AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 151
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....h appeal was argued before us. Briefly stated the facts of the case are that the survey action u/s 133A of the Act was carried out on Jyothy Labs Limited and its associated concerns by the Investigation Wing, Mumbai, which started on 02/11/2022, and ended on 06/11/2022. During the survey, statements of various key persons were recorded u/s 131 of the Act, and few registers, data, documents were found and impounded. 2.1. While scrutinizing the return of income, the AO noticed that the assessee has claimed deduction u/s 80IB/IC of the Act in Uttaranchal unit as the process of preparation of Ujala Supreme was claimed as eligible for deduction. The AO was of the opinion that the claim of deduction u/s 80IB/IC of the Act is not allowable as the assessee is actually not producing or manufacturing any eligible item or thing as per the definition in the Act. The AO further observed that deduction claimed by the assessee for production of fabric, whiteners in its Ujala Factory was disallowed in assessments u/s 143(2) from AY 2009-10 to AY 2018-19. Taking a leaf out of the past history, the AO disallowed the claim of deduction. When the matter was agitated before the ld. CIT(A), the ld. C....
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.... (c) Sleeve labelling of the containers with brand name, commodity name, instruction to use and other statutory descriptions. (d) Blending (mixing) of the raw material acid violet 49 paste (hereinafter referred to as 'AVP' or "Acid Violet Paste") in water in a specified proportion (1% of AVP mixed with 99% of water) and stirring for 45 minutes using electrically operated stirrer. This dilution is undertaken with the use of plant and machinery involving electric power as well as manpower. (e) This liquid is pumped through filter cloth to remove impurities/undissolved particles & stored in distribution tank from where it is transferred to filling stations using pipe. (f) Filling the labelled HDPE containers of 30 ml, 75 ml and 250 ml capacity with the above liquid Fabric Whitener and closing/capping to market the end product to be used by consumers for obtaining super whiteness of clothes. (g) The quality assurance is ensured by the designated department at various stages from receipt of materials till final dispatch of the end product. (h) Filling in polypropylene covers for retail dispensation. (i) Secondary packa....
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....) 84 taxmann.com 239. 8. The point raised is that when the deductions under section 80IC as well as under section 80IB of the Act have been granted in the initial assessment years, the same could not be rejected for the subsequent assessment years unless the relief allowed for the initial year was withdrawn. It has been pointed out by the learned A.R. that the deductions under Section 80IB and 80IC of the Act are allowable to an assessee over a specified number of consecutive assessment years, and in the instant case, such claims have not been withdrawn in the initial assessment years, therefore the action of the Assessing Officer to deny the claim in the instant assessment year is untenable. In support, reliance has also been placed on the principle laid down by the Hon'ble High Court in the case of CIT vs. Paul Brothers (1995) 216 ITR 548 (Bom.), which has been subsequently reiterated and applied by the Hon'ble High Court in the case of Simple Food Products (P) Ltd. (supra). 9. The learned D.R. has not joined issue with the respondent-assessee on factual matrix, but pointed out that the Assessing Officer has denied the claim in the instant year on a just....
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....11 has been furnished wherein the claim under Section 80IC of the Act has been accepted. In Assessment Year 2010-11 also, vide order under section 143(3) of the Act dated 06.12.2012 aforesaid claims have been accepted. It has also been pointed out that when the two claims were denied in the instant assessment, the claims allowed in the respective initial assessment years were not withdrawn. In this background, the moot question is as to whether in the instant year, can the Assessing Officer deny the claim of deduction under section 80IB as well as under section 80IC of the Act considering that the said claims were not withdrawn for respective initial assessment years. 11. So far as the point of controversy before us is concerned, the mechanics of Section 80IB of the Act are similar to that of Section 80IC of the Act. For the present purpose, it is sufficient to note that both the deductions are eligible for a period of ten consecutive assessment years starting from the initial assessment year when the Undertaking of the assessee commences manufacture/production. As the factual matrix of the present case shows, the initial assessment year for the claim of deduction under Se....
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....Ltd. (supra) viz. that the assessment in that case has been completed under Section 143(3) of the Act in initial year and it is only in such cases that the Revenue be barred from denying the claim for deduction in the subsequent Assessment Years, unless the claim for deduction has been withdrawn in the initial year when deduction was claimed and allowed unlike an assessment which iscompleted under Section 143(1) of the Act. We have perused the decision of this Court in Dinshaw Frozen Food Ltd. Nagpur (supra) which in turn has followed the decision Paul Brothers (supra). We note that there is no finding in the two orders to the effect that the in the initial year the claim under Section 80IA/IB of the Act was granted by virtue of an order passed under Section 143(3) of the Act. Nothing has been brought on record to indicate that there has been some change in manufacturing process from that existing when the claim was allowed in the initial year i.e. Assessment Year 1996- 1997 and subject Assessments. The intent/object of the deduction under Section 80IA/IB of the Act is to encourage setting up of industries to manufacture goods which are not specified in the Eleventh Schedule to the....
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....t for the instant year was finalised under Section 143(3) of the Act dated 31.03.2014, a notice under Section 148 of the Act was issued on 21.03.2014 to reopen the assessment for Assessment Year 2009-10 in order to withdraw the claim earlier granted under Section 80IC of the Act, therefore, it could be said that the claim in the initial assessment year was disturbed. On this aspect, the learned representative for the respondent assessee vehemently pointed out that issuance of a notice under Section 148 of the Act to reopen assessment to withdraw a claim would not mean withdrawal of claim ipso facto'. It was emphasised that at the time of rejecting the claim in the instant assessment year, ie. on the date of passing of the assessment order, the claim under Section 80IC of the Act for Assessment Year 2009-10 (which was the initial assessment year) was not withdrawn and it remained undisturbed as the assessment order dated 23.03.2011 for Assessment Year 2009-10 continued to hold the Wield. I5. In our view, the aforesaid objection of the Revenue does not come in the way of applying the proposition laid down by the Hon'ble Bombay High Court in the case of Simple Food Pr....
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.... us 80IB & 80IC of the Act. Therefore, this ground of appeal of the revenue stand dismissed." 5. As no new facts have been brought to our notice, respectfully following the decisions of the Co-ordinate Bench (supra), Ground Nos. 1 & 2 are dismissed in the appeals of the captioned assessment years. 6. The next common grievance in the captioned assessment years is the allocation of interest and finance costs to the units claiming deduction u/s 80IC/IB of the Act. This issue is common in AY 2016-17 and 2021-22. 7. While scrutinising the return of income, the AO noticed that the interest expense had been incurred by the assessee which had not been allocated to the units claiming deduction u/s 80IB/80IC of the Act leading to higher profits and higher deductions. The AO was of the opinion that the interest cost should have been allocated to the factories claiming deduction u/s 80IB/80IC of the Act. The AO on his belief that any expenses incurred for running or establishing a plant has to be matched with the revenue receipt from such plant by not allocating such expenses. The assessee has claimed deduction twice. Once by claiming such expenses as a revenue expenditure and setting....
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.... the ld. CIT(A) was convinced that the investment in setting up the units for the initial assessment years was made out of surplus/interest free funds and accordingly held that interest cost cannot be allocated towards the said units and accordingly deleted the addition. 8. Before us, the ld. D/R strongly supported the findings of the AO. The ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 9. After giving a thoughtful consideration to the findings of the ld. CIT(A) and finding that the facts considered by the ld. CIT(A) have not been controverted by the revenue, we do not find any reason to interfere with the findings of the ld. CIT(A). This common ground in all the appeals pertaining to AY 2016-17 to 2021-22 is dismissed. 10. The next common ground in the captioned appeals by the revenue relates to the deletion of the disallowance u/s 14A r.w.r. 8D. 11. At the very outset, we find that in AY 2016-17, 2018-19, 2020-21, 2021-22 and 2022-23, there is no exempt income. The undisputed fact is that the assessee did not earn any exempt income during the years under consideration. Therefore, provisions of Section 14A r.w.r 8D, d....
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....till date. Be that as it may, the AO is directed to grant the credit of TDS as per the provisions of law or in the alternative dispose of the rectification application as early as possible. Charging of interest u/s 234A, 234B and 243C of the Act is consequential. 17. In C.O. No. 180/Mum/2025 pertaining to AY 2019-20, Ground No. 7 relates to the addition of Rs. 1,04,09,422/- to the total income of the assessee by invoking the provisions of Section 50C of the Act. 18. Briefly stated, the underlying facts in the issue are that the assessee has sold two immovable properties in the state of West Bengal (i) situated at Panditia Road, Kolkata and (ii) situated at Siliguri. The property at Kolkata resulted into long term capital loss of Rs. 4,38,116/- whereas the property situated at Siliguri resulted into long term capital gain of Rs. 63,27,329/- and accordingly, net long term capital gain was shown at Rs. 58,89,213/-. However, taking the stamp duty value of the aforesaid properties, addition of Rs. 1,04,09,422/- was made which was confirmed by the ld. CIT(A). Before us, the ld. Counsel for the assessee strongly contended that the impugned sale was a distress sale and the market val....