Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1100 - AT - Income TaxDeduction u/s 10AA - genuineness of the manufacturing activity - principle of res-judicate - assessee failed to discharge the onus of proving that it carried out any manufacturing activity at its SEZ unit situated at Surat - HELD THAT:- Complete onus to demonstrate fulfilment of primary conditions of Sec. 10AA was on the assessee and it was obligatory on the part of the assessee to substantiate the fact that his claim squarely fall within four corners of Sec.10AA. However, upon perusal of findings of AO with respect to time taken in manufacturing process, explanation for abnormal profits, discrepancies in bank accounts, non-realization of export proceeds even beyond 3 years, evidence of labor operations, machineries used by the assessee to carry out manufacturing operations, electricity consumption, stamping die etc., we find that the assessee remained unsuccessful to controvert the same and failed to discharge the primary onus casted upon him, in this regard. FAA while observing that Ld. AO doubted the genuineness of the manufacturing activity but made no comment or made no discussion about trading activity, granted relief to the assessee and the same, under the circumstances, could not be stated to be correct approach in the matter. We are of the considered opinion that Ld. CIT(A) had plenary powers in disposing off an appeal and the powers of first appellate authority were coterminous and coextensive with that of Ld. AO and nothing prevented Ld. CIT(A) to conduct further inquiry in this direction. No such exercise is shown to have been carried by learned first appellate authority and therefore, we are not convinced with the approach of Ld. CIT(A) in granting relief merely because Ld. AO failed to carry out the desired investigations. In AY 2011-12, the main focus of Ld. AO was on electricity consumption and labor charges as against the facts of the present year wherein Ld. AO has brought on record specific facts of time taken in manufacturing process, fact of abnormal profits, discrepancies in bank accounts, non-realization of export proceeds even beyond 3 years, evidence of labor operations, machineries used by the assessee to carry out manufacturing operations, electricity consumption, stamping die etc. which remained to be controverted by the assessee. More so, the principle of res-judicate is not applicable to Income Tax proceedings and each year is independent unit of assessment. The assessee is expected to substantiate its claim in each of the year. The rule of consistency would be applicable only in cases where the factual matrix is demonstrated to be substantially the same. Keeping in view the entirety of facts and circumstances, we deem it fit to set-aside the order of Ld. first appellate authority on this issue and restore the issue of deduction u/s 10AA to the file of Ld. AO for readjudication de-novo with a direction to the assessee to substantiate his claim of deduction u/s 10AA. Appeal stands allowed for statistical purposes.
|