ITO, New Delhi V. M/s. Rajat Deep Overseas (P) Ltd., New Delhi

ITA 4854/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7557 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 12-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKHI BIM AL
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 4854 /DEL /20 1 4 ASSESSMENT YEAR : 20 10 - 11 THE I.T . O VS. M/S RAJAT DEEP OVERSEAS (P) LTD WARD - 15(2) 179 - A, LIG FLATS, RA JOURI GARDEN N EW DELHI NEW DELHI PAN : AA BCR 4099 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 12 . 05. 201 6 DATE OF PRONOUNCEMENT : 30 . 05 .201 6 ASSESSEE BY : SHRI V ED JAIN , C A REVENUE BY : MS. RAKHI BIMAL, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE CIT(A) - X V II I , NEW DELHI, DATED 10 / 06 /20 1 4 PASSED IN FIRST APPEAL NO. 27 /2013 - 14 FOR A.Y 20 10 - 11 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A ) HAS ERRED IN D ELETING THE ADDITION OF RS.2,41, 40 , 305/ - RELYING ON THE DECISION OF THE HON'BLE ITAT IN ASSESSEE S OWN CASE 2 ITA NO. 2 /DEL/20 1 4 2 IN EARLIER YEAR IGNORING THE FACT THAT THE DEPARTMENT IS IN APPEAL IN HIGH COURT AGAINST THE SAID ITAT ORDER. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE ABOVE DISALLOWANCE BY NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS SHOWN HIGH GROSS MARGIN I.E 19.27% COMPARED TO THE INDUSTRY AVERAGE OF 3 - 5%, WHICH IS ATTRIBUTABLE TO THE BRAND VALUE OF TH E IN DUSTRIAL UNDERTAKING BEING NOT EL IGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) WHEREIN DEDUCTION U/S 80IC OF THE INCOME T AX ACT, 1961 [FOR SHORT, 'THE ACT'] WAS ALLOWED TO THE ASSESSEE. T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR DISALLOWANCE WAS MADE BY THE AO IN THE CASE OF THE ASSESSEE FOR A.YS 2008 - 09 AND 2009 - 10 AND THE SAID DISALLOWANCE WAS DELETED BY THE ITAT FOR A.Y 2008 - 09 IN ITA NO. 2309 , 3235/DEL2012 AND FOR A.Y 2009 - 10 IN ITA NO. 236/DEL/2013 AND ITA NO. 883/DEL/2014. THE LD. AR FURTHER CONTENDED THAT THE ORDER OF THE TRIBUNAL FOR A.Y 2009 - 10 HAS BEEN UPHELD BY THE HON'BLE HIGH COURT OF DELHI VIDE I TA NO. 540/DEL/2015 ORDER DATED 20.10.2015. ELABORATING THE FACTS OF THE CASE, THE LD. AR ALSO POINTED OUT THAT THE ASSESSEE S CASE FOR A.Y 2007 - 08 REOPENED U/S 147 OF THE ACT WHEREIN SIMILAR DISALLOWANCE OF DEDUCTION U/S 80IC WAS MADE BY THE AO AND VIDE ORDER DATED 3 ITA NO. 2 /DEL/20 1 4 3 11.3.2016, ITAT DELETED THE SAID DISALLOWANCE MADE BY THE AO IN ITA NO. 145/DEL/2015. THE LD. AR VEHEMENTLY POINTED OUT THAT IN VIEW OF THE ABOVE JUDGMENTS PASSED BY THE ITAT AND FURTHER UPHELD BY THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN ASSESSEE S OWN CASE FOR EARLIER A.YS, DISALLOWANCE OF DEDUCTION MADE BY THE AO HAS BEEN RIGHTLY DELETED BY THE LD. CIT(A) AND THUS THE ORDER OF THE LD. CIT(A) MAY BE UPHELD. 4. THE LD. DR STRONGLY SUPPORTED THE ACTION OF THE AO AND CONTENDED THAT THE O RDER OF THE LD. CIT(A) MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO. HOWEVER, HE COULD NOT CONTROVERT THIS FACT THAT IN THE SIMILAR SET OF FACTS AND CIRCUMSTANCES OF THE CASE FOR SIMILAR DEDUCTION U/S 80IC OF THE ACT, THE ORDER OF THE TRIBUNAL FOR A.Y 2009 - 10 HAS BEEN UPHELD BY THE HON'BLE HIGH COURT OF DELHI VIDE ORDER DATED 20.10.2015 [SUPRA]. 5. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBMISSIONS, FROM THE OPERATIVE PART OF THE OR DER OF THE LD. CIT(A), WE NOTE THAT THE LD. CIT(A) HAS CONSIDER ED THE ORDER OF THE ITAT IN ASSESSEE S OWN CA S E FOR A.Y 2008 - 09 DATED 10.1.2014 WHEREIN IT HAS BEEN HELD THAT MERELY BECAUSE THE INDUSTRIAL UNDERTAKING EARNED HIGHER PROFITS DOES NOT CALL FOR AN INFERENCE THAT CLAIM OF DEDUCTION IS TO BE WILY NILY REDUCED ON PRESUMPTIONS. THE TRIBUNAL DISMISSING THE APPEAL OF THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) EXPLICITLY HELD THAT IN CONSIDERATION 4 ITA NO. 2 /DEL/20 1 4 4 OF E NTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE WE SEE NO JUSTIFICATION THE LD. CIT(A) S ORDER RETAINING THE REDUCTION OF 10% FROM THE DEDUCTION AND SAME IS DELETED. IN THE PRESENT CASE ALSO, THE LD. CIT(A) HAS FOLLOWED THE ORDER OF THE ITAT FOR A.Y 2008 - 09. THEREFORE, WE ARE UNABLE TO SEE ANY PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE CONCLUSION DRAWN BY THE LD. CIT(A) AND THUS WE UPHOLD THE SAME. CONSEQUENTLY , BOTH THE GROUNDS OF THE REVENUE BEING DEVOID OF MERI T S ARE DISMISSED. 6 . IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 0 . 05 .201 6 . S D / - S D / - ( S.V. MEHROTRA ) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 0 T H MAY , 201 6 VL/ COPY FORWARDED TO: 1 . A PPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI