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आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, ‘एच’ खंडपीठ अिधकरण खंडपीठ खंडपीठ मुंबई खंडपीठ मुंबई मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “H” BENCH सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं राम लाल नेगी एवं राम लाल नेगी राम लाल नेगी, , , , "याियक सद"य राम लाल नेगी "याियक सद"य "याियक सद"य "याियक सद"य Before S/Sh. Rajendra,Accountant Member & Ram Lal Negi,Judicial Member आयकर आयकर आयकर अपील आयकर अपील अपील संसंसंसं/.ITA No.4741/Mum/2014,िनधा"रण अपील िनधा"रण िनधा"रण वष" िनधा"रण वष" वष"/Assessment Year-2010-11 वष" Hygienic Research Institute Pvt. Income tax Officer Ltd.(Previously known as HRI Cosmetics Ward-8(2)(1) 602, Mumbai-400 020. Andheri West,Mumbai-400 053 PAN:AABCH 1547 F (अपीलाथ" /Appellant) (""यथ" / Respondent) िनधा"रती िनधा"रती ओर ओर सेसेसेसे/Assessee by : Ms. Usha Prajapati िनधा"रती िनधा"रती ओर ओर राज"व क" ओर से/ Revenue by : Shri B.D. Naik सुनवाई सुनवाई सुनवाई क" सुनवाई क" क" तारीख क" तारीख तारीख / Date of Hearing : 18.02.2016 तारीख घोषणा क" तारीख / Date of Pronouncement : 29.02.2016 आयकर आयकर आयकर अिधिनयम आयकर अिधिनयम अिधिनयम,1961 अिधिनयम 1961 क" क" क" धारा क" धारा धारा 254 धारा 254(1)केकेकेके अ"तग"त अ"तग"त अ"तग"त आदेश अ"तग"त आदेश आदेश आदेश 1961 1961 254 254 Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद"य लेखा लेखा सद"य सद"य राजे"" सद"य राजे"" राजे"" केकेकेके अनुसार राजे"" अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order,dated17.04.2014 of CIT(A)-17,Mumbai the Assessee has filed the present appeal.Assessee-company,engaged in the business of manufacturing of Hair-Dyes etc.,filed its return of income on 28.09. 2010, declaring total income at Rs.3.52 lakhs.The Assessing Officer (AO)completed the assessment, u/s 143(3) of the Act,on 13.03.2013,determining the income of the assessee at Rs.79.06 lakhs. 2.First effective ground of appeal,filed by the assessee,is about disallowance made while calculating the deduction available u/s.80IC of the Act.During the assessment proceedings,the AO found that the assessee had claimed deduction of Rs.75.53 lakhs under the heads Insurance Claim (Rs.71.93 lakhs) and Miscellaneous Claim(Rs.3.60 lakhs).He asked the assessee as to why the above income should not be assessed under the head income from other sources.After considering the submissions of the assessee,he held that the AO had received insurance claim on loss of packing materials in fire,that the provisions of section 80IC were abundantly clear that profit and gains derived from business of manufacturing/producing of the articles/thing would be eligible for deduction,that insurance claim and miscellaneous income were not directly or indirectly derived from such manufacturing or producing of things or articles,that same was not eligible for deduction. 3.Aggrieved by the order of AO,the assessee preferred an appeal before the First Appellate Authority(FAA).Before him,the made elaborate submissions.After considering the submissions of the assessee and the assessment order,he held that miscellaneous income was not derived from the industrial undertaking,that it had no direct proximity with the activities of the assessee,that it included sundry debtors written off u/s.41(1)of the Act,that the issue of 4741/14-Hygienic Research Institute P.Ltd.
insurance claim stood decided against the assessee by the judgment of the P &H High Court delivered in the case of Khemka Container Pvt.Ltd.(275ITR559).Following the said judgment,he dismissed the appeal filed by the assessee. 4.Before us,the Authorised Representative(AR)stated that the insurance claim was received towards loss of packing material etc.,that it was part of carrying on of the business,destruction of goods by fire would hardly make any significant difference for claiming/allowing deduction u/s. 80IC of the Act,that that provisions of section 80IC fell in the category of beneficial provisions , that insurance claim received should have been considered as profits derived from industrial undertaking.AR relied upon the cases of Shree Ram MultiTech Ltd(33 Taxman94)Sportking India Ltd.(183 Taxman 312) and Biotech Medicals(119ITD143),that the matter of Khemka Container Pvt.Ltd.supported the claim made by the assessee.Departmental Representative (DR) supported the order of the FAA. 5.We have heard the rival submissions and perused the material before us.We find that during the year under appeal fire had occurred in the factory located in Himachal Pradesh,that the assessee had received compensation from the insurance company,amounting to Rs.71.93 lakhs,that the compensation was received towards loss of packing material and raw and finished goods,that it was also a fact the fire accident was not an isolated event-rather it was directly related to the carrying on of business of the assessee.In other words,there was nexus to the business where goods were destroyed and for which insurance was recieved.Section 80IC of the Act was introduced to give impetus to generate employment in certain areas/locations.Therefore, we are of the opinion that the insurance claim received by the assessee had to be considered as profits derived from industrial undertaking and that the assessee was entitled to claim deduction u/s.80IC of the Act.We find that the Hon’ble Gujarat High Court in the case of Shree Rama Multi Tech Ltd. (supra)had held that insurance claim for loss of raw material or finished goods would be eligible for deduction u/s.80IC of the Act.Considering the facts of the case and following the above judgment of the Hon’ble Gujarat High Court,we hold that insurance claim was eligible for deduction u/s.80IC of the Act. But,as far as other amount i.e. Rs.3.60 lakhs is concerned, it is found that the AO and the FAA have given a categorical finding of fact that details, in that regard, were not filed before them.We find that the assessee had not filed any application u/s.154 of the Act before any of the authorities to challenge the finding given by them.Therefore,we are of the opinion that the FAA had rightly upheld the order of the AO and had held that amount in question was not eligible for deduction u/s.80IC of the Act.Effective ground of appeal is allowed in favour of the assessee,in part As a result,appeal filed by the assessee stands partly allowed फलतःिनधा"रती "ारा दािखल क" गई अपील आंिशक "प से मंजूर क" जाती है Order pronounced in the open court on 29th February, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 29 फरवरी, 2016 को क" गई । (राम लाल नेगी /Ram Lal Negi) (राजे"" / RAJENDRA) "याियक सद"य / JUDICIAL MEMBER लेखा लेखा लेखा सद"य लेखा सद"य सद"य / ACCOUNTANT MEMBER सद"य मुंबई/Mumbai,"दनांक/Date: 29.02. 2016 व.िन.स.Jv.Sr.PS. 2
4741/14-Hygienic Research Institute P.Ltd.
आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत 1.Appellant /अपीलाथ"
Respondent /""यथ" 3.The concerned CIT(A)/संब" अपीलीय आयकर आयु", 4.The concerned CIT /संब" आयकर आयु" 5.DR A Bench, ITAT, Mumbai /िवभागीय "ितिनिध, H खंडपीठ,आ.अ."याया.मुंबई 6.Guard File/गाड" फाईल स"यािपत "ित //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst.