Gee Ispat Private Ltd., New Delhi vs Department Of Income Tax

Appellant by: Shri Gautam Jain, CA Respondent by: S/Shri Sumit Bajpai & RRS Gill, CIT(DR)

Date of hearing : 12.03.2015 Date of pronouncement: 18:05.2015

ORDER

PER I.C. SUDHIR: JUDICIAL MEMBER These are the cross appeals preferred by the parties against the

common First Appellate Order on different issues.

2. The Revenue has questioned First Appellate Order on the following

grounds:

"1. The Learned CIT(Appeals) is not correct in law and facts:

2 2. On the facts and in the circumstances, Learned CIT(Appeals) has erred in restricting the addition of Rs.8,37,60,000 ( 5% of 83076 crore) made by the Assessing Officer on account of undisclosed GP rate.

3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in restricting the addition of Rs.11,69,98,750 to the account of the undisclosed stock.

4. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in reducing the addition of Rs.2,04,91,750 to Rs.89,51,760 made by the Assessing Officer on account of undisclosed income in the investment of property".

3. The assessee on the other hand has impugned First Appellate Order on

the following grounds:

"1. That the Learned CIT(Appeals)-XXXI, New Delhi has erred both in law and on facts in sustaining an addition of Rs.4,18,80,000 out of an aggregate addition of Rs.8,37,60,000 by applying the rate of 5% on alleged suppressed sales assumed on the basis of a diary seized from third party.

1.1 That the Learned CIT(Appeals)-XXXI, New Delhi has failed to appreciate that diary marked as Annexure A-I found adnd seized from residential premises of Shri Salek Chand Garg and the statement recorded Shri Salek Chand Garg neither in law and nor on fact could be made a basis to assume that appellant had made undisclosed sales and as such, addition made on the 3

basis of irrelevant and inadmissible evidence is illegal, invalid and unsustainable.

1.2 That the Learned CIT(Appeals)-XXXI, New Delhi has further erred both in law and on facts in upholding the addition without appreciating that trading addition made without rejecting the books of account u/s. 145(3) of the Act is illegal, invalid and therefore, wholly untenable.

1.3 That the Learned CIT(Appeals)-XXXI, New Delhi has failed to appreciate that seized diary from Shri Salek Chand Garg pertains to his own transactions and not to the appellant company and therefore, addition sustained is wholly unsustainable.

1.4 The finding of the Learned CIT(Appeals) that the subsequent statement of Shri Salek Chand Garg recorded in response to summons u/s. 1341 of the Act creates doubts in the mind that why Shri Salek Chand Garg has denied when he himself admitted earlier itself establishes the addition has been sustained on surmises, suspicion and conjectures and by disregarding the explanation and evidence tendered by the appellant company.

1.5 That the Learned CIT(Appeals) has failed to appreciate that in absence of any material much less any valid material having been found from the premises of the appellant company even as a result of search, no trading addition could be made on a hypothetical assumptions and presumptions and, hence the same is unsustainable.

4 2. That the Learned CIT(Appeals) has erred both in law and on facts in sustaining an addition of Rs.6,62,35,000 out of an aggregate addition of Rs.17,69,98,750 representing alleged unexplained investment-in-stock.

2.1 That the Learned CIT(Appeals) while upholding the addition has failed to appreciate that once the physical stock duly tallied with the stock recorded in the books of account no addition could be made on account of alleged unexplained investment- in-stock, more particularly when the same was supported by order of assessment from Excise Department and VAT authorities.

2.2 That the Learned CIT(Appeals) having accepted that inventory given to the bank had been inflated in few of the items of raw material so as to obtain higher funding, the finding that there is unexplained investment in stock is highly arbitrarily, illegal and therefore untenable, particularly since no evidence either alleging or establishing purchase or sales outside books was found from the premises of the appellant company. 2.3 That the Learned CIT(Appeals) has erred both in law and on facts in processing to sustain the addition on account of alleged unexplained investment-in-stock on the basis of diary found from thirty party.

2.4 That ever otherwise the computation of alleged peak is based on surmises, conjecture and hence unsustainable.

3. That the Learned CIT(Appeals) has erred both in law and on facts in upholding the addition of Rs.61,26,760 out of addition of Rs.2,04,91,450 representing unexplained investment in 5

property by relying on the circle rate and, section 50C of the Act.

4. That the Learned CIT(Appeals) has erred in both in law and on facts in not telescoping the addition made on account of alleged undisclosed profit with alleged unexplained investment and hence the addition so sustained is otherwise too unjustified and, not sustainable.

5. That the Learned CIT(Appeals) has erred both in law and on facts in upholding the levy of interest under sec. 234B of the Act which is not leviable on the facts and circumstances of the case of the appellant company."

4. Ground No.1 of the appeal preferred by the Revenue is general in

nature, hence, does not need independent adjudication.

5. Ground No.2 (Revenue ) & Ground Nos. 1, 1.1 to 1.5(Assessee): The

issue involved in the grounds is as to whether the Learned CIT(Appeals) was

justified in restricting the addition of Rs.4,18,80,000 out of the addition of

Rs.8,37,60,000 made by the Assessing Officer by applying g.p. rate of 5%

on the alleged suppressed sales assumed on the basis of a diary seized from

third party.

6. The relevant facts are that the assessment order has been framed in

pursuance to search carried out at the premises of the assessee company and 6

others on 07.01.2010. The Assessing Officer on the basis of the diary found

at the premises of Shri Salek Chand Garg amounting to Rs.8,37,60,000

added the amount in the income of the assessee on account of undisclosed

profit on unaccounted sales. The Learned CIT(Appeals) has restricted the

addition to Rs.4,18,80,000. Thus, the parties are in cross appeals.

7. The Learned AR submitted that the aforesaid addition has been made by

applying a rate of profit of 10% on alleged undisclosed sales of Rs. 83.76 crores which

has been arrived in the manner hereunder:

Sr. No. Alleged undisclosed sales (Rs. Pages of the order of assessment is crores)

i) 44.94 6.12

ii) 38.82 14-16 Total 83.76

7.1 The Learned AR submitted that the Revenue has not disputed that the aforesaid figures of Rs. 44.94 crores as been arrived by adopting a rate from the diary seized from Shri Salek Cand Garg. It is not disputed that there is no material that the sales made by the assessee company are at the rates stated in the diary. The entire addition is based on supposition and presumption. He submitted that following are the undisputed facts of the present case:

a) That complete books of accounts have been maintained by the assessee company;

b) That such books of accounts are duly audited; c) That goods manufactured and sold by the assessee company are excisable

goods and no defect has even been allowed by excise authorities. The copies of the excise return have been placed at pages 279 to 313 of Paper Book;

7 d) That even the VAT authorities have accepted the turnover declared by the assessee company. The return filed with the VAT authorities are placed at pages 314 to 329 of Paper Book;

e) That no evidence either in the shape of unexplained cash or unexplained investment or material has been found from the premises of the assessee company as a result of search

f) That entire stock found in the course of search was duly reconciled with the books of accounts. The copy of the stock register is placed at pages 112 to 230 of Paper Book;

g) That entire sale as made by the assessee company in the instant year aggregate to Rs. 699.73 crores (page 21 of Paper Book) which sale of manufacture goods is of Rs. 257.51 crores. The quantity wise details is placed at pages 29 and 30 of Paper Book which have been accepted as such;

h) That the sales have been made to the identifiable and verifiable parties and no evidence has been gathered post search to allege unaccounted sales;

i) That not a single party has been examined or even attempted to be examined before drawing adverse inference of such a magnitude fastening a heavy demand on the assessee company;

j) That books of accounts as maintained by the asessee company stands accepted as such;

7.2 The Learned AR submitted mere substitution of rate based on the diary of third party so as to assume undisclosed sales of the appellant company and as such the figures of Rs. 44.94 crores is undisclosed sales is entirely misconceived, misplaced and untenable.

8 The Learned AR submitted that even the figure of Rs. 38.82 crores is based on hypothetical assumption and presumption.

8

8.1 It was submitted that the said figure has been arrived by aggregating the figures stated at pages 179 to 183 of Annexure A-I i.e. diary seized from the premises of Shri Salek Chang Garg.

8.2 It was submitted that the revenue before making the impugned addition has not established any nexus of the said figures with the appellant company

8.3 It was submitted that in absence of any nexus of the said figures adverse inference drawn is entirely misplaced more particularly in light of the undisputed facts submitted in sub-para (a) to (j) of para 2.1 of this synopsis.

8.4 It was submitted that the statement of Shri Salek Chand Garg was recorded on the date of search pages 53A to 71A of typed copies of statement shows that Shri Salek Chand Garg was carrying on his own business in the name of M/s Ashutosh Hot Re-rolling and M/s Shivam Industries. Infact even the diary also establishes that but for few pages i.e. 179-184 all other pages admittedly have not even been alleged to pertain to appellant company

8.5 It was submitted even vis-à-vis the above pages namely 179-184 no material has been brought on record to show that such entries namely entries at pages 179 to 184 are sales of the appellant company

8.6 The Learned AR added here that even Shri Salek Chand Garg in a subsequent statement recorded on 21.10.2011 (pages 108A-110A of type copies of statement) has not even alleged that such diaries pertains to appellant company. On the contrary he has admittedly to the fact that such diary pertains to his business. It was also submitted that the learned Assessing Officer has therefore deliberately in the order of assessment overlooked the aforesaid statement before making the additions. Moreover even the learned CIT(A) after having found and held that Shri Salek Chand Garg had denied his admission earlier yet proceeded to make addition on conjecture, surmises and suspicion. It was submitted both the authorities namely the AO and Ld.CIT(A) have overlooked the initial statement of Shri Vijay Pal Garg, MD of the appellant company (pages 103A to 105A of type 9

copies of statement) wherein it was denied that there is any connection of Shri Salek Chand Garg with the appellant company. It was clearly stated that assessee had only dealing with Shri Sawar Mal Goyal and there is no material on record to establish any dealing with Shri Salek Chand Garg.

8.7 It was submitted that the revenue has not led any material to rebut the above statement despite having framed assessment twenty one months after recording the said statement of the director. Also even Shri Sawar Mal Goyal has not been examined by the authorities below before making or sustaining the addition.

8.8 It was thus submitted that the assumption that Rs. 83.76 crores represents undisclosed sales is not in accordance with law and therefore untenable.

8.9 The learned DR in the course of his submission has placed on record tables stating the various figures from the diary if are analyzed then they all indicate that there was unaccounted sales of approximated Rs. 38.82 cores.

9. It was submitted by the assessee that mere inferences cannot be a ground to overlook, reject and discard tangible documentary evidence. It was also submitted that the said inferences are also being drawn on the basis of record of a third party whose testimony was unbelievable as he has himself adopted shifting stands. Reliance was placed on the judgment of Hon'ble Apex Court in the case of CIT vs. P.V. Kalynsundaram reported in 294 ITR 49 holding that in which allegations of on money transaction on the basis on non convincing loose sheets found during the course of search and conflicting statement of the seller was there, the addition was rightly deleted by the Tribunal and affirmed by the Hon'ble High Court. Moreover it was also submitted that Hon'ble Apex Court in the case of K.P. Varghese vs. ITO reported in 131 ITR 597 held that the burden of proving is that of revenue when there is allegation of understatement on concealments in the consideration shown. Infact both the above judgments were relied upon by the Hon'ble Delhi High Court in the case of CIT vs. Prem Prakash Nagpal reported in 220 Taxman 168 (Del) (Mag) (pages 963-966 of JPB) to hold 10

that third party evidence cannot be a ground for making addition in absence of any corroborative material found from the assessee.

9.1 The Learned AR submitted that the sale is always between two parties and once there is no evidence either seized or gathered from the two parties then it would not only be highly improper but also unjust and arbitrary to assume undisclosed sales between the said party . He thus submitted that the figure of Rs. 83.76 crores is nothing but a figment of imagination and, contrary to the material placed on record. He submitted that, the reading of the material even relied upon would further establish that there is no material to suggest let alone conclude that there is understatement of consideration. The diary relied upon by the Assessing officer has absolutely no connection with whatever transactions entered into by assessee company. In other words, there is not even a single instance referred to by the Assessing officer in the order of assessment, which is based on concluded sales transaction. Therefore, in absence of any material to suspect let alone establish that any of the actual sales made by the appellant company had an element of understatement of consideration, the allegation remains totally and, wholly unsubstantiated and, as such the addition made is untenable, unwarranted and, unsustainable. The Learned AR submitted that, in the case of ACIT vs. Shailesh S Shah reported in 63 ITD 153 (Mum), it has been held that, burden is on the revenue to establish that loose papers constitute income of the assessee. Similarly, in the case of ITO vs. M.A. Chidambaram reported in 63 ITD 203 (Chennai), it has been held that, in the facts and circumstances of the case, the department had not brought any material or established any link between the papers that were seized from "N" and the business transaction of the assessee

9.2 The Learned AR contended that last but not the least even the statement recorded of Shri Salek Chand Garg on 7.1.2010 is behind the back of assesee and therefore perse the same cannot be relied upon as has been held in the following cases:

i) 125 ITR 713 (SC) Kishni Chand Chella Ram v CIT (pages 944-948 of JPB)

ii) 288 ITR 345 (Del) CIT vs. SMC Share Stock Brokers 11

iii) 293 ITR 43 (Del) CIT vs S M Aggarwal (pages 896-898 of JPB)

iv) 295 ITR 105 (Del) CIT vs. Dharam Pal Prem Chand Ltd

v) 303 ITR 95 (Del) CIT vs. Pradeep Kumar Gupta

vi) 315 ITR 265 (Del) CIT vs. M/s Jindal Vegetables Products Limited

vii) 306 ITR 227 (Del) CIT vs. Rajesh Kumar

9.3 The Learned AR further submitted that, the aforesaid material even otherwise and, in absence of any corroborative evidence found from the possession of the assessee company, cannot form basis for making any addition. In support to its contention, the Learned AR places reliance on the following judicial pronouncements:

i) 72 ITD 340 (Mum) D.A. Patel vs. DCIT

ii) 40 TTJ 668 (Ind) Brij Lal Rupchand vs. ITO

iii) 63 TTJ 532 at 535 (Delhi) S K Gupta vs. DCIT

9.4 The Learned AR humbly submitted further that no evidence has been brought on record by learned Assessing Officer to connect the seized documents with the assessee. Infact the Hon'ble ITAT in the case of Ashwani Kumar reported at 39 ITD 183 at page 193 has held that mere finding of dumb document cannot be made the basis for making any addition. It went on further to hold that unless the revenue is able to establish that document was in possession or control of the assessee no adverse inference could be drawn against such an assessee. He also placed reliance upon the case of Amarji Singh Bakshi (HUF) v ACIT reported in 263 ITR 75 (AT) (TM) (pages 828-868 of JPB).

9.5 The Learned AR submitted that, once the document is unsigned, it is merely a loose paper. In fact, it is settled law that, even if the document has been signed then too, if there is no corroborative evidence and such document has been found from the possession of third party and, there is no material to show that any money has been received, no income can be brought to tax. Reliance has been placed on the judgment of Hon'ble Delhi High Court in the cases of CIT vs. 12

Kulwant Rai reported in 291 ITR 36 and CIT vs, D.K. Gupta reported in 308 ITR

230.

9.6 The Learned AR also placed reliance on the decision in the case of CIT V Genesis Commet (P) Ltd reported in 163 Taxman 482 (Del), wherein it has been held that, an officer, if he was not inclined to believe the material placed by assessee he could have used coercive powers available to him. Infact, Hon'ble Delhi High Court in the case of CIT v Ved Parkash Chaudhary reported in 305 ITR 245 (pages 575-577 of JPB) wherein even where an MOU was found then too in view of the denial of the parties to the MOU, it was held that, no addition is tenable in view of the non-availability of the corroborative evidence. The case of the assessee is far stronger in as much as no MOU is found but unsigned paper have been found from the residential premises of former director of the appellant company. Infact, here too the appellant has denied receipt/payment of any money and, even the buyers of space in the projects have never alleged payment of any on money. Further, there is no corroborative evidence and, in such circumstances, the paper is a dumb document.

10. The Learned AR contended that it is settled law that no addition can be made on the basis of surmises, suspicion and conjectures. Reliance for this proposition is placed on the judgment of Hon'ble Apex Court in the case of Uma Charan Shaw & Bros. Co. vs. CIT reported in 37 ITR 271. It has been further held in the following cases that suspicion howsoever strong cannot take the place of proof:

a) 37 ITR 151(SC) Omar Salay Mohammad Sait vs. CIT b) 26 ITR 736 (SC) Dhirajlal Girdharilal vs. CIT c) 26 ITR 775 (SC) Dhakeshwari Cotton Mills Ltd. vs. CIT (pages 875-879 of JPB) d) 37 ITR 288 (SC) Lal Chand Bhagat Ambica Ram vs. CIT 13

Learned AR also placed reliance on the judgment delivered by Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla and Others reported in 3 SCC 410 (SC) (pages 537-550 of JPB) (arising out of SLP Crl. Nos. 1716 of 1997); wherein it was held that evidence to be used against accused should be evidence acceptable to process of law. An evidence, which is not found in possession of a person, cannot be used against him unless the evidence being used is supported by other concrete evidence.

11. Apart from the above it was submitted that even the gross profit rate adopted at 10% by the learned Assessing Officer and 5% by the learned CIT(A) is without any basis and therefore not tenable.

12. The Learned AR submitted that the declared profit in the instant year as manufacture sales alone is 1.24% (page 17 of CIT(A) order) and average profit is loss of 14.54% in all the four years namely Assessment years 2007-08 to 2010-11. This position is also confirmed from the result of the comparative companies tabulated at page 22 of CIT(A) order.

13. In such circumstances the submission of the Learned AR remained that on any of the ground the addition made is not tenable and unsustainable.

14. Without prejudice to the aforesaid, the Learned AR submitted that learned AO has applied a GP rate of 10% and learned CIT(A) has reduced such GP rate to 5% failing to appreciate that GP rate declared by the appellant in respect of manufacturing was merely 1.24% as such, if the GP rate has to be applied then it is the GP rate of 1.24% that has to be applied as such, addition sustained by the learned CIT(A) of Rs. 4,18,80,000/- is liable to be deleted. 14

15. The Learned CIT(DR) on the other hand tried to justify the

assessment order. He submitted that during the course of assessment

proceedings, the assessee company was required to explain the documents

found and seized in the course of search, to which the assessee has

thoroughly failed to, hence, the Assessing Officer was having no option but

to estimate the suppressed profit by applying g.p. rate of 10% on the

undisclosed sales of Rs.83.76 crores resulting into the addition of

Rs.8,37,60,000 on account of profit made on undisclosed sales by the

assessee company. The Learned CIT(DR) submitted that the statements

recorded during the course of search has got substantial value than the

retraction made later. He submitted that datewise payments has been

recorded in the diary seized. The Learned CIT(DR) pointed out that figure

of Rs.44.94 crores as undisclosed sales has been arrived at by adopting a rate

from the diary seized from Shri Salek Chand Garg and figure of Rs.38.82

crores on the basis that the assessee company had sold the goods outside the

books of account and profit earned on the sales was not reflected in the

books of account. He furnished tables stating that various figures from the

diary if are analyzed then they all indicate that there was unaccounted sales

of around Rs.38.82 crores. Thus, the total sales worked out to Rs.83.76

crores (Rs.38.82 + Rs.44.94). On the said amount of sales, a g.p. @ 10% is 15

computed resulting into profit of Rs.8,37,60,000 on account of undisclosed

sales.

16. Considering the above submissions, we find that the addition of

Rs.8,37,60,000 was made by the Assessing Officer on account of profit on

alleged undisclosed sales made by the assessee on the basis of Annexure-A1,

a diary containing pages 1 to 191 seized from the premises of Shri Salek

Chand Garg at Pitampura, Delhi. The Assessing Officer has also referred

statement of Shri Salek Chand Garg recorded on 07.01.2010 i.e. the date of

search. The Assessing Officer on the basis of the diary seized from the

premises of Salek Chand Garg computed the sales outside the books of

account and he noted that profit on sale of the aforesaid amount has not been

accounted for in the books of accounts, he estimated the profit by applying

gross profit rate at 10% of the sales amount. The Learned CIT(Appeals) has

held that the statement of Shri Salek Chand Garg recorded at the time of

search was spontaneous, hence, is more reliable and as such transaction

recorded in diary belong to the assessee. He, however, held that gross profit

rate applied by the Assessing Officer at 10% is excessive and he took the

gross profit of assessee @ 5% and deleted the addition of Rs.4,18,80,000

and sustained the addition of Rs.4,18,80,000.

16

17. On perusal of the facts relating to the issues raised in the grounds

under consideration, we find that following three sub-issues are to be

adjudicated upon to decide the main issue. These are (i) as to whether the

documents seized during the course of search and the statements recorded

during search and post-search was sufficient to draw an inference about

undisclosed sales? ; (ii) as to whether a profit can be estimated without

rejecting books of account with this finding that on the basis of the said

books of account, proper income cannot be adduced? ; & (iii) even if, it is

held that non-reliance on the books of account was justified, then as to

whether application of g.p. rate at 10% by Assessing Officer and 5% by

Learned CIT(Appeals) was reasonable to estimate the profit?

18. Sub-issue No. (i) : It is an admitted fact that Annexure A1, a diary

was seized from one Shri Salek Chand Garg from his premises and his

statements were recorded during the course of search and after search during

the course of assessment proceedings and based upon the same, the

Assessing Officer has worked out the undisclosed sales at Rs.83.76 crores.

In his statement recorded on 07.01.2010 i.e. during the course of search, Shri

Salek Chand Garg stated that diary belongs to him and he along with Shri 17

Sawarmal Goel used to work as commission agent of assessee and the

transaction recorded in the diary are the business transaction made on behalf

of the assessee. During the course of assessment proceedings, in his

statement recorded on 21.10.2011 by the Assessing Officer, Shri Salek

Chand Garg vide question No.2 was required to state his business and source

of income. In response, he stated that he is proprietor of M/s. Ashutosh Hot

Rerolling which is situated at B-31, Industrial Area, Wazirpur, New Delhi,

where he does job work. He replied further that he is also the proprietor of

Shivan Industries, Shahbad, Daultpur where he does job work. He replied

that these are his source of income and apart from the aforesaid, he sales and

purchases steel patra and sheets. Again in reply to question No. 11, whereby

he was required to explain transaction recorded in diary, he submitted that

mainly the transactions recorded in the diary are in cash and are incurred

with different entities/businessman. He replied that details thereof were not

possible as the persons who transact in cash, particulars of that person are

not recorded as the same are not required to be recorded. We thus find that

in his statement recorded under sec. 131 of the Act Shri Salek Chand Garg

has not stated that he has any business connection with the assessee. He

stated that transaction recorded in the diary belongs to him and were cash

transactions entered with different entities/businessman. He also stated 18

during the assessment proceedings that he never stated that he worked as

commission agent for the assessee and transaction recorded in the diary

pertained to sale and purchase made on behalf of the assessee. Shri Vijay Pal

Garg, director of the assessee in his statement recorded on 16.3.2010 has

stated that he does not have any business relation with Shri Salek Chand

Garg, however, assessee has business relation with Shri Sawar Mal Goel

who sells the goods of the assessee in Bhiwani on commission. It was

specifically stated by him that Shri Sawmar Mal Goel collects the payment

from the parties and sends the cheques to the assessee and in consideration

to the aforesaid, commission was paid to Shri Sawmar Mal Goel by cheques

and TDS was also deducted.

19. It is an established proposition of law that entries found recorded in

the books of account of third party or statement recorded under sec. 132(1)

of the Act or 131 of the Act of a third party are binding upon him in his own

case only and the same cannot be foisted upon the other party in the absence

of sufficient corroborative material, more particularly, when such third party

do not admit any business relationship with the assessee. The statutory

presumption under sec. 132(4A) of the Act cannot be raised against the

assessee in respect of the entries recorded in the said diary found from the

premises from Shri Salek Chand Garg but against the Shri Salek Chand Garg 19

consequent to search. There is no any evidence or material to corroborate the

entries of the diary and thus the transactions recorded in the diaries cannot

be made the sole basis of addition in the hands of the assessee. Hon'ble

Supreme Court in the case of CBI vs. V.C. Shukla (supra) has been pleased

to hold that an evidence which is not found in the possession of a person

cannot be used against him unless the evidence being used is supported by

other concrete evidence. When the Revenue in the present case sought to

rely upon the statement of Shri Salek Chand Garg and diary found from his

possession, the burden was on the Revenue to produce Shri Salek Chand

Garg for cross examination of the assessee and the addition made without

affording this opportunity of cross examination to the assessee, is in

violation of principles of natural justice. It is also noted that the allegation

of the Assessing Officer that the assessee has affected sales to the magnitude

of Rs.83.76 crores outside its books of account is approximately 12% of the

declared sales but no evidence in support either in the shape of unexplained

cash or unexplained investment or material has been found from the

premises of the assessee company as a result of search. The entire stock

found in the course of the search was duly reconciled with the books of

account. The entire sales as made by the assessee during the year aggregate

to Rs.699.73 crores and sale of manufactured goods is of Rs.257.51 crores 20

and the quantity-wise details furnished by the assessee have been accepted

as such. Not a single party has been examined before drawing adverse

inference regarding undisclosed sales made by the assessee. It is also worth

noting that the sale is always made between the two parties and once there is

no evidence either seized or gathered from the two parties then it would not

only be highly improper but also unjust and arbitrary to assume undisclosed

sales between the said parties. We are thus of the view that the seized diary

during the course of search and the statements of Shri Salek Chand Garg

recorded during the course of search and post-search was not sufficient to

draw an inference about the alleged undisclosed sales dehors corroborative

evidence supporting the third party statements and the entries recorded in the

diary found from the possession of the third party during the course of

search. The sub-issue No. (i) is accordingly decided in favour of the

assessee.

20. Sub-issue No. (ii): The contention of the Learned AR remained that

the entire addition is based on presumption. The assessee has maintained

complete books of account, which are audited, the goods manufactured and

sold by the assessee are excisable and no defects has even been found by

Excise Authority. The VAT Authorities have accepted the turnover declared

by the assessee. The entire stock found in the course of search was duly 21

reconciled with the books of account. It was submitted that entire sales as

made by the assessee during the year aggregate to Rs.699.73 crores out of

which the sale of manufactured goods is of Rs.257.51 crores. The quantity-

wise detail was maintained and has been accepted as such. The sales have

been made to the identifiable and verifiable parties and no evidence has been

gathered post-search to unaccounted sales. It was also contended that not a

single party has been examined before drawing adverse inference.

21. In our view, it is a settled position of law that estimation of profit by

applying a reasonable g.p. rate can be adopted and applied only when it is

not possible for the Assessing Officer to deduce the profit of the assessee on

the basis of books of accounts produced by the assessee. In such a situation,

the Assessing Officer will have to afford opportunity of being heard to the

assessee to meet out the defects pointed out by the Assessing Officer in the

books of account and if the Assessing Officer is not satisfied with the

explanation of the assessee to those defects pointed out by the Assessing

Officer, then the Assessing Officer will reject the books of account by

invoking the provisions of sec. 145(3) of the Act and will estimate the profit.

In the present case, in view of the above finding on sub-issue No.(i), the

Assessing Officer was having no reason to reject the books of account of the 22

assessee, hence, he was not justified to jump on the second step for

estimation of the profit by applying different g.p. rate than that shown by the

assessee. The sub-issue No.( ii ) is thus decided in favour of the assessee.

22. Sub-issue No.(iii): No plausible reason has been assigned by the

Assessing Officer for application of g.p. rate at 10% nor has the Learned

CIT(Appeals) assigned any convincing reason for applying the g.p. rate at

5% of the turnover. The g.p. rate declared by the assessee in respect of

manufacturing was 1.24%. Also keeping in mind the above findings on other

sub-issues, the issue is decided in favour of the assessee.

23. In totality of the above discussion, the Assessing Officer was not

justified in making the addition of Rs.8,37,60,000 on account of profit on the

alleged undisclosed sales made by the assessee. The Learned CIT(Appeals)

was thus not right in sustaining the addition even by restricting it by

applying g.p. rate at 5% against 10% applied by the Assessing Officer. We

thus while setting aside orders of the authorities below in this regard direct

the Assessing Officer to delete the addition of Rs.4,18,80,000 sustained by

the Learned CIT(Appeals). The ground Nos. 1, 1.1 to 1.5 of the appeal 23

preferred by the assessee on the issue are thus allowed and ground No. 2 of

the appeal preferred by the Revenue is thus rejected.

24. Ground Nos. 2, 2.1 to 2.4 (Assessee ) & Ground No.3 (Revenue): The

Assessing Officer made addition of Rs.17,69,98,750 on account of

unexplained investment in stock. The Learned CIT(Appeals) has sustained

the addition to the extent of Rs.6,62,35,000, thus the parties are in appeals.

25. In support of the ground of the Revenue, the Learned CIT(DR) placed

reliance on the assessment order with this contention that the Assessing

Officer was justified in making the addition in question on account of

unexplained investment in stock with this observation that there was

difference of Rs.17,69,98,750 in the valuation of stock as per bank statement

furnished to the bank and the stock as per stock register seized as page Nos.

1 to 119 of annexure A-9 and annexure A-35. He placed reliance on the

decision of Hon'ble Punjab & Haryana High Court in the case of B.T. Steels

Ltd. vs. CIT (2011) - 196 Taxmann 362 (P&H) holding that the ITAT was

justified in sustaining the addition made by the Assessing Officer on account

of unexplained investment in stock on the basis of difference of stock shown

by the assessee hypothecated by the bank and the stock shown in the

assessee's books of account.

24

26. The Learned AR on the other hand tried to justify the First Appellate

Order on the issue. He submitted that the Learned CIT(Appeals) has noted

the break-up of the stocks as declared to the bank and stock register as well

as the difference in respect of raw-material only in quality of six items out of

twelve items and that there was no difference in rates. The variation in

quantity of raw-material of six items was imaginary to obtain credit facility

from bank on account of financial crises. The Learned AR submitted that

there was no difference in the stock on the date of search and the stock was

not pledged with the bank but only hypothecated to bank. Learned AR

contended that the stock statement given to the bank cannot be a basis to

assume unexplained investment in stock and placed reliance on the

following decisions:

i) Ashok Kumar vs. ITO - 201 CTR 178 (J&K); ii) Relaxo Footwear - 259 ITR 744 (Raj.); iii) Sidho Rice & General Mills - 281 ITR 428 ( P&H); iv) CIT vs. Veertip Rollers (P) Ltd. - 323 ITR 341 (Guj.); v) CIT vs. Acrow India Ltd. - 298 ITR 447 (Bom.); vi) CIT vs. Das Industries - 303 ITR 199 (All.);

vii) CIT vs. Apcom Computers (P) Ltd.- 292 ITR 630 (Chennai);

27. The Learned AR submitted further that the Assessing Officer had also

referred to annexure A1 (diary) seized from Shri Salek Chand Garg. On the 25

basis of the diary, he observed that there is unexplained investment in stock

of Rs.11,97,85,000 which was not separately being made as it was covered

by the addition of Rs.17,69,98,750. The Learned CIT(Appeals) has dealt

with this issue at page Nos. 35 to 40 of the First Appellate Order. He

submitted further that complete books of account are duly supported by

stock register maintained by the assessee company which was audited as per

the Company's Act, 1956. No defect has been pointed out in the books of

account nor any incriminating material has been detected during the course

of search to show unexplained investment in stock and the physical stock

found during the course of search has been duly tallied with the stock record

of the assessee. He submitted that the closing stock as on 31.3.2010 has been

accepted as such. The Excise Authorities and VAT Authorities have

accepted the stock declared by the assessee company. The books of third

party alone cannot be a basis to presume that there was unexplained

investment in stocks, particularly when nature of stock was also not known,

where it was kept. It is also contrary to the statements of the persons from

whose possession diary had been seized by the Revenue. He had also not

alleged that he was in possession of any stock of the assessee.

28 The Learned AR submitted further that the Learned CIT(Appeals) was

not justified in sustaining the addition of Rs.6,62,35,000 out of the addition 26

of Rs.17,69,98,650 made on account of unexplained investment in stock. He

submitted that the Learned CIT(Appeals) has held that the stocks as on 1.4.2009

of 1324.70 MT is unexplained investment, which perse is a misnomer. It was submitted

that this conclusion is based on the page 177-178 of diary which has been tabulated at

page 38 of the order of learned CIT(A). It is submitted that, the learned CIT(A) has

failed to appreciate that once closing stock of 31.3.2009 stands accepted in an order u/s

143(3) of the Act then there can be no unexplained investment in opening stock. The

relevant evidences are as under:

i) Audited financial statements as on 31.3.2009 (pages 231-278 of Paper Book)

ii) Order of Assessment for Assessment for Assessment Year 2009-10 (pages 767-769 of Paper Book) Reliance has also been placed on the following judgments in support of the contention that if closing stock is accepted then opening stock cannot be distributed:

i) 318 ITR 204 (SC) V. K. J. Builders and Contractors Pvt. Ltd. vs. CIT

ii) 318 ITGR 116 (Bom) CIT vs. Mahalaxmi Glass Works (P) Ltd.

iii) 324 ITR 406 (P&H) CIT vs. Punjab State Warehousing Corporation

iv) 278 ITR 213 (All) CIT vs. Indian National Tannery Pvt. Ltd.

v) 63 ITR 51 (All) Ram Luxman Sugar Mills vs. CIT vi) 202 ITR 789 (Bom) Melmould Corporation vs. CIT j) That closing stock as on 31.3.2009 in any case cannot be added as

unexplained investment for Assessment year 2010-11 as its is then unexplained investment for Assessment year 2009-10, as has been held in the case of CIT vs. Om Prakash Mahajan reported in 152 ITR 583 (Del) 27

k) That even otherwise the closing stock having been accepted, it has to be held that such stock was sold and therefore there was loss and, as such no addition is untenable. This was held by the judgment of Hon'ble Delhi High Court in the case of J.M. Wire Inds. Vs. CIT in ITA No. 96/1989 dated 15.7.2010

4.4 In view of the aforesaid, the addition sustained of Rs. 6,62,35,000/- may

kindly be deleted, argued the Learned AR.

29. Considering the above submissions, we find that the Assessing Officer

has dealt with the issues in para Nos 5 to 7 at page Nos. 18 to 22 of the

assessment order and has made the addition in the following manner:

Sr. Particulars Amount (Rs.) No. i) Valuation of stock as per bank statement furnished 27,43,33,861 to bank (page 18 para 5 of order) ii) Valuation of stock as per stock register, seized as 9,73,35,111 pages 1-119 of Annexure A-9 and Annexure A-35 (page 19 of order) Addition 17,69,98,750-

30. The Learned CIT(Appeals) has dealt with the issue in para Nos. 6.5.1

to 6.5.4 at page No. 30 to 34 of the First Appellate Order while deleting the

addition of Rs.11,69,98,750 out of Rs.17,69,98,750 made by the Assessing

Officer on account of unexplained investment. The Learned CIT(Appeals)

has noted the break up of the stocks as declared to the bank and stock

register as under:

28

Sr. Particulars Amount (Rs.) Stock Difference No. Register i) Finished goods 1,10,95,230 1,10,95,230 Nil ii) Raw Materials 24,29,50,221 6,59,51,471 17,59,98,750 iii) Stores Spares 2,02,88,410 2,02,88,410 Nil Total 27,43,33,861 9,73,35,111 17,69,98,750

31. In respect of raw material, the Learned CIT(Appeals) noted that the

difference was only in quality of six items out of twelve items and therein no

difference in rates was there as evident from the following chart:

Sr. Particulars Rate Quantity Difference No. (Rs.) Bank statement Stock Register (MT) (MT) TALLIED i) Scrap 18,200 1680 1680 3,05,76,000 ii) Silicon Manganese 49,000 44.70 44.70 21,90,300 iii) Flourspar 21,500 153.40 153.40 32,98,100 iv) Dolomite 2,800 45.00 45.00 1,26,000 v) Lime 2500 108.00 108.00 2,70,000 vi) Met Coke 4625 23.00 23.00 1,06,375 Sub Total (A) 3,65,66,775

Sr. Particulars Quantity Bank statement Stock Difference No. Register Quant Value ity NOT TALLIED i) S S Scrap 360000 551.10 51.10 500 1,80,00,000 ii) HC Ferro Charome 43300 1110.00 110.00 1000 4,33,00,000 iii) Ferro Maganese 1 45250 896.00 43.00 853 3,85,98,250 iv) Ferro Silicon-NE 56000 1140.00 140.00 1000 5,60,00,000 v) Copper 278810 68.365 18.365 50 1,39,40,500 vi) Nickle 716000 21.00 11.00 10 71,60,000 Sub Total (B) 17,69,98,750 GRAND TOTAL 17,69,98,750 (A+B) 29

32. The Learned CIT(Appeals) thereafter has held that variation in

quantity of raw material of six items was imaginary to obtain credit facility

from bank on account of accounts financial crises. He also held that there

was no difference in stock on the date of search and that the stock has not

been pledged with the bank but only hypothecated to bank as such stock

statement given to bank cannot be a basis to assume unexplained investment

in stock. In this regard, he placed reliance on several decisions. We also find

that on the issue, there are several decisions in favour of the assessee as well

as the Revenue. In such a situation, it is now a well settled position of the

law that in absence of decision of Hon'ble jurisdictional High Court on the

issue, the decision favoring the assessee will have to be followed. The

finding of the Learned CIT(Appeals) on the issue following the decision in

favour of the assessee thus cannot be held erroneous. The same is upheld.

Ground No. 3 of the Revenue is accordingly rejected.

33. So far as addition of addition of Rs.6,62,35,000 sustained by the

Learned CIT(Appeals) is concerned, the Assessing Officer on the basis of

diary i.e. Annexure A1, seized from Shri Salek Chand Garg observed that

there was unexplained investment in stock worth Rs.11,97,85,000 which was

not separately added as it was covered by the addition of Rs.17,69,98,750. 30

The Learned CIT(Appeals) observed that the Assessing Officer has

furnished two accounts extracted from the seized diary of Shri Salek Chand

Garg. One account pertained to page No. 179-184 of the diary and the other

account pertains to page No. 177 and 178 of the diary. The Learned

CIT(Appeals) has reproduced these two accounts in tabulated form marked

as Table-I and Table-2. On comparison of both the tables, the Learned

CIT(Appeals) observed that table-I contends the peak maximum stock as on

22.6.2009 of 1020 MTs @ Rs.52.50 per kg. totaling to Rs.5,35,50,000 and

table-2 contends the peak as on 01.04.2009 of 1324.7 MTs. @ 50 per kg.

totaling to Rs.6,62,35,000. The Learned CIT(Appeals) has further observed

that while calculating the peak investment in the stock, the Assessing Officer

has taken the peak figure of stock from both the accounts which is not

justified because data of table-1 and table-2 almost relates to same

transaction and tallied datewise. Therefore, either of the two tables is to be

considered for peak investment in stock. It was found that maximum stock

was available as on 01.04.2009 for 1324.7 MTs as per table-2. After

comparing both the tables, the Learned CIT(Appeals) took peak figure of

table-2 as peak investment in stock worth Rs.6,62,35,000. The Learned

CIT(Appeals) was thus of the view that no addition is called for on the basis

of imaginary figure of stock given to the bank where there was no difference 31

found in stock at the time of search, however, peak investment in stock for

Rs.6,62,35,000 is liable for addition. The Learned CIT(Appeals) observed

further that the two tables show variation in rates over a period of time. The

rates for arriving at peak figure have thus been taken of as of the date on

which maximum stock was available. He, therefore, restricted the addition of

Rs.17,69,98,750 on account of undisclosed stock to the amount of peak

investment of Rs.6,62,35,000. We, however, find substance in the

contention of the Learned AR against the sustenance of the addition of

Rs.6,62,35,000 made by the Learned CIT(Appeals) that once closing stock

as on 31.3.2009 has been accepted in the assessment order framed under sec.

143(3) of the Act, there cannot be unexplained investment in opening stock.

In support, the assessee has furnished audited financial statement as on

31.3.2009 as well as assessment order for the assessment year 2009-10.

Copies of these audited financial statement and assessment order have been

made available at page Nos. 231 to 278 of the paper book and page Nos. 767

to 769 of the paper book respectively. We also concur with the contention of

the assessee that books of third party alone cannot be a basis to presume that

there was unexplained investment in stocks, particularly when nature of

stock is also not known, where it was kept. It is also not the case of the

Revenue that Shri Salek Chand Garg was in possession of any stock of the 32

assessee. The conclusion of the Learned CIT(Appeals) that stocks as on

01.04.2009 of 1324.70 MTs is based on page Nos. 177 to 178 of the diary,

tabulated at page No. 31 of the First Appellate Order, per se is a misnomer.

The closing stock as on 31.3.2009 in any case cannot be added as

unexplained investment for the assessment year under consideration as in

that case it will be amounting to unexplained investment for the assessment

year 2009-10, especially when the closing stock of that assessment year was

accepted. In this regard, we find support from the cited decision of Hon'ble

Delhi High Court in the case of CIT vs. Om Prakash Mahajan (supra) and in

the case of J.M. Wire Industries vs. CIT (supra). The addition of

Rs.6,62,35,000 sustained by the Learned CIT(Appeals) is thus not tenable.

The same is directed to be deleted. The ground No. 3 of the appeal preferred

by the Revenue is thus rejected and ground No. 2, 2.1 to 2.4 are allowed.

34. Ground No.4 (Revenue) and Ground No.3(Assessee): The Assessing

Officer on the basis of the documents seized from the official premises of

the assessee observed that the said official premises was purchased from one

Shri Saroj Bala Gupta on 17.12.2009 for the consideration of Rs.28,25,000.

The circle rate at which the sale deed was registered was Rs.49,85,010

whereas the assessee had shown payment made to the tune of Rs.28,25,000. 33

The Assessing Officer thus drew an inference that certain cash payments

have been made by the assessee as actual sales price was mentioned less

than the registered value of the property. In course of search, a valuation

report of the property was also found and seized in which value of the

property was mentioned as Rs.2,33,16,750. The Assessing Officer

accordingly held that assessee company had paid balance amount to the

seller in cash outside the books of account by utilizing unaccounted income

for the assessment year under consideration and held the investment as

undisclosed investment within the provisions of sec. 69 of the Income-tax

Act, 1961.

35. The assessee contended above action of the Assessing Officer with

this submission that the Assessing Officer has applied the provisions of sec.

50C of the Act on the buyer, whereas the said provisions will always be

applicable on the seller of the property and that of the report shown by the

valuer found during the course of search which was meant for submission to

the bank to avail the credit facility and without any corroboration. The

Learned CIT(Appeals) accepted the contention of the assessee that the

valuation report found during the course of search meant for submission to

the consortium of banks to avail the credit facilities showing the value of the 34

property at Rs.2,33,16,750 as on 28.7.2009, cannot be a basis to accept the

said value of the property in absence of finding of incriminating papers

relating to the transaction of cash or otherwise or any other corroborative

evidence to support. The Learned CIT(Appeals) has, however, adopted the

cost of construction shown at Rs.39,66,750 in the said valuation report as

based on CPWD/Govt. approved schedule of rates and the value of the land

as per circle rate. The Learned CIT(Appeals) added the above stated two

values i.e. value of the construction on the land and value of the land as per

circle rate as total value of the property and worked out the amount in

difference at Rs.61,26,760 in view of the value of the property shown in the

agreement to sale at Rs.28,25,000.

36. In support of the ground No.4 of the appeal preferred by the Revenue,

the Learned CIT(DR) has basically placed reliance on the assessment order

with the submission that the Learned CIT(Appeals) was not justified in

interfering with the value of the property adopted by the Assessing Officer

as the same was based upon the value shown in the valuation report found

during the course of search from the official premises of the assessee. The

AR on the other hand reiterated the submissions made before the authorities

below in this regard. He submitted that no evidence was found during the 35

course of the search or gathered during the assessment proceedings to allege

unexplained investment in property. On the other hand, there were sufficient

evidence on record to support his submissions that no investment over and

above the declared consideration was made by the assessee. These evidences

were ledger account of Smt. Saroj Gupta from whom the assessee had

purchased the property, showing payment by account payee cheques dated

20.7.2005 and 25.11.2009 ( page Nos. 335 and 336 of the paper book); bank

statements showing remittances (page Nos. 337 and 338 of the paper book);

agreement to sell dated 20.7.2005 (page Nos. 330 to 334 of paper book),

wherein clause 12 specifically provides that vendor is to obtain consent from

husband, sons and daughters before sale deed; and sale deed dated

17.12.2009 ( page Nos. 345 to 352 of the paper book).

37. The Learned AR submitted further that in case of a buyer, circle rate

cannot be made a basis to allege unexplained investment in property under

sec. 69 of the Act and placed reliance on the following decisions:

a) 256 CTR 371 (Del) CIT vs. Khoobsurat Resorts (P) Ltd.;

b) 323 ITR 510 (P&H) CIT vs. Chandni Bhuchar; c) 220 Taxman 112 (Guj) (Mag) CIT vs. Sarjan Realities Ltd. ; d) 217 Taxman 35 (Guj (Mag) CIT vs. Meghjibhai Popatbhai Virani; e) 138 ITD 255 (Ahd) DCIT v. Virjibhai Kalyanbhai Kukadia; f) 38 SOT 486 (Ahd.) ITO v. Harley Street Pharmaceuticals Ltd. 36

38. The Learned AR contended further that valuation report dated

28.7.2009 also cannot be relied upon as admittedly it was for bank purpose

and is prior to sale dated 17.12.2009. The fact that the report mentioned that

property was under sale ownership is also incorrect, as the property had not

vested with the assessee and payment of Rs.20 lacs was outstanding. The

Learned CIT(Appeals) has also noted that the rate of land adopted for

valuation at Rs.90,000 per sq. yd. is not even the rate as per "A" category

whereas property is in "D/E Category". Even otherwise, valuation report

cannot be made the basis of addition, particularly when books have been

accepted and there is no material to disbelieve the sale deed. He placed

reliance on the following decision in support:

a) 328 ITR 516 (Del) CIT v. Naveen Gera; b) 328 ITR 604 (Del) CIT v. Smt. Suraj Devi; c) 338 ITR 485 (Del) CIT v. Puneet Sabharwal; d) 328 ITR 7 (Del) CIT v. I.P. Chaudhari e) 294 ITR 143 (Del) CIT v. Ashok Khetrapal f) 196 Taxman 415 (Del) CIT v Mahesh Kumar g) ITA 1104/2011 High Court of Delhi CIT v Arvind Khanna h) ITA 482/2010 dated 05.05.2010 CIT v Vinod Singhal i) 357 ITR 671 (Del) CIT vs. Lahsa Construction (P) Ltd. j) 352 ITR 595 (Del) CIT vs. Sadhna Gupta k) ITA No. 3760/D/2011 A.Y. 2003-04 dated 11.4.2014 ACIT vs. Rashmi Chaturvedi

39. The Learned AR contended further that under sec. 69 of the Act, the

burden is upon the Revenue to establish that the assessee had made 37

investment, which burden remained to be discharged. Thus, it was not

permissible in law to draw adverse inference against the assessee. In support,

he cited the following decisions:

a) 131 ITR 597 (SC) K.P. Varghese v. ITO b) 316 ITR 46 (Del) CIT v. Shakuntala Devi; c) 335 ITR 572 (Del) CIT v. Bajrang Lal Bansal d) 261 ITR 664 (Del) CIT vs .Naresh Khattar (HUF);

40. The Learned AR submitted further that even the addition sustained by

the Learned CIT(Appeals) partly relying upon the circle rate and the

valuation report is also unsustainable.

41. Considering the above submissions and having gone through the

decisions relied upon, we concur with contention of the Learned AR that

provisions laid down under sec. 50C of the Act are not applicable in the case

of buyer and the valuation report in absence of corroborative evidence in

support cannot be the sole basis to arrive at a conclusion beyond doubt that

the value shown therein was invested by the assessee to purchase the

property in question. It is also an established position of law that a document

is reliable or unreliable in its entirety. The Learned CIT(Appeals) was thus

not justified in relying upon the valuation report only for the purpose of the

value of construction raised on the property shown in the said valuation

report. On the other hand, we find that the evidence filed in the shape of 38

agreement, sale deed, remittance of the accounts from the ledger as well as

bank account were sufficient evidence to accept sale consideration shown in

those documents. The Assessing Officer was thus not justified in making

addition solely on the basis of valuation report and the Learned

CIT(Appeals) was also not justified in sustaining the part addition partly on

the basis of the valuation and applying the provisions of sec. 50C of the Act

in the case of buyer. The addition made and sustained by the authorities

below on the account of undisclosed investment in the property is thus

directed to be deleted. The ground No.4 preferred by the Revenue is rejected

and ground No. 3 and 4 of the appeal of the assessee are allowed.

20. In ground No. 5 of the assessee, charging of interest under sec. 234B

of the Income-tax Act, 1961 has been questioned which is consequetial in

nature hence does not need independent adjudication.

19. In result, appeal preferred by the Revenue is dismissed and that

preferred by the assessee is allowed.

Decision pronounced in the open court on 18 .05.2015

Sd/- Sd/-

( B.C. MEENA ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 18/05/2015 Mohan Lal 39

Copy forwarded to:

1) Appellant

2) Respondent

3) CIT

4) CIT(Appeals)

5) DR:ITAT

ASSISTANT REGISTRAR

Date Draft dictated on computer 05.05.2015 Draft placed before author 06.05.2015 Draft proposed & placed before the second member

Draft discussed/approved by Second Member. 18.05.2015 Approved Draft comes to the Sr.PS/PS 22.05.2015 Kept for pronouncement on 18.05.2015 File sent to the Bench Clerk 22.05.2015 Date on which file goes to the AR Date on which file goes to the Head Clerk.

Date of dispatch of Order.