TaxTMI 
TaxTMI 
2023 (10) TMI 838
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....art of M/s Sharp Group upon which search and seizure operation u/s 132 of the Income-tax Act, 1961 (hereinafter referred to as the "Act") was conducted by the Investigation Wing on 20.01.2014. The assessees/appellants' premises were also covered u/s 132(1) of the Act. As the cases were centralized, notice u/s 153A of the Act was issued and the matter was examined by the learned AO. 2. The main allegation against the Sharp Group of companies was that as per the Central Excise Rules, manufacturing units get refund of excise duty paid, if the manufacturing unit is installed in the State of Jammu & Kashmir. The practice is that the manufacturer sells the finished products to other manufacturers for whom the finished product is the raw-material....
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....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 a....
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....ce u/s 133(6) when the Assessing Officer specifically mentioned that no reply were filed in response to notice u/s 133(6), therefore, assumption of the contention that they have filed the reply without verifying from the assessment records or referring the matter to AO is clear violation of rule 46A of the I.T. Act being additional evidence accepted in appellate proceedings 5) The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 24,64,19,628/- made by AO on account of disallowance of deduction u/s 80IB(4) of the Act. 6) The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 1,64,74,820/-on account of disallowance of manufa....
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....dence in the cases of present appellant also, therefore, order of learned CIT(A) requires no interference. 7.1 On the other hand, learned DR submitted that during the assessment proceedings learned AO had made enquires and examined the record independently and had concluded about the bogus purchases on the basis of statements recorded. He submitted that retracted statement of Manoj Jain was corroborated by the trail of transactions examined. His stress was on the argument that material found in enquiry after search should be considered to be incriminating material. 8. The Bench has taken into consideration the facts of all the cases and for convenience the disposal of all the grounds in the respective appeals findings are required to be g....
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....search. 10. It comes up from the order of learned AO that primarily he relied on the Central Excise Department'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 b....
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....r (Appeals). Accordingly, we uphold the same by dismissing the grounds raised by the Revenue. Our aforesaid decision will apply mutatis mutandis to rest of the appeals under consideration." 11. Similarly, in the case of Fine Aromatics (supra), the Coordinate Bench, in which one of us was in the quoram, has drawn the conclusion that no incriminating material was found at the time of search and thus relying on the judgment of the Hon'ble Supreme Court in the case of Abhisar Buildwell (supra), sustained the order of learned CIT(A). 12. 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 sear....