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TMI Blog2019 (11) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... ount OR commission' - HELD THAT:- In the case of Skol Breweries [ 2013 (10) TMI 416 - ITAT MUMBAI] as held that when a purchase / sales is made at discounted price, it is called discount but when an incentive is given for undertaking task / job/ services provided or on sale of goods by one person on behalf of other, then it is commission. Since the benefit given by the assessee to M/s S. Chand Co. Ltd. was in the nature of trade discount and not commission , therefore, the assessee was not required to deduct income tax at source u/s. 194H of the Act, thus, no disallowance can be made u/s. 40(a)(ia) - Decided in favour of the assessee. Disallowance for delay in deposit of Employees Contribution to PF - due date of filing of return of income - HELD THAT:- The employees contribution to EPF was deposited well before the due date of filing of return of income. The assessee has explained the circumstances in which such delay has been occurred. Thus, relying on the judgment of CIT vs. Vinay Cement Ltd. [ 2007 (3) TMI 346 - SC ORDER] and CIT vs. AIMIL Ltd. [ 2009 (12) TMI 38 - DELHI HIGH COURT] the addition was rightly deleted by the Ld. CIT(A), which does not need any int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing of the appeal. 2. Briefly stated facts of the case are that the assesseecompany was engaged in the business of printing and publication of the books. During the year under consideration, the assessee filed its return of income on 31/08/2012, declaring total income of ₹ 1,97,210/- and declared book profit of ₹ 10,40,36,033/- under section 115 JB of Income Tax Act, 1961 (in short the Act ). The case of the assessee was selected for scrutiny and in the scrutiny assessment completed on 18/03/2015 under section 143(3) of the Act, the Assessing Officer following the order of his predecessor for assessment year 2011-12, made following three additions/disallowances: serial No. addition/disallowances amount 1. Disallowance of deduction under section 80 IC of the Act Rs.10,36,64,331/- 2. Disallowance u/s 40(a)(ia) of the Act for non-deduction of tax at source on trade discount Rs.3,96,77,265/- 3. Disallowance under section 36(1)(va) for late deposit of employee contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness operation of the assessee is in the nature of manufacturing as per Durga Products Vs ITO (2008) 12 DTR (Chd)(Trib) 297. The assessee used various machines for finishing, binding, three side cutting of books at its factory premises. Details of glue expenses and binding charges with supporting bills were also filed. The assessee carried out some of the printing on its own and filed details of expenses of ink and plates which were also sent to the AO in the remand proceedings but no adverse observation was made by the AO on the same in the remand report. Therefore, it is not necessary to have a printing unit of its own or to carry out binding on its own for holding the publication of books as a manufacturing activity in view of CIT Vs A Mukherjee Co. (P) Ltd. (1978) 113 ITR 718 (Cal), Orient Longman Ltd. Vs CIT (1981) 130 ITR 477 (Del) and Gulab Chand Jam vs WTO (1983) 17 TTJ (Jab) 489. Thus, the activity of publishing the books carried out by the assessee was rightly held to be manufacturing activity eligible for deduction u/s 80IC of the Act. A part of the manufacturing activity of the assessee may have been outsourced or the assessee may be carrying out job work for others, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he remand report and thus, assessee is eligible to deduction u/s 80IC of the Act. Once the deduction u/s 80IC of the Act is allowed in the 'initial assessment year' i.e. in the AY 2010-11 after due verification of the prescribed conditions and there is no change in the facts, then the deduction cannot be disallowed in subsequent years on the ground of non-fulfillment of conditions laid down in section 80-IC of the Act. This view has been fortified by the decision of the Hon'ble Delhi High Court in the case of CIT vs. Tata Communication Internet SErvicse Ltd. (2012) 251 CTR 290 (Del.) and the decision in CIT vs. Delhi Press Patra Prakashan Ltd. (2013) 260 CTR (Del.) 253 and the decision in the case of Janak Dehydration Pvt. Ltd. vs. ACIT (2010) 134 TTJ (Ahd. (UO), which deal with this issue with regard to the claim of deduction under section 80IA and section 80IB, respectively, which are para material to the section 80IC. We further note that AO has not disallowed the deduction u/s. 80IC on the ground of violation of prescribed conditions but on the basis of finding that the assessee did not actually carry out any operation at the premise of the eligible undertaking. AS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson on behalf of other, then it is commission. Since the benefit given by the assessee to M/s S. Chand Co. Ltd. was in the nature of 'trade discount' and not 'commission', therefore, the assessee was not required to deduct income tax at source u/s. 194H of the Act, thus, no disallowance can be made u/s. 40(a)(ia) of the Act. Therefore, the action of making disallowance u/s. 40(a)(ia) was not called for, as the assessee is not required to deduct TDS u/s. 194H on such discount, which was not in lieu of any services for effecting sales, but was a trade discount. In view of above, Ld. CIT(A) has rightly allowed this ground in favour of the assessee, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue. 6.2 With regard to disallowance for delay in deposit of Employees Contribution to PF is concerned, we find that it is undisputed that the employees contribution to EPF was deposited well before the due date of filing of return of income. The assessee has explained the circumstances in which such delay has been occurred. Thus, relying on the judgment of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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