TaxTMI 
TaxTMI 
2015 (8) TMI 1273
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....eturned income of Rs. 7,02,02,910/-. The Ld. Commissioner of Income Tax, on perusal of the record found the assessment order to be erroneous and prejudicial to the interest of revenue and issued a show cause notice to the assessee which is reproduced in the impugned order. The Ld. Commissioner of Income Tax in the notice noted that assessee has been allowed deduction under section 80IB of the Act on job work charges of Rs. 9,32,736/-. The amount received on account of job work is not a result of manufacturing or producing articles or things and therefore, assessee is not entitled to claim of deduction under section 80IB of the Income Tax Act. The decision of the Hon'ble Punjab & Haryana High Court in the case of Friends Casting Pvt. Ltd. 50 DTR 61 was relied upon. It was also noted that survey under section 133A was conducted at the business premises of the assessee and during the course of survey, certain incriminating documents relating to loans and advances were found. The assessee, accordingly surrendered a sum of Rs. 6 Crores to cover up these discrepancies. The assessee has been allowed deduction under section 80IB on an income of Rs. 6 Crores accepting the claim of asses....
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....cial to the interest of revenue. The explanation of the assessee was called for. The assessee filed the submissions before Ld. Commissioner of Income Tax. 6. The Ld. Commissioner of Income Tax, considering the material on record and submissions of the assessee, noted that assessee is not entitled for deduction under section 80IB of the Act on surrendering undisclosed income. The Assessing Officer has not made any enquiry in this regard and has not disallowed the deduction under section 80IB on the aforesaid surrendered income. The Assessing Officer has also not examined the deduction under section 80IB on job work charges. The Ld. Commissioner of Income Tax, in support of the proposition that assessment made without making proper enquiry is erroneous and prejudicial to the interest of revenue, relied upon several decisions in the impugned order including of decision of various Benches of the Tribunal and different High Courts. The Ld. Commissioner of Income Tax, considering the material on record found that Assessing Officer has not made proper enquiry and has not verified the correctness and genuineness of the claim of the assessee and no facts have been analyzed. Therefore, the ....
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....n 80IB. The Assessing Officer has wrongly allowed deduction under section 80IB of the Act on surrendered income without making any enquiry on the same. Therefore, on merit also, it was found that the order of the Assessing Officer was erroneous and prejudicial to the interest of revenue. The Ld. Commissioner of Income Tax, with regard to deduction under section 80IB on job work also noted that claim is allowed by the Assessing Officer without verifying the fact and without making any enquiry. The Ld. Commissioner of Income Tax also found that provision of Section 41(1) of the Act is also not applicable in the case of the assessee. The Ld. Commissioner of Income Tax, therefore, set aside the assessment order and directed the Assessing Officer to make the assessment afresh denovo after properly examining the issue and conducting proper enquiry by giving sufficient opportunity of being heard to the assessee. 7. The assessee is in appeal and in the ground of appeal, assessee challenged that the revision order is barred by limitation and that assessee is entitled for deduction under section 80IB on the surrendered income as well as on job work. 8. The ld. counsel for the assessee subm....
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.... query letter issued by the Assessing Officer with regard to deduction under section 80IB or any reply filed before Assessing Officer in this regard. The ld. counsel for the assessee ultimately submitted that the directions may be issued to the Ld. Commissioner of Income Tax to consider the plea of the assessee on merit. On the other hand, ld. DR submitted that Assessing Officer has not made any enquiry on both the issues and no income is derived from any business or Industrial Undertaking on which surrender was made as well as job income was shown. Therefore, when Assessing Officer failed to make enquiry on both the aspects, Ld. Commissioner of Income Tax was justified in holding that assessment order to be erroneous and prejudicial to the interest of revenue. 12. The ld. DR also submitted that Ld. Commissioner of Income Tax is bound by the judgement of Hon'ble Punjab & Haryana High Court in the case of National Legguard Works 288 ITR 18 directly applicable in this issue. The ld. DR relied upon decision of the Hon'ble Punjab & Haryana High Court in the case of Arun Luthra 252 ITR 76 on the proposition of decision of the jurisdictional High Court are binding on all the sub....
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....ion under section 80IB of the Act to the assessee on surrendered income as well as on job charges. The accounts of the assessee revealed that assessee declared income of Rs. 6 crores as business advances written off, therefore, it could not be said to have any nexus with the Industrial Undertaking of the assessee. The surrendered income was, therefore, undisclosed income from other sources and assessee failed to establish that source of unaccounted income invested in advances which were written off had any nexus with the Industrial Undertaking of the assessee. The assessee, during the course of survey as well as assessment proceedings have not filed any documentary evidence to establish that income of Rs. 6 crore has been earned through manufacturing activities eligible for deduction under section 80IB of the Act. Thus, the Assessing Officer has failed to make any enquiry or investigation on claim of assessee of deduction under section 80IB at the assessment stage on the above surrendered income as well as on job charges. It is well settled law that failure by the Assessing Officer to make enquiry at assessment stage would render his order to be erroneous and prejudicial to the int....