TaxTMI 
TaxTMI 
2022 (7) TMI 1617
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....he Assessment Order passed on 27.12.2017 appeared to be erroneous in so far it was prejudicial to the interest of the Revenue and he observed following reasons: - "1. Survey action u/s 133A of the Act was conducted in this case by the DDIT (Inv) Mumbai on 02.01.2015, wherein violations of conditions laid down within the provisions of section 80IA/80IC of the Act was found regarding claim made by the assessee. Evidences were found that there was interunit purchase/ transfer of pre used plant and machinery and its value was more than 20% of the total value of plant & machinery, which is in violation of explanation 2 to section 80IB/80IC of the I.T. Act, 1961. This was also admitted by the Director of the assessee company in his statement made during the survey action. 1.1 During the year under consideration the assessee has claimed deduction u/s 80IC amounting to Rs. 1,56,83,226/- in respect of Pantnagar Unit-1. In Assessment orders passed u/s 143(3) in the assessee companies case for AY 2013-14,2014-15 and 2016-17, disallowances/ additions have been made within the provisions of section 80IB/80IC of the I.T.Act, 1961. Even though appeals filed by the assessee on th....
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....sed u/s 143(3) dated 27.12.2017. 4. During the course of survey proceedings, it was found that the assessee company had taken accommodation entries from M/sShreehi Enterprises, M/s Modern Traders, M/s deep Enterprises and M/s Radhika Enterprises. Shri Anil Jain, director of the assessee company had agreed for disallowance of Bogus purchases in their statement recorded under oath. For A. Y. 2013 14, 2014-15 and 2016-17, in the assessee's case the purchases made from the above entities were disallowed in the assessment orders passed u/s 143(3) pf the Act dated 27.12.2017. 4.1 During the course of assessment proceedings for AY 2015-16, details should have been obtained in respect of purchases made from the above entities, which was not done so and the issue of bogus purchases booked by the assessee during the year under consideration remained be examined in the assessment order passed u/s 143(3) of the Act dated 27.12.2017." 3. Accordingly, the notice u/s. 263 of the Act was issued and served on the assessee, in response assessee filed a detailed letter dated 19.02.2020. After considering the detailed submissions which is placed on record in Page No. 3 to 9 of....
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....essee which is placed on record and he brought to our notice findings of the ITAT in the above said order in the form of a chart. 6. It is submitted before us that exactly similar issues were raised by the Ld. Pr.CIT in the current revision proceedings. He submitted that the Ld. Pr.CIT has passed the impugned order with the same issues and facts in the previous Assessment Years. Therefore, these issues are already settled in favour of the assessee. He prayed that the order passed by the Ld. Pr.CIT may be set-aside. 7. On the other hand, Ld. DR submitted that ITAT has considered all the issues in the previous Assessment Years, however, he submitted that the issue relating to bogus purchases are factual matters and he agreed that other issues are already considered by ITAT. Therefore, he submitted that Para No. 14 and 15 of the Tribunal order may be read together. 8. Considered the rival submissions and material placed on record, we observe that the issues raised by the Ld. Pr.CIT in revision proceedings are exactly similar to the issues raised in A.Ys. 2008-09 to 2014-15 in appeal before Coordinate Bench and the Coordinate Bench has already considered all the issues and dec....
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....n 80IC of the Act in respect of Pantnagar Unit No.1 can not be disallowed as the value of pre-used machinery is less than 20% of the total machinery. The assessee also submitted the list of plant & machinery purchased by the assessee from various parties for Pantnagar Unit No.1 for the instant year and explained that the total WDV of machinery purchased was amounting to Rs.8,64,16,517/- in Pantnagar Unit No.1 whereas the used machinery was nil. The assessee submitted the copies of bills of purchases in respect of machinery purchased and contended that there was no violation of provisions of 80IB/80IC of the Act and therefore, the assessee is eligible for deduction under section 80IB/section 80IC of the Act. On the statement of Shri Anil Jain, director of the company, the the ld AR submitted that he has agreed to withdraw the deduction under section 80IB/section 80IC as per the rules and regulations of the Act. Since the assessee has submitted the bills and vouchers pertaining to plant & machinery and also submitted that pre-used plant & machinery was nil, therefore, assessee is eligible for deduction under section 80IB/80IC of the Act. However, the AO rejected the contentions and s....
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....on 80IC. After hearing both the parties and perusing the material on record, we find that the AO has not brought anything on record to corroborate that statement as recorded during the course of survey whereas the assessee has filed all purchase bills, total value of plant & machinery and also the fact that there was no pre used plant & machinery transferred from other units to Pantnagar Unit No.1 and therefore there is a merit in the contention of the assessee that the conditions as envisaged by section 80IB/section 80IC are duly satisfied and there is no violation of the same. We do agree with the finding of the AO that Shri Anil Jain during the course of survey has agreed to withdraw his claim but as submitted during the course of assessment that withdrawal was made subject to the rules and regulations and terms & conditions as contained in Income Tax Act. We note that Ld. CIT(A) after taking into consideration of all these facts and evidences has allowed the claim of the assessee under section 80IB/section 80IC whereas the AO has relied heavily on the finding of survey team without giving any finding on the various evidences filed during the course of assessment proceedings by ....
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.... form 10CCB was found as nil whereas physical inventory during survey showed value of machinery of Rs.1,93,23,298/- which was treated as unexplained by the AO. We find reasoning in the contentions of the assessee that form 10CCB is filed in respect of those units for which the profit is claimed under section 80IC/section 80IB of the Act and not the other units where no such claim was made. In unit No.2 the assessee has not claimed any deduction under section 80IC/section 80IB and therefore value of machinery was reported as nil in Form 10CCB. However, the unit was functional and operational and there was plant & machinery. So upon the physical inventory being taken by the survey team, the plant & machinery was bound to be there which was used in the manufacturing process of the unit. The Ld. CIT(A) has given a correct findings and passed reasoned order by deleting the addition by holding that the assessee has not doubted the genuineness of the books of accounts or rejected the books of accounts under section 145(3) of the Act. The Ld. CIT(A) also recorded that purported statements recorded during the course of survey which were not backed up by any corroborative evidences. In view ....
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....dation entries from various parties as bogus purchases, the Coordinate Bench considered the similar issue for the Assessment Year 2008-09 and held as under: - "15. After hearing the rival parties and perusing the material on record, we find that in the statements recorded during the course of survey Shri Anil Jain, director and Mr. Bharat Vargheria, Director, Finance of the said company offered the said purchases as additional income in the hands of the assessee, however, this was not offered in the return of income on the ground that the said purchases were not bogus and in fact represented the actual purchases made from these parties. The Ld. D.R. strongly argued before us that this is a case of manufacturing company and therefore the rate of GP can not be applied as this can be done where goods were purchased and sold in the normal course of business of trading. Therefore, the order of Ld. CIT(A) is wrong whereas the Ld. A.R., on the other hand, strongly defended the order of Ld. CIT(A) as the same is a reasoned order passed after following the decision of Hon'ble Gujarat High Court in the case of Simit P. Sheth (supra). After considering all these facts and circumstanc....