Ita/1017/2017 Of The Pr. Commissioner Of Income Tax v. Shri. V. Anantha Kumar

1/11 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3O DAY OF JULY, 2018 | PRESENT THE HON’BLE Dr.JUSTICE VINEET KOTHARI| AND THE HON’BLE MRS.JUSTICE S SUJATHA ITA No.1017/2017 c/w ITA No.1016/2017,ITA No.1019/2017, ITA No.1018/2017 ITA No.1017/2017 BETWEHRE 1.THR PR. COMMISSIONER OF INCOME-TAX t FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA| BRENGALURU-560 O95. 2THER INCOME TAX OFFICER WARD-1, CHAMARAJANAGAR PRESENT ADDRESS. ASSISTANT COMMISSIONER OF INCOME-TAX. CIRCLE-2(2)(1) ! FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA| BRNGALURU-560 O95. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV) ANT) SHRI.V.ANANTHA KUMARPROP. BILLGIRI GRANITESB.R.HILLS ROADCHAMARAJANAGAR-5/71 441. .. RESPONDENT Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 2/11 THIS TTA IS FILED UNDER SECTION 2Z60-A OF INCOMETAX ACT 1961, ARISING OUT OF ORDER DATED: 20.03.2017.PASSED IN ITA NO.402/BANG/2015, FOR THE ASSESSMENT|YKAR:2006-2007,PRAYINGTO|(1)RFORMULATHTHESUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. | (ii)ALLOW THR APPBAL AND SHT ASIDE THR ORDERS PASSEDBY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN-ITA NO.402/BANG/2015 DATED:20.03.2017 CONFIRMING|THR ORDER OF THR APPBLLATK COMMISSIONBR AND)CONFIRM|THEORDERPASSEDBY|THEASSISTANT|COMMISSIONER.OF|INCOME.TAX,|CIRCLE-2(2)(1),BENGALURU. Gu) TO PASS SUCH OTHER SUITABLEORDERS AS THIS HON’BLE COURT DEEMS FIT TO GRANT IN.THR FACTS AND CIRCUMSTANCES OF THE CASH IN THE!INTEREST OF JUSTICE AND EQUITY. ITA No.1016/2017 BRIWHKEN 1 |THR PR. COMMISSIONER OF INCOME-TAX 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BEHENGALURU-5D60 O9 oD THE ASST. COMMISSIONBR OF INCOME-TAX. CIRCLE-2(2)(1) ! FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA|BRNGALURU-560 O95. ... APPELLANTS |BRNGALURU-560 O95. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV) AND: SHRI.V.ANANTHA KUMARPROP. BILLGIRI GRANITES00/B, 4[‘T]KLOOR.VYSHANAVI APARTMENTS( CROdsS»s, NEAR LINK ROAMALLESWARAMBRENGALURU-560 OO3. _. RESPONDENT Date of Judgment:30.07.2018 ITANo.1017/2017& connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 3/11 THIS TTA IS FILED UNDER SECTION 2Z60-A OF INCOMETAX ACT 1961, ARISING OUT OF ORDER DATED: 20.03.2017.PASSED|IN|ITA|NO.1442/BANG/2015,HORTHEASSESSMENT YEAR: 2007-2008, PRAYING TO (i) FORMULATE|THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. (ii)ALLOW THR APPBAL AND SHT ASIDE THR ORDERS PASSEDBY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN-ITA NO.1442/BANG/2015 DATED: 20.03.2017 CONFIRMING|THR ORDER OF THR APPBLLATK COMMISSIONBR AND)CONFIRM|TH EORDERPASSEDBY|THEASST. COMMISSIONER.OF|INCOME.TAX,|CIRCLE-2(2)(1),BENGALURU. Gu) TO PASS SUCH OTHER SUITABLEORDERS AS THIS HON’BLE COURT DEEMS FIT TO GRANT IN.THR FACTS AND CIRCUMSTANCES OF THE CASH IN THE!INTEREST OF JUSTICE AND EQUITY. ITA No.1019/2017 BRIWHKEN 1 |THR PR. COMMISSIONER OF INCOME-TAX 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BEHENGALURU-5D60 O9 oD THER INCOME TAX OFFICER WARD-1, CHAMARAJANAGAR PRESENT ADDRESS. ASST. COMMISSIONER OF INCOME-TAXCIRCLE-2(2)(1), 2 FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALA|BRNGALURU-560 O95. ... APPELLANTS |CIRCLE-2(2)(1), 2 FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALA|BRNGALURU-560 O95. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV) ANT) SHRI.V.ANANTHA KUMARPROP. BILLGIRI GRANITESB.R.HILLS ROAD)CHAMARAJANAGAR-5/1 441. .. RESPONDENT Date of Judgment:30.07.2018 ITANo.1017/2017& connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 4/11 ITA No.1019/2017 BRIWHKEN 1 |THR PR. COMMISSIONER OF INCOME-TAX 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BEHENGALURU-5D60 O9 oD THER INCOME TAX OFFICER WARD-1, CHAMARAJANAGAR PRESENT ADDRESS. ASST. COMMISSIONER OF INCOME-TAXCIRCLE-2(2)(1), 2 FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALA|BRNGALURU-560 O95. ... APPELLANTS |CIRCLE-2(2)(1), 2 FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALA|BRNGALURU-560 O95. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV) ANT) SHRI.V.ANANTHA KUMARPROP. BILLGIRI GRANITESB.R.HILLS ROAD)CHAMARAJANAGAR-5/1 441. .. RESPONDENT Date of Judgment:30.07.2018 ITANo.1017/2017& connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 4/11 THIS TTA IS FILED UNDER SECTION 2Z60-A OF INCOMETAX ACT 1961, ARISING OUT OF ORDER DATED:20.03.2017—PASSED IN ITA NO.403/BANG/2012 FOR THE ASSESSMENT|YKAR:2009-2010,PRAYINGTO|(1)RFORMULATHTHESUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. | (ii)ALLOW THR APPBAL AND SHT ASIDE THR ORDERS PASSEDBY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURUITA NO.403/BANG/2012 DATED: 20.03.2017 CONFIRMING|THR ORDER OF THR APPBLLATK COMMISSIONBR AND)CONFIRM|TH EORDERPASSEDBY|THEASST. COMMISSIONER.OF|INCOME.TAX,|CIRCLE-2(2)(1),BENGALURU. (i) TO PASS SUCH OTHER SUITABLE ORDERSAS THIS HON’BLE COURT DEEMS FIT TO GRANT IN THE.FACTS AND CIRCUMSTANCES OF THR CASK IN THE!INTEREST OF JUSTICE AND EQUITY. ITA No.1018/2017 BRIWHKEN 1 |THR PR. COMMISSIONER OF INCOME-TAX 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BEHENGALURU-5D60 O9 oD THER INCOME TAX OFFICERWARD-1,WARD-1, CHAMARAJANAGARPRESENT ADDRESS.ASST. COMMISSIONER OF INCOME-TAXCIRCLE-2(2)(1),! FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALABHNGALURU-5D60 O95. ... APPELLANTS |PRESENT ADDRESS.ASST. COMMISSIONER OF INCOME-TAXCIRCLE-2(2)(1),! FLOOR, BMTC BUILDING80 FEET ROAD, KORAMANGALABHNGALURU-5D60 O95. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV) AND: SHRI.V.ANANTHA KUMARPROP. BILLGIRI GRANITES Date of Judgment:30.07.2018 ITANo.1017/2017& connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 5/11 B.R.HILLS ROAD) CHAMARAJANAGAR-5/1 441. .. RESPONDENT THIS [TA IS FILED UNDER SECTION 260-A OF INCOME|TAX ACT 1961, ARISING OUT OF ORDER DATED: 20.03.2017.PASSED IN C.O.NO.87/BANG/2013, FOR THE ASSESSMENT|YEAR:2006-2007, PRAYING TO (1) FORMULATE THE.SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. _ (1i)ALLOW THR APPBAL AND SHT ASIDE THR ORDERS PASSEDBY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN-C.O.NO.87/BANG/2013 DATED: 20.03.2017 CONFIRMING|THR ORDER OF THE APPELLATE COMMISSIONER AND)CONFIRMTHE;ORDERPASSEDBY|THEASSI..COMMISSIONER.OF|INCOMETAX,|CIRCLE-2(2)(1), BENGALURU. (ii) TO PASS SUCH OTHER SUITABLE|ORDERS AS THIS HON’BLE COURT DEEMS FIT TO GRANT IN.THR FACTS AND CIRCUMSTANCES OF THERE CASE IN THINTEREST OF JUSTICE AND EQUITY. THESE ITAs COMING ON FOR ADMISSION THIS DAY,|Dr.VINEET KOTHARI, J.,DELIVERED THE FOLLOWING: JUDGMENT Mr. K.V. Aravind, Adv forAppellant-Revenue These appeals have been filed by the Revenueraising the purported substantial questions of law|under Section 260-A of the Income Tax Act, 1961 (Forshort ‘The Act’) arising from the order of the Income|Tax Appellate Tribunal dated20.03.2017in ITA. Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters ‘The Pr. Commissioner ot Income Tax & Anr. Vs,Shri V Anantha Kumar | 6/11 No.1442/BANG/2015 for Assessment Year 2007-08,| ACIT, Circle-(2)(2)(1), Bangalore. 2. The suggested substantial questions of law in the Memorandum of Appeal are quoted below for|ready reference:| “1. Whether on the facts and in the|circumstances of the case, the Tribunal iscorrect in holding that the actwity of FOUStarted from the assessment year 2000,2001, overlooking the fact that no new unitwas formed by the assessee, as evidentfromthe certificate from Cochin Economic Zone,which shows that only the old unit of BuligiriGranite was converted into KOU? Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters ‘The Pr. Commissioner ot Income Tax & Anr. Vs,Shri V Anantha Kumar | 6/11 No.1442/BANG/2015 for Assessment Year 2007-08,| ACIT, Circle-(2)(2)(1), Bangalore. 2. The suggested substantial questions of law in the Memorandum of Appeal are quoted below for|ready reference:| “1. Whether on the facts and in the|circumstances of the case, the Tribunal iscorrect in holding that the actwity of FOUStarted from the assessment year 2000,2001, overlooking the fact that no new unitwas formed by the assessee, as evidentfromthe certificate from Cochin Economic Zone,which shows that only the old unit of BuligiriGranite was converted into KOU? 2. Whether on the facts and in the|circumstances of the case, the ITAT is correctin holding that assessee is eligible fordeduction under section 1OB of the Actignoring that assessee had not satisfied therequirements of conditionmentionedin|clause 1OB(2)(it) and the fact that most of thenew|machineryWaspurchasedfor Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters ‘The Pr. Commissioner ot Income Tax & Anr. Vs,Shri V Anantha Kumar | 7/11 continuing the activity of the old businesswhich was already in existence whichresults in violation of conditions set out insection 10B of the ACT?”| 3. The relevant findings of the learned Tribunal with|regardCO atoresaldsuggestedsubstantial questions of law are as under: “ASfaraS|the.appealofthe Department for AY 2006-07 is concerned, itis seen that the Ld. CIT(A) has gwen acategorical finding that on the basis ofevidencesavailableOF.recordIt|1S|established that the new unit was registeredon 31.03.1999 and that as per record, the’new unit started its activity of manufacturingand exporting granite monuments etc. fromits new factory building w.e.f. AY 2000-01. —The Ld. CIT(A) has also given a finding thatthe condition that the assessee shouldestablish a new unit has been satisfied andis evidenced by Certificate of Registrationfrom the Directorate of Industries. The Ld.,CIT(A) has also noted that the name of the Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters‘The Pr. Commissioner ot Income Tax & Anr. Vs,Shri V Anantha Kumar | 8/11 new unit had to be changed from M/s SMNatural Stones to M/s Biligirt Granites due toan objection from the Commercial TaxDepartment. The Ld. CIT (A) has not drawnany adverse inference from this similarity ofnames. Further, the Ld. CIT (A), afterexaminingthe.Balance|Sheetsofthe.assessee, has recorded a finding accepting|the assessee’s contention that the activity ofthe HOU started from AY 2000-01 and hasnoted that prima facie the assessee waseligible for deduction u/s 1OB for a period ofIO years starting from AY 2000-01 andsince AY 2006-07fell within the ten year|bracket, the assessee would be eligible|for the deduction u/s 10B in AY 2006-07We are of the opinion that all these findingsby the Ld. CIT (A) are finding offact and theDepartment has also not been able tocontrovert these. Therefore, we find noreason to interfere with the finding of the factby the Ld. CIT (A) that the initial year for thenew unit was AY JVOOO-O 1 5.0.2 The Department's next point ofagitation is the percentage/ratio of old Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | machinery. On this issue, the Ld. CIT (A) hasreferred to the details filed before the AO bythe assessee and has noted that the totalvalue of machinery was’ Rs.35,02,775/-whereqs the Wnmtten Down Value wasRs.4,96,937/- which was less than 20% ofthe total value of machinery and, therefore,this condition also stood satisfied by theassessee. The Department has not beenable to bring out any fact on record to negatethis finding of the Ld. CIT (A) also and weagree to this factual finding by the Ld. FirstAppellate Authority“. 5.0.2 The Department's next point ofagitation is the percentage/ratio of old Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | machinery. On this issue, the Ld. CIT (A) hasreferred to the details filed before the AO bythe assessee and has noted that the totalvalue of machinery was’ Rs.35,02,775/-whereqs the Wnmtten Down Value wasRs.4,96,937/- which was less than 20% ofthe total value of machinery and, therefore,this condition also stood satisfied by theassessee. The Department has not beenable to bring out any fact on record to negatethis finding of the Ld. CIT (A) also and weagree to this factual finding by the Ld. FirstAppellate Authority“. 4 [Learned counsel for the Revenue has also|produced a copy of the order dated28.01.2003issued bytheOfficeoT|theDevelopment,Commissioner, Cochin Special Economic Zone, Sub-Office for 100% EOUs in Karnataka, Ministry ofCommerce.CSIndustry,GovernmentOT India,|Bangalore, to the effect of registration of therespondent/Assessee’s Unit of M/s Biligiri Granites Date of Judgment:30.07.2018 ITANo.1017/2017& connected matters‘The Pr. Commissioner ot Income Tax & Anr.Vs,Shri V Anantha Kumar | 10/11 as 100% EOU tor manutacture and export of GraniteMonuments, Granite Slabs and Dimensional GraniteBlocks. Such registration has been granted to thesaid respondent/Assessee’s unit vide order dated28.01.2003, which is taken on_ record. TheProvisions of Section 10B of the Act gives the benefitof deduction for a _ period of ten consecutivassessment years and therefore, Assessment Year2006-07 to Assessment Year 2009-10 involved in thepresent 4 appeals, is the period covered within thesaid period of 10 years under Section 10B of the Act. Oo. since the findings of fact given by the|learned Tribunal are categoric and clear that theAssessee’s unit was a newly established 100% EOU>duly registered w.e.f. 28.01.2003 as indicated above,therefore, the learned Tribunal has rightly allowed Date of Judgment:30.07.2018 ITANo.1017/2017 & connected matters ‘The Pr. Commissioner ot Income Tax & Anr. Vs,Shri V Anantha Kumar | 11/11 thesaid|benefit.1nfavouroT the|respondent/Assessee. 6. We do not find these findings of the learned|Tribunal to be wrong or perverse in any manner andtherefore, in our considered opinion, no substantialquestion of law arises in the present appeals filed bythe Revenue which calls tor further consideration. accordingly dismissed. No costs. | v7. The appeals filed by the Revenue are| respondent/Assessee. 8. A copy of the order be sent to the| Sd/-.JUDGE| Sd/-.JUDGE|