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TMI Blog2015 (8) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... r investments in shares of M/s. Uniflex Cables Ltd. be reduced from the total disallowance worked out by the AO. Consequently, we set aside the matter to the file of AO, who shall allow appropriate relief to the assessee on this aspect. - Decided in favour of assessee by way of remand. Exemption u/s 54G denied - additional evidence submitted - Held that:- On the basis of the material submitted, the assessee does not intend to make out any new case, but the it merely seek to corroborate its earlier stand. Some of the additional evidences, for instance, confirmations from the transport contractor, engineering contractor, etc. are third party independent evidences and in our view it would be appropriate to consider the same for the purpose of adjudicating the assessee’s claim for deduction under section 54G of the Act. In our considered opinion, having regard to the facts and circumstances of the present case, the avowed object of Rule 29 of the Appellate Tribunal Rules would be sub-served if the additional evidences are admitted in order to appropriately adjudicate assessee’s claim for deduction under section 54G of the Act. We hold so. So however, since the aforesaid evidences/mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming that Rule 80(2)(ii) are applicable to the appellant without appreciating that the investments were made from own funds viz. sale of Polymer Business ₹ 878,549,026 and sale of development rights of land ₹ 304,000,000. CIT(A) also failed to appreciate that the Trade Investments of ₹ 40.44 Lacs were for business and not for earning tax free dividend income. Thus disallowance of interest expense u/s 14A being bad-in-law needs to be deleted. 2.3) Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming that Rule 8D(2)(ii) are applicable to the appellant without appreciating that the appellant has sufficient own funds along with reserves which can be stated to have applied for making investments. Thus disallowance of interest expense u/s 14A being bad-in-Iaw needs to be deleted. 3. Exemption u/s 54G: a) On facts and circumstance of the case and in law, the learned CIT(A) erred in denying exemption u/s 54G of ₹ 132,441,682 without appreciating that the appellant has shifted its indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Ld. CIT(A), the assessee is in further appeal before us on the aforestated Grounds of appeal. 4. In so far as ground of appeal Nos.1(a) & (b) are concerned, the same relate to assessee's claim for deduction under section 80IB of the Act in relation to incomes by way of DEPB investments and focus market incentives amounting to ₹ 5,67,09,436/-& ₹ 3,74,09,929/- respectively. The AO as well as Ld. CIT(A) have denied the claim for deduction under section 80IB of the Act on the aforesaid two elements of income on the ground that the same do not constitute incomes "derived from" the industrial undertaking. 4.1 Ld. Representative of the assessee fairly conceded that the decision of the Hon'ble Supreme Court in the case of Liberty India vs. CIT, 317 ITR 78(SC) covers the controversy in favour of the Revenue. 5. By way of Ground of appeal No.1(c), the claim of the assessee for deduction under section 80IB of the Act is in relation to sundry income of ₹ 1,86,778/-. On this aspect also, the Ld. Representative of the assessee fairly conceded that the said income has been rightly held to be "not derived from" the industrial undertaking and accordingly the denial of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSR undertaking at Mahul, Mumbai to Valia at Gujarat, which is referred to as Polymer Division at Valia. On the strength of the provisions of section54G of the Act, assessee claimed deduction of ₹ 13,24,41,682/-, representing expenditure incurred in the course of or in the consequence of shifting such industrial undertaking, from the long term capital gains earned on the sale of land at Mahul. The claim for deduction under section 54G of the Act has been denied to the assessee by the AO as well as Ld. CIT(A) and the same is being agitated before us by way of Ground No.3. 9. At the time of hearing, the Learned Representative for the assessee, at the outset moved an application under Rule-29 of Income Tax Appellate Tribunal Rules, 1963(in short the Appellate Tribunal Rules' seeking admission of additional evidence which according to the assessee are relevant to adjudicate the aforesaid controversy. The additional evidence which is sought to be admitted has been placed in the Paper Book at pages 119 to 136 and is, inter-alia, detailed as under:- Sr. No. Particulars 1. Confirmation of Surat Goods Transport Pvt. Ltd. relating to Transport of Machinery from SOR Mahul division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hifting of ₹ 14,91,400/- was also furnished. Ld. Representative for the assessee pointed out that further additional documents which were not hitherto furnished before the lower authorities are relevant and are in the nature of corroborative evidence to support the already existing factual pleas raised by the assessee before the lower authorities. 9.3 Ld. Representative for the assessee has taken us through the additional evidence placed in the Paper Pook at pages 119 to 136, which we have enumerated above and explained its relevance and the reasons why the same is being produced as additional evidence at this stage. On this basis, it is prayed that the admission of additional evidence would not prejudice the Revenue and rather it is a relevant material to dispose of the appeal of the assessee in accordance with the law. 10. On the other hand, Ld. DR appearing for the Revenue has contended that the lower authorities have appropriately appreciated the material and evidence that was sought to be relied upon by the assessee and that there was no justification for not having furnished the aforesaid additional evidence before the lower authorities. 11. We have carefully conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the concerned transporter, as Mahul unit has since been closed down. The assessee was under the bonafide belief that since transportation was effected by an independent party and payments were made through cheques, it would be sufficient to prove the transportation of machinery. However, since the claim was rejected, the assessee was compelled to seek certificate from the transporter, which would corroborate the plea of the assessee that industrial undertaking was indeed shifted from Mahul to Valia. The second additional evidence is in the form of details of machineries shifted from Mahul to Valia. As per the Ld. Representative for the assessee, such details placed at pages 120 to 124 of the Paper Book are itemwise details of machineries shifted. Similarly, the third additional evidence is in the form of confirmation of Gayatri, Construction Engineers and Contractors, who carried out necessary changes and modifications in the factory building at Valia. The said concern had also constructed adjoining factory building HSR unit and warehouse etc. As per the appellant, such confirmation would establish the construction and modification of the building at Valia. It was explained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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