Hotel Sai Siddhi P. Ltd., Nashik V. DCIT, Cent. Cir.-1, Nashik

ITA 389/PUN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0813 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: S N DOSHI
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Depreciation; Income from undisclosed sources; Opportunity of being heard; Proportionate interest; Additional evidence; Corroborative evidences; Non compliance; Revised return; Documents seized
• Section: 40A(3); 153A; 145; 144

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ! ' BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.486 TO 492/PN/2012 !$ $ / ASSESSMENT YEARS : 2002-03 TO 2008-09 ACIT, CENTRAL CIRCLE-1, NASHIK . / APPELLANT V/S M/S. HOTEL SAI SIDDHI PVT. LTD., DURGESH RESIDENCY APARTMENT, ANANDWALLI, GANGAPUR ROAD, NASHIK PAN NO. AABCH4310G . / RESPONDENT . / ITA NOS.389 TO 391/PN/2012 !$ $ / ASSESSMENT YEARS : 2006-07 TO 2008-09 M/S. HOTEL SAI SIDDHI PVT. LTD., DURGESH RESIDENCY APARTMENT, ANANDWALLI, GANGAPUR ROAD, NASHIK PAN NO. AABCH4310G . / APPELLANT V/S DCIT, CENTRAL CIRCLE-I, NASHIK . / RESPONDENT / ASSESSEE BY : SHRI S.N. DOSHI / DEPARTMENT BY : SHRI S.K. RASTOGI, CIT / DATE OF HEARING : 08.10.2015 / DATE OF PRONOUNCEMENT: 04.12.2015 2 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 / ORDER PER R.K. PANDA, AM : ITA NOS. 486 TO 489/PN/2012 FILED BY THE REVENUE ARE DIR ECTED AGAINST THE SEPARATE ORDERS DATED 23-12-2011 OF THE C IT(A)-I, NASHIK RELATING TO ASSESSMENT YEARS 2002-03 TO 2005-06 RESPE CTIVELY. ITA NOS. 490 TO 492/PN/2012 FILED BY THE REVENUE AND ITA NO S. 389 TO 391/PN/2012 FILED BY THE ASSESSEE ARE CROSS APPEALS AND ARE DIRECTED AGAINST THE COMMON ORDER DATED 23-12-2011 OF THE CIT(A )-I, NASHIK RELATING TO ASSESSMENT YEARS 2006-07 TO 2008-09 RESPEC TIVELY. FOR THE SAKE OF CONVENIENCE, ALL THESE APPEALS WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUN AL. EARLIER THE TRIBUNAL VIDE ITA NOS. 525 TO 531/PN/2011 EXCEPT I TA NO.529/PN/2011 FOR A.YRS. 2002-03 TO 2005-06 & 2007-08 TO 2008- 09 HAS RESTORED THE MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE APPLICABILITY OF PROVISIONS OF SECTION 249(4)(A) AS P ER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. IT MAY BE PERTINENT TO MENTION THAT THE CIT(A) HAD DISMIS SED THE APPEALS FILED BY THE ASSESSEE FOR NON-PAYMENT OF ADMITTED TAX. THE TRIBUNAL HAS REFRAINED ITSELF FROM COMMENTING ON MERIT OF THE ISSUE AT HAND. SO FAR AS ITA NO.529/PN/2011 FOR A.Y. 2006-07 IS C ONCERNED SINCE THE CIT(A) HAD NOT PASSED A SPEAKING ORDER THE TR IBUNAL RESTORED THE MATTER TO THE FILE OF THE CIT(A) FOR PASSING A SPEAKIN G ORDER AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ITA NO.486/PN/2012 (BY REVENUE) (A.Y. 2002-03) : 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN HOTEL BUSINESS. IT HAD NOT FILED ITS RETURN OF INCOME U/S.139 OF THE I.T. ACT FOR THE RELEVANT ASSESSM ENT YEAR. A SEARCH ACTION U/S.132 OF THE I.T. ACT WAS CARRIED OUT IN THE SINGH- BHUTADA GROUP OF CASES ON 28-06-2007. THE RESIDENTIAL P REMISES OF THE DIRECTORS WAS COVERED AND SIMULTANEOUS SURVEY U/S .133A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COM PANY. DESPITE ISSUE AND SERVICE OF NOTICE U/S.153A THE ASSESSEE COMPA NY DID NOT FILE ITS RETURN OF INCOME. DESPITE REMINDERS BY THE AO THE AS SESSEE WAS SEEKING ADJOURNMENTS FROM TIME TO TIME. THE AO THEREFORE HAD NO OTHER OPTION BUT TO COMPLETE THE ASSESSMENT U/S.144A O F THE I.T. ACT R.W.S. 153A. 4. ALTHOUGH THE ASSESSEE HAS NOT FILED THE RETURN OF INCOM E FOR THE IMPUGNED ASSESSMENT YEAR, HOWEVER, CERTAIN INFORMATIONS WE RE GATHERED BY THE AO FROM THE RETURN FILED U/S.139 FOR A.Y. 2003-04 WHICH WAS AVAILABLE BEFORE HIM. HE OBSERVED FROM THE SAID S TATEMENTS THAT FOR THE IMPUGNED ASSESSMENT YEAR AS AGAINST INCO ME OF RS.31,70,697/- THE ASSESSEE HAS SHOWN EXPENDITURE OF RS.2 2,39,335/- AND DECLARED PROFIT AT RS.9,31,361/-. FROM THE VARIOUS EXP ENSES SO CLAIMED THE AO DISALLOWED DEPRECIATION OF RS.14,30,4997/- AND AUDIT FEE OF RS.10,000/- ON THE GROUND THAT NO AUDIT REPORT WA S FURNISHED AND DEPRECIATION HAS BEEN CLAIMED WITHOUT FURNISHING THE DE TAILS OF ASSETS AND WORKING OF DEPRECIATION. OUT OF THE VARIOUS OT HER EXPENSES SUCH AS ADVERTISEMENT AND PUBLICATION CHARGES, COMMUNICAT ION CHARGES, CONVEYANCE CHARGES AND OTHER WELFARE EXPENSES TOTALING TO RS.1,38,500/- THE AO DISALLOWED AN AMOUNT OF RS.27,700/- BEIN G 20% OF SUCH EXPENSES ON ADHOC BASIS HOLDING THAT THESE ARE NOT VERIFIABLE. 4 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 5. THE AO FURTHER NOTED THAT THE ASSESSEE HAS SHOWN U NSECURED LOAN OF RS.42,00,425/- AND PROVISION OF RS.10,000/- SHOWN AS LIABILITY. FURTHER, ASSESSEE HAS ALSO DEBITED INTEREST OF RS.8 ,18,412/-. IN ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE THE AO TREATED THE UNSECURED LOAN AS NON-GENUINE AND HELD THAT THE UNSECU RED LOAN AND PROVISION AMOUNT TO RS.42,10,425/- AS INCOME FROM UNDISCLOS ED SOURCES WHICH HE ADDED TO THE TOTAL INCOME OF THE ASSE SSEE. SIMILARLY, OUT OF THE INTEREST EXPENDITURE OF RS.8,18,412/- TH E AO DISALLOWED AN AMOUNT OF RS.4,09,000/- BEING 50% OF INTEREST ATTRIBUTABLE TO UNSECURED LOAN. THUS, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.60,39,377/-. 6. BEFORE CIT(A) IT WAS SUBMITTED THAT THE THEN AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DID NOT MAKE COMPLIANCE A S REQUIRED BY THE AO FOR WHICH THE AO HAD TO COMPLETE THE ASSESSMENT U/S.144 AND HAS TO MAKE HUGE ADDITIONS. IT WAS SUBMITTED THAT THE PROFIT OF THE ASSESSEE COMPANY FOR THE IMPUGNED ASSESSMENT YEAR AS PER AUDITED PROFIT AND LOSS ACCOUNT COMES TO RS.9,31,361/-. DEPRECIAT ION CLAIMED IN THE SAID PROFIT AND LOSS ACCOUNT AS PER PROVISIONS OF CO MPANIES ACT WAS RS.4,30,477/-. HOWEVER, DEPRECIATION AS PER I.T. ACT COMES TO RS.13,78,052/-. THE INCOME AS PER I.T. ACT IS THEREFORE LOSS OF RS.16,204/- FOR WHICH THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME. 7. SO FAR AS DISALLOWANCE OF DEPRECIATION IS CONCERNED IT WAS ARGUED THAT ALTHOUGH THE AO HAS CONSIDERED THE PROFIT OF THE HO TEL BUSINESS AT RS.9,51,775/-, HOWEVER, HE HAS DISALLOWED THE DEPRECIATION. I T WAS ARGUED THAT WITHOUT THE ASSETS BEING PUT TO USE THE A SSESSEE COULD NOT HAVE EARNED SUCH INCOME. FURTHER, THE AO DID NOT CONSIDE R THE DEPRECIATION ALLOWABLE U/S.32 OF THE I.T. ACT. MOST OF THE ASSETS ARE 5 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 BROUGHT FORWARD ASSETS FROM THE PRECEDING YEAR. THERE FORE, THERE WAS NO JUSTIFICATION IN NOT ALLOWING THE DEPRECIATION AS PER I.T. ACT. 8. SO FAR AS DISALLOWANCE OF RS.10,000/- ON ACCOUNT OF AUDIT FEES IS CONCERNED IT WAS ARGUED THAT THE COMPANY IS UNDER OBLIG ATION TO GET THE ACCOUNTS AUDITED. IT HAS CONDUCTED THE STATUTORY AUDIT BY A CHARTERED ACCOUNTANT. THE ASSESSEE FILED A COPY OF THE AUDIT REPORT AND IT WAS ARGUED THAT THE DISALLOWANCE OF RS.10,000/- IS UNCALLED FOR. 9. AS REGARDS THE DISALLOWANCE OF 20% OF THE EXPENSES IS C ONCERNED IT WAS ARGUED THAT CONSIDERING THE VOLUME OF THE BUSINESS OF THE ASSESSEE THE EXPENDITURE CLAIMED IS QUITE REASONABLE. FUR THER, THE ASSESSEE IS IN ITS INITIAL PERIOD OF OPERATION. THE ASSESSEE FILED THE LEDGER EXTRACTS OF THE VARIOUS EXPENSES ALONG WITH SOME BILLS AND VOUCHERS AND IT WAS REQUESTED THAT THE DISALLOWANCE BEIN G ON THE HIGHER SIDE SHOULD BE DELETED. 10. AS REGARDS THE DISALLOWANCE OF RS.42,00,425/- TOWARDS UNSECURED LOAN AND RS.4,09,000/- TOWARDS PROPORTIONATE IN TEREST IS CONCERNED IT WAS SUBMITTED THAT THE UNSECURED LOAN WAS ACCEPTED FROM SAI BHAKTI SERVICES IN F.Y. 2001-02 WHO HAD GIVEN THE LOAN OUT OF LOAN TAKEN FROM SHREE SAMARTH SAHAKARI BANK LTD. NASHIK VIDE ACCOUNT NO.256. NEW DIRECTORS WERE INTRODUCED IN JUNE 200 3. AS A PART OF REARRANGEMENT, MR. AMIT SINGH AND MRS. RITA D. SING H MADE PAYMENTS OF RS.25 LAKHS AND RS.26 LAKHS RESPECTIVELY IN LOAN A/C. NO. 256 HELD BY SAI BHAKTI SERVICES IN SHREE SAMARTH SAHAKAR I BANK LTD. ON BEHALF OF THE ASSESSEE COMPANY. IN THIS WAY THE LOAN OF RS.42,00,425/- STANDING IN THE NAME OF SAI BHAKTI SERVICES W AS REPAID. IT WAS ARGUED THAT INTEREST DEBITED TO PROFIT AN D LOSS ACCOUNT OF RS.8,18,412/- IS INTEREST INCURRED ON TERM LOAN AND NOT ON 6 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 UNSECURED LOAN. EVEN OTHERWISE SINCE THE UNSECURED LOAN IS GENUINE, THE INTEREST ON THE SAME OUGHT TO BE ALLOWED. THE ASS ESSEE ALSO FILED THE LEDGER EXTRACTS OF SAI BHAKTI SERVICES FOR F.Y. 2003-0 4 SHOWING REPAYMENT OF THE LOAN. 11. SO FAR AS THE ADDITION OF RS.10,000/- TOWARDS PROVISION IS CONCERNED, IT WAS ARGUED THAT THE SAID PROVISION WAS TOW ARDS AUDIT FEES WHICH WAS ADDED BY THE AO ON ACCOUNT OF NON-FURNISH ING OF AUDIT REPORT. FURTHER, ONCE THE AO DISALLOWED THE ADDITION OF RS .10,000/- TOWARDS AUDIT FEES, HE CANNOT AGAIN MAKE THE ADDITION ON ACCOUNT OF PROVISION FOR AUDIT FEES WHICH AMOUNTS TO DOUBLE ADDITION. 12. BASED ON THE VARIOUS ARGUMENTS ADVANCED BY THE AS SESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO WHO SUBMIT TED THAT BILLS FOR ASSETS PURCHASED, PROOF OF INSTALLATION, DATE OF INSTALLA TION, DATE FROM WHICH THE ASSET HAVE BEEN USED FOR THE PURPO SE OF BUSINESS HAVE NOT BEEN PRODUCED/FILED. ACCORDING TO THE AO DEPRE CIATION IS ALLOWABLY ONLY WHEN ITS OWNERSHIP AND ITS USE FOR THE BU SINESS OF THE ASSESSEE HAS BEEN PROVED BEYOND DOUBT BY THE ASSESSEE. 13. SO FAR AS ADDITION TOWARDS UNSECURED LOAN OF RS.42,00,42 5/- AND PROPORTIONATE INTEREST OF RS.4,09,000/- IS CONCERNED T HE AO REPORTED THAT THE ASSESSEE IN ITS BALANCE SHEET HAS SH OWN LOAN AS TAKEN FROM DIRECTORS AND SHAREHOLDERS AMOUNTING TO RS.42 ,00,425/- THE ASSESSEE HAS NEITHER GIVEN THE NAMES OF THE PERSON S FROM WHOM LOAN WAS TAKEN, OR THEIR CONFIRMATIONS AND PROVED IDENTITY AND CAPACITY OF LENDERS TO ADVANCE LOANS EVEN DURING REMAND PROCEEDINGS. FURTHER, AS DECLARED IN THE AUDITED BALANCE SHEET MR. AND MRS. PATIL WERE DIRECTORS AND SHAREHOLDERS OF THE COMPANY. THEREFO RE, IN ABSENCE OF ANY DETAILS THE AO MADE THE ADDITION WHICH IS J USTIFIED. 7 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 SIMILARLY, IN ABSENCE OF FURNISHING OF THE DETAILS THE AO WAS A LSO JUSTIFIED IN DISALLOWING INTEREST ON LOAN AMOUNTING TO RS.4,09,000/-. 14. AS REGARDS THE DISALLOWANCE OF AUDIT FEES IS CONCERNED THE AO IN THE REMAND REPORT SUBMITTED THAT IN ABSENCE OF FILING OF T HE AUDIT REPORT THE AO WAS JUSTIFIED IN DISALLOWING THE AUDIT FEES. H E, HOWEVER, SUBMITTED THAT THE DISALLOWANCE OF PROVISION IS UNCALLED FOR SINCE IT AMOUNTS TO DOUBLE ADDITION. THE AO ALSO JUSTIFIED THE DISAL LOWANCE OF EXPENDITURE OF RS.27,700/- BEING 20% OF EXPENSES CLAIMED IN ABSENCE OF VARIOUS DETAILS. 15. THE LD.CIT(A) CONFRONTED THE REMAND REPORT OF THE AO TO THE ASSESSEE. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE THE LD.CIT(A) DIRECTED THE AO TO ALLOW DEPRECIATION AMOUNTING TO RS.13,78,042/- AS PER INCOME TAX ACT. HE ALSO DIRECTED T HE AO TO DELETE THE ADDITION OF RS.10,000/- ON ACCOUNT OF AUDIT FEES AND PROVISION OF RS.10,000/-. 