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Facts
The Revenue appealed against the CIT(A)'s decision to allow deduction under Section 80IC(2) for the Uttaranchal Unit-I and credit of TDS. The assessee argued that previous ITAT orders in their favor for similar AYs should apply, as the facts are the same. The Revenue contended that their appeal against prior ITAT orders is pending before the High Court.
Held
The Tribunal agreed with the assessee and the Revenue that the first two grounds of appeal regarding the Section 80IC(2) deduction were covered in favor of the assessee, stating that the company's activities constitute manufacturing. For the third ground concerning TDS credit, the issue was remitted to the Assessing Officer for necessary action.
Key Issues
Whether the assessee is eligible for deduction under Section 80IC(2) for its Uttaranchal Unit and entitled to claim TDS credit of Rs. 3,22,008/- from an amalgamated company.
Sections Cited
80IC(2), 2(29)(BA)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI RAHUL CHAUDHARY & SHRI OMKARESHWAR CHIDARA
PER OMKARESHWAR CHIDARA, AM
The Revenue has filed an appeal in this above cited case following three grounds:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing the deduction u/ s 801C(2) of the I.T. Act for Uttaranchal Unit-I of Rs. 15,97,87,975/ - without appreciation of the facts that preparation of Ujala Supreme preparation of Ujala Supreme by diluting the raw by diluting the raw material i.e. Acid Violet 49 Dye with water does not material i.e. Acid Violet 49 Dye with water does not material i.e. Acid Violet 49 Dye with water does not amount to manufacturer or produce of any article or thing amount to manufacturer or produce of any article or thing amount to manufacturer or produce of any article or thing with a different chemical composition or integral structure with a different chemical composition or integral structure with a different chemical composition or integral structure as envisaged u/s 2(29)(BA) of the I.T. Act and thereby not as envisaged u/s 2(29)(BA) of the I.T. Act and thereby not as envisaged u/s 2(29)(BA) of the I.T. Act and thereby not eligible for deduction u/s 801C of the Act." le for deduction u/s 801C of the Act." 2. "On the facts and in the circumstances of the case and 2. "On the facts and in the circumstances of the case and 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing the deduction u/s in law, the Ld. CIT (A) erred in allowing the deduction u/s in law, the Ld. CIT (A) erred in allowing the deduction u/s 80IC(2) of the IT. Act for Uttaranchal Unit 80IC(2) of the IT. Act for Uttaranchal Unit-I of Rs. I of Rs. 15,97,87,975/ 15,97,87,975/- without appreciation of the facts that the ts that the assessee himself argued in detail before CEGAT that assessee himself argued in detail before CEGAT that assessee himself argued in detail before CEGAT that making Ujala Supreme does not result into any new making Ujala Supreme does not result into any new making Ujala Supreme does not result into any new product with distinct name, use and character and also product with distinct name, use and character and also product with distinct name, use and character and also got decision in its favour then the assessee cannot make got decision in its favour then the assessee cannot make got decision in its favour then the assessee cannot make a u-turn and say that making U turn and say that making Ujala Supreme brings into jala Supreme brings into existence a new product with distinct name, use and existence a new product with distinct name, use and existence a new product with distinct name, use and character." 3. "On the facts and in the circumstances of the case and 3. "On the facts and in the circumstances of the case and 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing the credit of TDS in law, the Ld. CIT (A) erred in allowing the credit of TDS in law, the Ld. CIT (A) erred in allowing the credit of TDS of Rs. 3,22,008/ of Rs. 3,22,008/- without appreciation of the fac without appreciation of the facts that the assessee has not offered the earned income of the assessee has not offered the earned income of the assessee has not offered the earned income of amalgamating company i.e. Jyothy Consumer Products amalgamating company i.e. Jyothy Consumer Products amalgamating company i.e. Jyothy Consumer Products Ltd."
The essence of the issue in the first two grounds is whether The essence of the issue in the first two grounds is whether The essence of the issue in the first two grounds is whether the appellant company is entitled to deduction u/s 801C(2) of the the appellant company is entitled to deduction u/s 801C(2) of the the appellant company is entitled to deduction u/s 801C(2) of the Income-tax Act, 1961 (in short ‘the Act’) in the facts and Act, 1961 (in short ‘the Act’) in the facts and Act, 1961 (in short ‘the Act’) in the facts and circumstances of the case. The Ld. AR of the assessee filed a Paper circumstances of the case. The Ld. AR of the assessee filed a Paper circumstances of the case. The Ld. AR of the assessee filed a Paper Book containing computation of income, rectification application Book containing computation of income, rectification application Book containing computation of income, rectification application filed by appellant, submission filed before the Ld. CIT(A) on the filed by appellant, submission filed before the Ld. CIT(A) on the filed by appellant, submission filed before the Ld. CIT(A) on the above issue raised in grounds of appeal. The Ld. AR of appellant ue raised in grounds of appeal. The Ld. AR of appellant ue raised in grounds of appeal. The Ld. AR of appellant has filed copies of ITAT orders in its own case for AYs 2009 has filed copies of ITAT orders in its own case for AYs 2009 has filed copies of ITAT orders in its own case for AYs 2009-10 to 2014-15 and submitted that the above two grounds were covered in 15 and submitted that the above two grounds were covered in 15 and submitted that the above two grounds were covered in its favour and as the facts and circumstances being the same, it its favour and as the facts and circumstances being the same, it its favour and as the facts and circumstances being the same, it was submitted during the proceedings before ITAT that the appeal submitted during the proceedings before ITAT that the appeal submitted during the proceedings before ITAT that the appeal of Revenue be dismissed. of Revenue be dismissed.
3. Per contra, the Ld. DR has submitted that the Revenue has Per contra, the Ld. DR has submitted that the Revenue has Per contra, the Ld. DR has submitted that the Revenue has filed an appeal before the Hon’ble High Court of Bombay and did filed an appeal before the Hon’ble High Court of Bombay and did filed an appeal before the Hon’ble High Court of Bombay and did not accept the orders of Hon’ble ITAT and th not accept the orders of Hon’ble ITAT and the same are pending. e same are pending. The Ld. AR and Ld. DR have agreed that the first two grounds are The Ld. AR and Ld. DR have agreed that the first two grounds are The Ld. AR and Ld. DR have agreed that the first two grounds are covered in favour of assessee. In view of the same, the first two covered in favour of assessee. In view of the same, the first two covered in favour of assessee. In view of the same, the first two grounds are adjudicated in favour of the appellant, i.e. the grounds are adjudicated in favour of the appellant, i.e. the grounds are adjudicated in favour of the appellant, i.e. the appellant is entitled to deduction u/s 801C( appellant is entitled to deduction u/s 801C(2) and the activites of 2) and the activites of appellant company amount to appellant company amount to “manufacturing activity “manufacturing activity. “
As far as the 3rd rd ground of appeal is concerned, t ground of appeal is concerned, the Ld. AR has submitted as follows in his written submissions dated 23.12.2024 : submitted as follows in his written submissions dated 23.12.2024 : submitted as follows in his written submissions dated 23.12.2024 :
“M/s Jyothy Consumer Products Ltd “M/s Jyothy Consumer Products Ltd ("JCPL"), an erstwhile ("JCPL"), an erstwhile group entity, merged with the assessee, as a result of a group entity, merged with the assessee, as a result of a group entity, merged with the assessee, as a result of a scheme of amalgamation duly approved by the Hon'ble scheme of amalgamation duly approved by the Hon'ble scheme of amalgamation duly approved by the Hon'ble Bombay High Court vide order dated 12.04.2013 with effect Bombay High Court vide order dated 12.04.2013 with effect Bombay High Court vide order dated 12.04.2013 with effect from 01.04.2012. Accordingly, JCPL stood dissolved and from 01.04.2012. Accordingly, JCPL stood dissolved and from 01.04.2012. Accordingly, JCPL stood dissolved and ceased to exist as a legal entity in the eyes of law from that xist as a legal entity in the eyes of law from that xist as a legal entity in the eyes of law from that date. Pursuant to the amalgamation, all the assets and liabilities Pursuant to the amalgamation, all the assets and liabilities Pursuant to the amalgamation, all the assets and liabilities of the amalgamating company (JCPL) were transferred to of the amalgamating company (JCPL) were transferred to of the amalgamating company (JCPL) were transferred to the assessee.Accordingly, the TDS credit of Rs. 3,22,008/ the assessee.Accordingly, the TDS credit of Rs. 3,22,008/ the assessee.Accordingly, the TDS credit of Rs. 3,22,008/-, which is on account of which is on account of JCPL which was then merged with JCPL which was then merged with the assessee, has been claimed as credit by the assessee, the assessee, has been claimed as credit by the assessee, the assessee, has been claimed as credit by the assessee, being the amalgamated company. As a result, the assessee being the amalgamated company. As a result, the assessee being the amalgamated company. As a result, the assessee became entitled to a TDS credit of Rs. 6,00,11,490/ became entitled to a TDS credit of Rs. 6,00,11,490/ became entitled to a TDS credit of Rs. 6,00,11,490/- (Rs. 5,96,89,482/ 5,96,89,482/- belonging belonging to to the the assessee assessee and and Rs. Rs. 3,22,008/- belonging to the erstwhile JCPL). In this regard, belonging to the erstwhile JCPL). In this regard, belonging to the erstwhile JCPL). In this regard, the assessee filed the rectification application dated the assessee filed the rectification application dated the assessee filed the rectification application dated 29.05.2018 (enclosed at Pages 49 29.05.2018 (enclosed at Pages 49-51 of the paperbook) 51 of the paperbook) enclosing the Form 26AS, breakup of TDS credit of JCPL.” enclosing the Form 26AS, breakup of TDS credit of JCPL.” enclosing the Form 26AS, breakup of TDS credit of JCPL.”
4.1 As the rectification applic the rectification application dated 29.05.2018 is pending ation dated 29.05.2018 is pending before the Ld. AO, he is directed to take necessary action after going before the Ld. AO, he is directed to take necessary action after going before the Ld. AO, he is directed to take necessary action after going through Form 26AS, break through Form 26AS, break-up of TDS credit of JCPL. up of TDS credit of JCPL. To this limited extent, the issue is remitted to the file of Ld. AO. extent, the issue is remitted to the file of Ld. AO.
The appeal of Revenue is The appeal of Revenue is partly allowed for statistical tly allowed for statistical purposes.
Order pronounced in the open Court on Order pronounced in the open Court on 30/12/2024. /12/2024.