AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1098
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....garded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view. 3. That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable. 4. That finding and conclusion of the learned Pr. Commissioner of Income Tax that "the AO is directed to re-assess or re-compute the income of the assessee for the relevant assessment year, by conducting further inquiries as necessitated for its claim of deduction u/s 80IC of the Act after affording reasonable opportunity of being heard to the assessee" is illegal, invalid and without jurisdiction. 5. That the assumption of the learned Pr. Commissioner of Income Tax that the "assessment order for the AY 2012-13 was passed by the AO in haste without conducting due enquiries as wel....
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....eduction u/s 80IC of the Income Tax Act, 1961. The assessee in this case, however could not prove that it had actual started the manufacturing activities till 31.03.2012 (i.e. before 01,04.2012) and therefore, the assessee was not entitled to claim deduction u/s 80IC of the Income Tax Ad, 1961 for the A. Y. 2012-13 or, for that matter, any of the subsequent assessment years. Accordingly, your claim of deduction u/s 80IC of the Act for the A.Y. 2015-16 was disallowed and the same was added back to your total income. In view of the above, the assessment order passed u/s 143(3) dated 30.11.2016 by the Income Tax Officer, Ward 28(2), New Delhi apparently seems to be erroneous and prejudicial to the interest of revenue within the meaning of section 263 of the Act. Therefore, the same is liable to be set aside as per provisions of section 263 of the Income Tax Act, 1961. However, before taking any such action, you are hereby given an opportunity of being heard to attend my office at Railway Board Building, Shimla on 20.03.2019 at 11.30 AM. In case, you do not wish to avail the said opportunity of being heard in person or through an Authorized Representative, you may send a writt....
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....ition in plant 66 machinery for Rs. 4,62,140/- ii) Further issuance of certificate from Director of Industries before the expiry of sunset clause i.e 1st April 2012 is of great relevance as it is granted to a unit that is in operation after physical inspection carried by the official from the Department of Industries. iii) Hence only after satisfactory inspection that the manufacturing activity is being carried on, certificate has been granted. iv) Further, it is no where mentioned in the provisions of section 801C of the Act that approval of single Window Clearance Agency is mandatory to claim deduction under the relevant section. Therefore, the view of the above, the allegation that manufacturing activity has not been started in AY 2012-13 is misconceived, misplaced and untenable. ii) As per your reply dated 05.10.2017 furnished to the A.O., you have made necessary purchases of material only on 26.03.2012 and 27.03.2012 from Delhi. Thus, there is no possibility of starting production prior to the date of purchase of material (raw material) to be used in production by your firm. For this reason also, your claim of starting manufacturing activities as on 09.03.201....
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....purchases. It is thus submitted that having regard to the above, the allegation that there is no manufacturing activities is also based on misconception. Further, payment for purchases and receipt of money for sale is no bar in section 801C to deny the claim of the assessee. It was practically not possible for you to start production on 31.03.2012, i.e. after its manufacturing activities were approved by the Single Window Clearance Agency of the Govt. of Himachal Pradesh, complete the entire production process on 31.03.2012, make necessary packaging of the material produced, dispatch and deliver it to the transporter on the same date i.e. on 31.03.2012. i) It is submitted that no doubt that the approval by the single window clearing agency of the government of Himachal Pradesh was obtained on 31.3.2012, it does not mean that the assessee has started the manufacturing facility on 31.3.2012. The manufacturing facility was started on 27.3.2012 and the approval of aforementioned agency has been granted only after proper physical inspection and on satisfaction that the unit is in operation. ii) Further, it is evident from para 5.7 of assessment order for Assessment....
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....ere had been withdrawals of Rs. 60,000/- and Rs. 10,000- on 9.3.2012 and 22.3.2012 respectively. Hence the view of the Assessing Officer that the expenses claimed are bogus is erroneous and misconceived. You have also submitted bill of Rs. 4,63,352/- on account of purchase of Machinery but also has not submitted the details installation of above machinery before 31.03.2012. i) It is submitted that the machines used in the production does not require any installation because all the machinery are movable. Therefore, no expenses were incurred by the assessee in this regard. ii) Further, machines were used in the production of final goods can be witnessed from the fact of approval by single clearance agency window of government of Himachal Pradesh as the certificate has been endorsed only after the same has been in operation The firm has also made sales of Rs. 1,27,500/- during the year under consideration. However, no payment was received till 31.03.2012. The firm's claim in reply dated 06.10.2017 that the balance outstanding against Ws Uniwork Electroniks as on 31.03.2012 was Rs. 97,257/- is only to one sided accounting treatment given by the asse....
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....n the Form 10CCB, the AO during the course of assessment proceedings conducting enquires have noticed that the Certificate of Registration was granted to the assessee by the State Excise and Taxation Department only on 27.03.2012; iv) The AO during the course of assessment proceedings for the A.Y. 2015-16 in the case of the assessee on the basis of the enquires made has found the assessee has claimed having made purchase of raw material from two Delhi based parties namely Uniwork Electronic and JJ Electronics. In the case of Uniwork Electronic the sale invoice of purchase bill is dated 31.03.2012 and further on inquiry it was found that the said party did not exist at the given address. Regarding M/s J J Electronics, the inquiry letter issued calling for information by the AO u/s 133(6) of the Act remained un-responded; v) Since, the Single Window Clearance Agency of the Stale Government and the alleged raw material purchase bill from M/s Uniwork Electronic, Delhi are dated 31.03.2012, therefore, the AO has held that it was not possible for the assessee to start its manufacturing on 31.03.2012 itself; vi) Inspite of having been issued specific su....
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....dings before allowing the deduction u/s 80IC of the Act. From these facts brought on record it is more than evident that the assessment order for the A.Y. 2012-13 was passed by the AO in haste without conducting due enquires as well as without making proper verification of the books of account maintained by the assessee. Even the audit report in form 10CCB is found apparently wrong or incorrect inasmuch as the report mentioned therein that the assessee firm has started its manufacturing activity w.e.f. 09.03.2012, is found apparently in correct, since the assessee itself was constituted on 09.03.2012 and even the assessee itself has claimed having made first purchase of raw material on 26.03.2012 (although the genuineness of the same is also found doubtful). All the necessary government certificates/clearances etc. required for the start of business was not obtained by the assesse as on 09.03.2012 as discussed above. Further, from the verification of books of account of the assessee, the AO during the course of assessment proceedings for the A.Y. 2015-16, has noticed various discrepancies/ infirmities vis-a-vis its claim of deduction u/s 80IC of the Act. Inspite thereof, the AO has....
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.... consideration and even the adverse comments were given for the assessment year 2012-13 and not for the year under consideration i.e; 2014-15. It was further submitted that the Ld. Pr. CIT nowhere recorded a satisfaction that the order passed by the A.O. was erroneous or prejudicial to the interest of the Revenue for the year under consideration therefore the Ld. Pr. CIT has not applied his mind while setting aside the assessment order passed by the A.O. It was also stated that the assessee firm was registered with Industry Department for manufacturing, the reference was made to page no. 468 of the assessee's paper book which is the copy of the Registration granted by the Industry Department relevant for claiming the deduction under section 80IC of the Act. It was further stated that the assessee had not claimed any exemption for the assessment year 2012-13 and that there was substantial expansion in that assessment year, later on the assessee firm was changed to a partnership firm which was earlier a proprietorship concern. However the unit of the assessee was engaged in manufacturing activity and was eligible for deduction under section 80IC of the Act. It was stated the A.O. ....
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....6 for claim of deduction under section 80IC but the assessment order for the assessment year 2012-13 was passed in haste without conducting due enquiries as well as without proper verification of the books of account. However nothing is brought on record to substantiate that the said assessment order passed by the A.O. for the assessment year 2012-13 was disturbed. The Ld. Pr. CIT simply stated that the A.O. allowed the deduction under section 80IC of the Act in the case of the assessee for the relevant assessment year i.e; A.Y. 2012-13 therefore the said assessment order passed by the A.O. for the A.Y. 2012-13 was in haste and without conducting the enquiries so it became erroneous in so far as it is prejudicial to the interest of the Revenue within the meaning of the provisions of section 263 of the Act, however no such findings has been given for the year under consideration i.e. A.Y. 2014-15. 11. It is well settled that for the assessment proceedings each year is independent & separate, and in the absence of any adverse remarks given by the Ld. Pr. CIT that no such enquiries were made by the A.O. for allowing the claim under section 80IC of the Act for the year under conside....