ABBEE CONSUMABLES & PERIPHERALS SSHOPE LTD,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX, PUNE

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ITA 454/PUN/2017Status: DisposedITAT Pune20 November 2019AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not given a proper opportunity before the Assessing Officer and CIT(A). Considering refilling as manufacturing, the matter was remanded to the Assessing Officer for fresh verification.

What were the facts?

The assessee challenged the denial of deduction under Section 80IC and other disallowances. The Assessing Officer completed the assessment under Section 144, treating refilling of cartridges as non-manufacturing. The CIT(A) considered it manufacturing but denied deduction for lack of a separate P&L account.

What were the issues?

Whether refilling of printer cartridges constitutes manufacturing for Section 80IC deduction and whether the assessee was denied a proper opportunity for substantiating claims.

Which sections of the Income-tax Act were involved?

Section 80IC,Section 40(a)(ia),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Kishore B Phadke

PER S.S. VISWANETHRA RAVI, JM :

This appeal by the assessee against the order dated 16-11-2016 passed by the Commissioner of Income Tax (Appeals)-1, Pune [„CIT(A)‟] for assessment year 2010-11.

2 ITA No.454/PUN/2017, A.Y. 2010-11

2.

The assessee raised as many as effective grounds No.1 to 5 challenging the action of the CIT(A) in confirming the view taken by the Assessing Officer in respect of denial of deduction u/s 80IC of the Income- tax Act, 1961 (hereinafter referred to as „the Act‟) and other disallowances.

3.

Shri Kishore B Phadke, the ld. AR placed on record the written submissions and made a prayer in remanding the matter to the file of Assessing Officer for his fresh verification.

4.

Shri Pankaj Garg, ld. DR reported no objection. Therefore, we proceed to hear all grounds No.1 to 5 together with the consent of both parties.

5.

Heard both parties and perused the materials available on record. The Assessing Officer completed the assessment u/s 144 of the Act, whereby he denied deduction u/s 80IC of the Act along with disallowances on account of prior period expenditure, u/s 40(a)(ia) of the Act, advertisement and consultancy charges. We find that the assessee is a company engaged in the business of refilling and trading in various types of printer cartridges and its components. In the assessment proceedings the Assessing Officer held refilling of cartridges is not a manufacturing activity and denied the claim of assessee made u/s 80IC of the Act. The CIT(A) held the refilling of cartridges is a manufacturing activity, but however, denied the deduction u/s 80IC of the Act only on the basis of for not submitting separate (split) Profit and Loss Account. The only

3 ITA No.454/PUN/2017, A.Y. 2010-11

contention of Shri Kishore B Phadke, ld. AR is that the Assessing Officer completed the assessment to the best of his judgment and no opportunity was available to the assessee before the Assessing Officer and in the First Appellate proceedings as well and prayed for remand the matter to the file of Assessing Officer for his fresh verification in terms of assessee shall substantiate split Profit and Loss Account and the advertisement expenses, etc. As discussed above, there was no proper opportunity for the assessee before the Assessing Officer as well as before the CIT(A) and in view of the finding of CIT(A) that the main activity of the assessee is a manufacturing activity involving refilling of cartridges with ink, therefore, in our opinion, the assessee is entitled to get claim u/s 80IC of the Act, in the interest of justice and taking into consideration the facts and circumstances of the case, we deem it fit to remand the matter to the file of Assessing Officer for fresh verification in terms of the observations made hereinabove. Thus, the grounds No.1 to 5 are allowed for statistical purposes.

6.

In the result, the appeal of assessee is allowed for statistical purposes.

Order pronounced in the open court on 20th November, 2019.

Sd/- Sd/- (D.Karunakara Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 20th November, 2019 GCVSR

4 ITA No.454/PUN/2017, A.Y. 2010-11

आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A)-1, Pune 3. आयकर आयुक्त / The Pr.CIT-1, Pune 4. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, “बी” बेंच, 5. ऩुणे / DR, ITAT, “B” Bench, Pune. गार्ड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रतत// True Copy// आदेशानुसार / BY ORDER,

वररष्ठ तनजी सधचव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune

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