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

ITA 6151/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3052 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.6151/DEL/2016 ASSESSMENT YEAR : 2012-13 FLEX FOODS LTD., 305, 3 RD FLOOR, BHANOT CORNER, PAMOSH ENCLAVE, GREATER KAILASH-I, NEW DELHI. PAN: AAACF0108K VS. ACIT, CENTRAL CIRCLE-27, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. RASTOGI, ADVOCATE DEPARTMENT BY : MS RACHNA SINGH, CIT, DR DATE OF HEARING : 22.03.2018 DATE OF PRONOUNCEMENT : 23.03.2018 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 10.10.2016 IN RELATION TO THE ASSE SSMENT YEAR 2012-13. ITA NO.6151/DEL/2016 2 2. THE ONLY ISSUE RAISED IS AGAINST NOT ALLOWING DE DUCTION U/S 80IC OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) ON SUBSIDY AMOUNTING TO RS.1.53 CRORE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS ORIGINAL RETURN DECLARING INCOME OF RS.5.73 CRORE A ND BOOK PROFIT OF RS.6.31 CRORE. THE ASSESSEE CLAIMED DEDUCTION U/S 80IC ON THE AMOUNT OF SUBSIDY AMOUNTING TO RS.1.53 CRORE. THE ASSESSING OFFICER, FOLLOWING HIS VIEW TAKEN IN EARLIER YEARS, DISALLOWED THE SAME VIDE AS SESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 27.02.2015. IT IS A MATTER OF RECORD THAT SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 19.02.2014 IN M/S UFLEX GROUP OF CASES AND THE ASSESSEE IS PART OF THE SAME. THE IN STANT ASSESSMENT ORDER WAS PASSED U/S 143(3) READ WITH SECTION 153A ON 11. 2.2016 NOT GRANTING DEDUCTION U/S 80IC ON THE AMOUNT OF SUBSIDY ON THE PREMISE THAT THE CLAIM OF THE ASSESSEE WAS DISMISSED IN THE ORIGINAL ASSES SMENT AGAINST WHICH APPEAL WAS PENDING BEFORE THE LD. CIT(A). THE ASSE SSEES CONTENTION CAME TO BE REJECTED IN THE IMPUGNED ORDER, AGAINST WHICH THE APPEAL HAS BEEN PREFERRED BEFORE THE TRIBUNAL. ITA NO.6151/DEL/2016 3 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. THE LD. DR CONTENDED THAT SUCH CLAIM OF DE DUCTION U/S 80IC WAS RIGHTLY DENIED AS THE SAME COULD NOT HAVE BEEN CONS IDERED IN THE ASSESSMENT U/S 153A AS THE AMOUNT OF TOTAL INCOME D ETERMINED IN THE ORIGINAL ASSESSMENT ORDER WAS TO BE ADOPTED AS SUCH IN THIS ASSESSMENT U/S 153A. 5. IN THIS REGARD, IT IS RELEVANT TO NOTE THAT SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 19.02.2014. RETURN FOR THE YEAR UNDER CONSIDERATION, NAMELY, A.Y. 2012-13, WAS PENDING CONSIDERATION BEF ORE THE ASSESSING OFFICER AT THAT TIME. IT IS EVIDENT FROM THE DATE O F THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3), BEING 27.02.2015, THA T THE ASSESSMENT ORDER WAS PASSED AFTER THE DATE OF SEARCH. IN THE CURRENT SCHEME OF SEARCH ASSESSMENTS, ALL THE PENDING ASSESSMENTS AS ON THE DATE OF SEARCH ARE TO BE ABATED AND IN LIEU THEREOF, FRESH ASSESSMENTS ARE R EQUIRED TO BE DONE U/S 153A. IN SUCH FRESH ASSESSMENTS, THE ASSESSEE CAN RAISE ANY CLAIM. FOR ALL PRACTICAL PURPOSES, THE ASSESSMENT MADE U/S 153A IN RESPECT OF NON- COMPLETED ASSESSMENTS IS A FULL-FLEDGED ASSESSMENT ENCOMPASSING ALL THE ISSUES FOR CONSIDERATION RELATING TO ASSESSMENT. AU CONTRAIRE, THERE CAN BE ITA NO.6151/DEL/2016 4 ASSESSMENTS WHICH STAND COMPLETED ON THE DATE OF SE ARCH. SCOPE OF SUCH LATER ASSESSMENTS IS CONFINED TO REITERATING THE OR IGINAL ASSESSMENTS PLUS MAKING FURTHER ADDITIONS ON THE BASIS OF FRESH INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 6. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT I S FOUND THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S 153A READ WITH SECTION 143(3) ON 11.02.2016 WAS IN RESPECT OF PEND ING ASSESSMENT FOR WHICH THE ASSESSEE WAS LEGALLY ENTITLED TO MAKE ANY CLAIM. THE CONTENTION OF THE LD. DR THAT THE ORIGINAL ASSESSMENT WAS TO B E REPEATED IN THE FRESH ASSESSMENT PURSUANT TO SEARCH U/S 153A OF THE ACT, IS NOT APPROPRIATE BECAUSE AS ON THE DATE OF SEARCH, THE INSTANT YEAR WAS PENDING FOR ASSESSMENT AND LOGICALLY ONLY ONE ASSESSMENT ORDER WAS REQUIRED TO BE PASSED, AND THAT TOO, U/S 153A OF THE ACT, INCORPOR ATING ALL THE ASPECTS OF THE ASSESSMENT. IN OUR OPINION, THE ASSESSMENT ORD ER PASSED BY THE ASSESSING OFFICER U/S 143(3) ON 27.02.2015 OUGHT NO T TO HAVE BEEN PASSED BECAUSE THE SAME RELATED TO A PENDING ASSESSMENT FO R WHICH THE ASSESSMENT COULD HAVE BEEN FRAMED ONLY U/S 153A OF THE ACT. B E THAT AS IT MAY, THERE CANNOT BE ANY DISPUTE ON THE LEGAL PROPOSITION THAT THE PENDING ASSESSMENT ITA NO.6151/DEL/2016 5 FOR THE ASSESSMENT YEAR 2012-13 UNDER CONSIDERATION WAS OPEN IN THE FRESH ROUND OF PROCEEDINGS FLOWING FROM SEARCH AND THE AS SESSEE COULD HAVE RAISED ANY CLAIM BEFORE THE ASSESSING OFFICER INCLU DING THE ONE WHICH HAS BEEN ASSAILED IN THE EXTANT APPEAL. IN THE LIGHT O F THE ABOVE DISCUSSION, WE HAVE NO HESITATION IN HOLDING THAT THE VIEW CANVASS ED BY THE AUTHORITIES BELOW IN PROHIBITING THE ASSESSEE AT THE THRESHOLD FROM RAISING SUCH A CLAIM IN THE FACE OF THE ORIGINAL ASSESSMENT ORDER HAVING BEEN PASSED BEFORE THE INSTANT ASSESSMENT ORDER, CANNOT BE COUNTENANCED. 7. ON MERITS, WE FIND THAT SIMILAR ISSUE ABOU T ALLOWING DEDUCTION U/S 80IC IN RESPECT OF SIMILAR SUBSIDY CAME UP FOR CONS IDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 AND 2010- 11. VIDE ORDER DATED 21.11.2016, THE TRIBUNAL IN IT A NOS. 346 & 347/DEL/2014, HAS SENT THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING IT AFRESH. A COPY OF SUCH ORDER IS AVAILA BLE IN THE PAPER BOOK. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER ON THIS SCORE AND REMIT THE MATTER TO THE FILE OF ASSE SSING OFFICER FOR CONSIDERING THE ASSESSEES CLAIM OF DEDUCTION U/S 8 0IC ON THE AMOUNT OF SUBSIDY IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN EARLIER YEARS. ITA NO.6151/DEL/2016 6 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES ONLY. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.201 8. SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 23 RD MARCH, 2018. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.