DCIT 8(2), MUMBAI V. LEXI PENS (INDIA) P.LTD, MUMBAI

ITA 3195/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92289 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: M SUBRAMANIANAR
• Keywords: Opportunity of being heard
• Section: 43B; 80IB

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. .. , ! '#$ , # BEFORE S/SH. I.P. BANSAL, JUDICIAL MEMBER & RAJENDR A,ACCOUNTANT MEMBER /.ITA NO.3195/MUM/2012 , % & /ASSESSMENT YEAR-2004-05. DCIT 8(2), ROOM NO.209 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI 400020 % / VS. M/S. LEXI PENS (INDIA) PVT. LTD. B-33, 6 TH FLOOR, VEERA INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI WEST, MUMBAI-400053 PAN: AAACL7243D ( /APPELLANT ) ( / RESPONDENT ) . /CO NO.102/MUM/2013(ARISING ITA NO.3195/MUM/2012) % & /ASSESSMENT YEAR-2004-05 M/S. LEXI PENS (INDIA) PVT. LTD. B-33, 6 TH FLOOR, VEERA INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI WEST, MUMBAI-400053 PAN: AAACL7243D DCIT 8(2), ROOM NO.209 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI 400020 ( /APPELLANT ) ( / RESPONDENT ) /.ITA NO.3196/MUM/2012 , % & /ASSESSMENT YEAR-2007-08. DCIT 8(2), ROOM NO.209 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI 400020 % / VS. M/S. LEXI PENS (INDIA) PVT. LTD. B-33, 6 TH FLOOR, VEERA INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI WEST, MUMBAI-400053 PAN: AAACL7243D ( /APPELLANT ) ( / RESPONDENT ) /.ITA NO.3187/MUM/2012, % & /ASSESSMENT YEAR-2008-09. ITO 8(2) 2, ROOM NO.212/216A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 % / VS. M/S. LEXI PENS (INDIA) PVT. LTD.B-33, 6 TH FLOOR, LEXI CENTRE, OFF LINK ROAD, ANDHERI WEST, MUMBAI-400053 PAN: AAACL7243D ( /APPELLANT ) ( / RESPONDENT ) M/S. LEXI PENS INDIA LTD. . 2 /.ITA NO.5274/MUM/2013 , % & /ASSESSMENT YEAR-2010-11. DCIT 8(2), ROOM NO.209 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RAOD, MUMBAI 400020 % / VS. M/S. LEXI PENS (INDIA) PVT. LTD. B-33, 6 TH FLOOR, VEERA INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI WEST, MUMBAI-400053 PAN: AAACL7243D ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY : MS. S. PADMAJA (DR) RESPON DENT BY : SHRI M. SUBRAMANIAN(AR) / DATE OF HEARING :07.04.2015 / DATE OF PRONOUNCEMENT : 07.04 .2015 #( / O R D E R PER BENCH : ITA NO.3195/MUM/2012 BEING APPEAL FILED BY THE REVE NUE & CROSS OBJECTION NO.102/MUM/2013 FILED BY THE ASSESSEE REL ATES TO ASSESSMENT YEAR 2004-05 AND THEY ARE DIRECTED AGAINST THE ORDER PA SSED BY CIT(A) DATED 16 TH FEBRUARY 2012. ITA NOS. 3196,3187/MUM/2012 AND ITA NO.5274/MUM/2013 ARE THE APPEALS FILED BY THE REVENUE IN RESPECT OF ASSESSMENT YEARS 2007-08, 2008-09 & 2010-11 RESPECTIVELY, AND THEY ARE DIRECT ED AGAINST THREE SEPARATE ORDERS PASSED BY THE CIT(A) DATED 20.02.2012 FOR AS SESSMENT YEARS 2007-08 & 2008-09 AND ORDER DATED 09.05.2013 FOR ASSESSMENT Y EAR 2010-11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN ITS APPE AL FOR ALL THE ASSESSMENT YEARS IS AGAINST GRANT OF DEDUCTION TO THE ASSESSEE U/S.80IB OF THE I.T. ACT, 1961. THE DEDUCTION U/S.80IB WAS DENIED TO THE ASSE SSEE FOR VIOLATING THE CONDITIONS LAID DOWN IN CLAUSE (II) TO SECTION 80-I B(2) READ WITH EXPLANATION 2 OF THE ACT. IT WAS THE CASE OF AO THAT ASSESSEE HAD USED OLD MACHINERY FOR NEW UNIT BEYOND THE PRESCRIBE LIMIT, THEREFORE, THE ASSESSEE WAS DISENTITLE TO M/S. LEXI PENS INDIA LTD. . 3 CLAIM OF DEDUCTION U/S.80IB INITIALLY IN RESPECT OF ASSESSMENT YEAR 2004-05. THE LD. CIT(A) HAD ACCEPTED THE CLAIM OF THE ASSESSEE. HOWEVER IN DEPARTMENTAL, APPEAL THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF THE CIT(A) WITH THE FOLLOWING OBSERVATIONS VIDE ORDER DATED 26 TH DAY OF AUGUST 2009 PASSED IN ITA NO.7716/MUM/2007; WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES . WE HAVE ALSO GIVEN OUR ANXIOUS CONSIDERATION TO THE ORDERS OF THE BOTH THE AUTHORI TIES. THE ONLY CONTROVERSY FOR ALLOWING THE DEDUCTION U/S.80IB WHICH APPEARS FROM THE ASSESSMENT ORDER IS IN RESPECT OF THE VIOLATION OF ONE OF THE CONDITION FO R ACQUIRING THE MACHINERY OR PLANT WHICH SHOULD NOT HAVE BEEN PREVIOUSLY USED FOR ANY PURPOSE AS PER CLAUSE (II) TO SECTION 80IB(2) READ WITH EXAPLNATION-2. IT IS SEEN THAT THE AO HAS MADE A CATEGORICAL STATEMENT THAT THE ASSESSEE HAS TRANSFE RRED THE PLANT AND MACHINERY FROM M/S. VISHAL PLASTICS TO THE EXTENT OF RS.95,13,889/ - OUT OF THE TOTAL PLANT AND MACHINERY OF RS.3,54,13,041/-. WHEN THIS CATEGORICA L FINDING WAS GIVEN BY THE AO ON THE FACTS, IT WAS THE DUTY OF THE LD. CIT(A) TO CON TROVERT THE SAID FINDING BY REFERRING TO THE EVIDENCES PRODUCED. WE HAVE ALSO REPRODUCED THE REASONS GIVEN BY THE LD. CIT(A), WHICH IN OUR OPINION, ARE VERY MUCH CRYPTIC . WE, THEREFORE, CONSIDER IT FIT TO RESTORED THIS ISSUE TO THE FILE OF THE CIT(A) FOR F RESH ADJUDICATION AS THE ORDER LACKS THE PROPER REASONING. THE CIT(A) IS DIRECTED TO RES TRICT HIS FINDING TO THE LIMITED ISSUE OF WHETHER THERE IS A VIOLATION OF CONDITION OF THE PLANT AND MACHINERY WHICH WAS NOT PREVIOUSLY USED FOR ANY OTHER PURPOSE AS PE R CLAUSE (II) TO SECTION 80IB READ WITH EXPLANATION-2 OF THE ACT. THE CIT(A) IS DIRECT ED TO GIVE THE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DISP OSE OF THIS ISSUE BY PASSING SPEAKING ORDER. 3. IT IS IN PURSUANCE TO THE SAID ORDER IN RESPECT OF ASSESSMENT YEAR 2004-05, LD. CIT(A) HAS DECIDED THE ISSUE AS PER IMPUGNED OR DER DATED 16 TH FEBRUARY 2012. THE LD. CIT(A) REFERRING TO THE VARIOUS EVIDE NCES FILED BY THE ASSESSEE, WHICH HAVE BEEN DISCUSSED IN PARA 4 OF IMPUGNED ORD ER OF CIT(A) AND HAS RECORDED THE FINDINGS THAT DURING THE YEAR UNDER CO NSIDERATION UNIT SITUATED AT MUMBAI WAS WORKING INDEPENDENTLY FROM THE DAMAN UNI T AND THERE WAS NO TRANSFER OF THE PLANT AND MACHINERY FROM MUMBAI TO DAMAN. THEREFORE, THE DEDUCTION U/S.80IB COULD NOT BE DENIED TO THE ASSES SEE. FOR THE SAKE OF COMPLETENESS THE RELEVANT PARA OF LD. CIT(A) IN WHI CH SUCH EVIDENCES HAVE BEEN LISTED IS REPRODUCED BELOW;- 4. COPY OF SUBMISSIONS MADE WITH THE LD. CIT (APPE ALS) VIII DURING THE FIRST APPEAL PROCEEDINGS BEFORE HIM ON 06.09.20 07, ALONG WITH THE PAPER BOOK CONTAINING COPY OF RECORDS AND DOCUM ENTS. THE SAID SUBMISSIONS AND THE PAPER BOOK INTER ALIA CONTAINED THE FOLLOWING: M/S. LEXI PENS INDIA LTD. . 4 4.1 COMPUTATION OF TOTAL INCOME & AUDIT REPORTS U/S S. 44AB; 80IB; 1 15JB & 80HHC, ENCLOSURE TO RETURN OF INCOME AND CON SOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 01.04-2003 TO 31. 03.2004 RELEVANT TO ASSESSMENT YEAR 2004-05. 4.2 AGREEMENT DT. 01.04-2002 WHEREBY ASSETS OF VISH AL PLASTICS WHERE TAKEN OVER BY LEXI MUMBAI W.E.F. 01 APRIL 2002 AND THE FACT THAT LEXI PENS (INDIA) PVT. LTD., WAS FULLY OPERATIONAL ONLY AT MUMBAI DURING THE FIRST FINANCIAL YEAR OF THE COMPANY VIZ., 01.04.200 2 TO 31.03.2003, RELEVANT TO THE ASSESSMENT YEAR 2003-04. 4.3 LETTERS DT. 13/1112006 & 20/12/2006 SUBMITTED T O LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2004 -05, WHEREIN DETAILED NOTE ON CLAIM OF 80IB DEDUCTION ALONG WITH THE SEPA RATE FINANCIAL STATEMENTS OF DAMAN UNIT AND MUMBAI UNIT FOR THE FI NANCIAL YEAR 01.04.2003 TO 31.03.2004, RELEVANT TO THE ASSESSMENT YEAR 2004-05 WERE FURNISHED. 4.4 ASSESSEE'S LETTER TO ANSA E INDL. PREMISES CO-O P, SOC. LTD., MUMBAI DT., 23.07.2004 FOR REMOVAL OF MACHINERIES F ROM MUMBAI FOR SHIFTING TO DAMAN (RELEVANT TO FINANCIAL YEAR 01.04.2004 TO 31. 03.2005- ASSESSMENT YEAR 2005-06). 4.5. BILL NO.271 DT. 26.07.2004 (RELEVANT TO FINANC IAL YEAR 01.04.2004 TO 31.03.2005- ASSESSMENT YEAR 2005-06) OF MUNNALAL VE RAM FOR UNLOADING OF MACHINERIES SHIFTED FROM MUMBAI TO DAMAN ON 26.07.2 004, WHEREIN TAX IS DEDUCTED AT SOURCE ON SERVICES RENDERED BY MUNNALAL VERMA. 4.6 AFFIDAVIT OF SHRI. SANJEEV R. YADAV THE THEN MA NAGER OF THE COMPANY WHO UNDER TOOK THE OPERATION OF SHIFTING OF MACHINERIES FROM MUMBAI TO DAMAN ON 25 TH JULY 2004 (RELEVANT TO FINANCIAL YEAR 01.04.2004 TO 31.0 3.2005 ASSESSMENT YEAR 2005-06). 4.7 EXTRACTS FROM THE BOOKS OF ACCOUNT OF MUMBAI OP ERATIONS FOR THE FINANCIAL YEAR 01.04.2003 TO 31.03.2004, RELEVANT TO THE ASSESSMEN T YEAR 2004-05 MONTHLY SUMMARY OF SALES REGISTER, PURCHASE REGISTE R, WAGES ACCOUNT, POWER & FUEL (ELECTRICITY CHARGES) ACCOUNT, FACTORY RENT ACCOUNT, REPAIRS TO MACHINERY ACCOUNT, FACTORY EXPENSES ACCOUNT AND LAB OUR CHARGES ACCOUNT. 4.8 SAMPLES OF MUMBAI OPERATION RECORDS FOR THE FIN ANCIAL YEAR 01.04.2003 TO 31.03.2004, RELEVANT TO ASSESSMENT YEAR 2004-05 W AGES REGISTER, SALES BILLS, PURCHASE BILLS, LABOUR CHARGES BILLS AND PURCHASE B ILLS. 4.9 COPIES OF ALL POWER BILLS OF MUMBAI MOULDING UN IT AT E-106, ANSA INDUSTRIAL ESTATE, SAKINAKA WHEREIN THE PLANT & MACHINERY OF M UMBAI OPERATIONS SITUATED DURING THE FINANCIAL YEAR 01.04.2003 TO 31.03.2004, RELEVANT TO ASSESSMENT YEAR 2004-05. 4.10 COPIES OF MONTHLY SALES TAX RETURNS AND PROFES SION TAX RETURNS OF MUMBAI OPERATIONS FOR THE FINANCIAL YEAR 01.04.2003 TO 31. 03.2004, RELEVANT TO THE ASSESSMENT YEAR 2004-05. 4.11 SUBMISSIONS ON 19.09.2007 BEFORE CIT APPEALS V III, ON DAMAN OPERATIONS CONTAINING STATEMENT OF GROUP SUMMARY OF FIXED ASSETS INSTALLED AT DAMAN DURING THE FINANCIAL YEAR 2003-04, RELEVANT T O ASSESSMENT YEAR 2004-05, LEDGER EXTRACT OF PLANT & MACHINERY LISTING OUT THE INDIVIDUAL ITEM OF PLANT & MACHINERY AS AT 31.03.2004 AT DAMAN, MONTHWISE LEDG ER EXTRACT OF SALES ACCOUNT AND PURCHASE ACCOUNT MATCHING WITH DAMAN PROFIT & L OSS ACCOUNT AND COPY OF SALES TAX REGISTRATION CERTIFICATE ISSUED UNDER GOA , DAMAN AND DIU SALES TAX ACT. 1964 AND CENTRAL SALES TAX ACT,1956 FOR LEVI DAMAN W.E.F. 22.07.2003. 4.12 SUBMISSIONS ON 28.09.2007 BEFORE CIT APPEALS V III ENCLOSING THEREIN THE COPY OF THE BILLS FOR PURCHASE AND INST ALLATION OF NEW PLANT & MACHINERY AND DIES AND MOULDS AT THE NEW INDUSTRIAL UNDERTAKING AT DAMAN. M/S. LEXI PENS INDIA LTD. . 5 5. SUBMISSIONS IN DETAIL MADE BEFORE MY PREDECESSOR , WHO PARTLY HEARD THE CASE UNDER DISCUSSION, CONSEQUENT TO THE ORDERS OF THE HON'BLE ITAT REFERRED TO HEREINABOVE. 6. SUBMISSIONS MADE BEFORE MY PREDECESSOR DETAILING OUT THE EVIDENCES PLACED BEFORE THE LD. AO (DY. CIT - 8(2) & CIT APPE ALS VIII, MUMBAI WHICH CONCLUSIVELY PROVE THAT THE PLANT & MA CHINERY BELONGING TO LEXI MUMBAI (THE OLD MANUFACTURING SET-UP AT GAL A NO. E-106, ANSA INDUSTRIAL ESTATE, SAKINAKA, SAKI VIHAR, MUMBAI) WE RE NOT TRANSFERRED TO LEXI DAMAN (THE NEW INDUSTRIAL UNDERTAKING) DURING THE FINANCIAL YEAR 2003- 04, RELEVANT TO THE ASSESSMENT YEAR 2004-05. 7. SUBMISSIONS MADE BEFORE ME ON 17.06.20 11 AND 24 .11.2011. DURING THE COURSE OF HEARING ON 17.06.2011 AS PER THE DIRECTIV ES ISSUED TO THE ASSESSEE, THE FOLLOWING RECORDS OF MUMBAI OPERATION S FOR THE FINANCIAL YEAR 0 1.04.2003 TO 31.03.2004, RELEVANT TO ASSESSM ENT YEAR 2004- 05, WERE PRODUCED FOR VERIFICATION: 7.1 BOOKS OF ACCOUNT. 7.2 SALES, PURCHASE &. EXPENSE VOUCHERS. 7.3 SALES TAX RECORDS. 7.4 PROFESSION TAX RECORDS. 7.5 ELECTRICITY CHARGES BILLS FOR POWER CONSUMPTION AT MUMBAI INDUSTRIAL UNIT SITUATE AT GALA NO. E-106, ANSA INDUSTRIAL EST ATE, SAKI VIHAR, MUMBAI, OLD PLANT & MACHINERY OF MUMBAI OPERATIONS WERE THEN US ED FOR MANUFACTURE. 4. THE RELEVANT PORTION OF THE ORDER OF CIT(A) IN W HICH CONCLUSION HAS BEEN DRAWN IN FAVOUR OF THE ASSESSEE IS ALSO REPRODUCED BELOW; THE AFORESAID FACTUAL ACCOUNT CLEARLY REVEAL THAT MUMBAI OPERATION, USING THE OLD PLANT & MACHINERY FROM THE INDUSTRIAL UNIT OF MUMBA I OPERATION WAS VERY MUCH IN INSTANCE DURING THE FINANCIAL YEAR 01.04.2003 TO 31 .03.2004, RELEVANT TO ASSESSMENT YEAR 2004-05 AND THAT THERE HAS BEEN NO TRANSFER OF PLANT & MACHINERY FROM MUMBAI TO DAMAN. THE BOOKS OF ACCOUNT AND FINANCIAL STATEM ENTS OF MUMBAI OPERATION HAVE SEPARATELY BEEN DRAWN AND THERE ARE NO INSTANCES OF BOOKING OF COMMON EXPENDITURE WARRANTING ALLOCATION. HENCE THERE IS NOT MERIT IN THE INFERENCE OF THE LD. AO THAT NO BUSINESS ACTIVITIES WERE CARRIED OUT AT MUMBAI DURI NG THE FINANCIAL YEAR 01.04.2003 TO 31.03.2004, AND THAT THE OLD PLANT & MACHINERY, DIES & MOULDS AND FACTORY EQUIPMENTS COLLECTIVELY OF THE BOOK VALUE OF RS.95, 13,889/- BELONGING TO MUMBAI OPERATIONS WERE AVAILABLE AT DAMAN UNIT, AND THAT T HE SAID VALUE OF USED PLANT & MACHINERY AGGREGATING TO RS.95,13,889/- WAS MORE TH AN 20% OF THE TOTAL VALUE OF PLANT AND MACHINERY AT RS.3,54,13,041/-, JUST BECAU SE NO PF/ESIC SCHEMES WERE OPERATED FOR EMPLOYEES OF MUMBAI OPERATIONS. THE IN FERENCE OF THE AO IS PATENTLY INCORRECT AS THE BOOKS OF ACCOUNT, SUPPORTING VOUCH ERS, STATUTORY COMPLIANCES AND STATUTORY ORDERS SHOW THAT THE MUMBAI OPERATIONS HA D SALES OF FINISHED PRODUCTS, INCOME BY WAY OF LABOUR CHARGES RECEIPTS FRO MOULDI NG OF PEN PARTS, PURCHASE AND CONSUMPTION OF RAW MATERIAL, DISBURSAL TOWARDS POWE R & FUEL (ELECTRICITY CHARGES FOR OPERATION OF PLANT & MACHINERY), LABOUR CHARGES, FR EIGHT INWARD AND OUTWARD, FACTORY EXPENSES, EMPLOYEE PAYMENTS, SALES TAX AND EMPLOYEE PROFESSION TAX PAYMENTS ETC. IT MUMBAI MANUFACTURING OPERATIONS DI D NOT EXIST DURING THE PERIOD UNDER CONSIDERATION THEN THESE DISBURSALS AND REVEN UES WOULD NOT HAVE OCCURRED. M/S. LEXI PENS INDIA LTD. . 6 9. IN VIEW OF THE ABOVE OBSERVATIONS AND FINDINGS, I AM INCLINED TO CONCLUDE THAT DURING THE FINANCIAL YEAR 01.04.2003 TO 31.03.2004, RELEVANT TO THE ASSESSMENT YEAR 2004-05, THE MUMBAI OPERATIONS OF THE ASSESSEE WITH THE OLD PLANT & MACHINERY CONTINUED TO OPERATE SEPARATELY AT MUMBAI AND THAT THE NEW INDUSTRIAL UNDERTAKING OPERATIONS AT DAMAN OF THE ASSESSEE WAS NEWLY FORME D BY ACQUIRING NEW PLANT & MACHINERY AND WITHOUT ANY TRANSFER OF OLD AND USED PLANT & MACHINERY FROM MUMBAI OPERATIONS. SINCE THE FORMATION OF THE NEW I NDUSTRIAL UNDERTAKING AT DAMAN IS BY WAY OF PURCHASE AND INST ALLATION OF NEW PLANT & MACHINERY AND WITHOUT ANY TRANSFER OF OLD A ND USED PLANT & MACHINERY, I HOLD THAT THE ASSESSEE HAS FULLY COMPL IED WITH THE PROVISIONS OF SEC. 80113(2)(II) READ WITH EXPLANATION 2 THEREOF B OTH REGARDING I THE FORMATION OF NEW INDUSTRIAL UNDERTAKING AND THE RES TRICTIONS AS TO THE TRANSFER OF OLD & USED PLANT & MACHINERY. SINCE THE RE HAS BEEN NO TRANSFER OF OLD & USED PLANT & MACHINERY, I ALSO HOLD THAT THE ASSESSEE HAS NOT VIOLATED ANY OF THE CONDITIONS LAID IN TERMS OF SEC. 801B(2) (II) READ WITH EXPLANATION 2 THEREOF AND THAT THE APPELLANT IS ENTITLED TO THE D EDUCTION U/S. 801B AS CLAIMED. ACCORDINGLY, 1 DIRECT THE LD. AO TO ALLOW THE DEDUC TION US!. 801B OF THE IT ACT, 1961 TO THE ASSESSEE AS CLAIMED BY THE APPELLA NT AND RECOMPUTE THE INCOME OF THE ASSESSEE. 5. THE REVENUE IS AGGRIEVED, HENCE HAVE FILED FOLLO WING GROUNDS IN RESPECT OF ASSESSMENT YEAR 2004-05. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B OF THE ACT CLAIMED BY THE ASSESSEE AMOUNTING TO RS 1.74.35.300/- '2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B OF THE ACT, WITHOUT APPRECIATING THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 801B IN THE FIRST YEAR OF ITS CLAIM I.E A.Y. 2004-0 5 AND HENCE . IS NOT ELIGIBLE FOR DEDUCTION U/S 801B OF THE L.T.ACT' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN ADMITTING FRESH EVIDENCES HAVING A MATERIAL BEARING ON THE ALLOWABILITY OF DEDUCTION U/S 801B WITHOUT C ROSS VERIFYING THE SAME OR GIVING OPPORTUNITY TO THE ASSESSING OFFICER TO E XAMINE THE EVIDENCES' 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE A.O BE RESTORED. 5 THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 6. GROUND OF CROSS OBJECTION FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 READ AS UNDER; ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOW ING RS.23.696/- BEING THE M/S. LEXI PENS INDIA LTD. . 7 EMPLOYEES SHARE OF CONTRIBUTION OF PROVIDENT FUND M ADE BEYOND THE DUE DATES OF DEPOSIT BUT BEFORE THE DUE DATE OF THE FILING OF TH E RETURN OF INCOME U/S.36(1)(VA). 7. IN RESPECT OF DEPARTMENTAL APPEALS FOR ASSESSMEN T YEARS 2007-08, 2008- 09 & 2010-11, IT MAY BE MENTIONED THAT ISSUE REGARD ING GRANT OF DEDUCTION U/S.80IB HAS BEEN DECIDED BY THE CIT(A) IN FAVOUR O F THE ASSESSEE FOLLOWING THE DECISIONS OF ITAT IN ASSESSMENT YEARS 2005-06 & 2006-07. THE GROUNDS OF APPEAL IN THESE YEARS READ AS UNDER; ASSESSMENT YEAR 2007-08 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW. THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S BOIB OF THE ACT CLAIMED BY THE ASSESSEE AMOUNTING TO RS.8.09,10,099/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW. THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B OF THE ACT, WITHOUT APPRECIATING THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 801B IN THE FIRST YEAR OF ITS CLAIM I.E A Y 2004-05 AND HENCE , IS NOT ELIGIBLE FOR DEDUCTION U/S 801B OF THE I.T. ACT WHI CH MATTER IS BEING DISPUTED BY THE DEPARTMENT BEFORE THIS HON'BLE ITAT ' 3.'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW , THE LD. CIT(A) ERRED IN RELYING UPON THE DECISION IN THE AS SESSEE'S OWN .CASE FOR EARLIER YEARS, WITHOUT APPRECIATING THE FACT TH AT THE DEPARTMENT HAS CONTESTED THIS ISSUE IN A.Y. 2005-06 AND A.Y. 2006- 07 BEFORE THE HON'BLE HIGH COURT. 4 THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE A.O BE RESTORED. ASSESSMENT YEAR 2008-09 '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW. THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B OF THE ACT CLA IMED BY THE ASSESSEE AMOUNTING TO RS. 8, 33, 53, 585/-. '2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S 801B OF THE ACT , WITHOUT APPRECIATING THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 801B IN THE FIRST YEAR OF ITS CLAIM I.E A.Y 2004-05 AND HENCE, IS NOT ELIGIBLE FOR DEDU CTION U/S 801B OF THE L.T ACT, WHICH MATTER IS BEING DISPUTED BY THE DEPARTMENT BE FORE THIS HON'BLE ITAT'. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN RELYING UPON THE DECISION IN THE ASSESSEE'S OWN CASE FOR EARLIER YEARS, WITHOUT APPRECIATING THE FACT THAT T HE DEPARTMENT HAS CONTESTED THIS ISSUE IN THE ASSESSMENT YEARS 2005-06 AND 2006-07 B EFORE THE HON'BLE HIGH COURT'. ASSESSMENT YEAR 2010-11 '1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B OF THE ACT CLAIMED BY T HE ASSESSEE AMOUNTING TO RS.3.82.32,5891-' M/S. LEXI PENS INDIA LTD. . 8 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING DEDUCTION U/S 801B. WITHOUT APPRE CIATING THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 801B IN THE F IRST YEAR OF ITS CLAIM I.E. AY- 2004- 05 AND HENCE, IS NOT ELIGIBLE FOR DEDUCTION U/S 801 8 OF THE IT ACT, WHICH MATTER IS BEING DISPUTED BY THE DEPARTMENT BEFORE HONBLE ITAT ' 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN RELYING UPON THE DECISION IN THE ASSESSES OWN CASE FOR EARLIER YEARS WITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT H AS CONTESTED THE ISSUE IN AY- 2005-06 AND AY-2006-07 BEFORE THE HONBIE HIGH COURT ' 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AC BE RESTORED 5.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 8. IT WAS SUBMITTED BY LD. CIT(DR) THAT THE ASSESSM ENT YEAR 2004-05 IS THE FIRST YEAR OF CLAIM DEDUCTION U/S.80IB. THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE FILE OF LD. CIT(A) AND CIT(A) DID NOT GIVE OPPORTUNITY TO ASSESSING OFFICER FOR CROSS EXAMINING THE EVIDENCES AND AFTER EXAMINING THE EVIDENCES, LD. CIT(A) HAS ALLOWED THE RELIEF TO THE ASSESSEE. THER EFORE LD. CIT DR REFERRING THE ORDER OF CIT(A) CONTENDED THAT THE ORDER PASSED BY THE LD. CIT(A) SHOULD BE SET ASIDE AND THAT THE AO BE RESTORED. 9. BEFORE PROCEEDING TO DECIDE THESE APPEALS, WE MA Y MENTIONED THAT IN RESPECT OF A.Y. 2005-06 DEDUCTION U/S.80IB WAS ALLO WED BY THE TRIBUNAL VIDE ITS ORDER DATED 29 TH OCTOBER 2009 IN ITA NO.4883/MUM/2008 AND ALSO FOR ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 18.11.2011 PASSED IN ITA NO.873/MUM/2010. THE APPEALS FILED BY THE REVENUE W ERE DISMISSED ON THE GROUND THAT THE TRANSFER OF MACHINERY FROM MUMBAI U NIT TO DAMAN WAS 14.44% WHICH WAS MUCH LESS THAN THE SPECIFIED LIMIT OF 20%. THUS, THE ISSUE ON WHICH RELIEF WAS GRANTED TO THE ASSESSEE IS DIFF ERENT FROM THE ISSUE RAISED IN RESPECT OF ASSESSMENT YEAR 2004-05. IT HAS BEEN HEL D BY THE TRIBUNAL IN THE ORDERS FOR ASSESSMENT YEARS 2005-06 & 2006-07 THAT THE TRANSFERRED OF THE MACHINERY FROM MUMBAI UNIT TO DAMAN UNIT TOOK PLACE ONLY DURING THE FINANCIAL YEAR 2004-05 RELEVANT ASSESSMENT YEAR 200 5-06. THEREFORE, THE ONLY M/S. LEXI PENS INDIA LTD. . 9 ISSUE PREVAILED IN ASSESSMENT YEAR 2004-05 WOULD BE THAT WHETHER ANY MACHINERY FROM MUMBAI UNIT WAS TRANSFERRED OR UTILI ZED IN THE UNIT AT DAMAN. THE AFOREMENTIONED ORDER PASSED BY THE TRIBUNAL IN RESPECT OF A.YS. 2005-06 AND 2006-07 HAVE BEEN UPHELD BY THE HONBLE HIGH CO URT VIDE ORDER DATED 8.10.2014 IN INCOME TAX APPEAL NO.775 OF 2012 FILED BY THE REVENUE. THUS THE MATTER IS CONCLUDED IN RESPECT OF ASSESSMENT YE AR 2005-06 AND 2006-07 IN FAVOUR OF ASSESSEE ON THE GROUND THAT TRANSFER OF M ACHINERY FROM MUMBAI TO DAMAN UNIT WAS EFFECTED IN FINANCIAL YEAR 2004-05 R ELEVANT TO ASSESSMENT YEAR 2005-06 AND THAT TOO BELOW THE SPECIFIED LIMIT. IN THE ASSESSMENT YEAR 2004-05 RELEVANT TO FINANCIAL YEAR 2003-04, NOW BASED UPON THE EVIDENCES DISCUSSED IN THE ORDER PASSED BY THE CIT(A) A CONCLUSION HAS BEE N ARRIVED AT THAT THERE WAS NO TRANSFER OF PLANT AND MACHINERY FROM MUMBAI TO D AMAN. THUS, THE FINDINGS RECORDED BY LD. CIT(A) ARE MERE CONFIRMATION OF THE FACT ACCEPTED IN SUBSEQUENT YEARS THAT TRANSFER OF MACHINERY AND PLA NT OF MUMBAI UNIT TOOK PLACE ONLY AFTER FINANCIAL YEAR 2003-04 RELEVANT TO ASSESSMENT YEAR 2004-05. IN VIEW OF FACTUAL FINDING RECORDED TO LD. CIT(A) WHIC H HAVE NOT BEEN CONVERTED BY ANY POSITIVE MATERIAL, WE DO NOT FIND ANY FORCE IN THE AFORESAID ARGUMENTS OF LD. CIT DR THAT SIMPLY FOR THE REASON THAT LD. AO W AS NOT GIVEN OPPORTUNITY TO CROSS VERIFY THE EVIDENCES EXAMINED BY LD. CIT(A ), ANY ERROR HAS BEEN COMMITTED BY HIM IN GRANTING THE RELIEF TO THE ASSE SSEE. THE FINDINGS RECORDED BY LD. CIT(A) ARE BASED ON THE FACTS AND EVIDENCES FORMING THAT PART OF THE RECORD AND IT IS NOT THE CASE OF REVENUE THAT ANY F ACT FOUND BY LD. CIT(A) IS CONTRARY TO EVIDENCES EXISTING ON RECORD. SO FAR AS , IT RELATES TO CLAIM OF ASSESSEE IN RESPECT OF SUBSEQUENT YEARS I.E. ASSESS MENT YEARS 2007-08, 2008-09 & 2010-11, WE HOLD THAT THE RELIEF HAS RIGHTLY BEEN GRANTED BY CIT(A), WHICH IN ACCORDANCE WITH THE RELIEF GRANTED BY THE TRIBUNAL TO ASSESSEE IN RESPECT OF ASSESSMENT YEARS 2005-06 & 2006-07 AND THESE ORDERS OF TRIBUNAL HAVE ALREADY M/S. LEXI PENS INDIA LTD. . 10 BEEN UPHELD BY HONBLE JURISDICTIONAL HIGH COURT. 10. IN VIEW OF ABOVE DISCUSSION, THE FINDING NO MER IT IN ALL THE APPEALS FILED BY THE REVENUE THE SAME ARE DISMISSED. 11. NOW COMING TO THE CROSS OBJECTION FILED BY THE ASSESSEE THE DATES OF PAYMENTS ARE MENTIONED IN THE ASSESSMENT ORDER IN P ARA 7, WHICH READ AS UNDER; MONTH AMOUNT DATE OF PAYMENT JAN 04 7772 05.03.2004 FEB 04 7234 23.04.2004 MAR 04 8690 23.04.2004 23696 12. IT CAN BE SEEN FROM THE ABOVE TABLE THAT ALL T HE PAYMENTS HAVE BEEN MADE BEFORE DUE DATE OF FILING THE RETURN. LD. AR PLACED RELIANCE UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN ORGANICS CHEMICALS LTD. (BOM), WHEREIN IT HAS BEEN HELD THAT ASSESSEE IS E NTITLED TO CLAIM DEDUCTION U/S.43B IN RESPECT OF PAYMENT MADE TOWARDS PROVIDENT FUND EMPLOYEES CONTRIBUTION WITHIN GRACE PERIOD, IN VIEW OF RETROSPECTIVE APPLICABILITY OF AMENDMENT OF SECTION 43B BROUGHT B Y THE FINANCE ACT 2003, WITH EFFECT FROM 1 ST APRIL 2004. 13. IN THIS VIEW, OF THIS SITUATION AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLE TO GET RELIEF ON THIS ACCOUNT. THE IMPUGNED ADDITION IS DELETED AND CROSS OBJECTION FILED BY TH E ASSESSEE IS ALLOWED. M/S. LEXI PENS INDIA LTD. . 11 14. IN THE RESULT , ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS DAY OF 7 TH APRIL 2015. !'# $'% 07.04.2015 , - SD/- SD/- ( '#$ / RAJENDRA) ( . . / I.P.BANSAL ) '. / ACCOUNTANT MEMBER / JUDICIAL MEMBER / 0 MUMBAI ; $' DATED : 07.04.2015 AK PATEL* #( ) *+,- .#-&+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ! 1 ( ) / THE CIT, MUMBAI. 4. ! ! 1 / CIT(A) , MUMBAI 5. 45, 6678 , ! 78 , / 0 / DR, ITAT, MUMBAI 6. ,:; < / GUARD FILE. #(% / BY ORDER, 4 6 //TRUE COPY// //0 ' ( DY./ASSTT. REGISTRAR) , / 0 / ITAT, MUMBAI