Shri Hari Poddar, Erode V. ACIT, Coimbatore

CO 38/CHNY/2006

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2947 (ITAT-CHENNAI)
• Duration Of Justice: 11 year(s) 3 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 08-02-2006
• Court: TRIBUNAL
• Department Lawyers: PARASHIVAIAH
• Assessee Lawyers: K RAGHU
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Loose papers; Peak credit; Period of limitation; Block assessment; Time period of passing order; Documents seized
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER IT(SS)A NOS. 166/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) HARI PODDAR, 32, OTTUKKARA CHINNIAH STREET, ERODE 638003. PAN AATPH7611P ( /APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( / RESPONDENT) IT(SS)A NOS. 171/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) AND CO NO.38/MDS/2006 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( /APPELLANT) V. HARI PODDAR, ERODE 638003. ( RESPONDENT/CROSS OBJECTOR) IT(SS)A NO. 164/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) HARI PODDAR & OTHERS, L/H OF SMT. PRATHIBA PODDAR, 32, OTTUKKARA CHINNIAH STREET, ERODE 638003. PAN AGGPP0944E ( /APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( / RESPONDENT) - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 2 IT(SS)A NOS. 170/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) AND CO NO. 37/MDS/2006 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( /APPELLANT) V. HARI PODDAR & OTHERS, L/H OF SMT. PRATHIBA PODDAR, ERODE - 638003. ( RESPONDENT/CROSS OBJECTOR) IT(SS)A NO. 165/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) M/S. NANI AGRO FOODS PVT. LTD., 32, OTTUKKARA CHINNIAH STREET, ERODE 638003. PAN AAACN666OQ ( /APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( RESPONDENT) IT(SS)A NO. 169/MDS/2005 BLOCK PERIOD : 1997-98 TO 2003-04 (UPTO 8.8.2002) AND CO NO. 36/MDS/2006 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV, COIMBATORE. ( /APPELLANT) V. M/S. NANI AGRO FOODS PVT. LTD., 32, OTTUKKARA CHINNIAH STREET, ERODE 638003. ( RESPONDENT/ CROSS OBJECTOR) ASSESSEE BY : SHRI K. RAGHU, CA DEPARTM ENT BY : SHRI PARASHIVAIAH, CIT / DATE OF HEARING : 27.02.2017 !'# / DATE OF PRONOUNCEMENT: 24.05.2017 - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 3 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS AND CROSS OBJECTIONS ARE FILED BY T HE ASSESSEE AND BY THE REVENUE. SINCE ISSUES INVOLVE D IN ALL THESE APPEALS ARE COMMON IN NATURE, THESE APPEALS ARE CLU BBED TOGETHER, HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2. IN ALL THESE ASSESSEES APPEALS, COMMON LEGAL IS SUE IS WITH REGARD TO FACT THAT THE ASSESSMENT ORDERS DATED 21. 10.2004 ARE BARRED LIMITATION AS THE ASSESSMENTS OUGHT TO HAVE BEEN COMPLETED ON OR BEFORE 31.08.2004 IN TERMS OF SEC.158BE OF TH E ACT. 3. THE FACTS OF THE ISSUE ARE THAT THE BUSINESS PRE MISES OF THESE CONCERNS LOCATED AT DIFFERENT PLACES IN ERODE AS WE LL AS THE RESIDENTIAL PREMISES OF SHRI HARI PODDAR AND HIS FA MILY MEMBERS LOCATED AT 9, GANDHI NAGAR, ERODE WERE SEARCHED U/ S.132 OF THE ACT FROM 08.08.2002 ONWARDS. THERE WERE TWO SETS OF WA RRANT OF AUTHORIZATION WERE ISSUED U/S.132 OF THE ACT, THE F IRST ONE ON 19/7/2002 AND THE SECOND ONE WAS ON 8/8/2002. IN T HESE CASES, - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 4 SEARCH WAS CONCLUDED ON 01.10.2002 AND ACCORDINGLY, LAST PANCHANAMA WAS DRAWN. CONSEQUENTLY, THE ASSESSMENT ORDERS WERE FRAMED IN THESE CASES ON 21.10.2004. 3.1 THE LD. AR SUBMITTED THAT THE TIME LIMIT U/S.1 58BE FOR COMPLETION OF BLOCK ASSESSMENT, IN ALL THESE CASES, EXPIRED ON 31.08.2004, AS NO OTHER FRESH WARRANT WAS EXECUTED AFTER 08.08.2002, IN THE CASE OF ANY OF THE THREE APPELLA NTS, IS A FACT NOT DISPUTED BY THE REVENUE, BUT ONLY CONFIRMED BY THE PAPER BOOK CONTAINING NUMBER OF PANCHANAMAS, WITH ANNEXURES, F ILED BY THE LD. DR BEFORE THE HONBLE BENCH. 3.2 FURTHER, THE LD. CIT(APPEALS) HAS HELD THAT IN THE CASE OF MR.HARI PODDAR, THE SEARCH WAS CONCLUDED ON 03.10.2 002, ON THE BASIS OF COPY OF PANCHANAMA PLACED AT PAGE 99 OF TH E PAPER BOOK. THE SUBMISSION OF THE LD. A.R BEFORE LD.CIT(A) WAS THAT THERE WAS NO SEARCH BASED ON A FRESH WARRANT OF AUTHORIZATION ON 03.10.2002 AND 01.10.2002, AS THE CASE MAY BE, FOR RECOGNIZING THOSE PANCHANAMAS, AS THE RELEVANT PANCHANAMA FOR THE PUR POSE OF SEC.158BE READ WITH EXPLANATION 2. IT IS CURIOUS T O NOTE THAT IN BOTH THE PANCHANAMAS DATED 03.10.2002, RELIED ON IN THE CASE OF MR.HARI - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 5 PODDAR BY THE LD.CIT(A) AND IN THE CASE OF OTHER TW O, THE PANCHANAMA DATED 01.10.2002, THE ASSESSING OFFICER HAS CONFIRMED THE ABSENCE OF FRESH WARRANT OF AUTHORIZATION TO SE ARCH THE PREMISES ON THOSE DATES AND THEREFORE, THE RELIANCE PLACED B Y THE LD.CIT(A) ON THOSE TWO WARRANTS FOR PURPOSE OF SEC.158BE IS UNTE NABLE. FURTHER, THE TIME OF COMMENCEMENT OF SEARCH IS NOTED AS 12.3 0PM ON 03.10.2002 AND CLOSED AT THE SAME TIME, AND ON 01.1 0.2002, THE COMMENCEMENT IS NOTED AS 11.20AM AND ITS CONCLUSION AT 11.50AM. THE LD. A.R SUBMITTED THAT THE LAW IS CLEAR THAT IN THE ABSENCE OF A FRESH WARRANT OF AUTHORIZATION, THERE CAN BE NO SEA RCH OF THE PLACE AT ALL AND THE PANCHANAMA RECORDING THE REVOCATION OF THE PO CANNOT BE CONSIDERED, AS THE PANCHANAMA RELEVANT UNDER EXPLAN ATION 2 TO SEC.158BE, AS HELD BY THE JURISDICTIONAL HIGH COURT . 3.3 THE LD. A.R SUBMITTED THAT THE DECISION OF LD. CIT(A) IS NOT SUSTAINABLE, IN THE LIGHT OF DECISION OF JURISDICTI ONAL HIGH COURT IN THE CASE OF A.RAKESH KUMAR JAIN VS. JCIT IN TAX CASE (A PPEAL) NO.1240 OF 2006 DATED 25.09.2012. THE LD. A.R SUBMITTED TH AT THE ABOVE SAID DECISION WAS FOLLOWED BY THE CHENNAI TRIBUNAL IN IT (SS)A NO.55/MDS./2007, IT(SS)A NO.56/MDS./2007 AND IT(SS) NO.76/MDS./2007 DATED 14.02.2013. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 6 3.4 FURTHER, THE LD.A.R PLACED RELIANCE ON THE FOL LOWING JURISDICTIONAL HIGH COURT CASE LAWS:- I) IN THE CASE OF A.RAKESH KUMAR JAIN VS. THE JCIT IN TAX CASE (APPEAL) NO.1240 OF 2006 VIDE ORDER DATED 25.09.201 2. II) IN THE CASE OF D.C VS. RAKESH SARIN IN 41 TAXM ANN.COM 114. 4. THE LD. DR SUBMITTED THAT TWO SETS OF WARRANT OF AUTHORIZATION WERE ISSUED U/S.132 OF THE ACT, THE FIRST ONE ON 19 /7/2002 AND THE SECOND ONE WAS ON 8/8/2002. THE ASSESSMENT WAS COM PLETED ON 21.10.2004. IT IS CONTENDED BY THE ASSESSEE A) THAT THE WARRANT OF AUTHORIZATION ISSUED ON 8/8/ 2002 BEING THE LAST OF THE AUTHORIZATION FOR DETERMINATION OF TIME LIMIT U/S.158BE, ONLY SHOULD BE RECKONED; B) THAT THE LAST PANCHANAMA DRAWN ON 3/10/2002 WAS A NULLITY AS NO ACTION WAS TAKEN ON THAT DAY EXCEPTING UNNECESSA RILY EXTENDING THE DATE OF SEARCH FOR THE PURPOSE OF EXT ENDING THE TIME LIMIT FOR THE COMPLETION OF SEARCH ASSESSMENT AND C) THAT THE FINAL PANCHANAMA WAS VALIDLY DRAWN IN R ESPECT OF THE LAST OF THE AUTHORIZATION WAS ON THE CONCLUSION OF THE SEARCH AT 72, KANDASAMY STREET, ERODE ON 9/8/2002. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 7 AND THEREFORE, IT IS ARGUED BY THE ASSESSEE THAT TH E ASSESSMENT OUGHT TO HAVE BEEN COMPLETED BY 31/08.2004 AND AS T HE ASSESSMENT WAS COMPLETED ON 21/10/2004, THE SAME IS BARRED BY LIMITATION. 4.1 THE LD. D.R ARGUED THAT THE CIT(APPEALS) REFUSE D TO ENTERTAIN THIS GROUND AS NOT WITHIN THE PURVIEW OF SEC.246/24 6A OF THE ACT. HOWEVER, THE CIT(A) CONFIRMED THE ASSESSMENT ON THI S ISSUE TAKING THE LAST PANCHANAMA DATED 03/10/2002. HE PRODUCED THE PANCHANAMAS. THE LD. D.R ARGUED THAT THERE ARE DIFF ERENT SEARCH WARRANTS ISSUED BY THE DIT, CHENNAI DATED 19/7/2002 AND THE CONSEQUENTIAL WARRANTS ISSUED BY THE JDIT, COIMBATO RE DATED 8/8/2002, WHICH ARE AS FOLLOWS: SEARCH WARRANTS S.NO. DATE IN THE CASE OF TO SEARCH 1 19.7.2002 4 WARRANTS HARI PODDAR, PRATIBHA PODDAR, ADITYA FOODS AND NANI AGRO FOODS PVT. LTD. 32, OTTUKARA CHINNIAH, ERODE 2 -DO- HARI PODDAR 7, GANDHI NAGAR, ERODE- 9(RESIDENCE) 3 -DO- ADITYA SPICES LIMITED 427, VIVEKANANDA SA LAI, ERODE (BUSINESS PREMISES) CONSEQUENTIAL WARRANTS S.NO. DATE IN THE CASE OF TO SEARCH 1 8.8.2002 HARI PODDAR 72, KANDASAMI STREET, ERODE 2 -DO- HARI PODDAR M/S. PERIASWAMY GOUNDER & CO. , 505, NETAJI ROAD, ERODE - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 8 3 -DO- HARI PODDAR RESIDENCE OF THIAGARAJAN, 93, ANDAVAR STREET, ERODE 4 -DO- HARI PODDAR RESIDENCE OF RAMESH CHANDRA S UREKA, RKV NAGAR, ERODE 4.2 THE LD. DR CONTENDED THAT THERE IS NO DISPUTE THAT THE ABOVE SEARCH WARRANTS ARE ISSUED AS ABOVE. THE DISPUTE I S WITH REFERENCE TO THE DATE OF CONCLUSION OF SEARCH AS RECODED IN THE LAST PANCHANAMA DRAWN AND IT IS TO BE SEEN ACCORDING TO THE EXPLANA TION 2 TO SEC.158BE OF THE ACT. 4.3 THE LD. D.R SUBMITTED THAT IN ALL THESE PLACES SEARCHES HAD BEEN CONDUCTED AND SOME HAD TO BE EXTENDED BY ISSUE OF A PROHIBITORY ORDER(PO) U/S.132(3) OF THE ACT, WHEREV ER NECESSARY DUE TO TIME CONSTRAINTS AND FOR VARIOUS ADMINISTRATIVE REASONS. THEREFORE, IT IS WRONG TO ASSUME THAT MULTIPLE WARRANTS WERE I SSUED BY THE SAME AUTHORITY AND FOR THE SAME ENTITY. FROM THE ABOVE TABLE, IT IS VERY CLEAR THAT THE WARRANTS ISSUED BY JDIT, COIMBATORE ARE CONSEQUENT TO THE ORIGINAL WARRANTS ISSUED BY THE DIT, CHENNAI. CONSEQUENT TO THE INTER-RELATIONSHIP OF ALL THE SEARCHES, SOME SEARCH ES HAD TO BE KEPT IN PROCESS BY ISSUE OF PROHIBITORY ORDERS AND THE SEAR CHES INITIATED UNDER THE WARRANTS ISSUED BY DIT, CHENNAI ON 19.7.2 002 IN THE CASES - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 9 OF SHRI HARI PODDAR, SMT. PRATIBHA PODDAY, M/S. ADI TYA FOODS AND NANI AGRO FOODS P. LTD. GOT CONCLUDED WITH THE SEIZ URE OF THE COMPUTER HARD DISC UNDER THE LAST PANCHANAMA DATED 1/10/2002. HERE IT IS NECESSARY TO POINT OUT THAT IT WAS DETEC TED THAT THE ASSESSEES WERE KEEPING TWO SETS OF BOOKS, ONE IN MA NUAL FORM AND OTHER IN COMPUTER. CONSIDERING THE HUGE VOLUME OF MATERIALS FOUND, THE TIME TAKEN TO EVALUATE THESE DOCUMENTS AND ALSO TAKING INTO ACCOUNT THE NUMBER OF PREMISES SEARCHED, IT CANNOT BE TAKEN AS WANTON PROLONGATION OF THE SEARCH. IN THIS REGARD, THE LD. D.R, HAS DRAWN OUR ATTENTION TO EXPLANATION 2 TO SEC.153BE O F THE ACT, WHICH WAS INSERTED BY THE FINANCE (NO.2) ACT, 1998, W.E.F . 01.07.1995. 4.4 THE LD. DR ARGUED THAT A METICULOUS UNDERSTANDI NG OF THE ABOVE EXPLANATION WOULD SHOW WHAT IS RELEVANT IS TH E DATE ON WHICH THE LAST PANCHANAMA WAS DRAWN IN RELATION TO ANY PE RSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED. IN THIS CASE, THE WARRANTS DATED 19.7.2002 ISSUED BY THE DIT IN THE F OUR CASES HARI PODDAR, PRATIBHA PODDAR, ADITYA FOODS AND NANI AGRO FOODS PVT. LTD. TO SEARCH THE PREMISES AT NO.32, OTTUKKARA CHINNIAH ASSUMES SIGNIFICANCE AND THE LAST PANCHANAMA WITH REFERENCE TO THESE WARRANTS WAS DRAWN ON 1/10/2002 BY THE SEIZURE OF T HE COMPUTER HARD - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 10 DISK AND HENCE THE ASSESSMENTS COMPLETED WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZA TIONS WAS EXECUTED, ARE WITHIN THE TIME ALLOWED UNDER THE ACT. AS CLEA R EVIDENCE, THE CERTIFIED COPY OF THE SAID PANCHANAMA DATED 1.10.20 02 WAS ALREADY FURNISHED BY THE CIT(DR) IN HIS PAPER BOOK DATED 22 .4.2010 AT PAGES 99,100 AND 101. FURTHER EVIDENCE TO THIS FACT IS T HAT ALL THESE ASSEESSEES THEMSELVES STATED AGAINST COLUMN 11 OF T HE BLOCK RETURN, WHICH DEALS WITH THE DATE ON WHICH THE LAST AUTHORI ZATION FOR SEARCH WAS EXECUTED, THAT THE RELEVANT DATE WAS 1.10.2002. THIS IS ALSO AN UNDISPUTED FACT. HAVING VERIFIED THE RETURNS SO, I T IS STRANGE ON THE PART OF THE ASSESSEES TO TAKE A GROUND IN THIS REGA RD. 4.5 IN ADDITION, IT IS ALSO TO BE NOTED THAT THE SE ARCH INITIATED UNDER THE WARRANT ISSUED BY JDIT, COIMBATORE ON 8.8.2002 (PAGES 16 & 17 OF THE PAPER BOOK OF CIT-DR) IN THE CASE OF SHRI HA RI PODDAR TO SEARCH THE PREMISES AT M/S. M. PERIASAMY GOUNDER & CO., NO.505, NETHAJI ROAD, ERODE -1 GOT CONCLUDED WITH THE SEIZU RE OF CERTAIN BOOKS OF ACCOUNTS (AS IN PAGE 45 OF PAPER BOOK OF C IT-DR) UNDER PANCHANAMA DATED 3.10.20002 (PAGES 43 & 44 OF THE P APER BOOK OF CIT-DR) - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 11 4.6 IN THE LAST PARA OF PAGE 1 OF THE WRITTEN SUBMI SSIONS OF THE ASSESSEES AR, IT IS STATED IN THE CASE OF HP, THE LAST OF THE WARRANTS OF AUTHORIZATION, WAS THE ONE REFERRED TO IN THE PA NCHANAMA DRAWN ON 9.8.2002 FINALLY CONCLUDING THE SEARCH IN HIS CASE AT NO.72, KANDASAMY STREET, ERODE, AS MORE THAN ONE WARRANT O F AUTHORIZATION HAD BEEN ISSUED IN HIS CASE. THIS AVERMENT DOES N OT GIVE COMPLETE PICTURE. WARRANTS FOR SEARCHES ARE ISSUED SPECIFIC TO THE PREMISES IN A CASE. IN THE CASE OF HARI PODDAR, CONSEQUENTIAL WARRANT TO SEARCH THE PREMISES AT NO.72, KANDASAMY STREET, ERODE WAS ISSUED BY THE JDIT, COIMBATORE ON 08.08.2002. AS STATED IN PARA 5, IN THE CASE OF HARI PODDAR, CONSEQUENTIAL SEARCH WARRANTS WERE ISS UED TO SEARCH 4 OTHER PREMISES. THUS, IN THE CASE OF HARI PODDAR, 5 PLACES WERE SEARCHED BY ONE WARRANT ISSUED BY THE DIT, CHENNAI AND 4 CONSEQUENTIAL WARRANTS ISSUED BY JDIT, COIMBATORE. THE ONE ISSUED BY DIT, CHENNAI TO SEARCH 32, OTTUKARA CHINNIAH STR EET, ERODE (IN THE CASES OF HARI PODDAR, PRATIBHA PODDAR, ADITYA FOODS AND NANI AGRO FOODS PVT. LTD.) GOT CONCLUDED ON 1.10.2002 WITH SE IZURE OF COMPUTER HARD DISC PERTAINING TO ALL THE PARTIES UNDER SEARC H. THE CONSEQUENTIAL ONE ISSUED BY THE JDIT, COIMBATORE IN THE CASE OF HARI PODDAR TO SEARCH THE PREMISES AT M/S. M. PERIASAMY GOUNDER & CO., - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 12 NO.505, NETHAJI ROAD, ERODE 1 GOT CONCLUDED WITH THE SEIZURE OF CERTAIN BOOKS OF ACCOUNTS ON 3.10.2002. 4.7 IN THE FIRST PARA AT PAGE 2 OF THE WRITTEN SUBM ISSIONS OF THE AR, IT IS STATED IN THE CASE OF BOTH SMT. PRATIBHA POD DAR AND M/S NANI AGRO FOODS (P) LTD., THE EXECUTION OF THE WARRANT O F AUTHORIZATION AND THE CONCLUSION OF THE SEARCH ON 8.8.2002 AND NOT ON 1.10.2002, AS CLAIMED BY THE LOWER AUTHORITIES. THIS AVERMENT O F THE AR IS NOT CORRECT. HE HAS NOT TAKEN INTO ACCOUNT THE INITIAL SEARCH WARRANT IN THE CASES OF HARI PODDAR, PRATIBHA PODDAR, ADITYA FOODS AND NANI AGRO FOODS PVT. LTD. BY THE DIT, CHENNAI WHICH GOT CONCL UDED BY SEIZURE OF COMPUTER HARD DISC AS PER PANCHANAMA DATED 1.10. 2002. 4.8 IN THE SECOND PARA OF PAGE 2 OF THE WRITTEN SUB MISSIONS OF THE AR, IT IS STATED IN SUPPORT OF THE STAND THAT THE BLOCK ASSESSMENT WAS NOT MADE WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZATIONS FRO SEARCH U/S.132 WAS EXECUT ED, THE ASSESSEE RELIES ON THE PANCHANAMA DRAWN ON 9.8.2002 IN THE C ASE OF HARI PODDAR (HP), AT THE PREMISES A WARRANT OF AUTHORIZA TION IN THE NAME OF THE ASSESSEE WAS EXECUTED, VIZ., 72, KANDASWAMY STR EET, 1 ST FLOOR, - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 13 ERODE-3. FOR THE REASONS STATED IN PARA 3.5 ABOVE , THESE AVERMENTS OF THE AR ARE NOT CORRECT. 4.9 IN THE FOURTH PARA OF PAGE 2 OF THE WRITTEN SUB MISSIONS OF THE AR, IT IS STATED THE PROHIBITORY ORDER PASSED U/S 132(3) ON 08.08.2002 WAS LIFTED ON 21.08.2002 AS SEEN FROM TH E PANCHANAMA DRAWN ON THAT DAY, ONLY THE BOOKS OF ACCOUNT OF MR. M.PERIASAMY GOUNDER & CO., IN SHORT MP, WERE SEIZED WITHOUT A FRESH WARRANT OF AUTHORIZATION U/S 132(2). A FURTHER PROHIBITORY OR DER PASSED ON 21.08.2002 WAS LIFTED ON 03.10.2002 AND WITHOUT A F RESH WARRANT OF AUTHORIZATION, THE REGULAR BOOKS OF ACCOUNT IN THE CASE OF MP WERE SEIZED, AS SEEN FROM THE PANCHANAMA DRAWN ON 21.08. 2002 AND THE LIST OF INVENTORY OF ACCOUNT BOOKS, ETC. SEIZED AND FOUND AT PAGE NOS. 35, 36, 38 TO 41 OF THE PAPER BOOK OF THE LEARNED C IT-DR FILED BEFORE THE HONBLE BENCH. THESE ARE ENCLOSED AS ITEM NO.3 . IT WAS NOT IN THE CASE OF HARI PODDAR, BUT ONLY IN THE CASE OF M P. THE LEARNED AR TRIES TO CONFUSE BY INTRODUCING MP. THE CONSEQUENT IAL SEARCH WARRANT WAS ISSUED BY THE JDIT, COIMBATORE ON 08.08.2002 IN THE CASE OF HARI PODDAR TO SEARCH THE PREMISES AT M/S. PERIASWAMY GO UNDER & CO., 505, NETHAJI ROAD, ERODE. THE LD. AR TRIES TO CONF USE THIS TRIBUNAL BY DUBBING THIS PREMISE AS MP, AS IF A NEW PARTY WAS S EARCHED. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 14 PROHIBITORY ORDERS ARE SANCTIONED BY LAW U/S.132(3) FOR ADMINISTRATIVE CONVENIENCE INVOLVING VOLUMINOUS SEARCH WORK; THERE IS NO NECESSITY TO ISSUE FRESH WARRANT FOR CONTINUING THE SEARCH BY ISSUING PROHIBITORY ORDERS. ACTUALLY, THE MATTER IS THE DATE OF LAST P ANCHANAMA DRAWN. IN THIS GROUP, IT CLEARLY FALLS IN OCTOBER 2002 AND SO COMPLETION OF SEARCH ASSESSMENTS BY OCTOBER 2004 IS CLEARLY IN ORDER. 4.9.1 IN THE LAST PARA OF PAGE 2 OF THE WRITTEN SUB MISSIONS OF THE AR, IT IS STATED .IT IS SUBMITTED THAT THE LAST PANCH ANAMA IS THE ONE DRAWN ON 08.08.2002 FOR THE EXECUTION OF WARRANT OF AUTHORIZATION . THIS IS NOT CORRECT FOR THE REASONS STATED IN EARLI ER PARA . 4.9.2 IN THE SECOND PARA OF PAGE 3 OF THE WRITTEN SUBMISSIONS OF THE AR, IT IS STATED THE SUPREME COURT HAS HELD THAT T HE LAST PANCHANAMA WOULD BE THE DATE ON WHICH SEIZURE WAS M ADE, IN RESPECT OF THE PERSON IN WHOSE NAME THE WARRANT OF AUTHORIZATION HAD BEEN ISSUED AND EXECUTED (319 ITR ST.2(SC)) AS ITEM 5, THERE BEING NO SEIZURE IN THE CASE OF HP ON 03.10.2002, THE PAN CHANAMA DATED 03.10.2002, IS NOT RELEVANT FOR PURPOSES OF SECTION 158BE. THE WARRANTS ISSUED BY DIT, CHENNAI TO SEARCH 32, OTTUK ARA CHINNIAH STREET, ERODE (IN THE CASES OF HARI PODDAR, PRATIBH A PODDAR, ADITYA - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 15 FOODS AND NANI AGRO FOODS PVT. LTD.) GOT CONCLUDED ON 1.10.2002 WITH SEIZURE OF COMPUTER HARD DISC PERTAINING TO AL L THE IMPUGNED ASSESSEES UNDER SEARCH (PAGES 99, 100, 101 OF THE P APER BOOK OF CIT-DR). THE CONSEQUENTIAL WARRANT ISSUED BY THE J DIT, COIMBATORE IN THE CASE OF HARI PODDAR TO SEARCH THE PREMISES A T M/S. M. PERIASAMY GOUNDER & CO., NO. 505, NETHAJI ROAD, ERO DE 1 GOT CONCLUDED WITH THE SEIZURE OF CERTAIN BOOKS OF ACCO UNTS ON 03.10.2002 (PAGES 43 AND 44 OF PAPER BOOK OF CIT-DR ). 4.9.3 THE ASSESSEE RELIED ON THE JUDGMENT OF THE M ADRAS HIGH COURT IN THE CASE OF DCIT VS. RAKESH SARIN,(331 ITR 451) WHEREIN THE FACTS ARE COMPLETELY DISTINGUISHABLE. IN RAKESH SARIN, S EARCH COMMENCED ON MARCH 27, 2003 AND PO PLACED; THE SAID PO WAS LI FTED ONLY ON 17.06.2003 BY DRAWING A PANCHANAMA; SINCE THE VALID ITY OF A PO IS ONLY 60 DAYS, THE COURT HELD THAT THE PANCHANAMA D RAWN ON 17.06.2003 CANNOT BE TAKEN AS LAST PANCHANAMA TO RE CKON FOR THE ASSESSMENT TIME-BARRING DATE; ONE MORE SEARCH WARRA NT WAS ISSUED ON 28.08.2003 TO TACKLE THIS PROBLEM AND SEIZING A BOND FROM BANK BY DRAWING A PANCHANAMA BASED ON THE WARRANT CANNOT SO LVE THE PROBLEM. THESE ARE THE FACTS OF RAKESH SARIN CASE. THE FACTS OF THE INSTANT CASE ARE IN NO WAY COMPARABLE; IN THE INSTA NT CASE, THE 60 - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 16 DAYS TIME LIMIT FOR PO HAS NOT BEEN TRANSGRESSED; C ONSEQUENTIAL WARRANTS ISSUED WERE TO COVER OTHER CONNECTED PREMI SES UNEARTHED AND NOT TO TACKLE ANY PROBLEM IN PO TIME LIMITS. T HEREFORE THE FACTS OF THE CASE DIFFER FROM THE FACTS OF THE CASE RELIED O N BY THE ASSESSEE. SIMILARLY, OTHER DECISIONS QUOTED BY THE AR ARE NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. 4.9.4 IN THE WRITTEN SUBMISSIONS, THE AR STATED T HAT THE COMMON PANCHANAMA DRAWN ON 1.10.2002 IS NOT RELEVANT FOR P URPOSE OF SEC.158BE OF THE ACT EITHER IN THE CASE OF HP OR IN THE CASE OF OTHER TWO ASSESSEES. HE HAS NOT GIVEN ANY VALID REASON FOR THIS AVERMENT. HIS REASONING THAT EVERY TIME PO IS LIFTED, A FRESH WARRANT IS REQUIRED IS NOT CORRECT. THROUGH THE COMMON PANCHANAMA DRAW N ON 1.10.2002, COMPUTER HARD DISC PERTAINING TO THE ACC OUNTS OF ALL THE IMPUGNED ASSESSEES SEIZED. IT IS SUBMITTED THAT SE IZURE OF ANY BOOKS OF ACCOUNTS, LOOSE PAPERS AND OTHER MATERIAL EVIDEN CES, THOUGH FOUND IN A PREMISES, SHOULD BE DONE ONLY AFTER APPLICATIO N OF MIND AS TO THE NECESSITY OF THE SEIZURE IN TERMS OF THE CONTENTS A ND ITS EVIDENTIARY VALUE. IF ON THE DATE OF SEARCH ITSELF EVERYTHING FOUND ARE SEIZED, SUCH A SEIZURE WOULD HAVE BEEN A WANTON SEIZURE WITHOUT APPLICATION OF MIND AND WILL NEVER STAND THE TEST OF LAW AND IT WO ULD BE AN ILLEGAL - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 17 SEIZURE. IN THIS CASE, THE DECISION TO SEIZE THE H ARD DISC AS PRIMARY EVIDENCE WAS ARRIVED AT AFTER ELABORATE EVALUATION AND STUDYING OF THE VOLUMINOUS DATA. THEREFORE, IT IS SUBMITTED THAT T HE SEARCH NEVER ENDS IMMEDIATELY AFTER VACATING THE PREMISES EITHER ON THE DAY OF SEARCH OR THE NEXT DAY. IN ORDER TO AVOID UNNECESS ARY OCCUPATION OF THE PREMISES OF THE ASSESSEE WHO IS SEARCHED, ONE O F THE ROOMS OR A PLACE IN THE SAID PREMISES IS KEPT IN A PO. THEREF ORE, AS FAR AS THE PLACE OF PO, THE SEARCH WILL CONTINUE TILL THE LAST PANCHANAMA IS DRAWN AND THE PO IS LIFTED CONCLUSIVELY. THEREFORE, THE SEARCH WAS CONCLUDED IN THIS CASE ONLY ON 1.10.2002 IN RESPECT OF ALL THE THREE ASSESSEES CONSEQUENT TO PHYSICAL SEIZURE OF THE HAR D DISC THROUGH THE LAST PANCHANAMA DRAWN ON 1.10.2002 ON THE MAIN WARR ANTS ISSUED BY THE DIT, CHENNAI. THEREFORE, THE ORDER PASSED ON 2 1.10.2004 WITHIN 2 YEARS FROM THE END OF THE MONTH IN WHICH THE LAST O F THE PANCHANAMA WAS DRAWN, AS PER EXPLANATION 2 TO SEC.158BE OF THE ACT, HAS BEEN LEGALLY MADE WITHIN THE TIME LIMIT PROVIDED UNDER T HE ACT. (IN THE CASE OF HARI PODDAR, THE LAST PANCHANAMA WAS DRAWN ON 3. 10.2002 BY SEIZURE OF BOOKS OF ACCOUNTS BASED ON THE CONSEQUEN TIAL WARRANT ISSUED BY THE JDIT, COIMBATORE). FURTHER, THE LD. AR, RELIED ON THE JUDGMENT OF THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 18 VS. ANIL MINDA (235 CTR 1). THEREFORE, IT IS SUBMI TTED THAT THE SEARCH ASSESSMENTS IN THE ABOVE CASES ARE WELL WITHIN THE TIME PRESCRIBED UNDER THE ACT. 4.9.5. WE HAVE BOTH PARTIES ON LEGAL ISSUE OF RELAT ING TO TIME LIMIT TO COMPLETE THE ASSESSMENT U/S 158BC OF THE ACT AS PRO VIDED U/S.158BE OF THE ACT. IN THE PRESENT, IT IS NOT DISPUTED THA T THERE WAS A WARRANT OF AUTHORIZATION ISSUED IN THIS CASE U/S.132 OF THE AC T ONE ON 19.07.2002 AND THE SECOND ONE WAS 08.08.2002. THE ASSESSMENT WAS COMPLETED ON 21.10.2004 AND THE LAST PANCHANAMA WAS DRAWN ON 01.10.2002(IN THE CASE OF HARI PODDAR, THE LAST PAN CHNAMA WAS DRAWN ON 03.10.2002) IN RESPECT OF ALL THREE ASSES SEES CONSEQUENT TO PHYSICAL SEIZURE OF THE HARD DISK ON THE BASIS OF T HE MAIN WARRANT ISSUED BY THE D.I.T, CHENNAI. THEREFORE, THE ASSES SMENT ORDER PASSED ON 21.10.2004 WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST PANCHNAMA WAS DRAWN. IN OUR CONSIDE RED OPINION, THE ASSESSMENTS FRAMED HEREIN WERE WITHIN TIME LIMIT AS PRESCRIBED IN SEC.158BE R.W. EXPLANATION 2. THIS VIEW OF OURS IS ALSO FORTIFIED BY THE JUDGEMENT OF SUPREME COURT IN THE CASE OF VLS FINANCE LTD. VS. CIT REPORTED IN 384 ITR 1(SC) WHEREIN HELD THAT WH ERE REVENUE SEARCHED PREMISES OF ASSESSEE ON DIFFERENT DATES ON BASIS OF - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 19 AUTHORIZATION GRANTED FOR FIRST SEARCH BUT ASSESSEE DID NOT CHALLENGE VALIDITY THEREOF, LIMITATION PERIOD TO COMPLETE BLO CK ASSESSMENT HAD TO BE COUNTED FROM DATE OF LAST SEARCH WHEN SEARCH OPE RATION WAS COMPLETED. 4.9.6 BEING SO, WE HAVE NO HESITATION IN REJECTIN G THE LEGAL ISSUE RAISED BY THE ASSESSEES ON TIME LIMIT TO COMP LETE THE ASSESSMENTS. THIS GROUND IN ASSESSEES APPEALS IS R EJECTED. 5. IN ASSESSEES APPEAL NO. IT(SS) NO.166/MDS./200 5, THE MAIN ISSUE OF ASSESSEE IS WITH REGARD TO THE QUANTUM OF UNDISCLOSED TURNOVER AS CONSIDERED BY THE ASSESSEE DID NOT REQU IRE ANY MODIFICATION, IN THE ABSENCE OF ANY MATERIAL OR EVI DENCE FOUND, AS A RESULT OF THE SEARCH, IN THE BLOCK ASSESSMENT. 5.1 THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE W AS ASKED TO SUBMIT THE BASIS ON WHICH OUT OF ` 40.69 CRORES DEMAND DRAFTS, ONLY D.DS WORTH ` 22.85 CRORES ARE CLAIMED TO BE PERTAINING TO HIM. T HE ONLY REASON ADVANCED BY THE ASSESSEE WAS THAT OUT O F CHEQUES WORTH ` 16,12,75,700/-, ONLY CHEQUES WORTH RS.9.84 CRORES A RE BELONG TO THE ASSESSEE GROUP AND THIS FACT WAS ACCEPTED BY THE LD . ASSESSING - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 20 OFFICER. ON APPEAL, THE LD.CIT(A) OBSERVED THAT THE ASSESSEE IS NOT IN A POSITION TO PRODUCE ANY EVIDENCE WHATSOEVER TO ESTABLISH THAT NO AMOUNT OUT OF REMAINING D.D WORTH ` 17.84 CRORES PERTAIN TO THE ASSESSEE GROUP. ACCORDING TO LD.CIT(A), THE CONTENT ION OF ASSESSEE COULD NOT BE ACCEPTED FULLY. THEREFORE, LD.CIT(A) CAME TO A CONCLUSION THAT 90% OF ` 40,69,00,408/- I.E. ` 36,62,10,367/- WILL BE TREATED AS UNDISCLOSED TURNOVER OF SHRI HARI PODDAR FROM THE SALE OF TURMERIC. 6.1 IN ASSESSEES APPEAL, THE CONTENTION OF ASSES SEE IS THAT THE AO HAS STATED AT PAGE 24, SHRI THIYAGARAJAN STATED THAT SOME OF THE DDS PERTAINING TO THE TEXTILE TRADE MAY NOT RELATE TO THE PODDAR GROUP. HOWEVER, HE ADDED ON THE REASON THAT HE WAS IN NO P OSITION TO STATE THIS WITH CERTAINTY. THIS CALLS FOR A REASONABLE IN FERENCE BASED ON THE AVAILABLE EVIDENCE. BEFORE US, LD.A.R SUBMITTED THA T THERE IS NO CONCLUSIVE EVIDENCE THAT THE VALUE OF THE INSTRUMEN TS AS COMPILED FROM THE RECORDS OF THE ONE-DAY CLEARANCE AGENTS IS OF PODDAR GROUP. FURTHER, LD.A.R SUBMITTED THAT THE INFERENCE MADE B Y THE AO THAT UN- DISCLOSED TURNOVER OF ` 40.69 CRORES IS NOT CORRECT, WHICH WAS NOT BASED ON ANY INCRIMINATING DOCUMENTS SEIZED FROM TH E ASSESSEE. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 21 6.2 WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE MATERIAL ON RECORD. IN THIS CASE, THE TOTAL SALE PROCEEDS OF T URMERIC RECEIVED THROUGH D.D WAS ` 40,69,00,408/-. THE ASSESSEE TOOK A PLEA THAT OUT OF THIS ONLY ` 22.85 CRORES WAS RELATED TO ASSESSEES GROUP. HOWE VER, THE ASSESSEE NOT PLACED ANY EVIDENCE IN SUPPORT OF THAT CLAIM. ACCORDING TO CIT(APPEALS), EVEN THE ASSESSING OFFIC ER HAS NOT CONCLUSIVELY PROVED THAT THE ENTIRE TURNOVER WAS BE LONGED TO THE ASSESSEE. CONSIDERING THIS, LD.CIT(A) DIRECTED THE AO TO CONSIDER THE 90% OF ` 40,69,00,408/- I.E. ` 6.62.10,367/- AS UNDISCLOSED TURNOVER OF THE ASSESSEE. IN OUR CONSIDERED OPINION, THE ASSESS EE HAS NOT PLACED ANY EVIDENCE TO PROVE THAT TURNOVER CONSIDERED BY T HE ASSESSING OFFICER NOT AT ALL RELATING TO THE ASSESSEE. THE CLEARING AGENTS, WHO HAVE CLEARED THESE D.DS AND PAID THE PROCEEDS TO TH E ASSESSEES GROUP HAS STATED THAT ALL THE INSTRUMENTS WERE EXAM INED BY THEM, CONFIRMED THAT THESE PERTAIN TO THE HURRY PODDAR GR OUP AND THE PROCEEDS WERE PAID TO THEM. THE ASSESSING OFFICER RECORDED ALL THESE FACTS IN PARA 7.4 OF THIS ORDER. THERE IS NOT HING CONTRA MATERIAL PLACED BY THE ASSESSEE AGAINST THE FINDINGS OF THE ASSESSING OFFICER. BEING SO, THE ENTIRE TURNOVER OF ` 40,69,00,408/- TO BE CONSIDERED AS - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 22 UNDISCLOSED TURNOVER OF THE ASSESSEE. FURTHER, TH E JUDGEMENT OF SUPREME COURT IN THE CASE OF CIT VS. P V KALYANASUN DARM (294 ITR 49(SC) ) WHICH WAS RELIED BY THE AR HAVE NO APPLICA TION TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THIS GROUND RAIS ED BY THE ASSESSEE IN APPEAL NO.166/MDS./05 STANDS REJECTED AND THE R EVENUE IN GROUND NO.2(A) IN IT(SS) 171/05 IS ALLOWED AND CORR ESPONDING GROUND NOS.1 & 2 CO BY ASSESSEE IN 38/06 IS DISMI SSED IT(SS) NO.171/MDS./2005 (REVENUE S APPEAL) & C.O. NO.38/06 8. THE SECOND ISSUE IN GROUND NO.2(B) REVENUES AP PEAL IS THAT THE LD.CIT(A) ERRED IN REDUCING THE UNDISCLOSED INC OME OF RS.1.60 CRORES DETERMINED BY THE AO TO RS.0.93 CRORES AND T HEISSUE IN GROUND NO.2(C) OF REVENUES APPEAL IS THAT LD.CIT(A) ERRED IN REDUCING THE GP RATE OF 3.9% ADOPTED BY THE AO TO 2.56%. 8.1 THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE C ONSIDERING THE UNACCOUNTED TURNOVER OF RS.22.85 CRORES HAS OFFERED UNDISCLOSED INCOME OF RS.52,41,000/-. THIS WAS BASED ON THE GP RATE AS PER TRADING ACCOUNTS FOR F.Y 99-00 TO F.Y 2001-02. THE GP RATES IN THESE TRADING ACCOUNTS ARE VARYING FROM 0.93% TO 6.51%. THE AO ADOPTED - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 23 A RATE OF 3.95% FOR ENTIRE TURNOVER WHICH IS THE GP RATE SHOWN IN THE CASE OF M/S,ABHISHEK EXPORTS FOR 2000-01, A CONCERN ENGAGED IN TURMERIC TRADING EXCLUSIVELY. ACCORDINGLY, THE LD. ASSESSING OFFICER AFTER APPLYING THIS RATE OF 3.95%, PROFIT TO THE EN TIRE TURNOVER OF ` 40,69,408/-, ADOPTED FIGURE OF UNDISCLOSED INCOME O F ` 1,60,72,566/- AS AGAINST RS.52,41,000/- DECLARED BY THE ASSESSEE. IN APPEAL, LD.CIT(A) REDUCED THE UNDISCLOSED INCOME OF RS.1.60 CRORES DETERMINED BY THE AO TO RS.0.93 CRORES. AGAINST THI S, THE REVENUE IS IN APPEAL BEFORE US. 9.1. THE FACTS OF THE ISSUE ARE THAT THE AO MADE E STIMATION AT 3.95% BASED ON THE ONE OF THE ASSESSEES GROUP I.E M/S.ABHISHEK EXPORTS IN 2000-01. ON APPEAL, THE LD.CIT(A) ADOPTE D THE AVERAGE GP OF TWO OF THE ASSESSEES GROUP CONCERN I.E. M/S. ABHISHEK EXPORTS AND M/S.ADITYA TRADING AND REDUCED THE GP RATE TO 2 .56%. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 9.2. BEFORE US, LD.D.R SUBMITTED THAT THE LD.CIT(A ) HAS NOT FURNISHED THE TABLE OR CHART REFERRED TO IN PARA 5. 1 OF HIS ORDER. FURTHER, LD.D.R SUBMITTED THAT LD.CIT(A) HAS ALSO NOT EXPLAI NED HOW THE RANGE HEAD IS IN AGREEMENT WITH THE RATIO ADOPTED. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 24 9.3 ON THE OTHER HAND, LD.A.R SUBMITTED THE G.P. R ATE IN ASSESSMENT YEARS WISE AS FOLLOWS AND PLEADED THAT ESTIAMATION OF 3.95% IS VERY HIGHER SIDE. A.Y G.P. RATE 1996-97 2.84 1997-98 1.26 1998-99 1.84 1999-00 3.08 2000-01 3.65 2001-02 2.66 AVERAGE 2.56 9.4 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD.CIT(A) HAS NOT CONSIDERED THE GP RA TE OF M/S.NANI AGRO FOODS PVT LTD. AS IT IS DEALING IN MASALA POWD ER AS WELL AS TURMERIC POWDER. HENCE, LD.CIT(A) CONSIDERED THE GP RATE OF M/S.ABHISHEK EXPORTS AND M/S.ADITYA TRADING CO., WH ICH ARE ONLY DEALING IN TURMERIC FOR ESTIMATING THE UNDISCLOSED INCOME OF THE ASSESSEE. BEING SO, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 25 LD.CIT(A) AND THE SAME IS CONFIRMED. ACCORDINGLY, THIS GROUND STANDS DISMISSED. 10. THE NEXT ISSUE IN GROUND NO.3 IN REVENUE APPEA L IS THAT THE LD.CIT(A) ERRED IN REDUCING THE ADDITION OF RS.33.8 9 LAKHS MADE BY AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN PARTIE S ACCOUNTS TO JUST RS.0.86 LAKHS AT THE G.P RATE OF 2.56%. 10.1 BEFORE US, LD.D.R SUBMITTED THAT THE ADDITION WAS AS UNEXPLAINED CASH CREDITS, GOVERNED BY SEC.68 OF THE ACT. BECAUSE THESE CREDITS REMAIN UNEXPLAINED AS THE ASSESSEE HA S NOT ESTABLISHED THE IDENTITY OF THE CREDITOR, HIS CAPACITY AND THE GENUINENESS OF THE TRANSACTIONS. FURTHER, LD.D.R SUBMITTED THAT THE A SSESSEE HAS NOT DISCHARGED THE PRIMARY ONUS AS PER SECTION 68 OF TH E ACT AND THE ENTIRE CASH CREDIT HAS TO BE ASSESSED AND NOT ANY P ERCENTAGE BASIS. 10.2 ON THE OTHER HAND, LD.A.R SUBMITTED THAT THE AMOUNT OF RS.33.89 LAKHS IS RECORDED IN THE BOOKS OF ACCOUNT REGULARLY MAINTAINED ANS AS SUCH, IT IS NOT AN UNDISCLOSED IN COME FOR ANY PART OF THE AMOUNT TO BE ASSESSED AS UNDISCLOSED INCOME. FU RTHER, THE LD.A.R - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 26 SUBMITTED THAT EVEN FOR THE ESTIMATED ADDITION OF R S.86.00LAKHS IN HIS C.O, AS THE AMOUNT CANNOT BE CONSIDERED AS UNDISCL OSED INCOME, AS THEYARE FOUND IN THE REGULAR ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS. THE LD.A.R EXPLAINED THAT THESE AMOUNTS WERE RECEIVED FROM THE PARTIES FOR SUPPLY OF GOODS AND T HE WITHDRAWALS WERE FOR MAKING PAYMENTS IN TURN TO THE PARTIES FRO M WHOM THE ASSESSEE RECEIVED THE GOODS. THEREFORE, IT CANNOT B E TREATED AS CASH CREDIT U/S.68 OF THE ACT. 10.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE MATERIAL ON RECORD. U/S.68 OF THE ACT, ENTIRE UNEXPLAINED CRED IT TO BE CONSIDERED AS INCOME OF THE ASSESSEE AND THERE IS NO QUESTION OF ESTIMATION OF GP ON UNEXPLAINED CREDIT SO AS TO DETERMINE THE UND ISCLOSED INCOME. ACCORDINGLY, WE CONFIRM THE ORDER OF THE ASSESSING OFFICER AND REVERSE THE ORDER OF LD.CIT(A). THIS GROUND OF APP EAL OF REVENUE IS ALLOWED. 11. THE NEXT ISSUE IN GROUND NO.4 IS THAT THE LD.CI T(A) ERRED IN REDUCING THE ADDITION OF RS.24.44 LAKHS ON ACCOUNT OF UNACCOUNTED PURCHASED TO RS.4.88 LAKHS BY CONFIRMING THE DISALL OWANCE TO 20% ONLY. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 27 11.1 CROSS OBJECTIONS:NO. 4: THE ASSESSMENT AT 20 % BASED ON CONJECTURE IS NOT JUSTIFIED. (ESTIMATED DISALLOWAN CE OF 20% OF SUCH PURCHASES BEING UNVERIFIABLE IN NATURE) 11.2 THE FACTS OF THE ISSUE ARE THAT AN ESTIMATED DISALLOWANCE OF 20% OF SUCH PURCHASES BEING UNVERIFIABLE IN NATURE AND AS THIS FACT IS COMING OUT OF SEIZED MATERIAL IN THE FORM OF BOUGHT NOTES, THE SAME IS TO BE TAXED AS UNDISCLOSED INCOME FOR THE BLOCK PER IOD. THE ADDITION ON THIS COUNT WILL COME TO RS.4.88,967. ON APPEAL, THE LD.CIT(A) OBSERVED THAT IT IS NOT DISPUTED BY THE AO THAT QUA NTITY RECORDS ARE MAINTAINED FOR ACCOUNTED PURCHASES AND THESE BOUGHT NOTES ARE RELATED TO ACCOUNTED PURCHASES. IF THESE PURCHASERS ARE HELD AS NOT MADE, THE SALES COULD NOT HAVE BEEN EFFECTED, THE F IGURE OF ACCOUNTED SALES NOT BEING IN DISPUTE. THEREFORE, LD.CIT(A), C AME TO A CONCLUSION THAT THE ESTIMATED ADDITION OF 20% IS NOT SUSTAINAB LE, AS UNDISCLOSED INCOME. 11.3 BEFORE US, LD.D.R SUBMITTED THAT NO SPECIF IC EVIDENCE WAS BROUGHT IN BY THE ASSESSEE. FURTHER, LD.D.R SUBMIT TED THAT THE AO CLEARLY EXPLAINED THE MODUS OPERANDI FOLLOWED BY TH E ASSESSEE IN INFUSING THE CREDITS IN PARA 7.5 OF PAGES 25 TO 28 IN THE ASSESSMENT - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 28 ORDER. HE PLEADED THAT THE ENTIRE CASH CREDIT HAS TO BE ASSESSED AND NOT ANY PERCENTAGE BASIS. 11.4 ON THE OTHER HAND, THE LD.A.R SUBMITTED THAT THESE AMOUNTS WERE RECEIVED FROM THE PARTIES FOR SUPPLY OF GOODS AND THE WITHDRAWALS WERE FOR MAKING PAYMENTS IN TURN TO THE PARTIES FROM WHOM THE ASSESSEE RECEIVED THE GOODS. THEREFORE, IT CANNOT BE TREATED AS CASH CREDITS U/S.68 OF THE ACT. 11.5 WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. AS DISCUSSED IN EARLIER PARA, ENTIRE UNACC OUNTED PURCHASE TO BE CONSIDERED AS UNEXPLAINED INVESTMENT AND TO BE T REATED AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, W E CONFIRM THE ORDER OF THE ASSESSING OFFICER AND REVERSE THE FIND INGS OF THE LD.CIT(A). THIS GROUND OF REVENUE IS ALLOWED. CORRE SPONDING GROUND IN CO IS DISMISSED. 11.6 THE NEXT GROUND IN REVENUES APPEAL IN ITA NO. 171/05 IS WITH REGARD TO DELETION OF ENTIRE ADDITION OF ` 1.8 CRORES MADE ON ACCOUNT OF UNACCOUNTED PURCHASES. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 29 11.6.1 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE CONTENTION OF THE DR IS THAT THIS IS A N UNACCOUNTED PURCHASE AND TO BE CONSIDERED SEPARATELY AS UNDISCL OSED INCOME OF THE ASSESSEE. ON THE CONTRARY THE LD. A.R SUBMITTED THAT THE UNDISCLOSED SALES TURNOVER HAS ALREADY CONSIDERED A S UNDISCLOSED INCOME OF THE ASSESSEE THERE IS NO QUESTION OF TREA TING THE SAME AS UNDISCLOSED INCOME OR ESTIMATING ANY INCOME ON THIS TURNOVER. IN OUR CONSIDERED OPINION, THE LD.CIT(A) HAS NOT GIVEN A F INDING HOW THIS PURCHASE WAS INCLUDED IN UNACCOUNTED PURCHASE OF 22 CRORES. THE ASSESSING OFFICER ARRIVED AT THIS UNACCOUNTED PURCH ASE ON THE BASIS OF THE SEIZED MATERIAL. BEING SO, IT SHOULD BE CONS IDERED SEPARATELY AS UNDISCLOSED INCOME OF THE ASSESSEE. HENCE, THE GROU ND RAISED BY THE REVENUE IS ALLOWED. 11.7 IN THE RESULT, ASSESSEE APPEAL IN IT(SS)A NO. 166/MDS./05 IS DISMISSED AND REVENUE APPEAL IN IT(SS)A NO.171/MDS. /05 IS PARTLY ALLOWED & CO NO.38/MDS/05 IS DISMISSED. IT(SS) NO.164/MDS./2005 (ASSESSEES APPEAL) IT(SS) NO.170/MDS./2005 (REVENUE S APPEAL) CO NO. 37/MDS./2006 - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 30 12. THE SECOND GROUND IN IT(SS) A NO.164/MDS./05 I S THAT LD.CIT(A) ERRED IN HOLDING THAT HE WAS IN AGREEMENT WITH THE ASSESSING OFFICER THAT THE ACCOUNTS MAINTAINED ON T HE COMPUTER CANNOT BE EQUIVALENT TO BOOKS OF ACCOUNT, AS DEFINE D IN SEC.2(12A) OF THE ACT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. 12.1 AT THE TIME OF HEARING, NO SERIOUS ARGUMENTS ARE PUT ON THIS ISSUE, ACCORDINGLY, THIS GROUND IS DISMISSED. 12. 2 AT THE TIME OF HEARING, THE LD. A.R OF THE AS SESSEE DID NOT PRESS GROUND NOS.3 & 4. ACCORDINGLY, GROUND NOS. 3 & 4 ARE DISMISSED AS NOT PRESSED. SIMILARLY, CROSS OBJECTI ONS NO.3 & 4 ARE NOT PRESSED BY LD.A.R. 13. THE MAIN GRIEVANCE OF ASSESSEE IN GROUND NOS . 5 & 6 IS WITH REGARD TO SUSTAINING THE ADDITION OF ` 61/- LAKHS BY THE LD.CIT(A). 13.1 THE FACTS OF THE ISSUE ARE THAT THE LD. ASSES SING OFFICER HAD ACCEPTED THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE UNDISCLOSED BANK ACCOUNT WITH I.O.B, PERIYAR NAGAR BRANCH. ON APPEAL, THE LD.CIT(A) HAD ENHANCED THE ADDITION OF RS.61 LAKHS - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 31 INSPITE OF THE SUBMISSIONS MADE BEFORE THE AO THAT THE INCOME FROM THESE TRANSACTIONS HAVE ALREADY BEEN CONSIDERED AND INCLUDED IN THE BLOCK ASSESSMENT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 13.2. BEFORE US, THE LD.A.R SUBMITTED THAT THAT T HE TURMERIC IS AN AGRICULTURAL PRODUCT AND IS NOT AVAILABLE FROM THE FARMERS THROUGHOUT THE YEAR AND THEREFORE, AN AMOUNT COULD BE BLOCKED IN THE BANK ACCOUNT UNTIL THE GOODS ARRIVED IN THE MARKET. HENC E, THE LD.A.R PLEADED THAT THE ADDITION IS UNWARRANTED. LD.D.R SU PPORTED THE ORDER OF LD.CIT(A). 13.3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THIS BANK ACCOUNT WAS UNEARTHED DURING TH E COURSE OF SEARCH. THE PEAK BALANCE IN THE ACCOUNT IS AT ` 61 LAKHS IN THE F.Y 1999-2000 RELEVANT TO A.Y 2000-01. THE EXPLANATION OFFERED BY THE ASSESSEE REGARDING SOURCE OF DEPOSIT WAS NOT SATISF ACTORY. BEING SO, IT CANNOT BE SAID THAT THE SOURCE OF DEPOSIT IS UNA CCOUNTED TURNOVER. ACCORDINGLY, THE PEAK BALANCE IN THE BANK ACCOUNT T O BE CONSIDERED AS UNACCOUNTED INCOME OF THE ASSESSEE AND THE ORDER OF THE LD.CIT(A) IS CONFIRMED. THIS GROUND IN ASSESSEES A PPEAL IS REJECTED. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 32 REVENUES APPEAL IT(SS) A NO.170/05 AND CO NO.37/06 14. THE FIRST ISSUE IN GROUND NO.2 IS THAT THE LD.CIT(A) ERRED IN REDUCING THE ADDITION OF ` 10.27 LAKHS ON ACCOUNT OF UNACCOUNTED PURCHASED TO ` 2.05 LAKHS BY CONFIRMING THE DISALLOWANCE TO 20% ONLY. 14.1 CROSS OBJECTIONS:NO. 2: EVEN THE ADDITION OF ` 2.05 LAKHS WAS MERE CONJECTURE, IS NOT JUSTIFIED. LD.D.R SUB MITTED THAT NO SPECIFIC EVIDENCE BROUGHT BY THE ASSESSEE. 14.2 SIMILAR ISSUE WAS RAISED IN REVENUES APPEAL NO.171/MDS./2005 IN GROUND NO.4 AS DISCUSSED IN EAR LIER PARA NO.11 OF THIS ORDER. ACCORDINGLY, THIS GROUND IS ALLOWED . 15. THE SECOND ISSUE IN GROUND NO.3(A) OF REVENUE S APPEAL IS THAT LD.CIT(A) ERRED IN REDUCING THE ADDITION OF ` 22.55 LAKHS ON ACCOUNT OF PROFIT FROM VIGNESWARA TRADERS TO ` 14.61 LAKHS. - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 33 15.1 SIMILAR ISSUE WAS RAISED IN REVENUES APPEAL NO.171/MDS./2005 IN GROUND NO.2(C) AS DISCUSSED IN 11.6 OF EARLIER PARA OF THIS ORDER, THIS GROUND IN REVENUES APPEA L IS DISMISSED. 16. THE FOURTH ISSUE IN GROUND NO.6 OF REVENUE IS THAT THE LD.CIT(A) ERRED IN REDUCING THE ADDITION OF ` 1.25 CRORES MADE BY AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN PARTIES A CCOUNTS TO JUST ` 3.20 LAKHS AT THE G.P RATE OF 2.56%. 16.1 CROSS OBJECTIONS:NO. 1: ADDITION OF EVEN ` 3.20 LAKHS AGAINST THE GROUND OF REVENUE FOR TREATMENT OF ` 1.25 CRORES AS CASH CREDIT. 16.2. SIMILAR ISSUE WAS RAISED IN REVENUES APPEAL NO.171/MDS./2005 IN GROUND NO.3 AS DISCUSSED IN EAR LIER PARA NO.10.3 OF THIS ORDER, THIS GROUND IS ALLOWED. 