ITO, BALOTRA V. M/s. Deepak Swadeshi Mills, BALOTRA

ITA 220/JODH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1608 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Keywords: Depreciation
• Section: 143(3); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NOS. 219 & 220/JU/2011 ASSESSMENT YEARS: 2005-06 & 2007-08 AND ITA NO. 103/JU/2012 ASSESSMENT YEAR: 2008-09 THE INCOME-TAX OFFICER VS. M/S DEEPAK SWADESH I MILLS WARD, BALOTRA E-69, INDUSTRI AL AREA BALOTRA PAN NO. AADFD 4511 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : SHRI DEEPAK SEHGAL DATE OF HEARING : 04.02.2013 DATE OF PRONOUNCEMENT : 11.02.2013 ORDER PER N.K.SAINI, A.M. THESE THREE APPEALS FILED BY THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A), 2 JODHPUR, DATED 18.3.2011 FOR A.YS. 2005-06 AND 2007 -08 AND ORDER DATED 9.12.2011 FOR A.Y. 2008-09. IN ALL THESE APPEALS, COMMON ISSUE IS INVOLVED AND THE APPEALS W ERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE WILL DEAL WITH ITA NO. 219/JU/2011 FOR A.Y. 2005-06. THE DEPARTMENT HAS RAISED THE FOLLOWING G ROUNDS IN THIS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN ACCEPTING THE CLAIM OF DEDUCTION U/S 80IB SHOWN IN THE IT RETURN, WITHOUT APPRECIATING THE FACTS THAT THE PRECONDITIONS FOR ALLOWABILITY OF DEDUCTION U/S 80IB HAS NOT BEEN FULFILLED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS. 26,82,405/- MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DID NOT HAVE SUFFICIENT MACHINERY FOR PROCESSING OF CLOTH, NO EXPENSES ON 3 ELECTRICITY CLAIMED IN THE PROFIT AND LOSS ACCOUNT, USE OF OLD MACHINERY IN MANUFACTURING PROCESS, ETC., AN D OTHER IRREGULARITIES DISCUSSED IN DETAIL BY THE A.O . IN THE ORDER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE DERIVED INCOME FROM MANUFACTURING OF PRINTED CLOTH AND FILED ITS RETURN OF INCOME ON 24.10.2005 DISCLOSING TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION U/S 80IB OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS T HE ACT, FOR SHORT] AMOUNTING TO RS. 26,46,457/-. ASSESSMEN T WAS COMPLETED U/S 143(3) OF THE ACT ON 21.3.2007DETERMI NG TOTAL INCOME AT RS. NIL AFTER ALLOWING DEDUCTION U/ S 80IB OF THE ACT TO THE TUNE OF RS. 26,82,405/-. THEREAFT ER, THE LD. CIT-II, JODHPUR PASSED ORDER DATED 24.3.2009 U/ S 263 OF THE ACT. IN THE SETTING ASIDE ORDER, THE CIT-II, J ODHPUR OBSERVED AS UNDER: THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER AS TO WHETHER THE ASSESSEE FULFILLED THE VARIOUS CONDITIO NS FOR CLAIM OF DEDUCTION U/S 80IB OF THE ACT. THE A.O . HAS NOT DEPUTED INSPECTOR FOR MAKING ANY SPOT 4 VERIFICATION REGARDING GENUINENESS OF THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT. THE VARIOUS DOCUMENT S AND EVIDENCES RELIED UPON BY THE ASSESSEE AND FILED BEFORE ME IN RESPECT OF THE CLAIM OF DEDUCTION U/S 80IB WERE NOT AVAILABLE TO THE A.O. IN THE LIGHT OF THE DISCUSSION, I CONSIDER THE ASSESSMENT ORDER UND ER REFERENCE AS ERRONEOUS AS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH REQUIRES TO BE SET ASIDE U/S 263 FOR FRESH ADJUDICATION IN RESPECT OF CLAIM OF DEDUCTION U/S 80IB . 4. THE LD. CIT(A) HAS MENTIONED THE REASONS GIVEN B Y THE CIT-II, JODHPUR WHILE SETTING ASIDE THE ASSESSMENT U/S 263 OF THE ACT AT PARAS 5.1 TO 5.5 OF THE IMPUGNED ORDE R, TO AVOID THE REPETITION, THE SAME ARE NOT REPRODUCED H EREIN. THE A.O, AFTER VERIFICATION AND EXAMINATION OF THE RECORDS AND INFORMATION OBTAINED IN THE COURSE OF SETTING A SIDE ASSESSMENT PROCEEDINGS, DETERMINED THE TOTAL INCOME AT RS. 27,96,980/- AND DID NOT ALLOW DEDUCTION U/S 80I B OF THE ACT TO THE TUNE OF RS. 26,82,405/-. THE OPERAT IVE PARA OF THE ASSESSMENT ORDER DATED 21.12.2009 FOR NON-AL LOWING DEDUCTION U/S 80IB WAS AS UNDER: 5 I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. ON GOING THROUGH THE SUBMISSIONS MADE BEFORE THE UNDERSIGNED, IT IS OBSERVED THAT THE SAME SUBMISSIO NS WERE MADE BEFORE THE WORTHY CIT-II, JODHPUR, WHO HAD DULY CONSIDERED THE SAME AND NEGATED AFTER GIVEN DUE REASONS. FURTHER, IN PARA 8 OF HIS ORDER U/S 263 THE WORTHY CIT HAS OBSERVED THAT THE ELECTRICIT Y LITTLE EXPENDITURE WAS INCURRED ON ELECTRICITY WAS NOT SUFFICIENT TO CARRY OUT THE MANUFACTURING ACTIVITIE S. DURING THE PRESENT ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO REBUT THE FINDING OF THE WORTHY CIT. HENCE, IN MY VIEW, THE ASSESSEE COULD NOT HAV E ACHIEVED TURNOVER OF RS. 3,64,89,094/- AND POSSIBIL ITY OF PURCHASE OF READY GOODS FROM THE MARKET/SISTER CONCERN CANNOT BE DENIED. DEDUCTION U/S 80IB IS ALLOWABLE IF THE ASSESSEE SELLS ITS OWN MANUFACTURE D GOODS AND NOT READY GOODS PURCHASED FROM ELSEWHERE. FURTHER, IT IS OBSERVED THAT THOUGH THE ASSESSEE HA S FURNISHED COPY OF WAGER REGISTER BUT NO EVIDENCE IN THE FORM OF INSPECTION REPORT OF STATE GOVERNMENT AUTHORITIES FURNISHED WHICH COULD SHOW THE ACTUALLY MORE THAN 10 OR MORE WORKERS WERE ENGAGED FOR CARRYING MANUFACTURING ACTIVITIES. IN VIEW OF THE ABOVE DISCUSSIONS AS ALSO DETAILED REASONS GIVEN BY THE WORTHY CIT-II, JODHPUR IN THE ORDER U/S 263, IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO PROVE THE CLA IM 6 OF DEDUCTION U/S 80IB AND HENCE DEDUCTION U/S 80IB IS NOT ALLOWABLE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSE E FOR DEDUCTION U/S 80IB OF THE ACT FOR THE REASONS STATE D IN PARAS 8 TO 10.3 OF THE IMPUGNED ORDER. NOW THE DEPARTMENT IS IN APPEAL. 6. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE AT THE VERY OUTSET, STATED THAT THIS ISSUE IS SQUARELY COVERED VIDE ORDER DATED 20.12.2012 OF THI S BENCH OF THE TRIBUNAL IN THE CASE OF ITO, WARD, BAL OTRA VS. M/S P.T.M. INDUSTRIES, BALOTRA IN ITA NOS. 111,112 AND 104/JODHPUR/2012 FOR A.YS. 2005-06, 2007-08 AND 200 8-09 RESPECTIVELY. COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD. IN HIS RIVAL SUBMISSIONS, THE LD . CIT, DR, ALTHOUGH SUPPORTED THE ORDER OF THE A.O, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUN SEL FOR THE ASSESSEE. 