The Assistant Commissioner of Income Tax, Srinagar V. M/s Jammu & Kashmir Cement Ltd, Srinagar

ITA 629/ASR/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4557 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-05-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISHRA
• Assessee Lawyers: R L GUPTA
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 629/(ASR)/2016 AS SESSMENT YEAR: 2012-13 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, SRINAGAR VS. JAMMU & KASHMIR CEMENTS LTD. NAWAI SUBH COMPLEX, ZERO BRIDGE, SRINAGAR, KASHMIR [PAN: AAACJ 6799A] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. A. N. MISHRA (D.R.) RESPONDENT BY: SH. R. L. GUPTA (ADV.) DATE OF HEARING: 16.05.2018 DATE OF PRONOUNCEMENT: 24.05.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU ('CIT(A )' FOR SHORT) DATED 19.07.2016, PARTLY ALLOWING THE ASSESSEES APPEAL C ONTESTING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREI NAFTER) DATED 20.03.2015 FOR THE ASSESSMENT YEAR (AY) 2012-13. 2. THE SOLE ISSUE ARISING IN THE INSTANT APPEAL IS THE MAINTAINABILITY IN LAW, AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, OF THE DELETION OF THE DISALLOWANCE U/S. 80IB AS DIRECTED BY THE LD. CIT(A). ITA NO. 629/ASR/2016 (AY 2012-13) ASST. CIT V. JAMMU & KASHMIR CEMENTS LTD. 2 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE COMPANY, RETURNING NIL INCOME ON 29.09.2012, WAS OBSERVED DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER (AO) TO HAVE C LAIMED DEDUCTION U/S. 80IB OF THE ACT QUA THE FOLLOWING INCOMES, AGGREGATING TO RS.2,07,10,5 31/-, DISCLOSED PER ITS PROFIT AND LOSS (P&L) ACCOUNT FOR THE RELEVANT YEAR ACCOMPANYING ITS RETURN OF INCOME: PARTICULARS AMOUNT (RS.) OTHER INCOME 5,66,783/- INTEREST ON FDR 1,85,82,243/- INTEREST ON MARGIN MONEY 1,3,07,169/- CLAIM FOR INSURANCE 2,54,336/- THE SAME WERE CLEARLY NOT DERIVED FROM THE ASSESSEE S INDUSTRIAL UNDERTAKING MANUFACTURING CEMENT. ACCORDINGLY, THE CLAIM OF DED UCTION U/S. 80IB, ELIGIBLE AT 100% OF THE RELEVANT INCOME, WAS DISALLOWED QUA THE SAID INCOMES, COMPUTING THE ASSESSEES INCOME AT RS.207.11 LACS. RELIANCE FOR T HE PURPOSE WAS PLACED BY THE AO ON SEVERAL DECISIONS, INCLUDING BY THE APEX COUR T AND THE HON'BLE JURISDICTIONAL HIGH COURT, IN SUPPORT OF HIS CASE T HAT THE IMPUGNED INCOMES WERE NOT DERIVED FROM THE ASSESSEES INDUSTRIAL UNDERTAK ING. IN APPEAL, WHILE THE LD. CIT(A) AGREED WITH THE AO IN PRINCIPLE, HE HELD THA T IN-AS-MUCH AS THE ASSESSEE HAD, ON ACCOUNT OF LOSS OF RS.1,54,53,278/- FROM IT S INDUSTRIAL UNDERTAKING, I.E., DISREGARDING THE IMPUGNED INCOMES CREDITED TO THE P &L A/C, THE DISALLOWANCE U/S. 80IB IS TO BE REDUCED BY THE SAID AMOUNT. THE RELEV ANT PART OF HIS ORDER READS AS UNDER: (AT PAGES 6-7 OF HIS ORDER) HOWEVER, THE ARGUMENT OF THE APPELLANT THAT IF OTH ER INCOME OF RS.2,07,10,531/- ARE NOT CONSIDERED AS DERIVED FROM INDUSTRIAL UNDERTAKING A ND SEPARATED FROM PROFIT DERIVED FROM ITA NO. 629/ASR/2016 (AY 2012-13) ASST. CIT V. JAMMU & KASHMIR CEMENTS LTD. 3 INDUSTRIAL UNDERTAKING, IT WOULD GIVE RISE TO A LOS S OF RS.1,54,53,278/- FROM INDUSTRIAL UNDERTAKING WHICH SHOULD BE ALLOWED TO BE SET OFF A GAINST THE OTHER INCOMES IN THE NATURE OF INTEREST INCOME, MARGIN MONEY, INSURANCE CLAIM ETC. THE APPELLANTS CONTENTION SEEMS TO BE GENUINE. THEREFORE, IT IS HELD THAT THE ADDITION OF RS.2,07,10,531/- BE REDUCED TO RS.1,54,53,278/- AND ALLOWED TO BE SET OFF AGAINST THE INCOME EARNED FROM THE INDUSTRIAL ACTIVITIES. THE APPELLANT, THEREFORE, IS ENTITLED T O GET A RELIEF OF RS.52,57,253/-. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE ARE COMPLETELY UNABLE TO UNDERSTAND THE REVENUE S GRIEVANCE. THE LD. COUNSEL FOR THE ASSESSEE, SHRI R.L. GUPTA, ADVOCATE , WOULD ADDUCE THE ASSESSEES RETURN OF INCOME (COPY ON RECORD), DISCLOSING A GRO SS TOTAL INCOME (GTI) AT RS.52,57,253/-, ON WHICH THEREFORE DEDUCTION U/S. 8 0IB HAD BEEN CLAIMED BY THE ASSESSEE PER ITS RETURN OF INCOME. HOW, WE WONDER, THEN, COULD THE REVENUE BE AGGRIEVED BY THE IMPUGNED ORDER? THE ASSESSEE HAVIN G CLAIMED DEDUCTION U/S. 80IB ONLY AT RS.52.57 LACS (AS STATED, ON ACCOUNT O F LOSS OF RS.154.53 LACS ON THE OPERATION OF ITS INDUSTRIAL UNDERTAKING), THE LD. C IT(A) HAS SOUGHT TO RESTRICT THE DISALLOWANCE U/S. 80IB THERETO. IN FACT, AS APPAREN T, THERE HAS BEEN AN OMISSION ON THE PART OF THE LD. CIT(A) IN-AS-MUCH AS HE STATES OF HAVING ALLOWED RELIEF OF RS.52.57 LACS. HE HAVING TAKEN COGNIZANCE OF THE SE T-OFF OF RS.154.53 LACS (AGAINST THE IMPUGNED INCOMES OF RS.207.11 LACS), CLAIMED BY THE ASSESSEE AND NOT DISPUTED BY AO, THE RELIEF IN FACT ALLOWED BY HIM IS FOR THE SAID AMOUNT, I.E., RS.15 4.53 LACS. RATHER, WE CANNOT HELP ADDING THAT THE ASSESSMENT A T RS.207.11 LACS, I.E., AS AGAINST AT RS.52.57 LACS, AS WELL AS THE FILING OF THE INST ANT APPEAL BY THE REVENUE, CAN ONLY BE DEPRECIATED AND REVEALS A PERFUNCTORY MANNER IN WHICH THE ASSESSMENTS ARE MADE, AND THE APPEALS PREFERRED, BY IT. WE, ACCORDINGLY, FIND NO REASON FOR INTERFERENCE, E XCEPT THAT THE WORD TO BE READ AS BY IN THE PENULTIMATE SENTENCE OF THE LAS T PARA, REPRODUCED (SUPRA), AND THE AMOUNT RS.52,57,253/- IN THE FOLLOWING SENTEN CE BE READ AS RS.1,54,53,278/-. WE DECIDE ACCORDINGLY. ITA NO. 629/ASR/2016 (AY 2012-13) ASST. CIT V. JAMMU & KASHMIR CEMENTS LTD. 4 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON MAY 24, 2018 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 24.05.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: ASSISTANT COMMISSIONER OF IN COME TAX, CIRCLE-3, SRINAGAR (2) THE RESPONDENT: JAMMU & KASHMIR CEMENTS LTD . NAWAI SUBH COMPLEX, ZERO BRIDGE, SRINAGAR, KASHMIR (3) THE CIT(APPEALS), JAMMU (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER