Haryana Jewellers P.Ltd, Delhi V. ITO, Ward-11(1), New Delhi

ITA 2315/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1394 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: REPUDAMAN THAKUR
• Keywords: Bogus purchase; Accommodation entries; Block assessment; Retraction; Revenue expenditure
• Section: 153A; 133(6); 37; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2315/DEL/2018 ASSESSMENT YEAR: 2013-14 HARYANA JEWELLERS P. LTD. 1157/1124, 1 ST FLOOR, KUCHA MAHAJANI, CHANDNI CHOWK, DELHI-110006 PAN : AABCH7315P VS ITO, WARD-11(1) NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SHRI REPU DAMAN THAKUR, ADV. REVENUE BY : SHRI RAVI KANT GUPTA, SR. DR DATE OF HEARING : 12.06.2018 DATE OF PRONOUNCEMENT : O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST ORDER DATED 22/01/2018 PASSED BY THE LD. CIT (APPEA LS)-4, NEW DELHI FOR THE ASSESSMENT YEAR 2013-14. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED DECLARING INCOME AT RS. 14,95,810/- AND THE S AME WAS SUBSEQUENTLY SELECTED FOR SCRUTINY. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE AMOUNT OF RS. 1,00,500/- WAS CLAIMED AS DEDUCTION O N ACCOUNT OF EXPENDITURE INCURRED ON ACCOUNT OF ROC FEE PAID TO ENHANCE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 2 THE AUTHORISED SHARE CAPITAL OF THE ASSESSEE COMPAN Y. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXPENDIT URE RELATING TO INCREASE IN SHARE CAPITAL WAS CAPITAL IN NATURE AND WAS LIABLE TO BE DISALLOWED AS EXPENDITURE. ACCORDINGLY, AN ADDI TION OF RS. 1,00,500/- WAS MADE ON THIS ACCOUNT. FURTHER, THE DEPARTMENT WAS ALSO IN RECEIPT OF A LETTER FROM CENTRAL CIRCLE -4, SURAT DATED 30.11.2015 WHEREIN IT WAS INFORMED THAT SEARCH OPER ATION HAD BEEN CARRIED OUT IN RAJENDRA JAIN GROUP OF CASES AN D AS PER THE STATEMENT RECORDED THERE, IT WAS SEEN THAT THIS GRO UP WAS ENGAGED IN PROVIDING BOGUS BILLS FOR TRADING TRANSA CTIONS ON COMMISSION BASIS. A LIST OF BENEFICIARIES WHO HAD O BTAINED ACCOMMODATION ENTRIES BY WAY OF BOGUS PURCHASE/S WA S ATTACHED WITH THE COMMUNICATION RECEIVED AND IT WAS SEEN THAT THE ASSESSEE WAS ONE OF THE ALLEGED BENEFICIARIES I N THIS REGARD BY WAY OF OBTAINING PURCHASE BILL OF RS. 30,01,478/- F ROM M/S AVI EXPORTS, SURAT. IT WAS ALSO BEEN NOTED BY THE ASSES SING OFFICER THAT AVI EXPORTS WAS ONE OF THE PROPRIETORSHIP CONC ERNS OF SHRI R.S. JAIN AND RAJENDRA JAIN GROUP OF CASES. ACCORD INGLY, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE PUR CHASE BILL OF RS. 30,01,478/- OBTAINED FROM M/S AVI EXPORTS BE NO T DISALLOWED. SUBSEQUENTLY, THE ASSESSING OFFICER PR OCEEDED TO ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 3 MAKE A DISALLOWANCE OF RS. 30,01,478/-. IN ADDITIO N, THE ASSESSING OFFICER ALSO MADE ANOTHER ADDITION OF RS. 8,07,272/- BEING ALLEGED BOGUS PURCHASE FROM M/S PARUL DIAMOND PRIVATE LIMITED ON THE GROUND OF NOT HAVING BEEN GENUINELY SUBSTANTIATED. THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 54,05,057/- . 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LEARNED FIRST APPELLATE AUTHORITY CHALLENGING THE ADDITIONS WHO P ARTLY ALLOWED THE ASSESSEES APPEAL BY DELETING THE ALLEGED BOGUS PURCHASE OF RS. 8,07,272/- FROM M/S PARUL DIAMOND PRIVATE LIMIT ED BUT PARTLY UPHELD THE DISALLOWANCE OF ALLEGED BOGUS PUR CHASE FROM M/S AVI EXPORTS BY RESTRICTING THE DISALLOWANCE TO RS. 7,50,370/- BEING 25% OF THE TOTAL VALUE OF PURCHASE FROM M/S A VI EXPORTS. LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO UPHEL D THE DISALLOWANCE OF RS. 1,00,500/- PAID ON ACCOUNT OF P AYMENT OF ROC FEE. 2.2 AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE ITAT AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE CIT(A) - 4, NEW DELHI, IS ARB ITRARY, FALLACIOUS AND ILLEGAL ON THE FOLLOWING GROUNDS AND , ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 4 THEREFORE, MERITS TO BE QUASHED WITH DIRECTIONS FOR APPROPRIATE RELIEF TO THE ASSESSEE :- 1) THAT CIT (A) FAILED TO APPRECIATE THAT THE NOTICE ISSUED U/S. 143(2) AND THE ASSESSMENT ORDER PASSED U/S. 14 3(3) OF INCOME-TAX ACT ARE ILLEGAL AND VOID AB INITIO BECAUSE : I) ANY MATERIAL UNEARTHED DURING SEARCH OPERATIONS OR ANY STATEMENT MADE DURING COURSE OF SEARCH, BY MR. R.S. JAIN, SURAT, IS A VALUABLE PIECE OF EVIDENCE AND THEREFORE, ASSESSING OFFICER IS BOUND TO ISSUE NOTICE U/S 153C AND THEREAFTER PROCEED TO ASSESS INCOME U/S 153A OF THE I.T. ACT; II) ASSESSMENT PENDING ON THE DATE OF INITIATION OF THE SEARCH U/S. 132 SHALL ABATE IN TERM OF 2 ND PROVISO TO SEC. 153A(1) READ WITH SEC. 153C OF THE I.T. ACT; III) SEC. 153C HAS BEEN AMENDED BY THE FINANCE ACT, 2015 TO SUBSTITUTE THE WORDS BELONGS TO WITH RELATES TO WHICH INDICATES THAT EVEN IF THE BOOKS OF ACCOUNT DO NOT BELONG TO THE PERSON WHO HAS NOT BEEN SEARCHED U/S. 132, HE CAN STILL BE PROCEEDED WITH FOR BLOCK ASSESSMENT IF THE BOOKS FOUND DURING SEARCH REVEAL ANY INCOME WHICH HAS A BEARING ON HIM. 2) THAT CIT(A) FAILED TO APPRECIATE THAT THE PROVI SION OF SEC.153C HAS TO BE COMPLIED STRICTLY AND HENCE NON- SATISFACTION OF THE CONDITION PRECEDENT, VIZ. I) RECORDING OF SATISFACTION BY THE AO OF SEARCHED PERSON; AND II) RECORDING OF SATISFACTION BY THE AO OF OTHER PERSO N; AND III) ISSUING NOTICE U/S. 153C BY THE AO OF OTHER PERSON IS A JURISDICTIONAL ISSUE AND NON SATISFACTION THEREOF WOULD MAKE THE ENTIRE PROCEEDINGS TAKEN THEREUNDER NULL AND VOID. THE ISSUE OF DISALLOWANCE U/S. 37 REGARDI NG PURCHASE AND ROC FEE CAN ONLY ARISE FOR CONSIDERATION IF THE PROCEEDINGS U/S. 153C OF THE ACT ARE UPHELD. 3) THAT THE CIT(A) ERRED IN CONFIRMING AN ADDITION OF RS. 7,50,370/-, WHICH IS 25% OF THE TOTAL PURCHASE OF RS.30,01,478/- FROM M/S. AVI EXPORTS, SURAT, BEING DISALLOWED, IN TOTO, BY ASSESSING OFFICER ARBITRARI LY AND ON MERE SUSPICION AND FURTHER IGNORING THE AFFIDAVITS ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 5 ALONGWITH DOCUMENTARY EVIDENCES, AS FILED BY MR. R. S. JAIN. 4) THAT THE CIT(A) ERRED IN CONFIRMING AN ADDITION OF RS.100,500/- ON ACCOUNT OF ROC FEE, BEING DISALLOWE D BY ASSESSING OFFICER IGNORING THE FACT THAT SUCH ENTIR E INCREMENTAL SHARE CAPITAL WAS USED FOR MEETING THE NEED FOR MORE WORKING CAPITAL REQUIREMENT AND HENCE, WAS TO BE ALLOWED AS REVENUE EXPENDITURE. 5) THAT CIT(A) ERRED IN NOT DISMISSING THE GROUND OF INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 3. THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE HAD PURCHASED DIAMONDS OF RS.30,01,478/- FROM M/S. AVI EXPORTS, THE PROPRIETARY CONCERN OF SHRI R.S. J AIN [RAJINDRA SOHANLAL JAIN], SURAT, GUJURAT, DURING THE FINANCIAL YEAR 2012-13 AND HAD DULY RECORDED THE TRANSACTION IN ITS BOOKS OF ACCOUNT. IT WAS FURTHER SUBMITTED THAT THE ENTIRE PAYMENT WAS M ADE BY CHEQUES/RTGS VIA UNION BANK OF INDIA, CHANDNI CHOWK , DELHI- 110006. THE LD. AUTHORISED REPRESENTATIVE SUBMITTE D THAT THE LD. CIT (A) HAD ERRED IN CONFIRMING AN ADDITION OF RS. 7,50,370/-, WHICH IS 25% OF THE TOTAL PURCHASE OF RS. 30,01,478 /- FROM M/S. AVI EXPORTS, SURAT, BEING DISALLOWED, IN TOTO, BY A SSESSING OFFICER ARBITRARILY AND ON MERE SUSPICION AND BY IGNORING T HE AFFIDAVITS ALONG WITH DOCUMENTARY EVIDENCES, AS FILED BY MR. R . S .JAIN. THE LD. AR DREW OUR ATTENTION TO THE FOLLOWING DOCUMENT S WHICH WERE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 6 FILED BEFORE THE LOWER AUTHORITIES AND WERE NOW FOR MING PART OF THE PAPER BOOK FILED BY THE ASSESSEE: -LOOSE DIAMONDS [AS PER BOOKS OF M/S. HARYANA JEWEL LERS (P) LTD. -STOCK REGISTER FOR THE FINANCIAL YEAR: 2012-13 -QUANTITATIVE RECONCILIATION OF STOCK -M/S. AVI EXPORTS LEDGER FOR THE F.Y.: 2012-13 ALON G WITH UNION BANK STATEMENT -M/S. AVI EXPORTS LEDGER FOR THE F.Y.: 2013-14 ALON G WITH UNION BANK STATEMENT -AFFIDAVIT OF RAJENDRA SOHANLAL JAIN [R.S.JAIN], PR OPRIETOR OF M/S. AVI EXPORTS, SURAT, GUJARAT AS FILED BEFORE THE ITO , WARD-11(1), DELHI IN RESPONSE TO REQUISITION U/S. 133(6) OF ACT -CONFIRMATION OF BALANCE OF M/S. HARYANA JEWELLERS PVT. LTD. AS ON 31-03-2014 -SALES REGISTER REGARDING SALES MADE TO M/S. HARYAN A JEWELLERS PVT. LTD. FOR THE PERIOD 01-04-2012 TO 31-03-2013 -COPY OF LEDGER OF M/S. HARYANA JEWELLERS PVT. LTD. FOR THE F.Y.: 2012-13 -BANK STATEMENT OF ING VYSYA BANK TO SUBSTANTIATE R ECEIPT AGAINST SALES MADE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 7 -INCOME-TAX RETURN OF MR. R.S.JAIN FOR A.Y.: 2013-1 4 ALONG WITH PAN -RETRACTION OF STATEMENT BY MR. R.S.JAIN REGARDING STATEMENT MADE DURING SEARCH AND AFTER SEARCH, AS FILED BEFOR E THE DY. CIT, SURAT -AFFIDAVIT CONTAINING COMPREHENSIVE INFORMATION REG ARDING RETRACTION OF STATEMENT BY MR. R.S.JAIN. 3.1 THE LD. AR SUBMITTED THAT THAT ALL THE DOCUMENT ARY EVIDENCES, AS FILED BY M/S. HARYANA JEWELLER (P) LTD. AS WELL AS MR. R.S. JAIN WERE TOTALLY IGNORED/REJECTED MERELY ON THE BASIS OF CONJECTURE AND SURMISES. FURTHER, AN AFFIDAVIT OF MR. R.S. JAIN WAS ALSO REJECTED ARBITRARILY. IT WAS SUBMITTED THAT IT IS S ETTLED LAW THAT AFFIDAVIT IS A VALID PIECE OF EVIDENCE AND THE SAME CANNOT BE REJECTED SUMMARILY WITHOUT ASSIGNING ANY REASON. 3.2 IT WAS FURTHER SUBMITTED THAT THE STATEMENT GIV EN BY SHRI RS JAIN WAS SUBSEQUENTLY RETRACTED BY HIM THIS FACT WAS ALSO IGNORED BY THE DEPARTMENT AND THE ADDITION WAS MADE ENTIRELY ON THE BASIS OF THE STATEMENT OF SHRI RS JAIN WHICH WAS RECORDED DURING THE COURSE OF SEARCH IN THE PREMISES OF RS J AIN GROUP OF CASES. IT WAS SUBMITTED THAT NO ADDITION CAN BE MAD E OR SUSTAINED SIMPLY ON BASIS OF STATEMENT RECORDED AT TIME OF ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 8 SURVEY / SEARCH. IN OTHER WORDS, IN ORDER TO MAKE A N ADDITION ON THE BASIS OF SURRENDER DURING SEARCH OR SURVEY, IT IS SINE QUA NON THAT THERE SHOULD BE SOME OTHER MATERIAL TO CORRELATE THE UNDISCLOSED INCOME WITH SUCH STATEMENT. 3.3 THE LD. AR ALSO SUBMITTED THAT THE SALES WERE A CCEPTED AS GENUINE AND, THEREFORE, THE PURCHASE CANNOT BE TREA TED AS BOGUS. 3.4 ARGUING FOR THE OTHER ISSUE BEFORE THE ITAT, TH E LD. AR SUBMITTED THAT THE LD. CIT (A) HAD ERRED IN CONFIRM ING AN ADDITION OF RS. 100,500/- ON ACCOUNT OF ROC FEE, BE ING DISALLOWED BY ASSESSING OFFICER IGNORING THE FACT T HAT SUCH ENTIRE INCREMENTAL SHARE CAPITAL WAS USED FOR MEETING THE NEED FOR MORE WORKING CAPITAL REQUIREMENT AND HENCE, WAS TO BE ALLOWED AS REVENUE EXPENDITURE. IT WAS SUBMITTED THAT IN TH E CASE OF M/S. HARYANA JEWELLERS (P) LTD., THE FUNDS REALIZED FROM THE ISSUE OF SHARE CAPITAL WERE USED FOR MEETING THE NE ED OF WORKING CAPITAL AND THAT SUCH FACT IS EVIDENT FROM THE BALA NCE SHEET AS ON 31.03.2014 & 31-03-2013 ALONG WITH THE WORKING C APITAL FUNDS AVAILABILITY FOR BUSINESS PURPOSES. IT WAS PR AYED THAT THIS DISALLOWANCE SHOULD ALSO BE DELETED. ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 9 4. IN RESPONSE TO THE CONTENTIONS RAISED BY THE LD. AR, THE LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) PLACED RELIANC E ON THE CONCURRENT FINDINGS OF THE LD. COMMISSIONER OF INCO ME TAX (A) AND THE ASSESSING OFFICER AND SUBMITTED THAT THE AS SESSMENT WAS COMPLETED BASED ON CONCRETE INFORMATION AND THE STA TEMENT OF SHRI R.S. JAIN REGARDING PROVIDING BOGUS PURCHASE B ILLS TO THE ASSESSEE. IT WAS ALSO SUBMITTED THAT DURING THE CO URSE OF SEARCH, NO STOCK WAS FOUND WHICH COULD ESTABLISH THAT THE P URCHASES HAD ACTUALLY BEEN MADE BY THE ASSESSEE. IT WAS ALSO SU BMITTED THAT SHRI R.S. JAIN HAD RETRACTED THE STATEMENT AFTER MO RE THAN ONE YEAR FROM THE RECORDING OF STATEMENT AND THE RETRAC TION IS NOT SUPPORTED BY FACTS. IT WAS ALSO SUBMITTED THAT THE RE WAS NO PROOF OF THE ALLEGED PURCHASED DIAMONDS HAVING BEEN TRANS PORTED WHICH COULD ESTABLISH THE GENUINENESS OF THE PURCHA SE TRANSACTION. LD. SR. DR ALSO SUBMITTED THAT THE AS SESSEE WAS DULY CONFRONTED WITH THE DOCUMENTS ON WHICH THE DEP ARTMENT HAD PLACED RELIANCE WHILE MAKING THE ADDITION WITH RESPECT TO THE ALLEGED BOGUS PURCHASES. 4.1 WITH RESPECT TO THE DISALLOWANCE PERTAINING TO ROC FEES, THE LD. SR. DR PLACED STRONG RELIANCE UPON THE FINDINGS RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (A). ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 10 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE STATEMENT OF SHRI RAJENDRA JAIN, ON WHICH THE DEPAR TMENT HAS RELIED WHILE MAKING THE ADDITION OF RS. 30,01,478/- , HAS BEEN RETRACTED BY SHRI RAJENDRA JAIN. THIS FACT HAS BEE N DULY NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IN PARA 3.4.6 WHEREIN IT HAS BEEN MENTIONED THAT THE STATEMENT OF SHRI RAJENDRA JAIN HAD BEEN RETRACTED. HOWEVER, THE ASS ESSING OFFICER HAS HELD THAT THE ASSESSEE CANNOT BE ALLOWE D THE BENEFIT OF RETRACTION OF STATEMENT BY SHRI RAJENDRA JAIN BE CAUSE THE DEPARTMENT HAD REJECTED THE RETRACTION OF SHRI RAJE NDRA JAIN IN HIS CASE ON THE GROUND THAT SHRI RS JAIN HAD NOT FI LED THE AFFIDAVIT REGARDING RETRACTION BEFORE THE INVESTIGA TION WING. IT IS FURTHER SEEN THAT THE ASSESSEE HAD FILED THE FOLLOW ING DOCUMENTS BEFORE THE LOWER AUTHORITIES TO SUBSTANTIATE THE GE NUINENESS OF PURCHASE: STOCK REGISTER, QUANTITATIVE RECONCILIATI ON STATEMENT, COPY OF LEDGER ACCOUNTS OF M/S AVI EXPORTS ALONG WI TH BANK STATEMENT FROM WHICH THE PAYMENTS FOR PURCHASES WER E MADE. APART FROM THIS, THERE IS AFFIDAVIT OF SHRI RAJENDR A JAIN, PROPRIETOR OF M/S AVI EXPORTS WHICH WAS FILED IN RE SPONSE TO REQUISITION U/S 133(6) OF THE ACT AND ALSO CONFIRMA TION OF BALANCE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 11 OF THE ASSESSEE COMPANY, COPY OF SALES ACCOUNT REGA RDING SALES MADE TO THE ASSESSEE, COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S AVI EXPORTS, COPY OF BANK STATEMEN T OF M/S AVI EXPORTS TO SUBSTANTIATE RECEIPT OF PAYMENT AGAINST PURCHASES, THE RETRACTION OF STATEMENT BY SHRI RAJENDRA JAIN R EGARDING STATEMENT MADE AFTER SEARCH AND AS FILED BEFORE THE DCIT, SURAT AND AFFIDAVIT OF SHRI RAJENDRA JAIN REGARDING RETRA CTION OF STATEMENT. A PERUSAL OF THE ORDER OF THE LOWER AUT HORITIES SHOWS THAT ALL THESE DOCUMENTS WERE COMPLETELY DISREGARDE D BY THE LOWER AUTHORITIES WITHOUT ASSIGNING ANY REASON. IT IS ALSO NOTEWORTHY THAT THE SALES AS DECLARED BY THE ASSESS EE WERE ACCEPTED TO BE GENUINE BY THE DEPARTMENT AND IT IS ONLY PURCHASES WHICH ARE BEING