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TMI Blog2019 (11) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of manufacturing data card to be used in inverters as well as UPS and furnished all the relevant documents which had been examined and taken on record. A.O after due verification of available facts and records allowed the claim of the assessee and accepted the returned income. We therefore are of the view that the Ld. Pr. CIT was not justified in holding that the assessment order dt. 30/11/2016 passed by the A.O. was erroneous or prejudicial to the interest of the Revenue particularly when there is no such discussion for the said assessment year in the impugned order, the only discussion was relating to the A.Y. 2012-13. Accordingly, we do not see any justification on the part of the Ld. Pr. CIT in setting aside the assessment order passed by the A.O. - Appeal of the Assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... rary to facts and evidence on records, legally misconceived, vague, arbitrary and, thus untenable. 8. That the authority below have framed the impugned order without granting sufficient proper opportunity to the appellant and therefore the same are contrary to principles of natural justice and hence vitiated. 3. From the above grounds it is gathered that only grievance of the assessee relates to the action of the Ld. Pr. CIT in setting aside the assessment order passed by the A.O. by invoking the provisions of Section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 4. Facts of the case in brief are that the Assessee e-filed the return of income on 08/10/2014 declaring taxable income at NIL later on the case was selected for scrutiny, the A.O. accepted the returned income of the Assessee by passing the assessment order dt. 30/11/2016 under section 143(3) of the Act. The A.O. observed in the said assessment order that the assessee was engaged in the business of manufacturing data card used in inverters as well as UPS and furnished all the relevant documents for claim of deduction under section 80IC of the Act, which had been examined and taken on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip firm constituted on 09/03/2012 and the year under consideration was the third year of its existence. It was also stated that the assessment order passed by the A.O. was neither erroneous nor prejudicial to the interest of the Revenue and it was also not a case of lack of enquiry or lack of investigation on the part of the A.O. It was further stated that the claim of the assessee under section 80IC of the Act was allowed by the A.O. in accordance with law after examination of the books of accounts on merit of the case, the assessee also submitted to the Ld. Pr. CIT as under: S.No. Observation in the notice Submission of the Assessee i) As per Report in Form No. 10CCB your firm started manufacturing activities on 09.03.2012 i.e. F.Y. 2011-12 relevant to the A.Y. 2012-13. If the your contention is accepted that it had started its activity during the F.Y. 2011-12, then, as on 09.03.2012, the assessee had not got necessary approval from the Single Window Clearance Agency of Govt, of Himachal Pradesh. As far as grant of approval by the Single Window Clearance Agency of Govt. of Himachal Pradesh is concerned, it was granted on 31.03.2012 only. Since, your firm had no approval to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with Excise and Taxation department of Himachal Pradesh substantiates that the assessee has started its manufacturing facility before 1st April 2012. Merely because the date mentioned in the Form 10CCB is prior to the date of purchases and certificate of registration from Excise and Taxation Department on dated 27.8.2012, it will not preclude the eligible assessee from claiming tax holiday u/s 80IC of the Act. The party M/s Uniwork Electronic, from whom your firm had made purchases and also, in whose favour, the only sale Invoice dated 31.03.2012 was issued does not exist at the Authorities have reported given address. The Postal remarks that there is no such firm at the given address of the party. The other party, namely M/s J.J. Electronics has also not responded to this office letter dated 6.10.2017 calling for information u/s 133(6) of the Income Tax Act, 1961. The burden of the assessee to establish the genuineness of the purchase/sale stands discharged by the invoices of both sales and purchases. The date of payment is 28.3.2013 relates back to the date of purchase/sales and in any case, so the same is, of consequence: i) That goods have been purchased from independen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of salary of ₹ 19,345/- for the month of March,2012. However; no payment was made till 31.03.2017. No salary register was produced. Thus, there is no evidence as to whether you had carried out any activity, as claimed. Further, you have debited ₹ 9553/- on account of Rent. However, no payment was made till 31.03.2012. Also, no rent agreement was produced by you before the A.O. You have also debitedelectricity payment of ₹ 4,325/-. However, no payment was made till 31.03.2012, Further, as per the books of accounts for the F.Y. 2011-12, no cash withdrawals were made from 26.03.2012 to 31.03.2012. Since, no payment was made with regard to various expenses claimed, the genuineness is not established, as there is no documentary evidence in support thereof. i) It is submitted that the assessee has debited an amount of ₹ 19,345/- on account of salary payable of 5 employees for the month of march 2012. The said sum has been paid by the assessee in the following month i.e. April 2012. ii) The assessee has entered into a rent agreement with Smt. Sushma Sharma. The rent receipt proves that assessee has made payment of rent of ₹ 54000 through cheque dated 17.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its manufacturing activities till 31.03.2012 {i.e. before 01.04.2012} I and therefore, the assessee was not entitled to claim deduction u/s 8010 of the Income Tax Act, 1961 for the A.Y. 2012-13 or, for that matter, any of the subsequent assessment years. Accordingly, your claim of deduction u/s 801C, the deduction of 'was disallowed and the same was added to your income for the A.Y. 2015-16 Reply to para 13 below of this reply 6. The Ld. Pr. CIT after considering the submissions of the assessee observed that the assessee firm was a proprietary concern of Shri Nikhil Nath upto 08/03/2012 and consequently a partnership firm having the same name was constituted on 09/03/2012 having two partners i.e; Shri Sanjay Aggarwal with 98% of shares and Shri Nikhil Nath with 2% of the shares. The Ld. Pr. CIT pointed out that following new facts were brought on record: i) As per Audit report in Form 10CCB, the assessee started manufacturing w.e.f. 09.03.2012, however, as against the same the Single Window Clearance Agency of Govt, of HP has granted the approval to the assessee only on 31.03.2012; ii) During the assessment proceedings for the A.Y. 2015-16 the assessee vide its reply date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its P&L account for the year under consideration remained unsubstantiated; vii) The AO has also observed that the assessee has submitted bill of ₹ 4,63,352/- on account of purchase of machinery but no details and evidence regarding the installation of said machinery before 31.03.2012 was produced by the assessee; and viii) The assessee has claimed sales of ₹ 1,27,500/- having made during the year ended as on 31.03.2012, however, no payment against the same was found received by the assessee till 31.03.2012. It was further observed that the assessee claimed the entire sales having made to M/s Uniwork Electronics, New Delhi and the payment to the extent of ₹ 97,257/- is claimed adjusted against the purchase of raw material made from the said party as discussed above, although the whereabouts and existence of the said party is not proved by the assessee. 6.1 The Ld. Pr. CIT held that the assessment order passed by the A.O. was erroneous and prejudicial to the interest of the Revenue by observing in para 9 of the impugned order as under: 9. Therefore, on account of these specific findings recorded by the AO after conducting detailed inquiry in the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84 (SC) iv) Smt. Tara Devi Aggarwal Vs. CIT, 88 ITR 323 (SC) 6.3 The Ld. Pr. CIT accordingly quashed the assessment order passed by the A.O. 7. Now the assessee is in appeal. 8. The Ld. Counsel for the Assesee reiterated the submissions made before the authorities below and further submitted that the Ld. CIT nowhere stated that the assessment order passed by the A.O. for the year under consideration i.e. A.Y 2014-15 was either erroneous or prejudicial to the interest of the Revenue. He referred to para 9 of the impugned order wherein the Ld. CIT discussed the issue. It was contended that the Ld. CIT himself admitted that the detailed enquiries were made by the A.O. during the assessment proceedings for the assessment year 2015-16 which were relevant for the claim of deduction under section 80IC of the Act, for the assessment year 2012-13, and that the assessment order for the assessment year 2012-13 passed by the A.O. was in haste without conducting due enquiries as well as without making proper verification of the books of accounts made by the assessee and even the audit report in Form No. 10 CCB was wrong or incorrect as the report mentioned therein that the assessee had st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de therein. 10. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is not in dispute that the assessee was Registered with the Government of Himachal Pradesh, Department of Industry which is evident from the certificate dt. 11/03/2010 issued by the said Department, copy of which is placed at page no. 462 of the assessee's compilation. The said copy was obtained by the Assessee as an information under the RTI Act 2005. In the said certificate it is mentioned that the assessee intended to set up Manufacturing Enterprise at Takshal Parwanoo, Distt. Solan to manufacture UPS and Energy Meters. The Assessee started manufacturing before April 2012 and added additional machinery for manufacturing, worth ₹ 4,62,140/- which is evident from the copy of order sheet obtained by the assessee under the RTI Act, from Department of Industry and the same is placed at page no. 449 & 450 of the assessee's compilation. In the present case, it is evident that the assessee was engaged in manufacturing and expansion has taken place before the assessment year 2012-13, therefore the Ld. CIT was not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y stated that the A.O. during the course of assessment proceedings for the A.Y. 2015-16 noticed various discrepancies/infirmities vis-à-vis the claim of deduction under section 80IC of the Act, inspite thereof, the A.O. had allowed the deduction under section 80IC of the Act, in the case of the assesse for the relevant A.Y. 2012-13. However the Ld. Pr. CIT in para 13 of the impugned order has set aside the order passed by the A.O. under section 143(3) of the Act for the year under consideration i.e. A.Y. 2014-15 but no observation relating to claim for deduction under section 80IC of the Act has been given for the said A.Y. On the contrary the A.O. passed the assessment order dt. 30/11/2016 by mentioning that the notice under section 142(1) of the Act alongwith questionnaire was issued to the assessee on 16/06/2016 requiring the assessee to furnish detail/information. He also stated that the assessee was engaged in the business of manufacturing data card to be used in inverters as well as UPS and furnished all the relevant documents which had been examined and taken on record. The A.O after due verification of available facts and records allowed the claim of the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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