M/s Bnal Prefabs (P) Ltd., Chandigarh V. DCIT, C-1(1), Chandigarh

ITA 1184/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8914 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRISANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1184/CHD/2018 / ASSESSMENT YEAR : 2013-14 M/S BNAL PREFAB PVT LIMITED, S.R.NO. 19, SECTOR 9, CHANDIGARH VS. THE DCIT, CIRCLE 1(1), CHANDIGARH ! ' ./ PAN NO: AAACB7859D !#/ APPELLANT %& !# / RESPONDENT '()* /ASSESSEE BY : SH. VINEET KRISHAN , CA )* / REVENUE BY : SH. MODIT SRIVASTAVA, SR. DR + ,)( -' /DATE OF HEARING : 13.06.2019 ./ )( -' / DATE OF PRONOUNCEMENT : 10.07.2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 16.07.2018 OF THE COMMISSIONER OF INCOM E TAX (APPEALS )- 4, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IN 2 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH APPEAL NO.16/ROT(290)CHD/IT/CIT(A)-4/LDH/2015-16 DATED 16.07.2018 IS CONTRARY TO LAW AND FACTS OF TH E CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER W HO HAD MADE DISALLOWANCE OF RS. 84,248/- BY INVOKING THE P ROVISIONS OF SECTION 14A OF THE INCOME TAX ACT, 1961. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER W HO HAD MADE DISALLOWANCE OF RS. 2,65,573/-BY INVOKING THE PROVISIONS OF SECTION 36(L)(III) OF THE INCOME TAX ACT, 1961. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER W HO HAD DISALLOWED DEDUCTION UNDER SECTION 80IC ON MISCELLA NEOUS INCOME OF RS. 2,81,825/-. 5(A). THAT IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER W HO HAD MADE ADDITION OF RS. 10,44,833/- BY ALLOWING THE DE DUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961 @ 30 % AS AGAINST 100% CLAIMED BY THE APPELLANT. (B) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN IGNORING THE JUDGMENT OF HON'BLE HIMACHAL PRADESH H IGH COURT IN THE CASE OF M/S STOVEKRAFT INDIA VS. COMMI SSIONER OF INCOME TAX. EVEN AFTER JUDGMENT OF HON'BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S STOVEKRAFT IN DIA, THE LD CIT (APPEALS) APPLIED THE JUDGMENT OF HON'BLE CHANDIGARH BENCH IN M/S HYCRON ELECTRONICS VS. INCO ME TAX OFFICER, WHICH HAS BEEN REVERSED BY THE HON'BLE HIM ACHAL PRADESH HIGH COURT. 3 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH 3. A PERUSAL OF THE ABOVE GROUNDS OF APPEAL REVEAL THAT VIDE GROUND NO.5, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC O F THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') @ 100% OF THE ELIGIB LE PROFITS AS AGAINST 30% ALLOWED BY THE ASSESSING OFFICER. THE OTHER GRO UNDS RELATING TO DISALLOWANCE MADE BY THE ASSESSING OFFICER HAVE THE EFFECT OF ENHANCING THE INCOME OF THE ASSESSEE, HOWEVER, IF T HE INCOME OF THE ASSESSEE IS FOUND TO BE ELIGIBLE FOR DEDUCTION @ 1 00% U/S 80IC OF THE ACT, THE CONSEQUENTIAL ADDITION MADE ON THESE ISS UES BY THE ASSESSING OFFICER AND FURTHER CONTESTED BY THE ASSESSEE VIDE GROUND NOS. 2 TO 4 OF THE APPEAL WILL OTHERWISE BECOME ELIGIBLE FOR DEDUC TION @ 100%, HENCE, THE GROUND NOS. 2 TO 4 OF THE APPEAL WILL BECOME IN FRUCTUOUS. SO, WE TAKE UP FIRSTLY THE GROUND NO.5 FOR ADJUDICATION. 4. GROUND NO.5 : BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAV E SUBMITTED THAT THE FACTS AND ISSUE RELATING TO GROU ND NO.5 ARE COVERED BY THE DECISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEAR. THE ISSUE RELATING TO ELIG IBILITY OF CLAIM U/S 80IC OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT ') @ 100% OF THE PROFITS FROM ELIGIBLE BUSINESS OF THE ASSESSEE ON A CCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN AFTER AVAILING 100% DEDUCTION OF THE PROFITS FOR THE FIRST FIVE YEARS HAS BEEN ADJUDICATED BY THE TR IBUNAL VIDE ORDER DATED 13.5.2019 PASSED IN ITA NO. 1268/CHD/2018 FOR ASS ESSMENT YEAR 2011- 4 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH 12. THE RELEVANT PART OF THE ORDER OF THE TRIBU NAL DATED 13.5.2019 (SUPRA) IS REPRODUCED AS UNDER:- 2. THE SOLE ISSUE INVOLVED IN THE APPEALS RELATES TO ALLOWANCE OF CLAIM OF DEDUCTION U/S 80IC OF THE ACT @ 100% OF PROFITS FROM THE ELIGIBLE BUSINESS OF THE ASSESSEE, ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN, AFTER AVAILING 100% DEDUCTION OF THE PROFITS FOR THE FIRST FIVE YEARS. 3. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE STARTED ITS MANUFACTURING ACTIVITY/OPERATION ON 7.1.2005 AND WAS ELIGIBLE TO CLAIM DEDUCTION U/S 80IC OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) W.E.F ASSESSMENT YEAR 2005-06. THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION U/S 80IC OF THE ACT TO THE EXTENT OF 100% OF THE ELIGIBLE PROFIT FOR FIVE YEARS PERIOD. IT WA S NOTICED BY THE A.O. THAT THE ASSESSEE FIRM HAD AGAIN CLAIMED 100% DEDUCTION AGAINST ELIGIBLE PROFITS IN THE IMPUGNED ASSESSMENT YEAR, I.E. A.Y 2011-12, WHICH WAS THE 7 TH YEAR BY CLAIMING TO HAVE CARRIED OUT SUBSTANTIAL EXPANSION DURING THE YEAR UNDER CONSIDERATION. THE A.O. FOR THE DETAILED REASONS MENTIONED IN THE ASSESSMENT ORDER AND FOLLOWING THE DECISION OF THE ITAT CHANDIGARH BENCH IN THE CASE OF M/S HYCRON ELECTRONICS VS. ITO IN IT A NO.798/CHD/2012, HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IC ONLY @ 30% AS AGAINST THE CLAIM OF 100% MADE BY THE ASSESSEE. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE ASSESSEES APPEAL. 5. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE, AT THE OUTSET ITSELF, POINTED OUT THAT THE HON'BLE APEX COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN BUNCH OF CASES WITH THE LEAD CASE BEING PR.CIT, SHIMLA VS. 5 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH M/S AARHAM SOFTRONICS IN CIVIL NO.1784 OF 2019 DATED 20.2.2019. 7. LD.DR FAIRLY CONCEDED THAT THE ISSUE WAS SETTLED IN FAVOUR OF THE ASSESSEE BY THE ABOVE DECISION OF THE APEX COURT. 8. WE HAVE GONE THROUGH THE ORDER OF THE HON'BLE APEX COURT IN THE CASE OF M/S AARHAM SOFTRONICS (SUPRA) AND FIND THAT THE HON'BLE APEX COURT DEALT WITH THE ENTIRE SCHEME OF THE ACT RELATING TO THE RELEVANT SECTION I.E. SECTION 80IC OF THE ACT, AND ARRIVED AT THE CONCLUSION THAT THE DEFINITION OF TH E INITIAL ASSESSMENT YEAR CONTAINED IN CLAUSE (V) OF SUB-SECTION(8) OF SECTION 80IC OF THE ACT CAN LEAD TO A SITUATION WHERE THERE CAN BE MORE THAN ONE INITI AL ASSESSMENT YEAR WITHIN THE SAID PERIOD OF TEN YEARS . THE RELEVANT FINDING OF THE HON'BLE APEX COURT AT PARA 19 OF ITS ORDER IS AS UNDER: 19. HAVING EXAMINED THE SCHEME IN THE AFORESAID MANNER, WE ARRIVE AT THE CONCLUSION THAT THE DEFINI TION OF INITIAL ASSESSMENT YEAR CONTAINED IN CLAUSE (V) O F SUB- SECTION (8) OF SECTION 80-IC CAN LEAD TO A SITUATIO N WHERE THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEAR WITHIN THE SAID PERIOD OF 10 YEARS. AS PER SUB-SECT ION (6), CAP IS ON THE 10 ASSESSMENT YEARS. IT IS NOT ON QUA NTUM. WE HAVE ALSO TO KEEP IN MIND THE PURPOSE FOR WHICH SECTION 80-IC WAS ENACTED. THE PURPOSE WAS TO ESTAB LISH THE BUSINESS OF THE NATURE SPECIFIED IN THE SAID PR OVISION IN THE SPECIFIED STATES. THIS PROVISION WAS, THUS, AIMED AT ENCOURAGING THE UNDERTAKINGS OR ENTERPRISES TO ESTA BLISH AND SET UP SUCH UNITS IN THE AFORESAID STATES TO MA KE THEM INDUSTRIALLY ADVANCED STATES AS WELL. UNDOUBTE DLY, THESE ARE DIFFICULT STATES AS MOST OF THESE STATES FALL IN HILLY AREAS. THEREFORE, COST OF PRODUCTION AND TRANSPORTATION MAY ALSO GO UP. 20. WHEN WE KEEP IN MIND THESE OBJECTIVES FOR WHICH SECTION 80-IC WAS ENACTED, AN IRRESISTIBLE CONCLUSI ON WOULD BE TO GRANT 100% DEDUCTION OF THE PROFITS AND GAINS EVEN FROM THE YEAR WHEN THERE IS SUBSTANTIAL EXPANS ION IN THE EXISTING UNIT. AFTER ALL, THIS SUBSTANTIAL E XPANSION INVOLVES GREAT DEAL OF INVESTMENT WHICH HAS TO BE, AT LEAST 50% IN THE PLANT AND MACHINERY, OF THE BOOK VALUE T HEREOF BEFORE TAKING DEPRECIATION IN ANY YEAR. WITH AN EXP ANSION 6 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH OF SUCH A NATURE NOT ONLY THERE WOULD BE INCREASE I N PRODUCTION BUT GENERATION OF MORE EMPLOYMENT AS WEL L, WHICH WOULD BENEFIT THE LOCAL POPULACE. IT IS FOR T HIS REASON, CARRYING OUT SUBSTANTIAL EXPANSION BY ITSEL F IS TREATED AS INITIAL ASSESSMENT YEAR. IT WOULD MEAN THAT EVEN WHEN AN OLD UNIT COMPLETES SUBSTANTIAL EXPANSI ON, SUCH A UNIT ALSO BECOMES ENTITLED TO AVAIL THE BENE FIT OF SECTION 80-IC. IF THAT IS THE PURPOSE OF THE LEGISL ATURE, WE SEE NO REASON AS TO WHY 100% DEDUCTION OF THE PROFI TS AND GAINS BE NOT ALLOWED TO EVEN THOSE UNITS WHO HA D AVAILED THIS DEDUCTION ON SETTING UP OF A NEW UNIT AND HAVE NOW INVESTED HUGE AMOUNT WITH SUBSTANTIAL EXPANSION OF THOSE UNITS. 9. THE HON'BLE APEX COURT THEREAFTER CONCLUDED THAT A NEWLY SET UP UNDERTAKING OR ENTERPRISE IN TH E STATE OF HIMACHAL PRADESH WOULD BE ENTITLED TO DEDUCTION @ 100% OF THE ACT ITS PROFITS FOR THE FIR ST FIVE YEARS AND EVEN THEREAFTER IN THE CASE OF SUBSTANTIAL EXPANSION IS CARRIED OUT BY IT, THEN TH E ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUBSTANTIAL EXPANSION IS UNDERTAKEN BECOMING THE INITIAL ASSESSMENT YEAR. THAT IN ANY CASE, THE PERIOD OF DEDUCTION U/S 80IC OF THE ACT WOULD NOT EXCEED 10 YEARS. THE CONCLUSION OF THE HON'BLE APEX COURT AT PARA 24 OF ITS ORDER IS AS UNDER: 24. THE AFORESAID DISCUSSION LEADS US TO THE FOLLO WING CONCLUSIONS: (A) JUDGMENT DATED 20TH AUGUST, 2018 IN CLASSIC BINDING INDUSTRIES CASE OMITTED TO TAKE NOTE OF THE DEFINITION INITIAL ASSESSMENT YEAR CONTAINED IN S ECTION 80-IC ITSELF AND INSTEAD BASED ITS CONCLUSION ON TH E DEFINITION CONTAINED IN SECTION 80-IB, WHICH DOES N OT APPLY IN THESE CASES. THE DEFINITIONS OF INITIAL ASSESSMENT YEAR IN THE TWO SECTIONS, VIZ. SECTIONS 80-IB AND 80-IC ARE MATERIALLY DIFFERENT. THE DEFINITION OF INITIAL ASSESSMENT YEAR UNDER SECTION 80-IC HAS MADE ALL T HE DIFFERENCE. THEREFORE, WE ARE OF THE OPINION THAT T HE AFORESAID JUDGMENT DOES NOT LAY DOWN THE CORRECT LA W. (B) AN UNDERTAKING OR AN ENTERPRISE WHICH HAD SET U P A NEW UNIT BETWEEN 7TH JANUARY, 2003 AND 1ST APRIL, 2 012 IN STATE OF HIMACHALPRADESH OF THE NATURE MENTIONE D IN CLAUSE (II) OF SUB-SECTION (2) OF SECTION 80-IC, WO ULD BE ENTITLED TO DEDUCTION AT THE RATE OF 100% OF THE PR OFITS AND 7 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH GAINS FOR FIVE ASSESSMENT YEARS COMMENCING WITH THE INITIAL ASSESSMENT YEAR. FOR THE NEXT FIVE YEARS, THE ADMISSIBLE DEDUCTION WOULD BE 25% (OR 30% WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS. (C) HOWEVER, IN CASE SUBSTANTIAL EXPANSION IS CARRI ED OUT AS DEFINED IN CLAUSE (IX) OF SUB-SECTION (8) OF SEC TION 80-IC BY SUCH AN UNDERTAKING OR ENTERPRISE, WITHIN THE AFORESAID PERIOD OF 10 YEARS, THE SAID PREVIOUS YEA R IN WHICH THE SUBSTANTIAL EXPANSION IS UNDERTAKEN WOULD BECOME INITIAL ASSESSMENT YEAR, AND FROM THAT ASSESSMENT YEAR THE ASSESSEE SHALL BEEN ENTITLED TO 100% DEDUCTIONS OF THE PROFITS AND GAINS. (D) SUCH DEDUCTION, HOWEVER, WOULD BE FOR A TOTAL P ERIOD OF 10 YEARS, AS PROVIDED IN SUB-SECTION (6). FOR EX AMPLE, IF THE EXPANSION IS CARRIED OUT IMMEDIATELY, ON THE COMPLETION OF FIRST FIVE YEARS, THE ASSESSEE WOULD BE ENTITLED TO 100% DEDUCTION AGAIN FOR THE NEXT FIVEY EARS. ON THE OTHER HAND, IF SUBSTANTIAL EXPANSION IS UNDERTAKEN, SAY, IN 8TH YEAR BY AN ASSESSEE SUCH AN ASSESSEE WOULD BE ENTITLED TO 100% DEDUCTION FOR TH E FIRST FIVE YEARS, DEDUCTION @ 25% OF THE PROFITS AND GAIN S FOR THE NEXT TWO YEARS AND @ 100% AGAIN FROM 8 TH YEAR AS THIS YEAR BECOMES INITIAL ASSESSMENT YEAR ONCE AG AIN HOWEVER, THIS 100% DEDUCTION WOULD BE FOR REMAINING THREE YEARS, I.E., 8TH, 9TH AND 10TH ASSESSMENT YEA RS. 25. IN VIEW OF THE AFORESAID, WE AFFIRM THE JUDGMEN T OF THE HIGH COURT ON THIS ISSUE AND DISMISS ALL THESE APPEALS OF THE REVENUE. LIKEWISE, APPEALS FILED BY THE ASSESSEES ARE HEREBY ALLOWED. 10. IN VIEW OF THE ABOVE, IT IS NOW SETTLED LAW TH AT EVEN A NEW UNDERTAKING, WHICH HAS CLAIMED DEDUCTION OF ITS ELIGIBLE PROFITS @ 100% THEREOF FO R THE FIRST FIVE YEARS, IS ENTITLED TO CLAIM DEDUCTIO N @ 100% OF ITS PROFITS THEREAFTER ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN BY IT. 11. SINCE IN THE PRESENT CASE THE FACT THAT THE ASSESSEE HAD UNDERTAKEN SUBSTANTIAL EXPANSION IN THE IMPUGNED YEAR IS NOT DISPUTED, THE ASSESSEE, WE HOLD, IS ENTITLED TO CLAIM DEDUCTION @ 100% OF ITS ELIGIBLE PROFITS EVEN IF IT HAS ALREADY CLAIMED DEDUCTION OF ITS PROFITS AT THE SAID RATE FOR FIRST FIVE YEARS, IN VIEW OF THE LAW LAID DOWN BY THE APEX 8 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH COURT IN THIS REGARD IN ITS DECISION IN THE CASE OF M/S AARHAM SOFTRONICS(SUPRA). 12. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5. THE ABOVE ORDER OF THE TRIBUNAL PASSED IN RELATI ON TO THE ELIGIBILITY OF DEDUCTION @ 100% U/S 80IC OF THE A CT WAS IN RESPECT OF THE 7 TH YEAR FROM THE START / OPERATION OF MANUFACTURING ACTIVITY OF THE ASSESSEE. THE FINDINGS GIVEN ABOVE ARE APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ALSO BEING THE 8 TH YEAR AS IT HAS BEEN HELD THAT THE ASSESSEE WILL BE ELIGIBLE FOR DEDUCTION @ 100% ON ACCOUNT OF SUBSTANTIAL EXPANSION SUBJECT TO THE CONDITION THAT THE TOTAL PERIOD OF DEDUCTION U/S 80IC WOULD NOT EXCEED TO 10 YEARS. IN VIEW OF THIS, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 6 . GROUND NOS. 2 & 3: VIDE GROUND NO.2, THE ASSESSEE HAS AGITATED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF R S. 84,248/- U/S 14A OF THE ACT, AND FURTHER VIDE GROUND NO.3, THE ASSES SEE HAS AGITATED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 2 ,65,573/- BY INVOKING THE PROVISIONS OF SECTION 36(1)(III) OF TH E ACT. THE DISALLOWANCE OF EXPENDITURE U/S 14A OF THE ACT HAS THE EFFECT OF ADDITION INTO THE INCOME OF THE ASSESSEE. SIMILARLY, THE DI SALLOWANCE OUT OF INTEREST EXPENDITURE U/S 36(1)(III) OF THE ACT WIL L ALSO HAVE THE EFFECT OF ADDITION INTO THE BUSINESS INCOME OF THE ASSESSEE. 9 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH 7. IN VIEW OF OUR FINDINGS GIVEN ABOVE, THE ASSESSE E IS ELIGIBLE FOR CLAIM OF 100% DEDUCTION ON ITS INCOME FROM ELIGIBLE BUSINESS FOR THE YEAR UNDER CONSIDERATION. HENCE, THE AFORESAID AD DITIONS WILL NOT HAVE ANY TAX BEARING IN VIEW OF OUR FINDINGS GIVEN ABO VE. HENCE, GROUND NOS. 2 & 3 OF THE APPEAL HAVE BECOME INFRUCTUOUS. 8. GROUND NO.4 : THE ASSESSEE VIDE GROUND NO.4 HAS AGITATED THE DISALLOWANCE OF DEDUCTION U/S 80IC OF THE ACT OF MI SC. INCOME OF RS. 2,81,825/-. THE LD. COUNSEL FOR THE ASSESSEE HAS EX PLAINED BEFORE US THAT OUT OF THE MISC. INCOME OF RS. 2,81,825/-, A SUM OF RS. 1,37,649/- IS ON ACCOUNT OF DISCOUNTS AND DEDUCTIONS WHICH RELATES TO THE BUSINESS ACTIVITY OF THE ASSESSEE AND WAS PART OF T HE BUSINESS INCOME. A SUM OF RS. 53,229/- WAS RECEIVED ON ACCOUNT OF INSU RANCE CLAIM, THE EXPENDITURE RELATED TO WHICH WAS DEBITED IN THE EAR LIER YEARS. THE INSURANCE CLAIM RECEIVED BY THE ASSESSEE TO INDEMNI FY THE LOSSES WOULD GO ON TO ENHANCE THE BUSINESS INCOME OF THE ASSESSE E. FURTHER, THE BALANCE SUM OF RS. 90,945/- WAS RECEIVED BY THE ASS ESSEE ON ACCOUNT OF RETURN OF CHEQUES OF MEMBERSHIP SUBSCRIPTION PAID T O THE ASSOCIATION. IT WAS NOTHING BUT THE REFUND OF THE AMOUNT ALREADY PA ID AND CLAIMED AS EXPENDITURE. IN VIEW OF THIS, THE MISC. RECEIPT OF RS. 2,81,825/- IS HELD TO BE INCOME RELATING TO THE BUSINESS ACTIVITY OF T HE ASSESSEE AND THUS ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. 10 ITA NO.1184-C-2018- M/S BNAL PREFAB PVT LTD, CHANDIGARH 9. GROUND NO.1 : GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. IN VIEW OF OUR FINDINGS GIVEN ABOVE, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2019. SD/- SD/- ( . . / N.K. SAINI) ( / SANJAY GARG) !'# / VICE PRESIDENT $% / JUDICIAL MEMBER DATED : 10.07.2019 .. 1)%(2343( / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. %& !# / THE RESPONDENT 3. + 5( / CIT 4. + 5( ( )/ THE CIT(A) 5. 36 %(7 , - 7 , 89:; / DR, ITAT, CHANDIGARH 6. :< , / GUARD FILE 1 + / BY ORDER, = / ASSISTANT REGISTRAR