Calcutta High Court
Commissioner Of Income Tax vs M/S. Utkal Asbestos Limited on 20 July, 2016
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction
[Income Tax]
ORIGINAL SIDE
ITA 414 of 2008
COMMISSIONER OF INCOME TAX, CENTRAL-III, KOLKATA
Versus
M/S. UTKAL ASBESTOS LIMITED
BEFORE:
The Hon'ble JUSTICE GIRISH CHANDRA GUPTA
The Hon'ble JUSTICE ARINDAM SINHA Date : 20th July, 2016.
Ms. A. Gutgutia, Adv.
Mr. P. Dudhoria, Adv.
Mr. J. P. Khaitan, Sr. Adv.
Mr. Siddharth Das, Adv.
Mr. C. S. Das, Adv.
The Court : The appeal is directed against a judgment and order dated 9th January, 2008 passed by the learned Income Tax Appellate Tribunal ''A'' Bench, Kolkata in ITA No.2331/Kol/2007 pertaining to the assessment year 2004-05 by which the learned Tribunal dismissed an appeal preferred by the revenue.
The aggrieved revenue has come up in appeal. The question of law, formulated on 18th August, 2008 when the appeal was admitted, reads as follows:
" Whether on the facts and in the circumstances of the case the Learned Tribunal erred in law in as well as in fact in dismissing the appeal filed by revenue without 2 considering that the directors have admitted in the annual Report that the second unit is an expansion of the 1st Unit and is located at the same site and have the same boundary wall."
The Assessing Officer refused to grant the benefit under Section 80IB on the ground that " Unit-II was developed in the same area and in the same complex even within the same boundary wall of Unit-I. Hence, Unit - II is not a new industrial unit as claimed by the assessee. The Unit-II is nothing but the expansion of the existing Unit-I. As such, the assessee's claim for deduction u/s. 80IB @100% is not viable for the Unit-II."
In an appeal by the assessee, the CIT(A) reversed the order of the Assessing Officer. He held that "whether it is a separate unit or not has to be considered in the light of the statutory language that the new industrial unit should not be formed by splitting up or reconstruction of the business already in existence. Once it is shown that the plant and machinery, building and warehouse are new and exclusively for the purpose of new unit, such unit for the purpose of income tax must be treated as separate and independent"'. The CIT(A) also referred to an earlier order of the learned Tribunal in the case of the assessee itself for the assessment years 2002-03 and 2003-04. The learned Tribunal in that case had held that ''in the facts of the case the two units be treated as separate and independent and that the loss of the second unit cannot be set off against the profit of the first unit before determining the amount of deduction u/s 80IB."
The revenue challenged the order of the CIT(A) before the learned Tribunal, which in its turn, chose to stick to the view it had earlier taken for the assessment years 2002-03 and 2003-04.
The revenue has once again come up in appeal.
Ms. Gutgutia, learned advocate appearing for the appellant, reiterated the views expressed by the Assessing Officer. Those views have been reversed by the CIT(A) for reasons already quoted above by us. She was unable to find any fault with the reasoning advanced by 3 the CIT(A) or the reasoning advanced by the learned Tribunal in its order pertaining to the assessment years 2002-03 and 2003-04. Since the learned Tribunal chose to stick to its views expressed earlier, no new views were required.
We find no merit in the appeal.
The question is answered in the negative and against the revenue. The appeal is, as such, dismissed.
The parties shall, however, bear their own costs.
(GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) sm