TaxTMI 
TaxTMI 
2016 (5) TMI 717
X X X X Extracts X X X X
X X X X Extracts X X X X
....denied to the assessee. We shall take the appeal ITA No. 199/Mum/2012 for the assessment year 2003-04 as the lead appeal and our decision in ITA No. 199/Mum/2012 shall apply mutatis mutandis to the appeal ITA No. 200/Mum/2012 for assessment year 2004-05, the following grounds of appeal have been raised by the assessee with respect to appeal ITA No 199/Mum/2012 for the assessment year 2003-04 in the memo of appeal filed with the Tribunal :- "1. The Order of the Learned CIT (A) is bad in law and on facts. 2. The Learned CIT (A) has erred in dismissing the appeal filed by the assessee on disallowance made by the assessing officer deduction under Section 80IB despite: 2.1 The assessee having produced a certificate from the machinery manufacturer regarding the use of power. 2.2 Producing the evidence collected from the Electricity Department, Dadar & Nagar Haveli, Silvassa, received in response to the notice U/s 133 (6), calling for information of the electric units consumed for the period from April 2002 to March 2003 and April 2003 to March 2004 on the basis of which the Learned Assessing Officer has contended that power was not used and the assessee was carrying out its activ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the A.O. We order accordingly and direct him to decide the issue afresh in accordance with our aforesaid observation." Accordingly , notice u/s 142(1) of the Act was issued by the AO to the assessee to submit the evidence to prove that power was used for the manufacturing process. However, the assessee failed to file documentary evidence that the machinery used in the manufacturing process operated with low speed heavy duty geared which was indicative of the power and very low consumption of power was required. The assessee also failed to file expert opinion or any other material as directed by the Tribunal. A notice dated 30.11.2010 u/s 133(6) of the Act was issued to the Dy. Engineer (N.Z.), Electricity Department, Dadra & Nagar Haveli, Silvasa calling information of electrical units consumed for the period April, 2002 to March, 2003 and April, 2003 to March, 2004. On perusal of the information submitted by the Deputy Engineer (N/Z-1I), Electrical Dept, Dadra andF Nagar Haveli, Silvassa that the minimum electrical connection charges for the assessee's unit, per month is fixed at Rs. 375/-. The electricity bill dated 17.09.2003 has been raised by electricity department for Rs. 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act. Thus the AO held that the assessee has also failed to establish correctness of deduction u/s 80IB of the Act , that it carried out its manufacturing activity by use of electricity and also not employing twenty or more workers to carry out his business without electricity, hence, deduction u/s 80IB of the Act was denied to the assessee by the AO in the second round vide assessment orders dated 30-12-2010 passed u/s 143(3) read with Section 254 of the Act. 4. Aggrieved by the assessment order dated 30-12-2010 passed by the AO u/s 143(3) read with Section 254 of the Act, the assessee preferred an appeal before the CIT(A). 5. Before the CIT(A), the assessee submitted that the assessee's proprietary concern was operating the machinery, which was installed on the factory premises. The necessary approvals from the electricity Department as well as the Factories License and the certificate of registration as a small scale undertaking was received from the Directorate of Industries, which all confirm the presence of the machinery on the factory premises. The sanction from the electricity Department regarding the use of 15HP motive power and 2500 W. lighting connection is also on r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the ground that the statement obtained from the Electricity Department, Silvasa shows bare minimum usage of electricity. The A.O. attributes the minimum charges in the use of light bulbs, fans, etc. accordingly the assessee prayed that the power was used in the manufacturing activity and hence the deduction u/s. 80IB of the Act should not be disallowed. The CIT(A) after going through the assessment order and submission of the assessee observed that the A.O. had called for the information from the Dy. Engineer (N.Z.), Electricity Department, Dadra, Nagar & Haveli, Silvasa from which the A.O. found that the assessee was carrying out its activities by nonelectrical help method. The CIT(A) further observed that the A.O. has analysed the report of Dy. Engineer, Electrical Department, Silvasa and noted that the net charges for electricity for every month comes to Rs. 375/- and from the chart provided by electrical department, it was seen that during the year the assessee had not consumed any power for the purpose of manufacturing. The A.O. has also rejected the contention of the assessee that the meter installed in the factory was faulty and defective on the ground that assessee is not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me and commercially known as such and mixing and manufacturing are two different activities. Accordingly the A.O. denied the deduction u/s 80IB of the Act in the first round of litigation. However, the CIT(A) allowed the appeal in the first round of litigation granting deduction to the assessee u/s 80-IB of the Act , vide orders dated 03-12-2007 and the Revenue went in appeal before the Mumbai Tribunal against the orders of the CIT(A). The Tribunal vide orders dated 25-06-2009 in ITA No. 1478 & 1479/Mum/2008 for assessment year 2003-04 and 2004-05 respectively , set aside the matter to the file of A.O. for deciding the issue afresh whether the manufacturing process carried on by the assessee is with the aid of power and at the same time the Tribunal accepted the fact that the assessee is engaged in manufacturing activity, while the controversy now centers around the carrying out of the manufacturing process with or without the aid of power, for which there was no material placed on record before the Tribunal by the assessee in the first round of litigation. The ld. Counsel for the assessee submitted that the assessee has installed gear stirrers fitted with ½ HP AC/DC motors ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oduced in mechanized equipment run with electric motors and production cannot be done without electric power consumption and based on the technical specification of the nominal 1/s HP motor(230V/2.5Amps) used in the mixer equipment as follows : "eltek make GM 63L2, 280RPM, single phase, continuous duty at 45 degree C" and power consumption was worked out based on the reported production to be 528 units for the previous year 2002-03 and 1296 units for the previous year 2003-04. The ld. Counsel also submitted copy of certificate dated 3rd June 2015 from Institute of Chemical Technology as additional evidence whereby the Institute certified that the numbers given in the letter for power consumption amounting to 0.5 KW per mixer of 20 liters each and totaling up to 528 units in one year and 1296 units in another year ,whereby for the process of making emulsions of oil and water, the amount required power consumption as given in that letter is realistic. The ld. Counsel prayed that all the above documents submitted hereby in the form of additional evidences before the Tribunal, which goes to the roots of the matter, may kindly be admitted and the claim of deduction of the assessee u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....003-04 and 2004-05 respectively in the assessee's own case. The only controversy now is with regard to whether this manufacturing activity is carried on with the aid of power or not as required by the provisions of Section 80IB(2)(iv) of the Act , to get the claim of deduction u/s 80IB of the Act. We have observed that the manufacturer of the motor certified that the ½ HP Blender Mixer cannot be used without power, certificate is placed at page 96 of paper book. The assessee also submitted the relevant copy of invoices from various parties for purchase of machineries, which is on record in paper book, page 18-26. The assessee also submitted copy of small scale industries registration certificate for manufacture of oil based formulation and copy of approval of power connection of 15HP for motive power and 2500W for lighting sanctioned by Electricity Department which are also on record at page 30-31. The assessee also submitted copy of Pollution Control Board Certificate from Pollution Control Committee and copy of certificate of License to Work a Factory engaged in the manufacture of oil based formulation which are again placed in paper book,page 32-33. We have observed that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the numbers given in the letter for power consumption amounting to 0.5 KW per mixer of 20 liters each and totaling up to 528 units in the previous year relevant to assessment year 2003-04 and 1296 units in the previous year relevant to assessment year 2004-05 whereby for the process of making emulsions of oil and water, the amount of required power consumption as given in that letter of Triiton Mentors and Advisors Private Limited was held to be realistic by Institute of Chemical Technology. The assessee has prayed that these additional evidences now submitted before the Tribunal in second round of litigation be admitted under Section 255(6) of the Act read with Rule 29 of Income Tax(Appellate Tribunal) Rules, 1963. This is the second round of litigation and the assessee has produced the additional evidences before the Tribunal in this second round of litigation. The assesssee has submitted that the assessee is of advanced age being 72 years of age and is the only person in the organization who looks after the financial and taxation matter. The assessee has stated that his health is deteriorating in the last six years as he is suffering from several ailments such as heart prob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er substantial cause, or , if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.]" Rule 29 clearly provides that if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, the Tribunal may record reasons for production of the evidences and the material. From a judicial analysis of various decisions, it is amply settled and clear that the Tribunal can admit additional evidence in terms of rule 29 of the Income-tax (Appellate Tribunal) Rules,1963 if the receipt or admission of additional evidence is vital and essential for the purpose of consideration of the subject-matter of the appeal and arrive at a final and ultimate decision. The Tribunal, therefore, has also power to admit additional evidence in the interest of justice or if there exists substantial cause. The ....