Income Tax Officer, New Delhi V. Sound of Music India (p) Ltd., New Delhi

ITA 3031/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9881 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-07-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 03-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM BATRA
• Assessee Lawyers: LALITHA KRISHNAMURTHY
• Keywords: Unexplained investment; Depreciation; Search and seizure; Loose papers
• Section: 40A(3); 244A; 234B

Judgement Text

ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BECHES : G NEW DELHI BEFORE SHRI DEEPAK R. SHAH, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 986/ DEL/ 08 ASSTT. YEAR : 2004-05 SOUND OF MUSIC (INDIA) PVT. LTD. VS. INCOME TAX OFFICER COY. WARD 9(1), 106, 2 ND FLOOR, NEW MAUGLAPURI NEW DELHI MEHRAULI, GURGAON ROAD, NEW DELHI 110 030 ITA NO. 3031/DEL/2008 ASSTT. YEAR : 2006-07 INCOME TAX OFFICER, COY WARD 9(1), VS. SOUND OF MUSIC (INDIA) PVT. LTD. ROOM NO. 190, CR BUILDING, NEW 106, 2 ND FLOOR, NEW MAUGLAPURI DELHI. MEHRAULI, GURGAON ROAD, NEW DELHI 110 030 & C.O. NO. 100/DEL/2009 (IN ITA NO. 3031/DEL/2008) ASSTT. YEAR : 2006-07 SOUND OF MUSIC (INDIA) PVT. LTD. VS. INCOME TAX O FFICER COY. WARD 9(1), 106, 2 ND FLOOR, NEW MAUGLAPURI ROOM NO. 190, CR BUILDING, MEHRAULI, GURGAON ROAD, NEW DELHI NEW DELHI 110 030 (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. LALITHA KRISHNAMURTHY, CA DEPARTMENT BY : SHRI VIKRAM BATRA, SR. DR ORDER PER GEORGE MATHAN, JUDICIAL MEMBER THE ITA NO. 986/DEL/08 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-XII, NEW DELHI PASSED IN APPEAL NO. 1 29/06-07 DATED 14.1.2008 FOR THE ASSESSMENT YEAR 2004-05; THE ITA NO. 3031/DEL/0 8 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-XII, NEW DE LHI PASSED IN APPEAL NO. 3/08- ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 2 09 DATED 2.7.2008 FOR THE ASSESSMENT YEAR 2006-07 A ND CROSS OBJECTION NO. 100/DEL/2009 IS FILED BY THE ASSESSEE IN ITA NO. 30 31/D/08 AGAINST THE ORDER OF THE CIT(A)-XII, NEW DELHI IN APPEAL NO. 3/08-09 DAT ED 2.7.2008 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI LALITHA KRISHNAMURTY, CA REPRESENTED ON BEH ALF OF THE ASSESSEE AND SHRI VIKRAM BATRA, SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IN ITA NO. 986/DEL/08, THE ASSESSEE HAS RAISED T HE FOLLOWING 10 GROUNDS:- 1. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD E RRED IN SUSTAINING THE ADDITION OF RS. 1,96,000/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI ANKUSH SALUJA. THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ES TIMATE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT (CONCEPT AND PROMOTION) THE ADDITION, I F AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. 2. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ERRED IN SUSTAINING THE ADDITION OF RS. 3,84,000/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI UDAY SINGH. THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ES TIMATE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT THE ADDITION, IF AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. 3. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ER RED IN SUSTAINING THE ADDITION OF RS. 1,80,000/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI JAGOTA. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 3 THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ESTIMA TE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT THE ADDITION, IF AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. THE LD. COMMISSIONER HAD WRONGLY HELD THAT THE CO NFIRMATION OF JAGOTA HAD NO EVIDENTIARY VALUE. 4. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ER RED IN SUSTAINING THE ADDITION OF RS. 1,00,000/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI KAMAL PASSI. THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ES TIMATE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT THE ADDITION, IF AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. 5. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ER RED IN SUSTAINING THE ADDITION OF RS. 3,63,123/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI UDAY SINGH. THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ES TIMATE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT THE ADDITION, IF AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. 6. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ER RED IN SUSTAINING THE ADDITION OF RS. 2,30,000/- MADE BY THE LD. ASSESSING OFFICER IN RESPECT OF THE FUNCTION OF SHRI RAGHAV. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 4 THE ACTION OF THE LD. ASSESSING OFFICER HAD BEEN C ONFIRMED BY HIM WITHOUT ANY DISCUSSION AND WITHOUT ASSIGNING ANY INDEPENDENT RE ASON. THE SUBMISSION OF THE APPELLANT THAT THE RELEVANT DOCUMENT WAS AN ES TIMATE HAD BEEN IGNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD I GNORED THE PLEA, MADE WITHOUT PREJUDICE TO THE ABOVE, THAT SINCE THE ADDI TION RELATED TO EVENT MANAGEMENT THE ADDITION, IF AT ALL, COULD HAVE BEEN SUSTAINED ONLY TO THE EXTENT OF THE GP RATIO OF THE APPELLANT FOR THAT YEAR. THE LD. COMMISSIONER HAD WRONGLY HELD THAT THE CO NFIRMATION OF RAGHAV HAD NO EVIDENTIARY VALUE. 7. THE LD. COMMISSIONER INCOME TAX (APPEALS) HAD ER RED IN NOT DIRECTING THE LD. ASSESSING OFFICER TO GRANT DEPRECATION AFTER HOLDIN G THAT THE SUM OF RS. 5,41,000/- WAS CAPITAL IN NATURE. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD IG NORED THE ALTERNATIVE PLEA, WITHOUT PREJUDICE TO THE OTHER GROUNDS, THAT THERE CANNOT BE DUAL ADDITION. 8. THAT THE EXPENDITURE OF RS. 1,61,124/- BEING REV ENUE IN NATURE, DULY VOUCHED AND VERIFIABLE SHOULD HAVE BEEN ALLOWED. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSION ER OF INCOME TAX (APPEALS) HAD ERRED IN NOT DIRECTING THE LD. ASSESSING OFFICE R TO GRANT DEPRECIATION AFTER HOLDING THAT THE SUM OF RS. 1,61,124/- WAS CAPITAL IN NATURE. 9. THE CHARGE OF INTEREST UNDER SECTION 234B OF RS. 2,90,585/-, 234D OF RS. 2,722/- AND WITHDRAWAL OF INTEREST UNDER SECTION 244A OF RS . 1,185/- IS NOT SUSTAINABLE. 10. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT P REJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITH DRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. IT WAS SUBMITTED BY THE LD. AR THAT THERE WAS A S URVEY ON THE PREMISES OF THE ASSESSEE ON 14.12.2004. IT WAS SUBMITTED THAT THE ASSESSEE IS A COMPANY WHICH IS IN THE BUSINESS OF EVENT MANAGEMENT. IT WAS FURTHER SUBMITTED THAT THE CLIENTS OF THE ASSESSEE USE TO DISCUSS THE BUDGET O F THE EVENT OVER AND OVER AGAIN AND THE ASSESSEE USED TO PREPARE THE BUDGETS ON BEH ALF OF THE CLIENTS AFTER DISCUSSION. IT WAS SUBMITTED THAT VARIOUS ESTIMATES ARE PREPARED AND AFTER ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 5 DISCUSSION WITH THE CLIENTS, THE CLIENTS SOMETIMES ENGAGED THE ASSESSEE FOR CERTAIN PORTION OF THE JOBS IN THE EVENT DEPENDING U PON THE COST AND THE ESTIMATES MADE. 5. IT WAS SUBMITTED THAT IN THE COURSE OF SURVEY A NUMBER OF SUCH ESTIMATES AND WORKINGS HAD BEEN FOUND AND ON THE BASIS OF THE MATERIALS IMPOUNDED AND THE INFORMATION OBTAINED BY THE ASSESSING OFFICER A S A CONSEQUENCE OF THE SURVEY, THE ASSESSING OFFICER MADE VARIOUS ADDITIONS IN REG ARD TO THE VARIOUS EVENTS MANAGED BY THE ASSESSEE FOR VARIOUS CLIENTS HOLDING THAT THE ASSESSEE HAD RECEIVED AMOUNTS IN CASH WHICH WERE NOT REFLECTED I N THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER HAS MADE THE ADDI TION ON ACCOUNT OF NEARLY 10 PERSONS. IT WAS SUBMITTED BY THE LD. AR THAT THE REVENUE DID NOT HAVE ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAD RECEIVED ANY CASH WHICH HAD NOT BEEN ACCOUNTED IN THE BOOKS OF ACCOUNT. IT WAS SUBMITTE D THAT EVIDENCES WHICH WERE BEING RELIED UPON BY THE ASSESSING OFFICER AND WHIC H WAS SHOWN AT PAGES 10 TO 52 OF THE PAPER BOOK WERE BASICALLY THE ESTIMATES WH ICH HAD BEEN DRAWN UP. IT WAS SUBMITTED THAT IN THE CASE OF SHRI RAGHAV WHICH HAD RESULTED AN ADDITION OF RS. 2,30,000/- AND IN REGARD TO WHICH THE ASSESSING OFFICER HAD DISCUSSED THE ADDITION IN PAGE 6 PARA 11, NO FUNCTION AT ALL WAS CONDUCTED BY THE ASSESSEE. THE AR FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE 45 O F THE PAPER BOOK WHICH WAS THE COPY OF THE CERTIFICATE OF SHRI RAGHAV SHARMA CONFIRMING THAT THE WORK HAD NOT BEEN DONE BY THE ASSESSEE AS THEIR QUOTATIONS W ERE FOUND TO BE HIGHER. IT WAS SUBMITTED THAT AS ALL THE EVIDENCES WHICH WERE RELIED UPON BY THE ASSESSING OFFICER FOR MAKING THE ADDITION WERE PURELY ESTIMAT ES AND NO EVIDENCES HAD BEEN FOUND TO SHOW THAT THE ASSESSEE HAD RECEIVED CA SH IN EXCESS OF THE AMOUNT ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 6 BILLED TO THE RESPECTIVE CLIENTS, NO ADDITION AS M ADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) WAS LIABLE TO BE CONFIRMED. IT WAS AN ALTERNATE SUBMISSION OF THE LD. AR THAT IT WAS ONLY THE GP WH ICH CAN BE ADDED. THE LD. AR DREW OUR ATTENTION OF PAGE 53 OF THE PAPER BOOK WH ICH WAS THE COPY OF THE STATEMENT OF GP FOR ASSESSMENT YEAR 2004-05 WHICH S HOWED THE GP AT 54% . 6. IN REPLY THE LD. DR FOR THE REVENUE SUBMITTED TH AT THE PAPERS WERE FOUND AT THE PREMISES OF THE ASSESSEE IN THE COURSE OF SURVE Y AND AS PER THE PROVISION SECTION 292C, THE PRESUMPTION WAS THAT THE PAPERS BELONG TO THE ASSESSEE AND IT WAS THE ONUS OF THE ASSESSEE TO SUBSTANTIATE THE E NTRIES AS FOUND IN THE PAPERS. IT WAS SUBMITTED THAT IF THE PAPERS FOUND WERE ON LY ESTIMATES, IT WAS NOT SHOWN AS TO WHY THERE WAS ONLY ONE ESTIMATE. IN COMPA RISON OF THE VARIOUS EVIDENCES FOUND IN RESPECT OF THE VARIOUS EVENTS CONDUCTED BY THE ASSESSEE CLEARLY SHOW THAT THE ASSESSEE WAS IN THE HABIT OF TAKING CASH O VER AND ABOVE THE CHEQUE AMOUNT. IT WAS SUBMITTED THAT THE EVIDENCE FOUND SHOWED OF ADVANCES HAVING BEEN RECEIVED IN CASH AND SUCH ADVANCES WAS NOT SHO WN IN THE CONCERNED LEDGER ACCOUNT. IT WAS FURTHER SUBMITTED THAT IT IS ONLY WHEN THE ASSESSEE WAS CAUGHT WITH THE EVIDENCES AND THAT THE ASSESSEE HAS TURNED TO SAY THAT THE ASSESSEE HAS ONLY DONE PART OF THE WORK FOR WHICH THE QUOTATIONS WERE GIVEN BY THE ASSESSEE AND ADVANCE RECEIVED. IT WAS SUBMITTED THAT THE FI NDING OF THE LD. CIT(A) ON THIS ISSUE WAS LIABLE TO BE UPHELD. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 8. A PERUSAL OF THE SEIZED MATERIAL CLEARLY SHOW TH AT THE ASSESSEE HAS BEEN DRAWING ESTIMATES. THE IMPOUNDED MATERIALS WHICH WERE FOUND AS PER THE PAPER BOOK ALSO CLEARLY SAYS THAT THE ASSESSEE HAS RECEIV ED ADVANCES. A PERUSAL OF THE ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 7 IMPOUNDED MATERIALS AS AVAILABLE IN RELATION TO SHR I RAGHAV WHICH WAS FOUND AT PAGES 35 TO 44 AND THE CERTIFICATE OF SHRI RAGHAV AT PAGE 45 GIVES A CLEAR PICTURE OF THE VARIOUS ACTIVITIES OF THE ASSESSEE. AT PAG E 35 IS THE DRAWING OF THE STAGE AND THE DIMENSIONS, AT PAGE 36 IS THE VARIOUS TH EMES THAT ARE BEING DISCUSSED LIKE JARDOSI THEME, JEWELLERY THEME. AT PAGE 37 IS A N ESTIMATE FOR THE LOTUS LONG THEME AND THE OPTIONAL ABSTRACT THEME, AT PAGE 38 IS THE FURTHER DRAWING OF THE STAGE, THE FOOD COUNTERS, AT PAGE 39 IS THE SERVI CES WHICH ARE TO BE PROVIDED, PAGE 40 IS DESIGN OF TENT, PAGE 41 IS A BLANK PAPER , PAGE 42 IS A CLIENTS NAME AND ADDRESS AND PHONE NOS., PAGE 43 IS ACCOUNT DETAILS OF THE SERVICES, AGAIN REPEATED AT PAGE 44 AND PAGE 45 IS THE CERTIFICATE OF SHRI RAGHAV CONFIRMING THAT THE ASSESSEE HAD NOT BEEN ENGAGED FOR THE WEDDING. THE CONSPICUOUS PART OF THESE EVIDENCES IS THAT NONE OF THESE ESTIMATES IN REGARD TO SHRI RAGHAV IS THERE ANY QUANTIFICATION OR ANY DISCUSSION OF PAYMENT OF ADVA NCE OR A PAYMENT PLAN WHICH ARE CONSPICUOUS BY THEIR PRESENCE IN ALL OTHER CAS ES, THE EVIDENCE FOUND AT PAGES 10 TO 34 OF THE PAPER BOOK. PAGE 10 TO 14 IS IN REL ATION TO MR. SALUJA; PAGE 10 TALKS DETAILS OF RS. 4.50 LACS AND ADVANCE OF RS. 2 LAC S TO SONY; AND RS. 1 LAC TO MALIK TENT; PAGE 12 TALKS OF RS. 2 LACS HAVING BEEN RECEI VED; PAGE 13 TALKS OF THE CHEQUE PAYMENTS. IN REGARD TO THE FUNCTION OF SHRI UDAY SINGH ALSO THE VARIOUS DETAILS ARE AT PAGE 15 AND 16 AND THE DETAILS OF THE PAYMEN T BY CHEQUE IS AT PAGE 17 & 18. 9. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS RIGHT IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS BEEN RECEIVING CASH OVER AND ABOVE THE CHEQUE PAYMENTS ON THE BASIS OF QUOTA TIONS MADE BY THE ASSESSEE. HOWEVER, CONSIDERING THE FACT THAT SHRI RAGHAV SHAR MA HAS SPECIFICALLY GIVEN A ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 8 CONFIRMATION THAT THE ASSESSEE HAS NOT DONE THE WOR K FOR SHRI RAGHAV SHARMA AS ALSO ON PERUSAL OF THE EVIDENCES FOUND IN REGARD TO SHRI RAGHAV SHARMA SHOWS THAT NO ADVANCE HAS BEEN CALCULATED NOR ANY BREAK-U P OF THE EXPENSES HAS BEEN SHOWN TO HAVE BEEN INCURRED, THE ADDITION MADE ON A CCOUNT OF SHRI RAGHAV SHARMA IS LIABLE TO BE DELETED AND WE HOLD SO. 10. IN REGARD TO OTHER EVENTS WHICH ARE BEING MANA GED BY THE ASSESSEE WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(A) AN D THE AO FOR MAKING THE ADDITIONS ARE RIGHT. HOWEVER, A PERUSAL OF THE EVI DENCE ON THE BASIS OF WHICH THE ADDITIONS HAVE BEEN MADE CLEARLY SHOWS THAT THE C HARGES INCLUDE THE CHARGES PAYABLE TO THE TENT PROVIDER, FURNITURE PROVIDER, T HE LIGHTING PROVIDER ETC. IN THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE TOTAL REC EIPT IS THE INCOME OF THE ASSESSEE. IT IS ALSO NOTICED THAT THE ASSESSEE IS UNABLE TO PLACE BEFORE US THE DETAILS OF THE PAYMENT WHICH HAVE BEEN MADE BY THE ASSESSEE OUT OF THE RECEIPTS WHICH HAVE BEEN RECEIVED. IN THE CIRCUMSTANCES, W E ARE OF THE VIEW THAT ONLY THE PROFITS EMBODIED IN THE RECEIPTS CAN BE BRO UGHT TO TAX. 11. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT 5 4% OF THE TOTAL RECEIPTS WHICH HAVE BEEN ADDED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) ON THIS COUNT IS LIABLE TO BE TREATED AS THE INCOME OF THE ASSESSEE AND WE HOLD SO. IN THE CIRCUMSTANCES THE ASSESSING OFFICER IS DIREC TED TO TREAT 54% AS THE GP OF THE ADDITION MADE AND CONFIRMED IN REGARD TO THE CA SH TRANSACTIONS ENTERED INTO BY THE ASSESSEE ON THE EVENTS IN REGARD TO WHICH TH E ASSESSING OFFICER HAS FOUND THE EVIDENCES IN THE COURSE OF SURVEY AND HAS MADE THE ADDITION. THE ASSESSING OFFICER IS ALSO DIRECTED TO DELETE THE ADDITION MA DE ON ACCOUNT OF SHRI RAGHAV, ESPECIALLY IN VIEW OF THE FACT THAT SHRI RAGHAV HAS CONFIRMED THAT THE EVENTS WERE ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 9 NOT MANAGED BY THE ASSESSEE AND AS THERE IS NO EVID ENCE FOUND TO SHOW THAT THE ASSESSEE HAD RECEIVED ANY PAYMENT ON ACCOUNT OF THE EVENTS OF SHRI RAGHAV. 12. IN THE CIRCUMSTANCES GROUND NO. 1 TO 6 OF THE A SSESSEES APPEAL ARE PARTLY ALLOWED. 13. IN REGARD TO GROUND NO. 7 AND 8 IT WAS SUBMITTE D THAT DEPRECIATION HAS BEEN GRANTED TO THE ASSESSEE. HOWEVER, THE ISSUE OF TELESCOPING REMAINED. THE LD. AR REITERATED HER SUBMISSIONS BEFORE THE LD. C IT(A). 14. IT IS NOTICED THAT THE ASSESSING OFFICER HAS C OME TO THE CONCLUSION THAT THE ASSESSEE HAS MADE A PAYMENT OF RS. 5,41,000/- TOWAR DS THE RENOVATION OF THE OFFICE BUILDING AS THE UNEXPLAINED INVESTMENT OF TH E ASSESSEE. IT IS FURTHER NOTICED THAT THE EVIDENCE ON ACCOUNT OF THIS PAYMEN T IN CASH HAS BEEN FOUND IN THE COURSE OF SURVEY. UNDISPUTEDLY, THE EVIDENCES FOUND IN THE COURSE OF SURVEY ALSO SHOW THAT THE ASSESSEE HAS BEEN IN THE HABIT OF TAKING CASH PAYMENTS TOWARDS THE SERVICE CHARGES. WE HAVE ALSO HELD TH AT THE 54% OF THE ADDITIONS ON SUCH ACCOUNT IS TO BE TREATED AS GP AND TO BE BROUG HT TO TAX AND NOT THE TOTAL RECEIPTS. AS IT IS FOUND THAT THE ASSESSEE IS IN THE HABIT OF DEALING IN CASH THE EXPENDITURE IN REGARD TO RS. 5,41,000/- SHOULD BE DEEMED TO HAVE BEEN INCURRED OUT OF THE SAID CASH TRANSACTIONS, THE GP OF WHICH HAS BEEN DIRECTED TO BE ADDED. 15. IN THE CIRCUMSTANCES THE ASSESSING OFFICER IS D IRECTED TO TELESCOPE THIS ADDITION OF RS. 5,41,000/- INTO THE GP ADDITION ON ACCOUNT OF CASH TRANSACTION IN THE EVENT MANAGEMENT TO THE EXTENT OF THE GP ADDITI ON AS AVAILABLE. 16. THE GROUND NO. 9 IS AGAINST LEVY OF INTEREST A ND IT IS FOUND THAT THE LEVY OF INTEREST IS CONSEQUENTIAL. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 10 17. IN THE CIRCUMSTANCES THE ITA NO. 986/DEL/2008 F ILED BY THE ASSESSEE IS PARTLY ALLOWED. 18. IN ITA NO. 3031/DEL/08, THE REVENUE HAS RAISED THE FOLLOWING 3 GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD. CIT(A) ERRED IN LAW AND ON FACTS IN RESTRAINING THE ADDITION OF RS. 15,00,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED ADMITTED INCOME OF THE AS SESSEE TO RS. 1,63,000/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,05,616/- MA DE BY THE ASSESSING OFFICER UNDER SECTION 40A(3) OF THE INCOME TAX ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 20,000/- MADE BY THE ASSESSING OFFICER OUT OF WATER ELECTRICITY AND TELEPHONE ON ACCOUNT O F THE SHARING OF OFFICE BY THE ASSOCIATE COMPANY. 19. IN REGARD TO GROUND NO. 1, THIS IS AGAINST THE ACTION OF THE CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF THE DECLARATION MADE BY THE ASSESSEE IN THE COURSE OF SURVEY. 20. IT IS SUBMITTED BY THE LD. DR THAT THERE WAS A SURVEY IN THE BUSINESS PREMISES OF THE ASSESSEE ON 23.12.2005 AND IN THE S TATEMENT RECORDED IN THE COURSE OF SURVEY THE DIRECTOR OF THE ASSESSEE COMPA NY HAD MADE A DECLARATION OF RS. 15 LACS. IT WAS SUBMITTED THAT AT THE TIME OF F ILING OF THE RETURN THE ASSESSEE HAS RETRACTED FROM THE SAID DECLARATION. IT WAS S UBMITTED THAT THE AO HAS ON THE BASIS OF DECLARATION GIVEN BY THE DIRECTOR HE MADE THE ADDITION OF RS. 15 LACS. IT WAS SUBMITTED THAT DISCREPANCIES OF RS. 1,60,000/ - HAS ALSO BEEN SHOWN BY THE ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 11 ASSESSING AUTHORITY IN REGARD TO THE ACCOUNTS OF TH E ASSESSEE AND CONSIDERING THE DISCREPANCIES THE ASSESSING OFFICER HAD MADE THE AD DITION OF RS. 15,00,000/- AS OFFERED BY THE DIRECTOR OF THE ASSESSEE COMPANY IN THE SWORN STATEMENT AS ALSO THE HISTORY OF THE ASSESSEE COMPANY IN SUPPRESSION OF ITS INCOME. IT WAS SUBMITTED THAT THE CIT(A) ERRED IN DELETING THE AD DITION. 21. IN REPLY, THE LD. AR SUBMITTED THAT NO EVIDENCE HAD BEEN FOUND IN THE COURSE OF THE SURVEY TO MAKE THE ADDITION OF RS. 15 LACS. IT WAS SUBMITTED THAT STATEMENT RECORDED IN THE COURSE OF SURVEY DID NOT HAVE ANY EVIDENTIARY VALUE. IT WAS FURTHER SUBMITTED THAT IN THE COURSE OF SURVE Y NO CORROBORATIVE OR CREDIBLE MATERIAL EVIDENCE HAVE BEEN FOUND WHICH COULD GIVE RISE TO THE ADDITION OF RS. 15 LACS, CONSEQUENTLY, THE CIT(A) WAS RIGHTLY IN LAW I N DELETING THE SAID ADDITION. HE FURTHER SUBMITTED THAT IN THE CROSS OBJECTION AS FIL ED BY THE ASSESSEE, THE ASSESSEE HAS CHALLENGED THE ADDITION CONFIRMED TO THE EXTENT OF RS. 1.63 LACS. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 23. IT IS NOTICED FROM THE ASSESSMENT ORDER THAT T HE ASSESSING AUTHORITY HAS MADE THE ADDITION OF RS. 15 LACS ON THE GROUND THAT THE DIRECTOR OF THE ASSESSEE COMPANY HAD IN THE COURSE OF SURVEY ADMITTED SOME D ISCREPANCIES BETWEEN THE BOOKINGS MADE AND THE BOOKS OF ACCOUNT AND HAD SURR ENDERED THE ADDITIONAL ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 12 INCOME OF RS. 15 LACS AND AGREED TO PAY THE TAX T HEREON. ON PERUSAL OF THE STATEMENT RECORDED IN THE COURSE OF SURVEY FROM THE SAID DIRECTOR ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE ALSO CLEARLY SHOW S THAT NO SPECIFIC DISCREPANCY HAS BEEN POINTED OUT TO WHICH COULD GIV E RISE TO ADDITION OF RS. 15 LACS. IT IS ALSO NOTICED THAT ONCE THE DECLARATION OF RS. 15 LACS HAVE BEEN OBTAINED FROM THE DIRECTOR, NO FURTHER EXAMINATION HAS BEEN CONTINUED AND PAYMENT OF THE TAXES BY CHEQUES HAVE BEEN TAKEN AND THE STATE MENT CLOSED. CLEARLY THE STATEMENT RECORDED SHOWS THAT THE SURVEY WAS CONDUC TED ONLY FOR THE PURPOSE OF TAKING A DECLARATION FOR RS. 15 LACS. IT IS FURT HER NOTICED THAT LD. CIT(A) HAS CONSIDERED THE CIRCULAR ISSUED BY THE CBDT, WHEREIN IT HAS BEEN CLEARLY CLARIFIED THAT OBTAINING OF CONFESSION/ SURRENDER DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION, IF NOT BASED ON CORROBORATIV E / COLLATED CREDIBLE MATERIAL EVIDENCE ETC. COULD NOT BE MADE. IT IS NOTICED T HAT NO EVIDENCE HAS BEEN FOUND IN THE COURSE OF SURVEY NOR THE REVENUE HAS BEE N ABLE TO PLACE BEFORE US ANY EVIDENCE WHICH HAD BEEN FOUND IN THE COURSE OF SURV EY CONDUCTED ON 23.12.2005 WHICH COULD SUSTAIN THE ADDITION OF RS. 15 LACS. 24. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT CIT(A) HAS DELETED THE SAID ADDITION ON THE RIGHT FOOTING AND NO INFERENCE IS CALLED FOR. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 13 25. IN REGARD TO GROUND NO. 2, IT IS SUBMITTED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SE CTION 40A(3) OF THE INCOME TAX ACT ON ACCOUNT OF PURCHASE OF FLOWERS. IT W AS SUBMITTED THAT THE LD. CIT(A) ERRED IN INTERPRETING THE PROVISIONS OF RULE 6DD( F) OF THE IT RULES IN SO FAR AS THE SAID PROVISIONS PROVIDED FOR THE PAYMENT MADE FOR T HE PURCHASE OF AGRICULTURAL OR FOREST PRODUCE FROM THE AGRICULTURISTS OR THE PROD UCER OF SUCH ARTICLES PRODUCED. IT WAS SUBMITTED THAT THE FINDING OF THE LD. CIT(A) WAS LIABLE TO THE REVERSED. 26. IN REPLY THE LD. AR SUBMITTED THAT THE ASSESSE E USED TO BUY FLOWERS FROM THE VENDORS IN THE OPEN MARKET. IT WAS SUBMITTED T HAT AS THE FLOWERS WERE PERISHABLE COMMODITIES, THE VENDORS WERE NOT WILLIN G TO ACCEPT THE CHEQUE PAYMENT. IT IS SUBMITTED THAT THE ASSESSEE COULD NOT KEEP STOCKS OF THE FLOWERS AS THEY WERE PERISHABLE COMMODITIES AND THE ASSESSE E COULD ALSO NOT PRE- DETERMINED THE CLIENTS OF THE FLOWERS THAT WOULD BE REQUIRED ON ANY PARTICULAR DATE. IT WAS FURTHER SUBMITTED THAT THE FLOWERS AR E SOLD BY THE AGENTS OF THE AGRICULTURISTS IN THE OPEN MANDI NEAR CONNAUGHT PLA CE AND THE MANDI OPENS EVERYDAY AT 5.00 AM TO 7.30 AM AND AFTER THAT THE M ANDI CLOSES. IT WAS FURTHER SUBMITTED THAT THE SELLERS AT THE MANDI DID NOT MAI NTAIN ANY BILLS OR CASH MEMOS AND THEY NEITHER WOULD GIVE CREDIT NOR TAKE CHEQUE PAYMENTS. IT WAS ALSO ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 14 SUBMITTED THAT THE BUSINESS EXPEDIENCY REQUIRED TH E PAYMENT TO BE MADE IN CASH AS A VARIETY OF FLOWERS WERE REQUIRED TO BE PU RCHASED DEPENDING UPON THE CHOICE OF THE CLIENTS OF THE ASSESSEE AS ALSO THE A REA TO BE COVERED AND IT HAD TO BE FRESH FLOWERS AND IT HAD TO BE PURCHASED EVERY DAY. IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 40A(3) IS NOT APPLICABLE AND IN FACT THE SECOND PROVISO TO SECTION 40A(3) APPLIES ALONGWITH THE RULE 6DD(F) OF THE IT RULES. 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 28. IT IS AN ACCEPTED FACT THAT THE ASSESSEE DOES PURCHASE FLOWERS ON THE DAYS IT HAS TO EXECUTE THE EVENTS FOR WHICH IT HAS BEEN CONTRACTED. IT IS FURTHER NOTICED THAT THE FLOWERS ARE PERISHABLE COMMODITIES AND BEI NG SO NO BUSINESS MAN WOULD BE WILLING TO BE ENMESH IN ANY LEGAL LITIGATION ON ACCOUNT OF BOUNCING OF CHEQUES OR NON PAYMENT OF CONSIDERATION FOR THE PURCHASE OR SALE OF FLOWERS. OBVIOUSLY, NO SELLER OF SUCH PERISHABLE COMMODITIES WOULD BE W ILLING TO DEAL WITH THE ASSESSEE WHO IS ALSO NOT A REGULAR PURCHASER OF SU CH FLOWERS FOR ANYTHING OTHER THAN CASH. OBVIOUSLY, WHEN THE REQUIREMENT OF THE FLOWERS DEPEND UPON THE EVENT I.E. TO BE CONDUCTED, THE COLOUR, LOCATION I S MADE BY THE CLIENTS AND THE TYPE OF ARRANGEMENTS THAT HAVE BEEN DEMANDED FOR BY THE CLIENTS. NO SINGLE PERSON WOULD BE DEALING WITH ALL TYPES OF FLOWERS. OBVIOUSLY, THE ASSESSEE WOULD ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 15 HAVE TO PURCHASE VARIOUS TYPES OF FLOWERS FROM VARI OUS VENDORS. IT IS ALSO AN ACCEPTED FACT THAT THE FLOWER MANDI IN CONNAUGHT PL ACE DOES OPEN AT 5.00 AM AND CLOSES AT 7.30 AM. IT IS ALSO AN ACCEPTED FAC T THAT NO BANK FUNCTIONS DURING THE SAID TIMING. IT IS ALSO AN ACCEPTED FACT THAT THE VENDORS OF THE MANDI ARE AGRICULTURISTS OR THEIR AGENTS WOULD PREFER TO DEAL WITH THE CUSTOMERS WHO DEAL IN CASH THAN WHO DEALS IN CREDIT OR CHEQUES. 29. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION BY RELYING UPON THE PROVI SIONS OF RULES 6DD(F) IN SO FAR AS THE VENDORS ARE EITHER THE AGRICULTURISTS OR THEIR AGENTS. EVEN OTHERWISE, IN VIEW OF THE SECOND PROVISO TO SECTION 40A(3) IN VIEW OF THE BUSINESS EXPEDIENCY AND THE OTHER RELEVANT FACTOR AS ALSO NON AVAILABILITY OF THE BANKING FACILITY BETWEEN 5.00 AM TO 7.30 AM, NO DISALLOWANCE UNDER SECTION 4 0A(3) COULD BE MADE ON ACCOUNT OF THE FLOWERS PURCHASED. IT IS ALSO NOTI CED THAT THE ASSESSING OFFICER HAS CONSIDERED THE FACT THAT CASH PURCHASES ABOVE RS. 2 0,000/- IN A SINGLE DAY HAD BEEN MADE TOTALING TO RS. 5,28,079/- FOR THE YEAR. ON READING THE ABOVE PROVISIONS OF SECTION 40A(3) TALKS OF ANY CASH PURC HASES ABOVE RS. 20,000/- AND NOT THE AGGREGATE FOR A DAY. THUS, EACH PURCHASE IS TO BE CONSIDERED AND THE MULTIPLE PURCHASES WHICH ARE LESS THAN RS. 20,000/ - IN A DAY BUT AGGREGATING TO ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 16 MORE THAN RS. 20,000/- IN A DAY CANNOT BE CONSIDERE D AND OBVIOUSLY THE PROVISIONS OF SECTION 40A(3) WOULD NOT APPLY. 30. IN THE CIRCUMSTANCES ON THIS GROUND THE FINDING OF THE CIT(A) IN DELETING THE ADDITION IS SUSTAINED. 31. IN THE CIRCUMSTANCES THE GROUND NO. 2 OF THE R EVENUES APPEAL STANDS DISMISSED. 32. IN REGARD TO GROUND NO. 3 WHICH IS AGAINST THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS. 20,000/- MADE BY T HE ASSESSING OFFICER OUT OF THE WATER, ELECTRICITY AND TELEPHONE EXPENSES ON ACCOUN T OF SHARING OF THE OFFICE BY ASSOCIATE COMPANY. 33. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF TH E ASSESSING OFFICER AND THE LD. AR SUPPORTED THE ORDER OF THE CIT(A). 34. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 35. IT IS NOTICED THAT THE ASSESSING OFFICER HAS MA DE THE ADDITION OF RS. 20,000/- ON AN ADHOC BASIS ON ACCOUNT OF THE FACT THAT THE PREMISES OF THE ASSESSEE WAS BEING SHARED WITH ANY ASSOCIATE COMPANY AND IN REG ARD TO THE COMMON EXPENSES, NO AMOUNT WAS PAID BY THE ASSOCIATE COMPA NY. IT IS NOTICED THAT THE LD. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 17 CIT(A) HAS DELETED THE ADDITION MADE ON THE GROUN D THAT NO ADHOC DISALLOWANCE COULD BE MADE. IT IS ALSO NOTICED THAT THE ASSESSI NG OFFICER HAS NOT BROUGHT OUT ANY SPECIFIC COMMON EXPENSES WHICH HAVE BEEN INCURR ED, OTHER THAN MAKING A VAGUE STATEMENT IN REGARD TO POSSIBILITY OF COMMON EXPENSES BEING INCURRED. NOTHING SPECIFIC HAS BEEN SHOWN. 36. IN THE CIRCUMSTANCES THE ADHOC DISALLOWANCE AS DELETED BY THE CIT(A) IS ON A RIGHT FOOTING AND THE SAME IS UPHELD. 37. IN THE CIRCUMSTANCES THE GROUND NO. 3 OF THE R EVENUES APPEAL IS DISMISSED. 38. IN THE CIRCUMSTANCES APPEAL OF THE REVENUE BEIN G ITA NO. 3031/DEL/08 IS DISMISSED. 39. IN C.O. NO. 100/DEL/2009 (IN ITA NO. 3031/DEL/2 008) THE ASSESSEE HAS RAISED THE FOLLOWING 5 GROUNDS:- 1. THAT THE STATEMENT RECORDED ON OATH AT THE TIME OF SURVEY, IS BEYOND THE POWER CONFERRED UNDER THE STATUTE UNDER SECTION 13 3A OF THE ACT, WHICH TOO HAS BEEN RETRACTED AND RECONCILED AND CANNOT BE MADE THE BASIS OF ADDITION OF RS. 15,00,000/-. 2. THAT THE ENTRIES IN THE PERSONA APPOINTMENT DIA RY OF THE MANAGER DO NOT CONVEY ANY THING ABOUT THE TRANSACTIONS BEING TRANS FORMED INTO REALITY AND ARE DUMB DOCUMENTS AND ANY ADDITION ON THE BASIS OF SUCH DIARY, IS ARBITRARY AND BAD IN LAW. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 18 3. THAT WITHOUT PREJUDICE TO THE ABOVE, THE STATEME NT RECORDED DURING THE COURSE OF SURVEY AND THE AMOUNT OFFERED AT THE TIME OF SURVEY WAS ONLY ON ACCOUNT OF INABILITY AT THAT MOMENT TO RECONCILE TH E ENTRIES MADE IN THE PAPERS. 4. THAT IN THE ABSENCE OF ANY INCRIMINATING MATERI AL OR DOCUMENT OR UNEXPLAINED ASSET HAVING BEEN FOUND BY THE SURVEY P ARTY AT THE TIME OF SURVEY, NO ADDITION CAN BE MADE ON THE BASIS OF THE DIARY OR THE STATEMENT. 5. THAT THE LD. CIT(APPEALS) HAD ERRED IN SUSTAININ G THE ADDITION TO THE EXTENT RS. 1,63,000/- WHEN NO EVIDENCE OR MATERIAL WAS FO UND BY THE SURVEY PARTY TO PROVE AND ESTABLISH THE EXISTENCE OR EARNI NG OF SUCH INCOME IN THE HANDS OF THE ASSESSEE. 40. THE ASSESSEE HAS PRIMARILY CHALLENGED THE ACTI ON OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 1,63,000/- ON ACCOUNT OF DISCREPANCY FOUND IN THE COURSE OF SURVEY CONDUCTED ON THE PREMISES OF THE ASSESSEE ON 23.12 .2005. THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE BEFORE US TO EXPLAIN T HE DISCREPANCY AS POINTED OUT BY THE ASSESSING OFFICER. THE SURVEY PARTY AS ALSO THE AS SESSING OFFICER POINTED OUT THE DISCREPANCY IN REGARD TO ADDITION OF RS. 1,63,000/- CONFIRMED BY THE CIT(A). AS THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITSELF W ITH MATERIAL EVIDENCE, THE FINDING OF THE CIT(A) ON THE ISSUE STANDS CONFIRMED. 41. IN THE CIRCUMSTANCES THE C.O. NO. 100/DEL/2009 FILED BY THE ASSESSEE IS DISMISSED. ITA NO. 986/DEL/08; ITA NO. 3031/DEL/08 & CO NO. 100/DEL/2009(IN ITA NO. 3031/DEL/08) 19 42. IN THE RESULT THE ITA NO. 986/DEL/08 IS PARTLY ALLOWED; THE ITA NO. 3031/DEL/08 IS DISMISSED AND CROSS OBJECTION NO. 100/DEL/2009 IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.8.20 09 SD/- SD/- (DEEPAK R SHAH) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 21-AUG- 2009 SRB COPY OF THE ORDER IS FORWARDED TO:- 1. APPELLANT. 2. RESPONDENT. 3. CIT(A) -I, NEW DELHI 4. CIT 5. THE DR, ITAT, NEW DELHI BY ORDER DY. REGISTRAR,ITAT // T RUE COPY //