The ITO, Ward-4(2), Ahmedabad V. KADAM EXPORTS PVT. LTD., Ahmedabad

ITA 210/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80336 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 18-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 22-01-2013
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Section: 143(3); 10B; 147; 148

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , ! '# ! '# ! '# ! '#, , , , $ $ $ $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 210/AHD/2013 ' (' ' (' ' (' ' ('/ // / ASSESSMENT YEAR: 2006-07 THE INCOME TAX OFFICER, WARD-4(2), AHMEDABAD. VS M/S. KADAM EXPORTS PRIVATE LIMITED, B/H. FUN REPUBLIC CINEMA, SATELLITE ROAD, AHMEDABAD. PAN: AAACK7997F )*/ (APPELLANT) +, )*/ (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR. D.R. ASSESSEE(S) BY : SHRI TUSHAR P. HEMANI, AR !- . #// // / DATE OF HEARING : 18/09/2014 01( . #/ / DATE OF PRONOUNCEMENT: 26/09/2014 2 2 2 2/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, A HMEDABAD DATED 26.10.2012. 2. THE SOLE GROUND OF APPEAL OF THE REVENUE IS AS UNDER: THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW DEDUCTION U/ S. 108 WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HA D CLAIMED DEDUCTION ON WRONG REPRESENTATION REGARDING ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 2 - DATE OF COMMENCEMENT OF MANUFACTURING OR PRODUCTION AND AS PER ANNEXURE-A TO FORM 56 FOR THE A.Y. 2001- 02 TO 2004-05 THE DATE OF COMMENCEMENT OF MANUFACTURIN G OR PRODUCTION WAS MENTIONED AS JULY 1995 WHEREAS TH E SAME WAS MENTIONED AS 9.5.1996 FROM THE A.Y. 2005-0 6. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IN THE RETURN OF INCOME FILED CLAIM FOR DEDUCTION OF RS 1, 21,07,688/- U/S. 10B OF THE ACT. ACCORDING TO THE ASSESSING OFFICER , IN THE DIRECTORS REPORT FOR FINANCIAL YEAR 1995-96 IT HAS BEEN STATE D THAT THE ASSESSEE STARTED OPERATION FROM THE FINANCIAL YEAR 1995-96 AND THEREFORE THE ASSESSEE COULD NOT HAVE CLAIMED DEDUC TION U/S. 10B OF THE ACT DURING THE YEAR UNDER CONSIDERATION AS THE SAME WAS BEYOND THE PERIOD OF 10 YEARS. 4. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSE SSING OFFICER HAS RELIED UPON THE EXTRACT OF DIRECTORS R EPORT GIVEN IN THE NOTES TO THE RETURN OF INCOME FOR ASSESSMENT YEAR 2 006-07 AND IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS BEEN SUBMITTIN G THAT MANUFACTURING OPERATIONS HAD BEGUN IN ASSESSMENT YE AR 1997-98 AND NOT IN ASSESSMENT YEAR 1996-97. THE ASSESSEE H AS REFERRED TO THE ORIGINAL ASSESSMENT ORDER FOR THE YEAR UNDER CO NSIDERATION AND SUBMITTED THAT THE ASSESSEE VIDE LETTER DATED 20.11 .2008 FURNISHED LETTERS DATED 19.12.2003 AND 23.12.2003 WHICH WERE FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASS ESSMENT YEAR 2001-02 WHEREIN IT WAS STATED THAT THE MANUFACTURIN G OPERATIONS OF THE ASSESSEE STARTED FROM MAY 1996 AND HENCE, FIRS T YEAR OF MANUFACTURING OPERATION WAS ASSESSMENT YEAR 1997-98 . THE CONTENTION OF THE ASSESSEE IS ALSO THAT THE ASSESSE E PLACED ON RECORD THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001-02 WH EREIN ALSO LETTERS DATED 19.12.2003 AND 20.12.2003 HAVE BEEN R EPRODUCED, HENCE IT IS THE ARGUMENT OF THE ASSESSEE THAT FROM THE BEGINNING OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2001-02, THE ASSESSEE ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 3 - HAS BEEN SUBMITTING THAT THE MANUFACTURING OPERATIO NS WERE STARTED FROM MAY, 1996 I.E. ASSESSMENT YEAR 1997-98 AND NOT FROM ASSESSMENT YEAR 1996-97 AS OBSERVED BY THE ASSESSIN G OFFICER. IT WAS SUBMITTED THAT IN THE DIRECTORS REPORT IT IS M ENTIONED THAT THE TRIAL RUN WAS CARRIED OUT BEFORE 31.03.1996 AND IT WAS NEVER MENTIONED THAT MANUFACTURING OPERATIONS HAD BEGUN B EFORE 31.03.1996. THE ASSESSEE RELIED ON THE FOLLOWING D ECISIONS FOR ITS CONTENTION THAT IT IS SETTLED POSITION OF LAW THAT INITIAL YEAR FOR CLAIMING DEDUCTION U/S. 10B IS THE YEAR IN WHICH CO MMERCIAL PRODUCTION HAS STARTED AND NOT THE YEAR IN WHICH EX PERIMENTAL PRODUCTION / TRIAL RUN WAS CARRIED OUT: 1. CIT VS. NESTOR PHARMACEUTICAL LTD.-322 ITR 631 (DEL .) 2. ACIT VS. SOUTHERN STRUCTURALS LTD.110 ITR 164 (MAD .) 3. STERLITE INDUSTRIES (INDIA) LTD. VS. ACIT209 TAXMA N 79 (MAD) 5. THE COMMISSIONER OF INCOME TAX (APPEALS) THEREF ORE ALLOWED THE CLAIM FOR DEDUCTION U/S. 10B TO THE ASS ESSEE FOR THE YEAR UNDER CONSIDERATION BY OBSERVING AS UNDER: 3.3 THE APPELLANT HAS CLAIMED DEDUCTION U/S 10B OF THE ACT. I HAVE GONE THROUGH THE PROVISIONS OF SEC. 10B OF T HE ACT WHICH READS AS UNDER: 10B.(1) SUBJECT TO THE PROVISIONS OF THIS SECTION, A DEDUCTION OF SUCH PROFIT AND GAINS AS ARE DERIVED B Y A HUNDRED PER CENT EXPORT-ORIENTED UNDERTAKING FROM T HE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE F OR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS T O MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUT ER SOFTWARE, AS THE CASE MAY BE, SHALL BE ALLOWED FROM THE TOTAL INCOME OF THE APPELLANT. 3.4 FROM THE PERUSAL OF ABOVE, IT IS CLEAR THAT THE INITIAL YEAR IS THE YEAR IN WHICH UNDERTAKING BEGINS TO MANUFACT URE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE. IN THE PRESENT ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 4 - CASE BEFORE ME, UNDOUBTEDLY BEFORE 31/03/1996, ONLY TRIAL RUN WAS CARRIED OUT AND MANUFACTURING OPERATION WAS STA RTED FROM MAY, 1996 AND THEREFORE, THE FIRST YEAR OF MANUFACT URING WAS A.Y. 1997-98 AND NOT A.Y. 1996-97. I HAVE GONE THRO UGH THE DECISIONS RELIED UPON BY THE APPELLANT AND THE RATI O LAID DOWN IN THOSE DECISIONS ARE DIRECTLY AND SQUARELY APPLIC ABLE IN THE PRESENT CASE WHICH SAY THAT THE INITIAL YEAR IS THE YEAR IN WHICH COMMERCIAL PRODUCTION HAS STARTED AND NOT THE YEAR IN WHICH TRIAL RUN IS CARRIED OUT, AND IN THE PRESENT CASE B EFORE ME AS THE COMMERCIAL PRODUCTION HAS BEEN STARTED IN A.Y. 1997-98, THE YEAR BEFORE ME IS THE LAST YEAR TO CLAIM THE DE DUCTION U/S. 10B OF THE ACT AND THE APPELLANT HAS RIGHTLY CLAIME D THE SAID DEDUCTION. 3.5 WITH REGARD TO THE OBSERVATION OF TRIBUNAL I N A.Y. 2001- 02 THAT THE FIRST YEAR OF OPERATION WAS A.Y. 1996-9 7, THE A.R OF THE APPELLANT HAS ARGUED THAT IT WAS NOT AN ISSU E BEFORE THE HON'BLE TRIBUNAL TO DECIDE THAT WHICH WAS THE INITI AL YEAR TO CLAIM DEDUCTION AND FURTHER THE HON'BLE TRIBUNAL HA S NOT GIVEN ANY FINDING WITH RESPECT THERETO. IT WAS FURTHER AR GUED THAT SUCH UNINTENTIONAL OBSERVATION OF THE HON'BLE TRIBU NAL CANNOT BE TREATED AS OBITER DICTA AND IT WOULD NOT BE HAVI NG ANY BEARING ON THE ISSUE BEFORE ME. THE A.R. FURTHER RE FERRED TO THE ASSESSMENT ORDER FOR A.Y. 2001-02, WHEREIN THE LETTER DATED 19/12/2003 HAS BEEN REPRODUCED WHICH SHOWS TH AT THE APPELLANT HAS BEEN SUBMITTING THAT THE MANUFACTURIN G OPERATIONS WERE STARTED FROM A.Y. 1997-98 AND NOT A .Y. 1996- 97. THE A.R OF THE APPELLANT FURTHER RELIED UPON TH E APEX COURT DECISION IN THE CASE OF SUN ENGINEERING WORKS (SUPRA) TO CONTEND THAT IT IS NEITHER DESIRABLE NOR PERMISSIBL E TO PICK OUT A WORD OR A SENTENCE FROM THE JUDGMENT, DIVORCED FR OM THE CONTEXT OF QUESTION UNDER CONSIDERATION AND TREAT I T TO BE THE COMPLETE LAW DECLARED BY THE COURT/TRIBUNAL. I HAVE GONE THROUGH THE ORDER OF HON'BLE TRIBUNAL AND THE ASSES SMENT ORDER FOR A.Y. 2001-02, AND I AGREE WITH THE ARGUME NTS OF THE A.R. OF THE APPELLANT THAT IT WAS NOT AT ALL ISSUE BEFORE HON'BLE THE TRIBUNAL AS TO WHICH IS THE INITIAL YEAR TO CLA IM DEDUCTION U/S 10B OF THE ACT IN THE EASE OF THE APPELLANT AND NO FINDING HAS BEEN GIVEN WITH RESPECT THERETO. THE FINDING PO RTION OF THE SAID ORDER IS AT PARA 10, WHEREIN NOWHERE SUCH KIND OF FINDING HAS BEEN GIVEN BY HON'BLE THE TRIBUNAL THAT INITIAL YEAR TO CLAIM DEDUCTION U/S 10B OF THE ACT WAS A.Y.1996-97 AND NOT 1997-98. THE APEX COURT IN THE CASE OF SUN ENGINEER ING WORKS (SUPRA) HAS ALREADY LAID DOWN A LAW THAT IT I S NOT PERMISSIBLE TO PICK OUT A WORD OR A SENTENCE FROM T HE JUDGMENT OF THE COURT, DIVORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COURT. THEREFORE, THE ACTION OF ASSESSING OFFICER IN PICKING UP CERTAIN WORDS OR SENTENCE FRO M THE ORDER OF HON'BLE THE TRIBUNAL FOR A.Y.2001-02 TO HOLD THA T THE HON'BLE TRIBUNAL HAS HELD THAT INITIAL YEAR WAS A.Y .1996-97 ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 5 - AND NOT 1997-98 IS INVALID AND NOT PERMISSIBLE IN V IEW OF THE APEX COURT DECISION IN THE CASE OF SUN ENGINEERING WORKS (SUPRA), MORE PARTICULARLY WHEN SUCH QUESTION WAS N OT IN CONSIDERATION BEFORE HON'BLE THE TRIBUNAL TO DECIDE . THEREFORE, I AM OF THE VIEW THAT ON THIS COUNT ALSO, DEDUCTION CLAIMED BY THE APPELLANT CANNOT BE WITHDRAWN BY THE ASSESSING OFFICER BY HOLDING THAT INITIAL YEAR TO CLAIM DEDUCTION WAS A. Y. 1996-97 AND NOT 1997-98. 3.6 IN VIEW OF ABOVE GIVEN FINDINGS, I HOLD THAT TH E APPELLANT HAS LEGITIMATELY CLAIMED DEDUCTION U/S. 1 0B OF THE ACT, AND THEREFORE ADDITION MADE BY THE ASSESSING O FFICER IS DELETED. ACCORDINGLY, THESE GROUNDS OF APPEALS ARE ALLOWED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSE E IS ENGAGED IN BUSINESS OF MANUFACTURING OF PSYLLIUM HUSK IN ITS E XPORT ORIENTED UNDERTAKING. THE ASSESSEE CLAIMED DEDUCTION U/S. 1 0B IN RESPECT OF INCOME DERIVED FROM EXPORT OF GOODS MANUFACTURED IN THE EXPORT ORIENTED UNDERTAKING. IN THE ORIGINAL ASSESSMENT C OMPLETED U/S. 143(3) ON 27.11.2008, DEDUCTION U/S. 10B CLAIMED BY THE ASSESSEE WAS ALLOWED. LATER ON, NOTICE U/S. 148 WAS ISSUED ON 14.10.2010 AND IN THE REASSESSMENT MADE U/S. 143(3) READ WITH SECTION 147 OF THE ACT ON 28.09.2011, THE CLAIM OF DEDUCTION WAS D ISALLOWED ON THE GROUND THAT THE PRESENT ASSESSMENT YEAR IS THE 11 TH ASSESSMENT YEAR FROM THE INITIAL ASSESSMENT YEAR. AS PER THE ASSES SING OFFICER, THE INITIAL ASSESSMENT YEAR IN THE INSTANT CASE WAS THE ASSESSMENT YEAR 1996-97. THE ABOVE FINDING OF THE ASSESSING OFFICE R WAS BASED ON THE BASIS OF THE DIRECTORS REPORT FOR THE YEAR END ING ON 31.03.1996 AND THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2 001-02 DATED 17.10.2008 PASSED IN ITA NO. 1044/AHD/2005. 7. ON APPEAL, THE COMMISSIONER OF INCOME TAX(APPEA LS) FOUND THAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1996-97, THE ASSESSEE UNDERTOOK ONLY TRIAL PRODUCTI ON AND ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 6 - COMMERCIAL PRODUCTION WAS COMMENCED IN THE ASSESSME NT YEAR 1997-98 ONLY. THEREFORE, THE PRESENT ASSESSMENT YE AR BEING THE 10 TH ASSESSMENT YEAR FROM THE INITIAL ASSESSMENT YEAR, THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S. 10B OF THE ACT. 8. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE ORDER OF THE ASSESSING OFFICER. 9. WE FIND THAT IN THE DIRECTORS REPORT FOR THE A SSESSMENT YEAR 1996-97, IT WAS STATED AS UNDER: THE YEAR 1995-96 WAS THE FIRST YEAR OPERATION OF TH IS COMPANY AFTER THE ESTABLISHMENT TOOK PLACE IN 199 5. IN THE INITIAL PERIOD OF 95-96, THE BUSINESS FUN CTION OF THIS COMPANY WAS A MERCHANT EXPORTERS MAINL Y DEALING FOR PSYLLIUM SEED HUSK, GUAR GUM ETC. THE FIRST SIX MONTHS OF THIS COMPANY AS A CAPACITY OF MERCHANT EXPORTERS DID WELL IN BOTH THE SALES AREA OF PSYLLIUM AND GUAR GUM. IN SEPT. 1995, THE COMPANY TOOK THE DECISION TO UNDERGO THE STATUS AS MANUFACT URER EXPORTERS AND BY VIRTUE OF THIS STATUS, OUR COMPANY WAS ABLE TO BE AN APPROVED SUPPLIER OF M/S. RECKITT & C OLMAN PRODUCTS, U.K. TO TAKE THIS OPPORTUNITY, OUR COMPAN Y WAS ABLE TO TAKE OVER THE FIXED ASSETS, PAINTS AND MACH INERY OF M/S. BHAGIRATH SEEDS PROCESSING CO. PVT. LTD., G IDC, MEHSANA, A SICK UNIT. AND BY MARCH 1996, OUR COMPAN Y WAS SUCCESSFUL TO CLEAR THE PAPERS AND THE TITLE WA S TRANSFERRED IN OUR NAME OF THE COMPANY BEFORE 31.03.1996 AND THE SUCCESSFUL TRIAL WAS TAKEN BEFOR E 31.03.1996. ALL NEW CHANGES WERE MADE IN TIME AS P ER INTERNATIONAL STANDARD FOR EXPORT ORIENTED UNIT.. 10. THUS, FROM THE ABOVE FINDING, IT IS SEEN THAT THE TRIAL PRODUCTION IN THE INSTANT CASE TOOK PLACE IN THE AS SESSMENT YEAR 1996-97. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NESTOR PHARMACEUTICALS (SUPRA) HELD AS UNDER: ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 7 - HELD,_ THAT THE INITIAL ASSESSMENT YEAR, FOR THE P URPOSE OF SECTION 80-IA, WAS THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE 'INDUSTRIAL UNDERTAK ING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS '. THE TRIAL PRODUCTION BEGAN ON MARCH 20, 1998, AS PER TH E DETAILS GIVEN IN THE AUDIT REPORT FURNISHED BY THE ASSESSEE ALONG WITH ITS RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05. THERE WAS NO DISPUTE THAT THE FIRST SALE WAS MADE ON APRIL 23, 1 998, WHICH WOULD BE THE PERIOD RELEVANT TO THE ASSESSMEN T YEAR 1999-2000. MERELY BECAUSE SOME CLOSING STOCK W AS SHOWN AS ON MARCH 31, 1998, THAT WOULD NOT LEAD TO THE CONCLUSION THAT THERE WAS COMMERCIAL PRODUCTION AS WELL. EVEN FOR THE PURPOSE OF TRIAL PRODUCTION MATERIAL W OULD BE NEEDED AND THERE WOULD BE PRODUCTION WHICH WOULD RE SULT IN STOCK OF FINISHED GOODS. THE EVIDENCE PRODUCED B Y THE ASSESSEE WAS ACCEPTED BY THE TRIBUNAL AS WELL, FROM WHICH IT WAS CLEAR THAT THERE WAS ONLY A TRIAL PROD UCTION IN THE ASSESSMENT YEAR 1998-99 AND COMMERCIAL AND F ULL- FLEDGED PRODUCTION COMMENCED ONLY IN THE YEAR 1999- 2000. THE ORDER OF THE TRIBUNAL ALLOWING THE BENEFI T OF DEDUCTION UNDER SECTION 80-IA/80-IB OF THE ACT FROM THE ASSESSMENT YEAR 1999-2000 TREATING IT AS THE INITIA L YEAR OF PRODUCTION TO THE ASSESSMENT YEAR 2003-04 WAS CORRECT IN LAW. TO THE SAME EFFECT IS THE DECISION OF THE HONBLE M ADRAS HIGH COURT IN THE CASE OF ACIT VS. SOUTHERN STRUCTURALS LTD.(S UPRA) AND IN THE CASE OF STERLITE INDUSTRIES (INDIA) LTD. VS. ACIT ( MAD) (SUPRA). 11. FURTHER, IN ITA NO. 1044/AHD/2005 FOR THE ASSE SSMENT YEAR 2001-02 ORDER DATED 17.10.2008, THE ISSUE BEFO RE THE TRIBUNAL WAS AS UNDER: THE ASSESSEE CLAIMED DEDUCTION U/S. 10B OF THE ACT, WHICH WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE INDUSTRIAL UNDERTAKING FORMED BY RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE. T HE INDUSTRIAL UNDERTAKING FORMED BY TRANSFER OF PLANT AND MACHINERY PREVIOUSLY USED AND THUS THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 10B(II) AND 10B(III) OF THE ACT. ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 8 - 12. A PERUSAL OF THE ABOVE ORDER OF THE TRIBUNAL S HOWS THAT THE ISSUE WHICH WAS THE INITIAL YEAR FOR ALLOWING D EDUCTION U/S. 10B OF THE ACT IN THE CASE OF THE ASSESSEE WAS NOT DIRECTL Y AN ISSUE BEFORE THE TRIBUNAL. THUS, NO ARGUMENT WAS MADE BY BOTH T HE SIDES AND NO MATERIAL WAS PRODUCED BY BOTH THE SIDES BEFORE THE TRIBUNAL SO THAT THE TRIBUNAL COULD HAVE GIVEN A CONSIDERED FINDING AS TO THE INITIAL YEAR FOR ALLOWING DEDUCTION U/S. 10B OF THE ACT TO THE ASSESSEE IN THE INSTANT CASE. THEREFORE, MERELY FROM THE ABOVE ORD ER OF THE TRIBUNAL, IT CANNOT BE HELD THAT THE TRIBUNAL HAD R ECORDED A FINDING TO THE EFFECT THAT INITIAL ASSESSMENT YEAR IN THE INST ANT CASE WITHIN THE MEANING U/S. 10B WAS ASSESSMENT YEAR 1996-97 AND NO T THE ASSESSMENT YEAR 1997-98. 13. WE FIND THAT THE PRESENT PROCEEDING IS A PROCE EDING INITIATED U/S. 147 OF THE ACT BY THE REVENUE. THER EFORE, THE ONUS WAS ON THE REVENUE TO BRING SOME POSITIVE MATERIAL BEFORE US TO SHOW THAT THE ACTUAL COMMERCIAL PRODUCTION COMMENCE D BEFORE 31.03.1996. WE FIND THAT THE REVENUE COULD NOT BRI NG ANY POSITIVE MATERIAL ON RECORD AFTER EXAMINING THE ACCOUNTS OF THE ASSESSMENT YEAR 1996-97 TO SHOW THAT ACTUAL COMMERCIAL PRODUCT ION COMMENCED BEFORE 31.03.1996. ON THE OTHER HAND, THE FINDING OF THE COMMISSIONER OF INCOME TAX(APPEALS) THAT COMMERCIAL PRODUCTION IN THE INSTANT CASE COMMENCED DURING THE ASSESSMENT YE AR 1997-98 IS SUPPORTED BY THE SSI REGISTRATION CERTIFICATE ISSUE D BY DISTRICT INDUSTRIES CENTRE, MEHSANA DATED 09.05.1996 BEARING PERMANENT REGISTRATION NO. 5418-09076 WHEREIN THE DATE OF COM MENCEMENT OF PRODUCTION HAS BEEN MENTIONED IS 01.04.1996. 14. ON THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NO T FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF ITA NO. 210/AHD/2013 KADAM EXPORTS PVT. LTD., AHMEDABAD. FOR A.Y. 2006-07 - 9 - INCOME TAX (APPEALS). IT IS CONFIRMED. THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 26 TH OF SEPTEMBER, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 26/09/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY 2 . +#3 43(# 2 . +#3 43(# 2 . +#3 43(# 2 . +#3 43(#/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. # !5 / CONCERNED CIT 4. !5() / THE CIT(A)-III, AHMEDABAD 5. 3'8 +# , , / DR, ITAT, AHMEDABAD 6. 89' :- / GUARD FILE. 2! 2! 2! 2! / BY ORDER, ; ;; ;/ // / < < < < ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD