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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DLEHI
Before: SHRI N.K. BILLAIYA & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Revenue Department against the order dated 28.02.2019, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-32, New Delhi (in short ‘ld. Commissioner’) u/s. 250(6) of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2013-14.
In the instant case, the assessee had e-filed its return of income on dated 28.09.2013 by declaring total taxable income at ‘nil’. Subsequently, on dated 09.10.2013, the original return of income was revised by declaring the same income at ‘nil’. Thereafter, the case of the assessee was selected for scrutiny under CASS and resulted into issuance of statutory notices, in response to Page 1 of 5 which the assessee company attended the assessment proceedings and furnished the details as called for by the Assessing Officer.
From the assessment order, it reveals that the assessee company, is carrying the activities of manufacturing and assembling of cell phone battery, charger and other accessories and during the year under consideration, has shown gross profit of Rs.3,02,54,841/- on a gross turnover of Rs.19,80,19,463/- and the assessee has also shown the net profit before tax of Rs.2,17,72,175/- and after making statutory adjustment/disallowance has shown its business income at Rs.2,16,71,675/- against which the deduction u/s. 80IC of the Act of equal amount was claimed and nil income has been reported. Consequently, the assessee has paid tax on book profit amounting to Rs.2,17,14,734/- in accordance with the provisions of section 115JB of the Act. The assessee before the Assessing Officer has also claimed that it is carrying its work at Kasauli Road, Sector-2, Parwanoo, State of Himachal Pradesh, which is a notified area as per 14th Schedule for claiming deduction u/s. 80IC of the Act, as the assessee is carrying on the business of manufacturing and assembling of cell phone battery, charger and other accessories, therefore, the article manufactured by the Assessee falls in the 14th Schedule.
However the Assessing Officer did not agree with the said claim of the Assessee and disallowed the deduction claimed mainly on the reasons that the articles manufactured by the assessee fall in the 13th Schedule, but not covered in the 14th schedule. Secondly, the assessee is only assembling mobile phone battery etc. and cannot be called as a manufacturer.
The assessee being aggrieved challenged the disallowance of such deduction u/s. 80IC of the Act by the Assessing Officer, before the ld. Commissioner, who vide impugned order, accepted the claim of the assessee, while relying upon the order passed by the Hon’ble Bench of the Tribunal in Assessee’s own case for the A.Y. 2012-13, wherein also the same disallowance u/s. 80IC of the Act was under challenge on the similar facts and circumstances and the Hon’ble Bench in its order dated 22.11.2018 clearly held that the assessee has set up a manufacturing unit for cell phone battery, chargers and other accessories and carried out manufacturing process and fulfils the conditions prescribed u/s. 80IC of the Act. The concluding part of the Hon’ble Tribunal’s order is reproduced below:
“8. we agree with the finding of the learned commissioner of income tax appeals for the reason that assessee has set up a manufacturing unit for cell phone batteries chargers and other accessories before the sunset date on 31/03/2010. Precisely the assessee started operation in the financial year 2010 – 11. The allegation of the learned assessing officer is that as assessee is manufacturing these items which are falling under classification number 20 number of 13th schedule of list of articles or things for the state of Himachal Pradesh as plastics and articles thereof, the claim of the assessee is not eligible. The assessee has submitted the excise classification that what is the plastic and articles thereof and what are the products manufactured by the assessee. According to that the mere products Manufacturer by the assessee are not articles of plastic. Further the place where the assessee has eligible industrial undertaking was also proved to be notified area for setting up of the industry which is eligible for exemption. The assessee has also shown the relevant rent agreements by which assessee is in possession of the relevant land area. To establish the date of the commencement the assessee has shown that the date of commencement of the unit is 31/3/2010, on the date on which the first sale bill was prepared. Same was also confirmed by the sales tax records and excise records of the assessee. The assessee has also shown the details of the machinery for the purpose of manufacturing of the specified item. Such details are also furnished along with copies of bills et cetera. The amount of purchases from the related party are also very minuscule that is only of Rs. 59568/–. Even otherwise this is not the first year of the claim of the assessee but second-year of Page 3 of 5 the Holiday period of 10 years. In view of this we confirm the finding of the learned CIT appeal in deleting the disallowance of deduction under section 80 IC of the act of � 6 920378/–. In the result ground number 1-3 of the appeal of the revenue is dismissed.
The Revenue Department being aggrieved is in appeal before us.
We have heard the parties and perused the material available on record and are in agreement with the conclusion drawn by the ld. Commissioner to the effects that the facts of the instant case are exactly similar to the facts dealt by the Hon’ble Bench in Assessee’s own case for A.Y. 2012-13 and therefore, respectfully following the same, we are inclined not to interfere with the order under challenge, as the same does not suffer from any perversity, impropriety or illegality. Consequently, the impugned order stands upheld.