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Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI N.K. BILLAIYA
ORDER PER H.S. SIDHU, JM
The Revenue has filed this Appeal against the Order dated 17.11.2014 passed by the Ld. CIT(A), Dehradun relevant to assessment year 2010-11 on the following grounds:- 1
1. That the Ld. CIT(A) has erred in law and on facts in allowing deduction u/s. 80IC of the I.T. Act, 1961 to the assessee without
investigating the assessee’s claim for the eligibility for the said deduction or having the same investigated by the AO.
2. The order of Ld. CIT(A) be set aside and that of the AO be restored.
The brief facts of the case are that assessee filed e-return on 14.9.2010 declaring NIL taxable income. The case of the assessee was selected for scrutiny through CASS accordingly, notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred as the Act) dated 15.9.2011 was issued to thte assessee, but returned back as unserved. Thereafter, notice was served by affixture at the main gate wall of the given address on 30.9.2011. The notice was also served through a partner of the firm Smt. Santosh Jain, but no compliance of the notices were made by the firm. Again notice u/s. 142(1) of the Act dated 28.8.2012 was sent to the assessee fixing the case for 13.9.2012, but none attended the hearing nor any written submissions was filed by the assessee. Again notice u/s. 142(1) dated 4.10.2012 was issued at the address of one of the partner, but again none attended the hearing nor any written submission was filed by the assessee. On 13.12.2012 a show cause notice u/s. 144 of the Act was issued by speed post to the assessee on the given address as well as through the partner of the firm fixing the case for 17.12.2012, but no result. Later on 15.1.2013, the A.R. of the assessee furnished power of attorney in his favour on 22.2.2013 and attended the proceeded from time to time and furnished written submissions which was examined and placed on record. The assessee deals in the manufacturing and sale of the perfumery fragrances. The Assessee produced the Cash Book, Ledger and few bills of purchases for verification. The Assessing Officer opined that the cash book, ledger and sales & purchase bills appear to have been created during the assessment proceedings and were not genuine. The AO further observed that the assessee firm had claimed deduction of Rs.3,76,64,321/- u/s 80lC of the I.T. Act, 1961 vide various. correspondences, the assessee was asked to submit necessary evidence in support of the claim. The Assessing Officer asked 3 him to furnish original NOC from the DIG office, certificate of starting & closing of manufacturing unit, monthly sales tax return, audited balance sheet, statement of bank accounts, PAN of the partner of the firm, evidence of rent paid and ownership land on which unit is located, copy of challans in respect of payment of VAT, partnership deed, comparative chart of manufacturing account including the consumption of materials and electric consumption of last 3 years. On the appointed date of hearing i.e. 8.3.2013, nobody appeared. A final show cause notice was issued fixing the date for 12.3.2013. The AO alongwith its Inspector also carried out a site inspection of the Kotdwar and made local enquiries. The AO did not find any signs of any manufacturing factory there, therefore, the AO issued a show cause notice to the assessee asking why the evidence produced should not be considered as bogus and why in the absence of any factory or anything else it should not be considered that the claim u/s. 80IC of the I.T.
Act, 1961 should be denied and added back to the income of the firm. A notice u/s. 131 of the Act was also issued to the owner of the plot, who appeared before the AO on 12.3.2013 and submitted that manufacturing activity were not carried out 4 by the concern of the said plot. In view of the above, the AO disallowed the claim u/s. 80IC of the I.T. Act, 1961 and added back a sum of Rs. 3,76,04,321/- to the income of the assessee and completed the assessment u/s. 143(3) of the Act vide order dated 18.3.2013 at Rs. 3,76,04,320/-. Against the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 17.11.2014 deleted the addition in dispute and by following the Tribunal’s order in assessee’s own case for the assessment year 2009-10 has allowed the appeal of the assessee. Aggrieved with the impugned order, the Revenue is in appeal before the tribunal.
Ld. DR relied upon the Order of the AO and reiterated the contentions raised in the grounds of appeal.
In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor its authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, we are of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records.
We have heard the Ld. DR and perused the records, especially the impugned order. We find that Ld. CIT(A) has elaborately discussed the issue in dispute vide para no. 11 of impugned order and observed that ITAT in assessee’s own case for the assessment year 2009-10 was convinced of the existence of a manufacturing unit relevant to that year that did not use electricity for manufacturing. On the issue of whether the process adopted by the assessee amounted to manufacture, the ITAT relied upon the judgment of the Hon’ble Uttarakhand High Court in the case of DCIT vs. Natural Fragrances in of 2012 which in turn confirmed the decision of the ITAT in ITA No. 4163/Del/2011, wherein it was held that creation of perfumery compound by mixing, steaming, distilling and vaporization amounts to manufacturing of an article or thing and fulfills the conditions for claiming deduction u/s. 80IC of the Act. Accordingly, the ITAT concluded that the assessee too was engaged in manufacturing of a product and was entitled to deduction u/s.80IC, accordingly, Ld. CIT(A) rightly deleted the addition of Rs. 3,76,04,321/-, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) and reject the ground raised by the Revenue.
In the result, the Appeal filed by the Revenue stands dismissed.
Order pronounced on 05/06/2018.