TaxTMI 
TaxTMI 
2010 (11) TMI 380
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....the facts in confirming the order passed by the Commissioner of Income-tax (Appeals) in holding that the job work receipt of the assessee (net of expenses) are eligible for deduction under section 80-IA of the Act ?" 2. The assessment year is 1998-99 and the relevant accounting period is the financial year 1997-98. The respondent-assessee, a company, who is engaged in the business of ginning and pressing of cotton etc., filed the return of income for the assessment year 1998-99 on November 27, 1998, declaring total income of Rs. 30,16,300. The return was processed under section 143(3) of the Act and was finalized vide assessment order dated March 29, 2001, determining the total income at Rs. 1,13,13,970, making the following additions/disallowances : Rs. (1) Disallowance of claim of deduction under section 80-IA 12,92,668 (2) Fresh share capital treated as undisclosed income under section 68 25,00,000 (3) Loans received by the assessee treated as undisclosed income under section 68 45,05,000 3. The assessee carried the matter in appeal before the Commissioner (Appeals) who deleted the aforesaid additions made on account of undisclosed income under section 68 of the....
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....tions. The Commissioner (Appeals) upon perusal of the copies of the material stated to be furnished before the Assessing Officer as part of the paper book, noted that Shri Laljibhai Patel, Shri Jinabhai Patel, Shri Mansukhbhai Patel and Shri Jivrajbhai Patel had made the investments from withdrawals out of loan accounts with the company as was apparent from the bank passbooks. Shri Labhubhai and Shri Arjanbhai had received payment from the company against sale of goods which had been reinvested as share capital. It was found that as regards Rs. 10 lakhs invested by the director Shri Vallabhbhai Patel, Rs. 5,60,000 thereof was by way repayment of deposits, whereas Rs.2,41,250 had been received from the assessee-company against the sale of cotton and Rs. 2,00,000 was by way of repayment of loan from one Smt. Bhanumatiben Thakordas, and that all the said transactions were by cheques. On the basis of the aforesaid findings of fact recorded by him, the Commissioner (Appeals) was of the view that the assessee had discharged its primary onus to prove that the amounts received by furnishing evidence in support thereof and accordingly, deleted the addition of Rs. 25,00,000. 6. The Tr....
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....her supported the contention of the assessee that the Assessing Officer had made the addition without appreciating and evaluating the evidence furnished and the explanation given during the course of the assessment proceedings. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals) and has found that the assessee had discharged its onus by proving the genuineness and the creditworthiness of the depositors. On behalf of the Revenue nothing has been brought on record to dislodge the concurrent findings of fact recorded by the Tribunal. On the findings of fact recorded by the Tribunal upon appreciation of the evidence on record, it is not possible to state that the view adopted by the Tribunal is in any manner unreasonable or perverse so as to give rise to a question of law. 8. In relation to proposed question No. 3, a perusal of the assessment order indicates that the Assessing Officer appears to be confused about the facts of the case. He has referred to the decisions cited on behalf of the Revenue for the proposition that the deduction under section 80-IA of the Act is admissible on income derived from an industrial ....
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....enses and was accordingly of the view that the net income was to be computed after deducting such expenses. The Commissioner (Appeals) was further of the view that the contention of the Assessing Officer that the allowance of the deduction to the assessee would result in double deduction was not supported by the facts, as the receipt was expense in the hands of the principal. The Commissioner (Appeals) was accordingly of the view that as the income was derived from the main activity of the company of ginning and pressing of cotton and manufacturing of cotton seed oil and oil cake, the same was eligible for deduction under section 80-IA of the Act. 10. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals) and has held that the job work charges were in connection with rendering services to other parties including manufacturing and processing of cotton seed oil and oil cake. Hence, these were the receipts derived from manufacturing or producing articles and things within the meaning of section 80-IA of the Act. 11. Under section 80-IA of the Act, deduction is allowed in computing taxable income in respect of profits and gai....