ACIT, Circle-2(1), Cuttack V. M/S- Computer Lab, Cuttack

ITA 207/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2719 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 25-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Keywords: Unexplained expenditure; Business income; Additional evidence; Tax effect; TDS
• Section: 69C; 143(3); 201; 251; 208; 13; 22

Judgement Text

P A G E 1 | 37 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO S . 207, 208 & 209 /CTK/201 9 ASSESSMENT YEAR S : 2011 - 12, 2012 - 13 & 2013 - 14 ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), CUTTACK VS. M/S. COMPUTER LAB, 2 ND FLOOR, MEGHAMALA COMPLEX, BAJRAKABATI ROAD, CUTTACK PAN/GIR NO. AADFC 0750 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUNIL MISHRA, ADV REVENUE BY : SHRI M.K.GAUTAM, CIT DR DATE OF FINAL HEARING: 20 / 11 / 20 20 DATE OF PRONOUNCEMENT: 26 / 1 1 /20 20 O R D E R PER BENCH TH ESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE SEPARATE ORDER S OF THE CIT(A ), CUTTACK ALL DATED 28.3.2019 FOR THE ASSESSMENT YEAR S 2011 - 12, 2012 - 13 & 2013 - 14, RESPECTIVELY . 2. THE DEPARTMENT HAS TAKEN COMMON GROUNDS IN ALL THESE APPEALS, HENCE, THEY ARE CLUBBED TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER, FOR TH E SAKE OF CONVENIENCE AND BREVITY. 3. IT IS PERTINENT TO NOTE THAT AGAINST THE ASSESSMENT ORDER, THE ASSESSEE HAD FILED APPEAL BEFORE THE LD CIT(A), WHO PARTLY ALLOWED THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 2 | 37 APPEAL. BEING AGGRIEVED, THE DEPARTMENT HAS COME IN APPEAL BEFORE THE TRIBUNAL, WHE REAS AGAINST THE PARTIAL CONFIRMATION OF ADDITION, ON A QUERY BY THE BENCH, LD A.R. SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY APPEAL . 4 . GROUND NOS. 1 & 2 FOR THE ASSESSMENT YEAR 2011 - 12, GROUND NOS.1,2 & 3 FOR ASSESSMENT YEAR 2012 - 13 AND GROUND NOS.1 & 2 FOR THE ASSESSMENT YEAR 2013 - 14 ARE COMMON, EXCEPT VARIANCE IN ADDITION. HENCE, AS AGREED BY BOTH THE PARTIES, WE ADJUDICATE THE APPEAL FOR ASSESSMENT YEAR 2012 - 13 AS A LEAD CASE. GROUND NOS.1, 2 & 3 FOR ASSESSMENT YEAR 2012 - 13 READ AS FOLLOWS: 1. UNDISCLOSED RECEIPTS OF RS.4,23,65,658/ - FROM ECIL & BEL GROUND NO. 1 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN GIVING WRONG FINDING OF FACT THAT THE UNDISCLOSED TURNOVER OF RS.4,23,65,658/ - [RS.2,94,39,408 FROM ELECTRONICS CORPORATION OF INDIA LIMITED (ECIL) + RS. 1,29,26,250 FRO M BHARAT ELECTRONICS LIMITED (BEL)] IS NOT TAXABLE AS IT HAD NOT ACCRUED TO THE ASSESSEE, IGNORING THE FACT THE ASSESSEE HAD DULY RAISED BILLS FOR SUCH AMOUNT INCLUDING SERVICE TAX AFTER HAVING EXECUTED THE WORK AND THE CONTRACTEES I.E. ECIL AND BEL HAD DU LY CREDITED THE ABOVE AMOUNTS TO THE ASSESSEE'S ACCOUNT AND HAD DEDUCTED TDS ON SUCH UNDISCLOSED TURNOVER, WHICH THE ASSESSEE HAD ALSO DULY CLAIMED IN ITS RETURN OF INCOME. GROUND NO. 2 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) O UGHT TO HAVE CONFIRMED THE ABOVE ADDITIONS OF RS.4,23,65,658/ - MADE BY THE ASSESSING OFFICER KEEPING IN VIEW THE FACT THAT THE ASSESSEE WAS FOLLOWING 'MERCANTILE' SYSTEM OF ACCOUNTING AND THEREFORE THE ENTIRE AMOUNT OF TURNOVER FOR WHICH BILLS WERE RAISED SHOULD HAVE BEEN BROUGHT TO TAX, MORE SO CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT DISCLOSED ANY 'WORK - IN - PROGRESS' FOR THE AMOUNT FOR WHICH PAYMENT WAS NOT RECEIVED, EVEN THOUGH CORRESPONDING WORK HAD BEEN COMPLETED. THE FAILURE OF THE CIT(A) TO ADOP T 'MATCHING PRINCIPLE' AS ELABORATED IN THE ORDER OF ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 3 | 37 THE ASSESSING OFFICER, HAS SERIOUSLY COMPROMISED THE INTEREST OF REVENUE. GROUND NO. 3 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT CONFIRMING THE ADDITION OF RS. 4,23,65,658/ - , WHEN THE ASSESSEE ADMITTEDLY FOLLOWS 'MERCANTILE' SYSTEM OF ACCOUNTING AND THE GROSS VALUE OF BILLS RAISED BY THE ASSESSEE HAD BEEN DULY CREDITED TO ITS ACCOUNT AND TDS HAD BEEN DEDUCTED ON THE BILL VALUE, AS CONFIRMED BY THE PRINCIPAL, NAME LY, M/S ECIL. A COPY OF REPLY DT.28.03.2015 RECEIVED FROM ECIL IS ENCLOSED IN SUPPORT OF THE SAME AS ANNEXURE - 1. 5 . BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF PROVIDING I.T ENABLED SERVICES UNDER THE NAME AND STYLE OF M/S. COMPUTER LAB. THE RETURN OF INCOME FOR AY : 201 2 - 1 3 WAS FILED ON 31 .3.2012 DECLARING A TOTAL I NCOME OF RS. 1,09,41,480 . DURING THE COURSE OF THE RE - ASSESSMENT PROCEEDINGS, THE AO EXAMINED THE DETAILS OF GROSS RECEIPTS UNDER THE HEAD ' DATA PROCESSING CHARGES' OF RS.12,99,46,800/ - , RECEIVED FROM VARIOUS PARTIES , VIZ; OF FICE OF THE COLLECTOR, CUTTACK , DEPARTMENT OF POSTS, GOVERNMENT OF INDIA, THE OFFICE OF THE COLLECTOR, MAYURBHANJ, HOME ELECTRIC DEPARTMENT, BHUBANESWAR AND OTHERS. WHILE PERUSING THE ACCOUNT OF ONE SUCH PARTY NAMELY, ELECTRONICS CORPORATION OF INDIA LTD (M/S. ECIL), THE AO OBSERVED THAT THE ASSESSEE HAD DECLARED RECEIPTS OF RS. 9,28,19,340 / - AGAINST A TOTAL BILL VALUE OF RS. 12,65,16,555 / - . SIMILARLY, FOR ANOTHER PARTY NA MELY, M/S. BHARAT ELECTRONICS LIMITED (BEL), THE ASSESSEE HAD DECLARED RECEIPTS OF RS.3,01,61,250/ - AS AGAINST TOTAL BILL VALUE OF RS.4,30,87,500/ - . THE ASSESSEE EXPLAINED THAT THE REASON FOR THESE RESTRICTED CLAIMS WAS THE CONDITION IMPOSED ON THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 4 | 37 ASSESS EE UNDER THE CLAUSE 'TERMS OF PAYMENT' OF THE WORK ORDERS GRANTED BY M/S. ELECTRONICS CORPORATION OF INDIA LTD. ON ANALYSIS OF THE 'TERMS OF PAYMENT', IT WAS OBSERVED THAT THERE WERE DIFFERENT PAYMENT SCHEDULES FOR THE THREE PRINCIPAL TYPES OF WORK INVOLVE D I.E BULK DATA ENTRY, BIOMETRIC ENTRY AND LRVR PRINTING. THE TERMS OF PAYMENT FOR THE DIFFERENT CATEGORIES WAS STATED TO BE AS UNDER - : I) DATA ENTRY: - 50% OF PAYMENT WITHIN TWO WEEKS OF BILL SUBMISSION 30% ALONGWITH BILLS OF BIOMETRIC COMPLETION. 10% AFTER COMPLETION OF THE ACTIVITY IN THE RESPECTIVE CENTRE. 10% AFTER COMPLETION OF THE PROJECT AND ACCEPTANCE BY END CUSTOMER. II) BIOMETRIC 80% OF PAYMENT WITHIN TWO WEEKS OF THE BILLS SUBMISSION ENTRY: 10% AFTER COMPLETIO N OF BIOMETRIC ACTIVITY IN THE STATE. 10% AFTER COMPLETION OF THE PROJECT AND ACCEPTANCE BY THE END CUSTOMER. III) LRVR PRINTING: 90% OF THE PAYMENT WITHIN TWO WEEKS OF SUBMISSION OF THE BILL 10% AFTER COMPLETION OF THE PROJECT AND ACCEPTANCE BY THE END CUSTOMER. 6 . AFTER ANALYSING THE BILLS RAISED BY THE ASSESSEE , THE AO CONCLUDED THAT ONLY THAT REVENUE HAD BEEN DISCLOSED WHICH HAS BEEN RECEIVED BY THE ASSESSEE AS PER THE PAYMENT SCHEDULE STIPULATED IN THE WORK ORDERS. THIS IMPLIED THAT THE ASSESSEE HAD BEEN FOLLOWING A CASH SYSTEM OF ACCOUNTING AS OPPOSED TO THE MERCANTILE SYSTEM WHICH HAD BEEN MENTIONED IN THE AUDITOR'S REPORT IN THE STATUTORY FROM 3CD. THE AO, FURTHER, CONCLUDED THAT ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 5 | 37 AS PER THE ACCRUAL SYSTEM OF ACCOUNTING, THE ASSESSEE OUGHT TO HAVE RECOGNIZED THE FULL VALUE OF THE BILL RAISED AS REVENUE FOR THE YEAR AND NOT ONLY THE AMOUNTS RECEIVED AS PER THE TERMS OF PAYMENT SPECIFIED IN THE WORK ORDERS. THE ASSESSING OFFICER ALSO STA TED THAT THE ASSESSEE HAD CLAIMED THE CREDIT OF TDS WHICH WAS DEDUCTED ON THE ENTIRE BILL AMOUNT AND , THEREFORE , THE ASSESSEE SHOULD RECOGNIZE THE ENTIRE BILL AMOUNT AS REVENUE. THE AO TOOK RECOURSE TO THE 'MATCHING PRINCIPLE' OF REVENUE RECOGNITION TO ARG UE THAT ONCE THE EXPENSES INCURRED FOR THE ENTIRE WORK HAVE BEEN CLAIMED, IT IS INCUMBENT UPON THE ASSESSEE TO RECOGNIZE THE ENTIRE BILL AMOUNT AS REVENUE AND NOT A SPECIFIED PERCENTAGE. CONSEQUENTLY, THE AO MADE AN ADDITION OF RS. RS.4,23,65,658/ - , (RS.2,94,39,408 + RS.1,29,26,250/ - ) AS SUPPRESSED WORK RECEIPTS RECEIVED FROM M/S. ECIL AND BEL, RESPECTIVELY. 7 . BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE BILLS RAISED BY THE ASSESSEE FOR THE CONTRACT WORK PERFORMED HAVE TO BE RATIFIED AND APPROVED BY SUPERVISORS APPOINTED BY M/S. ECIL AND BEL AND IT IS ONLY AFTER THE CERTIFICATION HAS BEEN COMPLETED THAT THE AMOUNT CAN BE SAID TO ACCRUE TO THE ASSESSEE AS HIS INCOME. THE ASSESSEE EXPLAINED THAT IT IS ONLY AFTER THE NATIONAL POPULATION REGISTER (NPR) AUTHORIZED OFFICERS OF M/S. ECIL AND M/S. BEL HAVE CERTIFIED THE WORK DONE BY THE ASSESSEE CAN THE AMOUNT BE CLAIMED. AS PER THE TERM S OF PAYMENT OF THE WORKS CONTRACT, THE NPR AUTHORIZED OFFICERS CERTIFY ONLY 80%, 50% OR FURTHER 20%, 30%, 10% OF THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 6 | 37 WORK COMPLETED DEPENDING UPON WHETHER THE WORK RELATES TO DATA ENTRY, BIOMETRIC ENTRY OR LRVR PRINTING. HOWEVER, THE ASSESSEE STATED THAT AS PER THE PREVAILING RULES , 100% OF THE BILL VALUE HAS TO BE MENTIONED ON THE FACE OF THE BILL ALONG WITH THE CLAIM DETAILS AND THAT THE AO HAD ERRONEOUSLY ASSUMED THAT THE TOTAL BILL VALUE WAS THE AMOUNT WHICH HAD ACCRUED TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.4,23,65,658/ - , ADDED BY THE AO AS SUPPRESSED RECEIPTS FROM M/S. E CIL AND BEL HAD IN FACT BEEN DISCLOSED BY THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEARS WHEN IT WAS CERTIFIED BY THE APPOINTED SUPERVISORS OF M/S. ECIL AND BEL . BY ENHANCING THE INCOME OF THE ASSESSEE FROM RS. 1,09,41,480/ - TO RS.5,88,41,230/ - , THE NET PROFIT OF THE ASSESSEE HAS BEEN ENHANCED TO 45%, WHICH IS EXCESSIVE . LASTLY, THE ASSESSEE ALSO CLARIFIED THAT THE EXPENDITURE BOOKED BY HIM FOR THE YEAR UNDER CONSIDERATION WAS AGAINST THE INCOME RE CEIVED AND NO EXPENSES HAD BEEN BOOKED AGAINST THE MUCH HIGHER CONTRACT RECEIPTS AS ASSESSED BY THE AO. 8 . THE LD CIT(A) CALCULATED THE INCOME OF THE ASSESSEE AT RS.68,71,709 (16.22% OF RS.4,23,65,658/ - ) AND ALLOWED RELIEF OF RS.3,54,93,949/ - TO THE ASSESSEE , BY OBSERVING AS UNDER: THE AO ANALYSED THE BILLS R AISED BY THE ASSESSEE AND CONCLUDED THAT ONLY THAT REVENUE HAD BEEN DISCLOSED WHICH HAS BEEN RECEIVED BY THE ASSESSEE AS PER THE PAYMENT SCHEDULE STIPULATED IN THE WORK ORDERS. THIS IMPLIED THAT THE ASSESSEE HAD BEEN FOLLOWING A CASH SYSTEM OF ACCOUNTING A S OPPOSED TO THE MERCANTILE SYSTEM WHICH HAD BEEN MENTIONED IN THE AUDITOR'S REPORT IN THE STATUTORY FROM 3CD. THE AO, FURTHER CONCLUDED THAT AS PER THE ACCRUAL SYSTEM OF ACCOUNTING, THE ASSESSEE OUGHT TO HAVE RECOGNIZED THE FULL VALUE OF ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 7 | 37 THE BILL RAISED AS REVENUE FOR THE YEAR AND NOT ONLY THE AMOUNTS RECEIVED AS PER THE TERMS OF PAYMENT SPECIFIED IN THE WORK ORDERS. THE ASSESSING OFFICER ALSO STATED THAT THE ASSESSEE HAD CLAIMED THE CREDIT OF TDS WHICH WAS DEDUCTED ON THE ENTIRE BILL AMOUNT AND THEREFORE THE ASSESSEE SHOULD RECOGNIZE THE ENTIRE BILL AMOUNT AS REVENUE. THE AO TOOK RECOURSE TO THE 'MATCHING PRINCIPLE' OF REVENUE RECOGNITION TO ARGUE THAT ONCE THE EXPENSES INCURRED FOR THE ENTIRE WORK HAVE BEEN CLAIMED, IT IS INCUMBENT UPON THE ASSESSEE TO RECOGNIZE THE ENTIRE BILL AMOUNT AS REVENUE AND NOT A SPECIFIED PERCENTAGE. CONSEQUENTLY, THE AO, MADE ADDITIONS OF RS. 2,94,39,408/ - AND RS. 1,29,26,250/ - AS SUPPRESSED WORK RECEIPTS RECEIVED FROM M/S. ELECTRONICS C ORPORATION OF INDIA LTD AND BHARAT ELECTRONICS LTD RESPECTIVE INCOME OF THE ASSESEE FOR AY. - 2012 - 13. DURING THE APPELLATE PROCEEDINGS, THE COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE BILLS RAISED BY THE ASSESSEE FOR THE CONTRACT WORK PERFORMED HAVE TO BE RATIFIE D AND APPROVED BY SUPERVISORS APPOINTED BY ELECTRONICS CORPORATION OF INDIA LTD AND B HARAT ELECTRONICS LTD AND IT IS ONLY AFTER THE CERTIFICATION HAS BEEN COMPLETED THAT THE AM OUNT CAN BE SAID TO ACCRUE TO THE ASSESSEE AS HIS INCOME. THE ASSESSEE EXPLAINED THAT IT IS ONLY AFTER THE NATIONAL POPULATION REGISTER (NPR) AUTHORIZED OFFICERS OF M/S. ECIL AND M/S. BEL HAVE CERTIFIED THE WORK DONE BY THE ASSESSEE CAN THE AMOUNT BE CLAIMED. AS PER THE TERM OF PAYMENT OF THE WORKS CONTRACT, THE NPR AUTHORIZE D OFFICERS CERTIFY ONLY 80%, 50% OR FURTHER 20%, 30%, 10% OF THE WORK COMPLETED DEPENDING UPON WHETHER THE WORK RELATES TO DATA ENTRY, BIOMETRIC ENTRY OR LRVR PRINTING. HOWEVER, THE ASSESSEE STATED THAT AS PER THE PREVAILING RULES 100% OF THE BILL VALUE HA S TO BE MENTIONED ON THE FACE OF THE BILL ALONG WITH THE CLAIM DETAILS AND THAT THE AQ HAD ERRONEOUSLY ASSUMED THAT THE TOTAL BILL VALUE WAS THE AMOUNT WHICH HAD ACCRUED TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE AMOUNTS OF RS. 2,94,39,408/ - AND RS. 1,29,26,250/ - ADDED BY THE AO AS SUPPRESSED RECEIPTS FROM M/S. ECIL AND M/S. BEL RESPECTIVELY, HAVE IN FACT BEEN DISCLOSED BY THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEARS WHEN IT WAS CERTIFIED BY THE APPOINTED SUPERVISORS OF M/S. ECIL AND M/S. BEL. BY E NHANCING THE INCOME OF THE ASSESSEE FROM RS. 1,09,41,480/ - TO RS. 5,88,41,230/ - THE NET PROFIT OF THE ASSESSEE HAS BEEN ENHANCED TO 45% WHICH IS EXCESSIVE AND DEVOID OF ALL REASONING. LASTLY, THE ASSESSEE ALSO CLARIFIED THAT THE EXPENDITURE BOOKED BY HIM IN AY. - 2012 - 13 WAS AGAINST THE INCOME RECEIVED AND NO EXPENSES HAD BEEN BOOKED AGAINST THE MUCH HIGHER CONTRACT RECEIPTS AS ASSESSED BY THE AO. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 8 | 37 I HAVE PERUSED THE FACTS OF THE CASE AND HAVE EXAMINED IN DETAIL THE ASSESSMENT ORDER U/S. 143(3) FOR AY. - 2 0 12 - 13 DT. 30.3.2015 AND ALSO THE DETAILED SUBMISSIONS TENDERED BY THE ASSESSEE. THE CENTRAL ISSUE THAT NEEDS TO BE ADDRESSED HERE IS THE POINT AND THE MAGNITUDE OF ACCRUAL OF INCOME TO THE ASSESSEE. IN OTHER WORDS, WHAT NEEDS TO BE IDENTIFIED IS THE PRECISE MOMENT WHEN THE ASSES SEE CAN BE SAID TO HAVE EARNED THE INCOME FROM THE SERVICES RENDERED BY IT TO M/S. ELECTRONICS CORPORATION OF INDIA LTD AND M/S. BHARAT ELECTRONICS LTD., AND ALSO THE QUANTUM OF INCOME ACCRUING TO THE ASSESSEE FROM THIS ENTITY. N OW, ON PERUSAL OF THE CONT RACT ENTERED INTO BETWEEN THE ASSESSEE AND M/S. ECIL, IT IS SEEN THAT REVENUE BECOMES DUE TO THE ASSESSEE ONLY AFTER THE BILLS RAISED BY IT ARE CERTIFIED BY THE SUPERVISORS APPOINTED BY M/S. ELECTRONICS CORPORATION OF INDIA LTD. TILL THE BILL IS CERTIFIED BY THE DESIGNATED OFFICERS OF M/S. ECIL, THE ASSESSEE CAN HAVE NO CLAIM ON INCOME AND IT CANNOT BE SAID THAT INCOME/REVENUE HAS ACCRUED TO THE ASSESSEE. ONLY THAT QUANTUM OF THE BILL AMOUNT RAISED BY THE ASSESSEE WHICH HAS BEEN CERTIFIED AND APPROVED BY THE SUPERVISOR OF M/S. ECIL AND M/S. BEL CAN BE SAID TO HAVE ACCRUED TO THE ASSESSEE. AN INCOME CAN BE SAID TO ACCRUE TO AN ASSESSEE WHEN THE LATTER HAS A PRESENT AND ENFORCEABLE RIGHT TO RECEIVE THAT INCOME. IN THE CASE INSTANT, IT IS ONLY WHE N THE SUPERVISORS OF M/S. ECIL AND BEL CERTIFY THE WORK DONE BY THE ASSESSEE CAN THE LATTER BE SAID TO HAVE ACQUIRED A RIGHT TO RECEIVE THAT INCOME. IT IS ALSO SEEN THAT THE AUTHORIZED SUPERVISORS ONLY CERTIFY 80%, 50% OR FURTHER 20, 30, AND 10% OF THE BIL L RAISED BY THE ASSESSEE DEPENDING UPON WHETHER THE WORK DONE PERTAINS TO DATA ENTRY, BIOMETRIC ENTRY OR LRVR CARD PRINTING. ALTHOUGH, THE ASSESSEE CAN CLAIM ONLY WHAT IS CERTIFIED, 100% OF THE BILL VALUE HAS TO BE MENTIONED ON THE FACE OF THE BILL AS PER THE NORMAL BILLING PRACTICE FOLLOWED IN THIS LINE OF BUSINESS. THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 9,28,19,340/ - FROM M/S. ECIL AS AGAINST A BILL RAISED OF RS. 12,65,16,555 / - AS THE FORMER FIGURE WAS THE AMOUNT THAT HAD BEEN CERTIFIED AND APPROVED BY THE AUTHORIZED SUPERVISORS OF M/S. ECIL. SIMILARLY, AS FAR AS TRANSACTION WITH BEL WERE CONCERNED, THE ASSESSEE CLAIMED AN AMOUNT OF RS.3,01,61,250/ - AS AGAINST BILL RAISED OF RS.4,75,25,512/ - AS ONLY THIS MUCH HAD BEEN RATIFIED BY THE DEPUTED OFFICERS OF BEL. THE ASSESSEE HAS CORRECTLY SHOWN THE AMOUNT OF RS. 9,28,19,340 / - AND RS.3,01,61,250/ - RECEIVED FROM M/S. ECIL AND BEL, RESPECTIVELY AS HIS INCOME AS ONLY THE AMOUNT CERTIFIED BY M/S. ECIL AND BEL CAN RIGHTFULLY BE CALLED THE ASSESSEE'S INCOME AS PER THE CONTRACTUAL AGREEMENT. THE INFLATED AMOUNT OF RS .12,65,16,555/ - AND RS.4,75,25,512/ - - REPRESENTS THE TOTAL VALUE OF THE WORK GIVEN ON CONTRACT TO THE ASSESSEE BY M/S. ECIL AND BEL AND IS NOT THE INCOME ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 9 | 37 WHICH HAS ACCRUED TO THE ASSESSEE IN AY. - 2012 - 13 FROM THESE TWO ENTITIES . HOWEVER, AS HAS BEEN POINTED OUT BY THE ASSESSING OFFICER IN THE ORDER U/S. 143(3) DT. 30.03.2015, TDS HAS BEEN DEDUCTED BY BOTH M/S. ECIL AND M/S. BEL ON THE FULL BILL AMOU NT OF RS. 12,65,16,555/ - AND RS. 4,75,25,512/ - RESPECTIVELY AND THE ASSESSEE, TOO, HAS CLAIMED CREDIT OF THE ENTIRE TAX DEDUCTED AT SOURCE WHILE COMPUTING HIS TAXABLE INCOME. SO NOW THERE EXISTS A SITUATION, WHERE EVEN THOUGH A PARTICULAR INCOME HAS NOT AC CRUED TO THE ASSESSEE, THE PAYER HAS DEDUCTED TDS ON IT AND THE ASSESSEE HAS BEEN LEFT WITH NO ALTERNATIVE BUT TO CLAIM CREDIT OF THE SAME SINCE THE CREDIT FOR TDS WOULD NOT HAVE BEEN GIVEN TO HIM IN THE SUCCEEDING OR IN ANY OTHER YEAR. UNDER THESE CIRCUMS TANCES, IT WOULD BE APPROPRIATE TO LEVY AN APPROPRIATE RATE OF NET PROFIT ON THE DIFFERENTIAL AMOUNT BETWEEN THE BILL RAISED BY THE ASSESSEE AND THE AMOUNT CLAIMED BY IT AND COMPUTE THE PROFIT ELEMENT EMBEDDED IN THESE GROSS RECEIPTS. IT IS SEEN THAT IN AY : 2012 - 13, THE ASSESSEE HAS SHOWN A NET PROFIT OF 16.22% OF GROSS RECEIPTS AND, THEREFORE, THE SAME RATE WILL BE ADOPTED TO COMPLETE THE PROFIT ACCRUING TO THE ASSESSEE FROM THE ADDITIONS MADE BY THE AO OF RS. 2,94,39,408/ - [DIFFERENTIAL UNDISCLOSED RECEIP TS FROM M/S. ECIL AS PER THE ASSESSMENT ORDER U/S. 143(3] DT 30/03/2015) AND RS. 1,29,26,250/ - (DIFFERENTIAL UNDISCLOSED RECEIPTS FROM M/S. BEL AS PER THE ASSESSMENT ORDER U/S. 143(3) DT. 30/03/2015). IT IS PERTINENT TO MENTIO N HERE THAT SINCE THE ASSESSEE HAS NOT SHOWN THESE RECEIPTS AS INCOME, HE HAS ALSO, ACCORDINGLY, NOT CLAIMED ANY EXPENSES LINKED WITH THEM. HENCE, THE AO'S ASSERTION MADE ON PAGE 4 OF HIS ASSESSMENT DATED 30.3.2015 THAT THE ASSESSEE HAS CLAIMED EXPENSES FOR THE ENTIRE VALUE OF THE BILL RAISED, IS INCORRECT. 9 . LD CIT DR ASSAILING THE ORDER OF THE LD CIT(A) SUBMITTED THAT THE ASSESSEE HAD DULY RAISED BILLS FOR THE UNDISCLOSED TURNOVER INCLUDING SERVICE TAX AFTER HAVING EXECUTED THE WORK AND THE CONTRACTEES I.E. ECIL AND BEL HAD DULY CREDITED THE AMOUNTS IN ASSESSEES ACCOUNT AND HAD DEDUCTED TDS ON SU CH UNDISCLOSED TURNOVER. LD CIT DR SUBMITTED THAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THEREFORE, THE BILLS RAISED BY THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 10 | 37 ASSESSEE SHOULD HAVE BEEN BROUGHT TO TAX, WHICH THE AO HAD DONE. HENCE, THE ORDER OF THE AO BE RESTORED. 10. REPLYING TO ABOVE, LD A.R. PLACING RELIANCE ON THE DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF BALACHAND AJIT KUMAR, 263 ITR 610 (MP) SUBMITTED THAT THE TOTAL SALES AMOUNT CANNOT BE TREATED AS INCOME, ONLY AN ELEMENT OF INCOME CAN BE TAXED IN TH E CASE OF UNACCOUNTED AMOUNT OF SALES. FURTHER PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRESIDENT INDUSTRIES, 258 ITR 654 (GUJ) SUBMITTED THAT THE TOTAL IMPUGNED AMOUNT FROM THE RESPECTIVE SERVICE RECEIVERS AND THE WORK WAS NOT CERTIFIED BY THE OFFICERS OF ECIL AND BIL AS PER THE TERMS AND CONDITIONS OF THE WORK CONTRACT BETWEEN THE ASSESSEE AND SAID TWO CONCERNS. LD A.R. VEHEMENTLY SUBMITTED THAT THE LD CIT(A) AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANC ES OF THE CASE AND RIGHTLY APPRECIATING THE EXPLANATION OF THE ASSESSEE SUPPORTED WITH CONTRACT AGREEMENT, SAMPLES COPIES OF WORKS ORDER, AUDIT REPORT OF THE ASSESSEE, COPIES OF CONFIRMATION ISSUED BY ECIL AND BIL, ACCOUNT STATEMENT FOR CONSECUTIVE FIVE YE ARS OF THESE CONCERNS AND COPIES OF THE AGREEMENT AND LEDGER HAS RIGHTLY HELD THAT EVEN A PARTICULAR INCOME HAS NOT BEEN ACCRUED TO THE ASSESSEE. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 11 | 37 11. FURTHER, LD AR IN RESPECT OF THE ADDITIONS OF DIFFERENTIAL UNDISCLOSED BILLS FROM ECIL AND BEL AMOUNTING TO RS.2,94,39,408/ - AND RS.1,29,26,250/ - RESPECTIVELY, SUBMITTED THAT THE TOTAL BILLING MADE TO ECIL AND BEL (NPR - AADHAR) IS AS PER THE CENTRAL GOVERNMENT GUIDELINES ISSUED FROM TIME TO TIME AND BILLING IS MADE ACCORDINGLY, HENCE THE ASSESSEE HAD CLAIMED BILL VALUE FOR RS.9,28,19,340/ - AGAINST TOTAL WORK VALUE OR CLAIMED VALUE OF RS.12,65,16,555/ - IN CASE OF ECIL AND RS.3,01,61,250/ - AGAINST TOTAL WORK VALUE OR CLAIMED VALUE OF RS.4,75,25,512/ - IN CASE OF BEL AND SAME IS DONE AS PER THE CERTIFICATION OF WORK COMPLETED BY ECIL AND BEL AUTHORIZED OFFICERS. HE SUBMITTED THAT THE AO, AT PAGE 2, HAS ALSO NOTED THESE GLARING FACTS HE SUBMITTED THAT THEY CERTIFY ACCORDING TO THE RFQ STANDARD FIXED BY NPR. HENCE, THE REVENUE HAS BEEN RECOGNIZED ON THE BASIS OF T HE PAYMENT SCHEDULE AS PER THE 'TERMS OF PAYMENT' OF THE PO IS NOT CORRECT, AS PER PO THE ASSESSEE CAN CLAIM ONLY AFTER CERTIFICATION OF NPR AUTHORIZED OFFICERS AND THEY CERTIFIED ONLY 80%, 50% OR FURTHER 20%, 30%, 10% (SUBSEQUENT CLAIMS) AS PER THE WORK C OMPLETED AND CERTIFIED. 12. LD A.R. SUBMITTED THAT THE ASSESSEE HAD BOOKED ALL THE EXPENDITURE AGAINST THE INCOME RECEIVED IN THE YEAR AND NOT BOOKED THE ENTIRE EXPENSES INCURRED AGAINST THE CONTRACT RECEIPT SHOWN IN 26AS STATEMENT AND IT IS NOT DISPUTED BY THE AO THAT THE ENTIRE CONTRACT RECEIPT SHOWN IN 26AS STATEMENT HAS NOT BEEN RECEIVED DURING THE IMPUGNED ASSESSMENT YEAR. HE SUBMITTED THAT 26AS STATEMENT ARE PURELY THIRD - PAR TY INFORMATION, WHICH ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 12 | 37 SHOULD NOT HAVE BEEN TREATED AS GENUINE FIGURE FOR MAKING ADDITION . HE SUBMITTED THAT THERE IS NO UNDISCLOSED CONTRACT RECEIPT RATHER IT IS MISMATCH OF A CONTRACT RECEIPT. IF THE RECEIPT DETAILS AND ADDITION DETAILS FOR A PERIOD OF 5 YEARS WILL BE TAKEN INTO CONSIDERATION, THEN THERE WILL BE NO UNDISCLOSED RECEIPT. WITH REGARD TO CLAIM OF TDS DURING THE YEAR, LD A.R. SUBMITTED THAT DUE TO RESTRICTION STIPULATED IN FORM NO.26AS STATEMENT THAT THE TDS CLAIMED CAN ONLY BE ALLOWED ON BE ING REFLECTED IN THE SAID STATEMENT, THE ASSESSEE WAS UNDER COMPULSION CLAIMED THE TDS AMOUNT ON THE ENTIRE TURNOVER INCLUDING THE TURNOVER NOT DISCLOSED DURING THE YEAR AS IF CREDIT IS NOT CLAIMED FULLY OR PARTLY THEN CREDIT OF UNCLAIMED AMOUNT WILL NOT BE GIVEN TO ASSESSEE IN NEXT YEAR . HE LASTLY SUBMITTED THAT THE LD CIT(A) AFTER TAKING INTO CONSIDERATION ALL THE FACTS HAVE TAKEN A CONSCIOUS DECISION IN GIVING PART RELIEF TO THE ASSESSEE, HENCE, HIS ORDER SHOULD BE UPHELD. 13. WE HAVE HEARD THE RIVAL S UBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES BELOW AS WELL AS RELEVANT MATERIALS FILED BY THE ASSESSEE IN PAPER BOOK. 14. ON PERUSAL OF THE CONTRACT ENTERED INTO BETWEEN THE ASSESSEE AND M/S. ECIL & BIL, THE REVENUE BECOMES DUE TO THE ASSESSEE O NLY AFTER THE BILLS RAISED BY THE ASSESSEE ARE CERTIFIED BY THE SUPERVISORS APPOINTED BY M/S. ELECTRONICS CORPORATION OF INDIA LTD AND BIL. IT IS CLEAR THAT TILL THE BILL IS CERTIFIED BY THE DESIGNATED OFFICERS OF M/S. ECIL AND BIL, THE ASSESSEE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 13 | 37 CAN NOT MAKE CLAIM ON INCOME AND IT CANNOT BE SAID THAT INCOME/REVENUE HAS ACCRUED TO THE ASSESSEE. ONLY THAT QUANTUM OF THE BILL AMOUNT RAISED BY THE ASSESSEE WHICH HAS BEEN CERTIFIED AND APPROVED BY THE SUPERVISORS OF M/S. ECIL AND M/S. BEL CAN BE SAID TO HAVE A CCRUED TO THE ASSESSEE. IT IS ALSO GATHERED FROM THE CONTRACT THAT WHEN THE SUPERVISORS OF M/S. ECIL AND BEL CERTIFY THE WORK DONE BY THE ASSESSEE, THEN ONLY LATTER CAN BE SAID TO HAVE ACQUIRED A RIGHT TO RECEIVE THAT INCOME. FURTHER, THE AUTHORIZED SUPER VISORS ONLY CERTIFY 80%, 50% OR FURTHER 20, 30, AND 10% OF THE BILL RAISED BY THE ASSESSEE DEPENDING UPON WHETHER THE WORK DONE PERTAINS TO DATA ENTRY, BIOMETRIC ENTRY OR LRVR CARD PRINTING. ALTHOUGH, THE ASSESSEE CAN CLAIM ONLY WHAT IS CERTIFIED, 100% OF THE BILL VALUE HAS TO BE MENTIONED ON THE FACE OF THE BILL AS PER THE NORMAL BILLING PRACTICE FOLLOWED IN THIS LINE OF BUSINESS. WE ARE IN AGREEMENT WITH THE CONTENTION OF ASSESSEE THAT AS PER PARA 4.1 OF ASSESSMENT ORDER AT PAGE 2, THE CLAIMED VALUE IS HI GHER BUT BILL VALUE IS LESSER WHICH ACTUALLY ACCRUED TO THE ASSESSEE AND SAME AMOUNT HAS BEEN DISCLOSED AND SHOWN AS ACTUAL AMOUNT WHICH WAS INCLUDED IN THE TURNOVER. 15. FURTHER, O N PERUSAL OF THE DETAILED TURNOVER DECLARED BY THE ASSESSEE AND DETERMINED BY THE DEPARTMENT FOR A CONSECUTIVE PERIOD OF FIVE YEARS, (FILED IN THE ASSESSEES PAPER BOOK FOR A.Y. 2011 - 12 PAGES 38 TO 41) WHICH SEEMS TO BE SAME WITH NO DIFFERENCE, THEREBY, THERE CANNOT BE ANY ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 14 | 37 SUPPRESSION OF TURNOVER. HOWEVER, SINCE THE PAYER HAS D EDUCTED TDS ON THE TOTAL AND THE ASSESSEE HAS BEEN LEFT WITH NO ALTERNATIVE TO CLAIM THE CREDIT OF THE SAME DURING THE IMPUGNED YEAR OF ASSESSMENT, AS THE CREDIT OF THE TDS WOULD NOT HAVE BEEN GRANTED TO HIM, REGARDING UNCLAIMED PART AMOUNT IN THE SUCCEEDI NG YEAR OR ANY OTHER YEAR. 16. LD CIT DR STRENUOUSLY CONTENDED THAT IN THE LAST PART OF TOP PARA AT PAGE 6 OF THE FIRST APPELLATE ORDER, THE LD CIT (A) RECORDED A COMPLETELY WRONG FACTUAL FINDING THAT IT IS PERTINENT TO MENTION HERE THAT SINCE THE ASSESSE E HAS NOT SHOWN THESE RECEIPTS AS INCOME, HE HAS ALSO, ACCORDINGLY, NOT CLAIMED ANY EXPENSES LINKED WITH THEM . ON THIS ARGUMENTS WHEN WE CONSIDER THE ENTIRE PARA 2 OF THE FIRST APPELLATE ORDER ALONGWITH ARGUMENTS ADVANCED BY THE ASSESSEE BEFORE THE LD CIT(A), WHICH WERE AGAIN REITERATED BEFORE THIS BENCH DURING THE ARGUMENTS, WE OBSERVE THAT THE LD CIT(A) AFTER CONSIDERING THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE AT TOP PARA 1 PAGE 4, NOTED THAT THE ASSESSEE HAS STATED THAT AS PER PREVAILING RULES 100% OF THE BILL VALUE HAS TO BE MENTIONED ON THE FACT OF THE BILL ALONGWITH THE CLAIM DETAILS AND THE AO HAD ERRONEOUSLY ASSUMED THAT THE TOTAL BILL VALUE WAS THE AMOUNT WHICH HAD ACCRUED TO THE ASSESSEE. IT WAS ALSO CONTENDED BY LD A.R. THAT THE ASSESSEE BY WAY OF AN AUDITED BOOKS OF ACCOUNT AND OTHER DOCUMENTS CLARIFIED BEFORE THE AUTHORITIES BELOW THAT EXPEN DITURE BOOKED BY HIM FOR ASSESSMENT YEAR 2012 - 13 WAS AGAINST THE INCOME RECEIVED AND NO EXPENSES HAD BEEN BOOKED AGAINST THE MUCH ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 15 | 37 HIGHER CONTRACT RECEIPTS AS ASSESSED BY THE AO. THEREFORE, THERE WAS NO REQUIREMENT IN ESTIMATING THE WORK IN PROGRESS IN TH IS REGARD. FROM THE STATEMENT SUBMITTED BY THE ASSESSEE AT PAGES 56 TO 59 OF ASSESSEES PAPER BOOK FOR ASSESSMENT YEAR 201 2 - 1 3 SHOWING 26AS TURNOVER VERS U S ASSESSED TURNOVER (ANNEXURE - 5) FOR THE PERIOD A.Y. 2011 - 12 TO 2018 - 19, WHICH INCLUDES PRESENT THRE E ASSESSMENT YEARS UNDER CONSIDERATION, CLEARLY SHOWS THAT THE TURNOVER AS PER 26AS WITH AND OR WITHOUT SERVICE TAX IS HIGHER AND AS PER ASSESSED INCOME AND ACTUAL AMOUNT AS PER BALANCE SHEET IS LESSER BUT THE AMOUNT SHOWN BY THE ASSESSEE IN THE BALANCE SH EET AND PROFIT AND LOSS ACCOUNT IS EQUAL TO ASSESSED INCOME, THEREFORE, WE HAVE NO HESITATION TO HOLD THAT ON COMPLETION OF CONTRACT DURING ASSESSMENT YEAR 2018 - 19, THERE WAS NO MIS - MATCH REMAINED BETWEEN THE TURNOVER SHOWN BY THE ASSESSEE AND ASSESSED BY THE REVENUE AUTHORITIES. THEREFORE, THE CONTENTION OF LD CIT DR HAS NO LEGS TO STAND ON FACTUAL MATRIX OF THE CASE AND IN THE LIGHT OF COMPLETE OBSERVATION OF LD CIT(A). THUS, WE HAVE NO HESITATION TO HOLD THAT THE LD CIT(A) WAS RIGHT IN ACCEPTING THE E XPLANATION AND CONTENTION OF THE ASSESSEE ON THE MIS - MATCH OF TURNOVER. 17. WE ALSO OBSERVE THAT THE ASSESSEE FURNISHED COPIES OF CONTRACT AGREEMENT WITH ECIL AND BEL BEFORE THE AUTHORITIES BELOW AND NOTED THAT REVENUE BECOMES DUE TO THE ASSESSEE ONLY AFT ER THE BILLS RAISED BY IT ARE CERTIFIED BY THE SUPERVISORS APPOINTED BY M/S. ECIL AND M/S. BEL AND TILL THE BILLS IS CERTIFIED BY THE DESIGNATED OFFICERS OF M/S. ECIL AND M/S. BEL, THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 16 | 37 ASSESSEE CAN HAVE NO CLAIM ON INCOME AND IT CANNOT BE SAID THAT INCOME ACCRUED TO THE ASSESSEE. IT WAS ALSO OBSERVED BY LD CIT(A) AFTER CONSIDERING THE RELEVANT CONTRACT AND DOCUMENTS THAT ONLY THE QUANTUM OF BILL AMOUNT RAISED BY THE ASSESSEE WHICH HAS BEEN CERTIFIED AND APPROVED BY THE SUPERVISOR OF M/S. ECIL AND M/S. BEL CAN BE SAID TO HAVE ACCRUED TO THE ASSESSEE. LD CIT DR BEFORE US COULD NOT CONTROVERT THE FACT THAT ONLY THE SUPERVISORS CERTIFIED THE WORK DONE BY THE ASSESSEE CAN BE SAID TO HAVE ACQUIRED THE RIGHT TO RECEIVE THAT AMOUNT. FROM THE OBSERVATIONS OF THE LD CIT(A) AT PAGE 5, WE ALSO NOTE THAT LD CIT(A) AFTER CONSIDERING THE STAND OF THE AO AND EXPLANATION OF THE ASSESSEE CONCLUDED THAT THE AUTHORISED SUPERVISORS ONLY CERTIFY 80%, 50% OR FURTHER 20, 30, 10% OF THE BILL AMOUNT RAISED BY THE ASSESSEE DEPENDIN G UPON WHETHER THE WORK DONE PERTAINS TO DATA ENTRY, BIOMETRIC ENTRY OR LRVR CARD PRINTING AND THE ASSESSEE CAN CLAIM ONLY WHAT IS CERTIFIED, 100% OF THE BILL VALUE HAS TO BE MENTIONED ON THE FACT OF THE BILL AS PER THE NORMAL BILLING PRACTICE FOLLOWED IN THIS LINE OF BUSINESS. OBVIOUSLY, THE ASSESSEE HAS CLAIMED AMOUNT OF RS.9,28,19,340/ - FROM ECIL AS AGAINST BILL RAISED OF RS.12,65,16,555/ - AS EARLIER FIGURE WAS THE AMOUNT WHICH WAS CERTIFIED AND APPROVED BY THE AUTHORISED SUPERVISORS OF ECIL. IN TH E SAME LINE, THE ASSESSEE CLAIMED AN AMOUNT OF RS.3,01,61,250/ - AS AGAINST BILL RAISED/FACE VALUE BILL OF RS.4,75,25,512/ - AS THE FORMER FIGURE WAS CERTIFIED BY THE AUTHORISED SUPERVISORS OF M/S BEL. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 17 | 37 18. KEEPING IN VIEW THE MODUS OPERANDI ADOPTED BY TH E PAYER SERVICE RECEIVER COMPANIES, WE ARE ALSO IN AGREEMENT WITH THE CONTENTION OF LD COUNSEL OF THE ASSESSEE THAT THE ACCOUNTS DEPARTMENT OF PAYEE HAS DEDUCTED TDS ON THE ENTIRE PROVISIONAL BILL AMOUNT BEFORE VERIFICATION OF WORK DONE AND THE ASSESSEE HA S NO CONTROL OVER THE DEDUCTING OFFICER WHICH RESULTED INTO MISMATCH. FROM PAGES 5 6 TO 59 OF ASSESSEES PAPER BOOK, IT IS ALSO AMPLY CLEAR THAT IN THE LAST WORKING YEAR F.Y. 2017 - 18 RELEVANT TO A.Y. 2018 - 19, THE TOTAL BILLED AMOUNT AND TOTAL AMOUNT RECEIV ED BY THE ASSESSEE SERVICE PROVIDER IS QUITE SIMILAR AND THERE IS NO MISMATCH DIFFERENCE BETWEEN THEM . THESE FACTS SUPPORT THE CONTENTION OF THE LD COUNSEL OF ASSESSEE THAT IF FIGURES ARE DISTURBED ON THE BASELESS ALLEGATIONS OF THE AO THEN IT WOULD BE RE VENUE NEUTRAL AS IN THE ONE YEAR AMOUNT OF TURNOVER IS ENHANCED THEN THE SAME AMOUNT WILL HAVE TO BE DEDUCTED FROM THE TOTAL TURNOVER, IN THE NEXT YEAR AND FURTHER DIFFERENTIAL AMOUNT WILL HAVE TO BE ADDED TO THE REMAINING AMOUNT AND SINCE THE ASSESSEE IS IN HIGH TAX RATE CATEGORY, THEN THE NET TAX EFFECT WILL BE REVENUE NEUTRAL. 19. IN VIEW OF THIS MODUS OPERANDI OF BILL RAISING IN THE LINE OF ASSESSEES BUSINESS, WE ARE SATISFIED THAT THE ASSESSEE HAS CORRECTLY SHOWN THE AMOUN TS CERTIFIED BY THE RESPECTIVE AUTHORISED SUPERVISORS AND AS WE HAVE NOTED ABOVE THAT LD CIT(A) AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES AND RELEVANT BOOKS OF ACCOUNT AND FINANCIAL STATEMENTS OF THE ASSESSEE FOR A.Y. 2012 - 13 HAS RIGHTLY CONCL UDED THAT THE EXPENDITURE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 18 | 37 BOOKED BY HIM FOR ASSESSMENT YEAR 2012 - 13 WAS AGAINST THE INCOME RECEIVED ONLY AND NO EXPENSES HAS BEEN BOOKED AGAINST MUCH HIGHER CONTRACT RECEIPTS AS PICKED UP AND ASSESSED BY THE AO. ON THE BASIS OF FOREGOING DISCUSSION AND AF TER APPRECIATING THE FACTUAL MATRIX OF THE CASE, IN OUR CONSIDERED OPINION, THE INFLATED AMOUNT OF RS.12,65,16,555/ - AND RS.4,75,25,512/ - ARE NOT THE ACTUAL AMOUNT ACCRUED TO THE ASSESSEE BY ECIL AND BEL, RESPECTIVELY AND ARE NOT THE AMOUNT OF ACTUAL TURNO VER WHICH HAS ACCRUED TO THE ASSESSEE FOR ASSESSMENT YEAR 2012 - 13. 20 . IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, SINCE THE ASSESSEE HAS SATISFACTORILY ESTABLISHED THAT THE AMOUNT OF WORK CERTIFIED BY THE RESPECTIVE SUPERVISORS HAS BEEN CLAIME D AND SHOWN AS TURNOVER AND THE EXPENDITURE BOOKED BY THE ASSESSEE FOR ASSESSMENT YEAR 2012 - 13 WAS AGAINST THE INCOME RECEIVED AND SHOWN IN THE PROFIT AND LOSS ACCOUNT, NO EXPENDITURE HAS BEEN BOOKED AGAINST IMPUGNED HIGHER CONTRACT AMOUNT AS ASSESSED BY T HE AO, THEREFORE, WE DECLINE TO ACCEPT THE CONTENTION OF LD CIT DR THAT THE LD CIT(A) IN THE LAST SENTENCE AT TOP PARA 6 HAS CONSIDERED AND APPRECIATED WRONG FACT THAT THE ASSESSEE HAS NOT SHOWN THESE RECEIPTS AS INCOME AND NOT CLAIMED EXPENSES LINKED WIT H THEM. LD CIT(A) AFTER OBSERVING THAT THE ASSESSEE HAS CLAIMED HIGHER TDS IN THE COMPELLING CIRCUMSTANCES UNDER THE GIVEN TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE APPROPRIATE TO LEVY AN APPROPRIATE RATE OF NET PROFIT ON THE DIFFER ENTIAL AMOUNT BETWEEN THE BILL RAISED BY THE ASSESSEE AND THE AMOUNT ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 19 | 37 CLAIMED BY IT AND COMPUTE THE PROFIT ELEMENT EMBEDDED IN THESE GROSS RECEIPTS . 21. SINCE, THE REVENUE HAS AGITATED PERCENTAGE OF NET PROFIT IN GROUND NOS.4 & 5 AND ALTERNATIVE GROUND NO.6 , THEREFORE, AFTER HOLDING ABOVE, WE PROCEED TO ADJUDICATE GROUND NOS.4,5 & 6 OF REVENUE. 22. IN THE ALTERNATIVE GROUND NO.6 FOR THE ASSESSMENT YEAR 2012 - 13, THE DEPARTMENT HAS URGED THAT LD CIT(A) SHOULD HAVE DIRECTED THE AO TO ADOPT THE GROSS PROFIT RAT E (BEFORE SALARY & INTEREST TO PARTNERS) OF 39.87% INSTEAD OF NET PROFIT RATE OF 16.22% (AFTER SALARY & INTEREST TO PARTNERS) ON THE UNDISCLOSED TURNOVER OF RS.4,23,65,658/ - AS FULL DEDUCTION ON ACCOUNT OF SALARY & INTEREST TO PARTNERS HAD ALREADY BEEN TA KEN IN ITS PROFIT AND LOSS ACCOUNT BY THE ASSESSEE WHILE FILING ITS RETURN OF INCOME. 23. APROPOS GROUND NOS.4 & 5 AND ALTERNATIVE GROUND NO.6, WE ARE OF THE CONSIDERED VIEW THAT THE LD CIT(A) HAD ARRIVED TO A RIGHT CONCLUSION AFTER FINDING THAT THE ASSESS EE HAS NOT CLAIMED ANY EXPENSES LINKED WITH THE IMPUGNED DIFFERENTIAL AMOUNT ASSESSED BY THE ASSESSEE AS UNDISCLOSED AMOUNT OF TURNOVER, THEREFORE, IN VIEW OF DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF BALACHAND AJIT KUMAR (SUPRA) AND THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PRESIDENT INDUSTRIES(SUPRA) AND VARIOUS DECISIONS OF CO - ORDINATE BENCHES OF THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE , THE TOTAL IMPUGNED AMOUNT FROM THE RESPECTIVE SERVICE RECEIVERS AND THE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 20 | 37 AMOUNT OF WORK WHICH WAS NOT CERTIFIED BY THE AUTHORIZED OFFICERS OF ECIL AND BEL CANNOT BE TREATED AS INCOME OF THE ASSESSEE, ONLY AN ELEMENT OF INCOME CALCULATED ON THE LOGICAL PER CENTAGE OF NET PROFIT CAN BE TAXED IN THE CASE OF UNACCOUNTED SALES/TURNOVER PERTAINING TO WHICH EXPENDITURE HAS NOT BEEN CLAIMED BY THE ASSESSEE IN CALCULATING THE NET PROFIT OF A PARTICULAR ASSESSMENT YEAR. THEREFORE, IN OUR HUMBLE OPINION, THE LD CIT(A ) WAS RIGHT IN DIRECTING THE AO TO CALCULATE AND TAX ONLY PROFIT ELEMENT EMBEDDED IN THE IMPUGNED AMOUNT OF TURNOVER. 2 4 . APROPOS GROUND NOS.4 & 5 OF REVENUE, IT WAS ARGUED BY LD CIT DR THAT LD CIT(A) HAS ERRED IN DIRECTING THE AO TO ESTIMATE ONLY 16.22% ON THE UNDISCLOSED RECEIPTS BASED ON THE NET PROFIT RATE DISCLOSED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION BY GIVING A WRONG FINDING OF FACT THAT ABOVE RECEIPTS WERE NOT SHOWN AS INCOME BY THE ASSESSEE. THE CORRESPONDING EXPENSES HAS NOT BEEN SHO WN AND CLAIMED BY THE ASSESSEE, EVEN THOUGH THERE WAS NO SUCH CLAIM BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD CIT DR ALSO CONTENDED THAT THE LD CIT(A) HAS ALSO ERRED IN DIRECTING THE AO TO ESTIMATE NET PROFIT @ 16.22% OF UNDISCLO SED TURNOVER AND THEREBY DIRECTING THE ALLOWANCE OF EXPENSES TO THE EXTENT OF 83.87% OF UNDISCLOSED RECEIPTS, SOME OF WHICH WAS NOT EXPLAINED BY THE ASSESSEE. LD CIT (A) HAS FAILED TO DIRECT INCLUSION OF THE SAME ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 21 | 37 AMOUNT IN THE TOTAL INCOME OF THE ASSESSEE U/S.69C OF THE ACT BEING UNDISCLOSED EXPENDITURE. 2 5 . THE LD CIT DR, PRESSING INTO SERVICE ALTERNATIVE GROUND NO.6, SUBMITTED THAT THE LD CIT(A) SHOULD HAVE DIRECTED THE AO TO ADOPT GROSS PROFIT RATE BEFORE SALARY AND INTEREST TO PARTNERS ON THE ENTIRE UNDISCLOSED TURNOVER BECAUSE FULL DEDUCTING OF SALARY AND INTEREST TO PARTNERS HAVE ALREADY BEEN CLAIMED BY THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT (ANNEXURE - 2) WHILE FILING THE RETURN OF INCOME. 2 6 . REPLYING TO ABOVE, LD A.R. HAS STRENUOUSLY CONTENDED THAT IT IS NOT A CASE OF THE AO THAT THE ASSESSEE HAS INCURRED SOME EXPENDITURES OUT OF BOOKS OF ACCOUNT BY USING UNDISCLOSED INCOME OR CAPITAL. HE FURTHER SUBMITTED THAT FROM THE RELEVANT PART OF THE ORDER OF THE LD CIT(A) , IT IS AMPLY CLEAR THAT AFTER VERIFYING RELEVANT BOOKS OF ACCOUNT, HE CLEARLY FOUND THAT THE ASSESSEE HAS NOT CLAIMED EXPENDITURE INCURRED AGAINST UNCLAIMED RECEIPTS/UNCLAIMED PART OF TURNOVER. THEREFORE, HE RIGHTLY CONCLUDED THAT THE ONLY PERCENTAGE OF PROFIT EMBEDDED IN THE IMPUGNED RECEIPTS/TURNOVER CAN BE TAXED IN THE HANDS OF THE ASSESSEE. LD COUNSEL SUBMITTED THAT IT IS NOT CASE OF THE AO THAT THE ASSESSEE HAS INCURRED SOME UNDISCLOSED EXPENSES BEING UNEXPLAINED EXPENDITURE ATTRACTING PROVISIONS OF SECTION 69C OF THE ACT. EVEN, LD CIT(A) HAS NOT PROCEEDED TO MAKE SUCH A CASE THAT THE ASSESSEE HAS INCURRED EXPENSES TOWARDS IMPUGNED PART OF TURNOVER, THE SOURCE OF WHICH WAS NOT EXPLAINED BY THE ASSESSEE AND WHICH ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 22 | 37 ATTRACTS PROVISION OF SECTION 69C OF THE ACT FOR MAKING DISALLOWANCE IN THE HANDS OF THE ASSESSEE. LD COUNSEL SUBMITTED THAT THE DEPARTMENT CANNOT BE ALLOWED TO MAKE A NEW CASE BEFORE THE TRIBUNAL AT THIS BELATED STAGE WITHOUT SHOW CAUSING THE ASSESSEE ESPECIALLY WHEN THE AUTHORITIES BELOW HA VE NOT TAKEN UP SUCH AN ISSUE AND ACTION AGAINST THE ASSESSEE FOR INVOKING PROVISIONS OF SECTION 69C OF THE ACT. 2 7 . LD COUNSEL SUBMITTED THAT FROM THE STATEMENT SUBMITTED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW PLACED AT ASSESSEES PAPER BOOK PAGES 56 TO 59 FOR THE ASSESSMENT YEAR 2012 - 13, IT IS AMPLY CLEAR , IN F.Y. 2010 - 11 TO 2017 - 18 PERTAINING TO ASSESSMENT YEAR 2011 - 12 TO 2018 - 19, RESPECTIVELY, THAT THE ASSESSEE PROVIDED SERVICE TO PRIVATE CUSTOMERS INCLUDING ECIL AND BEL AND IN THE CASE OF ECIL AND BEL, SOME MISMATCH IS THERE WHICH HAS BEEN OBSERVED BY THE AUTHORITIES BELOW BUT IN THE LAST, THE TOTAL AMOUNT OF TURNOVER AS PER ASSESSED INCOME AND AS PER BALANCE SHEET SUBMITTED BY THE ASSESSEE IS ALMOST SIMILAR. THEREFORE, IF THE FIGURES OF TURNOV ER IS DISTURBED IN ONE YEAR THEN THAT WOULD HAVE CONSEQUENT EFFECT ON THE SUBSEQUENT YEAR AND SINCE THE ASSESSEE IS IN THE HIGHEST TAX SLAB RATE, THEREFORE, SUCH AN EXERCISE WOULD BE REVENUE NEUTRAL AND THERE IS NO LOSS OF REVENUE TO THE EXCHEQUER IN THIS REGARD. THEREFORE, THE LD CIT(A) WAS RIGHT IN DIRECTING THE AO TO ESTIMATE AND CALCULATE THE NET PROFIT EMBEDDED IN THE UNDISCLOSED TURNOVER/RECEIPTS. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 23 | 37 2 8 . APROPOS ALTERNATIVE GROUND NO.6 OF REVENUE, LD COUNSEL VEHEMENTLY POINTED OUT THAT THE AUTHORITIES B ELOW HAVE TAKEN A WRONG FIGURE I.E. 16.22 % AS NET PROFIT AND ACTUALLY, THE AO AND LD CIT(A) HAS NOT TAKEN UP RIGHT PERCENTAGE OF NET PROFIT. LD COUNSEL, IN ALL FAIRNESS, SUBMITTED THAT THE ASSESSEE HAS NO OBJECTION IF NET PROFIT IS ESTIMATED BEFORE SALARY AND INTEREST ON CAPITAL TO PARTNERS BUT THE PERCENTAGE TAKEN UP BY LD CIT(A) AND AO AND IN GROUNDS OF APPEAL NO.4 TO 6 IS INCORRECT AND CANNOT BE APPLIED FOR ESTIMATING NET PROFIT IN THE HANDS OF THE ASSESSEE. THEREFORE, ESTIMATION AND CALCULATION WORK MAY KINDLY BE RESTORED TO THE FILE OF THE AO FOR A FRESH CALCULATION KEEPING IN VIEW BOOKS OF ACCOUNT AND FINAL FINANCIAL STATEMENT OF THE ASSESSEE FOR RELEVANT ASSESSMENT YEAR. 2 9 . PLACING REJOINDER TO ABOVE, LD CIT DR AGREEING TO THE SUBMISSIONS OF LD COUNSEL OF THE ASSESSEE, CANDIDLY SUBMITTED THAT THE DEPARTMENT HAS NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE AO FOR ESTIMATION AND CALCULATION OF NET PROFIT BEFORE SAL ARY AND INTEREST ON CAPITAL TO PARTNERS DUE TO MISMATCH OF PERCENTAGE BETWEEN GROUNDS OF REVENUE AND CALCULATION SUBMITTED BY THE ASSESSEE BEFORE THIS BENCH. 30 . FIRST OF ALL, WE MAY POINT OUT THAT, AT THE COST OF REPETITION, WHILE ADJUDICATING GROUND NOS. 1 TO 3 IN EARLIER PART OF ORDER, AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL ARGUMENTS OF BOTH SIDES, WE HAVE DRAWN A CONSCIOUS AND JUDICIOUS CONCLUSION THAT THE ASSESSEE HAS SATISFACTORILY ESTABLISHED THAT THE AMOUNT OF WOR K CERTIFIED BY ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 24 | 37 THE RESPECTIVE SUPERVISORS HAS BEEN CLAIMED AND SHOWN AS TURNOVER AND IT HAS ALSO BEEN OBSERVED THAT THE EXPENDITURE BOOKED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2012 - 13 WAS AGAINST THE INCOME RECEIVED AND SHOWN IN THE PROFIT AND LOSS ACC OUNT AND NO EXPENDITURE HAS BEEN BOOKED AGAINST MUCH HIGHER CONTRACT AMOUNT AS ASSESSED BY THE AO. WE HAVE ALSO OBSERVED THAT THE LD CIT(A) IN THE LAST SENTENCE TOP PARA 6 HAS NOT CONSIDERED ANY WRONG FACTS FOR GRANTING RELIEF TO THE ASSESSEE. WE MAY PO INT OUT THAT A SINGLE SENTENCE AT PAGE 6 OF THE FIRST APPELLATE ORDER CANNOT BE PICKED UP FOR MAKING ANY ALLEGATION AND RAIS ING ANY CONTENTION IN ISOLATION AND ENTIRE ORDER AND ALL OBSERVATION S HA VE TO BE SEEN AND LOOKED UP AND THE SAME HAS TO BE CONSIDER ED INTO TOTALITY FOR ANALYSING AND EVALUATING THE FIRST APPELLATE ORDER AT THIS STAGE BEFORE TH IS BENCH . WE HAVE ALSO CONCLUDED THAT IT WOULD BE APPROPRIATE TO LEVY AN APPROPRIATE RATE OF NET PROFIT ON THE DIFFERENTIAL AMOUNT BETWEEN THE BILL RAISED BY THE ASSESSEE AND THE AMOUNT CLAIMED AND SHOWN IN THE PROFIT AND LOSS ACCOUNT BY IT. 31. BEFORE WE RECORD OUR FINAL CONCLUSION, WE ALSO FIND IT APPROPRIATE TO ADJUDICATE THE CONTENTION OF THE AO IN GROUND NO.4 THAT THE CIT(A) SHOULD HAVE DIRECTED THE AO THE INCLUSION OF THE AMOUNT WHICH WAS ALLOWED AS EXPENDITURE TO THE ASSESSEE U/S. 69C OF THE ACT AS UNEXPLAINED EXPENDITURE . IN THIS REGARD AFTER CAREFUL AND THOUGHTFUL CONSIDERATION OF ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 25 |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| 37 THE ASSESSEE HAS ONLY CLAIMED AMOUNT OF TDS AS PER 26AS BECAUSE IF SUCH AMOUNT HAS NOT BEEN CLAIMED IN THE PRESENT ASSESSMENT YEAR, THEN THE ASSESSEE COULD NOT BE ALLOWED TO CLAIM THE SAME IN THE SUCCEEDING OR ANY OTHER ASSESSMENT YEAR . IN THIS SITUATION, MERELY MISMATCH BETWEEN THE AMOUNT OF TDS CLAIMED BY THE ASSESSEE AND AMOUNT OF TURNOVER SHOWN BY THE ASSESSEE DOES NOT RAISE A QU ESTION ABOUT THE EXPENDITURE INCURRED BY THE ASSESSEE AGAINST THE PART RECEIPTS/TURNOVER WHICH WAS NOT SHOWN IN THE P&L ACCOUNT AND BALANCE SHEET DUE TO NON - CERTIFICATION BY THE SUPERVISORS OF THE SERVICE RECIPIENTS AND NON RECEIPT OF PAYMENT DURING THE R ELEVANT FINANCIAL PERIOD. THEREFORE, THE CONTENTION OF THE AO IN THE GROUNDS THAT THE AMOUNT OF EXPENDITURE SHOULD BE INCLUDED AND TAXED IN THE HANDS OF THE ASSESSEE U/S.69C OF THE ACT BEING UNEXPLAINED EXPENDITURE HAS NO LEGS TO STAND IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS NOTED ABOVE AND HENCE, WE DISMISS THE SAME. 3 3 . NOW, WE PROCEED TO DRAW A FINAL CONCLUSION REGARDING DISPUTE OF ESTIMATION OF PERCENTAGE OF NET PROFIT IN THE HANDS OF THE ASSESSEE. SINCE THERE IS VAST DIFFERENCE BETWEEN THE PERCENTAGE OF PROFIT PICKED UP BY LD CIT(A) FOR DIRECTING THE AO FOR ESTIMATIO N OF PROFIT AND THE PERCENTAGE PICKED BY THE AO FOR DRAFTING GROUND NOS.4,5 & 6 WITH THE PERCENTAGE OF PROFIT CALCULATED AND SUBMITTED BY THE ASSESSEE BEFORE THIS BENCH, WHICH WAS NOT BEFORE THE AUTHORITIES BELOW. SUCH DIFFERENCE IN PERCENTAGE CANNOT ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 27 | 37 BE RE CONCILED AND SETTLED BY THIS BENCH UNLESS THE SAME VERIFIED AND ESTIMATED BY THE AO. AS WE HAVE NOTED ABOVE THAT THE PERCENTAGE PICKED UP BY THE AO , LD CIT(A) AND PERCENTAGE OF CALCULATION SUBMITTED BY THE ASSESSEE IS NOT SIMILAR AND THERE IS VAST DIFFE RENCE BETWEEN THEM, THEREFORE, THIS REQUIRES EXAMINATION AND VERIFICATION AT THE END OF THE AO. LD REPRESENTATIVES OF BOTH THE PARTIES HAVE AGREED THAT THE PERCENTAGE OF NET PROFIT OF UNDISCLOSED RECEIPTS/TURNOVER HAS TO BE ESTIMATED BEFORE PAYMENT OF SAL ARY AND INTEREST ON CAPITAL TO PARTNERS. THEREFORE, WE DIRECT THE AO TO ESTIMATE THE NET PROFIT BEFORE PAYMENT OF SALARY AND INTEREST ON CAPITAL TO PARTNERS ON THE AMOUNT OF UNDISCLOSED TURNOVER/RECEIPTS. ACCORDINGLY, GROUND NOS.1 TO 5 OF APPEAL OF REVEN UE ARE DISMISSED. HOWEVER , ALTERNATE GROUND NO.6 OF THE REVENUE IS RESTORED TO THE FILE OF THE AO FOR LIMITED PURPOSES FOR ESTIMATION OF NET PROFIT AS PER DIRECTION ABOVE. NEEDLESS TO MENTION HERE THAT THE ASSESSEE SHOULD BE ALLOWED DUE AND PROPER OPPORT UNITY OF HEARING BY THE AO. GROUND NO.7 OF APPEAL OF REVENUE FOR A.Y. 2012 - 13 3 4 . APROPOS GROUND NO. 7 , WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. THE ASSESSING OFFICER ON EXAMINATION OF BOOKS OF ACCOUNT OF THE ASSESSEE NOTICED THAT THE ASSESSEE HAD RECEIVED RS.1,93,506/ - FROM OCAC WHICH INCLUDES RS.1,56,245/ - . AS THE ASSESSE E ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 28 | 37 COULD NOT EXPLAIN THE NATURE OF RECEIPT OF RS.1,56,245/ - , THE AO DISALLOWED THE SAME. 3 5 . ON APPEAL, IT WAS EXPLAINED BEFORE THE LD CIT(A) THAT THE AMOUNT OF RS.1,56,245/ - WAS AN ADVANCE RECEIVED FROM OCAC FOR PREPARATION OF ELECTORAL PHOTO IDENTITY CARD S AND AFTER DEDUCTING THE EXPENDITURE, BALANCE AMOUNT WAS BOOKED AS INCOME OF THE ASSESSEE, WHICH FACT HAS BEEN FOUND TO BE CORRECT AFTER EXAMINING THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE BY THE LD CIT(A). HENCE, LD CIT(A) DELETED THE SAME. 3 6 . BEFORE US, THE LD CIT DR COULD NOT CONTROVERT THE FINDINGS OF THE LD CIT(A). HENCE, WE CONFIRM THE FINDINGS OF THE LD CIT(A) ON THIS ISSUE AND REJECT THE GROUND NO. 7 OF THE REVENUE. GROUND NOS.8 TO 10 OF REVENUE FOR A.Y. 2012 - 13 3 7 . IN GROUND NOS.8 TO 10, THE GRIEVANCE OF THE REVENUE IS THAT THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS.38,88,773/ - MADE UNDER THE HEAD UNEXPLAINED UNSECURED LOAN BY INCORRECTLY HOLDING THAT THE ALLEGED UNSECURED LOAN CREDITORS NAMELY, SRI SANDEE P GHOSH, SHRI SANJAY KUMAR SAH AND SHRI PULAK MAZUMDAR ARE ACTUALLY SUNDRY CREDITORS, BUT WRONGLY GIVEN THE NOMENCLATURE OF UNSECURED LOAN CREDITORS. 3 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. LD CIT DR SUBMITTED THAT SI NCE THE ASSESSEE COULD NOT FILE ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 29 | 37 CONFIRMATIONS FROM THE LOAN CREDITORS AND FAILED TO ESTABLISH THE GENUINENESS OF TRANSACTION FOR THE UNSECURED LOAN RECEIVED FROM THREE ENTITIES, SRI SANDEEP GHOSH, SHRI SANJAY KUMAR SAH AND SHRI PULAK MAZUMDAR, THE AO WAS F ULLY JUSTIFIED IN MAKING THE ADDITION U/S.68 OF THE ACT. HOWEVER, LD CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION BY ADMITTING FRESH EVIDENCE IN THE FORM OF AGREEMENT/CONTRACT IN VIOLATION OF RULE 46A OF THE I.T.RULES, 1962 WITHOUT CONFRONTING THE SAM E WITH THE ASSESSING OFFICER. 3 9 . REPLYING TO ABOVE, LD A.R. SUBMITTED THAT ACTUALLY THREE ENTITIES NAMELY, SRI SANDEEP GHOSH, SHRI SANJAY KUMAR SAH AND SHRI PUYLAK MAZUMDAR WERE THE SUB - VENDOR OF THE ASSESSEE BASED AT KOLKATA. THE AMOUNTS WERE ONLY REIMBURSEMENT FOR THE WORK DONE BY THEM. HENCE, IT WAS THE SUBMISSION OF THE LD A.R. OF THE ASSESSEE THAT ONLY BECAUSE THE NOMENCLATURE HAS BEEN GIVEN INCORRECTLY, IT CANNOT BE PRESUMED TO BE UNSECURED LOANS FOR MAKING ADDITION U/S.68 OF THE ACT. 40 . ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE OBSERVE THAT THE ASSESSING OFFICER MADE THE ADDITION ON THE GROUND THAT THE CONFIRMATIONS FROM THE CREDITORS WERE NOT FURNISHED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS W AS NOT ESTABLISHED BY THE ASSESSEE. WE ALSO NOTICE THAT DURING FIRST APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED COPIES OF CONTRACTS ENTERED INTO BY THE ASSESSEE AND THREE ENTITIES I.E. SRI SANDEEP GHOSH, SHRI SANJAY KUMAR SAH AND SHRI ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 30 | 37 PUYLAK MAZUMDAR, ON EXAMINATION OF WHICH, THE LD CIT(A) WAS OF THE VIEW THAT NO LOAN TRANSACTION WAS EFFECTED BETWEEN THEM. THE LD CIT(A) HAS REPRODUCED THE CONTRACT OF ONE ENTITY IN THE IMPUGNED ORDER, FROM WHICH, IT IS DISCERNIBLE THAT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH THE SERVICE PROVIDERS WERE PURELY BUSINESS NATURE AND NO LOANS WERE TAKEN OR REPAID BY ANY PARTY. THE MERE FACT THAT INADVERTENTLY THE ASSESSEE HAS SHOWN THE OUTSTANDING EXPENDITURES AGAINST THREE ENTITIES AS UNSECURED LOAN IN THE BALANC E SHEET IS NOT A GROUND TO TREAT THE SAME AS UNSECURED LOAN. IT IS ALSO SUBMITTED BY THE ASSESSEE THAT IT IS A MISTAKE OF NOMENCLATURE AS REALLY THE AMOUNTS WERE IN THE NATURE OF REIMBURSEMENT THE EXPENSES ALREADY INCURRED BY THEM. 4 1 . IT IS ALSO A FACT T HAT THE AGREEMENTS/CONTRACTS ON THE BASIS OF WHICH, LD CIT(A) HAS DELETED THE ADDITION WAS NOT FURNISHED BEFORE THE ASSESSING OFFICER. LD CIT DR HAS VEHEMENTLY POINTED OUT THAT THE LD CIT(A) HAS ADMITTED THE FRESH EVIDENCES WITHOUT CONFRONTING THE SAME WI TH THE ASSESSING OFFICER. 4 2 . IT IS RELEVANT TO QUOTE HERE RULE 46A OF THE I.T.RULES, WHICH IS AS UNDER: - 46A (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE CIT(A), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODU CED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE AO, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY: - ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 31 | 37 (A) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCIN G THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE AO; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB - RULE (1) UNLESS THE DCIT(A) OR, AS THE CASE MAY BE, THE CIT(A) RECORDS IN WRITING THE REASONS FOR ITS A DMISSION. (3) THE DCIT(A) OR, AS THE CASE MAY BE, THE CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB - RULE(1)UNLESS THE AO HAS BEEN ALLOWED A REASONABLE OPPORTUNITY - (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS EXAMINE THE WITNE SS PRODUCED BY THE APPELLANT. (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DCIT(A) OR, AS THE CASE MAY BE, THE CI T(A) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE AO) UNDER CLAUSE(A) OF SUB - SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271. 4 3 . A BARE PERUSAL OF THE RULE 46A OF THE I.T.RULES, 1962 CLEARLY SHOWS THAT THE ASSESSEE IS NOT ENTITLED TO PRODUCE FRESH ORAL OR DOCUMENTARY E VIDENCE, AS A MATTER OF RIGHT, IN FIRST APPEAL. HOWEVER, UNDER CERTAIN CIRCUMSTANCES AS MENTIONED IN CLAUSE (A)(B), (C) AND (D) OF SUB - RULE 1 OF ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 32 | 37 RULE 46A, ADDITIONAL EVIDENCE CAN BE FILED. SUB - RULE (2) OF RULE 46A PROVIDES THAT NO EVIDENCE SHALL BE ADMIT TED UNDER SUB - RULE (1) UNLESS THE AUTHORITY ADMITTING IT RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. SUB - RULE (2) CASTS A DUTY ON THE AUTHORITY CONCERNED TO RECORD REASONS IN WRITING FOR ADMISSION OF THE ADDITIONAL EVIDENCE. UNDER SUB - RULE (3), THE FURTHER REQUIREMENT IS THAT THE APPELLATE AUTHORITY SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB - RULE (1) UNLESS THE ASSESSING AUTHORITY HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE OR THE DOCUMENT OR TO CROSS EXAMINE W ITNESSES PRODUCED BY THE ASSESSEE OR TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. UNDER SUB - RULE (4) OF RULE 46A, THE FIRST APPELLATE AUTHORITY HAS THE RIGHT OR INDEED THE DUTY TO ADMI T ADDITIONAL EVIDENCE WHICH IS WILFULLY WITHHELD FROM THE ASSESSING OFFICER. CRUCIAL EVIDENCE IS A MATTER NECESSARY FOR RENDERING JUSTICE, SO THAT NO OBJECTION COULD ORDINARILY BE TAKEN, WHERE THE APPELLATE AUTHORITY IN ITS DISCRETION CHOOSES TO ADMIT RELEVANT EVIDENCE. IN FACT, HE MAY BE EXPECTED TO CALL FOR SUCH EVIDENCE, EVEN WHERE NEITHER PARTY HAS PRODUCED THE SAME, WHERE SUCH EVIDENCE IS NECESSARY FOR RENDERING JUSTICE. 4 4 . ON CAREFULLY PERUSING THE IMPUGNED ORDER OF THE LD CIT(A), WE DO NOT FIN D ANY SUBSTANCE THAT THE LD CIT(A) HAS HIMSELF CALLED THE REQUIRED DOCUMENTS FOR DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. BUT HE HAS CONSIDERED THE RELEVANT DOCUMENTS AND REPRODUCED THE SAME IN HIS ORDER ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 33 | 37 FOR GIVING RELIEF TO THE ASSESSEE. THEREFORE, WE HOLD THAT THIS OMISSION IS CLEAR VIOLATION OF RULE 46A OF THE RULES BY THE LD CIT(A). 4 5 . BE THAT AS IT MAY, IN VIEW OF FOREGOING OBSERVATIONS, SINCE THE ADDITIONAL, AS ALLEGED BY LD CIT DR, HAS BEEN CONSIDERED BY THE LD CIT(A) AT APPELLATE STAGE WITHOUT CONFRONTING THE SAME WITH THE ASSESSING OFFICER, WE DEEM IT FIT AND PROPER TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO THE ASSESSEE TO FURNISH T HE CONTRACTS/AGREEMENTS ALONGWITH CONFIRMATIONS WITH THE THREE SERVICE PROVIDERS AND ALL OTHER RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER. THE AO IS DIRECTED TO CONSIDER THE SAID CONTRACTS/AGREEMENTS DULY ENTERED INTO BY THE ASSESSEE WITH THE SERVI CE PROVIDERS AND ALL OTHER RELEVANT DOCUMENTS WITHOUT BEING PREJUDICED FROM EARLIER ASSESSMENT ORDER . 4 6 . THE AO IS ALSO DIRECTED TO EXAMINE AND VERIFY THE RELEVANT CONTRACTS AND ALL OTHER RELEVANT DOCUMENTS ENTERED INTO BY THE ASSESSEE WITH SERVICE PRO VIDERS AND ALSO VERIFY THAT AS TO WHETHER THESE SERVICE PROVIDERS WERE HIRED TO ASSIST THE ASSESSEE IN CARRYING OUT THE BIOMETRIC ENROLMENT PROGRAMME IN THE STATE OF WEST BENGAL AND OFTEN TIMES, EXPENDITURE INCURRED BY THESE SERVICE PROVIDERS ON BEHALF OF THE ASSESSEE WERE SUBSEQUENTLY REIMBURSED BY THE ASSESSEE AND IN FACT, THESE ARE BUSINESS / SUNDRY CREDITORS AND NO LOANS WERE TAKEN AND REPAID BY ANY ONE OF THE THREE PARTIES. THE AO IS ALSO DIRECTED TO VERIFY THE EXPLANATION OF THE ASSESSEE SUBMITTED DURING FIRST APPELLATE PROCEEDINGS AND AFTER VERIFICATION ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 34 | 37 OF THE CORRECTNESS OF THE SAME PASS AN APPROPRIATE AND JUSTIFIED ORDER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES RELATED TO THIS ISSUE. THE AO SHALL ALLOW DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ADJUDICATE THE LIMITED ISSUE WITHOUT BEING PREJUDICE D FROM HIS OBSERVATIONS AND FINDINGS RECORDED IN THE EARLIER ASSESSMENT ORDER AND KEEPING IN VIEW THE CONCLUSIONS RECORDED BY THE FIRST APPELLATE AUTHORITY ON THE BASIS OF SAME DOCUMENTARY EVIDENCE. . ACCORDINGLY, GROUND NOS.8 TO 10 OF THE REVENUE FOR A.Y. 2012 - 13 ARE ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS.1 7 2 OF REVENUE FOR A.Y. 2011 - 12 & 2013 - 2014 47. GROUND NOS.1 & 2 FOR THE ASSESSMENT YEARS 2011 - 12 & 2013 - 14 ARE IDENTICAL TO GROUND NOS.1 TO 5 FOR THE ASSESSMENT YEAR 2012 - 13. HENCE, IN LINE WITH OUR DECISION IN GROUND NOS.1 TO 3 FOR A.Y. 2 012 - 13, GROUND NOS.1 & 4 FOR ASSESSMENT YEARS 2011 - 12 AND 2013 - 14 ARE DISMISSED. GROUND NOS.3,4 & 5 OF REVENUE FOR A.Y. 2011 - 12 & 2013 - 14 48. IN VIEW OF OUR DECISION IN ALTERNATIVE GROUND NO.6 FOR ASSESSMENT YEAR 2012 - 13, ALTERNATIVE GROUND NO.5 FOR ASSE SSMENT YEAR 2011 - 12 AND ALTERNATE GROUND NO.5 FOR ASSESSMENT YEAR 2013 - 14 ARE ALSO RESTORED TO THE FILE OF THE AO WITH THE SAME DIRECTION AS HAS BEEN GIVEN FOR A.Y. 2012 - 13 GROUND NO.6 OF REVENUE FOR A.Y. 2013 - 14. 4 9 . GROUND NO.6 RELATES TO DELETION OF AD DITION OF RS.50,562/ - MADE UNDER THE HEAD UNDISCLOSED RECEIPTS FROM HINDUSTAN UNILEVER LTD. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 35 | 37 50 . LD CIT DR SUBMITTED THAT THE ASSESSEE COULD NOT EXPLAIN BEFORE THE AO REGARDING RECEIPT OF RS.50,562/ - FROM M/S. HINDUSTAN UNILEVER LTD., TOWARDS SERVICE RENDERED BY THE ASSESSEE FOR PROVIDING IDENTITY CARDS TO HINDUSTAN UNILEVER LTD. HE SUBMITTED THAT IN THE BALANCE SHEET AS AT 31.3.2013, THERE IS NO SUCH ITEM AS SALARY PAYABLE. LD DR SUBMITTED THAT LD CIT(A) HAS DELETED THE ADDITION WITHOUT GRA NTING OPPORTUNITY TO THE AO IN VIOLATION OF RULES 46A OF I.T.RULES. 51 . REPLYING TO ABOVE, LD A.R. SUPPORTED THE ORDER OF THE LD CIT(A). 52 . ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE FIND THAT THE AMOUNT OF RS.50,562/ - RECEIVED FROM M/S. HINDU STAN UNILEVER LTD., TOWARDS THE SERVICES RENDERED BY THE ASSESSEE FOR PROVIDING PHOTO IDENTITY CARDS, WHICH REPRESENTS THE SALARY TO THE STAFF MEMBERS OF THE ASSESSEE. THIS FACT WAS FULLY REPRESENTED AND EXPLAINED BEFORE THE AO AND AGAIN BEFORE THE LD CIT (A) BY THE ASSESSEE WITH CONCRETE DOCUMENTS IN SUPPORT OF THE CLAIM. IN OUR CONSIDERED OPINION, FROM THE RELEVANT PART OF THE FIRST APPELLATE ORDER, I.E. PARA 3 AT PAGES 6 - 7, WE ARE UNABLE TO AGREE WITH THE CONTENTION OF LD CIT DR THAT THERE WAS VIOLATION OF RULE 46A OF THE RULES BY THE LD CIT(A) AS NO NEW EVIDENCE WAS PRODUCED DURING THE FIRST APPELLATE PROCEEDINGS BEFORE THE LD CIT(A). A T THE SAME TIME, WE HAVE NO HESITATION TO HOLD THAT ON BEING ASKED BY THE BENCH, THE LD CIT DR DID NOT CONTROVERT THE F INDINGS RECORDED BY THE LD CIT(A) THAT AMOUNT REPRESENT SALARY OF STAFF EMPLOYED BY THE ASSESSEE FOR THE SERVICES RENDERED TO M/S. HINDUSTAN UNILEVER LTD. ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 36 | 37 HENCE, WE CONCUR WITH THE FINDINGS OF THE LD CIT(A) IN DELETING THE ADDITION. THIS GROUND FOR A.Y. 2013 - 14 IS DISMISSED. GROUND NOS.7, 8 & 9 OF REVENUE APPEAL FOR A.Y. 2013 - 14. 5 3 . SINCE FACTS AND CIRCUMSTANCES OF A.Y. 2013 - 14 ARE SIMILAR AND IDENTICAL TO A.Y. 2012 - 13, THEREFORE, OUR FINDINGS RECORDED FOR A.Y. 2012 - 13 WOULD APPLY MUTATIS - MUTANDIS TO GRO UND NOS.7, 8 & 9 OF REVENUE FOR A.Y. 2013 - 14. ACCORDINGLY, THESE GROUNDS OF REVENUE ARE ALSO ALLOWED FOR STATISTICAL PURPOSES. 5 4 . IN THE RESULT, THE APPEALS OF THE REVENUE FOR THE RESPECTIVE ASSESSMENT YEARS ARE DECIDED AS FOLLOWS: I) APPEAL FOR A.Y. 2 011 - 12 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. II) APPEAL FOR A.Y. 2012 - 13 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IV) APPEAL FOR A.Y. 2013 - 14 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 /1 1 /20 20 . SD/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 26 / 1 1 /20 20 B.K.PARIDA, SPS ITA NOS.207, 208 & 209/CTK/2019 ASSESSMENT YEARS : 2011 - 12, 2012 - 13 & 2013 - 14 P A G E 37 | 37 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), CUTTACK 2. THE RESPONDENT. M/S. COMPUTER LAB, 2 ND FLOOR, MEGHAMALA COMPLEX, BAJRAKABATI ROAD, CUTTACK 3. THE CIT(A) - , CUTTACK 4. PR.CIT - , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//