Income Tax Officer v Mark & Space Telesystems P Ltd,
Deduction u/s 80IC — Undertaking in certain special category states — Disallowance — Deletion of–Validity — Assessee filed its return declaring income after claiming deduction u/s 80IC — Case selected for scrutiny — AO observed that assessee had office in Delhi and assessee had claimed to have set up
manufacturing unit in Parwanoo in Himachal Pradesh, income from which was claimed to be exempt u/s 80IC — AO concluded that unit in Parwanoo was extension of Delhi unit and that assessee had diverted profit from Delhi unit to Parwanoo unit — AO disallowed claim for deduction — CIT(A) allowed deduction — Held, assessee had made its entire sales to five parties — AO issued notice u/s 133(6) to four parties, out of which only one party filed confirmation to whom small percent of total turnover was made — Ledger accounts filed by this party were different from that filed by assessee — Landlord of assessee filed confirmation — CIT(A) had stated that remaining parties had filed their confirmed copies of accounts with him — CIT(A) did not confront same to AO — Assessee submitted that its operations were not labour intensive and with help of computerized machinery assessee was able to make large turnover in four months — From schedule of fixed assets it was not explicable as to how machinery worth ₨ 65,813 could be considered sufficient enough to achieve a turnover of ₨ 1 crore — CIT(A) had ignored these important facts and decided in favour of assessee based on entries of sales made by assessee — Doubt of book entries was further corroborated by fact that out of turnover and purchases, large amount remained invested in debtors and unpaid to creditors till year end — Profiles of buyers and sellers of assessee needed to be investigated to ascertain as to whether these persons actually dealt in goods purchased and sold to assessee — Therefore, AO was directed to re-adjudicate case after conducting proper enquiries.
Deduction u/s 80IC — Undertaking in certain special category states — Disallowance — Deletion of–Validity — Assessee filed its return declaring income after claiming deduction u/s 80IC — Case selected for scrutiny — AO observed that assessee had office in Delhi and assessee had claimed to have set up
manufacturing unit in Parwanoo in Himachal Pradesh, income from which was claimed to be exempt u/s 80IC — AO concluded that unit in Parwanoo was extension of Delhi unit and that assessee had diverted profit from Delhi unit to Parwanoo unit — AO disallowed claim for deduction — CIT(A) allowed deduction — Held, assessee had made its entire sales to five parties — AO issued notice u/s 133(6) to four parties, out of which only one party filed confirmation to whom small percent of total turnover was made — Ledger accounts filed by this party were different from that filed by assessee — Landlord of assessee filed confirmation — CIT(A) had stated that remaining parties had filed their confirmed copies of accounts with him — CIT(A) did not confront same to AO — Assessee submitted that its operations were not labour intensive and with help of computerized machinery assessee was able to make large turnover in four months — From schedule of fixed assets it was not explicable as to how machinery worth ₨ 65,813 could be considered sufficient enough to achieve a turnover of ₨ 1 crore — CIT(A) had ignored these important facts and decided in favour of assessee based on entries of sales made by assessee — Doubt of book entries was further corroborated by fact that out of turnover and purchases, large amount remained invested in debtors and unpaid to creditors till year end — Profiles of buyers and sellers of assessee needed to be investigated to ascertain as to whether these persons actually dealt in goods purchased and sold to assessee — Therefore, AO was directed to re-adjudicate case after conducting proper enquiries.
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