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TMI Blog2017 (8) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... ing upon the orders of both the authorities below cannot be upheld and the orders of both the authorities are reversed accordingly. - Decided in favour of assessee. - ITA No.5565/Del/2014 - - - Dated:- 21-4-2017 - SHRI B.P. JAIN, ACCOUNTANT MEMBER For The Revenue : S/Shri Gautam Jain and Piyush Kr. Advocate, For The Assessee : Ms. Bedobani, Sr.D.R. ORDER This appeal of the assessee arises from the order of learned CIT(A)- XVI, Delhi vide order dated 31.07.2014 for the assessment year 2009-10. 2. The assessee has raised the following grounds of appeal. 1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining the disallowance of claim of deduction of ₹ 5,80,225/- U/S 80IB of the Act. 1.1. That the learned Commissioner of Income Tax (Appeals) while upholding the deduction has misinterpreted clause (2) of Part C of Schedule XIII read with fifth proviso to 80IB(4) of the Act to conclude that since the undertaking of the appellant is engaged in blending and bottling of IMFL which results in manufacture or production of distilled/brewed alcoholic drinks, therefore, the undertaking of appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ITD system has not allowed deduction u/s.80IB as the return was belated return. 3.2 The assessee in its reply filed on 09.12.2011 submitted that the company is engaged in the business of blending and bottling of IMFL. The assessee claimed that the company imports various sprits and the other ingredients like water, caramel and essence are added as per formulation and after filtration and inspection the blend is packed in different size of bottles and is fit for human consumption.......... In the entire process of blending and bottling there is no distillation/brewing of any sprit from molasses or grains nor any process of distillation is following. The company while filing the annual return has claimed deduction u/s.80Ib and in light of the above facts it is allowable to the assessee. 3.3 Submission of the assessee is duly considered and not acceptable on account of following reason. a) The assessee company is engaged in the business of blending and bottling of Indian Made Foreign Liquor in the State of Jammu Kashmir and having its registered office in Delhi. The company is stated to have commenced its business of blending and bottling of IMFL in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 5,80,225/- is being disallowed and added back to the income of the assessee. 5. I have heard the rival contentions and perused the facts of the case. It was pointed out by the learned counsel for the assessee, Mr. Gautam Jain, Advocate that during the assessment year 2007-08 the claim u/s.80IB was allowed by the Income Tax Department under the assessment made u/s.143(3) of the Act. The said deduction so claimed u/s.80IB of the Act was disallowed u/s.154 of the Act for which the appeal was made before the Income Tax Appellate Tribunal who allowed the claim of the assessee and held that the order u/s.154 was illegal, bad in law and without jurisdiction. The relevant findings of the order of ITAT E Bench in ITAs No.5304 and 5305/Del/2012 dated 13th September, 2017 are placed at pages 86 to 100 and relevant page is page no.96 where the findings in paragraph 18 is reproduced hereinbelow: 18. We thus find considerable cogency in the submission of the assessee s counsel that assessment order passed u/s.143(3) of the Act after considering the relevant material and otherwise also there is no mistake apparent from record which can be rectified u/s.154 of the Act; therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there should be finality in all legal proceedings. The Supreme Court in case of Parashuram Pottery Works Co. Ltd v. ITO [19777 106 ITR 1 had held as under:-....that the policy of law is that there must be a point of finality in all legal proceedings, stale issues should not be reactivated beyond a particular stage and that lapse of.e must induce repose in and set at rest judicial and quasi-judicial controversies as it t in other spheres of human activity.... 11 7.5. In the facts of the present case, where although the Assessing officer has allowed the essee deduction under section. 80-1 of the Act in the preceding years, one may still e certain reservations as to whether the issue of eligibility of Unit nos. 2 and 3 fulfilling the conditions has been finally settled, since the question has not been a subject matter of any appellate proceedings in the years preceding the assessment year 1991-92 matter of any appellate proceedings in the years preceding the assessment year 1991-92. However, there is yet another aspect which needs to be considered. By virtue of section 80I(5) of the Act, deduction u/s.80I of the Act is available to an assessee in respect of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew would not be permissible unless the past assessments are also disturbed. 77. The Assessing Officers over a period of three years being assessment years 1983-89, 1989-1990 and 1990-1991 have consistently accepted the claim of the assessee for deduction under 80-I of the Act and it would not be open for the Assessing Officer to deny the deduction under Section 80-I of the Act on the ground of non fulfilment of the conditions under 80-1(2) of the Ad without disturbing the assessment for the assessment years relevant to the previous year in which the Unit Nos.2 and 3 were established. 78. This view has also been accepted by a Division Bench of Gujarat High Court in the case of Saurashtra Cement Chemical Industries (supra). In that case, the Gujarat High Court held that where relief of a tax holiday had been granted to an assessee in an initial assessment year in which the conditions for grant of tax holiday had to be examined, denial of relief in the subsequent years would not be permissible without disturbing the assessment in the initial assessment year. The relevant extract from the decision of the' Gujarat High Court in Saurashtra Cement Chemical Industries (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the legal position, the High Court still chose to follow the said judgment. It is here where the High Court went wrong as the instant case is to be decided keeping in view the provisions of Section 35D of the Act. In any case, warrants repetition that in the instant case under the very same provisions benefit is allowed for the first two Assessment Years and, therefore, it could not have been denied in the subsequent block period. We, thus, answer question No. 1 in favour of the assessee holding that the assessee was entitled to the benefit of Section 35D for the Assessments Years in question. 7. Learned counsel for the assessee also placed on record the decision in assessee s own case for the assessment year 2010-11 of ITAT Delhi SMC Bench in ITA No.5566/Del/2014 dated 27th Feb, 2017 and the relevant paragraph is reproduced hereinbelow: 9. Since the facts of the present case are identical to the facts involved in the aforesaid referred to case, so respectfully following the order dated 13.02.2017 in assessee s own case for the assessment years 2007-08 and 2008-09 in ITA Nos. 5304 5305/Del/2012, the impugned order passed by the ld. CIT(A) is set aside and AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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