M/s C & E Ltd., Kolkata V. DCIT, CIR-12, KOLKATA, Kolkata

ITA 402/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1842 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Keywords: Business income
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI WASEEM AHMED, AM & HONBLE SH RI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 402/KOL/201 6 ASSESSMENT YEAR :2010-11 M/S C & E LTD. -VS- DCIT,CIRCLE-12, KOLKAT A [PAN: AAACCC 5418 K] (APPELLANT) (RESPONDE NT) FOR THE APPELLANT : SHRI SRIKUMAR BANERJEE FOR THE RESPONDENT : SHRI ARINDAM BHATTACH ARJEE, ADDL.CIT DATE OF HEARING : 01.01.2018 DATE OF PRONOUNCEMENT : 25.01.2018 ORDER PER WASEEM AHMED, AM THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-4, KOLKATA [IN SHORT THE LD CIT(A)] DATED 21.12.2015 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE-12, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 21.03.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN LAW AND IN FACT BY CONFIRMING THE OTHER INCOME OF RS. 1,27, 658/- FOR UNIT IV AS THE INCOME WHICH WAS NOT DERIVED FROM ELIGIBLE BUSINESS . 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN LAW AND IN FACT BY CONFIRMING THE OTHER INCOME OF RS. 1,27, 658/- FOR UNIT IV AS THE INCOME WHICH WAS NOT DERIVED FROM ELIGIBLE BUSINESS WITHOUT EXAMINING THE NATURE OF EACH INCOME. 2 ITA NO.402/KOL/2016 M/S C &E LTD. A.YR. 2010-11 2 3. THAT THE APPELLANT CAUSE LEAVE TO ADD, ALTER, AM END OR MODIFY AND/OR ALL OF THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING OF THE APPEAL. 2. THIS SOLITARY ISSUE RAISED BY THE ASSESSEE IN TH IS APPEAL IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY HOLDING THAT OTHER IN COME OF RS. 1,27,658/- WAS NOT DRIVEN FROM ELIGIBLE BUSINESS AND CONSEQUENTIALLY T HE SAME IS NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF LEATHER CHEMICALS AND TRADING OF DIES & CHEMICALS. THE ASSESSEE INTER ALIA HAS SHOWN OTHER INCOME OF RS. 1,27,658/- ONLY. THE BREAKUP OF OTHER INCOME STANDS AS UNDER: PARTICULARS OF INCOME RS. DUTY DRAWBACK RECD 1,12,164,00 INTEREST ON TERM DEPOSIT WITH BANK 90 SALE OF DRUMS 63,059.00 CLAIM & DEMURRAGE RECD (12,655.00) SUNDRY BALANCE WRITTEN OFF (35,000.00) TOTAL 1,27,658.00 HOWEVER, THE AO WAS OF THE VIEW THAT THE OTHER INCO ME SHOWN BY THE ASSESSEE WAS NOT DRIVEN FROM THE ELIGIBLE BUSINESS AND THEREFORE, TH E DEDUCTION U/S 80IC OF THE ACT FOR THE SAME IS NOT AVAILABLE. ACCORDINGLY, THE AO DISREGAR DED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IC OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE ABOVE INCO ME WAS ASSESSABLE UNDER THE HEAD BUSINESS INCOME AND THEREFORE IT IS ELIGIBLE FOR DE DUCTION U/S 80IC OF THE ACT. HOWEVER, 3 ITA NO.402/KOL/2016 M/S C &E LTD. A.YR. 2010-11 3 THE LD. CIT(A) DISREGARDED THE CONTENTION OF THE AS SESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: 5.2. I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANTS AR IN THE BACKDROP OF THE ASSESSMENT ORDER. THE SHORT ISSUE AT HAND IS WHETHE R THE OTHER INCOME AS DISCUSSED SUPRA COULD COME WITHIN THE AMBIT OF DEDUCTION U/S 80IC OF THE ACT. IN THE ASSESSMENT ORDER, THE AO HAS MADE AN EXHAUSTIVE EXPLANATION AS TO WHY THE OTHER INCOMES WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S 80IC AND ALSO CIT ING VARIOUS COURT DECISIONS IN THE MATTER. ON AN OVERALL CONSIDERATION OF THE MATTER, I FIND FORCE IN THE CONTENTION OF THE AO THAT THE OTHER INCOMES WOULD NOT CONSTITUTE INCO MES WHICH WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. I FIND THAT THESE IN COMES DO NOT HAVE FIRST DEGREE NEXUS WITH THE PRIMARY INCOME OF THE APPELLANT FOR THE PU RPOSE OF SECTION 80IC OF THE ACT. IN THE LIGHT OF THE FOREGOING AND REJECTING THE SUBMIS SION OF THE AR, I CONFIRM THE ACTION OF THE AO IN MAKING THE ADDITION IN THIS REGARD. THIS GROUND STANDS DISMISSED. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSE SSEE IS IN SECOND APPEAL BEFORE US. 4. THE LD. AR BEFORE US SUBMITTED THAT THE IDENTICA L ISSUE WAS RESTORED BACK BY THE HONBLE ITAT TO THE AO PERTAINING TO THE ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 30.04.2015. SIMILARLY, THE LD. AR FURTHER SUBMITTE D THAT THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN I.T.A. NOS. 39,1018 & 1019/K OL/2015 PERTAINING TO ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 VIDE ORDER DATED 06.09.2017 HAS RESTORED THIS ISSUE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO ADJUDICATE THE SAME ON OR BEFORE 28.02.2018. THE RELEVANT EXTRACT OF THE ORDER IS RE PRODUCED BELOW: WITH REGARD TO THE TREATMENT OF OTHER INCOME AS DE TAILED (SUPRA) AS BEING ELIGIBLE FOR DEDUCTION U/S 80IB AND 80IC OF THE ACT, WE FIND THA T THIS TRIBUNAL IN THE EARLIER YEARS HAD REMANDED THE MATTER TO THE FILE OF THE LD. CIT( A) FOR ADJUDICATION OF EACH OF THE ISSUES AND GIVEN A PROPER FINDING THEREON. THE FACT S OF THE CASE BEFORE US IS NO DIFFERENT FROM THAT PREVAILING IN THE EARLIER YEARS. HOWEVER , WE FIND FROM THE ARGUMENTS OF THE LD. AR THAT THE LD. CIT(A) HAD NOT TAKEN ANY DECISI ON FOR THE EARLIER YEARS IN THIS REGARD PURSUANT TO THE ORDERS PASSED BY THIS TRIBUN AL. HENCE, IN ORDER TO REACH FINALITY, WE DEEM IT FIT AND APPROPRIATE TO REMAND THIS MATTE R TO THE FILE OF THE LD. CIT(A) WITH A SPECIFIC TIME FRAME DIRECTING HIM TO DISPOSE OF TH ESE APPEALS ON OR BEFORE 28.02.2018. ACCORDINGLY, GROUNDS RAISED IN THIS REGARD BY THE A SSESSEE FOR VARIOUS ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOSES . IN VIEW OF ABOVE THE LD. AR PLEADED TO RESTORE THE ISSUE FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF LAW. 4 ITA NO.402/KOL/2016 M/S C &E LTD. A.YR. 2010-11 4 ON THE OTHER HAND, THE LD. DR RAISED NO OBJECTION I F THE MATTER IS RESTORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET IT WAS OBSERVED THAT THE HONBLE ITAT IN EAR LIER YEARS IN THE ASSESSEES OWN CASE HAS ALREADY RESTORED THE SAME TO THE FILE OF LD. CI T(A) FOR FRESH ADJUDICATION WITHIN THE SPECIFIED TIME FRAME AS DISCUSSED ABOVE. THEREFORE RESPECTFULLY FOLLOWING THE SAME AND TO AVOID MULTIPLE PROCEEDINGS WE RESTORE BACK THE I MPUGNED ISSUE TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH PR OVISION OF LAW. HENCE, THE GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE ALLOWED FOR STA TISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 25.01.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [WASEEM AHMED ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 25.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. M/S C & E LTD., 95, PARK STREET, 2ND FLOOR, KOLK ATA-700016. 2. DCIT, CIRCLE-12, KOLKATA, 3.C.I.T.- 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE BY ORDER /TRUE COPY/ SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S