The Commissioner of Income Tax IV vs. Praga Tools Limited

205 I Commissione

M/s Venus Re

CORAM: H

Present M

SANJEEV P 1.

T following que 1 H w a a e 2 H v a 3 C t R R r p IN THE HIGH COURT OF PUN AT CHANDIGA

I D er of Income Tax-II, CHD Vs. emedies Ltd.

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Vaibhav Gupta, Advocate fo

RAKASH SHARMA, J.(Oral) The case was admitted on 04. estion of law:- 1) Whether on the facts and in th Hon'ble ITAT was right in uphol who directed the AO to realloc and to reduce the addition to addition of Rs.7,61,96,306/- expenditure u/s 69C. 2) Whether on the facts and in th Hon'ble ITAT was right in uphol vide which relief on accoun amounting to Rs.8,76,27,511/- w 3) Whether the Hon'ble ITAT CIT(A)'s method of not apportion o the financial costs of Rs. Rs.1,63,04,928/-, Capital Expen Rs.3,00,67,328/- and deferred r research u/s 35(2) of Rs.1,55,3 purposes of determining deducti NJAB AND HARYANA ARH ITA-81-2012 (O&M) Date of Decision: 25.07.2024

…Appellant

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH or the appellant.

) .03.2014, for determination on he circumstances of the case, the lding the decision of Ld. CIT(A) cate the expenses on sales ratio Rs.142.24 lacs as against the on account of unexplained he circumstances of the case, the lding the decision of Ld. CIT(A) nt of disallowance u/s 80IC was allowed. was right in law in accepting ning part of expenditure relating 1,93,15,643/-, Depreciation of nditure on R&D u/s 35(2) of revenue expenses on scientific 36,344/- to the Baddi Unit or ion u/s 80IC, when the assessee

n e ) o e d e ) C g g f f c r e RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

h t 2.

H 3.

N behalf of the r 4.

L Section 80IC Section 80IC 5.

W the necessary “ ( f ( b P u r s c ( m E s c c 6.

L the ITAT and effect of sub-

ITA-81-2012 (O&M) had not produced separate books he course of assessment proceed Heard learned counsel for the rev No one inspite of notice having respondents. Learned counsel has invited a of the Income Tax Act, 1961, t would not be available. We find that as per Section 80IC requirements for granting the sa “xx xx xx (4) This section applies to any u fulfils all the following condition (i) it is not formed by splitting business already in existence : Provided that this condition sh undertaking which is formed as reconstruction or revival by the such undertaking as is referre circumstances and within the per (ii) it is not formed by the t machinery or plant previously us Explanation:- The provisions of section (3) of section 80-IA sh clause (ii) of this sub-section as clause (ii) of that sub-section.” Learned counsel has invited our d we find that while there is ref section 4 with reference to the f [2] s of accounts for the two units in dings. venue. g been served has appeared on attention to the provisions of to submit that the benefit under C sub-Section 4 of the Act, 1961, aid benefits are as under:- undertaking or enterprise which ns, namely:- up, or the reconstruction, of a hall not apply in respect of an a result of the re-establishment, assessee of the business of any ed to in section 33B, in the riod specified in that section; transfer to a new business of sed for any purpose. f Explanations 1 and 2 to sub- hall apply for the purposes of s they apply for the purposes of attention to the order passed by ference to Section 80IC but the facts relevant in the present case

n n f r , h a n , y e f - f f y e e RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

has not been (Appeals) has the said benef the pin condit 7.

A find that the and accordin However, two favour of the that the order aspect are qua to decide on operation of accordingly a 8.

25.07.2024 rajesh

1 2

ITA-81-2012 (O&M) n examined by the ITAT at all s taken into consideration and th fit solely on the ground that the r tions for grant of benefit under S As regards question No.1 frame reallocation the expenses on sa ngly, question No.1 is answer o questions namely question N revenue in view of our observa r passed by the CIT (Appeal) as ashed and set aside and the matte the aforesaid questions afresh a sub-section 4 of 80IC of th llowed to the said extent. All pending misc. application(s)

(SANJ

[3] l. On the other hand, the CIT he Assessing Officer had denied respondent was unable to satisfy Section 80IC as above. ed at the time of admission, we ales ratio could have been done red in favour of the assesse. Nos.2 and 3 stand answered in tions hereinabove and we direct s well as ITAT on the aforesaid er is remanded back to the ITAT after considering the effect and he Act, 1961. The appeal is also stand disposed of. JEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE : Yes/No : Yes/No

T d y e e . n t d T d s RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.