TMI Blog2022 (12) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of this Tribunal, therefore, additional ground raised by the assessee becomes infructuous and hence does not require adjudication. Addition of unsecured loan taken - AR failed to put up the details of confirmation and creditworthiness of these parties, however, the contention of ld.counsel for the assessee is that all the confirmations were duly placed on record of the ld.CIT(A) - HELD THAT:- As decided in [ 2014 (1) TMI 1240 - ITAT AHMEDABAD] after considering all aspects of the matter, we find that the order of the l;d.CIT(A) is cryptic and, therefore, in the interest of justice, this issue is restored back to the file of ld.CIT(A) to decide it afresh after verifying the details as submitted by the assessee. - ITA Nos. 323 to 327/SRT/2018 And ITA No.689/SRT/2018 - - - Dated:- 19-12-2022 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri A. Gopalkrishnan, CA For the Respondent : Shri Vinod Kumar, Sr. DR ORDER PER DR. A. L. SAINI, AM: Captioned six appeals filed by the same assessee, pertaining to Assessment Years (AYs) 2005-06 to 2007-08, 2009-10 and 2011-12, are directed against the separate orders passed by the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06. The appellant humbly prays that the appeal be allowed in toto. 5. Brief facts qua the issue are that the assessee has claimed deduction of Rs.11,08,626/- under section 80IB of the Income Tax Act. During the course of assessment proceedings, vide letter dated 26.7.2007, the assessee was asked as under: (i) You have claimed deduction of Rs.11,08,630/- under section 80IB of the I.T. Act. On going through the report of 10CCB, it is noted that you have not employed even a single worker in the process of job work. As per provision of section 80IB, there should be at least 10 or more workers employed for claiming deduction. As you are not fulfilling one of the conditions enumerated in the section 80IB, therefore, you are show cause as to why you claim 80IB should not be disallowed? (ii) It is noted from the record of AY.2004-05 that the Department has not considered your business activity as manufacturing and disallowed the claim of deduction u/s. 80IB of the Income Tax Act. Therefore, you are show cause as to why your claim for deduction under section 80IB should not be disallowed as you are not engaged in the manufacturing activity? (iii) Further, it is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into with the Electricity Department on 23.03.2004 for the release of power connection and ultimately power was released on 30.03.2004. Thus, even if the assessee operates the machinery for one day on 31.03.2004 and manufactures items, it is eligible for deduction u/s 80IB of the Act. Therefore, as per ld Counsel, this critical evidence has been overlooked and ignored by the lower authorities while concluding that power has not been used for manufacturing. The Learned Counsel also pleaded that ld CIT(A) did not confine scope of adjudication up to the direction given by Hon`ble ITAT, which is against the principle of natural justice. 11. About plant and machinery, ld Counsel submits that entire machinery has been transported in a truck by the supplier and installation of commissioning of Plant and Machinery was done by the employees of the assessee within 5 to 10 days because of their past experience. The Purchases of raw materials has never been disputed by the AO either in the original assessment order or in the remand report. The assessee sufficiently substantiated the diesel purchase bills and the AO has not controverted the same except to point out some discrepanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where he gets the goods manufactured totally by an outside agency. Incidentally, the Madras High Court in its decision in Chillies Export House Ltd.'s case (supra) referred to the Allahabad High Court decision in the case of Bulbu Prasad Amarnath v. CST [1964] 15 STC 46 wherein it was held that it is not merely the person who manufactures but even the person who had the goods manufactured would be entitled to the benefit of the definition. In so doing the learned Judges referred to 33, Halsbury's Laws of England, Third Edn. 'Revenue', paragraph 407, wherein it was said that a person is deemed to make goods or to apply a process if the goods are made, or the process is applied, by another person to his order under any form of contract other than a purchase. Therefore, we have to proceed on the basis of the decisions cited that an assessee would be said to be engaged in manufacturing activity if he is doing a part of the manufacturing activity by himself and for the rest of it engages the services of somebody else on a contract other than a contract of purchase. 7. Coming to the facts of the instant case, we find from the facts found by the Tribunal that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and machinery at its own factory. If in substance the manufacturing company has employed another company for getting the goods manufactured by it under its own supervision or control, the assessee can be considered as a company engaged in manufacture of goods and, thus, an industrial company. Mr. Dalvi has also invited our attention to the fact that in Neo Pharma (P.) Ltd.'s case (supra), the Division Bench of our Court had relied upon the judgment of the Calcutta High Court in the case of Addl. CIT v. A. Mukherjee Co. (P.) Ltd. [1978] 113 ITR 718 , and the Board has already accepted the correctness of the said judgment in A. Mukherjee Co. (P.) Ltd.'s case (supra) in its Circular No. 347 dated 7-7-1982 (See Taxmann's direct Taxes Circulars, Vol. 1, 1985 edn., p. 1112), Mr. Dalvi is right in this submission. 4. Mr. Jetly, the learned counsel for the revenue, has submitted that the assessee cannot be considered as a manufacturing company as the assessee did not depute its own staff at the factory and did not exercise supervision over the manufacturing activity undertaken by Roche Products Ltd while manufacturing pharmaceutical goods for the assessee. It is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 13. In the result, appeals filed by assessees (in ITA Nos. 323 to 327/SRT/2018) are allowed. 14. Now, we shall take penalty appeal of assessee, in ITA No.689/SRT/2018 for AY.2007-08, wherein the grounds of appeal raised by the assessee are as follows: 01. The order imposing penalty U/s. 271(1)(c) of the Act is contrary to the facts of the case and prejudicial to the Law. The appellant has neither concealed its income nor submitted any inaccurate particulars of income and the action of the Learned Commissioner of Income Tax (Appeals) is contrary to the facts of the case and law and deserves to be deleted. 02. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned Assessing Officer imposing penalty U/s. 271(l)(c) to the tune of Rs.21,19,870/- 03. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Learned Assessing Officer in imposing penalty U/s. 271(1)(c) for both concealment as well as furnishing of inaccurate particulars of income. The action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke to humbly request to permit us to raise the following additional grounds of appeal before your honor as under. 1. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income tax (Appeals) has erred in not adjudicating the grounds of appeal raised by the appellant as against the addition made by the Learned Assessing Officer to the tune of Rs.25,35,000/- out of unsecured loan taken from various parties, considered as unexplained cash credit U/s.68 of the Income Tax Act, 1961. The action of the Learned Commissioner of Income Tax (Appeals) is contrary to the facts and circumstances of the case and deserves to be deleted. 2. On appreciation of the facts and circumstances of the case and interpretation of law, the Learned Commissioner of Income tax (Appeals) ought to have adjudicated the grounds of appeal regarding addition made out of unsecured loans to the tune of Rs.25,35,000/- which was set aside and restored back by the Honorable ITAT in ITA No. 1487/Ahd/2010 ITA No. 1364/Ahd 2010 vide order dated 31.10.2013. By way of the above additional ground of appeal the appellant has raised an issue which has already been raised before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave considered the submission made by the ld.AR that the unsecured loan from the doctor Alka Gupta, Sunderlal Agarwal Sons HUF and Suresh Agarwal Sons HUF appeared to be genuine and therefore I direct the AO to delte from the addition made from the assessment order made. However with regard to the loan of Rs.14,00,000/- from National Minerals, and Akshat Leasing and Hire Purchase Pvt.Ltd., the loan is not genuine because of the fact that the appellant has himself said that the loan has been cleared during the year under consideration. The ld.AR also failed to put up details of confirmation and creditworthiness of these parties. In view of this the AO is directed to delete addition of Rs.11,35,000/-. Accordingly, this ground of appeal is allowed partly. 7.1. We find that the ld.CIT(A) has given a finding that the ld.AR failed to put up the details of confirmation and creditworthiness of these parties, however, the contention of ld.counsel for the assessee is that all the confirmations were duly placed on record of the ld.CIT(A). He has drawn our attention towards page Nos.164 to 166 of the paper-book. After considering all aspects of the matter, we find that the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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