Income Tax Appellate Tribunal - Hyderabad
Visaka Industries Limited,Sec'Bad, ... vs Acit, Cir-3(3), Hyderabad on 28 February, 2018
ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' A ' Bench, Hyderabad
Before Smt. P. Madhavi Devi, Judicial Member
AND
Shri S.Rifaur Rahman, Accountant Member
ITA No.736/Hyd/2011
(Assessment Year: 2005-06)
M/s. Visaka Industries Ltd Vs Asstt. Commissioner of
Secunderabad Income Tax, Circle 3(3)
PAN: AAACV 7263 K Hyderabad
(Appellant) (Respondent)
For Assessee : Shri A.V. Sadasiva &
M.V.Anil Kumar
For Revenue : Smt. U. Minichandran, DR
Date of Hearing: 11.12.2017
Date of Pronouncement: 28.02.2018
ORDER
Per Smt. P. Madhavi Devi, J.M.
This is assessee's appeal for the A.Y 2005-06. In this appeal, the assessee has raised grounds of appeal numbering four along with Form-36 on 20.04.2011. Thereafter, the assessee vide letter dated "Nil", sought to raise additional grounds of appeal against the re-assessment proceedings u/s 148 of the Act. Subsequently, the assessee also revised its grounds of appeal along with a petition for acceptance of the revised grounds of appeal. Thereafter, vide letter dated 21.12.2015, the assessee has raised the rectified and revised grounds of appeal including the ground against the re-assessment proceedings u/s 148 of the Act. We find that the assessee had challenged the re-assessment proceedings before the CIT (A) and therefore, it is a regular ground Page 1 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
which can be raised along with Form No.36. Therefore, the rectified revised grounds filed on 21.12.2015 are only considered as regular grounds for adjudication of the assessee's appeal. The grounds raised therein are reproduced hereunder for the purpose of ready reference:
"1. The Assessing officer and CTT(A) has contrary to the provisions of section 80AB of the Income Tax Act, 1961 on a fictional basis adjusted the past losses and unabsorbed depreciation of the Midnapore unit from the current years eligible income of the Midnapore unit included all the Gross Total Income of the appellant computed according to the provision of the Income Tax Act, 1961
2. Your Appellant submits that Rule 18BBB had been complied with and the separate profit and loss Accounts and Balance Sheet of the undertaking has accompanied with the form 10CCB and the same should have been accepted by the Assessing Officer as well as the CTT(A) and allowed the deduction under Section 80IB of the Income Tax Act, 1961
3. Your Appellant Submits that the assessing officer has erred in making the assessment u/s. 148 of the Income Tax Act, 19610n a basis different from the reasons given while issuance of notice u/s. 148. Your appellant submits that such issues could have been considered only if the notice u/s. 148 of the income tax Act 1961 reassessment could be made only in respect of notices issued after the passing of finance act,2009
4. The Appellant submits that the assessing officer erred in disallowing a sum of Rs.65,000/- is respect of deduction u/s. 80G.
For these and such other grounds of appeal that may be urged at the time of hearing the Page 2 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
deduction under section 80IB may be allowed and the notice under section 147 may be quashed".
2. Brief facts of the case are that the assessee company, engaged in the business of manufacturing of Asbestos Cement Products, filed its return of income for the A.Y 2005-06 on 28.10.2005 declaring a total income of Rs.8,19,43,451. Subsequently the AO noticed that the assessee has been allowed deduction u/s 80IB even though it did not fulfill the conditions prescribed thereunder and therefore, income of the assessee has escaped assessment. Therefore, he issued a notice u/s 148 which was received by the assessee on 25.11.2008. In response to the said notice, the assessee filed a letter dated 24.12.2008 stating that the return filed on 28.10.2005 may be treated as the return filed in response to the notice u/s 148 of the Act. The assessee also sought communication of the reasons for reopening of the assessment. The AO communicated the reasons, against which, the assessee raised its objections vide letter dated 25.11.2009. The AO disposed of the objections of the assessee by a separate order dated 2.12.2009 and subsequently completed the assessment u/s 143(3) r.w.s. 147 of the I.T. Act vide orders dated 24.12.2009.
3. During the re-assessment proceedings, the AO observed that the assessee company has claimed deduction of Rs.2,96,87,778 u/s 80IB(5)(ii) of the Act in respect of its Midnapore Unit. She also observed that the assessee filed Form 10CCB in support of its claim along with its return of income. On Page 3 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
verification of the records, the AO observed that the Midnapore Unit has been engaged in the manufacture of Asbestos sheets and the date of commencement of the production by the Midnapore Unit is 1.3.2003 whereas in Form No.10CCB the initial A.Y in which the deduction is being claimed is mentioned as A.Y 2005-
06. The AO observed that as per the details furnished by the assessee, the initial A.Y should be the assessment year commencing with 1.4.2003, but the assessee has claimed deduction for the first time in the A.Y 2005-06. The AO therefore, asked the assessee to file proof of starting production of the Midnapore Unit. The assessee submitted that the production has already commenced during the financial year 2002-03 as mentioned in the annual report of the company for A.Y 2002-03 but that the claim is being made for the first time during the A.Y 2005-06.
4. While considering the assessee's claim of deduction, the AO observed that the assessee has not filed the details as per Rule 18BBB of the I.T. Rules r.w.s. 80IB and 80IA of the I.T. Act, which mandates that the assessee should furnish the audit report in support of its claim of deduction u/s 80I or section 80IA/80IB/80IC for the eligible unit separately and accordingly issued a notice to the assessee to furnish the same. In response to the notice, the assessee filed a separate P&L A/c and balance sheet of Midnapore Unit from inception. The AO noticed that such separate P&L A/c and Balance Sheet were not signed by the Chartered Accountant who has certified the Form 10CCB dated 27.10.2005 but that they were signed by the Authorized Signatory of the company. Further, taking into the consideration the Page 4 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
provisions of section 80IA(5)(ii) of the Act, the AO also observed that the eligible profit of the Unit is to be calculated as a separate business entity after adjusting the unabsorbed depreciation and loss of the earlier years. He, accordingly arrived at the eligible deduction u/s 80IB(5)(ii) of the Act at Rs. Nil and added back the sum of Rs.2,96,87,778 to the income of the assessee and brought it to tax.
5. In addition to the above, the AO also noticed that in the return of income filed for the A.Y 2005-06, the assessee has claimed of deduction of Rs.25,92,785 u/s 80G on gross qualifying amount of Rs.42,68,285. Out of this, the AO observed that an amount of Rs.9,17,285 paid to the Chief Minister's Relief fund is eligible for 100% deduction, but that the assessee has not filed the receipts for the payments to various other institutions to the extent of Rs.9,82,285. During the scrutiny proceedings, the assessee company, vide letter dated 23.07.2009, submitted the details of the payment made to the CM's relief fund for Rs.5,00,000 dated 29.03.2005 but could not furnish any details regarding the payment made to other Institutions/Trust to the extent of Rs.65,000/-. The AO therefore, disallowed the deduction of Rs.32,500 for the qualifying sum of Rs.65,000 and added it to the total income of the assessee and brought it to tax.
6. Aggrieved by the above disallowances, the assessee preferred an appeal before the CIT (A) challenging both the validity of the re-assessment proceedings and also the disallowance of the deductions u/s 80IB(5)(ii) of the Act and u/s 80G of the Act. The Page 5 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
CIT (A) rejected the assessee's grounds of appeal against the re- assessment proceedings and confirmed the order of the AO. Against the order of the CIT (A), the assessee is in appeal before us by raising the grounds of appeal which have already been reproduced herein above.
7. As ground of appeal No.3 is against the validity of the proceedings u/s 143(3) r.w.s. 147 of the Act, we deem it fit and proper to adjudicate this ground first. It is the case of the assessee that the reassessment is made on the issues which are not part of the reasons for reopening, and therefore, the reopening of the assessment is not valid. In support of its claim, the learned Counsel placed reliance upon the following decisions:
i) Hon'ble Madras High Court in the case of CIT vs. M/s.TTK Pharma Ltd (Tax Case Appeal) No.298 of 2004 dated 23.12.2009
ii) Hon'ble Madras High Court in the case of Carborundum Universal Ltd vs. JCIT (59 Taxmann.com 435)(Mad.)
iii) Hon'ble Supreme Court in the case of CIT vs. GK Knitting Industries (P) Ltd (2016) 71 Taxmann.com 35 (SC).
