Income Tax Appellate Tribunal - Chandigarh
Shree Dhanwantri Herbals, Baddi vs Department Of Income Tax on 30 January, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'B', CHANDIGARH
BEFORE SHR I T.R. SOOD, ACCOUNTANT MEMBER
AND Ms. SUSHMA CHOWLA, JUDICIAL MEMBER
ITA No.1202 /Chd/2012
(Assessment Year: 2009-10)
The Income Tax Officer, Vs. Shree Dhanwantri Herbals,
Baddi. Vill.Kishanpura,PO Gurumajara,
Tehsil Nalagarh, Distt.Solan.
PAN: AAZFS 3118E
(Appellant) (Respondent)
Appellant by : Shri N.K.Saini, DR
Respondent by : Shri Manoj Kumar
Date of hearing : 30.01.2013
Date of Pronouncement : 31.01.2013
O R D E R
Per SUSHMA CHOWLA, J.M. :
This appeal by the Revenue is against the order of the Commissioner of Income Tax (Appeals), Shimla dated 16.08.2012 r e l a t i n g t o a s s e s s m e n t ye a r 2 0 0 9 - 1 0 a g a i n s t t h e o r d e r p a s s e d u / s 1 4 3 ( 3 ) of Income Tax Act, 1961 (in short 'the Act').
2. The learned A.R. for the assessee pointed out that the issue is covered by the order of the Tribunal in assessee's own case relating to assessment year 2006-07.
3. The learned D.R. for the Revenue placed reliance on the order of the Assessing Officer.
4. The issue arising in the present appeal is in relation to the deduction claimed under section 80IC of the Act. The assessee is engaged in manufacturing and sale of herbal medicine. During the year under consideration the assessee had declared gross sales of Rs.14.87 crores declaring gross profit of Rs.7.23 crores (48.61%) and net profit of Rs.1.31 crores (8.82%). The assessee was 2 carrying on manufacturing activities in unit No.1 at Amritsar and Unit No.2 at Kishanpura, Baddi. The profits of Amritsar Unit were declared for taxation purposes. However, the assessee claimed deduction under section 80IC of the Act on the profits earned from Unit No.2 at Baddi. In response to query raised by the Assessing Officer the assessee furnished separate details of sales, gross profit and NP rate of both the units under which the assessee had declared NP ratio at 1.48% in Amritsar unit and 10.81% in Baddi unit. The Assessing Officer noted the assessee not to have debited any expenses on account of technical know-how, customers' base and goodwill. The assessee had also not debited any expenditure on account of interest paid on the capital contribution of the partners. As per the Assessing Officer the business results declared by the assessee were inflated. The Assessing Officer invoked the provisions of section 80IA(10) of the Act and restricted the deduction under section 80IC of the Act resulting in addition of Rs.58,53,750/-
5. The year under appeal was the 4th year of manufacturing and similar exercise was carried out by the Assessing Officer in assessment year 2006-07. The Tribunal in assessee's own case in ITA No.117/Chd/2010 vide order dated 11.8.2010, in turn rel ying upon the ratio laid down by the Chandigarh Bench of the Tribunal in M/s Lambda Microwave in ITA No.725/Chd/2009, dated 29.1.2010 and M/s Poly Lab Products vide ITA No.710/Chd/2009 dated 29.1.2010 held as under:
"5. In the present case, the Assessing Officer has not found any evidence to support his proposition that there is any arrangement or any business transacted between the assessee and the sister concern with respect to obtaining of technical know-how, customer base or goodwill owned by the sister concern and therefore, the assertion of the Assessing Officer that the assessee has obtained the use of aforesaid items without incurring of any expenditure, is only a bald assertion based on surmises and conjectures. It is quite clear that there is no proof of assessee having obtained any 3 technical know-how, customer base or goodwill from the sister concern. In these circumstances, the decision of the Tribunal in the case of Lambda Microwaves Technologies (supra) clearly supports the case of the assessee and accordingly, assessee succeeds on Ground No.1 in as much as the invoking of Section 80IA(10) read with Section 80IC(7) by the Assessing Officer is hereby set aside."
6. The facts of the present case are identical to the facts in assessment year 2006-07and following the ratio laid down by the Tribunal in assessee's own case we uphold the order of the CIT (Appeals). The ground of appeal raised by the Revenue is thus dismissed.
7. In the result, the appeal filed b y the Revenue is dismissed.
Order pronounced in the open court on this 31st d a y o f J a n u a r y, 2012.
Sd/- Sd/-
(T.R.SOOD) (SUSHMA CHOWLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated 31 s t January, 2013
*Rati*
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.
Assistant Registrar, ITAT, Chandigarh