CIT Vs. TEJ PAL SINGH KOHLI

JUDGEMENT

(1.) This appeal by the Revenue prays that the order dated 11.07.2014 of Income Tax Tribunal (ITAT) passed in appeal No. 362/DEL/2013 respecting the respondent/assessee for the Assessment Year 2009-10 be set aside. The impugned order was passed by ITAT dismissing the appeal of the Revenue against the order dated 31.10.2012 rendered by the Commissioner of Income Tax (Appeals) [CIT(A)] allowing the appeal of the respondent/assessee thereby setting aside the order dated 28.11.2011 passed by the Assessing Officer (A.O) under Section 143(3) of Income Tax Act 1961 assessing the income of the respondent at Rs. 71,99,590/- charging interest under Sections 234-B and 234-C of Income Tax Act and initiating penalty proceedings under Section 271-IC of the Income Tax Act.

(2.) The assessee is proprietor of entity carrying on the business in the name and style of M/s. Concept Industries engaged in the manufacturing of electronic goods. The assessee had claimed deduction under Section 80-IC in the return filed for the relevant year. A notice under Section 143(2) was issued and served on him. The assessment order was passed by the A.O. under Section 143(3). The A.O. had deleted the claim of deduction in the sum of Rs. 71,99,594/- under Section 80-IC of the Income Tax Act on the ground that assessee was engaged in the business of manufacture of electronic goods in the industrial area of Himachal Pradesh. The A.O. recorded the view that no manufacturing activities are being carried out and in fact the business involves only trading under the brand name of the parent company " NACVOX". The A.O. found that there was no adequate plant or machinery or infrastructure to carry out the manufacturing activities. In his view, the LCD Monitor claimed to be manufactured by the assessee is not covered under Schedule XIV to the Income Tax Act.

(3.) It may be mentioned here that reference has been made in above context to Sl.No. 13 in part (C) of the Schedule XIV relevant for purposes of Section 80-IC(2), the activity or article or operation having been described therein as "information and communication technology industry, computer hardware, call centres". It has been the contention of the assessee that the item produced (LCD Monitors) falls under the category of information and communication technology devices.