M/s Unison Pharmaceuticals, Baddi V. DCIT, Circle, Parwanoo

ITA 472/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5026 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 16-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Additional depreciation
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.472/CHD/2018 (ASSESSMENT YEAR : 2012-13) M/S UNISON PHARMACEUTICALS, VS. THE DCIT , CIRCLE, PLOT NO. 124, INDUSTRIAL AREA, PARWANOO JHARMAJRI, BADDI (H.P.) PAN NO. AACFU0131E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH, ADVOCATE RESPONDENT BY : SHRI HEMANT GUPTA, SR.DR DATE OF HEARING : 26.07.2018 DATE OF PRONOUNCEMENT : 01.08.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA (HEREINAFTER REFERRED TO AS LD. CIT (APPEALS)] DATED 22.3.2018. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW IN UPHOLDING THE ACTION OF THE ASSESSI NG OFFICER RESORTING TO THE PROVISIONS OF SECTION 148 IN AS MU CH AS THERE HAS BEEN NO ESCAPEMENT OF INCOME WARRANTING ISSUANCE OF NOTICE UNDER SECTION 148 AS THERE WAS N O FIRM IN EXISTENCE AND AS SUCH THE ASSESSMENT FRAMED IS I LLEGAL, ARBITRARY AND UNJUSTIFIED. 2. THAT THE RETURN OF THE ASSESSEE WAS SUBJECTED TO TH OROUGH SCRUTINY AND ORDER U/S 143(3) WAS PASSED AFTER CONSIDERING ALL THE SUBMISSIONS ON RECORD AND AS SU CH RESORT TO SECTION 148 IS ONLY ON THE BASIS OF CHANG E OF OPINION WHICH IS NOT PERMISSIBLE LEADING TO AN ILLE GAL, ITA NO.472/CHD/2018 AY: 2012-13 2 ARBITRARY AND UNJUSTIFIED REASSESSMENT. 3. WITHOUT PREJUDICE TO THE ABOVE LEGAL GROUNDS, THE L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING AN ADDITION OF RS. 28,51,120/- ON ACCOUNT OF NON-CLAIM OF ADDITIONAL DEPRECIATION WHICH ALLEGEDL Y WAS REQUIRED TO BE ALLOWED ARID AS SUCH THE ADDITION MA DE IS ARBITRARY AND UNJUSTIFIED. 4. THAT IN ANY CASE, IF THE ADDITION IS REQUIRED TO BE MADE, IT WOULD ONLY REDUCE THE DEDUCTION UNDER SECTION 80-1C AND WILL NOT RESULT IN ANY TAXABLE INCOME AND AS SUCH C REATING A TAX DEMAND OF RS.13,00,510/- IS ILLEGAL, ARBITRAR Y AND UNJUSTIFIED. 3. IN THIS APPEAL, AS PER THE CONTENTION RAISED, TH E ASSESSEE IS MAINLY AGGRIEVED BY THE ACTION OF THE CIT(A) IN UPHOLDING THE ADDITION ON ACCOUNT OF NON-CLAIM OF ADDITIONAL DEPRECIATION AND THEREBY REDUCING THE EL IGIBLE INCOME OF THE ASSESSEE U/S 80IC OF THE ACT AS THE A BOVE DISALLOWANCES WILL GO TO ADD/REDUCE THE BUSINESS IN COME OF THE ASSESSEE, WHICH OTHERWISE, IS ELIGIBLE FOR DEDU CTION U/S 80IC OF THE ACT. THE LD. COUNSEL FOR ASSESSEE HAS F URTHER STATED IT WILL NOT HAVE ANY EFFECT ON THE TAX LIABI LITY OF THE ASSESSEE. 4. THE LD. DR, ON THE OTHER HAND, HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 5 WE HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE L D. COUNSEL FOR ASSESSEE. SO FAR AS THE ADDITION MADE B Y THE ASSESSING OFFICER IN RESPECT OF ADDITION MADE ON AC COUNT OF CLAIM OF LESS DEPRECIATION IS CONCERNED, WE FIND FO RCE IN THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT THE DISALLOWANCE WOULD ADD TO THE BUSINESS INCOME OF TH E ITA NO.472/CHD/2018 AY: 2012-13 3 ASSESSEE, WHEREAS, THE ADDITION MADE ON ACCOUNT OF CLAIM OF LESS DEPRECIATION WILL GO ON REDUCING THE BUSINESS INCOME OF THE ASSESSEE, WHICH OTHERWISE, ADMITTEDLY, IS ELIG IBLE FOR DEDUCTION U/S 80IC OF THE ACT. IN VIEW OF THE ABOV E, THE ABOVE STATED DISALLOWANCE CANNOT BE EXIGIBLE TO TAX ATION SEPARATELY. 6. IN VIEW OF THE ABOVE THE ISSUES RAISED BY THE AS SESSEE VIDE GROUND NOS. 3 & 4 OF THE APPEAL ARE DECIDED WI TH THE OBSERVATION THAT ENHANCEMENT/ADDITION INTO THE INCO ME OF THE ASSESSEE ON ACCOUNT OF THE AFORESAID DISALLOWAN CES WILL NOT MAKE THE ASSESSEE LIABLE TO PAY THE ADDITIONAL TAX, RATHER IT WILL INCREASE/DECREASE OF THE BUSINESS IN COME OF THE ASSESSEE, WHICH OTHERWISE, IS ELIGIBLE FOR DEDU CTION U/S 80IC OF THE ACT. THE AO IS DIRECTED TO FOLLOW THE A BOVE DIRECTIONS. THEREFORE, THE GROUND NOS. 3 & 4 RAISE D BY THE ASSESSEE ARE ACCORDINGLY, ALLOWED IN ABOVE TERMS. NO OTHER GROUND OR ISSUE RAISED OR PRESSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.08.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.08.2018 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR