ACIT, NEW DELHI vs. M/S. VASUNDHARA FLAVORS, NEW DELHI

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ITA 6230/DEL/2016Status: DisposedITAT Delhi20 February 2020AY 2012-135 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal followed the decision of a co-ordinate bench for AY 2010-11. The co-ordinate bench had held that executing a partnership deed constituted the commencement of business, and no additional evidence was filed before the CIT(A) that warranted further opportunity for the AO.

What were the facts?

The revenue appealed against the CIT(A)'s order for AY 2012-13, which followed the predecessor's order for AY 2010-11. The core dispute involved the commencement date of business and the admission of additional evidence for claiming deduction under Section 80IC.

What were the issues?

Whether the commencement of business was correctly determined based on the partnership deed execution, and if additional evidence was improperly admitted by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 80IC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,

Before: SHRI N.K. BILLAIYA, & MS SUCHITRA KAMBLE

For Appellant: Shri Rano Jain, Adv, Shri Akshath Jain, CA
Hearing: 20.02.2020Pronounced: 20.02.2020

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the revenue is preferred against the order of the Commissioner of Income Tax (Appeals) – 19, New Delhi dated 06.09.2016 pertaining to Assessment Year 2012-13.

2.

The substantive grievances of the revenue read as under:

“2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in agreeing with the findings of his predecessor for A.Y. 2010-11 without appreciating the fact that plant and machinery relevant for production was purchased between 24.11.2009 to 06.01.2010, whereas the assessee had claimed commencement of its business on 02.11.2009 in form 10CCB, which is not possible. The eligibility for deduction u/s 80IC has to be decided in the first year of the business, which was A.Y. 2010-11 and the department has filed appeal before Hon’ble ITAT in that year, challenging the eligible criteria, inter-alia.

3.

On the facts and in the circumstances of the case, the Ld. C1T(A) has erred in agreeing with the finds of his predecessor for A.Y. 2010-11. in which additional evidence furnished by the assessee (during the course of appellate proceedings), including the evidences of transporting the plant and machinery from Delhi to Baddi, were admitted without giving any opportunity to the Assessing Officer of being heard. The department is already in appeal before Hon’ble ITAT on this issue in A.Y. 2010-11.

3. It can be seen from the aforementioned grievances of the revenue that the ld. CIT(A) has followed the order of his predecessor for Assessment Year 2010-11. The Revenue carried the matter before the Tribunal and the Tribunal in vide order dated 05.12.2019 has considered the issue and held as under:

“8. On Ground No.2, the Department's case is that plant and machinery were purchased between 24.11.2009 to 06.11.2010 whereas the assessee claimed commencement of business on 02.11.2009 in Form 10CCB. The assessee has, however, explained that on 02.11.2009 partnership deed was executed and thereafter, further developments were made by purchasing the plant and machinery and manufacturing activities have been started, the details of which, were noted above. Therefore, there is no illegality in the explanation of assessee that it has started its business activity by executing the partnership deed. Further, this fact has been clarified by the Chartered Accountant before the A.O.

9.

On Ground No.3, Revenue challenged that assessee furnished additional evidences before Ld. CIT(A) ITA.No.5950/Del./2015 M/s. Vasundhara Flavours (Presently known as Gopal Consumer World, New Delhi. and no opportunity have been given to the A.O. Learned Counsel for the Assessee has referred to submissions made before Ld. CIT(A), in which, several replies have been referred, which were filed before A.O, which are supported by documentary evidences. Therefore, no additional evidences have been filed before the Ld. CIT(A) so as to give further opportunity to the A.O. to rebut the claim of assessee. Further the impugned order shows that despite notifying the hearing of the appeal, none appeared from the side of the Department before the Ld. CIT(A). Therefore, no fault could be found with the Ld. CIT(A) in deciding the issue in favour of the assessee.”

4.

In the light of the decision of the co-ordinate bench, respectfully following the same, this appeal by the revenue is dismissed.

5.

In the result, the appeal of the revenue is dismissed.

The order is pronounced in the open court on 20.02.2020.

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