M/s. Hindustan Tin Works Ltd., New Delhi V. ACIT, New Delhi

ITA 5906/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5318 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.5906/DEL/2016 ASSESSMENT YEAR : 2013-14 HINDUSTAN TIN WORKS LTD., M.L.PURI & CO., 407, NEW DELHI HOUSE, 27, BARAKHAMBA ROAD, NEW DELHI-110001. PAN : AAACH2597Q VS. ACIT, CIRCLE-11(2), C.R.BUILDING, I.P.ESTATE, NEW DELHI-110001. (APPELLANT) (RESPONDENT) APPELLANT BY SH. SALIL AGGARWAL, ADV. & SH. SHAILESH GUPTA, ADV. RESPONDENT BY SH. AMIT KATOCH, SR.DR DATE OF HEARING 05.08.2019 DATE OF PRONOUNCEMENT 21.08.2019 O R D E R PER SUCHITRA KAMBLE, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 06.10.2016 PASSED BY THE CIT(A)-12, NEW DELHI IN RE LATION TO ASSESSMENT YEAR 2013-14 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N DISMISSING THE APPEAL OF APPELLANT COMPANY AND RETAINING DISALLOWA NCE OF RS.19,66,901/- IN THE ORDER PASSED BY LD. DEPUTY COMMISSIONER OF I NCOME TAX CIRCLE-11(2) NEW DELHI U/S 143(3) OF THE INCOME TAX ACT, 1961. 2. THAT LD. CIT (APPEAL)-12 NEW DELHI GROSSLY ERRED IN LAW AND ON FACTS IN SUSTAINING A DISALLOWANCE OF RS. 19,66,901/- TREATI NG THE CAN-VIROMENT EXPENSES AS CORPORATE SOCIAL RESPONSIBILITIES EX PENDITURE. 3. THAT THE ORDER PASSED BY THE LD. CIT (APPEAL)NEW DELHI, BEING ERRONEOUS ITA NO.5906/DEL/2016 ASSESSMENT YEAR : 2013-14 PAGE | 2 IN LAW AND ON FACTS DESERVED TO BE DELETED. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROU ND OF APPEAL. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING OF TIN CANS/PRINTED LAC SHEET/COMPONENT & TRADING IN TIN P LATE. FOR THE RELEVANT ASSESSMENT, THE ASSESSEE COMPANY FILED RET URN OF INCOME ON 28.09.2013 DECLARING AN INCOME OF RS. 9,17,83,460/- . THE ASSESSING OFFICER MADE DISALLOWANCE OF EXPENSES INCURRED ON A CCOUNT OF CORPORATE SOCIAL RESPONSIBILITY EXPENSES AMOUNTING TO RS. 19,66,901/- AND DISALLOWANCE OF SALES PROMOTIONS AM OUNTING TO RS. 1,46,894/-. THUS, THE ASSESSING OFFICER ASSESSED TH E INCOME OF THE ASSESSEE AT RS. 9,38,97,260/-. 3. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. THE LD. AR SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY DEBITED RS. 19,66,901/- TO THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD MISC. EXPENSES. THE LD. AR F URTHER SUBMITTED THAT PROMOTING THE SUSTAINABILITY AND ENVIRONMENTAL LY FRIENDLINESS OF METAL PACKAGING IS INCREASINGLY IMPORTANT TO THE CA NMAKING INDUSTRY. INDIAN CANMAKER HINDUSTAN TIN WORKS THROUGH ITS CA NVIRONMENT WEEK CAMPAIGN, HAS BEEN PROVIDING A LEAD IN THIS GO AL WHILE AT THE SAME TIME HELPING THE NEEDY IN INDIA, AND RAISING A WARENESS OF THE IMPORTANCE OF RECYCLING. THE RESPONSE FROM THE INDU STRY WAS CERTAINLY POSITIVE AS WELL AS NUMEROUS COMPANIES AND ORGANI ZATIONS SHOWING THEIR SUPPORT FOR THE CAMPAIGN, IT HAD BEEN RECOGNI ZED WITH SEVERAL AWARDS IN RECENT MONTHS. THE LD. AR SUBMITTED THAT THESE EXPENDITURE WAS RELATED TO PROMOTION & SPREADING AWARENESS ABOU T SUSTAINABILITY AND ENVIRONMENTALLY FRIENDLINESS OF METAL PACKAGING IS INCREASINGLY ITA NO.5906/DEL/2016 ASSESSMENT YEAR : 2013-14 PAGE | 3 IMPORTANT TO THE CANMAKING INDUSTRY. THE ASSESSEE T HROUGH ITS CANVIRONMENT WEEK CAMPAIGN HAS BEEN PROVIDING A LEA D IN THIS GOAL AND RAISING AWARENESS OF THE IMPORTANCE OF RECYCLIN G WHICH HAVE DIRECT NEXUS WITH THE INCREASE IN DEMAND OF CANS IN MARKE T. THUS, THE ASSESSING OFFICER AS WELL AS THE CIT(A) ERRED IN NO T ALLOWING THESE EXPENSES. THE LD. AR FURTHER SUBMITTED THAT IN A.Y. 2012-13, THE TRIBUNAL IN ITA NO. 3531/DEL/2016 ALLOWED THIS ISSU E IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN A.Y. 2012-13 HELD AS UNDER: 16. HONBLE KARNATAKA HIGH COURT IN CASE CITED AS CIT & ANR. VS. INFOSYS TECHNOLOGIES LTD. (2014) 360 ITR 714 ALLOWED THE EXPENDITURE INCURRED BY INFOSYS TECHNOLOGIES LTD. O N ACCOUNT OF CSR BY INSTALLING TRAFFIC SIGNAL NEAR THE ESTABLISHMENT TO EASE THE TRAFFIC CONGESTION U/S 37(1) OF THE ACT BY HOLDING THAT SUC H EXPENSES CAN BE HELD TO BE EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS U/S 37(1) OF THE ACT. 17. IN THIS CASE, THE ASSESSEE CLAIMED EXPENDITURE OF RS. 15,22,874/- UNDER THE HEAD CAN-VIROMENT WEEK EXPE NSES HAVING DETAILS AS UNDER:- DATE OF VOUCHER NATURE OF EXPENSES AMOUNT 14.07.2011 WEBSITE EXPENSES 27,575 08.12.2011 HEALTH CHECK-UP OF RAG PICKERS 37,303 26.12.2011 FILM MAKING 1,35,000 12.01.2012 ORGANIZING CAN-VIROMENT WEEK PROGRAMME 13,22,970 ITA NO.5906/DEL/2016 ASSESSMENT YEAR : 2013-14 PAGE | 4 TOTAL 15,22,874 18. SO, WE ARE OF THE CONSIDERED VIEW THAT KEEPING IN VIEW THE TOTALITY OF THE AFORESAID CIRCUMSTANCES, THE LD. CI T(A) HAS RIGHTLY DELETED THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF CSR BY FOLLOWING THE DECISION RENDERED BY HONBLE KARNATAK A HIGH COURT AS WELL AS FOLLOWING THE RULE OF CONSISTENCY. SO, GROU ND NO. 2 IS DETERMINED AGAINST THE REVENUE. THE ISSUE IN THE PRESENT ASSESSMENT YEAR IS ALSO ID ENTICAL. THE ASSESSING OFFICER AS WELL AS CIT(A) IGNORED THE FAC T THAT THE SAID EXPENDITURE WAS INCURRED RELATING TO PROMOTION AND SPREADING AWARENESS ABOUT SUSTAINABILITY AND ENVIRONMENTALLY FRIENDLINESS OF METAL PACKAGING WHICH IS IMPORTANT TO CANMAKING IND USTRY. THUS, THE EXPENSES INCURRED BY THE ASSESSEE ARE COMING UNDER PURVIEW OF SECTION 37(1) OF THE INCOME TAX ACT, 1961. THEREFORE, THE A PPEAL OF THE ASSESSEE IS ALLOWED. 7. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DAY OF AUGUST, 2019 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBL E) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21.08.2019 * AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR