THE ACIT, Circle, Ratlam v. M/s. MAHALAXMI INVESTMENT AND TRADING PVT. LTD., Ratlam

ITA 956/IND/2016 | 2011-2012
Pronouncement Date: 25-05-2021 | Result: Allowed

Appeal Details

RSA Number 95622714 RSA 2016
Assessee PAN AADCM9703G
Bench Indore
Appeal Number ITA 956/IND/2016
Duration Of Justice 4 year(s) 8 month(s) 8 day(s)
Appellant THE ACIT, Circle, Ratlam
Respondent M/s. MAHALAXMI INVESTMENT AND TRADING PVT. LTD., Ratlam
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2021
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-05-2021
Date Of Final Hearing 07-12-2020
Next Hearing Date 07-12-2020
Last Hearing Date 23-10-2018
First Hearing Date 09-04-2018
Assessment Year 2011-2012
Appeal Filed On 16-09-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI MANISH BORAD ACCOUNTANT MEMBER AND MISS MADHUMITA ROY JUDICIAL MEMBER ITA NOS.955 & 956/IND/2016 ASSESSMENT YEARS:2010-11 & 2011-12 ACIT CIRCLE - RATLAM / VS. M/S. MAHALAXMI INVESTMENT AND TRADING PVT. LTD. SHRI RAM BHAWAN GAUSHALA ROAD RATLAM (MP) (APPELLANT) (R ESPONDENT ) P.A. NO. AADCM9703G CO NOS. 02 & 03/IND/2020 (ARISING OUT OF ITA NO.955 & 956/IND/2016) ASSESSMENT YEARS:2010-11 & 2011-12 M/S. MAHALAXMI INVESTMENT AND TRADING PVT. LTD. SHRI RAM BHAWAN GAUSHALA ROAD RATLAM (MP) / VS. ACIT CIRCLE - RATLAM (APPELLANT) (R ESPONDENT ) P.A. NO. AADCM9703G APPELLANT BY SHRI S. N. AGRAWAL CA REVENUE BY SHRI HARSHIT BARI SR. DR DATE OF HEARING: 09.04.2021 DATE OF PRONOUNCEMENT: 25.05.2021 MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 2 / O R D E R PER MANISH BORAD A.M: THESE TWO APPEALS FILED BY THE REVENUE FOR ASSESSME NT YEAR 2010-11 & 2011-12 AND CROSS OBJECTION FILED BY THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) UJJAIN EVENLY DATED 24.06.2016 WHICH ARE AR ISING OUT OF THE ORDER U/S 143(3) R.W.S. 147 OF THE ACT DATED 31.03. 2015 & 31.08.2015 FRAMED BY DCIT RATLAM. 2. REGISTRY HAS INFORMED THAT THE CROSS OBJECTION N O.02/IND/2020 AND CROSS OBJECTION NO.03/IND/2020 FILED BY THE ASS ESSEE ARE TIME BARRED BY THREE YEARS 29 DAYS. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE AFFIDAVIT AND CONDONATION APPLICATION REQUES TED FOR CONDONING THE DELAY IN FILING THESE CROSS OBJECTION S. LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THIS REQUE ST. 3. WE HOWEVER DO NOT FIND ANY MERIT IN THE REASON MENTIONED IN THE APPLICATION BECAUSE THE ASSESSEES CASE WAS REOPENE D ON THE BASIS OF NOTICE U/S 148 OF THE ACT ISSUED ON 28.03.2014 A ND 16.03.2015 FOR A.Y. 2010-11 & 2011-12. AFTER LAPSE OF A CONSID ERABLE TIME OF AROUND 4 YEARS ASSESSEE HAD APPROACHED TO THE RIGHT TO INFORMATION (RTI). ASSESSEE IS A PRIVATE LIMITED CO MPANY AND REGULARLY FILING INCOME TAX RETURN. IT HAS ALSO CHA LLENGED THE ASSESSMENT ORDERS AND SUCCEEDED. 4. LOOKING TO THE TOTALITY OF FACTS WE ARE OF THE VIEW THAT THE REASON MENTIONED BY THE ASSESSEE IN THE CONDONATION APPLIC ATION HAVE NO MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 3 MERITS AND CANNOT BE OF ANY HELP TO THE ASSESSEE. F URTHER WE ARE OF THE VIEW THAT NO UNDUE HARDSHIP WILL BE CAUSED TO T HE ASSESSEE IF THE CONDONATION APPLICATION IS REJECTED. THE SAME I S REJECTED AND THUS DELAY IN FILING OF THE CROSS OBJECTIONS IS NOT CONDONED. ACCORDINGLY BOTH CROSS OBJECTIONS NO. 2 & 3/IND/20 20 ARE DISMISSED. 5. NOW WE TAKE UP REVENUES APPEAL FOR A.Y. 2010-11 & 2011-12 FOR WHICH FOLLOWING GROUNDS ARE RAISED: ITANO.955/IND/2016 FOR A.Y. 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED I HOLDING THAT THE AO HAS REOPENED THE CASE ON THE BASIS OF DATE MENTIONED I AUDIT REPORT WHICH I S FACTUALLY INCORRECT. EVEN IN APPELLATE ORDER IN PAR A 4.3 THE ID.CIT(A) HAS REPRODUCED THE REASONS OF REOPENING O F THE CASE ACCORDING TO WHICH THE CASE WAS REOPENED ON TH E BASIS OF INFORMATION RECEIVED FROM VAT DEPARTMENT MUMBAI THAT THE PURCHASES FROM MOTION TRADRES PVT. LTD WAS NON GENUINE AND IN PARA 4.2 OF THE APPELLATE O RDER THE ID. CIT(A) HAS CONFIRMED THE ADDITION ON THIS I SSUE AS SUCH THE REASONS OF REOPENING ARE VALID. SO LD. CIT (A) IS NOT JUSTIFIED IN HOLDING THAT PROCEEDINGS U/S 148 H AVE NOT BEEN VALIDLY INITIATED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB WHICH W AS AVAILABLE ONLY FOR THE UNDERTAKINGS STARTED THEIR P RODUCTION BEFORE 31-03-2002 WHILE AS PER FORM NO 10CCB DATE OF COMMENCEMENT OF PRODUCTION WAS 11.03.2003 AND THE ASSESSEE HAS ALSO CLAIMED DEDUCTION FOR AY 2012-13. IF THE CLAIM OF THE ASSESSEE IS CORRECT HOW IT HAS CLAIMED DEDUCTION FOR 11TH YEAR OF STARTING OF MANUFACTURIN G. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB OF THE ACT ON THE PLEA OF THE ASSESSEE THAT PLANT & MACHINERY WAS REA DY TO MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 4 PUT TO USE PRIOR TO 31.03.2002 AS SUCH IGNORING TH E DECISIONS OF COMMISSIONER OF INCOME TAX POONA VS. HINDUSTAN ANTIBIOTICS LTD. 93 ITR 548(BOM) COMMIS SIONER OF INCOME TAX VS. FOOD SPECIALITIES LTD. 156 ITR 7 90 (DEL) AND COMMISSIONER OF INCOME TAX ... VS NESTOR PHARMACEUTICALS LIMITED (2010) 322 ITR 631 (DELHI) 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN HOLDING 'THAT PLANT & MACHINERY WAS READY TO PUT TO USE PRIOR TO 31.03.2002 WHILE THE ASSESSEE HAS SHOWN FIXED ASSETS AS CAPITAL WORK IN PROGRESS AND CLAIMED NO DEPRECIATION FOR THE A.Y. 2002-03. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB WHICH W AS AVAILABLE ONLY FOR THE UNDERTAKINGS STARTED THEIR P RODUCTION BEFORE 31-03-2002 WHILE IN FORM NO 10CCB OF AUDIT REPORT THE DATE OF 11/03/2003 HAS BEEN MENTIONED AS STARTI NG DATE OF PRODUCTION IN THE APPLICATION FORM FOR PER MANENT REGISTRATION AT SMALL SCALE INDUSTRIES MADE ON 17/0 3/2003 BY THE ASSESSEE HAS ALSO MENTION THE DATE OF 11/03/ 2003 AS THE DATE OF COMMENCEMENT OF PRODUCTION AND LASTL Y THE ELIGIBILITY CERTIFICATE FOR SALES TAX INCENTIVE UND ER PSI-1993 SCHEME ISSUED ON 28/03/2003 HAS ALSO MENTION THE DA TE OF 11.03.2003 AS THE DATE OF COMMENCEMENT OF PRODUCTIO N. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB(3) OF THE A CT WHILE INITIALLY THE ASSESSEE CLAIMED THE DEDUCTION INITIA LLY U/S 80IBES) WHICH IS CLEAR FROM THE NOTE OF AUDIT REP ORT IN WHICH IT IS CLEARLY MENTIONED THAT 'THE COMPANY IS HAVING FA CTORY AND BRANCH SITUATED AT BACKWARD AREA AKOLA W.E.F. 11-03 -2003. FURTHER IN POINT NO 13 OF THE REPLY DATED 13-03-201 3 THE AR OF THE ASSESSEE SUBMITTED THAT 'THE COMPANY IS MAINLY INVOLVED IN MANUFACTURING OF L.T. DISTRIBUTION BOX METER BO X FEEDER PILLER C.T. OPERATED ENERGY METERING CABINET ETC. AT AKOLA UNIT WHICH IS SITUATED IN BACKWARD AREA & ELIGIBLE FOR D EDUCTION U/S. 80IB.' HOWEVER WHEN IT IS FOUND THAT THE AKOL A IS NOT COVERED IN BACKWARD AREA AS PER SCHEDULE AKOLA DIST RICT OF MAHARASHTRA WHICH IS COVERED NEITHER CATEGORY 'A' N OR CATEGORY 'B' THE ASSESSEE CHANGED ITS STAND AND CLAIMED THA T IT HAS MADE TRIAL PRODUCTION BEFORE 31.03.2002 AS DEDUCTIO N IS AVAILABLE U/S 80IB(3) AND THE DATE MENTIONED BY TH E AUDITOR IS MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 5 NOT CORRECT. (NOTE - THE MATTER IS COVERED UNDER THE EXCEPTIONS MENTIONED IN PARA 8 (C) OF CIRCULAR 21/2015). ITANO.956/IND/2016 FOR A.Y. 2011-12 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED I HOLDING THAT THE AO HAS REOPENED THE CASE ON THE BASIS OF DATE MENTIONED IN AUDIT REPORT WHICH IS NOT CORRECT AS THE AO HAS FORMED HIS OPINION ON THE BAS IS OF ASSESSMENT PROCEEDING FOR ASSESSMENT YEAR 2012-13. WHILE MAKING ASSESSMENT FOR A.Y.2012-13 THE AO FOU ND THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IB FO THE ACT ASSESSMENT YEAR 2011-12 BEING START PERIOD IS ASSESSMENT YEAR 2002-03. THE DEDUCTION IS NOT AVAILABLE FOR THE UNDERTAKING WHICH STARTED THEIR PRODUCTION AFTER THE PERIOD RELEVANT TO ASSESSMENT YEAR 2002-03. FURTHER THE ASSESSEE IN ITS AUDIT REPORT H AS MENTIONED THAT ITS AKOLA UNIT IS LOCATED UNDER BACK WARD AREA WHILE ON VERIFYING THE AO FOUND THAT THE AKOLA UNIT IS NOT LOCATING IN BACK WARD AREA AS SUCH THE CLAIM U /S 80IB(5) WAS NOT ALLOWABLE TO THE ASSESSEE. THE LOC ATION OF UNIT IS LOCATED IN BACKWARD AREA OR NOT IS A MATERI AL FACT FOR ALLOWING DEDUCTION AS SUCH THE RATIO OF DECISIONS OF SUPREME COURT IN THE CASE OF ESS ESS KAY ENGINEERIN G CO. P. LTD. VS. CIT-TAX 247 ITR 818 HON'BLE SUPREME COU RT AND SEIMENS INFORMATION SYSTEM LTD. VS. ACIT [2012} 343 ITR 188 (BOM) IS CLEARLY APPLICABLE IN THIS CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT REOPENING PROCEEDINGS HAVE NOT BEEN VALIDLY INITIATED EVEN WH EN ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT DURING ORIGINAL PROC EEDINGS U/S 143(3) OF THE INCOME TAX ACT 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB WHICH W AS AVAILABLE ONLY FOR THE UNDERTAKINGS STARTED THEIR P RODUCTION BEFORE 31-03-2002 WHILE AS PER FORM NO 10CCB DATE OF MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 6 COMMENCEMENT OF PRODUCTION WAS 11.03.2003 AND THE ASSESSEE HAS ALSO CLAIMED DEDUCTION FOR AY 2012-13. IF THE CLAIM OF THE ASSESSEE IS CORRECT HOW IT HAS CLAIMED DEDUCTION FOR 11TH YEAR OF STARTING OF MANUFACTURIN G. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB OF THE ACT ON THE PLEA OF THE ASSESSEE THAT PLANT & MACHINERY WAS REA DY TO PUT TO USE PRIOR TO 31.03.2002 AS SUCH IGNORING TH E DECISIONS OF COMMISSIONER OF INCOME TAX POONA VS. HINDUSTAN ANTIBIOTICS LTD. 93 ITR 548(BOM) COMMIS SIONER OF INCOME TAX VS. FOOD SPECIALITIES LTD. 156 ITR 7 90 (DEL) AND COMMISSIONER OF INCOME TAX ... VS NESTOR PHARMACEUTICALS LIMITED (2010) 322 ITR 631 (DELHI) 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ID. CIT IS ERRED IN HOLDING 'THAT PLANT & MACHINERY WAS READY TO PUT TO USE PRIOR TO 31.03.2002 WHILE THE ASSESSEE HAS SHOWN FIXED ASSETS AS CAPITAL WORK IN PROGRESS AND CLAIMED NO DEPRECIATION FOR THE A.Y. 2002-03. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ID. CIT IS ERRED IN ALLOWING DEDUCTION U/S 80IB WHICH W AS AVAILABLE ONLY FOR THE UNDERTAKINGS STARTED THEIR P RODUCTION BEFORE 31-03-2002 WHILE IN FORM NO 10CCB OF AUDIT REPORT THE DATE OF 11/03/2003 HAS BEEN MENTIONED AS STARTI NG DATE OF PRODUCTION IN THE APPLICATION FORM FOR PER MANENT REGISTRATION AT SMALL SCALE INDUSTRIES MADE ON 17/0 3/2003 BY THE ASSESSEE HAS ALSO MENTION THE DATE OF 11/03/ 2003 AS THE DATE OF COMMENCEMENT OF PRODUCTION AND LASTL Y THE ELIGIBILITY CERTIFICATE FOR SALES TAX INCENTIVE UND ER PSI-1993 SCHEME ISSUED ON 28/03/2003 HAS ALSO MENTION THE DA TE OF 11.03.2003 AS THE DATE OF COMMENCEMENT OF PRODUCTIO N. (NOTE THE MATTER IS COVERED UNDER THE EXCEPTIONS M ENTIONED IN PARA 8(C) OF CIRCULAR 21/2015). 6. FROM PERUSAL OF THE ABOVE GROUNDS WE FIND THAT T WO COMMON ISSUES HAVE BEEN RAISED BY THE REVENUE CHALLENGING THE FINDING OF LD. CIT(A). FIRSTLY HOLDING THAT REOPENING OF T HE ASSESSEES MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 7 CASE WAS NOT VALID AND SECONDLY ALLOWING THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT. WE WILL FIRST TAKE UP THE GROUNDS OF APPEAL RAISED FOR A.Y.2010- 11 7. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED I N MANUFACTURING OF TRANSFORMERS AND SWITCHGEARS. ASSE SSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 28.03.2013 D ETERMINING INCOME AT RS.98 62 840/-. NOTICE U/S 148 OF THE ACT WAS ISSUED ON 28.03.2014 TO THE ASSESSEE AFTER RECORDING REASO NS FOR REOPENING ON THE ISSUE OF BOGUS PURCHASES OF RS.51 116/-. ASSESSEE FILED NECESSARY SUBMISSIONS WHICH COULD NO T FIND ANY FAVOUR OF THE ASSESSING OFFICER. REASSESSMENT PROCE EDINGS WERE COMPLETED AFTER DISALLOWING DEDUCTION U/S 80IB OF T HE ACT AT RS.42 94 354/- BY OBSERVING THAT ASSESSEE COULD NOT COMMENCE PRODUCTION WITHIN THE STATUTORY TIME LIMIT PROVIDED UNDER THE PROVISIONS OF SECTION 80IB OF THE ACT AND ALSO DISA LLOWED PURCHASE AT RS.51 116/- ALLEGED TO BE BOGUS PURCHAS E. INCOME ASSESSED AT RS.1 41 58 310/-. 8. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AND PARTLY SUCCEEDED AS LD. CIT(A) CONFIRMED THE ADDITI ON FOR BOGUS PURCHASE OF RS.51 116/- ALLOWED THE CLAIM OF DEDUC TION U/S 80IB OF THE ACT AND ALSO HELD THE REOPENING AS INVALID B EING BASED MERELY ON A CHANGE OF OPINION. 9. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 8 10. LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. AO. 11. PER CONTRA LD. COUNSEL FOR THE ASSESSEE APART F ROM RELYING THE FINDING OF LD. CIT(A) AND SUBMISSIONS MADE BEFO RE BOTH LOWER AUTHORITIES ALSO REFERRED TO THE WRITTEN SUBM ISSIONS AND DETAILED PAPER BOOK ALONG WITH LIST OF VARIOUS DECI SIONS RUNNING FROM PAGES 1 TO 336. 12. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. FOR A.Y.2010-11 THROUGH FIRST ISSUE RAIS ED IN GROUND NO.1 REVENUE HAS CHALLENGED THE FINDING OF LD. CIT(A) HO LDING THE REOPENING TO BE INVALID. 13. WE OBSERVE THAT NOTICE U/S 148 OF THE ACT WAS I SSUED ON THE BASIS OF INFORMATION RECEIVED BY THE LD. AO ABOUT A PURCHASE FROM M/S. MOTION TRADERS PVT. LTD. AND AS PER THE VALUE ADDED TAX (VAT) DEPARTMENT MUMBAI THIS PARTY ISSUED BOGUS BILLS. BASED ON THIS INFORMATION NOTICE WAS ISSUED BY LD. AO U/S 148 OF THE ACT. 14. HOWEVER RECORDS SHOWS THAT AFTER RECEIVING THE INFORMATION LD. AO HAS NOT MADE AN INDEPENDENT APPLICATION OF MIND ON THE INFORMATION. BEFORE INITIATING THE REASSESSMENT PRO CEEDINGS IN MOTION HE WAS BOUND TO EXAMINE THE FACTS RELATED TO THE PURCHASE FROM M/S. MOTION TRADERS PVT. LTD. WHICH IS AVAILAB LE ON RECORD. THE PURCHASE WAS MADE FROM A PVT. LIMITED COMPANY ASSES SED TO TAX. MATERIAL WAS RECEIVED BY THE AKOLA UNIT OF THE ASSE SSEE AND ON MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 9 18.12.2009 PAYMENTS MADE THROUGH ACCOUNT PAYEE CHEQ UE. COPY OF BANK ACCOUNT IN SUPPORT ALREADY STOOD FILED DURING THE ASSESSMENT PROCEEDINGS. BOOKS OF ACCOUNT ARE NOT REJECTED AND AFTER DETAILED SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT WAS COMPL ETED. GROSS TURNOVER OF THE ASSESSEE STOOD AT 3.81 CR. AND PRO FIT OFFERED TO TAX IS RS. 72 19 639/-. AGAINST THESE FIGURES THE PURCHASE OF RS.51 116/- IS TOO LITTLE AND ALL THE DOCUMENTARY E VIDENCES SHOWS NO IOTA OF EVIDENCE THAT THERE WAS ANY INTENTION OF TH E ASSESSEE TO EVADE TAX BY OVER STATING THE PURCHASE. THE ABOVE STATED FACTS WERE REQUIRED TO BE EXAMINED BY THE LD. AO TO FORM AN OP INION BEFORE ISSUING NOTICE U/S 148 OF THE ACT. WE HOWEVER FIN D THAT IN THE INSTANT CASE NO SUCH EFFORTS WERE MADE AND JUST BA SED ON THE INFORMATION RECEIVED FROM VAT DEPARTMENT NOTICE WAS ISSUED. IT HAS BEEN CONSISTENTLY HELD THAT MERE CHANGE OF OPINION CANNOT BE A BASIS TO ISSUE A NOTICE U/S 148 OF THE ACT. WE FIND SUPPO RT FROM IN THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561 (SC). 15. UNDER THESE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE WE FIND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) QUASHING REASSESSMENT PROCEEDINGS. GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 16. NOW WE TAKE SECOND ISSUE RAISED IN GROUND NOS. 2 TO 6 WITH REGARD TO CLAIM OF DEDUCTION U/S 80IB OF THE ACT. W E FIND THAT LD. CIT(A) AFTER EXAMINING THE FACTS OF THE CASE HAD AL LOWED DEDUCTION MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 10 U/S 80IB OF THE ACT AT RS.42 92 354/- OBSERVING AS FOLLOWS: 4.1 GROUND NO.1:THROUGH THESE GROUNDS OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.42 92 354/- BY DISALL OWING THE CLAIM OF THE APPELLANT U/S 80IB OF THE I.T. ACT. THE APPELLA NT HAS CLAIMED THE DEDUCTION U/S 801B AS 'PER THE RETURN OF INCOME FILED ORIGINALLY. THE CLAIM U/S 80IB WAS SUPPORTED BY AUDIT REPORT FILED AL ONG WITH THE RETURN OF INCOME. THE CLAIM OF THE APPELLANT HAS BE EN EXAMINED IN TERMS OF SECTION 80IB(3) OF THE I.T. ACT. IT IS PRO VIDED THAT IT MUST BEGIN TO MANUFACTURE OR PRODUCE ARTICLE OR THINGS DURING TH E PERIOD BEGINNING ON 01-04-1995 AND ENDING ON 31-03-2002. THE APPELLAN T COMPANY STARTED THE COMMERCIAL PRODUCTION WITHIN THE ELIGIBIL ITY PERIOD AS PRESCRIBED IN SUB-SECTION 2 OF CLAUSE 3 OF SECTION ~ OIB'. THE APPELLANT COMPANY IS READY FOR MANUFACTURING ACTIVITIES WHICH CAN ALSO BE PROVED FROM THE FLOWING:- I. WATER CONNECTION WAS ALLOWED BY THE MIDC DT 11-02 -2002. II. ELECTRICITY CONNECTION WAS INSTALLED FOR 40 HP ON 16-01-2002. III. MAHARASHTRA POLLUTION CONTROL BOARD REGISTRATION WAS ISSUED ON 28-02-2002. IV. SALES TAX REGISTRATION WAS ALSO OBTAINED BY THE ASSESSEE ON 12-02- 2002. V. PROFESSIONAL TAX REGISTRATION WAS ALSO OBTAINED ON 15-02-2002 VI. MACHINERY WAS INSTALLED AND READY FOR COMMENCEMEN T OF PRODUCTION BY MARCH 2002. 4.1.1 THE APPELLANT IN RESPONSE TO THE OPEN BID OF TENDERS FILED ITS TENDER ON 2 ND MARCH 2002 WHICH WAS OPENED ON 16-03-2002 AND' THE SAME WAS SUCCESSFULLY AWARDED TO THE APPELLANT. THE APPELLANT COMPANY HAS APPLIED FOR TENDER ONLY AFTER COMPLETION OF THE CONSTRUCTION OF FACTORY BUILDING AND AFTER INSTALLAT ION OF THE PLANT & MACHINERY. THE ABOVE FACTS WERE DULY EXAMINED BY THE THEN ASSESSING OFFICER AT THE TIME OF PASSING OF THE ASS ESSMENT ORDER AND THEREFORE CLAIM OF DEDUCTION U/S 80IB(3) WAS ALLOWED TO THE APPELLANT. THE PLANT OF THE APPELLANT COMPANY WAS READY FOR PU T TO USE AND ENTIRE MACHINERY WAS INSTALLED. BUILDING WAS COMPLET ED AND ALL OTHER CONNECTIONS WERE OBTAINED BY THE APPELLANT COMPANY. THE CLAIM OF THE APPELLANT WAS ALSO EXAMINED IN DETAILED WHILE PASSING THE ASSESSMENT ORDER FOR THE ASST YEARS 2005-06 AND 2006 -07 I.E. IN THE FIRST YEARS OF PROFIT AND AFTER BEING SATISFIED WITH THE EXPLANATION OF THE APPELLANT. THE CLAIM' WAS ACCEPTED U/S 80IB OF THE ACT. 4.1.2 THE AO IS NOT JUSTIFIED IN DENYING THE CLAIM O F THE APPELLANT U/S 801B BECAUSE:- MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 11 THE PLANT OF THE APPELLANT WAS READY FOR PRODUCTION BY 31.03.2002 AND FOR WANT OF ORDER FROM THE ELECTRICITY BOARD THE COMMERCIAL . PRODUCTION STARTED ON 11.03.2003. THE APPELLANT CONT ENDED THAT PLANT WAS READY FOR PRODUCTION BUT DUE TO DELAY IN ORDER FR OM THE ELECTRICITY BOARD COMMERCIAL PRODUCTION WAS STARTED ON 11.03.200 3. IN THE APPLICATION AS FILED FOR PERMANENT REGISTRATION ALSO MENTIONED THE INVESTMENT MADE IN THE PLANT & MACHINERY AND BUILDING. THE INVESTMENT WAS MADE TILL 31.03.2002 WAS CONSIDERED IN THE APPLIC ATION ITSELF PROVED THAT PLANT WAS READY TO PUT TO U.SE BY 31.03.2002. THAT PRIOR TO COMMENCEMENT OF PRODUCTION WATER CONNECTIO N WAS TAKEN 6N 11.02.2002. SINCE BUILDING WAS COMPLETED PRIOR TO 3 1.03.2002 AND NO ADDITIONAL AMOUNT TOWARDS WATER BILL WAS PAID BY TH E APPELLANT. 4.1.3 THE SALES TAX REGISTRATION WAS OBTAINED AFTER COMPLETION OF THE PLANT WHEN PLANT WAS READY FOR PRODUCTION AND SALE. T HE SALES TAX REGISTRATION ITSELF PROVED THAT PLANT WAS READY FOR PRODUCTION. FOR THE PRODUCTION OF TRANSFORMER NO BIG PLANT WAS REQUIRED. BILLS FOR PLANT & MA CHINERY WAS ALSO PRIOR TO MARCH 2002 AND THERE WAS N O MAJOR TIME REQUIRED FOR INSTALLATION OF THE PLANT & MACHIN ERY. THAT FROM THE BALANCE SHEET IT APPEARS THAT MAJOR INVESTMENT WAS MADE PRIOR TO MARCH 2002 AND PLANT WAS ALSO READY FOR COMMENCEMENT 0F PRODUCTION AND THEREFORE NOTE AS APPENDED WITH THE' AUDITED FINAL ACCOUNTS WAS CORRECT. THE APPELLANT CLAIMS THAT PLA NT WAS READY TO PUT TO USE FOR PRODUCTION BUT IN ABSENCE OF ORDER FRO M THE ELECTRICITY BOARD ACTUAL PRODUCTION WAS NOT YET STARTED. THE AP PELLANT IN SALES TAX DEPARTMENT ALSO OBTAINED REGISTRATION UNDER THE PROFESSIONAL TAX FOR PAYMENT OF PROFESSIONAL TAX LIABILITY. THE APPE LLANT ONLY AFTER COMPLETION OF THE PLANT APPLIED FOR TENDER WITH THE M AHARASHTRA ELECTRICITY BOARD. THE PLANT. OF THE APPELLANT AT A KOLA [MAHARASHTRA] WAS STARTED FOR SUPPLY TO THE ELECTRICITY BOARD IN MA HARASHTRA ONLY. SINCE THE ORDER WAS FINALIZED LATE IN 2002 AND AT THE BEGINNING IN 2003 THE ACTUAL SALE WAS ON 11.03.2003. THAT IN 'F ORM THERE WAS NO COLUMN TO PUT TWO DATES. ONE FOR PLANT READY TO PUT TO USE WHICH III THE PRESENT CASE IS PRIOR TO 31.03.2002 AND ANOTHER ACTUAL DATE OF COMMENCEMENT OF PRODUCTION WHICH IN THE PRESENT CASE IS 11.03.2003. FOR THIS REASON DATE OF COMMENCEMENT WAS MENTIONE D AS 11.03.2003. 4.1.4 SINCE THE PLANT WAS READY TO PUT TO USE BY 31 .03.2.002 BUT THE ACTUAL PRODUCTION WAS STARTED ON 11.03.2003. FOR THIS REASON SALES WAS SHOWN AT RS 15 67 404/-. THE SAID CONTENTION SUP PORTS THE CLAIM OF THE APPELLANT. SINCE THE PLANT OF THE APPELLANT WAS READY TO PUT TO USE AND THEREFORE CLAIM OF DEDUCTION U/S'80LB '[3] OF T HE ACT WAS LEGAL AND PROPER. THE DECISIONS AS REFERRED BY THE ASSESSI NG OFFICER WERE MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 12 DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE AN D THE SAME HAS BEEN DISCUSSED ABOVE. WHEN DEDUCTIONS AS CLAIMED BY THE APPELLANT WERE ALLOWED IN THE INITIAL ASSESSMENT YEARS ALTER DULY EXAMINING THE CLAIM OF THE ASSESSEE IN THAT CASE THERE WAS NO RE ASON IN THE SUBSEQUENT YEAR TO DIFFER THE SAME AND WITHDRAW THE C LAIM OF DEDUCTION AS ALLOWED U/S 80LB OF THE ACT. THEREFORE THE ADDITION MADE BY THE AO AMOUNTING TO 42 92 354/- IS DELETED. THE APPEAL ON THESE GROUNDS IS ALLOWED. 17. FROM PERUSAL OF THE ABOVE FINDING AS WELL AS TH E DOCUMENTARY EVIDENCES PLACED BEFORE US IN THE PAPER BOOK INCLUD ING WATER CONNECTION ELECTRICITY CONNECTION MAHARASHTRA POL LUTION CONTROL BOARD REGISTRATION SALES TAX REGISTRATION PROFESS IONAL TAX REGISTRATION AND THE DATE OF INSTALLATION OF MACHI NERY AND FOUND THAT ALL THESE EVENTS OCCURRED BEFORE 31.03.2002 WH ICH WAS THE DEADLINE FOR COMMENCING THE COMMERCIAL PRODUCTION. LD. DR FAILED TO REBUT THIS FACT BY PLACING ANY CONTRARY MATERIAL. 18. WE THEREFORE UNDER THE GIVEN FACTS AND CIRCUM STANCES OF THE CASE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT AND THUS FIND NO REA SON TO INTERFERE IN THE FINDING OF LD. CIT(A) ALLOWING THE ASSESSEES C LAIM OF DEDUCTION U/S 80IB OF THE ACT AT RS.42 92 354/-. WE ACCORDING LY DISMISS REVENUES GROUND NOS. 2 3 4 5 & 6. ACCORDINGLY ALL THE GROUNDS RAISED BY THE REVENUE FOR A.Y.2010-11 ARE DISMISSED. NOW WE TAKE UP REVENUES APPEAL FOR A.Y.2011-12 19. GROUND NO.1 & 2 CHALLENGES THE ACTION OF LD. CI T(A) HOLDING THE REOPENING PROCEEDINGS BEING NOT JUSTIFIED AND NOT I NITIATED VALIDLY AND THE REMAINING GROUNDS 3 TO 6 RELATES TO DEDUCTI ON U/S 80IB OF MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 13 THE ACT. 20. BRIEF FACTS OF THE CASE ARE THAT E-RETURN OF IN COME FOR A.Y. 2011- 12 WAS FILED ON 22.09.2011 DECLARING TOTAL INCOME A T RS.74 20 390/-. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 2 7.03.2014 DETERMINING INCOME AT RS.75 45 390/-. NOTICE U/S 14 8 OF THE ACT WAS ISSUED ON 16.03.2015 WHICH WAS BASED ON THE INFORMA TION RECEIVED ON THE BASIS OF AUDIT OBJECTION ALLEGING WRONG CLAI M OF DEDUCTION U/S 80IB OF THE ACT. REASSESSMENT PROCEEDINGS WERE INIT IATED AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DEDUCTI ON U/S 80IB OF THE ACT AT RS.59 15 999/- WAS DENIED AND INCOME ASS ESSED AT RS.1 34 61 390/-. 21. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND PARTLY SUCCEEDED. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 22. LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. AO. 23. PER CONTRA LD. COUNSEL FOR THE ASSESSEE APART FROM RELYING THE FINDING OF LD. CIT(A) ALSO REFERRED TO THE WRIT TEN SUBMISSIONS AND PAPER BOOK RUNNING FROM PAGES NO.1 TO 211 WHICH INTER ALIA INCLUDES THE PLETHORA OF JUDGMENTS ON WHICH THE REL IANCE HAS BEEN PLACED. 24. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUES FIRST GRIEVANCE THROUGH GROUND NO.1 & 2 IS WITH REGARD TO THE REOPENING OF THE ASSESSMENT BEING HEL D TO BE INVALID BY MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 14 THE LD. CIT(A). RECORDS CLEARLY SHOW THAT REOPENING WAS MADE ANY ON THE BASIS OF AUDIT OBJECTION GIVING SOME INFORMATIO N ABOUT THE WRONG CLAIM OF DEDUCTION U/S 80IB OF THE ACT. WE OBSERVE THAT LD. CIT(A) AFTER CONSIDERING SETTLED JUDICIAL PRECEDENCE AND T HE JUDGMENTS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE HELD THE REOPEN ING U/S 147 OF THE ACT AS INVALID OBSERVING AS FOLLOWS: GROUND NO.1 2 7 & 3:- THROUGH THESE GROUNDS OF APPE AL THE APPELLANT HAS CHALLENGED THE RE-OPENING U/S 147 OF T HE I.T. ACT. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BY THE APPELLANT. THE AO HAS RECORDED HIS REASONS FOR RE-OP ENING AND THE SAID REASONS ARE AS UNDER: IN THIS CASE THE ASSESSEE COMPANY WAS ENGAGED IN TH E MANUFACTURING OF TRANSFORMER AND FEEDER PILLARS FILE D ITS RETURN OF INCOME FOR A.Y. 2011-12 ON 22.09.2011 DECLARING TOTA L INCOME OF RS.74 20 390/-AFTER CLAIMING DEDUCTION U/S 80IB FOR R S.59 15 999/- FOR ASHOK UNIT WHICH WAS PROCESSED U/S 143(1). THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) ON 27.3.2014 AT A TOTA L INCOME OF RS.75 45 390/-. 2. DURING THE COURSE OF ASSESSMENT PROCEEDING FOR A .Y.2012-13 IT IS NOTICED THAT THE AKOLA UNIT HAS REGISTERED IN MAHARAS HTRA AS SMALL SCALE INDUSTRIES AND COMMENCED THE PRODUCTION ACTIVIT Y ON 11.3.2003( AS PER REPORT FURNISHED IN FROM 10CCB CER TIFIED BY THE CHARTERED ACCOUNTANT) 3. HOWEVER IT IS FOUND THAT THE AKOLA DISTRICT NEIT HER COVERED IN CATEGORY A INDUSTRIAL BACKWARD DISTRICT NOR WAS COVE RED IN CATEGORY B. THEREFORE ASSESSEE COMPANY WAS ELIGIBLE FOR DEDUCTION U/S 80IB(5). FURTHER AS PER CONDITIONS OF 80IB(3). THE PRODUCTION OF COMPANY SHOULD BE STARTED BETWEEN 1 ST APRIL 1991 TO 312.3.2002. SINCE THE ASSESSEE COMPANY HAS STARTED THE PRODUCTION ON 11.3.2003 I.E. BEYOND THE PERIOD PRESCRIBED AS SUCH AN D NOT ELIGIBLE FOR CLAIMING THE DEDUCTION U/S 80IB(3). 4. IT IS ALSO NOTICED THAT THE ASSESSEE COMPANY HAS ALSO CLAIMED DEDUCTION OF RS.59 15 999/- U/S 80IB FOR THE YEAR UND ER CONSIDERATION I.E. 2011-12. AS DISCUSSED ABOVE THE AS SESSE COMPANY DOES NOT FULFILL THE CONDITION OF CLAIMING DEDUCTION U/S 80 IB AS SUCH THE CLAIM IS NOT ALLOWABLE TO THE ASSES SEE COMPANY. 5. THEREFORE I HAVE REASON TO BELIEVE THAT INCOME AMOUNTING TO MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 15 RS.59 15 999/- HAS ESCAPED ASSESSMENT WITHIN THE MEA NING OF SECTION 147 OF THE ACT. FROM THE REASONS AS RECORDED IT IS CLEAR THAT THE VE RY BASIS OF FORMING THE FOUNDATION FOR INITIATING RE-ASSESSMENT PROCEEDINGS IS THE AUDIT REPORT IN FORM NO.10CCB ALREADY ON RECORD. THE APPELLANT HAD BEEN ALLOWED DEDUCTION U/S 80IB OF THE ACT IN THE EARLIER YEARS AND DURING THE YEAR UNDER CONSIDERATION WHILE PASSING THE ORIGINAL ORDER U/S 143(3) OF THE IT ACT. THIS DENOTES THE APP LICATION OF MIND OF THE AO ON THE ELIGIBILITY OR OTHERWISE OF THE APPEL LANT FOR THE CLAIM OF DEDUCTION 80IB. THUS ALL THE PRIMARY FACTS WERE DISC LOSED IN THE RETURN OF INCOME AS FILED. IT HAS BEEN LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA (32 0 ITR 561 CITED ABOVE) THAT REASONS TO BELIEVE CANNOT BE EQUATED WITH CHANGE OF OPINION. ADMITTEDLY IN THE INSTANT CASE BETWEEN TH E DATE OF ORDER OF ASSESSMENT SOUGHT TO BE REOPENED AND THE DATE OF FOR MING AN OPINION THAT INCOME HAS ESCAPED ASSESSMENT NOTHING NEW HAS HAPPENED. THERE HAS BEEN A FRESH APPLICATION OF MIN D BY THE AO ON THE EXISTING. SAME SET OF FACT THUS IT AMOUNTS TO ONLY A CHANGE OF OPINION. IN THE CASE OF THE KELVINATOR OF INDIA LTD . IT HAS BEEN HELD THAT THE AO DOES NOT HAVE THE POWER TO REVIEW THE DE TAILS ALREADY ON RECORD REGARDING THE CLAIM OF DEDUCTION U/S 80IB. A LL THE RELEVANT INFORMATION WAS DISCLOSED IN THE RETURN FILED ACCOMP ANIES WITH THE AUDIT REPORT. UNDER THE CIRCUMSTANCES REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BASED ON THE CHANGE OF OPINION ON THE SAME SET OF ACTS THAT WERE ALREADY AVAILABLE ON RECORD AND CO NSIDERED BY THE AO. HENCE IT IS HELD THAT THE RATIO OF THE JUDGMENT OF HON'BLE SUPREME COURT IN CIT VS. KELVINATOR OF INDIA LTD. AP PLIES AND HENCE IT IS HELD THAT PROCEEDINGS LEADING TO ISSUE OF NOT ICE U/S 148 HAVE NOT BEEN VALIDLY INITIATED. THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANUFACT URING OF TRANSFORMERS AND SWITCH GEARS. THE ASSESSMENT FOR T HE YEAR UNDER CONSIDERATION WAS COMPLETED U/S 143(3) BY ALLOWING TH E DEDUCTION U/S 80IB OF THE ACT CLAIMED BY THE APPELLANT. THE A O SUBSEQUENTLY NOTICED THE APPELLANT HAS COMMENDED MANUFACTURING ACT IVITY ON 11.32003 WHEREAS AS PER THE PROVISIONS OF SECTION 8 0IB(3) THE PRODUCTION SHOULD HAVE STARTED BEFORE 31.3.2002. THE A PPELLANT HAD BEEN ALLOWED DEDUCTION U/S 80IB OF THE IT. ACT IN TH E EARLIER YEARS AND HENCE THE AO HAS REOPENED THE ASSESSMENT ONLY ON CHANGE OF OPINION. THE DETAILS RELATED TO THE DEDUCTION CLAIMED U /S 80IB WAS AVAILABLE BEFORE THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS PERTAINING TO THE ASSESSMENT YEAR 2005-06 2006-07 2010-11 AND 2011-12 WHICH HAS BEEN COMPLETED U/S 143(3) OF THE I .T. ACT. THE MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 16 AO HAS NOT BROUGHT OUT ANY FRESH MATERIAL ON RECORD THEREFORE REOPENING WAS DONE ON MERE CHANGE OF OPINION. THEREF ORE THE APPEAL ON THESE GROUNDS IS ALLOWED. 25. FROM PERUSAL OF THE ABOVE FINDING AS WELL AS TH E SETTLED JUDICIAL PRECEDENCE AND OUR FINDING IN THE CASE OF ASSESSEE FOR PRECEDING ASSESSMENT YEAR WE OBSERVE THAT THE CLAIM OF DEDUCT ION U/S 80IB OF THE ACT WAS ALREADY EXAMINED BY THE ASSESSEE DURING THE REGULAR ASSESSMENT PROCEEDINGS. THERE WAS NO NEW MATERIAL A VAILABLE ON RECORD WHICH COULD INDICATE THAT THE EXCESS OR WRON G CLAIM MADE BY THE ASSESSEE. ALL THE FACTS PERTAINING TO CLAIM OF DEDUCTION U/S 80IB OF THE ACT STOOD DULY FILED BEFORE THE ASSESSING OF FICER. CONSIDERING THE TOTALITY OF FACTS AND THE RATIO LAID DOWN BY HO N'BLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561(SC) THAT REASONS TO BELIEVE CANNOT BE EQUATED WITH CH ANGE OF OPINION. WE THEREFORE RESPECTFULLY FOLLOWING THE SAME ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT THE REOPENING OF ASSESSMENT FOR A.Y.2011-12 INVALID. THUS NO INTERF ERENCE IS CALLED FOR IN THE FINDING OF LD. CIT(A). THUS GROUND NO.1 & 2 RAISED BY THE REVENUE ARE DISMISSED. 26. NOW WE COME TO REMAINING GROUND NOS. 3 4 5 & 6 WHICH COMMONLY CHALLENGES THE FINDING OF LD. CIT(A) ALLOW ING THE DEDUCTION U/S 80IB OF THE ACT. WE FIND THAT THE LD. CIT(A) HAS ALLOWED THE CLAIM OBSERVING AS FOLLOWS: GROUND NO.3 4 5 & 6:- THROUGH THESE GROUNDS OF APPEA L THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.59 15 999 /- BY DISALLOWING THE CLAIM OF THE APPELLANT U/S 80IB OF THE ACT. THE APPELLANT HAS CLAIMED THE DEDUCTION U/S 80IB AS PER T HE RETURN OF MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 17 INCOME FILED ORIGINALLY. THE CLAIM U/S 80IB WAS SUPP ORTED BY AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME. THE CL AIM OF THE APPELLANT HAS BEEN EXAMINED IN TERMS OF SECTION 80IB (3) OF THE ACT. IT IS PROVIDED THAT IT MUST BEGIN TO MANUFACTURER OR PRODUCE ARTICLE OR THINGS DURING THE PERIOD BEGINNING ON 1.4.1995 AND ENDING ON 31.3.2002. THE APPELLANT COMPANY STARTED THE COMMERC IAL PRODUCTION WITHIN THE ELIGIBILITY PERIOD AS PRESCRIB ED IN SUB-SECTION 2 OF CLAUSE 3 OF SECTION 80IB. THE APPELLANT COMPAN Y IS READY FOR MANUFACTURING ACTIVITIES WHICH CAN ALSO BE PROVED F ROM THE FOLLOWING: I. WATER CONNECTION WAS ALLOWED BY THE MIDC DATED. 11.2 .2002. II. ELECTRICITY CONNECTION WAS INSTALLED FOR 40HP ON 16. 1.2002. III. MAHARASHTRA POLLUTION CONTROL BOARD REGISTRATION WAS ISSUED ON 28.2.2002 IV. SALES TAX REGISTRATION WAS ALSO OBTAINED BY THE ASSE SSE ON 12.2.2002. V. PROFESSIONAL TAX REGISTRATION WAS OBTAINED ON 15.2. 2002. VI. MACHINERY WAS INSTALLED AND READY FOR COMMENCEMENT OF PRODUCTION BY MARCH 2002. 4.2.1 THE APPELLANT IN RESPONSE TO THE OPEN BID OF T ENDERS FILED ITS TENDER ON 2 ND MARCH 2002 WHICH WAS OPENED ON 16.3.2002 AND THE SAME WAS SUCCESSFULLY AWARED TO THE APPELLANT. T HE APPELLANT COMPANY HAS APPLIED FOR TENDER ONLY AFTER COMPLETIO N OF THE CONSTRUCTION OF FACTORY BUILDING AND AFTER INSTALLAT ION OF THE PLANT & MACHINERY. THE ABOVE FACTS WERE DULY EXAMINED BY THE THEN ASSESSING OFFICER AT THE TIME OF PASSING OF THE ASS ESSMENT ORDER AND THEREFORE CLAIM OF DEDUCTION U/S 80IB(3) WAS ALLOW ED TO THE APPELLANT. THE PLANT OF THE APPELLANT COMPANY WAS R EADY FOR PUT TO USE AND ENTIRE MACHINERY WAS INSTALLED. BUILDING WAS COMPLETED AND ALL OTHER CONNECTIONS WERE OBTAINED BY THE APPEL LANT COMPANY. THE CLAIM OF THE APPELLANT WAS ALSO EXAMINED