Income Tax Appellate Tribunal - Chandigarh
M/S Bio Veda Action Research Pvt. Ltd., ... vs Dcit, Parwanoo on 24 May, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ-"बी", च डीगढ़
I N T H E I NC OM E T A X A P PEL L A TE T RI B U N AL
D I VI SI O N B E N C H , ' B' , C H AND I G AR H
ी संजय गग , या यक सद य एवं ीमती अ नपण ू ा ग'ु ता, लेखा सद य
B E F OR E S HR I S A N J A Y GA R G, J U D I C I A L M E M B E R
AND
M s . A N N A P U R N A GU P T A , A C CO U N T A N T M E M B E R
आयकर अपील सं./ ITA No. 5 0 8 / C H D / 2 0 1 4
नधा रण वष / Assessment Year : 2009-10
M/s Bio Veda Action बनाम The Dy. Commissioner of
Research Pvt. Ltd, Income Tax , Circle,
Dharamkot, Paonta Sahib, Parwanoo
Distt.Sirmour (HP)
थायी लेखा सं./PAN NO: AABCB7964J
Appeal against the order of CIT(A), Shimla Dated 27.2.2014
आयकर अपील सं./ ITA No. 5 8 8 / C H D / 2 0 1 4
नधा रण वष / Assessment Year : 2009-10
The Dy. Commissioner of बनाम M/s Bio Veda Action
Income Tax , Circle, Research Pvt. Ltd,
Parwanoo Dharamkot, Paonta Sahib,
Distt.Sirmour (HP
थायी लेखा सं./PAN NO: AABCB7964J
Appeal against the order of CIT(A), Shimla Dated 27.2.2014
आयकर अपील सं./ ITA No. 4 3 2 / C H D / 2 0 1 5
नधा रण वष / Assessment Year : 2010-11
M/s Bio Veda Action बनाम The Dy. Commissioner of
Research Pvt. Ltd, Income Tax , Circle,
Dharamkot, Paonta Sahib, Parwanoo
Distt.Sirmour (HP)
थायी लेखा सं./PAN NO: AABCB7964J
Appeal against the order of CIT(A), Shimla Dated 12.2.2015
नधा रती क ओर से/Assessee by : Sh. Sunil Arora, CA &
Sh. Tej Mohan Singh, Adv.
राज व क ओर से/ Revenue by : Sh. Ashish Gupta, CIT DR
ITA Nos. 508-588-c-14 & 432-c-15
Bio Veda Action Research Pvt. Ltd., Sirmour
2
सन
ु वाई क तार!ख/Date of Hearing : 28.03.2019
उदघोषणा क तार!ख/Date of Pronouncement : 24.05.2019
आदे श/Order
Per Sanjay Garg, Judicial Member:
The captioned cross appeals for assessment year 2009-10 by the Assessee and Revenue and appeal for assessment year 2010-11 by the assessee are arising out of the separate orders of the Ld. Commissioner of Income Tax (Appeals), Shimla [hereinafter referred to as' CIT(A)'].
2. Since common issues are involved in these appeals, they have been heard together and are being disposed of by this common order.
3. First we shall take up the appeal of the assessee for the assessment year 2009-10.
ITA No.508/Chd/2014 (A.Y.2009-10)4. The assessee in this appeal has taken as many as 17 revised grounds of appeal, which reads as under:-
1. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in affirming the action of Id. A.O. allowing deduction u/s 80-IC of the Act 30% as against the appellant's claim of 100% deduction considering the substantial expansion undertaken by it which is highly injudicious, unwarranted, against the facts of the case and bad at law.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 3
2. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in upholding the disallowance of Rs. 2,54,40,369/- made by the Id. A.O. alleging that the payments made to beauty advisors are covered under the provisions of section 194 H of the Act and as the appellant has not deducted tax at source of these payment they are liable to be disallowed u/s 40(a)(ia) of the Act which is highly injudicious, unwarranted, against the facts of the case and bad in law.
3. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in upholding the action of the Id. A.O. disallowing the expenses of Rs. 1,96,33,577/- incurred on account of professional charges paid to the foreign parties for various services availed by the assessee relating to its business which is highly injudicious, unwarranted, against the facts of the case and bad at law.
4. Under the facts and circumstances of the case, the disallowance of legal & professional charges amounting to Rs. 40,19,000/- made by the Id. A.O. and affirmed by the Id. CIT(A) is grossly injudicious, unwarranted, against the facts of the case and bad at law.
5. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in upholding the action of Id. A.O. disallowing the consultancy charges of Rs. 8,40,000/- which is highly injudicious, unwarranted, against the facts of the case and bad at law.
6. Under the facts and circumstances of the case, the disallowance of interior designing charges of Rs. 1,12,360/- made by the Ld. Assessing officer and affirmed by the Ld. CIT(A) is grossly injudicious, unwarranted, against the facts of the case and bad in law.
7. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in affirming the action of Id. A.O. disallowing the following Repair & Maintenance expenses:
Particulars Amt (₹) Repair & Maintenance expenses pertaining to:-
i. Paonta office 74,15,385/-
(paid to M/s Kalsi
ITA Nos. 508-588-c-14 & 432-c-15
Bio Veda Action Research Pvt. Ltd., Sirmour
4
Brothers)
ii. Paonta Office 61,49,798/-
iii. Noida Office 27,71,590/-
iv. Jangpura office 11,15,995/-
8. Without prejudice to the above, the Id. A.O. as well as Id. CIT(A) has grossly erred in arriving to the conclusion that even depreciation is not allowable on the aforesaid Repairs & Maintenance expenses which is highly injudicious, unwarranted, against the facts of the case and bad in law.
9. Under the facts and circumstances of the case, the disallowance of House - keeping expenses of Noida office amounting to ₹ 99,756/- made by; the Assessing officer Assessing officer & affirmed by the Ld. CIT(A) is grossly injudicious, unwarranted, against the facts of the case and bad in law.
10. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in affirming the action of Id, A.O. that software development and its implementation expenses amounting to Rs. 35,15,766/- & 1,70,000/-respectively incurred by the appellant is capital in nature which is highly injudicious, unwarranted, against the facts of the case and bad at law.
11. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in upholding the disallowance of Rs. 27,38,016/- made by the Id. A.O. under the provisions of section 14A of the Act read with rule 8D of the Income Tax Rules 1962 which is highly injudicious, unwarranted, against the facts of the case and bad at law.
12. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in upholding the addition of Rs. 4,47,1977- u7s 41(1) of the Act made by the Id. A.O. on account of non-moving sundry creditors which is highly injudicious, unwarranted, against the facts of the case and bad at law.
13. Under the facts and circumstances of the case the Ld. CIT(A) has grossly erred in confirming the action of the Ld. Assessing officer disallowing bank guarantee charges amounting to ₹ 4,06,512/- alleging the same to be prepaid expense which is grossly injudicious, unwarranted, against the facts of the case and bad in law
14. Under the facts and circumstances of the case, the Id. CIT(A) has ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 5 grossly erred in affirming the disallowances of electricity expenses of Rs. 94,409/- & Rs. 42,630/- relating to office premises at Noida & Jangpura respectively made by the Id. A,O. which is highly injudicious, unwarranted, against the facts of the case and bad at law.
15. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in affirming the disallowances made by the Id. A.O. on account of rent & security expenses of Rs. 19,600/- & Rs. 1,08,390/- respectively relating to office premises at Noida which is highly injudicious, unwarranted, against the facts of the case and bad at law.
16. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in affirming the disallowance of expense incurred for purchase of computers of Rs. 3,96,717/- which is highly injudicious, unwarranted, against the facts of the case and bad at law.
17. The appellant hereby prays for leave to add, amend, alter or withdraw any grounds of appeal.
5. Ground. No.1 : The main issue raised vide ground No. 1 is as to whether the assessee is entitled to deduction at the rate of 100% of the eligible profits u/s 80IC of the Income-tax Act, 1961 (in short 'the Act') for another five years in the case of substantial expansion of unit. In other words, whether the year in which the substantial expansion is carried out is to be taken as initial assessment year for the purpose of grant of deduction u/s 80IC of the Act.
6. D uring the co urs e of hearin g be fo re us, the Ld. C ouns el fo r th e ass ess ee, at the outs et its elf, po inted out that the H on'b le A pex Cou rt h as decided th is iss ue in favour o f th e ass ess ee in b unch of cas es w ith the lead cas e bein g P r. CIT, S himla Vs. M/s A arh am S oftronics in Civil N o. 1784 of 20 19 dated 20 .2.20 19.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 6
7. Ld. DR fairly con ceded th at the is sue w as s ettled in fav our o f the ass ess ee by the abo ve decis ion of the Apex co urt.
8. We ha ve gon e thr ough the o rder o f th e H on'ble A pex Court in the case of M /s Aarha m S oftron ics ( su pra) and fin d th at the H on'ble A pex Co urt dealt w ith the entire s cheme o f th e Act relating to the r elevant s ection i .e. s ection 80I C of the A ct, and arr ived at the conclus ion that t he definitio n o f the i nitial as s ess ment y ear contained in claus e (v) o f s ub- s ection(8) o f s ection 80I C o f the A ct can le ad to a s itu ation w here th ere can be mo re than one initial ass es smen t year w ithin the s aid p erio d o f ten ye ar s. The relevant fin din g o f the H on'ble Apex Cour t at par a 19 of its ord er is as u nder :
"19. Having examined the scheme in the aforesaid manner, we arrive at the conclusion that the definition of 'initial assessment year' contained in clause (v) of sub-section (8) of Section 80-IC can lead to a situation where there can be more than one "initial assessment year" within the said period of 10 years. As per sub- section (6), cap is on the 10 assessment years. It is not on quantum. We have also to keep in mind the purpose for which Section 80-IC was enacted. The purpose was to establish the business of the nature specified in the said provision in the specified States. This provision was, thus, aimed at encouraging the undertakings or enterprises to establish and set up such units in the aforesaid States to make them industrially advanced States as well. Undoubtedly, these are difficult States as most of these States fall in hilly areas. Therefore, cost of production and transportation may also go up.
20. When we keep in mind these objectives for which Section 80-IC was enacted, an irresistible conclusion would be to grant 100% deduction of the profits and gains even from the year when there is substantial expansion in the existing unit. After all, this substantial expansion involves great deal of investment which has ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 7 to be, at least 50% in the plant and machinery, of the book value thereof before taking depreciation in any year. With an expansion of such a nature not only there would be increase in production but generation of more employment as well, which would benefit the local populace. It is for this reason, carrying out substantial expansion by itself is treated as 'initial assessment year'. It would mean that even when an old unit completes substantial expansion, such a unit also becomes entitled to avail the benefit of Section 80- IC. If that is the purpose of the legislature, we see no reason as to why 100% deduction of the profits and gains be not allowed to even those units who had availed this deduction on setting up of a new unit and have now invested huge amount with substantial expansion of those units."
9. The H on'ble A pex Co urt thereaft er conclu ded tha t a new ly set u p und ertak ing or enter prise in the S tate o f H im achal P radesh w ould b e en titled to ded uction @ 10 0% o f the A ct its profits for the firs t five ye ar s an d even th ereafter in the cas e of su bs tantial expans io n is car ried out by it, then th e as s ess ment year relevan t to the previo us y ear in w hich subs tantial expans io n is undertaken b eco ming the initial as s ess ment year. That in an y cas e, th e p eriod of dedu ction u/s 8 0IC o f the Act w ould not exceed 10 year s. The con clus ion of the H on'ble Apex Cour t at par a 24 of its ord er is as u nder :
"24. The aforesaid discussion leads us to the following conclusions:
(a) Judgment dated 20th August, 2018 in Classic BindingIndustries case omitted to take note of the definition 'initial assessment year' contained in Section 80-IC itself and instead based its conclusion on the definition contained in Section 80-IB, which does not apply in these cases. The definitions of 'initial assessment year' in the two sections, viz. Sections 80-IB and 80-IC are materially different. The definition of 'initial assessment year' under Section 80-IC has made all the difference.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 8 Therefore, we are of the opinion that the aforesaid judgment does not lay down the correct law.
(b) An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of HimachalPradesh of the nature mentioned in clause (ii) of sub- section (2) of Section 80-IC, would be entitled to deduction at the rate of 100% of the profits and gains for five assessment years commencing with the 'initial assessment year'. For the next five years, the admissible deduction would be 25% (or 30% where the assessee is a company) of the profits and gains.
(c) However, in case substantial expansion is carried out as defined in clause (ix) of sub-section (8) of Section 80-IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become 'initial assessment year', and from that assessment year the assessee shall been entitled to 100% deductions of the profits and gains.
(d) Such deduction, however, would be for a total period of 10 years, as provided in sub-section (6). For example, if the expansion is carried out immediately, on the completion of first five years, the assessee would be entitled to 100% deduction again for the next fiveyears. On the other hand, if substantial expansion is undertaken, say, in 8th year by an assessee such an assessee would be entitled to 100% deduction for the first five years, deduction @ 25% of the profits and gains for the next two years and @ 100% again from 8th year as this year becomes 'initial assessment year' once again However, this 100% deduction would be for remaining three years, i.e., 8th, 9th and 10th assessment years.
25. In view of the aforesaid, we affirm the judgment of the High Court on this issue and dismiss all these appeals of the Revenue. Likewise, appeals filed by the assessees are hereby allowed."
1 0. In view of the abov e, it is n ow settled law that even a new u nder takin g, wh ich has claimed ded u ction o f its eligible pro fits @ 1 00% thereo f for t he firs t five year s , is en titled to clai m d eduction @ 1 00% o f its pr ofi ts ther eafter on accoun t o f s ub stantial expan sion ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 9 u nder taken by it. Ho wever, s uch dedu ction w ould be fo r a total per iod o f 10 years as provided in s ub- section (6) to s ection 80IC of the A ct.
1 1. S ince in the pre sent cas e the fac t that the as sessee had u nder taken su bs tantial expan sion in the i mpu gned year is n ot d is puted , the assess ee, w e h old , is entitled to clai m deduction @ 1 00% o f its eligib le pro fits even i f it has already claimed d educ tion o f its profits at the s aid rate for firs t five years , in view of the law laid dow n by the A pex court in this regard i n its d ecis ion in the cas e o f M/s A arham So ftr onics (s upra).
This groun d o f the appeal o f th e ass ess ee, therefo r e, s tand allow ed .
12. Ground No. 2 to 16 : These grounds, as reproduced above, are relating to various disallowances of expenditure made by the Assessing officer while computing the income of the assessee.
13. The Ld. Counsel for the assessee has submitted that the aforesaid various disallowance made by the Assessing officer, even if confirmed, would have the effect of enhancement of income of the assessee, however, on such enhanced income, the assessee would be entitled to deduction @ 100% in the light of the decision of the Hon'ble Supreme Court in 'Pr. CIT Vs. M/s Aarham Softronics' in ITA No. 1784 of 2019 vide order dated 20.02.2019. He, therefore, has submitted that if the ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 10 issue raised ground No.1 is decided in favour of the assessee, then, the other grounds of appeal will become infructuous as the disallowance made by the Assessing officer on the expenditure including the specific disallowance made under the provisions of sections 32, 40(a)(ia) 43B etc., would result in enhancement of the profits of the eligible business.
However, in the light of the circular of the CBDT bearing No. 37/2016 dated 2.11.2016 the assessee would be entitled to deduction@ 100% on such enhanced income. He, therefore, has submitted that the ground Nos.
2 to 16 of the appeal be dismissed having become infructuous in the light of the CBDT Circular No. 37/2016 dated 2.11.2016.
14. In view of the above submissions, ground Nos. 2 to 16 of the appeal since having become infructuous are accordingly dismissed.
However, the Assessing officer is directed to compute the income of the assessee in view of the above findings given on issue No.1 and in the light of the Circular of CBDT No. 37/2016.
15. Ground No.17 is general in nature and does not require any separate adjudication.
In view of our findings given above, the appeal of the assessee is treated as allowed.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 11 ITA No.588/Chd/2014
16. Now coming to the Revenue's appeal for assessment year 2009-10.
17. The Revenue in this appeal has raised as many as 12 ground of appeal, which reads as under:-
1. On the facts and in the circumstances the Ld. CIT (AJ) has erred In allowing the disallowance of Rs.8,98,522/- under the head rent, rate and taxes.
2. On the facts and in the circumstances, the Ld. CIT(A) has erred in allowing the disallowance of Rs.4,75,000/- made on account of membership and subscription.
3. On the facts and in the circumstances, the Ld. CIT(A) has erred in restricting the disallowance of security expenses amounting to Rs.5,28,839/- against the total disallowance of Rs.9,32,783/-.
4. On the facts and in the circumstances, the Ld CIT(A) has erred in restricting the disallowance of rent at Rs.4,74,000/- as against disallowance of Rs.4,93,600/-.
5. On the facts and in the circumstances, the Ld CIT(A) has erred in deleting the disallowance of Rs.10,63,353/- made under the head misc. expenses.
6. On the facts and in the circumstances, the Ld CIT(A) has erred in restricting the addition made on account of non-moving sundry creditors to the extent of Rs. 4,47,197/- against Rs. 11,30,651/-.
7. On the facts and in the circumstances, the Ld CIT(A) has erred in restricting the disallowance of Rs.7,84,639/- to Rs.3,74,099/- made by the A.O. on account of electricity and water charges by treating them to be personal in nature.
8. On the facts and in the circumstances, the Ld. CIT(A) has erred in deleting the addition of Rs.16,26,198/- under the head Repair and maintenance.
9. On the facts and in the circumstances, the Ld. CIT(A) has erred in giving relief against the disallowance made under the head Director's Travelling.
10. On the facts and in the circumstances, the Ld CIT(A) has ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 12 erred in deleting the addition of Rs. 14,02,140/- on account of Legal & Professional Charges.
11. It is prayed that the order of the Ld. CIT(A) be set-aside and that of the A.O. restored .
12. The Appellant craves leave to add any other ground of appeal which may arise at the time of hearing."
18. A perusal of the above grounds of appeal reveal that the Revenue has agitated the action of the CIT(A) in deleting the certain additions made by the Assessing officer into the income of the assessee.
19. At the outset, Ld. Counsel for the assessee has submitted that even if the action of the CIT(A) is set aside in deleting the additions made by the Assessing officer, even then, the resultant effect will be of enhancement of the business income of assessee which otherwise will be eligible for deduction @ 100% on account of substantial expansion.
20. The Ld. DR has also agreed to the said proposition submitted by the assessee. In view of the findings given above while deciding ground No.1 of the assessee's appeal, since the assessee for the year under consideration is eligible for deduction @ 100% of the income of the unit, hence, any disallowance made or deleted will have the effect either of enhancement or reduction into the business income of the assessee for which the assessee is otherwise entitled to deduction @ 100% u/s 80IC of the Act. In view of our findings given above while ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 13 adjudicating the ground No.1 of the assessee's appeal, there will be no tax effect so far as the appeal of the Revenue is concerned.
21. In view of this, the grounds raised in this appeal by the Revenue have become infructuous and have been rendered academic in nature to be adjudicated at appropriate time, if need be.
The appeal of the Revenue is therefore, dismissed.
ITA No. 432/Chd/2015 (A.Y. 2010-11)22. Now coming to the assessee's appeal for assessment year 2010-11.
wherein, following grounds have been raised.
1. That the Ld. Commissioner of Income Tax(Appeals) has erred in law as well as on facts in disallowing the deduction u/s 80IC of the Act at 100% as the assessee has admittedly carried out substantial expansion which makes the unit eligible for deduction @ 100% and not 30% of profits as upheld and as such non allowance of deduction is illegal, arbitrary and unjustified.
2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in law and facts in upholding the addition of Rs.51,000/- made under the head 'rates and taxes' for alleged unvouched payments and without bills which is arbitrary and unjustified.
3. That the Ld. Commissioner of Income Tax(Appeals) has further erred in sustaining an addition of Rs.3,04,044/- being 50% out of total addition of Rs.6,08,087/- made under the head "Security Expenses" at Friends Colony which were disallowed by the Assessing Officer in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 14
4. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding an addition of Rs.3,26,136/- made under the head "Security Expenses" which were disallowed by the Assessing Officer in respect of Jungpura premises in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
5. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding an addition of Rs.2,16,000/- made under the head "Rent" which were disallowed by the Assessing Officer in respect of Jungpura premises in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
6. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs. 27,13,501/- applying the provisions of Section 40A(3) treating reimbursement of expenses incurred by M/s Prem Jewellers on behalf of the assessee to be actual expenditure incurred which is arbitrary and unjustified.
7. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the disallowance of l/10th of the telephone and telex expenditure amounting to Rs.65.579''- incurred in respect of the Managing Director treating the same to be personal in nature which is not disallowable in case of a company and as such the addition sustained is arbitrary and unjustified.
8. That the Ld. Commissioner of Income Tax(Appeals) has further erred in sustaining an addition of Rs.1,93,005/- being 50% out of total addition of Rs.3,86,011/- made under the head "Electricity and Water Expenses" at Friends Colony which were disallowed by the Assessing Officer in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
9. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding an addition of Rs.54,355/- made under the head "Electricity and Water Expenses" which were disallowed by the Assessing Officer in respect of Jungpura premises in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 15
10. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs.21,54,994/- treating Sales Tax Expenses to be in the nature of penalty in utter disregard of the explanations rendered which is illegal, arbitrary and unjustified.
11. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs.3,13,43,475/- made on account of disallowance of civil work expenses, repairs of Noida office, purchase of steel and cement which is arbitrary and unjustified.
12. That the Ld. CIT(A) has further erred in holding that no depreciation is allowable on such expenditure which is arbitrary and unjustified.
13. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the disallowance of Rs.71,83.360/- paid as legal and professional charges in utter disregard of the plantations rendered and simply relying on the order of the previous year which is arbitrary and unjustified.
14. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs.1979,474/- whereby the assessing officer had applied the provisions of Section 14A read with rule 8D of the which are not attracted and as such the addition upheld is arbitrary and unjustified.
15. That the Ld. Commissioner of Income Tax (Appeals) has further erred in law as well as on facts in upholding the disallowance of interest of Rs.8,24,597/- applying the provisions of Section 36(l)(iii) on alleged interest free advances which is arbitrary and unjustified.
16. That the Ld. Commissioner of Income Tax(Appeals) has erred in not appreciating the business exigencies and commercial expediency in respect of the afore mentioned advance in the correct perspective and as such the order passed is arbitrary and unjustified.
17. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the disallowance of Rs.1,44,00,455/- in respect of payments made to beauty advisors treating the same to be covered under the ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 16 provisions of Section 194 C and as such non-deduction of tax attracted the provisions of section 40a(ia) which is arbitrary and unjustified.
18. That in any case, the provisions of Section 40a(ia) are attracted only in respect of amounts payable and not to the amounts actually having been paid during the year and as such the disallowance made is illegal, arbitrary and unjustified.
19. That all the additions made are admittedly eligible for deduction u/s 80IC being related to the eligible business of the assessee as has been allowed by the assessing officer himself while computing the income at page 22 of the assessment order and as such the additions upheld giving only 30% deduction even after substantial expansion is illegal, arbitrary and unjustified.
20. That all the additions made and upheld are based only on suspicion, conjectures and surmises which cannot form the basis of framing assessments under the Act.
21. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the charging of interest under Section 234 and withdrawal of interest under section 244A of the Act which illegal, arbitrary and unjustified.
22. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary opposed to law and facts of the case and is, thus, untenable.
23. All the grounds taken by the assessee in the aforesaid assessment year are almost identical to that have been taken for assessment year 2009-10.
24. The ground No.1 raised by the assessee in the appeal is regarding entitlement of assessee of deduction @ 100% u/s 80IC of the Act as has been raised in ground No.1 of the assessee's appeal for assessment year ITA Nos. 508-588-c-14 & 432-c-15 Bio Veda Action Research Pvt. Ltd., Sirmour 17 2009-10. In view of our findings given above while deciding ground No.1 of the assessee's appeal for assessment year 2009-10, this issue is decided in favour of the assessee.
25. In view of our findings given in respect of ground No.1, the other grounds bearing Nos. 2 to 22 raised by the assessee regarding disallowance of various expenditure would go on to enhancement of the income of the assessee, which otherwise, is eligible for deduction @ 100% u/s 80IC of the Act.
The Ld. Counsel for the assessee, therefore, has submitted that he does not press ground Nos. 2 to 22 of the appeal, as the same have become infructuous. He has further submitted that the Assessing officer may be directed to compute the income of the assessee in the light of the Circular of the circular No. 37/2016 dated 2.11.2016. We order accordingly.
In the result, the appeal of the assessee is treated as allowed.
Order pronounced in the Open Court on 24.05.2019.
Sd/- Sd/-
(अ नपण
ू ा ग'ु ता / ANNAPURNA GUPTA) (संजय गग / SANJAY GARG)
लेखा सद य/ Accountant Member या यक सद य/ Judicial Member
,दनांक/Date: 24 05.2019
"आर.के."
ITA Nos. 508-588-c-14 & 432-c-15
Bio Veda Action Research Pvt. Ltd., Sirmour
18
आदे श क ' त(ल)प अ*े)षत/ Copy of the order forwarded to :
1. अपीलाथ+/ The Appellant
2. ',यथ+/ The Respondent
3. आयकर आयु-त/ CIT
4. आयकर आयु-त (अपील)/ The CIT(A)
5. )वभागीय ' त न0ध, आयकर अपील!य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar