The DCIT, (OSD), Range-1, Ahmedabad V. Asiatic Colourchem Indus.Ltd., Ahmedabad

ITA 559/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0763 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A P SANDESARA
• Section: 80HHC; 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA.NO.559 AND 560/AHD/2011 / ASSTT. YEAR: 2006-2007 AND 2007-2008 DCIT(OSD), RANGE - 1 AHMEDABAD. VS ASIATIC COLOUR CHEMICAL INDUSTRIES LTD. PLOT NO.1503/1504 GIDC, PHASE-1, NARODA AHMEDABAD. PAN : AABCA 6297 R. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI SANJAY KUMAR, SR.DR ASSESSEE BY : SHRI A.P. SANDESARA, AR / DATE OF HEARING : 19/07/2016 / DATE OF PRONOUNCEMENT: 06/09/2016 $%/ O R D E R PER RAJPAL YADAV, ACCOUNTANT MEMBER PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE REVENUE AGAINST SEPARATE ORDERS OF THE LD.CIT(A) EVEN DATED I.E. 21 .12.2010 FOR THE ASSTT.YEARS 2006-07AND 2007-08. 2. SOLITARY GRIEVANCE OF THE REVENUE IN BOTH YEARS IS THAT THE LD.CIT(A) HAS ERRED IN GRANTING DEDUCTION UNDER SECTION 10B O F THE INCOME TAX ACT OF RS.2,91,06,674/- AND RS.6,88,677/- (INTEREST INCOME ) IN THE ASSTT.YEAR 2006- 07 AND RS.5,41,14,329/- AND RS.9,12,760/- (INTEREST INCOME) FOR THE ASSTT.YEAR 2007-08. FACTS ON ALL VITAL POINTS ARE COMMON IN BOTH THE YEARS, ITA NO.559 AND 560/AHD/2011 2 THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE T HE FACTS MAINLY FROM THE ASSTT.YEAR 2006-2007. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 30.12.2006 DECLARING TOTAL INCOME AT RS.49,93,57 2/- AND ON 31.10.2007 DECLARING TOTAL INCOME OF RS.1,38,60,251/- IN THE A SSTT.YEARS 2006-07 AND 2007-08 RESPECTIVELY. THE CASE OF THE ASSESSEE FOR BOTH THE YEARS WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICES UNDER SECTION 1 43(2)/142(1) WERE ISSUED AND SERVED. ON PERUSAL OF THE RECORD, IT REVEALED TO THE AO THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.2,83,33,749/- AND RS.5, 41,14,329/- UNDER SECTION 10(B) OF THE ACT IN THE ASSTT.YEARS 2006-07 AND 200 7-08. ACCORDING TO THE AO, THE ASSESSEE-COMPANY HAS BEEN ON THE BUSINESS O F MANUFACTURING DYEING AND DYES INTERMEDIATES SINCE FINANCIAL YEAR 1995-96 . THE ASSESSEE HAD SET UP AN UNDERTAKING IN DOMESTIC TARIFF AREA (DTA) AND IT WAS DERIVING PROFIT FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARES MANUFACTURED OR PRODUCED BY IT. IT HAS SUBSEQUENTLY CONVERTED INTO HUNDRED PERCENT EOU. SUCH A CONVERSION WAS MADE AFTER GETTING APPROVAL AS 100% EOU. ACCORDING TO THE ASSESSEE, IT IS ENTITLED FOR DEDUCTION UNDER SECTIO N 10B AT 100% OF PROFITS AND GAINS DERIVED BY THE ASSESSEE ON EXPORT OF ARTICLE OR THINGS OR COMPUTER SOFTWARES. THIS DEDUCTION WAS ADMISSIBLE TO THE AS SESSEE UNDER SECTION 10B(1) FOR A PERIOD OF 10 CONSECUTIVE ASSESSMENT YE ARS FROM THE YEAR IN WHICH IT HAS BEGAN TO MANUFACTURE OR PRODUCE ARTICL E OR THINGS. THE LD.AO HAS EXAMINED THE CLAIM OF THE ASSESSEE. HE DID NOT DISPUTE WITH REGARD TO THE PROPOSITION OF DEDUCTION UNDER SECTION 10B AS ADMIS SIBLE TO THE ASSESSEE. THE AO WAS OF THE VIEW THAT SINCE THIS COMPANY WAS ENGA GED IN MANUFACTURE/ PRODUCTION OF DYES AND DYES INTERMEDIATES FROM THE F.Y.1995-96, IT HAS CONVERTED ITS STATUS INTO EOU. IT COULD CLAIM DEDU CTION UNDER SECTION 10B ONLY FOR THE REMAINING PERIOD OF COMPLETE BLOCK OF 10 YEARS. IN OTHER WORDS, THE ASSESSEE HAS BEEN CLAIMING DEDUCTION UNDER SECT ION 80HHC AND 80IA ITA NO.559 AND 560/AHD/2011 3 FROM THE ASSTT.YEAR 1996-97, THEREFORE, TEN YEARS H AVE EXPIRED BEFORE THE ASSTT.YEAR 2006-07. ACCORDINGLY, THE LD.AO HELD TH AT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION IN THESE ASSESSMENT YEARS. THE FINDING RECORDED BY THE AO IN THE ASSTT.YEAR 2006-07 READ AS UNDER: 5.9 I HAVE CAREFUL GONE THROUGH THE SUBMISSIONS O F THE ASSESSEE. AFTER DETAILED PERUSAL, I AM UNABLE TO ACCEPT THE A SSESSEE'S SUBMISSIONS FOR THE REASONS STATED BELOW. ' 5.10 THE ASSESSEE HAS CONTENDED THAT THE NOTICE WAS SERVED ON - THE ASSESSEE ON 26-12-2008 AND COMPLIANCE WAS REQUIRED ON 29-12-2008 AT 11 A.M. IT IS VERY SHOCKING THAT THE ASSESSEE HAS R AISED THIS CONTENTION BEING WE!! AWARE OF THE FACT THAT HE WAS INTIMATED ABOUT THIS ISSUE ON 24/12/2008. MR. PRAVEEN GUPTA, VP (FINANCE) ATTENDE D THE OFFICE OF THE UNDERSIGNED ON 24/12/2008. HOWEVER, HE REFUSED TO A CCEPT THE SHOW CAUSE NOTICE. HE REQUESTED TO GRANT ONE DAY'S TIME TO VERIFY THE FACT FROM RECORDS. HE PROMISED THAT HE WILL ACCEPT THE SHOW C AUSE NOTICE ON 25/12/2008. HOWEVER, NOBODY TURNED UP ON 25/12/2008 TO RECEIVE THE SHOW CAUSE INSPTIE OF REPEATED TELEPHONIC REMINDERS BY THE UNDERSIGNED. CONSEQUENTLY, INSPECTOR OF THIS ' OFFI CE HAD TO GO TO THE FACTORY OF THE ASSESSEE (LOCATED IN VATVA) AND GOT THE SHOW CAUSE NOTICE SERVED. THE ASSESSEE CANNOT UNDER ANY CIRCUM STANCE TAKE THE PLEA THAT HE WAS GIVEN 3 DAYS TIME TO PREPARE THE R EPLY. 5.11 APART FROM THE ABOVE, THE MAIN CONTENTION R AISED BY THE ASSESSEE THAT IT DID NOT POSSESS PLANT & MACHINERY DURING TH E F.Y. 1995-96 AND HENCE IT WAS NOT IN A POSITION OF MANUFACTURIN G DYES AND DYES INTERMEDIATES. MOREOVER, IT HAS BEEN CLAIMED THAT I T HAD PAID JOB WORK CHARGES TO PARTIES WHO HAD CARRIED OUT THE WORK OF MANUFACTURING / PRODUCTION. THE ASSESSEE HAS STATED THAT IT HAD SU PPLIED ALL RAW MATERIALS AND PACKING MATERIALS TO THE ABOVE MENTIO NED PARTIES FOR DOING THE JOB WORK. THE ASSESSEE HAS ALSO CONTENDED TH AT IT T HAD OBTAINED CERTIFICATE OF REGISTRATION FROM EXCISE AUTHORIT IES, OH 9.12.1997 AND THUS, ONLY SUBSEQUENT TO THIS DATE IT HAS BECOME AN UNDERTAKING SET UP IN DTA. 5.12 THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTAB LE AT ALL. THE ISSUE TO BE CONSIDERED IS WHETHER THE ASSESSEE WAS ENGAG ED IN MANUFACTURE / PRODUCTION OF DYE & DYES INTERMEDIATES DURING F.Y . 1995-96. AS PER THE RECORDS DURING THE F.Y. 1995-96, THE ASSESSEE HAS S HOWN EXPORT TRADING SALES OF RS.1,81,44,308 AND EXPORT MANUFACTURING SA LES OF RS.2,05,62,267/-. THUS, THE ASSESSEE HAS ITSELF CAT EGORIZED SALES AS THOSE OF 'MANUFACTURED GOODS'. MOREOVER, FOR A.Y. 1 996-97 THE ASSESSEE HAS CLAIMED FOLLOWING DEDUCTIONS. U/S.80HHC RS.47,82,994 ITA NO.559 AND 560/AHD/2011 4 U/S.80IARS RS.24,83,068 (30% OF MANUFACTURING [PROFIT) (RESTRICTED UPTO RS.4,93,301) FROM THE ABOVE MENTIONED FACTS, IT IS VERY CLEAR TH AT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80HHC AND U/S. 80IA ON ITEMS MANUFACTURED BY IT. DEDUCTION U/S, 80-LA DURING THE A.Y. 1996-97 WA S AVAILABLE ONLY TO THE INDUSTRIAL UNDERTAKING ENGAGED IN MANUFACTURE / PRO DUCTION OF ANY ARTICLE OF THING. 5.13 IT IS VERY STRANGE AND AMUSING THAT FOR THE PU RPOSE OF CLAIMING DEDUCTION U/S. 80-IA FOR A.Y 1996-97 THE ASSESSEE H AD CLAIMED THAT IT IS ENGAGED IN MANUFACTURING / PRODUCTION OF DYES & DYE S INTERMEDIATES AND WHEN THE QUESTION OF DISALLOWING CLAIM U/S. 10B (FO R A.Y. 2006-07) CAME UP IT IS SAYING THAT IT WAS NOT MANUFACTURING / PRODUC ING DYES & DYES INTERMEDIATES IN A.Y. 1996-97. THE ASSESSEE IS ITSE LF CONTRADICTING IT'S STAND AND IT IS TRYING TO PLAY AROUND WITH THE PROVISIONS OF INCOME-TAX ACT. FIRST, THE ASSESSEE HAS ENJOYED DEDUCTION U/S. 80-IA ON MA NUFACTURING PROFIT AND SUBSEQUENTLY WHEN IT GOT CONVERTED INTO 100% EOU, I T STARTED CLAIMING DEDUCTION U/S. 10B FOR 10 ASSESSMENT YEARS STARTING FROM THE ASSESSMENT YEAR IN WHICH IT GOT CONVERTED INTO 100% EOU (IN FO RM 56G THE ASSESSEE HAS CLAIMED IT IS HIS 6 TH YEAR OF CLAIMING DEDUCTION AND THAT IT STARTING MANUFACTURING IN F.Y. 19992000 ONLY) 5.14 TO AVOID THIS KIND OF MISUSE ONLY, CIRCULAR NO .. 1 / 2005 WAS ISSUED WHEREIN IT HAS BEEN MENTIONED THAT: 'THE MATTER HAS BEEN EXAMINED AND IT IS HEREBY CLAR IFIED THAT AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA (DTA) AN D DERIVING PROFIT FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE MANUFACTURED OR PRODUCED BY IT, WHICH IS SUBSEQUENTLY CONVERTED INT O A EOU, SHALL BE ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE IT ACT, ON GETTING APPROVAL AS 100% EXPORT ORIENTED UNDERTAKING. IN SU CH A CASE, THE DEDUCTION SHALL BE AVAILABLE ONLY FROM THE YEAR IN WHICH IT HAS GOT THE APPROVAL AS 100% DOU AND SHALL BE AVAILABLY ONLY FO R THE REMAINING PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS, BEGINNI NG WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE, AS A DTA UNIT.' THUS, IT IS AMPLY CLEAR THAT THE PERIOD OF 10 YEARS WILL START FROM THE YEAR IN WHICH THE UNDERTAKING SET UP IN DTA HAS STARTED DER IVING PROFIT FROM THE EXPORT OF ARTICLES OR THINGS MANUFACTURED BY IT. 5.15 THE ASSESSEE'S CONTENTION THAT ONLY AFTER OBTA INING EXCISE REGISTRATION CERTIFICATE IT BECAME AN INDUSTRIAL UNDERTAKING SET UP IN DTA IS HIGHLY SHOCKING. IT IS A WELL ESTABLISHED FACT THAT THE AS SESSEE HAS BEEN CLAIMING DEDUCTION U/S. 80-IA AND 80HHC BEING AN INDUSTRIAL UNDERTAKING ENGAGED IN MANUFACTURE / PRODUCTION OF ANY ARTICLE /THING AND IT IS WELL ESTABLISHED FACT THAT THE UNIT WAS NOT LOCATED IN SEZ / EOU AT THAT POINT OF TIME. THUS, IT WAS AN INDUSTRIAL UNDERTAKING SET UP IN DTA IN F.Y. 199 5-96 (A.Y. 1996-97). ITA NO.559 AND 560/AHD/2011 5 5.16 NOW, COMING TO THE POINT THAT WHETHER IT WAS D ERIVING PROFITS FROM EXPORT OF ARTICLES OR THINGS MANUFACTURED BY IT. TH E VERY FACT THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80HHC AND U/S. 80-IA POINTS TO THE CONCLUSION THAT IT WAS DERIVING 'PROFITS FROM EXPOR T OF ARTICLES OR THINGS MANUFACTURED BY IT. FURTHER, EVEN IF THE CONTENTION OF THE ASSESSEE THAT IT DID NOT HAVE ANY PLANT & MACHINERY IN A.Y. 1996-97 TO CARRY OUT THE REQUIRED MANUFACTURING AND IT HAD PAID JOB WORK CHA RGES TO OTHER PARTIES WHO DID MANUFACTURING ON ITS BEHALF, IS CONSIDERED, IT IS FOUND THAT THERE ARE NUMBER OF JUDGEMENTS WHEREIN DIFFERENT COURTS HAVE HELD THAT THE PROCESS OF MANUFACTURING IS NOT DEPENDENT ON THE EXISTENCE OF PLANT & MACHINERY. EVEN, IF THE ASSESSEE IS NOT MANUFACTURING THE PROD UCTS DIRECTLY AND EXERCISE SUPERVISION ON THE PRODUCTION THROUGH OTHE R AGENCIES, IT STILL AMOUNTS TO MANUFACTURING. FOLLOWING ARE SOME OF THE JUDGEMENTS WHICH SUPPORT THIS VIEW. GRIFFON LABORATORIES PVT. LIMITED.VS CIT 119 ITR 14 5(CAI),WHEREIN IT WAS HELD THAT AN ASSESSEE NEED NOT OWN OR POSSESS P LANT OR MACHINERY TO BE A MANUFACTURER OF GOODS. THE MANUFACTURE MAY BE EITHER BY ASSESSEE ITSELF OR BY SOMEONE UNDER ASSESSEE'S SUPERVISORY C ONTROL OR DIRECTION. IN THE JUDGEMENT OF COMMR. OF ST V. DR. SUKH DEO [1 989] 23 STC 385 (SC), THE SUPREME COURT HAS-HELD THAT A MANUFAC TURER IS A PERSON BY WHOM OR UNDER WHOSE DIRECTION OR CONTROL THE GOODS ARE MANUFACTURED. IN ADDL. CIT V. A. .MUKHERJEE & CO. (P.) LTD. (1978 ) 113 ITR 718 (CAL),IT HAS BEEN HELD THAT A MANUFACTURER NEED NOT POSSESS ANY MANUFACTURING PLANT OR MACHINERY. 5.17 THUS, IT IS VERY CLEAR FROM, THE ABOVE MENTION ED CASE LAWS THAT JOB WORK PROCESSING, COMES WITHIN THE AMBIT OF 'MANUFAC TURING'. RELIANCE IS ALSO PLACED ON THE FACT THAT AS PER OLD PROVISIONS OF SEC. 10B (TILL 31.3.2000) MANUFACTURING WAS DEFINED AS A PROCESS WHICH INCLUD ES 'PROCESSING'. AFTER SUBSTITUTION THE WORD MANUFACTURING HAS NOT BEEN DE FINED IN NEW SECTION BUT IT CAN BE SAFELY ASSUMED THAT DEFINITION OF MAN UFACTURING WILL REMAIN THE SAME. CONCLUSION:- 5.18 ON THE BASIS OF ABOVE MENTIONED FACTS AND AFOR ESAID DISCUSSION, IT IS CRYSTAL CLEAR THAT THE ASSESSEE COMPANY WAS AN INDU STRIAL UNDERTAKING SET UP IN DTA AND IT DERIVING PROFITS FROM EXPORT OF AR TICLES OR THINGS MANUFACTURED BY IT IN A.Y. 1996-97. AS PER PROVISIO NS OF SEC. 10B(1) DEDUCTION U/S. 10B WILL BE AVAILABLE FOR 10 CONSECU TIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR IN WHICH THE UND ERTAKING BEGINS TO MANUFACTURE ARTICLES OR THINGS. 6. THUS, DEDUCTION U/S. 10B OF THE ACT IS AVAILABLE TO THE ASSESSEE ONLY UPTO A.Y.2005-06 AND THE ASSESSEE IS NOT ELIGIBLE-FOR DE DUCTION U/S. 10B FOR A.Y. 2006-07. ITA NO.559 AND 560/AHD/2011 6 4. ON APPEAL, THE LD.CIT(A) HAS REVERSED THIS FINDI NG AND ALLOWED THE DEDUCTION. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. AS FAR AS EXISTENCE OF THE ASSES SEE AS AN EOU IS CONCERNED, THERE IS NO DISPUTE BETWEEN THE PARTIES. SIMILARLY , IT IS NOT IN DISPUTE THAT THE ASSESSEE FULFILLS CONDITIONS ENUMERATED IN SECTION 10B OF THE ACT FOR AVAILING DEDUCTION. THE DISPUTE BETWEEN THE PARTIES IS VERY LIMITED. ACCORDING TO THE AO, THE ASSESSEE WAS ENGAGED IN MANUFACTURING OF DY ES AND DYES INTERMEDIATES. IT HAS BEEN EXPORTING THESE PRODUCT S FROM THE F.Y.1995-96. IT HAS CLAIMED DEDUCTION UNDER SECTION 80HHC AND 80IA. THE ASSESSEE HAS CONVERTED ITS DTA UNIT INTO EOU. IT CAN CLAIM DEDU CTION UNDER SECTION 10B AS PER SUB-SECTION 1 FOR A CONSECUTIVE PERIOD OF TE N YEARS FROM THE YEAR IN WHICH IT BEGINS MANUFACTURE. SINCE IT WAS MANUFACT URING IN THE ASSTT.YEAR 1996-97, TEN CONSECUTIVE ASSESSMENT YEARS HAVE EXPI RED AND IT IS NOT ADMISSIBLE IN THE ASSTT.YEAR 2006-07 ONWARDS. THE ASSESSEE SOUGHT TO SUBMIT THAT DEDUCTION CLAIMED IN THE F.Y.1995-96 AND OTHER YEARS, WERE NOT ADMISSIBLE. THESE WERE WRONGLY CLAIMED AND WRONGLY BEEN GRANTED. FOR PROVING THIS FACT, THE ASSESSEE IS HARPING UPON CER TAIN ENTRIES IN THE BOOKS OF ACCOUNTS, AND POINTED OUT THAT IT HAS VERY MEAGER P LANT & MACHINERY. IT DID NOT POSSESS PLANT & MACHINERY DURING THE F.Y.1995-9 6. THE LD.CIT(A) HAS ACCEPTED THIS FACT. IN OUR OPINION, THE ASSESSEE C ANNOT BE PERMITTED TO BREATH HOT AND COLD SIMULTANEOUSLY. WHEN WE CONFRONTED TH E LD.COUNSEL FOR THE ASSESSEE, AS TO HOW ASSESSEE CAN CLAIM DEDUCTION IN THESE ASSESSMENT YEARS, WHEN DEDUCTION WERE CLAIMED UNDER SECTION 80HHC AND 80IA IN THE ASSTT.YEAR 1996-97, THE REPLY OF THE LD.COUNSEL FOR THE ASSESSEE WAS THAT THE REVENUE MIGHT HAVE COMMITTED AN ERROR IN GRANTING S UCH DEDUCTION IN THOSE YEARS. BUT THE ASSESSEE CANNOT BE DENIED FROM ITS RIGHT TO CLAIM IN THESE YEARS. ITA NO.559 AND 560/AHD/2011 7 IN THE LIGHT OF THE ABOVE SITUATION, WE ARE CALLED UPON TO APPRECIATE TWO SETS OF FACTS. ON ONE HAND, EVIDENCE IN THE SHAPE OF INCOM E-TAX RETURN FILED BY THE ASSESSEE, WHICH HAS BEEN VERIFIED BY THE AUTHORIZED OFFICER OF THE COMPANY DEPOSING THAT ALL FACTS MENTIONED IN THE RETURN ARE TRUE AND CORRECT ACCORDING TO HIS BEST KNOWLEDGE. DEPARTMENT HAS ACTED UPON SUCH A DECLARATION AND ALLOWED THE DEDUCTION UNDER SECTION 80HHC OF RS.47, 82,994/- AND RS.24,83,068/- UNDER SECTION 80IA (30% OF MANUFACTU RING PROFIT RESTRICTED UPTO RS.4,93,301). ON THE OTHER HAND, THE EVIDENCE REFERRED BY THE ASSESSEE IS THAT FACTORY BUILDING WAS CONSTRUCTED ONLY IN F.Y.1 997-98. ELECTRIC CONNECTION WAS TAKEN ON 27.4.1996, TOTAL VALUE OF T HE PLANT & MACHINERY WAS NOT EVEN OF RS.5,000/- TILL 31.3.1997. THE SCALE O F THE LD.CIT(A) WAS WEIGHED TOWARDS THESE SET OF EVIDENCES, BUT IN OUR UNDERSTA NDING THESE ARE NOT SUCH A STRONG CIRCUMSTANCES WHICH CAN DISPEL OWN ADMISSION OF THE ASSESSEE WHILE FILING THE RETURN FOR THE ASSTT.YEAR 1996-97. IT I S NOT THE QUANTUM OF DEDUCTION OR QUANTUM OF ELECTRICITY TO THE PLANT & MACHINERY, IT IS TO BE SEEN THAT EVEN FOR TRIAL BASIS, THE ASSESSEE HAS DERIVED ANY PROFIT FROM MANUFACTURING ACTIVITY AND CLAIMED DEDUCTION UNDER SECTION 8HHC AND 80IA, THEN, IT WOULD BE CONSTRUED THAT THE ASSESSEE HAS E XHAUSTED ONE OF THESE YEARS OUT OF FUTURE CLAIM. THE LD.COUNSEL FOR THE ASSESS EE ALSO RELIED UPON THE DECISION OF ITAT, AHMEDABAD BENCH IN THE CASE OF DE EPKIRAN FOODS P.LTD. VS. ACIT, 141 ITD 0085. HE PLACED ON RECORD COPY O F THIS DECISION. THE FACTS OF THIS CASE ARE QUITE DISTINGUISHABLE. IN T HIS CASE, THE ISSUE WAS SET ASIDE TO THE AO TO FIND OUT WHETHER THE ASSESSEE HAS EARN ED PROFIT ON SALE OF OUTSOURCED ITEMS AND CLAIMED DEDUCTION UNDER SECTIO N 10B OF THE ACT. THE PROFIT DERIVED BY AN ASSESSEE ON SELF-MANUFACTURED ITEM WAS CONSIDERED TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT . NO SUCH CIRCUMSTANCES ARE THERE IN THE PRESENT APPEALS. THEREFORE, IN OU R OPINION, THELD.CIT(A) HAS ERRED IN ALLOWING DEDUCTION TO THE ASSESSEE IN BOTH THESE YEARS. WE SET ASIDE ORDER OF THE LD.CIT(A) AND RESTORE THAT OF THE AO O N THIS ISSUE. ITA NO.559 AND 560/AHD/2011 8 6. AS FAR AS DEDUCTION UNDER SECTION 10B ON THE INT EREST INCOME IS CONCERNED, ONCE WE HAVE HELD THAT THE ASSESSEE IS N OT ENTITLED FOR ANY DEDUCTION UNDER SECTION 10B IN THESE ASSESSMENT YEA RS, THEN, WHETHER THIS CLAIM OF INTEREST INCOME IS ADMISSIBLE OR NOT, WOUL D BE ALTOGETHER AN IRRELEVANT ISSUE. THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION UNDER SECTION 10B OF THE ACT, BECAUSE AT THRESHOLD, TEN YEARS HAV E ALREADY BEEN EXPIRED. IN VIEW OF THE ABOVE DISCUSSION, BOTH THE APPEALS OF T HE REVENUE ARE ALLOWED. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE AL LOWED. ORDER PRONOUNCED IN THE COURT ON 6 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/09/2016