UFLEX LTD.,NEW DELHI vs. ACIT, NEW DELHI

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ITA 1725/DEL/2017Status: DisposedITAT Delhi23 November 2021AY 2002-034 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the original assessment was completed before the search and no incriminating material was found to support the additional claims, the grounds raised in the appeal were not maintainable, following the Delhi High Court's decision in Kabul Chawla.

What were the facts?

The assessee appealed against the CIT(A)'s order concerning AY 2002-03. The assessment was framed under section 153A after search proceedings, but the original assessment under section 143(3) was completed earlier without any incriminating material found regarding the current claims.

What were the issues?

The primary issue was the maintainability of grounds raised in an appeal under Section 153A when the original assessment was completed prior to the search and no incriminating material was found. The secondary issues involved the taxability of sales tax subsidies and claims for deduction under Section 80HHC.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 80HHC,Section 115JB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI

Before: SH. ANIL CHATURVEDI & SH. SUDHANSHU SRIVASTAVA

For Appellant: Shri M. P. Rastogi, Adv
For Respondent: Shri H. K. Chaudhary, CIT (DR)
Hearing: 11.11.2021Pronounced: 23.11.2021

Date of hearing: 11.11.2021 Date of Pronouncement: 23.11.2021 ORDER

PER ANIL CHATURVEDI, AM:

1.

This appeal filed by the assessee is directed against the order dated 27.01.2017 of the Commissioner of Income Tax (Appeals) – 29, New Delhi relating to Assessment Year 2002-03.

2.

Assessee in that present appeal has raised the following grounds: “

1. The Ld. CIT (Appeals) is wrong on facts and bad in law in not admitting the additional grounds filed by the appellant.

2. The Ld. CIT (Appeals is wrong on facts and bad in law in not allowing the deduction of sales tax subsidy of Rs.18,08,41,056/- being a capital receipt granted under Uttar Pradesh Industrial Policy 1994 read with Uttar Pradesh Trade Tax Act, 1948.

3. The Ld. CIT (Appeals ) is wrong on facts and bad in law in not allowing the deduction of sales tax subsidy of Rs.7,16,61,919/- being a capital receipt granted under 1991 scheme of Madhya Pradesh Government read with Madhya Pradesh General sales tax act 1958.

4. Without prejudice to Ground No. 2 & 3 , it is contended that sum of Rs. 18,08,41,056/- & Rs. 7,16,61,919/- being sales tax are an allowable deduction u/s 43B of the Income Tax act, 1961.

5. Ld. CIT(Appeals) is wrong on facts and'bad in law in not allowing the deduction of sales tax subsidy of Rs.18,08,41,056/- being a capital receipt granted under Uttar Pradesh Industrial Policy 1994 read with Uttar Pradesh Trade Tax Act, 1948 while computing the Book profit u/s 115JB of the Income Tax Act ,1961.

6. Ld. CIT (Appeals) is wrong on facts and bad in law in not allowing the deduction of sales tax subsidy of Rs.7,16,61,919/- being a capital receipt granted under 1991 scheme of Madhya Pradesh Government readwith Madhya Pradesh General sales tax act 1958 while computing the Book profit u/s 115JB of the Income Tax Act ,1961.

7. The lower authorities are wrong on facts and bad in law in not allowing the claim of deduction u/s 80HHC to the extent of profits under clause (a) or clause( c) of sub-section (3) of section 80HHC of Rs. 9,60,97,676/- while computing Book profits u/s 115JB based on the ratio of judgment by Hon’ble Supreme court in Ajanta Pharma Ltd. Vs. CIT (2010) 327 ITR 305(SC).

8.

The lower authorities are wrong on facts and bad in law in not allowing the claim of deduction u/s 80HHC without applying the sun -set clause specified in sub - section (1B) of section 80HHC of the Act.

9.

The Lower authorities are wrong on facts and bad in law in confirming of addition of Rs. 3,25,08,000/- on account of provision for bad and doubtful debts 10. The Lower authorities are wrong on facts and bad in law in confirming of addition of Rs.3,25,08,000/- on account of provision for bad and doubtful debts under the Book profit.

11.

The appellant craves leave to add to, alter, delete, modify or vary the above grounds of appeal

at or before the time of the hearing.”

3. Before us, Learned AR at the outset fairly submitted that the Hon’ble CIT(A) on the grounds raised in the impugned appeal has observed that assessment was already completed u/s 143(3) of the Act vide order dated 28.02.2005 much before the search proceedings took place at assessee’s premises and nothing incriminating was found during the search to substantiate the additional claim with respect to the capital receipt of sale tax and other issues raised. CIT(A) therefore by relying on the decision of Hon’ble Delhi High Court in the case of Kabul Chawla (61 Taxmann.com 412) held that the issues raised therefore cannot be considered. Before us, Learned AR fairly submitted that in view of the decision rendered by Hon’ble Delhi High Court in the case of Kabul Chawla (supra), the present appeal of assessee is not maintainable and the same be disposed off accordingly.

4.

Learned DR on the other hand did not controvert the submissions made by Learned AR.

5.

We have heard the rival submissions and perused the materials available on record. In the impugned appeal, assessee has raised various grounds with respect to the claim of taxability of subsidy and claim of deduction u/s 80HHC of the Act. The impugned assessment has been framed u/s 153A of the Act. It is an undisputed fact that assessment for A.Y. 2002-03 was completed u/s 143(3) of the Act much before the search proceedings and nothing incriminating with respect to the claims now made was found during the course of search. In such a situation, we relying on the aforesaid decision of the Hon’ble Delhi High Court in the case of Kabul Chawla (supra) are of the view that the present grounds raised by the assessee are not maintainable. We therefore dismiss the grounds of appeal.

6.

In the result, appeal of the assessee is dismissed.

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