ACIT, New Delhi V. M/s. Glorious Hospitality (P) Ltd., New Delhi

ITA 2124/DEL/2012

• Counselvise Citation: 212420114 RSA 2012
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Keywords: Unexplained expenditure; Income from undisclosed sources; Search and seizure; Validity of assessment; Block assessment
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) SHRI I.C. SUDHIR, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMEBR ITA NO.2124/DEL./2012 (ASSESSMENT YEAR : 2008-09) ACIT, CENTRAL CIRCLE 21, VS. M/S. GLORIOUS HOSPIT ALITY PVT. LTD., NEW DELHI. F 6/5, GROUND FLOOR, VASANT VIHAR , NEW DELHI. (PAN :AACCG5275C) CO NO.408/DEL/2012 (IN ITA NO.2124/DEL./2012) (ASSESSMENT YEAR : 2008-09) M/S. GLORIOUS HOSPITALITY PVT. LTD., VS. ACIT, CEN TRAL CIRCLE 21, F 6/5, GROUND FLOOR, VASANT VIHAR, NEW DELHI. NEW DELHI. (PAN :AACCG5275C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL JAIN, REVENUE BY : SHRI R.I.S. GILL, CIT DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER THE APPEAL AND CROSS OBJECTION FILED BY THE REVENU E AND THE ASSESSEE RESPECTIVELY EMANATE FROM THE ORDER OF THE CIT (APP EALS)-II, DELHI DATED 06.02.2012. THE GROUNDS OF REVENUES APPEAL READ A S UNDER :- ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 2 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.40,83,46 0/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED PURCHASES U/S 69C OF THE INCOME-TAX ACT, 1961. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS IN ACCEPTING THE TRANSACTION OF SALE AND PURCHASE M ADE IN CASH AS GENUINE. 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.75,867/- MADE BY THE ASSESSING OFFICER BY WAY OF 50% DISALLOWANCE OF EXPENDITURE CLAIMED B Y THE ASSESSEE. 4. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS IN HOLDING THAT THE STATEMENTS OF VARIOUS PERSON WI THOUT BEING CONFRONTED TO THE ASSESSEE HAVE NO EVIDENTIARY VALUE AND THEY DID NOT HAVE ANY CONNECTION WITH THE ASSESSEE, WITHOUT PROPERLY APPRECIATING THE FACTS A ND CIRCUMSTANCES OF THE CASE. 5. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NO T TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. THE GROUND OF ASSESSEES CROSS OBJECTION READ AS UN DER :- 1. THAT IN VIEW OF THE FACTS & CIRCUMSTANCES OF T HE CASE AND IN LAW THE CIT (A) HAS ERRED IN NOT HOLDING THAT THE NOTICE ISSUED U/S 153C AND THE ASSESSMENT ORDER PASSED U/S 153C/143(3) ARE ILLEGAL, BAD IN LA W & WITHOUT JURISDICTION. 2. THAT ADMITTEDLY, AS RECORDED IN THE SATISFACTIO N NOTE, NO SEIZED DOCUMENT RELATED TO THE RELEVANT ASSESSMENT YEAR WAS FOUND A ND THE SEIZED PAPER REFERRED IN THE SAID SATISFACTION NOTE WERE DULY REFLECTED IN T HE REGULAR BOOKS OF A/C AND NO INCRIMINATING MATERIAL WAS FOUND. HENCE THE NOTICE ISSUED U/S 153C IS ILLEGAL, BAD IN LAW & WITHOUT JURISDICTION. 3. THAT IN VIEW OF THE FACTS & CIRCUMSTANCES OF TH E CASE THE CIT (A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ASSES SMENT HAS BEEN FRAMED IN CONFORMITY WITH STATUTORY PROVISION OF SECTION L53C R/W SECTION L53A OF THE ACT. 4. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN FACTS AND ON LAW IN UPHOLDING THE VALIDITY OF ASSESSMENT PARTICULARLY WHEN THE ASSESSMENT HAD BEEN MADE WITHOUT COMPLYING WITH THE LAW AND THE ADDITIONS MADE ARE ILLEGAL, BAD IN LAW & WITHOUT JU RISDICTION. ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 3 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LD CIT (A) HAS ERRED IN NOT CONSIDERING TH E FACT THAT THE ASSESSMENT PROCEEDING FOR THE YEAR UNDER APPEAL WAS NOT PENDIN G ON THE DATE OF THE RECORDING OF SATISFACTION U/S 153C OF THE ACT AND ACCORDINGLY THE SAME DID NOT ABATE FOR THE PURPOSE OF INITIATION OF PROCEEDINGS U/S 153C AND A S SUCH THE ASSESSMENT BEING BAD IN LAW DESERVES TO BE QUASHED. 6. THAT THE RESPONDENT RESERVES THE RIGHT TO ADD/A MEND/ALTER THE GROUNDS OF CROSS OBJECTION. 2. ASSESSEE IS A PRIVATE LIMITED COMPANY. AT THE R ELEVANT TIME, THE PAID UP CAPITAL OF COMPANY WAS RS.10,37,500. THE AUTHORIZ ED CAPITAL WAS RS.11,00,000/-. RESERVE AND SURPLUS WAS RS.9,37,500/- (SCHEDULE A & B). AS PER SCHEDULE D, ASSESSEE HAD MADE ADVANCES AGAINST PROPERTY OF RS.2 ,29,37,140/-. THE APPARENT SOURCE OF THIS INVESTMENT FROM THE BALANCE SHEET AP PEARS TO BE SHARE APPLICATION MONEY INWARD OF RS.2,12,20,000/- (SCHEDULE E). T OTAL ADMINISTRATIVE AND OTHER EXPENSES DEBITED IN P&L ACCOUNT ARE RS.1,51,735/- ( SCHEDULE I). THE TOTAL PURCHASES AND SALES AS PER P&L ACCOUNT ARE RS.40,83 ,460/- AND RS.42,42,525/- RESPECTIVELY. THERE IS NO OPENING AND CLOSING STOC K AS PER ACCOUNTS. 3. AT THE OUTSET OF THE HEARING, THE LD. AR SUBMITT ED THAT THE ISSUE RAISED IN APPEAL OF THE REVENUE IN GROUND NOS.1 & 2 ARE COVER ED IN FAVOUR OF THE ASSESSEE BY THREE DECISIONS OF COORDINATE BENCHES OF ITAT, DELH I BENCHES. IN THOSE CASES ALSO, THE ORDER OF ASSESSING OFFICER WAS OF CENTRAL CIRCLE 21. THE CIT (A)-II WAS ALSO THE SAME. THE ASSESSING OFFICER AND THE CIT ( A) ARE SAME IN ASSESSEES CASE. IN THOSE CASES, THE ADDITIONS WERE ALSO MADE ON ACC OUNT OF SAME FINDINGS AND ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 4 CONCLUSIONS AS ARRIVED MADE BY THE ASSESSING OFFICE R IN ASSESSEE CASE. IN ALL THESE CASES, THE TRADE WAS TEXTILE AND BOOKS OF ACCOUNT A ND REGISTERS FILED WERE NOT REJECTED. SAME IS THE CASE OF THE ASSESSEE. LD. A R MADE AVAILABLE THE COPIES OF THESE THREE DECISIONS OF ITAT, DELHI BENCHES IN THE CASE OF ACIT, CENTRAL CIRCLE 21, NEW DELHI VS. BLUE LUXURY IMPEX PVT. LTD. IN IT A NOS.5495 TO 5500/DEL/2011 DATED 13.06.2012; ACIT, CENTRAL CIRCL E 21, NEW DELHI VS. ANUPAMA LINKS PVT. LTD. IN ITA NO.4135 TO 4140/DEL/ 2012 DATED 12.10.2012 AND ACIT, CENTRAL CIRCLE 21, NEW DELHI VS. AA TESTRONIC S SOLUTIONS PVT. LTD. IN ITA NOS.4223 TO 4228/DEL/2012 DATED 12.10.2012. FURTHE R, LD. AR PLEADED THAT IN THESE CASES, THE RELIEF HAS BEEN GRANTED BY FOLLOWI NG THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RA DHIKA CREATION REPORTED IN (2011) 10 TAXMANN.COM 138 (DELHI) WHEREIN THE HON'B LE HIGH COURT HAS HELD THAT THERE CANNOT BE ADDITION U/S 69-C FOR RECORDED EXPE NSES IN THE BOOKS. LD. AR VEHEMENTLY PLEADED THAT APPEALS OF THE REVENUE BE D ISMISSED. HE ALSO PLEADED THAT IN ALL THESE CASES, THE ADDITION HAS BEEN DELETED O N MERITS. LD. AR HAS NOT PRESSED THE CROSS OBJECTION WHEREIN THE PROCEEDINGS U/S 153 -C HAS BEEN CHALLENGED. 4. LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFI CER. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RADHIKA CREATION, CITED SUPRA, HAS HELD THAT SECTION 69-C REFERS TO ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 5 THE SOURCE OF THE EXPENDITURE AND NOT TO THE EXPEND ITURE ITSELF AND CONSEQUENTLY, THE ASSESSING OFFICER WAS CLEARLY WRONG IN TREATING THE SAID EXPENDITURE AND UNEXPLAINED EXPENDITURE U/S 69-C OF THE ACT. THE R ELEVANT PARAS OF THE ORDER READ AS UNDER :- 2. PROPOSED QUESTIONS A TO C, AS WOULD BE APPARENT FROM A PLAIN READING THEREOF, RELATE TO THE ADDITION OF RS.44,38 ,997/- WHICH HAS BEEN HELD TO BE THE UNEXPLAINED EXPENDITURE OF THE ASSESSEE UNDER S ECTION 69C OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE S AID ACT). THE ASSESSING OFFICER HAD EXAMINED THE DETAILS OF THE SAI D EXPENDITURE AND FOUND THAT THE SAME WAS NOT AUTHENTICATED BY ANY VOUCHERS AND CONSEQUENTLY, MADE THE ADDITION OF RS.44,38,997/- AS UNEXPLAINED EXPENDITURE IN TERMS OF SECTION 69C OF THE SAID ACT. 3. WE MAY POINT OUT THAT DURING THE SEARCH AND SEIZURE OPERATIONS, AS INDICATED IN PARA 3.1 OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS), NO EVIDENCE WAS FOUND IND ICATING THAT THE ASSESSEE HAD ANY UNDISCLOSED INCOME. HOWEVER, THE AS SESSING OFFICER HAD DIRECTED THE ASSESSEE TO GET ITS ACCOUNTS AUDITED AS PER THE PROVISIONS OF SECTION 142(2A) OF THE SAID ACT. IT IS ON THE BASIS OF THE AUDIT REPORT PREPARED UNDER SECTION 142(2A) OF THE SAID ACT THAT THE ADDITION APPEARS T O HAVE BEEN MADE BY THE ASSESSING OFFICER. 4. THE CASE BEFORE US HAS TWO DIMENSIONS. THE FIRST BEING AS TO WHETHER THE ASSESSING OFFICER WAS RIGHT IN TREATING THE SAID SU M OF RS.44,38,997/- AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE SAID ACT. THE SECOND ASPECT IS WHETHER THE SAID ADDITION COULD L EGITIMATELY HAVE BEEN MADE IN THE COURSE OF A BLOCK ASSESSMENT. 5. INSOFAR AS THE FIRST ASPECT OF THE MATTER IS CONCERNED, WE FIND THAT SECTION 69C CLEARLY STIPULATES THAT WHERE, IN ANY FINANCIAL YEAR, THE ASSESSEE HAS INCURRED AN EXPENDITURE AND HE OFFERS NO EXPLAN ATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATI ON, IF IT IS OFFERED BY HIM, IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTO RY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS TH E CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. THUS, THE FOCUS OF SECTION 69C IS ON THE SOURCE OF SUCH EXPENDITURE AND NOT ON THE AUTHENTICITY OF THE EXPENDITURE ITSELF. IT IS AN ADMI TTED POSITION THAT THE EXPENDITURE WAS SHOWN BY THE ASSESSEE IN ITS REGULAR BOOKS OF A CCOUNTS AND IT IS BECAUSE OF THIS REASON THAT THE INCOME-TAX APPELLATE TRIBUNAL HAD OBSERVED:- ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 6 AS THE EXPENDITURE WAS ACCOUNTED IN TH E REGULAR BOOKS, THE SOURCE IS OBVIOUSLY EXPLAINED. THE PROVISIONS OF S ECTION 69C ARE NOT APPLICABLE AS THERE WAS NO UNACCOUNTED EXPENDITURE. [EMPHASIS SUPPLIED] 6. WHAT THE ASSESSING OFFICER ATT EMPTED TO DO WAS TO GO INTO THE AUTHENTICITY OF THE EXPENDITURE AND HE RETURNED A FINDING THAT THE EXPENDITURE WAS NOT AUTHENTICATED BY VOUCHERS AND C ONSEQUENTLY, HE ADDED THE SAID EXPENDITURE AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C. WE ARE IN AGREEMENT WITH THE OBSERVATIONS AND FINDINGS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS WEL L AS THAT OF THE INCOME-TAX APPELLATE TRIBUNAL THAT THIS IS NOT A CASE WHICH FA LLS UNDER SECTION 69C. CLEARLY, SECTION 69C REFERS TO THE SOURCE OF THE EX PENDITURE AND NOT TO THE EXPENDITURE ITSELF. CONSEQUENTLY, THE ASSESSING OFFICER WAS CLEARLY WRONG IN TREATING THE SAID EXPENDITURE AS UNEXPLAINED EXPEND ITURE UNDER SECTION 69C OF THE SAID ACT AND THE LOWER APPELLATE AUTHORITIES WERE R IGHT IN THEIR CONCLUSIONS IN DELETING THE SAID ADDITION. THE ASSESSEE HAS RELIED ON THREE CASES OF THE COORD INATE BENCH OF ITAT DELHI BENCHES. THE ITAT IN THE CASE OF ACIT VS. BLUE LU XURY IMPEX PVT. LTD., CITED SUPRA, HAS HELD AS UNDER :- 6. WE HAVE HEARD THE LEARNED DR AND HAVE GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY & AS PO INTED OUT BY THE LD. CIT(A), THE ENTIRE PURCHASES ADDED BY THE AO A RE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE AO, WITHOUT REJECTING TH E BOOKS RESULTS ADDED THE ENTIRE PURCHASES, SOURCE OF WHICH, ACCORDING TO LEARNED CIT(A), WAS DULY EXPLAINED. LIKEWISE, THE L EARNED CIT(A) FOUND THAT SALES HAD BEEN MADE BY ACCOUNT PAYEE CHEQUES A ND DULY REFLECTED IN STOCK REGISTERS AND SUPPORTED BY SALES AND PURCHASE VOUCHERS. THE LD. CIT(A) ALSO FOUND THAT THE AO IN HIS REMAND REPORT DID NOT COMMENT ADVERSELY ON THE SUBMISSIONS OF THE ASSESSEE IN RES PECT OF PURCHASES AND SALES. ACCORDINGLY, THE LD. CIT(A) DELETED THE AFOR ESAID ADDITIONS IN THESE SIX ASSESSMENT YEARS. WHILE INTERPRETING THE PR OVISIONS OF SEC. 69C OF THE ACT, HONBLE JURISDICTIONAL HIGH COURT IN RADHIKA CREATION(SUPRA) HELD THAT THE FOCUS OF SECTION 69C IS ON THE 'SOURC E' OF SUCH EXPENDITURE AND NOT ON THE AUTHENTICITY OF THE EXPENDITURE ITSE LF. IN THAT CASE ALSO IT WAS AN ADMITTED POSITION THAT THE EXPENDITURE WAS SHOWN BY THE ASSESSEE IN ITS REGULAR BOOKS OF ACCOUNT AND IT WAS BECAUSE OF THIS REASON THAT THE ITAT OBSERVED AS UNDER :- ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 7 'AS THE EXPENDITURE WAS ACCOUNTED IN THE REGULAR BO OKS, THE SOURCE IS OBVIOUSLY EXPLAINED. THE PROVISIONS OF SECTION 6 9C ARE NOT APPLICABLE AS THERE WAS NO UNACCOUNTED EXPENDITURE. ' [EMPHASIS SUPPLIED]' 6.1 HONBLE HIGH COURT, ACCORDINGLY, HELD THAT SECT ION 69C REFERS TO THE SOURCE OF THE EXPENDITURE AND NOT TO THE EXPENDIT URE ITSELF. CONSEQUENTLY, THE AO WAS CLEARLY WRONG IN TREATING THE SAID EXPEN DITURE AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE SAID ACT AND T HE LOWER APPELLATE AUTHORITIES WERE RIGHT IN THEIR CONCLUSIONS IN DELE TING THE SAID ADDITION, HONBLE COURT CONCLUDED. 6.2 IN THE INSTANT CASE BEFORE US, INDI SPUTABLY, THE PURCHASES AND SALES ARE ACCOUNTED FOR IN THE BOOKS OF ACC OUNTS. THUS, SOURCE OF THE EXPENDITURE INCURRED IN PURCHASES IS OBVIOUSLY EXPLAINED. IN THE LIGHT OF VIEW TAKEN IN THE THEIR AFORESA ID DECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT ,ESPECIALLY WHEN THE REVE NUE DID NOT PLACE ANY MATERIAL BEFORE US, CONTROVERTING THE AFORESAID FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) SO AS TO ENABLE US TO TA KE A DIFFERENT VIEW IN THE MATTER, WE HAVE NO BASIS TO INTERFERE. IN VIEW THER EOF, GROUND NOS.1 & 2 IN THE APPEAL ARE DISMISSED. IN ANOTHER CASE, THE ITAT IN THE CASE OF ACIT VS. A NUPAMA LINKS PVT. LTD., CITED SUPRA, HAS HELD AS UNDER :- 8. HAVING CONSIDERED THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE AND THE CONTENTIONS OF THE LD. DR, IT IS SEEN THAT THE MATTER IS INDEED COVERED IN FAVOUR OF THE ASSESSEE BY BLUE LUXURY IMPEX PVT. LTD (SUPRA). THE FIRST AND FORE MOST, THE SURVEY IN THE CASE OF THE ASSESSEE IS THE SAME AS TH AT IN BLUE LUXURY IMPEX PVT. LTD. THE ASSESSING OFFICER IN THE TWO CASES IS ALSO THE SAME. THE TRADE OF BOTH THE ASSESSEES IS ONE AND T HE SAME I.E., TRADE OF TEXTILES. THEN, IN BOTH CASES, BOOKS AND STOCK REGISTER WERE FILED AND THE ASSESSING OFFICER DID NOT REJECT THE SAME. THE LD. CIT (A) HAS, AS NOTED HEREINABOVE, TAKEN INTO ACCOUNT TH E FACT THAT ALL THE SALES MADE BY THE ASSESSEE STOOD RECORDED IN THE ASSESSEES BOOKS OF ACCOUNT, WHICH INCLUDED THE SALES AND PURCHASE V OUCHERS AND STOCK REGISTERS MAINTAINED BY THE ASSESSEE ON A DAY-TO -DAY BASIS. THESE ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 8 BOOKS OF ACCOUNT WERE DULY PRODUCED BEFORE TH E ASSESSING OFFICER AND THE ASSESSING OFFICER EXAMINED THEM, ON EXAMIN ATION, NO NEGATIVE OBSERVATION THEREAGAINST WAS RECORDED BY THE ASSESSING OFFICER. COMPLETE NAMES AND ADDRESSES OF THE PARTI ES TO WHOM THE GOODS WERE SOLD WERE AVAILABLE WITH THE ASSESSING O FFICER. MOST OF THE CUSTOMERS WERE ASSESSED TO INCOME-TAX. SALES W ERE MADE AGAINST THE OPENING STOCK. THE PURCHASES MADE DURING THE Y EAR AND THE SALES WERE BUT CONVERSION OF STOCK. THE PROFIT T HEREFROM HAD ALREADY BEEN TAXED. THE ASSESSING OFFICER DID NOT BRING AN YTHING ON RECORD TO INDICATE THAT THE SALE PROCEEDS REPRESENTE D THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE SALE T RANSACTIONS WITH M/S MICRON TEXTILES WERE GOT CONFIRMED BY THE ASSE SSING OFFICER ON A TEST CHECK BASIS. NO MORE INQUIRIES WERE MADE BY THE ASSESSING OFFICER THEREAFTER. THE ASSESSEES BOOKS OF ACCOUNT WERE AUDITED BOOKS OF ACCOUNT. THE TAX AUD IT REPORT WAS ON RECORD. THE AUDITORS HAD NOT MADE ANY NEGA TIVE OBSERVATION THEREIN. ALL THESE FACTS WERE DULY TAKEN IN TO CONSIDERATION BY THE LD. CIT (A) AND IT WAS THEREUPON THAT THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. 9. SO FAR AS IT REGARDS BLUE LUXURY IMPEX PVT. LTD., (SUPRA), UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE TRIBUNAL FOLLOWING CIT VS. M/S. RADHIKA CREATION, A JUDGMENT DATED 30.04. 2010, RENDERED BY THE HON'BLE DELHI HIGH COURT, HELD THE PROVISION S OF SECTION 69-C OF THE ACT TO BE NOT APPLICABLE. FURTHER, THE MATT ER IS ALSO COVERED BY BABULAL C. BORANA, 282 ITR 251 (BOM), WHICH IS ON SIMILAR LINES. 10. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ERROR IN T HE ORDERS PASSED BY THE LD. CIT (A) AND, ACCORDINGLY, THE SAM E ARE CONFIRMED. THE GRIEVANCE RAISED BY THE DEPARTMENT BY WAY OF TH E GROUNDS OF APPEAL TAKEN IS, THEREFORE, REJECTED. THE ITAT IN THE CASE OF ACIT VS. AA TESTRONICS SOLU TIONS PVT. LTD., CITED SUPRA, HAS HELD AS UNDER :- 8. HAVING CONSIDERED THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE AND THE CONTENTIONS OF THE LD. DR, IT IS SEEN THAT THE MATTER IS INDEED COVERED IN FAVOUR OF THE A SSESSEE BY ANUPAMA ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 9 LINKS PVT. LTD. (SUPRA). THE FIRST AND FO REMOST, THE SEARCH IN THE CASE OF THE ASSESSEE IS THE SAME AS TH AT IN ANUPAMA LINKS PVT. LTD.. THE ASSESSING OFFICER IN THE TWO C ASES IS ALSO THE SAME. THE TRADE OF BOTH THE ASSESSEES IS ONE AND THE SAME I.E., TRADE OF TEXTILES. THEN, IN BOTH CASES, BOOKS AND STOCK RE GISTER WERE FILED AND THE ASSESSING OFFICER DID NOT REJECT THE SAME. TH E LD. CIT (A) HAS, AS NOTED HEREINABOVE, TAKEN INTO ACCOUNT THE FA CT THAT ALL THE SALES MADE BY THE ASSESSEE STOOD RECORDED IN THE ASS ESSEES BOOKS OF ACCOUNT, WHICH INCLUDED THE SALES AND PURCHASE VOUC HERS AND STOCK REGISTERS MAINTAINED BY THE ASSESSEE ON A DAY-TO- DAY BASIS. THESE BOOKS OF ACCOUNT WERE DULY PRODUCED BEFORE TH E ASSESSING OFFICER AND THE ASSESSING OFFICER EXAMINED THEM, ON EXAMIN ATION, NO NEGATIVE OBSERVATION THEREAGAINST WAS RECORDED BY THE ASSESSING OFFICER. COMPLETE NAMES AND ADDRESSES OF THE PARTI ES TO WHOM THE GOODS WERE SOLD WERE AVAILABLE WITH THE ASSESSING O FFICER. MOST OF THE CUSTOMERS WERE ASSESSED TO INCOME-TAX. SALES W ERE MADE AGAINST THE OPENING STOCK. THE PURCHASES MADE DURING THE Y EAR AND THE SALES WERE BUT CONVERSION OF STOCK. THE PROFIT T HEREFROM HAD ALREADY BEEN TAXED. THE ASSESSING OFFICER DID NOT BRING AN YTHING ON RECORD TO INDICATE THAT THE SALE PROCEEDS REPRESENTE D THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE SALE T RANSACTIONS WITH M/S MICRON TEXTILES WERE GOT CONFIRMED BY THE ASSE SSING OFFICER ON A TEST CHECK BASIS. NO MORE INQUIRIES WERE MADE BY THE ASSESSING OFFICER THEREAFTER. THE ASSESSEES BOOKS OF ACCOUNT WERE AUDITED BOOKS OF ACCOUNT. THE TAX AUD IT REPORT WAS ON RECORD. THE AUDITORS HAD NOT MADE ANY NEGA TIVE OBSERVATION THEREIN. ALL THESE FACTS WERE DULY TAKEN IN TO CONSIDERATION BY THE LD. CIT (A) AND IT WAS THEREUPON THAT THE ISSUE WA S DECIDED IN FAVOUR OF THE ASSESSEE. 9. SO FAR AS IT REGARDS ANUPAMA LINKS PVT. LTD., (SUPRA), UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE TRIBUNAL FOLLO WING CIT VS. M/S. RADHIKA CREATION, A JUDGMENT DATED 30.04.2010, REN DERED BY THE HON'BLE DELHI HIGH COURT, HELD THE PROVISIONS OF SE CTION 69-C OF THE ACT TO BE NOT APPLICABLE. FURTHER, THE MATTER IS A LSO COVERED BY BABULAL C. BORANA, 282 ITR 251 (BOM), WHICH IS ON SIMILAR LINES. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ERROR IN T HE ORDERS PASSED BY THE LD. CIT (A) AND, ACCORDINGLY, THE SAME ARE CONF IRMED. THE ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 10 GRIEVANCE RAISED BY THE DEPARTMENT BY WAY OF THE GR OUNDS OF APPEAL TAKEN IS, THEREFORE, REJECTED. SINCE THE FACTS INVOLVE ARE SIMILAR, RESPECTFULLY F OLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT AND ALSO THE DECISIONS OF COORDINATE BENCH, WE DISMISS THE REVENUES APPEAL ON THIS ISSUE. 6. IN THE GROUND NO.3 & 4, THE ISSUE INVOLVED IS DE LETING THE ADDITION MADE BY DISALLOWING OF 50% OF THE EXPENDITURE CLAIMED BY TH E ASSESSEE. 7. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. FIRS T OF ALL, WE WOULD LIKE TO STATE THAT THERE WAS A CLERICAL MISTAKE IN RESPECT OF QUANTUM OF DISALLOWANCE WHICH HAS BEEN RECTIFIED BY THE CIT (A). FURTHER, THE DI SALLOWANCE WAS MADE COMPLETELY ON AD HOC BASIS. NO DEFECT WAS POINTED OUT IN THE EXPENDITURE CLAIMED. THE REVENUE HAS FAILED TO ESTABLISH THAT THESE EXPENDIT URE WERE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE CIT (A) HAS GRANTED THE RELIEF BY RELYING ON VARIOUS DECISIONS OF HON'BLE DELHI HIGH COURT. THE HON'BLE DELHI HIGH COURT HELD THAT ADDITIONS MA DE ON AD HOC BASIS ARE LIABLE TO BE DELETED. THE ASSESSING OFFICER IN THIS CASE HAS FAILED TO PINPOINT WHICH EXPENDITURE WAS NOT VERIFIABLE AND WERE NOT FOR BUS INESS PURPOSES OF THE ASSESSEE. LOOKING THESE FACTS IN VIEW, WE DISMISS THESE GROUN DS OF REVENUES APPEAL. ITA NO.2124/DEL/2012 CO NO.408/DEL/2012 11 7. SINCE WE HAVE DISMISSED THE REVENUES APPEAL AND THE LD. AR HAS NOT PRESSED THE CROSS OBJECTION, THEREFORE, THE SAME AL SO STANDS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2012. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF OCTOBER, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI