M.M.KUMAR, J. - (1.) THE Revenue has filed the instant appeal under s. 260A of the IT Act, 1961 (for brevity 'the Act') challenging order dt. respect of asst. yr. 1994 -95.
(2.) ON the basis of order passed by the CIT under s. 263 in respect of asst. yr. 1996 -97, the AO did not accept the claim made by the assessee respondent holding that the CIT had held in his order under s. 263 that the year 1986 -87 was the first year of production. Therefore, deduction under s. 80 -I of the Act for the asst. yr. 1994 -95 was not available as it was only for a period of 8 years which had expired. However, on further appeal filed by the assessee, it was pointed out 2002 in ITA No. 1592/Del/2001, both on technical grounds as well as on merits holding that the year 1986 -87 was not the first year of production. In that regard the Tribunal had followed the law laid down by the High Court of Delhi in the case of CIT vs. Food Specialities Ltd. (1985) 45 CTR (Del) 5 : (1985) 156 ITR 790 (Del), wherein it was held that the material date when an undertaking could be deemed to have commenced its production would be the date when commercial production has started. It has been found as a fact that in the year 1986 -87 only trial production was started as noted by the AO himself. As the year in relation to the year from which the benefits were to commence has been held to be the same under ss. 80 -I and 80HH, the Tribunal held in favour of the assessee and against Revenue by observing as under : "We have perused the records and considered the rival contentions carefully. The disallowance under s. 80 -I by the AO was based on the finding of the CIT in his order under s. 263 for asst. yr. 1996 -97 that asst. yr. 1986 -87 was the first year of production. But the said finding of CIT was not upheld by the Tribunal (supra). The Tribunal in para 19 of its order noted that the AO in the assessment for asst. yr. 1986 -87 had observed that the assessee only commenced trial production in asst. yr. 1986 -87 and the commercial production had not started in that year. The AO also noted in the sale (sic) had been set off against the expenditure incurred during the period of test runs and had been transferred to projects and preoperative expenses. The returned income was declared nil which was accepted by the AO. The Tribunal further noted that the finding of the AO that asst. yr. 1986 -87 was not the first year of production had become final. The Tribunal had also noted that the first year of production being 1986 -87, the assessee would have been entitled to various expenses which were of the nature of revenue and there would have been loss of Rs. 40 lacs to the assessee which would have to be carried forward and set off against income of subsequent years. This would have gone in favour of the assessee. As the AO himself in 1986 -87 admitted that it was not the first year of production and the order of CIT under s. 263 having been reversed by the Tribunal, we see no infirmity in the order of CIT(A) allowing the claim of the assessee. The order of CIT(A) is, therefore, upheld."
(3.) ON the aforementioned premises the Revenue has claimed the following substantial question of law : "On the facts and in the circumstances of the case, whether the Hon'ble Tribunal was right in dismissing the Revenue's appeal upholding the order of the learned CIT(A) allowing deduction under s. 80 -I of the IT Act without appreciating the fact that such deduction was claimed beyond the period of eight years i.e. for the assessment year, relevant to the previous year in which the industrial undertaking started manufacturing and for each of the seven assessment years immediately succeeding the initial assessment year in contravention of provisions of s. 80 -I(5) of the Act." We have heard learned counsel at some length and find that no substantial question of law would emerge for determination of this Court because once an order under s. 263 passed by the CIT in favour of the Revenue has been reversed by the Tribunal then the Revenue cannot claim that in respect of the same year different numbers of years are required to be counted for the purposes of granting benefit of s. 80 -I of the Act. The principle of consistency as laid down by Hon'ble the Supreme Court in the cases of Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267 : (1992) 193 ITR 321 (SC) and Berger Paints India Ltd. vs. CIT (2004) 187 CTR (SC) 193 : (2004) 266 ITR 99 (SC), would not permit ITA No. 1592/Del/2001. In that order the Tribunal has held that the assessee respondent has not commenced his production in the year 1986 -87. That order has admittedly attained finality as the Revenue has not challenged it any further. Therefore, we find that no question of law much less substantial question of law would emerge for determination of this Court. In view of the above, we are not inclined to admit the appeal and dismiss the same.;