Innova Captab, Baddi V. DCIT, Parwanoo

ITA 620/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8238 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 19-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 620/CHD/2016 ASSESSMENT YEAR : 2012-13 M/S INNOVA CAPTAB, VS THE DCIT, PLOT NO. 81B, EPIP, CIRCLE, PHASE 1, JHARMAJRI, PARWANOO. BADDI. PAN: AAFFV6014N (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 01.03.2017 DATE OF PRONOUNCEMENT : 03.03.2017 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) SHIMLA DATED 23.03.20 16 FOR ASSESSMENT YEARS 2012-13 ON THE FOLLOWING GROUN DS : 1. THAT THE ORDER PASSED BY THE LEARNED CIT (APPEALS) SHIMLA HAS ERRED ON LAW AND ON THE FACTS OF THE CASE AND I S NOT JUSTIFIED IN UP HOLDING THE DISALLOWANCE OF RS.3,32,391/- AS BUSINESS PROFIT ON ACCOUNT OF INTEREST ON FDR'S PLEDGED WITH BANK A S MARGIN MONEY FOR MAKING LETTER OF CREDIT (LC) FOR MAKING T HE PURCHASES AND THUS DISALLOWING THE DEDUCTION U/S 801C ON THE SAME. 2. THAT THE ORDER PASSED BY THE LEARNED CIT (APP EALS) SHIMLA 2 HAS ERRED ON LAW AND ON THE FACTS OF THE CASE AND I S NOT JUSTIFIED IN UP HOLDING THE DISALLOWANCE OF THE DEDUCTION CLA IMED BY THE APPELLANT AT 100% U/S 80IC AND ALLOWING ONLY 25% A ND THUS REJECTING THE CLAIM OF THE FIRM THAT IT IS ELIGIBLE FOR 100% DEDUCTION AFTER MAKING THE SUBSTANTIAL EXPANSION ON 26-03-2010. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FIRM IS ENGAGED IN MANUFACTURING OF PHARMACEUTICALS ITEM S. THE ASSESSEE STARTED ITS BUSINESS ACTIVITY/OPERATIO N ON 16.10.2006 AND INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION UNDER SECTION 80IC OF INCOME TAX ACT WAS MENTIONED AS ASSESSMENT YEAR 2007-08. THE ASSESSIN G OFFICER NOTICED THAT ASSESSEE HAS ALSO CLAIMED TO H AVE UNDERTAKEN SUBSTANTIAL EXPANSION DURING FINANCIAL Y EAR 2009-10 AND ON THE BASIS OF THE SAID SUBSTANTIAL EXPANSION IT HAS CLAIMED 100% DEDUCTION UNDER SECTI ON 80IC OF THE ACT BY CLAIMING ASSESSMENT YEAR 2011-12 TO BE INITIAL ASSESSMENT YEAR. THE ASSESSING OFFICER HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 80IC OF T HE ACT, SINCE ASSESSEE FIRM HAD ALREADY CLAIMED DEDUCTION UNDER SECTION 80IC OF THE ACT @ 100% FOR FIVE YEARS , ASSESSMENT YEAR 2007-08 TO ASSESSMENT YEAR 2011-12 I.E. FROM THE DATE OF SETTING UP OF THE INDUSTRIAL UNDERTAKING AND IN VIEW OF THE SAME, IT WOULD BE ELIGIBLE FOR CLAIM OF DEDUCTION @ 25% OF ITS ELIGIB LE BUSINESS PROFIT FOR THE REMAINING FIVE YEARS. THE ASSESSING OFFICER DENIED CLAIM OF 100% DEDUCTION AN D RESTRICTED THE SAME TO 25% OF ELIGIBLE PROFITS FOR THE YEAR 3 UNDER CONSIDERATION. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CREDITED AN AMOUNT OF RS. 3,32,291/- UNDER THE HEAD INTEREST ACCRUED ON FDR & OTHERS A ND ALSO CLAIMED DEDUCTION UNDER SECTION 80IC OF THE AC T ON THIS RECEIPT. WHEN CONFRONTED, THE ASSESSEE SUBMIT TED THAT SAID INCOME IS CONSEQUENTIAL TO BUSINESS AND HENCE, DEDUCTION UNDER SECTION 80IC OF THE ACT WAS RIGHTLY CLAIMED ON THE SAME. THE CONTENTION OF THE ASSESSEE WAS NOT FOUND TO BE ACCEPTABLE BY THE ASSESSING OFFICER IN VIEW OF THE JUDGEMENT OF HON'B LE SUPREME COURT IN THE CASES OF M/S LIBERTY INDIA LTD . 317 ITR 218 AND PANDIAN CHEMICALS LTD. 262 ITR 278 AND THE ASSESSING OFFICER ACCORDINGLY HELD THE AMOU NT OF RS. 3,32,291/- AS INELIGIBLE FOR CLAIM OF DEDUCT ION UNDER SECTION 80IC OF THE ACT. 3. THE LD. CIT(APPEALS) NOTED THAT BOTH THE ISSUES ARE COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT CHANDIGARH IN THE CASE OF M/S HYCRON ELECTRONICS REPORTED IN 41 ITR (TRIBUNAL) (CHD) 486 AND DECIDED BOTH THE GROUNDS AGAINST THE ASSESSEE. 4. NONE PRESENT ON BEHALF OF THE ASSESSEE DESPITE NOTIFYING DATE OF HEARING. 5. THE LD. DR CONTENDED THAT BOTH THE ISSUES ARE COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT CHANDIGARH IN THE CASE OF M/S HYCRON ELECTRONICS (SUPRA). 4 6. CONSIDERING THE ABOVE FACTS, WE ARE OF THE VIEW BOTH THE ISSUES ARE COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT CHANDIGARH IN THE CASE OF M/S HYCRON ELECTRONICS (SUPRA). THE ORDER IS REPRODUCED BY THE LD. CIT(APPEALS) IN THE IMPUGNED ORDER, THEREFORE, FOLL OWING THE SAME, WE DISMISS THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD MARCH,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD