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TMI Blog2015 (6) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs.) 1. FDR Interest 1,62,09,403 51,49,279 2. Interest on staff loan 30,456 8,637 Total 1,62,39,859 51,57,916 3. Briefly stated facts of the case are that originally the assessee filed return of income on 29.9.2008 declaring total income of Rs. 7,93,74,150/- and book profit of Rs. 68,60,76,279/- under section 115JB, and the assessee revised its return declaring total income of Rs. 1,31,88,670/- and the book profit of Rs. 68,60,76,279/-. This return was also again revised on 26.10.2009 declaring total income of Rs. 3,56,10,220/- and book profit at Rs. 68,60,76,279/-. The case was, thereafter, picked up for scrutiny assessment, and the assessment under section 143(3) of 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd submissions of both the parties and perused the material available on record. The assessee has filed certain papers to prove nexus of borrowed funds and FDR interest income. Since these documents were not filed before the AO and the CIT(A), we deem it proper to admit these documents since it goes to the root of the issue, and therefore, this issue is restored to the file of the AO to decide the same in accordance with law, after considering the additional evidences filed by the assessee. Thus, this ground of appeal of the assessee is allowed for statistical purpose. 10. Before parting, it is to point out that we are conscious of the fact that in the 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 raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for the Asstt.Year 2005-06, 2006-07 and 2007- 2008 had decided the issue in favour of the assessee, and the grounds raised by the Revenue was dismissed. 15. We have considered rival submissions and perused the material available on record. We find that the ld.CIT(A) has decided the issue following earlier year's order by observing as under: "For Assessment years 2005-06, 2006-07 and 2007-08, this issue was decided in favour of the appellant vide appellate orders in Appeal No. (i) CIT(A)/VLS/118/09-10 dated 29.03.2010, (ii) CIT(A)/VLS/340/09-10 dated 30.03.21010 and (iii) CIT(A)/VLS/2is/09-iO dated 30.03.2010 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble High 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. 18. The ground no.3 of the Revenue's appeal is against the findings of the ld. CIT(A) that the assessee is eilgible for exchange rate difference of Rs. 2,11,18,536/-. 19. The learned CIT-DR submitted that the ld.CIT(A) is not justified in deleting the disallowance. He submitted that the ld.CIT(A) ought to have confirmed the order of the AO. The learned DR submitted that the ld.CIT(A) failed to take note of fact 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue is rejected. 27. The ground no.5 of the appeal of the Revenue is against deletion of addition of under valuation of scrap sale to the tune of Rs. 2,11,45,659/-. 28. The learned CIT-DR submitted that the AO made addition on the basis of show cause notice issued by the Excise Department, and the evidence was collected. He submitted that the ld.CIT(A) was not justified in deleting the addition. The learned DR placed on the reliance on the decision of the Coordinate Bench rendered in the case of ACIT Vs. Santro Tiles Ltd., in ITA Nos.1277 to 1280/Ahd/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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2008 spreading over four financial years i.e. 2004-05 to 2007-08. Under these circumstances, it was found in this case as well that by not declaring such amount of unaccounted sale price which was collected by company in cash from various dealers/distributors admitted by the Director as well company has not shown full amount of sales in regular books of account. The sale price worth Rs. 7,94,25,558/- in A.Y. 2005-06, Rs. 11,04,17,079/- in A.Y. 2006-07, Rs. 10,21,40,223 in A.Y. 2007-08 have been under stated in trading account. This has resulted into escaping of income to the extent of Rs. 7,94,25,558/-, Rs. 11,04,17,079/-, Rs. 10,21,40,223/- & Rs. 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 Rs. 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 Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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