TaxTMI 
TaxTMI 
2015 (2) TMI 456
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....r, on the facts and in the circumstances of the case, and in law, the Hon'ble ITAT was justified in holding that the assessee fulfills the provisions of Section 80 IB (2) (iv) of the Act, 1961, where the basic condition for deduction is that the industrial undertaking employs ten or more workers in a manufacturing process whereas it has actually employed only 8 workers as certified in form No. 10 CCB filed alongwith audit report?" (ii) "Without prejudice to the ground No. 1 above, whether on the facts and the circumstances of the case and in law, the ITAT was right in holding that the respondent fulfills the conditions of necessary employment of ten workers for claiming deduction u/s 80 IB without appreciating that out of the ten workers, two persons working as manager and supervisor are also working partners in the two sister concerns of the respondent and actively engaged in the affairs of those firms and in lieu of that getting salary there from?" In ITA No. 770 of 2010, the following substantial question of law has been framed in addition to the aforementioned substantial questions of law:- (iii) Whether on the facts and in the circumstances of the case, the memora....
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....rther investigation, the Assessing Officer found that the two persons stated to be working as Supervisor and Manager i.e. Shri Surinder Mittal - Supervisor and Shri Narinder Mohan Mittal-Manager, were none else than the sons of the respondent and further that the aforesaid two persons were also working partners in (i) M/s Euro Containers and (ii) M/s Plastic Sales India i.e. sister concerns of the concerns owned and run by the respondent and were also drawing salary in the aforementioned capacity from the aforementioned concerns. On the basis of the above, it was observed that only eight workers had been employed in the manufacturing process and the insertion of two other names i.e. Supervisor and Manager in the list of workers was an after thought to justify the claim for deduction under Section 80 IB. Consequently, while passing order under Section 153A read with Section 143 (3) on 27.12.2006, the Assessing Officer did not allow the respondent the deduction claimed under Section 80 IB. Being aggrieved with the order of the Assessing Officer, the respondent-assessee filed appeals before the CIT (A), who vide order dated 29.1.2009 allowed the same with respect to the matters in ....
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....hich Surinder Mittal and Ravinder Mittal, allegedly working as Supervisor and Manager, respectively, in the respondent's concern, were working partners and thus actively engaged in their business activities and apparently not in the manufacturing activities of the respondent's concern. Therefore, contention of the respondent that the said two persons were working in the respondent's concern was only a ploy to claim the deduction under Section 80 IB, which was not legally admissible. Qua additional substantial question i.e. No. 3 framed in ITA No. 770/2010 with regard to deletion of disallowance of Rs. 6,55,270/- under Section 69A in addition to the other two substantial questions of law framed in the other ITA's, revenues plea is that the memoranda of accounts, not being books of account written in regular course of business are not admissible as evidence and therefore could not be relied upon. Further, availability of cash of Rs. 25,000/- with each member of the family was accepted taking a fair view and taking into consideration status of the family, but this acceptance did not amount to acceptance of memoranda books as regular books of accounts. We have hea....
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....elation to manufacture, therefore, the same encompasses the entire process of converting raw material into finished goods to make it commercially expedient and even handling and transfer of raw material is integrally connected with the process of manufacture. In the aforementioned background, we see no reason to disagree with the finding recorded by the ITAT upholding the findings of the CIT (A) qua deduction under Section 80 IB. We also take note of the fact that for the assessment year 2002-03, on identical facts, the claim of the assessee was allowed, that too in an order under Section 143(3). In the circumstances, it is not open to the department to take up inconsistent stand until and unless contrary facts are brought on the record. Reference in this context is made to the decision in CIT vs. Kelvinator of India Ltd. (256 ITR 1) (Delhi), wherein the Delhi High Court held that mere change of opinion cannot form the basis of reopening a completed assessment. Consequently, for the sake of consistency, the department is not permitted to change its stand unless and until some fact contrary to the facts earlier taken into account are brought on record. However no contrary facts h....
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....ring the regular course of business. The ITAT took into account that even the Assessing Officer had noted that keeping in view the status of the family every person including HUF and ladies were having cash of Rs. 25,000/- each, children's money to the extent of Rs. 50,000/- lying with the grandmother i.e. assessee was also treated as explained. Likewise shaguns from 320 persons amounting to Rs. 4,58,200/- was also explained as list of the persons was furnished by the assessee. On the basis of the same, total cash of Rs. 14,18,200/- including Rs. 6,35,000/- withdrawn from books was considered to be explained. However, remaining cash of Rs. 6,55,270/- was treated as un-explained under Section 69 of the Act. The ITAT also took into account the explanation given by the respondent-assessee before the CIT (A) regarding cash amount of Rs. 6,55,270/- treated as un-explained under Section 69 of the Act as also the conclusion of the CIT (A) that the explanation given by the respondent-assessee had not been accepted by the Assessing Officer primarily on the ground that memoranda books of the family members of the assessee as per which the cash availability was explained could not be a....