Itxa/837/2011 Of The Commissioner Of Income Tax -24 Mumbai v. Cello Stationery Products

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.837 OF 2011 The Commissioner of Income Tax-24...Appellant-Versus-Cello Stationery Products...Respondent ........... Mr.Arvind Pinto, for the Appellant.Mr.S.E. Dastur, Senior Advocate a/w Mr.Nitesh Joshi i/by Mr.A.K. Jasani, for the Respondent. ........... CORAM: S.C. DHARMADHIKARIAND GIRISH S. KULKARNI, JJ. DATE :- 08[th] April, 2014 P.C.: 1This Appeal challenges the order passed by the Income Tax Appellate Tribunal on 30.03.2010. 2Mr.Pinto submits that the questions as framed on page 3 at paragraph 4 of the paper book are substantial questions of law. The ITAT has not been able to appreciate the ambit and scope of Section 80-IB of the Income Tax Act, 1961. That Section enables the Assessee to claim deduction in respect of profits and gains from certain industrial undertakings other than infrastructural development undertakings. It is submitted that the ITAT failed to appreciate that the Assessee has set up the marketing and sales unit at Mumbai. The manufacturing unit is at Daman. This is an arrangement devised only to claim benefit under Section 80-IB. The Assessing Officer, therefore, was right in his conclusions and such conclusions in the given facts and circumstances *2*itxa.838.837.11.4.con should not have been interfered with leave alone reversed by the Commissioner of Income Tax (Appeals) and the ITAT.3We have perused the order passed by the Commissioner of Income Tax (Appeals) and that of the ITAT in the Revenue's Appeal. The Revenue is not satisfied with the conclusions concurrently reached by both, the CIT (Appeals) and the ITAT. The concurrent finding is that the Assessee is entitled to the deduction under Section 80-IB in respect of the entire profits. The view taken in the case of very Assessee for the Assessment Year 2005-2006 by the Commissioner of Income Tax (Appeals) was upheld by the ITAT in Appeal No.IT/5866/2000 dated 23.02.2010. The facts were identical to the following Assessment Year. In considering the ground and particularly the claim of Revenue that the common marketing concern, M/s Cello Sales & Marketing, was floated with a view to claim higher deduction under Section 80-IB, the Commissioner of Income Tax (Appeals) in paragraphs 6.2 and 6.3 of his order dated 11.07.2008 which was under appeal before the Income Tax Appellate Tribunal, held that the existing financial results of the Assessee and other manufacturing concerns with their financial results need to be compared with the situation of absence of marketing or sales concern. He held that had there been no separate marketing concern, the goods could have been sold directly by the manufacturing units to the stockists at the price at which the marketing concern actually sold the goods to them. The manufacturing concerns would have incurred all expenses which the marketing concern actually incurred. As a result the profit of the manufacturing concern would have been higher by the amount of profit actually earned by the marketing concern. The manufacturing concern would have claimed deduction under Section 80-IB on such higher amounts of profit and the Revenue could not have resisted it. In the case of Assessee and as one illustration, it was found that the manufacturing concern was set up in the year 2000 and the sales and marketing concern in relation thereto came into the scene in the year 2001. The Commissioner of Income Tax (Appeals), therefore, found that in the given facts and circumstances the Revenue's assertion that the marketing concern was floated with a view to claim higher deduction under Section 80-IB, is baseless. The apprehension has no foundation. Such factual findings reached and confirmed by the Income Tax Appellate Tribunal do not raise any substantial question of law much less in the form projected before us. The Appeal is, therefore, devoid of any merit and is dismissed. No costs. (GIRISH S. KULKARNI, J.) (S.C. DHARMADHIKARI, J.) *4* IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.838 OF 2011 The Commissioner of Income Tax-24.-Versus-Cello Stationery Products. ..Appellant ..Respondent ........... Mr.Arvind Pinto, for the Appellant.Mr.S.E. Dastur, Senior Advocate a/w Mr.Nitesh Joshi i/by Mr.A.K. Jasani, for the Respondent. ........... CORAM: S.C. DHARMADHIKARI AND GIRISH S. KULKARNI, JJ. DATE :- 08[th] April, 2014 P.C.: 1It is stated that the issue raised in this Appeal is common to that raised in the Income Tax Appeal No.837/2011 which has been dismissed today. The Assessment Year in the present Appeal is 2005-2006, whereas in Appeal No.837/2011 it is 2006-2007. 2For the reasons recorded in the order passed today in Income Tax Appeal No.837/2011, this Appeal is also dismissed. No costs. (GIRISH S. KULKARNI, J.) (S.C. DHARMADHIKARI, J.)