Sh. Vijay Kumar Batra, Chandigarh V. ITO, Chandigarh

ITA 241/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8937 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 11-08-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: JASPAWAT SINGH GILL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.241/CHD/2016 (ASSESSMENT YEAR : 2012-13) SH.VIJAY KUMAR BATRA, VS. THE INCOME TAX OFFICER, PROP. M/S ADLEY FORMULATIONS, WARD 3(4), SCO-915, NAC, MANIMAJRA, CHANDIGARH. CHANDIGARH. PAN: AEJPB0879B (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI ASHOK GOYAL & JASPAWAT SINGH GILL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 11.08.2016 DATE OF PRONOUNCEMENT : 21.11.2016 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, CHANDIGARH DATED 14.1.2016 FOR ASSESSM ENT YEAR 2012-13. 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDER : UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW; 1. THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FAC TS IN RESTRICTING THE DEDUCTION CLAIMED U/S 80IC AT 25% AS AGAINST 100% CLAIMED, WHICH IS UNJUSTIFIED AS THE 2 ASSESSEE HAS ADMITTEDLY FULFILLING ALL THE CONDITIONS SO STATED IN THE ACT. . 3. BRIEF FACTS OF THE CASE ON THIS ISSUE ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT,1961 (IN SHORT THE ACT ) AMOUNTING TO RS.2,23,47,977/-. THE ASSESSEE IS ENGAGED IN THE MANUFACTURING OF MEDICINES AND, THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE WAS INSTALLE D AND COMMENCED PRODUCTION IN FINANCIAL YEAR 2005 RELEVANT TO THE ASSESSMENT YEAR 2006-07. THE ASSESSEE CLAIMED 100% DEDUCTION OF ITS PROFITS FOR THE FIRST 5 ASSESSMENT YEARS BETWEEN 2006-07 TO 2010-11. THE IMPUGNED ASSESSMENT YEAR BEING THE 6 TH YEAR FROM COMMENCEMENT OF PRODUCTION, THE ASSESSEE AGAIN CLAIMED DEDUCTION UNDER SECTION 80IC OF THE ACT @ 100% OF ITS PROFITS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING ON ACCOUNT OF SUBSTANTIAL EXPANSION UNDERTAKEN OF ITS INDUSTRIAL UNDERTAKING. THE ASSESSING OFFICER RESTRICTED THE CLAIM OF THE DEDUCTION TO THE EXTENT OF 25% OBSERVING THAT FROM 6 TH YEAR TO 10 TH ASSESSMENT YEAR, THE ASSESSEE WAS ENTITLED TO DEDUCTION @ 25% ONLY. 4. THE LEARNED CIT (APPEALS) UPHELD THE RESTRICTIO N OF DEDUCTION TO THE EXTENT OF 25% OF THE ELIGIBLE P ROFITS FOLLOWING THE DECISION OF THE HON'BLE I.T.A.T., CHA NDIGARH BENCH IN THE CASE OF HYCRON ELECTRONICS IN ITA NO.798/CHD/2012. 3 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND THE LEARNED D.R. RELIED UPON THE OR DER OF THE LEARNED CIT (APPEALS). 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. WE FIND NO INFIRMITY IN THE ORDER IN THE ORDER OF T HE LEARNED CIT (APPEALS). THE LEARNED CIT (APPEALS) HA S RIGHTLY RESTRICTED THE DEDUCTION TO 25% OF THE ELIG IBLE PROFIT RELYING UPON THE ORDER OF THE CHANDIGARH BEN CH OF THE ITAT IN CASE OF HYCRON ELECTRONICS VS. ITO IN I TA NO. 798/CHD/2012 WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT AS PER THE PROVISION OF SECTION 80-IC, 100% DEDUCTI ON OF PROFIT WAS TO BE ALLOWED FOR THE FIRST FIVE YEARS I N CASE OF UNITS SITUATED IN THE STATE OF HIMACHAL PRADESH AND THEREAFTER @25% FOR ANOTHER FIVE YEARS BOTH ON THE NEW UNITS OR EXISTING UNITS WHERE SUBSTANTIAL EXPANSION WAS CARRIED OUT. SINCE AS PER THE FACTS OF THE PRESENT CASE THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION OF 100% OF I TS PROFIT IN THE FIRST FIVE YEARS I.E. FOR ASSESSMENT YEAR 2005-06 TO 2009-10, THE ASSESSEE WAS ENTITLED TO CL AIM DEDUCTION ONLY OF 25% OF ITS ELIGIBLE PROFIT IN THE IMPUGNED YEAR. 7. IN VIEW OF THE SAME WE UPHOLD THE ORDER OF THE LD. CIT(A) RESTRICTING THE DEDUCTION UNDER SECTION 80IC TO 25% OF THE ELIGIBLE PROFIT. 4 8. GROUND NO.2 OF THE APPEAL OF THE ASSESSEE READS AS UNDER : 2. THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY ADDING MISCELLANEOUS INCOME OF RS.1,14,000/- IN RETURNED INCOME WHEREAS THE ASSESSEE HAS ALREADY CONSIDERED IT SEPARATELY WHILE COMPUTING INCOME U/S 80IC, WHICH IS UNJUSTIFIED. 9. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD INCLUDED AN AMOUNT OF RS.1,14,000/- AS INCOME UNDER THE HEAD 'MISC. INCOME' FOR THE PURPOSE OF CLAIMING DED UCTION U/S 80IC OF THE ACT. THE ASSESSING OFFICER DID NOT CONSIDER THIS AMOUNT SHOWN UNDER THE HEAD MISC. IN COME TO BE PART OF THE PROFIT FOR THE PURPOSE OF COMPUTI NG DEDUCTION UNDER SECTION 80IC OF THE ACT. 10. THE LEARNED CIT (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER. 11. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE ARGUED THAT THE ASSESSEE HAD NOT CLAIMED ANY DEDUCT ION UNDER SECTION 80IC OF THE ACT ON THE MISC. INCOME O F RS.1,14,000/- AND, THEREFORE, THERE WAS NO QUESTION OF MAKING ANY ADDITION ON ACCOUNT OF THE SAME. THE LE ARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO VARI OUS DOCUMENTS ENCLOSED IN ITS PAPER BOOK BEING TRADING & PROFIT & LOSS ACCOUNT FOR THE IMPUGNED YEAR AND COMPUTATION OF INCOME. BUT IT WAS NOT EVIDENT FROM THE SAME THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION UN DER SECTION 80IC OF THE ACT ON THE RENTAL INCOME. SINC E ALL 5 THE FACTS PERTAINING TO THE PRESENT CLAIM OF THE AS SESSEE ARE NOT THERE BEFORE US, NOR IS THERE ANY CATEGORIC AL FINDING BY THE LOWER AUTHORITIES TO THE EFFECT THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IC O F THE ACT ON THE SAME, WE CONSIDER IT FIT, IN THE INTERES T OF JUSTICE, TO RESTORE THE ISSUE BACK TO THE ASSESSING OFFICER TO RE-EXAMINE THE CLAIM OF THE ASSESSEE THAT DEDUCT ION UNDER SECTION 80IC OF THE ACT HAD NOT BEEN CLAIMED ON THE RENTAL INCOME OF RS.1,14,000/-, IF FOUND SO, NECESS ARY RELIEF BE GRANTED TO THE ASSESSEE. FURTHER, THE AS SESSEE MAY FILE ALL NECESSARY DOCUMENTS IN SUPPORT OF ITS CLAIM. THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST NOVEMBER, 2016 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH