APAR INDUSTRIES LTD, MUMBAI V. ACIT CEN CIR 34, MUMBAI

ITA 7029/MUM/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0818 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Keywords: Capital asset; Additional evidence; Corroborative evidences
• Section: 143(3); 14A; 115JB; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 M/S. APAR INDUSTRIES LTD., APAR HOUSE, CORPORATE PARK, BLDG. NO.5, SION TROMBAY ROAD, CHEMBUR, MUMBAI 400 071 / VS. THE ACIT, CEN. CIR.- 34, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 ./ ./ PAN/GIR NO. : AAACG 1840M ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI VIJAY MEHTA RESPONDENT BY SHRI SANJAY SINGH ' #$ / DATE OF HEARING : 2/07/2015 ' #$ / DATE OF PRONOUNCEMENT : 31/07/2015 / O R D E R PER G.S.PANNU, A.M: THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE AND IS DIRECTED AGAINST THE IMPUGNED APPELLATE ORDER DATED 01/08/2011 PAS SED BY LD. CIT(A)-32, MUMBAI PERTAINING TO THE ASSESSMENT YEAR 2008-09, W ITH REFERENCE TO THE ASSESSMENT ORDER DATED 29/09/2010 PASSED IN TERMS O F SECTION 143(3) OF THE INCOME TAX ACT, 1961(THE ACT). 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- 1. DEDUCTION U/S 80 IB. . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 2 A) ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LA W, THE LEARNED CIT(A) ERRED IN DENYING DEDUCTION OF RS.5,67,09,436 U/S 80 -IB IN RESPECT OF OEPB LICENSES UTILIZED DURING THE YEAR FOR DUTY FRE E IMPORT OF RAW MATERIALS. HE FAILED TO APPRECIATE THAT THE SAID LI CENSES WERE NOT SOLD DURING THE YEAR AND THAT THE SAID CREDITS WERE ONLY BY WAY OF CONTRA ENTRIES IN THE ACCOUNTS. B) ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW , THE LEARNED CIT(A) ERRED IN DENYING DEDUCTION U/S 80-IB IN RESPECT OF THE FOCUS MARKET INCENTIVE OF RS 3,74,09,929/- WITHOUT APPRECIATING THAT IT IS DERIVED FROM INDUSTRIAL UNDERTAKING. C) ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW , THE LEARNED CIT(A) ERRED IN DENYING DEDUCTION U/S 80-IB IN RESPECT OF SUNDRY INCOME OF RS 1,86,7781- WITHOUT APPRECIATING THAT IT IS DERIVED FROM INDUSTRIAL UNDERTAKING. 2. DISALLOWANCE U/S 14A. 2.1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT RESORT CANNOT BE MADE TO RULE 80(1)(B) SINCE THE LEARNED AO HAS FAILED TO PROVIDE ANY COGENT REASONS FOR NOT ACCEPTING THE DISALLOWANCE OF RS.19,64,974/- AL READY MADE BY THE APPELLANT AND FURTHER DISALLOWING RS.26,22,666 WHIC H IS THE AMOUNT OF ENTIRE DIVIDEND INCOME. THUS ENHANCING DISALLOWANCE U/S 14A BY RESORTING TO THE COMPUTATIONAL MACHINERY OF RULE 80 (2) IS BAD-IN-LAW AND NEEDS TO BE DELETED. 