Dy.Commissioner of Income Tax Circle-1(2), Baroda V. M/s. Kaizenwitchgear Products, Baroda

ITSSA 120/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7908 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Unexplained investment; Depreciation; Search and seizure; Tangible material; Corroborative evidences
• Section: 143(3); 153A; 10B; 201; 44AB; 13; 132; 15

Judgement Text

PAGE 1 OF 14 , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE , SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ IT (SS) A NO . 120/AHD/2016 / ASSTT. YEAR : 2008 - 2009 D.C.I.T., CIRCLE - 1(2), BARODA. VS . M/S KAIZEN S WITCHGEAR PRODUCTS, 866/1 GIDC INDUSTRIAL ESTATE, MAKARPURA, BARODA - 390010. PAN: AABFK8158J (APPLICANT) ( RESPON D ENT ) REVENUE BY : SHRI O.P. SHARMA, C.I.T.D .R ASSESSEE BY : MS URVASHI SHODHAN , A R / DATE OF HEARING : 27 / 11 / 201 9 / DATE OF PRONOUNCEMENT: 23 /01 /2 020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 12 , AHMEDABAD [ LD. CIT (A) IN SHORT] , DATED 20 / 11 / 2015 ARI SING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 30 / 12 / 201 1 RELEVANT TO ASSESSMENT YEAR (A . Y) 2008 - 09 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT9A) ERRED IN BY UNANIMOUSLY ALLOWING DEDUCTION CLAIMED BY THE ASSESSEE U/S.10B WITHOUT IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 2 OF 14 APPRECIATING FACTS AND EVIDENCES PUT BY ASSESSING OFFICER ON RECORD DURING THE ASSESSMENT PROCEED INGS AND MERIT OF THE CASE. 2 THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY . 2. THE SOLE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS THAT LEARNED CIT (A) HAS ERRED IN ALLOWING THE DEDUCTION TO THE ASSES SEE UNDER SECTION 10B OF THE ACT WITHOUT APPRECIATING EVIDENCES AVAILABLE ON RECORD. 3. THE FACTS AS CULLED OUT FROM THE ORDER OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF MANUFACTURING EPOXY CAST INSULATORS, BUSHING, EPOXY MOL DED COMPONENTS ETC. THE ASSESSEE HAS ITS MANUFACTURING UNIT AT 866/1 GIDC, MAKARPURA, VADODARA, GUJARAT. THE ASSESSEE IS A 100% EXPORT ORIENTED UNIT APPROVED BY THE DEVELOPMENT COMMISSIONER, KANDLA SPECIAL ECONOMIC ZONE, GANDH IDHAM, MINISTRY OF COMMERCE & INDUSTRY VIDE LETTER NO. KASEZ/100% EOU/II/968/2000 - 01/211 DATED 31 ST MARCH, 2001 WHICH WAS EXTENDED TO 20 AUGUST 2011. THE ASSESSEE HAS ITS SISTER CONCERNS AS DETAILED UNDER: I. ELECTRICAL CONTROLS AND SYSTEMS (ECS) II. BHARTI ELEC TRICAL III. PRESS METAL PRODUCTS. 3.1 THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT UNDER SECTION 132 OF THE ACT IN THE BARODA BUSHING AND INSULATOR GROUP DATED 10 SEPTEMBER 2009. THE ASSESSEE WAS ALSO COVERED UNDER SUCH SEARCH AND SEIZURE OPERATION. DURING THE COURSE OF SEARCH, THE STATEMENT OF SHRI KIRIT DALSUKHBHAI PATEL, PARTNER OF THE FIRM WAS RECORDED UNDER SECTION 132(4) OF THE ACT. THE PARTNER OF THE FIRM AGREED THAT THE DEDUCTION UNDER 10B HAS BEEN WRONGLY CLAIMED WITH RESPECT TO MANUFACTURING ACTIVITY OF THE PRODUCTS NAMELY CURRENT TRANSFORMERS (CT) AND POTENTIAL TRANSFORMERS (PT). 3.2 ACCORDINGLY THE ASSESSEE AGREED TO MAKE A DISCLOSURE OF RS. 6 CRORES SUBJECT TO THE VERIFICATION OF THE AGGREGATE DEDUCTION CLAIMED IN THE ASSESSMENT IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 3 OF 14 YEARS BE GINNING FROM 2004 - 05 TO 2010 - 11. HOWEVER, THE ASSESSEE DID NOT OFFER THE DEDUCTION CLAIMED WITH RESPECT TO PRODUCT CURRENT TRANSFORMERS (CT) AND POTENTIAL TRANSFORMER BY IT UNDER SECTION 10B OF THE ACT TO TAX IN THE INCOME TAX RETURN FILED UNDER SECTION 15 3A OF THE ACT. THE ASSESSEE IN THIS REGARD SUBMITTED AS UNDER: I. IT HAS BEEN CARRYING OUT MANUFACTURING ACTIVITY WITH RESPECT TO ITS PRODUCTS NAMELY CT/PT. THE ASSESSEE ACCORDINGLY FILED THE MANUFACTURING PROCESS FLOWCHART WHICH IS RECORDED ON PAGE 6 AND 7 OF THE AO ORDER. II. THE PRODUCTS, CT/PT, ARE OF TWO TYPES NAMELY LOW VOLTAGE CT/PT AND MEDIUM VOLTAGE CT/PT. THE MANUFACTURING ACTIVITY FOR THE MEDIUM VOLTAGE CT/PT WAS CARRIED OUT WITHIN THE FACTORY PREMISES. IT STARTED MANUFACTURING AND EXPORTING OF LOW VOLTAGE CT/PT 1 ST TIME FROM THE PREVIOUS YEAR 2004 - 05 CORRESPONDING TO THE ASSESSMENT YEAR 2005 - 06 AND 90% OF MANUFACTURING ACTIVITY WAS CARRIED OUT IN - HOUSE. III. FROM THE ASSESSMENT YEAR 2006 - 07, THE CT ASSEMBLIES WERE PURCHASED FROM THE ASSOCIATED CONCERN N AMELY BHARTI ELECTRICAL. HOWEVER, THE OTHER MANUFACTURING PROCESSES SUCH AS VERIFICATION AND TURNS COMPENSATION, TERMINAL FIXING, TERMINAL MARKETING, TAPE - INSULATION, LABEL FIXING, FINAL TESTING, QUALITY CONTROL APPROVAL AND SEA WORTHY PACKING ETC. IS CARR IED OUT IN HOUSE. IV. IT IS CARRYING OUT THE CORE WINDING ACTIVITY FOR CT MANUALLY WITHOUT USING ANY MACHINES WHEREAS IT IS CARRYING OUT COIL WINDING ACTIVITY FOR PT ON THE MACHINES WHICH ARE AVAILABLE WITH IT. V. IT HAS CLAIMED DEPRECIATION ON SUCH PLANT AND MACHINERIES WHICH WAS NOT DISPUTED BY THE REVENUE. IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 4 OF 14 VI. THE STATEMENT OF THE PARTNER, SHRI KIRIT DALSUKHBHAI PATEL, OF THE FIRM RECORDED UNDER SECTION 132(4) WAS RETRACTED AND AN AFFIDAVIT DATED 7 TH DECEMBER 2011 WAS FILED EXPLAINING THE ELIGIBILITY FOR THE DEDUCTION UNDER SECTION 10B OF THE ACT. VII. THERE WAS A SPECIFIC/IDENTIFIED PLACE TO CARRY OUT THE WINDING, TESTING AND RESIN CASTING ACTIVITIES ON SUCH INSTRUMENT TRANSFORMERS. THE INCOME TAX OFFICER DURING SEARCH HAS NOT TAKEN THE VIDEOGRAPHY OF THE ENTIRE FACTORY. VIII. THERE WAS A DIRECT SUPERVISION OF THE TECHNICAL QUALIFIED STAFF OF THE ASSESSEE ON THE MANUFACTURING ACTIVITIES WHICH ARE CARRIED OUT AT ITS COST. IX. THERE WAS FREQUENT INSPECTION AND VERIFICATION CARRIED OUT BY THE CUSTOM AND CENTRAL EXERCISE AUT HORITIES WITHOUT POINTING OUT ANY ADVERSE REMARKS. X. THERE WAS A COMMON ENTRANCE OF THE ASSESSEE AND ECS BUT THERE WERE SEPARATE GATES FOR ENTERING INTO THE FACTORY. AS SUCH THERE WAS NO RELATION BETWEEN THEM WITH REGARD TO THE MANUFACTURING OPERATIONS CAR RIED OUT BY THEM. XI. THERE IS NO NEED TO CARRY OUT THE MANUFACTURING ACTIVITY ON THE PRODUCT FROM THE BEGINNING TO THE END IN ITS PREMISES. THEREFORE, ANY PROCESS OUTSOURCED TO A THIRD PARTY DOES NOT RESTRICT THE DEDUCTION UNDER SECTION 10B OF THE ACT. 3.3 THE ASSESSEE IN SUPPORT OF ITS CLAIM AS STATED ABOVE ALSO FILED AN AFFIDAVIT DATED 7 TH OF DECEMBER 2011 WHICH IS RECORDED ON PAGES 16 TO 18 OF THE AO ORDER. IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 5 OF 14 3.4 HOWEVER, THE AO WAS NOT SATISFIED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT I. THE ONUS LIES ON THE ASSESSEE TO SUBSTANTIATE ITS CLAIM BASED ON DOCUMENTARY EVIDENCE THAT IT IS CARRYING OUT THE MANUFACTURING ACTIVITY ON ITS PRODUCTS NAMELY CT/PT. II. THERE WERE CERTAIN IRREGULARITIES IN THE PROCESS OF PRODUCTION OF CT/PT AS OBSERVED DURING THE SEARCH PROCEEDINGS WHICH WERE ALSO ADMITTED BY THE EMPLOYEE OF BHARTI ELECTRICALS AND THE PARTNER OF THE ASSESSEE. III. THERE WERE NOT SUFFICIENT MACHINERIES/FACILITIES FOR THE PRODUCTION OF CT/PT IN THE FACTORY PREMISES OF THE ASSESSEE. IV. THE ASSESSEE CL AIMED TO HAVE OUTSOURCED PART OF THE MANUFACTURING PROCESS TO ITS SISTER CONCERNS BUT ON PERUSAL OF THE FINANCIAL STATEMENTS, IT WAS OBSERVED THAT THERE WERE NO SUCH PAYMENT (JOB CHARGES) MADE TO THEM BY THE ASSESSEE. ACCORDINGLY, THE ASSESSEE HAS SHOWN A HIGHER AMOUNT OF PROFIT IN RESPECT OF ITS 100% EOU WHEREAS THE SISTER CONCERN HAS SUPPRESSED ITS PROFIT BY NOT SHOWING INCOME IN THE FORM OF JOB CHARGES. V. THERE WAS ALSO A SURVEY OPERATION CONDUCTED AT THE BUSINESS PREMISES OF THE SISTER CONCERN OF THE A SSESSEE NAMELY BHARTI ELECTRICALS AT PLOT NO. 80/49, GIDC, WAGHODI, VADODARA WHEREIN IT WAS ADMITTED BY THE EMPLOYEE OF BHARATI ELECTRICALS NAMELY SHRI KETAN V. PATEL THAT THE ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING ACTIVITY OF CT/PT. 3.5 IN VIEW OF THE ABOVE, THE AO DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 10A OF THE ACT BY OBSERVING AS UNDER: 5.9 HENCE, EVEN IF THE CONTENTION OF THE ASSESSEE THAT IT HAS THE FACILITY TO PRODUCE CT AND PT AT ITS OWN PREMISES IS ACCEPTED FOR THE SAKE OF DISCUSSION, IT IS VERY MUCH OBVIOUS IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 6 OF 14 THAT THE ASSESSEE WAS USING THE FACILITY OF ITS SISTER CONCERN FOR PRODUCTION OF THESE ITEMS AND HENCE IT WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S. 10B IN RESPECT OF THOSE ITEMS. 5.10 FURTHER, THE CLAIM OF THE ASSESSEE, THAT ONLY LOW VOLTAGE CT/PT WAS OUTSOURCED TO ITS SISTER CONCERN IS NOTHING BUT A DESPARATE EFFORT TO JUSTIFY AT LEAST PART OF ITS CLAIM SO AS TO MAXIMIZE ITS CLAIM OF DEDUCTION. IT IS PERTINENT TO NOTE THAT NEITHER SHRI KIRIT D. PATEL, PARTN ER OF THE ASSESSEE FIRM, NOR SHRI KETAN V. PATEL PRODUCTION - INCHARGE OF BHARTI ELECTRICALS IN THEIR RESPECTIVE STATEMENTS, HAD MADE ANY REFERENCE TO SUCH LOW VOLTAGE OR MEDIUM VOLTAGE CT AND PT. BOTH OF THEM HAD MADE CATEGORICAL STATEMENTS IN RESPECT OF PR ODUCTION OF CT AND PT WITHOUT MAKING ANY SUCH DISTINCTION ABOUT LOW VOLTAGE OR MEDIUM VOLTAGE CT AND PT. HENCE, THIS CLAIM OF THE ASSESSEE IS NOTHING BUT AN AFTERTHOUGHT TO MAXIMIZE ITS GAIN BY WAY OF CLAIMING DEDUCTION FOR WHICH IT IS NOT ELIGIBLE OTHERWI SE. THE CLAIM OF THE ASSESSEE ON THIS ACCOUNT IS THEREFORE REJECTED. 5.11 THE CLAIM OF THE ASSESSEE THAT IN THE PREVIOUS ASSESSMENT ORDERS PASSED U/S 143(3), THE ASSESSEE WAS ALLOWED SUCH DEDUCTION DOES NOT IN ANY MANNER JUSTIFY IT'S CONTENTION FOR THE DOCTRINE OF RES - JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS. BRITISH PAINTS INDIA LTD. (1991) 188 ITR 44(SC) AND IN THE CASE OF UCO BANK (1993) 200 ITR 68 (CAL.) WHEREIN IT WAS HELD THAT IT IS NOT ONLY THE RIGHT BUT THE DUTY OF THE ASSESSING OFFICER TO CONSIDER WHETHER OR NOT THE BOOKS DISCLOSE - THE TRUE STATE OF ACCOUNTS AND THE CORRECT INCOME CAN BE DEDUCED THERE FROM. IT IS INCORRECT TO SAY THAT THE OFFICER IS BOUND TO ACCEPT .YSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE, THE CORRECTNESS HAD NOT BEEN QUESTIONE D IN THE PAST. 5.12 SO FAR AS THE JUDICIAL DECISIONS CITED BY THE ASSESSEE IS CONCERNED, IT IS PERTINENT TO MENTION 'HERE THAT, THESE DECISIONS ARE CLEARLY DISTINGUISHABLE TO THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE'S CASE. THE HYDERABAD TRIBUNAL HAS H ELD IN THE CASE OF SYNERGIES CASTING LTD, V, DC/7' (ITA NO. 864 & 1364/HYD/2010) THAT THE MANUFACTURING ACTIVITY HAS TO BE CARRIED ON BY THE TAXPAYER ITSELF BY USING ITS OWN PLANT AND MACHINERY. IN THE CASE OF SADHU SINGH GURDIP SINGH VS ACIT(2005) 97 TTJ( ASR.) AMRITSAR BENCH OF THE HON'BEL TRIBUNAL HAS HELD THAT WHERE THE ASSESSEE HAS FAILED TO ESTABLISH THE DIRECT NEXUS BETWEEN THE INCOME DISCLOSED BY IT AS UNEXPLAINED INVESTMENT IN PROPERTY AND THE INDUSTRIAL UNDERTAKINGS, WHICH WERE ELIGIBLE FOR RELIEF U/S 80 - IA, THE DEDUCTION CLAIMED WAS NOT ALLOWABLE. THE UNDERLYING PRINCIPLE IS THAT UNTIL AND UNLESS ALL THE CONDITIONS FOR CLAIMING DEDUCTION IS NOT SATISFIED BEYOND ANY DOUBT OR AMBIGUITY, THE RELIEF IN THE FORM OF DEDUCTION AND EXEMPTION CANNOT BE ALLO WED, SINCE EXEMPTION AND DEDUCTION PROVISIONS ARE NOT GENERAL IN NATURE AND HAVE TO BE VIEWED IN CONSTRAINED MANNER. THEY CAN NOT BE TAKEN FOR GRANTED BY AN ASSESSEE, SINCE THEY HAVE BEEN INTRODUCED FOR A SPECIFIC CAUSE AND HENCE, THE SAME CANNOT BE ALLOWE D IN THE CASES WHERE THERE ARE EVIDENCES ON RECORD AND ADMISSION OF THE ASSEESSEE TO PROVE THAT THERE HAS BEEN AN INTENTIONAL AND DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO INFLATE IT'S TURNOVER BY RAISING INVOICE FOR THE PRODUCTS WHICH WERE NOT MAN UFACTURED IN THEIR BUSINESS PREMISES AND WITH ASSISTANCE OF FACILITIES AVAILABLE THERE IN. 5.13. ON A NUMBER OF OCCASIONS THE HON'BLE COURTS HAVE HELD THAT THE CONCESSIONAL PROVISIONS SHOULD BE INTERPRETED LIBERALLY. BUT THOSE ARE MOSTLY IN RESPECT OF TEC HNICAL ELIGIBILITY OF THE UNDERTAKINGS FOR CLAIMING DEDUCTION AND EXEMPTION. SUCH VIEW, HOWEVER, CAN NOT BE TAKEN IN A CASE WHERE THE ASSESSEE, BY IT'S OWN ADMISSION, WAS FOUND TO BE INDULGING INTO AN ACT TO CLAIM SALES IN RESPECT OF PRODUCTS NOT MANUFACTU RED AT IT'S OWN FACILITY BUT AT THE FACILITIES OF SISTER CONCERNS WHICH ARE NOT ELIGIBLE FOR CLAIMING SUCH DEDUCTIONS. THIS IS NOTHING BUT AN UNHOLY ARRANGEMENT BETWEEN DIFFERENT CONCERNS OF A GROUP FOR DIVERSION OF PROFIT WITH A MOTIVE TO CLAIM UNDUE BENE FIT OF DEDUCTION L,E CASE OF ELIGIBLE CONCERN IN RESPECT OF PRODUCTS NOT. MANUFACTURED BY IT. IN ARD,, IT WOULD BE MOST RELEVANT TO REFER TO THE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF C. DHANAPALAN VS CIT(2001) 252 ITR 513(KER). THE PRINCIPAL UNDERLYING THE DECISION IS THAT TAX IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 7 OF 14 SPECIFICALLY IMPOSED HAS TO BE MET AND ANY EXEMPTION BEING AN EXCEPTION CAN NOT BE CLAIMED ON THE BASIS OF A DOUBT OR AMBIGUITY, SINCE THE LIABILITY IMPOSED BY A PROVISION IN A TAXING STATUTE IS THE RULE AND EXEMPTION A ND EXCEPTION. THE HON'BLE HIGH COURT IN THIS CASE ALSO REFERRED TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF INTERNATIONAL COTTON CORPORATION(P) LTD, VS CTO(1975) 35 STC 1, WHILE REFERRING TO A PROPOSITION THAT CONCESSIONAL PROVISIONS ARE TO BE INTERPRETED RIGIDLY, SINCE CONCESSION IS NOT A MATTER OF RIGHT. 5.14. IN VIEW OF ABOVE DISCUSSION IT IS EVIDENT THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S. 10B TO THE EXTENT IT PERTAINS TO SALE OF CT AND PT. IN ORDER TO ASCERTAIN THE CLA IM OF DEDUCTION OF THE ASSESSEE TO THE EXTENT IT PERTAINS TO SALES OF CT AND PT, THE TURNOVER OF CT AND PT WAS OBTAINED FROM THE ASSESSEE AND THE SAME WAS VERIFIED FROM THE BOOKS OF THE ASSESSEE FIRM AND THE PROPORTIONATE CLAIM OF THE DEDUCTION U/S. 10B PE RTAINING TO SALES OF CT/PT NOT ALLOWABLE TO THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LD. CIT - A. 4. THE ASSESSEE BEFORE LEARNED CIT SUBMITTED AS UNDER: I. THE AO IN HIS ORDER HEAVILY RELIED UPON STATEMENT OF PARTNER OF THE ASSESSEE FIRM RECORDED U/S 132(4) OF THE ACT AND EMPLOYEE OF BHARATI ELECTRICALS. II. HOWEVER, SUCH STATEMENT S W ERE GIVEN IN MISTAKEN BELIEF BY THE PARTNER AND AS PER UNDERSTANDING DEMONSTRATED BY INVESTIGATING AUTHORITY WHICH WAS ALSO RETRACTED BY PARTNER BY FILING AFFID AVIT. FURTHER IT IS SUBMITTED THAT THE MERE ADMISSION CANNOT DEBAR THE ASSESSEE FROM ITS LEGITIMATE CLAIM OF DEDUCTION PROVIDED UNDER THE ACT. III. THE STATEMENT OF SHRI KETAN V PATEL, THE EMPLOYEE OF BHARTI ELECTRICAL, TAKEN BY THE AO WAS IN REFERENCE TO AUGU ST/SEPTEMBER 2009 THAT FALLS UNDER THE A.Y. 2010 - 11 BUT IT DID NOT CLAIM ANY EXEMPTION IN THAT YEAR I.E. AY 2010 - 11. IV. THE AO DID NOT MAKE ANY EXAMINATION OR VERIFICATION WITH RESPECT TO THE DOCUMENTARY EVIDENCES SUCH AS PURCHASE RECORD OF COMPONENT, JOB WORK DETAILS, FINAL PROCESSING DETAILS AND EXPORT DETAIL OF THE PRODUCT FURNISHED BEFORE HIM. IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 8 OF 14 V. THE ALLEGATION OF THE AO IS THAT THE APPELLANT DID NOT HAVE SUFFICIENT CAPACITY OR MACHINERY TO PRODUCE THE PRODUCT CT/PT IS BASED ON INCOMPLETE VIDEOGRAPHY. AS SUCH THIS FACT WAS BROUGHT TO THE NOTICE OF THE AO BUT THE SAME WAS BRUSHED ASIDE BY AO WITHOUT ENQUIRING THE SAME. FURTHER IT WAS ALSO REQUESTED TO MAKE TOUR TO THE FACTORY PREMISES FOR BETTER UNDERSTANDING OF MANUFACTURING PROCESS AND PLANT AND MACHINERY. VI. THE ALLEG ATION OF THE AO IS THAT THE JOB WORK CHARGES WERE NOT PAID TO SISTER CONCERN IS BASELESS. DETAILS REG ARDING THE SAME WERE PRODUCED BEFORE AO AND INVESTIGATING OFFICER ALONG WITH DOCUMENTARY EVIDENCES SUCH AS JOB WORK LEDGER COPY, LEDGER COPY OF SISTER CONCERN AND MATERIAL MOVEMENT FORM 57(F) AS REQUIRED UNDER CENTRAL EXCISE ACT FOR THE PURPOSE OF JOB WORK . FURTHER THE SAME AO DURING THE ASSESSMENT PROCEEDING OF SUCH SISTER CONCERN HAS ACCEPTED THE BILL ISSUED TO THE APPELLANT IN RESPECT OF JOB WORK. VII. THE AO MISINTERPRETED THE PROVISION OF SECTION 10B OF THE ACT THAT THE OUTSOURCING OF WORK WILL AMOUNT TO DISQUALIFICATION OF DEDUCTION U/S 10B OF THE ACT. AS SUCH, THERE IS NO PROHIBITION ON OUTSOURCING THE WORK IN RELATION TO THE MANUFACTURING ACTIVITY . VIII. FURTHER ASSESSEE ALSO SUBMITTED DETAILED FLOW CHART OF MANUFACTURING PROCESS OF PRODUCT CT/PT TAKEN BY IT. ACCORDINGLY ASSESSEE PRAYED FOR DELETION ADDITION MADE BY THE AO 5. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND FINDINGS OF THE AO DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: REGARDIN G THE VIDEOGRAPHY IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 9 OF 14 I. THERE CANNOT BE TAKEN ANY ADVERSE VIEW AGAINST THE ASSESSEE BASED ON VIDEO FOOTAGE WITHOUT BRINGING ANY CORROBORATIVE OR MATERIAL DOCUMENTARY EVIDENCE. II. THE ASSESSEE BEFORE AO HAS CONTROVERTED THE VIDEO FOOTAGE AND SUBMITTED THAT VIDEO RECORDED BY THE INV ESTIGATING AUTHORITY ONLY REPRESENTS A PART OF FACTORY PREMISES. THIS FACT HAS NOT BEEN CONTRADICTED BY THE AO. III. THE AO DREW ADVERSE VIEW WITHOUT CONSIDERING OR MAKING ANY VERIFICATION OF EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE HIM. REGARDING THE STATEMENT OF SHRI KETAN V. PATEL EMPLOYEE OF BHARTI ELECTRICALS I. THE STATEMENT FURNISHED BY SHRI KETAN V. PATEL CANNOT BE THE SOLE BASIS FOR DRAWING THE INFERENCE AGAINST THE ASSESSEE THAT IT IS NOT ENGAGED IN THE MANUFACTURING ACTIVITY WITH RESPECT TO CT/ PT PRODUCTS UNTIL AND UNLESS SUCH STATEMENT IS BASED ON SOME CORROBORATIVE EVIDENCES. II. SIMILARLY, THE ASSESSEE HAS FURNISHED DOCUMENTARY EVIDENCES SUCH AS RG - 1, MATERIAL MOVEMENT FORM 57(F), BILLS OF THE JOB WORKS AND OTHER EXCISE - RELATED DOCUMENTS AGAINST THE STATEMENT OF SHRI KETAN V. PATEL BUT THERE IS NO FINDING OF THE AO ON SUCH DETAILS FURNISHED BY THE ASSESSEE. REGARDING THE STATEMENT OF SHRI KIRIT DALSUKHBHAI PATEL PARTNER OF THE FIRM THE LEARNED CIT (A) INTER - ALIA OBSERVED THAT THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT, BY THE PARTNER OF THE ASSESSEE FIRM WAS NOT BASED ON ANY TANGIBLE MATERIALS. AS SUCH THE STATEMENTS RECORDED IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 10 OF 14 UNDER SECTION 132(4) OF THE ACT, WAS CONTAINING GENERAL QUESTIONS AND ANSWERS WHICH WAS SU BSEQUENTLY RETRACTED V IDE LETTER DATED 5 - 12 - 2009. ACCORDINGLY, THE LEARNED CIT (A) HELD THAT SUCH STATEMENT CANNOT BE THE BASIS FOR ARRIVING AT THE CONCLUSION THAT THE ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING ACTIVITY WITH RESPECT TO PRODUCTS CT/PT. 5.1 IN VIEW OF THE ABOVE, THE LEARNED CIT (A) DELETED THE ADDITION MADE BY THE AO BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT WITH RESPECT TO THE PRODUCTS NAMELY CT/PT MANUFACTURED BY IT BY OBSERVING AS UNDER: 7.6 AS CAN BE CLEARLY SEEN BOTH FROM THE SUBMISSIONS BEFORE THE AO AS REPRODUCED IN ASSESSMENT ORDER AND THE DESCRIPTION OF THE DETAILS AS ABOVE AND THE PERUSAL OF THE RELEVANT PAPERS, THAT THE EVIDENCES FILED CONTAIN ALL POSITIVE AND RELEVANT EVIDENCES TO ESTABLISH THAT THE APPELLANT'S MANUFACTURING FACILITY FOR LOW AND MEDIUM VOLTAGE CT AND PT HAVE BEEN CERTIFIED BY INDEPENDENT AUTHORITIES LIKE KFTZ TWICE, ISO CERTIFICATION, CERTIFICATE FROM M/S SHANTI CONSULTING ENGINEERS, THE KFTZ HAS RENEWED THE EOU CE RTIFICATE ON L/8/2006,THERE ARE INVOICES AND VADODARA MUNICIPAL CORPORATION OCTROI RECEIPTS NUMBERS ON SUCH INVOICES FOR JOB - WORK/PURCHASE/MOVEMENT OF 'CORE' FROM BHARATI AND PRESS - METAL TO APPELLANT, OF CORE PURCHASE AND RELATED JOB - WORK FROM BHARATI, COP IES OF RELEVANT ACCOUNTS OF ASSOCIATES AND RELATED INVOICES, TAX - AUDIT REPORTS U/S 44AB OF BOTH APPELLANT AND BHARATI, PAST ASSESSMENTS U/S 143(3) OF APPELLANT AND BHARATI, AND EVEN THE ASSESSMENT UNDER S. 153A MADE BY THE SAME AO ON BHARATI AND PRESS - META L WITHOUT ANY CORRESPONDING ADVERSE VIEW THEREIN R. NOTHING HAS EITHER BEEN COMMENTED UPON BY OR COULD IMPRESS THE AO ENOUGH TO LOOK BEYOND WHAT AUTHORIZED OFFICER QUESTIONED THE APPELLANT AND WHAT HE ANSWERED. NOT ONLY HAS THE AO CARRIED OUT NO ENQUIRY OR BROUGHT NO MATERIAL TO ESTABLISH THE DUBIOUS NATURE, IF AT ALL, OF THESE EVIDENCES FILED BY THE APPELLANT, THE AO HAS NOT AT ALL DEALT WITH THE EVIDENCES AND SUBMISSIONS MADE ON THE BASIS THEREOF. ALSO, THE APPELLANT SUBMITTED BEFORE THE AO THAT EACH ELI GIBILITY CONDITION WAS FULLY SATISFIED BY THE APPELLANT AND CLEARLY DESCRIBED HOW. AS AGAINST THESE EVIDENCES, AS MENTIONED EARLIER, THE AO HAS SIMPLY REITERATED THE OPINIONS OF THE AUTHORIZED OFFICER IN COMING TO HIS DECISION OF DENIAL OF EXEMPTION U/S 10 B. THE STATEMENT OF KETAN PATEL OTHERWISE ALSO HAS BEEN HELD BY ME TO BE LACKING CREDIBILITY IN VIEW OF ABSENCE OF CORROBORATIVE MATERIAL. IN ANY CASE, AO COULD HAVE DRAWN NO SUPPORT FROM THAT STATEMENT WITHOUT ALLOWING AN OPPORTUNITY TO CROSS - EXAMINE OR W ITHOUT DEALING WITH THE SUBMISSIONS FILED IN THIS BEHALF. SIMILARLY, THE 'ADMISSION' IN STATEMENT U/S 132(4) OF KIRIT PATEL IS ALSO HELD BY ME TO BE BASED ON MIS - CANVASSED POSITION OF LAW AND WRONG DESCRIPTION OF EVIDENCES AND FACTS BY THE AUTHORIZED OFFIC ER AND HENCE OF LITTLE EVIDENTIARY VALUE. MOREOVER, THE SAME IS ALREADY HELD BY ME TO HAVE BEEN BASED ON INDUCED MISTAKE OF LAW AND THE SAME ALSO, VIDE COMMUNICATION TO DDIT DATEDS/12/2009 AND FILING OF RETURNS U/S 153A, STOOD SUFFICIENTLY AND EFFECTIVELY 'RETRACTED'. VIDEOGRAPHY, AS DISCUSSED, IS UNABLE EVEN TO BRING OUT,, MUCH LESS ESTABLISH, ABSENCE OF MACHINERY NECESSARY FOR MANUFACTURING EVEN THE 'INTEGRAL STAGE', THOUGH SUCH ABSENCE WOULD ALSO NOT, IPSO FACTO DISENTITLE THE APPELLANT FROM CLAIM OF EXE MPTION U/S 10B AS THE APPELLANT CAN ALWAYS OUTSOURCE A PART OF THE MANUFACTURING PROCESS, HOW SO EVER VITAL, SO LONG AS THERE IS ENOUGH AND CONCLUSIVE VALUE ADDITION BY THE APPELLANT AND OTHER CONDITIONS FOR 10B ARE SATISFIED.IN THESE CUMULATIVE CIRCUMSTAN CES, IT THEREFORE NEEDS TO BE HELD THAT THE LD. AO'S FINDING THAT THE APPELLANT IS NOT ELIGIBLE FOR EXEMPTION U/S 10B IS BASED ON NON - CREDIBLE AND WEAK ORAL EVIDENCES AND ON AN 'ADMISSION' FOUNDED ON MISTAKE OF LAW. THE DECISION BY THE AO IS ALSO ARRIVED A T BY COMPLETELY BRUSHING ASIDE AND IGNORING CREDIBLE, STRONG AND CONCLUSIVE DOCUMENTARY EVIDENCES ESTABLISHING THE ELIGIBILITY OF THE APPELLANT FOR CLAIM.THUS, THE DENIAL OF EXEMPTION FOR RELEVANT PERIOD IS WITHOUT SUPPORTING EVIDENCES ON ONE HAND AND AGAI NST THE EVIDENCES ON RECORD ON THE OTHER. SUCH AN ACTION OF THE AO HAS NO MERIT IN LAW, AND THEREFORE IT IS HELD THAT ON OVERALL APPRECIATION OF IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 11 OF 14 EVIDENCES, THE APPELLANT HAS DURING THE RELEVANT PERIOD FULFILLED THE ELIGIBILITY CONDITIONS OF S. 10B AND THER EFORE IS ENTITLED FOR EXEMPTION U/S 10B. 8. DURING THE COURSE OF HEARING, THE LD. AR HAD ALSO CONTENDED THAT EVEN IF, FOR THE SAKE OF ARGUMENT IT IS ACCEPTED THAT THE ADVERSE STATEMENT OF KETAN PATEL IS TRUTH, THE STATEMENT CAN, AT THE MOST, BE THOUGHT TO BE RELATING TO THE AFFAIRS OF THE APPELLANT ONLY FOR THE YEAR OF SEARCH I.E. FY 09 - 10 ( FOR THE ASSESSMENT YEAR 10 - 11), AND THERE NOTHING ON RECORD (APART FROM THE APPELLANT'S PARTNER'S STATEMENT U/S 132(4) WHERE UNDER THE PARTNER UNDER CLEAR LY AND WRONGLY INDUCED MISTAKEN BELIEF ABOUT CONDITIONS OF ELIGIBILITY FOR EXEMPTION U/S 10B, WITHDREW THE CLAIM OF EXEMPTION) TO LINK ADVERSE STATEMENT TO AFFAIRS OF THE APPELLANT DURING PERIOD EARLIER THAN THAT. ON THIS COUNT ALSO, THE DENIAL OF EXEMPTIO N ALREADY GRANTED EARLIER U/S 143(3) FOR THE YEARS UNDER REFERENCE, CANNOT BE SUSTAINED. I ALSO FIND A CONSIDERABLE FORCE IN THIS CONTENTION ALSO. THERE IS NO EXPRESS OR IMPLIED MENTION OF THE PERIOD UNDER REFERENCE (FY 02 - 03 TO 07 - 08) IN THE STATEMENT OF KETAN PATEL, AND EVEN BY WILDEST STRETCH OF IMAGINATION, IT IS IMPOSSIBLE TO HOLD AGAINST THE APPELLANT ON THE BASIS OF STATEMENT OF KETAN PATEL FOR THE PERIOD UNDER REFERENCE.I THEREFORE AGREE WITH THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT THAT THE STATEMENT RECORDED DURING FY 09 - 10 AND SCENARIO DESCRIBED THEREIN CANNOT, AUTOMATICALLY AND WITHOUT ANY CO - RELATING EVIDENCE, BE BROUGHT TO BEAR ON APPELLANT'S AFFAIRS DURING EARLIER PERIOD OF FYS 03 - 04 TO 07 - 08 RELATABLE TO AYS UNDER REFERENCE. EVEN IF AN ADVERSE VIEW WAS WARRANTED, THE ADVERSE VIEW WERE JUSTIFIED ONLY FOR PERIOD FY 09 - 10, AND THE ADVERSITY COULD NOT HAVE TRAVELLED BACK IN CLEAR ABSENCE OF ANY INCRIMINATING/ADVERSE MATERIAL FOR PAST PERIOD. THEREFORE, ON THAT COUNT ALSO THE ACTI ON OF THE AO NEEDS TO BE HELD UNSUSTAINABLE. BEING AGGRIEVED BY THE OR DER OF THE LEARNED CIT (A) THE R EVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DR BEFORE US SUBMITTED THAT THE ASSESSEE WAS NOT ENGAGED IN THE MANUFACTURING ACTIVITY WITH RESPECT TO CT/PT PRODUCTS. THE LD. DR FURTHER REITERATED THE CONTENTIONS BY PLACING HIS RELIANCE ON THE ORDER OF THE AO. 7. ON THE OTHER HAND THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 917 AND REITERATED THE SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT CASE RELATES W HETHER THE ASSESSEE IS ENGAGED IN THE MANUFACTURING ACTIVITY WITH RESPECT TO ITS PRODUCTS NAMELY CT/PT. AS PER THE AO, THE ASSESSEE WAS CARRYING OUT TRADING ACTIVITY WITH RESPECT TO ITS PRODUCTS NAMELY CT/PT AND THEREFORE HE HELD THAT THE ASSESSEE IS NOT E LIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE VIEW OF THE AO THAT THE ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING ACTIVITY WAS MAINLY BASED ON THE FOLLOWING REASONS: IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 12 OF 14 I. THE ASSESSEE WAS NOT IN POSSESSION OF SUFFICIENT MACHINERIES FOR THE MANUFACTURING OF CT/PT PRODUCTS AS EVIDENT FROM THE VIDEOGRAPHY RECORDED BY THE SEARCH TEAM. II. THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT OF THE PARTNER OF THE FIRM NAMELY SHRI KIRIT DALSUKHBHAI PATEL WHEREIN IT WAS ADMITTED THAT THERE WAS NOT COMPLETE MANUFACTURING ACTIVITY CARRIED OUT BY IT. III. THE STATEMENT RECORDED UNDER SECTION 133 (6) OF THE ACT OF SHRI KETAN V PATEL THE EMPLOYEE OF BHARTI ELECTRICALS WHEREIN IT WAS ADMITTED THAT THE ASSESSEE IS NOT CARRYI NG OUT THE MANUFACTURING ACTIVITY WITH RESPECT TO CT/PT PRODUCTS . IV. THERE WAS NO JOB WORK CHARGE PAID BY THE ASSESSEE TO M/S BHARTI E LECTRICAL. 8. 1 REGARDING THE USE OF THE MACHINERIES IN THE MANUFACTURING OF CT/PT PRODUCTS, WE NOTE THAT THE AO HAS NOT BROUGHT ANYTHING ON RECORD EVIDENCING THAT THE ASSESSEE WAS NOT IN POSSESSION OF THE REQUISITE MACHINERIES. THOUGH THE ASSESSEE DURING THE ASSESSMENT P ROCEEDINGS HAS CLAIMED THAT IT IS USING APG MACHINES AND VACUUM CASTING MACHINES FOR THE MANUFACTURE OF ITS ALLEGED PRODUCTS, BUT THE AO HAS NOT CONTROVERTED THE SUBMISSION OF THE ASSESSEE BASED ON ANY DOCUMENTARY EVIDENCE. WE ALSO NOTE THAT THE LIST OF SU CH MACHINERIES ARE APPEARING IN ITS FINANCIAL STATEMENT AS EVIDENT FROM THE SUBMISSION OF THE ASSESSEE PLACED ON PAGES 526 TO 529 OF THE PAPER BOOK. THE ASSESSEE HAS ALSO FILED THE CERTIFICATES OF INDEPENDENT QUALIFIED ENGINEERS WHICH ARE PLACED ON PAGES 8 09/810 OF THE PAPER BOOK IN SUPPORT OF HIS CONTENTION THAT IT IS ENGAGED IN THE MANUFACTURING OF THE ALLEGED PRODUCTS. BUT NO DEFECT OF WHATSOEVER WAS POINTED OUT BY THE AO. IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 13 OF 14 8.2 WE ALSO NOTE THAT THE STATEMENTS RECORDED DURING SEARCH AND SURVEY CANNOT BE THE BASIS OF THE ADDITION UNTIL AND UNLESS SUCH STATEMENTS ARE BASED ON CORROBORATIVE EVIDENCES. IN THIS REGARD WE FIND THAT CBDT HAS DISCOURAGED ITS OFFICERS TO MAKE THE ADDITION ON THE BASIS OF DISCLOSURE STATEMENT WHICH IS BASED WITHOUT ANY CORROBORATI VE EVIDENCE. THE RELEVANT EXTRACT OF CBDT INSTRUCTIONS ISSUED VIDE F. NO. 286/98/2013 - IT(INV.II) DATED 18 TH OF DECEMBER 2014 READS AS UNDER: - INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HAVE COME TO NOTICE OF THE CBDT THAT SOME ASSESSEES WERE COERCE D TO ADMIT UNDISCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTED BY THE DEPARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIONS ARE RETRACTED IN THE SUBSEQUENT PROCEEDINGS SINCE THE SAME ARE NOT BACKED BY CREDIBLE EVIDENCE. SUCH ACTIONS DEFEAT THE VERY PURPOS E OF SEARCH/SURVEY OPERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAINABLE MANNER LEAVE ALONE LEVY OF PENALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHOW THE DEPARTMENT AS A WHOLE AND OFFICERS CONCERNED IN POOR LIGHT. 2 . I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION TO THE INSTRUCTIONS/GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REFERRED ABOVE, THROUGH WHICH THE BOARDS HAS EMPHASIZED UPON THE NEED TO FOCUS ON GATHERING EVIDENCES DURING SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE. 3. IN VIEW OF THE ABOVE, WHILE REITERATING THE AFORESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANCE OF UNDUE INFLUENCE/COERCION IN THE RECORDING OF THE STATEMENT DURING SEARCH/SURVEY/OTHER PROCEEDING UNDER THE IT ACT, 1961 AND/OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY. 8.3 WE ALSO NOTE THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE DULY AUDITED WHICH WERE FILED DURING THE ASSESSMENT PROCEEDINGS AND NO DEFECT WHATSOEVER WAS POINTED OUT BY THE ASSESSING OFFICER IN SUCH BOOKS OF ACCOUNTS. ON ONE HAND THE ASSESSING OFFICER HAS ACCEPTED THE BOOKS OF ACCOUNT AND, ON THE OTHER HAND, H E IS MAKING THE ADDITION MERELY ON THE BASIS OF THE STATEMENT OBTAINED UNDER SECTION 132(2)/133A OF THE ACT WHICH WAS IMMEDIATELY RETRACTED AFTER THE DATE OF SURVEY. IN SUCH FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER SHOULD HAVE REJECTED THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT AS HE DISBELIEVED THE PURCHASE BILLS AND SALES BILLS WHICH WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS ON THE DATE OF SURVEY. BUT, THE ASSESSING OFFICER HAS NOT DONE SO; WHICH IMPLIES THAT THE ASSESS ING OFFICER HAS ACCEPTED THE BOOKS OF ACCOUNTS AND FINANCIAL STATEMENT OF THE ASSESSEE. IT (SS)A NO.120/AHD/2016 ASSTT. YEAR 2008 - 09 PAGE 14 OF 14 8.4 WE ALSO NOTE THAT THE ASSESSEE DURING THE YEAR HAS PAID THE JOB WORKER THE LABOUR CHARGES TO ITS ASSOCIATED CONCERN AS EVIDENT FROM THE COPIES OF THE LEDGERS WHIC H ARE PLACED ON PAGES 758 TO 773 OF THE PAPER BOOK. THEREFORE, THE FINDING OF THE AO THAT THERE WAS NO LABOUR CHARGE PAID BY THE ASSESSEE IS BASED ON WRONG ASSUMPTION OF FACTS. 8.5 WE ALSO NOTE THAT THERE WAS GOODS MOVEMENT REGISTER MAINTAINED BY THE ASS ESSEE FOR TRANSFERRING THE GOODS ON JOB WORK BASIS AS EVIDENT FROM THE DETAILS MAINTAINED UNDER EXCISE ACT, WHICH ARE PLACED ON PAGES 243 TO 308 OF THE PAPER BOOK. 8.6 IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACTS IN TOTALITY, WE NOTE THAT THE LEA RNED CIT (A) HAS GIVEN VERY EXHAUSTIVE FINDING ELABORATING THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURING ACTIVITY OF THE ALLEGED PRODUCTS. THEREFORE, WE ARE OF THE VIEW THAT NO INTERFERENCE IN THE ORDER OF THE LEARNED CIT (A) IS WARRANTED IN THE GIVEN FACTS AND CIRCUMSTANCES. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 23 /01 / 2020 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 23 / 01/2020 M ANISH