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2020 (1) TMI 1109 - AT - Income TaxDeduction u/s 10B - products namely CT/PT manufactured or not? - current transformers (CT) and potential transformers (PT) - assessee is a partnership firm and engaged in the business of manufacturing epoxy cast insulators, bushing, epoxy molded components etc a 100% Export Oriented Unit approved by the Development commissioner, Kandla Special Economic Zone, Gandhidham, Ministry of Commerce & Industry - HELD THAT:- Regarding the use of the machineries in the manufacturing of CT/PT products, we note that the AO has not brought anything on record evidencing that the assessee was not in possession of the requisite machineries. Though the assessee during the assessment proceedings has claimed that it is using APG machines and vacuum casting machines for the manufacture of its alleged products, but the AO has not controverted the submission of the assessee based on any documentary evidence. We also note that the list of such machineries are appearing in its financial statement as evident from the submission of the assessee. Books of accounts of the assessee were duly audited which were filed during the assessment proceedings and no defect whatsoever was pointed out by the Assessing Officer in such books of accounts. On one hand the Assessing Officer has accepted the books of account and, on the other hand, he is making the addition merely on the basis of the statement obtained under Section 132(2)/133A which was immediately retracted after the date of survey. In such facts and circumstances, the Assessing Officer should have rejected the books of account under Section 145(3) of the Act as he disbelieved the purchase bills and sales bills which were not entered in the books of accounts of the assessee as on the date of survey. But, the Assessing Officer has not done so; which implies that the Assessing Officer has accepted the books of accounts and financial statement of the assessee. Assessee during the year has paid the job worker the labour charges to its associated concern as evident from the copies of the ledgers. Therefore, the finding of the AO that there was no labour charge paid by the assessee is based on wrong assumption of facts. There was goods movement register maintained by the assessee for transferring the goods on job work basis as evident from the details maintained under Excise Act, which are placed on pages 243 to 308 of the paper book. CIT (A) has given very exhaustive finding elaborating that the assessee is engaged in the manufacturing activity of the alleged products. Therefore, we are of the view that no interference in the order of the learned CIT (A) is warranted in the given facts and circumstances. Hence the ground of appeal of the revenue is dismissed.
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