The Commissioner Of Income Tax,Chennai v. M/S. Sicgil India Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 03.12.2018 CORAM :THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case Appeal No.561 of 2018 The Commissioner of Income Tax,Chennai. ...Appellant -vs- M/s. Sicgil India Ltd.,No.84 Anna SalaiDhun Building, 6[th] Floor,Chennai – 600 002. ... Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal'C' Bench, Chennai, dated 15.07.2016 in ITA No.1302/Mds/2011,for the Assessment year 2005-06.For Appellant:Mr.T.R.Senthil Kumar,Senior Standing CounselFor Respondent :Mr.A.S.SriramanJUDGMENT[Judgement of the Court was delivered by T.S.Sivagnanam, J.] This appeal, filed by Revenue under Section 260A of theIncome Tax Act, 1961, is directed against the order of theIncome Tax Appellate Tribunal 'C' Bench, Chennai, dated15.07.2016 in ITA No.1302/Mds/2011, for the Assessment year2005-06 against the order of Commissioner of Income Tax(Appeals) V, 121, Mahatma Gandhi Road, Chennai-34 for the ITANo. 84/2010-11 dt. 04/04/11 for the assessment year 2005-06against the order of Assistant Commissioner of IncomeTax,Company Circle VI(3) Chennai -34 for the PAN/GIRNo. /Si 4 dt.29/09/10 for the Assessment year 2005-06. 2.This appeal has been filed raising the followingsubstantial questions of law:"(i) Whether on the facts and circumstances ofthe case the Tribunal was right in deleting theproportionate 'other expenses' computed by theassessing officer at Rs.67,96,405/- by following https://hcservices.ecourts.gov.in/hcservices/ the apportionment adopted by the assessee betweencarbon dioxide produced in Goa unit and the totalcarbon dioxide produced by the assessee whilecomputing the deduction u/Sec. 80IB? (ii) Whether on the facts and in thecircumstances of the case the Tribunal was rightin not appreciating that the assessee itself hadadmitted that the other expenditures related togoa unit, head office as well as all the otherunits and perversely assuming that the otherexpenditure does not relate to goa unit and headoffice but relates to other units only. (iii) Whether Tribunal was right in deletingthe proportionate expenditure on sales tax andcentral excise at Rs.2,68,90,135/- by followingthe apportionment adopted by the assessee betweencarbon dioxide produced in Goa unit and the totalcarbon dioxide produced by the assessee whilecomputing the deduction u/Sec.80IB on the groundthat the said sales tax and excise duty does notform part of the total turnover? (iv)Whether on the facts and circumstances ofthe case the Tribunal was right in reversing theadjustment towards sales tax and excise dutycomponent from the P & L Account of the Goa unitwithout considering that the products of Goa unitswere sold in other states and suffered salestax/Excise duty and same was debited in the P & LAccount of the Company?” 3.We have heard Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel for the Revenue and Mr.A.S.Sriraman, learnedcounsel for the assessee and carefully considered the reasonsassigned by the Tribunal. 4.The Tribunal with regard to the first and secondsubstantial questions of law, held as follows: “The assessee has already apportioned the HeadOffice expenses among all other units includingthe Goa unit. Therefore, the attempt of theAssessing Officer to apportion the expenditure tothe Goa Unit in proportion of carbon dioxideproduction would definitely reduce the profit ofthe Goa Unit. Therefore, this Tribunal is of theconsidered opinion that the CIT(A) has rightlydeleted the addition made by the AssessingOfficer. This Tribunal do not find any reason tointerfere with the order of the CIT(A).Accordingly, the same is confirmed.” 5.The finding of the Tribunal with regard to substantialquestions of law 3 and 4 is as follows: 4.The Tribunal with regard to the first and secondsubstantial questions of law, held as follows: “The assessee has already apportioned the HeadOffice expenses among all other units includingthe Goa unit. Therefore, the attempt of theAssessing Officer to apportion the expenditure tothe Goa Unit in proportion of carbon dioxideproduction would definitely reduce the profit ofthe Goa Unit. Therefore, this Tribunal is of theconsidered opinion that the CIT(A) has rightlydeleted the addition made by the AssessingOfficer. This Tribunal do not find any reason tointerfere with the order of the CIT(A).Accordingly, the same is confirmed.” 5.The finding of the Tribunal with regard to substantialquestions of law 3 and 4 is as follows: “When one wing of the Central Governmentconsiders the cylinder transportation charges aspart of the sale consideration, this Tribunal isof the considered opinion that the same has to betreated as part of the sale consideration underthe Income-tax Act, 1961 also. In view of theorder of this Tribunal in I.T.A.No.1174/Mds/2015inassessee'sowncase,thecylindertransportation charges is eligible for deductionu/Sec. 80IB of the Act. This Tribunal do not findany reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.” 6.After hearing the learned counsels for the parties andperusing the materials placed on record and the findingsrendered by the Tribunal, we find that the entire issue revolvesaround the facts, which have been considered by the Tribunal andthe assessee's case was accepted. By way of this appeal, filedunder Section 260A of the Income-tax Act, 1961, we cannot re-appreciate the evidence. We find no question of law, much lessa substantial question of law arises for consideration. 7.Thus, for the above reasons, this appeal is dismissed. Nocosts. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar 1.Income Tax Appellate Tribunal 'C' Bench, Chennai. 2.The Commissioner of Income Tax, Chennai.3.The Commissioner of Income Tax(Appeals) V,121, Mahatma Gandhi Road, Chennai-34.4.The Assistant Commissioner of Income Tax Company Circle VI(3),Chennai -34. +1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.83218 https://hcservices.ecourts.gov.in/hcservices/