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TMI Blog2021 (6) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... R) opposed this request. 3. We, however do not find any merit in the reason mentioned in the application because the assessee's case was reopened on the basis of notice u/s 148 of the Act issued on 28.03.2014 and 16.03.2015 for A.Y. 2010-11 & 2011-12. After lapse of a considerable time of around 4 years assessee had approached to the Right to Information (RTI). Assessee is a Private Limited Company and regularly filing income tax return. It has also challenged the assessment orders and succeeded. 4. Looking to the totality of facts, we are of the view that the reason mentioned by the assessee in the condonation application have no merits and cannot be of any help to the assessee. Further we are of the view that no undue hardship will be caused to the assessee if the condonation application is rejected. The same is rejected and thus delay in filing of the cross objections is not condoned. Accordingly, both cross objections No. 2 & 3/Ind/2020 are dismissed. 5. Now we take up revenue's appeal for A.Y. 2010-11 & 2011-12 for which following grounds are raised: ITANo.955/Ind/2016 for A.Y. 2010-11 "1. On the facts and in the circumstances of the case the Id. CIT is erred i holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Incentive under PSI-1993 Scheme issued on 28/03/2003 has also mention the date of 11.03.2003 as the date of commencement of production. 6.On the facts and in the circumstances of the case the Id. CIT is erred in allowing deduction u/s 80IB(3) of the Act, while initially the assessee claimed the deduction initially u/s 80IBeS) , which is clear from the Note of Audit report in which it is clearly mentioned that "the company is having factory and branch situated at backward area Akola w.e.f. 11-03-2003. Further in point no 13 of the reply dated 13-03-2013 the AR of the assessee submitted that "The company is mainly involved in manufacturing of L.T. distribution box, meter box, feeder piller, C.T. operated energy metering cabinet etc. at Akola unit which is situated in backward area & eligible for deduction u/s. 80IB." However, when it is found that the Akola is not covered in Backward Area as per Schedule AKOLA district of Maharashtra which is covered neither category 'A' nor category 'B', the assessee changed its stand and claimed that it has made trial production before 31.03.2002 as deduction is available u/s 80IB(3), and the date mentioned by the Auditor is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax, Poona vs. Hindustan Antibiotics Ltd., 93 ITR 548(Bom), Commissioner of Income Tax vs. Food Specialities Ltd., 156 ITR 790 (Del) and Commissioner Of Income Tax ... vs Nestor Pharmaceuticals Limited (2010) 322 ITR 631 (Delhi), 5. On the facts and in the circumstances of the case the Id. CIT is erred in holding "that plant & machinery was ready to put to use prior to 31.03.2002, while the assessee has shown fixed assets as capital work in progress and claimed no depreciation for the A.Y. 2002-03. 6. On the facts and in the circumstances of the case the Id. CIT is erred in allowing deduction u/s 80IB which was available only for the undertakings started their production before 31-03-2002, while in Form No 10CCB of audit report the date of 11/03/2003 has been mentioned as starting date of production, in the application form for permanent registration at small scale industries made on 17/03/2003 by the assessee has also mention the date of 11/03/2003 as the date of commencement of production and lastly the eligibility certificate for Sales Tax Incentive under PSI-1993 Scheme issued on 28/03/2003 has also mention the date of 11.03.2003 as the date of commencement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m M/s. Motion Traders Pvt. Ltd. and as per the Value Added Tax (VAT) Department, Mumbai, this party issued bogus bills. Based on this information notice was issued by Ld. AO u/s 148 of the Act. 14. However, records shows that after receiving the information Ld. iAO has not made an independent application of mind on the information. Before initiating the reassessment proceedings in motion he was bound to examine the facts related to the purchase from M/s. Motion Traders Pvt. Ltd. which is available on record. The purchase was made from a Pvt. Limited company assessed to tax. Material was received by the AKOLA unit of the assessee and on 18.12.2009 payments made through account payee cheque. Copy of bank account in support already stood filed during the assessment proceedings. Books of account are not rejected and after detailed scrutiny assessment u/s 143(3) of the Act was completed. Gross turnover of the assessee stood at 3.81 Cr. and profit offered to tax is Rs. 72,19,639/-. Against these figures the purchase of Rs. 51,116/- is too little and all the documentary evidences shows no iota of evidence that there was any intention of the assessee to evade tax by over stating the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 16-03-2002 and' the same was successfully awarded to the appellant. The appellant company has applied for tender only after completion of the construction of Factory building and after installation of the Plant & Machinery. The above facts were duly examined by the then assessing officer at the time of passing of the assessment order and therefore claim of deduction U/s 80IB(3) was allowed to the appellant. The plant of the appellant company was ready for put to use and entire machinery was installed. Building was completed and all other connections were obtained by the appellant company. The claim of the appellant was also examined in detailed while passing the assessment order for the Asst years 2005-06 and 2006-07 i.e. in the first years of profit and after being satisfied with the explanation of the appellant. The claim' was accepted U/s 80IB of the Act. 4.1.2 The AO is not justified in denying the claim of the appellant u/s 801B because:- The Plant of the appellant was ready for Production by 31.03.2002 and for want of order from the, Electricity board, the commercial . production started on 11.03.2003., The appellant contended that Plant was ready for prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was ready to put to use and therefore claim of deduction U/s'80lB '[3] of the Act was legal and Proper. The decisions as referred by the assessing officer were distinguishable on the facts of the present case and the same has been discussed above. When deductions as claimed by the appellant were allowed in the initial assessment years alter duly examining the claim of the assessee, in that case there was no reason in the subsequent year to differ the same and withdraw the claim of deduction as allowed U/s 80lB of the Act. Therefore, the addition made by the AO amounting to 42,92,354/- is deleted. The appeal on these grounds is allowed. 17. From perusal of the above finding as well as the documentary evidences placed before us in the paper book including water connection, electricity connection, Maharashtra Pollution Control Board Registration, Sales Tax registration, professional Tax registration and the date of installation of machinery and found that all these events occurred before 31.03.2002 which was the deadline for commencing the commercial production. Ld. DR failed to rebut this fact by placing any contrary material. 18. We, therefore, under the given facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- Through these grounds of appeal the appellant has challenged the re-opening u/s 147 of the I.T. Act. I have considered the facts of the case and submissions made by the appellant. The AO has recorded his reasons for re-opening and the said reasons are as under: In this case, the assessee company was engaged in the manufacturing of transformer and feeder pillars, filed its return of income for A.Y. 2011-12 on 22.09.2011 declaring total income of Rs. 74,20,390/-after claiming deduction u/s 80IB for Rs. 59,15,999/- for Ashok unit which was processed u/s 143(1). The assessment has been completed u/s 143(3) on 27.3.2014 at a total income of Rs. 75,45,390/-. 2. During the course of assessment proceeding for A.Y.2012-13 it is noticed that the Akola unit has registered in Maharashtra as small scale industries and commenced the production activity on 11.3.2003( as per report furnished in from 10CCB certified by the chartered accountant) 3. However, it is found that the Akola district neither covered in category "A industrial backward district nor was covered in category B. therefore assessee company was eligible for deduction u/s 80IB(5). Further, as per conditions of 80IB(3). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that proceedings leading to issue of notice u/s 148 have not been validly initiated. The appellant is engaged in the business of manufacturing of transformers and switch gears. The assessment for the year under consideration was completed u/s 143(3) by allowing the deduction u/s 80IB of the Act claimed by the appellant. The AO subsequently noticed the appellant has commended manufacturing activity on 11.32003 whereas as per the provisions of section 80IB(3), the production should have started before 31.3.2002. The appellant had been allowed deduction u/s 80IB of the IT. Act in the earlier years and hence the AO has reopened the assessment only on change of opinion. The details related to the deduction claimed u/s 80IB was available before the AO in the original assessment proceedings pertaining to the assessment year 2005-06, 2006-07,2010-11 and 2011-12 which has been completed u/s 143(3) of the I.T. Act. The AO has not brought out any fresh material on record therefore reopening was done on mere change of opinion. Therefore, the appeal on these grounds is allowed. 25. From perusal of the above finding as well as the settled judicial precedence and our finding in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production by March, 2002. 4.2.1 The appellant in response to the open bid of tenders filed its Tender on 2nd March 2002 which was opened on 16.3.2002 and the same was successfully awared to the appellant. The appellant company has applied for tender only after completion of the construction of factory building and after installation of the plant & machinery. The above facts were duly examined by the then assessing officer at the time of passing of the assessment order and therefore claim of deduction u/s 80IB(3) was allowed to the appellant. The plant of the appellant company was ready for put to use and entire machinery was installed. Building was completed and all other connections were obtained by the appellant company. The claim of the appellant was also examined in detailed while passing the assessment order for the Assessment. Years 2005-06 and 2006-07 i.e. in the first years of profit and after being satisfied with the explanation of the appellant. The claim was accepted u/s 80IB of the Act. 4.2.2 The AO is not justified in denying the claim of the appellant u/s 80IB because: The plant of the appellant was ready for production by 31.3.2002 and for want of order fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 15,67,404/-. The said contention supports the claim of the appellant. Since, the plant of the appellant was ready to put to use and therefore claim of deduction u/s 80IB (3) of the Act was legal and proper. The decisions as referred by the assessing officer were distinguishable on the fact of the present case and the same has been discussed above. When deductions as claimed by the appellant were allowed in the initial assessment years after duly examining the claim of the assessee, in that case there was no reason in the subsequent year to differ the same and withdraw the claim of deduction as allowed u/s 80IB of the Act. therefore, the addition made by the AO amounting to Rs. 59,15,999/- is deleted. The appeal on these grounds is allowed. 27. We further find that in the preceding assessment year i.e. A.Y. 2010-11 this issue has already been examined by us and in the light of facts and documentary evidences have held that as the appellant company was ready for manufacturing before 31.03.2002 and deduction claimed by the assessee were allowed in the initial assessment year and the assessee is eligible for deduction u/s 80IB of the Act. We, therefore, confirm the finding of Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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