DCIT, CC-2(3), MUMBAI V. PROVOGUE (INDIA) LTD., MUMBAI

ITA 1578/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8406 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Keywords: Bogus purchase; Search and seizure; Opportunity of being heard; Earning of tax free income; Corroborative evidences; Capital receipt
• Section: 143(3); 133A; 153A; 14A; 80IB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 1578/MUM./2015 ( ASSESSMENT YEAR : 2009 10 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(3), MUMBAI . APPELLANT V/S M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . RESPONDENT ITA NO. 1584/MUM./2015 ( ASSESSMENT YEAR : 2009 10 ) M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 13, MUMBAI . RESPONDENT ITA NO. 1585/MUM./2015 ( ASSESSMENT YEAR : 2010 11 ) M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . APPELLANT V/S ASSTT . COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 3, MUMBAI . RESPONDENT 2 M/S. PROVOGUE INDIA LTD. ITA NO. 1579/MUM./2015 ( ASSESSMENT YEAR : 2010 11 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(3), MUMBAI . APPELLANT V/S M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . RESPONDENT ITA NO. 1586/MUM./2015 ( ASSESSMENT YEAR : 2011 12 ) M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 13, MUMBAI . RESPONDENT ITA NO. 1580/MUM./2015 ( ASSESSMENT YEAR : 2011 12 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(3), MUMBAI . APPELLANT V/S M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . RESPONDENT 3 M/S. PROVOGUE INDIA LTD. ITA NO. 1587/MUM./2015 ( ASSESSMENT YEAR : 2012 13 ) M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 13, MUMBAI . RESPONDENT ITA NO. 1581/MUM./2015 ( ASSESSMENT YEAR : 2012 13 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(3), MUMBAI . APPELLANT V/S M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . RESPONDENT ITA NO. 1545/MUM./2015 ( ASSESSMENT YEAR : 2008 09 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(3), MUMBAI . APPELLANT V/S M/S. PROVOGUE INDIA LTD. 105/106, PROVOGUE HOUSE OFF. NEW LINK ROAD ANDHERI (W), MUMBAI 400 053 PAN AABCA8524H . RESPONDENT ASSESSEE BY : SHRI MANDAR VAIDYA A/W SHRI RUSHABH MEHTA REVENUE BY : SHRI H.N. SINGH DATE OF HEARING 27.09.2017 DATE OF ORDER 10.11.2017 4 M/S. PROVOGUE INDIA LTD. O R D E R PER BENCH THESE BUNCH OF NINE APPEALS , FIVE BY REVENUE AND FOUR BY THE ASSESSEE , ARE AGAINST SEPARATE ORDERS OF THE LEARNED COMMISSIONER (APPEALS) 48, MUMBAI, FOR THE ASSESSMENT YEARS 2008 09, 2009 10, 2010 11, 2011 12 AND 2012 13. ITA NO.1545/MUM./2015 REVENUES APPEAL FOR A.Y. 2008 09 2 . THE ONLY ISSUE RAISED BY THE REVENUE PERTAINS TO DELETION OF ADDITION OF ` 55,61,275, MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ) R/W RULE 8D OF THE INCOME TAX RULES, 1962. 3 . BRIEF FACTS ARE, THE ASSESSEE A DOMESTIC COMPANY IS ENGAGED IN THE MANUFACTURE AND SALE OF GARMENT S , FASHION ACCESSORIES, ETC., UNDER THE BRAND NAME PROVOGUE . FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED ITS ORIGINAL RETURN OF INCOME ON 30 TH SEPTEMBER 200 8, DECLARING TOTAL INCOME OF ` 19,92,41,080. ASSESSMENT IN CASE OF ASSESSEE WAS ORIGINALLY COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 11 TH MAY 2009, DETERMINING THE TOTAL INCOME AT ` 20,60,70,360. SUBSEQUENTLY, PURSUANT TO A SEARCH AND SEIZ URE OPERATION UNDER SECTION 132 OF THE ACT, CONDUCTED IN CASE OF THE ASSESSEE, THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 5 M/S. PROVOGUE INDIA LTD. 153A OF THE ACT. ULTIMATELY, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT VIDE ORDER DATED 9 TH JANUARY 2014, MAKING C OUPLE OF ADDITIONS WHICH RESULTED IN DETERMINATION OF TOTAL INCOME AT ` 21,17,25,100. ONE OF THE ADDITIONS MADE BY THE ASSESSING OFFICER WAS AN AMOUNT OF ` 55,61,275 UNDER SECTION 14A R/W RULE 8D TOWARDS EXPENDITURE INCURRED FOR EARNING EXEMPT INCOME. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4 . AS FAR AS THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE UNDER SECTION 14A IS CONCERNED , IT WAS ARGUED BEFORE THE LEARNED COMMISSIONER (APPEALS) BY THE ASSESSEE THAT SUCH ADDITION HAVING NOT BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL COULD NOT HAVE MADE IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT. THE LEARNED CO MMISSIONER (APPEALS) HAVING FOUND THE AFORESAID CONTENTION OF THE ASSESSEE ACCEPTABLE IN VIEW OF THE DECISIONS OF THE TRIBUNAL, MUMBAI, SPECIAL BENCH, IN ALL CARGO GLOBAL LOGISTICS LTD. V/S DCIT, [2012] 23 TAXMANN.COM 103 , DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 5 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, I N THE FACTS OF THE PRESENT CASE BY THE TIME THE SEARCH AND SEIZURE OPERATION TOOK PLACE UNDER SECTION 132 OF THE ACT, IN CASE OF THE ASSESSEE O N 20 TH JANUARY 2012, 6 M/S. PROVOGUE INDIA LTD. ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR STOOD COMPLETED UNDER SECTION 143 (3) OF THE ACT. THUS, AS ON THE DATE OF SEARCH THERE WAS NO ABATED ASSESSMENT PROCEEDING FOR THE IMPUGNED ASSESSMENT YEAR. THEREFORE, IN THE PROCEEDINGS INITIATED UNDER SECTION 153A OF THE ACT, THE ASSESSING OFFICER COULD HAVE MADE ADDITIONS ONLY IN RESPECT OF INCOME WHICH WAS FOUND AS A RESULT OF SEARCH OR HAS A NEXUS WITH THE INCRIMINATING MATERIALS FOUND AS A RESULT OF SEARCH. ON THE CONTRARY, IN THE COMPUTATION FILED ALONG WITH THE ORIGINAL RETURN OF INCOME, THE ASSESSEE MADE A DISALLOWANCE OF ` 10 LAKH UNDER SECTION 14A OF THE ACT. THUS, THE ISSUE OF DISALLOWANCE OF EXPENDITURE UNDER SECT ION 14A STOOD CONCLUDED ON COMPLETION OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT ORIGINALLY. THAT BEING THE CASE, THE ASSESSING OFFICER HAS NO POWER TO RE VISIT SUCH ISSUE IN THE PROCEEDING INITIATED UNDER SECTION 153A OF THE ACT IN THE ABSENCE OF ANY I NCRIMINATING MATERIAL CONCERNING SUCH ISSUE. THAT BEING THE CASE, IN OUR VIEW, THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) B Y DISMISSING THE GROUND RAISED. 6 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.1578/MUM./2015 REVENUES APPEAL FOR A.Y. 2009 10 7 M/S. PROVOGUE INDIA LTD. 7 . THE REGISTRY HAS POINTED OUT A DELAY OF TWO DAYS IN FILING THE PRESENT APPEAL. HOWEVER, AS PER THE LETTER DATED 29 TH JULY 2017 OF THE ASSESSING OFFICER, THE DELAY OF 2 DAYS WAS DUE TO WRONG MENTIONING OF DATE OF RECEIPT OF APPEAL ORDER IN FORM NO.36. CONSIDERING THE ABOVE, WE CONDONE THE DELAY OF TWO DAYS. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN HOLDING THAT AMOUNT OF FORFEITURE OF SHARE WARRANTS IS CAPITAL RECEIPT AND NOT REVENUE RECEIPT, WITHOUT APPRECIATING THE FACT THAT IF A RECEIPT WAS OF CAPITAL CHARECTER, WHEN RECEIVED, ITS CHARACTER CHANGES WHEN THE AMOUNT BECOMES THE ASSESSEES OWN MONEY BECAUSE OF LIMITATION OR BY ANY OTHER STATUTORY OR CONTRACTUAL RIGHT, AS HELD BY THE APEX COURT IN THE CASE OF CIT V/S T.V. SUN DERA M IYENGER & SONS LTD. (SC) 8 . BRIEF FACTS RELATING TO THIS ISSUE ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WHILE VERIFYING THE BALANCE SHEET OF THE COMPANY FOR THE RELEVANT FINANCIAL YEAR FOUND THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF ` 2,09,82,015, TOWARDS FORFE I TURE OF SHARE WARRANT WI THOUT OFFERING IT AS INCOME, THEREFORE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE AMOUNT RECEIVED BY THE ASSESSEE SHOULD NOT BE TREATED AS REVENUE RECEIPT AND MADE T A X AB LE. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT IT HAD I SSUED SHARE WARRANTS TO THE APPLICANTS IN THE FINANCIAL YEAR 2006 07 ON THE CONDITION THAT EACH WARRANT WOULD CARRY OPTION TO SUBSCRIBE ONE EQUITY SHARE OF ` 10 EACH AT A PRICE NOT LESS THAN ` 450 PER SHARE. THE 8 M/S. PROVOGUE INDIA LTD. APPLICANT S HA VE EXERCISED THEIR RIGHT TO SUB SCRIBE TO THE SHARES IN FINANCIAL YEAR 2007 08 AND FINANCIAL YEAR 2008 09. HOWEVER, SHARE WARRANTS AMOUNTING TO ` 2,09,82,015 WERE FORFEITED SINCE NONE OF THE APPLICANTS WERE READY TO EXERCISE THEIR RIGHT TO SUBSCRIBE TO THE BALANCE SHARE DUE TO REDUCTION IN SHARE PRICE. IT WAS SUBMITTED, THE FORFEITURE OF SHARE WARRANT WAS IN THE NATURE OF CAPITAL RECEIPT , SINCE THE AMOUNT WAS ORIGINALLY RECEIVED FOR SUBSCRIPTION TO THE SHARE CAPITAL OF THE COMPANY. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS: I ) DCIT V/S BRIJLAXMI LEASING AND FINANCING LTD., 118 ITD 546; II ) ASIATIC OXYGEN LTD., 49 ITD 355; III ) DEEPAK FERTILIZER AND PETROCHEMICALS LTD. V/S DCIT, 116 ITD 372 . 9 . THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. HE WAS OF THE VIEW THAT THE AMOUNT RECEIVED BY THE ASSESSEE TOWARDS SHARE WARRANT WAS IN THE COURSE OF ITS BUSINESS, THEREFORE, IS IN THE NATURE OF UNSECURED LOANS. THUS, RELYING UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN SOLID CONTAINER LTD. V/S DCIT, 178 TASMANN 192, T HE ASSESSING OFFICER HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE ON ACCOUNT OF FORFEITURE OF SHARE WARRANT IS A REVENUE RECEIPT AND ACCORDINGLY ADDED BACK THE AMOUNT OF ` 2,09,82,015 TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED OF THE 9 M/S. PROVOGUE INDIA LTD. ADDITION MADE , ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 10 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND APPLYING THE RATIO OF THE DECISIONS CITED BEFORE HIM HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE TOWARDS SHARE WARRANT BEING NOT IN THE REGULAR COURSE OF BUSINESS CA NNOT BE HELD AS A TRADING RECEIPT, HENCE, IS NOT REVENUE IN NATURE. ACCORDINGLY, HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 11 . LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE REASONING OF THE ASSESSING OFFICER. 12 . LEARNED AUTHORISED REPRESENTATIVE STRONGLY SUPPORTED THE FINDING OF THE LEARNED COMMISSIONER (APPEALS). 13 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS RELIED UPON. AS FAR AS THE FACTUAL ASPECT OF THE ISSUE IS CONCERNED, THERE IS NO DISPUTE THAT THE ASS ESSEE HAS ISSUED SHARE WARRANT AGAINST SHARE APPLICATION MONEY RECEIVED FROM VARIOUS PERSONS / ENTITIES. NOTABLY, THE SHARE WARRANTS WERE ISSUED AT A PREMIUM OF ` 440 PER SHARE IN ACCORDANCE WITH SEBI GUILD LINES AND EACH WARRANT ENTITLED TH E HOLDER T O EXERCISE AN OPTION TO SUBSCRIBE TO ONE EQUITY SHARE AT A PRICE 10 M/S. PROVOGUE INDIA LTD. OF ` 450 PER SHARE. IN THE IMPUGNED FINANCIAL YEAR THE APPLICANTS EXERCISED THEIR RIGHTS TO CONVERT THE EQUITY SHARES IN RESPECT OF 4,33,733 WARRANTS , WHEREAS , THE BALANCE WARRANT TOTALLING TO 4,66,267 WERE FORFEITED. THUS, AN AMOUNT OF ` 2.09 CRORE REPRESENTING SUCH FORFEITED WARRANTS WERE CREDITED TO THE CAPITAL RESERVE ACCOUNT BY THE ASSESSEE. IT IS A FACT ON RECORD THAT ISSUANCE OF SHARES AR E NOT THE BUSINESS OF THE ASSESSEE, THEREFORE, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED TOWARDS SHARE WARRANT IS IN REGULAR COURSE OF ASSESSEES BUSINESS. FURTHER, THE ASSESSEE HAS NOT CREDITED THE AMOUNT RECEIVED FOR FORFEITURE OF SHARE WARRANT TO ITS P ROFIT & LOSS ACCOUNT. AS PER THE RATIO LAID DOWN IN THE DECISIONS RELIED UPON BY THE LEARNED COMMISSIONER (APPEALS), THE NATURE OF RECEIPT ON ACCOUNT OF FORFEITURE OF SHARE WARRANT HAS BEEN HELD TO BE CAPITAL. IN FACT, IN A RECE N T DECISION THE TRIBUNAL, MU MBAI BENCH, IN CASE OF DCIT V/S JAYANT AGRO ORGANICS LTD., ITA NO.5056/MUM./2014 DATED 24 TH FEBRUARY 2016, AFTER FOLLOWING THE DECISIONS OF ASIATIC OXYGEN LTD. (SUPRA) AND BRIJLAXMI LEASING AND FINANCING LTD. (SUPRA) HELD THAT THE RECEIPT FROM FORFEITURE OF SHARE WARRANT IS CAPITAL IN NATURE. EVEN , OTHERWISE ALSO, THE ADDITION CANNOT BE SUSTAINE D FOR ANOTHER REASON . A S RIGHTLY HELD BY THE LEARNED COMMISSIONER (APPEALS) THE ADDITION MADE ON ACCOUNT OF FORFEITURE OF SHARE WARRANT WAS NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. RATHER , ALL INFORMATION RELATING TO 11 M/S. PROVOGUE INDIA LTD. FORF EITURE OF SHARE WARRANT AND CREDIT TO CAPITAL RESERVE ACCOUNT WAS REFLECTED IN AUDITED ACCOUNT AS WELL AS NOTE S TO THE ACCOUNTS FILED ALONG WITH RETURN OF INCOME WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT COMPLETED UNDE R SECTION 143(3) OF THE ACT. THEREFORE, ON THE DATE OF SEARCH, THERE BEING NO ABATED ASSESSMENT THE ASSESSING OFFICER COULD NOT HAVE MADE ADDITION IN A PROCEEDINGS UNDER SECTION 153A IN RESPECT OF AN ISSUE WHICH HAS NO NEXUS WITH ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH. FOR THIS REASON ALSO ADDITION MADE CANNOT BE SUSTAINED AND THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) DESERVES TO BE UPHELD. INASMUCH A S NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED DEPARTMENTAL REPRESENTAT IVE TO DISPUTE THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) . THEREFORE, APPLYING THE RATIO LAID DOWN IN THE DECISIONS REFERRED TO ABOVE, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED. 14 . IN THE RESULT, REVENUE S APPEAL IS DISMISSED. ITA NO. 1584 /MUM./2015 ASSESSEES APPEAL FOR A.Y. 2009 10 15 . GROUND NO.1, IS NOT PRESSED, HENCE, DISMISSED. 16 . IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION MADE ON ACCOUNT OF ALLEGED BOGUS PURCHASE. 12 M/S. PROVOGUE INDIA LTD. 17 . BRIEF FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT AS PER THE REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT, THE INFORMATION OBTAINED FROM SALES TAX DEPARTMENT REVEAL ED THAT THE PURCHASES MADE BY THE ASSESSEE FROM CERTAIN PERSONS AR E NOT GENUINE AS THE CONCERNED PERSONS ARE ONLY PROVIDING ACCOMMODATION BILLS. HE FURTHER FOUND THAT IN THE COURSE OF SEARCH, THE ASSESSEE ACCEPTED A PART OF THE PURCHASES TO BE BOGUS AND TO COVER UP SUCH BOGUS PURCHASE HAD OFFERED INCOME OF ` 30,06,34,643 , IN THE ASSESSMENT YEAR 2012 13. HOWEVER, IN RESPECT OF SOME OTHER PURCHASES ASSESSEE DID NOT ACCEPT THEM TO BE BOGUS. THE ASSESSING OFFICER, THEREFORE, CALLED UPON THE ASSESSEE TO PROVE THE PURCHASES BY PRODUCING DOCUMENTARY EVIDENCE. THOUGH, THE ASSESSE E CLAIMING THE PURCHASES TO BE GENUINE PRODUC ED SOME SUPPORTING EVIDENCE, HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED AND HELD THAT NEITHER THE PURCHASES MADE BY THE ASSESSEE NOR SALES EFFECTED OUT OF THOSE PURCHASES ARE GENUINE. THOUGH, TO PROVE THE GENUINENESS OF THE PURCHASES THE ASSESSEE PRODUCED STOCK REGISTER , PAYMENT DETAILS, QUANTITATIVE DETAILS OF SALES, HOWEVER, THE ASSESSING OFFICER DID NOT FIND THE SUBMISSIONS OF THE ASSESSEE CONVINCING. HE WAS OF THE VIEW THAT THOUGH THE ASSESSEE MIGHT HAV E BEEN ABLE TO ESTABLISH THE AVAILABILITY OF GOODS AND CORRESPONDING SALES , BUT , POSSIBLY PURCHASES WERE NOT MADE FROM THE CONCERNED PARTIES BUT WERE FROM OTHER 13 M/S. PROVOGUE INDIA LTD. SOURCES ON PAYMENT OF CASH. ACCORDINGLY, HE ADDED BACK THE AMOUNT OF ` 12,57,708 TO THE INCOME OF THE ASSESSEE. 18 . THE LEARNED COMMISSIONER (APPEALS) ALSO CONFIRMED THE ADDITION. 19 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF BOGUS PURCHASE W AS BASICALLY ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT AND ALSO FOR THE REASON THAT THE ASSESSEE WAS UNABLE TO PRODUCE CONCERNED PARTIES BEFORE THE ASSESSING OFFICER. HOWEVER, IT IS A FACT ON RECORD THAT IN THE CO URSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED PURCHASE INVOICE, CHALLAN, STOCK REGISTER, PAYMENT DETAILS AND CORRESPONDING SALES EFFECTED FROM THE PURCHASES MADE . T HE ASSESSEE HAS ALSO FURNISHED EVIDENCE TO INDICATE THAT EXPORT SALES HAVE ALSO BEEN MADE OUT OF SUCH PURCHASES. THOUGH, THE ASSESSING OFFICER HAS REFUSED TO ACCEPT THE PURCHASES TO BE GENUINE, HOWEVER, HE HAS NOT DISPUTED THE SALE S MADE BY THE ASSESSEE. HE HAS OBSERVED, THE ASSESSEE MIGHT HAVE PURCHASED SUCH GOODS FROM OTHER SOURCE ON PAYMENT OF CASH. THUS, AS COULD BE SEEN, THE DISPUTE IS ONLY WITH REGARD TO SOURCE OF PURCHASE MADE BY THE ASSESSEE. THUS, THE FACTS ON RECORD INDICATE THAT , THOUGH THE ASSESSEE HAS MADE THE PURCHASES, HOWEVER, HE HAS FAILED TO PROVE THE EXACT SOURCE FR OM 14 M/S. PROVOGUE INDIA LTD. WHICH SUCH PURCHASES WERE MADE. IN THE CIRCUMSTANCES, ADDITION OF THE ENTIRE PURCHASES WOULD NOT BE PROPER CONSIDERING THE FACT THAT THE ASSESSEE MIGHT HAVE MADE SUCH PURCHASES BY PAYING CASH THEREBY AVOIDING PAYMENT OF VAT. THEREFORE, FOR TAKING CARE O F LEAKAGE OF REVENUE ON THAT ACCOUNT , IT WILL BE REASONABLE TO ESTIMATE THE PROFIT ON BOGUS PURCHASE AT 12.5%. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE @ 12.5% OF THE BOGUS PURCHASE. THIS GROUND IS PARTLY ALLOWED. 20 . THE ONLY OTHER SURVIVING ISSUE AS RAISED IN GROUND NO.4, RELATES TO DISALLOWANCE OF ` 94,09,045, MADE UNDER SECTION 14A R/W RULE 8D. 21 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS EARNED EXEMPT IN COME OF ` 5,94,70,673, WHEREAS, IT HAS DISALLOWED AMOUNT OF ` 10 LAKH TOWARDS EXPENDITURE INCURRED FOR EARNING EXEMPT INCOME , WAS OF THE VIEW THAT THE DISALLOWANCE MADE BY THE ASSESSEE WAS NOT CORRECT. ACCORDINGLY, HE CALLED UPON THE ASSESSEE TO EXPLAIN WHY DISALLOWANCE OF EXPENDITURE ATTRIBUTABLE TO EXEMPT INCOME SHOULD NOT BE MADE IN TERMS OF RULE 8D. THOUGH, THE ASSESSEE JUSTIFIED THE DISALLOWANCE MADE BY IT, HOWEVER, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEES CLAIM WAS NOT ACCEPTED IN THE ORIG INAL ASSESSMENT COMPLETED UNDER 15 M/S. PROVOGUE INDIA LTD. SECTION 143(3) OF THE ACT MADE A DISALLOWANCE OF ` 94,09,045, AS WAS MADE IN THE ORIGINAL ASSESSMENT. 22 . THOUGH, THE ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIONER (APP EALS) NOTICING THAT THE DISALLOWANCE UNDER SECTION 14A WAS A REPETITION OF DISALLOWANCE MADE IN THE ORIGINAL ASSESSMENT DID NOT ACCEPT ASSESSEES CLAIM. 23 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ADDITION HAVING ALREADY BEEN MADE IN THE ORIGINAL ASSESSMENT , CANNOT BE MADE AGAIN IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE ACT. FURTHER, HE SUBMITTED, WHILE DECIDING THE APPEAL ARISING OUT OF THE ORIGINAL ASSESSMENT ORDER, THE TRIBUNAL HAS RESTORED THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HAVING CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, WE ARE UNABLE TO ACCEPT ASSESSEES CONTENTIO N THAT THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE ACT AMOUNTS TO DOUBLE ADDITION. AS PER THE SCHEME OF THE ACT, FOR ANY PARTICULAR ASSESSMENT YEAR, ONLY ONE ASSESSMENT CAN BE MADE. IF I N A PARTICULAR CASE, ASSESSMENT HAS ALREADY BEEN MADE ORIGINALLY, IN THE ASSESSMENT UNDER SECTION 153A OF 16 M/S. PROVOGUE INDIA LTD. THE ACT, THE COMPUTATION WILL START FROM INCOME DETERMINED IN THE ORIGINAL ASSESSMENT. THEREFORE, THE ADDITION / DISALLOWANCE ALREADY MADE IN THE ORIGINAL ASSESSMENT WILL ALSO HAS TO BE INCORPOR ATED IN THE FRESH ASSESSMENT ORDER. THIS DOES NOT MEAN ASSESSING THE SAME INCOME TWICE. IN ANY CASE OF THE MATTER, WHILE DECIDING THE APPEAL ARISING OUT OF THE ORIGINAL ASSESSMENT ORDER, THE TRIBUNAL HAS RESTORED THE ISSUE RELATING TO DISALLOWANCE MADE UND ER SECTION 14A OF THE ACT THE ASSESSING OFFICER FOR FRESH ADJUDICATION. IT IS A FACT ON RECORD THAT THE DISALLOWANCE MADE UNDER SECTION 14A IN THE ORIGINAL ASSESSMENT WAS REPEATED IN THE IMPUGNED ASSESSMENT ORDER WITHOUT ANY CHANGE. THEREFORE, WHATEVER DEC ISION THE ASSESSING OFFICER TA KES WHILE DECIDING THE ISSUE IN PURSUANT TO THE DIRECTION OF THE TRIBUNAL WIL L AUTOMATICALLY APPLY TO THE ISSUE RAISED IN THE PRESENT APPEAL HOWSOEVER , IT SHOULD NOT RESULT IN DOUBLE DISALLOWANCE OF THE SAME EXPENDITURE. THERE FORE, IN TERMS WITH THE DIRECTION OF THE CO ORDINATE BENCH IN ITA NO.2155/MUM./2013 DATED 21 ST JANUARY 2015, WE RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 24 . ALL OTHER GROUNDS RAISED IN THIS APPEAL ARE NOT PRESSED, HENCE, DISMISSED. 17 M/S. PROVOGUE INDIA LTD. 25 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO. 1579 /MUM./2015 REVENUES APPEAL FOR A.Y. 20 1 0 1 1 26 . THE REGISTRY HAS POINTED OUT A DELAY OF TWO DAYS IN FILING THE PRESENT APPEAL. HOWEVER, AS PER THE LETTER DATED 29 TH JULY 2017 OF THE ASSESSING OFFICER, THE DELAY OF 2 DAYS WAS DUE TO WRONG MENTIONING OF DATE OF RECEIPT OF APPEAL ORDER IN FORM NO.36. CONSIDERING THE ABOVE, WE CONDONE THE DELAY OF TWO DAYS. 27 . G ROUND NO.1, IS AGAINST DELETION OF ADDITION MADE ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF/ESIC . 28 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON VERIFYING THE TAX AUDIT REPORT FOUND THAT THE ASSESSEE HAS NOT PAID EMPLOYEES CONTRIBUTION TO P.F. AND ESIC W ITHIN THE DUE DATE PRESCRIBED UNDER EXPLANATION TO SECTION 36(1)(VA) OF THE ACT. ACCORDINGLY, HE DISALLOWED ASSESSEES CLAIM OF DEDUCTION FOR AN AMOUNT OF ` 6,22,416. ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 29 . THE LEARNED COMMISSIONER (APPEALS) HAVING FOUND THAT THE ASSESSEE HAS PAID EMPLOYEES CONTRIBUTION TO PF/ESIC BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, ALLOWED THE DEDUCTION CLAIMED AFTER FOLLOWING THE DECISION OF THE 18 M/S. PROVOGUE INDIA LTD. HON'BLE J URISDICTIONAL HIGH COURT IN CIT V/S HINDUSTAN ORGANIC CHEMICALS LTD., 366 ITR 001 (BOM.). 30 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PAID EMPLOYEES CONTRIBUTION TO PF/ESIC DUES WITHIN THE DUE DATE OF RETURN OF INCOME AS PROVIDED UNDER SECTION 139(1) OF THE ACT. THAT BEING THE CASE, THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN HINDUSTAN ORGANIC CHEMICALS LTD. (SUPRA) SQUARELY APPLIES TO THE FACT OF THE PRESENT CASE. ACCORDINGLY, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED. 31 . IN GROUND NO.2, THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION MADE ON ACCOUNT OF AMOUNT RECEIVED ON FORFEITURE OF SHARE WARRANT. 32 . THIS I SSUE IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO.1 OF ITA NO.1578/MUM./2015. FO LLOWING OUR DECISION IN PARA 13 OF THIS ORDER, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 33 . IN THE RESULT, REV ENUES APPEAL IS DISMISSED. ITA NO. 1585 /MUM./2015 ASSESSEES APPEAL FOR A.Y. 20 1 0 1 1 19 M/S. PROVOGUE INDIA LTD. 34 . GROUNDS NO.2 AND 4 ARE THE ONLY EFFECTIVE GROUND IN THIS APPEAL. 35 . IN GROUND N A .2, ASSESSEE HAS CHALLENGED THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE AMOUNTING TO ` 45,14,803. 36 . IDENTICAL ISSUE WAS RAISED BY THE ASSESSEE IN ITA NO.1584/MUM./2015, DEALT IN EARLIER PART OF THE ORDER. FACTS BEING IDENTICAL, FO LLOWING OUR DECISION IN PARA 19 OF THIS ORDER, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 1 2.5% OF THE BOGUS PURCHASE. THIS GROUND IS PARTLY ALLOWED. 37 . IN GROUND NO.4, THE ASSESSEE HAS CHALLENGED DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D. 38 . THIS GROUND IS SIMILAR TO GROUND NO.4 IN ITA NO.1584/MUM./2015, DEALT IN EARLIER PART OF THE ORDER. F ACTS BEING IDENTICAL, FOLLOWING OUR DECISION IN PARA 23 OF THIS ORDER, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 39 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO. 1580 /MUM./2015 REVENUES APPEAL FOR A.Y. 2011 12 40 . THE REGISTRY HAS POINTED OUT A DELAY OF TWO DAYS IN FILING THE PRESENT APPEAL. HOWEVER, AS PER THE LETTER DATED 29 TH JULY 2017 OF THE 20 M/S. PROVOGUE INDIA LTD. ASSESSING OFFICER, THE DELAY OF 2 DAYS WAS DUE TO WRONG MENTIONING OF DATE OF RECEIPT OF APPEAL ORDER IN FORM NO.36. CONSIDERING THE ABOVE, WE CONDONE THE DELAY OF TWO DAYS. 41 . IN GROUND NO.1, REVENUE HAS CHALLENGED DELETION OF ADDITION MADE ON ACCOUNT OF D ELAYED PAYMENT OF EMPLOYEES CONTRIBUTION OF P.F / ESIC. 42 . THIS ISSUE IS SIMILAR TO THE ISSUE RAISED BY THE DEPARTMENT IN ITA NO.1579/MUM./2015, DEALT IN THE EARLIER PART OF THE ORDER. FO LLOWING OUR DECISION IN PARA 29 OF THE ORDER, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). GROUND RAISED IS DISMISSED. 43 . IN GROUND NO.2, THE REVENUE HAS CHALLENGED THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80I C OF THE ACT. 44 . BRIEF FACTS ARE, AS STATED EARLIER, THE ASSESSEE IS ENGAGED IN MANUFACTURING OF GARMENTS AND ACCESSORIES. FOR THE PURPOSE OF ITS MANUFACTURING ACTIVITY IT HAS SET UP TWO UNITS , ONE AT DAMAN AND OTHER AT BADDI IN HIMACHAL PRADESH. BESIDES, T HE MANUFACTURING UNIT S , THE ASSESSEE HA S SEVERAL DISTRIBUTION CENTRE S LOCATED AT DIFFERENT PLACES IN INDIA INCLUDING DAMAN AND BADDI. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT IN THE COMPUTATION OF 21 M/S. PROVOGUE INDIA LTD. INCOME, THE ASSESSEE HA S C LAIMED DEDUCTION UNDER SECTION 80IB OF THE ACT IN RESPECT OF DAMAN UNIT AND SECTION 80IC IN RESPECT OF BADDI UNIT. HE FURTHER FOUND THAT IN THE COURSE OF A SURVEY CONDUCTED UNDER SECTION 133A OF THE ACT AT BADDI A STATEMENT W A S RECORDED FROM ONE RAJESH BAHADUR SINGH, PRODUCTION MANAGER OF THE COMPANY , WHEREIN , HE ALLEGEDLY STATED THAT READYMADE GARMENTS WERE TRANSFERRED FROM DAMAN UNIT TO BADDI UNIT. THE ASSESSING OFFICER, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN WHETHER WHILE CLAIMING DEDUCTION UN DER SECTION 80IB / 80IC, THE CONDITIONS MENTIONED THEREIN HAVE BEEN FULFILLED. THOUGH, THE ASSESSEE EXPLAINED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE ARE AFTER FULFILLING THE CONDITIONS OF SECTION 80IB / 80IC OF THE ACT , THE ASSESSING OFFICER WAS NOT CO NVINCED WITH THE SAME AND RAISED DOUBTS WITH REGARD TO THE DEDUCTION CLAIMED UNDER SECTION 80IC OF THE ACT IN RESPECT OF BADDI UNIT. HE OBSERVED, THE PRODUCTION MANAGER OF BADDI UNIT DURING THE SURVEY HAS STATED THAT READYMADE GARMENTS WERE TRANSFERRED FRO M DAMAN TO BADDI UNIT, THEREFORE, ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IC IN RESPECT OF BADDI UNIT IS NOT ALLOWABLE AS NO MANUFACTURING ACTIVITY WAS CARRIED OUT. IN RESPONSE TO THE SHOW CAUSE NOTICE , THOUGH , THE ASSESSEE STATED THAT THE CLAIM OF D EDUCTION UNDER SECTION 80IC FOR BADDI UNIT WAS IN ORDER AND THERE WAS NO TRANSFER OF READYMADE GARMENT FROM DAMAN TO BADDI UNIT , BUT , THE READYMADE GARMENTS WERE RECEIVED AT DISTRIBUTION 22 M/S. PROVOGUE INDIA LTD. CENTRE AT BADDI ON STOCK TRANSFER SCHEME AGAINST F FORM, HOWEVER, T HE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IC ON THE REASONING THAT NO MANUFACTURING ACTIVITY WAS CARRIED ON AT BADDI UNIT AND THE GOODS SOLD FROM BADDI UNIT WERE ACTUALLY RECEIVED FROM DAMAN UNIT. THE ASSESSEE CHALLENGED THE DECISION BEFORE THE LEARNED COMMISSIONER (APPEALS). 45 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL AVAILABLE ON RECOR D HAVING FOUND THAT THE ASSESSEE HAD ACTUALLY CARRIED OUT THE MANUFACTURING ACTIVITY IN BADDI UNIT IN RESPECT OF WHICH DEDUCTION UNDER SECTION 80IC OF THE ACT WAS CLAIMED, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 46 . LEARNED DEPARTMENTAL REPRES ENTATIVE RELYING UPON THE OBSERVATIONS MADE BY THE ASSESSING OFFICER SUBMITTED, THE CLAIM OF THE ASSESSEE THAT THEY HAVE NOT CLAIMED ANY DEDUCTION UNDER SECTION 80IC IN RESPECT OF STOCK TRANSFER FROM THE DAMAN UNIT REQUIRES VERIFICATION. 47 . LEARNED AUTHORISED REPRESENTATIVE RELYING UPON THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) SUBMITTED, THE ASSESSEE HAS FACTUALLY PROVED THAT NO DEDUCTION UNDER SECTION 80IC WAS CLAIMED ON THE STOCK TRANSFER FROM DAMAN UNIT. ON THE CONTRARY, THE BADDI UNIT 23 M/S. PROVOGUE INDIA LTD. W AS CARRIED ON MANUFACTURING ACTIVITY AND THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IC IS IN RESPECT OF THE GOODS MANUFACTURING AT BADDI UNIT. HE FURTHER SUBMITTED, SIMPLY RELYING UPON THE STATEMENT RECORDED FROM THE PRODUCTION MANAGER DURING TH E SURVEY UNDER SECTION 133A OF THE ACT WHICH HAS NO EVIDENTIARY VALUE, THE DEDUCTION CLAIMED BY THE ASSESSEE CANNOT BE DISALLOWED. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S S. KHADER KHAN SONS, [2013] 352 ITR 480 (BOM.). 48 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A READING OF THE IMPUGNED ASSESSMENT ORDER, IT BECOMES CLEAR THAT THE ASSESSING OFFICER HAS DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER S ECTION 80IC OF THE ACT IN RESPECT OF BADDI UNIT BY RELYING UPON THE STATEMENT RECORDED DURING SURVEY UNDER SECTION 133A FROM ONE RAJESH BAHADUR SINGH STATED TO BE THE PRODUCTION MANAGER OF THE COMPANY. ON A READING OF THE RELEVANT EXTRACT FROM THE STATEME NT OF RAJESH BAHADUR SINGH, WHICH IS REPRODUCED IN PARA 53 FO THE ASSESSMENT ORDER IT IS EVIDENT THAT HE HAS SIMPLY STATED THAT IN THE RELEVANT PREVIOUS YEAR BADDI HAS RECEIVED 92,389 PIECES OF READYMADE GARMENT FROM DAMAN AND OTHER ENTERPRISES. WHEN THE A FORESAID STATEMENT WAS CONFRONTED TO THE ASSESSEE IT WAS STATED BEFO RE THE ASSESSING OFFICER THAT IN ADDITION TO 24 M/S. PROVOGUE INDIA LTD. THE MANUFACTURING UNIT AT BADDI THERE WAS ALSO A DISTRIBUTION CENTRE. IT WAS SUBMITTED, READYMADE GARMENTS ARE GENERALLY RECEIVED AT THE DISTRI BUTION CENTRE AT BADDI. HOWEVER, AS FAR AS THE MANUFACTURING UNIT AT BADDI IS CONCERNED, IT RECEIVES RAW MATERIAL FROM DAMAN UNIT SUCH AS FABRICS, ACCESSORIES, ETC. AND MANUFACTURES READYMADE GARMENTS. THE ASSESSEE HAS SPECIFICALLY STATED THAT THE MOVEMENT OF READYMADE GARMENTS FROM DAMAN UNIT TO OTHER DISTRIBUTION CENTRE S ARE AGAINST F FORM UNDER STOCK TRANSFER SCHEME AND AGAINST WHICH NO DEDUCTION UNDER SECTION 80IC HAS BEEN CLAIMED. AS IT APPEARS, THE ASSESSING OFFICER HAS NOT FACTUALLY EXAMINED THE AF ORESAID CLAIM OF THE ASSESSEE , THOUGH , RELEVANT DETAILS WERE FURNISHED. HOWEVER, THE LEARNED COMMISSIONER (APPEALS) AFTER EXAMINING THE FACTS A N D MATERIAL ON RECORD HAS FOUND THAT READYMADE GARMENTS WERE SENT TO AND RECEIVED AT DISTRIBUTION CENTRE AT BADDI UNDER STOCK TRANSFER SCHEME AND AGAINST F FORM. HOWEVER, FABRICS WERE RECEIVED AT THE MANUFACTURING UNIT AT BADDI WITHOUT F FORM AS EVIDENCED FROM THE FABRIC RECEIPT NOTE. HE HAS ALSO FOUND THAT READYMADE GARMENTS RECEIVED AT BADDI DISTRIBUTION CENTRE ARE AGAINST F FORM AND CLEARLY MENTIONED IN THE DELIVERY CHALLAN AS FOUND FROM THE STOCK TRANSFER NOTE. IT IS ALSO NOTICED THAT THE LEARNED COMMISSIONER (APPEALS) HAS EXAMINED IN DETAIL THE FACTS RELATING TO STOCK TRANSFER OF ` 7,86,46,337 AND FOUND THAT IT RELATE S TO STOCK TRANSFE R R ED FROM VARIOUS UNITS AND NOT ONLY FROM DAMAN UNIT AS 25 M/S. PROVOGUE INDIA LTD. CAN BE SEEN FROM STATEWISE DETAILS OF STOCK TRANSFER. HE ALSO FOUND THAT THE STOCK TRANSFER IS MADE AGAINST FORM F AS REQUIRED BY THE SALES TAX DEPARTMENT WHICH WERE DISCLOSED TO THE SALES TAX DEPARTMENT. FROM THE INVENTORY DETAILS OF BADDI UNIT SUBMITTED BEFORE HIM, THE LEARNED COMMISSIONER (APPEALS) FOUND THAT DEDUCTION UNDER SECTION 8IC WAS CLAIMED O N THE GARMENT S PRODUCED IN THE SAID UNIT AND NOT ON GARM ENT S RECEIVED IN DISTRIBUTION CENTRE. ON EXAMINING THE DETAILS, THE LEARNED COMMISSIONER (APPEALS) HAS ALSO FOUND THAT READYMADE GARMENT S SENT FROM DAMAN UNIT TO BADDI DISTRIBUTION CENTRE AGAINST FORM F AMOUNTS TO ` 41,37,469. FURTHER, ON GOING THROUGH T HE STATEMENT RECORDED FROM RAJESH BAHADUR SINGH, IN THE COURSE OF SURVEY THE LEARNED COMMISSIONER (APPEALS) OBSERVED THAT ONLY ON THE BASIS OF SUCH STATEMENT TAKEN IN COURSE OF SURVEY AND WITHOUT ANY OTHER COGENT EVIDENCE TO SUGGEST THAT THE DEDUCTION CLAI MED UNDER SECTION 80IC OF THE ACT RELATES TO THE READYMADE GARMENT S TRANSFERRED FROM DAMAN UNIT ASSESSEES CLAIM CANNOT BE DENIED. IT IS FURTHER RELEVANT TO NOTE , THE LEARNED COMMISSIONER (APPEALS) ALSO OBSERVED THAT THE DELIVERY CHALLAN IMPOUNDED IN THE C OURSE OF SURVEY EVIDENCING TRANSFER OF READYMADE G AR MENT FROM DAMAN UNIT TO BADDI UNIT WAS RECONCILED THROUGH THE INWARD REGISTER TO DEMONSTRATE THAT CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT WAS NOT IN RESPECT OF READYMADE GARMENTS FROM DAMAN UNIT. THUS, 26 M/S. PROVOGUE INDIA LTD. FROM THE OBSERVATIONS MADE BY THE LEARNED COMMISSIONER (APPEALS) IT IS NOTICED THAT THROUGH EVIDENCE BROUGHT ON RECORD, THE ASSESSEE WAS ABLE TO DEMONSTRATE THAT THE DEDUCTION CLAIMED UNDER SECTION 80IC WAS IN RESPECT OF READYMADE GARMENT S MANUFACTU R ED AT BADDI UNIT AND NOT ON STOCK TRANSFER FROM DAMAN UNIT. THE AFORESAID FACTUAL FINDING OF THE FIRST APPELLATE AUTHORITY HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BY BRINGING BEFORE US ANY COGENT EVIDENCE. THEREFORE, WE ARE UN ABLE TO DISTURB THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. MOREOVER, IN THE COURSE OF HEARING IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED AUTHORISED REPRESENTATIVE THAT ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IC HAS BEEN ALLOWED IN SCRUTINY ASSESSMENT MADE UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2013 14. THE AFORESAID FACT ALSO GIVE S CREDENCE TO THE GENUINENESS OF ASSESSEES CLAIM. IN VIEW OF THE AFORESAID, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) . RE SULTANTLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 49 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO. 1586/ MUM./2015 ASSESSEES APPEAL FOR A.Y. 201 1 1 2 50 . IN THIS APPEAL, GROUNDS NO.2 AND 4 ARE THE ONLY EFFECTIVE GROUNDS. 27 M/S. PROVOGUE INDIA LTD. 51 . GROUND NO.2 RELATES TO THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE. 52 . IDENTICAL ISSUE RAISED BY THE ASSESSEE IN ITA NO.1584/MUM./ 2015, WAS DEALT BY US IN THE EARLIER PART OF THE ORDER. FO LLOWING OUR DECISION IN PARA 19 OF THIS ORDER, WE DIRECT THE ASSESSING OFFICER TO DISAL LOW 12.5% OUT OF ALLEGED BOGUS PURCHASE. THIS GROUND IS PARTLY ALLOWED. 53 . IN GROUND NO.4, ASSESSEE HAS CHALLENGED DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D. 54 . THIS GROUND IS SIMILAR TO GROUND NO.4, OF ITA NO.1584/MUM./2015 DEALT IN EARLIER PART OF THE ORDER. F OLLOWING OUR DECISION IN PARA 23 , WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 55 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED . ITA NO. 1581 /MUM./2015 REVENUES APPEAL FOR A.Y. 201 2 1 3 56 . THE REGISTRY HAS POINTED OUT A DELAY OF TWO DAYS IN FILING THE PRESENT APPEAL. HOWEVER, AS PER THE LETTER DATED 29 TH JULY 2017 OF THE ASSESSING OFFICER, THE DELAY OF 2 DAYS WAS DUE TO WRONG MENTIONING OF 28 M/S. PROVOGUE INDIA LTD. DATE OF RECEIPT OF APPEAL ORDER IN FORM NO.36. CONSIDERING THE ABOVE, WE CONDONE THE DELAY OF TWO DAYS. 57 . IN GROUND NO.1, REVENUE HAS CHALLENGED DELETION OF ADDITION MADE ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO P.F. / ESIC. 58 . THIS ISSUE IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO.1 OF ITA NO.1579/MUM./2014. F OLLOWING OUR DECISION IN PARA 29 OF THIS ORDER, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) AND DISMISS THE GROUND. 59 . IN GROUND NO.2, REVENUE HAS CHALLENGED THE DECISI ON OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT. 60 . THIS ISSUE IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO.2 IN ITA NO.1580/MUM./2015. FOLLOWING OUR DECISION IN PARA 45 OF THIS ORDER, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED. 61 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO. 1587 /MUM./2015 ASSESSEES APPEAL FOR A.Y. 2012 13 29 M/S. PROVOGUE INDIA LTD. 62 . THE ONLY ISSUE RAISED IN THIS APPEAL RELATES TO DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D. FOLLOWING OUR DECISION IN PARA 23 OF THIS ORDER, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 63 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 64 . TO SUM UP, REVENUES APPEAL IN ITA NO. 1545/MUM./2015 IS DISMISSED, REVENUES APPEAL IN ITA NO.1587/MUM./2015 IS DISMISSED; ASSESSEES APPEAL IN ITA NO.1584/MUM./2015 IS PARTLY ALLOWED; REVENUE S APPEAL IN ITA NO.1579/MUM./2015 IS DISMISSED; ASSESSEES APPEAL IN ITA NO.1585/MUM./2015 IS PARTLY ALLOWED; REVENUES APPEAL IN ITA NO.1580/MUM./2015 IS DISMISSED; ASSESSEES APPEAL IN ITA NO.1586/MUM./2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES; R EVENUES APPEAL IN ITA NO.1581/MUM./2015 IS DISMISSED AND ASSESSEES APPEAL IN ITA NO.1587/MUM./2015 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10.11.2017 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 10.11.2017 30 M/S. PROVOGUE INDIA LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI .