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2017 (8) TMI 608

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..... ame could not be uploaded. In view of the above there has been a reasonable cause for non e-filing of the reports and in view of the fact that the manual reports were filed in time, in view thereof the deduction is allowable. - Decided in favour of assessee. - ITA No. 504/JP/2017 - - - Dated:- 11-8-2017 - SHRI KUL BHARAT, JM AND SHRI VIKRAM SINGH YADAV, AM For The Revenue : Shri R.A. Verma (Addl.CIT) For The Assessee : Shri P.C.Parwal (CA) ORDER PER SHRI KUL BHARAT, JM. The Appeal by the Revenue is directed against the order of Ld. Commissioner of Income Tax (Appeals)-2, Jaipur, dated 24.03.2017 pertaining to Assessment Year 2013-14. The Revenue has raised the following ground of appeal :- 1. Whether on the facts and circumstances of the case and law, the Ld. CIT(A) was justified in restricting the trading addition of ₹ 5,00,000/- made by the AO to ₹ 1,00,000/-. 2. Whether on the facts and circumstances of the ase and in law, the Ld. CIT(A) was justified in allowing the deduction u/s 80IA amounting to ₹ 1,62,25,183/-. 3. The appellant craves its rights to add, amend or alter any of the grounds on or before the .....

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..... led to get it verified from the books. Even the consumption of raw material item wise was not furnished by the assessee. 3.4 Considering the above discussions and shortcomings found in the books of accounts of the assessee, I invoke provisions of section 145(3) and make a lump sum trading addition of ₹ 5 lacs to the total income of the assessee. 4.4 We have given our thoughtful consideration to the rival contentions; there is no dispute with regard to the gross profit. It is also not undisputed that the assessee is maintaining books of accounts. Moreover, the Assessing Officer has not given any basis for making addition as to how this figure of ₹ 5 lacs as arrived at would be sufficient for estimating the profit. In the absence of such finding, we do not see any reason to interfere into the finding of the Ld. CIT(A), same is hereby affirmed. This ground is rejected. 5. Ground no. 2 , is against deleting the disallowance of deduction claimed u/s 80IA of the Act. 5.1 Ld. Departmental Representatives supported the order of the Assessing Officer and submitted that it is observed by the Assessing Officer that even if we consider a single unit as a separat .....

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..... nitial assessment year in sec.80-IA(5) would only mean year of claim of deduction u/s 80-IA and not year of commencement of eligible business. Assessee had option to choose first/initial assessment year of claim for deduction u/s 80-IA and assessee would be entitled to deduction u/s 80-IA without setting off losses/unabsorbed depreciation pertaining to windmill, which were set off in earlier year against other business income of assessee. 2. It may be further pointed out that the issue of initial assessment year is also clarified by CBDT Circular No.1/2016 dated 15th February 2016. As per this circular, assessee has an option to choose initial/first year from which he may desire to claim deduction for 10 consecutive assessment years out of fifteen. 3. So far as filing of audit report in form no. 10CCB is concerned, there is no dispute as to the fact that assessee has filed the same manually on 30/09/2013. The assessee has also filed one audit report in form 10CCB electronically on 30/09/2013. However, there was no option to file more than one report online and therefore, assessee could not file the remaining reports electronically. The Ld. CIT(A) has therefore, rightl .....

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..... is applied, the approach of the revenue in this case has to be held as correct. But there is no justification for applying the rule of strict construction or for considering the provisions of section 12A in isolation. Having regard to the other provisions of the Act regarding filing of the return or revised return or rectifying the defects in the return, the provisions of section 12A are directory in the sense that the AO is not powerless to allow an assessee to file the audit report, if not filed along with the return, any time before the completion of the assessment. One has to look at the purpose of the provisions. One has to construe the provision to ensure coherence and consistency to avoid undesirable consequences. Where the audit report was made ready after the return was filed, there was no reason why such audit report should not be allowed to be filed before the completion of the assessment. No case has been made out that the delay in getting the accounts audited and in filing of the report in Form No. 10B defeated any object of the Act or the assessee s action was in substance not in conformity with the intent and purpose of the Act. The IT authorities fell into err .....

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..... art of production year wise (at page 4 in his order) concluded that even if each single units is considered as a separate business, the unit has not earned profit since installation if all the direct and indirect expenses, depreciation for current year, unabsorbed business loss of earlier year and unabsorbed depreciation of earlier years, is considered. Further the Assessing Officer noticed that the assessee had not e-filed the audit report under section 10CCB and hence the deduction could not be granted. In the present proceedings, the Authorized Representative placed reliance on the subsection (5) of 80IA which reads as under: Notwithstanding anything contained in any other provision of this Act, the profit and gains of an eligible business to which the provisions of sub section (1) apply shall, for the purpose of determining the quantum of deduction under that sub section or the assessment year immediately succeeding the initial assessment year or any subsequent year be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto an .....

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..... haswamy Spinning Mills (P) Ltd. vs. ACIT, (2012) 21 taxmann.com 95 (Madras), this issue has been elaborately discussed and decided as follows: When the assessee exercises the option, the only losses of the years beginning from initial assessment year alone are to be brought forward and not the losses of earlier years which were already set off against the income of the assessee. Looking forward to a period of ten years from the initial assessment is contemplated. It does not allow the revenue to look backward and find out if there is any loss of earlier years and bring forward nationally even though the same were set off against other income of the assessee and the set off against the current income of the eligible business. Once the set off is taken place in earlier year against the other income of the assessee, the revenue cannot rework the set off amount and bring it nationally. Fiction created in sub-section does not contemplates to being set off amount nationally. Fiction is created only for the limited purpose and the same cannot be extended beyond the purpose for which it is created. Thus, loss in the year earlier to initial assessment year already absorbed .....

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..... duly satisfied. Pending litigation on allow ability of deduction u/s 80IA shall also not be pursued to the extent it relates to interpreting 'initial assessment year' as mentioned in sub-section (5) of that section for which the Standing Counsels/Dr. R. S. be suitably instructed. Thus the assessee has the option of choosing the 'initial year' and the same can be different from the first year of production. However, once an initial year is opted for the deduction is available for 10 consecutive assessment years. In view of the case laws above, the brought forward losses and depreciation earlier adjusted cannot be again notionally brought forward for adjustment. In view of the above, the deduction is allowable to the assessee. Now coming to the issue of e-filing of the audit report the assessee stated that efforts were made on 29.09.2013 to file the reports in form No. 10CCB electronically, however, the same could not be uploaded. In support of the electronic filing a copy of the snap shot of e-filing was submitted which shows that the assessee has registered on e-filing portal for online filing. It was further stated that due to technical problem the sa .....

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