Flex Foods Ltd., New Delhi V. ACIT, New Delhi

ITA 6148/DEL/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5462 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 30-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 153A; 115JB; 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA Nos.6147 & 6148/DEL/2016 [Assessment Years: 2009-10 & 2010-11] Flex Foods Limited, 305, 3 rd Floor, Bhanot Corner Pamposh Enclave, Greater Kailash-I, New Delhi-110048 Vs Asst. Commissioner of Income Tax Central Circle-27, New Delhi PAN-AAACF0108K Assessee Revenue Assessee by Sh. M.P. Rastogi, Adv. Revenue by Sh. S.L. Anuragi, Sr. DR Date of Hearing 12.07.2022 Date of Pronouncement 20.07.2022 ORDER PER SHAMIM YAHYA, AM, These appeals filed by the assessee are directed against the order of the Ld. CIT(A)-29, New Delhi, dated 30.09.2016, pertaining to Assessment Year 2009-10 & 2010-11. 2. Commons grounds have been raised in these appeals with difference in figures. For the sake of reference, we are referring to ground of appeal for Assessment Year 2009-10 which reads as under:- “1. (a) It is contended that the sum of Rs. 1,17,83,416/- is a Capital Receipt as it has been given to facilitate Agricultural and Village products in order to improve the Agricultural and Village Cottage Industries. (b) It is contended that the lower authorities erred in holding that incentive given under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" with an objective to generate 2 ITA Nos.6147 & 6148/Del/2016 employment and promote economic growth is not a Capital Receipt. 2. Without Prejudice to the above, (a) The Lower Authorities are wrong on facts and bad in law in treating a sum of Rs. 1,17,83,416/- as profit not eligible for deduction U/s 80-IC. The said sum had been received under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" being a special scheme for the Agriculture and Gram Udyog Products. (b) That on the facts and in the circumstances of the case, the lower authorities erred in law not allowing deduction U/s 80-IC on incentive granted under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" of Rs. 1,17,83,416/- allowed to compensate high transport cost incurred by the company. (c) It is contented that incentives granted under "Vishesh Krishi and Gram Udyog Yojana (VKGUY)" have a direct, intrinsic and first degree nexus with the business operations of the appellant. (d) It is contented that incentive were given to offset the high freight cost incurred by the appellant and thus the net effect thereof on the profits is nil. (e) The lower authorities erred in holding that the profits generated out of such incentives are not operational profits. 3. The lower authorities erred in holding that the said incentive being capital in nature is not to be deducted while arriving Book Profits U/s 115JB.” 3. Brief facts of the case are that in these cases, the assessment order was framed u/s 153A r.w.s. 143(3) of the Act. The Assessing Officer for Assessment Year 2009-10 made this addition by observing as under: “In this case, original assessment u/s 143(3) was made by ACIT, Central Circle-18, New (now Central Circle-27, New Delhi) on 23.12.2011, vide which total income was assessed at Rs.8,92,72,580/- after disallowing the claim of the assessee made u/s 80IC of the I.T. Act, 1961 on export incentive. The assessee filed appeal against the disallowance made by the Assessing Officer. The Ld. CIT(A) has allowed the appeal of the assessee. The Revenue filed appeal against the order of Ld. CIT(A) before Hon’ble ITAT. The appeal of the Revenue is still pending before Hon’ble ITAT. After taking into consideration the facts of the case and the information and details furnished 3 ITA Nos.6147 & 6148/Del/2016 by the assessee, total income in this case is assessed at Rs.2,68,10,740/-. Book profit u/s 115JB is assessed at Rs.8,92,72,580/-, as already assessed vide order u/s 143(3) passed on 23.12.2011.” 4. Thus, from the above, it is clear that the Assessing Officer made addition on the ground that in the original assessment u/s 143(3), the disallowance was made. He also noted that the Ld. CIT(A) has allowed the assessee’s appeal and the Revenue has filed appeal before ITAT. In these circumstances, he made the aforesaid disallowance. 5. The Ld. CIT(A) decided the issue by noting the fact as noted by the Assessing Officer and confirmed the addition. For Assessment Year 2010- 11, also on the same reasoning, the addition was made by the Assessing Officer in order passed u/s 153A r.w.s. 143(3) of the Act and the same was confirmed by the ld. CIT(A). 6. Against this order, the assessee has filed appeal before us. 7. We have heard the both the parties and perused the records. The ld. counsel for the assessee submitted that this ITAT in these cases of the assessee itself in appeals arising out of order passed u/s 143(3) for the same assessment year has found that the issue has been consistently decided in favour of the assessee and this is the fifth year of the claim. Hence, the ITAT directed the Assessing Officer to decide the issue afresh in light of the orders passed in earlier years. The common order of the ITAT for both the Assessment Years dated 21.11.2016 in ITA No.346 & 347/Del/2014 for Assessment Year 2009-10 & 2010-11 reads as under in the concluding portion:- 4 ITA Nos.6147 & 6148/Del/2016 “10. However, it is contended by the ld. AR for the assessee that in the preceding years, transport subsidy is being treated as income derived from industrial undertaking and assessee has been allowed deduction u/s 80IC. This view has not been controverted by the revenue. Keeping in view the undisputed fact that this is the 5th year of claim made by the assessee u/s 80IC and the assessee has been continuously allowed deduction u/s 80IC qua transport subsidy and AO/CIT(A) have not brought on record any reason for departing from the previous years as on the same set of facts pertaining to the year under assessment, the issue is required to be restored to the AO to decide afresh in the light of the orders passed in the preceding years. So, the grounds no.1 to 5 in both the assessment years i.e. 2009-10 & 2010-11 are determined in favour of the assessee for statistical purposes.” 8. Following the same, in the giving effect of the order of the ITAT, the Assessing Officer accordingly allowed the issue in favour of the assessee. 9. Ld. counsel for the assessee submitted that it is the very same issue which has been repeated this year in the case of the assessee in assessment u/s 153A assessment. He claimed that as in the original assessment, the same stood covered by the decision of the ITAT, the issue raised by the assessee in this case deserves to be deleted. 10. Per contra, the Ld. DR relied upon the orders of the Assessing Officer. 11. Upon careful consideration, we note that the same issue was agitated before the ITAT when the addition was made u/s 143(3). When the matter travelled to the ITAT, the ITAT directed that as in previous years, the matter needs to be decided in favour of the assessee and that is the reason, it remanded the matter to the file of the Assessing Officer to act accordingly. Thus, it is clear that the issue now stands covered in favour of the assessee by the decision of the ITAT as above. The Revenue 5 ITA Nos.6147 & 6148/Del/2016 has not challenged the aforesaid ITAT order and the same has not been reversed by Hon’ble High Court. In this view of the matter, holding that the issues is covered in favour of the assessee by the aforesaid order of ITAT in accordance with the direction of ITAT in that case, we direct the Assessing Officer in these cases also to decide the issue afresh in light of the orders passed in preceding years. 12. In the result, these appeals of the assessee are stand allowed for statistical purpose. Order pronounced in the open court on 20/07/2022. Sd/- Sd/- [YOGESH KUMAR US] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; 20.07.2022. f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi