DEVIKRUPA SPECIFIC FAMILY TRUST,,MEHSANA vs. THE ASSTT. COMMISSIONER OF INCOME TAX, MEHSANA CIRCLE,, MEHSANA

PER Bench: Captioned appeal filed by the assessee, pertaining to the assessment year (AY) 2006-07, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Gandhinagar [in short “ld.CIT(A)”]in Appeal No. CIT(A)/GNR/404/2015-16dated 10.01.2017, which in turn arises out of an assessment order passed by Assessing Officer under section 143(3)r.w.s. 254of the Income Tax Act, 1961 [hereinafter referred to as the “Act”] dated 17.08.2015.

2. The grounds of appeal

raised by the assessee are as follows:

1. In law and in the facts and circumstances of the Appellant’s case, the ld. CIT(A) has grossly erred in points of law and facts.

2. In law and in facts and circumstances of the Appellant’s case, the learned CIT(A) has grossly erred in confirming disallowing deduction u./s80IB of I.T. Act for Rs.11,09,007/-.

(A.Y. 06-07) Devikrupa Specific Family Trust 2 3. In law and in facts and circumstances of the Appellant’s case, the learned CIT(A) has grossly erred in holding that charging of interest u/s 234A, 234B,234C and 234D of I.T. Act being mandatory and consequential. 4. Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as maybe advised from time to time.”

3.Brief facts qua the issue are that assessee is a specific family trust engaged in the business of manufacturing of corrugated boxes. Assessee filed return of income for A.Y.2006-07 on 31.12.2006 declaring total income of Rs.33,99,310/- after claiming deduction of Rs.11,32,507/-) under section 80IB of the Act. Thereafter assessment was framed u/s 143(3) of the Act vide order dated 30.12.2008, the total income was determined at Rs.2,52,92,529/-. Aggrieved by the order of Assessing Officer assesses carried the matter before Ld.CIT(A). The Ld. CIT(A) by an order dated 17/03/2010 granted partial relief to the assessee. Aggrieved by the order of Ld. CIT(A), the assessee preferred appeal before the Hon'ble Tribunal in which the Tribunal has set-aside the matter to the file of Assessing Officer to decide afresh.In this case, the assessee claimed deduction u/s.80IB of the Act to the tune of Rs.11,32,507/-. The Assessing Officer during the assessment proceedings u/s 143(3) of the Act, observed that assessee did not mention the exact sub-section under which the deduction claimed and also failed to submit Form No.10CCB. The Assessing Officer further observed that the deduction could have been worked out after setting apart the job receipt of Rs.1,51,32,114/- and other income of Rs.82,79,526/- as the same are not eligible for such deduction and accordingly disallowed Rs.11,32,507/- claimed as deduction u/s.80IB of the Act in the first appeal.The Ld. CIT(A) restricted the addition to the extent of Rs.23,500/- by deleting the addition of Rs.11,09,007/-. The Ld. CIT(A) held that the job charges and other income as eligible for deduction u/s.80IB of the Act. On aggrieved, both the Revenue as well as the assessee preferred appeal before the Tribunal in which the Hon'ble Tribunal has set-aside the issue to the file of Assessing Officer on the following observation: “16. Before us, the Ld. D.R. has submitted that Assessee neither submitted the details before A.O. or CIT(A). Before us the Ld. A.R. has not given any (A.Y. 06-07) Devikrupa Specific Family Trust 3 reason for non-submission of the details before the lower authorities. We therefore feel that in the interest of justice one more opportunity be given to the Assessee to present before A.O. the required details in support of its claim deduction under section 80IB. We also direct the Assessee to file all the necessary details called for by the A.O. promptly within a reasonable time. In case of failure of Assessee to file the details, the A.O. shall be free to proceed on the basis of material on record. Thus this ground of Assessee is allowed for statistical purpose.”

4.In view of the Hon'ble Tribunal's order, a notice u/s 143(2) of the Act was issued by assessing officer on 07.04.2015 which was duly served upon the assessee. In response to the notice of the Assessing Officer, the assessee submitted written submission which is reproduced below: “With reference to your above referred letter, I wish to submit following required details for Assessment proceedings for A.Y.2006-07.

5.However, the Assessing Officer rejected the contentions of the assessee, and held that income cannot be treated to have earned as profit from industrial undertaking and accordingly, corresponding deduction to the extent of Rs.11,09,007/- was disallowed and added to the total income of the assessee for the year under consideration.

(A.Y. 06-07) Devikrupa Specific Family Trust 4 6.Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of Assessing Officer.

Aggrieved by the order of ld. CIT(A), the assessee is in further appeal before us.

7.Learned Counsel for the assessee submitted that the solitary issue in the assessee’s case is that freight charges recovered from the customers are eligible for deduction under section 80IB of the Act. To support his plea, the ld Counsel submitted the relevant invoices which are placed at page no. 57 to 133 of the paper book. The Ld. Counsel also submitted From No.10CCB and the relevant evidences of freight charges recorded from the customers by way of invoices, and pleaded that assessee is entitled to claim the deduction under section 80IB of the Act.

8.On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

9.We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that assessee submitted before us the invoices of various parties containing GST number and CST number, on the invoices, in respect of transportation charges, (freight charges received from purchaser) which is placed at page nos.57 to 133 of the assessee’s paper book. The assessee submitted Form No.10CCB from a Chartered Accountant which is placed at page no.15 of the paper book. The assessee submitted the balance sheet and profit and loss account which is placed at page no. 7 to 8 of the paper book where we observed thatjob charges have been shown to the tune of Rs.51,32,114/-. The assessee has shown other income at Rs.8,29,526/-.The fresh charges received from purchaser have been shown under the head “income from other sources”. The assessee also submitted the letter dated 25.07.2015 which was submitted before Assessing Officer, showing the details of freight income, which is placed at page

(A.Y. 06-07) Devikrupa Specific Family Trust 5 no.49 of the paper book. The assessee also submitted the details of freight income which is placed at page no.50 to 56 of the paper book. Therefore, these facts clearly prove that assessee’s claim is genuine and assessee deserves for deduction u/s 80IB of the Act. We also note that assessee has been claiming deduction under section 80IB of the Act since a long and department has been allowing the claim of the assessee under section 80IB of the Act, in previous years, therefore since the department has allowed the claim of the assessee in previous years, hence the genuineness of the claim should not be doubted. For the current assessment year, the assessee has furnished relevant documents and evidences to fulfill the conditions for claiming deduction under section 80IB of the Act, as noted above, therefore we are of the view that assessee is entitled to claim deduction under section 80IB of the Act. Based on this factual position, we direct the Assessing Officer to allow the deduction u/s 80IB to the tune of Rs.11,09,007/-.

Order pronounced in the open Court on 29th June, 2022 .