M/S Kakkar Complex Steels Pvt .Ltd, Hoshiarpur V. The Addl. Commissioner of Income Tax, Jalandhar

ITA 168/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2501 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Keywords: Earning of tax free income; Revised return; Revenue expenditure; Capital expenditure
• Section: 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 168(ASR)/2014 ASSESSMENT YEAR: 2009-10 M/S. KAKKAR COMPLEX STEELS PVT. LTD. 7KM, JALANDHAR ROAD, HOSHIARPUR. PAN:AAACK9865A VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE III, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA ( CA.) RESPONDENT BY: SH. R.K. SHARDA (DR .) DATE OF HEARING: 22.12. 2015 DATE OF PRONOUNCEMENT: 14.01.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT, JALANDHAR, DATED 10.01.2014 FOR THE ASST. YEAR 2009-10. 2. THE FOLLOWING GROUNDS OF APPEAL HAS BEEN TAKEN B Y THE ASSESSEE. 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN HOLDING THAT AO WAS JUSTIFIED IN DENYING THE REVISED CLAIM OF DE DUCTION U/S 10B OF THE INCOME TAX ACT 1961 IN THE ABSENCE OF REVISE D RETURN. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN HOLDING THAT THERE IS NO DIFFERENCE IN THE REVISED CLAIM OF DEDU CTION AND FRESH CLAIM OF DEDUCTION AND EVEN THE REVISED CLAIM OF DE DUCTION CAN ONLY BE MADE BY FILING REVISED RETURN. ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 2 THAT WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE HO NBLE TRIBUNAL IS EMPOWERED TO ENTERTAIN THE REVISED CLAIM OR FRESH O F DEDUCTION AS PER ITS INHERENT POWER U/S 254 OF THE INCOME TAX AC T 1961 AS PRONOUNCED BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD. VS.CIT(2006) 284 ITR 323 (SC). 4 THAT THE ORDER OF THE CIT APPEAL IS BAD IN LAW AN D ON FACTS. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFAC TURING, OF ALLOY STEELS AND IT HAS TWO UNITS, ONE CALLED AS MAIN UNI T AND THE OTHER EXPORT ORIENTED UNIT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DECLARED THE INCOME OF RS.3,43,31,369/- AS EXEMPT U /S 10B OF THE I.T. ACT, 1961 IN RESPECT OF ITS EXPORT ORIENTED UNIT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND DURING THE A SSESSMENT PROCEEDINGS THE CLAIM U/S 10B WAS REVISED VIDE WRIT TEN SUBMISSIONS DATED 20.10.2011 AT RS.3,45,81,884/-. THE ASSESSING OFFICER RELYING UPON THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE (INDIA) LTD VS. CIT 284 ITR 323 DID NOT ALLOW THE CLAIM FOR DEDUCTION U/S 10B AS HE HELD THAT REVISED CLAIM OF DEDUCTION U/S 10B WAS MADE BY A LETTER DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH W AS NOT ALLOWABLE AS THE CLAIM WAS NOT REVISED BY MEANS OF A REVISED RET URN. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE CIT(A ) AND CIT(A) UPHELD THE ORDER OF ASSESSING OFFICE DENYING THE DEDUCTION U/S 10B BY HOLDING AS UNDER: I HAVE CONSIDERED THE OBSERVATION OF THE ASSESSING OFFICER AS MADE IN THE ASSESSMENT ORDER AND REMAND REPORT, I HAVE ALSO CON SIDERED THE WRITTEN ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 3 SUBMISSION AND COUNTER COMMENTS OF THE ASSESSEE. I HAVE FURTHER CONSIDERED THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS BY THE ASSESSEE IN THE CASES OF GOETZE (INDIA) LTD. (SUPRA) AND CHICAGO PNEUMATICS INDIA LTD VS. DCIT 1 5 SOT 252 (MUM.) I HAVE AGAIN CONSIDERED CIRCULAR NO.14(XL-35) DATED 1 1.04.1955 RELIED UPON BY THE ASSESSEE AND OTHER MATERIAL BROUGHT ON RECORD. AFTER CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, REMAND REPOR T, WRITTEN SUBMISSIONS COUNTER COMMENTS, JUDICIAL PRONOUNCEMENTS RELIED UP ON BY THE ASSESSING OFFICER AND THE ASSESSEE, CIRCULAR DATED 11.04.1955 AND OTHER MATERIAL BROUGHT ON RECORD, I AM OF THE OPINION THAT THERE I S NO DIFFERENCE IN THE REVISED CLAIM OF DEDUCTION AND FRESH CLAIM OF DEDUC TION. IN MY CONSIDERED OPINION, EVEN THE REVISED CLAIM OF DEDUCTION CAN ON LY BE MADE BY FILING THE REVISED RETURN. AS THE ASSESSEE HAS NOT MADE HIGHER CLAIM OF DEDUCTION BY FILING THE REVISED RETURN OF INCOME, THE ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE REVISED CLAIM OF DEDUCTION U/S 10B OF THE INCOME TAX ACT, 1961. THE DEDUCTION OF THE HONBLE APEX COURT IN TH E CASE OF GOETZE (INDIA) LTD. DULY SUPPORTED THE STAND OF THE ASSESSING OFFI CER. 6.5 IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND MORE PARTICULARLY KEEPING IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) WHICH HAS B EEN RELIED UPON BY THE ASSESSING OFFICER, I AM OF THE OPINION THAT THE ASS ESSING OFFICER IS FULLY JUSTIFIED IN DENYING THE REVISED CLAIM OF DEDUCTION U/S 10B OF THE INCOME TAX ACT, 1961 IN THE ABSENCE OF REVISED RETURN. THE REFORE, THE ACTION OF THE ASSESSING OFFICER IS CONFIRMED. IN THE RESULT, THE GROUNDS OF APPEAL NO. 3,4,&5 TAKEN BY THE ASSESSEE ARE DISMISSED. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR, AT THE OUTSET, SUBMITTED THAT TH E CASE LAW RELIED UPON THE ASSESSING OFFICER AND LEARNED CIT(A) IS NO T APPLICABLE TO THE FACTS OF THE PRESENT CASE AS IN THAT CASE LAW RELIE D UPON BY THE AUTHORITIES THERE WAS A FRESH CLAIM MADE BY WAY OF A LETTER AND WHERE ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 4 THE HONBLE SUPREME COURT HAS HELD THAT FRESH CLAIM CANNOT BE MADE UNLESS BY FILING A REVISED RETURN OF INCOME. HE SUB MITTED THAT ASSESSEE HAD MADE A CLAIM U/S 80IB IN THE ORIGINAL RETURN OF INCOME AND IT WAS ONLY THE AMOUNT OF CLAIM WHICH WAS REVISED. THE LEA RNED AR SUBMITTED THAT THE HONBLE SUPREME COURT HAD CLEARLY HELD THA T APPELLANT AUTHORITIES ARE TO ALLOW THE CORRECT CLAIM OF ASSES SEE AND HE FURTHER SUBMITTED THAT THERE WAS A CIRCULAR NO. 14(XL-35) D ATED 11.04.1955, WHEREIN IT HAS BEEN STATED THAT ASSESSING OFFICER H AS TO HELP THE ASSESSEE IN CLAIMING AND SECURING LAWFUL CLAIM. THE LEARNED AR IN THIS RESPECT RELIED UPON THE CASE LAW OF HONBLE TRIBUNA L, DELHI BENCH IN THE CASE OF DCIT VS. MICRON INSTRUMENTS PVT. LTD., FOR THE PROPOSITION THAT INTEREST NOT CLAIMED IN THE RETURN OF INCOME WAS AL LOWABLE AS AN EXPENDITURE EVEN IF CLAIMED DURING THE COURSE OF AS SESSMENT PROCEEDINGS. 6. THE LEARNED DR ON THE OTHER HAND, HEAVILY RELIED UPON THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT ASSESSEE HAD CLAIMED INCOME FROM EXPORT ORIENTED UNIT AS E XEMPT U/S 80IB AS IS APPARENT FROM PAPER BOOK PAGE 9 TO 11 WHERE THE AUD ITOR HAS CALCULATED THE CLAIM OF DEDUCTION AND IT WAS FILED ALONG WITH RETURN OF INCOME. THE CLAIM IN THIS RESPECT WAS MADE AT 3,43,31,369/-. W E FURTHER FIND THAT IN ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 5 THE COMPUTATION OF INCOME PLACED AT PAPER BOOK PAGE 7, THE ASSESSEE HAD DULY CLAIMED THE EXEMPTION U/S 10B FOR RS.3,43, 31,369/-. 8. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE ASSESSEE GOT THE REVISED CALCULATION OF EXEMPT INCOME AS THERE WERE CERTAIN MISTAKES IN THE COMPUTATION AS PER EARLIER AUDIT REPORT. THEREF ORE, IT CANNOT BE SAID THAT THE CLAIM WAS NOT MADE IN THE ORIGINAL RETURN OF INCOME. IT WAS ONLY THE VARIATION IN THE AMOUNT OF CLAIM WHICH HAD OCCU RRED DUE TO A CALCULATION MISTAKE AS INDICATED BY AUDITOR IN HIS REVISED AUDIT REPORT PLACED AT PAPER BOOK PAGE 14. THE AUDITOR IN REMARK S COLUMN HAS SUBMITTED AS UNDER: THE REVISED COMPUTATION OF EXEMPTION U/S 10B HAD B EEN MADE DUE TO THE FACT THAT THE TOTAL PROFIT OF UNDERTAKING AT SERIAL NO. 12 WAS INADVERTENTLY TAKEN AT RS.3,53,97,171/- AS AGAINST THE CORRECT AMOUNT OF RS.3,56,55,464/-. THE REVISED REPORT U/S 10B IS GIVEN BY INCORPORATING THE CORRECT FIGURE OF PROFIT. THEREFORE, IT IS NOT A CASE WHERE THE CLAIM WAS NO T MADE IN THE ORIGINAL RETURN OF INCOME AND THEREFORE, THE CASE LAW OF GOE TZE (INDIA) LTD. VS. CIT 284 ITR 323 (SC) RELIED UPON BY THE AUTHORITIES BEL OW IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. CIRCULAR NO. 14 (XL-35) DATED 11.4.1955 ISSUED BY CBDT DIRECTS THE ASSESSIN G OFFICER TO ASSIST THE TAX PAYERS IN THE DETERMINATION OF CORRECT INCO ME. THE CRUX OF DIRECTION OF SAID CIRCULAR IS THAT WHERE THERE IS A RELIEF OF EXEMPTION DUE ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 6 TO ASSESSEE THE SAME MUST BE GRANTED TO THE ASSESSE E EVEN IS THE ASSESSEE OMITS TO CLAIM THE SAME. 9. IN THE PRESENT CASE THE ASSESSEE HAD DUL Y CLAIMED EXEMPTION U/S 10B AND IT ONLY RECALCULATED THE CORRECT AMOUNT THE REFORE RELIANCE OF THE AUTHORITIES BELOW ON THE CASE LAW OF GOETZE INDIA L TD. (SUPRA) IS MISPLACED. THE HONBLE DELHI TRIBUNAL IN THE CASE O F DCIT VS. MICRON INSTRUMENTS (PVT.) LTD. AFTER CONSIDERING THE CASE LAW OF GOETEZE INDIA LTD. VIDE ITS ORDER DATED 27.1.2015 HAS ALLOWED RE LIEF TO ASSESSEE ON ACCOUNT OF INTEREST WHICH WAS NOT CLAIMED IN THE RE TURN OF INCOME BY HOLDING AS UNDER: 7 UNDER PECULIAR FACTS AND CIRCUMSTANCES OF THE PR ESENT CASE AND THE CONCLUSION OF THE CIT(A), AS MENTIONED HEREINABOVE, IT IS NOT IN DISPUTE THAT THE ASSESSEE PAID INSTALLMENT TOWARDS CONVERSION CH ARGES OF LAND AND THE ASSET WAS ALREADY IN EXISTENCE AND THE BUSINESS OF THE ASSESSEE WAS RUNNING FROM THE VERY SAME FACTORY PREMISES. LD. CO UNSEL OF THE ASSESSEE FAIRLY ACCEPTED THAT THE ASSESSEE NEITHER MADE ANY CLAIM IN THE ORIGINAL RETURN NOR FILED ANY REVISED RETURN AND THE INTERES T WAS ALSO NOT FOUND PLACED IN THE P&L ACCOUNT BUT THE ASSESSEE PRESSED HIS CLAIM BY WAY OF LETTER FILED BEFORE THE AO DURING THE ASSESSMENT PR OCEEDINGS. IN VIEW OF DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZ E (INDIA) LTD. VS. CIT (SUPRA), THE AO IS NOT EMPOWERED TO ENTERTAIN ANY C LAIM OUT OF RETURN OF INCOME WHICH COULD NOT FIND PLACE IN THE ORIGINAL R ETURN OF INCOME OR OTHERWISE THAN BY REVISED RETURN BUT IN THE SAME DE CISION, HONBLE APEX COURT CONSIDERED OPINION THAT SINCE THE ASSET I.E. FACTORY PREMISES WAS ALREADY IN USE OF ASSESS, THEREFORE, THE INTEREST P AID ALONG WITH INSTALLMENT TOWARDS CONVERSION OF CHARGES OF LAND CANNOT BE TRE ATED AS CAPITAL EXPENDITURE AND THE SAME CANNOT BE HELD TO BE CAPIT AL EXPENDITURE. THUS, WE ARE OF THE OPINION THAT THE CIT(A0 WAS RIGHT IN HOLDING THAT THE INTEREST EXPENDITURE CANNOT BE CAPITALIZED AND THE SAME WAS ALLOWABLE AS REVENUE EXPENDITURE. ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) WAS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE ON THIS ISSUE AND WE ARE UNABLE TO SEE ANY AMBIGUITY, INFIRMITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ITA NO. 168(ASR)/2014 ASST. YEAR 2009-10 7 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE AR E NOT IN AGREEMENT WITH THE FINDINGS OF LEARNED CIT(A) AND WE CANCEL T HE ORDER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW TH E CLAIM OF ASSESSEE U/S 10B OF THE ACT. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:14.01.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.