Karnataka High Court
The Pr. Commissioner Of Income Tax vs M/S Trident Minerals (100% Eou) on 22 July, 2019
Author: Aravind Kumar
Bench: Aravind Kumar
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 22 N D DAY OF JULY, 2019
PRESENT
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
AND
THE HON'BLE MR.JUSTICE BELLUNKE A.S.
ITA No.100032 of 2017
BETWEEN
1. THE PR. COMMISSIONER OF INCOME TAX,
SEDAM ROAD, GULBARGA.
2. THE ASST. COMMISSIONER OF INCOME TAX,
CIRCLE-I, BALLARI.
... APPELLANTS
(BY SRI.Y.V. RAVIRAJ, ADVOCATE)
AND
M/S TRIDENT MINERALS (100% EOU)
NO.811/2, NH-63, HOSAPETE ROAD,
BALLARI. AAFFT0920R.
... RESPONDENT
(BY SRI.H.R.KAMBIYAVAR, ADVOCATE)
THIS ITA IS FILED UNDER SECTION 260A OF THE
INCOME-TAX ACT, 1961, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE AND TO
ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY
THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU BENCH-A,
BENGALURU, DATED 21.04.2017 IN 22 (Bang) 2016 FOR THE
ASSESSMENT YEAR 2010-11 AND CONFIRM THE ORDER PASSED
BY THE ASSISTANT COMMISSIONER OF INCOME TAX OFFICER,
CIRCLE-1, BALLARI.
:2:
THIS APPEAL COMING ON FOR FINAL HEARING,
THIS DAY, ARAVIND KUMAR J., DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal has been admitted on 30.10.2017 for considering the following substantial question of law:
"Whether on the facts and in circumstances of the case, the Tribunal is right in law in dismissing the revenue's appeal on the issue of disallowance of deduction U/sec.10B of the Act without appreciating the fact that the assessee had not fulfilled the conditions as specified in Section 10B(ii) and (iii) of the Act?"
2. Learned counsel appearing for the parties would fairly submit that issue relating to the appeal in question has been adjudicated in respect of the very same issue in ITA No.100029/2014, disposed of on 10.10.2018 for the assessment year 2009-10. A copy of said order has been made available to us. In fact, registry has put up the records of ITA No.100029/2014, which has also been perused by us. In ITA No.100029/2014, which came to be disposed of on 10.10.2018 by the co-ordinate Bench of this Court would disclose that issue involved in the present :3: appeal as well as the issue involved in the appeal disposed of by the co-ordinate Bench is one and the same. However, at paragraph No.15, the co-ordinate Bench had observed that "appellant has not made out any substantial questions of law as raised in para 5 of the appeal memorandum". This observation seems to have been made on account of question of law having been already framed not brought to the notice of the Bench.
3. Be that as it may. Order dated 10.10.2018 would disclose that appeal has been heard on merits and dismissed. The issue relates to the disallowance of deductions claimed by the assessee under Section 10(B) of the income Tax Act, (for short "I.T. Act") which was on the ground that assessee had not fulfilled the conditions as specified in Sections 10(B)((ii) and (iii) of the Act. In the instant case, respondent-assessee is in the business of trade of iron ore and it is 100% EOU. For the assessment year 2010-11, assessment came to be completed by the Assessing Officer by disallowing the claim of the assessee under Section 10(B) of the Act as was done in the earlier :4: assessment year 2009-10. However, the CIT (Appeals) deciding the issue in favour of the assessee by following the decision of the Tribunal on the issue of earlier assessment year by referring to order of the tribunal dated 07.02.2014, passed in ITA No.1050/BANG/2012 has allowed the appeal of assessee. In fact it is this order of the tribunal, which was challenged by the revenue in ITA No.100029/2014 and co-ordinate Bench as observed herein above on 10.10.2018, dismissing the appeal by confirming the order passed by the tribunal. The finding so recorded by the co- ordinate Bench, reads as follows:
9. On appeal filed by the Revenue, the Income Tax Appellate Tribunal recorded a finding that the unit of the assessee firm is a 100% EOU unit entitled for deduction under Section 10B of the Act.
It is also seen that the assessing officer has not disputed the EOU status of the unit of M/s. KMMI Exports also. The issue for consideration is after the merger of the firm M/s. KMMI Exports with the assessee firm, whether the assessee firm is entitled for deduction under Section 10B of the Act. Earlier, there was sub section 9 to Section 10B of the Act, which specifically provided that the deduction cannot be allowed, if there was a transfer of ownership or :5: beneficial interest in the undertaking. The sub Section 9A of Section 10B of the Act was introduced can be allowed, if a firm is succeeded by a company. This sub Section was also omitted with effect from 01.04.2004. In this view of the matter, the inevitable and appropriate conclusion is that the limitations specified in sub-sections 9 and 9A of Section 10B of the Act do not exist from 1.4.2004 and therefore, the conclusion of the assessing officer that deduction under section 10B of the Act cannot be granted on the merger of firms is not correct.
4. In the light of the above finding in respect of the very same assessee by co-ordinate bench, we are of the considered view that present appeal is to be necessarily dismissed by answering the substantial question of law against the revenue and in favour of the assessee in the light of the finding recorded by the co-ordinate Bench in ITA No.100029/2014, dated 10.10.2018.
Hence, the following:
ORDER
(i) Appeal is dismissed by answering the substantial question of law in favour of the assessee and against the revenue and by :6: following the order dated 10.10.2018, passed in ITA No.100029/2014.
(ii) Order passed by the Income Tax Appellate Tribunal, Bangalore Bench in ITA No.22 (BANG) 2016, dated 21.04.2017 is hereby confirmed.
[sd/-] JUDGE [sd/-] JUDGE Vnp*