Umang Goenka v. ACIT - Taxpublishers.in

Case Laws Analysis
REFERRED CIT v. Classic Binding Industries 2018 TaxPub(DT) 5253 (SC)

SUBSCRIBE FOR FULL CONTENT


The Tax PublishersITA No. 165/Kol/2019 2020 TaxPub(DT) 2579 (Kol-Trib) IN THE ITAT, KOLKATA BENCH S.S. GODARA, J.M. & A.L. SAINI, A.M. Umang Goenka v. ACIT ITA No. 165/Kol/2019 12 June, 2020 Appellant by: Arvind Agarwal, Advocate Respondent by: Supriyo Paul, JCIT ORDER *Dr. A.L. Saini, AM* The captioned appeal filed by the assessee, pertaining to assessment year 2015-16, is directed against the order passed by the Commissioner (Appeal)-9, Kolkata, in Appeal no. 129/CIT(A)-9/Cir-31/2017-18/Kol, which in turn arises out of an assessment order passed by the assessing officer under section 143(3) of the Income Tax Act, 1961 (in short the Act) dated 4-12-2017. 2. The grounds of appeal raised by the assessee are as follows :-- 1. For that in view of the facts and circumstances of the case the action of the learned Commissioner (Appeals) in upholding the claim of deduction under section 80IC at Rs. 10172628 allowed by Assessing officer as against claim of the appellant at Rs. 37118499 is erroneous and bad in law. 2. For that in view of the facts and circumstances of the case the learned Asst. Commissioner of Income Tax on wrong interpretation of substantial expansion and initial assessment year wrongly and arbitrarily restricted the claim of deduction under section 80IC at Rs. 10172628 being 25% of the total claim as against eligible claim of deduction of 100% of the total income of Rs. 37118499 and the learned Commissioner (Appeals) erred in confirming the action of the Assessing officer inspite of the fact that similar claim of deduction @100% was allowed in earlier assessment year by Honble ITAT Kolkata Bench in assessment year 2013-2014 & 2014-2015. 3. For that in view of the facts and circumstances of the case the appellant had fulfilled all the criteria for claiming deduction under section 80IC of the IT Act, 1961 @ 100% of the profit on making substantial expansion in the plant & machinery as provided in Section 80IC(8)(IX) of the IT Act, 1961, the learned Commissioner (Appeals) ought to have deleted the addition in full instead of confirming the action of the assessing officer. 4. For that in view of the facts and circumstances of the case the learned Assessing officer failed to compute Book profit under section 115JC of the IT Act, 1961 and taxed and allowed set off of tax credit under section 115JD and the learned Commissioner (Appeals) failed to pass any order on the Additional Grounds taken before him. 5. For that the above Grounds of Appeal shall be argued in details at the time of hearing and the appellants crave leave to add to alter and or to amend the aforesaid grounds at or before the hearing of the appeal. 4. Ground nos. 1 to 3 raised by the assessee relate to deduction under section 80IC of the Act. 5. Brief facts qua the issue are that the assessee, Sri Umang Goenka, is the proprietor of M/s. Electron Automats. The postal address of the said Firm is HIG24C, Sector-I, Dist. Solan, Parwanoo - 173 220, Himachal Pradesh. During the relevant financial year the assessee was engaged in the business of designing and developing innovative electrical and electronic control gear after studying the short-coming of the existing products available in various fields. These products are microprocessor based and once the designs are appreciated and approved by the consultants they go into commercial manufacturing of the end products like automatic change over switches, motor starters, current limiters, safety power guard sockets, etc. As per information given in Form No. 10CCB, the assessee started its business activity/operation on 26-05-2007 and initial assessment year for claim of deduction under section 80-IC of the of the Income-tax Act, 1961 was assessment year 2008-2009. The assessee had already claimed deduction under section. 80-IC to the extent of the 100% eligible profit for five years period of assessment year 2008-09 to assessment year 2012-2013. However, it was noticed that the assessee firm had again claimed 100% deduction against eligible profits in the relevant assessment year 2015-2016 which is 8th year of production for the firm by claiming substantial expansion in Financial Year 2011-2012. The assessee made following submission regarding the same :-- SUBSCRIBE FOR FULL CONTENT

The Tax PublishersITA No. 165/Kol/2019
2020 TaxPub(DT) 2579 (Kol-Trib)

IN THE ITAT, KOLKATA BENCH

S.S. GODARA, J.M. & A.L. SAINI, A.M.

Umang Goenka v. ACIT

ITA No. 165/Kol/2019

12 June, 2020

Appellant by: Arvind Agarwal, Advocate

Respondent by: Supriyo Paul, JCIT

ORDER

Dr. A.L. Saini, AM

The captioned appeal filed by the assessee, pertaining to assessment year 2015-16, is directed against the order passed by the Commissioner (Appeal)-9, Kolkata, in Appeal no. 129/CIT(A)-9/Cir-31/2017-18/Kol, which in turn arises out of an assessment order passed by the assessing officer under section 143(3) of the Income Tax Act, 1961 (in short the Act) dated 4-12-2017.

2. The grounds of appeal raised by the assessee are as follows :--

1. For that in view of the facts and circumstances of the case the action of the learned Commissioner (Appeals) in upholding the claim of deduction under section 80IC at Rs. 10172628 allowed by Assessing officer as against claim of the appellant at Rs. 37118499 is erroneous and bad in law.

2. For that in view of the facts and circumstances of the case the learned Asst. Commissioner of Income Tax on wrong interpretation of substantial expansion and initial assessment year wrongly and arbitrarily restricted the claim of deduction under section 80IC at Rs. 10172628 being 25% of the total claim as against eligible claim of deduction of 100% of the total income of Rs. 37118499 and the learned Commissioner (Appeals) erred in confirming the action of the Assessing officer inspite of the fact that similar claim of deduction @100% was allowed in earlier assessment year by Honble ITAT Kolkata Bench in assessment year 2013-2014 & 2014-2015.

3. For that in view of the facts and circumstances of the case the appellant had fulfilled all the criteria for claiming deduction under section 80IC of the IT Act, 1961 @ 100% of the profit on making substantial expansion in the plant & machinery as provided in Section 80IC(8)(IX) of the IT Act, 1961, the learned Commissioner (Appeals) ought to have deleted the addition in full instead of confirming the action of the assessing officer.

4. For that in view of the facts and circumstances of the case the learned Assessing officer failed to compute Book profit under section 115JC of the IT Act, 1961 and taxed and allowed set off of tax credit under section 115JD and the learned Commissioner (Appeals) failed to pass any order on the Additional Grounds taken before him.

5. For that the above Grounds of Appeal shall be argued in details at the time of hearing and the appellants crave leave to add to alter and or to amend the aforesaid grounds at or before the hearing of the appeal.

4. Ground nos. 1 to 3 raised by the assessee relate to deduction under section 80IC of the Act.

5. Brief facts qua the issue are that the assessee, Sri Umang Goenka, is the proprietor of M/s. Electron Automats. The postal address of the said Firm is HIG24C, Sector-I, Dist. Solan, Parwanoo - 173 220, Himachal Pradesh. During the relevant financial year the assessee was engaged in the business of designing and developing innovative electrical and electronic control gear after studying the short-coming of the existing products available in various fields. These products are microprocessor based and once the designs are appreciated and approved by the consultants they go into commercial manufacturing of the end products like automatic change over switches, motor starters, current limiters, safety power guard sockets, etc. As per information given in Form No. 10CCB, the assessee started its business activity/operation on 26-05-2007 and initial assessment year for claim of deduction under section 80-IC of the of the Income-tax Act, 1961 was assessment year 2008-2009. The assessee had already claimed deduction under section. 80-IC to the extent of the 100% eligible profit for five years period of assessment year 2008-09 to assessment year 2012-2013. However, it was noticed that the assessee firm had again claimed 100% deduction against eligible profits in the relevant assessment year 2015-2016 which is 8th year of production for the firm by claiming substantial expansion in Financial Year 2011-2012. The assessee made following submission regarding the same :--