ACIT, Ludhiana V. M/s VMT Spinning Company Limited, Ludhiana

ITA 12/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90223 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH AGGARWAL
• Assessee Lawyers: DR AMA RVEER SINGH
• Keywords: Business income; Revised return
• Section: 143(3); 80IB; 10B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1147/CHD/2014 ASSESSMENT YEAR: 2007-08 M/S VMT SPINNING CO. LTD., VS THE ADDL. CIT, CHANDIGARH ROAD, RANGE 1, LUDHIANA. LUDHIANA. PAN: AABCV8087C & ITA NO. 12/CHD/2015 ASSESSMENT YEAR: 2007-08 THE DCIT, VS M/S VMT SPINNING CO. LTD., CIRCLE 1, CHANDIGARH ROAD, LUDHIANA. LUDHIANA. PAN: AABCV8087C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUBHASH AGGARW AL RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 01.07.2015 DATE OF PRONOUNCEMENT : 06.07.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE CROSS APPEALS ARE DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS)-II LUDHIANA DATED 30.10.2014 FO R ASSESSMENT YEAR 2007-08. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. BOT H APPEALS ARE DECIDED AS UNDER. ITA 1147/CHD/2014 (ASSESSEE'S APPEAL) 3. GROUND NO. 1 IS GENERAL AND NEED NO ADJUDICATION . 4. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ORDER O F LD. CIT(APPEALS) IN REDUCING THE PROFIT ELIGIBLE FOR DE DUCTION UNDER SECTION 80IC OF THE ACT BY THE FOLLOWING AMOU NTS : I) DUTY DRAW BACK : RS. 69,26,088/- II) MISC. RECEIPTS : RS. 1,11,988/- 5. THE ASSESSING OFFICER, WITH REGARD TO DEDUCTION CLAIMED UNDER SECTION 80IC OF THE ACT ON DUTY DRAW BACK REFERRED TO THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF STERLING FOODS 237 ITR 579 AND DECISION S OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASES OF LIBERTY INDIA VS CIT AND M/S NAHAR EXPORTS LTD. VS CIT AND HELD THAT THESE INCOMES WERE NOT DERIVED FROM BUSINESS AND THEREFORE, WERE NOT ELIGIBLE FOR DEDUC TION UNDER SECTION 80IC OF THE ACT. 6. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) T HAT DUTY DRAW BACK IS AN INCOME ARISING IN REGULAR COUR SE OF BUSINESS. THE LD. CIT(APPEALS), HOWEVER, NOTED THA T THESE INCENTIVES ARE PAID BY THE GOVERNMENT UNDER VARIOUS INCENTIVE SCHEMES AND ARE NOT DERIVED FROM THE ELIG IBLE BUSINESS. THE SOURCE OF THESE RECEIPTS IS NOT THE INDUSTRIAL 3 UNIT BUT INCENTIVE SCHEMES OF THE GOVERNMENT. THES E INCENTIVES, THEREFORE, DO NOT QUALIFY FOR DEDUCTION UNDER SECTION 80IC OF THE ACT. MATTER IS THEREFORE, FOUND COVERED BY DECISION OF THE HON'BLE SUPREME COURT IN THE CAS E OF LIBERTY INDIA VS CIT 317 ITR 218. 7. AFTER HEARING RIVAL SUBMISSIONS, WE ARE OF THE V IEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATTER. UNDER SECTION 80IC, DEDUCTION IS ALLOWABLE TO THE ASSESSE E WHERE THE GROSS TOTAL INCOME OF THE ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRIS E FROM ANY ELIGIBLE BUSINESS REFERRED TO IN THE SAID SECTI ON. THE DUTY DRAW BACK IS PAID BY THE GOVERNMENT UNDER VARI OUS INCENTIVE SCHEMES AND THUS, ARE NOT DERIVED FROM EL IGIBLE BUSINESS. 8. HON'BLE SUPREME COURT IN THE CASE OF LIBERTY IND IA VS CIT (SUPRA) HELD THAT, THE CONNOTATION OF THE WORDS DERIVED FROM IS NARROWER AS COMPARED TO THAT OF T HE WORDS ATTRIBUTABLE TO. BY USING THE EXPRESSION DERIVED FROM PARLIAMENT INTENDED TO COVER SOURCES NOT BEYOND THE FIRST DEGREE. THE ISSUE IS, THEREFORE, COVERED AGAINST THE ASSESSEE BY JUDGEMENT OF HON'BLE SUPREME COURT IN T HE CASE OF LIBERTY INDIA (SUPRA). THIS GROUND OF APPE AL OF THE ASSESSEE IS ACCORDINGLY, DISMISSED. 8(I) THE ASSESSING OFFICER WITH REGARD TO MISCELLAN EOUS RECEIPTS OF RS. 1,11,988/- ALSO SIMILARLY FOLLOWING THE ABOVE DECISIONS HELD THAT THIS INCOME WAS NOT DERIV ED FROM BUSINESS AND THEREFORE, WAS NOT ELIGIBLE FOR DEDUCT ION 4 UNDER SECTION 80IC OF THE ACT. THE ASSESSEE SUBMIT TED BEFORE LD. CIT(APPEALS) THAT THE MISCELLANEOUS RECE IPTS ARE THE AMOUNT THAT WAS RECEIVED ON ACCOUNT OF BROKERAG E OF OCEAN FREIGHT. THE ASSESSEE SUBMITTED THAT SHIPPIN G COMPANIES GRANTED DISCOUNT TO THE ASSESSEE THOUGH NOMENCLATURE USED IS BROKERAGE AGAINST THE AMOUNT O F OCEAN FREIGHT PAID. THE ASSESSEE RELIED UPON ORDER OF ITAT IN THE CASE OF SAME ASSESSEE FOR ASSESSMENT YEAR 20 01-02 DATED 31.07.2007. 9. THE LD. CIT(APPEALS) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE NOTED THAT SUCH BROKERAGE ARE NOT DERI VED FROM INDUSTRIAL UNDERTAKING AND CANNOT BE HELD TO B E INCOME FROM MANUFACTURE OR PRODUCTION OR ARTICLES A S ENVISAGED UNDER SECTION 80IC OF THE ACT. THE LD. CIT(APPEALS), THEREFORE, CONFIRMED THE ADDITION. 10. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF THE S AME ASSESSEE IN ITA NO. 678/2014 FOR ASSESSMENT YEAR 20 04-05 DATED 10.02.2015 IN WHICH THE BROKERAGE ON OCEAN FR EIGHT WAS CONSIDERED WITH REGARD TO CALCULATING THE DEDUC TION UNDER SECTION 10B OF THE ACT AND THE TRIBUNAL FOLLO WING ITS EARLIER DECISION HELD THAT BROKERAGE IS BASICALLY R EBATE ALLOWED BY THE SHIPPING COMPANY AS WELL AS SALE OF SAMPLE IS DIRECTLY RELATED TO THE BUSINESS OF THE ASSESSEE AND SINCE SAME HAS ALREADY BEEN HELD TO BE PART OF THE BUSINE SS INCOME BY THE TRIBUNAL. THEREFORE, FOLLOWING THE E ARLIER 5 DECISION IN THE CASE OF THE SAME ASSESSEE, IT WAS H ELD THAT THESE RECEIPTS ARE PART OF THE BUSINESS INCOME AND ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE INCOME TAX A CT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT ONCE BROKERAGE ON OCEAN FREIGHT IS HELD TO BE BUSIN ESS INCOME, THEREFORE, ASSESSEE WOULD BE ENTITLED FOR D EDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT. 10(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDE RS OF THE AUTHORITIES BELOW. 11. CONSIDERING THE FACTS OF THE CASE IN THE LIGH T OF THE EARLIER ORDER OF THE TRIBUNAL DATED 10.02.2015, WE ARE OF THE VIEW THAT BROKERAGE ON ACCOUNT OF OCEAN FREIGHT IS BUSINESS INCOME AS WAS ALREADY HELD BY THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE VIDE ORDER DATED 10.02.20 15. THEREFORE, ASSESSEE WOULD BE ENTITLED FOR DEDUCTION UNDER SECTION 80IC OF THE ACT ON SAID AMOUNT. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY, SET ASIDE AND AS SESSING OFFICER IS DIRECTED TO GRANT DEDUCTION UNDER SECTIO N 80IC TO THE ASSESSEE. 12. IN THE RESULT, THIS GROUND OF APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED. 13. ON GROUND NO. 3, ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN REDUCING THE PROFITS ELIGIBLE FOR D EDUCTION UNDER SECTION 80IC OF THE ACT BY RS. 5,06,634/- BEI NG 70% OF EXCESS PROVISIONS WRITTEN BACK OF RS. 7,23,763/- . REGARDING THE PROVISIONS WRITTEN BACK AMOUNTING TO 6 RS. 7,23,763/-, THE ASSESSING OFFICER POINTED OUT THAT THE ASSESSEE WAS CLAIMING DEDUCTION UNDER SECTION 80IB @ 30% IN ASSESSMENT YEAR 2006-07. THE ASSESSING OFFICER POINTED OUT THAT THIS WAS THE 10 TH YEAR OF CLAIM OF DEDUCTION UNDER SECTION 80IB AND FURTHER POINTED OUT THAT BY ADDING BACK THIS AMOUNT OF RS. 7,23,763/- DURING ASSESSMENT YEA R UNDER APPEAL 2007-08, THE ASSESSEE WILL GET EXEMPTI ON FROM INCOME TAX @ 100% UNDER SECTION 80IC. THE ASSE SSING OFFICER POINTED OUT THAT ASSESSEE HAD ACCORDINGLY E VADED TAX ON 70% OF THIS INCOME. IF THIS PROVISION HAD NOT BEEN CREATED DURING THE ASSESSMENT YEAR 2006-07, THE ASS ESSEE WOULD HAVE GOT DEDUCTION OF ONLY 30% OF THIS INCOME AND WOULD HAVE BEEN REQUIRED TO PAY TAX ON 70% OF THIS INCOME. THE ASSESSING OFFICER, ACCORDINGLY, HELD THAT 70% O F THIS PROVISION WAS TO BE TAXED DURING THE YEAR AND ACCO RDINGLY ADDED BACK AN AMOUNT OF RS. 5,06,634/- ON THIS ACCO UNT. 14. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEAL S) THAT THE MAJOR PROVISIONS WHICH WERE REVERSED, WERE IN R ELATION TO COMMISSION PAYABLE AGAINST EXPORTS ETC. THE ASS ESSEE RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF CIT VS METALMAN AUTO PVT. LTD. 336 ITR 434 AND DECISION OF THE TRIBUNAL IN THE CASE OF VARDHMAN THREADS LTD. VS ACIT IN ITA 556/2008. THE ASSESSEE FURTHER SUBMITTED THAT ASSESSING OFFICER H AS ERRED IN OBSERVING THAT THE ASSESSEE HAD NOT PAID TAXES O N 70% OF RS. 7,23,763/- BEING AMOUNT OF PROVISION CREATED IN THE PREVIOUS YEAR. THE ASSESSEE SUBMITTED THAT IT HAD CREATED THIS PROVISION IN RELATION TO ROUTINE BUSINESS EXPE NSES AND 7 AS A RESULT, NET PROFIT WAS REDUCED BY THE SAME AMO UNT. THE ASSESSEE DID NOT KNOW THAT IT WOULD