The Commissioner Of Income Tax-Ii v. M/S. Sanas Medicals

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1113 OF 2012 The Commissioner of Income Tax-II. v. M/s. Sanas Medicals. ..Appellant. ..Respondent. Mr. Vimal Gupta, Sr. Advocate with Ms. Padma Divakar for the Appellant.None for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 15TH JANUARY, 2013 PC: In this appeal by the revenue for the assessment year 2007-08 following question of law has been proposed for consideration by this court. Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal did not err in allowing assessee's claim of deduction u/s. 80IC by merely relying on its own decision in the case of M/s. Nasan Medicals, ITA Nos. 116, 67-72/PNJ/07 for A.Ys. 1998-09 to 2004-05 against which the department had not filed any appeal before the High court as the issue of deduction u/s. 80IA was decided in favour of revenue? The respondent assess is engaged in the business of manufacturing and trading in computer hardware and software which is normally used in medical profession. During the assessment year 2007-08 the assessee has claimed deduction u/s.80 IC of the Income Tax Act, 1961 on the ground that it was engaged in manufacture of Medical diagnostic Machines which are sold to medical professionals. In support of its contention the respondent assessee relied upon the decision of the Tribunal in the matter of M/s. Nasan Medicals in ITA No.116,67-72/PN/07 dated 22.10.2009 who are engaged in identical activity. 3)The Assessing officer in the assessment order dated 30/12/2003 did not accept the respondent-assessee's claim for deduction under section 80IC on the ground that the decision of the Tribunal in the matter of Nasan Medicals was not accepted by the Tribunal and an appeal to the High Court is under consideration. 4)In first appeal, the Commissioner of Income Tax (Appeals) by order dated 30/8/2010 allowed the appeal of the respondent assesssee for deduction u/s.80IC of the Act by following the order of the Tribunal in the matter of Nasan Medicals (ITA No.116,67-72/PN/07 rendered on 22/10/2009 under Section 80IA of the Act. 5) Being aggrieved the revenue carried the matter in appeal to the Tribunal. By order dated 29/2/2010 the Tribunal upheld the finding of the Commissioner of Income Tax(Appeals). It is noticed that in the order of the Commissioner of Income Tax(Appeals) an extract of the decision of the Tribunal in the matter of Nasan Medicals is reproduced at Para 3.4 of its order and after describing the process “...........On considering the items and the finished produced the assessee generates, in our opinion, the business of the assessee must be considered as manufacturing. The assessee also demonstrated that the finished products are sold to different set of customers i.e. doctors and hospitals and the said finished products are separately excisable to Excise duty at the rate of 3%. Thus, the orders of the revenue are to be set aside on the issue and allow the grounds of the assessee”. 6)Though the revenue has not filed appeal against the order of the Tribunal in the matter of Nasan Medicals, the finding therein which would be equally applicable to the respondent's case, as well by the Commissioner of Income Tax (Appeals) and the Tribunal. Thus, we see no reason to entertain the appeal. 7)Accordingly, the appeal is dismissed with no order as to costs. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)