ITO 9(2)-2, MUMBAI V. M/S KANCHAN INTERNATIONAL LTD., MUMBAI

ITA 2541/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3183 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Keywords: Bogus purchase; Principle of natural justice
• Section: 143(3); 133(6)

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.2541 /MUM/2010 ( / ASSESSMENT YEAR : 2006-07) INCOME TAX OFFICER 9(2)(2), AAYAKAR BHAVAN, R. NO. 225, 2 ND FLOOR, M.K. ROAD, MUMBAI 400 020. / V. M/S KANCHAN INTERNATIONAL LTD., 7, SALOONI APARTMENTS, TPS 111, PLOT NO. 195, 56 ROAD, BORIVALI (W), MUMBAI 400 092. ./ PAN : AAACK2599K ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI A. RAMACHANDRAN ASSESSEE BY : MS. PARVATHY GANESH / DATE OF HEARING : 16-06-2016 / DATE OF PRONOUNCEMENT : 24-08-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 2 541/MUM/2010, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 19 TH JANUARY, 2010 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 20, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2006- 07, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDER DATED 30 TH DECEMBER 2008 PASSED BY THE LEARNED ASSESSING OFFIC ER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INC OME TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 2541/MUM/2010 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE BEF ORE INCOME TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) IN THE MEMO OF APPEAL FILED WITH THE TRIBUNAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISCREPANCY IN EXPENDITURE INCU RRED BY THE ASSESSEE UNDER THE HEAD PURCHASE, ADVERTISEMENT & LEGA L EXPENSES THROUGH M/S CARAT MEDIA SERVICES INDIA PVT. LTD. AND M /S. OGILVY & MATHER P. LTD., TO THE EXTENT OF RS. 82,02,601/- AND RS . 71,67,764/-, RESPECTIVELY WITHOUT APPRECIATING THE FACT THAT THE ASSE SSEE FAILED TO SATISFACTORILY EXPLAIN THE SAME WITH SUPPORTING EVIDENC ES. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RES TORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURER OF NON-STICK COOK WARES, P RESSURE COOKERS AND MIXER GRINDERS. THE ASSESSEE HAS FOUR MANUFACTURING UNIT, THREE AT DAMAN AND ONE AT BADDI IN HIMACHAL PRADESH. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT, IT WAS OBSERVED BY THE A.O. THAT THE ASSESSEE HAS CLAIMED EXPENSES ON ACCOUNT OF ADVERTISING, BUSINESS PROMOTION, LEGAL EXPENSES ETC. PAID TO TWO CONCERNS NAMELY M/S CARAT MEDIA SERVICES INDIA PVT. LTD. AND M/S OGILVY & MATHER PVT. LTD. IT WAS OBSERVED BY THE A.O. THAT THE ASSESSEE HAS DEBITED VARIOUS PAYMENTS MADE TO THESE TWO CONCERNS UNDER THE HEAD PURCHASES, SALES PROMOTION EXPENSES AND ADMINISTRATIVE EXPENSES ETC. THE DETAILS OF WHICH A RE AS UNDER:- 1. CARAT MEDIA SERVICES INDIA PVT. LTD. PURCHASES RS. 1,20,53,345/- ADVERTISEMENT EXPENSES RS. 1,06,56,223/- TOTAL RS. 2,27,09,568/- ITA 2541/MUM/2010 3 THE A.O. ISSUED NOTICES U/S 133(6) OF THE ACT TO M/ S CARAT MEDIA SERVICES INDIA PVT. LTD. ASKING FOR THE DETAILS OF SERVICES RENDERED, LEDGER ACCOUNT OF THE ASSESSEE IN THEIR BOOKS AND OTHER RELEVANT DETA ILS. THE REPLY WAS RECEIVED FROM THE SAID CONCERN WHEREBY IT CONFIRMED THAT TOT AL AMOUNT BILLED TO THE ASSESSEE COMPANY DURING THE FINANCIAL YEAR 2005-06 WAS RS. 1,45,06,967/- THEREFORE , THE ASSESSEE WAS ASKED TO EXPLAIN THE D IFFERENCE OF RS. 82,02,601/. IN RESPONSE, THE ASSESSEE SIMPLY FILED THE REVISED STATEMENT OF PURCHASES ADJUSTING THE AMOUNT ACCORDINGLY. FURTHER, THE ASSE SSEE HAS INCREASED THE MISCELLANEOUS PURCHASES BELOW RS. 3 LACS TO RS. 3,0 5,24,989/- FROM RS. 1,68,77,393/- WITHOUT EXPLAINING OR FILING ANY SUPP ORTING EVIDENCE THEREOF. IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS STILL AN AMOUNT OF RS. 24,77,891/- DUE TO M/S CARAT MEDIA SERVICES INDIA P VT. LTD. UNDER THE HEAD PURCHASES. THE ASSESSEE HAS ALSO CHANGED THE ITEMS PURCHASED FROM TV COMMERCIAL ADVERTISEMENT TO JUST PURCHASES. THE SAID CONCERN CARAT MEDIA SERVICES INDIA PRIVATE LIMITED IN THEIR REPLY HAS O NLY CONFIRMED PAYMENT FOR ADVERTISEMENT EXPENSES WHILE THE ASSESSEE FAILED TO EXPLAIN THAT HOW THE SAID EXPENSES WERE ACCOUNTED FOR UNDER THE HEAD PURCHAS ES. THE ASSESSEE DID NOT PRODUCE ITS BOOKS OF ACCOUNT OR BILLS FOR PURCH ASES IN SUPPORT OF ITS CLAIM, HENCE, THE A.O. HELD THAT THE ASSESSEE HAS ENTERED IN TO BOGUS ENTRY UNDER THE HEAD PURCHASES TO REDUCE THE TAXABLE INCOME A ND THEREFORE THE A.O. ADDED AN AMOUNT OF RS. 82,02,601/- TO THE TOTAL INC OME OF THE ASSESSEE, VIDE ASSESSMENT ORDER DATED 30-12-2008 PASSED U/S. 143(3 ) OF THE ACT. 4. SIMILARLY, WITH RESPECT TO THE M/S OGILVY & MATH ER PVT. LTD ( O&M), NOTICE WAS ISSUED U/S 133(6) OF THE ACT, ASKING FOR THE DETAILS OF SERVICES RENDERED , LEDGER ACCOUNT OF THE ASSESSEE IN THEIR BOOKS OF ACCOUNTS AND OTHER DETAILS. THE DETAILS OF THE TRANSACTIONS AS PER ASS ESSEES BOOKS ARE AS UNDER:- M/S OGILVY &MATHER PVT. LTD. PURCHASES RS. 79,61,950/- ITA 2541/MUM/2010 4 ADVERTISEMENT EXPENSES RS. 33,24,000/- LEGAL AND PROFESSIONAL FEES RS. 22,39,000/- TOTAL RS. 1,35,24,950/- THE REPLY WAS RECEIVED FROM THE SAID CONCERN O& M W HEREBY THE SAID CONCERN O &M CONFIRMED ONLY THE ADVERTISEMENT SERVICES DURI NG THE FINANCIAL YEAR 2005-06 AND THE TOTAL AMOUNT BILLED WAS SHOWN AS RS . 63,53,186/- AND HENCE , THE DIFFERENCE BETWEEN THE ASSESSEES CLAIM AND THE INFORMATION RECEIVED U/S 133(6) OF THE ACT COMES TO RS. 71,67,7 64/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE HAS CHANGE D THE ITEMS PURCHASED FROM TV COMMERCIAL ADVERTISEMENT TO JUST PURCHAS ES. FURTHER TO ADJUST THE SAME THE ASSESSEE HAS ALSO INCREASED THE MISCELLANE OUS PURCHASES. THE SAID CONCERN O & M HAS ONLY CONFIRMED PAYMENT FOR ADVERT ISEMENT OF THE PRODUCTS OF THE ASSESSEE. THE A.O. ACCORDINGLY DISALLOWED TH E DIFFERENCE OF RS. 71,67,764/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDER DATED 30-12-2008 U/S 143(3) OF THE ACT PASSED BY THE AO. 5. AGGRIEVED BY THE ASSESSMENT ORDER DATED 30-12-20 08 PASSED BY THE AO U/S 143(3) OF THE ACT, THE ASSESSEE HAS FILED ITS FIRST APPEAL BEFORE THE LD. CIT(A). 6. BEFORE THE LEARNED CIT(A) , THE ASSESSEE SUBMITT ED THAT THE ASSESSEE HAS WRONGLY INCLUDED THE DETAILS OF PURCHASES OF BA DDI UNIT. THE ASSESSEE FURNISHED A LIST SHOWING THE PURCHASES AGGREGATING RS. 1,68,77,393/- MADE BY ASSESSEES FOUR UNITS AND WHILE PREPARING THESE DETAILS THE TOTAL CREDITS AGGREGATING TO RS. 2,00,15,295/- COMPRISING RS. 1,2 0,53,345/- APPEARING IN THE LEDGER ACCOUNT OF CARAT MEDIA SERVICE PVT. LTD. AND RS. 79,61,950/- APPEARING IN THE LEDGER ACCOUNT OF OGLIVY & MATHER PVT. LTD. WERE WRONGLY INCLUDED IN THE DETAILS OF PURCHASES OF BADDI UNIT . THUS, IN THIS PROCESS THE INTRA-UNIT PURCHASES AMOUNTING TO RS. 1,71,80,708/- MADE BY BADDI UNIT FROM UNIT-III, DAMAN WAS OMITTED FROM THE FIGURE OF PURCHASES SUBMITTED IN ITA 2541/MUM/2010 5 RESPECT OF BADDI UNIT. THUS, IT WAS SUBMITTED THAT THE INCORRECT DETAILS OF PURCHASES AMOUNTING TO RS. 1,71,80,708/- WRONGLY CL ASSIFIED AS UNDER:- CARAT MEDIA SERVICE PVT. LTD. RS. 1,20,53,345/- OGLIVY & MATHER PVT. LTD. RS. 79,61,950 BRANCH TRANSFER UNIT III DAMAN RS. (28,34,587) ============ TOTAL RS. 1,71,80,708/- THE A.O. DID NOT APPRECIATE THAT THERE WAS NO DIFFE RENCE IN THE UNIT WISE PURCHASE EXCEPT IN THE CASE OF BADDI UNIT. IT WAS S UBMITTED THAT NO PURCHASES WERE MADE BY THE ASSESSEE FROM THESE TWO CONCERNS AND THE CREDIT IN THEIR ACCOUNTS WERE WRONGLY INCLUDED IN THE PURC HASE DETAILS, THE ASSESSEE CORRECTED THE SAME AND HAD FILED THE CORRECTED/REVI SED DETAILS OF PURCHASES IMMEDIATELY ON THE NEXT DAY. THE AO IGNORED THEM AN D MADE THE IMPUGNED ADDITIONS VIDE ASSESSMENT ORDER DATED 30-12-2008 PA SSED U/S. 143(3) OF THE ACT WHICH SHOULD BE DELETED. THE LD. CIT(A) CONSIDERED THE REPLY OF THE ASSESSE E. THE LD. CIT(A) OBSERVED FROM THE AUDITED ACCOUNTS THAT THE ASSESSEE HAD DEB ITED A SUM OF RS. 3,03,67,958/- TO THE P&L ACCOUNT UNDER THE HEAD SA LES AND DISTRIBUTION EXPENSES GIVING BREAK UP OF THESE EXPENSES WHICH S HOWS THAT THE SAID SUM INCLUDED AN AMOUNT OF RS. 1,54,19,700/- UNDER THE S UB HEAD ADVERTISING AND PUBLICITY EXPENSES . FURTHER, THE ASSESSEE DE BITED AN AMOUNT OF RS. 2,53,92,744/- UNDER THE HEAD ADMINISTRATION EXPENS ES AND A SUM OF RS. 46,99,413/- SHOWN UNDER THE HEAD LEGAL AND PROFESS IONAL FEES. THE LD. CIT(A) OBSERVED THAT THE DETAILS OF THESE EXPENSES WERE FURNISHED TO THE A.O. VIDE LETTER DATED 1ST DECEMBER, 2008 WHICH SHOWS TH AT THE ASSESSEE HAD INCURRED RS. 1,07,50,844/- AND RS. 33,24,000/- TOWA RDS ADVERTISEMENT EXPENSES PAYABLE TO CARAT MEDIA SERVICE PVT. LTD. A ND OGLIVY & MATHER PVT. LTD. RESPECTIVELY. THE DETAILS OF EXPENSES ALSO SH OW THAT THE ASSESSEE HAD ITA 2541/MUM/2010 6 INCURRED ADDITIONALLY AN AMOUNT OF RS. 22,39,000/- TOWARDS LEGAL AND PROFESSIONAL EXPENSES PAYABLE TO OGLIVY & MATHER PV T. LTD. THUS, THE TOTAL EXPENSES INCURRED THROUGH M/S OGLIVY & MATHER PVT. LTD. STOOD AT RS. 55,63,000/- AND THE A.O. HAS NOT DISPUTED THESE FIG URES. THE LD. CIT(A) FURTHER OBSERVED THAT THE DETAILS OF PURCHASES INIT IALLY FURNISHED TO THE A.O. SHOWED AN AMOUNT OF RS. 21,94,71,340/- AND THE REVI SED DETAILS OF PURCHASES WERE ALSO SAME AND THE SAME AMOUNT WAS DEBITED TO T HE P&L ACCOUNT WHICH WAS ALSO NOT DISPUTED BY THE A.O. SIMILARLY, THERE IS NO DISPUTE WITH RESPECT TO THE TOTAL VALUE OF CREDITS IN THE ACCOUNTS OF TW O CONCERNS WHICH WAS CLAIMED WRONGLY WHILE SUBMITTING DETAILS OF PURCHAS ES. THUS, THE LD. CIT(A) FOUND THAT THESE CREDITS REPRESENTING RS. 1,20,53,3 45/- AND RS. 79,61,950/- IN THE ACCOUNTS OF CARAT MEDIA SERVICE PVT. LTD. AN D OGLIVY & MATHER PVT. LTD. RESPECTIVELY. THE A.O. HAD CONSIDERED ADVERTISEMENT EXPENSES ONCE RS. 1,20,53,345/- AS TOTAL OF CREDITS SHOWN INITIALLY A S PURCHASES AND AGAIN RS. 1,06,56,223/-(HOWEVER AS PER LD CIT(A) THE CORRECT AMOUNT IS RS. 1,07,50,844/- ) AS ACTUAL EXPENSES INCURRED ON ADVE RTISEMENT, AND COMPARED THE SAME WITH THE DETAILS SUBMITTED BY CARAT MEDIA SERVICES PRIVATE LIMITED. SIMILARLY, THE A.O. CONSIDERED TWICE THE ADVERTISEM ENT EXPENSES AND LEGAL EXPENSES ONCE RS. 79,61,950/- AS TOTAL CREDITS AND AGAIN RS. 33,24,000/- AND RS. 22,39,000/- INCURRED RESPECTIVELY AS ADVERTISEM ENT EXPENSES AND LEGAL EXPENSES, AND COMPARED THE SAME WITH THE DETAILS SU BMITTED BY O & M. THE LD. CIT(A) OBSERVED THAT THE AO OBSERVATION IN PARA 2 ON PAGE 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SUBMITTED TH E REVISED STATEMENT OF PURCHASES ADJUSTING THE MISCELLANEOUS PURCHASES BEL OW 3.00 LACS TO RS.3,05,24,980 AND STILL AN AMOUNT OF RS.24,77,981/ - IS SHOWN AS PURCHASE FROM CARAT MEDIA SERVICES PRIVATE LIMITED IS NOT DI SCERNIBLE FROM RECORD. FURTHER, IT WAS OBSERVED BY LEARNED CIT(A) THAT THE OBSERVATION OF THE AO THAT THE ASSESSEE HAS ENTERED BOGUS ENTRY UNDER THE HEAD PURCHASES IN ORDER TO REDUCE ITS TAXABLE INCOME IS NOT CORRECT WHEN THE A O HAS NOT DISPUTED THE TOTAL PURCHASES SHOWN IN THE CORRECTED DETAILS AND THOSE DEBITED TO THE PROFIT ITA 2541/MUM/2010 7 AND LOSS ACCOUNT WHICH ARE SAME. THUS, THE A.O. HA D TREATED THE SUM OF RS. 82,02,601/- AND RS. 71,67,764/- AS BOGUS PURCHASES WHEN IT WAS NOT ACTUALLY CLAIMED AS PURCHASES AND NO SUCH ITEMS WER E DEBITED TO THE PROFIT AND LOSS ACCOUNT WHICH ARE SAME. IT WAS OBSERVED B Y THE LEARNED CIT(A) THAT THE AO HAS NO BASIS TO TREAT THEM AS BOGUS ENTITIES OR PURCHASES IN ORDER TO REDUCE TAXABLE INCOME . THE LD. CIT(A) HELD THAT TH E A.O. HAS NO BASIS TO TREAT THAT THESE ARE BOGUS ENTRIES OR PURCHASES TO REDUCE THE TAXABLE INCOME OF THE ASSESSEE AND ACCORDINGLY THE ADDITIONS OF RS.82,02, 601 AND RS.71,67,764/- WERE DELETED BY THE LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 19-01-2010. 7. AGGRIEVED BY THE APPELLATE ORDER DATED 19-01-201 0 OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. D.R. SUBMITTED THAT THE ASSESSEE IS A MA NUFACTURER OF NON-STICK COOK WARES, PRESSURE COOKERS AND MIXER GRINDERS. TH E ASSESSEE HAS FOUR MANUFACTURING UNITS OUT OF WHICH THREE ARE SITUATED AT DAMAN AND ONE IS SITUATED AT BADDI, HIMACHAL PRADESH. THE ASSESSEE H AD INCURRED EXPENSES WHICH IS PAYABLE TO CARAT MEDIA SERVICES P. LTD. AN D M/S OGLIVY & MATHER P. LTD. WHICH HAS NOT BEEN SUBSTANTIATED BY THE ASSESS EE PROPERLY. THE LD DR SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED ITS BO OKS OF ACCOUNTS AND PURCHASE BILLS BEFORE THE AUTHORITIES BELOW FOR VER IFICATION. THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT FORWARDING THE MATTER TO THE AO FOR VERIFIC ATION OF THE CLAIM OF THE ASSESSEE AND WITHOUT ASKING ASSESSEE TO PRODUCE BOO KS OF ACCOUNTS AND PURCHASE INVOICES FOR VERIFICATION. FOR THE PURPOSE OF VERIFICATION, THE MATTER MAY BE SENT BACK TO THE FILE OF THE A,O. 9. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT NOTICES U/S 133(6) WERE ISSUED TO THE TWO PARTIES I .E. M/S CARAT MEDIA SERVICE PVT. LTD. AND M/S OGLIVY & MATHER PVT. LTD. ASKING THE DETAILS OF THE SERVICES RENDERED TO THE ASSESSEE , STATEMENT OF ACCOUNT AN D OTHER RELEVANT DETAILS. ITA 2541/MUM/2010 8 THE SAID CONCERNS HAD GIVEN THE REPLIES DIRECTLY TO THE AO BUT THE SAME WERE NOT FORWARDED TO THE ASSESSEE FOR COMMENTS AND HENC E THE ASSESSEE IS PREJUDICED BY THE USE OF SUCH MATERIAL COLLECTED BY THE AO AT ITS BACK WHICH WAS NOT CONFRONTED TO THE ASSESSEE BEFORE USING THE SAID MATERIAL AGAINST THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT IF OPPORT UNITY IS GIVEN, THE ASSESSEE WILL BE ABLE TO RECONCILE THE DIFFERENCES IN THE AC COUNTS OF THESE TWO CONCERNS. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ISS UE IN THE APPEAL IS IN CONTEXT OF DIFFERENCES IN ACCOUNT BALANCE WITH RESP ECT TO EXPENSES INCURRED BY THE ASSESSEE ON ACCOUNT OF ADVERTISEMENT, LEGAL AND PROFESSIONAL CHARGES AND PURCHASES MADE FROM TWO PARTIES NAMELY M/S CARAT ME DIA SERVICE PVT. LTD. AND M/S OGLIVY & MATHER PVT. LTD. AS ARE REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE VIS--VIS IN THE BOOKS OF ACCOUNTS OF THE TWO PARTIES . THE ASSESSEE WAS ASKED TO EXPLAIN THE SAID DIFFERANCES. THE A.O. ISSUED NOTICES U/S 133(6) OF THE ACT TO THE TWO PARTIES I.E. M/S C ARAT MEDIA SERVICE PVT. LTD. AND M/S OGLIVY & MATHER PVT. LTD. ASKING INFORMATIO N REGARDING THE SERVICES RENDERED TO THE ASSESSEE. THE INFORMATION WERE REC EIVED BY THE AO BUT THE INFORMATION OBTAINED BY THE AO FROM THESE TWO PARTI ES WERE NOT FORWARDED/CONFRONTED TO THE ASSESSEE FOR COMMENTS A ND REBUTTAL.THE ASSESSEE WAS PREJUDICED BY THE ACTION OF THE AO AS THE SAID INFORMATION WAS USED AGAINST THE ASSESSEE BY THE AO WITHOUT CONFRON TING THE SAME TO THE ASSESSEE. THE ASSESSEE ON ITS PART HAD ALSO FAILED TO PRODUCE ITS BOOKS OF ACCOUNTS AND PURCHASE BILLS BEFORE THE AO FOR VERIF ICATION. THESE BOOKS OF ACCOUNTS AS WELL PURCHASE INVOICES WERE NOT EVEN PR ODUCED BY THE ASSESSEE BEFORE THE LEARNED CIT(A). IN OUR CONSIDERED VIEW A ND IN THE INTEREST OF JUSTICE, WE ARE INCLINED TO RESTORE THE MATTER TO THE FILE OF THE A.O. TO DE-NOVO DECIDE THE ISSUES ON MERITS AND HENCE WE SET ASIDE THE OR DER OF LEARNED CIT(A). THE A.O. SHALL FORWARD TO THE ASSESSEE ALL THE INFORMAT ION WHICH WAS OBTAINED BY THE AO IN PURSUANCE OF NOTICES ISSUED U/S 133(6) TO THESE TWO PARTIES NAMELY ITA 2541/MUM/2010 9 M/S. CARAT MEDIA SERVICE PRIVATE LIMITED AND M/S OG ILVY AND MATHER PRIVATE LIMITED. THE ASSESSEE IS DIRECTED TO PRODUCE ALL T HE RELEVANT EVIDENCES AND EXPLANATIONS BEFORE THE AO IN ITS DEFENSE TO JUSTIF Y AND DEFEND ITS CLAIMS AND CONTENTIONS TO RECONCILE THE DIFFERENCE. NEEDLESS TO SAY PROPER AND ADEQUATE OPPORTUNITY OF HEARING SHALL BE GRANTED BY THE AO T O THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN AC CORDANCE WITH LAW. WE ORDER ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA N0. 2541/MUM/2010 FOR THE ASSESSMENT YEAR 2006-07 IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST , 2016. # $% &' 24-08-2016 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 24-08-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI