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2016 (5) TMI 460 - ITAT MUMBAI

2016 (5) TMI 460 - ITAT MUMBAI - TMI - Allowability of deduction / exemption u/s 10A - Held that:- In the matters relating to the claim of deduction / exemptions, it is the requirement of that the initial year should be the year of scrutiny of the claims relating to the set-off of the new unit or splitting up of the existing units and other conditions specified in the said section 10A or similar provisions. AO is prevented from getting into these years in subsequent years such as AY 2006-07 and .....

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s - Decided against revenue - I.T.A. No.41/M/2012, I.T.A. No.2861/M/2012, I.T.A. No.5448/M/2009, I.T.A. No.5341/M/2010, I.T.A. No.726/M/2012, I.T.A. No.4087/M/2012, I.T.A. No.5995/M/2013 - Dated:- 30-3-2016 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri P.J. Pardiwala, AR For The Revenue : Shri K.P. R.R. Murty, DR ORDER PER D. KARUNAKARA RAO, AM: There are seven appeals under consideration. Out of them, five appeals are filed by the Reve .....

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of the Revenue for the AY 2007-2008, which read as under:- 1. On the facts and in the circumstances of the case and in law, Ld CIT (A) erred in allowing exemption u/s 10A amounting to ₹ 3,04,28,384/- without appreciating the fact that the assessee had not manufactured / produced any article but merely had processed the articles. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in allowing exemption u/s 10A without appreciating the fact that assessee is .....

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ounsel for the assessee submitted that in the AY 2005-06, the said claim of the assessee u/s 10A was accepted by the Revenue. Bringing our attention to para 1.3 of the impugned order, Ld Counsel for the assessee submitted that the new unit named Teledyne‟ was established in the AY 2005-06 and the AO disallowed the claim of exemption u/s 10A of the Act from the AY 2006-07 onwards. It was also demonstrated before us that the claim of the assessee was allowed in AY 2005-06 and the said assess .....

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thers (supra), we have perused the ratio laid down in the said judgment and find the following are lines are relevant to make this order selfcontained and the same reads as under:- Held:-...........(iii) unless deductions allowed for the assessment year...............were withdrawn, they could not be denied for subsequent years.......... 5. From the above, it is settled legal proposition in law that in the matters relating to the claim of deduction / exemptions, it is the requirement of that the .....

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ng the said judgment of the High Court (supra), without going to the merits of the case, we find the argument of the Ld Counsel should be considered and the relevant grounds should be allowed in favour of the assessee. Accordingly, we uphold the order of the CIT (A) and the grounds raised by the Revenue for the AYs 2006-07 and 2007-08 are dismissed. 6. In the result, appeals of the Revenue for the AYs 2006-07 and 2007- 08 are dismissed. ITA No.726/M/2012 (AY 2008-2009) (By Revenue) ITA No.41/M/2 .....

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he legal issue relying on the judgment of the Hon‟ble High Court in the case of Paul Brothers (supra). Following the same for the sake of consistency and also considering the common facts, we dismiss the grounds raised by the Revenue. Accordingly, grounds raised by the Revenue are dismissed. 8. In the assessee‟s appeal, the following grounds are raised and the same read as under:- 1. (i) the Ld CIT (A) erred in confirming the order of Assessing Officer wherein the profit of the 10A u .....

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me Tax Act, 1961. (ii) He failed to appreciate that section 115JB (6) of the Act is applicable to a unit situated in SEZ and since the appellant was covered by the second proviso of section 10AA of the Act, MAT provisions were inapplicable to the appellant. 3. The Ld CIT (A) grossly erred in confirming the addition of ₹ 25,61,355/- on account of provision for diminution in value of investments u/s 115JB(1) explanation 1(i) of the Act even when the said provision was not on the statute on 1 .....

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any asset . Considering the same, after hearing both the parties, the said Ground no.3 is dismissed. 10. Ground no.1 relates to the allocation of common head expenses between the eligible and non-eligible units based on the turnover as against the actual basis adopted by the assessee. Relevant facts include that the assessee has an eligible Teledyne‟ unit and ineligible non-teledyne‟ unit. So far as the unit specific expenses are concerned, there is no dispute. However, regarding th .....

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11.1 laks (rounded of). The argument of the Ld Counsel for the assessee on this issue revolves around on the fact that the identical claims were made in earlier AYs and the subsequent AYs and they were accepted without any mutation in the assessments. AO has not given any reason to why the basis adopted by the assessee is erroneous and unsustainable in law. Basing on the principles of consistency, the claim of the assessee should have been accepted by the AO. Bringing our attention to the order .....

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a speaking order on this issue. In any case, CIT (A) is directed to examine the Ld Counsel‟s submissions relating to the principles of consistency‟ and other arguments, if any, while passing a speaking order. Accordingly, Ground no.1 is allowed for statistical purposes. 12. Ground no.2 relates to the effect of sub-section (6) of section 115JB of the Act qua the amendments brought in to clause (f) to Explanation-1 of section 115JB and clause (ii) to the said Explanation. Finance Act, .....

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Corpn. Ltd vs. ACIT (2013) 55 SOT 10, dated 1.12.2012, which is relevant for the following proposition:- A unit in a SEZ will be covered by sub-section (6) to section 115JB of the Act irrespective of the fact that those units were claiming deduction u/s 10A of the Act. He also relied on another decision of the coordinate Bench decision in the case of G. Jewelcraft Ltd vs. ITO [2015] 56 taxmann.com 192 (Mumbai-Trib.), which is relevant for the following proposition:- Income of units located in Sp .....

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(AY 2009-2010) (By assessee) 15. These two cross appeals are filed by the Revenue and the assessee for the AY 2009-2010. The issues raised in the Revenue‟s appeal are already adjudicated by us while deciding the appeals for the AYs 2006-07; 2007-08 and 2008-2009 in the above paragraphs of this order, considering the analogy of the ratio laid down in the judgment of the Hon‟ble High Court in the case of Paul Brothers (supra). Therefore, considering the commonality of the issues raise .....

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