ASHWIN S. MEHTA, MUMBAI V. DCIT CC 23, MUMBAI

ITA 1203/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84242 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 07-10-2014
• Assessment Year: 1992-1993
• Appeal Filed On: 21-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL SPL
• Keywords: Related party transaction; Document seized; Principle of natural justice; Additional evidence; Documents seized
• Section: 234B; 144

Judgement Text

, ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI , !' , # $% & BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO.1203/MUM/2012 ' ' ' ' / ASSESSMENT YEAR: 1992-93 SHRI ASHWIN S.MEHTA, 32, MADHULI, DR. A.B.ROAD, WORLI, MUMBAI-400018 VS. DCIT,CC-23, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 (ASSESSEE) (REVENUE) PAN : ABAPM 2121 M ASSESSEE BY : SHRI VIJAY MEHTA & SHRI DHARMESH SHAH REVENUE BY : DR. P. DANIEL-SPL. COUNSEL DATE OF HEARING : 07/10/2014 DATE OF PRONOUNCEMENT : 10/11/2014 O R D E R PER JOGINDER SINGH: JM THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 30/12/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ASSES SING OFFICER HAS 2 SHRI ASHWIN S.MEHTA . . NOT COMPLIED WITH THE PRINCIPLES OF NATURAL JUSTICE EITHER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR DURING THE COURSE OF THE APPELLATE PROCEEDINGS. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT DETERMINING THE INCOME BASE D ON THE FINAL BOOKS OF ACCOUNT THEREBY CONFIRMING THE MANNER OF D ETERMINATION OF INCOME BY THE ASSESSING OFFICER. THE LEARNED CIT (A) OUGHT TO HAVE ACCEPTED TAXABLE INCOME AS DISCLOSED IN THE BO OKS OF ACCOUNTS DRAWN BY THE APPELLANT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS BY FAILING TO SEEK COMPLIANCE WITH THE ORDER OF HON'BLE INCOME TAX APPELLATE TRIBUNAL. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN FAILING TO APPRECIATE THAT THE PRESUMPTION OF SALE MADE BY THE ASSESSING OFFICER FOR SHARES IN SH ORTAGE IS CONTRARY TO FACTS AND LAW AND IN ANY EVENT, SUCH A PRESUMPTION OF SALE WAS NOT LIABLE TO BE MADE IN THE RELEVANT YEAR . 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER RELYING ON THE VARIOUS SOURCES OF INFORMATION. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE METHOD OF DETERMI NATION OF INCOME OF THE APPELLANT BY THE ASSESSING OFFICER. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ENTIR E ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROFIT ON SA LE OF SHARES IN SHORTAGE AMOUNTING TO RS.367,29,96,372/- IS INCORRECT AND UNJUSTIFIED. 8. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION ON ACCO UNT OF PROFIT ON 3 SHRI ASHWIN S.MEHTA . . SALE OF SHARES IN SHORTAGE WITHOUT EXCLUDING THE SH ARES PURCHASED BY THE APPELLANT FOR CLIENTS. 9. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING CREDIT IN RESPECT OF SHARES SOLD BY THE APPELLANT BETWEEN THE PERIOD 01.04.1992 AND 08. 06.1992. 10. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING CREDIT IN RESPECT OF SHARES FOR WHICH THE DELIVERIES ARE YET TO BE RECEIVED. 11. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING CREDIT IN RESPECT OF SHARES WHICH ARE PLACED AS SECURITY WITH THE LENDERS. 12. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING CREDIT IN RESPECT OF UNREGISTERED SHARES DISCLOSED BY LATE SHRI HARSHAD S. MEHTA TO T HE CUSTODIAN ON 31.01.1995. 13. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING CREDIT IN RESPECT OF SHARES WHICH ARE REPORTED BY THE BROKERAGE FIRMS AS MISSING, STO LEN, LOST, MISPLACED, ETC. 14. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN UPHOLDING THAT THE CLOSING RATES AS ON 31.03.1992 W ERE APPLICABLE FOR DETERMINING PROFIT ON SALE OF SHARES. 15. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ENTIR E ADDITION OF RS.49,01, 92,1141 - ON ACCOUNT OF SHARE MARKET OVER SOLD POSITION AS COMPUTED IN ANNEXURE A-1 IS INCORRECT AND UNJUST IFIED. 16. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.2 4,76,36,178/- ON ACCOUNT OF UNEXPLAINED MONEY. 17. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN 4 SHRI ASHWIN S.MEHTA . . LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.5 6,35,451 1 - ON ACCOUNT OF SHARE MARKET SPECULATIVE PROFIT. 18. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.6 0, 99,5841 - ON ACCOUNT OF SHARE MARKET BADLA INCOME. 19. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.5 5,33,841 1 - ON ACCOUNT OF DIVIDEND AND INTEREST INCOME. 20. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING SET OFF OF ADDITIO N ON ACCOUNT OF SOURCE AGAINST THE APPLICATION OF SUCH SOURCE BASED ON TELESCOPING THEORY. 21. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF DEDUCTION ON ACCOUNT OF INTEREST EXPENDITURE CLAIMED BY THE APPE LLANT. 22. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN REJECTING THE CLAIM OF DEDUCTIO N OF OTHER EXPENSES AS PER THE BOOKS OF ACCOUNT. 23. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING DEDUCTION U/S. 48 OF THE ACT WHILE DETERMINING THE INCOME OF THE APPELLANT. 24. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING ENHANCEMENT OF INCOM E AS PROPOSED BY THE ASSESSING OFFICER, WHICH IS ILLEGAL , INVALID AND BEYOND HIS JURISDICTION. 25. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT CONSIDERING ALL THE SUBMISS IONS OF THE APPELLANT AND THEREBY VIOLATING THE PRINCIPLES OF N ATURAL JUSTICE WHILE MAKING ENHANCEMENT OF INCOME OF THE APPELLANT . 26. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN 5 SHRI ASHWIN S.MEHTA . . LAW AND IN FACTS IN MAKING ENHANCEMENT OF INCOME OF THE APPELLANT AMOUNTING TO RS.164,60,46,992/- ON ACCOUN T OF ALLEGED DIFFERENCE IN THE BOOKS OF ACCOUNTS OF LATE SHRI HA RSHAD S. MEHTA AND THAT OF THE APPELLANT. 27. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST U/S. 234A AND 234B OF THE ACT. 2. THE FIRST GROUND RAISED BY THE ASSESSEE IS THAT THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACTS AN D THUS THERE IS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. DURING HEARING THE LD. COUNSEL FOR THE ASSESSEE SHRI VIJAY MEHTA, DID NOT PRESS TH IS GROUND, BEING GENERAL IN NATURE, THEREFORE, THIS GROUND IS DISMIS SED AS NOT PRESSED. 3. THE NEXT GROUND PERTAINS TO NOT DETERMINING THE INCOME BASED ON FINAL BOOKS OF ACCOUNT AND THUS CONFIRMING THE MANN ER OF DETERMINATION OF INCOME AS DONE BY THE ASSESSING OFFICER. IT WAS CONTENDED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ACCEPTED TAXABLE INCOME AS DISCLOSED IN THE BOOKS OF ACCOUNTS DONE B Y THE ASSESSEE. ON THE OTHER HAND, THE LD. SPECIAL COUNSEL, DR. P. DAN IEL, DEFENDED THE CONCLUSION, DRAWN IN THE IMPUGNED ORDER. WE HAVE C ONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. IDENTICALLY IN THE CASE OF LATE SHRI HARSHAD S. MEHTA VS. DCIT I N I .T.A. NO. 3699/MUM/2010 (ASSESSMENT YEAR: 1994-95) ORDER DT. 29/10/2014, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE FOR STA TISTICAL PURPOSES. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUND ER FOR READY REFERENCE. 2. THE ASSESSEE HAS RAISED AS MANY AS 27 GROUNDS O F APPEAL. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ENTIRE 6 SHRI ASHWIN S.MEHTA . . ISSUE REVOLVES AROUND THE FACT THAT THE BOOKS OF AC COUNTS HAVE BEEN REJECTED BY THE REVENUE AUTHORITIES. IT IS THE SAY OF THE LD. COUNSEL THAT IF THE BOOKS OF ACCOUNTS HAVE BEEN PROPERLY EX AMINED, THE PICTURE WOULD HAVE BEEN DIFFERENT. 3. REBUTTING TO THIS, THE LD. DEPARTMENTAL REPRESEN TATIVE STRONGLY SUBMITTED THAT THE BOOKS OF ACCOUNTS HAVE BEEN PROP ERLY EXAMINED AND THEREAFTER REJECTED BY THE LOWER AUTHORITIES. 4. THE ASSESSMENT IN THIS CASE WAS ORIGINALLY COMPL ETED ON 27.3.1995 AT A TOTAL INCOME OF RS. 214 CRORES. THE FIRST APPELLATE AUTHORITY PASSED HIS ORDER ON 28.2.2003 UPHOLDING T HE ASSESSMENT ORDER. THE MATTER TRAVELLED UPTO THE TRIBUNAL. TH E MAIN CONTENTION BEFORE THE TRIBUNAL WAS IN RESPECT OF THE ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF BOOKS OF ACCOUNTS. THE TR IBUNAL VIDE ITS ORDER DT. 11.7.2008 IN ITA NO. 3664/M/03 AND C.O. NO. 211 /M/03 SET ASIDE THE APPEAL AND THE CROSS OBJECTION TO THE FILES OF T HE LD. CIT(A) FOR ADJUDICATING THE ISSUES AFRESH AFTER CONSIDERING THE BOOKS OF ACCOUNTS OF THE ASSESSEE. ADMITTEDLY, THE TRIBUNAL WAS PLEA SED TO ADMIT THE ADDITIONAL EVIDENCE IN THE FORM OF BOOKS OF ACCOUNT S AND RESTORE THE MATTER TO THE FILES OF THE LD. CIT(A) TO EXAMINE TH E SAME. 4.1. IN TERMS OF THE DIRECTIONS OF THE TRIBUNAL, TH E BOOKS OF ACCOUNTS WERE SUBMITTED BY THE ASSESSEE WHICH WERE FORWARDED TO THE AO BY THE LD. CIT(A). IT WOULD BE PERTINENT TO MENTION H ERE THAT PURSUANT TO THE ORDER OF THE HONBLE SPECIAL COURT DT. 16.10.20 03 ON THE CUSTODIANS REPORT DT. 1ST OCTOBER, 2003, THE SPECI AL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) AC T, 1992 APPOINTED M/S. VYAS & VYAS, CHARTERED ACCOUNTANTS FOR PREPARI NG AND AUDITING THE ACCOUNTS FOR MR. HARSHAD S. MEHTA AND M/S. HAR SHAD S. MEHTA WHO WERE NOTIFIED ENTITIES UNDER THE SPECIAL COURT (TORTS) ACT, 1992 FOR THE FINANCIAL YEAR ENDED 31.3.1991, 31.3.1992 A ND FOR THE PERIOD ENDING 8.6.1992. 5. THE LD. CIT(A) CONSIDERED THE REPORT OF THE SPEC IAL AUDITORS AND THE OBSERVATIONS OF THE AO AND FORMED A BELIEF THAT 7 SHRI ASHWIN S.MEHTA . . 1) THE BOOKS OF ACCOUNTS ARE NOT CONTEMPORANEOUS AND INORDINATELY BELATED 2) THE BOOKS OF ACCOUNTS ARE UNAUDITED. 3) THE BOOKS OF ACCOUNTS ARE NOT COMPLETE. 4) THE BOOKS OF ACCOUNTS OF THE TRANSACTING PARTIES AL SO SUFFER FROM SEVERAL INFIRMITIES. 5) THE BOOKS OF ACCOUNTS ARE NOT BACKED BY PRIMARY DOCUMENTARY EVIDENCE. 6) THE BOOKS OF ACCOUNT SHOW IMPROBABLE ENTRIES 7) THE BOOKS OF ACCOUNT ARE ALSO REJECTED BY M/S. VYAS AND VYAS, CHARTERED ACCOUNTANTS APPOINTED BY THE HONBLE SPECIAL COURT. 6. THE LD. DR STRONGLY SUBMITTED THAT THE LD. CIT(A ) HAS NOT ACCEPTED THE BOOKS OF ACCOUNTS AFTER GIVING COGENT REASONS BASED ON THE EXAMINATION OF THE SPECIAL AUDITORS AS WELL AS THE AO. 7. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBM ITTED THAT THE BOOKS WERE NOT EVEN LOOKED UPON BY THE LOWER AUTHOR ITIES AND THEREFORE REJECTION OF THE SAME IS NOT PROPER IN TH E EYES OF LAW. 8. THE LD. DR CONTINUED TO SUBMIT THAT THE REASONS GIVEN FOR REJECTING THE BOOKS OF ACCOUNTS ARE ONLY AFTER THORO UGH EXAMINATION OF THE BOOKS AND THEREFORE THE REJECTION OF THE BOO KS DESERVES TO BE UPHELD. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE RIV AL SUBMISSIONS. WE HAVE ALSO CAREFULLY PERUSED THE OR DERS OF THE LOWER AUTHORITIES, THE EARLIER ORDER OF THE TRIBUNAL AND THE RELEVANT RELATED DOCUMENTS BROUGHT ON RECORD BEFORE US. IT IS NOT I N DISPUTE THAT IN THE FIRST ROUND OF LITIGATION, THE TRIBUNAL HAS ADM ITTED THE BOOKS OF ACCOUNTS AS ADDITIONAL EVIDENCE AND THE MATTER WAS RESTORED TO THE FILES OF THE LD. CIT(A) FOR PROPER EXAMINATION OF T HE BOOKS. 9.1. LET US NOW EXAMINE THE REASONS GIVEN FOR REJECT ING THE BOOKS OF ACCOUNTS. THE FIRST REASON IS THAT THE BOOKS OF AC COUNTS ARE NOT CONTEMPORANEOUS. IN OUR UNDERSTANDING OF THE FACTS OF THE CASE IN HAND THERE IS NO DENIAL THAT THE BOOKS OF ACCOUNTS ARE NOT CONTEMPORANEOUS. IT IS AN UNDISPUTED FACT THAT THE BOOKS OF ACCOUNTS 8 SHRI ASHWIN S.MEHTA . . HAVE BEEN PREPARED MUCH AFTER THE CLOSE OF THE ACCO UNTING YEAR. THIS FACT IS ALSO ADMITTED BY THE SPECIAL COURT, JANKIRA MAN COMMITTEE, JOINT PARLIAMENTARY COMMITTEE AND ALSO BY THE ASSES SEE. MERELY BECAUSE THE BOOKS ARE NOT CONTEMPORARY CANNOT BE A REASON TO REJECT THE BOOKS. ALL THAT HAS TO BE SEEN IS WHETHER THE BOOKS HAVE BEEN PREPARED ON THE BASIS OF THE CONTEMPORANEOUS DOCUME NTS. AT THIS STAGE, IT IS PERTINENT TO MENTION THAT THE BOOKS HA VE BEEN PREPARED FROM THE DOCUMENTS/DETAILS WHICH ARE IN POSSESSION OF THE CUSTODIAN/REVENUE AUTHORITIES. THE LD. CIT(A) HAS ALSO MENTIONED THAT NO BOOKS OF ACCOUNTS WERE FOUND DURING THE COU RSE OF THE SEARCHES IN 1990 OR IN 1992 WHICH MEANS THAT THE AS SESSEE WAS NEVER MAINTAINING CONTEMPORARY PROPER BOOKS OF ACCOUNTS. THIS OBSERVATIONS OF THE LD. CIT(A) IS AGAINST THE FACTS OF THE CASE BECAUSE THE AO AT PARA 3.4 ON PAGE-5 OF HIS ASSESSMENT ORDE R HAS OBSERVED AS UNDER: DURING THE COURSE OF SEARCH AT VARIOUS PREMISES OF THE ASSESSEE IN 1990 AND 1992 NO BOOKS OF ACCOUNTS WERE PRODUCED BY HIM. IT WAS FOUND THAT MOST OF THE DETAILS OF TRANSACTIONS WERE MAINTAINED BY THE ASSESSEE ON A NUMBER OF COMPUTERS. HENCE THE DATA FROM THE COMPUTERS WERE COPIED AND SEIZED. ONE COPY OF SUCH SEIZED DATA HAS BEEN PROVIDED TO THE ASSESSEE. THE SEIZED DATA WAS ANALYSED BUT IT WAS FOUND THAT COMPLETE SHARE MARKET TRANSACTIONS WERE NOT AVAILABLE IN THE SEIZED DATA. MOREOVER, THE DATA AFTER THE DATE OF THE SEARCH WAS NOT THERE. HENCE, COMPLETE BOOKS OF ACCOUNTS COULD NOT BE GENERATED FROM THE SEIZED DATA. IN THE ABSENCE OF COMPLETE BOOKS OF ACCOUNT AND VALID RETURN OF INCOME, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED U/S. 144 OF THE I.T. ACT ON THE BASIS OF INFORMATION AVAILABLE IN THE SEIZED COMPUTER DATA AND OTHER RECORDS AND INFORMATION GATHERED FROM VARIOUS SOURCES. 9 SHRI ASHWIN S.MEHTA . . THEREFORE, REJECTING THE BOOKS OF ACCOUNTS ON THIS G ROUND IS NOT JUSTIFIED BECAUSE THE BOOKS HAVE ACTUALLY BEE N PREPARED MUCH AFTER THE CLOSE OF THE ACCOUNTING YEAR. WHAT HAS TO BE KEPT IN MIND IS THAT THE BOOKS OF ACCOUNTS HAVE BEE N PREPARED ON THE BASIS OF THE DOCUMENTS WHICH ARE STILL IN TH E POSSESSION OF THE AUTHORITIES. 10. THE SECOND REASON IS THAT THE BOOKS OF ACCOUNTS ARE UNAUDITED. AT THE OUTSET, WE HAVE TO SAY THAT THE B OOKS CANNOT BE REJECTED MERELY BECAUSE THEY ARE UNAUDITED. ALL THAT HAS TO BE SEEN IS THAT WHETHER THE BOOKS OF ACCOUNTS GIVE A TRUE AND FAIR VIEW OR NOT. THERE ARE SEPARATE PROVISIONS IN THE INCOME TAX ACT TO PENALIZE THE ASSESSEE FOR NOT GETTING IT S BOOKS OF ACCOUNTS AUDITED, MERELY BECAUSE THE AUDIT REPORT I S NOT THERE, THE BOOKS CANNOT BE REJECTED. 11. THE THIRD REASON IS THAT THE BOOKS OF ACCOUNTS ARE NOT COMPLETE. IF THE BOOKS OF ACCOUNTS HAVE NEVER BEEN EXAMINED HOW CAN THE REVENUE AUTHORITIES SAY THAT THE BOOKS ARE NOT COMPLETE. THE REVENUE AUTHORITIES SHOULD HAVE SPEC IFICALLY POINTED OUT WHICH PART OF THE BOOKS IS NOT COMPLETE . WITHOUT POINTING OUT ANY SPECIFIC/DIRECT MISTAKE, A GENERAL STATEMENT STATING THAT THE BOOKS ARE NOT COMPLETE WOULD NOT D O ANY JUSTICE. THE LD. CIT(A) HAS OBSERVED THAT ALL THE B ANK ACCOUNTS HAVE NOT BEEN CONSIDERED IN THE BOOKS OF ACCOUNTS. IT IS THE SAY OF THE LD. COUNSEL THAT ALL THE BANK ACCOUNTS HAVE BEEN CONSIDERED WHICH CAN BE VERIFIED WITH THE INFORMATI ON FROM THE CUSTODIAN AS ALL THE BANK ACCOUNTS OF THE ASSESSEE ARE ATTACHED UNDER THE ORDERS OF THE SPECIAL COURT. WE FIND THA T THE OBSERVATION OF THE LD. CIT(A) IS VERY GENERAL. THE LD. CIT(A) SHOULD HAVE POINTED OUT WHICH BANK ACCOUNT IS NOT INCORPORATED IN THE BOOKS OF ACCOUNTS. THIS REASON IS ALSO NOT ACCEPTABLE. 10 SHRI ASHWIN S.MEHTA . . 12. THE FOURTH REASON GIVEN IS THAT THE BOOKS OF AC COUNTS OF THE TRANSACTING PARTIES ALSO SUFFERED FROM SEVERAL INFIRMITIES. THE LD. CIT(A) OBSERVED THAT MOST OF THE ENTRIES IN THE BOOKS OF ACCOUNTS ARE IN THE FORM OF JOURNAL ENTRIES IN THE N AMES OF RELATED PERSON. WE FAILED TO UNDERSTAND HOW CAN TH IS BE A REASON FOR REJECTING THE BOOKS OF ACCOUNTS. WHEN A PERSON IS MAINTAINING BOOKS OF ACCOUNTS ON MERCANTILE SYSTEM OF ACCOUNTING, OBVIOUSLY, MOST OF THE ENTRIES WOULD BE IN THE FORM OF JOURNAL ENTRIES. FURTHER, WE FIND THAT IN THE CA SES OF OTHER MEMBERS OF THE HARSHAD MEHTA GROUP, THE TRIBUNAL HA S RESTORED THE MATTER TO THE FILES OF THE LD. CIT(A) FOR VERIFICATION OF THE BOOKS OF ACCOUNTS. 12.1. THE LD. DR HAS NOT BROUGHT ON RECORD THE REJEC TION OF BOOKS OF ACCOUNTS BY THE TRIBUNAL IN ANY OF THE CAS ES OF THE FAMILY MEMBERS. THEREFORE, THIS REASON IS ALSO NOT ACCEPTABLE. 13. THE FIFTH REASON IS THAT THE BOOKS OF ACCOUNTS ARE NOT BACKED BY PRIMARY DOCUMENTARY EVIDENCE. ONCE AGAIN , THE LD. CIT(A) OBSERVED THAT THE BOOKS OF ACCOUNTS ARE NOT AUDITED AND ARE SELF CERTIFIED THEREFORE THE ACCOUNTS CANNOT B E HELD AS AUTHENTIC . AS MENTIONED ELSEWHERE, THE BOOKS OF A CCOUNTS HAVE BEEN PREPARED ON THE BASIS OF THE EVIDENCES WH ICH ARE SEIZED BY THE AUTHORITIES WHICH MEAN THAT THEY ARE STILL IN THE POSSESSION OF THE DEPARTMENT/CUSTODIAN. THERE IS N O SPECIFIC INSTANCE POINTED OUT WHICH IS NOT BACKED BY ANY PRI MARY DOCUMENTARY EVIDENCE. IT IS ALSO NOT CLEAR WHETHER THE ASSESSEE WAS EVER CALLED FOR TO EXPLAIN ANY OF THE TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS. IN THE ABSENCE OF THE VERIFICATION OF PRIMARY DOCUMENT VIS--VIS ENTRIES IN THE BOOKS, ASSESSEES ACCOUNTS CANNOT BE TREATED AS UNRELIABLE . 14. THE SIXTH REASON IS THAT THE BOOKS OF ACCOUNT S HOW IMPROBABLE ENTRIES. THE LD. CIT(A) HAS OBSERVED TH AT THE ASSESSEE HAS SHOWN UNIFORM WITHDRAWAL OF RS. 10,000 /- AT EVERY MONTH END WHICH IS HIGHLY IMPROBABLE . NOW A GAIN THIS CANNOT BE A REASON FOR REJECTING THE BOOKS BECAUSE I T IS A 11 SHRI ASHWIN S.MEHTA . . COMMON PRACTICE TO DEBIT THE CAPITAL ACCOUNT FOR PE RSONAL DRAWINGS EVERY MONTH. THE REVENUE AUTHORITIES SHOU LD HAVE BEEN MORE SPECIFIC IN ELABORATING THE ENTRIES WHICH WERE IMPROBABLE IN THEIR EYES. 15. THE LAST REASON IS THAT THE BOOKS OF ACCOUNT AR E ALSO REJECTED BY M/S. VYAS & VYAS, CHARTERED ACCOUNTANTS APPOINTED BY THE SPECIAL COURT. WE HAVE ALSO PERUS ED THE SPECIAL AUDITORS REPORT. THE SPECIAL AUDITORS HAVE GIVEN TWO REPORTS (1) REPORT ON REVIEW OF UNAUDITED ACCOUNTS OF M/S. HARSHAD S. MEHTA AND (2) REPORT ON REVIEW OF UNAUDI TED ACCOUNT OF LATE SHRI HARSHAD S. MEHTA. WITHOUT GO ING INTO MUCH DETAIL, LET US SEE THE CONCLUDING REMARKS OF T HE AUDITORS. (I)IN RESPECT OF MR. HARSHA D MEHTA WE WERE APPOINTED TO AUDIT OF THE ACCOUNTS OF HSM & M/S. HSM BY THE ORDER OF THE HON'BLE SPECIAL COURT DT. 16.10.2003. IMMEDIATELY AFTER GETTING THE APPOINTMENT LETTER WE TRIED TO CONTACT JHM/ASM : THE CONCRNED PERSON:OF HSM BUT WE FAILED TO CONTACT TH EM. WE WROTE SEVERAL LETTERS TO JHM BUT THEY RESPONDED NOT A SINGLE LETTER. WE WERE LEFT WITH NO OTHER ALTERNATIVE EXCEPT TO PREPARE ACCOUNTS FROM THE INFORMATION AVAILABLE IN THE COMPUTERS HANDED OVER TO US BY CUSTODIAN, WHICH WERE LYING IN THE OFFICE PREMISES OF HSM. WE CONTACTED COMPUTER EXPERTS AND RETRIEVED DATA FROM COMPUTERS, WHICH WERE CHECKED BY US. WE ALSO PREPARED BOOKS IN RELATION T O SHARE TRANSACTION ENTERED BY M/S. H5M. WE FURTHER W ROTE LETTERS TO ALL CONCERNED BANKS, AND FINANCIAL INSTI TUTION, MOST OF THEM RESPONDED. WE FOUND HUGE DIFFERENCES I N THE TRANSACTION REPORTED BY PARTIES AND RECORDS AVAILABLE PERTAINING TO HSM, WHICH HAS BEEN REPORTED BY US IN OUR REPORT. WE HAVE STUDIED JPC REPORT, JANKI RAMAN COMMITTEE REPORT AND CHARGE SHEETS FILED BY CBI. THE FACTS 12 SHRI ASHWIN S.MEHTA . . REPORTED IN JPC AND JANKI RAMAN COMMITTEE REPORTS WERE FURTHER VERIFIED WITH THE BOOKS OF ACCOUNTS, W HICH WERE NOT FULLY TALLIED. WE HAVE ALSO WRITTEN LETTE RS TO THE CONCERNED PARTIES, WHICH WERE RESPONDED BY SOME PARTIES/BANKS AND SOME PARTIES/BANKS HAVE NOT RESPONDED. THE BANKS WHO RESPONDED HAVE CONFIRMED THE CONTENTS OF SAID REPORTS. WE HAVE REPORTED THE RESPONSES OF CONCERNED PARTIES IN OUR REPORT. AS REGARDS CHARGE SHEET FILED BY CBI. WE HAVE TRIED T O VERIFY FACTS AND FIGURES IN THE BOOKS PROVIDED IN T HE COMPUTERS BUT NOT OFFERED ANY COMMENTS, AS THE MATT ER IS SUBJUDICE BEFORE THE HONBLE SPECIAL COURT. WE HAVE ALSO CHECKED IN DETAIL THE TRANSACTIONS OF MONEY MARKET ENTERED INTO BY HSM BUT COULD NOT VERIFY THE TOTAL TRANSACTIONS DUE TO LACK OF INFORMATION. THE RESPONSE GIVEN BY CONCERNED PARTIE S SHOWED HUGE DIFFERENCES IN TRANSACTION IN HSM'S BOO KS. THEREFORE. THE CORRECTNESS IN SUCH ACCOUNTS CANNOT BY ASCERTAINED. WE HAVE ALSO STUDIED THE THIRD PARTY LIABILITIES TO WARDS BANKS, FINANCIAL INSTITUTION AND OTHER NOTIFIED PAR TIES ETC. AS PER BOOKS/RECORDS MADE AVAILABLE TO US AND OTHER INFORMATION GATHERED AS REPORTED IN OUR REPOR T, THE LIABILITIES APPEAR IN THE BALANCE SHEET AS 8 L JUNE1992 ARE NOT VERIFIABLE. THEREFORE THE LIABILITY APPEARING IN THE BALANCE SHEET CANNOT BE RELIED UPON AND HAS TO BE IGNORED. THE BANK AND FINANCIAL INSTITUTION HAVE LODGED CLAIMS AND ALSO F ILED SUITS, WHICH HAVE BEEN DECREED AGAINST HSM. THE LIABILITY AGAINST INCOME TAX HAS TO BE CONSIDERED. IN OUR OPINION THERE ARE TWO MAJOR LIABILITY OF HSM I. E. INCOME TAX LIABILITY AND CLAIMS DECREED AGAINST HSM . 19.5 WE HAVE COMMENTED UPON HUGE PAYMENTS MADE BY HSM TO HIS FAMILY MEMBERS AND ASSOCIATE CONCERNS. WE ARE OF STRONG OPINION THAT ALL MOVABLE AND IMMOVABLE ASSETS ACQUIRED BY FAMILY MEMBERS AND ASSOCIATES COMPANIES THROUGH FUNDS PROVIDED BY HSM, BELONGED T O 13 SHRI ASHWIN S.MEHTA . . HSM/ M/S. HSM ONLY. DUE TO THE COMPELLING NATURE OF LIMITATIONS ON OUR WORK AND UNRELIABLE NATURE OF THE BOOKS OF ACCOUNTS WE ARE NOT UNABLE TO ACCEPT RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THE INFORMATION/PARTICULARS PROVIDED TO US NOR DO WE AC CEPT SUCH RESPONSIBILITY. THEREFORE, WE ARE UNABLE TO COMMENT ABOUT THE TRUE AND FAIR STATE OF AFFAIRS OF HSM AND M/S HSM FOR TH E ENDED 31' MARCH 1991 , 31 ST MARCH, 1992 AND FOR THE PERIOD ENDED AS ON 8TH JUNE 1992: (I) IN RESPECT OF LATE SHRI HARSHAD S. MEHTA WE WERE APPOINTED TO PREPARE AND AUDIT THE ACCOUNTS OF MR. HSM AND M/S. HSM FOR THE YEAR ENDED 31.3.1991, 31.3.1992 AND ALSO FOR THE PERIOD ENDED AS ON 8.6.1992 BY THE ORDER OF THE HONBLE SPECIAL COURT DT. 16.10.2003. IMMEDIATELY AFTER GETTING THE ORDER OF APPOINTMENT WE TRIED TO CONTACT MRS JHM, THE LEGAL LEIR OF MR HSM FOR GETTING INFORMATION AND EXPLANATIONS BUT SHE DIDN'T RESPONDED ANY OF OUR , LETTERS AND TELEPHONE CALLS. WE ALSO REQUESTED TO PROVIDE S OFT COPY OF THE ACCOUNTS BUT NOTHING WAS PROVIDED TO US . THEREAFTER, WE WROTE SEVERAL LETTERS TO JHM BUT NOT A SINGLE LETTER WAS RESPONDED. ANNEXURE NO.3A IS ENCLOSED HEREWITH IN THE REPORT REGARDING LIST OF L ETTERS WRITTEN TO JHM & ITS PURPOSE. FOR THE PURPOSE OF OUR REVIEW OF THE ACCOUNTS OF MR. HSM, WE HAVE RELIED ON THE UNAUDITED COMPUTER PRINTED BOOKS OF ACCOUNT. IN CERTAIN AREAS, WHEREVER POSSIBLE WE HAVE INDEPENDENTLY VERIFIED THE INFORMATION GATHERED FROM THE THIRD PARTIES AS CONTAINED IN THIS REPORT. OUR REVIEW HAS BEEN CARRIED OUT WITH THE OBJECTIVE 14 SHRI ASHWIN S.MEHTA . . OF COVERING THE SPECIFIC AREAS MENTIONED IN THIS REPORT AND DOES NOT CONSTITUTE THE STATUTORY AUDIT OR OTHERWISE ANY AUDIT OF THE ACCOUNTS OF MR. HSM. WE TRIED HARD AND TOOK THE HELP OF EXPERTS TO RETRIEVE THE DATA FROM SOME OF THE COMPUTERS, WHICH WERE PROVIDED BY THE CUSTODIAN PERTAINING TO HSM. WE WERE ALSO PROVIDED HARD COPIES AND SOME FILES RELATING TO SHARES AND SECURITIES TRANSACTION S OF HSM. WE COMPARED THE HARD DATA WITH THE DATA RETRIEVED FROM COMPUTERS AND FOUND HUGE DIFFERENCES IN FIGURES. THEREAFTER WE THOROUGHLY CHECKED BOTH THE DATA AND CORRECTED THE FIGURES WHEREVER IT WAS POSSIBLE. WE HAVE ALSO DONE ACCOUNTING WORK RELATING TO SHARES, WHICH WAS MAJOR ACTIVITY OF HSM AND FOUND MAJOR VARIATIONS WHICH IS REPORTED AS UNDER: PERIOD ENDING AS PER HSM BOOK (TRADING OF INVESTMENT A/C) *(1) AS PER ANNEXURE NO. 4A, 4B, 4C (COMPILED OUT VALLAN AND DBP FILES) *(2) AS PER ANNEXURE NO. 40, 4P, 4Q (TRADING) AND 4R, 4S, 4T(INVESTMENT AS COMPILED BY US FROM HSM BOOKS. *(3) 31.3.91 1,04,73,245 8,04,52,271 -1,88,63,819 31.3.92 -84,45,42,966 12,76,82,935 7,05,83,523 8.6.92 10,56,29,006 3,93,78,662 34,44,46,907 TOTAL -72,84,40,715 24,75,13,868 39,61,66,611 15 SHRI ASHWIN S.MEHTA . . (1) PROFIT CALCULATED BY HSM IN HIS BOOKS. (2) PROFIT COMPILED OUT OF VALLAN AND DBF FILES (3) PROFIT COMPILED BY US FROM BOOKS OF HSM OUR REPORT IS BASED ON THE INFORMATION MADE AVAILABLE TO US AND IS SUBJECT TO MATTERS FOR WHICH RESPONSES HAVE NOT BEEN RECEIVED BY US TILL DATE. O UR REPORT IS BASED ON THE INFORMATION REVIEWED/PRESENTED TO US ON OR BEFORE 31 OCTOBER 2005, AND REFLECTS MATTERS AS THEY EXISTED DURING T HE PERIOD OF OUR REVIEW OF ACCOUNTS FOR THE YEAR ENDED 31 T MARCH 1991, 31 MARCH 1992 AND FOR THE PERIOD ENDED 8' JUNE 1992. AS ON 1/4/1990 MR. HSM WAS HAVING CAPITAL OF RS. 9,37,03,54,391/- WHICH WAS INCREASED TO PS.48,98,70,15,550/-ON 8/6/1992 BASED ON OUR CALCULATION OF PROFIT IN POINT NO. 8.16 ( COLUMN NO . 3 ).FROM THE BOOKS OF ACCOUNTS, WHICH WERE PRODUCED BEFORE US AND AS PER OTHER INFORMATION, WE CAN CONCLUDE THAT MR. HSM WITHDRAW FUNDS WITHOUT PROVIDING ANY SUPPORTING DOCUMENT FROM PUBLIC SECTOR BANKS AND FINANCIAL INSTITUTIONS WERE USED B Y HSM FOR PURCHASE OF SHARES IN THE NAME OF HIS FAMIL Y MEMBERS AND ALSO FOR PURCHASE OF IMMOVABLE PROPERTI ES. THE MODES OPERANDI ADOPTED BY HSM WAS TO TRANSFER FUNDS TO HIS FAMILY MEMBERS AND ASSOCIATE COMPANIES IMMEDIATELY AFTER RECEIVING FUNDS FRAUDULENTLY FROM PSU BANKS AND FINANCIAL INSTITUTIONS. THIS WAS PROBABLY DONE BY HSM TO AVOI D TAXES AND IN CASE HE GETS EXPOSED THAN HIS FAMILY MEMBERS MAY BE ESCAPED. 16 SHRI ASHWIN S.MEHTA . . WE HAVE STUDIED JANKIRAMAN COMMITTEE REPORT WITH REFERENCE TO HSM AND ACCORDINGLY MADE CORRESPONDENCE WITH THE CONCERNED PARTIES. MOST OF THE PARTIES HAVE RESPONDED AND WE HAVE REPORTED THE SAME IN OUR REPORT. WE HAVE STUDIED JANKIRAMAN COMMITTEE AND JPC REPORT. WE HAVE ALSO GONE THROUGH THE CHARGE SHEET FILED BY THE CBI AGAINST HSM AND IN THIS RESPECT NO COMMENTS ARE OFFERED BY US AS THE SAME IS SUB JURISTIC BEFORE TH E HONBLE SPECIAL COURT. AS REGARDS THE TOTAL LIABILITY OF MR. HSM THE SAME IS REPORTED IN OUR AUDIT REPORT OF M/S. HSM. OUR SCOPE OF WORK DOES NOT ENABLE US TO ACCEPT RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THE INFORMATION/PARTICULARS PROVIDED TO US NOR DO WE AC CEPT SUCH RESPONSIBILITY. THEREFORE, WE ARE UNABLE TO COMMENT ABOUT THE TRUE AND FAIR STATE OF AFFAIRS OF HSM 16. A PERUSAL OF THE ORDERS BROUGHT TO OUR NOTICE S HOWS THAT THE AUDITORS WERE APPOINTED ON 5.11.2003 ABOUT TWO YEARS AFTER THE DEATH OF SHRI HARSHAD S. MEHTA WHO EXPIRE D ON 30.12.2001. THE WIDOW SMT. JYOTI MEHTA HAD ALREADY INFORMED THE CUSTODIAN AND THE SPECIAL COURT THAT SHE HAD NO KNOWLEDGE OF THE BUSINESS OF HER DECEASED HUSBAND THEREFORE W ILL NOT BE ABLE TO MEET ANY QUERIES. THE AUDITORS COMMENTED THAT THERE WAS NON-COOPERATION ON THE PART OF THE ASSESSEE FOR THE PURPOSE OF AUDIT AND THAT DUE TO LACK OF VERIFICATI ON, THE RELIABILITIES OF THESE BOOKS COULD NOT BE VERIFIED DOES NOT HAVE ANY FORCE FOR THE SIMPLE REASON THAT IN A CASE OF S UCH HUGE 17 SHRI ASHWIN S.MEHTA . . MAGNITUDE EXPECTING THE WIDOW TO ANSWER EACH AND EV ERY QUERY WAS NOT POSSIBLE. 16.1. IF THE REPORT OF THE SPECIAL AUDITORS WAS SO SACROSANCT TO THE REVENUE AUTHORITIES, THEN WE FIND THAT WHILE DR AWING THE STATEMENT OF AFFAIRS OF M/S. HARSHAD MEHTA, THE AU DITORS HAVE DETERMINED THE NET PROFIT EARNED DURING 1.4.1990 TO 8.6.1992 AT RS. 1235321902 OR SAY RS. 123.53 CRORES, THE AS SESSMENT SHOULD HAVE BEEN MADE BY BIFURCATING THIS INCOME FO R THE FINANCIAL YEAR UNDER CONSIDERATION. 16.2. ANOTHER REASON FOR REJECTING THE BOOKS OF ACC OUNT IS THAT THE BALANCES IN THE ACCOUNT OF THE ASSESSEE AND THE BALANCES IN THE BOOKS OF RELATED ENTITIES DO NOT TALLY. A PERU SAL OF THE ORDERS OF THE AUTHORITIES BELOW DO NOT SHOW ANY SPE CIFIC ENTRY/BALANCE WHICH IS NOT TALLIED. MOREOVER, IF T HE REVENUE AUTHORITIES WERE OF THE OPINION THAT CERTAIN ACCOUN T BALANCES ARE NOT GETTING TALLIED, THEN THEY SHOULD HAVE CONF RONTED THOSE SPECIFIC BALANCES TO THE ASSESSEE SEEKING HIS EXPLANATION/ASKING THE ASSESSEE TO GET THE ACCOUNTS RECONCILED. WITHOUT DOING THIS EXERCISE, THE BOOKS COULD NOT HA VE BEEN REJECTED. 16.3. HAVING SAID ALL THAT, IN OUR CONSIDERED OPINI ON AND IN OUR UNDERSTANDING OF THE FACTS, THE BOOKS OF ACCOUNTS H AVE BEEN REJECTED ON FLIMSY GROUNDS WITHOUT THOROUGHLY EXAMIN ING EACH AND EVERY ENTRY AND WITHOUT CONFRONTING SPECIFIC DI SCREPANCY, IF ANY, TO THE ASSESSEE. IN OUR CONSIDERED OPINION, W E HAVE TO RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO I S DIRECTED TO VERIFY/EXAMINE EACH ENTRY IN THE BOOKS OF ACCOUNTS WITHOUT GETTING PREJUDICE BY THE FACT THAT BOOKS OF ACCOUNTS ARE NOT CONTEMPORANEOUS. THE AO IS FURTHER DIRECTED TO CON FRONT THE ASSESSEE IN RESPECT OF ANY SPECIFIC ENTRY WHICH IN HIS OPINION IS IMPROBABLE, IF IT IS FOUND THAT CERTAIN BALANCES AR E NOT TALLYING WITH RELATED PARTY TRANSACTIONS, THEN IT IS EXPECTE D THAT THE AO WOULD CONFRONT THOSE ACCOUNT BALANCES TO THE ASSESS EE GIVING HIM AN OPPORTUNITY TO RECONCILE THE DIFFERENCE. 18 SHRI ASHWIN S.MEHTA . . 17. BEFORE PARTING, WE HAVE TO REITERATE THAT THE B OOKS OF ACCOUNT HAVE BEEN PREPARED AFTER THE DATE OF SEARCH BUT FROM THE SEIZED DOCUMENTS SHOULD NOT HAVE BEEN REJECTED WITHOUT GOING THROUGH/EXAMINING EACH AND EVERY ENTRY. THE AO IS THEREFORE DIRECTED TO EXAMINE EACH AND EVERY ENTRY. THE ASSESSEE IS DIRECTED TO EXPLAIN EACH AND EVERY ENTR Y WITH DEMONSTRATIVE EVIDENCE. THE AO IS FURTHER DIRECTED TO ALLOW THE ASSESSEE AN OPPORTUNITY TO RECONCILE EACH AND E VERY ACCOUNT WHERE IN HIS OPINION THE BALANCES DO NOT TA LLY WITH THE THIRD PARTY BALANCES. THE ASSESSEE IS DIRECTED TO RECONCILE EACH AND EVERY SUCH ENTRY AS BROUGHT TO HIS NOTICE. THE AO IS FURTHER DIRECTED TO EXPLAIN SPECIFICALLY WHICH ENTRIES ACCO RDING TO HIM APPEAR TO BE IMPROBABLE AND ALLOW THE ASSESSEE AN OPPORTUNITY TO EXPLAIN THE SAME. THE ASSESSEE IS D IRECTED TO CO OPERATE WITH THE REVENUE IN GETTING HIS ACCOUNTS EX AMINED AND FURNISH NECESSARY DETAILS AS AND WHEN CALLED FOR. THE ASSESSEE IS ALSO DIRECTED TO GIVE A COMPLETE RECONCILIATION STATEMENT WHEREVER DIFFERENCES IN THIRD PARTY ACCOUNTS ARE BR OUGHT TO HIS NOTICE. 18. AS WE HAVE RESTORED THE MATTER RELATING TO THE BOOKS OF ACCOUNT TO THE FILE OF THE AO, WE DO NOT FIND IT NE CESSARY TO DECIDE OTHER GRIEVANCES OF THE ASSESSEE AS THEY ARE ALL INTER RELATED WITH THE BOOKS OF ACCOUNTS. THE AO IS DIREC TED TO DECIDE THE ISSUE AFRESH AFTER EXAMINING THE BOOKS OF ACCOU NTS OF THE ASSESSEE. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD THE SUBMISSIONS MADE BY THE LD. RESPECTIVE COUNSEL AND FOUND THAT IN THE AFORESAID ORDER DT.29/10/201 4, IDENTICAL GROUNDS WERE RAISED BY THE ASSESSEE AND THE ENTIRE ISSUE R EVOLVES AROUND PRINCIPLE OF NATURAL JUSTICE AND NOT DETERMINING TH E INCOME BASED ON 19 SHRI ASHWIN S.MEHTA . . FINAL GOODS OF ACCOUNTS. THE BOOKS WERE REJECTED BY THE REVENUE AUTHORITIES. IN THE PRESENT APPEAL ALSO IDENTICAL G ROUNDS HAVE BEEN RAISED, THEREFORE, FOLLOWING THE REASONING CONTAINE D IN THE AFORESAID ORDER AND THE FACTS AVAILABLE BEFORE US WE FIND THAT THE BOOKS HAVE BEEN REJECTED BY THE DEPARTMENT ON FLIMSY GROUNDS WITHOU T INDEPENDENTLY EXAMINING EACH AND EVERY ENTRY AND CONFRONTING SPEC IFIC DISCREPANCY, IF ANY, TO THE ASSESSEE . IN THE AFORESAID ORDER THE B ENCH HAS ALREADY CONSIDERED THE EARLIER DECISIONS ALSO, THEREFORE, K EEPING IN VIEW THE TOTALITY OF FACTS THE LD. ASSESSING OFFICER IS DIRE CTED TO VERIFY/EXAMINE EACH AND EVERY ENTRY IN THE BOOKS OF ACCOUNTS AS WE HAVE DISCUSSED IN THE AFORESAID ORDER DATED 29/10/2014. CONSEQUENTLY, ON THE SAME REASONING/DIRECTION WE RESTORE THIS APPEAL TO THE F ILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH. SINCE, WE HAVE RES TORED THE MATTER RELATING TO THE BOOKS OF ACCOUNTS TO THE ASSESSING OFFICER WE DO NOT DEEM IT NECESSARY TO DECIDE OTHER GRIEVANCES OF THE ASSE SSEE AS THEY ARE INTER- RELATED/INTER-LINKED WITH THE BOOKS OF ACCOUNTS. TH E ISSUES BEFORE US ARE ALSO BORNE OUT AS IN THE CASE OF SHRI HARSHAD MEHTA . IN VIEW OF THIS FACT THE LD. ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUES AFRESH AFTER EXAMINING THE BOOKS OF ACCOUNTS OF THE ASSESSEE . 5. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10.11.20 14. SD/- SD/- N.K.BILLAIYA JOGINDER SINGH ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI, DATED 10/11/2014 JV. SR. PS 20 SHRI ASHWIN S.MEHTA . . $( $( $( $( ) )) ) *+ *+ *+ *+ ,'+ ,'+ ,'+ ,'+ / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. */-. / THE RESPONDENT. 3. 0 ( ) / THE CIT(A)- 4. 0 / CIT 5. 12 *+ , , / DR, ITAT, MUMBAI 6. 23 4 / GUARD FILE. $( $( $( $( / BY ORDER, /+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 7 7 7 7 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI