ITO 25(3)(2), MUMBAI V. DINESH H. SHAH, MUMBAI

ITA 1688/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0254 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA J MENON
• Keywords: Business income; Rule of consistency; Additional evidence
• Section: 143(3)

Judgement Text

P A G E | 1 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI R.C.SHARMA , AM AND SHRI RAVISH SOOD, JM ./ I.T.A(S). NO.1688 & 1689/MUM/2014 ( / ASSESSMENT YEAR: 2007 - 08 & 2008 - 09 ) INCOME TAX OFFICER - 25(3)(2), C - 11, R. NO. 306, PRATYAKSH KAR BHAVAN, BANDRA - KURLA COMPLEX, BANDRA(EAST), MUMBAI - 400051 / VS. SHRI DINESH H. SHAH 42, TANAY SKY BUILD VILLAGE NEAR BHATIYA SCHOOL, SAIBABA NAGAR, KANDIVALI (W), MUMBAI - 400067 ./ ./ PAN/GIR NO . AAQPS1808N ( / REVENUE ) : ( / ASSESSEE ) / REVENUE BY : S MT. VINITA J. MENON / ASSESSEE BY : SHRI DR. K. SHIVARAM SHRI RAHUL K. HAKAN I SHRI SHAHZAD M. PANT / DATE OF HEARING : 03/ 04 /201 7 / DATE OF PRONOUNCEMENT : 22 /06/2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT SET OF APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDER S PASSED BY THE CIT(A) - 35, MUMBAI, PERTAINING TO A.Y(S) 2007 - 08 AND 2008 - 09 , EACH DATED. P A G E | 2 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 18.12.2013, WHICH ARISES FROM THE RESPECTIVE ORDERS PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'ACT'), DATED 0 1 . 03 .20 13 AND U/S 143(3), DATED . 16.12.2010. WE FIRST TAKE UP THE APPEAL OF THE REVENUE FOR A.Y. 2007 - 08 , MARKED AS ITA NO. 1688/M UM/2014 . THE REVENUE ASSAILING THE ORDER OF THE CIT(A), HAD THEREIN RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING CLAIM OF DEDUCTION U/S. 80IB(4) OF RS. 31,28,017/ - WITHOUT APPRECIATING THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE FACT THAT MANUFACTURING WAS COMMENCED ON OR BEFORE 31.03.2004 BEING ONE OF THE CRITERIA FOR THE DEDUCTION U/S. 80IB(4) OF THE I.T. ACT. 2. ON THE FACTS OF THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO PRODUCED DOCUMENTARY EVIDENCES TO SUBSTANTIATE ITS CLAIM REGARDING THE NUMBER OF WORKERS EMPLOYED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A WITHOUT ALLOWING AN OPPORTUNITY TO EXAMINE THE E VIDENCES IN REMAND PROCEEDINGS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A ) IS NOT JUSTIFIED IN DELETING THE ADDITION ON THE BASIS OF ADDITIONAL EVIDENCES IN SPITE OF THE FACT THAT AMPLE OPPORTUNITIES WERE ACCORDED TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS FOR FU RNISHING DOCUMENTARY EVIDENCES. 5. THE APPELLANT PRAYS TH AT THE ORDER OF THE LD CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,86,076/ - FOR A.Y. 2007 - 08 ON 31.10.2007, WHICH WAS PROCESSED AS SUCH U/S. 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT U/S. 143( 2 ) , WHEREIN THE A.O AFTER DISALLOWING TH E CLAIM OF P A G E | 3 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 THE ASSESSEE TOWARDS DEDUCTION U/S. 80IB(4) OF RS.31,28,017/ - , THEREIN ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.34,14,093/ - , VIDE HIS ORDER DATED. 24.12.2009 . THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT( A ) , WHO VIDE HIS ORDER DATED 19.03.2010 ALLOWED THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION U/S. 80IB(4). THE ORDER OF THE CIT( A ) WAS ASSAILED BY THE REVENUE BEFORE THE INCOME TAX APPELLATE TRIBUNAL , WHICH THEREIN VIDE ITS ORDER DATED 25.01.2012 PASSED IN ITA NO. 5029/MUM/2010 RESTORE D THE MATTER TO THE FILE OF A.O. FOR FRESH ADJUDICATION. 3. THE A.O DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IN COMPLIANCE TO THE DIRECTIONS OF THE TRIBUNAL CALLE D UPON THE ASSESSEE TO FURNISH NECESSARY EVIDENCE AND EXPLANATION TO JUSTIFY ITS CLAIM OF DEDUCTION U/S. 80IB(4). THAT DURING THE COURSE OF THE SET ASIDE ASSESSMENT PROCEEDINGS , THE A.O CALLED UPON THE ASSESSEE TO FURNISH EVIDENCE OF PURCHASE OF GOODS, DE LIVERY CHALLANS FOR GOODS, DETAILS OF MACHINERY PURCHASE D ALONG WITH DELIVERY CHALLANS, DETAILS OF WORKERS ETC . , IN RESPECT OF ITS BUSINESS OF FABRICATING AND ASSEMBLING ENGINEERING PRODUCTS AS A SOLE PROPRIETOR UNDER THE NAME AND STYLE OF M/S. S.D. ENGINE ERS AT SILWASA . THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD CLAIMED EXPENSES ON ACCOUNT OF ELECTRICITY OF ONLY RS.10,608/ - ; PACKING AND FORWARDING EXPENSES OF RS.26,592/ - , AND VALUE OF MACHINERY AS ON 01.04.2005 WAS SHOWN AT ONLY RS.7,26,393/ - (W . D .V ). THE A.O IN THE BACKDROP OF THE AFORESAID FACTS , THEREIN HOLDING DOUBTS AS REGARDS THE GENUINENESS OF THE MANUFACTURING ACTIVITY OF THE ASSESSEE , THEREIN CALLED UPON THE LATTER TO SUBSTANTIATE THE SAME. THE ASSESSEE THEREIN DULY DEMONSTRATED BEFORE THE A.O THE ENTIRE PROCESS PERTAINING TO MANUFACTURING OF STAINLESS STEEL PARTS/CASSEROLE CONTAINERS WHICH WERE MANUFACTURED AGAINST THE ORDER RECEIVED FROM RAIL COACH FACTORY , KAPURTHALA (GOVERNMENT OF INDIA UNIT) . THE P A G E | 4 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 ASSESSEE TABULATED BEFORE THE A.O THE FOUR STAGES INVOLVED IN THE MANUF ACTURING PROCESS OF THE AFORESAID ITEMS, AS UNDER : - ST. MATERIAL PROCESS ITEM PRODUCED MACHINE USED 1 S.S. SHEET CUTTING S.S. CUT PIECE SHEARING MACHINE 2 S.S. CUT PIECE MARKING & CUTTING CUT PIECE WITH CUT CORNERS HAND SCISSOR 3 CUT PIECE WITH CUT CORNERS DRILLING OF HOLES CUT PIECE WITH CUT CORNERS AND HOLES ELECTRIC DRILL MACHINE 4 CUT PIECE WITH CUT CORNERS & HOLES BENDING S.S. FABRICATED PART NAMELY CASSEROLE CONTAINER HAND PRESS 4. THAT I N THE COURSE OF EXPLAINING THE AFORESAID MANUFACTURING PROCESS , THE ASSESSEE SUBMITTED BEFORE THE A.O BILLS OF M/S. ROSHNI ELECTRICALS FOR PURCHASE OF PLANT AND MACHINERY BEING DRILLING MACHINE, GRINDING/BUFFING MACHINE, HA ND PRESS, SHEARING MACHINE, HAND SCISSOR AND ACCESSORIES , AS WELL AS BILLS OF M/S. VIKAS ELECTRICALS FOR PURCHASE OF WELDING MACHINE WITH ACCESSORIES, SET OF WORKERS TOOLS AND MACHINE INSTRUMENTS. THE A.O HOWEVER NOT BE ING INSPIRED BY THE CONTENTION OF THE ASSESSEE AS WELL AS THE DOCUMENTARY EVIDENCE FURNISHED BY HIM IN SUPPORT THEREOF , THEREIN DREW ADVERSE INFERENCES AS REGARDS THE SAME AS UNDER: - A. AS FAR AS PURCHASE OF MACHINERY IS CONCERNED, THE ASSESSEE HAD ONLY PURCHASED THE MACHINERY AMOUNTING TO RS.6380/ - FROM ROSHNI ELECTRICAL ON 15 - 03 - 2004 AND MACHINERY AMOUNTING TO RS.5,000/ - FROM VIKAS ELECTRICALS. ON PERUSAL OF THE BILL ISSUED BY ROSHNI ELECTRICALS AND VIKAS ELECTRICALS, IT IS SEEN THAT ON THE BILL TELEPHONE NUMBER WERE NOT MENTIONED. THE SALES TAX NUMBER AND CST' NUMBER MENTIONED ON THE BILL IS OF DADRA AND NAGAR HAVELI, BUT AT THE END OF THE BILL IT IS MENTIONED THAT THE REGISTRATION CERTIFICATE P A G E | 5 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 UNDER BOMBAY SALE TAX, 1959 IS IN FORCE ON THE DATE OF SALE. THIS IS N OT POSSIBLE SINCE DADRA AND NAGAR . HAVELI IS UNION TERRITORY AND BOMBAY SALE TAX, 1959 IS NOT APPLICABLE THERE. THIS CLEARLY SHOWS THAT THE BILL PRODUCED BY THE ASSESSEE IN THE NAME OF ROSHNI ELECTRICALS AND VIKAS ELECTRICALS ARE NOT' GENUINE, THEREFORE, THE PURCHASE OF MACHINERY CLAIMED TO HAVE BEEN MADE FROM ROSHNI' ELECTRICALS AND VIKAS ELECTRICALS ARE NOT GENUINE. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE GOODS WE'RE MANUFACTURED BY THE USE OF MACH INERY PURCHA S ED FROM ROSHNI ELECT R ICALS AND VIKAS ELECTRICALS DURING THE F.Y 2003 - 04 AND 2004 - 05 DOES NOT APPEAR TO BE GENUINE. B. ON PERUSAL OF THE PROCESS OF MANUFACTURING EXPLAINED BY - THE ASSESSEE, IT IS SEEN THAT BASICALLY THE ASSESSEE PURCHASED STAIN LESS STEEL SHEETS AND THE SHEETS WERE CUT AT ITS CORNER AND THE HOLES WERE DRILLED ON THE SHEETS AND THESE SHEETS WERE BENT AT ENDS. BASICALLY THE ASSESSEE'S ACTIVITY IS OF ASSEMBLING/FABRICATING SS FABRICATED PARTS FROM SS SHEETS WHICH CANNOT BE SAID TO BE MANUFACTURE FOR THE PURPOSE OF ALLOWING DEDUCTION U/S 801B(4) OF THE L.T.ACT.AS THE PROCESS EMPLOYE E BY THE ASSESSEE DOES NOT BRING INTO EXISTENCE ANY NEW PRODUCT WHICH IS DIFFEREN T FROM ITS ORIGINAL FORM. IN THIS REGARD RELIANCE IS PLACED ON THE DECISI ON IN THE CAS E O F APEEJAY PVT. LTD VS. CIT(206 ITR 367), WHEREIN THE HO N'BLE CALCUTTA HIGH COURT HAS HELD THAT THE WORD MANUFACTURE APPLY TO A CASE WHICH BRINGS INTO EXISTENCE SOMETHING DIFFERENT FROM ITS COMPONENTS. THE ASSESSEE HAS FAILED TO ESTABLISH, THAT A NEW DISTINCT MATERIAL IS COMING OUT OF THE PROCESS INVOLVED AT HIS INDUSTRIAL PREMISES. FURTHER, THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS . LUCKY MINERAL S PVT. LTD. HAS HELD THAT MANUFACTURE IMPLIES A CHANGE BUT EVERY CHANGE IS NOT A MAN UFACTURE ALTHOUGH EVERY CHANGE IN THE ARTICLE IS THE RESULT OF TREATMEN T , LABOUR AND MANIPULATION. TO BRING ABOUT CHANGE QUALIFYING AS MANUFACTURE SOMETHING MORE IS NECESSARY AND THAT SOMETHING IS TRANSFORMATION THAT IS A NEW AND DIFFERENT ARTICLE, HAVING A DISTINCT NAME, CHARACTER OR USE MUST EMERGE. WHERE THE COMMODITY RETAINS A CONTINUING SUBSTANTIAL IDENTITY THROUGH THE PROCESSING STAGE IT CANNOT BE SAID THAT IT HAS BEEN MANUFACTURED. HERE IN THE CASE OF THE ASSESSEE, THE S S SHEETS ARE FABRICATED AS SS PARTS. THE COMMODITY RETAINS A CONTINUING SUBSTANTIAL IDENTITY THEREFORE, IT CANNOT BE SAID THAT A NEW COMMODITY. IS EMERGED. ON PERUSAL OF THE SALE OF BILL RAISED BY THE ASSESSEE, IT IS SEEN THAT THE ITE MS SOLD ARE SS FABRICA TED PARTS ONLY AND ITEMS PURCHASED ARE SS SHEETS. IT IS NOT CLEAR THAT THROUGH WHICH PROCESS THE SS SHEETS HAVE UNDERGONE AND SS FABRICATED PARTS ARE MADE. IT IS NOT ESTABLISHED, WHETHER THERE IS REALLY ANY TRANSFORMATION OR ALTERATION IS INVOLVED. I N VIEW OF THESE FACTS THE PROCESS EMPLOYED BY THE ASSESSEE IS NOT TREATED AS A MANUFACTURING PRO CESS FOR WHICH DEDUCTION U/S 80IB(4) OF THE I .T. ACT IS ALLOWABLE. P A G E | 6 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 C. AS REGARDS CONSUMPTION OF ELECTRICITY IS CONCERNED IT IS AN UNBELIEVABLE FACT THAT GOODS WORTH RS.97.51 LAC S WERE MANUFACTURED DURING THE F.Y. 2006 - 07 FOR WHICH ELECTRICITY AMOUNTING TO RS.10,603/ - FOR THE PERIOD O F 12 MONTHS WAS ONLY CONSUMED. ON PERUSAL OF THE ELECTRICITY BILL PRODUCED FOR THE MONTH OF MARCH TO MAY 2004, IT IS SEEN THAT ELECTRICIT Y OF 386 UNITS WERE CONSUMED FOR A PERIOD OF THREE MONTHS WHICH MEANS THE MONTHLY CONSUMPTION IS LESS THAN 150 UNITS WHICH IS MUCH LESS THAN THE ELECTRICITY CONSUMED IN THE HOUSEHOLD FOR DOMESTIC USE. ON PERUSAL OF THE DETAILS OF ELECTRICITY SANCTIONED BY THE AUTHORITIES IT IS SEEN THAT THE WIRING CONTRACTORS HAD SUBMITTED THE COMPLETION OF THE WIRING AND TEST REPORT, WHEREIN THE DATE OF CONNECTION IS MENTIONED AS 29/3/2004. THE ASSESSEE HAD CLAIMED TO HAVE THE SOLD THE MANUFACTURED GOODS. ON 31/03/2004 O F RS.51,000/ - TO ITS SISTER CONCERN M/S SPECTRUM SCIENTIFIC PVT. LTD., WHICH IS NOT POSSIBLE AS THE ELECTRIC CONNECTION WAS ONLY INSTALLED ON 29/3/2004 AND THE ASSESSEE HAD NOT SUBMITTED ANY EVIDENCE TO HAVE ACTUALLY STARTED THE PROCESS OF MANUFACTURING IN V IEW OF NEGLIGIBLE CONSUMPTION OF ELECTRICITY. ALSO ON PERUSAL OF THE RECORDS IT IS SEEN THAT THE ASSESS EE HAS TURNOVER OF RS.97.51 LAC S HOWEVER THE ELECTRICITY EXPENDITURE INCURRED DURING THE F.Y. 2005 - 06 IS ONLY OF RS.10,603/ - , IT IS IMPOSSIBLE TO CARRY OUT MANUFACTURING ACTIVITY AT THIS LARGE SCALE ACT IVITY WITH THIS LOWER CONSUMPTIO N OF ELECTRICITY AND HENCE IT IS A CLEAR INDICATION THAT NO MANUFACTURING ACTIVITY WAS CONDUCTED FOR THE GOODS WORTH RS.97.51 LAKHS. D. AS REGARD TO THE WORKER EMPLOYED IN THE F ACTORY AT SILVASSA THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE AS TO THE IDENTITY AND ADDRESS OF THE WORKER. ON 15.12. 2011 THE ASSESSEE HAD SUBMITTED COPY OF WAGE REGISTER FOR THE MONTH 'OF MARCH 2004. IN ABSENCE OF ANY EVIDENCE WHICH SUBSTANTIATE THAT ASS ESSEE HAD EMPLOYED 11 WORKERS, MERE FILING THE COPY OF REGISTER CANNOT BE TREATED AS CONCLUSIVE EVIDENCE. E. ON PERUSAL OF THE DETAILS OF SALE IT IS SEEN THAT THE SALES OF RS.68.40 LAKHS OUT OF TOTAL SALES OF RS.97.51 LAKHS IS MADE TO M/S SPECTRUM SCIENTIFIC PVT. LTD. WHICH IS SISTER CONCERN OF THE ASSESSEE AND THE ASSESSEE RECEIVES SALARY FROM M/S SPECTRUM SCIENTIFIC PVT. LTD. IN THIS REGARD THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE OF DISPATCHING THE MANUFACTURED GOODS FROM HIS FACTORY TO ITS SISTER CO NCERN M/S SPECTRUM SCIENTIFIC PVT. LTD. IN THE ABSENCE OF EVIDENCE OF DELIVERY CHALLANS FOR TRANSPORTATION OF GOODS MANUFACTURED BY THE ASSESSEE FROM HIS FACTORY, THE ASSESSEE HAS FAILED TO PROVE THAT THE GOODS SOLD WERE MANUFACTURED FROM HIS FACTORY. F. THE ASSESSEE DID NOT SUBMIT EVIDENCE OF HAVING STARTED PRODUCTION BY 31/03/2004. THE ASSESSEE HAS ONLY SUBMITTED A SALE BILL DATED 31/03/2004 AMOUNTING TO RS.51,000/ - TO ITS P A G E | 7 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 SISTER CONCERN NAMELY M/S SPECTRUM SCIENTIFIC PVT. LTD WITHOUT SUBMITTING ANY EVIDENCE OF TRANSPORTATION OF GOODS FROM ITS FACTORY AT SILVASSA TO THE PREMISES OF ITS SISTER CONCERN. BESIDES, THIS BILL FOR SALE TO SISTER CONCERN M/S SPECTRUM SCIENTIFIC PVT. LTD CONTAINS THE DESCRIPTION OF GOODS AS FABRICATED SHEET METAL AND THE ASSESSEE HIMSELF CLAIMS TO BE PURCHASING SS SHEETS AND THE CONVERSION OF SS SHEET TO FABRICATED SHEET METAL DOES NOT CONSTITUTE TO BE A PROCESS OF MANUFACTURING GOODS. THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE OF H AVING STARTED PRODUCTION OF GOODS EXCEPT A COPY OF BILL FOR PURCHASE OF PLANT AND MACHINERY FROM M/S ROSHNI ELECTRICAL AND VIKAS ELECTRICALS DATED 15 - 03 - 2004. THE SAID BILL FOR MACHINERY BEING PURCHASED F R OM M/S ROSHNI ELECTRICAL AND VIKAS ELECTRICALS DATE D 15 - 03 - 2004 IS NOT PROVED TO BE GENUINE AS DISCUSSED IN PARA 6.A ABOVE. ASSESSEE HAS NOT PROVED TO HAVE EMPLOYED WORKERS DURING THE PERIOD 2003 - 04 FOR MANUFACTURING ACTIVITY AS THE ASSESSEE HAS FAILED TO GIVE EVIDENCE REGARDING THE IDENTITY AND NAME AND A DDRESS OF THE WORKERS. THEREFORE, MANUFACTURING ACTIVITY CANNOT BE SAID TO HAVE TAKEN PLACE DURING THE F.Y. 2003 - 04. BESIDES, AS PER THE WIRING CONTRACTOR'S COMPLETION AND TEST REPORT, THE DATE OF CONNECTION IS MENTIONED AS 29/03/0.04. UNDER THE CIRCUMSTANCES, IT IS NOT POSSIBLE TO MANUFACTU RE THE GOODS AMOUNTING TO RS. 51,000/ - AND SALE THE SAME ON 31/3/2004 TO M/S SPECTRUM SCIENTIFIC PVT. LTD, WHICH IS THE SISTER CONCERN OF THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE HAS NOT S UBMITTED EVIDENCE REGARDING TRANSPORTATION OF MANUFACTURED GOODS FROM HIS FACTORY TO ITS SISTER CONCERN. G. THE ASSESSEE RELIED ON SALES TAX EXEMPTION CERTIFICATE AS PER WHICH THE DATE OF I COMMENCEMENT OF PRODUCTION IS SHOWN AS 31/03/2004. HOWEVER, THE SAME 1 CANNOT BE RELIED UPON FOR CLAIMING EXEMPTION U/S. 801B(4), AS THE SAID CERTIFICATE/ORDER WAS MADE ON THE BASIS OF SELF - DECLARATION FILED BY THE ASSESSEE AND ORDER WAS PASSED AFTER THE CUT - OFF DATE I.E. 31/03/2004 . 5. THUS THE A.O HOLDING A CONVICTION THAT THE ASSESSEE HAD NOT CAR RIED ANY MANUFACTURING ACTIVITY AT HIS FACTORY AT SILWASA EITHER DURING THE YEAR UNDER CON SIDERATION, OR IN THE EARLIER PREVIOUS YEARS, THEREFORE CONCLUDED THAT IT WAS NOT ENTITLED FOR CLAIM OF DEDUCTION U/S. 80IB(4 ) OF RS.31,2 8,017/ - , AND THUS DETERMINED ITS TOTAL INCOME U/S. 143(3) R.W.S. 254 AT RS.34,14,100/ - . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE A.O CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). DURING THE COURSE OF THE APPELLATE PROCEEDINGS , THE ASSESSEE FIL ED AN AFFIDAVIT/DECLARATION FROM BOTH M/S. VIKAS P A G E | 8 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 ELECTRICALS AND M/S. ROSHNI ELECTRICALS , ALONGWITH THE RESPECTIVE P AN NO S . AND OTHERS DETAILS OF THE SELLERS, BY WAY OF ADDITIONAL EVIDENCE UNDER RULE 46 A, WHICH IN THE ABSENCE OF ANY SERIOUS OBJECTION BY TH E A.O WAS ADMITTED BY THE CIT(A). THE ASSESSEE FURTHER DURING THE COURSE OF THE APPELLATE PROCEEDINGS AGAIN SUBMITTED THE INVOICE OF M/S. ROSHNI ELECTRICALS , DATED 15.03.2004, INVOICE OF M/S. VIKAS ELECTRICALS , DATED 15.03.2004 AND INVOICE OF M/S. MONARCH ENTERPRISES , DATED 25.03.2004 . THAT IN SUPPORT OF THE GENUINENESS OF ITS MANUFACTURING PROCESS , THE ASSESSEE ALSO PLACED ON RECORD OF THE A.O THE COPY OF THE STATEMENT OF PURCHASE OF MACHINERY , ALONG WITH A LETTER DATED 26.03.2004 FROM THE ELECTRICITY DEPARTMENT FOR SANCTION OF POWER I NCLUDING THE ELECTRICITY BILLS FOR THE MONTH OF MARCH 2004 TO MAY 2004, AS WELL AS A COPY OF THE TRANSPORTERS BILL RAISED BY M/S. G.N. TRANSPORT, DATED 31.03.2004. THE CIT(A) CALLED FOR THE OBJECTIONS OF THE A.O AS REGARD S THE ADMISSIBILITY OF THE AFORESAID DOCUMENTS , ALONG WITH HIS COMMEN TS ON THE MERITS OF THE CASE . 6 . THE CIT(A) THEREAFTER REFERRING TO THE TWO FOLD CRITERIA LAID DOWN FOR ENTITLING THE ASSESSEE TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4), THEREIN OBSERVED T HAT THE SAME REQUIRED SATISFACTION OF TWO CON DITIONS , VIZ. (I) THERE SHOULD BE MANUFACTURE OF PRODUCTION OF ANY ARTICLE OR THING ;AND (II) THE UNDERTAKING SHOULD EMPLOY 10 OR MORE WORKERS IN A MANUFACTURIN G PROCESS CARRIED ON WITH THE AI D OF POWER, OR EMPLOY 20 OR MORE WORKER IN A MANUFACTUR ING PROCESS CARRIED ON WITHOUT THE AI D OF POWER. THUS IN THE BACKDROP OF THE AFORESAID STATUTORY REQUIREMENT WHICH WERE REQUIRED TO BE SATISFIED FOR ENABLING AN ASSESSEE TO RAISE ITS CLAIM TOWARDS DEDUCTION U/S. 80I B(4), THE CIT(A) AFTER DELIBERATING ON DEFINITION OF THE TERM M ANUFACTURE , IN THE BACKDROP OF THE JUDGMENT OF THE HONBLE HIGH COURT OF KERALA IN THE CASE OF TATA TEA LTD. VS. ACIT (ITA NO. 87 OF 2009, DATED 25.01.2010) AND THE DEFINITION OF THE SAID TER M AS HAD BEEN CONTEMPLATED IN C HAPTER IX OF P A G E | 9 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 THE E XPORT I MPORT POLICY, 2002 - 2007, THEREIN AFTER VETTING INTO THE NATURE OF BUSINESS AND THE PROCESS ES INVOLVED IN THE CASE OF THE ASSESSEE , THEREIN OBSERVED THAT THE ASSESSEE WAS INTO MANUFACTUR ING OF S.S. FABRICATED PARTS FROM S.S. SHEETS WITH THE USE OF POWER. IT WAS OBSERVED BY THE CIT(A) THAT THE ENTIRE MANUFACTURING PROCESS CARRIED OUT BY THE ASSESSEE INVOLVED VARIOUS PROCESS ES WHICH WERE CARRIED ON THE S.S. SHEETS , BEFORE THE SAME WERE CONVERTED INTO S .S. FABRICATED PARTS, AS UNDER: - I. MAKING AND CUTTING SS SHEET II. BENDING OF SHEET THROUGH HAND PRESS III. WELDING, GRINDING AND DRILLING OPERATION IV. FITTING OF SEPARATE SHEET METAL PARTS TO FORM DOUBLE WALLED CABINET/FABRICATED PANEL. V. INSULATING THE CABINET. 7. THE CIT(A) THUS DELIBERATING ON THE AFORESAID PROCESS LEADING TO THE MANUFACTURING OF THE FINAL PRODUCT, VIZ. S.S. FABRICATED PARTS, THEREIN CONCLUDED THAT IT CAN SAFELY BE HELD THAT THE FABRICATED PARTS WERE THE RESULT OF TRAN SFORMATION FROM S.S. SHEETS WHICH WAS A COMMERCIALLY DIFFERENT PRODUCT DISTINCT FROM THE RAW MATERIALS. THE CIT(A) AFTER REFERRING TO THE MATERIAL PLACED ON RECORD BY THE ASSESSEE, THEREIN OBSERVED THAT THE LATTER HAD DURING THE YEAR UNDER CONSIDERATION PR ODUCED M ODULAR I NTEGRATED P ANTRY U NITY FROM S.S. SHEETS AND OTHER MATERIALS. THUS IN THE BACKDROP OF THE AFORESAID FACTS , THE CIT(A) DID NOT FIND FAVOUR WITH THE OBSERVATION OF THE A.O THAT THE S.S. FABRICATED PARTS MANUFACTURED BY THE ASSESSEE AND THE S .S. SHEETS WERE THE SAME COMMODITY. THE CIT(A) THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS , THEREIN DID FIND FAVOUR WITH THE P A G E | 10 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 CONTENTIONS OF THE ASSESSEE THAT IN THE PROCESS OF USING THE S.S. SHEETS TO MAKE IN TO TRA YS FOR THE R AILWAY P ANTRY , THE NATURE AND CHARACTER OF THE ORIGINAL SHEETS WAS SUBSTANTIALLY ALTERED , AND THUS IT COULD SAFELY BE HELD THAT A NEW PRODUCT CAME INTO EXISTENCE. THE CIT(A) TAKING COGNIZANCE O F THE FACT THAT THE FINAL PRODUCT WAS MANUFACTURED ON THE BASIS OF TECHNICA L DESIGNS, DRAWINGS AND SPECIFICATION, AS PER WHICH THE ORIGINAL SHEETS WERE ALTERED INTO SH APES AND INVOLVED DRILLING OF HOLES ETC, THUS CONCLUDED THAT THE SAME LED TO CREATION OF A NEW PRODUCT. THE CIT(A) IN ORDER TO DRIVE HOME HIS AFORESAID VIEW , THERE IN TOOK SUPPORT OF THE JUDGMENT OF THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. ZAINAB TRADING PVT. LTD. (2011)(333 ITR 144) (MAD), WHEREIN ON A SIMILAR FOOTING THE HONBLE HIGH COURT HAD CONCLUDED THAT THE CON VERSION OF CORRUGATED SHEETS INTO BOXES CONSTITUTED MANUFACTURING OF A PRODUCT . 8 . THE CIT(A) FURTHER DELIBERATING ON THE SATISFACTION OF THE SECOND CONDITION CONTEMPLATED U/S. 80IB(4) , AS PER WHICH IN THE CASE OF AN UNDERTAKING WHICH IS CARRYING ON MANUFACTURING PROCESS WITH THE AID OF POWER, IS REQUIRED TO EMPLOY 10 OR MORE WORKERS, THEREIN OBSERVED THAT AS THE ASSESSEE HAD FILED A WAGE REGISTER OF 11 WORKERS EMPLOYE D, AS WELL AS PLACED ON RECORD THE MONTHLY MUSTER B OOK , AS WELL AS FORTIFIED THE SAID FACTUAL POSITION BY REFER RING TO THE FIELD REPORT DATED 17.12.2007 GIVEN BY THE INCOME - TAX INSPECTOR AFTER VISITING THE PREMISES OF THE ASSESSEE IN THE COURSE OF THE PROCEEDINGS FOR A.Y 2006 - 07 , WHEREIN THE LATTER HAD OB SERVED THAT THOUGH IT WAS A HOLIDAY , STILL MOST OF THE WORKERS , NUMBERING ABOUT 12 , WERE AVAILABLE AT THE PREMISES. THE CIT(A) THUS CONCLUDED THAT THE ASSESSEE COULD SAFELY BE HELD TO HAVE EMPLOYED MORE THAN 10 WORKERS AT HIS UNIT, AND THUS DULY SATISFIED THE SECOND LIMB CONTEMPLATED U/S. 80IB(4) . P A G E | 11 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 9 . THE CIT(A) THUS DELIBERATING ON THE CONTENTIONS OF THE ASSESSEE BEFORE HIM , IN THE BACKDROP OF THE MATERIAL AVAILABLE ON RECORD , THEREIN CONCLUDED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF S.S. CASSEROLE CONTAINERS BY SUBJECTING THE S.S. SHEETS TO VARIOUS PROCESS ES OF MARKING AND CUTTING SS SHETS, BENDING OF SHEETS THROUGH HAND PRESS , WELDING, GRINDING AND D RILLING , FITTING OF SEPARATE SHEET METAL PARTS TO FORM DOUBLE WALLED CABINET/FABRICATED PANEL AND INSULATING THE CABINET, THUS COULD SAFELY BE HELD TO BE IN THE BUSINESS OF MANUFACTURING OF A NEW PRODUCT. THAT IN RESPECT OF THE ADVERSE INFERENCES DRAWN BY THE A.O AS REGARDS THE POOR CO R RELATION BETWEEN THE PERCENTAGE OF POWER AND THE MANUFACTURING ACTIVITY OF THE ASSESSEE, IT WAS OBSERVED BY THE CIT(A) THAT AS THE PROCESS OF MANUFACTURING OF THE ASSESSEE WAS NOT A POWER INTENSIVE PROCESS , THEREFORE NO FEAS IBLE RESULTS COULD BE ARRIVED AT BY MAKING SUCH A COMPARISON . THE CIT(A) FURTHER BEING INSPIRED BY THE AFFIDAVIT S FILED BY THE PROPRIETORS OF M/S. ROSHNI ELECTRICALS AND M/S. VIKAS ELECTRICALS, AS WELL AS FIELD REPORT OF THE INCOME - TAX I NSPECTOR , WHICH CL EARLY POINTED OUT THAT THE MACHINERY AND TOOLS EXISTED AT THE PREMISES OF THE ASSESSES UNIT, THUS CONCLUDED THAT THE SAID FACTS FURTHER DID GO TO SUBSTANTIATE BEYOND ANY SCOPE OF DOUBT THE GENUINENESS AND VERACITY OF THE MANUFACTURING PROCESS CARRIED OUT BY THE ASSESSEE. 10 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THAT AT THE VERY OUTSET OF THE HEARING OF THE APPEAL , IT WAS AVERRED BY THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R.) THAT AS HELD BY THE A.O , THE ASSESSEE WAS NOT IN THE BUSINESS OF MANUFACTURING, BUT IN A BUSINESS OF FABRICATION AND ASSEMBLING OF ENGINEERING PRODUCTS. THE LD. D.R IN THE BACKDROP OF THE A FORESAID FACTS, THEREIN DREW OUR ATTENTION TO THE OBSERVATION OF THE A.O. RECORDED AT PAGE 4 - PARA 6 OF THE ASSESSMENT ORDER , IN SUPPORT OF HIS CONTENTION THAT AS THE ASSESSEE HAD NOT P A G E | 12 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 CARRIED OUT ANY MANUFACTURING ACTIVITY AT HIS FACTOR Y AT SILVASSA , EITHER DURING THE YEAR UNDER CONSIDERATION OR IN THE EARLIER PREVIOUS YEAR S , THEREFORE IT WAS NOT ENTITLED FOR CLAIM OF DEDUCTION U/S. 80IB(4) OF RS.31,28,017/ - . THE LD. D.R. FURTHER DREW OUR ATTENTION TO THE COPY OF THE BILL O F M/S. VIKAS ELECTRICALS, DAT ED 15.03.2004 , COPY OF THE LEDGER ACCOUNT OF M/S. VIKAS ELECTRICALS APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND A COPY OF THE CONFIRMATION DATED 01.04.2004 , ISSUED BY THE ASSESSEE TO M/S. VIKAS ELECTRICALS ( PAGE132 - 134 OF APB) , WHICH REVEALED THAT A PAYMENT OF RS.5 , 000/ - HAD BEEN PAID BY THE ASSESSEE VIDE C HEQUE NO. 145255, DATED 13.03.2004 , DRAWN ON THE B ANK OF RAJASTHAN. THE LD. D.R. THEREIN TAKING US TO THE COPY OF THE BANK ACCOUNT PLACED AT PAGE 135 OF APB , THEREIN SUBMITTED THAT CONTRARY TO THE AFORESAID CLAIM OF THE ASSESSEE, THE AMOUNT OF RS.5000/ - WAS FOUND TO HAVE BEEN PAID TO M/S. VIKAS ELECTRICALS ON 13.03.2004 , NOT BY WAY OF ANY CHEQUE, BUT BY WAY OF CASH WITHDRAWN AGAINST CHEQUE NO. 145303. THE LD. D.R. THUS TRIED TO IMPRESS UPON US THAT THE AFORESAID STATE OF AFFAIRS CLEARLY REVEALED THAT GENUINENESS OF THE PURCHASE OF MACHINERY BY THE ASSESSEE WAS CLEARLY DISPROVED ON THE BASIS OF THE AFORESAID DOCUMENTS. IT WAS FURTHER A VERRED BY THE LD. D.R. THAT IN THE PERIOD REL ATABLE TO A.Y. 2004 - 05, NO CLAIM TOWARDS DEDUCTION U/S. 80IB(4) WAS RAISED BY THE ASSESSEE. PER CONTRA, IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE (FOR SHORT A.R.) FOR THE ASSESSEE THAT THE CIT(A) DURING THE COURSE OF THE APPELLATE PROCEEDINGS HAD CALLED FOR A REMAND REPORT FROM THE A.O. T H AT IT WAS SUBMITTED BY THE LD. A . R. THAT AS DURING THE PERIOD RELEVANT TO A.Y. 2004 - 05 THE ASSESSEE HAD OFFERED A LOSS , IT WAS ONLY FOR THE SAID REASON THAT NO CLAIM OF DEDUCTION U/S. 80IB(4) WAS RAISED IN THE SAID YEAR. THE LD. A.R DRAWING OUR ATTENTION TO THE COPY OF THE ASSESSMENT ORDER PASSED UNDER SEC. 143(3) IN THE CASE OF THE ASSESSEE FOR A.Y. 2005 - 06 ( PAGE 50 - 54 OF APB ) , THEREIN SUBMITTED THAT ITS CLAIM TOWARDS DEDUCTION P A G E | 13 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 U/S. 80IB(4) OF RS.18,58,737/ - W AS ALLOWED BY THE A.O ONLY AFTER THOROUGH VETTING IN THE COURSE OF THE ASSESSMENT FRAMED U/S. 143(3). THE LD. A.R. FURTHER SUBMITTED THAT THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4) HAD THEREAFTER HAD BEEN TESTED IN APPEALS FILE D BY THE ASSESSEE AND REVENUE , IN THE CASE OF THE ASSESSEE FOR A.Y. 2005 - 06 AND 2006 - 07 , RESPECTIVELY , WHEREIN THE TRIBUNAL AFTER DELIBERATING ON THE FACTS INVOLVED IN THE AFOREMENTIONED YEARS , HAD THEREIN UPHELD THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION U/S. 80IB(4). THE LD. A.R FURTHER REBUTTING THE OBSERVATIONS OF THE LD. D.R. IN RESPECT OF THE CONFLICTING CLAIM OF THE PAYMENT OF RS.5,000/ - MADE BY THE ASSESSEE TO M/S. VIKAS ELECTRICALS (S UPRA), THEREIN SUBMITTED THAT THE FACTUAL POSITION WAS MISCONCEIVED AS THE COPY OF THE BANK ACCOUNT REFER RED TO BY THE LD. A.R. AT PAGE 135 OF APB, DID NOT PERTAIN TO THE ASSESSEE , BUT TO ITS SISTER CONCERN , VIZ. M/S DEEPALI ENTERPRISES. THE LD. A.R. FUR THER SUBMITTED THAT THE COPY OF THE S CRUTINY REPORT OBTAINED BY THE ASSESSEE BY WAY OF AN APPLICATION FILED UNDER THE RIGHT TO INFORMATION ACT ( PAGE 53 - 54 OF APB) , THEREIN REVEALED THAT THE A.O HIMSEL F HAD ADVISED TO THE CIT THAT NO SECOND APPEAL MAY BE FILED IN THE CASE OF THE CAPTIONED ASSESSEE IN RESPECT OF ITS ENTITLEMENT TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4) FOR A.Y. 2006 - 07, FOR THE REASON THAT THE DEPARTMENT ITSELF HAD ACCEPTED THE ASSESSEES CLAIM FOR DEDUCTION UNDER THE AFORESAID STATUTORY PROVISION IN A.Y (S) . 2004 - 05 AND 2005 - 06 . THE LD. A.R. FURTHER TO SUBSTANTIATE THE FACT THAT THE ASSESSEE CONCERN HAD EMPLOY ED MORE THAN 10 EMPLOYEES DURING THE YEAR UNDER CONSIDERATION , AS WELL AS IN THE PRECEDING YEARS, VIZ. A.Y (S) .2004 - 05 , 2005 - 06 AND 2006 - 07, THEREIN DREW OUT ATTENTION TO PAGE NO. 172 - 175 OF APB. THE LD. A.R FURTHER SUBMITTED THAT THE SALES REFLECTED BY THE UNIT AT SILVASSA FOR THE YEAR UNDER CONSIDERATION HAD DULY BEEN ACCEPTED AND ASSESSED UNDER THE CENTRAL S ALES TAX ACT, 1956, AND IN ORDER TO FORTIFY HIS SAID P A G E | 14 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 CONTENTION, THEREIN TOOK US THROUGH PAGE 160 OF APB . IT WAS SUBMITTED BY THE LD. A.R THAT NOW WHEN THE CLAIM OF THE ASSESSEE U/S. 80IB(4) HAD BEEN ALLOWED IN THE PRECEDING YEARS, THEREFORE IN THE ABSENCE OF THERE BEING ANY CHANGE IN FACTS , THERE WAS NO REASON TO TAKE A DIFFERENT VIEW AND THEREIN HOLD THAT THE ASSESSEE STOOD DISENTITLED TOWARDS THE CLAIM OF DEDUCTION UNDER THE SAID STATUTORY PROVISION. THE LD. A.R. IN SUPPORT OF HIS AFORESAID CONTENTION TH EREIN SUBMITTED THAT IN LIGHT OF THE RULE OF CONSISTENCY , A DIFFERENT VIEW ON THE BASIS OF SAME FACTS IN RESPECT OF THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4) , WAS NOT PERMISSIBLE IN THE EYES OF LAW, THEREIN TOOK SUPPORT OF THE FOLLOWING JUDICIAL PRONOUNCEMENT: - 1. CIT VS. PAUL BROTHERS (1995)216 ITR 548 (BOM) 2 . CIT VS. WESTERN OUT FLOOR INTERACTIVE P. LTD. (2012)349 ITR 309 (BOM) 3 . RADHASOAMI SATSANG VS. CI T (1992)193 ITR 321(SC) 4 . DCIT VS. JINDAL PHOTOFILMS LTD . (2008) 113 ITD 0624 (TM). THE LD. A.R FURTHER SUBMITTED , THAT AS HA D BEEN APPRECIATED AT LENGTH BY THE CIT(A), IT STOOD ESTABLISHED BEYOND ANY SCOPE OF DOUBT THAT THE ASSESSEE WAS INVOLVED IN MANUFACTURING OF S.S. CASSEROLE CONTAINERS FROM THE S.S. SHEETS, THEREFORE IN THE BACKDROP OF DUE COMPLIANCE BY THE ASSESSEE OF THE REQUISITE CONDITIONS CONTEMPLATED U/S. 80IB(4) , THEREIN AVERRED THAT NO ADVERSE INFERENCES AS REGARDS THE LATTER S ENTITLEMENT TOWARDS THE CLAIM OF A DEDUCTION UNDER THE SAID STATUTORY PROVISION WAS LIABLE TO BE DRAWN. IT WAS THUS SUBMITTED BY THE LD. A.R THAT THE CIT(A) AFTER DULY APPRECIATING THE FACTS OF THE CASE IN LIGHT OF P A G E | 15 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 THE SETTLED POSITION OF LAW , HAD RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT THE LATTER WAS DULY ENTITLED TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4). 11. WE HAVE HEARD TH E AUTHORIZED REPRESENTATIVE S FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PRODUCED BEFORE US. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE OF THE CONSIDERED VIEW THAT THE MANUFACTURING PRO CESS INVOLVED IN CONVERTING THE S.S. SHEETS INTO S.S. CASSEROLE CONTAINERS , CLEARLY ESTABLISHES BRINGING INTO EXISTENCE A NEW PRODUCT HAVING A DISTINCTIVE NAME, CHARACTER, AND USE. WE ARE PERSUADED TO SUBSCRIBE TO THE OBSERVATIONS OF THE CIT(A) THAT THE S. S. FABRICATED PARTS WHICH ARE MADE BY THE ASSESSEE FROM THE S.S. SHEETS , ARE THE RESULT OF TRANSFORMATION FROM S.S. SHEETS WHICH IS DIFFERENT IN SIZE, SHAPE , CONTOUR AND UTILITY , IS A ENTIRELY A COMMERCIAL LY DIFFERENT PRODUCT , DISTINCT FROM THE RAW MATERIAL, AND AS SUCH FALLS WITHIN THE FOUR CORNERS OF THE TERM MANUFACTURE. THAT STILL FURTHER ON THE BASIS OF THE MATERIAL MADE AVAILABLE ON RECORD BY THE ASSESSEE , WE FIND THAT THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION HA D EMPLOYED MORE THAN 10 WORKERS IN THE PROCESS OF MANUFACTURING CARRIED ON BY HIM WITH THE A I D OF POWER. WE ARE THUS OF THE CONSIDERED VIEW , THAT AS THE ASSESSEE HAD CUMULATIVELY SATISFIED BOTH OF THE REQUISITE CONDITIONS CONTEMPLATED U/S. 80IB(4), THEREF ORE THE CIT(A) HAD RIGHTLY OBSERVED THAT THE ASSESSEE STOOD DULY ENTITLED TOWARDS CLAIM OF DEDUCTION UNDER THE AFORESAID STATUTORY PROVISION. WE FURTHER FIND THAT IT ALSO REMAINS AS A MATTER OF FACT THAT THE ASSESSEE SINCE INCEPTION HAD CLAIM ED DEDUCTION U/S. 80IB(4), WHICH HAD BEEN ALLOWED TO HIM AS SUCH. WE THUS FURTHER FIND OURSELVES TO BE IN AGREEMENT WITH THE LD. A.R. THAT IN LIGHT OF THE SETTLED POSITION OF LAW , NOW WHEN THE ASSESSEE HAD BEEN HELD AS ELIGIBLE AND THEREIN ENTITLED TOWARDS CLAIM OF DED UCTION UNDER THE AFORESAID STATUTORY PROVISION FOR THE PRECEDING YEARS, VIZ. A.Y. P A G E | 16 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 2005 - 06 AND A.Y. 2006 - 07, THEREFORE UNLESS THE SAID RELIE F GRANTED IN THE SAID PRECEDING YEARS IN WHICH SUCH CLAIM WAS MADE AND ACCEPTED IS WITHDRAWN OR SET ASIDE, THE A.O CANNOT BE ALLOWED, TO HOLD A DIFFERENT VIEW AND DISENTITLE THE ASSESSEE FROM CLAIM OF THE DEDUCTION UNDER THE SAME STATUTORY PROVISION DURING THE YEAR UNDER CONSIDERATION. WE THUS IN LIGHT OF OUR AFORESAID OBSERVATIONS FIND IN G NO REASON TO TAKE A DIFFERENT VIEW , THEREFORE UPHOLD THE ORDER OF THE CIT(A) THAT THE ASSESSEE STOOD DULY ENTITLED FOR CLAIM OF DEDUCTION OF RS.31,28,017/ - U/S. 80IB(4). THE APPEAL OF THE REVENUE IS THUS DISMISSED. ITA NO. 1689/MUM/2014 A.Y. 20 08 - 09 12. WE NOW TAKE UP THE APPEAL OF THE REVENUE, MARKED AS ITA NO. 1689/MUM/2014. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A), DATED 18.12.2013 FOR A.Y. 2008 - 09 HAD RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING CLAIM OF DEDUCTION U/S. 80I B(4) OF RS. 38,39,300/ - WITHOUT APPRECIATING THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE FACT THAT MANUFACTURING WAS COMMENCED ON OR BEFORE 31.03.2004 BEING ONE OF THE CRITERIA FOR THE DEDUCTI ON U/S. 80IB( 4).OF THE I.T. ACT. 2. ON THE FACTS OF THE CIRCUMS TANCES OF THE CASE, AND IN LAW THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO PRODUCED DOCUMENTARY EVIDENCES TO SUBSTANTIATE ITS CLAIM REGARDING THE NUMBER OF WORKERS EMPLOYED. 3. ON THE FACTS AND CI RCUMSTANCES OF THE CASE AND IN L AW, THE LD . CIT(A) ERRED IN ADMIT TING THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 4 6 A WITHOUT ALLOWING AN OPPORTUNITY TO EXAMINE THE EVIDENCES IN REMAND PROCEEDING. 4. ON THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE LD . CIT(A ) IS NOT JUSTIFIED IN DELETING THE ADDITION ON THE BASIS OF ADDITIONAL EVIDENCES IN SPITE OF THE FACT THAT AMPLE OPPORTUNITIES WERE ACCORDED TO THE ASSESSEE P A G E | 17 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 DURING THE ASSESSMENT PROCEEDINGS FOR FU RNISHING DOCUMENTARY EVIDENCES. 5. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A . O BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND.' 13 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 2008 - 09 DECLARING TOTAL INCOME AT RS.3,35,110/ - ON 30.09.2008, WHICH WAS PROCESSED AS SUCH 143(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS TAKEN FOR SCRUTINY ASSESSMENT U/S. 143(2). THE A.O WHILE FRAMING THE ASSESSMENT DISALLOWED THE ASSESSEES CLAIM TOWARDS DEDUCTION U/S. 80IB(4) O F RS. 38,39,300/ - , AND THEREAFTER DELIBERATING ON CERTAIN OTHER ISSUES ASSESS ED THE LATTER S INCOME AT RS. 41,74,400/ - . THE ASSESSEE ASSAILED THE DISALLOWANCE OF ITS CLAIM U/S. 80IB(4) BEFORE THE CIT(A), WHO THEREIN VIDE HIS ORDER DATED 18.12.2013 HELD THAT THE ASSESSEE WAS ENTITLED TOWARDS CLAIM OF DEDUCTION U/S. 80IB(4), AND THUS ALLOWED THE APPEAL. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD THEREIN CARRIED THE MATTER BEFORE US. THAT AT THE VERY OUTSET OF THE HEARING OF THE APPEAL IT WAS SUBMITTED BY THE LD. A.R THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS THE SAME AS WAS INVOLVED IN THE LATTERS CASE FOR A.Y. 2007 - 08, MARKED AS ITA NO. 1688/MUM/2014. THE AFORESAID FACTUAL POS ITION HAD NOT BEEN CONTROVERTED BY THE LD. D .R. WE HAVE PERUSED THE ISSUE UNDER CONSIDERATION AND ARE OF THE CONSIDERED VIEW THAT THE SAME ISSUE INVOLVED IN THE PRESENT APPEAL PERTAINING TO THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION U/S. 80 IB(4) , WAS INVOLVED IN THE ASSESSES OWN APPEAL F OR A.Y. 2007 - 08, THEREFORE OUR ORDER PASSED IN THE SAID APPEAL SHALL APPLY MUTATIS MUTANDIS IN THE PRESENT APPEAL. P A G E | 18 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 14. WE THUS IN THE BACKDROP OF OUR OBSERVATIONS AND FINDING S ARRIVED AT IN THE CASE OF THE ASSESSEE FOR A.Y. 2007 - 08, MARKED AS ITA NO. 1688/MUM/2014 , THERE FORE DISMISS THE PRESENT APPEAL OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT 22 .06.2017 SD/ - SD/ - ( R.C. SHARMA ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 22 .06.2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 19 ITA NO.1688 &1689 A.Y. 2007 - 08 &2008 - 09 SR. NO . DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER