Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 0485 (ITAT-AGRA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 year(s) 1 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
16-05-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
24-07-2013
Assessment Year
2008-2009
Appeal Filed On
15-05-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 213/AGRA/2012 ASSTT. YEAR : 2008-09 D.C.I.T., CIRCLE 3(1), VS. M/S. JOGENDER SINGH & COMPANY, ETAH. SURESH PURI, G.T. ROAD, ETAH. (PAN: AABFJ 1334 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.L. MAURYA, SR. D.R. RESPONDENT BY : SHRI RAJENDRA SHARMA, MANUJ SHARMA , ADV. DATE OF HEARING : 24.07.2013 DATE OF PRONOUNCEMENT OF ORDER : 26.07.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A), GHAZIABAD DATED 10.02.2012 FOR THE ASSESSMENT YEAR 2008-09, CHALLENGING THE ORDER OF LD. CIT(A) IN DIRECTING THAT INCOME BE ASS ESSED AT THE RATE OF 7% OF THE GROSS RECEIPTS THEREBY ALLOWING RELIEF OF RS.8,01,9 9,322/- AND FURTHER DELETING THE ADDITION OF RS.1,25,33,911/- ON ACCOUNT OF UNCONFIR MED CREDITORS. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME DECLARING INCOME OF RS.1,63,89,430/-. THE ASSESSEE IS A FIRM. CASE WAS SELECTED FOR SCRUTINY ON ACCOUNT OF THE ASSESSEE NON CORPORATE HAVING INC OME FROM BUSINESS TO WHICH ITA NO. 213/AGRA/2012 2 SECTION 44AB APPLIES AND THE REASONS FOR SCRUTINY W AS THAT THE AO SHOULD EXAMINE THE CASE FROM THE POINT OF VIEW OF ANY UNDISCLOSED INTEREST INCOME. DURING THE YEAR, THE ASSESSEE HAS DERIVED INCOME FROM CONTRACT WORK AND BANK INTEREST. AUDIT REPORT U/S. 44AB WAS FILED. GROSS RECEIPTS OF THE A SSESSEE FROM BUSINESS IS RS.39,77,88,561/- AS PER TRADING ACCOUNT. THE ASSES SEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE AO. THEREFORE, THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY ADDITION SHOULD NOT BE MADE OF U NCONFIRMED CREDITORS AND THAT WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED AND 50% OF THE EXPENSES SHOULD NOT BE DISALLOWED. THE AO NOTICED IN THE ASSESSMENT ORDER THAT THE ASSESSEE INCURRED VARIOUS EXPENSES AND IN THE ABSENCE OF ANY OBJECTION TO THE NOTICE, 50% OF THE EXPENSES UNDER VARIOUS HEADS WERE DISALLOWED IN A SUM OF RS.9,16,55,092/-. THE AO MADE ADDITION OF RS.1,25,33,911/- AS UNCONFI RMED CREDITORS. BOTH THE ADDITIONS WERE CHALLENGED BEFORE THE LD. CIT(A). TH E ASSESSEE SUBMITTED THAT INITIALLY THE ASSESSEE COULD NOT APPEAR BECAUSE OF THE ILLNESS. IT WAS SUBMITTED IN THE WRITTEN SUBMISSIONS THAT VARIOUS DETAILS, ALL L IST OF BILLS AND MATERIAL, DETAILS OF MONTHLY EXPENSES UNDER DIFFERENT HEADS, BANK STATEM ENT AND OTHER DETAILS WERE PRODUCED BEFORE THE AO AND FORM PART OF THE RECORD. IT WAS SUBMITTED THAT PARTNERS OF THE FIRM MR. RAMESHWAR SINGH YADAV, HIS YOUNGER BROTHER JOGINDER SINGH, ARE THE EX. M.L.A, CHAIRMAN, ZILA PANCHAYAT, ETAH, BLOC K PRAMUKH IN ETAH AND OTHER PARTNERS/FAMILY MEMBERS ARE ALSO IN ACTIVE POLITICS . DUE TO POLITICAL ENMITY, ABOUT ITA NO. 213/AGRA/2012 3 100 FAKE CRIMINAL CASES WERE LODGED AGAINST THE PAR TNERS OF THE FIRM AND THEIR FAMILY MEMBERS INCLUDING LADIES AND CHILDREN. ALL T HE PARTNERS AND THEIR FAMILY MEMBERS WERE RUNNING HERE AND THERE TAKING SHELTER EVEN OUTSIDE STATE DUE TO CONTINUOUS POLICE RAIDS. UNDER THE PRESSURE OF LOCA L CABINET MINISTER EVEN LOCAL ADMINISTRATION HARASSED THE PARTNERS AND THEIR FAMI LY MEMBERS. THEREFORE, THERE WAS NO PROPER COMPLIANCE OF THE NOTICE. THERE WAS T HREAT TO LIFE OF PARTNERS AND THEIR FAMILY MEMBERS. ULTIMATELY, DUE TO FIRS AND O RDERS OF LOK AYUKT, THE MINISTER HAS TO RESIGN AND DM & SSP WERE ALSO FOUND GUILTY. DUE TO THE ABOVE FACTS, THERE WAS NON-COMPLIANCE. ACCOUNTS OF THE AS SESSEE ARE AUDITED AND COMPLETE DETAILS ARE MAINTAINED. IN THE LARGE CONTR ACT CASES OF CIVIL CONSTRUCTION OF GOVERNMENT DEPARTMENTS, THE PROFIT MARGIN IS VERY L AW AND THE SAME WOULD NOT BE MORE THAN 7 TO 8%. THEREFORE, 50% OF THE EXPENSES D ISALLOWED ARE UNREASONABLE AND UNJUSTIFIED. TRADE TAX AND OTHER TAXES /GOVERNM ENT DEDUCTIONS/FEES, ARE VERIFIABLE. SALARY IS VERIFIABLE FROM THE SALARY RE GISTER. PRINTING, STATIONERY, TRAVELING EXPENSES ARE VERIFIABLE AND SUPPORTED BY BILLS. AUDIT FEES WAS ALSO VERIFIABLE AS AUDIT DONE. BANK INTEREST AND COMMISS ION ARE VERIFIABLE AND THE REMUNERATION PAID TO THE PARTNERS IS VERIFIABLE. TH E CREDITORS ARE OLD ONE, WHICH ARE VERIFIABLE FROM THE LIST OF SUNDRY CREDITORS OF THE PRECEDING ASSESSMENT YEAR 2007- 08 AS PER RETURN OF INCOME FILED IN NORMAL COURSE. AUDITED LIST OF CREDITORS FOR EARLIER YEAR AND THIS YEAR ARE ATTACHED FOR VERIFIC ATION. IT WAS, THEREFORE, SUBMITTED ITA NO. 213/AGRA/2012 4 THAT BOTH THE ADDITIONS MAY BE DELETED. THE LD. CIT (A) CALLED FOR THE REMAND REPORT FROM THE AO ON THE WRITTEN SUBMISSIONS OF THE ASSES SEE. THE AO, HOWEVER, REITERATED THE FACTS STATED IN THE ASSESSMENT ORDER AND WITH REGARD TO THE COMMENTS ON DISALLOWANCE OF EXPENSES, IT WAS SUBMITTED BY TH E AO THAT DURING THE REMAND PROCEEDINGS, THE ASSESSEE PRODUCED BOOKS OF ACCOUNT , LEDGER AND CASH BOOK WITH VOUCHERS, WHICH HAVE BEEN TEST CHECKED. CERTAIN EXP ENSES, THE AO REPORTED THAT THE SAME ARE VERIFIABLE INCLUDING THE REMUNERATION PAID AND TAXES PAID TO THE GOVT. AGENCIES. IN RESPECT OF THE CREDITORS, IT WAS REPOR TED THAT THE ASSESSEE HAS SUBMITTED A CHART WHEREIN HE COMPARED THE OUTSTANDING BALANCE S OF THE CREDITORS AS ON 31.03.2008 WITH LAST YEAR AS ON 31.03.2007. THE ASS ESSEE CLAIMED THAT ON 31.03.2007, A BALANCE OF RS.4,37,12,147/- WAS OUTST ANDING TO 39 CREDITORS BUT DURING THE YEAR, 12 CREDITORS WERE PAID FULL OUTSTA NDING AMOUNT AND IN REMAINING CASES, PART PAYMENT WAS MADE OR THEY INCREASED DURI NG THE YEAR. DURING THE REMAND PROCEEDINGS, THE ASSESSEE FILED LIST OF CRED ITORS WITH THEIR ADDRESS AND CONFIRMATION ON AFFIDAVIT. AFFIDAVITS WERE FILED IN 24 CASES. THE CREDITORS WERE TEST CHECKED THROUGH SR. TA OF THE CIRCLE. ONLY 8 CREDI TORS LIVING IN ETAH AND NEARBY WERE IDENTIFIED AND 133(6) ON CREDITORS WERE SERVED AND THEIR CONFIRMATIONS OF OUTSTANDING BALANCES AND AFFIDAVITS ISSUED BY THEM WERE OBTAINED. THE SR. TA REPORTED THAT ALL THESE PERSONS WERE FOUND TO EXIST AND GIVEN ADDRESS AND THEY CONFIRMED THAT THEY WORK FOR ASSESSEE AND THE AMOUN T WAS DUE AT THE END OF THE ITA NO. 213/AGRA/2012 5 YEAR. THE ASSESSEE, HOWEVER, FAILED TO FILE CONFIRM ATION IN RESPECT OF THREE CREDITS, WHICH ARE IOC, RAJEEV VASHISHTHA AND BOBY GITTI. TH ESE CREDITORS WERE NOT PRODUCED. IT WAS, THEREFORE, SUBMITTED THAT APPEAL OF THE ASSESSEE DESERVES TO BE DISMISSED. THE ASSESSEE FILED REJOINDER TO THE REMA ND REPORT OF THE AO AND SAME FACTS WERE REITERATED AND IT WAS SUBMITTED THAT CON SIDERING THE HISTORY OF THE ASSESSEE, BOTH THE ADDITIONS ARE WHOLLY UNJUSTIFIED AND THAT THE AO TEST CHECKED ALL THE CREDITORS AND ALL THE BALANCES WERE CONFIRMED. THEREFORE, THE ADDITION IS UNJUSTIFIED. 3. THE LD. CIT(A), CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE, REMAND REPORT AND THE MATERIAL ON RECORD, DELETED THE ADDITION ON ACCOUNT OF CREDITORS BALANCES. FURTHER, DISALLOWANCE OF EXPENSES, THE LD. CIT(A) D IRECTED TO COMPUTE INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE OF 7%. THE APPEAL OF THE ASSESSEE WAS, THEREFORE, ALLOWED. PARTLY. FINDINGS OF THE LD. CIT (A) IN PARA 7 & 8 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 7. HAVING CAREFULLY CONSIDERED APPELLANTS SUBMISS ION AND ALSO THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER AS WELL AS IN REMAND REPORT, MY CONCLUSIONS/OBSERVATIONS ON GROUN DS TAKEN IN APPEAL ARE AS UNDER: 7.1 GROUNDS OF APPEAL NO.1 & 4 ARE OF GENERAL NATUR E. 7.2 GROUNDS OF APPEAL NO.2 & 3: THE APPELLANT HAS ARGUED THAT THERE WERE A LOT OF DETAILS ON RECORD BEFORE THE AO AND HENCE ASSESSMENT U/S 144 W AS NOT PROPER. ITA NO. 213/AGRA/2012 6 THE APPELLANT HAS ALSO STATED ABOUT THE CIRCUMSTANC ES WHICH PREVENTED FROM COMPLIANCE TO BE MADE BEFORE THE AO. IT IS ON RECORD THAT THE AO GAVE AMPLE OPPORTUNITI ES SPREAD OVER SPAN OF 16 MONTHS. IT IS NOT BELIEVABLE THAT T HE APPELLANT COULD NOT PRODUCE BOOKS OF ACCOUNTS AND SOME VITAL DETAIL S, IN SPITE OF SO MANY OPPORTUNITIES. THE ORDER SHEET NOTINGS (IN THE ASSESSMENT RECORD) HAVE BEEN PERUSED AND I AM CONVINCED THAT T HE AO HAD NO OTHER OPINION BUT TO RESORT TO THE EX-PARTE ORDER U /S 144 OF THE ACT. HOWEVER, AT THE SAME TIME, I FIND THAT THE AO HAS MADE UNREASONABLE BASIS OF ASSESSMENT BY ADDING ENTIRE S UNDRY CREDITORS BALANCES AND BY DISALLOWING 50% OF THE VARIOUS EXPE NSES: WHICH ADDITIONS HAVE RESULTED INTO A RIDICULOUSLY HIGH PR OFIT MARGIN OF AROUND 50%. EVEN A BEST JUDGMENT ASSESSMENT SHOULD BE BASED ON PRAGMATIC AND REASONABLE CONSIDERATIONS, AND THESE ARE DISCUS SED HEREAFTER. THE SUBMISSION AND DETAILS FILED BY THE APPELLANT DURING APPEAL WERE REMANDED TO THE AO. FROM REMAND REPORT, IT IS APPARENT THAT: (I) ALTHOUGH BOOKS OF ACCOUNT WERE PRODUCED IN REMAND P ROCEEDINGS BUT NON-PRODUCTION OF BOOKS DURING ASSESSMENT RAISE S ELEMENT OF DOUBT ON THE AUTHENTICITY AND RELIABILITY OF THESE BOOKS. (II) SOME PORTION OF EXPENSES ARE UNVERIFIABLE, AS REPOR TED BY THE AO. (III) HOWEVER, MOST OF THE CREDITORS BALANCES ARE VERIFI ED AND CONFIRMED. BESIDES ABOVE, I FIND THAT THE APPELLANTS OWN CASE FOR A.Y. 2005- 06 WAS COMPLETED U/S 143(3) AT A NP RATE OF 3.1% WH ILE THE APPELLANT HAD DECLARED NP OF 2.1% THUS, BY ADDITION OF 1% N.P . THE N.P. DECLARED BY THE APPELLANT FOR THIS YEAR I S OF AROUND 4.5%. I HOLD THAT IN VIEW OF NON-PRODUCTION OF BOOK S DURING ASSESSMENT, AND NON-VERIFIABILITY OF THE EXPENSES; SOME ADDITIONS IS JUSTIFIED. CONSIDERING THE TOTALITY OF FACTS AND CI RCUMSTANCES, I HOLD THAT IT WILL BE MEET BOTH THE ENDS OF JUSTICE IF TH E APPELLANTS INCOME IS ASSESSED BY ADOPTING N.P. RATE OF 7%. THIS RATE OF 7% IS CHOSEN BECAUSE IN ASSESSEES BUSINESS, IF BOOKS ARE NOT MA INTAINED, THEN THE ITA NO. 213/AGRA/2012 7 PRESUMPTIVE RATE OF TAX IS 8% QUITE MANY CIVIL CONT RACTORS DECLARE AN NP OF 7-8%. THE AO IS DIRECTED TO COMPUTE THE INCOME ACCORDING LY. 4. THE LD. DR MERELY RELIED UPON THE ORDER OF THE A O. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT ALL THE BOOKS OF ACCOUNT WERE PR ODUCED BEFORE THE AO AT THE REMAND PROCEEDINGS ALONG WITH VOUCHERS AND CONFIRMA TION OF ALL THE CREDITORS. THE DETAILS AND EVIDENCES COULD NOT BE PRODUCED BEFORE THE AO AT THE ASSESSMENT PROCEEDINGS DUE TO POLITICAL RIVALRY AND LARGE NUMB ER OF CRIMINAL CASE REGISTERED AGAINST THE PARTNERS OF THE ASSESSEE FIRM AND THEIR FAMILY MEMBERS. THEREFORE, THERE WAS SUFFICIENT CAUSE BY WHICH THE ASSESSEE WAS PREV ENTED FROM PRODUCING COMPLETE DETAILS BEFORE THE AO. HE HAS SUBMITTED TH AT SEVERAL DETAILS WERE PRODUCED EVEN AT THE ASSESSMENT STAGE. IN THE ASSES SMENT YEAR 2005-06, THE ASSESSMENT WAS COMPLETED U/S. 143(3) AT THE N.P. RA TE OF 3.1%. IN THE CASE OF CONTRACTOR EVEN THE PRESUMPTIVE NP RATE IS 8%. THER EFORE, THE LD. CIT(A) HAS CORRECTLY ADOPTED N.P. RATE OF 7% AND THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE LD. CIT(A). HE HAS SUBMITTED THAT THE PROFIT RATE APPLIED AS PER HISTORY OF THE ASSESSEE AND AS PER RATES APPLIED IN THE EARLIER ASSESSMENT ORDER WOULD ALWAYS BE BETTER TO COMPUTE INCOME. IN SUPPOR T OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING DECISIONS : ITA NO. 213/AGRA/2012 8 (I). DECISION OF M.P. HIGH COURT IN THE CASE OF DIN A NATH DUBEY VS. CIT, 160 ITR 1, (II). DECISION OF HONBLE HARYANA HIGH COURT IN THE CASE OF CIT VS. PAWAN KUMAR, 316 ITR 324. (III). DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. INAMI MARBLES (P) LTD., 316 ITR 125 (IV). DECISION OF HONBLE ALLAHABAD HIGH COURT IN T HE CASE OF DELTA ENGINEERING CO.(P) LTD. VS. CIT, 186 ITR 383. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT LIST OF SUNDRY CREDITORS IS FILED AT PAGE 1 OF THE PAPER BOOK AND THEIR CONFIRM ATIONS ARE FILED IN THE PAPER BOOK FROM PAGES 2 TO 27 IN WHICH IT HAS BEEN SPECIFICALL Y CONFIRMED THAT ALL THE CREDITORS HAVE SUPPLIED MITTI, DUST, BRICKS, CEMENT, PIPES ET C. IN THE YEAR 2007-08 AND THE AMOUNTS IN QUESTION AS SHOWN AGAINST THEIR NAMES WE RE OUTSTANDING BALANCES AS ON 31.03.2008. HE HAS SUBMITTED THAT ALL THE PARTIES C ONFIRMED THEIR OUTSTANDING BALANCES FOR SUPPLY OF MATERIAL, WHICH HAVE BEEN VE RIFIED BY THE AO AT THE REMAND PROCEEDINGS, THEREFORE, NOTHING WAS UNEXPLAINED OUT STANDING BALANCE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE PROD UCED BOOKS OF ACCOUNT AND VOUCHERS BEFORE THE AO AT THE REMAND PROCEEDINGS, W HICH HAVE BEEN EXAMINED AND TEST CHECKED BY THE AO. THE ASSESSEE IS IN THE BUSI NESS OF CONTRACTOR AND WAS ITA NO. 213/AGRA/2012 9 DOING CIVIL CONTRACT WORK MOSTLY FOR THE GOVERNMENT AGENCIES AS PER EXPLANATION OF THE ASSESSEE, WHERE THE PROFIT MARGIN IS ALWAYS LOW . SOME OF THE EXPENSES WERE ALSO VERIFIED BY THE AO AT THE REMAND PROCEEDINGS A ND FUND TO BE CORRECT. THUS, THE REASONS GIVEN BY THE ASSESSEE FOR NON-PRODUCTION OF THE COMPLETE DETAILS AT THE ASSESSMENT STAGE AS SUCH WAS FULLY EXPLAINED THAT D UE TO POLITICAL RIVALRY AND REGISTRATION OF CRIMINAL CASES AGAINST THE PARTNERS OF THE ASSESSEE FIRM, COMPLETE DETAILS COULD NOT BE PRODUCED AT THE ASSESSMENT STA GE. THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN CONSIDERING SUCH CIRCUMSTANCES FOR DECIDING THE ISSUE ON MERIT AND CONSIDERING THE EVIDENCES AND MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) FOUND THAT IN ASSESSMENT YEAR 2005-06, ASSESSMENT WAS COM PLETED U/S. 143(3) AT THE NP RATE OF 3.1%. IN THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS DECLARED NP RATE OF 4.5%. THEREFORE, THE LD. CIT(A) CONSIDERING THE HISTORY OF THE ASSESSEE CORRECTLY APPLIED NP RATE OF 7% TO COMPUTE THE BUSI NESS INCOME OF THE ASSESSEE. THE FINDINGS OF THE LD. CIT(A) ARE ALSO SUPPORTED B Y THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ABOVE. PRIVY COUNS EL IN THE CASE OF LAXMI NARAIN BADRI DAS, 5 ITR 170 HELD THAT ESTIMATE OF INCOME S HOULD BE FAIR. THE AO SHOULD NOT ACT DISHONESTLY OR VINDICTIVELY OR CAPRICIOUSLY . OWN KNOWLEDGE, PREVIOUS HISTORY, LOCAL KNOWLEDGE AND CIRCUMSTANCES OF THE A SSESSEE HAVE TO BE CONSIDERED TO ARRIVE AT FAIR AND PROPER ESTIMATE OF INCOME. HO NBLE DELHI HIGH COURT IN THE CASE OF AERO CLUB, 336 ITR 400 HELD THAT ASSESSMENT SHOULD BE ON REASONABLE ITA NO. 213/AGRA/2012 10 BASIS. PROFIT MARGIN DECLARED BY THE ASSESSEE CANNO T BE REJECTED ARBITRARILY. IN THIS CASE, THE CASE WAS SELECTED FOR SCRUTINY TO EXAMINE THE POINT OF UNDISCLOSED INTEREST INCOME FOR WHICH NO ADDITIONS HAVE BEEN MADE IN THI S CASE. EVEN ON PRESUMPTIVE BASIS, IN THE CASE OF CIVIL CONTRACTORS U/S. 44AD, THE PROFIT IS PROVIDED @ 8% FOR THE PURPOSE OF COMPUTING BUSINESS INCOME OF THE ASS ESSEE. THEREFORE, CONSIDERING THE HISTORY OF THE ASSESSEE, BACKGROUND OF NON-PROD UCTION OF BOOKS OF ACCOUNT AND LOWER PROFIT MARGIN ACCEPTED IN THE EARLIER YEAR WO ULD JUSTIFY THE FINDINGS OF THE LD. CIT(A) FOR COMPUTING THE BUSINESS INCOME BY APPLY T HE NP RATE OF 7%, WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE IN CROSS APPEAL . CONSIDERING THE ABOVE DISCUSSION, IN THE LIGHT OF THE CASE LAWS MENTIONED , WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A) N GRANTING PART RELIEF TO T HE ASSESSEE BY APPLYING THE NP AT THE RATE OF 7% INSTEAD OF DISALLOWANCE OF 50% OF TH E EXPENSES. GROUND NO. 1 OF APPEAL OF THE REVENUE HAS NO MERIT AND IS ACCORDING LY DISMISSED. 6. AS REGARDS UNEXPLAINED CREDITORS, THE ASSESSEE S UBMITTED A CHART BEFORE THE AO IN THE REMAND PROCEEDINGS TO SHOW THAT IN THE EA RLIER ASSESSMENT YEAR OUTSTANDING BALANCES AGAINST VARIOUS CREDITORS WAS RS.4,37,12,147/-. OUT OF THE SAME, 12 CREDITORS WERE PAID FULL OUTSTANDING AMOUN T AND IN THE REMAINING CASES, EITHER PART PAYMENT WAS MADE OR BALANCES HAVE INCRE ASED, BUT IN THE ASSESSMENT YEAR UNDER APPEAL FINAL OUTSTANDING BALANCES REMAIN ED AT RS.1,25,33,911/-. THE ITA NO. 213/AGRA/2012 11 ASSESSEE AT THE REMAND PROCEEDINGS FILED CONFIRMATI ONS IN THE SHAPE OF AFFIDAVITS, WHICH HAVE BEEN EXAMINED BY THE AO THROUGH SR. TA A ND CONFIRMATIONS FROM THE CREDITORS WERE RECEIVED AND THE CREDITORS WERE FOUN D TO EXIST AND THEY HAVE CONFIRMED THEIR DEBIT BALANCES. THE AO, HOWEVER, NO TED THAT IN THE REMAINING THREE CASES, NO CONFIRMATIONS WERE FILED BUT IN THE PAPER BOOK, SIMILAR THREE CREDITORS CONFIRMATIONS HAVE BEEN FILED. CREDITORS IN THEIR C ONFIRMATIONS HAVE CONFIRMED THAT THEY HAVE SUPPLIED MITTI, DUST, BRICKS, CEMENT, PIP ES ETC. TO THE ASSESSEE IN THE YEAR 2007-08 AND THERE WERE OUTSTANDING BALANCE LYING WI TH THE ASSESSEE. IN SOME OTHER CASES, CREDITORS HAVE SUPPLIED ROAD ROLLERS, JCB MA CHINE ON RENT TO THE ASSESSEE AND THE SOME AMOUNTS WERE OUTSTANDING AT THE END OF THE YEAR. THE ASSESSEE ALSO FILED BALANCE SHEET OF EARLIER YEAR ENDING ON 31.03.2007 WITH LIST OF SUNDRY CREDITORS. THE SAME IS ALSO COMPARED WITH THE LIST OF SUNDRY C REDITORS OF THIS YEAR AND MOST OF THE OUTSTANDING BALANCES ARE COMING FROM EARLIER YE AR. THEREFORE, FINDING OF THE AO CANNOT BE SUSTAINED. IT IS NOT IN DISPUTE THAT T HE CREDITORS HAVE PROVIDED BUILDING MATERIAL FOR CIVIL CONSTRUCTION WORK AND R OAD ROLLER AND JCB MACHINE TO THE ASSESSEE FOR THE BUSINESS ACTIVITIES OF THE ASS ESSEE. THEREFORE, ON USE OF BUILDING MATERIAL AND ABOVE MACHINES, IF SOME OUTST ANDING AMOUNT IS LEFT DUE AT THE END OF FINANCIAL YEAR, WHICH IS CONFIRMED BY TH E CREDITORS, THEREFORE, NOTHING IS LEFT UNEXPLAINED LIABILITY. THE LD. CIT(A), THEREFO RE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES AND REMAND REPORT OF THE AO RIGHTLY HELD THAT MOST OF THE ITA NO. 213/AGRA/2012 12 CREDITORS BALANCES ARE VERIFIED AND CONFIRMED. IT I S A DEPARTMENTAL APPEAL AND NOTHING IS PRODUCED BEFORE US TO CONTRADICT THE FIN DING OF FACT RECORDED BY THE LD. CIT(A) IN FAVOUR OF THE ASSESSEE. THE LD. DR MERELY RELIED UPON THE ORDER OF AO WITHOUT POINTING OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). THEREFORE, IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL IN FAVOUR OF TH E REVENUE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDINGS OF FAC T RECORDED BY THE LD. CIT(A) IN FAVOUR OF THE ASSESSEE. GROUND NO. 2 OF APPEAL OF T HE REVENUE IS ALSO DISMISSED. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY
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