TaxTMI 
TaxTMI 
2015 (9) TMI 1183
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....as not eligible for deduction u/s 80IB of the Act. 4. The ld. CIT(A) has erred in law and on facts in upholding the addition made by the ld. AO to the tune of Rs. 14,91,264/- on the ground of differences in balances of Sundry Creditors. 5. The ld. CIT(A) has erred in law and on facts in upholding the disallowance of rent expenses made by the ld. AO amounting to Rs. 1,26,000/- on the ground of non-deduction of TDS u/s 40(a)(ia) of the Act. The ld. CIT(A) has further erred in law and on facts in not allowing the deduction u/s 80IB of the Act to the extent of the said disallowance of rent expenses since the eligible business income of the appellant would increase to the extent of the said disallowance. 6. The ld. CIT(A) has erred in law and on facts in upholding the disallowance of freight expenses made by the ld. AO amounting to Rs. 2,64,627/- on the ground of non-deduction of TDS u/s 40(a)(ia) of the Act. The ld. CIT(A) has further erred in law and on facts in not allowing the deduction u/s 80IB of the Act to the extent of the said disallowance of freight expenses since the eligible business income of the appellant would increase to the extent of the said disallowance....
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....tantial amount of manufacturing, assembling, finishing and testing work involved. Neither it is possible to do so nor does any evidence submitted during the assessment proceedings substantively proves that it was done. At the outset it needs to be clarified that backed by the claim of the assessee to have commenced manufacture or production before the end of F.Y.2003-04, the assessee had been claiming deduction u/s 80IB since A.Y.2004-05 onwards and thereby, the year under consideration i.e. A.Y.2007-08 was the fourth year of the claim. However, the assessment for none of the past three years were finalized u/s 143(3) and hence the veracity of the claim u/s 80IB was never verified earlier. Since the primary eligibility of the business for deduction u/s 80IB has to be examined qua the year of commencement and which was not subjected to examined ever before, it was incumbent upon the undersigned to conduct such verification in the year under consideration. It was in view of these facts that the claim u/s 80IB was verified not only in the context of the fulfillment of the four conditions laid out in subsection (2) of section 80IB but also in the context of subsection (3) of section....
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....o evidence of such power consumption including provisional power if any is found in the first bill of power. The consumption of power as per meter reading is recorded as NIL for the entire period of March 2004 to July, 2004. This fact would sufficiently invalidate the opening contention of the assessee. As regards the question whether the manufacture of the control panel has been done within such a short period of time, the elaborate description given by the assessee and list of machinery involved contains eleven different processes by eleven different machineries. By the assessee's own admission, seven machineries can only be operated by power, whereas the other four can be optionally hand operated also. Most importantly, none of the processes to be carried on by the power operated seven machines is optional. Each of such process like Welding, drilling, punching, painting by air compressor, grinding & cutting are inseparable & mandatory process without which the manufacture of the panel box cannot even begin leave alone getting completed. The assessee has also contended that requirement of power arise only at a later stage. The contention itself deserves rejection because....
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....ification of details reveal that the assessee has not furnished any evidence in respect of deduction of TDS on expenses of rent of Rs. 1,26,000/- and freight of Rs. 2,64,627/-. In view of the provision of section 40(a)(ia) the same are disallowed and added back to the total income of the assessee" 3. In this connection the assessee made submissions and having considered them, the Assessing Officer rejected the same and disallowed the claim of deduction of Rs. 1,03,91,856/- u/s 80IB of the Act. Aggrieved, the assessee carried the matter in appeal before the CIT(A) who also in turn confirmed the impugned disallowance. The assessee was not satisfied and being aggrieved is in further appeal before the Tribunal. 4. The ld. Authorized Representative vehemently argued that the assessee was eligible for claiming deduction as per the provisions of section 80IB. Accordingly he submitted that the CIT(A) has wrongly confirmed the disallowance. The impugned order may be set aside. 5. On the other hand, the ld. Departmental Representative supported the orders of authorities below. He submitted that the CIT(A) was justified in confirming the action of Assessing Officer in disallowing Rs.....
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....ven by electricity department. First bill of electricity starts from March 2004 and energy charges stated therein is Rs. 1015/- coupled with taxes. In this regard the Assessing Officer has stated Rs. 1,015/- is minimum charges and no energy charges was there in bill as amount of Rs. 1,015/- is stated as energy charges and minimum charges is stated as NIL. In this regard the Assessing Officer has filed another bill from concerned electricity department pertaining to March, 2004 to July, 2004 according to which consumption of electricity is '0' but on the same document electric consumption has been shown at 8 units. The said bill was to be paid on 4th October, 2004. In this regard the ld. Authorised Representative pointed out that this bill is for low tension. At the same time energy has been consumed. In this regard we find a low tension power but as far as consumption of electricity is concerned it is contradictory information on the same document. In case there is contradiction in the document the benefit goes in favour of assessee because energy consumption has been shown as 8 units. Coming to the other bill assessee has placed reliance on the bill dated 11.11.2004 placed at page....
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.... authorities have not doubted the same. The assessee has placed on record wages sheets (at page 84 of the Paper Book), the wages were paid to 12 employees and one more requirement of manufacturing was satisfied, the Assessing Officer has not doubted the same. The assessee has also placed on record the sale bill of 31.3.2004 which shows sales-tax NIL, as sales tax has been exempted as per Exemption Certificate. The same is placed on page 85 of the Paper Book. The CIT(A) issued notice to the purchaser and the purchaser has confirmed the same, but the CIT(A) remained silent on the same. This is indicative that the claim of the assessee in subsequent proceedings is also justified and there is nothing on record that assessee has not sold its product on 31.3.2004 and sales-tax was NIL as per exemption certificate. It is further strengthened by the Assessment Order under Central Sales-tax as placed on pages 93 to 95 of the paper book. Accordingly, all the conditions of commencement of manufacturing unit are satisfied by the assessee and the Revenue authorities have not doubted the said assessment order Under Central Sales Tax provisions. The Central Sales-tax assessment can be done under ....
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....rovide any evidences such as confirmatory letters from the sundry creditors and the reconciliation statement from the two creditors in support of its contention. In absence of any supporting documents, the submissions made by the assessee are only self-serving documents not supported by any evidences. Thus the CIT(A) confirmed the same. Aggrieved, the assessee is in appeal before us. 7.2 The ld. Authorized Representative submitted that all the details and evidences were placed before the authorities below but they have not properly appreciated the facts and negated the case of the assessee. He submitted that all the necessary material are on record. Therefore, after considering the submissions necessary relief be granted to the assessee. On the other hand, the ld. Departmental Representative relied on the orders of authorities below. 7.3 We have considered the rival submissions and carefully gone through the material on record. It is undisputed that this document was filed by the assessee as claimed and as evident from the details. This certificate was placed before the authorities below and in such situation it is not proper on the part of both the authorities below to negat....