Addl. CIT, Special Range- 8, New Delhi V. SC Johnson Products pvt. Ltd., New Delhi

ITA 1296/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6223 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2000-2001
• Appeal Filed On: 23-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80HHC; 80IB; 13; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DLEHI BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO. 1296/DEL/2018 ASSESSMENT YEAR: 2000-01 ADDL. CIT, SPCL. RANGE-8, VS. SC JOHNSON PRODUCTS PVT. LTD., NEW DELHI. (FORMERLY KNOWN AS KARAMCHAND APPLIANCES PVT. LTD.),BLOCK MARKET G.K.-II, NEW DELHI. PAN : AAACK1065G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. GAYASUDDIN ANSARI, SR. D R RESPONDENT BY: SH. K.M. GUPTA, ADVOCATE & MS. SHRUTI KHIMTA, A.R. DATE OF HEARING: 13/09/2021 DATE OF ORDER : 13/09/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 26.12.2017 PASSED BY T HE COMMISSIONER OF INCOME TAX (APPEALS)-28, NEW DELHI ('LD. CIT(A)') IN THE CASES OF SC JOHNSON PRODUCTS PVT. LTD. (THE ASSESS EE) FOR THE ASSESSMENT YEAR 2000-01, REVENUE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, E ARLIER KNOWN AS KARAMCHAND APPLIANCES PVT. LTD., WAS ENGAGED IN TH E BUSINESS OF MANUFACTURE AND SALE OF LIQUID MOSQUITO DESTROYER A PPARATUS AND BOTTLED LIQUID MOSQUITO REPELLENTS WITH THE BRAND NAME ALL OUT. DURING THE 2 FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2000 -2001, THE ASSESSEE CONDUCTED ITS BUSINESS THROUGH TWO UNITS LOCATED AT DISTRICT SOLOAN (H.P.) AND FROM SUCH OPERATIONS, INCURRED LOSS OF RS.1,37, 96,323/- FROM UNIT I AND PROFIT OF RS.19,59,74,392/- FROM UNIT-II. FOR THE A SSESSMENT YEAR 2000-01, THEY HAVE FILED THEIR RETURN OF INCOME ON 30.11.200 0 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/S. 80IB AND 80HHC OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT) IN RESPECT OF PROFITS OF UNIT -II, BUT RESTRICTED THE CLAIM TO THE GROSS TOTAL INCOME OF THE ASSESSEE IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 80A(2) OF THE ACT. BY ORDER DATED 28.03. 2002 PASSED U/S. 143(3) OF THE ACT, LEARNED ASSESSING OFFICER ACCEPTED THE SAME. 3. SUBSEQUENTLY, LEARNED ASSESSING OFFICER PROPOSED RECTIFICATION U/S. 154 OF THE ACT, BUT AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE, HE DROPPED THE SAME BY ORDER DATED 25.10.2005. 4. LEARNED ASSESSING OFFICER, HOWEVER, BY NOTICE DA TED 22.08.2005 ISSUED U/S. 148, INITIATED PROCEEDINGS U/S. 147 OF THE ACT. ASSESSEE FILED THE RETURN OF INCOME, BUT APPROACHED THE HONBLE HIGH C OURT OF DELHI, CHALLENGING THE ASSUMPTION OF JURISDICTION BY THE L D. ASSESSING OFFICER U/S. 147 OF THE ACT. ASSESSMENT U/S. 147/143(3) OF THE A CT WAS COMPLETE BY ORDER DATED 28.02.2006, RESTRICTING THE DEDUCTION U /S. 80IB TO THE EXTENT OF INCOME FROM PROFITS AND GAINS OF THE BUSINESS AS HA S BEEN PRESCRIBED IN THE PROVISIONS OF SECTION 80AB OF THE ACT AND THAT INTE REST INCOME OF RS.1,73,09,453/- SHOULD HAVE BEEN EXCLUDED FROM GRO SS TOTAL INCOME BEFORE ANY CLAIM OF DEDUCTION U/S. 80IB OF THE ACT. FURTHE R, LEARNED ASSESSING OFFICER, WHILE COMPUTING DEDUCTION U/S. 80IB, COMPU TED THE PROFITS ELIGIBLE FOR DEDUCTION AT RS.18,21,78,067/- INSTEAD OF RS.19 ,59,74,391/- WITHOUT GIVING ANY REASON THERE FOR AND THEREBY AN AMOUNT O F RS.1,73,09,543/- REPRESENTING INTEREST INCOME WAS HELD TO BE TAXABLE INCOME OF THE ASSESSEE. 3 5. AGGRIEVED BY SUCH AN ACTION OF THE LD. ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). DURING THE COURSE OF APPEAL PROCEEDINGS, AS COULD BE GATHERED FROM THE IMPUGNED ORDER VIDE PARAGRAPH NO. 4, THE WRIT PETITION FILED BY THE ASSESSEE, CHA LLENGING THE REOPENING OF THE ASSESSMENT PROCEEDINGS, WAS ALLOWED BY ORDER DA TED 16.11.2017, QUASHING THE REASSESSMENT NOTICE. LEARNED CIT(A) WH ILE TAKING NOTE OF THE ORDER OF HONBLE JURISDICTIONAL HIGH COURT AND WHIL E RESPECTFULLY FOLLOWING THE SAME, ALLOWED THE APPEAL OF THE ASSESSEE. 6. REVENUE IS, THEREFORE, IN APPEAL BEFORE US CONTE NDING THAT THE REVENUE PREFERRED REVIEW PETITION AGAINST THE ORDER S OF HONBLE HIGH COURT AND THEREFORE, THE ISSUE REQUIRES ADJUDICATION. 7. IT IS CONTENDED BY THE LD. AR THAT THE REVIEW PE TITION FILED BY THE REVENUE WAS DISMISSED BY ORDER DATED 28.09.2018 IN RE 86/2018 BY THE HONBLE HIGH COURT. SHE FURTHER SUBMITTED THAT HON BLE SUPREME COURT BY ORDER DATED 04.02.2019 ALSO DISMISSED THE SLP FILED AGAINST THE ORDERS OF THE DELHI HIGH COURT. SHE, THEREFORE, SUBMITS THAT NOTHING REMAINS TO BE ADJUDICATED IN THIS MATTER AND THE ORDER OF THE LD. CIT(A) DOES NOT SUFFER ANY PERVERSITY. 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE ON EITHER SIDE. IT REMAINS AN UNDISPUTED FACT THAT CHALLENGING THE NOTICE U/S. 148 OF THE ACT REOPENING THE ASSESSMENT PROCEEDINGS , ASSESSEE PREFERRED WRIT PETITION BEFORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT VIDE ORDER DATED 16.11.2017 QUASHED THE REASSESSMENT NOT ICE AND THE LD. CIT(A) AT PARAGRAPH NO. 4 & 5 OF HIS ORDER NOTED THE OBSER VATIONS OF THE HONBLE HIGH COURT. THERE IS ALSO NO DISPUTE THAT BY ORDER DATED 28.09.2018, HONBLE HIGH COURT DISMISSED THE REVIEW PETITION OF THE REV ENUE AND THE HONBLE 4 SUPREME COURT DISMISSED THE SLP AGAINST ORDER DATED 16.11.2017 IN WP(C) 422/2006 PASSED BY HONBLE DELHI HIGH COURT. 9. IT IS, THEREFORE, CLEAR THAT THE QUASHING OF THE NOTICE OF RE-ASSESSMENT ATTAINED FINALITY. SINCE THE LD. CIT(A) IS BOUND TO FOLLOW, AS HE DID IN THIS CASE, THE ORDERS OF THE HIGHER FORUM, IT CANNOT BE SAID THAT THE FINDINGS OF THE LD. CIT(A) ARE ILLEGAL OR IRREGULAR. WE ARE ALS O BOUND BY THE ORDERS OF THE HONBLE HIGH COURT. SO WHILE RESPECTFULLY FOLLOWING THE ORDER OF HONBLE HIGH COURT IN WP(C) 422/2016, WE FIND THAT THE GROU NDS OF APPEAL ARE DEVOID OF MERITS AND ACCORDINGLY, WE DISMISS THE SA ME. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 13 TH DAY OF SEPTEMBER, 2021. (ANADEE NATH MISSHRA) (K. NARSIMHA CHAR Y) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/09/2021 AKS