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2014 (11) TMI 516 - BOMBAY HIGH COURTSum advanced to sister concern by cheques drawn – Unexplained investment or not - Held that:- The Tribunal rightly was of the view that the payment of ₹ 17,00,000/- to Austro Beer by the appellant came to light only from Dena Bank's Account of Austro Beer (I) P. Ltd. - The corresponding entries in the accounts of the assessee are also looked into in the paragraph - the assessee did not show Austro Beer as a debtor in the balance sheet as on 31.03.1997 and in subsequent balance sheets - The investment account of Austro Beer reflected opening debit balance of ₹ 7,50,000/- as on 01.04.1996 - Appellant was given opportunity to explain this position - Explanation furnished was that the financing banker did not approve the diversion of borrowed funds, & hence payments to Austro Beer could not be shown as advances and hence, it was included under the head of sundry debtors - Section 69-B of the Act is on treatment to be accorded to amount of investments, etc., not fully disclosed in books of account assessee could not give details of sundry debtors & support it by primary books of accounts - assessee could not show that amount of ₹ 17 Lakh was reflected in the balance sheet dated 31.3.1997 - it was not shown that amounts were not shown as repaid by M/s Astro Beer during relevant previous year - it has been rightly treated as unexplained investment in terms of Section 69B of the Income Tax Act - Finding that this payment & its nature was learnt due to search is also not perverse - No arguments have been advanced to show why or how these findings are erroneous or then Section 69B does not get attracted – the order of the Tribunal is upheld – Decided against the assessee. Inclusion of income of new industrial unit - Whether the Tribunal was right in concluding that the income of the new industrial until, the receipts of which were found recorded in books could be included in the income taxable in block assessment in the light of the provisions of Section 158BB(1)(d) which excludes from the scope of block assessment such income assessable for assessment year for which the time for filing the return of income has not expired as on the date of search – Held that:- Section 158-BB is about the computation of undisclosed income of the block period - the bar prescribed is not absolute - no clarification was given as to whether the deductions under Section 80 IA was claimed in that return or not - The accounts officer has noted that the computerized books of account were produced before the DDIT only - the addition was made on the basis of the documents obtained during search and during post search enquiry – Decided against assessee. Status of the employees working with the assessee - Whether the Tribunal was right in holding that the new industrial unit cannot claim to have employed the required number of workers viz. 10 workers by including peons, clerk and head clerk employed by the undertaking the only business of the undertaking being job printing – Held that:- The assessee states that Peons, Head-clerk and Clerk-typist need to be included in the number of employees to find out the eligibility in terms of Section 80 IA(2)(v) - industrial undertaking may have more than 10 or several employees, but, clause (v) warrants that 10/20 or more of such employees/ workers in the industrial undertaking must be employed in the manufacturing process - manufacturing process is obviously a narrower concept. Industrial undertaking therefore, may have various departments like accounts, audit, personnel, marketing etc. - The workers working in these other departments will not be participating in manufacturing process though employed in such industrial undertaking or establishment - skilled and unskilled workers who work on machine or otherwise actually participate in manufacturing process, need to be counted to find out the number of 10 or more, envisaged by the Parliament in Clause (v) - Hence, they need to be excluded for the purpose of finding out whether said clause (v) is attracted or not - the appellant does not employ 10 workers in actual manufacturing process – thus, the order of the Tribunal is upheld – Decided against assessee.
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