Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (7) TMI 535

..... ding of books in the eligible undertaking at Rudrapur as neither the paper nor the printed material reached the eligible unit for printing, cutting and binding etc. - HELD THAT:- The assessee filed his confirmation during appellate proceedings on which no adverse comment was given by the AO in the remand report. The difference in the value of machinery in the bill and the Form 16 has no bearing on the deduction claimed u/s 80IC of the Act. The only thing required to be proved that the machinery was transported to Rudrapur and used there. The assessee produced evidences to prove this fact on which no adverse observation was given by the AO in the remand report. The assessee’s explanation regarding the ‘cartage’ being included in the other expenses in the return of income on verification was found correct. The assessee filed various documents like purchase bills of paper, lorry receipts, bills of transporter, Form 16 issued by the VAT department for entry of any goods in Uttarakhand to show that paper was transported to Rudrapur and sent back to the printer in Delhi, then printed sheets were sent from Delhi to Rudrapur where books were manufactured which were transp .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... T:- The employees contribution to EPF was deposited well before the due date of filing of return of income. The assessee has explained the circumstances in which such delay has been occurred. Thus, relying on the judgment of CIT vs. Vinay Cement Ltd. [2007 (3) TMI 346 - SC ORDER] and CIT vs. AIMIL Ltd. [2009 (12) TMI 38 - DELHI HIGH COURT] the addition was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue. - I.T.A. No. 1843/DEL/2016 - 8-7-2019 - Shri H.S. Sidhu, Judicial Member And Shri B.R.R. Kumar, Accountant Member For the Assessee : Sh . V.K. Bindal, CA And Ms. Sweety Kothari, CA For the Revenue : Sh. S.S. Rana, CIT(DR) ORDER PER H.S. SIDHU : JM The Revenue has filed this Appeal against the impugned Order dated 29.1.2.016 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 deletin .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... C 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 ₹ 7,28,63,013/- and made the same to the total income of the assessee. AO with respect to the addition of ₹ 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 discou .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ence, acceptance of claim of the assessee in earlier year does not have any bearing for this year. The claim of the assessee u/s 80IC is not allowable in view of following facts duly recorded by the AO: 1. The assessee in its written submission reproduced on page 5 of the assessment order has stated as follows: Para 20 - P. S. Plate, Ink & Chemicals are used for printing of books. The assessee company did not carry on any printing during the last year on its own and got the entire printing done through others and therefore no such expenses were incurred during the last year The assessee itself has admitted that entire printing was done through others and hence deduction u/s 80IC of ₹ 7,28,63,013/- is not allowable. 2. Audit report details as on point number 28(b) mentions that assessee does not have printing units of its own, but gets the books printed from outside parties on job work basis. (Page 16 of AO) 3. Despite being given adequate opportunity, assessee failed to furnish bills of freight paid for lifting of paper from Delhi to Rudrapur as well as freight paid for lifting of printed material. (Page 15 of AO) 4. Perusal of ITR reveals that assessee claimed nil cartag .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... assessee is a publisher of the printed books. Thus, the reporting the same not so in the Form No. 10CCB is an inadvertent error and not corroborated by any other evidences. The fact that the assessee receives printed material which are trimmed and bound to give it the shape of a saleable book shows that the business operation of the assessee is in the nature of manufacturing as per Durga Products Vs ITO (2008) 12 DTR (Chd)(Trib) 297. The assessee used various machines for finishing, binding, three side cutting of books at its factory premises. Details of glue expenses and binding charges with supporting bills were also filed. The assessee carried out some of the printing on its own and filed details of expenses of ink and plates which were also sent to the AO in the remand proceedings but no adverse observation was made by the AO on the same in the remand report. Therefore, it is not necessary to have a printing unit of its own or to carry out binding on its own for holding the publication of books as a manufacturing activity in view of CIT Vs A Mukherjee & Co. (P) Ltd. (1978) 113 ITR 718 (Cal), Orient Longman Ltd. Vs CIT (1981) 130 ITR 477 (Del) and Gulab Chand Jam vs WTO (19 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... n terms of the provisions of the sub- sections (8) or (10) of the section 80IA of the Act can be drawn. The claim of the assessee in respect of carrying out publishing activity from the eligible undertaking was found genuine on the basis of relevant evidences placed on record and not refuted by the AO in the remand report and thus, assessee is eligible to deduction u/s 80IC of the Act. Once the deduction u/s 80IC of the Act is allowed in the initial assessment year i.e. in the AY 2010-11 after due verification of the prescribed conditions and there is no change in the facts, then the deduction cannot be disallowed in subsequent years on the ground of non-fulfillment of conditions laid down in section 80-IC of the Act. This view has been fortified by the decision of the Hon ble Delhi High Court in the case of CIT vs. Tata Communication Internet SErvicse Ltd. (2012) 251 CTR 290 (Del.) and the decision in CIT vs. Delhi Press Patra Prakashan Ltd. (2013) 260 CTR (Del.) 253 and the decision in the case of Janak Dehydration Pvt. Ltd. vs. ACIT (2010) 134 TTJ (Ahd. (UO), which deal with this issue with regard to the claim of deduction under section 80IA and section 80IB, respectively, which .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... discount given to them is nothing but commission. In the case of Skol Breweries (Supra), it was held that when a purchase / sales is made at discounted price, it is called discount but when an incentive is given for undertaking task / job/ services provided or on sale of goods by one person on behalf of other, then it is commission. Since the benefit given by the assessee to M/s S. Chand Co. Ltd. was in the nature of trade discount and not commission , therefore, the assessee was not required to deduct income tax at source u/s. 194H of the Act, thus, no disallowance can be made u/s. 40(a)(ia) of the Act. Therefore, the action of making disallowance u/s. 40(a)(ia) was not called for, as the assessee is not required to deduct TDS u/s. 194H on such discount, which was not in lieu of any services for effecting sales, but was a trade discount. In view of above, Ld. CIT(A) has rightly allowed this ground in favour of the assessee, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue. 6.2 With regard to disallowance for delay in deposit of Employees Contribution to PF is concerne .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||