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TMI Blog2015 (6) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the manufacturing activity carried on by the assessee in the assessment years earlier to assessment year 2008-09 was by use of new plant and machinery. As regards the transfer of business premises, employees and the customers of FFIPL to the assessee, the CIT(A) observed that there was no prohibition in the use of the business premises of FFIPL by the assessee and also of the employees and customers of FFIPL and further that the transfer of employees and customers of the assessee was only a small percentage of the total employees and customers of the assessee respectively. Thus holding, the CIT(A) set aside the finding of the AO and allowed the deduction u/s 10B of the Act. - Decided in favour of assessee. - ITA No.1382/Bang/2012, ITA No.1516/Bang/2012 - - - Dated:- 17-4-2015 - Pramod Kumar, AM And P Madhavi Devi, JM,JJ. For the Appellant : Shri Nageshwar Rao, Adv. For the Respondent : Shri T S N Murthy, CIT(DR) ORDER Per: P Madhavi Devi: These cross-appeals by the assessee as well as the revenue are directed against the order of the CIT(A)-I, Bangalore, dated 24/8/2012 for the assessment year 2007-08. 2. Brief facts of the case are that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was only doing the job work for FFIPL during the initial financial year 2004-05 and therefore there was no question of claiming deduction u/s 10B of the Act and that the contention of the assessee that the eligibility of deduction u/s 10B has to be verified only initially, is only partially correct. The assessee has not claimed any deduction u/s 10B for the assessment years 2005-06 and for assessment year 2006-07 it was allowed without verification and the assessment year 2007-08 is the first time that the whole deduction claim is being verified. iii. The contention of the assessee that the old machinery from FFIPL was transferred to the assessee only in April, 2007 is not acceptable since the assessee had taken over the premises of FFIPL along with old plant and machinery available in it and they have installed the new machinery over a period of time and that the assessee had started its first unit at 26/A, II Phase, Peenya in November 2004 and the second unit at No.485/2, 4th Stage, Peena in March 2005 and then it took over the vacant units of FFIPL at 34/A, 20/A, II Phase, Peenya in May, June and September 2005 and the remaining units in April 2007 and the statements of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. As regards 'Info and tracking of delivery charges' the AO was of the opinion that the assessee has made payments to a non-resident company M/s.Sharp Eagle International Ltd., [SEIL] incorporated in Hongkong without deduction of tax at source and that the duties of the said nonresident have not been clearly spelt out in the agreement. The correspondence produced by the assessee are not between the assessee and the non-resident but are in the names of FFIPL and one Mr.Manfred who is also not a representative of a nonresident company SEIL. He observed that the assessee has not furnished any e-mail correspondence with regard to the goods purchased from Hongkong where M/s Sharp Eagle International Ltd. is based. That the e-mail correspondence furnished by the assessee in the course of assessment proceeding is nothing but a deliberate attempt on the part of the assessee to mislead or misdirect the authorities since such correspondence does not concern the dealings between the assessee and SEIL. Thus holding that the assessee has failed to prove the genuineness of the expenditure claimed and that the same is not allowable, he accordingly, disallowed it u/s 69C of the Act as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that set aside of the disallowance would only increase the profit and thereby enhance the eligible business income and accordingly deduction u/s 10B and therefore the decision on this issue would become academic. He, accordingly refrained from giving a decision on the allowability of the expenditure claimed by the assessee. 4. Against the relief given by the CIT(A), the Revenue is in appeal before us, while against the non-giving of the decision on the disallowance of the expenditure made by the AO, the assessee is in appeal before us. 5. In the assessee's appeal, the learned counsel for the assessee submitted that the expenditure incurred by the assessee was for the business of the assessee and that the assessee has produced all the relevant details before the AO in support of its contention. He submitted that the genuineness of the expenditure has not been doubted by the authorities below but the AO has made the disallowance solely on the ground that the connection between the assessee and the non-resident company has not been proved. According to him, the material filed by the assessee before the AO clearly prove that the assessee had availed all the services of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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