M/s CCL Products (India) Limited, Hyderabad V. ACIT, Circle-1(2), Hyderabad

ITA 840/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69767 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 24-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: SRIDHARAN; NOORUL HASSAN LAKSHMI KUMARAN
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 10B; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 840/HYD/2013 ASSESSMENT YEAR : 2007-08 CCL PRODUCTS (INDIA) LTD., APPELLANT HYDERABAD. (PAN ABWPN4588K) VS. ASST. COMMISSIONER OF INCOME-TAX, RESPONDENT CIRCLE 1(2), HYDERABAD. APPELLANT BY : SHRI MR. NOORUL HASSAN ADVOCATE FOR LAKSHMI KUMARAN & SRIDHARAN RESPONDENT BY : SHRI P. SOMA SEKHAR REDDY DATE OF HEARING : 04/09 /2013 DATE OF PRONOUNCEMENT : 1 3/09/2013 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-V, HYDERABAD DATED 28/02/2013 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 21(A) THAT THE CIT(A) ERRED IN CONCLUDING 10 YEAR PERIOD MENTIONED IN SECTION 10B (1) WILL BE RECKONE D FROM THE ASSESSMENT YEAR 1995-96 AND NOT FROM ASSESSMENT YEAR 2000-01 AND THAT ON A TRUE CONSTRUCTION OF SECTION 10B OF THE ACT, SECTION IS APPLICABLE TO AN 100% EOU AND H ENCE THE EARLIER PERIOD OF ITS OPERATION AS AN ORDINARY UNIT /NON-EOU IS NOT RELEVANT FOR APPLYING/COMPUTING 10 YEAR PERIOD OF EXEMPTION. ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 2 (B) THAT THE CIT(A) ERRED IN NOT ENTERTAINING THE G ROUND THAT THE INVESTMENTS IN NEW PLANT AND MACHINERY MAD E AFTER 01/04/2001 CONSTITUTED AN INDEPENDENT NEW INDUSTRIA L UNDERTAKING IN ITSELF AND HENCE ELIGIBLE FOR DEDUCT ION U/S 10B. (C) THE CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT TWO (2) NEW INDUSTRIAL UNDERTAKINGS HAVE BEEN FORMED IN THE YEAR 2001-02 AND 2004-05, WHICH ARE DISTINCT FROM T HE EXISTING UNIT AND ARE CAPABLE OF BEING OPERATED INDEPENDENTLY AND ACCORDINGLY AS PER SECTION 10B TH E BENEFIT HAS TO BE SEPARATELY EXTENDED TO EACH SEPARATE UNDE RTAKING. (D) THAT THE CIT(A) ERRED IN CONCLUDING THAT THERE WAS NO BROUGHT FORWARD LOSS ON ITS RECORDS. IN FACT, THE B ROUGHT FORWARD LOSSES WOULD HAVE BEEN AVAILABLE HAD THE DE DUCTIONS U/S 10B OF THE ACT BEEN ALLOWED FIRST BEFORE SETTI NG OFF THE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION FOR THE AY 2001-02 TO 2003-04. (E) THAT ON FACTS OF THE CASE, INTEREST U/S 234B, 2 34C AND 234D IS NOT LEVIABLE, AS MUCH AS THE BENEFIT OF SEC TION 10B WAS DENIED ONLY AFTER PASSAGE OF THE COMMISSIONERS ORDER U/S 263, BY WHICH TIME THE APPELLANT HAS FILED ITS RETURN FOR THE AY 2007-08. (F) THAT THE CIT(A) SHOULD HAVE ALLOWED DEPRECIATIO N CLAIM OF THE APPELLANT PARTICULARLY IN VIEW OF THE FACT T HAT PROPER BOOKS OF ACCOUNTS AS PRESCRIBED ARE MAINTAINED AND HAS ADEQUATE INTERNAL CONTROL SYSTEM AND INTERNAL AUDIT SYSTEM COMMENSURATING NATURE AND SIZE OF THE BUSINESS. 3. GROUND NOS. 21 (A), (B) & (C) RELATE TO THE ISSU E OF DEDUCTION CLAIMED U/S 10B OF THE ACT. 4. AT THE VERY OUTSET, THE LEARNED AR FAIRLY SUBMIT TED THAT THE MAIN ISSUE OF CLAIM OF DEDUCTION U/S 10B ALONG WITH OTHER RELATED ISSUES AS RAISED IN THIS GROUND HAVE BEEN DECIDED A GAINST THE ASSESSEE BY THE COORDINATE BENCH OF THIS TRIBUNAL I N ASSESSEES OWN CASE RELATING TO AY 2006-07 VIDE ORDER DATED 14 /12/2011 IN ITA NO. 487/HYD/2011. THE LEARNED AR NEVERTHELESS S UBMITTED ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 3 BEFORE US THAT THE ASSESSEE IS ENTITLED TO DEDUCTIO N U/S 10B IN CASE OF NEW UNITS AS IT HAS FILED SEPARATE AUDITED FINANCIAL STATEMENT IN RESPECT OF EACH UNIT. 5. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUPP ORTING THE ORDER OF THE CIT(A) SUBMITTED THAT AS THE ISSUE HAS BEEN SQUARELY COVERED BY THE DECISION OF ITAT IN ASSESSEES OWN C ASE FOR AY 2006-07 BOTH ON THE ISSUE OF CLAIM OF DEDUCTION U/S 10B AS WELL AS WITH REGARD TO AVAILABILITY OF 10B DEDUCTION IN CASE OF EXPANSION MADE WHICH HAS BEEN CLAIMED TO BE NEW UNI T, HENCE, THE ORDER OF CIT(A) SHOULD BE UPHELD. 6. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED MATERIALS ON RECORD AS WELL AS THE ORDERS O F THE REVENUE AUTHORITIES. AS CAN BE SEEN FROM THE ASSESSMENT ORD ER, THE CLAIM OF DEDUCTION U/S 10B OF THE ACT WAS REJECTED BY THE AO ON THE GROUND THAT A PERIOD OF 10 YEARS SHOULD BE RECKONED FROM THE ASSESSMENT YEAR 1996-97 WHEREIN COMMENCING OF MANUFACTURE/PRODUCTION STARTED. THE CIT(A) ALSO SUS TAINED THE FINDING OF THE AO BY FOLLOWING THE ORDER OF THE ITA T IN ITA NO. 487/HYD/2011 RELATING TO THE ASSESSMENT YEAR 2006-0 7 IN ASSESSEES OWN CASE. ON A PERUSAL OF THE ORDER DATE D 14/12/2011 IN ITA NO. 487/HYD/2011 OF THE COORDINATE BENCH REL ATING TO THE AY 2006-07, WE FIND THAT COORDINATE BENCH WHILE CON SIDERING IDENTICAL ISSUE HELD IN THE FOLLOWING MANNER: 21. ON MERIT, THE FIRST MOOT QUESTION ARISING OUT OF THIS APPEAL IS WHETHER THE PERIOD OF TEN CONSECUTIVE ASS ESSMENT YEARS IS TO BE RECKONED FROM THE DATE OF COMMENCEME NT OF THE MANUFACTURING AS A DTA UNIT OR FROM THE DATE OF COMMENCEMENT OF MANUFACTURE AS A EOU UNIT. WE FIND THAT THAT CBDT IN ITS CIRCULAR NUMBER1 DATED 6- 1-2005 H AS CLEARLY CLARIFIED THAT IN CASE OF A DTA UNIT, WHICH CONVERTS INTO AN EOU UNIT, THE UNIT CAN AVAIL THE DEDUCTION UNDER SECTION 10B OF THE ACT FROM THE YEAR IN WHICH IT RE CEIVES THE EOU STATUS APPROVAL. GIVEN THE FACT THAT THE SAID C BDT ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 4 CIRCULAR RECOGNIZE THE CONVERSION, IT SHOULD BE POS SIBLE TO CLAIM AND INCOME TAX EXEMPTION POST CONVERSION. HOW EVER, GIVEN THE PROVISIONS OF THE ACT UNDER CIRCULAR ANY UNIT WHICH HAS BEEN SET UP BEFORE APRIL 1 1999 WOULD NOT BE EL IGIBLE FOR THE SAME TAX DEDUCTION, IRRESPECTIVE OF WHEN THE CO NVERSION HAPPENS. HENCE IT IS VERY CLEAR THAT THE INTENTION OF THE CIRCULAR IS TO RECKON THE TEN YEARS EXEMPTION PERIO D WHICH STARTS FROM THE YEAR OF COMMERCIAL PRODUCTION IRRES PECTIVE OF WHEN THE CONVERSION HAPPENS. WHEN THERE IS AN AMBIG UITY IN THE INCENTIVE PROVISION, IT SHOULD BE LIBERALLY CON STRUED BUT AT THE SAME TIME WHEN THERE IS NO AMBIGUITY THERE I S NO QUESTION OF LIBERAL CONSTRUCTION. SINCE THE AFORESA ID CIRCULAR IS VERY CLEAR AND AMBIGUITY, IT IS TO BE FOLLOWED P LAINLY. WE ALSO DISAGREE WITH THE ARGUMENTS OF LEARNED COUNSEL FOR THE ASSESSEE THAT THE AFORESAID CIRCULAR IS NOT SPEAKI NG ONE AND DOES NOT CONTAIN ANY REASON WHATSOEVER AND THE SAME IS NOT BINDING ON THE ASSESSEE. IT IS PERTINENT TO NOTE TH AT ALL THE CIRCULARS ISSUED BY THE CBDT ARE BINDING ON THE ASS ESSING OFFICER AND ALSO THE JUDGMENTS RELIED ON BY THE DEP ARTMENTAL REPRESENTATIVE ALSO SUPPORTS OUR VIEW. THE AFORESAI D CIRCULAR IS VERY CLEAR AND THE INTENTION OF THE CIRCULAR IS THAT THE RECKONING OF THE TEN YEAR PERIOD STARTS FROM THE DA TE OF COMMERCIAL PRODUCTION EITHER AS A DTA UNIT OR AS AN EOU UNIT. THE TAX BENEFIT WOULD BE AVAILABLE FOR THE RE MAINING PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNIN G FROM THE PERIOD IT STARTED MANUFACTURING IN THE DOMESTIC TARIFF AREA. THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT SINCE THE ASSESSEE HAS AVAILED DEDUCTION UNDER SECTION 10B OF THE ACT FOR ONLY ONE ASSESSMENT YEAR 2000-01 , THE BENEFIT IS AVAILABLE FOR BALANCE 9 YEARS IS NOT COR RECT AS WE FIND THAT, ON PLAIN READING OF THE AFORESAID CIRCUL AR, THE EXEMPTION PERIOD ENDS AT THE TENTH YEAR OF ITS COMMISSIONING WHETHER AS DTA UNIT OR EOU UNIT. WE A LSO FIND THAT THE AFORESAID CIRCULAR, CERTAIN ILLUSTRAT IONS WERE GIVEN TO CLARIFY THE INTENTION OF THE CIRCULAR AND EVEN FROM SUCH ILLUSTRATIONS IT IS CLEAR THAT THE TEN YEAR PE RIOD IS TO BE RECKONED FROM THE DATE OF ITS ORIGINAL COMMERCIAL PRODUCTION. HENCE, THE GROUNDS RAISED BY THE ASSESS EE ON THIS ISSUE ARE HEREBY REJECTED. 22. NOW, WE TURN INTO THE ISSUE WHETHER THE ASSESSE E CAN MAKE A FRESH CLAIM DURING THE PROCEEDINGS UNDER SEC TION 263 OF THE ACT. IT IS WELL SETTLED LAW THAT THE ASS ESSEE CANNOT MAKE ANY FRESH CLAIM DURING THE PROCEEDINGS UNDER SECTION 263 OF THE ACT, BECAUSE THE PROCEEDINGS UND ER SECTION 263 OF THE ACT ARE INITIATED FOR THE BENEF IT OF REVENUE. HENCE, THE CIT WAS RIGHT IN REJECTING THE FRESH ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 5 CLAIM MADE BY THE ASSESSEE THAT IT HAS GONE FOR MAS SIVE EXPANSION AND HENCE, THE SAME SHOULD BE CONSIDERED AS SETTING UP OF NEW UNIT WHICH WOULD BE ENTITLED FOR DEDUCTION UNDER SECTION 10B OF THE ACT. EVEN OTHERWISE, ON EX PANSION, SUCH BENEFIT CANNOT BE CLAIMED WHATEVER MAY BE THE ADDITION TO PLANT AND MACHINERY OR ENHANCEMENT OF T HE PRODUCTION CAPACITY. THE CIT ALSO CATEGORICALLY FOU ND THAT THE ASSESSEE HAD ONLY SINGLE UNIT ON VERIFICATION O F THE RECORDS. IT IS ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT A NEW UNIT HAS COME INTO EXISTENCE ON EXPANSION ON ACCOUNT OF HUGE INVESTMENT IN PLANT AN D MACHINERY AND INCREASE IN PRODUCTION CAPACITY AND H ENCE, THE BENEFIT OF DEDUCTION UNDER SECTION 10B OF THE A CT IS TO BE GIVEN FOR EXPANDED UNIT, IS NOT CORRECT. THE INT ENSION OF LEGISLATION CLEARLY STATES THAT THE BENEFIT IS ADMI SSIBLE ONLY TO A NEW UNDERTAKING AND NOT FOR THE EXPANSION. HEN CE, EVEN ON THIS GROUND, THE ASSESSEE FAILS. AFTER CONS IDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE , INOUR CONSIDERED OPINION, THE ASSESSING OFFICER ALLOWED T HE DEDUCTION UNDER SECTION 10B OF THE ACT WRONGLY AND HENCE, THE CIT RIGHTLY ASSUMED HIS JURISDICTIONS UNDER SEC TION 263 OF THE ACT IN DENYING THE DEDUCTION UNDER SECTION 1 0B OF THE ACT. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT. 7. ON PERUSAL OF THE AFORESAID EXTRACTED PARAS FROM THE ORDER PASSED BY THE COORDINATE BENCH, IT BECOMES CLEAR TH AT NOT ONLY THE ITAT HAS HELD THAT 10 YEAR PERIOD OF DEDUCTION U/S 10B SHOULD COMMENCE FROM AY 1996-97 DURING WHICH THE ASSESSEE STARTED ITS PRODUCTION/MANUFACTURE, THE TRIBUNAL ALSO CATEGORIC ALLY HELD THAT EXTENSION OF EXISTING UNIT CANNOT BE TREATED AS A N EW UNIT. THE AFORESAID DECISION OF THE COORDINATE BENCH BEING BI NDING ON US, WE RESPECTFULLY FOLLOW THE SAME AND HOLD THAT THE A SSESSEE IS NOT ENTITLED TO DEDUCTION U/S 10B OF THE ACT. THE ORDER OF THE CIT(A) IS ACCORDINGLY UPHELD AND GROUNDS RAISED ON THIS IS SUE ARE DISMISSED. 8. IN GROUND NO. 21(D), THE ASSESSEE ASSAILED THE D ISALLOWANCE OF CLAIM OF BROUGHT FORWARD LOSS. ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 6 9. BRIEFLY THE FACTS ARE, IN COURSE OF ASSESSMENT P ROCEEDINGS, THE AO NOTICED THAT IN THE COMPUTATION STATEMENT, T HE ASSESSEE HAD CLAIMED BROUGHT FORWARD LOSS OF RS. 82,42,226/- AGAINST THE INCOME OF THE IMPUGNED ASSESSMENT YEAR. THE AO, HOW EVER, OBSERVED THAT ON VERIFICATION OF RECORD NO SUCH BRO UGHT FORWARD LOSS WAS AVAILABLE, HENCE, THE ASSESSEES CLAIM OF BROUGHT FORWARD LOSS WAS DISALLOWED. THE CIT(A) ALSO UPHELD THE ACT ION OF THE AO ON THIS ISSUE. 10. THE LEARNED AR SUBMITTED BEFORE US THAT THE CLA IM FOR BROUGHT FORWARD LOSS OF RS. 82,47,226/- PERTAINED T O THE AY 1995- 96 TO 1998-99. IT WAS SUBMITTED THAT THE BROUGHT FO RWARD LOSS WOULD HAVE BEEN AVAILABLE HAD THE DEDUCTION U/S 10B OF THE ACT BEEN ALLOWED BEFORE SETTING OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION FOR THE AY 2000-01 TO 2003- 04. IN THIS CONTEXT, THE LEARNED AR FURTHER SUBMITTED THAT THE HONBLE HIGH COURT OF AP WHILE DECIDING THE ASSESSEES APPEAL FO R THE ASSESSMENT YEARS 2002-03, 2003-04, 2004-05 AND 2005 -06 IN ITTA NO. 360 OF 2011, 407 OF 2001, 279 OF 2012, 361 OF 2011 AND 362 OF 2011 DATED 20/08/2013 DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE BY HOLDING THAT DEDUCTION U/S 10B OF THE A CT SHALL BE EXCLUDED FROM THE INCOME FIRST AT THE THRESHOLD AND THEREAFTER NORMAL COMPUTATION OF INCOME AS PER THE OTHER PROVI SIONS OF LAW IS TO TAKE PLACE. IN OTHER WORDS, IT WOULD MEAN THA T DEDUCTION U/S 10B SHOULD BE GIVEN FIRST AND THEREAFTER THE BENEFI T OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION SHALL BE G IVEN. IT WAS SUBMITTED THAT FOR THE ASSESSMENT YEAR 2006-07 ALSO SIMILAR ISSUE RELATING TO SET OFF OF BROUGHT FORWARD LOSS AS WELL AS WITH REGARD TO NUMBER OF YEARS AND DEDUCTION FOR WHICH THE ASSE SSEE IS ENTITLED TO ARE STILL PENDING BEFORE THE HONBLE A P HIGH COURT IN ITTA NO. 504 OF 2011. IT WAS SUBMITTED BY THE LEARN ED AR THAT SINCE THE MATTER IS PENDING BEFORE THE HONBLE HIGH COURT, THE ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 7 ISSUE MAY BE KEPT ALIVE BY REMITTING IT TO THE AO F OR QUANTIFICATION AFTER DISPOSAL OF THE APPEAL FOR AY 2006-07 BY THE HONBLE HIGH COURT. 11. THE LEARNED DR DOES NOT HAVE ANY SERIOUS OBJECT ION WITH THE AFORESAID CONTENTION OF THE ASSESSEE. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIALS ON RECORD. ON PERUSAL OF THE JUDGMENT DATED 20/08/2013 OF THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF THE ASSESSEE (SUPRA), WE FIND THAT THE HONBLE H IGH COURT HAS HELD THAT DEDUCTION U/S 10B SHOULD BE ALLOWED FIRST FROM THE INCOME AND THEREAFTER FROM THE REMAINING INCOME SET OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION SH OULD BE ALLOWED. IT IS ALSO A FACT THAT THE ASSESSEES APPE AL REGISTERED AS ITA NO. 504 OF 2011 AGAINST THE ORDER OF ITAT IN AS SESSEES OWN CASE FOR AY 2006-07 IS STILL PENDING BEFORE THE JUR ISDICTIONAL HIGH COURT ON THE ISSUE OF BROUGHT FORWARD LOSS AS WELL AS WITH REGARD TO NUMBER OF YEARS OF DEDUCTION U/S 10B THAT THE AS SESSEE IS ENTITLED. IN SUCH VIEW OF THE MATTER, CONSIDERING T HE FACT THAT THE ISSUE IS PENDING BEFORE THE HONBLE HIGH COURT WE R EMIT THE MATTER RELATING TO THIS ISSUE TO THE FILE OF THE AO FOR QUANTIFICATION AFTER DISPOSAL OF THE APPEAL BY THE HIGH COURT AND IN TERMS WITH THE JUDGMENT OF THE HONBLE HIGH COURT ON THIS ISSU E. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO. 21(E) RELATES TO CHARGING OF INTERES T U/S 234B, 234C AND 234D OF THE ACT. WE HAVE CONSIDERED THE SU BMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. LEV Y OF INTEREST U/S 234B, 234C AND 234D OF THE ACT BEING MANDATORY, IN OUR VIEW, THE AO WAS CORRECT IN CHARGING U/S 234B, 234C AND 234D. THAT APART SINCE CHARGING OF INTEREST IS CONSEQUENT IAL IN NATURE ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 8 DEPENDING UPON FINAL DETERMINATION OF INCOME, AT TH IS STAGE THERE IS NO NEED TO ADJUDICATE THIS GROUND. ACCORDINGLY, THIS GROUND IS DISMISSED. 14. IN GROUND NO. 21(F), THE ASSESSEE HAS CHALLENGE D THE DISALLOWANCE OF DEPRECIATION CLAIMED AMOUNTING TO R S. 16,98,681/-. 15. BRIEFLY THE FACTS ARE, IN COURSE OF ASSESSMENT PROCEEDING, THE AO WHILE EXAMINING THE ACCOUNTS NOTICED THAT TH E ASSESSEE HAD CLAIMED DEPRECATION OF RS. 13,31,52,601/- ON FI XED ASSETS WHICH INCLUDES ADDITION MADE TO FIXED ASSETS. HOWEV ER, ON VERIFICATION OF BILLS AND VOUCHERS FOR ADDITIONS MA DE TO FIXED ASSETS, THE ASSESSEE COULD NOT PRODUCE BILLS FOR SO ME ASSETS ON WHICH THE ASSESSEE HAD CLAIMED DEPRECIATION. ON THE BASIS OF DOCUMENTS SUBMITTED, THE AO WORKED OUT EXCESS DEPRE CIATION CLAIMED TO THE TUNE OF RS. 16,98,681/- AND DISALLOW ED THE SAME. AGAINST THE AFORESAID DISALLOWANCE, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT(A). DURING THE APPEAL PROCEED INGS, THE ASSESSEE PRODUCED COPIES OF BILLS AND VOUCHERS IN S UPPORT OF ADDITIONS MADE TO FIXED ASSETS. SINCE THESE BILLS W ERE NOT PRODUCED BEFORE THE AO AT THE TIME OF ASSESSMENT PR OCEEDINGS, THE CIT(A) FORWARDED THE SAME TO THE AO SEEKING HER OPINION. THE AO IN HER REMAND REPORT STATED THAT ASSETS INTR ODUCED AND ELIGIBLE FOR 100% DEPRECIATION WORTH RS. 8,65,426/- AND ASSETS INTRODUCED AND ELIGIBLE FOR 50% DEPRECIATION WORTH RS. 30,76,382/- WERE NOT IN ORDER. THE CIT(A) AFTER CO NSIDERING THE REMAND REPORT, SUSTAINED THE DISALLOWANCE MADE BY T HE AO. 16. THE LEARNED AR SUBMITTED BEFORE US THAT WITH RE GARD TO THE ASSETS INTRODUCED WHICH ARE ELIGIBLE FOR 100% DEPRE CIATION AND ASSETS INTRODUCED WHICH ARE ELIGIBLE FOR 50% DEPRE CIATION, THE ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 9 ASSESSEE HAD ADEQUATE INTERNAL CONTROL SYSTEM AND I NTERNAL AUDIT SYSTEM COMMENSURATE WITH THE SIZE OF THE COMPANY AN D NATURE OF ITS BUSINESS. IT WAS FURTHER SUBMITTED THAT THE ASS ESSEE HAD MAINTAINED PROPER RECORDS SHOWING FULL PARTICULARS INCLUDING QUANTITATIVE DETAILS AND SITUATION OF FIXED ASSETS. IT WAS SUBMITTED THAT AS THE COMPANY WAS IN THE PROCESS OF SHIFTING ITS OFFICE AND SINCE THE BILLS AND VOUCHERS WERE FOUR YEARS OLD IM MEDIATELY THEY COULD NOT BE TRACED OUT AND SUBMITTED BEFORE THE AO . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HOWEVER HAS SUB MITTED ALL THE BILLS AND VOUCHERS RELATING TO THE ADDITIONS MA DE TO FIXED ASSETS AND GIVEN AN OPPORTUNITY THE SAME COULD BE PRODUCED BEFORE THE AO. 17. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED TH AT THE ASSESSEE HAS FAILED TO PRODUCE THE NECESSARY BILLS AND VOUCHERS BEFORE THE AO AS WELL AS THE CIT(A), HENCE, DISALLO WANCE OF DEPRECIATION CLAIMED WAS JUSTIFIED. 18. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDER S OF THE LOWER AUTHORITIES ON THIS ISSUE. IT HAS BEEN CONTENDED BY THE LEARNED AR THAT THE ASSESSEE HAD PRODUCED ALL THE BILLS AND VO UCHERS WITH REGARD TO THE ADDITIONS MADE TO THE FIXED ASSETS AN D PURCHASES WERE GENUINE. ONLY BECAUSE OF SOME COMPELLING CIRCU MSTANCES, IT COULD NOT BE PRODUCED BUT ALL THE BILLS AND VOUCHER S ARE AVAILABLE AND THE ASSESSEE CAN PRODUCE THEM BEFORE THE AO FOR VERIFICATION. CONSIDERING SUCH SUBMISSION OF THE LEARNED AR, WE A RE INCLINED TO ALLOW ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODU CE NECESSARY BILLS AND VOUCHERS OR ANY OTHER EVIDENCE IN SUPPORT OF ITS CLAIM OF ADDITION IN FIXED ASSETS AND ACCORDINGLY REMIT THE MATTER BACK TO THE FILE OF THE AO. IF THE ASSESSEE IS ABLE TO SUBS TANTIATE ITS CLAIM BY FURNISHING ADEQUATE EVIDENCE, THE AO MAY ALLOW D EPRECIATION ITA NO. 840/HYD/2013 CCL PRODUCTS (INDIA) LTD. 10 CLAIMED AFTER VERIFYING THE SAME. ACCORDINGLY, THI S GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT 13/09/2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED:13 TH SEPTEMBER, 2013. KV COPY TO:- 1) CCL PRODUCTS (INDIA) LTD., 7-1-24/2D, GREENDALE, AMEERPET, HYDERABAD 500 016. 2) ASST. CIT, CIRCLE 1(2), HYDERABAD 3) CIT(A)-V, HYDERABAD. 4) CIT-I, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T ., HYDERABAD.