M/s. N Core Cables, Daman v. The Income tax Officer, Ward-4,, Daman

ITA 1487/AHD/2010 | 2005-2006
Pronouncement Date: 31-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 148720514 RSA 2010
Assessee PAN AAEFN7954N
Bench Ahmedabad
Appeal Number ITA 1487/AHD/2010
Duration Of Justice 3 year(s) 5 month(s) 24 day(s)
Appellant M/s. N Core Cables, Daman
Respondent The Income tax Officer, Ward-4,, Daman
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 31-10-2013
Date Of Final Hearing 25-10-2013
Next Hearing Date 25-10-2013
Assessment Year 2005-2006
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH AHMEDABAD .. ! ! ! ! ' #$ BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER APPEAL(S) BY APPELLANT VS. RESPONDENT SL. NO(S) IT(SS)A NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 1487/AHD/2010 2005-06 M/S.N CORE CABLES GALA NO.7 PLOT NO.10 PREMIER INDUSTRIAL AREA KACHIGAM DAMAN PAN:AAEFN 7954N THE ITO VAPI WARD-4 NANI DAMAN UT OF DAMAN & DIU 2. 1364/AHD/2010 2005-06 REVENUE ASSESSEE 3. 1488/AHD/2010 2006-07 ASSESSEE REVENUE 4. 225/AHD/2013 2006-07 REVENUE ASSESSEE ASSESSEE BY : SHRI M.K.PATEL A.R. REVENUE BY : SHRI D.K.MISHRA SR.D.R. ' % & $' / / / / DATE OF HEARING : 25/10/2013 )*+ & $' / DATE OF PRONOUNCEMENT : 31/10/2013 / O R D E R PER SHRI KUL BHARAT JUDICIAL MEMBER : THESE CROSS-APPEALS BY THE ASSESSEE AND THE REVEN UE ARE DIRECTED AGAINST THE SEPARATE TWO ORDERS OF THE LD.COMMISSIO NER OF INCOME TAX(APPEALS)-VALSAD (CIT(A) FOR SHORT) BOTH IDENTICALLY DATED 18/11/2009 PERTAINING TO ASSESSMENT YEARS (AYS)2005 -06 & 2006-07. SINCE THE APPEALS PERTAIN TO THE SAME ASSESSEE THE SE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 2 - 2. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.1487/AHD/2010 FOR AY 2005-06. THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- 01. THE ORDER OF ASSESSMENT IS CONTRARY TO THE FAC TS AND PREJUDICIAL TO THE APPELLANT. 02. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW THE DISALLOWANCES MADE BY THE LEARNED ASSESSIN G OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CONTRARY TO LAW AND BASED ON ERRONEOU S UNDERTAKING OF THE FACTS. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN TREATING THE INCOME EARNED BY THE APPELLANT AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S.80IB. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CON TRARY TO THE PROVISIONS OF SECTION 80IB ON A PLAIN READING A ND LITERAL INTERPRETATION OF THE LAW AND HENCE DESERVES TO BE DELETED. 04. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER OF NOT GRANTING DEDUCTION TO THE APPELLANT U/S.80IB OF THE INCOME TAX ACT. 05. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER TO THE TUNE OF RS.14 00 0 00/- OUT OF UNSECURED LOAN TAKEN FROM M/S.NATIONAL MINERALS AND AKSHAT LEASING & HIRE PURCHASE PRIVATE LIMITED TREATING T HE SAME AS UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX AC T 1961. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) IS BASED ON PRESUMPTIONS AND SURMISES AND IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DESERVES TO BE DE LETED. 06. THE APPELLANT CRAVES TO ADD AMEND MODIFY OR A LTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE PROCEED INGS. 07. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE A LLOWED IN TOTO. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 3 - 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.144 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED THEREBY THE AO MADE DISALLOWANCES OF THE CLAIM MADE U/S.80-IB DISALLOWANCE U/S.40A(IA) UNSECURED LOANS AND INTRODUCTION OF CA PITAL. AGAINST THIS THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL. 3. BOTH THE ASSESSEE AND REVENUE HAS FILED CROSS-AP PEALS AGAINST THE ORDER OF THE LD.CIT(A). LD.COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE GROUND NOS.1&2 ARE GENERAL IN NATURE THEREFORE THE SAME ARE NOT PRESSED. THE LD.SR.DR HAS NOT OBJECTED TO THE SUBM ISSION OF THE ASSESSEE THEREFORE ON THE BASIS OF THE SUBMISSION MADE BY TH E LD.COUNSEL FOR THE ASSESSEE GROUND NOS.1 & 2 ARE DISMISSED AS NOT PRES SED. 4. GROUND NOS.3 & 4 ARE AGAINST THE DISALLOWANCE OF CLAIM MADE U/S.80IB OF THE ACT. LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT IN RESPECT FO THE Y 2004-05 THE MATTER RAISED UPTO THE STAGE OF THE TRIBUNAL AND THE HONBLE TRIBUNAL IN ITA NO.3207/AHD/2007 HAS RESTOR ED THIS ISSUE TO THE FILE OF LD.CIT(A). IT IS SUBMITTED BY THE LD.COUNS EL FOR THE ASSESSEE THAT LD.CIT(A) HAS NOT DECIDED THIS ISSUE. THIS FACT IS NOT CONTROVERTED BY THE LD.SR.DR. 5. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS ISSUED BY THE AUTHORITIES BELOW. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 4 - WE FIND THAT THE HONBLE COORDINATE BENCH (ITAT C BENCH AHMEDABAD) IN ITA NO.3207/AHD/2007 DATED 12/11/2010 IN ASSESSEES OWN CASE VIDE PARAGRAPH NO.6 OF ITS ORDER HAS HELD AS UNDER:- 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE LD.CIT(A) UPHELD THE FINDINGS OF THE AO SINCE THE ASSESSEE DI D NOT FURNISH ANY DETAILS OF DIESEL PURCHASED FOR RUNNING GENERATOR O R ANY OTHER EVIDENCE THAT A PORTION OF GOODS WERE MANUFACTURED IN THE AS SESSEES OWN FACILITY NOR ANY EVIDENCE THAT GOODS MANUFACTURED IN THE FAC ILITY OF M/S.NAGARWALA CHEMICAL INDUSTRIES WERE UNDER THE SU PERVISION OF THE PARTNER USING HIS TECHNICAL KNOWHOW. THE LD.AR APP EARING BEFORE US NOW RAISED MODIFIED AND ADDITIONAL GROUNDS CONTEND ING THAT PVC/TPR INSULATED WIRES AND CABLES OF THE VALUE OF RS.19 12 835/- WERE PRODUCED IN THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE USING THEIR OWN MACHINERIES AND POWER GENERATED FROM DIESEL GENERAT OR AND THAT EXPENSES FOR DIESEL WERE DEBITED UNDER THE HEAD REP AIR AND MAINTENANCE. IT WAS POINTED OUT THAT GOODS MANUFAC TURED THROUGH JOB WORK HAVE INDEED BEEN SOLD DURING THE YEAR AND NOTH ING WAS AVAILABLE IN THE CLOSING STOCK. EVEN THOUGH THE AO AND THE L D.CIT(A) HAVE CONCLUDED THAT THE ASSESSEE DID NOT UNDERTAKE ANY MANUFACTURING OR PRODUCTION ACTIVITIES IN ITS INDUSTRIAL UNDERTAKIN G THEY DID NOT DOUBT THE PURCHASE OF RAW MATERIAL AND NOWHERE CONCLUDED THAT THE ENTIRE RAW MATERIAL PURCHASED BY THE ASSESSEE WAS CONSUMED IN JOB WORK NOR EVEN DOUBTED THE WAGES DEBITED TO THE ACCOUNTS. RA THER THE AO HAS ALLOWED EVEN DEPRECIATION ON VARIOUS ASSETS INCLUDI NG PLANT AND MACHINERY WHILE DETERMINING TOTAL INCOME AND DID NT O DOUBT THE GENUINENESS OF PURCHASE OF RAW MATERIAL OR SALE OF GOODS CLAIMED TO HAVE BEEN MANUFACTURED BY THE ASSESSEE. IN THESE C IRCUMSTANCES ESPECIALLY WHEN WHEN COMPLETE FACTS ARE NOT EVIDEN T FROM THE RELEVANT ORDERS WHILE THE LEARNED CIT(A) HAVE NOT RECORDED A NY FINDINGS ON THE SPECIFIC ISSUES HOW RAISED IN THE ADDITIONAL GROUND S RAISED BEFORE US WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE TH E IMPUGNED ORDER OF THE LD.CIT(A) AND RESTORE THE MATTER TO HIS FILE FO R DECIDING THE CLAIM FOR DEDUCTION U/S.80IB OF THE ACT AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF OUR AFORESAID OBSERVATIONS AND OF COURSE AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF HONBLE MP HIGH COURT IN CIT VS. TOLLAR AM HASSOMAL 298 ITR 22 (MP). NEEDLESS TO SAY THAT THE LD.CIT(A) MA Y HAVE ANY INDEPENDENT INQUIRIES MADE IN ORDER TO ASCERTAIN TH E CORRECT FACTS IF HE ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 5 - FEELS NECESSARY. WITH THESE OBSERVATIONS GROUND N O.1 IN THE APPEAL IS DISPOSED OF. 5.1. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE THEREFORE THIS ISSUE IN THIS YEAR ALS O IS RESTORED TO THE FILE OF LD.CIT(A) TO DECIDE IT AFRESH AFTER GIVING SUFFICIE NT OPPORTUNITIES TO THE CONCERNED PARTIES. GROUND NOS.3 & 4 ARE ALLOWED BU T FOR STATISTICAL PURPOSES ONLY. 6. GROUND NO.5 IS AGAINST CONFIRMATION OF ADDITION MADE BY THE AO TO THE TUNE OF RS.14 LACS OUT OF UNSECURED LOAN TAK EN FROM M/S.NATIONAL MINERALS AND M/S.AKSHAT LEASING & HIRE PURCHASE PVT .LTD. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RELEVANT DETAIL S WERE SUBMITTED BEFORE THE LD.CIT(A). HE SUBMITTED THAT COPIES OF CONFIRM ATION OF THE CONCERNED PARTIES ARE ENCLOSED WITH THE PAPER-BOOK AT PAGE NOS.164 TO 166. ON THE CONTRARY LD.SR.DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW ON THIS ISSUE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD.CIT(A) IN HIS ORDER HAS DECIDED THIS ISSUE VIDE PARAGRAPH NOS.7.2 & 7.3 THE SAME ARE REPRODUCED FOR THE SAKE OF CLARIT Y. 7.2. FINDINGS : I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND HAVE GONE THROUGH THE REMAND REPORT O F THE AO. THE APPELLANT SUBMITTED BEFORE ME THAT ITS THEN A.R.HA S BEEN HOSPITALIZED OWING TO A SEVERE HEART ATTACK AND HE COULD NOT ATT END BEFORE THE A.O. IN RESPONSE TO SEVERAL NOTICES AND SHOW CAUSE NOTIC ES ISSUED. I AM INCLINE TO AGREE WITH THE APPELLANT THAT THERE ARE GENUINE CAUSES WHICH PREVENTED IT TO COMPLY WITH VARIOUS NOTICES/LETTERS ISSUED BY THE A.O. IN ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 6 - VIEW OF NATURAL JUSTICE I AM CONSIDERING AND ADMITT ING THE VARIOUS EVIDENCES SUBMITTED BY THE APPELLANT FIRM FOR THE P URPOSE OF ADJUDICATING THIS APPEAL. 7.3. THE APPELLANT HAS SUBMITTED BEFORE ME THE CONF IRMATION LETTERS FROM WHOM THE UNSECURED LOANS WERE TAKEN ALONG WITH THEIR PAN AND COPY OF INCOME TAX RETURN. BEFORE ME THE LD.AR CON TENDED THAT UNSECURED LOANS FROM NATIONAL MINERALS AND AKSHAT LEASING AND HIRE PURCHASE PVT.LTD. WERE SQUARED UP DURING THE YEAR U NDER CONSIDERATION. THE AMOUNT INVOLVED IS RS.14 00 000 /- (6 00 000 + 8 00 000). I HAVE CONSIDERED THE SUBMISSION MADE B Y THE LD.AR THAT THE UNSECURED LOAN FROM THE DOCTOR ALKA GUPTA SUNDERLA L AGARWAL & SONS HUF AND SURESH AGARWAL & SONS HUF APPEARED TO BE GE NUINE AND THEREFORE I DIRECT THE AO TO DELTE FROM THE ADDITIO N MADE FROM THE ASSESSMENT ORDER MADE. HOWEVER WITH REGARD TO THE LOAN OF RS.14 00 000/- FROM NATIONAL MINERALS AND AKSHAT L EASING AND HIRE PURCHASE PVT.LTD. THE LOAN IS NOT GENUINE BECAUSE OF THE FACT THAT THE APPELLANT HAS HIMSELF SAID THAT THE LOAN HAS BEEN C LEARED DURING THE YEAR UNDER CONSIDERATION. THE LD.AR ALSO FAILED TO PUT UP DETAILS OF CONFIRMATION AND CREDITWORTHINESS OF THESE PARTIES. IN VIEW OF THIS THE AO IS DIRECTED TO DELETE ADDITION OF RS.11 35 000/- . ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED PARTLY. 7.1. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING THAT THE LD.AR FAILED TO PUT UP THE DETAILS OF CONFIRMATION AND CR EDITWORTHINESS OF THESE PARTIES HOWEVER THE CONTENTION OF LD.COUNSEL FOR THE ASSESSEE IS THAT ALL THE CONFIRMATIONS WERE DULY PLACED ON RECORD OF THE LD.CIT(A). HE HAS DRAWN OUR ATTENTION TOWARDS PAGE NOS.164 TO 166 OF THE PAPER-BOOK. AFTER CONSIDERING ALL ASPECTS OF THE MATTER WE FIN D THAT THE ORDER OF THE L;D.CIT(A) IS CRYPTIC AND THEREFORE IN THE INTERE ST OF JUSTICE THIS ISSUE IS RESTORED BACK TO THE FILE OF LD.CIT(A) TO DECIDE IT AFRESH AFTER VERIFYING THE DETAILS AS SUBMITTED BY THE ASSESSEE. NEEDLESS TO SAY THAT LD.CIT(A) WILL GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.5 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 7 - 8. THE OTHER GROUNDS ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE FOR AY 2005-06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.1364 /AHD/2010 FOR AY 2005-06. THE REVENUE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL. (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF U/S.40A(IA) RS.5 43 619/- AS THE ASSESSE E HAS NOT SUBMITTED THE DOCUMENTARY EVIDENCE OF TDS. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF UNSECURED LOANS RS.11 35 000/- AS THE AS SESSEE HAS NOT PRODUCED THE CONFIRMATIONS REGARDING IDENTITY A ND CREDITWORTHINESS OF THE LENDER AND GENUINENESS OF T HE TRANSACTIONS. (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF CAPITAL INTRODUCED BY THE PARTNERS OF RS .3 35 000/- AS THE ASSESSEE HAS NOT PRODUCED THE SOURCES OF CAPITA L INTRODUCED BY THE PARTNERS AND DOCUMENTARY EVIDENCE. (4) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . (5) THE APPELLANT CRAVES TO ADD ALTER OR AMEND ANY GRO UNDS OF APPEAL. 10.1. THE FIRST GROUND IS AGAINST DELETION OF ADDIT ION MADE U/S.40A(IA) OF THE ACT. LD.SR.DR SUPPORTED THE ORDER OF THE AO W HEREAS LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 8 - WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE I N PARAGRAPH NO.6.1 OF HIS ORDER AND HAS GIVEN A FINDING ON FACT THAT THE APPELLANT HAD DEDUCTED TDS ON COMMISSION AND INTEREST EXPENSES AND THE PAY MENT HAS BEEN MADE BEFORE THE DUE DATE. THE LD.CIT(A) HAS ALSO G IVEN A FINDING THAT AS REGARDS FREIGHT AND OCTROI IT IS SEEN FROM THE LEDG ER ACCOUNT PRODUCED BEFORE HIM THAT THE SUM PAID ON EACH OCCASION IS NO T EXCEEDING RS.20 000/- AND NOT LIABLE FOR DEDUCTION OF TDS. T HIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANYTHING ON RECORD THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD.CIT(A) THE SAME IS HEREBY UPHELD. GROUND IS DISMISSED. 12. GROUND NO.2 IS AGAINST DELETION OF ADDITION MAD E ON ACCOUNT OF UNSECURED LOANS OF RS.11 35 000/-. 12.1 THE LD.SR.DR SUBMITTED THAT THE ORDER OF THE L D.CIT(A) IS CRYPTIC. ON THE CONTRARY LD.COUNSEL FOR THE ASSESSEE SUPPOR TED THE ORDER OF THE LD.CIT(A). 13. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) WITH REGARD TO THE UNSECURED LOA NS FROM DR.ALKA GUPTA NATIONAL MINERALS SL AGARWAL & SONS HUF SU RESH AGARWAL & SONS HUF AND AKSHAT LEASING & HIRE PURCHASE PVT.LTD . HAS OBSERVED THAT THESE LOANS APPEARED TO BE GENUINE WITHOUT GIV ING ANY SPECIFIC REASONING FOR ARRIVING AT SUCH CONCLUSION. THEREFO RE IN OUR CONSIDERED ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 9 - VIEW THE ORDER OF LD.CIT(A) IS NOT A SPEAKING ORDE R THE SAME IS HEREBY SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE FIL E OF LD.CIT(A) TO DECIDE IT AFRESH. GROUND IS ALLOWED FOR STATISTICAL PURPOSES . 14. GROUND NO.3 IS AGAINST DELETION OF ADDITION MAD E ON ACCOUNT OF CAPITAL INTRODUCED BY THE PARTNERS OF RS.3 35 000/- . 15. LD.SR.DR SUPPORTED THE ORDER OF THE AO WHEREAS LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 16. WE HAVE CONSIDERED THE RIVAL CONTENTIONS PERUS ED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE APPELLANT SUBMITTED BEFORE HIM EVIDENCES LIKE COPY OF RECEIPT OF INCOME-TAX OF ALL THE PARTNERS ALONG WITH STATEMENT OF TOTAL INCOME A ND COPY OF ACCOUNTS OF THE PARTNERS AS APPEARING IN THE BOOKS OF ACCOUNT O F THE APPELLANT FIRM IN SUPPORT OF CAPITAL INTRODUCED BY THE APPELLANT WHIC H HAS BEEN VERIFIED. THE CONTENTION OF LD.COUNSEL FOR THE ASSESSEE IS TH AT THE MONEY WAS TRANSFERRED BY WAY OF THE BANKING CHANNEL. AFTER C ONSIDERING ALL ASPECTS OF THE MATTER WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) THE SAME IS HEREBY UPHELD. GROUND IS REJECTED. 17. GROUND NOS.4 & 5 ARE GENERAL IN NATURE WHICH R EQUIRE NO INDEPENDENT ADJUDICATION. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 10 - 18. IN THE RESULT REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. 19. NOW WE TAKE UP THE ASSESSEES APPEAL IN ITA NO .1488/AHD/2010 FOR AY 2006-07. THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL. 01. THE ORDER OF ASSESSMENT IS CONTRARY TO THE FACT S AND PREJUDICIAL TO THE APPELLANT. 2. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES O F THE CASE AND LAW THE DISALLOWANCES MADE BY THE LEARNED ASSESSIN G OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CONTRARY TO LAW AND BASED ON ERRONEOU S UNDERTAKING OF THE FACTS. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND INTERPRETATION OF LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN TREATING THE INCOME EARNED BY THE APPELLANT AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S.80IB. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CON TRARY TO THE PROVISIONS OF SECTION 80IB ON A PLAIN READING A ND LITERAL INTERPRETATION OF THE LAW AND HENCE DESERVES TO BE DELETED. 04. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER OF NOT GRANTING DEDUCTION TO THE APPELLANT U/S.80IB OF THE INCOME TAX ACT. 06. THE APPELLANT CRAVES TO ADD AMEND MODIFY OR A LTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE PROCEED INGS. 07. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE A LLOWED IN TOTO. ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 11 - 19.1. IN THIS APPEAL FACTS ARE IDENTICAL AS WERE IN ASSESSEES OWN CASE IN ITA NO.1467/AHD/2010 FOR AY 2005-06(SUPRA). GROUND NOS.1 & 2 ARE NOT PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE THE REFORE THE SAME ARE DISMISSED AS NOT PRESSED. 20. GROUND NOS.3 & 4 ARE AGAINST THE CONFIRMATION O F DISALLOWANCE OF DEDUCTION MADE U/S.80IB OF THE ACT. 20.1. AFTER HEARING BOTH THE SIDES WE FIND THAT TH E FACTS ARE IDENTICAL AS WERE IN ASSESSEES OWN CASE IN ITA NO.1467/AHD/2010 FOR AY 2005- 06(SUPRA) WHEREIN WE HAVE RESTORED THE MATTER BACK TO THE FILE OF LD.CIT(A) FOLLOWING THE DECISION OF HONBLE COORDIN ATE BENCH RENDERED IN ASSESSEES OWN CASE IN ITA NO.3207/AHD/2007 FOR AY 2004-05. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTA NCES THEREFORE THIS YEAR ALSO WE RESTORE THIS ISSUE BACK TO THE FILE O F LD.CIT(A) FOR DECISION AFRESH. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOS ES. 21. OTHER GROUNDS ARE GENERAL IN NATURE WHICH REQUI RE NO INDEPENDENT ADJUDICATION. 22. IN THE RESULT ASSESSEES APPEAL FOR AY 2006-07 IN ITA NO.1488/AHD/2010 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 23. LASTLY WE TAKE UP THE REVENUES APPEAL IN ITA N O.225/AHD/2013 FOR AY 2006-07 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED:- ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 12 - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.7 85 600/- LEVIED BY THE AO U/S.271(1)(C) OF THE IT ACT. 2. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THAT THE ORDER OF THE AO BE RESTORED. 3. THE APPELLANT CRAVES TO ADD MODIFY OR ALTER ANY GROUNDS DURING THE COURSE OF APPEAL PROCEEDINGS. 23.1. IN THIS APPEAL REVENUE IS AGGRIEVED BY THE O RDER OF LD.CIT(A) FOR DELETING THE PENALTY U/S.271(1)(C) OF THE ACT. 24. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CLAIM OF U/S.80IB OF THE ACT BEING ILLEGAL HAS BEEN RIGHTLY MADE AND HE SUBMITTED THAT UNDER THE IDENTICAL FACTS THE HONBLE COORDIN ATE BENCH (ITAT D BENCH AHMEDABAD) IN ASSESSEES OWN CASE PERTAINING TO AY 2004-05 IN ITA NO.4144/AHD/2008 FOR AY 2004-05 VIDE ORDER DATE D 18/03/2011 HAS DELETED THE PENALTY. ON THE CONTRARY LD.SR.D R STRONGLY SUPPORTED THE ORDER OF THE AO. 24.1. WE HAVE CONSIDERED THE RIVAL CONTENTIONS PER USED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE HONBLE COORDINATE BENCH IN ITA NO .4144/AHD/2008 FOR AY 2004-05(SUPRA) WHILE DECIDING THIS ISSUE HAS HELD AS UNDER:- 2. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESP ONDING PENALTY ORDER PASSED UNDER SECTION 271(1)(C) DATED 31-3-2008 AND THE ASSESSMENT ORDER PASSED U/S.143(3) DATED 29-12-2006 WERE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF INSULATED CABLE WITH PVC TAPE AND PLASTIC ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 13 - GRANULES ETC. IT WAS NOTICED BY THE ASSESSING OFFI CER THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S.80IB IN RESPECT OF JOB WO RK FROM M/S.NANGALWALA CHEMICAL INDUSTRIES. THIS ISSUE ABO UT THE ADMISSIBILITY OF DEDUCTION U/S.80IB HAD GONE UP TO THE TRIBUNAL AND RESPECTED CO-ORDINATE BENCH-C VIDE ITA NO.3207/AHD/ 2007 ASSESSMENT YEAR 2004-05 ORDER DATED 12-11-2010 HAS RESTORED IT BACK TO THE FILE OF THE CIT(A) WITH CERTAIN DIRECTIONS. IN VIEW OF THI S THE PRELIMINARY ARGUMENT OF LD.AUTHORIZED REPRESENTATIVE SHRI M.K.P ATEL IS THAT THE ISSUE BEING DEBATABLE THEREFORE OUT OF THE AMBITS OF LEVY OF PENALTY. IT HAS ALSO BEEN ARGUED THAT ALL THE FACTS IN RELATION TO CLAIM OF DEDUCTION U/S.80I WERE DULY PLACED BEFORE THE ASSESSING OFFIC ER HOWEVER DUE TO DIFFERENCE OF OPINION THE EXPLANATION OF THE ASSESS EE WAS REJECTED. ON A CAREFUL PERUSAL IT IS EVIDENT THAT THERE IS NO FIND ING OF FACT IN THE ASSESSMENT ORDER THAT EITHER THE CLAIM WAS FOUND BO GUS OR NON-GENUINE. IT IS ALSO NOT THE CASE OF THE REVENUE WHILE LEVY ING THE CONCEALMENT PENALTY THAT THERE WAS EITHER A WRONG STATEMENT OR A FALSE MATERIAL WAS FURNISHED ALONG WITH THE RETURN IN RESPECT OF THE I MPUGNED CLAIM. RATHER IT IS A CASE WHERE A DEDUCTION WAS DISALLOWE D DUE TO DIFFERENCE OF OPINION. UNDER THESE CIRCUMSTANCES IN OUR CONS IDERED OPINION THE ISSUE OF CONCEALMENT NOW STOOD DIRECTLY COVERED BY A LATEST DECISION OF RELIANCE PETROPRODUCTS LTD. 322 ITR 158 WHEREIN TH E OBSERVATION OF THE HONBLE COURT WAS AS UNDER:- WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. DECISION OF THE GUJARAT HIGH COURT AF FIRMED. RESPECTFULLY FOLLOWING THIS DECISION WE HEREBY CONF IRM THE FINDING OF THE LD.CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 24.2. SINCE THERE IS NO CHANGE IN THE FACTS AND CIR CUMSTANCES OF THE CASE IN THIS YEAR ALSO RESPECTFULLY FOLLOWING THE AFORE SAID DECISION OF ITA NOS.1487&1364 /AHD/10(CROSS-APPEALS) (N CORE CABLES VS. ITO) AND ITA NOS.1488/A/10 (BY ASSESSEE) & 225/AHD/2013 (BY REVENUE) ASST.YEARS 2005-06 & 2006-07 - 14 - COORDINATE BENCH WE HEREBY CONFIRM THE FINDING OF THE LD.CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. REVENUES APPE AL IS DISMISSED. 25. WE SUMMARIZE THE RESULT AS UNDER:- (1) ASSESSEES APPEAL FOR AY 2005-06 IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. (2) REVENUES APPEAL FOR AY 2005-06 IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. (3) ASSESSEES APPEAL FOR AY 2006-07 IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. (4) REVENUES APPEAL FOR AY 2006-07 IS DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 10 /2013 /'.. .../ T.C. NAIR SR. PS & 0$1 21+$ & 0$1 21+$ & 0$1 21+$ & 0$1 21+$/ COPY OF THE ORDER FORWARDED TO : 1. 34 / THE APPELLANT 2. 0534 / THE RESPONDENT. 3. !! $ '6 / CONCERNED CIT 4. '6() / THE CIT(A)-VALSAD 5. 1 #7 0$ / DR ITAT AHMEDABAD 6. 789 :% / GUARD FILE. ' ' ' ' / BY ORDER 51$ 0$ //TRUE COPY// ; ;; ;/ // / !< !< !< !< ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD