The ITO, Ward-6(4), Ahmedabad V. M/s. Pranav Dyes & Intermediates, Ahmedabad

ITA 3239/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9787 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-09-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 02-08-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIP GARG
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained investment; Revised return
• Section: 143(2); 148; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.3239/AHD/2007 A. Y: 2002-03 THE INCOME TAX OFFICER, WARD- 6(4), C. U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD VS M/S. PRANAV DYES & INTERMEDIATES, C-1/43-44, PHASE- II, GIDC, VATVA, AHMEDABAD PA NO. AADFP 2826 I (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SANDIP GARG, DR RESPONDENT BY SHRI S. N. DIVATIA, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XII, AHMEDA BAD DATED 04-05-2007 FOR ASSESSMENT YEAR 2002-03 ON THE FOLLO WING GROUNDS:. 1. THE LD. COMMISSIONER OF INCOME TAX (A) XII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED INN COMPUTING THE TOTAL INCOME AS PER ORIGINAL RETURN A ND MAKING THE ADDITION ON ACCOUNT OF JOB WORK RECEIPTS OF RS.7,42,901/- 2. THE LD. COMMISSIONER OF INCOME TAX (A) XII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN REDUCING THE ADDITION MADE FOR PAYMENT TO CREDITORS FROM UNDISCLOSED SOURCES FROM RS.38,62,992/- TO 34,051/- . 3. THE LD. COMMISSIONER OF INCOME TAX (A) XII, AHMEDABAD HAS ERRED IN LAW AND ON FACT IN DELETING THE ADDITION MADE OF RS.11,25,892/- AS UNEXPLAINED INVESTMENT IN PURCHASES. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD POINTED OUT BY THE PARTIES. ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 2 3. BRIEFLY, THE FACTS OF THE CASE ON THE ABOVE GROUNDS OF APPEAL ARE THAT THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT( A) THAT THE ASSESSEE FURNISHED EVIDENCES AND DETAILS AT THE ASSESSMENT S TAGE WHICH HAVE NOT BEEN CONSIDERED BY THE AO. THE LEARNED CIT(A), THER EFORE, CALLED FOR REMAND REPORT FROM THE AO ON THE SUBMISSIONS AND EV IDENCES FILED BY THE ASSESSEE AT THE APPELLATE STAGE. THE LEARNED CI T(A) INCORPORATED THE REMAND REPORT OF THE AO AT PAGE 2 OF THE APPELLATE ORDER IN WHICH THE AO HAS EXPLAINED; WITH THE ORIGINAL RETURN OF INCOME F ILED BY THE ASSESSEE WERE DULY AUDITED WHEREAS FOR THE RETURN FILE IN RESPONS E TO NOTICE U/S 148 OF THE ACT, SAME WERE NOT AUDITED. THE AO REITERATED T HE FINDING GIVEN IN THE ASSESSMENT ORDER AND MAINLY EXPLAINED THAT AT T HE ASSESSMENT STAGE THE ISSUES WERE NOT EXPLAINED ON ALL THE ABOVE GROU NDS OF APPEAL, THEREFORE, ADDITION WAS RIGHTLY MADE BY THE AO. THE REMAND REPORT OF THE AO WAS CONFRONTED TO THE ASSESSEE FOR HIS COMMENTS. THE ASSESSEE FILED SUBMISSIONS BEFORE THE LEARNED CIT(A) AND IT WAS BR IEFLY EXPLAINED THAT THE ASSESSEE ITSELF HAD DECLARED JOB WORK RECEIPTS OF RS.13,79,326/- IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF T HE IT ACT AS AGAINST JOB WORK RECEIPTS OF RS.6,36,404/- IN THE ORIGINAL RETU RN. IT WAS EXPLAINED THAT THE REVISED BOOKS WERE SUPPORTED BY AUDIT REPO RT AND SAME WAS ALSO FILED FOR THE SUBSEQUENT ASSESSMENT YEAR. IN RESPEC T OF UNEXPLAINED INVESTMENT OF RS.11,25,892/- IT WAS EXPLAINED THAT THE AO OVER LOOKED ALL THE FACTS FILED EARLIER AND FURTHER COMPLETE RE CONCILIATION OF THE SUNDRY CREDITORS WAS FILED AND THE SUNDRY CREDITORS HAVE B EEN REDUCED FROM RS.1,74,98,724/- IN THE ORIGINAL RETURN TO RS.6,21, 958/- IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT N OT ON ACCOUNT OF PAYMENTS MADE TO THE PARTIES. THE LEARNED CIT(A) CONSIDERIN G THE EXPLANATION OF THE ASSESSEE AND THE MATERIAL ON RECORD NOTED THAT THE AO HAS NOT MENTIONED ANYTHING ABOUT THE FRESH EVIDENCE AND NO MATERIAL WAS BROUGHT ON RECORD TO REJECT THE ACCEPTANCE OF THE F RESH EVIDENCES. THE LEARNED CIT(A) ACCORDINGLY, ADMITTED THESE EVIDENCE S UNDER RULE 46A OF THE IT RULES. ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 3 4. THE LEARNED CIT(A) THEREAFTER DISCUSSED ALL THE 3 GROUNDS OF THE APPEAL ON MERIT. AS REGARDS ADDITION OF RS.7,42,901 /- ON GROUND NO.1 IT IS NOTED THAT ORIGINAL RETURN OF INCOME WAS FILED O N 31-10-2002 DECLARING TOTAL INCOME OF (-) RS.8,25,926/-. DURING THE COUR SE OF SURVEY CARRIED OUT ON 12-03-2004, STATEMENT OF THE PARTNER WAS REC ORDED IN WHICH HE HAS ADMITTED THAT ADDITION TO THE MACHINERY SHOWN I N ASSESSMENT YEAR 2001-02 WERE BOGUS. THE NOTICE U/S 148 OF THE IT AC T WAS ISSUED ON 15-03-2004 AND IN RESPONSE THERETO THE ASSESSEE FIL ED RETURN OF INCOME ON 30-06-2004 DECLARING NIL INCOME. THE AO NOTED TH AT THERE IS A VARIATION IN THE AUDITED ACCOUNTS FILED WITH THE OR IGINAL RETURN AND THE REVISED RETURN FILED ON 30-06-2004 IN RESPONSE TO N OTICE ISSUED U/S 148 OF THE IT ACT. THE ASSESSEE WAS ASKED TO EXPLAIN TH E SAME. IN RESPONSE, THE ASSESSEE FILED THE DETAILS OF CLAIM OF PURCHASE S AND SALES AS UNDER: OLD BOOKS NEW BOOKS VARIATION SALES 6241480 6241480 NIL JOB WORK (INCOME) 636404 1379326 792292 PURCHASE 1624229 2750121 1125892 4.1 THE ASSESSEE WAS ASKED TO EXPLAIN THE ABOVE VAR IATION WITH EVIDENCE OF PURCHASE BILL, DETAILS OF DELIVERY OF T HE GOODS, PAYMENTS ETC. THE AO HAS NOTED THAT QUERY WAS NOT RESPONDED. IN T HE ORIGINAL RETURN, THE ASSESSEE HAD OFFERED JOB WORK INCOME AT RS.6,36 ,404/- BUT IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I T ACT, JOB WORK INCOME WAS SOWN AT RS.13,79,326/- . HENCE, THE VARIATION O F RS.7,42,922/- WAS CONSIDERED AS SUPPRESSED JOB WORK RECEIPTS. IT WAS EXPLAINED BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE HAD ALREADY INCLUD ED THE AFORESAID JOB WORK RECEIPTS IN THE REVISED ACCOUNTS AND HIGHER IN COME IS SHOWN. THEREFORE, ADDITION IS UNJUSTIFIED. THE LEARNED CIT (A) ON EXAMINATION OF THE DETAILS NOTED THAT THE ASSESSEE HAD SHOWN JOB W ORK RECEIPTS OF RS.13,79,326/- AS AGAINST RS.6,36,404/- SHOWN IN TH E ORIGINAL RETURN AND THE SAME ARE SUPPORTED BY THE DETAILS FURNISHED BY THE ASSESSEE. ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 4 THE AFORESAID AMOUNT ADDED BY THE AO WAS NOT CLAIME D IN THE ORIGINAL RETURN OF INCOME BECAUSE OF THE MISTAKE OF THE ACCO UNTANT. ADDITION WAS ACCORDINGLY DELETED BECAUSE THE SAME HAS BEEN DISCL OSED BY THE ASSESSEE SUO MOTO IN THE REVISED RETURN. ADDITION WAS ACCORD INGLY DELETED. 5. ON GROUND NO.2 OF THE APPEAL, IT WAS NOTED BY TH E AO THAT DURING THE YEAR UNDER CONSIDERATION SUNDRY CREDITORS SHOWN IN THE ORIGINAL RETURN HAD REDUCED FROM RS.1,74,98,724/- TO RS.60,2 1,958/- IN THE REVISED RETURN. THE VARIATION OF THE ISSUE WAS OF R S.1,14,76,766/-. BEFORE THE AO, IT WAS STATED THAT THE ASSESSEE HAD REMOVED LIABILITY OF RS.76,13,774/- IN THE NAME OF VEERA INDUSTRIES SHOW N IN THE BALANCE SHEET. THIS ENTRY MADE BY THE ASSESSEE IS ACCEPTED BY THE AO. THE AO FURTHER STATED THAT THE ASSESSEE HAS NOT BEEN ABLE TO JUSTIFY THE VARIATION IN THE CREDITORS AMOUNTING TO RS.38,62,992/- (RS.1, 14,76,766/- MINUS RS.76,13,774/-). THE AO OBSERVED THAT REDUCTION IN THE CREDITORS COULD BE REFLECTED ONLY WHEN LIABILITY WAS DISCHARGED. TH IS MEANS, THE ASSESSEE HAD PAID OUT CREDITORS TO THE EXTENT OF RS.38,62,99 2/- AND DID NOT DISCLOSE THE SOURCES OF PAYMENT TO THE CREDITORS AN D NO EVIDENCE IS FILED. THEREFORE, THE ADDITION WAS MADE. THE ASSESSEE EXPL AINED BEFORE THE LEARNED CIT(A) HAT RECONCILIATION IN RESPECT OF THE SUNDRY CREDITORS IS FILED IN THE PAPER BOOK WHICH WOULD SHOW THAT SUNDRY CRED ITORS HAVE BEEN REDUCED NOT ON ACCOUNT OF PAYMENT TO THEM BUT DUE T O ADJUSTMENT MADE TOWARDS THE SUNDRY CREDITORS FOR PURCHASE OF MACHIN ERY AND SOME OF THE DEBTORS ALSO INCLUDED IN THE SUNDRY CREDITORS. IT W AS EXPLAINED THAT THE ASSESSEE HAD RECASTED THE SUNDRY DEBTORS AND CREDIT ORS WHICH THE ACCOUNTANT HAD NOT ACCOUNTED FOR IN THE ACCOUNTS. T HE LEARNED CIT(A) CONSIDERING THE EVIDENCE ON RECORD REPRODUCED THE D ETAILED CHART OF THE SUNDRY CREDITORS FILED BY THE ASSESSEE IN PARA 5.3 AND NOTED THAT THE ADDITION COULD BE MADE ONLY OF RS.34,051/-. RECONCI LIATION FILED BY THE ASSESSEE WAS ACCORDINGLY ACCEPTED. ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 5 6. ON GROUND NO.3 OF THE APPEAL, THE DISCREPANCY WA S FOUND ON COMPARISON BETWEEN THE ORIGINAL RETURN AND THE REVI SED RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT WITH REGAR D TO PURCHASES AS NOTED ABOVE AND ADDITION OF RS.11,25,892/- WAS MADE . IT WAS EXPLAINED BEFORE THE LEARNED CIT(A) THAT RECONCILIATION OF TH E PURCHASES WAS FILED WHICH WAS NOT TAKEN INTO CONSIDERATION. ALL THE PUR CHASES ARE DULY RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, NO ADD ITION COULD BE MADE. THE PURCHASE RELATE MAINLY TO LARSON COLOURCHEM AND JENNY DYECHEM WHICH WERE DULY SUPPORTED BY PURCHASE VOUCHERS AND CONTRA ACCOUNTS. COPIES OF THE ACCOUNTS WERE ALSO FILED AND IT WAS A LSO EXPLAINED THAT THEY ARE ASSESSED TO TAX. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE NOTED THAT THE DETAILS OF PURCHASES ARE FI LED BEFORE THE AO AND THAT PURCHASES OF RS.11,25,892/- WERE NOT SHOWN IN THE ORIGINAL RETURN HAVE BEEN ACCOUNTED FOR IN THE RETURN NOW FILED IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT. ADDITION WAS ACCORDINGLY DELETED . 7. THE LEARNED DR ON ALL THE GROUNDS OF APPEAL RELI ED UPON THE ORDER OF THE AO AND SUBMITTED THAT NO PROPER EXPLANATION WAS FILED BEFORE THE AO. THEREFORE, ADDITIONS HAVE BEEN RIGHTLY MADE. TH E LEARNED DR FURTHER SUBMITTED THAT SINCE THE SUNDRY CREDITORS HAVE BEEN REDUCED, THEREFORE, THE AO WAS JUSTIFIED IN NOTING THAT SAME WERE REDUC ED ON MAKING PAYMENT, SOURCES OF THE SAME HAVE NOT BEEN EXPLAINE D. THE LEARNED DR, THEREFORE, SUBMITTED THAT ADDITIONS HAVE BEEN RIGHT LY MADE BY THE AO. 8. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FILED COPY OF THE COMPUTATION OF INCOME OF ORIGINAL AND REVISED STATE MENT OF INCOME ALONG WITH BALANCE SHEET AND SUBMITTED THAT JOB WORK RECE IPTS AND PURCHASES HAVE BEEN DULY EXPLAINED IN THE RETURN FILED IN RES PONSE TO THE NOTICE ISSUED U/S 148 OF THE IT ACT AND HIGHER JOB WORK RE CEIPTS AND PURCHASES HAVE BEEN SHOWN. THEREFORE, NO ADDITION SHOULD BE M ADE. HE HAS ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 6 REFERRED TO PB- 31 WHICH IS REVISED PROFIT & LOSS A CCOUNT SHOWING SAME RECEIPTS AND PURCHASES IN WHICH NET PROFIT OF RS.6, 96,396/- HAS BEEN DISCLOSED AND ALSO REFERRED TO PB-23 WHICH IS RECON CILIATION OF THE SUNDRY CREDITORS AND EXPLAINED THAT THE CREDITORS HAVE NOT BEEN REDUCED ON ACCOUNT OF PAYMENT MADE TO THEM BUT DUE TO ADJUSTME NT MADE TOWARDS SUNDRY CREDITORS FOR PURCHASE OF MACHINERY AND SOME OF THE DEBTORS ALSO INCLUDED IN THE SUNDRY CREDITORS. HE HAS ALSO REFER RED TO PB 6 AND PB-7 WHICH ARE THE DETAILS OF PURCHASES SHOWN IN THE ORI GINAL RETURN AND PB 3 AND PB -4 ARE THE REVISED STATEMENT OF PURCHASES TH ROUGH WHICH CORRECT ENHANCED PURCHASES HAVE BEEN SHOWN. HE HAS, THEREFO RE, SUBMITTED THAT ADDITION HAS BEEN RIGHTLY DELETED BY THE LEARNED CI TA). THE DETAILS OF CREDITORS AND SUNDRY DEBTORS AND PROFIT & LOSS ACCO UNT AS PER OLD BOOKS OF ACCOUNTS AND NEW BOOKS OF ACCOUNTS ARE ALSO FILE D IN THE PAPER BOOK. DETAILS OF UNEXPLAINED PURCHASES ARE ALSO EXPLAINED IN THE WRITTEN SUBMISSION. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE MAIN ARGUMENT OF THE LEARN ED DR IS THAT THE DETAILS WERE NOT FILED BEFORE THE AO AT THE ASSESSM ENT STAGE FOR WHICH ADDITIONS HAVE BEEN RIGHTLY MADE. THE ASSESSEE FILE D DETAILED EVIDENCES AND SUBMISSIONS BEFORE THE LEARNED CIT(A) AT THE AP PELLATE STAGE ON WHICH REMAND REPORT WAS CALLED FOR BY THE LEARNED C IT(A) FROM THE AO BUT THE AO INSTEAD OF COMMENTING UPON THE EVIDENCES FILED AT THE APPELLATE STAGE MERELY REITERATED THE STAND OF THE AO IN THE REMAND REPORT. THE ASSESSEE SPECIFICALLY EXPLAINED AT THE APPELLATE STAGE THAT JOB WORK RECEIPTS AND PURCHASES HAVE BEEN SHOWN IN THE REVISED RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE IT ACT WHICH IS MORE THAN AS COMPARED TO THE JOB WORK RECEIPTS AND PURCHASES SHOWN IN THE ORIGINAL RETURN. THE EXPLANATION WITH REGARD TO RED UCTION OF THE SUNDRY CREDITORS WAS ALSO FILED BUT THE AO DID NOT ADVERSE LY COMMENT UPON THE SAME. THE LEARNED CIT(A), THEREFORE, ADMITTED THE E VIDENCE AT THE ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 7 APPELLATE STAGE UNDER RULE 46A OF THE IT RULES AND SUCH FINDINGS OF THE LEARNED CIT(A) HAVE NOT BEEN CHALLENGED BY THE REVE NUE IN THE PRESENT APPEAL.NO SPECIFIC GROUND IS RAISED TO CHALLENGE TH E DISCRETION EXERCISE BY THE LEARNED CIT(A) IN THIS REGARD. THEREFORE, CONTE NTION OF THE LEARNED DR IS REJECTED THAT NO EVIDENCES HAVE BEEN FILED TO EX PLAIN THE ABOVE ISSUES. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 31- 10-2002 DECLARING THE LOSS BUT IN THE PROFIT & LOSS ACCOUNT AS PER THE AU DIT REPORT THE NET PROFIT OF RS.3,39,404/- HAS BEEN SHOWN (PB -47) WHICH IS A DOPTED BY THE AO IN THE COMPUTATION OF INCOME. HOWEVER, AS PER THE REVI SED ACCOUNTS FILED WITH THE RETURN OF INCOME FILED IN RESPONSE TO NOTI CE U/S 148 OF THE IT ACT, THE ASSESSEE HAS SHOWN NET PROFIT OF RS.6,96,3 96/- WHICH IS MORE THAN THE NET PROFIT DISCLOSED IN THE ORIGINAL RETUR N. THE PURCHASES AND JOB WORK RECEIPTS ARE ALSO SHOWN IN THE REVISED RET URN AT HIGHER AMOUNT AS COMPARED TO THE AMOUNT SHOWN IN THE ORIGINAL RET URN OF INCOME. THUS, THE ASSESSEE EXPLAINED THAT HIGHER INCOME AND PURCHASES COULD NOT BE SHOWN DUE TO MISTAKE COMMITTED BY THE ACCOUN TANT. SINCE, HIGHER INCOME IS SHOWN BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE IT ACT; THERE WAS NO REASON T O DISCARD THE ACCOUNTS FILED ALONG WITH THE RETURN FILED IN RESPONSE TO NO TICE U/S 148 OF THE IT ACT. SIMILARLY, THE REASONS FOR REDUCING THE SUNDR Y CREDITORS WAS FILED BEFORE THE LEARNED CIT(A). THE RECONCILIATION IS RE PRODUCED AT PAGE 23 OF THE PAPER BOOK AS WELL AS REPRODUCED AT PAGE 9 AND 10 OF THE APPELLATE ORDER, SUCH RECONCILIATION HAS NOT BEEN DISPUTED BY THE AO AND NO MATERIAL IS FILED BEFORE US TO REBUT THE FINDINGS O F THE LEARNED CIT(A) ON THIS ACCOUNT. THE AO MADE THE ADDITIONS ON ACCOUNT OF DIFFERENCE IN SUNDRY CREDITORS BECAUSE THE SOURCE OF PAYMENT TO T HE CREDITORS IS NOT EXPLAINED. HOWEVER, THE ASSESSEE EXPLAINED THAT THE SUNDRY CREDITORS HAVE BEEN REDUCED NOT ON ACCOUNT OF ANY PAYMENT MAD E TO THEM BUT DUE TO ADJUSTMENT MADE TOWARDS THE SUNDRY CREDITORS FOR THE PURCHASE OF MACHINERY AND SOME OF THE DEBTORS INCLUDED IN THE S UNDRY CREDITORS. THE SUBMISSION OF THE ASSESSEE WAS FOUND TO BE SATISFAC TORY BY THE LEARNED ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 8 CIT(A) AND IS ALSO SUPPORTED BY PB 32 AND PB 51 . THE LEARNED DR HAS NOT POINTED OUT ANY INFIRMITY IN THE RECONCILIATION ACCEPTED BY THE LEARNED CIT(A). IT, THEREFORE, STANDS PROVED THAT A LL THE VARIATIONS AS PER THE ORIGINAL RETURN OF INCOME AND THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE IT ACT HAVE BEEN PROPERLY EXP LAINED BY THE ASSESSEE. WE MAY ALSO NOTE HERE THAT ONCE THE NOTIC E U/S 148 OF THE IT ACT HAS BEEN ISSUED ON THE BASIS OF SURVEY CONDUCTE D ON 12-03-2004, THE SIGNIFICANCE OF THE ORIGINAL RERUNS HAS GONE BE CAUSE THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) OF THE IT ACT HAS EXP IRED IN RESPECT OF THE ORIGINAL RETURN ON THE DATE WHEN NOTICE U/S 148 OF THE ACT WAS ISSUED ON 15-03-2004. SINCE THE AO HAS PROCEEDED TO FRAME THE ASSESSMENT AGAINST THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 148 OF THE IT ACT, THEREFORE, THE RETURN FILED IN RESPONSE TO NOTICE U /S 148 OF THE IT ACT ALONG WITH COPY OF THE ACCOUNTS SHOULD NOT HAVE BEE N DISBELIEVED BY THE AO. THE AO DID NOT APPRECIATE THE COPY OF THE ACCOU NTS FILED ALONG WITH RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF T HE IT ACT. SINCE HIGHER AMOUNT OF JOB WORK RECEIPTS AND PURCHASES HAVE BEEN SHOWN IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 14 8 OF THE IT ACT AND REASONS FOR DECREASE IN THE SUNDRY CREDITORS ARE EX PLAINED, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION AGAINST THE ASSE SSEE. MOREOVER, THE HIGHER INCOME IS SHOWN IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME U/S 148 OF THE IT ACT. THEREFORE, THE AO SHOULD NOT HAVE STARTED WITH THE LESSER AMOUNT OF INCOME FOR T HE PURPOSE OF COMPUTING INCOME OF THE ASSESSEE AT THE END OF THE ASSESSMENT ORDER. CONSIDERING THE ABOVE DISCUSSIONS, WE ARE OF THE VI EW THAT THE LEARNED CIT(A) ON PROPER APPRECIATION OF FACTS AND MATERIAL S ON RECORD RIGHTLY DELETED THE ADDITION. WE, THEREFORE, DO NOT FIND AN Y JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). WE CONFIRM HIS FINDINGS AND DISMISS ALL THE GROUNDS OF APPEAL OF THE REVENU E. ITA NO.3239/AHD/2007 ITO, W-6(4), AHD VS M/S. PRANAV DYES & INTERMEDIATE S 9 10. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMI SSED. ORDER PRONOUNCED ON 24-09-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 24-09-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD