TaxTMI 
TaxTMI 
2015 (3) TMI 447
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....09 3,39,875/- 2.2 These appeals are filed in second round. Earlier Ld. CIT(A) has allowed the claim of the assessee against which Revenue haD filed appeals which was decided by the Tribunal in respect of A.Y 2004-05 on 18/05/2009 in ITA No. 4680/Mum/2007. Copy of this order is filed at page 28 of the paper book. The Tribunal had restored back the matter to the file of AO for verification of the claim of the assessee that entire machinery purchased was new machinery. Purchase and use of new machinery is condition precedent for grant of deduction under section 80 IB of the Act. According to Revenue such condition was not fulfilled by the assessee, therefore, assessee is not entitled to get deduction under section 80 IB of the Act. It will be relevant to reproduce the relevant portion of the order of the Tribunal vide which the matter was restored back to the file of AO. "7. We have heard both the parties and perused the relevant orders of the revenue authorities. The case of the revenue is that the assessee has failed in discharging of the onus about the fulfillment of the condition specified in clause (ii) of section 801B(2) of the Act. The case of the assessee is that no....
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....at Co-op. Bank Ltd. for an amount of Rs. 6,08,400/-. Notwithstanding the onus to be discharged by the assessee, considering the non cooperative attitude of the suppliers, the AO, who is empowered by various provisions of the Act, is also unable to either reach him or obtain the correct address with or without the co- operation and assistance of the assessee. We are unable to comprehend as to how the assessee approached the suppliers successfully and not the departmental authorities. authorities. In so far as the assessee is concern, it is a fact that he furnished copies of the purchase bills, confirmation letter of the purchases, payments are made by way cheque etc. However, we are under to appreciate as to how the purchase bills 218/0304 dated 1.10.2003 reflects the above mentioned address of August 1997, how the contract to supply the machinery is finalized mere by a visit of the supplier to the assessee without examining the bona fide of the supplier etc. On the other hand, the AO has stopped his investigation with mere address verification only instead of making other enquiries using the details furnished by the assessee regarding the Sales Tax Registration, Registrar of Compa....
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....onsideration. AO shall complete the investigation and bring the relevant facts to the facts to the file after giving reasonable opportunity of being heard. Thus, we are of the considered opinion, the order of the CIT (A) has to be set aside. Accordingly, the grounds of the revenue are set aside. 13. in the result the appeal of the revenue is allowed for statistical purposes." 3. The assessee had purchased following machinery, which according to assessee was new and used for the purpose of manufacturing. The details of machinery, as provided in the assessment order is as under: S.No. Invoice No. Date Name & address Description of the machinery Amount 1. 218/0304 1.10.03 Mansi Trading Pvt. Ltd. PPP 500 Plastic Extruder 6,08,400 2. 48 SA/03/04 9.10.03 Sujata Aircontrol Ltd. Chilling Plant-3 Ton 72,800 3. 74 2.10.03 Sainath Electronics Corporation 36 Silicon Rubber Roller 44,980 3.1 In pursuance to the directions of the Tribunal, the AO in the impugned assessment order in respect of A.Y. 2004-05, which is passed on 14/12/2010 has discarded the evidence and has mentioned that the on giving opportunity during the assessment proceeding the assess....
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....out the inspection as per the procedure being followed by them for the verification of authenticity of the new machinery installed by the borrower. From the above details it is proved that we had installed the new machinery at our premises in Silvassa. The evidences furnished by us are third party evidences and even the Government departments have confirmed the installation of new machinery in our undertaking. The documents to be produced as directed by the Hon'ble ITAT have been duly furnished for your kind perusal. Apart from the evidences called for by the Hon'ble ITAT, we have also furnished further documentary evidences to augment our claim. In view of the above, we submit that the machinery supplied by M/s Manasi Trading Pvt. Ltd. was new machinery and the assessee had complied with all the required conditions as laid down u/s 80-IB(2) of the I.T Act. Accordingly Your Honor is requested to allow our claim for deduction u/s 801B of the I T Act. If Your Honor requires any further clarifications we will be pleased to furnish the same." 3.2 Referring to the aforementioned submissions, the AO observed that the primary onus is on the assessee to establish that the machinery purc....
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....not the existence of machinery but whether the machinery transported is old or new. 4. Details of Installation certificates. In this regard, ix. The assessee has furnished the installation certificate dated 04.10.2003 issued by M/s. Ronak Electronics. Here it is necessary to clarify that the Bone of contention is not the existence of machinery but whether the machinery installed is old or new. The claim of deduction u/s. 80 IB of the I.T Act is considered for disallowance as assessee failed to establish that the machinery installed is new as required by the statute. vii)The assessee claim that the banker allow loan facility only after inspection of machinery. It is well known fact that the banker allow loan only on the strength of bills submitted before them. However even if it is presumed that the bankers have physically verified the machinery, it does not mean that the machinery purchased is a new one as envisaged In the provisions of law.. Viii) CST is charged on the bill and not on verification of machinery leave aside whether the machinery is old or new. Thus merely because CST/BST no. is provided would not mean that the machinery installed is a new one. Thus all the cont....
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....y have received payment by cheque drawn on Bharat Co-operative Bank Mumbai Ltd. Along with the said letter copy of bill was also sent to the AO. At page 94 of letter dated 26/3/2007, written by Bharat Co-operative Bank Mumbai Ltd., to the assessee confirmed that new machinery was installed in the factory of the assessee. At page-95 of letter dated 23/2/2007, written by Administration of Dadra & Nagar Haveli (UT) (Department of Industry, District Industrial Center, Silvassa) in which it has been confirmed that in reference to the letter dated 10/2/2007 written by the assessee to them, the assessee had obtained the permanent SSI Registration No.26/01/03032 dated 29/12/2004 for manufacture of Plain & Printed Plastic Bags & Rolls and it is also mentioned that the certificate of permanent SSI Registration to unit was granted after due verification of the requirement of the guidelines. Therefore, the Department confirmed that the machinery as per Appendix-B to the certificate of permanent SSI Registration are for new machinery. The said letter is signed by General Manager, District Industries Center, Silvassa. At page 99 of the paper book, copy of GR in the name of Bright Transport Compa....
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.... Silvassa - 396230. We have inspected premises and all new machineries situated at said Unit details as follows: 1) M/s.Manshi Trading Pvt. Ltd. - PP Extruder Machine 2) M/s. Sujata Air Contact Engg. - Air Cooler Chilling Machine 3) M/s. Sainath Electronic - Carona Treater machine. For THE BHARAT CO-OP BANK (MUMBAI) LIMITED Sd/- SR.MANAGER, ANDHERI (EAST) BRANCH. 4.2 Referring to aforementioned evidences it was submitted by Ld. AR that Department of Industries and Bank itself has certified the fact that the machinery installed in the factory of the assessee was new and the same should have been accepted by the AO and Ld. CIT(A). It was submitted that both these agencies are independent parties and credibility of these evidences cannot be doubted. It was submitted that, in view of these evidences filed by the assessee, it has to be held that assessee has proved beyond doubt that the machinery installed in the premises of the assessee was new, therefore, the assessee is entitled to get deduction under section 80 IB of the Act. 5. On the other hand, it was submitted by Ld. DR that despite the opportunities given to the assessee, it could not be provd that the machinery instal....