CENZER INDUSTRIES LTD, MUMBAI V. ADDL CIT 5(1), MUMBAI

ITA 1811/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3520 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: PARESH M SHAH
• Keywords: Gift; Business expenditure; Opportunity of being heard; Additional evidence; Reason to believe
• Section: 115JB; 37(1)

Judgement Text

ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 1 OF 24 IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.1811/MUM/2012 (ASSESSMENT YEAR: 2006-07) CENZER INDUSTRIES LTD, 2 ND FLOOR, OVAL HOUSE, 63 BRITISH HOTEL LANE, OFF NAGINDAS MASTER ROAD FORT MUMBAI 400001 PAN: AABCC 4342 F VS. ADDL. CIT 5(1) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI PARESH M. SHAH DEPARTMENT BY: SHRI GIRIJA DAYAL, DR DATE OF HEARING: 18/04/2013 DATE OF PRONOUNCEMENT: 12/06/2013 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN ASSESSEES APPEAL AGAINST THE ORDERS OF THE CIT(A)- 9 MUMBAI DATED 17.01.2012. THE ISSUE IN THE APPEAL IS WITH REFERENCE TO CLAIM OF EXPENSES OF ` .4,77,58,412 MADE IN RESPECT OF FREE DISTRIBUTION OF GOLD COINS. ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING CLAIM OF EXPENSE OF ` .4,77,58,412 MADE IN RESPECT OF FREE DISTRIBUTION O F GOLD COINS WITHOUT APPRECIATING THAT SAME IS INCURRED WH OLLY FOR THE PURPOSE OF BUSINESS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN IGNORING INHUMANE, ILLEGAL DELIBERATE ACTIONS OF TH E LEARNED AO. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 2 OF 24 3. PRAYER: A) THE APPELLANT PRAYS THAT THE DISALLOWANCE OF ` .4,77,58,412 MADE IN RESPECT OF EXPENSE INCURRED ON FREE DISTRIBUTION OF GOLD COINS BE DELETED. B) STEPS MAY BE DIRECTED AGAINST THE LEARNED AO 2. IN THE COURSE OF THE PRESENT PROCEEDINGS GROUND NO. 2 WAS NOT PRESSED. 3. BRIEFLY STATED, THE ASSESSEE COMPANY WAS ENGAGED IN THE FINANCIAL YEAR RELEVANT TO THE AY 2006-07 IN THE BU SINESS OF MANUFACTURING OF WATCHES AND CALCULATORS AND ALSO E NGAGED IN TRADING OF MOBILES. IT FURNISHED RETURN OF INCOME F OR THE AY 2006-07 ON 30.11.06 DECLARING TOTAL INCOME OF ` .NIL BY CLAIMING DEDUCTION UNDER SECTION 80IC OF THE ACT AT ` .1,65,30,520 AND DISCLOSED BOOK PROFIT UNDER SECTION 115JB OF THE ACT AT ` .1,61,30,608. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, AO NOTICED FR OM THE AUDIT REPORT THAT ASSESSEE HAD DEBITED GROSS SELLING AND DISTRIBUTION EXPENSES OF ` .9,53,21,476. AO VIDE OFFICE LETTER DATED 24.12.08 ASKED ASSESSEE TO FURNISH FULL DETAILS OF GROSS EXP ENSES INCURRED, EXPENSES REIMBURSED AND NET EXPENSES BOOKED UNDER S ELLING AND DISTRIBUTION EXPENSES AND ALSO ALLOWABILITY OF THE SAME. ASSESSEE VIDE LETTER DATED 30.12.2008 EXPLAINED THAT IT INCU RRED VARIOUS SELLING AND DISTRIBUTION EXPENSES OF ` .9,53,21,476. ASSESSEE GOT CONTRIBUTION FROM SAGEM FRANCE OF ` .7,68,99,073, M/S PALMONE ASIA PACIFIC LTD OF ` .2,05,001 AND FROM M/S JAPAN CBN OF ` .1,30,981 AGGREGATING TO ` .7,72,35,055. THE ASSESSEE COMPANY DEDUCTED SUCH CONTRIBUTION OF ` .7,72,35,055 FROM GROSS EXPENSES OF ` .9,53,21,476 AND CLAIMED THE NET EXPENSES AT ` .1,80,86,421 WHICH WAS REFLECTED IN THE PROFIT & LOSS A/C UNDER SCHEDU LE-12 OF SELLING AND DISTRIBUTION EXPENSES. AO OBSERVED THAT NO EVID ENCE RELATING TO DISCOUNT SALES, SALES INCURRED AND COMMISSION OF SA LES WERE PRODUCED AT THE TIME OF HEARING. IN THE ABSENCE OF NECESSARY ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 3 OF 24 EVIDENCES, AO ALLOWED EXPENSES OF ` .75,74,101 FOR WHICH THE CORRESPONDING COPIES OF BILLS WERE FILED BY ASSESSE E ALONG WITH A LETTER DATED 30.12.2008 AS DISCUSSED BY AO ON PAGE 3 OF THE RELEVANT ASSESSMENT ORDER. THE REMAINING EXPENSES O F ` .8,77,97,375 ( ` .9,53,21,476 ` .75,74,101) WAS DISALLOWED AS UNEXPLAINED EXPENSES AND ADDED TO THE INCOME OF ASS ESSEE. THERE ARE OTHER ADDITIONS MADE WITH WHICH WE ARE NOT CONC ERNED AS THE GROUND IS ONLY WITH REFERENCE TO THE CLAIM OF EXPEN DITURE ON DISTRIBUTION OF GOLD COINS. 4. BEFORE THE LEARNED CIT(A), ASSESSEE FURNISHED ADDIT IONAL EVIDENCE ON THE REASON THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED AND ASSESSEE HAD TO COMPILE THE IN FORMATION FROM VARIOUS BRANCHES LOCATED IN AND OUT OF MAHARASHTRA. THIS MATTER WAS REMANDED TO AO WHO INITIATED INQUIRIES AND AO S UBMITTED 1 ST REMAND REPORT DATED 9.12.2010 AND THE 2 ND REMAND REPORT DATED 24.02.2011 EXAMINING VARIOUS PERSONS AND OTHER DETA ILS. IN NUT SHELL, IT WAS REPORTED BY AO THAT THE CLAIM OF PURC HASING GOLD OF 68 KILOS FOR MAKING 3400 NUMBERS OF GOLD COINS AT 20 G MS EACH FOR INSERTING IN MOBILE PHONES AS A PROMOTIONAL SCHEME WAS NOT SUPPORTED BY ANY EVIDENCE OF PUBLICITY OF THE SCHEM E, THAT M/S OPAL INDUSTRIES FROM WHOM IT WAS STATED TO HAVE BEE N PURCHASED HAS NO EXPERTISE, LICENSE, EXPERIENCE TO CONVERT GO LD BARS INTO COINS AND THE PURCHASE OF GOLD BARS WAS LATER TO SUPPLY O F COINS IN THE FIRST LOT, THAT THERE WAS NO EVIDENCE OF TRANSPORTA TION OF SUCH HUGE QUANTITY AND VALUE OF GOLD/COINS FROM PLACE TO PLAC E AND STATEMENTS OF SRI SUBHASH GUJAR AND STATEMENT OF DIRECTOR OF C OMPANY DO INDICATE THAT THE WHOLE ARRANGEMENT WAS ONLY TO CLA IM EXPENDITURE WHICH WAS BOGUS. ASSESSEE WAS GIVEN AN OPPORTUNITY TO COUNTER THE COMMENTS AND AFTER CONSIDERING ALL THE DOCUMENTS, R EPORTS, OBJECTIONS, THE LEARNED CIT (A) ULTIMATELY CONCLUDE D THAT THE CLAIM OF EXPENDITURE OF THE ABOVE AMOUNT OF ` .4,77,58,412 WAS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND TO ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 4 OF 24 THE EXTENT OF SAME, THE CIT (A) CONFIRMED THE DISAL LOWANCE BY OBSERVING AS UNDER: 5.4.4 I HAVE CAREFULLY AND DISPASSIONATELY CONSIDE RED THE FACTS AND CIRCUMSTANCES AND AFTER GOING THROUGH THE REMAND REPORTS OF THE LAO AND THE COUNTER COMMENTS GIVEN BY THE APPELLANT, THE FOLLOWING POINTS EMERGE FOR CONSIDERATION: PURCHASE OF GOLD FROM OPAL INDUSTRIES WHO IS INTO MANUFACTURING OF WALL CLOCKS. OPAL INDUSTRIES DID NOT HAVE ANY KNOWLEDGE OF DEALING IN GOLD CENZER CARRIED OUT TRANSACTIONS IN GOLD WORTH ` .4.77 CRORES WITH SHRI SUBHASH GUJAR OF OPAL INDUSTRIES WITHOUT ASCERTAINING HIS CREDITWORTHINESS. IT WAS A ONE TIME TRANSACTION OF GOLD FOR OPAL INDUSTRIES. CENZER CHOSE TO PAY ADVANCE OF MORE THAN A CRORE OF RUPEES TO OPAL INDUSTRIES WHO DID NOT HAVE REQUISIT E KNOWLEDGE AND ABILITY TO EXECUTE TRANSACTION IN GOL D. THE PROPRIETOR OF OPAL INDUSTRIES DOES NOT EVEN REMEMBER THE PARTY FROM WHOM THE GOLD WAS PURCHASED. NEITHER DOES HE REMEMBER TO WHOM THE GOLD WAS SUBSEQUENTLY SOLD. THE PROPRIETOR OF OPAL INDUSTRIES ALSO DOES NOT REMEMBER HOW THE DELIVERY WAS TAKEN/GIVEN. ALLEGATION BY DIRECTOR OF CENZER THAT PROPRIETOR OF OPAL INDUSTRIES IS OF UNSOUND MIND, IS TOTALLY BASELESS. THE DIRECTOR OF CENZER KNEW THE PROPRIETOR OF OPAL INDUSTRIES FOR THE PAST 15 YEARS. THE DIRECTOR OF CENZER ALSO KNEW THE DIRECTOR OF M/ S RIDDHI SIDDHI BULLIONS LTD SINCE BOTH ARE FROM THE SAME NATIVE PLACE. M/S RIDDHI SIDDHI BULLIONS LTD SOLD GOLD BARS TO OP AL AND OPAL INDUSTRIES SOLD THE SAME IN FORM OF FOLD COINS TO CENZER. OPAL INDUSTRIES DID NOT HAVE EXPERTISE IN CONVERSION OF GOLD BARS TO GOLD COINS. OPAL INDUSTRIES SOLD GOLD COINS TO CENZER ON 14.06.2005 EVEN THOUGH IT RECEIVED THE GOLD BARS TW O DAYS LATER. THE TRANSACTION SEEMS BOGUS SINCE THERE WAS NO OPENING STOCK OF GOLD. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 5 OF 24 THE LAST DELIVERY OF GOLD BARS (30KG) TAKEN ON 31.1.2006 AT MUMBAI AND ON THE SAME DATE GOLD COINS WERE DELIVERED BY OPAL TO CENZER AT BHIWANDI. NO STOCK REGISTER MAINTAINED BY ASSESSEE FOR GOLD. BANK STATEMENT OF OPAL RECEIVED FROM THE ADDL. DIT (INV.) PUNE DOES NOT INDICATE ANY DEBIT FOR CONVERS ION CHARGES OF GOLD. ON THE THREE TRANSACTIONS OF GOLD. OPAL INDUSTRIES HAS EARNED A PROFIT OF 0.11% ON THE SALE PROCEEDS WHICH DO NOT EVEN INCLUDE GOLD CONVERSION CHARGES. NO PRUDENT BUSINESSMAN WOULD OPT FOR SUCH A LOW PROFIT MARGIN FOR A ONE TIME TRANSACTION. NONE OF THE INVOICES ARE SIGNED BY THE PERSON WHO HAS TAKEN HAND DELIVERY OF GOLD. DURING THE STATEMENT RECORDED ON OATH, DIRECTOR OF CENZER DID NOT REMEMBER THE PERSON WHO HAD TAKEN HAND DELIVERY OF THREE HIGH VALUE CONSIGNMENTS. NO EVIDENCES WERE PRODUCED BY ASSESSEE FOR HAVING LAUNCHED ANY ADVERTISEMENTS FOR GOLD SCHEME. ASSESSEE FAILED TO PRODUCE DOCUMENTARY EVIDENCE TO INDICATE THAT PRIOR APPROVAL OF SAGEM SA WAS OBTAINED FOR ADVERTISEMENT OF THE PRODUCT. ASSESSEES CLAIM FOR INCREASE IN SALES CANNOT BE SA ID TO BE DIRECTLY ATTRIBUTABLE TO THE LAUNCH OF GOLD C OIN SCHEME PARTICULARLY SINCE ASSESSEE FAILED TO PRODUC E THE EVIDENCES TO THAT EFFECT. ASSESSEE FAILED TO IDENTIFY EVEN A SINGLE CUSTOMER WHO WON ANY GOLD COIN UNDER THE SAME. 5.4.5 HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE AND KEEPING IN MIND THE LOGICAL CONSIDERAT ION AND PROBABILITIES OF HUMAN BEHAVIOR AS PROPOUNDED B Y THE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. C IT 214 ITR 801 (SC), THE APPELLANTS CLAIM OF EXPENSES OF 68 KG OF GOLD VALUED AT THAT TIME AT ` .4,77,58,412 HAS NOT BEEN FULLY ESTABLISHED. THERE IS NO DOUBT THAT TO CLAIM AN ITEM OF EXPENDITURE UNDER SECTION 37(1) OF THE ACT, THE BURDEN LIES ON ASSESSEE. IN THE PRESENT CA SE, THERE ARE PRIMA FACIE FACTS AND SURROUNDING CIRCUMSTANCES AND THE MATERIAL EVIDENCES AGAINST TH E FREE DISTRIBUTION OF 68 KGS OF GOLD TO GENERAL PUBL IC. THE APPELLANT HAS FAILED TO IDENTIFY EVEN A SINGLE CONS UMER WHO WON GOLD COINS UNDER THE FREE GOLD COIN SCHEME OF THE APPELLANT. THE TRANSACTION ABOUT PURCHASE OF GO LD ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 6 OF 24 COINS VS. GOLD BARS FROM A WALL CLOCK MANUFACTURER AND TRADER HAVE BEEN QUESTIONED BY THE LAO. HE HAS ALSO DOUBTED THE FREE DISTRIBUTION OF 68 KGS OF GOLD COI NS TO UNKNOWN CONSUMERS. THE APPELLANT HAS FAILED TO FURN ISH THE NECESSARY EVIDENCES IN SUPPORT OF SUCH EXPENSES HAVING BEEN EXCLUSIVELY AND WHOLLY INCURRED FOR THE PURPOSE OF APPELLANTS BUSINESS. AS LAID DOWN BY TH E HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL V S. CIT (SUPRA), APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASON TO BELIEVE THAT THE APP ARENT IS NOT REAL AND THAT THE TAXING AUTHORITIES ARE ENT ITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPL YING THE TEST OF HUMAN PROBABILITIES. THE APPELLANT DOES NOT APPEAR TO HAVE CONCRETE, INFALLIBLE AND SUFFICIENT EVIDENCES TO ESTABLISH THE GENUINENESS OF PURCHASE OF 68 KGS OF GOLD COINS WORTH ` .4,77,58,412 NOR THE FREE DISTRIBUTION OF SUCH 68 KG OF GOLD COINS TO THE GEN ERAL PUBLIC, WITHOUT ANY WIDE SPREAD DISSEMINATION OF INFORMATION PARTICULARLY IN MAHARASHTRA AND INDIA A T LARGE. IT CANNOT BE SAID THAT THE EXPLANATION OFFER ED BY THE APPELLANT HAS BEEN REJECTED UNREASONABLY. AFTER CONSIDERING SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES, IT IS HELD THAT THE SA ID EXPENSES OF ` .4,77,58,412 HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. HENCE THE SAME IS DISALLOWED. TO SUM UP, OUT OF DISALLOWANCE OF ` .8,77,97,375, DISALLOWANCE OF ` .4,74,587+4,77,58,412 ARE CONFIRMED. REVISED GROUNDS OF APPEAL NO.5 & 6 (ISSUE NO.2 & 3) ARE PARTLY ALLOWED. 5. BEFORE US THE LEARNED COUNSEL PLACED PAPER BOOK AND ALSO REJOINDER DATED 30.08.2012 AND AN AFFIDAVIT OF SHRI SUBHASH GUJAR DATED 01.01.2013 AND ALSO PRAYER FOR ADDITIONAL EVI DENCE VIDE LETTER DATED 18.04.2013 INCLUDING THE DOCUMENTS AND SUBMIS SIONS IN ANOTHER PAPER BOOK CONTAINING 228 PAGES. 6. IT WAS THE CONTENTION OF THE LEARNED COUNSEL THAT A O WAS NOT CORRECT IN DISALLOWING THE ENTIRE EXPENDITURE WHICH WAS NOT CLAIMED. IT WAS THE SUBMISSION THAT ASSESSEE HAS ONLY CLAIME D AN AMOUNT OF ` .1,80,86,421 AS EXPENDITURE UNDER THE HEAD SELLING AND DISTRIBUTION EXPENSES, WHEREAS AO DISALLOWED AN AMO UNT OF ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 7 OF 24 ` .8,77,97,375 OUT OF WHICH THE LEARNED CIT(A) CONFIR MED ` .4,77,58,412 AS NOT FULLY ESTABLISHED. IT WAS THE C ONTENTION THAT THE AUTHORITIES WERE WRONG IN DISALLOWING THE EXPEN DITURE WHICH WAS NOT CLAIMED. IT WAS THE SUBMISSION THAT MOST OF THE EXPENDITURE ON ADVERTISEMENT WAS REIMBURSED BY THE FOREIGN COMPANIES SAGEM FRANCE AND M/S PALMONE ASIA PACIFIC LTD TO AN EXTENT OF ` .7,11,04,074. THEREFORE, ASSESSEE NOT CLAIMED THE EXPENDITURE AND IN VIEW OF THAT DISALLOWANCE OF THE SAID LARGE SUM OF AMOUNT DOES NOT ARISE WHEN THERE IS NO CLAIM. 7. COMING TO THE MERITS OF THE EXPENDITURE CLAIMED, IT WAS SUBMITTED THAT AS A MARKETING STRATEGY, ASSESSEE DE CIDED TO INSERT 20G OF GOLD COIN IN SOME OF THE SETS BEING TRADED B Y ASSESSEE SO THAT THE CUSTOMER GET THE GIFT AND ASSESSEE WILL HAVE LA RGE TURNOVER SO AS TO INCREASE THE SALES AND PROFIT. HE REFERRED TO T HE AGREEMENT WITH THE SUPPLIER (SAGEM FRANCE) AND ALSO THE REASON WHY LARGE AMOUNT WAS REIMBURSED BY THE PRINCIPAL COMPANY M/S SAGEM. HE ALSO REFERRED TO THE ADDITIONAL EVIDENCE FILED AFRESH ON 15.04.2013 IN SUPPORT THAT ASSESSEE HAS A GODOWN IN BHIWANDI AND THE GOODS WERE SUPPLIED IN THREE SETS AND THE DISPATCH REPORT S/ INVOICES OF VARIOUS SETS TRANSFERRED WERE PLACED IN THE SETS. H E FURTHER REFERRED TO THE AFFIDAVIT GIVEN BY SHRI SUBHASH GUJAR THAT H E HAS UNDERTAKEN CONVERSION OF GOLD BARS INTO GOLD COINS AND HOW THE TRANSACTION WAS WAS IMPLEMENTED. THE LEARNED COUNSEL ALSO REFERRED TO THE COMPUTER/ WEB SITE PRINT OF OPAL INDUSTRIES LTD TO SUBMIT THAT THE SAID COMPANY IS A VERY FAMOUS COMPANY IN THE MARKET ING OF WATCHES ETC. HE THEN REFERRED TO THE PAYMENT DETAIL S FOR THE GOLD COINS AND THE INVOICES OF GOLD BAR OBTAINED BY ASSE SSEE TO PROVE ITS CREDENTIALS AND THE BILLS RAISED BY THE OPAL INDUST RIES FOR SUPPLY OF GOLD COINS. HE THEN REFERRED TO THE INCENTIVES RECE IVED FROM THE FOREIGN COMPANY TO SUBMIT THAT THIS EXPENDITURE WAS REIMBURSED. WITH REFERENCE TO THE PRAYER MADE IN THE ADDITIONAL EVIDENCE, THE LEARNED COUNSEL ALSO PRODUCED A BOX OF CELL PHONE I N A PACKET AND ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 8 OF 24 ALSO A 20G GOLD COIN (NOT THE SAME COIN SUPPOSED TO HAVE INSERTED) TO DEMONSTRATE HOW THESE GOLD COINS CAN BE INSERTED IN THE BOX AND HOW THE CLAIM IS GENUINE. 8. THE LEARNED DR HOWEVER, REFERRED TO THE ACCOUNTING PRACTICES FOLLOWED BY ASSESSEE TO SUBMIT THAT THE CLAIM OF RE IMBURSEMENT IS NOT CORRECT AS THE DISCOUNT GIVEN FOR EACH PIECE OF CELL PHONE SOLD CANNOT BE CONSIDERED AS REIMBURSEMENT OF ADVERTISEM ENT EXPENDITURE AND ASSESSEE HAS SO PREPARED THE ACCOUN TS SO AS TO CLAIM ONLY THE NET AMOUNT IN THE PROFIT & LOSS A/C. WITH REFERENCE TO THE MERITS OF THE CLAIM, HE REFERRED TO THE FIND INGS OF AO AND THE CIT (A) TO SUBMIT THAT M/S OPAL INDUSTRIES LTD DOES NOT HAVE ANY LICENSE FOR CONVERSION OF GOLD BARS INTO GOLD COINS AND TO HOW IT WAS NOT POSSIBLE TO MANUFACTURE GOLD COINS OF MORE THAN 19 KGS ON 14.06.2005 WHEN PURCHASE OF GOLD BARS WHICH ACTUALL Y HAPPENED TWO DAYS LATER IE. ON 16.06.2005 AND ALSO THERE IS NO EVIDENCE ABOUT EITHER THE ADVERTISEMENT OF THE SCHEME OR INS ERTION OF GOLD COIN IN THE SETS OR EVEN SUPPLY OF COINS. THE DRS CONTENTION WAS THAT GOLD PURCHASED IN BULK WENT TO PUNE WITHOUT BI LL AND GOT CONVERTED INTO COINS AND DELIVERY IN BHIWANDI ON TH E SAME DAY AND INSERTION IN RANDOM SETS OF MOBILE PHONES SO AS TO START THE SCHEME ON 15.06.2005 STATED TO BE THE DATE ON WHICH THE SO CALLED SCHEME WAS ANNOUNCED WAS SIMPLY NOT BELIEVABLE. IN THE ABS ENCE OF ANY EVIDENCE OF EITHER THE SCHEME OR ADVERTISEMENT OR D ETAILS OF ANY CUSTOMERS HAVING WON THE COINS, THE ENTIRE SCHEME I S A BOGUS ONE SO AS TO CLAIM THE AMOUNT AS DEDUCTION. HE THEN REF ERRED TO VARIOUS ADDITIONAL EVIDENCES NOW PLACED IN THE RECORD TO SU BMIT THAT THESE ARE NOT PLACED BEFORE AO AND SHOULD NOT BE ADMITTED . HE ALSO REFERRED TO THE PAYMENT DETAILS PLACED IN THE PAPER BOOK TO SUBMIT THAT EVEN BEFORE GOLD WAS PURCHASED FROM M/S RIDDHI SIDDHI BULLIONS LTD, THE AMOUNTS WERE PAID TO OPAL INDUSTR IES FOR PURCHASE OF GOLD COINS WHICH IS NOT PROBABLE ON THE GIVEN FACTS OF THE CASE. HE THEN REFERRED TO THE ALLEGATION OF UNS OUND MIND MADE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 9 OF 24 BY THE ASSESSEE COMPANY DIRECTOR ABOUT THE STATEMEN T GIVEN BY SHRI SUBHASH GUJAR BEFORE ADDL.DIT PUNE AND ALSO MA DE SUBMISSIONS ON THE AFFIDAVIT NOW FILED FROM THE SAI D SRI GUJAR TO SUBMIT THAT ASSESSEES EARLIER STATEMENTS WERE CONT RADICTORY TO EACH OTHER. HE SUBMITTED THAT THE ENTIRE TRANSACTION IS A MAKE BELIEF TRANSACTION SO AS TO CONCEAL THE INCOME. 9. IN REPLY, THE LEARNED COUNSEL COUNTERED THAT THE AF FIDAVIT EXPLAINS THE POSSIBILITY OF CONVERSION OF GOLD INTO COINS AND PUNE IS NOT VERY FAR OFF PLACE AND IN BHIWANDI THERE WAS EN OUGH SPACE FOR THE COMPANY SO AS TO RECEIVE THE GOLD COINS AND INS ERT IN THE SETS. HE ALSO SUBMITTED THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT, RELIED UPON BY THE REVENUE DOES NOT APPLY TO THE FACTS OF THE CASE. HE THEN SU BMITTED THAT THERE ARE CONTRADICTIONS IN THE STATEMENT RECORDED WHEREA S M/S OPAL INDUSTRIES IS A FIRM, THE STATEMENT RECORDED BY THE ADDL. DIT INDICATE PROPRIETARY CONCERN AND A HIGHLY INCONSIST ENT STATEMENT CANNOT BE RELIED UPON. HE REFERRED TO THE AFFIDAVIT AND THE FACT THAT ASSESSEE IN ORDER TO COOPERATE WITH THE DEPARTMENT PRODUCED THE BILLS OF OPAL INDUSTRIES PURCHASE OF GOLD AND THE O NUS STANDS DISCHARGED. 10. ON A QUERY BY THE BENCH, IT WAS INFORMED THAT THE P RICE OF EACH HANDSET VARY FROM ` .2500 TO ` .6500 AND GOLD COIN OF 20G AT THE RELEVANT POINT OF TIME COSTS ABOUT ` .12,000 AND IN SUPPORT EXPLAINED THAT IT IS POSSIBLE TO KEEP A 20G GOLD CO IN IN THE SET OF ABOUT 500 GMS WITHOUT DETECTION AND SO THE CLAIM OF ASSESSEE IS NOT A MAKE BELIEVE. IT HAD ADVERTISED THE SCHEME AND AS SESSEE DID PASS ON THE GOLD COIN TO THE CUSTOMERS IN SOME MOBILE SE TS. HE FURTHER SUBMITTED THAT EVEN THOUGH THE REVENUE RELIED ON TH E STATEMENT OF SHRI GUJAR, NO CROSS EXAMINATION WAS PERMITTED. HE REFERRED TO THE INCREASE IN SALES SO AS TO CLAIM THE EXPENDITURE AS GENUINE BUSINESS EXPENDITURE. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 10 OF 24 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND EXAMIN ED THE DOCUMENTS PLACED ON PAPER BOOK. WE DEAL WITH EACH O F CONTENTIONS. 11.1 ADDITIONAL EVIDENCE AND ITS RELEVANCE: EVEN THOUGH THERE WAS A PRAYER FOR ADMISSION OF ADDITIONAL EVID ENCE, WE ARE OF THE OPINION THAT ADMISSION OF ADDITIONAL EVIDENCE D OES NOT REQUIRE IN THIS CASE AS THESE DOCUMENTS ARE NOTHING BUT THE VARIOUS PURCHASE BILLS AND DISPATCH OF GOODS TO VARIOUS BRA NCHES/DEALERS SUPPOSED TO BE IN THREE TRANCHES AND AGREEMENT AND PHOTOS OF HAVING GODOWN AT BHIWANDI. SINCE THERE IS NO DISPUT E WITH REFERENCE TO THE SALE OF THE HANDSETS, THE DISPATCH OF HANDSETS PRESENTLY PLACED ON RECORD WITH VARIOUS INVOICES DO ES NOT INDICATE THAT THE HANDSETS DO INCLUDE 20G GOLD COIN. THERE I S ALSO NO DISPUTE WITH REFERENCE TO THE FACT THAT ASSESSEE WAS HAVING A GODOWN IN BHIWANDI FOR STORAGE OF THE HANDSETS IN BOX FORM. T HEREFORE, EVIDENCE WITH REFERENCE TO THE EXISTENCE OF A GODOW N IN BHIWANDI AND DISPATCH IN VARIOUS SETS TO THE DEALERS/ PLACES CAN ONLY SUPPORT THE ASSESSEES BUSINESS OF TRADING IN MOBILE SETS, BUT DOES NOT ESTABLISH THAT ASSESSEE HAD INSERTED GOLD COINS IN THE SETS, WHICH WILL BE EXAMINED LATER PART OF THE ORDER ON THE BAS IS OF OTHER EVIDENCES. SUFFICE TO SAY THAT THE AGREEMENT, PURCH ASE BILLS, PHOTOGRAPHS OF THE GODOWN, BRANCH TRANSFER DETAILS PLACED IN THE PAPER BOOK FROM PAGES 28 TO 218 ARE NOT AT ALL RELE VANT FOR THE ISSUE. PAGE NOS.219 TO 222 ARE PRAYER FOR ADDITIONA L EVIDENCES, 223 TO 228 ARE FURTHER SUBMISSIONS WHICH CANNOT BE CONS IDERED AS ADDITIONAL EVIDENCES. PAGE NOS.22 TO 27 ARE STATEME NT ON OATH WHICH WAS ALREADY ON RECORD AS IT WAS RECORDED BY A O IN THE COURSE OF REMAND PROCEEDINGS. THE AGREEMENT WITH THE GODOW N OWNER AT PAGE 28 TO 33 ALSO DOES NOT ESTABLISH THE CREDENTIA L OF THE CLAIM EXCEPT THAT THERE IS A GODOWN IN BHIWANDI WHICH WAS USED FOR THE PURPOSE OF STOCKING THE GOODS AND BY PLACING THESE AGREEMENTS ON RECORD, NOTHING ELSE IS ESTABLISHED OTHER THAN THAT ASSESSEE HAS A GODOWN. THE ADDITIONAL EVIDENCE NOW PLACED ON RECOR D CANNOT BE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 11 OF 24 CONSIDERED AS RELEVANT AS THESE DO NOT HAVE ANY BEA RING ON THE ISSUE UNDER CONSIDERATION. THEREFORE, THE ADDITIONA L EVIDENCE FROM PAGE NOS.28 TO 228 ARE NOT TAKEN ON RECORD. CONTENTION WHETHER THE ENTIRE AMOUNT CAN BE DISALLO WED : 12. IT WAS THE CONTENTION OF ASSESSEE THAT ASSESSEE DID CLAIM ONLY AN AMOUNT OF ` .1,80,86,421 IN THE PROFIT & LOSS A/C AND AO DISALLOWED THE ENTIRE GROSS EXPENDITURE. THE DETAIL S OF THE CLAIM AS EXTRACTED BY THE LEARNED CIT (A) IN PAGE 5 OF HIS O RDER IS AS UNDER: ACCOUNTING HEAD GROSS ( ` .) REIMBURSEMENT ( ` .) NET (DR. TO PROFIT & LOSS A/C ( ` .) ADVERTISEMENT 8,38,54,961 7,71,04,074 67,50,887 SALES PROMOTION 2,82,418 1,30,981 1,51,437 COMMISSION 28,41,650 - 28,14,650 DISCOUNT 39,94,866 - 39,94,866 SALES INCENTIVE 43,47,581 - 43,47,581 9,53,21,476 7,72,35,055 1,80,86,421 REIMBURSEMENT FROM SAGEM SA CMB ` . 7,68,99,073 REIMBURSEMENT FROM PALMONE ASIA PACIFIC LTD ` . 2,05,001 ` . 7,71,04,074 THUS GROSS EXPENDITURE UNDER SELLING & DISTRIBUTION EXPENSES ` . 9,53,21,476 LESS: TOTAL REIMBURSEMENT ` .7,72,35,055 ` .1,80,86,421 EXPENSES BILL SUBMITTED DURING ASSESSMENT ` .75,74,101 DISALLOWANCE IN ASSESSMENT ORDER GROSS EXPENSES AS ABOVE ` .9,53,21,476 LESS BILLS PRODUCED ` . 75,74,010 ` .8,77,47,375 ADD. MISTAKE IN AO ` . 50,000 ` .8,77,97,375 13. THE ABOVE TABLE INDICATE THAT ASSESSEE CLAIMED REIMBURSEMENT OF ` .7,71,04,074 TOWARDS ADVERTISEMENT OUT OF WHICH AN AMOUNT OF ` .7,68,99,073 WAS FROM SAGEM. IT WAS THE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 12 OF 24 CONTENTION THAT THIS AMOUNT IS REIMBURSEMENT OF THE ADVERTISEMENT EXPENDITURE AND ACCORDINGLY, SINCE THE EXPENDITURE WAS INCURRED ON BEHALF OF THE THIRD PARTY AND ASSESSEE HAS NOT CLAI MED, THE SAME CANNOT BE DISALLOWED UNDER THE PROVISIONS OF SECTIO N 37(1). THIS CONTENTION WAS EXAMINED. THE AGREEMENT WITH M/S SAG EM SA IS PLACED IN THE PAPER BOOK AT PAGE NO.31 TO 47. AS SE EN FROM THE AGREEMENT, ASSESSEE WAS GIVEN $ 5 TOWARDS ADVERTISE MENT OF THE SAGEM PRODUCTS ON THE BASIS OF THE ORDERS PLACED. A SSESSEE RELIED ON CLAUSE 4.4 WHICH IS AS UNDER: 4.4 IN ORDER TO SUPPORT DISTRIBUTOR IN THE PERFORMANCE OF ITS OBLIGATIONS AND IN THE CARRYING OUT OF ITS OPERATIONS HEREUNDER, SAGEM SA UNDERTAKES: - TO MAKE AVAILABLE TO DISTRIBUTOR, FREE OF CHARGE, A REASONABLE QUANTITY OF LEAFLETS AND OTHER PRODUCT DOCUMENTATION IF ANY, SUCH DOCUMENTATION SHALL BE FURNISHED IN ENGLISH IN THE FORM NORMALLY USED BY SAGEM SA IN ITS OWN MARKETING EFFORTS. DISTRIBUTOR SHALL BE RESPONSIBLE FOR PROVIDING TRANSLATION OF PRODUCT DOCUMENTATION, UNDER ITS OWN LIABILITY AND AT ITS COSTS. THE COPYRIGHT IN ANY TRANSLATION SHALL VEST IN SAGEM SA. - THE EVENT THAT DISTRIBUTOR SHALL BE ASSIGNED RESPONSIBILITY FOR MAINTENANCE, TO RECEIVE SUCH QUALIFIED PERSONNEL AS DISTRIBUTOR MAY DESIGNATE IN ITS PREMISES, IN ACCORDANCE WITH SUCH PROGRAM AND UNDER SUCH CONDITIONS AS MAY BE JOINTLY DETERMINED BY THE PARTIES HERETO. IN SUCH CASES, DISTRIBUTOR SHALL PAY FOR ALL TRAVEL AND ACCOMMODATION EXPENSES OF ITS PERSONNEL. - TO PROVIDE A MARKETING BUDGET TO THE DISTRIBUTOR, BASED ON THE ORDERS, FOR PROMOTION OF THE PRODUCTS IN THE TERRITORY. THE AMOUNT WILL BE CALCULATED ACCORDING TO THE NUMBER OF PIECES EFFECTIVELY DELIVERED (SEE APPENDIX 3). FURTHER, APPENDIX-3 SPECIALLY MENTIONS THE FOLLOWIN G CONDITIONS: APPENDIX 3: MINIMUM QUANTITIES PER ORDER MINIMUM ANNUAL QUANTITIES FOR EACH MODELS TILL SEPTEMBER, 04. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 13 OF 24 ENTRY LEVEL: TOTAL 1,02,000 PIECES MID AND HIGH LEVEL: TOTAL: 18,000 PIECES CO-MARKETING BUDGET: ADVERTISING AND PROMOTION BUDGET OF 50,000 USD SHAL L BE PROVIDED FOR EVERY 10,000 PIECES PURCHASED DISPATCHED WITH: - AT LEAST 8,500 MIX ENTRY LEVEL PRODUCTS - AT LEAST 1,500 MIX MID AND HIGH LEVEL PRODUCTS THIS BUDGET SHALL PROPORTIONATELY INCREASE IN SAME RATIO ACCORDING TO THE QUANTITIES EFFECTIVELY DELIVERED THIS INDICATES THAT FOR EACH 10,000 PIECES, ASSESSE ES BUDGET WAS PROVIDED 50,000 USD I.E. $ 5 PER PIECE ON THE BASIS OF WHICH ASSESSEE HAS ACCOUNTED FOR THE INCOME DURING THE YE AR ON THE BASIS OF THE ORDERS PLACED WITH SAGEM AS UNDER: MONTH ORDER OF MOBILES PLACE WITH SEGAM MARKETING BUDGET AS PER AGREEMENT (IN $ PER HANDSET ORDER) AMOUNT RECEIVABLE (US $) EXCHANGE RATE AMOUNTS BOOKED (RECEIVABLE FROM SEGAM) AMOUNT RECEIVED DURING THE YEAR 2005- 06 APR 05 27,350 5.00 1,36,750 44.00 60,17,000 2,99,814 MAY05 28,750 5.00 1,43,750 44.00 63,25,000 1,08,37,891 JUN 05 28,620 5.00 1,43,100 44.00 62,96,400 59,57,836 JUL05 33,200 5.00 1,66,000 44.00 73,04,000 62,58,046 AUG05 64,200 5.00 3,21,000 44.00 1,41,24,000 SEP05 2,30,10,391 OCT 05 38,000 5.00 1,90,000 44.00 83,60,000 1,42,07,350 NOV05 4,000 5.00 20,000 44.33 8,86,600 86,90,193 DEC05 50,000 5.00 2,50,000 44.63 1,11,57,020 JAN06 8,86,600 MAR06 DIFFERENCE IN CURRENCY TOTAL 2,20,363 67,48,690 14. $ 5 PER SET REIMBURSED TO ASSESSEE AS ADVERTISEMENT COST IS A SORT OF DISCOUNT GIVEN ON THE QUANTITY OF PURCHASE ORDER AND ASSESSEE SHOULD HAVE ACCOUNTED FOR THE RECEIPTS SEP ARATELY BASED ON THE ORDERS PLACED. AS SEEN FROM THE TERMS AND C ONDITIONS OF THE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 14 OF 24 AGREEMENT, IT IS TO BE NOTED THAT THERE IS A FIXED ADVERTISEMENT BUDGET OF USD 5 PER HANDSET WHICH WAS GIVEN TO ASSE SSEE ON THE BASIS OF MINIMUM ORDER OF ENTRY LEVEL, MID AND HIGH LEVEL PRODUCTS AS PER APPENDIX-3 AND THERE IS NO CORRELATION WITH REFERENCE TO THE PARTICULAR ADVERTISEMENT OR PROMOTION BUDGET UNDERT AKEN BY ASSESSEE. THE AMOUNT OF ` .7,68,96,811 RECEIVED FROM SAGEM IS NOTHING BUT USD 5 PER HANDSET PROVIDED TO ASSESSEE FOR THE PURPOSE OF ADVERTISEMENT WHICH SHOULD HAVE BEEN SHO WN AS A SEPARATE RECEIPTS IN THE BOOKS OF ACCOUNT AS THE AD VERTISEMENT EXPENDITURE WAS ON THE ASSESSEE COMPANY ONLY. THE A MOUNT OF USD 5 CANNOT BE CONSIDERED AS REIMBURSEMENT OF THE ADVE RTISEMENT EXPENDITURE INCURRED BY ASSESSEE AS THERE IS NO COR RELATION BETWEEN THE EXPENDITURE INCURRED BY ASSESSEE TO THAT OF REI MBURSEMENT. THESE TWO ARE SEPARATE TRANSACTIONS, THE RECEIPT IS BASED ON THE NUMBER OF SETS ORDERED, WHEREAS THE ADVERTISEMENT I S AT THE DISCRETION OF THE ASSESSEE COMPANY AND SO, THE SAME CANNOT BE CONSIDERED AS REIMBURSEMENT. ASSESSEE SHOULD HAVE A CCOUNTED THE RECEIPTS AND EXPENDITURE SEPARATELY. WE ARE OF THE CONSIDERED OPINION THAT AO IS CORRECT IN EXAMINING THE EXPENDI TURE INCURRED BY ASSESSEE WHICH IS ON ASSESSEES ACCOUNT ONLY AS PER THE AGREEMENT. THEREFORE, THE CONTENTION THAT ONLY THE NET AMOUNT WAS CLAIMED CANNOT BE ACCEPTED. EVEN THOUGH THE ENTRIES ARE SO MADE SO AS TO CLAIM ONLY THE NET AMOUNT AS EXPENDITURE DEBITED TO P&L ACCOUNT, AO IS RIGHT IN EXAMINING THE ENTIRE EXPENDITURE AS THE ADVERTISEMENT AND MARKETING EXPENDITURE IS ON ASSES SEES ACCOUNT AS PER THE AGREEMENT WITH SAGEM. THIS CONTENTION O F ASSESSEE IS ACCORDINGLY REJECTED. CLAIM OF EXPENDITURE ON GOLD COIN SCHEME: 15. COMING TO THE GOLD COIN SCHEME, IT WAS THE CONTENTI ON THAT ASSESSEE UNDERTOOK THE SCHEME JEETO INDIA GOLD AN D INSERTED 20 GMS OF GOLD COIN IN RANDOM SETS SO AS TO INCREASE T HE SALES BY ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 15 OF 24 BENEFITTING THE CUSTOMERS. THE EVIDENCE IN SUPPORT IS THE PHOTO COPY OF BROCHURE, THE THREE INVOICES ISSUED BY M/S OPAL INDUSTRIES, PUNE TOWARDS PURCHASE OF 3400 GOLD COINS OF 20 GMS EACH. DURING COURSE OF PROCEEDINGS BEFORE CIT(A), ASSESSEE ALSO SUBMITTED THE THREE INVOICES OF PURCHASE OF GOLD FROM M/S RIDDHI SIDDHI BULLIONS LTD, MUMBAI BY M/S OPAL INDUSTRIES. ASSESSEE ALSO S UPPORTED THE CLAIM BY EVIDENCING PAYMENTS AND INCREASE IN SALES. THIS CONTENTION OF ASSESSEE WAS EXAMINED IN THE COURSE O F REMAND REPORTS BEFORE AO BY CIT(A). THE REPORTS OF AO AND REASONS GIVEN BY CIT(A) NEED NOT BE EXTRACTED AGAIN HERE. THE AO AND CIT(A) DID NOT AGREE WITH ASSESSEE CLAIM AS THEY ARE OF THE OPINIO N THAT ASSESSEE CLAIM WAS NOT SUBSTANTIATED SO AS TO ALLOW AS AN EX PENDITURE U/S 37(1). THE LACK OF EXPERIENCE IN DEALING GOLD COINS BY M/S OPAL INDUSTRIES, SALE OF GOLD COINS BEFORE PURCHASE OF G OLD BARS, SUPPLY ON SAME DAY, NO EVIDENCE OF CONVERSION, NO EVIDENCE OF TRANSPORTATION OR DELIVERY, NO EVIDENCE OF SCHEME O F GIFT ETC ARE MAIN REASONS. 16. WE HAVE EXAMINED THE CONTENTIONS RAISED BEFORE US. SUFFICE TO SAY THAT THERE ARE MANY INCONSISTENCIES IN ASSESSEE S CLAIM: A) ASSESSEE FURNISHED BILLS FROM OPAL INDUSTRIES AND I N THE COURSE OF PRESENT PROCEEDINGS PLACED DOCUMENTS OF OPAL IND USTRIES TO SUBSTANTIATE THAT THE SAID COMPANY WAS IN THE BUSIN ESS OF WATCH MAKING AND DISTRIBUTION, BUT AS SEEN FROM THE BILLS AND THE AFFIDAVIT FILED, OPAL INDUSTRIES LTD HAS NO CONNECT ION WITH THE OPAL INDUSTRIES. DDIT, PUNE INQUIRED FROM MR. SUBHA SH GUJAR WHO STATED THAT IT IS A PROPRIETARY CONCERN AND ASS ESSEE FILED AN AFFIDAVIT FROM SHRI GUJAR STATING IT IS A FIRM. AS SEEN FROM THE SEQUENCE OF EVENTS, ASSESSEE DID NOT FURNISH ANY EV IDENCE AT THE TIME OF THE ASSESSMENT PROCEEDINGS MAY BE DUE TO SH ORTAGE OF TIME, BUT COULD FURNISH ONLY IN THE COURSE OF APPEL LATE PROCEEDINGS BEFORE THE CIT (A). AS SEEN FROM THE R ECORD OF THE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 16 OF 24 CIT (A) THE LETTER SENT ORIGINALLY WAS RETURNED UN- SERVED AND ASSESSEE HAS FURNISHED REVISED ADDRESS AND AO HAD T O REFER TO ADIT PUNE FOR NECESSARY EXAMINATION. EVEN THOUGH AS SESSEE CONTENDS THAT MR. GUJAR IS ACTING ON BEHALF OF THE FIRM AND HAS FILED AN AFFIDAVIT IN THIS REGARD, WHETHER THE RETU RN OF INCOME WAS FILED BEFORE THE INQUIRIES STARTED OR AFTER THE INQUIRIES WAS ALSO NOT ON RECORD. THEREFORE, SINCE ASSESSEE ALSO RELIED ON THE AFFIDAVIT OF MR. GUJAR, THE UNDISPUTED FACT IS THAT MR.GUJAR HAS ACCEPTED THE SUPPLY OF GOLD COIN TO ASSESSEE AS PER THE BILLS PLACED ON RECORD. IN THIS REGARD, THE AFFIDAVIT FIL ED BY THE SAID GUJAR IS AS UNDER: AFFIDAVIT I, SHRI SUBHASH GUJAR SON OF PRABHAKAR GUJAR AGED 5 9 YEARS OF FLAT NO. A-8, DELICIA, UTOPIA CHS, WANAWAD I, PUNE - 411040 HEREBY DECLARE ON OATH AND SOLEMN AFFIRMATIONS AS UNDER: 1. THAT THIS AFFIDAVIT IS EXECUTED BY ME IN MY CAPACIT Y AS PARTNER OF M/S OPAL INDUSTRIES, A REGISTERED PARTNERSHIP FIRM SITUATED AT GAT NO 1194/1195, WADK I, PUNE SASWAD ROAD, TAL. HAVELI, PUNE - 412308, MAHARASHTRA. 2. THAT WE ARE MANUFACTURER & TRADER IN WALL CLOCKS, PARTS OF WALL CLOCK, WATCHES, ARTIFICIAL STONES, GEMS, PE ARLS AND WE HAD UNDERTAKEN TRANSACTION IN PURCHASE AND SALE OF GOLD IN F.Y 2005-2006 WITH RIDDHI SIDDHI BULLIONS LTD (RSBL) AND CENZER INDUSTRIES LIMITED (CIL). 3. THAT UNDER INCOME TAX ACT, PAN NO. OF OPAL INDUSTRI ES IS AAAF03409M, TAN NO. IS PNE001258F, UNDER V AT ACT, TIN NO. IS 27260006207V AND SERVICE TAX ASSESSEE CO DE IS AAAF03409MST001. 4. IN THE FINANCIAL YEAR ENDING 31 ST MARCH 2006, WE HAD PURCHASED GOLD BARS FROM RIDDHI SIDDHI BULLIONS LTD (RSBL) OF RS. 4,77,05,330/ - FOR TRADING. 5. THAT WE HAVE CONVERTED THE ENTIRE STOCK OF SUCH GOL D BARS INTO GOLD COINS AND SOLD IT TO CENZER INDUSTRIES LIMITED (CIL) OF 20-B SUGRA BUILDING, ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 17 OF 24 2 ND FLOOR, 16 TRIBHUVAN ROAD, MUMBAI 400004 6. THAT THE PROCESS OF CONVERSION OF GOLD BARS INTO GO LD COINS WAS CONDUCTED AT OUR PREMISES AT GAT NO 1194/1195, WADKI VILLAGE, PUNE SASWAD ROAD, TAL. HAVELI, PUNE, MAHARASHTRA. 7. THAT FOR CONVERSION PROCESS, WE RECEIVED GOLD BARS FROM RSBL AND LOADED ON A BOILING VESSEL (SANGDI) WHICH LIQUEFIED THE GOLD BARS. THIS LIQUEFIED GOLD WAS THEN POURED INTO ROUND MOULDS. ALMOST INSTANTLY GOLD COINS WERE FORMED. 8. THAT WE HAD NOT PAID ANY CHARGES TO ANYONE FOR CONVERSION OF GOLD BARS INTO GOLD COIN. 9. THAT IT IS IMPRACTICAL AND IMPOSSIBLE TO REMEMBER A S TO HOW THE DELIVERY OF GOLD BARS WAS TAKEN OR GOLD COINS WERE GIVEN. 10. THAT OUR TRANSACTIONS AND DOCUMENTATION WITH OUR SUPPLIER AND CUSTOMER ARE AS PER MARKET PRACTICE. 11. THAT WE HAVE DISCLOSED AND DECLARED OUR TRANSACTION WITH RSBL AND CIL IN OUR INCOME TAX AND SALES TAX RETURNS. 12. THAT WE AS BUSINESSMAN CONDUCT MANUFACTURING & TRADING IN ANY GOODS WHERE WE FEEL THERE IS A CHANCE OF MAKING PROFIT. AS REGARDS TECHNICAL KNOWLEDGE OF DEALING IN GOLD IS CONCERNED, I WOULD LIKE TO MENTION THAT WE ARE MANUFACTURER AND TRADER S IN WALL CLOCKS WHICH CONTAIN PLATES, SUCH PLATES AR E OF MANY TYPES, SOME PLATES CONTAINS GOLD, SILVER AND OTHER RAW MATERIAL, SO I POSSESS SUFFICIENT KNOWLED GE FOR DEALING IN GOLD. 13. THAT WE HAVE BUILT UP STRONG GOODWILL IN MARKET SUC H THAT PRUDENT BUSINESSMAN ARE AWARE OF OUR CREDIT WORTHINESS. WE MAY TRADE IN A PARTICU LAR PRODUCT AGAIN AND AGAIN IF WE FIND THE ACTIVITY PROFITABLE. FREQUENCY OF TRADING IN A PARTICULAR PRODUCT IS ENTIRELY A COMMERCIAL DECISION. 14. THAT ON CERTAIN OCCASIONS, WE HAD RECEIVED DELIVERY OF GOLD BARS FROM OUR SUPPLIERS, BEFORE RECEIVING INVO ICE. THIS PRACTICE OF DOCUMENTATION AND PHYSICAL DELIVER Y OF GOLD IS ACCEPTED MARKET PRACTICE. THERE ARE TWO TYPES OF DEALINGS (SAUDA) IN GOLD BUSINESS ONE WHER E RATE IS FIXED AT THE TIME OF DELIVERY AND OTHER WHE RE ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 18 OF 24 RATE IS FIXED AFTER THE DELIVERY AND INVOICE IS PRE PARED AFTER THE RATE IS FIXED. EVEN MANY BANKS DEALS IN S UCH TYPE OF GOLD SAUDAS. 15. THAT AS THE DELIVERY OF GOLD AND ITS CORRESPONDING INVOICE DO NOT ALWAYS GO TOGETHER, MERE SIGNATURE O N INVOICE DOES NOT MEAN THAT THE SIGNATORY HAS TAKEN DELIVERY OF GOLD. VERIFIED THAT THE ABOVE CONTENTS OF THIS AFFIDAVIT ARE TRUE AND CORRECT AND I BELIEVE THE SAME TO BE TRUE. I HAVE MADE THIS AFFIDAVIT WITHOUT ANY FORCE OR COERC ION AND HAVE UNDERSTOOD THE SAME. SD/ (SUBHASH PRABHAKAR GUJAR) PLACE: PUNE DATE: 02/01/2013 B) THIS AFFIDAVIT PLACED IN THE COURSE OF THE PRESEN T PROCEEDINGS WAS NOT PLACED BEFORE AO OR BEFORE THE LEARNED CIT (A). IT IS NOT UNDERSTANDABLE HOW SHRI SUBHASH GUJAR, RESIDENT OF PUNE GAVE AN AFFIDAVIT BEFORE THE NOTARY AT THANE. BE THAT AS IT MAY, THE CONTENTS OF THE AFFIDAVIT DO INDICATE THAT SHRI GUJ AR HAS UNDERTAKEN PURCHASE OF GOLD FOR TRADING, CONVERSION INTO GOLD COINS AND IMMEDIATELY DELIVERED TO ASSESSEES GODOW N IN BHIWANDI. C) WHAT IS SURPRISING IS THAT THE AFFIDAVIT DOES NOT C LARIFY HOW MANY ROUND MOULDS ASSESSEE HAD FOR PREPARING THE GO LD COINS. AS CAN BE SEEN FROM THE DETAILS, THE FIRST LOT OF GOLD COINS ON 14.06.2005 ARE ABOUT 950 NOS. WEIGHING 20G EACH TOT ALING TO 19 KGS. THE SECOND LOT OF 950 COINS WEIGHING 19 KG IS ON 05.07.2005. THE THIRD LOT OF 1500 GOLD COINS WEIGHING 30KGS IS ON 31.01.2006. TO PREPARE SO MANY COINS ON THE SO CALLED MOULDS IN THE FACTORY PREMISES ON SANGDI ON A SINGLE DAY IS NOTHING BUT I MPOSSIBLE CONSIDERING THE FACT THAT THEY ARE MANUFACTURED ON THE SAME DAY AND DELIVERED TO THE BHIWANDI GODOWN WITHOUT ANY LI CENSE, WHEREWITHAL AND ALSO EXPERTISE OR EVIDENCING SIMIL AR ACTIVITY TO ANY OTHER PARTY. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 19 OF 24 D) THE AFFIDAVIT IS ALSO VIDE PARA 14 CONTENDS THAT TH EY HAVE RECEIVED GOLD BARS FROM THE SUPPLIERS BEFORE RECEIV ING INVOICE. THIS PRACTICE OF DOCUMENTATION AND PHYSICAL DELIVERY OF GOLD IS STATED TO BE AN ACCEPTED MARKET PRACTICE. THIS IS NOTHING BUT CAMAFLOUGING THE DISCREPANCY FOUND OUT BY THE DEPARTMENT ON INQU IRY. ON 14.06.2005 WHEN ASSESSEE SUPPOSED TO HAVE CONVERTED 19KGS OF GOLD BAR INTO 950 GOLD COINS, THERE IS NO PURCHASE OF GOLD BY OPAL INDUSTRIES WHERE AS THE RELEVANT BILL FROM RIDDHI S IDDHI BULLIONS LTD WAS DATED 16.06.2005. IT IS NOT A SMALL QUANTITY OF GOLD TO CONSIDER THAT THEY HAVE DELIVERED WITHOUT AN INVOICE. KEEPIN G IN MIND THE FACT THAT M/S RIDDHI SIDDHI BULLIONS OPERATED IN MU MBAI AND MR. GUJARS FACTORY IS IN PUNE, HOW THE GOLD OF 19KGS C AN BE TRANSPORTED FROM MUMBAI TO PUNE AND BACK TO BHIWANDI IN SHORT S PAN WITHOUT THE BILLS PASSING THROUGH OCTROI IN ALL THE CITIES IS NOT EXPLAINED. HAD IT BEEN IN MUMBAI ONLY NEXT TO SHOP OF RIDDHI S IDDHI BULLIONS, ONE CAN DISCOUNT ASSESSEES STORY, BUT TRANSPORTING 19 KGS OF GOLD FROM MUMBAI TO PUNE, GETTING CONVERTED BARS INTO CO INS WITHOUT ANY PRIOR EXPERIENCE AND WITHOUT ANY LICENSE OR WITHOUT ANY NECESSARY INFRASTRUCTURE OTHER THAN THE SO CALLED SANGDI/MOUL D AS EXPLAINED IN THE AFFIDAVIT IS NOT BELIEVABLE. LIKEWISE THE CO NVERSION OF OTHER GOLD BARS IN SECOND AND THIRD LOTS ON THE SAME DATE IS NOT BELIEVABLE. MORE OVER THERE ARE NO CONVERSION CHARG ES AND HOW MANY PERSONS WORKED IN THIS WAS NOT EXPLAINED. THE AFFIDAVIT, A SELF SERVING ONE, DO SKIP THE POINT OF TRANSPORTATION FR OM MUMBAI TO PUNE AND TO BHIWANDI STATING THAT IT IS IMPRACTICAL AND IMPOSSIBLE TO REMEMBER AS TO HOW THE DELIVERY OF GO LD BARS WAS TAKEN OR GOLD COINS WERE GIVEN. THERE ARE MORE INCONSISTENCIES IN THE AFFIDAVIT THAN WHAT IT EXPLAINED. NO RELIANC E CAN BE PLACED ON THIS AFFIDAVIT TO ACCEPT THE ASSERTIONS/ AVERMENTS MADE THERE IN. SINCE ASSESSEE FILED SO CALLED AFFID AVIT FROM SHRI GUJAR WITH OUT EXPLAINING THE REASON FOR HIS STATEM ENTS BEFORE AUTHORITIES AND CONTRADICTIONS NOW TO THE EARLIER S TATEMENTS, ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 20 OF 24 THE SAME ALSO CAN NOT BE RELIED ON. THE AFFIDAVIT B EING FILED BY ASSESSEE ALSO GOES AGAINST THE ARGUMENT THAT CROSS EXAMINATION WAS NOT PERMITTED. E) AO EVEN THOUGH HAS DISALLOWED THE ENTIRE EXPENDI TURE INITIALLY, IN THE COURSE OF REMAND PROCEEDINGS ON T HE BASIS OF THE EVIDENCE PLACED ON RECORD ACCEPTED THAT ASSESSEE HA D ADVERTISED MEET YOUR STAR WITH CELEBRITIES LIKE MR. SANJAY D UTT, MR. SUNIL SHETTY, ETC. AND THE EXPENDITURE TO THAT EXTENT WAS ALLOWED. EVEN THOUGH SOME OF THE PHOTOCOPIES OF THE ADVERTISEMENT PLACED ON RECORD WAS WITH REFERENCE TO THE OTHER ADVERTISEMEN TS UNDERTAKEN BY ASSESSEE INCLUDING PRESS RELEASES ABOUT SAGEM PR ODUCTS, BUT THE ADVERTISEMENTS PER SE OF GOLD COIN SCHEME WAS NOT AVAILABLE, EXCEPT A PHOTO COPY PLACED ON RECORD ON JETHO INDIA OFFER IN WHICH THERE IS AN OFFER OF GOLD WITHOUT MENTIONING THE SI ZE OR QUANTITY OF THE GOLD. THIS OFFER WAS VALID FROM 15.06.2005 TILL THE STOCKS LASTS. AS CAN BE SEEN FROM THE COPY OF BROCHURE, THERE IS ONLY A PHOTOCOPY, WITHOUT ASCERTAINING WHETHER IT IS AN ADVERTISEMENT IN NEWS PAPER OR HAND BILLS WITH DEALERS. THERE ARE OTHER ADVERTI SEMENTS WHICH ARE PLACED ON RECORD WHICH SHOWS CELEBRITIES FOR PROPAG ATING THE SCHEMES, BUT NOWHERE IN THOSE ADVERTISEMENTS THE GO LD SCHEME WAS SPECIFIED OR ANNOUNCED. IF ASSESSEE WERE TO REALLY LAUNCH THE GOLD COIN SCHEME IN ORDER TO PROPAGATE, THERE WOULD BE C ERTAINLY ADVERTISEMENTS, PRESS REPORTS ETC., TO SUPPORT THE CONTENTION. NOTHING WAS PLACED ON RECORD EXCEPT A PHOTOCOPY OF THE SO CALLED BROCHURE, THE GENUINENESS OF WHICH IS NOT ESTABLISH ED. F) ANOTHER ASPECT WHICH IS ALSO SURPRISING IS THAT THE SCHEME IS VALID FROM 15.06.2005 ACCORDING TO ASSESSEE TILL TH E STOCK LASTS. IF THE SCHEME WAS TO START FROM 15 TH JUNE, HOW THE STOCKS ARE DISPATCHED ONLY ON 15 TH JUNE IN THE FIRST LOT OF GOODS WAS NOT EXPLAINED. MOREOVER AS SEEN FROM THE ABOVE, ON THE BASIS OF REIMBURSEMENT OF USD 5 PER PIECE, ASSESSEE HAS NOT EVEN PLACED ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 21 OF 24 ANY ORDER FOR PURCHASE OF GOODS AFTER DECEMBER 05, WHEREAS THEY WERE SUPPOSED TO HAVE INSERTED 1500 GOLD COINS AFTE R 31.01.2006 FOR THE SCHEME AVAILABLE UPTO MARCH, 2006 AS SUBMIT TED. THERE ARE INCONSISTENCIES IN THE ENTIRE SCHEME WHICH IS NOT E XPLAINED PROPERLY. G) NOW COMING TO THE ARGUMENT THAT THEY HAVE INSERTED THE GOLD COINS IN THE HANDSETS, EVEN HERE THERE IS NO EVIDEN CE. FIRST OF ALL WHETHER A HANDSET CAN BE OPENED AND A COIN CAN BE I NSERTED ITSELF IS DOUBTFUL, BECAUSE 10 HANDSETS COMING IN ONE PACK ET AND THESE PACKETS ARE DISTRIBUTED AS SUCH, AS CAN BE SEEN FRO M THE BRANCH TRANSFER DETAILS PLACED ON RECORD AS A PART OF ADDI TIONAL EVIDENCE. THE NEXT INCONSISTENCY IN ASSESSEES EXPLANATION WA S WITH REFERENCE TO THE NUMBER OF HANDSETS AVAILABLE AT THE TIME OF THE SO CALLED INSERTION OF GOLD COINS. ASSESSEE HAS FURNISHED THE FOLLOWING STATEMENTS AS PART OF THE WRITTEN SUBMISSIONS IN TH E PAPER BOOK AT PAGE NO.226: 5. STATEMENT OF PURCHASE AND DISTRIBUTION OF GOLD C OINS: DATE OF RECEIPT OF GOLD COINS NO. OF COINS RECEIVED STOCK OF MOBILE ON THAT DATE NO. OF BOXES NO. OF BOXES IN WHICH GOLD COINS INSERTED SALES BRANCH TRANSFER SALES 14/06/05 950 1500 APPROX. 1500 950 12194 PCS APPROX FROM 17.06.05 TO 30.06.05 236 PCS APPROX FROM 17.6.05 TO 30.06.05 05/07/05 950 35000 (APPROX.) 3500 950 26396 FROM 9.7.05 TO 31.07.05 1147 PCS FROM 11.7.05 TO 31.07.05 31/01/06 1500 35000 (APPROX.) 3500 1500 2888 PCS FROM 06.02.06 TO 31.03.06 1148 PCS FROM 06.02.06 TO 31.03.06 ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 22 OF 24 THE FIRST LOT ON 14.06.05 WHEN ASSESSEE HAS SUPPOSE D TO HAVE RECEIVED 950 GOLD COINS WERE SAID TO HAVE BEEN INSE RTED IN 950 BOXES OUT OF 1500 BOXES AVAILABLE IN STOCK. THAT MA KES IT ALMOST LESS THAN 1:2 OF NUMBER OF BOXES AVAILABLE. ON 05.0 7.05 ASSESSEE SUPPOSED TO HAVE INSERTED 950 GOLD COINS IN 3500 BO XES THAT MAKES IT AS APPROX 1:2.5 WHEREAS ON 31.01.06 1500 GOLD CO INS WAS SUPPOSED TO HAVE BEEN INSERTED IN 2500 BOXES WHICH MAKES IT TO LESS THAN APPROX 1:2. THEREFORE, THERE IS NO CONSIS TENCY OR RANDOMIZATION IN INSERTING THE GOLD COINS. ASSESSEE S CORRELATION WITH REFERENCE TO THE AVAILABILITY OF STOCK AND AVA ILABILITY OF GOLD COINS FOR INSERTION MAKES AN INTERESTING STORY AS T HIS INSERTION OF GOLD COINS SEEMS TO BE AN AFTER THOUGHT BUT NOT ON ANY SCIENTIFIC METHOD OF RANDOMIZATION. ASSESSEE SUBMITS THAT NORM ALLY AFTER IMPORT, EVERY BOX OF 10 PIECES WAS OPENED FOR QUALI TY CHECK AND AFTER CHECKING THE SAME USED TO BE RE-PACKED WITH C OMPANYS SEAL. HOWEVER, AS PER THE AGREEMENT, THERE IS NO SUCH VER IFICATION OF PRODUCTS FOR QUALITY CHECK AND ASSESSEE IS ONLY IMP ORTING AND TRADING IN THE PRODUCTS OF SAGEM WITH THE SAME BRAN D NAME. THEREFORE, THIS PART OF THE CONTENTION OF ASSESSEE IS ALSO UNSUPPORTED BY ANY EVIDENCE EXCEPT THE SO CALLED AF FIDAVIT BY ONE OF THE MANAGERS WHICH CAN NOT BE ACCEPTED WITHOUT ANY CORRESPONDING EVIDENCE BY THE PARTY. H) ANOTHER CONTENTION WHICH ALSO LOOKS OBVIOUS ON THE FACE OF IT AS UNBELIEVABLE IS THAT THE COST OF THE GOLD COIN G IVEN AS GIFT. IN ORDER TO EXPLAIN THAT THE MOBILE SET HAS A 20GM GOL D COIN THE LD COUNSEL TRIED TO DEMONSTRATE BEFORE US BY BRINGING A SET AND GOLD COIN OF SIMILAR SIZE. WHAT IS NOT ACCEPTABLE AS HUM AN PROBABILITY IS THE WEIGHT AND COST OF EACH GOLD COIN. AS FAR AS TH E INSERTION OF 20 G OF GOLD COIN IN A HANDSET PACKET WHICH MAY WEIGH 10 0G OR SO WILL EASILY GIVE OUT THAT A PARTICULAR HANDSET CONTAIN AN EXTRA WEIGHT. ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 23 OF 24 ANY PRUDENT BUSINESSMAN OR DEALER WILL IMMEDIATELY IDENTIFY THE SET. THIS WILL NOT BE PUT UP FOR SALE AT ALL. THE H ANDSET ITSELF IS VERY LIGHT AND 20GM OF GOLD COIN, IN OUR VIEW, CAN NOT B E INSERTED IN THE HANDSET BOX. HAD IT BEEN A SCRATCH CARD OR RANDOM N UMBER OR EVEN A STICKER IN SIDE TO BE REDEEMED WITH COMPANY, THER E CAN BE SOME JUSTIFICATION IN ASSESSEE CONTENTION. WE ARE NOT AD VISING HOW TO RUN A SCHEME BUT IN THE ABSENCE OF ANY CREDIBLE EVIDENC E, THE ABOVE OBSERVATIONS ARE TO THE EXTENT OF EXAMINING WHETHER THE CONTENTIONS ARE ACCEPTABLE OR NOT. I) ANOTHER ASPECT WHICH ALSO NOT CREDIT WORTHY IS THAT THE HAND SET ITSELF IS COSTING ` .2500 TO ` .6500 AS ADMITTED BY ASSESSEE, WHEREAS THE 20G GOLD COIN ITSELF COST MORE THAN ` .12,000. IT IS LITTLE UNBELIEVABLE THAT A HANDSET COST LESS THAN ` .6500 WILL CONTAIN A GOLD COIN OF MORE THAN ` .12,000 AS A GIFT. IF THE GOLD COIN IS OF 1GM OR 2GM, THERE MAY BE SOME GENUINENESS IN ASSESSEES CONTENTION. BY PROVIDING 20G GOLD COIN IN EACH HANDSET AS A LOT TERY AS SEEN FROM THE ABOVE TABLE IN A VERY UNSCIENTIFIC RANDOMIZATIO N IS NOT BELIEVABLE ON THE GIVEN FACTS AS EXPLAINED BEFORE US. 16. EVEN THOUGH ASSESSEE TRIED TO EXPLAIN TH AT THEY HAD A GOLD COIN SCHEME FOR WHICH THEY SPENT ` .4,77,58,412 BY PURCHASING 68 KGS OF GOLD AND CONVERTING THEM INTO 3400 GOLD COIN S OF 20G EACH FOR INSERTION IN HANDSETS, THE EVENTS AS EXPLAINED LACK CREDIBILITY. COUPLED WITH THE FACT THAT ASSESSEE COULD NOT FURNI SH ANY EVIDENCE OF ADVERTISEMENT OF JEETO INDIA GOLD COIN OFFER AND IMPROBABILITY OF THE SIZE OF THE COIN, COST OF THE COIN PLACED IN TH E HANDSET AS DISCUSSED ABOVE LOOKS ALL THE MORE UNREASONABLE MA KING ASSESSEES CLAIM SUSPICIOUS. EVEN THOUGH ASSESSEE DID PAY THE AMOUNT TO OPAL INDUSTRIES BY WAY OF CHEQUE, NOTHING WAS ESTABLISHE D THAT THE SAID PARTY SUPPLIED GOLD COINS AND ASSESSEE HAD PLACED T HEM IN THE HANDSET AS A PART OF ADVERTISEMENT AND MARKETING AN D THE ADVERTISEMENT SCHEME WAS A GENUINE SCHEME TO BE ACC EPTED AS ITA NO.1811 OF 2012 CENZER INDUSTRIES LTD MUMBAI PAGE 24 OF 24 SUCH. EVEN THOUGH THE LEARNED COUNSEL TRIED TO JUST IFY THE CLAIM BY FURNISHING VARIOUS REJOINDERS, DETAILS ETC., THE CR UCIAL ASPECTS ARE LEFT UNANSWERED AND THEREFORE, WE ARE NOT CONVINCED ABOUT THE CLAIM OF ASSESSEE. WE THEREFORE, UPHELD THE ORDERS OF AO AND THE CIT (A) ON THE ISSUE TO THE EXTENT OF CLAIM OF ` .4,77,58,412 ON DISTRIBUTION OF GOLD COINS AND ASSESSEES GROUNDS ARE ACCORDINGLY REJECTED. 17. IN THE RESULT APPEAL FILED BY ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JUNE, 2013 SD/- SD/- (AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 12 TH JUNE, 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI