ITO, UTTRAKHAND vs. M/S. SHREE VEER AROMATIC HERBS PRODUCTS, UTTRAKHAND

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI

BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

I.T.A. No. 648/DEL/2015 A.Y. 2010-11 INCOME TAX OFFICER, VS. M/S SHREE VEER KOTDWAR, AROMATICS HERBS AAYAKAR BHAWAN, PRODUCTS, PATEL MARG, B-2/525, MANAV CHOWK KOTDWAR MODERN APARTMENT, SECTOR-15, ROHINI, DELHI – 110 085 (PAN: ABHFS6762K)

(APPELLANT) (RESPONDENT)

Department by : Sh. K. Tiwari, Sr. DR. Assessee by : None

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

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.

of the AO be restored.

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.

contentions raised in the grounds of appeal.

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.

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 ITA No. 24 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.

dismissed.

Order pronounced on 05/06/2018.

Sd/- Sd/-

[N.K. BILLAIYA] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER

Date 05/06/2018 “SRBHATNAGAR”