TMI Blog2023 (10) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... king 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 findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 3. Learned AO held that purchases made by these entities were all bogus and the statement of Manoj Jain, proprietor of M/s Paras Trading Company was relied who admitted to have given the bogus entries. Learned AO examined the trail of transactions involving Company of Manoj Jain and the appellants who were group entities of Sharp Group and concluded that they had shown purchases which were bogus and incorrect credit passed. The books of account were rejected and the learned AO concluded that as the assessee unit is being shown as 100% captive unit of the flagship company i.e. M/s Sharp Global with 100% so called supplies to M/s Sharp Global only. Accordingly, the appellant company entities were considered to be pass through entity and the ultimate beneficiary was Sharp Global Ltd. only. Accordingly, learned AO made protective additions in the hands of the assessee companies on account of bogus purchases. Further, learned AO concluded that as no manufacturing activity was done by the assessee company and the assessee is not entitled to 80-IB deduction, therefore, manufacturing expenses were disallowed. 4. Learned CIT(A) had allowed the appeal of the assessee by ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 6. Heard and perused the record. 7. On behalf of the assessee, the sum and substance of the arguments of learned AR was that the Coordinate Bench in the case of Sharp Mint Ltd., which was also a group entity, in ITA nos. 5076 to 5082/Del/2017 for A.Y. 2008-09 to 2012-13 has taken into consideration the judgment of CESTAT and concluded that purchases made by the Jammu based entities are genuine and that they were engaged into manufacturing activities. He submitted that in another entity group case in ACIT Vs. Fine Aromatics [ITA nos. 5042, 5043, 5032 5068/Del/2017 for A.Y. 2008-09 to 2011-12], the Coordinate Bench vide order dated 21.07.2023 has given the substantive finding that there was no incriminating material found at the time of search and learned CIT(A) has rightly relied upon the judgment of Hon ble Delhi High Court in the case of Kabul Chawla 61 taxmann.com 412. He also submitted that judgment of the Hon ble Supreme Court in the case of Abhisar Buildwell 454 ITR 212 be also relied. He thus submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment 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. These findings have been relied by the Coordinate Bench in the case of Sharp Mint Ltd. (supra) and in paras 10 11 Co-ordinate Bench has made following observations for dismissing the appeal of the Revenue: 10. Thus, once the CESTAT has held the purchases made by four Jammu bases entities to be genuine, the entire case of the Revenue based on the investigation carried out by Central Excise Department, Jammu would fall flat. It is further relevant : observe, while deciding the appeals filed by the Revenue in case of M/s. Jai Am bay Aromatics, one of the four Jammu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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