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TMI Blog2016 (1) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the case has been heard on the basis of papers available on record and submissions of ld. D.R. 3. First we take ITA No. 37/Ahd/2012 for A.Y. 2001-02, wherein Revenue has raised following grounds of appeal: 1. The Ld. Commissioner of Income tax (A) has erred in law and on facts in deleting the disallowance of deduction of ₹ 17,29,981/- u/s.80IB of the Act. 2. On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored. 4. Briefly stated facts are that assessee, who is proprietor of M/s. Subh Electromech, is engaged in the business of manufacturing of electronic goods and home appliances, such as music systems, car stereos etc., has filed its return of income for A.Y. 2001-02 on 24.10.2001 showing total income at ₹ 1,62,040/- after claiming deduction u/s.80IB of the Act at ₹ 17,29,981/-. The assessee s case was selected for scrutiny and assessment order was framed by Assessing Officer (ITO, Ward 7(4), Ahme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) deleted the disallowance made by Assessing Officer u/s.80IB of the Act. 6. Aggrieved Revenue is now in appeal before the Tribunal. 7. We have heard the ld. D.R. and with his assistance perused the material on record. The only question to be decided is, whether the assessee is eligible for deduction u/s.80IB of the Income Tax Act. Deduction u/s.80IB of the Act is allowed in support of profits and gains from certain industrial undertakings other than infrastructure development undertaking. Section 80IB(2)(iv) of the Act reads as under: in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power. Assessing Officer wanted to examine basically three crucial requirements necessary for the claim of deduction u/s.80IB of the Act; (i) whether the assessee is carrying a manufacturing activity, (ii) whether the manufacturing process is carried on with the aid on power, (iii) whether the assessee has employed 10 or more workers in the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was not supporting the claim of the assessee that it is carrying on a manufacturing activity. 7.2 Assessee has claimed that it manufactures electronic goods. In his submission before ld. CIT(A), he has mentioned that for the purpose of manufacturing electronic goods, such as, Music Systems, Radio Cassette Recorders, Car Stereo Systems, VCD Players, Microwave Ovens, VCRs and Air Conditioner Machines etc. He has imported the required raw material from various countries like Singapore, Hong Kong etc. under Open General Import License Scheme. Raw materials required for manufacturing the goods constitute plastic and metal parts containing main plastic body, front panel and back panel, speaker box, mechanical parts such as T.D.M., C.D.M., transformers, heat sing units, various types of speakers, remote controls, different types of soldering wires, A.C. cord wires, batteries etc. These raw material items are assembled and finished goods are manufactured. 7.3 But the quantitative details appearing in the audited balance sheet and tax audit report are not having any mention of the various raw materials claimed to have been used by the assessee in the manufacturing process. Rather o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored. In this appeal also, Co-ordinate Bench of ITAT vide order dated 17.10.2008 in ITA No.2243/Ahd/2006 has set aside the issue back to the file of Assessing Officer giving directions to re-decide the issue of allowability of deduction u/s.80IB of the Act after giving proper and reasonable opportunity of being heard to the assessee. 9. In view of above direction, fresh notice u/s.143(2) of the Act was issued to the assessee on 18.03.2009 which was duly served upon on 19.03.2009. Further, notice u/s.142(1) of the Act along with questionnaire was also issued on 27.11.2009. The assessee was asked to attend along with the following documents in original vide questionnaire dated 27.11.2009: 1. Ledger, journal, sales purchase invoices and expenses vouchers. 2. Bank pass book/statement, counter parts of cheque book slip book. 3. Stock register, mfg. register and packing material register alongwith goods inward-outward register. 4. Power consumption register along-with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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