The Commissionerof Incometax-Iii v. Tony Electronics Limitedrespondentthrough:mr. Satyen Sethi, Advocate

*IN THE HIGH COURT OF DELHI AT NEW DELHI26 & 30 +ITA 633/2010 THE COMMISSIONEROF INCOMETAX-III.....AppellantThrough:Mr. RohitMadan,SeniorStandingCounsel. versus TONY ELECTRONICS LIMITEDRespondentThrough:Mr. Satyen Sethi, Advocate. +ITA 1053/2010THE COMMISSIONER OF INCOME TAX-IIIAppellantThrough:Mr. Rohit Madan, Senior Standing Counsel. versus TONY ELECTRONICS LIMITEDRespondentThrough:Mr. Satyen Sethi, Advocate.CORAM:DR. JUSTICE S.MURALIDHARMR. JUSTICE VIBHU BAKHRU ORDER%05.10.20151. ITANo.633/2010is an appealbytheRevenueagainstthe orderdated 17^July 2009, passed by the Income Tax AppellateTribunal (ITAT) in ITANo.48/Del/2002forthe AssessmentYear(AY) 1996-97. ITA Nos.633&1053/2010Page1of4 Signature Not VerifiedDigitally SignedBy:AMULYA 2. ITA No.1053/2010is an appeal by the Revenueagainstthe order dated 17'*^ July, 2009, passedby the ITAT in ITA No.4220/Del/2001for the AY1996-97. 3. In boththe appeals,the Revenueseeksto urgethe followingquestionsfor consideration by the Court: (a) Whetheronthe facts and inthe circumstancesofthe case, the Ld.ITAT erred in law and on meritsin allowingdeductionunder Section80HH of the IncomeTax Act, 1961 (Rs.63,97,717)and under Section801 of the IncomeTax Act, 1961 (Rs.79,97,146)in respectof profitofNamoli Unit and deductionunder Section80IA of the Income TaxAct, 1961 (Rs.8,22,387) in respect of Malanpur Unit? (b) Whether on the facts and in the circumstances of the case, the Ld.ITAT erred in law and on merits in deleting the disallowance of lossin respect of Unit-I amounting to Rs.6,40,398? (c) Whether on the facts and in the circumstances of the case, the Ld.ITAT erred in law and on merits in reducing the disallowance of lossof Unit-II by Rs. 1,22,37,122? (d) Whether on the facts and in the circumstances of the case, the Ld.ITAT erred in law and on merits in allowing depreciation ofRs.2,82,532 in respect of Namoli Unit? 4. Question(a) is admittedlycoveredin favour of the Assesseeand againstthe Revenue the decisionof this Court in CIT v. ElectronicsLtd.by Tony(2015)375ITR 431 (Del). Consequentlythe Courtis not inclinedto framea question of law on this issue. 5. Question(b) is commonto both ITA Nos.633/2010and 1053/2010.This questionpertainsto disallowanceofthe loss ofUnit-I, i.e. Noida Unit. Inthe earlierAY 1995-96againstthe orderofthe AO orderingdisallowanceofRs.66,25,885,the Commissionerof Income Tax (Appeals) [CIT(A)] hadwhile disposingof the Assessee'sappeal, sustainedthe disallowanceto theextent of Rs.26,80,087.For the present AY, the loss was Rs.21,28,193andhere again the CIT(A) allowed only 1/3'^'^ relief. The ITAT has found thatfacts for AY 1996-97 were different from AY 1995-96. In this AY, i.e.1996-97, commercial production had resumed forty (40) days after the trialproduction whereas in 1995-96, there was a gap of more than one (1) year. 6. The above finding of the ITAT appears to have been based on the factsand, therefore, the Court is of the view that no substantial question of lawarises. 7. Question (c) pertains to disallowance of losses of Unit-II at Noida, whichis involved in the production and sale of Video Magnetic Tapes. TheAssessing Officer (AO) proposed an addition of Rs.4.05 crore on account ofsuppression of sales and closing stock because of which the Assessee haddeclared a loss. The CIT(A) noted the serious discrepancies in the order ofthe AO, which had resulted in directions being issued under Section 144Aby the Additional CIT restricting disallowance to 10 per cent of the grossprofit on sales. ITANos.633£ 1053/2010 8. The ITAT in the impugnedorderhas notedthat losseshad been incurredin Unit-IIin the earlierAY, i.e. 1995-96,as well as the succeedingAY, i.e.1997-98. Accordingly,the addition sustainedby the CIT(A) was entirelydeleted the ITAT. The viewtaken the ITATto be abyby appearsplausibleone in the facts of the case. ITANos.633£ 1053/2010 8. The ITAT in the impugnedorderhas notedthat losseshad been incurredin Unit-IIin the earlierAY, i.e. 1995-96,as well as the succeedingAY, i.e.1997-98. Accordingly,the addition sustainedby the CIT(A) was entirelydeleted the ITAT. The viewtaken the ITATto be abyby appearsplausibleone in the facts of the case. 9. Questionconcerns(d) the disallowanceof depreciationin respectof theNamoli Unit. The question is covered in favour of the Assessee and againstthe Revenue by the decision of this Court in CIT v. Tony Electronics Ltd.(2015) 375ITR 431 (Del). 10. The appeals are accordingly dismissed. S.MURALIDHAR,J OCTOBER 05,2015 b 'nesh VIBHU BAKHRU, J ITANos.633 & 1053/2010