M/S. KORPE PRECISION SCALES PRIVATE LTD.,DEHRADUN vs. ACIT, HARIDWAR

The brief facts of the case are that assessee filed its return of income declaring total income of Rs. NIL and the Book Profit of Rs. 30,44,022/- has been declared and deduction claimed u/s. 80IC of the said amount.

Ld. Counsel for the assessee during the hearing filed a Paper Book containing pages 1 to 50 having the copy of submissions of assessee; DIC Certificate of Appellant Assessee; copy of cit(a) order; copy fo a assessment order; electricity bills; Service Tax Registration of assessee; NOC From Pollution Board; Electricity Connection Receipt; Audit Report and Balance Sheet, Profit And Loss Account; Excise Return of assessee. He submitted that the sole matter of appeal is the claim of deduction u/s. 80IC has been reduced to 50% of the total claim, by the AO on the basis of his assumptions, preconceived notion and on estimate basis and the said opinion of AO has also been upheld and confirmed by the Ld. CIT(A). He further submitted that the this frivolous ground sustained by the AO for making such imagination was that bills of few plant and machinery was of February, 2009 and hence, only production of February, 2009 and March, 2009 was assumed to be genuine according to AO and balance production was not assumed to be genuine. He further submitted that the produce of assessee was to be manufactured in different stages and it is only when all the stages were combined then only the finished product was to be manufactured. He further submitted that it is important to note that the manufacturing was being done by the assessee since October, 2008 and yet the product was completely manufactured in 2 February, 2009 and filed a chart in this behalf before the Tribunal. Hence, he requested that arbitrary disallowance may be deleted.

On the other hand, Ld. DR relied upon the order of the Ld. CIT(A) and stated he has passed a well reasoned order, which does not need any interference on our part.

I have heard both the parties and perused the records especially the impugned order. I note from the copies of bills produced for inspection that the final bit of plant and machinery could only be delivered around 26.2.2009 and one finds it difficult to believe, that the plant and machinery was installed much before the dates on the bills. This contention cannot be believed because in one case it is clearly mentioned that the date of placement of order preceded the date on the bill by a few days. In any case, if the assessee is to be believed then the manufacturing process was going on either with the help of plant and machinery which was installed much earlier to the dates shown on the respective bills or the manufactured items do not require the said plant and machinery. Both assumptions are faulty and not realistic; rather these theoretical constructs aim to confuse the issues for some perceived gain of the assessee not legally due to him. The manufactured items became marketable only after all the plant and machinery could be installed. However, this argument is devoid of merit because the items shown as manufactured are presumably finished items and they have been shown as such in the books. This discussion leads to the inescapable conclusion that for reasons best known only to the assessee manufactured items have been shown firm from October, 2008 even though the full complement of plant and machinery only started arriving from December, 2008 onwards. Therefore, Ld. CIT(A) has rightly upheld the AO’s actions, being reasonable considering the nature of the problem before him, are supported in full and correctly upheld the addition, which does not need any interference on my part, hence, I uphold the action of the Ld. CIT(A) on the issue in dispute and reject the grounds raised by the Assessee.

In the result, the Appeal of the Assessee is dismissed.