2019 (1) TMI 532

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....sumption. 2. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O.to delete the disallowance of deduction u/s.80IB of the Act in respect of Unit-Ill and Falandi Unit of the assessee, as the issue that these units are not established in consequence to restructuring of other Units of the assessee has not been conclusively established in assessment and appellate proceedings" 3a. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O. to delete the addition of Rs. 1,61,87,146/-as deemed dividend u/s.2(22)(e) of the Act, relying upon certain decisions, which in principle have not been accepted by the Revenue" 3b. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O.to delete the addition of Rs. 1,61,87,146/- as deemed dividend u/s.2(22)(e) of the Act, without appreciating the fact that the issue in akin circumstances has been decided in favour of Revenue by the Hon'ble Mumbai ITAT in the case of ITO vs. Sahir Sami Khatib, as reported in 57 taxmann.com 13" The assessee has filed Cross objection on the f....

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....nounced for Dadra & Nagar Haveli, concessions including sales tax facilities were granted to aid, assist, finance, promote, expedite and accelerate the economic development of the region and therefore, the notional central sales tax embedded in sale transactions was capital receipt in nature and hence not taxable. The Ld. AO denied the same to the assessee citing multiple reasons as stated in para 6.2 of the quantum assessment order. The stand of Ld. AO, upon confirmation by first appellate authority is under challenge in assessee's crossobjections. The Ld. Authorized Representative for Assessee [AR], Shri Nitesh Joshi, at the outset, submitted that the identical matter for AY 2009-10 has already been restored by the Tribunal to first appellate authority vide ITA No.6467/Mum/2013 and therefore, the matter for this year may also be restored on similar lines. Keeping in view the submissions, the matter stand remitted back to the file of Ld. AO on similar lines so as to enable the revenue to take uniform stand in the matter. The Ld. AO is directed to re-adjudicate the same keeping in view the directions of the Tribunal for AY 2009-10. Ground Number-1 of cross-objections stands allowed....

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....nt of funds should be assessed as „business income‟ and not as „income from other sources‟ as treated by the Assessing Officer. In this regard, Ld Counsel relied on the following decisions. i) CIT vs. Vidyut Steel Ltd. 219 ITR 30 (AP) ii) CIT vs. Koshika Telecom Ltd 287 ITR 479 (Del) iii) CIT vs. Karnal Cooperative Sugar Mills Ltd 243 ITR 2 (SC) iv) CIT vs. Indo Swiss Jewells Ltd 284 ITR 389 (Bom) 15. On the other hand, Ld DR dutifully relied on the order of the AO. 16. We have heard both the parties and perused the orders of the Revenue Authorities as well as citations quoted by the Ld Counsel along with the relevant material placed before us. On perusal of the cited judgments of the higher judiciary, we find that they are relevant for the proposition that the there is no question of isolating the interest received on margin money paid for obtaining bank guarantee and assessing it as separate income under section 56. Therefore, agree with the view of the Tribunal that the income derived on the margin money for obtaining bank guarantee cannot be separately assessed under section 56. Considering the bindin....

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....t extent, as claimed under the head Business Income shall stand disallowed. This ground as well as assessee's cross-objection stand allowed for statistical purposes. 3.1 The Ld. AO, relying upon order for 2009-10, has made another addition on account of unreported production and suppression of income as computed on the basis of power units consumed in Unit-III. The Ld. AO, on the basis of power consumption during impugned AY, arrived at a conclusion that assessee's unreported production in Unit-III was 6792 MT which could produce finished goods to the extent of 6705 MT valued at Rs. 27.08 Crores. Thus, by applying Gross Profit rate of 8.15%, the impugned additions have been worked out to be Rs. 220.74 Lacs. The Ld. CIT(A), relying upon the order of its predecessor for AY 2009-10, deleted the same. Aggrieved, the revenue is in further appeal before us. Both representatives converge on the point that this issue stood covered in assessee's favor by the order of the Tribunal for AY 2009-10 as well as for AY 2010-11, the copies of which have been placed on record. Upon due consideration, we find that the matter, for AY 2009-10 has been concluded in assessee's favor, in the following ....

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....the FAA has rightly held that the addition made by the AO was based on surmises and conjectures and on any reliable evidence. So, confirming his order, we decide the last ground against the AO. Material facts & circumstances being the same, respectfully following the consistent stand of Tribunal, we confirm the stand of first appellate authority and dismiss this ground of revenue's appeal. 3.2 The Second ground of revenue's appeal is related with assessee's eligibility to claim deduction u/s 80IB against Unit-III at Silvassa & Falandi Unit. The Ld. AO opined that these units were not newly created but arrangement by way of transfer from Unit-I and Unit-II since these units exhausted eligibility to claim the aforesaid deduction. It was further concluded that it was a deliberate ploy by assessee to convert Unit-I & Unit-II from stand-alone independent unit into that of job work units for the benefit of Unit-III with the sole objective of maximizing the deduction u/s 80IB. Since the deduction against Unit-III & Falandi Unit was denied to the assessee in AYs 2008-09 & 2009-10, the same was disallowed in the impugned AY also. The same, upon confirmation by Ld. CIT (A) is under app....