Katt Special Machines Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1290/DEL/2011

• Counselvise Citation: 129020114 RSA 2011
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEG I SR DR HEARING ON
• Assessee Lawyers: B K ANAND
• Keywords: Unexplained cash credit; Depreciation
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE-PRESIDENT AN D SHRI I.C.SUDHIR, JUDICIAL MEMBER I.T.A. NO. 1290/DEL/2011 ASSESSMENT YEAR: 2003-04 KATT SPECIAL MACHINES (P) DY. CIT LTD. M-96B/7, SHASTRI NAGAR VS. CIRCLE 5 (1) NEW DELHI-110052 NEW DELHI-110002 PAN: AABCK9818L (ASSESSEE) (REVENUE) I.T.A. NO. 1401/DEL/2011 ASSESSMENT YEAR: 2003-04 ACIT, CIRCLE (1), VS. KATT SPECIAL MACHINES(P) NEW DELHI. LTD. M-96B/7, SHASTRI NAGARNEW DELHI- 110052 (REVENUE) (ASSESSEE) ASSESSEE BY: SHRI B.K. ANAND, CA REVENUE BY: SHRI R.S. NEGI, SR. DR HEARING ON : 3/07/2012 ORDER PRONOUNCED ON THE DATE: .. ORDER PER I.C.SUDHIR, JM: THESE ARE THE CROSS APPEALS PREFERRED BY THE PARTIE S AGAINST THE FIRST APPELLATE ORDER. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: ITA NO. 1290 & 1401/DEL/2011 2 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE DISALLOWANCE OF RS.17,90,558 BEING COMMISSION PAID BY THE ASSESSEE COMPANY TO ITS SELLING AGENTS WITH COMPLET E DISREGARD TO THE DETAILS FILED BEFORE HIM SUPPORTING THE EXPENDI TURE BY THE ASSESSEE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN NOT HOLDING THAT THE LETTER FILED BEFORE THE AO REL ATED ONLY TO SPECIFIC QUERIES RAISED BY THE LATTER DURING REMAND PROCEEDINGS IN WHICH HE HAD NOT ASKED FOR ANY FURTHER EVIDENCE REL ATING TO THE SAID COMMISSION PAYMENT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN NOT CONSIDERING THE CONFIRMATIONS OF SPECIFIC AGENT S FILED BEFORE HIM IN TERMS OF SUB-RULE (4) OF RULE 46A DIRECTING THE ASSESSEE TO FILE SUCH CONFIRMATIONS WHICH THE ASSESSEE DULY COM PLIED WITH. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN NOT HOLDING THAT THE ASSESSEE HAVING FURNISHED REQU ISITE DETAILS IN RESPECT OF RS.98,421 BEING AMOUNTS WRITTEN-OFF UNDE R SHORT & EXCESS RECOVERIES, WHICH ARE INHERENT IN TRADING O PERATIONS, THE ITA NO. 1290 & 1401/DEL/2011 3 WRITE-OFF CALLED FOR NO DISALLOWANCE AND FURTHER ER RED IN NOT DELETING THE DISALLOWANCE MADE BY THE AO. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN PARTIALLY CONFIRMING THE AD-HOC ADDITION OUT OF EXP ENSES MADE BY THE AO WITH COMPLETE DISREGARD TO THE DETAILS AND D OCUMENTS FURNISHED BEFORE THE AO DURING THE ASSESSMENT PROCE EDINGS. 6. THE REVENUE ON THE OTHER HAND HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRONEOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT (A) IGNORED THE FINDING RECORDED BY THE AO AND THE FACT THAT THE ASSESSEE DID NOT DISCHARGE TH E ONUS OF PROVING THE EXISTENCE/CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDIT ION OF RS.57,000/- MADE ACCOUNT OF UNEXPLAINED CASH CREDIT S. 3.1 THE LD. CIT (A) IGNORED THE FINDING RECORDED BY THE AO AND THE FACT THAT THE ASSESSEE DID NOT FILE THE REQUISI TE EVIDENCE ITA NO. 1290 & 1401/DEL/2011 4 DURING THE COURSE OF ASSESSMENT PROECEEDING DESPITE HAVING BEEN PROVIDED WITH AMPLE OPPORTUNITIES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDIT ION OF RS.3,00,097/-MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON OLD SEWING MACHINES. 4.1 THE LD. CIT (A) IGNORED THE FINDING RECORD ED BY THE AO AND THE FACT THAT THE ASSESSEE DID NOT FILE THE R EQUISITE EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDING TO SUBSTANTIATE ITS CLAIM. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN TH LAW, THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.89,703/- MADE ON ACCOUNT OF DISALLOWANCE OF NON MOVING CREDITS. 5.1 THE LD. CIT (A) IGNORED THE FINDING RECORDE D BY THE AO AND THE FACT THAT THE ASSESSEE DID NOT FILE THE RE QUISITE EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDING TO SUBSTANTIATE ITS CLAIM. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN RESTRICTING T HE ADDITION ON ITA NO. 1290 & 1401/DEL/2011 5 ACCOUNT OF DISALLOWANCE TO RS.8,87,557/- AS AGA INST RS.73,26,507/-MADE BY THE AO. 6.1 THE LD. CIT (A) IGNORED THE FINDING RECORDED BY THE AO AND THE FACT THAT THE ASSESSEE DID NOT FILE THE REQ UISITE EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDING TO S UBSTANTIATE ITS CLAIM. 3. SINCE SOME GROUNDS RAISED IN THE APPEALS ARE HAV ING COMMON FACTS, THESE ARE BEING DEALT WITH SIMULTANEOUSLY. GROUND NO. 1 (ASSESSEE) 4. THE AUTHORITIES BELOW HAVE MADE AND UPHELD THE DISA LLOWANCE OF RS.17,90,558/- ON ACCOUNT OF COMMISSION ON SALES. T HE RELEVANT FACTS ARE THAT THE ASSESSEE COMPANY CLAIMED TO HAVE MADE PAYM ENT OF RS.17,90,558/- ON ACCOUNT OF COMMISSION ON SALES. THE AO NOTED THA T IN THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2005-06 NO COMM ISSION PAYMENT WAS CLAIMED BY THE ASSESSEE. HE THEREFORE, ASKED THE AS SESSEE TO FURNISH FULL AND COMPLETE DETAILS OF THE PERSONS TO WHOM COMMISSION HAS BEEN PAID ALONG WITH THE DETAILED LEDGER ACCOUNT OF ALL THE PARTIES FOR THE RELEVANT ASSESSMENT YEAR. ON PERUSAL OF THE COMMISSION ACCOUNT THE AO A LSO FOUND THAT IN CERTAIN CASES COMMISSION WAS ALSO PAID IN CASH. UND ER THESE CIRCUMSTANCES THE AO AFFORDED OPPORTUNITIES TO THE ASSESSEE TO FU RNISH CONFIRMATIONS OF THE ITA NO. 1290 & 1401/DEL/2011 6 CONCERNED PARTIES SO AS TO ENSURE HIS PAYMENT HAS A CTUALLY BEEN MADE AND THAT THE CONCERNED PARTIES HAVE DISCLOSED THE COMMI SSION RECEIPTS IN THEIR RETURNS OF INCOME. THE ASSESSEE HOWEVER, FAILED TO AVAIL SUCH OPPORTUNITIES. THE AO THUS MADE DISALLOWANCE OF THE CLAIMED COMMIS SION PAYMENT OF RS.17,90,558/- ON THE SALES. SINCE THE ASSESSEE COU LD NOT IMPROVE ITS CASE BEFORE THE LD. CIT (A), THE LD. CIT (A) HAS UPHELD THE ADDITION IN QUESTION. 5. BEFORE THE TRIBUNAL IN SUPPORT OF THE GROUND THE L D. AR HAS SUBMITTED THAT BEFORE THE LD. CIT (A) IT WAS MADE C LEAR THAT A DETAILED LEDGER ACCOUNT OF COMMISSION PAYMENT WAS FILED BEFO RE THE AO, WHEREIN THE NAMES AND DETAILS OF THE RESPECTIVE SALES BILLS IN RESPECT OF WHICH THE COMMISSION WAS PAID WERE DULY GIVEN. IN COMPLIANCE OF THE DIRECTION OF THE AO VIDE ORDER SHEET ENTRY DATED 8.12.2008, CONFIRMA TION OF M/S LUCKY ENTERPRISES, M/S SHIVA ENTERPRISES, M/S SANJEEV INT ERNATIONAL, M/S RAJESH ASSOCIATES, SHRI ANUJ JAIN AND SHRI JAIN ENTERPRISE S WERE SENT TO HIM ALONG WITH LETTER DATED 22.12.2008. THE AO HOWEVER, DID N OT CONSIDER THOSE DOCUMENTS. THE LD. DR ON THE OTHER HAND PLACED RELI ANCE ON THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD. 6. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW WE FIND THAT THE ASSESSEE COULD NOT BE ABLE TO IMPROVE ITS CASE BEFORE THE TRIBUNAL. UNDISPUTEDLY ONUS LIES ON THE CLAIMANT TO ESTABLISH ITS CLAIM. THE AO WAS ITA NO. 1290 & 1401/DEL/2011 7 HAVING EVERY RIGHT TO VERIFY THE CLAIMED PAYMENT OF COMMISSION AND HE WAS JUSTIFIED IN ASKING THE ASSESSEE TO FURNISH CONFIRM ATIONS OF CONCERNED PARTIES SO AS TO ENSURE THAT (I) THE PAYMENT HAS ACTUALLY B EEN MADE AND (II) THAT THE CONCERN PARTIES HAVE DISCLOSED THE COMMISSION RECEI PTS IN THEIR RETURNS OF INCOME. DESPITE ALL OPPORTUNITIES THE ASSESSEE COUL D NOT COMPLY THIS DIRECTION OF THE AO. BEFORE THE LD. CIT (A) THE ASS ESSEE CONTENDED THAT INCOMPLIANCE OF THE DIRECTION OF THE AO VIDE ORDER SHEET ENTRY DATED 8.12.2008 THE ASSESSEE HAD FURNISHED CONFIRMATIONS OF M/S LUCKY ENTERPRISES, M/S SHIVA ENTERPRISES, M/S SANJEEV INT ERNATIONAL, M/S RAJESH ASSOCIATES, SHRI ANUJ JAIN AND M/S JAIN ENTERPRISES ALONG WITH LETTER DATED 22.12.2008 AND THE AO DID NOT CONSIDER THOSE CONFIR MATIONS WHILE ADJUDICATING THE ISSUE ON PAYMENT OF COMMISSION. IN THE INTEREST OF JUSTICE THE LD. CIT (A) REMANDED THE MATTER TO THE FILE OF THE AO TO EXAMINE THE ABOVE CONTENTION OF THE ASSESSEE. THE AO REPORTED T HAT THE CLAIM OF THE ASSESSEE THAT THE CONFIRMATION OF M/S LUCKY ENTERPR ISES ETC. WERE FILED ALONG WITH LETTER DATED 22.12.2008 WAS FACTUALLY INCORREC T AS NO SUCH LETTER WAS FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS. HE A LSO SUBMITTED THAT IF AT ALL CONFIRMATIONS OF THE PERSONS TO WHOM COMMISSION WAS PAID WERE AVAILABLE WITH ASSESSEE, SAME COULD HAVE BEEN FILED IN THE CO URSE OF REMAND PROCEEDINGS. THE AO NOTED FURTHER THAT IN SPITE OF NUMBER OF OPPORTUNITIES ITA NO. 1290 & 1401/DEL/2011 8 GRANTED IN THE COURSE OF HEARING NO COMPLIANCE WAS MADE BY THE ASSESSEE COMPANY. UNDER THESE FACTS WE ARE OF THE VIEW THAT THE LD. CIT (A) WAS HAVING NO OPTION BUT TO AFFIRM THE DISALLOWANCE OF THE CLAIMED COMMISSION PAYMENT OF RS.17,90,558/-. SINCE THE ASSESSEE COULD NOT IMPROVE ITS CASE EVEN BEFORE THE TRIBUNAL, WE ARE NOT INCLINED TO IN TERFERE WITH THE FINDING OF LD. CIT (A) IN THIS REGARD. THE SAME IS UPHELD. THE GROUND NO. 1 IS ACCORDINGLY REJECTED. GROUND NO. 2 (ASSESSEE) 7. THE AO MADE AN ADDITION OF RS.98421/- REPRESENTING SHORT AND EXCESS RECOVERY. THE AO HAS MADE THIS ADDITION IN ABSENCE OF DETAILS IN RESPECT OF SHORT AND EXCESS RECOVERIES FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN ABSENCE OF IMPROVEMENT OF THE CASE OF THE ASSESSEE BEFORE THE LD. CIT (A), THE LD. CIT (A) HAS UPHELD THE ADDITION. 8. THE CONTENTION OF THE LD. AR BEFORE THE TRIBUNAL RE MAINED THAT THE AMOUNT IN QUESTION REPRESENTED SHORT RECOVERY FROM THE REGULAR CUSTOMERS FROM WHOM SMALL BALANCES REMAINED OUTSTANDING AND O VER A PERIOD OF TIME THE SAME ARE WRITTEN OFF IN THE BOOKS OF ACCOUNTS O F THE ASSESSEE. THE LD. AR SUBMITTED THAT SUCH RIGHTS ARE OF NORMAL BUSINES S INCIDENCE. THE LD. DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF TH E AUTHORITIES BELOW. ITA NO. 1290 & 1401/DEL/2011 9 9. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW, WE FIND THAT THE LD. CIT (A) HAS UPHELD THE ADDITION WITH THIS F INDING THAT THERE IS NO REBUTTAL OF THE FINDING OF THE AO THAT NO DETAILS/I NFORMATION WAS FURNISHED BEFORE HIM IN RESPECT OF THE ALLEGED SHORT AND EXCE SS RECOVERIES AND CONSEQUENT WRITING OFF THE SAID AMOUNT. EVEN BEFORE THE TRIBUNAL THE ASSESSEE HAS FAILED TO REBUT THE SAID FINDINGS RECO RDED BY THE AO THAT NO DETAILS/INFORMATION WAS FURNISHED BEFORE HIM IN RES PECT OF THE CLAIMED WRITING OFF. THE ASSESSEE HAS NOT IMPROVED ITS CASE EVEN BEFORE THE TRIBUNAL ON THE ISSUE. WE THUS DO NOT FIND REASON TO INTERFE RE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS AFFIRMED. GROUND NO. 2 IS ACCORDINGLY REJECTED. GROUND NO. 3 (ASSESSEE) & GROUND NO. 6 (DEPARTMENT ) 10. THE RELEVANT FACTS ARE THAT THE AO MADE ADDITION OF RS.73,26,507/- OUT OF THE EXPENSES CLAIMED AS PER THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE COMPANY. THE AO MADE THE SAID ADDITION ON THE BASIS THAT IN SPITE OF NUMBERS OF OPPORTUNITIES ALLOWED, NO BOOKS OF ACCOU NTS WERE PRODUCED BY THE ASSESSEE BEFORE HIM. THE AO NOTED FURTHER THAT AS PER PARA 14 OF THE NOTES TO ACCOUNTS IN SCHEDULE 15, IT WAS STATED THA T SOME OF THE EXPENSES WERE NOT PROPERLY SUPPORTED. THE AO THEREFORE, IN VIEW OF THE DISALLOWANCE MADE IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR DIS ALLOWED 10% OF THE ITA NO. 1290 & 1401/DEL/2011 10 ENTIRE EXPENSES (EXCLUDING DEPRECIATION, PRELIMINAR Y EXPENSES, FILING FEES, SHORT AN EXCESS RECOVERIES AND COMMISSION EXPENSES) CLAIMED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. 11. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE C ONTENDED THAT THE AO DID NOT EXERCISE HIS QUASHI JUDICIAL POWERS WHILE M AKING THE ADDITION IN QUESTION. IT WAS SUBMITTED THAT THE ASSESSMENT IN T HE PRESENT CASE WAS HANDLED MORE THAN ONE ASSESSING OFFICERS AND THE BO OKS OF ACCOUNTS WERE PRODUCED WITH THE PREDECESSOR OFFICER AND THE SAME WERE EXAMINED ON TEST CHECK BASIS. THEREFORE, IT IS FACTUALLY INCORRECT T O SAY THAT BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE THE AO. IT WAS SUBMITTED T HAT THE ACCOUNT OF THE ASSESSEE ARE DULY AUDITED U/S 44 AB OF THE ACT AND THE AUDIT REPORT WAS FILED ALONG WITH THE RETURN OF INCOME. IT WAS CONTENDED T HAT THE AMOUNT OF RS.7,32,65,067/-, 10% OF WHICH HAS BEEN CONSIDERED FOR DISALLOWANCE, ALSO INCLUDED COSTS OF GOODS SOLD BY THE ASSESSEE. IT WA S SUBMITTED FURTHER THAT THE ASSESSEE IS DEALING IN ITEMS WHICH ARE IDENTIFI ABLE, QUANTIFIABLE AND WERE DULY CONFIRMING PART OF THE TRADING ACCOUNT. THE AS SESSEE THUS OBJECTED THE DISALLOWANCE OF 10% OF THE COST OF GOODS SOLD AMOUN TING TO RS.6,43,89,507/-. REGARDING OTHER EXPENSES, THE ASS ESSEE SUBMITTED THAT DETAILS CALLED FOR BY THE AO WERE SUBMITTED BEFORE HIM FROM TIME TO TIME AND ONLY SPECIFIC REQUIREMENTS NOTED ON 8.12.2008 C OULD NOT BE FULFILLED ITA NO. 1290 & 1401/DEL/2011 11 BECAUSE OF PAUCITY OF TIME. IT WAS SUBMITTED THAT O N 8.12.2008 NO ISSUE WITH REGARD TO THE PURCHASE OF SEWING MACHINES SPARE PAR TS AND ACCESSORIES WAS RAISED. REGARDING UNSECURED LOANS, NON-MOVING ACTIV ITIES, ADDITION ON ACCOUNT OF BE SHARE CAPITAL, PAYMENT OF COMMISSION, INTEREST PAYMENT ON TAXES ETC. SEPARATE ADDITIONS WERE MADE BY THE AO A ND THEREFORE, ACCORDING TO THE ASSESSEE AN AD HOC DISALLOWANCE @ 10% OVER A ND ABOVE SPECIFIC DISALLOWANCE WAS NOT JUSTIFIABLE. CONSIDERING THESE SUBMISSIONS THE LD. CIT (A) HAS RESTRICTED THE ADDITION TO RS.8,87,557/- OU T OF THE ADDITION OF RS.73,26,507/- MADE BY THE AO. IN RESULT BOTH THE P ARTIES ARE IN APPEAL BEFORE THE TRIBUNAL. 12. IN SUPPORT OF GROUND NO. 3 OF THE APPEAL PREFERRED BY THE ASSESSEE, THE LD. AR HAS REITERATED THE SUBMISSIONS MADE BEFORE T HE AUTHORITIES BELOW. THE LD. DR ON THE OTHER HAND PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED FURTHER THAT THE LD. CIT (A) WAS NOT JUST IFIED IN DELETING THE ADDITION TO THE EXTENT OF RS.64,38,950/- BEING 10% OF COST OF SALES OF RS.6,43,89,507/-. 13. IN VIEW OF THE ABOVE SUBMISSIONS WE HAVE GONE THROU GH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAD MADE AN ADDITION OF RS.73,26,507/- OUT OF THE EXPENSES CLAIMED IN THE P ROFIT AND LOSS ACCOUNT OF THE ASSESSEE ON THE BASIS THAT IN SPITE OF NUMBER O F OPPORTUNITIES ALLOWED, NO ITA NO. 1290 & 1401/DEL/2011 12 BOOKS OF ACCOUNTS WERE FURNISHED BY THE ASSESSEE BE FORE HIM. THE AO NOTED FURTHER THAT SOME OF THE EXPENSES ADMITTEDLY (AS PE R PARA 14 OF THE NOTES TO GROUNDS IN SCHEDULED 15) WERE NOT PROPERLY SUPPORTE D WITH EVIDENCE. THE LD. CIT (A) HAS HOWEVER, EXAMINED THE CLAIM OF THE ASSESSEE FROM THE DETAILS OF PURCHASES OF SEWING MACHINE, SPARE PARTS , NEEDLES AND MISCELLANEOUS ITEMS MADE AVAILABLE IN THE ASSESSMEN T RECORDS. HE HAS NOTED THAT AS PER THE DETAILS OF OPENING STOCK, PURCHASES , SALES AND CLOSING STOCK OF THE AFORESAID ITEMS, THE ASSESSEE HAD 148 SEWING MA CHINES AS OPENING STOCK AS ON 1.4.2005 AND THE ASSESSEE THEREAFTER MADE PUR CHASES OF 5,178 MACHINES, OUT OF WHICH 2845 MACHINES WERE SOLD LEAV ING A CLOSING STOCK OF 2400 AND 81 AS ON 31.3.2006. SIMILAR INFORMATION WA S AVAILABLE IN RESPECT OF SPARE PARTS NEEDLES MISCELLANEOUS ITEMS AS WELL. TH E LD. CIT (A) ACCORDINGLY AGREED WITH THE ASSESSEE THAT THE DISAL LOWANCE OUT OF COST OF GOODS SOLD COULD NOT HAVE BEEN CONSIDERED ON AD HOC BASIS WITHOUT POINTING OUT ANY DISCREPANCIES IN THE DETAILS FILED BEFORE T HE AO. THE LD. CIT (A) HAS OBSERVED FURTHER THAT THE ITEMS TRADED IN BY THE AS SESSEE ARE SUCH THAT THE SAME ARE QUANTIFIABLE IN PIECES AND THERE CANNOT BE ANY JUSTIFICATION FOR ANY AD HOC DISALLOWANCE. UNDER THESE UNREBUTTED FACTS N OTED BY THE LD. CIT(A), WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORD ER COMING TO THE CONCLUSION THAT ADDITION TO THE EXTENT OF RS.64,38,950/- BEING 10% OF COST OF SALES OF ITA NO. 1290 & 1401/DEL/2011 13 RS.6,43,89,507/- WAS JUSTIFIED. IN OUR VIEW THE LD . CIT (A) UNDER THE ABOVE CIRCUMSTANCES HAS RIGHTLY DELETED THE ADDITION TO T HE EXTENT OF RS.64,38,950/- . IN RESULT GROUND NO. 6 AND 6.1 OF THE APPEAL PREF ERRED BY THE REVENUE ARE REJECTED. 14. THE LD. CIT (A) HAS UPHELD THE BALANCE DISALLOWANCE OF RS.8,87,557/- OUT OF THE CLAIMED EXPENSES UNDER THE HEAD SALARIES AND WAGES, DIRECTORS; REMUNERATION, ADMINISTRATIVE EXPENSES, INTEREST AND FINANCIAL CHARGES AND SELLING, BUSINESS PROMOTION ETC. THE LD. CIT (A) HA S SUSTAINED THIS DISALLOWANCE ON THE BASIS THAT BEFORE THE AO, THE A SSESSEE FAILED TO FURNISH NECESSARY BILLS AND VOUCHERS IN SUPPORT. THE LD. CI T (A) HAS FURTHER NOTED THAT EVEN DURING THE COURSE OF REMAND PROCEEDINGS T HERE WAS NO COMPLIANCE TO THE DIRECTIONS OF THE AO TO PRODUCE THE NECESSAR Y EVIDENCE JUSTIFYING THE CLAIM OF EXPENDITURE UNDER THE AFORESAID HEADS. SIN CE THE ASSESSEE COULD NOT IMPROVE ITS CASE BEFORE THE TRIBUNAL WE DO NOT FIND REASON TO INTERFERE WITH THE FINDING OF THE LD. CIT (A) IN THIS REGARD. THE SAME IS AFFIRMED. THE GROUND NO. 3 OF THE APPEAL PREFERRED BY THE ASSESSE E IS THUS REJECTED. THE GROUND NO. 1 (DEPARTMENT) IS GENERAL IN NATURE HENCE DOES NOT NEED INDEPENDENT ADJUDICATION. GROUND NOS. 2 & 2.1 (DEPARTMENT) ITA NO. 1290 & 1401/DEL/2011 14 THE AO MADE ADDITION OF RS.97,20,420/- ON ACCOUNT O F FRESH SHARE CAPITAL BROUGHT INTO BOOKS OF ACCOUNT DURING THE YEAR. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRADING , HIRING AND REPAIRING OF INDUSTRIAL SEWING MACHINES, SPARE PARTS AND ACCESSO RIES HAD MADE AN ARRANGEMENT WITH M/S V.S. MECHANICAL WORKS AND M/S V.S. SALES CORPORATION, PROPRIETORSHIP CONCERNS OF SH. TARKESH WAR YADAV AND SMT. PHOOLWATI YADAV, RESPECTIVELY WHEREBY ALL THE ASSET S AND LIABILITIES OF THE PROPRIETORSHIP CONCERNED WERE TAKEN BY THE ASSESSEE COMPANY AT THE BOOK VALUE. SH. TARKESHWAR YADAV, AND HIS WIFE SMT. PHOO LWATI YADAV ARE ALSO THE DIRECTORS OF THE ASSESSEE COMPANY. AS PER THE S AID AGREEMENT BETWEEN ASSESSEE COMPANY AND THE PROPRIETORS OF THE AFORESA ID CONCERN THE LIABILITIES INCLUDING THE OUTSTANDING LOANS AND CRE DIT BALANCES WERE TO BE SETTLED BY WAY OF ALLOTMENT OF SHARES OF THE ASSESS EE COMPANY TO THE CONCERN PERSONS ACCORDING TO THEIR OUTSTANDING BALANCES AS ON 1.4.2005. AS PER THIS ARRANGEMENT ONLY FRESH SHARE CAPITAL OF RS.97,20,42 0/- WAS INTRODUCED DURING THE YEAR UNDER CONSIDERATION IN LIEU OF OUTS TANDING LIABILITIES WHICH INTER ALIA INCLUDED CREDITORS OF RS.57,09,240/- DEP OSITS OF RS.8,43,500/-, VALUE OF PROPRIETORS NET ASSETS RS.18,49,430/- AND CREDIT BALANCES OUTSTANDING IN ITS BOOKS AT RS.13,18,250/-. WHILE E XAMINING THE ASSETS AND LIABILITIES SHOWN BY THE ASSESSEE COMPANY FOR THE Y EAR UNDER CONSIDERATION, ITA NO. 1290 & 1401/DEL/2011 15 THE AO ASKED THE ASSESSEE TO FILE NECESSARY DETAILS OF THE PERSONS WHO HAD CONTRIBUTED TO THE FRESH CAPITAL TO RS.97,20,420/-. IN RESPONSE THE ASSESSEE FILED A DETAILED LIST OF ALL THE 31 ST SHARE HOLDERS WHICH ALSO INCLUDED BOTH THE DIRECTORS, THEIR HUF AND CHILDRENS. THE AO NOTED TH AT THE ADDRESS SHOWN IN THE CASES OF ALMOST ALL THE SHAREHOLDERS WERE OF TH E ASSESSEE COMPANY ITSELF. THE AO THUS DOUBTED THE EXISTENCE AND IDENTITY OF T HE SHAREHOLDERS AND HE DECIDED TO CONDUCT FURTHER ENQUIRY IN THIS REGARD I N ORDER TO ASCERTAIN THE CORRECT FACTUAL POSITION. ON SPOT ENQUIRIES, THE IN SPECTOR FOUND THAT NONE OF THE SHAREHOLDERS WERE AVAILABLE AT THE GIVEN ADDRES S. THE AO ISSUED SUMMONS U/S 131 OF THE ACT TO 21 SHAREHOLDERS EXCLU DING THE DIRECTORS AND THEIR FAMILY MEMBERS. NO RESPONSE/COMPLIANCE WAS MA DE THERETO. IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDING AND THE ASSESSEE WAS REQUIRED TO PRODUCE ALL THE 21 PERSONS FOR EXAMINATION. THE ASSESSEE FAILED TO COMPLY WITH THE SAME. THE ASSESSEE SUBSEQUENTLY FILED AFFIDAVITS IN CASES OF 10 PERSON S. ON EXAMINATION OF THOSE AFFIDAVITS THE AO FOUND THAT IN ALL THE CASES THE S OURCE OF INCOME WAS SHOWN AS AGRICULTURAL INCOME RANGING BETWEEN RS.70,000/- TO 95,000/- THEIR CREDITWORTHINESS WAS THUS DOUBTED BY THE AO. THE AS SESSEE WAS ASKED TO EXPLAIN AS TO WHY THE INCREASE IN THE SHARE CAPITAL COULD NOT BE TREATED AS UNEXPLAINED U/S 68 OF THE ACT. THE ASSESSEE WAS ALS O ASKED TO FURNISH ITA NO. 1290 & 1401/DEL/2011 16 NECESSARY DETAILS REGARDING MODE OF PAYMENT OF SHAR E CAPITAL, CHEQUE NOS. AND BANK STATEMENTS OF THE SHARE APPLICANTS. THE AS SESSEE DID NOT COMPLY WITH THE SAME. THE AO ACCORDINGLY MADE ADDITION OF RS.97,20,420/- AFTER REGARDING HIS FINDINGS IN DETAIL AT PAGE NOS. 5 TO 9 OF THE ASSESSMENT ORDER. 15. THE ASSESSEE QUESTIONED THE ABOVE ADDITIONS MADE BY THE AO BEFORE THE LD. CIT (A) MAINLY ON THE BASIS THAT THE AO HAS FAILED TO APPRECIATE THE FACT THAT THE INCREASE IN THE SHARE CAPITAL DID NOT INVOLVE ANY MONETARY TRANSACTIONS IN TERMS OF RECEIPT ON PAYMENT OF ACTU AL MONEY. IT WAS CONTENDED THAT THE INCREASE IN SHARE CAPITAL WAS A CONSEQUENCE OF TAKEOVER OF ASSETS AND LIABILITIES OF M/S V.S. MECHANICAL WO RKS AND M/S V.S. SALES CORPORATION I.E. PROPRIETORSHIP CONCERNS OF BOTH TH E DIRECTORS OF THE ASSESSEE COMPANY. THE ASSESSEE ALSO RAISED OTHER CONTENTIONS . CONSIDERING THESE CONTENTIONS, THE LD. CIT (A) HAS DELETED THE ADDITI ON OF RS.97,20,420/- ON THE BASIS THAT THE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE COMPANY AS A RESULT OF TAKEOVER OF ASSETS AND LIABILITIES OF M/S V.S. SALES CORPORATION AND M/S V.S. MECHANICAL WORKS AND REPRESENTED OUTSTANDI NG BALANCES IN THEIR CASES AS ON 1.4.2005. THE LD. CIT (A) NOTED THAT NE ITHER THE MONEY IN QUESTION WAS DIRECTLY RECEIVED BY THE ASSESSEE NOR THE SAME WAS RECEIVED IN THE YEAR UNDER CONSIDERATION. THE REVENUE HAS QUEST IONED THIS ACTION OF THE LD. CIT (A). ITA NO. 1290 & 1401/DEL/2011 17 16. THE LD. DR HAS BASICALLY PLACED RELIANCE ON THE ASS ESSMENT ORDER WITH THE SUBMISSIONS THAT NEITHER IDENTITY OF THE SHAREH OLDERS NOR THE GENUINENESS OF TRANSACTIONS HAVE BEEN ESTABLISHED BY THE ASSESS EE. HE POINTED OUT THAT THE ADDRESSES GIVEN BY THE SHAREHOLDERS WERE SHOWN AT T HE ADDRESS OF ASSESSEE ITSELF. THE LD. AR ON THE CONTRARY TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE. 17. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW AS DISCUSSED ABOVE, WE FIND THAT THE LD. CIT (A) HAS DELETED THE ADDITION IN QUESTION MAINLY ON THE BASIS THAT INCREASE IN THE AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE COMPANY AS A RESULT OF TAKE OVER OF AS SETS AND LIABILITIES OF M/S V.S. SALES CORPORATION AND M/S V.S. MECHANICAL WORK S, THE PROPRIETORSHIP CONCERNS OF THE DIRECTORS AND THAT THE AMOUNT REPRE SENTED OUTSTANDING BALANCES IN THEIR CASES AS ON 1.4.2005. THUS NEITHE R THE MONEY IN QUESTION WAS DIRECTLY RECEIVED BY THE ASSESSEE COMPANY NOR T HE SAME WAS RECEIVED IN THE YEAR UNDER CONSIDERATION. THE INCREASE IN SHARE CAPITAL WAS A RESULT OF BOOK ENTRIES PASSED CONSEQUENT TO THE TAKE OVER OF ASSETS AND LIABILITIES OF THE AFORESAID TWO CONCERNS. THE AO DID NOT FIND ANY THING WRONG WITH THE TAKE OVER OF THE ASSETS AND LIABILITIES OF THE SAID CONCERNS. THE AO HAD MADE ADDITION U/S 68 OF THE ACT ON THE BASIS THAT THE AS SESSEE HAD FAILED TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE SHAR E APPLICANTS AND THE ITA NO. 1290 & 1401/DEL/2011 18 GENUINENESS OF THE TRANSACTION TO WHICH THE LD. CIT (A) AGREED UPON WITH THIS FINDING IN PARA NO. 4.7 OF THE FIRST APPELLATE ORDER THAT THE AMOUNT OF RS.97,20,420/- IS NOT ENTIRELY EXPLAINABLE. THE LD . CIT (A) IN THIS PARAGRAPH HAS HELD THAT THE ACTION IS CERTAINLY CAL LED FOR TO BRING THE SAME TO TAX AS PER THE PROVISIONS OF LAW IN THE HANDS OF PR OPRIETORS OF M/S V.S. MECHANICAL WORKS AND M/S V.S. SALES CORPORATION. IT HAS BEEN NOTED THAT IN THE BOOKS OF THE ABOVE STATED TWO PROPRIETOR CONCER NS, THERE WERE CREDITORS OF RS.57,09,240/- (RS.31,75,600 + RS.25,33,640) AND CREDIT BALANCE/DEPOSITS OF RS.8,43,500/-(RS.800000 + RS.43,500) IN ADDITION TO PROPRIETORS NET SALE CONSIDERATION (ASSETS LIABILITIES) OF RS.18,49,43 0/- (RS.1350630 + RS.498800) WHICH WERE TAKEN OVER BY THE ASSESSEE CO MPANY AND THERE WAS CREDIT BALANCE OF RS.1318250/- IN THE BOOKS OF THE ASSESSEE COMPANY IN THE NAME OF 5 PARTIES IN LIEU OF ALL THESE CREDIT BALAN CES AS ON 1.4.2005 (RS.57,09,240 + RS.8,43,500 + RS.18,49,430 + RS.13, 18,250) SHARES OF RS.97,20,420/- WERE ALLOTTED. THE AO MADE ADDITION OF ALL THESE AMOUNTS OF RS.97,20,420/- U/S 68 OF THE ACT TREATING IT AS BOG US SHARE CAPITAL IN RESPECT OF ALL THE 31 PARTIES AS ASSESSEE FAILED TO PROVE I DENTITY AND CAPACITY OF ALL THESE PERSONS AND GENUINENESS OF THESE TRANSACTIONS . THE BASIS ON WHICH THE LD. CIT (A) HAS DELETED THE ADDITION THAT THE AMOUN T OF RS.97,20,420/- IN THE HANDS OF THE ASSESSEE COMPANY HAS BEEN RECEIVED BY THE ASSESSEE COMPANY ITA NO. 1290 & 1401/DEL/2011 19 AS A RESULT TAKE OVER OF ASSETS AND LIABILITIES OF M/S V.S. SALES CORPORATION AND M/S V.S. MECHANICAL WORKS AND REPRESENTED OUTST ANDING BALANCES IN THEIR CASES AS ON 1.4.2005, HAS NOT BEEN REBUTTED B Y THE REVENUE. THE REVENUE HAS ALSO NOT REBUTTED THE RELEVANT FINDINGS OF THE LD. CIT (A) THAT NEITHER THE MONEY IN QUESTION WAS DIRECTLY RECEIVED BY THE ASSESSEE COMPANY NOR THE SAME WAS RECEIVED IN THE YEAR UNDER CONSIDE RATION, WE THUS DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD. UNDISPUTEDLY, THE INCREASE IN SHARE CAPITAL WAS AS A RESULT OF BOOK E NTITIES PASSED CONSEQUENT TO THE TAKE OVER OF ASSETS AND LIABILITIES OF THE AFOR ESAID TWO CONCERNS. THE ACTION OF THE FIRST APPELLATE AUTHORITY IN DELETING THE ADDITION OF RS.97,20,420/- IN THE HANDS OF THE ASSESSEE DOES NO T REQUIRE INTERFERENCE. THE SAME IS UPHELD. THE GROUND NO. 1 OF THE APPEAL PREFERRED BY THE DEPARTMENT IS THUS REJECTED. GROUND NO. 3 (DEPARTMENT) 18. THE AO MADE ADDITION OF RS.57,000/- ON ACCOUNT OF U NEXPLAINED CASH CREDIT. THE AO HAD ASKED FOR NECESSARY CONFIRMATION S ETC. IN RESPECT OF TWO CASH CREDITS APPEARING IN THE NAMES OF SH. VIJAY KU MAR, (RS.50,000/-) AND SH. SANTOSH MISHRA (RS.7,000/-). THE AO HAD MADE AD DITION ON THE BASIS THAT THE ASSESSEE FAILED TO MAKE PROPER COMPLIANCE. THE LD. CIT (A) HAS DELETED THE ADDITION ON THE BASIS THAT BEFORE THE A O THE ASSESSEE HAD FILED ITA NO. 1290 & 1401/DEL/2011 20 CONFIRMATIONS OF BOTH THE CREDITORS AND THE TRANSAC TIONS WERE MADE BY MEANS OF BANKING CHANNELS, HENCE THE AO WITHOUT VERIFYING THOSE DOCUMENTS WAS NOT JUSTIFIED IN MAKING THE ADDITION. 19. IN SUPPORT OF THE GROUND THE LD. DR HAS PLACED RELI ANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT THE ASSESSEE FA ILED TO FILE STATEMENTS AND INCOME TAX RETURNS OF THE SAID TWO CREDITORS BEFORE THE AO, HENCE THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. THE LD. AR ON THE CONTRARY TRIED TO JUSTIFY THE FIRST APPELLAT E ORDER. 20. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT BY F ILING CONFIRMATIONS OF THE ABOVE SAID TWO CREDITORS WITH THIS SUBMISSION THAT THE TRANSACTIONS WERE MADE THROUGH THE BANKING CHANNEL, WE ARE OF THE VIEW THAT THE ASSESSEE HAD DISCHARGED PRIMARY ONUS TO ESTABLI SH THE CLAIMED CREDITS. THUS IN ABSENCE OF FINDING OF THE AO THAT INFORMATI ON FURNISHED IN THOSE CONFIRMATIONS WERE FALSE OR UNVERIFIABLE, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF THE AMOUNT IN QUESTION U/S 68 OF THE ACT AND THE SAME HAS BEEN RIGHTLY DELETED BY THE LD . CIT (A). THE ACTION OF THE FIRST APPELLATE AUTHORITY IN THIS REGARD IS THU S UPHELD. THE GROUND NO. 3 AND 3.1 ARE ACCORDINGLY REJECTED. GROUND NOS. 4 & 4.1 ITA NO. 1290 & 1401/DEL/2011 21 21. THE AO MADE DISALLOWANCE OF RS.3,97,000/- BEING DEP RECIATION ON OLD SEWING MACHINES. THE AO HAS MADE DISALLOWANCE O N THE BASIS THAT THE SEWING MACHINES AND OTHER ACCESSORIES CONSTITUTE TH E STOCK- IN- TRADE OF THE ASSESSEE COMPANY AND THE BUSINESS ACTIVITIES CARRIE D ON BY IT DO NOT REQUIRE ANY USE OF SUCH MACHINES. THE LD. CIT (A) HAS DELET ED DISALLOWANCE ACCEPTING THE CONTENTION OF THE ASSESSEE THAT APART FROM TRADING IN INDUSTRIAL SEWING MACHINES, THE ASSESSEE WAS ALSO ENGAGED IN R EPAIRS, JOB WORK AND HIRING OF SEWING MACHINES. 22. IN SUPPORT OF GROUND THE LD. DR HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. AR HAD TRIED TO JUSTIFY THE FIRST AP PELLATE ORDER IN THIS REGARD. 23. WE FIND THAT DURING THE YEAR THE ASSESSEE HAD DISCC USSED RENTAL INCOME OF RS.24,42,186/-. THUS THE LD. CIT (A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT APART FROM TRADING IN INDUSTRI AL SEWING MACHINES, THE ASSESSEE WAS ALSO ENGAGED IN REPAIRS JOB WORK AND H IRING OF SEWING MACHINES. AS DISCLOSED ABOVE THE AO HAD DISALLOWED RS.3,00,097/- BEING DEPRECIATION ON OLD SEWING MACHINES ON THE BASIS TH AT THE SEWING MACHINES, OTHER ACCESSORIES CONSTITUTE THE STOCK- IN- TRADE O F THE ASSESSEE COMPANY AND THE BUSINESS ACTIVITIES CARRIED ON DO NOT REQUIRE A NY USE OF SUCH MACHINES. THESE OBSERVATIONS OF THE AO WAS CONTRARY TO THE FA CTS IN THE CASE. WE THUS DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER, WHEREBY THE LD. CIT (A) ITA NO. 1290 & 1401/DEL/2011 22 HAS DELETED THE DISALLOWANCE. THE SAME IS UPHELD. T HE GROUND NOS. 4 AND 4.1 ARE THUS REJECTED. GROUND NO. 5 (DEPARTMENT) 24. THE AO MADE ADDITIONS OF RS.40,069/- AND RS.49,634/ - ON ACCOUNT OF NON-MOVING CREDITORS. THE AO CALLED FOR DETAILS OF NON-MOVING CREDITORS AND ON EXAMINATION THEREOF FOUND THAT IN THE CASE O F RASHI WEAR PVT. LTD. AND M/S SINGER INDIA LTD. THERE WERE CREDIT BALANCE S OF RS.40,069/- AND RS.49,634/- RESPECTIVELY. SINCE THE ASSESSEE FAILED TO FURNISH ANY CONFIRMATIONS THE AO MADE THE ADDITION. THE LD. CIT (A) HAS HOWEVER, DELETED THE SAME BEING CONVINCED WITH THE SUBMISSIO N OF THE ASSESSEE. 25. IN SUPPORT OF GROUND THE LD. DR HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. CIT (A) HAS TRIED TO JUSTIFY THE FIR ST APPELLATE ORDER IN THIS REGARD. 26. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT BEFO RE THE LD. CIT (A) THE ASSESSEE CONTENDED THAT THE AO HAS MADE ADD ITION WITHOUT APPRECIATING THE REAL NATURE OF TRANSACTIONS WITH T HE CONCERN PARTIES IN CORRECT PROSPECTIVE. IT WAS SUBMITTED THAT IN THE C ASE OF M/S SINGER INDIA LTD. THE AMOUNT OF RS.49,634/- IS INFACT A DEBIT BA LANCE RECEIVABLE BY THE ASSESSEE COMPANY. SIMILARLY, IN THE CASE OF M/S RAS HI WEAR PVT. LTD.. THE AMOUNT OF RS.40,069/-IS THE AMOUNT WHICH HAS BEEN B ROUGHT INTO THE BOOKS ITA NO. 1290 & 1401/DEL/2011 23 OF ACCOUNTS OF THE ASSESSEE ON ACCOUNT OF MERGER O F M/S V.S. MECHANICAL WORKS. IT WAS SUBMITTED FURTHER THAT IN CASE OF M/S RASHI WEAR PVT. LTD. THE AMOUNT WAS STILL OUTSTANDING AS ON 31 MARCH, 2006 A ND THERE WAS NO CESSATION OR REMISSION OF THE LIABILITY AND THEREFO RE THE SAME COULD NOT HAVE BEEN TREATED AS INCOME OF THE ASSESSEE COMPANY. UND ER THESE CIRCUMSTANCES, THE LD. CIT (A) IN OUR VIEW HAS RIGHTLY DELETED THE ADDITIONS. THE SAME IS UPHELD. GROUND NOS. 5 AND 5.1 ARE REJECTED. GROUND NOS. 6 & 6.1 (DEPARTMENT) 27. ISSUE RAISED IN THIS GROUND HAS ALREADY BEEN ADJUDI CATED UPON HEREIN ABOVE WHILE DEALING WITH GROUND NO. 3 OF THE APPEAL PREFERRED BY THE ASSESSEE. FOLLOWING THE DECISION TAKEN THEREIN THES E GROUNDS ARE REJECTED. 28. IN RESULT BOTH THE APPEALS ARE DISMISSED. 29. THE ORDERS ARE PRONOUNCED IN THE OPEN COURT ON THE DAY 21/09/2012. SD/- SD/- G.D.AGRAWAL ) (I.C.SUDH IR) VICE-PRESIDENT JUDICIAL MEMBER DATED: 21/09/2012 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 1290 & 1401/DEL/2011 24