TaxTMI 
TaxTMI 
2021 (2) TMI 849
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.....s.33B by the Appellant stating that the provisions of Sec.80IB r.w.s.33B are not applicable to the facts of the appellant's case and therefore the appellant is not eligible for deduction u/s.80IB. Commissioner of Income Tax (Appeals) is not justified in stating that the Appellant did not produce any documents/accounts except filing a paper book. The Commissioner of Income Tax (Appeals) failed to note that the said paper book contains all the information supporting the claim of the Appellant and therefore not justified in ignoring such information and dismissing the Appellant's claim on this issue. The Commissioner of Income Tax (Appeals) ought to have seen that there was total stoppage of production and the factory was shut down during the period 06-11- 1996 to 20-12-1996. 3. For all of the above and such other grounds as may be urged at the time of hearing it is most respectfully prayed that this Hon'ble Tribunal may be pleased to allow the appeal and suitable directions be given. to the Assessing Officer to allow the deduction claimed u/s.80IB r.w.s.33B by the Appellant in the interest of justice". 3. Mr.Moharana and Mr.Pandey informed us during the cours....
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....reasonable that the matter should go back to the file of the Assessing Officer and accordingly, we set aside the order passed by the learned CIT(A) on this count and restore the issue to the file of the Assessing Officer who shall decide the same afresh in the light of the observations hereinabove and according to law, after providing a reasonable opportunity of being heard to the assessee. Accordingly, all the aforesaid grounds including the additional grounds taken by the assessee are partly allowed for statistical purpose." 2.1. Consequent to the order passed by the ITAT, the Deputy Commissioner of Income tax, Circle-3(1), took up the assessment and called upon the assessee to justify its claim for deduction u/s.80IA r.w.s 33B. 2.2. The assessee, on 16 12 2008, filed detailed note justifying its claim for deduction u/s.80IA r.w.s.33B of the Act along with paper book containing the following information, which was furnished by the assessee before the ITAT in the course of hearing of appeals. 1. Production process and flowchart for manufacture of tiles (Paper book page Nos.2 to 5). 2. Copy of license from Ministry of Industries for increase in p....
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....ings were open to sky in a matter of minutes on the onset of cyclone. The entire plant and machinery of the factory were exposed to the Fury of the heavy and incessant rain that followed the cyclone. All electrical motors and electrical equipments were submerged in flood waters. The factory was working at the time of the occurrence with all the three kilns in operation and hot condition. The heavy downpour suddenly quencher the hot furnace resulting in cracking up of refractory, breakage of ceramic rollers and damaging insulation. The Insured took nearly a month for clearing the debris, bailing out stagnant water to start repair work. The insured took up roofing of the factory on a war footing by repairing/replacing the damaged trusses/purlins and reinstalling the AC sheet roofing. Simultaneously work on repairing damages to plant and machinery in respect of Body preparation equipments was taken up and completed by the first week of December 1996. Repairs to electrical installation such as outdoor installation, LT & HT panels, drying/rewinding of Electrical motors, Electrical wiring and fittings were taken up and completed by end March 97. Repairs and rep....
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....ays i.e., from 1.11.1996 till evening of 6.11.1996 in all the three kilns. Further the quantity of production of 53,669 Sq. Meters for the month of December 1996 is the production achieved from Kiln I and Kiln II from 20.12.1996 & 22.12.1996 to 31.12.1996 and there is no production in Kiln III since it is restarted only on 15.4.1997. 2.8. The assessee submits that Surveyors of Insurance Company assessed the damages to the Buildings, Plant & Machinery and quantified the total cost of repairs for restructuring at Rs. 4,39,75,689/-. Similarly, the Statutory Auditors also certified that an amount of Rs. 254.87 lakhs and Rs. 184.89 lakhs was incurred by the company for reconstruction of the plant and machinery and buildings in Schedule 19 attached to the Balance sheet for the year 1996-97 (page 64 of paper book) and Schedule 18 attached to the Balance sheet for the year 1997-98 (page 95 of paper book) respectively against the W.D.V of Fixed Assets of Rs. 3608.38 lakhs as per books as on 01.04.19961 which is equivalent to 12.18% of W.D.V of assets. It is evident from the above that the buildings, plant and machinery of our factory were extensively damaged due to cyclone on 06.11....
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....d in that section: (ii)It is not formed by the transfer to a new business of machinery or plant previously used for any purpose: (iii) It manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India: Provided that the condition in this clause shall in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-clause (b) of clause (iv) which begins to manufacture or produce an article or thing during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2000, apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been Omitted: (iv) (a) in the case of an industrial undertaking not specified in subclause (b) or sub clause (c), it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the 1st day of April, 1991 and ending on the 3pt day of March, 1995, or such further period as the Central Government may. by notificat....
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.... the machinery or plant or part so transferred does not exceed twenty percent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with." 2.12. We also invite your kind attention to section 33B of the Act which reads as under. "33B. Where the business of any industrial undertaking carried on in India is discontinued in any previous year by reason of extensive damage to, or destruction of, any building, machinery, plant or furniture owned by the assessee and used for the purposes of such business as a direct result of - (i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature: or (ii) riot or civil disturbance: or (iii) accidental fire or explosion: or (iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war), and, thereafter, at any time before the expiry of three years from the end of such previous year, the business is re-established, reconstructed or revived by the assessee, he shall, in respect of the previous ....
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....s normal meaning which merely means as said earlier 'large in amount'. Therefore it is submitted that there was extensive damage to the buildings, plant and machinery extensive which fact was also made clear in the surveyors report (page 151 to 153) in which it has been stated that "The devastating cyclone which struck Yanam on 06.11.1996 evening and continued till the early hours of 07.11.1996 caused extensive damage to Building, Plant and Machinery of the Insured's factory ..... ". 2.17. In view of this it is submitted that the assessee has satisfied the condition laid down in clause (i) of Sub-section (2) of Section 80IA r.w.s.33B of I.T. Act Condition 2 : 2.18. The second condition is that the industrial undertaking shall not be formed by the transfer of machinery or plant previously used for any purpose and further such value of plant or machinery transferred shall not exceed 20% of the total value of the machinery or plant used in the business. 2.19. The issue involved in the above condition is transfer of machinery or plant to a new business. In the explanation (2), it is stated that the plant or any part thereof previ....
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....e Act as there were no profits after set off of brought forward unabsorbed depreciation. However, while computing Book profits U/s. 115JA it claimed deduction U/s.80IA r.w.s.33B of the Act and returned NIL book profits. 2.29. The assessee submits that as per clause (v) of sub-section (2) of section 115JA of the Act while computing the book profit, the amount of profits derived by an industrial undertaking as referred to in subclause (b) or sub-clause (c) of clause (iv) of sub-section (2) of Section 80IA are to be reduced from the book profit. Therefore while computing book profit u/s.115JA it has claimed deduction U/s.80IA r.w.s.33B of the Act. 2.30. The A.O completed assessment u/s.143(3) r.w.s.254 of the Act on 26-12-2008 determining total income at Rs. 5,23,21,014 (as already determined in consequential order dated 08-01-2003) and book profit at Rs. 5,77,42,084 u/s.115JA. The A.O did not allow deduction u/s.80IA r.w.s.33B. 2.31. Assessment years 1999-00 to 2002-03: The assessee filed returns of Income for these assessment years declaring incomes under normal provisions and also under special provisions of section 115JA/115JB of I.T.Act wherever applica....