DCIT, Faridabad V. M/s. Imperial Autos Industries, New Delhi

ITA 3118/DEL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0840 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 29-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MEETA SINGH
• Keywords: Business expenditure; Search and seizure; Document seized; Assessment record; Documents seized
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2423/DEL/2013 ASSESSMENT YEAR: 2010-11 IMPERIAL AUTO INDUSTRIES LTD., 202, KAUSHAL BAZAAR, 22-23, NEHRU PLACE, NEW DELHI. (PAN: AAACI0645J) VS ACIT, CENTRAL CIRCLE 1, NEW DELHI. APPELLANT RESPONDENT ITA NO.3118/DEL/2013 ASSESSMENT YEAR: 2010-11 DCIT, CENTRAL CIRCLE-1, FARIDABAD. VS IMPERIAL AUTO INDUSTRIES LTD., 202, KAUSHAL BAZAAR, 22-23, NEHRU PLACE, NEW DELHI. (PAN: AAACI0645J) APPELLANT RESPONDENT ASSESSEE BY : DR. RAKESH GUPTA, A DV. MR. DIPESH GARG, AR DEPARTMENT BY: SMT. MEETA SIN GH C.I.T. DR DATE OF HEARING : 19.06.2018 DATE OF PRONOUNCEMENT : 14.09.2018 O R D E R PER SUDHANSHU SRIVASTAVA, JM ITA NO. 2423/DEL/2013 IS THE ASSESSEES APPEAL AGAINST THE ORDER DATED 7.3.2013 PASSED BY THE LD. CIT (APPEALS )(CENTRAL), GURGAON FOR ASSESSMENT YEAR 2010-11 AND ITA NO. ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 2 3118/DEL/2013 IS THE DEPARTMENTS CROSS APPEAL FOR THE SAME YEAR. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE GROUP CASE S OF M/S IMPERIAL AUTO INDUSTRIES LTD., FARIDABAD WERE SUBJE CT TO SEARCH AND SEIZURE OPERATION ON 2.9.2009. SEARCH AND SEIZU RE OPERATIONS WERE ALSO CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES IN THE CASES WHICH WERE CLOSELY ASSOCIATED WITH M/S IMPERIAL AUTO INDUSTRIES LTD. SEARCH OPERATION U/S 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') WAS ALSO CARRIED OUT ON 2.9.2009 AT THE BUSINESS PREMISES OF THE ASSESSEE M/S IMPERIAL AUTO INDUSTRIES LIMITED, 202, KAUSHAL BAZAAR, 32- 33, NEHRU PLACE, NEW DELHI AND ALSO ITS PREMISES OP POSITE THE RAILWAY GOODS SHED. CERTAIN CASH, DOCUMENTS AND BO OKS WERE SEIZED AND IMPOUNDED DURING THE COURSE OF SEARCH OP ERATION FROM THE BUSINESS PREMISES OF THE ASSESSEE COMPANY. 2.1 THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDE RATION WAS FILED ON 15.10.2010 DECLARING AN INCOME OF RS. 13,1 5,50,160/- WHICH INCLUDED RS. 5 CRORE DECLARED BY THE ASSESSEE DURING THE COURSE OF SEARCH OPERATION. THE ASSESSMENT WAS CO MPLETED U/S 143(3) R/W SECTION 153(1)(B) OF THE ACT ON 28.12.20 11 AT AN ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 3 INCOME OF RS. 14,83,41,420/- AFTER MAKING THE FOLLO WING ADDITIONS/DISALLOWANCES:- I) UNACCOUNTED CASH TRANSACTIONS - RS. 1,05,04,160/- II) DIFFERENCE IN CASH BALANCE AS PER BOOKS AND CASH COUNTED PHYSICALLY ON THE DATE OF SEARCH RS. 13,1 50/- III) 1/5 TH OF CONVEYANCE EXPENSES DISALLOWED RS. 22,78,951/- IV) SHORT AND EXCESS RECOVERIES RS. 1,79,257/- V) 1/5 TH OF VEHICLE RUNNING AND MAINTENANCE EXPENSES RS. 17,35,564/- VI) LIQUIDATED DAMAGE CHARGES ADDED BACK - RS. 5,05,97 2/- VII) 1/5 TH OF BUSINESS PROMOTION EXPENSES RS. 15,74,205/- 2.2 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. COMMISSIONER OF INCOME TAX (A) CHALLENGING THESE AD DITIONS AND THE LD. COMMISSIONER OF INCOME TAX (A) PARTLY A LLOWED THE ASSESSEES APPEAL BY ALLOWING RELIEF/DISMISSING THE GROUNDS RAISED BY THE ASSESSEE AS UNDER:- I) THE ADDITION OF RS. 1,05,04,160 ON ACCOUNT OF UNDISCLOSED CASH TRANSACTIONS WAS DELETED. ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 4 II) THE DIFFERENCE IN PHYSICAL CASH FOUND DURING THE CO URSE OF SEARCH AND CASH AS PER THE BOOKS OF ACCOUNT AMOUNTING TO RS. 13,150/- WAS DELETED. III) THE ADDITION OF RS. 22,78,951/- BEING 1/5 TH OF TOTAL EXPENDITURE UNDER THE HEAD CONVEYANCE WAS UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (A). IV) THE DISALLOWANCE OF RS.1,79,257/- ON ACCOUNT OF SHO RT/ EXCESS RECOVERIES WAS DELETED. V) THE DISALLOWANCE OF 1/5 TH OF VEHICLE RUNNING AND MAINTENANCE EXPENSES AMOUNTING TO RS. 17,35,564/- W AS PARTIALLY SUSTAINED AND RESTRICTED TO RS. 10 LAKH. VI) THE DISALLOWANCE OF LIQUIDATED DAMAGES AMOUNTING TO RS. 5,05,972/- WAS DELETED. VII) THE DISALLOWANCE OF 1/5 TH OF BUSINESS PROMOTION EXPENSES AMOUNTING TO RS.15,74,205/- WAS UPHELD. 2.3 AGGRIEVED, BOTH THE ASSESSEE AND THE DEPARTMEN T HAVE APPROACHED THE ITAT AND HAVE CHALLENGED THE FINDING S/ ADJUDICATION BY THE LD. COMMISSIONER OF INCOME TAX (A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACT I N ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 5 UPHOLDING THE ACTION OF LD AO IN MAKING AN AD HOC DISALLOWANCE OF RS. 22,78,951/- BEING L/5 LH OF CONVEYANCE EXPENSES THAT TOO WITHOUT ANY BASIS AND MERELY ON THE BASIS OF SURMISES AND CONJECTURES. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC T IN UPHOLDING THE ACTION OF LD AO IN DISALLOWING VEH ICLE RUNNING AND MAINTENANCE EXPENSES AND RESTRICTING TH E SAME TO RS. 10,00,000/- HOLDING THE SAME TO HAVE BE EN INCURRED ALLEGEDLY FOR NON BUSINESS PURPOSE. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACT I N UPHOLDING THE ACTION OF LD AO IN MAKING A DISALLOWI NG OF RS.15,74,205/- BEING 1/5 OF BUSINESS PROMOTION EXPENSES HOLDING THE SAME TO HAVE BEEN INCURRED ALLEGEDLY FOR NON BUSINESS PURPOSE. 4. IN ANY VIEW OF THE MATTER AND IN ANY CASE, THE IMPUGNED DISALLOWANCES UNDER CHALLENGE COULD NOT HA VE BEEN MADE U/S 153A AS THERE WAS NO INCRIMINATING SEIZED MATERIAL. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN NOT ALLOWING THE ADJUSTMENT OF CASH FOUND AND SEIZED DURING SEARCH AMOUNTING TO RS.52,00,000/- TOWARDS PAYMENT OF ADVANCE TAX LIABILITY. GROUNDS RAISED BY THE DEPARTMENT ARE AS UNDER:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDIT ION OF RS. 1,05,04,160/- MADE BY THE AO BEING THE DIFFEREN CE OF UNDISCLOSED CASH TRANSACTIONS WERE RECORDED IN SEIZED DOCUMENTS ANNEXURE A- 1 TO A-4 AT RS.11,00,44,160/- AND THE AMOUNT DISCLOSED ON ACCOU NT OF THESE DOCUMENTS WAS RS. 9,54,20,000/-? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCE OF A SUM OF RS. 1,79,257 CLAIMED TO BE DEBITED TO PROFIT AND LOSS ACCOUNT UNDER THE HEAD SHORT ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 6 AND EXCESS RECOVERIES ESPECIALLY WHEN NO EXPLANATIO N WAS OFFERED AND NO DOCUMENTARY EVIDENCES WERE PRODUCED BY THE ASSESSEE? (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS. 5,05,972/- MADE BY THE AO ON ACCOUNT OF LIQUIDA TED DAMAGE CHARGES IGNORING THE FACT THAT THE EXPENSES WERE NOT INCURRED IN THE NORMAL COURSE OF BUSINESS AND THIS IS IN THE NATURE OF PENALTY ON THE ASSESSEE FO R VIOLATING AGREEMENT BETWEEN PARTIES. (IV) THAT THE APPELLANT CRAVES TO ADD, DELETE OR M ODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3.0 THE LD. AR SUBMITTED THAT GROUND NOS. 1, 2 AND 3 OF THE ASSESSEES APPEAL CHALLENGE THE AD HOC DISALLOWANCE BY THE ASSESSING OFFICER IN RESPECT OF CONVEYANCE EXPENSES , VEHICLE RUNNING AND MAINTENANCE EXPENSES AND BUSINESS PROMO TION EXPENSES. THE LD. AR SUBMITTED THAT ALL THESE THREE ADDITIONS/DISALLOWANCES HAD BEEN MADE WITHOUT POINT ING OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNTS OF THE ASS ESSEE. THE LD. AR SUBMITTED THAT THE AUDITED BOOKS OF ACCOUNTS HAD BEEN DULY PRODUCED BEFORE THE ASSESSING OFFICER AS HAS BEEN N OTED BY THE ASSESSING OFFICER HIMSELF ON PAGE 2 OF THE ASSESSME NT ORDER. IT WAS ALSO SUBMITTED THAT THE LD. COMMISSIONER OF INC OME TAX (A) HAD ERRED IN UPHOLDING/PARTIALLY SUSTAINING THE DIS ALLOWANCES WHICH HAD BEEN MADE ON AD HOC BASIS WITHOUT ASSIGNING ANY REASON FOR REACHING THE CONCLUSION OF SUSTAINING/PA RTIALLY ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 7 SUSTAINING THESE AD HOC DISALLOWANCES. THE LD. AR FURTHER SUBMITTED THAT THE DEPARTMENT HAD DULY ACCEPTED SIM ILAR EXPENSES IN ASSESSMENT YEARS 2005-06, 2006-07, 2007 -08, 2008- 09 AND 2009-10 IN ASSESSMENT ORDERS WHICH WERE PASS ED U/S 143(3) R/W SECTION 153A OF THE ACT. IT WAS ALSO SU BMITTED THAT THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2012-13 HAD DELETED A SIMILAR AD HOC ADDITION IN RESPECT OF BUSINESS EXPENSES IN ITA NO. 4604/DEL/2016 VIDE ORDER DATED 15.12.200 7. 3.1 THE LD. AR FURTHER SUBMITTED THAT GROUND NO. 4 IN THE ASSESSEES APPEAL WAS NOT BEING PRESSED. 3.2 WITH RESPECT TO GROUND NO. 5 WHICH CHALLENGED T HE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (A) IN NOT ALLOW ING THE ADJUSTMENT OF CASH FOUND AND SEIZED DURING THE SEAR CH AMOUNTING TO RS. 52 LAKH TOWARDS PAYMENT OF ADVANCE TAX LIABILITY, IT WAS SUBMITTED THAT THE LD. COMMISSION ER OF INCOME TAX (A) HAD NOT ADJUDICATED THIS ISSUE. IT WAS SUB MITTED THAT THIS GROUND CORRESPONDED TO GROUND NO. 10 OF THE ASSESSE ES APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (A). 4.0 IN RESPONSE, THE LD. CIT DR SUBMITTED THAT THE AD HOC DISALLOWANCES BEING CONTESTED BY THE ASSESSEE HAD B EEN MADE ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 8 BECAUSE THE RELEVANT DETAILS HAD NOT BEEN SUBMITTED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAD NO OPTION BUT TO PROCEED ON THE BASIS OF MATERIAL BEFORE HIM. THE L D. CIT DR VEHEMENTLY ARGUED THAT THE DISALLOWANCES/ADDITIONS BEING CHALLENGED BY THE ASSESSEE WERE MADE ON A SOUND BAS IS BY THE ASSESSING OFFICER AND WERE ACCORDINGLY SUSTAINED/PA RTIALLY SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (A) AND IN VIEW OF THE FINDINGS OF BOTH THE LOWER AUTHORITIES, THE SAME SHOULD BE UPHELD. 5.0 COMING TO THE DEPARTMENTS APPEAL, THE LD. CIT DR SUBMITTED THAT THE LD. COMMISSIONER OF INCOME TAX(A ) HAD DELETED THE ADDITION PERTAINING TO UNEXPLAINED CASH TRANSACTIONS OF RS. 1,05,04,160/- ON THE GROUND THAT THERE WAS A DUPLICATION OF THE DIARIES IN SEIZED DOCUMENTS ANNEXURE A-1 TO A-4 AND IT WAS SUBMITTED THAT THE LD. COMMISSIONER OF INCOME T AX (A) HAD MERELY ACCEPTED THE ASSESSEES CLAIM THAT THERE WAS A DUPLICATION IN ADDING THE FIGURES WHEREAS THE ONUS WAS ON THE A SSESSEE TO ESTABLISH BEYOND DOUBT THAT THERE WAS A DUPLICATION . 5.1 WITH RESPECT TO THE DEPARTMENTS GROUND CHALLEN GING THE DELETION OF DISALLOWANCE OF RS. 1,79,257/- ON ACCOU NT OF SHORT ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 9 AND EXCESS RECOVERIES, THE LD. C.I.T. DR SUBMITTED THAT THIS AMOUNT HAD BEEN DELETED BY THE LD. COMMISSIONER OF INCOME TAX (A) ALTHOUGH THE ASSESSEE HAD NOT OFFERED ANY PLAUS IBLE EXPLANATION ON THIS ISSUE. 5.2 WITH RESPECT TO GROUND NO. 3 OF THE DEPARTMENT S APPEAL CHALLENGING THE DELETION OF ADDITION OF RS. 5,05,97 2/- ON ACCOUNT OF LIQUIDATED DAMAGES, IT WAS SUBMITTED THAT THE LD . COMMISSIONER OF INCOME TAX (A) HAD GIVEN RELIEF TO THE ASSESSEE WITHOUT CALLING FOR ANY DETAILS FROM THE ASSESSEE I N THIS REGARD AND HAD ACCEPTED THE ASSESSEES CONTENTION WITHOUT ANY EXAMINATION OF THE ISSUE. 6.0 IN RESPONSE TO THE DEPARTMENTS APPEAL, THE LD. AR SUBMITTED THAT WITH RESPECT TO GROUND NOS. 2 AND 3 OF THE DEPARTMENTS APPEAL, RELIANCE WAS BEING PLACED ON T HE IMPUGNED ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A). T HE LD. AR VEHEMENTLY ARGUED THAT THE LD. COMMISSIONER OF INCO ME TAX (A) HAD GIVEN RELIEF AFTER DUE CONSIDERATION OF THE FAC TUAL MATRIX OF THE CASE. HE ALSO DREW OUR ATTENTION TO PAGES 468 AND 469 OF THE PAPER BOOK FILED BY THE ASSESSEE WHEREIN THE DETAIL S OF SHORT AND EXCESS RECOVERIES AND LIQUIDATED DAMAGES WERE REPRO DUCED. IT ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 10 WAS SUBMITTED THAT THESE DETAILS WERE BEFORE THE LO WER AUTHORITIES AS WELL. 6.1 WITH RESPECT TO GROUND NO. 1 OF THE ASSESSEES APPEAL, THE LD. AR DREW OUR ATTENTION TO PAPER BOOK PAGES 428 T O 461 OF THE PAPER BOOK SUBMITTED BY THE ASSESSEE AND SUBMITTED THAT THESE CONTAINED THE RELEVANT DETAILS AND EXPLANATION OF T HE ANNEXURE A- 1 TO A-4 OF THE SEIZED DOCUMENTS AND THAT EVEN AS P ER THESE DETAILS, WHICH WERE DULY BEFORE THE LOWER AUTHORITI ES, THERE WAS A CLEAR CASE OF DUPLICATION OF ENTRIES WHILE MAKING T HE IMPUGNED ADDITION OF RS. 1,05,04,160/-. IT WAS SUBMITTED TH AT THE AMOUNT WAS DELETED AFTER DUE CONSIDERATION OF THE FACTS AN D DETAILS ON RECORD. 7.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS FAR AS GROUND NOS. 1, 2 AND 3 OF THE ASSESSEES APPEAL WHICH CHALLENGE THE UPHOLDING /PARTIAL UPHOLDING OF AD HOC DISALLOWANCE WITH RESPECT TO CONVEYANCE EXPENSES, VEHICLE RUNNING AND MAINTENANCE EXPENSES AND BUSINESS PROMOTION EXPENSES ARE CONCERNED, IT IS EV IDENT FROM THE PAST ASSESSMENT RECORDS THAT NO SIMILAR DISALLO WANCE HAD BEEN MADE BY THE DEPARTMENT IN ASSESSMENT YEARS 200 5-06, ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 11 2006-07, 2007-08, 2008-09 AND 2009-10 IN RESPECT OF CONVEYANCE EXPENSES ALTHOUGH THE ASSESSMENT WAS COM PLETED U/S 153A R/W SECTION 153(3) OF THE ACT. SIMILARLY, WITH RESPECT TO VEHICLE RUNNING AND MAINTENANCE EXPENSES AND BUSINE SS PROMOTION EXPENSES, NO DISALLOWANCE HAD BEEN MADE I N ASSESSMENT YEARS 2005-06, 2006-07, 2007-08, 2008-09 AND 2009-10 AND IT IS FURTHER NOTED THAT THE BASIS OF D ISALLOWANCE IN THE IMPUGNED YEAR IS A MERE ESTIMATION ON THE PART OF ASSESSING OFFICER WHEREIN HE HAS DISALLOWED 1/5 TH OF THE EXPENSES WITHOUT ASSIGNING ANY REASON FOR SUCH DISALLOWANCE. WE ALS O NOTE THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECI FIC DEFECTS IN THE BOOKS OF ACCOUNTS/DETAILS PRODUCED BEFORE HIM W ITH REGARD TO THESE EXPENSES. IT IS ALSO UNDISPUTED THAT THE BOO KS OF ACCOUNTS OF THE ASSESSEE WERE DULY AUDITED AND THEY WERE PRO DUCED BEFORE THE ASSESSING OFFICER. IT IS SETTLED LAW THAT IN A BSENCE OF ANY CORROBORATIVE FINDING, AD HOC DISALLOWANCE CANNOT BE UPHELD. IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE SUB MISSION OF THE ASSESSEE, THEN HE HAS TO MAKE A DISALLOWANCE AFTER MAKING SPECIFIC REFERENCE TO SUCH DOCUMENTS/VOUCHERS. IN THE PRESENT CASE BEFORE US, NO SPECIFIC IDENTIFICATION HAS BEEN DONE. THEREFORE, IN VIEW OF THE FACTS, IT IS OUR CONSIDER ED OPINION THAT ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 12 THE THREE ESTIMATED DISALLOWANCES AS CONFIRMED BY T HE LD. COMMISSIONER OF INCOME TAX (A) IS UNSUSTAINABLE. A CCORDINGLY, WE ALLOW GROUND NOS. 1, 2 AND 3 OF THE ASSESSEES A PPEAL AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION . 7.1 COMING TO GROUND NO. 4, SINCE THIS GROUND HAS N OT BEEN PRESSED BY THE ASSESSEE, THE SAME IS BEING DISMISSE D AS NOT PRESSED. 7.2 WITH REGARD TO GROUND NO. 5, WE AGREE WITH THE CONTENTIONS OF THE LD. AR THAT THIS GROUND HAS NOT BEEN SPECIFI CALLY ADJUDICATED BY THE LD. COMMISSIONER OF INCOME TAX ( A). THEREFORE, WE DEEM IT FIT TO RESTORE THIS GROUND TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (A) FOR ADJUDICATING THE GROUND BY PASSING A SPEAKING ORDER THEREON AS PER LAW AFTE R GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. 7.3 GROUND NOS. 6 AND 7 BEING GENERAL IN NATURE ARE NOT BEING ADJUDICATED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 13 9.0 COMING TO THE DEPARTMENTS APPEAL, IT IS SEEN T HAT AS FAR GROUND NO. 1 OF THE DEPARTMENTS APPEAL IS CONCERNE D WHICH CHALLENGES THE DELETION OF ADDITION OF RS. 1,05,04, 160/- ON ACCOUNT OF UNDISCLOSED CASH TRANSACTION, THE LD. CO MMISSIONER OF INCOME TAX (A) HAS ASSUMED THAT 50% OF THE SEIZE D ANNEXURE A-1 WAS A DUPLICATION. HOWEVER, THE LD. COMMISSION ER OF INCOME TAX (A) HAS NOT SPECIFICALLY RECORDED A REASON AS T O HOW HE ASSUMED A FIGURE OF 50% TO BE OF DUPLICATION, THERE FORE, ON THIS COUNT ALONE, THE DEPARTMENT SUCCEEDS AND WE DEEM IT EXPEDIENT IN THE INTEREST OF JUSTICE TO RESTORE GROUND NO. 1 TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (A) TO BE ADJUDICATE D DE NOVO AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRE SENT ITS CASE. ACCORDINGLY, GROUND NO. 1 OF THE DEPARTMENTS APPEA L STANDS ALLOWED FOR STATISTICAL PURPOSES. 9.1 COMING TO GROUND NO. 2 OF THE DEPARTMENTS APPE AL WHICH CHALLENGES THE DELETION OF ADDITION OF RS. 1,79,257 /- CLAIMED AS SHORT AND EXCESS RECOVERIES BY THE ASSESSEE, IT IS SEEN THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAS MENTIONED TH AT THE DETAILS OF THIS ACCOUNT RUN INTO 500 ODD PAGES AND THAT THE AMOUNT REPRESENTED THE DIFFERENCE AFTER NETTING OFF . THE LD. COMMISSIONER OF INCOME TAX (A) HAS ALSO STATED THAT THE TURNOVER ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 14 OF THE ASSESSEE WAS APPROXIMATELY RS. 52,305 LACS A ND THE TOTAL PURCHASES WERE TO THE TUNE OF RS. 32,898/- LACS. I N SUCH CIRCUMSTANCES, THE LD. COMMISSIONER OF INCOME TAX ( A) HELD THE DEBIT OF THE IMPUGNED AMOUNT AS REASONABLE. ON THE FACTS OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE FINDI NG OF THE LD. COMMISSIONER OF INCOME TAX (A) ON THE ISSUE AS THE LD. COMMISSIONER OF INCOME TAX (A) HAS ADJUDICATED THE ISSUE AFTER DULY CONSIDERING THE QUANTUM OF TURNOVER OF THE ASS ESSEE AS WELL THE DETAILS SUBMITTED BEFORE HIM. THE LD. CIT DR A LSO COULD NOT POINT OUT ANY FACTUAL ERROR IN THE FINDINGS OF THE LD. COMMISSIONER OF INCOME TAX (A) IN THIS REGARD. ACC ORDINGLY, WE DISMISS GROUND NO. 2 RAISED BY THE DEPARTMENT. 9.2 GROUND NO. 3 CHALLENGES THE ACTION OF THE LD. C OMMISSIONER OF INCOME TAX (A) IN DELETING ADDITION OF RS. 5,05, 972/- WITH RESPECT TO LIQUIDATED DAMAGES AND IT IS SEEN THAT T HE LD. COMMISSIONER OF INCOME TAX (A) HAS GIVEN RELIEF TO THE ASSESSEE AFTER DULY CONSIDERING THE FACT THAT THESE EXPENSES RELATE TO NORMAL COURSE OF BUSINESS AND WERE FULLY ALLOWABLE AS BUSINESS EXPENDITURE. THE LD. COMMISSIONER OF INCOME TAX (A ) HAS NOTED THAT IN VIEW OF THE NATURE OF BUSINESS BEING CONDUC TED BY THE ASSESSEE ON A LARGE SCALE WHICH ENTAILS MAKING SUPP LIES TO ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 15 VARIOUS AGENCIES INCLUDING GOVERNMENT AGENCIES, SUC H CLAIMS WERE BOUND TO ARISE. WE ALSO NOTE THAT THE ASSESSI NG OFFICER HAS DISALLOWED THE ENTIRE AMOUNT OF EXPENDITURE CLAIMED AS LIQUIDATED DAMAGES WITHOUT POINTING OUT ANY SPECIFI C INSTANCE WHERE SUCH CLAIM WAS NOT ALLOWABLE. THIS IS NOT LEG ALLY TENABLE AND EVEN THE LD. CIT DR WAS UNABLE TO POINT OUT ANY LEGAL OR FACTUAL INACCURACY IN THE ORDER OF THE LD. COMMISSI ONER OF INCOME TAX (A). ACCORDINGLY, WE REFUSE TO INTERFER E ON THIS ISSUE ALSO AND WE DISMISS GROUND NO. 3 RAISED BY THE DEPA RTMENT. 9.3 GROUND NO. 4 OF THE DEPARTMENTS APPEAL IS GENE RAL IN NATURE AND THE SAME IS NOT BEING ADJUDICATED UPON. 10. ACCORDINGLY, THE APPEAL OF THE DEPARTMENT STAND S PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S PARTLY ALLOWED AND THE DEPARTMENTS APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 16 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER, 2018. SD/- SD/- (N.K.BILLAIYA) (SUDHANSHU SRIVASTAV A) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14 TH SEPTEMBER, 2018 GS COPY FORWARDED TO: - 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR TRUE COPY BY ORDER ASSTT. REGISTRAR ITA NO. 2423/DEL/2013 ITA NO. 3118/DEL/2013 ASSESSMENT YEAR 2010-11 17 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER