ACIT, Circle 1(1), Chandigarh v. M/s S.D.S. Electronics Pvt. Ltd.,, Chandigarh

ITA 1027/CHANDI/2010 | 2006-2007
Pronouncement Date: 27-07-2011 | Result: Dismissed

Appeal Details

RSA Number 102721514 RSA 2010
Assessee PAN AABCS9990D
Bench Chandigarh
Appeal Number ITA 1027/CHANDI/2010
Duration Of Justice 1 year(s) 5 day(s)
Appellant ACIT, Circle 1(1), Chandigarh
Respondent M/s S.D.S. Electronics Pvt. Ltd.,, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-07-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2006-2007
Appeal Filed On 22-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 1027/CHD/2010 (ASSESSMENT YEAR : 2006-07) THE A.C.I.T. VS. M/S S.D.S. ELECTRONICS PVT. LT D. CIRCLE 1 (1) PLOT NO.194 INDL. AREA-II CHANDIGARH. CHANDIGARH. PAN: AABCS9990D (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.JAISHREE SHARMA DR RESPONDENT BY : SHRI AJAY JAIN O R D E R PER SUSHMA CHOWLA J.M : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX(A) DATED 14.05.2010 REL ATING TO ASSESSMENT YEAR 2006-07 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. THE GROUND OF APPEAL RAISED BY THE REVENUE READS AS UNDER : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO RECOMPUTED THE ELIGIBLE PROFITS AND GRANT OF ELIGIBLE DEDUCTION ON THE CONFIRMED ADDITION MADE AS INFRINGEMENT OF LAW AS ANY ADDITION MADE DUE TO INFRINGEMENT OF LAW CANNOT BE ALLOWED AS DEDUCTION. 2 2. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE ISSUE IN THE PRESENT APPEAL STANDS COVERED BY THE ORDER OF THE T RIBUNAL IN I.T.A.NO. 854/CHD/2010 DATED 29.9.2010 VIDE PARA 8 TO 11 IN A SSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2006-07. 3. THE LEARNED D.R. PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE ASSESSIN G OFFICER THAT THE ASSESSEE HAS A UNIT AT PARWANOO THE INCOME OF WHIC H WAS CLAIMED AS EXEMPT UNDER SECTION 80IC OF THE ACT. ON THE PERUS AL OF DETAILS FURNISHED BY THE ASSESSEE IT WAS FOUND THAT THE AS SESSEE HAD SHOWN PROVISION FOR ROYALTY/TECHNICAL FEE TO THE TUNE OF RS.6 11 000/- WHICH WAS DISALLOWED BY THE ASSESSING OFFICER UNDER SECTI ON 43B OF THE ACT AND ADDED TO THE INCOME OF THE ASSESSEE. 5. BEFORE THE CIT(A) THE FIRST CLAIM OF THE ASSESSE E WAS THAT AS THE PAYMENT OF THE ROYALTY WAS NOT UNDER LAW THE PROVI SIONS OF SECTION 43B WERE NOT ATTRACTED. IT WAS FURTHER CLAIMED BY THE ASSESSEE THAT THE SAID ROYALTY HAS BEEN DISALLOWED AND THE ELIGIBLE PROFIT S OF THE PARWANOO UNIT CONSEQUENTLY WOULD INCREASE AND THE ASSESSEE WAS EN TITLED TO THE DEDUCTION UNDER SECTION 80IC OF THE ACT @ 100% ON E NHANCED TAXABLE PROFITS OF PARWANOO UNIT. RELIANCE WAS PLACED ON THE ORDER OF THE CIT(A) IN THE CASE OF IND. SWIFT LIMITED (ORDER DAT ED 12.6.2009). THE CIT(A) HAD REJECTED THE PLEA OF THE ASSESSEE THAT T HE PROVISIONS OF SECTION 43B OF THE ACT WERE NOT ATTRACTED IN THIS C ASE. HOWEVER THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION TO THE SAID ORDER DATED 26.2.2010 AND PLEADED THAT THE SECOND ALTERNATE PLE A WAS NOT CONSIDERED AND ADJUDICATED UPON BY THE CIT(A). THE CIT(A) ADM ITTED TO HAVE NOT 3 ADJUDICATED THE SECOND PLEA OF THE ASSESSEE AND HEL D THAT THE INCOME OF THE UNIT WHICH WAS ELIGIBLE FOR 100% TAX EXEMPTION WOULD REQUIRE RECOMPUTATION OF ELIGIBLE PROFITS WHERE THERE IS DI SALLOWANCE OF ANY EXPENDITURE. THE CIT(A) PLACED RELIANCE ON THE RAT IO LAID DOWN BY THE TRIBUNAL IN M/S IND. SWIFT IN I.T.A.NO. 890/CHD/20 09 RELATING TO ASSESSMENT YEAR 2004-05 AND THE RELEVANT PORTION OF THE DECISION IS REPRODUCED AT PAGE 3 OF THE APPELLATE ORDER. IN VI EW THEREOF THE ASSESSING OFFICER WAS DIRECTED TO RECOMPUTE THE ELI GIBLE PROFITS OF PARWANOO UNIT WHICH IN TURN WERE ENTITLED TO 100% E XEMPTION. 6. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID D IRECTIONS OF THE CIT(A) AND HAVE RAISED THE ISSUE THAT WHERE THE AD DITION WAS MADE ON ACCOUNT OF INFRINGEMENT OF LAW THERE WAS NO JUSTIF ICATION IN RECOMPUTING THE ELIGIBLE PROFITS AND GRANTING THE E LIGIBLE DEDUCTION ON SUCH CONFIRMED ADDITION. 7. THE ISSUE STANDS COVERED BY THE ORDER OF THE TRI BUNAL (SUPRA) AND ON THE PERUSAL OF THE SAME WE FIND THAT THE ISSUE B EFORE THE TRIBUNAL WAS IN CONNECTION WITH THE DEDUCTION ALLOWABLE OF THE A FORESAID AMOUNT DEBITED ON ACCOUNT OF ROYALTY PAYMENT AND IT WAS HE LD THAT THE SAME WAS AN ALLOWABLE DEDUCTION DESPITE THE PROVISIONS OF SE CTION 43B OF THE ACT. HENCE THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE AMOUNTING TO RS.6 11 00 0/- HAS BEEN ALLOWED BY THE TRIBUNAL AS A DEDUCTION IN THE APPEA L FILED BY THE ASSESSEE RELATING TO ASSESSMENT YEAR 2006-07. ONCE THE SAID ADDITION HAS BEEN DELETED IN THE HANDS OF THE ASSESSEE THERE IS NO MERIT IN RECOMPUTATION OF ELIGIBLE PROFITS AGAINST WHICH DED UCTION UNDER SECTION 4 80IC OF THE ACT WAS TO BE COMPUTED. ACCORDINGLY TH E PRESENT APPEAL FILED BY THE REVENUE BECOMES INFRUCTUOUS AND THE SA ME IS DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DAY OF JULY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27 TH JULY 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH