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TMI Blog2014 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... als - whether the machinery was new or not was an aspect which the CIT (A) was within its rights to enquire into - he did so by invoking the Rule 46A of the Income Tax Act - The assessing authority was afforded an opportunity and a remand report appears to have been called for – thus, finding of fact concurrently recorded cannot be gone into – there was no question of law arises – Decided against Revenue. Entitlement for benefit of section 10A of the Act – Held that:- The question formulated is limited to the findings of the CIT (A) and the Tribunal with respect to the setting aside of the disallowance - The ground of appeal urged before the Tribunal did not disclose that the Revenue had ever argued that the claim for deduction of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 10A (2) and accepting the claim of the assessee in the absence of any evidence produced in respect of acquisition of any new machinery, tools or equipment for manufacture/production of jewellery? 4. Whether the ITAT has erred in law and on facts in allowing the expenses in respect of the design and fabrication disallowed by the AO for want of proper verification and allowed by the CIT (A) after accepting the additional evidence without following the prescribed procedure? 2. In ITA 1025/2010, the last question is pertaining to designing and fabrication charges. Question No.4 does not arise and order framing question of law also does not allude to this issue. 3. In ITA 53/2013, the sole question of law framed is as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Jain 2012 (204) Taxman 134 (Del). Following the said judgment, the first and second questions in ITA 775/209 and 1025/2010 and the sole question in ITA 53/2013 are answered in favour of the assessee and against the Revenue. 6. Regarding question no.3 (common to the ITA 775/2009 and 1025/2010), the assessee had in the present case in the assessment years 2003-04 and 2005-2006 claimed that it purchased machinery and equipments. The Assessing Officer had disallowed these claiming that there was no proof of the transaction in the form of bills and vouchers. During the course of appellate proceedings, the assessee had produced the materials on record. These were taken into consideration and the CIT (A) allowed the expenses after giving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-production of such materials. 8. Counsel for the appellant/revenue argued that the CIT (A) and ITAT fell into error in accepting the materials placed in the first instance in the appellate proceedings. We are of the opinion that as to whether the machinery was new or not was an aspect which the CIT (A) was within its rights to enquire into; he did so by invoking the Rule 46A of the Income Tax Act. The assessing authority was afforded an opportunity and a remand report appears to have been called for. In the circumstances, findings of fact concurrently recorded cannot be gone into. The question of law, therefore, does not arise and is answered against the Revenue, in the circumstances. Question No.4 in ITA 775/2009 9. This p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. The ground of appeal urged before the Tribunal did not disclose that the Revenue had ever argued that the claim for deduction of these amounts (towards fabrication and designing charges) itself evidenced that the appellant did not carry on any manufacturing activity. Such being the circumstance, the Revenue cannot be now permitted to urge this aspect for the first time before the Court under Section 260A. 11. So far as the actual expenses go, the CIT (A) in this regard held as follows: - The submissions made by the appellant have been carefully considered in view of the facts and circumstances of the case. It is observed that the Assessing Officer has disallowed the entire designing fabrication charges and factory maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the AO. These bills and vouchers were produced before the learned CIT (A). The learned CIT (A) considered the matter in totality by comparing these expenses with the expenses of the earlier year and the subsequent year. He came to the conclusion that the expenses were reasonable having regard to expenses in previous and subsequent years. It was also pointed out by him that the assessee is entitled to deduction u/s 10A and, therefore, if the disallowance is sustained, the deduction will also increase correspondingly. On the basis of the bills and vouchers produced by the assessee, he came to the conclusion that the expenses were deductible in full more so when the expenses were in line with the expenses of other years. On consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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