TMI Blog2020 (3) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... owed the claim. Similar view was taken by the ITAT in the case of Samsung India Software Operations P. Ltd. [ 2012 (6) TMI 632 - ITAT, BANGALORE] . Grounds for relief were that deduction is undertaking (unit) specific and the same could not be denied on the ground that undertaking has a new owner. In our considered opinion issue from these case laws are squarely applicable under the facts of the present case also. Decided against the Revenue - I.T.A. No. 64/Mum/2019, I.T.A. No. 65/Mum/2019 - - - Dated:- 2-3-2020 - Shri Shamim Yahya (AM) And Shri C.N. Prasad (JM) For the Assessee : Shri Reepal Tralshawala For the Department : Shri Michel Jerald ORDER PER SHAMIM YAHYA (JM) :- These appeals by the Revenue against common order of learned CIT(A) dated 5.9.2018 pertaining to A.Y. 2013-14 and 2014-15. 2. Common grounds of appeal read as under :- 1. On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in allowing the deduction ₹ 2,08,63,034/- (for A.Y. 2014-15 ₹ 2,55,97,817) u/s. 10AA of the I.T. Act without appreciating the fact that though the deduction is unit; specific, the beneficial owner of the unit was the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to invite his daughter Ms. Reout Kallati to join the business as a partner of M/s. Lorey Jewel. In view of the fact that the assessee firm M/s Lorey Jewel came in existence since 01.04.2012 as per said Deed of Partnership, whereas the approval of SEZ was received prior to that in name of M/s. Lorey Jewel as a proprietary concern of Mr. Albert Kallati, the claim of any deduction by Lorey Jewel as a proprietary concern the claim of any deduction by Lorey Jewel as a partnership firm was considered to be highly questionable. Hence, vide notice u/s. 142(1) dtd. 17.03.2016 the facts were brought to the notice of the assessee, and the assessee was asked to provide the documentary evidence that it was holding a valid letter issued by Development Commissioner to set up a unit in a SEZ as per sec 10AA. The assessee was further show caused as to why Alternate Minimum Tax u/s. 115JC to 115jF should not be levied. The assessee was also asked to submit personal return of income of Mr. Albert Kallati. Further in Form 56F from A CA which also the assessee had failed to provide. In view of the above, the assessee was show caused as to why the deduction claimed u/s. 10AA should not be disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id till 31.03.2015, ii) SEZ authorities vide their letter dated 04.01.2010 gave letter of approval for setting up another unit namely unit no.l86-B in the name of KalJati Jewel, which name was changed to Lorey Jewel - proprietor being Mr. Albert Kallati. The production from this unit commenced w.e.f. 28.09.2011 and the SEZ approval letter is valid till 27.09.2016 for this unit; iii) Thus, both the above units were set up as proprietary concern of Mr. Albert Kallati; iv) Mr. Albert Kallati subsequently formed a Partnership Firm alongwith his daughter - in the name of M/s. Lorey Jewel (the present appellant) vide partnership deed dated 26.06.2012 (effective from 01.04.2012) having the main object to take over the ongoing business of his proprietary concern Lorey Jewel, which was functioning from unit no. 186-B; v) No fresh approval is taken from SEZ authorities in the name of Partnership Firm M/s. Lorey Jewel to carry out production activities from the unit no. 186-B. Since the individual and partnership firms are two separate legal entities and upon formation of partnership firm, the unit 186-B is transferred to partnership firm u/s.2(47) of the Act, the permission and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his daughter Ms. Leout Kallati. The nature of business carried out from the unit remain same i.e. manufacture and export of stuffed gold and diamond jewellery. Therefore in my view, the appellant has rightly claimed the deduction under section 10AA of the Act and merely because there is change in constitution, the same does not debar the appellant from claiming deduction u/s.l0AA of the Act. Having said so, the next question which arises is whether a separate approval is required from SEZ authorities for claiming deduction u/s. l0AA of the Act. There is no such provision in section 10AA of the Act. Further, from the details filed, the appellant has duly intimated to the SEZ authorities about the change in constitution. It appears that the SEZ authorities also recognize the Unit and not the entity since the SEZ authorities grant approval in respect of the Unit for carrying on the business activity. The reasoning appears to be the same since if the SEZ authorities recognize only the entity for giving letter of approval, then the same would be contrary to provisions of section 10AA of the Act and by mere change in constitution, the assessee would start claiming deduction of 100% profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may not be accepted. Here also, I have gone through various correspondences between the AO and the appellant. In the letter filed to the AO dated 02.02.2016, in point no. (vii) the appellant has specifically clarified the mistake occurred in Form 56F and categorically stated that the details of foreign exchange received is submitted. The AO has thereafter issued final notice dated 17.03.2016 after going through the submission made by appellant vide its letter dated 02.02.2016 and once again sought for final submission in respect of certain queries for allowability of deduction u/s. l0AA of the Act and in this final query notice, there is no mention by the AO of non-submission of details of realization of export proceeds and neither stated in the notice that these details are not submitted in spite of giving opportunities. In any case, the AO has been given opportunity for verifying the same which has subsequently been verified and the same have been found to be in order. Hence, the ground taken by the AO in the assessment order for denying the claim of deduction u/s. l0AA of the Act does not survive anymore. 6. Against the above order the Revenue is in appeals before us. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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