7 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD, IT IS NOTICED THAT THE ISSUE INVOLVED IN THE PRESENT APPEALS IS IDENTICAL TO THE ISSUE INVOLVED IN THE APPEALS OF THE DEPARTMENT IN THE CASE OF ITO, WARD, BALOTRA VS. M/S P.T.M. INDUSTRIES [SUPRA]. ON SIMI LAR ISSUE HAVING IDENTICAL FACTS, RELEVANT FINDINGS HAVE BEEN GIVEN AT PARAS 25 TO 28 OF THE ORDER DATED 20.12.012 IN T HE CASE OF ITO, WARD, BALOTRA VS. M/S P.T.M. INDUSTRIES [SU PRA] WHICH READ AS UNDER: 25. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE ASSESSEE CLAIMED THE DEDUCTION U/S 80IB OF THE ACT. THE PROVISIONS CONTAINED IN THE SECTION 80IB(2) OF THE ACT WHICH ARE ESSENTIAL TO CLAIM THE DEDUCTION U/S 80IB(5) OF THE ACT ARE FOLLOWING:- DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS. 8 80-IB. (2) THIS SECTION APPLIES TO ANY INDUSTRIAL UNDERTAKING WHICH FULFILS ALL THE FOLLOWING CONDITI ONS, NAMELY: (I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE : PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RESPECT OF AN INDUSTRIAL UNDERTAKING WHICH IS FORMED AS A RESULT OF THE RE-ESTABLISHMENT, RECONSTRUCTION OR REVIVAL BY THE ASSESSEE OF THE BUSINESS OF ANY SUCH INDUSTRIAL UNDERTAKING AS IS REFERRED TO IN SECTION 33B , IN THE CIRCUMSTANCES AND WITHIN THE PERIOD SPECIFIED IN THAT SECTION; (II) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (III) IT MANUFACTURES OR PRODUCES ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE, OR OPERATES ONE OR MORE COLD STORAGE PLANT OR PLANTS, IN ANY PART O F INDIA : PROVIDED THAT THE CONDITION IN THIS CLAUSE SHALL, IN RELATION TO A SMALL SCALE INDUSTRIAL UNDERTAKING OR AN INDUSTRIAL UNDERTAKING REFERRED TO IN SUB- 9 SECTION (4) SHALL APPLY AS IF THE WORDS 'NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE' HAD BEEN OMITTED. EXPLANATION 1.FOR THE PURPOSES OF CLAUSE (II), ANY MACHINERY OR PLANT WHICH WAS USED OUTSIDE INDIA BY ANY PERSON OTHER THAN THE ASSESSEE SHALL NOT BE REGARDED AS MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE, IF THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY : (A) SUCH MACHINERY OR PLANT WAS NOT, AT ANY TIME PREVIOUS TO THE DATE OF THE INSTALLATION BY THE ASSESSEE, USED IN INDIA; (B) SUCH MACHINERY OR PLANT IS IMPORTED INTO INDI A FROM ANY COUNTRY OUTSIDE INDIA; AND (C) NO DEDUCTION ON ACCOUNT OF DEPRECIATION IN RESPECT OF SUCH MACHINERY OR PLANT HAS BEEN ALLOWED OR IS ALLOWABLE UNDER THE PROVISIONS OF THI S ACT IN COMPUTING THE TOTAL INCOME OF ANY PERSON FOR ANY PERIOD PRIOR TO THE DATE OF THE INSTALLATIO N OF THE MACHINERY OR PLANT BY THE ASSESSEE. EXPLANATION 2.WHERE IN THE CASE OF AN INDUSTRIAL UNDERTAKING, ANY MACHINERY OR PLANT OR ANY PART THEREOF PREVIOUSLY USED FOR ANY PURPOSE IS TRANSFERRED TO A NEW BUSINESS AND THE TOTAL VALUE 10 OF THE MACHINERY OR PLANT OR PART SO TRANSFERRED DOES NOT EXCEED TWENTY PER CENT OF THE TOTAL VALUE OF THE MACHINERY OR PLANT USED IN THE BUSINESS, THEN, FOR THE PURPOSES OF CLAUSE (II) OF THIS SUB- SECTION, THE CONDITION SPECIFIED THEREIN SHALL BE DEEMED TO HAVE BEEN COMPLIED WITH; (IV) IN A CASE WHERE THE INDUSTRIAL UNDERTAKING MANUFACTURES OR PRODUCES ARTICLES OR THINGS, THE UNDERTAKING EMPLOYS TEN OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITH THE AID OF POWER, OR EMPLOYS TWENTY OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER. 26. FROM THE ABOVE PROVISIONS IT IS CLEAR THAT THE FIRST CONDITION TO BE FULFILLED IS THAT THE ASSESSE E SHALL NOT BE FORMED BY SPLITTING OR RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE. IN THE PRESENT CAS E, NOTHING WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE WAS FORMED BY SPLITTING OR RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE. THE ASSESSEE INSTALLED ITS MACHINERY AT THE PREMISES SITUATED AT E-4, IST PHASE, INDUSTRIAL AREA, BALTOR A AND E-3, RIICO, INDUSTRIAL AREA, PHASE-3, BALATORA FOR MANUFACTURING OF POPLIN FROM GREY CLOTH. THE LD CIT(A) CATEGORICALLY STATED IN PARA 6.6 OF THE 11 IMPUGNED ORDER THAT BALORA IS IN BARMER DSITRICT WHICH IS DECLARED AS INDUSTRIALLY BACKWARD DISTRIC T AS PER NOTIFICATION NO.714 (E) DATED 7.10.1997 ISSUED BY THE CBDT IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 80IB(5) OF THE ACT. THE ASSESSEE INSTALLED PLANT A ND MACHINERY IN THE PRECEDING YEARS RELEVANT TO THE ASSESSMENT YEARS 2003-04 AND 2004-05, SO THERE WAS NO MERIT IN THIS CONTENTION OF THE LD DR THAT THE MACHINERY WAS INSTALLED IN THE MONTH OF FEBRUARY 2005 AND IT WAS NOT POSSIBLE TO ACHIEVE THE TURN OV ER OF RS. 8.01 CRORES. IN THE PRESENT CASE, THE ASSES SEE HAD TAKEN ONE VACANT PLOT AND ANOTHER WITH OFFICE BUILDING & TAKEN ELECTRIC CONNECTION FROM SHRI PURSHOTTAM DASS AND M/S PURSHOTTAM TEXTILES. THE INDUSTRIAL UNDERTAKING WAS ESTABLISHED BY THE ASSESSEE AND MANUFACTURING ACTIVITIES WERE STARTED, AS SUCH, THE ASSESSEE FULFILLED THE FIRST CONDITION OF SECTION 80IB(2) OF THE ACT. AS PER THE SECOND CONDITION, THE INDUSTRIAL UNDERTAKING SHOULD NOT BE FORMED BY TRANSFER OF A NEW BUSINESS MACHINERY OR PLANT PREVIOUSLY USED FOR ANY BUSINESS. IN THE PRESENT CASE, THE ASSESSEE HAD TAKEN A NEW MACHINER Y TO ESTABLISH A NEW INDUSTRIAL UNDERTAKING AND NOTHI NG CONTRARY WAS BROUGHT ON RECORD, THEREFORE, THE ASSESSEE FULFILLED THE SECOND CONDITION ALSO. THE THIRD CONDITION IS THAT THE ASSESSEE MUST MANUFACTU RE 12 OR PRODUCE ANY ARTICLE OR THING IN ANY PART OF INDI A EXCEPT THE ARTICLES OR THINGS SPECIFIED IN 11 TH SCHEDULE. IN THE PRESENT CASE, THE ASSESSEE MANUFACTURED POPLIN I.E. FINISHED PRODUCT OUT OF GREY CLOTH I.E RAW MATERIAL BY CARRYING OUT ACTIVIT IES SUCH AS WASHING, BLEACHING, DYEING, PADDING AND RAPPING ETC. AND THE FINISHED PRODUCT IS ALTOGETHER DIFFERENT FROM THE RAW MATERIAL IN ITS PROPERTIES A ND EVEN THE DEPARTMENT IN THE PRECEDING YEAR HAS ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/ S 80IB OF THE ACT BY CONSIDERING THAT THE ASSESSEE WA S ENGAGED IN MANUFACTURING ACTIVITIES. MOREOVER, THE VARIOUS GOVERNMENT AUTHORITIES SUCH AS CENTRAL EXCISE, INDUSTRIAL DEPARTMENT, ESI AUTHORITIES ETC . HAVE ACCEPTED BY ISSUING THE VARIOUS CERTIFICATES T HAT THE ASSESSEE IS AN INDUSTRIAL UNDERTAKING ENGAGED I N THE BUSINESS OF MANUFACTURING OR PRODUCTION OF FINISHED PRODUCT NAMELY POPLIN OUT OF GREY CLOTH, WHICH IS A DIFFERENT ARTICLE OR THING FROM THE RAW MATERIAL, THEREFORE, THE ASSESSEE ALSO FULFILLED TH E THIRD CONDITION LAID DOWN IN SECTION 80IB (2) OF TH E ACT. THE FOURTH AND LAST CONDITION PROVIDES THAT T HE INDUSTRIAL UNDERTAKING MUST EMPLOY 10 OR MORE WORKERS, IF MANUFACTURING PROCESS IS CARRIED OUT WI TH THE AID OF POWER OR EMPLOY 20 OR MORE WORKERS IF TH E MANUFACTURING PROCESS IS WITHOUT AID OF POWER. IN 13 THE PRESENT CASE, THE LD CIT(A) AFTER VERIFYING FRO M THE WAGES REGISTER FOUND THAT 12 WORKERS WERE WORKING CONTINUOUSLY FORM APRIL, 2004 TO THE END OF THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDE R CONSIDERATION. THEREFORE, THE ASSESSEE FULFILLED TH E CONDITION OF EMPLOYING MORE THAN 10 WORKERS AND MANUFACTURE THE GOODS WITH THE AID OF POWER. THE ASSESSEE DEDUCTED ESI ON THE PAYMENT OF WAGES TO TH E WORKERS AND ESI ACT IS APPLICABLE ON THE FACTORY WH ICH IS ESTABLISHED AND ENGAGED IN MANUFACTURING OF GOOD S BY EMPLOYING MORE THAN 10 WORKERS. IN THE PRESENT CASE, THE ASSESSEE OBTAINED A CERTIFICATES FROM TH E DEPARTMENT OF FACTORY AND BOILER SHOWING THAT THE ASSESSEE WAS HAVING 12 WORKERS, UTILIZED THE POWER UP TO 4 H.P. FOR MANUFACTURING OF FINISHED GOODS. THE SAID CERTIFICATE IS NOT DOUBTED AT ANY STAGE, THEREFORE, THE ASSESSEE ALSO FULFILLED THE FOURTH CONDITION LAID DOWN IN SECTION 80IB(2) OF THE ACT T O CLAIM THE DEDUCTION U/S 80IB(5) OF THE ACT. IN TH E PRESENT CASE, THE MAIN OBJECTION OF THE ASSESSING OFFICER FOR DENYING THE DEDUCTION U/S 80IB OF THE ACT WAS THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO ACHIEVE THE TURN OVER OF RS. 8,01,81,703/- WITH ELECTRICITY CONSUMPTION OF RS. 70,982/- ONLY. IN T HIS REGARD, THE EXPLANATION OF THE ASSESSEE WAS THAT APART FROM THE ELECTRICITY EXPENSES OF RS. 70,640/- , 14 GENERATOR EXPENSE OF RS. 1,23,355/- WERE INCURRED WHICH WERE SUFFICIENT TO RUN 4 H.P. MACHINE REQUIR ED TO RUN 15 JIGGERS, WHICH WAS CONNECTED WITH THE SHA FT FUNCTIONING WITH 2 H.P. MOTOR AND FOR PADDING PROCESS, ONE AND HALF HORSE POWER WAS SUFFICIENT. A S PER THE LAY OUT PLAN, A TWO HORSE POWER MOTOR CONSUMES 1.5 UNIT OF ELECTRICITY PER HOUR AND FOR PADDING PROCESS, ONE AND A HALF H.P. MOTOR CONSUME ONE UNIT OF ELECTRICITY PER HOUR. ANOTHER MOTOR OF ONE HORSE POWER USED FOR WATER PUMP CONSUMES ONE UNIT IN ONE HOUR AND THE ASSESSEE WAS RUNNING THE FACTORY ON SINGLE SHIFT BASIS OF EIGHT HOURS, THEREFORE, CONSUMPTION OF ELECTRICITY WOULD NOT BE MORE THAN 28 UNITS PER DAY. WHILE PROCESSING THE CLOTH, BOILED WATER WAS REQUIRED WHICH WAS OBTAINED WITH THE AID OF FUEL AND THE ASSESSEE INCURRED EXPENSES OF RS. 5,53,948/- ON ACCOUNT OF FUEL CHARGES. WE, THEREFORE, DO NOT SEE ANY JUSTIFICATI ON ON THE PART OF ASSESSING OFFICER WHILE PRESUMING TH AT THE EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF ELECTRICITY WERE NOT SUFFICIENT TO ACHIEVE THE TURN OVER SHOWN BY IT. IN THE PRESENT CASE, THE ASSESSI NG OFFICER ACCEPTED THE PURCHASE OF GREY CLOTH WHICH WAS USED AS A RAW MATERIAL OF THE FINISHED PRODUCT I.E POPLIN WHICH WAS OBTAINED AFTER APPLYING VARIOUS PROCESSES LIKE PADDING, WASHING, DYEING, FURNISHIN G 15 AND WRAPPING OF THE CLOTH. THE ASSESSING OFFICER AL SO ACCEPTED THE SALE OF THE FINISHED GOODS SHOWN BY TH E ASSESSEE, SO THERE WAS NO REASON TO DENY THE CLAIM OF DEDUCTION U/S 80-IB(5) OF THE ACT WHEN THE ASSESSEE FULFILLED ALL THE CONDITIONS LAID DOWN IN THE PROVI SIONS OF SECTION 80IB(2) OF THE ACT. IN THE PRESENT CASE , THE ASSESSING OFFICER ALTHOUGH ALLEGED THAT THE ASSESSEE MIGHT HAVE PURCHASED A FINISHED PRODUCT FROM OTHER SOURCES AND DID NOT MANUFACTURE IN ITS UNIT, HOWEVER, THE PURCHASE OF GREY CLOTH WHICH IS A RAW MATERIAL IN THE ASSESSEES INDUSTRIAL UNDERTAKI NG HAS NOT BEEN DOUBTED. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE SOLD THE GREY C LOTH IN RAW FORM AND DID NOT USE THE SAME IN MANUFACTURING POPLIN WHICH IS THE FINISHED PRODUC T. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED WHILE ALLEGING THAT THE POSSIBILITY OF ASSESSEES PURCHASING READY GOODS FROM THE MARKET / SISTER CONCERN COULD NOT BE DENIED. FURTHERMORE, THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSE E IN THE PRECEDING YEAR AND ALLOWED DEDUCTION U/S 80I B OF THE ACT. THEREFORE, KEEPING IN VIEW THE PRINCIP LE OF CONSISTENCY, THE DEDUCTION COULD NOT HAVE BEEN DISALLOWED FOR THE YEAR UNDER CONSIDERATION AS PER RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S GRACE EXPORTS, AMBERI, 16 UDAIPUR VS. ITO, WARD-2(1), UDAIPUR (SUPRA), WHEREI N IT HAS BEEN LAID DOWN AS UNDER:- IN VIEW OF WHAT HAS BEEN FOUND HEREINABOVE IN QUESTION NO.1 THERE APPEARS NO NECESSITY OF MUCH DILATATION ON QUESTION NO.2. SUFFICE IS TO OBSERVE THAT IF THE BENEFITS HAVE BEEN GRANTED FOR THE ABOVE YEAR 2003-04 UNDER SECTION 10-B OF THE ACT; AND THE BENEFIT IS AVAILABLE FOR A BLOCK OF 10 YEARS, IT CANNOT, ORDINARILY, BE WITHDRAWN WHEN THE NATURE OF WORK AND BENEFIT REMAIN THE SAME. 27. IN THE PRESENT CASE ALSO, THE DEDUCTION U/S 80I B IS AVAILABLE FOR TEN CONSECUTIVE ASSESSMENT YEARS A ND THE ASSESSEE CLAIMED THE DEDUCTION FIRST TIME FOR T HE ASSESSMENT YEAR 2004-05, THEREFORE, THE BENEFIT WAS AVAILABLE TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WHEN NOTHING WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT THERE WAS CHANGE IN THE ACTIVITIE S AND NATURE OF THE WORK OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION VIS-A-VIS THE PRECEDING YEAR I. E. 2004-05. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE ITAT, LUCKNOW B BENCH IN THE CASE OF TAHREEM ELECTRICALS (P) LTD VS. ACIT (2007) 112 TTJ (LUCK) 586 (SUPRA),WHEREIN IT HAS BEEN HELD AS UNDER:- 17 IT IS AN ADMITTED FACT THAT THE ASSESSEE- COMPANY IS CLAIMING DEDUCTIONS UNDER SS. 80HH AND 80-I SINCE ASSESSMENT YEAR 1992-93.THE DEPARTMENT HAS ALLOWED DEDUCTIONS UNDER SS. 80HH AND 80-I FOR THE ASSESSMENT YEARS 1992-93, 1993-94, 1994-95, 1995-96, 1996-97 AND 1997-98. EVEN THE ASSESSING OFFICER ALLOWED DEDUCTIONS UNDER SS.80HH AND 80-I TO THE ASSESSEE FOR THE ASSESSMENT YEAR 1998-99. THE DEDUCTIONS, IN QUESTION, ARE AVAILABLE TO AN ASSESSEE FOR 8 YEARS AND THE YEAR UNDER CONSIDERATION IS THE LAST YEAR. THE CIT(A) HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THERE WAS ANY CHANGE IN THE ACTIVITIES OF THE ASSESSEE AS COMPARED TO THE EARLIER YEARS. THUS, IT IS CLEAR THAT SINCE ASSESSMENT YEARS 1992-93 TO 1997-98, THE ASSESSEE HAS BEEN CONSISTENTLY GETTING DEDUCTIONS UNDER SS. 80HH AND 80-I, CIT(A) WAS NOT JUSTIFIED IN WITHDRAWING THE DEDUCTIONS IN QUESTION. 28. IN THE PRESENT CASE ALSO, THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB OF THE ACT FOR THE ASSESSMENT YEAR 2004-05 AND 18 THERE IS NO CHANGE IN THE FACTS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS WELL AS IN THE ACTIVITI ES OF THE ASSESSEE AS COMPARED TO THE SAID EARLIER YEA R, THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DENYING THE CLAIM OF THE ASSESSEE. IN OUR OPINION, THE LD CIT(A) HAS PASSED A JUST AND WELL REASONED ORDER WHICH REQUIRES NO INTERFERENCE ON OUR PART. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 7. SO, RESPECTFULLY FOLLOWING THE AFORE-REFERRED TO ORDER OF ITO, WARD, BALOTRA VS. M/S P.T.M. INDUSTRIES [SU PRA], WE DO NOT SEE ANY MERIT IN THESE APPEALS OF THE DEPART MENT. IT IS RELEVANT TO POINT OUT THAT IN THE SAID CASE O F M/S P.T.M. INDUSTRIES [SUPRA] ALSO, INITIALLY THE A.O. ALLOWED THE CLAIM OF THE ASSESSEE. THEREAFTER, THE CIT-II, JODHPUR PASSED ORDER U/S 263 OF THE ACT AND DIRECTED THE A. O. TO REFRAME THE ASSESSMENT, ON THE DIRECTION OF THE CIT -II, JODHPUR, THE A.O. DISALLOWED THE CLAIM OF THE ASSES SEE U/S 80IB OF THE ACT AS HAS BEEN DONE IN THE PRESENT CAS E. THE REASONING GIVEN BY THE LD. CIT WHILE SETTING ASIDE THE ASSESSMENT U/S 263 OF THE ACT AND THE A.O. WHILE 19 DISALLOWING THE CLAIM OF THE ASSESSEE U/S 80IB OF T HE ACT IN THE REASSESSMENT FRAMED, ARE SIMILAR IN THE PRESENT CASE AS WERE IN THE CASE OF P.T.M. INDUSTRIES [SUPRA]. IN OTHER WORDS, THE FACTS OF BOTH THE CASES ARE IDENTICAL IN ALL RESPECTS. THEREFORE, RESPECTFULLY FOLLOWING THE ORD ER DATED 20.12.2012 OF THIS BENCH OF THE ITAT IN THE C ASE ITO, WARD, BALOTRA VS. M/S P.T.M. INDUSTRIES [SUPRA ] IN ITA NOS. 111,112 AND 104/JODHPUR/2012 FOR A.YS. 2005-06 , 2007-08 AND 2008-09 RESPECTIVELY, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). 8. IN ITAS NO. 220/JU/2011 AND ITA NO. 103/JU/2012 IDENTICAL ISSUE IS INVOLVED AND EVEN THE LD. CIT(A) FOLLOWED HIS EARLIER ORDER PASSED FOR A.Y. 2005-06. THEREFO RE, OUR FINDINGS GIVEN IN ITA NO. 219/JU/2011 IN THE FORMER PART OF THIS ORDER RELATING TO ASSESSMENT YEAR 2005-06 S HALL APPLY MUTATIS MUTANDIS FOR THESE ASSESSMENT YEARS 2 007-08 AND 2008-09 TOO. 20 9. IN THE RESULT, THE APPEALS OF THE DEPARTMENT ARE DISMISSED. [ORDER PRONOUNCED IN THE COURT ON 11.02.2013] SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 11 TH FEBRUARY, 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR ITAT, JODHPUR