IN DETA ILED WHILE PASSING THE ASSESSMENT ORDER FOR THE ASSESSMENT. YE ARS 2005-06 AND 2006-07 I.E. IN THE FIRST YEARS OF PROFIT AND AF TER BEING SATISFIED WITH THE EXPLANATION OF THE APPELLANT. THE CLAIM WA S ACCEPTED U/S 80IB OF THE ACT. 4.2.2 THE AO IS NOT JUSTIFIED IN DENYING THE CLAIM O F THE APPELLANT U/S 80IB BECAUSE: THE PLANT OF THE APPELLANT WAS READY FOR PRODUCTION BY 31.3.2002 AND FOR WANT OF ORDER FROM THE ELECTRICITY BOARD TH E COMMERCIAL PRODUCTION STARTED ON 11.3.2003. THE APPELLANT CONTE NDED THAT PLANT WAS READY FOR PRODUCTION BUT DUE TO DELAY IN ORDE R FROM THE ELECTRICITY BOARD COMMERCIAL PRODUCTION WAS STARTE D ON 11.3.2003. MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 18 IN THE APPLICATION AS FILED FOR PERMANENT REGISTRATI ON ALSO MENTIONED THE INVESTMENT MADE IN THE PLANT & MACHINERY AND BUIL DING. THE INVESTMENT WAS MADE TILL 31.3.2002 WAS CONSIDERED I N THE APPLICATION ITSELF PROVED THAT PLANT WAS READY TO PUT TO USE BY 31.3.2002. THAT PRIOR TO COMMENCEMENT OF PRODUCTION WATER CONNECTION WAS TAKEN ON 11.2.2002. SINCE THE BUILDI NG WAS COMPLETED PRIOR TO 31.3.2002 AND NO ADDITIONAL AMOUNT TOWARDS WATER BILL WAS PAID BY THE APPELLANT. 4.2.3 THE SALES TAX REGISTRATION WAS OBTAINED AFTER COMPLETION OF THE PLANT WHEN PLANT WAS READY FOR PRODUCTION AND SALE. T HE SALES TAX REGISTRATION ITSELF PROVED THAT PLANT WAS READY FOR P RODUCTION. FOR THE PRODUCTION OF TRANSFORMER NO BIG PLANT WAS REQUI RED. BILLS FOR PLANT AND MACHINERY WAS ALSO PRIOR TO MARCH 2002 AN D THERE WAS NO MAJOR TIME REQUIRED FOR INSTALLATION OF THE PLANT AND MACHINERY. THAT FROM THE BALANCE SHEET IT APPEARS THAT MAJOR I NVESTMENT WAS MADE PRIOR TO MARCH 2002 AND PLANT WAS ALSO READY FOR COMMENCEMENT OF PRODUCTION AND THEREFORE NOTE AS APPE NDED WITH THE AUDITED FINAL ACCOUNTS WAS CORRECT. THE APPELLAN T CLAIMS THAT PLANT WAS READY TO PUT TO USE FOR PRODUCTION BUT IN ABSENCE OF ORDER FROM THE ELECTRICITY BOARD ACTUAL PRODUCTION WAS NO T YET STARTED. THE APPELLANT IN SALES TAX DEPARTMENT ALSO OBTAINED R EGISTRATION UNDER THE PROFESSIONAL TAX FOR PAYMENT OF PROFESSION TAX LIABILITY. THE APPELLANT ONLY AFTER COMPLETION OF THE PLANT AP PLIED FOR TENDER WITH THE MAHARASHTRA ELECTRICITY BOARD. THE PLANT OF THE APPELLANT AT AKOLA WAS STARTED FOR SUPPLY TO THE ELECTRICITY B OARD IN MAHARASHTRA ONLY. SINCE THE ORDER WAS FINALIZED LAT E IN 2002 AND AT THE BEGINNING IN 2003 THE ACTUAL SALE WAS ON 11 .3.2002. THAT IN FORM THERE WAS NO COLUMN TO PUT TWO DATES. ONE FOR PLANT READY TO PUT TO USE WHICH IN THE PRESENT CASE IS PRIOR TO 31 .3.2002 AND ANOTHER ACTUAL DATE OF COMMENCEMENT OF PRODUCTION WH ICH IN THE PRESENT CASE IS 11.3.2003. FOR THIS REASON DATE OF COMMENCEMENT WAS MENTIONED AS 11.3.2003. 4.2.4 SINCE THE PLANT WAS READY TO PUT TO USE BY 31. 3.2002 BUT THE ACTUAL PRODUCTION WAS STARTED ON 11.03.2003. FOR TH IS REASON SALES WAS SHOWN AT RS.15 67 404/-. THE SAID CONTENTION SUP PORTS THE CLAIM OF THE APPELLANT. SINCE THE PLANT OF THE APP ELLANT WAS READY TO PUT TO USE AND THEREFORE CLAIM OF DEDUCTION U/S 80 IB (3) OF THE ACT WAS LEGAL AND PROPER. THE DECISIONS AS REFERRED B Y THE ASSESSING OFFICER WERE DISTINGUISHABLE ON THE FACT OF THE PRESENT CASE AND THE SAME HAS BEEN DISCUSSED ABOVE. WHEN DEDU CTIONS AS CLAIMED BY THE APPELLANT WERE ALLOWED IN THE INITIAL ASSESSMENT YEARS AFTER DULY EXAMINING THE CLAIM OF THE ASSESSEE IN THAT CASE MAHALAXMI INVESTMENT AND TRADING PVT. LTD. 19 THERE WAS NO REASON IN THE SUBSEQUENT YEAR TO DIFFE R THE SAME AND WITHDRAW THE CLAIM OF DEDUCTION AS ALLOWED U/S 80IB OF THE ACT. THEREFORE THE ADDITION MADE BY THE AO AMOUNTING TO RS.59 15 999/- IS DELETED. THE APPEAL ON THESE GROUN DS IS ALLOWED. 27. WE FURTHER FIND THAT IN THE PRECEDING ASSESSMEN T YEAR I.E. A.Y. 2010-11 THIS ISSUE HAS ALREADY BEEN EXAMINED BY US AND IN THE LIGHT OF FACTS AND DOCUMENTARY EVIDENCES HAVE HELD THAT AS THE APPELLANT COMPANY WAS READY FOR MANUFACTURING BEFOR E 31.03.2002 AND DEDUCTION CLAIMED BY THE ASSESSEE WERE ALLOWED IN THE INITIAL ASSESSMENT YEAR AND THE ASSESSEE IS ELIGIBLE FOR DE DUCTION U/S 80IB OF THE ACT. WE THEREFORE CONFIRM THE FINDING OF L D. CIT(A) AND DISMISS THE GROUNDS NO.3 4 5 & 6 RAISED BY THE REVE NUE. 28. IN RESULT APPEALS FILED BY THE REVENUE IN ITA NO.955 & 956/IND/2016 AND CROSS OBJECTIONS NO.02 & 03/IND/20 20 FILED BY THE ASSESSEE ARE DISMISSED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. RULES 1963 ON 25.05.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEMBER INDORE; DATED : 25 /05/2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR INDORE