Income Tax Appellate Tribunal - Chennai
Nippon Enterprises (South), Chennai vs Department Of Income Tax on 25 March, 2013
IN THE INCOME-TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI.
Before Dr. O.K. Narayanan, Vice-President &
Shri S.S. Godara, Judicial Member
I.T.A. No.83/Mds/2013
Assessment Year : 2006-07
The Assistant Commissioner of M/s. Nippon Enterprises (South), 24-
Income Tax, Vs. 25, Sivaganga Road, "Sterling Silver,
Central Circle IV (2), Off. Sterling Road, Nungambakkam,
46, Nungambakkam High Road, Chennai - 34.
Chennai. [PAN:AAAFN4591K]
(Appellant) (Respondent)
Appellant by : Shri S. Guru Bashyam, JCIT
Respondent by : Shri V.D. Gopal, Advocate
Date of Hearing : 25.03.2013
Date of pronouncement : 25.03.2013
ORDER
PER S.S. Godara, Judicial Member
This Revenue's appeal is directed against the order of the Commissioner of Income Tax (Appeals) -I, Chennai dated 16.10.2012 in ITA No. 123/2011-12, for assessment year 2006-07; in proceedings under section 143(3) r.w.s. 148 of the Income Tax Act 1961 [in short the "Act"].
2. In the course of hearing, the Revenue invites our attention to the assessment order dated 22.12.2011 and CIT(A)'s order under challenge. In the light thereof, its submission is that the CIT(A) has erred in upsetting the findings of the Assessing Officer, who had held that assessee's business 2 I.T.A. No.8 No.83/M/13 /M/13 activity of colour lab does not amount to manufacturing activity for the claim of additional depreciation. Accordingly, it reiterates the pleadings made in the grounds and prays for acceptance of the appeal.
3. Per contra, the assessee strongly supports the CIT(A)'s order and reasons contained therein. To buttress the submissions, it places reliance on the case law of [2006] 287 ITR 620 (Mad) CIT v. Jamal Photo Industries (I) P. Ltd. and prays for confirmation of the order under challenge.
4. Brief facts of the case are that the assessee/company is engaged in the business of a 'colour lab'. For the impugned assessment year, the Assessing Officer had finalized its 'scrutiny' assessment on 07.11.2008 accepting assessee's revised 'return' admitting total income of `.3,19,19,191/-. Thereafter, he reopened the assessment by forming the reason that the additional depreciation @ 20% is not applicable in assessee's case as it is not engaged in any 'manufacturing' activity.
5. In response, assessee's contention was that its business of 'colour lab' amounts to manufacturing of photographs and allied products. As we find from the assessment order, the Assessing Officer declined to accept its plea and made addition of `.12,49,206/-.
6. In appeal, the CIT(A) has reversed Assessing Officer's finding by terming assessee's activity to be a case of 'manufacturing' as the identity of the film rolls completely changes after development into photographs. In this manner, assessee's appeal stands accepted, which has resulted in filing of 3 I.T.A. No.8 No.83/M/13 /M/13 the instant case by the Revenue.
7. We have heard both parties at length and perused the relevant findings of the Assessing Officer and CIT(A). The principle question which invokes our adjudication at the instance of both parties is as to whether the business activity of the assessee which develops film rolls into photographs leads to a 'manufacturing/production' activity or not as claimed by the assessee and the Revenue respectively. In this backdrop, we notice that the Hon'ble Jurisdictional High Court (supra) has held that the developing photographs snapped in film rolls and printing amounts to 'manufacturing'. No law contrary to the aforesaid judgment of the Hon'ble Jurisdictional High Court has been placed on record by the Revenue. Accordingly, we hold that the CIT(A) has rightly decided the issue raised by the assessee against the Revenue.
8. Consequently, the appeal is dismissed.
Order pronounced in the open court at the time of hearing on Monday, the 25th of March, 2013 at Chennai.
Sd/- Sd/- (Dr. O.K. NARAYANAN) (S.S. GODARA) VICE-PRESIDENT JUDICIAL MEMBER Chennai, Dated, the 25.03.2013 Vm/- To: The assessee//A.O./CIT(A)/CIT/D.R.