2014 (11) TMI 516

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....s and circumstances of the case, the Income Tax Appellate Tribunal was right in concluding that the income of the new industrial until, the receipts of which were admittedly found recorded in books could be included in the income taxable in block assessment in the light of the provisions of Section 158BB(1)(d) which excludes from the scope of block assessment such income assessable for assessment year for which the time for filing the return of income has not expired as on the date of search ? (e) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the new industrial unit cannot claim to have employed the required number of workers viz. 10 workers by including peons, clerk and head clerk employed by the undertaking the only business of the undertaking being job printing ?" 2. The facts are not much in dispute. The appellant is a Private Limited Company which publishes a daily newspaper "Herald". Consequent to a search warrant issued under Section 132 of the Income Tax Act, executed on 01.11.1999 and 02.11.1999, the Deputy Commissioner of Income Tax, Circle 1, Panaji made block assessment for the period 01.04.1989 to 01.1....

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....ed Counsel for the Department. 5. Shri Robinson, the learned Counsel for the appellant points out that the assessment for the Assessment Year 1997-98 was completed under Section 143 after scrutiny, particularly of the debtors balance. The amount of Rs. 17,00,000/- was already reflected in the books of account of the appellant, and hence, it cannot be treated as undisclosed income for the purpose of Section 158(B)(b) of the Income Tax Act and also cannot be viewed against the assessee in the light of Section 69 thereof. He submits that the I.T.A.T. has not properly appreciated this position in law, though it mentions necessary facts. To substantiate his contentions, he draw support from 256 ITR 129 Bom. (CIT .vs. Vikram A. Doshi) and 337 ITR 541 Bom. (CIT vrs. Templeton Asset Management (India) P. Ltd.) 6. Dealing with the question (d), noted supra, the learned Counsel states that the approach of the I.T.A.T. and other authorities for including the income of new industrial unit in the income of the assessee in block assessment period is also contrary to law. Stipulation in Section 158 BB (1)(d) of the Income Tax Act has been overlooked. That section excludes from the scope of ....

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....ispute before this Court. After search on Austro Beer, the sister concern of the assessee, transactions were discovered. She points out that the assessee initially came up with a defence that the amount of Rs. 17,00,000/- disclosed investment and later on pointed out that it was a loan extended by the assessee to its sister concern. The name of the said sister concern M/s. Austro Beer does not figure in the list of sundry debtors. The Assessing Officer in this situation has correctly appreciated the factual position, and the said finding of fact has been upheld thereafter by two superior forums. Material essential to take this view came out only during search. She further submits that the Assessment Officer directed the assessee to file return in March, 2000/ November, 1999, but the assessee choose not to file return and disclose that income. 10. She invites attention to the amendment effected in 2009 to the Income Tax Act,1961, vide Section 2(29BA) where the Parliament has added the definition of phrase "Manufacture". She contends that sweeper, clerk, peon are not involved in any manufacturing process and therefore, have been rightly excluded. 11. She also reads out the orde....

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....cause of the inconsistencies emerging therefrom. All these are findings on facts recorded by the I.T.A.T. 14. Contention, that the assessment of the appellant for the year 1997-98 was completed after scrutiny of the debtors balance and A.O. had verified the bank account and audited books of accounts produced before it therefore, does not hold any water. Section 69-B of the Act is on treatment to be accorded to amount of investments, etc., not fully disclosed in books of account. Where in any financial year the assessee has made investments and the Assessing Officer finds that the amount expended on making such investments exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount is deemed to be the income of the assessee for such financial year. Fact that investment in Austro Beer account has not been reflected in the balance sheet of assessee as on 31.3.1997 & onwards is not in dispute. Investment account of M/s Austro Beer shows the opening....

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....basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years; the undisclosed income can be computed. Provisions of both these Sections are very clear. Thus, the bar prescribed is not absolute. But then the appellant - assessee ought to have pointed out how the said income was disclosed in books before the date of raid & in its regular return. The I.T.A.T. has observed in paragraph no.11 of its order that no clarification was given as to whether the deductions under Section 80 IA was claimed in that return or not. The accounts officer has noted that the computerized books of account were produced before the DDIT only. The I.T.A.T. has found that said addition was made on the basis of the documents obtained during search and during post search enquiry. During arguments in this appeal, the learned Counsel appearing for the appellant was asked whether the assessment in terms of the return filed on 30.11.1999 is completed or not. The learned Counsel replied on 08.10.2014 that he was not having any instructions on this iss....

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....1922. The exemption provided for, was found to be with a view to encourage the Cooperative Societies to construct Warehouses which were likely to be useful in the development of rural economy, therefore, the Hon'ble Apex Court held that liberal interpretation was necessary. 20. Other two judgments cited by Shri Robinson, the learned counsel for the appellant are by the Division Bench of this Court and by the Division Bench of the Delhi High Court respectively. Therein the question was - Whether employees hired through contractor for carrying on manufacturing activity & the casual workers also needed to be included ? In said precedents, the fact that those employees hired either through the contractor or working as casuals, were engaged in the manufacturing process was not in dispute. 21. Here the provisions of Section 80 IA (2)(v) of the Income Tax Act employs two phrases; first one is "Industrial Undertaking" and the second is "Manufacturing Process". This Clause (v) considers the Industrial Undertaking which manufactures or process articles or things. By implication, it excludes those Industrial undertakings which do not manufacture or produce any article or thing. Sect....