TMI Blog2022 (9) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... tallation of plant and machinery during the year under consideration , such as report(s) submitted to Directorate of Industries (DIC), or report submitted under MSME Act, report to Service tax department, report to Excise department etc. indicating installation of plant and machinery , trial runs and commencement of production, reports from machinery suppliers , electricity departments etc. could have been brought on record, to justify/substantiate its stand. Similarly, for employment of twenty or more worker in manufacturing process, reports/returns submitted under ESI/PF, TDS, or to any other government agencies specifying number/name etc of worker employed ,or payment of wages by bank etc. could have been procured as secondary evidence to justify employability of twenty or more workers in manufacturing process. Despite three round of litigation , the assessee is not able to justify/substantiate the meeting of conditions for claiming deduction u/s 80IA - Thus, presumption has to be drawn against the assessee, and we hold that the assessee is not entitled/eligible for deduction u/s 80IA of the 1961 Act as it has failed to meet the conditions cumulatively as are stipulated u/s 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. The AO in the second round of litigation denied the deduction u/s. 80IA to the assessee, vide assessment order dated 12.12.2011 passed u/s. 254/143(3) of the 1961 Act , on the grounds that during set aside proceedings, the assessee could neither produce relevant books of accounts, bills and vouchers etc. nor the assesse could establish the fulfillment of mandatory four conditions cumulatively which are essential for claiming deduction u/s. 80IA of the Act. The matter again went to the tribunal in the second round of litigation , and the Allahabad-tribunal vide appellate order dated 10.3.2016 in ITA No. 98/Alld/2013 again set aside the matter to the file of the AO with following observation: In our view, It s incumbent on the Assessing Officer to examine the claim of the assessee whether the assessee is eligible for deduction u/s.80IA, whether the assessee has complied with all the conditions as stipulated u/s 80I/80IA. In view of this fact, in our opinion, the onus is on the assessee to adduce the evidence and material which may prove that the assessee complied with all the conditions as stipulated u/s.80IA. 3.2 As directed by tribunal, again notices we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more workers in a manufacturing process , along with other conditions mentioned in sub section (2). Details of employees have not been submitted by the appellant either before the AO or during the course of appellate proceedings. It has merely been submitted that total salary paid to all employees is 21,91,928/-. This amount also includes staff welfare. Further the condition prescribed under clause(iv) of Section 80IA clearly mentions that 20 or more workers are employed in a manufacturing process. Admittedly, the salary has been paid to workers in a manufacturing process as well as the Office. Further there is no evidence that salary or Rs.less than 1 lac is paid to the employees by the assessee during the year under consideration. If salary of Rs.less than 1 lac is paid, only then the number of employees will be excess of 20 making the unit eligible for deduction. However, it has been discussed above that the deduction is admissible only if 20 or more employees are employed in manufacturing process but in the present case, it is not clear how many employees are employed in the factory and office separately. Further the evidence in the form of bills and vouchers of installation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is no evidence available to prove that twenty or more than twenty workers were employed in a manufacturing process, to satisfy condition u/s 80IA(2) of the 1961 Act. It was also submitted that there were DRT proceedings against the company and OTS were entered into by assessee with the bankers to settle their dues ,as there was default in payment of loans availed by assessee from the banks. 5.2 The ld. Ld. Sr. DR, on the other hand , submitted that Fire took place on 28.3.2002 , while the assessment order was framed in the first round of litigation, much earlier on 20.3.2001. The assessee could not produce the detail before the AO as to compliance of mandatory conditions as are stipulated u/s 80IA(2), and hence deduction u/s.80IA was not allowed by the authorities below . It was submitted that tribunal restored the matter back to the file of AO and even in the second round of litigation, the assessee could not produce any details or evidencesto justify/substantiate that mandatory conditions as are stipulated u/s 80IA(2) were met, It was submitted that onusison the assessee to discharge as to the compliances of the conditions prescribed u/s80IA. 6. We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation, requiring assessee to produce all books of accounts and evidences /material which may justifiably prove the claim of deduction u/s 80IA of the 1961 Act. The AO also ask assessee to furnish explanation on the issue of fulfillment of essential mandatory conditions as are stipulated u/s 80IA(2) of the 1961 Act , in order to consider allowability of claim of deduction u/s 80IA of the 1961 Act. The assessee did not produce any books of account and another relevant material evidences to justify its claim of deduction u/s.80IA of the 1961 Act . The claim set up by assessee for deduction u/s 80IA of the 1961 Act was rejected by the AO , vide assessment order dated 1.12.2017 passed u/s.254/143(3) of the Act, on the grounds that despite giving ample opportunities to the assessee by the AO , the assessee does not have any documentary evidences to either support its contentions or to establish the fulfillment of essential mandatory conditions as stipulated u/s 80IA(2) of the 1961 Act, for allowing the claim of deduction u/s 80IA of the 1961 Act. The assessee being aggrieved by an assessment order dated 01.12.2017 passed by the AO u/s 254 read with Section 143(3) of the 1961 Act, filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition prescribed for allowability of deduction u/s.80IA of the IT Act has not been satisfactorily explained. As directed by the Hon ble Tribunal, the onus was on the assessee to adduce the evidence and material which may prove that assessee complied with all the conditions as stipulated u/s 80IA of the IT Act. The appellant has not been able to adduce the evidence and material in this regard either during the course of assessment proceedings or the appellate proceedings. 9. In view of these facts, I am of the opinion that the AO was correct in rejecting the claim of the assessee about deduction u/s 80IA. Accordingly, the order passed by the AO is sustained and the appeal is dismissed. Thus, it could be seen that ld. CIT(A) denied the benefit of deduction u/s 80IA to the assessee, as the assessee could not produce evidences to justify that it met the statutory conditions as are stipulated u/s 80IA(2) of the 1961 Act before claim of deduction u/s 80IA of the 1961 Act could be allowed to the assessee, firstly that the assessee could not produce evidence to substantiate that it has employed twenty or more worker in the manufacturing process , while secondly , the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions in taxing statute are to be strictly construed and any ambiguity in the provision is to be held in favour of Revenue. Section 80IA of the 1961 Act is also a exemption/deduction provision which allow deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, and hence is to be strictly construed wherein the taxpayer has to cumulatively satisfy all the stipulated conditions .Section 80IA(2) provides conditions to be fulfilled by newly set up industrial undertaking, inter-alia, such as it should not be formed by splitting up or reconstruction , of a business already in existence ; that it is not formed by the transfer to a new business of machinery or plant previously used for any purposes; that 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; then there are conditions as to the period when the newly set up industrial undertaking shall begins to manufacture or produce articles or things or to operate such plant or plants; that in case the industrial undert ..... 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