2.2) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADM ITTING, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARN ED CIT(A) ERRED IN CONFIRMING THAT RULE 80(2)(II) ARE APPLICABLE TO TH E APPELLANT WITHOUT APPRECIATING THAT THE INVESTMENTS WERE MADE FROM OW N FUNDS VIZ. SALE OF POLYMER BUSINESS RS.878,549,026 AND SALE OF DEVELOP MENT RIGHTS OF LAND RS.304,000,000. CIT(A) ALSO FAILED TO APPRECIATE T HAT THE TRADE INVESTMENTS OF RS.40.44 LACS WERE FOR BUSINESS AND NOT FOR EARNING TAX FREE DIVIDEND INCOME. THUS DISALLOWANCE OF INTEREST EXPENSE U/S 14A BEING BAD-IN-LAW NEEDS TO BE DELETED. 2.3) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADM ITTING, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARN ED CIT(A) ERRED IN CONFIRMING THAT RULE 8D(2)(II) ARE APPLICABLE TO TH E APPELLANT WITHOUT APPRECIATING THAT THE APPELLANT HAS SUFFICIENT OWN FUNDS ALONG WITH RESERVES WHICH CAN BE STATED TO HAVE APPLIED FOR MA KING INVESTMENTS. THUS DISALLOWANCE OF INTEREST EXPENSE U/S 14A BEING BAD-IN-IAW NEEDS TO BE DELETED. 3. EXEMPTION U/S 54G: . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 3 A) ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW , THE LEARNED CIT(A) ERRED IN DENYING EXEMPTION U/S 54G OF RS 132,441,68 2 WITHOUT APPRECIATING THAT THE APPELLANT HAS SHIFTED ITS IND USTRIAL UNDERTAKING FROM MAHUL TO VALIA WITHIN THE MEANING OF SECTION 5 4G. THUS THE DISALLOWANCE MADE BY THE LEARNED AO BEING BAD-IN-LA W NEEDS TO BE DELETED. B) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADMIT TING, ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED CI T(A) ERRED IN DENYING EXEMPTION U/S 54G OF RS 2,06,56,184/- INCURRED PRIO R TO 28.9.2006 (I.E PRIOR TO 1 YEAR BEFORE DATE OF TRANSFER OF LAND WHI CH WAS 29/09/2007) WITHOUT APPRECIATING THAT SHIFTING OF THE INDUSTRIA L UNDERTAKING COMPLETED ON 1/11/2006. THUS SINCE THE SHIFTING OF INDUSTRIAL UNDERTAKING TOOK PLACE WITHIN 1 YEAR BEFORE TRANSFE R OF THE LAND, EXEMPTION U/S 54G OF THE SAID RS 2,06,56,184/- MUST BE ALLOWED. ACCORDINGLY, THE DISALLOWANCE MADE BY THE LEARNED A O BEING BAD-IN-LAW MUST BE DELETED. C) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADMIT TING, ON FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED CI T(A) ERRED IN DENYING EXEMPTION U/S 54G OF RS 41,74,638/- INCURRED TOWARD S 'APPROACH RCC ROADS TO PLANT' WITHOUT APPRECIATING THAT THE APPRO ACH ROAD TO THE FACTORY IS CONSIDERED AS PART OF 'FACTORY BUILDING'. ACCORD INGLY, THE DISALLOWANCE MADE BY THE LEARNED AO BEING BAD-IN-LAW MUST BE DEL ETED. 4. LONG TERM CAPITAL GAIN U/S.50B ON SLUMP SALE OF POLYMER DIVISION. THE LEARNED CIT(A) ERRED IN CONFIRMING REDUCTION OF RS 13,24,41,682/- FROM THE NET WORTH OF THE UNDERTAKING AT VALIA WHIL E CALCULATING LONG TERM CAPITAL GAINS U/S 50B. THERE IS NO MANDATE AVA ILABLE TO THE LEARNED AO TO ADJUST THE NET WORTH OF THE UNIT SOLD U/S 50B . THUS THE SAID REDUCTION MADE BY THE LEARNED AO, ON A WITHOUT PREJ UDICE BASIS, IS BAD- IN-LAW. 3. THE APPELLANT BEFORE US IS A COMPANY INCORPORATE D UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER-ALIA, ENGA GED IN THE BUSINESS OF MANUFACTURING OF TRANSFORMER OIL & OTHER OILS, COND UCTORS, SYNTHETIC RUBBER AND TRADING. FOR THE YEAR UNDER CONSIDERATION, IT FILED A RETURN OF INCOME DECLARING AN INCOME OF RS.81,14,46,450/- WHICH WAS REVISED TO RS.81,06,17,190/- AND THE BOOK PROFITS UNDER SECTIO N 115JB OF THE ACT WAS ARRIVED AT RS.108,49,03,670/-. THE RETURN OF INCOM E FILED BY THE ASSESSEE WAS SUBJECT TO A SCRUTINY ASSESSMENT, WHEREIN CERTAIN D ISALLOWANCES WERE MADE, . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 4 WHICH WERE CARRIED IN APPEAL BEFORE LD. CIT(A) WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE. NOT BEING SATISFIED WITH THE ORDER O F LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US ON THE AFORESTATED GROUNDS OF APPEAL. 4. IN SO FAR AS GROUND OF APPEAL NOS.1(A) & (B) ARE CONCERNED, THE SAME RELATE TO ASSESSEES CLAIM FOR DEDUCTION UNDER SECT ION 80IB OF THE ACT IN RELATION TO INCOMES BY WAY OF DEPB INVESTMENTS AND FOCUS MARKET INCENTIVES AMOUNTING TO RS.5,67,09,436/-& RS.3,74,09,929/- RES PECTIVELY. THE AO AS WELL AS LD. CIT(A) HAVE DENIED THE CLAIM FOR DEDU CTION UNDER SECTION 80IB OF THE ACT ON THE AFORESAID TWO ELEMENTS OF INCOME ON THE GROUND THAT THE SAME DO NOT CONSTITUTE INCOMES DERIVED FROM THE INDUST RIAL UNDERTAKING. 4.1 LD. REPRESENTATIVE OF THE ASSESSEE FAIRLY CONCE DED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT, 317 ITR 78(SC) COVERS THE CONTROVERSY IN FAVOUR OF THE REVENUE. 5. BY WAY OF GROUND OF APPEAL NO.1(C), THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT IS IN RELAT ION TO SUNDRY INCOME OF RS.1,86,778/-. ON THIS ASPECT ALSO, THE LD. REPR ESENTATIVE OF THE ASSESSEE FAIRLY CONCEDED THAT THE SAID INCOME HAS BEEN RIGHT LY HELD TO BE NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING AND ACCORDINGLY TH E DENIAL OF DEDUCTIONSUNDER SECTION 80IB OF THE ACT IS HEREBY AFFIRMED. 6. THUS, IN SO FAR AS GGROUND NOS.1 (A) ,(B) & (C) ARE CONCERNED THE SAME STAND DISMISSED. 7. IN SO FAR AS GROUND OF APPEAL NOS. 2.1 TO 2.3 AR E CONCERNED THE SAME RELATE TO A DISALLOWANCE OF RS.26,22,666/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. IN THIS CONT EXT, AT THE TIME OF HEARING THE ONLY PLEA SET UP BY THE APPELLANT IS THAT THE SUO-M OTO DISALLOWANCE MADE BY . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 5 THE ASSESSEE IN ITS COMPUTATION OF INCOME AMOUNTING TO RS.19,64,974/- OUT OF INTEREST PAID FOR PURCHASE OF INVESTMENT AND SEBI F ILING FEES FOR OPEN OFFER FOR INVESTMENTS IN SHARES OF M/S. UNIFLEX CABLES LTD. B E REDUCED FROM THE TOTAL DISALLOWANCE WORKED OUT BY THE AO. IN THIS CONTEXT THE LD. REPRESENTATIVE OF THE ASSESSEE REFERRED TO PAGE-1 OF THE PAPER BOOK, WHEREIN A COPY OF COMPUTATION OF INCOME HAS BEEN PLACED. IN THE SAID COMPUTATION OF INCOME, AN AMOUNT OF RS.7,53,425/- REPRESENTING INTEREST PAID TO YES BANK ON LOAN FOR PURCHASE OF INVESTMENTS AND RS.12,11,549/- TOWARDS SEBI FILING FEES FOR OPEN OFFER FOR INVESTMENTS IN M/S. UNIFLEX CABLES LTD. H AVE BEEN DISALLOWED BY THE ASSESSEE ITSELF. 