- (1.) Vide this judgment we propose to dispose of ITA Nos. 770 to 774, 776 and 837 of 2010 filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter to be referred as the 'Act'), as all these appeals have been filed against order dated 29.05.2009 passed by the Income Tax Appellate Tribunal, Chandigarh, Bench (A), Chandigarh (hereinafter to be referred to as the "ITAT"), in ITA Nos. 284 to 290/Chd/2009 for the assessment years 1999-2000 to 2005-06.
(2.) The following substantial questions of law have been framed in all the appeals :- (i)"Whether, on the facts and in the circumstances of the case, and in law, the Hon'ble ITAT was justified in holding that the assessee fulfills the provisions of Section 80 IB (2) (iv) of the Act, 1961, where the basic condition for deduction is that the industrial undertaking employs ten or more workers in a manufacturing process whereas it has actually employed only 8 workers as certified in form No. 10 CCB filed alongwith audit report - (ii)"Without prejudice to the ground No. 1 above, whether on the facts and the circumstances of the case and in law, the ITAT was right in holding that the respondent fulfills the conditions of necessary employment of ten workers for claiming deduction u/s 80 IB without appreciating that out of the ten workers, two persons working as manager and supervisor are also working partners in the two sister concerns of the respondent and actively engaged in the affairs of those firms and in lieu of that getting salary there from - In the following substantial question of law has been framed in addition to the aforementioned substantial questions of law :- (iii) Whether on the facts and in the circumstances of the case, the memoranda books could be considered as regular books of accounts explaining the discrepancy of cash found in the premises during search -
(3.) Brief facts of the case as per narrative in the appeal are that the respondent-assessee is an individual engaged in the business of manufacturing of polythene bags and tubes (packing material). A search and seizure operation was carried out in the case of the respondent during the financial year 2004-05 on 03.09.2004 leading to service of notice on the respondent under Section 153A of the Act requiring her to file return of income within one month of the service of the notice. The respondent filed return on 04.05.2006 declaring income of Rs.19,62,604/-. After issuing notices under Section 143(2) and 142(1) the case was taken up for scrutiny. During the course of search at the respondent's residence, cash amounting to Rs.20,73,470/- was found from different rooms of the family members. However, from Smt. Bimla Rani's room alone, i.e. the respondent, cash of Rs.17,74,765/- was found. During the course of assessment proceedings, the respondent could not explain cash to the tune of Rs.6,55,270/-, therefore, the Assessing Officer made an addition of Rs.6,55,270/- under Section 69A on account of unexplained cash found during the search operation.;