Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (9) TMI 592 - HC - Income TaxDisallowance of exemption u/s 10B - CIT(A) allowed it approving the admission of the additional evidence - Held that:- As far as the first objection raised by the AO that the assessee was formed by the splitting up, or the reconstruction, of a business already in existence is not acceptable as mere reconstitution of the partnership firm can hardly be said to amount to the splitting up, or the reconstruction, of the partnership business which was already in existence. There is no dispute that after the partnership was reconstitued, the reconstituted firm had started a new business with an amendment to the partnership deed enabling the firm to carry on the manufacture and export of handicrafts items. Prior to the reconstitution the firm was authorized to merely carry on trading and exports of handicrafts etc. That apart the balance sheet as on 31st March, 2006 undisputedly shows that the assessee had acquired tools and the machinery, which were not with the firm prior to the reconstitution. Even the profit and loss accounts drawn up after the reconstitution showed manufacturing expenses and wages.Thus unable to appreciate how the Revenue can contend that the undertaking owned by the assessee was formed by the splitting up or reconstruction of the erstwhile partnership business. The contention is contrary to the facts on record - in favour of assessee. COU - Scope of term manufacture - One of the main objections of the AO was that the EOU was directed to be custom-bonded which was not complied with by the assessee. The CIT(Appeals) held that custom-bonding was required only where imports as per notification No.53/97 –customs dated 3rd June, 1997 are contemplated and since the assessee-firm did not plan to import any materials to be used in the manufacture of ingredients, the EOU was not custom-bonded - in favour of assessee. Disregard to Rule 46 A as no reasonable opportunity was given to the AO before approving the admission of the additional evidence by the CIT(A) - ITAT stated that AO took 15 months and more to submit the remand report - Held that:- The appeals before the CIT(Appeals) were filed by the assessee on 18.1.2010. It was in the course of the appeal proceedings that additional evidence had been produced and a remand report was called for by the CIT(Appeals). The appeals were eventually disposed of by the CIT(Appeals) by a common order dated 30.03.2010. Thus the entire appeal proceedings had taken less than three months for completion. In this background, it is not understandable as to how the Assessing Officer can be blamed to have delayed his remand report beyond 15 months - As the claim of the assessee based on the additional evidence had to be properly verified by the AO restore this issue to the file of the Assessing Officer to enable him to process the claim of the assessee afresh - in favour of revenue.
|