ACIT, Coimbatore V. M/s. Craftman Automation Pvt Limited, Coimbatore

ITA 1835/CHNY/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4657 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 06-03-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 10-10-2012
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: SREEDHAR
• Keywords: Depreciation; Additional depreciation; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , '.. % , * BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NOS.19 & 1835/MDS/2012 + + /ASSESSMENT YEARS: 2004-05 & 2003-04 THE ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-IV(1), INCOME TAX BUILDING, RACE COURSE ROAD, COIMBATORE-641 018. VS. M/S.CRAFTMAN AUTOMATION PVT.LTD., 15, LML COLONY, PAPPANAICKENPALAYAM, COIMBATORE-641 037. [PAN: AABCC 2461 K ] ( . /APPELLANT) ( /0. /RESPONDENT) . 1 / APPELLANT BY : MR.SUPRIYOPAL, JCIT /0. 1 /RESPONDENT BY : MR.SREEDHAR, ADV. 1 /DATE OF HEARING : 09.03.2017 1 /DATE OF PRONOUNCEMENT : 12.05.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS DATED 28.10.2011 OF COMMISSIONER OF INCOME TAX (APPEALS)- I, COIMBATORE, IN APPEAL NO.179/09-10 FOR THE AY 2004-05 AND ORDER DA TED 31.07.2012 IN APPEAL NO.43/11-12 FOR THE AY 2003-04 AND RAISED TH E FOLLOWING GROUNDS: ITA NOS. 19 & 1835 /MDS/2012 :- 2 -: THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. 1. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MA DE ON ACCOUNT OF ADDITIONAL DEPRECIATION U/S.32(1)(IIA). 2. THE LEARNED CIT(A) FAILED TO CONSIDER WHILE ALLOWING THE ASSEESEES CLAIM THAT NO SOLID BACKING HAS BEEN PROVIDED TO SUBSTANTIATE ITS CLAIM FOR ADDITIONAL DEPRECIATION. 3. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT NO CERTIFICATE UNDER RULE 5A IN FORM 3AA SIGNED BY EITHER A CHARTERED ACCOUNTANT OR ANY PERSON ENTITLED TO BE APPOINTED TO ACT AS AN AUDITOR AS PER PROVISION OF SEC.226, SUBS ECTION (2) OF COMPANIES ACT, 1956 HAS BEEN FILED. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE PRODUCTION CAPACITY IN ANY MANUFACTURING INDUSTRY CONSISTS OF THREE INGREDIENT S NAMELY (1) LICENSE CAPACITY, (II)INSTALLED CAPACITY AND (III) UTILIZED CAPACITY. 5. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ABOVE SUBJECT MATTER HAD NOT BEEN VOUCHED FOR BY THE APPELLANT /CHARTERED ENGINEE R. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE CIT(APPEALS) MAY BE CANCELED AND THAT OF THE ASS ESSING OFFICER RESTORED. 2.0 DELAY : THERE WAS DELAY OF THREE DAYS IN FILING THE APPEAL FOR THE AY 2003- 04 AND THE AO HAS FILED CONDONATION PETITION. THE L D AR DID NOT MAKE ANY OBJECTION FOR CONDONATION. WE HAVE PERUSED THE CONDONATION PETITION AND BOTH SIDES AND CONDONE THE DELAY. 