16. SO FAR AS THE DISALLOWANCE OF EXPENSES IS CONCERNED H E DIRECTED THE AO TO RESTRICT SUCH DISALLOWANCE TO 5% OF SUCH EXPEN DITURE AS AGAINST 20% DISALLOWANCE BY THE AO ON ADHOC BASIS. HE ALS O DIRECTED THE AO TO DELETE THE ADDITION OF RS.42,00,425/- ON ACCOUNT OF UNSECURED LOAN AND RS.4,09,000/- TOWARDS INTEREST. 17. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPR ECIATION OF RS.4,30,477/- IN ABSENCE OF BILLS FOR ASSETS PURCHASED, PR OOFS OF ITS INSTALLATION, DATE OF INSTALLATION AND DATE FROM WHIC H THE ASSETS HAVE BEEN USED FOR THE PURPOSE OF BUSINESS HAVE NOT BEEN PRODUCED /FILED. DEPRECIATION IS ALLOWABLE ONLY WHEN ITS OWNERSHIP AND ITS USE FOR BUSINESS OF THE ASSESSEE HAS BEEN PROVED BEYOND DOUBT BY THE ASSESSEE . 8 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF AUDI T FEES OF RS. 10,000/- WHEN THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT BILLS AND EXPENDITURE VOUCHERS. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO R S. 27,700/- AT 20% OF ADVERTISEMENT AND PUBLICATION CHARGES TO RS.6,925/- AT 5% AS THE ASSESSEE HAS NOT PRODUCED BOOKS, VOUCHERS AND RELEVANT LEDGER ACCOUNTS. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF UNSEC URED LOANS OF RS.42,00,525/- FOR WHICH NAME OF PERSONS FROM WHOM THE LOAN WAS TAKEN, THEIR CONFIRMATIONS, THEIR IDENTITY CAPACITY AND CR EDITWORTHINESS HAS NOT BEEN PROVED. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF INTE REST ON LOAN OF RS.4,09,000 AND NOT ENHANCING THE SAME TO RS.8,18,412 /- IN VIEW OF FACTS THAT ALLEGED INTEREST ON LOAN HAS NOT BEEN PAID BY TH E ASSESSEE. 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NO T PRODUCED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) WHICH MAKES THE ORDER OF THE LD .CIT(A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPREC IATING THE EVIDENCE ON RECORD. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE HI M WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHIC H IS IN CLEAR VIOLATION OF PROVISION OF RULE 46A OF INCOME TAX RUL ES. 8. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 18. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT WHEN THE ASSESSEE DID N OT FURNISH THE BILLS FOR ASSETS PURCHASED, PROOF OF ITS INSTALLATION DATE OF INSTALLATION AND DATE FROM WHICH THE ASSETS HAVE BEEN PUT TO USE FOR BUSINESS THE CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO ALLOW DEPRECIATION OF RS.13,78,042/- WHICH WAS DISALLOWED BY THE AO AT RS.4,30,470/-. 19. SIMILARLY, IN ABSENCE OF FURNISHING OF AUDIT REPORT THE LD.C IT(A) WAS NOT JUSTIFIED IN DELETING THE AUDIT FEES OF RS.10,000/-. FURTHER, THE LD.CIT(A) ALSO WAS NOT JUSTIFIED IN RESTRICTING THE DISALLOW ANCE FROM 9 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 20% TO 5% MERELY ON THE GROUND THAT THE ASSESSEE HA S MAINTAINED BOOKS OF ACCOUNTS WHICH WAS AUDITED. HE SUBMITTED THAT SINCE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS, VOUC HERS AND RELEVANT LEDGER ACCOUNTS BEFORE THE AO, THEREFORE, THE CI T(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION. 20. SO FAR AS THE DELETION OF RS.42,00,425/- ON ACCOUNT OF UNSECURED LOAN IS CONCERNED THE LD. DEPARTMENTAL REPRES ENTATIVE SUBMITTED THAT THE ASSESSEE IN ITS BALANCE SHEET AS ON 31-03-2002 HAD SHOWN LOANS TAKEN FROM DIRECTORS AND SHAREHOLDERS AT R S.42,00,425/-. THE ASSESSEE HAS NEITHER GIVEN THE NAMES, CONFIRMATIONS A ND PROVED THE IDENTITY AND CAPACITY OF THE LENDERS TO ADVANCE SUCH HUGE LOANS. SUDDENLY BEFORE CIT(A) THE ASSESSEE HAS GIVEN THE NAMES OF MR. AMIT D. SINGH AND MRS. RITA D. SINGH. THEREFORE IN ABSENCE OF PRO PER VERIFICATION OF THE IDENTITY OF THE LOAN CREDITORS AND THEIR C APACITY TO EXTEND SUCH HUGE LOAN, THE CIT(A) WAS NOT JUSTIFIED IN DEL ETING THE ADDITION. SIMILAR IS THE CASE WITH THE DISALLOWANCE OF INTERES T. HE SUBMITTED THAT SINCE THE ASSESSEE IN THE INSTANT CASE H AS NEITHER FILED HIS RETURN OF INCOME NOR PRODUCED THE BOOKS OF ACCOUNTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND SINCE THE CIT(A) HA S ACCEPTED THE VARIOUS ADDITIONAL EVIDENCES FILED BEFORE HIM IN VIOLATION OF RULE 46A, THEREFORE, EITHER THE ORDER OF THE CIT(A) BE REVERSE D OR AT THE MOST THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO. 21. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT TH E LD.CIT(A) AFTER EXAMINING THE DETAILS FURNISHED BEFORE HIM DIRECTED THE AO TO ALLOW DEPRECIATION AT RS.13,78,052/-ALTHOUGH THE SAME WAS N OT CLAIMED BY THE ASSESSEE. SIMILARLY, SINCE THE ACCOUNTS WERE AUDITED THERE WAS NO JUSTIFICATION IN DISALLOWING THE AUDIT FEES OF RS. 10,000/-. 10 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 THE LD.CIT(A) AFTER PROPER APPRECIATION OF FACTS HAS DELETED THE SAME WHICH IS JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 22. SO FAR AS RESTRICTION OF DISALLOWANCE OF EXPENSES TO 5% AS AGAINST 20% BY THE AO HE SUBMITTED THAT SINCE THE NET PROFIT HA S BEEN SHOWN AT 29.37% WHICH IS MORE THAN REASONABLE CONSIDERING COMPA RABLE CASES, THE CIT(A) WAS FULLY JUSTIFIED IN RESTRICTING SUCH DISALLO WANCE TO 5% ON ADHOC BASIS. 23. SO FAR AS DELETION OF UNSECURED LOAN OF RS.42,00,425/- IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE CIT(A) AFTER CONSIDERING THE AMOUNT ADVANCED BY MR. AMIT D. SINGH AND MRS. RITA SINGH HAD ACC EPTED THE GENUINENESS OF THE TRANSACTION AND IDENTITY AND CAPACITY OF THE LOAN CREDITORS. FURTHER, THE INTEREST EXPENDITURE IS INCURRED ON TERM LOAN AND NOT ON THE UNSECURED LOAN, THEREFORE, NO DISALLOWANCE IS CALLED FOR . HE FURTHER SUBMITTED THAT THERE IS NO VIOLATION OF RULE 46A AS NO ADDITIONAL EVIDENCE HAS BEEN FILED. MOREOVER THE CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE AO. THEREFORE, THE GROUND RAIS ED BY THE REVENUE ON THIS ISSUE IS NOT MAINTAINABLE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BEING IN ACCORDANCE WITH LAW SHOULD BE UPHELD. 24. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE A SSESSEE COMPANY HAS BOOK PROFIT AS PER THE UNDATED AUDIT REPOR T FILED ALONG WITH BALANCE SHEET AND PROFIT AND LOSS ACCOUNT, A COPY OF WHICH HAS BEEN FILED BEFORE US. THE ASSESSEE COMPANY HAS NEITHER FILE D RETURN U/S.139 NOR FILED THE RETURN IN RESPONSE TO NOTICE U/S.153 A. DESPITE 11 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 REPEATED REMINDERS GIVEN BY THE AO THE ASSESSEE WAS S EEKING ADJOURNMENT FROM TIME TO TIME AND NEVER CAME FORWARD T O PRODUCE THE DETAILS. UNDER THESE CIRCUMSTANCES THE AO WAS COMPELLED TO PASS THE EXPARTE ASSESSMENT ORDER DETERMINING THE TOTAL INCOME A T RS.60,39,377/-. 25. WE FIND BEFORE THE CIT(A) THE ASSESSEE FILED CERTAIN EVIDENCES/DETAILS BASED ON WHICH THE LD.CIT(A) CALLED FOR A R EMAND REPORT FROM THE AO. HOWEVER, FROM THE COPY OF THE REMA ND REPORT WE FIND THE AO REITERATED HIS EARLIER STAND. 26. NOW COMING TO THE VARIOUS ADDITIONS MADE BY THE AO W E FIND THE ASSESSEE HAS NOT PRODUCED THE DETAILS OF ADDITION TO FIXE D ASSETS DURING THE YEAR. AS AGAINST DISALLOWANCE OF RS.4,30,477/- BY THE AO THE CIT(A) DIRECTED THE AO TO ALLOW DEPRECIATION OF RS.13,78 ,042/-. EVEN IN THE APPEAL MEMO FILED BEFORE THE CIT(A) WE FIND THE ASSESSEES GROUND BEFORE HIM IS TOWARDS DISALLOWANCE OF DEPRECIATION O F RS.4,30,477/- ONLY. WHEN THE ASSESSEE DID NOT FILE THE RE QUISITE DETAILS BEFORE THE AO IT IS NOT UNDERSTOOD AS TO HOW THE CIT(A) HAS WRITTEN THAT THE AO HAS NOT POINTED OUT ANY MISTAKE. B EFORE US IN THE PAPER BOOK THE AUDIT REPORT FILED IS NOT DATED ALTHOUGH T HE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FILED BEAR THE DATE . T HEREFORE, HOW THE CIT(A) COULD WRITE THAT HE HAD SEEN THE AUDIT REPORT . THE SAME IS NOT UNDERSTOOD. SIMILARLY, THE LD.CIT(A) ALSO HAS DIRECTED THE AO TO DELETE THE ADDITION OF RS.42,00,425/- ON THE BASIS OF THE S UBMISSIONS MADE BEFORE HIM. ALTHOUGH THE ASSESSEE IN THE BALANCE SH EET HAS SHOWN TO HAVE RAISED UNSECURED LOAN FROM DIRECTORS AND SHAREHOLDERS, HOWEVER, BEFORE THE CIT(A) THE ASSESSEE TOOK ALTOGETHER A DIFFERENT STAND AND SUBMITTED THAT NEW DIRECTORS HAD INTRODUCED AN AMOUNT OF RS. 51 LAKHS WHICH WAS USED FOR REPAYMENT OF LOAN OF RS.42,0 0,425/- 12 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 STANDING IN THE NAME OF SAI BHAKTI SERVICES WHICH ACCORDIN G TO THE LD. AR IS A FAMILY CONCERN OF MR. AND MRS. PATIL. FURTHER, THE AO IN THE REMAND REPORT HAS MENTIONED THAT THE ASSESSEE HAS NO T FURNISHED ANY DETAILS SUCH AS NAMES OF THE PERSONS FROM WHOM LOAN TAKE N, THEIR CONFIRMATIONS, CREDIT WORTHINESS ETC. IT IS ALSO NOT VERIFIABL E FROM THE BALANCE SHEET AS TO WHETHER THE SAME LOAN WAS CARRIED FORWARD FROM THE PRECEDING YEAR OR THERE IS SOME CHANGE DURING THE YEAR. IN OUR OPINION, THE FACTS OF THE CASE HAS NOT BEEN PROPERLY APP RECIATED BY THE LD.CIT(A) WHO HAS ACCEPTED WHATEVER THE ASSESSEE STAT ED BEFORE HIM. UNDER THESE CIRCUMSTANCES AND IN THE INTEREST OF JUSTIC E, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER SHOULD BE RESTORED T O THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE ON THESE 2 ISSUES. 27. SINCE THE ISSUE OF UNSECURED LOAN IS BEING RESTORED TO THE FILE OF THE AO, THEREFORE, THE ISSUE RELATING TO DISALLOWANCE OF PROP ORTIONATE INTEREST THEREON IS ALSO ALSO IS RESTORED TO THE FILE OF THE AO FOR HIS ADJUDICATION. 28. SO FAR AS DISALLOWANCE OF AUDIT FEES IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE HAS FILED BEFORE US THE AUDIT REPORT WHIC H IS UNDATED WHEREAS THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET B EAR DATE 24-07-2002. THEREFORE, THIS ALSO REQUIRES VERIFICATION AT T HE LEVEL OF THE AO AS TO WHETHER THE ASSESSEE COMPANY HAS GOT IT S ACCOUNTS AUDITED OR NOT AND IF SO, FILE A PROPER AUDIT REPORT BEFORE THE AO. 29. SO FAR AS DISALLOWANCE OF EXPENSES ON ESTIMATE IS CONCE RNED, ADMITTEDLY NO DETAILS WERE FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE FILED CERTAIN BILLS AND VOUCHERS BEFORE THE CIT(A). HOWEVER, SINCE THE ASSESSEE IS A PRIVATE LIMITED C OMPANY AND 13 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 IT IS SUPPOSED TO MAINTAIN PROPER BOOKS OF ACCOUNTS ALONG WITH THE BILLS AND VOUCHERS, THEREFORE, WE DEEM IT PROPER TO RESTOR E THIS ISSUE ALSO TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE TO HIS SATISFACTION REGA RDING THE VARIOUS EXPENSES. 30. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA NO.487/PN/2012 (BY REVENUE) (A.Y. 2003-04): 31. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE CO MPANY HAD FILED ITS RETURN OF INCOME U/S.139 ON 18-10-2004 DECLARING T OTAL LOSS OF RS.1,35,510/-. AS MENTIONED EARLIER SEARCH TOOK PLACE IN TH E SINGH- BHUTADA GROUP OF CASES ON 28-06-2007 DURING WHICH THE RESIDENTIAL PREMISES OF THE DIRECTORS WERE SEARCHED AND SIMULTANEOUS LY SURVEY U/S.133A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY. DESPITE ISSUE OF NOTICE U/S.153A, WHICH WAS DUL Y SERVED ON THE ASSESSEE, NO RETURN WAS FILED IN RESPONSE TO SUCH NO TICE. THE ASSESSEE WAS FILING LETTERS REQUESTING TIME AFTER REMINDER BY THE AO. SINCE THE ASSESSEE NEITHER FILED RETURN U/S.153A NOR FURNIS HED THE REQUISITE DETAILS FOR THE PURPOSE OF COMPLETION OF THE ASSE SSMENT THE AO COMPLETED THE ASSESSMENT EXPARTE U/S.144 R.W.S. 153A OF THE ACT . 32. THE AO OBSERVED THAT THE ASSESSEE HAS FILED THE RE TURN U/S.139(1) FOR THE IMPUGNED ASSESSMENT YEAR IN WHICH CERT AIN INFORMATIONS ARE AVAILABLE. AS AGAINST INCOME OF RS.38,57,040/ - THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS.35,91,892/- AND PRO FIT HAS BEEN ARRIVED AT RS.2,65,147/- WHICH HAS BEEN ENHANCED TO RS.12,16,923/- AFTER ADDING THE BROUGHT FORWARD PROFIT AT RS.9,07,175/-. SINCE THE VARIOUS EXPENSES CLAIMED BY THE A SSESSEE 14 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ARE NOT VERIFIABLE THE AO DISALLOWED DEPRECIATION OF RS.7,09,910 /-, AUDIT FEES OF RS.15,000/- AND 20% OF THE EXPENSES ON ACCO UNT ADVERTISEMENT AND PUBLICATION, COMMUNICATION CHARGES, CONVE YANCE CHARGES AND OTHER STAFF WELFARE AT RS.60,487/-. THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE ON THESE 4 HEADS WAS RS.3,02,434 /-. THE AO FURTHER NOTED FROM THE BALANCE SHEET THAT ASSESSEE HAS UNSECURED LOAN OF RS.42,08,071/- AND PROVISIONS OF RS.8,25,973/- HAVE BE EN SHOWN AS LIABILITY TOGETHER WITH CURRENT LIABILITY OF RS.2,34,592 /- . SINCE THE AO HAD DISALLOWED UNSECURED LOAN OF RS.42,00,071/ - IN THE PRECEDING YEAR HE DISALLOWED THE ADDITION OF RS.8,000/- FOR T HE YEAR UNDER CONSIDERATION. SINCE THE ASSESSEE HAS DEBITED INTE REST OF RS.8,25,973/- AND SINCE NO DETAILS WERE FURNISHED THE AO TR EATED THE LOANS AS NON-GENUINE AND DISALLOWED 50% OF THE INTEREST A T RS.4,12,000/-. THE AO ACCORDINGLY DETERMINED THE INCOME AT RS.24,01,472/-. 33. BEFORE CIT(A) THE ASSESSEE MADE IDENTICAL SUBMISSIONS AS MADE IN A.Y. 2002-03. THE LD.CIT(A) CALLED FOR A REMAND REPORT FRO M THE AO WHO REITERATED HIS STAND TAKEN DURING THE COURSE OF AS SESSMENT PROCEEDINGS. AFTER CONFRONTING THE SAME TO THE ASSESSEE AND AFTER CONSIDERING THE REJOINDER OF THE ASSESSEE TO SUCH REMAN D REPORT, THE LD.CIT(A) DIRECTED THE AO TO DELETE THE DEPRECIATION OF RS.7 ,09,910/-, AUDIT FEES OF RS.15,000/-, DISALLOWANCE OF RS.8,000/- ADDED UND ER THE HEADING UNSECURED LOAN, CURRENT LIABILITY OF RS.2,34,592/- AND PROVISION OF RS.8,25,973/-. HE ALSO DIRECTED THE AO TO RE STRICT THE DISALLOWANCE OF EXPENDITURE TO RS.15,122/- AS AGAINST RS.60,4 87/- MADE BY THE AO. 34. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 15 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPR ECIATION OF RS.7,09,910/-IN ABSENCE OF DETAILS LIKE COPIES OF BILLS FOR ASSETS PURCHASED, PROOF OF ITS INSTALLATION, DATE OF INSTALLATION AND DA TE FROM WHICH THE ASSETS HAVE BEEN USED FOR THE PURPOSE OF BUSINESS AND THAT DEPR ECIATION IS ALLOWABLE ONLY WHEN OWNERSHIP AND USE OF ASSETS FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE HAS BEEN PROVED BEYOND DOUBT BY TH E ASSESSEE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF AUDI T FEES OF RS. 15,000/- WHEN THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT BILLS AND EXPENDITURE VOUCHERS. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO R S. 15,122/- AT 5% OF ADVERTISEMENT AND PUBLICATION CHARGES AND DELETING RS. 45,365/- AT 15% WHEN THE ASSESSEE HAS NOT PRODUCED BOOKS, VOUCHERS AND R ELEVANT LEDGER ACCOUNTS. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 8,00 0/- TOWARDS THE ACCRETION TO UNSECURED LOAN FOR WHICH THE ASSESSEE HAS NO T GIVEN NAMES CONFIRMATIONS AND PROVED IDENTITY AND CAPACITY OF LE NDERS TO ADVANCE LOANS. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF INTE REST ON LOAN OF RS.8,25,973/- IN VIEW OF THE FACT THAT ALLEGED INTER EST ON LOAN HAS NOT BEEN PAID BY THE ASSESSEE AND THE ENTRY FOR CHARGING OF INT EREST HAD BEEN REVERSED BY THE LENDER BANK. 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.2,34,892/ - TOWARDS CURRENT LIABILITIES WHEN THE CLAIM OF THE ASSESSEE IS NOT VERIFIA BLE IN ABSENCE OF BILLS, VOUCHERS AND BOOKS OF ACCOUNT. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NO T PRODUCED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) WHICH MAKES THE ORDER OF THE LD .CIT(A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPREC IATING THE EVIDENCE ON RECORD. 8. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCES BEFORE H IM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHIC H IS IN CLEAR VIOLATION OF PROVISION OF RULE 46A OF INCOME TAX RUL ES. 9. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 35. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE FACTS IN THE INSTANT C ASE ARE 16 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 IDENTICAL TO THE FACTS OF THE CASE FOR A.Y. 2002-03. GROUND S RAISED BY THE REVENUE ARE ALSO IDENTICAL TO THE GROUNDS THAT HAVE BEEN RAISED IN A.Y. 2002-03. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. FOLLOWING THE SAME REASONINGS THE GROUNDS R AISED BY THE REVENUE FOR THE IMPUGNED ASSESSMENT YEAR ARE ALSO RESTORED TO THE FILE OF THE AO WHO SHALL DECIDE THE ISSUE IN THE LIGHT OF THE D IRECTIONS GIVEN IN A.Y. 2002-03. THE GROUNDS RAISED BY THE REVENU E ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 36. THE ASSESSEE HAS ALSO FILED THE FOLLOWING GROUND IN SU PPORT OF THE ORDER OF LD.CIT(A) : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED U/S.144 R.W.S. 153A IS BAD IN LAW AS THE SAME IS NOT BASE D ON ANY INCRIMINATING DOCUMENTS FOUND RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, IN THE COURSE OF SEARCH NOR THE PROCEED INGS OF THIS ASSESSMENT YEAR CAN BE SAID TO HAVE BEEN ABATED. 37. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE AB OVE GROUND SUBMITTED THAT THE RESPONDENT ASSESSEE SUPPORTS THE ORDER OF THE CIT(A) AS PER RULE 27 OF THE ITAT RULES, 1963. HE SUBMITT ED THAT THE ASSESSEE FILED THE RETURN IN THE INSTANT CASE ON 18-10-2 004, I.E. U/S.139(4) AND WITHIN THE EXTENDED DUE DATE ON 31-03-200 5. NO NOTICE U/S.143(2) HAS BEEN ISSUED WITHIN THE PERIOD ALLOWED F OR TAKING UP SCRUTINY. NO INCRIMINATING MATERIAL WAS FOUND. THE PROCE EDINGS OF THIS ASSESSMENT YEAR CANNOT BE SAID TO HAVE BEEN ABAT ED BECAUSE NO PROCEEDINGS WERE PENDING RELEVANT TO THIS ASSESSMENT Y EAR ON THE DATE OF SEARCH. THE ASSESSMENT IS DEEMED TO HAVE BEEN COMP LETED U/S.143(1) AS NO NOTICE U/S.143(2) HAS BEEN ISSUED WITHIN THE PERIOD PRESCRIBED FOR THAT PURPOSE AND THEREFORE THE SAID ASSE SSMENT IS DEEMED TO HAVE BEEN COMPLETED U/S.143(3) AND HENCE CANN OT BE ABATED. FOR THE ABOVE PROPOSITION THE LD. COUNSEL FOR TH E ASSESSEE 17 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 RELIED ON THE DECISION IN THE CASE OF ACIT VS. SHRI JAYENDR A P. JHAVERI VIDE ITA NOS. 2141 TO 2144/MUM/2012 ORDER DATED 20-02 -2014 FOR A.YRS. 2003-04 TO 2006-07 AND THE DECISION OF HONBLE BO MBAY HIGH COURT, NAGPUR BENCH IN THE CASE OF CIT VS. M/S. MURALI AGR O PRODUCTS LTD. AND THE DECISION IN THE CASE OF ACIT VS. PRATIBHA I NDUSTRIES LTD., REPORTED IN (2013) 23 ITR 766. 38. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY OPPOSED THE LEGAL GROUND RAISED BY THE LD. COUNSEL FOR THE ASSESSEE. 39. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIO US DECISIONS CITED BEFORE US. IT IS AN ADMITTED FACT THAT DESPITE NOTI CE ISSUED U/S.153A THE ASSESSEE DID NOT FURNISH THE RETURN NOR PR ODUCED THE BOOKS OF ACCOUNTS AND OTHER RELEVANT DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, THIS IS THE SECOND ROU ND OF LITIGATION BEFORE THE TRIBUNAL. IN THE FIRST ROUND THE TRIBUN AL HAS RESTORED THE ISSUE TO THE FILE OF THE CIT(A) WHO HAD DISMISS ED THE APPEAL FILED BY THE ASSESSEE FOR NON-PAYMENT OF ADMITTED T AX. NO SUCH GROUND WAS TAKEN DURING THE FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL. FROM THE LIST OF INVENTORY AND ACCOUNT BOOKS ET C. FOUND AND SEIZED DURING THE COURSE OF SEARCH AS PER ANNEXURE A1 P1 AND ANNEXURE A P1, COPIES OF WHICH ARE PLACED AT PAGES 50 A ND 51 OF THE PAPER BOOK, WE FIND VARIOUS DOCUMENTS WERE SEIZED BY THE DEPART MENT. SINCE THE ASSESSEE DID NOT COOPERATE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO HAD TO REFER TO THE PROFIT AND LOSS A CCOUNT FILED ALONG WITH THE RETURN OF INCOME AND GO FOR EXPARTE ASSE SSMENT. IT HAS NOT BEEN PROVED THAT THE DOCUMENTS FOUND DURING THE C OURSE OF SEARCH 18 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ARE NOT INCRIMINATING. THE ASSESSEE HAD SHOWN TOTAL NON- COOPERATIVE ATTITUDE DURING THE ASSESSMENT PROCEEDINGS. NO SUCH GRO UND WAS TAKEN BEFORE THE AO OR CIT(A) OR DURING THE FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, THE LEGA L GROUND RAISED BY THE ASSESSEE BEING DEVOID OF ANY MERIT IS DISMISS ED. VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE AR E NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTIN GUISHABLE ESPECIALLY WHEN IN THE INSTANT CASE THE ASSESSEE HAS SH OWN SCANT REGARD FOR STATUTORY NOTICES OF THE DEPARTMENT FOR WHICH THE AO WAS COMPELLED TO MAKE EXPARTE ASSESSMENT. ACCORDINGLY, THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. ITA NO.488/PN/2012 (BY REVENUE) (A.Y. 2004-05): 40. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME U/S.139 ON 18-10-2004 DECLARING TOTAL IN COME OF RS.50,75,780/-. AS MENTIONED EARLIER SEARCH U/S.132(1) OF THE I.T. ACT IN THE INSTANT CASE HAS TAKEN PLACE ON 28-06-2007. THE AO ISSUED NOTICE U/S.153A TO THE ASSESSEE COMPANY WHICH WAS SERV ED ON IT ON 19-10-2007. HOWEVER, THE ASSESSEE COMPANY DID NOT FILE A NY RETURN AND FILED A LETTER REQUESTING SOME MORE TIME AS PER ITS LET TER DATED 19- 11-2007. SUBSEQUENTLY, THE AO ISSUED REMINDERS. HOWEVE R, THERE WAS NO COMPLIANCE BY THE ASSESSEE OTHER THAN ASKING FOR SOME TIME. DESPITE NOTICE SERVED U/S.142(1) ALONG WITH A QUESTIONNAIRE CALLING FOR CERTAIN SPECIFIC INFORMATION THERE WAS NO COMPLIANCE FROM THE SIDE OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE AO HAD NO OTHE R OPTION LEFT BUT TO COMPLETE THE ASSESSMENT U/S.144 OF THE I.T. ACT. TH E AO ON THE BASIS OF THE INFORMATION AVAILABLE IN THE RETURN PROCEEDED T O COMPLETE THE ASSESSMENT EXPARTE. HE OBSERVED FROM THE DETAILS FILE D ALONG WITH THE RETURN THAT ASSESSEE HAD SHOWN INCOME OF RS.1,70,23,4 01/- AND 19 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 EXPENDITURE OF RS.1,10,38,635/- AND DECLARED PROFIT OF RS.43, 78,765/-. THE SAME HAS BEEN ENHANCED TO RS.55,95,689/- AFTER ADDIN G BROUGHT FORWARD PROFIT OF RS.12,16,923/-. SINCE THERE WAS NO COMPLI ANCE FROM THE SIDE OF THE ASSESSEE THE AO DISALLOWED DEPRECIATION CLA IMED IN THE PROFIT AND LOSS ACCOUNT AT RS.19,28,953/- AND AUDIT FEE OF R S. 17,500/-. THE AO SIMILARLY NOTED THAT ASSESSEE HAS CLAIME D ADVERTISEMENT AND PUBLICATION CHARGES, COMMUNICATION CHARG ES, CONVEYANCE CHARGES, STAFF WELFARE, SALES PROMOTION AND SUND RY EXPENSES TOTALLING RS.7,78,316/-. SINCE THERE WAS NO COMPLIA NCE FROM THE SIDE OF THE ASSESSEE THE AO DISALLOWED AN AMOUNT OF R S.1,55,675/- BEING 20% OF SUCH EXPENSES. THE AO FURTHER NOTED THAT THE ASSESSEE IN THE BALANCE SHEET HAS SHOWN PROVISION OF RS.19,29,657/- AND CURRENT LIABILITY OF RS.63,41,980/- BOTH TOTALLING TO RS.82,71,537 /-. SINCE NO DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE THE AO TREATED THE ABOVE INCOME AS INCOME FROM UNDISCLOSED SOURCES. THE AO FURTHER NOTED THAT THE CAPITAL OF THE ASSESSEE HAS GONE UP FROM 20 LAKHS TO RS.1,85,33,000/- RESULTING INTO ENHANCEMENT OF SHAR E CAPITAL BY RS.1,65,33,000/-. THE ASSESSEE DID NOT FURNISH THE LIST O F SUBSCRIBERS TO SUCH SHARE CAPITAL. THE CREDIT WORTHINES S OF THE SHAREHOLDERS WERE ALSO NOT SUBMITTED. IN VIEW OF THE ABO VE, THE AO TREATED THE ENTIRE AMOUNT OF SHARE CAPITAL OF RS.1,65,33,000 /- AS INCOME FROM UNDISCLOSED SOURCES. SIMILARLY, THE AO ALSO DISALLO WED THE INTEREST ON THE UNSECURED LOAN CLAIMED AT RS.10,41,481 /-. THUS, IN SHORT, THE AO DETERMINED THE ASSESSED INCOME AT RS.3,3 5,43,835/- AS AGAINST THE RETURNED INCOME OF RS.50,75,780/-. 41. BEFORE CIT(A) THE ASSESSEE STRONGLY OBJECTED TO TH E EXPARTE ASSESSMENT ORDER PASSED BY THE AO. CERTAIN DETAILS WER E FILED AND SUBMISSIONS MADE BASED ON WHICH THE LD.CIT(A) CALLED FOR A R EMAND 20 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 REPORT FROM THE AO. THE AO REITERATED HIS EARLIER STAND. THE LD.CIT(A) AFTER CONSIDERING THE REMAND REPORT OF THE AO AND THE S UBMISSION OF THE ASSESSEE TO SUCH REMAND REPORT DELETED THE ADDITIO N ON ACCOUNT OF DEPRECIATION AMOUNTING TO RS.19,28,953/-, AUDIT FEE OF RS.17,50 0/-, ADDITION OF RS.1,65,33,000/- TOWARDS INCREASE IN CAPITAL AND RS.10,41,481/- TOWARDS INTEREST ON UNSECURED LOAN. SIMILAR LY OUT OF THE PROVISIONS AND CURRENT LIABILITIES, THE CIT(A) DELETED AN A MOUNT OF RS.41,07,530/- BEING ON ACCOUNT OF CREDITORS FOR CAPITAL WOR KS AND AN AMOUNT OF RS.18,56,095/- FOR GOODS AND EXPENSES. SIMILARLY , HE ALSO DELETED THE DISALLOWANCE OF TDS PAYABLE AMOUNTING TO RS.3,8 0,855/-. SIMILARLY OUT OF THE DISALLOWANCE OF EXPENSES OF RS.1,55,675/- THE LD.CIT(A) RESTRICTED THE SAME TO 5% OF THE TOTAL EXPENSES AND SUSTAINED RS.39,919/- AS AGAINST RS.1,55,675/- MADE BY THE AO. 42. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPR ECIATION OF RS.19,28,953/- IN ABSENCE OF DETAILS LIKE COPIES OF BIL LS FOR ASSETS PURCHASED, PROOF OF ITS INSTALLATION, DATE OF INSTALLAT ION AND DATE FROM WHICH THE ASSETS HAVE BEEN USED FOR THE PURPOSE OF BUSINE SS AND THAT DEPRECIATION IS ALLOWABLE ONLY WHEN OWNERSHIP AND USE OF ASSETS FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE HAS BEEN PROVED BEYOND D OUBT BY THE ASSESSEE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF AUDI T FEES OF RS. 17,500/- WHEN THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT BILL S AND EXPENDITURE VOUCHERS. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE FROM 20% TO 5% TOWARDS VARIOUS EXPENSES IN ABSENCE OF PROPER BOOKS OF ACCOUNTS, VOUCHERS AND RELEVANT LEDGER ACCOUNTS IN SPITE OF VARIOUS IRREGULA RITIES BROUGHT TO HIS NOTICE. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION MADE ON ACCOU NT OF CREDITORS FOR CAPITAL WORKS OF RS.41,07,530/- AND FOR GOODS AND EXP ENSES AT RS.18,56,095/- ON THE GROUNDS THAT THERE WAS NO NECESSI TY OF PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIO NS WHEN ASSESSEE 21 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 HAD NEITHER FILED ANY CONFIRMATION NOR PRODUCED BOO KS OF ACCOUNT AND VOUCHERS. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF TDS PAYABLE OF RS.3,80,855/- MERELY ON THE GROUNDS THAT TDS WAS PAID WHEN THE ASSESSEE HAD NOT FILED ANY DETAILS REGARDING DATES OF DEDUCTIO N OF TAX AND ITS PAYMENTS, APPLICABILITY OF PROVISIONS OF SECTION 40(A)( IA) OF THE INCOME TAX ACT. 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION MADE OF RS.1,6 5,33,000/- TOWARDS INCREASE IN SHARE CAPITAL WHEN THE ASSESSEE HAD FAILED TO FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM REGARDIN G SOURCE OF INVESTMENTS. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10,4 1,481/- TOWARDS INTEREST ON UNSECURED LOANS ON THE GROUNDS THAT THE INT EREST HAS BEEN PAID PRIOR TO THE DATE OF FILING OF RETURN WHEN ACTUALLY THE ASSESSEE HAD NOT FILED ANY PROOF OF PAYMENT AND HAD NOT ESTABLISHED THAT THE LOANS HAD BEEN 8. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NO T PRODUCED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) WHICH MAKES THE ORDER OF THE LD .CIT(A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPREC IATING THE EVIDENCE ON RECORD. 9. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE H IM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHIC H IS IN CLEAR VIOLATION OF PROVISION OF RULE 46A OF INCOME TAX RUL ES. 10. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 43. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASE FOR A.Y. 2002-03. GROUND S RAISED BY THE REVENUE ARE ALSO IDENTICAL TO THE GROUNDS THAT HAVE BEEN RAISED IN A.Y. 2002-03. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED HAVE BEEN RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. FOLLOWING THE SAME REASONINGS THE GROUNDS RAISED BY THE REVENUE FOR THE IMPUGNED ASSESSMENT YEAR ARE RESTORED TO THE FILE O F THE AO WHO SHALL DECIDE THE ISSUE IN THE LIGHT OF THE DIRECTIONS GIVEN IN A.Y. 2002- 22 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 03. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGL Y ALLOWED FOR STATISTICAL PURPOSES. 44. THE ASSESSEE HAS ALSO FILED THE FOLLOWING GROUND UNDER RULE 27 OF THE ITAT RULES, 1963 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED U/S.144 R.W.S. 153A IS BAD IN LAW AS THE SAME IS NOT BASE D ON ANY INCRIMINATING DOCUMENTS FOUND RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, IN THE COURSE OF SEARCH NOR THE PROCEED INGS OF THIS ASSESSMENT YEAR CAN BE SAID TO HAVE BEEN ABATED. 44.1 THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE ABOVE GROUND SUBMITTED THAT THE RESPONDENT ASSESSEE SUPPORTS THE ORDER OF THE CIT(A) AS PER RULE 27 OF THE ITAT RULES, 1963. HE SUBMITT ED THAT THE ASSESSEE FILED THE RETURN IN THE INSTANT CASE ON 18-10-2 004, I.E. U/S.139(4) AND WITHIN THE EXTENDED DUE DATE ON 31-03-200 5. NO NOTICE U/S.143(2) HAS BEEN ISSUED WITHIN THE PERIOD ALLOWED F OR TAKING UP SCRUTINY. NO INCRIMINATING MATERIAL WAS FOUND. THE PROCE EDINGS OF THIS ASSESSMENT YEAR CANNOT BE SAID TO HAVE BEEN ABAT ED BECAUSE NO PROCEEDINGS WERE PENDING RELEVANT TO THIS ASSESSMENT Y EAR ON THE DATE OF SEARCH. THE ASSESSMENT IS DUE TO HAVE BEEN COMPLETE D U/S.143(1) AS NO NOTICE U/S.143(2) HAS BEEN ISSUED WITHIN THE PERIOD P RESCRIBED FOR THAT PURPOSE AND THEREFORE THE SAID ASSESSMENT IS D EEMED TO HAVE BEEN COMPLETED U/S.143(3) AND HENCE CANNOT BE ABATED. FOR THE ABOVE PROPOSITION THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION IN THE CASE OF ACIT VS. SHRI JAYENDRA P. JHAVERI VIDE ITA NOS. 2141 TO 2144/MUM/2012 ORDER DATED 20-02-2014 FOR A.YR S. 2003-04 TO 2006-07 AND THE DECISION OF HONBLE BOMBAY HIGH COURT , NAGPUR BENCH IN THE CASE OF CIT VS. M/S. MURALI AGRO PRODUCTS LT D. AND THE DECISION IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES LTD., R EPORTED IN (2013) 23 ITR 766. 23 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 45. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY OPPOSED THE LEGAL GROUND RAISED BY THE LD. COUNSEL FOR THE ASSESSEE. 46. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES. IT IS AN ADMITTED FACT THAT DESPITE NOTICE ISSUED U/S.153A THE ASSESSEE DID NOT FURNISH THE RETURN NOR PRODUCED THE BOOKS OF A CCOUNTS AND OTHER RELEVANT DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNAL. IN THE FIRST ROUND THE TRIBUNAL HAS RESTORED THE ISSUE TO T HE FILE OF THE CIT(A) WHO HAD DISMISSED THE APPEAL FILED BY THE ASSESSEE FO R NON- PAYMENT OF ADMITTED TAX. NO SUCH GROUND WAS TAKEN DUR ING THIS FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL. FROM THE LIST OF INVEN TORY AND ACCOUNT BOOKS ETC. FOUND AND SEIZED AS PER ANNEXURE A1 P1 AND ANNEXURE A P1, COPIES OF WHICH ARE PLACED AT PAGES 50 A ND 51 OF THE PAPER BOOK, WE FIND VARIOUS DOCUMENTS WERE SEIZED BY THE DEPART MENT. SINCE THE ASSESSEE DID NOT COOPERATE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO HAD TO REFER TO THE PROFIT AND LOSS A CCOUNT FILED ALONG WITH THE RETURN OF INCOME AND GO FOR EXPRATE ASSE SSMENT. IT HAS NOT BEEN PROVED THAT THE DOCUMENTS FOUND DURING THE C OURSE OF SEARCH ARE NOT INCRIMINATING. THE ASSESSEE HAD SHOWN TOTAL NON- COOPERATIVE ATTITUDE DURING THE ASSESSMENT PROCEEDINGS. NO SUCH GR OUND WAS TAKEN BEFORE THE AO OR CIT(A) OR DURING THE FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, THE LEGA L GROUND RAISED BY THE ASSESSEE BEING DEVOID OF ANY MERIT IS DISMISS ED. VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE AR E NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTIN GUISHABLE ESPECIALLY WHEN IN THE INSTANT CASE THE ASSESSEE HAS SH OWN SCANT REGARD FOR STATUTORY NOTICES OF THE DEPARTMENT FOR WHICH THE AO WAS 24 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 COMPELLED TO MAKE EXPARTE ASSESSMENT. ACCORDINGLY, THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. ITA NO.489/PN/2012 (BY REVENUE) (A.Y. 2005-06): 47. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE CO MPANY HAD FILED ITS ORIGINAL RETURN OF INCOME U/S.139 ON 02-12-2006 SH OWING TOTAL INCOME OF RS.42,60,730/- WHICH WAS REVISED ON 15-03- 2007 DECLARING TOTAL INCOME OF RS.27,80,325/-. CONSEQUENT TO SEARCH ACTIO N U/S.132 OF THE I.T. ACT IN THE GROUP OF CASES ON 28-06 -2007 THE AO ISSUED NOTICE U/S.153A OF THE ACT WHICH WAS DULY SERVED ON THE ASSESSEE ON 19-10-2007. THE ASSESSEE COMPANY FILED A LE TTER REQUESTING SOME MORE TIME FOR FILING THE RETURN VIDE ITS LETT ER DATED 19- 11-2007. REMINDER WAS ISSUED TO THE ASSESSEE ON 31-01 -2008 WHICH WAS SERVED ON HIM ON 04-02-2008. THE ASSESSEE COMPAN Y AGAIN FILED A LETTER REQUESTING TIME FOR FILING OF THE RETURN. HOWEVER, THERE WAS NO COMPLIANCE FROM THE ASSESSEE. SUBSEQUENTLY, THE AO ISSUE D NOTICE U/S.142(1) ALONG WITH A QUESTIONNAIRE CALLING FOR CERTAIN INFORMA TIONS. AGAIN THERE WAS NO COMPLIANCE. THE AO, THEREFORE, HAD NO OTHER OPTION BUT TO COMPLETE THE ASSESSMENT EXPARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 48. FROM THE RETURN FILED BY THE ASSESSEE THE AO NOTE D THAT AS AGAINST INCOME OF RS.2,12,60,160/- THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS.1,71,83,691/- AND ARRIVED AT PROFIT OF RS.25,84,787/-. IN ABSENCE OF COMPLIANCE FROM THE SIDE OF TH E ASSESSEE THE AO DISALLOWED DEPRECIATION CLAIMED AT RS.25,63 ,664/- AND AUDIT FEES CLAIMED AT RS. 1 LAKH. THE DEPRECIATION WAS DISALLOWED BY THE AO FOR NON SUBMISSION OF DETAILS OF ASSETS AND ITS W ORKING. SIMILARLY THE AUDIT FEES WAS DISALLOWED BY THE AO ON THE G ROUND THAT 25 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 NO AUDIT HAS BEEN CARRIED OUT AND NO TDS HAS BEEN MAD E. THE AO FURTHER NOTED THAT THE ASSESSEE HAS CLAIMED VARIOUS EX PENSES SUCH AS COMMUNICATION CHARGES, CONVEYANCE CHARGES, STAFF WELFARE, SU NDRY EXPENSES TOTALING TO RS.5,54,472/-. IN ABSENCE OF ANY DET AILS FILED BY THE ASSESSEE THE AO DISALLOWED AN AMOUNT OF RS.1,10,894/- BE ING 20% OF SUCH EXPENSES. THE AO SIMILARLY DISALLOWED ADVERTISEMENT EXPENSES OF RS.2,85,365/- AND LEGAL AND PROFESSIONAL EXPENSE S OF RS.61,050/-FOR NON DEDUCTION OF TAX AT SOURCE. THE AO SIMIL ARLY NOTED THAT THE ASSESSEE IN THE BALANCE SHEET HAS SHOWN PROV ISION ALONG WITH CURRENT LIABILITIES AT RS.7,00,68,925/-. SINCE NO DETAILS HAVE B EEN FURNISHED THE AO TREATED THE SAME AS INCOME FROM UNDISCLO SED SOURCES AND ADDED BACK TO THE TOTAL INCOME OF THE ASS ESSEE. SIMILARLY, FOR WANT OF DETAILS SUCH AS NAME OF THE LENDERS, CONFIRMATION S FROM SUCH LENDERS, THEIR IDENTITY AND CAPACITY, THE AO DISALLOWED FRESH UNSECURED LOAN TAKEN BY THE ASSESSEE DURING THE YEAR AT RS.41,41,173/-. SIMILARLY THE AO ALSO DISALLOWED AN AMOUNT OF RS.18,000/- BEING PROPORTIONATE INTEREST ON SUCH UNSECUR ED LOAN. IN NUTSHELL THE AO DETERMINED THE TOTAL INCOME AT RS.8,01,01,59 6/- AS AGAINST THE RETURNED INCOME AT RS.27,80,325/-. 49. BEFORE CIT(A) THE ASSESSEE VEHEMENTLY CHALLENGED THE EXPARTE ORDER PASSED BY THE AO. CERTAIN DETAILS WERE FILED ALONG W ITH SUBMISSIONS WHICH THE LD.CIT(A) FORWARDED TO THE AO ASKING FOR HIS COMMENTS. THE AO IN HIS REMAND REPORT REITERATED HIS EA RLIER STAND THAT THE ASSESSEE HAS NOT PRODUCED THE REQUISITE DETA ILS FOR PROPER ADJUDICATION OF THE CASE. FURTHER, THE ASSESSEE HAS NOT DEDUCTED TDS FROM PAYMENT MADE TO THE AUDITORS, ADVERTISEMENT EXPENS ES, LEGAL AND PROFESSIONAL EXPENSES ETC. SIMILARLY AS REGARDS THE SUNDR Y CREDITORS FOR CAPITAL WORKS AND CREDITORS FOR SUPPLY OF GOODS AND S ERVICES THE AO 26 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 REPORTED THAT THERE WAS VARIATION IN THE BALANCE OF SUND RY CREDITORS AS FURNISHED BY THE ASSESSEE AND AS APPEARING IN THE BALANC E SHEET. THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT WITH VOU CHERS. SIMILARLY, AS REGARDS THE BANQUET BOOKING THE AO IN THE REMAND REPORT SUBMITTED THAT ASSESSEE HAD ONLY FILED A COPY OF LEDGER ACCOUNT. IT WAS NOT ASCERTAINABLE AS TO IN WHICH YEARS THE ADVAN CES RECEIVED HAS BEEN TREATED AS INCOME. SIMILARLY PARTY ADVANCE, ROO M ADVANCE DETAILS ARE ALSO NOT FILED TO ASCERTAIN AS TO IN WHICH YEAR THE ADVANCE RECEIVED HAD BEEN TREATED AS INCOME. THE AO ALSO REPO RTED THAT THE ASSESSEE HAS NOT FURNISHED DETAILS OF AMOUNTS ON WHICH TA X HAS BEEN DEDUCTED, DATE OF DEDUCTION AND DATE OF PAYMENT INTO THE GOVERNMENT ACCOUNT. 50. THE LD.CIT(A) CONFRONTED THE REMAND REPORT OF THE A O TO THE ASSESSEE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE TO SUCH REMAND REPORT THE CIT(A) DELETED THE VARIOUS ADDITIONS MA DE BY THE AO. 51. AGGRIEVED WITH SUCH ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS 25,63,664/- IN ABSENCE OF BILLS FOR ASSETS PURCHASED, P ROOFS OF ITS INSTALLATION, DATE OF INSTALLATION AND DATE FROM WHIC H THE ASSETS HAVE BEEN USED FOR THE PURPOSE OF BUSINESS HAVE NOT BEEN PRODUCED /FILED. DEPRECIATION IS ALLOWABLE ONLY WHEN ITS OWNERSHIP AND ITS USE FOR BUSINESS OF THE ASSESSEE HAS BEEN PROVED BEYOND DOUBT THE ASSESSEE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT TDS PAYABLE OF RS 17,588/ - WAS AN ALLOWABLE EXPENDITURE WHEN IN FACT THIS AMOUNT HA D BEEN DEBITED TO THE ADVERTISEMENT EXPENSES. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT UPHOLDING THE DISALLO WANCE OF RS 5,255/ - UNDER SECTION 40A(3) OF THE ACT WHEN THE ASSESSEE HAD AI D SUM OF RS 26,275/ - IN VIOLATION OF PROVISION OF SECTION 40A(3) OF THE ACT. 27 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RESTRICTING ADHOC DISALLOW ANCE OF RS 1,10,894/- MADE AT 20% OF COMMUNICATION CHARGES, CON VEYANCE CHARGES, STAFF WELFARE AND SUNDRY EXPENSES TO RS 23,170/ - I.E. 5 % OF THE TOTAL EXPENDITURE WHEN THE ASSESSEE HAD NOT ESTABLISHED AS TO HO W HIS PERCENTAGE OF NET PROFIT IS REASONABLE AND EXPENDITUR E WAS NOT SUPPORTED BY BOOKS OF ACCOUNT AND VOUCHERS. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNPROVED SUNDRY CREDITORS FOR CAPITAL WORKS AND CREDITORS FOR GO ODS AND EXPENSES AMOUNTING TO RS 6,24,11,484/- AND RS 22,56,089/- RESPE CTIVELY WHEN THE ASSESSEE HAD NOT PRODUCED BOOKS OF ACCOUNT AND VOUCHERS. 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MA DE ON ACCOUNT OF BANQUET BOOKING OR RS 76,105/ - WHEN THE ASSESSEE HAD NOT PROVED THE NATURE OF RECEIPT BY PRODUCING BOOKS OF ACCOUNT AND VOUCHERS AND HAD ALSO NOT ESTABLISHED THAT SUCH ADVANCES HAVE BEEN SUBSEQUE NTLY OFFERED AS INCOME. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MA DE ON ACCOUNT OF PARTY ADVANCE AND ROOM ADVANCE OF RS 6,000/-& RS.5,000/- R ESPECTIVELY WHEN THE ASSESSEE HAD NOT PROVED THE NATURE OF RECEIPTS BY PR ODUCING BOOKS OF ACCOUNT AND VOUCHERS AND HAD ALSO NOT ESTABLISHED THAT SUCH ADVANCES HAVE BEEN SUBSEQUENTLY OFFERED AS INCOME. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT O F TAX DEDUCTED AT SOURCE OF RS.27,444/- (ON CONTRACTORS PAYMENTS), RS.49, 330/- (ON SALARY) & RS.20,91,873/- WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS, BY HOLDING THAT THE ADDITION ON ACCOUNT OF SUCH AMOUNTS DOES NOT HAVE ANY IMPACT OF PROFIT OF THE CONCERN. 9. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN IGNORING THE SUBMISSION OF THE ASSESSIN G OFFICER MADE IN THE REMAND REPORT THAT THE AMOUNTS ON WHICH TAX H AS BEEN DEDUCTED AT SOURCE ARE ALLOWABLE/ DISALLOWABLE AS EXPENDITURE ONLY WHEN THE ASSESSEE HAS PAID THE TAX DEDUCTED WITHIN TIME AS PROVIDED UND ER THE ACT AND FAILURE TO COMPLY TO SUCH PROVISIONS WILL ATTRACT DISAL LOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 10. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN IGNORING THE SUBMISSION OF THE ASSESSIN G OFFICER MADE IN THE REMAND REPORT THAT THE INCOME OF THE ASSESSEE IS TO BE ENHANCED BY A SUM OF RS 14,03,450/- WHICH WAS PAID BY THE ASSESSEE AN D NOT RECORDED IN THE BOOKS AS EXPLAINED BY ASSESSING OFFICER IN REMAND REPORT. 11. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS 5,55,879/- BEING SALARY PAYABLE TO STAFF ON WHICH TAX HAD NOT BE EN DEDUCTED. 12. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION TOWARDS PRO VISION FOR ELECTRICITY EXPENSES OF RS 35,000/-, RENT PAYABLE RS 4, 200/-AND TELEPHONE 28 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 EXPENSES PAYABLE RS 8,303/- ON THE GROUNDS THAT THE EX PENDITURE WAS REASONABLE AND THE LIABILITIES WERE PAID SUBSEQUENTLY, CONTRARY TO THE FACT THAT THE ASSESSEE HAD FAILED TO FURNISH ANY DETAILS AND P RODUCE BOOKS OF ACCOUNT AND VOUCHERS. 14. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON AC COUNT OF INCREASE IN UNSECURED LOAN OF RS 41,14,173/- AND PROPORTIONATE IN TEREST ON UNSECURED LOAN RS 18,000/ - WHEN THE AMOUNT OF LOAN DID NOT TA LLY WITH THE AMOUNT IN THE BALANCE SHEET OF THE LENDER AND THE ASSESSEE HAD NOT FURNISHED ANY CLARIFICATION OR RECONCILIATION. 15. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSE E HAS NOT PRODUCED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER B EFORE THE ASSESSING OFFICER OR BEFORE THE CIT (A) WHICH MAKES THE ORDER OF THE LD. CIT (A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WIT HOUT APPRECIATING THE EVIDENCE ON RECORD. 16. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE HIM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHICH IS IN CLE AR VIOLATION OF PROVISION OF RULE 46A OF INCOME TAX RULES. 17. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING THE APPEAL OF THE ASSESSEE EVEN THOUGH THE ASSESSEE HAS VIOLATED THE PROVISION OF SECTION 249(4)(A) O F THE ACT IN AS MUCH AS HE DID NOT PAY TAX AMOUNT EQUAL TO THE AMOUN T OF ADVANCE TAX WHICH WAS PAYABLE BY HIM, AS PER PROVISION OF THIS SECTI ON. 18. THE ORDER OF THE LD.CIT(A)-I, NASHIK MAY BE VACA TED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 19. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 52. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CHALLEN GED THE ORDER OF CIT(A). HE SUBMITTED THAT THE CIT(A) HAS DELETED THE ADDITION S WITHOUT PROPERLY APPRECIATING THE FACTS. THE VARIOUS OT HER EXPENSES DELETED BY THE CIT(A) ALSO ARE NOT ON THE BASIS OF PROPER APPRECIATION O F FACTS. HE HAS SIMPLY ACCEPTED THE SUBMISSIONS MADE BY T HE ASSESSEE AND DELETED THE ADDITION. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE AO BE RESTORED. IN HIS ALTERNATE CONTENTION THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 29 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 53. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE AO DISALLOWED DEPRECIATION OF RS.25,63,664/- FOR NON FURNISHING OF DETAILS OF A SSETS AND WORKING OF DEPRECIATION. HE SUBMITTED THAT DEPRECIATIO N HAS BEEN CLAIMED IN THE REVISED RETURN AT RS.42,27,234/-. WHILE ALLOWAB LE DEPRECIATION IS RS.38,28,187/-, THE ASSESSEE ADDED RS.25,63 ,664/- AND CLAIMED RS.42,47,234/-. THE DIFFERENCE IN DEPRECIATION CLAIME D AND ALLOWABLE WAS ON ACCOUNT OF INCORRECT CALCULATION OF DEP RECIATION OF ASSETS RETURNED IN SUBSEQUENT YEARS. HE SUBMITTED THAT THE AO DISALLOWED THE DEPRECIATION ON THE GROUND THAT THE ASSES SEE DID NOT PRODUCE VOUCHERS AND BOOKS OF ACCOUNT. HOWEVER, THE V OUCHERS WERE SEIZED BY THE DEPARTMENT. THE ASSESSEE BEFORE THE CIT (A) HAD PRODUCED THE LEDGER EXTRACTS FROM THE COMPUTERIZED BOO KS. FURTHER, THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED AND T HE ASSETS ARE APPEARING IN THE BOOKS OF ACCOUNT AND BALANCE SHEET. TH E HUGE INCOME OF RS.2,12,60,160/- PROVES THAT THE ASSETS SHOWN H AVE BEEN USED. SINCE THE LD.CIT(A) ON PROPER APPRECIATION OF FACTS HAS DELETED THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION, THE SAME IS IN ORDER. 54. AS REGARDS THE PROPOSAL OF THE AO IN THE REMAND RE PORT TO DISALLOW AN AMOUNT OF RS.17,,588/- WHICH IS DEBITED TO THE PR OFIT AND LOSS ACCOUNT THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS NOT ADJUDICATED THIS ISSUE. SIMILARLY HE HAS A LSO NOT ADJUDICATED THE ISSUE RELATING TO PROPOSAL OF THE AO TO D ISALLOW 20% OF EXPENSES OF RS.26,275/- PAID IN CASH IN VIOLATION OF PROVISIO NS OF SECTION 40A(3). HE SUBMITTED THAT THESE ISSUES WERE NOT THERE IN THE ORIGINAL PROCEEDINGS. THEREFORE, THE GROUND RAISED BY THE REVENUE NOW IS NOT CORRECT AND HAS TO BE DISMISSED. 30 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 55. AS REGARDS THE RESTRICTION OF DISALLOWANCE OF EXPENSES FROM 20% TO 5% IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE HA S DECLARED PROFIT OF RS.27,80,320/- ON A TOTAL TURNOVER OF RS.2,12,60,160/- WHIC H IS ABOUT 13.08% OF THE RECEIPTS. THEREFORE, THE EXPENSES C LAIMED BY THE ASSESSEE AT RS.5,54,472/- IS REASONABLE UNDER THE FACTS A ND CIRCUMSTANCES OF THE CASE. STILL THE LD.CIT(A) HAS RESTRICTE D THE DISALLOWANCE TO 5% OF SUCH EXPENSES FOR WHICH THE ASSESSE E IS NOT IN APPEAL. SINCE, THE DISALLOWANCE RESTRICTED BY THE CIT(A) IS REASONABLE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THEREFORE , THE GROUND RAISED BY THE REVENUE SHOULD BE DISMISSED. 56. AS REGARDS THE ORDER OF THE CIT(A) DELETING THE ADDIT ION OF UNPROVED SUNDRY CREDITORS FOR CAPITAL WORKS AT RS.6,24,11,4 84/- AND FOR GOODS AND EXPENSES AT RS.22,56,089/- APPEARING UNDER THE HEAD CURRENT LIABILITIES IS CONCERNED HE SUBMITTED THAT THE LD.C IT(A) AFTER CAREFULLY CONSIDERING THE DETAILS ALONG WITH THE LIST FILED BY T HE ASSESSEE BEFORE HIM HAS DELETED THE ADDITION HOLDING THAT THESE CREDITORS ARE NOT LOAN CREDITORS. HE HAS GIVEN A FINDING T HAT ASSESSEE HAS CARRIED OUT CIVIL CONSTRUCTION WORK IN HOTEL AND RENOV ATION OF THE SAME AND WAS LIABLE TO PAY HIS CREDITORS. THEREFORE, THE O RDER OF THE CIT(A) ON THIS ACCOUNT HAS TO BE UPHELD. 57. AS REGARDS THE DELETION OF RS.76,105/- BY THE CIT(A) ON ACCOUNT OF BANQUET BOOKING IS CONCERNED HE SUBMITTED THAT THE A O HAS DISALLOWED THE SAME FOR NON FURNISHING OF THE DETAILS. ALTHO UGH NOTHING WAS PRODUCED BEFORE THE AO, HOWEVER, THE DETAILS WERE PRODUCED BEFORE THE CIT(A). THE ASSESSEE IN SUBSEQUENT YEARS HAS SQUARED UP THE BILLS ISSUED BY TAKING THE SAME AS REVENU E IN NATURE. 31 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 THE CIT(A) ON PROPER APPRECIATION OF FACTS HAS DELETED TH E ADDITION. THEREFORE, NO ADVERSE VIEW SHOULD BE TAKEN. 58. AS REGARDS THE DELETION OF UNSECURED LOAN OF RS.41,14,1 73/- IS CONCERNED HE SUBMITTED THAT THE CIT(A) AFTER EXAMINATION OF LEDGER EXTRACTS FOUND THAT THESE BALANCES ARE APPEARING IN THE LENDERS ACCOUNT. THE LENDER MR. AMIT D. SINGH IS ASSESSED TO TAX AND THE SAME IS REFLECTED IN HIS BALANCE SHEET. THEREFORE, THE LD.CI T(A) WAS FULLY JUSTIFIED IN DELETING THE UNSECURED LOAN. 59. SO FAR AS THE VARIOUS OTHER DELETIONS ARE CONCERNED THE LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF T HE CIT(A). HE SUBMITTED THAT THERE IS NO VIOLATION OF RULE 46A SINCE THE CIT(A) HAS PASSED THE ORDER AFTER OBTAINING REMAND REPORT FROM THE AO. FURTHER, THERE IS NO VIOLATION OF PROVISIONS OF SECTION 249(4)(A) SINCE TH E CIT(A) AFTER CONSIDERING THE DIRECTION OF THE TRIBUNAL HAS PASSED T HE ORDER. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE ING IN ACCORDANCE WITH LAW AND JUST PROPER SHOULD BE UPHELD AN D THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 60. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IN THE INSTANT CASE THE A SSESSEE ADMITTEDLY DID NOT FILE THE RETURN OF INCOME IN RESPONSE T O NOTICE U/S.L53A NOR FURNISHED THE REQUISITE DETAILS AS ASKED FOR B Y THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO, T HEREFORE, HAD NO OTHER OPTION BUT TO COMPLETE THE ASSESSMENT EXPART E BY DETERMINING THE TAXABLE INCOME AT RS.8,01,01,596/- AS AGAIN ST THE RETURNED INCOME OF RS.27,80,325/-. IN THE ASSESSMENT ORD ER THE AO DISALLOWED THE DEPRECIATION FOR WANT OF DETAILS OF ADDITIONS T O FIXED 32 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ASSETS AND THEIR USE AND CALCULATION OF DEPRECIATION. SIMILA RLY HE DISALLOWED CERTAIN EXPENSES ON ESTIMATE BASIS. SIMILARLY HE HAS ALSO DISALLOWED CERTAIN EXPENSES FOR NON DEDUCTION OF TAX. THE AO ALSO MADE ADDITION ON ACCOUNT OF CURRENT LIABILITIES AND PROVISION S AND UNSECURED LOAN ACCEPTED DURING THE YEAR. WE FIND BEFORE THE CIT(A) THE ASSESSEE FILED CERTAIN DETAILS WHICH WERE FORWARDED BY THE CIT(A) TO THE AO FOR HIS COMMENTS. ALTHOUGH THE AO IN HIS REMAND R EPORT HAS REITERATED HIS EARLIER STAND WE FIND THE LD.CIT(A) BASED ON THE SUBMISSIONS MADE BY THE ASSESSEE HAS DELETED THE ENTIRE ADDITION. ALTHOUGH THE AO HAS DISALLOWED DEPRECIATION OF RS.25,63,664/- WE FIND FROM THE COPY OF THE PROFIT AND LOSS ACCOUNT FOR THE Y EAR ENDING 31-30-2005 AS AGAINST CLAIM OF DEPRECIATION OF RS.25,53,664 /- THE AO DISALLOWED DEPRECIATION OF RS.25,63,664/-. THE ASSESSEE IN ITS SUBMISSION HAS MENTIONED THAT DEPRECIATION HAS BEEN CLAIM ED IN REVISED RETURN AT RS.42,27,234/- WHEREAS ALLOWABLE DEPRECIA TION IS RS.38,28,187/-. IT APPEARS THAT THE LD. CIT(A) HAS NOT AP PLIED HIS MIND PROPERLY AND HAS GONE ON WHATEVER THE ASSESSEE HAS SUBMITTED BEFORE HIM. FURTHER, THE AO IN HIS REMAND REPORT HAS SUB MITTED THAT SUNDRY CREDITORS AS PER BALANCE SHEET ARE RS.64,67,653/- WHEREAS LIST SUBMITTED BEFORE HIM ARE RS.65,18,757/- AND THE RECONCILIAT ION WAS NOT DONE. VARIOUS VOLUMINOUS DETAILS FIELD BY THE ASSESSEE BEFORE THE CIT(A) WERE NOT PRODUCED BEFORE THE AO DURING ORIGINAL ASS ESSMENT PROCEEDINGS. IT IS THE SETTLED LAW THAT THE POWER OF THE AO IN REMAND PROCEEDINGS IS VERY LIMITED. SINCE VOLUMINOUS DETAILS WERE FIL ED BEFORE THE CIT(A) WHICH WERE NOT FILED BEFORE THE AO AND SINCE THE CIT(A) IN THE INSTANT CASE HAS ACCEPTED THE SUBMISSIONS OF THE A SSESSEE ON THE GROUND THAT THE AO HAS NOT POINTED OUT ANY ERROR IN T HE SUBMISSIONS FILED BY THE ASSESSEE AND HAS SIMPLY HELD THAT CREDITORS ARE GENUINE, THEREFORE THE SAME IN OUR OPINION IS NOT ACCEPTABLE IN AB SENCE OF 33 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 THOROUGH VERIFICATION. THEREFORE, WE IN THE INTEREST OF JUST ICE, DEEM IT PROPER TO RESTORE THE ENTIRE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THE ASSESSEE SHALL ALSO COOPERATE WITH THE AO FOR EARLY COMPLETION OF THE ASSESSMENT. THE AO SHALL GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE REVENUE ON ALL T HE ISSUES ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 61. SO FAR AS THE GROUND RELATING TO VIOLATION OF PROVISIONS OF SECTION 249(4)(A) OF THE ACT IS CONCERNED, WE FIND THE CIT(A) HAS GIVE N A FINDING THAT TAX AMOUNTING TO RS.16,38,140/- HAS BEEN RECOVERED ON 31-03- 2011. FURTHER, THE HOTEL OF THE ASSESSEE WAS AUCTIONED BY STATE BANK OF INDIA AND THE REVENUE HAS DIRECTLY RECOVERED AN AMO UNT OF RS.7,32,31,995/- WHICH HAS TO BE ADJUSTED AS AGAINST THE ADMITTED TAX OF THE GROUP CONCERN. SINCE THE CIT(A) HAS GIVEN A FINDING THAT THE ADMITTED TAX OF THE ASSESSEE IS MEAGER AS AGAINST THE H UGE AMOUNT RECOVERED FROM THE ASSESSEE, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, THE GROUND RAISED BY THE REVENUE ON THIS ISSUE IS DISMISSED. 62. IN THE RESULT, THE APPEAL FILED BY THE REVENUE FOR A.Y. 2005-06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 490 TO 492/PN/2012 (BY REVENUE) (A.YRS. 20 06-07 TO 2008-09): ITA NOS. 389 TO 391/PN/2012 (BY ASSESSEE) (A.YRS. 2 006-07 TO 2008-09): 63. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE CO MPANY HAD FILED ITS RETURN U/S.139 ON 30-11-2006 SHOWING TOTAL LOSS O F RS.2,90,48,204/- FROM BUSINESS. AFTER THE SEARCH TOOK PLAC E IN THE GROUP OF CASES ON 28-06-2007, NOTICE U/S.153A WAS ISSUED AND SERVED 34 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ON THE ASSESSEE ON 19-10-2007. HOWEVER, THE ASSESSEE DID NOT FILE AN Y RETURN IN RESPONSE TO SUCH NOTICE AND SOUGHT MORE TIME FOR FILING THE RETURN. DESPITE REMINDER WAS ISSUED TO THE ASSESSEE CO MPANY, IT DID NOT FILE ANY RETURN AND REQUESTED FOR FURTHER TIME FOR FILING THE RETURN. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S.142(1) ALONG WITH A QUESTIONNAIRE CALLING FOR RETURN OF INCOME AND CERTAIN SPECIFI C INFORMATIONS. FINALLY THE ASSESSEE FILED THE RETURN OF INCOME ON 24-12- 2009 DECLARING TOTAL LOSS OF RS.2,92,16,268/-. HOWEVER, NO A UDIT REPORT EITHER UNDER COMPANIES ACT OR THE INCOME TAX A CT WAS FURNISHED. DESPITE SERVICE OF NOTICES U/S.142(1) AND 143(2) N ONE APPEARED BEFORE THE AO FOR WHICH HE PASSED AN EXPARTE ORDER U/S.144 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 64. THE AO NOTED THAT THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME CONT AIN CERTAIN INFORMATION. HE OBSERVED THAT AS AGAINST INCOME OF RS.11,65 ,00,527/- THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS.10,59,19,626/- AND PROFIT HAS BEEN ARRIVED AT RS.96,89,900/-. HE OBSERVED THAT V ARIOUS EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT SUCH AS O PERATING EXPENSES AT RS.6,49,37,370/-, ADMINISTRATION AND GENERAL EXP ENSES OF RS.2,73,07,120/-, DEPRECIATION OF RS.1,09,08,623/- AND INTEREST AND FINANCE CHARGES OF RS.1,85,37,178/- ARE NOT VERIFIABLE. SINCE T HE ASSESSEE COMPANY WAS IN THE HABIT OF INTRODUCING UNPROVED UNSEC URED LOANS AND NOT DEDUCTING THE TAX AT SOURCE FROM THE PAY MENT WHEREVER REQUIRED AND NOT FILING THE AUDIT REPORT AND CONSIDERING V ARIOUS OTHER IRREGULARITIES, THE AO DISALLOWED AN AMOUNT OF RS.2,41,76,058/- BEING 20% OF SUCH EXPENSES. THE AO FURTHER NOTED THAT ASSES SEE IN ITS BALANCE SHEET HAS SHOWN PROVISIONS ALONG WITH CURRENT LIAB ILITIES AT RS.8,44,97,902/-. IN ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE 35 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 THE AO TREATED THE SAME AS INCOME FROM UNDISCLOSED SOUR CES AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. HE ALSO ADDED THE FRESH UNSECURED LOAN INTRODUCED DURING THE YEAR AT RS.1,4 6,65,119/- IN ABSENCE OF DETAILS OF THE LENDERS AND THEIR CREDIT WORTH INESS. THE AO FURTHER ADDED DEFERRED TAX LIABILITY SHOWN IN THE BALANCE SHEET AT RS.12,93,941/-. HE FURTHER NOTED THAT IN THE RETURN OTH ER INFORMATION INCLUDES THE AMOUNT INADMISSIBLE U/S.40A(2) AT RS.4,51,71,991/- AND AMOUNT INADMISSIBLE U/S.40A(3) R.W. RULE 6DD AT RS.4,45,297/- A ND AMOUNT NOT ALLOWABLE U/S.43B AT RS.6,91,794/-. IN VIEW OF T HE ABOVE, THE AO ADDED THE ABOVE AMOUNT TO THE TOTAL INCOME OF T HE ASSESSEE. IN SUM AND SUBSTANCE THE AO DETERMINED THE ASSESSED INCOME AT RS.14,17,31,834/-. 65. SO FAR AS A.Y. 2007-08 IS CONCERNED NO RETURN OF INCO ME WAS FILED BY THE ASSESSEE U/S.139. IN RESPONSE TO NOTICE U/S .153A ALSO NO RETURN WAS FILED. DESPITE SERVICE OF STATUTORY NOTICES THE ASSESSEE DID NOT APPEAR BEFORE THE AO. UNDER THESE CIRCUMSTANCES TH E AO PROCEEDED TO COMPLETE THE ASSESSMENT U/S.144 OF THE I. T. ACT. THE AO NOTED THAT DURING THE SEARCH AT THE OFFICE OF HARIA TRAV ELS PVT. LTD., BOMBAY, MANAGED AND CONTROLLED BY DIRECTORS OF THE ASSES SEE COMPANY A DOCUMENT MARKED SL.NO.38 WAS SEIZED. IN THE S AID DOCUMENT PAGES 13 AND 14 CONTAIN THE VALUE OF THE 3 HO TEL BUILDINGS OWNED BY THE ASSESSEE COMPANY, I.E. (1) THE HOTEL WEST END , NASHIK, (2) HOTEL INDRAPRASTHA, NASHIK AND (3) HOTEL THE BEACH, GOA. THE INVESTMENTS IN THE ABOVE 3 PROJECTS SHOWN BY THE ASSE SSEE IS ABOUT RS.61.39 CRORES. HOWEVER, THE SEIZED MATERIALS CONTAIN NOT INGS MADE ON 05-03-2007 WHICH SHOW THAT THE TOTAL VALUE OF LAND, BU ILDINGS AND CARS OF THE ABOVEMENTIONED 3 HOTEL PROJECTS AT ABOUT 1 73 CRORES OUT OF WHICH TERM LOAN IS OF RS.32.30 CRORES. ACCORDING TO THE AO THE 36 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ASSESSEE IS THEREFORE REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.140.70 CRORES, I.E. RS.173 CRORES (-) RS.32.30 CRORES. THE ASSESSEE COMPANY HAD NOT MADE ANY ATTEMPT TO EXPLAIN THE SOURC E OF INVESTMENT IN THE ABOVE MENTIONED 3 PROJECTS. THEREFORE , ACCORDING TO THE AO EXCEPT THE TERM LOAN OF RS.32.30 CRORES BALANCE IN VESTMENT OF RS.140.70 CRORES AFTER CONSIDERING THE INVESTMENT SHOWN AT RS.61.30 UPTO 31-03-2006 HAS TO BE TREATED AS INCOME FROM UNDIS CLOSED SOURCES. THE AO ACCORDINGLY MADE ADDITION OF RS.79.31 CR ORES TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2007-08. 66. SO FAR AS A.Y. 2008-09 IS CONCERNED THE ASSESSEE C OMPANY HAD NOT FILED RETURN OF INCOME U/S.139. DESPITE SERVICE OF NO TICE U/S.142(1) THERE WAS NO RESPONSE FROM THE ASSESSEE. THE REFORE, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT U/S.144 OF THE I.T. ACT. THE AO NOTED THAT DURING THE COURSE OF SURVEY U/S.133A AT THE OFFICE PREMISES OF THE COMPANY , NEW DELHI BRANCH LOOSE PAPER B UNDLE MARKED 8 HAS BEEN IMPOUNDED. AS PER PAGE 94 OF THE LO OSE PAPER BUNDLE THE COMPANY HAS MADE CASH PAYMENT OF RS.1,40,000/ - ON 23- 05-2007 AND RS.26,750/- ON 28-05-2007 TO KAFIA TOUR AND TRAVELS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. SINCE THERE WAS NO EXPLANATION FROM THE SIDE OF THE ASSES SEE THE AO DETERMINED THE INCOME FROM HOTEL BUSINESS OF THE ASSESSE E AT RS.1 CRORES AND MADE ADDITION OF THE ABOVE 2 CASH PAYMENTS AMOUNTING TO RS.1,66,750/-. THUS, THE AO DETERMINED THE TOTAL INCOME A T RS.1,01,66,750/-. 