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TMI Blog2016 (1) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... new undertaking/enterprises. Therefore, we are of the view that the assessee is entitled for deduction u/s 80IC of the Act as the addition to the plant and machinery is required to a particular undertakings and not the assessee as whole. - Decided in favour of assessee. - ITA Nos.842/LKW/2014 - - - Dated:- 19-11-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Shri Amit Nigam, DR For The Respondent : Shri Rohit Bhalla, CA ORDER PER SUNIL KUMAR YADAV, JM. 1. This appeal is preferred by the Revenue against the order of the Ld. CIT(A)-II, interalia on following grounds :- 1. The Commissioner of Income Tax (Appeals), Lucknow has erred in law and on facts of the case that the initiation of proceeding u/s 147 and issuance of notice u/s 148 of the Income Tax Act, 1961 is bad in law and contrary to the provisions of the Act, simply relying on the submission of assessee made before him. the CIT(A) failed to appreciate that the assessee did not disclose complete facts during the course of assessment proceeding by not furnishing separate Tax Audit Report in Form No.1OCCB for Sitarganj Unit as prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IC of the Act during assessment proceedings for AY 2009-10, therefore, there was no disclosure of ₹ 37,52,759/-in plant and machinery Sitarganj. The Assessing Officer has accordingly denied the deduction u/s 80IC of the Act. 3. The assessee preferred an appeal before the CIT(A), assailing the reopening of assessment, on the ground that the Assessing Officer has allowed deduction u/s 80IC in other assessment years and these facts were not taken into account by him while reopening the assessment. Therefore, reopening was done on the basis of change of opinion. On merit also, Ld. counsel for the assessee has contended that assessee has furnished tax audit report alongwith the return of income and there was no requirement of law to prepare a separate tax audit report for the unit on which deduction is claimed. The assessee has furnished the detailed written submission and the facts of the case before the CIT(A) and the CIT(A) has recorded the same in his order in para 2 to 8 on pages 2 to 15 of his order. Being convinced with the explanation of the assessee, the CIT(A) held that the AO has reopened the assessment on account of change of opinion. Therefore, reopening is bad. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant that the initiation of proceedings u/s 147 of the Act and issue of notice_u/s 148 of the Act is bad in law and contrary to the provisions of IT Act. The AO has wrongly assumed the jurisdiction u/s 147/ 148 of the 1,T. Act. Thus the ground No.2 raised by the appellant is hereby allowed. Ground No.3 in respect of disallowing the claim u/s 80IC of the I.T. Act at ₹ 1,50,09,117/-. The A.O. has disallowed the claim made by appellant u/s 80IC of the Act of ₹ 1,50,09117/- on the ground that the appellant did not invest substantial expansion in Plant Machinery during the assessment year under consideration. During appellate proceedings the appellant has filed written submissions mentioned supra and contended that the assessee company, fulfilled all the conditions laid down u/s 80IC of the Act. Therefore, the A.O. should have allowed its legitimate claim made u/s 80IC of the Act of ₹ 1,50,09,117/- . I have examined the written submissions of appellant filed during appellate proceedings, finding given by A.O. in assessment order, assessment records of A.Y. 2009-10 2010-11 , scrutiny assessment order framed u/s 143(3) of the Act of A.Y./ 2009-10, 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned supra, and manufacturing of articles and things has already been commenced during assessment year under consideration, therefore, the condition of substantial expansion as stated in the provisions of sub section (8) of 80IC of the Act is fulfilled. The A.O. has not properly appreciated the applicability of the relevant provisions of I.T. Act, 1961 u/s80IC, Looking, into the above facts on_merit also the disallowances made by the AO u/s 80IC of the Act of ₹ 1,50,09,117/- cannot be said proper justified and same liable to be deleted. The A.O. is directed to delete the addition of ₹ 1,50,09,117/-. The appellant gets relief of ₹ 1,50,09,117/. 4. Aggrieved, the Revenue has preferred an appeal before the Tribunal and placed the heavy reliance upon the order of the Assessing Officer, whereas the Ld. counsel for the assessee has invited our attention to the assessment order for the AYs 2011-12 and 2012-13 in which the claim of deduction u/s 80IC raised by the assessee was thoroughly examined by the Assessing Officer before allowing the same. The copies of the orders are placed on pages 195 to 207 of the compilation of the assessee. Our attention was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India [2015] 59 taxamann.com 96 xiv) CIT Vs. Schwing Stetter India Pvt. Ltd. [2015] 61 taxmann.co, 18 xv) GTL Ltd. Vs. ACIT [2015] 59 taxamann.com 362 xvi) J.V. Gokul Co. vs. ACIT [2015] 53 taxmann.com 494 6. Ld. counsel for the assessee further invited our attention to the computation of income filed along with return of income and the tax audit report in which specific note was given that Sitarganj Unit in Uttranchal State has commenced commercial production w.e.f. 02.02.2009. The company is eligible u/s 80IC of the Act to the extent of 100% of profit. Accordingly, same has been claimed in the income tax return of the year. It was further contended that since all these information were available before the Assessing Officer, it cannot be said that he has not applied his mind before allowing the claim of the assessee u/s 80IC of the Act. On merit, Ld. counsel for the assessee has contended that the assessee has made the addition in plant and machinery amounting only to ₹ 37,52,759/- in Sitarganj Unit, therefore assessee is entitled for deduction u/s 80IC of the Act. 7. Having carefully examined the orders of lower authorities in the light of rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating the manner in which it had worked out its claim for deduction under 80-IA. The note indicated that the expenses were allocated between the three manufacturing units on basis of their turnover. Similarly in the instant case, the assessee has given a note in the auditor s report that Sitarganj Unit in Uttrakhand State has commenced commercial production w.e.f. 02.02.2009. The company is eligible for deduction u/s 80IC of the Act to the extent of 100% of the profit, Accordingly, same has been claimed in the Income Tax Return for the year. In the light of the specific note and consolidated tax audit report and the financial statement of the unit, it cannot be said that the AO has not applied his mind before allowing the claim of the assessee. 10.1 In the case of IBS Software Services Pvt. Ltd. Vs. Union of India reported in 232 Taxman 674 (Kerala), the Lordship of the Hon ble Kerala High Court have gone to the extent by holding that if essential and basic documents which are to be necessarily examined before grant of exemption under section 10A are not gone into, then it is default of officer concerned and not assessee. 10.2 In the case of Pine Chemicals Ltd. Vs. DCIT rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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