Principal Commissioner Ofincome Tax, Kolkata-3, Kolkata v. M/S. Britannia Industries Ltd

O-70 ITAT/290/2017IA No.GA/2/2017 (Old No.GA/2678/2017) IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE PRINCIPAL COMMISSIONER OFINCOME TAX, KOLKATA-3, KOLKATA -Versus- M/S. BRITANNIA INDUSTRIES LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 1[st] February, 2023 Appearance :Mr. Prithu Dudheria, Adv.…for the appellant. Mr. R. K. Murarka, Sr. Adv.Ms. Sutapa Roychowdhury, Adv.Ms. Aratrika Roy, Adv.…for the respondent. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ forbrevity) is directed against the order dated 4[th] November, 2016passed by the Income Tax Appellate Tribunal, “A” Bench, Kolkata(the Tribunal) in ITA No.907/Kol/2016 for the assessment year2010-11. The revenue has raised the following substantialquestions of law for consideration: (i) (ii) (iii) (iv) (v) (vi) We have heard Mr. Prithu Dudheria, learned standingcounsel for the appellant/revenue and Mr. R. K. Murarka,learned senior counsel assisted by Ms. Sutapa Roychowdhury andMs. Aratrika Roy, learned Advocates for therespondent/assessee. In the instant case, three issues have been raised.Firstly, as to whether the assumption of jurisdiction underSection 263 of the Act by the Commissioner of Income Tax wasjustified. The second aspect is with regard to disallowanceunder Section 14A of the Act and as to whether the manner inwhich the disallowance was made by accepting the plea of theassessee by the assessing office was justified and was itrevisable by the Commissioner under Section 263 of the Act.The third issue is with regard to the deduction under Section80IC.We have elaborately heard the learned Advocates for theparties and carefully perused the materials placed on record.On the first issue, the learned Tribunal has taken noteof the factual position and in paragraph 4.4 of the impugnedorder, the tribunal has taken note of the balance-sheet of theassessee and was convinced that the assessee had not availedany ECB as stated by the audit party which was followed by theCIT in its order passed under Section 263 of the Act.Therefore, the learned Tribunal held that the CIT had assumed jurisdiction based on incorrect assumption of facts.Furthermore, the Tribunal noted that CIT has not taken anysupport to appreciate the reply filed by the assessee and thecontention of the assessee together with supporting evidencewhich were part of the records and enclosed in the paper book.Therefore, on facts, the Tribunal was satisfied that theassumption of jurisdiction under Section 263 of the Act waserroneous. On examining the reasons given by the Tribunal, wefind that there was no error in the order passed by theTribunal which has been rendered after appreciating the factualposition which was available on record.Next aspect is with regard to the disallowance underSection 14A of the Act. The Tribunal rightly noted that theassessing officer accepted the calculation of disallowanceunder Section 14A of the Act as made by the assessee not onlyfor the assessment year under consideration but from theassessment years 2004-05 onwards. Furthermore, the Tribunalalso pointed out that when similar exercise was done by theCommissioner by invoking Section 263 of the Act for theassessment year 2008-09, the Tribunal had set aside the saidorder in ITA/390/Kol/2013 dated 2.3.2016. Thus, we find theconclusion arrived at by the Tribunal on this ground cannot befaulted. The third issue is with regard to the allegation ofexcess deduction under Section 80IC of the Act. On perusal ofthe impugned order, more particularly from paragraph 6.3 of theorder, we find that this issue has been considered not only forthe assessment year under consideration but from the assessmentyear 2006-07 and consistently the stand taken by the assesseehas been accepted. Thus, in absence of any distinct factors,the revenue cannot be permitted to take a contrary stand in theassessment year under consideration alone. Thus, theconclusion arrived at by the Tribunal cannot be faulted.For the above reasons, we find no ground to interferewith the order passed by the learned Tribunal. Accordingly,the appeal (ITAT/290/2017) is dismissed and the substantialquestions of law are answered against the revenue.Consequently, the connected application for stay (IANo.GA/2/2017) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)