2015 (10) TMI 73

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....by the appellant. The same is liable to be fully allowed. 2. On the facts and in the circumstances of the case, Ld.CIT(A) has erred in confirming disallowance of business loss of Rs. 8,09,388/- suffered by the appellant. The same is liable to be fully allowed." 2. Facts in brief:- The assessee is a private Ltd., Co. and a 100% subsidiary of Ezendech Co. Ltd., Korea ('ECL') and is engaged in the manufacture of sheet metal parts of refrigerator, air conditioners etc., It has tied up for dedicated supply of components to OEM customers such as L.G.India and Samsung India. For the AY 2005-06 the assessee filed a return of income on 25.10.2005 declaring a loss of Rs. 1,44,31,247/-. The AO vide his order dt.28.12.2007 passed u/s 143 ....

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....ectricity connection; (b) no evidence of production; (c) no evidence to establish that the building was ready for use; (d) no wages have been paid at all. He observed that the basic onus of establishing that the machinery was ready for use and had been installed has not been discharged by the assesse. In the opinion of the Ld.CIT(A) the machinery can be said to be installed and ready to use only when all the supporting logistics are in place. He was of the view that meager sale of Rs. 601/- has been shown, there is no evidence to support that any trial run manufacturing has been done or machinery was installed and ready to use. He was of the view that the preponderance of probability regarding installation of machinery and manufacturing act....

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....illed workers. Diesel sets were used for manufacturing and the books reflected large quantities of diesel purchased. 4.3. The Ld.D.R. Mrs. Parwinder Kaur on the other hand relied on the order of the AO as well as of the Ld.CIT(A) and submitted that there is only one transaction of sale and that too amounting to a small figure of Rs. 698.70, which demonstrates that manufacturing activity has not commenced. She submitted that there are lot of contradictions in the submissions of the assessee and tried to point out that the material transfer note at page 78 was dt. 26.3.2005 and invoice cum challan was dt. 28.3.2005 and whereas Form no.RG1 daily stock account at page 133 of the paper book records that 10 units were for home use. 4.3.1. O....