Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGH & DR. DIPAK P. RIPOTE
आदेश / O R D E R
PER DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-13, Chennai, dated 20.09.2017and pertains to assessment year 2001-02.
The assessee has raised following grounds of appeal:
1.1 The Learned Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer denying the claim of deduction u/s.80IA on the ground the value of transferred plant and machinery is more than twenty percent of the total value of new unit thereby attracting the provisions of clause (ii) to sub section 3 of sec 801A of the Act.
M/s.Turbo Energy Pvt. Ltd. :: 2 ::
1.2 The Ld C1T(A) failed to appreciate that the said clause viz clause (ii) to sub section 3 of sec 801A does not apply to the appellant's new Industrial undertaking that was formed independently at Pulivalam and not by transfer of then existing plant and machinery at Sholingur. Hence the deduction claimed could not have been disallowed.
1.3 The Ld C1T(A) failed to note that the department had been consistently takingstand that the new business commenced at Pulivalam from Assessment year1992=23 onwards was a new independent undertaking for the purpose of sec.80HH of the Act and therefore for the same set of facts the department could nothave taken contradictory stands thereby disentitling the claim for deduction u/s.80IA for the new unit at Pulivalam.
Your Appellant craves leave to add amend and or vary the grounds of Appeal before or during the course of hearing.
The Ld.AR submitted that the Hon’ble ITAT in 1734 & 1735/Chny/2006 & CO Nos.143, 144 & 145/Chny/2007, vide order dated 10.12.2019 for the AYs 1995-96, 1996-97 & 1997-98, has remitted the issue of the assessee’s eligibility for deduction u/s.80IA of the Act, to the Ld.CIT(A) for denovo adjudication in accordance with law. Therefore, the Ld.AR pleaded that since the issue involved is same, the ITAT direction in ITA Nos.1733, 1734 & 1735/Chny/2006 & CO Nos.143, 144 & 145/Chny/2007, may kindly be followed and matter may kindly be remitted to the Ld.CIT(A) for denovo adjudication in accordance with law.
The Ld.DR strongly opposed and made Written Submissions, which is reproduced here as under:
During the course of hearing, the counsel for the Assessee submitted that, in the assessee's own case for AY-1995-96 to AY-1997-98, the hourable ITAT, Chennai has remitted back to the file of the CIT(A) to adjudicate the matter on whether the assessee is eligible to claim deduction u/s 80IA. Hence, even the present appeal for AY-2001-02 also needs to be remitted back as the issue involved is the same. In this connection, the Department submits the following reasons as to why the case shall not be remitted back to CIT(A)'s.
In the Assessment Orders involved for AY-1995-96 to AY-1997-98, neither the AO nor the CIT(A) has adjudicated the matter of eligibility of deduction u/s 80IA while denying the claim of deduction u/s 80HH. Hence as per the directions given
M/s.Turbo Energy Pvt. Ltd. :: 3 :: by the High Court of Chennai. the Honourable ITAT had to remit the matter back to adjudicate the same. However, in the present appeal, both the Assessing Officer as well as the CIT(A) has elaborately analyzed the eligibility of deduction u/s 80IA by studying in detail the provisions of the law in relation with the facts of the assessee's case such as installation of plant and machinery in the initial year of setting up of the manufacturing unit which fell on AY-1992-93. By remitting the present case to the files of the CIT(A)'s or the Assessing Officer, no purpose can be served as the facts, which they have already brought on record, are not going to change nor the assessment order. Hence it is futile and waste of time and resources of all the authorities. Further, it may be pointed out that the Initial year of setting-up of the business undertaking is in the FY-1991-92 i.e. AY- 1992-93 and this assessment is not under review by any of the authorities.
Another reason as to why the case should not be remitted back to the file of either Assessing Officer or the CIT (A)'s is that the method of working of the Department has undergone a sea change and it is uncertain as to which authority, situated in which place, will the case gets assigned in a Faceless Assessment and Appeal scheme. In all probability, these officers would be forced to conclude the proceeding without access the existing case records and facts already collected in the initial assessment stage. Such action will be prejudicial to the interest of the Government.
We have heard both the parties, perused the materials available on record. It is an admitted fact that in 1734 & 1735/Chny/2006 & CO Nos.143, 144 & 145/Chny/2007 vide order dated 10.12.2019, has remitted the matter back to the file of the Ld.CIT(A) for denovo adjudication in accordance with law on the eligibility of the assessee for deduction u/s.80IA of the Act. There is no dispute that 80IA claimed in the year 1995-96, was for the plant for which 80IA has been claimed in current year also. It is observed from the order of the AO that the AO has merely stated in one line as under:
The value of old machinery at cost is Rs.89,59,499/- and the new machinery cost is Rs.2,32,37,301/-. The value of old machinery transferred to the new unit is morethan 20% of the total value of the plant and machinery. Hence, I confirm the action of the assessing officer stating that the assessee is not eligible for deduction u/s.80IA and the claim of deduction u/s 80IA amounting to Rs.5,51,02,410/- is not allowed. The ground of appeal on the issue for claim of deduction u/s 80IA is therefore dismissed.
M/s.Turbo Energy Pvt. Ltd. :: 4 ::
The Ld.CIT(A) also merely repeated the findings of the AO and confirm the assessment order. The Ld.CIT(A) or the AO has not explained how they have arrived at the figure of Rs.89,59,499/- for old machinery.
They have not explained whether these machineries were previously used for any purpose. Therefore, respectfully following the coordinate Bench decision in the assessee’s own case for AYs 1995-96 to 1997-98 (supra), the issue of eligibility of the assessee’s unit for deduction u/s.80IA is set aside to the Ld.CIT(A) for denovo adjudication. Both the parties are at liberty to file evidences in their support. The Ld.CIT(A) shall provide opportunity to the assessee.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced on the 26th day of August, 2022, in Chennai.