Commissioner Of Income Tax“Aaykar Bhavan”,Patto, Panaji, Goa v. M/S Macbrout Engineering Pvt.ltd.,D2

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEALS NO. 29 and 51 of 2014. TAX APPEAL NO. 29 of 2014 Commissioner of Income Tax“Aaykar Bhavan”,Patto, Panaji, Goa.. Appellant. Versus M/s Macbrout Engineering Pvt.Ltd.,D2-5, Margao Industrial Estate,San Jose De Areal,Salcete – GoaPAN NO. AABCP1043L .. Respondent. AND TAX APPEAL NO. 51 of 2014 Commissioner of Income Tax“Aaykar Bhavan”,Patto, Panaji, Goa..Appellant. VersusM/s Macbrout Engineering Pvt.Ltd.,D2-5, Margao Industrial Estate,San Jose De Areal,Salcete – GoaPAN NO. AADCM6795L .. Respondent. Ms. Asha A. Dessai, Advocate for the appellant in both the appeals. Mr. Pramod Vaidya and Mr. S. G. Bhobe, Advocates for the respondent in both the appeals. CORAM:- RANJIT MORE & U. V. BAKRE, JJ. DATE: 7 th July, 2014 ORAL ORDER: Heard learned Counsel appearing on behalf of the respective parties. 2.following substantial questions of law : following substantial questions of law : The revenue, by these appeals, has raised the (A) Whether on the facts and circumstances of the case, the ITAT Panaji is correct in holding that the assessee is engaged in manufacturing activities ?case, the ITAT Panaji is correct in holding that the assessee is engaged in manufacturing activities ? (B) The ITAT, Panaji has not appreciated the fact that the principle of res judicata is not applicable to Income Tax proceedings as held by the Supreme Court in the case of New Jehangir Vakil Mills Co. Ltd Vs. CIT (SC) 49 ITR 137 and also as held by Bombay High Court in the case of Kotak Mahindra Finance Ltd., Vs. DCIT (Bom) that the principle of res judicata is not applicable to Income Tax proceedings as held by the Supreme Court in the case of New Jehangir Vakil Mills Co. Ltd Vs. CIT (SC) 49 ITR 137 and also as held by Bombay High Court in the case of Kotak Mahindra Finance Ltd., Vs. DCIT (Bom) 265 ITR 114 ? 3.Learned Counsel for the revenue does not dispute that for the assessment years 2004-2005 and 2005-2006, similar activity which the assessee is carrying today, was held to be manufacturing activity and deduction was given under Section 80-IB of the Income Tax Act ('the Act', for short). However, the department refused such deduction for subsequent years, namely 2006-2007, 2007-2008, 2008-2009, 2009-2010. 4.The Tribunal found that the deduction under Section 80-IB was allowed for the earlier year by the revenue in assessee's case. The Tribunal also found that earlier the Assessment Officer had confirmed that the activity undertaken by the assessee qualifies to be a manufacturing activity. The Tribunal accordingly applied the principle of consistency and allowed the deduction under Section 80-IB of the Act. 5.The Division Bench of this Court in “Commissioner of Income Tax Vs. Arts and Crafts Exports”, [2012] 22 taxmann.com 53 (Bom) held that whether the decision of the Tribunal in the case of assessee for earlier year that the assessee was engaged in manufacturing activity and, therefore, entitled to TXA29&51/14 deduction under Section 80-IB, had been accepted by the revenue and no argument was advanced to establish that the said decision of the Tribunal was erroneous, allowability of deduction under Section 80-IB of the Act during relevant previous year could not be assailed by the revenue. The facts of this case and present cases are similar. The ratio of this decision, in our view, is perfectly applicable to the present cases. We find that no substantial question of law involved in these appeals. Accordingly, the appeals stand dismissed. RANJIT MORE, J. SMA U. V. BAKRE, J.