9911796707
TMI Blog2012 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... s unexplained cash credit." 3. It is submitted that this ground involves legal issue which should be admitted in view of the Hon'ble Supreme Court decisions in the case of NTPC V. CIT, 229 ITR 383 and Jute Corporation of India Ltd. Vs. CIT, 187 ITR 688. The learned DR did not raise any serious objection regarding the admission of additional ground. Since we find that legal issue is involved in the additional ground, and no fresh examination of facts is required, this additional ground is admitted. 4. Regarding additional ground, it was submitted by the learned AR of the assessee that this issue is squarely covered in favour of the assessee by the judgment of the Hon'ble Gujarat High Court rendered in the case of CIT Vs Pankaj Dyestuff Industries, Income Tax Reference No.241 of 1993 dated 6-7-2005. He submitted a copy of this unreported judgment of the Hon'ble Gujarat High Court. The learned DR has supported the orders of the authorities below. 5. We find that this is not in dispute in the present case that this amount of Rs.2.90 lakhs was introduced by the partners towards their capital. This issue is now fully and squarely covered in favour of the assessee by the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Is soon that the name of the purchaser is left blank) which shows that the addition work was going on till 15.9.2007. ii) From the perusal of the details of machinery it is seen that the assessee has purchased machinery of Rs.4,16,050/- on 20.7.2007 (the only machinery on the basis of which the assessee has claimed of cluing export by doing manufacturing) which includes jewellery casting unit comprising of vacuum investment & castinq machine, Vulcanizer, War injector and burnout furnace, one polishing machine single station surrounded vacuum system, one pickling machine, one electroplating machine-1 litre. Both cap with pen attachment, one dewaxer (for 6 flasks), one magnetic polisher-standard and one ultrasonic machiner-1 litre capacity. Bolt cutter one piece and Alu. Fran four piece purchased on 22.8.2007. iii) From the perusal of the details of furniture and bills for it, it is seen that the assessee has purchased plywood from M/s. Satyanarayan Timbers for making furniture on 15.8.2007, however no labour charges for making furniture from such plywood has been debited to it showing that any furniture has been made out of it. iv) Fan was purchased on 27.8.2007. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it's own manufacturing unit are not actually manufactured In the SEZ unit and they have only carried out trading activity on which they have wrongly claimed deduction u/s. 10AA. Accordingly, the AO has rejected the claim of deduction u/s.10AA." 7. Being aggrieved, the assessee carried the matter before the learned CIT(A), but without success and now the assessee is in further appeal before us. 8. It is submitted by the learned AR of the assessee that the disallowance made by the AO is without any basis. He drew our attention to the statement of facts filed before the learned CIT(A) wherein all the facts were narrated including this that the factory building was already completed before the start of commercial production and fitting of the outside the gate only was done in September, 2009. It is also submitted before the learned CIT(A) that the machinery was purchased on 20.7.2007 and it was a complete jewellery casting unit and also included other required machines for the manufacture of the jewellery and the same is enough and adequate to manufacture the production shown by the assessee. It was also brought to the notice of the learned CIT(A) in the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in that case. 9. As against this, the learned DR of the Revenue supported the order of the authorities below. He also submitted that power consumption shown by the assessee is not sufficient to run machineries. He also submitted that no evidence is brought on record to show that the assets were actually put to use. 10. We have considered rival submissions, perused the material on record and gone through the orders of the authorities below and the judgment cited by the learned AR. We find that the objection of the AO are noted by the learned CIT(A) in para-3 of his order, which is reproduced above. The learned CIT(A) has confirmed the disallowance on this basis that the objections of the AO was valid. Now, we examine the objections of the AO to see as to whether these are sufficient to disallow the claim of the assessee. 11. The first objection is that there is some civil works done on 19.9.2007. Regarding this, it is explained by the assessee that the same was in respect of outside gate and otherwise, the building was ready. As per the objection of the AO also, the expenses incurred includes expenditure for purchase of gate and fitting charge of the gate. Merely because some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first export bill dated 10.9.2007. Even if the printer was purchased after wards, the printing of the export bills can be taken from some other printer from outside and therefore, this objection is also not valid reason for rejecting the claim of the assessee for exemption under Section 10AA of the Act. Next objection of the AO is regarding purchase of AC and weighing scale on 27.8.2007 whereas it is the claim of the assessee that commercial production has commenced on 16.8.2007. In our considered opinion, this is also not a valid basis for rejecting the claim of the assessee, because for a few days, one can work without AC also and weighing scale was very much obtained before the export on 10.9.2007. Next objection is regarding the purchase of steel safe on 26.7.2007 delivered on 3.8.2007 whereas the diamonds were said to be purchased on 25.7.2007. We fail to understand the logic of this objection of the AO, because it is not the case of the AO that no export had taken place and no income has arisen. Moreover, it is explained by the assessee that till the purchase of steel safe, diamonds were kept in locked table. In the beginning of a business, many a time, business has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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