TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 212
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.... that Unit-2 is a separate unit and not expansion of Unit-1 and in that view of the matter erroneously holding that the Assessing officer has rightly merged the loss of Unit-2 in the profit of Unit-1. For that the decision of the Commissioner of Income Tax (Appeals) being contrary to facts on record, is not maintainable. 2. For that the Balance Sheet on record of Unit-2 irrefutably evidences the fact that Unit-2 was established by the appellant company at a fixed capital outlay of Rs. 99,80,68,554/- to independently manufacture cotton yam and grey knitted fabrics and that Unit-2 is a separate and distinct integrated unit capable of being carried on separately as a physically identifiable and industrially recognizable viable undertaking. For that the fact that Unit-2 is a separate unit is borne out of records. 3. For that establishment of Unit-2, though it led to an expansion of the existing business of the appellant company, it also led to emergence of a new, physically separate, identifiable, integrated industrial undertaking, viable by itself, separate and distinct in all and every respect from the existing Unit- 1. 4. For that no deduction having been claimed by the appell....
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....of the opinion that in a matter like this, since the grant of benefit depends upon the interpretation to be given to Section 10B of the Act, the Tribunal should have decided the issue on merits rather than taking the aforesaid short route. In view of this, Ld. Counsel for the respondent/assessee states that he has no objection if the matter is remitted back to the Tribunal for decision on merits. We accordingly set aside the impugned order and remit the case back to the Tribunal with direction that the appeal preferred by the assessee before the Tribunal shall be decided on merits. This appeal is disposed of in the aforesaid terms. " (emphasis provided in the present proceedings) 3. Addressing the issue under challenge, the Ld.AR sought to rely upon the findings arrived at by the Co-ordinate Bench in its order dated 24/6/2009 (copy of the said order placed at pages 22 to 28) so as to submit that the facts have been correctly brought out in the said order and considering the judicial precedent on the same, the issue it was submitted is to be decided in favour of the assessee. It was pointed out to the Ld. AR that since as per record, the said order has been set aside by the Hon'....
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....or had been relied upon by the assessee before the Co-ordinate Bench and the said factor was accepted for deciding the issue in assessee's favour. Accordingly it was his prayer that the same should be followed. 4. Ld. CIT DR Mr. Syed Nasir Ali, appearing for the Revenue vehemently submitted that Hon'ble High Court has strongly deprecated the approach to decide the issue on consistency accordingly reliance placed thereon by the Ld. AR, it was submitted is misplaced. Apart from that heavy reliance was placed upon the assessment order and the CIT(A)'s order. Attention of the Bench was invited to Paras 3.3.5 at page 7 of the impugned order, so as to submit that the CIT(A) has concluded the issue taking into consideration the submission advanced on behalf of the assessee itself who has stated that the green card is issued in the name of the appellant company and the said card covers both the units. Addressing the "Green Card" it was his submission that a perusal of the relevant provisions of the Act which have been considered by the CIT(A) would show that this is a license given by the Competent Authority under the Act to eligible companies. For the said purpose attention was invited t....
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....time. The Co-ordinate Bench considering the principle of consistency allowed the appeal of the assessee. The said order as per record has been challenged before the Hon'ble High Court who was pleased to remit the issue back directing the Tribunal to return a finding on merits. 5.1. In the said background, we note that as far as the assessment order is covered there is no discussion on the issue and based on the material available conclusion has been drawn by the AO. The correctness of the decision in appeal has been assailed as per record before as per Page 4 of the impugned order on the following ground:- i) Unit 1 began to manufacture and export in the previous year relevant to A.Y: 1992-93. The exemption u/s 10(B) was claimed for this unit from A. Y 1995-96 and is available to the unit up to A.Y 2001-02 i.e the year under appeal. vii) Unit 2 was established which began to manufacture and export in the previous year relevant to A.Y 1997-98. The appellant company had opted for non application of the provisions of Section 10(B) to its unit for the A.Y 1997-98 and thereafter. Unit 2 is a separate independent production unit. 5.2. Further relying on the decision of the Apex Court....
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....ears" means any assessment year failing within a period of ten consecutive assessment years, referred to in this section. 5.4. Considering the same, the CIT(A) it is seen concluded that for claiming the exemption u/s 10(B), it is necessary to obtain approval as a 100% export oriented undertaking by the Board appointed in this behalf by the Central Govt. in exercise of the powers conferred by Section 14 of the Industries Development & Regulation Act, 1951 and the Rules made under that Act. The Ld. CIT(A) considering the papers filed by the assessee before him vide letter dated 18th January 2005, observed that the green card has been issued by the Export Promotion Officer vide letter dated 26/8/1992 and the company had been informed about the issue of the green card No. is 037 dated 25/8/1992 valid upto 23/8/1997. Considering the discussion in the impugned order, we find that the submission of the Ld. AR that the CIT(A) misdirected himself by discussing an irrelevant issue of "Green Card" on facts is found to be not tenable we find that the discussion on green card was a valid discussion and it was introduced by the assessee itself before the CIT(A) in support of its claim. It is fu....
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....of the impugned order shows that the counsel failed to produce copy of the same. 5.5. In the said background where we are called upon by the Hon'ble High Court to decide the issue on merits where admittedly in the assessment order there is no discussion but facts are thrashed out by the CIT(A) where admittedly the only direct evidence would be the letter/application addressed to the Competent Authority by the assessee for its approvals is not available on record, we find that the issue has to be sent back to the AO. While doing so, we hold that the Ld. CIT DR is justified in relying upon the finding of the CIT(A) as the claim cannot be decided on the basis of the self-serving Note to Accounts No. (ii) in paper Book page 19 given by the assessee in the Audited Book of Account. The same is reproduced hereunder:- (i) "The company being an 100% Export Oriented Unit claims exemption u/s 10B from assessment year. (ii) The Unit-II of the assessee company which commenced business is year 1997-98 is an 100% of export Oriented Unit and its income Tax u/s 10B of the Income Tax Act, 1961, the assessee do not propose to avail the exemption this year in respect of its Unit-II." 5.6. A perusa....
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....ng concern manufacturing boilers, machinery parts, wagons, etc., set up two new units, a steel foundry division and jute mill division. The steel foundry division started manufacturing some castings, which the appellant was previously buying from the market, but the castings were mostly used by the other existing divisions of the appellant itself. Raw materials were supplied to the jute mill division by the boiler division of the appellant and after machining and forging, the parts were given back by the jute mill division to the boiler division. The appellant claimed exemption from tax u/s 15C of the India Income-tax, 1922, in respect of the profits form the steel foundry division for the assessment years 1958-59 and 1959-60, and in respect of the profits from the jute mill division for the assessment year 1959-60. The income-tax authorities held that the two units were formed by reconstruction of the business already existing within the meaning of section 15C(i); but the Appellate Tribunal, on appeal, held that the appellant was entitled to the relief u/s 15C because the two divisions were new industrial undertakings and that they were not formed by reconstruction of the existing....