M/s. Fantacy Creations, Kolkata V. ITO, Ward - 52(1), Kolkata, Kolkata

ITA 1329/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100150 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 11-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TANUJ NIOGI
• Keywords: Unexplained expenditure
• Section: 133A

Judgement Text

I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1329/KOL/ 2011 ASSESSMENT YEAR : 2006-2007 M/S. FANTACY CREATIONS,............................ ...........................APPELLANT 86, DESHBANDHU ROAD, KOLKATA-700 032 [PAN : AAAFF 6588 Q] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-52(1), KOLKATA, AAYAKAR BHAWAN (DAKSHIN), GARIAHAT ROAD (SOUTH), KOLKATA & I.T.A. NO. 1463/KOL/ 2011 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,................................ ...............................APPELLANT WARD-52(1), KOLKATA, AAYAKAR BHAWAN (DAKSHIN), GARIAHAT ROAD (SOUTH), KOLKATA -VS._ M/S. FANTACY CREATIONS,............................ ...........................RESPONDENT 86, DESHBANDHU ROAD, KOLKATA-700 032 [PAN : AAAFF 6588 Q] APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE , FOR THE ASSESSEE SHRI TANUJ NIOGI, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 18, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 27, 2015 O R D E R PER SHRI P.M. JAGTAP :- THESE TWO APPEALS, ONE FILED BY THE ASSESSEE BEING ITA NO. 1329/KOL/2011 AND THE OTHER FILED BY THE REVENUE BE ING ITA NO. 1463/KOL/2011, ARE CROSS APPEALS, WHICH ARE DIRECTE D AGAINST THE ORDER I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 9 OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXIII, KOLKATA DATED 12.08.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESEE, WHIC H INVOLVES A SOLITARY ISSUE RELATING TO THE ADDITION OF RS.19,88,702/- MA DE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF EXCESS STOCK ALLEGEDLY FOUND DURING THE COURSE OF SURVEY. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G OF TOYS. A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 20.12.2005. SUBSEQUENT TO THE SURVEY, T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE A SSESESE ON 27.10.2006 DECLARING TOTAL INCOME OF RS.9,73,110/-. DURING THE COURSE OF SURVEY, INVENTORY OF STOCK WAS PREPARED ON PHYSICAL VERIFIC ATION AND THE VALUE OF THE SAME AS WORKED OUT BY THE SURVEY TEAM WAS FOUND TO BE RS.72,48,587/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO P REPARE AND FURNISH THE MANUFACTURING AND TRADING ACCOUNT FOR THE PRE-SURVE Y PERIOD AND POST- SURVEY PERIOD SEPARATELY. AS PER SUCH SEPARATE ACC OUNT FURNISHED BY THE ASSESSEE, THE CLOSING STOCK AS PER THE BOOKS OF ACC OUNT OF THE ASSESSEE AS ON THE DATE OF SURVEY, I.E. 20.12.2005 WAS SHOWN AT RS.41,08,389/- AS AGAINST THE STOCK AS VALUED ON THE DATE OF SURVEY A T RS.72,48,587/-. AS REGARDS THIS DIFFERENCE, IT WAS EXPLAINED BY THE AS SESSEE THAT THE VALUATION OF STOCK DURING THE COURSE OF SURVEY WAS DONE BY THE SURVEY TEAM ON THE BASIS OF DEALERS PRICE AND, THEREFORE, THE DEALERS MARGIN AS WELL AS ASSESSEES GROSS PROFIT WAS REQUIRED TO BE DEDUCTED FROM THE VALUE OF STOCK ARRIVED AT BY THE SURVEY TEAM TO WOR K OUT THE COST OF STOCK FOUND DURING THE COURSE OF SURVEY. IT WAS CLAIMED T HAT THE CLOSING STOCK OF RS.41,08,389/- AS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE ON THE DATE OF SURVEY WAS AT SUCH COST AND THERE WAS NO DI FFERENCE IN THE VALUE OF STOCK AS FOUND DURING THE COURSE OF SURVEY. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER. ACCORDING TO I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 9 HIM, THE STOCK AS FOUND DURING THE COURSE OF SURVEY WAS MAINLY REPRESENTED THE GOODS DEALT IN BY THE ASSESSEE AND IT WAS POSSIBLE TO WORK OUT THE EXACT COST OF SUCH STOCK BY TAKING THE PURCHASE VALUE AS PER BILLS AND ALLOCATING RELEVANT DIRECT EXPENSES THERE TO. HE HELD THAT THE METHOD ADOPTED BY THE ASSESSEE BY REDUCING THE DEAL ERS MARGIN AS WELL AS ITS OWN GROSS PROFIT FROM THE DEALERS PRICE TO WORK OUT THE COST WAS NOT CORRECT. HE, THEREFORE, REJECTED THE BOOK RESUL TS SHOWN BY THE ASSEESSEE AND PROCEEDED TO DETERMINE THE VALUE OF S TOCK FOUND DURING THE COURSE OF SURVEY ON THE BASIS OF OTHER MATERIAL FOU ND DURING THE COURSE OF SURVEY. IN THIS REGARD, HE NOTED THAT THE ACTUAL ST OCK AS ON 31.03.2006 WAS RS.79,60,532/-, OUT OF WHICH THE STOCK TO THE E XTENT OF RS.35,25,597/- WAS RELATED TO THE IMMEDIATELY PRECEDING YEAR, I.E. FINANCIAL YEAR 2004- 05. HE HELD THAT SINCE THE CLOSING STOCK OF RS.24,4 6,233/- SHOWN BY THE ASSESSEE IN THE RETURN WAS EXCLUSIVE OF DIFFERENCE IN THE OPENING STOCK OF RS.35,25,597/-, THERE WAS UNDERSTATEMENT OF CLOSING STOCK OF RS.19,88,702/- PREPARED BY THE ASSESSEE AND ACCORDI NGLY, THE SAID AMOUNT WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE ADDITION MADE BY THE ASSESSING OFFICER ON AC COUNT OF THE ALLEGED UNDERSTATEMENT OF CLOSING STOCK WAS CHALLEN GED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND AF TER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE RELEVANT MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION FOR THE FOLLOWING REASONS GIVEN IN PARAGRA PH NO. 4 OF HIS IMPUGNED ORDER:- 4. GROUND NO.4 RELATES TO SPECIFIC ADDITION MADE ON ACCOUNT OF UNDERSTATEMENT OF STOCK. THE FACTS AS WELL AS AP PELLANT'S SUBMISSION IN THIS BEHALF HAVE ALREADY BEEN DISCUSS ED ABOVE. THE APPELLANT HAS HARPED UPON FACTORS LIKE DEALER'S MAR GIN, MERCHANT MARGIN, APPELLANT'S PROFIT RATE ETC. TO DI SPUTE THE ADDITION MADE BY THE ASSESSING OFFICER. HOWEVER THE FACT REMAINS THAT ASSESSING OFFICER HAS RE-CASTED THE MANUFACTUR ING AND TRADING ACCOUNT FOR THE PERIOD OF 18-12-2005 TO 31- 03-2005 ON THE BASIS OF DATA CONTAINED IN APPELLANT'S OWN COMP UTER FROM WHICH PRINT OUT WERE TAKEN AT THE TIME OF SURVEY. A LL THE ANNEXURES INCLUDING FC-8 RELIED UPON BY THE ASSESSI NG OFFICER ARE NOTHING BUT REFLECTION OF APPELLANT'S OWN DATA. THI S FACT HAS NOT I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 9 BEEN DISPUTED BY THE APPELLANT. THEREFORE FIGURE AD OPTED BY THE ASSESSING OFFICER ARE FOR VALUE OF STOCK BASED ON A PPELLANT OWN DATA. IT IS A REASONABLE PRESUMPTION THAT WHEN DURI NG THE COURSE OF SURVEY ACTION ANY DATA IN, BOOKS OF ACCOUNT, (IN CLUDING COMPUTERIZED BOOKS OF ACCOUNT.) DOCUMENTS ETC ARE F OUND THE SAME ARE PRESUMED TO BE CORRECT. AN ANALOGY COULD B E DRAWN FROM SECTION 132(4A) WHICH CLEARLY SPECIFIES SUCH P RESUMPTION IN RESPECT OF SEARCH ACTION. IT IS TRUE THAT SUCH A PR ESUMPTION IS REBUTTABLE. HOWEVER, IN THE APPELLANT CASE IT HAS N OT BEEN ABLE TO SUCCESSFULLY REBUT THE PRESUMPTION REGARDING COR RECTNESS OF DATA FOUND AT THE TIME OF SURVEY, EITHER DURING THE ASSESSMENT OR THE APPELLATE PROCEEDINGS. SINCE THE WORKING DONE B Y THE ASSESSING OFFICER IS BASED ON APPELLANT'S OWN VALUA TION DATA, VARIOUS DISPUTES REGARDING METHOD OF VALUATION RAIS ED BY THE APPELLANT ARE IRRELEVANT. SO FAR AS THE RECASTED TR ADING ACCOUNT PREPARED BY THE ASSESSING OFFICER IS CONCERNED, THE AIR COULD NOT POINT OUT ANY SPECIFIC DEFECT IN THE SAME. IN FACT THE ASSESSING OFFICER HAS ALREADY MADE ALL REASONABLE ALLOWANCES SUCH AS ADJUSTMENT FOR DISCREPANCY IN OPENING STOCK WHICH A RRIVING AT THE NET ADDITION. CONSIDERING THESE FACTS, I AM IN AGREEMENT WITH THE ASSESSING OFFICER AND ADDITION OF RS.19,78,702/ - IS CONFIRMED. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY C ONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ADDITION ON ACCOUNT O F UNDERSTATEMENT OR EXCESS OF STOCK, AS ALLEGEDLY FOUND DURING THE COUR SE OF SURVEY, IS REQUIRED TO BE DONE BY COMPARING THE STOCK AS FOUND DURING THE COURSE OF SURVEY ON PHYSICAL VERIFICATION AND THE STOCK AS DE CLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AS ON THE DATE OF SURVEY. I T APPEARS THAT THE ASSESSING OFFICER, HOWEVER, PROCEEDED ON ALL TOGETH ER DIFFERENT BASIS, WHICH CANNOT BE ACCEPTED NOT BEING WELL FOUNDED. TH E METHOD ADOPTED BY HIM TO WORK OUT THE ALLEGED UNDERSTATEMENT OF STOCK BY THE ASSESSEE BY COMPARING THE OPENING STOCK AS WELL AS THE CLOSING STOCK DIFFERENCES, IN OUR OPINION, IS NEITHER COGENT NOR CONVINCING AND T HE LD. CIT(APPEALS) IS NOT JUSTIFIED TO CONFIRM THE ADDITION MADE BY THE A SSESSING OFFICER ON THIS ISSUE BY FOLLOWING THE SAID METHOD. IN OUR OPINION, THE EXCESS STOCK, IF ANY, FOUND DURING THE COURSE OF SURVEY HAS TO BE DE TERMINED BY COMPARING THE STOCK AS FOUND DURING THE COURSE OF S URVEY ON PHYSICAL VERIFICATION AND AS SHOWN BY THE ASSESSEE IN THE BO OKS OF ACCOUNT. IN THE PRESENT CASE, THE STOCK AS ON THE DATE OF SURVEY WA S VALUED BY THE SURVEY I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 5 OF 9 TEAM AT RS.72,48,587/- ON THE BASIS OF INVENTORY PR EPARED ON PHYSICAL VERIFICATION, WHILE THE SAME AS SHOWN BY THE ASSEES SEE IN THE BOOKS OF ACCOUNT AS ON THE DATE OF SURVEY WAS RS.41,08,389/- SHOWING THE DIFFERENCE OF RS.31,40,198/-. IN THIS REGARD, THE E XPLANATION OFFERED ON BEHALF OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WELL AS BEFORE US IS THAT THE STOCK AT THE TIME OF SURVEY WAS VALUED BY THE SURVEY TEAM AT DEALERS PRICE AND THE DIFFERENCE IN THE VALUE OF S TOCK IS ON ACCOUNT OF DEALERS MARGIN AS WELL AS ASSESSEES OWN GROSS PRO FIT, WHICH WAS INCLUDED IN THE VALUE OF STOCK DETERMINED BY THE SU RVEY TEAM, WHEREAS THE SAME WAS EXCLUDED BY THE ASSESSEE TO ARRIVE AT COST. IT APPEARS THAT THIS EXPLANATION OFFERED BY THE ASSESSEE, HOWEVER, HAS NOT BEEN VERIFIED EITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(A PPEALS). IT IS ALSO OBSERVED THAT THE ASSESSING OFFICER HAS NOT EVEN MA DE ANY ATTEMPT TO WORK OUT THE ACTUAL COST OF STOCK FOUND DURING THE COURSE OF SURVEY ON PHYSICAL VERIFICATION BY REFERRING TO THE RELEVANT PURCHASE BILLS AS WELL AS THE DIRECT EXPENSES ALLOCABLE THERETO. WE, THEREFOR E, CONSIDER IT FAIR AND PROPER TO SET ASIDE THE IMPUGNED ORDER OF THE LD. C IT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR DECIDING THE SAME AFRESH AFTER DOING SUCH EXERCISES. 6. IN ITS CROSS APPEAL FILED IN THIS CASE, THE REVE NUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDI TION OF RS.16,39,135/- MADE BY THE ASSESSING OFFICER BY ACCEPTING THE ALTE RED CASH BOOK PREPARED BY THE ASSESSEE SUBSEQUENT TO SEARCH UNDER SECTION 133A. 7. DURING THE COURSE OF SURVEY, CASH AMOUNTING TO R S.25,000/- WAS FOUND FROM THE BUSINESS PREMISES OF THE ASSESSEE. A S PER THE COMPUTERIZED CASH BOOK WRITTEN UPTO 17.12.2005 AND FOUND DURING THE COURSE OF SURVEY, THE CASH BALANCE WAS RS.12,46,447 /-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A CASH BOOK WRITTEN UPTO 31.03.2006 WAS PRODUCED BY THE ASSESSEE, WHICH WAS FOUND TO BE DIF FERENT BY THE ASSESSING OFFICER FROM THE CASH BOOK FOUND DURING T HE COURSE OF SURVEY. ON VERIFICATION OF THE NEW CASH BOOK VIS-A-VIS THE CASH BOOK IMPOUNDED I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 6 OF 9 DURING THE COURSE OF SURVEY, IT WAS NOTICED BY THE ASSESSING OFFICER THAT NOT ONLY EXTRA ENTRIES WERE MADE IN THE NEW CASH BO OK, BUT EVEN THE NUMBER OF ENTRIES MADE IN THE IMPOUNDED CASH BOOK W ERE EITHER DELETED OR MODIFIED. HE ALSO OBSERVED THAT THE ASSESSEE HAS DEBITED IN THE NEW CASH BOOK ON THE DATES WHEN THE IMPOUNDED CASH BOOK WAS SHOWING DEBIT BALANCES AND CREDITED NEW CASH ENTRIES ON THE DATES , WHEN THE IMPOUNDED CASH BOOK WAS SHOWING HUGE DEBIT BALANCE. THE EXPLA NATION OFFERED BY THE ASSESSEE IN THIS REGARD THAT SMALL TRANSACTIONS HAD REMAINED UN- ENTERED IN THE CASH BOOK FOR THE PERIOD FROM 01.04. 2005 TO 17.12.2005, WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER O N THE GROUND THAT NO BUSINESSMAN, ACCORDING TO HIM, WOULD LEAVE THE NEW CASH BOOK IN A DEFECTIVE STATE FOR A PERIOD OF 9 MONTHS. HE, THERE FORE, HELD THAT THE NEW CASH BOOK PRODUCED BY THE ASSESSEE WAS NOT RELIABLE ONE AND TREATING THE EXCESS CASH BALANCE OF RS.11,57,740/- AS APPEARING IN THE CASH BOOK FOUND DURING THE COURSE OF SURVEY AS UNDISCLOSED IN COME OF THE ASSESSEE, THE SAID AMOUNT WAS ADDED BY HIM TO THE TOTAL INCOM E OF THE ASSESSEE. THE ASSESSING OFFICER ALSO NOTED THAT DURING CERTAI N SPECIFIC PERIOD, THE ASSESSEE AS PER THE CASH BOOK FOUND DURING THE COUR SE OF SURVEY HAD DISBURSED EXCESS CASH OF RS.4,81,421/- RESULTING IN TO CREDIT BALANCE. ACCORDINGLY, THE SAID AMOUNT WAS TREATED BY THE ASS ESSING OFFICER AS UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE AN D ADDITION ON THIS COUNT WAS MADE BY HIM TO THE TOTAL INCOME OF THE AS SESSEE UNDER SECTION 69C. THUS THE TOTAL ADDITION OF RS.16,39,135/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON THE BASIS OF CASH BOOK FOUND DURING THE COURSE OF SURVEY. 8. THE ADDITION OF RS.16,39,135/- MADE BY THE ASSES SING OFFICER ON THE BASIS OF CASH BOOK FOUND DURING THE COURSE OF SURVE Y WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT (APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) DELETED T HE SAID ADDITION FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 7 OF HIS I MPUGNED ORDER:- I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 7 OF 9 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSION AND THE COMMENTS OF THE ASSESSING OFFICER. IT IS COMMON KNO WLEDGE THAT IN A LARGE NUMBER OF CASES, CASH BOOKS AS WELL AS O THER BOOKS OF ACCOUNTS ARE NOT WRITTEN ON A CONTEMPORARY BASIS. T HE BOOKS OF ACCOUNT FOUND AT THE TIME OF SURVEY ARE OFTEN INCOM PLETE. THEREFORE THE APPELLANT'S SUBMISSION THAT THE IMPOU NDED CASH BOOK WAS NOT COMPLETE AND MANY ENTRIES WERE NOT REC ORDED OR WRONGLY RECORDED CANNOT BE SUMMARILY DISMISSED. IN SUCH CASES THAT THE ENTRIES RECORDED AFTER DATE OF SURVEY SHOU LD BE CAREFULLY SCRUTINIZED AFTER CALLING FOR THE SUPPORTING EVIDEN CES. IF ON SUCH SCRUTINY, CERTAIN ENTRIES ARE FOUND TO BE NOT SATIS FACTORILY EXPLAINED, THEN THE ASSESSING OFFICER WOULD BE PERF ECTLY JUSTIFIED TO TREAT THE SAME AS MANIPULATION OF ACCOUNTS. HOWE VER MERELY BECAUSE CERTAIN ENTRIES HAVE BEEN MADE OR CORRECTED AFTER DATE OF SURVEY DOES NOT MEAN THAT ALL SUCH ENTRIES ARE M ALAFIDES ON MANIPULATIONS. SINCE DURING THE SCRUTINY PROCEEDING S AS WELL AS REMAND PROCEEDINGS THE ASSESSING OFFICER HAS NOT BE EN ABLE TO FIND ANY SPECIFIC CASE OF MANIPULATION IN THE FINAL CASH BOOK, THE FINAL CASH BOOK CANNOT BE REJECTED ALTOGETHER, MORE SO WHEN THEY ARE DULY AUDITED. CONSIDERING THESE FACTS THE ADDIT ION OF RS.16,39,135/- MADE ON THE BASIS OF IMPOUNDED CASH BOOK CANNOT BE SUSTAINED. THE SAME IS ACCORDINGLY DELETED. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE NEW CASH BOOK PREPARED AFTER THE SURVEY AND PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR VERIFICATION OF THE ASSE SSING OFFICER WAS NOT FOUND TO BE A RELIABLE ONE BY THE ASSESSING OFFICER . THE LD. CIT(APPEALS), HOWEVER, ACCEPTED THE SAME AND DELETED THE ADDITION OF RS.16,39,135/- MADE BY THE ASSESSING OFFICER BY RELYING ON THE SAM E OBSERVING THAT THE ASSESSING OFFICER HAD NOT BEEN ABLE TO BE POINT OUT ANY SPECIFIC CASE OF MANIPULATION IN THE SAID CASH BOOK. AS POINTED OUT BY THE LD. D.R. AT THE TIME OF HEARING BEFORE US FROM THE RELEVANT PORTION OF THE ASSESSMENT ORDER, SPECIFIC DEFECTS WERE POINTED OUT BY THE ASS ESSING OFFICER IN THE NEW CASH BOOK PREPARED AND FURNISHED BY THE ASSEESS EE FOR VERIFICATION AND ON THE BASIS OF SUCH DEFECTS, THE SAID CASH BOO K WAS NOT ACCEPTED BY THE ASSESSING OFFICER HOLDING THE SAME TO BE UNRELI ABLE. IT IS THUS CLEAR THAT THE RELIEF GIVEN BY THE LD. CIT(APPEALS) TO TH E ASSESSEE ON THIS ISSUE IS NOT WELL FOUNDED, INASMUCH AS THE ASSESSING OFFI CER ON SCRUTINY HAVING FOUND VARIOUS ALTERATIONS, MODIFICATIONS AND ADDITI ON MADE IN THE NEW CASH BOOK, WHICH REMAINED TO BE SATISFACTORILY EXPL AINED, HAD REJECTED THE I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 8 OF 9 NEW CASH BOOK AND THIS VITAL ASPECT APPEARS TO HAVE BEEN OVERLOOKED BY THE LD. CIT(APPEALS) WHILE GIVING RELIEF TO THE ASS ESSEE ON THIS ISSUE. 10. AFTER HAVING HELD THAT THE NEW CASH BOOK PREPAR ED AND FURNISHED BY THE ASSESSEE WAS NOT RELIABLE AS FOUND BY THE ASSES SING OFFICER ON THE BASIS OF MATERIAL AND SPECIFIC DEFECTS POINTED OUT THEREIN, WE, HOWEVER, FIND THAT THE ADDITION OF RS.11,57,714/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF EXCESS CASH BALANCE SHOWN IN THE CASH BO OK AS COMPARED TO THE BALANCE APPEARING IN THE CASH BOOK FOUND DURING THE COURSE OF SURVEY, IS NOT SUSTAINABLE BECAUSE WE ARE UNABLE TO COMPREHEND HOW SUCH EXCESS BALANCE IN THE CASH BOOK COULD BE TREATED AS UNDISC LOSED INCOME OF THE ASSESSEE AS HELD BY THE ASSESSING OFFICER, AND EVEN THE ASSESSING OFFICER HAS NOT GIVEN ANY BASIS WHATSOEVER FOR GIVING SUCH TREATMENT. AS REGARDS THE NEGATIVE BALANCE APPEARING IN THE CASH BOOK OF THE ASSEESSEE AS FOUND DURING THE COURSE OF SURVEY AMOUNTING TO RS.4,81,42 1/-, THE SAME, IN OUR OPINION, REPRESENTS SHORTAGE OF CASH ON PARTICULAR DATES AND, THEREFORE, THE CORRESPONDING EXPENDITURE CLAIMED TO BE INCURRE D BY THE ASSESSEE AND RECORDED IN THE CASH BOOK HAS TO BE TREATED AS UNEXPLAINED AS RIGHTLY HELD BY THE ASSESSING OFFICER. AS SUCH, CONSIDERING ALL THE FACTS OF THE CASE, WE MODIFY THE IMPUGNED ORDER OF THE LD. CIT(A PPEALS) AND SUSTAIN THE ADDITION OF RS.16,39,135/- MADE BY THE ASSESSIN G OFFICER ON THIS ISSUE TO THE EXTENT OF RS.4,81,421/-. THE APPEAL OF THE R EVENUE THUS IS PARTLY ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES, WHILE THE APPEAL OF THE R EVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 27, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 27 TH DAY OF NOVEMBER, 2015 I.T.A. NOS. 1329 & 1463/KOL./2011 ASSESSMENT YEAR: 2006-2007 PAGE 9 OF 9 COPIES TO : (1) M/S. FANTACY CREATIONS, 86, DESHBANDHU ROAD, KOLKATA-700 032 (2) INCOME TAX OFFICER, WARD-52(1), KOLKATA, AAYAKAR BHAWAN (DAKSHIN), GARIAHAT ROAD (SOUTH), KOLKATA (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXIII, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.