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2016 (9) TMI 210 - PUNJAB AND HARYANA HIGH COURTEntitled to the deduction u/s 80-IB in respect of Unit No.II - Held that:- Merely because the relief granted for a previous assessment year is not withdrawn, it does not follow that the assessee is entitled to the relief for the subsequent years even if during the subsequent years the assessee fails to comply with the provisions of Section 80-IB or a condition precedent to a claim for deduction under Section 80-IB ceases to exist in the subsequent years for any reason. The mere fact that there is no power connection in Unit-II would make no difference. That by itself would not disentitle the assessees to the deduction. It is important to note that there is no suggestion, much less a finding, that Unit-II used the power supplied to Unit-I. Had that been even suggested, the assessee could have met the case. In fact, the assessee’s case before us was that both the units were using generators. It is important to note in this regard that while dealing with the point that arises under the second question of law framed by us, it was noted by the Tribunal that the assessee had explained that the manufacturing process required uninterrupted regulated electric power supply and that, therefore, the assessee had not availed of any regular power connection but was entirely dependent on the power supplied by its own generator. The assessee also explained that the prices of the diesel had increased. The attention of the Tribunal was also invited to the paper books wherein an analysis of the factors reflecting upon the GP rates were mentioned. For administrative convenience, it is understandable that the assessees would maintain the same bank account in respect of both the units. The section does not make it mandatory to maintain separate bank accounts. For the same reason, the assessee cannot be denied a deduction merely because the telephone numbers are common. There is no reason for the assessees to have separate telephone connections in respect of each unit, if they can otherwise function with common telephone numbers. The section does not require the same either. The Assessing Officer also disallowed the deduction on the ground that the workers/employees were common in respect of Unit-I and Unit-II and that there was no demarcation of employees/workers as per the attendance register produced. As per Section 80-IB(2)(iv), where the industrial undertaking manufactures or produces articles or things, the section would apply if the undertaking inter alia employs ten or more workers in a manufacturing process carried on with the aid of power. The assessees, admittedly, carry on their activities with the aid of power. The Assessing Officer and the CIT(Appeals), however, denied the deduction in respect of the assessment years 2006-07 to 2009-10 only on the basis of the assessment order for the assessment year 2003-04. That could not be so on the force of Mr. Putney’s argument itself that each assessment year is to be considered separately. The assessee seeks the deduction. It would, therefore, have been for the assessee to produce evidence that the undertaking employs ten or more workers provided it was called for. The Assessing Officer did not seek any information regarding the number of workers employed by the assessee for these years. Mr. Kapoor infact stated that separate wage registers were not maintained only in the initial years but that, thereafter including for the assessment year 2006-07 onwards separate wage registers were maintained. It would be unfair then in any event to hold against the assessee with respect to the assessment year 2006-07 onwards on the basis of the finding for the assessment year 2003-04. The deduction, therefore, was wrongly denied on this ground for the assessment year 2006-07 onwards. - Decided in favour of assessee Trading addition - rejection of books of accounts - Held that: The Tribunal took into consideration various aspects including the assessee’s explanation for the fall in the GP rate. The assessee had explained, as is evident from the assessment order itself, that the fall in the GP rate was on account inter-alia of stiff competition from China. Sales bills of the respective years showing a fall in the prices of the assessee’s finished products were filed. Further it was also contended that there was an increase in proportionate generator expenses, manufacturing expenses and job work charges. A detailed summary of these expenses was furnished. Moreover the assessee also drew the attention of the authorities to the effect that they were maintaining an excise register for the excisable stock. These were undoubtedly relevant factors and the Tribunal cannot be faulted for having relied upon the same. The decision of the Tribunal relying upon the fact that there were no adverse findings by the Excise Authorities cannot be said to be absurd either. The Tribunal’s satisfaction was based on the material on record. The Tribunal’s finding that the GP rate as suggested by the assessee is plausible warrants no interference. This was essentially a question of fact and not a substantial question of law.
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