ACIT, New Delhi V. M/s Jakson Ltd., Noida

ITA 1140/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6224 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS AASHNA PAUL
• Assessee Lawyers: ASHISH GOEL
• Keywords: Bogus purchase; Search and seizure; Deemed to accrue or arise in india; Question of law; Deemed dividend
• Section: 153A; 2(22)(e); 80IB; 133(6); 201; 139(1); 13; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A NO.1140/DEL/2017 (ASSESSMENT YEAR 2013-1 4) THE ASST. CIT , CENTRAL CIRCLE-04, NEW DELHI. VS. M/S JAKSON LIMITED A-43, PHASE-II, NOIDA EXTENSION, NOIDA-201 305. PAN-AAACJ 5347C (APPELLANT) (RESPONDENT) APPELLANT BY MRS. AASHNA PAUL, CIT-DR RESPONDENT BY SH. VED JAIN, ADV. & SH. ASHISH GOEL, CA DATE OF HEARING 16.06.2021 DATE OF PRONOUNCEMENT 13.09.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST ORD ER DATED 29.12.2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-23, NEW DELHI {CIT(A)} FOR ASSESSMEN T YEAR 2013-14. 2 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING & SELLING OF ELECTRIC GENERATING SETS. A SEARCH AND SEIZURE OPERATION WAS CARRIED ON THE JAKSON GROUP OF CASES U/S 132 OF THE INCOME TAX ACT , 1961 (HEREINAFTER CALLED THE ACT) ON 3.10.2013. THE OR IGINAL RETURN U/S 139(1) OF THE ACT WAS FILED ON 03.11.2013 DECLARING THE INCOME OF RS.54,83,75,670/-. THE ASSESSMENT PROCEEDINGS IN THE ASSESSEES CASE WERE INITIATED BY ISSUING NOTICE U/S 153A OF T HE ACT AND IN RESPONSE TO THE SAID NOTICE THE RETURN WAS FILED DEC LARING AN INCOME OF RS.54,83,75,670/- ON 23.08.2015. 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD REC EIVED AN AMOUNT OF RS.8,32,29,600/- UNDER THE HEAD LOANS AND ADVAN CES UNDER UNSECURED LOANS AND THE ASSESSEE WAS REQUIRED TO SHO W CAUSE AS TO WHY THE SAID AMOUNT SHOULD NOT BE INCLUDED IN THE I NCOME OF THE ASSESSEE AS DEEMED INCOME U/S 2(22)(E) OF THE ACT F OR THE REASON THAT THE SAID LOAN/ADVANCE HAD BEEN RECEIVED FROM A COMPANY M/S EMIRATES TECHNOLOGIES LTD. IN WHICH 25% OF SHAREHOLD ING EACH WAS 3 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED HELD BY SHRI SAMEER GUPTA AND SHRI SANDEEP GUPTA WHO ALSO HELD 20.8% SHAREHOLDING EACH IN THE ASSESSEE COMPANY. THE ASSESSING OFFICER PROCEEDED TO ADD THIS AMOUNT TO THE INCOME OF THE ASSESSEE. FURTHER, THE ASSESSING OFFICER ALSO REQUIRED THE AS SESSEE TO PROVIDE DETAILS ALONG WITH CONFIRMATION OF PARTIES FROM WHOM PURCHASES ABOVE RS.10 LACS HAD BEEN MADE DURING THE RELEVANT ASSESSMENT YEAR. THE ASSESSING OFFICER ALSO ISSUED NOTICES TO SOME OF THE PARTIES AND THEREAFTER, PROCEEDED TO MAKE AN ADDITI ON OF RS.41,97,754/- ON ACCOUNT OF BOGUS PURCHASES ALLEGE D TO HAVE BEEN FROM A PARTY M/S NEW JAIN SPARES . APART FROM THIS, THE ASSESSING OFFICER ALSO MADE A DISALLOWANCE OF RS.18,725/- BY INCLUDING INCOME FROM SALE OF SCRAP FROM THE PROFIT ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.63,58,21,150/-. 2.2 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. FIR ST APPELLATE AUTHORITY AND THE LD. CIT(A) GIVEN RELIEF TO THE ASSESSEE ON ALL THE THREE ISSUES AGITATED BEFORE HIM. 4 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED 2.3 THE DEPARTMENT IS NOW BEFORE US CHALLENGIN G THE RELIEF ALLOWED BY THE LD. CIT(A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE CIT(A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.8,32,29,00 0/- MADE BY AO ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)( E) OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.41,97,754/ - MADE BY AO ON ACCOUNT OF BOGUS PURCHASES. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.18,725/- M ADE BY AO ON ACCOUNT OF DEDUCTION U/S 80IB ON SCRAP SALE. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 3.0 THE LD. CIT-DR SUBMITTED THAT AS FAR AS THE ISSUE OF DEEMED DIVIDEND WAS CONCERNED, ASSESSEE COMPANY HAD RECEIVED ADVANCE FROM GROUP CONCERN M/S EMIRATES TECHNOLOGIE S PVT. LTD AND BOTH IN THE ASSESSEE COMPANY AS WELL AS M/S EMI RATES TECHNOLOGIES PVT. LTD, SH. SAMEER GUPTA AND SH. SA NDEEP GUPTA 5 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED HELD SUBSTANTIAL INTEREST. IT WAS SUBMITTED THAT THE PROVISIONS UNDER THE ACT FOR DEEMED DIVIDEND ARE NOT RESTRICTE D TO A BENEFICIAL OWNER OF SHARES ONLY BUT ARE EXTENDED TO ANY CONCERN ALSO, IN WHICH SUCH SHAREHOLDER IS A MEMBER OR A PARTNER AND IN WHI CH HE HAS A SUBSTANTIAL INTEREST. IT WAS SUBMITTED THAT BOTH SH. SAMEER GUPTA AND SH. SANDEEP GUPTA HAD 20.08 % OF SHARE HOLDING IN THE ASSESSEE COMPANY AND 25% SHARE HOLDING IN M/S EMIRA TES TECHNOLOGIES PVT. LTD. IT WAS ARGUED THAT THE ADVANC E RECEIVED BY THE ASSESSEE COMPANY FROM THIS ANOTHER GROUP COMPAN Y WOULD ATTRACT THE PROVISIONS OF SEC.2(22)(E) OF THE ACT. THE LD. CIT-DR ARGUED THAT IT IS NOT REQUIRED THAT THE ADVANCE HAS TO BE RECEIVED BY THE LISTED SHARE HOLDERS OF THE COMPANY AND THE REQ UIREMENT IS OF SUBSTANTIAL INTEREST OF BENEFICIAL OWNERS OF THE SHA RES. THE LD. CIT-DR PLACED RELIANCE ON THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF NATIONAL TRAVEL SERVICE V. CIT (2018) 401 ITR 154/1 62 DTR 201 (SC), FOR THE PROPOSITION THAT THE MOMENT THERE IS A SHAREHOLDER, WHO NEED NOT NECESSARILY BE A MEMBER OF THE COMPANY ON ITS REGISTER, WHO IS THE BENEFICIAL OWNER OF SHARES, THE SECTION WOULD BE ATTRACTED WITHOUT ANYTHING MORE. 6 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED 3.1 ON THE ISSUE OF ADDITION ON ACCOUNT OF B OGUS PURCHASE, IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD MADE IN QUIRY IN RESPECT OF PURCHASES BY ISSUING NOTICES U/S 133(6) OF THE ACT AND SINCE NO REPLY HAD BEEN RECEIVED FROM SOME OF THE P ARTIES, THE ASSESSEE WAS ASKED TO PRODUCE THESE PARTIES. HOWEVER , IN THE CASE OF M/S NEW JAIN SPARES NO REPLY HAD BEEN RECEIVED A ND THE ASSESSING OFFICER HAD DIRECTED THE ASSESSEE TO PROD UCE THE PARTY BUT SINCE THE ASSESSEE FAILED TO COMPLY, THEREFORE, THE ASSESSING OFFICER HAD RIGHTLY TREATED THE SAID PURCHASE AS BO GUS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IT WA S ALSO SUBMITTED THAT THE LD. CIT(A) HAD GIVEN RELIEF TO THE ASSESSE E AFTER ADMITTING SOME NEW EVIDENCE WITH WHICH THE ASSESSING OFFICER WAS NOT CONFRONTED WITH AND, THEREFORE, THIS WAS A CLEAR VIOL ATION OF RULE- 46A. 3.2 ON THE ISSUE OF DISALLOWANCE U/S 80IB, THE LD. CIT-DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4.0 PER CONTRA, THE LD. AUTHORIZED REPRESENTA TIVE (AR) SUBMITTED THAT AS FAR AS THE ISSUE OF DEEMED DIVIDE ND WAS 7 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED CONCERNED, THE ASSESSEE COMPANY WAS NOT A SHARE HOLD ER IN M/S EMIRATES TECHNOLOGIES PVT. LTD. AND SHRI SAMEER GUPTA AND SHRI SANDEEP GUPTA HAVING SHAREHOLDINGS IN BOTH THE COMP ANY WOULD NOT ATTRACT THE PROVISIONS OF SEC.2(22)(E) OF THE I NCOME TAX ACT, 1961. THE LD. AR ALSO SUBMITTED THAT THE ASSESSEE COMPANY HAD RECEIVED THIS ADVANCE FOR THE PURCHASE FOR PROPERTY ON BEHALF OF THE M/S EMIRATES TECHNOLOGIES PVT. LTD. AND, THUS, IT WA S A CLEAR BUSINESS TRANSACTION AS WAS ALSO EVIDENT FROM THE AU DIT REPORT OF M/S EMIRATES TECHNOLOGIES PVT. LTD. THE LD. AR ALSO SUBMITTED THAT IN THE JUDGMENT RELIED UPON BY THE LD. CIT-DR IN TH E CASE OF NATIONAL TRAVEL SERVICE V. CIT (SUPRA), IN PARAGRAP H 19 OF THE SAID JUDGMENT, THE HONBLE APEX COURT HAD DECLINED TO AD JUDICATE THE ISSUE AND HAD REFERRED THE SET OF APPEALS TO A LARG ER BENCH TO BE CONSTITUTED BY THE HONBLE CHIEF JUSTICE OF INDIA F OR HAVING A RE- LOOK AT THE ENTIRE QUESTION OF LAW OF DEEMED DIVIDEN D POST THE AMENDMENT TO SEC.2(22)(E) W.E.F. 01.04.1988. THE LD. AR PLACED RELIANCE OF THE ORDER OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. MADHUR HOUSING & DEVELOPMENT COMPANY WHEREIN THE JUD GMENT OF THE HONBLE DELHI HIGH COURT WAS UPHELD HOLDING THAT ALTHOUGH 8 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED THERE WAS A PERSON HAVING SUBSTANTIAL INTEREST IN TH E ASSESSEE COMPANY AS WELL AS THE COMPANY ADVANCING THE LOAN B UT SINCE THE COMPANY WHICH HAD GIVEN LOAN TO THE ASSESSEE COMPA NY WAS NOT A SHAREHOLDER OF THE COMPANY WHICH HAD GIVEN THE LOAN, THE LOAN WAS NOT AS DEEMED INCOME IN THE HANDS OF THE ASSESSEE COMPANY. 4.1 ON THE ISSUE OF BOGUS PURCHASES, THE LD . AR PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) AND THE FIN DINGS AS CONTAINED IN PARA 4.7 ONWARDS. IT WAS STATED THAT THE PARTY I .E. NEW JAIN SPARES WAS A PARTY WITH WHICH THE ASSESSEE COMPANY HAD REGULAR DEALINGS AND THERE WERE TRANSACTIONS WITH THE SAID C OMPANY BOTH IN THE PRECEDING AS WELL AS SUCCEEDING ASSESSMENT YEARS AND THAT THE LD. CIT(A) HAD RIGHTLY DELETED THE ADDITION. 4.2 ON THE ISSUE OF DISALLOWANCE U/S 80IB, THE LD. AR PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A). 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND WE HAVE ALSO PERUSED THE MATERIAL ON RECORD. AS FAR AS THE ISSUE OF DISALLOWANCE U/S 2(22)(E) OF THE ACT BY TREATING THE AMOUNT OF R S.8,32,29,000/- 9 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED AS DEEMED DIVIDEND IS CONCERNED, THE LD. CIT-DR HAD MADE VEHEMENT ARGUMENTS AGAINST THE DELETION BY THE LD. CIT(A) BY PLACING RELIANCE ON THE JUDGMENT OF THE HONBLE APE X COURT IN THE CASE OF NATIONAL TRAVEL SERVICE VS. CIT (SUPRA) WHEREIN IT HAS BEEN OBSERVED THAT THE JUDGMENT OF THE HONBLE APEX COUR T IN THE CASE OF ANKITECH (P.) LTD. REPORTED IN 340 ITR 14 (DELHI) WA S NOT A CORRECT INTERPRETATION OF LAW. IT IS THE CONTENTION OF THE D EPARTMENT THAT IT IS NOT NECESSARY THAT THE PERSON ADVANCING THE LOAN SHOULD BE A SHAREHOLDER AND EVEN BENEFICIAL OWNERSHIP/SHAREHOLDI NG WOULD ATTRACT THE PROVISIONS OF SECTION 2(22)(E) OF THE A CT. WE HAVE CAREFULLY PERUSED THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL TRAVEL SERVICE VS. CIT (SUPRA) AND SPECIALLY PARAGRAPH -19 OF THE SAID JUDGMENT, WHICH IS, THE CO NCLUDING PARAGRAPH, IN WHICH THE HONBLE APEX COURT HAS OBSER VED AS UNDER: 19. THIS BEING THE CASE, WE ARE PRIMA FACIE OF THE VIEW THAT THE ANKITECH JUDGMENT (SUPRA) ITSELF REQUIRES TO BE REC ONSIDERED, AND THIS BEING SO, WITHOUT GOING INTO OTHER QUESTIO NS THAT MAY ARISE, INCLUDING WHETHER THE FACTS OF THE PRESENT C ASE WOULD FIT THE SECOND LIMB OF THE AMENDED DEFINITION CLAUSE, W E PLACE THESE APPEALS BEFORE THE HONBLE CHIEF JUSTICE OF I NDIA IN OTHER TO CONSTITUTE AN APPROPRIATE BENCH OF THREE LEARNED JUDGES IN ORDER TO HAVE A RELOOK AT THE ENTIRE QUESTION. 10 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED 5.1 THUS, IT IS CLEAR THAT ALTHOUGH THE HONBLE APEX COURT HAS EXPRESSED ITS RESERVATION ABOUT THE APPLICABILITY O F THE JUDGMENT RENDERED BY THE HONBLE DELHI HIGH COURT IN THE CAS E OF ANKITECH (P.) LTD. (SUPRA), THE ISSUE HAS BEEN PLACED BEFORE THE HONBLE CHIEF JUSTICE OF INDIA FOR CONSTITUTING AN APPROPRIATE BE NCH OF THREE LEARNED JUDGES IN ORDER TO HAVE A RELOOK AT THE QUE STION. THEREFORE, IN OUR CONSIDERED VIEW THE ISSUE HAS STILL BEEN LEF T OPEN BY THE HONBLE APEX COURT. WE FURTHER NOTE THAT THE HONBL E APEX COURT IN THE CASE OF CIT VS. MADHUR HOUSING & DEVELOPMENT CO RPORATION (SUPRA) HAS UPHELD THE JUDGMENT OF THE HONBLE DELH I HIGH COURT HOLDING THAT ALTHOUGH THERE WAS A PERSON HAVING SUBS TANTIAL INTEREST IN THE ASSESSEE COMPANY AND THE COMPANY WHI CH HAD GIVEN LOAN, THE ASSESSEE COMPANY, NOT BEING A SHAREHOLDER OF THE COMPANY WHICH HAD GIVEN THE LOAN, THE LOAN WAS NOT AS SESSABLE AS DEEMED INCOME IN THE HANDS OF THE ASSESSEE. WE ALSO NOTE THAT ALTHOUGH THIS JUDGMENT HAS BEEN ALSO DOUBTED BY THE HONBLE APEX COURT IN THE CASE OF NATIONAL TRAVEL SERVICE VS. CIT, UNLESS THE SAME IS REVERSED, THE SAME IS BINDING ON US. THEREFORE, WE ARE AFRAID THAT 11 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED THE RELIANCE OF THE DEPARTMENT ON THE HONBLE APEX COURTS JUDGMENT IN THE CASE OF NATIONAL TRAVEL SERVICE VS. CIT, DELHI (SUPRA) WOULD NOT BE OF MUCH HELP. FURTHER, WE ALSO NOTE THA T THE LD. CIT(A) IN PARA 4.5 ONWARDS OF THE IMPUGNED ORDER HAS ALSO CONSIDERED THE VARIOUS DOCUMENTS SUBMITTED BY THE A SSESSEE TO ESTABLISH THAT THE TRANSACTION OF ADVANCE WAS PERTA INING TO A BUSINESS TRANSACTION FOR PURCHASE A PROPERTY, AND, THEREFORE, ON THIS ACCOUNT ALSO THE IMPUGNED TRANSACTION WOULD NO T FALL WITHIN THE DEFINITION OF DEEMED DIVIDEND U/D 2(22)(E) OF T HE ACT. IN THIS REGARD, THE CATEGORICAL FINDINGS OF THE LD. CIT(A) HAVE NOT BEEN REFUTED BY THE LD. CIT-DR. THEREFORE, WE HAVE NO RE ASON TO DEVIATE FROM THE FINDING OF THE LD. CIT(A) ON THIS ISSUE AN D WE, ACCORDINGLY, DISMISS GROUND NO.2 RAISED BY THE DEPARTMENT. 5.2 COMING TO GROUND NO.3 RELATING TO DELETION OF ADDITION OF RS.41,97,754/- ON ACCOUNT OF BOGUS PURCHASES, WE NOT E THAT IN PARA 4.7 OF HIS ORDER, THE LD. CIT(A) HAS NOTED THA T THE ASSESSING OFFICER HAD MADE A SIMILAR ADDITION IN ASSESSMENT Y EAR, 2011-12, 2012-13 AS WELL AS IN ASSESSMENT YEAR 2014-15 ON AC COUNT OF 12 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED PURCHASES FROM M/S NEW JAIN SPARES AND WHILE DELETIN G THE ADDITION, THE LD. CIT(A) HAS RELIED ON THE FINDINGS RECORDED BY HIM FOR THE SAID EARLIER YEARS. THUS, THE LD. CIT(A) HA S NOT GIVEN A DETAILED FINDING ON THE ISSUE IN THE IMPUGNED ASSES SMENT YEAR. HOWEVER, WE HAVE GONE THROUGH THE COPIES OF DOCUMEN TS SUBMITTED BY THE ASSESSEE ON THE ISSUE DURING THE COURSE OF A SSESSMENT PROCEEDINGS WHICH INCLUDE COPIES OF PURCHASE INVOICE S, EVIDENCES OF PAYMENTS OF THESE PURCHASES HAVING BEEN MADE THROUG H BANKING CHANNELS, RECONCILIATION WITH VAT RETURNS AND BOOKS OF ACCOUNTS AND THE PURCHASES BEING RECONCILED WITH QUANTITATIVE DETAILS. IT IS ALSO UNDISPUTED THAT THE ASSESSEE HAD BEEN MAKING P URCHASES FROM THIS PARTY ON A REGULAR BASIS. THE SOLE BASIS ON WHI CH THE ASSESSING OFFICER HAD MADE THE DISALLOWANCE WAS THAT THE ASSESS EE HAD FAILED TO PRODUCE THE SAID PARTY WHEN CALLED UPON BY THE AS SESSING OFFICER TO DO SO. HOWEVER, WHEN THE PURCHASES ARE OTHERWISE DOCUMENTED AND THE ASSESSING OFFICER HAS ACCEPTED THE BOOK RES ULTS BY ACCEPTING THE BOOKS OF ACCOUNTS, NON-APPEARANCE A P ARTY BEFORE THE ASSESSING OFFICER CANNOT BE THE SOLE GROUND FOR TRE ATING THE PURCHASES AS BOGUS. ALSO, IT IS UNDISPUTED THAT THE SAID PARTY HAD 13 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED RUNNING ACCOUNT IN THE BOOKS OF ACCOUNT OF THE ASSE SSEE COMPANY IN WHICH REGULAR TRANSACTIONS WERE BEING MADE AND TH E IMPUGNED PURCHASE WAS NOT AN ISOLATED CASE OF PURCHASE. IN SU CH CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE AND WE UPHOLD THE SAME AND REJECT THE GROUND NO.3 OF THE DEPARTMENTS APPEAL. 5.3 AS FAR AS THE ISSUE OF DEDUCTION U/S 80IB ON SALE OF SCRAP IS CONCERNED, ALTHOUGH THE LD. CIT(A) HAS NOT PASSE D A SPEAKING ORDER ON THE SAME AND HAS RELIED ON HIS ORDERS FOR THE PREVIOUS ASSESSMENT YEARS WHILE DELETING THE ADDITION, WE NOT E THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY NU MEROUS JUDICIAL PRECEDENTS, CASE IN POINT BEING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SADHU FORGING LTD . REPORTED IN 336 ITR 444 (DELHI HIGH COURT). SIMILARLY, ORDERS WE RE PASSED BY THIS TRIBUNAL IN CASE OF GROUP COMPANIES OF THE ASS ESSEE COMPANY I.E. IN THE CASE OF JAKSON & CO. VS. CIT, IN ITA NO .350/DEL/2014 FOR ASSESSMENT YEAR 2010-11 VIDE ORDER DATED 06.01.2016 AND IN THE CASE OF JAKSON ENTERPRISES VS. ACIT IN ITA NOS. 679 1 TO 6793/DEL/2013 VIDE ORDER DATED 29 TH JULY, 2016 IN WHICH THE 14 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED AFORESAID ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SADHU FORGING LTD. (SUPRA) WAS FOLLOWED. IN THE PRESENT CASE ALSO, IT IS UNDISPUTED THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM SALE OF SCRAP PERTAINED TO SCRAP GENERATED FROM THE ACTIVITIES CARRIED BY THE ASSESSEE WHICH WERE PART AND PARCEL OF THE MAN UFACTURING PROCESS OF THE INDUSTRIAL UNDERTAKING. THE HONBLE DELHI HIGH COURT HAS OBSERVED IN THE CASE OF CIT VS. SADHU FORGING L TD. (SUPRA), (THAT THE RECEIPTS FROM SALE OF SCRAP BEING PART A ND PARCEL OF THE ACTIVITIES AND BEING APPROXIMATE THERETO WOULD ALSO BE WITHIN THE AMBIT OF GAINS DERIVED FROM INDUSTRIAL UNDERTAKING FOR THE PURPOSES OF COMPUTING DEDUCTION U/S 80IB ). ACCORDINGLY, RESPECTFULLY FOLLOWING JUDGMENT OF THE HONBLE APEX COURT AS AFOR ESAID, WE DISMISS GROUND NO.4 RAISED BY THE DEPARTMENT. 6.0 IN THE FINAL RESULT, THE APPEAL OF THE REVENU E STANDS DISMISSED. ORDER WAS PRONOUNCED ON 13 TH SEPTEMBER, 2021. [ SD/- SD/- (R.K.PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/09/2021 PK/PS 15 ITA NO.1140/DEL/2017 ACIT VS. M/S JAKSON LIMITED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI