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TMI Blog2012 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... admissible notwithstanding that the conditions laid down u/s 80IB are not satisfied and no deduction has been allowed in the assessment year 2003-04 ? 3. It is prayed that the order of ld. CIT(A) be set aside and that of the AO be restored. 4. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off ." 3. In the course of present appellate proceedings, it was stated by the ld. 'AR' and ld. 'DR' that the issues in question are covered by the decision of the Hon'ble ITAT in assessee's own case, as decided in ITA No. 537/Chd/2009, assessment year 2006-07, dated 24.06.2009. 4. The CIT(A), fol lowing the decision of the Tribunal , adjudicated the issue in favour of the assessee. The relevant part of the decision of the CIT(A) is reproduced hereunder : "4. I have carefully considered arguments of the counsel for the appel lant and have gone through the assessment order. I have also careful y gone through the order of my predecessor for the assessment year 2006-07 dated 11.3.2009. The first ground of appeal is regarding addit on of Rs.22,95,197/- by disallowing the deduction u/s 80IB of the IT Act. The AO has made disallowance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the said decision in assessee's own case, wherein another order in assessee's own case for the assessment year 2004-05 and 2005-06 (ITA No. 1049 & 1050/Chd/2008) has been fol lowed, covers both the issues raised by the revenue in the grounds of appeal. The relevant part of the said decision is reproduced hereunder : "These appeals are filed by the Revenue against the order of the learned CIT(A) dated 22.9.2008 on the ground whether the learned CIT(A) was right in holding that deduction under section 80 IB amounting to Rs. 6,41,175/- and Rs.16,88,816/- respectively in respect of new unit was admissible notwithstanding that the conditions laid down under section 80 IB are not satisfied and no deduction has been allowed in assessment year 2000-01, the initial assessment year and also whether the learned first appellate authority was right in deleting the addition of Rs.9,68,841/- and Rs. 15,59,039/- respectively made under section 145 (3) by ignoring the fact that invoking of provisions under section 145(3) was valid as the assessee did not maintain inventory of opening and closing stock, therefore, without stock register it was not possible to determine the correct income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was subject to scrutiny assessment under section 143(3) of the Act and the Assessing Officer has passed an order thereof whereby the total income of the assessee has been assessed at Rs.1,21,66,830/-. In the said assessment, the Assessing Officer has inter-alia denied the claim of deduction under section 80IB, rejected the trading results, made disallowances out of depreciation, expenses on foreign travel, interest, car running & telephone, etc. All the additions made were challenged in appeal before the CIT(A) unsuccessfully. The CIT(A) has dismissed the appeal of the assessee and the order of the Assessing Officer has been sustained. Against such order of the CIT(A) the assessee is in appeal before us. 3. In the said background we have heard the submissions of the rival counsels with respect to each of issues raised in appeal and perused the record to which our attention has been drawn in the course of the hearing. 4. The Ground Nos. 1 (a) to 1(d) in the Memo of Appeal relate to the action of the CIT(A) in sustaining the denial of deduction under section 80IB of the Act to the assessee. The factual position in this regard is discussed by the Assessing Officer in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2001-02 wherein such relief stood allowed. For the said proposition the assessee has relied upon the following decisions:- i) Saurashtra Cement & Chemical Industries Ltd. vs. CIT 123 ITR 669 (Guj) ii) CIT vs. Paul Brothers 216 ITR 548 (Nag.) iii) CIT vs. P. Muncherji & Co. (1987) 167 ITR 671 (Bom.) iv) Russel Properties (P) Ltd. vs. A. Chowdhury, Addl. CIT (1977) 109 ITR 229 (Cal) v) K. N. Agarwal vs. CIT (1991) 189 ITR 769 (All) 6. Apart from the aforesaid the Ld. Representative has relied upon the submissions made before the CIT(A) with regard to the claim of deduction under section 80IB to the effect that the same is otherwise also allowable to the assessee as it fulfills all the conditions prescribed in the said section. 7. On the other hand the Ld. D. R. has primarily relied upon the orders of the lower authorities in support of the case of the Revenue. The reasons to deny the claim have been reiterated before us on the same lines as noticed by us earlier in paragraph 4 above. 8. We have carefully examined the rival stands with regard to the claim of the assessee firm for relief under section 80IB of the Act in relation to unit II. Section 80IB gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus which was on the Revenue has not been discharged. We are conscious of the legal position that in so far as the justification for the claims of exemption/tax reliefs are concerned the onus is on the assessee to establish and justify the claims. So however in a situation like the present situation what we are trying to say is that the Assessing Office ought to have justified his departure from the earlier accepted position whereby similar claim has been accepted in the past. It is in this background that we are of the opinion that the onus was on the Assessing Officer to justify the denial of deduction under section 80IB in view of the past history. In our considered opinion the erroneous approach of the lower authorities in this regard stands clearly manifested in view of the judgments of the Hon'ble High Courts of Gujarat and Bombay in Saurashtra Cement & Chemical Industries Ltd. (supra) and Paul Brothers (supra) respectively. Therefore, in this background we find no justification to uphold the stand of the income tax authorities to deny the claim of the assessee for deduction under section 80IB in relation to the profits and gains of unit II. Accordingly on this Ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise and complete record in this regard was maintained and inspected by the excise authorities. The aforesaid submissions of the assessee have not found favour with the CIT(A) and the addition made by the Assessing Officer has since been sustained. Against such sustenance of addition the assessee is in appeal before us. 10. Before us the Ld. Representative for the appellant firm submitted that the lower authorities were not justified in rejecting the trading results declared in the books of account. The Ld. Representative pointed out that the declined in G. P. rate was fully explained in the course of assessment proceedings by way of written communications, copies of which have been placed in the Paper-book at pages 43 to 49. It was explained that the sale prices of the products had declined due to competition from Chinese market. The assessee has also referred to the Paper-book wherein are placed copies of the invoices raised on few customers showing the decline in sale prices this year in comparison to the sales in the preceding years. Our reference has been invited to pages 74 to 117 in this regard. Secondly it is submitted that expenses have also risen in the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions carefully. Section 145(3) of the Act empowers an Assessing Officer to reject the trading results declared by an assessee. If the Assessing Officer is not satisfied about the correctness of completeness of the accounts maintained by the assessee or where the method of accounting as notified is not followed by the assessee, the Assessing Officer is empowered to reject the results so declared and make an assessment to the best of his judgement. In the present case, the Assessing Officer noted that the GP rate declared was low in comparison to the two preceding assessment years. The second objection relates to the non-reporting of payments made to a sister concern covered within the meaning of Section 40A(2)(b) of the Act. Thirdly, the Assessing Officer has also not found any justification for incurring payment of job work charges to the said sister concern. The point to be examined is as to whether there are any justified reasons for the Assessing Officer to reject the books of account maintained by the assessee. In this connection, we find that none of the objections brought out by the Assessing Officer are strong enough to negate the Book results declared by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g regard to the fair market value of such services. No effort in this regard has been made by the Assessing Officer. Therefore, considering the aforesaid, we do not find any justification for the Assessing Officer to invoke the provisions of Section 145(3) of the Act and reject the reliability of the account books maintained by the assessee. Thus, the addition made by computing the gross profit on estimate basis is hereby set aside. Accordingly, the assessee succeeds on this Ground" If the facts of the aforesaid order are kept in juxtapositon with the facts of the present appeal, the same were argued by the respective counsel to be identical. Even otherwise, the learned first appellate authority while coming to a particular conclusion had followed the aforesaid decision of the Tribunal for assessment year 2003-04. Therefore, respectfully following the aforesaid order, we have not found any merit in the appeals of the Revenue, consequently dismissed." 6. In view of the detailed findings in assessee's own case as reproduced above, on the identical grounds, these grounds of appeal of the revenue are dismissed. 7. Ground Nos. 3 & 4 are general in nature and need no separate adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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