M/s. Deepak Industries Ltd., Kolkata V. DCIT, Circle - 6(1), Kolkata, Kolkata

ITA 1245/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9824 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI RAY
• Assessee Lawyers: S JAJODIA
• Section: 143(3); 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. P.M. JAGTAP, VICE PRESIDENT AND SH. S.S.GODARA, JUDICIAL MEMBER ITA NO. 1245/KOL/2018 [ASSESSMENT YEAR: 2012-13 ] M / S. DEEPAK INDUSTRIES LTD. , 16, HARE STREET, BBD BAG, KOLKATA-700 001. PAN- AAACD 8676 J VS DCIT , CIRCLE-6(1), KOLKATA. (APPELLANT) (RESPONDENT) APPELLANT BY SH. S. JAJODIA , FCA. RESPONDENT BY SH. DHRUBAJYOTI RAY, JCIT . DATE OF HEARING 09 .0 1 .2020 DATE OF PRONOUNCEMENT 29 .06.2020 ORDER PER SH. S.S. GODARA, JUDICIAL MEMBER : THIS ASSESSEES APPEAL FOR AY 2012-13 ARISES AGAINST THE ORDER DATED 09.04.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA IN APPEAL NO.10699/CIT(A)-2/2015-16 IN PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. THE ASSESSEE'S SOLE SUBSTANTIVE GRIEVANCE IN THE INSTANT APPEAL SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES' ACTION RESTRICTING ITS SECTION 80IC DEDUCTION CLAIM OF 27,24,02,458/- TO 27,16,80,866/- ONLY THEREBY RE- ALLOCATING OFFICE EXPENDITURE OF 7,21,592/- QUA ITS THREE UNITS; RESPECTIVELY. 3. THE ASSESSEE/COMPANY MANUFACTURES INDUSTRIAL TRACTORS, AUTOMOBILE GEARS AND SHAFTS. IT ADMITTEDLY OPERATES THREE UNITS AT RUDRAPUR, FARIDABAD AND KOLKATA HAVING ALLOCATED ADMINISTRATIVE HEAD OF ITS EXPENSES OF 7,80,012/-, 46,80,075/- AND 23,40,037/-; RESPECTIVELY AGGREGATING TO ITA NO. 1245/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. DEEPAK INDUSTRIES LTD. PAGE | 2 78,00,125/-. IT HAD ADOPTED 10:60:30 ALLOCATION AS PER REVENUE COLLECTION AS THE BENCHMARK. THE ASSESSING OFFICER'S ASSESSMENT ORDER RE-ALLOCATED THE SAME TO 8.95%, 53.7% AND 37.34%; UNIT-WISE RESPECTIVELY AS AFFIRMED IN THE CIT(A)'S ORDER UNDER CHALLENGE. 4. LEARNED DR HAS TAKEN AS TO PAGE 2 IN ASSESSMENT ORDER THAT THE ASSESSING OFFICER WENT BY THE UNIT-WISE REVENUE GENERATION ONLY AFTER NOTICING CERTAIN DEFICIENCIES IN ASSESSEE'S ALLOCATION. HE SEEKS TO PINPOINT THE ASSESSEE'S RUDRAPUR UNIT SHARE OF EXPENSES IS 17.23% AS AGAINST REVENUE GENERATION OF 7.23% ONLY. 5. WE FIND NO MERIT IN REVENUE'S FOREGOING STAND. CASE RECORDS INDICATE THAT BOTH THE LOWER AUTHORITIES HAD MADE A SIMILAR ESTIMATION OF ALLOCATION OF EXPENSES LEADING TO DISALLOWANCE OF 3 LAKHS QUA THE VERY ELIGIBLE UNIT AT RUDRAPUR IN AY 2010-11 WITHOUT REJECTING THE ASSESSEE'S BOOKS OF ACCOUNT. THIS TRIBUNAL'S ORDER IN ASSESSEE'S APPEAL NO. 2317/KOL/2016 DATED 26.04.2019 IN THE SAID EARLIER ASSESSMENT YEAR HOLDS THAT SUCH A RECORD IS NOT OPEN TO THE DEPARTMENT IN ABSENCE OF REJECTION OF BOOKS OF ACCOUNT. THE VERY FACTUAL POSITION CONTINUES IN THE IMPUGNED ASSESSMENT YEAR AS WELL WHEREIN THE LOWER AUTHORITIES, HAVE NOT REJECTED THE ASSESSEE'S BOOKS. WE THUS ADOPT JUDICIAL CONSTITUENCY AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE OF 7,21,592/- ARISING FROM RE-ALLOCATION OF ASSESSEE'S HEAD OF EXPENDITURE. 6. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BEING PRONOUNCED AFTER NINETY DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE FOREGOING PERIOD ITA NO. 1245/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. DEEPAK INDUSTRIES LTD. PAGE | 3 NEEDS TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DATED 14 TH MAY, 2020 . 7. IN THE RESULT, THIS ASSESSEE'S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.06.2020. SD/- SD/- (P.M. JAGTAP) (S.S.GODARA) VICE PRESIDENT JUDICIAL MEMBER DATE: 29.06.2020 BIDHAN COPY FORWARDED TO: 1. APPELLANT - M/S. DEEPAK INDUSTRIES LTD., 16, HARE STREET, BBD BAG, KOLKATA- 700 001. 2. RESPONDENT - DCIT, CIRCLE-6(1), KOLKATA. 3. CIT(A)-2, KOLKATA. (SENT THROUGH E-MAIL). 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL). TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES