DY. C.I.T.2(1), RAIPUR (CG) V. M/S AMISHA -IN-SKY CONSTRUCTIONS, RAIPUR (CG)

ITA 351/BIL/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3528 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHETAL VERMAD R
• Assessee Lawyers: SUMIT VERMASR
• Keywords: Rejection of books of accounts; Capital asset; Business income; Income from undisclosed sources; Loose papers; Tax effect; TDS
• Section: 40A(3); 40(a)(ia); 145; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER) ITA. NO: 351 TO 354/RPR/2014 (ASSESSMENT YEAR: 2009-10 TO 2012-13) DY. COMMISSIONER OF INCOME TAX-2(1), RAIPUR (C.G) V/S M/S. AMISHA-IN-SKY CREATIONS, SHRIRAM HEIGHTS, ST. XAVIER SCHOOL ROAD, AVANTI VIHAR, RAIPUR (C.G.) (APPELLANT) (RESPONDENT) PAN: AAOFA 8279M APPELLANT BY : SMT. SHETAL VERMA,D.R. RESPONDENT BY : SHRI SUMIT VERMA,SR.ADV. ( )/ ORDER DATE OF HEARING : 07 -03-201 8 DATE OF PRONOUNCEMENT : 16 -04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. ITA NOS. 351 TO 354/RAIPUR/2014 ARE FOUR APPEALS BY THE REVENUE PREFERRED AGAINST FOUR SEPARATE ORDERS OF THE LD. CIT(A), RAI PUR PERTAINING TO A.YS. 2009- 10 TO 2012-13. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 2 2. SINCE THE COMMON ISSUES ARE INVOLVED IN THE IMPUGNE D APPEALS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COM MON FOR THE SAKE OF CONVENIENCE. 3. IN ITA NOS. 351 & 352/RAIPUR/2014, THE TAX EFFECT O N THE IMPUGNED RELIEF GIVEN BY THE LD. CIT(A) IS LESS THAN RS. 10 LACS. T HEREFORE, BOTH THESE APPEALS HAVE TO BE DISMISSED IN THE LIGHT OF THE CBDT CIRCU LAR NO. 21 OF 2015 DATED 10.12.2015 BY WHICH THE BOARD HAS DIRECTED THE REVE NUE NOT TO PREFER APPEAL BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS TH AN RS. 10 LACS. IN THE LIGHT OF THE CBDT CIRCULAR, ITA NOS. 351 & 352/RAIPUR/2014 A RE DISMISSED. ITA NO. 353/RAIPUR-2014 REVENUES APPEAL FOR A.Y. 2 011-12 4. THE FIRST GROUND RELATES TO THE DELETION OF THE DIS ALLOWANCE OF RS. 1,33,26,552/- ON ACCOUNT OF ADMINISTRATIVE AND SELLING EXPENSES. 5. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE DERIVES INCOME FROM REAL ESTATE BUSINESS MAINLY AS DEVELOPER AND BUILDE R OF HOUSING PROJECTS. THE ASSESSEE ENTERS INTO AGREEMENT FOR SALE BY BOOKING FLATS ON PAYMENT OF INITIAL BOOKING AMOUNT AND THE BALANCE SALE CONSIDERATION I S REALIZED IN INSTALLMENTS LINKED WITH PROGRESS OF CONSTRUCTION. WHILE SCRUTIN IZING THE RETURN OF INCOME FOR THE YEAR, THE A.O. NOTICED THAT THE ASSESSEE HA S SHOWN NET LOSS OF RS. 1,33,26,552/-. THE A.O. FOUND THAT THE YEAR UNDER C ONSIDERATION IS THE THIRD YEAR OF EFFECTIVE BUSINESS INSOFAR AS THE PROJECTS WERE STARTED IN THE PRECEDING PREVIOUS YEAR. THE A.O. FURTHER NOTICED THAT ONLY 2 0% PROGRESS IN GOLDEN TOWERS AND 40% PROGRESS IN PROJECT GOLDEN SKY WAS M ADE. THE A.O. WAS OF THE OPINION THAT SINCE THE PROJECTS WERE NOT COMPLE TED AND NO TRANSACTION OF ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 3 SALE HAS BEEN MADE, IT CANNOT BE SAID THAT THE ASSE SSEE HAS COMMENCED ITS BUSINESS AND THEREFORE THE EXPENSES CHARGED TO THE PROFIT AND LOSS ACCOUNT SHOULD BE TREATED AS PRE-OPERATIVE EXPENSES AND TO BE CONSIDERED AS WORK-IN- PROGRESS. ON THIS BELIEF, THE A.O. DISALLOWED RS. 1 ,33,26,552/-. 6. ASSESSEE VEHEMENTLY AGITATED THE MATTER BEFORE THE LD. CIT(A) AND STRONGLY CONTENDED THAT ONLY THE INDIRECT EXPENSES HAVE BEEN CHARGED TO THE PROFIT AND LOSS ACCOUNT. IT WAS BROUGHT TO THE NOTICE OF THE L D. CIT(A) THAT THE ASSESSEE HAS COMMENCED ITS BUSINESS AND THEREFORE AS PER THE PROVISIONS OF SECTION 145 OF THE ACT. THE PROFITS AND GAINS OF THE PREVIOUS Y EAR ARE REQUIRED TO BE COMPUTED IN ACCORDANCE WITH THE RELEVANT ACCOUNTING STANDARD. 7. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS OF THE OPINION THAT THE OBSERVATION OF THE A.O. THAT THE A SSESSEE HAS NOT COMMENCED ITS BUSINESS IS COMPLETELY WRONG AS THE COMMENCEMEN T OF REAL ESTATE BUSINESS WOULD NORMALLY START WITH THE ACQUISITION OF LAND O R IMMOVABLE PROPERTIES. THE LD. CIT(A) WAS CONVINCED WITH THE CLAIM OF EXPENDIT URE AND ACCORDINGLY DELETED THE DISALLOWANCE OF RS. 1,33,26,552/-. 8. BEFORE US, THE LD. D.R. STRONGLY SUPPORTED THE FIND INGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE ASSESSEE HAD PU RCHASED THE LANDS IN EARLIER YEARS ON WHICH IT HAS STARTED CONSTRUCTING FLATS. T HEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT COMMENCED ITS BUSINESS. A PERU SAL OF THE PROFIT AND LOSS ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 4 ACCOUNT EXHIBITED AT PAGE 63 OF THE PAPER BOOK SHOW N THAT DURING THE YEAR , THE ASSESSEE HAS SHOWN SALES AT RS. 41,39,500/- ON WHIC H COST OF CONSTRUCTION IS SHOWN AT RS. 12.15 CRORES AND ADMINISTRATIVE AND SE LLING EXPENSES AT RS. 1.42 CRORES. 10. THE DETAILS OF ADMINISTRATIVE AND SELLING EXPENSES ARE AS UNDER:- SCHEDULE K ADMINISTRATIVE & SELLING EXPENSES AMOUNT IN RS. GOLDEN TOWER AUDIT FEES ADVERTISEMENT EXP. COMMISSION ELECTRICITY EXP. INSURANCE INTEREST ON TDS LEGAL EXPENSES PRINTING & STATIONARY REPAIR & MAINTENANCE SALARY TELEPHONE & MOBILE EXP. TDS EXP. GOLDEN SKY ADVERTISEMENT EXP. INTEREST ON TDS LEGAL EXP. OFFICE EXP. PRINTING & STATIONARY PETROL & DIESEL EXP. REGISTRY EXP. REPAIRS & MAINTENANCE SALARY SERVICE TAX SECURITY CHARGES BALANCE WRITTEN OFF TELEPHONE & MOBILE EXP. TRAVELLING EXP. TOTAL 5515.00 608006.00 11375000.00 15480.00 17044.00 17416.00 16721.00 137484.00 23283.00 410000.00 24979.00 27667.00 12678595.00 6863.00 23165.00 17500.00 103999.00 22888.00 27940.00 129626.00 1500.00 981800.00 48075.00 4424.00 14621.93 47462.00 158587.00 1586450.93 14265045.93 11. FROM THE ABOVE, IT CAN BE SEEN THAT ONLY INDIRECT E XPENSES HAVE BEEN CHARGED TO THE PROFIT AND LOSS ACCOUNT AND ALL OTHER DIRECT EXPENSES HAVE BEEN SHOWN AS PART OF WORK-IN-PROGRESS. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 5 DHOOMKETU BUILDERS & DEVELOPMENT (P.) LTD. 87 DTR 2 49 HAS HELD THAT THE COMMENCEMENT OF REAL ESTATE BUSINESS WOULD NORMALLY START WITH THE ACQUISITION OF LAND OR IMMOVABLE PROPERTY. IN ANOTH ER CASE, THE HONBLE HIGH COURT OF DELHI 301 ITR 368 HAS HELD THAT BUSINESS C OMMENCED WITH FIRST PURCHASE OF STOCK IN TRADE, THE DATE WHEN THE FIRST SALE IS MADE IS NOT MATERIAL IN THAT RESPECT. MOREOVER, ACCOUNTING STANDARD 7 ISSUE D BY THE ICAI STATES THAT IN CASES WHERE THE EXPENDITURE COULD NOT BE ATTRIBUTED TO A PARTICULAR ACTIVITY CARRIED ON BY THE ASSESSEE, THE SAME MAY BE ALLOWED AS A PERIOD COST. 12. CONSIDERING THE FACTS IN TOTALITY, IN OUR CONSIDERE D OPINION, THE INDIRECT EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT ARE NOT PRE-OPERATIVE EXPENSES AND THESE DESERVE TO BE ALLOWED AS EXPENSES AND CAR RIED FORWARD OR SET OFF AS PER THE PROVISIONS OF THE ACT. WE DO NOT FIND ANY E RROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). GROUND NO. 1 IS ACCORDI NGLY DISMISSED. 13. GROUND NO. 2 RELATES TO THE DELETION OF THE DISALLO WANCE U/S. 40A(3) OF THE ACT AMOUNTING TO RS. 56.26 LACS. 14. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS AND DRAWING SUPPORT FROM THE ENTRIES FOUND ON LOOSE PAPERS IMPOUNDED FR OM THE PREMISES OF THE ASSESSEE, THE A.O. FOUND THAT THE ASSESSEE HAS INCU RRED EXPENDITURE OF SUBSTANTIAL AMOUNTS TOWARDS PURCHASE OF LANDS AND T HE PAYMENTS HAVE BEEN MADE IN CASH IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THE A.O. WAS OF THE OPINION THAT SINCE THE ASSESSEE IS A DEV ELOPER AND BUILDER AND THE SAID EXPENDITURE WAS ESSENTIALLY INCURRED FOR PURCH ASE OF STOCK IN TRADE AND SINCE THE SAID EXPENDITURE HAS BEEN INCURRED IN VIO LATION OF SECTION 40A(3) OF THE ACT, THE AMOUNT OF RS. 56.20 LACS WAS DISALLOWE D. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 6 15. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND POINTED OUT THAT THE IMPUGNED LANDS WERE PURCHASED AS CAPITAL ASSETS AND WERE CONVERTED INTO STOCK IN TRADE ON 31.03.2011. THEREFORE, IT CANNOT BE SAI D THAT THE LANDS WERE PURCHASED AS STOCK IN TRADE. THE ASSESSEE FURTHER C ONTENDED THAT THE A.O. HAS NOT DOUBTED THE GENUINENESS OF THE TRANSACTION AND THE CONSIDERATION PAID IN CASH WAS ON ACCOUNT OF BUSINESS EXPEDIENCY. 16. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS CONVINCED WITH THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 56.20 LACS. 17. BEFORE US, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. 18. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. IT IS NOT IN DISPUTE THAT THE LANDS WERE PURCHASED FOR A CONSIDE RATION OF RS. 56.20 LACS AND THE CONSIDERATION WAS PAID IN CASH. ON IDENTICAL SE T OF FACTS, THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF ANUPAM TELE SERVICE S 366 ITR 122 HAD THE OCCASION TO CONSIDER THE FOLLOWING FACTS:- A.Y. 2009-10.THE ASSESSEE WAS WORKING AS AN AGENT O F TATA TELE SERVICES LIMITED FOR DISTRIBUTING MOBILE CARDS AND RECHARGE VOUCHERS . THE ASSESSEE USED TO MAKE PAYMENT BY ACCOUNT PAYEE CHEQUES. HOWEVER, A CIRCULAR WAS ISSUED BY TATA TELE SERVICE S LIMITED REQUIRING THE ASSESSEE TO DEPOSIT CASH AT THE COMPANY'S OFFICE. T HEREAFTER, IF THE ASSESSEE CONTINUED TO MAKE PAYMENT THROUGH CHEQUES OR DEMAND DRAFT, IT WOULD GET THE RECHARGE VOUCHERS ONLY AFTER 4-5 DAYS WHICH WOULD AFFECT ITS BUSINESS. THE ASSESSEE, THEREAFTER, MADE CASH PAYMENT. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 7 THE ASSESSING OFFICER MADE ADDITION OF IT ON GROUND THAT THE PAYMENT IN CASH EXCEEDING RS. 20,000 VIOLATE THE PROVISIONS OF SECT ION 40A(3) AND DISALLOWED 20 PER CENT OF THE IMPUGNED AMOUNT. ON APPEAL, THE COMMISSIONER (APPEALS) DIRECTED TO D ELETE THE ADDITION ON GROUND THAT TRANSACTION WERE GENUINE AND PAYMENTS WERE ALSO MAD E. ON APPEAL BY THE REVENUE, THE TRIBUNAL ALLOWED SAME. 19. ON THE ABOVE GIVEN FACTS, THE HONBLE GUJARAT HIG H COURT HELD AS UNDER:- IN THE PRESENT CASE, NEITHER THE GENUINENESS OF THE PAYMENT NOR THE IDENTITY OF THE PAYEE WERE IN ANY CASE DOUBTED. THE SE WERE THE CONCLUSIONS ON FACTS DRAWN BY THE APPELLATE COMMISS IONER. THE TRIBUNAL ALSO DID NOT DISTURB SUCH FACTS BUT RELIED SOLELY O N RULE 6DD (J) OF THE RULES TO HOLD THAT SINCE THE CASE OF THE ASSESSEE DID NOT FALL UNDER THE SAID EXCLUSION CLAUSE NOR WAS COVERED UNDER ANY OF THE C LAUSES OF RULE 6DD, CONSEQUENCES ENVISAGED IN SECTION 40A(3) MUST FOLLO W. THUS, THE TRIBUNAL COMMITTED AN ERROR IN COMING TO SUCH A CONCLUSION FOR THE FOLLOWING REASONS: (A) ) THE PARAMOUNT CONSIDERATION OF SECTION 40A(3) I S TO CURB AND REDUCE THE POSSIBILITIES OF BLACK MONEY TRANSACTIONS. AS H ELD BY THE SUPREME COURT IN ATTAR SINGH GURMUKH SINGH V. ITO [19911 19 1 ITR 667/59 TAXMAN 11. SECTION 40A(3) DOES NOT ELIMINATE CONSIDERATIONS O F BUSINESS EXPEDIENCIES. (B) IN THE PRESENT CASE, THE APPELLANT ASSESSEE WAS COM PELLED TO MAKE CASH PAYMENTS ON ACCOUNT OF PECULIAR SITUATION. SUCH SIT UATION WAS AS FOLLOW (I) THE PRINCIPAL COMPANY, TO WHICH THE ASSESSEE WAS A DISTRIBUTOR, INSISTED THAT CHEQUE PAYMENT FROM A CO-OPERATIVE BA NK WOULD NOT DO, SINCE THE REALIZATION TAKES A LONGER TIME; ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 8 (II) THE ASSESSEE WAS, THEREFORE, REQUIRED TO MAKE CASH PAYMENTS ONLY; (III) TATA TELE SERVICES LIMITED ASSURED THE ASSESSEE THA T SUCH AMOUNT SHALL BE DEPOSITED IN THEIR BANK ACCOUNT ON BEHALF OF THE ASSESSEE; (IV) IT IS NOT DISPUTED THAT THE TATA TELE SERVICES LIM ITED DID NOT ACT ON SUCH PROMISE; (V) IF THE ASSESSEE HAD NOT MADE CASH PAYMENT AND RELI ED ON CHEQUE PAYMENTS ALONE, IT WOULD HAVE RECEIVED THE RECHARGE VOUCHERS DELAYED BY 4/5 DAYS AND THEREBY SEVERELY AFFECTING ITS BUSINESS OPERATIONS. THE PAYMENTS BETWEEN THE ASSESSEE AND THE TATA TELE SERVICES LIMITED WERE GENUINE. THE TATA TELE SERVICES LIMITED HAD IN SISTED THAT SUCH PAYMENTS BE MADE IN CASH, WHICH TATA TELESERVICES L IMITED IN TURN ASSURED AND DEPOSITED THE AMOUNT IN A BANK ACCOUNT. IN THE FACTS OF THE PRESENT CASE, RIGORS OF SECTION 40A(3) MUST BE LIFT ED. THE DIVISION BENCH OF THE RAJASTHAN HIGH COURT IN C ASE OF SMT. HARSHILA CHORDIA V. INCOME TAX OFFICER [20081 298 ITR 349 HAD OBSERVED THAT THE EXCEPTIONS CONTAINED IN RULE 6DD ARE NOT EXHAUSTIVE AND THAT THE SAID RULE MUST BE INTERPRETED LIBERALLY. IN THE RESULT, THE QUESTION IS ANSWERED IN FAVOUR OF THE APPELLANT ASSESSEE. 21. IT WOULD ALSO BE PERTINENT TO REFER TO THE REL EVANT OBSERVATIONS MADE BY THE HONBLE GUJARAT HIGH COURT WHICH READS AS UNDER :- 18. IT COULD BE APPRECIATED THAT SECTION 40A AND IN PARTICULAR SUB-CLAUSE (3) THEREOF AIMS AT CURBING THE POSSIBILITY OF ON-M ONEY TRANSACTIONS BY INSISTING THAT ALL PAYMENTS WHERE EXPENDITURE IN EX CESS OF A CERTAIN SUM [IN THE PRESENT CASE TWENTY THOUSAND RUPEES] MUST B E MADE BY WAY OF ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAY EE BANK DRAFT. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 9 AS HELD BY THE APEX COURT IN CASE OF ATTAR SINGH GU RMUKH SINGH (SUPRA), '..IN OUR OPINION, THERE IS LITTLE MERIT IN THIS CON TENTION. SECTION 40A(3) MUST NOT BE READ IN ISOLATION OR TO ME EXCLUSION OF RULE 6DD. THE SECTION MUST BE READ ALONG WITH THE RULE. IF READ TOGETHER, IT WILL BE CLEAR THAT THE PROVISIONS ARE NOT INTENDED TO RESTRICT THE BUSINES S ACTIVITIES. THERE IS NO RESTRICTION ON THE ASSESSEE IN HIS TRADING ACTIVITI ES. SECTION 40A(3) ONLY EMPOWERS THE ASSESSING OFFICER TO DISALLOW THE DEDU CTION CLAIMED AS EXPENDITURE IN RESPECT OF WHICH PAYMENT IS NOT MADE BY CROSSED CHEQUE OR CROSSED BANK DRAFT. THE PAYMENT BY CROSSED CHEQU E OR CROSSED BANK DRAFT IS INSISTED ON TO ENABLE THE ASSESSING AUTHOR ITY TO ASCERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS OUT OF TH E INCOME FROM UNDISCLOSED SOURCES. THE TERMS OF SECTION 40A(3) AR E NOT ABSOLUTE. CONSIDERATIONS OF BUSINESS EXPEDIENCY AND OTHER REL EVANT FACTORS ARE NOT EXCLUDED. GENUINE AND BONA TIDE TRANSACTIONS ARE NO T TAKEN OUT OF THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTA NCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYE E. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECEIVED TH E CASH PAYMENT. RULE 6DD PROVIDES THAT AN ASSESSEE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSSED CHEQUE OR CROSSED BANK DRAFT I N THE CIRCUMSTANCES SPECIFIED UNDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF SECTION 40A(3) AND RULE 6DD THAT THEY ARE INTENDED TO REGUL ATE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO USE BLACK MONEY FOR BUSINESS TRANSACTION S.' 19. IT WAS BECAUSE OF THESE CONSIDERATIONS THAT THIS CO URT IN CASE OF HYNOUP FOODS (P.) LTD. (SUPRA) OBSERVED THAT THE GE NUINENESS OF THE PAYMENT AND THE IDENTITY OF THE PAYEE ARE THE FIRST AND FOREMOST ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 10 REQUIREMENTS TO INVOKE THE EXCEPTIONS CARVED OUT IN RULE 6DD(J) OF THE INCOME-TAX RULES, 1962. 20. IN THE PRESENT CASE, NEITHER THE GENUINENESS OF THE PAYMENT NOR THE IDENTITY OF THE PAYEE WERE IN ANY CASE DOUBTED. THE SE WERE THE CONCLUSIONS ON FACTS DRAWN BY THE APPELLATE COMMISS IONER. THE TRIBUNAL ALSO DID NOT DISTURB SUCH FACTS BUT RELIED SOLELY O N RULE 6DD (J) OF THE RULES TO HOLD THAT SINCE THE CASE OF THE ASSESSEE DID NOT FALL UNDER THE SAID EXCLUSION CLAUSE NOR WAS COVERED UNDER ANY OF THE C LAUSES OF RULE 6DD, CONSEQUENCES ENVISAGED IN SECTION 40A(3) OF THE ACT MUST FOLLOW. 21. IN OUR OPINION, THE TRIBUNAL COMMITTED AN ERROR IN COMING TO SUCH A CONCLUSION. WE WOULD BASE OUR CONCLUSIONS ON THE FO LLOWING REASONS : (A) THE PARAMOUNT CONSIDERATION OF SECTION 40A(3) I S TO CURB AND REDUCE THE POSSIBILITIES OF BLACK MONEY TRANSACTIONS. AS H ELD BY THE SUPREME COURT IN ATTAR SINGH GURMUKH SINGH (SUPRA), SECTION 40A(3) OF THE ACT DOES NOT ELIMINATE CONSIDERATIONS OF BUSINESS EXPED IENCIES. (B) IN THE PRESENT CASE, THE APPELLANT ASSESSEE WAS COMPELLED TO MAKE CASH PAYMENTS ON ACCOUNT OF PECULIAR SITUATION. SUC H SITUATION WAS AS FOLLOW (I) THE PRINCIPAL COMPANY, TO WHICH THE ASSESSEE WA S A DISTRIBUTOR, INSISTED THAT CHEQUE PAYMENT FROM A COOPERATIVE BANK WOULD N OT DO, SINCE THE REALIZATION TAKES A LONGER TIME; (II) THE ASSESSEE WAS, THEREFORE, REQUIRED TO MAKE CASH PAYMENTS ONLY; (III) TATA TELESERVICES LIMITED ASSURED THE ASSESSE E THAT SUCH AMOUNT SHALL BE DEPOSITED IN THEIR BANK ACCOUNT ON BEHALF OF THE ASSESSEE; (IV) IT IS NOT DISPUTED THAT THE TATA TELESERVICES LIMITED DID NOT ACT ON SUCH PROMISE; (V) IF THE ASSESSEE HAD NOT MADE CASH PAYMENT AND RELIED ON CHEQUE PAYMENTS ALONE, IT WOULD HAVE RECEIVED THE RECHARGE VOUCHERS DELAYED BY 4/5 DAYS AND THEREBY SEVERELY AFFECTING ITS BUSINES S OPERATIONS. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 11 22. WE WOULD FIND THAT THE PAYMENTS BETWEEN THE ASS ESSEE AND THE TATA TELESERVICES LIMITED WERE GENUINE. THE TATA TELESER VICES LIMITED HAD INSISTED THAT SUCH PAYMENTS BE MADE IN CASH, WHICH TATA TELESERVICES LIMITED IN TURN ASSURED AND DEPOSITED THE AMOUNT IN A BANK ACCOUNT. IN THE FACTS OF THE PRESENT CASE, RIGORS OF SECTION 40 A(3) OF THE ACT MUST BE LIFTED. 23. WE NOTICE THAT THE DIVISION BENCH OF THE RAJAST HAN HIGH COURT IN CASE OF SMT. HARSHILA CHORDIA V. ITO [2008] 298 ITR 349 (RAJ) HAD OBSERVED THAT THE EXCEPTIONS CONTAINED IN RULE 6DD ARE NOT EXHAUS TIVE AND THAT THE SAID RULE MUST BE INTERPRETED LIBERALLY. 20. CONSIDERING THE FACTS OF THE CASE IN HAND IN THE LI GHT OF THE AFOREMENTIONED DECISION OF THE HONBLE GUJARAT HIGH COURT, WE HAVE NO HESITATION TO HOLD THAT IN THE PRESENT CASE ALSO NEITHER THE GENUINENESS OF THE PAYMENT NOR THE IDENTITIES OF THE PAYEE WERE IN ANY CASE DOUBTED. C ONSIDERING THE TOTALITY OF THE FACTS QUA THE BUSINESS OF THE ASSESSEE. 21. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FIN DINGS OF THE LD. CIT(A). GROUND NO. 2 IS DISMISSED. 22. GROUND NO. 3 RELATES TO THE DELETION OF THE ADDITIO N ON ACCOUNT OF PROFIT ON SALE OF FLATS AMOUNTING TO RS. 3,69,625/-. 23. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT IN THE COURSE OF SURVEY IN THE CASE OF V.K. NA GWANI, RAIPUR, CERTAIN LOOSE PAPERS WERE FOUND AND IMPOUNDED. WHEN THESE LOOSE P APERS WERE CONFRONTED TO SHRI NAGWANI WHO STATED THAT HE DID NOT HAVE ANY INFORMATION ABOUT THESE ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 12 PAPERS BECAUSE THE PAPERS BELONG TO THEIR FIRM. WHE N THE ASSESSEE WAS CONFRONTED TO THOSE PAPERS, THE PARTNERS STATED THA T THE PAPERS WERE NOT PREPARED FROM THE PREMISES OF THE FIRM BUT WERE FOU ND FROM THE PREMISES OF V.K. NAGWANI AND THEREFORE HE IS NOT ABLE TO GIVE A NY ANSWER. WHEN THE A.O. ASKED THE PARTNER OF THE ASSESSEE FIRM THAT HOW NAM ES IN THE LOOSE PAPERS TALLY WITH THE CUSTOMER LIST OF THE ASSESSEE FIRM, THE PA RTNERS STATED THAT WHATEVER GOODS WERE SOLD BY THEM WERE RECORDED IN THE BOOKS OF ACCOUNTS AND SINCE MOST OF THE SALES WERE MADE THROUGH BROKERS AND THE REFORE HE CANNOT COMMENT ON THE ENTRIES FOUND IN THE LOOSE PAPERS. 24. THE A.O. OBSERVED THAT THE LOOSE PAPERS GIVE RECORD BALANCES IN DIFFERENT BORKERS ACCOUNTS AND THE TRANSACTION WITH THE BROK ERS ARE ALSO FOUND TO BE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE A.O. FURTHER NOTICED THAT EVEN THE COMMISSION PAYMENT IS ALSO FOUND TO B E RECORDED IN THE BOOKS OF THE ASSESSEE. THE A.O. WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS NOT SHOWN THE TRUE PROFITS IN HIS BOOKS OF ACCOUNTS AND COMPU TED THE PROFIT AS UNDER:- COST OF 3BHK FLAT AS PER ASSESSEE RS.NOO /SQFT (B) (GOLDEN SKY) 14,50,000/ - 1318.1 8 PROPORTIONATE I NDIRECT COSTS A.Y.2009-10 A.Y.2010-H A.Y. 2011- 12 TOTAL 44.51% AS RELATABLE TO THIS PROJECT 25,74,971 / - 22,12,219/- 1,33,26,552/- 80,62,4267- 43-07 L,8L,13,742/ - 187200 80,62,426 / - ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 13 BUILT UP AREA OF PROJECT IN SQFT 3BHK= 1100 X 96 2BHK= 850 X96 105600 81600 187,200 TOTAL COST PER SQFT. WHICH WOULD BE CONSTANT FOR EN TIRE PROJECT PERIOD WITH RESPECT TO PROJECT GOLDEN SKY 1361.25 PROFIT FROM THE P ROJECT THIS YEAR RS.I8,67,OOO ( - ) 14,97,3757 - (1361.25 X 1100) = 3,69,6 25/ - 25. ASSESSEE STRONGLY OBJECTED THE MANNER IN WHICH THE ADDITIONS HAVE BEEN MADE BY THE A.O. BEFORE THE LD. CIT(A) AND ONCE AGAIN CO NTENDED THAT THE PAPERS WERE NOT FOUND FROM THE PREMISES OF THE ASSESSEE BU T FROM THE PREMISES OF A THIRD PERSON. IT WAS BROUGHT TO THE NOTICE OF THE L D. CIT(A) THAT THE LOOSE PAPERS DO NOT CONTAIN THE NAME OF THE FIRM OR ANY O F THE PARTNER NOR ANY SIGNATURE IS FOUND ON THE LOOSE PAPERS. 26. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) OBSERVED THAT THE LOOSE PAPERS WERE CAREFULLY PERUSED. THE LD. CI T(A) OBSERVED THAT THOUGH THE ASSESSING OFFICER HAS CONTENDED THAT SEVERAL TR ANSACTIONS WERE RECORDED, HOWEVER, THE A.O. HAS NOT BROUGHT ON RECORD ANY SP ECIFIC INSTANCES OF UNRECORDED TRANSACTION. THE LD. CIT(A) FURTHER OBSE RVED THAT NO ENQUIRY HAS BEEN CONDUCTED BY THE A.O. FROM THE COMMISSION AGEN TS WHOSE NAMES ARE APPEARING IN THE LOOSE PAPERS NOR THE A.O. HAS BROU GHT ON RECORD ANY EVIDENCE THAT THE ASSESSEE IN FACT RECEIVED THE AMOUNTS MENT IONED IN THE LOOSE PAPERS. DRAWING SUPPORT FROM VARIOUS JUDICIAL DECISIONS MEN TIONED AT PAGE 17 & 18 OF HIS ORDER, THE LD. CIT(A) DELETED THE ADDITION OF R S. 3,69,625/-. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 14 27. THE LD. D.R. STRONGLY RELIED UPON THE FINDINGS OF T HE A.O. AND THE LD. COUNSEL FOR THE ASSESSEE ONCE AGAIN STATED WHAT HAS BEEN ST ATED DURING THE CURSE OF THE ASSESSMENT PROCEEDINGS AND ALSO BEFORE THE FIRST AP PELLATE AUTHORITY. 28. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE LOOSE PAPERS WERE FOUND DURING THE COURSE OF THE SURVEY OPERATION AT THE PREMISES OF V .K. NAGWANI. IT IS ALSO NOT IN DISPUTE THAT THE LOOSE PAPERS DID NOT CONTAIN TH E NAME OF THE ASSESSEE FIRM NOR ITS PARTNER. THE LOOSE PAPERS MAY CONTAIN SOME NOTINGS RELATING TO THE REAL ESTATE BROKERS TO WHOM THE ASSESSEE HAS GIVEN COMMI SSION/BROKERAGE BUT AT THE SAME TIME NO ENQUIRY HAS BEEN MADE BY THE A.O. FROM THOSE BROKERS/COMMISSION AGENTS. MOREOVER, THE LOOSE PAPE RS AND DOCUMENTS CANNOT POSSIBLY BE CONSTRUED AS BOOKS OF ACCOUNTS R EGULARLY KEPT IN THE COURSE OF BUSINESS. THEREFORE, IN OUR CONSIDERED OPINION, THE A.O. IS NOT JUSTIFIED IN RESTING FINDINGS BASED ON THE LOOSE PAPERS AND DOCU MENTS FOUND FROM THE PREMISES OF A THIRD PARTY EVEN IF SUCH DOCUMENT CON TAIN NARRATION OF TRANSACTION WITH THE ASSESSEE COMPANY. FOR THIS PRO POSITION, WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF V.C. SHUKLA & ORS. (1998) 3 SCC 410 AND CHUHARMAL 172 ITR 250. 29. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF T HE JUDICIAL DECISION REFERRED HEREINABOVE, WE DECLINE TO INTERFERE. GROUND NO. 3 IS DISMISSED. 30. GROUND NO. 4 RELATES TO THE DELETION OF THE ADDITIO N MADE BY THE A.O. ON ACCOUNT OF SHORT TERM CAPITAL GAIN AMOUNTING TO RS. 9,35,284/-. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 15 31. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCE EDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS SOLD LAND AT BHATGAON WHICH W AS PURCHASED FOR RS. 13,37,216 ON 21.09.2009 WHICH WAS APPEARING IN THE BALANCE SHEET AS INVESTMENT UNDER FIXED ASSETS, THIS LAND WAS SOLD D URING THE YEAR FOR RS. 22,72,500/-. THE A.O. TREATED THE DIFFERENCE OF RS. 9,35,284/- AS SHORT TERM CAPITAL GAIN. 32. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE CONTENDED THAT THE LAND WAS PURCHASED ON 21.09.2009 FOR RS. 13.37 LACS AND WAS SHOWN AS A FIXED ASSET. IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT TH E SAID LAND WAS CONVERTED INTO STOCK IN TRADE DURING THE YEAR UNDER CONSIDERA TION AND THE SALE VALUE IS INCLUDED IN THE PROFIT AND LOSS ACCOUNT. SINCE THE SALE VALUE WAS DULY REFLECTED IN THE FINANCIALS OF THE ASSESSEE. THE LD. CIT(A) D IRECTED THE A.O. TO DELETE THE ADDITION OF RS. 9,35,284/-. 33. BEFORE US, THE LD. D.R. COULD NOT BRING OUT ANY FAC TUAL ERROR IN THE FINDINGS OF THE LD. CIT(A). THERE IS NO DISPUTE THAT THE SALE CONSIDERATION WAS DULY SHOWN AS PART OF SALES IN THE PROFIT AND LOSS ACCOUNT MEA NING THEREBY THAT THE IMPUGNED PROFIT HAS ALREADY BEEN REFLECTED IN THE P ROFIT AND LOSS ACCOUNT, THEREFORE, THERE IS NO OCCASION FOR MAKING FURTHER ADDITION UNDER THE HEAD SHORT TERM CAPITAL GAIN. WE DECLINE TO INTERFERE. GROUND NO. 4 IS DISMISSED. 34. GROUND NO. 5 & 6 ARE OF GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. ITA NO. 354/RAIPUR/2014 FOR A.Y. 2012-12 ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 16 35. THE FIRST GROUND RELATES TO THE DELETION OF THE DIS ALLOWANCE OF LOSS OF RS. 65,93,561/- ON ACCOUNT OF ADMINISTRATIVE AND SELLIN G EXPENSES. 36. AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY US IN ITA NO. 353/RAIPUR/2014 (SUPRA) VIDE GROUND NO. 1 OF THAT A PPEAL. FOR OUR DETAILED DISCUSSION THEREIN, THIS GROUND IS DISMISSED. 37. GROUND NO. 2 RELATES TO THE DELETION OF THE ADDITIO N OF RS. 30,55,610/-. 38. THE UNDERLYING FACTS IN ISSUE ARE SIMILAR TO THE FA CTS CONSIDERED BY US WHILE DECIDING GROUND NO. 3 OF ITA NO. 353/RAIPUR/2014 WH EREIN WE HAVE ELABORATELY DISCUSSION THE FATE OF THE ADDITIONS MA DE ON THE BASIS OF LOOSE PAPERS FOUND FROM THE PREMISES OF A THIRD PARTY. FO R OUR DETAILED DISCUSSION THEREIN, THIS GROUND IS DISMISSED. 39. GROUND NO. 3 RELATES TO THE DELETION OF THE ADDITIO N OF RS. 1,63,21,567/-. 40. AT THE VERY OUTSET, WE HAVE TO STATE THAT THE AMOUN T OF RS. 1,63,21,567/- HAS TO BE READ AS RS. 53,53,280/- IN THE LIGHT OF THE O RDER DATED 30.07.2014 FRAMED U/S. 154 OF THE ACT. 41. ON THE BASIS OF THE LOOSE PAPERS IMPOUNDED FROM THE PREMISES OF SHRI V.K. NAGWANI, THE A.O. FORMED A BELIEF THAT THE ASSESSEE HAS NOT RECORDED SALES TO THE TUNE OF RS. 4,08,03,918/-. THE A.O. ADOPTED THE PROFIT RATE OF 40% ON THIS ALLEGED UNRECORDED SALES AND COMPUTED THE INCOME AT RS. 1,63,21,567/-. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 17 42. ASSESSEE STRONGLY AGITATED THE ADDITION BEFORE THE LD. CIT(A). IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE A.O. HAS REJE CTED THE BOOKS OF ACCOUNTS ON FLIMSY GROUND. IT WAS STRONGLY CONTENDED THAT ON CE THE BOOKS OF ACCOUNTS ARE ACCEPTED, THE A.O. HAS NO POWER TO MAKE ANY FUR THER ADDITION ON THE ALLEGED UNRECORDED SALES WHICH WAS NOT FOUND ON THE LOOSE PAPERS. 43. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS CONVINCED THAT THE REJECTION OF BOOKS OF ACCOUNTS ON ACCOUNT OF CLAIM OF INDIRECT EXPENSES IS CONCERNED IS NOT CORRECT. THE LD. CIT(A ) FURTHER OBSERVED THAT REJECTION OF BOOKS OF ACCOUNTS ON THE BASIS OF THE ENTRIES FOUND ON THE LOOSE PAPERS IMPOUNDED FROM THE PREMISES OF A THIRD PERSO NS IS ALSO NOT CORRECT. CONSIDERING THESE FACTS, THE LD. CIT(A) DELETED THE DISALLOWANCE OF RS. 1,63,21,567/-. 44. BEFORE US, THE LD. D.R. COULD NOT BRING ANY NEW DIM ENSION TO WHAT HAVE ALREADY BEEN DONE BY THE A.O. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE FINDINGS OF THE LD. CIT(A). 45. THERE IS NO DISPUTE THAT THE A.O. HAS DISCARDED THE BOOK RESULTS ONLY (I) THE INDIRECT EXPENSES HAVE BEEN FOUND TO BE NOT COMMENSURATE WITH THE BUSINESS RECEIPTS OF THE ASSESSEE. (II) ENTRIES FOUND IN THE LOOSE PAPERS WERE NOT FOU ND TO BE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. 46. IN OUR CONSIDERED OPINION, BOTH THE REASONS GIVEN BY THE A.O. ARE ILL-FOUNDED INASMUCH AS THE LOOSE PAPERS WERE FOUND FROM THE PR EMISES OF A THIRD PERSON WHICH DID NOT BEAR THE NAME OF THE ASSESSEE NOR ITS PARTNER NOR ANY ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 18 ENQUIRY/VERIFICATION HAS BEEN DONE BY THE A.O. TO S UBSTANTIATE ITS CLAIM THAT THE ENTRIES IN THE LOOSE PAPERS BELONG TO THE ASSES SEE. FURTHER, AS MENTIONED ELSEWHERE, WHILE DECIDING THE APPEAL FOR A.Y. 2011- 12, THE INDIRECT EXPENSES HAVE TO BE DEBITED TO THE PROFIT AND LOSS ACCOUNT W HICH THE ASSESSEE HAS RIGHTLY DONE SO AND THEREFORE THE QUANTUM OF INDIRECT EXPEN SES CANNOT BE A BASIS FOR THE REJECTION OF THE BOOK RESULTS. 47. IN OUR UNDERSTANDING OF THE LAW, THE PRESUMPTION U/ S. 132(4A) OF THE ACT WOULD IN ANY CASE BE APPLICABLE TO A THIRD PARTY F ROM WHOSE POSSESSION SUCH PAPERS/DOCUMENTS HAVE BEEN FOUND BY THE REVENUE. IN OUR UNDERSTANDING OF THE FACT IN THE ABSENCE OF CORROBORATIVE EVIDENCE, ADDITION OF UNDISCLOSED INCOME COULD NOT BE MADE SIMPLY ON THE BASIS OF ENT RIES ON LOOSE PAPERS RECOVERED FROM THE PREMISES OF A THIRD PARTY. 48. CONSIDERING THE FACTS IN TOTALITY, WE DO NOT FIND A NY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). GROUND NO. 3 IS DISMISS ED. 49. GROUND NO. 4 RELATES TO THE DELETION OF THE ADDITIO N MADE U/S. 40(A)(IA) OF THE ACT. 50. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ON CE AGAIN ON THE BASIS OF THE ENTRIES FOUND IN THE LOOSE PAPERS, THE A.O. FORMED A BELIEF THAT THE ASSESSEE HAS MADE UNRECORDED PAYMENTS OF THESE AMOUNTS WITHOUT M AKING TDS. THE A.O. ACCORDINGLY ADDED A SUM OF RS. 1,07,85,000/- AND RS . 27,49,000/-. ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 19 51. ASSESSEE STRONGLY AGITATED THE MATTER BEFORE THE LD . CIT(A) AND STRONGLY CONTENDED THAT THE FIGURES ARE IMAGINARY AND THE AS SESSEE HAS NEVER DEBITED THESE EXPENSES. THEREFORE, THE SAME CANNOT BE DISAL LOWED U/S.40(A)(IA). 52. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) OBSERVED THAT THE CONCLUSION DRAWN BY THE AO. APPEARS TO BE ONE SIDED INASMUCH AS THE INFERENCE DRAWN BY THE A.O. IS NOT BASED ON THE RES ULTS OF ANY ENQUIRY CONDUCTED BY THE A.O. WITH THE PERSONS WHOSE NAMES ARE APPEARING IN THE LOOSE PAPERS AS COMMISSION AGENT. THE LD. CIT(A) AC CORDINGLY DELETED THE ADDITION OF RS. 1,07,85,000/- AND RS. 27,49,000/-. 53. BEFORE US, THE LD. D.R. COULD NOT SUBSTANTIATE THE ADDITIONS MADE BY THE A.O. LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BE EN STATED BEFORE THE LOWER AUTHORITIES BELOW. 54. WE HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER. IT IS TRUE THAT THE A.O. HAS MADE THE ADDITIONS ON THE STRENGTH OF THE ENTRIES F OUND IN THE LOOSE PAPERS. IT IS EQUALLY TRUE THAT THE ASSESSEE HAS NEVER CLAIMED SUCH PAYMENTS AS EXPENDITURE IN ITS BOOKS OF ACCOUNTS. IT IS ALSO TRUE THAT THE A.O. HAS NOT BROUGHT ANYTHING ON RECORD WHICH COULD SUGGEST THAT THE ASSESSEE HAS ACTUALLY SPENT THESE EXPENDITURES ON THE PERSONS FOUND TO BE MENTIONED I N THE LOOSE PAPERS. IN THE ABSENCE OF ANY ENQUIRY MADE BY THE A.O, THE IMPUGNE D ADDITIONS CANNOT BE SUSTAINED AND THE LD. CIT(A) HAS RIGHTLY DELETED TH E SAME WHICH CALLS FOR NO INTERFERENCE. GROUND NO. 4 IS ACCORDINGLY DISMISSED . ITA NOS. 351 TO 354/RAIPUR/2014 . A.YS. 2009-1 0 TO 2012-13 20 55. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 04- 20 18 SD/- SD/- (RAM LAL NEGI) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER RAIPUR: DATED 16 /04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER SR. P.S. IT AT,RAIPUR