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TMI Blog2013 (11) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ew industrial undertaking in itself and hence eligible for deduction u/s 10B. (c) The CIT(A) erred in not appreciating the fact that two (2) new industrial undertakings have been formed in the year 2001-02 and 2004-05, which are distinct from the existing unit and are capable of being operated independently and accordingly as per section 10B the benefit has to be separately extended to each separate undertaking. (d) That the CIT(A) erred in concluding that there was no brought forward loss on its records. In fact, the brought forward losses would have been available had the deductions u/s 10B of the Act been allowed first before setting off the brought forward losses and unabsorbed depreciation for the AY 2001-02 to 2003-04. (e) That on facts of the case, interest u/s 234B, 234C and 234D is not leviable, as much as the benefit of section 10B was denied only after passage of the Commissioner's order u/s 263, by which time the appellant has filed its return for the AY 2007-08. (f) That the CIT(A) should have allowed depreciation claim of the appellant particularly in view of the fact that proper books of accounts as prescribed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction under Section 10B of the Act from the year in which it receives the EOU status approval. Given the fact that the said CBDT circular recognize the conversion, it should be possible to claim and Income Tax exemption post conversion. However, given the provisions of the Act under circular any unit which has been set up before April 1 1999 would not be eligible for the same tax deduction, irrespective of when the conversion happens. Hence it is very clear that the intention of the circular is to reckon the ten years exemption period which starts from the year of commercial production irrespective of when the conversion happens. When there is an ambiguity in the incentive provision, it should be liberally construed but at the same time when there is no ambiguity there is no question of liberal construction. Since the aforesaid circular is very clear and ambiguity, it is to be followed plainly. We also disagree with the arguments of learned counsel for the assessee that the aforesaid circular is not speaking one and does not contain any reason whatsoever and the same is not binding on the assessee. It is pertinent to note that all the circulars issued by the CBDT are bindin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intension of legislation clearly states that the benefit is admissible only to a new undertaking and not for the expansion. Hence, even on this ground, the assessee fails. After considering the totality of facts and circumstances of the case, inour considered opinion, the assessing officer allowed the deduction under section 10B of the Act wrongly and hence, the CIT rightly assumed his jurisdictions under section 263 of the Act in denying the deduction under section 10B of the Act. Accordingly, we confirm the order of the CIT." 7. On perusal of the aforesaid extracted paras from the order passed by the coordinate bench, it becomes clear that not only the ITAT has held that 10 year period of deduction u/s 10B should commence from AY 1996-97 during which the assessee started its production/manufacture, the tribunal also categorically held that extension of existing unit cannot be treated as a new unit. The aforesaid decision of the coordinate bench being binding on us, we respectfully follow the same and hold that the assessee is not entitled to deduction u/s 10B of the Act. The order of the CIT(A) is accordingly upheld and grounds raised on this issue are dismissed. 8. In Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l High Court in case of the assessee (supra), we find that the Hon'ble High Court has held that deduction u/s 10B should be allowed first from the income and thereafter from the remaining income set off of brought forward loss and unabsorbed depreciation should be allowed. It is also a fact that the assessee's appeal registered as ITA No. 504 of 2011 against the order of ITAT in assessee's own case for AY 2006-07 is still pending before the Jurisdictional High Court on the issue of brought forward loss as well as with regard to number of years of deduction u/s 10B that the assessee is entitled. In such view of the matter, considering the fact that the issue is pending before the Hon'ble High Court we remit the matter relating to this issue to the file of the AO for quantification after disposal of the appeal by the High Court and in terms with the judgment of the Hon'ble High Court on this issue. This ground is allowed for statistical purposes. 13. Ground No. 21(e) relates to charging of interest u/s 234B, 234C and 234D of the Act. We have considered the submissions of the parties and perused the material on record. Levy of interest u/s 234B, 234C and 234D of the Act being mandato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls and vouchers relating to the additions made to fixed assets and given an opportunity the same could be produced before the AO. 17. The learned DR, on the other hand, submitted that the assessee has failed to produce the necessary bills and vouchers before the AO as well as the CIT(A), hence, disallowance of depreciation claimed was justified. 18. We have considered the submissions of the parties and perused the material on record as well as the orders of the lower authorities on this issue. It has been contended by the learned AR that the assessee had produced all the bills and vouchers with regard to the additions made to the fixed assets and purchases were genuine. Only because of some compelling circumstances, it could not be produced but all the bills and vouchers are available and the assessee can produce them before the AO for verification. Considering such submission of the learned AR, we are inclined to allow one more opportunity to the assessee to produce necessary bills and vouchers or any other evidence in support of its claim of addition in fixed assets and accordingly remit the matter back to the file of the AO. If the assessee is able to substantiate its claim b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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