ABDUL HASAN KHAN, MUMBAI V. CIT CEN CIR-I, MUMBAI

ITA 3319/MUM/2008

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8871 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 30-08-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 12-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIVAS RAO
• Keywords: Search and seizure; Document seized; Principle of natural justice; Documents seized
• Section: 143(3); 133A; 153A; 263; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , . . , . . BEFORE SHRI VIJAYPAL RAO, JM & SHRI RAJENDRA, AM ./ ITA NOS.3316/MUM/2008 ( / ASSESSMENT YEARS:2003-04 ) A.A. TRADING CORPORATION, SHOP 19/B, KOHINOOR CHS, LINK ROAD, SAKI NAKA, MUMBAI-72 VS. CIT CEN.CIR-I, MUMBAI-20 ./ ./PAN NO. AAQPK 7323 L ( /APPELLANT ) : ( / RESPONDENT ) AND ./ ITA NOS.3317/MUM/2008 ( / ASSESSMENT YEARS:2003-04 ) ALIMUNISHA ALI HASAN KHAN,, SHOP 19/B, KOHINOOR CHS, LINK ROAD, SAKI NAKA, MUMBAI-72 VS. CIT CEN.CIR-I, MUMBAI-20 ./ ./PAN NO. AAGFA 2484 C ( /APPELLANT ) : ( / RESPONDENT ) AND ./ ITA NOS.3319/MUM/2008 ( / ASSESSMENT YEARS:2003-04 ) ABDUL HASAN KHAN, GALA NO.30, KOHINOOR HSG. SOCIETY, LINK ROAD, SAKI NAKA, MUMBAI-72 VS. CIT CEN.CIR-I, MUMBAI-20 ./ ./PAN NO. AAACJ 1100 D ( /APPELLANT ) : ( / RESPONDENT ) AND ./ ITA NOS.6573/MUM/2010 ( / ASSESSMENT YEARS:2003-04 ) ABDUL HASAN KHAN, GALA NO.31, KOHINOOR CO OP. SOCIETY, LINK ROAD, SAKI NAKA, MUMBAI-72 VS. ASTT. CIT CC-12, MUMBAI-20 ./ ./PAN NO. AAACJ 1100 D ( /APPELLANT ) : ( / RESPONDENT ) ITA NOS :3316,3317, 3319/08 & 6573/10 2 ASSESSEE BY : SHRI JAYANT R. BHATT / REVENUE BY : SHRI GOLI SRINIVAS RAO / DATE OF HEARING : 30 TH AUGUST, 2012 / DATE OF PRONOUNCEMENT : 12 TH SEPT, 2012 / O R D E R PER BENCH : THESE GROUP OF APPEALS BY THE GROUP OF THREE ASSESSEES ARE DIRECTED AGAINST THE THREE SEPARATE ORDERS OF CIT PASSED UNDER SECTION 263 AND THE FOURTH APPEAL IS AGAINST THE ORDER DATED 27-11- 2008 OF CIT(A) ARISING FROM THE CONSEQUENTIAL ORDER, PASSED BY THE ASSESSING OFFICER IN PURSUANT TO THE REVISION ORDER OF CIT(A) PASSED UNDER SECTION 263 FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEES RAISED COMMON GROUNDS IN ALL THE APPEALS AGAINST THE REVISION ORDER UNDER SECTION 263 AS UNDER :- 1) THE COMMISSIONER OF INCOME TAX CENTRAL-1, MUMBAI HAS GROSSLY ERRED IN CANCELLING T HE ASSESSMENT MADE U/S 153A R.W.S. 143(3) BY THE THEN AC IT, CC-12 BY INVOKING THE PROVISIONS OF SECTION 263, MERELY ON THE BASIS OF COMPARING THE INCOMPLETE DATA WITH AUDITED ACCOUNTS AND WITHOUT BRINING ON RECORD ANY MATERIAL TO SHOW ANY INFIRMITIES IN AUDITED ACCOUNTS. 2) THE CIT CENTRAL HAS ERRED IN NOT APPRECIATING THE FACT THAT THE THEN AO HAD ALREADY COMPARED AND VERIFIED THE DETAILS OF INCOMPLETE DATA WITH THAT OF THE AUDIT ED ACCOUNTS AND THAT ASSESSMENT WAS COMPLETED ON THE BASIS OF SUCH AUDITED AND COMPLETE ACCOUNTS AND HENCE T HE SAID ORDER COULD NOT BE TREATED AS ERRONEOUS OR FOR THAT MA TTER PREJUDICE TO THE INTEREST OF THE REVENUE AND T HEREFORE HIS ACTION OF CANCELLING THE ASSESSMENT U/S 263 SHOULD BE SET ASIDE/STRUCK OFF. 3) THE CIT CENTRAL HAS ERRED IN NOT ALLOWING PROPER OPPORTUNITY TO PRESENT ITS CASE AND TO EXPLAIN THE ALLEGED DIFFERENCE WHICH WAS ALREADY EXPLAINED BEFORE T HE AO AND THEREBY HAS VIOLATED THE PRINCIPLES OF NATUR AL JUSTICE AND AS SU CH HIS ORDER U/S 263 SHOULD BE STRUCK OFF. ITA NOS :3316,3317, 3319/08 & 6573/10 3 4) ON PERUSAL OF THE ORDER IT IS SEEN THAT THE COMMISSIONER OF INCOME TAX CENTRAL-1, MUMBAI HAS REOPENED THE CASE MERELY ON SUSPICION AND NOT ON THE BASIS OF ANY MATERIAL WHICH COULD LEAD TO ANY BASE TO ASCERTAI N THAT INCOME HAD ESCAPED THE ASSESSMENT. AND THEREFORE THE AC TION OF THE CIT CENTRAL-1 IN INVOKING THE PROVISIONS OF SECTIO N 263 IS NOT ONLY VIOLATIVE OF JURISPRUDENCE BUT IS ALSO BAD IN LAW AS SUCH AS THE SAME SHOULD BE STRUCK OFF. 3. THERE WAS A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF INCOME TAX ACT CARRIED OUT ON 15-10-2003, WHICH WAS FINALLY CONCLUDED ON 2-12-2003. A SURVEY OPERATION UNDER SECTION 133A OF THE INCOME TAX ACT WAS ALSO CARRIED OUT AT THE VARIOUS PREMISES OF THE GROUP CONCERNED OF THE ASSESSEES. DURING THE SEARCH AND SURVEY ACTION, FLOPPY DRIVES WERE FOUND AND SEIZED CONTAINING THE ACCOUNTS OF THE ASSESSEES. THE ASSESSMENT IN CA SE OF ALL THE ASSESSEES WERE FRAMED UNDER SECTION 153A R.W.S.143(3). SUBSEQUENTLY, THE CIT PROPOSED TO REVISE THE ASSESSMENT MAINLY ON THE GROUND THAT THESE FLOPPIES REVEAL THAT THERE IS A SE COND SET OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT IN RESPECT OF GROUP CONCERNS FOR THE FINANCIAL YEAR UNDER CONSIDERATION AND COMPARISON OF THE SAME WITH THE FINAL ACCOUNTS OF THE ASSESSEES REVEAL INFLATION OF EXPENSES. AFTER CONSIDERING THE REPLY AND EXPLANATION OF THE ASSESSEE AS WELL AS THE SEIZED MATERIAL, THE COMMISSIONER HEL D THAT THE ASSESSMENT MADE UNDER SECTION 153A R.W.S. 143(3) IN RESPECT OF THE GROUPS CONCERNS SUBJECTED TO SEARCH AND SEIZURE ACTION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ARE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE IN RESPECT OF NON-EXAMINATION OF INFLATION OF EXPENSES IS ITA NOS :3316,3317, 3319/08 & 6573/10 4 INVOLVED. ACCORDINGLY, THE CIT(A) SET ASIDE THE ASSESSMENTS AND DIRECTED THE ASSESSING OFFICER TO MAKE THE FRESH ASSESSMENT. 3.3 WE HAVE THE LEARNED AR OF THE ASSESSEE AND LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RE CORD. AT THE OUTSET, WE NOTE THAT IN THE ANOTHER GROUP CONCERN OF THE ASSESSEES IN THE CASE OF SHRI AKHTAR HUSSAIN KHAN VS. CIT, IN ITA NO.3769/M/2008, VIDE ORDER DATED 27-7-2011 , AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL AND IT WAS HELD THAT WHEN THE ASSESSING OFFICER PASSED AN ORDER WITHOUT APPLICATION OF MIND, THE ORDER SO PASSED BY HIM, IS ERRONEOUS AND EXERCISE OF JU RISDICTION BY THE CIT UNDER SECTION 263, IS PROPER AND JUSTIFIED. HOWEVER, LEARNED AR OF THE ASSESSEE HAS TRIED TO DISTINGUISH THE EARLIER ORDER OF THIS TRIBUNAL DATED 27-7-2011 AND SUBMITTED THAT THE ASSESSING OFFICER HAS DULY EXAMINED THE CONTENTS OF FLOPPIES AND THEREAFTE R PASSED THE ASSESSMENT ORDER UNDER SECTION 153A R.W.S. 143(3), THEREFORE, IF THE ASSESSING OFFICER HAS VERIFIED THE DETAILS THEN MERELY BECAUSE THERE IS NO MENTION IN THE ASSESSMENT ORDER BY ITSELF IS NOT SUFFICIENT TO HOLD THE ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. 3.4 LEARNED AR HAS SUBMITTED THAT IN THE MAZHARNAMA DATED 21-3- 2006, A COPY OF WHICH HAS BEEN PL ACED AT PAGE NO.57 OF THE PAPER BOOK, IT HAS BEEN CLEARLY MENTIONED THAT THE ACIT/AO OPENED THE SEAL OF THE FLOPPIES ALLEGEDLY CONTAI NING THE SECOND SET OF BOOKS OF ACCOUNTS IN THE PRESENCE OF TWO WITNESSES AND AFTER TAKING OUT THE ITA NOS :3316,3317, 3319/08 & 6573/10 5 COMPUTER BACK UP, WERE AGAI N SEALED AND SIGNED BEFORE THE WITNESSES. THUS, THE ASSESSING OFFICER HAS APPLIED HIS MIND WHEREAS THE COMMISSION HAS NOT CARRIED OUT PROPER ENQUIRES OR VERIFICATION ON HIS OWN BUT MERELY RELIED UPON THE LETTER OF DDIT. HENCE, THE CIT CANNOT REVISE THE ORDER MERELY BECAUSE HE DISAGREED WITH THE CONCLUSION OF THE ASSESSING OFFICE R. IN SUPPORT OF HIS CONTENTION, LEARNED AR OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GEBRIAL INDIA LIMITED, REPORTED IN 203 ITR 108 AS WELL AS THE DECIS ION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GOYAL PRIVATE FAMILY SPECIFIC TRUST, REPORTED IN 171 ITR 698 (ALL.) . LEARNED AR HAS SUBMITTED THAT IN THE EARLIER ORDER IN CASE OF SHRI AKHTAR HUSSAIN KHAN, THE MAZHARNAMA HAS NOT BEEN CONSIDERED BY THIS TRIBUNAL, THEREFORE, THE SAID ORDER CANNOT BE A BINDI NG PRECEDENT. LEARNED AR OF THE ASSESSEE HAS ALSO RELIED UPON A SERIES OF DECISIONS AND SUBMITTED THAT THE CONCLUSION OF CIT THAT THE OR DER IS ERRONEOUS IS NOT MATER OF SUBJECTIVE SATISFACTION OF COMMISSI ONER BUT THIS SHOULD BE FOUNDED ON OBJECTIVE MATERIAL AFTER EXAMIN ING THE CONTENTION RAISED BY THE ASSESSEE. THERE SHOULD BE AN ACTUAL E RROR EITHER OF FACT OR OF LAW AND CANNOT BE AN ERROR BASED ON POSSIBILITY OR GUESS WORK. THE COMMISSIONER CANNOT INITIATE FISHING AND ROWING ENQUIRY IN THE ORDER WHICH ARE ALREADY CONCLUDED. ITA NOS :3316,3317, 3319/08 & 6573/10 6 3.5 ON THE OTHER HAND, LEARNED DR HAS SUBMITTED THAT THE MAZHARNAMA SHOWS THAT THE FL OPPIES WERE OPENED AND SEALED AGAIN BY THE ASSESSING OFFICER BUT DETAILS WERE NOT AT ALL CONSIDERED OR EXAMINED. HE HAS FURTHER SUBMITT ED THAT THIS TRIBUNAL HAS ALREADY CONSIDERED AND DECIDED THIS ISSUE IN CASE OF SHRI AKHTAR HUSSAIN KHAN AND WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICAL THEN THERE IS NO REASON TO TAKE A DIFFERENT DECISION. 3.6 WE HAVE HEARD THE LEARNED AR OF THE ASSESSEE AS WELL AS LEARNED DR AND CONSIDERED THE RELEV ANT MATERIAL ON RECORD. AS REGARDS THE CONTENTION OF THE L EARNED AR IS CONCERNED THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND AND TAKE A VIEW, WE NOTE THAT THE MAZHARNAMA SIMPLY SHOWS THAT THE SEALED COMPUTER BACK UP SEIZED FROM THE OFFICE OF THE A SSESSEES AND OTHERS WERE FOUND TO BE INTACT BEFORE IT WAS OPENED AND TOOK OUT THE COMPUTER BACK UP AND AGAIN SEALED AND SIGNED BEFORE THE WITNESSES PRESENT. THIS MAZHARNAMA DOES NOT INDICATE THAT THE ASSESSING OFFICER EXAMINED THE DETAILS IN THE COMPUTER BACK UP SEIZED AND SEALED AT THE TIME OF SEARCH AND SEIZURE BUT ONLY IT WAS VERIFIED THAT THE SEALS WERE INTACT, WHICH WAS OPENED AND IT WAS FOUND AS WORKING AND THEREAFTER AGAIN SEALED AND SIGNED. THUS, THE MAZHARNAMA ITSELF DOES NOT EXHIBIT THAT THE DETAILS OF DATA CONTAINING IN THE COMPUTER BACK UP WERE EXAMINED OR VERIFIED BY THE ASSESSING OFFICE R. THEREFORE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LEARNED AR OF THE ASSESSEE THAT BECAUSE ITA NOS :3316,3317, 3319/08 & 6573/10 7 OF THE MAZHARNAMA, A DIFFERENT DEC ISION CAN BE TAKEN WHEN THE ISSUE HAS ALREADY BEEN CONSIDERED AND ADJUDICA TED BY THIS TRIBUNAL IN THE CASE OF SHRI AKHTAR HUSSAIN KHAN, ONE OF THE GROUP CONCERNED SUBJECTED TO THE SAME SEARCH AND SEIZURE ACTION. THE TRIBUNAL AFTER CONSIDERING THE DETAIL ARGUMENTS OF THE ASSESSEE HAS ADJUDICATED THE ISSUE IN PARA 6 AS UNDER :- 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE RECORDS. IN THE A SSESSMENT ORDER, THE AO HAS RECORDED THAT THE A.R. OF THE ASSESSEE APPEARED IN RESPONSE TO THE NOTICE FROM TIME TO TIME AND FIL ED DETAILS CALLED FOR, PRODUCED THE BOOKS OF ACCOUNT AND EXPLANATION. AS FAR AS THE ISSUE OF INFLATION OF THE EXPENDITURE, WHICH IS THE SUBJEC T MATTER OF THE REVISION ORDER, IS CONCERNED, IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT DISCUSSED THIS ISSUE AT ALL. TH ERE IS NO TRACE OF ANY EXAMINATION OF THIS ISSUE BY THE AO WHILE PASSING THE ASSESSMENT ORDER. THERE IS NO DOUBT THAT WHEN TWO VIEW S ARE POSSIBLE ON AN ISSUE AND THE AO HAS TAKEN ONE OF THE POSSIBLE VI EWS, THEN, WHILE EXERCISING THE JURISDICTION U/S.263, T HE CIT CANNOT TAKE A DIFFERENT VIEW ON THE ISSUE. WHILE FRAMING THE ASSESSMENT, THE AO HAS NOT DISCUSSED ANYTHING WITH REGARD TO ADDRESSING T HE ISSUE OF INFLATED EXPENDITURE. EVEN FROM THE RECORDS, IT IS CLEAR THAT THE AO HAS NOT EVEN MADE ANY ENQUIRY ON THIS ISSUE. THE RE CORDS AND DETAILS FILED BY THE ASSESSEE ALSO DO NOT DIRECT TO EX PLAIN OR REPLY ON THE ISSUE OF INFLATION OF EXPENDITURE. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS FURNISHED ANY EXPL ANATION OR PRODUCED THE RELEVANT RECORDS TO SATISFY THE REASONS OF DIFFERENCE IN THE EXPENDITURE RECORDED IN THE FLOPPY DRIVE AND IN THE FINAL BOOKS OF ACCOUNT OF THE ASSESSEE. THE CIT HAS CATEGORICAL LY RECORDED THE FACT THAT THE ASSESSEE IN THE FINAL BOOKS OF ACC OUNT IN COMPARISON TO THE SEIZED DOCUMENTS OF ANNEXURE-6 INFLATED THE EXPENDITURE IN RESPECT OF TOWING EXPENSES OF ` .31,81,403/-, SALARY, WAGES & LABOUR EXPENDITURE AT ` .16,79,163/-. WHEN THE EMPL OYEES WORKING AT THE SITE WERE BEING PAID ON DAILY BA SIS AND THE EXPENSES WERE DEBITED AT THE END OF EACH DAY, THEN THERE IS NO JUSTIFICATION IN THE CLAIM OF THE ASSESSEE THAT TOWING, SALARY, WAGES & LABOUR EXPENSES ARE BOOKED ONLY AT THE END OF THE FINANCIAL YEAR . THE NATURE OF THE EXPENSES IS SUCH THAT THEY ARE INCURRED ON DAY TO DAY BASIS OF THE BUSINESS TRANSACTIONS AND, THEREFORE, THEY ARE RECORDED ON DAY TO DAY BASIS. THEREFORE, WHEN THESE EXPENSES WERE NOT FOUND RECORDED AT THE TIME OF SEARCH, THERE IS SUFFICIENT GROUND WITH THE CIT IN HOLDING THAT IN THE ABSENCE OF ANY ENQUIRY AND VERIFICATION BY THE AO, THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF RE VENUE. WHEN THE AO HAS NOT AT AL DISCUSSED OR GIVEN ANY FINDING ON T HESE ISSUES AND THERE IS NOTHING ITA NOS :3316,3317, 3319/08 & 6573/10 8 IN THE ASSESSMENT TO SUGGEST OR EXHIBIT ANY THOUGHT PROCESS ON THE PART OF THE AO IN ADDRESSING T HE ISSUES IN QUESTION, THEN, UNDOUBTEDLY, THERE IS NO APPL ICATION OF MIND ON THE PART OF THE AO AS REGARDS THE ISSUES ON WHICH THE REVISION ORDER HAS BEEN PASSED. WHEN THE AO PASSED AN ORDER WITHOUT APPLICAT ION OF MIND, THE ORDER SO PASSED BY HIM IS ERRONEOUS AND EXERCISE OF JURISDICTION BY THE CIT U/S. 263 IS PR OPER AND JUSTIFIED. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF T HE CONSIDERED OPINION T HAT THERE IS NO ERROR OR ILLEGALITY IN THE IM PUGNED ORDER OF CIT PA SSED WHILE EXERCISING JURISDICTION U/S. 263. THE CASE RE LIED UPON BY THE LD. A.R. DOES NOT HELP THE CASE OF THE ASSESSEE BECAUS E IN THE CASE IN HAND THE AO HAS NOT MADE EVEN AN ATTEMPT TO VERI FY AND ADJUDICATE THE ISSUE. FURTHER, THE ASSESSEE HAS ALSO NOT BEEN ABLE TO SHOW THAT THE RELEVANT RECORD OR EXPLANATION HAS BEEN PRODUCED BE FORE THE AO ON THIS ISSUE. ACCORDINGLY, THE SAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE AP PEAL OF THE ASSESSEE IS DEVOID OF MERITS. 3.7 WHEN THE ASSESSMENT ORDER IS SILENT AND DOES NOT INDICATE THAT THE ASSESSING OFFICER HAS APPLIED I TS MIND ON THE ISSUE WHICH IS SUBJECT MATTER OF THE REVISION ORDER THEN IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS TAKEN A VIEW OF THIS ISSUE. WE FURTHER NOTE THAT NO QUERY WAS RAISED BY THE ASSESSIN G OFFICER REGARDING THE DIFFERENCE OF THE EXPENDITURE BOOKED BY THE ASSESSEE IN FINAL ACCOUNTS AND THE ACCOUNTS FOUND IN THE FLOPPY AT THE TIME OF SEARCH. FURTHER, NO SUCH EXPLANATION WAS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PASSED UNDER SECTION 153A R.W.S. 143(3) EXPLAINING THE DIFFER ENCE OF EXPENDITURE BOOKED BY THE ASSESSEE IN THE FINAL ACCOUNTS AND HOW IT IS DIFFERENT FROM THE ACCOUNTS FOUND IN THE FLOPPY. THEREFORE, THER E IS NO MATERIAL ON RECORD TO SUGGEST THAT THIS ISSUE OF INFLATED EXPENDITURE IN THE FINAL ACCOUNTS IN COMPARISON TO THE ACCOUNTS FOUND IN THE FLOPPY WAS EITHER CONSIDERED, VERIFIED, EXAMINED OR ADJUDICATED BY THE ASSESSING OFFICER. IN VIEW OF ITA NOS :3316,3317, 3319/08 & 6573/10 9 THE ABOVE FACTS, WE DO NOT FIND ANY REASON TO TAKE A DIVERGENT VIEW FROM THE VIEW TAKEN BY THE COORDINATE BENCH IN THE CASE OF SHRI AKHTAR HUSSAIN KHAN AND ONE OF US THE JUDICIAL MEMBER IS THE AUTHOR OF THE SAID DECISION. HENCE, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DECIDE THE ISSUE OF VALIDITY OF REVISION ORDER PASSED UNDER SECTION 263 AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 4 . IN ITA NO.6573/M/2010 , THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX(APPEAL S) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE A SSESSING OFFICER AMOUNTING TO ` .2809794 WITHOUT APPRECIATING THE RECORDS AVAILABLE ON FILE AND HENCE THE SAME BEING BAD IN LAW SHOULD BE DELETED.. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO BY MERELY COMPARING THE AUDITED ACCOUNTS WITH THE INCOMPLETE AUDITED ACCOUNTS WITHOUT BRINGING ON RECO RD ANY DISCREPANCIES IN AUDITED ACCOUNTS WHICH WAS DULY EXPLAINED ALONG WITH REQUISITE DETAILS FILED AND THEREFORE THE ADDITIONS MADE BY THE AO IS PURELY BASED ON CONJECTURE AND SU RMISE AND THE SAME SHOULD BE DELETED. 3. THE LD. CIT(A) HAS ERRED IN COMING TO THE CONCLUSION THAT THE APPELLANT HAD NOT DISP UTED THE AUTHENTICITY AND VERACITY OF THE FLOPPIES FOUND DURING SEARCH WHER EAS IT WAS ALWAYS A CASE OF THE ASSESSEE THAT DATA AVAILABL E ON SEIZED FLOPPIES DID NOT REFLECT THE COMPLETE PICTURE OF ITS ACCOUNTS FOR THE YEAR ENDED ON 31.03.2003 AND SINCE THE ORDER OF THE LD. CIT(A) IS BASED ON MISCONCEIVED FACT DESERVES TO BE STRUCK OFF AND ADDITIONS MADE NEEDS TO BE DELETED. 4. THE LD. CIT(A) HAS ERRED IN INVOKING THE PROVISIONS OF SEC.292C MECHANICALLY AND WIT HOUT APPLICATION OF MIND AND WITHOUT APPRECIATING THE TRUE NATURE OF ARGUMENTS PLACED BEFORE HIM AND AS SUCH THE ORDER PASSED BY THE LD. CIT(A) LACKS THE SANCTITY AND DESERVES TO BE STRUCK OFF AND CONSEQUENTLY THE ADDITIONS MADE BY THE AO BE DELETED. 5. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE MATERIAL PRODUCED BEFORE HIM IN SUPPORT OF THE ARGUMENT WHERE EACH AND EVERY EXPENDITURE BEI NG SUBJECT MATTER OF ADDITIONS BY THE AO WERE EXPLAINED AND THEREBY T HE LD. CIT(A) HAS VIOLATED THE ITA NOS :3316,3317, 3319/08 & 6573/10 10 PRINCIPLES OF NATURAL JUSTICE AND AS SUCH THE ORDER PASSED BY THE LD. CIT(A) DESERVES TO BE STRUCK OFF. RELIEF CLAIMED : 1. THE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) BEING HAD IN LAW BE DELETED. 2. THE ORDER PASSED BY THE LD. CIT(A) LACKS SANCTITY AND BEING VIOLATIVE OF NATURAL JUST ICE SHOULD BE STRUCK OFF. 3. THE APPELLANT CRAVES THE RIGHT TO ADD, AMEND, ALTER, MODIFY AND OR SUBSTITUTE ANY OR ALL THE GROU NDS OF APPEAL AT THE TIME OF HEARING. 4.1 THE MAIN CONTENTION OF THE LEAR NED AR OF THE ASSESSEE IS THAT WHILE MAKING THE ADDITION UNDER SECTION 143(3), THE ASSESSING OFFICER HAS NOT VERIFIED AND EXAMINED THE ALLEGED INFLATION OF EXPENDITURE AND HAS NOT GIVEN A FINDING THAT THE EXPENDITURE SHOWN IN THE FINAL AUDITED ACCOUNTS ARE NOT ACTUALLY INCURRED AND ARE BOGUS. THE ASSESSING OFFICER HAS SIMPLY GONE BY THE COMPARISON OF THE EXPENDITURE RECORDED IN THE ACCOUNTS AS FOUND IN THE FLOPPY, WHICH WERE NOT COMPLETE ACCOUNTS. THEREFORE, TO MAKE THE ADDITION ON THIS GROUND, THE ASSESSING OFFICER WAS REQUIRED TO GIVE A FINDING THAT THE EXPENDITURE AS BOOKED BY THE A SSESSEE ARE NOT GENUINE BUT BOGUS ONE AND, HENCE, NO DISALLOWANCE C AN BE MADE ON THE BASIS OF INCOMPLETE ACCOUNTS AS CONTAINED IN THE FLOPPY. ON THE OTHER HAND, LEARNED DR HAS SUBMITTED THAT WHEN THE ASSESSEE HAS NOT APPEARED BEFORE THE ASSESSING OFFICER AND NO EXPLANATION WAS FURNISHED THEN THE ASSESSING OFFICER IS JUSTIFIED TO MAKE THE ADDITION BEING THE DIFFERENCE BETWEEN TWO SETS OF BOOK S OF ACCOUNTS. IN REBUTTAL, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT ALL THE DETAILS REGARDING THE EXPENDITURE WHICH IS BOOKED IN TH E FINAL AUDITED ACCOUNTS WERE ITA NOS :3316,3317, 3319/08 & 6573/10 11 FURNISHED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT UNDER SECTION 153A R.W.S. 143(3). THEREFOR E, EVEN IF THE ASSESSEE DID NOT APPEAR FOR WANT OF RELEVANT RECORD AS DEMANDED BY THE ASSESSEE FROM THE DEPARTMENT, THE ASSESSING OFFI CER WAS DUTY BOUND TO EXAMINE THE RECORD AND THEN DECIDE THE ISSUE. 4.2 WE HAVE CONSIDERED THE SUBMI SSIONS OF LEARNED AR OF THE ASSESSEE AS WELL AS LEARNED DR AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THOUGH THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER IN THE PROCEEDI NGS IN PURSUANCE TO THE REVISION ORDER PASSED UNDER SECTION 263, HOWEVER, THE ASSESSING OFFICER BEING A QUASI-JUDICIAL AUTHORITY IS SUPPOSED TO ADJUDICATE THE ISSUE BY CONSIDERING ALL THE RELEVANT MATERI AL AVAILABLE BEFORE THE ASSESSING OFFICER. IT IS DISCERNIBLE FROM T HE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT EXAMINED ANY MATERIAL ON RECORD WHILE DECIDING THE ISSUE OF INFLATED EXPENDITURE. THE ASSESSING OFFICER HAS MADE ADDITIONS SIMPLY ON THE BASIS OF DIFFERENCE FOUND BETWEEN THE DETAILS CONTAINING IN THE FLOPPY SEIZED DUR ING THE SEARCH AND THE EXPENDITURE BOOKED IN THE AUDITED FINAL ACCOUNTS OF THE ASSESSEE. THUS, WE FIND FORCE IN THE CONTENTION OF THE LEAR NED AR OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS MADE ADDITION MECHANICALLY WITHOUT PROPER EXAMINATION OF THE RECORD. WE FURT HER NOTE THAT THE CIT(A) HAS ALSO NOT MADE ANY EFFORT TO GET THE ISS UE PROPERLY EXAMINED AND DISMISSED THE APPEAL OF THE ASSESSEE ON THE BASIS OF PRESUMPTION RAISED UNDER ITA NOS :3316,3317, 3319/08 & 6573/10 12 SECTION 292C. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE , WE SET ASIDE THE MATTER IN THE APPEAL ARISING FROM THE ASSESSMENT ORDER PASSED IN PURSUANCE TO THE REVISION ORDER UNDER SECTION 263 IN CASE OF AKHTAR HUSSAIN KHAN TO THE RECORD OF THE ASSESSING OFFICER TO REDO THE SAME AFTER CONSIDERING THE RELEVANT MATERIAL ON RECORD AS WELL AS THE CONTENTION OF THE ASSESSEE. NEEDLESS TO SAY THE A SSESSEE BE GIVEN AN OPPORTUNITY OF HEARING BEFORE PASSING THE FRESH ORDER . THUS, APPEAL OF THE ASSESSEE (I.E. ITA NO.6573/10) IS ALLO WED FOR STATISTI CAL PURPOSES. 9 . IN THE RESULT, APPEALS OF THE ASSESSEES I.E. ITA NOS.3316, 3317 & 3319/M/2008 ARE DISMISSED AND ITA NO.6573/M/2010 IS ALLOWED FOR STATISTICAL PURPOSES . ./ITA NOS.3316, 3317 & 3319/M/2008 ./ITA NO.6573/M/2010 ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPT., 2012 . 12 TH SEPT.,2012 SD/- SD/- ( ) ( ) ( RAJENDRA) ( VIJAY PAL RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED 12 TH / SEPT. /2012 . . / PKM. . ./PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT ITA NOS :3316,3317, 3319/08 & 6573/10 13 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI