TaxTMI 
TaxTMI 
2021 (3) TMI 809
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fact that no new unit/ undertaking was established by the assessee company and that there; was merely an expansion of the existing unit?" 2. " Whether on the facts and in the circumstances of the case, the Learned CIT(A) was justified in allowing deduction u/s.80IB(4) without appreciating the fact that there was no separate identity of the so called new unit since there was no separate workforce distinct labours ? No registration of excrise or VAT, No material procurement, storage or other factors necessary for independent existence of the separateunit?" 3. "Whether on the facts and in the facts and circumstances of the case, the learned CIT(A) was justified in allowing deduction u/s. 80IB(4) without appreciating the fact that the ADIT (Inv.), Jammu, confirmed that there existed only one unit, which has been confirmed in the statement on oath recorded of Shri Sanjeev Uppal, Works Manager of the assessee-company?" 4. "Whether on the facts and in the circumstances of the case, the Learned CIT(A) was justified in allowing deduction u/s.80IB(4) without appreciating the fact that the provisions of section 80IB restricts the deduction for new unit or industria....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2) Only one unit in the name and style of M/s. Eurobond Industries P. Ltd. is being run from EPIP-, Kartholi, Ban Brabrnna, Jammu. 3) There is only one unit that is functioning. 4) Only one set of accounts are maintained. 5) No independent and separate accounts for Unit-1 and Unit-II are maintained as contended by the assessee vide its submission dated 26.12.2011. 6) VAT and Central Excise returns filed only in the name of M/s. Eurobond Industries P. Ltd. 7) Both the units, are produces same products and similar raw material are used. 8) There is only one attendance register is maintained. 9) All the purchases and sales are affected in the name of M/s. Eurobond Industries P. Ltd. On the basis of above facts and findings by ADIT(Inv.),Jammu the Industrial Undertaking unit-II is not self sufficient and independent and does not have its own existence. It is mere installation of additional machinery, which in itself does not suffice to call as "undertaking" which is lacking any of its independent identification number viz, PAN number, excise registration number, P.P. registration number etc. Further t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessing officer referred the alternative plea of the assessee has under:- "Alternatively and without prejudice to the aforesaid submissions even if Unit-II is treated as an expansion of existing unit eligible to 80IB since 2006- 07, then the Unit-1 shall be entitled for deduction u/s 80IB for the entire profit earned by both unit. And under this alternative situation also there will be no change in the taxable income of the company under the normal provisions of the I.T.Act. The company shall be liable for income tax on book profits u/s 115J8 of the I.T.Act, 1961." 8. However he rejected the same by holding as under :- 7.1 The plea of the assessee is not acceptable as assessee itself certified the independent, existence of Unit-II as 'Industrial Undertaking'. Further, he has maintained the same stand through out the assessment proceedings. Even in its reply to show cause and comments on report of ADIT, Jammu, it does not give any justification or reasoning for a new line being an 'Industrial Undertaking'. Assessee has resorted to this alternate plea as his actual plan to unduly claim of deduction u/s. 80IB(4) for Unit-II has been questioned.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the appellant since there is clearly no violation of the statutory requirements for grant of deduction or even an allegation by the AO to that effect, Substantial documentation was already before the AO which would indicate that a massive increase in production had been planned and executed. For instance, the Mumbai based Mid Corporate. Branch of UCO Bank had sanctioned a term loan of Rs. 9.00 crores for the expansion of the existing ACP project at Jammu on 31st January 2008. According to the Schedule of Fixed Assets of Unit-II (which was part of the audited balance sheet as on 31sl March 2009), there was an addition to the gross block of plant & machinery of Rs. 4,70,76,184/- accompanied by an addition to the gross block of electrical installation of Rs. 18,93,735/- both totalling over Rs. 4.89 crores. On 20th October 2008, the Power Development Department of Government of Jammu and Kashmir had accorded sanction for an additional 620 KW over and above 600.4 KW already sanctioned (for Unit-l), thus leading to a total load factor or 1220.4 KW. Coming to the statistics of production, while Unit-I had produced 6,09,671 square metres of ACP during FY 2008-09, after commencing produ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esting that learned CIT(A) has not adjudicated upon the alternative plea of the assessee. 15. We have heard both the parties carefully considered the submissions. We find that assessee has claimed 80IB deduction claiming to have two units. The assessing officer found that there was only one unit. The same was already enjoying deduction under section 80IB(4) . This was the last year of the claim of deduction under section 80IB for that unit. In the current year assessee claimed that it has established another unit named unit-II, and claimed deduction under section 80IB(4) for both the units. 16. The assessing officer found that assessee had only done substantial increase in the capacity of its existing unit and was trying to pass it off as establishment of a second unit. In this regard assessing officer also obtained report from the additional director investigation. The said report duly provided that there was only one unit which was also corroborated by the examination of ADI from the assessee's work's manager. 17. From the assessee's submissions the assessing officer noted that :- 1) it does , not have its own identity in the form of PAN and various regist....