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2017 (7) TMI 537 - HC - Income TaxAdditions made by the Settlement Commission under the head of 'unaccounted production' - Held that:- The factors taken into account by the Settlement Commission, which in our opinion were relevant, were that registers relating to the manufacturing unit of the company which were found, established unaccounted production, admission by the employees that the company was engaging in such unaccounted production, the number of employees at the time of search being found far in excess of what was recorded in the books of accounts and the statement of the employees that the registers for the earlier periods were destroyed under the instructions of the management. Based on such facts, if the Commission made a projection of the available figure of unaccounted production over the entire period by adopting what can, at best, be stated as a conservative figure and by recording proper reasons, it would not be possible for us to interfere with such ultimate conclusion of the Settlement Commission. Disallowance of claim of deduction under section 80IB - Held that:- The process of manufacturing jarikasab commenced from acquisition of jumbo rolls of metalized lacquered polyester film. Such raw material undergo processes which can be broadly classified into three categories before the final product of jarikasab would come into existence. The entire process was one integrated manufacturing process. By no stretch of imagination a single integrated manufacturing process can be sub-divided or bifurcated into different parts for ascertaining whether at a particular stage a new article or thing had come into existence through manufacturing process. The approach of the Settlement Commission was wholly erroneous. When a single integrated manufacturing activity is shown to bring into existence entirely new and a distinct mercantile product through the human and mechanical intervention, it was simply not open for the Settlement Commission to segregate a portion of such manufacturing process to hold that since no new marketable product came into existence, such process did not amount to manufacturing. Even within the narrow confines of our judicial review, in the order of Settlement Commission on this issue, we must intercept. This issue is therefore decided in favour of the assessee. Expenditure towards higher studies expenses of the Directors of the company - Held that:- The higher education of a partner of a firm or director of a company may have different parameters and ramification. In a case if it is aimed at improving the efficiency of the firm or the person concerned is expected to contribute better with the acquisition further knowledge, it may be open for the assessee to claim the deduction. However, simply because a director is sent abroad for further education by itself would not sufficient to establish such a claim without establishing other relevant facts and circumstances. The entire issue is factual in nature. Since no perversity is established we refuse to interfere.
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