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TMI Blog2015 (10) TMI 2596X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to submit quarterly financial results to the stock exchange after due review by its auditors. We also find that the case law relied upon by the Learned AR on the decision of Hon’ble Delhi High Court in the case of Addl CIT vs Joy Engineering Works Ltd(1978 (2) TMI 94 - DELHI High Court ) is well placed as it deals with identical situation. Keeping in view of the fact that the revenue could not contradict the submissions of the assessee as well as the observations of the ld.CIT(A) in the impugned order, we find no infirmity in the orders of the ld. CIT(A) - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... er appreciation of the fact brought on record that the auditor has certified in their report on 31.8.2006 much after books of accounts were alleged to have been destroyed by fire on 18/5/2006 that various books of accounts were examined. 2. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in holding rejection of books of accounts and estimation of profit of unit II improper without proper appreciation of the fact brought on record that the assessee failed to produce details of expenses incurred in the units II and III separately with proper evidences. 3. That the Department craves leave to add, modify or alter any of the ground(s) of appeal and / or adduce additional evidence at the time of heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce books of accounts and other details as evidence in support of the return. However, the assessee proceeded to produce the details of sales, purchases , break up of details given in balance sheet and profit and loss account and miscellaneous expenses in support of its return before the Learned AO and heavily relied on the audited balance sheet and tax audit report submitted along with the return. The assessee also heavily relied on the statement that the statutory audit under Companies Act is a regular process and since the shares of the assessee are listed in recognized stock exchange, it has to comply with the norms stipulated in the listing agreement, wherein limited review report is to be submitted by the auditors every quarter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t percentage which was duly accepted by the Learned CIT(A ). Unit II Unit III Net Profit 2,61,20,179 8,04,83,919 Turnover 18,61,90,986 43,44,45,635 Net Profit % 14.02% 18.52% Unit II trading activity Net Profit (Trading) 2,03,33,527 Turnover (Trading) 73,82,27,300 Net Profit (Trading) 2.75% However, in order to make the figures of both the manufacturing units comparable, the expenses like preliminary expenses, loss on sale of assets, donation and depreciation is to be eliminated, so that correct gross profit can be derived. As such the comparable figures are as under:- Unit II Unit III Manufacturing Profit as per P/L A/c 2,61,20,179 8,04,83,919 Add: Loss on sale of fixed assets 2,06,070 - Add: Donation - 2,74,583 Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as what is reproduced in the Learned CITA order. 5.1. We find that the eligibility of the assessee to claim deduction u/s 80IB of the Act in respect of profits derived from Unit II and Unit III has not been disputed by the Learned AO. We find that the books of accounts were destroyed due to fire that broke out in the business premises of the assessee on 18.5.2006 and hence the assessee had to heavily rely only on the audited balance sheets and tax audit report that were practically ready before the date of fire as assessee being a listed company , it had to submit quarterly financial results to the stock exchange after due review by its auditors. We also find that the case law relied upon by the Learned AR on the decision of Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re properly supported by the relevant entries in the account books. In a sense it may be a question of law as to what the meaning of "material" is and whether the auditors' reports were material. But the question of law is well settled and is not capable of being disputed and does not, therefore, call for reference. " 5.2. We also find that this tribunal had an occasion to adjudicate the similar issue in Asst Year 2005-06 in ITA No. 1836 (Kol) of 2008 dated 21.8.2009. The relevant portion of the judgement is reproduced hereunder:- ITAT's order in ITA No.1836/Kol/08 A.Y 2005-06dt. 21.8.09 "6. At the time of hearing before us, the ld.DR heavily relied on the orders of the AO and further contended that the assessee has disclosed net profi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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