BE IN A POS ITION TO CLAIM 100% DEDUCTION IN THE ORDER UNDER CONSIDERATI ON IN WHICH THE ASSESSEE HAD BECOME ELIGIBLE ONLY AFTER COMPLETION OF SUBSTANTIAL EXPANSION. THE LD. CIT(A PPEALS), HOWEVER, NOTED THAT IN ASSESSEE'S CASE, ASSESSING O FFICER HAS NOT HELD THAT PROVISIONS WRITTEN BACK ARE NOT E LIGIBLE FOR DEDUCTION UNDER SECTION 80IC. THE ASSESSING OF FICER MERELY DISALLOWED THE CLAIM TO THE EXTENT OF 70% OU T OF THE PROVISIONS WRITTEN BACK AMOUNTING TO RS. 7,23,763/- . THE ASSESSING OFFICER HELD THAT BY CREATING THE PROVISI ON IN ASSESSMENT YEAR 2006-07 AND THEN WRITING IT BACK IN THE YEAR 2007-08, THE ASSESSEE HAD OBTAINED UNDUE ADVAN TAGE TO THE EXTENT OF RS. 5,06,632/-. THEREFORE, ADDITI ON WAS CONFIRMED. 15. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DETAILS OF EXCESS PROVISION WRITTEN BACK AT PAGE 13 OF THE PAPER BOOK AND REITERATED THE SUBMISSIONS MADE BEFO RE AUTHORITIES BELOW. HE HAS FURTHER SUBMITTED THAT T HERE IS NO PROVISION UNDER SECTION 80IC TO ALLOW THE DEDUCT ION @ 30% IN THIS YEAR BEING THE FIRST YEAR OF CLAIM OF D EDUCTION UNDER SECTION 80IC OF THE ACT. 15(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDE RS OF THE AUTHORITIES BELOW. 16. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSE SSING OFFICER FOND THAT ASSESSEE HAS CLAIMED DEDUCTION UN DER SECTION 80IB @ 30% IN ASSESSMENT YEAR 2006-07 WHIC H WAS 8 10 TH YEAR FOR SUCH CLAIM. THE ASSESSING OFFICER FURTHE R POINTED OUT THAT BY ADDING THIS AMOUNT DURING THE Y EAR UNDER CONSIDERATION, ASSESSEE WILL GET EXEMPTION OF 100% UNDER SECTION 80IC OF THE ACT. THE ASSESSING OFFIC ER, THEREFORE, FOUND THAT ASSESSEE HAD EVADED TAX ON 70 % OF THIS INCOME. IT IS, THEREFORE, ADMITTED FACT THAT THE PRECEDING ASSESSMENT YEAR 2006-07 BEING HIS 10 TH YEAR FOR CLAIM OF DEDUCTION UNDER SECTION 80IB, THE ASSESSME NT YEAR UNDER APPEAL I.E. 2007-08 WOULD BE THE FIRST YEAR F OR CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT. THEREF ORE, ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION OF 100% AS PER PROVISIONS OF SECTION 80IC OF THE ACT. THE LD. COU NSEL FOR THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT THE RE IS NO PROVISION UNDER SECTION 80IC TO ALLOW THE DEDUCTION @ 30% IN THIS YEAR BEING THE FIRST YEAR OF 80IC. THE LD. CIT(APPEALS) NOTED THAT ASSESSING OFFICER HAS NOT H ELD THAT THE PROVISIONS WRITTEN BACK ARE NOT ELIGIBLE FOR DE DUCTION UNDER SECTION 80IC OF THE ACT BECAUSE ASSESSING OFF ICER HAS MERELY DISALLOWED 70% CLAIM OF THE ASSESSEE. T HE SUBMISSIONS OF THE ASSESSEE SHOW THAT WHEN PROVISIO N WAS CREATED IN THE PREVIOUS YEAR, IT WOULD RESULT NET P ROFIT OF THE ASSESSEE REDUCED IN PRECEDING ASSESSMENT YEAR 2006-07. THEREFORE, ASSESSEE WOULD HAVE ALSO GOT L ESSER DEDUCTION UNDER