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2021 (4) TMI 308 - AT - Income TaxAddition on account of bogus creditors - no cognizance of genuineness of 21 parties as those parties has not given any confirmation or not appeared before the Assessing Officer - CIT- A deleted the addition - HELD THAT:- In the present case the assessee disclosed the bank account numbers, name of the bank of the parties vide letter dated 07.02.2013 and 20.02.2013. During the Assessment Proceedings, the assessee also furnished the confirmations of outstanding balance obtained from the said parties, but those parties could not be produced for the reason that a prolonged litigation was going on and the parties were absconding. The assessee furnished the details of their bank account wherein the payment made by the assessee in subsequent year was credited. In fact, the Assessing Officer accepted the purchases made from these parties in whose names, balances were outstanding but only doubted the genuineness. When the purchases from the parties were accepted and the sales made out of those purchases were not doubted, the payments outstanding in the name of those parties were accepted in the subsequent year, then there was no reason to doubt the genuineness of the outstanding balance. These findings given by the CIT(A) are correct as per the records. Merely, non-producing the parties in person despite knowing that these parties are identified parties, cannot determine the non-genuineness of the transaction. Thus, the CIT(A) rightly deleted the addition. Addition relating to job work charge - CIT-A deleted the addition - as per assessee the job work was related to the sister concern and, therefore, the CIT(A) has rightly deleted this addition - HELD THAT:- CIT(A) has given a categorical finding that the Assessing Officer has not brought any comparable cases in respect of increase in job work charges as there is increase in labour and electricity cost which was categorically proved by the assessee before the CIT(A). Ground No. 4 & 5 are dismissed. Disallowance relating to deduction u/s 80IC - proof of manufacturing activity as undertaken by assessee - HELD THAT:- It is pertinent to note that TMT bars made from MS Ingots suffer from a deficiency in tensile properties, and there arises inconsistency in tensile strength and elongation. But TMT bars produced from continuous casting MS Billets show a remarkable consistency of properties because of the high tensile strength and elongation. - AR submitted that it is a manufacturing activity itself and thus, the assessee has rightly claimed the deduction under Section 80IC which is also accepted in subsequent years by the Revenue. As per the CIT(A) and the Assessing Officer the assessee has not provided all the requisites in respect of claiming deduction under Section 80IC of the Act. Therefore, we are remanding back this issue to the file of the AO for verifying whether the assessee is carrying out any manufacturing activity or not as envisaged under Section 80IC for claiming deduction and if the revenue has allowed the deduction in subsequent years, why the same should not be allowed in this year. Hence, the issue relating to deduction under Section 80IC in the present assessment year is restored to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground of assessee is allowed for statistical purpose.
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