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2019 (3) TMI 626 - ITAT KOLKATADeduction u/s 80IB and 80IC - taxpayer had not submitted its form 10CCB auditor’s report in respect of the corresponding revised claim - HELD THAT:- Honourable apex court’s decision in CIT vs. G. M Knitting Industries Pvt. Ltd. and Another [2015 (11) TMI 397 - SUPREME COURT] has already settled the law that an assessee is entitled for Section 80IB deduction even if it files its form 10CCB audit report not with the return but before completion of assessment. This is not the Revenue’s case that the assessee’s audit report has escaped the Assessing Officer consideration during assessment . There is no distinction on facts or law involvement in the two assessment years. We thus decline the Revenue’s instant substantive ground Deduction u/s 80IB/ 80IC deduction - decline claim as interest income for the reason that the same has not been derived from the eligible business as per decision in CIT vs. Sterling Products [1999 (4) TMI 1 - SUPREME COURT] - HELD THAT:- Learned senior counsel fairly concedes that the honourable jurisdictional High Court decision in assessee’s own case [2018 (4) TMI 1129 - ITAT KOLKATA] has already upheld Revenue’s very stand. We confirm the impugned Section 80IB/80IC deduction disallowance on this court alone. Disallowing provision of marketing services - whether it is in the nature of a contingent liability only than an ascertained one? - DR vehemently contends that the assessee has failed to prove the three basic ingredients of its impugned provisions i.e. an obligation arising as a result of past events, outflow of resources required for the very obligation followed by a reliable estimation; respectively - HELD THAT:- The assessee inter alia takes us to assessment year wise details of the marketing services from assessment year 2004-05 onwards, notes pertaining to its media activity, creation of marketing provision and reversal thereof, sample estimation, TV estimate and schedule as well as other similar details for its advertisements/marketing expenses for the impugned assessment order amounting to ₹ 156.94 crores. Both the lower authorities have been very fair in not pinpointing any distinction on facts and law in the instant case in all these assessment years. We adopt the above extracted reasoning mutatis mutandis qua the impugned assessment order to delete the disallowance of marketing services’ provision. Disallowance u/s 14A - HELD THAT:- CIT(A) has followed the findings on the very issue in earlier assessment years to estimate the impugned disallowance @ 1% of exempt income; coming to ₹ 23,660/- Mr. Khaitan states very fairly that this Tribunal has already affirmed the said estimated disallowance @1%. We thus reject the assessee’s instant substantive ground. Allocating residual cost between eligible and non-eligible elements in ratio of sales u/s 80IB/80IC - treating scrap sales to be eligible for the said deduction relief - HELD THAT:- no merit in Revenue’s instant grievance. There is no dispute even as per assessment order about the assessee having allocated 32 out of its 115 employees / executives to manufacturing segment. The assessee has been running both eligible as well as non-eligible units. Its allocation formula was number of 32 employees divided by total number of employees multiplied by eligible units sales further divided by total sales; to allocate the impugned expenditure. The same very formula had been applied in assessment year 2005-06 as well wherein the co-ordinate bench (supra) accepted the same in its order. We make it very clear that the Assessing Officer has himself accepted the assessee to have been engaged in trading of other segments. We therefore conclude in these facts and circumstances that the CIT(A) has rightly followed his findings of assessment year 2005-06 as applicable mutatis mutandis in the impugned assessment year as well. Scrap sales, both parties are ad idem that the CIT(A) has followed preceding assessment order findings in treating the same to be entitled for section 80IB deduction Disallowance u/s 40a(ia) - TDS was deducted and deposited to the government treasury during the relevant previous year - HELD THAT:- The assessee’s case at best is that it had filed the impugned relevant facts in its written submission dated 16.01.2014 before the CIT(A) for the first time. The lower appellate order on the other hand makes it evident that the last hearing before the CIT(A) took place on 13.01.2014 finally culminating in the order under challenge dated 16.01.2014. The assessee’s written submission of the same date where prove that they had been actually received before passing of the final order in the lower appellate proceedings. We do not see any valid reason in assessee’s instant third and last substantive ground, on this ground alone.
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