TaxTMI 
TaxTMI 
2011 (6) TMI 18
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....t considered by the AO?" 2. Learned counsel for the parties were ready to argue the matter, immediately after the admission. The arguments were heard on the aforesaid questions of law and orders reserved. By this judgment, we proceed to answer the aforesaid questions. 3. We would like to comment at the outset that all the three questions touch one issue, viz., validity of the order passed by the Commissioner of Income Tax (hereinafter referred to as 'the CIT') under Section 263 of the Income Tax Act (for brevity 'the Tax') whereby the CIT has asked the Assessing Officer (AO) to go into the question as to whether the assessee company had commenced its operation in the Financial Year 1994-95 and therefore, the Assessment Year 1995-96 was the first year to claim deduction under Section 80IB of the Act and on that basis, whether deduction would be admissible for the Assessment Year 2005-06. This issue has cropped up in the following factual background. 4. For the Assessment Year 2005-06, the respondent-assessee had filed return of income declaring income of Rs.5,22,73,660/-. In this year, the assessee had also claimed deduction under Section 80IB of the Act. It ....
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....oned by the CA as F.Y. 1995-96, which clearly implies A.Y. 1996-97. The sales tax and excise registration record does not indicate the commencement of production in A.Y. 1995-96. We find merit in the argument of the learned counsel for the assessee that by omission of word "F.Y." in column no.9, CIT(A) has taken a reference that the first year of eligible of deduction u/s 80-IB start from A.Y. 1995-96. In our view, the inference is misplaced and on proper verification of record. This position is amply clear. In view therefore, the impugned order of AO for A.Y. 1996-97 is neither erroneous nor prejudicial to the interest of revenue. In view therefore, we set aside 263 proceedings on these facts." 7. Against this order, the present appeal is preferred which was admitted on the substantial questions of law already extracted above. 8. Neat submission made by Mr. N.P. Sahni, learned counsel for the Revenue, was that the basis of the assumption of the jurisdiction under Section 263 of the Act by the CIT was that the AO had not applied his mind as to whether the assessee commenced the operation in the Financial Year 1994-95 or 1995-96. Therefore, the Tribunal was required ....
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.... of lack of inquiry/investigation. (ii) The respondent/assessee had produced the necessary details and records in support of its claim, but the same required verification to decide as to from which Financial Year business had started and thus, inquiry was necessary. It so stated in the following words: "Sh. Prakash Gupta, CA appeared and filed necessary details and the case was discussed. It is seen that the business Activity/Production with regard at Unit No.205 needs verification with regard to books of accounts and other relevant details to decide as to from which F.Y./A.Y. business has started with production of books of accounts and other details. Before coming to any conclusion on the allowability of the deduction u/s 80IB for assessment year 2005-06 such verification is essential. It is needless to mention that the case record would reflect that the AO has not applied his mind on the issue before allowing the claim of the assessee. This lack of inquiry/investigation has resulted in erroneous allowance of deduction is both erroneous as well as prejudicial to interest of revenue." 12. Thus, the conjoint and accumulative reading of the order in its entir....
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....make use of it even though there is no actual verification of the stock. The Tribunal has clearly found that the statement was made voluntarily. It observed that the best and independent evidence in the matter would have been that of the two witnesses to the search, who are traders in the same locality. The assessee had not obtained any statement or affidavit from them in support of the plea that the statement was obtained by coercion or intimidation. So, the assessee has totally failed to discharge the burden of proving that fact. In this case, the assessment has been made based on the statement of the assessee. Since no case has been made out that the statement was made under a mistaken belief of fact or law, and as has been held above, the statement being a voluntary one, there is no scope for the assessee to challenge the correctness of the assessment as has been done in this case. A further contention raised by the assessee was that, having rejected a portion of his statement regarding unaccounted investment in a cinema theatre, there is no justification to rely on another portion of the very same statement for the purpose of sustaining addition of unaccounted stock. The addit....