67. BEFORE CIT(A) THE ASSESSEE CHALLENGED THE VARIOUS ADD ITIONS MADE BY THE AO. IT WAS ARGUED THAT WITHOUT REJECTING THE BOOK RESULTS U/S.145 OF THE I.T. ACT THE AO SHOULD NOT HAVE MADE S UCH HUGE ADDITIONS. THE ASSESSEE FILED VARIOUS DETAILS SUCH AS CURREN T LIABILITIES 37 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 AND PROVISIONS APPEARING IN THE BALANCE SHEET, UNSECURED LOANS, DEFERRED TAX LIABILITIES ETC. THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSIDERING THE REMAND REPORT OF THE AO AND REJOINDER OF THE ASSESSEE TO SUCH REMAND REPORT, THE C IT(A) IN A CONSOLIDATED ORDER FOR A.YRS. 2006-07 TO 2008-09 ESTIMATE D THE GROSS BUSINESS RECEIPTS AND DIRECTED THE AO TO ADOPT NET PRO FIT BEFORE DEPRECIATION AT 33.13%. THE RELEVANT OBSERVATION OF THE C IT(A) FROM PARA 9.2 ONWARDS OF HIS ORDER READS AS UNDER : 9.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ASSESSMENT ORDER AND THE RIVAL SUBMISSIONS. ON PERUSAL OF THE SAME, IT HAS BEEN NOTICED THAT THERE IS A MERIT IN THE CONTENTIONS RAI SED BY THE APPELLANT, HOWEVER, THE SAME CANNOT BE FULLY ACCEPTED IN THE AB SENCE OF BOOKS OF ACCOUNT AND OTHER RECORDS. THE INCOME OF THE APPELLA NT FOR THE YEAR UNDER APPEAL, I.E. A.Y. 2008-09 IS TO BE REASONABLY ESTIMATE D AFTER CONSIDERING THE PROFIT OF THE HOTEL INDUSTRY. 10. IN THE WRITTEN SUBMISSION FILED VIDE LETTER DATED 21/12/2011, THE APPELLANT HAS FAIRLY AGREED THAT THE COMPUTERIZED AC COUNTS AND RECORD SUPPORTING FINAL STATEMENTS OF ACCOUNT FOR AYRS. 2006-0 7. 2007-08 AND 2008-09 ARE NOT AVAILABLE WITH IT. THE RELEVANT POR TION OF THE SUBMISSION OF THE APPELLANT IS REPRODUCED BELOW: 'IN RESPECT OF THE ABOVE THREE YEARS, YOUR APPELLANT IS NOT HAVING ANY BOOKS OF ACCOUNTS AND OTHER RECORDS, PARTICULARLY AS TH E DATA IN COMPUTER FOR T HESE YEARS HAS BEEN CORRUPTED. IT IS ALSO WORTH NOTING H ERE THAT IN THESE 3 YEARS THE TURNOVER OF YOUR APPELLANT HAS INCRE ASED MORE THAN 5 TIMES COMPARED TO EARLIER YEARS AS THE FLAGSHIP HOTEL A T GOA BEACH HAS COMMENCED AND WAS IN OPERATION DURING THESE YEARS. THE STAFF OF THE APPELLANT COMPANY COULD NOT COPE UP WITH THE INCREA SED WORK AND TURNOVER OF THESE YEARS. HOWEVER, THE FINAL STATEMENT S OF ACCOUNTS ARE AVAILABLE IN RESPECT OF THE ABOVE MENTIONED 3 YEARS A S PER WHICH THERE IS SUBSTANTIAL LOSS. FURTHER THE ACTUAL LOSS IS MUCH MORE DUE TO DEPRECIATION AS PER INCOME-TAX ACT IS MORE THAN THE DEPRECIATION C LAIMED IN THE FINAL STATEMENTS AS PER PROVISIONS OF COMPANIES ACT. THE DETAI LS OF THE SAME ARE AS UNDER: A.Y. INCOME RETURNED PROFIT AS PER FINAL STATEMENT OF ACCOUNTS DEPRECIATION AS PER COMPANIES ACT DEPRECIATION AS PER I.T. ACT LOSS AFTER CONSIDERING DEPRECIATION AS PER I.T. ACT 2006 - 07 - 2,92,16,268 - - 4,52,76,835 - 2,92,16,268 2007 - 08 NO RETURN FILED - 1,65,43,363 1,71,73,518 4,93,06,496 - 4,86,76,341 2008 - 09 NO RETURN FILED - 2,01,52,995 1,70,45,342 4,42,29,881 - 4,73,37,534 38 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 THE AO. HAS, HOWEVER, ASSESSED THE INCOME OF THE APPELLA NT BY MAKING VARIOUS ADDITIONS AS UNDER, WHICH IS MORE THAN THE GROSS BUSINESS RECEIPTS OF THE APPELLANT AND IN AY. 2007-08, THE AD DITION IS MORE THAN THE TOTAL TURNOVER OF THE APPELLANT COMPANY DURING A.YRS. 2002-03 TO 2007- 08. AY. GROSS BUSINESS INCOME ASSESSED INCOME RETURNED / INCOME RECEIPTS AS PER FINAL STATEMENTS AS PER I.T. ACT. 2006-07 11,65,00,527 14,17,31,834 -2,92,16,268 2007-08 17,86,10,211 79,31,00,000 -4,86,76,341 2008-09 12,50,57,260 1,01,66,750 -4,73,37,534 TOTAL 42,01,67,998 94,49,98,584 -12,52,30,143 FROM THE ABOVE FACTS AND FIGURES, IT IS EVIDENT THAT T HE AO. HAS MADE HUGE ADDITIONS AND ASSESSED THE INCOME OF THE ABOVE MENTIONED 3 YEARS AT RS.94.50 CRORES AS AGAINST LOSS AS PER FINAL STATE MENTS OF ACCOUNTS RS.(-) 12.52 CRORES AS AGAINST TURNOVER OF RS. 4 2.02 CRORES. IN VIEW OF THE ABOVE FACTS AND IN THE ABSENCE OF BOOK S OF ACCOUNT AND OTHER RECORDS, THE PROVISIONS OF SECTION 145 ARE AP PLICABLE IN THE CASE OF THE APPELLANT. IT IS PERTINENT TO NOTE HERE THAT THE APPELLANT HAS TAKEN SUBSTANTIAL LOANS FROM STATE BANK OF INDIA AND OTHER F INANCIAL INSTITUTIONS AND HAS INCURRED HUGE EXPENDITURE TOWARDS BANK INTERE ST AND ALSO DEPRECIATION, WHICH RESULTED INTO SUBSTANTIAL LOSS. IN V IEW OF THE ABOVE FACTS, THE PROFIT MAY BE ESTIMATED AT SOME REASONABLE P ERCENTAGE, BEFORE DEPRECIATION AND THE NET LOSS APPEARING IN THE ABOVE CHART IN THE LAST COLUMN. IT IS WORTH NOTING HERE THAT DUE TO SUBSTANTIAL LOSSES, T HE APPELLANT COULD NOT REPAY LOAN TO STATE BANK OF INDIA AND HEN CE IN THE SUBSEQUENT YEAR THE STATE BANK OF INDIA HAS AUCTIONED THE FLAG SHIP HOTEL OF THE APPELLANT AT GOA. THIS FACT PROVED THAT THE APPELLAN T COMPANY HAS NEVER EARNED THE UNDISCLOSED INCOME AS ALLEGED BY THE A.O. 10.1 IN PARA 3 OF THE REMAND REPORTS OF A.YRS. 2006-0 7, 2007-08 AND 2008-09 THE A.O. HAS STATED AS UNDER : 3. THE ASSESSMENTS IN THIS GROUP OF CASES WERE COMPLETED U /S.144 R.W.S. 153A OF THE I.T. ACT, 1961 ON 31/12/2009. TH E ASSESSEE HAS ALL THE TIME SHOWN UN-COOPERATIVE ATTITUDE AND HAD NOT BEEN ATTENDING AND COMPLYING TO THE NOTICES. INCOME ASSESSMENT YEAR RETURN S WERE NOT FILED IN RESPONSE TO NOTICES U/S.153A. COPIES OF AUDITED ACCO UNTS WITH SCHEDULES, ANNEXURES THERETO WERE NOT FILED BY THE ASSESSE E. ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS WITH VOUCHERS. HENCE UN DER THESE CIRCUMSTANCES A.O. HAD NO ALTERNATIVE BUT TO COMPLETE ASSESSMENTS U/S.144 OF THE ACT BECAUSE THE UNCOOPERATIVE ATTITUDE OF THE ASSESSEE. THE ASSESSEE ALSO DID NOT ATTEND BEFORE THE CIT(A) WHERE VER CASE WAS FIXED FOR HEARING. THE CIT(A) ALSO DISMISSED APPEALS I N MANY CASES BECAUSE ASSESSEE HAD NOT PAID ADMITTED THE LIABILITY WHI LE FILING RETURN. HENCE THIS REPORT IS PREPARED ON THE BASIS OF PAPER B OOK FILED BY THE ASSESSEE AND WITHOUT ANY REFERENCE TO BOOKS OF ACCOUNT A ND VOUCHERS AS SAME HAVE NOT BEEN PRODUCED BY THE ASSESSEE.' 39 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 11. I HAVE CAREFULLY CONSIDERED THE ABOVE STATED FACTS OF THE CASE AND RIVAL CONTENTIONS AND ALSO FINDINGS GIVEN BY THE UNDERSIGNED IN THE PRECEDING PARAGRAPHS. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, I T IS EVIDENT THAT THE APPELLANT IS NOT IN A POSITION TO PRODUCE BOOKS OF ACCOUNT AND OTHER RELEVANT RECORD IN SUPPORT OF THE FINAL STATEMENTS OF ACCOUNTS IN RESPECT OF THE ABOVE MENTIONED 3 YEARS UNDER APPEAL. THE FIL ING OF FINAL STATEMENTS OF ACCOUNT DOES NOT ESTABLISH THAT THE LOSS STAT ED IN THE SAID STATEMENTS IS TRUE AND FAIR IN THE ABSENCE OF BOOKS OF A CCOUNT AND OTHER RECORDS. THE AO. IS, THEREFORE, JUSTIFIED IN NOT ACCEP TING THE INCOME AS PER FINAL STATEMENTS OF ACCOUNT FILED BY THE APPELLANT. H OWEVER, INCOME ASSESSED BY THE AO. SHOULD BE FAIR, REASONABLE AND HONEST ESTIMATE OF THE INCOME OF THE ASSESSEE. IT IS SETTLED LAW THAT THE BEST JU DGMENT ASSESSMENT SHOULD NOT BE MADE VINDICTIVELY OR CAPRICIOUSL Y OR WITH A VIEW TO PUNISH THE ASSESSEE FOR NON COMPLIANCE. IN BEST J UDGMENT ASSESSMENT THE AO. SHOULD MAKE FAIR ESTIMATE OF PROPER F IGURE OF ASSESSMENT AFTER TAKING INTO CONSIDERATION LOCAL KNOWLED GE AND COMPARATIVE CASES. THE ABOVE PROPOSITIONS OF LAW ORE SUP PORTED BY PLETHORA OF DECISIONS. IT HAS BEEN NOTICED THAT THE A. O. HAS ASSESSED THE INCOME OF THE APPELLANT FOR THE YEARS UNDER CONSIDERA TION AT HUGE AND UNJUSTIFIABLY HIGHER FIGURES. IT IS ALSO SETTLED LAW THA T THE HUGE ADDITION MADE BY THE A.O. CANNOT BE MADE WITHOUT REJECTING B OOK RESULTS BY APPLYING PROVISIONS OF SECTION 145 OF THE ACT. 11.1 IT HAS BEEN NOTICED THAT IN ALL THE YEARS UNDER APPE AL, THE APPELLANT IS NOT IN A POSITION TO PRODUCE BOOKS OF ACCOUNT AND SUPP ORTING RECORD TO PROVE THAT THE LOSSES SHOWN IN THE FINAL STATEMENTS OF AC COUNT ARE CORRECT. IT HAS ALSO BEEN NOTICED THAT THE AO. ASSESSED THE INCOM E OF THE APPELLANT FOR THE YEARS UNDER APPEAL AT RS. 94.50 CRORES AS AGAI NST GROSS BUSINESS RECEIPTS OF THE APPELLANT RS. 42.02 CRORES AND AS AGAIN ST LOSSES OF RS. 12.52 CRORES CLAIMED BY THE APPELLANT AS PER FINAL STA TEMENTS OF ACCOUNTS AND AFTER CONSIDERING DEPRECIATION AS PER INCOME-TAX ACT. IT IS ALSO A FACT THAT THE APPELLANT HAS NOT FILED RETURNS OF INCOME FO R AYRS. 2007-08 AND 2008-09. IN VIEW OF THE ABOVE FACTS, I AM OF THE CON SIDERED VIEW THAT THE INCOME OF THE APPELLANT IS TO BE REASONABLY ESTIMATED AFTER CONSIDERING THE TURNOVER OF THE APPELLANT. THE APPELLANT HAS FIL ED FINAL STATEMENTS OF ACCOUNTS FOR THE YEARS UNDER APPEAL, SOME OF WHICH AR E CERTIFIED TO BE TRUE AND FAIR BY AUDITORS. THE TURNOVER OF THE APPEL LANT FOR THE YEARS UNDER APPEAL IS RS.11,65,00,527/-, RS.17,86,10,211/- AND RS.12,50,57,260/- FOR AYRS. 2006-07, 2007-08 AND 2008 -09 RESPECTIVELY, AS PER THE SAID FINAL STATEMENTS OF ACCOUNT. THE APPELL ANT HAS ALSO CLAIMED DEPRECIATION AS PER INCOME-TAX ACT AT RS. 4,52,76,835 /-, RS. 4,93,06,496/- AND RS.4,42,29,881/- FOR A.YRS. 2006-07, 2007-08 AND 2008-09 RESPECTIVELY. THE DETAILS OF THE SAID DEPRECIATION WO RKING HAS BEEN FILED ON RECORD. 11.2 I HAVE ALSO PERUSED PROFIT PERCENTAGE OF HOTEL B USINESS BEFORE DEPRECIATION, WHICH RANGES BETWEEN 15% TO 33 1/3% CO NSIDERING THE TOTALITY OF THE TACT S AND TO MEET THE ENDS OF JUSTICE , I ESTIMATE THE PROFIT BEFORE DEPRECIATION OF THE BUSINESS OF THE APPELLANT A T 33 1/3%. I ALSO ESTIMATE THE TURNOVER OF THE APPELLANT AT RS.12 CROR ES, RS. 18.50 CRORES AND RS. 14 CRORES AS AGAINST DECLARED BY THE APPELLANT AT 11,65,00,527/-, RS.17,86,10,211/- AND RS.12,50,57,260/- FOR A.YRS. 20 06-07, 2007-08 AND 2008-09 RESPECTIVELY. THE INCOME OF THE APPELLAN T FOR THE YEARS UNDER APPEAL IS WORKED OUT AS UNDER: 40 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 A.Y. GROSS BUSINESS RECEIPTS NET PROFIT BEFORE DEPRECIATION 33 1/3% DEPRECIATION AS CLAIMED NET INCOME OF THE CURRENT YEAR 2006 - 07 12,00,00,000 4,00,00,000 4,52,76,835 - 52,76,835 2007 - 08 18,50,00,000 6,16,66,667 4,93,06,496 1,23,60,171 2008 - 09 14,00,00,000 4,66,66,667 4,42,29,881 24,36,786 IN VIEW OF THE DEPRECIATION LOSS OF A.Y. 2006-07 RS. 5 2,76,835/-, THE INCOME OF A.Y. 2007-08 IS TO BE ASSESSED AT RS.70,83,336/ - (RS. 1,23,60,171 - RS.52,76,835). THE A.O. IS DIRECTED ACCORDINGLY TO ASSESS THE INCOME OF THE APPELLANT FOR A.Y. 2006-07 AT (-) RS. 52,76,835/-, FOR A.Y. 2007-08 AT RS.70,83,336/- AND FOR A.Y. 2008-09 AT RS . 24,36,786/- AS AGAINST ASSESSED BY THE A.O. AT RS. 14,17,31,834/-, RS. 7 9,31,00,000/- AND RS. 1,01,66,750/- RESPECTIVELY. THE APPELLANT GETS RESU LTANT RELIEF. 68. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : GROUNDS BY REVENUE IN A.Y. 2006-07 : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS 2, 41,76,058/- MADE ON ADHOC BASIS BY INVOKING PROVISIONS OF SECTION 145 TO ESTI MATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND PRODU CE BOOKS OF ACCOUNT. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS 8,44 ,97,902/- REPRESENTING CURRENT LIABILITIES AND PROVISIONS BY INVOKING PROVISIO NS OF SECTION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FU RNISH DETAILS AND PRODUCE BOOKS OF ACCOUNT. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF UNPROVE D UNSECURED LOANS OF RS 1,46,65,119/ - BY INVOKING PROVISIONS OF SECTION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND PRODUCE BOOKS OF ACCOUNT. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS 12,93 ,941/- MADE UNDER SECTION 438 OF THE ACT REPRESENTING DEFERRED TAX LIAB ILITY BY INVOKING PROVISIONS OF SECTION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND PROVE THE PAYMENT TO TA X LIABILITY. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS 4,51,77,9 91/ - MADE UNDER SECTION 40A(IA) OF THE ACT REPRESENTING LIABILITY ON ACCOUNT OF TAX DEDUCTED AT SOURCE BY INVOKING PROVISIONS OF SECTION 145 TO ESTIM ATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND PROVE THE PAYMENT TO TAX LIABILITY. 41 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS 4,45,297/ - M ADE UNDER SECTION 40A(3) OF THE ACT BY INVOKING PROVISION OF SECTION 1 45 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS. 7. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS 6,91,794/ - M ADE UNDER SECTION 438 BY INVOKING PROVISIONS OF SECTION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND PROVE THE PAYMENT TO TAX LIABILITY. 8. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT PRODUC ED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE TH E ASSESSING OFFICER OR BEFORE THE CIT(A) WHICH MAKES THE ORDER OF THE LD .CIT(A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPREC IATING THE EVIDENCE ON RECORD. 9. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE H IM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHIC H IS IN CLEAR VIOLATION OF PROVISIONS OF RULE 46A OF INCOME TAX RUL ES. 10. THE ORDER OF THE LD.CIT(A)-I, NASHIK MAY BE VACA TED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 11. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. GROUNDS BY REVENUE IN A.Y. 2007-08 : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS 79 .31 CRORE REPRESENTING UNEXPLAINED INVESTMENT MADE IN THREE UNI TS OF HOTEL BY THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND THE A DDITION WAS MADE ON THE BASIS OF DOCUMENTS SEIZED DURING COURSE OF SEARCH . 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT PRODUC ED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE TH E ASSESSING OFFICER OR BEFORE THE CIT (A) WHICH MAKES THE ORDER OF THE L D CIT(A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPREC IATING THE EVIDENCE ON RECORD. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE HIM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHICH IS IN CLE AR VIOLATION OF PROVISIONS OF RULE 46A OF INCOME TAX RULES. 4. THE ORDER OF THE LEARNED CIT (A)-I, NASHIK MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 42 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 GROUNDS BY REVENUE IN A.Y. 2008-09 : L. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS 1,66 ,750/ - REPRESENTING UNEXPLAINED EXPENDITURE, BY INVOKING PROVISIONS OF SEC TION 145 TO ESTIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FU RNISH DETAILS AND THE ADDITION WAS MADE ON THE BASIS DOCUMENTS SEIZED DUR ING THE COURSE OF SEARCH. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS 1 CRORE REPR ESENTING UNEXPLAINED EXPENDITURE BY INVOKING PROVISIONS OF SECTION 145 TO E STIMATE THE INCOME, WHEN THE ASSESSEE HAD FAILED TO FURNISH DETAILS AND THE B OOKS OF ACCOUNTS. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT PRODUC ED BOOKS OF ACCOUNTS AND OTHER PRIMARY EVIDENCE EITHER BEFORE TH E ASSESSING OFFICER OR BEFORE THE CIT (A) WHICH MAKES THE ORDER OF LD CI T (A) PERVERSE ON FACTS AND IN LAW SINCE THE FINDINGS ARE WITHOUT APPRECIATIN G THE EVIDENCE ON RECORD. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ADMITTING NEW EVIDENCE BEFORE HIM WHICH WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHICH IS IN CLE AR VIOLATION OF PROVISIONS OF RULE 46A OF INCOME TAX RULES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) HAS ERRED IN ADMITTING THE APPEAL OF THE ASSESSEE EVEN THOU GH THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 249(4)(B) OF THE AC T IN AS MUCH AS HE DID NOT PAY TAX AMOUNT EQUAL TO THE AMOUNT OF ADVANCE T AX WHICH WAS PAYABLE BY HIM, AS PER PROVISIONS OF THIS SECTION. 6. THE ORDER OF THE LEARNED CIT (A)-I, NASHIK MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. GROUNDS BY ASSESSEE IN A.Y. 2006-07 : 1. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER WITHOUT CONSIDERING THE FACT THAT THE APPELLANT COMPANY HAS SUFFERED CASH LOSS AS THE NEW HOTEL AT GOA WAS RECENTLY STARTED. 2. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER WHICH IS THE HIGHER END OF THE COMPARATIVE PROFITABILITY BAND OF 15% - 33 1/3% WIT HOUT CONSIDERING THE FACT THAT THE HOTEL BUSINESS WAS AT THE NASCENT STAGE REQ UIRING ESTIMATION OF PROFIT AT BEFORE DEPRECIATION 15% I.E. THE LOWER END OF THE PROFITABILITY BAND. YOUR APPELLANT CRAVES LEAVE TO ADD ALTER, DELETE OF ABOVE OR ANY OTHER GROUNDS OF APPEAL. 43 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 GROUNDS BY ASSESSEE IN A.Y. 2007-08 : 1. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER RESULTING INTO INCOME AT RS.1,23,60,171/- WITHOUT CONSIDERING THE FACT THAT TH E APPELLANT COMPANY SUFFERED LOSS. 2. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER WHICH IS THE HIGHER END OF THE COMPARATIVE PROFITABILITY BAND OF 15% - 33 1/3% WIT HOUT CONSIDERING THE FACT THAT THE HOTEL BUSINESS WAS AT THE NASCENT STAGE REQ UIRING ESTIMATION OF PROFIT AT BEFORE DEPRECIATION 15% I.E. THE LOWER END OF THE PROFITABILITY BAND. YOUR APPELLANT CRAVES LEAVE TO ADD ALTER, DELETE OF ABOVE OR ANY OTHER GROUNDS OF APPEAL. GROUNDS BY ASSESSEE IN A.Y. 2008-09 : 1. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER RESULTING INTO INCOME AT RS.24,36,786/- WITHOUT CONSIDERING THE FACT THAT THE APPELLANT COMPANY SUFFERED CASH LOSS. 2. ON THE FACTS AND IN LAW THE CIT (APPEALS) ERRED I N ESTIMATING INCOME BEFORE DEPRECIATION AT 33 1/3% OF TURNOVER WHICH IS THE HIGHER END OF THE COMPARATIVE PROFITABILITY BAND OF 15% - 33 1/3% WIT HOUT CONSIDERING THE FACT THAT THE HOTEL BUSINESS WAS AT THE NASCENT STAGE REQ UIRING ESTIMATION OF PROFIT AT BEFORE DEPRECIATION 15% I.E. THE LOWER END OF THE PROFITABILITY BAND. YOUR APPELLANT CRAVES LEAVE TO ADD ALTER, DELETE OF ABOVE OR ANY OTHER GROUNDS OF APPEAL. 69. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IN THE INSTANT CASE UNDISP UTEDLY, THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR THE ABOVE 3 ASSESSMENT YEARS. DESPITE OPPORTUNITIES GIVEN BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS THERE WAS NO COMPLIANCE FOR WHICH THE AO HAD TO RESORT TO PROVISIONS OF SECTION 144 AND MADE HIG H PITCH ASSESSMENT. ALTHOUGH SPECIFIC ADDITIONS WERE MADE BY THE AO IN A.Y. 2006-07 WE FIND THE LD.CIT(A) OPTED TO REJECT THE BOOK R ESULTS AND GO 44 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 FOR ESTIMATION BY ESTIMATING THE TURNOVER OF THE ASSESSEE COMPANY FOR THE 3 YEARS AND ADOPT THE PROFIT RATE OF 33.13% BEFORE D EPRECIATION. THE REVENUE IS IN APPEAL BEFORE US FOR GIVING SUBSTANTIAL RE LIEF TO THE ASSESSEE WHEREAS THE ASSESSEE IS IN APPEAL BEFORE US FOR DETERMINATION OF PROFIT AT 33.13% OF THE ESTIMATED TURNOVER BEFORE DEPRECIATION. 70. IN OUR OPINION THE MATTER REQUIRES REVISIT TO THE FILE OF THE AO FOR FRESH ADJUDICATION. WHEN THE ASSESSEE HAD SHOWN HUGE AD DITIONS TO THE ASSETS OF THE COMPANY, SHOWN UNSECURED LOANS AND H UGE CURRENT LIABILITIES, THE ONUS IS ON THE ASSESSEE TO PROVE ALL THOSE T HINGS TO THE SATISFACTION OF THE AO. FURTHER THE VARIOUS EXPENSES TH AT HAVE BEEN CLAIMED ALSO NEED TO BE EXPLAINED BY THE ASSESSEE BY FURN ISHING CORROBORATIVE EVIDENCES SO THAT A REASONABLE VIEW CAN BE TAKEN. 71. SO FAR AS A.Y. 2007-08 IS CONCERNED IT IS AN ADMITTED FACT THAT A DOCUMENT WAS SEIZED FROM THE OFFICE OF HARIA TRAVELS PVT. LTD ., BOMBAY MANAGED AND CONTROLLED BY THE DIRECTORS OF THE ASSESSEE COMPANY. AS PER THE SAID DOCUMENT THE VALUE OF THE INVESTMENTS IN TH E 3 HOTEL PROPERTIES OWNED BY THE ASSESSEE HAS BEEN SHOWN AT RS.173 CROR ES OUT OF WHICH TERM LOAN IS RS.32.30 CRORES. AS AGAINST THE REMA INING BALANCE OF RS.140.70 CRORES THE ASSESSEE HAD SHOWN INVE STMENT OF RS.61.39 CRORESE UPTO 31-03-2006. THE ASSESSEE HAS NO T EXPLAINED THE SOURCE OF INVESTMENT OF THE SAME. THEREFORE, IN ABSE NCE OF ANY CLEAR CUT FINDING GIVEN BY THE CIT(A) ON THIS ISSUE HE COULD NOT HAVE JUMPED TO A CONCLUSION THAT PROFIT SHOULD BE ESTIMATED B Y ESTIMATING THE TURNOVER OF THE COMPANY. EVEN OTHERWISE ALSO INDEPE NDENT ADDITIONS CAN BE MADE IN CERTAIN CASES ON ACCOUNT OF UNP ROVED CREDITORS, ADDITION TO FIXED ASSETS, UNPROVED LOAN CREDITOR S ETC. EVEN AFTER ESTIMATING THE PROFIT OF THE ASSESSEE COMPANY. IT IS A FACT THAT NO RETURN OF INCOME WAS FILED AND THE INCOME FROM HOTEL BUSINES S HAS 45 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 BEEN ESTIMATED BY THE AO AT RS.1 CRORE. THE CIT(A) IN HIS ORDER HAS GIVEN A FIGURE OF RS.12,50,57,260/- AS THE GROSS BUSINESS RECEIPTS IN A.Y. 2008-09. IT IS NOT KNOWN FROM WHERE HE HAS OBTAINED THIS FIGURE. IN OUR OPINION AND IN VIEW OF OUR FINDINGS FOR A.YRS. 2002-03 TO 2005- 06 THE MATTER REQUIRES THOROUGH INVESTIGATION AT THE LE VEL OF THE AO. SIMILAR IS THE CASE FOR A.Y. 2008-09. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE TO BOTH SIDES, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO FOR ALL T HE 3 YEARS ABOVE WITH A DIRECTION TO DECIDE THE ISSUES AFRESH AFTER GIVING RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESS EE IS ALSO DIRECTED TO APPEAR BEFORE THE AO AND EXTEND FULL COOPERA TION IN EARLY COMPLETION OF THE ASSESSMENTS. WE HOLD AND DIRECT ACCORD INGLY. GROUNDS RAISED BY THE ASSESSEE AS WELL AS REVENUE FOR THE ABOVE 3 YEARS ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 72. IN A.Y. 2006-07, THE ASSESSEE HAS TAKEN AN ADDITION AL GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/ S.144 R.W.S.153A. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DID NOT PRESS THE ADDITIONAL GROUND. ACCORDINGL Y, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR A.Y. 2006-07 IS DISMISSED. 73. IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES AND ALL THE APPEALS FILED BY THE ASSES SEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 04-12-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 04 TH DECEMBER, 2015. LRH'K 46 ITA NOS.486 TO 489, 490 TO 492, 389 TO 391/PN/2012 ' (!* + / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT ( A ) - I, NASHIK 4. 5. 6. CIT-I, NASHIK ' *, *, IQ.KS / DR, ITAT, A PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE