M/s. Bulsar Plastics, Nani Daman V. The Income tax Officer,Vapi Ward-4, Daman

ITA 1532/AHD/2011

• Counselvise Citation: 153220514 RSA 2011
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 10-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAWANSHI
• Assessee Lawyers: RAJESH UPADHYAYAR
• Keywords: Depreciation; Onus to prove
• Section: 80IB; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.1532/AHD/2011 ASSESSMENT YEAR : 2006-07 M/S.BULSAR PLASTICS GALA NO.102,PLOT NO.11 PREMIER INDL.ESTATE KACHIGAM, NANI DAMAN VS. INCOME TAX OFFICER VAPI, WARD-4 DAMAN PAN/GIR NO. : AAGFB 5858 B ( A PPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI RAJESH UPADHYAY,AR REVENUE BY: SHRI G.S. SOURYAWANSHI, DR DATE OF HEARING : 10/08/2011 DATE OF PRONOUNCEMENT : 26/8/2011 O R D E R A.N.PAHUJA : THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 28/02/2011 OF THE LD. CIT(APPEALS)- VALSAD ,FOR THE ASSESSMENT YEAR 2006- 07, RAISES THE FOLLOWING GROUNDS:- (1) ITO HAS ERRED IN LAW AND ON FACTS TO DISALLOW CLAIM OF DEDUCTION U/S.80IB OF THE ACT WITHOUT CONSIDERING EVIDENCES ON RECOR D. CIT(APPLS.) HAS ALSO ERRED IN CONFIRMING A.O.S FINDING WITHOUT CONSIDERING FACTS AND EVIDENCES PLACED BEFORE HIM VIDE WRIT TEN SUBMISSION. (2) ITO HAS ERRED IN LAW AND ON FACTS TO ADD FURTHER CA PITAL CONTRIBUTION MADE BY PARTNERS, SUM TOTAL OF WHICH IS RS.7 0,000/- AS INCOME OF THE APPELLANT FIRM (1) SMT. NEELAM PREMNATH RS.20,000/- (2) SMT. RUSHALI R.MAJUMDAR RS.30,000/- (3) RAJENDRA M.JAISWAL RS.20,000/- RS.70,000/- LD..CIT(APPLS.) HAS ALSO ERRED IN CONFIRMING ADDITION M ADE BY ITO IGNORING THE FACTS AND EVIDENCES FILED BEFORE ITO AS WELL AS BEFORE HIM. ITA NO.1532/AHD/2011 - 2 - (3) LR. A.O. HAS ERRED IN LAW AND ON FACTS TO DEDUCT L OSS OF RS.10,390/- WHICH IS NOT UNABSORBED LOSS OF THE FIRM AN D CARRIED FORWARD TO BE ADJUSTED AGAINST SUBSEQUENT YEARS INCOME OF THE APPELLANT FIRM. LR. CIT(APPLS.) HAS ERRED IN CONFIRM ING ITOS ACTION. (4) ADDITION MADE IN PARA (2) OF THIS APPEAL MEMO AS INCOME OF THE APPELLANT FIRM IS BEING INCOME EARNED FROM THE BUSINESS OF MANUFACTURING ACTIVITY OF INDUSTRIAL UNDERTAKING, DEDUCTI ON U/S.80IB MAY BE ALLOWED. 2. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING NIL INCOME FILED ON 30/12/2006 BY THE ASSESSEE, MANUFACTURING PLASTIC ROLLS AND BAGS, AFTER B EING PROCESSED ON 20.12.2006 U/S.143(1) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT),WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF NO TICE U/S.143(2) OF THE ACT ON 20/02/2007. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE ASSESSEE CLAI MED DEDUCTION OF RS.7,57,771/- U/S.80IB OF THE ACT. ON PERUSAL OF DE TAILS OF MACHINERY, FIRST ELECTRIC BILL AND A COPY OF FACTORY LICENSE, THE AO NOTICE D THAT THE SAID LICENSE WAS ISSUED TO THE ASSESSEE ONLY ON 08/08/2005.SINCE IN TER MS OF PROVISIONS OF SEC. 6 OF THE FACTORY ACT, A FACTORY CANNOT BE STARTE D WITHOUT THE LICENSE WHILE THE ASSESSEE CLAIMED THAT THEY STARTED PRODUCTION IN THE UNDERTAKING ON 16/02/2004, THE AO ASKED THE ASSESSEE AS TO WHY DEDUCTION U/S.80-IB OF THE ACT BE NOT DENIED. IN REPLY, THE ASSESSEE SUBMITTED VI DE LETTER DATED 14/011/2008 THAT FACTORY LICENSE WAS NECESSARY AS PER PROV ISIONS OF FACTORY ACT, ENACTED TO PROTECT THE WORKERS. THERE IS NOTHING UNDER THE PROVISIONS OF THE ACT THAT TO PROVE PRODUCTION OR MANUFACTURING, DAT E OF REGISTRATION UNDER FACTORY ACT OR SSI PERMANENT REGISTRATION CERTIFICATE ARE CONCLUSIVE AND ONLY EVIDENCE. WHILE SUBMITTING COPIES OF LEASE DEED OF THE FACTORY, P OWER RELEASE ORDER OF THE G.E.B, F IRST ELECTRIC BILL AND PURCHASE/SALE BILL AND DATES OF PURCHASE OF FOLDERS MACHINE, BOTTOM MACHINE AND WEB GUIDING MACHINE, THE ASSESSEE PLEADED THAT THEY WERE ENTITLED T O DEDUCTION U/S.80IB OF THE .ACT. HOWEVER, THE AO DID NOT ACCEPT THE CONT ENTIONS OF THE ASSESSEE ON THE GROUND THAT DETAILS OF PURCHASE OF MACHINERY ON 23.2.2005 AND FIRST ELECTRIC BILL EVIDENCING THAT THE ASSESSEE CONSUMED ONLY 1 1 UNITS IN MARCH, ITA NO.1532/AHD/2011 - 3 - MARCH, 2004 TO JULY, 2004 ,ESTABLISHED THAT THE ASSESSEE CO MMENCED PRODUCTION ONLY AFTER 31.03.2004. SINCE THE ASSESSEE DID NOT FURNISH ANY EVIDENCE REGARDING MANUFACTURING ACTIVITY ON 16/02/200 4 WHILE COPY OF FACTORY LICENSE REVEALED THAT PRODUCTION STATED ON 08/08 /2005, THE AO DENIED DEDUCTION U/S.80IB OF THE ACT. 3. ON APPEAL, THE LD. CIT(APPEALS) UPHELD THE FINDIN GS OF THE AO IN THE FOLLOWING TERMS:- 4.1 DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. I HAVE ALSO PERUSED THE ASSESSMENT ORDER AND THE SUBMISSION MADE BY THE AR. FIRST OF ALL I AM IN COM PLETE AGREEMENT WITH THE DECISIONS OF THE HON'BLE ITAT, AHMEDABAD, IN THE CASE OF M/S SAMRATH HEALTH CARE D TD. 5/6/2009 WHEREIN IT WAS HELD THAT THE FACTORY LICEN SE IS NOT THE MANDATORY REQUIREMENT FOR ALLOWING THE BENE FITS U/S.8O-IB OF THE ACT. WHAT IS IMPORTANT IN THIS CAS E IS WHETHER THE APPELLANT HAS MANUFACTURED OR PRODUCED GOODS ON OR BEFORE 31.03.2004 CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. I HAVE PERUSED THE EVIDE NCES PRODUCED BY THE AR BEFORE THE AO AND BEFORE THE APP ELLATE PROCEEDING. SEQUENTIALLY ALL THOSE EVIDENCES ARE DI SCUSSED AS UNDER: I. LEASE DEED OF FACTORY GALA DATED. 24/2/2004. THE FACT IS NOT DISPUTED. II. SALES TAX REGISTRATION CERTIFICATE NO.DA/7409 D ATED. 15/03/2004. THIS IS PROCEDURAL ASPECTS AND THIS CER TIFICATE DOES NOT INDICATE THE DATE OF PRODUCTION/MANUFACTUR ING OF GOODS. THE REQUIREMENT IN THIS CERTIFICATE IS IN CO NNECTION WITH THE SALES AND CHARGEABILITY OF SALES TAX ON TH E ITEMS SOLD. III. CENTRAL SALES TAX REGISTRATION CERTIFICATE NO. DA/SCT/6448 DATED. 15/3/2004. THE OBSERVATION IS TH E SAME AS IN POINT (II) ABOVE. IV. SSI CERTIFICATE NO.3867/03-04 DATED. 01/03/2004 . THIS IS AGAIN A PROCEDURAL ASPECT FOR PUTTING UP A UNIT FOR MANUFACTURING. THE APPELLANT DID NOT PRODUCED THE C OPY OF THE SAID CERTIFICATE TO VERIFY THE DATE OF PRODUCTI ON CERTIFIED BY THE CONCERNED AUTHORITY BECAUSE AS PER THE REQUI REMENT THIS SSI CERTIFICATE IS ISSUED PROVISIONALLY VALID FOR 5 YEARS ITA NO.1532/AHD/2011 - 4 - AND THE PROVISIONALITY OF THE CERTIFICATE AUTOMATIC ALLY LAPSE IF THE PRODUCTION OF THE UNIT BEGAN. V. FIRST PURCHASE BILL OF MACHINERY:- BOTTOM SEALI NG MACHINE WITH ELECTRICAL BOARD. BILL NO. 54 DATED. 1 1/3/2004 PURCHASED FROM M/S INTECH PLASTIC MACHINERY COSTING RS.81,120/- + RS.2,000/- FREIGHT CHARGE TOTALING TO RS.83,120/-. CLOSE LOOK AT THE SAID BILL REVEALS TH AT THIS INVOICE COPY /BILL DOES NOT INDICATE DELIVERY CHALL AN NO & DATE, TRANSIT RECEIPT NO. & DATE, DESPATCHED NO. & DATE. THE APPELLANT DID NOT SUBMIT ANY PURCHASE ORDER COP Y, WHEN DID THE APPELLANT APPROACHED THE SELLER OF THE MACHINE, WHETHER THE MACHINE IS READILY AVAILABLE O R MANUFACTURED ON ORDER, WHEN THE MACHINE WAS DELIVER ED AT THE SITE. THE BILL ALSO MENTIONED OF ELECTRICAL AND PANEL BOARD ALONG WITH THE MACHINERY. THE APPELLANT ALSO DEBITED RS.2,000/- AS FREIGHT CHARGES. NO BILL WAS PRODUCED BEFORE ME TO SUPPORT HIS CLAIMED. THE PURPORTED MACHINERY WAS BOUGHT FROM VAPI AND TRANSPORTED TO NANI DAMAN. WHA T WAS THE MODE OF TRANSPORTATION USED, AND THE SIZE O F MACHINERY WAS NOT ASCERTAINABLE FROM THE PURCHASE I NVOICE. THE MACHINERY HAS PASSED THROUGH INTERSTATE FOR WHI CH NO RECORDS PRODUCED TO VERIFY THE 1 MACHINERY WAS ACTU ALLY TRANSPORTED TO THE FACTORY GALA-BEFORE 31 ST MARCH'20O4. THE SPECIFICATION OF ELECTRICAL AND PANEL BOARD IS ABSE NT. MERE SUBMISSION OF INVOICE COPY DOES NOT ESTABLISHED THA T THE MACHINERY WAS DELIVERED ON THE DAY THE INVOICE WAS RAISED. IN THIS SITUATION, THE MACHINERY, EVEN IF PRESUMED TO HAVE PURCHASED, WAS DELIVERED BEFORE 31 ST MARCH 2004. A GLANCE TO THE P&L A/C FOR THE A.Y.2004-05, THE FIRST YEAR IN WHICH THE PURPORTED PRODUCTION WAS DONE, DOES NOT SHOW INSTALLATION CHARGES, LABOUR CHARGES FOR INSTALLATI ON, PURCHASE OF ELECTRICAL FITTINGS ETC. THEREFORE, IN THE ABSENCE OF SUCH NECESSARY EXPENDITURE BEING INCURRED IT IS NOT REASONABLY BELIEVED THAT THE MACHINERY WAS BOUGHT A ND USED FOR THE PRODUCTION. VI. FIRST PURCHASE BILL OF RAW MATERIALS OF RS.22,6 85/- DATED. 27/3/2004. THE RAW MATERIALS USED WAS PLASTI C PRINTED ROLLS (9 ROLLS OF VARIOUS SIZES) BOUGHT FRO M THE RELATED CONCERNS WHICH RAISED SUSPICION. VII. FIRST SALES BILL OF MANUFACTURED PLASTIC BAGS OF RS.31,228/- DATED 29/3/2004. A CLOSE LOOK AT THE PU RCHASE AND BALES BILL REVEALS THAT THEY WERE PREPARED AND WRITTEN BY SAME PERSON BECAUSE THE HAND WRITING PRIMA-FACIE MATCHES IN BOTH THE BILLS. THIS FACTS IS FURTHER ST RENGTHEN BY THE FACTS THAT BOTH JEMINI PLASTIC & BULSAR PLASTIC S HAVE COMMON OFFICE AND RELATED. THE PURPORTED SALE WAS M ADE ITA NO.1532/AHD/2011 - 5 - ON 29.03.2004 TO M/S. MODI SONS, MALVIA ROAD, RAIPU R, CHATISHGARH. NORMALLY THE CONCERNS ARE NAMED AS MOD I & SONS BUT THE INVOICED RAISED HERE IS MODI SONS FURT HER RAISES DOUBT OF THE AUTHENTICITY OF THE BILL. THE B IGGEST MYSTERY WAS HOW A RAIPUR PARTY WANTED TO BUY 5 PACK ETS OF PLASTIC BAGS FROM A CONCERN WHICH IS NOT EVEN TH REE MONTH OLD AND THEIR CREDENTIAL IS YET TO BE VERIFIE D. THE COST OF THE PRODUCT TO THE RAIPUR PARTY AS PER SO CALLED BILL IS RS.31,258/- BUT THE TRANSPORTATION COST FROM WILL A DD HUGE SOME TO THE COST OF THE GOODS. EVEN IF PERSONAL HAN D DELIVERY MADE THE RAIL OR ROAD TRANSPORT COST WILL BE EXUBERANT. IT IS NOT AT ALL COMMERCIALLY VIABLE TO PICK A PRODUCT AS FAR FROM DAMAN. WHAT IS SO UNIQUE ABOUT THE PRODUCT OF THE APPELLANT. WHETHER THIS PRODUCT IS N OT AVAILABLE IN RAIPUR ? IT IS FACT THAT RAIPUR IS A I NDUSTRIAL TRADING CENTRE FOR WESTERN ORISSA AND SOUTH WEST UN DIVIDED MADHYA PRADESH STATE. RAIPUR HAS VARIOUS INDUSTRIES INCLUDING PLASTIC INDUSTRIES. IN THIS CIRCUMSTANCES IT IS NOT BELIEVABLE THAT THE APPELLANT ACTUALLY SOLD THE SAI D GOODS TO A PARTY FROM RAIPUR, CHHATISHGARH. VIII. FIRST ELECTRICITY BILL. RECEIPT NO. 098589 DTD.30/7/2004 FOR THE PERIOD OF 4 MONTHS I.E. MARCH , 2004 TO JULY, 2004 FOR RS.4,520/-. IN THIS REGARDS, THE AO OBSERVED THAT THE BILL WAS RAISED BY THE ELECRICITY DEPTT. F OR 4 MONTHS AND IN ALL THESE FOUR MONTHS ONLY 11 UNITS WERE CON SUMED. IN FACT THE THE AO DID CALLED FOR INFORMATION ABOUT THE PURCHASE OF MACHINERY SINCE INCEPTION AND IN REPLY TO THAT THE APPELLANT HAD FURNISHED DETAILS AS UNDER; NAME OF THE MACHINERY DATE OF PURCHASE. A. WEB GUIDING 11.04.2004 B. BOTTOM MACHINE 11.05.2004 C. FOLDER MACHINE 23.02.2005 FROM THIS WHAT IS EVIDENT IS THAT THE PURPORTED PUR CHASE OF BOTTOM SEALING MACHINE ON 11.03.2004 WAS BOGUS AND NON- EXISTENCE AND SUPPORT MY OBSERVATION IN POINT (III) ABOVE. THEREFORE, IN THE ABSENCE OF MACHINERY IT IS HARD T O BELIEVE THAT THE PRODUCTION WAS DONE BY THE APPELLANT BEFOR E 31 ST . MARCH 2004. IX. FURTHER, THE APPELLANT SUBMITTED COPY OF THE PO WER CONNECTION RELEASE ORDER DATED. 20.03.2004 IN SUPPORT OF HIS CLAIMED. I HAVE PERUSED THE SAID ORDER COPY AND WHAT IT SAYS IS 'APPROVAL IS HEREBY CONVEYED TO RELEASE THE POWER CONNECTION TO YOUR INSTALLATION WITH A CONNECTED LO AD OF 45 HP AT LT VOLTAGE, SUBJECT TO LOAD RESTRICTION AS AN D WHEN ITA NO.1532/AHD/2011 - 6 - REQUIRED BY THE DEPARTMENT. ....................... . THIS RELEASE ORDER IS SUBJECT TO SUBMISSION OF PCC(EST./OPERATE) WITH IN 30 DAYS FROM THE DATE OF THIS ORDER. THE APPELLANT DID NOT SUBMIT ANY EVIDENCE OF SUBMITTING PCC(EST./OPERATE) TO THE ELECTRICITY DEPTT. IN COMPLIANCE TO THE POWER RELEA SE ORDER. THE APPELLANT HAD ALSO NOT SHOWN ANY EXPENDITURE ON THE ELECTRICAL FITTINGS ETC IN THE P&L A/C. PREPARED FO R THE YEAR ENDED 31.03.2004. AS THE AO HAS RIGHTLY POINTED ONL Y 11 UNITS OF POWER WAS CONSUMED BY THE APPELLANT DURING 4 MONTHS FROM MARCH 2004 TO JULY 2004. THE BILL RAISE D BY THE ELECTRICITY DEPTT. FOR RS.4520/- IS THE SUM TOT AL OF MINIMUM CHARGE OF RS.1500/- P.M. ONE SHOULD NOT IGNORE THAT THE APPELLANT HAD PURCHASED 2 MACHINERY I) WEB GUIDING ON 11.04.2004 AND II) BOTTOM MACHINE ON 11.05.2004 BUT NOT BEEN ABLE TO PUT TO USE AS LATE AS JULY 2004. THIS CONCLUSIVELY PROVED THAT THE APPELLANT W AS NOT EVEN READY FOR PRODUCTION TILL JULY 2004. THEREFORE , THE CLAIM OF HAVING PRODUCED / MANUFACTURED PLASTIC BAG S BEFORE 29 TH MARCHED BY THE APPELLANT IS NOT TRUE AND THE FINDING OF THE AO IS JUSTIFIED IN REJECTING THE CLA IM OF BENEFIT U/S. 80-IB. 4.2 BEFORE I CONCLUDE IT IS FAIR TO DEAL WITH THE O THER POINTS RAISED BY THE APPELLANT IN THE INTEREST OF J USTICE. THE FIRST POINT THE APPELLANT CONTENDED THE AO HAD ALLO WED THE DEPRECIATION OF RS.10,390/- AT THE RATE 12.5% FOR T HE MACHINE BOUGHT FOR RS.83,120/- IN THE YEAR ENDING M ARCH 2004. IN THIS REGARDS, IT IS SUFFICE TO POINT OUT T HAT THE R/I FOR THE A.Y.2004-05 (F.Y.2003-04) AND A.Y.2005-06 W ERE PROCESSED U/S. L43(1) AND THE AO HAD NO JURISDICTIO N TO DISTURB THE COMPUTATION OF INCOME. THE APPELLANT IN HIS OWN ADMISSION BEFORE ME HAS INTER-ALIA STATED THAT THE APPELLANT RIGHTLY DID NOT CLAIM DEDUCTION U/S.80-IB FOR THE R EASONS STATED BELOW: A. A/C. WAS NOT AUDITED AND NO PRESCRIBED AUDIT REP ORT WAS OBTAINED AND FILED. B. PURCHASE OF RAW MATERIALS WAS MADE ON 27.03.2004 AND THEREAFTER WITHIN A DAY OR TWO, PLASTIC BAGS MANUFACTURED/PROCESSED BEING SOLD ON 29.03.2004, IT MAY NOT BE HELD AS COMMERCIAL PRODUCTION STARTED. C. DEDUCTION U/S.80-IB WAS CLAIMED IN A.Y. 2005-06, BECAUSE COMMERCIAL PRODUCTION CAN BE SAID TO HAVE BEEN COMMENCED FROM F.Y. 2004-05 I.E. A.Y. 2005-06 FOR THE REASONS THAT ACCOUNTS ARE AUDITED AND PRESCRIBED AUDIT REPORT IN FORM NO. 10CCB WAS FILED . ITA NO.1532/AHD/2011 - 7 - D. IT IS THE DISCRETION OF THE APPELLANT TO CHOOSE THE INITIAL YEAR AND SUBSEQUENT 10 YEARS FOR CLAIMING DEDUCTION U/S. 80-IB. THE APPELLANT ALSO CONTENDED THAT THE DEPARTMENT HAS ACCEPTED THE CLAIM OF THE APPELLANT IN THE A.Y. 2005-06 AND THEREFORE, IN THI S CURRENT YEAR IT CANNOT DENY THE BENEFIT TO THE APPELLANT. 4.3 THE ADDITIONAL CONTENTIONS AS MENTIONED ABOVE A RE ALSO CAREFULLY CONSIDERED BY ME. FOR THE SAKE OF TH E RECORDS, THERE WAS NO SCRUTINY ASSESSMENT FOR THE A .YS. 2004-05 & 2005-06 AND THE AO HAD NO JURISDICTION TO ALTER THE COMPUTATION OF INCOME U/S. 143(1) OF THE ACT. F OR THE FIRST TIME IN THE ASSESSMENT PROCEEDING FOR THE A.Y .2006- 07, THE ISSUE OF ELIGIBILITY OF 80-IB CAME FOR SCRU TINY. THE AO EXAMINED THREADBARE IN THIS ISSUE AFTER CONSIDER ING THE EVIDENCES SUBMITTED BY THE APPELLANT AND CONCLUDED THAT THE APPELLANT IS NOT ELIGIBLE FOR THE DEDUCTION U/S .80-IB BECAUSE THE APPELLANT FAILED TO MANUFACTURE GOODS/A RTICLES ON OR BEFORE 31.03.2004. THE REQUIREMENT OF THE PRO VISIONS OF SEC.8O-IB IN SHORT IS THAT THE APPELLANT SHOULD FULFILL ALL THE CONDITIONS IN 80-IB(2)(I)/(II)/(III) & (IV). BEFORE ME THE APPELLANT ADDUCE EVIDENCES AND I HAVE GIVEN MY OBSERVATIONS ON THOSE EVIDENCES IN PARA 4.1 & 4.2 A BOVE. I CONSIDERED THOSE OBSERVATIONS NEED NOT BE REPRODUCE D HERE AGAIN FOR THE SAKE OF REPETITION. HOWEVER, WHA T IS CRYSTAL CLEAR IS THAT THE APPELLANT FAILED TO PROVE THAT THE MANUFACTURING WAS DONE BEFORE 31 ST MARCH 2004. THE APPELLANT HAS ALSO COMPLETELY FAILED TO ESTABLISH T HAT IT HAD EMPLOYED 10 OR MORE WORKERS IN A MANUFACTURING PROC ESS CARRIED ON WITH THE AID OF POWER WHICH IS MANDATORY REQUIREMENT AS PER THE SEC. 80-IB(2)(IV) OF THE ACT . THE APPELLANT HIMSELF HAS ADMITTED THAT THE COMMERCIAL PRODUCTION STARTED IN THE A.Y.2005-06 WHICH IS CONT RARY STAND TAKEN THAT 5 PKTS OF THE PLASTIC BAGS SOLD TO A PARTY OF RAIPUR, CHHATISHGARH. THE APPELLANT HAD ALSO RAISED SOME IRRELEVANT POINT SUCH AS THE APPELLANT HAS DISCRETI ON TO CHOOSE INITIAL YEAR MERITS NO DISCUSSION HERE AS TH ERE IS NO AMBIGUITY IN THE SAID PROVISIONS OF ACT. IN VIEW OF THE ABOVE, I AM INCLINED TO UPHOLD THE FINDINGS OF THE AO AND THE ADDITION MADE IN THIS GROUND IS CONFIRMED. THIS GROUND IS DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(APPEALS). THE LD. AR ON BEHALF OF TH E ASSESSEE WHILE CARRYING US THROUGH THE VARIOUS DOCUMENTS PLACED IN THE PAPER-BO OK ARGUED THAT THEIR CLAIM FOR DEDUCTION U/S.80IB OF THE ACT HAS BEEN ACCEPT ED IN THE SUBSEQUENT ITA NO.1532/AHD/2011 - 8 - YEARS 2007-08, 2008-09 & 2009-10 U/S.143(1) OF THE AC T WHILE NO SUCH CLAIM WAS MADE IN THE FIRST YEAR, I.E. 2004-05 AND THE ASSESSM ENT PROCEEDINGS FOR AY 2005-06, HAVE BEEN REOPENED AFTER THE APPELLATE ORDER OF THE LD. CIT(APPEALS) FOR THE ASSESSMENT YEAR 2006-07.WHILE RELYI NG UPON THE DECISION IN THE CASE OF INDUS COSMECEUTICALS V. DY.CIT,1 21 TTJ 0109(CHANDIGARH); ACIT VS. NEW ERA MACHINES(P) LTD.,119TTJ696(CHANDIGARH).CIT VS. SULTAN AND SONS RI CE MILL, 272 ITR 181(ALL.), AND CIT VS. GWALIOR RAYON SILK MFG. CO .LTD.,104 CTR 0243(SC), THE LD. AR CONTENDED THAT THE DEDUCTION U/S 80IB OF T HE ACT COULD NOT BE DENIED IN THE YEAR UNDER CONSIDERATION. 5. ON THE OTHER HAND, THE LD. DR SUPPORTED THE FINDI NGS OF THE LD. CIT(APPEALS). HE POINTED OUT THAT THOUGH THE ASSESSEE D EBITED PURCHASES OF RS.22,000/- IN THE FINANCIAL YEAR 2003-04, THE BREAK-U P OF THE RAW-MATERIALS PURCHASED OR EVEN THE BIFURCATION OF WIP IS NOWHERE R EFLECTED. ALL THE PURCHASES WERE MADE FROM A SISTER-CONCERN AND THERE IS NO THING TO SUGGEST AS TO HOW THE ASSESSEE TRANSPORTED THE MATERIAL. WHILE REFERRING TO PAGE NOS.85 & 86 OF THE PAPER-BOOK, THE LD. DR POINTED OUT THAT EVEN VEHICLE NUMBER OR DELIVERY CHALLANS HAVE NOT BEEN SUBMITTED. A CCORDINGLY, THE LD. DR ARGUED THAT THE ASSESSEE WAS NOT ENTITLED TO ANY DEDUCTI ON U/S 80IB OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE AS ALSO THE AFORESAID DECISIONS. INDISPUTABLY, THE ASSESSEE CLAIMED BEFORE THE AO/LD. CIT(A) THAT THOUGH THE FIRST YEAR FOR MAN UFACTURE WAS THE PERIOD RELEVANT TO THE AY 2004-05 , THEY DID NOT CLAIM ANY DEDUCTION U/S 80IB OF THE ACT SINCE THE ACCOUNTS FOR THE PERIOD FALLING IN THE AY 2004-05 NOT AUDITED NOR PRESCRIBED AUDIT REPORT WAS OBTAINED AND FILED AL ONG WITH THE RETURN. IT WAS ALSO ADMITTED THAT PURCHASE OF RAW MATERIALS MADE ON 27.03.2004 AND THEREAFTER WITHIN A DAY OR TWO, PLASTIC BAGS MANUFACTUR ED/PROCESSED AND SOLD ON 29.03.2004, COULD NOT BE HELD AS COMMENCEMENT OF C OMMERCIAL PRODUCTION . IN NUTSHELL, THE ASSESSEE DID NOT CLAIM ANY DEDUCTION U/S 80IB OF THE ACT IN THE AY 2004-05. IN THE AY 2005-06 , THOUG H THE ASSESSEE CLAIMED ITA NO.1532/AHD/2011 - 9 - DEDUCTION U/S 80IB OF THE ACT , THE ASSESSMENT HAS BEEN RE OPENED IN VIEW OF FINDINGS OF THE LD. CIT(A) IN THE AY 2006-07. FOR TH E AY 2007-08 TO 2010-11, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB OF THE ACT BUT TH E STATUS OF ASSESSMENTS HAS NOT BEEN INFORMED ,EVEN WHEN WE SPECIFICALL Y REQUESTED THE LD. AR TO SUBMIT COPIES OF RELEVANT ASSESSMENT/APPELLA TE ORDERS FOR THE AY 2005-06 & 2007-08 ONWARDS. WE FIND FROM COPIES OF AUDIT REPORT IN FORM 10CCB FOR THE AY 2005-06 TO AY 2007-08 THAT THE AUD ITORS IN COL NO. 9 HAVE MENTIONED THAT INITIAL YEAR OF CLAIM FOR DEDUCTION U /S 80IB IS AY 2003-04 WHILE IN SUCH AUDIT REPORT FOR THE AYS 2008-09 ,INITI AL ASSESSMENT YEAR HAS BEEN MENTIONED AS AY 2004-05. THE AUDIT REPORTS FOR T HE ASSESSMENT YEARS HAVE NOT BEEN PLACED BEFORE US. APPARENTLY, THE ASSESSE E /AUDITORS ARE NOT SURE OF THE INITIAL ASSESSMENT YEAR NOR THE LD. AR THRE W ANY LIGHT ON THIS ASPECT EXCEPT STATING THAT MANUFACTURING PROCESS STARTED I N THE PERIOD RELEVANT TO THE AY 2004-05WHILE BEFORE THE LD. CIT(A ), IT WAS CLAIMED THAT COMMERCIAL PRODUCTION STARTED IN THE PERIOD RELEVANT TO THE AY 2005-06. NOTWITHSTANDING THESE INCONSISTENCIES IN THE STAND OF THE ASSESSEE, WE FIND FROM THE FACTS NARRATED IN THE IMPUGNED ORDERS THAT CL AIM FOR DEDUCTION U/S 80IB HAS BEEN DENIED SINCE THE ASSESSEE DID NOT FULFILL THE STIPULATED CONDITIONS IN THE PERIOD RELEVANT TO THE AY 2004-05. NOT EVEN A WHISPER HAS BEEN MADE IN THE IMPUGNED ORDER AS TO WHETHER OR NOT THE ASSESSEE FULFILLS CONDITIONS STIPULATED U/S 80IB OF THE ACT IN THE YEAR UN DER CONSIDERATION. APPARENTLY, ON THE BASIS OF DETAILS AND DOCUMENTS RELE VANT TO THE A.Y. 2004- 05, THE LEARNED CIT(APPEALS) UPHELD THE DENIAL OF DEDUCTION U/S 80IB OF THE ACT. THERE IS NO SUCH FINDING AS TO WHETHER OR NOT THE ASSESSEE MANUFACTURED ANY PRODUCT IN THE YEAR UNDER CONSIDERATI ON AND WHETHER OR NOT THE ASSESSEE FULFILLED THE CONDITIONS STIPULATED U/ S.80IB OF THE ACT ON THE BASIS OF FACTS AND CIRCUMSTANCES RELEVANT FOR THE YEAR UND ER CONSIDERATION. SECTION 80-IB IS A SPECIAL PROVISION GIVING BENEFITS TO CERTAIN CLASSES OF INDUSTRIES. IT PROVIDES FOR DEDUCTION IN RESPECT OF PRO FITS AND GAINS TO INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE DEVEL OPMENT UNDERTAKINGS. THE CONDITIONS FOR CLAIMING THIS BENEFIT ARE STIPULATED IN SUBSECTION (2) THEREOF. ONE OF THE CONDITIONS, WITH WHICH WE ARE CONCE RNED, IS THAT THE ASSESSEE MANUFACTURES OR PRODUCES ANY ARTICLE OR THING, NO T BEING ANY ARTICLE ITA NO.1532/AHD/2011 - 10 - OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE , OR OPERATES ONE OR MORE COLD STORAGE PLANT OR PLANTS, IN ANY PART OF INDI A. SPECIAL PROVISION IS MADE IN CLAUSE (III) SUB-SECTION (3) OF SECTION 80-IB OF THE ACT IN RESPECT OF THOSE INDUSTRIAL UNDERTAKINGS WHICH FULFILL THE CONDITIO NS PRESCRIBED IN SUB- SECTION (2) OF SECTION 80-IB OF THE ACT, IF SUCH INDUSTRI AL UNDERTAKING HAPPENS TO BE A SMALL SCALE INDUSTRY. IN SUCH A CASE, THE AMOUN T OF DEDUCTION IN THE CASE OF AN INDUSTRIAL UNDERTAKING SHALL BE TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY), OF THE PROFITS AN D GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR A PERIOD OF TEN CONSECUTI VE ASSESSMENT YEARS. IF THE ASSESSEE FULFILLS THE REQUIREMENT OF PROVISIONS OF SEC. 80IB OF THE ACT , THE ASSESSEE WOULD QUALIFY FOR THIS DEDUCTION FROM THE ASSESSMENT YEAR IN WHICH IT BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR TH INGS I.E THE INITIAL ASSESSMENT YEAR. ACCORDING TO THE ASSESSEE, THIS YEAR IS AY 2 004-05 . HAD THE ASSESSEE CLAIMED THIS BENEFIT IN THAT YEAR AND FULF ILLED THE STIPULATED CONDITIONS, HE WOULD HAVE BEEN ALLOWED THIS BENEFIT FO R 10 CONSECUTIVE YEARS. HOWEVER, MERELY BECAUSE OF THE REASON THAT THE ASSESSEE DID NOT CLAIM THE DEDUCTION IN THAT YEAR OR WAS OTHERWISE NOT ELIGIBLE THAT WOULD NOT MEAN THAT HE WOULD BE DEPRIVED FROM CLAIMING THIS BEN EFIT IN ALL THE SUBSEQUENT ASSESSMENT YEARS TILL THE ASSESSMENT YEAR 2013-14 , WHICH IS THE PERIOD FOR WHICH HIS ENTITLEMENT WOULD ACCRUE. THE PRO VISIONS CONTAINED IN SECTION 80-IB OF THE ACT, NOWHERE STIPULATE ANY CONDIT ION THAT SUCH A CLAIM HAS TO BE MADE IN THE FIRST YEAR FAILING WHICH THERE WOULD BE FORFEITURE OF SUCH CLAIM IN THE REMAINING YEARS. THERE IS NO REASON NOT T O GIVE THE BENEFIT OF THIS CLAIM TO THE ASSESSEE IF THE CONDITIONS STIPULATED UNDE R SECTION 80-IB OF THE ACT ARE FULFILLED IN THE YEAR UNDER CONSIDERATION. SIN CE THE LD. CIT(A) HAS NOT RECODED HIS FINDINGS AS TO AS TO WHETHER OR NOT THE ASSESSE E FULFILLS CONDITIONS STIPULATED U/S 80IB OF THE ACT IN THE YEAR UN DER CONSIDERATION, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER S OF THE LD. CIT(A) AND RESTORE THE ISSUE RAISED IN GROUND NO.1 IN THE APPEAL T O HIS FILE FOR DECIDING THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFF ICIENT OPPORTUNITY TO BOTH THE PARTIES AND BRINGING OUT CLEARLY AS TO WHE THER OR NOT THE ASSESSEE FULFILLS CONDITIONS STIPULATED U/S 80IB OF THE ACT IN THE YEAR UNDER ITA NO.1532/AHD/2011 - 11 - CONSIDERATION. WITH THESE OBSERVATIONS, GROUND NO. 1 IN THE APPEAL IS DISPOSED OF. 7. GROUND NO.2 IN THE APPEAL RELATES TO ADDITION O F RS.70,000/- TOWARDS CAPITAL CONTRIBUTION BY THE PARTNERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE REFLECTED IN THEIR BOOKS CONTRIBUTION OF THE PARTNERS AS PER FOLLOWING DETAILS:- 1. SMT.NEELAM PREMNATH RS.20,000/- 15.09.2004 2. SMT.RUSHALI R.MAJUMDAR RS.30,000/- 10.09.2005 3. RAJENDRA M.JAISWAL RS.20,000/- 17.09.2009 RS.70,000/- 7.1 TO A QUERY BY THE AO, THE ASSESSEE CLAIMED THE P ARTNERS WITHDREW THEIR CAPITAL FROM THE FIRM M/S. RAJENDRA INDUSTRIES AND BROU GHT IN THIS FIRM. HOWEVER, ON PERUSAL OF CAPITAL ACCOUNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNT OF RAJENDRA INDUSTRIES IN THE MONTH OF SEPTEMB ER-2005, THE AO NOTICED THAT THERE WAS NO SUCH WITHDRAWAL BY THE AFORE SAID PARTNER FROM THE SAID FIRM . SINCE THE ASSESSEE FAILED TO ESTABLISH THE WIT HDRAWAL BY THE THREE PARTNERS FROM THEIR CAPITAL A/C WITH M/S. RAJENDRA IN DUSTRIES, THE AO ADDED AN AMOUNT OF RS.70,000/- U/S.68 OF THE ACT. 8. ON APPEAL THE LEARNED CIT(APPEALS) UPHELD THE FINDINGS OF THE AO IN THE FOLLOWING TERMS:- 5. GROUND 2: IN THIS GROUND THE APPELLANT CONTENDED AGAINST THE ADDITION OF RS.70,000/- TOWARDS CAPITAL INTRODUCTION. THE AO NOTICED IN THE COURSE OF THE ASSESSMENT PROCEEDING THAT THE APPELLANT HAD CREDIT ED HANDSOME AMOUNT BY CASH IN THE BOOKS OF A/C. EXPLAN ATION WAS CALLED FROM THE APPELLANT IN THIS REGARDS. THE APPELLANT ITA NO.1532/AHD/2011 - 12 - SUBMITTED THAT THE CASH DEPOSITS ARE MADE BY THREE PARTNERS OUT OF THE WITHDRAWALS FORM ANOTHER PARTNE RSHIP FIRM NAMELY RAJENDRA INDUSTRIES. THE APPELLANT CONT ENDED THE AMOUNTS CREDITED BY THE PARTNERS ARE GENUINE AN D THE IDENTITY OF THE CREDITORS ARE ESTABLISHED BECAUSE O F THE FACTS THAT IN THEIR CAPITAL A/C. OF THE APPELLANT F IRM THOSE AMOUNTS ARE REFLECTED. I HAVE CAREFULLY CONSIDERED THE FINDING OF THE AO AND THE SUBMISSIONS MADE BY THE A R. THE AMOUNTS WERE INTRODUCED BY THE PARTNERS. THE AO MAD E VERIFICATION OF THE CAPITAL A/C OF THE PARTNERS IN THE FIRM RAJENDRA INDUSTRIES BUT NOTICED THAT THESE PARTNERS HAVE NOT WITHDRAWN ANY SUCH AMOUNTS FROM THEIR CAPITAL A /C. IN RAJENDRA INDUSTRIES. THE APPELLANT HAS NOT REBUTTED THIS FACTS. THUS, CONSIDERING THE FACTS OF THE CASE AND THE FINDINGS OF THE AO, I AM INCLINED TO AGREE WITH THE ACTION OF THE AO AND CONFIRM THE ADDITION MADE. THUS THIS GRO UND IS DISMISSED. 9. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AF ORESAID FINDINGS OF THE LD. CIT(APPEALS). THE LD. AR ON BEHALF OF TH E ASSESSEE MERELY REITERATED THEIR SUBMISSIONS BEFORE THE LD. CIT(A) AN D RELIED UPON A DECISION DATED 3.6.2011 OF A CO-ORDINATE BENCH IN THE CASE OF M/ S JUPITER AUTOMATION IN ITA NO.3371/AHD./2009. ON THE OTHER HAND, THE LD. DR SUPPORTED THE FINDINGS IN THE IMPUGNED ORDER, THERE BEING NO EVIDE NCE THAT THE AFORESAID AMOUNT WAS BROUGHT IN BY THE PARTNERS. 10. WE HAVE HEARD BOTH THE PARTIES AND GO NE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION. THE UNDISPUTED FACTS ON RECORD REVEAL THAT THE AMOUNT OF RS.70,000/- TREATED AS UNEXPLAIN ED BY THE AO WAS AVAILABLE IN THE CAPITAL ACCOUNT OF THE THREE PARTNERS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. WE FIND THAT THE LD. CIT(A) AFTER ANA LYZING THE FACTS OF THE CASE OBSERVED THAT IN THIS CASE IDENTITY OF THE PARTNERS W AS NOT AT ALL IN QUESTION AS THEY WERE ASSESSED TO INCOME TAX AND THE ASSE SSEE HAD FURNISHED THEIR PAN AS ALSO COPIES OF ACKNOWLEDGMENTS OF F ILING RETURNS. HOWEVER, THEIR CLAIM THAT THESE AMOUNTS WERE WITHDRAWN BY THEM FROM THEIR CAPITAL ACCOUNT WITH M/S RAJENDRA INDUSTRIES WAS NOT ESTAB LISHED ACCORDINGLY, THE LD. CIT(A) UPHELD THE ADDITION . AS R EGARDS ONUS IN RESPECT OF AMOUNTS FOUND CREDITED IN THE BOOKS OF THE FIRM, IN CI T V KISHORILAL ITA NO.1532/AHD/2011 - 13 - SANTHOSHILAL 216 ITR 9(RAJ) ,IT WAS CATEGORICALLY HELD THAT THE BURDEN OF PROOF IN RESPECT OF CASH CREDITS FOUND IN THE PARTNERS' ACCOUNTS IN THE BOOKS OF THE FIRM WAS ON THE FIRM ITSELF. REFERRING TO THE DECISIO NS IN 34 ITR 807(SC) , 102 ITR 779(PAT) , 36 ITR 481(AP) AND 29 ITR 942(AP) , THE HONBLE HIGH COURT HELD THAT (A) THERE WAS NO DISTINCTION BETWEEN THE CASH CREDIT ENTRIES EXISTING IN THE BOOKS OF THE FIRM WHETHER IT WAS OF A PARTNER OR OF A THIRD PARTY ; (B) THE BURDEN OF PROOF REGARDING THE IDENTITY, CAPACITY AND GENUINENESS OF TRANSACTIONS WAS ON THE FIRM ; (C) IF THE CASH CREDITS WER E NOT SATISFACTORILY EXPLAINED, THE ASSESSING OFFICER WAS JUSTIFIED TO TREAT IT AS INCOME OF THE FIRM FROM UNDISCLOSED SOURCES ; (D) THE FIRM HAD TO ESTABLISH T HAT THE AMOUNT WAS ACTUALLY GIVEN BY THE LENDER ; (E) THE GENUINENESS AND REGULARITY IN THE MAINTENANCE OF ACCOUNTS HAD TO BE TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER AND (F) IF THE EXPLANATION WAS NOT SUPPORTED BY ANY DOCUMENTARY OR OTHER EVIDENCE, THEN THE DEEMING FICTION CREATED BY SE CTION 68 OF THE ACT COULD BE INVOKED. IN THE CASE OF P. V. RAGHAVA REDDI V. CIT [1956] 29 ITR 942, IT WAS OBSERVED BY THE HONBLE ANDHRA PRADESH HI GH COURT THAT THE BURDEN OF PROOF IS NOT DEPENDENT UPON THE FACT OF A CR EDIT ENTRY IN THE NAME OF THE ASSESSEE OR IN THE NAME OF A THIRD PARTY. IN EITHER CASE, THE BURDEN LIES UPON THE ASSESSEE TO EXPLAIN THE CREDIT ENTRY, THOUGH T HE ONUS MIGHT SHIFT TO THE INCOME-TAX OFFICER UNDER CERTAIN CIRCUMSTANCES. OTHE RWISE A CLEVER ASSESSEE CAN ALWAYS THROW THE BURDEN OF PROOF ON THE INCO ME-TAX AUTHORITIES BY MAKING A CREDIT ENTRY IN THE NAME OF A THIRD PARTY EITHER REAL OR PSEUDONYMOUS. THE SAME HIGH COURT IN M. M. A. K. MOHI NDEEN THAMBY AND CO. V. CIT [1959] 36 ITR 481, RELYING ON THE SAID DE CISION CAME TO THE CONCLUSION THAT THERE IS NO DISTINCTION BETWEEN THE ENTRI ES IN THE NAMES OF THE PARTNERS AND THOSE IN THE NAMES OF THE THIRD PARTIES, AND THE NATURE OF THE ENTRY IS NOT DISTINGUISHABLE. IN THE ABSENCE OF A SATIS FACTORY EXPLANATION, IT IS OPEN TO THE DEPARTMENT TO INFER THAT THESE MONIES ALSO BELONG TO THE ASSESSEE AND REPRESENT SUPPRESSED INCOME. 10.1 IN HARDWARMAL ONKARMAL V. CIT [1976] 102 ITR 779, IT WAS OBSERVED BY THE HONBLE PATNA HIGH COURT THAT IF CASH CREDITS A RE FOUND IN THE ACCOUNT BOOKS OF A PARTNERSHIP FIRM IN THE NAMES OF THE PARTNER S, THE CREDITS ARE SURELY ITA NO.1532/AHD/2011 - 14 - IN THE NAMES OF PERSONS WHO CONSTITUTE THE FIRM ITSELF. IN SUCH A CASE, THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THAT THE PARTNERS HA D ACTUALLY DEPOSITED THE MONEY AND THAT THE ENTRIES WERE NOT FICT ITIOUS. 10.2 IT IS CLEAR THAT UNTIL AND UNLESS THE PARTNERS O F A FIRM ARE ABLE TO CATEGORICALLY ESTABLISH THE SOURCES OF THE CASH CREDITS INTR ODUCED IN THEIR NAMES IN THE BOOKS OF THE FIRM AND THE MANNER IN WHICH SUCH CASH HAD BEEN EARNED BY THEM, THE QUESTION OF SHIFTING OF THE BURDE N ON TO THE DEPARTMENT CANNOT ARISE . IN THE CASE UNDER CONSIDERATION, THE LD. CIT(A) FOUND THAT THE ASSESSEE FAILED TO DISCHARGE THE INITIAL ONUS LAID DOWN U PON THE FIRM AND HAD FAILED TO SUBSTANTIATE THEIR EXPLANATION THAT THE A MOUNT WAS BROUGHT IN BY THE RESPECTIVE PARTNERS. IN THESE CIRCUMSTANCES, SINCE THE ASSESSE E DID NOT REBUT THE FACTS FOUND BY THE AO BEFORE THE LD. CIT(A ) NOR T HELD. AR PLACED ANY MATERIAL ,EVIDENCING THAT THE AFORESAID AMOUNTS W ERE INDEED BROUGHT IN BY THE RESPECTIVE PARTNERS, WE ARE NOT INCLINED TO INTE REFERE WITH THE FINDINGS OF THE LD. CIT(A). THEREFORE, GROUND NO.2 IN THE AP PEAL IS DISMISSED. 11. GROUND NO.3 IN THE APPEAL RELATING TO CLAIM OF LOSS OF RS.10,390/-WAS NOT PRESSED BY THE LD. AR ON BEHALF OF THE ASSESSEE. ACC ORDINGLY, THIS GROUND IS DISMISSED. 12. AS REGARDS GROUND NO.4 ,THE LD. AR DID NOT MAKE ANY SUBMISSIONS AND ARGUMENTS ON THIS GROUND NOR EXPLAINED AS TO HOW THI S GROUND ARISES FROM THE IMPUGNED ORDER OR HOW ADDITION OF RS. 70,000/- M ADE BY THE AO U/S 68 OF THE ACT IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. S INCE THE AMOUNT WAS ADMITTEDLY ADDED U/S 68 OF THE ACT, APPARENTLY THE SAI D AMOUNT IS NOT DERIVED FROM THE ACTIVITIES OF THE INDUSTRIAL UNDERTAKING. IN T HESE CIRCUMSTANCES, ESPECIALLY WHEN THE ISSUE DOES NOT EMERGE FROM THE IMPU GNED ORDER, WE ARE OF THE OPINION THAT THE ADDITION MADE BY THE AO AN D UPHELD BY THE LD. CIT(A) IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. THER EFORE, GROUND NO.4 IN THE APPEAL IS DISMISSED. 13. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEFORE US. ITA NO.1532/AHD/2011 - 15 - 14. IN THE RESULT,APPEAL IS PARTLY ALLOWED BUT FOR ST ATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 26 .8.2011. SD/- SD/- (MUKUL SHRAWAT) ( A.N. PAHUJA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATED 26/ 08 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. M/S.BULSAR PLASTICS,GALA NO.102,PLOT NO.11,PREMIER IN DL.ESTATE KACHIGAM, NANI DAMAN 2. INCOME TAX OFFICER,VAPI, WARD-4,DAMAN. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VALSAD 5. THE DR, AHMEDABAD C BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD