DCIT, Coimbatore V. M/s. L.G. Balakrishnan & Bros. Ltd., Coimbatore

ITA 2134/CHNY/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8090 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Keywords: Depreciation; Transfer pricing; Additional evidence; Assessment record
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./I.T.A.NOS.2134/MDS/2013 & 1395/MDS/2015 /ASSESSMENT YEAR : 2010-11 & 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE -IV(2), INCOME TAX BUILDING, RACE COURSE ROAD, COIMBATORE-18 VS. M/S. L G BALAKRISHNAN & BROS LTD., 6-16-13, KRISHNARAYANAPURAM ROAD, GANAPATHY, COIMBATORE - 641 006. [PAN: AAACL 3740P] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI DURGESH SUMROTT, CIT / RESPONDENT BY : SHRI PHILIP GEORGE, ADVOCATE /DATE OF HEARING : 07.09.2016 /DATE OF PRONOUNCEMENT : 16.11.2016 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED APPEALS AGAINST THE ORDERS OF CIT(A) PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT FOR THE ASSESS MENT YEAR 2009-10 AND 2010- 11. SINCE, THE ISSUES ARE COMMON IN BOTH THE APPEA LS AND ARE DISPOSED OF BY A COMMON ORDER AND FOR THE PURPOSE OF CONVENIENCE WE TAKE UP THE FACTS NARRATED IN APPEAL ITA NO. 2134/2013 FOR THE ASSESSMENT YEAR 20 10-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: :-2-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 2.1 THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ONS MADE BY THE AO ON ACCOUNT OF 80 IC DEDUCTION CLAIMED FOR RS. 13,47,2 3,642/-. 2.1.1. THE RELIEF WAS GIVEN BY THE CIT(A) ON THE FO LLOWING EXPENDITURE INCURRED BY THE 80-IC UNITS. EXCHANGE DIFFERENCE : RS. 74,79,886 INTEREST EXPENDITURE : RS. 86,32,290 EMPLOYEE COST : RS. 4,08,01,026 PROCESSING CHARGES : RS. 8,38,10,440 RS. 13,47,23,642 2.2 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT IN THE CASE OF THE ASSESSEE COMPANY THE AO HAD SHIFTED THE EXCHANGE DIFFERENCE S OF RS. 74,76,886/- FROM THE NON 80-IC UNITS TO THE 80-IC UNITS IN PRO PORTION OF THE 80-IC UNITS TURNOVER TO THE TOTAL TURNOVER AND FOR THE A DDITIONAL EVIDENCES PRODUCED BEFORE THE CIT(A) REGARDING THE SALE IN T HE DOMESTIC MARKET BY THE 80-IC BRANCHES. OPPORTUNITY TO THE AO SHOULD HAVE BEEN GIVEN BY CALLING FOR A REMAND REPORT. 2.3 THE LD. CIT(A) FAILED TO APPRECIATE THAT INTERE ST ON WORKING CAPITAL LOAN AND TERM LOAN IS REQUIRED TO BE ALLOCATED AMONG TH E VARIOUS 80-IC UNITS AND NON 80-IC UNITS BASED ON THE PRODUCTION IN EAC H UNIT AND NOT ON THE BASIS OF THE INVENTORY AND THE WDV OF THE FIXED AS SET AND THE SHIFTING OF INTEREST EXPENDITURE BY THE AO WAS BASED ON THE CO MPARISON OF THE NET PROFIT PERCENTAGE OF THE NON 80-IC UNIT WITH 80-IC UNIT. 2.4 THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS. 4,08,01,026/- MADE BY THE AO ON ACCOUNT OF EMPLOYEE COST. THE ASSESS EE SUBMITTED BEFORE :-3-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 THE CIT(A) THAT ONLY 455 EMPLOYEES INCLUDING 330 C ONTRACT LABOURERS WERE WORKING IN THE 80-IC UNIT. WHEREAS IT HAS SUBMITT ED BEFORE THE AO THAT THE 80-IC UNIT EMPLOYED ABOUT 1200 EMPLOYEES. THE LD.CIT(A) SHOULD HAVE ALLOWED OPPORTUNITY TO THE AO. 2.5 THE AO HAD SHIFTED PROCESSING CHARGES OF RS. 8, 38,10,440/- TO 80-IC UNIT FROM NON 80-IC UNIT. THE LD. CIT(A) ALLOWED THE A SSESSEE'S CONTENTION THAT IT ARRIVED AT THE COST WITH THE PERMISSION OF CENTRAL EXCISE AUTHORITIES EVEN FOR BRANCH TRANSFER. THE LD. CIT(A) DID NOT CONSIDER THE FACT THAT EVEN THOUGH PROFIT MARGIN CLAIMED BY ALL NON 80-IC UNITS ARE 10%, THERE IS SIGNIFICANT VARIATION IN OVER HEADS CLAIMED. T HE LD. CIT(A) HAS NOT GIVEN OPPORTUNITY TO THE AO FOR EXAMINING THE ADDI TIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS IN THE BUSINESS OF MANUFACTURING OF AUTOMOBILE SPARE PARTS AND HAS PRO DUCTION UNIT AT PANT NAGAR, UTTARANCHAL FOR MANUFACTURING OF CHAINS AND SPROCKE TS. THE ASSESSEE COMPANY HAS FILED RETURN OF INCOME ON 08.10.2010 WITH TOTAL INC OME OF RS. 2,12,46,980/- AND THE RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE A CT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO THE NOTICE, LD. AR OF THE ASSESSEE APPEARED FROM TI ME TO TIME AND FILED DOCUMENTS IN SUPPORT OF RETURN ON INCOME. THE LD. AO UPON VE RIFICATION OF ASSESSMENT RECORDS FOUND THAT THE UTTARANCHAL UNIT SUPPLIES CHAINS AND SPROCKETS TO OTHER UNITS OF THE ASSESSEE AND ALSO TO ORIGINAL EQUIPMENT MANUFACTURE R IN THE AUTOMOBILE SECTOR M/S. :-4-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 L G BALAKRISHNAN & BROS LTD. AND CLAIMED DEDUCTION U/S. 80-IC OF THE ACT ON THE INCOME OF THIS UNIT RS. 18,16,37,589/-. THE LD. AO FOUND THAT THE DETAILS OF SALES AND EXPENDITURE CLAIMED DEDUCTION U/S. 80-IC OF THE ACT FOR PANT NAGAR UNIT AND NON 80-IC UNITS REFERRED IN ASSESSMENT ORDER REQUIRES M ORE CLARIFICATIONS ON COMPARISON OF PROFITABILITY. THE NET PROFIT PERCENTAGE OF NON 80-IC UNIT IS 3.47% WHICH IS COMPARATIVELY LESSER THAN 80-IC UNIT @ 20.52%. THE LD. ASSESSING OFFICER IDENTIFIED HIGHER SALES TURNOVER IN NON 80-IC COMPANY IN COMPA RISON TO THE 80-IC COMPANY UNIT AND THE EXPENSES OF CONSUMPTION OF MATERIAL, E MPLOYEE COST, OTHER EXPENSES, INTEREST, DEPRECIATION AND AMORTIZATION ALSO VARIED ON SALES. THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS DISCUSSED ON THE VARIOUS ASPECTS ON EACH EXPENSES OF 80-IC UNIT AND THE NON 80-IC UNIT AT PAGE 2 TO 7 OF THE ORDER AND SHIFTED THE EXPENDITURE TO THE NON 80-IC UNIT AS MENTIONED BELO W AND RESTRICTED DEDUCTION U/S. 80-IC OF THE ACT: (A) DISCOUNT RS. 1,00,93,389/- (B) FOREIGN EXCHANGE DIFFERENCE RS. 74,79,886/- (C) INTEREST ON WORKING CAPITAL RS. 26,32,290/ - (D) SALARY RS. 4,08,01,026/- (E) PROCESSING CHARGES RS. 8,38,10,440/- TOTAL RS. 14,48,20,031/- THE LD. AO ALLOWED DEDUCTION U/S. 80-IC UNIT RS. 4, 12,17,558/- AGAINST ORIGINAL CLAIM OF RS. 18,60,37,589/- BY THE ASSESSEE AND ALSO MADE DISALLOWANCE U/S. 14A RS. 79,16,134/- AND PASSED THE ASSESSMENT ORDER U/S. 14 3(3) OF THE ACT DATED 01.02.2013 ASSESSING THE TOTAL INCOME OF RS. 17,39, 89,150/-. :-5-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 4. AGGRIEVED BY THE ORDER U/S. 143(3) OF THE ACT TH E ASSESSEE FILED AN APPEAL WITH CIT(A). THE LD. AR OF THE ASSESSEE ARGUED THA T THE ASSESSING OFFICER HAS ERRED IN SHIFTING OF EXPENDITURE FROM NON 80-IC UNIT TO 8 0-IC UNIT AND LD. CIT(A) HAS DEALT ON DISPUTED ISSUE INDEPENDENTLY BEING DISCOUNT OF R S. 1,00,96,389/- AND FOREIGN EXCHANGE LOSS FLUCTUATION RS. 74,79,886/- ARE TRANS FERRED BY THE AO, WHEREAS FLUCTUATION LOSS WAS DEBITED TO THE ACCOUNT OF GOOD EXPORTED AND THE INTEREST ON WORKING CAPITAL OF RS. 26,32,290/- WORKED OUT DUE T O THE ALLOCATION OF TERM LOAN INTEREST BASED ON FIXED ASSETS AND WORKING CAPITAL UTILISATION. SIMILARLY, THE SALARIES OF THE EMPLOYEE COST RS. 4,08,01,026/- AND PROCESSI NG CHARGES RS. 8,38,10,440/- WERE TRANSFERRED TO 80-IC UNIT WITHOUT ANY BASIS AN D UNWARRANTED PERCEPTIONS. THE LD. CIT(A) CONSIDERED THE FINDINGS OF THE ASSESSING OFFICER AND SUBMISSIONS OF THE ASSESSEE ON THE EACH DISPUTED TRANSACTION. THE LD. AR HAS SUBMITTED A CHART WITH THE EXCHANGE DIFFERENCE DUE TO IMPORT OF RAW MATERI AL. THE LD. CIT(A) ON VERIFYING THE RECORDS FOUND THAT THE FOREIGN EXCHANGE FLUCTUA TIONS LOSS DEBITED TO THE ACCOUNT OF 80-IC UNIT, AND HELD AT PARA 9 OF PAGE 7 OF HIS ORDER AND DELETED THE ADDITION: 'I HAD GONE THROUGH THE SUBMISSION MADE BY THE APPE LLANT AND THE ORDER OF THE ASSESSING OFFICER. AS SEEN FROM RECO RD, THE FOREX FLUCTUATION LOSS WAS DEBITED TO THE ACCOUNT OF THE UNIT WHICH EXPORTED GOODS. THE APPELLANT FURNISHED THE DETAILS TO SHO W THAT THE GOODS TRANSFERRED FROM 80-IC UNIT TO BRANCHES WERE NOT E XPORTED BUT SOLD DOMESTICALLY BY SUCH BRANCHES. THE EXCHANGE DIFFE RENCES ARISING OUT OF IMPORT OF RAW MATERIALS IN 80-IC UNIT WAS ACCOUNTE D IN THIS UNIT ITSELF. THE ASSESSING OFFICER IN HIS ORDER HAS HELD THAT THE E NTIRE FOREX FLUCTUATION LOSS IS CLAIMED BY NON 80-IC UNIT FOR THE EXPORT OF THE PRODUCT MANUFACTURED NOT ONLY BY THEM BUT ALSO FOR GOODS TRANSFERRED TO THE M BY THE 80-IV UNIT. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE GOOD S MANUFACTURED BY 80-IC UNIT WERE BASICALLY EXPORTED BY THE BRANCHES. THE AUTHORISED REPRESENTATIVES SUBMITTED THAT ALL THE DETAILS WER E FILED BEFORE THE ASSESSING OFFICER STATING THAT THE GOODS MANUFACTURED FROM 8 0-IC UNIT WERE NEVER EXPORTED BUT ONLY SOLD IN THE DOMESTIC MARKET. TH E APPELLANT FILED THE :-6-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 DETAILS ON THIS ISSUE. THE FOREX LOSS/GAIN RELATI NG TO VARIOUS DIVISIONS HAVE ALSO BEEN EXAMINED AND FROM THE DETAILS, IT IS CL EAR THAT THE UTTARANCHAL DIVISION HAS ACCOUNTED FOR THE FOREX LOSS ON ACCO UNT OF RAW MATERIAL PURCHASE SINCE THERE WAS NO EXPORT OF MANUFACTURE D ITEMS FROM THIS UNIT, THE POSITION OF APPORTIONMENT OF FOREIGN EXCHANGE EXPENDITURE DOES NOT ARISE. THE ASSESSING OFFICER IS DIRECTED TO DELET E THE ADDITION OF EXPENSES SHIFTED FROM THE NON 80-IC UNITS TO THE 80-IC UNIT .' 5. THE LD. CIT(A) ON THE DISALLOWANCE OF INTEREST O N TERM LOAN ALLOCATED ON THE BASIS OF WRITTEN DOWN VALUE OF FIXED ASSETS AND THE WORKING CAPITAL FOR PRODUCTION BASED ON INVENTORY VALUE OF EACH UNIT. INTEREST WA S ALLOCATED BASED ON THE ACTUAL TRANSACTIONS AT THE END OF THE PREVIOUS YEAR. THE LD. AR SUBMITTED CHART OF WORKING CAPITAL AND INTEREST ALLOCATION REFERRED AT PAGE 8 AND 9 OF THE ORDER AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECTS O N INTEREST ALLOCATION WITH THESE OBSERVATIONS DIRECTED THE AO TO DELETE THE EXPENSES . 6. THE LD. CIT(A) FOUND THAT THE ASSESSING OFFICER HAS SHIFTED EMPLOYEE COST OF RS. 4,08,01,026/- OF NON 80-IC UNIT TO 80-IC. T HE LD. AR SUBMITTED THAT THE DETAILS OF EMPLOYEE COST AND ACTUAL EXPENDITURE WAS IGNORED BY THE ASSESSING OFFICER AND THE CLAIM OF THE EMPLOYEE COST IS COMPA RATIVELY LESSER THAN THE VALUE OF TURNOVER, AND THERE ARE VARIOUS FACTORS FOR MINIMUM EXPENSES ON EMPLOYEE COST OF 80-IC UNIT BEING IN A BACKWARD AREA, AND ALSO THE E MPLOYEE COST IN 80-IC UNIT HAS WORKED OUT TO 3.91% AS AGAINST THE AVERAGE OF 10.16 % AND THE LD. CIT(A) RELIED ON THE CHART AND REFERRED AT PAGE 11 OF THE ORDER OBSE RVED AT PARA 11 AND GRANTED RELIEF AS UNDER. ' I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APP ELLANT AND THE ORDER OF THE ASSESSING OFFICER. THE AR SUBMITTED THAT A LL THE DETAILS IN RESPECT OF EMPLOYEE COST HAVE BEEN FILED BEFORE THE ASSESSING OFFICER. THE ASSESSEE :-7-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 WAS ASKED TO SUBMIT THE EMPLOYEE STRENGTH DETAILS FOR THE FINANCIAL YEAR 2009-10 WITH RESPECT TO ALL THE DIVISIONS. AS SEE N FROM THESE DETAILS THE AVERAGE EMPLOYEE STRENGTH PER MONTH WITH RESPECT T O CONTACT LABOUR WAS HIGHEST AT PANT NAGAR PLANT. REGARDING, APPRENTIC E AND TRAINEES, THE PANT NAGAR PLANT HAD ABOUT 150 TRAINEES AND THE CONFIRM ED EMPLOYEES WERE ONLY 10 IN NUMBER. THE CHIEF FINANCIAL OFFICER (CFO) O F THE COMPANY SUBMITTED THAT THE PERMANENT EMPLOYEES NUMBER IN THE PANT NA GAR PLANT WAS VERY LESS WHEN COMPARED TO OTHER MANUFACTURING UNITS SI NCE THE CONTRACT LABOUR STRENGTH WAS MORE AT PANT NAGAR PLANT, THE COST OF SALARY AND WAGES WAS LESS AT THE PANT NAGAR UNIT. REGARDING THE TRAINE ES ALSO THERE WERE 158 TRAINEES AT MYSORE PLANT, 235 AT PONGALUR PLANT AN D 129 AT VAIYAMPALAYAM PLANT. THE NUMBER OF CONFIRMED EMPLOYEES AT OTHER MANUFACTURING UNIT WAS FAR MORE WHEN COMPARED TO 10 CONFIRMED EMPLOYE ES AT PANT NAGAR PLANT. AFTER EXAMINING THE EMPLOYEE STRENGTH IN T HE VARIOUS UNITS IT BECOMES CLEAR THAT THE EMPLOYEE COST WOULD BE LESS AT PANT NAGAR UNIT BECAUSE OF THE LOWER STRENGTH OF CONFIRMED EMPLOYE ES. AS SEEN FROM THE INFORMATION FURNISHED, THE APPELLANT HAS BOOKED TH E EMPLOYEE COST AS PER ACTUAL INCURRED BY THE PLANT. HENCE, THE ASSESSIN G OFFICER IS NOT JUSTIFIED IN SHIFTING THE EXPENDITURE ON ACCOUNT OF SALARIES FR OM NON 80-IC UNITS TO 80- IC UNITS. ' 7. THE LD. CIT(A) FOUND THAT THE ASSESSING OFFICER HAS SHIFTED PROCESSING CHARGES RS. 8,38,10,440/- TO 80-IC UNIT. THE PROCE SSING CHARGES ARE BASED ON THE TRANSFER PRICING AS PER THE COST ACCOUNTING STANDAR D-4 (CAS-4) CERTIFIED BY THE COST AUDITOR. THE LD. AR SUBMITTED CHART REFERRED AT PA GE 13 OF THE ORDER AND SUBMITTED THAT THE TRANSFER PRICE IS THE ASSESSABLE VALUE FOR CALCULATION OF EXCISE DUTY LIABILITY ON THE PLANT TRANSFER VALUE AND ALSO SUBMITTED EXCI SE INVOICE COPIES AND COST AUDIT CERTIFICATE. THE LD. CIT WITH THESE SUBMISSIONS OB SERVED AT PAGE 14, PARA 13 : ' I HAVE EXAMINED THE SAMPLES OF BRANCH TRANSFER EX CISE INVOICE COPIES ALONG WITH COST AUDITOR'S CERTIFICATE OF CAS-4. T HE DETAILS CONSISTS OF RAW MATERIAL COST, PROCESSING COST, WITH ADDED COSTING OF OVER-HEADS AND PROFIT MARGIN OF 10%. SINCE THE APPELLANT HAS TO ARRIVE AT THE COST WITH THE PERMISSION OF THE CENTRAL EXCISE AUTHORITY EVEN FO R BRANCH TRANSFER, THE PROCESSING COST ALONG WITH OVER-HEADS AND MARGIN O F 10% THEREBY WERE INCLUDED IN THE TAX INVOICE OF BRANCH TRANSFERS. THE ASSESSING OFFICER HAS NOT EXAMINED THE DETAILS OF PROCESSING CHARGES AND THE COST BREAK-UP FOR :-8-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 CHAIN COMPONENTS WHILE DECIDING THAT THE PROCESSIN G CHARGES CLAIMED BY THE NON-80IC UNITS TO BE DISALLOWED AND ADDED AS E XPENDITURE IN THE 80-IC UNIT. WHILE TRANSFERRING THE MATERIALS FROM NON-8 0IC UNITS TO 80-IC UNITS TO 80-IC UNITS PRICING INCLUDES THE PROCESSING CHARGE S, AND OTHER OVER-HEADS COST AND PROFIT MARGIN OF THE NON-80IC UNITS. HEN CE THE ASSESSING OFFICER IS NOT CORRECT IN ADDING THE PROCESSING CHARGE AS EXP ENSES TO THE 80-IC UNIT. IN RESULT THIS GROUND OF APPEAL IS ALLOWED.' AND ALLOWED THE GROUNDS OF THE ASSESSEE AND PARTLY ALLOWED THE APPEAL. 8. AGGRIEVED BY THE ORDER, THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL BEFORE US THE LD. DR ARGUED THE GROUNDS ON DISALLOW ANCE OF SHIFTING OF EXPENDITURE FROM NON-80IC UNIT TO 80-IC UNIT AND INFORMATION WA S SUBMITTED IN RESPECT OF FOREIGN EXCHANGE DIFFERENCE, INTEREST EXPENDITURE A ND EMPLOYEE COST PROCESSING CHARGES BY THE ASSESSEE. THE ASSESSEE HAS PRODUCED ADDITIONAL EVIDENCE IN APPELLATE PROCEEDING AND THE CIT(A) HAS RELIED ON S UCH THE INTEREST EXPENDITURE WHICH IS BASED ON THE PRODUCTION FLUCTUATION AND TH E EMPLOYEE COST AND ALSO THERE IS A DIFFERENCE IN EMPLOYEE COST FILED BEFORE THE ASSE SSING OFFICER AND CIT(A). FURTHER, THE ASSESSEE HAS SUBMITTED THE INFORMATION ON BRANC H TRANSFER BASED ON CENTRAL EXCISE AUTHORITIES AND LD. CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCE ON EXPENDITURE WITHOUT PROVIDING AN OPPORTUNITY TO ASS ESSING OFFICER FOR EXAMINING THE ADDITIONAL EVIDENCE AND PRAYED FOR SET ASIDE OF ORD ER OF CIT(A). CONTRA, LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AND FILED MATERIAL INFORMATION. 9. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD, THE LD. DR IS AGGRIEVED THAT THE CIT(A) HAS NOT GIVEN PROPER O PPORTUNITY TO VERIFY EVIDENCE AND OVERLOOKED THE OBSERVATIONS OF THE ASSESSING OFFICE R AND DELETED ADDITIONS IN RESPECT :-9-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 OF 80-IC DEDUCTION. WE FOUND ON FOREIGN EXCHANGE D IFFERENCE, THE ASSESSEE HAS SUBMITTED A DETAILED NOTES WHICH WAS NOT REFERRED I N THE ASSESSMENT ORDER. SIMILARLY, THE LD. AR PRODUCED WORKING CAPITAL AND INTEREST ALLOCATION CHART REFERRED IN CIT(A) ORDER WHICH WAS NOT AVAILABLE WITH THE AS SESSING OFFICER AT THE TIME OF ASSESSMENT AND IN RESPECT OF EMPLOYEE COST, THE STA TEMENT WAS FILED ON AVERAGE EMPLOYEE STRENGTH PER MONTH REFERRED BY CIT(A). TH E ASSESSING OFFICER HAS SHIFTED THE PROCESSING CHARGES IN RESPECT OF COST BREAKUP C HAIN COMPONENTS OF VAIYAMPALAYAM PLANT, ANNUR PLANT AND MYSORE PLANT. THE ASSESSEE HAS FURNISHED THE SAMPLES OF BRANCH TRANSFER EXCISE INVOICE COPIE S AND WAS ACCEPTED BY THE LD. CIT(A). WE FOUND THE CIT(A) HAS NOT CALLED FOR REM AND REPORT OR COMMENTS FROM THE ASSESSING OFFICER IN RESPECT OF SUBMISSIONS / E VIDENCE FILED BY THE ASSESSEE. THE ASSESSING OFFICER WAS PREVENTED TO VERIFY THE FRESH MATERIAL FILED IN THE APPARENT PROCEEDINGS HAVING EVIDENTIAL VALUE AND SUCH ADDITI ONAL EVIDENCE ARE NOT PRODUCED IN THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFIC ER WAS DENIED OPPORTUNITY TO VERIFY SUCH EVIDENCE AND TEST CHECK GENUINITY. CON SIDERING THE APPARENT FACTS AND MATERIAL ON RECORD AND PROVISIONS OF LAW, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER SHOULD BE PROVIDED WITH ADEQUATE OPPORTUNIT Y TO VERIFY THE INFORMATION SUBMITTED IN THE APPELLANT PROCEEDINGS AND EXAMINE GENUINESS OF THE EVIDENCE. THEREFORE, WE SET ASIDE THE ORDER OF CIT(A) FOR LIM ITED PURPOSE TO THE FILE OF THE ASSESSING OFFICER AND ASSESSING OFFICER SHALL PROVI DE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSING THE ORDER ON MERITS AND THE GROUND OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. :-10-: I.T.A. NOS. 2134/MDS/2013 & 1395/MDS/2015 10. SIMILARLY, ITA NO. 139/MDS/2015 FOR THE ASSESSM ENT YEAR 2011-12 IS ALSO ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, REVENUE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE ORDER PRONOUNCED ON WEDNESDAY, THE 16TH DAY OF NOVE MBER, 2016 AT CHENNAI. SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER SD/ SD/ SD/ SD/ - ( . . . . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER /CHENNAI, /DATED: 16TH NOVEMBER, 2016 JPV /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF.