Addll. CIT, Haridwar V. M/s Haridwar Steelts Pvt. Ltd, Haridwar

ITA 1787/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3733 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY

Judgement Text

ITA NO. 1787/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1787/DEL/2010 A.Y. : 2005-06 ADDITIONAL COMMISSIONER OF INCOME TAX, HARDWAR RANGE, HARDWAR D-29 & 30, INDUSTRIAL AREA, HARDWAR (PAN : (PAN : (PAN : (PAN : AABCH1283N AABCH1283N AABCH1283N AABCH1283N) )) ) VS. M/S HARIDWAR STEELS (P) LTD., C-9, D-2, INDUSTRIAL AREA, BAHADRABAD, HARDWAR (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. GAUTAM JAIN, CA DEPARTMENT BY : MS. MONA MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 31.12. 2009 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. THE GROUNDS RAISED READ AS UNDER:- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRE D IN LAW AND ON FACTS IN ALLOWING DEDUCTION U/S 80IC IGNORIN G THE FACT THAT THE ASSESSEE DID NOT FULFILL STATUARY PRECONDITIONS OF GETTING THE AUDIT REPORT IN FORM NO. 10CCB ALONGWITH RETURN OF I NCOME WHILE CLAIMING DEDUCTION U/S 80IC. ITA NO. 1787/DEL/2010 2 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT AUDIT REPORT IN FORM NO. 10CCB WAS ACTUALLY FILED WITH THE RETURN OF INCOME WITHOUT PERUSING SCHEDULE-I LIST OF DOCUMENT S/ STATEMENT ATTACHED WHEREIN MENTION HAS BEEN MADE ONLY AUDIT RE PORT IN FORM NO. 3CCB CONTAINING 13 PAGES. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN ADMITTING THE FRESH EVIDENCE IN THE FORM OF BILLS FOR PURCHASE OF PLANT AND MACHINERY DURING THE APPE LLANT PROCEEDINGS IN THE CONTRAVENTION OF SUB RULE (1) OF RULE 46A OF THE IT RULES, 1962, WITHOUT PROVIDING THE OPPORTUNI TY OF BEING HEARD THE ASSESSING OFFICER . 3. IN THIS CASE ASSESSING OFFICER OBSERVED THAT T HIS IS THE FIRST YEAR OF CLAIM OF DEDUCTION U/S 80IC OF THE IT ACT, 1961 O F THE ASSESSEE. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF M.S. INGOTS BY USING SPONZE IRON AND SCARP. ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE CLAIM OF DEDUCTION U/S 80IC OF THE IT ACT, 1961 WAS EXAMINED AND THE FOLLOWING OBSERVATIONS EMERGE:- A) THE ASSESSEE IS REQUIRED TO GET ITS ACCOUNTS AUD ITED BY CHARTERED ACCOUNTANT AND TO FURNISH HIS REPORT IN THE PRESCRIBED FORM 10CCB UNDER RULE 18BBB AS REQUIRED B Y SUB SECTION (7) OF 80IC OF THE IT ACT, 1961. THE AS SESSEE HAS NOT ENCLOSED THE SAID AUDIT REPORT ALONGWITH ITS RE TURN OF INCOME FOR ASSESSMENT YEAR 2005-06 WHICH IS A MANDAT ORY TO BE FILED. B) IN THE FINANCIAL YEAR 2002-03 THE ASSESSEE HAD P URCHASED A FURNACE FOR HIS PLANT, AND THE VALUE OF P&M AS ON 31 .3.03 ITA NO. 1787/DEL/2010 3 WAS ` 20,48,600/-. VIDE ORDER SHEET ENTRY DATED 26.11.2007, THE ASSESSEE WAS REQUIRED TO SUBMIT THE BILLS OF PURCHASE OF ALL THE P&M (INCLUDING FURNACE) PURCHASE D DURING FY 2002-03 FOR ` 2048600/-. THE ASSESSEE WA S REQUIRED TO PRODUCE THE ORIGINAL BILLS OF P&M FOR VERIFICATION ACQUIRED IN FINANCIAL YEAR 2002-03. SINCE THESE BILL S WERE NOT PRODUCED ON 26.12.2007, THEREFORE, THE ASSESSEE WAS REQUIRED VIDE ORDER SHEET ENTRY DATED 27.12.2007 TO FURNISH THE NAME AND ADDRESS FOR THE SUPPLIER OF THE FURNAC E WHICH WAS PURCHASED IN FINANCIAL YEAR 2002-03 FOR ` 204860 0/- TO PROVE THAT IT WAS A NEW MACHINERY. ASSESSEE WAS FU RTHER REQUIRED TO PROVE THAT THE SAID FURNACE WAS A NEW MACHINERY. HOWEVER, ON NEXT DATE OF HEARING I.E. 28.12.2007, THE ASSESSEE IN HIS REPLY DATED 28.12.2 007 HAS ONLY SUBMITTED THE CERTIFICATE FROM EXCISE DEPARTMENT, WHICH STATED THAT AS PER RECORD OF THEIR OFFICE TH AT THE ASSESSEE HAS INSTALLED A NEW UNIT AND AVAILED THE B ENEFIT OF EXEMPTION NOTIFICATION NO. 50/03 DATED 10.6.03 FOR T HE PERIOD FROM DATE OF COMMENCEMENT OF PRODUCTION I.E. 15.04.2004 TILL THE DATE OF CLOSURE OF UNIT I.E. 3 0.9.06. 4. IN THIS BACKGROUND, ASSESSING OFFICER HELD THAT ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT PLANT AND MACHINERY INSTALLE D BY THE ASSESSEE IN THE FINANCIAL YEAR 2002-03 WORTH ` 2048600/- WAS A NEW MACHINERY AND THEREBY NOT FULFILLING THE REQUIREMENT OF SUB-S ECTION (4) OF SECTION 80IC OF THE IT ACT. ALSO, ASSESSEE HAS NOT FILED T HE AUDIT REPORT IN FORM 3CCB ALONGWITH THE RETURN AND EVEN THEREAFTER. THUS, ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S 80IC OF THE ASSESSEE. ITA NO. 1787/DEL/2010 4 5. AGAINST THE ABOVE ORDER ASSESSEE APPEALED BEFOR E THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSION ER OF INCOME TAX (APPEALS) OBSERVED THAT DURING THE COURSE OF AP PELLATE PROCEEDINGS ASSESSEE WAS ASKED TO PRODUCE THE BILLS IN RESPECT OF PURCHASE OF PLANT AND MACHINERY FOR FINANCIAL Y EAR 2002-03 TO THE TUNE OF ` 2048600/-. THE SAID BILLS WERE PRODUCED FOR VERIFICATION ALONGIWTH THE BANK ACCOUNTS EVIDENCING THE PAYMENT IN RESPECT OF PURCHASE OF PLANT AND MACHINERY. IN ADDITION THE C OPY OF THE CERTIFICATE FORM EXCISE AUTHORITIES HAS ALSO BEEN PR ODUCED WHEREIN IT HAS BEEN MENTIONED THAT IT IS CERTIFIED ON THE BAS IS OF RECORDS AVAILABLE WITH THIS OFFICE THAT M/S HARDWAR STEELS (P) LTD. HAS INSTALLED A NEW UNIT (PLANT AND MACHINERY). FURTHER, A COPY O F FORM 36 FOR TRANSFER OF FURNACE AND THE CORRESPONDENCE WITH CO MMERCIAL TAX DEPARTMENT FOR TRANSFER OF FURNACE HAS BEEN FURNISHED TO ESTABLISH THAT THE PLANT AND MACHINERY, NAMELY, THE INDUCTION FURNA CE WITH ACCESSORIES HAVE BEEN DULY PURCHASED AND INSTALLED AT THE MANUFACTURING SITE OF THE ASSESSEE. LD. COMMISSIONER OF INCOME TAX (APPEALS) UPON CONSIDERATION OF THE ABOVE HELD AS U NDER:- I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE COUN SEL OF THE APPELLANT AND THE EVIDENCE AND OTHER DOCUMENTS PLAC ED BEFORE ME DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS OBSERVED THAT THE AO HAS REJECTED THE CLAIM OF DEDUCTION U/S 8OIC OF THE I.T. ACT MAINLY ON THE GROUND THAT THE AUDIT REPORT IN FORM NO . 10CCB WAS NOT FILED ALONG WITH THE RETURN OF INCOME AND T HE BILLS IN RESPECT OF THE PLANT AND MACHINERY INSTALLED HAVE NO T BEEN PRODUCED TO PROVE THAT SUCH PLANT AND MACHINERY HAVE ACTUALLY BEEN INSTALLED AT THE MANUFACTURING UNIT OF THE APPE LLANT. ON THE OTHER HAND, THE COUNSEL OF THE APPELLANT HAS SUBMIT TED THAT THE ITA NO. 1787/DEL/2010 5 AUDIT REPORT HAS ACTUALLY BEEN FILED ALONG WITH RET URN OF INCOME WHICH IS CONFIRMED BY THE FACT THAT THE RETURN HAS B EEN PROCESSED U/S 143(1) AND NO ADVERSE INFERENCE HAS BEEN DRAWN AS REGARDS THE NON-AVAILABILITY OF AUDIT REPORT IN FORM NO. 1O C CB AT THE TIME OF SUCH PROCESSING OF RETURN. FURTHER, IT HAS B EEN ARGUED THAT HAD THERE BEEN NO SUCH AUDIT REPORT ALONG WITH THE RETURN OF INCOME, ID. AO SHOULD HAVE DECLARED THE RETURN DEFE CTIVE U/S 139(9) OF THE I.T. ACT AND THE APPELLANT SHOULD HAV E BEEN GIVEN AN OPPORTUNITY TO RECTIFY THE SAME WHICH HAVE NOT B EEN GRANTED. AS FAR AS THE BILLS IN RESPECT OF PLANT AND MACHINER Y ARE CONCERNED, IT HAS BEEN SUBMITTED THAT THE ACCOUNTING RECORDS FOR EARLIER YEARS GOT MISPLACED AND UNAVAILABLE AT ONE P LACE. IN FACT DUE TO BUSINESS ADVERSITY, THE APPELLANT HAS CLOSED THE UNIT DURING F.Y. 2006-07 AND HAS SOLD EVEN THE LAND, BUIL DING, PLANT AND MACHINERY ETC. AND WHEN THE ASSESSMENT PROCEEDIN GS WERE IN PROGRESS, THE APPELLANT DID NOT HAVE ANY OFFICE PLACE EVEN OF ITS OWN. AS A RESULT, THE APPELLANT COULD NOT PRODU CE THE REQUISITE EVIDENCE BY WAY OF BILLS OF PLANT AND MACHINERY DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE APPELLANT HA S PRODUCED THE CERTIFICATE GRANTED BY CENTRAL EXCISE DEPARTMENT REGARDING INSTALLATION OF NEW PLANT AND MACHINERY. IN FACT A L ARGER PACKAGE HAS BEEN GRANTED TO THE STATE OF UTTARAKAHND AND HI MACHAL PRADESH IN THE FORM OF NEW INDUSTRIAL POLICY, BY VIRT UE OF WHICH EXCISE EXEMPTION HAS BEEN GRANTED FOR 10 YEARS TO A UNIT COMPLYING WITH THE SAME CONDITIONS AS HAVE BEEN ENVIS AGED IN THE ACT FOR DEDUCTION U/S 8OIC. THE APPELLANT HAD P RODUCED THE BILLS OF NEW PLANT AND MACHINERY WITH EXCISE DEPARTME NT ON THE BASIS OF WHICH EXEMPTION WAS GRANTED BY THE EXCISE A UTHORITIES. ITA NO. 1787/DEL/2010 6 THE ABOVE CERTIFICATE BY THE CENTRAL EXCISE DEPARTM ENT WAS SUFFICIENT GROUND ESTABLISHING THE CLAIM OF INSTALLA TION OF THE IMPUGNED NEW PLANT AND MACHINERY. SUBSEQUENTLY, DURIN G THE COURSE OF APPELLATE PROCEEDINGS, THE COUNSEL OF THE APPELLANT HAS PRODUCED THE PHOTOCOPIES OF THE BILLS OF RAGHUPATI ISPAT LTD., BHIWADI, RAJASTHAN FOR PURCHASE OF INDUCTION FURNACE - BILL NO. 163 DATED 17.11.2002 FOR RS. 5,21,0401/-, BILL NO. 162 DATED 15.11.02 FOR RS. 7,48,8OOI- AND BILL NO. 161 DATED 15.11.02 FOR RS. 7,59,200/- AGGREGATING TO RS. 20,48,600/-. THE RELEVANT TRANSPORT BILL ALSO OF THE SERVICE PROVIDER HAS BEE N PRODUCED ESTABLISHING THE TRANSFER OF THE GOODS FROM BHIWADI TO BAHADRABAD, HARDWAR. IN ADDITION, FORM NO. 36 FOR T RANSFER OF THE FURNACE AND THE CORRESPONDENCE WITH COMMERCIAL TAX DEPARTMENT FOR TRANSFER OF SUCH GOODS HAVE ALSO BEEN PRODUCED WHICH ESTABLISH THAT SUCH PLANT AND MACHINERY HAVE ACTUALLY BEEN INSTALLED AT THE MANUFACTURING UNIT OF THE APP ELLANT. HAVING REGARD TO THE ABOVE FACTS AND THE DOCUMENTS PRODUCED DURING THE COURSE OF APPELLATE PROCEEDINGS , I AM OF THE CONSIDERED OPINION THAT NO ADVERSE MATERIAL FACTS AR E AGAINST THE APPELLANT WHICH MAY CAUSE REJECTION OF THE CLAIM OF DEDUCTION U/S 8OIC OF THE I.T. ACT AND SINCE THE AO HAS NOT BROUG HT ON RECORD ANY OTHER MATERIAL FACTS APART FROM THOSE WHICH HAV E BEEN DULY ADDRESSED BY THE APPELLANT IN COURSE OF ASSESSMENT A S WELL AS APPELLATE PROCEEDINGS, I FIND NO REASON TO REJECT T HE CLAIM OF SUCH DEDUCTION U/S 8OIC OF I.T. ACT, 1961. ACCORDINGLY, THE AO IS HEREBY DIRECTED TO ALLOW SUCH EXEMPTION OF THE CLAIM OF DEDUCTION U/S 8OIC OF I.T. ACT TO THE APPELLANT. ITA NO. 1787/DEL/2010 7 6. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEA L BEFORE US. 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S GIVEN A FINDING THAT THE AUDIT REPORT IN FORM 10CCB WAS DULY FURNISHE D BY THE ASSESSEE. FURTHERMORE, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS HIMSELF ASKED THE ASSESSEE TO PRODUCE THE BILLS IN RESPECT OF PURCHASE OF PLANT AND MACHINERY AND ASSESSEE HAS DULY COMPLIE D WITH THE SAME. FURTHERMORE, THERE IS CERTIFICATE FROM EXCISE DEPARTME NT ALSO IN THIS REGARD. HENCE, THE OBJECTION OF THE ASSESSING OFFI CER WAS DULY MET AND THERE WAS NO REASON TO DENY THE ASSESSEES BENE FIT OF DEDUCTION U/S. 80IC OF THE IT ACT. FURTHERMORE, WE AGREE WI TH THE ASSESSEES CONTENTION THAT FILING OF AUDIT REPORT IS DIRECTOR Y AND THEREFORE, ONCE SUCH REPORT IS ON RECORD, NO DISALLOWANCE IS SUSTAI NABLE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSION, W E DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS), WE UPHOLD THE SAME. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/6/2011. SD/- SD/- [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 10/6/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY ITA NO. 1787/DEL/2010 8 BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES