Ita/823/2009 Of The Commissioner Of Income Tax v. T.c.usha, Chethana Cashew Corporation

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 26TH DAY OF OCTOBER 2018 / 4TH KARTHIKA, 1940 ITA. No.715 of 2009 AGAINST THE ORDER IN ITA NO.468/2002 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 05-04-2005 APPELLANT/RESPONDENT: THE COMMISSIONER OF INCOME TAX,THIRUVANANTHAPURAM. BY ADVS.SRI.P.K.R.MENON, SENIOR COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX RESPONDENT/RESPONDENT: T.C.USHA, CHAITANYA CASHEW CORPORATIONKOLLAM. BY ADVS.SMT.PREETHA S.NAIRSRI.E.K.NANDAKUMAR (SR.)SRI.K.JOHN MATHAISRI.P.BENNY THOMASSRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON26.10.2018, ALONG WITH ITA.823/2009, THE COURT ON THE SAMEDAY DELIVERED THE FOLLOWING: ITA. Nos.715 & 823 of 2009 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 26TH DAY OF OCTOBER 2018 / 4TH KARTHIKA, 1940 ITA. No.823 of 2009 AGAINST THE ORDER IN ITA NO.468/2002 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 05-04-2005 APPELLANT/RESPONDENT: THE COMMISSIONER OF INCOME TAX,THIRUVANANTHAPURAM. BY ADVS.SRI.P.K.R.MENON, SENIOR COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX RESPONDENT/RESPONDENT: T.C.USHA, CHAITANYA CASHEW CORPORATION, KOLLAM. BY ADVS.SMT.PREETHA S.NAIRSRI.E.K.NANDAKUMAR (SR.)SRI.K.JOHN MATHAISRI.P.BENNY THOMASSRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON26.10.2018, ALONG WITH ITA.715/2009, THE COURT ON THE SAMEDAY DELIVERED THE FOLLOWING: ITA. Nos.715 & 823 of 2009 JUDGMENT K. Vinod Chandran, J. The assessment years we are concerned with inthe appeals are 1997-1998 and 1998-1999. The claimis under Section 80IA of the Income Tax Act, 1961[for brevity, the Act] as it existed prior to 2000.The First Appellate Authority confirmed the dis-allowance under Section 80IA of the Act withrespect to the unit established in Andhra Pradesh.The reasons for the same are seen in the orderunder paragraph 6 numbered as (i) to (iii). It isan admitted fact that the unit had commencedmanufacture after 01.04.1993. The First AppellateAuthority found that with respect to an industrialundertaking located in an industrially backwardState, deduction can be claimed only if it beginsto manufacture or produce articles at any time ITA. Nos.715 & 823 of 2009 during the period between 01.04.1993 and31.03.1998. In the case of the respondent, the unitwas in Andhra Pradesh, which was not one of theindustrially backward States as specified in the 8[th]schedule. It was also found that under sub-Section(2) of Section 80IA of the Act, a deduction undersub-section (1) from profits and gains derived froman industrial undertaking shall not be admissible,unless the accounts of the industrial undertakingfor the previous year relevant to the assessmentyear have been audited by an Accountant as definedunder Explanation to Section 80IA(2) of the Act, asit existed prior to 2000. The assessee also has tofurnish along with the return of income the reportof such audit in the prescribed form duly signedand verified. The assessee's accounts though wereaudited under Section 45AB, there is no separateaccounts maintained for the industrial undertakingfor which the allowance was claimed. Thirdly, it was found that the profit as computed by theappellant does not take into account administrativeand other expenses. The assessee was then directedto approach the Assessing Officer, who was directedto consider the claim if the reasons indicatedunder (i) and (ii) above were not applicable in theassessee's case. was found that the profit as computed by theappellant does not take into account administrativeand other expenses. The assessee was then directedto approach the Assessing Officer, who was directedto consider the claim if the reasons indicatedunder (i) and (ii) above were not applicable in theassessee's case. 2. The Tribunal set aside the order of theFirst Appellate Authority relying on an order inanother case. The learned Senior Counsel,Government of India [Taxes] would contend that thesaid order of the Tribunal, which was confirmed bythis Court, was with respect to the processingcarried out by an assessee in a unit, which did notbelong to the assessee, but was leased out by theassessee. There was no identity of facts or law inthe instant case, with the relied on decision, isthe contention taken. We agree with the saidsubmission of the learned Senior Counsel appearing ITA. Nos.715 & 823 of 2009 for the Revenue. In such circumstances, the orderof the Tribunal has to be set aside. 3. In the context we notice Section 80IA as wasavailable in the Income Tax Act at that point oftime. Various types of industries were referred totherein, under the various clauses, thecommencement of which were specified betweendifferent periods. There is no consideration by theFirst Appellate Authority or the Tribunal as tounder which category the appellant's industry wouldfall. If, as the First Appellate Authority found,the claim is only on the basis of an industrialundertaking existing in a industrially backwardState, then on the finding of the First AppellateAuthority, there is no question of a remand. Wenotice that the issue has not been considered withreference to the facts and the law as seen fromSection 80IA of the Act, as it existed during therelevant assessment years. ITA. Nos.715 & 823 of 2009 4. In such circumstances, we set aside the order of the Tribunal and remand the issue to theTribunal to consider the claim under Section 80IAof the Act with reference to the categorisation ofthe appellant's industry; as is discernible fromthe various clauses. 5. The appeals are allowed without anyobservation on the merits of the issue and withoutanswering the questions of law, since a morethorough and comprehensive determination on factsis necessary. No order as to costs. Sd/- K. VINOD CHANDRAN, JUDGE Sd/- 27/10/18 ASHOK MENON, JUDGE //True Copy// P.A. To Judge ITA. Nos.715 & 823 of 2009 APPENDIX OF ITA NO.715/2009 PETITIONER'S EXHIBITS: ANNEXUREATRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 12.08.2002. ANNEXURE BTRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX DATED 23.09.2002. ANNEXURE C TRUE COPY OF THE ORDER OF THE APPELLATE TRIBUNAL DATED 05.04.2005. RESPONDENT'S EXHIBITS:- NIL APPENDIX OF ITA NO.823/2009 PETITIONER'S EXHIBITS: ANNEXUREATRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 21.03.2001. ANNEXURE BTRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX DATED 23.09.2002. ANNEXURE C TRUE COPY OF THE ORDER OF THE APPELLATE TRIBUNAL DATED 05.04.2005. RESPONDENT'S EXHIBITS:- NIL //TRUE COPY// P.A. TO JUDGE