M/s Mithila Malleables Private Limited, Mandi Gobindgarh V. CIT, Ludhiana

ITA 680/CHANDI/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1562 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Business income; Depreciation; Income from undisclosed sources; Opportunity of being heard; Period of limitation
• Section: 43B; 143(3); 80HHC; 133A; 80IB; 147; 263; 11; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 679/CHD/2013 ASSESSMENT YEAR: 2009-10 M/S A.S. PRECISION MACHINES P.LTD., VS THE CIT. G.T. ROAD, CENTRAL, MANDI GOBINDGARH. LUDHIANA. PAN: AABCA4598B & ITA NO. 680/CHD/2013 ASSESSMENT YEAR: 2009-10 M/S MITHILA MALLEABLES P.LTD., VS THE CIT. VILLAGE HARBANSPURA, CENTRAL, SIRHIND SIDE, LUDHIANA. MANDI GOBINDGARH. PAN: AABCM9421B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK AGGAR WAL RESPONDENT BY : DR. AMAR VEER SINGH DATE OF HEARING : 28.07.2015 DATE OF PRONOUNCEMENT : 03.08.2015 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OF BOTH THE APPEALS FILED BY DIFFERENT ASSESSEES CHALLENGING THE ORDER OF LD. COMMISSIONER OF INCOME TAX(CENTRAL) LUDHIANA DATED 20.03.2013 UNDER SECTION 263 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 2009-10. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUES ARE SAME IN BOTH THE APPEALS AND HAS MAINLY ARGUED IN ITA 679/2013 AND S TATED THAT ORDER IN THIS CASE MAY BE FOLLOWED IN ITA 680/ 2013. ITA 679/CHD/2013 (M/S A.S.PRECISION MACHINES P.LTD.) 3. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS C ASE ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 29.10.2010 AT AN INCOME OF RS. 7,02,83, 440/- AGAINST THE RETURNED INCOME OF RS. 7,02,02,910/-. THE LD. COMMISSIONER OF INCOME TAX, ON PERUSAL OF THE RECOR D FOUND THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF REVENUE AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE WHICH IS REPRODUCED IN THE IMPUGNED ORDER. THE LD. COMMISSIONER OF INCOME TAX IN THE NOTICE NO TED THAT ASSESSEE HAS BEEN ALLOWED DEDUCTION UNDER SECT ION 80IB OF THE ACT ON JOB WORK CHARGES OF RS. 9,32,736 /-. THE AMOUNT RECEIVED ON ACCOUNT OF JOB WORK IS NOT A RES ULT OF MANUFACTURING OR PRODUCING ARTICLES OR THINGS AND THEREFORE, ASSESSEE IS NOT ENTITLED TO CLAIM OF DED UCTION UNDER SECTION 80IB OF THE INCOME TAX ACT. THE DECI SION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF FRIENDS CASTING PVT. LTD. 50 DTR 61 WAS RELIED UPON . IT WAS ALSO NOTED THAT SURVEY UNDER SECTION 133A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE AND DURING THE COURSE OF SURVEY, CERTAIN INCRIMINATING 3 DOCUMENTS RELATING TO LOANS AND ADVANCES WERE FOUND . THE ASSESSEE, ACCORDINGLY SURRENDERED A SUM OF RS. 6 CR ORES TO COVER UP THESE DISCREPANCIES. THE ASSESSEE HAS BEE N ALLOWED DEDUCTION UNDER SECTION 80IB ON AN INCOME O F RS. 6 CRORES ACCEPTING THE CLAIM OF ASSESSEE THAT THE I NCOME SURRENDERED DURING THE COURSE OF SURVEY IS ELIGIBLE BUSINESS INCOME. PERUSAL OF SCHEDULE VII TO PROFIT & LOSS ACCOUNT REVEALED THAT ASSESSEE HAS DECLARED INCOME OF RS. 6 CRORES AS BUSINESS ADVANCES WRITTEN OFF. SECTION 80IB OF THE ACT RELATES TO THE DEDUCTION IN RESPECT OF PROF IT AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKING. IT IS W ELL SETTLED PROPOSITION THAT INCOMES ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 80IB ARE ONLY SUCH PROFITS AND GAINS OF BUSINESS AS COULD BE SAID TO HAVE BEEN DER IVED FROM SUCH ELIGIBLE INDUSTRIAL UNDERTAKING. REFEREN CE WAS MADE OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF STERLING FOODS 237 ITR 579 AS ALSO VALLORE ELECTRIC CORPORATION 227 ITR 557 IN WHICH IT HAS BEEN HELD T HAT DIRECT NEXUS BETWEEN THE INCOME EARNED AND INCOME QUALIFIED FOR DEDUCTION SHOULD BE ESTABLISHED. HON' BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS VS CIT IN 228 ITR 18 HAS HELD THAT T HE DEDUCTION UNDER SECTION 80HHC OF THE ACT IS AVAILAB LE ON SHOWING FULFILLMENT OF THE CONDITIONS PRESCRIBED AN D THAT THERE CAN BE NO PRESUMPTION THAT SURRENDERED INCOME ON ACCOUNT OF UNEXPLAINED STOCKS REPRESENTED EXPORT IN COME. 4. THE LD. COMMISSIONER OF INCOME TAX ALSO REFERR ED TO ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S 4 SANGEETA TOOLS PVT. LTD. ON THE PROPOSITION THAT AS SESSEE SHOULD PROVE THAT SUCH INCOME WAS DERIVED FROM INDU STRIAL UNDERTAKING, THEREFORE, WAS OF THE VIEW THAT SURREN DERED INCOME WOULD NOT QUALIFY FOR DEDUCTION UNDER SECTIO N 80IB OF THE ACT ON THE FOLLOWING GROUNDS : I) SURRENDERED INCOME IS TREATED AS UNDISCLOSED INCOME FROM OTHER SOURCES. II) THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE SOURCE OF UNACCOUNTED INCOME INVESTED IN ADVANCES WHICH WERE WRITTEN OFF HAD ANY NEXUS IN THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE. III) NEITHER DURING THE COURSE OF SURVEY NOR DURING ASSESSMENT PROCEEDINGS, ANY DOCUMENTARY EVIDENCE HAS BEEN FAILED WHICH ESTABLISHES THAT THE INCOME OF RS. 6 CRORES HAS BEEN EARNED THROUGH MANUFACTURING ACTIVITIES ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB. IV) THE ASSESSEE HAS FAILED TO ESTABLISH THAT ADVANCES FORFEITED WITH THE AMOUNT OF RS. 6 CRORE HAVE BEEN RAISED DURING THE YEAR IN WHICH THE DEDUCTION UNDER SECTION 80IB HAS BEEN CLAIMED. 5. THE ORDER OF THE ASSESSING OFFICER WAS, THEREFOR E, FOUND TO BE PRIMA FACIE ERRONEOUS IN SO FAR AS PREJ UDICIAL TO THE INTEREST OF REVENUE. THE EXPLANATION OF THE ASSESSEE WAS CALLED FOR. THE ASSESSEE FILED THE SUBMISSIONS BEFORE LD. COMMISSIONER OF INCOME TAX. 6. THE LD. COMMISSIONER OF INCOME TAX, CONSIDERING THE MATERIAL ON RECORD AND SUBMISSIONS OF THE ASSESSEE, NOTED THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER S ECTION 80IB OF THE ACT ON SURRENDERING UNDISCLOSED INCOME. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY IN THIS REGARD AND HAS NOT DISALLOWED THE DEDUCTION UNDER SECTION 80IB 5 ON THE AFORESAID SURRENDERED INCOME. THE ASSESSING OFFICER HAS ALSO NOT EXAMINED THE DEDUCTION UNDER S ECTION 80IB ON JOB WORK CHARGES. THE LD. COMMISSIONER OF INCOME TAX, IN SUPPORT OF THE PROPOSITION THAT ASSE SSMENT MADE WITHOUT MAKING PROPER ENQUIRY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, RELIED UPON SEVERAL DECISIONS IN THE IMPUGNED ORDER INCLUDING OF DECISI ON OF VARIOUS BENCHES OF THE TRIBUNAL AND DIFFERENT HIGH COURTS. THE LD. COMMISSIONER OF INCOME TAX, CONSIDERING THE MATERIAL ON RECORD FOUND THAT ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRY AND HAS NOT VERIFIED THE CORREC TNESS AND GENUINENESS OF THE CLAIM OF THE ASSESSEE AND NO FACTS HAVE BEEN ANALYZED. THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER WAS WITHOUT PROPER VERIFICATION O F THE DETAILS AND THE SEIZED MATERIAL AND NO INVESTIGATIO NS HAVE BEEN DONE. IT WAS ALSO NOTED THAT IT IS NOT A CASE WHERE ASSESSING OFFICER HAS ADOPTED ONE POSSIBLE VIEW. T HE ASSESSING OFFICER HAS SUMMARILY FAILED TO TAKE PROP ER COGNIZANCE OF THE SEIZED MATERIAL AND HAS FAILED TO APPLY MIND TO THE FACTS AND DID NOT CONDUCT PROPER ENQUIR Y. THE ORDER PASSED BY THE ASSESSING OFFICER WAS THUS, FOU ND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE. THE LD. COMMISSIONER OF INCOME TAX, EVEN ON MERITS FOUND THAT DURING THE COURSE OF SURVEY, CERTAIN INCRIMINA TING MATERIAL WAS FOUND AGAINST ASSESSEE ON WHICH ASSESS EE SURRENDERED RS. 6 CRORES. THE ASSESSEE, LATER ON H AS BEEN ALLOWED DEDUCTION UNDER SECTION 80IB ON THE SURREN DERED INCOME OF RS. 6 CRORES. THE PERUSAL OF THE ACCOUNT S 6 REVEALED THAT ASSESSEE HAS DECLARED INCOME OF RS. 6 CRORES AS BUSINESS ADVANCES WRITTEN OFF. THE LD. COMMISSI ONER OF INCOME TAX FOUND THAT THE ADDITIONAL INCOME OF R S. 6 CRORE HAS BEEN CREDITED AS BUSINESS ADVANCES FORFEI TED ON WHICH DEDUCTION UNDER SECTION 80IB OF THE ACT IS NO T PERMISSIBLE BECAUSE DEDUCTION UNDER SECTION 80IB IS ELIGIBLE ON THE INCOME OF INDUSTRIAL UNDERTAKING ON FULFILLMENT OF CERTAIN CONDITIONS. IN THE CASE OF THE ASSESSEE, ASSESSEE HAS FAILED TO PROVE THE CONDITIO NS OF SECTION 80IB OF THE ACT FOR CLAIMING DEDUCTION ON T HE SURRENDERED INCOME. 6(I) THE LD. COMMISSIONER OF INCOME TAX RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS 288 ITR 18 IN W HICH IT WAS HELD THAT DEDUCTION UNDER SECTION 80HHC OF T HE ACT IS AVAILABLE ON SHOWING FULFILLMENT OF THE CONDITIO NS PRESCRIBED AND THERE COULD BE NO PRESUMPTION THAT T HE SURRENDERED INCOME ON ACCOUNT OF UNEXPLAINED STOCKS REPRESENTED EXPORT INCOME. THE LD. COMMISSIONER OF INCOME TAX, THEREFORE, FOUND THAT DEDUCTION UNDER S ECTION 80IB IS NOT AVAILABLE TO THE ASSESSEE ON UNDISCLOSE D INCOME FROM OTHER SOURCES AND ASSESSEE FAILED TO ES TABLISH THAT SOURCE OF UNACCOUNTED INCOME INVESTED IN ADVAN CES WHICH WERE WRITTEN OFF, HAD ANY NEXUS WITH THE INDU STRIAL UNDERTAKING OF THE ASSESSEE. DURING THE COURSE OF SURVEY OR ASSESSMENT PROCEEDINGS, NO DOCUMENTARY EVIDENCE WAS FOUND TO ESTABLISH THAT INCOME OF RS. 6 CRORES WAS EARNED 7 THROUGH MANUFACTURING ACTIVITIES SO AS TO QUALIFY F OR DEDUCTION UNDER SECTION 80IB. THE ASSESSING OFFICE R HAS WRONGLY ALLOWED DEDUCTION UNDER SECTION 80IB OF THE ACT ON SURRENDERED INCOME WITHOUT MAKING ANY ENQUIRY ON THE SAME. THEREFORE, ON MERIT ALSO, IT WAS FOUND THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. COMMISSIONER OF INCOME TAX, WITH REGARD TO DEDUCTIO N UNDER SECTION 80IB ON JOB WORK ALSO NOTED THAT CLAI M IS ALLOWED BY THE ASSESSING OFFICER WITHOUT VERIFYING THE FACT AND WITHOUT MAKING ANY ENQUIRY. THE LD. COMMISSION ER OF INCOME TAX ALSO FOUND THAT PROVISION OF SECTION 41(1) OF THE ACT IS ALSO NOT APPLICABLE IN THE CASE OF THE A SSESSEE. THE LD. COMMISSIONER OF INCOME TAX, THEREFORE, SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFF ICER TO MAKE THE ASSESSMENT AFRESH DENOVO AFTER PROPERLY EXAMINING THE ISSUE AND CONDUCTING PROPER ENQUIRY B Y GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. THE ASSESSEE IS IN APPEAL AND IN THE GROUND OF APPEAL, ASSESSEE CHALLENGED THAT THE REVISION ORDER IS BARRED BY LIMITATION AND THAT ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IB ON THE SURRENDERED INC OME AS WELL AS ON JOB WORK. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSMENT ORDER WAS PASSED ON 29.10.2010 AND THE O RDER UNDER SECTION 263 HAS BEEN PASSED ON 20.03.2013. 8 HOWEVER, THE IMPUGNED ORDER WAS DISPATCHED ON 04.04.2013 AND RECEIVED BY ASSESSEE ON 06.04.2013. HE HAS, THEREFORE, SUBMITTED THAT REVISION ORDER IS BA RRED BY LIMITATION. HE HAS, HOWEVER, ADMITTED THAT THE LAS T DATE OF PASSING OF THE REVISION ORDER WAS 31.03.2013. 9. THE LD. DR CONTENDED THAT THE ONLY REQUIREMENT O F THE LAW WAS TO PASS THE REVISION ORDER WITHIN TWO Y EARS WHICH IS PASSED BY THE LD. COMMISSIONER OF INCOME T AX IN THIS CASE. THERE IS NO REQUIREMENT TO DISPATCH THE ORDER WITHIN THAT PERIOD ITSELF. 10. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE A RE OF THE VIEW THIS GROUND OF APPEAL OF THE ASSESSEE HAS NO MERIT. SECTION 263(2) OF THE ACT PROVIDES THAT NO ORDER SH ALL BE MADE UNDER SUB SECTION (1) AFTER EXPIRY OF TWO YEAR S FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SO UGHT TO REVISED WAS PASSED. IN THIS CASE, THE ASSESSMENT O RDER WAS PASSED ON 29.10.2010 WHICH WAS SOUGHT TO BE REVISED . THEREFORE, AFTER END OF THE FINANCIAL YEAR, THE ORD ER COULD HAVE BEEN PASSED UPTO 31.03.2013, WHICH IS ALSO ADM ITTED BY LD. COUNSEL FOR THE ASSESSEE. IN THE CASE OF AS SESSEE, THE ORDER UNDER SECTION 263 OF THE ACT HAS BEEN PASSED ON 20.03.2013, THEREFORE, SAME IS PASSED BY THE LD. COMMISSIONER OF INCOME TAX WITHIN THE PERIOD OF LIM ITATION. THERE IS NO REQUIREMENT UNDER THE LAW TO DISPATCH T HE ORDER WITHIN PERIOD OF LIMITATION ITSELF. THE HON'BLE SU PREME COURT IN THE CASE OF R.K. UPADHYAYA VS SHANABHAI P. PATEL 166 ITR 163 HELD THAT ISSUE OF NOTICE UNDER SECTION 147 9 WITHIN THE PERIOD OF LIMITATION. SERVICE ON ASSESS EE BEYOND PERIOD. ASSESSMENT VALID. THIS CONTENTION OF LD. COUNSEL FOR THE ASSESSEE HAS NO MERIT AND IS ACCORDINGLY RE JECTED BECAUSE SERVICE OF THE IMPUGNED ORDER IS NOT A COND ITION PRECEDENT WITHIN THE PERIOD SO PRESCRIBED. THE ORD ER SHALL HAVE TO BE PASSED WITHIN THE PERIOD OF LIMITATION W HICH IS SO IN THE CASE OF THE ASSESSEE. THIS GROUND OF APP EAL OF THE ASSESSEE IS ACCORDINGLY REJECTED. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IB ON SURRENDERED INCOME AS WELL AS ON JOB WORK AND ASSES SING OFFICER AFTER MAKING PROPER ENQUIRY GRANTED RELIEF TO THE ASSESSEE AT ASSESSMENT STAGE. THE LD. COUNSEL FOR THE ASSESSEE HAS, HOWEVER, NOT BEEN ABLE TO PLACE ON RE CORD ANY QUERY LETTER ISSUED BY THE ASSESSING OFFICER WITH R EGARD TO DEDUCTION UNDER SECTION 80IB OR ANY REPLY FILED BEF ORE ASSESSING OFFICER IN THIS REGARD. THE LD. COUNSEL FOR THE ASSESSEE ULTIMATELY SUBMITTED THAT THE DIRECTIONS M AY BE ISSUED TO THE LD. COMMISSIONER OF INCOME TAX TO CON SIDER THE PLEA OF THE ASSESSEE ON MERIT. ON THE OTHER HA ND, LD. DR SUBMITTED THAT ASSESSING OFFICER HAS NOT MADE AN Y ENQUIRY ON BOTH THE ISSUES AND NO INCOME IS DERIVED FROM ANY BUSINESS OR INDUSTRIAL UNDERTAKING ON WHICH SUR RENDER WAS MADE AS WELL AS JOB INCOME WAS SHOWN. THEREFOR E, WHEN ASSESSING OFFICER FAILED TO MAKE ENQUIRY ON BO TH THE ASPECTS, LD. COMMISSIONER OF INCOME TAX WAS JUSTIFI ED IN 10 HOLDING THAT ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 12. THE LD. DR ALSO SUBMITTED THAT LD. COMMISSIONER OF INCOME TAX IS BOUND BY THE JUDGEMENT OF HON'BLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS 288 ITR 18 DIRECTLY APPLICABLE IN THIS ISSUE. THE LD. DR RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF ARUN LUTHRA 252 ITR 76 ON THE PROPOSITION OF DECISION OF THE JURISDICTIONAL HIGH COURT ARE BINDING ON ALL THE SUBORDINATE AUTHORITIES. 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS NO T IN DISPUTE THAT DURING THE COURSE OF SURVEY CONDUCTED IN THE PREMISES OF ASSESSEE ON 24.07.2008, CERTAIN INCRIMI NATING DOCUMENTS WERE FOUND RELATING TO LOAN AND ADVANCES. THE ASSESSEE SURRENDERED A SUM OF RS. 6 CRORE TO COVER UP THESE DISCREPANCIES. THE ACCOUNTS OF THE ASSESSEE REVEALED THAT ASSESSEE HAD DECLARED INCOME OF RS. 6 CRORE AS BUSINESS ADVANCES WRITTEN OFF. HON'BLE PUNJAB & HA RYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS ( SUPRA) HELD THAT THE DEDUCTION UNDER SECTION 80HHC OF THE ACT IS AVAILABLE ON SHOWING FULFILLMENT OF THE CONDITIONS PRESCRIBED AND THAT THERE COULD BE NO PRESUMPTION T HAT SURRENDERED INCOME ON ACCOUNT OF UNEXPLAINED STOCKS REPRESENTED EXPORT INCOME. THE ASSESSEE, HOWEVER, CLAIMED DEDUCTION UNDER SECTION 80IB ON INCOME OF RS. 6 CRO RE SO SURRENDERED DURING THE COURSE OF SURVEY. IT IS INT ERESTING TO NOTE THAT DESPITE IT IS A CASE OF SURVEY UNDER S ECTION 11 133A CONDUCTED AGAINST THE ASSESSEE AND FINDING INCRIMINATING MATERIAL AGAINST THE ASSESSEE DURING THE COURSE OF SURVEY, THE ASSESSING OFFICER HAS EVEN FA ILED TO MENTION THIS FACT IN THE ASSESSMENT ORDER THAT IT I S A CASE OF SURVEY AND DURING THE COURSE OF SURVEY, INCRIMIN ATING MATERIAL WAS FOUND AGAINST THE ASSESSEE. THE ASSES SING OFFICER HAS NOT DISCUSSED ANYTHING IN THE ASSESSMEN T ORDER IF HE HAS CONDUCTED ANY ENQUIRY OR INVESTIGATION WI TH REGARD TO MATERIAL FOUND AGAINST THE ASSESSEE DURIN G THE COURSE OF SURVEY. THE ASSESSING OFFICER HAS ALSO F AILED TO MAKE ANY ENQUIRY OR INVESTIGATION WITH REGARD TO CL AIM OF DEDUCTION UNDER SECTION 80IB MADE BY ASSESSEE ON SURRENDERED INCOME AND INCOME ON JOB CHARGES AT THE ASSESSMENT STAGE. THE LD. COUNSEL FOR THE ASSESSEE HAS SHOWN HIS INABILITY TO PRODUCE ANY QUERY LETTER ISS UED BY THE ASSESSING OFFICER AT ASSESSMENT STAGE FOR INVES TIGATING OR CONDUCTING ANY ENQUIRY WITH REGARD TO CLAIM OF DEDUCTION UNDER SECTION 80IB ON SURRENDERED INCOME OF RS. 6 CRORE OR ON JOB CHARGES. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO SHOWN INABILITY TO PRODUCE ANY REPLY FILED BEFORE ASSESSING OFFICER FOR MAKING CLAIM OF DEDUCTION UND ER SECTION 80IB ON THE SURRENDERED INCOME AS WELL AS O N JOB CHARGES BY FULFILLING CONDITIONS OF SECTION 80IB. IT WOULD, THEREFORE, REVEAL THAT ASSESSING OFFICER DID NOT MA KE ANY ENQUIRY OR INVESTIGATION AT ASSESSMENT STAGE SO AS TO QUALIFY DEDUCTION UNDER SECTION 80IB OF THE ACT TO THE ASSESSEE ON SURRENDERED INCOME AS WELL AS ON JOB CH ARGES. THE ACCOUNTS OF THE ASSESSEE REVEALED THAT ASSESSEE 12 DECLARED INCOME OF RS. 6 CRORES AS BUSINESS ADVANCE S WRITTEN OFF, THEREFORE, IT COULD NOT BE SAID TO HAV E ANY NEXUS WITH THE INDUSTRIAL UNDERTAKING OF THE ASSESS EE. THE SURRENDERED INCOME WAS, THEREFORE, UNDISCLOSED INCO ME FROM OTHER SOURCES AND ASSESSEE FAILED TO ESTABLISH THAT SOURCE OF UNACCOUNTED INCOME INVESTED IN ADVANCES W HICH WERE WRITTEN OFF HAD ANY NEXUS WITH THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE. THE ASSESSEE, DURING THE COURSE OF SURVEY AS WELL AS ASSESSMENT PROCEEDINGS HAVE NOT FILED ANY DOCUMENTARY EVIDENCE TO ESTABLISH THA T INCOME OF RS. 6 CRORE HAS BEEN EARNED THROUGH MANUFACTURING ACTIVITIES ELIGIBLE FOR DEDUCTION UND ER SECTION 80IB OF THE ACT. THUS, THE ASSESSING OFFIC ER HAS FAILED TO MAKE ANY ENQUIRY OR INVESTIGATION ON CLAI M OF ASSESSEE OF DEDUCTION UNDER SECTION 80IB AT THE ASSESSMENT STAGE ON THE ABOVE SURRENDERED INCOME AS WELL AS ON JOB CHARGES. IT IS WELL SETTLED LAW THAT FAI LURE BY THE ASSESSING OFFICER TO MAKE ENQUIRY AT ASSESSMENT STA GE WOULD RENDER HIS ORDER TO BE ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF REVENUE AND JURISDICTION UNDER SECT ION 263 OF THE ACT HAVE BEEN PROPERLY EXERCISED BY THE LD. COMMISSIONER OF INCOME TAX. WE RELY UPON DECISION OF THE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES 99 ITR 375, DECISION OF GAUHATI HIGH COURT IN THE CASE OF TARZEN TEA COMPANY PVT. LTD. 205 ITR 45 AND DECISION OF MA DRAS HIGH COURT IN THE CASE OF K.A. RAMASWANI CHETTIAR 2 20 ITR 657. THE LD. COMMISSIONER OF INCOME TAX ALSO RELIE D UPON SEVERAL DECISIONS IN THE IMPUGNED ORDER IN SUPPORT OF HIS 13 FINDINGS THAT FAILURE TO MAKE ENQUIRY BY THE ASSESS ING OFFICER AT ASSESSMENT STAGE WOULD RENDER THE ASSESS MENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE. THE DECISION OF THE HON'BLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS ( SUPRA) SQUARELY APPLY AGAINST THE ASSESSEE AND THE FAILURE TO CONSIDER DECISION OF JURISDICTIONAL HIGH COURT ITSE LF WOULD SUPPORT THE FINDINGS OF THE LD. COMMISSIONER OF INC OME TAX THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. 14. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT ASSESSING OFFICER H AS PASSED THE ASSESSMENT ORDER WITHOUT CONDUCTING ENQUIRY AND INVESTIGATION ON THE ABOVE ISSUES AND HAS ALLOWED C LAIM OF ASSESSEE UNDER SECTION 80IB OF THE ACT WITHOUT MAKI NG ANY ENQUIRY AND INVESTIGATION. THEREFORE, THE ORDER WA S CORRECTLY TREATED AS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. THE LD. CIT WAS, THEREFORE, J USTIFIED IN SETTING ASIDE THE ASSESSMENT ORDER AND DIRECTING TH E ASSESSING OFFICER TO PASS THE ASSESSMENT ORDER AFRE SH DENOVO BY GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THIS VIEW OF THE MATTER, NO FURTHER DI RECTIONS ARE REQUIRED TO THE LD. COMMISSIONER OF INCOME TAX IN THE MATTER AS IS ARGUED BY LD. COUNSEL FOR THE ASSESSEE . THE APPEAL OF THE ASSESSEE HAS THUS NO MERIT. THE SAME IS ACCORDINGLY, DISMISSED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. 14 ITA 680/CHD/2013 (M/S MITHILA MALLEABLES P.LTD.) 16. IN THIS APPEAL ALSO, THE FACTS ARE SAME AS HAVE BEEN CONSIDERED IN ITA 679/CHD/2013. THE ASSESSEE IN TH E GROUND OF APPEAL ALSO CHALLENGED THE REVISIONAL ORD ER TO BE TIME BARRED AND DEDUCTION CLAIMED UNDER SECTION 80I B OF THE ACT ON SURRENDERED INCOME AS WELL AS ON JOB CHA RGES. THE ASSESSEE ALSO RAISED OTHER GROUNDS WITH REGARD TO DEDUCTION CLAIMED UNDER SECTION 80IB ON INTEREST ON FDR, INTEREST FROM SUNDRY DEBTORS, INTEREST FROM METER S ECURITY DEPOSIT, EXCESS ALLOWANCES OF DEPRECIATION, ALLOWAN CE OF BONUS PAYABLE UNDER SECTION 43B AND DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) OF THE ACT. THE FINDINGS OF LD. COMMISSIONER OF INCOME TAX ARE ALSO SAME AS HAV E BEEN CONSIDERED ABOVE. HOWEVER, WITH REGARD TO OTH ER MINOR ISSUES OF CLAIM OF DEDUCTION UNDER SECTION 80 IB, THE LD. COMMISSIONER OF INCOME TAX NOTED THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IB ON THESE ITEMS BECAUSE CONDITIONS OF SECTION 80IB ARE NOT SATISFIE D AND THAT THE ISSUES HAVE NOT BEEN PROPERLY VERIFIED BY THE ASSESSING OFFICER. THE ASSESSMENT ORDER WAS, THERE FORE, SET ASIDE AND ASSESSING OFFICER WAS DIRECTED TO VER IFY ALL THE FACTS AND PASS REASONED ORDER. IN THIS CASE AS SESSING OFFICER PASSED THE ASSESSMENT ORDER WITHOUT MENTION ING ANYTHING IN THE ASSESSMENT ORDER. NO QUERY LETTER ISSUED BY ASSESSING OFFICER OR REPLY FILED BY THE ASSESSEE HAVE BEEN PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSE SSEE SHOWN HIS INABILITY TO PRODUCE ANY MATERIAL BEFORE US TO 15 SHOW THAT ASSESSING OFFICER MADE ANY ENQUIRY OR INVESTIGATION ON ALL THE ABOVE ISSUES ON WHICH GROU NDS OF APPEAL HAVE BEEN RAISED. THEREFORE, AS ADMITTED BY BOTH THE PARTIES, ISSUES ARE SAME AS HAVE BEEN CONSIDERE D IN ITA 679/2013, WE FOLLOWING THE REASONS FOR DECISION IN ITA 679/2013, DO NOT HAVE ANY MERIT IN APPEAL OF THE AS SESSEE. THE SAME IS ACCORDINGLY, DISMISSED. 17. IN THE RESULT, BOTH APPEALS FILED BY DIFFERENT ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD AUGUST,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH