Tonira Pharma Limited, Bharuch V. The Income Tax Officer, Ward- 4, Bharuch

ITA 1032/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5556 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-07-2010
• Assessment Year: 1997-1998
• Appeal Filed On: 27-04-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUARAV BATHAM
• Assessee Lawyers: S V AGRAWAL
• Keywords: Set aside
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1032/AHD/2006 [ASSTT.YEAR: 1997-98] TONIRA PHARMA LIMITED -VS- ASST. COMM. OF INCOME- TAX, PLOT NO.4722, GIDS, ESTATE BHARUCH CIRCLE, BHARUCH OPP. NEW TELEPHONE EXCHANGE, ANKLESHWAR, DIST. BHARUCH PAN NO.AABCTT0638F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GAUARAV BATHAM, DR ASSESSEE BY: SHRI S.V.AGRAWA L, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-VI, BARODA IN APPEAL NO.CAB/VI- 81/05-06 DATED 03-02-2006. THE ASSESSEE WAS FRAMED BY ACIT, BHARUCH CIRCLE U/S .143(3) R.W.S. 147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 17-03- 2005 FOR THE ASSESSMENT YEAR 1997-98. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE DISALLOWANCE U/S.35D OF THE ACT. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING THREE EFFECTIVE GROUNDS :- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) [FOR, COMMISSIONER] HAS W ERRED IN CONFIRMING THE DISALLOWANCE MADE BY A.O. U/S.35D OF RS.4,40,917/- ON THE GROUND THAT NEW INDUSTRIAL UND ERTAKING STARTED W.E.F. 01/010/1999 (A.Y. 2000-01) AND HENCE DEDUCTION IS N OT AVAILABLE FOR THE YEAR ITA NO.1032/AHD/2006 A.Y. 1997-98 TONIRA PHARMA LTD. V. ACIT, BHARUCH PAGE 2 UNDER APPEAL. IN AS MUCH AS THESE EXPS. ARE INCURRE D FOR PUBLIC ISSUE FOR EXTENSION OF OLD PROJECT, AND DEDUCTION IS AVAILABL E FROM A.Y. 1996-97. (2) THE LEARNED COMMISSIONER HAS ERRED IN CONFIRMIN G THE DECISION OF A.O. THAT APPLICABLE RATE FOR WORKING OUT DEDUCTION U/S. 35D IS 2.5% AS AGAINST 5% CLAIMED BY ASSESSEE. (3) THE LEARNED COMMISSIONER HAS ERRED IN CONFIRMIN G THE ALLOWABLE DEDUCTION U/S.35D AS WORKED OUT BY A.O. AT RS.1,62, 000/- INSTEAD OF RS.2,41,712/-. 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE, SHRI S.V. AGRAWAL FILED COPY OF TRIBUNALS ORDER IN ASSESSEES OWN CASE IN ITA NO.3883-3885/AHD/2004 FOR ASSESSMENT YEARS 1998-99 TO 2001-02 VIDE ORDER DATE D 22-03-2007, WHEREBY THE TRIBUNAL HAS SET ASIDE THIS ISSUE TO THE FILE OF AS SESSING OFFICER BY GIVING FOLLOWING FINDING IN PARA-4 AS UNDER:- 4. THE LEARNED COUNSEL OF THE ASSESSEE EXPLAINED T HAT THE CLAIM OF RS.4,40,917/- WAS FOR THE INCREASE IN PUBLIC ISSUE FOR EXTENSION OF OLD PROJECT AND IT WAS BEING CLAIMED FROM ASST. YEAR 1996-97. I T HAS NOTHING TO DO WITH THE SETTING UP OF INDUSTRIAL UNDERTAKING ON 1.10.19 99. IN ANY CASE, THERE WAS AN INCREASE IN THE CAPITAL OF RS.518.42 LACS AS PER THE REVISION CLAIM OF THE ASSESSEE VIDE LETTER DATED 26.10.2004 AND BORROWING S FROM BANK OFRS.132.62 LACS AGGREGATING TO RS.651.04 LACS 2.5% THEREOF WOR KS OUT TO RS.16.27 LACS AND1/5 TH THEREOF SHOULD HAVE BEEN ALLOWED EVEN AS PER THE C IT(A)S WORKING AS AGAINST RS.16.27 LACS WHICH IS 1/10 TH OF CAPITAL AMOUNT. THERE IS THUS SOME MISUNDERSTANDING ON THE FACTS AND CIRCUMSTANCES OF THE CASE. WE, THEREFORE, SET ASIDE THE ORDERS OF THE CIT(A) AS WELL AS THAT OF THE ASSESSING OFFICER AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE AFTER OBTAINING THE EXACT DETAILS O F EXPENDITURE VIS--VIS 35D CLAIM OF THE ASSESSEE WHETHER FROM A.Y. 1996-97 OR 2000-2001 OR BOTH AND CONSIDER THE CLAIM OF THE ASSESSEE IN THE RIGHT PER SPECTIVE. WE FIND THAT THE TRIBUNAL HAS SET ASIDE THE ISSUE T O THE FILE OF ASSESSING OFFICER AND LD. SR-DR, SHRI GAURAV BATHAM ALSO AGREE THAT ISSUE CAN BE SET ASIDE TO THE FILE OF AO IN VIEW OF THE SAME DIRECTION. IN VIEW OF THE A BOVE, WE SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO CONSIDER THE CLAIM IN VIEW OF THE DIRECTION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.3883-3885/AHD/2004 (SUPRA). THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS E. ITA NO.1032/AHD/2006 A.Y. 1997-98 TONIRA PHARMA LTD. V. ACIT, BHARUCH PAGE 3 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER TO CHARGE INTEREST U/S.234B FROM 01-04-1997 TILL 31- 03-2005. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWI NG GROUND NO.4 :- (4) THE LEARNED A.O. HAS ERRED IN CALCULATING INTE REST U/S.234B FROM 01/04/1997 TILL 31/03/2005 (DATE OF ORDER 217/03/21 005). IN AS MUCH AS ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(11) ON 31 /07/1998. THEREFORE, AS PER SEC. 234B(3) INTEREST SHOULD BE CALCULATED FROM 01/08/1998 TO 31/03/2005. 5. LD. COUNSEL FOR THE ASSESSEE STATED THAT INTERES T U/S.234B IS TO BE CHARGED AS PER PROVISION OF SECTION 234B(3), WHICH READS AS UN DER:- INTEREST FOR DEFAULTS SIN PAYMENT OF ADVANCE TAX. 234B (1) (2) (3) WHERE, AS A RESULT OF AN ORDER OF REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 [OR SECTION 153A], THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB-SECTION (1) IS INCREASED, THE ASS ESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CEN T FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON TH E DAY FOLLOWING [THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SU B-SECTION (1) OF SECTION 143 [AND WHERE A REGULAR ASSESSMENT IS MADE AS IS REFERRED TO IN SUB-SECTION (1) FOLLOWING THE DATE OF SUCH REGUL AR ASSESSMENT]] AND ENDING ON THE DATE OF THE REASSESSMENT OR RECOMPUTA TION UNDER SECTION 147 [OR SECTION 153A], ON THE AMOUNT BY WHICH THE T AX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF THE REASSESSMENT OR RECOMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED [UND ER SUB-SECTION (1) OF SECTION 143 OR] ON THE BASIS OF THE REGULAR ASSESSM ENT AFORESAID. WE DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE I NTEREST U/S.234B AT THE TIME OF GIVING APPEAL EFFECT, IN VIEW OF THE PROVISIONS OF SECTION 234B SUB-SECTION (3) AS REPRODUCED ABOVE. 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN DIRECTING ASSESSING OFFICER TO CHARGE U/S. 234D. FO R THIS, ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.5 :- (5) THE LEARNED A.O. HAS ERRED IN CHARGING INTERES T U/S.234B OF RS.2,961/-. IN AS MUCH AS THE SAID PROVISION HAS BEEN INTRODUCED W .E.F. 01/06/2003 WHEREAS ORIGINAL ASSESSMENT U/S.143(1) WAS FRAMED ON 31/07/ 1998, WHICH IS PRIOR TO 01/06/2003. ITA NO.1032/AHD/2006 A.Y. 1997-98 TONIRA PHARMA LTD. V. ACIT, BHARUCH PAGE 4 7. AFTER HEARING THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THIS ISSUE WAS NOT RAISED BEFORE THE CIT(A) AND EVEN FROM THE ASSESSMENT ORDER IT IS NOTICED TH AT THERE IS NO DIRECTION REGARDING CHARGING OF INTEREST U/S.234D OF THE ACT. ACCORDING LY, THIS GROUND IS NOT ARISING FROM THE RECORDS AND ACCORDINGLY DISMISS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 23 RD JULY,2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 23/07/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VI, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD