Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 8210 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-03-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2012-2013
Appeal Filed On
31-01-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 201/CHD/2017 ASSESSMENT YEAR: 2012-13 M/S PHARMA CHEMICO LABORATORIES, VS ITO, DEONGHAT, PO SAPROON, SOLAN. DISTT. SOLAN. PAN: AAKFP4549D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGA RWAL, CA RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 22.03.2017 DATE OF PRONOUNCEMENT : 22.03.2017 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 24.10.2016 FOR ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS: I. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE COMMISSIONER (APPEALS) IS NOT JUSTIFIED IN TREATING THE INSTANT YEAR AS THE 7 TH YEARS OF ITS CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT , 1961 AND THEREBY ALLOWING THE DEDUCTION @ 25% ONLY TO THE TU NE OF RS 297345/-AND DISALLOWING THE REMAINING DEDUCTION CLAIMED TO THE TUNE OF RS 890235/-. FACT OF THE MATTER IS THAT AFTER SUBSTANTIAL EXPANSIO N IN THE FINANCIAL YEAR 2010-11 THIS IS THE 2 ND YEAR OF THE CLAIM UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961 AND AS SUCH 100% OUGHT TO HAVE BEEN ALLOWED. AS THE FACTS OF THE PRESENT CASE ARE ANALOGOUS TO THE FACTS OF THE CASE DECIDED BY THE ITAT, CHANDIGARH NAMELY M/S INDO FAR M EQUIPMENT LIMITED II. THAT THE LD COMMISSIONER (APPEALS) IS NOT JUSTIF IED IN HOLDING THAT THE RECEIPT OF RS 17078/- ON ACCOUNT OF INTERE ST, APPROVAL CHARGES AND PETTY AMOUNTS WRITTEN OFF WAS NOT ATTRIBUTABLE FROM THE MANUFACTURING BUSINESS OF THE ASSESSEE AND THEREBY DISALLOWING DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT , 1961. THE SAME HAS LED TO AN ADDITION OF RS 17078/- TO THE TAXABLE INCOME OF THE ASSESSEE. III. THAT THE ORDER OF THE LD COMMISSIONER (APPEAL S) IS BAD IN LAW AND FACTS. 2. I HAVE HEARD LD. REPRESENTATIVES BOTH THE PARTIE S AND PERUSED THE ORDERS OF AUTHORITIES BELOW. THE APPEAL IS TIME 2 BARRED BY 33 DAYS. THE ASSESSEE IN APPLICATION FOR CONDONATION DELAY EXPLAINED THAT PROPRIETOR SHRI. CHIRANJEEV SE THI WAS ILL. MEDICAL CERTIFICATE FILED. THE DELAY MAY BE CONDONE D. CONSIDERING EXPLANATION OF ASSESSEE, I AM SATISFIED THAT DELAY IN FILING APPEAL IS NOT INTENTIONAL. DELAY IN FILING OF APPEAL IS CO NDONED. 3. ASSESSEE FIRM E-FILED ITS RETURN OF INCOM E DECLARING NIL INCOME ON 24.09.2012 AFTER CLAIMING DEDUCTIO N U/S 80IC AMOUNTING TO RS.12,06,4617-. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. ASSESSEE FIRM DERIVES INCOME FROM MAN UFACTURING OF PHARMACEUTICAL PRODUCTS I.E. INJECTABLES, LIQUID S AND TABLETS. 4. THE ASSESSEE STARTED ITS MANUFACTURING ACTIVITY/ OPERATION IN 1972. THE ASSESSEE MADE SUBSTANTIAL EXPANSION AS ON 24.8.2005 AND ACCORDINGLY CLAIMED INITIAL ASSESSMEN T YEAR FOR CLAIM OF DEDUCTION U/S 80IC OF THE ACT AS A.Y. 2006 -07. THE ASSESSEE FURTHER MADE SUBSTANTIAL EXPANSION IN FINA NCIAL YEAR 2010-11 RELEVANT TO ASSESSMENT YEAR 2011-12. THE AS SESSEE HAD ALREADY CLAIMED DEDUCTION U/S 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 NOTICED THAT THE ASSESSEE FIRM HAD AGAIN CLAIMED 100% DEDUCTION AGAINST ELIGIBLE PROFITS IN THE RELE VANT 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 ASSESSING OFFICER, FOR THE DETAILED REASONS MENTION ED IN THE ASSESSMENT ORDER HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IC ONLY @ 25% AS AGAINST THE CLAIM OF 100% MA DE BY THE ASSESSEE. 5. A.O. FURTHER OBSERVED THAT ASSESSEE HAS SHOWN RE CEIPT OF RS.452/- UNDER THE SUB HEAD 'INTEREST RECEIVED', RS .16,404/- ON ACCOUNT OF APPROVAL CHARGES, AND RS.222/- PETTY AMO UNT WRITTEN OFF AND CLAIMED DEDUCTION U/S 80IC ON THESE RECEIPT S. THE A.O. MADE ADDITION OF RS.17,078/- BY HOLDING THAT THE IN COME WAS NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING. HE RELIED ON THE 3 DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LI BERTY INDIA 317 ITR 218 AND HELD THAT DEDUCTION U/S 801C WILL NOT BE AVAILABLE TO THE ASSESSEE AS THERE IS NO NEXUS OF F IRST DEGREE BETWEEN ABOVE MENTIONED INCOME AND MANUFACTURING AC TIVITIES. 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/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 22 ND MARCH,2017. *SANJEEV* COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD
