M/s Swastik Wire Product, Baddi V. ITO, Baddi

ITA 397/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77178 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 16-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: RAKESH GUPTA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.397 /CHD/2014 ASSESSMENT YEAR : 2010-11 M/S SWASTIK WIRE PRODUCT, VS. THE INCOME TAX OF FICER, PLOT NO.65, EPIP, PHASE 1, BADDI. PHASE 1, JHARMAJRI, BADDI. PAN: ABGFS3429J AND ITA NO.398 /CHD/2014 ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, VS. M/S SWASTIK WIRE PR ODUCT, BADDI. PLOT NO.65, EPIP, PHASE 1, PHASE 1, JHARMAJRI, BADDI. PAN: ABGFS3429J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAKESH GUPTA DEPARTMENT BY : SHRI J.S.NAGAR, DR DATE OF HEARING : 01.07.2014 DATE OF PRONOUNCEMENT : 15.07.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REV ENUE ARE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S), SHIMLA DATED 27.1.2014 RELATING TO ASSESSMENT YEAR 2010-11 AGAI NST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT). 2 2. THE CROSS APPEALS FILED BY THE ASSESSEE AND REVE NUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO.397/CHD/2014 HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL : 1. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDIT ION OF RS.4,03,130/- BY DISALLOWING DEDUCTION U/S 80IC ON THE INTEREST RECEIVED FROM THE CUSTOMERS ON DELAYED PAY MENT. 2. IN VIEW OF ALL THESE AND SUCH OTHER GROUNDS, WHI CH MAY BETAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEA SE BE ALLOWED AND JUSTICE BE RENDERED. 4. THE REVENUE IN ITA NO.398/CHD/2014 HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A)HAS ERRED IN ALLOWING THE DEDUCTION OF RS.5,85,66,698/- TO THE ASSESSEE WHICH WAS DISALLOW ED BY THE A.O. U/S 80IC OF INCOME TAX ACT, 1961. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROU ND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 5. THE ONLY ISSUE RAISED IN THE APPEAL FILED BY THE REVENUE IS AGAINST THE DENIAL OF DEDUCTION UNDER SECTION 80IC OF THE ACT ON INTEREST RECEIVED FROM CUSTOMERS ON DELAYED PAYMENT. 6. THE REVENUE IS AGGRIEVED BY THE ALLOWANCE OF DED UCTION UNDER SECTION 80IC OF THE ACT ON THE PROCESS OF WIRE DRAW ING CARRIED ON BY THE ASSESSEE. 7. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE ISSUE RAISED IN THE APPEAL FILED BY THE REVENUE IS COVERED BY TH E ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1304/CHD/ 2012 RELATING TO ASSESSMENT YEAR 2009-10 ORDER DATED 28.2.2013. THE LEARNED A.R. FOR 3 THE ASSESSEE POINTED OUT THAT THE ISSUE OF DEDUCTIO N UNDER SECTION 80IC OF THE ACT ON INTEREST RAISED BY THE ASSESSEE IS SQ UARELY COVERED BY THE RATIO LAID DOWN BY THE PUNJAB & HARYANA HIGH COURT IN PHATELA COTGIN INDUSTRIES (P)LTD. VS. CIT [303 ITR 4111 (P&H)]. 8. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE RESPECTIVE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS ENGAGED IN THE DRAWING OF WIRE AND HAD CLAIMED DEDUCTION UNDER SECTION 80IC OF THE ACT. THE YEAR UNDER CON SIDERATION WAS THE THIRD YEAR OF ITS CLAIM UNDER SECTION 80IC OF THE A CT. THE ASSESSING OFFICER HAD DENIED DEDUCTION UNDER SECTION 80IC OF THE ACT HOLDING THAT THE PROCESS CARRIED BY THE ASSESSEE WAS NOT MANUFAC TURING. HOWEVER, THE CIT (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE I.E . DEDUCTION CLAIMED UNDER SECTION 80IC OF THE ACT IN VIEW OF THE EARLIE R ORDER OF THE CIT (APPEALS) RELATING TO ASSESSMENT YEAR 2009-10. HO WEVER, THE CIT (APPEALS) DENIED THE SAID DEDUCTION UNDER SECTION 8 0IC OF THE ACT ON THE INTEREST INCOME RECEIVED FROM THE CUSTOMERS. 10. WE FIND THAT THE ISSUE OF ALLOWABILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT ON THE WIRE DRAWING PROCESS CARRIED ON BY THE ASSESSEE IS COVERED IN FAVOUR OF THE ASSESSEE. TH E CHANDIGARH BENCH OF TRIBUNAL HAD LAID DOWN THE RATIO IN GROUP OF CASES WITH LEAD ORDER IN J.B.CONDUCTOR & CABLES VS. ITO IN ITA NO.215/CHD/20 09 RELATING TO ASSESSMENT YEAR 2005-06 ORDER DATED 30.11.2009. THE TRIBUNAL ALSO ADDRESSED THE RATIO LAID DOWN BY THE HON'BLE SUPREM E COURT IN CCE VS. TECHNO WELD INDUSTRIES LTD. (2003) 155 ELT 209 AND THE ISSUE RAISED WHETHER WIRE DRAWING WAS ELIGIBLE FOR DEDUCTION UND ER SECTION 80IC OF THE ACT. THE TRIBUNAL FURTHER IN ASSESSEES OWN CA SE IN ITA 4 NO.1304/CHD/2012 RELATING TO ASSESSMENT YEAR 2009-1 0 VIDE ORDER DATED 28.2.2013 APPLYING THE SAID RATIO ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT IN THE HANDS OF THE ASSESSE E. 11. THE ISSUE RAISED IN THE PRESENT YEAR IS IDENTIC AL TO THE ISSUE ARISING IN THE ASSESSMENT YEAR 2009-10 AND ALSO BEFORE THE TRIBUNAL IN BUNCH OF APPEAL WITH LEAD ORDER IN J.B.CONDUCTOR & CABLES VS . ITO (SUPRA) AND FOLLOWING OUR DECISION IN THE EARLIER YEARS WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80 IC OF THE ACT ON THE MANUFACTURING ACTIVITIES CARRIED ON BY IT. UPHOLD ING THE ORDER OF THE CIT (APPEALS), THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS DISMISSED. 12. NOW COMING TO THE ISSUE RAISED BY THE ASSESSEE WE FIND THAT THE SAME IS SQUARELY COVERED BY THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN PHATELA COTGIN INDUSTRIES (P) LTD. VS. CIT (SUPRA) AND FOLLOWING THE SAME WE DIRECT THE ASSESS ING OFFICER TO ALLOW THE CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE AC T ON THE INTEREST INCOME RECEIVED FROM THE CUSTOMERS. THE GROUND OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JULY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH JULY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5