TMI Blog2012 (7) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirement u/s 80IB(1), 80IB(2) and 80IB(4) is that profit must derive from an industrial undertaking. Therefore, it cannot be held that undertakings are not eligible to claim deduction u/s 80IB. Refund of excise duty - Revenue contended ineligibility for deduction u/s 80IB on ground that same being income 'not derived from the industrial undertaking' but the income attributable to the receipt of excise duty refund from the industrial undertaking - Held that:- Issue stands covered by the decision in the case of Shree Balaji Allows v. CIT [2011 (1) TMI 394 (HC)] wherein it has been held that the Excise Duty Refund is to be treated as 'capital receipt' and not liable to be taxed. Depreciation - dis-allowance on ground that construction material used comes within preview of building and no P&M - Held that:- Once the said expenditure is part of the plant and machinery, which is not under dispute, such expenditure necessarily has to be part of plant and machinery and depreciation as claimed has to be allowed. Dis-allowance u/s 43B - employees contribution to Provident Fund - payment before due date of filing return - omission [deletion] of the second proviso to Section 43- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of the business already in existence, or had been formed by the transfer of a new business of machinery or plant used for any purpose). The denial of deduction, when there had been no violation or infringement of the statutory provisions of law was highly arbitrary, rendering the order of the assessment as unsustainable in law. 3.1 That, Ld. CIT(A) has failed to comprehend that the two undertakings ( in respect of which the deduction u/s 80IB had been claimed) though were situated on the same plot of land, (where its old undertaking I, was situated), yet were independent and had been set up with the new plant and machinery, in the years 1999 and 2003. Further, the undertaking set up in the year 2003 was also involved in the manufacture of spray oils, besides pesticides, which was not being manufactured and produced by the undertaking set up in the year 1995, or even in the year 1999. 3.2 That, Ld. CIT(A) has failed to appreciate that the assessee had been allowed the deductions, in respect of the said two separate undertakings which had been set up in the yeas 1999 and 2003, in the preceding year(s) and there was thus absolutely no valid jurisdiction or basis to disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CIT v. Rao Raja Hanut Singh reported in 252 ITR 528 as such the purported and alleged evidence could not have been used by the ld. CIT(A). That in any case and without prejudice the alleged evidence was no evidence and no adverse inference could have been drawn on the purported evidence/material. 3.9. That the Ld. CIT(A) has erred in placing heavy reliance on the report of the handwriting expert appointed by the AO in preference to the report of handwriting expert by the assessee. He ought to have referred the difference to be resolved by third handwriting expert in any case, so as to conclude that the Auditors Report has not been preferred by Sh. K.S. Aggarwal. 4. That the order of the Ld. CIT(A) is a vitiated order in law, since it is made on non consideration of material evidence, as placed by the assessee and also by ignoring the detailed submissions made by the assessee company. On the contrary the findings have been reached as extraneous and inadmissible purported evidence. 5. That further, without prejudice the Ld. CIT(A) has further erred in sustaining the disallowance of the claim of deduction u/s 80IB of the Act of Rs. 3,10,11,113/- in respect of refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'building' and before so concluding the AO had provided no opportunity whatsoever that the alleged building was plant and as such the findings there was an excessive claim made was based on arbitrary findings, which are unsustainable in law. 10. That the Ld. CIT(A) has further erred in sustaining the addition of Rs. 42,123/- which sum had actually been paid by the assessee towards employee's contribution to Provident fund, within the time i.e. before furnishing the return of income and as such, such an amount was allowable deduction and could not have been treated as income u/s 2(24)(x), read with section 36(1)(va) of the Act. 11. That the ld. CIT(A) has further erred in confirming the levy of interest charged u/s 234B of the Act, which was not leviable. It is therefore prayed that it be held that the order of assessment had arbitrarily been made and was totally unjustified, untenable and had been made without following the settled principles of natural justice and the well settled legal principles, in respect of deduction allowable u/s 80IB of the Act and the ld. CIT(A) has further erred without giving specific findings in sustaining the disallowances and confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,458/-, the loss which was to be allowed was Rs. 5,33,53,582/-being the difference in the rates of depreciation as per Income-tax Act and Companies Act. The set off of loss of Rs. 1,30,43,458/- was not claimed by the assessee for the reason that income of the assessee was exempt. It was argued by the ld. counsel for the assessee, Mr. C.S. Aggarwal, Advocate that the claim made by the assessee is supported by the decision of ITAT, Mumbai Bench in the case of Navin Bhart Industries Ltd. v. DCIT reported in 90 ITD 1 and in the case of CIT v. Galaxy Surfactants Ltd. 69 DTR 42 (ND). The Ld. counsel for the assessee argued that all the facts in the present claim were on record before both the authorities below. It was argued by the ld. counsel that as per Circular of CBDT dated 11.04.1955, the correct income has to be computed. The Ld. counsel for the assessee relied upon the decision in the case of Income Tax Officer v. Ch. Atchaiah (SC) reported in 218 ITR 239. 4. On the other hand, Mr. Girish Dave, the Ld. counsel appearing for the Revenue submitted that the return of income was filed on 21st March, 2006 and is a belated return. These facts were not brought to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the above units are claimed to be operating their industrial undertaking from Lane No.4, Phase-2, SIDCO Industrial Complex, Bari Brahamana, Jammu. As per Form No. 10CCB filed AO observed for FIL Industries Ltd. (Jammu Unit-2) and FIL Industries Ltd. (Jammu Unit-3) shows that both have common Central Excise/Service Tax Registration Number as AAACF3272AXM001.JAMMU and common Sales Tax Registration Number as 01181070576/JAMMU. Normally, if these were separate business and independent manufacturing units, these were required to be registered separately with the Central Excise/Sales Tax Authorities and obtained separate registration numbers. It therefore, appeared that Unit-2, Jammu and Unit-3, Jammu of FIL Industries Ltd. are not separate and independent industrial undertakings of the assessee i.e. FIL Industries Ltd. for the purposes of section 80IB of the Act. Apart from the above, another Unit which was no longer eligible for deduction u/s 80IB of the Act was also operating from the same premises. All the three Units were in the same line of business i.e. manufacture of Pesticides and other Agro Products. From the above records, it appeared that all the three Units were the same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is reproduced as under: "Your kind attention is drawn towards section 80IB of the Income Tax Act, wherein the conditions for the industrial undertaking eligible for deductions and their compliance which are as follows:-Conditions: ( a ) Not formed by splitting up of business:- the industrial undertaking should not be formed by splitting up of the existing business. The assessee had not formed the Units by splitting up. All the units of the assessee are in dependent and formed by new plant machinery. ( b ) It is not formed by the transfer to new business of machinery previously used for any business. All the manufacturing undertakings are separate and installed by new purchased machineries. ( c ) It manufactures or produces articles or things (except those specified in Eleventh Schedule) or operates Cold Storage Unit within the specified time limit. The assessee is in the business of manufacturing of pesticides and other agro products and is not manufacturing of pesticides and other agro products and is not manufacturing any product specified in Eleventh Schedule. The manufacturing Units were established before the time limit (31/03/2007 for the State of Jammu Kashm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted alongwith the reply. In the reply it has been submitted that no documents were filed with SIDCO, Jammu since no separate capital investment subsidy/land allotment had been applied for Unit-2 and Unit-3. 7.4 It was observed by the AO that Unit 3, Jammu is running from the same premises as that of the earlier two Units, especially, the original unit which is identified by the assessee as Unit-1. As regards the application of Permanent Registration as Small Scale Enterprise for unit-3, the same has not been granted till date, even three and a half years after the formal application. As regards the Pollution clearance consolidated consent to operate all the three units is there. No separate permission has been obtained from J K, State Pollution Control Board to run Unit-3. There is no evidence on record to furnish that Unit-3 is a new and separate industrial undertaking, separate and distinct from other two Units. 7.5 As regards the purchase and sale invoices of the three units which are located in the same premises were of the name of FIL Industries Ltd; and not separately in the name of Unit-2 Unit-3 and the original unit as Unit-1. Although Unit-2 was registered wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner Central Excise Division, Jammu vide order in original No.1-2/AC/Expansion/Ref/04 dated 09/03/2004 where under the unit has been adjudged as eligible for exemption benefit under Notification No.56/2002 dated 14.11.2002 The said capacity expansion pertains to the unit already registered with the department and the unit does not change its identity after expansion i.e. the same unit has got the expansion in order to avail the benefits of Notification No.56/2002 dated 14/11/2002 i.e. the same unit has got the expansion in order to avail the benefits of Notification No.56/2002 dated 14/11/2002. (C) Yes, the assessment for Central Excise purpose is done as one unit both for the unit prior to expansion and after expansion. (D) Yes, the units, the original unit as well as the expanded unit are treated as same Industrial Unit/Undertaking for Central Excise purposes. (E) Yes, M/s. FIL Industries, Lane No.4, Phase-II, SIDCO Industrial Complex, Bari Brahamana, Jammu registered with the department vide Registration No. AAACF3272AXM001 dated 20/03/2007 is claiming Excise Duty Refund as a single Industrial Unit/Undertaking. (F) There is no unit in the name of M/s. FIL Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al undertaking in an industrially backward state specified in the Eighth Schedule has been complied with, so deduction claimed u/s 80IB should be allowed to the assessee. Further submitted that Unit II was established in the financial year 1999-2000 and claiming deduction since then which has been allowed in the earlier years in assessments u/s 143(1) and 143(3) also. Similarly, Unit III was established in financial year 2003-04 and the deduction for the same has been allowed as per assessment u/s 143(1) in the first year of operation. Your kind attention is also drawn towards the following judgment: Commissioner of Income tax v. Indian Aluminimum Co. Ltd. 88 ITR 257 (Cal), wherein the honourable High Court of Calcutta has held that "Reconstruction of existing business-New productions units added by assessee to existing production units resulting in almost double the production-substantial investment made in the new units cannot be called reconstruction. Assessee's original business remaining intact, establishment of separate independent undertakings by large investments whether of same or different nature in respect of same or different commodity, cannot be called reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 30 of his order concluded the matter and the findings of the AO are reproduced for the sake of clarity as under: "However, capacity expansion of an industrial undertaking already in existence as has been certified to have been done in the case of the assessee by the Excise Authorities does not mean setting up of a completely new industrial undertaking. Capacity expansion is only for the original unit already in existence and which is no longer eligible for the benefits of section 80IB . No new industrial undertaking comes into existence as a result of capacity expansion of an already existing unit/industrial undertaking. It is absolutely clear that the capacity expansion was done in respect of the original industrial undertaking of FIL Industries Ltd. which was registered with the Excise Authorities on 07/10/1994 in the name of Fungicide India Ltd. which was later changed to FIL Industries Ltd. w.e.f. 08/11/2000 and whose date of commencement of production is certified as 31/03/1995 by the Excise Authorities. The capacity expansion was done by the said Unit so as to become eligible for exemption benefits under Notification No.56/2002 dated 14.11.2002. The assessee cannot clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Unit-1 ( which is no longer eligible for deduction u/s 80IB). The alleged Unit-2 and Unit-3 , Jammu have not filed any documents with SIDCO, Jammu for starting new industrial undertakings which is normally required. The power connection is in the name of the original Unit and the alleged Units 2 3 do not have any separate power connection or permission from the Electricity Department. Rather, the power connection is in the name of the industrial undertaking which is no longer eligible for deduction u/s 80IB of the Act. No permission has been taken from the Pollution Department in the name of the alleged Units -2 3 which is required to be done in case new industrial undertakings are being set up. The purchase bills are in the name of FIL Industries Ltd. for the original Unit as well as the alleged Units-2 and 3. If these were separate industrial undertakings the purchase bills should have been in the specific names of the particular undertaking. Even the sales invoices have been admitted to be common for the original Unit as well as for the alleged Units-2 and 3.Had these been separate and distinct industrial undertakings, these would have raised the sales invoices in their i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original Unit which is no longer eligible for deduction /s 80IB, the claim of deduction of Rs.49,48,809/- claimed on account of alleged Unit-2, Jammu and the claim of deduction of Rs.6,52,08,094/- claimed on account of the alleged Unit-3, Jammu of FIL Industries Ltd. is disallowed and added to the total income of the assessee. During the course of assessment proceedings and vide its reply dated 26.12.2007, it has been submitted by the Counsel that deduction claimed u/s 80IB by Unit-2 and Unit-3 have been allowed in the earlier assessment years. The assessee has also drawn attention towards the judgment of the Hon'ble High Court of Calcutta in the case of CIT v. Indian Aluminium Company Ltd. 88 ITR 257. The submissions of the assessee have been considered. Only because a deduction has been allowed in any earlier assessment year does not mean that the same will be continued to be allowed in the subsequent years when the claim of deduction is found to be wrong and against the provisions of the Act. Further, the judgment relied upon by the assessee as above is not relevant to the issues which are involved in this year. The issue is not relating to reconstruction of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t up an industrial undertaking separately. Statements on oath of different employees were recorded that only one industrial undertaking was set up in the year 1994. Survey under section 133A of the Act was also carried out in the premises of the auditors' of the company M/s. K.S. Aggarwal Co. CAs and statements of Sh. K.S. Aggarwal and Sh. Aditya Aggarwala were recorded, who denied having any knowledge of the assessee company and they have never audited books of account of the assessee. It was submitted by the said Auditors' that Form No.10CCB filed by the assessee is false and forged. 8.1 The assessee in response to the comments of the AO submitted that survey action cannot be the basis of denying deduction u/s 80IB of the Act, since the statements so recorded during the course of survey have no evidentiary value. The statements so recorded are based which are in the knowledge of the employees of the undertakings of the assessee company. The report from forensic expert was also filed to certify the genuineness of the signatures of the Auditors'. It was also submitted that the assessee had installed separate Plant and Machinery and books of account and other records like prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have categorically denied having audited the books of account of the appellant company, the statement of Sh. B.Lal, Forensic Document Expert, where in he has stated that his opinion is only with reference to the signature produced before him for examination by M/s. FIL Industries Ltd and that he has no personal knowledge of any K.S. Agarwal of M/s. K.S. Agarwal Co.; 165 , Sukhdev Vihar, New Delhi and also in view of the report of Sh. D.D. Goel, Forensic Document Examiner, 17, Harsh Vihar, Pritampura, Delhi - 110034, wherein he has given his opinion that the stamp impressions and the signatures on the said Audit Report are different and not the same, I hold that the genuineness and authenticity of the Audit Report has not been established. Therefore, considering the totality of the facts and circumstances I am of the view that the forensic report of Sh. B. Lal, submitted by the appellant does not appear to be a credible document as it lacks the basic requirements of genuineness of the admitted documents, Audit Report u/s 44AB in Form No.3CD and Form No.3CA, audited P L A/c, Audited Balance Sheet and all the documents relating to Balance sheet and P L account of the A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IB for five years continuously for Unit-2 and one year for Unit-3 as mentioned hereinabove. The assessee had prepared a separate Profit Loss account of each Unit and have declared unit-wise separate profits which is a matter of record and have not been disputed. 8.3 It was argued by the Ld. counsel for the assessee, Mr. C.S. Aggarwal relying upon the decision in the case of Coca Cola Export Corporation v ITO reported in 231 ITR 200 (SC) that there is no requirement to obtain separate registration for each of the unit even assuming that there is violation of the said requirement. Accordingly, even such violation cannot be the basis to deny the claim of deduction u/s 80IB of the Act. He argued that the assessee had fulfilled all the conditions which were necessary to claim deduction u/s 80IB of the Act on the basis of which the assessee had been allowed deduction for Unit-2 for five years and for one year for Unit-3 as mentioned hereinabove. He took the Bench to the provisions of Section 80IB of the Act. Mr. C.S. Aggarwal, Ld. counsel for the assessee, invited our attention to the various pages of the paper book where the assessee had made fresh investments for setting u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than the evidence produced by him during the course of proceedings before the A.O. It is not the prerogative of the AO to produce any additional evidence before the Ld. CIT(A) which in the present case has been done by the A.O. by making survey on the assessee. Therefore, the Ld. counsel Mr. C.S. Aggarwal, argued that in the absence of any inquiry made by the CITA), the evidences relied upon by the AO during the appellate proceedings are without jurisdiction. The Ld. counsel for the assessee relied upon the decision of the Hon'ble Rajasthan High Court in the case of CIT v. Rao Raja Hanumant Singh reported in 252 ITR 528 and decision of ITAT, Delhi Bench in the case of Mitsui and Co. Ltd. New Delhi v. ACIT Circle 2, Delhi, which are placed on record. Therefore, during the course of hearing such survey statement so recorded of the employees have no evidentiary value as having recorded during the course of survey. He relied upon the decisions of various courts of law in support of his claim, as under: ( i ) Paul Methews Sons v. CIT 263 ITR 101 (Kerala) ( ii ) CIT v. S. Khader Khan Sons 300 ITR 157 (Mad) ( iii ) CIT v. Dhingra Metal Works [2010] 328 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80IB of the Act, the setting up of the Units was not independent and separate undertaking. He further argued with regard to the inquiry from various statutory authorities like Central Excise Department, Commercial Tax Officer, Inspector Factory and Boiler, DIC, Plant Protection Department etc. that the assessee has not set up separate and independent undertaking. Mr. Dave, the Ld. counsel for the Revenue relied upon the order of Central Excise Authority in which it has been held that Unit-3 was not a separate and independent undertaking. Mr. Dave, invited our attention to the Insecticides Act, 1968 and copy of the said Act was placed on record with regad to the Rule 9, Form-III, Form-IV, Rule 9(3), Form-V, FVI-D, rule 10(4A)) and various sections of the Insecticides Act, 1968 alongwith various pages of the License in assessee's paper book No.3. 9.1 Mr. Girish Dave, the ld. counsel for the Revenue argued that out of the said provisions contained in the Insecticides Act, 1968 and on perusal of the Licence, it does not come out that one particular unit has been added and therefore, the assessee is not an eligible industrial undertaking for deduction u/s 80IB of the Act. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, it was argued and stated by Mr. Girish Dave, the ld. counsel for the Revenue that these documents considered as admitted were denied by Sh. Aditya Aggarwal. 10. Sh. C.S. Aggarwal, the Ld. counsel for the assessee, in the rejoinder argued that the A.O. has not disputed the correctness or completeness of books of account including production of record and has not rejected the books of account by invoking the provisions of section 145(3) of the Act. All the more the ld. CIT(A) has given finding at page 27 that the assessee had produced complete books of account and has not disturbed the findings of the AO in this regard. It was also submitted by Sh. C.S. Aggarwal, the Ld. counsel for the assessee with regard to affording of adequate opportunity to the assessee during assessment proceedings, the Ld. counsel has filed a 'Note' regarding claim of deduction under section 80IB in response to questionnaire dated 09.06.2007. A complete reply dated 05.11.2007 has been submitted by the assessee. Till this date i.e. 05.11.2007, the AO was satisfied and there was only one query with regard to section 80IB(11A) of the Act on 12.12.2007. It was for the first time, a query was raised th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken during the course of survey, which has not evidentiary value, the ld. counsel for the Revenue has not disputed the contentions and arguments raised by the ld. counsel for the assessee and once deduction is allowed in the initial assessment year, it will not be denied in the succeeding assessment years. An opportunity was not provided to the assessee for cross examination of the CA, Sh. K.S. Aggarwal and such statement cannot be relied upon. The case relied upon in the case of UOP LLC v. Addl. Director of Income Tax ( supra ) is misconceived, which was rendered in the context of Rule 29 of ITAT Rules, 1963. He further argued that decision of ITAT Delhi Bench in the case of Mitsui Co. Ltd. ( supra ) is rather applicable in the present facts and circumstances of the case. 11. We have heard the rival contentions and perused the facts of the case. The assessee is engaged in the business of manufacture and sale of Pesticides and Agro Products etc. at Lane-4, Phase-II, SIDCO Industrial Complex, Bari Brahamana, Jammu. As regards deduction under section 80-IB in respect of Unit-1 claimed by the assessee, the same was eligible for ten years ending in the assessment year 2004-05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee includes any profits and gains derived from any industrial undertaking in Jammu Kashmir, the assessee shall be eligible to derive profits from such industrial undertaking subject to that (i) it is not formed by splitting up or the reconstruction of a business already in existence, (ii) it is not formed by the transfer of a news business of machinery or plant previously used for any purpose, (iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India, and (iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power. 11.1 After reading statutory provisions as contained in section 80IB(1), 80IB(2) 80IB(4) of the Act, we find that provisions do not provide in any way separate registration or maintenance of separate records for claiming deduction u/s 80IB of the Act. The requirement under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any way render such an undertaking any the less a new undertaking for the purpose of determining its eligibility under section 80J of the Act. 11.3 It was also held in the case of CIT v. Mahan Foods Ltd. 216 CTR 148 (Del) that only capacity was increased in that case and there was expansion of old business with some modifications. In this regard, it was held that as far reconstruction of the business, it is nowhere evident that the old industrial unit was split up or damaged or destroyed that was supposedly reconstructed as a new unit by the assessee. What the assessee has done is to set up an industrial undertaking with latest technology and with increased capacity and of course, with fairly good amount of fresh investment. The formation of the new undertaking is not as a consequence of the transfer of the plant and machinery of the old business. The value of the plant and machinery utilized in the new undertaking has been less than 20% of the total investment. Thus, the assessee's case does not get disqualified under these provisions. Therefore, in this view of the matter, the conclusion is inevitable that the assessee was entitled to deduction under section 80IA in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking is not a bar for claim of deduction u/s 80IB of the Act. The same product or same location, common procurement, manufacturing and common employees cannot be the basis to hold that the assessee was not an industrial undertaking viable and separate undertaking. What is important is that there must be a set up of independent and separate viable undertaking. In this regard, the assessee has placed on record that it has made separate investment in the plant machinery account and the building which is evident from the separate financial statements placed on record by the assessee alongwith return of income. The investment in the Plant machinery and building at the beginning of the year in dispute and at the close of the year in Unit-2 Unit-3 are available in PB-1 filed by the assessee. From the perusal of the same, it is evident that the assessee has made fresh investments both for building and plant machinery for setting up of the industrial undertakings. Such fact of the investment in both building and plant machinery has not been disputed by any of the authorities below or before us. There is no dispute as regards to the separate registration granted by DIC to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In this regard, we are of the view that inspite of such reply, the fact doest not in any manner detract from the claim that independent undertaking was not set up by the assessee, since neither the AO nor the ld. counsel for the Revenue has brought on record that as per Central Excise Act, separate registration is required, if the assessee is manufacturing a different products at the same place, when they have different undertaking. In the case of J K Synthetic Limited; reported in (1991) 52 E.L.T. 116 (Trib) relied upon by the Ld. AR (supra), it was held that if two units falls within one premises then only one consolidated license for the manufacture of goods has to be obtained as the object behind the grant of consolidated license is that any person manufacturing different excisable goods within one factory area is entitled to obtain one license instead of different licenses for different commodities. The Ld. counsel for the Revenue, Mr. Girish Dave, has referred to the adjudication order of Central Excise, dated 09.03.2004, where as per that order appellant was to refund excise duty under Notification No.56 of 2002 of Central Excise Act. This notification does not in any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r different provisions of different Acts can be a pre-condition to allow deduction u/s 80IB of the Act, especially when the assessee had fulfilled all the requirements of section 80IB of the Act. We are convinced with the arguments made by the ld. counsel for the assessee, Mr. C.S. Aggarwal, Advocate that section 80IB(3) of the Act read with Explanation (g) to section 80IB(14) of the Act, which specifically provides for fulfillment of condition u/s 11B of Industries (Development and Regulation) Act, 1951. Under section 80IB(3) read with Explanation (g) to section 80IB(14), if read show that deduction can only be claimed if the assessee is a small scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951. Thus, under section 80IB(3) of the Act, there is specific pre condition whereas there is no such pre-condition in section 80IB(4) of the Act, if read with section 80IB(2) of the Act. In view of our findings hereinabove, we find that there is no requirement for the assessee to obtain separate registration for each of the three industrial undertakings, having established new industrial undertaking by way of fresh investment of building an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the co-ordinate Bench in the case of Mitsui Co. Ltd. v. ACIT, New Delhi ( supra ) placed on record wherein it has been held that such evidence as collected the post completion of assessment by the AO, could be considered in the appellate proceedings in the absence of requisite order under section 250(4) of the Act by the Ld. CIT(A). 13.3 As regards reliance in the case of UOP LLC v. Additional Director of Income Tax 108 ITD 196 (ITAT, Delhi) ( supra ) by the Ld. counsel for the Revenue, we find that in the said order, the Revenue as respondent moved an application under Rule 29 of the I.T.A.T. Rules, for admission of additional evidence. It was held that the Tribunal has the power to allow additional evidence, not only if it requires such evidence to enable it to pronounce judgment, but also for any other substantial cause. The said decision is not applicable as the same had been rendered in the context of Rule 29 of the ITAT Rules and there is no corresponding Rule before the AO to move any additional evidence before the ld. CIT(A). On going through Rule 46A of the I.T. Rules, 1962, it is evident that it grants right only to the assessee to furnish additional e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Khader Khan Son [2008] 300 ITR 157 (Mad). Therefore, we are of the view that statement recorded during survey u/s 133A of the Act, cannot be used against the assessee, as the same did not have any evidentiary value. Reliance placed by the Ld. CIT(A) on such statements denying claim under section 80IB of the Act, cannot be approved. 13.5 As regards the statements recorded of employees, though they did not have any evidentiary value, we consider the statements recorded of various employees of the assessee company and Auditors' of the Company. On perusal of the same, they do not warrant any inference that Unit-2 Unit-3 were not set up as an industrial undertaking. Rather in the statement of Sh. M.C. Sharma, General Manager, who in his statement and answer to question Nos. 6, 7 8 has referred to Unit-II Unit-III. From the perusal of the above statement, we are of the view that the assessee had set up three separate and independent Units. 13.6 As regards common records being maintained by such units, we are of the view that there is no requirement of separate books of account and it is not the condition precedent for claim of deduction u/s 80IB as has been held in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A(5) of the Act and in view of the decision of the Hon'ble Delhi High Court, in the case of Commissioner of Income Tax-III v. Sona Koyo Steering Systems Limited in ITA 1279/2008, dated 10.02.2010 ( supra ). In the said decision, it was held that deduction u/s 80IB is to be allowed without set off of loss from other unit. It was held that while computing the quantum of deduction under section 80IA(6) of the Act, only the profits shall be taken into account as if it was the only source of income. We find no dispute to the above proposition but this judicial pronouncement does not lead to an inference that separate record of each of the industrial undertakings are required to be maintained by the assessee company. 13.8 As regards the books of account were produced before this Bench and also which has not been disputed by any of the authorities below. The assessee has maintained separate production records on the basis of which separate books of account have been maintained by the assessee and profit loss account has been drawn for each of the unit separately on the basis of which the assessee had determined its profit from each of the industrial undertaking. The AO has not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of recording the statement and it is obvious that the signatures below statement would not have been correctly recorded by him to make distinction and thus cannot be made the basis. The assessee's hand-writing expert compared his signatures with those signatures which were on record in respect of other companies where he too had audited the accounts. The Ld. CIT(A) has failed to examine this aspect of the matter. Also no proceedings under section 271B of the Act were initiated by the A.O. Had the accounts were not audited by the Auditors', the AO would have initiated proceedings for having not got the accounts audited as per law. The President of the Company Mr. Navin Prothi and Mr. Neeraj Karwall Counsel, in his statement had confirmed on the day of survey that M/s. K.S. Aggarwal Co., CAs are the statutory auditors' of the company. This fact has been ignored by the Ld. CIT(A). 13.12 As regard the reliance placed by the Ld. counsel for the Revenue on the judgment of the Hon'ble Supreme Court in the case of State of Gujarat v. Saurashtra Cement and Chemical Industries Ltd., [2003] 260 ITR 181, in that case the respondent assessee has sought exemption from the levy of elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings hereinabove, denial of deduction under section 80IB of the Act amounting to Rs.7,01,56,903/- is deleted. Thus, ground Nos. 1 to 4 and 7 7.1 of the assessee are allowed. 15. As regards ground Nos. 5 5.1 relating to the disallowance of claim under section 80IB of the Act, amounting to Rs.3,10,11,113/- in respect of the refund of excise duty , the A.O. has observed that the assessee is not eligible for refund of excise duty being income 'not derived from the industrial undertaking' but the income attributable to the receipt of excise duty refund from the industrial undertaking. 15.1 On appeal, the learned CIT(A) confirmed the action of the Assessing Officer. 15.2 It was argued by the ld. counsel for the assessee, Mr. C.S. Aggarwal, Advocate that the issue in dispute is squarely covered by the decision of the Hon'ble Jurisdictional High Court of Jammu Kashmir, in the case of Shree Balaji Allows v. CIT and Another [2011] 333 ITR 335 (J K) where it has been held that the Excise Duty Refund is to be treated as 'capital receipt' and not liable to be taxed. 15.3 The Ld. counsel for the Revenue, Mr. Girish Dave did not dispute the arguments made by the ld. co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not acceptable. Whereas the AO has given a detailed and valid reasoning for making the disallowance. As per the provisions of law, S.80IB(11A), deduction is available to an industrial undertakings deriving profit from the business of setting up and operating a cold chain facility for agricultural produce. Apparently, the appellant's unit has not derived its income from the activity stipulated in the section. As per the provisions of section 80IB (IIA), the undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables is eligible for deduction subject to conditions mentioned therein. The eligible undertaking is required to be involved in all the above three activities i.e. processing, preservation and packaging of fruits. In case even one activity out of the above three is not carried out by the undertaking, it would not be eligible for deduction u/s 80IB(11A) of the Act. Apparently, the appellant company is not involved in the processing of fruits. Besides, no change is brought about in the fruits which are kept in CA stores. Hence, it can not be said that the appellant is involved in the processing of fruits. In this respect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays, the fruits loose its longevity. 17.4 The Ld. counsel for the Revenue, Sh. Girish Dave, on the other hand, placed material on record to demonstrate technical aspects of the CS Stores especially publication by one Mr. Adel A Kader Department of Pomology, University of Callifornia. The Ld. counsel for the Revenue argued that it would be appropriate to examine the technology being maintained by the assessee to understand in detail whether CS stores can come within the ambit of an industrial undertaking deriving profit from the business of processing of vegetables as per section 80IB(11A) of the Act. 18. We have heard the rival contentions and perused the facts of the case. From the facts on record, we observed that the assessee is engaged in the preservation and packaging but there is not processing of fruits. Since there is no change brought about in the fruits and we observed that none of the authorities below have appreciated the matter in right perspective in view of the technical material placed by the Ld. counsel for the Revenue. Therefore, in the facts and circumstances , we set aside the issue to the file of the AO for re-adjudication with specific reference by kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/- . In view of the fact and circumstances of the case, mentioned hereinabove, action of the Ld. CIT(A) is confirmed with regard to expenditure of Rs.2,00,209/-. As regards the remaining expenditure, the assessee is engaged in the business of export and import of apples juice. The assessee being 100% EOU and these facts have not been considered by any of the authorities below and having regard to the volume and genuineness of expenditure not in dispute, we are of the view to allow 35% of the remaining expenses amounting to Rs.6,87,837/-. The AO is directed accordingly to allow the said expenditure. Thus, ground Nos. 8 8.1 are partly allowed. 21. As regards ground No.9 of the assessee with regard to disallowance of Rs.11,43,293/- for claim of depreciation on CS stores and Tetra Division, the facts are that the expenditure amounting to Rs.42,63,926/- on account of material for mezzanine floors was included by the assessee in the plant and machinery scrap and depreciation has been claimed as per rates prescribed for the plant and machinery in the Income Tax Rules, 1962. Similarly expenses of Tetra Division of M/s Kohinoor International Agro Products amounting to Rs.1,09,79,99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions and perused the facts of the case. In view of Notification No.275/12/2007 dated 26.04.2007, which was perused by us and in view of the same notification which provides waiver of interest u/s 234B upto the assessment year 2007-08in respect of the assessee residing in Kashmir and having their principal place of business in the Kashmir Valley. Accordingly, levy of interest under section 234B of the Act is in conformity with the instruction issued by CBDT which is binding in nature. Such interest u/s 234B of the Act in the present case cannot be levied. Therefore, order of the ld. CIT(A) is reversed on this issue and the AO is directed to delete the same. Thus, ground No.11 of the assessee is allowed. 25. As regards the additional ground, the claim of the assessee is loss of 100% EOU of other industrial undertaking. The claim of the assessee is supported by the decision of the Hon'ble Bombay High Court in the case of CIT v. Galaxy Surfactants Ltd. reported in [2012] 69 DTR (Bom) 42, wherein it has been held that unabsorbed depreciation can be carried forward to subsequent year does not militate against the entitlement of the assessee to set off a loss which is susta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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