16.3 IN THE RESULT, IT(SS) NO.164/MDS./2005 (AS SESSEES APPEAL) IS DISMISSED AND IT(SS) NO.170/MDS./2005 (REVENUE S APPEAL) IS PARTLY ALLOWED CO BY ASSESSEE IN NO.37/MDS./2006 IS DISMISSED . - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 34 IT(SS) NO.165/MDS./2005 (ASSESSEE S APPEAL) IT(SS) NO.169/MDS./2005 (REVENUE S APPEAL) CO NO. 36/MDS./2006 17. THE GROUND NO.2 IN ASSESSEES APPEAL IS THAT LD.CIT(A), OUGHT TO HAVE HELD THAT IN THE ABSENCE OF ANY MATERIAL OR EVIDENCE FOUND, AS A RESULT OF SEARCH, THE ENTIRE ADDITION MADE IN THE BLOCK ASSESSMENT, SHOULD BE DELETED IN FULL, WITHOUT SUSTAINING A PAR TIAL ADDITION OF ` 3,76,768/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. 17. 1 ON THE ABOVE ISSUE, THE REVENUE RAISED THE G ROUND IN NOS. 2 & 3 IS THAT LD.CIT(A) HAS ERRED IN SUSTAINI NG ONLY 1% OF ` 3.77 CRORES ON ACCOUNT OF BOUGHT NOTE PURCHASES. . IN C.O., THE ASSESSEE RAISED OBJECTIONS THAT 1% IS MERELY BASED ON CONJECTURE. HENCE, THE ASSESSEE AS WELL AS THE REVENUE & CO GRO UNDS ADJUDICATED TOGETHER AS BELOW. 17.2 THE FACTS OF THE ISSUE ARE THAT THE AO MADE T HE ADDITION ON THE BASIS OF AN ENTRY SUNDRY CREDITORS BOUGHT NOTES (PARA 7 TO 7.1.8 PAGE 6-16 OF ASSESSMENT ORDER) ON THE REASON THAT T HE ASSESSEE COULD NOT PRODUCE/PROVE THE SAME AND THERE WERE SOM E DEFECTS IN - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 35 THE VOUCHERS. AGGRIEVED, THE ASSESSEE CARRIED THE A PPEAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) ADOPTED 1% OF ` 3.77 CRORES ON ACCOUNT OF BOUGHT NOTE PURCHASES. 17.3 THE CONTENTION OF REVENUE IS THAT THE LD.CIT( A) OBSERVED THAT AS THE CREDITS ARE NOT VERIFIABLE, THE FULL AMOUNT I.E. ` 3.77 CRORES REPRESENTS BOGUS CREDITS. 17.4 WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. THERE WAS A SUNDRY CREDITORS AS ON 31.03.19 99 AT ` 3,76,76,860/- AS THE AMOUNTS PAYABLE BY THE ASSESSE E TO THE FARMERS. NONE BOUGHT NOTES WERE FOUND DURING THE C OURSE OF SEARCH ACTION. THERE WAS NO PRODUCTION OF BOUGHT NOTES BY THE ASSESSEE DURING THE ASSESSMENT ALSO. THESE CREDITS ARE NOT E XPLAINED TO THE SATISFACTION OF THE ASSESSING OFFICER. HENCE, THE A DDITION WAS MADE BY THE ASSESSING OFFICER. HOWEVER, THE LD.CIT(A) C ONSIDERED THE INCOME AT 1% OF THIS UNVERIFIABLE PURCHASE WHICH IS NOT CORRECT. IN OUR CONSIDERED OPINION, WHEN THE CREDIT IS NOT EXPLAINE D, THE WHOLE AMOUNT IS TO BE CONSIDERED AS UNEXPLAINED INCOME OF THE ASSESSEE. ACCORDINGLY, WE REVERSE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 36 RESTORE THE ORDER OF THE ASSESSING OFFICER. THIS GR OUND IN ASSESSEES APPEAL AND CO IS DISMISSED AND THE GROUND IN REVENU ES APPEAL IS ALLOWED. 18. THE MAIN GRIEVANCE OF REVENUE IN GROUND NO.4 IS THAT LD.CIT(A) HAS ERRED IN GIVING RELIEF ON ACCOUNT OF THE CREDITS IN THE NAME OF PERIYAR MARKETING COMMITTEE AMOUNTING TO RS .87.80 LAKHS. 18.1 THE FACTS OF THE ISSUE ARE THAT AN AMLUNT OF FRS.87,70,995/- HAD BEEN SHOWN AS SUNDRY CREDITORS PERIYAR MARKETING COMMITTEE (PMC) IN THE BOOKS OF M/S.NANI AGRO FOODS PVT LTD. , FOR THE YEAR ENDING 31.03.1999. THE AO OBSERVED IN THE ASSESSM ENT ORDER THAT THE PMC IS A REGULATORY BODY WHOSE MAIN ROLE IS TO ENSURE A FAIR PRICE TO THE FARMERS FOR THEIR AGRICULTURAL PRODUCE THROU GH CLOSED TENDER AND TO MONITOR WHETHER TIMELY PAYMENTS ARE MADE TO THE FARMERS OR NOT. THIS COMMITTEE HAS BEEN REGULATING THE SALE OF TURM ERIC IN ERODE. FURTHER, LD. ASSESSING OFFICER OBSERVED THAT AS CLA RIFIED BY THE SUPDT. OF PMC IN HIS STATEMENT RECORDED ON OATH ON 08.8.02 , AT THE TIME OF FINALIZATION OF PURCHASES THROUGH CLOSED TENDERS, T HE PAYMENT WOULD BE MADE BY THE BUYER IN THE FORM OF CASH AND THE SE LLER HAVING RECEIVED THE CASH ENDORSES HIS SIGNATURE ON THE STA MPED RECEIPT THEN - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 37 AND THERE. THUS, ACCORDING TO AO, THERE IS NO QUEST ION OF ANY DELAY AND ANY AMOUNT REMAINING OUTSTANDING TO THE FARMERS . THEREFORE, LD. ASSESSING OFFICER MADE THESE CREDITS APPEARING IN T HE NAME OF PMC IS ANOTHER INSTANCE OF UNPROVED CREDIT. ON APPEAL, THE LD.CIT(A) DELETED THE ADDITION AS UNDISCLOSED AS THE AMOUNT O F ` 87.80 LAKHS IS CREDITED IN THE BOOKS OF ACCOUNT AND IT IS WELL SET TLED THAT ANY AMOUNT CREDITED IN THE BOOKS OF ACCOUNT OR ENTRIES MADE IN THE BOOKS OF ACCOUNT BEFORE THE DATE OF SEARCH COULD NOT BE CONS IDERED IN A BLOCK ASSESSMENT AS UNDISCLOSED INCOME. AGAINST THIS, TH E REVENUE IS IN APPEAL BEFORE US. 18.2 BEFORE US, THE LD.D.R SUBMITTED THAT IT IS A CREDIT ENTRY AND THE ASSESSEE OUGHT TO HAVE PROVIDE THE CREDITS IN TERMS OF SEC.68 OF THE ACT. 18.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. AS DISCUSSED IN EARLIER GROUND OF THIS AS SESSEE , THE ENTIRE UNEXPLAINED CREDIT TO BE CONSIDERED AS UNEXPLAINED INCOME OF THE ASSESSEE. THE LD.CIT(A) DELETED THE ADDITION ONLY ON PRESUMPTION. ON THE OTHER HAND, THE ADDITION BASED ON SEIZED MAT ERIAL AS RECORDED BY THE ASSESSING OFFICER IN ITS ORDER AT PARA 7.2 I N PAGE NO.18 TO 21. ACCORDINGLY, WE REVERSE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND - - IT(SS)A 166, 171/MDS/2005 & CO 38/MDS/2006 ETC. 38 RESTORE THE ORDER OF THE ASSESSING OFFICER. THIS GR OUND IN REVENUES APPEAL IS ALLOWED. 19. IN THE RESULT, ALL THE ASSESSEES APPEALS AND CROSS OBJECTIONS ARE DISMISSED AND ALL THE REVENUES APPEAL ARE PART LY ALLOWED. ORDER PRONOUNCED ON 24 TH MAY, 2017 AT CHENNAI. SD/- SD/- ( $ % & ' . ( )*+ ) ( ,-. / 0 ) ( DUVVURU RL REDDY ) (CHANDRA POOJARI) : ; <= /JUDICIAL MEMBER ) <= /ACCOUNTANT MEMBER ,): /CHENNAI, C<- /DATED, THE 24 TH MAY, 2017. K S SUNDARAM '<)D ;EF G)F' /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ' ' H () /CIT(A) 4. ' ' H /CIT 5. FIJ ;;K$ /DR 6. J+L M /GF.