ACIT, Chandigarh V. M/s Bansal Generation Ltd., Chandigarh

ITA 678/CHANDI/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68395 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 678 & 679/CHD/2011 ASSESSMENT YEAR : 2007-08 & 2008-09 A,.C.I.T. C-4(1) V M/S BANSAL GENERATION LTD CHANDIGARH 2332, SECTOR 38-C CHANDIGARH AABCB 8974E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMARVEER SINGH RESPONDENT BY: SHRI AJAY JAIN DATE OF HEARING 17.7.2013 DATE OF PRONOUNCEMENT 2.8.2013 O R D E R PER T.R.SOOD, A.M THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST T HE COMMON ORDER DATED 6.4.2011 OF THE LD. CIT(A), CHAN DIGARH. THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 IN THESE APPEALS THE REVENUE HAS RAISED THE FOLLO WING COMMON GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW T HE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IC OF THE ACT WHEREAS THE ASSESSEE HAS NOT FULFILLED THE CONDITIO NS AS PRESCRIBED BY THE RULES. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT ORIG INALLY DEDUCTION U/S 80IC OF THE ACT WAS DISALLOWED BY THE ASSESSING OFFICER BECAUSE OF THE FOLLOWING REASONS: 1 AUDIT REPORT IN FORM NO. 10 CCB SIGNED MUCH LATE R ON 03.09.2007 2 BILLS OF MACHINERY TO VERIFY AS TO WHETHER THE AS SESSEE HAS NOT INSTALLED OLD MACHINERY MORE THAN 20% OF TO TAL MACHINERY AT NATHUPLASI. 2 3 COLUMN NO. 26 WRT DETAILS OF DEDUCTION UNDER CHAP TER VI IS NOT FILLED BY AUDITOR. 4 STATEMENT OF AUDITOR SH. VINEET AGGARWAL RECORDED ON OATH DURING THE COURSE OF SURVEY & HE HAS STATED ON OATH NO SEPARATE ACCOUNT BOOKS FOR NATHUPLASI UNIT PRODUCED BEFORE HIM FOR ANY ASSESSMENT YEAR FOR AUDIT ONLY CONSOLID ATED ACCOUNTS PRODUCED & AUDITED & NON MAINTENANCE OF SE PARATE BOOKS OF ACCOUNTS FOR EACH UNIT. 5 COMPARATIVE CHART. 6 DIFFERENCE IN NO. OF WORKERS IN THE CERTIFICATE I SSUED BY DIRECTOR INDUSTRIES. 7 TRANSFER OF PLANT & MACHINERY, FINISHED GOODS & TRANSFER OF MATERIAL FROM KURALI UNIT TO NALAGARH U NIT. 8 RAW MATERIAL PURCHASE & NO PRODUCTION DURING FINA NCIAL YEAR 2005-06. 9 NON PRODUCTION OF BOOKS OF ACCOUNTS. 4 HOWEVER, ON APPEAL THE DEDUCTION WAS ALLOWED BY T HE LD. CIT(A). THE MATTER TRAVELED TO THE TRIBUNAL AND TH E TRIBUNAL SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMITTED THE MATTER TO THE TO THE FILE OF LD. CIT(A) VIDE PARA 11 WHICH IS AS UNDER: 11. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND THAT THE CIT(A) NOT TO HAVE COMPLIED WITH THE PROVISIONS REGARDING THE ADMISSION OF ADDITIONAL EVIDENCE. WE ARE NOT IN CONFORMITY WITH THE OBSERVATION OF THE CIT(A) THAT THE ASSESSING OFFICER SHOULD HAVE POINTED OUT SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT AND PAPERS SEIZED DURING THE S URVEY. THE BASIS FOR REJECTION OF THE CLAIM OF THE ASSESSEE BY THE ASSESSING OFFICER WAS NON PRODUCTION OF BOOKS OF AC COUNT AND VARIOUS OTHER INFIRMITIES POINTED OUT BY THE ASSESS ING OFFICER WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80IC OF T HE ACT. THE CIT(A) HAS FAILED TO ADDRESS THE SAME AND ALLOWED T HE CLAIM OF ASSESSEE. THE BOOKS OF ACCOUNT HAVE NOT BEEN VER IFIED BY CIT(A) OR BY ASSESSING OFFICER IN REMAND PROCEEDING S. WE FIND THAT THE CIT(A) HAS FAILED TO CALL FOR ANY REMAND R EPORT. HOWEVER, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) TO REVISIT THE ISSUE AFTER CALLING FOR A REMAND REPORT AND ALSO AFTER DIRECTIN G THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESS EE VIS--VIS BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE CI T(A) SHALL CALL FOR THE REMAND REPORT FROM THE ASSESSING OFFICER IN THIS REGARD AND AFTER AFFORDING A REASONABLE OPPORT UNITY OF HEARING TO THE ASSESSEE, DECIDE THE ISSUE DE NOVO. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS AL LOWED FOR STATISTICAL PURPOSES. 3 ON THE BASIS OF ABOVE THE CASE WAS REFIXED AGAIN B Y THE LD. CIT(A). THE ASSESSEE MADE DETAILED SUBMISSIONS WHI CH WERE SENT TO THE ASSESSING OFFICER FOR FILING A REMAND R EPORT. THE REMAND REPORT WAS FILED ON 30.3.2011. ON THE BASIS OF ABOVE REPORT THE LD. CIT(A) OBSERVED THAT THE ASSESSING O FFICER HAD EXAMINED VARIOUS DETAILS AND IT WAS ADMITTED BY TH E ASSESSING OFFICER THAT SEPARATE BOOKS OF ACCOUNTS HAD BEEN MA INTAINED BY THE ASSESSEE, THEREFORE, OBJECTION THAT UNIT IS NOT ELIGIBLE IN THE ABSENCE OF SEPARATE BOOKS OF ACCOUNT, WAS NOT S USTAINABLE. AFTER CONSIDERING THE SUBMISSIONS THE LD. CIT(A) DE CIDED THE ISSUE VIDE PARA 10 AND 11 WHICH ARE AS UNDER: 10. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, ITA NO. 924/CHD/2010, REMAND REPORT AND WRITTEN SUBMISSIONS FILED BY THE APPELLANT. MY FINDINGS ARE AS FOLLOWS:- 1. THE ASSESSING OFFICER HAS EXAMINED THE BOOKS OF ACCOUNT OF NATHU PLASI, NALAGARH UNIT WHICH IS ELIGIBLE FOR DE DUCTION U/S 80IC. 2. NO DISCREPANCY WAS OBSERVED BY THE AO IN THE BOO KS OF ACCOUNTS AND OTHER DETAILS LIKE VOUCHERS OF PLANT & MACHINERY AND EXPENSES. 3. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DE FECT IN THE REMAND REPORT EXCEPT THAT THE APPELLANT HAS DONE AS SEMBLING OF DISTRIBUTION TRANSFORMER AND LITTLE MANUFACTURIN G. 4. THE ASSESSING OFFICER HAS NOT BROUGHT ANY NEW FA CTS AFTER EXAMINATION OF BOOKS OF ACCOUNTS PRODUCED IN REMAND PROCEEDINGS RELATING TO COMPARISON BETWEEN ELIGIBLE UNIT AND NON ELIGIBLE UNIT AND HE ONLY REFERRED THE PARA 7 A ND 8 OF ASSESSMENT ORDER PASSED BY HIS PREDECESSOR. THE OBJ ECTION ON THIS ISSUE HAS BEEN DISCUSSED IN MY EARLIER ORDE R & IN REMAND PROCEEDINGS & THE EXPLANATION OF APPELLANT W AS NOT REBUTTED. 5. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SP ECIFIC DOCUMENT WHICH WAS IMPOUNDED DURING THE COURSE OF S URVEY AND WHICH SHOWS THAT THE ASSESSEE HAD TRANSFERRED T HE PLANT & MACHINERY, FINISHED GOODS AND TRANSFERRED THE MATER IAL FROM KURALI UNIT TO BADDI UNIT. HE SIMPLY REPRODUCED THE OBSERVATION GIVEN BY HIS PREDECESSOR IN THE ASSESSMENT ORDER AN D HE HAS NOT EVEN GIVEN ANY OBSERVATION IN RESPECT OF THE IM PACT OF SUCH TRANSFER ON THE PROFITS OF ELIGIBLE UNITS. 4 6. THE ASSESSING OFFICER HAS ALSO NOT POINTED OUT A NY CONDITION MENTIONED IN SECTION 80IC WHICH REMAINED UNFULFILLE D BY THE ELIGIBLE UNIT EXCEPT HIS OBSERVATION W.R.T ASSEMBLI NG OF DISTRIBUTION TRANSFORMER IN ELIGIBLE UNIT. I HAVE G ONE THROUGH THE SUBMISSION OF APPELLANT WITH RESPECT TO THE ACT IVITIES UNDERTAKEN BY THE APPELLANT IN ELIGIBLE UNIT & FOUN D THAT THE APPELLANT WAS USING MORE THAN 50 RAW MATERIAL / COM PONENTS & TRANSFORMERS ARE MANUFACTURED AS PER SPECIFICATION GIVEN BY VARIOUS ELECTRICITY BOARDS & IT IS ALSO CLEAR FROM THE MANUFACTURING PROCESS THAT IT RESULTED IN AN ARTICL E DISTINCT IN NAME, CHARACTER & USE. THE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE FOLLOWING DECISIONS UPHELD THE AS SEMBLY AS MANUFACTURE BEING ASSEMBLY RESULTING IN AN ARTICLE DISTINCT IN NAME, CHARACTER & USE: * CIT VS MAHESH CHANDRA SHARMA 308 ITR 222 (P& H) * CIT VS ANAND AFFILIATES 178 TAXMAN 487 (P&H) 11. IN VIEW OF MANUFACTURING PROCESS FURNISHED BY T HE APPELLANT & HONBLE PUNJAB & HARYANA HIGH COURT DEC ISIONS CITED SUPRA 1 UPHOLD THAT THE APPELLANT IS ENGAGED IN MANUFACTURING ACTIVITIES & ELIGIBLE FOR DEDUCTION U NDER SECTION 80 IC OF THE ACT. AS SUCH IN VIEW OF THE ABOVE DISC USSION AND FINDINGS OF THE ASSESSING OFFICER REGARDING THE ELI GIBILITY OF THE UNIT U/S 80IC, THE APPEAL IS ALLOWED. 5 BEFORE US, THE LD. DR FOR THE REVENUE SUPPORTED T HE ORDER OF THE ASSESSING OFFICER AND RELIED ON THE GROUNDS OF APPEAL. 6 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSE E REFERRED TO THE CONTENTS OF REMAND REPORT AT PAGE 6 1 TO 64 OF THE PAPER BOOK. HE CONTENDED THAT THESE CONTENTS C LEARLY SHOWS THAT HE ASSESSING OFFICER WAS SATISFIED MORE OR LESS REGARDING ALLOWABILITY OF DEDUCTION. HE ALSO SUPPOR TED THE IMPUGNED ORDER. 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT PURSUANCE OF REMAND REPORT SHOWS THAT ALL THE DETAI LS WERE FURNISHED BEFORE THE ASSESSING OFFICER ON 28.3.2011 AND THE BOOKS OF ACCOUNT ALONG WITH VOUCHERS WERE ALSO PROD UCED BEFORE HIM. IT HAS BEEN SPECIFIED AT PARA 6 OF THE REMAND REPORT THAT BOOKS OF ACCOUNTS OF NATHU PLASI, NALAG ARH WERE VERIFIED THAT SEPARATE BOOKS OF ACCOUNT HAVE BEEN M AINTAINED. 5 ONLY OBJECTION WHICH HE HAS RAISED REGARDING DENIAL OF DEDUCTION THAT SOME OF THE COMPONENTS HAVE BEEN PUR CHASED FROM OUTSIDE AND THE PROFIT OF THE ELIGIBLE UNIT AR E ON HIGHER SIDE. WE FIND NO FORCE IN THE SUBMISSIONS BECAUSE IT WAS NOT DENIED THAT THE ASSESSEE WAS MANUFACTURING THE TRAN SFORMERS AND SOME COMPONENTS WERE PURCHASED FROM THE MARKET. IT CAN NOT BE ACCEPTED THAT THE ASSESSEE SHOULD BE MANUFAC TURING ALL THE COMPONENTS. FURTHER MERELY SHOWING THAT THAT T HE PROFITS ARE ON HIGHER SIDE, IS NOT SUFFICIENT AND NO DEFECT S ARE POINTED OUT AND THEREFORE DEDUCTION CANNOT BE DENIED. THER EFORE, IN OUR OPINION, THE LD. CIT(A) HAS CORRECTLY ADJUDICAT ED THE ISSUE AND WE FIND NOTHING WRONG IN HIS ORDER AND CONFIRM THE SAME. 8 IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 2.8.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2.8.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR