On The Facts And In The Circumstances Of The Caseand In Law, Whether The Hon’ble Itat Has Perverselyerred In Law By Applying The Principle Ofconsistency, By Cit v. C.i.t. In 193 Itr 321 (Sc) Which Is Notapplicable In The Instant Case, Since Tpproceedings Were Never Made In Earlier A.y.s 2008-09 To 2013-14?

OD- 8 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION ORIGINAL SIDE ITAT/93/2023IA NO.GA/2/2023 PRINCIPAL COMMISSIONER OF INCOME TAX –2, KOLKATA-Versus-M/S. DEEPAK INDUSTRIES LTD. BEFORE: The Hon’ble T.S. SIVAGNANAM, CHIEF JUSTICE -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 12[th ]May, 2023. Appearance :Mr.Soumen Bhattacharjee, Adv...for the appellant. Mr. J.P. Khaitan, Sr. Adv.Mr.A.P. Agarwalla, Adv.…for the respondent. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act (the ‘Act’ in brevity) isdirected against the order dated 23[rd] June, 2022 passed by theIncome Tax Appellate Tribunal, C - Bench, Kolkata (the ‘Tribunal’)in ITA No.263 & 264/Kol/2020 and CO No.4/Kol/2021 for theassessment year 2015-16. This appeal is admitted on the following substantialquestions of law: “(a) On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred inlaw in relying on the order u/s 143(3) of theIncome Tax Act, 1961 for the A.Y. 2008-09 to 2013-14 and ignoring the fact that the case was notreferred to TPO for Transfer Pricing proceeding inA.Y.s 2008-09 to 2013-14? (b) On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has perverselyerred in law by applying the principle ofconsistency, by citing case law of RadhaswamiSastang Vs. C.I.T. in 193 ITR 321 (SC) which is notapplicable in the instant case, since TPproceedings were never made in earlier A.Y.s 2008-09 to 2013-14? (c) On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred inlaw as well as in facts by violating rule 10B & 10Cof Income Tax Rule, 1962 by not undertaking adequate comparability’ analysis and ‘reliable andaccurate adjustments’ in deleting the adjustmentsmade by the TPO? (d) On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred inlaw as well as in facts by deleting the adjustmentserroneously without taking into consideration theextraordinary difference in operating profitability (e) (f) (g) between eligible and non-eligible unit of theassessee for determining the Arm’s Length Price?On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred inlaw as it failed to appreciate that, bytransferring the more profitability of the assesseeto eligible unit, the assessee is taking advantageto claim more deduction under section 80IC of theIncome Tax.On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred inlaw as it failed to appreciate, in disallowing theclaim of balance additional depreciation ofRs.60,66,115/- u/s 32(1)(iia), that the amendmentregarding balance additional depreciation wasbrought into Finance Act, 2015 which has come intoeffect from 01.04.2016 and was prospective innature?On the facts and in the circumstances of the caseand in law, whether the Hon’ble ITAT has erred indismissing the appeal of revenue by relying uponthe decision of the coordinate bench of the ITAT,Kolkata in the case of M/s. Birla Corporation Ltd.Vs. DCIT which predates amendment brought into theSection 32(1)(iia) of the Income Tax Act, 1961 inthe Finance Act, 2015? We have heard Mr. Soumen Bhattacharjee, learned standingcounsel appearing for the appellant and Mr. J.P. Khaitan, learnedsenior counsel appearing for the respondent. We have heard Mr. Soumen Bhattacharjee, learned standingcounsel appearing for the appellant and Mr. J.P. Khaitan, learnedsenior counsel appearing for the respondent. Though seven substantial questions of law have been raised,they can be categorised under two categories. The substantialquestions of law (a) to (e) are all pertaining to the claim ofdeduction under Section 80IC of the Act. The substantial questionsof law (f) and (g) are pertaining to the claim for additionaldepreciation. So far as the claim for deduction under Section 80ICis concerned, we find the issue to be academic as rightly pointedout by the learned senior counsel for the respondent/assessee forwhich purpose we have perused the assessment order dated 25[th]January, 2018 passed under Section 143(3) of the Act and in thecomputation the assessing officer has assessed the total income ofthe assessee to the following manner : Add : Inadmissible Balance Additional Depr Rs.60,66,115[Para –4]Foreign exchange loss [Para – 5] Rs.1,65,65,143 : Rs.2,26,31,258Total : Rs.(1,35,74,986)Less : Deduction u/s 80IC [Para 3] Rs.2,95,97,700 : Rs______Nil Tax on above @30% Book Profit Tax on above @18.5% As could be seen from the above computation of total income,the deduction under Section 80IC is nil. Therefore, the issue ispurely academic and, accordingly, the substantial questions of law(a) to (e) are left open as it does not arise for consideration inthe case on hand. So far as the substantial questions of law (f)and (g) are concerned with regard to the additional depreciation,it is not in dispute that the said issues squarely covered by thedecision of the Principal Commissioner of Income Tax, Central – 1,Kolkata Vs. Ramkrishna Forging Ltd., reported in 2022(7) TMI 1312(Cal). In the said decision the Court took into consideration thedecision in the case of Dy. CIT vs. Brakes India Ltd. [I.T. AppealNo.1069 (Mds) of 2010 dated 6[th] January, 2012 which was followed inthe case of Commissioner of Income Tax, Chennai Vs. Aztec Auto (P)Ltd., reported in [2020] 119 taxmann.com 215 (Madras).In the light of the above, the substantial questions of law(f) and (g) are answered against the revenue. The appeal standsdisposed of. The connected application stands closed. (T.S. SIVAGNANAM) CHIEF JUSTICE (HIRANMAY BHATTACHARYYA, J.) S.Das/