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TMI Blog2021 (5) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the ITAT ignoring that the said decision was based upon the decision of the ITAT in the case of M/S.Topman Exports that had since been reversed by Bombay High court in their decision in the case of CIT Vs. Kalpataru Colours and Chemicals, 3285 ITR 451 (Mum.). 4) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 5) It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent." 2. Brief facts of the case are that the assessee firm was engaged in the business of export of textile fabric. A search action under section 132 of the Act was carried out on the office premises of assessee on 20.01.2009. During the search, certain incriminating material was found in the office of assessee. The incriminating material was seized as per Annexure-BS-1. The incriminating material consisting of one file containing order passed by the Excise Authorities regarding withdrawal of Excise Duty Rebate availed by the assessee. Consequent upon the search action, a notice under section 153A of the Act dated 30.09.2009 was served upon the assessee. In response to notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee further shown his ignorance, if any other enquiry is initiated by the Revenue for verification from their banker. The reply filed by the assessee was not accepted by the AO. The AO held that assessment completed under section 143(3) of the Act was not passed on material recovered during the search. The issue of bogus purchases is directly relates to evidence unearthed during the search and the statement of partner of the assessee, regarding the genuineness of transaction. The issue of bogus purchases is discovered during the course of such action and have no bearing on the assessment under section 143(3) of the Act. The order of AO on Excise Duty has been confirmed by ld. Commissioner of Central Excise. On the objection about the genuineness of purchased through cheques, the AO held that payment of M/s. Radheshyam Fabrics was made after 240 days. The assessee has not discharged his onus nor disclosed full facts about the transaction of purchases. On the objection that sales/export was not disputed / doubted, the AO held that issue is about the genuineness of purchases. The assessee is not a trader but a manufacturer. So, it is not that input and output are same. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed after 6.5 years from the closure of CEN-VAT scheme. Thus, in view of lapse of time between transaction and the passage of time, so many things may have happened. They may close their business or have migrated from the place of work. In such situation, production of parties were beyond the control of assessee. The payments were made through account payee cheques and goods were received. Thus, the purchases cannot be treated as bogus. 6. On the issue of disallowance under section 80HHC of the Act, the ld.CIT(A) held that the AO exceeded his jurisdiction while sitting over the finding of the Tribunal, wherein he himself has given the appeal effect, the proper course to the Department was to approach the higher court instead of quashing the order of the Tribunal. The ld.CIT(A) also referred and relied on the decision of Hon'ble Madras High Court in case of Seshasayee Paper and Board Ltd., Vs IAC (1986) 157 ITR 342. Aggrieved by the order of the ld.CIT(A), the Revenue has filed the present appeal before this Tribunal. 7. We have heard the submission of ld. Commissioner of income tax / Departmental representative (CIT-DR) for the Revenue and the learned Authorised Representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has not discharged his onus nor disclosed full facts about the transaction of purchases. On the objection that sales/export was not disputed / doubted, the AO held that issue is about the genuineness of purchases. The assessee is not a trader but a manufacturer. So, it is not that input and output are same. Further Excise Authority were not agreed with the assessee's contention while withdrawing of Excise Duty rebate by the assessee. The AO treated the purchase of Rs. 91,91,237/- as bogus and added to the income of assessee. The ld.CIT(A) deleted the entire addition by taking view that the Excise department not allowed the rebate as there was some alert circular issued by Excise Duty and the Excise Department not to consider the various issues like payment of account payee cheque, purchases of sales, export made, quantitative details maintained etc., It was further held that admitted position is that circular issued by other department is not binding on the Income Tax Department. The seized material was only for the purpose of Excise Duty for calculating rebate and no such evidence regarding fake purchases for the purpose of Income Tax is found in the search. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submits that it is now admitted position under the law that no addition can be made in absence of any incriminating material in the completed assessment (abated assessment). During the original assessment order passed on 22.12.2006, the AO not allowed the deduction of Rs. 1,78,11,568/-. The assessee filed before the ld.CIT(A), wherein the action of the AO in original assessment was upheld. However, on further appeal before the Tribunal the issue was restored back to the AO. The A.O. in order giving effect allowed deduction of Rs. 58,11,629/- The AO exceeded his jurisdiction in re-computing the deduction under section 80HHC of the Act. The action of the AO is illegal and without authority, the AO exceeded his jurisdiction while restricting the disallowance under section 80HHC of the Act. 13. At the time of hearing were directed the ld.CIT(A) to call the report of AO, if the action of AO on the issue u/s.80HHC of the Act is passed on any seized material. In compliance of direction of Bench the AO furnished his report dated 16.02.2021, extract which is reproduced below: "2. In this regard, it is submitted that on perusal of material in this office, it is noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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