ACIT, Faridabad V. Sh. Sunil Prakash, Faridabad

ITA 767/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5281 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 24-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH GUPTA
• Keywords: Opportunity of being heard; Additional evidence; Assessment record; Onus to prove
• Section: 143(3); 80IB; 194C; 139

Judgement Text

1 ITA NOS. 2955/DEL/2009 & ORS IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 2955/DEL/2 009 (A.Y .2006-07) I.T.A .NO. 5683/DEL/2 012 (A.Y .2009-10 ACIT CIRCLE-II, FARIDABAD (APPELLANT) VS SUNIL PARKASH PLOT NO. 62 SECTOR-25 FARIDABAD (RESPONDENT) I.T.A .NO. 5683/DEL/2 012 (A.Y .2009-10) ACIT CIRCLE-II, BLOCK-B, NEW CGO COMPLEX FARIDABAD (APPELLANT) VS SUNIL PARKASH PLOT NO. 62 SECTOR-25 FARIDABAD AFVPP5777K (RESPONDENT) I.T.A .NO. 1191/DEL/2 010 (A.Y .2007-08) ACIT CIRCLE-II, FARIDABAD (APPELLANT) VS SUNIL PARKASH PROP. M/S. CROMEWELL INDUSTRIES PLOT NO. 62, SECTOR-25 FARIDABAD (RESPONDENT) I.T.A .NO. 767/DEL/20 12 (A.Y .2008-09) ACIT CIRCLE-II, FARIDABAD (APPELLANT) VS SUNIL PARKASH PLOT NO. 62 SECTOR-25 FARIDABAD AFVPP5777K (RESPONDENT) 2 ITA NOS. 2955/DEL/2009 & ORS C.O NO. 11/DEL/2013 ( A.Y .2009-10) SUNIL PARKASH PLOT NO. 62 SECTOR-25 FARIDABAD AFVPP5777K (APPELLANT) VS ACIT CIRCLE-II, BLOCK-B, NEW CGO COMPLEX FARIDABAD (RESPONDENT) APPELLANT BY SH. RAKESH GUPTA, ADV RESPONDENT BY SH. SOMIL AGARWAL, ADV ORDER PER BENCH THESE APPEALS ARE FILED AGAINST THE ORDER DATED 24/ 4/2009, 24/8/2012, 22/1/2010, 2/12/2011 & 24/8/2012 PASSED BY CIT(A)-F ARIDABAD. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- (ITA NO. 29 55/DEL/2009 REVENUES APPEAL ASSESSMENT YEAR 2006-07) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ADMITTING THE NEW ADDI TIONAL EVIDENCE/ DOCUMENTS SUBMITTED BY THE ASSESSEE IN VIOLATION OF RULE 46A OF INCOME TAX RULES 1962 WITHOUT PROPERLY CONSIDERING THE REASONABLENESS, GENUINENESS AND RELIABLENESS OF THE ADDITIONAL EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ADMITTING AND RELYING UPON THE NEW ADDITIONAL EVIDENCE/ DOCUMENTS IN ORDER TO DELETE T HE ADDITION WHICH WAS HITHERTO NOT BEFORE THE ASSESSING OFFICER DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS EVEN THOUGH THE ASSESSEE WAS GIVEN DATE OF HEARING 24.05.2017 DATE OF PRONOUNCEMENT 01 .08.2017 3 ITA NOS. 2955/DEL/2009 & ORS SUFFICIENT OPPORTUNITY TO PROVE HIS CLAIM, BUT HE F AILED TO PROVE HIS CLAIM DESPITE ONUS TO PROVE WAS ON HIM THUS DENIAL OF DED UCTION WAS COMPLETELY IN LINE WITH THE PROVISIONS OF LAW AND T HEREFORE, SUBMISSIONS MADE SHOULD NOT BE ADMITTED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ADMITTING NEW ADDITION AL EVIDENCE EVEN THOUGH IT DID NOT CONTAIN ANY REASON AS TO HOW ANY OF THE CIRCUMSTANCES MENTIONED IN CLAUSE (A) TO (D) OF RUL E ' 46A(1) HAD BEEN FOUND TO EXIST SO AS TO JUSTIFY ADMISSION OF THE NE W ADDITIONAL EVIDENCE, THEREFORE, IT IS EVIDENT THAT THE NEW ADDITIONAL EV IDENCE HAD BEEN ADMITTED BY THE COMMISSIONER OF INCOME TAX (APPEALS ) CONTRARY TO THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 196 2. 4. ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION IN QUESTION BY RELYING UPON FRESH EVIDENCE WITHOUT COMPLYING WITH THE PROVISIONS OF RULE 46A AND AS A CONSEQUENCE, THE ORDER OF THE LD. CIT(A) BE RESTORED BACK TO HIS FILE TO BE DECIDED DE NOVO AS PER LAW AFTER COMPLYING WITH THE PROVISIONS OF RULE 46A OF THE RULES ALLOWING THE ASSESSING OFFICER A REASONAB LE OPPORTUNITY OF BEING HEARD AND THEREAFTER PASS AN O RDER IN ACCORDANCE WITH LAW. I.T.A .NO. 5683/DEL/2012 (A.Y .2009-10) 1. THE LD.CIT(A) HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN ALLOWING THE DEDUCTION OF RS.20,88,47,617/- & RS.12,61,26,152/- CLAIMED BY THE ASSESSEE U/S 80IB & 80IC OF THE ACT OUT OF PROFIT DERIVED FROM UNITS SET UP IN JAMMU & KASHIPUR IGNORING THE FACT THAT THE ASSESSEE WAS NOT ENGAGED IN THE W ORK OF 4 ITA NOS. 2955/DEL/2009 & ORS MANUFACTURING OF ANY ARTICLE/THING BUT WAS ONLY DOI NG THE WORK OF ASSEMBLING OF VARIOUS COMPONENTS TO MAKE D. G SETS. I.T.A .NO. 1191/DEL/2010 (A. Y .2007-08) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 1,03,50,120/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE INCOME T AX ACT, 1961 DISREGARDING THE FACT THAT THE ASSESSEES CASE FALL S UNDER SECTION 194 C(2) AND NOT UNDER SECTION 194 C(L) AND WERE DOING CONTR ACTOR WORK AS THEY THEMSELVES WERE GETTING CONTRACT FOR COMMISSIONING AND INSTALLATION OF TOWER BY CELLULAR COMPANIES AND FURTHER GAVE SUB-CO NTRACT FOR COMPLETION OF THE SAID WORK TO OTHER SUB CONTRACTORS, MOREOVER , THE ASSESSEE HIMSELF WAS DEDUCTING TAX AT SOURCE AND DEPOSITING IT TO TH E CENTRAL GOVT. ACCOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 24,66,58,751 /- MADE BY THE ASSESSING OFFICER BY DISALLOWING DEDUCT ION CLAIMED BY THE ASSESSEE U/S 80IB OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE ASSESSEE WAS NOT MANUFACTURING ANY ARTICLE OR THING, THE DED UCTION CLAIMED BY HIM U/S 80IB OF THE INCOME TAX ACT, 1961 OF PROFITS IN RESPECT OF A UNIT SET UP IN JAMMU AMOUNTING TO RS. 24,66,58,751/- WERE NOT A LLOWABLE AS IT DOES NOT SATISFY THE REQUIREMENTS OF THE AFORESAID SECTI ON. 5 ITA NOS. 2955/DEL/2009 & ORS 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING DEDUCTION U/S 80IB OF THE INCOME TAX ACT, 1961 DISREGARDING THE FACT THAT THE UNIT I S NOT DOING MANUFACTURING BUT IS DOING ASSEMBLING OF INPUTS SUC H AS ENGINE, BATTERY, ALTERNATOR AND THE END PRODUCT I.E. D.G. S ET IS COMBINATION OF ABOVE INPUTS AND THUS NO NEW PRODUCT HAS COME INTO EXISTENCE AND THUS WAS NOT ENTITLED TO DEDUCTION U/S 80IB OF THE INCOME TAX ACT, 1961. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. I.T.A .NO. 767/DEL/2012 (A.Y .20 08-09) 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE DISALLOWA NCES MADE BY THE ASSESSING OFFICER ON A/C OF (I) DEDUCTION OF RS.20,12,90,524/- CLAIMED BY THE ASSE SSEE U/S 80IB AND (II) DEDUCTION OF RS.2,05,80,440/- U/S 80IC OF THE INCO ME TAX ACT, 1961 EVEN THOUGH THE ASSESSEE WAS NOT MANUFACTURING ANY ARTICLE OR THING. THE DEDUCTIONS-CLAIMED BY HIM U/S 80IB AND 80IC OF THE INCOME TAX ACT, 1961 OF PROFITS IN RESPECT OF A UNIT SET UP IN JAMM U AND KASHIPUR AMOUNTING TO RS.20,12,90,524/- AND RS.2,05,80,440/- RESPECTIVELY WERE NOT ALLOWABLE AS IT DOES NOT SATISFY THE REQUIREMEN TS OF THE AFORESAID SECTIONS'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING DEDUCTIONS U/ S 80IB AND 80IC OF THE INCOME TAX ACT, 1961 DISREGARDING THE FACT THAT THE UNITS IS NOT DOING MANUFACTURING BUT IS DOING ASSEMBLING OF INPUTS SUC H AS ENGINE, BATTERY, 6 ITA NOS. 2955/DEL/2009 & ORS ALTERNATOR AND THE END PRODUCT I.E. D.G. SET IS COM BINATION OF ABOVE INPUTS AND THUS NO NEW PRODUCT HAS COME INTO EXISTE NCE AND THUS WAS NOT ENTITLED TO DEDUCTION U/S 80IB AND 80IC OF THE INCOME TAX ACT, 1961'. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING DEDUCTIONS U/ S 80IB OF THE INCOME TAX ACT, 1961 ON THE EXCISE DUTY REFUND RECEIVED BY THE APPELLANT IGNORING THE RATIO OF THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF LIBERTY INDIA (317 ITR 218). IN THIS CASE HON'BLE S UPREME COURT HELD THAT PROFITS DERIVED BY WAY OF SUCH INCENTIVES DID NOT F ALL WITHIN THE EXPRESSION 'PROFITS DERIVED FROM INDUSTRIAL UNDERTA KING'.' 4. 'THAT THE APPELLANT CRAVES FOR THE PERMISSION TO AD D, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL.' C.O .NO. 11/DEL/2013 (A.Y .2009- 10) 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ASSE SSEE ACTION OF LD. A.O IN ALLOCATING THE EXPENSES INCURRED BY M/S GSP POWER P ROJECTS, DELHI, AMOUNTING TO RS.68,66,109/- TO M/S GSP POWER, JAMMU AND M/S GSP POWER, KASHIPUR UNITS OF THE ASSESSEE MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND THEREBY REDUCING THE PROFITS OF THE UNITS IN JAMMU AND KASH IPUR BY RS.68,66,109/- AND IN TURN INCREASING THE PROFITS OF HEAD OFFICE BY TH E SAME AMOUNT. 3. NOW WE WILL FIRST TAKE UP THE BRIEF FACTS OF THE CASE FOR A.Y.2006-07. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF SHEET METAL COMPONENTS & ENGINEERING PARTS & D. G SETS WITH ACO USTIC ENCLOSURE AND COMMISSIONING & INSTALLATION. RETURN OF INCOME DEC LARING AN INCOME OF RS. 86,44,590/- WAS FILED ON 30-10-2006. THE ASSESSEE I S DERIVING INCOME AS A 7 ITA NOS. 2955/DEL/2009 & ORS PROPRIETOR OF M/S CHROMEWELL INDUSTRIES, FARIDABAD, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SHEET-METAL COMPONENTS AND ENGINEERING PARTS, AND OF M/S. G.S.P. POWER PROJECTS, JAMMU WHICH COMM ENCED ITS ACTIVITIES ON 29.07.2005 BY MANUFACTURING D.G. SETS AND CANOPY, P RE-FABRICATED PUF SHELTERS ETC. WITH ACOUSTIC ENCLOSURE AND COMMISSIO NING AND INSTALLATION. DETAILS AND DOCUMENTS WITH REGARD TO THE INCOME SHO WN AND EXPENSES CLAIMED HAVE BEEN OBTAINED AND PLACE IN THE FILE. BOOKS OF ACCOUNTS AND VOUCHERS HAVE ALSO BEEN PRODUCED AND EXAMINED ON TEST CHECK BASIS . THE ASSESSMENT IN THIS CASE WAS COMPLETED VIDE ORDER U/S 143(3) OF THE INC OME TAX ACT, 1961 DATED 31-12-2008 AT AN INCOME OF RS. 10,87,88,520/-. THE ASSESSING OFFICER DENIED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB OF THE I NCOME TAX ACT, 1961 AMOUNTING TO RS. 10,02,89,361/- ON THE GROUND THAT THE ASSESSEE WAS NOT MANUFACTURING D.G. SETS AND PRE-FABRICATED SHELTERS AT JAMMU UNIT. 4. FOR A.Y. 2007-08, THE ASSESSEE FURNISHED ITS RET URN U/S 139 (1) OF THE ACT ON 31.10.2007 DECLARING A TAXABLE INCOME OF RS. 49,13,508/- AFTER CLAIMING A DEDUCTION OF RS. 24,66,58,751/- U/S 80IB OUT OF T HE GROSS TOTAL INCOME OF RS. 25,16,91,009/- WHICH WAS SUBSEQUENTLY PROCESSED U/S . 143(1) AT THE RETURNED INCOME. IN THE ASSESSMENT U/S 143(3), THE FINAL TAX ABLE INCOME WAS DETERMINED AT RS.26,19,22,380/- IN WHICH THE A.O. D ENIED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB ON THE GROUND OF THE LAST YEA R THAT THE ASSESSEE WAS NOT MANUFACTURING DG SETS AT JAMMU UNIT, (AND ADDING IT IN THE COMPUTATION OF TOTAL INCOME, WHICH IS EVIDENTLY NOT APPROPRIATE AN D COGENT, AS CHAPTER VI DEDUCTIONS ARE MADE OUT OF THE GROSS TOTAL INCOME) AND ALSO EFFECTED AN ADDITION U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS. 1,03,50,120/-. 5. FOR A.Y. 2008-09, THE RETURN OF INCOME DECLARING INCOME OF RS. 1,16,14,460/- WAS FILED BY THE ASSESSEE ON 30.09.20 08. THE ASSESSEE CLAIMED DEDUCTION OF RS. 20,12,90,524/- U/S 80IB OF THE ACT IN RESPECT OF PROFITS DERIVED FROM TWO UNDERTAKINGS AT JAMMU IN THE NAME OF M/S GSP STRUCTURES AND M/S. GSP POWER PROJECTS. M/S. GSP POWER PROJECT S, JAMMU WAS 8 ITA NOS. 2955/DEL/2009 & ORS FUNCTIONING FROM 27.06.2005 WHEREAS M/S. GSP STRUCT URES, JAMMU WAS COMMENCED PRODUCTION DURING THE YEAR FROM 04.04.200 7. THE ELIGIBILITY OF CLAIM OF DEDUCTION U/S 80IB OF ACT IN THE CASE OF M /S. GSP POWER PROJECTS, JAMMU WAS EXAMINED IN DETAIL DURING THE ASSESSMENT PROCEEDINGS FOR A.Y. 2006-07 AND 2007-08 AND IT WAS HELD THAT THE ASSESS EE WAS NOT MANUFACTURING DIESEL GENERATOR SETS (DG SETS) BUT O NLY ASSEMBLING VARIOUS COMPONENTS OF DG SETS IN THIS UNIT. ACCORDING TO TH E AO, THE ACTIVITY OF ASSEMBLING OF DG SETS BY THE ASSESSEE DID NOT AMOUN T TO MANUFACTURE AND HENCE, DEDUCTION U/S 80IB WAS NOT ALLOWED. DURING T HE YEAR THE ASSESSEE ALSO STARTED ANOTHER UNIT IN THE NAME OF M/S. GSP POWER PROJECTS AT KASHIPUR, UTTARAKHAND, FROM 07.09.2007 AND CLAIMED DEDUCTION OF RS.2,05,80,440/- U/S 80IC OF THE ACT IN RESPECT OF PROFITS FROM MANUFACT URING OF DG SETS. SINCE, THE NATURE OF BUSINESS IN THIS UNIT WAS FOUND TO BE SAM E AS THAT OF M/S. GSP POWER PROJECT, JAMMU THE AO DID NOT ALLOWED THE CLA IM OF DEDUCTION U/S 80IC ON THE SAME REASONING. IN RESPECT OF OTHER NEWLY ST ARTED UNIT AT JAMMU IN THE NAME OF M/S GSP STRUCTURES, WHICH IS ENGAGED IN FAB RICATION OF SHEET METAL COMPONENTS, THE AO HELD THAT THE BUSINESS ACTIVITY OF THIS UNIT CONSISTS OF CONVERTING SHEETS INTO SEMI FINISHED SHEET METAL CO MPONENTS AFTER APPLYING SOME PROCESS, WHICH WERE THEN SOLD TO M/S GSP POWER PROJECTS, JAMMU. THE AO THEREFORE, CONCLUDED THAT THE BUSINESS ACTIVITY IN THIS UNIT DID NOT RESULT INTO ANY NEW AND DISTINCT COMMERCIAL PRODUCT IN TER MS OF NAME AND CHARACTER AND THEREFORE, THIS UNIT WAS ALSO NOT ENGAGED IN MA NUFACTURING SO AS TO ALLOW THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT AND DENI ED THE SAME. THE AO FURTHER OBSERVED THAT IN THE P&L ACCOUNTS OF M/S. C HROMEWELL INDUSTRIES, FARIDABAD (ENGAGED IN FABRICATION OF SHEET METAL CO MPONENTS) AND M/S GSP POWER PROJECTS, DELHI (HEAD OFFICER) (PROVIDING VAR IOUS SERVICES LIKE INSTALLATION AND AMCS OF DG SETS ETC.) I.E. THE NON EXEMPT UNITS , THE ASSESSEE DEBITED CERTAIN EXPENSES, WHICH WERE NOT PERTAINING SPECIFI CALLY TO DELHI AND FARIDABAD UNITS BUT TO ALL THE UNITS. SUCH EXPENSES WAS QUANTIFIED AT RS. 26,82,288/- AND ALLOCATED TO ALL THE UNITS IN CERTA IN RATIOS AS MENTIONED IN THE 9 ITA NOS. 2955/DEL/2009 & ORS ORDER THEREBY REDUCING THE PROFITS OF EXEMPT UNITS AND CONSEQUENTIAL CLAIM OF DEDUCTION U/S 80IB AND 80IC, WITHOUT PREJUDICE TO H IS DECISION OF NON ELIGIBILITY OF CLAIM OF DEDUCTION U/S 80IB AND 80IC AND IN ALTERNATIVE, IF THE EXEMPT UNITS ARE HELD TO BE ELIGIBLE TO CLAIM OF SU CH DEDUCTION. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF EXCISE DUTY REFUND OF RS. 4,20,70,384/- RECEIVED BY M/S GSP POWER PROJECTS, J AMMU AND RS. 17,16,878/- RECEIVED BY M/S GSP STRUCTURES, JAMMU. THE AO RELYING ON THE DECISION OF LIBERTY INDIA VS. CIT 317 ITR 218 (SC) HELD THAT THE EXCISE DUTY REFUND AS PROFITS NOT DERIVED FROM THE INDUSTRIAL U NDERTAKING AND NOT ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. 6. FOR A.Y.2009-10, ON THE SIMILAR LINES OF A.Y. 20 08-09, THE AO MADE ADDITIONS. 7. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) AGAINST THE ORDER PASSED U/S 143(3) DATED 31-12-2008 FOR A.Y. 2006-07 . DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FILED AN APPLIC ATION FOR ADMISSION OF ADDITIONAL EVIDENCES DATED 12-02-2009 UNDER RULE 46 (1)(D) OF THE INCOME TAX RULES, 1962. THE APPLICATION ALONGWITH THE RELEVANT DOCUMENTS IN THE PAPER BOOK WERE FORWARDED TO THE ASSESSING OFFICER FOR HE R COMMENTS VIDE LETTER NO. 1602-03 DATED 13-02-2009 FOR COMPLIANCE BY 24-02-20 09. THE ASSESSING OFFICER VIDE LETTER NO. 978 DATED 24-02-2009 HAD SU BMITTED THE FOLLOWING COMMENTS BEFORE THE CIT(A):- DURING THE ASSESSMENT PROCEEDING ASSESSEE WAS GIVE N SUFFICIENT OPPORTUNITY TO PROVE HIS CLAIM IN SUPPORT OF DEDUCT ION U/S 80-IB BUT ASSESSEE FAILED TO PROVE HIS CLAIM.THE ONUS TO PROV E WAS ON ASSESSEE. WHEN ASSESSEE FAILED TO DISCHARGE THIS ONUS, THE CL AIM MADE WAS NOT ADMITTED. THE DENIAL OF DEDUCTION IS COMPLETELY IN LINE WITH THE PROVISION OF LAW & THEREFORE, SUBMISSION MADE NOW SHOULD NOT BE ADMITTED. THE 10 ITA NOS. 2955/DEL/2009 & ORS ASSESSEE HAS ALSO NOT POINTED OUT ANY REASON FOR NO T RAISING THESE ADDITIONAL SUBMISSION DURING THE COURSE OF ASSESSME NT PROCEEDING. THEREFORE, THE CONDITION OF SECTION 46-A FOR ADMISS ION OF THESE ADDITIONAL SUBMISSIONS HAVE NOT BEEN FULFILLED. THEREFORE, THE GROUND OF APPEAL RAISED SHOULD BE REJECTED. SINCE ADDITIONAL EVIDENCES HAVE BEEN FILED BY THE A SSESSEE WHICH WERE NOT FILED AT THE TIME OF ASSESSMENT PROC EEDING, THE SAME NEEDS PROPER VERIFICATION. AND IT IS NOT POSSIBLE F OR THIS OFFICE TO VERIFY THE SAME IN GIVEN TIME BY YOUR HONOUR. THERE FORE, IT IS REQUESTED TO VERIFY THE CLAIM OF ASSESSEE THIS OFFI CE SHOULD BE PROVIDED AT LEAST 30 DAYS. THE SAME MAY KINDLY BE A CCEPTED IN THE INTEREST OF THE REVENUE . 8. THEREAFTER, THE CIT(A) DIRECTED THE ASSESSING OF FICER TO EXAMINE THE ADDITIONAL EVIDENCE UNDER RULE 46A IN ACCORDANCE WI TH THE PROVISIONS OF RULE 46A(3) OF THE INCOME TAX RULE, 1962 AND REPORT BY 2 3-03-2009. ON 23-03- 2009, THE CONCERNED ASSESSING OFFICER APPEARED BEFO RE THE CIT(A) AND REQUESTED FOR MORE TIME FOR VERIFICATION OF THE ADD ITIONAL EVIDENCES. AFTER DISCUSSION, SHE WAS ALLOWED TO SUBMIT THE REQUISITE REPORT UNDER RULE 46A AND THE CASE WAS ADJOURNED TO 15-04-2009. HOWEVER, THE AO DID NOT SUBMIT THE REPORT BY THE APPOINTED TIME. THE CIT(A) ADMITTED T HE ADDITIONAL EVIDENCE AND THEREBY CALLED FOR ASSESSMENT RECORDS. AFTER VERIFI CATION OF THE EVIDENCES, THE CIT(A) OBSERVED THAT THE EVIDENCES BROUGHT BEFORE T HE CIT(A) WAS PART OF THE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND WERE ALSO EXAMINED, BUT THE AO DID NOT COMMENTED ON THE SAME. THE CIT(A) HELD T HAT THE EVIDENCES CLEARLY POINT TO THE FACT THAT THE ASSESSEE WAS MANUFACTURI NG AND NOT RADING IN DG SETS. THE SAME WAS CLEARLY SET OUT IN PARAS 19, 20, 21, 22, 23 AND 24 OF THE CIT(A)S ORDER. THUS, THE CIT(A) HELD THAT THE ASSE SSEE CONCLUSIVELY PROVED BY VARIOUS EVIDENCES ON RECORD THAT ASSESSEE WAS MANUF ACTURER OF BOTH DG SETS AND PRE-FABRICATED SHELTERS, AND THERE IS NO TRADIN G OF THE D.G. SETS AND PRE- 11 ITA NOS. 2955/DEL/2009 & ORS FABRICATED SHELTER, ASSESSEE IS ENTITLED FOR DEDUCT ION U/S. 80IB OF THE ACT AND GRANTED THE SAME. 9. FOR A.Y. 2007-08, THE CIT(A) ALLOWED THE DEDUCTI ON U/S. 80IB TO THE ASSESSEE. AS RELATES TO ISSUE OF DISALLOWANCE U/S 4 0(A)(IA) OF THE ACT, THE CIT(A) ALLOWED THE SAME BY HOLDING THAT FOR THE YEAR UNDER CONSIDERATION, NO LIABILITY FOR DEDUCTION OF TDS U/S. 194C(1) WAS ATTRACTED, TH EREFORE, THE SAME DISALLOWANCE WAS DELETED BY THE CIT(A). 10. FOR A.Y. 2008-09, THE CIT(A) ALLOWED THE DEDUCT ION U/S 80IB OF THE ACT ON THE BASIS OF THE EARLIER CIT(A)S ORDERS FOR A.Y S. 2006-07 & 2007-08. THE CIT(A) HELD THAT THE FACTS AND CIRCUMSTANCES OF THE CASE FOR A.Y. 2008-09 ARE IDENTICAL TO EARLIER YEARS IN AS MUCH AS THE BUSINE SS ACTIVITY DURING THIS YEAR REMAINS SAME AS THAT OF MANUFACTURING OF DG SETS AN D PRE-FABRICATED SHELTERS, THEREFORE, THE ASSESSEE IS HELD ELIGIBLE FOR CLAIM FOR DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF ITS PROFITS DERIVED FROM M/S. GSP POWER PROJECTS, JAMMU. THE CIT(A) ALSO ALLOWED THE CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF PROFITS FROM M/S. GSP STRUCTURES, JAMMU. DISPUTE RELATING TO DIS ALLOWANCE OF CLAIM OF DEDUCTION U/S. 80IC OF THE ACT IN RESPECT OF M/S GS P PROJECTS, KASHIPUR, UTTARAKHAND. THE CIT(A) FOLLOWED THE DECISION OF TH E HONBLE DELHI HIGH COURT IN CASE OF CIT VS. JACKSON ENGINEERS LTD. (231 CTR 348) AND FURTHER HELD THAT THE DG SET IS THE FINAL PRODUCT WHICH HAS A DISTINC TIVE NAME, CHARACTER AND FUNCTION DIFFERENT FROM EACH OF THE COMPONENTS. THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S 80IC O F THE ACT. AS RELATES TO DISALLOWANCE OF DEDUCTION U/S 80IB OF THE ACT ON TH E EXCISE DUTY REFUND RECEIVED BY TWO UNITS NAMELY M/S. GSP POWER PROJECT S AND M/S. GSP STRUCTURES AT JAMMU, THE CIT(A) ALLOWED THE SAID CL AIM. 11. FOR A.Y. 2009-10, THE CIT(A) ALLOWED THE CLAIM U/S 80IB & 80IC OF THE ASSESSEE ON THE SIMILAR GROUNDS. THE CIT(A) UPHOLD THE ADDITION OF RS. 12 ITA NOS. 2955/DEL/2009 & ORS 68,66,109/- IN RESPECT OF ALLOCATION OF THE COMMON EXPENSES IN PROPORTION TO THE TURNOVER OF VARIOUS UNITS. 12. THE LD. DR SUBMITTED THAT SINCE, THE NEW ADDITI ONAL EVIDENCE/ DOCUMENTS HAD BEEN ADMITTED WITHOUT CONSIDERING THE REASONABLENESS, GENUINENESS AND RELIABLENESS OF THE ADDITIONAL EVID ENCE AND DESPITE ADVERSE COMMENTS/ OBJECTIONS BY THE ASSESSING OFFICER WHICH REQUIRED DETAILED ENQUIRIES, THE CONDITIONS OF SECTION 46A FOR ADMISS ION OF THESE ADDITIONAL SUBMISSIONS HAVE NOT BEEN FULFILLED AND IS CONTRARY TO THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962. THEREFORE, THE O RDER OF THE CIT(A) IS LIABLE TO BE RESTORED TO THE FILE OF THE CIT(A) TO BE DECI DED DE NOVO AS PER LAW AFTER COMPLYING WITH THE PROVISIONS OF RULE 46A OF THE RU LES ALLOWING THE ASSESSING OFFICER A REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD AND THEREAFTER PASS AN ORDER IN ACCORDANCE WITH LAW. THE LD. DR SU BMITTED THAT THE CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY TAK ING INTO ACCOUNT ADDITIONAL EVIDENCE DESPITE PROPER OPPORTUNITY WAS GIVEN BEFOR E THE ASSESSING OFFICER . THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEES MA NUFACTURING ACTIVITIES WERE IN DELHI BUT ONLY BILLING IS DONE IN JAMMU, IT IS J UST TRADING AND NOT MANUFACTURING. THEREFORE, THE CLAIM FOR SECTION 80I B OF THE ACT DOES NOT SUSTAIN. FOR A.Y. 2007-08, THE FINAL TAXABLE INCOME WAS DETERMINED AT RS.26,19,22,380/- IN WHICH THE A.O. DENIED THE ASSE SSEES CLAIM OF DEDUCTION U/S 80IB ON JUST AND PROPER GROUND OF THE LAST YEAR THAT THE ASSESSEE WAS NOT MANUFACTURING DG SETS AT JAMMU UNIT, (AND ADDING IT IN THE COMPUTATION OF TOTAL INCOME, WHICH IS EVIDENTLY NOT APPROPRIATE AN D COGENT, AS CHAPTER VI DEDUCTIONS ARE MADE OUT OF THE GROSS TOTAL INCOME) AND ALSO EFFECTED AN ADDITION U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS. 1,03,50,120/-. FOR A.Y. 2008-09 AND 2009-10, RELATING TO EXCISE DUTY REFUND , THE AO RIGHTLY RELIED UPON THE DECISION IN CASE OF LIBERTY INDIA VS. CIT 317 ITR 218 (SC) WHEREIN IT WAS HELD THAT THE EXCISE DUTY REFUND AS PROFITS NOT DERIVED FROM THE INDUSTRIAL 13 ITA NOS. 2955/DEL/2009 & ORS UNDERTAKING AND NOT ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. AS RELATES TO THE OTHER ISSUES THE LD. DR RELIED UPON THE ASSESSM ENT ORDERS. 13. THE LD. AR RELIED UPON THE ORDERS OF THE CIT(A) IN ALL THE ASSESSMENT YEARS. THE LD. AR ALSO POINTED OUT THAT THERE WAS N OTHING TO SHOW BY THE ASSESSING OFFICER THAT JAMMU UNIT WAS ONLY FOR THE BILLING. IN FACT, THE ASSESSEE HAS GIVEN ALL THE DOCUMENTARY PROOFS TO SU BMIT THAT THE MANUFACTURING ACTIVITY CARRIED OUT BY THE JAMMU UNI T. THE LD. AR SUBMITTED THAT THE CIT(A) HAS RIGHTLY ALLOWED THE 80IB AND 80 IC CLAIMS MADE BY THE ASSESSEE AS WELL AS THE REFUND OF EXCISE DUTY. THE LD. AR SUBMITTED THAT IN RESPECT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT, T HE CIT(A) RIGHTLY ALLOWED THE SAME BY HOLDING THAT FOR THE YEAR UNDER CONSIDERATI ON, NO LIABILITY FOR DEDUCTION OF TDS U/S. 194C(1) WAS ATTRACTED. AS REL ATES TO ADDITION OF RS. 68,66,109/- IN RESPECT OF ALLOCATION OF THE COMMON EXPENSES IN PROPORTION TO THE TURNOVER OF VARIOUS UNITS, THE CIT(A) WAS NOT C ORRECT AS THE AO MADE THE SAID ADDITION MERELY ON THE BASIS OF SURMISES AND C ONJECTURES, THEREBY REDUCING THE PROFITS OF THE UNITS IN JAMMU AND KASH IPUR AND IN TURN INCREASING THE PROFITS OF HEAD OFFICE BY THE SAME A MOUNT. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT(A) IN PARA 9, 10, 19 AND 20 OF TH E ORDER HELD AS UNDER (EXTRACT OF CIT(A) ORDER FOR A.Y. 2006-07):- PARA 9. GIVEN THE ABOVE SITUATION, THE ASSESSMENT RECORDS ( IN FOUR VOLUMES) WERE CALLED FOR FROM THE OFFICE OF THE AO WHICH SHE PRODUCED, BUT STILL NEVER ATTENDED THIS OFFICE EVEN IN SUCH EVENT UALITY, PROBABLY 'IN THE INTEREST OF REVENUE,' AS SHE HAS REQUESTED FOR TIME IN HER COMMENTS DATED 24.02.2009. AS PER MY EXAMINATION OF THE ASSESSMENT FOLDERS, I FIND THAT THE AO WAS CONDUCTING ENQUIRIES FOR EXTRANEOUS IRRE LEVANT AND INFORMATION WHICH IS, E.G., EVIDENT FROM HER LETTER WRITTEN TO THE APPELLANT ON 16.03.2009 WHICH WAS COMPILED WITH BY THE APPELLANT ON 23.03.2009. THE 14 ITA NOS. 2955/DEL/2009 & ORS AO TARGETED ENORMOUS ENQUIRIES BY ISSUING SUMMONS T O THE FOLLOWING TWO PARTIES FOR HER SO-CALLED VERIFICATION' OF THE DOC UMENTS NO: 1580 AND 1588 OF THE PAPER BOOK: I) HUTCHINSON ESSAR TELECOM LIMITED OR VODAFONE ESSAR MOBILE SERVICES LTD. II) MAHINDRA AND MAHINDRA. THE DETAILS OF INFORMATION SOUGHT BY THE AO IN THES E SUMMONS CLEARLY EVIDENCE THAT SHE WAS MAKING THE OFF-THE-TA NGENT ENQUIRIES WHICH ARE TOTALLY IRRELEVANT TO DETERMINE THE AUTHENTICIT Y OF THE CERTIFICATES SUBMITTED BY THE ABOVE PARTIES, AND RATHER SHE WAS OPENING THE ENTIRE GAMIT OF SPRAWLING FRESH INVESTIGATIONS WHICH WERE NOT REQUIRED AT ALL, ESSENTIALLY FOR THE REQUISITE VERIFICATION, NOT EVE N THE PRODUCTION OF THE PERSONS DESIRED BY HER, FURTHER, THESE ABOVE PARTIE S HAVE SUBMITTED THE INFORMATION AND THE DOCUMENTS WHICH WERE EITHER PRO DUCED AT THE TIME OF ASSESSMENT PROCEEDING OR, EVEN THE SITE WAS VISITED BY THE A.O IN THE CASE OF VODAFONE ON 29/12/2008, AS INFORMED BY THEM IN T HEIR LETTERS DATED 6/3/2009 & 30/3/2009 IN THE FRESH ENQUIRIES BY THE A.O. AS FAR AS THE ENQUIRIES FROM M & M IS CONCERNED, THERE IS ONLY ON E ORDER-SHEET ENTRY DATED 15/4/2009 WHEREBY THE REQUISITE DOCUMENTS WER E FURNISHED BY IT AND WERE PLACED ON RECORD BY THE A.O. I HAVE PERUS ED THESE DOCUMENTS ON RECORD REGARDING M & M WHICH CLEARLY ESTABLISH THE CASE OF THE APPELLANT IN DISPROVING THE UNFOUNDED INFERENCES OF THE A.O FROM THE ANALYSIS OF THE INFORMATION (WHICH WAS NOT AT ALL DESIRABLE OR NECE SSARY FOR CONDUCTING THE VERIFICATION AIMED AT BY THE A.O). IT IS ESTABLISH ED THAT BOTH THE DOCUMENTS NO: 1580 & 1588 STAND RATHER AUTHENTICATED AS NOTHI NG GOES AGAINST THE APPELLANT FROM THE MATERIAL GATHERED ON RECORD BY T HE A.O. THEREFORE, DESPITE THE FACT THAT THE A.O HAS MADE EXTENSIVE EN QUIRIES BEYOND THE SCOPE OF RULE 46A(3), THESE DOCUMENTS BEING SUPPORT IVE OF THE ASSESSEE STAND ADMITTED AS VERIFIED. 15 ITA NOS. 2955/DEL/2009 & ORS 10. AS FAR AS THE DOCUMENT NO: 1581 ,1582-87 AND 15 89 OF THE PAPER BOOK ARE CONCERNED, THE A.O HAS NOT MADE ANY EFFORT FOR THEIR VERIFICATION AS IS APPARENT FROM THE ASSESSMENT FOLDERS IN VOLUM E II. THEREFORE, HER SILENCE ON THEM ESTABLISHES THEIR AUTHENTICITY ABUN DANTLY, EVEN THOUGH THEY ARE THE RECORDS OF VARIOUS GOVERNMENT FUNCTION ARIES. IT IS THEN PRESUMABLY INFERRED THAT PRIMARILY BECAUSE ALL THE ABOVE FRESH EVIDENCE RATHER ESTABLISHED AND SUPPORTED THE CASE OF THE AS SESSEE THAT HE WAS MANUFACTURING D.G SETS AND PRE-FABRICATED SHELTERS, THE A.O HESITATED IN SUBMITTING THE REQUIRED REPORT BY WITHHOLDING IT, O NCE AGAIN IN HER BLINKERED NOTION OF DOING THINGS IN THE INTEREST O F REVENUE. THUS FROM THE ABOVE, IT BECOMES EVIDENT THAT EVEN THOUGH THE A.O HAD TACITLY ADMITTED THESE EVIDENCES WHEN SHE HAD REQUESTED FOR THEIR VE RIFICATION, YET IN THE INTEREST OF REVENUE, VERIFICATION OF THESE DOCUMEN TS WAS ALLOWED, WHICH HAS RESULTED FAVOURABLY TO THE ASSESSEE AS BROUGHT ABOUT ABOVE. . 19. I HAVE GONE THROUGH THE DETAILS OF PLANT AND MACHINERY AND ALSO THE COPIES OF BILLS RELATING THE PURCHASE OF THE SAME F ILED BY THE APPELLANT. THE MACHINERIES HAVE BEEN DEPLOYED FOR VARIOUS PURPOSES LIKE:- MOLDING OF PUFF/SHELTERS PANEL, AIR SUPPLY TO VARIOUS MACHINE S, SHEET BANDING, MANUFACTURING OF PRE-FABRICATED PANELS/SHELTER, CHI LLER PLANT FOR COOLING TOWER, ASSEMBLING OF DG SETS, BESIDES A FEW MACHINE S FOR LIFTING AND SHIFTING WORK. THUS IT IS CLEAR THAT A NUMBER OF M ACHINES FOR VARIOUS PURPOSES HAVE BEEN DEPLOYED BY THE APPELLANT IN ITS MANUFACTURING PROCESS. THE A.O HAS PICKED OUT AND HIGHLIGHTED ON LY THOSE MACHINES WHICH ARE USED FOR LIFTING AND SHIFTING WORK AND AS SEMBLING OF THE DG SET AND HAS IGNORED THE OTHER MACHINES USED BY THE APPE LLANT AND THUS ARRIVED AT A WRONG CONCLUSION. THE A.O. OUGHT TO HA VE LOOKED INTO THE NATURE OF ALL THE MACHINES USED BY THE APPELLANT BE FORE ARRIVING AT ANY CONCLUSION. IT IS, THEREFORE, EVIDENT THAT THE MACH INERIES WERE EMPLOYED IN THE MANUFACTURING PROCESS. THE BILLS OF CARTAGES IN WARD, AND THE 16 ITA NOS. 2955/DEL/2009 & ORS TRANSPORTATION COPIES OF GRN'S WERE ALSO PLACED ON RECORD BY THE LD. AR TO PROVE THE PURCHASES OF RAW MATERIAL AND DISPATCH OF FINISHED GOODS I.E. DG SETS. THE ABOVE EVIDENCES BEING PART OF THE BOOKS O F ACCOUNTS WERE THERE BEFORE THE A.O. AND WERE ALSO EXAMINED BY HER BUT I T APPEARS THAT WHILE PASSING HER ASSESSMENT ORDER, SHE HAS CHOSEN NOT TO COMMENT ON THE SAME OSTENSIBLY FOR THE REASON THAT THERE IS NOTHIN G ADVERSE QUA THESE EVIDENCES. ALL THESE EVIDENCES CLEARLY POINT TO THE FACT THAT THE ASSESSEE WAS MANUFACTURING AND NOT TRADING IN DG SETS. SINCE THE A.O. HAS NOT COMMENTED ON THESE FACTS IN HER ASSESSMENT ORDER NO R HAS FILED HER COMMENTS ON THE SUBMISSIONS MADE BY THE APPELLANT B EFORE ME, IT IS APPARENT THAT THERE IS NO INFIRMITY IN THE ABOVE FA CTS AND IT STANDS PROVED FROM THE ASSESSEE'S OWN BOOKS THAT THE APPELLANT WA S INVOLVED IN A MANUFACTURING PROCESS. BESIDES PROVING THIS FACT FR OM HIS OWN BOOKS, THE APPELLANT HAS ALSO FILED THIRD PARTIES (GOVERNMENTA L AUTHORITIES) EVIDENCES IN THE FORM OF REGISTRATION WITH SSI, SALES TAX AUT HORITIES AT JAMMU, DIRECTORATE OF INDUSTRIES AND COMMERCE, JAMMU AND K ASHMIR AND EXCISE REGISTRATION CERTIFICATE WHICH CLEARLY STATE THAT T HE APPELLANT HAS BEEN REGISTERED WITH THE STATUTORY AUTHORITIES FOR MANUF ACTURING OF DG SETS/ PRE-FABRICATED SHELTERS. THESE EVIDENCES SPEAK BY T HEMSELVES THAT THE APPELLANT WAS MANUFACTURING DG SETS. FOR EXAMPLE, T HE ANALYSIS OF THE DOCUMENT NO. 1520 PERTAINING TO CENTRAL EXCISE REGI STRATION CERTIFICATE (FORM RC), SHOWS THAT IN THE REGISTRATION NUMBER, A FVPP5777 KXMOOZ, THE LETTER 'M' STANDS FOR MANUFACTURE; IT WOULD HAV E BEEN 'D', IF THE ASSESSEE WAS A 'DEALER', I.E. TRADER. MOREOVER, THI S DOCUMENT SUFFICIENTLY SHOWS THAT THE UNIT IS LOCATED IN SIDCO INDUSTRIAL COMPLAX, PHASE-II, BARI BRAHMANA IND. COMPLEX, JAMMU, WHERE THERE CAN'T LEG ALLY BE ANY TRADING ACTIVITY, BUT ONLY INDUSTRIAL ONE. THE STOCK REGIST ERS MAINTAINED AS PER THE EXCISE RULES SHOW THE QUANTITY OF THE RAW MATERIAL CONSUMED AND THE FINISHED GOODS MANUFACTURED BY THE APPELLANT. IN AN Y CASE, THESE RECORDS ARE REQUIRED TO BE MAINTAINED BY A MANUFACTURING UN IT AND NOT BY A TRADING UNIT. THE RG 23A, PART-1 CLEARLY MENTIONS T HE VARIOUS RAW 17 ITA NOS. 2955/DEL/2009 & ORS MATERIALS UTILIZED BY THE APPELLANT IN THE MANUFACT URING PROCESS. THE APPELLANT HAS ALSO PRODUCED A TOLL TAX EXEMPTION CE RTIFICATE FROM THE DIRECTORATE OF INDUSTRIES AND COMMERCE JAMMU AND KA SHMIR ON SPECIFIED RAW MATERIAL IMPORTED INTO THE STATE BY HIM. THIS C ERTIFICATE IS GRANTED BY THE DIC TO A UNIT SET UP IN JAMMU, ALLOWING IT TO I MPORT RAW MATERIAL UPTO A SPECIFIED LIMIT AND EXPORT FINISHED GOODS UPTO AS SPECIFIED LIMIT WITHOUT PAYMENT OF TOLL TAX. THE CERTIFICATE ISSUED TO THE APPELLANT SHOWS VARIOUS ITEMS LISTED AS RAW MATERIAL WHICH COULD BE IMPORTE D INTO JAMMU FOR MANUFACTURING DC SETS WITHOUT PAYING TOLL TAX. BEIN G AGAIN AS STATUTORY CERTIFICATE ISSUED BY A GOVT. BODY, THE SAME CARRIE S FULL WEIGHT AND IT ALSO CLEARLY DEMONSTRATES THAT THE APPELLANT HAS PURCHAS ED RAW MATERIAL FOR MANUFACTURING DC SETS. THE ASSESSEE'S STATEMENT ON RECORD ALSO STATES THA T HE WAS MANUFACTURING DC SETS AND NOT TRADING IN T HEM AND HIS STATEMENT RATHER EXPLAINS VOCIFEROUSLY THE MANUFACT URING PROCESSES OF HIS UNIT AT JAMMU THROUGH ELABORATE QUESTIONNAIRE POSED BY THE AO TO HIM. A CERTIFICATE HAS ALSO BEEN PRODUCED BY THE ASSES SEE FROM MAHINDRA AND MAHINDRA STATING THAT THE ASSESSEE WAS ITS OEM(ORIG INAL EQUIPMENT MANUFACTURER) AND THAT IT SUPPLIED ENGINES TO THE A SSESSEE FOR MANUFACTURING DC SETS. THE CERTIFICATE GOES ON TO S TATE THAT THE ASSESSEE WAS NOT AUTHORIZED TO TRADE IN DG SETS. THIS PIECE OF EVIDENCE BEING UNREBUTTED BY THE A.O. FURTHER STRENGTHENS THE ASSE SSEE'S CASE. 20. ALL THE ABOVE FACTS AND DETAILS DEMONSTRATE THAT T HE APPELLANT HAD ALREADY ALL THOSE EVIDENCES GENERATED BY THE INTERN AL RECORDS MAINTAINED, APART FROM THE THIRD PARTY EVIDENCES PRODUCED DURIN G THE COURSE OF ASSESSMENT AND APPEAL PROCEEDINGS, THE PREPONDERANC E OF WHICH PROVES THAT THE APPELLANT IN M/S GSPP PRODUCED A DISTINCT AND NEW COMMODITY AFTER A TRANSFORMATION FROM THE RAW MATERIALS EMPLO YED BY HIM, AND HENCE THERE WAS A 'MANUFACTURE', NOT A 'TRADE', IN VIEW O F THE DECISIONS OF THE APEX COURT IN THE CASES OF NAME TULAMAN MANUFACTURE RS PVT. LTD. VS. 18 ITA NOS. 2955/DEL/2009 & ORS COLLECTOR OF CENTRAL EXCISE, (1990) 183 ITR 577 (SC ), CIT VS. N.C. BUDHIRAJA & CO. & ANOTHER, (1993) 209 ITR 412 (SC), AND ARTHUR E. NEWELL VS. CIT (1997) 223 ITR 776. THE A.O'S REFERE NCE TO THE WORDS 'MANUFACTURE',' MANUFACTURE/PRODUCE' AND ARTICLE O R THING' EXPLAINED IN PARA 4.2, 4.3 AND 4.4 OF HER ORDER, IS ONLY GENERAL , AND RATHER PROVES THE CASE OF THE ASSESSEE IN ALL RESPECTS, AND ENTITLES THE ASSESSEE TO CLAIM DEDUCTION U/S 80 IB OF THE I.T. ACT, 1961. IT CAN BE SEEN THAT THE ASSESSEE HAS PRODUCED CERTA IN ADDITIONAL EVIDENCE BEFORE THE CIT(A) WHICH WAS RIGHTLY ADMITTED BY THE CIT(A). AS PER THE FACTS AND CIRCUMSTANCES IT CANNOT BE HELD THAT CIT(A) VIO LATED RULE 46A, HE HAD ACTED IN A JUDICIOUS AND PROPER MANNER AND HIS ORDE R BEING BASED ON PROPER APPRECIATION OF FACTS AND RECORD CANNOT BE CALLED V IOLATIVE OF A PROCEDURAL PROVISION. THE CIT(A) IS STATUTORY FIRST APPELLATE AUTHORITY AND HAS INDEPENDENT POWER OF CALLING FOR INFORMATION AND EXAMINATION OF EVIDENCES AND POSES CONTERMINOUS POWER OF ASSESSMENT APART FROM APPELLA TE POWERS. THUS, THE CIT(A)S ORDER IS TO BE UPHELD. THE MATTER SHOULD N OT BE SET ASIDE ON GENERAL GROUND AS IT AMOUNTS TO CAUSING THE ASSESSEE INJUST ICE AND GIVING THE AO ANOTHER INNINGS. THEREFORE, THE CIT(A) HAS DECIDED THE ISSUE IN JUST AND PROPER MANNER THE SAME IS UPHELD. 15. THE CIT(A) ON THE ISSUE OF DISALLOWANCE OF CLA IM OF DEDUCTION U/S 80 IB HAS HELD THAT THE PROCESS FLOW CHART OF MANUFACTURI NG OF DG SETS FILED BY THE ASSESSEE EXHAUSTIVELY DESCRIBES THE MANUFACTURING P ROCESS WHICH INVOLVES THREE STAGES I.E. MANUFACTURING OF CANOPY OF DG SE TS, MANUFACTURING OF DG SET AND MANUFACTURING OF AMF PANEL WHICH ALSO INCLU DES DRILLING, CUTTING 19 ITA NOS. 2955/DEL/2009 & ORS ACOUSTIC FOAM PASTING, FIXING OF ELECTRICAL ITEMS, DRILLING OF MOUNTING PLATE FIXING OF SWITCH GEAR, LOAD TESTING, SOUND TESTING ETC. T HE CIT(A) FURTHER HELD THAT THE PROCESS OF MANUFACTURING DG SETS DOES NOT INVOLVE M ERE ASCENDING OF PARTS BUT IS ACTUALLY A MANUFACTURING PROCESS RESULTING IN TH E MANUFACTURE OF NEW PRODUCT FROM THE RAW MATERIALS BY GIVING THEM NEW P ROPERTIES. THE CIT(A) HAS EXHAUSTIVELY GIVEN ITS FINDING BASED ON THE EVIDENC ES PLACED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). T HE CIT(A) HAS ALSO GONE THROUGH THE DETAILS OF PLANT AND MACHINERY AND ALS O THE COPIES OF BILLS RELATING TO THE PURCHASE OF THE SAME FILED BY THE ASSESSEE. THE CIT(A) HAS ALSO GIVEN CLEAR FINDING THAT THE ASSESSING OFFICER HAS PICKE D OUT AND HIGHLIGHTED ONLY THOSE MACHINES WHICH ARE USED FOR LIFTING AND SHIFT ING WORK AND ASCENDING ON THE DG SET AND IGNORED THE OTHER MACHINES USED BY T HE ASSESSEE FOR VARIOUS PURPOSES DEPLOYED BY THE ASSESSEE IN ITS MANUFACTUR ING PROCESS. AFTER CAREFUL CONSIDERATION, THE CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 80 IB OF THE ACT. THERE IS NO NEED TO INTERFER E WITH THE DETAILED FINDING ON RECORD GIVEN BY THE CIT(A). THEREFORE, THIS ISSUE IS DECIDED CORRECTLY BY THE CIT(A) IN ALL THE ASSESSMENT YEARS AND THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). 16. AS RELATED TO ISSUE RELATED TO ADDITION U/S 40( A) (IA) OF THE ACT AMOUNTING TO RS.1,03,50,120/- IN ASSESSMENT YEAR 2007-08. TH E CIT(A) HELD THAT AS PER THE PROVISIONS OF SECTION 194C WHICH WAS MADE EFFEC TIVE BY THE FINANCE ACT 2006 AND THE FINANCE ACT 2007 AND AMENDMENT WAS MAD E W.E.F 1/6/2007. THE CIT(A) FURTHER HELD THAT THE PROVISIONS OF SECT ION 194C (A) DOES NOT BECOME APPLICABLE IN THE INSTANT CASE BECAUSE THE ASSESSEE IS AN INDIVIDUAL BEING THE PROPRIETOR OF M/S GSP POWER PROJECTS AND M/S CROMWE LL INDUSTRIES WITH THE ASSESSMENT YEAR INVOLVED UNDER REFERENCE IS 2007-08 I.E AFTER 1/6/2007 SINCE FOR THE YEAR UNDER CONSIDERATION NO LIABILITY FOR DEDUCTION OF TDS U/S 194C (1) IS ATTRACTED IN THE PRESENT CASE. THE ASSESSING OF FICERS ATTEMPT IN DISALLOWING THE AMOUNT U/S 40(A)(IA) IS UNWARRANTED. THERE IS NO NEED TO INTERFERE WITH THE 20 ITA NOS. 2955/DEL/2009 & ORS SAID FINDINGS. THEREFORE, THIS GROUND OF APPEAL FO R ASSESSMENT YEAR 2007-08 TAKEN BY THE REVENUE IS DISMISSED. 17. AS RELATED TO ISSUE RELATING TO EXCISE DUTY REF UND, THE CIT(A) HAS RIGHTLY RELIED UPON THE HON'BLE SUPREME COURT DECISION IN C ASE OF LIBERTY INDIA 317 ITR 218 WHEREIN IT IS HELD THAT THE PAYMENT F CENTR AL EXCISE DUTY HAD A DIRECT NEXUS WITH THE MANUFACTURING ACTIVITY AND SIMILARLY OF THE REFUND OF CENTRAL EXCISE DUTY ALSO HAD A DIRECT NEXUS WITH THE MANUFA CTURING ACTIVITY. THE ISSUE OF PAYMENT OF CENTRAL EXCISE DUTY WOULD NOT ARISE I N THE ABSENCE OF ANY INDUSTRIAL ACTIVITY. THERE IS INEXTRICABLE LINK BE TWEEN THE MANUFACTURING ACTIVITY, PAYMENT OF CENTRAL EXCISE DUTY AND ITS RE FUND. THEREFORE, THE CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLO W DEDUCTION U/ S 80IB ON THE EXCUSE DUTY REFUND RECEIVED BY THE ASSESSEE. THERE IS NO NEED TO INTERFERE WITH THE SAME FINDING. THIS ISSUE RAISED IN ASSESS MENT YEAR 2008-09 BY THE REVENUE IS DISMISSED. 18. AS RELATED TO NON ALLOWABILITY OF CLAIM OF DEDU CTION U/S 80IC, THE CIT(A) HAS GIVEN EXTENSIVE FINDING BASED ON THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). T HERE IS NO REQUIREMENT TO INTERFERE WITH THE SAID FINDINGS. THUS, THIS ISSUE IS ALSO DISMISSED. 19. AS RELATED TO CROSS-OBJECTION OF THE ASSESSEE, THE CIT(A) AFTER VERIFYING THE ISSUE OF ALLOCATION OF EXPENSES HAS GIVEN A FIN DING THAT THE ESTABLISHMENT EXPENSES CANNOT BE SAID TO BE BELONGING TO THE HEAD OFFICE ONLY THE ASSESSEE IS COORDINATING CONTROLLING AND EXECUTING BUSINESS AFF AIRS OF ALL THE UNITS AS PROPRIETOR IT CANNOT BE SAID THAT THE FIX ASSET, ST AFF, ESTABLISHMENT , SECURITY, TELEPHONE ETC OF THE HEAD OFFICE WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD NOT USED FOR THE WORK OF JAMMU & KASHIPUR UNITS. THE ASSESSEE HAS ALSO ADMITTED THAT THE PURCHASE AN D SALES ORDER EXEMPT UNITS PLACED EXECUTED AND DELHI ONLY. THERE IS NOTHING I N THE SUBMISSIONS THAT THE EXPENDITURE ON ACCOUNT OF AMCS WAS CLAIMED IN THE U NDERTAKINGS ARE ELIGIBLE FOR DEDUCTION U/S 80IB & 80IC OF THE ACT. THERE IS NO NEED TO INTERFERE WITH 21 ITA NOS. 2955/DEL/2009 & ORS THE FINDINGS OF THE CIT(A). THEREFORE, THE SOLE GR OUND IN CROSS OBJECTION IS DISMISSED. 20. IN RESULT, THE APPEAL OF THE REVENUES & CROSS O BJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01ST AUGUST, 2017 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 01/08/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 16/06/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 16/06/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY JM/AM 22 ITA NOS. 2955/DEL/2009 & ORS SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1.08.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 .0 8 .2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.