M/s Jai Jawala Processors, Panipat V. ACIT, Panipat

ITA 2538/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53463 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 28-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: K C ANEJAAR
• Keywords: Unexplained cash credit; Depreciation; Income from undisclosed sources; Commercial expediency; Unabsorbed depreciation
• Section: 32; 68; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I BENC H BEFORE SHRI RAJPAL YADAV, JM & SHRI A.N. PAHUJA, A M ITA NO.2538/D/2011 ASSESSMENT YEAR: 2006-07 M/S. JAI JAWALA PROCESSORS: BARSAT ROAD: VILL. CHANDOLI, (PANIPAT).. VS. ACIT, PANIPAT CIRCLE, PANIPAT. [PAN:A ABFJ1820H ] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI K.C. ANEJA,,AR REVENUE BY SHRI A.K. MONGA, DR DATE OF HEARING 28-11-2011 DATE OF PRONOUNCEMENT 16-12-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 16 TH MAY, 2011 BY THE ASSESSEE AGAINST AN ORDER DATED 17 TH FEBRUARY, 2011 OF THE LD. CIT(A)- KARNAL, RAISES TH E FOLLOWING GROUNDS :- 1. THAT SALARIES ALLOWED TO PARTNERS HAVE WRONGLY B EEN DISALLOWED BY ` ` .2,02,000/- AND THE LEARNED CIT(A) ERRED IN CONFIRM ING THE SAME. 2. THAT THERE BEING LOSS NO DEPRECIATION WAS CLAIME D. THE AO HAS WRONGLY WORKED OUT DEPRECIATION. AND THE LEARNED CI T(A) ERRED IN CONFIRMING THE RECOMPUTATION OF INCOME. 3. THAT DEPRECIATION HAS NO RELEVANCY WITH CLAIM OF INTEREST ON CAPITAL OF PARTNERS AS SUCH WRONGLY REDUCED AND CONFIRMED FOR ` ` . 37,880/- 4. THAT INTEREST AT 12% AMOUNTING TO ` . 1,06,000/- ON INVESTMENT OF `. ` 8,84,000/- ON LAND FOR FLOATING NEW CONCERN IN THE NAME AND STYLE OF SWASTIKA ENTERPRISES HAS WRONGLY BEEN CHARGED AND T HE LD. CIT(A) ERRED IN CONFIRMING THE SAME. 5. THAT INVESTMENT IN THE NAME OF SWASTIKA ENTERPRI SES WAS MADE FOR BUSINESS BENEFIT NO INTEREST ON INVESTMENT OF ` ` . 8,84,000/- WAS CHARGED IN EARLIER YEAR AS SUCH INTEREST IS NOT CHA RGEABLE ITA NO. 2538/DEL/11 2 6. THAT ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED UNSECURED LOANS AND INTEREST PAID TO THEM AS BELOW HAVE WRONGLY AND ARB ITRARILY BEEN MADE : I) NANCY GARG ` 300000 + 1479 INTT. TOTAL: 301479/- II)SMT. SHAIFALI GARG ` 300000 + 1479 INTT. TOTAL: 301479/- III)SH. SANJU ` 105000 + 10126 INTT. TOTAL: 115126/- 7. THAT ALL THE CREDITORS ARE INCOME TAX ASSESSEE A ND THEIR NECESSARY PROOF OF ADVANCING LOANS TO THE ASSESSEE WERE SUBMI TTED AND EXPLAINED. THE AO WITHOUT ANY SUBSTANTIAL GROUND AD DED TO THE INCOME. AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE SAME. 8. THAT THE AO NEVER INSISTED TO PRODUCE THE CASH C REDITORS AND THUS ERRED IN ADDING TO TOTAL AMOUNT OF ` ` . 7,05,000/- PLUS INTEREST 13,084/- TOTAL ` : 7,18,084/-. 9. THAT THE ASSESSMENT AS MADE IS FACTUALLY WRONG AND LEGALLY BAD AND DESERVE TO BE QUASHED. 2. ADVERTING FIRST TO GROUND NOS. 1 TO 3 IN THE APP EAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING LOSS OF ` 7,48,650/- FILED ON 31 ST OCTOBER 2006 BY THE ASSESSEE, MANUFACTURING AND DEALING IN CORRUGATED BOXES, SHEET ROLL ETC., AFTER BEING PROCESSED ON 31.3.2007 U/S 143 ( 2) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ,ISSUED ON 15 TH OCTOBER, 2007. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO I N SHORT) NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION OF ` ` 2,52,000/- ON ACCOUNT OF SALARY TO PARTNERS WHILE DEPRECIATION ADMISSIBLE TO THE ASSESSEE WAS NOT DEB ITED TO THE PROFIT AND LOSS ACCOUNT. IN RESPONSE TO A SHOW CAUSE NOTICE DATED 6 .10.2008 ,ASKING THE ASSESSEE AS TO WHY DEDUCTION U/S 40(B) OF THE ACT BE NOT RE STRICTED TO AN AMOUNT OF ` ` 50,000/- ON ACCOUNT OF WORKING OF BOOK PROFIT AFTER ADJUSTME NT OF CURRENT YEAR DEPRECIATION AND BROUGHT FORWARD DEPRECIATION, THE ASSESSEE REPL IED THAT SALARY & REMUNERATION WAS DEDUCTED OUT OF PROFITS AND BROUGHT FORWARD LOS SES FROM PREVIOUS YEAR WERE ADJUSTED AGAINST THE INCOME OF THE CURRENT YEAR. HO WEVER , THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE SINCE BROUGHT FORWARD D EPRECIATION FORMED PART OF CURRENT YEAR DEPRECIATION IN TERMS OF PROVISIONS OF SECTION 32 OF THE ACT, RESULTING IN DISALLOWANCE OF ` ` 2,02,000/- ON ACCOUNT OF SALARY TO PARTNERS BESID E REDUCTION OF INTEREST PAID TO PARTNERS BY AN AMOUNT OF ` . 37,880/-. ITA NO. 2538/DEL/11 3 3. ON APPEAL LD. CIT(A) UPHELD THE FINDINGS OF THE AO IN THE FOLLOWING TERMS :- 2.04 THE ISSUE UNDER CONSIDERATION IS THAT THE APPELLANT FIRM CLAIMED SALARY TO THE PARTNERS ON BOOK PROFITS WITH OUT SETTING OFF THE CURRENT YEAR AND BROUGHT FORWARD DEPRECIATION. THE AO NOTED THAT BROUGHT FORWARD DEPRECIATION IS TO BE CONSIDERED AS CURRENT YEAR DE PRECIATION AND AFTER CONSIDERING THE BOTH I.E. CURRENT YEAR AND BROUGHT FORWARD DEPRECIATION, THERE IS LOSS AND HENCE SALARY TO THE PARTNERS IS TO BE R ESTRICTED TO RS. 50,000/-. THE COUNSEL OF THE APPELLANT REITERATED THE SUBMISSIONS MADE BEFORE THE AO THAT DEPRECIATION WAS NOT CLAIMED SINCE THERE IS SUBSTAN TIAL BROUGHT FORWARD LOSSES AND IT IS NOT MANDATORY TO CLAIM THE SAME IN VIEW OF THE DECISION OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S. BEC O ENGINEERING CO. LTD. VS. CIT (SUPRA). THE PLEA OF THE APPELLANT IS NOT T ENABLE IN VIEW OF THE AMENDMENT IN SECTION 32 OF THE ACT W.E.F. FROM A.Y. 2002-03 AS PER WHICH CLAIM OF DEPRECIATION IS MANDATORY. BOOK PROFIT H AS BEEN DEALT WITH IN PARA 5 OF LEGAL SUMMERY OF SECTION 40 ON PAGE 32-33 OF MAS HBRAS INCOME TAX ACT 2010 WHICH READS AS UNDER :- SUCH REMUNERATION DOES NOT EXCEED THE LIMITS SPECI FIED UNDER ITEMS (1) AND (2) OF SUB-CLAUSE (V). BOOK PROFIT IN THIS CONTEXT IS THE NET PROFIT AS PER THE PROFIT AND LOSS ACCOUNT OF THE FI RM, COMPUTED AFTER MAKING ADJUSTMENTS UNDER SECTIONS 28 TO 44D PLUS TH E AGGREGATE REMUNERATION PAID / PAYABLE TO ALL THE PARTNERS OF THE FIRM, IF SUCH AMOUNT HAS BEEN DEDUCTED WHILE COMPUTING SUCH NET P ROFIT [EXPLANATION 3 TO THE CLAUSE). IT SHOULD BE NOTED T HAT SECTIONS 28 TO 44D INCLUDES SECTION 32(2) ALSO RELATING TO CARRY FORWA RD AND SET-OFF OF UNABSORBED DEPRECIATION BUT DOES NOT INCLUDE SECTIO N 72 RELATING TO CARRY FORWARD BUT DOES NOT INCLUDE SECTION 72 RELAT ING TO CARRY FORWARD AND SET OFF OF BUSINESS LOSS. THUS, UNABSORBED DEPR ECIATION IS TO BE DEDUCTED IN COMPUTING BOOK PROFIT WHILE BROUGHT FOR WARD BUSINESS LOSS IS NOT DEDUCTED. (EMPHASIS SUPPLIED ) 2.05 IN VIEW OF THE FACTUAL AND LEGAL POSITION DISC USSED ABOVE, IT IS HELD THAT CURRENT YEAR AS WELL AS BROUGHT FORWARD DEPRECIATIO N IS TO BE CONSIDERED FOR WORKING OUT THE BOOK PROFIT FOR THE PURPOSE OF SALA RY TO THE PARTNERS. THE ACTION OF THE AO, IS AS SUCH, CORRECT AND HENCE, DI SALLOWANCE OUT OF SALARY MADE BY HIM IS, HEREBY, CONFIRMED. GROUND OF APPEAL NO. 1 & 2 ARE, AS SUCH, REJECTED. 3.1 AS REGARDS INTEREST , THE LD. CIT(A) DIRECTE D THE AO TO WORK OUT DISALLOWANCE OF INTEREST AFTER EXCLUDING DEPRECIATION ON CAR DISA LLOWED FOR PERSONAL USE WHILE UPHOLDING THE FINDINGS OF THE AO , REDUCING DEPREC IATION INCLUDING BROUGHT FORWARD DEPRECIATION FOR WORKING OUT BOOK PROFITS FOR THE PURPOSE. ITA NO. 2538/DEL/11 4 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A) . THE LD. AR ON BEHALF OF THE ASSESS EE WHILE CARRYING THROUGH THE IMPUGNED ORDER RELIED UPON THE DECISION OF ITAT, V ISAKHAPATNAM BENCH IN THE CASE OF SWARAJ ENTERPRISES VS. ITO 140 TTJ 360 WHEREIN IT WAS HELD THAT THERE IS NO COMPULSION FOR THE FIRM TO PROVIDE DEPRECIATION IN THE BOOKS OR TO FOLLOW ACCOUNTING STANDARD AND METHODS. ON THE OTHER HAND, THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT(A). 5.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION RELIED UPON. AT THE OUT SET , WE MAY POINT OUT THAT DECISION OF THE VISAKHAPATNAM BENCH RELATES TO THE AY 1999-2 000 I.E.PRIOR TO INSERTION OF EXPLANATION 5 TO SEC. 32(1) OF THE ACT,WHICH READS AS UNDER: EXPLANATION 5.-FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT THE PROVISIONS OF THIS SUB-SECTION SHALL APPLY WHETHER OR NOT THE ASS ESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF DEPRECIATION IN COMPUTING HIS TOTAL I NCOME; IN VIEW OF THE AFORESAID EXPLANATION, RELIANCE BY THE LD. AR ON THE AFORESAID DECISION IN SWARAJ ENTERPRISES(SUPRA) IS TOTALLY MISPLACED, ALLOWANCE OF DEPRECIATION BEING MANDATORY. 5.1 A MERE GLANCE AT THE RELEVANT PROVISIONS OF SEC. 40(B) REVEALS THAT BOOK PROFIT IS DEFINED IN EXPLANATION 3 TO SEC. 40(B) OF THE A CT. THE SAID EXPLANATION READS AS UNDER: EXPLANATION 3.-FOR THE PURPOSES OF THIS CLAUSE, 'B OOK-PROFIT' MEANS THE NET PROFIT, AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE RELEVA NT PREVIOUS YEAR, COMPUTED IN THE MANNER LAID DOWN IN CHAPTER IV-D AS INCREASED BY TH E AGGREGATE AMOUNT OF THE REMUNERATION PAID OR PAYABLE TO ALL THE PARTNERS OF THE FIRM IF SUCH AMOUNT HAS BEEN DEDUCTED WHILE COMPUTING THE NET PROFIT. 5.2 THUS, NET PROFIT HAS TO BE COMPUTED IN THE M ANNER LAID DOWN IN CHAPER IVD I.E. IN ACCORDANCE WITH PROVISIONS OF SECTIONS 28 TO 44D OF THE ACT PLUS THE AGGREGATE REMUNERATION PAID / PAYABLE TO ALL THE PARTNERS OF THE FIRM . SINCE ALLOWANCE OF DEPRECIATION INCLUDING BROUGHT FORWARD DEPRECIATION IS MANDATORY IN ACCORDANCE WITH PROVISIONS OF SEC. 32 OF THE ACT FOR THE PURPOSE O F COMPUTATION OF BOOK PROFIT AS DEFINED IN EXPLANATION 3 TO SEC. 40(B) OF THE ACT, WE ARE OF THE OPINION THAT THE LD. ITA NO. 2538/DEL/11 5 CIT(A) WAS JUSTIFIED IN UPHOLDING THE FINDINGS OF T HE AO, DISALLOWING SALARY AND REDUCING INTEREST TO PARTNERS. IN VIEW THEREOF, GRO UND NOS.1 TO 3 IN THE APPEAL ARE DISMISSED. 6. GROUND NOS. 4 & 5 IN THE APPEAL RELATE TO DISAL LOWANCE OF INTEREST AMOUNTING TO ` ` . 1,06,000/-. THE AO NOTICED DURING THE COURSE OF AS SESSMENT PROCEEDINGS THAT THE ASSESSEE PAID INTEREST OF ` . ` 3,97,127/- TO BANK AND ` . 70,571./- TO UNSECURED CREDITORS OR FOR LATE PAYMENT. WHILE THE ASSESSEE A DVANCED AN AMOUNT OF ` . `8,84,000/- TO M/S. SWASTIKA ENTERPRISES AND DID NO T CHARGE ANY INTEREST FROM THE SAID SISTER CONCERN. IN RESPONSE TO A SHOW CAUSE NO TICE, THE ASSESSEE REPLIED THAT SINCE THEIR SISTER CONCERN DID NOT FUNCTION IN FULL SWING, NO INTEREST WAS CHARGED. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF T HE ASSESSEE AND RELYING UPON THE DECISION OF HONBLE P & H HIGH COURT DISALLOWED INTEREST OF ` . ` 1,06,000/-.@ 12% ON THE AFORESAID AMOUNT OF ` . ` 8,84,000/-, ADVANCED TO SWASTIKA ENTERPRISES. 7. ON APPEAL LD. CIT(A) UPHELD THE FINDINGS OF AO I N THE FOLLOWING TERMS :- 4.06 THE PLEA OF THE APPELLANT IS CONSIDERED. TH E FACTS AS DISCUSSED ABOVE ARE THAT A SUM OF RS.. 8,84,000/- HAS BEEN SH OWN IN THE NAME OF M/S. SWASTIKA ENTERPRISES UNDER THE HEAD LOAN AND ADVANCES IN THE BALANCE SHEET. DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT STATED THAT A NEW FIRM IN THE NAME OF M/S. SWASTIKA ENTERPRISES WAS FLOATED, IN THE NAME OF WHICH A PLOT WAS ALLOTTED BY THE HUDA AND HENCE CLAIMED THE SAME FOR BUSINESS PURPOSES. AT TH E OUTSET, NO DETAILS WITH NECESSARY DOCUMENTS HAS BEEN BROUGHT O N RECORD REGARDING THE CONSTITUTION OF THE NEW FIRM FLOATED BY THE APPELLANT. IN ANY CASE, EVERY UNIT IS AN INDEPENDENT UNIT WHOSE I NCOME IS TO BE WORKED OUT SEPARATELY. SECTION 36(1)(III) ALLOWED THE INTEREST PAID ON THE FUNDS BORROWED FOR THE PURPOSES OF THE BUSINESS . IN THE CASE UNDER CONSIDERATION, THE APPELLANT MADE ADVANCE FOR PURCH ASE OF A PLOT BY ITS SISTER CONCERN AND HENCE THE SAME CANNOT BE SAID FO R ITS BUSINESS. THE CASE LAW IN THE CASE OF S.A. BUILDERS LTD,. (SUPRA) RELIED UPON BY THE APPELLANT IS, THEREFORE, OF NO HELP. THE ACTION OF THE AO OF DISALLOWANCE OF INTEREST OUT OF THE CLAIM OF INTEREST UPTO TO EX TENT OF THE INTEREST ON INTEREST FREE ADVANCE MADE TO M/S. SWASTIKA ENTERPR ISES IS, THEREFORE, CONFIRMED. 8.. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESS EE CONTENDED THAT SINCE THEY HAVE MADE AN INVESTMENT IN SISTER CONCERN, THE LD. CIT (A) WAS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF INTEREST IN VIEW OF DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS VS. CIT(A) REPORTED IN 288 ITR 1(SC). ON THE OTHER HAND , THE ITA NO. 2538/DEL/11 6 LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT(A) .T O A QUERY BY THE BENCH, THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT REPLY AS TO WHAT WAS THE COMMERCIAL EXPEDIENCY IN ADVANCING INTEREST FREE FUNDS TO M/S. SWASTIKA ENTE RPRISES AND HOW IT WILL BENEFIT THE ASSESSEE. 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION RELIED UPON BY THE LD. AR ON BEHALF OF THE ASSESSEE. AS IS APPARENT FROM THE IMPUGNED ORDERS, NEITHER BEFO RE THE AO NOR BEFORE LD. CIT(A), THE ASSESSEE PLACED ANY EVIDENCE AS TO HOW THE FUND S BORROWED BY IT HAD BEEN UTILIZED AND WHAT WAS THE COMMERCIAL EXPEDIENCY IN SUCH BORROWINGS. IN THIS CONNECTION, THE RELEVANT PROVISIONS OF SECTION 36(1 )(III) OF THE ACT PROVIDE FOR DEDUCTION OF INTEREST ON THE BORROWED FUNDS RAISED FOR BUSINESS PURPOSES. ONCE THE ASSESSEE CLAIMS ANY SUCH DEDUCTION, THE ONUS IS ON THE ASSESSEE TO SATISFY THE AO THAT LOANS RAISED BY THE ASSESSEE WERE USED FOR B USINESS PURPOSES. IF IN THE PROCESS OF EXAMINATION OF CLAIM FOR SUCH A DEDUCTIO N, IT TRANSPIRES THAT THE ASSESSEE HAD DIVERTED CERTAIN FUNDS TO ASSOCIATE OR SISTER C ONCERNS WITHOUT ANY INTEREST, THERE WOULD BE A VERY HEAVY ONUS ON THE ASSESSEE TO BE DI SCHARGED BEFORE THE AO TO THE EFFECT THAT IN SPITE OF PENDING LOANS ON WHICH THE ASSESSEE WAS INCURRING THE LIABILITY TO PAY INTEREST, STILL THERE WAS JUSTIFICATION FOR DIVERSION OF FUNDS TO ASSOCIATE OR SISTER CONCERNS FOR NON-BUSINESS PURPOSES . IN MADHAV PRAS AD JATIA V. CIT [1979] 118 ITR 200 (SC) HONBLE SUPREME COURT OBSERVED THAT UNDER S. 10(2)(III) OF THE 1922 ACT( NOW SEC. 36(1)(III) OF THE 1961 ACT), THREE CONDITI ONS WERE REQUIRED TO BE SATISFIED IN ORDER TO ENABLE THE ASSESSEE TO CLAIM A DEDUCTION I N RESPECT OF INTEREST ON BORROWED CAPITAL, NAMELY, (A) THAT MONEY (CAPITAL) MUST HAVE BEEN BORROWED BY THE ASSESSEE, (B) THAT IT MUST HAVE BEEN BORROWED FOR THE PURPOSE OF BUSINESS, AND (C) THAT THE ASSESSEE MUST HAVE PAID INTEREST ON THE SAID AMOUNT AND CLAIMED IT AS A DEDUCTION. IT WAS ALSO HELD THAT THE EXPRESSION 'FOR THE PURPO SE OF BUSINESS' OCCURRING UNDER THE PROVISION IS WIDER IN SCOPE THAN THE EXPRESSION 'FO R THE PURPOSE OF EARNING INCOME, PROFITS OR GAINS'. IN THE CASE UNDER CONSIDERATION, THERE IS NOTHING IN THE ORDER OF LOWER AUTHORITIES TO SUGGEST THAT THE ASSESSEE DISC HARGED THE ONUS LAID DOWN UPON THEM THAT BORROWED FUNDS HAD INDEED BEEN UTILIZED F OR THE PURPOSE OF ITS BUSINESS SO AS TO ENTITLE IT TO CLAIM DEDUCTION U/S 36(1)(III) OF THE ACT. IN CASE THE ASSESSEE HAD SOME SURPLUS AMOUNT WHICH, ACCORDING TO HIM, COULD NOT BE REPAID PREMATURELY TO ITS ITA NO. 2538/DEL/11 7 CREDITORS, STILL THE SAME WERE EITHER REQUIRED TO B E CIRCULATED AND UTILISED FOR THE PURPOSE OF BUSINESS OR TO BE INVESTED IN A MANNER I N WHICH IT GENERATES INCOME AND NOT THAT THESE WERE DIVERTED TOWARDS ASSOCIATE OR SISTER CONCERNS FREE OF INTEREST . THIS WOULD RESULT IN NOT PRESENTING THE TRUE AND CO RRECT PICTURE OF THE ACCOUNTS OF THE ASSESSEE AS AT THE COST BEING INCURRED BY THE ASSES SEE, THE ASSOCIATE OR SISTER CONCERNS WOULD BE ENJOYING THE BENEFITS THEREOF. IT CANNOT BE HELD THAT THE FUNDS TO THE EXTENT DIVERTED TO SISTER CONCERN WITHOUT CHARG ING ANY INTEREST, WERE REQUIRED BY THE ASSESSEE FOR THE PURPOSE OF ITS BUSINESS AND LO ANS TO THAT EXTENT WERE REQUIRED TO BE RAISED. THE PLEA THAT NO INTEREST WAS DISAL LOWED IN THE PRECEDING YEAR IS NOT ACCEPTABLE, SINCE PRINCIPLES OF RES JUDICATA DO NOT APPLY TO THE INCOME TAX PROCEEDINGS AND EACH YEAR IS INDEPENDENT. EVEN OTHE RWISE, THE ASSESSEE DID NOT PLACE COPY OF RELEVANT ORDER FOR THE PRECEDING YEAR BEFORE US IN ORDER TO ASCERTAIN AS TO WHETHER OR NOT THE AO APPLIED HIS MIND TO THE FA CTS OF THE CASE. AS IS APPARENT FROM THE AFORESAID FACTS, IN THE INSTANT CASE, THE ASSESSEE DID NOT ESTABLISH ANY COMMERCIAL EXPEDIENCY IN ADVANCING INTEREST FREE L OANS OF ` . ` 8,84,000/- TO A SISTER CONCERN M/S. SWASTIKA ENTERPRISES. EVEN NO DETAILS OR DOCUMENTS WERE FILED BEFORE THE LOWER AUTHORITIES REGARDING THE CONSTITUTION OF THE NEW FIRM .HOW PURCHASE OF A PLOT OF LAND BY A SISTER CONCERN WOULD BENEFIT THE ASSESSEE, HAS NOT BEEN EXPLAINED BEFORE THE LOWER AUTHORITIES AND EVEN BEFORE US. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT P LACE ANY MATERIAL BEFORE US, ESTABLISHING COMMERCIAL EXPEDIENCY IN ADVANCING INT EREST FREE LOANS TO M/S. SWASTIKA ENTERPRISES SO AS TO ENABLE US TO TAKE A D IFFERENT VIEW IN THE MATTER, THERE IS NO BASIS TO INTERFERE. THEREFORE, GROUND NOS. 4 & 5 IN THE APPEAL ARE DISMISSED. 10. NEXT GROUND NOS. 6 TO 9 RELATE TO ADDITION U /S 68 OF THE ACT AND DISALLOWANCE OF INTEREST PAID TO THE THREE UNSECURED CREDITORS.. T HE AO NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE OBTAINED U NSECURED LOANS, INTER ALIA, FROM THE FOLLOWING THREE PERSONS:. NAME DATE OF TAKING LOAN AMO UNT[IN ` . `] SMT. NANCY GARG 13.3.2006 3,01,479 SMT. SHAIFALI GARG - 3,01,479 SMT. SANJU 13.4.2005 1,13,990 ITA NO. 2538/DEL/11 8 10.1. VIDE A SHOW CAUSE NOTICE DATED 28 TH AUGUST, 2008 THE AO SOUGHT CONFIRMATION OF THE AFORESAID UNSECURED CREDITORS , PROOF OF FILING OF RETURN BY THEM AND THE AO WITH WHOM THEY WERE BEING ASSESSED. INT ER ALIA, THE AO REQUESTED THE ASSESSEE TO PRODUCE THESE PARTIES, IF THEY WERE NOT ASSESSED TO TAX. IN RESPONSE THE ASSESSEE DID NOT FILE COPIES OF ACCOUNTS OF THE AFO RESAID THREE PERSONS. SUBSEQUENTLY ,IN RESPONSE TO ANOTHER SHOW CAUSE NOT ICE ,THE ASSESSEE FILED COPY OF ACCOUNT OF NANCY GARG ALONGWITH A COPY OF HER BANK ACCOUNT WITH OBC, PANIPAT AND COPY OF ACCOUNT OF SHRI SANJU.IN RESPECT OF SHA IFLI GARG, NO SUCH DETAILS WERE FILED. IN THE LIGHT OF THESE FACTS THE AO ADDED THE AFORESAID AMOUNT ON ACCOUNT OF UNSECURED CREDITS,OBSERVING AS UNDER :- NANCY GARG-RS. 3,00,000 + INTT. RS. 1479) SHE IS NOT AN INCOME TAX ASSESSEE AS NO PROOF OF IT RETURN HAS BEEN FILED BY THE ASSESSEE INSPITE OF REPEATED OPPORTUNI TIES. INSPITE OF SHOW CAUSE NOTICE TO PRODUCE HER FOR EXAMINATION, SHE HAS NOT BEEN PRODUCED. THE ASSESSEE HAS FILED HER COPY OF ACCOUNT AS APPEARING IN ITS BOOKS AND COPY OF HER BANK ACCOUNT WITH OBC, SSI BRNACH, PANIPAT WHER EIN A SUM OF RS. 3 LAKHS HAS BEEN WITHDRAWN ON 14.3.2006. BUT BEFORE W ITHDRAWAL, THERE ARE DEPOSITS OF RS.147245/- ON 10.2.06 AND CASH DEPOSIT OF RS.1,25,000/- ON 14.2.06 FOR WHICH NO SOURCE OF THE DEPOSITS HAS BEE N GIVEN ; NEITHER SHE HAS BEEN PRODUCED FOR EXAMINATION. IN VIEW OF THE DECIS ION OF S.C. IN THE CASE OF ROHAN DI HATTI, 107-ITR-938 WHEREIN IT HAS BEEN HEL D THAT TO ACCEPT THE CREDIT AS GENUINE, THREE CONDITIONS MUST BE FULFILLED I.E IDENTITY OF THE CREDITOR (II) CAPACITY OF THE CREDITOR AND (III) CREDITWORTHINESS OF THE CREDITOR. IN THIS CASE THOUGH IDENTITY OF THE CREDITOR IS PROVED WITH THE BANK ACCOUNT BUT OTHER TWO CONDITIONS ARE NOT FULFILLED. THEREFORE, THE SUM OF RS.`. 3,00,000/- DEPOSITED BY THE ASSESSEE FIRM IN THE NAME OF NANCY GARG IS TREA TED AS ITS INCOME U/S 68 OF THE INCOME TAX ACT, 1961. INTEREST OF `RS. 1479 IS ALSO DISALLOWED.. SHRI SANJU - `RS.. 115126/- THERE IS A DEPOSIT OF RS.1,05,000/- IN THIS ACCOUNT ON 13.4.2005 AND INTEREST OF RS.10126/- HAS BEEN ALLOWED BY THE ASS ESSEE TO THIS CREDITOR. INSPITE OF REPEATED OPPORTUNITIES, NEITHER THE CRED ITOR HAS BEEN PRODUCED FOR EXAMINATION NOR ANY COPY OF HIS BANK ACCOUNT OR IT RETURN HAS BEEN FILED BY THE ASSESSEE. THEREFORE, IN VIEW OF THE DECISION OF HONBLE S.C. IN THE CASE CITED ABOVE, THE AMOUNT OF DEPOSIT OF RS. 1,05,000/ - IS TREATED AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE INCOM E TAX ACT, 1961. INTEREST PAID OF RS. 10126/- IS ALSO DISALLOWED. . SHAIFLI GARG - `RS. 301479/- IN THE LIST OF UNSECURED LOANS, AN AMOUNT OF RS.301 479/- HAS BEEN SHOWN WHEREAS IN THE LIST OF UNSECURED LOANS, NO SUCH AMO UNT IN THE NAME OF SHAIFALI ITA NO. 2538/DEL/11 9 GARG APPEARS. IT IS, THEREFORE, CLEAR THAT THE AMOU NT OF RS.3,01,479/- INCLUDING HAS BEEN INTRODUCED IN ITS BOOKS OF ACCOU NT BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. NO COPY OF ACCOUNT OF THE CREDITOR AS APPEARING IN ITS BOOKS OF ACCOUNT, NO COPY OF BANK ACCOUNT AN D NO COPY OF IT RETURN HAS BEEN FILED BY THE ASSESSEE INSPITE OF SHOW CAUSE NO TICES. THEREFORE, THE SUM OF `RS.. 3,01,479/- IN THE NAME OF SHAIFALI GARG IS NOT TREATED AS GENUINE AND IS HELD AS ASSESSEES INCOME FROM UNDISCLOSED SOURC ES U/S 68 OF THE INCOME TAX ACT, 1961. . 11. ON APPEAL, LD. CIT(A) UPHELD THE FINDINGS OF THE AO IN THE FOLLOWING TERMS:- 5.10 THE ISSUE IS CONSIDERED. IT HAS BEEN JUDICIA LLY SETTLED THAT BURDEN OF PROVING THE GENUINENESS OF CASH-CREDIT IS ON THE ASSESSEE AND THE THREE MAIN INGREDIENTS OF ASSESSEES ONUS ARE THAT HE MUST BE ABLE TO ESTABLISH THE IDENTITY OF THE CREDITOR, HIS CAPACIT Y / SOURCE OF ADVANCING THE SAID LOAN AND LASTLY, THE GENUINENESS OF SUCH T RANSACTION. ALL THE THREE INGREDIENTS MUST BE ESTABLISHED AND MERE ESTA BLISHING THE IDENTITY OF THE CREDITOR OR PRIME-FACIE CAPACITY WO ULD NOT DISCHARGE THE BURDEN CAST UPON THE ASSESSEE BY LAW. REFERENCE IN THIS RESPECT IS MADE TO THE DECISION OF THE HONBLE CALCUTTA HIGH C OURT IN THE CASE OF SHANKAR INDUSTRIES VS. CIT 114 ITR 689. THE HONBLE CALCUTTA HIGH COURT OBSERVED IN A LATER JUDGMENT IN THE CASE OF C IT VS. PRECISION FINANCE (P) LTD. 208 ITR 465, 470, 471 THAT MERE FU RNISHING OF PARTICULARS IS NOT ENOUGH AND MERE PAYMENT BY ACCOU NT PAYEE CHEQUE IS NOT SACROSANCT, NOR CAN IT MAKE A NON GENUINE TR ANSACTION GENUINE. THE CALCUTTA HIGH COURT IN A STILL LATER JUDGMENT I N THE CASE OF CIT VS. KARLAY CO. LTD. 232 ITR 820, 824 HAS HELD THAT MERE FILING OF INCOME TAX FILE NO. OF CREDITOR IS NOT ENOUGH TO ESTABLISH THE GENUINENESS OF A CASH CREDIT. THE CREDITOR SHOULD BE IDENTIFIED; THE RE SHOULD BE CREDIT WORTHINESS AND TRANSACTION SHOULD BE GENUINE. REFER ENCE IS ALSO MADE TO THE DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF RAJSHREE SYNTHETICS PVT. LTD. VS. CIT 256 ITR 331 (RAJ.), WH EREIN THE HONBLE COURT REITERATED THE SAME VIEW; IT IS WELL SETTLED THAT THE ASSESSEE IS REQUIRED TO PROVE PRIMA FACIE THE TRANSACTION, WHICH RESULT IN CASH CREDITS IN HIS BO OKS OF ACCOUNT. SUCH PROOF INCLUDES THE PROOF OF IDENTITY OF HIS CREDITOR, THE CAPACITY OF SUCH CREDITOR TO ADVANCE THE MONEY AND LASTLY, THE GENUINENESS OF TH E TRANSACTION. THESE THINGS MUST BE PROVED PRIMA FACIE BY THE ASSESSEE A ND ONLY AFTER THE ASSESSEE HAD ADDUCED EVIDENCE, DOES THE ONUS SHIFT TO THE DE PARTMENT. MERE FILING OF CONFIRMATORY LETTERS DOES NOT DISCHARGE THE ONUS TH AT LIES ON THE ASSESSEE. SIMILARLY, MERE FURNISHING OF PARTICULARS IS NOT EN OUGH. 5.11 THE PRINCIPAL OF SHIFTING OF THE ONU S FROM ASSESSEE TO THE AO AND VICE-VERSA HAS ALSO BEEN WELL ESTABLISHED JUDIC IALLY. SUPPOSING, THE ASSESSEE PRIME-FACIE ESTABLISHED THE ABOVE THRE E INGREDIENTS, BUT THE AO STILL REQUIRES THE ASSESSEE TO PRODUCE FURTH ER EVIDENCE IN RELATION TO ANY OF THE THREE INGREDIENTS OR THE AO IS ABLE TO CONTRADICT ITA NO. 2538/DEL/11 10 THE EVIDENCE PRODUCED BY THE ASSESSEE, THE AO CANNO T BE STOPPED FROM MAKING FURTHER ENQUIRIES. ANOTHER EXAMPLE COUL D BE WHERE THE IDENTITY OF THE CREDITOR IS ESTABLISHED PRIME FACE BY PRODUCING COPIES OF THE PAN CARD / PASSPORT OF THE CREDITOR, THE AO COU LD STILL ASK FOR PERSONAL APPEARANCE OF THE CREDITOR AND UPON THAT, THE ONUS SHIFTS BACK TO THE ASSESSEE AND ON THE LATERS FAILURE TO DO SO , THE IDENTITY OF THE CREDITORS REMAINS NOT EVEN PRIMA FACIE ESTABLISHED. THIS ELABORATION OF THE PRINCIPAL OF THE ONUS AND OF SHIFTING OF THE ON US FINDS SUPPORT FORM THE APEX COURT JUDGMENT IN THE CASE OF CIT VS. P. M OHANKALA & OTHERS 291 ITR 278 (SC). IN THE SAID EXPRESSION THE ASSES SEE OFFERS NO EXPLANATION MEANS THE ASSESSEE OFFERS NO PROPER, R EASONABLE AND ACCEPTABLE EXPLANATION IN REGARD TO THE CREDITORS S HOWN IN THE BOOKS MAINTAINED BY THE ASSESSEE. APEX COURT IN THIS CASE FOLLOWED ITS DECISION IN THE CASE OF SUMATI DAYAL VS. CIT 214 IT R 801 (SC). 5.12. THE ISSUE IS EXAMINED IN VIEW OF THE LEGAL POSITION DISCUSSED ABOVE. THE APPELLANT DID NOT PRODUCE THE CREDITORS IN SPITE OF SPECIFIC REQUEST OF THE AO FOR HIS EXAMINATION TO VERIFY TH E GENUINENESS OF THESE CREDITS. THE APPELLANT, HOWEVER, FILED BANK S TATEMENT IN THE CASE OF SMT. NANCY GARG AND MRS. SHAIFALI GARG AND THEIR CONFIRMATION OF ACCOUNT. IT IS NOTED THAT CONFIRMATION OF ACCOUNTS IN ALL THE THREE CASES ARE NOT SIGNED BY THE CREDITORS. FURTHER, FROM THE COPY OF BANK STATEMENT OF MRS. NANCY AND MRS. SHAIFALI GARG, IT IS NOTED THAT THE ENTRIES TILL THE DEBIT OF LOAN AMOUNT OF RS.` 3 LAK HS IS ALMOST THE SAME. THE COPY OF BANK STATEMENTS OF THE CREDITORS FILED BY THE APPELLANT ARE MADE PART OF APPEAL ORDER AS ANNEXURE A1 & A2. INSP ITE OF SPECIFIC REQUEST, THE SOURCE OF CREDIT IN THESE BANK ACCOUNT S ENABLING THE CREDITORS TO GIVE LOAN OF RS.`. 3,00,000/-, COULD N OT BE EXPLAINED. IT IS ALSO INTERESTING TO NOTE THAT BOTH THESE CREDITORS HAVE BEEN FILING THEIR INCOME TAX RETURN AT BARNALA WHEREAS THE BANK ACCOU NTS OUT OF WHICH THE SAID LOANS WERE MADE ARE MAINTAINED AT PANIPAT. EVEN THE COPY OF RETURN OF SMT. NANCY GARG HAS BEEN FILED FOR THE AY 2005-06 & 2007- 08 AND NOT OF THE YEAR UNDER CONSIDERATION I.E. AY 2006-07.AS FAR AS THE 3 RD CREDITOR MRS. SANJU IS CONCERNED, NEITHER HER CONF IRMATION ,NOR SOURCE OF MAKING THE ALLEGED LOAN ALONG WITH DOCUME NTARY EVIDENCE HAS BEEN FILED. IN VIEW OF THE LEGAL POSITION AND F ACTS DISCUSSED ABOVE, IT IS HELD THAT APPELLANT FAILED TO ESTABLISH IDENT ITY, CAPACITY/SOURCE OF MAKING THE SAID LOANS AND GENUINENESS OF TRANSACTIO NS AND AS SUCH FAILED TO ESTABLISH THE GENUINENESS OF THESE CREDIT S. IN VIEW OF DIRECT DECISIONS OF THE APEX COURT ON THE ISSUE, AS DISCUS SED ABOVE, THE CASE LAWS RELIED UPON BY THE APPELLANT ARE OF NO HELP. T HE ADDITION MADE BY THE AOON THIS ACCOUNT ALONG WITH DISALLOWANCE OF IN TEREST CLAIMED ON THESE LOANS IS HEREBY CONFIRMED SINCE LOANS ITSELF HAS BEEN HELD AS UNEXPLAINED. 12. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE WH ILE CARRYING US THROUGH THE IMPUGNED ORDER RELIED UPON THEIR SUBMISSIONS BEFORE THE LD. CIT(A) WHILE THE LD. DR ITA NO. 2538/DEL/11 11 SUPPORTED THE FINDINGS OF LD. CIT(A). TO A QUERY BY THE BENCH, THE LD. AR COULD NOT IDENTIFY AS TO WHICH DOCUMENTS PLACED IN THE PAPE R BOOK WERE FILED BEFORE THE AO AND WHICH ONE BEFORE THE LD. CIT(A). HOWEVER, HE RE LIED UPON DECISION IN CIT VS. RAM NARAIN GOEL,224 ITR 180(P&H). 13. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE OF FILING OF RETURN BY NANCY GARG BEFORE THE AO NOR PRODUCED HER BEFORE THE AO FOR CR OSS-EXAMINATION. LIKEWISE, THE ASSESSEE DID NOT PRODUCE MR. SANJU OR SMT. SHAIFALI GARG BEFORE THE AO NOR SUBMITTED COPY OF THEIR RETURN OR EVEN THEIR BANK A CCOUNT BEFORE THE AO. EVEN THE CONFIRMATIONS STATED TO BE IN THEIR NAMES WERE NOT SIGNED BY ANY OF THEM I.E.SMT. NANCY GARG , SMT. SHAIFALI GARG AND EVEN MR. SANJU. AS A RESULT , CREDITS APPEARING IN THEIR NAMES WERE ADDED U/S 68 OF THE ACT, THE AS SESSEE HAVING FAILED TO ESTABLISH THEIR IDENTITY AND CREDITWORTHINESS OR EVEN THE GEN UINENESS OF TRANSACTIONS. BEFORE THE LD. CIT(A), THE ASSESSEE FILED COPY OF BANK STA TEMENT OF SMT. NANCY GARG AND SMT. SHAIFALI GARG ,BUT DID NOT ESTABLISH THEIR CRE DITWORTHINESS. THE LD. CIT(A) NOTED THAT COPY OF RETURN OF SMT. NANCY GARG WAS NOT FILE D FOR THE YEAR UNDER CONSIDERATION..AS REGARDS MR. SANJU, THE ASSESSEE D ID NOT SUBMIT ANY CONFIRMATION FROM HIM NOR ESTABLISHED HIS CREDITWORTHINESS OR EV EN GENUINENESS OF THE TRANSACTIONS. BEFORE US, SITUATION IS NO BETTER. CO NSIDERING THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THE ASSE SSEE FILED MERELY COPY OF ACCOUNT OF THESE THREE CREDITORS AS APPEARING IN I TS BOOKS AND DID NOT FILE ANY CONFIRMATION FROM ANY OF THE THREE CREDITOR NOR EST ABLISHED THEIR CREDITWORTHINESS OR GENUINENESS OF THE TRANSACTIONS, WE DO NOT FIND A NY BASIS TO INTERFERE. WE MAY POINT OUT THAT MERE FILING OF UNCONFIRMED COPY OF A CCOUNTS DOESNT DISCHARGE THE ONUS LAID DOWN UPON THE ASSESSEE FOR ESTABLISHING I DENTITY AND CREDITWORTHINESS OF DEPOSITORS OR EVEN GENUINENESS OF TRANSACTIONS AS H ELD IN A NUMBER OF DECISIONS INCLUDING IN SHANKAR INDUSTRIES VS. CIT,114 ITR 68 9 (CAL),BHARTI PVT. LTD. VS CIT,111 ITR 951 (CAL) NANAK CHANDRA LAXMAN DAS VS. CIT, 140 ITR 151 (ALL). MERE FILING OF I.T. FILE NUMBER OF CREDITOR IS ALSO NO T ENOUGH AND THAT IDENTITY AND CREDITWORTHINESS OF THE CREDITOR HAS TO BE ESTABL ISHED AS HELD IN CIT VS KORLAY TRADE CO. LTD., 232 ITR 820 (CAL). IN CIT VS. PRE CISION FINANCE (P) LTD. 208 ITR 465, 470, 471, IT WAS HELD THAT THAT MERE FURNISHI NG OF PARTICULARS IS NOT ENOUGH AND ITA NO. 2538/DEL/11 12 MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSA NCT, NOR CAN IT MAKE A NON GENUINE TRANSACTION GENUINE. SIMILAR VIEW WAS TAKEN BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF RAJSHREE SYNTHETICS PVT. LTD. VS. CIT 256 ITR 331 (RAJ.).AS REGARDS DECISION IN RAM NARAIN GOEL(SUPRA), THIS WA S RENDERED ON FACTS OF ITS OWN AND NO PARALLEL CAN BE DRAWN BETWEEN FACTS OF THE INSTANT CASE AND THE CITED DECISION. EVEN OTHERWISE, THE LD. AR DID NOT ESTABL ISH BEFORE US AS TO HOW THIS DECISION IS OF ANY HELP TO THE ASSESSEE. IT IS WELL -SETTLED THAT THE ASSESSEE MUST DISCHARGE THE BURDEN OF PROVING THE IDENTITY OF THE CREDITORS AND THE CREDITWORTHINESS OF THE DEPOSITORS MUST BE ESTABLISHED TO THE SATISF ACTION OF THE ASSESSING OFFICER. WHERE THERE IS AN UNEXPLAINED CASH CREDIT, IT IS OP EN TO THE ASSESSING OFFICER TO HOLD THAT IT IS INCOME OF THE ASSESSEE AND NO FURTHER BU RDEN LIES ON THE ASSESSING OFFICER TO SHOW THAT INCOME IN QUESTION COMES FROM ANY PART ICULAR SOURCE. THE FACTS OF THIS CASE CLEARLY SHOW THAT THE ASSESSEE HAS NOT BEEN AB LE TO PROVE THE CREDITWORTHINESS OF THE SAID CREDITORS WITH RESPECT TO THE CASH CRED ITS IN QUESTION NOR ESTABLISHED GENUINENESS OF THE TRANSACTIONS.. IN THESE CIRCUMS TANCES, WE HAVE NO HESITATION IN UPHOLDING THE FINDINGS OF THE LD. CIT(A).CONSEQUENT LY, GROUND NOS.6 TO 8 IN THE APPEAL ARE DISMISSED. 14. GROUND NO. 9 IN THE APPEAL, BEING GENERAL IN NATURE NOR ANY SUBMISSIONS HAVING BEING MADE BEFORE US ON THIS GROUND, DOES NO T REQUIRE ANY SEPARATE ADDITION AND IS, THEREFORE, DISMISSED. 15. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 16. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN CO URT SD/- SD/- (RAJPAL YADAV) (A N PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER COPY FORWARDED TO: - 1. M/S. JAI JAWALA PROCESSORS,BARSAT ROAD: VILL. CH ANDOLI,(PANIPAT.. 2. ACIT, PANIPAT CIRCLE, PANIPAT. 3. CIT CONCERNED 4. CIT (A)-KARNAL 5. DR, ITAT I BENCH, NEW DELHI 6. GUARD FILE ITA NO. 2538/DEL/11 13 TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT