The Commissioner Of Income Tax vs Jindal Photo Ltd.
2010 Latest Caselaw 3719 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+      ITA 192/2010

THE COMMISSIONER OF INCOME TAX                ..... Appellant
                 Through: Mr. Sanjeev Sabharwal, Advocate

                     versus

JINDAL PHOTO LTD.                                         ..... Respondent

Through: None

% Date of Decision: 10th August, 2010

CORAM:

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment? No.

2. To be referred to the Reporter or not? No.

3. Whether the judgment should be reported in the Digest? No.

MANMOHAN, J

1. The present appeal has been filed by the Revenue under Section

260A of the Income Tax Act,1961 (for brevity "Act 1961") challenging

the order dated 05th June, 2009 passed by the Income Tax Appellate

Tribunal (in short "ITAT") in ITA No. 3808/DEL/2007 for the

Assessment Year 2004-2005. By virtue of the impugned order, ITAT

has deleted the addition of Rs.8,54,53,935/- made by the Assessing

Officer (hereinafter referred to as "AO") on account of deduction

claimed under Section 80-IB.

2. Briefly stated the relevant facts of this case are that a return

declaring income of Rs. 17,97,37,894/-filed by respondent-assessee was

processed u/s 143 (1) of Act, 1961. It was observed by the AO during

the assessment proceedings that the assessee had three units and the

assessee was entitled to claim deduction under Section 80-IB with

respect to two of its manufacturing units. For unit - II, assessee was

entitled to claim deduction @ 30% of profit but Nil in respect of losses

and with regard to unit -III the claim was eligible for 100% deduction

in respect of the profits.

3. AO observed that respondent-assessee had claimed deduction

under Section 80-IB of Act, 1961 of Rs.27,12,03,229 in respect of

Unit - III (PPD Unit). AO consolidated the expenses of all the units and

allocated the expenses in the ratio of turnover of the eligible unit to the

total turnover of the assessee for the purpose of computing the profits of

Unit-III. On this basis, the deduction in respect of profits of Unit -III

was recomputed at Rs 18,57,49,394. The AO further observed that the

expenses were not correctly recorded in the books of accounts and were

not properly allocated. Thus, AO disallowed the claim of

Rs.8,54,53,935/-.

4. An appeal was filed by the respondent-assessee against the order

of AO before the Commissioner of Income Tax (Appeals) (hereinafter

referred to as "CIT (A)") and the same was allowed in favour of the

assessee. The Revenue appealed against the order of CIT (A). By the

impugned order, ITAT dismissed the Revenue's appeal.

5. Mr Sanjeev Sabharwal, learned counsel for the Revenue

submitted that ITAT had erred in law in deleting the reduction of Rs

8,54,53,935/- made by AO u/s 80-IB of Act, 1961.

6. In the present case, after observing that CIT (A) had examined

the expenditure under each head and thereafter computed the profits of

Unit-III at Rs.26,69,38,154, ITAT has concluded that the finding of

CIT (A) is a positive one and is based upon analysis of expenses under

various heads. ITAT has also held that all details of the expenditure

were on record and they had been examined by CIT (A). Accordingly,

ITAT confirmed the deletion made by CIT (A).

7. We are of the view that the Revenue has failed to point out any

infirmity in the computation made by the CIT (A) and all the expenses

have been very well examined by CIT (A) and ITAT. In our opinion,

the factual findings of the final fact finding authority are neither

perverse nor contrary to record. Accordingly, we find that no

substantial question of law arises in the present appeal. Hence, the

present appeal being, bereft of merit, is dismissed in limine but with no

order as to costs.

MANMOHAN, J

CHIEF JUSTICE AUGUST 10, 2010 nk