M/s Dimple Exports, Ludhiana V. DCIT, Ludhiana

ITA 159/CHANDI/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8520 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: SSH GAGANDEEP SINGH S K MUKHI
• Keywords: Business income; Depreciation; Opportunity of being heard; Additional evidence; Condonation of delay; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 159/CHD/2014 ASSESSMENT YEAR: 2005-06 M/S DIMPLE EXPORTS, VS. THE DCIT, CIRCLE IV, LUDHIANA LUDHIANA PAN NO. AACFD1837E (APPELLANT) (RESPONDENT) APPELLANT BY : S/SH.GAGANDEEP SINGH, S.K. MUKHI RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 12.01.2016 DATE OF PRONOUNCEMENT : 11.02.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- II, LUDHIANA DATED 13.11.2013 RELATING TO ASSESSMEN T YEAR 2005-06. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE ORDER OF LD. CIT (A) BEING BASED ON NON APPRECIATION OF PROPER FACTS AND CIRCUMSTANCES OF T HE CASE AND WITHOUT GRANTING SUFFICIENT OPPORTUNITY OF HEARING AND WITHOUT ALLOWING TO PLACE ON RECORD ADDITIONAL EVIDENCES BE ING RELEVANT TO THE DISPUTE IS BAD IN LAW AND UNCALLED FOR. 2 2. (A) THAT LD. CIT (A) IS NOT JUSTIFIED IN C ONFIRMING ADDITION OF RS 7,70,013/- ON ACCOUNT OF ALLEGED SUPPRESSION OF SALES OF CLOTH WITHOUT APPRECIATING THE CORRECT FACTS AND BY NOT ALLOWING TO PLACE ON RECORD ADDITIONAL EVIDENCES BEING RELEV ANT TO THE DISPUTE IS BAD IN LAW AND UNCALLED FOR. 2. (B) THAT WITHOUT PREJUDICE TO ABOVE, THE A PPELLANT DISPUTES THE QUANTUM OF ADDITION AS HIGHLY EXCESSIVE. 3. (A) THAT LD. CIT (A) IS NOT JUSTIFIED IN CONF IRMING THE ADDITION OF RS 77,658/- BEING THE AMOUNT PAYABLE TO THE EX- PARTNERS OF THE FIRM WITHOUT APPRECIATING THE CORRE CT FACTS OF THE PRESENT CASE, HENCE THE FINDINGS OF AUTHORITIES BEL OW ARE BAD IN LAW AND UNCALLED FOR. 3. (B) THAT WITHOUT PREJUDICE TO ABOVE, THE AP PELLANT DISPUTES THE QUANTUM OF ADDITION AS HIGHLY EXCESSIVE. 4. THAT LD. CIT (A) IS NOT JUSTIFIED IN CONFIR MING ADDITION ON ACCOUNT OF REMISSION OF LIABILITIES SHOWN IN THE BA LANCE SHEET TO THE EXTENT OF RS. 1,50,600/- WITHOUT APPRECIATING T HE CORRECT FACTS, HENCE THE FINDINGS OF AUTHORITIES BELOW ARE BAD IN LAW AND UNCALLED FOR. 5. (A) THAT LD. CIT (A) IS NOT JUSTIFIED IN C ONFIRMING THE DISALLOWANCE OF ADJUSTMENT OF CARRY FORWARD UNABSO RBED DEPRECIATION AT RS 3,46,659/- WITHOUT APPRECIATING THE CORRECT FACTS AND THUS THE IMPUGNED ORDER IS BAD IN LAW AND UNCALLED FOR. 5. (B) THAT WITHOUT PREJUDICE TO ABOVE, THE A PPELLANT DISPUTE.' QUANTUM OF ADDITION AS HIGHLY EXCESSIVE. 3. IT IS OBSERVED THAT THERE IS A DELAY OF 23 DAYS IN FILING THE APPEAL. THE ASSESSEE HAS SUBMITTED AN APPLICATION TOGETHER WITH AN AFFIDAVIT FOR CONDONATION OF DELAY IN FILING THE APPEAL. IT IS STATED THAT TH E ASSESSEE HAD DELIVERED THE IMPUGNED ORDER AND RELEVANT DOCUMENTS TO ITS COUNSE LS OFFICE AT CHANDIGARH ON 3 10.1.2014 FOR FILING OF THE APPEAL BEFORE THE TRIBU NAL. HOWEVER, THE OFFICE CLERK OF THE COUNSEL INADVERTENTLY KEPT THE APPEAL DOCUME NTS IN THE HIGH COURT FILE OF THE ASSESSEE FOR THE SAME YEAR WHICH CASE WAS ADMIT TED BY HONBLE PUNJAB & HARYANA HIGH COURT THOUGH ON DIFFERENT ISSUE OF LAB OUR EXPENSES. IT IS ALSO STATED THAT WHEN THE ASSESSEE CONTACTED THE COUNSEL ON 9.2.2014 TO FIND OUT THE PREPARATION / FILING OF THE APPEAL, THE RELEVANT DO CUMENTS WERE TRACED FROM THE HIGH COURT FILE REFERRED TO ABOVE BY THE COUNSELS OFFICE AND THE APPEAL WAS DRAFTED AND AFTER COMPLETION OF VARIOUS FORMALITIES , THE APPEAL WAS FILED ON 13.2.2004. IT IS ALSO STATED THAT THERE WAS NO INTE NTION ON THE PART OF THE ASSESSEE TO FILE THE APPEAL LATE. WE MAY OBSERVE HERE THAT T HERE IS NO MATERIAL ON RECORD TO CONTROVERT THE ABOVE CONTENTION OF THE ASSESSEE. AT THE SAME TIME, IT IS WELL SETTLED THAT JURISDICTION TO CONDONE DELAY SHOULD B E EXERCISED LIBERALLY. THE MATTER RELATING TO CONDONATION OF DELAY SHOULD BE J UDGED BROADLY AND NOT IN A PEDANTIC MANNER. WE ARE FULLY SATISFIED THAT THE EX PLANATION FOR THE DELAY IS SATISFACTORY AND, THEREFORE, WE CONDONE THE DELAY I N FILING THE APPEAL. 4. AS REGARDS GROUND NOS. 1 & 2 OF THE APPEAL , THE RELEVANT FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF HOSIERY GOODS AND ALSO TRADING OF HOSIERY GOODS AND CARBON STEEL. AS PER P ARA 4 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAD SHOWN OPENING STOCK OF CLOTH AT 4772.553 KGS AND CLOSING STOCK OF CLOTH 8485.823 KGS. THE ASSESSEE CLAIMED THAT DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, IT HAD PURCHASED 27277 KGS OF YARN OUT OF WHICH IT HAD PRO DUCED 23886.8 KGS OF CLOTH. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE HAD SH OWN SALES OF CLOTH AT 15722.50 KGS AS PER LETTER DATED 30.4.2007. THE ASS ESSING OFFICER ACCORDINGLY WORKED OUT THE CLOSING STOCK OF ASSESSEE AT 12936.7 63 KGS AS PER WORKING GIVEN IN PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSING OF FICER OPINED THAT THE DIFFERENCE OF 4450.940 KGS OF CLOTH HAVE BEEN SOLD BY THE ASSESSEE OUTSIDE THE 4 BOOKS OF ACCOUNT. THE ASSESSING OFFICER ACCORDINGLY MADE THE ADDITION OF RS. 7,70,013/- @ RS. 173/- PER KG KEEPING IN VIEW THE ASSESSEES LETTER DATED 30.4.2007 WHEREIN THE ASSESSEE HAD SHOWN SALE OF 1 790.650 KGS OF CLOTH FOR RS. 30,09,960/-. THE ASSESSING OFFICER PROVIDED AN OPPO RTUNITY TO ASSESSEE TO FURNISH ITS EXPLANATION IN THIS REGARD BUT THERE WA S NO RESPONSE FROM THE ASSESSEE. CONSEQUENTLY, THE ASSESSING OFFICER MADE ADDITION OF RS. 7,70,013/- TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE VI DE ITS LETTER DATED 18.12.2012 REQUESTED THE LD. CIT(A) FOR ADMISSION OF ADDITIONA L EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962. THE ASSESSEE SUBMITTED THA T THE FIGURES MENTIONED IN ITS LETTER DATED 30.04.2007 WAS NOT CORRECT FIGURE OF S ALES OF CLOTH, HOWEVER, THE CORRECT FIGURE OF SALES OF CLOTH DURING THE YEAR IS 20223.730 KGS. THE ASSESSEE ALSO PRODUCED CERTAIN PHOTOCOPIES OF THE SALE BILLS AS UNDER;- BILL NO . DATE QTY OF CLOTH SOLD IN KGS 093 27.09.2004 2705.000 KGS 102 8.10.2004 2863.350 KGS 116 28.10.2004 2699.980 KGS 120 5.11.2004 2720.100 KGS 131 26.11.2004 1880.100 KGS 135 29.11.2004 2998.300 KGS 144 11.12.2004 2060.900 KGS 201 22.03.2005 2296.000 KGS TOTAL 23886.730 KGS 6. THE ASSESSEE FURTHER SUBMITTED THAT THE ABOVE SA LES CAN BE VERIFIED FROM THE PARTIES AND ALL THE SALE PROCEEDS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. ACCORDINGLY, IT WAS SUBMITTED BY THE ASSES SEE BEFORE THE CIT(A) THAT 5 THE DIFFERENCE IN CLOSING STOCK CALCULATED BY THE A SSESSING OFFICER WAS BASED ON WRONG FIGURES. ACCORDINGLY, THE ASSESSEE REQUESTED THE CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE IN THE FORM OF SALE BILLS REFER RED TO ABOVE. THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFIC ER AND THE ASSESSING OFFICER VIDE HIS LETTER DATED 18.1.2013 SUBMITTED THAT THE ASSESSEES CASE WAS NOT COVERED BY ANY OF PROVISIONS OF RULE 46A OF THE I.T . RULES, 1962 AND AS SUCH THE ADDITIONAL EVIDENCE SHOULD NOT BE ADMITTED. THE LD. CIT(A) CONFRONTED THE SAID REPORT TO THE ASSESSEE AND AFTER OBTAINING THE ASSESSEES COMMENTS, THE LD. CIT(A) HELD AS UNDER;- 4.6 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S R EQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS AO' S REPORT AND THE APPELLANT'S COUNTER COMMENTS. THE POWER OF CIT(APPEAL) TO ADMIT ADDITIONAL EVIDENCE IS GOVERNE D BY THE PROVISIONS OF RULE 46A OF INCOME TAX RULES, 196 1. AS PER RULE 46A, THE CIT(A) CAN ADMIT ADDITIONAL EVIDE NCE ONLY IN THE FOLLOWING CIRCUMSTANCES:- I) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED II) WHERE THE APPELLANT WAS PREVENTED BY SUFFICI ENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE AO. III) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIE NT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL. IV) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO TH E APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. IN THE APPELLANT'S CASE NONE OF THE CONDITIONS REFE RRED TO IN RULE 46A IS SATISFIED. THE ASSESSING OFFICER DID NO T REFUSE TO ADMIT ANY EVIDENCE. THE NEXT ISSUE TO BE EXAMINE D IS WHETHER APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM 6 PRODUCING THE EVIDENCE. IN THIS REGARD THE APPELLAN T HAS NOT BEEN ABLE TO JUSTIFY AS TO HOW AND WHY THE SALE BIL LS WERE NOT PRODUCED. BY HIM, TO EXPLAIN HIS CONTENT IONS, DURING THE COURSE OF ASSESSMENT PROCEEDING THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY AS TO WHAT P REVENTED HIM FROM PRODUCING THESE EVIDENCES FOR SUCH A LONG TIME. THE ONLY OTHER ISSUES IS WHETHER THE AO HAS MADE TH E ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GR OUND OF APPEAL. FROM THE FACTS ON RECORD IT IS CLEAR THAT A PPELLANT WAS AFFORDED SUFFICIENT OPPORTUNITIES TO PRODUCE EV IDENCE. AS PER THE ASSESSMENT ORDER, SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE APPELLANT TO FILE HIS EXPLANATION B UT THE APPELLANT FAILED TO AVAIL ANY OF THE OPPORTUNITY. T HE APPELLANT DID NOT EVEN REPLY TO THE SPECIFIC SHOW-C AUSE NOTICE ISSUED BY THE AO. FROM THE DETAILS AS DISCUS SED ABOVE IT IS APPARENT THAT SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE APPELLANT. THE FACT REMAINS THAT IN SPITE OF REPEATED OPPORTUNITIES PROVIDED BY THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT FAIL ED TO FURNISH THE REQUISITE DETAILS. 7. THE LD. CIT(A) CONCLUDED AS UNDER:- IF THE FACTS OF THE PRESENT CASE ARE ANALYZED, IT IS ABSOLUTELY CLEAR THAT THE APPELLANT INITIALLY FILED CONTRADICTORY REPLIES. THERE THE APPELLANT DID NOT REPLY EVEN TO THE SPECIFIC LETTERS ISSUED BY THE AO. THE RATIO OF THE ABOVE SAID JUDICIAL OPINIONS IS ON ALL FOURS AN D APPLICABLE TO THE PRESENT CASE. THE ASSESSING OFFIC ER HAS FRAMED THE ASSESSMENT IN A VERY JUDICIOUS MANNER AN D NOT IN ARBITRARY MANNER. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANC ES OF THE CASE, ADDITIONAL EVIDENCES FILED BY THE APPELLA NT IS NOT ADMITTED. THE CASE LAWS RELIED UPON BY THE APPELLAN T PERTAIN TO THE ADMISSION OF ADDITIONAL EVIDENCES BY THE 7 TRIBUNAL AND NOT BY THE CIT(APPEAL). THE ISSUES ARE THEREFORE BEING CONSIDERED ON MERITS. 8. AFTER HEARING THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN REFUSING TO ADMIT THE ADDITIONAL EVIDENCE SUBMITTED IN THE FORM OF PHOTOCOPIES OF SA LE BILLS. IT IS OBSERVED THAT THE ASSESSING OFFICER DID NOT REFUSE TO ADMIT ANY E VIDENCE. IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT IT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE. THE ASSESSING OFFICER HAS AFFORDED SUFFIC IENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE EVIDENCE IN SUPPORT OF ITS CLAIM. THE ASSESSEE HAS NOT GIVEN ANY PLAUSIBLE EXPLANATION AS TO HOW AND WHY T HE SALES BILLS WERE NOT PRODUCED BY IT BEFORE THE ASSESSING OFFICER. IT IS APPARENT FROM THE RECORDS THAT IN SPITE OF THE REPEATED OPPORTUNITIES PROVIDED BY THE ASSESSING OFFICER, THE ASSESSEE FAILED TO FURNISH THE REQUISITE EVIDENCE I N SUPPORT OF ITS CLAIM. IT IS ALSO OBSERVED BY THE CIT(A) THAT THE ASSESSEE TOOK THE P LEA THAT INSTEAD OF SALES FIGURE OF 15722.590 KGS WAS TAKEN BY THE ASSESSING OFFICER FOR COMPUTING CLOSING STOCK, THE ACTUAL SALES WERE TO THE TUNE O F 20273.73 KG. IT IS RELEVANT TO OBSERVE HERE THAT THE ASSESSEE HIMSELF ADMITTED IN ITS LETTER DATED 30.4.2007 THAT THE TOTAL SALES OF CLOTH DURING THE YEAR UNDER CONS IDERATION WAS 15722.590 KG. THUS, THE ASSESSEE HAS TAKEN ENTIRELY A NEW STAND IN THIS CASE STATING THAT ACTUAL SALES FIGURE IS 20223.73 KG INSTEAD OF 15722.590 K G. IN SUCH CIRCUMSTANCES, THE CIT(A) WAS FULLY JUSTIFIED IN REJECTING THE APPLICA TION OF THE ASSESSEE FILED FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES. 9. AS REGARDS, MERITS OF THE CASE, WE ARE ALSO IN A GREEMENT WITH THE OBSERVATIONS OF THE CIT(A) THAT ADMITTEDLY THE ASSE SSEE VIDE ITS LETTER DATED 30.4.2007 CLAIMED THAT TOTAL SALES OF CLOTH DURING THE YEAR WAS AT 15722.590 KGS. THE ASSESSEE HAD PURCHASED 27277 KGS OF YARN OUT O F WHICH IT PRODUCED 8 23886.86 KGS OF CLOTH AND SOLD CLOTH OF 15722.590 K GS AND DECLARED 8435.823 KGS OF CLOTH AS ITS CLOSING STOCK AS ON 31.3.2005. IT IS OBSERVED THAT BEFORE THE CIT(A) THE ASSESSEE HAD TAKEN ALTOGETHER A NEW PL EA THAT ACTUAL SALES FIGURES IS 20223.73 KGS WHICH APPEARS TO BE AN AFTERTHOUGHT. I N VIEW OF THE ASSESSEES LETTER DATED 30.4.2007 ADDRESSED TO THE ASSESSING O FFICER, WE ARE OF THE VIEW THAT THE CIT(A) WAS FULLY JUSTIFIED IN REJECTING T HE GROUND RAISED BY THE ASSESSEE ON MERITS. ACCORDINGLY, WE UPHOLD THE ORD ER OF CIT(A) IN CONFIRMING THE ADDITION OF RS. 7,70,013/- MADE ON ACCOUNT OF S UPPRESSION OF SALES OF CLOTH. CONSEQUENTLY, WE REJECT GROUND NOS. 1 AND 2 OF THE APPEAL. 10. THE RELEVANT FACTS RELATING TO GROUND NO. 3 OF THE APPEAL ARE THAT AS PER THE BALANCE SHEET, THE ASSESSEE HAD SHOWN AN AMOUNT OF RS. 35,105/- AND RS. 42,553/- AS BEING PAYABLE TO ITS EX-PARTNERS NAMELY SHRI HARMINDERPAL & SONS AND SHRI RAKESH JAIN, RESPECTIVELY. THE ASSESSING O FFICER MADE THE ADDITION OF RS. 77,658/- FOR WANT OF PROOF FROM THE ASSESSEE. 11. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION AN D, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS OBSE RVED THAT THE ASSESSEE HAD SUBMITTED THE WRITTEN SUBMISSIONS ON THIS ISSUE B EFORE THE CIT(A), WHICH READ AS UNDER:- 5.2 THE AR OF THE APPELLANT VIDE HIS WRITTEN SUBMISSIONS DATED NIL. SUBMITTED AS UNDER:- 'THAT THE ID. ASSESSING OFFICER HAS MADE THE IMPUGN ED ADDITION ON ACCOUNT OF OLD BALANCES OF RS. 35105/- AND RS. 42553/- IN THE ACCOUNTS OF ERSTWHILE PARTNERS NAMEL Y HARMINDERPAL SINGH & SONS AND SH. RAKESH JAIN, 9 RESPECTIVELY. THEY ARE EX-PARTNERS OF THE FIRM AND THEIR CAPITAL ACCOUNTS WERE CONVERTED INTO UNSECURED LOAN S UPON THEIR RETIREMENT FROM PARTNERSHIP. THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE SAID BALANCES DUE TO THE NON- COOPERATIVE ATTITUDE OF THE ABOVE STATED PARTNERS. THE SAID LIABILITY HAD NOT CEASED TO EXIST DURING THE ASSESS MENT YEAR UNDER CONSIDERATION. THE ID. ASSESSING OFFICER HAS RELIED UPON THE RATIONALE REPORTED IN C1T VS. IYENGAR & SO NS. LTD. (1996) 222 1TR 344(SC) WHICH IS APPLICABLE ON BALAN CES WRITTEN BACK BY THE ASSESSEE, WHILE IN THE APPELLAN T'S CASE THE ABOVE BALANCES IN THE ACCOUNTS IN THE ACCOUNTS OF ERSTWHILE PARTNERS HAVE NOT BEEN WRITTEN BACK IN IT S BOOKS. SO THE JUDGMENT IS NOT APPLICABLE TO THE APPELLANT' S CASE. MOREOVER, THE BALANCES WERE NOT INTRODUCED DURING T HE YEAR UNDER APPEAL AND ARE OUTSTANDING SINCE LONG, W HICH HAVE BEEN DULY ACCEPTED BY THE ID. ASSESSING OFFICE R IN THE PRECEDING ASSESSMENTS. THE ASSESSMENT FOR THE A, Y. 2004- 05 AND ASSESSMENT YEAR 2006-07 WERE ALSO MADE BY TH E ASSESSING OFFICER VIDE ORDERS DATED 31.03.2006 AND 23.12.2008, RESPECTIVELY AND THE SAID BALANCES WERE DULY ACCEPTED WITHOUT ANY OBJECTION. THEREFORE, THE ADDI TION FOR LIABILITIES OF RS. 77658/- ON ACCOUNT OF UNSECURED LOANS IS UNNECESSARY, UNLAWFUL AND NEEDS TO BE DELETED. ' 13. ON A PERUSAL OF THE IMPUGNED ORDER, WE FIND THA T LD. CIT(A) HAS NOT CONSIDERED THE ABOVE SUBMISSIONS OF THE ASSESSEE. T HE ASSESSEE HAS CATEGORICALLY STATED THAT THE IMPUGNED BALANCES WER E NOT INTRODUCED DURING THE YEAR UNDER CONSIDERATION AND ARE OUTSTANDING SINCE LONG, WHICH HAVE BEEN DULY ACCEPTED BY THE ASSESSING OFFICER FOR THE PRECEDING ASSESSMENTS THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSING OFFICER MADE T HE ASSESSMENT FOR THE ASSESSMENT YEARS 2004-05 AND 2006-07 WHEREIN THE SA ID BALANCES WERE DULY ACCEPTED WITHOUT ANY OBJECTION. IN THAT VIEW OF TH E MATTER WE THINK IT APPROPRIATE TO SET ASIDE THE ORDER OF CIT(A) ON THI S ISSUE AND REMAND THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE 10 WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. FOR STATISTICAL PURPOSES, GROUND NO.3 OF THE APPEAL IS ALLOWED. 14. AS REGARDS GROUND NO.4 OF THE APPEAL, THE ASSES SING OFFICER NOTED THAT OUT OF THE TRADING LIABILITIES OF RS. 7,67,653/- TH E ASSESSEE FAILED TO SUBSTANTIATE THE LIABILITIES TO THE EXTENT OF RS. 3,50,600/-. TH E DERAILS ARE AS UNDER:- I) M/S JINDAL SINGH RS. 636/- II) M.S NICE GRIP TOOLS & EXPORTS RS. 3,44,966/- III) M/S R.S. SALES CORPN RS. 480/- IV) M/S SOKHAL CALANDER PRESS RS. 4,518/- TOTAL RS. 3,50,600/- THE ASSESSING OFFICER CALLED FOR INFORMATION U/S 13 3(6) FROM M/S NICE GRIP TOOLS & EXPORTS. AS PER THEIR REPLY, THERE WAS NIL BALANCE AND THERE WAS NO AMOUNT PAYABLE TO THE ASSESSEE. HOWEVER, THE ASSESS EE SUBMITTED THAT OUT OF TOTAL LIABILITY STANDING AGAINST M/S NICE GRIP TOOL S & EXPORTS, AN AMOUNT OF RS. 2.00 LACS WAS TRANSFERRED TO THE ACCOUNT OF ITS SIS TER CONCERN M/S S.G. EXPORTS. FOR THE BALANCE AMOUNT OF RS. 1,44,966/- THE ASSESS EE CONTENDED THAT THE SAME HAD BEEN WRITTEN OFF FROM THE BOOKS AS ON 31.3.2006 . THE ASSESSING OFFICER TOOK THE VIEW THAT THESE LIABILITIES HAD CEASED TO EXIST DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER ALLOWED A RELI EF OF RS. 2 LAKHS WHICH WAS TRANSFERRED TO THE ACCOUNT OF SISTER CONCERN AND TH E BALANCE AMOUNT OF RS. 1,50,600/- WAS ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. 15. ON APPEAL, THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER AND, HENCE, THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL. 11 16. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS OBS ERVED THAT THE ASSESSEE FILED THE WRITTEN SUBMISSIONS BEFORE THE CIT(A), WH ICH READ AS UNDER:- 'THAT THE ID. ASSESSING OFFICER HAS MADE DISALLOWAN CE OF RS. 150600/- ON ACCOUNT OF CESSATION OF TRADE LIA BILITIES. THE FOLLOWING TRADE LIABILITIES OF RS. 350600/- WERE APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE: M/S JINDAL SONS RS. 636.00 M/S NICE GRIP TOOLS & EXPORTS RS. 344966.00 M/S R.S. SALES CORP. RS. 480.00 M/S SOKHAL CALENDAR PRESS RS. 4518.00 RS. 350600.00 GIVING REBATE OF RS. 200000/- TRANSFERRED TO M/S NI CE GRIP TOOLS & EXPORTS THROUGH ACCOUNT OF SISTER CONCERN M /S S. G. EXPORTS, THE ID. ASSESSING OFFICER DISALLOWED TH E BALANCE AMOUNT OF 150600/- ON ACCOUNT OF CESSATION OF TRADI NG LIABILITIES, IGNORING THE FACT PRODUCED DURING ASSE SSMENT PROCEEDINGS THAT THE ASSESSEE HIMSELF HAS WRITTEN O FF THE BALANCE AMOUNT OF RS. 144966/- PAYABLE TO M/S NICE GRIP TOOLS & EXPORTS IN THE SUBSEQUENT 'A. Y. 2006-07, THE ASSESSMENT FOR WHICH WAS FINALIZED VIDE ORDER DATE D 23.12.2008 WITHOUT MAKING ANY ADVERSE INFERENCE IN THIS REGARD. THE IMPUGNED DISALLOWANCE BY THE ASSESSING OFFICER IS UNNECESSARY AND HAS JUST DOUBL ED THE HARDSHIP OF THE ASSESSEE .DUE TO DOUBLE DISALLOWANC E OF THE SAME AMOUNT REGARDING THE BALANCES OF OTHER THREE A RTIES, THE BALANCES IN THEIR CASES ARE VERIFIABLE FROM THE IR COPIES OF ACCOUNTS WHICH COULD NOT BE OBTAINED AND FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS DUE TO UNAVOID ABLE CIRCUMSTANCES. THEREFORE, THE IMPUGNED DISALLOWANC E OF RS. 150600/- IS BASELESS, NOT REQUIRED AND NEEDS TO BE DELETED. 12 17. IT APPEARS THAT THE LD. CIT(A) HAS NOT CONSIDER ED THE ABOVE SUBMISSIONS OF THE ASSESSEE WHILE PASSING THE IMPUGNED ORDER. T HE ASSESSEE HAS CONTENDED THAT THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF RS. 1,50,600/- ON ACCOUNT OF CESSATION OF TRADING LIABILITIES IGNORING THE FACT PRODUCED DURING THE ASSESSMENT PROCEEDINGS THAT ASSESSEE ITSELF HAS WRITTEN OFF TH E BALANCE AMOUNT OF RS. 1,44,966/- PAYABLE TO M/S NICE GRIP TOOLS & EXPORTS IN THE ASSESSMENT YEAR 2006-07 AND THE ASSESSMENT FOR WHICH WAS FINALIZED VIDE ORDER DATED 23.12.2008 WITHOUT MAKING ANY ADVERSE INFERENCE IN THIS REGARD. TAKING INTO CONSIDERATION THE ABOVE CONTENTION OF THE ASSESSEE, WE THINK IT APPROPRIATE TO SET ASIDE THE FINDINGS OF THE CIT(A) ON THIS ISSUE AND REMAND THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ABOVE SUBMISSIONS OF THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 18. AS REGARDS GROUND NO.6 OF THE APPEAL, THE ASSES SING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED UNABSORBED BROUGHT FORWARD DEP RECIATION. THE ASSESSING OFFICER FURTHER NOTED THAT THERE WAS NO SUCH CLAIM DETERMINED AS ALLOWABLE TO BE CARRIED FORWARD IN THE ASSESSMENT YEAR 2004-05. HE, THEREFORE, DISALLOWED THE CLAIM OF UNABSORBED DEPRECIATION OF RS. 3,45,659/-. 19. ON APPEAL, THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER OBSERVING THAT ASSESSEE FAILED TO PRODUCE ANY EVID ENCE IN RESPECT OF ITS CONTENTION THAT THIS CLAIM WAS DETERMINED TO BE CAR RIED FORWARD DURING THE PRECEDING YEAR I.E ASSESSMENT YEAR 2004-05. 20. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS RELE VANT TO OBSERVE THERE THAT THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE A RE CRYPTIC AND NON-SPEAKING. IT 13 IS NOT CLEAR AS TO WHETHER ASSESSMENT TO THE ASSE SSMENT YEAR 2004-05 WAS FRAMED U/S 143(3) OF THE ACT OR THE RETURN FOR THAT YEAR WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961. IN OUR OPINION , THE ISSUE NEEDS TO BE DECIDED AT THE LEVEL OF THE ASSESSING OFFICER. ACC ORDINGLY, WE SET ASIDE THE FINDINGS OF THE CIT(A) ON THIS ISSUE AND REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE IS SUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 21. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.2016 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : FEBRUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR