KRISHNKAKUMAR VIJAYSHANKAR DUBEY, KALYAN V. DCIT CIR 3, KALYAN

ITA 1489/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0594 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Keywords: Tangible material; Difference of opinion; Assessment record; Benefit of exemption; Retraction; Reason to believe; Change of opinion
• Section: 143(3); 80IB; 131; 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL H BENCH MUMB AI BEFORE SHRI G.S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 1489/MUM/2017 (ASSESSMENT YEAR 2005-06 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, KALYAN (E)- 421306. PAN: AGVPD4427H VS. DCIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN. APPELLANT RESPONDE NT ITA NO. 1490/MUM/2017 (ASSESSMENT YEAR 2006-07 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, KALYAN (E)- 421306. PAN: AGVPD4427H VS. DCIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN. APPELLANT RESPONDE NT ITA NO. 1491/MUM/2017 (ASSESSMENT YEAR 2007-08 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, KALYAN (E)- 421306. PAN: AGVPD4427H VS. DCIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN. APPELLANT RESPONDE NT ITA NO. 1492/MUM/2017 (ASSESSMENT YEAR 2008-09 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, KALYAN (E)- 421306. PAN: AGVPD4427H VS. ITI WARD 3(3), KALYAN. APPELLANT RESPONDE NT ITA NO. 1493/MUM/2017 (ASSESSMENT YEAR 2009-10 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, VS. ACIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 2 KALYAN (E)- 421306. PAN: AGVPD4427H APPELLANT RESPONDE NT ITA NO. 1494/MUM/2017 (ASSESSMENT YEAR 2010-11 ) SHRI KRISHNAKUMAR VIJAYASHANKAR DUBEY, 407, NAVRAM KUTIR, PRABHURAM NAGAR, KATEMANIVALI, KALYAN (E)- 421306. PAN: AGVPD4427H VS. DCIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN. APPELLANT RESPONDE NT APPELLANT BY : MR. V. CHANDRASHEKHAR WITH MR. HARSHAD SHAH (AR) RESPONDENT BY : MS. POOJA SWAROOP (DR) DATE OF HEARING : 30.11.2018 DATE OF PRONOUNCEMEN T : 30.11.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS GROUP OF SIX APPEALS BY ASSESSEE UNDER SECTION 253 OF INCOME-TAX ACT ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-1, THA NE DATED 23.11.2016 FOR ASSESSMENT YEARS 2005-06 TO 2010-11. IN ALL APPEAL, THE ASSESSEE HAS RAISED SOME COMMON GROUNDS OF APPEAL, THE LD. CIT(A) PASSE D THE CONSOLIDATED ORDER FOR ALL YEARS, THEREFORE, ALL APPEALS WERE CL UBBED, HEARD TOGETHER AND ARE DECIDED BY A CONSOLIDATED ORDER. IN APPEAL FOR ASSESSMENT YEAR 2005- 06, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1) THE COMMISSIONER OF INCOME TAX (APPEALS)-L THANE (CIT(A)) HAS ERRED IN LAW AND ON FACTS BY HOLDING THAT THE ASSESSMENT FOR A.Y.2005-06 HAS BEEN VALIDLY REOPENED IN ACCORDANCE WITH LAW. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 3 2) THE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSMEN T ORDER PASSED U/S 143(3) R.W.S. 147 OF THE ACT DATED 28TH JANUARY, 2013 IS B AD IN LAW AND VOID AB-INITIO ON THE FOLLOWING AMONGST OTHER GROUNDS WHICH ARE WI THOUT PREJUDICE TO ONE ANOTHER: A) THE ASSESSMENT PROCEEDINGS ARE BAD IN LAW AS NO INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. B) THE NOTICE U/S 148 HAS BEEN ISSUED AFTER PERIOD OF 4 YEARS EVEN WHEN THE ASSESSEE HAS DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. C) THE IMPUGNED ORDER HAS BEEN PASSED ON THE BASIS OF CHANGE OF OPINION. D) THE IMPUGNED ORDER HAS BEEN PASSED ON CONJECTURE S AND SURMISES AND NOT ON THE BASIS OF FACTS AND DOCUMENTS FURNISHED TO TH E ASSESSING OFFICER. E) THE ORDER DISPOSING OF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE REASONS FOR REOPENING ASSESSMENT HAS NOT BEEN PASSE D. 3) THE CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS BY CONFIRMING THE DISALLOWANCE OF DEDUCTION OF RS.9,65,613/- U/S.80IB (4) OF THE ACT. THE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 9,65,613/- U/S. 80IB(4) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFI CER, WHILE COMPLETING THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 UNDER SECTIO N 143(3) ON 29.12.2011, DISALLOWED DEDUCTION UNDER SECTION 80IB (4). THE ASSESSING OFFICER WHILE DISALLOWING DEDUCTION OF 80 IB(10) H OLD THAT THE ASSESSEE HAVE SHOWN THE PURCHASES OF MACHINERY ON 28.03.2004 FROM JHAJJAR HARYANA AND IT WAS AND THAT THE ASSESSEE SHOWN ITS PRODUCTION BEFORE 31.03.2004 AND THAT IT WAS NOT HUMANLY PROBABLE TO START PRODUCTION WITHIN THREE DAYS. THEREFORE, THE ASSESSEE FAILED TO COMP LETE THE CONDITIONS PRESCRIBED IN SECTION 80IB(4) I.E. UNDERTAKING SHOU LD BE MANUFACTURING UNDERTAKING AND IT SHOULD HAVE STARTED ITS MANUFAC TURING ACTIVITIES ON OR BEFORE 31.03.2004. THE ASSESSING OFFICER IN THIS BA CKDROP TOOK THE VIEW THAT THERE WAS ESCAPEMENT OF INCOME FOR THE YEAR UN DER CONSIDERATION (FOR ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 4 AY 2005-06) WITHIN THE MEANING OF SECTION 147 OF TH E ACT. ACCORDINGLY, NOTICE UNDER SECTION 148 DATED 30.03.2012 WAS ISSUE D TO THE ASSESSEE. THE ASSESSEE VIDE REPLY DATED 25.04.2012 DATED 29.12.20 10 CHALLENGED THE VALIDITY OF RE-OPENING. IN THE REPLY, THE ASSESSEE CONTENDED THAT THE ASSESSMENT WAS RE-OPENED AFTER FOUR YEAR FROM THE E ND OF ASSESSMENT YEAR. THE ASSESSMENT CANNOT BE RE-OPENED UNLESS THE ASSES SEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT. IT WAS CONTENDED THAT ASSESSEE DISCLOSED ALL THE MATERIAL FACTS FULLY AND TRULY WHILE FILING RETURN OF INCOME. THE ASSESSEE ALSO MENTIONE D THAT THE REASONS RECORDED FOR RE-OPENING DOES NOT MENTION ANYTHING A BOUT SUCH FAILURE ON THE PART OF ASSESSEE. THUS, THE ASSESSEE CLAIMED THAT N OTICE UNDER SECTION 148 IS BAD-IN-LAW AND VOID AB-INITIO. THE CONTENTION OF AS SESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUD ED THAT THE CLAIM OF DEDUCTION UNDER SECTION 80IB(4) BY ASSESSEE IS NOT ALLOWABLE. THE ASSESSEE FAILED TO START THE BUSINESS ACTIVITIES BEFORE MARC H 2004. THEREFORE, THE ASSESSEE VIOLATED THE CONDITION LAID DOWN IN SECTIO N 80IB(4). THE MANUFACTURING BEFORE MARCH 2004 IS THE BASIC CONDIT ION FOR CLAIMING DEDUCTION UNDER SECTION 80IB(4) AND FAILURE TO FULF IL THE BASIC CONDITION FOR DEDUCTION UNDER SECTION 80IB(4) IS CLEARLY MENTIONE D IN THE REASONS RECORDED. THE SATISFACTION OF ASSESSING OFFICER IS BASED ON THE FINDING IN THE ASSESSMENT PROCEEDING FOR ASSESSMENT YEAR 2009-10. THEREFORE, IT IS NOT A CASE OF CHANGE OF OPINION. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 5 3. THE ASSESSING OFFICER PROCEEDED TO MAKE THE RE-ASSE SSMENT AND DISALLOWED DEDUCTION UNDER SECTION 80IB(4) OF RS. 9,65,613/- V IDE ASSESSMENT ORDER DATED 28.01.2013 PASSED UNDER SECTION 143(3) R.W.S 147 OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSI NG OFFICER FOR RE-OPENING AND MAKING DISALLOWANCE UNDER SECTION 80IB(4) WAS C ONFIRMED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE A SSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUND NO .1 & 2 RELATES TO THE VALIDLY OF RE-OPENING NOT IN ACCORDANCE WITH LAW. T HE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSMENT WAS RE-OPENED AFTER FOU R YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. NO NEW MATERIAL FOUND FOR RE-OPENING THE COMPLETED ASSESSMENT. THE ASSESSEE MADE FULL DISCLO SURE AT THE TIME OF ORIGINAL ASSESSMENT. THE NOTICE UNDER SECTION 148 D ATED 30.03.2012 WAS SERVED AFTER FOUR YEARS FROM THE END OF ASSESSMENT YEAR. NO FRESH MATERIAL WAS ALLEGED BY THE ASSESSING OFFICER NOR ALLEGATION THAT ASSESSEE FILED FALSE STATEMENT DURING THE ORIGINAL ASSESSMENT. AT THE TI ME OF PASSING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10 UNDER SECTION 143(3) ON 29.12.2011, THE ASSESSING OFFICER NOTED AS A COMMON SENSE IT IS HUMANLY IMPROBABLE TO ESTABLISH A MANUFACTURING UNIT AND SA LE THE FINISHED GOODS ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 6 WITHIN SPAN OF THREE DAYS . THUS, NO VALID REASONS WERE RECORDED BEFORE MAKING RE-OPENING. 5. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT ASS ESSING OFFICER HAS NOT DISPOSED OFF OF THE ASSESSEES OBJECTION. THE OBJEC TION WERE DISPOSED OFF ONLY AT THE TIME OF PASSING THE ASSESSMENT ORDER UN DER SECTION 143(3) R.W.S 147 ON 28.01.2013, WHICH IS AGAINST THE LAW SETTLED BY HONBLE APEX COURT IN GKN DRIVESHAFTS (259 ITR 19), IN DECISION BY JUR ISDICTIONAL HIGH COURT IN ASIAN PAINTS (296 ITR 90) AND KSS PETRON PVT. LD . (ITA NO. 224/2014), KELVINATOR INDIA (320 ITR 561(SC) AND HINDUSTAN LEV ER VS. R. B. WADKAR (268 ITR 332 (BOM. HC), KARNATAKA HIGH COURT IN DUL RAJ U JAIN VS ACIT (ITA NO. 1641OF 2018). 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF AUTHORITIES BELOW. THE LD. DR FOR THE REVENUE FURTH ER SUBMITS THAT OBJECTION OF THE ASSESSEE WAS DISPOSED OF AS PER THE ORDER OF ASSESSMENT AND THE ASSESSEE WAS AWARE ABOUT THE DISPOSAL OF OBJECTION. 7. IN THE REJOINDER SUBMISSION, THE LD. AR OF THE ASSE SSEE INSISTED THAT THE ASSESSING OFFICER NEVER COMMUNICATED THE ASSESSEE A BOUT THE DISPOSAL OF OBJECTION WHICH IS MANDATORY ON THE PART OF ASSESSI NG OFFICER AS PER THE DECISION OF JURISDICTIONAL HIGH COURT IN ASIAN PAIN TS (SUPRA) SINCE IN SEPARATE ORDER WAS PASSED IN DISPOSING OF OBJECTION . THEREFORE, THE SUBSEQUENT ACTION OF ASSESSING OFFICER IS VOID AB-I NITIO. THE LD AR FURTHER SUBMITS THAT EVEN DURING THE FIRST APPELLATE STAGE THE ASSESSEE DEMANDED THE ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 7 COPY OF THE ORDER DISPOSING OF THE OBJECTION, WHICH WAS NOT MADE AVAILABLE TO THE ASSESSEE. 8. ON THE CONSIDERING THE CONTENTION OF BOTH THE PARTI ES, WE DIRECTED THE LD. DR TO CALL THE ASSESSMENT RECORD. ON OUR DIRECTION ASS ESSMENT RECORD FOR ASSESSMENT YEAR 2005-06 TO 2008-09 WAS BROUGHT . TH E RECORD WAS PERUSED IN THE PRESENCE OF LD. DR FOR THE REVENUE AND LD. A R OF THE ASSESSEE. ON PERUSAL OF ORIGINAL RECORD, THE LD. DR FOR THE REVE NUE SUBMITS THAT THERE IS NO SEPARATE ORDER AVAILABLE ON RECORD DISPOSING THE OBJECTION NOR THERE IS ANY REFERENCE IN THE ORDER SHEET THAT THE OBJECTION S RAISED BY THE ASSESSEE WAS DISPOSED OFF BY ASSESSING OFFICER. THE LD. DR W AS DIRECTED TO PLACE ON RECORD THE COPY OF ORDER-SHEET OF ASSESSMENT RECORD , THE LD. DR PLACED ON RECORD THE COPY OF ORDER-SHEET. THE PERUSAL OF ORDE R-SHEET REVEALS THAT THERE IS NO REFERENCE ABOUT THE DISPOSAL OF OBJECTION. TH E ASSESSEE WAS ALSO DIRECTED TO FURNISH THE RETURN OF INCOME FOR ASSESS MENT YEAR 2004-05 TOGETHER WITH THE COPY OF STATEMENT OF INCOME TO AS CERTAIN, IF THE ASSESSEE HAS SHOWN IN ITS STATEMENT OF INCOME ABOUT THE STAR TING OF MANUFACTURING ACTIVITIES. THE LD. AR OF THE ASSESSEE FURNISHED TH E COPY OF RETURN OF INCOME ALONG WITH THE COMPUTATION OF INCOME AND OTHER EVID ENCES. 9. THE FACTS FOR A.Y. 2006-07 TO 2008-09 ARE ALMOST SI MILAR EXCEPT VARIATION OF FIGURES OF DISALLOWANCE UNDER SECTION 80IB(4) AND V ARIOUS DATES. (A) FOR AY 2006-07, THE LD AR SUBMITS THAT NO REASONS RECORDED WERE SUPPLIED TO THE ASSESSEE DESPITE REPEATED REQUEST, THIS FACT WAS ADMITTED ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 8 BY ASSESSING OFFICER IN HIS REMAND REPORT FURNISHED DURING FIRST APPELLATE STAGE, WHICH IS DISCERNABLE AT PAGE 25 OF THE ORDER OF LD CIT(A). (B) FOR AY 2007-08, THE LD AR SUBMITS THAT NO REASONS R ECORDED WERE SUPPLIED TO THE ASSESSEE DESPITE REPEATED REQUEST, THIS FACT WAS ADMITTED BY ASSESSING OFFICER IN HIS REMAND REPORT FURNISHED DURING FIRST APPELLATE STAGE, WHICH IS DISCERNABLE AT PAGE 24 OF THE ORDER OF LD CIT(A). (C) FOR AY 2008-09, THE LD. AR SUBMITS THAT NOTICE UNDE R SECTION 148 WAS SERVED ON 26.02.2014. THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE ON 16.04.2014 AND DEMANDED REASONS OF RE-OPENING. THE REASONS WERE SUPPLIED AFTER 7 MONTHS VIDE LETTER DA TED 28.11.2014. NOTICE UNDER SECTION 143(2) AND 142 WAS SERVED ON 2 8.11.2014, WITHOUT DISPOSAL OF OBJECTIONS. THE ASSESSEE AGAIN FILED OB JECTION ON 15.01.2015 (PER PAGE 28 TO 39 OF PB) TO DECIDE THE OBJECTION. THE OBJECTIONS WERE DISPOSED OF AS PER ASSESSING OFFICER LETTER DATED 2 8.11.2014 ON 10.03.2014. THE ASSESSMENT ORDER WAS PASSED ON 23. 03.2015. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06 WAS COMPLETED UNDER SECTION 143(3) ON 23.01.2007. NOTICE UNDER SECTION 148 DATED 30.03.20 12 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE VIDE ITS APPLICATION DATED 2 5.04.2012 DEMANDED THE REASONS RECORDED. THE ASSESSEE WAS FURNISHED FOLLOW ING REASONS OF RE- OPENING: ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 9 IN THIS CASE, ASSESSEE CLAIMED DEDUCTION U/S 80IB ( 4). WHEREAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A. Y. 2009-10 IT WAS SEEN THAT ASSESSEE FAILED TO START BUSINESS ACTIVITIES BEFORE MARCH, 2004. START ING MANUFACTURING BEFORE MARCH 2004 IS BASIC CONDITION FOR CLAIMING DEDUCTIO N U/S 80IB(4). AS ASSESSEE VIOLATED THE CONDITIONS LAID DOWN IN SECTION 80IB ( 4) DEDUCTION, SO CLAIM OF DEDUCTION IS TO BE REJECTED. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT FOR THE A.Y. 2005- 06. 11. THE ASSESSEE VIDE ITS APPLICATION DATED 29.010.2012 FURNISHED THE DETAILED REPLY CONTENDING THEREIN THAT THE ALLEGATION THAT A SSESSEE HAS NOT STARTED MANUFACTURING ACTIVITIES BEFORE MARCH 2004 AND THA T ASSESSEE NOT COMPLIED THE PROVISIONS AS CONTAINED IN SECTION 80IB(4) ARE INCORRECT, THE ASSESSEE STARTED MANUFACTURING BEFORE 31.03.2004. THE ASSESS EE FURTHER CONTENDED THAT HE HAS FURNISHED ALL DOCUMENTARY EVIDENCE WHIC H PROVED THAT ASSESSEE STARTED MANUFACTURING ACTIVITIES BEFORE 31.03.2004. THE ASSESSEE CLAIMED DEDUCTION FROM ASSESSMENT YEAR 2005-06 AS IN THE AS SESSMENT YEAR 2004- 05, THE ASSESSEE INCURRED LOSSES. THE ASSESSING OFF ICER AFTER APPLICATION OF MIND ALLOWED THE DEDUCTION. THEREFORE, THE RE-OPENI NG IS CLEAR CHANGE OF OPINION AND IS NOT ALLOWABLE AS PER THE PROVISION O F INCOME-TAX ACT. THE ASSESSEE FURTHER OBJECTED THAT ASSESSMENT CANNOT BE RE-OPENED AFTER FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR UNLE SS ANY INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT BY REASONS OF THE FAILURES ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIA L FACTS NECESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. THEREFORE, THE ASSESSMENT CANNOT BE RE-OPENED UNLESS ASSESSEE HAS FAILED TO DISCLOSE FU LLY AND TRULY ALL MATERIAL ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 10 FACT. THE ASSESSEE HAS FILED FORM 10CCB DULY CERTIF IED ON CHARTERED ACCOUNTANT GIVING ALL NECESSARY PARTICULARS FOR CLA IM UNDER SECTION 80IB(4) FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESS EE PRAYED THAT THE NOTICE UNDER SECTION 148 IS BAD-IN-LAW AND VOID AB- INITIO AS THE ASSESSING OFFICER HAS NOWHERE MENTIONED THAT ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACT NECESSARY FOR ASSESSMENT AS THERE IS NO SUCH ALLEGATION IN THE REASONS FURNISHED TO THE ASSESSEE AND THAT T HE REASONS HAVE NO VALIDITY. 12. WE HAVE NOTED THAT THE ASSESSING OFFICER HAS NOT DI SPOSED OF THE OBJECTION RAISED BY ASSESSEE BEFORE PASSING THE ASSESSMENT OR DER. 13. THE HONBLE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD. ( SUPRA ) MADE IT CLEAR THAT ON RECEIPT OF REASONS, THE ASSESSEE IS E NTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOU ND TO DISPOSE OF THE SAME BY A SPEAKING ORDER. THE JUDGMENT IS VERY CLEAR THA T BEFORE PROCEEDING WITH THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER H AS TO PASS A SPEAKING ORDER. THEREFORE, THE ASSESSING OFFICER IS BOUND TO PASS AN ORDER AND THEREAFTER ONLY FURTHER PROCEEDINGS COULD BE TAKEN FOR PASSING THE ASSESSMENT ORDER. 14. THE HONBLE JURISDICTIONAL HIGH COURT IN ASIAN PAIN TS (SUPRA) HELD THAT IF THE ASSESSING OFFICER DOES NOT ACCEPT THE OBJECTION S FILED TO NOTICE UNDER SECTION 148, HE SHALL NOT PROCEED FURTHER IN THE MA TTER FOR A PERIOD OF FOUR ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 11 WEEKS FROM THE DATE OF RECEIPT OF SERVICE OF THE SA ID ORDER ON OBJECTIONS ON THE ASSESSEE. 15. THE HONBLE APEX COURT IN KELVINATOR INDIA (SUPRA) HELD THAT AFTER 1.4.1989 THE ASSESSING OFFICER HAS POWER TO REOPEN PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS E SCAPEMENT OF INCOME. THIS JUDGMENT HAS LAID EMPHASIS ON TWO MORE ASPECTS: THA T THERE CAN BE NO REVIEW OF AN ASSESSMENT IN THE GUISE OF REOPENING A ND THAT A BARE REVIEW WITHOUT ANY TANGIBLE MATERIAL WOULD AMOUNT TO ABUSE OF THE POWER. 16. HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD. V. R.B. WADKAR (SUPRA) HAS HELD THAT THE REASONS RECORDED BY TH E ASSESSING OFFICER NOWHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT OF THAT ASSESSMENT YEAR. IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING OFFICER . NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE T O THOSE REASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASO NS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HIS REASON S. IT IS FOR THE ASSESSING OFFICER TO REACH TO THE CONCLUSION AS TO WHETHER TH ERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 12 TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINI ON ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNA MBIGUOUS AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS MIND. REASONS ARE THE MANIFESTATION OF MIND OF THE ASSESS ING OFFICER. THE REASONS RECORDED SHOULD BE SELF-EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. REASONS PROVIDE LINK BETW EEN CONCLUSION AND EVIDENCE. THE REASONS RECORDED MUST BE BASED ON EVI DENCE. THE ASSESSING OFFICER, IN THE EVENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY T HE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, S O AS TO ESTABLISH VITAL LINK BETWEEN THE REASONS AND EVIDENCE. THAT VITAL LINK I S THE SAFEGUARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED ASSESSMENT. TH E REASONS RECORDED BY THE ASSESSING OFFICER CANNOT BE SUPPLEMENTED BY FIL ING AN AFFIDAVIT OR MAKING ORAL SUBMISSION, OTHERWISE, THE REASONS WHIC H WERE LACKING IN THE MATERIAL PARTICULARS WOULD GET SUPPLEMENTED, BY THE TIME THE MATTER REACHES TO THE COURT, ON THE STRENGTH OF AFFIDAVIT OR ORAL SUBMISSIONS ADVANCED. 17. FURTHER, HONBLE BOMBAY HIGH COURT IN KSS PATRON P RIVATE LTD VS ACIT (SUPRA) HELD ONCE IT IS FOUND THAT THE ASSESSMENT O RDER IS WITHOUT JURISDICTION AS LAW LAID DOWN BY HONBLE APEX COURT IN GKN DRIVE SAFTS (SUPRA) HAS NOT BEEN FOLLOWED, THEN THERE IS NO REASON TO RESTORE T HE ISSUE TO THE FILE OF ASSESSING OFFICER TO PASS A FRESH ORDER. IF THIS IS PERMITTED , IT WOULD GIVE A ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 13 FRESH LICENCE TO THE ASSESSING OFFICER TO PASS ORDE R ON RE-OPENING, WITHOUT JURISDICTION (WITHOUT COMPLIANCE OF THE LAW IN ACCO RDANCE WITH PROCEDURE) , YET THE ONLY CONSEQUENCES WOULD BE THAT OF APPEAL, IT WOULD BE RESTORED TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER FOLLOWING THE DUE PROCEDURE. THIS WOULD LEAD TO UNNECESSARY HARASSMEN T TO THE ASSESSEE BY REVIVING STALE/OLD MATTERS. 18. FURTHER, HONBLE BOMBAY HIGH COURT IN DULRAJ U JAIN VS ACIT (WP NO. 1641 OF 2018) HELD IF THE REASONS DO NOT SPECIFY, P RIMA FACIE, THE QUANTUM OF TAX WHICH HAS ESCAPE ASSESSMENT BUT MERELY STATES T HAT IT WOULD BE AT LEAST OF RS. 1 LAKH. PRIME FACIE, WE ARE OF THE VIEW THAT RE ASONS RECORDED DO NOT INDICATE REASONABLE BELIEF OF THE ASSESSING OFFICER HIMSELF TO SHOW THE IMPUGNED NOTICE. THUS PRIME FSI THE IMPUGNED NOTICE IS WITHOUT JURISDICTION. 19. THE HONBLE KARNATAKA HIGH COURT IN CIT VERSUS CHA ITANYA PROPERTIES PRIVATE LIMITED (ITA NO. 205 OF 2015) HELD THAT AS PER PROVISION OF SECTION 147 OF THE ACT, WHERE ASSESSMENT ORDER UNDER SECTIO N 143(3) HAS BEEN MADE IN ANY ASSESSMENT YEAR AND IF AFTER EXPIRY OF FOUR YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR, ACTION IS SOUGHT TO BE TA KEN UNDER SECTION 147, SUCH ACTION CAN ONLY IN CASES WHERE INCOME CHARGEAB LE TO TAX HAS ESCAPE ASSESSMENT FOR SUCH ASSESSMENT YEAR, BY REASONS OF FAILURE ON THE PART OF ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 14 ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR THE ASSESSMENT YEAR FOR THAT ASSESSMENT YEAR. 20. CONSIDERING THE ABOVE LEGAL FACTUAL DISCUSSION AND IMPORTANT FACT THAT ON PERUSAL OF ASSESSMENT RECORD, WHICH WAS BROUGHT BEF ORE US, WE DO NOT FIND THAT THE ASSESSING OFFICER DISPOSED OF THE OBJECTIO N RAISED BY ASSESSEE AGAINST THE VALIDITY OF RE-OPENING IN ACCORDANCE WI TH THE LAW LAID DOWN BY HONBLE APEX COURT IN GKN DRIVESHAFTS (SUPRA) ASIAN PAINTS (SUPRA), THE NON-DISPOSAL OF OBJECTION RAISED BY ASSESSEE RENDER S THE RE-ASSESSMENT AS INVALID . 21. EVEN OTHERWISE THE REASONS RECORDED BY THE ASSESSIN G OFFICER NOWHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSMENT YEAR, THEREFORE, CONSIDERING THE DECISIONS IN OF BOMBAY H IGH COURT IN HINDUSTAN LIVER (SUPRA), THE RE-ASSESSMENT PROCEEDINGS ARE IN VALID. 22. HENCE, THE GROUND NO.1 & 2 OF THE APPEAL RAISED BY ASSESSEE ARE ALLOWED. 23. AS WE HAVE ALREADY HELD THE RE-ASSESSMENT ORDER AS INVALID. THEREFORE, THE DISCUSSION ON GROUND NO.3 BECAME ACADEMIC. 24. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2005 -06 IS ALLOWED. ITA NO. 1490/MUM/2017 FOR A.Y. 2006-07, ITA NO. 149 1/MUM/2017 FOR A.Y. 2007-08, ITA NO. 1492/MUM/2017 FOR A.Y. 20 08-09. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 15 25. WE HAVE NOTED THAT IN ALL THESE APPEALS, THE ASSES SING OFFICER HAS NOT FOLLOWED THE MANDATE OF LAW LAID DOWN BY HONBLE SU PREME COURT IN GKN DRIVESHAFTS (SUPRA) AND HONBLE BOMBAY HIGH COURT IN ASIAN PAIN TS (SUPRA) AS DISCUSSED BY US IN PARA 26 (SUPRA). THEREFORE, T HE RE-ASSESSMENT ORDERS ARE PASSED IN ALL CASES IS HELD INVALID. 26. IN THE RESULT, APPEALS FOR A.Y. 2006-07 TO A.Y. 200 8-09 ARE ALSO ALLOWED. ITA NO. 1493/MUM/2017 FOR A.Y. 2009-10. 27. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1) THE COMMISSIONER OF INCOME TAX (APPEALS)-1 (CIT( A)) THANE HAS GROSSLY ERRED IN LAW AND ON FACTS BY COMING TO THE CONCLUSION THAT THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 29TH DECEMBER, 2011 (THE SAID ASSESSMENT ORDER) IS NOT TIME BARRED. THE CIT(A) OUGHT TO HAVE HELD THAT THE SAID ASSESSMENT ORDER IS BAD IN LAW A ND VOID AB INITIO AS THE SAID ASSESSMENT ORDER IS TIME BARRED. 2) THE CIT(A) OUGHT TO HAVE HELD THAT THE SAID ASSE SSMENT ORDER IS BAD IN LAW AND VOID AB INITIO ALSO ON THE GROUND THAT NO N OTICE U/S.143(2) HAS BEEN SERVED ON THE ASSESSEE BY THE ASSESSING OFFICER AND THAT THE SAID NOTICE HAS BEEN SERVED ONLY BY THE PREDECESSOR I.E. BY THE ITO WARD 3(2) KALYAN. 3) THE CIT(A) OUGHT TO HAVE HELD THAT THE SAID ASSE SSMENT ORDER IS BAD IN LAW AND VOID AB INITIO ALSO ON THE GROUND THAT THE SAID ASSESSMENT ORDER HAS BEEN PASSED ON CONJECTURES AND SURMISES AND NOT ON THE BASIS OF FACTS AND DOCUMENTS FURNISHED TO THE ASSESSING OFFICER. 4) THE CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS BY CONFIRMING THE DISALLOWANCE OF DEDUCTION OF RS.9,07,211/ - U/S.80I B(4) OF THE ACT. THE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 9,07,211/- U/S.80IB(4) OF THE ACT. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. 28. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE MANUFACTURING AND TRADING OF WIRE MESH IN THE NAME & STYLE OF M/S KUMAR WIRE MESH, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009 -10 ON 26.09.2009 DECLARING INCOME OF RS. 28,03,137/-. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 80IB(4). THE RETURN WAS SELECTED FOR ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 16 SCRUTINY. THE ASSESSMENT WAS COMPLETED UNDER SECTIO N 143(3) ON 29.12.2011. DURING THE ASSESSMENT, THE ASSESSING OF FICER NOTED THAT ASSESSEE PURCHASED MACHINERY OF RS. 2,00,000/- ON 2 8.03.2004 AND CLAIMED THAT MACHINE WERE USED FOR MANUFACTURING OF WIRE ME SH. THE ASSESSEE PURCHASED THE MATERIAL ON 27.03.2004 FROM GARG SALE S CO. PVT. LTD., JHAJJAR (HARYANA) AND WAS DELIVERED TO ASSESSEE ON 30.03.20 04. THE ASSESSEE HAS NOT SUBMITTED OCTROI CHALLAN OR TOLL CHALLAN WHICH MAY PROVE THAT MATERIAL WAS ACTUALLY CAME FROM JHAJJAR (HARYANA) TO DAMAN W ITHIN A SPAN OF THREE DAYS. THE ASSESSING OFFICER IN ORDER TO VERIFY THE CLAIM OF THE ASSESSEE RECORDED THE STATEMENT OF PROPRIETOR OF THE ASSESSE E. IN THE STATEMENT, THE PROPRIETOR OF ASSESSEE ADMITTED THAT PRODUCTION WAS STARTED IN FINANCIAL YEAR 2004-05 AND MATERIAL WAS PURCHASED ON 28.03.2004. O N THE BASIS OF STATEMENT, THE ASSESSING OFFICER TOOK HIS VIEW THAT THE ASSESSEE FAILED TO FULFILL THE CONDITION LAID DOWN UNDER SECTION 80IB( 2) FOR CLAIMING EXEMPTION UNDER SECTION 80IB(4). ON APPEAL BEFORE THE LD. CIT (A), THE ACTION OF ASSESSING OFFICER WAS CONFIRMED. HENCE, FURTHER AGG RIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE FILED THE PRESENT APPEAL B EFORE US. 29. WE HAVE HEARD THE SUBMISSION OF LD. AR OF THE ASSES SEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. GROUND NO.1 RELATES TO PASSING THE ASSESSMENT ORDER BEYOND THE TIME LIM IT. THE LD. AR OF THE ASSESSEE SUBMITS THAT LAST DATE FOR PASSING THE ORD ER WAS 31.12.2011. THE ORDER WAS SERVED ON THE ASSESSEE ON 20.01.2012 I.E. AFTER 20 DAYS OF LAST DATE ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 17 OF PASSING THE ASSESSMENT ORDER. THEREFORE, THE ASS ESSMENT ORDER WAS NOT SERVED WITHIN THE STATUTORY PERIOD PROVIDED UNDER S ECTION 153 OF THE ACT BEING TIME BARRED AND DESERVES TO BE QUASHED. 30. WE HAVE NOTED THAT THE ASSESSMENT RELATES TO THE AS SESSMENT YEAR 2009-10. THE ASSESSMENT ORDER WAS PASSED ON 29.12.2011 UNDER SECTION 143(3). THE TIME PERIOD PRESCRIBED DURING THE RELEVANT TIME WAS 24 MONTH FROM THE END OF RELEVANT ASSESSMENT YEAR. THEREFORE, THE ASSESSM ENT ORDER PASSED BY ASSESSING OFFICER ON 29.12.2011 IS WITHIN THE PERIO D AS PRESCRIBED UNDER SECTION 153 OF THE ACT. HENCE, GROUND OF APPEAL RAI SED BY ASSESSEE IS DISMISSED. 31. GROUND NO.2 RELATES TO NON-SERVICE OF NOTICE UNDER SECTION 143(2) BY ASSESSING OFFICER. THE LD. AR OF THE ASSESSEE HAS N OT ARGUED ANYTHING IN SUPPORT OF THIS GROUND OF APPEAL. THE PERUSAL OF RE CORD REVEALS THAT THE STATUTORY NOTICE UNDER SECTION 143(3) WAS SERVED BY ITO WARD-3(2), KALYAN ON 20.08.2010 THROUGH REGISTERED AD. THE ASSESSEE F AILED TO BRING ANY CONTRARY LAW TO OUR NOTICE THAT THE ASSESSING OFFIC ER WAS REQUIRED A FRESH NOTICE IN ADDITION TO THE NOTICE SERVED BY HIS PRED ECESSOR. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY ASSESSEE. HENCE, DISMISSED. 32. GROUND NO.3 RELATES TO PASSING THE ASSESSMENT ORDER ON CONJECTURES AND SURMISES AND NOT ON THE BASIS OF DOCUMENT FURNISHED BY ASSESSEE. THE LD. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 18 AR OF THE ASSESSEE SUBMITS THAT NOT ARGUED ANYTHING AGAINST THIS GROUND. THEREFORE, THIS GROUND IS TREATED AS NOT PRESSED. 33. GROUND NO.4 RELATES TO CONFIRMING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB(4). THE LD. AR OF THE ASSESSEE SUBMITS THAT THE MAIN BUSINESS ACTIVITY OF ASSESSEE IS OF MANUFACTURING OF DIFFERE NT KIND OF WIRE MESH, GRILL, NETTING, FENCING, IRON, WAVE CLOTH OF STAINL ESS STEEL. THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE PRODUCED SUF FICIENT DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER IN ORDER TO E STABLISH THE MANUFACTURING ACTIVITIES COMMENCED BEFORE 31.03.200 4 WHICH CONSIST OF SALE INVOICES TO THE PURCHASE INVOICE, INVOICE FOR PURCHASE OF ASSETS, ELECTRICITY BILLS ETC. THE ASSESSING OFFICER DISREG ARDED ALL THE DOCUMENTARY EVIDENCES. THE LD AR FURTHER SUBMITS THAT THOUGH TH E ASSESSEE STARTED MANUFACTURING ACTIVITY BEFORE 31.03.2004, BUT THE A SSESSEE HAS NOT CLAIMED DEDUCTION UNDER SECTION 80IB(10) FOR AY 2004-05, AS THERE WAS LOSS. THE ASSESSING OFFICER SOLELY RELIED UPON THE ANSWER GIV EN BY ASSESSEE IN RESPONSE TO QUESTION NO. 8 OF THE STATEMENT OF ASSE SSEE, RECORDED UNDER SECTION 131. THE ASSESSING OFFICER HAS NOT TAKEN NO TE OF THE FACT THAT THE STATEMENT WAS RETRACTED BY ASSESSEE VIDE LETTER DAT ED 28.12.2011. THE RETRACTION OF THE ASSESSEE IS SUPPORTED BY AFFIDAVI T OF THE ASSESSEE. THE ASSESSEE FURNISHED ALL THE CONDITION AS PRESCRIBED UNDER SECTION 80IB(2) FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80IB(4). ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 19 34. THE LD. AR OF THE ASSESSEE SUBMITS THAT AS PER THE DIRECTION OF TRIBUNAL HE HAS FURNISHED THE COPY OF RETURN OF INCOME FOR ASSE SSMENT YEAR 2004-05 ALONG WITH THE COMPUTATION OF TOTAL INCOME. THE ASS ESSEE HAS CLEARLY MENTIONED IN NOTE NO.2 TO THE COMPUTATION OF INCOME THAT THE ASSESSEE STARTED NEW INDUSTRIAL UNDERTAKING FOR MANUFACTURIN G WIRE MESH AT DAMAN IN MARCH 2004. THE ASSESSEE NOT AVAILED THE BENEFIT OF EXEMPTION UNDER SECTION 80IB(4) IN AY 2004-05, AS THERE WAS NO PROF IT FROM NEW INDUSTRIAL UNDERTAKING. THE LD AR FOR THE ASSESSEE SUBMITS THA T UNLESS ASSESSMENT FOR AY 2004-05 IS DISTURBED, NO SUBSEQUENT ASSESSMENT C AN BE DISTURB. THE ASSESSEE HAS PLACED ON RECORD THE PROVISIONAL CERTI FICATE REGISTRATION AS SSI UNIT DATED 01.03.2004 (PAGE NO. 41 TO 46 OF PB), CE NTRAL SALE TAX REGISTRATION DATED 03.03.2004, CONSENT TO ESTABLISH UNIT UNDER WATER ACT 03.03.2004, WATER CONNECTION DATED 03.03.2004, POWE R CONSENT FROM ELECTRICITY DEPARTMENT DATED 03.03.2004, SANCTION L ETTER FROM DEPARTMENT OF INDUSTRY IN DAMAN & DIU FOR PERMISSION TO PROVIS IONALLY MANUFACTURED ADDITIONAL ITEM DATED 10.03.2004. CERTIFICATE OF SA LE TAX REGISTRATION DATED 12.03.2004, CERTIFICATE OF EXPORT & IMPORT CODE DAT ED 24.03.2004, SANCTION OF ELECTRICITY CONNECTION DATED 15.03.2004 , ADDITIONAL ELECTRICITY DEPARTMENT CONNECTION DATED 15.03.2004, ELECTRICITY BILL FOR MARCH-APRIL DT. MAY 2004, ELECTRICITY BILLS FOR FY 2004-05, ELE CTRICITY BILL FOR MARCH- APRIL DT. MAY 2004, MACHINERIES PURCHASE INVOICE FR OM BABA ENGINEERING DT. 28.03.2004, RAW MATERIAL PURCHASE BILL FROM GARG SALES ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 20 CO. PVT. LTD. DT. 27.03.2004, SALES INVOICE TO M/ S AMBICA ENGG & WIRES IND DT. 31.03.2004, COPY OF STATEMENT RECORDED BY AO OF APPELLANT ON 19.12.2011, RETRACTION AFFIDAVIT OF APPELLANT DATED 26.12.2011 AND SALES TAX RETURNS FOR MAR 2004 & APRIL 2004 TO MARCH 2005 . THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSING OFFICER HAS NOT GIVEN HIS FINDING ON THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. TH E ASSESSING OFFICER SOLELY BASED HIS FINDING ON THE ANSWER GIVEN IN RES PONSE TO QUESTION NO.8 OF THE STATEMENT OF ASSESSEE RECORDED BY HIM. THERE IS NO FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT FULFILL ED THE REQUISITE CONDITIONS AS PRESCRIBED UNDER SECTION 80IB(2) OF THE ACT, FOR TH E YEAR UNDER CONSIDERATION. 35. ON THE OTHER HAND THE LD. DR FOR THE REVENUE SUPPOR TED THE ORDER OF THE AUTHORITIES BELOW. THE LD DR FOR THE REVENUE FURTHE R SUBMITS THAT THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 13 1 OF THE ACT CLEARLY ADMITTED THAT THE PRODUCTION MAY HAVE STARTED IN NO VEMBER/ DECEMBER 2004. THE LD DR FURTHER SUBMITS THAT THE ASSESSEE I S SIMPLY ENGAGED IN WELDING OF THE WIRE, WHICH DOES NOT AMOUNT TO MANUF ACTURING QUALIFY FOR DEDUCTION UNDER SECTION 80IB(4). 36. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE PE RUSAL OF RETURN OF INCOME REVELS THAT THE ASSESSEE HAS SHOWN PRODUCTION IN TH E NEW INDUSTRIAL UNDER TAKING FROM MARCH 2004. HOWEVER, THE ASSESSEE HAS N OT CLAIMED EXEMPTION ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 21 UNDER SECTION 80IB(4) FOR AY 2004-05 AS THERE WAS N O PROFIT IN THAT ASSESSMENT YEAR. THIS FACT HAS BEEN CLEARLY MENTION ED BY THE ASSESSEE IN NOTE 2 ANNEXED WITH THE COMPUTATION OF INCOME FOR A Y 2004-05. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 80IB(4) ON LY FROM AY 2005-06 ONWARDS. THERE IS NO FINDING OF THE ASSESSING OFFI CER THAT THE ASSESSEE IS NOT ENGAGED IN MANUFACTURING ACTIVITIES IN ALL SUBSEQUE NT ASSESSMENT YEARS. NOW WE ARE CONCERNED WITH AY 2009-10. 37. THE ASSESSING OFFICER DISALLOWED EXEMPTION UNDER SE CTION 80IB(4) ON TWO COUNTS I.E (I) THE ASSESSEE SHOWN THE PURCHASE OF M ACHINERY ON 27 TH MARCH 2004 FROM JHAJJAR HARYANA AND THE DATE OF DELIVERY OF MACHINE IS 30 TH MARCH 2004 AND THAT IT WAS NOT HUMANLY POSSIBLE TO START PRODUCTION WITHIN THREE DAYS. (II) WELDING OF WIRE IS NOT MANUFACTURING. IN OUR VIEW THE STARTING OR NOT STARTING OF PRODUCTION IN THE MONTH OF MARCH 20 04 IN NEWLY ESTABLISHED UNIT MAY BE RELEVANT FACT FOR SEEKING EXEMPTION UND ER SECTION 80IB(4)FOR AY 2004-05. IN FACT THE ASSESSEE HAS NOT CLAIMED SU CH EXEMPTION FOR AY 2004-05. THE ASSESSING OFFICER DOUBTED THE PRODUCTI ON IN MARCH 2004 ONLY AND REOPENED THE ASSESSMENT FOR 2005-06 TO 208-09. THE ASSESSEE FOR THE FIRST TIME CLAIMED THE EXEMPTION OF SECTION 80IB(4) FROM AY 2005-06 ONWARDS. THERE IS NO ALLEGATION OF THE ASSESSING OF FICER THAT THE ASSESSEE NOT STARTED PRODUCTION IN AY 2005-06. THE LD CIT(A) CON FIRMED THE ACTION OF ASSESSING OFFICER HOLDING THAT THE ASSESSEE STARTED HIS BUSINESS FROM RENTED ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 22 PREMISES AND THUS NOT FULFILLED THE CONDITION OF SE CTION 80IB(2) OF THE ACT AND THAT BUSINESS CARRIED OUT BY THE ASSESSEE IS NO T MANUFACTURING ACTIVITIES. 38. THE ASSESSEE IS ENGAGED IN THE MANUFACTURING OF ST EEL WIRE MASH, THIS FACT IS NOT DISPUTED BY THE LOWER AUTHORITIES. THE LOWER AU THORITIES HAVE DISPUTED THAT MARE WELDING OF WIRE IS NOT PART OF MANUFACTUR ING PROCESS. THE ASSESSEE IS MAKING NEW PRODUCT FROM STEEL WIRE BY CONVERTING IT INTO A WIRE MASH, WHICH IS DISTINCT PRODUCT AND MARKETABLE SEPARATELY FROM THE RAW MATERIAL . THE NATURE OF BUSINESS ACTIVITY OF ASSESSEE IS ALSO NOT DISPUTED BY THE LOWER AUTHORITIES. THE HONBLE MADRAS HIGH COURT IN CIT VS ESQUIRE TRANSLAM INDUSTRIES [2012] 25 TAXMANN.COM 98 (MAD) HELD THAT CONVERSION OF RAW MATERIAL, NAMELY ELECTRICAL STEEL IN TO LAMINATION, WHICH IS A DISTINCT COMMERCIAL PRODUCT, MARKETABLE SEPARATELY FROM RAW MATERIAL, AMOUNTS TO MANUFARURE FOR THE PURPOSE OF SECTION 80IB. THERE FORE, RESPECTFULLY FOLLOWING THE RATION OF DECISION OF HONBLE MADRAS HIGH COURT, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENGAGED IN THE BUSINE SS OF MANUFACTURING ACTIVITIES AND IS ENTITLED FOR THE EXEMPTION OF SEC TION 80IB(4) OF THE ACT. THE OTHER OBJECTION OF THE LOWER AUTHORITIES THAT T HE ASSESSEE IS RUNNING HIS BUSINESS ACTIVITY IN A RENTED ACCOMMODATION IS ALSO MISCONCEIVED AS THERE IS NO SUCH CONDITION PRESCRIBED IN THE SUBSECTION (2) OF SECTION 80IB. IN THE RESULT THE GROUND NO. 4 OF THE APPEAL IS ALLOWED. 39. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NO. 1494/MUM/2017 FOR A.Y. 2010-11. ITA NO. 1489 TO 1494 MUM 2017-SHRI KRISHNAKUMAR VIJ AYASHANKAR DUBEY 23 40. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1) THE COMMISSIONER OF INCOME TAX (APPEALS)-1 (CIT( A)) THANE OUGHT TO HAVE HELD THAT THE ASSESSMENT ORDER PASSED U/S.143( 3) OF THE ACT DATED 4TH MARCH, 2013 (THE SAID ASSESSMENT ORDER) IS BAD IN L AW AND VOID AB INITIO AS THE SAID ASSESSMENT ORDER HAS BEEN PASSED ON CONJEC TURES AND SURMISES AND NOT ON THE BASIS OF FACTS AND DOCUMENTS FURNISHED T O THE ASSESSING OFFICER. 2) THE CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS BY CONFIRMING THE DISALLOWANCE OF DEDUCTION OFRS.10,04,176/- U/S.80IB (4) OF THE ACT. THE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 10,04,176/- U/S.80IB(4) OF THE ACT. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. 41. GROUND NO. 1 OF THE APPEAL IS GENERAL IN NATURE. TH E LD AR FOR THE ASSESSEE HAS NOT MADE ANY SPECIFIC SUBMISSIONS, THEREFORE TH IS GROUND OF APPEAL IS TREATED AS NOT PRESSED AND THUS DISMISSED. 42. GROUND NO. 2 IDENTICAL TO THE GROUND NO. 4 OF APPE AL FOR AY 2009-10, WHICH WE HAVE DECIDED IN FAVOUR OF THE ASSESSEE. TH US FOLLOWING THE PRINCIPAL OF CONSISTENCY THIS GROUNDS OF APPEAL IS ALSO ALLOWED WITH SIMILAR DIRECTION. 43. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN C OURT ON 30 /11/2018. SD/- SD/- G.S. PANNU PAWA N SINGH VICE-PRESIDENT JUDICIAL MEMBER MUMBAI, DATE: 30 .11.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI