M/s. Onasis Auto Products Pvt. Ltd., Gurgaon V. Addl. CIT, Gurgaon

ITA 1662/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69248 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 23-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 06-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Unexplained cash credit; Business income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.-1662/DEL/2011 (ASSESSMENT YEAR-2007-08) M/S ONASIS AUTO PRODUCTS P. LTD. VS. ADDL. CIT PLOT NO. 35, SECTOR 34, GURGAON RANGE-II, EHTP GURGAON, HSIDC BUILDING,4 TH (HARYANA) FLOOR, VANIJYA NIKUNJ, UDYOG VIHAR, PHASE-V, SHANKER CHOWK, GURGAON, (HARYANA) PAN: AAACO2317F I.T.A .NO.-1898/DEL/2011 (ASSESSMENT YEAR-2007-08) ASSTT. CIT VS. M/S ONASIS AUTO CIRCLE-2, PRODUCTS P. LTD. GURGAON PLOT NO. 35, SECTOR 34, EHTP GURGAON, (HARYANA) PAN: AAACO2317F (APPELLANT) (RESPONDENT) ASSESSEE BY:-SH. SANJEEV JAIN, CA. REVENUE BY:-SH. SAMEER SHARMA, SR. DR ORDER PER RAJPAL YADAV JM. THE ASSESSEE AND THE REVENUE ARE IN CROSS-APPEAL AG AINST THE ORDER OF LD. CIT (A) DATED 21.01.2011 PASSED FOR ASSESSMENT YEAR 200 7-08. 2 2. THE GROUND NO. 2 AND 3 TAKEN BY THE REVENUE ARE INTER-CONNECTED WITH THE SOLITARY GROUNDS OF APPEAL TAKEN BY THE ASSESSE E. THEREFORE, WE TAKE ALL THESE GROUNDS OF APPEAL TOGETHER. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE CO MPANY IS ENGAGED IN THE MANUFACTURING OF AUTO PARTS. IT HAS FILED ITS RETUR N FOR AY 2007-08 ELECTRONICALLY ON 31 ST OCTOBER 2007, DECLARING AN INCOME OF RS.1,26,76,22 0/. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) OF THE IT ACT 1961, WAS ISSUED ON 29 TH SEPTEMBER 2008. THE NOTICE WAS DULY SERVED UPON ASSESSEE AND SHRI R.K. AGRAWAL , ADVOCATE APPEARED BEFORE THE AO FROM TIME TO TIME. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT ASSESSEE ASSESSEE HAS SHOWN TRADING LIA BILITIES. HE DEPUTED AN INSPECTOR TO FIND OUT GENUINENESS OF THE ENTITIES A GAINST WHOM TRADING LIABILITIES HAVE BEEN SHOWN. THE AO WHILE REPRODUCI NG THE EXPLANATION OF THE ASSESSEE, HAS NOTICED THE TRADING LIABILITY, WH ICH READ AS UNDER: THE MOVEMENT OF SUNDRY CREDITORS IS GIVEN AS PER C HART GIVEN HEREUNDER: NAME OF PARTY BALANCE AS ON TRANSACTIONS BALANCE AS ON 01.04.2006 DURING THE YR 31.03.2007 1.DURGA ENTERPRISES 1,68,77,629/- NIL 1,68,77,629 /- 2.MONICA ENTERPRISES NIL PURCHASES ON 31.03.07 - 38,05,500/- 38,05,500/- 3. RAJ INDUSTRIAL CORPN. 30,49,488/- - - PAYMENT MADE DURING THE YEAR - 13,47,710/- 17,01,7 78 /- 3 4. THE LD. AO HAS MADE ADDITION OF ALL THESE THREE ALLEGED TRADE LIABILITIES BY OBSERVING THAT THEY ARE BOGUS. HE DE TERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.3,57,14,214/-. 5. ON APPEAL LD. CIT (A) FOUND THAT AGAINST THE NAM E OF DURGA ENTERPRISES, A TRADING LIABILITY OF RS.1,61,25,279/ - HAS BEEN SHOWN BY THE ASSESSEE AT THE END OF THE YEAR. THE AO HAS STARTED THE INVESTIGATION AFTER 31 ST AUGUST 2009, THE ASSESSEE HAS MADE A SETTLEMENT WI TH THIS PARTY AND OFFERED A SUM OF RS.1,59,19,279/- FOR TAXATION. THE AMOUNT WAS WRITTEN BACK AS ON 31 ST MARCH 2008, MUCH PRIOR TO THE INVESTIGATION STARTE D BY THE AO. ACCORDING TO THE LD. CIT (A) THIS AMOUNT HAS BEEN O FFERED FOR TAX IN AY 2008-09, THEREFORE, IT CANNOT BE TAXED TWICE I.E. I N THIS YEAR AS WELL AS IN THE NEXT ASSESSMENT YEAR. 6. THE REVENUE IN ITS GROUND NO. 2 HAS PLEADED THAT LD. CIT (A) HAS NOT GIVEN ANY JUSTIFICATION FOR DELETION OF RS.2,05,980 /- WHICH IS DIFFERENCE BETWEEN RS.1,61,25,279/- (-) RS.1,59,19,299/-. 7. WITH REGARD TO THE TRADING LIABILITY APPEARING A GAINST THE NAME OF MONIKA ENTERPRISES, LD. CIT (A) HAS OBSERVED THAT A SSESSEE HAD MADE PAYMENT OF RS.4,12,574/- AND 4,74,739/- ON 2 ND JANUARY 2008 THROUGH ACCOUNT PAYEE CHEQUE. SIMILARLY IT MADE A PAYMENT O F RS.435235 ON 31 ST JANUARY 2008, VIDE CHEQUE NO. 862895, BALANCE AMOUN T OF RS.29,09,187/- 4 HAS BEEN PAID BY ONLINE BANK TRANSFER IN THE ACCOUN T OF M/S MONIKA ENTERPRISES. ALL THESE DETAILS OF BANK TRANSACTIONS WERE SUBMITTED BY THE ASSESSEE. LD. AO DID NOT ADVERSELY COMMENT ON THESE MATERIAL EVEN IN THE REMAND PROCEEDINGS. THUS LD. CIT (A) HAS HELD THAT ONCE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUE IN THE ACCOUNT OF THE TRADE CREDITOR. IT CANNOT BE DOUBTED. SHE DELETED THE ADDITION. 8. REVENUE IS CHALLENGING THIS DELETION OF RS.38,05 ,500/- IN GROUND NO. 3. 9. WITH REGARD TO THE LIABILITY OF RS.30,49,488/- A PPEARING AGAINST THE NAME OF M/S RAJ INDUSTRIAL CORPORATION IS CONCERN, THE LD. CIT (A) HAS CONFIRMED THE ADDITION. 10. THE ASSESSEE IS IMPUGNING THIS CONFIRMATION IN ITS SOLITARY GROUND OF APPEAL. THUS ALL THESE THREE GROUNDS OF APPEAL ARE INTER-CONNECTED TO THE SOLE ISSUE AND THEREFORE, WE TAKE THEM TOGETHER. 11. THE LD. DR RELIED UPON THE ORDER OF AO, HE POIN TED OUT THAT AGAINST THE NAME OF DURGA ENTERPRISES THE CREDIT BALANCE WA S OF RS.1,61,25,279/-. THE ASSESSEE HAS WRITTEN BACK AN AMOUNT OF RS.1,59, 19,279/-. THE LD. CIT (A) FAIL TO GIVE ANY JUSTIFICATION ABOUT THE DELETI ON OF THE DIFFERENTIAL AMOUNT, AMOUNTING TO RS.2,05,980/-. 5 12. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER H AND SUBMITTED THAT AS PER THE AO THE OPENING BALANCE AS ON 1.4.2006 AND C LOSING BALANCE AS ON 31 ST MARCH 2006 AGAINST THE NAME OF DURGA ENTERPRISES A RE SAME I.E. AT RS.1,61,25,279/-. ACCORDING TO THE ASSESSEE THE OPE NING BALANCE WAS AT RS.168,77,629/-. IT HAD MADE A PAYMENT OF RS.7,52,3 50/- DURING THE YEAR AND THUS THE CLOSING BALANCE WAS ON RS.1,61,25,279/-. T HERE WAS A DISPUTE WITH THE PARTY AND THE ASSESSEE HAS ULTIMATELY SETTLED, THE DISPUTE WITH THE PARTY. IT HAS WRITTEN BACK THE LIABILITY AT THE CLOSE OF THE ACCOUNT FOR THE NEXT AY I.E. 31 ST MARCH 2008. THE RETURN WAS FILED ON 30 TH SEPTEMBER 2009. THIS AMOUNT OF RS.1,59,19,279/- WAS OFFERED FOR TAX. THE LD. CI T (A) HAS OBSERVED THAT SINCE ASSESSEE HAS WRITTEN BACK RS.1,59,19,299/- AN D ADDED IN THE TOTAL INCOME FOR AY2008-09, NO SEPARATE ADDITION WITH REG ARD TO THE ALLEGED TRADE LIABILITY OF DURGA ENTERPRISES DESERVES TO BE MADE. 13. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT (A). THE AO H AS NOT VISUALIZED THE COMPLETE FACTS. HE HAS STARTED THE INVESTIGATION IN THE MONTH OF SEPTEMBER 2009, ASSESSEE HAS WRITTEN BACK SUBSTANTIAL AMOUNT APPEARING AGAINST THE NAME OF DURGA SHAKTI ON 31 ST MARCH 2008. IT HAS FILED THE RETURN IN THE MONTH OF SEPTEMBER 2009. THIS AMOUNT HAS ALREADY BE EN OFFERED FOR TAX. THE ASSESSEE RELIED UPON THE ORDER OF THE ITAT IN T HE CASE OF FABEN-KON VS. 6 DCIT ITA NO. 114 TO 116 AND SUBMITTED THAT SAME AMO UNT CANNOT BE TAXED AGAIN. THE COPY OF THIS DECISION HAS BEEN PLACED ON PAGE NO. 96 TO 103 OF THE PAPER BOOK. THE AO HAS NOT EXACTLY CRYSTALLIZED THE LIABILITY, WHICH WAS OUT STANDING IN THIS YEAR, HE TOOK THE OPENING BALANCE AND THE CLOSING BALANCE AT THE SAME FIGURE. WHERE ASSESSEE HAS ALLEGED THAT TH ERE WERE DIFFERENT FIGURE. IT HAS ALREADY MADE PAYMENT OF RS.7,52,350/-. THIS ASPECT HAS ALSO NOT BEEN TAKEN INTO CONSIDERATION BY THE AO WHILE MAKING THE ADDITION. HE HAS MADE THE ADDITION AS AN UNEXPLAINED CASH CREDIT. HE HAS NOT MADE THE ADDITION ON ACCOUNT OF CESSATION OF LIABILITY. THE LD. CIT (A) HAS DELETED THE ADDITION ON THE GROUND THAT SETTLEMENT WAS ARRIVED AT RS.1,59,1 9,299/-. THE ACCOUNTS HAVE BEEN SQUARED UP AND THIS AMOUNT HAS BEEN OFFER ED FOR TAX. THE UNEXPLAINED ALLEGED CREDITS WERE QUANTIFIED AS RS.1 5919299/-. IF THE ADDITION WAS MADE ON ACCOUNT OF CESSATION OF LIABILITY THEN PROBABLY LD. DR HAS CASE. BUT THE FOUNDATION OF THE ADDITION IS DIFFERENT IN THE ASSESSMENT ORDER. THUS CONSIDERING THE ORDER OF LD. CIT (A) WE DO NOT FIND ERROR IN IT. 14. THE NEXT ITEM IS OF RS.38,05,500/- APPEARING AG AINST THE NAME OF MONICA ENTERPRISES. ACCORDING TO THE ASSESSEE THE P URCHASES MADE FROM M/S MONICA ENTERPRISES HAVE BEEN DULY ENTERED IN THE ST OCK REGISTERED. M/S MONICA ENTERPRISES IS REGISTERED WITH THE SALES TAX AUTHORITIES. THE ASSESSEE HAS FILED ITS TIN NO. THIS CONCERN HAD ISSUED BILLS AND ALSO FORM NO. VAT 7 D-3, WHICH BEARS THE HOLOGRAM SEAL OF THE SALES TAX DEPARTMENT OF STATE GOVERNMENT OF HARYANA. WE FIND THAT PURCHASES FROM MONICA ENTERPRISES HAVE BEEN MADE DURING THE YEAR. THE OPENING BALANCE WAS NIL. HENCE AO HAS RIGHTLY INQUIRED THE ANTECEDENTS AND EXISTENCE OF THIS CONCERN. THE ASSESSEE HAS PLACED ON RECORD COPIES OF BILLS AS WE LL AS COPIES OF FORM NO. VAT D-3. ALL THESE DETAILS ARE AVAILABLE ON PAGE NO . 48 TO 75 OF THE PAPER BOOK. M/S MONICA ENTERPRISES HAS SHOWN ITS ADDRESS WITH THE SALES TAX AUTHORITIES AT SHOP NO. D-591 NEHRU GROUND, FARIDAB AD. IT WAS REGISTERED UNDER THE SALES TAX ACT ON 5 TH NOVEMBER 2004, ITS REGISTRATION IS VALID UP TO 5 TH JANUARY 2010. THE DETAILS TO THIS EFFECT ARE AVAIL ABLE ON PAGE 55, THESE DETAILS HAVE BEEN TAKEN FROM THE WEBSITE. LD. CIT ( A) RECORDED AS A MATTER OF FACT THAT PAYMENT TO THIS CONCERNS WERE MADE THR OUGH ACCOUNT PAYEE CHEQUE. A SUM OF RS.29,09,187/- WAS MADE BY ONLINE BANK TRANSFER, THE AO FAILED TO FIND OUT ANY DEFECTS IN THESE DETAILS. TH E LD. DR SUBMITTED THAT ON THE INSPECTION OF INSPECTOR, THIS CONCERN WAS NOT F OUND AT THE ADDRESS GIVEN. WE HAVE DULY CONSIDERED THIS CONTENTION OF THE LD. DR AND PERUSED ALLEGED REPORT OF THE INSPECTOR REPRODUCED ON PAGE 2 OF THE ASSESSMENT ORDER. FROM THE REPORT, IT REVEALS THAT LD. INSPECTOR MADE AN I NQUIRY FROM SHOP NO. B-590 AND THEY TOLD THAT AT B-591 THERE WAS NEVER ANY OFF ICE IN THE NAME OF MONICA ENTERPRISES. THE INSPECTOR HAS NOT RECORDED THE NAM E TO WHOM HE HAS 8 CONTACTED, WHETHER HE HAS CONDUCTED INQUIRY AT SHOP NO. B-591 I.E. THE ADDRESS OF MONICA ENTERPRISES ETC. LD. AO DID NOT M AKE SUFFICIENT EFFORTS, MORE SO THE ALLEGED LIABILITY HAS ALREADY BEEN DISC HARGED BY THE ASSESSEE BY MAKING PAYMENT THROUGH BANKING CHANNEL. THEREFORE, AFTER TAKING INTO CONSIDERATION THE DETAILED ORDER OF LD. CIT (A) WE DO NOT FIND ANY ERROR IN HER FINDING ON THIS ISSUE. 15. THE NEXT ITEM IS AN ADDITION OF RS.3049488/-, F ROM PERUSAL OF THE RECORD, IT REVEALED THAT A SUM OF RS.3049488/- IS T HE OPENING BALANCE APPEARING AGAINST THE NAME OF RAJ INDUSTRIAL CORPOR ATION. ACCORDING TO THE ASSESSEE, IT HAS MADE PAYMENT OF RS.13,47,710/- DUR ING THE YEAR AND SHOWN AN AMOUNT OF RS.17,01,778/- AS CLOSING BALANCE. THE AO HAS MADE ADDITION OF RS.30,49,488/-, ON THE GROUND THAT INSPECTOR HAS REPORTED IN HER REPORT THAT ON LOCAL INQUIRY, AT THE ADDRESS GIVEN BY THE ASSES SEE, IT WAS GATHERED THAT NO OFFICE IN THE NAME OF RAJ INDUSTRIAL CORPORATION WA S THERE. BEFORE LD. CIT (A) ASSESSEE HAS CONTENDED THAT IT HAS MADE PAYMENT TO THIS CONCERN THROUGH ACCOUNT PAYEE CHEQUE. THE DETAILS OF CHEQUES READ A S UNDER: 21.08.2006 RS.7,01,272/- CH. NO. 447641 22.08.2006 RS.6,46,438/- CH. NO. 447614 12.05.2007 RS.3,87,296/- CH. NO. 447888 12.05.2007 RS.3,65,976/- CH. NO. 447885 9 16. THE LD. CIT (A) CONFIRMED THE ADDITION ON THE G ROUND THAT ASSESSEE FAIL TO PRODUCE THE BANK DETAILS OF RECIPIENT I.E. M/S RAJ INDUSTRIAL CORPORATION. 17. THE LD. COUNSEL FOR THE ASSESSEE WHILE IMPUGNIN G THE ORDER OF LD. REVENUE AUTHORITIES BELOW, CONTENDED THAT THIS IS A N OLD CREDITOR, NO PURCHASES WERE MADE FROM THIS PARTY DURING THIS YEA R. THE ASSESSEE HAS MADE PAYMENTS AGAINST THE PREVIOUS OUTSTANDING DUES . THE AO, IF WANTS TO MAKE THE ADDITION ON ACCOUNT OF BOGUS CREDIT U/S 68 . THEN, IT HAS TO BE MADE IN THE YEAR IN WHICH THE CREDITS WERE RECORDED FIRS T TIME. IT IS A CARRY FORWARD FROM THE EARLIER YEAR, THE AO HAS NOT DISPUTED THIS ASPECT. IF AO WANTS TO MAKE ADDITION ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1) OF THE IT ACT THEN, THE LIABILITY HAS NOT CEASED, ASSESSEE HAS PA RTLY MADE THE PAYMENT DURING THIS YEAR AND REMAINING IN THE NEXT YEAR. TH E LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THIS CONCERN IS ALS O HAVING PERMANENT ACCOUNT NO. WITH THE SALES TAX AUTHORITY. HE DREW O UR ATTENTION TOWARDS THE STATEMENT OF THE BANK ACCOUNT AVAILABLE ON PAGE 91 AND POINTED THAT FROM THE ASSESSEES ACCOUNT WITH THE STATE BANK OF INDIA, TH ESE PAYMENTS HAVE BEEN MADE. THE LD. COUNSEL ALSO DREW OUT ATTENTION TOWAR DS PAGE NO. 95, WHERE DETAILS OF TIN NO. I.E. REGISTRATION WITH THE SALES TAX DEPARTMENT ARE PLACED ON RECORD. THIS CONCERN WAS REGISTERED WITH THE SAL ES TAX DEPARTMENT ON 15 TH 10 MAY 2001 AND IT IS VALID UP TO 5 TH JANUARY 2010. IN ORDER TO BUTTRESS HIS CONTENTION THAT ADDITION ON ACCOUNT OF CESSATION OF LIABILITY CANNOT BE MADE, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISI ON OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT FARIDABAD VS. G.P. INTERNATIONAL LTD. REPORTED IN 186 TAXMAN 229. HE ALSO RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. REPORTED IN 236 ITR 518. THE LD. COUNSEL FOR THE AS SESSEE ALSO SHOWN US A CERTIFICATE OF THE BANK DATED 5 TH SEPTEMBER 2008, POINTING OUT THAT CHEQUES HAVE BEEN CLEARED IN FAVOUR RAJ INDUSTRIAL CORPORAT ION, THE COLLECTING BANK IS ALLAHABAD BANK AND NIT FARIDABAD. ON THE OTHER H AND LD. DR RELIED UPON THE ORDERS OF REVENUE AUTHORITIES BELOW. 18. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AN D GONE THROUGH THE RECORD CAREFULLY. FROM PERUSAL OF THE RECORD, IT RE VEALED THAT AO SOUGHT TO TAX THIS OUTSTANDING TRADING LIABILITY ON THE GROUN D THAT IT IS BOGUS, HENCE IT IS AN UNEXPLAINED CASH CREDIT. SECTION 68 OF THE IT AC T PROVIDE THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE M AINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SATISFACTORY, THE SUMS SO CREDITED MAY BE CHARG ED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THERE IS NO DISPUTE THAT A CREDIT 11 BALANCE OF THE TRADING LIABILITY IS APPEARING AGAIN ST THE NAME OF RAJ INDUSTRIAL CORPORATION. THE AO CAN MAKE AN INQUIRY, BUT IT IS TO BE NOTICED HERE THAT THIS CREDIT ENTRY NOT CAME INTO EXISTENCE DURING THE ACCOUNTING PERIOD RELEVANT TO THE PRESENT AY AND IT IS AN OPEN ING BALANCE OF EARLIER YEAR. THUS AS FAR AS GENUINENESS ETC WAS TO BE EXAMINED B Y THE AO, THEN, IT OUGHT TO HAVE BEEN EXAMINED IN THE YEAR, WHEN THIS LIABIL ITY WAS FIRST TIME SHOWN BY THE ASSESSEE. IT CANNOT BE ADDED IN THIS A.Y. 19. THE SECOND FOLD OF THE SUBMISSION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT ADDITION CAN BE MADE WITH THE HELP OF SECTION 41(1) ON ACCOUNT OF CESSATION OF LIABILITY. IN OUR OPINION S ECTION 41 (1) HAS BEEN INCORPORATED IN THE ACT TO COVER A PARTICULAR FACTS SITUATION. THIS SECTION APPLIES WHERE A TRADING LIABILITY WAS ALLOWED AS A DEDUCTION IN EARLIER YEARS IN COMPUTING THE BUSINESS INCOME OF THE ASSESSEE AN D THE ASSESSEE HAS OBTAINED A BENEFIT IN RESPECT OF SUCH TRADING LIABI LITY IN LATTER YEAR BY WAY OF REMISSION OR CESSATION OF THE LIABILITY. IN SUCH A CASE, THE SECTION SAYS THAT WHATEVER BENEFIT HAS ARISEN TO THE ASSESSEE IN THE LATTER YEAR BY WAY OF REMISSION OF THE LIABILITY WILL BE BROUGHT TO TAX I N THAT YEAR. THE PRINCIPLE BEHIND THE SECTION IS THAT A PROVISION INTENDED TO ENSURE THAT THE ASSESSEE DOES NOT GET AWAY WITH A DOUBLE BENEFIT, ONCE BY WA Y OF DEDUCTION IN EARLIER ASSESSMENT YEAR AND AGAIN BY NOT BEING TAXED ON THE BENEFIT RECEIVED BY HIM 12 IN A LATTER YEAR WITH REFERENCE TO THE LIABILITY E ARLIER ALLOWED AS A DEDUCTION. THE ASSESSEE HAS NOT SHOWN THAT LIABILITY HAS CEASE D, RATHER IT HAS ALLEGED THAT OUT OF RS.30,49,488/-, A SUM OF RS.13,47,710 HAVE B EEN PAID DURING THIS YEAR AND THE BALANCE RS.17,01,778/- PAID IN SUBSEQUENT Y EARS. LEGALLY AND LOGICALLY THIS AMOUNT CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. THE REASONING OF THE LD. CIT (A) IS THAT ASSESSEE FAILE D TO PRODUCE BANK DETAILS OF RAJ INDUSTRIAL CORPORATION INDICATING THE CREDITS O F THE AMOUNTS DEBITED FROM ITS ACCOUNT. TO OUR MIND, IT IS A LITTLE TOO HIGHER TECHNICAL APPROACH THE ASSESSEE CAN PRODUCE ITS ACCOUNTS, A CERTIFICATE FR OM ITS BANKER. IT IS TO BE SEEN THAT, WHY IT WILL PAY AN AMOUNT TO SOME UNKNOW N ENTITY. IT IS BETTER FOR THE ASSESSEE TO PAY TAX @ 30% OF THE TOTAL AMOUNT. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. GROUND NO. 2 & 3 ARE ACCORDINGLY REJECTED. WHEREAS GROUND NO. 1 RAISED BY THE ASSESS EE IN ITS APPEAL IS ALLOWED, THE ADDITION OF RS.30,49,488/- IS DELETED. 20. IN THE REVENUES APPEAL IT HAS TAKEN ONE MORE G ROUND OF APPEAL WHEREIN IT HAS PLEADED THAT LD. CIT (A) HAS ERRED I N DELETING THE ADDITION OF RS.57,727/-. THE ASSESSEE HAS CLAIMED A DEDUCTION O F RS.57,727/- ON ACCOUNT OF ADDITIONAL DEMAND OF CENVAT. THE LD. AO WITHOUT RECORDING ANY FINDING ALLEGED THAT IT IS PANEL IN NATURE. HE DISA LLOWED THE CLAIM OF THE ASSESSEE. 13 21. ON APPEAL LD. CIT (A) HAS OBSERVED THAT ADDITIO NAL LEVY OF CENVAT WAS IMPOSED UPON THE ASSESSEE, BY NOT ALLOWING CRED IT FOR INPUT TAX. THUS ACCORDING TO THE LD. CIT (A), IT IS AN ADDITIONAL L IABILITY OF THE TAXES. IT IS NOT RELATED TO ANY PENALTY. ON DUE CONSIDERATION OF THE FINDING OF LD. CIT (A), WE DO NOT FIND ANY ERROR IN IT, THE AO HAS NOT OBSE RVED HOW IT IS PANEL IN NATURE, HE SIMPLY OBSERVED THAT ON EXAMINATION, IT REVEALED THAT EXPENSES ARE PANEL IN NATURE BUT HOW THEY ARE PENAL IN NATURE, L D. AO NOWHERE EXPLAINED. THUS WE DO NOT FIND ANY ERROR IN THE ORDER OF LD. C IT(A). THIS GROUND OF APPEAL IS REJECTED. 22. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D AND THAT OF ASSESSEES IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/08/2013. SD/- SD/- ( T. S. KAPOOR ) (RAJP AL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 23/08/2013 *AK VERMA* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR