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2013 (6) TMI 102 - AT - Income TaxDeduction u/s 80IC - are bases exemption - AO concluded that the assessee has not carried out any manufacturing activities at the factory premises - as per AO considering the span of purchase of raw materials and sale of finished goods, it was not possible to manufacture the articles shown by the assessee in the return of income - Held that:- This was the third year of the existence of the assessee firm. The assessee has filed the various documents to establish that it was engaged in the business of manufacturing of perfumery/aromatic compounds at, Uttarankhand as confirmed by a copy of licence from Directorate of Industry, Kotdwar which shows that the assessee was categorized as unit producing Natural Atras and Perfumery Compound. This licence was issued on 27.11.2006. The address in this licence is B-14, Balbhadrapur Industrial Area, Kotdwar, Garhwal. This registration was w.e.f. 26.11.2006. The other document filed by the assessee is Form ST-2 Certificate for Registration u/s 69 of the Finance Act, 1994 issued by the Superintendent of Customs & Central Excise Range Kotdwar, other documents like order of the Commercial Tax Department, Uttarakhand u/s 25 (7) and Section 9(2) by Shri S.S. Negi, Deputy Commissioner, Vanijya Kar, Kotdwar, where the tax liability by the assessee has been decided decalring product is self produced perfumery oil. The tax liability of the assessee had been made of ₹ 94,64,794/- and after making the adjustment to a prepaid taxes of ₹ 8,11,044/-, the balance was to be paid. In this order, the details of the raw material also elaborated, i.e. the Jari Booti, DOP, LLD, Gas, Packing Material and Imported Perfumery Compound. The assessee has also filed request dated 07.12.2006 for obtaining no objection certificate from Fire Department again mentioning the place of the industry at B-14, Balbhadrapur Industrial Area, Kotdwar also confirmed by no objection certificate from the Fire Department. Revenue had not established any thing contrary to these documents. The assessee has also placed documents with regard to the dispatch of finished goods by railway parcel bill from Kotdwar to Delhi establishing that product was sold out and also dispatched from Uttarakhand. Confirmations from debtors and creditors are also filed which were not questioned by AO. The assessee also submitted the rent agreement in respect of the factory. The main raw material was Rose Kashmir which was used in production of perfumery compound along with Jari Booti, DOP, Gas, Small Drum and P. Compound. The assessee has also placed certificate from Chartered Engineers in respect of the production of finished goods in short period wherein the process of mixture of all the material is boiled in a vessel through gas or fire wood heat treatment process and vapor generated in this process which is called extract. The utensils at the premises of the assessee were for the capacity of more than 500 kgs. and more. All these facts show that the assessee has submitted independent evidences regarding the existence of the production unit at B-14, Balbhadrapur Industrial Area, Kotdwar during the relevant period. The inspection at the later day by the IT Authorities alone is not sufficient to dislodge the evidences submitted by the assessee regarding running of the factory at the premises, thus the product of the assessee qualifies for deduction u/s 80IC. Moreover on the rule of consistency where the assessee has already enjoyed the benefit of section 80IC in the immediate presiding year and there is not change in the position of law and facts then it shall not be proper to deny the benefit of section 80IC. Also see DCIT vs. Natural Fragrances [2013 (1) TMI 158 - UTTARAKHAND HIGH COURT]. Decided in favor of assessee.
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