9911796707
TMI Blog2015 (6) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... Court or Hon’ble Apex Court, we do not find any infirmity in the order of the CIT(A), the same is hereby confirmed and the ground nos.1 and 2 of the Revenue are rejected. - Decided against revenue. Eligibility for exchange rate difference - Held that:- Difference on account of exchange rate fluctuation is liable to be allowed u/s.80IB. The exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking. Respectfully following the decision of the Hon’be Bombay High Court I the case of CIT Vs. Rachna Udyog (Bom) [2010 (1) TMI 38 - BOMBAY HIGH COURT ] also followed in in the case of CIT Vs. Liberty India (2009 (8) TMI 63 - SUPREME COURT) - Decided in favour of assessee. Disallowance of deduction on the sundry balance written back - CIT(A) deleted the addition - Held that:- There is no dispute that the amount in question was treated as expenditure related to the manufacturing activity. Therefore, we do not find any good reason to interfere with the order of the CIT(A) on this issue, which is hereby confirmed - Decided against revenue. Addition of under valuation of scrap sale - CIT(A) deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was framed by the order dated 8.10.2010. While framing the assessment, the AO made disallowance of deduction under section 80IB of the Act in respect of Daman undertaking. The AO also disallowed the claim for deduction in respect of foreign exchange difference. The AO made addition of ₹ 2,11,45,659/- on account of under valuation of scrap sales. Against this, the assessee preferred appeal before the learned CIT(A), who, after considering the submissions of the assessee, partly allowed the appeal of the assessee. The ld. CIT(A) allowed the claim of deduction under section 80IB following the appellate orders pertaining to the assessment years 2005-06, 2006-07 and 2007-08. However, the learned CIT(A) confirmed the action of the AO to exclude the FDR interest from the eligible profit for claiming deduction under section 80IB. The learned CIT(A) also confirmed the exclusion of interest on staff loan for claiming deduction under section 80IB of the Act. However, in respect of difference in foreign exchange, the ld.CIT(A) directed the AO to include the difference of foreign exchange for computation of deduction in the light of Bombay High Court in the case of CIT Vs. Rachna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the assessee in the Asstt.Year 2006-07 and 2007-08, similar issue was raised, and the Tribunal vide order in ITA No.1751 and 1752/Ahd/2010 and Anr., dated 8.11.2013 decided the issue in favour of the Revenue, as in that case, the assessee had not placed evidences to prove its claim, as being done in the present case. Therefore, to decide the quantum of interest to be excluded, the evidences so filed, needs verification at the end of the Assessing Officer. 11. Now we take up the Revenue s appeal. 12. The Revenue has raised the following grounds of appeal: 1) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that the assessee is eligible for deduction U/s.80IB amounting to ₹ 56,46,56,078/-, without considering the fact that assessee failed to commence the production before the cut-off date for commencement of production i.e. on or before 31.03.2004, as provided in section 80IB(4) of the I.T. Act, 1961. 2) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that the assessee company is the expansion of existing old business carried out in the name of firm viz. M/s. Ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 respectively by the GIT(A), Valsad. The facts and circumstances of this issue being same, I am inclined to grant relief in this ground. The Assessing Officer is directed to allow deduction u/s.80IB to the appellant on profit derived from Daman Unit. Accordingly, this ground of appeal is Allowed. 16. The order of the ld.CIT(A) in the AssttYear 2005-06 was carried to the Tribunal, and the Tribunal has decided the issue in favour of the assessee by observing as under: 9. We have heard rival submissions and perused the orders of the lower authorities and material available on record. In the instant case, the deduction claimed under section 80IB was denied by the AO on the ground that the assessee commenced production after 31.3.2004. The claim of the assessee is that it commenced production on 3.3.2004 was mainly not accepted by the AO on the ground that the premises which was claimed to have been taken by the assessee on rent for its manufacturing activities was found by the AO as not correct on the basis of the statement of Shri Debashish Chakravorty, who was an employee of Shri Khemchand Dhingra. On appeal, the learned CIT(A) found that the statement of Shri Debashish C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that in the case of Liberty India Vs. CIT, 317 ITR 218 (SC), the Hon ble Supreme Court held that duty draw-back is not profit derived from the eligible business under section 80IB, but they belong to the category of ancillary profits of such undertaking. 20. On the contrary, the learned counsel for the assessee submitted that judgment of the Hon ble Supreme Court was considered by the Hon ble Bombay High Court in the case of CIT Vs. M/s.Rachna Udyog (Bom), and the learned CIT(A) has rightly decided the issue by restoring to the file of the AO, by directing the AO to allow the claim of the assessee in the light of Hon ble Bombay High Court decision cited supra. 21. We have considered rival submissions and perused the material available on record. We find that the ld.CIT(A) has decided this issue in para 6.3(c) as under: (c) Difference on account of exchange rate fluctuation is liable to be allowed u/s.80IB. The exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking. Respectfully following the decision of the Hon be Bombay High Court I the case of CIT Vs. Rachna Udyog (Bom) ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012 order dated 23-1-2015. On the contrary, the learned counsel for the assessee placed reliance on the order of the ld.CIT(A) and submitted that the AO has made addition merely on the basis of the show cause notice issued. The AO has not collected any evidence to make the impugned addition. 29. We have considered rival submissions and perused the material available on record. We find that the Co-ordinate Bench of the Tribunal in the case of ACIT Vs. Santro Tiles Ltd. (supra) while considering the similar issue, set aside the issue back to the file of the CIT(A) with direction to decide the same as per fact and law in the light of final outcome in the excise proceedings. The relevant portion of the above order of the Tribunal is as under : .. From the above, CIT(A) observed that assessee has resorted to large scale suppression of sale though various modus operandi. This suppression was also accepted by engaged parties. Assessing Officer accepted the contention that the quantum of suppression of sales should be based on ex-factory rate and has accordingly modified the quantum, determined by DGCEI, on the basis of MRP. The stand of assessee has been that it was at best p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s resulted into escaping of income to the extent of ₹ 7,94,25,558/-, ₹ 11,04,17,079/-, ₹ 10,21,40,223/- ₹ 14,68,74,752/- for A.Y. 2005-06, 06-07, 07-08 08-09 respectively. On the basis of material available on record Revenue authorities were of the opinion and have reason to believe that income chargeable to tax of more than ₹ 1 lac has escaped assessment for the year under consideration due to failure of assessee to disclose fully and truly all materials facts necessary fro assessment. Therefore, proceedings were initiated u/s.148 and consequential additions were made. In sum and substance, the stand of learned Authorized Representative is that proceeding which initiated at the strength of investigation conducted by DGCEI, Ahmedabad are basis for addition in income tax proceeding as well. It was submitted that proceeding with regards to evasion of exercise was pending before concern Tribunal and which will have bearing on the issue at hand. So, in the interest of justice, matter should be restored to CIT(A) with direction to decide the same as per fact and law in light of final outcome in the Excise proceeding as discussed above. Finding force in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
