TMI Blog2021 (10) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... after the close of the Financial Year - HELD THAT:- Merely because approval is received in the subsequent year, the deduction u/s 35(2AB) could not be denied to the assessee - denial of deduction u/s. 35(2AB) of the Act on the ground that the application for approval in form 3CK was made after the close of the Financial Year is also unsustainable. See BANCO PRODUCTS (INDIA) LTD.[ 2018 (7) TMI 1559 - GUJARAT HIGH COURT] - we have no hesitation in holding that the deduction u/s.35(2AB) as claimed by the assessee is to be allowed. Hence, the deduction u/s 35(2AB) as claimed by the assessee is allowed. Disallowance u/s 14A r.w.r. 8D - CIT-A deleted the addition - HELD THAT:- It is the finding of the Ld.CIT(A) that the financial statements of the assessee shows that it had sufficient own funds to make the investments on equities. The Ld.CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] and HDFC BANK LTD. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] held that there is no case for disallowance of any interest under Rule 8D(2)(ii) of I.T. Rules. We do not find any infirmity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the relevant assessment year disclosing the additional income declared during the survey proceedings. In the course of the assessment proceedings assessee was required to establish the genuineness of the purchases thereon which have been made from above parties as mentioned in the Assessment Order. Assessee vide letter dated 07.03.2014 furnished party wise details of purchases from various parties along with copies of their ledger in the Books of Accounts and submitted that the purchases made by the assessee are genuine. Not convinced with the submissions of the assessee the Assessing Officer disallowed purchases of ₹.4,92,14,139/- as agreed by the assessee in the survey proceedings as non-genuine. Before the Ld.CIT(A) the assessee furnished all the necessary information and documents regarding purchases made from various parties. On analyzing the information furnished by the assessee and after calling for remand report from the Assessing Officer the Ld.CIT(A) restricted the addition to 10% in view of the order of the Tribunal in assessee s own case in ITA.No. 3768/Mum/2014 dated 11.12.2018 for A.Y. 2010-11. Against this order both assessee as well as revenue are in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find from the remand report that the Assessing Officer has not doubted records, details and evidences i.e. purchases made by the assessee, consumption, sales and stock reconciliations furnished by the assessee during the remand proceedings. No adverse inference was drawn by the Assessing Officer in the remand report against the claim of the assessee. We observe that even though the Tribunal in assessee s own case for A.Y. 2010-11 restricted the disallowance to 10%, however, the facts in the current assessment year are slightly different as there is a remand report called for by the Ld.CIT(A) in the year under consideration but whereas such remand report was not available for adjudication before the Ld.CIT(A) and also before the Tribunal for A.Y.2010-11. Taking the totality of the facts and circumstances into consideration we are of the view that ends of justice would be met if the disallowance is sustained at 6% of the alleged bogus purchases considering the fact that even the Assessing Officer in his remand report did not dispute the records in respect of purchases, consumption, sales as well as the stock reconciliation etc., furnished by the assessee. Thus, we direct the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al from the DSIR does not mention a specific from when the facilities is approved but mentions that the facilities is approved till 31.03.2014 11.08.2011 Filing of Form 3CK with the DSIR The assessee-appellant Filed form 3CK after receiving approval from DSIR since the said approval is required to be attached to Form 3CK seeking approval u/s 35(2AB) 13.10.2011 DSIR grants approval in Form 3CM The approval form 3CM mentions that the facilities is approved from 02.06.2011 to 31.03.2012 10.07.2012 Application for extension of recognition u/s 35(2AB) A detailed application alongwith Form 3CK, details of research, accounts from FY 2008-09 to 2010-11, income tax returns, etc. was furnished to the DSIR 12. However, Assessing Officer denied the claim of the assessee holding that assessee does not fulfill the basic conditions required for being eligible for claiming the deduction u/s. 35(2AB) observing as under: - 5.8.9 To summarize, the conditions required to be fulfilled for being eligible to claim weighted ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould necessarily be reported in the audited financial statement prepared for the purpose of published annual report as well as for the purpose of Income Tax returns. 