ACIT, CIRCLE-8(2), NEW DELHI vs. EXCEL PACK LTD, NEW DELHI

Brief facts of the case are that the assessee is engaged in the business of manufacture of Induction Heat Seal Cap Liner material and Induction Wads. For the assessment year 2013-14 it has filed its return of income on 30/9/2013 declaring an income of Rs.2,84,91,000/-and claimed deduction under section 80 IC of the Act to the tune of Rs.1,19,73,540/-. Learned Assessing Officer, however, held that the products manufactured by the assessee fall under schedule 13 (at serial No. 19) which is a negative list and, therefore, profitderived from the manufacture of these products is not eligible for deduction under section 80 IC of the Act.

Assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A), as a matter of fact, found that the products manufactured by the assessee do not fall under tariff No. 4811.20, 4811.31 and rather the products fall under the tariff 7607-20-90 of CETA and while referring to the circular No. 28/89 dated 26/9/1989 and 141/2/2003 dated 6/10/2003 issued by the Government of India, Ministry of Finance (Department of Revenue), New Delhi allowed deduction under section 80 IC of the Act to the assessee. Revenue is therefore in this appeal.

At the outset, Ld. AR submitted that the Ld. CIT(A) followed the Board Circulars for granting relief to the assessee. He further submitted that under similar set of facts for the assessment years 2010-11 and 2012-13 a coordinate Bench of this Tribunal dealt with this issue in assessee’s own case in and 6550/Del/2015 and by order dated 18/02/2019 Tribunal returned a finding that inasmuch as the industrial unit was set up on 26/10/2006, and the initial assessment year in which deduction under section 80 IC of the Act was claim, was assessment year 2007-08 from each year onwards such a claim was allowed to the assessee, and, therefore, while following the decision of the Hon’ble Apex Court High Court in the case of International Tractors Limited297 CTR 119 Tribunal returned a finding that the assessee is entitled to the deduction in section 80 IC of the Act and the classification of aluminium foil laminated on both sides with plastic films would be under Chapter Headings 7607 instead of Chapter Headings 3920.

Facts submitted by the Ld. AR are not in dispute and Ld. DR does not controvert the same. A copy of the order dated 18/02/2019 in and 94/del/2014 and the 6550/del/2015 for assessment years 2010-11 and 2012-13 is produced. We have perused the same.

Facts being identical, we find that the issues involved in this matter are directly and substantially covered in assessee’s own case in earlier years and while respectfully following the same we hold that the assessee is entitled to deduction under section 80 IC of the Act and the addition to the tune of Rs.1,19,73,540/-by disallowance of the same, is directed to be deleted. Grounds of appeal are answered accordingly.

In the result, appeal of the assessee is allowed. Order pronounced in the Open Court on 6th January, 2020.