TaxTMI 
TaxTMI 
2021 (2) TMI 849
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....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 course of hearing that this is second round of proceedings between the pa....
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....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 production capacity from 40,000 MTs to 1,60,000 Mts. Per annum. (paper book page No.6). 3. Month wise, line wise producti....
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....l 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 replacements to Kiln I commenced on 12.11.1996 and completed by 20.12.1996. The factory was restarted with Kilns lion 20.12.1996. The production on 20.12.1996 was 2512 sq. mtrs. weighing 42.70 MT. Repairs to Kiln I was completed by 22.12....
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....tion 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 06.11.1996 and resulted in discontinuance of business. 2.9. The assessee submits that the New India Assurance Company ltd., has assessed the loss of damaged finished goods of tiles lying in the factory at Rs. 55,18,136/- vide their letter dated 31.01.1997. Therefore the assessee submit....
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....a: 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 notification in, the official Gazette, specify with reference to any particular industrial undertaking: (b) In the case or an industrial undertaking located in an industrially backward state specified in the Eighth Schedule or set up in any part of India for the generation, or generation and distribution, of power, it begins to manufacture or produce articles or things or t....
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....ndertaking 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 year in which the business is so re-established, reconstructed or revived, be allowed a deduction of a sum by way of rehabilitation allowance equivalent to sixty percent of the amount of the deduction allowable to him under clause (iii) of sub-section (1) of section 32 in respect of the building, machinery, plant or furniture so damaged destroyed: Condition 1: 2.13. As could be seen from sub-section (2) of section 80IA, for the purpose of claiming dedu....
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........ ". 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 previously used for any purpose is transferred to a new business and the total value of the plant and machinery or part thereof does not exceed 20% of the total value of the plant and machinery used in the business to fulfill the above conditions. 2.20. In our case there is no transfer of plant and machinery previously used since the machinery and Industrial undertaking remains the same and the premises also remains the same. Condition 3: 2.21. Third condition is that the industrial undertaking manufactures or produces any ....
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....laimed 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 applicable and claimed deduction U/s 801A/IB r.w.s.33B of I.T.Act as it is eligible to claim such deduction as stated above. However, while completing assessments, deduction u/ /s.80IA r.w.s.33B was not allowed. 3.1 Aggrieved by the assessments, the assessee filed appeals before the C.I.T(Appeals) who dismissed the appeals. Learned C.I.T(A) has not appreciated the fact that there was complete stoppage of production in units I and II from 06-11-1996 to 20/22-12-1996 and unit III was not operative till 15-04-1997. In this connection the assessee submits that it has obtained a confirmation from the authorities of Customs and Cen....