The ITO, Ward-9(3), Surat V. M/s. Natural Bio Organic Product, Surat

ITA 1451/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1131 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Rejection of books of accounts; Third party statement
• Section: 145

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.1451/AHD/2011 / ASSTT. YEAR: 2007-2008 AND ITA NO.395/AD/2012 ASSTT.YEAR 2008-09 ITO, WARD - 9(3) SURAT. VS M/S.NATURAL BIO ORGANIC PRODUCTS SHOP NO.B-2, GODELN PLAZA ANKUR CHAR RASTA A.K. ROAD, SURAT. PAN : AAFFN 5752 M ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI JAMESH KURIAN, SR.DR ASSESSEE BY : SHRI M.J. SHAH, AR / DATE OF HEARING : 07/07/2016 / DATE OF PRONOUNCEMENT: 11/07/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE REVENUE AGAINST THE ORDERS OF THE LD.CIT(A)-V, SURA T DATED 27.1.2011 AND 17.10.2011 PASSED IN THE ASSTT.YEAR 2007-08 AND 2008-09 RESPECTIVELY. ITA NO.1457/AHD/2011 & ANRS. 2 2. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUN AL) RULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF THE COMMON GRIEVANCE IN BOTH THE ASSESSMENT YEARS IS THAT THE LD.CIT(A) HAS ERRED IN SETTING ASIDE THE FINDING OF THE AO, REJECTING THE BOOK OF ACCOUNTS U NDER SECTION 145(3) OF THE INCOME TAX ACT, AND THEREBY ALLOWING DEDUCTION UNDE R SECTION 80JJA OF RS.2,06,02,468/- AND RS.2,19,16,847/- FOR THE ASSTT .YEARS 2007-08 AND 2008- 09 RESPECTIVELY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM CONSTITUTED WITH FIVE PARTNERS. IT HAS FILED ITS R ETURN OF INCOME ON 20.10.2007 AND 30.9.2008 FOR THE ASSTT.YEARS 2007-08 AND 2008- 09 RESPECTIVELY. IT HAS DECLARED NIL INCOME IN BOTH THE ASSESSMENT YEARS AF TER CLAIMING DEDUCTION OF RS.2,06,02,468/- AND RS.1,29,16,846/- UNDER SECTION 80JJA OF THE INCOME TAX ACT FOR THE RESPECTIVE ASSESSMENT YEARS. THE CASES OF THE ASSESSEE WERE SELECTED FOR SCRUTINY ASSESSMENT IN BOTH THE YEARS AND NOTICES UNDER SECTION 143(2) WERE ISSUED ON 17.7.2008 AND 25.9.2009 IN TH ESE ASSESSMENT YEARS RESPECTIVELY. ON SCRUTINY OF THE ACCOUNTS, IT REV EALED TO THE AO THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80JJA ON THE GROUND THAT IT HAS MANUFACTURED BIO-FERTILIZERS, WHICH WAS SOLD BY IT IN BOTH THE YEARS. THE LD.AO HAS OBSERVED THAT THE ASSESSEE HAS PURCHASED COW-DUNG FROM 10 PARTIES IN THE ASSTT.YEAR 2007-08 TOTALING TO RS.25,77,500/ -. IT HAS MADE UNEXPLAINED SALE OF FERTILIZERS TO 9 PARTIES HAVING VALUE OF RS .59,95,492/-. SIMILARLY, IN THE ASSTT.YEAR 2008-09 ALSO HE MADE REFERENCE TO HIGHE R RATE OF GP AND HOW THE PURCHASES COULD NOT BE SUBSTANTIATED BY THE ASSESSE E WITH CONFIRMATION FROM CO-DUNG SELLERS. ULTIMATELY, THE LD.AO HAS REJECT ED BOOKS OF ACCOUNTS OF THE ASSESSEE. HOWEVER, HE ACCEPTED THE COMPUTATION OF PROFIT MADE BY THE ITA NO.1457/AHD/2011 & ANRS. 3 ASSESSEE. THE LD.AO, THEREAFTER OBSERVED THAT SGS INDIA PVT. LTD., A COMPANY AUTHORIZED TO ISSUE CERTIFICATE ABOUT THE ORGANIC P RODUCTS, THAT CONCERN HAS WITHDRAWN CERTIFICATE FROM THE ASSESSEE, AND THEREF ORE, THE PRODUCT MANUFACTURED BY THE ASSESSEE COULD NOT BE CONSIDERE D AS AN ORGANIC PRODUCT. UNDER THESE PREMISES, THE LD.AO HAS DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80JJA OF THE INCOME TAX ACT TO THE ASSESSEE IN BOTH THE YEARS. 4. ON APPEAL, THE LD.CIT(A) HAS ALLOWED THE CLAIM O F THE ASSESSEE. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE AT TH E VERY OUTSET SUBMITTED THAT ASSESSMENT YEAR 2006-07 IS THE FIRST ASSESSMEN T YEAR. IN THIS YEAR ALSO, THE CLAIM OF THE ASSESSEE WAS DISALLOWED. THE DISP UTE TRAVELLED UPTO THE TRIBUNAL, AND THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE AO. IN PURSUANCE TO THE TRIBUNALS ORDER, THE AO HAS PASSE D A FRESH ASSESSMENT ORDER ON 1.3.2015. THE LD.AO HAS ALLOWED THE CLAIM OF TH E ASSESSEE. HE PLACED ON RECORD COPY OF THE ASSESSMENT ORDER. ON THE STREN GTH OF THIS ASSESSMENT ORDER, HE CONTENDED THAT DEPARTMENT CANNOT TAKE A C ONTRADICTORY STAND ON AN IDENTICAL ISSUE. ON ONE HAND, THE DEPARTMENT IS CH ALLENGING THE ORDER OF THE CIT(A) ON THE SAME ISSUE, AND ON OTHER HAND, THE AO HIMSELF WAS SATISFIED WITH THE CLAIM OF THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT UNLESS THE CLAIM OF THE ASSESSEE WAS WITHDRAWN IN THE FIRST YEAR ITSELF, IN SUBSEQUENT YEAR IT CANNOT BE DENIED. TH ERE IS NO DISTINGUISHING FACT HIGHLIGHTED BY THE AO. THE LD.DR, ON THE OTHER HAN D, RELIED UPON THE ORDERS OF THE AO PASSED IN THESE YEARS. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE LD.CIT(A) HAS RECORDED ALMOST IDENTICAL FINDING IN BOTH THE YEARS. FOR THE FACILITY OF REFERENCE, WE TAKE NOTE OF THE FINDING RECORDED BY THE LD.CIT(A) IN THE ASSTT.YEAR 2007-08 . IT READS AS UNDER: ITA NO.1457/AHD/2011 & ANRS. 4 DECISION: 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ACTIONS OF THE A.O. OF REJECTING THE BOOK RESULTS U/SEC. 145(3) OF THE INCOME-TAX ACT AND OF REJECTIN G THE CLAIM OF ASSESSEE FOR DEDUCTION U/S. 80JJA OF THE ACT CANNOT BE UPHELD DUE TO FOLLOWING REASONS: (I) THE A. O. IN PARA 3.6 (C) HAS OBSERVED TH AT: 'IN VIEW OF THE ABOVE DISCUSSION WHICH SHOWS THAT T HERE ARE MANY DISCREPANCIES AND DEFECTS IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WHICH LEAD TO THE INVOKING OF THE PROVISIONS U/SEC. 145(3) OF THE INCOME-TAX ACT. ON THE PERUSAL OF THE DETAILS SUBMI TTED AND CONTRA CONFIRMATIONS RECEIVED WHICH LEAD TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS PREPARED BY THE ASSESSEE ARE DEFECTIVE AND THEREFORE, BOOKS RESULTS SHOWN THEREIN CANNOT BE TRUSTED AND HENCE S AME ARE REJECTED U/SEC. 145(3) OF THE INCOME-TAX ACT.' THE ABOVE REMARKS ARE VERY GENERAL IN NATURE AND TH E A. O. HAS REALLY FAILED TO POINT OUT ANY SERIOUS DISCREPANCY OR DEFECT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WHICH WOULD NECESSITATE THE REJECTION OF THE BOOKS OF ACCOUNTS AND THE BOOK RESULTS. THE FACT TH AT OUT OF THE TEN PARTIES FROM WHOM THE ASSESSEE PURCHASED COW DUNG D URING THE YEAR, TWO PARTIES COULD NOT BE LOCATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THAT SUCH TWO PARTIES DID NOT RECONF IRM THE SELLING OF COW DUNG TO THE ASSESSEE WOULD NOT JUSTIFY THE REJE CTION OF BOOK RESULTS. THE COW DUNG IS ESSENTIALLY PURCHASED FROM THE SHEP HERDS I.E. BHARWADS WHO CANNOT BE EXPECTED TO HAVE PERMANENT A DDRESSES, SO THAT FRESH CONFIRMATIONS FROM THEM CAN BE OBTAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH GENERALLY TAKE AFTE R TWO YEARS FROM THE TIME OF MAKING PURCHASES. EVEN AFTER REJECTING THE BOOKS OF ACCOUNTS AND THE BOOK RESULTS THE A. O. HAS ACCEPTE D THE BOOK PROFITS SHOWN BY THE ASSESSEE. SINCE THE A. O. HAS ACCEPTED THE BOOK RESULTS OF THE ASSESSEE AS CORRECT, HE IS NOT JUSTIFIED IN CLA IMING THAT THE SALES TRANSACTIONS SHOWN BY THE ASSESEE ARE FICTITIOUS IN NATURE SINCE THE PROFITS WOULD NOT BE GENERATED UNLESS THE SALES ARE MADE. IF THE BOOK PROFITS ARE ACCEPTED AND FOUND TO BE CORRECT, THE C ORRESPONDING SALES ARE ALSO I REQUIRED TO BE ACCEPTED AS CORRECT. THOU GH THE A. O. REFERRED TO THE ISSUES I OF RECONFIRMATION OF PURCHASES AND SALES DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR REJECTING THE BOOK RESULTS, HE HAS NOT QUESTIONED OR DOUBTED THE ORIGINAL BOOKS OF ACC OUNTS AND RECORDS ITA NO.1457/AHD/2011 & ANRS. 5 LIKE PURCHASE VOUCHERS, SALES F BILLS, DELIVERY CHA LLANS, TRANSPORT RECEIPTS, ETC. PRODUCED BY THE ASSESSEE BEFORE HIM. IN MY OPINION WITHOUT POINTING OUT ANY SERIOUS DEFECTS IN SUCH OR IGINAL RECORDS THE BOOK RESULTS CANNOT BE REJECTED. THE FACT THAT ON THE ONE HAND THE A. O. HAS REJECTE D THE BOOKS OF ACCOUNTS AND ON THE OTHER HAND ACCEPTED THE BOOK RE SULTS SHOWS THAT THE A.O. WAS NOT CLEAR WHAT HE WANTED TO DO. THE AC CEPTANCE OF BOOK RESULTS SHOWN BY THE ASSESSEE RENDERS A.O.'S OWN AC TION OF REJECTION OF BOOKS OF ACCOUNTS AND THE BOOK RESULTS UNTENABLE AN D AS SUCH, THE ACTION OF THE A. O. OF REJECTING THE BOOKS OF ACCOU NTS AND THE BOOK RESULTS CANNOT BE APPROVED AND ACCORDINGLY THIS GRO UND OF APPEAL IS ALLOWED. (II) THE ASSESSEE CLAIMED DEDUCTION U/SEC. 80JJA OF THE INCOME-TAX ACT. THE A. O. HAS REJECTED THE BOOKS OF ACCOUNTS U/SEC. 145 (3) OF THE INCOME-TAX ACT. I DO NOT UNDERSTAND HOW THE REJECTI ON OF BOOKS OF ACCOUNTS IS LINKED THE CLAIM OF DEDUCTION U/SEC. 80 JJA OF THE ACT. THE A. O. HAS REJECTED THE ASSESSEE'S CLAIM FOR DED UCTION U/SEC. 80JJA ACT HOLDING THAT THE ASSESSEE HAS NOT MANUFAC TURED AND SOLD ORGANIC MANURE WHICH WOULD ENABLE THE ASSESSEE TO C LAIM DEDUCTION U/SEC. 80JJA OF THE ACT. RELIANCE OF THE A.O. ON THE LETTER OF SGS IND IA PRIVATE LIMITED, MUMBAI FOR REJECTION OF CLAIM OF THE ASSES SEE FOR DEDUCTION U/SEC. 80JJA OF THE ACT APPEARS TO BE TOTALLY MISCO NCEIVED. IN THE SAID LETTER ITSELF IT IS CLEARLY STATED THAT THE PRO DUCT MANUFACTURED BY THE ASSESSEE CAN BE APPROVED AS ORGANIC INPUTS FOR U SE IN ORGANIC FARMING. AGAIN WHILE THE A. 0. HAS REJECTED THE CLAIM FOR DE DUCTION U/SEC. 80JJA OF THE ACT, HE HAS ACCEPTED THE BUSINESS PROFITS SH OWN BY THE ASSESSEE TO BE CORRECT WITHOUT POINTING OUT AS TO IF THE ASS ESSEE HAS NOT CARRIED ON THE BUSINESS OF MANUFACTURE AND SALE OF ORGANIC MANURE, THEN FROM WHICH OTHER BUSINESS THE ASSESSEE HAS EARNED THE BU SINESS INCOMES WHICH ARE SHOWN BY THE ASSESEE AND ACCEPTED BY HIM TO BE CORRECT. THE ASSESSEE PRODUCED PURCHASE VOUCHERS, DELIVERY CHALL ANS FOR COW DUNG PURCHASED, THE SALES BILLS, TRANSPORT RECEIPTS AND THE DELIVERY CHALLANS SHOWING THAT THE SALE AND DELIVERY OF VERMIN COMPOS T WHICH IS AN ORGANIC MANURE WAS MADE BY THE ASSESSEE THROUGHOUT THE YEAR. THE A. O. HAS NOT BROUGHT OUT ANY EVIDENCE TO PROVE TH AT SUCH PURCHASE VOUCHERS, DELIVERY CHALLANS, SALES BILLS, T RANSPORT RECEIPTS, ITA NO.1457/AHD/2011 & ANRS. 6 DELIVERY CHALLANS, ETC. FOR VERMIN COMPOST SO LD AND DELIVERED ARE FICTITIOUS AND NOT ACCEPTABLE AS EVIDENCE S, IN FACT, THE ASSESSEE ALSO SOLD THE VERMIN COMPOST TO THE JOINT DIRECTOR OF AGRICULTURE, UDUPI DISTRICT, UDUPI, KARNATAKA WHICH IS A GOVERNMENT AUTHORITY. IN RESPECT OF SUCH SALES OF 180 TONNES O F VERMIN COMPOST TO THE SAID GOVERNMENT AUTHORITY OF KARNATAKA STATE, THE ASSESSEE PRODUCED THE LETTER OF THE SAID GOVERNMENT AUTHORIT Y PLACING ORDER WITH THE ASSESSEE, COPIES OF SALES BILLS, RESPECTIVE DEL IVERY CHALLANS AND TRANSPORT RECEIPTS THROUGH WHICH VERMIN COMPOST WAS SOLD AND DELIVERED TO THE SAID GOVERNMENT AUTHORITY. IN ALL BILLS, DELIVERY CHALLANS, TRANSPORT RECEIPTS, ETC., IT IS CLEARLY S TATED THAT THE VERMIN COMPOST IS BEING SOLD AND DELIVERED TO THE SAID GOV ERNMENT AUTHORITY BY THE ASSESSEE. THE ASSESSEE HAS ALSO PRODUCED BEF ORE ME THE EVIDENCES SHOWING PAYMENTS MADE BY THE SAID GOVERNM ENT AUTHORITY TO THE ASSESSEE BY WAY OF SALE PRICE FOR SAID ORGANIC MANURE SOLD BY THE ASSESSEE TO THE SAID GOVERNMENT AUTHORITY. IN VIEW OF THE ABOVE, IT CLEARLY GETS ESTABLISHED T HAT THE ASSESSEE DURING THE YEAR MANUFACTURED AND SOLD ORGANIC MANURE FROM THE BIO- DEGRADABLE WASTE AND AS SUCH, PROFITS FROM SUCH BUS INESS DO QUALIFY FOR DEDUCTION U/SEC. 80JJA OF THE ACT. IN VIEW OF ABOVE FACTS, I AM OF THE OPINION THAT TH E ASSESSEE'S CLAIM OF DEDUCTION U/SEC. 80JJA OF THE INCOME-TAX A CT APPEARS TO BE GENUINE AND SHOULD BE ALLOWED. ACCORDINGLY, THE A. O. IS DIRECTED TO ALLOW THE DEDUCTION U/SEC. 80JJA OF THE INCOME-TAX ACT AS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME. HENCE, THE GR OUNDS NO. 2 & 3 OF THE APPEAL ARE ALLOWED. 7. IN THE RESULT, THE APPEALS ARE ALLOWED. 7. SIMILARLY, AT THIS STAGE, WE DEEM IT PERTINENT T O TAKE NOTE OF RELEVANT SUBMISSION OF THE ASSESSEE GIVEN TO THE LD.AO IN TH E SET ASIDE ASSESSMENT PROCEEDING OF THE ASSTT.YEAR 2006-07. THE RELEVANT PART OF THE SUBMISSION OF THE ASSESSEE AS WELL AS FINDING OF THE AO READS AS UNDER: (D) REGARDING CLAIM OF THE DEDUCTION U/S. 80JJA OF THE I.T. ACT- REGARDING THE CLAIM OF DEDUCTION U/S. 80JJA OF THE I.T. ACT, ASSESSEE CONTENDED THAT THE LETTER/CERTIFICATE FROM THE SGS INDIA PVT. LTD HAS NEVER BEEN PRODUCED BY IT. FURTHER, IT WAS STATED T HAT THE COPIES OF ITA NO.1457/AHD/2011 & ANRS. 7 ANNEXURE I AND II OF LETTER DATED 21.12.2009 OF SGS INDIA PVT. LTD HAVE NOT BEEN PROVIDED. THE ASSESSEE FURNISHED A COPY OF LETTER DATED 26.07.2006 OF SGS INDIA PVT. LTD TO PROVE THAT IT M ANUFACTURE ORGANIC INPUT FOR UTILIZING IT FOR ORGANIC FARMING WHICH IS THE PRIME INTENTION OF LEGISLATURE FOR THE CLAIM OF DEDUCTION U/S. 80JJA O F THE I.T. ACT. DURING THE ASSESSMENT PROCEEDINGS, A NOTICE U/S. 13 3(6) OF THE I.T.ACT HAS BEEN ISSUED ON SGS INDIA PVT. LTD., MUM BAI. THE SGS INDIA PVT. LTD. IS A COMPANY WHICH ISSUES CERTIFICATES TO THE MANUFACTURERS OF ORGANIC FERTILIZERS. ON GOING THROUGH THE DETAILS R ECEIVED FROM SGS INDIA PVT. LTD, IT IS SEEN THAT THE CERTIFICATE WAS ISSUED TO ASSESSEE FOR THE PROCESS COMPOST PRODUCTION AND THIS CERTIFICATE IS NOTHING BUT THE ANNEXURE-I WHICH ASSESSEE STATED THAT SAME NOT PROV IDED. THE VALIDITY PERIOD OF THIS WAS FROM 04.03.2006 TO 03.03.2007. I T WAS FURTHER MENTIONED IN THIS CERTIFICATE AS UNDER - 'THE VALIDITY OF THE CERTIFICATE SOLELY DEPENDS ON THE ORGANIZATION'S CONTINUED COMPLIANCE TO INDICATED THE STANDARDS WHI CH IS SUBJECT TO ANNUAL SURVEILLANCE INSPECTION.' FROM THE ABOVE CONTENTS OF THE CERTIFICATE IT IS CL EAR THAT THERE WERE SOME NORMS AND STANDARDS TO BE FOLLOWED FOR THE CON TINUATION/RENEWAL OF CERTIFICATE. FURTHER, ON GOING THROUGH THE CASE RECORDS, IT IS S EEN THAT SHRI PRAVINBHAI M. MANGUKIYA, PARTNER IN ASSESSEE FIRM, HAS SEEN TO BE MADE AN AFFIDAVIT ON A STAMP PAPER VIDE DATED 17.02 .2006 WHEREIN IT HAS BEEN STATED THAT THE ASSESSEE WILL PRODUCE PROD UCTS AS PER ORGANIC PRODUCTION STANDARDS WITHOUT USING ANY PROHIBITED O R RESTRICTED SUBSTANCES AND WILL FOLLOW THE SGS ORGANIC PRODUCTI ON STANDARD FOR THE SAME. ASSESSEE VIDE SUBMISSION LETTER DATED 29.12.2009 FU RNISHED THE COPY OF LETTER DATED 25.07.2006 OF THE SGS INDIA PV T.LTD. AT PAGE NO.76. THIS LETTER IS ADDRESSED TO MR. PRAVIN D. MA NGUKIYA, WHO IS ONE OF THE PARTNER OF ASSESSEE FIRM. IN THIS LETTER, AS SESSEE WAS SPECIFICALLY REQUESTED TO SURRENDER THE CERTIFICATE ISSUED BECAU SE, DURING THE ANNUAL REVIEW OF THE COMPANY, ASSESSEE FAILED TO COMPLY WI TH THE CORRECTIVE ACTION REQUESTS MADE BY THIS CERTIFIED COMPANY. FUR THER, THE SGS INDIA PVT. LTD, IN REFERENCE TO LETTER DATED 25.07.2006 S END A REMINDER TO ASSESSEE, VIDE LETTER DATED 21.03.2007 WHICH IS REP RODUCED AS UNDER - ITA NO.1457/AHD/2011 & ANRS. 8 'REFERENCE IS INVITED ON OUR LETTER DATED 25TH JULY 2006 REQUESTING YOU TO SURRENDER YOUR CERTIFICATE FOR ORGANIC IN PUTS ISSUED BY SGS INDIA WHEREIN, IT HAD BEEN INFORMED THAT ORGANIC IN PUTS (LIKE VERMICOMPOST, CITY COMPOST, BIOFERTILIZERS, BIOPEST ICIDES, COMPOST PREPARED FROM SUGARCANE PRESS MUD, MANURES PREPARED FROM SEA WEED EXTRACTS ETC.) CANNOT BE CERTIFIED AS ORGANIC. WE HAD FURTHER REQUESTED TO DISCONTINUE USAGE OF OR GANIC CERTIFICATION LOGO (SGS ORGANIC LOGO AND INDIA ORGANIC LOGO) AND/ OR REFRAIN FROM DISPLAYING ASSOCIATED REFERENCES TO ANY STATIONERY, PACKAGING, ADVERTISING MATERIALS AND/OR VEHICLES AND PRODUCTS AND INFORM US ACCORDINGLY. SO FAR WE HAVE NOT RECEIVED ANY INTIMATION FROM YOU R END ABOUT COMPLIANCE. WE HAVE NO OPTION BUT TO CANCEL THE CER TIFICATE ISSUED, WITH IMMEDIATE AFFECT. AS STATED EARLIER, PLEASE RETURN THE ORIGINAL CERTI FICATE ISSUED BY SGS INDIA AND ARRANGE TO WITHDRAW THE PRODUCTS THAT CON TAIN EITHER SGS ORGANIC LOGO OR INDIA ORGANIC LOGO. IN EVENT OF FAI LING ACTION FROM YOUR END, THE CASE WILL BE REFERRED TO THE COMPETEN T AUTHORITY. - IN CASE YOU HAVE ANY CONCERNS ON THE SAME PLEASE DO REVERT BACK TO US. THE ABOVE REPRODUCED LETTER ADDRESSED TO MR. PRAVIN D. MANGUKIYA, PARTNER OF ASSESSEE FIRM IS NOTHING BUT THE ANNEXUR E-II, WHICH WAS NOT PROVIDED TO ASSESSEE. THE CONTENTS OF THE LETTER DA TED 21.12.2009 OF SGS INDIA PVT. LTD GIVEN TO THE ASSESSEE, ITSELF EX PLAINS THAT THE ANNEXURE-I AND II ARE ISSUED ON ASSESSEE BY THE SGS INDIA PVT.LTD. AND SAME WAS AVAILABLE WITH ASSESSEE AND THEREFORE NOT PROVIDED. FURTHER, DESPITE OF WARNINGS VIDE LETTERS DATED 25. 07.2006 AND 21.03.2007 FROM THE SGS INDIA PVT. LTD, ASSESSEE HA S NOT TAKEN CARE OF THE SAME AND HAS NOT SURRENDERED CERTIFICATE WHICH SHOWS THAT ASSESSEE HAS FOLLOWED THE NORMS. THEREFORE, IN VIEW OF THE A BOVE DISCUSSION, SINCE ASSESSEE HAS NOT CARRIED OUT ITS ACTIVITIES IN ACCORDANCE WITH THE REQUIREMENTS OF THE NPOP (NATIONAL STAND ARDS FOR ORGANIC PRODUCTION) STANDARDS, THE CLAIM OF THE ASSESSEE MA DE U/S. 80JJA IS NOT TENABLE NEE SAME IS DISALLOWED. 4. FOR THE REASONS GIVEN ABOVE, THE CLAIM OF THE DE DUCTION U/S 80JJA MADE BY THE ASSESSEE IS NOT IN ACCORDANCE WITH THE RULES AND HENCE THE ITA NO.1457/AHD/2011 & ANRS. 9 SAME IS DISALLOWED. THE PENALTY U/S 271(1) (C) IS I NITIATED FOR THIS MISREPRESENTATION OF FACTS BY THE ASSESSEE. 5. THROUGH THE SUBMISSION MADE IN THE EVENING OF 29 /12/2009, ASSESSEE HAS REQUESTED TO PROVIDE AN OPPORTUNITY BEFORE MAKI NG ANY ADDITION/DISALLOWANCE IN THE TOTAL INCOME DECLARED. HOWEVER, THIS REQUEST OF THE ASSESSEE CANNOT BE ENTERTAINED DUE T O THE TIME LIMITATION. EVEN OTHERWISE THERE ARE MANY DEFECTS HAVE BEEN NOT ICED FROM THE AVAILABLE RECORDS AND CONTRA CONFIRMATIONS RECEIVED WHICH ITSELF SUPPORTS TO JUSTIFY THE DISALLOWANCE OF THE CLAIM O F RS. 2,06,02,468/- MADE BY THE ASSESSEE U/S. 80JJA OF THE I.T. ACT. 8. A PERUSAL OF THE ASSESSMENT ORDERS IN THE ASSTT. YEAR 2007-08 AND 2008- 09, WE FIND THAT REASONS FOR DISALLOWING THE CLAIM OF THE ASSESSEE IS IDENTICAL, AS WAS CONSIDERED IN THE ASSTT.YEAR 2006-07. THE L D.AO RE-APPRECIATED THE CERTIFICATE ISSUED BY SGS INDIA PVT.LTD. AND ITS CO RRESPONDENCE. IN THE LIGHT OF FRESH ASSESSMENT ORDER, IF WE EXAMINE THE ASSESS MENT ORDERS PASSED IN THESE TWO YEARS, THEN, IT WOULD REVEAL THAT THERE I S A PERCEPTIONAL DIFFERENCE IN APPRECIATING THE SAME CERTIFICATE. CONSIDERING THE STAND OF THE AO IN THE YEAR 2015, WHEN HE PASSED ASSESSMENT ORDER IN 2006-07 AF RESH, WE ARE OF THE VIEW THAT ORDERS OF THE LD.CIT(A) IN BOTH THE YEARS ARE NOT REQUIRED TO BE INTERFERED WITH. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT F IND ANY MERIT IN THESE APPEALS. THESE ARE REJECTED. 9. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 11/07/2016