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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 ..... in law, the learned CIT(A) erred in denying deduction u/s 80-IB in respect of the Focus market incentive of Rs. 3,74,09,929/- without appreciating that it is derived from industrial undertaking. c) On facts and circumstance of the case and in law, the learned CIT(A) erred in denying deduction u/s 80-IB in respect of sundry income of Rs. 1,86,7781- without appreciating that it is derived from industrial undertaking. 2. Disallowance u/s 14A. 2.1) On the facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating that resort cannot be made to Rule 80(1)(b) since the learned AO has failed to provide any cogent reasons for not accepting the disallowance of Rs. 19,64,974/- already made by the appellant and further disallowing Rs. 26,22,666 which is the amount of entire dividend income. Thus enhancing disallowance u/s 14A by resorting to the computational machinery of Rule 80(2) is bad-in-law and needs to be deleted. 2.2) 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 80(2)(ii) are applicable to the appellant without appreciating that the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking at Valia while calculating long term capital gains u/s 50B. There is no mandate available to the learned AO to adjust the net worth of the unit sold u/s 50B. Thus the said reduction made by the learned AO, on a without prejudice basis, is badin- law." 3. The appellant before us is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of manufacturing of Transformer Oil & other Oils, Conductors, Synthetic Rubber and trading. For the year under consideration, it filed a return of income declaring an income of Rs. 81,14,46,450/- which was revised to Rs. 81,06,17,190/- and the book profits under section 115JB of the Act was arrived at Rs. 108,49,03,670/-. The return of income filed by the assessee was subject to a scrutiny assessment, wherein certain disallowances were made, which were carried in appeal before Ld. CIT(A) who has dismissed the appeal of the assessee. Not being satisfied with the order 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised in the ground of appeal Nos. 2.1 to 2.3 in relation to the disallowance under section 14A of the Act are herebydismissed. 8. The last ground in this appeal is with regard to denial of exemption claimed by the assessee under section 54G of the Act of Rs. 13,24,41,682/- on account of shifting expenses of High Styrine Rubber (HSR) Unit against the long term capital gain earned on sale of development rights of the land of Special Oil Refinery (SOR Unit) at Mahul. The SOR unit of the assessee was situated at Mahul comprising of manufacturing unit producing transformer oils and other oils and the HSR was a by-product of the manufacturing unit of Mahul Project. During the year under consideration, assessee sold the development rights of the land on which the industrial undertaking at Mahul, Mumbai was situated, which resulted in long term capital gain of Rs. 15,49,65,520/-. Prior to the sale of land at Mahul, assessee shifted the 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 Rs. 13,24,41,682/-, representing expenditure incurred in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting evidences, such as number of contractors utilized, truck numbers, gate passes, toll naka receipts, etc.; (iii) that the certificate furnished by the assessee from its Works Engineer certifying shifting of the industrial undertaking was an internal document and was not reliable; and (iv) that the assessee could also not establish the commissioning of the plant at Valia. 9.2 Before us, the Ld. Representative for the assessee submitted that various evidences were furnished before the AO including the copies of work order issued in favour of M/s.M. Mech Engineers Pvt. Ltd. for executing work for dismantling of the assets at Mahul and its installation at Valia. Further, confirmation from the said concern were also furnished certifying commissioning of the related work on the machineries transferred from Mahul. Ld. Representative for the assessee also explained that a copy of the ledger account of freight expenses incurred on shifting of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of cause of substantial justice and not technical considerations. It is in this back ground, we may now examine the efficacy of assessee's plea for admission of the aforestated additional evidence, which were hither to not before the lower authorities. 11.1 As observed earlier, the sum and substance of the dispute arises from the claim of deduction under section 54G of the Act, which has been denied by the income tax authorities primarily on the ground that the assessee failed to establish that the industrial unit was shifted from Mahul to Valia. 11.2 The first additional evidence is in the form of confirmation from Surat Goods Transport Pvt. Ltd., whereby it is sought to be canvassed that the machineries were transported from Mahul to Valia during the relevant period. On this point, the Ld. Representative for the assessee explained that at the time of assessment proceedings it was difficult to seek and ensure the cooperation 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the manufacturing activity later on carried out at Valia unit. 11.6 We have carefully considered the relevance of the aforesaid evidences which are now sought to be relied upon by the assessee, and were hitheto not produced before the lower authorities. Quite clearly, on the basis of the aforesaid material, 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. 11.7 So however, since the aforesaid evidences/material was not before the lower authorities, it would be in the fitness of thing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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