SECTION 80IB OF THE ACT, AS SUCH, T HE INCOME OF THE ASSESSEE WAS REDUCED IN PRECEDING ASSESSMENT YEAR. THEREFORE, ASSESSEE CORRECTLY CLA IMED THAT WHEN PROVISION WAS TAKEN CARE IN THE YEAR UNDE R APPEAL, IT WOULD ENHANCE THE INCOME OF THE ASSESSEE . SINCE 9 THE INCOME EARNED BY THE ASSESSEE WAS NOT DISPUTED BY THE ASSESSING OFFICER AND ASSESSING OFFICER ALLOWED PAR T CLAIM OF THE ASSESSEE TO THE EXTENT OF 30%, WOULD CLEARLY SHOW THAT ASSESSEE WAS ENTITLED FOR DEDUCTION UNDER SECT ION 80IC OF THE ACT ON THE ENTIRE AMOUNT OF PROVISIONS WRITT EN BACK IN THE YEAR UNDER CONSIDERATION. WE, THEREFORE, SE T ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSE SSING OFFICER TO ALLOW CLAIM OF ASSESSEE UNDER SECTION 80 IC OF THE ACT ON THE ENTIRE CLAIM MADE BY THE ASSESSEE. 17. THE GROUND NO. 3 OF APPEAL OF ASSESSEE IS ACCOR DINGLY ALLOWED. 18. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ORDERS OF AUTHORITIES BELOW IN NOT CALCULATING MINIMUM ALTERN ATE TAX TO BE CARRIED FORWARD TO SUBSEQUENT YEAR IN THE COR RECT MANNER. THE ASSESSMENT ORDER WOULD REVEAL THAT THE ASSESSING OFFICER AFTER COMPUTING THE BUSINESS INCO ME OF THE ASSESSEE ALSO MADE COMPUTATION OF PROFITS UNDER MAT (SECTION 115JB). THE ASSESSMENT ORDER WAS PASSED U NDER SECTION 143(3) ON 29.12.2009. THE ASSESSEE PREFERR ED APPEAL AGAINST THIS ASSESSMENT ORDER BEFORE LD. CIT(APPEALS) WHICH WAS DECIDED VIDE IMPUGNED ORDER DATED 30.10.2014. THE ASSESSEE HAS FILED GROUNDS OF APPE AL RAISED BEFORE LD. CIT(APPEALS) WHICH ARE ALSO REPRO DUCED IN THE IMPUGNED ORDER WHICH DISCLOSED THAT THE ASSESSE E HAS NOT CHALLENGED THE COMPUTATION OF INCOME MADE BY ASSESSING OFFICER UNDER MAT PROVISION. THEREFORE, THERE WAS NO OCCASION FOR LD. CIT(APPEALS) TO HAVE CONSID ERED 10 WHETHER MAT PROVISIONS WERE CORRECTLY CARRIED OUT O R NOT. IT WOULD ALSO SHOW THAT THE ASSESSEE WHEN COULD FIL E APPEAL BEFORE LD. CIT(APPEALS) ON AS MANY AS SEVEN GROUNDS OF APPEAL, COULD HAVE CHALLENGED THE COMPUTATION UNDER MAT PROVISIONS BUT ASSESSEE CHOOSE NOT TO CHALLENGE THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO COMPUTATION UNDER MAT PROVISIONS BEFORE LD. CIT(APPEALS). THUS, THE ASSESSEE ACCEPTED THE COMPUTATION UNDER THE MAT PROVISIONS M ADE BY THE ASSESSING OFFICER. THE ASSESSEE THUS, RAISE D GROUND NO. 4 FOR THE FIRST TIME BEFORE THE TRIBUNAL WITHOU T SEEKING EVEN LEAVE OF THE TRIBUNAL TO RAISE ADDITIONAL GROU ND OF APPEAL. THE LD. COUNSEL FOR THE ASSESSEE, DURING T HE COURSE OF ARGUMENTS ADMITTED THAT THIS GROUND IS NOT ARISI NG OUT OF THE IMPUGNED ORDER OF LD. CIT(APPEALS). HE HAS, HOWEVER, SUBMITTED THAT ON HIS ORAL REQUEST, THIS M AY BE ADMITTED AS ADDITIONAL GROUND OF APPEAL. 19. THE LD. DR, HOWEVER, STRONGLY OBJECTED TO THE ORAL REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE. THE H ON'BLE GUJRAT HIGH COURT IN THE CASE OF SMT. ARUNDHATI BALKRISHNA & OTHERS VS G.M. SINGHVI, ITO, 103 ITR 7 63 HELD AS UNDER : 'WHERE, IN AN APPEAL TO THE APPELLATE ASSISTA NT COMMISSIONER BY THE ASSESSEE AGAINST AN ORDER OF ASSESSMENT, THE ASSESSEE HAS NOT QUESTIONED THE DEC ISION OF THE INCOME-TAX OFFICER ON A POINT DECIDED, AND THE A PPELLATE ASSISTANT COMMISSIONER HAS NOT IN HIS ORDER CONSIDERED THAT POINT, THE ASSESSEE IS NOT ENTITLED TO QUESTION THE D ECISION OF THE OFFICER ON THAT POINT IN AN APPEAL TO THE APPELLATE TRIBUNAL AGAINST THE ORDER OF THE APPELLATE ASSISTANT COMMISS IONER AND THE TRIBUNAL IS NOT ENTITLED TO ALLOW THE ASSES SEE TO AGITATE THE QUESTION UNDER THE GUISE OF GRANTING LEAVE U NDER RULE 11 OF THE INCOME-TAX APPELLATE TRIBUNAL) RULES, 1963. 11 20. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SAHARA INDIA 347 ITR 331 HELD AS UNDER : HELD, ALLOWING THE APPEAL, THAT THE TRIBUNAL ALLOWED THE ASSESSEE TO RAISE THE ADDITIONAL GROUND IN APPEAL FOR THE FI RST TIME AND THEN DECIDED THE APPEAL ON THE MERITS NOT ONLY SETTING A SIDE THE ORDER OF THE COMMISSIONER (APPEALS) BUT SETTING ASIDE THE ORD ER OF THE ASSESSING OFFICER. SUCH APPROACH WAS NEITHER LEGAL NO R PROPER. THE TRIBUNAL HAD NOT GIVEN THE REASON FOR ADMITTING THE ADDITIONAL GROUND AND OVERLOOKED THE FACT THAT THE GROUND DID NOT ARISE OUT OF THE ORDER OF THE COMMISSIONER (APPEALS) WHICH WAS CHA LLENGED BY BOTH PARTIES. MOREOVER, THE ASSESSMENT ORDER WAS PA SSED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT ON T HE BASIS OF THE ORIGINAL RETURN AND NOT ON THE BASIS OF THE REVISED RETURN. THEREFORE, THE MATTER WAS REMITTED TO THE COMMISSIONER (APPEALS ). 21. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ECHO SHELLA VS CIT 293 ITR 234 HELD AS UNDER : DISMISSING THE APPEAL, THAT THE ONLY SUBMISSION MAD E BY COUNSEL FOR THE ASSESSEE WAS THAT WHILE CONFIRMING THE ADDITI ON, THE EXPENSES ON ELECTRICITY, LABOUR ETC., HAD NOT BEEN CO NSIDERED BY THE AUTHORITIES BELOW. A PERUSAL OF THE ORDERS OF AL L THE AUTHORITIES BELOW SHOWED THAT NO SUCH CLAIM WAS MADE AT ANY STAGE. ACCORDINGLY, THE SAME COULD NOT BE PERMITTED TO BE RAISED AT THI S STAGE BEFORE THE COURT. IT WAS QUITE EVIDENT THAT T HE RATES AT WHICH THE VALUATION WAS MADE, WERE SUPPLIED BY THE PARTNE R OF THE ASSESSEE-FIRM ITSELF. ONCE THE ASSESSMENT OF THE VA LUATION HAD BEEN MADE AS PER THE MATERIAL SUPPLIED BY THE ASSESSEE HIMSELF, THERE WAS NO QUESTION OF CHALLENGING THE SAME EITHER ON THE GROUND THAT THE SAME WAS INCORRECT OR THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO EXPLAIN THE SAME. THE ADDITIO N WAS VALID. 22. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT ASSESSEE HAS NOT FILED ANY APPLICATION FOR ADMISSION OF ADDITIONAL GROUND OF A PPEAL AND NO REASONS HAVE BEEN EXPLAINED WHY NO SUCH REQU EST WAS MADE IN ACCORDANCE WITH LAW AND WHAT WAS THE RE ASON FOR NOT RAISING THIS ISSUE BEFORE LD. CIT(APPEALS). SINCE 12 THIS ISSUE IS NOT ARISING OUT OF THE ORDER OF LD. C IT(APPEALS) AND ASSESSEE HAS NOT SHOWN ANY JUSTIFICATION FOR AD MISSION OF THE ADDITIONAL GROUND OF APPEAL, THEREFORE, THE ORAL REQUEST OF LD. COUNSEL FOR THE ASSESSEE CANNOT BE A CCEPTED AT THIS STAGE. IN THE ABSENCE OF ANY REQUEST IN WR ITING FOR ADMISSION OF THE ADDITIONAL GROUND OF APPEAL, LD. D R WAS JUSTIFIED IN CONTENDING THAT DEPARTMENT WOULD BE SE RIOUSLY PREJUDICED IN THEIR CONTENTION BECAUSE NO OPPORTUNI TY HAD BEEN GIVEN TO THE REVENUE TO COUNTER THE REQUEST OF THE ASSESSEE. THIS ISSUE IS ALSO NOT ARISING FROM THE ORDER OF THE LD. CIT(APPEALS) AND THAT NO REASON OR JUSTIFIC ATION HAD BEEN EXPLAINED WHY SUCH REQUEST SHOULD BE ADMITTED. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AN D CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY JUSTI FICATION TO ACCEPT THE ORAL REQUEST BY LD. COUNSEL FOR THE A SSESSEE IN ADMITTING ADDITIONAL GROUND OF APPEAL SO RAISED IN GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE. REQUEST OF TH E LD. COUNSEL FOR THE ASSESSEE IS ACCORDINGLY, REJECTED. RESULTANTLY, GROUND NO. 4 OF THE APPEAL OF THE ASSE SSEE IS REJECTED. 23. NO OTHER POINT IS ARGUED OR PRESSED. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ITA 12/CHD/2015 (DEPARTMENTAL APPEAL) 25. THE REVENUE CHALLENGED THE ORDER OF LD. CIT(A PPEALS) IN INCREASING THE DEDUCTION UNDER SECTION 80IC OF T HE ACT 13 ON INTEREST FROM CUSTOMERS AND SUPPLIERS FOR RS.14,68,930/-. THE ASSESSING OFFICER HELD THAT AM OUNT OF THE INTEREST RECEIVED IS INCOME FROM OTHER SOURCES AND ACCORDINGLY, DID NOT ALLOW DEDUCTION UNDER SECTION 80IC. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT INTEREST WAS RECEIVED FROM CUSTOMERS AND SUPPLIERS AND WERE TAXABLE AS BUSINESS INCOME. THE ASSESSEE RELI ED UPON DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PHATELA COTGIN INDUSTRIES PVT. LTD. V C IT 303 ITR 411. THE LD. CIT(APPEALS) ACCEPTED THE CONTENT ION OF ASSESSEE AND ALLOWED THIS GROUND OF APPEAL OF ASSES SEE. 26. AFTER HEARING RIVAL CONTENTIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF SAME ASSESSEE IN DEPARTMENTAL APPEAL IN ITA 979/2008 FOR ASSESSMENT YEAR 2005-06 DATED 10.02.2015 IN WHICH ON IDENTICAL ISSU E, THE DEPARTMENTAL APPEAL WAS DISMISSED. THE TRIBUNAL FO LLOWED THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF PHATELA COTGIN INDUSTRIES P. LTD. (S UPRA). THEREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE AS SESSEE BY JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COUR T AS WELL AS ORDER OF THE TRIBUNAL DATED 10.02.2015 (SUP RA). THIS GROUND OF APPEAL OF THE REVENUE IS ACCORDINGLY , DISMISSED. 26(I) THE REVENUE ALSO CHALLENGED ORDER OF LD. CI T(APPEALS) IN INCREASING THE ELIGIBLE PROFIT UNDER SECTION 80I C OF THE 14 ACT ON INSURANCE CLAIM RECEIVED FOR RS. 2,50,125/- REGARDING INCOME FROM INSURANCE CLAIM. REGARDING T HE INCOME FROM INSURANCE CLAIM, ASSESSING OFFICER REFE RRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF STERLING FOODS 237 ITR 597 AND DISALLOWED CLAIM OF ASSESSEE. THE LD. CIT(APPEALS) CONSIDERING THE ISS UE DIRECTED THE ASSESSING OFFICER TO EXAMINE WHETHER T HE ASSESSEE HAD RECEIVED ANY REAL INCOME ON THIS ACCOU NT AND TO RESTRICT DISALLOWANCE ACCORDINGLY. FINDINGS OF LD. CIT(APPEALS) AT PAGE 8 & 9 OF THE APPELLATE ORDER A RE REPRODUCED AS UNDER : ON THIS ISSUE THE REFERENCE MAY BE MADE TO THE DEC ISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. VALLABH YARNS (P) LTD. 51 DTR 236 WHEREIN IT HA S BEEN HELD THAT THE ASSESSEE HAD NOT RECEIVED ANY REAL IN COME ON ACCOUNT OF INSURANCE CLAIM SO EXCLUSION FOR DEDUCTI ON UNDER SECTION 80IB IS NOT WARRANTED. REFERENCE IN THIS RE GARD MAY ALSO BE MADE TO A RECENT DECISION OF THE HON'BLE DE LHI HIGH COURT IN THE CASE OF KOHINOOR FOODS LTD. V. CIT (2013 ) 353 ITR 264(DELHI)(HC). THE HON'BLE HIGH COURT HELD THAT MISCELLANEOUS INCOME LIKE, SALE OF IMPORT LICENSE, INTE REST, INSURANCE CLAIM, WEIGHBRIDGE INCOME IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA (A.YS. 1994-95, 1995-96). THEREFORE, INCOME ON ACCOUNT OF INSURANCE CLAIM IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. THE ONLY ISSUE IS WHETHER THE APPELLANT EARNED ANY REAL INCOME ON ACCOUNT OF INSURANCE CLAI M. KEEPING IN VIEW THE DECISION OF THE HON'BLE PUNJAB & HA RYANA HIGH COURT REFERRED TO ABOVE, THE ASSESSING OFFICER IS DIRE CTED TO EXAMINE WHETHER THE APPELLANT HAD RECEIVED ANY REAL INCOME ON T HIS ACCOUNT AND TO RESTRICT THE DISALLOWANCE ACCORDINGLY. 27. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(APPEALS). TH E LD. CIT(APPEALS) CORRECTLY CONSIDERING THE DECISIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT AND THE DELHI H IGH COURT (SUPRA) RIGHTLY DIRECTED ASSESSING OFFICER TO EXAMINE 15 WHETHER ASSESSEE HAD RECEIVED ANY REAL INCOME ON TH IS ACCOUNT AND TO RESTRICT THE DISALLOWANCE ACCORDINGL Y. NO INFIRMITY HAS BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(APPEALS), THEREFORE, WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). THIS GROUND IS ACCORDINGLY, DISMISSED. 28. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED . 29. IN VIEW OF THE ABOVE DISCUSSION, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH JULY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH