ITO, New Delhi V. Simran Singh, Delhi

ITA 3744/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4197 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 31-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 03-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B K RAO
• Keywords: Opportunity of being heard
• Section: 10B; 2

Judgement Text

ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 3743 & 3744/DEL/2009 A.YRS. 2005-06 & 2006-07 INCOME TAX OFFICER, WARD-25(1), VS. SIMRAN S INGH PROP. ROOM NO. 304, D-BLOCK, M/S SIMRAN EXPORT INC., VIKAS BUILDING, NEW DELHI 102, TIME HOUSE, 5, C OMM. CENTRE WAZIRPUR INDL. AREA, NEW DELHI 110 052 (PAN: AATPS6973M) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. R.S. SINGHVI, CA DEPARTMENT BY : SH. B.K. RAO, SR. DR ORDER PER SHAMIM YAHYA, AM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 . SINCE THE ISSUES ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, THESE A RE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE COMMON ISSUE READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION U/S 10B BY ONLY RELYING ON C IRCULAR NO. 1 OF THE CBDT BUT IGNORING THE DEFINITION OF MANUFACTURE AS CONTA INED IN CLAUSE(29BA) OF SECTION 2 CONTAINED IN FINANCE ACT, 2009; IGNORING THE PROVISIONS OF SEC. ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 2 10B(2); IGNORING THE FINDINGS OF THE AO THAT THERE IS NO MANUFACTURING ACTIVITY, AND IGNORING THE METRIX OF THE NEW DEFINI TION WHILE DEDUCTION. 3. THE ASSESSEE IN THIS CASE IS ENGAGED IN THE BUS INESS OF EXPORT OF INCENSE STICKS/CONES, WOODEN HOLDERS AND MISCELLANEOUS HAND ICRAFT ITEMS. ASSESSEE HAS CLAIMED DEDUCTION U/S 10B. AO EXAMINED THE PROVISI ON OF SECTION 10B AND WAS OF THE OPINION THAT ASSESSEES BUSINESS HAS BEEN ESTAB LISHED BY TRANSFER OF OLD MACHINERY. AO ALSO MENTIONED THE FACT THAT ASSESSE E WAS ASKED TO PRODUCE THE ORIGINAL BILLS OF THE PURCHASE OF NEW PLANT AND MA CHINERY ALONGWITH FREIGHT BILLS. HOWEVER, NOTHING WAS PRODUCED. HOWEVER, THE ASSES SEE STATED THAT ASSESSEE HAD STARTED THE UNIT AT B-269, PHASE-I MONGOLPURI INDUSTRIAL AREA, NEW DELHI IN AUGUST, 2003. THIS UNIT WAS SUBSEQUENTLY APPROVED AS HUNDRED PERCENT EOU. FURTHER IT HAS BEEN MENTIONED TO THE AO BY THE A/R THAT THE UNIT HAD ALREADY COMMENCED ITS MANUFACTURING ACTIVITIES ON 22 ND AUGUST, 2003 I.E. DURING F.Y. 2003-04. AO FOUND THAT IT HAS NOT PURCHASED ANY MACHINERY DURING THE F.Y. 2004-05, THE PERIOD RELEVANT TO ASSESSMENT YEAR 200 5-06. 3.1 AO ALSO REFERRED TO THE ASSESSEE FIRMS INSPEC TION AND EXAMINATION OF SHRI SIMRAN SINGH AT THE PREMISES NO. B-269, MONGOLPURI- I. SHRI SIMRAN SINGH ACCEPTED THAT MACHINERY WERE PURCHASED IN EARLIER Y EARS. IT WAS ALSO EXPLAINED THAT THESE MACHINES WERE ALSO USED AT SIMRAN EXPOR TS SITUATED AT T-5, 237, MONGOLPURI, DELHI. HENCE, THE AO OPINED THAT EOU WAS NOT FOUND BY USING ANY NEW PLANT AND MACHINERY, BUT WAS FOUND BY TRANSFER OF MACHINERY OR ANOTHER UNIT OF SIMRAN EXPORTS SITUATED AT T-5/237, MONGOLPURI, DELHI. THE ASSESSEE IN THIS ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 3 REGARD REFERRED TO THE CBDT CIRCULAR NO. 149/194/2 004/TPL DATED 6.4.2005. THE AO DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND H ELD AS UNDER:- THE ARGUMENTS OF THE ASSESSEE HAVE BEEN CONSIDERED AND FOUND TO BE NOT ACCEPTABLE. THEY ARE SIMPLY IN THE NATURE OF AN EY EWASH TO HIDE A FACT WHICH IS ALL TOO BLATANT. FIRSTLY, THE ASSSESSEE IS TRYING TO DRAW SUPPORT FROM CIRCULAR NO. 01/2005 OF THE CBDT, THE RELEVANT PORTION OF WHICH IS REPRODUCED AS UNDER:- ..THE MATTER HAS BEEN EXAMINED AND IT IS HEREBY CLARIFIED THAT AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA (DTA) AN D DERIVING PROFIT FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTW ARE MANUFACTURED OR PRODUCED BY IT WHICH IS SUBSEQUENTLY CONVERTED I NTO A EOU SHALL BE ELIGIBLE FOR DEDUCTION U/S 10B OF THE IT ACT, O N GETTING AS HUNDRED PERCENT EXPORT ORIENTED UNDERTAKING.. THE ABOVE CIRCULAR DOES NOT COME TO THE RESCUE OF THE ASSESSEE. IT IN NO WA Y WAIVES OR AFFECTS THE CLAUSE RELATING TO THE PROHIBITION ON TRANSFER OF OLD MACHINERY U/S 10B OR SPLITTING UP OR RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE. IT ONLY ALLOWS AN EXISTING UNIT EXPORTI NG ARTICLES OR THINGS WHICH IS SUBSEQUENTLY CONVERTED INTO AN EOU TO AVAI L THE BENEFIT OF SECTION 10B. THE EXISTING UNIT (WHICH IS SUBSEQUEN TLY CONVERTED) ITSELF CANNOT CIRCUMVENT THE CONDITIONS OF SECTION 10B, IN THAT IT CANNOT BE FORMED AS A RESULT OF TRANSFER OF MACHINE RY. SECTION 10B IS UNDERTAKING/ UNIT SPECIFIC. HERE THE ASSESSEE WAS U SING MACHINERY AT ONE UNDERTAKING I.E. T-5/237, MONGOLPURI-I, DELHI ( NON EOU AND NON ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 4 10B) AND SUBSEQUENTLY TRANSFERRED THE SAME TO ANOTH ER UNDERTAKING AT B-269 PHASE-I, MONGOLPURI, DELHI IN AUGUST, 2004 WHICH WAS SUBSEQUENTLY CONVERTED INTO AN EOU ON 17 TH JUNE, 2004. THE PRODUCTION ACTIVITY AT T-5/237, MONGOLPURI-I WAS CO MPLETELY STOPPED AS A RESULT OF THIS ACTION WHICH IS ALSO TANTAMOUNT TO VIOLATION OF CONDITION LAID OUT IN SECTION 10B(2)(II). 3.2 UPON ASSESSEES APPEAL LD. CIT(A) CONSIDERED TH E ISSUE. THE CIT(A) SUMMARIZED THE CASE AS UNDER:- THE APPELLANT IS PROPRIETOR OF M/S SIMRAN EXPORT I NC. WHO MANUFACTURES INCENSE STICKS WHICH ARE EXPORTED TO D IFFERENT COUNTRIES. IT IS OBSERVED THAT THE MANUFACTURING FA CILITY WAS SITUATED AT T-5/237, MANGOLPURI, DELHI WHICH WAS SHIFTED TO B-269, MANGOLPURI, PHASE-2, DELHI WHICH IS DOMESTIC TARIFF AREA ON 21 ST AUGUST, 2002. THE APPELLANT MADE THE APPLICATION TO THE CONCERNED AUTHORITY ON 22.8.2003 TO BE REGISTERED AS 100% E XPORT ORIENTED UNIT. THIS UNIT WAS APPROVED AS 100% E.O.U. VIDE LETTER F.NO. 12- 263/2004-100% EOU/4447 DATED 17 TH JUNE, 2004. THE UNIT WHICH GOT APPROVAL AS 100% WAS NOT A NEW UNIT. IT WAS ALR EADY IN EXISTENCE SINCE AUGUST, 2003 AS UNIT SET UP IN DOMESTIC TARI FF AREA. 3.3 LD. CIT(A) FURTHER REFERRED TO THE CBDT CIRCULA R NO. 1/2005 DATED 6.1.2005 AS UNDER:- 1. SECTION 10B OF THE INCOME TAX ACT PROVIDES FOR 100% DEDUCTION OF PROFITS DERIVED BY A HUNDRED PER CENT EXPORT ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 5 ORIENTED UNDERTAKING, FROM EXPORT OF ARTICLES OR TH INGS OR COMPUTER SOFTWARE MANUFACTURED OR PRODUCED BY IT. THE DEDUCTION IS AVAILABLE FOR A PERIOD OF TEN CONSECUT IVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGIN S TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUT ER SOFTWARE. HOWEVER, NO DEDUCTION UNDER SECTION 10B I S AVAILABLE AFTER ASSESSMENT YEAR 2009-10. 2. THE DEDUCTION UNDER SECTION 10B IS AVAILABLE TO AN UNDERTAKING WHICH FULFILS ALL THE FOLLOWING CONDITIONS: (I) IT MANUFACTURES OR PRODUCES ANY ARTICLE OR THI NG OR COMPUTER SOFTWARE; (II) IT IS NOT FORMED BY THE SPLITTING UP, OR THE RECONSTRUCTION, OR A BUSINESS ALREADY IN EXISTENCE EXCEPT IN THE CIRCUMSTANCES SPECIFIED UNDER SECTION 33B OF THE IT ACT. (III) IT IS NOT FORMED BY THE TRANSFER TO A NEW B USINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. 3. REPRESENTATIONS HAVE BEEN RECEIVED FROM VARIOUS QUARTERS AS TO WHETHER AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA, WHICH IS SUBSEQUENTLY APPROVED AS 100% EOU BY THE B OARD APPOINTED BY THE CENTRAL GOVERNMENT IN EXERCISE OF POWERS CONFERRED UNDER SECTION 14 OF THE INDUSTRIES (DEVE LOPMENT ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 6 AND REGULATION) ACT, 1951, IS ELIGIBLE FOR DEDUCTIO N UNDER SECTION 10B OF THE INCOME TAX ACT. 4. THE MATTER HAS BEEN EXAMINED AND IT IS HEREBY CL ARIFIED THAT AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA (DTA) AND DERIVING PROFIT FROM EXPORT OF ARTICLES OR THINGS O R COMPUTER SOFTWARE MANUFACTURED OR PRODUCED BY IT, WHICH IS SUBSEQUENTLY CONVERTED INTO A EOU, SHALL BE ELIGIBL E FOR DEDUCTION UNDER SECTION 10B OF THE IT ACT, ON GETTI NG APPROVAL AS 100% EXPORT ORIENTED UNDERTAKING. IN SUCH A CASE , THE DEDUCTION SHALL BE AVAILABLE ONLY FROM THE YEAR IN WHICH IT HAS GOT THE APPROVAL AS 100% EOU AND SHALL BE AVAILABL E ONLY FOR THE REMAINING PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS, BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE, AS A DTA UNIT. FURTHER, IN THE YEAR OF APPROVAL, THE DEDUCTION SHA LL BE RESTRICTED TO THE PROFITS DERIVED FROM EXPORTS FRO M AND AFTER THE DATE OF APPROVAL OF THE DTA UNIT AS 100% EOU. MOREOVER, THE DEDUCTION TO SUCH UNITS IN ANY CASE WILL NOT B E AVAILABLE AFTER ASSESSMENT YEAR 2009-10. 3.4 CONSIDERING THE ABOVE LD. CIT(A) HELD AS UNDER :- ADVERTING BACK TO THE FACTS OF THE CASE, IT IS OBS ERVED THAT THE 100% EOU UNDERTAKING WAS SET UP IN DOMESTIC TARIF F AREA. THE MACHINERY FOR THIS UNIT WAS IMPORTED FROM USA O N ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 7 16.1.2001 AND APPLICATION TO CENTRAL BOARD OF DIREC T TAXES, NEW DELHI FOR APPROVAL AS 100% EOU WAS MADE ON 22.8 .2003. THE BOARD APPROVED THE EOU VIDE LETTER DATED 17.6.2 004. THE LANGUAGE OF THE CIRCULAR MAKES IT AMPLY CLEAR THAT AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA AND DE RIVING PROFIT FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTW ARE MANUFACTURED OR PRODUCED BY IT, WHICH IS SUBSEQUENT LY CONVERTED INTO A EOU SHALL BE ELIGIBLE FOR DEDUCTIO N U/S 10B OF THE ACT, ON GETTING APPROVAL AS 100% EXPORT ORIENT ED UNIT. IN SUCH A CASE, THE DEDUCTION IS AVAILABLE ONLY FOR TH E REMAINING PERIOD OF THE CONSECUTIVE ASSESSMENT YEARS, BEGINNI NG WITH THE ASSESSMENT YEAR RELEVANT TO EH PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTIC LE OR THINGS OR COMPUTER SOFTWARE, AS A DTA UNIT. FURTHE R, IN THE YEAR OF APPROVAL, THE DEDUCTION SHALL BE RESTRICT ED TO THE PROFITS DERIVED FROM THE EXPORTS, FROM AND AFTER TH E APPROVAL OF THE DTA UNIT AS 100% EOU. MOREOVER, THE DEDUCTI ON TO SUCH UNIT IN ANY CASE WILL NOT BE AVAILABLE AFTER T HE ASSESSMENT YEAR 2009-10. IN THE INSTANT CASE, THE UNDERTAK ING IS ESTABLISHED IN THE DOMESTIC TARIFF AREA IN THE FINA NCIAL YEAR 2000-01 WHEN THE MACHINERY WAS IMPORTED AND THE CEN TRAL BOARD OF DIRECT TAXES, NEW DELHI APPROVED THE 100% EOU VIDE LETTER DATED 17 TH JUNE, 2004. THE UNDERTAKING HAS CLAIMED PROPORTIONATE CLAIM U/S 10B OF THE ACT FROM THE DAT E OF ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 8 APPROVAL OF THE DTA UNIT AS 100% EOU FOR THE REMAIN ING PERIOD OF THE FINANCIAL YEAR 2004-05. 3.5 LD. CIT(A) FURTHER REFERRED TO THE ITAT DELHI IN THE CASE OF TECH BOOKS ELECTRONICS SERVICES (P) LTD. VS. ADDITIONAL COMMIS SIONER OF INCOME TAX REPORTED IN 100 ITD 125 AND ITAT DECISION IN THE CASE OF ITO VS. ANITA SYNTHETICS (P) LTD. REPORTED IN 100 TTJ 277 AND ACCORDINGLY DIRECTED T HE AO TO ALLOW THE CLAIM U/S 10B FOR THE EXPORT OF INCENSE STICKS ONLY. 3.6 AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 3.7 LD. DR SUBMITTED THAT SECTION 10B MANDATES DEDU CTION IN CASE OF NEWLY ESTABLISHED 100% EXPORT ORIENTING UNDERTAKING. HE CLAIMED THAT THE HEADING OF THE SECTION ITSELF READS AS UNDER:- {SPECIAL PROVISION IN RESPECT OF NEWLY ESTABLISHED 100% EXPORT ORIENTED UNDERTAKINGS.} 3.8 HENCE, DR SUBMITTED THAT BENEFIT U/S 10B IS A PPLICABLE ONLY TO NEWLY ESTABLISHED UNDERTAKINGS AND NOT TO THE UNITS WHICH ARE ESTABLISHED BY USING OLD MACHINERY. IN THIS REGARD, HE REFERRED TO THE PROV ISION O SECTION 10B(2) AND CLAIMED THAT THE ACT CLEARLY PROVIDES THAT UNDERTAK ING ELIGIBLE FOR SECTION 10B SHOULD NOT BE FOUND BY SPLITTING UP OF THE RECONSTR UCTION OF THE BUSINESS ALREADY IN EXISTENCE. IT SHOULD NOT BE FORMED BY THE TRANSF ER TO ANY OF THE BUSINESS OR MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. HE ARGUED THAT IN THE PRESENT CASE THE ASSESSEE ALREADY HAD A UNIT AT T-5/237, MA NGOLPURI, DELHI WHICH WAS SHIFTED TO B-269, MANGOLPURI, PHASE-2 AND LATER CO NVERTED INTO THE 100% EOU. HENCE HE CLAIMED THAT THE ASSESSEE ALREADY HAS A BU SINESS IN EXISTENCE AND THE ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 9 MACHINERY AND PLANT USED IN THAT BUSINESS HAS BEEN TRANSFERRED TO THIS UNIT IN WHICH THE EXEMPTION IS BEING CLAIMED. 3.9 LD. COUNSEL OF THE ASSESSEE ON THE OTHER HAND A RGUED THAT ASSESSEES CASE IS CLEARLY COVERED BY THE CBDT CIRCULAR. HE CLAIMED T HAT CBDTS CIRCULAR CLEARLY PROVIDES THAT ELIGIBILITY OF OLD UNITS FOR THE EXEM PTION U/S 10B. HE ARGUED THAT WHEN THE UNIT SET UP IN DOMESTIC TARIFF AREA IS CON VERTED INTRO EOU, IT BECOMES ELIGIBLE FOR DEDUCTION U/S 10B, AS PER THE SAID CI RCULAR. HE CLAIMED THAT ASSESSEES UNIT WAS SET UP IN DOMESTIC TARIFF AR EA AND WAS SUBSEQUENTLY SHIFTED AND CONVERTED INTO EOU. HENCE HE CLAIMED THAT AS SESSEE WAS CLEARLY ELIGIBLE FOR DEDUCTION AS PER THE SAID CIRCULAR. HE ARGUED TH AT WHEN THE CIRCULAR PERMITS CONVERSION OF DOMESTIC TARIFF AREA UNIT INTO EOU, IT IS UNDERSTOOD THAT SHIFTING OF A UNIT IS ALSO COVERED. 3.10 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. WE FIND THAT AS PER THE CBDT CIRCULAR NO. 1/2005, REFERRED BY TH E LD. CIT(A) AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA, WHICH IS SUBSEQUENTLY A PPROVED AS 100% EOU WILL BE ELIGIBLE FOR SECTION 10B DEDUCTION. THE BENEFIT WI LL COMMENCE FROM THE YEAR IN WHICH UNDERTAKING BEGINS TO MANUFACTURE, BUT THE A SSESSEE WILL GET THE BENEFIT ONLY FROM THE YEAR IN WHICH IT HAS GOT APPROVED AS 100% EOU. NOW AS PER THE MANDATE OF THE CBDT CIRCULAR THE UNDERTAKING SHOULD BE ESTABLISHED AS A NEW UNIT FROM THE YEAR IN WHICH IT COMMENCE MANUFACTURE AND NOT FROM THE YEAR IN WHICH IT OBTAINED 100% EOU STATE. THIS PROPOSITION IS A LSO SUPPORTED BY THE CASE LAWS RELIED UPON BY THE LD. CIT(A). IT IS ALSO WELL SETT LED THAT CBDT CIRCULAR ARE BINDING ON REVENUE AUTHORITIES. AS PER THE ADMITTED FACTS OF THE CASE THE ASSESSEE WAS ALREADY HAVING MANUFACTURING FACILITY AT T-5/237, M ONGOLPURI, NEW DELHI. LATER ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 10 ON THIS FACILITY WAS SHIFTED TO B-269, MONGOLPURI, PHASE-II, DELHI WHICH LATER GOT APPROVED ON EOU UNIT. NO INFORMATION REGARDING PUR CHASE OF MACHINERY ETC. WITH REFERENCE TO BILLS AND VOUCHERS WERE PRODUCED BEFOR E THE AO. THE CIT(A) HAS OBSERVED THAT MACHINERY FOR THIS UNIT WAS IMPORTED FROM USA ON 16.1.2001 AND THE UNIT STARTED MANUFACTURING FROM F.Y. 2000-2001. THE LD. CIT(A) HAS NOT REFERRED TO ANY DOCUMENT OR DETAIL FROM WHICH HE CA ME TO SUCH CONCLUSION. IT IS NOTED THAT ASSESSEE HAD STATED BEFORE THE AO THAT CONING MACHINE WAS PURCHASED AFTER F.Y. 2004-05. HENCE THERE IS LACK OF SYMMETRY BETWEEN THE CIT(A)S FINDING AND ASSESSEES SUBMISSION BEFORE T HE AO. HENCE ONLY AFTER PROPER EXAMINATION ON THIS ASPECT THE ASSESSEE CAN CLAIM BENEFIT. 3.11 ADMITTEDLY THE MACHINERY WAS INITIALLY INSTAL LED AT T-5/237, MONGOLPURI, NEW DELHI WHICH HAS ALSO BEEN ACCEPTED BY THE ASSE SSEE IN HIS STATEMENT BEFORE THE AO. NOW LATER ON THIS FACILITY WAS SHIFTED TO B-269, MONGOLPURI, PHASE-II, NEW DELHI. THE LD. CIT(A) IN HIS ORDER HAS FURTHE R MENTIONED THAT ASSESSEE HAS BEEN CARRYING ON THE BUSINESS IN THE FACTORY PRE MISES SINCE APRIL, 1994 AND THE MANUFACTURING FACILITY WAS LATER ON SHIFTED ON 21.8 .2002. NOW WE FIND THAT UNDOUBTEDLY THE UNIT AT B-269 WAS SET UP UNDER DOME STIC TARIFF AREA AND IT HAS SUBSEQUENTLY OBTAINED THE STATUS AS EOU. ON THES E FACTS AS PER THE CBDT CIRCULAR THE ASSESSEE WOULD BE ELIGIBLE FOR DEDU CTION U/S 10B IF IT WAS A NEWLY ESTABLISHED UNIT. ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 11 3.12 HOWEVER, WE NOTE THAT THIS UNIT AT B-269, M ONGOLPURI WAS ESTABLISHED AFTER TRANSFERRING / SHIFTING THE MACHINERY FROM A NOTHER FACILITY AT T-5/237, MONGOLPURI, DELHI. NOW THE ANOTHER QUESTION BEFORE US IS WHETHER THE UNIT AT B- 269 IS ESTABLISHED BY TRANSFER OF MACHINERY FROM T- 5/237 OR WHETHER IT IS A MERE SHIFTING OF ENTIRE FACILITY TO AN ADJACENT LOCATION . WE FIND THAT PROPER FINDING IS NOT THERE IN THIS REGARD IN THE ORDERS OF AUTHORI TIES BELOW. THE LD. CIT(A) IN PARA 7.3 OF HIS ORDER HAS OBSERVED THAT ASSESSE IS THE O WNER OF BOTH THE PROPERTIES AND IS MAINTAINING THE SAME FOR THE PURPOSE OF THE BUSI NESS. ADJUDICATION OF THIS REQUIRES EXAMINATION OF FACTUAL MATRIX OF THE TRAN SFER/SHIFTING. FURTHER AS POINTED OUT EARLIER THE FACTS RELATING TO THE ESTABLISHMENT OF THE NEW UNIT WITH REFERENCE TO THE BILL VOUCHER AND OTHER FACTS HAVE ALSO NOT B EEN PROPERLY BROUGHT OUT IN ORDER OF AUTHORITIES BELOW. WHILE ASSESSING OFFICE R HAS NOTED THAT THESE WERE NOT AT ALL PRODUCED BEFORE HIM, LD. CIT(A) HAS SIMPLY M ENTIONED THAT THE MACHINERY FOR THE UNIT WAS IMPORTED FROM USA ON 16.8.2001. A S AGAINST THIS ASSESSEE HAS STATED BEFORE THE ASSESSING OFFICER THAT CONING MAC HINE WAS PURCHASED IN 2004- 05. 3.13 HENCE IN THE INTEREST OF JUSTICE WE REMIT THE I SSUE TO THE FILES OF THE AO TO EXAMINE THE ISSUE OF ESTABLISHMENT OF NEW UNIT AND ITS SHIFTING/TRANSFER AFRESH ITA NO. 3743 & 3744/DEL/09 A.YRS. 2005-06 & 2006-07 12 WITH REFERENCE TO THE CBDT CIRCULAR AS MENTIONED AB OVE. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/04/201 0. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 09/04/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES