Wings Pharaceuticals Pvt. Ltd., New ... vs Department Of Income Tax
- CitationITA No.5078/Del/2013
Ratio decidendi
The rule this decision rests on
Where the same issue has been decided by the Tribunal for earlier assessment years and no distinguishing feature of the year under appeal is shown, the Tribunal will follow the earlier decisions and decide the issue in the same manner. Where the Tribunal's earlier decisions are rendered in the assessee's own case and the Revenue points to no distinguishing feature of the year in question, the disallowance made on the same basis is to be deleted, following the precedent. The mandate of Rule 8D of the Income-tax Rules applies to the assessment year under consideration, in view of the jurisdictional High Court's decision in Maxopp Investments Ltd. v. CIT, and disallowance under section 14A computed under Rule 8D may be sustained on that footing, following that precedent.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
DCIT, Vs. Wings Pharmaceuticals Pvt. Circle-18(1), Ltd., New Delhi. J-13, Udyog Vihar, Industrial Area, New Delhi. PAN : AAACW0963B
CO No.49/Del/2014 (ITA No.5078/Del/2013) Assessment Year : 2010-11
Wings Pharmaceuticals Pvt. Vs. DCIT, Ltd., Circle-18(1), J-13, Udyog Vihar, New Delhi. Industrial Area, New Delhi. PAN : AAACW0963B (Appellant) (Respondent)
Assessee By : Shri Anil Kumar Jain, FCA Department By : Shri J.P. Chandrakar, Sr.DR ORDER
PER R.S. SYAL, AM:
This appeal by the Revenue and the Cross Objection by the
assessee arise out of the order passed by the CIT(A) on 29.5.13 in
relation to the assessment year 2010-11.
ITA No.5078/Del/2013 CO No.49/Del/2014
2. The only ground raised by the Revenue in its appeal is
against allowing deduction of `8,08,04,360/- u/s 80IC of the
Income-tax Act, 1961 (hereinafter also called 'the Act') in respect
of income from unit at Baddi.
3. Briefly stated, the facts of the case are that the assessee
also claimed deduction u/s 80IC on its job work income. On being
called upon to explain as to how job work income could be treated
as income derived from manufacturing activity, the assessee
gave explanation which did not find favour with the AO. Following
his view taken for the AYs 2006-07, 2007-08 and 2008-09, the AO
rejected such claim of deduction u/s 80IC. The ld. CIT(A)
overturned the assessment order on this point by relying on his
orders for earlier years.
4. After considering the rival submissions and perusing the
relevant material on record, it is noticed that the AO as well as
the ld. CIT(A) have relied on their respective opinions for the
earlier years in making and deleting the disallowance. Such issue
came up for consideration before the Tribunal in assessee's case
for the AYs 2006-07 to 2009-10. Vide its separate orders dated
2 ITA No.5078/Del/2013 CO No.49/Del/2014
7.2.2014 and 29.5.14, the Tribunal has upheld the decision of the
ld. CIT(A) in allowing deduction u/s 80IC in respect of this income.
No distinguishing feature of the instant year vis-a-vis the
preceding years has been brought to our notice by the ld. DR.
Respectfully following the precedents, we uphold the impugned
order in deleting this disallowance.
5. The only issue raised by the assessee in its Cross Objection
is against the confirmation of disallowance of `7,36,403/- made
u/s 14A of the Act. The facts apropos this ground are that the
assessee earned certain exempt income and offered disallowance
u/s 14A for a sum of `18,13,730/-. The AO, while calculating
disallowance as per Rule 8D, made a further disallowance of
`8,37,168/-. The ld. CIT(A) restricted the disallowance to a sum of
`7,36,403/-.
6. After considering the rival submissions and perusing the
relevant material on record, we find that the first component of
this disallowance is a sum of `39,221/- towards interest. In this
regard, it is noted that the ld. CIT(A) reduced the disallowance by
excluding the interest on FBT and TDS, for which separate
3 ITA No.5078/Del/2013 CO No.49/Del/2014
disallowance was made. No material has been placed on record
to controvert the finding recorded by the ld. CIT(A) in sustaining
the disallowance to this extent. The second component of the
disallowance is a sum of `6,97,182/- which represents ½% of the
average value of investment as per Rule 8D(iii). The mandate of
Rule 8D is applicable to the assessment year under consideration
in view of the judgment of the Hon'ble jurisdictional High Court in
the case of Maxopp Investments Ltd. Vs. CIT (2012) 347 ITR 272
(Del). Respectfully following the precedent, we uphold the
disallowance sustained in the first appeal on this issue.
7. In the result, the Revenue's appeal as well as the assessee's
CO are dismissed.
The order pronounced in the open court on 06.01.2015.
Sd/- Sd/-
[A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, 06th January, 2015.
dk
4 ITA No.5078/Del/2013 CO No.49/Del/2014
Copy forwarded to:
1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT
AR, ITAT, NEW DELHI.
5
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