Standard Rubber Products, Uttrakhand V. ITO, Rudrapur

ITA 6421/DEL/2012

• Counselvise Citation: 642120114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 10-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: S K BANSAL
• Keywords: Business income
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SH.G.D.AGRAWAL, VICE PRESIDENT AND SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 6421 /DEL/201 2 (ASSESSMENT YEAR - 2009 - 10 ) STANDARD RUBBER PRODUCTS, A - 9, 10, GANPATI COMPLEX, NEAR RAILWAY CROSSING, KASHIPUR ROAD, RUDRAPUR, DIST. - UDDAM SINGH NAGAR, UTTRAKHAND - 263153 P AN - ABGFS0655J (APPELLANT) VS IT O , R UDRAPUR (RESPONDENT) APPELLANT BY SH.S.K. B ANSAL, CA RESPONDENT BY SH. RAMESH CHANDRA, CIT DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29.10.2012 OF CIT(A) - II, DEHRADUN PERTAINING TO 2009 - 10 ASSESSMENT YEAR WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II - DEHRADUN IS BAD IN LAW AND ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, DEHRADUN ERRED IN: A. DECIDING THE APPEAL WITHOUT AFFORDING A REASONABLE OPPORTUNITY TO THE APPELLANT FIRM OF BEING HEARD. B. NOT CONSIDERING THE SUBMISSIONS FURNISHED BY THE APPELLANT FROM TIME TO TIME DURING THE COURSE OF ASSESSMENT/APPEAL PROCEEDINGS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - II, DEHRADUN ERRED IN: A. CONFIRMING THE ADDITION OF RS.44,82,629/ - ON ACCOUNT OF NON ALLOWABILITY OF DEDUCTION U/S 80IC OF THE INCOME TAX ACT , 1961. B. HOLDING THAT INTEREST SUBSIDY OF RS.5,50,000/ - RECEIVED BY THE APPELLANT FIRM FROM THE STATE GOVERNMENT TOWARDS REIMBURSEMENT DATE OF HEARING 10 . 0 3 .2015 DATE OF PRONOUNCEMENT 31 . 0 3 .2015 2 I.T.A .NO. - 6421/DEL/2012 OF INTEREST PAID ON LOAN TAKEN IS NOT A INCOME DERIVED FROM INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF SECTION 80 - IC. 2. AT THE TIME OF HEARING ATTENTION WAS INVITED TO GROUND NO. - 2 RAISED BY THE ASSESSEE WHICH SHOWED THAT THE IMPUGNED ORDER WAS PASSED ON THE BASIS OF WRITTEN SUBMISSION AND WITHOUT HEARING THE ASSESSEE. ACCORDINGLY IT WAS PUT TO THE LD. AR THAT THE ISSUE CAN BE RESTORED TO THE CIT(A) SUBJECT TO THE ARGUMENTS OF THE DEPARTMENT. HOWEVER THE LD. AR INVITING ATTENTION TO PAPER BOOK PAGE NO. - 42 TO 46 AND GROUND NO. - 3 (A) SUBMITTED THAT IN VIEW OF THE PECULIAR FACTS WHERE THE AO VIDE HIS ORDER DATED 28.03.2013 IN 2010 - 11 ASSESSMENT YEAR HAS CONCLUDED THE ISSUE IN REGARD TO THE ASSESSEE FULFILLING THE CONDITIONS IN 80IC R.W.S 80IA(3) OF THE INCOME TAX ACT, 1961 IN THE INITIAL ASSESSMENT YEAR ITSELF. IN THE CIRCUMSTANCES IT WAS HIS PRAYER THAT HE DOES NOT WISH T O PRESS THE AFORE - MENTIONED GROUND N O . - 2 AND INSTEAD RELY ON THE ASSESSMENT ORDER FOR 2010 - 11 ASSESSMENT YEAR ON SIMILAR FACTS AND PRAY THAT THE ISSUE BE DECIDED ON THE BASIS OF THE RELEVANT FACTS. LD. SR. DR CONFRONTED WITH THE ORDER OF THE A SSESSING O FFICER P ASSED U/S 144(3) PLACED AT PAGES 42 TO 45 POSED NO CONTRARY ARGUMENTS I N VIEW OF THE CLEAR CUT FINDING GIVEN BY THE AO. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IN THE YEAR UNDER CONSIDERATION DECLARED NIL INCO ME BY WAY OF ELECTRONICALLY FI LING ITS RETURN WHICH WAS SUBJECTED TO SCRUTINY ASSESSMENT AFTER ISSUANCE OF NOTICE U/S 143(2) & 142(1) ETC. THE AO TOOK COGNIZANCE OF THE FACT THAT THE ASSESSEE DERIVES INCOME FROM MANUFACTURING AND TRADING OF AUTOMOBILE PARTS AND TOTAL SALES IN THE RELE VANT YEAR DISCLOSED WERE 5.14 CRORES. THE FACTS ON RECORD SHOW THAT THE ASSESSEE PUT FORTH THE FOLLOWING CLAIM BEFORE THE A.O: - 4. IT IS SEEN THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC OF THE I.T.ACT, 1961 FOR RS.44,82,629.00 AND AFTER CLAIMING DEDUC TION, THE TOTAL INCOME HAS BEEN SHOWN AT NIL. IT IS FOUND THAT THE INDUSTRIAL UNDERTAKING ESTABLISHED BY THE ASSESSEE IS LOCATED AT, KHASRA NO. - 128, KHA MIN, VILLAGE - JHAGARPURI OF TEHSIL - GADARPUR (DISTRICT - UDHAM SIGH NAGAR) WHICH HAS BEEN NOTIFIED BY THE C BDT, VIDE NOTIFICATION NO. - 177/2004 3 I.T.A .NO. - 6421/DEL/2012 DATED - 28.06.2004. THIS UNDERTAKING HAS BEGUN TO MANUFACTURE ARTICLES OR THINGS NOT BEING ARTICLES OR THINGS SPECIFIED IN THIRTEENTH SCHEDULE OF I.T. SCHEDULES IN THE F.Y.2006 - 07. THEREFORE, INITIAL ASSESSMENT YEAR IN THE INSTANT CASE IS 2007 - 08. THE ASSESSEE HAS FULFILLED THE CONDITIONS RELATING TO PLANT AND MACHINERY AND ARTICLE MANUFACTURED BY IT AS THE SAME ARE NOT LISTED IN THE SCHEDULE - XII OF THE I.T. SCHEDULES IN THE INITIAL ASSESSMENT YEAR AS WELL AS IN RELEVAN T ASSESSMENT YEAR. 3 .1 . IT IS SEEN THAT T HE SAID CLAIM WAS NOT ACCEPTED BY THE A.O. IN VIEW OF THE FOLLOWING FACTS: - HOWEVER, AS PER PROVISO TO NOTIFICATION NO.177/2004, THE AFORESAID NOTIFICATION IS APPLICABLE ONLY FOR THE KHASRAS, WHICH ARE FURTHER NO TIFIED BY THE STATE GOVERNMENT OF UTTARAKHAND. THE PROVISO TO AFORESAID NOTIFICATION NO. - 177/2004 DATED - 28.06.2004 IS REPRODUCED HEREUNDER: - PROVIDED THAT IN RESPECT OF THE INDUSTRIAL ESTATE OR INDUSTRIAL AREAS, AS THE CASE MAY BE, MENTIONED IN THE SCHEDULE, WHICH HAVE NOT BEEN NOTIFIED OR DESIGNATED AS SUCH BY THE STATE GOVERNMENT OF UTTARANCHAL, THIS NOTIFICATION SHALL TAKE EFFECT FROM THE DATE ON WHICH SUCH INDUSTRIAL ESTATES OR INDUSTRIAL AREA ARE NOTIFIED OR DESIGNATED BY STATE GOVERNMENT. 3 .2 . AS A RESULT THEREOF THE A.O. CONCLUDED THAT THE CLAIM OF THE ASSESSEE WAS NOT ALLOWABLE BECAUSE AS PER THE PROVISO TO THE AFORESAID NOTIFICATION I.E. NOTIFICATION NO.177/2004 DATED 28.6.2004, IT WAS STILL FURTHER REQUIRED TO BE NOTIFIED BY THE STATE GO VERNMENT OF UTTARAKHAND WHICH EVIDENTLY HAD NOT BEEN DONE BY THAT TIME. HOWEVER, NOW IN THE ORDER U/S 143(3) OF THE AO DATED 28.03.2013 IN 2009 - 10 ASSESSMENT YEAR I T I S S E E N T H A T THIS FORMALITY HAS BEEN FULFILLED. THUS IN THE FACE OF THE FOLLOWING SPEAKING FI NDING OF THE AO IN PARA 3 WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE HAS TO BE ALLOWED: - 3. IT IS SEEN THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC OF THE I.T.ACT, 1961 FOR RS.69,19,990.00 AND AFTER CLAIMING DEDUCTION, THE TOTAL INCOME HAS BEEN SHOWN AT NIL. IT IS OBSERVED THAT THE INDUSTRIAL UNDERTAKING ESTABLISHED BY THE ASSESSEE IS LOCATED AT KHASRA NO. - 128 KHA MIN, VILLAGE - JHAGARPURI OF TEHSIL - GADARPUR (DISTT. - U.S.NAGAR) WHICH HAS BEEN NOTIFIED BY THE CBDT, VIDE NOTIFICATION NO. - 177/2004 DA TED 28.06.2004. FURTHER, ON EXAMINATION IT IS OBSERVED THAT THE MANUFACTURE ARTICLE IS NOT BEING ARTICLES OR THINGS SPECIFIED IN THIRTEENTH SCHEDULE OF I.T. SCHEDULES IN THE F.Y.2009 - 10. THE ASSESSEE HAS FULFILLED THE CONDITIONS AS LAID DOWN IN SECTION 8 0IC READ WITH SECTION 80IA(3) OF THE INCOME TAX ACT, 1961 IN THE INITIAL ASSESSMENT YEAR AND HE HAS MANUFACTURED THE SAME ARTICLES IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS IN THE INITIAL ASSESSMENT YEAR. IN VIEW OF THE ABOVE, NO ADVERSE INFERENCE IS DRAWN ON THE ISSUE OF DEDUCTION CLAIMED U/S 4 I.T.A .NO. - 6421/DEL/2012 80IC OF THE I.T. ACT, 1961 BY THE ASSESSEE ON ACCOUNT OF PROFIT DERIVED FROM BUSINESS OF MANUFACTURING OF ARTICLES AND THINGS. 4. ACCORDINGLY IN VIEW OF THE ABOVE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES AS HA VE BEEN BROUGHT OUT ABOVE GROUND NO. - 1 BEING GENERAL IN NATURE REQUIRES NO SPECIFIC ADJUDICATION; GROUND NO. - 2 IS NOT PRESSED AND GROUND NO. - 3( A ) IS ALLOWED. 5 . THE ISSUE ADDRESSED IN GROUND NO.3(B) WAS NOT PRESSED BY THE LD. A.R. AT THE TIME OF HEARING IN VIEW OF THE SMALLNESS OF THE AMOUNT. HOWEVER, IT WAS HIS PRAYER THAT THE SAID GROUND IS GIVEN UP RESERVING THE RIGHT TO AGITATE THE ISSUE IN ANY SUBSEQUENT YEAR WHERE THE AMOUNT UNDER CONSIDERATION IS SUBSTANTIAL. THE LD.SR.D.R , SH. B.R.R.KUMAR THOUGH S TATED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE AS IT IS NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING AS HELD BY PANDYAN CHEMICALS 266 ITR 278 (S.C.) . HOWEVER SINCE THE ASSESSEE IS NOT PRESSING THE ISSUE IN THE YEAR UNDER CONSIDERATION GROUND NO.3(B) IS DISMISSED AS NOT PRESSED GIVING THE ASSESSEE LIBERTY TO AGITATE THE ISSUE IN SUBSEQUENT YEAR AS THE FACTUM OF NOT PRESSING THIS ISSUE IN THE PRESENT APPEAL WILL NOT PREJUDICE THE ASSESSEE IN THE SUBSEQUENT YEARS. 6. IN THE RESULT THE APPEAL OF THE A SSESSEE IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 1 S T OF MARCH 2015 . S D / - S D / - ( G.D.AGRAWAL ) (DIVA SINGH) VICE PRESIDENT JUDICIAL MEMBER DATED: 3 1 / 03 /201 5 *AMIT KUMAR /MANGA * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI