Appeal details
Counselvise Citation
[2014] 122 COUNSELVISE.COM (IT) 9285 (ITAT-PANAJI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
03-01-2014
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2007-2008
Appeal Filed On
23-07-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NOS. 145 TO 150/PNJ/2013 (ASSESSMENT YEARS-2004-05 TO 2009-10) THE ASSISTANT COMM ISSIONER OF INCOME TAX, CIRCLE-2(1), PANAJI-GOA. (APPELLANT) VS. M/S. APEX PACKING PRODUCTS(P) LTD. PLOT NO. 187, KUNDAIM INDL ESTATE KUNDAIM-GOA. PAN:AACCA3426B (RESPONDENT) C.O. NOS. 27 TO 30/PNJ/2013 (ASSESSMENT YEARS 2004-05 TO 2007-08) M/S. APEX PACKING PRODUCTS (P) LTD. VS. THE ASSISTANT COMMISSIONER OF PLOT NO. 187, KUNDAIM INDL ESTATE INCOME TAX, CIRCLE-2(1), KUNDAIM-GOA. PANAJI- GOA. PAN: AACCA34426B(OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI S. PARTHASARTHI, ADV. SHRI P. DINESH, ADV. RESPONDENT BY : NISHANT K. DATE OF HEARING : 28/11/2013 DATE OF ORDER : 03/01/2014 O R D E R PER: D.T. GARASIA THE DEPARTMENT HAS FILED ITA NOS. 145 TO 150/PNJ/2013 AGAINST THE ORDER OF CIT(A), PANAJI DATED 29.04.2012, FOR THE ASSESSMENT YEARS 2004-05 TO 2009-10. THE ASSESSEE HAS FIELD C.O. NOS. 27 TO 30/PNJ/ 2013 FOR RESPECTIVE ASSESSMENT YEARS 2004-05 TO 2007-08. 2. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. 2. IN ALL THESE DEPARTMENTS APPEAL THE COMMON GROUNDS RAISED BY THE DEPARTMENTS WHICH READ AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES APPEAL BY ALLOWING THE CLAIM OF DEDUCTION CLAIMED U/S. 80IB FOR UNIT II, WHICH IS JUST AN EXPANSION OF EXISTING UNIT 1 WITHOUT CONSIDERING THE MERIT OF THE CASE. 2. THE LEARNED CIT(A), HAS ERRED IN SAYING THAT UNIT-11 IS AN INDEPENDENT MANUFACTURING UNIT ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE I.T. ACT AND ALLOWED THE DEDUCTION U/S. 80IB(4) ON PROFIT OF SAID UNIT. 3. IN C.O NOS. 27 & 28 SAME GROUND RAISED WHICH READ AS UNDER:- 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A) IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF RESPONDENT, IS BAD IN LAW. 2. THE COMMISSIONER OF INCOME-TAX (A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT HAVING BEEN REOPENED AFTER THE LAPSE OF PERIOD OF LIMITATION PRESCRIBED UNDER THE STATUTE, THE ASSESSMENT ORDER WAS REQUIRED TO BE. QUASHED AS NONEST AND VOID IN THE EYE OF LAW. 3. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THE ASSESSMENT WAS REOPENED ON A MERE CHANGE OF OPINION AND CONSEQUENTLY THE ASSESSMENT ORDER WAS NOT SUSTAINABLE IN THE EYE OF LAW AS THERE WAS NO INCOME THAT HAD ESCAPED ASSESSMENT. 4. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE FOLLOWED THE DICTUM OF HONBLE SUPREME COURT REPORTED IN 231 ITR 200 IN THE CASE OF COCA COLA EXPORT CORPORATION ETC., VS. ITO & ANR. AND OUGHT TO HAVE HELD THAT THE ASSESSMENT WAS BAD IN LAW AND CONSEQUENTLY QUASHED THE SAME. 4 IN C.O. NOS. 29 &30 SAME GROUND RAISED WHICH READ AS UNDER:- 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A) IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF RESPONDENT, IS BAD IN LAW. 2. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THE ASSESSMENT WAS REOPENED ON A MERE CHANGE OF OPINION AND CONSEQUENTLY THE ASSESSMENT ORDER WAS NOT SUSTAINABLE IN THE EYE OF LAW, AS THERE WAS NO INCOME THAT HAD ESCAPED ASSESSMENT. 3. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE FOLLOWED THE DICTUM OF HONBLE SUPREME COURT REPORTED IN 231 ITR 200 IN THE CASE OF COCA COLA EXPORT CORPORATION ETC., VS. ITO & ANOR. AND OUGHT TO HAVE HELD THAT THE ASSESSMENT WAS BAD IN LAW AND CONSEQUENTLY QUASHED THE SAME. 3. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. 5. THE BRIEF FACTS IN ALL THESE CASES ARE THAT THE ASSESSEE COMPANY CLAIMED TO BE ENGAGED IN MANUFACTURING OF PACKING MATERIAL FROM PAPER (UNIT-1) AND LAMINATED PACKAGING MATERIAL (INCLUDING WRAPPERS) FROM PLASTICS (UNIT-II). THE ASSESSEE CLAIMED DEDUCTION U/S. 80 IB(4) IN RESPECT PACKAGING MATERIAL AND THE YEAR UNDER CONSIDERATION WAS THE 7 TH BY HER, YEAR OF OPERATION. THE AO HAS CARRIED OUT THE INSPECTION OF THE ASSESSEES PREMISES CONDUCTED ON 26.11.2010, IT WAS FOUND THAT (UNIT-II) WHICH IS CLAIMED TO BE SEPARATE INDUSTRIAL UNIT BY THE ASSESSEE FOR WHICH THE DEDUCTION BEING CLAIMED U/S. 80IB(4), WAS OPERATING IN THE SAME BUILDING, WHERE UNIT-1 IS OPERATIONAL. ON GOING THROUGH THE VERIFICATION, IT WAS FOUND THAT UNIT-II DOES NOT HAVE ANY SEPARATE BUILDING OF ITS OWN FOR FUNCTIONING. THE BUILDING OF UNIT-I WAS EXTENDED BY THE ASSESSEE TO ACCOMMODATE MACHINES OF UNIT-II. THEREFORE, AO WAS OF A VIEW THAT UNIT-II IS ONLY AN EXTENSION OF UNIT-I. DURING THE INSPECTION THE STATEMENT OF OF MR. YATIN KAKODKAR, THE DIRECTOR OF COMPANY STATEMENT WAS RECORDED AND FOLLOWING QUESTION WAS PUT TO HIM WHICH ARE AS UNDER:- Q.4. PLEASE STATE WHETHER UNIT-I AND UNIT II ARE RUNNING FROM THE SAME BUILDING? ANS: THE UNIT-I WAS BUILT ON PLOT NO. 186. WHEN WE STARTED UNIT-IL, THE BUILDING FOR THE SAME WAS CONSTRUCTED ON PLOT NO. 187 ADJACENT TO PLOT NO. 186 AND THE SAME WERE INTERCONNECTED. WE SHIFTED 2 COATING MACHINES AND I POUCHING MACHINE FROM UNIT-IL IN 2007 TO UNIT-I BUILDING. A BUILDING WAS CONSTRUCTED ON PLOT NO.187 (ADJACENT PLOT OF UNIT-I) FOR THE PURPOSE OF UNIT-IL AS CLAIMED BY THE ASSESSEE. THE BUILDINGS WERE INTERCONNECTED TO FACILITATE THE TRANSFER OF MACHINERY. FURTHER ON INSPECTION, IT WAS FOUND THAT THE MACHINERY WAS SHIFTED TO UNIT-I BUILDING. THE BUILDING WHICH HOUSES THE UNIT-I WAS EXTENDED BREADTH WISE TO ACCOMMODATE THE MACHINERY OF UNIT-TI. THE ROOF WAS ALSO EXTENDED. THE ASSESSEE CONTENDS THAT THE UNIT-IL WAS STARTED ON A DIFFERENT PLOT ONLY. WHEN A DIFFERENT PLOT WAS PURCHASED FOR THE PURPOSE OF STARTING THE UNIT-IL, WHAT IS THE NECESSITY TO EXTEND THE PLOT ON WHICH ALREADY UNIT-I WAS EXISTING? THE ASSESSEE HAS EXTENDED THE PLOT BREADTH WISE TO PUT IN EXTRA MACHINERY IN THAT EXTENDED AREA AND FUNCTION THE UNDERTAKING. AT FIRST SITE OF THE BUILDING, IT IS DIFFICULT TO FIND OUT THAT THERE ARE TWO UNITS OPERATING IN THE BUILDING. ONLY DURING THE ENQUIRY WHICH WAS CONDUCTED, THE DIRECTOR HAD EXPLAINED THAT THERE ARE TWO UNITS OPERATING INSIDE THE SAID PREMISES/BUILDING. THE INDUSTRIAL UNDERTAKING SHOULD NOT HAVE BEEN FORMED BY SPLITTING UP OR RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE FOR CLAIMING DEDUCTION U/S 801B. UNLESS SOMEBODY POINTS OUT THAT THERE ARE TWO UNITS INSIDE THE BUILDING, IT IS IMPOSSIBLE FOR ANYONE TO FIND OUT THAT THERE ARE TWO UNDERTAKINGS FUNCTIONING INSIDE. 4. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. BASED ON THE INSPECTION, IT IS BELIEVED THAT THE UNIT-II COULD NOT BE REGARDED AS A SEPARATE AND INDEPENDENT INDUSTRIAL UNDERTAKING. IN THIS REGARD THE CASE OF PERIYAR CHEMICALS, 226 ITR 0467 OF KERALA HIGH COURT IS QUOTED HERE. IT IS NOT CORRECT TO SAY THAT THE NEW UNIT IS HOUSED IN A DIFFERENT BUILDING. ON THE CONTRARY THE CORRECT FACTUAL POSITION IS THAT THE SO-CALLED NEW UNIT IS ALSO HOUSED IN THE SAME BUILDING WHERE THE OLD PLANT IS ALSO ERECTED. IT IS SEEN THAT THE ADDITIONAL SPACE NECESSARY FOR INSTALLING THE MACHINERIES OF THE NEW UNIT WAS MADE AVAILABLE BY REMOVING ONE LONGITUDINAL WALL OF THE OLD BUILDING AND ENLARGING THE OLD BUILDING BY EXTENDING THE CROSS WALLS AND CONSTRUCTING A NEW WALL LENGTHWISE. OF COURSE FRESH ROOFING HAD TO BE GIVEN TO THE ENLARGED AREA, BUT THE ROOFING IS CONTIGUOUS WITH THAT OF THE ROOFING OF THE BUILDING OF THE OLD UNIT. OF THESE TWO ROWS ARE STATED TO BELONG TO THE EXISTING UNIT AND THE OTHER TWO OF THE NEW UNIT. THERE IS NO PARTITION WHATSOEVER BETWEEN THE ROWS OF THE MACHINERIES OF THE TWO UNITS. UNLESS SOMEBODY SPECIFICALLY POINTS OUT THAT THERE ARE TWO UNITS INSIDE THE HAIL, IT IS IMPROBABLE THAT ANYBODY WILL BE STRUCK BY SUCH AN IDEA. AS A RESULT THE OVERALL IMPRESSION WHICH ANY VIEWER IS LIKELY TO FORM IS THAT OF A SINGLE INDUSTRIAL UNDERTAKING FUNCTIONING UNDER A COMMON ROOF IN THE ABOVE REFERRED CASE, THE DECISION WAS GIVEN IN FAVOR OF REVENUE. THE SAME IS THE FACTS OF THE INSTANT CASE ALSO. BOTH THE UNITS ARE EXISTING IN THE SAME BUILDING. THE UNIT-IL DOES NOT EXIST SEPARATELY. IT IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT. AFTER CONDUCTING THE ENQUIRY, IT IS CONCLUDED THAT THE UNIT-IL DOES NOT EXIST SEPARATELY AND IT IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT. THE UNIT-TI CANNOT EXIST INDEPENDENTLY AND CANNOT OPERATE AS A STANDALONE UNDERTAKING. II. DOES THE UNIT-IL HAVE ANY SEPARATE LICENSE? THE CONDITIONS STIPULATED UNDER SECTION 801/801A/801B CAN BE SATISFIED ONLY WHEN THERE IS AN UNDERTAKING. HOWEVER THE MERE EXISTENCE OF AN UNDERTAKING IS NOT SUFFICIENT. THE UNDERTAKING SHOULD ALSO HE NEW. IT SHOULD NOT ONLY BE A SEPARATE AND INDEPENDENT UNIT HUT A WELL INTEGRATED UNIT CAPABLE OF UNDERTAKING THE MANUFACTURE OR PRODUCTION OF ARTICLES OR THINGS. THE DEDUCTION U/S. 80 IB IS AVAILABLE FOR INDUSTRIAL UNDERTAKINGS WHICH ARE FORMED NEW AND NOT TO THOSE WHICH ARE FORMED BY SPLITTING UP OR BY RECONSTRUCTION. THE NEW INDUSTRIAL UNDERTAKING SHOULD BE NEW AND IDENTIFIABLE UNDERTAKING SEPARATE AND DISTINCT FROM THE EXISTING BUSINESS. THERE MUST BE A NEW EMERGENCE OF A PHYSICALLY SEPARATE INDUSTRIAL UNIT WHICH MAY EXIST ON ITS OWN AS A VIABLE UNIT. DURING INSPECTION, THE DIRECTOR WAS ASKED TO PRODUCE THE LICENSE OBTAINED FOR BOTH THE UNITS. THE DIRECTOR MR. YATIN KAKODKAR EXPRESSED HIS INABILITY AS NO LICENSE WAS OBTAINED FOR UNIT-IL Q.9. DO YOU HAVE ANY SEPARATE LICENCE FROM THE MINISTRY OF SMALL SCALE INDUSTRIES? 5. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. ANS: NO. WE ARE NOT HAVING ANY LICENCE BUT WE ARE REGISTERED AS APEX PACKING PRODUCTS (P) LTD WITH THE DEPARTMENT OF INDUSTRIES, GOVT OF GOA. Q.1O, DO YOU HAVE ANY LICENCE OBTAINED FOR UNIT-IL? ANS: NO, NO LICENCE WAS OBTAINED FOR UNIT-II. THE DEDUCTION U/S. 801B(4) IS AVAILABLE ONLY TO AN INDUSTRIAL UNDERTAKING WHICH IS RECOGNIZED BY THE MINISTRY OF SMALL SCALE INDUSTRIES. THIS MINISTRY GIVES THE RECOGNITION/CERTIFICATE OF LICENSE TO START AN INDUSTRIAL UNDERTAKING. IN THE ABSENCE OF A LICENSE FOR AN INDUSTRIAL UNDERTAKING, IT IS NOT RIGHT TO CALL IT AN UNDERTAKING AT ALL. IF IT IS NOT AN UNDERTAKING, THERE IS NO QUESTION OF CLAIMING DEDUCTION U/S. 80 IB AS THE DEDUCTION U/S. 80 IB IS AVAILABLE ONLY TO AN INDUSTRIAL UNDERTAKING. IN THE INSTANT CASE OF THE ASSESSEE COMPANY, IN THE ABSENCE OF THE LICENSE FROM THE MINISTRY OF SMALL SCALE INDUSTRIES, UNIT-II OF THE ASSESSEE COMPANY WHICH IS CLAIMING DEDUCTION U/S. 8OLB IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT-I WHICH HAD CLAIMED DEDUCTION U/S. 801B EARLIER. AS THE UNIT-IL IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT-I DEDUCTION CLAIMED IS NOT ALLOWABLE. UNIT-II DOES NOT HAVE A DISTINCT IDENTITY AT ALL WHICH IS BASIC FOR ANY INDUSTRIAL UNDERTAKING CLAIMING THE DEDUCTION U/S. 801B. LEGAL STATUS OF THE UNIT IS HIGHLY RELEVANT TO DECIDE WHETHER THE UNIT IS IN THE NATURE OF AN UNDERTAKING. WITHOUT PREJUDICE TO THE ABOVE, ANY NEW INDUSTRIAL UNDERTAKING HAS TO OBTAIN REGISTRATION FROM THE CENTRAL EXCISE. CENTRAL EXCISE AUTHORITIES MONITOR THE MANUFACTURING. THEY MONITOR THE QUANTITY THAT GOES OUT AND WHETHER THE PRODUCTS ARE EXCISABLE OR NOT. THE ASSESSEE COMPANY HAS NOT OBTAINED ANY REGISTRATION FROM THE CENTRAL EXCISE THE ASSESSEE COMPANY HAS TAKEN A CENTRAL EXCISE REGISTRATION FOR THE UNIT-I. THIS GOES TO SHOW THAT UNIT-IL IS FULLY DEPENDENT ON UNIT-I AND DOES NOT EXISTENCE WITHOUT UNIT-I. THE INTENTION OF THE LEGISLATURE IN PROVIDING THE DEDUCTION U/S. 801B IS TO PROMOTE THE SMALL SCALE INDUSTRIES IN THE BACKWARD STATES SO THAT THERE IS A BALANCED REGIONAL DEVELOPMENT ACROSS THE COUNTRY. BUT A MERE EXTENSION OF AN ALREADY EXISTING INDUSTRIAL UNIT AND CLAIMING DEDUCTION ON THAT COMPLETELY DEFEATS THE PURPOSE OF THE LEGISLATION. THE COMPANY HAS MISINTERPRETED THE PROVISION PROVIDED FOR DEDUCTION. THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE AND AFTER CONSIDERING THE VARIOUS STATEMENTS THE ASSESSING OFFICER WAS OF A VIEW THAT UNIT II IS NOT INDEPENDENT UNIT BUT IT IS UNIT-I ONLY AND DISALLOWED THE CLAIM OF 80IB IN RESPECT OF ASSESSMENT ORDER WHICH READ AS UNDER: 2004-05 - RS. 1,34,19,907/- 2005-06- RS. 1,75,16,190/- 2006-07- RS.2,41,87,082/- 2007-08- RS. 3,83,97,600/- 2008-09- RS. 3,44,50,960/- 2009-09-RS. 3,44,50,960/- 6. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. 6. THE MATTER CARRIED TO CIT (A) AND CIT(A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER:- 7. I HAVE GONE THROUGH THE ASSESSMENT ORDER, VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE AO AND THE APPELLANT AND DETAILED WRITTEN SUBMISSION FILED BY THE APPELLANT. THE AO DENIED THE EXISTENCE OF INDEPENDENT UNIT-TI ON THE BASIS THAT THE TWO PLOTS ARE CO-EXISTENT, NO SEPARATE LICENSE FROM GOVT. AUTHORITIES WERE OBTAINED, THERE IS COMMON ROOF AND ALSO THAT THERE IS COMMON MANAGEMENT. THE AO ALSO CONCLUDED THAT UNIT-TI CANNOT FUNCTION INDEPENDENTLY AND THEREFORE, UNIT-IT IS NOTHING, BUT AN EXTENSION OF UNIT- I. ON THE OTHER HAND, THE APPELLANT CONTENDED THAT UNIT- I AND UNIT- IT CAME INTO EXISTENCE AT DIFFERENT TIMES, HAVE MANUFACTURING FACILITY FOR TWO COMPLETELY DIFFERENT PRODUCTS HAVING DIFFERENT CLIENTELE. THE MACHINERIES ARE TOTALLY DIFFERENT AND ONE CANNOT HE USED TO MANUFACTURE THE PRODUCT OF OTHER. THEY ARE CAPABLE OF FUNCTIONING INDEPENDENTLY AND IN FACT, THEY ARE FUNCTIONING INDEPENDENTLY. HAVING COMMON MANAGEMENT AND FEW OTHER COMMON FACILITIES, DO NOT NEGATE THE INDEPENDENT IDENTITIES OF BOTH UNITS. THEREFORE, IN VIEW OF THE FACTS OF THIS CASE, IN MY OPINION, UNIT-IL IS AN INDEPENDENT MANUFACTV4XTG UNIT, CONSTRUCTED BY INVESTING A MUCH HIGHER AMOUNT COMPARED TO UNIT- I, WHICH IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 801B (4). THE AO IS THEREFORE DIRECTED TO ALLOW THE DEDUCTION U/S. 801B(4) TO THE APPELLANT ON UNIT-IL FOR A.Y. 2008-09, 2009-10, 2004-05, 2005-06, 2006-07 AND2007- 08. THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED ACCORDINGLY. 8.5 THE FACTS OF THE INSTANT CASE IS IDENTICAL TO THAT OF DIAMOND TOOL INDUSTRIES AND THEREFORE, FOLLOWING THE DECISION IN THE ABOVE CASE, IN MY OPINION, THE SALES TAX RETAINED BY THE APPELLANT IS PART OF THE PROFIT OF THE INDUSTRIAL UNDERTAKING AND ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. ENHANCEMENT APPLICATION OF THE AO IS REJECTED ACCORDINGLY. 7. C.O. NO. 27 AND 28 RELATES TO ASSESSMENT YEARS 2004-05 AND 2005-06 WHICH GOES TO THE ROOT OF THE CASE. DURING THE COURSE OF HEARING THE LEARNED AR SUBMITTED THAT THE NOTICE U/S 148 FOR REOPENING THE ASSESSMENT U/S. 147 OF THE ACT FOR ASSESSMENT YEAR 2004-05 IS BAD IN LAW ON THE GROUND THAT IT WAS BARRED BY LIMITATION. THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR DISCLOSING ALL THE PRIMARY MATERIALS AND THE ASSESSMENT TO CONCLUDE ON 8.12.2006. IN THE RETURN FILED ORIGINALLY THE ESTABLISHMENT OF UNIT II WAS BROUGHT TO THE NOTICE AND ALL THE PARTICULARS WITH REGARD TO THE PLANT AND 7. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. MACHINERY PURCHASED AND THE PRODUCTIONS WITH REGARD TO THE PLANT AND MACHINERY PURCHASED AND THE PRODUCTION MADE HAVE ALREADY BEEN DISCLOSED. THUS, ASSESSEE HAVING FILED THE RETURN OF INCOME AND HAD ALSO DISCLOSED ALL THE PRIMARY MATERIALS AND PARTICULARS IN THE RETURN AND ASSESSMENT HAS BEEN CONCLUDED U/S. 143(3) OF THE ACT., BY APPLYING THE PROVISO TO SEC. 147 OF THE ACT THE ASSESSMENT CANNOT BE REOPENED THE FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. FOR THE RELEVANT ASSESSMENT YEAR THE LAST DATE OF THE ASSESSMENT YEAR WAS 30.3.2005 AND ACCORDINGLY THE ASSESSMENT IF AT ALL REQUIRED TO BE REOPENED IT SHOULD HAVE BEEN DONE ON OR BEFORE 31.3.2009. IN THE CIRCUMSTANCES THE ENTIRE PROCEEDINGS ARE BARRED BY LIMITATION AND THE NOTICE BEING INVALID, NO REASSESSMENT CAN BE DONE AND THE IMPUGNED NOTICE MAY KINDLY BE WITHDRAWN. THE ASSESSEE HAS TAKEN SECOND LIMB OF ARGUMENT THAT THE REASONS RECORDED BY THE ASSESSING OFFICER THAT UNIT-II DID NOT EXISTS IN INDEPENDENTLY. UNIT-II WAS EXCLUSION OF UNIT-I COULD NOT BE INDEPENDENTLY FUNCTION, FOR WHICH IT WAS SURMISED THAT ASSESSEE DID NOT HAVE ANY LICENSE FROM THE MINISTRY OF SMALL SCALE INDUSTRIES FOR UNIT-II. THE SO CALLED SURMISE WAS UNCALLED FOR IN THAT SUCH LICENSE WAS NOT REQUIRED TO BE OBTAINED BY THE ASSESSEE. WHEN THE DIRECTION WAS QUERIED IN THIS REGARD, THE REQUIREMENT OF LICENSE HE HAS APPLIED THAT NO SUCH REQUIREMENT. THE UNIT II IS TOTALLY DIFFERENT PROJECT MANUFACTURING BY UNIT I. SECONDLY UNIT-II HAS SATISFIED ALL THE CONDITIONS PROVIDED U/S 80IB OF THE ACT. THEREFORE, WHICH IS MERE CHANGE OF THE OPINION THE ASSESSMENT MADE WAS NOT REQUIRED TO BE REOPENED U/S. 147 OF THE ACT AS PER DECISION OF HONBLE SUPREME COURT AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. FORAMER FRANCE REPORTED IN 264 ITR 566(SC): CIT VS. KELVINATOR OF INDIA LTD., (DEL(. (F.B.) 256 ITR 1.THE LEARNED AR SUBMITTED THAT THE ASSESSMENT YEAR 2002-03 BEING THE INITIAL YEAR, THE MATTER WAS DELIBERATED UPON IN DETAIL AND EVEN IN THE ORDER U/S. 8. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. 264 OF THE ACT THE COMMISSIONER OF INCOME TAX HAS AGREED THE EXISTENCE OF TWO UNDERTAKING ELIGIBLE FOR 80IB EXEMPTION. 8. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSMENT WAS REOPENED BY ISSUING THE NOTICE U/S. 148 WHICH READ AS UNDER. THE ASSESSEE FILED RETURN OF INCOME ON 30. 10. 2005 DECLARING TOTAL INCOME OF RS. 2,18,733/ AFTER CLAIMING DEDUCTION U/S. 80IB OF RS. 2,10,85,825/-. THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 20.11.2007 DETERMINING TOTAL INCOME AT RS. 2,53,460/- AFTER ALLOWANCE OF DEDUCTION U/S. 80IB OF RS. 1,72,62,730/-. IN THE ASSESSEES CASE THE ASSESSMENT FOR A.Y. 08-09 WAS MADE U/S. 143(3) ON 30.12.2010 DISALLOWING ASSESSEES CLAIM U/S. 80IB FOR UNIT-II FOR THE DETAILED REASONS MENTIONED IN THE ASSESSMENT ORDER, BASED ON THE FOLLOWING GROUNDS. ASSESSEE COMPANY IS HAVING TWO UNITS, VIS. UNIT-I AND UNIT-II. BOTH THE UNITS ARE EXISTING IN THE SAME BUILDING. THE UNIT-II DOES NOT EXIST SEPARATELY. IT IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT. AFTER CONDUCTING THE ENQUIRY, IT IS CONCLUDED THAT THE UNIT-II DOES NOT EXIST SEPARATELY AND IT IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT. THE UNIT-II CANNOT EXIT INDEPENDENTLY AND CANNOT OPERATE AS A STANDALONE UNDERTAKING. THUS IT WAS HELD THAT UNIT-II IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IB. THE ASSESSEE COMPANY, IS NOT HAVING THE LICENSE FROM THE MINISTRY OF SMALL SCALE INDUSTRIES FOR UNIT-II & THUS IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT-I WHICH HAD CLAIMED DEDUCTION U/S. 80IB EARLIER. AS THE UNIT-II IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT-I DEDUCTION CLAIMED IS NOT ALLOWABLE. UNIT-II DOES NOT HAVE A DISTINCT IDENTITY AT ALL WHICH IS BASIC FOR ANY INDUSTRIAL UNDERTAKING CLAIMING THE DEDUCTION U/S. IB. FOR THE A.Y. 05-06 ALSO, THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB IN RESPECT OF UNIT-II AT RS. 2,68,38,506/- AND THE ABOVE FACTS ALSO EXISTS FOR THIS YEAR ALSO AND AS SUCH THE ASSESSEE HAS WRONGLY CLAIMED DEDUCTION U/S. 80IB FOR UNIT-II AND THE SAME HAS BEEN ALLOWED AT RS. 1,72,62,730/-. AS SUCH THE INCOME FOR THE A.Y. 05-06 IS UNDER ASSESSED. HENCE, I HAVE REASON TO BELIEVE THAT, THE INCOME CHARGEABLE TO TAX FOR A.Y. 2005-06 HAS ESCAPED ASSESSMENT, AS PROVIDED IN SEC.147. PRIOR SANCTION OF COMMISSIONER OF INCOME TAX, PANAJI HAS BEEN OBTAINED U/S. 151(1) OF I.T. ACT FOR ISSUE OF NOTICE U/S. 148. 9. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. FROM PERUSAL OF THIS NOTICE IT IS STATED IN THE NOTICE THAT ASSESSEE COMPANY IS HAVING TWO UNITS, VIZ. UNIT-I AND UNIT-II. BOTH THE UNITS ARE EXISTING IN THE SAME BUILDING. THE UNIT-II DOES NOT EXISTS SEPARATELY. IT IS ONLY AN EXTENSION OF ALREADY EXISTING UNIT. THE UNIT-II CANNOT EXIST INDEPENDENTLY AND CANNOT EXISTS INDEPENDENTLY AND CANNOT OPERATE AS A STANDALONE UNDERTAKING. THE ASSESSEE COMPANY IS NOT LICENSE FROM THE MINISTRY OF SMALL SCALE INDUSTRIES FOR UNIT-II & THUS IT IS ONLY AN EXTENSION OF THE ALREADY EXISTING UNIT-I WHICH WAS CLAIMED DEDUCTION U/S. 80IB. FOR THE ASSESSMENT YEAR 05-06, THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB, THEREFORE, THE ASSESSING OFFICER HAVE REASONED TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX UNDER A.Y. 05-06 HAS BEEN ESCAPED. THE ASSESSEE HAS REQUIRED TO THE SHOW CAUSE NOTICE WHICH READ AS UNDER:- OCTOBER 31, 2011 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2(1), PANAJI AAYKAR BHAWA PATTO, PANAJI, GOA 403001 SUB: NOTICE U/S.148 OF THE ACT FOR REOPENING THE ASSESSMENT U/S. 147 OF THE ACT -ASSESSMENT YEAR: 2004-05-M/S. APEX PACKING PRODUCTS PVT LTD., KUNDAIM, GOA PLEASE REFER TO THE LETTER DT. 17.10.2011 ALONG WITH THE ENCLOSED REASONS RECORDED. AT THE OUTSET WE WISH TO SUBMIT THAT THE REOPENING WAS BAD IN LAW IN THAT IT WAS BARRED BY TIME. IT MAY KINDLY BE APPRECIATED THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR DISCLOSING ALL THE PRIMARY MATERIALS AND THE ASSESSMENT STOOD CONCLUDED ON 8.12.2006. IN THE RETURN FILED ORIGINALLY THE ESTABLISHMENT OF UNIT-II HAS BROUGHT TO THE NOTICE AND ALL THE ARTICU1ARS WITH REGARD TO THE PLANT AND MACHINERY PURCHASED AND THE PRODUCTION MADE HAVE ALREADY BEEN DISCLOSED. THUS, THE ASSESSEE HAVING FILED THE RETURN OF INCOME AND HAD ALSO DISCLOSED ALL THE PRIMARY MATERIALS AND PARTICULARS IN THE RETURN AND ALSO IN THE COURSE OF ASSESSMENT PROCEEDINGS AND FURTHER THE ASSESSMENT HAVING BEEN CONCLUDED U/S.143(3) OF THE ACT, BY APPLYING THE PROVISO TO SEC. 147 OF THE ACT THE ASSESSMENT CANNOT BE REOPENED BEYOND 4 YEARS FROM THE END OF THE ASSESSMENT YEAR. FOR THE RELEVANT 10. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. ASSESSMENT YEAR THE LAST DATE OF THE ASSESSMENT YEAR WAS 31.3.2005 AND ACCORDINGLY THE ASSESSMENT IF AT ALL REQUIRED TO BE REOPENED IT SHOULD HAVE BEEN E ON OR BEFORE 31.3.2009. IN THE CIRCUMSTANCES THE ENTIRE PROCEEDINGS ARE BARRED BY LIMITATION AND THE NOTICE BEING INVALID, NO REASSESSMENT CAN BE DONE AND THE IMPUGNED NOTICE MAY KINDLY BE WITHDRAWN. WITHOUT PREJUDICE, FROM THE REASONS RECORDED IT IS FOUND THAT ON MERE SURMISE THE ASSESSING AUTHORITY HAS COME TO THE CONCLUSION THAT UNIT-II DID NOT EXIST INDEPENDENTLY. THE LEARNED ASSESSING OFFICER EVEN BEFORE ISSUING THE NOTICE APPEARED TO HAVE NOT EXAMINED THE FACTS PROPERLY AND CONCLUDED ON SURMISE THAT UNIT-II WAS MERE EXPANSION OF UNIT-I AND COULD NOT INDEPENDENTLY FUNCTION, FOR WHICH IT WAS SURMISED THAT THE ASSESSEE DID NOT HAVE ANY LICENSE FROM THE MINISTRY OF SMALL 3CALE INDUSTRIES FOR UNIT-IL. THE SO CALLED SURMISE WAS UNCALLED FOR IN THAT SUCH LICENSE WAS NOT REQUIRED TO BE OBTAINED BY THE ASSESSEE. FURTHER WHEN THE DIRECTOR WAS QUERIED IN THIS REGARD FOR THE PURPOSE OF ASSESSMENT FOR THE ASSESSMENT YEAR 2008-09, HE HAD REPLIED THAT NO SUCH REQUIREMENT. THERE BEING NO. CONTRARY PROVISION BROUGHT OUT, THE FORMATION OF OPINION WAS WITHOUT BASIS AND WOULD NOT CONSTITUTE REASON FOR REOPENING THE ASSESSMENT U/S. 147 OF THE ACT. FURTHER, THE ASSESSING AUTHORITY HAD NOT BROUGHT OUT ANY REASONS RECORDED TO HOLD THAT UNIT-IL WAS NOT INDEPENDENTLY VIABLE. ON THE OTHER HAND UNIT-IL FUNCTIONS INDEPENDENTLY DE HORSE THE UNIT-I. THE PRODUCT MANUFACTURED BY UNIT-LI IS TOTALLY DIFFERENT FROM THE PRODUCT MANUFACTURED BY UNIT-I. SECONDLY UNIT-IL HAD SATISFIED ALL THE CONDITIONS PROVIDED U/S.80-IB OF THE ACT. THE ASSESSING AUTHORITY WHILE CONCLUDING THE ORIGINAL ASSESSMENT HAD ACCEPTED THE CLAIM OF THE ASSESSEE FOR HAVING SATISFIED WITH THE MATERIALS AND EVIDENCE FURNISHED. IN THE CIRCUMSTANCES, ON MERE CHANGE OF OPINION THE ASSESSMENT MADE WAS NOT REQUIRED TO BE REOPENED U/S. 147 OF THE ACT AS HELD BY THE HONBLE SUPREME COURT AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. FORAMER FRANCE REPORTED IN 264 ITR 566 (SC); CIT VS. KELVINATOR OF INDIA LTD., (DEL) (F.B.) 256 ITR 1 WHICH WAS AFFIRMED BY THE HONBLE SUPREME COURT REPORTED IN 320 ITR561. THUS, APART THE HONBLE BOMBAY HIGH COURT HAD ALSO HELD IN THE CASE OF ASIAN PAINTS LTD., VS. DCIT REPORTED IN 308 ITR 195(BOM) AND PRASHANT S.JOSHI VS. ITO 324 ITR 154 (BORN) THAT THE REOPENING ON MERE CHANGE OF OPINION IS BAD IN LAW. IN FACT FOR THE ASSESSMENT YEAR 2002-03 BEING THE INITIAL YEAR, THE MATTER WAS DELIBERATED UPON IN DETAIL AND EVEN IN THE ORDER U/S.264 OF THE ACT THE COMMISSIONER OF INCOME-TAX HAS AGREED THE EXISTENCE OF TWO UNDERTAKING ELIGIBLE FOR 80-LB EXEMPTION. IN THE CIRCUMSTANCES, THE REOPENING OF ASSESSMENT WHILE REFERRED TO THE FINDINGS FOR THE ASSESSMENT YEAR 2008-09 IS WITHOUT BASIS ESPECIALLY WHEN THE VERY FINDINGS FOR THE ASSESSMENT YEAR 2008-09 IS UNDER CHALLENGE BEFORE THE CIT(A) WHO IS YET TO HEAR THE MATTER. IN THE CIRCUMSTANCES IT IS REQUESTED THAT THE ASSESSING AUTHORITY MAY KINDLY DROP THE REASSESSMENT PROCEEDINGS INITIATED U/S.147 OF THE ACT. IN THE ALTERNATIVE IT IS PRAYED THAT WE SHOULD AWAIT FOR THE ORDER OF THE CIT(A) BEFORE PROCEEDING WITH THE ASSESSMENT. 11. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. THANKING YOU, YOURS FAITHFULLY, FOR APEX PACKING PRODUCTS PVT. LTD YATIN G. KAKODKAR DIRECTOR 9. FROM THE REPLY OF ASSESSEE AND THE DOCUMENTS ON THE RECORD SHOWS THAT UNIT-II WAS IN EXISTS AS PER THE ORDER OF COMMISSIONER OF INCOME TAX WHICH IS ON PAGE 40 OF THE PAPER BOOK NO.1. IN ASSESSMENT YEAR 2002-03 WHEREIN FIRSTLY CLAIM OF ADJUSTMENT OF LOSS OF UNIT-II WAS CLAIMED AGAINST THE PROFIT OF UNIT-I. WE FIND THAT ASSESSMENT YEAR 2002-03 IS NOT REOPENED. SECONDLY, WE FIND THAT FOR ASSESSMENT YEAR 2004-05, THE ASSESSMENT WAS COMPLETED ON 08.12.2006 AND IT IS REQUIRED TO BE REOPENED BEFORE 31 ST MARCH 2009, BUT THE ASSESSMENT WAS REOPENED ON OCTOBER 31ST, 2011 BY ISSUING THE NOTICE ON 24.3.2011. THEREFORE, THE ASSESSMENT IS REOPENED AFTER FOUR YEARS. IF THE ASSESSMENT IS REOPENED AFTER FOUR YEARS THERE ARE SETTLED LAW AND IN THIS RESPECT SECTION 149 SAYS THAT NO NOTICE U/S.148 BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR, IF THE FOUR YEARS HAVE LAPSED FROM THE END OF RELEVANT ASSESSMENT YEAR UNLESS THE CASE FALLS UNDER CLAUSE-B WHICH SAYS THAT IF THE FOUR YEARS BUT NOT MORE THAN SIX YEARS HAVE BEEN LAPSED FROM THE END OF RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS BEEN ESCAPED ASSESSMENT AMOUNT OR LIKELY TO AN AMOUNT OF RS. 1 LAC OR MORE FOR THAT YEAR. WE FIND THAT THIS CONTENTION IS SATISFIED AND SECONDLY IF THE FOUR YEARS BUT NOT MORE THAN 6 YEARS IF THE PROPERTY IS LOCATED OUTSIDE IN INDIA. IN OUR OPINION, THIS CLAUSE HAS BEEN INSERTED W.E.F 01.07.2012. THEREFORE, IT IS NOT APPLICABLE OF THIS QUESTION. THEREFORE, IN OUR OPINION, IN THIS CASE UNDER CONSIDERATION FOR ASSESSMENT YEAR 04-05 THE REOPEN ASSESSMENT IS BARRED BY LIMITATION, THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE ASSESSMENT FOR A.Y. 04-05 IS BARRED BY LIMITATION. SIMILARLY FOR A.Y. 05-06, THE ASSESSMENT WAS COMPLETED ON 20.11.2007. THE 12. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. ASSESSMENT WAS REQUIRED TO BE REOPENED ON OR BEFORE 31 ST MARCH 2010 AND THE ASSESSMENT WAS REOPENED ON 24 MARCH, 2011. THEREFORE, THE REOPENING OF THE ASSESSMENT FOR 04-05 IS BAD IN LAW AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA 320 ITR 561. THEREFORE, WE HOLD THAT THE NOTICE ISSUED U/S. 148 OF THE ACT FOR ASSESSMENT YEAR 2004-05 AND 2005-06 IS BARRED BY LIMITATION. IN THE RESULT, WE ALLOW THE C.O. NOS. 27 & 28 FOR ASSESSMENT YEAR 2004-05 AND WE HOLD THAT THE ASSESSMENT HAS BEEN REOPENED AFTER THE LAPSE OF PERIOD OF LIMITATION, THEREFORE, BOTH ASSESSMENTS ARE QUASHED AND DECLARE VOID. IN THE RESULT, BOTH C.OS. ARE ALLOWED. 10. WE DEAL C.O. NO. 29 & 30 FOR THE ASSESSMENT YEAR 2006-07 AND 2007-08 WHICH GOES TO THE ROOT OF THE CASE. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WAS HAVING SECOND UNIT AND HE WAS CLAIMING DEDUCTION U/S. 80IB (4) ON THIS UNIT THE ASSESSEE CLAIMED DEDUCTION OF THE UNIT-II IN A.Y. 2002-03 AND IN ASSESSMENT YEAR 2002-03 THE ASSESSING OFFICER HAS ACCEPTED THAT ASSESSEE WAS HAVING TWO UNITS TO SEPARATE UNIT MANUFACTURING OF PAPER WRAPPERS AND FILM WRAPPERS RESPECTIVELY. THIS FACT HAS BEEN ADMITTED BY THE COMMISSIONER OF INCOME TAX WHICH IS THE ORDER U/S 264 OF THE INCOME TAX ACT WHICH IS ON PAGE 40 OF THE PAPER BOOK 1(1). FROM ABOVE IT IS IN THE NOTICE OF THE DEPARTMENT THAT ASSESSEE WAS HAVING SEPARATE UNIT NO.2. THE ASSESSEE WAS ALLOTTED SEPARATE PLOT GOA-DAMAN & DIU INDUSTRIAL DEVELOPMENT CORPORATION ON 15.3.1995. THE ORIGINAL ALLOTMENTS LETTER WAS PRODUCED TO SHOW THAT UNIT II WAS SEPARATE UNIT FROM UNIT-I. THE ASSESSEE WAS HANDED OVER THIS PLOT ON 18.3.1995 AND THE DAMAN DIU INDUSTRIAL DEVELOPMENT CORPORATION HAS ALSO GIVEN IN WRITING THAT PLOT NO. 187 WAS ALLOTTED TO THE ASSESSEE. THE ASSESSEE WAS MANUFACTURING OF PLASTIC WRAPPERS IN THE INDUSTRIAL UNDERTAKING. THE ASSESSEE HAS EARLIER DISCLOSED THIS FACT TO THE DEPARTMENT AND DEPARTMENT HAS ACCEPTED THE FACT THAT UNIT-II WAS 13. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. IN EXISTING RIGHT FROM BEGINNING. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE GROUND THAT UNIT-II IS NOT A NEW INDUSTRIAL UNDERTAKING AND ACCORDINGLY NOT ELIGIBLE FOR DEDUCTION U/S 80IB(4) OF THE ACT. THE ASSESSING OFFICER HAS REOPENED THIS ASSESSMENT ONLY ON THE BASIS OF THAT THE ASSESSEE WAS NOT HAVING SEPARATE LICENCE FOR OPERATING UNIT-2 THEREFORE, IT WAS NOT INDEPENDENT UNDERTAKING. WE HAS GONE THROUGH THE ORDER OF THE COMMISSIONER ON PAGE 40 OF PAPER BOOK NO. 1 WHEREIN THE DEPARTMENT HAS ACCEPTED THAT UNIT- II IN EXISTENCE IN A.Y. 2002-2003. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ORDER NEARLY ON THE CHANGE OF OPINION THEREFORE, AS PER THE DECISION OF VARIOUS HIGH COURT AND SUPREME COURT PARTICULARLY. IN ASSESSMENT YEAR 2002-03, THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT THERE WAS EXISTENCE OF UNIT-I AND II. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE COMPANY WAS HAVING UNIT-1 IN WHICH HE WAS MANUFACTURING OF PAPER WRAPPER AND FILM PACKING WRAPPERS . AND UNIT-II IN WHICH HE IS MANUFACTURING ELIMINATED PLASTIC WRAPPERS. THE ASSESSEE HAS CLAIMED THE BENEFIT U/S. 80IB OF THE ACT AGAINST THE PROFIT OF UNIT-II SINCE THE ASSESSMENT YEAR 2002-03 AND HE HAS CONSIDERED AND ALLOWED UP TO ASSESSMENT YEAR 2007-08. WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS MERELY CHANGED OPINION THAT UNIT-II IS NOT A NEW INDUSTRIAL UNDERTAKING AND UNIT-II IS EXTENSION OF UNIT-I. THE ASSESSEE WAS HAVING BOTH THE UNIT BUT IT WAS NOT EXTENSION OF UNIT I THEREFORE, IN OUR OPINION, AO IS NOT JUSTIFIED IN HOLDING THAT THERE WAS NO NEW MATERIAL WHICH SHOWS THAT UNIT-II IS EXTENSION OF UNIT-I. WE FIND THAT DURING THE COURSE OF HEARING, IT WAS BROUGHT TO OUR NOTICE THAT THE UNIT-II WAS ON PLOT NO. 187 AND IT HAS STARTED COMMERCIAL PRODUCTION IN ASSESSMENT YEAR 2001-02. THE ASSESSEE HAS ALSO OBTAINED REGISTRATION WITH CENTRAL EXCISE DEPARTMENT AND WAS ALLOTTED ECC NO. 2001050952 FOR UNIT NO.1 AND FOR UNIT II. THE ASSESSEE WAS ALLOTTED REGISTRATION NO. AACCA3426BXM 001 IN FORM RC DATED 28.12.2001. THE 14. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. ASSESSEE HAS ALSO OBTAINED THE CERTIFICATE OF REGISTRATION, BEFORE THE CONCERNED SALES TAX OFFICER. THEREFORE, IN OUR OPINION, THE UNIT-2 IS SEPARATE INDUSTRIAL UNDERTAKING THEREFORE, THE ASSESSING OFFICER HAS CONFIRMED AND IT IS MERELY CHANGE OF OPINION THE ASSESSMENT CANNOT BE REOPENED. 11. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 27.09.2008 DECLARING TOTAL INCOME. THE ASSESSEE IS ENGAGED IN BUSINESS OF MANUFACTURING OF (I) WAX COATED WRAPPERS FOR PARLE BISCUITS AND (II) LAMINATED PLASTIC WRAPPERS UNDER TWO SEPARATE INDUSTRIAL UNDERTAKING VIZ., UNIT-1 AND UNIT-II. IN UNIT-I, IT MANUFACTURED WAS COATED WRAPPERS WHEREAS IN UNIT-II, IT MANUFACTURED LAMINATED PLASTIC WRAPPERS. UNIT-II WAS ESTABLISHED IN 2002-03 WAS THE FIRST ASSESSMENT YEAR OF THE UNDERTAKING. THE ASSESSEE CLAIMED THE BENEFIT U/S. 80IB OF THE ACT AGAINST THE PROFITS OF UNIT-II, SINCE THE ASSESSMENT YEAR 2002-03 AND THE SAME HAS BEEN CONSIDERED AND ALLOWED UPTO ASSESSMENT YEAR 2007-08. THE DETAILS OF THE ESTABLISHMENT OF THE INDUSTRIAL UNDERTAKING WAS CALLED FOR AND AFTER SATISFYING WITH THE CLAIM OF THE APPELLANT AND AFTER SATISFYING WITH THE COMPLIANCE U/S. 80IB OF THE ACT, THE BENEFIT WAS EXTENDED TO THE ASSESSEE. SIMILARLY, IN ASSESSMENT YEAR 2008-09 THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(4) OF THE ACT TO THE TUNE OF RS. 1.13,68,166/- FROM THE PROFITS OF UNIT-II BEING ITS 7 TH YEAR OF OPERATION. IN THE 7 TH YEAR THE ASSESSING OFFICER HAS VERIFIED THE CLAIM AND HE HAS CAME TO THE CONCLUSION THAT UNIT-II WAS NOT SEPARATE INDUSTRIAL UNDERTAKING AND IT WAS ONLY AN EXTENSION OF UNIT-I. THE UNIT-II IS SEPARATE INDUSTRIAL UNDERTAKING AND WHICH WAS MANUFACTURING A DIFFERENT PRODUCTS ALL TOGETHER. IN ASSESSMENT YEAR 2002-03, THE ASSESSING OFFICER HAS EXAMINED THE CLAIM IN DETAIL AND IN ASSESSMENT YEAR 2002-2003 THE EXISTENCE OF THE INDEPENDENT INDUSTRIAL UNDERTAKING WAS ACCEPTED AND PROFIT DERIVED 15. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. THEREFROM HAD BEEN CONSIDERED FOR DEDUCTION UNDER 80IB OF THE ACT. EVEN IN THE REVISION PETITION FILED U/S. 264 OF THE ACT, THE COMMISSIONER HAS CATEGORICALLY ADMITTED THE EXISTENCE OF INDEPENDENT UNIT-II. THEREAFTER, THE BENEFIT OF SECTION 80IB WAS GRANTED RIGHT FROM THE ASSESSMENT YEAR 2003-04 UP TO ASSESSMENT YEAR 2007-08. WE FIND THAT UNIT-II WAS INDEPENDENT UNIT AND IT HAS BEEN ACCEPTED BY THE DEPARTMENT. WE FIND THAT SECTION 80IB (4) WHICH READ AS UNDER: THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUSTRIAL UNDERTAKING IN AN INDUSTRIALLY BACKWARD STATE SPECIFIED IN THE EIGHT SCHEDULE SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR FIVE ASSESSMENT YEARS BEGINNING WITH THE INITIAL ASSESSMENT YEAR AND THEREAFTER TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSMENT YEAR AND THEREAFTER TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING: PROVIDED THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS (OR TWELVE CONSECUTIVE ASSESSMENT YEARS WHERE THE ASSESSEE IS A CO- OPERATIVE SOCIETY) SUBJECT TO FULFILMENT OF THE CONDITION THAT IT BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR TO OPERATE ITS COLD STORAGE PLANT OR PLANTS DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 1993 AND ENDING ON THE 31 ST DAY OF MARCH, 2004. FROM THE ABOVE SECTION IT IS CLEAR THAT ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 80IB (4) FOR NOT MORE THAN 10 CONSECUTIVE YEARS. IN THE INSTANT CASE, THE FIRST YEAR DEDUCTION U/S. 80IB (4) WAS ALLOWED IN ASSESSMENT YEAR 2002-03. IN ASSESSMENT YEAR 2002-03 THE BENEFIT WAS ALLOWED AND IT WAS NOT REOPENED OR IT IS NOT UNDER SCRUTINY. THEREFORE, WHEN THE BENEFIT WAS ALLOWED IN FIRST ASSESSMENT YEAR, IT CANNOT BE DISALLOWED IN SUBSEQUENT YEARS. THE FIRST YEAR IS IN WHICH THE ASSESSEE HAS TO PROVE THE EXISTENCE OF INDEPENDENT INDUSTRIAL UNDERTAKING AND IF IT IS ACCEPTED, THE PROFIT DERIVED THEREFROM HAS TO BE CONSIDERED FOR DEDUCTION U/S. 80IB (4) OF THE ACT. IN THE INSTANT CASE, WE FIND THAT THE ASSESSING OFFICER HAS ACCEPTED UNIT-II AS INDUSTRIAL UNDERTAKING IN ASSESSMENT YEAR 2002-03 AND RELIEF REMAINS UNDISTURBED. THE AO CANNOT ON THE SAME SET OF FACTS DENY DEDUCTION FOR THE SUBSEQUENT YEARS. THE GUJRAT HIGH 16. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. COURT IN THE CASE SAURASHTRA CEMENT LTD. VS. CIT 123 ITR 669 HAS HELD THAT THERE IS NO PROVISION OF WITHDRAWAL OF DEDUCTION ONCE GRANTED AND SUCH DEDUCTION CANNOT BE DENIED IN SUBSEQUENT YEARS UNLESS THE DEDUCTION ALLOWED ON THE SAME GROUND IN THE EARLIER YEAR IS WITHDRAWN. WE FIND THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PAUL BROTHERS, 216 ITR 548 HAS HELD THAT ONCE THE DEDUCTION IS ALLOWED AND IT IS NOT WITHDRAWN FOR THE EARLIER YEAR, IT CANNOT BE WITHHELD FOR SUBSEQUENT YEARS. SIMILARLY THE BOMBAY HIGH COURT WHICH IS JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. WESTERN OUTDOOR INTERACTIVE LIMITED HAS HELD AS UNDER: IN BOTH THE MATTER OF COMMISSIONER OF INCOME TAX V. PAUL BROTHERS REPORTED IN 216 ITR 548 AND M/S. DIRECT INFORMATION PRIVATE LTD. V. ITO DATED 29/9/2011 IN WRIT PETITION NO.1479/2011, THIS COURT HAS HELD THAT WHERE A BENEFIT OF DEDUCTION IS AVAILABLE FOR A PARTICULAR NUMBER OF YEARS ON SATISFACTION OF CERTAIN CONDITIONS UNDER THE PROVISIONS OF THE INCOME TAX ACT, THEN UNLESS RELIEF GRANTED FOR THE FIRST ASSESSMENT YEAR IN WHICH THE CLAIM WAS MADE AND ACCEPTED IS WITHDRAWN OR SET ASIDE, THE INCOME TAX OFFICER CANNOT WITHDRAW THE RELIEF FOR SUBSEQUENT YEARS. MORE PARTICULARLY SO, WHEN THE REVENUE HAS NOT EVEN SUGGESTED THAT THERE WAS ANY CHANGE IN THE FACTS WARRANTING A DIFFERENT VIEW FOR SUBSEQUENT YEARS. IN THIS CASE FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 THE RELIEF GRANTED U/S. 10A OF THE ACT TO SEEPZ UNIT HAS NOT BEEN WITHDRAWN. THERE IS NO CHANGE IN THE FACTS WHICH WERE IN EXISTENCE DURING THE ASSESSMENT YEAR 2000-01 VIS--VIS THE CLAIM TO EXEMPTION U/S. 10A OF THE ACT. THEREFORE, IT IS NOT OPEN TO THE DEPARTMENT TO DENY THE BENEFIT OF S. 10A FOR SUBSEQUENT ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2002-03 AND 2003-04 AND 2004-05. BESIDES THAT, ON CONSIDERATION OF THE FACTS INVOLVED BOTH THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL HAVE RECORDED A FINDING OF FACT THAT THE SEEPZ UNIT IS NOT FORMED BY SPLITTING UP OF THE FIRST UNIT. WE RESPECTFULLY FOLLOWING THE ABOVE DECISION, THE FIRST INITIAL ASSESSMENT YEAR OF INDUSTRIAL UNDERTAKING WAS 2002-03. WHEREIN IT IS HELD THAT THERE WAS UNIT-2 AND DEDUCTION WAS ALLOWED AND SAID DEDUCTION U/S. 80IB(4) HAS NOT BEEN WITHDRAWN FOR THAT YEAR. THEREFORE, DEDUCTION U/S 80IB(4) FOR SUBSEQUENT YEARS CANNOT BE WITHDRAWN. THEREFORE, WE ARE OF THE VIEW THAT FOR ASSESSMENT YEAR 2006-07 AND 2007-08, THE ASSESSMENT WAS REOPENED ON A MERE CHANGE OF 17. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. OPINION, THEREFORE, THE ASSESSMENT MADE AFTER THE REOPENING IS NOT VALID AND WE HOLD THAT THERE IS NO ESCAPED ASSESSMENT IN THE EYE OF LAW. THE ISSUE IN CONTROVERSY IS ALSO COVERED BY THE DECISION OF BOMBAY HIGH COURT IN CASE OF CIT VS. WESTERN OUTDOOR INTERACTIVE PVT. LTD. 349 ITR 309, WHEREIN THE BOMBAY JURISDICTIONAL HIGH HAS RELIED UPON THE DECISION OF INCOME TAX VS. PAUL BROTHERS REPORTED IN 216 ITR 548. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT YEAR ON THE SIMILAR FACTS AND IT IS MERELY CHANGE OF OPINION IN THE EYE OF LAW. IN THE RESULT, THE C.O. FOR ASSESSMENT YEAR 2006-07 AND 2007-08 ARE ALLOWED. 12. IN ALL ITA NOS. 145 TO 150 FOR ASSESSMENT YEAR 2004-05 TO 2009-10, THE COMMON ISSUES RAISED BY THE DEPARTMENT WHICH READ AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES APPEAL BY ALLOWING THE CLAIM OF DEDUCTION CLAIMED U/S. 80IB FOR UNIT II, WHICH IS JUST AN EXPANSION OF EXISTING UNIT 1 WITHOUT CONSIDERING THE MERIT OF THE CASE. 2. THE LEARNED CIT(A), HAS ERRED IN SAYING THAT UNIT-11 IS AN INDEPENDENT MANUFACTURING UNIT ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE I.T. ACT AND ALLOWED THE DEDUCTION U/S. 80IB(4) ON PROFIT OF SAID UNIT. 13. THE BRIEF FACTS IN ALL THESE CASES ARE THAT THE ASSESSEE COMPANY CLAIMED TO BE ENGAGED IN MANUFACTURING OF PACKING MATERIAL FROM PAPER (UNIT-1) AND LAMINATED PACKAGING MATERIAL (INCLUDING WRAPPERS) FROM PLASTICS (UNIT-II). THE ASSESSEE CLAIMED DEDUCTION U/S. 80 IB(4) IN RESPECT PACKAGING MATERIAL AND THE YEAR UNDER CONSIDERATION WAS THE 7 TH BY HER, YEAR OF OPERATION. THE AO HAS CARRIED OUT THE INSPECTION OF THE ASSESSEES PREMISES CONDUCTED ON 26.11.2010, IT WAS FOUND THAT (UNIT-II) WHICH IS CLAIMED TO BE SEPARATE INDUSTRIAL UNIT BY THE ASSESSEE FOR WHICH THE DEDUCTION BEING CLAIMED U/S. 80IB(4), WAS OPERATING IN THE SAME BUILDING, WHERE UNIT-1 IS OPERATIONAL. ON GOING THROUGH THE VERIFICATION, IT WAS FOUND THAT UNIT-II DOES NOT HAVE ANY SEPARATE BUILDING OF ITS OWN FOR FUNCTIONING. THE BUILDING OF UNIT-I WAS EXTENDED BY THE ASSESSEE TO 18. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. ACCOMMODATE MACHINES OF UNIT-II. THE ASSESSING OFFICER DID NOT ALLOW THE DEDUCTION U/S 80IB (4). THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE AND AFTER CONSIDERING THE VARIOUS STATEMENTS THE ASSESSING OFFICER WAS OF A VIEW THAT UNIT II IS NOT INDEPENDENT UNIT BUT IT IS UNIT-I ONLY AND DISALLOWED THE CLAIM OF 80IB IN RESPECT OF ASSESSMENT ORDER WHICH READ AS UNDER: 2004-05 - RS. 1,34,19,907/- 2005-06- RS. 1,75,16,190/- 2006-07- RS.2,41,87,082/- 2007-08- RS. 3,83,97,600/- 2008-09- RS. 3,44,50,960/- 2009-09-RS. 3,44,50,960/- 14. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER:- I HAVE GONE THROUGH THE ASSESSMENT ORDER, VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE AO AND THE APPELLANT AND DETAILED WRITTEN SUBMISSION FILED BY THE APPELLANT. THE AO DENIED THE EXISTENCE OF INDEPENDENT UNIT-IL ON THE BASIS THAT THE TWO PLOTS ARE CO-EXISTENT, NO SEPARATE LICENSE FROM GOVT. AUTHORITIES WERE OBTAINED, THERE IS COMMON ROOF AND ALSO THAT THERE IS COMMON MANAGEMENT. THE AO ALSO CONCLUDED THAT UNIT-IT CANNOT FUNCTION INDEPENDENTLY AND THEREFORE, UNIT-TI IS NOTHING, BUT AN EXTENSION OF UNIT- I. ON THE OTHER HAND, THE APPELLANT CONTENDED THAT UNIT- I AND UNIT- II CAME INTO EXISTENCE AT DIFFERENT TIMES, HAVE MANUFACTURING FACILITY FOR TWO COMPLETELY DIFFERENT PRODUCTS HAVING DIFFERENT CLIEITE1E. THE MACHINERIES ARE TOTALLY DIFFERENT AND ONE CANNOT BE USED TO MANUFACTURE THE PRODUCT OF OTHER. THEY ARE CAPABLE OF FUNCTIONING INDEPENDENTLY AND IN FACT, THEY ARE FUNCTIONING INDEPENDENTLY. HAVING COMMON MANAGEMENT AND FEW OTHER COMMON FACILITIES, DO NOT NEGATE THE INDEPENDENT IDENTITIES OF BOTH THE UNITS. THEREFORE, IN VIEW OF THE FACTS OF THIS CASE, IN MY OPINION, UNIT-II IS AN INDEPENDENT MANUFACTURING UNIT, CONSTRUCTED BY INVESTING A MUCH HIGHER AMOUNT COMPARED TO UNIT-I, WHICH IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 80IB(4). THE AO IS THEREFORE DIRECTED TO ALLOW THE DEDUCTION U/S. 80IB(4) TO THE APPELLANT ON UNIT-II FOR A.Y. 2008-09, 2009-10, 2004-05, 2005-06, 2006-07 AND 2007-08. THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED ACCORDINGLY. 15. WE HAVE GONE THROUGH THE ORDER OF THE CIT(A) THE CIT(A) HAS RELIED UPON VARIOUS JUDICIAL PRONOUNCEMENT. THE MAIN CONTROVERSY IS WHETHER THE ASSESSEE HAVE SEPARATE UNIT BUT MAINTAINING THE COMMON RECORD OF EXCISE DUTY, SALES TAX 19. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. SERVICE TAX, AND HAVING COMMON REGISTRATION AND NO SEPARATE PERMISSION FROM POLLUTION DEPARTMENT HAVING A COMMON ELECTRICITY CONNECTION CAN BE GRANTED DEDUCTION U/S. 80IB(4). WE FIND THAT IN ABOVE CIRCUMSTANCES THE CIT(A) HAS RELIED UPON THE DECISION WHICH IS IN FAVOUR OF THE ASSESSEE. DURING THE COURSE OF HEARING, LEARNED DR COULD NOT PRODUCE ANY CONTRARY DECISION AGAINST THE FINDING OF THE CIT(A) THEREFORE, WE ENDORSE THE ACTION OF THE CIT(A). WE ALSO GOT SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF FIL INDUSTRIAL LIMITED VS. COMMISSIONER OF INCOME TAX REPORTED IN 56 SOT 52 (AMRITSAR) WHEREIN IT IS HELD AS UNDER: THERE IS NO REQUIREMENT FOR THE ASSESSEE TO OBTAIN SEPARATE REGISTRATION FOR EACH OF THE THREE INDUSTRIAL UNDERTAKINGS, HAVING ESTABLISHED NEW INDUSTRIAL UNDERTAKING BY WAY OF FRESH INVESTMENT OF BUILDING AND PLANT & MACHINERY AND THEREFORE, IT CANNOT BE HELD THAT UNDERTAKINGS ARE NOT ELIGIBLE TO CLAIM DEDUCTION U/S 801B OF THE ACT. DEDUCTION U/S 801BREFUND OF EXCISE DUTYALLOWABILITY--AO OBSERVED THAT ASSESSEE WAS NOT ELIGIBLE FOR REFUND OF EXCISE DUTY BEING INCOME NOT DERIVED FROM INDUSTRIAL UNDERTAKING BUT INCOME ATTRIBUTABLE TO RECEIPT OF EXCISE DUTY REFUND FROM INDUSTRIAL UNDERTAKINGHELD, EXCISE DUTY REFUND WAS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXEDASSESSEES APPEAL ALLOWED HELD: ISSUE STANDS COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF JAMMU & KASHMIR, IN THE CASE OF SHREE BALAJI ALLOWS V. CIT AND ANOTHER (2011) 333 ITR 335 (J&K) WHERE IT HAS BEEN HELD THAT THE EXCISE DUTY REFUND IS TO BE TREATED AS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXED. RESPECTFULLY FOLLOWING THE SAID JUDGMENT OF HONBLE J & K HIGH COURT, REFUND OF EXCISE DUTY OF RS.4,66,88,681/- IS HELD TO BE AS CAPITAL RECEIPT. THIS GROUND OF THE ASSESSEE WAS ALLOWED ACCORDINGLY. THE TRIBUNAL HAS CONSIDERED THE VARIOUS DECISION AND THE CIT(A) HAS HELD THAT ASSESSEE IS ENTITLED FOR THE DEDUCTION AND HE ALLOWED ACCORDINGLY AND HE DIRECTED AO TO ALLOW DEDUCTION U/S. 80IB(4) TO THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 2005-06, 2006-07,2007-08, 2008-09 AND 2009-10. WE FIND THAT IN THE CASE OF CIT VS. PAUL BROTHERS IN 216 ITR 548, THE BOMBAY HIGH COURT HAS TAKEN THE VIEW THAT IF THE ASSESSMENT YEAR IS INITIAL ASSESSMENT WHICH IS IN THIS CASE THE FIRST ASSESSMENT YEAR IS 2002-03 AND WHICH WAS NOT REOPENED. THEREFORE, ASSESSEE IS ELIGIBLE FOR DEDUCTION IN RESPECT OF ALL REST OF THE YEARS. 20. ITA NOS. 145 TO 150/PNJ/2013 (A.Y.2004-05 TO 2009-10) C.OS NO. 27 TO 30/PNJ/2013, ACIT VS. M/S. APEX PACKING PRODUCTS (P) LTD. THEREFORE, ON THIS GROUND, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB (4) ON THE PROFIT OF BUSINESS FOR ALL THE ASSESSMENT YEARS FROM 2004-05 TO 2009-10 ALSO. THEREFORE, ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB(4) ON MERIT AND WE DIRECT AO TO ALLOW DEDUCTION U/S 80IB(4) FOR ALL THE ASSESSMENT YEARS FROM 2004-05 TO 2009-10. 11. IN THE RESULT, ALL FOUR C.O ARE ALLOWED AND DEPARTMENT APPEALS ARE DISMISSED FOR ALL THE ASSESSMENT YEARS. ORDER PRONOUNCED IN THE OPEN COURT ON 03. 01.2014 SD/- SD/- ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 03.01.2014 P.S.- *PK* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER SR. PRIVATE SECRETARY ITAT, PANAJI BENCH, PANAJI.
