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2015 (4) TMI 97 - AT - Income TaxDeduction u/s 80IB - Whether unit is a new undertaking and qualifies for deduction u/s 80IB as held by CIT(A) when the new machinery has not been installed in place of and the appellant has made substantial investment in the plant and machinery? - Held that:- In the assessment order, the AO observed that none of the above conditions of Section 80IB of the Act stood fulfilled by the assessee. It was observed that the stone crusher/industrial unit under consideration has been set up way back in 1971 as is evident from the registration granted by Industries Department in the name of one Sh. Jatinder Kumar Sharma S/o Sh. Amar Nath R/o Birwah Bridge Dhanari Udhampur. The assessee has in fact purchased this old stone cursher in 2006 from Sh. Jatinder Kumar. The unit is not a new one and thus eligible for 80IB deduction. The assessee has not produced any satisfactory material on records to prove the newness of the unit in terms of the provisions of section 80IB. The undertaking is a reconstructed business unit already in existence and not a new one. The original business in this case has not ceased functioning and its identify is not lost. There has been some P&M installed in the old stone crusher and the assessee has not been able to give details of such P&M and continued to argue that the Old P&M was worth nothing but only a scrap. Sh. Jatinder Kumar has admitted to have made heavy repairs and renovation to the P&M few years back of the transfer which negates the claim of the assessee. The running of stone crusher is a business involving converting of boulders into smaller stones like bajri, etc which is not considered manufacturing for the purpose of 80IB. The case is squarely covered by the decision given by in the case of ITO Vs Jitendra Stone Crushing Co [2006 (3) TMI 210 - ITAT CHANDIGARH-A ] wherein held that breaking of boulders into small stones or bajri is not a manufacturing activity. In respect of new Industrial Unit, once completed and ready for production, a Certificate of Registration is grated by the district DIC authorities certifying the date of production etc. The registration granted by the DIC authorities in this case dates back to 1971 and the date of commencement of the production is to be treated some around 1971 in this case. The stone crusher has been in the name of Sh. Jatinder Kumar Sharma R/o Birwah Bridgem Dhanori Udhampur upto Mar,2006. In March, 2006, the assessee became a partner in the business concern and after a few days became the sole proprietor by shunting out Sh. Jatiner Kumar. No satisfactory documentary evidence has been furnished by the assessee regarding the sale/transfer of this working unit. No sale deed has been produced nor any disclosure of the purchase of the unit/stone crusher has been made, thereby casting a doubt on the genuineness of the transaction/purchase itself. Thus it is fairly a sham transaction in which an existing unit has been acquired/purchased in the guise of partnership. A sham transaction in no way can be eligible for deduction u/s 80IB. The ld. CIT(A), as correctly submitted by the ld. DR, has not considered any of the above said observations of the AO, muchless dealt with then. Therefore, the order under appeal is a non speaking order - remit this issue to the file of the ld. CIT(A), to be decided afresh. - Decided in favour of revenue for statistical purposes. Disallowance of carriage expenses,Wages, Machine Running & Maintenance., Tipper expenses, Staff welfare, Establishment, etc. - CIT(A) has reduced the disallowance - Held that:- Evidently, no reason for reducing, the disallowance has been given by the ld. CIT(A), rendering the order under appeal an non-speaking order in this regard. Such an order is unsustainable in law, as it is well settled that all orders of quasi-judicial Authorities must be speaking and reasoned orders. Accordingly, this issue is also remanded to the file by the ld. CIT(A), to be decided afresh by passing an speaking order, on providing due opportunity of hearing to the assessee. - Decided in favour of revenue for statistical purposes.
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