ACIT, CIRCLE-2, Jaipur V. MANGAL & MATHUR FOOD P LTD., Jaipur

ITA 360/JPR/2011

• Counselvise Citation: 36023114 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-10-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENE JEPH
• Keywords: Unexplained investment; Unexplained expenditure; Depreciation; Corroborative evidences; Retraction

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 360/JP/2011 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2004-05 THE A.C.I.T., CIRCLE-7, JAIPUR. CUKE VS. M/S MANGAL & MATHUR FOOD (P) LTD. H685-A, SITAPURA INDUSTRIAL AREA, TONK ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AADCM 3762 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT IZR;K{KSI.K @ C.O. NO. 63/JP/2011 (ARISING OUT OF VK;DJ VIHY LA-@ 360/JP/2011) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2004-05 M/S MANGAL & MATHUR FOOD (P) LTD. H 685-A, SITAPURA INDUSTRIAL AREA TONK ROAD, JAIPUR. CUKE VS. THE A.C.I.T., CIRCLE-7, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: AADCM 3762 B IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENE JEPH. FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 06/01/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 03/03/2015 ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 2 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THE APPEAL BY REVENUE AND CROSS OBJECTION BY ASSESS EE ARISE FROM THE ORDER 27/01/2011 OF LD. CIT (A)-II, JAIPUR. RESPECT IVE GROUNDS ARE AS UNDER:- GROUNDS IN REVENUE APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN:- (I) RESTRICTING THE ADDITION TO RS. 32,66,694/- MAD E FOR SHORTAGE OF STOCK OF WHEAT, TO RS. 35,000/- ONLY, EV EN THOUGH THE DISCREPANCY FOUND IN THE SURVEY WERE NOT EXPLAINED IN LAW/ON FACTS. (II) ALLOWING THE BENEFIT OF TELESCOPING IN RESPECT OF THE UNEXPLAINED INVESTMENT IN BUILDING AGAINST THE ADDI TION OF RS. 7,62,833/- OF THE CASH FOUND SHORT, EVEN THOUGH THIS WAS NOT PROVED ON FACTS. GROUNDS IN CROSS OBJECTION 1. THE LEARNED CIT(A) HAS ERRED IN FACT AND IN LAW I N CONFIRMING THE ADDITION OF RS. 7,62,833/- ON ACCOUN T OF CASH FOUND SHORT. 2. THE LEARNED CIT(A) HAS ERRED IN FACT AND IN LAW I N CONFIRMING THE ADDITION OF RS. 2,00,729/- ON ACCOUN T OF UNEXPLAINED INVESTMENT IN BUILDING. 3. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT AS SESSEE HAS SHOWN THE INVESTMENT IN P&M IN EXCESS BY RS. 2,81,09 9/- AND THEREBY CONFIRMING THE DISALLOWANCE OF DEPRECIAT ION OF RS. 70,724/- THEREON. 4. THE ASSESSEE CRAVES RIGHT TO ADD, AMEND, ALTER A ND MODIFY ANY OF THE GROUND OF CROSS OBJECTION. ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 3 2. BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF WHEAT FLOUR. THE ASSESSEE C LAIMS TO HAVE MAINTAINED PROPER BOOKS OF ACCOUNT INCLUDING RECORD S ABOUT THE STOCK OF WHEAT PURCHASED, ISSUED FOR PROCESSING, FLOUR PRODUC ED AND SALE THEREOF. QUANTITATIVE DETAILS IN RESPECT THEREOF ARE CLAIMED TO BE IN THE AUDIT REPORT. 3. A SURVEY WAS CONDUCTED AT THE BUSINESS PREMISES O F THE ASSESSEE ON 05/12/2003. DURING THE COURSE THEREOF, SHORTAGE OF 1731 QUINTALS OF WHEAT STOCK WAS INDICATED BY THE SURVEY TEAM. STATEMENT OF A DIRECTOR SHRI BASANT MATHUR WAS RECORDED. HOWEVER THE EXPLANATION IN THIS BEHALF WAS REJECTED. THE ASSESSEE AGREED TO SURRENDER G.P. RATE OF 11% ON SHORT STOCK AMOUNTING TO RS. 1,45,092/- WHICH IS CLAIMED TO BE OFFERED IN THE RETURN OF INCOME AND TAXED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT ASSESSEE HAS PRODUCED 21,299 QUINTALS OF FLOUR AS P ER BOOKS OF ACCOUNTS WHEREAS IT HAS CONSUMED WHEAT OF 19,467 QUINTALS ONLY . CONSIDERING THE YIELD OF 90.41%, TO PRODUCE 21,299 QUINTALS OF FLOUR, THE CONSUMPTION OF WHEAT SHOULD BE 23,855 QUINTAL AS AGAINST THIS CONSUMPTIO N OF WHEAT IS 19,467 QUINTALS ONLY, INDICATING PURCHASE OF 2556 QUINTALS OF WHEAT (23855 19467) OUTSIDE THE BOOKS OF ACCOUNTS. HE FURTHER OBSERVED THAT IN SURVEY IT WAS FOUND ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 4 THAT 1731 QUINTAL OF WHEAT WAS RECORDED AS GOODS RETU RNED BACK. SINCE NO PAYMENT IS MADE FOR THESE PURCHASES, IT IS ALSO HEL D TO BE UNEXPLAINED PURCHASE. HE ACCORDINGLY CONSIDERED 4287 QUINTALS O F WHEAT (2556 + 1731) AS UNEXPLAINED EXPENDITURE AND APPLYING A RATE OF 762/ QUINTAL MADE ADDITION OF RS.32,66,694/-. RS. INCOME FROM BUSINESS & PROFESSION, AS DECLARED (-) 20,73,345/- ADDITIONS, AS DISCUSSED ABOVE. I) UNRECORDED INVESTMENT 3266694 II) ADDITION ON A/C OF BUILDING 200729 III) DEPRECIATION DISALLOWED ON P&M 70274 3537697 LESS: DEPRECIATION CLAIMED FOR THE YEAR (CURRENT YEAR LOSS) 1029351/- 25,08,346/- NET TAXABLE INCOME 4,35,001/- R/O TO RS. 4,35,000/-. 4.1 THE LD. CIT(A) AS PER HIS FINDINGS GIVEN AT PARA 2.3.1 AT PAGE 6 OBSERVED THAT IN RESPECT OF 1731 QUINTALS OF THE ST OCK OF WHEAT CONSIDERED AT SHORT, ASSESSEE HAS OFFERED RS.1,45,092/- FOR TAX B EING G.P. RATE OF 11% ON RS.13,19,022/- (1731 QUINTAL @ RS.762/QUINTAL). HE , THEREFORE, DELETED THE ADDITION MADE BY THE AO IN THIS ACCOUNT. IN RESPECT OF ADDITION MADE ON ACCOUNT OF 2556 QUINTAL OF WHEAT, CIT(A) IN PARA 2.3 .2 OBSERVED THAT ASSESSEE COULD NOT EXPLAIN THE DIFFERENCE OF ABOUT 35 QUINTA LS OF FLOUR FOUND IN EXCESS ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 5 AT THE TIME OF SURVEY. HE, THEREFORE, CONFIRMED ADD ITION OF RS.35,000/- AND DELETED THE ADDITION OF THE BALANCE AMOUNT. 5. APROPOS THE ISSUE OF SHORTAGE OF CASH; UNEXPLAIN ED INVESTMENT IN THE BUILDING; TELESCOPING OF SHORT CASH AND DEPRECIATIO N ON PLANT AND MACHINERY, LEARNED CIT(A) DECIDED THESE ISSUES OBSERVING AS UND ER:- 3. IN GROUND NO. 2, THE APPELLANT HAS DISPUTED THE FINDING OF THE A.O. IN TREATING THE CASH FOUND SHORT (DURING THE S URVEY) AS UNEXPLAINED EXPENDITURE OF THE APPELLANT. IN THIS R EGARD, IT IS SEEN FROM THE ASSESSMENT ORDER THAT DURING THE COURSE OF SURVEY THE CASH WAS FOUND AT RS. 10,356/- ON PHYSICAL VERIFICAT ION, AGAINST THE CASH OF RS. 7,73,189/- AS PER THE BOOKS OF ACCO UNT. IN THE STATEMENTS, THE DIRECTORS OF THE COMPANY STATED THA T THE REMAINING CASH WAS LYING AT THE RESIDENCE OF THE DIR ECTORS. HOWEVER, NO SUPPORTING EVIDENCE FOR SUCH CLAIM WAS PR ODUCED. FURTHER, NO IMPREST ACCOUNT IN THE NAME OF ANY DIRE CTOR WAS FOUND. THEREFORE, THE ASSESSING OFFICER TREATED THE CASH FOUND SHORT TO THE EXTENT OF RS. 7,62,833/- (RS. 7,73,189 -RS. 10,356) AS UNEXPLAINED EXPENDITURES OF THE ASSESSEE. HOWEVER, T HE A.O. DID NOT MAKE ANY SEPARATE ADDITION FOR THE SAME, IN VIE W OF THE ADDITION OF RS. 32,66,694/- MADE, AS UNEXPLAINED EX PENDITURE IN THE APPELLANTS CASE, BYT GIVING THE BENEFIT OF TEL ESCOPING. ON THE OTHER HAND, LEARNED A.R. SUBMITTED THAT THE ADDITI ON ON ACCOUNT OF UNEXPLAINED CASH WAS MADE IN THE PERSONAL HANDS O F BOTH THE DIRECTORS I.E. OF RS. 3 LAC IN THE CASE OF SHRI NAR ESH KUMAR GUPTA ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 6 AND OF RS. 4 LACS IN THE CASE OF SHRI BASANT MATHUR , WHICH HAVE BEEN DELETED BY THE LEARNED CIT(A)-1, JAIPUR VIDE H IS ORDER IN APPEAL NO. 156/2006-07 DATED 27/11/2007 AND IN APPE AL NO. 635/2006-07 DATED 14/11/2007. IT WAS ARGUED THAT UND ISPUTEDLY THE CASH WAS AVAILABLE WITH THE DIRECTORS AND IT WAS U NJUSTIFIED ON THE PART OF THE REVENUE TO TREAT THE SAME AS UNEXPL AINED EXPENDITURE, WHEN TWO ASSESSING OFFICERS WERE TREATING IT AS UNEXPLAINED IN THE HANDS OF THE DIRECTORS OF THE CO MPANY. IT WAS ALSO POINTED OUT THAT IN THE STATEMENT, THE DIRECTO RS HAD INFORMED THE SURVEY PARTY THAT THE REMAINING CASH WAS LYING A T THEIR RESIDENCE, BUT THEREAFTER, THE SURVEY PARTY DID NOT MAKE ANY FURTHER VERIFICATION. HENCE, IT WAS TO BE PRESUMED T HAT SURVEY PARTY HAD ACCEPTED THE AFORESAID EXPLANATION OF THE DIRECTORS AND THEREFORE, THE IMPUGNED ADDITION WAS NOT JUSTIFIED. HOWEVER, ON CONSIDERATION OF THE RELEVANT FACTS, I DO NOT FIND ANY MERIT IN THE AFORESAID CONTENTION OF LEARNED A.R.. IT IS OBSERV ED THAT THERE IS NO DISPUTE REGARDING THE FACT THAT CASH WAS FOUND SH ORT, TO THE EXTENT OF RS. 7,62,833/-, DURING THE SURVEY AND ALS O THAT NO SATISFACTORY EXPLANATION WITH SUPPORTING DOCUMENTARY EVIDENCES WERE PRODUCED BY THE APPELLANT, TO PROVE THE CLAIM T HAT THE REMAINING CASH WAS KEPT AT THE RESIDENCE OF THE DIRE CTORS. THEREFORE, THE A.O. WAS JUSTIFIED IN TREATING THE SAM E AS UNEXPLAINED EXPENDITURE OF THE APPELLANT COMPANY. H ENCE, THE SAID ACTION OF THE LEARNED A.O. IS CONFIRMED. CONSE QUENTLY, THIS GROUND OF APPEAL IS REJECTED. ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 7 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF LEARNED A.R.. HOWEVER, ON PERUSAL OF THE RELEVANT RECORD, I FIND THAT THE CONTENTIONS OF LEARNED A.R. RAISED IN SUPP ORT OF THESE GROUNDS OF APPEAL, ARE NOT SUPPORTED BY ANY DOCUMEN TARY EVIDENCE. FURTHER, IT IS OBSERVED THAT, EVEN IF THE CONTENTION OF LEARNED A.R. IS ACCEPTED FOR ARGUMENT SAKE, STILL T HE LEARNED A.R. WAS NOT ABLE TO RECONCILE THE FIGURES OF INVESTMENT IN THE BUILDING AND P&M, AS PER THE BOOKS AND AS PER THE VOUCHERS F OUND DURING THE SURVEY. THEREFORE, ON THESE FACTS, I FIND THAT THE LEARNED A.O. WAS FULLY JUSTIFIED IN MAKING THE IMPUGNED DEPRECIAT ION DISALLOWANCE OF RS. 70,274/- AND ALSO IN MAKING THE IMPUGNED ADDITION OF RS. 2,00,729/-, AS UNEXPLAINED INVESTME NT IN BUILDING AND THUS, THE SAID ACTIONS OF THE LEARNED A.O. ARE CONFIRMED. HOWEVER, CONSIDERING THE ALTERNATIVE PLEA OF THE LEA RNED A.R., THE APPELLANT IS GIVEN BENEFIT OF TELESCOPING IN RESPEC T OF THE IMPUGNED ADDITION OF RS. 2,00,729/- AGAINST THE ADD ITION OF RS. 7,62,833/- CONFIRMED ON ACCOUNT OF CASH FOUND SHORT , WHICH WAS TREATED AS ASSESSEES UNEXPLAINED EXPENDITURE. CONS EQUENTLY, GROUNDS N. 3 AND 4 OF THE APPEAL ARE TREATED AS PAR TLY ALLOWED. 6. AGGRIEVED, BOTH THE PARTIES ARE BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THA T THE AO HAS NOT CONSIDERED THE PURCHASE RETURN OF 1853 QTLS. OF WHEA T ON 01-04-2003 IN ARRIVING AT THE CONSUMPTION OF WHEAT AT 19467 QTLS. THE CLAIM OF THE WHEAT RETURN IS CLEAR FROM THE FOLLOWING EVIDENCES:- ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 8 (I) THE ASSESSEE IS MAINTAINING DAY TO DAY STOCK REGISTE R. SUMMARY OF STOCK STATEMENT UP TO THE DATE OF SURVEY PLACED AT PB 26 CLEARLY INDICATES THAT THERE IS PURCHASE RETURN OF 1853 QTL OF WHEAT. (II) IN SURVEY, SHRI BASANT KUMAR IN REPLY TO QUESTION NO. 5 (PB 16) STATED THAT IN APRIL 2003 GOODS WERE RETURNED WHICH IS HAVIN G APPROXIMATELY VALUE OF RS. 13 LACS. (III) THIS WHEAT WAS PURCHASED FROM HARISH TRADING COMPANY ON 31-03- 2003 FOR RS. 13,27,000/- AND THE SAME WAS RETURNED B ACK ON 01-04- 2003. THIS IS SUPPORTED BY THE COPY OF HARISH TRADING COMPANY IN THE ASSESSEE'S BOOKS PLACED AT PB 55. IN VIEW OF THE ABOVE, THE PURCHASE RETURN OF 1853 QT LS. OF WHEAT WAS REQUIRED TO BE CONSIDERED FOR ARRIVING AT THE WHEAT ISSUED FOR CONSUMPTION. 7.1 THE AO HAS WRONGLY TAKEN THE OPENING STOCK OF WHEA T AT 1472 INSTEAD OF 4672.62 QTL. THIS FACT IS VERIFIABLE FROM THE OPE NING STOCK STATEMENT PLACED AT PB 28. THIS IS ALSO EVIDENT FROM THE TAX AUDIT RE PORT (PB 27) AND QUESTIONS REFERRED IN THE ASSESSMENT ORDER ITSELF. HENCE, THE OPENING STOCK OF WHEAT NEEDS TO BE CONSIDERED AT 4672.62 QTL. 7.2 IF ALL THE ABOVE MISTAKES ARE CONSIDERED, THE C ORRECT POSITION OF STOCK OF WHEAT AND FLOUR WORKS OUT AS UNDER:- ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 9 PARTICULARS WHEAT REMARKS AS PER ASSESSEE AS PER AO OPENING STOCK AS ON 01-04-2003 4672.62 1472 IN VIEW OF THE EXPLANATION GIVEN IN POINT NO. 3 SUPRA. PURCHASE TILL THE DATE OF SURVEY 18906.60 18265 DIFFERENCE IS ON ACCOUNT OF NOT CONSIDERING THE PURCHASES FROM1 ST TO 4 TH DECEMBER 23579.22 19737.00 LESS: PURCHASE RETURN 1853 - IN VIEW OF THE EXPLANATION GIVEN IN POINT NO. 2 SUPRA. 21726.22 19737.00 LESS: ISSUE FOR PRODUCTION /SALE 21505.00 19467 THE AO HAS TAKEN THE BALANCING FIGURE CLOSING STOCK AS ON SURVEY AS PER BOOKS 220.94 270 PHYSICAL STOCK AS ON THE DATE OF SURVEY 270 270 PARTICULARS FLOUR REMARKS AS PER ASSESSEE AS PER AO OPENING STOCK AS ON 01-04-2003 125.40 125 PRODUCED TILL THE DATE OF SURVEY 19324.00 21299 THIS IS ONLY A DIFFERENTIAL FIGURE WORKED OUT BY THE AO 19449.40 21424 LESS: SALE 19363.30 21343 IN VIEW OF THE EXPLANATION GIVEN IN POINT NO. 1 SUPRA. CLOSING STOCK AS ON SURVEY AS PER BOOKS 86.10 81.25 PHYSICAL STOCK AS ON THE DATE OF SURVEY 81.25 81.25 ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 10 7.3 THE ABOVE CHART DEPICTS THAT THE EXCESS AND SHO RTAGE OF THE STOCK FOUND IS NOMINAL AND MAY BE RESULT OF COUNTING MISTAKE. H OWEVER, NO SEPARATE ADDITION OF THE SAME IS REQUIRED AS ASSESSEE HAS AL READY OFFERED A SUM OF RS. 1,45,092/- IN THE RETURN. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 32,66,694/- MADE BY THE AO WAS UNCALLED FOR. 7.4 IN RESPECT OF EXCESS STOCK OF WHEAT OF 49.06 QUI NTAL, ASSESSEE HAS ALREADY CONSIDERED RS.34,350 AS PURCHASE MADE OUT O F CASH AVAILABLE AND ACCOUNTED FOR THE SAME IN THE BOOKS OF ACCOUNTS (PB 24, NOTE NO. 11). IN RESPECT OF FLOUR, THERE IS A SHORTAGE OF 4.85 QUINT ALS [WRONGLY TAKEN BY CIT(A) AS EXCESS STOCK OF 35 QUINTALS]. ON THIS ACCOUNT, C IT(A) HAS CONFIRMED THE ADDITION OF RS.35,000/- WHICH IS OTHERWISE NOT JUSTIF IED. THEREFORE, ADDITION MADE BY THE AO IN RESPECT OF 2556 QUINTAL OF WHEAT F OR RS.19,47,672/- IS OTHERWISE NOT WARRANTED. 7.5 SO FAR AS ADDITION MADE BY THE AO IN RESPECT OF 1731 QUINTAL OF WHEAT FOR RS.13,19,022/- IS CONCERNED, THE SURVEY PARTY H AS WORKED OUT THIS QUANTITY AS SHORT STOCK. ON SUCH SHORT STOCK, ASSESSEE HAS O FFERED GROSS PROFIT OF RS.1,45,092/-, THOUGH IT WAS EXPLAINED THAT THIS DIF FERENCE IS ON ACCOUNT OF NOT CONSIDERING THE PURCHASE RETURN MADE IN APRIL 2013. IN FACT, ASSESSEE HAS RETURN 1853 QUINTAL OF WHEAT PURCHASED FROM HARISH TR ADING CO. ON ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 11 31.03.2003 FOR RS.13,27,000/- ON 01.04.2003. AFTER CONSIDERING THIS PURCHASE RETURN, THERE HARDLY REMAINS ANY DIFFERENCE IN THE STOCK OF WHEAT AS PER BOOKS OF ACCOUNTS AND THAT PHYSICALLY FOUND. STILL TO BUY PEACE OF MIND, ASSESSEE HAS OFFERED RS.1,45,092/- IN THE RETURN OF INCOME. LD. CIT(A) CALLED FOR A REMAND REPORT WHICH WAS SUBMIT TED BY LD. AO ON 8-9-2010, AFTER CONSIDERING THE SAME AND MATERIAL A VAILABLE ON RECORD LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.13,19, 022/- MADE ON THIS ACCOUNT. ORDER OF LD. CIT(A) ON THESE ISSUE IS RELIE D ON. 8. APROPOS REVENUE GROUND OF TELESCOPING BENEFIT OF RS. AND ASSESSEES CROSS GROUND NO 1, IT IS PLEADED THAT LD. CIT(A) FA ILED TO APPRECIATE THAT PLANT AND MACHINERY WAS INSTALLED IN EARLIER YEARS FOR WHI CH ADDITION CANNOT BE MADE IN THIS YEAR. THE SHORT CASH AROSE FROM THE ASS ESSEE AND HAS BEEN DECLARED IN THE HANDS OF THE DIRECTORS, THEREFORE, ADDITION OF RS. 7,62,833/- AND HIS TELESCOPING HAS BEEN WRONGLY ORDERED BY LD. CIT(A). SIMILARLY ADDITIONS OF RS. 2,00,729/- ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN BUILDING & DISALLOWANCE OF DEPRECIATION OF RS. 70,724/- HAS NO JUSTIFICATION. 9. LD. DR RELIED ON THE ORDER OF LD. AO AND CONTEN DS THAT THE ASSESSEE COULD NOT JUSTIFY THE RETRACTION OF SURVEY STATEMEN T; SHORTAGE IN STOCK AND ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 12 CASH. SIMILARLY UNRECORDED INVESTMENT IN PLANT AND MACHINERY HAS NOT BEEN PROPERLY EXPLAINED. LD. CIT(A) DID NOT GIVE COGENT R EASONS FOR TELESCOPING. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. CIT(A) CONSIDERED THE ASSESSEES EXP LANATION ALONG WITH THE AOS REMAND REPORT. ON CONSIDERATION OF ENTIRE MAT ERIAL AVAILABLE ON RECORD CLEAR FINDINGS ON FACTS HAVE BEEN GIVEN THAT THERE WAS CLEAR ERROR ON THE PART OF AO ABOUT 20936 QTLS. TILL THE END OF NOV. 2003. I T WAS ACTUALLY CONSUMPTION WHICH WAS ERRONEOUSLY HELD BY AO AS SALE WHICH IS CORR OBORATED BY DIRECTORS STATEMENT. WE FIND NO FACTUAL OR LEGAL INFIRMITY IN THE ORDER OF LD. CIT(A) IN RESPECT ADDITION RELATING TO STOCK AND PRODUCTION. BESIDES ASSESSEE HAS OFFERED ADDITIONAL AMOUNT OF RS. 1,45,092/- IN THE RETURN O F INCOME IN THIS BEHALF. IN VIEW F ENTIRETY OF FACTS AND CIRCUMSTANCES WE UPHOLD THE ORDER OF LD. CIT(A) ON THIS ISSUE, THEREFORE, GROUND NO. 1 OF REVENUE IS D ISMISSED. 10.1 APROPOS THE REMAINING INTER RELATED CROSS GROU NDS PERTAINING TO SHORT CASH, UNEXPLAINED INVESTMENT IN BUILDING, TELESCOPI NG AND DEPRECIATION, LD. CIT(A) AFTER CONSIDERING THE ISSUES GIVEN CLEAR FIND INGS OF FACTS THAT THE CLAIM ABOUT CASH REMAINING AT DIRECTORS RESIDENCE HAS NOT BEEN SUBSTANTIATED. SIMILARLY THE ASSESSEE COULD NOT RECONCILE THE INVE STMENT IN BUILDING, PLANT AND MACHINERY AS PER BOOKS AND VOUCHERS FOUND DURING TH E SURVEY. DURING THE ITA 360/JP/2011 & C.O. 63/JP/2011_ ACIT VS. MANGAL & MATHUR FOOD P. LTD. 13 COURSE OF HEARING BEFORE US ALSO, THESE FINDINGS CO ULD NOT BE CONTROVERTED IN MEANINGFUL TERMS BY ASSESSEE AS WELL REVENUE. CONSEQ UENTLY WE UPHOLD THE FINDINGS OF LD. CIT(A) ON THESE ISSUE. IN VIEW THERE OF REVENUE GROUND NO. 2 AND GROUNDS RAISED IN ASSESSEES CO ARE DISMISSED. 11. IN THE RESULT REVENUE APPEAL AS WELL AS ASSESSEE S CO ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/03/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 03 RD MARCH, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE A.C.I.T., CIRCLE-7, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S MANGAL & MATHUR FOOD (P) LTD., J AIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 360/JP/2011 & C.O. 63/JP/2011) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR