ACIT, Circle 8(2), New Delhi V. Excel Pack Ltd., New Delhi

ITA 4251/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4004 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 80IC; 80IC; 48; 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘B’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA No.4251/Del./2019 (ASSESSMENT YEAR : 2014-15) ACIT, Circle 8 (2), vs. Excel Pack Limited, New Delhi. 1004-05-06, Devika Tower, Nehru Place, New Delhi – 110 019. (PAN : AABCE0195J) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri R.K. Kapoor, Ca REVENUE BY : Shri Sumit Kumar Verma, Sr. DR Date of Hearing : 21.09.2022 Date of Order : 23.09.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the Revenue is directed against the order of ld. CIT (Appeals)-34, New Delhi dated 15.02.2019 for the Assessment Year 2014-15. 2. The ground of appeal raised by the assessee reads as under :- “The Ld. Commissioner of Income-tax (Appeals) erred in law and on the facts of the case in deleting the addition of Rs.1,75,43,557/- on account of disallowance u/s 80IC of the Act.” ITA No.4251/Del./2019 2 3. Brief facts of the case are that the assessee company is engaged in the business of induction Head Seal Cap liner material and induction wads. Return declaring an income of Rs.4,22,56,630/- was filed on 27.11.2014. The case was selected for scrutiny. The AO has computed the assessment u/s 143(3) of the Income-tax Act, 1961 (for short ‘the Act’) vide order dated 30.09.2016 after making disallowance u/s 80IC at Rs.1,75,43,557/- and addition on account of delayed payment of ESI/EPF at Rs.1,49,581/-. Total income was assessed at Rs.5,99,49,765/-. During the year under consideration, the assessee has claimed deduction u/s 80IC of Rs.1,75,43,557/-. The AO has asked the assessee to file product sample and after examining the sample, the AO has observed that actual product is a product which is paper and paper board quoted, impregnated or covered with plastic excluding adhesive product consisting sheets of papers or paper book which comes under the schedule 13 at S.No.19 which is a negative list of products on which sore is not available. In the earlier assessment years 2010-11 & 2012-13 the claim made by the appellant u/s 80IC has been rejected by then Assessing Officer being falling in the negative list. Following the order of the earlier year, AO has disallowed deduction u/s 80IC claimed by the assessee and added Rs.1,75,43,557/- in the taxable income of the appellant. ITA No.4251/Del./2019 3 4. Against the above order, assessee appealed before the ld. CIT(A). Ld. CIT (A) noted that the issue has been decided by the ITAT in assessee’s own case in favour of the assessee for AY 2010-11. Ld. CIT(A) was of the opinion that the facts are similar, so following the said decision, he held that assessee should be granted the deduction. We may gainfully refer to the concluding portion of the ld. CIT (A)’s order as under :- “6.3 During the course of appellate proceedings, appellant has submitted that product being manufactured by the appellant falls under tariff 7607 and 8309 of the Central Excise Tariff Act (CETA). The appellant was not engaged in the manufacturing of any article or thing notified in Schedule 13, the deduction was allowed to the appellant u/s 80IC in the AY 2007-08 to 2010-11, 2012-13 & 2013-14 by CsIT(A). The AO has disallowed the claim with the observation that the product manufacture by the appellant comes under the Schedule 13 at S.No. 19 which is a negative list of product on which section 80IC is not applicable, as the product falls under the chapter 48 of Central Excise. The appellant has submitted that AO did not notice that as per chapter 48 it is specifically provided that metal foil backed with paper or paper board are not covered under chapter 48. The appellant has obtained the legal opinion regarding classification of induction heat seals (HIS) cap liners and as per the legal opinion of Excise consultant aluminum foil in the form of rolls / running length are to be classified under tariff heading 7607 CETA under aluminum foil cut to -shape in' the form of seals or to be classified under the tariff heading 8309 of the CETA. It is submitted by the appellant that whether an industrial undertaking fulfills the condition as specified u/s 80IC has to be determined in the year in which new industrial undertaking is established and said deduction cannot be denied in the subsequent year in absence of any material change which would justify the change in view. Further appellant has submitted that appellant has set up its unit at Uttaranchal on ITA No.4251/Del./2019 4 Khasra No. 545 on 26.10.2006 at that point of time item no. 19 & 20 as referred by the AO were not there in the schedule 13. 6.4 I have considered the facts of the case, finding of the AO and submission of the appellant. The claim of the appellant u/s 80IC was rejected by the AO in AY 2010-11 to 2013-14 & 2015-16 which were allowed by the CsIT(A). Hon'ble ITAT vide ITA No. 5994 and 6550 for AY 2010-11 dated 18.02.2019 in the case of the appellant dismissed the revenue's appeal on the issue of 80re. The facts are identical during the year under consideration and AO has rejected the claim of the appellant u/s 80rC following the orders of the earlier year and to keep issue alive. Therefore, keeping in view the principle of judicial consistency, the addition made by the AO at Rs.1,75,43,557/- is deleted and AO is directed to allow the deduction u/s 80IC.” 5. Against this order, Revenue is in appeal before us. We have heard both the parties and perused the record. 6. Ld. DR for the Revenue relied upon the grounds of appeal and the order of the AO. However, he did not dispute the proposition that the same issue has been decided by the ITAT in assessee’s own case in favour of the assessee for AY 2010-11 & 2015-16. 7. Per contra ld. Counsel of the assessee submitted that ITAT in assessee’s own case for earlier periods has decided the issue in favour of the assessee and hence he pleaded that the matter is covered in favour of the assessee. 8. In this regard, we may gainfully refer to the decision of ITAT in assessee’s own case in ITA No.2178/Del/2019 for AY 2015-16 vide order dated 11.10.2021 as under:- ITA No.4251/Del./2019 5 “7. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to allowing the claim of deduction u/s 80IC of the Act by CIT(A). We find that identical issue was decided by the Coordinate Bench of Tribunal in assessee’s own case by order dated 08.02.2019 in ITA Nos.5994/Del/2014 & 6550/Del/2015 for A.Y. 2010-11 & 2012-13 and the aforesaid order was followed by the Co-ordinate Bench of Tribunal while deciding the assessee’s own case for A.Y. 2013-14. The relevant observations of the Tribunal are as under: “2. Brief facts of the case are that the assessee is engaged in the business of manufacture of Induction Heat Seal Cap Liner material and Induction Wads. For the assessment year 2013- 14 it has filed its return of income on 30/9/2013 declaring an income of Rs.2,84,91,000/-and claimed deduction under section 80 IC of the Act to the tune of Rs.1,19,73,540/-. Learned Assessing Officer, however, held that the products manufactured by the assessee fall under schedule 13 (at serial No. 19) which is a negative list and, therefore, profit derived from the manufacture of these products is not eligible for deduction under section 80 IC of the Act. 3. Assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A), as a matter of fact, found that the products manufactured by the assessee do not fall under tariff No. 4811.20, 4811.31 and rather the products fall under the tariff 7607-20-90 of CETA and while referring to the circular No. 28/89 dated 26/9/1989 and 141/2/2003 dated 6/10/2003 issued by the Government of India, Ministry of Finance (Department of Revenue), New Delhi allowed deduction under section 80 IC of the Act to the assessee. Revenue is therefore in this appeal. 4. At the outset, Ld. AR submitted that the Ld. CIT(A) followed the Board Circulars for granting relief to the assessee. He further submitted that under similar set of facts for the assessment years 2010-11 and 2012-13 a coordinate Bench of this Tribunal dealt with this issue in assessee's own case in ITA No. 5994/Del/2014 and 6550/Del/2015 and by order dated 18/02/2019 Tribunal returned a finding that inasmuch as the industrial unit was set up on 26/10/2006, and the initial assessment year in which deduction under section 80 IC of the Act was claim, was assessment year 2007-08 from each year onwards such a claim was allowed to the assessee, and, therefore, while following the decision of the Hon'ble Apex Court High Court in the case of International ITA No.4251/Del./2019 6 Tractors Limited297 CTR 119 Tribunal returned a finding that the assessee is entitled to the deduction in section 80 IC of the Act and the classification of aluminium foil laminated on both sides with plastic films would be under Chapter Headings 7607 instead of Chapter Headings 3920. 5. Facts submitted by the Ld. AR are not in dispute and Ld. DR does not controvert the same. A copy of the order dated 18/02/2019 in ITA No. 15 and 94/del/2014 and the 6550/del/2015 for assessment years 2010-11 and 2012-13 is produced. We have perused the same. 6. Facts being identical, we find that the issues involved in this matter are directly and substantially covered in assessee's own case in earlier years and while respectfully following the same we hold that the assessee is entitled to deduction under section 80 IC of the Act and the addition to the tune of Rs.1,19,73,540/-by disallowance of the same, is directed to be deleted. Grounds of appeal are answered accordingly.” 8. Before us, no material has been placed on record to demonstrate that the facts in the year under consideration are different from that of earlier years or the order of ITAT for earlier years have been set aside/stayed by higher judicial forum. In such a situation, we find no reason to interfere with the order of CIT(A). Thus the ground of Revenue is dismissed.” 9. Accordingly, respectfully following the precedent in assessee’s own case, we do not find any infirmity in the order of the ld. CIT (A), hence the same is upheld. 10. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on this 23 rd day of September, 2022. Sd/- sd/- (YOGESH KUMAR US) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 23 rd day of September, 2022 TS ITA No.4251/Del./2019 7 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A)-34, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.