The ITO, Bhopal V. Shri Pradeep Saraf, Bhopal

ITA 175/IND/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66677 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: H P VERMA; SAKSHI VERMA
• Keywords: Gross profit estimation; Unexplained cash credit; Rejection of books of accounts; Business income; Depreciation; Additional evidence; Assessment record
• Section: 133(6); 32; 37; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ADOPS9908A I.T.A.NO. 174/IND/2012. A.Y. : 2007 - 08 SHRI PRADEEP SARAF, INCOME - TAX OFFICER, BHOPAL. VS BHOPAL AP PELLANT RESPONDENT PAN NO. : ADOPS9908A I.T.A.NO. 175/IND/2012. A.Y. : 2007 - 08 INCOME - TAX OFFICER, SHRI PRADEEP SARAF, BHOPAL VS BHOPAL. APPELLANT RESPONDENT DEPARTMENT BY : SHRI R. A. VERMA, SR. DR ASSESSEE BY : SHRI H. P. VERMA , ADV. AND MS. SAKSHI VERMA, CA DATE OF HEARING : 31 .0 8 .2012 DATE OF PRONOUNCEMENT : 12. 0 9 .201 2 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND REVENUE AGAINST THE ORDER OF CIT(A) DATED 23.1.11 F OR THE ASSESSMENT YEAR 2007-08. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS RU NNING A SMALL SCALE UNIT UNDER THE NAME AND STYLE OF STERLING RUB BER PRODUCTS, WHEREIN MANUFACTURING OF PHARMACEUTICALS STOPPERS IS CARRIED OUT. DURING THE COURSE OF SCRUTINY ASSES SMENT, THE ASSESSING OFFICER FOUND THAT THE FIGURES APPEARING IN THE RETURNS OF INCOME AND THAT AS PER COPY OF PROFIT AN D LOSS ACCOUNT IN BALANCE SHEET ARE NOT MATCHING. THERE WA S VARIATION IN THE EXPENDITURE CLAIMED ON DIFFERENT H EADS. THE ASSESSING OFFICER ALSO FOUND THAT GROSS PROFIT DECL ARED DURING THE YEAR WAS 17.2 % AS AGAINST GROSS PROFIT OF IMME DIATELY PRECEDING YEAR AT 19.7 %. ACCORDINGLY, THE ASSESSIN G OFFICER APPLIED PROVISIONS OF SECTION 145(3) AND REJECTED B OOKS OF ACCOUNT. THE ASSESSING OFFICER ESTIMATED GROSS PROF IT AT 19.4 -: 3: - 3 %, THEREBY AN ADDITION OF RS. 8,45,452/- WAS MADE T O THE TOTAL INCOME ON ACCOUNT OF LOW GROSS PROFIT. 3. THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 4,50,000/- U/S 68 BY HAVING DISCUSSED THE ISSUE IN PARA 4 & 5 OF HIS ASSESSMENT ORDER. THE ASSESSING OFFICER STAT ED THAT THE ASSESSEE HAS INTRODUCED LOAN OF RS. 4,50,000/- FROM THE FOLLOWING PERSONS :- NAME OPENING BALANCE AS ON 1.4.06 (RS.) ADDITION DURING THE YEAR (RS.) GENDALAL SARAF 14,92,325 50,000 SANJAY SARAF 16,10,565 1,00,000 M/S. M.K. MARKETING 19,13,656 2,00,000 KAMLESH DEVI SARAF 4,41,698 40,000 RENU SARAF 4,35,013 30,000 SERMAN SARAF 5,00,397 30,000 63,93,654 4,50,000 ALL THESE PERSONS WERE EXISTING CREDITORS, HOWEVER, FURTHER CREDITS AMOUNTING TO RS.4,50,000/- WERE ACCEPTED FROM THESE PERSONS. THE ASSESSING OFFICER HAS STATED THAT AFFIDAVIT FROM VARIOUS PERSONS WERE FIL ED AND TWO PARTIES WERE PRODUCED FOR VERIFICATION. -: 4: - 4 4. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 28,31,811/- ON ACCOUNT OF ADDITION MADE IN THE CAPI TAL ACCOUNT. THE ASSESSING OFFICER ALSO MADE A DISALLOW ANCE OF RS. 1,80,682/- BY STATING THAT THE ASSESSEE HAS PAID PE NALTY FOR VIOLATION OF LAW. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED TRADI NG ADDITION OF RS. 5,78,873/- BY APPLYING THE GROSS PR OFIT RATE OF 18 %. HOWEVER, BALANCE ADDITION IN GROSS PROFIT WAS CONFIRMED, OUT OF THE ADDITION OF UNSECURED LOAN AMOUNTING TO RS. 4,50,000/-, THE LD. CIT(A) DELETED THE ADDITION OF RS. 1.50 LAKHS. OUT OF TOTAL ADDITION OF RS. 20,38,811/- ON ACCOUNT OF ADDITION TO CAPITAL, THE CIT(A) DELETED ADDITION OF RS. 12 LAKHS. THE CIT(A) ALSO CONFIRMED DISALLOWANCE OF DEPRECIAT ION. BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US, WHERE IN FOLLOWING GROUNDS HAVE BEEN TAKEN :- GROUNDS TAKEN BY THE ASSESSEE : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) WAS NOT JUSTIFIED IN : 1. HOLDING THAT PROVISION OF SECTION 145(3) IS APP LICABLE. -: 5: - 5 2. IN MAINTAINING ADDITION FOR GROSS PROFIT AT RS. 2,66,579/- AND IN NOT DELETING THE TOTAL ADDITION MADE BY THE ASSESSING OFFICER LD. ASSESSING OFFICER . 3. IN NOT DELETING THE ADDITION U/S 68 OF A. RS. 2,00,000/- ON THE NAME OF M/S. M.K. MARKETING. B. RS. 40,000/- ON THE NAME OF KAMLESH DEVI SARAF. C. RS. 30,000 ON THE NAME OF RENU SARAF D. RS. 30,000 ON THE NAME OF SERMAN SARAF E. RS. 8,38,811 ON ACCOUNT OF ADDITION TO CAPITAL ACCOUNT. 4. IN DISALLOWING A PART OF DEPRECIATION AND IN NO T ALLOWING DEDUCTION OF THE TOTAL AMOUNT OF DEPRECIATION AS CLAIMED. 5. IN NOT CANCELLING THE INITIATION OF PENALTY U/S 271(1)(C). 6. IN NOT CANCELLING THE CHARGING OF INTERESTS U/S 234A/234B & 234C. -: 6: - 6 GROUNDS TAKEN BY THE REVENUE : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN :- 1. DELETING THE ADDITION OF RS. 5,78,873/- BY RESTRICTING THE GROSS PROFIT RATE TO 18 % AGAINST GROSS PROFIT RATE OF 19.4 % APPLIED BY THE ASSESSIN G OFFICER OUT OF TOTAL ADDITION OF RS. 8,45,452/- MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF LOW GROSS PROFIT RATE AFTER INVOKING THE PROVISIONS OF SECTIO N 145(3) OF THE INCOME-TAX ACT, 1961, AS BOOKS OF ACCOUNT WERE NOT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY THE ASSESSEE. 2. DELETING THE ADDITION OF RS. 1,50,000/- OUT OF TOTAL ADDITION OF RS. 4,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME-TAX ACT, 1961. 3. DELETING THE ADDITION OF RS. 12,00,000/- OUT OF TOTAL ADDITION OF RS. 20,38,811/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADDITION OF CAPITAL ACCOUNT. -: 7: - 7 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THERE WAS VARIATION IN THE VARIOUS FIGURES OF EXPENDITURE AS PER THE AUDITED ACCOUNTS VIS--VIS F IGURES AS APPEARING IN THE PROFIT AND LOSS ACCOUNT FILED ALON GWITH RETURN OF INCOME. IN VIEW OF THE DEFICIENCY POINTED OUT BY THE ASSESSING OFFICER IN PARA 4 OF HIS ORDER, THE REJEC TION OF BOOKS OF ACCOUNT BY THE ASSESSING OFFICER UNDER PROVISION S OF SECTION 145(3) OF THE ACT, WAS JUSTIFIED. ONCE THE BOOKS OF ACCOUNT ARE REJECTED, THE ASSESSING OFFICER IS TO ESTIMATE THE PROFIT RATE KEEPING IN VIEW SALES, GROSS PROFIT, NET PROFIT ETC . OF EARLIER 2-3 YEARS. COMPARATIVE CHART OF GROSS PROFIT AND NET P ROFIT FOR THE EARLIER YEARS WAS AS UNDER :- 31/03/04 31/03/05 31/03/06 31/03/06 SALE 2,16,86,347/- 2,65,41,299/- 2,73,49,882/- 4,13,48,096/- GROSS PROFIT 41,56,465/- 51,64,724/- 53,93,842/- 71,76,078/- NET PROFIT 84,671/- 2,40,817/- 3,82,607/- 5,18,993/- % G.P. 19.16 % 19.4 % 19.7 % 17.3 % -: 8: - 8 THE ASSESSING OFFICER NOTICED THAT THE NET PROFIT R ATE OF ASSESSMENT YEAR UNDER CONSIDERATION HAS DECREASED T O 17.3 % AS COMPARED TO 19.7 % IN IMMEDIATELY PRECEDING YEAR S AND 19.4 %, 19.16 % IN ASSESSMENT YEARS 2005-06 AND 200 4-05 RESPECTIVELY. THE ASSESSING OFFICER ACCORDINGLY HEL D THAT THE GROSS PROFIT RATIO HAS SHOWN ABNORMAL VARIATION AND AS THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT THE REFORE PROVISIONS OF SECTION 145(3) ARE APPLICABLE. THE AS SESSING OFFICER ACCORDINGLY REJECTED THE BOOKS OF ACCOUNT A ND AVERAGE RATE OF 19.4 % WAS APPLIED ON GROSS PROFIT OF RS. 4 ,13,48,096/- AND ACCORDINGLY ADDITION OF RS. 8,45,542/- WAS MADE . 7. BY THE IMPUGNED ORDER, AFTER HAVING THE FOLLOWING OBSERVATIONS, THE LD. CIT(A) APPLIED THE GROSS PROF IT RATE OF 18 %. ACCORDINGLY, DELETED ADDITION OF RS. 5,78,873/- AND CONFIRMED ADDITION OF RS. 2,66,579/- :- 5.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, OBSERVATION OF ASSESSING OFFICER IN THE ASSESSMENT ORDER AND REMAND REPORT OF THE ASSESSING OFFICER. I HAVE ALSO EXAMINED THE ASSESSMENT RECORDS OF THIS CASE. THIS IS A CASE -: 9: - 9 WHERE PROVISIONS OF SECTION 145(3) HAVE BEEN APPLIED MAINLY ON ACCOUNT OF NON PRODUCTION OF BOOKS OF ACCOUNTS. ADMITTEDLY ALL REQUISITE DETAILS ASKED FOR BY THE ASSESSING OFFICER WERE FILED BY TH E APPELLANT. THE APPELLANT HAS ALSO EXPLAINED AS TO WHY THE BOOKS OF ACCOUNT ON A PARTICULAR TIME COULD NOT BE PRODUCED. ON PERUSAL OF CASE RECORDS IT HAS BEEN FOUND THAT THE ASSESSING OFFICER HAS CONDUCTED ENQUIRIES U/S 133(6) OF I T ACT FROM THE FOLLOWING PARTIES IN RESPECT OF SALES AND PURCHASES MADE FROM THE APPELLANT. 1 . M/S. SYNTHETIC SILICA PRODUCTS, 111/230, HARSH NAGAR, KANPUR. 2. SAMIR SUPPLY PVT LTD. 213, UDYOG BHAWAN, SONAWALA ROAD, GOREGAON. 3. YASHO INDUSTRIES PVT.LTD., ANDHERI WEST. 4. MOHIT ENTERPRISES, 407 MANAS BHAWAN, INDORE. 5. DHANRAJ DISTRIBUTORS PVT LTD., 415 APOLLO TOWERS, 2 M G ROAD, INDORE. -: 10: - 10 6. CHAVI MICRO FINE PRODUCTS, 111/230, HARSH NAGAR, KANPUR. 7. PEETAM TRADERS, CS-L, SHOPPING CENTRE, KOTTAYAM. NO ADVERSE FINDING APPEARS TO HAVE BEEN NOTICED FRO M ANY OF THE MENTIONED PARTIES IN RESPECT OF TRANSACT ION OF SALES AND PURCHASES. IT IS ALSO NOTICED THAT DUR ING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HA S CALLED FOR EXCISE RECORDS IN FORM NO.RG23A AND SUCH RECORDS WAS PRODUCED BY THE APPELLANT VIDE SUBMISSION DATED 13.10.2009. IT IS ALSO NOTICED THA T THE APPELLANT HAS GIVEN SPECIFIC EXPLANATION IN RES PECT OF DECREASE IN GP STATED TO BE ATTRIBUTABLE TO HIKE IN RAW MATERIALS AND SUBSTANTIAL INCREASE IN QUANTUM O F SALES. THE ASSESSING OFFICER HAS NOT DETECTED ANY UNACCOUNTED SALES OR PURCHASES. THE ASSESSING OFFICER HAS ALSO NOT FOUND OUT ANY INSTANCE OF INFL ATION OF EXPENSES. IN THIS BACKGROUND IT IS TO BE SEEN AS TO WHETHER APPLICATION OF 145(3) OF I T ACT WAS JUSTIF IED AND AFTER REJECTION OF BOOKS OF ACCOUNTS THE APPLIC ATION -: 11: - 11 OF RATE OF 19.4 % WAS JUSTIFIED OR NOT. IN THIS CONNECTION IT IS NOTICED THAT AS THE APPELLANT HAS NOT PRODUCED THE REGULAR BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER THEREFORE APPLICATION OF 145(3) O F I. T. ACT WAS JUSTIFIED. HOWEVER, EVEN AFTER REJECTION OF BOOKS OF ACCOUNT THE ASSESSING OFFICER DOES NOT GET UNFETTERED POWERS TO MAKE ASSESSMENT AT ANY INCOME. IT MAY BE NOTICED THAT DURING THE YEAR UNDER CONSIDERATION THE TOTAL SALES ARE REPORTED AT RS. 4,13,48,096/- AS AGAINST SALES OF RS. 2,73,49,882/- IN THE IMMEDIATE PRECEDING YEAR. THE INCREASE IN SALES IS ARRIVED AT 51 % IN COMPARISON TO PRECEDING FINANCIA L YEAR. IN F.Y. 2005-06 THE ASSESSEE HAS SHOWN GP OF 19.70/0. IN THE EARLIER TWO F.Y. I.E. 2003-04 & 04- 05 THE SALES WERE FOR RS. 2.16 CRORE AND 2.65 CRORES RESPECTIVELY ON WHICH GP 19.60 % AND 19.4 % WAS SHOWN. AS THE SALES DURING THE YEAR UNDER CONSIDERATION HAS INCREASED SUBSTANTIALLY THEREFORE THE DECREASE IN GP RATE CANNOT BE RULED OUT. KEEPIN G IN VIEW ALL THE FACTS AND CIRCUMSTANCES DISCUSSED -: 12: - 12 ABOVE IT WILL BE FAIR AND REASONABLE TO APPLY GP RA TE OF 18% ON TOTAL SALES OF RS. 41348096/AND ACCORDINGLY GP IS ARRIVED AT RS.74,42,657/- AS AGAINST RS. 71,76,078/- SHOWN BY THE APPELLANT. THEREFORE, ADDITION OF RS. 2,66,579/- IS CONFIRMED. THE ASSESS EE ACCORDINGLY GET RELIEF OF RS.5,78,873/-. THE GROUN D OF APPEAL IS PARTLY ALLOWED. 8. IT IS CLEAR FROM THE ABOVE FINDINGS OF CIT(A) THAT THE DETAILED INQUIRY WAS CONDUCTED WITH RESPECT TO PURC HASE AND SALE MADE BY THE ASSESSEE. HOWEVER, NO DISCREPANCIE S WERE FOUND IN RESPECT OF THE SAME. IT IS ALSO CLEAR FROM THE ABOVE CHART THAT DURING THE YEAR, THE SALE OF THE ASSESSE E HAS INCREASED BY 51 % AS COMPARED TO THE SALE OF THE IM MEDIATELY PRECEDING YEAR. SINCE THE SALE HAS INCREASED SUBSTA NTIALLY, A MARGINAL DECREASE IN GROSS PROFIT CANNOT BE RULED O UT. AFTER RECORDING DETAILED FINDING, THE CIT(A) HAS TAKEN GR OSS PROFIT RATE AT 18 % AS AGAINST GROSS PROFIT RATE AT 17.3 % SHOWN BY THE ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF CIT(A) FOR SUSTAINING ADDITION ON ACCOUNT OF GROSS PROFIT BY TAKING GROSS PROFIT RATE OF 18 %. -: 13: - 13 9. IN THE RESULT, THE GROUND TAKEN BOTH BY ASSESSEE AN D REVENUE ARE DISMISSED. 10. IN RESPECT OF ADDITION OF UNSECURED LOAN OF RS. 50,000/-, THE LD. CIT(A) HAS DEALT WITH THE ISSUE W ITH RESPECT TO EACH AND EVERY LOAN CREDITOR AFTER CALLING A REM AND REPORT AND HELD AS UNDER :- 6. 5 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, OBSERVATION OF THE ASSESSING OFFICER IN ASSESSMENT ORDER AND ALSO IN THE REMAND REPORT. I HAVE ALSO GONE THROUGH THE CASE RECORDS OF THIS CASE. IT IS NOTICED THAT THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS SPECIFICALLY REQUIRED VIDE ORDER SHEET ENTRY DATED 08.09.2007 TO FILE THE CONFIRMATION IN RESPECT OF UNSECURED LOANS AS ALSO EVIDENCE OF THEIR CREDITWORTHINESS. AS REGARDS, UNSECURED LOANS OF RS.50000/- FROM SHRI GENDALAL SARAF WHO HAPPENS TO BE FATHER OF THE APPELLANT, AFFIDAVIT OF THE CASH -: 14: - 14 CREDITOR WAS FILED AND FURTHER DOCUMENT IN THE FORM OF HIS COPY OF IT RETURN, BANK STATEMENT AND EVIDENCE OF AGRICULTURAL HOLDING WERE FILED. STATEMENT OF SHRI GENDALAL SARAF WAS ALSO RECORDED, IN WHICH HE ADMITTED TO HAVE GIVEN LOANS OF RS. 50000/-. THERE IS NOTHING IN THE STATEMENT OF SHRI GENDALAL WHICH MAY INDICATE THAT THE TRANSACTIONS ARE NOT GENUINE. THE DOCUMENTS FILED BY THE APPELLANT PROVES THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ASSESSING OFFICER MADE THIS ADDITION SIMPLY ON THE BASIS OF ADDITION OF RS.90000/- RNADE IN ASSESSMENT YEAR 2005-06 WHICH WAS CONFIRMED BY THE HON1BLE I.T.A.T. THE OBSERVATION FOUND TO BE FACTUALLY INCORRECT IN AS MUCH AS THE SAID ADDITION WAS SUBSEQUENTLY DELETED BY HON'BLE IT AT INDORE WHILE RECALLING THE EARLIER APPELLATE ORDER WHICH HAS BEEN PASSED IN AN EX-PARTE MANNER. -: 15: - 15 THEREFORE, ADDITION OF RS. 50000/- ON ACCOUNT OF UNSECURED LOAN OF SHRI GENDALAL SARAF CANNOT BE SUSTAINED AND THE SAME IS DELETED. AS REGARDS, UNSECURED LOAN OF RS.1,00,000/- FROM SHRI SANJAY KUMAR SARAF IT IS NOTICED THAT APART FROM FILING VARIOUS DOCUMENTS IN SUPPORT OF SUCH LOAN AMOUNTING TO RS. 1,00,0-00/- AS DISCUSSED ON PAGE 9 (NINE) STATEMENT OF SHRI SANJAY KUMAR SARAF WAS ALSO RECORDED ON 27.11.2009. IN HIS STATEMENT SHRI SANJAY KUMAR SARAF EXPLAINED HIS SOURCE OF INCOME AS ALSO SOURCE OF RS. 1,00,000/- ADVANCED TO THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. COPY OF BANK ACCOUNT OF SHRI SANJAY KUMAR SARAF WAS ALSO FILED IN SUPPORT OF SUCH LOAN TRANSACTION. THERE IS NOTHING ON RECORD WHICH MAY INDICATE THAT THE LOAN TRANSACTIONS ARE NOT GENUINE AND, THEREFORE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH LOAN -: 16: - 16 TRANSACTIONS CAN NOT BE DISPUTED. THEREFORE, THE ADDITION OF RS. 1,00,000/- CANNOT BE SUSTAINED AND THE SAME IS DELETED. AS REGARDS, UNSECURED LOAN OF RS.200000/- FROM M/S M.K. MARKETING, THOUGH IN WRITTEN SUBMISSION IT IS STATED THAT THE CREDITOR HAS FILED AFFIDAVIT AND CONFIRMATORY LETTER BUT. THIS CONTENTION IS NOT FACTUALLY CORRECT. DURING THE ASSESSMENT PROCEEDINGS, DESPITE OF ASSESSING OFFICER'S SPECIFICALLY ASKING FOR FURNISHING CONFIRMATION AND OTHER DOCUMENTARY EVIDENCES IN RESPECT OF LOAN, THE APPELLANT HAS NOT FILED ANY SUCH CONFIRMATION, AFFIDAVIT OR ANY OTHER SUPPORTING DOCUMENT. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS FILED CONFIRMATION OF M/S. M.K. MARKETING. HOWEVER, FURNISHING OF SUCH CONFIRMATION AT APPELLATE STAGE, TANTAMOUNT TO FURNISHING OF ADDITIONAL EVIDENCE. HOWEVER, THE APPELLANT -: 17: - 17 HAS NOT JUSTIFIED THE ADMISSION OF SUCH ADDITIONAL EVIDENCE DURING THE APPELLATE STAGE. IT IS ALSO STATED THAT M/S. M.K. MARKETING FROM WHOM RS.200000/- WERE RAISED AS UNSECURED LOANS IS THE EXISTING CREDITOR OF THE APPELLANT AND THAT IN THE EARLIER YEAR ALSO UNSECURED LOANS HAVE BEEN TAKEN. IN THIS CONNECTION IT MAY BE STATED THAT FOR TAX PROCEEDINGS, PROCEEDINGS, EACH YEAR IS SEPARATE YEAR AND THE FACT THAT THE TRANSACTION OF UNSECURED LOAN IN RESPECT OF ASSESSMENT YEAR 2005-06 WERE FOUND TO BE GENUINE IN CASE OF M/S. M.K. MARKETING MAY NOT NECESSARILY MEAN THAT THE UNSECURED LOAN AMOUNTING TO RS. 2,00,000/- ACCEPTED DURING THIS YEAR UNDER CONSIDERATION WAS ALSO OF EXPLAINED NATURE. AS THE APPELLANT HAS FAILED TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF M/S. M. K. MARKETING IN RESPECT OF RS. 2,00,000/-, THEREFORE, THIS ADDITION DESERVES TO BE SUSTAINED. THE ADDITION OF RS. -: 18: - 18 2,00,000/- IS ACCORDINGLY, CONFIRMED. AS REGARDS, UNSECURED LOAN OF RS. 40,000/- FROM SMT. KAMLESH DEVI SARAF RS.30000/- FROM SMT. RENU SARAF AND RS.30000/- FROM SMT. SEEMA SARAF, IT IS NOTICED THAT THE APPELLANT AHS FILED CONFIRMATION OF ALL SUCH CASH CREDITORS WHICH ARE OTHERWISE FAMILY MEMBERS OF THE APPELLANT. IN RESPECT OF THESE CASH CREDITORS, THE APPELLANT HAS FILED AFFIDAVITS OF ALL THE ABOVE THREE CREDITORS. IT IS ALSO STATED THAT SMT. KAMLESH DEVI SARAF HAS BEEN A PARTNER IN THE FIRM OF M/S SARAF TRADERS AT CHANDERI AND THAT SHE WAS ASSESSED TO TAX UPTO A.Y. 1989-90, SMT. RENU SARAF IN HER AFFIDAVIT HAS SHOWN INCOME OUT OF TUITION IN COACHING AND SMT. SEEMA SARAF HAS ALSO SHOWN INCOME FROM COACHING AND TUITION ETC. THE UNSECURED LOANS ARE STATED TO BE GIVEN THROUGH ACCOUNT PAYEE CHEQUE. IT IS ALSO CLAIMED THAT UNSECURED LOAN FROM THESE LADIES IN EARLIER A Y 2005-06 WERE ADMITTED TO BE GENUINE AND -: 19: - 19 ADDITIONS MADE BY THE A.O. WERE DELETED BY HON'BLE ITAT VIDE ORDER NO. 143/IND/2009 DATED 16.06.2010. ON CAREFUL CONSIDERATION OF ALL MATERIAL FACTS, IT EMERGED THAT AS FAR AS IDENTITY OF THESE LADIES ARE CONCERNED THE SAME IS NOT DISPUTED. HOWEVER, IT MAY BE NOTICED THAT THE APPELLANT HAS NOT FILED ANY CONCRETE EVIDENCE IN RESPECT OF CREDITWORTHINESS AND GENUINENESS OF SUCH LOAN TRANSACTIONS. THE ASSESSING OFFICER HAS SPECIFICALLY REQUIRED THE APPELLANT TO FURNISH COPIES OF THEIR BANK ACCOUNT FROM WHICH IT COULD BE EXAMINED WHETHER THE TRANSACTIONS ARE GENUINE AND ALSO THAT THEY HAVE GENUINE CREDITWORTHINESS. IN THE ABSENCE OF ANY DOCUMENTS TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF SUCH TRANSACTIONS, THE ADDITION MADE BY THE ASSESSING OFFICER CANNOT BE SAID TO BE ON WRONG FOOTINGS. THE APPELLANT HAS FAILED TO DISCHARGE HIS ONUS AS CONTEMPLATED -: 20: - 20 U/S 68 OF IT ACT IN RESPECT OF THESE LOANS. THEREFORE, ADDITION TO THE EXTENT OF RS. 1,00,000/- (RS. 40,000, RS. 30,000/- & RS. 30,000/- ) IS CONFIRMED. THE TOTAL ADDITION OF RS. 300000/- IS CONFIRMED. ACCORDINGLY THE APPELLANT GETS RELIEF OF RS.150000/-. THE GROUNDS OF APPEAL IS PARTLY ALLOWED. 11. IT IS CLEAR FROM THE ABOVE THAT AFTER CALLING FOR R EMAND REPORT, THE LD. CIT(A) CLEARLY RECORDED A FINDING W ITH REGARD TO IDENTITY, GENUINENESS AND CREDITWORTHINESS OF EACH AND EVERY LOAN CREDITOR. ACCORDINGLY, THE ADDITION IN RESPECT OF LOAN OF RS. 50,000/- TAKEN FROM SHRI GENDALAL SARAF, FATHER OF THE ASSESSEE, RS. 1 LAKH TAKEN FROM SHRI SANJAY KUMAR S ARAF WAS DELETED. HOWEVER, THE LOAN TAKEN FROM M.K. MARKETIN G AMOUNTING TO RS. 2 LAKHS, RS. 40,000/- FROM SMT. K AMLESH DEVI SARAF AND RS. 30,000/- FROM SMT. RENU SARAF, R S. 30000/- FROM SMT. SEEMA SARAF WAS CONFIRMED. THE DE TAILED FINDING WAS RECORDED BY THE LD.CIT(A) AT PARA 6.5 O F HIS APPELLATE ORDER HAS NOT BEEN CONTROVERTED BY LD. AU THORIZED -: 21: - 21 REPRESENTATIVE OR LD. SENIOR DR BY BRINGING ANY PO SITIVE MATERIAL ON RECORD. ACCORDINGLY, WE CONFIRM THE SAM E. 12. IN THE RESULT, GROUND TAKEN BY THE ASSESSEE AND REVENUE WITH REGARD TO ADDITION ON ACCOUNT OF UNSEC URED LOAN IS DISMISSED. 13. IN RESPECT OF ADDITION ON ACCOUNT OF INCREASE IN CA PITAL OF RS. 20,38,811/-, THE CIT(A) HAS DELETED THE ADDI TION OF RS. 12 LAKHS IN RESPECT OF AMOUNT COMING FROM THE FATHE R OF ASSESSEE SHRI GENDALAL SARAF, AFTER HAVING THE FOLL OWING OBSERVATIONS :- 8.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AS ALSO THE OTHER RELEVANT FACTS OF T HIS MATTER. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.20,38,811/- ON ACCOUNT OF UNEXPLAINED ADDITION I N THE CAPITAL ACCOUNT OF THE APPELLANT. THIS AMOUNT INCLUDES RS. 12 LAKHS STATED TO BE A TRANSFER ENTRY FROM THE ACCOUNT OF FATHER OF THE APPELLANT SHRI GENDALA L APPEARING IN THE BOOKS OF ACCOUNT OF THE APPELLANT AS UNSECURED LOANS. IT IS STATED THAT THE UNSECURED AC COUNT OF SHRI GENDALAL WAS DEBITED BY RS.12 LAKHS AND THE -: 22: - 22 SAME AMOUNT WAS CREDITED IN THE PARTNERS ACCOUNT. I T IS FURTHER CONTENDED THAT THIS BOOK ENTRY WAS DONE TO MAINTAIN QUASI EQUITY AS PER BANK NORMS TO AVAIL CA SH CREDIT LIMITS. IT IS NOTICED THAT SHRI GENDALAL SAR AF WAS HAVING OPENING CREDIT BALANCE OF RS. 14,92,325/- AS ON 01.04.2006. THIS ACCOUNT WAS DEBITED BY RS.12 LAKHS ON 15.09.2006 BY WAY OF A GENERAL ENTRY AND THE SAM E AMOUNT WAS CREDITED IN THE APPELLANT CAPITAL ACCOUN T. SHRI GENDALAL SARAF IS AN EXISTING CASH CREDITOR AN D THIS AMOUNT OF RS.12 LAKHS WAS NOT RECEIVED DURING THE Y EAR UNDER CONSIDERATION. SHRI GENDALAL SARAF IS ALSO ASSESSED TO TAX AND HE HAS FILED AFFIDAVIT/CONFIRMA TION IN RESPECT OF TRANSACTIONS MADE WITH THE APPELLANT. FURTHER, ON 18.03.2007 THE CAPITAL ACCOUNT OF THE APPELLANT WAS AGAIN DEBITED BY RS.12 LAKHS AND THE CASH CREDIT ACCOUNT OF SHRI GENDALAL SARAF WAS CRED ITED. ALL THESE FACTS WERE AVAILABLE BEFORE THE ASSESSING OFFICER. IT MAY BE NOTICED THAT THE AMOUNT OF RS.12 LAKHS IS INFACT IS NOT A NEW CREDIT AND ONLY A TRANSFER E NTRY FROM THE ACCOUNT OF SHRI GENDALAL SARAF. ADDITION U /S -: 23: - 23 68 OF I T ACT CAN BE MADE ONLY IN RESPECT OF THE AM OUNT. EVEN IF IT PRESUMED THAT THE AMOUNT WAS FOUND CREDI TED IN THE PARTNERS CAPITAL ACCOUNT, THE SOURCE OF THIS AMOUNT IS PROVED FROM THE EXISTING CASH CREDIT ACCO UNT OF SHRI GENDALAL SARAF. THEREFORE, THERE APPEARS TO BE NO MERIT AND JUSTIFICATION IN RESPECT OF ADDITION OF R S. 12 LAKHS. THIS ADDITION IS ACCORDINGLY DELETED. 14. IT IS CLEAR FROM THE ABOVE FINDING THAT RS. 12 LAKH S IS NOT A NEW CREDIT AND ONLY IT WAS A TRANSFER ENTRY F ORM ACCOUNT OF FATHER OF THE ASSESSEE SHRI GENDALAL SARAF. THE SOURCE OF AMOUNT IN THE HANDS OF FATHER WAS CLEARLY PROVED. A CCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF CIT(A) FOR DELETING THE ADDITION OF RS. 12 LAKHS. 15. WITH RESPECT TO REMAINING AMOUNT OF RS. 8,38,811/-, THE CIT(A) HAS CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- AS REGARDS THE REMAINING AMOUNT OF RS. 8,38,811/- , THE APPELLANT HAS STATED THAT AMOUNT OF RS. 2,52,811/- WAS RECEIVED FROM PRIVATE PERSONS, THROUGH ACCOUNT PAY EE -: 24: - 24 ACCOUNT PAYEE CHEQUES AND THAT REMAINING AMOUNT OF RS. 5,86,000/- WAS RECEIVED FROM APPELLANT ON BANK ACCO UNT. IN THIS CONNECTION, IT IS NOTICED THAT THE APPELLAN T WAS SPECIFICALLY REQUIRED TO FURNISH DETAILS OF UNSECUR ED LOANS AND CREDITS IN THE PARTNERS CAPITAL ACCOUNT. EVEN D URING THE REMAND PROCEEDINGS THE ASSESSING OFFICER HAS SPECIFICALLY REQUIRED THE APPELLANT TO PROVE THE ID ENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH TRANSACTIO NS. THE APPELLANT HAS SHOWN PERSONAL LOANS AMOUNTING TO RS.2,52,811/- FROM SIX PERSONS. HOWEVER, NO CONFIRM ATION IN THE REMAND PROCEEDINGS. THE APPELLANT AHS ALSO N OT PROVED THE CREDITWORTHINESS AND GENUINENESS OF SUCH CREDITORS. REMAINING AMOUNT OF RS. 5,86,000/- WAS STATED TO BE RECEIVED FROM APPELLANTS OWN PERSONAL BANK AC COUNT ON DIFFERENT DATES. HOWEVER, THE APPELLANT HAS FAIL ED TO PROVE AS TO FROM WHICH ACCOUNT SUCH AMOUNT WAS TRANSFERRED AND WHAT WAS THE SOURCE OF SUCH FUNDS I N THAT ACCOUNT. THEREFORE, IN RESPECT OF CREDITS OF RS. 8, 38,811/- THE APPELLANT AHS FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S AND -: 25: - 25 THIS ADDITION WAS DEFINITELY WARRANTED U/S 68 OF IN COME- TAX ACT, 1961. THEREFORE, ADDITION AMOUNTING TO RS. 8,38,811/- IS CONFIRMED. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT THE SUM OF RS. 2,52,811/- WAS RECE IVED BY THE ASSESSEE FROM PRIVATE PERSONS THROUGH ACCOUNT P AYEE CHEQUES AND A SUM OF RS. 5,86,000/- WAS RECEIVED FR OM BANK ACCOUNT. THE CIT(A) HAS CATEGORICALLY OBSERVED THAT EVEN DURING REMAND PROCEEDINGS, THE ASSESSEE COULD NOT P ROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH TRANSACTION. SINCE EVEN NO CONFIRMATION WAS FILED I N RESPECT OF SUCH PERSON, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) FOR CONFIRMING ADDITION OF RS. 8,38,811/-. 17. WITH RESPECT TO DISALLOWANCE OF RS. 1,18,682/- ON ACCOUNT OF PAYMENT FOR PENALTY, WE FOUND THAT THE A SSESSING OFFICER INDICATED ONLY BELOW MENTIONED THREE PAYMEN TS WHICH WERE STATED TO BE INCURRED IN VIOLATION OF LAW :- INTEREST ON EXCISE DUTY RS. 15,122/- INTEREST ON SALES TAX RS. 28,954/- PENALTY RS. 506/- TOTAL RS. 44,582/- -: 26: - 26 AS AGAINST THE AMOUNT OF RS. 44,582/-, THE ASSESSIN G OFFICER MADE ADDITION OF RS. 1,82,682/- 18. BEFORE THE CIT(A), IT WAS ARGUED THAT THERE WAS NO BASIS FOR ADDITION OF RS. 1,36,100/-( RS. 1,80,682/ - - RS. 44,582/-_. IT WAS ALSO ARGUED THAT INTEREST ON EXCI SE DUTY AMOUNTING TO RS. 15,122/- AND INTEREST ON SALES TAX RS. 28,954/- CANNOT BE SAID TO BE THE PAYMENT OF PENAL NATURE. IT WAS, THEREFORE, CONTENDED THAT EXCEPT AN AMOUNT OF RS. 506/- ON ACCOUNT OF PENALTY, THE REMAINING ADDITION OF RS . 1280176/- MAY BE DELETED. 19. THE LD. CIT(A) CALLED FOR A REMAND REPORT AND DELET ED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATION S :- 9.4 THE ASSESSING OFFICER IN HIS REMAND REPORT STATED THAT THE FACTS IN RESPECT OF THIS ADDITION W ERE VERIFIED AND THAT EXCEPT ADDITION OF RS. 506/-, THE ARGUMENT OF THE ASSESSEE IN RESPECT OF THE REMAININ G ADDITION ARE ACCEPTABLE. 9.5 I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTANCES RELATING TO THIS ISSUE. IT MAY BE NOT ED THAT AS PER EXPLANATION TO SECTION 37(1), EXPENDITU RE -: 27: - 27 INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENSE AND PROHIBITED BY LAW SHALL NOT BE OF ALLOWABLE NATURE. KEEPING IN VIEW, THIS EXPLANATION , THE EXPENSES OF RS. 506/- ON ACCOUNT OF PENALTY CAN ONLY BE TREATED AS OF DISALLOWABLE NATURE. THEREFOR E, ADDITION OF RS. 506/- IS CONFIRMED OUT OF RS. 1,80,682/-. THE APPELLANT ACCORDINGLY, GETS RELIEF OF RS. 1,80,176/-. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT THE ASSESSING OFFICER HAS WR ONGLY INVOKED THE PROVISIONS OF EXPLANATION TO SECTION 37 (1), IN RESPECT OF VARIOUS PAYMENTS STATED ABOVE. HOWEVER, IN THE REMAND REPORT, THE ASSESSING OFFICER HAS ACCEPTED T HAT ONLY AMOUNT OF RS. 506/- WAS PAID WHICH IS IN CONTRAVENT ION OF EXPLANATION TO SECTION 37(1). ACCORDINGLY, WE DO NO T FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE A DDITION OF RS. 1,80,176/- AND CONFIRMING THE ADDITION TO THE EXTEN T OF RS. 506/- IN TERMS OF FINDING RECORDED AT PARAS 9.4 AND 9.5 OF HIS APPELLATE ORDER. -: 28: - 28 21. THE ASSESSEE IS ALSO AGGRIEVED FOR DISALLOWANCE OF DEPRECIATION OF RS. 7,06,931/-. THE ASSESSING OFFIC ER HAS DISCUSSED THIS ISSUE IN PARA 6 OF THE ASSESSMENT OR DER. THE ASSESSING OFFICER HAS OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION ADDITIONS WERE MADE IN THE FIXED ASSE TS FOR RS. 16,04,739/- UP TO 30.09.2006 AND TO RS. 9,55,240/- AFTER 30.09.2006. THE ASSESSEE WAS HAVING OPENING WDV AS ON 01.04.2006 FOR RS. 1,09,64,677/- AND TOTAL DEPRECIATION OF RS. 7,06,931/- WAS CLAIMED. THE ASSESSEE HAS NOT PRODUCED THE DETAILS OF ASSET PURCHASED DURING THE YEAR UNDE R CONSIDERATION AND IT WAS NOT ESTABLISHED THAT THE B LOCK AS PER OPENING WDV EXISTED OR SOLD AS NO BOOKS OF ACCO UNT WERE PRODUCED. THE ASSESSING OFFICER, THEREFORE, DI SALLOWED WHOLE CLAIM OF DEPRECIATION AMOUNTING TO RS. 7,06,9 31/-. 22. AFTER HAVING THE FOLLOWING OBSERVATIONS, THE LD. CI T(A) HAS DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE AMOUNT OF DEPRECIATION :- HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, OBSERVATION OF ASSESSING OFFICER IN THE ASSESSMENT ORDER AS ALSO IN THE REMAND REPORT. I HA VE -: 29: - 29 ALSO GIVEN DUE CONSIDERATION TO THE CASE LAWS REFER RED AND RELIED UPON BY THE APPELLANT. IT MAY BE SEEN TH AT THE APPELLANT WAS HAVING OPENING WDV AS ON 01.04.2006 AT RS. L,09,64,611/-. DURING THE PERIOD UNDER CONSIDERATION, ADDITION IN THE DEPRECIABLE AS SETS WAS SHOWN FOR RS. 16,04,739/- AND RS. 9,55,240/-. THE APPELLANT HAS CLAIMED TOTAL DEPRECIATION OF RS. 7,06,931/- WHERE AS THE ASSESSING OFFICER HAS DISALLOWED THE WHOLE CLAIM OF THE DEPRECIATION BY STATING THAT NO BOOKS OF ACCOUNT WERE PRODUCED . DEPRECIATION U/S 32 OF THE IT ACT IS ALLOWABLE TO THE ASSESSEE IN RESPECT OF DEPRECIABLE ASSETS OWNED WHO LLY OR PARTLY BY THE ASSESSEE AND USED FOR THE PURPOSE OF BUSINESS OR PROFESSION. THE TWO ESSENTIAL REQUIREME NTS FOR CLAIM OF DEPRECATION ARE ACCORDINGLY, OWNERSHIP OF THE ASSETS AND USE OF SUCH ASSETS FOR THE BUSINESS PURPOSES. IT IS NOTICED THAT THE APPELLANT HAS DURI NG THE YEAR UNDER CONSIDERATION CARRIED OUT ITS NORMAL MANUFACTURING ACTIVITIES FOR WHICH SALES AND PROFIT ETC HAVE BEEN SHOWN. IN THIS BACKGROUND, THERE CAN NOT BE -: 30: - 30 ANY DISPUTE ON THE OWNERSHIP AND USE OF THOSE DEPRECIABLE ASSETS WHICH WERE EXISTING AS ON 01.04.2006 AMOUNTING TO RS. 1,09,64,677/-. HOWEVER, THE APPELLANT HAS NOT FILED ANY EVIDENCE IN RESPECT OF OWNERSHIP OF ASSETS SHOWN TO BE ACQUIRED DURING THE YEAR UNDER CONSIDERATION AMOUNTING TO RS. 16,04,739 /- AND RS. 9,55,240/-. EVEN DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS FAILED TO FURNISH AN Y DOCUMENTARY EVIDENCES IN SUPPORT OF SUCH NEW ADDITIONS IN DEPRECIABLE ASSETS AS ALSO TO PROVE TH AT SUCH ITEMS OF DEPRECIABLE ASSETS WERE USED FOR THE BUSINESS PURPOSES. THEREFORE, THE DEPRECIATION CLAI MED OF THE APPELLANT IN RESPECT OF ITEMS OF ADDITION DU RING THE YEAR UNDER CONSIDERATION AMOUNTING TO RS.16,04,739/- AND RS.9,55,240/- CANNOT BE ALLOWED. HOWEVER, THE APPELLANT IS ENTITLED FOR DEPRECIATION ON THE OPENING WDV OF ASSETS AS ON 01.04.2006 AMOUNTIN G TO RS. L,09,64,677/-. THE ASSESSING OFFICER IS ACCORDINGLY, DIRECTED TO RE-COMPUTE THE CLAIM OF TH E DEPRECIATION AS PER DISCUSSION MADE ABOVE. -: 31: - 31 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT AFTER CALLING REMAND REPORT FROM T HE ASSESSING OFFICER, THE CIT(A) HAS RESTORED THE MATT ER BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO A LLOW DEPRECIATION ON THE OPENING WDV OF ASSETS AS ON 1.4 .2006. IN RESPECT OF THE ASSETS ACQUIRED DURING THE YEAR, THE CLAIM OF DEPRECATION WAS NOT CONSIDERED AS THE ASSESSEE HAS NOT FILED VOUCHERS FOR ACQUISITION OF THESE ASSETS BEFORE THE LOWER AUTHORITIES. DURING THE COURSE OF HEARING BEFORE US , THE ASSESSEE HAS FILED COPIES OF ALL THESE VOUCHERS OF VARIOUS ASSETS ACQUIRED DURING THE YEAR. SINCE THESE VOUCHERS ARE PRODUCED FOR THE FIRST TIME BEFORE US, WE RESTORE THE ISSUE FOR CONSIDERING ASSESSEES CLAIM OF DEPRECIATION ON THE ASSETS OF R S. 16,04,739/- AND RS. 9,55,240/- ACQUIRED DURING THE YEAR. IN THE PAPER BOOK, THE ASSESSEE HAS PLACED ALL THESE V OUCHERS FROM PAGE NO. 97 TO 154 OF PAPER BOOK. PRIMA FACIE, IT APPEARS THAT THE ASSETS WERE ACQUIRED DURING THE YEAR. HOWE VER, WHILE ALLOWING CLAIM OF DEPRECIATION, THE ASSESSING OFFIC ER IS ALSO REQUIRED TO VERIFY USE OF ASSETS FOR THE PURPOSE OF BUSINESS, -: 32: - 32 WHICH IS A PRE-CONDITION FOR ALLOWING CLAIM OF DEPR ECIATION. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO V ERIFY THESE VOUCHERS AND TO CONSIDER AFRESH ASSESSEES CLAIM FO R DEPRECIATION ON THE ASSETS ACQUIRED DURING THE YEAR UNDER CONSIDERATION. WE DIRECT ACCORDINGLY. 24. IN THE RESULT, THE APPEALS OF THE REVENUE IS DISMIS SED, WHEREAS APPEAL OF ASSESSEE IS ALLOWED IN PART FOR S TATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED : 12 TH SEPTEMBER, 2012. CPU* 10129