INCOME TAX OFFICER 15(1)(3), MUMBAI v. M/S. OXFORD UINDUSTRIES, MUMBAI

ITA 2761/MUM/2009 | 2005-2006
Pronouncement Date: 30-12-2010 | Result: Allowed

Appeal Details

RSA Number 276119914 RSA 2009
Assessee PAN AALFM0277G
Bench Mumbai
Appeal Number ITA 2761/MUM/2009
Duration Of Justice 1 year(s) 8 month(s)
Appellant INCOME TAX OFFICER 15(1)(3), MUMBAI
Respondent M/S. OXFORD UINDUSTRIES, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-12-2010
Date Of Final Hearing 08-12-2010
Next Hearing Date 08-12-2010
Assessment Year 2005-2006
Appeal Filed On 29-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO.2761/MUM/2009 (ASSESSMENT YEAR: 2005-06) INCOME TAX OFFICER - 15(1)(3) M/S. OXFORD INDUSTRIE S ROOM NO. 108 MATRU MANDIR 320 HAMMERSMITH IND. PRE MISES MUMBAI 400007 VS. NARAYAN PATHARE MARG MAHIM (W) MUMBI 4000016 PAN - AALFM 0277 G APPELLANT RESPONDENT APPELLANT BY: SHRI SUMEET KUMAR RESPONDENT BY: SHRI ANANT N. PAI O R D E R PER B. RAMAKOTAIAH A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) XV MUMBAI DATED 17 TH FEBRUARY 2009. 2. REVENUE HAS RAISED THE FOLLOWING 3 GROUNDS: - 1. THE LD. CIT(A) ALSO ERRED ON FACTS AS WELL AS I N LAW IN HOLDING THAT THE ASSESSEE HAS MANUFACTURED NEW PRODUCTS TO QUALI FY DEDUCTION U/S. 80IB(4) IGNORING THE FACT THAT NO NEW PRODUCT CAN BE MANUFACTURED WITHOUT PUNCHING MACHINE AFTER HAVING ACCEPTED THE FACT THAT THE INVOICE REGARDING THE SAID MACHINE FR OM M/S. TARUN ENTERPRISES WAS BOGUS AND FURTHER UNILATERALLY PRES UMING WITHOUT ANY EVIDENCE THAT THE SAID NEW MACHINE WAS PURCHASE D IN GREY MARKET WHICH WAS VITAL EVIDENCE IN THIS CASE TO DIS ENTITLE DEDUCTION U/S. 80-IB(4) HIT BY NON-FULFILLING OF CONDITION GI VEN IN SECTION 80IB(2)(II). 2. THE LD. CIT(A) ALSO ERRED IN ACCEPTING THAT THE ASSESSEE HAS CARRIED OUT MANUFACTURING WORK IN THE FACTORY EVEN THROUGH 73% OF THE WORK WAS OUTSOURCED AS ACCEPTED BY THE ASSESSEE HIMSELF AND THE ASSESSEE HAS NOT ESTABLISHED HOW THE OUTSOURCED WOR K IS DONE UNDER CONTROL AND SUPERVISION OF ASSESSEE IN ORDER TO HAVE PROFIT AND GAIN FROM INDUSTRIAL UNDERTAKING WHICH IS ESSEN TIAL CONDITION TO BE FULFILLED TO CLAIM DEDUCTION U/S. 80IB(4). 3. THE LD. CIT(A) ALSO ERRED IN DIRECTING THE AO TO ALLOW DEPRECIATION CLAIM OF RS.23 546/- ON PUNCHING MACHINE WHOSE PURC HASE INVOICE WAS PROVED BOGUS BEYOND ANY DOUBT. ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 2 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS STATED TO HAVE ENGAGED IN THE MANUFACTURE OF PVC BOXES TRAYS HANGERS AND CARTOO NS ETC. HAVING FACTORY PREMISES AT DAMAN A BACKWARD AREA SPECIFIED IN EIG HTH SCHEDULE DURING A.Y. 2004-05. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB(4) OF THE ACT AMOUNTING TO ` 29 69 851/- IN RESPECT OF PROFIT FROM AN INDUSTRIAL UNDERTAKING AT DAMAN. THE A.O. HAS DISALLOWED THE C LAIM ON THE GROUND THAT PUNCHING MACHINE WHICH WAS CRUCIAL IN THE PROC ESS WAS NOT ACTUALLY PURCHASED FROM M/S. TARUN ENTERPRISES MUMBAI HENC E IN THE ABSENCE OF SUCH MACHINE ASSESSEE COULD HAVE NOT PRODUCED ANY S UCH GOODS UNDER REFERENCE. FURTHER THE A.O. HAS MENTIONED THAT ASS ESSEE HAS ONLY SHOWN TO HAVE MANUFACTURED CORRUGATED BOXES AND LATER ON HA S CLAIMED THE PRODUCTION OF PVC BOXES TRAYS HANGERS & CARTOONS ETC. THEREFORE ACCORDING TO THE AO THERE HAS BEEN CHANGE IN EXPLANATION OR S TAND BY THE ASSESSEE. FURTHER IT WAS POINTED OUT BY THE A.O. THAT MOST O F THE ACTIVITIES HAVE NOT BEEN CARRIED OUT IN THE FACTORY PREMISES OF THE ASS ESSEE AND AS PER THE AUDIT REPORT IN FORM NO. 10CCB ONLY 8 PERSONS WERE EMPLOY ED WHEREAS FOR CLAIMING OF DEDUCTION AT LEAST 10 PERSONS WERE REQU IRED TO BE EMPLOYED AS PER SECTION 80IB(2)(IV). THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO M/S. TARUN ENTERPRISES FROM WHOM THE ASSESSEE HAS CLAIME D TO HAVE PURCHASED A PUNCHING MACHINE FOR A CONSIDERATION OF ` 1 07 640/-. IN RESPONSE THE STATEMENT OF MR. SANDEEP KOTHARI PARTNER OF THE FI RM WAS RECORDED ACCORDING TO WHICH HE HAS NOT SOLD THE MACHINERY T O THE ASSESSEE. THE A.O. HAS FURTHER STATED THAT ONLY 27% OF MANUFACTURING W ORK HAS BEEN CARRIED OUT AT THE FACTORY PREMISES OF THE ASSESSEE AND 73% OF MANUFACTURING IS NOT DONE BY ASSESSEE IN THE FACTORY BUT OUTSOURCED. 4. BEFORE THE CIT(A) IT WAS CONTENDED REGARDING NON-PU RCHASE OF PUNCHING MACHINERY REGARDING MANUFACTURING PROCESS CARRIED OUT BY THE ASSESSEE AND RELIED ON SIMILAR CASE IN THE CASE OF M/S. FILM SHOPPE IN ITA NO. 4455/MUM/1999 AND MADE ELABORATE SUBMISSIONS BE FORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS DECI DED THE ISSUE AS UNDER IN HIS ORDER IN PARA 4.5 AND 5: - ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 3 4.5 I HAVE CONSIDERED THE ISSUE UNDER APPEAL IN IT S ENTIRETY. ALSO CONSIDERED THE STAND & FINDING OF THE LD. AO PERUS ED THE PAPER BOOK AND SUBMISSION OF THE LD. AR. THE LD. AR HAD EXPLAI NED THE MANUFACTURING PROCESSES AND HAS POINTED OUT THAT TH E APPELLANT HAS INDEED MANUFACTURED NEW PRODUCTS WHICH ARE ALSO LIA BLE FOR EXCISE DUTY. NO EXCISE CAN BE LEVIED UNLESS THERE IS A MANUFACTU RING ACTIVITIES. HOWEVER APPELLANT HAS NOT PAID THE EXCISE DUTY AS THE TURNOVER IS BELOW THE THRESHOLD LIMIT SPECIFIED UNDER THE CENTRAL EXC ISE ACT. THE PRODUCTS MANUFACTURED ARE COMMERCIALLY KNOWN AS A DIFFERENT PRODUCT FROM THE RAW MATERIAL OUT OF WHICH A NEW PRODUCT IS MANUFACT URED. THE END PRODUCTS HAVE DIFFERENT NAME SHAPE AND UTILITY AND IS IDENTIFIED BY THE BUYERS AND SELLERS AS A DIFFERENT PRODUCT AND IS BO UGHT AND SOLD AS A DISTINCT PRODUCT FROM ITS RAW MATERIAL. FURTHER TH ERE IS A FORCE IN THE CONTENTION OF THE LD. AR THAT ONLY SOME OF THE ACTI VITIES THOUGH CAPABLE OF CARRYING OUT IN HOUSE WERE OUTSOURCED TO MEET D EADLINES ON RECEIPT OF BULK ORDERS. THE A/R HAS EXPLAINED THAT THE APPELLA NT HAS ENGAGED TOTAL NUMBER OF 13 WORKERS AND NOT 8 AS WRONGLY WRITTEN I N THE AUDIT REPORT IN FORM 10CCB AND HAS PRODUCED THE ORIGINAL WAGE SHEET . WITHOUT PREJUDICE TO THESE FACTS THE LD AR HAVE FURTHER EX PLAINED THAT IIN ANY CASE THE APPELLANT HAS TAKEN SERVICES OF NUMBER OF CASUAL WORKERS SUCH AS TRANSPORTERS LOADERS AND OUTSOURCED LABOUR WHIC H COLLECTIVE STRENGTH IS MUCH MORE THAN 10. IT IS WORTHWHILE TO MENTION T HAT WHILE ISSUING THE SHOW CAUSE NOTICE ON 19.11.2007 LD. AO HAS MENTIONE D THAT MR. P. KOTHARI ATTENDED ON BEHALF OF M/S. TARUN ENTERPRISE S HAVE ADMITTED TO HAVE ISSUED ONLY INVOICE AND HAS NOT DELIVERED ANY PUNCHING MACHINE BUT IN SECOND PARAGRAPH AO HIMSELF HAS MENTIONED TH AT ONLY 27% OF MANUFACTURING WORK HAS BEEN CARRIED OUT AT FACTORY PREMISES OF THE APPELLANT AND REST OF THE WORK HAS BEEN DONE OUTSID E WHICH MEANS AO HAS ADMITTED THE MANUFACTURING PROCESS OF THE APPEL LANT. IN SHOW CAUSE NOTICE LD. AO HAS MENTIONED ABOUT THE ENGAGEMENT O F 8 EMPLOYEES WHICH HAS BEEN SUITABLY EXPLAINED BY THE APPELLANT BY LETTER DTD. 29.11.2007 THAT TOTAL NUMBER OF WORKERS EMPLOYED WE RE 13 AND NOT 10. THEY HAVE POINTED OUT THE TYPOGRAPHICAL ERROR AND I N SUPPORT OF THEIR CONTENTION THEY HAD PRODUCED ORIGINAL MUSTER ROLL B EFORE THE AO. THE COPY OF THE SAME HAS ALSO BEEN PRODUCED BEFORE ME W HICH HAS NOT BEEN CONTROVERTED BY ANY COUNTER EVIDENCE OR CONVINCING REASON BY THE AO. THEREFORE THE CONTENTION OF THE APPELLANT CANNOT B E DENIED MERELY ON SURMISES. AS REGARDS MANUFACTURING ACTIVITIES AS REPRODUCED EARLIER LD. AR HAS ELABORATELY EXPLAINED AS TO WHAT TYPE OF NEW GOODS HAVE BEEN PRODUCED. AS EVIDENT FROM THE EXPLANATION AND REPRE SENTATION OF THE LD. ARS THAT APPELLANT WAS ENGAGED IN MANUFACTURING OF PVC BOXES TRAYS HANGARS & CARTOONS WHICH CANNOT BE IGNORED MERELY O N THE TECHNICAL GROUNDS. FURTHER IT IS ALSO FOUND THAT IN ACTUALIT Y MACHINE WAS PROCURED BUT FOR WHICH ACTUAL BILL WAS NOT AVAILABLE AS IT W AS BOUGHT FROM GREY MARKET AND TO COVER UP THIS ACT INVOICE WAS TAKEN F ROM M/S. TARUN ENTERPRISE. DURING THE COURSE OF ASSESSMENT PROCEED INGS ITSELF APPELLANT HAS PRODUCED THE PHOTOGRAPH OF FACTORY PREMISES PH OTOGRAPH OF MACHINERY AND CONFIRMATION FROM SUPPLIERS FROM WHOM SUCH MACHINERIES WERE ACQUIRED. IT IS ALSO IMPORTANT TO MENTION THAT AFTER GIVING ALL THESE EVIDENCES TO THE AO APPELLANT HAS INVITED THE AO TO VISIT THE FACTORY ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 4 PREMISES AT HER CONVENIENCE IF AO WANTED TO KNOW TH E FULL FACTS AND TO SATISFY HERSELF REGARDING THE MANUFACTURING ACTIVITIES CARRIED OUT AT THE FACTORY PREMISES VIDE CLAUSE (H) OF PARA 1 OF REPRESENTATION/LETTER DTD. 29.11.2007 . THIS STAND OF THE APPELLANT PROVES THE FACT THAT IT WAS NOT A CASE OF FAKE OR I N-GENUINE CLAIM OF MANUFACTURING ACTIVITIES AND DERIVING OF PROFIT. IT IS ALSO WORTHWHILE TO MENTION THAT APPELLANT HAS ALSO PRODUCED THE SAMPLE OF EACH PRODUCTS BEFORE THE AO VIDE PARA 2 OF LETTER DTD. 29.11.2007 AND HAS ALSO CLAIMED THE POSSESSION OF PUNCHING MACHINE AND LAMINATION M ACHINE. THE LAW ON THE ISSUE IS VERY CLEAR THAT MACHINERY SHOULD BE USED FOR THE PURPOSES OF BUSINESS OR PROFESSION IT SHOULD BE UN DERSTOOD IN A WIDER SENSE SO AS TO GIVE A WIDER MEANING AND EMBRACE PAS SIVE AS WELL AS ACTIVE USER VIDE CIT V. VISHWANATH BHASKAR SATHE (1 937) 5 ITR 621 (BOM). THE HON'BLE ALLAHABAD HIGH COURT HAS HELD TH AT THE EXPRESSION OWNED BY THE ASSESSEE HAS NOT BEEN USED IN THE SE NSE OF THE PROPERTY COMPLETE TITLE IN WHICH VESTS IN THE ASSESSEE. IN T HAT VIEW TO BE AN OWNER THE ASSESSEE MUST BE IN POSSESSION OF THE AS SET AND FURTHER BE IN A POSITION TO EXERCISE THE RIGHTS OF OWNERSHIP NOT ON BEHALF OF THE PERSON IN WHOM TITLE VESTS BUT IN HIS OWN RIGHT VIDE ADDL. CIT V. U.P. STATE AGRO INDUSTRIAL CORPN. LTD. (1981) 127 ITR 97 (ALL.). TH IS VIEW HAS BEEN FOLLOWED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. GENERAL MARKETING & MFG. CO. LTD. (1996) 22 ITR 574 (CAL.). THEREFORE I FIND NO MERIT IN THE REASONING OF THE AO THAT APPELLANT HAS NOT FULFILLED THE CONDITION OF LAW PRESCRIBED U/S. 80IB. UNLESS THE C ONTRARY EVIDENCE WAS BROUGHT ON RECORD AGAINST THE EXPLANATION OF EMPLOY MENT OF 13 EMPLOYEES USE OF PUNCHING MACHINE NON-PRODUCTION OF VARIOUS ITEMS THE CLAIM OF THE APPELLANT WOULD NOT BE DENIED MERE LY ON THE BASIS THAT PROPER PURCHASE BILLS WERE NOT THERE ESPECIALLY WHE N APPELLANT WAS CLAIMING IT TO BE PURCHASED FROM GREY MARKET. OF CO URSE I CANNOT JUSTIFY THE PURCHASE OF GOODS OR MACHINERY FROM GREY MARKET BUT THE GENUINENESS OF THE OF THE APPELLANT THERE WAS A ROL E OF THE MANAGER REGARDING NON OBTAINMENT OF PROPER BILL FROM A PROP ER SUPPLIER CANNOT BE IGNORED. PROPER PURCHASE BILL MAY NOT BE THERE BUT WHEN MACHINE IS USED FOR MANUFACTURING OF GOODS THE CLAIM OF THE APPELL ANT CANNOT BE DENIED ESPECIALLY WHEN APPELLANT HAS PRODUCED THE PHOTOGRA PH OF MACHINERY AND FACTORY PREMISES AND HAS ALSO INVITED THE AO TO VIS IT THE FACTORY PREMISES. AO HERSELF HAS ADMITTED THE MANUFACTURING OF GOODS AND FACTORY PREMISES AT DAMAN THEREFORE MERELY ON THE BASIS OF SOME TEC HNICAL MISTAKES SUBSTANTIAL CLAIM CANNOT BE DENIED UNLESS SUBSTANTI VE AND CORROBORATIVE EVIDENCES ARE BROUGHT ON RECORD. IN THE FACTS AND C IRCUMSTANCES OF THE CASE I REACH TO THE CONCLUSION THAT LD. AO IS NOT J USTIFIED IN DISALLOWING APPELLANTS CLAIM U/S 80IB(4) OF THE ACT AND THEREF ORE DIRECTED TO ALLOW THE CLAIM OF DEDUCTIONS U/S. 80IB OF I.T. ACT. IN THE RESULT GROUND OF APPEAL NOS. 2 TO 8 ARE AL LOWED. 5. THE NEXT GROUND OF APPEAL RELATES TO DISALLOWANC E OF DEPRECIATION AMOUNTING TO RS.23 546/- ON MACHINERY AS DISCUSSED IN FIRST GROUND. AS THE MACHINERY IS USED IN THE PRODUCTION PROCESS THE DEPRECIATION IS FOUND TO BE ALLOWABLE. EVEN OTHERWISE IF THIS DEPRECIATIO N IS NOT ALLOWED BECAUSE OF WANT OF PROPER PURCHASE BILLS FROM A PRO PER PERSON THE PROFIT ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 5 OF THE APPELLANT WOULD BE ON HIGHER SIDE TO BE REDU CED OR ALLOWED U/S. 80IB THEREFORE IT MAKES NO DIFFERENCE FOR ASSESSME NT PURPOSE ESPECIALLY WHEN CLAIM OF DEDUCTION U/S. 80IB HAS BEEN FOUND TO BE ALLOWABLE. THEREFORE DEPRECIATION IS DIRECTED TO BE ALLOWED. 5. CONTESTING THE ABOVE FINDINGS OF THE CIT(A) THE LE ARNED D.R. SUBMITTED THAT THE ASSESSEE ORIGINALLY HAS SUBMITTE D THAT IT WAS MANUFACTURING CORRUGATED BOXES AND LATER ON CHANGED TO MANUFACTURING OF PVC BOXES. THERE IS NO SUCH EVIDENCE ON RECORD ABOU T THE ACTUAL MANUFACTURING ACTIVITY. FURTHER OUR ATTENTION WAS D RAWN TO THE CHANGE IN THE NUMBER OF EMPLOYEES EMPLOYED BY THE FIRM. NOT O NLY WITH REFERENCE TO THE NUMBER OF EMPLOYEES AND THE PROCESS OF MANUFACT URING EVEN THE PURCHASE OF PUNCHING MACHINE WAS ALSO DOUBTED BY TH E A.O. AND REFERRED TO QUESTION NOS. 5 AND 6 OF THE STATEMENT EXTRACTED IN PAGE 3 OF THE ASSESSMENT ORDER AND EXPLANATION GIVEN BY THE ASSES SEE EXTRACTED IN PAGE NO. 4 OF THE ORDER AND CHANGED STAND IN PARA 2 OF PAGE NO. 5 OF THE ORDER TO SUBMIT THAT THE ASSESSEE HAS NOT ESTABLISHED EITHER PURCHASE OF MACHINERY OR EMPLOYING LABOUR OR MANUFACTURING WORK IN THE SA ID FACTORY AND HENCE THE CIT(A)S ORDER IN ALLOWING THE DEDUCTION AS WEL L AS DEPRECIATION IS NOT CORRECT. 6. THE LEARNED A.R. HOWEVER RELIED ON THE ORDER OF T HE A.O. AND ALSO PLACED ON RECORD DETAILED SUBMISSIONS REGARDING EVI DENCE/PROPOSITIONS AND FURTHER PLACED ON RECORD ADDITIONAL EVIDENCES IN TH E FORM OF AFFIDAVIT FROM ONE MR. JANARDHAN MEKALA DATED 28.10.2010 STATING T HAT HE HAS SUPPLIED A BRAND NEW SMALL SIZE PUNCHING MACHINE AS AN ADDITIO NAL EVIDENCE IN SUPPORT OF PURCHASE OF MACHINERY AND PLEADED THAT T HE ADDITIONAL EVIDENCE BE ADMITTED ON RECORD. 7. WE HAVE CONSIDERED THE ISSUE. FIRST OF ALL ADMISSIO N OF ADDITIONAL EVIDENCE IS GOVERNED BY RULE 29 OF THE APPELLATE TR IBUNAL RULES WHICH IS AS UNDER: - 29. THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLE D TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIB UNAL BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR AN Y WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE OR IF THE INCOME-TAX AUTH ORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO T HE ASSESSEE TO ADDUCE ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 6 EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM THE TRIBUNAL FOR REASONS TO BE RECORDED MAY ALLOW SUC H DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. 8. IN THIS CASE THE TRIBUNAL HAD NOT REQUIRED ANY DOCU MENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED. THE ASSESSEE HAS NEVER EXPLAINED WHY THIS EVIDENCE WAS NOT FURNI SHED BEFORE THE A.O. WHEN THE MATTER WAS IN ADJUDICATION BEFORE THE A.O. AND NOT EVEN BEFORE THE CIT(A) EVENTHOUGH THE CIT(A) FOR THE REASONS BEST KNOWN TO HIM HAS DIRECTED THE A.O. TO ALLOW THE DEPRECIATION WITHOUT ESTABLISHING THE PURCHASE OF MACHINERY. IN THIS REGARD WE ARE UNABLE TO ADMIT THE ADDITIONAL EVIDENCE AS THE ASSESSEE HAS NOT SUBMITTED THE REASONS FOR F AILURE ON ITS PART TO SUBMIT BEFORE THE REVENUE AUTHORITIES. THEREFORE T HE AFFIDAVIT DATED 26.10.2010 COULD NOT BE ADMITTED AS ADDITIONAL EVID ENCE IN THIS PROCEEDINGS. 9. HAVING SAID SO AS SEEN FROM THE RECORD THE ASSESS EE IS CONTINUOUSLY SHIFTING ITS STAND WITH REFERENCE TO MANUFACTURING PRODUCT NUMBER OF EMPLOYEES AND PURCHASE OF MACHINERY. THE LEARNED CO UNSEL DURING HIS ARGUMENT SUBMITTED THAT THE A.O. WAS ASKED TO INSPE CT THE FACTORY/ MACHINERY AND EXAMINE WHETHER THE ASSESSEE IS IN TH E MANUFACTURING ACTIVITY OR NOT WHICH THE A.O. HAS NOT DONE. THE S AME ASPECT WAS ALSO CONSIDERED BY THE CIT(A) BUT WITHOUT GIVING AN OPPO RTUNITY TO THE A.O. OR WITHOUT RESTORING THE ISSUE TO HIS EXAMINATION BY W AY OF REMAND HE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. CONSIDERING TH E FACTS OF THE CASE WE ARE OF THE OPINION THAT THE ISSUE REQUIRE RE-EXAMINATIO N BY THE A.O. NOT ONLY TO EXAMINE WHETHER THE ASSESSEE IS IN THE MANUFACTURIN G ACTIVITY OR NOT BUT ALSO TO SEE WHETHER THE ASSESSEE HAS INDEED PURCHAS ED THE MACHINERY AND IF SO FROM WHICH SOURCE AT WHAT COST AND WHETHER THER E WERE REALLY MANUFACTURING ACTIVITIES SO AS TO ALLOW THE CLAIM U NDER SECTION 80IB. IN VIEW OF THIS THE MATTER IS RESTORED BACK TO THE A.O. TO CONSIDER IT AFRESH. ACCORDINGLY ORDERS OF THE A.O. AND CIT(A) ARE SET A SIDE ON THE ISSUE AND THE ASSESSMENT IS RESTORED TO THE A.O. TO DO IT DE NOVO ACCORDING TO LAW. NEEDLESS TO SAY THAT THE ASSESSEE SHOULD BE GIVEN A DEQUATE OPPORTUNITY IN SUPPORT OF ITS CONTENTIONS INCLUDING ITS LATEST CON TENTION ABOUT SUPPLIER OF SO ITA NO.2761/MUM/2009 M/S. OXFORD INDUSTRIES 7 CALLED PUNCHING MACHINERY BY WAY OF AFFIDAVIT FILED BEFORE US AS ADDITIONAL EVIDENCE. REVENUES GROUNDS ARE ALLOWED. 10. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 30 TH DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XV MUMBAI 4. THE CIT XV MUMBAI CITY 5. THE DR C BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.