3.0 THE ISSUES INVOLVED IN THE ASSESSMENT YEARS 2003- 04 & 2004-05 ARE COMMON. THEREFORE, BOTH THE APPEALS ARE CLUBBED AN D HEARD TOGETHER AND DISPOSED OFF IN A COMMON ORDER FOR THE SAKE OF CONVENIENCE AS UNDER: 4.0 THE ASSESSEE HAS CLAIMED THE ADDITIONAL DEPRECIATI ON FOR THE AYS 2003-04 & 2004-05. THE AO DISALLOWED THE DEPRECIAT ION OBSERVING THAT THERE WAS NO INCREASE IN THE INSTALLED CAPACITY DUR ING THE PREVIOUS YEAR TO THE EXTENT OF 25% AS REQUIRED U/S.32(I)(IIA) TO ALL OW THE ADDITIONAL DEPRECIATION. ACCORDING TO THE AO FROM THE ANNUAL REPORT, THE INSTALLED ITA NOS. 19 & 1835 /MDS/2012 :- 3 -: CAPACITY WAS 1800 TONNES AS AGAINST THE LICENCED CA PACITY OF 2250 TONNES. THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO SHOW T HAT THE INSTALLED CAPACITY WAS INCREASED BY 25% DURING THE YEAR UNDER CONSIDERATION TO BE ENTITLED FOR ADDITIONAL DEPRECIATION AND HENCE THE AO DISALLOWED THE DEPRECIATION. THIS ISSUE WAS TRAVELLED UP TO THE I TAT AND THE HONBLE ITAT A BENCH, CHENNAI, IN ITA NO.789/MDS/2007 FOR THE AY 2003-04 DATED 18.12.2009, HAS REMITTED THE MATTER BACK TO THE FIL E OF THE AO AS UNDER: 15. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTION. ASSESSING OFFICER HAS WENT BY FORM 3AA FILED BY THE ASSESSEE IN SUPPORT O F ITS CLAIM U/S.32(1)(IIA) OF THE ACT. NO DOUBT, ANNEXURE TO SUCH REPORT MENTIONS THAT INSTAL LED CAPACITY OF 31 ST DAY OF MARCH, 02 AS 1800 TONNES. SIMILARLY, THE ANNUAL REPORT OF THE A SSESSEE FOR THE FINANCIAL YEAR 2002-03, IN ITS PAGE-22, MENTIONS THE INSTALLED CAPACITY AS ON 31.3.03 AS 1800 TONNES. ASSESSING OFFICER THEREFORE CAME TO A CONCLUSION THAT THERE W AS NO INCREASE IN THE INSTALLED CAPACITY DURING THE RELEVANT PREVIOUS YEAR. HOWSOEVER IT RE MAINS AN UNDENIABLE FACT THAT THERE WAS SUBSTANTIAL INCREASE IN THE VALUE OF MACHINERY EXCE EDING 50% IN THE RELEVANT PREVIOUS YEAR, AND SUBSTANTIAL INCREASE IN POWER CONSUMPTION , MAN POWER AND RAW MATERIAL CONSUMPTION. NO DOUBT, POWER CONSUMPTION, RAW MATE RIAL CONSUMPTION, MAN POWER INCREASE WOULD ALL ONLY SHOW ACTUAL UTILIZATION AS MENTIONED BY THE CIT(A). BUT INCREASE IN PLANT AND MACHINERY OF MORE THAN 50% IN THE RELEVAN T PREVIOUS YEAR WOULD IN ALL PROBABILITY LEAD TO INCREASE IN THE INSTALLED CAPAC ITY. WHATSOEVER IT MAY BE, IT WOULD BE NAIVE TO PRESUME THAT INSTALLED CAPACITY REMAINED AT 1800 TOMES DESPITE SUCH INCREASE IN MACHINERY DURING THE RELEVANT PREVIOUS YEAR. IT ,T HEREFORE, PRIMA FACIE APPEARS THAT IN THE ANNEXURE TO HIS REPORT IN FORM 3AA, THE CHARTERED A CCOUNTANT MIGHT HAVE MENTIONED INSTALLED CAPACITY AS ON 31.3.02, AS 1800 TONNES B Y MISTAKE. AS NOTED BY US ABOUT, THERE COULD NOT HAVE BEEN A SITUATION OF NO INCREASE IN THE INSTALLED CAPACITY DESPITE SUBSTANTIAL INCOME ON THE PLANT AND MACHINES , NEVERTHELESS IT WAS DUTY OF THE ASSESSEE TO PROVE THAT SUCH INCREASE EXCEEDED 25%, AS LAID DOWN IN PROVIS O (B) TO CLAUSE-2 OF SUB SECTION (1) OF SECTION 32, AS IT APPLIED FOR RELEVANT PREVIOUS YEA R. ASSESSING OFFICER NEVER PUT TO THE ASSESSEE ANY QUESTION AS TO WHY THE INSTALLED CAPAC ITY REMAINED STAGNANT DESPITE SUBSTANTIAL INCREASE IN ITS PLANT AND MACHINERY. N O DOUBT, BEFORE THE CIT(A) ASSESSEE HAD MADE A SINCERE ENDEAVOUR TO SHOW THAT THERE WAS SUB STANTIAL INCREASE IN INSTALLED CAPACITY, BUT NEVERTHELESS COULD NOT QUANTITATIVELY SHOW HOW IT EXCEEDED 25%. BE THAT AS IT MAY, WE HAVE TO TAKE INTO CONSIDERATION PECULIARILIES OF THE BUSINESS OF AN ASSESSEE BEFORE APPLYING THE PROVISIONS OF THE ACT, WHICH ARE BENEF ICAL TO THE ASSESSEE. ASSESSEE IN THIS CASE IS MANUFACTURING MACHINERY WHICH UNDOUBTEDLY W ERE UNIQUE TO EACH OF ITS CUSTOMERS BEING CUSTOM BUILT. NON HOMOGENOUS PRODUCT AND NON REPETITIVE NATURE WOULD MAKE MEASUREMENT OF THE INSTALLED CAPACITY A SUBJECTIVE AFFAIR. OF COURSE, ASSESSEE COULD HAVE PRODUCED THE CHARTERED ENGINEERS REPORT WHICH IT HA S SOUGHT ADMISSION NOW, AS AN ADDITIONAL EVIDENCE AT THE TIME OF PROCEEDINGS BEFO RE THE CIT(A). HOWEVER, IN OUR OPINION IT OUGHT NOT HAVE BEEN DENIED THE CLAIM OF ADDITION AL DEPRECIATION AVAILABLE, WHEN OTHERWISE IT WAS ELIGIBLE FOR IT, JUST FOR ITS INA BLILITY TO PRODUCE CONCLUSIVE EVIDENCE REGARDING THE QUANTUM INCREASE IN INSTALLED CAPACIT Y. IF IT IS ABLE TO PRODUCE SOME EVIDENCE TO PROVE AN INCREASED CAPACITY IN EXCESS OF 25%, IN OUR OPINION, ITS CLAIM HAS TO BE CONSIDERED. ASSESSEE IS ONLY SEEKING ONE MORE OPPO RTUNITY TO PROVE THAT THE INCREASE IN INSTALLED CAPACITY EXCEEDED 25% AND WE DO NOT FIND ANY PREJUDICE TO BE CAUSED TO THE REVENUE IF SUCH OPPORTUNITY GRANTED. THEREFORE, IN THE INTEREST OF THE JUSTICE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE M ATTER BACK TO THE ASSESSING OFFICER FOR CONSIDERATION AFRESH. ASSESSEE SHALL BE GIVEN AN O PPORTUNITY FOR PRODUCING WHATEVER EVIDENCE IN SUPPORT OF ITS CLAIM AND THE ASSESSING OFFICER SHALL PROCEED IN ACCORDANCE WITH LAW IN A PRAGMATIC MANNER TAKING INTO ACCOUNT THE P ECULIARITIES OF ASSESSEES BUSINESS. ITA NOS. 19 & 1835 /MDS/2012 :- 4 -: IN THE SECOND ROUND, THE ASSESSEE SUBMITTED A CHAR TERED ENGINEERS REPORT TO SUPPORT THE INCREASE IN INSTALLED CAPACIT Y WHICH WAS NOT ADMITTED BY THE AO STATING THAT IT WAS A POSTMORTEM REPORT CANNOT BE TAKEN AS CONCRETE AND ADDITIONAL EVIDENCE. THE AO RELIED ON THE ANNUAL REPORT WHERE THERE WAS NO CHANGE IN THE INSTALLED C APACITY AND LICENSED CAPACITY AND COMPARED THE SAME WITH THE EARLIER YE ARS STATISTICS AND DISALLOWED THE DEPRECIATION IN THE SECOND ROUND ALS O. 4.1 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WEN T ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) DELETED ADDITIO N. FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARAGRAPHS OF THE LD.CIT(A) ORDER: 5.2 I HAVE GONE THROUGH THE SUBMISSIONS MADE BY TH E APPELLANT AND THE REMAND REPORT OF THE ASSESSING OFFICER. AN ELABORATE DISCUS SION WAS MADE IN MY ORDER IN APPEAL NO.179/09-10 REGARDING THE WORKING OF MATERIAL REMOV AL RATIO. THE MATERIAL REMOVAL RATIO IS CALCULATED FOR MILLING, TURNING OPERATION IN MACHINING CENTRES TO DETERMINE THE CAPACITY OF MACHINES. MILLING OPERATIONS ARE OPERATIONS IN WHICH THE CUTT ING TOOLS ROTATES TO BRING CUTTING EDGES TO BEAR AGAINST THE WORK PIECE TO REMOVE MATE RIAL. CAST IRON IS THE MATERIAL CONSIDERED FOR CALCULATIO N OF M.R.R. THE M.R.R. IS DEPENDING ON HORSE POWER OF THE MACHINE AND SPINDLE RPM. THE HORSE POWER OF THE MACHINE IS DEFINED IN KILOWA TT. THE TECHNICAL TEAM OF THE APPELLANT COMPANY WORKED OUT THE MRR FOR HORIZONTAL MACHINE CENTRES AND ALSO MRR FOR VERTICAL MACHINE CENTRES. 5.3 THE TECHNICAL TEAM OF THE APPELLANT COMPANY WOR KED OUT THE MATERIAL REMOVAL RATIO FOR HORIZONTAL MACHINE CENTRES AND ALSO MATERIAL REMOVA L RATIO FOR VERTICAL MACHINE CENTRES IN TERMS OF OF CM 3 /MINUTE. ON WORKING OUT THE CAPACITY INCREASE IN HOR IZONTAL MACHINING CENTRE BASED ON M.R.R. AND ADDITIONAL TOOLS, THE CA PACITY INCREASE WAS 29.2% OVER THE CAPACITY AS ON 31.3.2002. SIMILARLY, THE MATERIAL R EMOVAL RATIO ON OTHER MACHINERIES LIKE TURNING CENTRE, MILLING MACHINE, ZIG BORING MACHINE , THE PERCENTAGE OF CAPACITY INCREASE WAS 73.2%. THE TOTAL CAPACITY INCREASE OVER THE CAP ACITY AS ON 31.3.2002 WAS WORKED OUT AT 53.8%. WHILE WORKING OUT THE MATERIAL REMOVAL RA TIO, THE INSTALLED DATE OF MACHINERY, THE HORSE POWER OF THE MACHINERY, NUMBER OF MACHINE S AND CAST IRON MATERIAL REMOVAL (CM 3 /MINUTE), THE TOTAL WORKING HOURS IN A DAY BASED ON THE SHIFTS WAS CONSIDERED. THE BASE LINE FOR MATERIAL REMOVAL WAS TAKEN AT 400 CM 3 /MINUTE. THE APPELLANT FILED A DETAILED ANALYSIS WHICH WAS ALSO VERIFIED ON MY PERSONAL VIS IT TO THE FACT WITH REFERENCE TO THE NEW MACHINERY INSTALLED AND ALSO THE OTHER UNITS OF MEA SUREMENT DISCUSSED ABOVE. 5.4 THE APPELLANT IN THIS CASE IS MANUFACTURING MAC HINERY WHICH UNDOUBTEDLY WERE UNIQUE TO EACH OF ITS CUSTOMER BEING CUSTOM BUILT, NON-HOM OGENOUS PRODUCT AND NON-REPETITIVE IN NATURE WHICH MAKES THE MEASUREMENT OF THE INSTALLED CAPACITY A SUBJECTIVE AFFAIR. TAKING INTO CONSIDERATION, THE OBSERVATIONS OF THE HONBLE ITAT FOR THE ASSESSMENT YEAR 2003-04, ITA NOS. 19 & 1835 /MDS/2012 :- 5 -: THE EVIDENCE PRODUCED IN THE FORM OF MATERIAL REMOV AL RATIO BASED ON HORSE POWER, HOURS OF WORKING, HORIZONTAL MACHINE CENTRE, VERTICAL MAC HINE CENTRE, TURNING, MILLING, ETC., THE INCREASE IN CAPACITY AS PERCENTAGE WITH RESPECT OF 31.3.2002 IS ABOVE 25% AND HENCE THE ASSESSING OFFICER IS DIRECTED TO ALLOW ADDITIONAL DE PRECIATION. THESE GROUNDS OF APPEAL ARE ALLOWED. 4.2 AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE DEPAR TMENT IS ON APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.DR ARGUED THAT T HE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THERE WAS IN CREASE IN CAPACITY INSTALLED TO THE EXTENT OF 25% TO BE ELIGIBLE FOR A DDITIONAL DEPRECIATION. IN THE ASSESSEES CASE, THE INSTALLED CAPACITY AND THE LICENSED CAPACITY WAS ONE AND THE SAME IN THE EARLIER AND THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ANNUAL REPORT DID NOT SHOW ANY INCREASE IN THE INCREASE OF THE CAPACITY. THE CHARTERED ENGINEERS CERTIFICATE CANNOT BE RELIED UPON SINCE THE MACHINERY WAS INSTALLED IN 20 03 AND THE CERTIFICATE WAS ISSUED IN 2009 WHICH WAS A POSTMORTEM AND THE C HARTERED ENGINEERS CERTIFICATE CANNOT GIVE A CONCRETE OPINION ON INCRE ASE OF THE CAPACITY AFTER THE GAP OF 7 YEARS. THEREFORE, THE LD.DR CONTENDED THAT THE LD.CIT(A) MADE AN ERROR BY DELETING THE ADDITION AND NO INTER FERENCE OF ITAT IS CALLED FOR. ON THE OTHER HAND, THE LD.AR ARGUED TH AT THE ASSESSEE HAS PURCHASED NEW MACHINERY AND INSTALLED IN THE FACTOR Y WHICH HAS INCREASED THE PRODUCTION MORE THAN 25%. THE ASSESSEE IS ENGA GED IN THE PRODUCTION OF MANUFACTURING OF HEAVY ENGINEERING PR ODUCTS LIKE GEAR, GEAR BOXES, MACHINERY PARTS, AUTOMOBILE COMPONENTS, TEXT ILE MACHINERY PARTS, AIR COMPRESSOR PARTS, ALUMINUM AND LOCOMOTIVE PARTS . THE COMPANY IS IN THE VARIOUS DESIGNS COMPOSITION OF VARIOUS SPECIFIC ATIONS AND IT IS INVOLVED ITA NOS. 19 & 1835 /MDS/2012 :- 6 -: IN LATHE WORK. SINCE THE COMPANY IS MANUFACTURING AND INVOLVED ANY NUMBER OF ITEMS WHICH WILL BE DIFFICULT TO COUNT TO INCREASE ANY CAPACITY IN NUMBERS BY INTRODUCTION OF NEW PLANT AND MACHINERY. THE INCREASE IN PLANT AND MACHINERY WAS MORE THAN 50% AND THERE WA S A SUBSTANTIAL INCREASE IN POWER CONSUMPTION PRODUCTION AND OTHER COMPONENTS AND THE ASSESSEE ALSO PRODUCED CHARTERED ENGINEERS CERTIFIC ATE AS ADDITIONAL EVIDENCE WHICH WAS ADMITTED BY THE HONBLE ITAT AND REMITTED THE MATTER BACK TO THE FILE OF THE AO BUT UNFORTUNATELY THE AO NEITHER CONSIDERED THE INCREASE IN VARIOUS ITEMS OF EXPENSES AND PRODUCTIO N FOR INCREASE IN CAPACITY NOR CONSIDERED THE CHARTERED ENGINEERS CER TIFICATES. THE LD.CIT(A) HAS RIGHTLY CONSIDERED THE ISSUE AND ALLO WED THE APPEAL AND NO INTERFERENCE IS CALLED FOR. 5.0 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL PLACED ON RECORD. THE ASSESSEE HAS CLAIMED THE ADDITIONAL DEPRECIATI ON U/S 32(1)(IIA). THE ASSESSING OFFICER DISALLOWED THE ADDITIONAL DEP RECIATION AND THE MATTER TRAVELLED UP TO ITAT AND THE ITAT REMITTED T HE MATTER BACK TO THE FILE OF AO TO CONSIDER ANY ADDITIONAL EVIDENCE TO S UPPORT THE INCREASE IN CAPACITY TO THE EXTENT OF 25% TO CONSIDER THE ASSES SEES CLAIM. THE ASSESSEE HAS SUBMITTED THE ADDITIONAL EVIDENCE IN T HE FORM OF CHARTERED ENGINEERS CERTIFICATE. THE AO BRUSHED ASIDE THE CE RTIFICATE ISSUED BY CHARTERED ENGINEER WITHOUT VERIFYING THE FACTS OF T HE CASE. IF THE AO IS HAVING SOME RESERVATIONS REGARDING THE CAPACITY INS TALLATION AND FOR ITA NOS. 19 & 1835 /MDS/2012 :- 7 -: ADMISSION OF THE CHARTERED ENGINEERS CERTIFICATE AS AN EVIDENCE, HE SHOULD HAVE EXAMINED THE CHARTERED ENGINEER CERTIFI CATE REGARDING THE INCREASE IN CAPACITY AS PER THE PROVISIONS OF THE I NCOME TAX ACT BEFORE BRUSHING ASIDE THE CHARTERED ENGINEERS CERTIFICATE. THE OTHER ALTERNATIVE AVAILABLE FOR THE AO IS TO MAKE A PERSONAL VISIT AL ONG WITH CHARTERED ENGINEER AND EXAMINE THE CORRECTNESS OF INCREASE IN THE INSTALLED CAPACITY OR REFER THE MATTER TO DVO. INSTEAD, THE AO SIMPLY RELIED ON THE ANNUAL ACCOUNTS IN SPITE OF THE FACT THAT THE ASSESSEE HAS EXPLAINED THAT THE ASSESSEE IT IS ENGAGED IN MANUFACTURING, THE MACHIN ERY WHICH IS UNIQUE TO EACH CUSTOMERS CUSTOM BUILT NON-HOMOGENOUS PRODUCT AND NON-REPETITIVE IN NATURE WHICH MAKES THE MEASURE OF INSTALLED CAPA CITY AS A SUBJECTIVE AFFAIR. THE LD.CIT(A) MADE THE PERSONAL VISIT TO T HE FACTORY AND HAD DISCUSSED WITH REFERENCE TO THE MEASUREMENT OF THE INSTALLED CAPACITY ON THE BASIS OF MATERIAL REMOVAL RATIO AND GIVEN A FIN DING THAT INCREASE IN CAPACITY AS PERCENTAGE W.R.T. THE EARLIER YEAR IS A BOVE 25%. FOR A QUERY FROM THE BENCH, THE LD.DR REPLIED THAT THE THERE WA S AN INCREASE IN PRODUCTION MORE THAN 25% AFTER INSTALLATION OF THE PLANT AND MACHINERY AND THERE WERE SUBSTANTIAL INCREASE IN POWER CONSUM PTION AND OTHER RELATED ITEMS OF PRODUCTIONS. CONSIDERING TOTALITY OF THE FACTS THAT THE LD.CIT(A) HAS GIVEN CLEAR ANALYSIS OF MEASUREMENT A ND MADE PERSONAL VISIT AND GIVEN A FINDING THAT THE INCREASE IN CAPA CITY AS PERCENTAGE IS MORE THAN 25%. THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE LD.CIT(A) AND UPHOLD THE SAME AND DISMISS THE REVE NUE APPEAL. ITA NOS. 19 & 1835 /MDS/2012 :- 8 -: 6.0 IN THE RESULT, THE APPEALS OF THE REVENUE FOR THE AYS 2003-04 & 2004-05 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ' . . % ) (D.S.SUNDER SINGH) /ACCOUNTANT MEMBER /CHENNAI, 6 /DATED: 12 TH MAY, 2017. TLN 1 /%7 87 /COPY TO: 1. . /APPELLANT 4. 9 /CIT 2. /0. /RESPONDENT 5. 7 / /DR 3. 9 ( ) /CIT(A) 6. + /GF