5.9 In the light of above essential conditions required to be fulfilled for being eligible to claim weighted deduction u/s 35(2AB) of the Act, it is seer, that the assesse company does not fulfill the basic conditions required for being eligible for claiming deduction u/s 35(2AB) of the Act as discussed under for each of the conditions mentioned above. 13. On appeal the Ld.CIT(A) sustained the action of the Assessing Officer in rejecting the claim for weighted deduction u/s. 35(2AB) as claimed by the assessee observing as under: - 5.3 Decision: I have considered the facts of the case and submissions made by the appellant. The appellant agitated against disallowance of ₹ 4,98,89,829/- being expenditure incurred on research and development facilities u/s 35(2B) of the Act at its laboratories situated in Ghatkopar and Mahad. The AO has disputed the expenditure on various grounds and has analysed the reasons lucidly citing various judgements on the issue. The reasons recorded by the AO in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements and filed the necessary application for approval on 08.022011 is not acceptable as the form 3CK was filed only on 11.08.2011. The condition of the approval has to be satisfied with respect to the period for which weighted deduction is claimed. The subsequent approval effect from period after March 2011 would not make the unit eligible for claiming deduction in respect of the period when the said facility is not approved. The effective date of approval of the facility is the cut-off point for the purpose of claiming deduction u/s 35(2AB) of the Act. It is also essential to note that as per clause (3) of Sec 35(2AB) of the Act, no deduction under clause (1) of Sec 35(2AB) of the Act shall be-allowed to the assessee company unless it enters into an agreement for cooperation in such research and development facility and for the audit of the accounts maintained for that facility entered into with the prescribed authority in the prescribed form No 3CK. The appellant company has not produced any documents for compliance of this condition. The appellant has also failed to produce separate books of accounts and getting the same audited by a CA as brought out by the AO in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguishable (without stating how). As could be seen, the Ld. CIT (A) has affirmed the order of the Ld. AO and sustained the disallowance simply relying on the order of the Ld. AO (albeit on fewer grounds than that done by the Ld. AO) without even remotely considering the submissions made by the Assessee. 2. It is humbly submitted that detailed submissions were made before the Ld. CIT(A) dealing with each and every aspect of the claim and each and every observation of the Ld. AO. The same have also been reproduced in the order of the Ld. CIT (A) [Ref. pgs. 23 to 36 of the CIT(A) order] and on which reliance is placed. However, for the sake of brevity the same are not reproduced herein. For the purpose of the present appeals, briefly the propositions raised are as follows: i. A perusal of the scheme of the Act and especially Sections 35 (2AB), 35A and 35AB reveals in no uncertain terms, that the purpose behind these provisions is to provide impetus to research, development of new technologies, obtaining patent rights, copyrights and know-how. Hence it is imperative to give the said section a more liberal interpretation instead of a hyper technical interpretation as give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T - Tax Appeal No. 1057 of 2017, Hon'ble Gujarat High Court and other judgements) relied on this proposition has not been considered by the Ld. CIT(A). The issue stands covered even by this case law (copy enclosed). v. As regards the judgements relied on by the Assessee-Appellant, it needs to be stated that it has been invariably held by the judgements of Hon ble High Courts some of which have also been approved by the Hon'ble Supreme Court, that the date of approval is irrelevant and the only requirement to claim deduction u/s 35(2AB) is that the expenditure is incurred in an approved facility. This condition has been admittedly fulfilled by the Appellant. The Ld. CIT(A) has not stated as to how these judgements relied on by the Appellant are not applicable to the facts of the present case. Hence, even on this count the deduction u/s 35(2AB) deserves to be allowed. [Also Ref.pgs.30 31 of CIT(A) dealing with the AO's observations on certain judgements] vi. As far as the other reasons given by the CIT(A) for denying deduction u/s 35(2AB) are concerned viz., the assessee-appellant has not entered in any agreement for cooperation in research and for audit of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Counsel for the assessee that the issue in appeal is already decided by numerous judgments of the Hon'ble Jurisdictional and other High Courts in favour of the Assessee. In this regard Ld. Counsel for the assessee also furnished copies of various judgements along with a note giving gist of the said judgements. The Ld. DR on the other hand relied on the orders of the lower authorities. 17. We have heard the rival submissions, perused the orders of the authorities below, the synopsis and judgements, we notice that the primary issue based on which the deduction has been denied by the lower authorities is that the expenditure has been incurred in previous year i.e., FY 2010-11 (AY 2011-12) whereas the approval of the Research Facilities of the assessee is granted from 02.06.2011 i.e. after the close of the relevant previous year. This issue is already covered in favour of the assessee by numerous judgments. We first take up the judgement of the Jurisdictional High Court in the case of PCIT v. Strides Arcolab Ltd. in ITXA No. 1674 of 2016 Bombay High Court. In this case, admittedly, the research facilities were approved subsequently after the close of the relevant year. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or its R D Centre at Rohtak for the Assessment Year ('AY') 2011-12, AY 2012-13 and AY 2013-14. .. Assessment Year 2011 -12 4. The Petitioner, on 30th March, 2011 wrote to the Secretary, Department of Scientific and Industrial Research ('DSIR') which is the 'Prescribed Authority' as per Section 35 (2AB), that it is in the process of setting up a second R D Centre at Plot No. 1, Sector 338 and 33C, IMT, Rohtak - in addition to the one it already had at Gurgaon. In the said letter, the Petitioner informed the DSIR that its Rohtak R D Centre is at its initial stage and that it would be seeking a formal approval for this facility under Section 35 (2AB) of the Act. The letter reads as under: Dear Sir, The R D Unit of the company situated at Palam- Gurgaon Road, Gurgaon, Haryana-122015 has been approved under Section 35(2AB) of the Income Tax Act by your organization till 31/03/2015. We wish to inform you that our company is working on setting up another Research Development facility at IMT-Rohtak. A brief write up on the project plan and current status is enclosed in Annexure-A herewith. The setting up of the new R D project of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit(s) of your firm at (i) Pa I am- Gurgaon Road, Gurgaon and fresh recognition to the in-house R D unit at (ii) Plot No. 1, Sector 33-B and 33-C, IMT Rohtak from 25.02.2014 by the Department of Scientific and Industrial research. The recognition is valid upto 31.03.2015. Terms and Conditions pertaining to this recognition are given overleaf. 3. This letter is issued in lieu of this Ministry's letter No. F.No. TU/IV- RD/1224/2010 dated, 29.03.2010 which has been withdrawn and cancelled. 4. Kindly acknowledge the receipt of this letter. 9. On 31st March, 2014, the Petitioner submitted an application in Form 3CK for AY 2011-12 to the DSIR, for approval of the Rohtak R D Centre and annexed therewith the Cooperation Agreement executed with the DSIR. On 2nd February, 2015, the DSIR granted its approval in Form 3CM in respect of the Rohtak R D Centre from 1st April, 2013 to 31st March, 2015. 10. Thereafter, under cover letter dated 10th March, 2015, the DSIR granted approval in Form 3CL dated 9th March, 2015 for AY 2011-12 in respect of the entire R D expenditure of f 391.17 Crores, incurred by the Petitioner. This certification, though certifying the entire R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R D expenditure of capital and revenue on the new centers ' 12. It was the stand of the Petitioner that since the DSIR has approved the recognition of the Rohtak R D Centre, the expenditure for R D incurred thereon, deserves to be considered since inception, and that it would therefore, be entitled to claim deduction from AY 2011-12. It was further claimed in the said letter that the Auditor's report for the AY ended 31st March, 2011 had contained the exact particulars of the expenditure incurred on the Rohtak R D Centre. This stand of the Petitioner was not accepted by DSIR. Thus, it issued a Corrigendum dated 7th May, 2015 thereby amending and modifying the said Form 3CL dated 9th March, 2015, whereby the amount of R D expenditure eligible for deduction u/s 35 (2AB) of the Act, relevant to AY 2011-12, was reduced by the said amount of ₹.124.78 Crores, which was the expense attributable to the Rohtak R D Centre. The DSIR sent a copy of the same to the Director General, Income Tax (Exemptions) on 11th May, 2015. 13. This Corrigendum is impugned by the Petitioner in the present writ petition which was originally filed seeking the following prayers: (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal of the R D expenditure of the Rohtak R D Centre in the certification issued by the DSIR is wholly unsustainable. 39. The Petitioner has fulfilled all the necessary conditions for availing the benefit under Section 35 (2AB) of the Act in view of the settled position in Sandan Vikas (supra) and Claris Lifesciences (supra). The relevant portion of the judgement in Sandan Vikas (supra) of the learned Division Bench of this Court which in turn approves the view taken by the Gujarat High Court in Claris Lifesciences (supra) reads as under: 3....The objective is to encourage research and development by the business enterprise in India. 4. The provision further states that in order to claim this weighted deduction, it is to be certified by the competent authority that the assessee had undertaken research and development activity. ......in CIT v. Claris Lifesciences Ltd. [2010] 326 ITR 251 (Guj). We have gone through the aforesaid judgment of the Gujarat High Court and find that the Gujarat High Court detailed in no uncertain terms that the cut-off date mentioned in the certificate issued by the DSIR would be of no relevance. What is to be seen is that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that to boost the research and development facility in India, the Legislature has provided this provision to encourage the development of the facility by providing deduction of weighted expenditure. Since what is stated to be promoted was development of facility, the intention of the Legislature by making the above amendment is very clear that the entire expenditure incurred by the assessee on development of facility, if approved, has to be allowed for the purpose of weighted deduction. 10. We are in full agreement with the reasoning given by the Tribunal and we are of the view that there is no scope for any other interpretation and since the approval is granted during the previous year relevant to the assessment year in question, we are of the view that the assessee is entitled to claim the weighted deduction in respect of the entire expenditure incurred under S.35(2AB) of the Act by the assessee 5. We are in full agreement with the aforesaid approach of the Gujarat High Court. No substantial question of law, therefore, arises. The appeal is dismissed... 40. The settled position in law is that, for availing the benefit under Section 35 (2AB) of the Act what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011, the Petitioner has been candid with the DSIR about its expenses for the Gurgaon and Rohtak R D Centres and has given the break-up of the expenditure incurred thereupon; has submitted the Auditor's certificate required for the same; has entered into an agreement with the DSIR as required for sharing of technologies; and has also repeatedly requested for certification of the expenditure incurred by it. Under such circumstances, an isolated error in an application cannot result in the entire benefit itself being refused to the Petitioner resulting in it being deprived of the deduction as permissible under Section 35 (2AB). 44. In the facts and circumstances of the present case, this Court holds that the Petitioner is entitled to deduction under Section 35 (2AB) of the Act for the expenditure in respect of its Rohtak R D Centre as per the provisions of Section 35 (2AB) for AYs 2011-12, 2012-13 and 2013-14. Accordingly, the Corrigendum dated 7th May, 2015 is set aside and the Respondent No.l DSIR is directed to issue afresh certification in Form 3CL in respect of the expenditure on scientific research on the Rohtak R D Centre of the Petitioner for AYs 2011-12, 2012-13 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther noted that the DSIR in its approval letter dated February 27, 2001, by way of note mentioned that the facility approved for the purpose of section 35AB(2) was from February 27, 2001 till March 31, 2003. However, the assessee in the return claimed weighted deduction under the said provision at one and half times the expenses incurred on the entire expenditure on establishment of the facility. The claim was restricted by the assessing authority only with effect from February 27, 2001. On appeal, the Tribunal set aside the order of the assessing authority and allowed the claim for the whole of the year. Dealing with the said situation, the Division Bench of the Gujarat High Court made a specific observation, which reads as under (pages 254 and 255) : The Tribunal has also considered rule 6(5A) and Form 3CM and come to the conclusion that a plain and harmonious reading of the rule and Form clearly suggests that once the facility is approved, the entire expenditure so incurred on development of the research and development facility has to be allowed for weighted deduction as provided by section 35AB(2). The Tribunal has also considered the legislative intention behind the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for development of facilities. The Tribunal has also considered rule 6(5A) and Form No. 3CM and come to the that a plain and harmonious reading of the rule and Form clearly suggests that once the facilities is approved, the entire expenditure so incurred on development of the research and development facilities has to be allowed for weighted deduction as provided by section 35AB(2). The Tribunal has also considered the legislative intention behind the above enactment and observed that to boost the research and development facility in India, the Legislature has provided this provision to encourage the development of the facilities by providing deduction of weighted expenditure. Since what is stated to be promoted was development of facilities, the intention of the Legislature by making the above amendment is very clear that the entire expenditure incurred by the assessee on development of facilities, if approved, has to be allowed for the purpose of weighted deduction. 10. We are in full agreement with the reasoning given by the Tribunal and we are of the view that there is no scope for any other interpretation and since the approval is granted during the previous year relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Banco Products I. Ltd. v. s DCIT in Tax Appeal No. 1057 of 2017. The facts in this case as taken from the said judgement are as follows: - 2. The appellant assessee is a company registered under the Companies Act and is engaged in business of manufacturing of automotive gaskets, radiators and similar other automobile parts. For the assessment year 2008-2009, the assessee had filed return of income on 27.9.2008 declaring total income of ₹.20.23 crores (rounded off). One of the claims made by the assessee in such return was of deduction of ₹.1.26 crores (rounded off) under section 35(2AB) of the Income Tax Act. The Assessing Officer took the return in scrutiny and in his order dated 24.3.2010, under section 143(3) of the Act, disallowed the assessee's claim of deduction under section 35(2AB) of the Act. 3. Before the Assessing Officer, the assessee had pointed out that the assessee had set up Research and Development facilities by incurring expenditure. An application for recognition of such facility was filed before the Ministry on 22.12.2006. Such recognition was granted on 2.9.2007. In the meantime, the assessee had applied for approval of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Claris Lifesciences Ltd. is therefore distinguishable and not applicable to appellant's case. Against the said order of the CIT(A), the assessee carried the matter in further appeal before the Tribunal. The Tribunal disposed off the appeal remanding the issue back to the Assessing Officer for a fresh consideration. On such facts the Assessee filed appeal before the High Court raising the following question: Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in restoring the matter back to the Assessing Officer for deciding the allowability of deduction under section 35(2AB) of the Income Tax Act, 1961? The Hon'ble High Court after considering the submissions of both sides held as follows: - 7. The record would thus show that the assessee claimed weighted deduction under section 35(2AB) of the Act on the expenditure incurred for setting up research and development facility. This was backed by the approval granted by the concerned authority with respect to such facility. The Revenue authorities i.e. the Assessing Officer and the CIT(Appeals) were of the opinion that such deduction canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed authority is a prime condition. 10. In case of Claris Lifesciences Ltd.(supra), this Court examined a situation where the Tribunal had allowed the assessee's claim of deduction under section 35(2AB) of the Act when such expenditure was incurred during the period prior to the date of approval by the prescribed authority. The Court noted with approval the conclusion of the Tribunal that the provision is made for giving a boost to research and development facilities in India and once the facility is approved, entire expenditure so incurred in developing the same has to be allowed by way of deduction. It may be that as pointed out by the Revenue, all events i.e. incurring of expenditure, applying for approval and grant of approval happened in the same financial year. However, this was not the basis on which the Court has confirmed the decision of the Tribunal. There is nothing in the said judgment to suggest that had these events fallen in different years, the view of the Court would have been any different. 11. Judgment of this Court in case of Claris Lifesciences Ltd.(supra) was followed by Delhi High Court in case of Maruti Suzuki India Ltd.(supra) in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, having granted special deduction for such expenditure, the same should be seen in light of the purpose for which it has been recognised. Research and development facility can be set up only after incurring substantial expenditure. The application for approval of such facility can be made only after setting up of the facility. Once an application is filed by the assessee to the prescribed authority, the assessee would have no control over when such application is processed and decided. Even if therefore, the application is complete in all respects and the assessee is otherwise eligible for grant of such approval, approval may take some time to come by. The claim for deduction cannot be defeated on the ground that such approval was granted in the year subsequent to the financial year in which the expenditure was incurred. No such indication was given by this Court in case of Claris Lifesciences Ltd. (supra), none appears from the judgment of the Delhi High Court in case of Maruti Suzuki India Ltd. (supra). 13. In the result, appeal is allowed. Question is answered in favour of the assessee. Decision of Assessing Officer to restrict the assessee's claim for deduction on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave considered the facts of the case material available on record. The appellant contested against disallowance of ₹ 39,3547- u/s 14A of the Act. Though the appellant raised the ground, it has not made any submissions in support of its contention during the course of appellate proceedings. Therefore, the issue is decided in accordance with facts of the case and judgements available on the issue. It is seen from the financial statements that the appellant has sufficient own funds (share capital and reserve and surplus) to make the investments on equities. Therefore, in view of decision of the jurisdictional High Court in the cases of Reliance Utilities and Power Ltd. (313 ITR 340) and HDFC Bank Ltd. in appeal no. 330 of 2012 vide order dated 23.07.2014, there is no case for disallowance of any interest under rule 8D(2)(ii). The disallowance calculated under rule 8D(2)(ii) is deleted. Similarly, disallowance under section 14A of the IT Act can not exceed the exempt income earned by the appellant. In view of the decision of the jurisdictional tribunal in the case of Tata Industries Ltd. Vs ITO [2016] 181 TTJ 600 (Mumbai - Trib.) and Future Corporate Resources Ltd. Vs DCIT [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring ₹.15,55,062/- as income. Subsequently, the assessment was completed by the Assessing Officer disallowing the purchases of ₹.15,55,062/- and computed the income under normal provisions at NIL after set off of brought forward losses. The Assessing Officer computed the book profits u/s. 115JB of the Act at ₹.84,73,270/-. Assessee carried out the matter before the Ld.CIT(A) and the Ld.CIT(A) after calling for the remand report sustained the disallowance observing that the assessee voluntarily offered additional income in the revised return of income based on the statements recorded in the survey proceedings u/s. 133A of the Act and therefore concluded that there is no infirmity in the Assessment Order. 34. Ld. Counsel for the assessee reiterated the submissions made before lower authorities. 35. On the other hand, Ld. DR placed reliance on the orders of the Authorities below. 36. We have heard the rival submissions, perused the orders of the authorities below. Ld.CIT(A) had considered the submissions of the assessee and taking note of the fact that the assessee himself in his revised return of income offered additional income based on the statements reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils filed during the remand proceedings and personally hearing the appellant's AR, the AO made a Remand Report dt.29.11.2018 in which inter-alia in Para 6.2 the AO has observed Remand Report: 6.1 Aggrieved by the assessment order under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, the assessee preferred an appeal to the CIT(A)-22 , Mumbai. During the appellate proceedings, the assessee filed additional evidences as per section 46A of the Income Tax Act, 1961 vide letter dated 26.02.2016. 6.2 During the course of remand proceedings, the assessee was asked to produce the additional evidences vide letter dated 07.08.2018. The assesses through the authorized representative attended on 25.10.2018 filed the details. The assessee stated that the addition of ₹ 15,55,0627- includes purchase of packing materials of R.s 5,57,596/- and expense of ₹ 9,97,468/- of repairs maintenance expenses, stores spares etc., and these are expenditure incurred in ordinary course of business. Top prove the genuineness of the purchases the assesse filed the following details: i) Party - wise / item-wise purchases/expenses in the form of a chart, ii) Cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inference on the evidences furnished by the assessee in support of its claim that the purchases made are genuine. The only grievance of the Assessing Officer in the remand report is that the details were not furnished in the course of the assessment proceedings or re-assessment proceedings, therefore, it is an afterthought. Assessing Officer has simply gone by the statement of the assessee made during the survey proceedings ignoring the fact that the assessee retracted the said statement later on. Assessing Officer completely ignored the details furnished by the assessee in respect of the purchases made. The Ld.CIT(A) also simply relying on the remand report held that since the assessee has given a statement in the survey u/s. 133A of the Act voluntarily offering the purchases, the same are not genuine. We observe that even the Ld.CIT(A) ought to have gone into the evidences furnished before him in the absence of any finding by the Assessing Officer in his remand report, when assessee made a claim before him that the purchases made are genuine with supporting evidences. In the circumstances, we are of the view that the entire purchases cannot be treated as non-genuine without findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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