M/s. Jakson and Co., New Delhi V. ACIT, New Delhi

ITA 350/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7437 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 20-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Section: 153A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A .NO.350/DEL/2014 ASSESSMENT YEAR-2010-11 JAKSON AND CO. 47, G.B. ROAD, NEW DELHI-110006 (PAN: AAAFJ441N) (APPELLANT) VS ACIT, CENTRAL CIRCLE-25, NEW DELHI. (RESPONDENT) APPELLANT BY SHRI NIREN GUPTA, CA RESPONDENT BY SHRI RAMAN KANT GARG, SR.DR ORDER PER BEENA A. PILLAI, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-I, NEW DELHI DATED 05.12.2013 FOR TH E AY 2010-11 ON THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE C1T (A) ON WRONG INTERPRETATION OF SEC 153 A HAS ERRED IN CONFIRMING THE ADDITIONS MADE BY A.O. WHICH ARE NOT BASED ON ANY MATERIAL FOUND IN T HE SEARCH OR CONCEALED INCOME. THAT THE ADDITION NOT BEING SUSTAINABLE IN LAW BE DELETED. 2. (A) THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE U/S 80IB IN RESPECT OF SCRAP SALES DATE OF HEARING 06.01.2016 DATE OF PRONOUNCEM ENT 06.01.2016 I.T.A.NO.350/DEL/2014 ASSESSMENT YEAR 2010-11 2 CALCULATED AT RS. 450825, CONTRARY TO PROVISIONS OF LAW. (B) THAT IT MAY BE HELD THAT SALE OF SCRAP GEN ERATED IN THE MANUFACTURING PROCESS IS PROFIT AND GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING ENTITLED TO DEDUCTION U/S 801B. 2. GROUND NO.1 OF THE ASSESSEES APPEAL IS AGA INST THE VALIDITY OF INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE INCOME-TAX ACT, 1961. HOWEVER, NO SPECIFIC ARGUMENTS WERE ADVA NCED AT THE TIME OF HEARING BEFORE US AGAINST THE VALIDITY OF T HE ISSUE OF NOTICE UNDER SECTION 153A. WE, THEREFORE, TREAT GROUND NO. 1 AS NOT PRESSED AND, ACCORDINGLY, REJECT THE SAME. 3. GROUND NO. 2 OF THE ASSESSEES APPEAL IS WITH REGARD TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF SCRAP SALES. IT IS STATED BY THE LEARNED COUNSEL THAT DURING THE YEARS UNDER CONSIDERATION, THE ASSESSING OFFICER ALLOWED DEDUCT ION UNDER SECTION 80IB BUT WHILE COMPUTING THE AMOUNT, HE EXC LUDED THE SCRAP SALES FROM THE PROFIT OF THE INDUSTRIAL UNDER TAKING. HE STATED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. SADHU FORGING LTD. [2011] 336 ITR 444 (DE LHI). IT IS FURTHER SUBMITTED BY THE LD.AR THAT THIS TRIBUNAL I N ASSESSEES OWN CASE HAVE CONSIDERED THIS ISSUE ON IDENTICAL FA CTS FOR ASSESSMENT YEAR 2006-07, 2007-08,2008-09 AND 2009-1 0 IN ITA I.T.A.NO.350/DEL/2014 ASSESSMENT YEAR 2010-11 3 NOS. 6182, 6183/DEL/2013 AND 1238, 1239/DEL/2013 VI DE ORDERS DATED 20.12.2013 AND 02.06.2015 RESPECTIVELY . COPIES OF THE SAID ORDERS HAS BEEN PLACED ON RECORD BEFORE US . 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON TH E ORDERS OF AUTHORITIES BELOW AND STATED THAT THE FACTS OF THE ASSESSEES CASE ARE DIFFERENT THAN THE FACTS BEFORE THE HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF SADHU FORGING LTD. (SUPRA). 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS O F BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AF TER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, WE AGREE WITH THE CONTENTION OF THE LEARNED C OUNSEL FOR THE ASSESSEE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF SADHU FORGING LTD. (SUPRA), WHEREIN THEIR LORDSHIPS OF JURISDICTIONAL HIGH COURT HELD AS UNDER:- THE RECEIPTS FROM SALE OF SCRAP BEING PART AND PARCEL OF THE ACTIVITY AND BEING PROXIMATE THERETO WOULD ALSO BE WITHIN THE AMBIT OF GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80- IB. 6. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, AND THE ORDERS PASSED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y 2006-07, 2007-08,200 8-09 AND I.T.A.NO.350/DEL/2014 ASSESSMENT YEAR 2010-11 4 2009-10, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DEDUCTION UNDER SECTION 80IB AFTER TAKING INTO ACCO UNT THE SCRAP SALES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.01. 2016 SD/- SD/- (S.V. MEHROTRA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:06 TH JANUARY 2016 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSTT. REGISTRAR