M/s. Japna Exports, New Delhi V. ITO, New Delhi

ITA 396/DEL/2011

• Counselvise Citation: 39620114 RSA 2011
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKARDR
• Assessee Lawyers: R S AHUJAAR
• Keywords: Depreciation; Search and seizure; Additional evidence; Assessment record; Set aside
• Section: 142(1); 80IA; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI D BENC H BEFORE SHRI C.L. SETHI, JM & SHRI A.N. PAHUJA, AM ITA NO.396/DEL/2011 ITA NO.396/DEL/2011 ITA NO.396/DEL/2011 ITA NO.396/DEL/2011 ASSESSMENT YEAR:2006-07 M/S JAPNA EXPORTS, 186, SAINIK VIHAR, PITAMPURA, NEW DELHI [PAN:AAAFJ 4243 N] [PAN:AAAFJ 4243 N] [PAN:AAAFJ 4243 N] [PAN:AAAFJ 4243 N] V/S V/S V/S V/S. INCOME TAX OFFICER,WARD-25(1) NEW DELHI (APPELLANT) .. (RESPONDENT) ASSESSEE BY SHRI R.S. AHUJA,AR REVENUE BY MS. Y. KAKKAR,DR DATE OF HEARING 21-09-2011 DATE OF PRONOUNCEMENT 07-10-2011 O R D E R O R D E R O R D E R O R D E R A.N.PAHUJA: A.N.PAHUJA: A.N.PAHUJA: A.N.PAHUJA:- -- -THIS APPEAL FILED ON 21.1.2011 BY THE ASSESSEE AGA INST AN ORDER DATED 13 TH DECEMBER, 2010 OF THE LEARNED CIT(A)-VIII, NEW DELH I, RAISES THE FOLLOWING GROUNDS:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED ITO AND CIT(A) ERRED IN A) MAKING A DISALLOWANCE OF ` 75,98,076/- U/S 801C OF THE INCOME-TAX ACT, 1961. B) TAKING A PROCEDURAL MISTAKE OF NON FILLING OF REP ORT OF ACCOUNTANT IN FORM 10 CCB AS REASON FOR DISALLOWANCE. 2. THE ASSESSEE HAS RELIED ON HIS COUNSEL AND CA TO REPRESENT HIM AND ALSO TAKE CARE OF ALL HIS COMPLIANCE MATTERS. THE ERR OR OF THE COUNSEL IN NOT FILING THE REPORT AND NOT REPRESENTING THE FACTS PROPERLY WHICH ARE WITHIN HIS KNOWLEDGE AND REPORT WH ICH HAVE BEEN ISSUED BY HIM HAS LED TO THE FAULTY ADDITION. THE AUDIT REPORT SHOULD, THEREFORE, BE TAKEN ON RECORD AND THE MATTER SET ASIDE TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH. 3. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND TH E GROUNDS OF APPEAL AT OR BEFORE THE HEARING. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETU RN DECLARING INCOME OF `2989/-WAS FILED ON 23.10.2006 AFTER CLAIMING DED UCTION U/S 80IC OF THE ITA NO.396/DEL/2011 2 INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) TO THE EXTENT OF `75,98,076/-. SINCE IN THE PRECEDING AY 2005-06, THE ASSESSING OFFICER [AO IN SHORT] DISALLOWED THE CLAIM FOR DEDUCTION U/S 80IC OF THE ACT, THE ASSESSEE HAVING NOT FULFILLED THE CONDITIONS STIPULATED IN THE SAI D SECTION, THE AO, AFTER RECORDING REASONS IN WRITING, REOPENED THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION U/S 147 OF THE ACT WITH THE ISSUE OF A NOTI CE U/S 148 OF THE ACT ON 13 TH JUNE, 2008. SINCE THE ASSESSEE DID NOT FILE ANY RETU RN IN RESPONSE TO THE SAID NOTICE, A NOTICE U/S 142(1) OF THE ACT WAS ISSU ED ON 10.11.2009. IN RESPONSE, THE ASSESSEE REPLIED VIDE LETTER DATED 18.11. 2009 THAT RETURN FILED ON 23RD OCTOBER, 2006 MAY BE TREATED AS RETURN IN RESPO NSE TO NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEEDI NGS, THE AO NOTICED THAT THE ASSESSEE FIRM WAS ALREADY IN BUSINESS OF MANU FACTURING MOSQUITO REPELLANT SINCE 1998 AND THERE WAS NO MANUFACTURING AC TIVITY AT KALA AMB UNIT OF THE ASSESSEE IN HIMACHAL PRADESH, WHEREIN NEG LIGIBLE PLANT AND MACHINERY WAS UNDERTAKEN AND THE ASSESSEE DID NOT FUL FILL CONDITIONS STIPULATED U/S 80IC OF THE ACT WHILE THE ASSESSEE NEITH ER ENCLOSED PRESCRIBED AUDIT REPORT IN FORM NO. 10CCB ALONG WITH THE RETURN NOR SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY , RELY ING UPON HIS FINDINGS IN THE ASSESSMENT YEAR 2005-06, THE AO DISALLOWED THE CLAI M FOR DEDUCTION U/S 801C OF THE ACT. 3. ON APPEAL, THE LEARNED CIT(A) UPHELD THE FINDINGS OF THE AO IN THE FOLLOWING TERMS:- 5.1 I HAVE CAREFULLY CONSIDERED THE FINDINGS RECORD ED BY THE ID. AO AND SUBMISSIONS MADE ON BEHALF OF THE APPELLANT FI RM. I HAVE ALSO EXAMINED THE ASSESSMENT RECORDS AND THE STATUTORY REQUIREMENTS UNDER VARIOUS SUB SECTIONS OF SECTION 80I C AND SUB SECTION (5) AND SUB SECTIONS (7) TO (12) OF SECTION 80L A OF THE IT ACT, 1961. ON EXAMINATION, I FIND THAT THOUGH THE APPELLA NT FIRM CLAIMS TO HAVE BEEN ENGAGED IN PRODUCTION OF MOSQUITO REPELLANT MACHINES AT ITS BRANCH SITUATED KALA AMB, HIMA CHAL PRADESH, THE RECORDS PRODUCED BEFORE THE AO AND IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE ME DO NOT SUPPORT THIS CLAIM. A PERUSAL OF TRADING AND PROFIT AND LOSS ACCOUNT FOR KAL A AMB, BRANCH REVEALS THAT DURING THE FY 05-06 RELEVANT FOR THE A Y UNDER CONSIDERATION, THE APPELLANT HAS SHOWN EXPORT SAL ES OF RS. 12428330 AND A PROFIT OF RS.7598076. HOWEVER, ON A C AREFUL EXAMINATION, IT IS SEEN THAT THERE ARE NO EXPENSES ON AC COUNT OF ITA NO.396/DEL/2011 3 ANY CONSUMABLE ITEMS NECESSARY FOR MANUFACTURING. FUR THER, THE EXPENSES ON ACCOUNT OF LABOUR CHARGES AND DEPRECIATIO N ARE NEGLIGIBLE/INSIGNIFICANT. IT IS SEEN THAT A SMALL SUM O F RS.760 HAS BEEN DEBITED ON ACCOUNT OF LABOUR CHARGES AND ANOTHER SUM OF RS.105 AS CLAIM OF DEPRECIATION. I FIND THAT NO SEPARA TE BALANCE SHEET FOR THE BRANCH OFFICE HAS BEEN MAINTAINED AND ON A PERUSAL OF SCHEDULE OF FIXED ASSETS MAINTAINED FOR DE LHI BRANCH THE DEPRECIATION OF RS.105 IS FOUND TO BE PERTAINING TO A FAN, WHICH BY NO MEANS CAN BE CONSIDERED TO BE PLANT AND MACHINERY SUFFICIENT FOR MANUFACTURING ACTIVITIES. THOUGH THE LD. COUNSEL FOR THE APPELLANT CLAIMS THAT THE KALA AMB UNIT HAS BEEN REGISTERED AS A SSI UNIT I.E. SMALL SCALE INDUSTRIAL UNIT, NO LABOUR/EMPLOYEE HAS BEEN ENGAGED BY THE APPELLANT. THEREFORE THE REQUIREMENT OF SSI UNIT ITSELF IS NOT FULFILLED. AS REGARDS, THE DOCUMENTS WHICH HAVE BEEN FILED IN SU PPORT OF ASSESSEE'S CLAIM, IT MAY BE STATED THAT OBTAINING CERTAIN DOCUMENTS IS ONE THING AND FULFILLING THE CONDITIONS AS ENVISAGED UNDER A PARTICULAR ENACTMENT IS ENTIRELY A DIFFERENT THIN G. I AM OF THE CONSIDERED OPINION THAT BEFORE SEEKING APPLICATION OF ANY LEGAL PROVISIONS, THE ENQUIRY OF FACTS IS IMPERATIVE A ND CANNOT BE LOST SIGHT OF. AS STATED EARLIER, THE AO HAS EXAMINED THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE VARIOUS REQUIREMENTS LAID DOWN UNDER DIFFERENT SUB SECTIONS OF SECTION 80LC AND HAS COME TO A FIRM CONCLUSION THAT NONE OF THE CONDITIONS ARE FUL FILLED IN THE PRESENT CASE. IN THE COURSE OF APPELLATE PROCEEDING S ALSO NO CREDIBLE EVIDENCE WHICH COULD REBUT THE FINDING OF THE ID. AO HAS BEEN FILED. APART FROM THE LABOUR CHARGES AND DEPRECIATION, OTHER E XPENSES CLAIMED AT THE BRANCH OFFICE ARE INSUFFICIENT/NEGLIGIB LE AND THEREFORE, DO NOT SUGGEST ANY GENUINE ACTIVITY OF MANUFA CTURE AND EXPORT AT THE BRANCH OFFICE. IN THE COURSE OF APPEL LATE PROCEEDINGS, I HAVE RAISED A QUERY REGARDING THE PER SONS WHO ARE LOOKING AFTER THE AFFAIRS OF THE BRANCH OFFICE AT K ALA AMB AND NO SATISFACTORY REPLY IN THIS REGARD WAS FILED BY THE REPRESENTATIVES OF THE APPELLANT. SH. INDERJEET SINGH, W HO CLAIMS TO HAVE SINCERELY AND TIRELESSLY WORKED FOR SETTING UP THE KALA AMB INDUSTRIAL UNIT ALSO COULD NOT EXPLAIN AS TO HOW THE AFFAIRS OF SUCH AN IMPORTANT UNIT ARE BEING MANAGED WITHOUT THERE BE ING ANY EDUCATED/EXPERIENCED PERSON AVAILABLE AT THE SITE. HE ONLY STATED THAT THE MANUFACTURING IS OUTSOURCED ON JOB WORK BA SIS AND OTHER MISC. RESPONSIBILITIES ARE BEING LOOKED AFTE R BY THE JOB WORKERS MOST OF WHOM ARE WOMEN. EVEN THE SALARY OF SH . INDERJEET SINGH IS BEING CLAIMED BY THE MAIN BRANCH A T DELHI, WHICH IS NOT AN ELIGIBLE INDUSTRIAL UNIT. FURTHER, ALL THE ACTIVITIES STARTING WITH MANUFACTURING OF CABINET, PLUG, RESISTANCE AND LEAD ARE TAKING PLACE AT THE MAIN BRANCH SITUATED AT DELH I AND ITA NO.396/DEL/2011 4 ALL THE PLANT AND MACHINERY REQUIRED FOR EVEN MANUFAC TURING PLUGS IS ALSO INSTALLED AT DELHI BRANCH. OTHER ITEMS, L IKE PINS, PORCLENE FOR MANUFACTURING OF HEATERS IS SOURCED FROM DIFFERENT STATIONS IN GUJARAT. A PERUSAL OF PROFIT & LOSS A/C ALS O REVEALS THAT THE TOTAL ELECTRICITY CONSUMED AT KALA AMB BRANCH IS OF RS.`13918 WHICH IS APPROXIMATELY RS.`1000 PER MONTH. IT IS A MATTER OF COMMON KNOWLEDGE THAT EVEN FOR USING A COUPLE OF TUBE LIGHTS AND BULBS AND BLOWER/HEATER AND FAN IN WIN TER AND SUMMER SEASONS RESPECTIVELY WOULD REQUIRE THIS MUCH O F EXPENDITURE ON ELECTRICITY. IN VIEW OF THE AFORESAID FACT SITUATION AND CONSIDERING THE FACT THAT EITHER THE MANUFACTURING IS HAPPENING ONLY AT DELHI BRANCH OR THE SAME IS BEING GOT DONE ON JOB WORK BASIS, I AM AFRAID, THE CLAIM OF THE APPELLANT FOR DEDUCTION U/S 80IC IS NOT IN ORDER. IT IS WELL SETTLED PROPOSITION OF LAW THAT TO CLAIM EXEMPTION, I T IS THE DUTY OF THE ASSESSEE TO SUBSTANTIATE THE SAME WITH RELEVANT RECORDS AND EVIDENCES (REFERENCE IS INVITED TO THE JUD GMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. R. VENKA TA SWAMI NAIDU, 29 ITR 529 AND JUDGMENT OF HONBLE RAJASTHAN H IGH COURT IN THE CASE OF GOPI RAM LILA VS. CIT 225 ITR 320). AS STATED EARLIER, THE LEARNED COUNSEL FOR THE APPELLAN T HAS CLAIMED IN HIS WRITTEN ARGUMENTS THAT THE ASSESSEE FIRM H AS GOT ITS BRANCH IN HIMACHAL PRADESH REGISTERED AS SSI UNIT. HOWEVER, IN THE ABSENCE OF EMPLOYMENT OF MINIMUM NUMBER OF PE RSONS, THE CLAIM OF SMALL SCALE INDUSTRIAL UNIT ITSELF IS NOT S USTAINABLE. AS STATED BY THE LEARNED AO, THE APPELLANT COMPANY HAS A LSO FAILED TO COMPLY WITH THE REQUIREMENT OF SUBMITTING AUDITO RS REPORT IN FORM NO.10CCB AS ENVISAGED U/S 80IC(7) REA D WITH SECTION 80IA(7) OF THE INCOME-TAX ACT, 1961. 6. IN VIEW OF THE AFORESAID FACT SITUATION, I HAVE NO HESITATION IN HOLDING THAT THE ASSESSING OFFICER HAS EXAMINED THE CLA IM OF THE APPELLANT U/S 80IC OF THE INCOME-TAX ACT, 1961 WITH REFE RENCE TO THE STATUTORY REQUIREMENTS AND THE FACTUAL POSITION OF THE C ASE. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE APPE LLANT HAS FAILED TO FULFILL THE SPECIFIC REQUIREMENT FOR SUBSTANTI ATING ITS CLAIM OF BEING (A) SMALL SCALE INDUSTRIAL UNDERTAKING , (B) A MANUFACTURING UNIT AND IT HAS ALSO FAILED TO OBSERVE THE CONDITIONS RELATING TO MAINTENANCE OF SEPARATE BOOKS OF ACCOUNT AND FILING OF SEPARATE STATUTORY AUDIT REPORTS AS ENVISAG ED U/S 80IC (7) READ WITH SECTION 80IA (7) IN RESPECT OF KALA AMB UNIT. ACCORDINGLY, THE ACTION OF THE ASSESSING OFFICER IS BE ING UPHELD. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST TH E AFORESAID FINDINGS OF THE LD. CIT(A). AT THE OUTSET, THE LD. AR ON BEHALF OF THE ASSESSEE WHILE ITA NO.396/DEL/2011 5 INVITING OUR ATTENTION TO THEIR REQUEST FOR ADMISSION OF A DDITIONAL EVIDENCE [PLACED ON PAGES 4 TO 10 IN PAPER BOOK]CONTENDED THAT TH E EARLIER COUNSEL M/S GULATI SANDEEP & COMPANY DID NOT SUBMIT THE PRESCR IBED AUDIT REPORT IN FORM NO. CCB EITHER AT THE TIME OF FILING OF THE INCOME TAX RETURN OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMEN T YEARS 2005-06 AND 2006-07 EVEN WHEN THE AUDIT WAS COMPLETED WITHIN THE STIP ULATED TIME AND REPORT DATED 31 ST JULY, 2006 WAS ISSUED BY THEM. INTER ALIA, IN THE ABS ENCE OF PRESCRIBED AUDIT REPORT, THE AO DENIED DEDUCTION U/S 80 IC OF THE ACT FOR THE AYS 2005-06 AND 2006-07. THEIR APPEAL AGAINST THE ASS ESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-06 IS STILL PENDING BEFORE THE LE ARNED CIT(A). HOWEVER, IN THE MONTH OF DECEMBER, 2010, THE LEARNED CIT(A) ISS UED A SHOW CAUSE AS TO WHY THEIR APPEAL FOR THE AY 2006-07 BE NOT DISPOSED OF EXPARTE, THEIR COUNSEL M/S GULATI SANDEEP & COMPANY HAVING NOT PRESE NTED THEMSELVES BEFORE HIM. SINCE THE SAID CA DID NOT EVINCE ANY INTE REST IN THE MATTER, THE ASSESSEE ENGAGED M/S R.S. AHUJA, CA ON 3 RD DECEMBER, 2010. SUBSEQUENTLY, THEIR APPEAL WAS DISPOSED OF ,INTER ALIA, FOR WANT OF PRESCRIBED AUDIT REPORT. SINCE THE ASSESSEE DID NOT FILE ANY WRITTEN SUBMISSIONS BEFORE THE LEARNED CIT(A) NOR THEIR EARLIER COUNSEL M/S GULATI SANDEEP & COMPANY INFORMED THE REASONS FOR NOT FILING THE PRESCRIBED REPORT BEFORE THE AO OR THE LEARNED CIT(A), THE ASSESSEE SUBMITTED THAT THEY SHOULD NOT BE ALL OWED TO SUFFER INJUSTICE FOR THE INACTION COMMITTED THEIR EARLIER COUNSE L. ACCORDINGLY, THE ASSESSEE SOUGHT ADMISSION OF ADDITIONAL EVIDENCE IN TH E FORM OF AUDIT REPORT IN FORM NO.10CCB FOR THE YEAR UNDER CONSIDERATION. I NTER ALIA ,AN AFFIDAVIT DATED 25 TH JUNE, 2011 OF SHRI GURVINDER SINGH BHASIN, PARTNER OF THE FIRM WAS ALSO ENCLOSED. THE LEARNED AR ADDED THAT SINCE THEIR APPEAL FOR ASSESSMENT YEAR 2005-06 IS STILL PENDING BEFORE THE LEARNED CIT( A) AND IN THE YEAR UNDER CONSIDERATION, THE FINDINGS OF THE LEARNED CIT(A) ARE BASED UPON THE FINDINGS OF AO IN THE AY 2005-06, IT WOULD BE IN FITNESS OF THI NGS IF THE ISSUE IN THIS APPEAL IS RESTORED TO THE FILE OF THE LEARNED CIT(A). THE LEARNED DR ,ON THE OTHER HAND, DID NOT OPPOSE THESE SUBMISSIONS OF THE LEA RNED AR ON BEHALF OF THE ASSESSEE NOR THEIR REQUEST FOR ADMISSION OF ADDITIO NAL EVIDENCE. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE F ACTS OF THE CASE. INDISPUTABLY, THE ASSESSMENT IN THIS CASE WAS RE OPENED AND ITA NO.396/DEL/2011 6 SUBSEQUENTLY FRAMED ON THE BASIS OF FINDINGS OF THE AO IN THE PRECEDING ASSESSMENT YEAR I.E. AY 2005-06. THE APPEAL OF THE AS SESSEE IN THE AY 2005- 06 IS STATED TO BE STILL PENDING BEFORE THE LD. CIT(A).. AS IN THE PRECEDING YEAR, THIS YEAR ALSO, THE ASSESSEE COULD NOT FILE PRESCRIBED AUDIT FORM IN FORM NO.10CCB BEFORE THE AO OR THE LEARNED CIT(A), ALLEGED LY DUE TO INACTION ON THE PART OF THE THEIR EARLIER CA M/S GULATI SANDEEP & CO MPANY. IN VIEW OF REASONS ADDUCED ON BEHALF OF THE ASSESSEE, WE ARE OF THE OPINION THAT THE AFORESAID ADDITIONAL EVIDENCE IS VITAL AND ESSENTIAL F OR THE PURPOSE OF CONSIDERATION OF THE SUBJECT-MATTER OF APPEAL AND TO ARR IVE AT A FINAL AND ULTIMATE DECISION IN A FAIR AND JUST MANNER. THE TRIBU NAL, UNDER RULE 29 OF THE ITAT RULES, 1963, HAS POWER TO ADMIT ADDITIONAL EVIDEN CE IN THE INTEREST OF JUSTICE OR IF THERE EXISTS SUBSTANTIAL CAUSE. THE CAUSE OF JUSTICE WILL BE BETTER SERVED IF THE PRESCRIBED AUDIT REPORT PLACED ON PAGE 4 -10 IN THE PAPER BOOK FILED ON 8.8.2011 IS ADMITTED IN EVIDENCE BECAUSE THE SAID DOCUMENT HAS A NEXUS WITH THE FACTS OF THE CASE AND ALSO VERY ESSENTIAL FOR PROPER APPRECIATION AND ADJUDICATION OF THE LIS/CONTROVERSY I NVOLVED. ACCORDINGLY, PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RU LE 29 OF THE ITAT RULES,1963 IS ACCEPTED IN THE LIGHT OF GUIDELINES LA ID DOWN IN THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF PARI MANGALDA S GIRDHARIDAS VS. CIT,(1977) 6 CTR(GUJ)647. EVEN OTHERWISE ,IT IS WELL SETTLED THAT THE PROVISION ABOUT FURNISHING OF THE AUDITORS' REPORT ALONG WITH THE R ETURN HAS TO BE TREATED AS A PROCEDURAL PROVISION, DIRECTORY IN NATURE, AND ITS SUBSTANTIAL COMPLIANCE SHOULD SUFFICE, MEANING THEREBY THAT SUCH R EPORT SHOULD BE MADE AVAILABLE BY THE ASSESSEE TO THE AO LATEST WHEN THE QUESTI ON OF FRAMING OF ASSESSMENT IS TAKEN UP BY HIM AND WHEN HE APPLIES HIS MIND TO THE CLAIM OF THE ASSESSEE AND IF BY THAT TIME, THE ASSESSEE HAS PUT HI S HOUSE IN ORDER AND HAS FURNISHED THE REPORT OF THE AUDITOR FOR SUPPORTING TH E RETURN, HE CAN BE SAID TO HAVE SATISFIED THE REQUIREMENT OF SECTION[CIT.VS GUJARAT OIL AND ALLIED INDUSTRIES,201 ITR 325(GUJ); CIT V. SHIVANAND ELECTRO NICS [1994] 209 ITR 63 (BOM); CIT VS PANAMA CHEMICAL WORKS,245 ITR 684(MP) ;CIT VS PUNJAB FINANCIAL CORPORATION,254 ITR 206(P&H);COMMISSIONER OF INCOME-TAX.VS. GUPTA FABS ,274 ITR 620 (P&H);AND. CIT VS. PRINT SYSTE M PRODUCTS,285 ITR 260(MAD.)]. ITA NO.396/DEL/2011 7 5.1 IN VIEW OF THE FOREGOING, ESPECIALLY WHEN APPE AL FOR THE AY 2005-06 ON MERIT OF THE CLAIM FOR DEDUCTION U/S 80IC IS STILL STATE D TO BE PENDING BEFORE THE LD. CIT(A) WHILE THE ASSESSMENT IN THE YEAR UNDER C ONSIDERATION IS SUBSTANTIALLY BASED ON FINDINGS OF THE AO IN THAT YEAR, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE VARIOUS ISSUES AFRESH IN A CCORDANCE WITH LAW, IN THE LIGHT OF AFORESAID ADDITIONAL EVIDENCE AND OF COURSE AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES, BRINGING OUT CLEARLY AS TO WHETHER OR NOT THE ASSESSEE FULFILLS THE CONDITIONS STIPULATED FOR DEDUCTI ON U/S 80IC OF THE ACT IN THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) IS FREE TO UNDERTAKE ANY INDEPENDENT ENQUIRES, IF FOUND NECESSARY AND THEREAF TER, MAY PASS SUCH ORDER AS HE DEEMS PROPER, IN ACCORDANCE WITH LAW WI TH THESE OBSERVATIONS, GROUND NOS. 1 & 2 IN THE APPEAL ARE DISPOSED OF. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL, ACCORDINGLY, THI S GROUND IS DISMISSED. 7. IN RESULT, APPEAL IS ALLOWED BUT FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (C.L. SETHI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. M/S JAPNA EXPORTS, 186, SAINIK VIHAR, PITAMPURA, NEW DELHI-34 2. ITO WARD-25(1) NEW DELHI. 3. CIT (APPEALS)-VIII, NEW DELHI 4. THE CIT CONCERNED. 5. THE DR, ITAT,D BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY/ // /ASSTT.REGISTRAR ITAT, DELHI