DOUBTED BY THE DEPARTMENT . HOWEVER, NO COGENT REASON HAS BEEN GIVEN BY THE DEPARTMENT F OR TREATING THE PURCHASES AS NOT BEING GENUINE BUT ACCEPTING TH E SALES MADE AGAINST THE SAID BOGUS PURCHASES AS GENUINE. THERE FORE, ON OVERALL FACTS OF THE CASE, IT IS OUR CONSIDERED OPI NION THAT THE LD. COMMISSIONER OF INCOME TAX (A) WAS NOT CORRECT IN S USTAINING THE DISALLOWANCE TO THE TUNE OF 25% OF THE ALLEGED BOGU S PURCHASE WHEN THE VERY BASIS ON WHICH THE BOGUS PURCHASES HA VE BEEN ALLEGED TO HAVE BEEN MADE DOES NOT STAND IN VIEW OF THE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 12 RETRACTION OF STATEMENT BY SHRI RAJENDRA JAIN AS WE LL AS THE VOLUMINOUS DOCUMENTARY EVIDENCES WHICH WERE FILED B Y THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND WHICH SUB STANTIATE THE GENUINENESS OF THE PURCHASES FROM M/S AVI EXPORTS. THEREFORE, UNDER THE CIRCUMSTANCES, WE ARE UNABLE TO CONCUR WI TH THE FINDINGS OF THE LOWER AUTHORITIES AND WE DEEM IT FI T TO SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION WITH R ESPECT TO THE ALLEGED BOGUS PURCHASES. 5.1 COMING TO THE OTHER ISSUE WHICH THE ASSESSEE HA S CHALLENGED I.E. CONFIRMATION OF ADDITION OF RS. 1,0 0,500/- ON ACCOUNT OF ROC FEE, IT IS SEEN THAT THE ITAT MUMBAI BENCH IN THE CASE OF NAVI MUMBAI SEZ (P) LTD. VS. ACIT REPORTED IN (2015) 54 TAXMANN.COM 259 (MUMBAI-TRIB.) HAS HELD THAT WHERE AN ASSESSEE INCURRED CERTAIN EXPENDITURE FOR INCREASE IN SHARE CAPITAL, IN VIEW OF THE FACT THAT ENTIRE INCREMENTA L SHARE CAPITAL WAS USED FOR PURCHASE OF TRADING STOCK, EXPENDITURE IN QUESTION WAS TO BE ALLOWED AS REVENUE EXPENDITURE. LD. AR H AS DRAWN OUR ATTENTION TO THE WORKING CAPITAL ANALYSIS PLACED AT PAGE 61 OF THE PAPER BOOK AND HAS SUBMITTED THAT SINCE THE INCREME NTAL SHARE CAPITAL WAS USED FOR WORKING CAPITAL REQUIREMENTS, THE ROC FEE ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 13 WAS ALLOWABLE AS A DEDUCTION. IN VIEW OF THE ORDER OF THE ITAT MUMBAI BENCH IN THE CASE OF NAVI MUMBAI SEZ (P) LTD . VS. ACIT (SUPRA), WE DEEM IT FIT TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CONTENTION OF THE ASSESSEE THAT THE INCREMENTAL SHARE CAPITAL WAS USED FOR THE PURP OSE OF WORKING CAPITAL AND, THEREAFTER, ALLOW THE CLAIM OF THE ASSESSEE IF THE ASSERTION OF THE ASSESSEE IS FOUND TO BE CORREC T, AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS C ASE. THUS, THIS GROUND STANDS ALLOWED FOR STATISTICAL PURPOSES . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED IN TERMS OF ABOVE MENTIONED DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2018. SD/- SD/- (N.K.BILLAIYA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH SEPTEMBER, 2018 GS ITA NO. 2315/DEL/2018 ASSESSMENT YEAR 2013-14 14 COPY FORWARDED TO: - 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR TRUE COPY BY ORDER ASSTT. REGISTRAR