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08-07-2019,NIRJA PUBLISHERS & PRINTERS, Section 80IC, 43B, Tribunal Delhi

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3 months 4 days ago #10002 by amit
Section - 80IC, 43B, 115JB, 40(a)(ia)
Order Date - 08-07-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - ITO
Justice - H.S. SIDHU JM & B.R.R. KUMAR AM
Citation - 719Taxpundit96
Appeal No. - I.T.A. No. 1843/DEL/2016
Asstt. Year - 2011-12



The Revenue has filed this Appeal against the impugned Order dated of the Ld. CIT(A)-42, Rohtak relevant to assessment year 2011-12.

2. The grounds raised in the appeal read as under:-

“On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in :-

1. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in deleting the addition amounting to Rs. 7,28,63,103/- made by the AO by disallowing the claim of the assessee u/s. 80IC of the Income Tax Act, 1961.

2. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in not upholding disallowance of Rs. 7,28,63,013/- u/s. 80IC of the Act by ignoring the fact that the work of printing was not carried out at the premises of the assessee in the notified area for the purpose of Section 80IC of the Act?

3. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in deleting the addition made by the AO amounting to Rs. 6,04,45,025/- for not deducting the tax at source on commission payment made to M/s S.Chand & Company Pvt. Ltd. under the guise of ‘Trade Discount’.

4. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in holding that the employees’ contribution to the Employees Provident
Fund (EPF) which is deemed as the employees’ income u/s. 2(24)(X) of the Act and which is subject to deduction u/s. 36(1)(va) of the Act is also governed by Section 43B of the Act?

5. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law?

6. That the appellant craves leave to add, alter, amend or forgo any ground(s) of appeal either before or at the time of hearing of the appeal?

3. The brief facts of the case are that the assessee filed its ereturn of income at Rs. 8,31,960/- on 27.9.2011. The Assessee has declared book profit Rs.74,508,243/- under section 115JB of the Income Tax Act (in short “Act”). The return was processed under section 143(1) of the Act on the same income. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Act was issued on 26.9.2012 and the same was served. Subsequently, notice under section 142(1) of the Act was issued. In compliance to the notice, the AR of the Assessee attended from time to time and furnished various details. The assessee is engaged in the business of printing and publications of books. The assessee has claimed deduction of Rs. 78,863,013/- under section 80IC of the
Income Tax Act, 1961. In support of the claim the assessee has furnished report in Form 10CCB and on perusal of the said Form, Tax Audit Report and Financial Statement, the AO made some observations and asked the assessee to explain the claim of deduction u/s. 80IC and furnished detailed note for the nature of business carried out by it by the AO and in response to the same the assessee submitted its reply and pleaded that the activities for publishing the books are in the nature of manufacturing, which were carried on by the assessee on its own and hence, it was eligible for deduction u/s. 80IC of the Act. However, the AO observed that the assessee did not carry out any printing or binding of books in the eligible undertaking at Rudrapur as, in his view, neither the paper nor the printed material reached the eligible unit for printing, cutting and binding etc. and no manufacturing activity had actually taken place in the premises of undertaking at Rudrapur and therefore, disallowed the claim of deduction of Rs. 7,28,63,013/- and made the same to the total income of the assessee. AO with respect to the addition of Rs. 6,04,45,025/- u/s. 40(a)(ia) on account of trade discount offered by the assessee to the buyer, M/s S Chand and Company, the AO by relying upon the decision in the case of M/s Skol Breweries Ltd. (2013) 142 ITD 49 (Mum) and M/s Vodafone Essar Cellular Ltd. vs. DCIT (2011) 332 ITR 255 (Kerala), held that the said discount was in the nature of commission, on which, TDS u/s. 194H was required to be deducted, which the assessee failed to do, hence, the AO made the addition u/s. 40(a)(ia) of the Act. Further, the AO observed that the assessee had claimed expenses under the head employee’s contribution of EPF, out of which certain payments aggregating to amount of Rs. 1,11,811/- were made beyond the due date as per the relevant statute. The AO did not accept the plea of the assessee that such payments were made before the due date for filing the return of income and in which regard it placed reliance on the decisions in the case of CIT vs. Vinay Cement Ltd. (2007) 213 CTR CTR (SC) 268 and CIT vs. Aimil Ltd. (321 ITR 508 Del.) and made the addition u/s. 2(24)x r.w.s.

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