ASST CIT 14(3), MUMBAI V. JITENDRA HARSHADKUMAR & CO., MUMBAI

ITA 4349/MUM/2012

• Counselvise Citation: 434919914 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 31-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 26-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained investment; Earning of tax free income; Retraction
• Section: 143(3); 133A; 14A; 131; 69

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI .. , !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM !./ I.T.A. NO. 3141/MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2005-06 M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. ( ( ( ( / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), MUMBAI. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !./ I.T.A. NO. 3142/MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2006-07 M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. ( ( ( ( / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !./ I.T.A. NO. 4349 /MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI. ( ( ( ( / VS. M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 2 !./ I.T.A. NO. 3143/MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2007-08 M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. ( ( ( ( / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), MUMBAI. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !./ I.T.A. NO. 4350 /MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI. ( ( ( ( / VS. M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !./ I.T.A. NO. 3144/MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2008-09 M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. ( ( ( ( / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), MUMBAI. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 3 !./ I.T.A. NO. 4351 /MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2008-09 ASSTT. COMMISSIONER OF INCOME TAX- CIRCLE NO. 14(3), AAYAKAR BHAVAN, CHURCHGATE, MUMBAI. ( ( ( ( / VS. M/S JITENDRA HARSHADKUMAR & COMPANY,SHOP NO. 685, GROUND FLOOR, GOVIND CHOWK M.J. MARKET, MUMBAI 400 002. #. !./ PAN : AAAFJ 0271E ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !( $ 2 / // / DATE OF HEARING : 31-10-2013 34- 2 / DATE OF PRONOUNCEMENT : 13-11-2013 [ '5 / O R D E R PER BENCH . : OUT OF THESE SEVEN APPEALS, SIX APPEALS ARE CROSS A PPEALS FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 WHICH ARE DIRECTED AGAINST THREE SEPARATE ORDERS DATED 20-4-2012 FOR A.Y. 2006 -07, DATED 19-4-2012 FOR A.Y. 2007-08 AND DATED 20-4-2012 FOR A.Y. 2008-09 P ASSED BY THE LD. CIT(A) - 25, MUMBAI AND THE SEVENTH APPEAL IS THE APPEAL OF THE ASSESSEE WHICH IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) -25, MUMBA I DATED 20-04-2012 FOR A.Y. 2005-06. SINCE COMMON ISSUES ARE INVOLVED THER EIN, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS SI NGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON ISSUE INVOLVED IN THESE APPEALS RELAT ING TO THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED/UNPROVED PURCHASES AND SUSTAINED PARTLY BY THE LD. CIT(A) IS RAISED IN THE FOLLOWING GROUNDS:- ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 4 A.Y. ADDITION MADE BY THE A.O.(RS) ADDITION SUSTAINED BY THE LD. CIT(A)(RS) ASSESSEES GROUND NO. REVENUES GROUND NO. 2005-06 2,73,700/- 28,000/- 1 - 2006-07 26,45,012/- 2,65,000/- 1 1 2007-08 34,24,522/- 3,43,000/- 1 1 2008-09 13,30,906/- 1,34,000/- 1 1 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM WHICH IS ENGAGED IN THE BUSINESS OF DEALERS AND MERCHANTS OF CLOTH M ATERIALS. THE RETURNS OF INCOME FOR THE YEARS UNDER CONSIDERATION WERE FILED BY IT DECLARING TOTAL INCOME OF RS. 4,18,570/-, RS. 10,84,410/-, RS. 10,9 6,473/- AND RS. 11,77,145/- FOR ASSESSMENT YEARS 2005-06, 2006-07, 2007-08 AND 2008-09 RESPECTIVELY. THE RETURNS OF INCOME FILED FOR ASSES SMENT YEARS 2005-06 AND 2006-07 WERE ACCEPTED BY THE A.O. INITIALLY U/S 143 (1) OF THE INCOME TAX ACT, 1961 (THE ACT). IN THE CASE OF SHRI RAKESH KUMAR G UPTA, ONE OF THE SUPPLIERS OF THE ASSESSEE FIRM, A SURVEY U/S 133-A OF THE ACT WAS CARRIED OUT ON 13/14- 2-2009. IN HIS STATEMENT RECORDED DURING THE COURS E OF SURVEY, SHRI RAKESH KUMAR GUPTA STATED THAT HE WAS PROVIDING ACCOMMODAT ION SALES BILLS FOR PURCHASES IN THE NAME OF THREE PROPRIETARY CONCERNS M/S MANOJ MILLS, M/S ASTHA SILK INDUSTRIES AND M/S SHREE RAM SALES & SYN THETICS BELONGING TO HIM AND HIS FAMILY MEMBERS. THE SAID STATEMENT, HO WEVER, WAS RETRACTED BY SHRI RAKESH KUMAR GUPTA IN PART THROUGH WRITTEN COM MUNICATION TO THE A.O. AND ALSO BY SWORN IN AFFIDAVITS FILED BY HIM AND HI S FAMILY MEMBERS WHO WERE PROPRIETORS OF THESE CONCERNS. IN THE AFFIDAVITS, S HRI RAKESH KUMAR GUPTA/HIS FAMILY MEMBERS STATED IN CATEGORICAL TERMS THAT THE PURCHASES MADE BY THE ASSESSEE WERE GENUINE. THE ASSESSEE ALSO PRODUCED E VIDENCES TO SHOW PAYMENT FOR PURCHASES MADE BY ACCOUNT PAYEE CHEQUES . IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FURTHER PRODUC ED THE QUANTITATIVE STATEMENTS SHOWING TALLY OF PURCHASES AND SALES WIT H BOOKS OF ACCOUNTS IN ORDER TO ESTABLISH THE GENUINENESS OF PURCHASES. TH E ASSESSEE PLEADED THAT NO ADVERSE INFERENCE COULD BE DRAWN AGAINST IT ON T HE BASIS OF GENERAL ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 5 STATEMENT OF THIRD PARTY WITHOUT ANY SPECIFIC REFER ENCE OF THE ASSESSEE AND SURVEY ACTION IN THE CASE OF A THIRD PARTY ONLY. IT WAS CONTENDED THAT NO FURTHER INQUIRY WAS CARRIED OUT EITHER IN THE CASE OF ASSESSEE OR SHRI RAKESH KUMAR GUPTA INSPITE OF THE FACT THAT THE STATEMENT WAS SUBSEQUENTLY RETRACTED IN PART AND PURCHASES MADE BY THE ASSESSE E WERE CONFIRMED BY THE AFFIDAVITS OF THESE PERSONS (I.E. SELLER). THE ASSE SSING OFFICER DID NOT ACCEPT THE STAND OF THE ASSESSEE THAT THE PURCHASES WERE GENUI NE AND THERE WAS NO INFLATION OF PURCHASES. ACCORDINGLY, HE COMPLETED T HE ASSESSMENT FOR A.Y. 2007-08 U/S. 143(3) MAKING ADDITION OF RS. 34,24,52 2/- U/S. 69 OF THE ACT HOLDING IT TO BE THE UNEXPLAINED INVESTMENT IN THE GOODS PURCHASED. 4. THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF UNE XPLAINED PURCHASES/INVESTMENTS WERE CHALLENGED BY THE ASSESS EE IN THE APPEALS FILED BEFORE THE LD. CIT(A). ELABORATE SUBMISSIONS WERE MADE ON BEHALF OF THE ASSESSEE IN SUPPORT OF ITS CASE ON THIS ISSUE WHICH AS SUMMARIZED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER FOR A.Y. 2007-08 , WER E AS UNDER:- 1) THE ASSESSEE HAD MADE GENUINE PURCHASES AND PAY MENT WERE MADE BY A/C PAYEE CHEQUES WHICH WERE CONFIRMED . 2) BANK CONFIRMATIONS WERE FILED STATING THAT PAYME NT WERE CREDITED IN SELLERS ACCOUNT. 3) QUANTITATIVE TALLY OF PURCHASES, SALES AND STOCK S GIVEN TO AO AND ALSO APPELLATE PROCEEDING. 4) PURCHASES AND CORRESPONDING SALES HAVE BEEN ESTA BLISHED BEFORE AO AND ALSO PRODUCED BEFORE CIT(A) FOR VERIF ICATION- SUPPORTED BY DELIVERY CHALLAN. 5) IMPUGNED SELLERS HAVE CONFIRMED THE SALES TO THE ASSESSEE IN AFFIDAVITS AS WELL AS WRITTEN COMMUNICATION TO T HE AO. 6) THE AOS CASE IS SOLELY BASED ON GENERAL STATEME NT OF GUPTA IN THE YEAR 2009(WHICH WAS MODIFIED BY AFFIDA VIT) WITHOUT ANY REFERENCE OF ANY SPECIFIC PERSON. THE A O NEITHER CARRIED OUT ANY FURTHER INQUIRY WITH GUPTA OR ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 6 ASSESSEE NOR PROVIDE ANY OPPORTUNITY TO CROSS EXAMI NE GUPTA INSPITE OF REQUEST. 7) AS PER RECENT DECISION OF JURISDICTIONAL ITAT MU MBAI IN THE CASE OF FREE INDIA ASSURANCE SERVICES LTD. VS. DCIT (62 DTR -349-MUMBAI YEAR 2011) IN SIMILAR CASES NO ADDITION CAN BE MADE IF PAYMENTS WERE MADE BY THE A/C PAYEE CHEQ UES IN CASE OF A ACCOMMODATION PURCHASES. IT WAS ALSO SUBMITTED AS AN ALTERNATIVE CONTENTION BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ENTIRE PURCHASES TREATED AS UNP ROVED BY THE A.O. COULD NOT BE ADDED TO ITS TOTAL INCOME AND THE ADDITION ON TH IS ISSUE SHOULD BE RESTRICTED ONLY TO THE EXTENT OF SOME PERCENTAGE AS DONE BY THE LD. CIT(A) IN THE CASE OF OTHER ASSESSEES WHEREIN SIMILAR ISSUE W AS INVOLVED. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE LD. CIT(A) DECIDED THIS ISSUE VIDE PARA NO. 4 TO 4.2 OF HIS IM PUGNED ORDER FOR A.Y. 2007- 08 AS UNDER:- 4. 1 HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS THE SUBMISSIONS GIVEN BY THE ASSESSEE AND ALSO JUDICIAL PRONOUNCEMENTS OF HONBIE ITATS AND HONBLE HIGH COURT AND DECISIONS OF LD. CIT(A) OF MUMBAI REGION AS RELIED UPON BY THE ID. AR AND ISSU E IN DISPUTE IS ADJUDICATED IN LIGHT THEREOF. IT IS SEEN THAT IN TH IS CASE SALES ARE IDENTIFIABLE AND QUANTITATIVE TALLY WAS AVAILABLE O N RECORD. THE REJECTION OF ALLEGED DISPUTED PURCHASES IS BASED ON THE GENER AL STATEMENT OF THE THIRD PARTY MADE IN THE YEAR 2009 WITHOUT ANY REFER ENCE TO THE ASSESSEE OR ANY SPECIFIC PERSON WHERE AS INSTANT YEAR IS 200 6-07. THE SAID PERSONS WERE NEITHER MADE AVAILABLE FOR EXAMINATION OR CROSS EXAMINATION NOR THE MATERIAL FOUND FROM THE THIRD P ARTY WAS MADE AVAILABLE TO THE ASSESSEE INSPITE OF REQUEST FROM T HE ASSESSEE. HOWEVER, BEFORE THEIR AO, THE SAID THREE PARTIES HAVE CONFIR MED BY WRITTEN COMMUNICATION THAT THEY HAD SOLD THE SAID GOODS TO THE ASSESSEE. THE SAID PARTIES HAD RETRACTED THEIR STATEMENTS IN PART SUBSEQUENT TO SURVEY ACTION BY WRITTEN COMMUNICATIONS. THEY ALSO FURNISHED AFFIDAVITS BEFORE THEIR A.O. CONFIRMING GENUINE SAL E TO CERTAIN PARTIES. ALL THE ABOVE MENTIONED 3 PERSONS HAVE FILED AFFIDA VITS STATING THAT AS FAR AS ASSESSEE IS CONCERNED THESE PERSONS ACTUALLY MADE THE SALES TO THE ASSESSEE AND CONSEQUENTLY PURCHASES MADE BY THE ASSESSEE WERE GENUINE. THE ASSESSEE HAD SHOWN THAT THE ITEMS SHOW N TO BE PURCHASED FROM THESE 3 CONCERNS WHICH WERE DISPUTED BY THE AO, HAVE BEEN DULY RECORDED IN BOOKS OF ACCOUNTS AND SOLD BY THE ASSESSEE TO OTHER PERSONS/RETAILERS OR ARE PART OF CLOSING STOC K, AND THIS FACTS HAS ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 7 BEEN BROUGHT ON RECORD BY THE ASSESSEE EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND REMAND PROCEEDING AND TH IS FACT REMAINS UNCONTROVERTED EVEN NOW AS OF DATE. IT IS UNDISPUTE D THAT NO SURVEY ACTION OR ANY FURTHER INQUIRY WAS CARRIED OUT IN TH E CASE OF THE ASSESSEE. IT IS SEEN THAT NEITHER ANY MEANINGFUL IN QUIRY OR INVESTIGATION WAS CARRIED OUT EITHER IN THE CASE OF THE ASSESSEE OR GUPTAS AFTER SURVEY ACTION OR DURING ASSESSMENT PROCEEDING AS WE LL AS REMAND PROCEEDING. THE SOLE RELIANCE WAS PLACED ON INITIAL GENERAL STATEMENTS OF SHRI RAKESHKUMAR GUPTA. NO COUNTER INQUIRY OR IN VESTIGATION WAS CARRIED OUT AFTER RETRACTION. SINCE THE ASSESSEE FU RNISHED QUANTITATIVE TALLY OF PURCHASES, SALES AND STOCK, THE AO HAD OBS ERVED ON PAGE 8 OF ASSESSMENT ORDER ITSELF THAT THE ASSESSEE MIGHT HAV E PURCHASED GOODS FROM SOME OTHER PARTIES AND TO SET RIGHT THE RECORD S, THE ASSESSEE OBTAINED ACCOMMODATION PURCHASE BILLS. HENCE, THIS CLEARLY ESTABLISHES THAT THERE WERE PURCHASES BY THE ASSESSEE (ALTHOUGH NOW DISPUTED) AND ITS CONSEQUENT SALES, WHICH HAD BEEN OFFERED FOR TA XATION BY THE ASSESSEE. IN GIVEN FACTS THE AO COULD NOT HAVE TREA TED THE ENTIRE PURCHASES OF RS. 34,24,522/- AS UNEXPLAINED WHEN AO HAD OBSERVED ON PAGE 8 OF THE ASSESSMENT ORDER ITSELF THAT THESE PURCHASES COULD POSSIBLY HAVE BEEN MADE FROM OTHER PARTIES. THE FAC TS AND DECISION IN THE CASE OF FREE INDIA ASSURANCE PVT. LTD. VS. DCIT BY THE HONBLE JURISDICTION ITAT, MUMBAI (62DTR 349-MUMBAI 2011) D ID NOT ALLOW ANY ADDITION OR DISALLOWANCE IN SUCH FACTS. THUS, T HE ISSUE TO BE DECIDED IS THAT IN SUCH CASES WHERE ONE PARTY INITI ALLY DENYING THE SALES BY GENERAL SWEEPING STATEMENT IN PECULIAR CIRCUMSTA NCES WITHOUT REFERRING TO ANY SPECIFIC PERSON AFTER 2 YEARS AND THAT TOO IN SURVEY AND THE OTHER PARTY AFFIRMS OF HAVING RECEIVED THE GOOD S AND OF HAVING MADE THE PAYMENTS BY ACCOUNT PAYEE CHEQUE AND SUBSEQUENT LY OF HAVING SOLD TO 3RD PARTIES AND ACCOUNTING THESE SALES/CLOS ING STOCK AS INCOME, CAN THE ENTIRE PURCHASES BE ADDED BACK AS UNEXPLAIN ED OR ONLY AN ADHOC ADDITION, IF AT ALL, BE MADE TO COVER THE LEA KAGE. HOWEVER, FACTS OF THE CASE ARE MORE FAVOURABLE TO THE ASSESSEE FOR TH E REASON THAT THE SAID PARTIES HAD CONFIRMED SALES TO THE ASSESSEE BY AFFIDAVITS AND RECEIPTS OF PURCHASE PRICE WAS BY ACCOUNT PAYEE CHE QUE. MORE SO, THESE PARTIES WERE NOT EXAMINED OR CROSS EXAMINED EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR REMAND PROCEEDINGS INS PITE OF ASSESSEES REQUESTS. THE IRREGULARITIES CARRIED OUT BY THE SAI D SELLERS CANNOT BE IMPOSED UPON THE ASSESSEE BECAUSE THE ASSESSEE CANN OT EXERCISE CONTROL OVER THIRD PARTY. 4.1 IN MY OPINION, KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, ALTHOUGH THE PURCHASES F ROM MR. RAKESHKUMAR GUPTA, PROPRIETOR OF MANOJ SILK MILLS, MRS. HEMA GUPTA, PROPRIETRESS SHREE RAM SALES & SYNTHETICS AND MR. M OHIT GUPTA, THE PROPRIETOR OF ASHTA SILK INDUSTRIES ARE DISPUTED, B UT WHEN THE ASSESSEE HAS SOLD THESE VERY ITEMS AND ACCOUNTED FOR AS SALE S/CLOSING STOCK AND CONSEQUENTIAL INCOME OFFERED FOR TAXATION THE ONL Y ADDITION TO BE MADE CAN BE FOR POSSIBLE LEAKAGE RELATING TO PURCHA SES, AS THEY HAVE ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 8 BECOME THE SUBJECT MATTER OF DISPUTE I.E. WHETHER A SSESSEE IN FACT PURCHASED FROM ONE MR. RAKESHKUMAR GUPTA, PROPRIETO R OF MANOJ SILK MILLS, MRS. HEMA GUPTA, PROPRIETRESS OF SHREE RAM S ALES & SYNTHETICS AND MR. MOHIT GUPTA, PROPRIETOR OF ASTHA SILK INDUS TRIES OR FROM SOME OTHER PARTIES OR FROM THE OPEN MARKET AND THEN EFFE CTED THE SALES. OTHERWISE, THE CORRESPONDING SALES/CLOSING STOCK HA S TO BE REDUCED WHICH WILL GIVE ABSURD RESULTS OF NEGATIVE INCOME. THE ISSUE HAS ANOTHER FACET ALSO. THE AO HAD MADE THE ADDITION U/ S. 69 OF THE ACT FOR THESE DISPUTED PURCHASES. FOR THE SAKE OF CLARITY, SECTION 69 OF THE I.T. ACT IS REPRODUCED BELOW: WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN BOOKS OF ACCOUNT, IF ANY, MAINTAINE D BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EX PLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENTS OR THE E XPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SA TISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE IN COME OF THE ASSESSEE OF SUCH FINANCIAL YEAR FROM THE ABOVE, IT CAN BE SEEN THAT ADDITION U/S. 6 9 CANNOT BE MADE IN THE CASE OF THE ASSESSEE AS THE PURCHASES E FFECTED BY THE ASSESSEE ARE RECORDED AND ACCOUNTED IN THE BOOKS OF ACCOUNTS. HERE IS NOT A CASE WHERE THE INVESTMENTS/PURCHASES ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, NO ADDITION U/S. 69 C AN BE MADE IN THE GIVEN FACTS OF THE CASE. HOWEVER, IT IS TRUE THAT A CCORDING TO THE AO THE PURCHASES SHOWN BY THE ASSESSEE FROM THE AFORESAID PARTIES ARE IN DOUBT AS THE COUNTER PARTIES ARE STATED TO BE ACCO MMODATION BILL PROVIDER. AT THE SAME TIME THE SALES/CLOSING STOCK SHOWN BY THE ASSESSEE HAVE NOT BEEN DOUBTED BY THE AO. THE GP RA TE DISCLOSED BY THE ASSESSEE IS NOT DOUBTED. IT IS NOT THE CASE OF THE AO THAT THE GP RATE IS LOW IN COMPARISON OF OTHER ASSESSEES OR PR OCEEDING YEARS. THE QUANTITATIVE TALLY OF PURCHASES AND SALES / STOCK C OULD NOT BE REBUTED. SIMILARLY THE AO HAD ACCEPTED THE EXISTENCES OF PUR CHASES IN QUANTITY, ALBEIT NOT FROM THE GUPTAS. THEREFORE, THE LOGIC AL COROLLARY OF THIS IS THAT PURCHASES HAVE BEEN MADE BY THE ASSESSEE PERHA PS MAY NOT BE FROM THE PARTIES FROM WHOM HE HAS SHOWN THE PURCHAS ES AS STATED BY THE A.O. OR CONCERN PARTIES MIGHT HAVE GIVEN DELIVE RY OF GOODS THROUGH OTHERS. SO LONG AS SALES/CLOSING STOCK ARE NOT PROV ED AS BOGUS, THE EXISTENCE OF PURCHASE CANNOT BE DENIED. IF THE PURC HASES ARE NOT EFFECTED ROUGH SHRI RAKESHKUMAR GUPTA & OTHERS, ONE LOGICAL INFERENCE THAT CAN BE DRAWN AS ALSO DRAWN BY THE AO IS THAT T HE SAME MIGHT HAVE BEEN MADE FROM THE OPEN MARKET/UNREGISTERED DEALERS AND THEN COVERED BY THE BILLS TAKEN FROM SHRI RAKESHKUMAR GU PTA & OTHERS. THERE IS ANOTHER POSSIBILITY THAT THESE PARTIES (I. E. GUPTAS) MIGHT HAVE PROVIDED THE GOODS THROUGH OPEN MARKET OR OTHER SEL LERS WHO SELLS GOODS WITHOUT BILLS OR IN CASH. IN FACT THE SAID PA RTIES HAD STATED IN AFFIDAVIT THAT THEIR PURCHASES WERE IN CASH AND SOL D TO THE ASSESSEE. ONE CANNOT DENY THAT GOODS IN GREY MARKET I.E. WITH OUT BILL AND BY CASH ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 9 IS AVAILABLE AT LESSER PRICE. SUCH TYPE OF TRADING IS WELL PREVAILING AND KNOWN. IT IS A MATTER OF COMMON KNOWLEDGE THAT GOOD S ARE ALSO SOLD BY ONE PARTY WITHOUT TAKING DELIVERY IN OWN GODOWN, I. E. DELIVERY THROUGH OTHER PARTY. SUCH TYPE OF INDIRECT TRADING IS PREVA ILING BY CHARGING 1 TO 2 PERCENTAGE COMMISSION AND ASSESSED AS SUCH IN SO MANY CASES. THE ACCOUNTS OF THE ASSESSEE ARE AUDITED. THE AUDIT REP ORT CONTAINS QUANTITATIVE DETAILS OF CLOSING STOCK FOLLOWED BY M ETER WISE DETAILS OF OPENING STOCK, PURCHASES, SALES AND CLOSING STOCK ( IN ASSESSMENT PROCEEDINGS). DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE ASSESSEE HAD FURNISHED QUANTITATIVE TALLY OF STOCK, PURCHASES AND SALES. THE ASSESSEE ALSO PRODUCED DELIVERY CHALLANS. EVE N DURING THE COURSE OF APPELLATE PROCEEDING TRAIL OF PURCHASE AND CORRE SPONDING SALES WAS DEMONSTRATED RANDOMLY. THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES AND BANK ALSO CERTIFIED THERETO. THER E IS NO EVIDENCE ON RECORD THAT THE PAYMENTS MADE BY THE ASSESSEE HAVE COME BACK TO HIM IN CASH. THE ASSESSEE IS ABLE TO CORRELATE PURCHASE S WITH CORRESPONDING SALES/CLOSING STOCK. THE AO HAS MERELY RELIED UPON THE GENERAL STATEMENT OF SHRI RAKESHKUMAR GUPTA AND OTHERS WHIC H WAS SUBSEQUENTLY RETRACTED IN PART BY WAY OF WRITTEN CO MMUNICATION AND AFFIDAVITS. THEREFORE, IN MY CONSIDERED VIEW THE PU RCHASES SHOWN BY THE ASSESSEE CANNOT BE HELD TO BE BOGUS OR NON EST (NON EXISTENCE) PURCHASES SQ LONG AS THE SALES/CLOSING STOCK SHOWN BY THE ASSESSEE ARE NOT HELD BOGUS. IT IS NOT THE CASE OF THE AO TH AT THE SALES/CLOSING STOCKS SHOWN BY THE ASSESSEE ARE UNPROVED AND BOGUS . THEREFORE, THE ADDITION MADE ON ACCOUNT OF DISPUTED PURCHASES OF R S. 34,24,522/- CANNOT BE SUSTAINED. AS STATED ABOVE, THE ONE POSSI BLE LOGICAL INFERENCE CAN BE THAT THE ASSESSEE MIGHT HAVE MADE PURCHASES FROM OPEN MARKET THROUGH THESE PARTIES (THE AO HIMSELF HAD STATED SO IN ASSESSMENT ORDER) AND OBTAINED ACCOMMODATION BILLS FROM THE AF ORESAID CONCERNS WHICH MIGHT HAVE RESULTED IN REDUCED GP ON SALE OF SUCH ITEMS AS COMPARED TO OTHERS. THERE IS ALSO POSSIBILITY OF D ELIVERY OF GOODS FROM OTHER PARTY IN GREY MARKET ARRANGED BY THE SAID DIS PUTED SELLERS. UNDER SUCH FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ONLY ADDITION THAT CAN BE MADE IS ON ACCOUNT OF ESTIMATI ON OF PROFITS ON SUCH PURCHASES COVERING THE GP DIFFERENCE BETWEEN T HE PURCHASES MADE FROM MANOJ MILLS, ASTHA SILK INDUSTRIES AND SH REE RAM SALES & SYNTHETICS AND OTHER PARTIES AND OTHER LEAKAGE OF R EVENUE, IF ANY. IN THIS CASE, THE DISPUTE IS LIMITED TO PURCHASES FROM AFORESAID THREE PARTIES AND ENTIRE DISALLOWANCE OF PURCHASES FROM T HESE PARTIES CANNOT BE SUSTAINED FOR REASONS DISCUSSED IN HEREINABOVE A ND IN PRECEDING PARAS. THE JUDICIAL PRONOUNCEMENTS RENDERED BY HON BLE HIGH COURT AND HONBLE I.T.A.T RELIED UPON BY THE ASSESSEE AS REPRODUCED IN PARA 3.3 OF THIS ORDER DID NOT UPHELD THE ADDITION IN GI VEN FACTS. HOWEVER, THE DECISIONS OF DIFFERENT 5 COMMISSIONERS OF INCOM E-TAX (APPEALS) AS RELIED UPON BY THE LD. A.R. AND SUMMARY REPRODUCED IN PARA 3.4 OF THIS ORDER ARE BASED ON IDENTICAL FACTS I.E. PURCHASES F ROM THESE PARTIES ONLY AND THEREFORE I AM OF THE CONSIDERED VIEW THAT THE SAME SHOULD BE FOLLOWED WHICH TAKES CARE OF LEAKAGE, IF ANY. ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 10 4.2 IN LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE DISCUSSED HEREINABOVE AND JUDICIAL DECISIONS AND ORDERS OF DI FFERENT COMMISSIONERS OF INCOME-TAX (APPEALS) RELIED UPON B Y THE ASSESSEE, ESTIMATE OF PROFIT @ 10% OF DISPUTED PURCHASES WILL BE FAIR AND REASONABLE TO COVER UP THE DIFFERENCE OF GP OF PURC HASES FROM MANOJ MILLS, ASTHA SILK INDUSTRIES AND SHREE RAM SALES & SYNTHETICS AND FROM OTHER PARTIES AS WELL AS TO PLUG ANY LEAKAGE O F REVENUE. THEREFORE, ADDITION @ 10% OF DISPUTED PURCHASES I.E. RS. 3,42, 452/- (ROUNDED OFF TO RS. 3.43,000/-) IS CONFIRMED AND BALANCE AMOUNT OF ADDITION IS DELETED. IN TERMS OF DISCUSSION MADE AS ABOVE, THE ASSESSEE GETS PARTIAL RELIEF ACCORDINGLY. THE LD. CIT(A) THUS RESTRICTED THE ADDITION MADE BY THE A.O. ON ACCOUNT OF UNPROVED PURCHASES/INVESTMENTS TO 10% OF THE DISPUT ED PURCHASES IN A.Y. 2007-08 AND FOLLOWED THE SAID ORDER IN THE REMAININ G ASSESSMENT YEARS I.E 2005-06, 2006-07 AND 2008-09 TO RESTRICT THE ADDITI ONS TO 10% DISPUTED PURCHASES. AGGRIEVED BY THE ORDERS OF THE LD. CIT(A ), THE ASSESSEE AND REVENUE BOTH ARE IN APPEALS BEFORE US. 6. THE ADDITION TO GROUND NO. 1 RAISED ORIGINALLY INN ITS APPEAL ON THIS ISSUE, THE REVENUE HAS ALSO RAISED A COMMON ADDITIO NAL GROUND IN ITS APPEALS FOR ASSESSMENT YEARS 2006-7, 2007-08 & 2008-09 WHIC H READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) AFTER HAVING ACCEPTED THE FACT THAT THE PURCHASE MADE FRO M OR THROUGH SHRI RAKESH KUMAR GUPTA AND HIS FAMILY MEMBERS ARE BOGUS , ERRED IN LAW IN NOT CONFIRMING THE ADDITION AT LEAST TO THE EXTENT OF PEAK OF THE PURCHASES MADE FROM SUCH PARTIES ON ACCOUNT OF BOGUS PURCHASE S MADE IN CASH FROM THE OPEN MARKET OUT OF UNACCOUNTED CASH, IN VI EW OF THE DECISION HELD IN AHMEDABAD HONBLE ITATS C- BENCH DECIDED I N THE CASE OF VIJAY PROTEINS LTD. VS. ACIT 58 ITD 428. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT A SIMILAR ISSUE INVOLVING IDENTICAL FACTS HAS ALREADY BEEN CONSIDER ED AND DECIDED IN FAVOUR OF THE ASSESSEE BY THE MUMBAI I BENCH OF THIS TRIBUN AL IN THE CASE OF JEETENDRA HARSHADKUMAR TEXTILES (ITA NO. 771 & 2211 /MUM/2011 DATED 21- 11-2012) VIDE PARA 8 & 8.1 WHICH READ AS UNDER:- ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 11 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT WILL BE RELEVANT TO REPRODUCE THE LETTER RECEIVED BY THE AO FROM SHRI RAKESH KUMAR GUPTA, W HICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER: 1 AM IN RECEIPT OF YOUR SUMMONS U/S. 131 OF THE I. T.ACT. 1961 IN THE CASE OF M/S. JITENDRA HARSHAD KUMAR TEX TILE PVT. LTD. ASKING ME TO ATTEND BEFORE YOUR GOODSELF WITH THE DETAILS OF MY ACCOUNT WITH THE SAID M/S. JITENDRA HARSHAD KUMA R TEXTILE PVT. LTD. FOR A.Y.2002-03 & 2007-08. AS YOU ARE AWARE THAT MY ASSESSING OFFICER HAD RECO RDED ALLEGED STATEMENT U/S. 133A AND 131 OF THE I.T.ACT. 1961 1 HAVE BEEN RECEIVING WITNESS SUMMONS FROM ALL FOUR CORNERS OF THE CITY O N THE GROUND THAT I HAVE GIVEN ACCOMMODATION BILL, THOUGH I HAVE DENIED THE CONTENT OF THE STATEMENTS RECORDED BY A.O. U/S. 133A & 131 VIDE MY LETTER DATED 27.4.2009 AND MY AFFIDAVIT DATED 20.2.2009 SUBMITTE D TO WARD 14(3)(2). IT IS PHYSICALLY IMPOSSIBLE FOR ME TO ATTEND BEFORE VARIOUS INCOME TAX AUTHORITIES, AS I AM NOT FEELING WELL, IT WILL NOT POSSIBLE FOR ME TO ATTEND BEFORE YOUR GOODSEIF IN RESPONSE TO YOUR ABOVE MENT IONED SUMMONS. AS REGARDS M/S. JITENDRA HARSHAD KUMAR TEXTILES PVT . LTD. IS CONCERNED. I HAVE ALREADY GIVEN MY AFFIDAVIT WHEREI N I HAVE SPECIFICALLY STATED THAT I HAVE SOLD THE GOODS TO M/S. JITENDRA HARSHAD KUMAR TEXTILES P. LTD. AND THE CONSIDERATION IS RECEIVED TO ME BY CROSS ORDER CHEQUE. COPY OF THE SAID LEDGER ACCOUNT IS ALREADY SUBMITTED THE DEPARTMENT. 8.1 FROM THE ABOVE LETTER IT IS CLEAR THAT THE SAME WAS WRITTEN IN RESPONSE TO NOTICE ISSUED BY THE AO. NOT ONLY SHRI RAKESH KUMAR GUPTA HAS STATED THAT HE HAS RETRACTED FROM THE STA TEMENT RECORDED DURING THE SURVEY BUT ALSO FILED AN AFFIDAVIT DATED 20/2/2009 AND LETTER DATED 27/4/2009 TO DENY THE STATEMENT MADE DURING T HE SURVEY UNDER SECTION 133A. HE HAS FURTHER CONFIRMED THAT THE S ALES MADE BY THE ASSESSEE WERE EFFECTED AND THE CONSIDERATION WAS RE CEIVED BY CROSS ORDER CHEQUES. THUS IT IS CLEAR THAT THERE IS NO M ATERIAL ON RECORD TO SAY THAT THE PURCHASES MADE BY THE ASSESSEE FROM T HE SAID CONCERN WERE BOGUS EXCEPT THE GENERAL STATEMENT RECORDED B Y THE DEPARTMENT IN THE CASE OF SHRI RAKESH KUMAR GUPTA, WHICH WAS L ATER ON RETRACTED. IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD AGAIN ST THE SUBMISSIONS MADE BY SHRI RAKESH KUMAR GUPTA IN HIS LETTER DATED 20/12/2009 FILED BEFORE THE AO OF THE ASSESSEE THE ADDITION , IF ANY, MADE IN THE CASE OF THE ASSESSEE WILL BE BASED ON PRESUMPTION O NLY AND IT CANNOT BE SUSTAINED IN THE EYES OF LAW. AS AGAINST THAT ASSE SSEE HAS SUBMITTED VARIOUS EVIDENCES TO SHOW THAT THE ACTUAL DELIVERY OF THE GOODS WAS RECEIVED BY THE ASSESSEE FROM THE SAID PARTY WHICH HAS NOT BEEN DISCARDED BY THE AO. THE ADDITION SUSTAINED BY LD. CIT(A) IS ALSO ON PRESUMPTION BASIS. THEREFORE, KEEPING IN VIEW THE FACTS AND ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 12 CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT ADDITIONS MADE BY THE AO DESERVES TO BE DELETED IN ITS ENTIRETY. WE DECIDE ACCORDINGLY. 8. THE ABOVE DECISION OF THE TRIBUNAL IN THE CASE O F JEETENDRA HARSHADKUMAR TEXTILES HAS BEEN SUBSEQUENTLY FOLLOWE D BY THE TRIBUNAL TO DECIDE A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF M/S PRAMIT TEXTILES VS. ITO (ITA NO. 3948 TO 3953/MUM/2012 AND ITA NO. 4012 TO 4015 AND 4020 TO 4021/MUM/2012 DATED IST OCTOBER, 2013). AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WELL AS ALL THE MATERIAL FAC TS RELEVANT THERETO ARE SIMILAR TO THE CASE OF JEETENDRA HARSHADKUMAR TEXTILES AND M/S PRAMIT TEXTILES (SUPRA), WE RESPECTFULLY FOLLOW THE ORDERS OF THE C O-ORDINATE BENCHES OF THIS TRIBUNAL IN THE SAID CASES AND DELETE THE ENTIRE AD DITION MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED/UNPROVED PURCHASES IN ALL TH E FOUR YEARS UNDER CONSIDERATION. GROUND NO. 1 OF ASSESSEES APPEAL F OR ASSESSMENT YEARS 2005- 06, 2006-07, 2007-08 & 2008-09 IS ACCORDINGLY ALLOW ED WHEREAS GROUND NO. 1 OF THE REVENUES APPEAL FOR ASSESSMENT YEARS 2006 -07, 2007-08 AND 2008- 09 IS DISMISSED. 9. IN GROUND NO. 2 OF ITS APPEAL FOR ASSESSMENT YE ARS 2007-08 & 2008-09, A COMMON ISSUE RAISED BY THE ASSESSEE RELATES TO TH E DISALLOWANCE U/S 14A READ WITH RULE 8-D OF THE ACT AMOUNTING TO RS. 66,7 15/- AND RS. 1,28,413/- RESPECTIVELY MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A). 10. DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMEN T YEARS 2007-08 & 2008-09, THE ASSESSEE HAD RECEIVED EXEMPT INCOME (I N THE FORM OF DIVIDEND AND LONG TERM CAPITAL GAIN) AMOUNTING TO RS. 1,48,5 20/- AND RS. 2,07,167/- RESPECTIVELY. NO DISALLOWANCE ON ACCOUNT OF EXPEND ITURE INCURRED IN RELATION TO THE SAID EXEMPT INCOME, HOWEVER, WAS MADE BY THE ASSESSEE AS REQUIRED BY THE PROVISIONS OF SECTION 14A OF THE ACT. AS NOTED BY THE A.O. IN THIS REGARD, INTEREST EXPENDITURE OF RS. 14.09 LACS AND RS. 15.7 8 LACS WAS INCURRED BY THE ASSESSEE IN ASSESSMENT YEARS 2007-08 AND 2008-09 RE SPECTIVELY ON THE UNSECURED LOANS RAISED. THE A.O., THEREFORE, PROCEE DED TO COMPUTE THE ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 13 EXPENSES INCURRED BY THE ASSESSEE IN RELATION TO TH E EARNING OF EXEMPT INCOME BY APPLYING RULE 8-D AT RS. 66,715/- AND RS. 1,28,4 13/- FOR ASSESSMENT YEARS 2007-08 & 2008-09 RESPECTIVELY AND MADE A DIS ALLOWANCE TO THAT EXTENT U/S 14-A OF THE ACT. ON APPEAL, THE LD. CIT(A) CON FIRMED THE SAID DISALLOWANCE MADE BY THE A.O. IN ASSESSMENT YEARS 2 007-08 AND 2008-09 OBSERVING THAT THE SAME WAS QUITE REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MFG. CO. LTD . (194 TAXMAN 203), RULE 8-D IS APPLICABLE PROSPECTIVELY FROM A.Y. 2008-09. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) C ONFIRMING THE DISALLOWANCE MADE BY THE A.O. U/S 14-A OF THE ACT FOR A.Y. 2008- 09 BY APPLYING RULE 8-D OF THE INCOME TAX RULES, 1962. IN SO FAR AS A.Y. 2 007-08 IS CONCERNED, THE DISALLOWANCE U/S 14A IS REQUIRED TO BE MADE ON SOME REASONABLE BASIS AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF GODREJ BOYCE MFG. CO. LTD. (194 TAXMAN 203). IN THIS REGARD, THE LD. CIT(A) HAS HELD THAT THE DISALLOWANCE OF RS. 66,715/- MADE BY THE A.O. IN A. Y. 2007-08 ON THE BASIS GIVEN IN RULE 8-D IS QUITE REASONABLE HAVING REGARD TO ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND NOTHING HAS BEEN BROU GHT ON RECORD BEFORE US TO DISPUTE OR CONTROVERT THIS POSITION. WE, THEREF ORE, UPHOLD THE IMPUGNED ORDERS OF THE LD. CIT(A) CONFIRMING THE DISALLOWANC E MADE BY THE A.O. U/S 14A OF THE ACT FOR BOTH THE YEARS UNDER CONSIDERATION I .E ASSESSMENT YEARS 2007- 08 & 2008-09 AND DISMISS GROUND NO. 2 OF ASSESSEES APPEAL FOR THE SAID YEARS. 12. IN THE RESULT, APPEALS OF THE ASSESSEE FOR A.Y . 2005-06 & 2006-07 ARE ALLOWED, APPEALS OF THE ASSESSEE FOR A.Y. 2007-08 A ND 2008-09 ARE PARTLY ALLOWED AND APPEALS OF THE REVENUE FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 ARE DISMISSED. ITA 3141/M/12, 4349/M/12, 3142/M/12, 3143/M/12 4350/M/12, 3144/M/12 & 4351/M/12 M/S JIT ENDRA HARSHAD KR. & CO. 14 ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2013. . '5 2 34- 6'(7 13-11-2013 4 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; 6'( DATED 13-11-2013 $.)(.!./ RK , SR. PS '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. ; () / THE CIT(A)20, MUMBAI. 4. ; / CIT 9,, MUMBAI 5. 9$> 0))( , , / DR, ITAT, MUMBAI J BENCH 6. %, ? / GUARD FILE. '5(! '5(! '5(! '5(! / BY ORDER, !19 0) //TRUE COPY// @ @ @ @/ // /!A !A !A !A ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI