TMI Blog2016 (7) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER SHRI KUL BHARAT, JUDICIAL MEMBER:- This appeal by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-XIV, Ahmedabad, dated 25.10.2011 pertaining to Assessment Year 2008-09. 2. The Revenue has raised following grounds of appeal:- 1. The Ld. Commissioner of Income-tax (A) has erred in law and on facts in deleting the disallowance of the claim of deduction of ₹ 3,89,93,876/- under the provisions of section 80IC of the I.T. Act. 2. The Ld. Commissioner of Income-tax(A) has erred in law and on facts in admitting additional evidences in course of the appellate proceedings in violation of Rule-46A of the I.T. Rules. 3. On the facts and circumstances of the case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot meet the requirements of law for claiming the deduction u/s 80IC of the Act. Ld. DR further submitted that from the modus operandi of closing the business operation of partner-company and formation of business in the newly constituted business in the name and style of assessee-firm is nothing but the shifting of the existing business to the area specified eligible for deduction u/s 80IC of the Act. 3.2 On the contrary, ld. Counsel for the assessee Shri M. K. Patel opposed the submissions of the ld. DR and supported the order of the ld. CIT(A). Ld. Counsel for the assessee submitted that the finding of the Assessing Officer is factually incorrect and, as such, the deduction has been disallowed by the Assessing Officer purely on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the gross profit of ₹ 4,91,67,597/- and net profit of ₹ 3,89,93,876/- on total sale made on ₹ 9,88,55,292/-. Therefore, the Assessing Officer was of the view that the closing of existing business of the partner company on one hand and constitution of new firm on the same line of business with the similar products on the other hand is nothing but the transfer of existing business to new business. 4.1 The Assessing Officer also observed that goods might have been produced at their own factory and might have been transferred to assessee-firm without making any entries in the books of account. After considering the totality of the facts and circumstances, the Assessing Officer declined the claim of deduction of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have carefully perused the assessment order and the submissions given by the appellant. The A.O. disallowed the claim of the appellant by concluding that it was manufacturing the similar product as that of the partners company, it has been constituted with the sole object of shifting the existing business of the partner company which did not claim any depreciation on the fixed assets and the appellant company did not furnish quantitative reconciliation of finished goods and raw material. The A.O. has also mentioned that in Assessment Year 2007- 08, the appellant had claimed deduction u/s. 10A for the same business, whereas In the current year, the appellant has claimed deduction u/s. 80IC. Since the claim was not made in the first year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chartered account has also clarified the bonafide error. The appellant has further submitted that in the present year also, the year of claim of deduction has been claimed as the second year and not the first year. It has also been mentioned by the appellant that the return for that year has been accepted by the department. Considering the submissions made by the appellant, various evidences submitted during the course of appeal, I am of the opinion that the appellant satisfies all the conditions for claim of deduction u/s. 80IC. The A. O. has merely disallowed the claim of the appellant on the basis of presumption. He has not given any material finding as to whether any particular machinery has been shifted to Himachal Pradesh or t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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