Ratan Singh Ror, Karnal V. ITO, Karnal

ITA 4195/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7429 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 01-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Assessee Lawyers: RAKESH JAIN
• Keywords: Corroborative evidences
• Section: 40A(3); 133(6); 194C

Judgement Text

1 ITA NO. 4195/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-4195/DEL/2012 (ASSESSM ENT YEAR-2009-10) RATAN SINGH ROR PROP. VED POULTRY FEED VILLAGE DAUDPUR KHURD KARNAL ADOPR4091H (APPELLANT) VS ITO WARD 1 KARNAL (RESPONDENT) APPELLANT BY SH. GURJEET SINGH C.A & SH. RAKESH JAIN RESPONDENT BY SH. RAMAN KANT GARG, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 15/5/2 012 PASSED BY CIT (A) KARNAL. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CH ALLENGED ON FACTS AND LAW, FOR ADHOC DISALLOWANCE OF CONVEYANCE EXPEN SES AMOUNTING RS.50,000/- WHEREAS ACCORDING TO ASSESSEE DATE OF HEARING 01.03.2016 DATE OF PRONOUNCEMENT 31.05.2016 2 ITA NO. 4195/DEL/2012 EXPENSES ARE SUPPORTED BY VOUCHERS AND THE SAME ARE BEING INCURRED FOR BUSINESS PURPOSES. 2. BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CHA LLENGED ON FACTS AND LAW, FOR DISALLOWANCE OF INTEREST RS.24,000/- F OR UTILIZING BANK LOAN FOR MAKING INTEREST FREE ADVANCE WHEREAS ACCORDING TO ASSESSEE THE BANK LOAN IS UTILIZED FOR BUSINESS PURPOSES. 3. BECAUSE THE FINDINGS OF LD. CIT (A) ARE BEING CH ALLENGED ON FACTS AND LAW, FOR DISALLOWANCE OF INTEREST RS.2,40 ,369/- ON ACCOUNT OF UTILIZING CASH AVAILABLE IN HAND FOR NON BUSINESS PURPOSES AND HENCE PAYMENT MADE FOR BANK LIMIT WHER EAS ACCORDING TO ASSESSEE THE CARRYING & CONDUCT OF THE BUSINESS AND BUSINESS AFFAIRS AS A PRUDENT BUSINESSMAN CANNO T BE OBJECTED BY THE RESPONDENT. 4. BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CHA LLENGED ON FACTS AND LAW, FOR MAKING ADDITION OF RS.50,000/- ON ACCO UNT OF LOW HOUSE HOLD EXPENSES. 5. BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CHA LLENGED ON FACTS AND LAW, FOR HAVING DISALLOWED FREIGHT EXPENSES OF RS. 2,35,804/- U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF TDS NOT DEDUCTED U/S 194C (5) OF PAYMENT MADE TO TRANSPORTE RS. 6. BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CHA LLENGED ON FACTS AND LAW, FOR MAKING ADDITION OF RS.3,44,530/- ON AC COUNT OF PAYMENTS EXCEEDING RS.20,000/- MADE IN CASH U/S40A( 3) OF THE ACT WHEREAS ACCORDING TO ASSESSEE, THE PAYMENTS ARE COVERED UNDER RULE 6DD(G) OF THE ACT. 6A). BECAUSE THE FINDINGS OF LD. CIT (A) ARE BEING CHALLENGED ON FACTS AND LAW, FOR MAKING ADDITION OF RS.12,02,512/ - ON ACCOUNT OF VARIATION IN THE VALUE OF CLOSING STOCK BETWEEN THE VALUE DECLARED IN THE ACCOUNTS AND THE VALUE DECLAR ED TO THE BANK WHEREAS ACCORDING TO ASSESSEE BOOKS ARE SUBJEC T TO AUDIT UNDER S. 44AB OF THE ACT TO SUPPORT THE VALUE OF CL OSING STOCK. B) BECAUSE THE FINDINGS OF LD. CIT(A) ARE BEING CHA LLENGED ON FACTS AND LAW, FOR MAKING ADDITION OF RS.12,02,512/- ON A CCOUNT OF REJECTING THE BOOKS U/S 145(3) OF THE ACT FOR NON P RODUCTION OF 3 ITA NO. 4195/DEL/2012 SALES VOUCHERS AND QUALITY WISE DETAILS OF OPENING AND CLOSING STOCK WHEREAS ACCORDING TO ASSESSEE BOOKS ARE SUBJE CT TO AUDIT UNDER S. 44AB OF THE ACT AND WERE PRODUCED AND WERE TEST CHECKED. 3. THE ASSESSEE DERIVED INCOME FROM TRADING OF POUL TRY FEED. THE ASSESSEE FILED RETURN DECLARING INCOME OF RS. 3,78, 970/- FROM BUSINESS PLUS AGRICULTURAL INCOME OF RS. 1,05,000/- ON 07.09.2010. THE ASSESSEE CLAIMED CONVEYANCE AND COLLECTION EXPE NSES AT RS. 1,74,652/-. THE ASSESSING OFFICER OBSERVED THAT THE EXPENSES WERE ENTIRELY IN CASH AND NO SUPPORTING EVIDENCE OR BILL S ETC WAS PRODUCED TO VERIFY THE AUTHENTICITY OF EXPENSES CLA IMED. THE ASSESSING OFFICER FURTHER NOTICED THAT THERE WAS SU BSTANTIAL INCREASE IN EXPENSES AS COMPARED TO PRECEDING YEAR WHERE THE EXPENSES CLAIMED WERE ONLY AT RS.24,160/-. THE ASSE SSING OFFICER FURTHER MENTIONED THAT THE ASSESSEE COULD NOT EXPLA IN SATISFACTORILY THE MANIFOLD INCREASE IN EXPENSES EXCEPT STATING TH AT THE EXPENDITURE WAS DUE TO INCREASE IN TURN-OVER. THE A SSESSING OFFICER MADE OBSERVATION THAT THE INCREASE IN TURN-OVER WAS BY 77% AND NOT TO THE EXTENT OF INCREASE IN EXPENSES UNDER THE HEAD CONVEYANCE AND COLLECTION AND HELD THAT THE INCREAS E CLAIMED CANNOT BE SAID TO BE DUE TO GENUINE NEEDS OF BUSINE SS. THUS CONSIDERING THE FACTS OF THE CASE AND POSSIBLE INFL ATION OF EXPENSES A DISALLOWANCE OF RS. 50,000/- WAS MADE. 4. THE ASSESSEE HAS SHOWN LOANS AND ADVANCES OF RS. 2 LACS AS PER SCHEDULE 8 FORMING PART OF BALANCE SHEET. AS PE R ASSESSEE, RS. 2 4 ITA NO. 4195/DEL/2012 LACS WERE ADVANCED TO DEEPAK MEHLA WHICH WAS SHOWN AS OPENING BALANCE AS ON 01.04.2008. THE ASSESSEE WAS CALLED U PON TO EXPLAIN THE NATURE OF ADVANCE AND ALSO TO STATE WHETHER ANY INTEREST WAS CHARGED ON THE ABOVE ADVANCE. THE ASSESSEE SUBMITT ED THAT THE ADVANCE WAS GIVEN TO DEEPAK MEHLA IN THE YEAR 2007- 08 FOR THE PURCHASE OF MAKKI WHICH REMAINS OUTSTANDING TILL DA TE AND HE WAS FACING DIFFICULTY TO RECOVER THE SAME. THE ASSESSIN G OFFICER NOTED THAT NO EVIDENCE ABOUT THE PURCHASE OF MAKKI WAS FI LED. THE ASSESSING OFFICER FURTHER OBSERVED THAT NO INTEREST ON THE ABOVE ADVANCE WAS CHARGED ALTHOUGH THE ASSESSEE CLAIMED E XPENSES OF RS. 2,64,369/- BY WAY OF INTEREST ON THE FUNDS BORR OWED FROM THE BANK AND WHEREAS ON THE OTHER HAND INTERST FREE ADV ANCE WAS MADE TO SHRI DEEPAK MEHLA. THE ASSESSING OFFICER DRAWS T HE INFERENCE THAT THE INTEREST BEARING BORROWED FUNDS WERE NOT U TILIZED FOR BUSINESS PURPOSES ONLY AND A PART OF IT WAS DIVERTE D FOR MAKING INTEREST FREE ADVANCES. THEREFORE, THE ASSESSING OF FICER HELD THAT INTEREST ATTRIBUTABLE TO THE ADVANCE OF RS. 2 LACS FOR THE PERIOD 01.04.2008 TO 31.03.2009 @ 12% PER ANNUM WORKS OUT TO RS. 24,000/- AND IS DISALLOWED OUT OF INTEREST CLAIMED IN VIEW OF SECTION 36(1)(II) AND ALSO THE RATIO OF JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES AND A CCORDINGLY DISALLOWED RS. 24,000/-. 5. THE ASSESSEE CLAIMED EXPENDITURE OF RS. 2,64,369 /- BY WAY OF INTEREST PAID TO CANARA BANK ON CASH CREDIT LIMIT. THE ASSESSEE PRODUCED THE CASH BOOK DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. THE ASSESSING OFFICER OBSERVED THAT ON THE DATES WHEN 5 ITA NO. 4195/DEL/2012 THE CHEQUES WERE ISSUED TO THE PARTIES, THE ASSESSE E HAD SUFFICIENT CASH-IN-HAND AND THERE COULD BE NO BUSINESS EXPEDIE NCY IN MAKING OVER-DRAFT FROM THE BANK WHEN THE ASSESSEES CASH B OOK SHOWED SUFFICIENT CASH BALANCE. WHILE REPLYING THE SAID QU ERY THE ASSESSEE SUBMITTED THAT THE BUSINESS OF THE ASSESSEE IS SUCH THAT THEY RECOVER CASH WHICH IS USUALLY IN SMALL DENOMINATION AND BANK DOES NOT ACCEPT CASH IN SMALL DENOMINATION. THUS, SOME P ART OF CASH GOES ON ACCUMULATING. ANOTHER REASON GIVEN BY THE A SSESSEE WAS THAT COLLECTIONS FROM SMALL FARMERS WAS IN CASH AND CASH-IN-HAND WAS ACCUMULATION OF RECEIPT FROM THE SMALL FARMERS ON DAILY BASIS AND NO CASH IS WITHDRAWN FROM THE BANK DURING THE Y EAR. THE ASSESSEE SUBMITTED BREAK UP WISE MINIMUM BALANCE OF CASH IN RESPECT OF APRIL TO MARCH AND TRIED TO DEMONSTRATE THAT MONEY WAS IN BUSINESS CIRCULATION. THE ASSESSING OFFICER GAVE A FINDING THAT THERE IS NO JUSTIFICATION FOR PAYMENT OF INTEREST W ITHOUT THERE BEING ANY BUSINESS EXPEDIENCY AND AS SUCH THE DEDUCTION F OR INTEREST CLAIMED AT RS. 2,64,369/- WAS HELD NOT ALLOWABLE EX PENDITURE AND DISALLOWANCE WAS MADE TO THE EXTENT OF RS.2,40,369/ - 6. THE ASSESSEE HAD SHOWN WITHDRAWALS OF RS. 83,000 /- ON HOUSEHOLD EXPENSES, BESIDES WITHDRAWAL OF RS. 10,8 60/- ON THE EDUCATION OF SON. THUS MAKING TOTAL WITHDRAWAL OF R S. 94,860/-. THE ASSESSING OFFICER HELD THAT THE EXPENSES SHOWN WERE INADEQUATE AND MADE ADDITION OF RS. 50,000/- FOR LO W HOUSEHOLD WITHDRAWALS. 6 ITA NO. 4195/DEL/2012 7. THE ASSESSEE CLAIMED FREIGHT EXPENSES OF RS. 8,8 7,130/- AS AGAINST NIL OF THE IMMEDIATE PRECEDING YEAR AND RS. 38,300/- ONLY OF THE ASSESSMENT YEAR 2007-08. NECESSARY DETAILS W AS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE A SSESSEE WAS CALLED UPON TO CONFIRM WHETHER ANY TAX WAS DEDUCTED AT SOURCE ON THE PAYMENTS OF FREIGHT MADE TO THE AFORESAID PARTI ES IN VIEW OF PROVISO TO SUB-SECTION (5) OF SECTION 194C OF THE I NCOME TAX ACT WHEN TAX WAS SHOWN TO HAVE BEEN DEDUCTED IN THE CAS ES OF OTHER PARTIES AS PER DETAILS OF FREIGHT FILED I.E. M/S. C HAUDHARY TRANSPORT. VIDE WRITTEN REPLY DATED 12.10.2011, THE ASSESSEE SUBMITTED THAT THE ASSESSEE USUALLY DEDUCT TAX FROM THE OWNER OF T HE TRUCK WHEREVER, IT IS APPLICABLE. THE ASSESSEE FURTHER SU BMITTED THAT AS INDIVIDUAL TRUCK FREIGHT WAS BELOW RS. 20,000/-, NO TDS WAS DEDUCTED. THE ASSESSING OFFICER OBSERVED THAT AGGRE GATE OF PAYMENTS EXCEEDS RS. 50,000/- AND BY NOT DEDUCTING TAX AT SOURCE, THERE IS CLEAR VIOLATION OF SECTION 194C(5) OF THE ACT AND THUS, TOTAL EXPENDITURE OF RS. 2,35,804 WAS DISALLOWED. 8. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE INCURRED EXPENDITURE IN CASH EXCEEDING RS. 20,000/- IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT IN RESPECT OF FREIGHT EXPENSES. SINCE THE ASSESSEE COULD NOT GIVE ANY EXP LANATION THE SAID PAYMENTS MADE IN CASH WAS HELD IN VIOLATION OF SECTION 40A(3) OF THE ACT OR EXCEPTIONS PROVIDED UNDER RULE 6DD OF THE INCOME TAX RULES. ACCORDINGLY, DISALLOWED THE EXPENDITURE TO R S. 3,44,530/-. 7 ITA NO. 4195/DEL/2012 9. THE ASSESSING OFFICER WHILE GOING THROUGH THE TR ADING ACCOUNT FILED ALONG WITH THE RETURN, NOTICED THAT THE ASSES SEE HAS SHOWN VALUE OF CLOSING STOCK AT RS. 63,63,113/-. AS PER A NNEXURE I ENCLOSED WITH THE AUDIT REPORT, THE ASSESSEE FURNIS HED QUANTITY- WISE DETAILS OF CLOSING STOCK ALONG WITH VALUATION. DURING THE YEAR, THE ASSESSEE WAS HAVING CASH CREDIT LIMIT FROM CANA RA BANK AGAINST HYPOTHECATION OF STOCK WHERE THE AMOUNT PAYABLE TO BANK AS ON 31.03.2009 WAS SHOWN AT RS. 51,94,891/-. AS THE AMO UNT PAYABLE TO THE BANK BY THE ASSESSEE WAS MORE THAN 50 LACS E NQUIRIES WERE MADE FROM THE CANARA BANK, KARNAL U/S. 133(6) OF TH E ACT AND BANKING AUTHORITIES WERE REQUESTED TO PROVIDE THE C OPY OF STOCK STATEMENTS FILED BY THE ASSESSEE AS ON 20.11.2008 A ND 31.03.2009. THE BANK SUBMITTED THE COPY OF STOCK STATEMENT FILE D BY THE ASSESSEE SHOWING THE POSITION OF STOCK AS ON 31.03. 2009 AT RS. 75,65,625/-. AFTER TAKING INTO CONSIDERATION OF THE ASSESSEES REPLY THE ASSESSING OFFICER OBSERVED THAT THE FIGURES SUB MITTED TO BANK ARE THE REAL FIGURES AND THE VALUE OF CLOSING STOCK SHOWN TO THE BANK IS CORRECT VALUE. THE DIFFERENCE OF RS. 12,02, 512/- WAS TREATED AS INCOME OF THE ASSESSEE FROM OTHER SOURCES BY THE ASSESSING OFFICER. 10. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) WHILE CONFIRMING THE ASSESSMENT ORDER HELD THAT FOR EACH EXPENSES WHICH WAS CLAIMED BY THE ASSESSEE THERE WAS NO EVIDENCE GIVEN BY THE ASSESSE E. 8 ITA NO. 4195/DEL/2012 11. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH THE PARTIES. THE ASSESSEE HAS GIVEN ALL THE RELEVANT MATERIAL BE FORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT (A). TH ERE ARE FIVE GROUNDS CONTESTED BY THE ASSESSEE IN THE PRESENT AP PEAL. GROUND NO.1 IS ON THE ISSUE OF AD-HOC DISALLOWANCE OF CONV EYANCE EXPENSES. THE ASSESSEE HAS PAID THE ENTIRE AMOUNT OF EXPENSES RELATED TO CONVEYANCE AND COLLECTION IN CASH. THE ASSESSEE BE FORE THE ASSESSING OFFICER MADE WRITTEN SUBMISSIONS THAT TH E DISALLOWANCE OF THIS EXPENSES WERE MADE ON ESTIMATED BASIS BUT T HE SAME ARE INCURRED FOR BUSINESS PURPOSE BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE SUPPORTING EVIDENCE TOWARDS INCU RRING EXPENDITURE WAS PRODUCED BEFORE THE ASSESSING OFFIC ER. IT IS SEEN FROM THE PAPER BOOK THAT THE EVIDENCE TO THE EXTENT OF EXPENSES INCURRED ON CONVEYANCE AND COLLECTION WAS BEFORE TH E ADJUDICATING AND APPELLATE AUTHORITIES BUT THE SAME WAS NOT TAKE N INTO ACCOUNT BY BOTH THE AUTHORITIES. THE DISALLOWANCE WAS ON AD -HOC BASIS. THIS IS IN OUR VIEW ARBITRARY. HENCE WE DELETE THE DISA LLOWANCE. GROUND NO. 1 IS ALLOWED. 12. GROUND NO. 2 RELATES TO THE DISALLOWANCE OF INT EREST FOR UTILIZING BANK LOAN FOR MAKING INTEREST FREE ADVANC E. THE ASSESSEE SUBMITTED THAT THE LOAN WAS TAKEN FOR BUSINESS PURP OSE AND THUS THE INTEREST WAS PAID / INCURRED FOR BUSINESS. THE ASSESSEE SUBMITTED THE RELEVANT DOCUMENTS BEFORE THE AUTHORI TIES, BUT THE SAME WAS NOT TAKEN COGNIZANCE. THE ASSESSING OFFIC ER AND THE CIT 9 ITA NO. 4195/DEL/2012 (A) PROCEEDED ON THE PREMISE THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CLAIM. THIS IS NOT A CORRECT POSITION AS THE PAPER BOOK SUBMITTED BY THE ASSESSE E ALONG WITH THE LOANS STATEMENT FOR THE PERIOD 1/4/2008 TO 31/3 /2009 WAS PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS CI T (A). BOTH THE AUTHORITIES FAILED TO TAKE COGNIZANCE OF THE SAID L OAN STATEMENT. IT IS NOT IN DISPUTE THAT THE LOAN WAS TAKEN FOR BUSINESS PURPOSE. THE MONEY WAS ALSO ADVANCED FOR BUSINESS PURPOSE. HENCE THE DISALLOWANCE IS BAD IN LAW. GROUND NO. 2 IS ALLOWED . 13. GROUND NO.3 RELATES TO DISALLOWANCE OF INTEREST ON ACCOUNT OF NOT UTILIZING CASH AVAILABLE IN HAND FOR BUSINESS P URPOSES AND RESORTING TO PAYMENT FROM BANK CASH CREDIT LIMIT. THE CIT (A) HAS SIMPLY STATED THAT THERE WAS NO EVIDENCE PRODUCED B Y THE ASSESSEE. WE FIND THAT THERE IS NO MERIT IN THE DISALLOWANCE. THE SAID STATEMENT IS INCORRECT. IT IS NOT FOR THE ASSESSIN G OFFICER TO DECIDE HOW AN ASSESSEE CAN USE A CASH CREDIT LIMIT WITH TH E BANK. HENCE, GROUND NO. 3 IS ALLOWED. 14. GROUND NO.4 RELATES TO WHETHER THE ASSESSEE HAS GIVEN PROPER REASONING BEFORE THE AUTHORITIES REGARDING HOUSE HO LD EXPENSES. WE FIND THAT RS. 90,000/- IS NOT A REASONABLE AMOUNT F OR MONTHLY EXPENSES OF ANY PERSON AND HIS FAMILY. THE ADDITIO N IN OUR VIEW IS NOT WARRANTED. GROUND NO. 4 IS ALLOWED. 15. GROUND NO. 5 RELATES TO DISALLOWANCE IN RESPECT OF FREIGHT EXPENSES OF RS. 2,35,804/- U/S 40AI (A) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TDS U/S 194C (5) ON PAYMENT MADE T O 10 ITA NO. 4195/DEL/2012 TRANSPORTERS. THE ASSESSEE SUBMITTED ALL THE DETAI LS RELATED TO THE PAYMENT MADE TO THE TRANSPORT AND THE AUTHORITIES F AIL TO LOOK INTO THE SAME. AS EACH PAYMENT IS LESS THAN RS.20,000/- , TDS PROVISIONS ARE NOT ATTRACTED. IN LIGHT OF THIS, THE GROUND NO. 5 IS ALLOWED. 16. GROUND NO. 6 IS REGARDING THE DISALLOWANCE U/S. 40A(3). THE CIT (A) HELD THAT THERE WAS NO EVIDENCE FILED BY TH E ASSESSEE. THE DISALLOWANCE WAS CONFIRMED BY THE CIT (A). BEFORE U S THE ASSESSEE DEMONSTRATED THAT THE PAYMENTS ARE COVERED UNDER TH E EXCEPTIONS SPECIFIED UNDER RULE 6DD. A CHART IS FILED. WE ARE CONVINCED WITH THE SAME. HENCE WE DELETE THE DISALLOWANCE. GROUND NO. 6 IS ALLOWED. 17. GROUND NO. 6(A) AND 6(B) IS REGARDING ADDITION OF RS. 12,02,512/- ON ACCOUNT OF VARIATION IN THE VALUE OF CLOSING STOCK BETWEEN THE VALUE DECLARED IN THE ACCOUNTS AND THE VALUE DECLARED TO THE BANK. THE ASSESSEE HAS GIVEN THE BOOKS AT TH E RELEVANT TIME TO THE ASSESSING OFFICER TO VERIFY THE SAME AND THE BOOKS WERE ALSO SUBJECTED TO THE AUDIT UNDER SECTION 44AB OF THE AC T TO SUPPORT THE VALUE OF CLOSING STOCK. THE FINDING OF THE CIT(A) T HAT THE ASSESSEE HAS NOT PRODUCED COMPLETE SALE VOUCHERS AND ALSO Q UANTITY WISE DETAILS OF OPENING AND CLOSING STOCK, IS NOT FACTUA LLY CORRECT. IT WAS CLEAR FROM THE RECORDS THAT THE SAME WAS PRODUCED B EFORE THE ASSESSING OFFICER AT THE RELEVANT TIME. 18. THIS ADDITION OF RS. 12,02,512/- WAS ALSO MADE BY REJECTING THE BOOKS UNDER SECTION 145(3) OF THE ACT FOR NON P RODUCTION OF 11 ITA NO. 4195/DEL/2012 SALES VOUCHERS AND QUALITY-WISE DETAILS OF OPENING AND CLOSING STOCK. IT WAS NEVER THE CASE OF THE REVENUE THAT PU RCHASE / SALE DURING THE YEAR DID NOT TAKE PLACE. THE ASSESSEE SU BMITTED MONTH WISE PURCHASE AND SALE DETAILS BEFORE THE ASSESSING OFFICER. IT WAS CLEAR FROM THE RECORDS THAT THE SAME ALL QUANTITATI VE DETAILS WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE REJECTIO N OF BOOKS IS BAD IN LAW AS NO DEFECTS ARE POINTED OUT. THE ASSESSEE DEMONSTRATED WITH EVIDENCE THAT THE CLOSING STOCK DECLARED IN TH E BOOKS OF ACCOUNT IS CORRECT. HENCE NO ADDITION CAN BE MADE ON THIS ACCOUNT. WE ALLOW GROUND NO. 6(A) AND 6(B). 19. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST OF MAY, 2016. SD/- SD/- (J. SUDHAKAR REDDY) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/05/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI 12 ITA NO. 4195/DEL/2012 DATE 1. DRAFT DICTATED ON 01/03/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 02/03/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 3 1 . 05.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 3 1 .05.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.