COMMISSIONER OF INCOME TAX vs. SHREE RAM PRINT-N-PACK

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ITA/11/2014HC Himachal PradeshHPHC01008646201406 October 2015Author: HONOURABLE MR. JUSTICE SANJAY KAROL,HONOURABLE MR. JUSTICE P.S. RANA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial question of law is answered in favour of the assessee. The Tribunal's findings of fact, which confirmed the CIT(A)'s order, were not considered perverse or unsupported by the record. The Court noted that the authorities below, being the final fact-finding authorities, had answered the issue in favour of the assessee. The judgment states that the assessee had placed sufficient documentary evidence to support the claim that the imported machines were never put to use in India prior to their purchase. Therefore, there was no misinterpretation or misapplication of law or misconstruction of material on record, and no reason for the High Court to interfere. The appeal was disposed of accordingly.

What were the facts?

The assessee, M/s Shree Ram Print-N-Pack, engaged in printing and packaging, claimed a statutory exemption under Section 80IC(4)(ii) and Explanation-1 of sub-section (3) of Section 80IA of the Income Tax Act, 1961. This claim related to machines imported by M/s Printers Park, Chennai, which the assessee purchased. The Assessing Officer disallowed this exemption. The Commissioner of Income Tax (Appeals) reversed the Assessing Officer's order. The Income Tax Appellate Tribunal (ITAT) further dismissed the Revenue's appeal, upholding the CIT(A)'s decision. The High Court admitted the Revenue's appeal on a substantial question of law.

What were the issues?

1. Whether the assessee is entitled to claim deduction under Section 80IC(4) without placing on record any documents in support of his claim that the imported machines had not been used in India, especially since the machines were purchased by the assessee 7 months after their import? Assessee's Contention: The judgment does not record specific arguments made by the assessee. However, the Tribunal's finding implies that the assessee had placed sufficient documentary evidence to support their claim that the imported machines were not used in India prior to their purchase. Revenue's Contention: The Revenue argued that the assessee was not entitled to the deduction under Section 80IC(4) without providing documentary evidence to prove that the imported machines had not been used in India. They highlighted that the machines were purchased by the assessee seven months after their import.

Which sections of the Income-tax Act were involved?

Section 80IC,Section 80IA

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Income Tax Appeal No.11 of 2014 Date of Decision : October 6, 2015 Commissioner of Income Tax ...Appellant. Versus M/s Shree Ram Print-N-Pack ...Respondent. Coram: The Hon’ble Mr. Justice Sanjay Karol, Judge. The Hon’ble Mr. Justice P.S. Rana, Judge. Whether approved for reporting?1 No. For the Appellant : Mr. Vinay Kuthiala, Senior Advocate, with Ms Vandana Kuthiala, Advocate. For the Respondent : Mr. Vishal Mohan, Advocate. Sanjay Karol, Judge Appeal stands admitted on the following substantial question of law: Whether the assessee is entitled to claim deduction under Section 81IC(4) without placing on record any documents in support of his claim that the imported machines had not been used in India, especially since the machines were purchased by the assessee 7 months after their import? 2. Facts are not in dispute. Respondent- assessee (hereinafter referred to as the assessee) is Whether reporters of the local papers may be allowed to see the judgment? …2… engaged in the manufacture of Printing and Packaging material. Certain machines imported by M/s Printers Park, Chennai stood purchased by the assessee, with respect to which they claimed statutory exemption, under the provisions of Section 80IC(4)(ii) and Explanation-1 of sub-section (3) of Section 80IA of the Income Tax Act, 1961 (hereinafter referred to as the Act), which the Assessing Officer disallowed. 3.

In an appeal filed by the assessee, order passed by the Assessing Officer stood reversed. Even the Tribunal, vide impugned order dated 18.10.2013, has dismissed the appeal filed by the Revenue.

4.

Relevant provision of Section 80IC reads as under: “80IC. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3).”

………..

…3…

“(4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:

……………..

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation :The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.”

5.

Explanation-1 of sub section (3) of Section 80IA of the Act, reads as under: “Explanation 1.-For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:-

(a) Such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;”

6.

The provision of the statute being unambiguously clear, the assessee would be entitled for deduction only if the machinery imported by M/s

…4…

Printer Park, Chennai was not put to use in India for any purpose.

7.

With regard to the fact in issue, based on not only the affidavit of the vendor, but also the enquiries, which the appellate authority got conducted through the Assessing Officer, during the course of the proceedings, following findings stand returned by the Tribunal: “……….. We find no force in the submissions of the Ld. DR that documents were not filed before the Assessing Officer. The reading of the assessment order for assessment year 2006-07 clearly show that documents were filed before the Assessing Officer also. In these circumstances, we find nothing wrong with the order of Ld. CIT(A) and confirm the same.”

8.

Such findings of fact, by no means, can be said to be perverse or not borne out from the record. The authorities below, being final fact finding authorities, have answered the issue in favour of the assessee. As such, there is no reason for us to interfere in the appeal.

9.

There is neither any mis-interpretation/mis- application of law nor mis-construction of material on

…5…

record.

The assessee had placed sufficient documentary evidence in support of his claim to the effect that prior to its purchase, the imported machines were never put to use in India. Substantial question of law is answered accordingly.

Appeal stand disposed of, so also pending application(s), if any.

( Sanjay Karol ),

Judge.

( P.S. Rana ), October 6, 2015(sd)

Judge.

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