Pragati Paper Industries Ltd., New Delhi v. Addl. CIT, New Delhi

ITA 4026/DEL/2010 | 2007-2008
Pronouncement Date: 07-01-2011 | Result: Allowed

Appeal Details

RSA Number 402620114 RSA 2010
Assessee PAN AABCP7684H
Bench Delhi
Appeal Number ITA 4026/DEL/2010
Duration Of Justice 4 month(s) 6 day(s)
Appellant Pragati Paper Industries Ltd., New Delhi
Respondent Addl. CIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 07-01-2011
Date Of Final Hearing 07-01-2011
Next Hearing Date 07-01-2011
Assessment Year 2007-2008
Appeal Filed On 31-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH F BENCH F BENCH F BENCH F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI R.P.TOLANI JM AND SHRI SHAMIM YAHYA A M BEFORE SHRI R.P.TOLANI JM AND SHRI SHAMIM YAHYA A M BEFORE SHRI R.P.TOLANI JM AND SHRI SHAMIM YAHYA A M BEFORE SHRI R.P.TOLANI JM AND SHRI SHAMIM YAHYA A M ITA NO. ITA NO. ITA NO. ITA NO. 4026/DEL/2010 4026/DEL/2010 4026/DEL/2010 4026/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 M/S PRAGATI PAPER INDUSTRIES M/S PRAGATI PAPER INDUSTRIES M/S PRAGATI PAPER INDUSTRIES M/S PRAGATI PAPER INDUSTRIES LIMITED LIMITED LIMITED LIMITED 10/5 EAST PATEL NAGAR 10/5 EAST PATEL NAGAR 10/5 EAST PATEL NAGAR 10/5 EAST PATEL NAGAR NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN NO. PAN NO. PAN NO. PAN NO.AABC AABC AABC AABCP7684H. P7684H. P7684H. P7684H. VS. VS. VS. VS. ADDL.COMMISSIONER OF ADDL.COMMISSIONER OF ADDL.COMMISSIONER OF ADDL.COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX RANGE RANGE RANGE RANGE- -- -14 14 14 14 NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.SAMPATH ADVOCATE. RESPONDENT BY : SHRI RAVI RAMA CHANDRAN SR.DR. ORDER ORDER ORDER ORDER PER R.P.TOLANI J PER R.P.TOLANI J PER R.P.TOLANI J PER R.P.TOLANI JM : M : M : M : THIS IS AN ASSESSEES APPEAL. FOLLOWING GROUNDS AR E RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(APPEALS) ERRED IN PASSING A NON - SPEAKING ORDER WHEREIN HE HAS SIMPLY REPLICATED TH E FINDINGS OF THE ASSESSING OFFICER WITHOUT ANY PROPE R ENQUIRY OR ATTEMPT TO ASCERTAIN TRUE FACTS OF THE C ASE; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(APPEALS) ERRED IN CONFIRMING AN ADDITION OF RS.85 76 544/- FROM THE ASSESSEES CLAIM U/S 80- IA OF THE ACT; 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(APPEALS) ERRED IN CONFIRMING AN ADDITION OF RS.18 36 000/- AS MADE BY THE AO BY REDUCING THE ASSESSEES CLAIM U/S 80-IC OF THE ACT; 4. ALL ACTIONS BEING ERRONEOUS UNWARRANTED AND UNJ UST MUST BE QUASHED. ITA-4026/DEL/2010 2 2. BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAPER AND PAPER PRODUCTS. THE ASS ESSEE HAS ALSO ESTABLISHED A CAPTIVE POWER GENERATING UNIT AT PUNJ AB FOR WHICH DEDUCTION U/S 80IA WAS CLAIMED BESIDES IN RESPECT O F PAPER UNIT DEDUCTION U/S 80IC WAS CLAIMED. FOR WORKING OUT EL IGIBLE PROFITS OF CAPTIVE POWER UNIT U/S 80IA THE SALE PRICE OF POWE R AT THE RATE OF ` 4.95 PER UNIT WAS ADOPTED BY THE ASSESSEE. AO HOW EVER APPLIED THE RATE OF ` 4.68 PER UNIT AND WORKED OUT THE ELIGIBLE PROFITS ACCORDINGLY. 3. QUA DEDUCTION U/S 80IC ASSESSEE CLAIMED HAVING SEPARATE DIRECTORS FOR POWER UNIT AT PUNJAB PAPER UNIT AT K ALA AMB AND HEAD OFFICE AND ACCORDINGLY THE PROFIT AND LOSS ACCOUNT OF DIFFERENT UNITS WAS PREPARED CLAIMING SALARY OF RESPECTIVE DIRECTOR IN DISTINCT UNIT. AO HOWEVER ALLOCATED THE DEDUCTION U/S 80IA AND 8 0IC BY PROPORTIONATELY DISTRIBUTING THESE EXPENSES ON DIRE CTORS REMUNERATION. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL WHERE TH E ACTION OF THE AO WAS CONFIRMED. AGGRIEVED ASSESSEE IS BEFORE US. 4. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET REQUESTED TO ADMIT ADDITIONAL EVIDENCE WHICH IS A RTI REPLY RECE IVED ON 1.2.2010 BY THE ASSESSEE ABOUT THE RATES OF PURCHASE OF ELECTRI CITY BY PUNJAB STATE ELECTRICITY BOARD (PSEB) FROM PRIVATE PARTIES WHICH IS AS UNDER:- MEMO NO.150/PCP/T-245 DATED : 01.02.2010 SUB : INFORMATION UNDER RTI ACT-2005 WITH REFERENCE TO YOUR LETTER DATED 01.01.10 THE DESIRED INFORMATION REGARDING MAXIMUM RATE OF PURCH ASE OF POWER FROM PRIVATE PARTIES DURING 2006-07 2007- 08 AND 2008-09 IS AS GIVEN BELOW: ITA-4026/DEL/2010 3 SR.NO. FINANCIAL YEAR MAXIMUM RATE OF PURCHASE OF POWER FROM PRIVATE PARTIES (RS./UNIT) 1 2006 - 07 6.15 2 2007 - 08 8.44 3 2008 - 09 8.54 5. LEARNED COUNSEL CONTENDS THAT THIS INFORMATION C LEARLY INDICATES THAT THE RATE OF ` 4.95 CHARGED BY THE ASSESSEE FOR CLAIMING DEDUCTION U/S 80IA WAS ABSOLUTELY REASONABLE AND AO HAD NO JU STIFICATION TO REDUCE IT FURTHER TO ` 4.68 PER UNIT FOR WORKING OU T DEDUCTION U/S 80IA. 6. SIMILARLY ASSESSEES WRITTEN SUBMISSIONS ABOUT DIFFERENT DIRECTORS BEING ASSIGNED RESPECTIVE UNIT AND CORREC TNESS OF DEBITING THEIR RESPECTIVE REMUNERATION WAS PERFECTLY JUSTIFI ED. WHEN THE SERVICES OF DIRECTORS ARE IDENTIFIABLE QUA RESPECTI VE UNIT THERE IS NO JUSTIFICATION TO ALLOCATE DIRECTORS REMUNERATION T O OTHER UNIT ON PRESUMPTION. THE ASSESSEES EXPLANATION HAS NOT BE EN CONSIDERED PROPERLY. 7. LEARNED DR ON THE OTHER HAND SUPPORTS THE ORDE RS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CONSIDER ED THE MATERIAL PLACED ON RECORD. AS THE RTI INFORMATION HAS BEE N RECEIVED BY THE ASSESSEE FROM PSEB ON 1.2.2010 AND LEARNED CIT(A)S ORDER HAS BEEN PASSED ON 20.11.2009 WE ARE INCLINED TO ADMIT THE RTI INFORMATION AS ADDITIONAL EVIDENCE. SINCE THIS RTI INFORMATION IS RELEVANT AND NEEDS TO BE CONSIDERED WHILE EXAMINING THE CLAIMS OF THE ASSESSEE IN OUR VIEW INTEREST OF JUSTICE WILL BE SERVED IF THE ISSU E IS RESTORED BACK TO THE FILE OF THE AO TO DECIDE THE SAME DE-NOVO AFTER CONSIDERING THE RTI INFORMATION RECEIVED BY THE ASSESSEE. ITA-4026/DEL/2010 4 8. APROPOS THE SECOND GROUND ALSO THE ASSESSEE CLA IMS TO HAVE EXPLAINED THE NATURE OF DUTIES OF RESPECTIVE DIRECT ORS QUA THEIR ASSIGNED UNITS. LOWER AUTHORITIES HAVE NOT ADVERTE D TO THE EXPLANATION OF THE ASSESSEE IN THIS BEHALF AND ON ASSUMPTION E XPENSES HAVE BEEN ALLOCATED. SINCE WE ARE SETTING ASIDE THE MAIN GRO UND WITH SAME OBSERVATIONS WE SET ASIDE THIS ISSUE ALSO BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER O BJECTIVELY CONSIDERING THE ASSESSEES EXPLANATION IN THIS REGA RD. 9. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY 2011. SD/- SD/- (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA ) )) ) (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI ) )) ) ACCOUNTANT M ACCOUNTANT M ACCOUNTANT M ACCOUNTANT M EMBER EMBER EMBER EMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 07.01.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR ITA-4026/DEL/2010 5