B.P. Dharmadhikari, J.
1. By this appeal filed under Section 260-A of the Income Tax Act, 1961 the appellant - assessee challenges the order dated 22.02.2007 in IT(SS)A No. 7/PNJ/2004 for the Block period 01.04.1989 to 01.11.1999. This Court has admitted the appeal on 26.09.2008 on the substantial questions of law as raised in ground No. VII(a), (d) and (e) of the appeal memo. Those questions read as under :-
"(a) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the sum of Rs. 17,00,000/- advanced by the appellant to their sister concern by cheques drawn in favour of the said sister concern out of disclosed bank account and duly recorded in the bank account and cash book of the appellant as unexplained investment ?
(d) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in concluding that the income of the new industrial until, the receipts of which were admittedly found recorded in books could be included in the income taxable in block assessment in the light of the provisions of Section 158BB(1)(d) which excludes from the scope of block assessment such income assessable for assessment year for which the time for filing the return of income has not expired as on the date of search ?
(e) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the new industrial unit cannot claim to have employed the required number of workers viz. 10 workers by including peons, clerk and head clerk employed by the undertaking the only business of the undertaking being job printing ?"
2. The facts are not much in dispute. The appellant is a Private Limited Company which publishes a daily newspaper "Herald". Consequent to a search warrant issued under Section 132 of the Income Tax Act, executed on 01.11.1999 and 02.11.1999, the Deputy Commissioner of Income Tax, Circle 1, Panaji made block assessment for the period 01.04.1989 to 01.11.1999. The Assessing Officer found 4 cheques totaling Rs.17,00,000/- issued by the appellant in favour of its sister concern "Austro Beer Private Ltd." during the year ending on 31.03.1997. The amounts thereof were not separately mentioned in the balance sheet of the appellant company for the said period. The appellant was subjected to scrutiny for the assessment year 1997-98, and it submitted that sum advanced to the sundry debtors included in it (according to the appellant) the above mentioned amount of Rs. 17,00,000/-. The outstanding from sundry debtors was mentioned as Rs.1,08,70,320/-The control register maintained by the appellant indicated balance from advertisement debtors to be Rs. 43,01,569/-. The appellant has urged that along with the amount outstanding from circulation debtors worth Rs.47,87,510/-, total amount outstanding in this sundry debtors account worked out to Rs. 90,89,079/-. The amount of advanced i.e. Rs. 17,81,241/- covered the above mentioned advance to Austro Beer Pvt. Ltd. The difference in balance sheet worked out to Rs. 81,241/-. In spite of this, the assessment officer added back this Amount of Rs. 17,00,000/- and that addition was maintained by the C.I.T. (Appeals) as also by the I.T.A.T. It is urged that no new evidence was found in search operations and as such, there was no reason to add back that amount as proceedings were closed after scrutiny, mentioned supra.
3. The appellant states that it commenced Printing Unit at Verna, Goa in March, 1998 and its annual account were made up to 31.03.1999 for the first time. Income generated by the said Unit of Rs.38,96,981/-, was claimed as exempted in return for the assessment year 1999-2000, and in block assessment return as income of new industrial undertaking exempt under Section 80 IA. It is submitted that the search was completed on 02.11.1999 and last date of filing of the said return was 30.11.1999. Hence, following mandate of Section 158BB(1)(d) of the Income Tax Act, the said income could not have been taken into account for the purpose of block assessment.
4. Lastly it is urged that 10 workers contemplated for grant of exemption, are held not to be working in the undertaking and not involved in manufacturing process. It is in this background, that we have heard the arguments of Shri D.E. Robinson, the learned Counsel for the appellant and Ms. Asha Desai, learned Counsel for the Department.
5. Shri Robinson, the learned Counsel for the appellant points out that the assessment for the Assessment Year 1997-98 was completed under Section 143 after scrutiny, particularly of the debtors balance. The amount of Rs. 17,00,000/- was already reflected in the books of account of the appellant, and hence, it cannot be treated as undisclosed income for the purpose of Section 158(B)(b) of the Income Tax Act and also cannot be viewed against the assessee in the light of Section 69 thereof. He submits that the I.T.A.T. has not properly appreciated this position in law, though it mentions necessary facts. To substantiate his contentions, he draw support from CIT v. Vikram A. Doshi  256 ITR 129/ 127 Taxman 513 (Bom.) and CIT v. Templetom Asset Management (India) (P.) Ltd.  337 ITR 541/ 20 taxmann.com 626 (Bom.).
6. Dealing with the question (d), noted supra, the learned Counsel states that the approach of the I.T.A.T. and other authorities for including the income of new industrial unit in the income of the assessee in block assessment period is also contrary to law. Stipulation in Section 158 BB (1)(d) of the Income Tax Act has been overlooked. That section excludes from the scope of the block assessment, such income assessable for assessment year for which the time of filing return has not expired as on the date of the search. He submits that raid was conducted on 02.11.1999, while the normal date for filing the return was 30.11.1999. Accordingly the return was filed within time. He also submits that the said last date was later on extended upto 30.12.1999. He contends that necessary details were also given in that return and entries were made in books of account before the date of filing of the return.
7. In the alternative and without prejudice to the ground argued above, Shri Robinson, the learned Counsel for the appellant submits that an exemption or concession about said income extended to the assess by the provisions of Section 80 IA (2)(v) has been overlooked and construed narrowly. He relies upon the judgment of Hon'ble Supreme Court at CIT v. South Arcot Dist. Co.op. Mktg. Society Ltd.  176 ITR 117/43 Taxman 328 to point out need of liberal approach for interpretation or construction Section 80 IA (2)(v) in such circumstances. He further contends that the assessee, employs 12 persons and some of them are working as clerks or typists or peons etc. The work being done by these persons is essential to manufacturing process and hence, they cannot be excluded from the said process & provision. He draws support from CIT v. Jyoti Plastic Works (P.) Ltd.  339 ITR 491/203 Taxman 546/16 taxmann.com 172 (Bom) and CIT v. Nanda Mint & Pine Chemicals Ltd.  345 ITR 60/25 taxmann.com 118 (Delhi) both decided by this High Court.
8. To point of scope of Section 69, he draws support from a judgment at Babulal C. Borana v. Third ITO  282 ITR 251/ 144 Taxman 674 (Bom.) by this Court. To submit that no separate account of a new unit needed to be maintained, he relies upon a judgment of Andhra Pradesh High Court CIT v. Abhirami Cotton Mills (P.) Ltd.  220 ITR 84/87 Taxman 152. He contents that thus the approach of the I.T.A.T. in the matter has been erroneous and the present appeal needs to be allowed.
9. Ms. Desai, the learned Counsel appearing for the Revenue submits that no substantial questions of law arise in this appeal. Facts essential to raise such questions have been answered against the assessee by the I.T.A.T. and those facts are not in dispute before this Court. After search on Austro Beer, the sister concern of the assessee, transactions were discovered. She points out that the assessee initially came up with a defence that the amount of Rs. 17,00,000/- disclosed investment and later on pointed out that it was a loan extended by the assessee to its sister concern. The name of the said sister concern M/s. Austro Beer does not figure in the list of sundry debtors. The Assessing Officer in this situation has correctly appreciated the factual position, and the said finding of fact has been upheld thereafter by two superior forums. Material essential to take this view came out only during search. She further submits that the Assessment Officer directed the assessee to file return in March, 2000/ November, 1999, but the assessee choose not to file return and disclose that income.
10. She invites attention to the amendment effected in 2009 to the Income Tax Act,1961, vide Section 2(29BA) where the Parliament has added the definition of phrase "Manufacture". She contends that sweeper, clerk, peon are not involved in any manufacturing process and therefore, have been rightly excluded.
11. She also reads out the order of the ITAT and the Assessment Officer to buttress her submissions that the assessee is raising only questions of facts without actually assailing any findings of fact, as such.
12. Shri Robinson, the learned Counsel for the appellant in his reply arguments argues that the search of sister concern is not relevant and the assessee had disclosed entire material including list of secured debtors. That material was examined and thereafter, only the Assessment Officer finalized the assessment of the assessee for the Assessment Year 1997-98. It is further contended that even if books of account are found to be maintained jointly, Section 81 IA enables the Assessing Officer to segregate the accounts and as such no prejudice is caused to the department. He further submits that the definition added by the Parliament in 2009 does not equate the manufacturing process with manufacture and therefore, is not relevant. He, however, adds that the controversy needs to be evaluated as per law prevailing in the year 1999.
13. In so far as question (a) is concerned, the I.T.A.T. has recorded a finding of fact that payment of Rs. 17,00,000/- to Austro Beer by the appellant came to light only from Dena Bank's Account of Austro Beer (I) P. Ltd. The I.T.A.T. has found it to be an admitted position that above amount being advanced to Austro Beer did not come to light prior to search and seizure operations, and the A.O. has to add it only on the basis of the material found during search and then post search enquiry on such material. The position emerging from Dena Bank Account of Austro Beer (I) P. Ltd. is mentioned in paragraph no.3 of its order by ITAT. The corresponding entries in the accounts of the assessee are also looked into in the said paragraph. The I.T.A.T. has found that the assessee did not show Austro Beer as a debtor in the balance sheet as on 31.03.1997 and in subsequent balance sheets. The investment account of Austro Beer reflected opening debit balance of Rs. 7,50,000/- as on 01.04.1996. Appellant was given opportunity to explain this position. Explanation furnished was that the financing banker did not approve the diversion of borrowed funds, & hence payments to Austro Beer could not be shown as advances and hence, it was included under the head of sundry debtors. This contention has also been looked into and the I.T.A.T. has found it un-acceptable because of the inconsistencies emerging therefrom. All these are findings on facts recorded by the I.T.A.T.
14. Contention, that the assessment of the appellant for the year 1997-98 was completed after scrutiny of the debtors balance and A.O. had verified the bank account and audited books of accounts produced before it therefore, does not hold any water. Section 69-B of the Act is on treatment to be accorded to amount of investments, etc., not fully disclosed in books of account. Where in any financial year the assessee has made investments and the Assessing Officer finds that the amount expended on making such investments exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount is deemed to be the income of the assessee for such financial year. Fact that investment in Austro Beer account has not been reflected in the balance sheet of assessee as on 31.3.1997 & onwards is not in dispute. Investment account of M/s Austro Beer shows the opening balance of Rs. 7.5 Lakh as on 1.4.1996 & even thereafter. The resulting mismatch in the accounts and incongruity in the stand of the assessee has come on record only after search and during further enquiry. The appellant has taken inconsistent stands only due to raid about amount of Rs. 17,00,000/-advanced to Austro Beer and its nature. ITAT in para 6 has held that assessee could not give details of sundry debtors & support it by primary books of accounts. In para 7, it also found that assessee could not show that amount of Rs. 17 Lakh was reflected in the balance sheet dated 31.3.1997. It also observed that it was not shown that amounts were not shown as repaid by M/s Astro Beer during relevant previous year. In para 8, while rejecting the challenge about treating it as concealed income, ITAT found that this payment of Rs.17 Lakh to M/s Astro Beer surfaced only from the Dena Bank account of the later concern. We find that it has been rightly treated as unexplained investment in terms of Section 69B of the Income Tax Act. Finding that this payment & its nature was learnt due to search is also not perverse. No arguments have been advanced to show why or how these findings are erroneous or then Section 69B does not get attracted. There is no substantial question of law even sought by the assessee in this regard. Question (a) formulated above, therefore, needs to be answered against the appellant and the order of the I.T.A.T. needs to be maintained.
15. In so far as Question (d) is concerned, the fact that time to file return was not over on the date of raid and return came to be filed on 30.11.1999, needs to be accepted. Section 158-BA dealing with the subject of assessment of undisclosed income as a result of search mandates that such income or the transactions relating to such income are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years. If this requirement is met with, the said income can not be included in the block period. Appellant assessee has failed to demonstrate this fact. Section 158-BB is about the computation of undisclosed income of the block period. Its subsection(1)(d) lays down that where the previous year has not ended or the date of filing the return of income under sub-section (1) of Section 139 has not expired, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years; the undisclosed income can be computed. Provisions of both these Sections are very clear. Thus, the bar prescribed is not absolute. But then the appellant - assessee ought to have pointed out how the said income was disclosed in books before the date of raid & in its regular return. The I.T.A.T. has observed in paragraph no.11 of its order that no clarification was given as to whether the deductions under Section 80 IA was claimed in that return or not. The accounts officer has noted that the computerized books of account were produced before the DDIT only. The I.T.A.T. has found that said addition was made on the basis of the documents obtained during search and during post search enquiry. During arguments in this appeal, the learned Counsel appearing for the appellant was asked whether the assessment in terms of the return filed on 30.11.1999 is completed or not. The learned Counsel replied on 08.10.2014 that he was not having any instructions on this issue. The arguments of this learned Counsel were again on 13.10.2014 & even on said date, query remained un answered. In this situation, we are not in a position to accept the contentions of the appellant based on Section 158(BB)(1)(d) .
16. In this situation, we find that question (d) also cannot be answered in favour of the appellant. The question whether maintenance of separate account in relation to Unit at Verna was necessary or not necessary is, therefore, not very relevant in present matter. The Assessment Officer has, as a matter of fact, found that in separate books of account of Verna branch presented before DDIT various transactions were mentioned which did not figure in profit & loss account of assessee in relation to that branch. Details of the same are discussed in para 12 under head 5 by the AO. In absence of any challenge to these findings, we find that question (d) does not emerge as a substantial question of law before us.
17. This brings us to consideration of last question i.e. About status of the employees working with the assessee. The assessee states that Peons, Head-clerk and Clerk-typist need to be included in the number of employees to find out the eligibility in terms of Section 80 IA(2)(v) of the Income Tax Act. The learned Counsel submits that emphasis in said clause (v) is not on 'manufacturing process', but, on use of power to carry out it. It is submitted that those employees whose employment is must to effectively carry out the manufacturing process or to facilitate it, must necessarily be included to find out the number of employees.
18. Our attention has been invited to a judgment of Hon'ble Apex Court in case of South Arcot Dist. Co.op Marketing Society Ltd. (supra), to urge that a liberal interpretation of such a provision is necessary. Judgments in case of Jyoti Plastic Works Pvt. Ltd. (supra), and Nanda Mint & Pine Chemicals Ltd. (supra), are also relied upon to buttress this submission.
19. We find that the issue is considered by the I.T.A.T. in paragraph no.12 of its judgment. The Hon'ble Apex Court in its judgment in case of South Arcot Dist. Co.op Marketing Society Ltd. (supra), has considered the provisions of Section 14(3)(v) of the Indian Income Tax Act, 1922. The exemption provided for, was found to be with a view to encourage the Cooperative Societies to construct Warehouses which were likely to be useful in the development of rural economy, therefore, the Hon'ble Apex Court held that liberal interpretation was necessary.
20. Other two judgments cited by Shri Robinson, the learned counsel for the appellant are by the Division Bench of this Court and by the Division Bench of the Delhi High Court respectively. Therein the question was - Whether employees hired through contractor for carrying on manufacturing activity & the casual workers also needed to be included ? In said precedents, the fact that those employees hired either through the contractor or working as casuals, were engaged in the manufacturing process was not in dispute.
21. Here the provisions of Section 80 IA (2)(v) of the Income Tax Act employs two phrases; first one is "Industrial Undertaking" and the second is "Manufacturing Process". This Clause (v) considers the Industrial Undertaking which manufactures or process articles or things. By implication, it excludes those Industrial undertakings which do not manufacture or produce any article or thing. Section 80 IA (1) speaks of a business of an industrial undertaking. Sub-section (2) thereof speaks of an Industrial Undertaking. Clause (i) therein lays down that such Industrial Undertaking should not be formed by splitting up or reconstruction of a business, already in existence. Similarly, its Clause (ii) also necessitates that such industria
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l undertaking should not be formed by transfer to a new business of machinery or plant previously used for any purpose. Thus concept of 'business' envisaged therein appears to be wider including within itself the 'industrial undertaking'. However, for the present purpose it is not necessary to conclusively lay down any such law. 22. Clause (v) of sub-section (2) speaks of an industrial undertaking. As already noted above, such industrial undertaking has to be engaged in manufacture or production. It then further requires employment of 10 or more workers for "manufacturing process" if said process is being carried with the aid of power, & 20, if without power. Thus, industrial undertaking may have more than 10 or several employees, but, clause (v) warrants that 10/20 or more of such employees/ workers in the industrial undertaking must be employed in the manufacturing process. Thus, manufacturing process is obviously a narrower concept. Industrial undertaking therefore, may have various departments like accounts, audit, personnel, marketing etc. The workers working in these other departments will not be participating in manufacturing process though employed in such industrial undertaking or establishment. Emphasis in Clause (v) is on actual involvement of such workers in manufacturing process. Thus, skilled and unskilled workers who work on machine or otherwise actually participate in manufacturing process need to be counted to find out the number of 10 or more, envisaged by the Parliament in Clause (v). Sweeper, Peons, Manager, Head clerk and Clerk-Typist are not working or participating in manufacturing process. They may form part of office establishment. Hence, they need to be excluded for the purpose of finding out whether said clause (v) is attracted or not. In this case the appellant does not employ 10 workers in actual manufacturing process, as such, the finding by I.T.A.T. cannot be said to be erroneous or perverse. Question (e) above also stands answered against the assessee appellant. 23. In view of this discussion, none of the substantial questions considered above can be answered in favour of the assessee. Consequently, the appeal fails and is accordingly dismissed. No costs.