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2023 (10) TMI 838 - ITAT DELHIAssessment u/s 153A - bogus purchases - group has routed its own unaccounted money in the books through bogus profits shown in the unit at Jammu and claimed 100% deduction on such profits u/s 80-IB - whether during the search any incriminating material was seized and which has been relied at the time of assessment but which has been wrongly left out of consideration by CIT(Appeals)? Whether the AO was able to establish that there was no manufacturing activity in the units of the assessee companies? - HELD THAT:- It comes up from the order of AO that primarily he relied on the Central Excise Department’s Investigation and findings, which were made basis to conclude that assessee companies were involved in booking bogus purchases through various persons/parties which were found to be non-existing. However, what is material is that the order of learned AO is dated 31.03.2016 and on 5.12.2018 the CESTAT in its order has accepted the claim of the assessee companies that they were engaged into genuine purchases and manufacturing activities by holding that the allegations are based only on assumptions and presumptions and it cannot be held that appellants had not manufactured the goods during the impugned period. There is no force in the contention of learned DR that the subsequent inquiries made during assessment proceedings can be considered falling in category of seized or incriminating material found during search, so as to validate the assessment u/s 153A. The subsequent proceedings are only of corroborative nature and may be considered relevant to be one for the purpose of ascertaining the extent of evasion. However, the preliminary piece of evidence would be the one allegedly found during the search which in the case of the appellants was only the statement of Manoj Jain and Sanjiv Jain, which too stood retracted. The Bench is of the considered view that the subsequent finding of the CESTAT were fatal to the case made by Ld. AO. The order of ld. CIT(A) requires no interference. Decided against Revenue.
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