DCIT, Faridabad v. Mr. Sunil Prakash, Faridabad

ITA 6153/DEL/2015 | 2012-2013
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 615320114 RSA 2015
Assessee PAN AFVPP5777K
Bench Delhi
Appeal Number ITA 6153/DEL/2015
Duration Of Justice 2 year(s) 11 day(s)
Appellant DCIT, Faridabad
Respondent Mr. Sunil Prakash, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 30-11-2017
Assessment Year 2012-2013
Appeal Filed On 19-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F NEW DELHI BEFORE SHRI R.S. SYAL VICE PRESIDENT AND SMT. BEENA A PILLAI JUDICIAL MEMBER ITA NO. 6153 /DEL/2015 A.Y. 201 2 - 13 D CIT CIRCLE II BLOCK 1 - B CGO COMPLEX NH IV FARIDABAD VS. SH. SUNIL P RA KASH PLOT NO.62 SECTOR 25 FARIDABAD PAN: AFVPP5777K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ATIQ AHMAD SR.D.R RESPONDENT BY SH TARUN KUMAR ADV. DATE OF HEARING 21 ST NOVEMBER 2017 DATE OF PRONOUNCEMENT ............ NOVEMBER 2017 ORDER PER BEENA A PILLAI JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DATED 23/09/13 PASSED BY LD. CIT (A) FARIDABAD FOR ASSESSMENT YEAR 2012 - 13 ON THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD.CIT(A) WAS RIGHT IN LAW IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80IB AND 80IC OF THE INCOME TAX ACT 1961 DISREGARDING THE FACT THAT ASSESSEE WAS NOT ENGAGED IN THE MANUFACTURING ACTIVITIES IN THE SAID UNIT AS PER PROVISION OF LAW? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD.CIT(A) WAS RIGHT IN LAW IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80IB AND 80IC OF THE INCOME TAX ACT 1961 ON THE INCOME ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 2 OF 9 ACCRUED FROM THE CENTRAL EXCISE DUTY REFUND DISREGARDING THE FACT THAT THE SAME WAS NOT DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING AS PER PROVISION OF SECTION 80IB(4) OF THE ACT? 3. THE APPELLANT CRAVES FOR PERMISSION TO ADD DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER . 2.1. A SSESSEE FILED ITS RETURN OF INCOME ON 30/09/12 DECLARING TOTAL INCOME OF RS.2 73 5 6 100/ - AFTER CLAIMING DEDUCTION UNDER SECTION 80 IB AND 80 IC OF THE A CT. THE RETURN WAS SELECTED FOR SCRUTINY AND NOTICES UNDER SECTION 143 (1) AND 143 (2) OF THE A CT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO NOTICES RECEIVED REPRESENTATIVES OF THE ASSESSEE APPEARED BEFORE LD.AO AND FILED NECESSARY INFORMATION/DOCUMENTS/BOOKS OF ACCOUNTS WHICH WERE EXAMINED ON TEST CHECK BASIS AND THE CASE WAS DISCUSSED. 2.2. DURING ASSESSMENT PROCEEDINGS LD.AO OBSERVED THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SHEET METAL COMPONENTS ENGINEERING PARTS D.G.SETS ELECTRICAL PANELS CANOPY ETC. IT WAS OBSERVED BY LD.AO THAT IN THE COMPUTATION OF INCOME ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80 IB OF THE A CT FOR RS.18 18 404/ - AND U/S 80 IC FOR RS.35 10 248/ - IN RESPECT OF UNITS AT JAMMU AND KASHIPUR RESPECTIVELY. 3. ON EXAMINATION OF THE DETAILS FILED THE ASSESSING OFF ICER OBSERVED THAT ASSESSEE WAS OPERATING T W O UNIT S AT JAMMU IN TH E NAME AND STYLE OF M/S GSP S TRUCTURES AND M/S GSP P OWER P ROJECTS. IT WAS OBSERVED THAT THESE UNITS STARTED FUNCTIONING W.E.F. 27/06/05 AND 04/04/2007 RESPECTIVELY AND HAD CLAIMED DEDUCTION ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 3 OF 9 UNDER SECTION 80 IB IN RESPECT OF THE PROFITS DERIVED FROM THESE UNITS. 3.1. FURTHER IT WAS OBSERVED THAT ASSESSEE HAD STARTED ANOTHER UNIT IN THE NAME OF M/S GSP P OWER P ROJECTS AT KASHIPUR UTTARACCHAL W.E.F. 07/09/07 AND HAD CLAIMED DEDUCTION UNDER SECTION 80 IC OF THE A CT IN RESPECT OF THE PROFITS DERIVED FROM THIS UNIT. 4. GROUND NO. 1. LD.A O WAS OF THE OPINION THAT ASSESSEE WAS MERELY ASSEMBLING PARTS AT THESE UNITS AND NO MANUFACTURING ACTIVITY OF ANY ARTICLE OR THING AS REQUIRED BY PROVISIONS OF SECTION 80 IB AND 80 IC OF THE A CT WERE CARRIED OUT. HE ACCORDINGLY DISALLOWED THE CLAIM OF ASSESSEE. 4.1. AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A). LD. CIT (A) BY RELYING UPON THE DECISION OF HIS PREDECESSOR IN ASSESSEE S OWN CASE FOR ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 DELETED THE ADDITION AND ALLOWED THE CLAIM MADE BY ASSESSEE UNDER SECTION 80 IB AND 80 IC OF THE A CT. HE HELD AS UNDER: 6.5. HENCE AFTER A CAR EFUL CONSIDERATION OF THE FACTS OF THE CASE TOGETHER WITH VARIOUS JUDICIAL PRONOUNCEMENTS ON THIS ISSUE PARTICULARLY THE CASE OF CIT VS. JACKSON ENGINEERS LTD. (SUPRA) AND ALSO CONSIDERING MY PREDECESSORS ORDERS IN APPELLANT S CASE ON THE SAME ISSUE IN A PPEAL NOS. 261/2010 - 11 340/2011 - 12 08/2012 - 13 AND 305/2013 - 14 FOR THE ASSESSMENT YEAR 2008 - 09 ASSESSMENT YEAR 2009 - 10 ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 VIDE ORDER DT. 01.12.2011 24.08.2012 30.06.2014 AND 26.08.2014 I HOLD THAT THE ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 4 OF 9 APPELLANT IS ENT ITLED TO DEDUCTIONS U/S 80IB AND 80IC OF THE INCOME TAX ACT AMOUNTING TO RS.18 18 404/ - AND RS.35 10 248/ - RESPECTIVELY. THUS GROUND NOS. 3 AND 4 OF THE APPEAL ARE ALLOWED. 4.2. AGGRIEVED BY THE ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 4 .3. LD. DR PLACED RELIANCE UPON THE ORDERS PASSED BY A SSESSING O FFICER. 4.4. LD. AR HOWEVER SUBMITTED THAT THIS T RIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2006 - 07 TO 2009 - 10 IN ITA NO. 2955/DEL/2009 1191/DEL/2010 767/DEL/2012 AND 5683/DEL/2012 UP HELD THE FINDINGS OF LD. CIT (A) THEREIN BY OBSERVING AS UNDER: 15. THE CIT(A) ON THE ISSUE OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80 IB HAS HELD THAT THE PROCESS FLOW CHART OF MANUFACTURING OF DG SETS FILED BY THE ASSESSEE EXHAUSTIVELY DESCRIBES THE MANUFACTURING PROCESS WHICH INVOLVES THREE STAGES I.E. MANUFACTURIN G OF CANOPY OF DG SETS MANUFACTURING OF DG SET AND MANUFACTURING OF AMF PANEL WHICH ALSO INCLUDES DRILLING CUTTING ACOUSTIC FOAM PASTING FIXING OF ELECTRICAL ITEMS DRILLING OF MOUNTING PLATE FIXING OF SWITCH GEAR LOAD TESTING SOUND TESTING ETC. THE CIT(A) FURTHER HELD THAT THE PROCESS OF MANUFACTURING DG SETS DOES NOT INVOLVE MERE ASCENDING OF PARTS BUT IS ACTUALLY A MANUFACTURING PROCESS RESULTING IN THE MANUFACTURE OF NEW PRODUCT FROM THE RAW MATERIALS BY GIVING THEM NEW PROPERTIES. THE CIT(A) HA S EXHAUSTIVELY GIVEN ITS FINDING BASED ON THE EVIDENCES PLACED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). THE CIT(A) HAS ALSO GONE THROUGH THE DETAILS OF PLANT AND MACHINERY AND ALSO THE COPIES OF BILLS RELATING TO THE PURCHASE OF THE S AME FILED BY THE ASSESSEE. THE CIT(A) HAS ALSO GIVEN CLEAR FINDING THAT THE ASSESSING OFFICER HAS PICKED OUT AND HIGHLIGHTED ONLY THOSE MACHINES WHICH ARE USED FOR LIFTING AND SHIFTING WORK AND ASCENDING ON THE DG SET ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 5 OF 9 AND IGNORED THE OTHER MACHINES USED BY THE ASSESSEE FOR VARIOUS PURPOSES DEPLOYED BY THE ASSESSEE IN ITS MANUFACTURING PROCESS. AFTER CAREFUL CONSIDERATION THE CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 80 IB OF THE ACT. THERE IS NO NEED TO INTERFERE WITH THE DETAIL ED FINDING ON RECORD GIVEN BY THE CIT(A). THEREFORE THIS ISSUE IS DECIDED CORRECTLY BY THE CIT(A) IN ALL THE ASSESSMENT YEARS AND THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). 5. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SI DES IN THE LIGHT OF THE RECORDS PLACED BEFORE US AND THE DECISION OF THE T RIBUNAL IN ASSESSEE S OWN CASE FOR THE PRECEDING ASSESSMENT YEARS. IT IS OBSERVED THAT IN THE PRECEDING ASSESSMENT YEARS THIS T RIBUNAL DEALT WITH THE CLAIM OF ASSESSEE UNDER SECTION 80 IB AND 80 IC IN RESPECT OF THE SAME UNITS AT JAMMU AND KASHIPUR. THIS T RIBUNAL IN THE PRECEDING ASSESSMENT YEARS HAS HELD THAT ASSESSEE IS INTO MANUFACTURING ACTIVITY RATHER THAN MERE ASSEMBLING OF PARTS. THIS T RIBUNAL HAS UPHELD THE FINDINGS OF THE LD .CIT(A) THEREIN WHICH WAS BASED ON EVIDENCES PLACED BEFORE THE AUTHORITIES AT THAT STAGE. WE DO NOT FIND ANY CHANGE IN THE FACTUAL POSITION FOR THE YEAR UNDER CONSIDERATION NEITHER HAS THE DEPARTMENT BEEN ABLE TO ESTABLISH ANY DISSIMILARITY TO DEVIATE FROM SUCH FINDINGS OF THIS T RIBUNAL IN THE PRECEDING ASSESSMENT YEARS. 5.1. RESPECTFULLY FOLLOWING THE SAME WE ARE ALSO OF THE CONSIDERED OPINION THAT NO FAULT CAN BE FOUND WITH THE FINDINGS OF LD. CIT (A) IN THE APPEAL BEFORE US TODAY. ACCORDINGLY THE SAME IS UPHELD. 5.2. IN THE RESULT GROUND NO. 1 FILED BY THE REVENUE STANDS DISMISSED. ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 6 OF 9 6. GROUND NO. 2 T HIS GROUND HAS BEEN RAISED BY REVENUE AS LD.CIT(A) HAS DELETED THE ADDITION BY HOLDING THAT ASSESSEE WAS ENTITLED TO THE DEDUCTION UNDER 80 IB ON THE EXCISE DUTY REFUND. 6.1. LD. AO HAD RELIED UPON THE ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 WHILE DISALLOWING THIS CLAIM OF THE ASSESSEE. 6.2. AGGRIEVED BY THE ASSESSMENT ORDER ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) WHO BASED ON THE DECISION OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2010 - 11 WAS OF THE OPINION THAT ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80 IB OF THE A CT ON THE EXCISE DUTY REFUND. 6.3. AGGRIEVED BY THE ORDER OF LD.CIT(A) REVENUE IS IN APPEAL BEFORE US NOW. 6.4. LD. DR SUBMITTED THAT THE ISSUE WAS SUB JUDICE AS THE REVENUE HAS FILED A SLP BEFORE HON BLE APEX C OURT WHICH HAS NOT YET BEEN DECIDED AND THEREFORE HE PLACES RELIANCE UPON THE ORDER OF LD. AO. LD. AR PLACED RELIANCE UPON THE FINDINGS OF THIS T RIBUNAL IN ASSESSEE S OWN CASE FOR ORDER DATED 01/08/17 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 IN ITA NO. 767/DEL/2012 AND 5683/DEL/2012. 6.5. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US AND THE ORDER PASSED BY THIS T RIBUNAL IN ASSESSEE S OWN CASE FOR PRECEDING ASSESSMENT YEARS. 6.6. THIS T RIBUNAL HAS OBSERVED AS UNDER: ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 7 OF 9 17.AS RELATED TO ISSUE RELATING TO EXCISE DUTY REFUND THE CIT(A) HAS RIGHTLY RELIED UPON THE HON'BLE SUPREME COURT DECISION IN CASE OF LIBERTY INDIA 317 ITR 218 WHEREIN IT IS HELD THAT THE PAYMENT O F CENTRAL EXCISE DUTY HAD A DIRECT NEXUS WITH THE MANUFACTURING ACTIVITY AND SIMILARLY OF THE REFUND OF CENTRAL EXCISE DUTY ALSO HAD A DIRECT NEXUS WITH THE MANUFACTURING ACTIVITY. THE ISSUE OF PAYMENT OF CENTRAL EXCISE DUTY WOULD NOT ARISE IN THE ABSENCE OF ANY INDUSTRIAL ACTIVITY. THERE IS INEXTRICABLE LINK BETWEEN THE MANUFACTURING ACTIVITY PAYMENT OF CENTRAL EXCISE DUTY AND ITS REFUND. THEREFORE THE CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IB ON THE EXCUSE DUTY RE FUND RECEIVED BY THE ASSESSEE. THERE IS NO NEED TO INTERFERE WITH THE SAME FINDING. THIS ISSUE RAISED IN ASSESSMENT YEAR 2008 - 09 BY THE REVENUE IS DISMISSED. 6.7. RESPECTFULLY FOLLOWING THE SAME W E D O NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF LD.CIT(A). ACCORDINGLY THIS GROUND RAISED BY THE REVENUE STANDS DISMISSED. 7. IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 . 1 1 . 2 0 1 7 . S D / - S D / - (R.S. SYAL) (BEE NA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DATED T H E 3 0 T H NOVEMBER 2017. *MV ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 8 OF 9 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT DELHI BENCHES NEW DELHI ITA 6153/DEL/2015 ASSESSMENT YEAR 2012 - 13 SH. SUNIL PRAKASH FARIDABAD PAGE 9 OF 9 DATE 1. DRAGON DICTATION 21.11.2017 2. DRAFT PLACED BEFORE AUTHOR 29.11.2017 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. APPROVED DRAFT COMES TO SRPS/PS 5. KEPT FOR PRONOUNCEMENT ON 6. FILE SENT TO BENCH CLERK 7. ORDER UPLOADED