ITO 25(1)(2), MUMBAI vs. STATUS QUO LIFESTYLE CO., MUMBAI

आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the Revenue against the order of CIT(A)- 37, Mumbai dated 29/03/2016 for A.Y.2012-13 in the matter of the order passed u/s.143(3) of the IT Act. 2. In this appeal Revenue is aggrieved for deleting the disallowance of deduction u/s.80IC(ii) of the IT Act. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that assessee is a partnership firm with 4 partners and carries on its business of manufacturing readymade-garments at its factory situated in Himachal Pradesh which is a special category state; thus, the Assessee is entitled to claim its eligible deduction u/s.80-IC(ii).

M/s. Status Quo Lifestyle Co., The due date for filing return was on 30/09/2012, return was filed on 25/09/2012, however audit report was filed on 29/09/2012. The Assessing Officer disallowed the claim by holding that the Assessee has not furnished the Audit Report in Form No.1OCCB alongwith Return of Income. AO also observed as under: “In order to verify the purchase, notice u/s. 133(6) was issued to certain parties on random basis. Out of five parties, replies were received for 2 parties, the details of the claim as per assessee’s record and parties is as under:- Total Sales as per Sundry Sundry Purchases to parties account Creditors as Creditors as assessee (Rs.) (Rs.) per Assessee per parties (Rs. account (Rs. Good Good 2439150 2439150 64150 64150 Wears Sangam 17583211 24660308 9897730 9898101 Wearers P. Ltd. Excel 224900 NIL NIL NIL Enterprises J R Textiles 1317927 NIL NIL NIL Superwind 4085286 4567657 2421813 2421813 Knitters Ltd. It can be observed from the above chart that the balance payable by the assessee as sundry creditors, total purchase and payments made during the F.Y. are not in agreement with the books of the assessee. Total 5 notices issued to the parties, 2 have not been responded and replies received from 3 parties are tabulated as above. The above facts also shows that the accounts of the assessee have not been properly maintained but the auditors have certified that the balance sheet, profit and loss account are in agreement with the books of accounts maintained. In view of the above facts and circumstance of the case, the assessee is not entitled to claim the deduction u/s. 80IC(ii) of the IT. Act as the accounts of the assessee have not been audited in time and submitted alongwith the return of income. Hence the income' claimed as exempt of Rs. 1,28,18,818/- is added to the total income of the assessee. Penalty u/s. 271(1)(c) is hereby initiated for concealment of income.”