M/s Panjwani Packaging P.Ltd, Indore V. The ACIT 3(1), Indore

CO 4/IND/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6990 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 31-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C AGARWAL; SANDEEP GARG CAS
• Assessee Lawyers: KESHAV SAXENA
• Keywords: Unexplained expenditure; Opportunity of being heard
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AADCP3506G I.T.A.NO. 319 TO 324/IND/2011 A.Y S . : 1987 - 88 TO 1993 - 94 ACIT, 3(1), INDORE. PANJWANI PACKAGING PRIVATE LIMITED, INDORE VS APPELLANT RESPONDENT C.O.NOS.04 TO 07/IND/2012. (ARISING OUT OF I.T.A.NOS.319, 322, 323 & 324/IND/2 011 A.Y S . : 1987 - 88 TO 1993 - 94 PANJWANI PACKAGING PRIVATE LIMITED, INDORE ACIT, 3(1), INDORE. VS CROSS OBJECTOR R ESPONDENT DEPARTMENT BY : SHRI KESHAV SAXENA, CIT DR RESPONDENT BY : SHRI K. C. AGARWAL & SHRI SANDEEP GARG, CAS DATE OF HEARING : 21 . 0 3 .201 2 DATE OF PRONOUNCEMENT : 26 . 0 3 .201 2 O R D E R -: 2: - 2 PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE REVENUE AND CROS S OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) FOR THE ASSESSMENT YEAR 1987-88 TO 1993-94. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS OF THE CASE ARE THAT THERE WAS SEARC H AT BUSINESS PREMISES OF THE ASSESSEE U/S 132 ON 10.8.1 992. AS A RESULT OF SEARCH, WHILE FRAMING ASSESSMENT, VARIOUS ADDITIONS AND DISALLOWANCES WERE MADE IN THE FIRST ROUND, THE CIT(A) DELETED PART OF ADDITIONS SO MADE, THE TRIBUNAL RES TORED THE VARIOUS ISSUES RAISED BEFORE IT BY THE ASSESSEE AND REVENUE TO THE FILE OF ASSESSING OFFICER VIDE ORDER DATED 21 ST JANUARY, 2010 AND DIRECTED THE ASSESSING OFFICER TO RE-DECID E ALL THE ISSUES AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AGAINST THE ASSESSMENT SO FRAMED BY THE A SSESSING OFFICER AS PER THE DIRECTIONS OF TRIBUNAL, THE REVE NUE IS IN FURTHER APPEAL AGAINST THE ADDITIONS DELETED BY THE LD.CIT(A) AND THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS FO R THE SAME. MOST OF THE GROUNDS TAKEN IN APPEAL BEFORE US ARE C OMMON IN -: 3: - 3 ALL THE YEARS, WE, THEREFORE, DECIDE ALL THE APPEAL S BY THIS CONSOLIDATED ORDER. 3. IN THE ASSESSMENT YEAR 1987-88, THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF CLAIM OF INVESTMENT A LLOWANCE U/S 32A AT RS. 8,37,864/-, WHICH WAS RESTRICTED BY THE ASSESSING OFFICER TO THE EXTENT OF RS. 66,079/-. FR OM THE RECORD, WE FOUND THAT DURING THE YEAR, THE ASSESSEE HAS CLAIMED INVESTMENT ALLOWANCE ON THE NEW PLANT AND M ACHINERY INSTALLED DURING THE PERIOD 25.8.1985 TO 31.8.1986. HOWEVER, THE ASSESSING OFFICER TREATED THE PREVIOUS YEAR OF THE COMPANY AS STARTING FROM 1.4.1986 TO 31.8.1987. THUS, ONLY THE INVESTMENT ALLOWANCE PERTAINING TO NEW PLANT AND MA CHINERY INSTALLED DURING THE PERIOD 1.4.1986 TO 31.8.1986 W AS ALLOWED. AS THE PREVIOUS YEAR OF THE ASSESSEE WAS STARTING F ROM 25.8.1985 TO 31.8.1986, ALL THE INVESTMENT MADE DUR ING THIS PERIOD WAS ELIGIBLE FOR CLAIM OF DEDUCTION U/S 32A. THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FO R ALLOWING CLAIM OF INVESTMENT ALLOWANCE IN RESPECT OF INVESTM ENT MADE DURING THE PERIOD STARTING FROM 25.8.1985 TO 31.8.1 986 RELEVANT TO ASSESSMENT YEAR 1987-88 UNDER CONSIDERA TION. -: 4: - 4 4. IN THE RESULT, FIRST GROUND IN REVENUES APPEAL STA NDS DISMISSED. 5. NEXT COMMON ISSUE RAISED BY THE REVENUE IN ALL THE YEARS PERTAINS TO CIT(A)S ACTION IN ACCEPTING ASSE SSEES CLAIM U/S 80HH AND 80-I ON THE BUSINESS PROFIT OF THE COM PANY. 6. FACTS OF THE CASE ARE THAT IN THE ORIGINAL RETURN F ILED BY THE ASSESSEE, THERE WAS LOSS, THEREFORE, NO CLAIM O F DEDUCTION U/S 80HH & 80I WAS FILED. AS A RESULT OF TRADING AD DITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE FILED ITS CL AIM FOR DEDUCTION U/S 80HH & 80I ON THE PROFIT SO WORKED OU T. HOWEVER, BY RELYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LIMITED, 157 TAX MAN 1, THE ASSESSING OFFICER DECLINED THE CLAIM. BEFORE THE CI T(A) , IT WAS CONTENDED THAT REQUIREMENT FOR ELIGIBILITY OF DEDUC TION U/S 80HH & 80I, WERE FURNISHED AT THE TIME OF ASSESSMEN T PROCEEDINGS, THEREFORE, THE ASSESSING OFFICER SHOUL D HAVE ALLOWED DEDUCTION U/S 143(3). AS THE TOTAL INCOME W AS WORKED OUT AT POSITIVE INCOME, THE CIT(A) DIRECTED FOR ALL OWING CLAIM OF DEDUCTION U/S 80HH & 80I WHILE GIVING APPEAL EFFECT . WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF THE CIT( A). HOWEVER, -: 5: - 5 WE MODIFY THE DIRECTIONS GIVEN BY THE LD.CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW CLAIM OF DEDUCTION U/S 8 0HH & 80I ONLY ON THE ELIGIBLE PROFIT OF THE INDUSTRIAL UNDE RTAKING WORKED OUT AS PER LAW. 7. LAST GRIEVANCE OF THE REVENUE IN ALL YEARS RELATES TO ALLOWING TELESCOPIC CREDIT BY THE LD.CIT(A). 8. FROM THE RECORD, WE FOUND THAT BEFORE THE CIT(A), T HE ASSESSEE HAS COME OUT WITH DETAILED SUBMISSION, WHE REIN IT WAS CLAIMED THAT THEY HAVE NOT CHALLENGED THE ADDIT ION MADE ON ESTIMATION OF NET PROFIT AT 12 % TURNOVER AND TH EREBY THERE WERE ADDITIONS WITHOUT CORRESPONDING USE OF SUCH FU NDS, WHICH WERE AVAILABLE WITH THE ASSESSEE COMPANY FOR FURTHER USE AND HENCE WAS ELIGIBLE FOR ALLOWANCE OF CREDIT OF THE SAME. AFTER GIVING DETAILED FINDING IN PARA 4.14.1, THE C IT(A) DIRECTED TO ALLOW TELESCOPIC CREDIT OF SUCH ADDITIONS. PRECI SE OBSERVATIONS OF CIT(A) WAS AS UNDER :- 4.14.1 I HAVE GONE THROUGH THE SUBMISSIONS OF THE ASSESSEE AND LEGAL POSITION OF THE CASE AND F IND FORCE IN THE CONTENTION OF THE ASSESSEE AND CONSIDERING THE FACT THAT THE ASSESSEE HAS GIVEN THE -: 6: - 6 WORKING OF AVAILABLE TELESCOPIC CREDIT FOR DIFFER ENT YEARS AND ALSO THE FACT THAT THE ADDITIONS SO MAD E HAVE NOT BEEN CHALLENGED AND NO CREDIT OF SUCH ADDITIONS HAVE BEEN GRANTED IN ANY OF THE ASSESSMENT YEARS AND SO ALSO, CONSIDERING THE FAC T AND DIRECT OF THE ASSESSEE COMPANY HAS GIVEN THE UNCONDITIONAL DECLARATION THAT THEY WILL NEVER AGITATE THE POINT RELATED TO ESTIMATION OF NET PR OFIT BEFORE ANY AUTHORITY, I HEREBY ALLOW THE TELESCOP IC CREDIT FOR SUCH ADDITIONS. IT IS NOTED THAT THE ADDITIONS ON MOST OF THE ITEMS STANDS DELETED, TH E ASSESSING OFFICER WHILE GIVING APPEAL EFFECT IS DIRECTED TO TAKE INTO, ACCOUNT THE TELESCOPIC ADJUSTMENT, IF THE NEED BE, TO WORK OUT THE TOTAL INCOME. THE ISSUE IS DECIDED IN THE FAVOUR OF THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND DO NOT FIND ANY INFIRMITY IN THE PRECISE DIRECTIONS GIVEN BY THE -: 7: - 7 LD.CIT(A) FOR ALLOWING TELESCOPIC CREDIT AS PER PAR A 4.14.1 REPRODUCED HEREINABOVE. 10. IN THE RESULT, GROUNDS TAKEN BY THE REVENUE WITH RESPECT TO CLAIM OF DEDUCTION U/S 80HH & 80I AND GR ANTING OF TELESCOPIC CREDIT IN ALL THE YEARS UNDER CONSIDERAT ION ARE DISMISSED. 11. IN THE ASSESSMENT YEAR 1990-91, THE REVENUE HAS TAKEN GROUND FOR DELETING ADDITION OF RS. 2,40,673/ - MADE ON ACCOUNT OF UNEXPLAINED, UNSECURED LOANS OF RS. 4,80 ,673/-. 12. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 2,76,485/- IN THE ASSESSMENT YEAR 1987-88 AND RS. 4,80,673/- IN THE ASSESSMENT YEAR 1990-91 IN RESPEC T OF LOAN TAKEN FROM SHRI NAMDEO PANJWANI, WHO WAS MANAGING DIRECTOR OF THE COMPANY. THE ASSESSEE HAS FURNISHED NOT ONLY LOAN CONFIRMATION LETTER BUT ALSO ASSESSMENT ORDER OF SHRI NAMDEO PANJWANI. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ADDITION OF RS. 2.40 LAKHS AND DELETE D ADDITION OF RS. 2,40,673/- AFTER HAVING THE FOLLOWING OBSERV ATIONS :- -: 8: - 8 4.2.1 THE ISSUE IS CONSIDERED. FROM THE RECORDS, I FIND THAT IN ASSESSMENT YEAR 1987-88, THE ADDITION AMOUNTING TO RS. 2,76,485/- WAS MADE TOWARDS THE UNEXPLAINED LOANS FROM SHRI N.P.PANJWANI AND IN ASSESSMENT YEAR 1989-90 THE ADDITION OF RS. 9,19,667/- WERE MADE AS UNEXPLAINED LOAN FROM SMT. JAYSHRI PANJWANI AND SHRI KAMAL PANJWANI. THE ASSESSEE HAS NOT CHALLENGED THIS ADDITION OF RS. 9,19,667/-. FURTHER , IN ASSESSMENT YEAR 1990-91, THE TOTAL LOAN FROM SHRI N.P. PANJWANI, SMT. JAYSHRI PANJWANI AND SHRI KAMAL PANJWANI AT THE CLOSE OF THE YEAR STOOD AT RS. 11,59,667/-. ALL THE THREE PERSONS ARE FAMIL Y MEMBERS. IT IS CONTENDED THAT IN ASSESSMENT YEAR 1990-91, THE ADDITIONS SHOULD HAVE BEEN RESTRICTED TO THE DIFFERENCE AMOUNT OF RS. 2,40,000/- AS THE LOAN FROM SHRI JAYSHRI PANJWANI AMOUNTING TO RS. 5,80,673/- IN ASSESSMENT YEAR 1989-90 HAD REDUCED TO RS. 3,40,000/- IN 1990-91 AND AS SUCH THE DIFFERENCE RS. 2,40,673/- AND THE DIFFERENCE -: 9: - 9 WAS AVAILABLE IN THE FAMILY WHICH WAS RE-DEPOSITED IN THE NAME OF SHRI N.P.PANJWANI. I HAVE CONSIDERED THE FACT NARRATED BY THE ASSESSEE. I DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 1987-88 AND AS SUCH THE ADDITION OF RS. 2,76,485/- TOWARDS UNEXPLAINED LOAN FROM SHRI N.P.PANJWANI STANDS CONFIRMED. IN RESPECT OF ASSESSMENT YEAR 1990-91, I DO AGREE WITH THE CONTENTION RAISED BY THE ASSESSEE THAT THE ADDITIONS TO THE EXTENT OF DIFFERENCE AMOUNT OF RS. 2,40,000/- COULD HAVE BEEN MADE. IN VIEW THEREOF, THE ADDITION TO THE EXTENT OF RS. 2,40,000/- IS CONFIRMED IN ASSESSMENT YEAR 1990-91. THE ASSESSEE WOULD GET RELIEF OF RS. 2,40,673/- IN THAT YEAR. 13. FROM THE RECORD, WE FOUND THAT AMOUNT OF LOAN WAS GIVEN BY THE MANAGING DIRECTOR OF THE COMPANY, SHRI N.P.PANJWANI. AS PER FINDING RECORDED BY CIT(A), N. P. PANJWANI WAS HAVING FUNDS OF RS. 2,40,673/- OUT OF ADDITION MADE IN THE NAME OF OTHER FAMILY MEMBERS. DURING THE ASSESS MENT -: 10: - 10 YEAR 1990-91, THE ASSESSEE COMPANY HAS CREDITED ONL Y RS. 2.40 LAKHS OUT OF TOTAL BALANCE OF RS. 4,80,673/-. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F CIT(A) FOR CONFIRMING ADDITION OF RS. 2,40,000/- AND DELETING THE BALANCE ADDITION OF RS. 2,40,673/-, WHICH WAS FOUND TO BE A VAILABLE WITH N.P. PANJWANI. 14. IN THE ASSESSMENT YEAR 1992-93, THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CIT(A) IN ACCEPTING ASSESSEES CLAIM REGARDING DEPOSIT IN BANKS AMOUNTING TO RS. 1 ,42,000/- RELYING ON THE BANK STATEMENT. 15. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT ADDITIONS W ERE MADE OF CASH CREDIT IN THE CASH BOOK SEIZED IN ANNEXURE C/32 OF RS. 37,000/- IN ASSESSMENT YEAR 1991-92, RS. 5,38,000/- ( RS. 4,50,000/- PLUS RS. 88,000/-) IN ANNEXURE C/36 AND RS. 1,42,000/- ( RS. 1,00,000/- PLUS RS.42,000/-) IN AN NEXURE B/11 AND B/12 IN ASSESSMENT YEAR 1992-93. THE ASSES SEE CAME UP WITH REPLY THAT RS. 37,000 CREDITED IN THE CASH BOOK IN ANNEXURE C/32 WAS RECEIVED FROM DEBTORS AS THE S ALES OF M/S. PANJWANI PLASTICS AND POLYESTERS. SIMILARLY, I T WAS STATED -: 11: - 11 THAT RS. 4,50,000/- AND RS. 88,000/- WERE RECEIVED FROM SHRI JAGDISH BHUTIA AND THESE ARE ALSO RECEIVED ON ACCOU NT OF SALES REALIZATION. IT WAS FURTHER EXPLAINED THAT RS. 1,00 ,000/- AND RS. 42,000/- FOUND IN ANNEXURE B/11 AND B/12 IS NOT CASH CREDIT BUT, CASH DEPOSITED IN THE BANK OUT OF THE C ASH BALANCE AVAILABLE IN THE CASH BOOK. THE ASSESSEE FURNISHED THE COPY OF BANK ACCOUNT AND THE ORDER OF ASSESSMENT YEAR 1989- 90 IN THIS CONTEXT. 16. BY THE IMPUGNED ORDER, THE CIT(A) DELETED ADDITION OF RS. 1,42,000/- BY OBSERVING THAT DEPOSIT IN THE BAN K ACCOUNT WAS NOT CASH CREDIT BUT SALES REALIZATION. HOWEVER, THE CIT(A) CONFIRMED THE ADDITION OF RS. 37,000/- IN THE ASSES SMENT YEAR 1991-92 BY OBSERVING THAT SALES TRANSACTION WAS NOT FOUND RECORDED IN THE SEIZED SALES REGISTER A/1, A/2 & A /3. THE LD.CIT(A) AT PARA 4.9.1 IN ASSESSMENT YEAR 1992-93 ALSO CONFIRMED ADDITION OF RS. 5,38,000/-. THE ASSESSEE HAS NOT FILED ANY CROSS OBJECTION AGAINST ADDITION CONFIRME D BY CIT(A). NOTHING WAS ALSO BROUGHT ON RECORD BY LD. SENIOR DR TO DISLODGE THE FINDING OF CIT(A) THAT DEPOSIT OF RS. 1,42,000/- IN -: 12: - 12 BANK ACCOUNT WAS OUT OF SALE PROCEEDS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 17. IN THE ASSESSMENT YEAR 1993-94, THE REVENUE IS AGGRIEVED FOR DELETION OF ADDITION OF RS. 5,00,577/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C. IN THIS REGARD, THE ASSESSING OFFICER FOUND THAT AMOUNT OF EXPENSES DEB ITED ON ACCOUNT OF PUBLIC ISSUE WAS RS. 41,80,021/-, WHEREA S AMOUNT OF EXPENDITURE AS PER SEIZED MATERIAL WAS ONLY RS.3 6,79,444/-. THUS, THE DIFFERENCE OF RS. 5,00,570/- WAS TREATED AS UNEXPLAINED. CIT(A) DELETED THE ADDITION BY OBSERVI NG THAT THE ASSESSEE HAS PROPERLY DEBITED EXPENDITURE ON PUBLIC ISSUE IN THE BOOKS OF ACCOUNT, NO DISALLOWANCE CAN BE MADE O NLY ON THE PLEA THAT IN THE SEIZED MATERIAL LOWER EXPENSES WERE FOUND RECORDED. WHATEVER EXPENDITURE WERE INCURRED, THE S AME HAVE BEEN DULY CLAIMED IN THE PROFIT AND LOSS ACCOUNT. A CCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION OF RS. 5,00,570/- ON ACCOUNT OF PUBLIC ISSUE EXPENSES. -: 13: - 13 18. NEXT GRIEVANCE OF THE REVENUE IN THE ASSESSMENT YEA R 1993-94 RELATES TO DELETION OF ADDITION OF RS. 7,05 ,475/- ON ACCOUNT OF VALUATION OF STOCK. 19. FROM THE RECORD, WE FOUND THAT ON THE DATE OF SEARC H, STOCK OF THE ASSESSEE WAS PHYSICALLY TAKEN AND THE SAME WAS VALUED AT RS. 17,05,475/-. BY THE IMPUGNED ORDER, T HE CIT(A) DELETED THE ADDITION OF RS. 7,05,475/- BY OBSERVING THAT THE ASSESSEE WAS HAVING CLOSING STOCK VALUING RS. 22,07 ,850/- AS ON 31 ST MARCH, 1992. HOWEVER, NO RECONCILIATION OF PURCHAS E, SALE AND CLOSING STOCK WAS GIVEN FOR THE PERIOD 1.4 .1992 TO 10.8.1992. THE CIT(A) CONFIRMED ADDITION OF RS. 10 LAKHS AND DELETED REMAINING AMOUNT OF RS. 7,04,575/-. BOTH TH E ASSESSEE AND REVENUE ARE BEFORE US. 20. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. ADDITION HAS BEEN MADE BY THE ASSESSING OF FICER ON THE BASIS OF VALUATION OF STOCK ARRIVED AT AT THE T IME OF SEARCH ON 10.8.1992. AS THE ASSESSEE COULD NOT PROPERLY EX PLAIN AS TO WHICH FIRM THE STOCK WAS BELONGING NOR COULD RECONC ILE THE SAME WITH THE ENTRIES IN THE BOOKS OF ACCOUNT, THE ASSESSING -: 14: - 14 OFFICER ADDED ENTIRE AMOUNT OF STOCK FOUND DURING C OURSE OF SEARCH AS UNEXPLAINED INCOME OF THE ASSESSEE. 21. THE CIT(A) ON ESTIMATE BASIS DELETED THE ADDITION O F RS. 7,05,475/- AND CONFIRMED THE BALANCE ADDITION O F RS. 10 LAKHS. NO DEFINITE BASIS HAS BEEN GIVEN BY THE LD.C IT(A) FOR DELETING THE ADDITION OF RS. 7,05,475/-. THE CIT(A) HIMSELF HAS STATED IN HIS APPELLATE ORDER THAT THE ASSESSEE HAS NOT FURNISHED ANY RECONCILIATION OF PURCHASE, SALE AND CLOSING STOCK BETWEEN THE PERIOD 1.4.1992 TO 10.8.1992. THE RE APPEARS TO BE NO BASIS FOR ARRIVING AT CONCLUSION T HAT THE ASSESSEE HAS EXPLAINED STOCK OF RS. 7,05,475/-. WHE NEVER ANY DISCREPANCY IS FOUND IN THE VALUATION OF STOCK PHYS ICALLY TAKEN DURING SURVEY OR SEARCH AS COMPARED TO THE STOCK RE CORDED IN THE REGULAR BOOKS OF ACCOUNT, THE ONUS IS ON THE AS SESSEE TO EXPLAIN THE DIFFERENCE. MERELY BY OBSERVING THAT AS ON 31 ST MARCH 1992, THE ASSESSEE WAS HAVING STOCK OF RS. 25 ,05,325/- , IT CANNOT BE SAID THAT THE STOCK AS ON THE DATE O F SEARCH, WAS EXPLAINED TO THE TUNE OF RS. 7,05,475/-, WITHOUT FI LING ANY RECONCILIATION OF PURCHASES AND SALE MADE DURING TH E PERIOD 1.4.1992 TO 10.8.1992. THE FACT THAT THE ASSESSEE W AS ALSO -: 15: - 15 ENJOYING WORKING CAPITAL LIMIT OF RS. 23.75 LAKHS F ROM STATE BANK OF INDORE, AGAINST HYPOTHECATION OF STOCK, ALS O CANNOT BE BRUSHED ASIDE, WHICH IS AN IMPORTANT EVIDENCE OF AS SESSEE HAVING POSSESSED STOCK IN TERMS OF WORKING CAPITAL LIMIT AVAILED BY HIM AGAINST THE SAID STOCK. IN THE INTER EST OF JUSTICE AND FAIR PLAY, WE RESTORE THE GROUND RAISED BY THE ASSESSEE AND REVENUE BOTH TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO THE ASSESSEE TO FURNISH RECONCILIATION OF STOCK BY INCORPORATING OPENING STOCK AS ON 31.3.1992 AND THE PURCHASE AND SALE MADE DURING THE PERIOD 1.4.92 TO 10.8.92. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUE A FRESH IN TERMS OF OUR ABOVE OBSERVATIONS. 22. IN THE CROSS OBJECTION FILED FOR THE ASSESSMENT YEA R 1987-88, THE ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 1.50 LAKHS INVESTED BY SMT. SAPNA PANJWANI AND RS. 1,10, 000/- BY YESHWANT PANJWANI. AS THE AMOUNT HAS BEEN INVESTED BY DIRECTORS/CLOSE RELATIVES OF THE DIRECTOR IN SHARE CAPITAL OF THE ASSESSEE WHOSE IDENTITY IS NOT IN DISPUTE, IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LO VELY EXPORTS, WE DO NOT FIND ANY MERIT IN THE ADDITION O F THIS -: 16: - 16 AMOUNT IN THE HANDS OF THE ASSESSEE COMPANY. HOWEVE R, THE DEPARTMENT IS AT LIBERTY TO EXAMINE THE AVAILABILIT Y OF FUNDS IN THE HANDS OF RESPECTIVE PERSONS SMT. SAPNA PANJWANI AND YESHWANT PANJWANI WHO HAVE CONTRIBUTED THE AMOUNT A S SHARE CAPITAL. WE DIRECT ACCORDINGLY. 23. OTHER CROSS OBJECTIONS WERE NOT PRESSED BY THE LD. AUTHORIZED REPRESENTATIVE DURING THE COURSE OF HEA RING AND THE SAME ARE GENERAL IN NATURE, THEREFORE, DISMISSE D IN LIMINE. 24. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND CROSS OBJECTIONS ARE ALLOWED IN PART IN TERMS INDIC ATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2012. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH MARCH, 2012. CPU* 2126