VAPCO PACKAGING INDUSTRIES PRIVATE LIMITED,CHANDIGARH V. DEPUTY COMMISSIONER OF INCOME TAX, CHANDIGARH

ITA 1116/CHANDI/2025

AI Insights

The case involves Vapco Packaging Industries Private Limited, which appealed against the order of the Addl. CIT(A) denying them the concessional corporate tax rate of 15% under section 115BAB of the Income Tax Act, 1961, for the Assessment Year 2023-24. The Addl. CIT(A) had initially denied the claim on the grounds that the assessee did not debit any expenses related to manufacturing activities, suggesting that no such activities had commenced. However, the assessee provided evidence in the form of the ITR and other documents showing that manufacturing activities had indeed started, including debits for freight outward, power and fuel, salaries and wages, and depreciation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782228 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2024-2025
• Appeal Filed On: 30-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: B.M. MONGA; ROHIT
• Keywords: Set aside; Depreciation

Judgement Text

" आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 1116/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2024-25 Vapco Packaging Industries Private Limited, PlotNo. 807, Industrial Area, Phase 2, Chandigarh बनाम DCIT, Circle 1, Chandigarh èथायी लेखा सं./PAN NO: AAJCV0621L अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Physical Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri B.M.Monga, Shri Rohit Kaura and Ms. Khyati Avnish, Advocates राजèव कȧ ओर से/ Revenue by :Dr. Ranjit Kaur, Addl. CIT, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 27.10.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 31.10.2025 आदेश/Order The present appeal has been preferred by the assessee against the order dated 23.06.2025 passed by the Ld. Addl. / JCIT (Appeals) [hereinafter referred to as ‘Addl. CIT(A)’], for the Assessment Year 2023-24. Printed from counselvise.com 1116 -Chd-2025 Vapco Packaging Industries Private Limited, Chandigarh 2 2. The Assessee in this appeal is aggrieved by the action of the lower authorities in denying the claim to the Assessee u/s 115BAB of the Income Tax Act, 1961 (in short 'the Act’) for a concessional corporate tax rate of 15% (plus surcharge and cess) for new manufacturing domestic companies subject to fulfilment of conditions as stipulated under the relevant provisions. 3. The Addl. CIT(A) has mentioned in his order that the Assessee, though, has complied with all the formalities / conditions for the claim u/s 115BAB, however, the Assessee had not debited any expenses on raw materials, wages, power, depreciation etc. and, hence, it indicated that the Assessee did not start his manufacturing activity during the year. He observed that section 115BAB requires actual manufacturing activity during the relevant year. He, therefore, observed that since the manufacturing activity of the Assessee had not commenced during the year, hence, the Assessee was not eligible for the aforesaid claim of concessional rate of tax u/s 115BAB of the Act. Printed from counselvise.com 1116 -Chd-2025 Vapco Packaging Industries Private Limited, Chandigarh 3 4. I have heard the rival contention and gone through the record. The ld. AR of the Assessee submitted that, in fact, the Ld. Addl. CIT(A) mistook from the return of income and relevant papers that the Assessee had not debited expenses towards raw material, wages, power, depreciation etc. from which he observed that the Assessee had not started its manufacturing activity. The ld. AR has brought my attention to the copy of the ITR alongwith computation of income and, in particular, page 24 of the paper book, a perusal of which reveals that the Assessee had duly debited freight outward expenses, power and fuel expenditure, salary and wages including contribution to recognized provident fund, depreciation amortization expenditure etc. Even the Assessee has duly shown the closing stock of furnished goods. All these facts indicate that the manufacturing activity was duly started during the year. The Ld. CIT(A) did not take proper notice of the relevant columns of the return of income. 5. The ld. DR could not rebut the aforesaid factual aspect on the file. In view of this, the impugned order of the Ld. CIT(A) is set aside and the Assessing Officer is Printed from counselvise.com 1116 -Chd-2025 Vapco Packaging Industries Private Limited, Chandigarh 4 directed to allow the claim of the Assessee u/s 115BAB of the Act. 6. The appeal of the Assessee stands allowed. Order pronounced on 31.10.2025. Sd/- (SANJAY GARG) Judicial Member “आर.क े.” आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआयुÈत/ CIT 4. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar Printed from counselvise.com "