier years, the
order passed by the ld. CIT(A) for the year under consideration is upheld. The
grievance of the department by way of the grounds of appeal raised is found to
be shorn of merit. It rejected as such.
8. In the result, the appeal of the department is dismissed.
Pronounced accordingly on 7th Aug, 2015.
7th Aug, 2015
Sd sd
( / RAJENDRA) (.. / A.D. JAIN)
/ ACCOUNTANT MEMBER / JUDICIAL MEMBER
Mumbai: 7th
Aug,2015.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
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