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2016 (12) TMI 1798 - ITAT MUMBAIExemption u/s 10AA - disallowance of claim as assessee did not carry out any manufacturing activity in the SEZ premises - AO has disallowed the exemption on the ground that since the assessee failed to establish genuineness of electricity and labour charges - CIT-A allowed the deduction - HELD THAT:- In this case the assessee has placed on record the copy of letter dated 12.3.2014 from the then officer on special duty, addressed to the ITO14(2)(4) Mumbai, vide which certain information u/s 136 were supplied. From the contents of the said letter, it can be inferred that the unit was in operation on 28.3.2011 as contended by the assessee. AO has also mentioned in assessment order that on perusal of details it revealed that the assessee had carried out its business activities from its SEZ unit, Sachin, Surat from 27.3.2011 to 29.3.2011. As per the assessee the process of manufacturing gold medallions from gold bars require few heavy machines and apart from other expenses, it requires two types of direct expenses i.e., labour charges and electricity charges. AO has disallowed the exemption on the ground that since the assessee failed to establish genuineness of electricity and labour charges the particulars furnished to substantiate its contention that gold medallions were manufactured from gold bars during the relevant period, cannot be accepted. As during assessment proceedings the assessee furnished the whereabouts of the firm from whom the assessee had hired generator set to fulfill the requirement of electricity in manufacturing process and the concerned person was examined by the AO. Similarly, AO has examined the person who made available the manpower to the assessee. So, in our considered opinion the assessee has discharged the onus on it to prove that during the relevant previous year, it carried out the business activities from SEZ unit, Sachin to avail the claim of deduction u/s 10AA AO has not accepted the evidence adduced by the assessee to establish that since there was no electricity connection generator was hired and manpower was also arranged to carry out the manufacturing activities. Therefore, no legal or factual infirmity in the order passed by the Ld. CIT(A), we uphold the same and dismiss the grounds of appeal of the revenue.
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