IN INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T. S. KAPOOR, ACCOUNTANT MEMBER ITA No.281(Asr)/2016 Assessment year:2012-13 PAN : AAACM9209R M/s.M.B.D. Printographics (P) Ltd. vs.Pri. Commissioner of Income Tax, Jalandhar. (Central) Ludhiana. (Appellant) (Respondent) Appellant by: Sh. Saurabh Sehgal, CA Respondent by: Bhawani Shanker, DR Date of hearing: 30/06/2016 Date of pronouncement: 15/09/2016 ORDER PER T.S. KAPOOR, AM: This is appeal filed by assessee against order of ld. Pri. Commissioner of Income Tax (Central), Ludhiana, dated 17.03.2016, relating to assessment year 2012-13, passed under section 263 of Act. 2. At outset, ld. counsel for assessee submitted that assessee company had three manufacturing units out of which one unit was entitled to benefit of deduction under section 80-IC of Act. assessee had got done certain job work from outside for which AO had not disallowed proportionate claim under section 80-IC. 2 ITA No.281/Asr/2016 AS.Y. 2012-13 ld. counsel for assessee submitted that AO during assessment proceedings had called for details of job work done from outside and in this respect our attention was invited to PB-4, where questionnaire dated 22.11.2013 was placed. Our specific attention was drawn to point (iii) of questionnaire. It was submitted that assessee filed its reply vide letter dated 27.01.2014, which is apparent from PB-8 and is placed on record, wherein detail of job work charges paid was enclosed as chart, as placed in PB-11. ld. counsel for assessee submitted that after going through this submission, AO took plausible view and did not make disallowance for proportionate disallowance out of deduction under section 80-IC, as ITAT, Amritsar Bench, vide its order, dated 8th June, 2011, in assessee s own case, in ITA No.426(Asr)/2009 for assessment year 2005-06, has already decided issue in favour of assessee and therefore, AO was bound to follow same. ld. counsel for assessee submitted that only objection raised by ld. Pri. CIT is that Department had not accepted order of Tribunal and had filed appeal before Hon ble Punjab & Haryana High Court. It was submitted that mere filing of appeal before Hon ble High Court does not mean that subordinate Authorities should ignore order of Tribunal. It was submitted that where AO followed decision of Appellate Authority, it cannot be said that his decision is erroneous merely because decision of Appellate Authority is subject matter of further 3 ITA No.281/Asr/2016 AS.Y. 2012-13 appeal. Reliance in this respect was placed on decision of Hon ble Orissa High Court in case of Commissioner of Income Tax vs. Orissa State Financial Corporation, reported in (1993) 203 ITR 747 (Orissa). Further, reliance was placed on decision of Delhi Bench of Tribunal, dated 15.10.2014 in case of Tejpal Singh Kohli vs. CIT, passed in ITA No.3637/Del/2014. 3. ld. DR, on other hand, heavily placed reliance on orders of Authorities below. 4. We have heard rival contentions and have thoroughly gone through material placed on record. We find that AO during assessment proceedings has duly called for information for job work done from outside and assessee had filed complete details as is apparent from PB-4, 8 & 11 and therefore, AO did not make any disallowance out of deduction under section 80-IC of Act on proportionate basis, as he must be in knowledge that in earlier years similar issue had been decided in favour of assessee, by Amritsar Bench of Tribunal vide its order dated 08.06.2011 in ITA No.426(Asr)/2009 for assessment year 2005-06 (copy placed at PB 12 to 17), where under similar circumstances, it has been held as under: 5.1. assessee claimed deduction in respect of amount of Rs.1,17,180/- being printing got done from outside. It is claimed that assessee has got printing done from outside under its supervision. While deciding this issue, ld. CIT9A) has correctly 4 ITA No.281/Asr/2016 AS.Y. 2012-13 observed that assessee has got small portion of its printing work done from outside. It should not be disentitled to deduction u/s 80-IC of Act in respect of such amount. While holding so, we are fortified by decision of Hon ble Calcutta high Court in case of CIT(Central), Calcutta vs. W.H. Harton and Co. Ltd. (1978) 113 ITR 708 (Cal.), wherein it has been held that publisher got its books printed outside from any printer under its supervision and it can be said that assessee had taken active role by coordinating its activities as well as activities of printer in business like manner. Considering entire facts and circumstances of case, we uphold order of ld. CIT(A) in holding that printing got done from outside is eligible for deduction under section 80-IC of Act. 5. We find that this order of Tribunal in case of assessee itself is dated 08.06.2011 and AO was bound to follow same. only objection raised by ld. Pri. CIT is that on same issue, Department was in appeal and question of law has been admitted by Hon ble Punjab & Haryana High Court. For sake of completeness, objection of ld. CIT(A) is reproduced below: (a) department is in appeal on this issue of law before Hon ble Punjab & Haryana High Court, Chandigarh, in ITA No.121 of 2013. said questions of law raised by department before Hon ble Punjab & Haryana High Court, Chandigarh have been admitted vide order dated 18.09.2014. 6. ld. Pri. CIT has nowhere held order to be erroneous or prejudicial to interests of Revenue. Hon ble Orissa High Court, in case of CIT vs. Orissa State Financial Corporation, reported at 203 ITR 747 (Ori.), under similar circumstances, had held as under: 5 ITA No.281/Asr/2016 AS.Y. 2012-13 Held,(i) that from order passed by Commissioner under section 263, it was clear that interest on doubtful debts was held to be taxable income because reference applications against orders of Tribunal had been filed in High Court. No other reason was indicated by Commissioner in support of his conclusion that order of Income tax Officer was erroneous and prejudicial to interests of Revenue. His conclusion that interest on doubtful debts was real income because matter was pending under reference before High Court could certainly not be ground to attract operation of section 263. 7. Similarly, Delhi Bench of Tribunal in case of Tejpal Singh Kohli vs. CIT, passed in ITA No. 3637/Del/2014, has held as under: On perusal of above paragraph in assessment order, coupled with facts that in earlier assessment year same AO denied exemption u/s 80-IC to assessee on very same grounds and facts that Commissioner of Income Tax (Appeals) has reversed such addition, we are of opinion that AO has properly applied its mind and hence take plausible view. Thus, applying proportions laid down by Hon ble Supreme Court in case of CIT vs. Max India Ltd. (2007) 295 ITR 282 (SC) and proportions laid down in case of Malabar Industries Co. Ltd. vs. CIT, 243 ITR 83 (SC) we conclude that order passed u/s 263 is bad in law. 8. Therefore, keeping in view facts and circumstances of present case and following judicial precedents relied upon by assessee, we are of opinion that assumption of jurisdiction by ld. 6 ITA No.281/Asr/2016 AS.Y. 2012-13 Pri. CIT was not justified and therefore, we cancel order passed by ld. Pri. CIT under section 263 of Act. 9. In view of above, appeal filed by assessee is allowed. Order pronounced in open court on 15/09/2016. Sd/- Sd/- (A.D. JAIN) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER SKR Dated: 15/09/2016 Copy of order forwarded to: 1. Assessee:M/s. MBD Printographics (P) Ltd. Jalandhar. 2. Pri. CIT (Central), Ludhiana. 3. SR DR, ITAT, Amritsar. True copy By order Income Tax Appellate Tribunal, Amritsar Bench: Amritsar. M/s. M.B.D. Printographics (P) Ltd. v. Pri. Commissioner of Income-tax, (Central) Ludhiana