ITO, BALOTRA V. M/s. Mansarovar Textiles, BALOTRA

ITA 380/JODH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3034 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: N R MERTIA
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 380/JODH/2012 (A.Y. 2008-09) THE ITO, VS M/S. MANSAROVAR TEXTILES WARD, BALOTRA E -246, 2 ND PHASE, IND. AREA BALOTRA PAN NO. AAKFM 0381 L ASSESSEE BY : SHRI N.R. MERTIA DEPARTMENT BY : SHRI G.R. KOKANI (DR) DATE OF HEARING : 08/03/2013. DATE OF PRONOUNCEMENT : 30/04/2013. PER HARI OM MARATHA, J.M.: THIS APPEAL OF THE REVENUE FOR A.Y. 2008-09 IS DIR ECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR DATED 09/08/2012. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE-FIRM DERIVED ITS INCOME FROM MANUFACTURING AND SELLING O F DYED AND PROCESSED CLOTH ON WHOLESALE BASIS. FOR THE A.Y. 20 08-09, THE ASSESSEE FIRM HAS FILED ITS RETURN OF INCOME ON 29.09.2008 D ECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/S 80 1B OF THE INCOME-TA X ACT, 1961 2 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] T O THE EXTENT OF BUSINESS PROFIT OF RS.13,58,099/-. THE ASSESSEE-FIRM HAS CLA IMED DEDUCTION U/S 80IB OF THE ACT @ 100% OF PROFIT EARNED. IT HAS ALS O FURNISHED AUDIT REPORT REQUIRED U/S 80IB IN FORM NO.10CCB. THE A.O . HAS NOTED THAT THE REQUISITE CONDITIONS OF SECTION 80IB (2) ARE NO T FULFILLED IN THIS CASE, THEREFORE, HE HAS NOT ALLOWED THE DEDUCTION. THE ASSESSEE HAS DEBITED ELECTRICITY EXPENSES TO THE TUNE OF RS. 2,4 1,392/-. THIS EXPENDITURE HAS NOT BEEN CONSIDERED BY THE A.O. TO BE IN COMMENSURATE WITH THE GOODS PRODUCES. HE HAS DOUBTE D THAT THE ASSESSEE-FIRM MAY HAVE PURCHASED READY GOODS FROM E LSEWHERE. HE HAS ALSO DOUBTED THAT REQUISITE REGULARLY EMPLOYED WORK ERS WERE NOT EMPLOYED BY THE ASSESSEE. IN THIS REGARD HE HAS ME NTIONED THAT THE ASSESSEE IS REQUIRED TO MAINTAIN LABOUR REGISTERS B OTH UNDER THE FACTORY ACT AND THE ESI ACT. THE ASSESSEE FIRM HAD FURNISHED A CHART IN THIS RESPECT, BUT THE A.O. HAS NOT GIVEN ANY CLEAR- CUT FINDING IN THIS REGARD. FINALLY, HE HAS REJECTED THE CLAIM MADE U/S . 80 IB OF THE ACT. 3. IN FIRST APPEAL, THE ASSESSEE FIRM WAS SUCCESSFU L IN GETTING THIS CLAIM ALLOWED. NOW THE REVENUE IS AGGRIEVED AND HAS FILED, THIS APPEAL BY RAISING THE FOLLOWING GROUNDS: 3 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION U/S 80IB IGNORING THE FACT THAT THE ASSESSEE UNDERTAKING HAS NOT FULFILLE D THE BASIC CONDITION LAID DOWN UNDER SUB-SECTION (2) OF SECTIO N 80IB AS DISCUSSED BY THE A.O. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS . 13,58,099/- MADE U/S 80IB WITHOUT APPRECIATING THE FACT THAT TH E ASSESSEE FAILED TO SHOW ANY CONGRUENCE IN CONSUMPTION OF POW ER WITH ITS CLAIMED MANUFACTURING ACTIVITIES, AS VERY LOW ELECT RICAL EXPENSES WERE DEBITED TO PROFIT AND LOSS ACCOUNT LEADING THE A.O. TO CONCLUDE THAT THE GOODS HAVE BEEN LARGELY TRADED, A S MANUFACTURING ON SUCH LARGE SCALE WAS NOT POSSIBLE WITH SUCH MEAGER CONSUMPTION OF POWER. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFUL LY PERUSED THE ENTIRE RECORD. BOTH PARTIES HAVE REITERATED THEIR S TANDS. IN SIMILAR CASES, WHERE THE A.O. HAS SIMPLY DOUBTED THE QUANTU M OF PRODUCTION WITH REFERENCE TO CONSUMPTION OF ELECTRICITY ETC. B UT WITHOUT GIVING ANY CONCRETE PROOF AS TO FROM WHERE THE ASSESSEE FI RM HAS MADE PURCHASES OF THE READY MADE GOODS AND AS TO HOW THE ELECTRICITY EXPENSES COUPLED WITH DIESEL EXPENSES WHICH IS USED TO RUN GENSET, IS NOT SUFFICIENT TO PRODUCE THE QUANTITY OF FOOD DECL ARED BY THE ASSESSEE, HE CANNOT SIMPLY DENY THIS DEDUCTION AVAI LABLE TO THE 4 ASSESSEE U/S 80 IB. THE FINDING WITH REGARD TO LAB OUR EMPLOYMENT IS ALSO NOT SPECIFICALLY COMING FROM RECORDS SO AS TO PROVE THAT THE ASSESSEE DID NOT EMPLOY 10 PERSONS. THE FACTS OF TH IS CASE ARE ALSO ON THE SAME LINES. THE A.O. HAS NOT GIVEN ANY PROOF TH AT THE ASSESSEE HAS PURCHASED FROM SUCH AND SUCH PERSON. THE READY-MADE GOODS OR THAT HOW THE ELECTRICITY CONSUMED IS NOT COMMENSURATE WI TH THE PRODUCTION. THE FINDING REGARDING EMPLOYEE IS ALSO NOT SPECIFIC. HENCE, IN FOLLOWING THE REGULAR STAND CONSISTENTLY TAKEN B Y THIS BENCH, WE CANNOT ALLOW ANY OF THE TWO CONNECTED GROUNDS RAISE D IN THIS APPEAL. AS A RESULT, WE DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH APRIL 2013. VL COPY TO ALL CONCERNED.