M/s Chawla Fashions, Mohali V. ITO, Mohali

ITA 235/CHANDI/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5316 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Unexplained cash credit; Unexplained expenditure; Gift; Business income; Additional evidence; Reasonable cause
• Section: 40A(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.235/CHD/2013 (ASSESSMENT YEAR : 2009-10) M/S CHAWLA FASHIONS, VS. THE INCOME TAX OFFICER, SCF 85, PHASE VII, WARD -6 (3), MOHALI. MOHALI. PAN: AADFC8183F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 09/01/2018 DATE OF PRONOUNCEMENT : 22.01.2018 ORDER PER ANNAPURNA GUPTA, A.M.: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS ), CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(APPEALS )] DATED 1.12.2012 RELATING TO ASSESSMENT YEAR 2009-10. 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDE R: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS.17,72,872/- TREATING THE SAME TO BE REIMBURSEMENT OF RENT WHICH IN FACT IS NOT SO AND AS SUCH THE ADD ITION UPHELD IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE IS A FRANCHISEE OF M/S LEVI STRAUSS INDIA (P) LTD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEBI TED AN AMOUNT OF RS.29,15,508/- ON ACCOUNT OF TOTAL REN T PAID, WHICH INCLUDED RENT IN RESPECT OF SCF-83, 1 ST TO 3 RD FLOOR, PHASE-7, MOHALI, AS PER THE LEASE AGREEMENT 2 WITH THE LANDLORD, THE ASSESSEE WAS TO PAY RENT OF THIS PROPERTY @ RS.2,40,000/- PER MONTH. AS PER THE BALANCE SHEET AS ON 31.03.2009, THERE WAS AN OUTSTANDING BALANCE OF RS.51,08,965/- IN THE ACCOUN T OF M/S LEVI STRAUSS INDIA (P) LTD. IN THE BOOKS OF THE ASSESSEE FIRM. THE ASSESSING OFFICER CALLED FOR INFORMATION U/S 133(6) FROM M/S LEVI STRAUSS INDIA (P) LTD. AND AS PER THE INFORMATION RECEIVED, THE OUTSTANDING BALANCE WAS OF RS.32,09,390/- ONLY. ON ANALYSIS OF THE CONFIRMATION, THE ASSESSING OFFICER NOTICED THAT M/S LEVI STRAUSS INDIA (P) LTD. HAD ISSUED CREDIT NOTE FOR RS.8,81,000/- ON 09.09.2008 AND OF RS.8,91,872/- ON 16.01.2009 ON ACCOUNT OF RENT REIMBURSEMENT FOR THE IMPUGNED PROPERTY TO THE ASSESSEE FIRM. THUS, AS PER THE AO, TOTAL AMOUNT O F RENT OF RS.17,72, 872/- (8,81,000 + 8,91,872) WAS REIMBURSED BY M/S LEVI STRAUSS INDIA (P) LTD. DURIN G THIS YEAR, WHICH SHOULD HAVE BEEN DEDUCTED BY THE ASSESSEE OUT OF THE RENT EXPENSES CLAIMED BY IT. WH EN THE ASSESSING OFFICER QUESTIONED THE ASSESSEE ABOUT THE ISSUE, IT WAS SUBMITTED THAT THERE WAS DISPUTE BETWEEN THE ASSESSEE AND M/S LEVI STRAUSS INDIA (P) LTD. REGARDING THE REIMBURSEMENT OF RENT DUE TO LOW ER SALES FIGURES AND WHEN THE ASSESSEE HAD NOT MADE TH E PAYMENT AT THE TIME OF CLOSING THE BUSINESS WITH TH E COMPANY, THE COMPANY CREDITED THE RENT REIMBURSEMENT TO CLOSE THE ACCOUNT AT 'NIL' FIGURE. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE 3 EXPLANATION OF THE ASSESSEE AND DISALLOWED THE AMOUNT OF RS.17,72,872/- OUT OF THE RENT CLAIMED. 4. BEFORE THE LD.CIT(APPEALS) THE ASSESSEE CONTENDED THAT THE ALLEGED CREDIT NOTES WHICH HAD BEEN ISSUED AND ACCOUNTED FOR BY M/S LEVI STRAUSS INDIA (P) LTD. ON ACCOUNT OF REIMBURSEMENT OF RENT HAD NOT BEEN RECEIVED BY THE ASSESSEE DURING THE YE AR BUT ONLY IN THE SUBSEQUENT YEAR, THAT TOO IN THE MONTH OF JULY, 2009. IT WAS SUBMITTED THAT M/S LEV I STRAUSS INDIA (P) LTD. WAS NOT REGULAR IN GIVING CR EDIT NOTES OR FOR THAT MATTER EVEN INFORMING THE ASSESSE E AND WHICH IS EVIDENT FROM THE FACT THAT EVEN THE CR EDIT NOTES IN THE MONTH OF JULY, 2008 WAS GIVEN IN NOVEMBER, 2009. THE LD. COUNSEL FOR ASSESSEE FURTH ER SUBMITTED THAT IT HAD ACCOUNTED FOR ALL THE CREDIT NOTES INCLUDING THE ONE WHICH PERTAINED TO THE IMPUGNED YEARS RENT IN THE NEXT FINANCIAL YEAR. COPIES OF ACCOUNTS WERE PLACED BEFORE THE LD.CIT(APPEALS). THE LD.CIT(A), HOWEVER, REJECTED T HE CONTENTION OF THE ASSESSEE BY REFUSING TO ADMIT THE ADDITIONAL EVIDENCE FILED IN THE FORM OF COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF LEVI STRAUS S AND IN ANY CASE HELD THAT THE SAME WAS UNRELIABLE SINCE IT WAS UNAUTHENTICATED. THE LD.CIT(APPEALS), THEREFORE, HELD THAT THE ASSESSEES EXPLANATION THA T THE CREDIT NOTES GIVEN IN THE NEXT YEAR WAS NOT ACCEPTABLE SINCE IT WAS NOT SUPPORTED BY ANY 4 EVIDENCE. THE FINDINGS OF THE LD.CIT(APPEALS) AT P ARA 3.3 TO 3.3.2 ARE AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL. THE APPELLANT HAS FILED A COPY OF STATEMENT OF M/S LEV I STRAUSS INDIA (P) LTD. IN THE APPELLATE PROCEEDINGS, WHICH IS NOT SIGNED BY ANYONE ON BEHALF OF THE COMPANY AND SO THE SAME CANNOT BE TAKEN AS AN AUTHENTIC STATEMENT. MOREOVER, NO REASO N HAS BEEN GIVEN FOR NOT FILING THIS STATEMENT BEFORE THE ASSE SSING OFFICER AND SO IT CANNOT BE ADMITTED UNDER RULE 46A OF THE INCO ME TAX RULES, 1962 (HEREINAFTER REFERRED TO AS 'RULES'). 3.3.1 AS PER THE CONFIRMATION RECEIVED BY THE ASSES SING OFFICER, M/S LEVI STRAUSS INDIA (P) LTD. HAD ISSUED CREDIT NOTE FOR RS.8,81,000/- ON 09.09.2008 AND RS. 8,91,872/- ON 16.01.2009 O N ACCOUNT OF RENT REIMBURSEMENT FOR MOHALI STORE TO THE APPELLANT FI RM. THUS, THE TOTAL AMOUNT OF RS.17,72,872/- (8,81,000 + 8,91,872) WAS REIMBUR SED BY M/S LEVI STRAUSS INDIA (P) LTD, WHICH HAS NOT BEEN REDUCED B Y THE APPELLANT OUT OF THE RENT CLAIMED IN THE PROFIT AND LOSS ACCO UNTS. THE EXPLANATION NOW IS THAT THE CREDIT FOR RENT REIMBURSEMENT WAS G IVEN ON JULY, 2009 AND NOVEMBER, 2009, WHICH IS NOT SUPPORTED BY ANY 'EVIDENCE, SINCE STATEMENT OF M/S LEVI STRAUSS INDIA (P) LTD- FILED BY THE APPELLANT IS NOT SIGNED BY WHEREAS THE CONFIRMATI ON RECEIVED BY THE ASSESSING OFFICER WAS DULY SIGNED BY AN AUTHORI ZED REPRESENTATIVE OF M/S LEVI STRAUSS INDIA (P) LTD. 3.3.2 THE APPELLANT HAS ALSO ARGUED THAT IT HAS ACC OUNTED FOR ALL THE ENTRIES OF RENT REIMBURSEMENT AND THE DIFFE RENCE OF LAST FINANCIAL YEAR IN THE NEXT FINANCIAL YEAR IS, IN FA CT, NOT CORRECT, SINCE THE RETURN OF INCOME OF THE NEXT YEAR I.E. A.Y. 201 0-11 IS OF RS.2,48,900/- ONLY WHICH INCLUDES 'INCOME FROM OTHE R SOURCES' OF RS.1,15,772/-, FROM WHICH IT IS EVIDENT THAT THE RE IMBURSEMENT OF RS.17,72,872/- HAD NOT BEEN ACCOUNTED FOR IN THE NE XT YEAR ALSO. HENCE, THE AMOUNT OF RS.17,72,872/- RECEIVED AS REI MBURSEMENT OF RENT IS TO BE TAXED IN THIS YEAR AND THE ADDITIO N MADE ON THIS ACCOUNT IS CONFIRMED. GROUND OF APPEAL NO. 2 IS DIS MISSED. 5. BEFORE US THE LD. COUNSEL FOR ASSESSEE ARGUED T HAT SUFFICIENT CAUSE FOR NOT PRODUCING THE ADDITIONAL E VIDENCE HAD BEEN SHOWN TO THE CIT(A) AND DREW OUR ATTENTION TO THE WRITTEN SUBMISSIONS FILED TO THE CIT(A) AND REPRODU CED AT PAGE 2 OF THE ORDER STATING THAT BUSINESS WITH M/S LEVI STRAUSS HAD BEEN FAILING DUE TO VERY LOW SALES AND THE ASSESSEE HAD BEEN REQUESTING FOR REIMBURSEMENT OF EXPENSES IN VIEW OF ITS LOSSES AND BECAUSE OF BUSI NESS DIFFERENCES THE COMPANY HAD NOT BEEN PROVIDING STA TEMENTS OF SUBSEQUENT YEARS. THE RELEVANT EXTRACT OF THE SU BMISSION OF THE ASSESSEE IS REPRODUCED AS UNDER: 5 THE ASSESSEE HAD STARTED THE BUSINESS WITH THIS CO MPANY DURING THE FINANCIAL YEAR AND HAD CLOSED THE BUSINESS IN THE N EXT FINANCIAL YEAR. THE ASSESSEE HAD DONE THE BUSINESS WITH THE COMPANY FOR APPROXIMATELY ONE AND HALF YEAR. THE SALES OF THE COMPANY WERE LE SS THAN EXPECTED SALES FROM THE START OF THE BUSINESS AND THE ASSESS EE WAS SUFFERING LOSS TILL THE BUSINESS IS CLOSED. THE ASSESSEE HAD BEEN REQUESTING THE COMPANY FOR SOME REIMBURSEMENTS/COMPENSATIONS. THE COMPANY HAD NOT PROVIDED US THE STATEMENT OF SUBSEQUENT YEAR BE CAUSE OF CERTAIN BUSINESS DIFFERENCES NOR THE INCOME TAX OFFICES HA D CALLED FOR THAT STATEMENT. THE ASSESSEE CAME TO KNOW THE SAID DIFFE RENCE WHEN THE ASSESSES HAD RECEIVED ACCOUNT STATEMENT FROM THE IN COME TAX OFFICER. THERE WAS NO DIFFERENCE AS FAR AS THE PURCHASES AND PAYMENTS ARE CONCERNED AND THE DIFFERENCE IS ALL DUE TO CREDIT N OTES WHICH HAVE NEVER BEEN ISSUED IN THE PAPER FORMAT. THE COMPANY WAS NOT REGULAR IN GIVING THE CREDIT NO TES OF THE BUSINESS AND EVEN OF THE RENT RE-IMBURSEMENTS. THE CREDIT OF RENT RE-IMBURSEMENT FOR THE MONTH OF JANUARY TO MARCH,2009 WAS GIVEN IN THE MONTH OF JULY,2009. ANOTHER CREDIT NOTE OF RENT FOR PART OF THE MONTH OF JULY, 2008 WAS GIVEN IN NOVEMBER, 2009. WHEN THE COMPANY WAS N OT REGULAR AND EVEN NOT INFORMING THE ASSESSEE , HOW THE ASSESSEE COULD MAKE THE CREDIT ENTRIES. AFTER PERSUATION, NOW THE ASSES SEE HAS RECEIVED THE NEXT YEAR ACCOUNT STATEMENT OF THE COMPANY. THE STA TEMENT OF ACCOUNT IS ATTACHED WITH THE REPLY WHICH MAY PLEASE BE ADMI TTED AS ADDITIONAL EVIDENCE UNDER RULE 46(A) OF THE INCOME TAX RULES, 1962. THE COPY OF ACCOUNT OF THE ASSESSEE FOR THE NEXT YEAR FINANCIAL YEAR IS ALSO ATTACHED WITH THIS REPLY. IN THE NEXT FINANCIAL YEAR, THE ASSESSEE HAD ACCOUN TED FOR ALL THE ENTRIES OF RENT RE-IMBURSEMENT AND THE DIFFERENCE O F LAST FINANCIAL YEAR AMOUNTING TO RS.16,80,000/- (RS.2,40,000/-FOR SIX M ONTHS). THE BUSINESS WAS STARTED IN ONE FINANCIAL AND CLOSED IN THE NEXT FINANCIAL YEAR AND BOTH THE PARTIES HAVE NO CREDIT OR DEBIT B ALANCE BY THE END OF FINANCIAL NEAR 2009-10. 6. LD.COUNSEL FOR THE ASSESSEE THEREFORE STATED THE ADDITIONAL EVIDENCES OUGHT TO BE ADMITTED BY THE CI T(A). THE LD.COUNSEL FURTHER CONTENDED THAT THE EVIDENCE S FILED BY IT CATEGORICALLY PROVE THAT THE IMPUGNED CREDIT NOTES HAD BEEN ACCOUNTED FOR BOTH BY THE ASSESSEE AND THE COM PANY IN THE SUCCEEDING YEAR ONLY AND THEREFORE NO DISALL OWANCE ON ACCOUNT OF THE SAME COULD BE MADE IN THE IMPUGNE D YEAR. 7. OUR ATTENTION WAS DRAWN TO THE FOLLOWING DOCUMENTS IN SUPPORT OF ITS ABOVE CONTENTION: 6 1) LEDGER ACCOUNT OF M/S LEVI STRAUSS INDIA (P) LTD. IN THE BOOKS OF THE ASSESSEE IN THE SUCCEEDING YEAR, I.E. FROM 1.4.2010 TO 31.3.2011, PLACED IN TH E PAPER BOOK PAGE NOS.26 TO 33. IT WAS POINTED OUT THEREFROM THAT ON RECEIPT OF CREDIT NOTES OF RS.16,92,000/- FOR REIMBURSEMENT OF RENT FROM M/S LEVI STRAUSS DUE ENTRIES HAD BEEN PASSED ON 08.09.2009 2) LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S LEVI STRAUSS INDIA (P) LTD. FROM 1.4.2009 TO 31.3.2011 PLACED AT PAPER BOOK PAGE NOS.34 TO 45 POINTING OUT THEREFROM THAT EVEN AS PER THE BOOKS O F ACCOUNTS MAINTAINED BY M/S LEVI STRAUSS THE CREDIT NOTE FOR RENT REIMBURSEMENT OF RS. 16,92,000/-, AS POINTED OUT ABOVE, AND PERTAINING TO THE RENT FOR JANUARY TO JUNE, 2009 WAS ISSUED ONLY ON 18.07.2009. 8. LD.COUNSEL FOR THE ASSESSEE STATED THAT IT IS VE RY MUCH EVIDENT FROM THE ABOVE THAT THE CREDIT NOTES WERE I SSUED BY THE COMPANY ONLY IN THE NEXT YEAR AND WAS ALSO THER EFORE ACCOUNTED FOR BY THE ASSESSEE IN THE NEXT YEAR. THE LD. COUNSEL FOR ASSESSEE PLEADED THAT IN VIEW OF THE SA ME NO ADDITION IN THE IMPUGNED YEAR WAS WARRANTED. 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE LOWER AUTHORITIES AND STATED THAT THE ADDITI ONAL EVIDENCES HAD BEEN RIGHTLY REJECTED TO BE ADMITTED BY THE CIT(A) AND FURTHER IN THE ABSENCE OF SUITABLE EVIDE NCE REGARDING ASSESSEES CONTENTION THAT THE CREDIT NOT ES WERE RECEIVED IN THE NEXT YEAR ONLY, THE LD.CIT(APPEALS) HAD RIGHTLY HELD THAT THE SAME SHOULD BE ACCOUNTED FOR AND TAKEN INTO CONSIDERATION IN THE FINANCIAL RESULTS O F THE IMPUGNED YEAR ONLY SINCE THEY RELATED TO THE SAID Y EAR. 10. WE HAVE HEARD BOTH THE PARTIES. THE FACT THAT CREDIT NOTES ON ACCOUNT OF REIMBURSEMENT OF RENT GIVEN BY M/S LEVI STRAUSS TO THE ASSESSEE RELATED TO THE IMPUGNE D YEAR 7 IS NOT DISPUTED. THE ONLY DISPUTE IS VIS-A-VIS THE YEAR IN WHICH THE SAME IS TO BE ACCOUNTED FOR. 11. ON GOING THROUGH THE CONTENTIONS OF BOTH THE PARTIES, WE FIND THAT THE ASSESSEE HAS ATTEMPTED TO PROVE ITS CLAIM THAT THE SAID CREDIT NOTES WERE ISS UED IN THE SUCCEEDING YEAR ONLY, BY WAY OF FILING COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S LEVI STRAUSS INDIA (P) LTD. FOR THE SUCCEEDING YEAR REFLECTING THE ENTRY RELATING TO THE IMPUGNED CREDI T NOTES IN THE NEXT YEAR .WE ALSO FIND THAT THE ASSE SSEE HAD DEMONSTRATED REASONABLE CAUSE FOR NOT PRODUCING THE SAME BEFORE THE AO IN VIEW OF THE BUSINESS DIFFERENCES WITH THE COMPANY DUE TO FAILING BUSINES S WITH IT. THE LD.DR HAS NOT CONTROVERTED THE FACTS O F PREVAILING BUSINESS CIRCUMSTANCES OF THE ASSESSEE A ND WE FIND THAT THE SAME IS FURTHER CORROBORATED WITH THE FINDINGS OF THE CIT(A) THAT THE ASSESSEE HAD REFLEC TED NO BUSINESS INCOME IN THE SUCCEEDING YEAR. THEREFOR E WE HOLD THAT THE CIT(A) HAD WRONGLY REJECTED THE ADMISSION OF THE ADDITIONAL EVIDENCES. FURTHER WE F IND THAT THE ASSESSEE HAD SHOWN THAT THE SAID CREDIT NOTES WERE ACCOUNTED FOR IN ITS BOOKS IN THE SUCCEEDING YEAR BY WAY OF FILING COPY OF LEDGER ACCOUNT OF M/S LEVI STRAUSS INDIA (P) LTD. IN ITS B OOKS IN THE SUCCEEDING YEAR REFLECTING THE SAID ENTRY. 12. IN VIEW OF THE ABOVE EVIDENCES WE CANNOT AGREE WITH THE LD.CIT(A) THAT THE ASSESSEE HAS NOT BEEN A BLE 8 TO SUBSTANTIATE ITS CONTENTION. THE REVENUE HAS CONTENTED THAT THE STATEMENT OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S LEVI STRAUSS INDIA (P) LTD. WAS NOT DULY AUTHENTICATED AND THEREFORE SHOUL D NOT BE TAKEN INTO CONSIDERATION, BUT AT THE SAME TI ME WE FIND THAT THE ASSESSEE HAD ALSO FILED COPY OF ACCOUNT OF M/S LEVI STRAUSS INDIA (P) LTD. IN ITS B OOKS OF ACCOUNT ALSO, WHICH WE FIND HAS NOT BEEN CONSIDERED BY THE LD.CIT (APPEALS).THE LD.CIT(APPEALS) SIMPLY REJECTED ASSESSEES CONTENTI ON OF HAVING REFLECTED THE RENT REIMBURSEMENT IN ITS BOOKS IN THE SUCCEEDING YEAR ON THE BASIS OF THAT I T HAD FILED RETURN OF INCOME SHOWING VERY LOW INCOME WHICH COULD NOT THEREFORE HAVE POSSIBLY INCLUDED TH E REIMBURSEMENT OF RENT. CLEARLY, THE LD.CIT(APPEALS ) HAS NOT EXAMINED THE FACTS OF THE CASE PROPERLY. IN OUR CONSIDERED OPINION, THE LD.CIT(APPEALS) SHOULD HAVE EXAMINED THE ACCOUNTS OF M/S LEVI STRAUSS INDI A (P) LTD. IN THE BOOKS OF ASSESSEE IN THE SUCCEEDING YEAR WHEREIN THE ASSESSEE HAD CLAIMED THAT IT HAD ACCOUNTED FOR THE CREDIT NOTES. FURTHER AN OPPORTUN ITY SHOULD HAVE BEEN GIVEN TO THE ASSESSEE TO EXPLAIN T HE AUTHENTICITY OF THE STATEMENT OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S LEVI STRAUSS INDIA (P) LTD. WHICH WE FIND HAS NOT BEEN GIVEN BY THE LD.CIT(APPEALS) AND WITHOUT GIVING SUCH OPPORTUNITY HE HAS SIMPLY REJECTED THE IMPUGNED EVIDENCE FILED BY THE ASSESSEE. WE, THEREFORE, ARE OF THE VIEW THAT THE 9 ADDITION ON THE IMPUGNED ISSUE HAS BEEN MADE WITHOUT PROPERLY EXAMINING THE FACTS OF THE CASE. IN THE INTEREST OF JUSTICE, WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER BACK TO THE CIT(APPEALS) TO EXAMINE THE ISSUE AFRESH AND READJUDICATE THEREAFTE R IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 13. GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. 14. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER: 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.2,30,000/-MAD E FOR ALLEGED UNEXPLAINED EXPENDITURE AND ALSO TO BE IN VIOLATION OF SECTION 40A(3) OF THE ACT WHICH IS ILLEGAL, ARBITRARY AND U NJUSTIFIED. 15. BRIEF FACTS RELATING TO THE ISSUE ARE THAT AS PER THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2009, AN AMOUNT OF RS.2,30,000/- WAS OUTSTANDING IN THE NAME OF M/S CMYK PRINT SOLUTIONS, NEW DELHI'. THE ASSESSING OFFICER CALLED FOR INFORMATION U/S 133(6) OF INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS 'ACT) AND FOUND THAT A BILL AMOUNTIN G TO RS.2,95,810/- WAS RAISED BY M/S CMYK PRINT SOLUTION S AND AGAINST THIS BILL, THE ASSESSEE HAD MADE FOLLOWING PAYMENTS AS PER THE STATEMENT RECEIVED FROM M/S CMYK PRINT SOLUTIONS: S.NO. DATE AMOUNT (IN RS.) MODE OF PAYMENT 1. 03.06.2008 50,000/- CASH 2. 17.07.2008 90,000/- CASH 3. 24.07.2008 90,000/- CASH 10 4. 28.07.2008 65,000/- BY THE CHEQUE 5. 31.03.2009 810/- TRADE DISCOUNT W/OFF TOTAL 2,95,810/0- 16. THE ASSESSING OFFICER QUESTIONED THE APPELLANT ABOUT THE DIFFERENCE IN BALANCE AND THE ASSESSEE HAD FILE D A REPLY, WHICH IS AS UNDER: THE ASSESSEE HAD PURCHASED FITTING AND FIXTURES FO R THE CONSIDERATION OF RS.2,95,810 OF FROM THE SAID PARTY ON 03.06.2008 . THE ASSESSEE HAD MADE THE PAYMENT OF RS.65,000/- THROUGH CHEQUE NO. 047431. THE ASSESSEE HAD SHOWN THE OUTSTANDING BALANCE OF RS.2, 30,810/- IN THE BALANCE SHEET. THE ASSESSEE WAS NOT HAVING CASH IN THE SAID FIRM SO MRS. CHANDER SUSHIL, THE MOTHER OF MR. RAMANJEET SI NGH CHAWLA HAD GIFTED RS.1,90,000/- AFTER WITHDRAWING AMOUNT FROM HER SAVING BANK ACCOUNT NO. 3177 TO MR. RAMANJEET SINGH CHAWLA, PAR TER OF THE SAID FIRM FOR THE URGENT PAYMENT OF CMYK. THE PARTNER OF THE FIRM MR. RAMANJEET SINGH CHAWLA HAD DEPOSITED RS.50,000/- ON 03.06.2008, RS.90,000/- ON 17.07.2008 AND RS.90,000/-ON 24.07.2 008. THE SAID AMOUNTS WERE DEPOSITED DIRECTLY IN THE BANK AC COUNT OF CMYK AT CHANDIGARH. THE ACCOUNTANT OF FIRM WAS NOT IN KN OWLEDGE OF THESE PAYMENTS. THE ACCOUNT OF CMYK WAS SUPPOSED TO CLEAR AND THE ADDITION OF RS.2,30,000/- IN THE CAPITAL ACCOUNT OF RAMANJEE T SINGH CHAWLA AS GIFT FROM MOTHER AND PERSONS CONTRIBUTION OF RS.40, 000/- SHOULD HAVE BEEN MADE. THE ASSESSEE IS NOT REGULARLY IN BUSINES S WITH M/S CMYK, IT WAS NEW PARTY FOR THE ASSESSEE AND VICEVER SA, MORE OVER THE ASSESSEE HAS NOT MADE CASH PAYMENTS DIRECTLY TO THE PARTY RATHER HAD DEPOSITED THE SAID AMOUNT IN THIS BANK ACCOUNT. CON SIDERING THE FACTS AND CIRCUMSTANCES, THE ASSESSEE HAS NOT VIOLATED TH E PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961. 17. THE ASSESSING OFFICER WAS NOT SATISFIED WITH TH E EXPLANATION AND MADE THE ADDITION OF RS.2,30,000/- WITH THE FOLLOWING OBSERVATIONS: THE REPLY FURNISHED BY THE ASSESSEE HAS BEEN CONSI DERATION AND FOUND TO BE NOT TENABLE. THE CLAIM .OF THE ASSESSEE THAT THE PARTNER OF THE FIRM SH. RAMANJEET SINGH CHAWLA HAS RECEIVED GIFT F ROM THE MOTHER IS AN AFTERTHOUGHT STORY. THIS FACT IS FURTH ER PROVED THAT AS PER CAPITAL ACCOUNT OF SH. RAMANJEET SINGH CHAWLA, THER E IS NO ADDITION IN HIS CAPITAL ACCOUNT. OTHERWISE ALSO NO EVIDENCE WAS PRODUCED DURING THE ASSESSMENT PROCEEDING, OR CLAIMED THAT THERE WA S ANY REQUEST FROM THE PARTY FOR CASH PAYMENT. MOREOVER, THE ASSESSEE HAS ADMITTED THE FACT THAT THE CASH HAS BEEN DEPOSITED IN THE ACCOUN T OF THE PARTY AND THIS IS VIOLATION OF SECTION 40A(3) OF THE INCOME T AX ACT, 1961 ALSO. THE ASSESSEE HAS MADE THIS PAYMENT OUTSIDE THE BOOKS OF ACCOUNTS THUS, NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT, THERE FORE, ADDITION OF RS.2,30,000/- IS MADE ON ACCOUNT OF UNEXPLAINED EXP ENDITURE OUTSIDE THE BOOKS OF ACCOUNT. 18. BEFORE THE LD.CIT(APPEALS) THE ASSESSEE REITERA TED CONTENTION MADE BEFORE THE ASSESSING OFFICER, AFTER CONSIDERING WHICH THE LD.CIT(APPEALS) UPHELD THE AD DITION 11 MADE BY THE ASSESSING OFFICER DISMISSING THE CONTEN TION RAISED BY THE ASSESSEE HOLDING AT PARA 4.3 OF HIS O RDER AS UNDER: 4.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL. THE MAIN DISPUTE IS ABOUT THE DIFFERENCE IN BALANCE OF RS.2,30,000/-, WHICH CMYK PRINT SOLUTIONS HAD TAKEN INTO ACCOUNT AND THE APPELLANT HAD NOT. THE EXPLANATION OF THE APPELLANT IS THAT THE MOTHER OF THE PARTNER HAD GIFTED RS.1,90,000/- AFTER WITHDRAWING FROM HER BANK ACCOUNT AND THE PARTNER HAD CONTRIBUTED RS. 40,000/ -, BUT THERE IS NO ADDITION IN THE CAPITAL ACCOUNT OF THE PARTNER O F THE FIRM AND SO THE EXPLANATION OF THE APPELLANT IN THIS REGARD IS NOT ACCEPTABLE. IT IS EXPLICITLY CLEAR THAT THE PAYMENT OF RS.2,30,000 /- HAS BEEN MADE OUTSIDE THE BOOKS OF ACCOUNTS AND SO IT HAS TO BE T REATED AS UNEXPLAINED EXPENDITURE. EVEN OTHERWISE THE PAYMENT IS COVERED U/S 40A(3) OF THE ACT. HENCE, THE DISALLOWANCE MADE ON THIS ACCOUNT OF RS.2,30 ,000/- IS UPHELD. GROUND OF APPEAL NO. 3 IS DISMISSED. 19. BEFORE US, THE LD. COUNSEL FOR ASSESSEE REITERA TED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES, WHIL E THE LD. DR RELIED UPON THE ORDER OF THE LD.CIT(APPEALS) . 20. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES. WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(APPEAL S). THE ISSUE PERTAINS TO THE DIFFERENCE IN THE ACCOUNT OF ONE M/S CMYK PRINT SOLUTIONS, NEW DELHI WHICH WAS SHOWN TO HAVE BEEN OUTSTANDING AT RS.2,30,000/- BY THE ASSESSEE A S AT THE END OF THE YEAR, WHILE THE PARTY SHOWED NO BALANCE OUTSTANDING AND IN FACT, REFLECTED PAYMENT IN CASH OF THE SAID AMOUNT BY THE ASSESSEE. THE EXPLANATION OF TH E ASSESSEE THAT THE CASH WAS PAID BY THE MOTHER OF TH E PARTNER AFTER WITHDRAWING FROM HER BANK ACCOUNT AND BY THE PARTNER, HAS NOT BEEN SUBSTANTIATED BY THE ASSESSEE AND THE SAME ALSO IS NOT REFLECTED IN THE CAPITAL ACCOU NTS OF THE PARTNER. THEREFORE, WE CONCUR WITH THE FINDINGS OF THE LD.CIT(APPEALS) THAT THE PAYMENT OF RS.2,30,000/- M ADE BY THE ASSESSEE HAS REMAINED UNEXPLAINED AND FURTHER W E ALSO 12 AGREE WITH THE LD.CIT(APPEALS) THAT EVEN IF THE EXP LANATION OF THE ASSESSEE IS ACCEPTED THE PAYMENT HAVING BEEN MADE IN CASH, THE SAME WAS COVERED U/S 40A(3) OF THE ACT WARRANTING DISALLOWANCE OF THE SAME. WE, THEREFORE , UPHOLD THE ORDER OF THE LD.CIT(APPEALS) CONFIRMING THE ADD ITION OF RS.2,30,000/- MADE TO THE INCOME OF THE ASSESSEE. GROUND NO.2 RAISED BY THE ASSESSEE IS, THEREFORE, DISMISSE D. 21. GROUND NOS.3 AND 4 RAISED BY THE ASSESSEE READ AS UNDER: 3. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS ) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITIO N OF RS.2,38,328/- DISALLOWING THE ADVERTISEMENT EXPENSE S FOR ALLEGED VIOLATION OF PROVISIONS OF SECTION 40(A)(IA) WHICH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 4. THAT IN ANY CASE, THE PROVISION OF SECTION 40(A) (IA) IS ATTRACTED ONLY IN CASE OF AMOUNTS PAYABLE AND NOT FOR AMOUNTS WHIC H HAVE ALREADY BEEN PAID DURING THE YEAR. 22. THE ASSESSEE IN THE AFORESAID GROUNDS HAS CHALL ENGED THE DISALLOWANCE OF ADVERTISEMENT EXPENSES AMOUNTIN G TO RS.2,38,328/- MADE U/S 40(A)(IA) OF THE ACT ON ACCO UNT OF NON DEDUCTION OF TAX AT SOURCE, WHICH WAS UPHELD BY THE LD.CIT(APPEALS) REJECTING ASSESSEES CONTENTION THA T SINCE THE SAID AMOUNT WAS NOT PAYABLE AT THE END OF THE Y EAR, NO DISALLOWANCE WAS WARRANTED IN VIEW OF THE DECISION OF THE SPECIAL BENCH OF THE I.T.A.T. IN THE CASE OF M/S ME RILYN SHIPPING & TRANSPORTS IN ITA NO.477/VIZ/2008. 23. BEFORE US, THE LD. COUNSEL FOR ASSESSEE FAIRLY ADMITTED THAT THE ISSUE WAS COVERED AGAINST IT BY THE DECISI ON OF THE HON'BLE APEX COURT IN THE CASE OF PALAMPUR GAS SERV ICE VS CIT IN CIVIL APPEAL NO. 5512 OF 2017 DATED 03.05.20 17 WHEREIN THE PROPOSITION THAT DISALLOWANCE U/S 40(A) (IA) 13 COULD BE MADE ONLY ON AMOUNTS WHICH STOOD PAYABLE A S AT THE END OF THE YEAR AND ON WHICH NO TAX WAS DEDUCTE D AT SOURCE AS LAID DOWN BY THE SPECIAL BENCH OF THE I.T .A.T. IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORTS (SUPR A), WAS HELD TO BE INCORRECT. 24. IN VIEW OF THE ABOVE, WE FIND NO REASON TO INTE RFERE IN THE ORDER OF THE LD.CIT(APPEALS) IN UPHOLDING THE A DDITION MADE U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF DISALLO WANCE OF ADVERTISEMENT EXPENSES OF RS.2,38,328/-. 25. GROUND NOS.3 AND 4 RAISED BY THE ASSESSEE ARE, THEREFORE, DISMISSED. 26. GROUND NOS.5, 6 AND 7 RAISED BY THE ASSESSEE RE LATE TO ADDITIONS MADE ON ACCOUNT OF DIFFERENCE IN ACCOUNTS OF CREDITORS AND BEING INTERRELATED, THE SAME ARE BEIN G DEALT TOGETHER. GROUND NOS.5, 6 AND 7 ARE AS UNDER: 5. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.69,841/- MADE ON AC COUNT OF ALLEGED DIFFERENCE IN ACCOUNT OF M/S JAIN AMAR CLOT HING (P) LIMITED TREATING THE SAME TO BE UNEXPLAINED CREDIT WHICH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 6. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.1,26,763/- MADE ON ACCOUNT OF ALLEGED DIFFERENCE IN ACCOUNT OF M/S LEVI STRAUSS ( P) LIMITED TREATING THE SAME TO BE UNEXPLAINED CREDIT WHICH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 7. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.1,55,171/- (THOUGH WRITTEN AS RS.27,097/-) MADE ON ACCOUNT OF ALLEGED DIFFERENCE IN ACCOUNT OF M/S UTSAV CLOTHING TREATING THE SAME TO BE UNEXPLAI NED CREDIT WHICH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 27. BRIEFLY STATED, DURING THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER CALLED FOR INFORMATION U/S 133(6) OF THE ACT FROM FIVE CREDITORS WITH WHOM THE ASSESSEE FIRM WAS 14 HAVING BUSINESS TRANSACTION AND NOTED DIFFERENCE IN THE BALANCE OF THESE PARTIES AS UNDER: SR. NAME OF THE PARTY CLOSING CLOSING DIFFERENCE NO. BALANCE AS ON BALANCE AS PER 31.03.2009 AS INFORMATION PER BOOKS OF RECEIVED FROM ACCOUNT (IN THE PARTY (IN RS.) RS.) 1 M/S JAIN AMAR CLOTHING 6,97,625/- 6,27,784/- 69.841/- (P) LTD. & 2. M/S JAIN AMAR HOSIERY 5,49,445/- 4,31,484/- 1,17,9 61/- FACTORY 3. M/S JAI SHREE TRADING 3,74,512/- 3,60,280/- 14.232/- CO. (P) LTD. 4. M/S MOHAN CLOTHING 51,08,965/- 32,09,390/- 17,72,812/-* CO. (P) LTD. 1,26,763/- 5. M/S LEVI STRAUSS INDIA 1,55,171/- 3,10.396/- 1,55,2257- (P) LTD., BANGALORE TOTAL 68,21,8767- 48,68 ,236/- 5,65,436/- *RS.17,72,812/- RENT PAID SEPARATELY CONSIDERED . HE MADE ADDITION OF RS.4,83,868/- WITH THE FOLLOWI NG OBSERVATIONS: 'THIS OFFICE VIDE LETTER NO.' 11379 DATED 11.11.201 1 CONFRONTED THE ABOVE DISCREPANCIES TO THE ASSESSEE. IN RESPONSE TO THIS, THE ASSESSEE HAS RECONCILED THE ACCOUNTS OF ABOVE SAID PARTIES AND FOUND THAT M/S JAIN AMAR CLOTHING (P) LTD. HAS DIFF ERENCE OF CREDIT BALANCE OF RS. 69,841 /- INSTEAD OF RS.2,04,835/- A S POINTED OUT TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS IN TH E SHOW CAUSE NOTICE DATED 11.11.2011. AS REGARDS DIFFERENC E OF RS.1,55,171/-, IN THE CASE OFM/S.UTSAV CLOTHING, TH E ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT AND VOUCHERS FOR VERIFICATION FOR THE F.Y. 2009-10. THEREFORE REPLY FURNISHED ON THE ISSUE IS NOT TENABLE AND ADDITION OF RS.1,55,171/- IS ALSO MADE IN THE ABSENCE OF PROPER EVIDENCE. NO REPLY TO THE DIFFERENCE OF ON A CCOUNT OF PURCHASE OF MATERIAL FROM M/S LEVI STRAUSS INDIA (P) LTD., B ANGALORE IS FURNISHED. REPLY REGARDING REIMBURSEMENT OF RENT AM OUNTING TO RS.17,72,812/- HAS ONLY BEEN FURNISHED. HENCE DIFFE RENCE IN \THE ACCOUNT STATEMENT AMOUNTING TO RS.1,26,763/- I S ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE. THE ASSESSE E HAS ADMITTED 15 THE DIFFERENCE IN THE ACCOUNT OF M/S JAI SHREE TRAD ING CO. (P) LTD. THUS ADDITION OF RS.1,17,961/- IS MADE. NO EVIDENCE REGARDING PREVIOUS YEAR CLOSING BALANCE ALONGWITH VOUCHERS IS PRODUCED TO SUPPORT THEIR CLAIM, HENCE THE DIFFERENCE OF RS.14,232/- IS ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE FIRM. THUS THE TOTAL ADDITIO N ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS COMES TO RS.4,83,968/- .' 28. DURING APPELLATE PROCEEDINGS THE ASSESSEE MADE DETAILED SUBMISSIONS REPRODUCED IN PARA 6.2 OF THE ORDER, AFTER CONSIDERING WHICH THE LD.CIT(APPEALS) UPHELD THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN THE ACCOU NTS OF THE FOLLOWING: M/S JAIN AMAR CLOTHING PVT. LTD. RS. 69,841/- M/S UTSAV CLOTHING RS.1,55,171/- M/S LEVI STRAUSS RS. 1,26,763/- 29. AGGRIEVED BY THE SAME, THE PRESENT GROUNDS HAVE BEEN RAISED BEFORE US. 30. VIS--VIS THE ADDITION MADE ON ACCOUNT OF DIFFE RENCE IN THE ACCOUNT OF M/S JAIN AMAR CLOTHING PVT. LTD., TH E LD. COUNSEL FOR ASSESSEE REITERATED THE SUBMISSIONS MAD E BEFORE THE LD.CIT(APPEALS) VIDE HIS SUBMISSIONS MADE IN WR ITING BEFORE HIM AND REPRODUCED IN THE ORDER AT PARA 6.2 AS UNDER: THAT THE DIFFERENCE IN THE CREDIT BALANCES OF THE ACCOUNTS WITH M/S JAIN AMAR CLOTHING PVT. LTD. IS AMOUNTING TO RS. 69,841/ -, WITH M/S MOHAN CLOTHING COMPANY IS AMOUNTING TO RS.1,631/- AND WIT H M/S UTSAV CLOTHING IS AMOUNTING TO RS. 1,55,143/-. NOW THE ASSESSEE HA S CALLED FOR THE STATEMENT OF RELEVANT YEAR, A YEAR BEFORE AND YEAR AFTER THAT IS FINANCIAL YEAR 2007-08, 2008-09 AND 2009-10 TO RECO NCILE THE ACCOUNTS. 'THE STATEMENT OF ACCOUNTS AND OTHER RELE VANT DOCUMENTS ATTACHED WITH THIS REPLY WHICH MAY PLEASE BE ADMITT ED AS ADDITIONAL EVIDENCE UNDER RULE 46(A) OF THE INCOME TAX RULES, 1962. 16 31. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE FINDINGS OF THE LD.CIT(APPEALS) REPRODUCED AT PARA 6.3(A) OF HIS ORDER AS UNDER: REGARDING THE DIFFERENCE IN CREDIT .BALANCE OF THI S PARTY, THE APPELLANT HAS SUBMITTED THAT IT HAS CALLED FOR THE STATEMENT OF THIS PARTY FOR F.Y. 2007-08, 2008-09 AND 2009-10 TO RECO NCILE THE ACCOUNT AND THE SAME WERE ATTACHED WITH THE REPIY, WHICH SHOULD BE ADMITTED UNDER RULE 46A OF THE ACT, BUT NO SUCH STATEMENT HAS BEEN SUBMITTED WITH THE REPLY. HENCE, IT IS CONCLUD ED THAT THE APPELLANT DOES NOT HAVE ANY EXPLANATION REGARDING T HE DIFFERENCE IN BALANCE OF THIS PARTY OF RS. 69,841/-. 32. VIS--VIS THE ADDITION MADE ON ACCOUNT OF DIFFE RENCE IN THE ACCOUNT OF M/S UTSAV CLOTHING, THE LD. COUNSEL FOR ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE TH E LD.CIT(APPEALS) VIDE HIS SUBMISSIONS MADE IN WRITIN G BEFORE HIM AND REPRODUCED IN THE ORDER AT PARA 6.2 AS UNDE R: THAT THERE IS DIFFERENCE OF RS. 1,55,171 /- IN THE STATEMENT GIVEN BY THE ASSESSEE AND THE STATEMENT RECEIVED FROM THE M/ S UTSAV CLOTHING. THE OPENING BALANCE OF THE PARTIES IS THE SAME EXCEPT THAT THE DISCOUNT OF RS. 27,097/- RELATING TD EARLIER YE AR, THE CREDIT WAS GIVEN BY THE PARTY ON 01/04/2008. THE TEST OF DIFFE RENCE IS DUE TO CREDIT NOTES GIVEN BY THE PARTY DURING THE FINANCIA L YEAR, WHICH THE ASSESSEE HAS ACCOUNTED FOR IN THE MONTH OF APRIL NE XT FINANCIAL YEAR. THE COPIES OF ACCOUNTS OF THE ACCOUNTS OF THE ASSES SEE AND M/S UTSAV CLOTHING FOR THE FINANCIAL YEAR 2007-08, 2008-09 AN D 2009-10 ARE ATTACHED WITH THIS REPLY FOR THE CONFIRMATION OF FA CTS. 33. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD.CIT(APPEALS) REPRODUCED AT PARA 6.3(E) OF HIS ORDER AS UNDER: THE APPELLANT HAS EXPLAINED THAT THE CREDIT OF DIS COUNT OF RS.27,097/- PERTAINING TO EARLIER YEAR WAS GIVEN ON 01.04.2008 AND REST OF THE DIFFERENCE WAS DUE TO CREDIT NOTES GIVE N BY THE PARTY, WHICH WAS ACCOUNTED FOR IN THE MONTH OF APRIL OF NE XT FINANCIAL YEAR. THE APPELLANT HAS SUBMITTED COPIES OF ACCOUNTS OF M /S UTSAV CLOTHING FOR F.Y. 2007-08, 2008-09 AND 2009-10 AND HAS REQUE STED FOR ADMISSION OF THESE STATEMENTS AS ADDITIONAL EVIDENC E UNDER RULE 46A OF THE RULES. A PERUSAL OF THESE STATEMENTS REV EALS THAT THESE ARE NOT CERTIFIED BY ANYONE ON BEHALF OF M/S UTSAV CLOTHING AND SO THESE STATEMENTS CANNOT BE ACCEPTED TO BE CORRECT. MOREOVER, NO REASON HAS BEEN GIVEN FOR NOT FILING THESE DOCUMENT S BEFORE THE ASSESSING OFFICER AND SO THESE CANNOT BE ADMITTED U NDER RULE 46A OF THE RULES. THE ADDITION MADE OF RS. 27,097/- IS ACC ORDINGLY CONFIRMED. 17 34. WITH RESPECT TO THE DIFFERENCE IN THE ACCOUNTS OF M/S LEVI STRAUSS INDIA (P) LTD. AMOUNTING TO RS.1,26,76 3/-, NO EXPLANATION WAS OFFERED BY THE ASSESSEE. IN VIEW O F THE SAME THE ADDITION MADE IS UPHELD AND GROUND OF AP PEAL NO.6 RAISED BY THE ASSESSEE IS DISMISSED. 35. VIS--VIS THE ADDITION MADE ON ACCOUNT OF DIFFE RENCE IN THE ACCOUNT OF M/S JAIN AMAR CLOTHING (P) LTD. AND M/S UTSAV CLOTHING, WE FIND THAT THE ASSESSEE HAD OFFER ED EXPLANATION THAT THE DIFFERENCE WAS ON ACCOUNT OF C REDIT NOTES ISSUED BY THE PARTIES WHICH WAS ACCOUNTED FOR BY THE ASSESSEE IN SUBSEQUENT YEAR AND HAD SUBSTANTIATED T HE SAME WITH EVIDENCE FILED BEFORE THE LD.CIT(APPEALS) IN THE FORM OF COPIES OF ACCOUNTS OF THE SAID PARTIES PERT AINING TO SUBSEQUENT YEARS, WHO REFUSED TO ADMIT THE ADDITIO NAL EVIDENCE SINCE NO REASON WAS GIVEN FOR NOT FILING T HESE DOCUMENTS BEFORE THE ASSESSING OFFICER. THE LD. CO UNSEL FOR ASSESSEE SUBMITTED THAT THESE EVIDENCES GO TO T HE ROOT OF THE MATTER AND EXPLAIN THE REASON FOR THE DIFFER ENCE OCCURRING IN THE ACCOUNTS OF THE PARTIES AND, THERE FORE, IN THE INTEREST OF JUSTICE, THE SAME SHOULD BE ADMITTE D. WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. COU NSEL FOR ASSESSEE THAT THE EVIDENCES FILED BY THE ASSESSEE EXPLAIN THE REASON FOR DIFFERENCE IN THE ACCOUNTS OF THE SA ID PARTIES AND IN THE INTEREST OF JUSTICE WE ADMIT THE SAME A ND FURTHER RESTORE THE MATTER BACK TO THE CIT(APPEALS) TO ADJUDICATE THE SAME AFRESH IN THE LIGHT OF THE ADDI TIONAL EVIDENCES FILED BY THE ASSESSEE AND IN ACCORDANCE W ITH LAW. 18 THE GROUND OF APPEAL NOS.5 AND 7 RAISED BY THE ASSE SSEE, THEREFORE, STAND ALLOWED FOR STATISTICAL PURPOSES 36. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 22 ND JANUARY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH