9911796707
TMI Blog2012 (12) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80IC(2) is the year 31-3-96 relevant to the AY 1996-97. Coming to the claim of the assessee that it has capitalized the expenditure till 18-9-96 and the same has also been accepted by the revenue, not convinced by the said claim as nothing stopped the assessee from claiming expenditure thereto as a revenue expenditure. There is no assessment order for the AY 1996-97 or 1997-98 specifically accepting the claim of the assessee. Further, there is also no scrutiny assessment order accepting the claim of the assessee that the initial AY in the case of the assessee for claiming of deduction u/s. 80IC is the AY 1997-98. In the circumstances the initial assessment year for the assessee for claiming of deduction u/s. 80IC(2) is held as the assessment year 1996-97. Consequently, the assessee would not be entitled to claim of deduction u/s.80IC(2) for the impugned AY 2006-07. In the circumstances, the finding of CIT(A) stands reversed and that of the AO restored - in favour of revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... these evidences were not produced before the Assessing Officer, the same cannot be considered. It was the further submission that the assessee had claimed deduction u/s. 80IC(2) of the Act. It was the submission that on the basis of these evidences, the learned Commissioner of Income-tax (Appeals) has given relief to the assessee. 5. In regard to ground no.1, it was submitted by the learned DR that the deduction claimed u/s. 80IC(2) of the Act was denied by the Assessing Officer on the ground that the assessee had commenced manufacturing of its goods being calcinated petroleum coke in Feb 1996 relevant to A.Y 1996-97 and consequently, the initial AY being 1996-97 the eligibility of deduction u/s. 80IC(2) ended with the AY 2005-06. It was the submission that the view of the Assessing Officer was supported by the letter of the assessee to the Supdt., Central Excise, wherein the assessee had itself categorically admitted that it had started trial production on 5-2-96. It was the submission that the paper book filed by the assessee also clearly shows that for the AY 1996-97 the assessee had made sales of nearly Rs.2,18,27,046/- and raw material consumption was of Rs. 1,91,83,079/-. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claim deduction u/s. 80IC(2) for the AY 2006-07 under appeal. The learned DR relied on the decision of the Hon'ble Allahabad High Court in the case of CIT Vs. Himalayan Magnesite Ltd. reported in (2004) 276 ITR 56(All), wherein it has been held that there is a difference between trial production and production on regular basis. The learned DR further relied on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Nestor Pharmaceuticals Limited & Sidwal Refrigerations Ind. Ltd Vs. DCIT reported in (2009) 322 ITR 631 and submitted that after production, commercial sale has also taken place well before 31-3-96, the initial AY was liable to be taken as AY 1996-97. 7. We have considered the rival submissions. The perusal of the facts in the present case clearly show that the issue in debate on the issue of " Initial Assessment Year". The facts in the present case clearly show as follows:- The assessee was originally registered with the Central Excise Department under the name Universal Alloys & Steel Pvt. Ltd vide registration dated 8-8-94. The assessee company's name was changed to M/s. Bharat Calciners Ltd vide letter dated 16-12-96. The name was again changed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-97, the auditor in para 01 mentions that it has been explained to the auditors that the construction/erection of work of the company's new plant just has been completed a few days back. Thus, now, we are faced with 3 dates i) date 5-2-96, when the assessee has written letter to Superintendent, Central Excise intimating the commencement of trial production for the first time, ii) 19-9-96 being the date on which the assessee has received the consent order from the Pollution Control Board, Assam and letter has been written by the assessee to the Department of Industrial Policy & Promotion dated 14-10-96 intimating the commencement of regular commercial production and iii) August/September 1997 being the date of completion of construction/erection work of company's new plant as per report of the auditors dated 4- 9-97. In any case the date 4-9-97 would not carry any implication, in so far as the commencement of operation of the assessee. 10. Now, we are concerned with 2 dates being 5-2-95 and 19-9-96. Admittedly, on 5-2-96 the assessee as per its own letter has confirmed start of the trial production. Date 19-9-96 is the date of obtaining the consent order from the Pollution Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made the application for obtaining the "consent order" as early as 29-12-95. This is because on 29-12-95 Regional Office, Guwhati, Pollution Control Board had issued a letter confirming the receipt of application with the requisite fees and other documents. Without the necessary equipment being put in placed, the assessee could not file an application for obtaining the consent from the Pollution Control Board. Without having consent of Pollution Control Board assessee would not have started its initial production. 12. The fact that the assessee on 22-3-96 has requested for monitoring of the trial run/production by the pollution control board shows that the actual production has began. The volume of the raw materials consumed and the sales made by the assessee during the so-called trial production period is also substantially identical. The sales return are also not there. Here, we may mention, the provisions of section 80IC of the I.T.Act'61 in regard to initial AY. The same is defined in sub-section 8(v) to mean " the assessment year relevant to the previous year in which the undertakings/enterprises begin to manufacture or produce articles or things or commencement of operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