7.1 THE AFORESAID PLEA OF THE ASSESSEE HAS NOT BEEN OPPOSED BY LD. D.R. 7.2 CONSEQUENTLY, WE SETASIDE THE MATTER TO THE FIL E OF AO, WHO SHALL ALLOW APPROPRIATE RELIEF TO THE ASSESSEE ON THIS ASPECT. THUS, ON THIS LIMITED ASPECT ASSESSEE SUCCEEDS AND REST OF THE ISSUES RAISED IN THE GROUND OF APPEAL NOS. 2.1 TO 2.3 IN RELATION TO THE DISALLOWANCE UNDER SE CTION 14A OF THE ACT ARE HEREBYDISMISSED. 8. THE LAST GROUND IN THIS APPEAL IS WITH REGARD T O DENIAL OF EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 54G OF THE A CT OF RS.13,24,41,682/- ON ACCOUNT OF SHIFTING EXPENSES OF HIGH STYRINE RUBBER (HSR) UNIT AGAINST THE LONG TERM CAPITAL GAIN EARNED ON SALE OF DEVELOPMEN T RIGHTS OF THE LAND OF SPECIAL OIL REFINERY (SOR UNIT) AT MAHUL. THE SO R UNIT OF THE ASSESSEE WAS SITUATED AT MAHUL COMPRISING OF MANUFACTURING UNIT PRODUCING TRANSFORMER OILS AND OTHER OILS AND THE HSR WAS A BY-PRODUCT OF T HE MANUFACTURING UNIT OF MAHUL PROJECT. DURING THE YEAR UNDER CONSIDERATIO N, ASSESSEE SOLD THE DEVELOPMENT RIGHTS OF THE LAND ON WHICH THE INDUSTR IAL UNDERTAKING AT MAHUL, MUMBAI WAS SITUATED, WHICH RESULTED IN LONG TERM CA PITAL GAIN OF RS.15,49,65,520/-. PRIOR TO THE SALE OF LAND AT MA HUL, ASSESSEE SHIFTED THE . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 6 HSR UNDERTAKING AT MAHUL, MUMBAI TO VALIA AT GUJARA T, WHICH IS REFERRED TO AS POLYMER DIVISION AT VALIA. ON THE STRENGTH OF THE PROVISIONS OF SECTION54G OF THE ACT, ASSESSEE CLAIMED DEDUCTION OF RS.13,24,41, 682/-, REPRESENTING EXPENDITURE INCURRED IN THE COURSE OF OR IN THE C ONSEQUENCE OF SHIFTING SUCH INDUSTRIAL UNDERTAKING, FROM THE LONG TERM CAPI TAL GAINS EARNED ON THE SALE OF LAND AT MAHUL. THE CLAIM FOR DEDUCTION UNDER S ECTION 54G OF THE ACT HAS BEEN DENIED TO THE ASSESSEE BY THE AO AS WELL AS LD . CIT(A) AND THE SAME IS BEING AGITATED BEFORE US BY WAY OF GROUND NO.3. 9. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE ASSESSEE, AT THE OUTSET MOVED AN APPLICATION UNDER RULE-29 OF I NCOME TAX APPELLATE TRIBUNAL RULES, 1963(IN SHORT THE APPELLATE TRIBUNA L RULES SEEKING ADMISSION OF ADDITIONAL EVIDENCE WHICH ACCORDING TO THE ASSES SEE ARE RELEVANT TO ADJUDICATE THE AFORESAID CONTROVERSY. THE ADDITION AL EVIDENCE WHICH IS SOUGHT TO BE ADMITTED HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 119 TO 136 AND IS, INTER-ALIA, DETAILED AS UNDER:- SR. NO. PARTICULARS 1. CONFIRMATION OF SURAT GOODS TRANSPORT PVT. LTD. RELATING TO TRANSPORT OF MACHINERY FROM SOR MAHUL DIVISION TO POLYMER DIV ISION, VALIA 2. DETAILS OF MACHINERIES SHIFTED FROM SOR MAHUL DI VISION TO POLYMER DIVISION, VALIA. 3. CONFIRMATION OF GAYATRI CONSTRUCTION IN RELATION TO MODIFICATION/ CONSTRUCTION OF FACTORY BUILDING AT VALIA. 4. CERTIFICATE OF SHRI KAUSHIK PATEL, B.E. CHEMICAL , RELATING TO PHYSICAL VERIFICATION OF MACHINERY INSTALLED AT NEWLY CONSTR UCTED FACTORY BUILDING AT VALIA. 5. PRODUCTION DETAILS OF SOR MAHUL UNIT AND VALIA U NIT FROM F.Y. 2004- 05 TO 2007-08. 6. PRODUCTION DETAILS MOTH WISE AND PRODUCT WISE OF VALIA UNIT FOR F.Y. 2006-2007 AS PER EXCISE RECORDS. 7. PRODUCT WISE DETAILS OF VALIA UNIT FOR F.Y. 20 07-08 AS PER EXCISE RECORDS. 8. AFFIDAVIT OF SHRI CHITANYA DESAI, DIRECTOR OF CO MPANY, IN RELATION TO DIFFERENTIATION OF HSR AND NBR PRODUCT. . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 7 9.1 THE LEARNED REPRESENTATIVE FOR THE ASSESSEE EX PLAINED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54G OF THE ACT HAS BEEN REJECTED ON VARIOUS GROUNDS, THE PRINCIPAL GROUND BEING THAT TH E ASSESSEE COULD NOT PROVE SHIFTING OF PLANT AND MACHINERY FROM MAHUL TO VALI A ON THE BASIS OF ANY EVIDENCE. IT IS NOTED FROM THE ORDERS OF THE AUTHO RITIES BELOW THAT VARIOUS POINTS RAISED IN ORDER TO REJECT THE ASSESSEES CL AIM CAN BE SUMMARIZED AS FOLLOWS: (I) THAT ASSESSEE DID NOT PRODUCE ANY EV IDENCE TO SHOW THE SHIFTING OF THE INDUSTRIAL UNDERTAKING FROM MAHUL TO VALIA; (II ) THAT ASSESSEE DID NOT PRODUCE DETAILS OF TRANSPORTATION FROM MAHUL TO VAL IA ALONGWITH SUPPORTING EVIDENCES, SUCH AS NUMBER OF CONTRACTORS UTILIZED, TRUCK NUMBERS, GATE PASSES, TOLL NAKA RECEIPTS, ETC.; (III) THAT THE CE RTIFICATE FURNISHED BY THE ASSESSEE FROM ITS WORKS ENGINEER CERTIFYING SHIFTIN G OF THE INDUSTRIAL UNDERTAKING WAS AN INTERNAL DOCUMENT AND WAS NOT RE LIABLE; AND (IV) THAT THE ASSESSEE COULD ALSO NOT ESTABLISH THE COMMISSIONING OF THE PLANT AT VALIA. 9.2 BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSES SEE SUBMITTED THAT VARIOUS EVIDENCES WERE FURNISHED BEFORE THE AO INCLUDING TH E COPIES OF WORK ORDER ISSUED IN FAVOUR OF M/S.M. MECH ENGINEERS PVT. LTD . FOR EXECUTING WORK FOR DISMANTLING OF THE ASSETS AT MAHUL AND ITS INSTAL LATION AT VALIA. FURTHER, CONFIRMATION FROM THE SAID CONCERN WERE ALSO FURNIS HED CERTIFYING COMMISSIONING OF THE RELATED WORK ON THE MACHINER IES TRANSFERRED FROM MAHUL. LD. REPRESENTATIVE FOR THE ASSESSEE ALSO EX PLAINED THAT A COPY OF THE LEDGER ACCOUNT OF FREIGHT EXPENSES INCURRED ON SHIF TING OF RS.14,91,400/- WAS ALSO FURNISHED. LD. REPRESENTATIVE FOR THE ASSESSE E POINTED OUT THAT FURTHER ADDITIONAL DOCUMENTS WHICH WERE NOT HITHERTO FURNIS HED BEFORE THE LOWER AUTHORITIES ARE RELEVANT AND ARE IN THE NATURE OF C ORROBORATIVE EVIDENCE TO SUPPORT THE ALREADY EXISTING FACTUAL PLEAS RAISED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 8 9.3 LD. REPRESENTATIVE FOR THE ASSESSEE HAS TAKEN U S THROUGH THE ADDITIONAL EVIDENCE PLACED IN THE PAPER POOK AT PAGES 119 TO 136, WHICH WE HAVE ENUMERATED ABOVE AND EXPLAINED ITS RELEVANCE AND T HE REASONS WHY THE SAME IS BEING PRODUCED AS ADDITIONAL EVIDENCE AT THIS ST AGE. ON THIS BASIS, IT IS PRAYED THAT THE ADMISSION OF ADDITIONAL EVIDENCE WO ULD NOT PREJUDICE THE REVENUE AND RATHER IT IS A RELEVANT MATERIAL TO DI SPOSE OF THE APPEAL OF THE ASSESSEE IN ACCORDANCE WITH THE LAW. 10. ON THE OTHER HAND, LD. DR APPEARING FOR THE REV ENUE HAS CONTENDED THAT THE LOWER AUTHORITIES HAVE APPROPRIATELY APPRE CIATED THE MATERIAL AND EVIDENCE THAT WAS SOUGHT TO BE RELIED UPON BY THE A SSESSEE AND THAT THERE WAS NO JUSTIFICATION FOR NOT HAVING FURNISHED THE AFOR ESAID ADDITIONAL EVIDENCE BEFORE THE LOWER AUTHORITIES. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IT IS QUITE WELL UNDERSTOOD THAT BEFORE THE TRIBUNAL, PARTIES TO A N APPEAL CANNOT PRODUCE EVIDENCE WHICH WAS NOT BEFORE THE LOWER AUTHORITIES . SO HOWEVER, IN TERMS OF RULE-29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 THE TRIBUNAL HAS DISCRETIONARY POWER TO ADMIT ADDITIONAL EVIDENCE IN THE CIRCUMSTANCES PRESCRIBED THEREIN. ONE OF THE ASPECTS IS THAT WHE RE THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMIN ED TO ENABLE IT TO PASS AN ORDER OR FOR ANY OTHER SUBSTANTIAL CAUSE, THEN THE TRIBUNAL FOR REASONS TO BE, RECORDED, MAY PERMIT ADMISSION OF SUCH ADDITION AL EVIDENCE. IN THIS CONTEXT, REFERENCE WAS MADE TO THE JUDGMENT OF HON BLE GAUHATI HIGH COURT IN THE CASE OF JEYPORE TIMBER AND VENEER MILLS (P) LTD . VS. CIT, 137 ITR 415 (GAU) TO POINT OUT THAT THE AVOWED OBJECT OF THE PROVIS ION IS TO DISPENSE JUSTICE AND TO INSULATE OR RECTIFY THE MISTAKES COMMITT ED BY THE PARTIES AND/OR THE INCOME TAX AUTHORITIES. IT HAS ALSO BEEN VEHEMENT LY ARGUED ON BEHALF OF THE APPELLANT THAT THE EXPRESSION, FOR ANY OTHER SUBST ANTIAL CAUSE CONTAINED IN RULE-29 OF THE APPELLATE TRIBUNAL RULES, 1963 SUGGE STS THAT ADDITIONAL . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 9 EVIDENCE SHOULD BE ADMITTED IN SITUATIONS WHERE IT ADVANCES THE CAUSE OF JUSTICE, NAMELY, DETERMINATION OF THE CORRECT TAX L IABILITY IN THE HANDS OF THE ASSESSEE. IN OUR CONSIDERED OPINION, IN THE MATTER S OF ADMISSION OF ADDITIONAL EVIDENCE, THE TEST TO BE APPLIED IS THE FURTHERANCE OF CAUSE OF SUBSTANTIAL JUSTICE AND NOT TECHNICAL CONSIDERATIONS. IT IS IN THIS BACK GROUND, WE MAY NOW EXAMINE THE EFFICACY OF ASSESSEES PLEA FOR ADMISSION OF THE AFORESTATED ADDITIONAL EVIDENCE, WHICH WERE HITHER TO NOT BEFOR E THE LOWER AUTHORITIES. 11.1 AS OBSERVED EARLIER, THE SUM AND SUBSTANCE OF THE DISPUTE ARISES FROM THE CLAIM OF DEDUCTION UNDER SECTION 54G OF THE ACT , WHICH HAS BEEN DENIED BY THE INCOME TAX AUTHORITIES PRIMARILY ON THE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THAT THE INDUSTRIAL UNIT WAS SHIFTED FROM MAHUL TO VALIA. 11.2 THE FIRST ADDITIONAL EVIDENCE IS IN THE FORM O F CONFIRMATION FROM SURAT GOODS TRANSPORT PVT. LTD., WHEREBY IT IS SOUGHT TO BE CANVASSED THAT THE MACHINERIES WERE TRANSPORTED FROM MAHUL TO VALIA DU RING THE RELEVANT PERIOD. ON THIS POINT, THE LD. REPRESENTATIVE FOR THE ASSE SSEE EXPLAINED THAT AT THE TIME OF ASSESSMENT PROCEEDINGS IT WAS DIFFICULT TO SEEK AND ENSURE THE CO- OPERATION FROM THE CONCERNED TRANSPORTER, AS MAHUL UNIT HAS SINCE BEEN CLOSED DOWN. THE ASSESSEE WAS UNDER THE BONAFIDE B ELIEF THAT SINCE TRANSPORTATION WAS EFFECTED BY AN INDEPENDENT PAR TY AND PAYMENTS WERE MADE THROUGH CHEQUES, IT WOULD BE SUFFICIENT TO PRO VE THE TRANSPORTATION OF MACHINERY. HOWEVER, SINCE THE CLAIM WAS REJECTED, THE ASSESSEE WAS COMPELLED TO SEEK CERTIFICATE FROM THE TRANSPORTER, WHICH WOU LD CORROBORATE THE PLEA OF THE ASSESSEE THAT INDUSTRIAL UNDERTAKING WAS INDEED SHIFTED FROM MAHUL TO VALIA. THE SECOND ADDITIONAL EVIDENCE IS IN THE F ORM OF DETAILS OF MACHINERIES SHIFTED FROM MAHUL TO VALIA. AS PER THE LD. REPRES ENTATIVE FOR THE ASSESSEE, SUCH DETAILS PLACED AT PAGES 120 TO 124 OF THE PAP ER BOOK ARE ITEMWISE DETAILS OF MACHINERIES SHIFTED. SIMILARLY, THE THIRD ADDIT IONAL EVIDENCE IS IN THE FORM OF . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 10 CONFIRMATION OF GAYATRI, CONSTRUCTION ENGINEERS AND CONTRACTORS, WHO CARRIED OUT NECESSARY CHANGES AND MODIFICATIONS IN THE FACT ORY BUILDING AT VALIA. THE SAID CONCERN HAD ALSO CONSTRUCTED ADJOINING FACTORY BUILDING HSR UNIT AND WAREHOUSE ETC. AS PER THE APPELLANT, SUCH CONFIRM ATION WOULD ESTABLISH THE CONSTRUCTION AND MODIFICATION OF THE BUILDING AT VA LIA. IT WAS EXPLAINED THAT DURING THE COURSE OF PROCEEDINGS BEFORE THE LOWER AUTHORITIES, THE AFORESAID CONCERN COULD NOT BE CONTACTED FOR OBTAINING CONFIR MATION BUT NEVERTHELESS THE PAYMENTS WERE MADE THROUGH CHEQUES. IT WAS CON TENDED THAT THE PRESENT CONFIRMATION WOULD ONLY CORROBORATE THE EXPLLANATI ON OF THE ASSESSEE AND THEREFORE, SUCH EVIDENCE DESERVES TO BE ADMITTED. 11.3 SIMILARLY, THE CONFIRMATION OF SHRI KAUSHIK P ATEL, CHEMICAL ENGINEER HAS ALSO BEEN SOUGHT TO BE ADMITTED AS ADDITIONAL E VIDENCE, WHICH IS PLACED AT PAGE 126 TO 129 OF THE PAPER BOOK. THE CLAIM OF TH E ASSESSEE WAS THAT THE INSTALLATION OF MACHINERY AT VALIA WAS CARRIED OUT UNDER THE SUPERVISION OF THE SAID CHEMICAL ENGINEER AND THE CONFIRMATION FROM HI M WOULD CORROBORATE THE STAND OF THE ASSESSEE. 11.4 AT ITEM NOS.5,6 & 7 ARE THE ADDITIONAL EVIDENC ES IN THE SHAPE OF THE PRODUCTION DETAILS OF THE SOR IN VALIA UNIT FROM F INANCIAL YEARS 2004-05 TO 2007-08, WHICH WOULD SHOW THE DETAILS OF EXCISABLE PRODUCTS MANUFACTURED BY THE ASSESSEE. AS PER THE ASSESSEE, THE AFORESAID R ECORDS WOULD DEMONSTRATE CARRYING ON PRODUCTION AT VALIA UNIT FROM NOVEMBER 2006 AND ALSO FOR THE FINANCIAL YEAR 2006-07 AND 2007-08, WHICH WOULD COR ROBORATE ASSESSEES ASSERTIONS THAT THE INDUSTRIAL UNIT WAS SHIFTED FRO M MAHUL TO VALIA. 11.5 THE LAST ADDITIONAL EVIDENCE IS IN THE FORM OF AN AFFIDAVIT OF THE DIRECTOR OF THE ASSESSEE COMPANY EXPLAINING THE DIFFERENCE IN THE MANUFACTURING ACTIVITY CARRIED OUT AT MAHUL AND THE MANUFACTURING ACTIVITY LATER ON CARRIED OUT AT VALIA UNIT. . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 11 11.6 WE HAVE CAREFULLY CONSIDERED THE RELEVANCE OF THE AFORESAID EVIDENCES WHICH ARE NOW SOUGHT TO BE RELIED UPON BY THE ASSE SSEE, AND WERE HITHETO NOT PRODUCED BEFORE THE LOWER AUTHORITIES. QUITE CLEA RLY, ON THE BASIS OF THE AFORESAID MATERIAL, THE ASSESSEE DOES NOT INTEND TO MAKE OUT ANY NEW CASE, BUT THE IT MERELY SEEK TO CORROBORATE ITS EARLIER STAN D. SOME OF THE ADDITIONAL EVIDENCES, FOR INSTANCE, CONFIRMATIONS FROM THE TRANSPORT CONTRACTOR, ENGINEERING CONTRACTOR, ETC. ARE THIRD PARTY INDEPE NDENT EVIDENCES AND IN OUR VIEW IT WOULD BE APPROPRIATE TO CONSIDER THE SAME FOR THE PURPOSE OF ADJUDICATING THE ASSESSEES CLAIM FOR DEDUCTION UND ER SECTION 54G OF THE ACT. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE FA CTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE AVOWED OBJECT OF RULE 29 OF THE APPELLATE TRIBUNAL RULES WOULD BE SUB-SERVED IF THE ADDITIONAL EVIDENCES AR E ADMITTED IN ORDER TO APPROPRIATELY ADJUDICATE ASSESSEES CLAIM FOR DE DUCTION UNDER SECTION 54G OF THE ACT. WE HOLD SO. 11.7 SO HOWEVER, SINCE THE AFORESAID EVIDENCES/MATE RIAL WAS NOT BEFORE THE LOWER AUTHORITIES, IT WOULD BE IN THE FITNESS OF THINGS THAT THE ISSUES RELATING TO ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 54G OF THE ACT IS RESTORED BACK TO THE FILE OF AO, WHO SHALL REVISIT THE SAME AS PE R LAW AFTER TAKING INTO CONSIDERATION THE AFORESTATED ADDITIONAL EVIDENCE, WHICH HAVE BEEN PLACED BEFORE US IN THE PAPER BOOK AT PAGES 119 TO 136. NEEDLESS TO SAY, THE AO SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY O F BEING HEARD BEFORE ADJUDICATING AFRESH ON THE ASSESSEES PLEA FOR DEDU CTION UNDER SECTION 54G OF THE ACT AS PER LAW. . / ITA NO.7029/MUM/2011 / ASSESSMENT YEAR 2008-09 12 11.8 THUS, IN SO FAR AS GROUND NO.3 IS CONCERNED T HE SAME IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES ONLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2015 ' *+ ,- 31/07/2015 ' SD/- SD/- ( / SANJAY GARG ) ( . . / G.S.PANNU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER * MUMBAI; , DATED 31/07/2015 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 0# ( ) / THE CIT(A)- 4. 0# / CIT 5. 12 #34 , $ 34 , * / DR, ITAT, MUMBAI 6. 5 / GUARD FILE. / BY ORDER, 1# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , * / ITAT, MUMBAI . . ./ VM , SR. PS