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TMI Blog2019 (2) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... the final tribunal of fact. In this case, the court is of the opinion that the ITAT performed the task to the extent it could, having regard to the materials which it elaborately and exhaustively analyzed. The inference it drew cannot be called perverse or illegal. No substantial question of law arises. - ITA 72/2019 & CM Appl. 3927-28/2019 - - - Dated:- 28-1-2019 - MR. S. RAVINDRA BHAT AND MR. PRATEEK JALAN JJ. Appellant Through: Mr. Bharat Beriwal, Adv. Respondents Through: Mr. Ashok Kumar Manchanda, Sr. Std. Counsel. CORAM: S. RAVINDRA BHAT, J. (OPEN COURT) 1. The assessee appeals a decision of the Income Tax Appellate Tribunal (ITAT), for Assessment Year 2008-2009. Its claim for benefit of deduction under Section 80-IC of the Income Tax Act [hereafter referred to as the Act ] was disallowed by the AO. The Appellate Commissioner, however, set aside the disallowance and granted the benefit. The ITAT by the impugned order reversed the Commissioner s decision. In the return of income for Assessment Year 2008-09, which was subject to scrutiny, the assessee declared ₹1,62,82,400/-. It claimed deduction of ₹3,13,09,690/- from its gross total income u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la Amb unit for want of space and nonavailability of Transit Form issued by the Government of Uttrakhand. The ITAT disbelieved this explanation. Some of the material parts of the ITAT s findings are as follows: 19. Moreover, when this fact is examined in the light of the fact that no travelling allowance has been debited by the assessee to the P L account during the year under assessment, it is difficult to believe that any manufacturing activities have been carried out at the Selaqui unit. Because earning the turnover of ₹ 11.11 crores with profit of ₹ 3.13 crores from the assembling/ manufacturing unit is humanly not feasible without supervision of senior/ junior functionaries of the assessee either from Kala Amb unit or from Head Office, Delhi nor any skilled worker has ever visited the Selaqui unit or proved to be engaged. So, all these facts strengthen the findings returned by the AO which have been overturned by the CIT (A) on the basis of whims and fancies. Since the assessee has transferred tools and machinery more than 20% of the total machinery employed at Selaqui unit from Kala Amb unit it is violation of section 80-IC(4) (ii) of the Act. 20. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,588/-, no other expenditure on account of wages/salary have been debited to the P L account. 3. Learned counsel urged that the substantial question of law, which requires consideration is with respect to the ITAT s findings, firstly that Section 80-IC was not available to Selaqui unit and secondly, other adverse findings that the unit was created by splitting up the existing unit contrary to Section 80-IC(4)(ii). It was urged in this regard that the nature of the business i.e. manufacturing activity could not be disputed and furthermore, that the work did not entail labour intensive activity but was rather capable of being performed by very few workmen. Learned counsel also submitted that the ITAT could not have doubted the high turnover reported. It was further urged that for the later years, the Revenue Authorities had accepted higher losses even though the value of machinery reported to have been purchased was over ₹30 lakhs. 4. This Court has carefully examined the orders of the Appellate Commissioner and the ITAT. Undoubtedly, the CIT(A) reversed the AO s opinion. We note further that in the 17-page order of the CIT(A), more than 14 pages were devoted to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem distinctively classifiable under Central Excise Law, on which excise duty is payable. For all these reasons, I am unable to agree with the finding of the Assessing Officer that there was no value addition at Selaqui or that no new article or thing came into existence. {4.2} The appellant has also filed a reconciliation of units manufactured at Selaqui with detailed chart in numbers of purchase of chassis of RMPU, chassis of LHB type RMPU, mounting plate with switch gear and wiring, sheet metal box and chassis of Garib Rath, and transfer of semi finished RMPU to Kala Amb. The said chart clearly shows that the Assessing officer has not considered purchase of five numbers of RMPU on 21.8.2007 and four numbers of RMPU Garib Rath on 4.12.2007. The appellant has also shown that the turnover of the business has increased from Rs.``,07,93,708/- in the preceding year to ₹ 16,72,68,395/- and the profit of the Kala Amb unit has also increased from ₹ 1,37,57,883/- to ₹ 2,51,86,186/- from the previous year. Hence the Assessing Officer‟s apprehension that the business of the Kala Amb unit has been split or reconstructed to set up the Selaqui unit appears unfou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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