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TMI Blog2014 (2) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings initiated being void ab initio and deserve to be quashed. Ground no. 3 reads as under: In law and in facts and circumstances of the appellant's case, the Id. CIT(A) has erred in confirming the assessment u/s. 143(3) r.w.s. sec. 147of the IT Act which is based on based on the same facts which the appellant had furnished during the original assessment, and the re-assessment made based on the same facts amounts to change of opinion. Ground no. 5 reads as under: In law and in the facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in not interfering on the ground relating to initiating v penalty proceedings u/s.271(l)(c) of IT. Act. At the time of hearing, the Ld. AR of the assessee submitted that he is not pressing the above cited grounds of appeal. Hence, they are dismissed for want of prosecution. 4. The only effective ground remaining in this appeal is ground no. 4 which reads as under: In law and in the facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in confirming the disallowance of deduction u/s.80IA on the profits derived from Trikampura Division. 5. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is formed within 10 minutes of manual process. This powder is then sieved manually by the labours. The sieved powder is packed manually in bags and is sealed manually. iii) The affidavits of the employees of Nirma Ltd clearly show that their job is mainly of checking the quality of the detergent. The formula of minimum ratio of raw material for making the acid slurry is well known to the labours of Nisarg Enterprise. The quality of soda ash, water, acid slurry and filler is also well known to the labours of Nisarg Enterprise while mixing these manually to manufacturer the detergent. iv) The main manufacturing process of making the detergent is entirely manual. The manual work involved in the manufacturing process is mixing, sieving, weighing, packing etc. v) The labours performing the above manual activities are in control of Nisarg Enterprises. vi) The mere presence of few employees of Nirma Ltd. to check the quality of detergent produced does not amount to control of Nirma Ltd. over Nisarg Enterprise. vii) One of the affidavits is filed by 'Maheshhhai Shakerlal Patel'. This person is 'Chemist' by qualification. A chemist can at best be a person who can tes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) At the time of first mixing make sure that there are no lumps and material is properly/ evenly mixed. (d) Also makes sure that material is properly sieved. (e) Verifies that if is properly weighed as per each pack size i.e. 1 Kg. or 500Gm. Bags. (f) It is also supervised that each bag is properly sealed otherwise there will be loss to the consumer when it reaches to ultimate consumer. (g) It is properly packed in outer bag which is HDPE bags each weighing 25 Kg. or 50 Kg. (h) Thereafter on random selection base, samples are taken and are analyzed for moisture content and content of Active Matter, which is important factor for detergency, which determines quantity. (i) It has also been stated that the workers are uneducated and therefore they have to supervise on above count to make sure about the quality. It has also been stated that in case the batch has not been properly done, supervisor lakes instruction from their higher-ups at NL i.e. senior management and accordingly corrective steps are taken. Above factual aspect has not been properly covered by which we feel should have been covered. (II) The statement is factually correct with further correction to an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivities, which is an undisputed fact. (IX) Before Ld. AO, the entire fact of the case has been explained including what has been affirmed by the employees whose affidavits have been filed before your Honour. The said evidences are well within the Rule 46(A) of IT Rules and we request your Honour to kindly admit the same in the interest of justice. More over your Honour has given all opportunity to Ld AO for rebuttal and verification, which further supports our prayer for admission of the said as additional evidence. (X) The Affidavits only substantiate the fact, which has already been brought on record by your Appellant during the Assessment proceeding for A.Y. 20001-02 as well in the current proceedings. It is urged in the interest of justice for ascertainment of proper fact so as to make correct law applicable thereto. (XI) Affidavits cannot he considered as self-serving documents and must be taken seriously as proper evidence. In light of our above comments, we request your Honour to kindly grant justice to us." 8. The Ld. CIT(A) held as under: "I have considered the above submissions of the appellant and perused the AO's assessment order. I am unable to agree wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court ruling in the case of CIT Vs. Northern India Iron and Steel Company Ltd. in 226 ITR 342 is squarely applicable to the facts of the present case. In that case also, the machinery was let out to the lessee. The Delhi High Court held that the assessee was not entitled to section 80-J (identical to Section 80-lA). (vii) In the case of CIT Vs. Sterling Foods in 237 ITR 589, the Supreme Court held that there must be, for the application of the words derived from, a direct nexus between the profits and gains. In the present case, the appellant has not proved the direct nexus. (viii) In the latest decision of the Allahabad High Court in the case of R & P Exports Vs. CIT reported in (2005) 279 ITR 536, the Allahabad High Court has held that job work workers cannot be counted to find out the minimum stipulated number of workers under section 80-1, Hence, the assessee was not entitled to deduction under section 80-1. This case squarely applied to the present case in appeal. (ix) The Rajasthan High Court ruling reported in 270 ITR 72 (Raj) in the case of Rajasthan Steel Rolling Mills is squarely applicable to the facts of the appellant's case. The Rajasthan High Court in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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