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These are cross appeals by the assessee and Revenue directed against the order of CIT(A)-I, Bengaluru, dated 12.02.2014; for Assessment Year 2011-12.
2. Briefly stated, the facts of the case are as under:-
2.1 The assessee, a company engaged in the business of manufacturing and Exporter of readymade garments and job works, filed its return of income for Assessment Year 2011-12 on 27.09.2011 declaring total income of Rs.6,01,06,300/- after claiming deduction of Rs.42,65,47,075/- under section 10B of the Income Tax Act, 1961 (in short ‘the Act’). The case was taken up for scrutiny and the assessment was concluded under section 143(3) of the Act vide order dated 24.03.2014 wherein the assessee’s income was determined at Rs.48,66,53,376/-. This was due to the disallowance of the assessee’s claim for deduction under section 10B of the Act as the Assessing Officer (AO) was of the view that the assessee company was formed by reconstruction of a business already in existence by use of used plant and machinery thereof for this purpose.
2.2 Aggrieved by the order of assessment for Assessment Year 2011-12 dated 24.03.2014, the assessee preferred an appeal before the CIT(A)-I, Bengaluru. The CIT(A) disposed off the appeal vide order dated 31.07.2014 allowing the assessee partial relief. In this order, the CIT(A) held that the assessee is entitled for deduction under section 10B of the Act; but disallowed the assessee’s alternate claim for being allowed deduction under section 80JJA of the Act for the reason that the assessee failed to satisfy the conditions laid down for grant of deduction thereunder.
3. Both Revenue nd the assessee, being aggrieved by the order of CIT(A)-I, Bengaluru, dated 31.07.2014, have preferred cross appeals. We now proceed to dispose these appeals hereunder:-
Revenue’s appeal in ITA No.3525/Bang/2014 – for Assessment Year 2011-12
4. In is appeal, Revenue has raised the following grounds:-
5. Ground Nos. 1, 4 and 5 (supra), being general in nature and not urged before us; no adjudicat on is called for thereon and the same are accordingly dismissed as infructuous.
6. Ground Nos. 2 and 3 – Deduction under section 10B of the Act
6.1 In these grounds (supra), Revenue reiterates its stand that the CIT(A) erred in directing the AO to allow the deduction claimed under section 10B of the Act without appreciating the fact that the assessee company was formed by reconstruction of the business already in existence and had made use of already used plant and machinery. The learned DR was heard in support of the grounds raised.
6.2 The learned AR for the assessee submitted that this issue of eligibility of the assessee for being entitled to be allowed deduction under section 10B of the Act had already come up before and was addressed by the Tribunal for Assessment Year 2007-08 in the assessee’s own case and in its order in ITA No.1516/Bang/2012 dated 17.04.2015 (copy placed on record) decided this issue in favour of the assessee and against Revenue. It was further submitted that subsequently, Co-ordinate Benches of Tribunal in their orders for Assessment Year 2008-09 in ITA No.1245/Bang/2013 dated 27.11.2015; for Assessment Years 2009-10 and 2010-11 in ITA Nos.839 and 840/Bang/2014 dated 19.02.2016 dismissed Revenue’s appeals following the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for Assessment Year 2007-08 (supra). It is prayed by the learned AR that in view of the aforesaid judicial pronouncements (supra), the issue is covered in favour of the assessee and against Revenue.
6.3.1 We have considered the rival contentions / submissions and perused the material on record; including the judicial decisions cited and placed reliance upon. We find that the Co-ordinate Bench of this Tribunal in the assessee’s own case for Assessment Year 2007-08 has considered the issue of the assessee’s eligibility for being allowed deduction claimed under section 10B of the Act and in its order in ITA No.1516/Bang/2012 dated 17.04.2015, while deciding Revenue’s appeal, at para 6 thereof held as under:-
6.3.2 We also find that the aforesaid decision of the Tribunal in the assessee’s own case upholding the assessee’s claim for being entitled to deduction under section 10B of the Act (supra); has been followed by successive Co-ordinate Benches of this Tribunal in the assessee’s own case for Assessment Year 2008-09 in ITA No.1244/Bang/2013 dated 27.11.2015 and for Assessment Years 2009-10 and 2010-11 in ITA Nos.839 and 840/Bang/2014 dated 19.02.2016. In view of the facts and circumstances of the case which established that the assessee company is not formed by reconstruction of an existing business as has been held in Assessment Year 2007-08 and consequently that the assessee is eligible / entitled for deduction under section 10B of the Act, therefore respectfully following the aforesaid decisions of the Co-ordinate Benches of this Tribunal in the assessee’s own case from Assessment Years 2007-08 to 2010-11 (supra), we uphold the assessee’s entitlement for deduction under section 10B of the Act. Consequently, ground Nos. 2 and 3 raised by Revenue are dismissed.
7. In the result, Revenue’s appeal for Assessment Year 2011-12 is dismissed. Assessee’s Appeal in ITA No.1353/Bang/2014 – for Assessment Year 2011-12
8. In its appeal, the assessee has raised the following grounds:-