M/s Steel City Food Products Pvt Ltd., Jamshedpur V. ACIT, Circle-3, Jamshedpur

ITA 183/RAN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8832 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL JCIT LD
• Assessee Lawyers: DEVESH PODDAR LD
• Section: 40A(3); 133A

Judgement Text

1 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 183/RAN/2015 A.Y 2007-08 M/S. STEEL CITY FOOD PRODUCTS PVT. LTD. PAN: AAFCS8863B APPELLANT VS. THE ACIT, CIRCLE-3, JAMSHEDPUR RESPONDENT I.T.A NO. 29/RAN/2016 A.Y 2007-08 THE ACIT, CIRCLE-3, JAMSHEDPUR A PPELLANT VS. M/S. STEEL CITY FOOD PRODUCTS PVT. LTD. RESPONDENT C.O NO. 21/RAN/2017 [I.T.A NO. 29/RAN/2016 A.Y 2007-08] M/S. STEEL CITY FOOD PRODUCTS PVT. LTD. PAN: AAFCS8863B CROSS OBJECTOR VS. THE ACIT, CIRCLE-3, JAMSHEDPUR RESPONDENT FOR THE APPELLANT : SHRI DEVESH PODDAR, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI P.K. MONDAL, JCIT, LD.D R DATE OF HEARING : 22-02-2018 DATE OF PRONOUNCEMENT : 28-02-2018 2 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 ORDER PER BENCH: BOTH THE ABOVE APPEALS AND CORRESPONDING CROSS OBJ ECTION BY ASSESSEE AND REVENUE ARE ARISING OUT OF THE ORDER D ATED 28-10-2015 OF CIT(A), JAMSHEDPUR FOR THE ASSESSMENT YEAR 2007- 08. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS AND CROSS OBJEC TION BY THE ASSESSEE AND REVENUE ARE INTER-LINKED WITH EACH OTH ER, THEREFORE, THEY WERE HEARD TOGETHER AND DISPOSED OFF THE SAME BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE, WITH THE CONSEN T OF BOTH THE PARTIES. 2. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO. 18 3/RAN/2015 FOR THE A.Y 2007-08 BY THE ASSESSEE. ITA NO. 183/RAN/2015 FOR THE A.Y 2007-08 3. AT THE TIME OF HEARING BEFORE US THE LD.AR SUBMI TS THAT THE MAJOR ISSUE INVOLVED IN THIS APPEAL AS RAISED BY TH E ASSESSEE IS REGARDING THE UNEXPLAINED STOCK OF RS. 27,07,995/-. HE FURTHER SUBMITS THAT THE DETAILS OF STOCK IS AVAILABLE AT P AGE 3 OF THE ASSESSMENT ORDER. THE CIT-A HELD THAT STOCK IN PROC ESS WAS NOT VERIFIABLE AND, THEREFORE, CONFIRMED THE ADDITION M ADE BY THE AO. THE LD.AR ARGUED THAT THE CIT-A WAS WRONG IN HOLDIN G THE SAME WHEN THE ENTIRE DETAILS OF STOCK ARE VERIFIABLE FROM THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THAT THERE WAS NO DIFFERENCE IN TH E QUANTITATIVE DETAILS OF STOCK RECORDED IN THE STOCK REGISTER AND AS PHYSICALLY VERIFIED AT THE TIME OF STOCK VERIFICATION ON THE D AY OF SURVEY. THE AO MADE SUCH ADDITION ONLY ON THE BASIS OF A STATEMENT OF ONE DIRECTOR, SHRI PAWAN KUMAR, WHEREIN HE ALLEGEDLY ADMITTED TO PAY THE TAX THEREON ON UNEXPLAINED STOCK. THE LD. AR FURTHER A RGUED THAT THERE WAS NO ADVERSE REMARK OF THE AO IN HIS REMAND REPOR T DT. 14 TH OCTOBER, 2011, AVAILABLE ON RECORD ON THE ISSUE OF STOCK VERIFICATION, AND IN SUPPORT OF HIS CONTENTION, REFERRED TO PAGES - 2 & 3 OF THE SAID REPORT. 3 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE IMPU GNED ORDER OF THE CIT-A. 5. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. IT IS NOTICED THAT THE RECONCILIATION STATEMENT OF STOCK WAS SUBM ITTED ON 12-02- 2017 I.E THE DATE OF SURVEY OPERATION U/S. 133A OF THE ACT BY THE ASSESSEE ALONG WITH ORIGINAL RECORDS BEFORE THE AO. WE FIND THAT THE VALUATION OF STOCK AS OFFERED BY THE ASSESSEE WAS ESTIMATED ON THE BASIS OF MARKET VALUE AND THE SAID DIRECTOR MADE NO STATEMENT ADMITTING TO PAY TAX THEREON ON UNEXPLAINED STOCK. WE FIND THAT THE ISSUE IN HAND WAS DEALT IN THE ASSESSMENT PROCEEDIN GS IN DETAIL BY THE AO. THERE IS NO DIFFERENCE BETWEEN THE QUANTITA TIVE DETAILS IN THE STOCK REGISTER AND THE PHYSICAL STOCK TAKEN. EVERY STOCK IN PROCESS IS DOCUMENTED. IT CLEARLY SHOWS THAT THE ASSESSEE HAS OFFERED PROPER EXPLANATION TO THE ALLEGED STOCK VERIFICATION. WE F URTHER FIND SUPPORT FROM THE SAID REMAND REPORT THAT THERE IS NOT EVEN A WHISPER ABOUT OF THE COMPANY AGREEING TO PAY TAX ON ALLEGED STOCK. R ELEVANT PORTION IS REPRODUCED HEREIN BELOW FOR BETTER APPRAISAL:- D. THE POINT AT ISSUE IS THE ADDITION ON ACCOUNT OF UNEXPLAINED STOCK AMOUNTING TO RS.27,07,995/-. ON THE BASIS OF EVIDENCES BORNE ON RECORD, IT IS INFERRED THAT A RECONCILIATION STATEMENT OF STOCK AS ON 12-02-2017 I.E THE DATE OF SURVEY, WAS SUBMITTED BY THE ASSESSEE ON 19-11-09. THE ASSESSEE HAD PRODUCED ON THE SAID DATE ORIGINAL RECORDS IN FURTHERANCE OF HIS ASSERTI ONS BEFORE THE ASSESSING AUTHORITY. THE ASSESSEE HAS AVERRED THAT THE VALUATION OF STOC K WAS ON THE BASIS OF ESTIMATED MARKET VALUES. THE VALUATION IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE IS ON THE BASIS OF HISTORICAL COSTS. IT IS FURTHER ASSERTED T HAT THE CALCULATIONS SHOULD HAVE, RIGHTLY, BEEN ON THE BASIS OF QUANTITIES ONLY. THE SUBMITTED DETAILED CALCULATIONS IN THIS REGARD. THIS FACT IS ALSO EVIDENCED ON THE AS SESSMENT RECORDS VIDE ENTRIES ON 16.12.2009 AND 17.12.2009. IT IS FURTHER SEEN FROM THE STATEMENT UNDER OATH, RECORDED BY THE AUTHORIZED OFFICER ON 12.02.2007 VI DE QUESTION NO.11, THAT WHEN QUERIED ABOUT THE DIFFERENCE IN STOCK, THE ASSESSEE HAD, IN FACT, REPLIED THAT HE SHALL SUBMIT A RECONCILIATION STATEMENT IN FUTURE. THERE IS NOT EVEN A WHISPER ABOUT HIS AGREEMENT TO PAY TAX THEREON. 6. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE CI T-A WAS NOT JUSTIFIED IN CONFIRMING THE VIEW OF THE AO IN MAKIN G THE ADDITION OF RS.27,07,995/- ON ACCOUNT OF UNEXPLAINED STOCK. TH EREFORE, THE ORDER OF THE CIT-A ON THIS ISSUE IS SET ASIDE AND T HE ADDITION DELETED. THUS, THE EFFECTIVE GROUND RAISED BY THE ASSESSEE I N THIS APPEAL IS ALLOWED. 4 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 7. THE APPEAL OF ASSESSEE IN ITA NO. 183/RAN/2016 F OR THE A.Y 2007-08 IS ALLOWED. 8. NOW, WE SHALL TAKE UP THE APPEAL IN ITA NO. 29/ RAN/2016 FOR THE A.Y 2007-08 BY THE REVENUE. ITA NO. 29/RAN/2016 FOR THE A.Y 2007-08 9. GROUND NO.1 IS RELATING TO DELETION OF ADDITION MADE ON ACCOUNT OF UNACCOUNTED PURCHASE AND SALE. 10. THE AO MADE THE ADDITION ON ACCOUNT OF UNACCOUN TED PURCHASE AND SALE BASING ON THE STATEMENT ALLEGEDLY GIVEN BY DIRECTOR, SHRI PAWAN KUMAR IN RESPECT OF TRADING DIVISION. BY EXAM INING THE DATE- WISE DETAILS AND TAKING INTO CONSIDERATION THE PEAK VALUE, THE AO ADDED THE SAID TWO ADDITIONS. 11. THE CIT-A EXAMINED THE PHOTOCOPIES OF IMPOUNDED MATERIAL SUBMITTED BY THE ASSESSEE AND HELD THAT THE AO MADE SAID ADDITION WITHOUT THERE BEING ANY BASIS, AND IN RESPECT OF TR ADING DIVISION. HE HELD THAT THERE IS A TRADING DIVISION IN EXISTENCE, WHICH WAS DISALLOWED IN THE RETURN OF INCOME. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT-A DELETED THE IMPUGNED ADDITI ONS OF RS.3,56,87,536/- AND RS.2,02,21,178/- MADE ON ACCO UNT OF UNACCOUNTED SALE/PURCHASE. 12. THE LD. DR RELIED ON THE ORDER OF THE AO. 13. THE LD.AR ALSO ARGUED THAT THE CIT-A WAS RIGHT IN HOLDING THE SAME. THE AO MADE SUCH ADDITION ONLY ON THE BASIS O F A STATEMENT OF ONE DIRECTOR, SHRI PAWAN KUMAR RECORDED AT THE TIME OF SURVEY, WHEREIN HE HAD ALLEGEDLY ADMITTED TO PAY THE TAX TH EREON ON UNACCOUNTED SALES. THE AO MADE THE IMPUGNED ADDITIO NS WITH RESPECT TO PEAK PURCHASE AND PEAK SALES RESPECTIVEL Y. THE LD. AR 5 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 FURTHER ARGUED THAT THERE WAS NO ADVERSE REMARK OF THE AO IN HIS REMAND REPORT DT. 14 TH OCTOBER, 2011, AVAILABLE ON RECORD, AND IN SUPPORT OF HIS CONTENTION, REFERRED TO PAGE-1 OF TH E SAID REPORT. 14. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND THAT THE CIT-A CONSIDERING THE COPIES OF THE IMPOUNDED M ATERIAL OF PURCHASE AND SALE AND THE SAID REMAND REPORT DELETE D THE IMPUGNED ADDITIONS. WE FIND THAT THE ASSESSEE ALREADY SUBMIT TED A DETAILED RECONCILIATION OF PURCHASE AND SALES ALONG WITH BIL LS, VOUCHERS AND BOOKS OF ACCOUNT. THE ASSESSEE HAD OFFERED SPECIFIC EXPLANATION AND SUPPORTING MATERIAL AND DOCUMENTARY EVIDENCES. THU S, THE ASSESSEE HAS OFFERED PROPER EXPLANATION REGARDING THE IMPUGN ED ISSUE. IN SUPPORT OF THE CONTENTION, THE ASSESSEE HAS ALSO PL ACED ITS RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SES CIT (CENTRAL) VS. DAULATRAM RAWATMULL REPORTED IN 53 ITR 574 AS W ELL AS M/S. AGARWAL MOTORS VS. ACT REPORTED IN 68 ITD 407. WE F IND THAT THE AO EXAMINED THE BOOKS OF ACCOUNT AS AVAILABLE BEFORE H IM AND MADE ADDITIONS ONLY ON THE STATEMENT SAID TO HAVE BEEN G IVEN BY THE DIRECTOR TO PAY TAX THEREON ON UNACCOUNTED PURCHASE AND SALE. WE FIND THAT THE ISSUE IN HAND WAS DEALT IN THE ASSESS MENT PROCEEDINGS IN DETAIL BY THE AO AS WELL AS IN THE REMAND PROCE EDINGS. RELEVANT PORTION OF REMAND REPORT OF THE AO IS REPRODUCED HE REIN BELOW FOR BETTER APPRAISAL:- A. THE POINT AT ISSUE IS THE ADDITIONS MADE BY TH E ASSESSING AUTHORITY WITH RESPECT TO PEAK PURCHASE AND PEAK SALES RESPECTIVE LY. THE ADDITIONS ON ACCOUNT OF UNACCOUNTED PURCHASE IS RS.3,83,800/- AND ON ACCOUN T OF UNACCOUNTED SALE IS RS.10,71,009/-. THE RATIONALS FOR MAKING THESE ADD ITIONS IS EMBODIED IN THE BODY OF THE ASSESSMENT ORDER. THERE IS NO OTHER BASIS OF WORKING OF THE SAME AS BORNE ON RECORD. THE ASSESSEE S CONTENTION IS THAT THE A DDITIONS MADE BY THE ASSESSING AUTHORITY ARE BASED ON ESTIMATES AND PRESUMPTIONS. IT IS, THEREFORE, NOT REASONABLE AND IS ARBITRARY. IT IS EVIDENT FROM RECORD THAT TH E ASSESSEE HAD, IN FACT, SUBMITTED DETAILS OF PURCHASE ABOVE 5 LAKHS FROM VARIOUS PART IES ON 13.10.2009. ON 19.11.2009, THE ASSESSEE SUBMITTED A DETAILED RECO NCILIATION OF PURCHASE AND SALES WHICH WAS SUBJECTED TO VERIFICATION BY THE ASSESSIN G AUTHORITY. IT IS FURTHER EVIDENT FROM RECORD THAT THE ASSESSEE SUBMITTED BILLS, VOUC HERS AND BOOKS OF ACCOUNT WITH PARTICULAR RELEVANCE TO THE IMPOUNDED DOCUMENTS. TH E ASSESSEE HAD OFFERED SPECIFIC EXPLANATION AND SUPPORTING MATERIAL DOCUME NTARY EVIDENCES. THE ASSESSEE HAD OFFERED SPECIFIC EXPLANATION AND SUPPORTING MAT ERIAL EVIDENCES. THESE ARE THE FACTS, WHICH CRAVES FOR ADJUDICATION BEFORE YOUR KI NDSELF. THE ASSESSEE PLACES RELIANCE ON THE DECISIONS OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT(CENTRAL), CALCUTTA VS. DAULATRAM RAWATMULL, 53 ITR 574, AS WE LL AS M/S. AGARWAL MOTORS VS. ACIT (1999) 68 ITD 407. 6 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 15. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE O RDER OF THE CIT-A ON THIS ISSUE IS JUSTIFIED. THUS, GROUND NO. 1 RELA TING TO UNACCOUNTED PURCHASE AND SALE RAISED BY THE REVENUE IN THE APPE AL IS DISMISSED. 16. GROUND NO. 2 IS RELATING TO DELETION OF ADDITIO N MADE U/S. 40A(3). 17. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE MADE CASH PAYMENTS TO THE TUNE OF RS.68,78 ,892/- AGAINST THE PROVISION PRESCRIBED U/S. 40A(3) OF THE ACT. TH E AO ALSO FOUND THAT THE ASSESSEE ON ITS OWN DISALLOWED 20% OF RS.1 6,07,007/- AND ADDED THE SAME TO ITS RETURN OF INCOME. THE AO CON SIDERING THE SUBMISSIONS OF ASSESSEE ADDED AN AMOUNT OF RS.10,54 ,377/- I.E 20% OF BALANCE AMOUNT OF RS.52,71,885/- FOR VIOLATION O F PROVISIONS OF SECTION 40A(3) OF THE ACT. 18. THE LD. CIT-A HAS DELETED THE ADDITION BY OBSE RVING THAT THE AO DID NOT CONSIDER THE MATERIAL FACTS BEFORE HIM N OR REBUTTED THE ASSESSEES CLAIM AND HELD THAT MADE ADDITION U/S.40 A(3) TO THE TUNE OF RS.10,54,377/-, WHICH IS UNFOUNDED AND UNREASONA BLE. 19. THE LD. DR RELIED ON THE ORDER OF THE AO. 20. THE LD.AR SUPPORTED THE ORDER OF CIT-A. HE ALSO ARGUED THAT THE ASSESSEE DEALS IN AGRICULTURAL ITEMS. THE PAYMENTS OF RS. 52,71,885/- WERE EFFECTED TO VARIOUS PARTIES ON BANK HOLIDAYS I .E. 26 TH JANUARY AND SUNDAY ETC. BUT, THE AO HELD THAT SAID PAYMENTS ARE COVERED UNDER EXCEPTION TO RULE 6DD(K) IN REMAND PROCEEDING S AND REFERRED TO PAGE 2 OF THE SAID REMAND REPORT. THE RELEVANT P ORTION OF WHICH IS REPRODUCED HEREIN BELOW:- THE ASSESSEES ARGUMENT IN THIS REGARD, IS THE FA CT THAT THE ASSESSEE DEALS IN AGRICULTURAL ITEMS IN THE COURSE OF ITS DAY-TO-DAY BUSINESS ACTIVITIES. THERE WERE PAYMENTS OF MORE THAN 20,000/- TO VARIOUS TRANSPORT ERS AND SUPPLIERS. THE ASSESSEE CONCEDES THAT THERE WAS VIOLATION OF THE PROVISIONS OF SECTION 40A(3) AND HAD, THEREFORE, CONSEQUENTLY, MADE AN ADDITION OF 20% OF RS.16,07,0 07/- TO THE TAXABLE INCOME FOR THE ASSESSMENT YEAR UNDER REFERENCE. THIS WAS DONE VOLU NTARILY. THE ASSESSING AUTHORITY MADE DISALLOWANCE U/S. 40A(3) FOR A SUM OF RS.10,54 ,377/- BEING 20% OF RS. 7 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 52,71,885/-. THE ASSESSEES CONTENTION IS THAT, IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS BROUGHT TO THE NOTICE OF THE A SSESSING AUTHORITY ON 23.12.2009 THAT THE PAYMENTS OF RS.52,71,885/- WAS EFFECTED TO VARI OUS PARTIES ON BANK HOLIDAYS I.E 26 TH JANUARY AND SUNDAYS. THE ASSESSEE DEALS WITH AGRICU LTURAL PRODUCE AND HAS TO BE NECESSARILY EFFECT PAYMENTS TO UPHILL PARTIES. THE SE PAYMENTS ARE COVERED UNDER EXCEPTION CLAUSE OF RULE 6DD(K) WHICH, INTER-ALIA, STATES THAT THE PROVISIONS OF SECTION 40A(3) WOULD BE INAPPLICABLE WHERE THE PAYMENTS WER E REQUIRED TO BE MADE ON A DAY ON WHICH THE BANKS WERE CLOSED EITHER ON ACCOUNT OF H OLIDAY OR STRIKE. IN ORDER TO FURTHER BUTTRESS HIS ARGUMENT, IN THE MATTER, THE ASSESSEE HAS CITED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ATTAR SINGH GURMUKH SI NGH VS ITO (1991) 59 TAXMN 11(SC) WHICH IS RELEVANT TO THE POINT AT ISSUE. THE DECISION STATES THAT THE PROVISIONS OF SECTION 40A(3) MUST NOT BE READ IN ISOLATION OR TO THE EXCLUSION OF RULE 6DD. THIS SECTION SHOULD BE READ ALONG WITH THE RULE. THE ASSERTIONS OF THE ASSESSEE ARE FACTUAL AND RELA TABLE TO FACTS WHICH ARE BORNE ON RECORD. IT IS FOR YOUR KINDSELF TO ADJUDGE THE I SSUE BEARING IN MIND, THE FACTS AND CIRCUMSTANCES OF THE CASE. 21. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE C IT-A WAS JUSTIFIED IN DELETING THE ADDITION. THE AO WAS NOT CORRECT IN MAKING THE IMPUGNED ADDITION. THEREFORE, THE ORDER OF THE CIT-A ON THIS ISSUE IS UPHELD. THUS, GROUND NO. 3 RELATING TO DISALLOWA NCE U/S. 40A(3) OF THE ACT RAISED BY THE REVENUE IN THE APPEAL IS DISM ISSED. 22. GROUND NO.3 IS RELATING TO DELETION OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH. 23. FOR NON RECONCILIATION OF CASH TRANSACTION BY T HE ASSESSEE THE AO MADE THIS ADDITION. DURING THE SURVEY OPERATION U/S. 133A, THE MANAGING DIRECTOR OF THE ASSESSEE, IN HIS STATEMENT , COULD NOT EXPLAIN THE SAME AND AGREED TO PAY TAX THEREON. THU S, THE AO ADDED AN AMOUNT OF RS. 4,28,902/-TO THE TOTAL INCOME OF T HE ASSESSEE. THE CIT-A DELETED THE IMPUGNED ADDITION ON BEING SATIS FIED THAT THE DISCREPANCY IN CASH BALANCE REPRESENTS CASH SALES F ROM 10-02-07 TO 11-02-07, AND AMOUNTS REALIZED FROM ITS DEBTORS. 24. THE LD.DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND THE LD.AR RELIED ON THE ORDER OF THE CIT-A AND SAID REM AND REPORT. 25. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND THAT THE ASSESSEE SUBMITTED THE DETAILS REGARDING THE DI SCREPANCY FOUND AT THE TIME OF SURVEY. WE FIND THAT, FOR NON RECONCILI ATION OF CASH TRANSACTION BY THE ASSESSEE, THE AO MADE THIS ADDIT ION. WE FIND THAT 8 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 THE DISCREPANCY OF CASH WAS WITH REFERENCE TO CASH SALES AND COLLECTION FROM DEBTORS FOR THE PERIOD 10-02-07 TO 11-02-07. BUT, ON PERUSAL OF SAID REMAND REPORT, WE FIND THAT THE ASS ESSEE RECONCILED THE DISCREPANCY. THE CIT-A DELETED THE IMPUGNED ADD ITION ON BEING SATISFIED THAT THE DISCREPANCY REPRESENTING CASH SA LES FROM 10-02-07 TO 11-02-07 AS WELL AS REALIZATION FROM ITS DEBTORS AND CASH SALES. THE DISCREPANCY AS QUESTIONED, HAS BEEN RECONCILED BY THE ASSESSEE, WHICH IS CLEAR FROM REMAND REPORT. THEREFORE, CIT-A WAS JUSTIFIED IN DELETING THE SAME. RELEVANT PORTION OF REMAND REPO RT IS REPRODUCED HEREIN BELOW:- THE POINT AT ISSUE, HEREIN, IS THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH AMOUNTING TO RS.4,28,902/-. THE FACTS ARE THAT A SU RVEY UNDER THE PROVISIONS OF SECTION 133A OF THE I.T ACT WAS CONDUCTED IN THE BUSINESS P REMISES OF THE ASSESSEE ON 12-02- 2007. IN THE COURSE OF THE SURVEY PROCEEDINGS, THE ASSESSEE WAS QUERIED BY THE AUTHORIZED OFFICER, ON THE DISCREPANCY OF CASH. THE CASH BALANCE AS PER BOOKS OF ACCOUNTS, WRITTEN TILL 09.02.2007 WAS RS.3,43,763/- . THE CASH BALANCE ON 12.02.2007 ON PHYSICAL VERIFICATION BY THE SURVEY TEAM AMOUNTED T O RS.7,72,665/-. THE DISCREPANCY OF RS. 7,72,665/- RS.3,43,763 = RS.4,28,902/- WAS PRIM A FACIE APPARENT. THE ASSESSEES REPLY TO THIS QUERY WAS THAT THE DISCREPANCY REPRES ENTED CASH SALES OF 10-02-2007 AND REALIZATION EFFECTED FROM DEBTORS. THE ASSESSEE ASS URED THE AUTHORIZED OFFICER THAT THE DETAILS, IN THIS REGARD, SHALL BE SUBMITTED IN NEAR FUTURE. THESE DETAILS WERE SUBMITTED BY THE ASSESSEE ON 19. 11.2009 WHEREIN THE DISCREPANCY WAS RECONCILED. THIS FACT IS BORNE ON R ECORD. IT IS EVIDENT THAT IN REPLY TO THE QUESTION NO. 10 PUT FORTH BY THE AUTHORIZED OFFICER , THE DIRECTOR HAD, IN FACT, STATED THAT THE DISCREPANCY IS WITH REFERENCE TO THE CASH SALES AND DEBTORS COLLECTION FOR THE PERIOD 10.02. 2007 TO 11.02. 2007. HE HAD ASSURED THE AUTH ORIZED OFFICER THAT THE DETAILS, IN THIS REGARD, SHALL BE SUBMITTED IN NEAR FUTURE. IT IS NO WHERE EVIDENT FROM RECORD THAT THE ASSESSEE AGREED TO PAY TAX THEREON. 26. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN T HE IMPUGNED ORDER OF THE CIT-A. THUS, GROUND NO. 3 RELATING TO UNEXPLAINED CASH RAISED BY THE REVENUE IN THE APPEAL IS DISMISSED. 27. GROUND NO. 4 IS RELATING TO DELETION OF ADDITIO N ON ACCOUNT OF UNEXPLAINED STOCK. 28. WE FIND THAT THIS ISSUE IS SIMILAR AND IDENTICA L TO GROUND NO. 1 OF ASSESSEES APPEAL IN ITA NO. 183/RAN/16, WHICH WE H AVE ALREADY DISCUSSED IN DETAIL AS ABOVE AND DISPOSED OF THE SA ME IN FAVOUR OF ASSESSEE BY SETTING ASIDE THE ORDER OF THE CIT-A. T HEREFORE, FOLLOWING THE SAME VIEW AS TAKEN IN ITA NO. 183/RAN/2015 FOR THE A.Y 2007- 08, THIS GROUND OF THE REVENUES APPEAL IS DISMISSE D BY UPHOLDING THE 9 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 IMPUGNED ORDER OF THE CIT-A ON THIS ISSUE. THUS, GR OUND NO. 4 OF THE REVENUES APPEAL IS DISMISSED. 29. GROUND NO. 5 IS RELATING TO DELETION OF ADDITIO N MADE ON ACCOUNT OF UNEXPLAINED MONEY OF RS. 13,47,507/- MADE U/S. 6 9A OF THE ACT. 30. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS FOUND NUMEROUS ENTRIES OF FUND INFLUX OF RS.13,47,507/-. FOR NON EXPLANATION, THE AO ADDED THE SAME TO THE TOTAL IN COME OF ASSESSEE BEING UNEXPLAINED MONEY U/S.69A OF THE ACT. 31. THE CIT-A CONSIDERING THE SUBMISSIONS OF ASSESS EE AND THE REMAND REPORT FOUND SATISFIED THAT THE ASSESSEE SUB MITTED DETAILS ON 09.07.09, 13.10.09, 19.11.09, 07.12.09, 11.12.09, 1 7.12.09 AND 24.12.09 AND DELETED THE SAID ADDITION. WE FIND SUP PORT FROM THE REMAND REPORT, WHICH IS REPRODUCED HEREIN BELOW:- THE POINT AT ISSUE RELATES TO THE ADDITION OF RS. 13,47,507/- MADE IN THE BODY OF THE ASSESSMENT ORDER, PRESUMABLY, ON ACCOUNT OF FUND INFLUX MADE AFTER THE LAST DATE OF PURCHASE. THERE IS NO CALCULATION, IN THIS REGAR D, BORNE ON RECORD. NO SHOW CAUSE NOTICE, IN THIS REGARD, WAS ALSO ISSUED TO THE ASSE SSEE. THIS IS EVIDENCED ON RECORD. ON THE OTHER SIDE OF THE FENCE, IT IS SEEN THAT THE AS SESSEE HAD SUBMITTED DETAILED EXPLANATION ON 09.07.2009, 13.10.2009, 19.11.2009, 07.12.2009, 11.12.2009, 17.12.2009 AND 24.12.2009. THE ASSESSEE WAS QUERIE D ON IMPOUNDED PAPERS BEARING IDENTIFICATION MARKS AS-18, AS-19, AS-22, AS-28 AND AS-20. THE QUERIES WERE IN RESPECT OF PURCHASES, SALES AND LOOSE SHEETS. THE ASSESSEE HAD FURNISHED DETAILED EXPLANATIONS WITH CORROBORATIVE MATERIAL EVIDENCES ON 19.11.2009 WHICH CONTAINED 88 PAGES. 32. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE C IT-A WAS JUSTIFIED IN DELETING THE SAME. THE ORDER OF THE CI T-A ON THIS ISSUE IS HEREBY UPHELD. THUS, GROUND NO. 5 RAISED BY THE REV ENUE IN THE APPEAL IN RESPECT OF UNEXPLAINED MONEY U/S. 69A OF THE ACT IS DISMISSED. 33. THE APPEAL OF REVENUE IN ITA NO. 29/RAN/2016 OR THE A.Y 2007- 08 IS DISMISSED. 34. C.O NO. 21/RAN/2017 ARISING OUT OF ITA NO. 29/R AN/2016 FOR THE A.Y 2007-08- BY THE ASSESSEE. 10 ITA NOS.183/RAN/15 29/RAN/16 & CO NO. 21/RAN/17 C.O NO. 21/RAN/2017 35. SINCE THE CROSS OBJECTION IN NO. 21/RAN/2017 I S ARISING OUT OF REVENUES APPEAL IN ITA NO. 29/RAN/2016, WHICH WE H AVE ALREADY DISPOSED OF IN FAVOUR OF ASSESSEE BY UPHOLDING THE IMPUGNED ORDER OF THE CIT-A AND WE FIND THAT THE CROSS OBJECTION OF A SSESSEE IS IN SUPPORTIVE ORDER OF THE CIT-A. THEREFORE, THE C.O. OF THE ASSESSEE BECOMES ACADEMIC AND IT IS DISMISSED. 36. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 183/RAN/2015 FOR THE A.Y 2007-08 IS ALLOWED AND THA T OF THE REVENUES APPEAL IN ITA NO.29/RAN/2016 FOR THE A.Y 2007-08 AND C.O (NO. 21/RAN/2017) OF THE ASSESSEE IN ITA NO. 29 /RAN/2016 FOR THE A.Y 2007-08 ARE DISMISSED. ORDER PRONOUNCED ON 28-0-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28-02-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. STEEL CITY FOOD PRODUCTS PVT. LTD B-5, 2 ND PHASE, INDUSTRIAL AREA, BISTUPUR, JAMSHEDPUR. . 2 RESPONDENT THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-3, JAMSHEDPUR. 3 . THE CIT(A), RANCHI 4. 5. CIT , RANCHI DR, ITAT RANCHI BENCHES, RANCHI. / TRUE COPY, BY ORDER, SR.PS ITAT, RANCHI