DCIT 9(1), MUMBAI v. EUROBOND INDUSTRIES P.LTD, MUMBAI

ITA 6611/MUM/2014 | 2009-2010
Pronouncement Date: 02-03-2021 | Result: Allowed

Appeal Details

RSA Number 661119914 RSA 2014
Assessee PAN AABCE3477F
Bench Mumbai
Appeal Number ITA 6611/MUM/2014
Duration Of Justice 6 year(s) 4 month(s) 1 day(s)
Appellant DCIT 9(1), MUMBAI
Respondent EUROBOND INDUSTRIES P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2021
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 02-03-2021
Last Hearing Date 31-01-2019
First Hearing Date 22-10-2020
Assessment Year 2009-2010
Appeal Filed On 31-10-2014
Judgment Text
THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 6611/MUM/2014 (ASSESSMENT YEAR 2009-10) I.T.A. NO. 1471/MUM/2016 (ASSESSMENT YEAR 2012-13 ) DCIT-9(1) ROOM NO. 223 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD CHURCHGATE MUMBAI - 400 020. VS. M/S. EUROBOND INDUSTRIES PVT. LTD. GALA & SHETHIA ENTERPRISES PLOT NO. C-5 ST. 11 MAROL INDUSTRIAL AREA ANDHERI-E MUMBAI - 400 093. (APPELLANT) (RESPONDENT) I.T.A. NO. 4071/MUM/2016 (ASSESSMENT YEAR 2010-11) C.O. NO. 156/MUM/2016 (ASSESSMENT YEA R 2009-10) M/S. EUROBOND INDUSTRIES PVT. LTD. GALA & SHETHIA ENTERPRISES PLOT NO. C-5 ROAD NO. 11 MIDC NR. ZENITH HOUSE ANDHERI-E MUMBAI - 400 093. VS. DCIT-9(1) ROOM NO. 665A 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD CHURCHGATE MUMBAI-400 020. (APPELLANT) (RESPONDENT) PAN : AABCE3477F ASSESSEE BY SHRI NIRMIT MEHTA DEPARTMENT BY SHRI VIJAY KUMAR MEMON DATE OF HEARING 04.01.2021 DATE OF PRONOUNCEMENT 02.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE REVENUE AND ASSESSEE AND T HE CROSS OBJECTION BY THE ASSESSEE ARISING OUT OF THE RESPECTIVE ORDER S OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEARNED CIT(A)]. 2. SINCE THE ISSUE IS COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOGETHER THESE ARE BEING DISPOSED OF BY THIS COMMO N ORDER. M/S. EUROBOND INDUSTRIES PVT. LTD. 2 ITA 6611/MUM/2014 FOR A.Y. 2009-10 :- THIS IS A REVENUES APPEAL FILED AGAINST ORDER OF CI T(A) DATED 25.8.2014 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U /S.80IB(4) WITHOUT APPRECIATING THE FACT THAT NO NEW UNIT/ UNDERTAKING WAS ESTABLISHED BY THE ASSESSEE COMPANY AND THAT THERE; WAS MERELY A N EXPANSION OF THE EXISTING UNIT?' 2. ' WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U /S.80IB(4) WITHOUT APPRECIATING THE FACT THAT THERE WAS NO SEPARATE IDENTIT Y OF THE SO CALLED NEW UNIT SINCE THERE WAS NO SEPARATE WORKFORC E DISTINCT LABOURS ? NO REGISTRATION OF EXCRISE OR VAT NO MATERIAL PR OCUREMENT STORAGE OR OTHER FACTORS NECESSARY FOR INDEPENDENT EXISTENCE O F THE SEPARATE- UNIT?' 3. 'WHETHER ON THE FACTS AND IN THE FACTS AND CIRCUMSTAN CES OF THE CASE THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U/S. 80IB(4) WITHOUT APPRECIATING THE FACT THAT THE ADIT (INV.) JAMM U CONFIRMED THAT THERE EXISTED ONLY ONE UNIT WHICH HAS BEEN CONF IRMED IN THE STATEMENT ON OATH RECORDED OF SHRI SANJEEV UPPAL WORK S MANAGER OF THE ASSESSEE-COMPANY?' 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U /S.80IB(4) WITHOUT APPRECIATING THE FACT THAT THE PROVISIONS OF SECTION 80I B RESTRICTS THE DEDUCTION FOR NEW UNIT OR INDUSTRIAL UNDERTAKING IN CO NTRAST TO THE PROVISIONS OF SECTION 80IC WHICH ALLOWED DEDUCTION O N EXPANSION OF THE EXISTING INDUSTRIAL UNDERTAKING/UNIT?' 5. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(A) WAS JUSTIFIED IN IGNORING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT ON INDEPENDENT UNIT OR SEPARATE UNDERTAKING IN THE CASE OF TEXTILE MACHINERY CORPORATION LTD. V/S COMMISSIONER OF INCOME TAX WEST BENGAL [1977] 107 ITR 195 (SC)?' 6. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) O N THE GROUNDS ABOVE MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEF FACTS OF THE CASE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF ALUMINIUM COMPOSITE PANELS (HEREINAF TER REFERRED AS 'ACP'). IT HAS CLAIMED TO HAVE TWO MANUFACTURING UNITS IN JAMM U. IT HAD CLAIMED M/S. EUROBOND INDUSTRIES PVT. LTD. 3 DEDUCTION UNDER SECTION 80IB(4) OF INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') IN RESPECT OF BOTH [HE UNITS. WHIL E DEDUCTION CLAIMED FOR UNIT-L WAS 13 80 69 708/-; THAT FOR UNIT-II WAS RS. 13 22 52;287/-. AS PER THE TWO 10CCB FORMS SUBMITTED THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION OF UNIT-I WAS 2 ND SEPTEMBER 2005 WHILE THAT OF UNIT-II WAS 12 LN JUNE 2009. BOTH THE UNITS ARE STATED TO OPERATE OUT OF THE SAM E PREMISES: HOWEVER ALL DOCUMENTATION IS SEEN TO BE IN THE NAME OF THE ASSE SSEE WITH NO SPECIFIC MENTION OF EITHER UNIT-L OR UNIT-II. IN THIS CONTEX T THE ASSESSING OFFICER EXAMINED BILLS ISSUED BY THE INDUSTRIAL DEVELOPMEN T CORPORATION LTD. PROVIDENT FUND CHALLANS LABOUR CONTRACTOR'S RECEIP TS FORMS NO. 16 ISSUED TO THE EMPLOYEES AND DIESEL BILLS. FINDING NO MENTION OF SEPARATE UNITS THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE. SIMULTA NEOUSLY HE ALSO ISSUED A COMMISSION UNDER SECTION 131(D) OF THE ACT TO THE A SST. DIRECTOR OF INCOME TAX (INVESTIGATION) JAMMU TO VERIFY THE FACTUAL POSITI ON OF THE ASSESSEE'S MANUFACTURING UNITS. 4. REFERRING TO THE REPORT OF THE ADIT THE ASSESSIN G OFFICER OBSERVED AS UNDER :- THE REPORT OF THE ADIT(INV.) JAMMU IS PERUSED. THE ADIT PERSONALLY VISITED THE ASSESSEE'S UNIT AT JAMMU TO VERIFY THE VERACITY OF THE CLAIM OF THE ASSESSEE IN RESPECT OF CLAIM OF DEDUCTION U/S 80IB O N UNIT-11 THE REPORT OF ADIT CLEARLY THROWS FOLLOWING FACTS :- 1) ONE ADDITIONAL LINE OF PRODUCTION IS INSTALLED D URING THE YEAR. 2) ONLY ONE UNIT IN THE NAME AND STYLE OF M/S. EUR OBOND INDUSTRIES P. LTD. IS BEING RUN FROM EPIP- KARTHOLI BAN BRABRNNA JA MMU. 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 SUBM ISSION DATED 26.12.2011. 6) VAT AND CENTRAL EXCISE RETURNS FILED ONLY IN TH E NAME OF M/S. EUROBOND INDUSTRIES P. LTD. 7) BOTH THE UNITS ARE PRODUCES SAME PRODUCTS AND SI MILAR RAW MATERIAL ARE USED. 8) THERE IS ONLY ONE ATTENDANCE REGISTER IS MAINTA INED. 9) ALL THE PURCHASES AND SALES ARE AFFECTED IN THE N AME OF M/S. EUROBOND INDUSTRIES P. LTD. M/S. EUROBOND INDUSTRIES PVT. LTD. 4 ON THE BASIS OF ABOVE FACTS AND FINDINGS BY ADIT(INV. ) JAMMU THE INDUSTRIAL UNDERTAKING UNIT-II IS NOT SELF SUFFICIENT AND INDEPE NDENT AND DOES NOT HAVE ITS OWN EXISTENCE. IT IS MERE INSTALLATION OF ADDITIO NAL MACHINERY WHICH IN ITSELF DOES NOT SUFFICE TO CALL AS 'UNDERTAKING' WHICH IS LACKING ANY OF ITS INDEPENDENT IDENTIFICATION NUMBER VIZ PAN NUMBER EXC ISE REGISTRATION NUMBER P.P. REGISTRATION NUMBER ETC. FURTHER TO SUBSTANTIATE HIS FINDINGS ADIT (INV.) JAMMU HAS RECORDED THE STATEMENT OF SHRI SANDEEP UPPAL WORKS MANAGER WHO I N HIS STATEMENT GIVEN ON OATH U/S 131 OF THE IT ACT IN WHEREIN HE HAS CONFESSED THAT ONLY ONE UNIT IS RUNNING FROM ASSESSEE'S FACTORY PREMISES AT JAMMU. IN THE STATEMENT RECORD ON OATH THE WORKS MANAGER OF THE ASSES SEE AT JAMMU FACTORY CATEGORICALLY AGREED THAT ASSESSEE-IS NOT RUNN ING TWO UNITS FROM THE SAID PREMISES . 5. UPON SHOW NOTICE IN THIS REGARD THE ASSESSEE BAS ICALLY EMPHASISED UPON THE INCREASE IN PRODUCTION AND SUBMITTED THAT THE S ECOND UNIT WAS NOT ESTABLISHED IN VIOLATION OF THE RULES PRESCRIBED. H OWEVER THE ASSESSING OFFICER WAS NOT SATISFIED. HE HELD THAT ONLY ADDITION OF MA CHINERY CANNOT BE CALLED ESTABLISHMENT OF AN ADDITIONAL INDUSTRIAL UNDERTAKI NG. IN THIS REGARD HE REFERRED TO THE MEANING OF INDUSTRIAL UNDERTAKING F ROM THE DECISION OF THE HONOURABLE KERELA HIGH COURT IN THE CASE P. ALIKUNJ U MISCELLANEOUS APPLICATION NAZEER CASHEW INDUSTRIES VS. CIT 166 I TR 804. 6. THEREAFTER THE AO HELD AS UNDER :- FROM THE SUBMISSIONS MADE BY THE ASSESSEE REGARDING UNIT-I AND UNIT-II DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS DISCU SSED ABOVE THE FACTS THAT HAS BEEN BROUGHT OUT BY ADIT JAMMU AND CONFESSED BY WORKS MANAGER IN HIS STATEMENT UNDER OATH AND THE DISCUSSIO N ON THE DEFINITION OF INDUSTRIAL UNDERTAKING IT CAN BE OBSERVED THAT THE SO CALLED 'UNIT-II' DOES NOT HAVE ANY OF THE QUALIFICATIONS TO BE CALLED AS 'INDUST RIAL UNDERTAKING' THIS IS BECAUSE : 1) IT DOES NOT HAVE ITS OWN IDENTITY IN THE F ORM OF PAN AND VARIOUS REGISTRATIONS 2) DOES NOT HAVE ITS OWN EMPLOYEES AND MANAGEMENT A S EVIDENT FROM FORM NO. 16(1) ISSUED TO ITS EMPLOYEES. 3) NO SEPARATE BOOKS OF ACCOUNTS ETC AS CONFIRME D BY ITS WORKS MANAGER IN HIS STATEMENT RECORDED UNDER OATH. 4) DOES NOT HAVE OWN SUPPLY OF RAW MATERIAL 5) DOES NOT HAVE STOCK REGISTER HENCE EUROBOND INDUSTRIES P. LTD. UNIT-II CANNOT BE SAID TO BE INDUSTRIAL UNDERTAKING SINE- IT IS NOT AND INDUSTRIAL UNDERTAKIN G THE QUESTION OF M/S. EUROBOND INDUSTRIES PVT. LTD. 5 CLAIMING DEDUCTION U/S. 80IB OF THE ACT DOES NOT ARI SES. ACCORDINGLY DEDUCTION CLAIMED U/S. 80IB(4) UNIT-II IS DISALLOWED AS IT IS AN INELIGIBLE UNIT. PENALTY PROCEEDINGS U/S. 27L(1)(C) ARE INITIATED SEP ARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 7. THE ASSESSING OFFICER REFERRED THE ALTERNATIVE P LEA OF THE ASSESSEE HAS UNDER:- 'ALTERNATIVELY AND WITHOUT PREJUDICE TO THE AFORESAID S UBMISSIONS 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 UN DER THE NORMAL PROVISIONS OF THE I.T.ACT. THE COMPANY SHALL BE LIAB LE 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 ASS ESSEE ITSELF CERTIFIED THE INDEPENDENT EXISTENCE OF UNIT-II AS 'INDUSTRIAL UND ERTAKING'. FURTHER HE HAS MAINTAINED THE SAME STAND THROUGH OUT THE ASSESSMENT PR OCEEDINGS. 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 ALTERNAT E PLEA AS HIS ACTUAL PLAN TO UNDULY CLAIM OF DEDUCTION U/S. 80IB(4) FOR UNIT-I I HAS BEEN QUESTIONED. .ASSESSEE-DURING THE COURSE OF ASSESSMENT PROCEEDING S HAVE SUBMITTED SUMMARY OF DEDUCTION U/S. 80IB CLAIMED BY UNIT-I AND UNIT-II OVER THE YEARS WHICH ARE REPRODUCED AS UNDER:- EUROBOND INDUSTRIES P. LTD. SUMMARY OF 80IB CLAIMED FROM 1.4.2005 TO 31.3.2011 YEAR UNIT-I UNIT-II TOTAL 2005-06 2006-07 95 920 081 95 920 082 2007-08 171 870 276 171 870 277 2008-09 138 069 708 32 242 287 170 311 996 2009-10 81 272 929 41 964 159 123 237 089 2010-11 9 268 117 68 418 723 77 686 840 7.2 THE ANALYSIS OF THE ABOVE YEAR-WISE CLAIM OF DED UCTION U/S.80IB FOR UNIT-I AND UNIT-LI BRINGS OUT THE ACTUAL INTENT BEHIND UNJUSTI FIDELY CLAIMING 80IB OF THE ACT FOR UNIT-LL. THE FACT THAT UNIT-I HAS STARTED ITS PRODU CTION ON 02.11.2005 WITH INITIAL ASSESSMENT YEAR BEING 2006-07. HENCE AS PER ACT ' UNIT-L IS BECOMING INELIGIBLE FOR 100% DEDUCTION FROM THE A.Y.2010-11. THE ASSESSEE F ABRICATED THE FACTS REGARDING UNIT-II BEING AN INDUSTRIAL UNDERTAKING ELIGIBLE FO R 80IB(4) DEDUCTION AND FILED SEPARATE FORM NO. 10CCB DULY CERTIFIED BY THE AUDIT OR SO THAT ASSESSEE CAN TRANSFER THE PRODUCTION FROM THE ORIGINAL ELIGIBLE INDUSTRIA L UNDERTAKING I.E. UNIT-I TO THE UNIT-11 ON WHICH IT HAS CLAIMED 80IB(4) DEDUCTION. THIS IS BECAUSE THE 100% DEDUCTION FOR UNIT-II WILL BE AVAILABLE TILL. A.Y.2014-15. THIS VERY FACT IS CLEA RLY BROUGHT OUT FROM THE ABOVE YEAR-WISE DATA SUBMITTED BY THE ASSESSEE. AC UNIT-I IS M/S. EUROBOND INDUSTRIES PVT. LTD. 6 PROGRESSING TOWARDS THE END OF 100% DEDUCTION THE PRODUCTION IN THE UNIT-II IS INCREASING AND UNIT-I IS DEALING. 9. HE FURTHER REFERRED THE CASE LAW FROM HONOURABLE SUPREME COURT IN THE CASE OF M/S. MEDOWELL & COMPANY LTD. VS. COMMERCIAL TAX OFFICER FOR HOLDING THAT ASSESSEE WAS USING A COLOURABLE DEVICE. 10. UPON ASSESSEE'S APPEAL LEARNED CIT(A) ACCEPTED THE ASSESSEE SUBMISSION THAT THE SAID UNIT WAS NOT ESTABLISHED IN VIOLATION OF THE RULES AND LAW. HE FOUND THAT ALL THE ASSESSING OFFICER'S OBJECTIONS W ERE NOT GERMANE. HE ONLY EMPHASISED ON THE FACT THAT ASSESSEE HAS OBTAINED A DDITIONAL CREDIT FROM BANK AND THAT ASSESSEE HAS OBTAINED ADDITIONAL POWER CON NECTION. THIS HE FOUND TO BE SUFFICIENT TO JUSTIFY ASSESSEE'S CLAIM. 11. THE ORDER OF LEARNED CIT(A) THIS REGARD IS AS U NDER :- I FIND SUBSTANTIAL MERIT IN THE CLAIM OF THE APPELLAN T SINCE THERE IS CLEARLY NO VIOLATION OF THE STATUTORY REQUIREMENTS FOR GRANT OF DE DUCTION OR EVEN AN ALLEGATION BY THE AO TO THAT EFFECT SUBSTANTIAL DOCUMENTATI ON WAS ALREADY BEFORE THE AO WHICH WOULD INDICATE THAT A MASSIVE INC REASE IN PRODUCTION HAD BEEN PLANNED AND EXECUTED. FOR INSTANCE THE MUMB AI 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 31 ST JANUARY 2008. ACCORDING TO THE SCHEDULE OF FIXED ASSE TS OF UNIT-II (WHICH WAS PART OF THE AUDITED BALANCE SHEET AS ON 31 SL 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 ELEC TRICAL INSTALLATION OF RS. 18 93 735/- BOTH TOTALLING OVER RS. 4.89 CRORES. ON 20 TH OCTOBER 2008 THE POWER DEVELOPMENT DEPARTMENT OF GOVERNMENT OF JAMMU AN D KASHMIR HAD ACCORDED SANCTION FOR AN ADDITIONAL 620 KW OVER AND ABOVE 600.4 KW ALREADY SANCTIONED (FOR UNIT-L) THUS LEADING TO A TOTA L 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 AF TER COMMENCING PRODUCTION MID-YEAR UNIT-II HAD PRODUCED 4 41 128 SQ UARE METRES OF ACP DURING THE SAME FINANCIAL YEAR. THE INSTALLED CAPACIT Y ON THE OTHER HAND WAS 7 95 000 SQUARE METRES AND 10 95 000 SQUARE-METRES O F ACP FOR UNIT-I AND UNIT-II RESPECTIVELY. WHILE DISREGARDING THIS WEALTH OF DATA AND DOCUMENTATION THE AO APPEARS TO HAVE CONCENTRATED ON THE APPARENT OUTWARD'STRUCTURE OF BOTH THE UNITS BEING THAT OF A S INGLE UNIT. 12. LEARNED CIT(A) THEREAFTER REFERRED TO THE DECIS ION OF ITAT MUMBAI IN THE CASE JCIT VS. ASSOCIATED CAPSULES (P) LTD. (114 ITD 189). HE REFERRED THAT HON'BLE TRIBUNAL HAD HELD THAT ORGANIZATIONAL FEATU RES SUCH AS THE LEGAL STATUS M/S. EUROBOND INDUSTRIES PVT. LTD. 7 OF THE UNIT THE /COMMON/CONTROL AND MANAGEMENT TH E LOCATION IN THE SAME PREMISES THE COMMON PROCUREMENT OF RAW MAT ERIALS THE COMMON POST-MANUFACTURING ACTIVITIES THE OBTAINING OF CER TAIN FACILITIES FROM A COMMON SOURCE ETC. ARE HARDLY DECISIVE OR RELEVANT IN CON CLUDING WHETHER THE SAID UNIT WOULD BE AN UNDERTAKING QUALIFIED FOR CLAIMING DEDU CTION. THAT WHILE DEALING WITH THE ISSUE OF GRANT OF DEDUCTION UNDER SECTION 80IB OF THE ACT THE HON'BLE BOMBAY HIGH COURT HAD OBSERVED AS FOLLOWS :- 'THE TRIBUNAL HAS DULY APPLIED ITS MIND TO THE EVIDENC E ON RECORD THE MATERIAL ON RECORD BEFORE THE TRIBUNAL AND WHICH HAS BEEN CONSIDERED IN SOME DETAIL IS SUFFICIENT TO SUSTAIN THE FINDING OF FACT THAT :-(I) THERE WAS A SUBSTANTIAL INVESTMENT OF FUNDS IN THE UNIT WHICH WAS SET UP IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1994-95 (II) NEW PLANT AND MACHINERY WERE INSTALLED; (III). THE UNIT WAS HOUSED IN A NEW B UILDING CONSTRUCTED AT SITE AND WAS AN INDEPENDENT VIABLE UNIT CAPABLE OF PR ODUCING GOODS MANUFACTURED BY ITSELF; AND (IV) THERE WAS A SUBSTANTIA L INCREASE IN THE CAPACITY OF PRODUCTION. ON THESE FINDINGS OF FACT WHI CH HAVE NOT SHOWN TO BE PERVERSE THE FINAL CONCLUSION OF THE TRIBUNAL WOUL D NOT FALL FOR REAPPRECIATION OR RECONSIDERATION. ACCORDINGLY WE D ISPOSE OF THE APPEAL BY ANSWERING BOTH QUESTIONS OF LAW IN THE AFFIRMATIVE.' 13. REFERRING TO THE ABOVE LEARNED CIT APPEALS HELD THAT ASSESSEE DESERVES TO BE GRANTED DEDUCTION UNDER SECTION 80IB FOR THE UNI T II. LEARNED CIT(A) FURTHER HELD THAT SINCE THE ASSESSEE SUCCEEDED ON ITS SUBST ANTIVE GROUND THE ALTERNATIVE IS NOT ADJUDICATED. 14. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE US AND ASSESSEE HAS ALSO FILED CROSS OBJECTION CONTESTING THAT LEARNED CIT(A ) HAS NOT ADJUDICATED UPON THE ALTERNATIVE PLEA OF THE ASSESSEE. 15. WE HAVE HEARD BOTH THE PARTIES CAREFULLY CONSID ERED THE SUBMISSIONS. WE FIND THAT ASSESSEE HAS CLAIMED 80IB DEDUCTION CL AIMING 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 UN IT NAMED UNIT-II AND CLAIMED DEDUCTION UNDER SECTION 80IB(4) FOR BOTH TH E UNITS. M/S. EUROBOND INDUSTRIES PVT. LTD. 8 16. THE ASSESSING OFFICER FOUND THAT ASSESSEE HAD O NLY DONE SUBSTANTIAL INCREASE IN THE CAPACITY OF ITS EXISTING UNIT AND W AS TRYING TO PASS IT OFF AS ESTABLISHMENT OF A SECOND UNIT. IN THIS REGARD ASSE SSING OFFICER ALSO OBTAINED REPORT FROM THE ADDITIONAL DIRECTOR INVESTIGATION. THE SAID REPORT DULY PROVIDED THAT THERE WAS ONLY ONE UNIT WHICH WAS ALSO CORROBO RATED BY THE EXAMINATION OF ADI FROM THE ASSESSEES WORKS MANAGER. 17. FROM THE ASSESSEES SUBMISSIONS THE ASSESSING O FFICER NOTED THAT :- 1) IT DOES NOT HAVE ITS OWN IDENTITY IN THE FO RM OF PAN AND VARIOUS REGISTRATIONS 2) DOES NOT HAVE ITS OWN EMPLOYEES AND MANAGEMENT AS EVIDENT FROM FORM NO. 16(1) ISSUED TO ITS EMPLOYEES. 3) NO SEPARATE BOOKS OF ACCOUNTS ETC AS CONFIRMED B Y ITS WORKS MANAGER IN HIS STATEMENT RECORDED UNDER OATH. 4) DOES NOT HAVE OWN SUPPLY OF RAW MATERIAL 5) DOES NOT HAVE STOCK REGISTER IN THESE CIRCUMSTANCES THE ASSESSING OFFICER FOUND THE ASSESSEE'S CLAIM TO BE A COLOURABLE DEVICE AND REJECTED THE SAME. 17. ON THE OTHER HAND LEARNED CIT(A) DID NOT REBUT ANY OF THE ACTUAL FINDINGS OF THE ASSESSING OFFICER AND THE ADIT INVE STIGATION. HE ONLY REFERRED TO THE INCREASE IN CAPACITY AND THE INCREASE IN ELECTR IC POWER AND ALLOWED THE ASSESSEE'S CLAIM. 18. IN THIS REGARD WE NOTE THAT THE ORDER OF LEARNE D CIT(A) IS VERY LACONIC. IT DOES NOT ADDRESS THE VARIOUS OBJECTIONS RAISED BY T HE ASSESSING OFFICER AND ALSO FOUND IN THE REPORT OF THE ADIT INVESTIGATION. THE LEARNED CIT(A) HAS BRUSHED THEM OFF BY OBSERVING THAT ARE NOT RELEVANT. HOW TH EY ARE IRRELEVANT IS NOT AT ALL SPELT OUT. SIMPLY INCREASE IN CAPACITY AND PRODUCTI ON FIGURE CANNOT FRUCTIFY THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB FO R THE ASSESSMENT FOR ESTABLISHMENT OF A NEW UNIT WHEN ALL OTHER FACTORS SHOW THAT THERE IS NO ESTABLISHMENT OF A SEPARATE UNDERTAKING. THE DECISI ONS REFERRED BY LEARNED CIT(A) ARE NOT AT ALL APPLICABLE ON THE FACTS OF T HE PRESENT CASE. HERE IT IS A CLEAR FINDING THAT THIS IS THE LAST YEAR OF ELIGIBI LITY OF CLAIM U/S. 80IB(4) M/S. EUROBOND INDUSTRIES PVT. LTD. 9 DEDUCTION OF THE ELIGIBLE UNIT AND THE ASSESSEE HAS TRIED TO PASS OFF AN INCREASE IN PRODUCTION CAPACITY AS ESTABLISHMENT OF NEW UNIT . THE ASSESSING OFFICER HAS DULY FOUND THAT THERE IS NO ESTABLISHMENT OF A NEW UNIT. ONLY AN INCREASE IN PRODUCTION IS BEING PASSED OFF AS ESTABLISHMENT OF NEW UNIT. NOT A SINGLE INGREDIENT FOR ESTABLISHMENT OF NEW UNIT HAS BEEN N OTED BY THE ASSESSING OFFICER OR ADIT ON HIS PHYSICAL VISIT TO THE UNIT. 19. IN THIS REGARD WE NOTE THAT A CONSTITUTION BENC H OF THE HONOURABLE SUPREME COURT IN THE CASE OF COMMISSIONER OF CUSTOM S (IMPORT) VS M/S. DILIP KUMAR & COMPANY (IN CIVIL APPEAL NO. 3327 OF 2007 V IDE ORDER DATED 30.7.2018) HAS EXPOUNDED THAT IN CASE OF EXEMPTION PROVISIONS IF TWO VIEWS ARE POSSIBLE THE ONE IN FAVOUR OF THE REVENUE HAS TO BE ADOPTED. MOREOVER WE FIND THAT LEARNED CIT(A) HAS NOT ADJUDICATED THE ALTERNA TIVE PLEA OF THE ASSESSEE. ASSESSEE IS AGGRIEVED BY THIS. ASSESSEE HAS ALSO FI LED CROSS OBJECTION IN THIS REGARD. 20. IN THIS BACKDROP IN OUR CONSIDERED OPINION INT EREST OF JUSTICE WILL BE SERVED IF THE ISSUE IS REMITTED TO THE FILE OF LEAR NED CIT(A). LEARNED CIT(A) IS DIRECTED TO CONSIDER THE ISSUE AFRESH AND DECIDE ON ALL THE ASPECTS OF THE GROUNDS RAISED BY THE ASSESSEE INCLUDING ALTERNATIV E PLEA. THE LEARNED CIT(A) SHALL ALSO TAKE INTO ACCOUNT THE DECISION OF HONOUR ABLE SUPREME COURT REFERRED ABOVE. 21. IN THE RESULT IS APPEAL BY THE REVENUE STANDS A LLOWED FOR STATISTICAL PURPOSES ASSESSEE CROSS OBJECTION 22. THE GROUND RAISED IN THE CROSS OBJECTION READ A S UNDER :- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1 9 MUMBAI ('THE CIT(A)') ERRED IN FACT AND IN LAW IN REJECTING THE ALTERNATIVE CLAIM OF THE APPELLANT THAT IN CASE DEDUCTION U/S. 80IB IS NOT ALLO WED ON THE NEW UNIT IN THAT CASE ALSO DEDUCTION U/S. 801B IS AVAILABLE AS TH E EXISTING UNIT OF THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S. 80IB. M/S. EUROBOND INDUSTRIES PVT. LTD. 10 23. SINCE WE HAVE ALREADY REMANDED THE MATTER TO TH E FILE OF LEARNED CIT(A) IN REVENUES APPEAL ABOVE AND DIRECTED HIM TO CONSI DER ALL THE GROUNDS RAISED BY THE ASSESSEE AFRESH THIS CROSS OBJECTION HAS BE COMES STATISTICAL. HENCE THE CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES . ASSESSEE'S APPEAL ITA NO. 4071/MUM/2016 FOR ASSES SMENT YEAR 2010-11 :- 24. FOR A.Y. 2010-11 THE LEARNED CIT(A) HAS REJECT ED THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80IB FOR THE SAME UNIT AS A BOVE. ASSESSEE IS AGGRIEVED BY THAT. REVENUES APPEAL IN ITA NO. 1471/MUM/2016 FOR A.Y. 2012-13 :- 25. FOR ASSESSMENT YEAR 2012-13 THE LEARNED CIT(A) HAS ALLOWED THE ASSESSEE'S CLAIM OF DEDUCTION FOR THE SAME UNIT BY FOLLOWING THE ORDER OF LEARNED CIT(A) FOR ASSESSMENT YEAR 2009-10. AGAINST THIS REVENUE HAS FILED APPEAL. 26. SINCE ON IDENTICAL FACTS WE HAVE REMANDED THE M ATTER TO THE FILE OF LEARNED CIT(A) IN REVENUES APPEAL FOR ASSESSMENT Y EAR 2009-10 ABOVE THESE ORDERS OF LEARNED CIT(A) ALSO STAND REMANDED THE FI LE OF LEARNED CIT(A). OUR ADJUDICATION IN ITA NO. 6611/MUM/2014 FOR A.Y. 2009 -10 APPLIES MUTATIS MUTANDIS TO THESE YEARS ALSO. 27. IN THE RESULT ALL THESE APPEALS ARE ALLOWED STA TISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 2.3.2021. SD/- SD/- (RAMLAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 02/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT M/S. EUROBOND INDUSTRIES PVT. LTD. 11 3. THE CIT(A) 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT MUMBAI