M/s ASA Biotech, Solan V. DCIT, Parwanoo

ITA 1235/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8204 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 27-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 29-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1235/CHD/2016 ASSESSMENT YEAR: 2012-13 M/S ASA BIOTECH, VS DCIT, CIRCLE, PLOT NO. 124, HPSIDC, PARWANOO. INDL. AREA BADDI, DISTT. PAN: AAMFA3779Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN, CA RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 21.03.2017 DATE OF PRONOUNCEMENT : 21.03.2017 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), SHIMLA DATED 03.10.2016 FOR ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS: I. THAT THE LD. COMMISSION OF INCOME TAX(APPEALS) HAS ERRED BY NOT ALLOWING DEDUCTION @ 100% OF PROFIT DERIVED FROM MANUFACTURING ACTIVITIES OF UNIT DESPITE OF FACT TH AT THE ASSESSEE HAS UNDERTAKEN SUBSTANTIAL EXPANSION DURIN G THE YEAR UNDER CONSIDERATION. FURTHER THE LD. ASSESSING OFFICER HAS WRONGLY DISALLOWED DEDUCTION AMOUNTING TO RS. 7621141/- UNDER SECTION 80IC OF INCOME TAX ACT. II. THAT THE LD. COMMISSION OF INCOME TAX(APPEALS) HAS ERRED BY NOT ALLOWING DEDUCTION UNDER SECTION 80IC INTERE ST INCOME OF RS. 4360/- III. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAWN ANY GROUND OF APPEAL BEFORE FINAL HEARING . 2. WE HAVE HEARD LD. REPRESENTATIVES BOTH THE PARTI ES AND PERUSED THE ORDERS OF AUTHORITIES BELOW. 3. IN THIS CASE, ASSESSEE E-FILING ITS RETURN OF IN COME DECLARING NIL INCOME ON 30.09.2012 AFTER CLAIMING D EDUCTION UNDER SECTION 80IC AT RS. 1,01,66,735/-. THE CASED WAS SELECTED 2 FOR SCRUTINY. THE ASSESSEE FIRM DERIVES INCOME FROM MANUFACTURING OF PHARMA PRODUCTS AT BADDI. 4. THE ASSESSEE STARTED ITS MANUFACTURING ACTIVITY/ OPERATION ON 13/08/2005 AND INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT WAS A.Y. 20 06-07. THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION UNDER SECTIO N 80IC TO THE EXTENT OF 100% OF THE ELIGIBLE PROFIT FOR FIVE YEARS PERIOD STARTING FROM A.Y. 2006-07 TO 2010-11. IT WAS NOTIC ED THAT THE ASSESSEE FIRM HAD AGAIN CLAIMED 100% DEDUCTION AGAI NST ELIGIBLE PROFITS IN THE RELEVANT A.Y. 2012-13 WHICH IS 7 TH YEAR OF PRODUCTION FOR THE FIRM BY CLAIMING TO HAVE CARRIED OUT SUBSTANTIAL EXPANSION IN F.Y. 2010-11. THE ASSESSIN G OFFICER, FOR THE DETAILED REASONS MENTIONED IN THE ASSESSMENT OR DER HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IC ONLY @ 25% AS AGAINST THE CLAIM 100% MADE BY THE ASSESSEE. 5. ON PERUSAL OF THE P&L ACCOUNT, THE ASSESSING OFF ICER NOTICED THAT THE ASSESSEE HAS CREDITED AN AMOUNT OF RS. 4,360/- UNDER THE HEAD INTEREST INCOME ON FDR AND ALSO CLA IMED DEDUCTION UNDER SECTION 80IC OF THE ACT ON THIS REC EIPT. WHEN CONFRONTED, THE APPELLANT SUBMITTED THAT THE SAID I NCOME IS CONSEQUENTIAL TO BUSINESS AND HENCE, DEDUCTION UNDE R SECTION 80IC OF THE ACT WAS RIGHTLY CLAIMED ON THE SAME. TH E CONTENTION OF THE ASSESSEE WAS NOT FOUND TO BE ACCEPTABLE BY T HE ASSESSING OFFICER IN VIEW OF THE JUDGEMENT OF THE HONBLE SUP REME COURT IN THE CASE OF M/S LIBERTY INDIA LTD. VS. CIT (317 ITR 218) AND PANDIAN CHEMICALS LTD. VS CIT (SUPREME COURT) 262 I TR 278. ACCORDINGLY, THE DEDUCTION CLAIMED UNDER SECTION 80 IC AMOUNTING TO RS. 4360/- WAS DISALLOWED AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FIRM. 3 6. THE LD. CIT(A) NOTED IN THE ORDER THAT ISSUES AR E COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT, CHANDIGARH B ENCH IN THE CASE OF M/S HYCRON ELECTRONICS VS ITO (41 ITR 486). THE LD. CIT(A) REPRODUCED THIS ORDER IN HIS FINDINGS AND FO LLOWING THE SAME DISMISSED THE APPEAL OF THE ASSESSEE UPHOLDING THE DEDUCTION UNDER SECTION 80IC @ 25% ONLY. THE ISSUE OF INTEREST FOR CLAIM OF DEDUCTION UNDER SECTION 80IC WAS ALSO FOUND COVERED BY THE SAME ORDER OF THE TRIBUNAL. 7. LD. REPRESENTATIVE OF BOTH THE PARTIES SUBMITTED THAT ISSUES ARE COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT, CHANDIGARH BENCH IN THE CASE OF M/S HYCRON ELECTRON ICS VS ITO (41 ITR 486). NO INFIRMITY HAVE BEEN POINTED OUT IN THE ORDER OF LD. CIT(A) IN FOLLOWING THE DECISION IN THE CASE OF M/S HYCRON ELECTRONICS VS ITO (41 ITR 486). THE APPEAL OF THE ASSESSEE HAS NO MERIT. THE SAME IS DISMISSED. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAI NI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST MARCH,2017. *SANJEEV* COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD