M/s D.S. Doors Pvt. Ltd., Faridabad V. ACIT, Faridabad

ITA 1986/DEL/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8915 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: SSH ASHWANI TANEJA; TARUN KUMAR S
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Document seized; Opportunity of being heard; Principle of natural justice; Corroborative evidences; Valuation report; Validity of assessment; Retraction; Documents seized
• Section: 143(3); 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR , ACCOUNTANT MEMBER ITA NO S . 1986 TO 1991 & 2053 /DEL / 2011 ASSESSMENT YEAR S : 2001 - 02 TO 2006 - 07 & 2007 - 08 M/S D.S. DOORS PVT. LTD. VS. ASSISTANT COMMISSIONER 11/7, MATHURA ROAD, OF INCOME TAX, CENTRAL FARIDABAD. CIRCLE - 1, FARIDABAD. (PAN: AAACD5805B ) (APPELLANT) (RESPONDENT) ITA NOS. 2273 TO 2275& 2052/DEL /2011 ASSESSMENT YEARS: 2004 - 05 TO 2007 - 08 M/S D.S. WOODTECH PVT. LTD. VS. ASSISTANT COMMISSIONER C/O. M/S. RRA TEXINDIA, OF INCOME TAX, CENTRAL D - 28, SOUTH EXTENSION, PART - I, CIRCLE - 1, FARIDABAD. NEW DELHI. (PAN: AAACD2776M) (APPELLANT) (RESPONDENT) APPELLANT BY : S/SH. ASHWANI TANEJA & TARUN KUMAR, ADVOCATES RESPONDEN T BY: SMT. A. MISRA, CIT, DR ORDER PER SHRI I.C. SUDHIR, JM : (A.YS. 2001 - 02 TO 2006 - 07): D.S. DOORS PVT. LTD. - ITA NOS. 1986 TO 1991 /DEL /2011 1. IN ALL THESE APPEALS , THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE ORDERS ON THE COMMON GROUNDS. IN GROUND NOS. 1 & 2, THE VALIDITY OF ASSESS MENT FRAMED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) HAS BEEN QUESTIONED. IN GROUND NOS. 3 & 4, THE VALIDITY OF ADDITION MADE ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT IN 2 CONSTRUCTION UNDER SECTION 69B OF THE ACT ON THE BASIS OF VALUATION REPORT OF THE D.V.O. HAS BEEN QUESTIONED. IN GROUND NO. 5, THE GRIE VANCE RAISED IS REGARDING NON - GRANTING OF THE BENEFIT OF THE TELESC OPING BY THE AUTHORITIES BELOW AND IN GROUND NO. 6, CHARGING OF INTEREST UNDER SECTION S 234A, 234B AND 234C OF THE ACT HAS BEEN QUESTIONED. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS AD VANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE FACTS IN BRIEF ARE THAT THE BUS INESS PREMISES OF THE ASSESSEE GROUP AND ITS DIRECTOR WERE SUBJECTED TO SEARCH AND SEIZU RE PROCEDURE UNDER SECTION 132 ( 2) OF THE ACT ON 07.02.2007. DURING THE COURSE OF SEARCH OPERATIONS, SEVERAL DOCUMENTS WERE SEIZED AND CASH OF RS. 6,84,000/ - AND JEWELLERY VALUED AT RS. 23,82,49 3/ - WERE FOUND AT THE RESIDENTIAL PREMISES OF THE DIRECTOR OF T HE D.S. WOODTECH LTD. , SH. DHAN SINGH SHARMA. NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED AND IN RESPONSE THE ASSESSEE FILED ITS RETURN OF INCOME. THE A.O. BEING NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE MADE THE ADDITION ON ACCOUNT OF UNDISCL OSED INVESTMENT IN CONSTRUCTION ON THE BASIS OF VALUATION REPORT OF THE D.V. O. TO WHOM THE A.O. HAD MADE REF ERENCE FOR THE SAME . BEFORE THE LEARNED CIT(A), THE ASSESSEE QUESTIONED VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT MADE IN THE ABSE NCE OF EVIDENCE FOUND DURING THE COURSE OF SEARCH AND HAS ALSO QUESTIONED THE VALIDITY OF ADDITION MADE BY THE A.O. ON THE BASIS OF VALUATION REPORT OF THE D.V.O. TO WHOM THE A.O. HAD MADE 3 REFERENCE DURING THE ASSESSMENT PROCEEDINGS ITSELF. IT WAS SUBMITT ED THAT REF ERENCE TO D.V.O. CANNOT BE MADE BY THE A.O. FOR THE VALUATION OF THE PROPERTY WITHOUT REJECTING THE BOOKS OF ACCOUNT. IT WAS CONTENDED THAT THE BUILDING EXISTED PRIOR TO THE BLOCK PERIOD I.E. 01.04.2000, HENCE NO ADDITION COULD BE MADE ON THIS A CCOUNT. THE LEARNED CIT(A) DID NOT AGREE WITH THE ASSESSEE AND HAS UPHELD THE ADDITION IN QUESTION. HENCE, THE PRESENT APPEALS HAVE BEEN PREFERRED BEFORE THE TRIBUNAL AGAINST THE SAID FIRST APPELLATE ORDER. 4. IN SUPPORT OF THE ISSUE RAISED IN GROUND NOS. 1 AND 2 ON THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT, LEARNED AR SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, NOR ANY ASSESSMENT BASED ON THE RETURN OF INCOME ORIGINALLY FILED WAS PENDING ON THE DATE OF SEARCH, HENCE THE A.O. WAS NOT JUSTIFIED IN INITIATING THE PROCEEDINGS U NDER SECTION 153A OF THE ACT AND IN FRAMING THE ASSESSMENT IN FURTHERANCE TO THE SAID NOTICE. HE SUBMITTED FURTHER THAT THE ADDITION IN QUESTION HAS BEEN MADE BY THE A.O. NOT ON THE BASIS OF SEIZED DOCUMENTS BUT ON THE BASIS OF ESTIMATION DONE BY THE D.V.O . TO WHOM THE VALUATION OF THE BUILDING WAS REFERRED TO BE DETERMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN SUPPORT HE REFERRED THE FOLLOWING DECISIONS: I. MGF AUTOMOBILES LTD. VS. ACIT , ITA NOS. 4212 & 4213/DEL/2011 ( A.Y. 2004 - 05 & 2005 - 06 ), ORDER DATED 28.06.2013; II. JAISTEEL (INDIA) LTD. VS. ACIT, (2013) 259 CTR 281 ( RAJ. HC ) ; III. GURINDER SINGH BAWA VS. DCIT AND OTHERS , ITA NO. 2075/MUM./2010 AND OTHERS (A.Y. 2005 - 06) , ORDER DATED 16.11.2012; IV. KUSUM GUPTA VS. DCIT AND OTHERS, ITA NO. 4873/DEL/2009 AND OTHE RS (A.Y. 2005 - 06 AND OTHERS), ORDER DATED 28.03.2013; V. CIT VS. ANIL KUMAR BHATIA, (2012) 211 TAXMANN.COM 453 (DEL.) ; AND 4 VI. ALL CARGO GLOBAL LOGISTICS LTD. VS. CIT, 137 ITD 287 (MUM.) (SB) 5. LEARNED AR SUBMITTED FURTHER THAT THE ACTION OF THE A.O. IN REFERRING THE ESTIMATION OF VALUATION OF THE CONSTRUCTION OF THE BUILDING TO THE D.V.O. WITHOUT REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE WAS ALSO NOT VALID. IN SUPPORT, HE PLACED RELIANCE ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS. CIT, (2010) 328 ITR 513 (SC). HE ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. CHOHAN RESORTS, 359 ITR 394 (P&H); II. CIT VS. RAGHURAJI AGRO INDUSTRIES (P.) LTD., ( 2013 ) 38 T AXMANN. COM 318 (ALLAHABAD ) 6. LEARNED AR SUBMITTED FUR THER THAT THE BUILDING UNDER REFERENCE I.E. 11/7, MATHURA ROAD WITH RCC COVERED AREA OF 29200 SQ. FTS. A ND ACC AREA OF 7664 SQ. FT. WAS VERY MUCH IN EXISTENCE PRIOR TO 01.04.2000 HENCE, NO ADDITION COULD BE MADE IN THIS REGARD. IN SUPPORT, HE REFERRED CONTENTS OF PARA NOS. 2 AND 5 OF THE ASSESSMENT ORDER AND PA GE NOS. 19 TO 93 WHICH ARE COPIES OF HOUSE TAX NOTICE DATED 05.11.1998 ISSUED BY MUNICIPAL CORPORATION, FARIDABAD FOR THE YEAR 1999 - 2000 SHOWING VALUA TION OF PLOT AT 1000 SQ.YDS. AND CONSTRUCTED COVERED AREA IN SQ. FT. IN BASEMENT, GROUND FLOOR, RCC AREA IN IST FLOOR AND ACC AREA; EXTRACT OF ASSESSMENT REGISTER, MUNICIPAL CORPORATION, FARIDABAD FOR THE YEAR ENDING 31.3.2000 SHOWING ASSESSMENT OF TOTAL B UILT UP RCC AREA OF 29200 SQ. FT. (12700 + 16,500) AND ACC AREA OF 7664 SQ. FT.; NOTICE OF HOUSE TAX ASSESSMENT OF THE BUSINESS PREMISES OF THE ASSESSEE COMPANY FOR THE YEAR 2003 - 04 IN RESPECT OF RCC AREA OF 29200 SQ. FT. AND ACC AREA OF 4500 SQ. FT.; NOTI CE 5 OF HOUSE TAX ASSESSMENT OF THE BUSINESS PREMISES OF THE ASSESSEE FOR THE YEAR 2008 - 09 IN RESPECT OF RCC AREA OF 29280 SQ. FT. AND RCC AREA OF 8600 SQ. FT. ETC. CORRESPONDED WITH THE MUNICIPAL CORPORATION, FARIDABAD REGARDING THE BUILDING IN QUESTION AS WELL AS THE COPY OF THE LEDGER ACCOUNT OF LAND AND BUILDING ACCOUNT FOR THE PERIOD 01.01.2000 TO 31.3.2007 INDICATING THAT SUBSTANTIAL AMOUNT OF CONSTRUCTION/RENOVATION WAS RECORDED DURING THE SAID PERIOD ETC. W ITH ASSISTANCE TO THE CHARTS DRAWN AT PAGE NO S. 16 TO 18 OF THE WRITTEN SYNOPSIS, THE AR ALSO TRIED TO SUBMIT THAT THERE IS NEGLIGIBLE DIFFERENCE IN THE TOTAL AREA OF THE PROPERTY IN QUESTION WORKED OUT BY THE DVO AND THE AREA CONSTRUCTED BY THE ASSESSEE PRIOR TO 31.3.2000. 7. THE LEARNED DR, ON THE O THER HAND, TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT FOR REFERENCE TO THE D.V.O. FOR DETERMINATION OF VALUATION OF A BUILDING/CONSTRUCTION, REJECTION OF BOOKS IS NOT NECESSARY. HE SUBMITTED THAT THE DECISIONS RELIED UPON BY TH E LEARNED AR IN THIS REGARD HAVING DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE ASSESSEE. THE ASSESSEE HAD NOT FILED ANY EVIDENCE IN SUPPORT BEFORE THE A.O. THAT THE BUILDING IN QUESTION WERE CONSTRUCTED BEFORE 01.04.2000. ON THE ISSUE OF VALIDITY OF ASSESSMENT IN THE ABSENCE OF INCRIMINATION MATERIAL FOUND DURING THE COURSE OF SEARCH, THE LEARNED DR SUBMITTED THAT THE STATEMENT S OF SH. DHAN SINGH SHARMA RECORDED DURING THE COURSE OF SEARCH AS WELL AS THE DOCUMENTS FOUND AND SEIZED WERE SUFFICIENT TO SHOW THAT THERE WAS UNDISCLOSED INCOME TO INITIATE PROCEEDINGS UNDER SECTION 153A OF THE ACT. HE SUBMITTED THAT ON THE BASIS OF 6 THOSE DOCUMENTS ONLY , THE ASSESSEE HAD MADE SURRENDER . HE SUBMITTED THAT DURING THE COURSE OF SEARCH THE P ROPERTY IN QUESTION WAS VISITED AND IT WAS FOUND THAT LAVISH CONSTRUCTION HAS BEEN MADE FOR WHICH THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION. THE A.O. HAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRUCTION AND AMOUNT IN DIFFERENCE FOUND BETWEEN THE D. V.O. REPORT AND THE INVESTMENT DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. 8. IN THE REJOINDER, THE LEARNED AR SUBMITTED THAT IN THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 , UNDISPUTEDLY ONLY ONE ADDITION HAS BEEN MADE WHICH IS ON ACCOUNT OF DIFFEREN CE IN CONSTRUCTION COST AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND AS ESTIMATED BY THE D.V.O. IN HIS REPORT. IT IS SUFFICIENT TO ESTABLISH THIS CONTENTION OF THE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO JUSTIF Y THE FRAMING OF ASSESSMENT UNDER SECTION 153A OF THE ACT AND UNDISPUTEDLY THE RETURN FILED FOR THESE ASSESSMENT YEARS WERE PROC ESSED UNDER SECTION 143(1) AND NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED WI THIN THE PRESCRIBED TIME LIMIT AND THUS T HOSE RETURNS HAVE REACHED ITS FINALITY. 9. CONSIDERING THE ABOVE SUBMISSION, THE UNDISPUTED FACT EMERGING IN THE ASSESSMENT FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 ARE THAT NO ADDITION OTHER THAN THE ADDITION ON ACCOUNT OF DIFFERENCE IN CONSTRUCTION AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND AS ESTIMATED BY THE D.V.O. IN HIS REPORT HAS BEEN MADE WHICH IMPLIEDLY SUPPORTS THE CONTENTION OF THE ASSESSEE THAT NO 7 INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS AT THE PREMISES OF THE ASSESSEE. IT IS ALSO AN UN - REBUTTED FACT THAT ON THE DATE OF SEARCH, ASSESSMENTS BASED ON THE RETURN OF INCOME ORIGINALLY FILED FOR THE ASSESSMENT YEARS UND ER CONSIDERATION WERE NOT PENDING AS THE RETURNS OF INCOME FILED FOR THESE ASSESSMENT YEARS AND PROCESSED UNDER SECTION 143(1) OF THE ACT HAD REACHED FINALITY IN THE ABSENCE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PRESCRIBED TIME L IMIT. THUS IN VIEW OF THE ABOVE CITED DECISIONS BY THE LEARNED AR THAT IS IN THE CASES OF ALL CARGO GLOBAL LOGISTICS LTD. VS. CIT (SUPRA) AND OTHERS, WE ARE OF THE OPINION THAT THE ASSESSMENTS FRAMED UNDER SEC. 153A FOR THE ASSESSMENT YEARS UNDER CONSIDERA TION ARE NOT VALID. TO BE MORE SPECIFIC, AS PER THE DECISION OF THE COORDINATE BENCH IN THE CASE OF DCIT VS. DEVI DAYAL PETRO CHEMICALS PVT. LTD. ITA NOS. 5430 TO 5436/DEL/13, C.O. NOS. 83 TO 88/DEL/2014 DATED 10.9.2014, PROCEEDINGS UNDER SEC. 153A CAN B E INITIATED ONLY FOR YEARS TO WHICH ANY SEIZED DOCUMENTS, FOUND DURING THE COURSE OF SEARCH, BELONGS AND NOT FOR THE YEARS TO WHICH SEIZED DOCUMENTS DO NOT BELONG. 10. EVEN ON THE MERITS, T HE SOLE ADDITION MADE IN THESE ASSESSMENT YEARS UNDER CONSIDERATION IS ON ACCOUNT OF DIFFERENCE IN CONSTRUCTION AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND AS ESTIMATED BY THE D.V.O. IN HIS REPORT IS ALSO NOT SUSTAINABLE IN VIEW OF THE ABOVE CITED DECISIONS INCLUDING DECISION OF HON BLE SUPREME COURT IN THE CASE O F SARGAM CINEMA VS. CIT (SUPRA) HOLDING THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER 8 TO THE D.V.O. WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED. IT WAS HELD THAT RELIANCE PLACED ON THE REPORT OF THE D.V.O. IS MISCONCEIVED. SIMILAR ARE THE FACTS OF THE PRESENT CASE BEFORE US THAT THE A.O. HAD REFERRED THE MATTER TO THE D.V.O. FO R THE DETERMINATION OF THE VALUE OF THE PROPERTY IN DISPUTE WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE ABOVE CITED CASE OF SARGAM CINEMA VS. CIT (SUPRA), WE HOLD THAT THE REFERENCE MADE TO THE DVO AND RELIANCE PLACED BY THE A.O. ON THE REPORT OF THE D.V.O. FOR MAKING THE ADDITION IN QUESTION WAS MISCONCEIVED. THE ADDITION S MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE CONSTRUCTION BASED ON THE VALUATION REPORT OF THE D.V.O. ARE THUS HELD AS NOT JUSTIFIED. BESIDES THE DOCUMENTS MADE AVAILABLE AT PAGE NOS. 19 TO 45 OF THE PAPER BOOK I.E. CORRESPONDENCES WITH THE MUNICIPAL CORPORATION, FARIDABAD WHICH INCLUDE N O TICES ISSUED TIME TO TIME BY THEM ALSO SUGGEST THE PROPERTY IN QUESTION AND AREA CONSTRUCTED THEREIN WAS VERY MUCH IN EXISTENCE WELL BEFORE 01.04.2000. WE THUS DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION IN QUESTION MADE DURING THE ASSESSMENT YEARS UNDER CONSIDERATION ON ACCOUNT OF THE AMOUNT IN DIFFERENCE BETWEEN THE VALUE OF CONSIDERATION SHOWN AND DETERMINED BY THE DVO. THE ISSUE S RAISED IN GROUND NOS. 1 TO 4 ARE THUS DECIDED AND ALLOWED IN F AVOUR OF THE ASSESSEE. 11. GROUND NO. 5 HAS NOT BEEN PRESSED HENCE THE SAME DOES NOT NEED ADJUDICATION. 9 12. IN GROUND NO. 6, THE CHARGING OF INTEREST UNDER SECTIONS 234A, 234B AND 234C HAS BEEN QUESTIONED, WHICH IS CONSEQUENTIAL IN NATURE, HENCE DOES NOT NEE D ADJUDICATION. 13. THE APPEALS OF THE ASSESSEE GROUP FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 ARE PARTLY ALLOWED. ITA NO. 2053 /DEL /2011 (A.Y. 2007 - 08): 1. IN GROUND NOS. 1 AND 2, THE ASSESSEE HAS QUESTIONED VALIDITY OF THE ASSESSMENT FRAMED UNDER SECTION 153A READ WITH SECTION 143(3). IN GROUND NO. 3 THE VALIDITY OF ADDITION OF RS. 24,00,000/ - AS UNDISCLOSED INCOME HAS BEEN QUESTIONED. IN GROUND NO. 4, THE ADDITION OF RS. 72,00,000/ - MADE ON ACCOUNT OF UNDISCLOSED STOCK OF THE ASSESSEE HAS BE EN QUESTIONED. IN GROUND NO. 5, THE ACTION OF THE A.O. IN BRINGING TO TAX THE ASSESSEE S SHARE OUT OF THE ALLEGED SURRENDER OF RS. 1.6 CRORES HAS BEEN QUESTIONED. GROUND NOS. 6 AND 7 ARE AGAIN GENERAL IN NATURE SUPPORTING THE IN VALIDITY OF ADDITIONS QUEST ION ED IN GROUND NOS. 3 TO 5 HEREINABOVE. IN GROUND NOS. 8 AND 9, THE VALIDITY OF ADDITION OF RS. 27,76,029/ - ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION UNDER SECTION 69B OF THE ACT BASED ON D.V.O. REPORT HAS BEEN QUESTIONED. IN GROUND NO. 10, THE ACTION OF THE AUTHORITIES BELOW IN NOT GRANTING THE BENEFIT OF TELESCOPING AS PER LAW HAS BEEN QUESTIONED. IN GROUND NO. 11, THE TOTAL ADDITION OF RS. 1,23,76,029/ - ON DIFFERENT HEADS DISCUSSED HEREINABOVE HAS BEEN QUESTIONED. 10 THE ISSUE RAISED IN GROUND N O. 12 REGARDING THE VALIDITY OF CHARGING OF INTEREST UNDER SECTIONS 234A, 234B AND 234C OF THE ACT IS CONSEQUENTIAL IN NATURE. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAIL ABLE ON RECORD AND THE DECISIONS RELIED UPON. GROUND NOS. 1 TO 7 3. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF SEARCH, SOME DOCUMENTS WERE SEIZED BY THE SEARCH TEAM. ON THE BASIS OF THESE DOCUMENTS, IT WAS ALLEGED THAT THE ASSESSEE WAS DOING BUSI NESS OUTSIDE THE BOOKS OF ACCOUNT ALSO AND THUS THE ASSESSEE HAD SUPPRESSED ITS SALES, PURCHASES AND OTHER EXPENSES. THE ASSESSEE OFFERED TO PAY TAXES ON THE UNDISCLOSED INCOME AGGREGATING TO RS. 96 LAKHS OUT OF THE TOTAL OFFER OF RS. 1.60 CRORES. 4. IN SUPPORT OF THE GROUNDS, LEARNED AR SUBMITTED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, NOR THE ASSESSMENT ORIGINALLY FRAMED ON THE BASIS OF RETURN FILED WAS PENDING AND THE SURRENDER WAS MADE AS AN CONDITIONAL OFFER THA T THE AMOUNT OF RS. 1.60 CRORES SHALL COVER ALL THE ALLEGED UNACCOUNTED INVESTMENT IN BUSINESS OF D.S. WOODTECH IN THE ALLEGED UNACCOUNTED ACCUMULATED STOCKS, PRODUCTION, SALES, PROFITS EARNED, EXPENDITURE INCURRED ON ACCOUNT OF UNACCOUNTED PURCHASE, SALAR Y & WAGES AND OTHER EXPENSES FOR UNACCOUNTED PRODUCTION. IT WAS ALSO MADE CLEAR THAT THE SURRENDERED AMOUNT SHALL BE CONSIDERED IN THE ASSESSMENT YEAR 2007 - 08 , AS IF THE ENTIRE SURRENDERED/OFFERED AMOUNT WAS EARNED/INVESTED ON ACCOUNT OF 11 UNACCOUNTED PURCHA SE, UNACCOUNTED PRODUCTION/SALES AND UNACCOUNTED STOCK IN THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2007 - 08 I.E. THE YEAR OF SURRENDER IN TH E HANDS OF D.S. DOORS (P) LTD. A ND D.S. WOODTECH. IT WAS ALSO MADE CLEAR THAT NO INTEREST UNDER SECTIONS 234A, 234B AND 234C WILL BE CHARGED AND N O PENALTY UNDER SECTION 271(1)(C ) OF THE ACT WILL BE LEVIED. THE A.O., HOWEVER, CHARGED THE ABOVE INTEREST AND INITIATED PENALTY PROCEEDINGS. THE LEARNED AR SUBMITTED THAT THERE IS NO ESTOPPEL AGAINST THE LAW EVEN IF THE ASSESSEE AGREES OR CONSENTS FOR AN ADDITION CONTRARY TO LAW, THE A.O. HAS TO DISCHARGE HIS DUTIES OF MAKING FAIR ASSESSMENT OF INCOME AND TO COMPUTE AMOUNT OF TAX PAYABLE AS PER LAW. HE SUBMITTED THAT EVEN SURRENDER AMOUNT CAN BE RETRACTED, IF SURRENDER RE PRESENTS NO INCOME. IN THIS REGARD HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. SRIKANT G. SHAH VS. INCOME TAX OFFICER, (2007) 108 ITD 577 (MUM.) II. PULLANGODE RUBBER PRODUCE CO. VS. STATE OF KERALA AND ANOTHER, 91 ITR 18 (SC) III. S.ARJUN SINGH VS. COMMISSIONER OF WEALTH TAX, 175 ITR 91 (DEL.) 5. THE LEARNED AR SUBMITTED FURTHER THAT THE ASSESSEE HAS NOT EARNED ANY PROFI T FROM ITS UNDISCLOSED BUSINESS RATHER LOSS HAS BEEN INCURRED BY THE ASSESSEE. THIS CONTENTION WAS RAISED BEFORE THE A.O. AS WELL AS BEFORE THE LEARNED CIT(A) BUT THE SAME HAS BEEN REJECTED WITHOUT GIVING ANY COGENT REASONS. HE REFERRED PAGE NO. 23 OF THE PAPER BOOK I.E. COPY OF TRADING ACCOUNT SUBMITTED BY THE ASSESSEE TO THE A.O. IN RESPECT OF UNACCOUNTED SALES, UNACCOUNTED PURCHASES AND UNACCOUNTED EXPENDITURE ON ACCOUNT OF SALARY & WAGES SHOWING LOSS OF RS. 7,142/ - . HE ALSO REFERRED CBDT CIRCULAR F. NO. 12 286/98/2013 - IT (INV. II) DT. 18.12.2014 DIRECTING THE ASSESSING AUTHORITY FOR GATHERING EVIDENCES DURING SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE FOR FRAMING THE ASSESSMENT. 6. THE LEARNED AR SUBMITTED THAT THERE A RE MANY DISCREPANCIES IN THE STOCK TAKING AND WORKING OUT THE UNDISCLOSED SALES AND PROFIT BY THE ASSESSING OFFICER. THESE DISCREPANCIES WERE POINTED OUT BEFORE THE A.O. BUT THE SAME HAS BEEN IGNORED WITHOUT ASSIGNING ANY REASON. IN THIS REGARD, THE LEARNE D AR REFERRED PAGE NOS. 4 TO 6 AND 10 TO 29 OF THE PAPER BOOK WHICH ARE COPI ES OF REPLY AND LETTERS FILED TIME TO TIME BEFORE THE A.O. HE ALSO REFERRED PAGE NOS. 24 TO 44 OF THE PAPER BOOK WHICH ARE THE COPIES OF WRITTEN SUBMISSION FILED TIME TO TIME ON DI FFERENT DATES BEFORE THE LEARNED CIT(A) . HE SUBMITTED THAT IN THE ABOVE STATED LETTERS AND REPLY TO THE A.O., THE ASSESSEE HAD MADE CLEAR THAT ALL PURCHASES, PRODUCTION, SALES, EXPENDITURE, STOCK ETC. HAVE BEEN DULY ACCOUNTED FOR IN THE RETURN FILED. THE A .O. WAS REQUESTED FOR COMPUTATION INDICATING HOW THE VALUE OF STOCK HAS BEEN ARRIVED AT SUCH A HUGE FIGURE SO THAT PROPER REPLY/RECONCILIATION CAN BE FURNISHED AND REPLY ON UNACCOUNTED SALES WAS ALSO SUBMITTED. DOCUMENT AND YEAR - WISE DETAILS OF UNDISCLOSED INVESTMENT AND UNDISCLOSED EXPENDITURES WERE FURNISHED BEFORE THE A.O. OBJECTIONS WITH REGARD TO THE VALUATION OF STOCK WAS SUBMITTED TO THE A.O. WITH THE REQUEST THAT ON THE BASIS OF SAID OBJECTIONS, VALUATION OF STOCK SHALL GET REDUCED TO RS. 3.8 CRORES APPROXIMATELY. IT WAS ALSO POINTED OUT TO THE A.O. THAT THE AREA WHERE STOCK WAS 13 LYING CANNOT BY ANY MEANS AND WAYS STORE SUCH HUGE PILES OF STOCK AS ALLEGED. FURTHER THAT THE STOCK INVENTORY WAS PREPARED BY ONLY TWO PEOPLE , WHO WERE KEPT ON THE J OB AT THE TIME OF SEARCH TO FURNISH THE INVENTORY WITHIN SUCH LESS TIME. THE ASSESSEE ALSO SUBMITTED TO THE A.O. THAT THE PROFIT EARNED ON ALLEGED UNACCOUNTED PURCHASES, SALES, PRODUCTION WAS UTILIZED FOR PURCHASE OF STOCK FOUND AT THE TIME OF SEARCH. THE ASSESS EE HAD ALSO FURNISHED REPLY DATED 26.12.2008 TO THE A.O. MAKING OFFER TO PAY TAX ON AN AMOUNT OF RS. 1.6 CRORES BOTH IN THE CASE OF D. S . DOORS AND D. P . WOODTECH SUBJECT TO NON - CHARGING OF TAX UNDER SECTIONS 234A, 234B AND 234C AND NON LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HE ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF SONIA MAGU & ORS. VS. CIT (2011) 336 ITR 227 (DEL.). THE LEARNED AR REFERRED CONTENTS OF PAGE NOS. 27 - 32 OF THE ASSESSMENT ORDER WITH THIS CONTENTION THAT ALTHOUGH THE ASSESSING OFFICER HA REPRODUCED SOME REPLIED OF THE ASSESSEE BUT HE HAS NOT DEALT WITH ALL THESE DISCREPANCIES AND HAS NOT MET ALL THE CONTENTIONS OF THE ASSESSEE PROPERTY, INSTEAD HE HAS MADE GROUND REMARKS, WITHOUT SPECIFYIN G AS TO WHAT FURTHER EVIDENCE WAS REQUIRED BY HIM. BESIDES, QUERIES HAVE BEEN RAISED AT THE FAG END OF THE ASSESSMENT PROCEEDINGS I.E. ON 26.12.2008 WH E REAS ASSESSING OFFICER HAS BEEN PASSED ON 30.12.2008 (WRONGLY TYPED IN THE ASSESSMENT ORDER AS 30.12.200 7). THUS HARDLY FOUR DAYS TIME WAS GIVEN BY THE ASSESSING OFFICER TO COMPLETE THE REPLY. THE LEARNED CIT(APPEALS) ALSO DID NOT DEAL WITH ALL THE ABOVE CONTENTIONS RAISED BY 14 THE ASSESSEE BEFORE THE ASSESSING OFFICER AND REITERATED BEFORE HIM AND HAS SIMPLY UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER. 7. THE LEARNED CIT( DR ) , ON THE OTHER HAND, SUBMITTED THAT THERE WAS NO PRESSURE OR COERCION ON THE ASSESSEE TO MAKE THE SURRENDER ON THE BASIS OF WHICH THE ADDITIONS QUESTIONED IN GROUND NOS. 3 TO 5 WER E MADE. THE A.O. HAS MADE REFERENCE TO SEVERAL DOCUMENTS/ENTRIES NOT RECORDED IN THE BOOKS WHILE MAKING THE ADDITIONS IN QUESTION. THE ASSESEE WAS NOT ABLE TO FURNISH ANY SATISFACTORY EXPLANATION ABOUT THE CONTENTS OF SEIZED DOCUMENTS. RETRACTION FROM THE SURRENDER WAS NOT MADE WITHIN SHORT TIME AFTER THE S URRENDER . SH E SUBMITTED FURTHER THAT THE PENALTY O N SURRENDERED INCOME COULD BE IMPOSED . 8. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE RAISED IN GROUND NOS. 1 TO 7 , WE FIND THAT DURING THE COURSE OF SEARCH IN THE PREMISES OF THE ASSESSEE SEVERAL DOCUMENTS INCLUDING PRIMA FACIE INCRIMINATING MATERIAL WERE FOUND AND SEIZED. THUS, IT CANNOT BE SAID THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEA RCH TO CONCUR WITH THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT WAS NOT VALID. THE GROUND NOS. 1 AND 2 ARE THUS REJECTED. WE, HOWEVER, FIND SUBSTANCE IN THE CONTENTION OF THE LEARNED AR THAT AN ADDITION CANNOT BE MADE SOLELY ON THE BASIS OF SURRENDERED AMOUNT DEHORS EVIDENCE IN CORROBORATION AND IGNORING SUBSEQUENT RETRACTION THERETO BY THE ASSESSEE WIT H VALID REASON. H E R E THE CASE BEFORE US IS TH A T WHEN SURRENDERED INCOME WAS OBJECTED BY THE ASSESSEE WITH SUFFICIE NT REASON TH E N THE SAME SHOULD HAVE BEEN DULY CONSIDERED BY THE 15 ASSESSING OFFICER AND LEARNED CIT(APPEALS) WHILE MAKING AND UPHOLDING THE ADDITIONS . THE ASSESSEE VIDE SEVERAL LETTERS INCLUDING LETTER DATED 17.10.2008, 2 2 . 1 0 . 2 0 0 8 , 13.11.2008, 05.12.2008, 24.12.2008, 26 .12.2008, WROTE TO THE ASSESSING OFFICER AND WITH WRITTEN SUBMISSIONS DATED 28.1.2010, 24.1.2011 BEFORE THE LEARNED CIT(APPEALS) TRIED TO POINT OUT MANY DISCREPANCIES IN THE STOCK TAKING AND WORKING OUT THE UNDISCLOSED SALES AND PROFIT BY THE ASSESSING OFF ICER BUT THE SAME HAVE BEEN IGNORED WITHOUT ASSIGNING ANY REASON. COPIES OF THESE LETTERS HAVE BEEN M ADE AVAILABLE AT PAGE NOS. 04 & 22, 24 TO 44 OF THE PAPER BOOK. IN THE LETTER DATED 17.10.2008 FILED BEFORE THE ASSESSING OFFICER, THE ASSESSEE H AS SUBMITTED THAT ALL PURCHASES, PRODUCTION, SALE, EXPENDITURE, STOCK ETC. HAVE BEEN DULY ACCOUNTED FOR IN THE RETURN FILED. IN THE LETTER DATED 13.11.2008 TO THE ASSESSING OFFICER, THE ASSESSEE HAD REQUESTED FOR COMPUTATION INDICATING HOW THE VALUE OF STO CK HAS BEEN ARRIVED AT SUCH A HUGE FIGURE SO THAT PROPER RECONCILIATION CAN BE FURNISHED AND SUBMITTED REPLY ON UNACCOUNTED SALES ALSO. IN THE LETTER DATED 05.12.2008 TO THE ASSESSING OFFICER, THE ASSESSEE HAD SUBMITTED DOCUMENTS WISE AND YEAR - WISE DETAILS OF UNDISCLOSED INVESTMENT AND EXPENDITURE. IN LETTER DATED 14.12.2008 TO THE ASSESSING OFFICER THE ASSESSEE HAD RAISED OBJECTIONS WITH REGARD TO THE VALUATION OF STOCK AND REQUESTED THAT ON THE BASIS OF THE SAID OBJECTIONS, VALUATION OF STOCK SHALL GET RE DUCED TO RS.3.8 CRORES APPROXIMATELY. IN THE LETTER DATED 26.12.2008 TO THE ASSESSING OFFICER THE ASSESSEE POINTED OUT THAT THE AREA WHERE THE STOCK WAS LYING, CANNOT BE ANY MEANS AND WAYS, STORE SUCH HUGE PILES OF STOCK AS ALLEGED. IN THIS LETTER, THE 16 ASS ESSEE ALSO SUBMITTED THAT PROFIT EARNED ON ALLEGED UNACCOUNTED PURCHASES, SALES, PRODUCTION WAS UTILIZED FOR PURCHASE OF STOCK FOUND AT THE TIME SEARCH. THE ASSESSING OFFICER HAS REPRODUCED THE CONTENTS OF THE SOME OF THE ABOVE STATED LETTER AND HAS REJECT ED THE SAME MAINLY ON THE BASIS THAT NO EVIDENCE WAS FILED IN SUPPORT WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO FILE EVIDENCE IN SUPPORT. FOR INSTANCE, SOME LETTERS ARE DATED 24.12.2008 AND 26.12.2008 AND THE ASSESSMENT ORDER HAS BEEN PASSED O N 30.12.2008 (WRONGLY TYPED AS 30.12.2007). THE LEARNED CIT(APPEALS) HAS ALSO NOT DEALT WITH THE CONTENTS OF THE ABOVE LETTERS. WE THUS TO MEET THE END OF JUSTICE SET ASIDE THE ISSUES RAISED IN GROUND NOS. 3 TO 7 TO THE FILE OF THE ASSESSING OFFICER TO DEC IDE THESE AFRESH AFTER VERIFYING THE CONTENTS OF THESE LETTERS AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND NOS. 3 TO 7 ARE THUS ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 8 AND 9: 9 . THESE GROUN DS ARE RELATING T O THE GRIEVANCE OF THE ASSESSEE AGAINST THE ADDITION OF RS. 27,76,029/ - ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION UNDER SECTION 69B OF THE ACT. 10. SIMILAR ARGUMENTS HAS BEEN ADVANCED BY THE PARTIES AS ADVANCED BY THEM ON AN IDENTICAL ISSUED HEREINABOVE IN THE APPEALS FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07. 11. ON AN IDENTICAL ISSUE IN THE APPEALS FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 HEREINABOVE, WE AFTER DISCUSSING IT IN DETAIL HAS COME TO THE CONCLUSION THAT THE ACTION OF THE A.O. IN MAKING REFERENCE TO THE D.V.O. FOR DETERMINATION OF THE VALUE OF THE PROPERTY WITHOUT REJECTING THE BOOKS OF ACCOUNT 17 IS NOT JUSTIFIED AND NO ADDITION CAN BE MADE ON THE BASIS OF SUCH VALUATION REPORTED BY THE DVO. THIS VIEW IS WELL SUPPORTED BY THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS. CIT, (2010) 328 ITR 513 (SC). RESPECTFULLY FOLLOWING THE SAME WE DECIDE THE GROUND NOS. 8 AND 9 IN FAVOUR OF THE ASSESSEE WITH DIRECTION TO THE A.O. TO DELETE THE ADDITION OF RS. 27,76,029/ - MADE IN THIS REGARD. GROUND NO. 10 12. IT RELATES TO THE GRIEVANCES OF THE ASSESSEE AGAINST THE ACTION OF THE LEARNED AUTHORITIES BELOW IN NOT ALLOWING THE BENEFIT OF TELESCO PING AS PER LAW. 13. IN SUPPORT OF THIS GROUND, LEARNED AR SUBMITTED THAT THE BENEFIT OF TELESCOPING OUGHT TO HAVE BEEN ALLOWED BY THE AUTHORITIES BELOW IN RESPECT OF PROFITS EARNED DURING THE ASSESSMENT YEARS 2001 - 02 TO 2007 - 08 AND ADDITION OF RS. 12 ,00,000/ - (OUT OF RS. 20,00,000) OUT OF BROUGHT FORWARD AMOUNT/STOCKS AVAILABLE WITH THE AS SESSEE COMPANY AS ON 01.04.2000 AND ALSO IN RESPECT OF ASSESSEE S SHARE OF RS. 60,00,000/ - TOWARDS DIFFERENCE IN THE ALLEGED UNACCOUNTED ACCUMULATED STOCK AS PER THE BOOKS AND WRONGLY CALCULATED AT THE TIME OF SEARCH. 14. LEARNED DR OPPOSED THE ABOVE SUBMISSION. 15. WE FIND THAT AN IDENTICAL ISSUE RAISED BEFORE THE LEARNED CIT(A) VIDE GROUND NO. 4(H) HAS REMAINED TO BE ADJUDICATED UPON BY THE LEARNED CIT(A), WE THUS, IN THE INTEREST OF JUSTICE, REMAND THE MATTER TO THE FILE OF 18 LEARNED A.O. TO ADDRESS THE ISSUE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 16. THE OTHER GROUNDS I.E. 11 AND 12 ARE GENERAL AND CONSEQUENTIAL IN NATURE HENCE DOES NOT NEED INDEPENDENT ADJUDICATION. 17. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 18. IN SUMMARY, THE APPEALS RELATING TO THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 ARE ALLOWED AND THAT FOR THE ASSESSMENT YEAR 2007 - 08 IS PARTLY ALLOWED. D.S. WOODTECH PVT. LTD. ITA NOS. 2273 TO 2275& 2052/DEL /2011 : ( A . Y R S: 2004 - 05 TO 200 6 - 0 7 ) : 19. IN THESE APPEALS, IN GROUND NO.1, THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE VALIDITY OF ASSESSMENT FRAMED UNDER SEC. 153A READ WITH SECTION 143(3) OF THE INCOME - TAX ACT, 1961 UPHELD BY THE LEARNED CIT(APPEALS). THE LEARNED AR, HOWEVER, HAS NOT PRESSED THIS GROUND DURING THE COURSE OF HEARING. THE SAME IS ACCORDINGLY REJECT ED. 20. IN GROUND NOS. 2 TO 4 FOR THE ASSESSMENT YEAR 2004 - 05 , THE ASSESSEE HAS QUESTIONED VALIDITY OF ADDITION OF RS.1,05,000 ON ACCOUNT OF CASH RECEIPT UPHELD BY THE LEARNED CIT(APPEALS) ON THE BASIS THAT INCORRECT FACTS HAVE BEEN RECORDED AND THE ASSE SSING OFFICER HAS MADE ADDITION WITHOUT PROVIDING OPPORTUNITY OF CROSS - EXAMINATION AND WITHOUT CONFRONTING THE ENTIRE ADVERSE MATERIAL USED AGAINST THE ASSESSEE WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF 19 HEARING. THE GROUND NO. 5 IS GENERAL IN NATURE AND IN GROUND NO.6, CHARGING F INTEREST UNDER SEC. 234A, 234B AND 234C OF THE INCOME - TAX ACT, 1961 HAS BEEN QUESTIONED. 21. SIMILAR ARE THE GROUNDS FOR THE REMAINING ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 WITH THE DIFFERENCE IN AMOUNT OF ADDITION. IN ASSESSMENT YEAR 2005 - 06, THE ADDITION MADE ON ACCOUNT OF CASH RECEIPT IS RS.1,64,590 AND IN ASSESSMENT YEAR 2006 - 07, THE ADDITION MADE ON THIS ACCOUNT IS RS. 4 LACS. 22. THE LEARNED AR ADVANCED HIS ARGUMENTS IN SUPPORT OF THE ISSUE RAISED ON THE VALIDITY OF ADDITIO N MADE ON ACCOUNT OF CASH RECEIPTS. HE SUBMITTED THAT THERE WAS NO UNDISCLOSED/UNACCOUNTED SALES/CASH RECEIPTS IN THE SEIZED DOCUMENTS. THE ADDITION IN QUESTION HAS BEEN MADE ON THE BASIS OF ENTRIES FOUND RECORDED ON THE DOCUMENTS CONTAINING ACCOUNT OF SHR I PRAVEE N JAIN. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT SHOWN THE CASH RECEIPTS IN ITS BOOKS OF ACCOUNT AND MADE ADDITION OF THAT AMOUNT. REFERRING THE DIFFERENT PAGE NOS. 1 TO 22 OF ANNEXURE A08 ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE IN THESE ASSESSMENT YEARS; THE LEARNED AR SUBMITTED THAT PAGE 1 TO 7 CONTAINS SOME PHONE NUMBERS OF PARTIES AND RATES ETC., PAGE NOS. 1 TO 10 ARE BLANK, PAGE NO. 11 IS ROUGH ESTIMATE GIVEN TO PARTIES, THE PAGE NO.12 IS A BLANK PAPER; PAGE NO.13 CONTAINS TR ANSACTION WITH MR. K. P. DASS; PAGE NO. 14 CONTAINS TRANSACTION OF MR. K.P. SINGHLA; PAGE NO. 15 CONTAINS TRANSACTION OF MR. 20 PRAVEEN JAIN. THERE ARE ALSO SOME ESTIMATES OF SHRI RAJ KUMAR GOSWAMI; PAGE NO. 16 CONTAINS AN ADVANCE OF RS. 10, 000 OF MR. T.K. B ANSAL WHICH WAS REFUNDED BACK ON THE SAME DAY; PAGE NO. 17 CONTAINS TRANSACTION OF MR. SATISH SHARMA; PAGE NO. 18 CONTAINS SOME ROUGH FIGURES; PA G E NO. 19 CONTAINS SOME DATES, PAGE NO. 20 CONTAINS TRANSACTION OF MR. R.K. RAN E; PAGE NO.21 CONTAINS ENTRIES O F MR. SATENDER KUMAR AND PAGE NO. 22 CONTAINS SOME PHONE NUMBERS. THE LEARNED AR SUBMITTED THAT SO FAR AS PAGE NO. 13 IS CONCERNED, IT CONTAINS TRANSACTION WITH MR. K.P. D AS WHO IS BROTHER OF MR. S.K. DASS AND ALL TRANSACTIONS WITH THEM HAVE BEEN COUNTED F OR IN THE NAME OF MR. S.K. DASS AND DULY REFLECTED IN THE BOOKS OF ACCOUNT. ON PAGE NO.12 , AMOUNT OF RS.9,873.05 IS SOME ESTIMATE AS WRITTEN ON THE PAGE AND AMOUNT OF RS.1500, RS. 2,000, RS.2,000 AND RS.2,000 MAY BE SOME CASH RECEIVED BUT THERE IS NO MENT ION OF DATE WITH AMOUNT SO ALL THE AMOUNTS WOULD HAVE BEEN RECEIVED ON THE SAME DATE. SO IT CAN BE ASSUMED THAT TOTAL AMOUNT OF RS.7,500 IS INCLUDED IN THE ENTRIES OF CASH RECEIVED OF ANY DUES AS MENTIONED IN THE LEDGER ACCOUNT. HE SUBMITTED THAT THE COPY OF SAID LEDGER ACCOUNT HAS BEEN MADE AVAILABLE AT PAGE NOS. 1 AND 2 OF THE PAPER BOOK. HE SUBMITTED FURTHER THAT THERE IS ONE MORE TRANSACTION OF RS.10,000 ON PAGE NOS. 13 RELATING TO MR. R.P. JAIN. ALL TRANSACTIONS WITH MR. R.P. JAIN HAVE DULY BEEN ACCOUN TED FOR IN THE BOOKS OF ACCOUNT, A COPY OF LEDGER ACCOUNT HAS BEEN MADE AVAILABLE AT PAGE NO. 3 OF THE PAPER BOOK. REGARDING PAGE NO.14, THE LEARNED AR SUBMITTED THAT IT CONTAINS TRANSACTION OF MR. R.P. SINGHLA AS MENTIONED IN THE BOOKS OF ACCOUNT BUT THE ASSESSING OFFICER HAS 21 TREATED THE CASH OF RS.10,000 AS RS. 1 LAC WITHOUT ANY BASIS, COPY OF LEDGER ACCOUNT IN THIS REGARD HAS BEEN MADE AVAILABLE AT PAGE N. 4 OF THE PAPER BOOK. PAGE NO. 15 CONTAINS TRANSACTION OF MR. PRAVEEN JAIN. THERE IS SOME ESTIMATE O F RS.17,815.70 BUT TOTAL SALES TO MR. PRAVEEN JAIN IS RS.35,833.86 . AGAIN ST THIS SALE, TOTAL AMOUNT OF RS.35,833.86 HAS BEEN RECEIVED AND HAS BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNT. IN SUPPORT, HE REFERRED PAGE NO. 5 OF THE PAPER BOOK I.E. COPY OF LED GER ACCOUNT. HE SUBMITTED FURTHER THAT THERE ARE ALSO SOME ESTIMATE OF RAJ KUMAR GOSWAMI AND ESTIMATE CANNOT BE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE LEARNED AR SUBMITTED FURTHER THAT PAGE NO. 17 CONTAINS TRANSACTION OF MR. SATISH SHARMA WHICH IS DULY REFLECTED IN THE BOOKS OF ACCOUNT AND REFERRED PAGE NO. 6 OF THE PAPER BOOK WHEREIN THE COPY OF THE SAID LEDGER ACCOUNT HAS BEEN MADE AVAILABLE. REGARDING THE CONTENTS OF PAGE NO. 20, THE LEARNED AR SUBMITTED THAT THERE IS TRANSACTION OF MR. R.K. RANE AND ALL THE TRANSACTIONS WITH MR. R.K. RANE HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND REFERRED COPY OF LEDGER ACCOUNT IN SUPPORT MADE AVAILABLE AT PAGE NO. 7 OF THE PAPER BOOK. REGARDING PAGE NO. 21, THE LEARNED AR SUBMITTED THAT IT CONTAINS CH EQUE ENTRIES OF MR. SATENDER KUMAR WHICH HAS BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. IN THE ASSESSMENT YEAR 2006 - 07, THE LEARNED AR SUBMITTED THAT THE ADDITION HAS BEEN MADE AND SUSTAINED BY THE AUTHORITIES BELOW ON THE BASIS OF ENTRIES RECORDED O N PAGE NO. 7 OF ANNEXURE A6 WITHOUT VERIFYING THE CORRECT FACTS. 22 23. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WITH THIS CONTENTION THAT THE ADDITIONS IN QUESTION HAVE BEEN MADE BASED ON THE DOCUMENTS FOUN D AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS TO WHICH THE ASSESSEE WAS HAVING NO EXPLANATION. 24. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT IN THE ASSESSMENT YEAR 2004 - 05, THE ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS OF ENTRIES FOUN D RECORDED ON PAGE NO. 15 OF ANNEXURE 8 AND IN THE ASSESSMENT YEAR 2005 - 06, THE ADDITION HAS BEEN MADE ON THE BASIS OF ENTRIES FOUND RECORDED ON PAGE NOS. 11, 14 & 15 OF ANNEXURE A - 8 AND IN THE ASSESSMENT YEAR 2006 - 07, THE ADDITION HAS BEEN MADE ON THE BAS IS OF ENTRIES RECORDED ON PAGE NO. 7 OF ANNEXURE A - 6. 25. THE RELEVANT FACTS ARE THAT ON 07.02.2007, SEARCH WAS ALSO CONDUCTED AT THE RESIDENTIAL PREMISES OF SHRI DHARAM PAL SHARMA, DIRECTOR OF THE ASSESSEE COMPANY AND VARIOUS DOCUMENTS AS NOTED IN THE A SSESSMENT ORDER WERE SEIZED FROM THE PREMISES OF THE ASSESSEE. FOR THE ASSESSMENT YEAR 2004 - 05, THE ASSESSING OFFICER OBSERVED ENTRIES ON PAGE NO. 15 OF THE ANNEXURE A - 8 CONTAINING AMOUNT OF SHRI PARVEEN JAIN. HE NOTED THAT ASSESSEE HAS NOT SHOWN THE CASH RECEIPTS OF RS.1,05,000 IN ITS BOOKS OF ACCOUNT. THE ASSESSING OFFICER OBSERVED THAT THE CASH PAYMENTS TOTALING TO RS.25,000 SHOULD BE READ AS RS.2,50,000 , HAVE NOT BEEN REFLECTED IN THE BOOKS. THE ASSESSEE OPPOSED THE ADDITION OF RS.1,05,000 BY THE ASSESS ING OFFICER ON THE BASIS THAT IT HAS BEEN 23 MADE ON WHIMS AND HIS ASSUMPTION BY THE ASSESSING OFFICER WHO HAD DECODED THE ALLEGED CODED FORM USED BY THE ASSESSEE WITHOUT ANY SUPPORTING EVIDENCE. THE LEARNED CIT(APPEALS) DID NOT AGREE AND UPHELD THE ADDITION OF RS.1,05,000. 26. IN THE ASSESSMENT YEAR 2005 - 06, THE ASSESSING OFFICER WITH SIMILAR OBSERVATIONS OF DECODING OF FIGURE CON T AIN IN PAGE NOS. 11, 14 AND 15 OF ANNEXURE A - 8 REGARDING ENTRIES RELATING TO SHRI R..P. SINGHLA, SHRI RAMESH BANSAL AND SHRI PRAVEEN JAIN HAS MADE ADDITION OF RS.1,64,590. THE ASSESSING OFFICER NOTED CASH PAYMENTS TOTALING TO RS.10,000 RELATING TO SHRI R.P. SINGHLA AS RS.1 LAC NOT REFLECTED IN THE BOOK. THE CASH PAYMENT OF RS.2,000 RELATING TO SHRI RAMESH BANSAL WAS RE AD AS RS.20,000 NOT REFLECTED IN THE BOOKS AND CASH PAYMENTS TOTALING TO RS.25,000 RELATING TO SHRI PARVEEN JAIN HAS BEEN TAKEN AS RS.2,50,000 , NOT REFLECTED IN THE BOOKS. THE LEARNED CIT(APPEALS) DID NOT AGREE WITH THE CONTENTION OF THE LEARNED AR THAT TH E ADDITION IN QUESTION HAS BEEN MADE ON WHIMS AND ASSUMPTION BY THE ASSESSING OFFICER WHO HAS DECODED THE EARLIER CODE FORM USED BY THE ASSESSEE WITHOUT ANY SUPPORTING EVIDENCE. THE LEARNED CIT(APPEALS) DID NOT AGREE AND HAS UPHELD THE ADDITION. 27. IN ASSESSMENT YEAR 2006 - 07, THE ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS OF ENTRIES RECORDED ON PAGE NO. 7 OF ANNEXURE A - 6 WITH THESE OBSERVATIONS THAT THE ENTRIES RELATING TO D.C. KOTHARI AND DEMCO SOLUTION (P) 24 LTD. ARE IN CODED FORM. THE CASH PAY MENT OF RS. 10,000 IN THE CASE OF SHRI D.C. KOTHARI HAS BEEN DECODED BY HIM AS RS.1 LAC NOT REFLECTED IN THE BOOKS OF ACCOUNT. HE NOTED FURTHER THAT ENTRIES OF CHEQUES PAYMENT OF RS.50,000, RS.1,50,000 AND RS.1,11,538 ARE, HOWEVER, REFLECTED IN THE BOOKS. IN THE CASE OF DEMCO SOLUTION (P) LTD., HE READ THE CASH AMOUNT OF RS.30,000 AS RS.3 LACS NOT SHOWN IN THE BOOKS OF ACCOUNT BY ADOPTING THE SAME DECODING METHOD. LEARNED CIT(APPEALS) UPHELD THE ADDITION OF RS.1 LAC MADE ON ACCOUNT OF DECODING OF RECEIPT FR OM SHRI D.C. KOTHARI BY FOLLOWING HIS EARLIER DECISION FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 BUT HE UPHELD THE ADDITION OF RS.30,000 OUT OF RS.3 LACS MADE ON ACCOUNT OF RECEIPT FROM DEMCO SOLUTION (P) LTD. WITH THIS OBSERVATION THAT RS.5,000 AND RS. 25,000 WHICH WERE WITHOUT DECIMAL AND ZERO THEREAFTER CANNOT BE TREATED AS RS.50,000 AND RS.2,50,000 TOTALING TO RS.3 LACS AND CONSEQUENTLY THE ADDITION OF RS.3 LACS CANNOT BE MADE. SINCE AMOUNT OF RS.5000 AND RS.25,000 TOTALING TO RS.30,000 STILL REMAINED UNEXPLAINED, HENCE, THE ADDITION OF RS.30,000 WAS JUSTIFIED , HELD THE LEARNED CIT(APPEALS). 28. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THE AUTHORITIES BELOW HAVE JUSTIFIED DECODING OF THOSE FIGURES BY MAKING ADDITION OF ZERO TO THE FIGURE WHERE AFTER RECORDING THE FIGURE, A ZERO WAS MENTIONED AFTER PUTTING DECIMAL E.G., IF RS.1, 000 WAS WRITTEN AS RS.1 00 0 .0 , THE ASSESSING OFFICER HAD DECODED THE FIGURE AS RS.10,000. LEARNED CIT(APPEALS) UPHELD THIS ACTION OF THE ASSESSING OFFICER. BUT HE DID NOT AGREE WITH THE ASSESSING OFFICER FOR ADOPTING 25 SIMILAR DECODING OF FIGURE WHERE RS.1,000 WAS WRITTEN AND THEREAFTER NO DECIMAL WITH ZERO WAS PUT . W E , HOWEVER, FIND SUBSTANCE IN THE CONTENTIONS OF THE LEARNED AR THAT THERE WAS NO CONCRETE BASIS FOR DOING SO BY THE AUTHORITIES BELOW FOR THE DECODING OF THE FIGURE. THE ADDITIONS IN QUESTION ARE THUS NOT SUSTAINABLE IN ABSENCE OF ANY BASIS PARTICULARLY IN A SEA RCH PROCEEDINGS UNDER SEC. 153A OF THE ACT. THESE ADDITIONS ARE ACCORDINGLY DELETED. THE GROUND NOS. 2 TO 4 ARE ACCORDINGLY ALLOWED. 29. GROUND NO.5 IS GENERAL IN NATURE AND IN GROUND NO.6, CHARGING OF INTEREST UNDER SEC. 234A, 234B AND 234C OF THE INCOME - TAX ACT, 1961 HAS BEEN QUESTIONED, WHICH IS CONSEQUENTIAL IN NATURE AND DOES NOT NEED AN INDEPENDENT ADJUDICATION. 30. IN RESULT, THE APPEALS ARE ALLOWED. ITA NO. 2052/DEL/2011 (A.Y. 2007 - 08) : 31. IN GROUND NO.1, THE ASSESSEE HAS QUESTIONED VALIDITY OF ASSESSMENT FRAMED UNDER SEC. 153A READ WITH SE. 143(3) OF THE INCOME - TAX ACT, 1961 WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT SERVING VALID NOTICES, RECORDING SATISFACTION AND OBTAINING REQU I S I T E APPROVAL AS WELL AS WITHOUT COMPLYING WITH THE OTHER MANDATORY CONDITIONS ENVISAGED UNDER THE ACT. 32. IN GROUND NO.2, IT HAS BEEN ALLEGED THAT THE ASSESSMENT IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BY RECORDING INCORRECT FACTS AND FINDINGS. 26 33. IN GROUND NO.3, THE ADDITION OF RS.16 LACS ON ACCOUNT OF UNDISCLOSED INCOME UPHELD BY THE LEARNED CIT(APPEALS) HAS BEEN QUESTIONED. 34. IN GROUND NO.4, THE ADDITION OF RS.48 LACS BY TREATING IT AS UNDISCLOSED STOCK OF THE ASSESSEE UPHELD BY THE LEARNED CIT(APPEALS) HAS BEEN QUESTIONED. 35. IN GROUND NO. 5, THE ACTION OF THE LEARNED CIT(APPEALS) IN UPHOLDING THE ASSESSMENT ORDER IN BRINGING TO TAX THE ALLEGED ASSESSEE S SHARES OUT OF ALLEGED SURRENDER OF RS.1.6 CRORES AS SURRENDERED HAS BEEN QUESTIONED. 36. GROUND NOS. 6 & 7 ARE IN SUPPORT OF THE ABOVE GROUND NOS. 3 TO 5 IN A MORE SPECIFIC WAY. IN GROUND NO. 8 NON - GRANTING OF THE BENEFIT OF TELES COPING HAS BEEN QUESTIONED. 37. IN GROUND NO.9, THE ADDITION OF RS.64 LACS BY TREATING IT AS UNDISCLOSED INCOME/INVESTMENT OF THE ASSESSEE HAS BEEN QUESTIONED. IN GROUND NO. 10, CHARGING OF INTEREST UNDER SEC. 234A, 234B AND 234C OF THE ACT HAS BEEN DISP UTED. 38. SO FAR AS ISSUE RAISED IN GROUND NOS. 1 AND 2 ON THE VALIDITY OF ASSESSMENT FRAMED UNDER SEC. 153A READ WITH SEC. 143(3) OF THE ACT AND VIOLATION OF 27 PRINCIPAL OF NATURAL JUSTICE BY THE ASSESSING OFFICER IS CONCERNED, THE PARTIES HAVE ADOPTED SI MILAR ARGUMENTS AS ADVANCED BY THEM IN THE CASE OF D.S. DOORS (P) LTD. HEREINABOVE IN ITA NO.2053/DEL/2011 FOR THE ASSESSMENT YEAR 2007 - 08. FOLLOWING THE VIEW TAKEN THEREIN, WE DO NOT FIND ANY SUBSTANCE IN THESE GROUNDS ON THE ISSUE, THE SAME ARE ACCORDING LY REJECTED. 39. GROUND NOS. 3 TO 7, IN SUPPORT OF GROUND NOS. 3 AND 4 QUESTIONING THE ADDITION OF RS.16 LACS ON ACCOUNT OF UNDISCLOSED INCOME AND RS.48 LACS MADE ON ACCOUNT OF UNDISCLOSED STOCK, THE LEARNED AR SUBMITTED THAT BOTH THE ADDITIONS HAVE BEEN MADE BY RECORDING INCORRECT FACTS AND FINDINGS. HE SUBMITTED THAT SURRENDER WAS MADE BY THE ASSESSEE TO GAIN PEACE OF MIND AND TO GET THE ISSUE SETTLED AT THE ASSESSMENT STAGE AND HAD MADE THE DISCLOSURE SUBJECT TO IMMUNITY FROM THE PENALTY AND CHARGING OF INTEREST. THE ASSESSING OFFICER HAS NOT ACCEPTED THE SURRENDER IN ITS TOTALITY. THE ASSESSING AUTHORITY ACCEPTED THE DISCLOSURE OF THE ASSESSEE BECAUSE THERE WAS NOTHING ON RECORD SO QUOTING THE UNDISCLOSED EXPENDITURE/INCOME/INVESTMENT ETC. AS THE DEPARTMENT FAILED TO BRING FORTH ANY MATERIAL IN SUPPORT. NOTHING IS LEFT THEREAFTER TO SUPPORT THE ALLEGATIONS AND SUBSEQUENT ADDITIONS MADE TO THE T UNE OF RS.64 LACS (RS.48 LACS PLUS RS.16 LACS). IN SUPPORT OF THE CONTENTIONS THAT THE ASSESSING OFFICER HAS RECORDED INCORRECT FACTS AND HAVE NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE POINTING OUT THE CORRECT FACTS RELATING TO THE ADDITION, THE LEAR NED AR HAS ADOPTED THE SAME ARGUMENTS AS ADVANCED BY HIM IN THE CASE OF D.S. DOORS PVT. LTD. FOR 28 THE ASSESSMENT YEAR 2007 - 08 ADJUDICATED HEREINABOVE. THE LEARNED AR POINTED OUT FURTHER THAT FOLLOWING HIS ACTION IN THE CASE OF D.S. DOORS PVT. LTD. FOR THE A SSESSMENT YEAR 2007 - 08 ON IDENTICAL ISSUE S , THE LEARNED CIT(APPEALS) HAS UPHELD THE ACTION O F THE ASSESSING OFFICER AND SUSTAINED THE ABOVE ADDITION S . 40. THE LEARNED DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE S. 41. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE LEARNED CIT( APPEALS) HAS DECIDED THE ISSUE RAISED IN THE GROUNDS IN QUESTION SIMPLY FOLLOWING THE FIRST APPELLATE ORDER FOR THE ASSESSMENT YEAR 2007 - 08 IN THE CASE OF D.S. DOORS PVT. LTD., ADJUDICATED HEREINABOVE. FOLLOWING THE DECISION TAKEN THEREIN ON AN IDENTICAL ISSUES, WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUES RAISED IN GROUND NOS. 3 TO 9 RELATING TO THE ADDITION OF RS.64 LACS AND THE RELATED CONTENTIONS RAISED IN THESE GROUNDS AFRESH AFTER VERIFYING THE SUBMISSIONS OF THE ASSESSEE MADE TIME TO TIME BEFORE THE AUTHORITIES BELOW DURING ASSESSMENT AND FIRST APPELLATE PROCEEDINGS AND AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THIS REGARD. THESE GROUNDS ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 42 . GROUND NO.10 IS RELATING TO CHARGING OF INTEREST UNDER SEC. 234A, 234B AND 234C OF THE INCOME - TAX ACT, 1961 WHICH IS CONSEQUENTIAL IN NATURE, HENCE, DOES NOT NEED INDEPENDENT ADJUDICATION. 29 4 3 . IN RESULT, APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 44. IN SUMMARY, THE APPEALS RELATING TO ASSESSMENT YEARS 2001 - 02 TO 2005 - 06 ARE ALLOWED AND THOSE RELATING TO ASSESSMENT YEAR 2007 - 08 ARE PARTLY ALLOWED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 1 3 .0 3 .2015 . S D / - S D / - ( T.S. KAPOOR ) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 2 . 0 3 . 2015. *MOHAN LAL* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE DRAFT DICTATED ON ( R K & M L ) 27.0 1 .2015 DRAFT PLACED BEFORE AUTHOR 27.02.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 1 2 .0 3 .2015 APPROVED DRAFT COMES TO THE SR.PS/PS 1 2 . 0 3 . 2 0 1 5 KEPT FOR PRONOUNCEMENT ON 1 2 . 0 3 . 2 0 1 5 FILE SENT TO THE BENCH CLERK 1 2 .0 3 .2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.