This Court In Commissioner Of Income Tax v. M/S Pancharatna Cement Private Ltd

WA 28/2010BEFORETHE HON’BLE MR. JUSTICE T. VAIPHEITHE HON’BLE DR. (MRS.) JUSTICE INDIRA SHAH Both Mr. S Sarma, learned Standing Counsel IT Department and Mr. GN Sahewalla, Senior Advocate assisted by Md. Aslam, learned counsel for the respondents have agreed that the controversy involved in this appeal is covered by the decision of this Court in Commissioner of Income Tax Vs. Meghalaya Steels Ltd., reported in(2013) 5 GLR 287 and the subsequent judgment dated 24.07.2013 passed by this Court in ITA No. 27/2011. The respondent filed its return of income for the assessment year 2004-2005 on 01.11.2004 enclosing therewith the profit and loss account and the balance sheet. During the relevant previous year, it had received an amount of Rs.1,44,99,462.00 and Rs.1,70,133.00 as transport subsidy and insurancesubsidy respectively, which were duly reflected in the profit and loss account.The case of the respondent is that the aforesaid subsidy amount is entitled to necessary deduction under section 80 IC of the Income Tax Act, 1961. However, anintimation under section 143 (1) of the Act issued to the respondent to that effect, the Assessing Officer, accordingly, passed an assessment order under section 143 (3) of the Act allowing above deduction. Thereafter, a notice dated 13.09.2007 was issued under section 148 of the Act proposing to reassess the income of the respondent for the said assessment year on the ground that income chargeable to tax had escaped assessment within the meaning of section 147 of the Act. As per the reasons recorded, the transport subsidy and insurance subsidy were allowed as deduction under section 80 IC of the Act as claimed. Holding that profitand gains which are derived from an industrial undertaking and which are not incidental to the business of the assessee or to the income of the industrial undertaking are only eligible for deduction under the aforesaid provision. The Assessing Officer recorded that the deduction allowed under section 80 IC of the Act in respect of transport subsidy and insurance subsidy was not in conformity withlaw. He, therefore, recorded that he had reason to believe that the aforesaid amount of transport subsidy and insurance subsidy chargeable to tax had escaped assessment within the meaning of section 147 of the Act. The respondent, therefore, filed WP(C) No.3643/2008 before this Court challenging the legality and validity of the notice dated 13.09.2007 issued under section 148 of the Act and the consequential steps taken pursuant thereto. The learned Single Judge vide the impugned judgment held that notice initiating the proceeding under section 148 of the Act was not in conformity with the legislative prescriptions mandated in section 147 of the Act and, accordingly, set aside the notice. Aggrieved by this decision, the appellant preferred this writ appeal. As indicated earlier, in terms of the decision of this Court in Meghalaya Steels Ltd (Supra) and the subsequentdecision of this Court in ITA No.27/2011, such subsidy are held to be entitled to deduction under section 80 IC of the Income Tax Act, 1961. Under the circumstances, this writ appeal does not survive for consideration. The appeal is accordingly disposed. No costs.