ADARSH KUMAR GOEL, J. - (1.) THIS order will dispose of IT Appeal Nos. 697, 689, 708 and 721 of 2010 as it has been stated by learned counsel for the Revenue that all the four appeals involve common questions.
(2.) IT Appeal No. 721 of 2010 has been preferred by the Revenue under S. 260A of the IT Act, 1961 (for short, 'the Act') against the order of the Tribunal, Delhi Bench 'B' New Delhi passed in ITA No. 2726/Del/2009 dt. 29th Jan., 2010 for the asst. yr. 2004-05, claiming following substantial questions of law : "(i) Whether on the facts and circumstances of the case and in law, the learned Tribunal was right in holding that the CIT(A) had duly put all the objections and documents to all the parties for their comments, it cannot be said that there was violation of provisions contained in r. 46A of the IT Rules, 1962, despite the fact that opportunity was given by the AO under S. 142A(3) of the IT Act, 1961 to the assessee during the course of assessment proceedings and any evidence if any or objections to the DVO's report was to be submitted before the AO which was not done and that the assessee was not eligible to produce new evidence for the first time before the CIT(A) and also not appreciating the fact that there is no provision for a revised report under S. 142A of the IT Act, 1961 ? (ii) Whether on the facts and circumstances of the case and in law, the learned Tribunal was right in law in observing that there was no violation of r. 46A of the IT Rules, 1962, despite the fact that none of the conditions prescribed under r. 46A were satisfied by the assessee for admission of additional evidence in as much as there was no occasion where (a) the AO refused to admit the evidence, (b) or the assessee was prevented by sufficient cause from producing the evidence which was called upon to be produced by the AO, (c) or the assessee was prevented by sufficient cause for producing before the AO any evidence which is relevant to the ground of appeal, (d) or the AO passed the assessment order without giving the assessee sufficient opportunity to adduce evidence relevant to any ground of appeal ? (iii) Without prejudice to the above, whether on the facts and in the circumstances of the case, the learned Tribunal is right in arriving at the conclusion that a sum of Rs. 91,30,355 on 'Humidification plant' and Rs. 1,20,01,718 under the head 'Trenches' considered by the DVO's subsequent invalid report, be treated as investment and holding that the investment made in the building account under the head 'Humidification plant' and 'Trenches' considered for allowing relief to the assessee is completely ignoring the provision of S. 142A of the IT Act ? (iv) Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in allowing deduction under S. 80HHC on the face value of DEPB in the case where turnover exceeds Rs. 10 crores in view of the proviso (ii), (iii) and (iv) inserted by the Taxation Law (Amendment) Act, 2005 with retrospective effect from 1st April, 1998 ? (v) Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in allowing deduction under S. 80HHC in respect of entire DEPB amount by incorporating the same in the computation of business profit under S. 28(iiib) ? (vi) Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in placing reliance upon the decision of Tribunal, Special Bench, Mumbai in the case of Topman Exports vs. ITO (2009) TOIL 531 Tribunal dt. 1st Aug., 2009 despite the fact that the decision of the Mumbai Tribunal Special Bench in the case of Topman Export (supra) has been reversed by the decision of the Hon'ble Bombay High Court in the case of CIT vs. Kalpataru Colours and Chemical 2010 TOIL- 482 HC-Mum ?" The assessee is an exporter deriving income from manufacture and export of handloom goods. Dispute arose during the assessment proceedings as to the correct value of the construction of the factory and calculation of benefit under S. 80HHC of the Act. The AO referred the matter to the District Valuation Officer (DVO) in whose opinion, cost of construction was much higher than the cost declared by the assessee in its books of accounts. Accordingly, the AO made additions based on the report of the DVO. On appeal, the CIT(A) sought a revised report in view of objections of the assessee to the first report. This was done in exercise of power under r. 46A of the IT Rules, 1962 (for short, 'the Rules'). In the revised report, the DVO reduced the estimated cost of construction given earlier taking into account the factor of self supervision and self procurement of material by the assessee. The DVO, however, did not accept the objections of the assessee under the heads 'Humidification Plant' and 'Trenches'. The CIT(A) accepted the revised report of the DVO against which cross appeals were filed by the Revenue as well as the assessee. According to the Revenue, the CIT(A) was not justified in seeking revised report and should have upheld the additions made by the AO while according to the assessee, its objections to higher cost under the heads 'Humidification Plant' and 'Trenches' should have been accepted and cost reduced further and to that extent, the modified report should not have been accepted. The Tribunal dismissed the appeals filed by the Revenue and upheld the exercise of power by CIT(A) under r. 46A of the rules and deleting of additions to the extent suggested in the revised report. The appeals of the assessee were allowed and valuation report to the extent it rejected the objections of the assessee against taking of higher cost under the heads 'Humidification Plant' and 'Trenches' was disapproved.
(3.) WE have heard learned counsel for the Revenue. Re : questions (i) to (iii);