Nirma Ltd., Ahmedabad V. The ACIT., Cent.Circle-1(1), Ahmedabad

ITA 1002/AHD/2006

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73071 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 06-07-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 24-04-2006
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Additional evidence
• Section: 143(3); 147

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD . .. . . . . . , , , , ! '# ! '# ! '# ! '#, , , , $ $ $ $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 1002/AHD/2006 & '& & '& & '& & '& / // / ASSESSMENT YEAR 2000-01 NIRMA LIMITED, AHMEDABAD. PAN: AAACN5351J VS ACIT, CENTRAL CIRCLE-1(1), AHMEDABAD. ()/ APPELLANT *+() / RESPONDENT REVENUE BY : SH. SUBHASH BAINS, SR. D.R. ASSESSEE(S) BY : SH. S.N. SOPARKAR, AR !, - #./ // / DATE OF HEARING : 30/01/2014 /0' - #. / DATE OF PRONOUNCEMENT : 26/02/2014 1 1 1 1/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-I, AHMEDABAD DATED 08.02.2006. 2. GROUND NOS. 1 AND 6 OF THE APPEAL ARE GENERAL IN NATURE AND HENCE REQUIRE NO SEPARATE ADJUDICATION BY US. 3. GROUND NO. 2 READS AS UNDER: IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELL ANT'S CASE, THE ID. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ORDER OF AO U/S . 147 FOR RE-OPENING THE COMPLETED ASSESSMENT WITHOUT MEETING WITH THE CONDI TIONS PRECEDENT FOR RE- OPENING THE ASSESSMENT AND COMPLYING TO OBJECTIONS RAISED BY THE APPELLANT. AS THERE HAS NOT BEEN ANY ESCAPEMENT OF INCOME CHAR GEABLE TO TAX, WHICH HAS OCCURRED BY THE REASON OF EITHER OMISSION OR FA ILURE ON THE PART OF ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 2 - APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT, PROCEEDINGS INITIATED BEING VOID AB INI TIO AND DESERVE TO BE QUASHED. GROUND NO. 3 READS AS UNDER: IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE, THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ASSESSMENT U/S. 143(3) R.W.S. SEC. 147OF THE IT ACT WHICH IS BASED ON BASED ON THE SAME FACTS WHICH THE APPELLANT HAD FURNISHED DURING THE ORIGINAL ASSESSMENT, AND THE R E-ASSESSMENT MADE BASED ON THE SAME FACTS AMOUNTS TO CHANGE OF OPINIO N. GROUND NO. 5 READS AS UNDER: IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN NOT INTERFERING ON THE GROUND RELATING TO INITIATING V PENALTY PROCEEDINGS U/S.271(L)(C) OF IT. ACT. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE ABOVE CITED GROUNDS OF APPEAL. HE NCE, THEY ARE DISMISSED FOR WANT OF PROSECUTION. 4. THE ONLY EFFECTIVE GROUND REMAINING IN THIS APPE AL IS GROUND NO. 4 WHICH READS AS UNDER: IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOW ANCE OF DEDUCTION U/S.80IA ON THE PROFITS DERIVED FROM TRIKAMPURA DIVISION. 5. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION U /S 80IA IN RESPECT OF THE INCOME RECEIVED FROM TRIKAMPURA DIVISION ON THE FOLLOWING GROUNDS: (I) THE TRIKAMPURA DIVISION HAS CEASED TO BE AN IND USTRIAL UNDERTAKING W.E.F. 30-11-1999 AS FROM THAT DATE ALL ITS EMPLOYEES RESI GNED, ALL OF ITS MACHINERY FACTORY WERE LEASED OUT TO M/S. NISARG ENTERPRISE P . LTD. THUS WHAT REMAINED AFTER 30-11-1999 WAS ONLY THE HOLLOW STRUCTURE OF I NDUSTRIAL UNDERTAKING ON PAPER. (II) IN NO CASE TIN EMPLOYEE OF THE CONTRACTUAL AGE NT OF THE UNDERTAKING QUALIFIES THE TEST OF THE SECTION AND THAT EMPLOYER-EMPLOYEE RELATIONSHIP IS NECESSARY. (III) FROM A PERUSAL OF THE CONTRACT BETWEEN THE AS SESSES COMPANY AND THE JOB WORKER, IT IS CLEAR THAT THE JOB WORKER IS THE AGEN T OF THE ASSESSEE COMPANY AS A WHOLE WHICH APART FROM THE TRIKAMPURA DIVISION HAS MANY OTHER UNITS ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 3 - AND THE ASSESSEE COMPANY HAS NOT BEEN ABLE TO ESTAB LISH THAT THE JOB WORKER WAS THE AGENT OF THE SPECIFIC TRIKAMPURA DIVISION U NIT ELIGIBLE FOR DEDUCTION MUTER SECTION 80-IB. (IV) FROM THE PERUSAL OF THE CONTRACT BETWEEN THE A SSESSEE COMPANY AND THE JOB WORKER DATED 25.11.1999, IT IS CLEAR THAT THE CONTR ACT IS ONE OF LICENCING OF THE ASSESSEE COMPANY'S FACILITIES INCLUDING MACHINE RY TO THE JOB WORKER. IN NO CASE CAN THE MANUFACTURING ACTIVITIES CARRIED OU T BY THE JOB WORKER BE SAID TO BE THE MANUFACTURING ACTIVITY OF THE ASSESS EE COMPANY. 5. THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM T HE ASSESSING OFFICER ON 27.01.2006 AND IN THE REMAND REPORT OF THE ASSES SING OFFICER RECEIVED ON 02.02.2006, THE ASSESSING OFFICER SUBMI TTED AS UNDER: IN THIS REGARD, IT IS SUBMITTED THAT THE STATEMENT OF THE TWO PERSONS WHO HAVE FILED THE AFFIDAVITS AND WHOSE STATEMENTS HAVE BEEN RECORDED REVEAL THE FOLLOWING FACTS: I) THE EMPLOYEES OF NIRMA LTD. GO TO THE PREMISES OF NISARG ENTERPRISE MAINLY FOR CHECKING THE QUALITY OF THE DETERGENT. WHILE CHECKING THE QUALITY OF THE DETERGENT, MAINLY THE MOISTURE OF THE DETERGENT IS CHECKED. II) THE MANUFACTURING IS DONE IN TWO PROCESSES: A) THERE IS MACHINE FOR MANUFACTURING THE ACID SLU RRY WHICH IS MANUFACTURED BY MIXING THE LAB (LINEAR ALKYLE BE NZENE) AND SULPHURIC ACID IN A FIXED RATIO BY THE LABORERS OF THE NISARG ENTERPRISE. B) THE SODA ASH OF ABOUT 50 KG IS MIXED WITH ACID S LURRY WATER AID FILLER MANUALLY WITH THE HELP OF STICK BY THE LABOUR OF NISARG ENTERPRISES AND THE DETERGENT IS FORMED WITH IN 10 MINUTES OF MANUAL PROCESS. THIS POWDER IS THEN SIEV ED MANUALLY BY THE LABOURS. THE SIEVED POWDER IS PACKED MANUALL Y IN BAGS AND IS SEALED MANUALLY. III) THE AFFIDAVITS OF THE EMPLOYEES OF NIRMA LTD C LEARLY SHOW THAT THEIR JOB IS MAINLY OF CHECKING THE QUALITY OF THE DETERGENT. THE FORMULA OF MINIMUM RATIO OF RAW MATERIAL FOR MAKING THE ACID SLURRY IS WELL KNOWN TO THE LABOURS OF NISARG ENTER PRISE. THE QUALITY OF SODA ASH, WATER, ACID SLURRY AND FILLER IS ALSO WELL KNOWN TO THE LABOURS OF NISARG ENTERPRISE WHILE MIX ING THESE MANUALLY TO MANUFACTURER THE DETERGENT. IV) THE MAIN MANUFACTURING PROCESS OF MAKING THE DE TERGENT IS ENTIRELY MANUAL. THE MANUAL WORK INVOLVED IN THE MA NUFACTURING PROCESS IS MIXING, SIEVING, WEIGHING, PACKING ETC. ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 4 - V) THE LABOURS PERFORMING THE ABOVE MANUAL ACTIVITI ES ARE IN CONTROL OF NISARG ENTERPRISES. VI) THE MERE PRESENCE OF FEW EMPLOYEES OF NIRMA LTD . TO CHECK THE QUALITY OF DETERGENT PRODUCED DOES NOT AMOUNT TO CO NTROL OF NIRMA LTD. OVER NISARG ENTERPRISE. VII) ONE OF THE AFFIDAVITS IS FILED BY 'MAHESHHHAI SHAKERLAL PATEL. THIS PERSON IS 'CHEMIST' BY QUALIFICATION. A CHEMIST CAN AT BEST BE A PERSON WHO CAN TEST THE QUALITY AFTER THE MANUFACTU RING PROCESS IS COMPLETE. MOREOVER, THE QUALITY IS CHECKED FOR RANDOM SAMPLES ONLY. SO FAR AS THE MANUFACTURING BY WAY OF MIXING RAW MATERIAL IN FINAL RATIO IS CONCERNED, THE LABOURS O F NISARG ENTERPRISE ARE WELL AWARE OF THE FINAL RATIO IN WHI CH THE RAW MATERIAL IS TO BE MIXED. THE PROCESS IS SO SIMPLE A ND STANDARD THAT IT DOCS NOT REQUIRE ANY SUPERVISION. VIII) IN THIS REGARD, RELIANCE IS PLACED ON THE DECISION OF RAJASTHAN H.C. REPORTED IN 270 ITR 72 (RAJ) IN CASE OF RAJASTHAN S TEEL ROLLING MILLS (P) LTD. WHERE IT IS CLEARLY HELD THAT THE MANUFACT URING ACTIVITY CARRIED OUT BY THE THIRD PARTY ON THE LEASED OUT PREMISES D OES NOT ENTITLE THE ASSESSEE FOR DEDUCTION U/S 80I. IX) THE AFFIDAVITS AS ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, CANNOT BE ACCEPTED AS ADDITIONAL EVIDENCES AT THE STAGE OF APPELLATE PROCEEDINGS SINCE THE SAME COULD NOT BE FURNISHED B EFORE THE A.O. X) THESE AFFIDAVITS WERE NOT FILED BY THE ASSESSEE DUR ING ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE FOR A.Y. 2001-02 AND NOW THE SAME HAS BEEN FILED IN THE REOP ENING ASSESSMENT FOR A.Y.2000-01. HENCE THE SAME ARE AN AFTERTHOUGHT OF THE ASSESSEE. XI) THESE AFFIDAVITS ARE SELF SERVING DOCUMENTS AND BEAR NO EVIDENTIARY VALUE SINCE THE PERSONS WHO HAVE SUBMIT TED THESE ARE RELATED TO THE ASSESSEE COMPANY NIRMA LTD. 7. THEREAFTER, THE LD. CIT(A) CALLED FOR THE COMMEN TS OF THE ASSESSEE ON THE REMAND REPORT AND THE ASSESSEE SUBMITTED AS UND ER: WE REQUEST A REFERENCE TO REMAND REPORT DATED JANU ARY 31, 2006 FROM THE OFFICE OF ASST. COMMISSIONER OF INCOME TAX, C.C. 1( 1), COPY DELIVERED TO US ON FEBRUARY 3, 2006 ASKING US TO OFFER OUR COMMENTS THEREON. OUR COMMENTS IN THE SAID REPORT ARE GIVEN HEREUNDER: (I) AS EVIDENT FROM THE STATEMENT RECORDED ON OATH BY ID. ASST. CIT, C.C. 1(1), AHMEDABAD OF EMPLOYEES OF NIRMA LIMITED (NL) THEY ARE WORKING AT THE PREMISES OF NISARG ENTERPRISE PVT. LTD., TRIKAM PURA. IT IS EVIDENT FROM ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 5 - THE STATEMENTS RECORDED THAT SUCH EMPLOYEE OF NIRMA LTD, WORKING AT NISARG ENTERPRISE PVT. LTD., TRIKAMPURA CARRIES OUT THE FO LLOWING. (A) VERIFIES AND ANALYSES THE RAW MATERIAL PURCHASE D AND SUPPLIED BY NL TO THAT PLANT. (B) VERIFIES THAT (THE MATERIAL TAKEN FOR MIXING IS IN THE RIGHT PROPORTION AS INSTRUCTED BY THE SAID SUPERVISOR OF NL, WHO IN TURN GETS FORMULATION (MIXING PROPORTION) FROM SENI OR MANAGEMENT OF NIRMA LTD. (C) AT THE TIME OF FIRST MIXING MAKE SURE THAT THER E ARE NO LUMPS AND MATERIAL IS PROPERLY/ EVENLY MIXED. (D) ALSO MAKES SURE THAT MATERIAL IS PROPERLY SIEVE D. (E) VERIFIES THAT IF IS PROPERLY WEIGHED AS PER EAC H PACK SIZE I.E. 1 KG. OR 500GM. BAGS. (F) IT IS ALSO SUPERVISED THAT EACH BAG IS PROPERLY SEALED OTHERWISE THERE WILL BE LOSS TO THE CONSUMER WHEN IT REACHES TO ULTIMATE CONSUMER. (G) IT IS PROPERLY PACKED IN OUTER BAG WHICH IS HDP E BAGS EACH WEIGHING 25 KG. OR 50 KG. (H) THEREAFTER ON RANDOM SELECTION BASE, SAMPLES AR E TAKEN AND ARE ANALYZED FOR MOISTURE CONTENT AND CONTENT OF ACTIVE MATTER, WHICH IS IMPORTANT FACTOR FOR DETERGENCY, WHICH DET ERMINES QUANTITY. (I) IT HAS ALSO BEEN STATED THAT THE WORKERS ARE UN EDUCATED AND THEREFORE THEY HAVE TO SUPERVISE ON ABOVE COUNT TO MAKE SURE ABOUT THE QUALITY. IT HAS ALSO BEEN STATED THAT IN CASE THE BATCH HAS NOT BEEN PROPERLY DONE, SUPERVISOR LAKES INSTRU CTION FROM THEIR HIGHER-UPS AT NL I.E. SENIOR MANAGEMENT AND A CCORDINGLY CORRECTIVE STEPS ARE TAKEN. ABOVE FACTUAL ASPECT HAS NOT BEEN PROPERLY COVERED BY WHICH WE FEEL SHOULD HAVE BEEN COVERED. (II) THE STATEMENT IS FACTUALLY CORRECT WITH FURTH ER CORRECTION TO AN EXTENT THAT THE RATIO OF MIXING IS FIXED TILL IT UNDERGOES CHANGES. AT THE TIME OF CHANGE, IT IS FURTHER INSTRUCTED TO WORKER APPROPRI ATELY. (III) JOB OF THE EMPLOYEE IS CHECKING AND SUPERVISI ON AS ENUMERATED HEREIN ABOVE. THE FORMULA OF RATIO OF RAW MATERIAL IS KNOW N TO THE LABOURERS FOR THE EACH BATCH TILL THERE IS NO CHANGE IN THE F ORMULATION. WHENEVER THERE ARE CHANGES, THEY ARE INSTRUCTED APPROPRIATEL Y. HOWEVER, SUPERVISORS ARE EXPECTED TO MAKE SURE THAT THE WORK ERS ADHERE TO PROPORTION, WHICH HAS BEEN DETERMINED AND DECIDED B Y SENIOR MANAGEMENT OF NIRMA LTD. (IV) THE MANUFACTURING PROCESS IS BOTH MANUAL AND B Y MACHINE. THE SULPHURIC ACID I.E. LINEAR ALKYLENE BENZENE SULFONA TE (LABS) IS MANUFACTURED IN WATER JACKETED VESSELS WITH THE HEL P OF STIRRER IN CONTROLLED TEMPERATURE WITH A PRE-DETERMINED PERIOD OF SLURRIN G, PRE-AL LOWED PERIOD OF SETTLEMENT AND LEVEL UPTO WHICH THE LABS SHOULD BE TAKEN, AND WASTE IS SOLD AS WASTE WHICH IS CALLED S PENT ACID. IN CASE OF ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 6 - MIXING (HERE ARE MANUAL OPERATIONS WITH THE HELP OF ELECTRIC HEATED EQUIPMENTS. ALSO PACKING IS DONE WITH MACHINES. (V) THOUGH LABOURERS . ARE ADMINISTRATIVELY PAID BY M/S. NISARG ENTERPRISE PVT. LTD., THEY HAVE TO PERFORM AND OBEY THE INSTRU CTIONS OF SUPERVISORS OF NL SO FAR AS PRODUCTION AND CONTROL ASPECTS ARE CONCERNED. (VI) IT IS NOT MERE PRESENCE OF EMPLOYEES OF NL, BU T THE SAID SUPERVISORS ARE EXPECTED TO PERFORM FOR PRODUCTION AND QUALITY AS STATED ABOVE. AS FAR AS PRODUCTION AND QUALITY IS CONCERNED NL HAS A BSOLUTE CONTROL OVER NISARG ENTERPRISE. NEED OF SUPERVISION HAS BEEN ELABORATELY DISCUSSED ABOVE AND FOR MAINTAINING IMAGE, OF THE BRAND CONSISTENT QUALITY IS A MUST. FOR CONSISTENT QUALITY REQUIREMENT OF STRICT SUPERVISIO N CANNOT BE UNDERESTIMATED. (VIII) AS REGARDS THE DECISION OF HON'BLE RAJASTHAN HIGH CURT RELIED ON BY LD. AO REPORTED IN 270 ITR 72, WE STATE THAT THE FA CTS OF THE CASE ARE TOTALLY DIFFERENT AND THEREFORE THE RATIO LAID DOWN BY HON'BLE RAJASTHAN HIGH COURT IN THAT CASE CANNOT BE MADE APPLICABLE H ERE. AS PER THE FACTS OF THE CASE IN CASE OF RAJASTHAN H IGH COURT THE COMPANY HAS STOPPED THE MANUFACTURING ACTIVITY. THE ASSESSEE HAS NOT CARRIED ON ANY MANUFACTURING ACTIVITY AND THERE FORE, HON'BLE COURT LOOK A VIEW THAT DEDUCTION U/S.80F IS NOT AVAILABLE WHICH IS NOT THE CASE SO FAR AS YOUR ASSESSEE IS CONCERNED. WE HAVE CARRIED OUT MANUFACTURING ACTIVITIES, WHICH IS AN UNDISPUTED FA CT. (IX) BEFORE LD. AO, THE ENTIRE FACT OF THE CASE HAS BEEN EXPLAINED INCLUDING WHAT HAS BEEN AFFIRMED BY THE EMPLOYEES WHOSE AFFID AVITS HAVE BEEN FILED BEFORE YOUR HONOUR. THE SAID EVIDENCES ARE WE LL WITHIN THE RULE 46(A) OF IT RULES AND WE REQUEST YOUR HONOUR TO KIN DLY ADMIT THE SAME IN THE INTEREST OF JUSTICE. MORE OVER YOUR HON OUR HAS GIVEN ALL OPPORTUNITY TO LD AO FOR REBUTTAL AND VERIFICATION, WHICH FURTHER SUPPORTS OUR PRAYER FOR ADMISSION OF THE SAID AS AD DITIONAL EVIDENCE. (X) THE AFFIDAVITS ONLY SUBSTANTIATE THE FACT, WHIC H HAS ALREADY BEEN BROUGHT ON RECORD BY YOUR APPELLANT DURING THE ASSE SSMENT PROCEEDING FOR A.Y. 20001-02 AS WELL IN THE CURRENT PROCEEDINGS. IT IS URGED IN THE INTEREST OF JUSTICE FOR ASCERTAINMENT OF PROPER FACT SO AS TO MAKE CORRECT LAW APPLICABLE THERETO. (XI) AFFIDAVITS CANNOT HE CONSIDERED AS SELF-SERVIN G DOCUMENTS AND MUST BE TAKEN SERIOUSLY AS PROPER EVIDENCE. IN LIGHT OF OUR ABOVE COMMENTS, WE REQUEST YOUR HON OUR TO KINDLY GRANT JUSTICE TO US.' 8. THE LD. CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND PERUSED THE AO'S ASSESSMENT ORDER. I AM UNABLE TO A GREE WITH THE APPELLANT'S SUBMISSIONS DUE TO THE FOLLOWING REASON S: ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 7 - (I) THE APPELLANT'S RELIANCE ON THE SPECIAL BENCH D ECISION OF THE DELHI ITAT IN THE CASE OF KAPRI INTERNATIONAL (P)LT D. VS. ITO (1984) 78 ITD 820 (DEL-SB) IS MISPLACED. THE APPE LLANT HAS TRIED TO SUPPORT ITS STAND BY INTERPRETING THIS JUD GEMENT TO MEAN THAT IT IS NOT NECESSARY THAT ALL STAGES OF THE MAN UFACTURING PROCESS BE CARRIED OUT BY THE ASSESSEE ITSELF AND T HAT ALL THE WORKERS NEED NOT BE IN THE FACTORY AND BE EMPLOYED BY THE OWNER. A CLOSE READING OF THE DECISION DOES NOT SUPPORT TH IS BROAD INTERPRETATION. WHILE THE SPECIAL BENCH HAS NO DOUB T MADE CERTAIN OBSERVATIONS TO THIS EFFECT, NONETHELESS TH E DECISION NOWHERE LAYS DOWN THE PROPOSITION THAT ALL THE WORK ERS MAY NOT BE EMPLOYED BY THE ASSESSEE AT ALL LIMES OR THAT AL L STAGES OF THE MANUFACTURING PROCESS MAY BE CARRIED OUT BY A PERSO N APART FROM THE OWNER OF THE UNIT. HENCE, THIS DECISION IS OF NO SUPPORT TO THE APPELLANT'S STAND. (II) IN PARA 4.4 OF THE AO'S ASSESSMENT ORDER, THE AO HAS RECORDED A SPECIFIC FINDING THAT THERE WERE NO EMPLOYEES OF TH E APPELLANT AT ALL IN THE TRIKAMPURA DIVISION. THE PAYMENT OF SALA RIES ACTUALLY PERTAINED TO PAYMENTS MADE FOR SETTLEMENT OF LABOUR DISPUTES OF EARLIER YEARS. (III) AO HAS ALSO RECORDED A SPECIFIC AND CLEAR FIN DING IN PARA 4.4(B) OF THE ASSESSMENT ORDER THAT EVEN ACTIVITIES LIKE P URCHASE OF RAW MATERIAL, TECHNICAL SPECIFICATIONS FOR MANUFACTURIN G, QUALITY ASSURANCE, SALE AND DISPATCH, WERE ALL CARRIED OUT BY THE GENERAL DIVISION OF THE ASSESSEE COMPANY IN MADALI AND NOT BY THE TRIKAMPURA DIVISION. THIS FINDING OF FACT HAS NOT B EEN REBUTTED BY ANY EVIDENCE BY THE APPELLANT. (IV) THE RATIO OF THE HON'BLE MUMBAI HIGH COURT IN THE CASE OF CIT VS. PENWALT INDIA LTD. IN 196 ITR 813, ON THE FACTS OF THE PRESENT CASE, SUPPORT THE STAND OF THE AO RATHER TH AN THE APPELLANT. (V) IF THE INTERPRETATION OF THE APPELLANT IS ACCEP TED, IT WOULD LEAD TO ABSURD AND UNINTENDED CONSEQUENCES, DEFEATING THE V ERY PURPOSE OF S.80-IAAB. THE SUPREME COURT IN THE CASE OF CIT VS. IPCA LABORATORIES IN 266 ITR HELD THAT EVEN THOUGH THE PROVISIONS OF CHAPTER VI-A OF THE I.T. ACT HAVE BEE N INCORPORATED TO GIVE BENEFIT AND INCENTIVES TO THE ASSESSEE, THE LIBERAL INTERPRETATION TO THOSE PROVISIONS THAT WOULD DEFEA T THE VERY PURPOSE OF THAT SECTION IS TO BE AVOIDED. (VI) THE HON'BLE DELHI HIGH COURT RULING IN THE CAS E OF CIT VS. NORTHERN INDIA IRON AND STEEL COMPANY LTD. IN 226 I TR 342 IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CAS E. IN THAT CASE ALSO, THE MACHINERY WAS LET OUT TO THE LESSEE. THE DELHI HIGH ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 8 - COURT HELD THAT THE ASSESSEE WAS NOT ENTITLED TO SE CTION 80-J (IDENTICAL TO SECTION 80-LA). (VII) IN THE CASE OF CIT VS. STERLING FOODS IN 237 ITR 589, THE SUPREME COURT HELD THAT THERE MUST BE, FOR THE APPL ICATION OF THE WORDS DERIVED FROM , A DIRECT NEXUS BETWEEN THE PROFITS AND GAINS. IN THE PRESENT CASE, THE APPELLANT HAS NOT PROVED THE DIRECT NEXUS. (VIII) IN THE LATEST DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF R & P EXPORTS VS. CIT REPORTED IN (2005) 279 ITR 53 6, THE ALLAHABAD HIGH COURT HAS HELD THAT JOB WORK WORKERS CANNOT BE COUNTED TO FIND OUT THE MINIMUM STIPULATED NUMBER O F WORKERS UNDER SECTION 80-1, HENCE, THE ASSESSEE WAS NOT ENT ITLED TO DEDUCTION UNDER SECTION 80-1. THIS CASE SQUARELY AP PLIED TO THE PRESENT CASE IN APPEAL. (IX) THE RAJASTHAN HIGH COURT RULING REPORTED IN 27 0 ITR 72 (RAJ) IN THE CASE OF RAJASTHAN STEEL ROLLING MILLS IS SQUARE LY APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. THE RAJASTHAN HI GH COURT IN THIS CASE HAS HELD THAT THE MANUFACTURING ACTIVITY CARRIED OUT BY THE THIRD PARTY ON THE LEASED OUT PREMISES DOES NOT ENTITLE THE ASSESSEE FOR DEDUCTION UNDER SECTION 80-I. (X) IN THE APPELLANT'S OWN CASE, FOR A.Y. 1992-93 V IDE IT AT ORDER NO. ITA. NO. 301/AHD/1996 DATED 13/3/2005, THE AHME DABAD TRIBUNAL HAS DECIDED THE SAME ISSUE AGAINST THE APP ELLANT. (XI) AS DISCUSSED CURLIER IN THIS APPELLATE ORDER, THE ADDITIONAL EVIDENCE FILED IN THE SHAPE OF TWO AFFIDAVITS DOES NOT SUPPORT THE APPELLANT'S CASE. HENCE, THERE IS NO FORCE IN THE APPELLANT'S SUBMISS ION. GROUND OF APPEAL NO.4 IS DISMISSED. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE ISSUE RELATES TO DISALLOWANCE OF DEDUCTION U/S 80IA OF RS 13,64,48,8 50/- IN RESPECT OF INCOME DERIVED FROM TRIKAMPURA UNIT. THE SOLE ARGU MENT OF THE LD. AR OF THE ASSESSEE IS THAT THE FACTS ARE SIMILAR TO THE F ACTS OF THE ASSESSMENT YEAR 2001-02 AND THEREFORE, THE ARGUMENTS ADVANCED FOR A SSESSMENT YEAR 2001- 02 BE TREATED AS ARGUMENTS FOR THE YEAR UNDER CONSI DERATION. WE FIND THAT IN THE ASSESSMENT YEAR 2001-02, WE VIDE ORDER OF EV EN DATE PASSED IN ITA NOS. 541 & 558/AHD/2005 FOUND THAT THERE WAS NO GOO D REASON TO INTERFERE ITA NO. 1002/AHD/2006 NIRMA LTD. VS. ACIT, CENTRAL CIR.-1(1), AHD. FOR A.Y. 2000-01 - 9 - WITH THE ORDERS OF THE LOWER AUTHORITIES IN RESPECT OF THIS ISSUE. THEREFORE, WE DECLINE TO INTERFERE WITH THE ORDERS OF LOWER AU THORITIES FOR THE YEAR UNDER CONSIDERATION ALSO. THEREFORE, THIS GROUND OF APPE AL OF THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 26 TH OF FEBRUARY, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 26/02/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY 1 - *#2 32'# 1 - *#2 32'# 1 - *#2 32'# 1 - *#2 32'#/ COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. *+() / THE RESPONDENT. 3. # !4 / CONCERNED CIT 4. !4() / THE CIT(A)-III, AHMEDABAD 5. 2'7 *# , , / DR, ITAT, AHMEDABAD 6. 78& 9, / GUARD FILE. 1! 1! 1! 1! / BY ORDER, : :: :/ // / ; ; ; ; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD