Meenu Exim Pvt. Ltd., Surat V. The Income tax Officer,Ward-1(3), Surat

ITA 4052/AHD/2008

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4402 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 16-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS SRDR
• Keywords: Principle of natural justice
• Section: 143(3); 133A; 145; 11

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NO.4052/AHD/2008 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEAR : 2005-06) MEENU EXIM PVT.LTD. M-10/11, NIRMAN APARTMENT FARAM MOHALLO RUSTOMPURA SURAT 395 005 / VS. THE INCOME TAX OFFICER WARD-1(3) SURAT !* #./+, #./ PAN/GIR NO.: AACCM5561H ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : NONE (WRITTEN SUBMISSION) ./*- 1 0 / RESPONDENT BY : SHRI K.C.MATHEWS, SR.D.R. $'2 1 & / / / / DATE OF HEARING : 22/11/2013 34) 1 & / DATE OF PRONOUNCEMENT : 28/11/2013 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT (CIT(A) FOR SHORT) DATED 10/10/2008 PERTAINING TO ASSESSMENT YEAR (AY) 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED IN UPHOLDING THE ESTIMATED ADDITION OF RS.14, 86,695/- ALLEGING SUPPRESSION OF PROFIT, PURELY ON THE BASIS OF GUESS WORK AND ESTIMATION, WITHOUT ANY EVIDENCE WHATSOEVER AND ACC ORDINGLY, THE SAME BEING ERRONEOUS AND BAD-IN-LAW, NEEDS TO BE DE LETED. ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 2 - 2. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, SUBSTITU TE, AND MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL, IF NECESSAR Y, ON THE BASIS OF SUBMISSIONS TO BE MADE AT THE TIME OF PERSONAL HEAR ING. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER A LETTER DATED 19/11/2013 IS PLACED ON RECORD, WHEREBY THE ASSESSE E HAS MADE WRITTEN SUBMISSIONS AND REQUESTED THAT THE MATTER MAY BE DE CIDED ON THE BASIS OF PAPER-BOOK AND WRITTEN SUBMISSIONS DATED 26/12/2011 . 3. BRIEFLY STATED FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) R.W.S. 145(3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS TH E ACT) WAS FRAMED VIDE ORDER DATED 31/12/2007, THEREBY THE ASSESSING OFFICER(AO) INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT REJECTI NG THE BOOK RESULT OF THE ASSESSEE-COMPANY AND PROCEEDED TO DETERMINE THE INC OME PRESCRIBED U/S.144 OF THE ACT. THE AO ESTIMATED THE PROFIT @ 2% AMOUNTING TO RS.14,86,695/- AND SAME WAS ADDED TO THE TOTAL INCO ME OF THE ASSESSEE- COMPANY. THE AO ALSO MADE DISALLOWANCE OF RS.18,8 19/- U/S.40(A)(IA) OF THE ACT. AGAINST THIS, THE ASSESSEE FILED AN AP PEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL. THEREAFTER, THE ASSESSEE FILE D AN APPEAL BEFORE THE HONBLE TRIBUNAL AND THE SAME WAS DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 28/12/2011 FOR WANT OF PROSECUTION. SUBSEQ UENTLY, ASSESSEE FILED MISCELLANEOUS APPLICATION AND THE SAME WAS ALLOWED. 4. NONE APPEARED ON BEHALF OF ASSESSEE, BUT A LETTE R DATED 19/11/2013 IS PLACED ON RECORD BY THE AUTHORISED REPRESENTATIV E OF THE ASSESSEE REQUESTING THEREIN TO CONSIDER THE APPEAL ON THE BA SIS OF PAPER-BOOK AND ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 3 - THE WRITTEN SUBMISSIONS DATED 26/12/2011. IN THE PAPER-BOOK, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND COPIES O F JUDGEMENT(S) RENDERED IN THE CASE OF CHANDER MOHAN METHA VS. ACI T(INVESTIGATION) REPORTED AT (1999) 65 TTJ 327 (PUNE) :: 71 ITD 245 AND OF CIT VS. TIRATH SINGH PARKASH SINGH REPORTED AT (2008) 296 I TR 191 (P&H). THE WRITTEN SUBMISSIONS DATED 19/11/2013 & 26/12/2011 O F THE ASSESSEE ARE REPRODUCED AS UNDER:- WRITTEN SUBMISSIONS, DATED NOVEMBER 19, 2013 TO, THE DEPUTY REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, 3RD & 4TH FLOOR, ABHINAV ARCADE, NEAR MUNICIPAL SCHOOL, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD - 380006 SIR, MOST RESPECTFULLY SUBMITTED AS FOLLOWS: SUB.: WRITTEN SUBMISSIONS IN THE CASE OF MEENU EXIM PVT. LTD. APPEAL NO.ITA-4052/AHD-2008 BENCH-'D' DATE OF HEARING: 22-11-2013 A.Y. 2005-06 THE PERSONAL HEARING IN THE SUBJECT RECALL MATTER H AS BEEN FIXED UP BEFORE THE HON'BLE BENCH ON 22-11-2013 AND IN THIS REGARD, WE FOR AND ON BEHALF OF OUR AFORESAID CLIENT, MOST HUMBLY MAKE THE FOLLOWING SUBMISSIONS FOR THE KIND CONSIDERATION OF THE HON'BLE BENCH, AS PER THE INFORMATION, EXPLANATIONS AND INSTRUCTIONS, PROVIDED TO US. 1. THE PRESENT APPEAL IS PREFERRED AGAINST THE ORD ER U/S. 250 OF THE ACT DTD. 10-10-2008 AS PASSED BY THE LEARNED CIT(A)-I, SURAT IN RESPECT OF THE ORDER U/S. 143(3) OF THE ACT, DATED 31-12-2007, AS PASSED BY THE LEARNED INCOME TAX OFF ICER, WARD 1(3), SURAT. 2. THE YEAR UNDER CONSIDERATION IS A.Y. 2005-06. 3. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL I S THE ESTIMATED ADDITION OF RS.14,86,695/- ALLEGING SUPPRESSION OF PROFIT, PURELY ON GUESSWORK AND ESTIMATION WITHOUT ANY EVIDENCES WHATSOEVER. 4. THE HON'BLE BENCH MAY KINDLY NOTE THAT THE APP EAL OF THE APPELLANT HAS BEEN DISMISSED EX-PARTE VIDE ORDER DATED 28-12-2011 IN ITA NO. 405 2/AHD/2008 WITHOUT CONSIDERING THE PAPER BOOK AND WRITTEN SUBMISSIONS DATED 26-12-2011 FILED ON 27-12-2011 BY THE APPELLANT, IN PURSUANCE OF THE HEARING FIXED ON 28- 12-2011. ACCORDINGLY, THE APPELLANT HAD FILED MA (I.E. MISCE LLANEOUS APPLICATION) BEFORE THIS BENCH OF THE HON'BLE ITAT VIDE MA NO. 108/AHD/2012 AND THIS HON' BLE BENCH OF THE ITAT IS KIND ENOUGH TO RECALL THE SAID ORDER DATED 28-12-2011 BY ALLOWING THE MA OF THE APPELLANT VIDE ORDER DATED 20-09- 2013 AND THUS, FIXING UP THE PERSONAL HEARING ON 22 -11-2013. 5. IN VIEW OF THE AFORESAID FACTS, WE FOR AND ON BEHALF OF OUR AFORESAID CLIENT, MOST HUMBLY PRAY BEFORE THE HON'BLE BENCH TO KINDLY CONSIDER OU R PAPER BOOK AND THE WRITTEN ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 4 - SUBMISSIONS DATED 26-12-2011 FILED ON 27-12-2011 (P GS. NO. 1 TO 10), COPY WHEREOF IS ENCLOSED HEREWITH IN EXIHIBIT-1 FOR THE IMMEDIATE REFERENCE OF YOUR HONOURS. 6. PRAYER IN VIEW OF THE SUBMISSIONS MADE HEREIN ABOVE, WE FO R AND ON BEHALF OF OUR AFORESAID CLIENT, MOST HUMBLY PRAY BEFORE THE HON'BLE BENCH T HAT THE AFORESAID ADDITIONS AS MADE BY THE LEARNED ITO AND CONFIRMED BY THE LEARNED CIT(A) MAY KINDLY BE DELETED IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. WE HOPE THAT THE SUBMISSIONS AS MADE HEREIN ABOVE W OULD SUFFICE WITH THE REQUIREMENTS OF THE HON'BLE BENCH. FOR THE KIND ACT OF YOUR HONOURS IN ACCEPTING OUR S UBMISSIONS AND PRAYER AS MADE HEREIN ABOVE, WE SHALL EVER REMAIN GRATEFUL AND DUTY BOUND LY PRAY. THANKING YOU, TRULY YOURS, FOR DSI & CO., CHARTERED ACCOUNTANTS SD/= ADVOCATE VINOD K. CHAUHAN AUTHORISED REPRESENTATIVE ENCL.: AS ABOVE. WRITTEN SUBMISSIONS DECEMBER 26, 2011 TO, THE DEPUTY REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, 3RD & 4TH FLOOR, ABHINAV ARCADE, NEAR MUNICIPAL SCHOOL, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD - 380006. SIR, MOST RESPECTFULLY SUBMITTED AS FOLLOWS: SUB.: WRITTEN SUBMISSIONS IN THE CASE OF MEENU EXIM PVT. LTD. APPEAL NO. ITA-4052/AHD-2008 BENCH-'D' DATE OF HEARING: 28-12-2011 A.Y. 2005-06 ____________________ THE PERSONAL HEARING IN THE SUBJECT MATTER HAS BEEN FIXED UP BEFORE THE HON'BLE BENCH ON 28-12-2011 AND IN THIS REGARD, WE FOR AND ON BEHALF OF OUR AFORESAID CLIENT, MOST HUMBLY MAKE THE FOLLOWING SUBMISSIONS FOR THE KIND CONSIDE RATION OF THE HON'BLE BENCH, AS PER THE INFORMATION, EXPLANATIONS AND INSTRUCTIONS, PROVIDE D TO US. 1. THE PRESENT APPEAL IS PREFERRED AGAINST THE ORDE R U/S. 250 OF THE ACT DTD. 10-10-2008 AS PASSED BY THE LEARNED CIT(A)-I, SURAT IN RESPECT OF THE ORDER U/S. 143(3) OF THE ACT, DATED 31- 12-2007, AS PASSED BY THE LEARNED INCOME TAX OFFICE R, WARD 1(3), SURAT. 2. THE YEAR UNDER CONSIDERATION IS A.Y. 2005-06. ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 5 - 3. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL IS THE ESTIMATED ADDITION OF RS,14,86,695/- ALLEGING SUPPRESSION OF PROFIT, PURELY ON GUESSWORK AND ESTIMATION WITHOUT ANY EVIDENCES WHATSOEVER. 4. FACTS AND CONTENTIONS IN BRIEF: THE FACTS OF THE CASE AND THE CONTENTIONS RAISED TH EREOF ARE PUTS FORTH BY THE APPELLANT COMPANY BEFORE THE HON'BLE BENCH ALONG WITH RELEVAN T JUDICIAL PRONOUNCEMENTS. 4.1 THE APPELLANT IS A PRIVATE LIMITED COMPANY ENGAGED IN THE ACTIVITY OF TRADING AND MANUFACTURING OF TEXTILE CLOTH AND YARN. 4.2 APPELLANT COMPANY FILED ITS RETURN OF IN COME FOR THE A.Y. 2005-2006 DECLARING TOTAL INCOME OF RS. 2,74,144/- ON 29-10-2005. 4.3 THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED ON THE APPELLANT COMPANY. 4.4 THEREAFTER, THE ID. ITO HAD PASSED THE IMPU GNED ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT IN THE CASE OF THE APPELLANT COMPANY MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES. (A) ADDITION OF RS. 14,86,695/- ALLEGING SU PPRESSION OF PROFIT, PURELY ON THE BASIS OF GUESSWORK AND ESTIMATION, WITHOUT ANY EVID ENCE, WHATSOEVER, AND (B) DISALLOWANCE OF RS. 18,819/- U/S. 40(A)(IA ) OF THE ACT, HOWEVER, THE APPELLANT COMPANY HAS NOT PRESSED THE ABOVE GROUND (B) OF DISALLOWANCE OF RS. 18,819/- U/S. 40(A)(IA) OF THE ACT BEFORE THE ID. CIT(A). THUS, THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL BEFORE THE HON'BLE BENCH, IS THE ADDITION OF RS.14,86,695/- ALLEGING SUPPRESSION OF PROFIT, P URELY ON THE BASIS OF GUESSWORK AND ESTIMATION, WITHOUT ANY EVIDENCE, WHATSOEVER. 4.2 ON 14-03-2007 A SURVEY WAS CONDUCTED IN THE CASE OF GROUP CASES OF THE APPELLANT COMPANY, WHEREIN THE STATEMENT OF SHRI TARACHAND SH ARMA FATHER OF ONE OF THE DIRECTOR OF THE APPELLANT COMPANY WAS RECORDED U/S. 133A. IN TH IS STATEMENT IN REPLY TO QUESTION NO. 22, SHRI TARACHAND SHARMA HAD STATED THAT DUE TO FINANC IAL DIFFICULTIES HE HAD INDULGED HIMSELF IN ISSUING ACCOMMODATING BILLS TO CERTAIN PARTIES ON W HICH COMMISSION OF AROUND 0,50% TO 1 % WAS EARNED. 4.3 DURING THE COURSE OF ASSESSMENT PROCEEDING S VARIOUS DETAILS WERE CALLED FROM TIME TO TIME BY THE ID. ITO WHICH WERE FURNISHED BY THE APP ELLANT COMPANY FROM WHEREIN THE ID. ITO OBSERVED THAT CERTAIN SALE AND PURCHASE PARTIES ARE NOT AVAILABLE AT THE GIVEN ADDRESSES AND ACCORDINGLY, ESTIMATED THE COMMISSION INCOME @ 2% O N THESE SALES IN VIEW OF THE STATEMENT RECORDED DURING THE COURSE OF SURVEY. 4.4 IN THIS REGARD, THE APPELLANT COMPANY EXPLA INED THAT IT HAD EARNED A NET COMMISSION OF RS, 5,94,140/- @ 0.57% ON THESE SALES WHICH WAS DUL Y OFFERED IN THE REGULAR RETURN OF INCOME IN THE FORM OF PROFIT, AS AGAINST THE ADMITT ED PERCENTAGE OF 0.50% TO 1% IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY OF I TS GROUP CONCERNS AND HENCE NO ADDITION SHOULD BE MADE ON THIS COUNT. 4.5 HOWEVER, THE ID. ITO DID NOT ACCEPT THE EXP LANATIONS OF THE APPELLANT COMPANY AND ESTIMATED THE COMMISSION INCOME @ 2% ON THESE SALES AND AFTER DEDUCTING THE INCOME ALREADY SHOWN IN THE REGULAR RETURN, MADE A NET ADD ITION OF RS.14,86,695/- ALLEGING ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 6 - UNACCOUNTED COMMISSION INCOME, FOR WHICH THE APPELL ANT COMPANY IS IN APPEAL BEFORE THE HON'BLE BENCH. 5. BEING AGGRIEVED BY THE SAID ACTION OF THE ID. ITO AND THE HON'BLE CIT(A), THE APPELLANT COMPANY HAS PREFERRED THE SUBJECT APPEAL BEFORE THE HON'BLE BENCH RAISING THE FOLLOWING CONTENTIONS. 5.1 ADDITION OF RS. 14,86,695/- ALLEGING SUPPRESSION OF PROFIT; (I) THE APPELLANT COMPANY IS ENGAGED IN THE BUSINE SS OF TRADING AND MANUFACTURING OF TEXTILE CLOTH AND YARN. IN THE CASE OF THE ASSESSEE GROUP S URVEY WAS CONDUCTED ON 14-03-2007. DURING THE COURSE OF THE SAID SURVEY, THE FATHER OF ONE OF THE DIRECTOR OF THE - APPELLANT COMPANY COULD NOT PROVE THE DELIVERY OF CERTAIN GOO DS AND IN THE PROCESS IN HIS STATEMENT RECORDED U/S. 133A IN REPLY TO QUESTION NO. 22, SHR I TARACHAND SHARMA STATED THAT DUE TO FINANCIAL DIFFICULTIES HE HAD INDULGED HIMSELF IN I SSUING ACCOMMODATING BILLS TO CERTAIN PARTIES ON WHICH COMMISSION OF AROUND 0.50% TO 1 % WAS EARN ED. (II) NOW ON THE BASIS OF THE SAID STATE MENT, THE ID, ITO HAD ESTIMATED THE COMMISSION INCOME @ 2% ON THE ACCOMMODATING SALES. (III) IN THIS REGARD, THE APPELLANT COMPANY EXPLA INED THAT SINCE IT COULD NOT PROVE THE DELIVERY OF GOODS IN CASE OF SOME OF THE TRADING TRANSACTION S, IT HAD AGREED THAT IT HAS EARNED COMMISSION THEREON @ L% BY ISSUING ONLY BILLS AND T HE COMMISSION IN THE FORM OF PROFIT OF RS.5,94,140/- @ 0.57% ON SALE OF THESE GOODS WAS AL READY OFFERED IN THE REGULAR RETURN, AS AGAINST THE ADMITTED PERCENTAGE OF 0.50% TO 1% OF N ET COMMISSION INCOME DURING THE COURSE OF SURVEY. IN THIS REGARD, IT HAS BEEN CONTENDED THAT: - THE IMPUGNED SALES AND PURCHASES HAVE BEEN BOOK ED IN THE ACCOUNTS AND PROFIT OF RS. 5,94,140/- HAS BEEN SHOWN IN RESPECT OF THESE T RANSACTIONS, - THIS AMOUNT OF PROFIT OF RS. S,94,140/- IS THE NET COMMISSION EARNED @ 0.57% ON THESE TRANSACTIONS I.E. COMMISSION @ 1% HAS BEEN CH ARGED FROM THE PARTIES TO WHOM SALES BILLS WERE ISSUED, AND SIMILARLY COMMISSION @ 0.50% HAS BEEN PAID TO THE PARTIES FROM WHOM THE PURCHASE BILLS WERE AVAILED. THUS, THE NET MARGIN IN THE ACCOMMODATIVE BUSINESS IS AROUND 0.5O%. - ENTIRE TRANSACTIONS HAVE BEEN DONE THROUGH BANK ACCOUNT ONLY, WHICH HAS NOT BEEN PROVED OTHERWISE BY THE ID. ITO. - THE SALE AND PURCHASE BILLS ARE IN EQUAL QUANTI TY AND THUS, THE ACTUAL STOCK HAS NOT BEEN AFFECTED AT ALL. - THE PARTY WISE COMPLETE DETAIL OF THE SAID SALE S AND PURCHASES WERE ALSO PROVIDED TO THE ID. ITO. - NO EVIDENCE OF COMMISSION OF 2% WAS FOUND DURIN G THE COURSE OF SURVEY. SURVEY STATEMENT HAS TO BE ACCEPTED IN FULL AND NOT IN PART, (IV) HOWEVER, THE ID. ITO HAS OBSERVED THAT THE A PPELLANT COMPANY HAS SHOWN LESS PROFIT FROM THE SAID TRANSACTION OF ISSUING ONLY BILLS, AN D ACCORDINGLY HE ESTIMATED THE NET COMMISSION INCOME @ 2% STATING THAT THE PREVAILING MARKET RATE OF COMMISSION IN SUCH ACTIVITY IS AROUND 2%. (V) ACCORDINGLY, THE ID. ITO ESTIMATED THE COMMI SSION INCOME @ 2% AND DEDUCTED THEREFROM THE AMOUNT OF PROFIT OF RS. 5,94,140/- AS SHOWN BY THE APPELLANT COMPANY AND MADE A NET ADDITION OF RS. 14,86,695/-. ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 7 - (VI) HERE, IT IS PERTINENT TO NOTE THAT THE SAID FINDING OF THE ID. ITO IS BASED ONLY ON ASSUMPTION, PRESUMPTIONS, GUESSWORK, PRE-P ONDERANCE OF POSSIBILITIES AND IS NOT BACKED BY ANY EVIDENCE WHATSOEVER. AGAIN, THE ID. ITO AS WELL AS THE ID. CIT(A) HAS GR OSSLY FAILED TO LEAD EVEN A SINGLE EVIDENCE OR CITE AN IDENTICAL CASE, WHERE IN SIMILA R CIRCUMSTANCES THE NET COMMISSION INCOME CHARGED, IS AT LEAST 2%. FURTHER, THE ID. ITO. HAS ALSO TRIED TO CONFUSE THE FACTS IN TERMS OF PERCENTAGE BY OBSERVING THAT NO PRUDENT BUSINESSMAN CAN GIVE SUCH ACCOMMODA TIVE ENTRIES FOR A COMMISSION OF LOWER THAN 2%. (VII) IN THIS REGARD, IT IS MOST HUMBLY SUBMITTED T HAT THE ACTION OF THE ID. ITO AS WELL AS THE ID. CIT(A) IS NOT AT ALL JUSTIFIED SINCE: - THE FACT OF EARNING NET COMMISSION @ 0.50% - 1 % IN SUCH TYPE OF ACTIVITY HAS BEEN ADMITTED IN THE STATEMENT RECORDED DURING THE COURS E OF SURVEY ACTION U/S. 133A OF THE ACT IN THE CASE OF GROUP CONCERN. IN THIS REGARD, IT IS MOST HUMBLY SUBMITTED THAT IT IS A SETTLED LAW THAT THE STATEMENT AS RECORDED DURING THE COURSE OF SURVEY HAS TO BE BELI EVED IN-TOTO AND NOT IN ISOLATION TO THE CONVENIENCE OF THE EITHER PARTY I.E. THE REVENUE OR THE ASSESSEE. NOW IN THE PRESENT CASE, THE ID. ITO HAS RELIED ON THE STATEMENT OF THE FATHER OF THE DIRECTOR OF THE APPELLANT COMPANY RECORDED DURING THE SURVEY , FOR EARNING OF COMMISSION INCOME WHEREAS HE HAD ALTOGETHER CHOSEN TO IGNORE THE RATE OF COMMISSION @ 0.50% TO 1% AS CATEGORICALLY ADMITTED IN THE SAID STATEMENT ITSELF , WHICH THE HON'BLE BENCH WOULD APPRECIATE IS ABSOLUTELY ERRONEOUS AND BAD IN LAW, REQUIRING O UTRIGHT ANNULMENT. IN THIS REGARD RELIANCE IS PLACED ON THE JUDICIAL P RONOUNCEMENT OF THE HON'BLE PUNE BENCH OF THE ITAT IN THE CASE OF CHANDER MOHAN MEHTA VS. ACIT (INVESTIGATION) (1999) 65 TTJ (PUNE) 327 WHICH HAS HELD THAT 'THE AO CANNOT BE ALLOWED TO BLOW HOT AND COLD SIMU LTANEOUSLY. REVENUE CANNOT BE PERMITTED TO USE THAT PART OF THE STATEMENT WHICH I S BENEFICIAL TO IT AND REJECT THE OTHER PART OF THE STATEMENT WHICH IS DETRIMENTAL TO IT.' - THE ENTIRE TRANSACTIONS WERE MATERIALISED THRO UGH BANKING CHANNEL, AND RECEIPT OF ANY EXCESS PROFIT THAN SHOWN BY THE APPELLANT COMPANY I S NOT PROVED BY THE ID. ITO, J- THE QUANTITY OF SALES AND PURCHASE TRANSACTIO NS HAVE BEEN TALLIED BY THE APPELLANT COMPANY, A COPY OF THE ABOVE JUDGMENT IS ENCLOSED HEREWITH I N ANNEXURE-1 (PAGES NO. 6 TO 8) FOR THE IMMEDIATE REFERENCE OF THE HON'BLE BENCH. THUS, FROM THE ABOVE FACTS AND EVIDENCES, THE HON'B LE BENCH WOULD ALSO APPRECIATE THAT THE ACTION OF THE ID. ITO OF INVOKING THE PROVISIONS OF SEC. 145 AND THEREBY ESTIMATING THE PROFIT @ 2% IS ABSOLUTELY ERRONEOUS AND NOT JUSTIFIED AT ALL IN THE CASE OF THE APPELLANT COMPANY SINCE THE SAME WAS NOT SUPPORTED BY ANY CORROBORATIVE EVI DENCES WHATSOEVER. FURTHER, IN THIS REGARD, RELIANCE IS ALSO PLACED ON THE DIRECT DECISION OF THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF C1T V. TIRATH SINGH PARKASH SINGH (2008) 296 ITR 19 1 (P&H) WHEREIN IT HAS BEEN HELD THAT- ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 8 - '.. TRIBUNAL HAVING RECORDING FINDING OF FACT THAT THE ASSESSEE HAD POSSIBLY CHARGED COMMISSION @ 1 PER CENT ONLY IN THE RELEVANT YEARS AS DISCLOSED BY IT AND NOT @ 1- 1/2 PER CENT AS PRESUMED BY THE REVENUE AND THAT NO CASE OF CONCEALMENT HAS BEEN ESTABLISHED BY THE REVENUE TO JUSTIFY LEVY OF PENALTY .....' A COPY OF THE ABOVE JUDGMENT IS ENCLOSED HEREWITH I N ANNEXURE-2 (PAGE NO. 9 & 10) FOR THE IMMEDIATE REFERENCE OF THE HON'BLE BENCH. IN VIEW OF THE ABOVE FACTS, IT IS MOST HUMBLY REQUE STED BEFORE THE HON'BLE BENCH TO KINDLY DELETE THE IMPUGNED ADDITION OF RS. 14,86,695/- AS BEING WITHOUT ANY BASIS AND MADE ONLY ON CONJECTURES, SURMISES AND GUESSWORK WHICH IS ABSOLU TELY ERRONEOUS AND BAD-IN-LAW BEING NOT EVEN SUPPORTED BY ANY CORROBORATIVE MATERIALS WHATS OEVER. 6. PRAYER IN VIEW OF THE SUBMISSIONS MADE HEREIN ABOVE, WE FO R AND ON BEHALF OF OUR AFORESAID CLIENT, MOST HUMBLY PRAY BEFORE THE HON'BLE BENCH THAT THE AFORESAID ADDITIONS AS MADE BY THE LEARNED ITO AND CONFIRMED BY THE LEARNED CIT(A) MAY KINDLY BE DELETED IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. WE HOPE THAT THE SUBMISSIONS AS MADE HEREIN ABOVE W OULD SUFFICE WITH THE REQUIREMENTS OF THE HON'BLE BENCH. HOWEVER, IF THE HON'BLE BENCH IS OF ANY OTHER VIEW A FURTHER OPPORTUNITY OF PERSONAL HEARING MAY KINDLY BE GRANT ED. FOR THE KIND ACT OF YOUR HONOURS IN ACCEPTING OUR S UBMISSIONS AND PRAYER AS MADE HEREIN ABOVE, WE SHALL EVER REMAIN GRATEFUL AND DUTY BOUND LY PRAY. THANKING YOU, TRULY YOURS, FOR DSI & CO., CHARTERED ACCOUNTANTS SD/- ADVOCATE VINOD K. CHAUHAN AUTHORISED REPRESENTATIVE ENCL.: AS ABOVE. 4.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE AO HAS DELETED THE GE NUINENESS OF CHARGE OF COMMISSION @ 1% SINCE NO CORROBORATIVE EVIDENCE WAS GIVEN BY THE ASSESSEE. HE SUBMITTED THAT 2% OF THE GROSS PROFIT AS ADOPTED BY THE AO IS REASONABLE IN THE ABSENCE OF ANY EVIDENCE GIVEN BY THE ASSESSEE. HE SUBMITTED THAT BEFORE THE TRIBUNAL ALSO, THE ASSESS EE HAS NOT GIVEN ANY EVIDENCE IN SUPPORT OF ITS CLAIM. ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 9 - 5. WE HAVE HEARD THE LD.SR.DR, PERUSED THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. AT THE OUTSET, WE FIND THAT THE PAPER-BOOK SUBMITTED B Y THE ASSESSEE ON 27/12/2011 CONTAINED 10 PAGES. THE ASSESSEE HAS NO T PLACED ANY STATEMENT OF ACCOUNT, BALANCE-SHEET, ETC. IN THE PA PER-BOOK. THE AO HAS RECORDED THAT THE ASSESSEE-COMPANY HAS FILED SOME C ONFIRMATION LETTERS AND HAS TALLIED THE DIFFERENCES POINTED OUT IN CONT RA COPY OF ACCOUNT BUT IN MOST OF THE CASES WHEREIN NOTICES U/S.133(6) OF THE I.T. ACT WERE RETURNED BY THE POSTAL AUTHORITIES, NO CONFIRMATION AND COPY OF CONTRA ACCOUNT HAVE BEEN FURNISHED. THE ASSESSEE HAVE BEE N GOT AWARE OF THE FACT THAT THE PURCHASES SHOWN IN THOSE NAMES WOULD NOT BE CONSIDERED GENUINE. THE ASSESSEE-COMPANY, FINALLY FILED IT WRITTEN SUBMISSION DATED 28/12/2007 AND ADMITTED BUSINESS OF ACCOMMODA TING ENTRIES ALONG WITH ITS ROUTINE BUSINESS WITH COMMISSION @ 0.1% FO R ISSUING SALE BILLS. IT HAS ALSO SUBMITTED LIST OF PARTIES TO WHOM EITHE R ACCOMMODATING BILLS WERE ISSUED OR FROM WHOM ACCOMMODATING ENTRIES WERE RECEIVED. THIS FACT HAS ALSO BEEN NOTICED DURING THE COURSE OF SUR VEY U/S.133A OF THE I.T.ACT WAS CARRIED OUT IN THE GROUP CASES OF THE A SSESSEE-COMPANY ON 14.03.2007,WHEREIN THE MAIN PERSON OF THE GROUP SHR I TARACHAND B.SHARMA HAS ADMITTED CERTAIN BUSINESS OF ACCOMMODA TING ENTRIES. THE ASSESSEE HAS CLAIMED THE COMMISSION CHARGES IN THE RETURN @0.5% TO 1% AND ESTIMATION OF 2% WHICH IS PURELY ON THE BASIS O F CONJECTURES& SURMISES AND GUESSWORK, PREPONDERANCE OF PROBABILIT IES AND IS NOT BACKED BY ANY EVIDENCE WHATSOEVER. IT IS SUBMITTED BY THE ASSESSEE THAT SINCE IT COULD NOT PROVE THE DELIVERY OF GOODS IN C ASE OF SOME OF THE TRADING TRANSACTIONS, IT HAD AGREED THAT IT HAS EAR NED COMMISSION THEREON ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 10 - @ 1% BY ISSUING ONLY BILLS AND THE COMMISSION IN TH E FORM OF PROFIT OF RS.5,94,140/- @ 0.57% ON SALE OF THESE GOODS WAS AL READY OFFERED IN THE REGULAR RETURN, AS AGAINST THE ADMITTED PERCENTAGE OF 0.5% TO 1% OF NET COMMISSION INCOME DURING THE COURSE OF SURVEY. IT IS SUBMITTED THAT THE IMPUGNED SALES AND PURCHASES HAVE BEEN BOOKED IN TH E ACCOUNTS AND PROFIT OF RS.5,94,140/- HAS BEEN SHOWN IN RESPECT O F THESE TRANSACTIONS. THIS AMOUNT OF PROFIT OF RS.5,94,140/- IS THE NET C OMMISSION EARNED @ 0.57% ON THESE TRANSACTIONS, I.E. COMMISSION @ 1% H AS BEEN CHARGED FROM THE PARTIES TO WHOM SALE BILLS WERE ISSUED, AN D SIMILARLY COMMISSION @ 0.50% HAS BEEN PAID TO THE PARTIES FRO M WHOM THE PURCHASE BILLS WERE AVAILED. THUS, THE NET MARGIN IN THE ACCOMMODATIVE BUSINESS IS AROUND 0.50%. THE ENTIRE TRANSACTIONS HAVE BEEN DONE THROUGH BANK ACCOUNT ONLY, WHICH HAS NOT BEEN PROVE D OTHERWISE BY THE AO. THE SALE AND PURCHASE BILLS ARE IN EQUAL QUANT ITY AND THUS THE ACTUAL STOCK HAS NOT BEEN AFFECTED AT ALL. THE PARTY-WISE COMPLETE DETAIL OF THE SAID SALES AND PURCHASES WERE ALSO PROVIDED TO THE AO. NO EVIDENCE OF COMMISSION OF 2% WAS FOUND DURING THE COURSE OF SUR VEY. THE SURVEY STATEMENT HAS TO BE ACCEPTED IN FULL AND NOT IN PAR T. THIS CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN THE ABSENCE OF A NY DETAILS. THE ASSESSEE HAS NOT FILED ANY PAPER-BOOK CONTAINING BO OKS OF ACCOUNT AND OTHER DETAILS IN SUPPORT OF THIS CONTENTION. THE D ECISION RELIED UPON BY THE ASSESSEE IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE, THEREFORE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE A SSESSEE, THE SAME IS HEREBY REJECTED. THEREFORE, THIS GROUND OF THE AS SESSEE IS DISMISSED. ITA NO.4052/AHD /2008 MEENU EXIM PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 11 - 6. SECOND GROUND IS GENERAL IN NATURE DOES NOT REQU IRE ANY INDEPENDENT ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/11/2013 8.., '.../ T.C. NAIR, SR. PS 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $; / CONCERNED CIT 4. $;() / THE CIT(A)-I, SURAT 5. 9'%< .& , , / DR, ITAT, AHMEDABAD 6. <( =2 / GUARD FILE. 5$ 5$ 5$ 5$ / BY ORDER, /9& .& //TRUE COPY// > >> >/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 25.11.13 (DICTATION-PAD 12- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.11.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.28.11.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.11.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER