Pr. Commissioner Of Income Tax -15 v. M/S. Strides Arcolab Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. INCOME TAX APPEAL NO. 348 OF 2017 Pr. Commissioner of Income Tax -15..Appellant Versus M/s. Strides Arcolab Ltd ..Respondent ................... Mr. Suresh Kumar for the Appellant Mr. Suresh Kumar for the Appellant Mr. Nitesh Joshi a/w Mr. Atul Jasani for the RespondentMr. Nitesh Joshi a/w Mr. Atul Jasani for the Respondent ................... CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ. DATE : MARCH 15, 2019. P.C.: 1.This appeal is filed by the Revenue challenging thejudgment of the Income Tax Appellate Tribunal raising following questions for our consideration:- (i) Whether on the facts and in the circumstances of the case andin law, the Tribunal was correct in directing the AO to grant thebenefit of deduction u/S. 35(2AB) when the approval for theR&D activities were given in the subsequent assessment yearsand not for the assessment year under consideration?in law, the Tribunal was correct in directing the AO to grant thebenefit of deduction u/S. 35(2AB) when the approval for theR&D activities were given in the subsequent assessment yearsand not for the assessment year under consideration? (ii) Whether on the facts and in the circumstances of the case andin law, the Tribunal was correct in directing the AO to grant thededuction u/S. 80HHC(4C) when SEZ unit to which assesseehas effected sales viz. Mission Pharma Logistics Pvt Ltd is notan eligible unit under Section 10A, as it is not engaged in anyin law, the Tribunal was correct in directing the AO to grant thededuction u/S. 80HHC(4C) when SEZ unit to which assesseehas effected sales viz. Mission Pharma Logistics Pvt Ltd is notan eligible unit under Section 10A, as it is not engaged in any manufacturing activity but is doing only repacking, relabelingand kit packing? 2.Learned counsel for the Revenue fairly pointed out thatQuestion No. (i) was examined by this Court in case of thisvery assessee in Income Tax Appeal No. 1674 of 2016 and rejected the appeal by making following observations:- "2. Question no. (i) relates to the Revenue's objection to the assessee'sclaim of deduction under Section 35(2AB) of the Income Tax Act, 1961 ("theAct" for short) primarily on the ground that the approval for the research facilityestablished by the assessee was granted by the competent authoritysubsequently. We notice that several High Courts have held that such researchand development activity once approved by the competent authority, theapproval would relate back to the date of application. Reference in this respectcan be made to the decision of the Division Bench of Gujarat High Court in thecase of CIT Vs. Claris Lifesciences Ltd. (2008) 174 Taxman 113 and thedecision of the Delhi High Court in case of CIT New Delhi Vs.Sandan Vikas(India) Ltd. 335 ITR 117. We are informed that thedecision of Delhi High Courtin case of Sandan Vikas (India) Ltd. (Supra) was carried in appeal before theSupreme Court and the SLP came to be dismissed by an order dated 09[th]January, 2012. This question is therefore not entertained." 3.So far as Question No. (ii) is concerned, the issuepertains to the assessee's claim of deduction under Section80HHC(4C) of the Income Tax Act, 1961 ("the Act" for short). 4.The assessee is a manufacturer whose manufacturingunit is situated outside Special Economic Zone ("SEZ" forshort). The assessee made sales to a unit situated in SEZ.The only ground on which the Assessing OfÏcer denied the deduction was that the unit situated in SEZ area was notentitled to exemption under Section 10A of the Act. TheCIT(A) and the Tribunal held that this was factually incorrect.In fact, the Tribunal recorded that the Assessing OfÏcer hasnot given reasons for coming to such a conclusion. Theentire issue is thus based on facts. The CIT(A) and theTribunal concurrently held that the purchaser unit wasentitled to exemption under Section 10A of the Act. 4.The assessee is a manufacturer whose manufacturingunit is situated outside Special Economic Zone ("SEZ" forshort). The assessee made sales to a unit situated in SEZ.The only ground on which the Assessing OfÏcer denied the deduction was that the unit situated in SEZ area was notentitled to exemption under Section 10A of the Act. TheCIT(A) and the Tribunal held that this was factually incorrect.In fact, the Tribunal recorded that the Assessing OfÏcer hasnot given reasons for coming to such a conclusion. Theentire issue is thus based on facts. The CIT(A) and theTribunal concurrently held that the purchaser unit wasentitled to exemption under Section 10A of the Act. 5.In view of above, the appeal is dismissed. [ SARANG V. KOTWAL, J. ] [ AKIL KURESHI, J ]