M/s. Nisaan Copper Limited, Vapi V. The ACIT.,Vapi Circle-1, Vapi

ITA 1329/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8966 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-09-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 23-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B S SANDHU
• Assessee Lawyers: MEHUL K PATEL
• Section: 143(3); 80IB; 154; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA NO.1329/AHD/2009 [ASSTT.YEAR : 2005-2006] M/S.NISSAN COPPER LTD. (FORMERLY KNOWN AS M/S.NISSAN COPPER PVT. LTD. SHED NO.J-20, GIDC UMBERGAON 396 171. PAN : AABCN 0105 B VS. ACIT, VAPI CIR.1 VAPI. ASSESSEE BY : SHRI MEHUL K. PATEL REVENUE BY : SHRI B.S.SANDHU O R D E R PER R.V.EASWAR, VICE-PRESIDENT : THIS APPEAL BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2005-2006. THE ASSE SSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE MANUFACTURE OF COPPER ITEMS FROM COPPER BARS AND PROCESSED PIPES. THE APPEAL ARISES OUT OF THE ASSE SSMENT MADE ON THE ASSESSEE UNDER SECTION 143(3) OF THE INCOME TAX ACT BY ORDER DATED 28-12-2007. 2. GROUND NOS.1 AND 2 ARE GENERAL AND THEY ARE NOT PRESSED. THEY ARE DISMISSED ACCORDINGLY. 3. GROUND NOS.3 AND 4 ARE DIRECTED AGAINST THE REFU SAL TO GRANT DEDUCTION UNDER SECTION 80IB OF THE ACT. THE MANUFACTURING U NIT OF THE ASSESSEE IS LOCATED IN THE UNION TERRITORY OF SILVASSA WHICH IS A BACKWARD AREA NOTIFIED UNDER SCHEDULE-VIII TO THE INCOME TAX ACT. THEREFOR E, IT IS ELIGIBLE FOR THE DEDUCTION UNDER THE ABOVE SECTION. IN THE RETURN T HE ASSESSEE CLAIMED THE DEDUCTION WHICH WAS HOWEVER NOT ALLOWED BY THE ASSE SSING OFFICER ON THE FOLLOWING GROUNDS: PAGE - 2 ITA NO.1329/AHD/2009 -2- A) THE ASSESSEE SHOULD HAVE COMMENCED THE MANUFACTURIN G ACTIVITY IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEA R 2004-2005, UNDER THE SECTION. HOWEVER, THE FACTORY LICENCE WA S OBTAINED ONLY ON 3-1-2005. THIS SHOWS THAT THERE WAS NO MAN UFACTURING ACTIVITY IN THE YEAR ENDED 31-3-2004. B) THE ASSESSEE WAS NOT ELIGIBLE TO START MANUFACTURIN G ACTIVITY BEFORE OBTAINING THE FACTORY LICENCE. THE CLAIM OF THE ASSESSEE THAT THE MANUFACTURE STARTED ON 30-3-2004, BEING IN VIOLATION OF SECTION 92 OF THE FACTORIES ACT, IS UNLAWFUL AND IL LEGAL. C) THE PERSON WHO IS ENGAGED IN THE ILLEGAL OR UNLAWFU L MANUFACTURING ACTIVITY CANNOT CLAIM DEDUCTION UNDER SECTION 80IB. WITHOUT PREJUDICE TO THE ABOVE GROUND, THE AO ALSO RELIED ON THE FOLLOWING GROUNDS FOR REFUSING THE DEDUCTION: A) NO ELECTRICITY EXPENSES HAVE BEEN DEBITED BY TH E ASSESSEE IN AY 2004-2005 THOUGH IT HAS CLAIMED TO HAVE STARTED THE PRODUCTION BEFORE 31.03.2004. IT WAS CLAIMED THAT PRODUCTION WAS CARRIED OUT THROUGH DG SET WHICH WAS INSTALLED IN THE FACTO RY PREMISES LONG BACK. HOWEVER, PERUSAL OF THE DETAILS FILED R EVEALS THAT PROVISIONAL APPROVAL TO ENERGIZE THE DG SET WAS ISS UED BY THE ELECTRICITY DEPARTMENT ONLY ON 31.03.2004. B) ASSESSEE CLAIMED TO HAVE MANUFACTURED COPPER TUB ES IN THE SILVASSA UNIT, WHICH IT IS MANUFACTURING IN ITS UMB ERGAON FACTORY ALSO. C) ASSESSEE HAS CLAIMED TO HAVE SOLD THE GOODS MANU FACTURED IN SILVASSA UNIT TO THE PARTY VIZ. M/S.STAR COOLER & C ONDENSOR P. LTD. IT WAS FURTHER CLAIMED THAT GOODS WAS TRANSPOR TED FROM SILVASSA TO BHIVANDI THROUGH BALAJI TRANSPORT CO. A ND FROM BHIVANDI TO JALGAON IT WAS TRANSPORTED THROUGH ARCO TRANSPORT CO. OF PUYNA. ASSESSEE FILED THE COPY OF LR ISSUED BY STAR COOLER REGARDING PAYMENT OF FREIGHT ON PAY BASIS. HOWEVER, THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE FOR TRANSP ORTATION OF GOODS FROM SILVASSA TO BHIVANDI. PAGE - 3 ITA NO.1329/AHD/2009 -3- D) ASSESSEE HAS CLAIMED TO HAVE INCURRED PRE-OPERATIVE EXPENSES OF RS.2,44,144/- FOR ESTABLISHING NEW COMPANY. HOWEVE R, IT HAS NOT AMORTIZED THE SAID EXPENDITURE OVER THE PERIOD FO 1 0 YEARS AS PER THE COMPANIES ACT. FROM THE ABOVE FACTS, IT IS APPARENT THAT, ASSESSEE COMPANY HAS FAILED TO COMMENCE THE PRODUCTION ON OR BEFORE 31.03.2004 AS PER THE PROVISIONS OF SECTION 80IB(4) AND HENCE IT WILL NOT BE ELIGIBL E FOR DEDUCTION U/S.80IB IN ANY OF THE ASSESSMENT YEARS STARTING FR OM AY 2004-2005. 4. ON APPEAL THE CIT(A) CONFIRMED THE DISALLOWANCE OF THE ASSESSEES CLAIM. IN ADDITION TO THE REASONS GIVEN BY THE AO, THE CIT(A) ALSO OBSERVED THAT IT WOULD BE AGAINST PUBLIC POLICY TO ALLOW THE BENEFIT OF DEDUCTION UNDER ONE STATUTE IN RESPECT OF ANY EXPENDITURE INCURRED BY THE ASSESSEE IN VIOLATION OF THE PROVISIONS OF ANY OTHER STATUTE. THE CIT(A) ALSO HELD THAT THE ASSESSEE HAS VIOLATED RULE 3(1) AND RULE 4 OF THE GOA, DAMAN AND DIU FACTORIES RULES, 1985. 5. IT IS AGAINST THE AFORESAID ORDER THAT THE ASSES SEE HAS COME IN FURTHER APPEAL BEFORE THE TRIBUNAL. WE HAVE CONSIDERED THE FACTS AND THE RIVAL SUBMISSIONS. WE FIND FROM THE CERTIFICATE OF EXEMP TION FROM SALES TAX ISSUED ON 28-5-2004(PAGE 83 OF THE PAPER BOOK) THAT THE EX EMPTION WAS GRANTED ON THE BASIS THAT THE ASSESSEE FIRST SOLD THE GOODS ON 30-3-2004. THE GOODS MENTIONED IN THE CERTIFICATE ARE COPPER WIRE BARS, BILLETS, COPPER STRIPS, FOILS, COPPER FLAT RODS, PROFILE AND SECTION COPPER/BRASS/ ALLOY PIPES AND TUBES. THOUGH THE FIRST SALE OF THE ABOVE GOODS WAS ON 30- 3-2004, SINCE THERE WAS NO PROFIT FROM THE UNIT FOR THE YEAR ENDED 31-3-2004 N O CLAIM FOR DEDUCTION UNDER SECTION 80IB COULD BE MADE BY THE ASSESSEE IN THE R ETURN FILED FOR THE ASSESSMENT YEAR 2004-2005. THE AO HAS HIMSELF STAT ED IN THE THIRD PARAGRAPH OF THE ASSESSMENT ORDER AT PAGE 2 THAT THE ASSESSE E HAD STARTED ITS MANUFACTURING ACTIVITY FROM THE ACCOUNTING PERIOD R ELEVANT TO AY 2004-05. HE HAS ACCORDINGLY HELD THAT THE YEAR UNDER APPEAL IS THE SECOND YEAR OF MANUFACTURING ACTIVITY. HAVING SAID THAT, HE HAS P ROCEEDED TO DISALLOW THE PAGE - 4 ITA NO.1329/AHD/2009 -4- ASSESSEES CLAIM ON THE FOOTING THAT THE MANUFACTUR E OF THE COPPER ITEMS WAS IN VIOLATION OF THE FACTORIES ACT SINCE THE MANUFACTUR ING ACTIVITY TOOK PLACE EVEN BEFORE THE GRANT OF THE FACTORY LICENCE. ON THIS A SPECT OF THE MATTER, THERE ARE SOME ORDERS OF THE AHMEDABAD BENCH OF THE TRIBUNAL. THE LEAD ORDER IS THE ONE DATED 5-6-2009 IN ITA NO.1004 AND 1005/AHD/2009 FOR THE ASSESSMENT YEAR 2006-2007 AND 2005-2006 IN THE CASE OF ITO VS. M/S.PADMEY IMPEX. THE COPY OF THIS ORDER HAS BEEN FILED BEFORE US. I N THIS CASE ALSO THE AO HAD DENIED THE DEDUCTION UNDER SECTION 80IB ONLY ON THE GROUND THAT THE ASSESSEE WAS NOT HAVING THE FACTORY LICENCE BEFORE IT STARTE D THE MANUFACTURING ACTIVITY. THE CIT(A) HAD HELD THAT THIS WAS NOT MATERIAL WHIL E PROCESSING THE CLAIM UNDER SECTION 80IB OF THE IT ACT AND WHAT WAS MATER IAL WAS WHETHER MANUFACTURING ACTIVITIES WERE CARRIED OUT BY THE AS SESSEE DURING THE YEAR OR NOT. AFFIRMING THIS VIEW OF THE CIT(A) AND DISMISSING TH E APPEALS FILED BY THE DEPARTMENT, THE TRIBUNAL HELD THAT THE FACT THAT TH E FACTORY LICENCE WAS GRANTED SUBSEQUENT TO THE COMMENCEMENT OF THE PRODUCTION WA S NOT RELEVANT FOR THE PURPOSE OF PROCESSING THE CLAIM UNDER THE SECTION A ND THAT IF THERE IS ANY VIOLATION OF ANY PROVISIONS OF OTHER STATUTES THEN THE ASSESSEE MAY HAVE TO EXPLAIN THE SAME TO THE AUTHORITIES EXECUTING THOSE LAWS AND THE ASSESSEE MAY EVEN FACE PENAL CONSEQUENCES UNDER THOSE LAWS BUT T HAT CANNOT AFFECT THE CLAIM UNDER THE INCOME TAX ACT WHICH ONLY REQUIRES THE AS SESSEE TO MANUFACTURE OR PRODUCE AN ARTICLE OR THING. THUS THE TRIBUNAL UPH ELD THE ORDER OF THE CIT(A) GRANTING THE DEDUCTION. A SIMILAR ORDER WAS PASSED BY THE SAME BENCH ON THE SAME DAY IN THE CASE OF ITO VS. M/S. SAMRAT HEALTHC ARE, IN ITA NO.1006/AHD/2009 FOR THE ASSESSMENT YEAR 2005-2006. THE ORDER OF THE TRIBUNAL IN THE CASE OF PADMEY IMPEX (SUPRA) WAS FO LLOWED BY ANOTHER BENCH IN AHMEDABAD IN ITA NO.1536/AHD/2009 DATED 28-8-200 9 FOR THE ASSESSMENT YEAR 2005-2006. IN THIS ORDER, IT WAS ALSO OBSERVE D THAT IT IS WELL SETTLED POSITION OF THE LAW THAT A CONDITION (THAT MANUFACT URE OR PRODUCTION CAN BE CARRIED OUT ONLY AFTER OBTAINING THE FACTORY LICENC E) WHICH HAS NOT BEEN IMPOSED BY THE LEGISLATURE FOR GRANTING CERTAIN DED UCTIONS CANNOT BE IMPOSED PAGE - 5 ITA NO.1329/AHD/2009 -5- BY ANY OTHER AUTHORITIES. IN THIS VIEW OF THE MATT ER, THE TRIBUNAL ALLOWED THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IB T HOUGH THE PRODUCTION HAS STARTED IN THE ACCOUNTING YEAR RELEVANT TO THE ASSE SSMENT YEAR 2004-2005 FOR WHICH THE FACTORY LICENCE WAS OBTAINED ONLY ON 3-6- 2004. 6. IN THE LIGHT OF THE AFORESAID ORDERS OF THE AHME DABAD BENCHES OF THE TRIBUNAL, THE FACT THAT THE PRESENT ASSESSEE OBTAIN ED THE FACTORY LICENCE ONLY ON 3-1-2005, AFTER THE PRODUCTION HAD ALREADY COMMENCE D IN THE ACCOUNTING YEAR ENDED 31-3-2004, IS IRRELEVANT FOR THE PURPOSE OF S ECTION 80IB. RESPECTFULLY FOLLOWING THE SAID ORDERS, WE HOLD THAT THE DEPARTM ENTAL AUTHORITIES WERE NOT JUSTIFIED IN REJECTING THE ASSESSEES CLAIM ON THAT GROUND. 7. WE MAY NOW CONSIDER THE GROUNDS ON WHICH THE AO HAS RELIED, WITHOUT PREJUDICE, TO DISALLOW THE ASSESSEES CLAIM. HE HA S GIVEN FOUR REASONS, WHICH WE HAVE REPRODUCED EARLIER, FOR COMING TO THE CONCL USION THAT THE PRODUCTION DID NOT ACTUALLY COMMENCE ON OR BEFORE 31-3-2004, W HICH IS A BASIC CONDITION PRESCRIBED BY SUB-SECTION (4) OF SECTION 80IB. SO FAR AS THE GROUND THAT THE PROVISIONAL APPROVAL TO ENERGISE THE DIESEL GENERAT ING SETS WAS ISSUED BY THE ELECTRICITY DEPARTMENT ONLY ON 31-3-2004 IS CONCERN ED, IT IS SEEN FROM THE PAPERS FILED IN THE PAPER BOOK, TO WHICH OUR ATTENT ION WAS DRAWN ON BEHALF OF THE ASSESSEE, THAT PENDING THE APPROVAL THE ASSESSE E HAD IN FACT STARTED USING THE DG SET EVEN BEFORE 31-3-2004. AT PAGE 81 OF THE PA PER BOOK WE FIND THE MACHINE INSTALLATION CERTIFICATE DATED 28-3-2004 IS SUED BY A CHARTERED ENGINEER, WHO IS AN INDEPENDENT CONSULTANT. HE HAS CERTIFIED THAT TWO DG SETS, ONE OF 125KVA AND ANOTHER OF 100KVA WERE INSTALLED IN THE UNIT IN SILVASSA, THAT HE HAS INSPECTED THE SAME ON 25-3-2004 AND THAT THE DG SETS AND OTHER MACHINERY ITEMS LISTED IN THE CERTIFICATE WERE FOUND IN WORKI NG CONDITION. AT PAGE 82 OF THE PAPER BOOK IS A LETTER WRITTEN BY THE LICENSED ELECTRICAL CONTRACTOR TO THE ASSESSEE ON 25-3-2004 STATING THAT THEY HAVE CONNEC TED POWER FROM DG SET TO ALL MACHINES SO AS TO ENABLE THE ASSESSEE TO COMMEN CE PRODUCTION AS ON DATE. PAGE - 6 ITA NO.1329/AHD/2009 -6- AT PAGE 90 OF THE PAPER BOOK IS A COPY OF THE INVOI CE NO.1 DATED 30-3-2004 PREPARED BY THE ASSESSEE AND SENT TO M/S.STAR COOLE SS AND CONDENSORS PVT. LTD. OF MIDC, JALGOAM FOR SALE OF COPPER PIPES OF TWO DI FFERENT MEASUREMENTS FOR RS.1,37,192/- INCLUDING PACKING CHARGES AND CENVAT. THIS INVOICE ALSO SHOWS THAT IT WAS PREPARED ON 30-3-2004 AND THE DAT E AND TIME OF REMOVAL (OF THE GOODS) WAS 17:00 HOURS ON THAT DATE. AT PAGE 8 9 IS INVOICE NO.2 DATED 31- 3-2004 FOR SALE OF COPPER PIPES OF 3 DIFFERENT DESC RIPTIONS OF THE VALUE OF RS.1,22,793/- INCLUDING PACKING CHARGES AND CENVAT. THESE GOODS WERE ALSO SOLD TO THE SAME PARTY. AT PAGE 92 OF THE PAP ER BOOK IS A LETTER DATED 5-4- 2004 WRITTEN BY THE PURCHASER FROM JALGOAM CONFIRMI NG RECEIPT OF THE COPPER PIPES SUPPLIED BY THE ASSESSEE UNDER THE ABOVE INVO ICES AND STATING THAT THERE ARE NO COMPLAINTS OR SHORTAGES AND THAT THE MATERIA LS CONFORM TO THE PURCHASE ORDER. THIS LETTER HAS TO BE READ WITH THE LETTER WRITTEN BY THE PURCHASER COMPANY ON 2-3-2009 TO THE CIT(A) CONFIRMING THE PU RCHASE OF THE COPPER PIPES AS ABOVE ON TO PAY BASIS. THIS LETTER WAS FILED IN THE REMAND PROCEEDINGS DIRECTED BY THE CIT(A). WE MAY ALSO RE FER TO THE FACT THAT THE PURCHASER IN THE AFORESAID LETTER TO THE CIT(A) HAS CONFIRMED THAT THE DELIVERY OF THE CONSIGNMENT WAS ON TO PAY BASIS WHICH MEAN S THAT THE TRANSPORT CHARGES WERE TO BE PAID BY THE PURCHASER. IN SUPPO RT OF THIS CLAIM THE TRANSPORTERS COPY WAS ALSO FILED BEFORE THE CIT(A) AS ENCLOSURE TO THE LETTER DATED 2-3-2009. IN ANY CASE, THE AOS REASON THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE ON TRANSPORT OF THE GOODS FROM SILV ASSA TO BILWANDI MAY RAISE A SUSPICION BUT IN THE LIGHT OF THE EVIDENCE ADDUCE D BY THE PURCHASER OF THE GOODS AND HIS CONFIRMATION THAT THE GOODS WERE RECE IVED, THE MANUFACTURE AND DESPATCH OF THE GOODS BY THE ASSESSEE CANNOT BE DIS PUTED AND AT BEST AN ADDITION COULD BE MADE FOR INCURRING THE TRANSPORT CHARGES. 8. WE MAY ALSO REFER TO PAGES 69 AND 70 OF THE PAPE R BOOK WHICH ARE COPIES OF RG23A FORMS UNDER THE CENTRAL EXCISE REGU LATIONS. THESE FORMS SHOW THAT COPPER PIPES, WHICH ARE RAW MATERIAL FOR THE ASSESSEE, WERE PAGE - 7 ITA NO.1329/AHD/2009 -7- PURCHASED ON 24-3-2004 TO THE EXTENT OF 5036.80 KGS . AND WERE USED FOR PRODUCTION UPTO 30-3-2004 TO THE EXTENT OF 1478 KGS ., LEAVING A BALANCE OF 3058 KGS. ON 30-3-2004. IN THE LIGHT OF THESE FORMS MAINTAINED UNDER THE CENTRAL EXCISE REGULATIONS, THE PRODUCTION AND SALE OF THE COPPER ITEMS ON 30- 3-2004 CANNOT BE DOUBTED. THE LEARNED CIT-DR POINT ED OUT THAT THE PAGES 6 AND 129 OF THE PAPER BOOK READ TOGETHER INDICATE TH AT ONLY 130 LITRES OF DIESEL WAS CONSUMED FOR THE DG SETS AND WONDERED WHETHER T HE ELECTRICITY PRODUCED BY CONSUMING SUCH A LOW QUANTITY OF DIESEL WOULD BE SUFFICIENT TO PROCESS COPPER PIPES WHICH ARE THE RAW MATERIAL TO THE EXTE NT OF 1478 KGS. THIS IS AN EXERCISE WHICH OUGHT TO HAVE BEEN CARRIED OUT BY TH E DEPARTMENTAL AUTHORITIES BUT THEY HAVE NOT DONE SO. WE HAVE NO TECHNICAL EX PERTISE TO ASCERTAIN WHETHER IT IS POSSIBLE TO GENERATE SUFFICIENT ELECTRICITY T O PRODUCE THE ITEMS THAT WERE SOLD BY THE ASSESSEE. WE HAVE TO THEREFORE LEAVE I T AT THAT. IN ANY CASE, THE OTHER EVIDENCE ADDUCED BY THE ASSESSEE CLEARLY POIN T TO THE FACT THAT COPPER ITEMS WERE PRODUCED AND SOLD ON 30-3-2004 AND 31-3- 2004. THE LEARNED CIT.DR THEN SUBMITTED THAT THERE WAS NO PROOF OF TH E ASSESSEE HAVING RECEIVED THE SALE CONSIDERATION FROM THE PURCHASER. IN THE ASSESSEES WRITTEN SUBMISSIONS DATED 10-9-2008 BEFORE THE CIT(A) (PAGE S 1 TO 154 OF THE PAPER BOOK), AT PAGE 7 THE ASSESSEE HAS FURNISHED THE DET AILS OF THE INVOICES NOS.1 AND 2 AND ALSO THE DETAILS OF THE RECEIPTS FROM THE PUR CHASER COMPANY. THE AMOUNTS WERE RECEIVED IN THE SUBSEQUENT YEARS BY CH EQUES AND WERE DEPOSITED WITH THE BANK. THE STATEMENT OF ACCOUNT OF THE PUR CHASER HAS ALSO BEEN GIVEN ALONG WITH THIS WRITTEN SUBMISSIONS. THUS, IT IS N OT IN DOUBT THAT THE ASSESSEE DID RECEIVE THE SALE CONSIDERATION FROM THE PURCHAS ER IN THE MONTHS OF APRIL TO JUNE, 2005. THE FACT THAT THEY WERE NOT RECEIVED I N THE YEARS ENDED 31-3-2004 OR 31-3-2005 ARE NOT RELEVANT SINCE THERE IS OTHER EVIDENCE TO SHOW THAT THE ASSESSEE SOLD THE GOODS TO THE SAID PURCHASER. 9. AS REGARDS THE ELECTRICITY EXPENSES, OUR ATTENTI ON WAS DRAWN BY THE ASSESSEE TO PAGES 2 AND 7 OF THE PAPER BOOK WHICH A RE PART OF THE WRITTEN PAGE - 8 ITA NO.1329/AHD/2009 -8- SUBMISSIONS FILED BEFORE THE CIT(A) IN WHICH THE DE TAILS OF THE CONSUMPTION ARE GIVEN. IT IS SEEN THAT DURING THE PERIOD FROM 23-3-2004 TO 15-5-2004 THE ASSESSEE CONSUMED 5500 UNITS. THE POWER BILL FOR T HE PERIOD CAME TO RS.22,897/- WHICH WAS PAID BY CHEQUE. THE ELECTRIC ITY CONSUMPTION IS IN ADDITION TO THE DIESEL CONSUMED FOR THE DG SETS. 10. IN LIGHT OF THE ABOVE EVIDENCE ADVERTED TO IN T HE PRECEDING PARAGRAPHS, IT IS CLEAR TO US THAT EVEN AS A MATTER OF FACT THE AS SESSEE HAS COMMENCED PRODUCTION OR MANUFACTURE OF COPPER ITEMS DURING TH E YEAR ENDED 31-3-2004 AND HAS THUS FULFILLED THE BASIC CONDITION PRESCRIB ED BY SUB-SECTION (4) OF SECTION 80IB. WE HAVE ALREADY HELD, FOLLOWING THE ORDERS OF THE AHMEDABAD BENCHES CITED SUPRA, THAT IT IS IRRELEVANT FOR THE PURPOSE OF SECTION 80IB THAT THE ASSESSEE COMMENCED THE PRODUCTION EVEN BEFORE RECEI VING THE FACTORY LICENCE. THEREFORE, IN OUR VIEW, THE INCOME TAX AUTHORITIES WERE NOT JUSTIFIED IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IB OF THE ACT IN RESPECT OF THE SILVASSA UNIT. WE ACCORDINGLY DIRECT THE AO TO ALLOW THE CLAIM. THE GROUNDS ARE ALLOWED. 11. THE GROUND NOS.5 AND 6 ARE GENERAL AND REQUIRE NO DECISION. 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT 18 TH SEPTEMBER, 2009. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 18-09-2009 PAGE - 9 ITA NO.1329/AHD/2009 -9- COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD