DCIT Vs M/s Reckitt Benckiser (India) Ltd. (ITAT Kolkata)
We come to Revenue’s appeal. Its sole grievance reads that the CIT(A) has erred in law and as facts in allowing arrears Section 80IB and 80IC deduction claims totaling to Rs. 1,39,48,12,000/- thereby reversing Assessing Officer’s action not taking any cognizance thereof solely for the reason that the taxpayer had not submitted its form 10CCB auditor’s report in respect of the corresponding revised claim.
It emerges at the outset that the CIT(A) order under challenge has merely directed the Assessing Officer to consider the impugned deduction claim in light of his findings on the very issue in preceding assessment year 2005 -06. Both the learned representatives are very fair in taking as to this tribunal co-ordinate bench order dated 06.01.2017 upholding identical lower appellate finding in the very issue in Revenue’s appeal in I.T.A. No. 33/Kol/2010. Honourable apex court’s decision in CIT vs. G. M Knitting Industries Pvt. Ltd. and Another [2015] 125 DTR 38 (SC) 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 as well as main appeal in I.T.A. No. 2113/Kol/2013.
FULL TEXT OF THE ITAT JUDGMENT
1.The Revenue and assessee filed their instant three cross appeals each for assessment years 2006-07, 2008-09 and 2009-10 against the CIT(A)-XII, Kolkata, separate orders dated 11.03.2013, 14.03.2013, 16.01.2014 in case nos. 924/XII/12/09-10, 390/XII/12/11-12, 3 8/XII/Cir- 12/13-14, (assessment year wise); respectively involving proceedings u/s 143(3) of the Income Tax Act, 1961 (in short the Act).
We proceed assessment year wise for the sake of convenience and brevity.
Assessment year 2006-07
Revenue’s appeal I.T.A. No. 2113/Kol/2013 and assessee’s cross appeal I.T.A. No. 2150/Kol/2013
We come to Revenue’s appeal. Its sole grievance reads that the CIT(A) has erred in law and as facts in allowing arrears Section 80IB and 80IC deduction claims totaling to Rs. 1,39,48,12,000/- thereby reversing Assessing Officer’s action not taking any cognizance thereof solely for the reason that the taxpayer had not submitted its form 10CCB auditor’s report in respect of the corresponding revised claim.
2. It emerges at the outset that the CIT(A) order under challenge has merely directed the Assessing Officer to consider the impugned deduction claim in light of his findings on the very issue in preceding assessment year 2005 -06. Both the learned representatives are very fair in taking as to this tribunal co-ordinate bench order dated 06.01.2017 upholding identical lower appellate finding in the very issue in Revenue’s appeal in I.T.A. No. 33/Kol/2010. Honourable apex court’s decision in CIT vs. G. M Knitting Industries Pvt. Ltd. and Another [2015] 125 DTR 38 (SC) 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 as well as main appeal in I.T.A. No. 2113/Kol/2013.
3. Assessee’s cross appeal in I.T.A. No. 2150/Kol/2013
The assessee’ s first substantive ground challenges correctness of both the lower authorities action declining section 80IB/ 80IC deduction claimed of Rs. 4,77,40,000/- in relations to interest income for the reason that the same has not been derived from the eligible business as per Honourable apex court’s decision in CIT vs. Sterling Products 237 ITR 579 (SC). They hold that the crucial expression ‘derived from’ used in the impugned deduction provision means the relevant income to be having a direct nexus with the business activity or profits and gains derived there from. Learned senior counsel fairly concedes that the honourable jurisdictional High Court decision in assessee’s own case reported as 231 Taxman 585 (Cal) has already upheld Revenue’s very stand. We confirm the impugned Section 80IB/80IC deduction disallowance of Rs. 4,77,40,000/- on this court alone.
4. The assessee’s next grievance is that the learned CIT(A) has erred in law and on facts in affirming the Assessing Officer action disallowing provision of marketing services amounting Rs. 10,52,08,968/-. Both parties are unanimous during the course of hearing that the Assessing Officer as well as the CIT(A) have gone by their respective findings in the immediate preceding/subsequent assessment years while making the impugned For the reason that it is in the nature of a contingent liability only than an ascertained one, we notice that the taxpayer’s corresponding substantive ground already stands accepting in assessment years 2003-04 to 2004-05 in I.T.A. Nos. 167 1/Kol/2008 and 1024/Kol/20 109 decided on 25 .05.2016 with the following detailed discussion:
“10. The issue raised in Ground No. 2 relates to the disallowance of Rs. 1,69,2 7,615!- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of provision made for marketing expenses.
