9911796707
TMI Blog2016 (4) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 143(3) on 21.4.2006 was erroneous in so far as it was prejudicial to the interest of the revenue? (ii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in observing that the order of CIT does not contain any firm decision as to how the debit of administrative expenses amounting to Rs. 9,77,010/- in the P&L account of Unit I has rendered the assessment as erroneous and prejudicial to the interest of revenue, whereas a firm decision and reasoning on this issue was given in the order passed under section 263 of the IT Act, 1961? (iii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in not appreciating the fact that the assessee is not eligible for deduction under section 80IB on fabrication charges of Rs. 62,28,012/- as these fabrication receipts had no nexus with the business of the industrial undertaking? (iv) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in observing that the assessment was framed with due application of mind whereas the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, provisions of section 263 of the Act were invoked in this case. Vide order dated 24.3.2009, Annexure A.2, under section 263 of the Act, the CIT held the assessment framed by the Assessing Officer to be erroneous and prejudicial to the interest of the revenue on both the issues and directed the Assessing Officer to re-compute deduction under Section 80IB of the Act. Aggrieved by the order, the assessee filed appeal before the Tribunal. Vide order dated 22.9.2009, Annexure A.3, the Tribunal allowed the appeal holding that the CIT erred in invoking the provisions of section 263 of the Act on both the issues. Hence the instant appeal by the revenue. 4. We have heard learned counsel for the parties. 5. Learned counsel for the appellant-revenue submitted that the administrative expenses amounting to Rs. 9,77,010/- were in respect of Unit No.2 also and could not have been taken to be in respect of Unit No.1 alone. On the aforesaid premises, it was urged that the Tribunal was in error in setting aside the order of revision passed under section 263 of the Act. The claim of the assessee under Section 80IB of the Act on Rs. 62,28,012/- on account of job work charges was also d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9,77,010/- are concerned. In this regard, we may notice the reply furnished by the assessee to the Commissioner, a copy of which has been placed in the paper book. The assessee contended that whatever expenses were relatable to the activities of Unit II, the same have been debited to the profit and loss account of the said unit and it was further submitted that the expenses amounting to Rs. 9,77,010/- "are directly relatable to the activities of Unit I". In the context of such a categorical assertion by the assessee, we find that there is no finding recorded by the Commissioner as to how the debit of administrative expenses of Rs. 9,77,010/- made in the Profit and Loss Account of Unit 1 resulted in excess profit in Unit II in as much as there is no finding of the Commissioner that any of such expenses was relatable to Unit II. The Commissioner has discussed this aspect in para 3.2 of the impugned order and the only observation made is that such expenses are "over all expenses" on account of the business of the company as a whole. The Commissioner had the entire records before him and also the assertion of the assessee that none of the expenses comprised in Rs. 9,77,010/- was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Act to be legally unsustainable with regard to deduction allowed by the Assessing Officer under Section 80IB of the Act of fabrication charges of Rs. 62,28,012/- with the following observations:- "11. In so far as the issue relating to the claim of deduction under section 80IB of fabrication charges of Rs. 62,28,012/- is concerned, herein also, we find the order of the Commissioner unsustainable. Quite clearly, the only point made by Commissioner is that the fabrication charges do not constitute income derived from the industrial undertaking. On this point also, we may again appraise the explanation furnished by the assessee before the Commissioner. Firstly, the assessee submitted that it has set up the industrial undertaking for the manufacture of cloth during the assessment year 1999-2000 and has been claiming deduction under section 80IB since then. The assessee further contended that since the very beginning it is doing job work and has been in receipt of fabrication charges, has been claiming deduction under section 80IB on such income. It was also submitted that such claim has been allowed even in the earlier years and that too in an assessment framed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of allowability of deduction under section 80IB on fabrication charges, the Commissioner erred in invoking the provisions of section 263 of the Act." Learned counsel for the appellant-revenue has not been able to show any error in the findings recorded by the Tribunal. 10. Further, a Division Bench of this Court (to which one of us - Ajay Kumar Mittal,J., was a member) in ITA No.324 of 2013 (Commissioner of Income Tax I, Ludhiana vs. M/s Saimbhi Cycles & Auto Industries, Focal Point, Ludhiana) decided on 28.4.2014 relying upon the judgment of this Court in Impel Forge and Allied Industries Limited's case (supra) recorded as under:- "9. In so far as second issue is concerned, the matter stands concluded by judgment of this Court in CIT vs. Impel Forge and Allied Industries Limited, (2010) 326 ITR 27 wherein while discussing identical issue, it was noticed as under:- "5. Reference to section 80IB of the Act shows that only requirement for its applicability is deriving of income from business referred to in sub sections (3) to (11), (11A) and (11B) of the Act, apart from other conditions with which we are not concerned. It is not the case of the revenue that the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