8. Further, the learned Counsel for the assessee also drew our attention to the information called for by the AO vide letter dated 13.06.2008 after passing of the order u/s 143(1) of the Act and assessee's reply dated 7.7.2008 giving the information called for. He submitted that after receipt of the above information only, the notice u/s 148 has been issued to the assessee, which is not sustainable as it is clearly on a change of opinion. Further, he Page 6 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
also argued that proceedings u/s 148 cannot be issued without concluding the proceedings pursuant to notice dated 13.06.2008.
9. The learned DR, on the other hand, supported the orders of the authorities below and submitted that the assessee's objections have been rejected by the AO as it had been found that the income of the assessee has escaped assessment warranting the initiation of the proceedings u/s 148 of the Act.
10. Having regard to the rival contentions and the material on record, we find that the AO has sought the following information from the assessee vide letter dated 13.06.2008:
" Office of the Dy. Commissioner of Income tax Circle-3-(3), Hyderabad F.No.AAACV7263K/V-02/HM No.28/2005-06 dated 13.06.08 To M/s. Visakha Industries Ltd 1-8-303/69/3, SP Road Secunderabad Sir, Sub: I.T Assessment u/s.143(1) - Your own - AY 2005-06Calling for information on omissions - Reg.
Ref: Intimation u/s.143( 1) dt 30-03-2007. *************** Please refer to the above.
After passing the intimation u/s.143(1) referred to above, the following observations are made:
(1) The assessee company has claimed deduction of RS.2,96,87,778 u/s.80lB(5)(ii) in respect of unit at Midnapore division, West Bengal, being the first year of deduction as stated in form No.10CCB. However as noticed from the assessment record for the AY. 04-05 the said unit was in existence w.e.f. AY.
03-04 onwards. The assessee company had claimed deduction u/s.80HHC in respect of Midnapore unit for the AYs 2003-04 & Page 7 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
2004-05. The assessee company has four units (i) Patancheru, (ii) Paramathi (iii) Midnapore & (iv) Textile division (Nagpur) and in the P.Y. relevant to AY. 2005-06, a new unit at Tumkur, Karnataka came into existence. The assessee company had claimed deduction u/s.80HHC for all the 4 units upto AY 2004-05 and in Asst. Year. 2005-06 claimed deduction u/s.80IB(5)(ii) in respect of Midnapore unit at Rs.2,96,87,778 (100%) which was considered for deduction uis.80HHC upto A.Y 2004-05. Hence the deduction u/s.80IB(5)(ii) in respect of Mldnapore unit needs to be disallowed and brought to tax as the said unit has already claimed deduction u/s.80HHC and hence not a new industrial undertaking as per sub- section (2) of sec.80IB.
(2) As seen from "Schedule-15-(12)-Expenditure in Foreign Currency" _ Page No.38 of 'Annual Report' 23rd - 2004-05, the assessee company made payments in Foreign currency towards "Interest" to the tune of Rs.50.51 lakhs which attracts the provisions of sec.1 95 r. w.s.40(a)(i) for non-deduction of tax at source. The 3CD report is, silent regarding deduction of TDS on the payments made in Foreign currency towards "Interest". In the absence of details, the expenditure of Rs.50.51 lakhs needs to be disallowed.
(3) The assessee company claimed deduction u/s.80G to the tune of Rs.25,92,785 (50% of RS.42,68,285) towards donation. However, as per the assessment record donations to the tune of Rs.37,91,OOO were allowed, which should actually be restricted to Rs.25,92,785. Thus an amount of Rs.5,50,000 short worked which needs to be brought to tax.
In this connection you are requested to offer your explanation on the above observation immediately.
Yours faithfully, Sd/-
(M.Narmada) Asst. Commissioner of lncome tax Circle-3(3), Hyderabad(I/c)".
Page 8 of 17ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
11. The assessee vide letter dated 7.07.2008 submitted the following reply:
"Visaka Industries Ltd, Secunderabad Date: 07/07/2008 To Asstt. Commissioner of Income Tax Circle 3(3), Hyderabad Sir, Sub: M/s. Visakha Industries Ltd A.Y 2005-06 Ref: Your letter No.F.No.AAACV7263K/V/-02/HM No.28/2005-06 dated 13.06.2008 - Intimation u/s 143(1) Kindly refer to your notice wherein you have stated that the decision u/s 80IB(5)(ii) in respect of Midnapore Unit is to be disallowed. We submit that the basis on which such withdrawal is contemplated does not find any sanction under law. We submit that all the conditions required for claiming deduction exist and the deduction u/s.80HHC is not connected with the deduction u/s.80IB (5) of Income Tax Act, 1961. Section 80HHC is for the company as a whole including units which do not qualify for deduction u/s.80IB(5)(2).
Consequently the claim u/s.80IB(2) is not defeated merely because the company has claimed deduction u/s.80HHC. We also draw your kind attention to the fact that there has been no claim u/s.80HHC during the yea question.
The expenditure in foreign currency is in respect to finance charges paid to domestic bank in respect of foreign currency loan. Hence the same does not require deduction of tax u/s.195. We are also giving you the details of the expenditure of Rs. 50.511acs as an annexure to this letter.
We submit that the deduction for donation has been correctly claimed at Rs. 25,92,785/u/s.80G on a gross amount of Rs.42,68,285/-. The computation was enclosed with the return. We are once again enclosing the same for your information and record.
Thanking you, Yours faithfully, For VISAKA INDUSTRIES LIMITED Sd/-
V. Vallinath President - Finance"
12. After the receipt of the above information, the AO has issued the notice u/s 148 dated 25.11.2008. In response thereto Page 9 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
the assessee filed a letter requesting the AO to treat the return filed on 28.10.2005 as the return filed in response to the notice u/s 148 and requested the AO to furnish the reasons for reopening of the assessment. The AO vide letter dated 19.01.2009 replied as under:
"Office of the Dy. Commissioner of Income tax Circle-3-(3), Hyderabad F.No.V-012/DC3(3)/AAACV7263K dated 19-01-2009 To The Principal Officer, M/s. Visakha Industries Ltd 1-8-303/69/3, SP Road Secunderabad Sir, Sub: Income Tax Assessment - A.Y 2005-06 - M/s. Visaka Industries Ltd - Notice u/s 148 - reg.
Ref: With reference to your letter dated 22.12.2008 With reference to your letter, I furnish the following information:
1. The Assessee company claimed deduction of Rs.2,96,87,778 u/s 80IB(5) in respect of unit at "Midnapure", West Bengal, being the 1st year of deduction as stated in the Form No.10CCB". However, as noticed from the assessment record for the A.Y 2004- 05, that the said unit was in existence w.e.f. A.Y 2003- 04 and onwards. The assessee company had claimed deduction u/s 80HHC in respect of "Midnapure" Unit for the A.Y 2003-04 & 2004-05. The assessee company has 4(four) Units (1) Patancheru (2) Pasamathi (3) Midnapure (4) Textile Division (Nabpur) and in the previous year relevant to A.Y 2004-06 a new unit at Tumkur Karnataka came into existence. The assessee company had claimed deduction u/s 80IB(5)(ii) in respect of "Midnapure" unit at Rs.2,96,87,778/- (100%) which was considered for deduction u/s 80HHC upto A.Y 2004-05.
In view of the above stated position, the deduction u/s 80IB(5)(ii) in respect of "Midnapure" unit needs to be disallowed and brought to tax, as the said unit already claimed deduction u/s 80HHC and hence not a new industrial undertaking as per sub-section (2) of section Page 10 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
80IB. Thus, income chargeable to tax has escaped assessment by claiming excess deduction.
2. It was noticed from "schedule 15(12) expenditure in foreign currency" - page No.38 of Annual Report 23rd - 2004-05 that the assessee company made payments in foreign currency towards "interest" to the tune of Rs.50.51 lakhs which attracts the provision of section 195 r.w.s. 40(a)(i) for non-deduction of tax at source. The 3CD report is silent regarding deduction of TDS on the payment made in foreign currency towards "interest". In the absence of details, the expenditure of Rs.50.51 lakhs needs to be disallowed. Thus, income chargeable to tax has escaped assessment.
3. The assessee company claimed deduction u/s 80G to the tune of Rs.25,92,785/- (50% of Rs.42,68,285) towards donation. However, as noticed from the assessment record details of donation made were available to the tune of Rs.37,91,000. Hence deduction needs to be restricted to that extent only. The excess deduction u/s 80G worked out to Rs.5,50,000 which needs to be brought to tax. Thus, income chargeable to tax has escaped assessment.
In view of the above, income has escaped at as the assessee has claimed excess deduction u/s 80IB(5)(ii), due to disallowance on a/c of non-deduction of TDS on the payment made in foreign currency towards interest expenditure of Rs.50.51 lakhs and due to excess claim of deduction u/s 80G within the meaning of explanation to section 147 of the I.T. Act. Hence, it is proposed to pass necessary orders u/s 147. State your objections. Yours faithfully, Sd/-
(K.Hari Prasad Babu) Dy.Commissioner of Income-tax Circle 3(3) Hyderabad Encl: Notice u/s 143(2)"
13. Thereafter, the AO completed the assessment u/s 147 of the Act. From the facts, it emerges that the AO had called for some information before issuing notice u/s 148 of the Act. It is the case of the assessee that the AO has not specified the section under which she has called for the information vide letter dated Page 11 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
13.06.2008 and therefore, it is to be presumed to be a notice u/s 142(1) or u/s 143(2) of the Act and since the proceedings initiated vide letter dated 13.06.2008 were not concluded, the notice u/s 148 of the Act is bad in law as there cannot be two proceedings at the same time. The learned DR, could not explain the provision under which the notice/letter dated 13.06.2008 was issued to the assessee. As is evident from the letter dated 13.06.2008, the return was already processed u/s 143(1) of the Act on 30.03.2007. The reason for reopening the assessment were recorded only after the assessee, vide letter dated 7.7.2008, has furnished the information called for by the AO. According to the learned DR, the AO had called for information to satisfy herself about the reasons for reopening of the assessment. We find that there is no such provision in the Act to initiate re-assessment proceedings after requiring the assessee to furnish the information. However, we also cannot consider the letter dated 13.06.2008 as a notice u/s 143(2) as 143(2) notice should have been issued before the expiry of 12 months from the end of the month in which the return is furnished and the AO could not have issued the notice u/s 142(1) once time period for issuance of notice u/s 143(2) has expired. Therefore, the letter dated 13.06.2008 cannot be considered as a notice either u/s 143(2) or u/s 142(1) of the Act and assessee's contention that the re- assessment proceedings have been initiated when the assessment proceedings are pending is not substantiated.
14. Coming to the argument of the assessee that the re- assessment is done on a ground which was not part of the reason for reopening, we find that out of the three reasons mentioned for Page 12 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
reopening, the AO has made the disallowance of the deduction u/s 80IB(5)(ii), though on a ground different from the reasons mentioned for reopening of the assessment. When an assessment is reopened on any one ground which is sustained in the re- assessment proceedings, the entire assessment is before the AO and he can consider any other issue which has come to his notice during the re-assessment proceedings as held by the full Bench of the Hon'ble High Court of Kerala in the case of CIT vs. Best Wood (2011) 331 ITR 63 (Ker.). The assessment was reopened to consider the allowability of the deduction u/s 80IB of the Act and the disallowance of deduction u/s 80IB(5)(ii) has been made during the re-assessment proceedings and therefore, we do not agree with the contention of the assessee that the re-assessment proceedings are invalid. Therefore, ground of appeal No.3 is rejected.
15. As regards grounds 1 & 2, we find that the Midnapore Unit had started production in the F.Y relevant to A.Y 2003-04 itself, but the claim for deduction u/s 80IB has been made for the first time during the A.Y 2005-06. The Hon'ble Supreme Court, in the cases of (i) CIT vs. Defree Engineering (P) Ltd reported in(2017) 77 Taxmann.com 27 (S.C); (ii) Pr.CIT vs. Cheran Spinning Mills (P) Ltd (2016) 76 Taxmann.com 28 (S.C); and (iii) CIT,Coimbatore vs. P.S. Velusamy reported in (2016) 74 Taxmann.com 262 (S.C) has held that the initial A.Y referred to in section 80IA would only be the year of deduction u/s 80IA claimed for the first time out of the total period, and not the year of commencement of eligible business and that the assessee had the option to choose the initial A.Y for claiming the deduction u/s 80IA. Therefore, there is Page 13 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
no infirmity in the assessee making the claim u/s 80IB during the A.Y before us.
16. As regards the computation of deduction u/s 80IB is concerned, we find that the Hon'ble Supreme Court has taken note of the decision of the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd vs. ACIT reported in (2012) 340 ITR 477 (Madras) to hold that the unabsorbed loss/unabsorbed depreciation pertaining to the years prior to initial A.Y, already absorbed against other business income of the assessee, cannot be notionally brought forward and set off against the income of the assessee during relevant A.Y in which the claim was first made u/s 80IB of the Act. The Hon'ble Supreme Court also considered the CBDT Circular No.1/2016 dated 15/12/2016 before dismissing the SLPs filed by the Revenue against the decision in the case of Velayudhaswamy Spinning Mills (P) Ltd as reported in (2016) 76 Taxmann.com 176 (S.C). Respectfully following the above decision of the Hon'ble Apex Court, we hold that the assessee is eligible to claim deduction u/s 80IB of the Act for the first time during the A.Y 2005-06 without setting off the unabsorbed loss & depreciation of earlier A.Ys which has already been set off against profit of other business.
17. We find that the AO has disallowed the claim u/s 80IB also for the following other reason:
i) That the assessee has not filed the copies of the P&L A/c and balance sheet for the Midnapore Unit as certified by the C.A. Page 14 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
18. As regards this objection of the AO, we find that the assessee has not filed a separate P&L A/c and the balance sheet of the Midnapore Unit certified by the CA for making the claim in Form No.10CCB of the Act. The learned Counsel for the assessee submitted that the profit declared by the assessee and claimed as a deduction in Form 10CCB as had been certified by the CA, is exactly the same as is claimed in the P&L A/c and balance sheet signed by the Authorized Signatory of the Company which has been filed before the AO during the re-assessment proceedings. Therefore, according to him, the insistence of the AO that such P&L A/c and balance sheet of the Midnapore Unit should be signed by the CA only, is not sustainable because according to him, the rule only prescribes that Form No.10CCB is to be obtained from a Chartered Accountant and that a separate report is to be obtained for each undertaking or enterprise of the assessee in respect of which deduction is claimed and the report is required to be accompanied by the P&L A/c and Balance Sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.
19. The learned DR, on the other hand, supported the orders of the authorities below.
20. Having regard to the rival contentions and the material on record, we find that the deduction u/s 80IB is a special deduction allowable to the undertakings which are set up in a backward area as certified by the Central Govt. Therefore, there is a requirement that while making the claim u/s 80IB(5) of the Act, Page 15 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
the claim should be made inform No.10CCB signed by the CA of the assessee and should be accompanied along with the report for each of the undertaking along with the P&L and the balance sheet of the undertaking as if it is a distinct entity. In the case of the assessee, though the assessee has got its books of account audited and Form 10CCB is signed by the C.A. of the assessee company, the report is not signed by the CA but is signed by the authorized signatory. However, as rightly pointed out by the learned Counsel for the assessee, there is no variation in the claim of deduction u/s 80IB(5) in Form No.10CCB and P&L A/c and balance sheet of the assessee filed during the re-assessment proceedings. Therefore, the objection raised by the AO, in our opinion, is a technical objection and unless the AO brings out as to how the P&L A/c and the balance sheet are not reliable and vary with the results declared by the assessee in Form No.10CCB, the AO cannot deny the deduction on this ground alone. In view of the same, we direct the AO to allow the deduction u/s 80IB(5)(ii) of the Act after verifying the assessee's claim of deduction u/s 80IB(5)(ii) of the Act.
21. In the result, assessee's grounds of appeal 1 & 2 are allowed.
22. As regards ground of appeal No.4, the learned Counsel for the assessee has not been able to produce any evidence in support of payment of Rs.65,000 to institutions registered u/s 80G of the Act. In the absence of any material in support of Page 16 of 17 ITA No 736 of 2011 Visaka Industries Ltd Secunderabad.
assessee's claim, the same cannot be entertained. Therefore, Ground of appeal No.4 is rejected.
23. In the result, assessee's appeal is partly allowed. Order pronounced in the Open Court on 28th February, 2018.
Sd/- Sd/-
(S.Rifaur Rahman) (P. Madhavi Devi)
Accountant Member Judicial Member
Hyderabad, dated 28th February 2018.
Vinodan/sps
Copy to:
1 M/s. M. Anandam & Co, CAs, 7A Surya Towers, SP Road,
Secunderabad
2 Asstt. Commissioner of Income Tax, Circle 3(3) Hyderabad
3 CIT (A)-IV Hyderabad
4 CIT - III Hyderabad
5 The DR, ITAT Hyderabad
6 Guard File
By Order
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