CIT vs. JINDAL PHOTO LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 87/2012 . . . CIT ..... Appellant . Through Mr. Sanjeev Sabharwal, Adv. . . . versus . . . JINDAL PHOTO LTD ..... Respondent . Through . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . O R D E R . 15.02.2012 . . . Whether insurance claim paid should be included for computing deduction under Section 80IB of the Income Tax Act, 1961 stands concluded and decided against the Revenue vide decision dated 19th August, 2009 in Commissioner of Income Tax Vs. Spotking India Ltd. (2010) 324 ITR 283 (Del.). . Learned counsel for the Revenue during the course of arguments had submitted that the CIT (Appeals) has recorded a finding that insurance claim was in respect of stock-in-trade. In case the insurance claim was . in respect of raw-material, the decision in the case of Spotking India Ltd. (supra) cannot be applied. This proposition is prima facie correct, but it is not the contention of the Revenue that the insurance claim paid was for loss of raw material. We find that before the Assessing Officer, the assessee had clearly and categorically stated that the insurance claim was on account of loss of goods in transit and goods in question were goods manufactured by the eligible undertaking. The order passed by the CIT (Appeals) is, in fact, presumptuous and without giving any reasons or factual background, he has stated that it could be safely concluded that the loss was relating to stock-in-trade as it was caused during transit. Thus the finding of the CIT (Appeals) is not correct. Moreover, he did not record that the material/goods lost were raw material or unfinished goods. The tribunal in paragraph 4 of its order has specifically gone into the said aspect and referred to the query raised by the Assessing Officer and the written submission submitted by the assessee. We may note that the Assessing Officer had not held that the insurance claim was in respect of raw-material. . Learned counsel for the Revenue submitted that the Punjab and Haryana High Court in the case of Commissioner of Income Tax Vs. Khemka Container (P.) Ltd. [2005] 275 ITR 559 has taken a different view. We are bound by the decision of the Division Bench of this Court. We do not see any reason to refer the matter to a larger Bench. . With regard to the disallowance under Section 14A, the assessee had earned dividend income of Rs. 17,97,010/-. It was claimed to be exempt under Section 10 of the Act. The assessee had itself disallowed an amount of Rs.1,73,038/-. The break-up of the said amount has been given in the order passed by the CIT (Appeals). The same is as follows:- . ?i) Personnel Expenses Rs. 17,733/- . ii) Administrative Expenses Rs. 1,08,829/- . iii) Selling and Distribution Expenses . Rs. 46,476/- . Total Rs. 1,73,038/- . It is apparent that the assessee while disallowing Rs.1,73,038/- has included the indirect expenses. We may note that the Assessing Officer in the assessment order has not gone into the direct and indirect expenses or commented about the deduction made suo motu by the assessee. The Assessing Officer applied Rule 8D, which has been inserted with effect from 24th March, 2008. It has been held by this Court in the case of MAXOPP INVESTMENT LTD Vs. COMMISSIONER OF INCOME-TAX, NEW DELHI, ITA No.687/2009 that the aforesaid amendment is not retrospective and does not apply to the assessment year 2007-08. . In view of the above, we do not find any merit in the present appeal and the same is dismissed. . . . . . SANJIV KHANNA, J. . . . . . R.V.EASWAR, J. . FEBRUARY 15, 2012 . NA . . . $ 4 .