DCIT, Circle -8, Kolkata, Kolkata V. M/s Sicpa India Pvt. Ltd., Kolkata

ITA 599/KOL/2012

• Counselvise Citation: 59923514 RSA 2012
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASHIS BANERJEE
• Assessee Lawyers: HARISH AGARWAL
• Keywords: Depreciation

Judgement Text

I.T.A. NO. 599/KOL./2012 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 599/KOL/ 2012 ASSESSMENT YEAR : 2006-2007 DEPUTY COMMISSIONER OF INCOME TAX,................. ...................APPELLANT CIRCLE-8, KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. SICPA INDIA PRIVATE LIMITED,.................. ......................RESPONDENT 23A, N.S. ROAD, KOLKATA-700 001 [PAN : AADCS 6121 L] APPEARANCES BY: SHRI DEBASHIS BANERJEE, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI SOUMEN ADAK, FCA & SHRI HARISH AGARWAL, ACA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : NOVEMBER 27, 2015 DATE OF PRONOUNCING THE ORDER : DECEMBER 04, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA DATED 12.01.2012 FOR THE ASSESSMENT YEAR 2006-07 AND IN THE SOLITARY GRO UND RAISED THEREIN, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CI T(APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON A CCOUNT OF DEDUCTION UNDER SECTION 80IC BY ALLOCATING INDIRECT EXPENSES TO THE ELIGIBLE UNIT. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF PRINTI NG INK. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 28.11.2006 I.T.A. NO. 599/KOL./2012 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 3 DECLARING TOTAL INCOME OF RS.8,13,39,293/-. IN THE SAID RETURN, DEDUCTION IN RESPECT OF PROFIT OF SIKKIM UNIT AMOUNTING TO RS .12,40,37,788/- WAS CLAIMED BY THE ASSESSEE UNDER SECTION 80IC OF THE A CT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AS SESSING OFFICER THAT THE ASSESSEE HAS NOT ALLOCATED SOME OF THE INDIRECT EXPENSES, SUCH AS SALARY OF STAFF AT HEAD OFFICE, DIRECTORS REMUNERA TION, BONUS, INTEREST, DEPRECIATION ON VEHICLES, ETC. TO THE SIKKIM UNIT W HILE CALCULATING THE PROFIT OF THE SAID UNIT ELIGIBLE FOR DEDUCTION UNDE R SECTION 80IC. HE, THEREFORE, WORKED OUT SUCH EXPENSES ALLOCABLE TO TH E SIKKIM UNIT AT RS.44,16,463/- AND RESTRICTED THE CLAIM OF THE ASSE SESE FOR DEDUCTION UNDER SECTION 80IC OF RS.12,40,37,788/- TO RS.11,96 ,21,325/-. 3. ON APPEAL, THE LD. CIT(APPEALS) DID NOT AGREE WI TH THE ASSESSING OFFICER AND ALLOWED THE CLAIM OF THE ASSESESE FOR D EDUCTION UNDER SECTION 80IC AT RS.12,40,37,788/- OBSERVING THAT NO INDIREC T EXPENSES COULD BE ALLOCATED FOR THE PURPOSE OF COMPUTING DEDUCTION UN DER SECTION 80IC AS THE SAME WERE NOT DIRECTLY ATTRIBUTABLE TO THE ELIG IBLE SIKKIM UNIT. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. D.R. HAS CONTENDED THAT THE PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IC IS TO BE WORKED OUT AFTER DEDUCTING ALL THE DIRECT AND INDIRECT EXP ENSES, THE DEDUCTION UNDER SECTION 80IC, AS POINTED OUT BY THE LD. COUNS EL FOR THE ASSESSEE, IS IN RESPECT OF ANY PROFIT AND GAINS DERIVED BY THE E LIGIBLE UNDERTAKING. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESESE IN TH IS REGARD, THE WORDS DERIVED FROM HAS A NARROW MEANING, INASMUCH AS IT CONTEMPLATES FIRST DEGREE CONNECTION WITH THE ELIGIBLE UNIT AS HELD, INTER ALIA, BY THE HONBLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICALS LIMI TED REPORTED IN 262 ITR 278 AND THIS PRINCIPLE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CONTEXT OF INCOME IS ALSO APPLICABLE FOR THE ALLOCA TION OF EXPENSES AS HELD BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CAS E OF BALARAMPUR CHINI I.T.A. NO. 599/KOL./2012 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 3 MILLS LIMITED VS.- DCIT REPORTED IN 140 TTJ 73. IN THE SAID CASE, IT WAS HELD BY THE TRIBUNAL THAT EXPENSES INCURRED BY THE ASSESESE UNDER THE GENERAL HEAD OF OFFICE EXPENSES, WHICH ARE NOT DIRE CTLY INCURRED FOR THE ELIGIBLE UNIT, CANNOT BE SAID TO HAVE FIRST DEGREE CONNECTION WITH SUCH UNIT SO AS TO REDUCE THE SAME ON PRO RATA BASIS FOR COMPUTING THE PROFIT OF SUCH UNIT ELIGIBLE FOR DEDUCTION. IN OUR OPINION , THE ISSUE INVOLVED IN THE PRESENT CASE THUS IS SQUARELY COVERED BY THE DE CISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF BA LARAMPUR CHINI MILLS LIMITED (SUPRA) AND RESPECTFULLY FOLLOWING THE SAME , WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIE F TO THE ASSESSEE ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 04, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 4 TH DAY OF DECEMBER, 2015 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. SICPA INDIA PRIVATE LIMITED, 23A, N.S. ROAD, KOLKATA-700 001 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, KO LKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.