ACE INDIA MEDICAL SYSTEMS, Kota V. ACIT, Kota

ITA 485/JPR/2012

• Counselvise Citation: 48523114 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Assessee Lawyers: S K GOGRA; S S GOGRA
• Keywords: Business income; Depreciation; Loose papers; Speculation loss
• Section: 142(1); 133A; 43(5); 131; 68; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 485/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 ACE INDIA MEDICAL SYSTEMS, ARYA SAMAJ ROAD, 1 ST FLOOR, BEHIND CENTRAL BANK OF INDIA, KOTA (RAJ). CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, KOTA (RAJ.) LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAOFM 0273 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 561/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, KOTA. CUKE VS. ACE INDIA MEDICAL SYSTEMS, ARYA SAMAJ ROAD, 1 ST FLOOR, BEHIND CENTRAL BANK OF INDIA, RAMPURA, KOTA (RAJ). LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAOFM 0273 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI S.S. GOGRA (ADV) & SHRI S.K. GOGRA (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : MRS. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/06/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 11/08/2015 ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 2 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THESE ARE CROSS APPEALS, ONE BY THE ASSESSEE AND AN OTHER BY THE REVENUE ARISE AGAINST THE ORDER DATED 27/03/201 2 PASSED BY THE LEARNED C.I.T.(A), KOTA FOR THE A.Y. 2008-09. THE GRO UNDS OF ASSESSEES AS WELL AS REVENUES ARE AS UNDER:- GROUND OF ITA NO. 485/JP/2012 1 THAT THE LEARNED A.O. ERRED ON LAW AND FACTS IN DO ING THE ASSESSMENT EX PARTE U/S 144 AND THE LEARNED CIT(APPEALS) HAS ALSO GROSSLY ERRED IN SUSTAINING TH E SAME WHEREAS THE ASSESSEE HAS SUBMITTED ALL THE PAPE RS, DETAILS, PRODUCED BOOKS OF ACCOUNTS, HENCE THE ASSESSMENT SHOULD BE HELD NULL AND VOID. 2. THAT THE LEARNED A.O. GROSSLY ERRED IN MAKING TRA DING ADDITION OF RS. 9,48,532/- BY TAKING G.P. ON ESTIMA TED BASIS WITHOUT LOOKING INTO THE AUDITED TRADING AND P ROFIT AND LOSS ACCOUNT. FURTHERMORE, THE LEARNED CIT(APPEALS) DEALT WITH THE SAID ADDITION AND AFTER DISCUSSIONS ADDITION WAS ENHANCED BY RS. 1,92,538/- AND INCREASED TO 11,41,070/- BY DISALLOWING THE PART OF THE LOSS SUSTAINED IN SHARE TRADING BY QUOTING SEC. 73 OF THE I.T. ACT. 3. THAT THE LD CIT(A) GROSSLY ERRED ON LAW AND FACTS I N DISALLOWING THE LOSS IN SHARE TRADING RS. 11,41,070/ - AND THEREBY ENHANCING THE TAXABLE INCOME AND INITIATING PENALTY PROCEEDINGS SEPARATELY. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 3 4. THAT THE LEARNED A.O. GROSSLY ERRED ON FACTS AND ON LAW IN MAKING THE ADDITION TOWARDS SUNDRY CREDITORS AND THE LEARNED CIT(APPEALS) ERRED IN SUSTAINING THE ADDITIO N OF RS. 3,19,611/-. 5. THAT THE LEARNED A.O. GROSSLY ERRED ON FACTS AND ON LAW IN MAKING ADDITION IN RELATION TO UNSECURED LOANS R S. 3,00,000/- IN THE NAME OF GERA MEDICALS AND THE LEA RNED CIT (APPEALS) ALSO GROSSLY ERRED IN SUSTAINING THE S AID ADDITION. 6. THAT THE LEARNED A.O. GROSSLY ERRED ON FACTS AND ON LAW IN MAKING ADDITION OF COMPLETE MISCELLANEOUS EXPENDITURE OF RS. 15,12,001/- ON UNHEALTHY DISCUS SION AND THE LEARNED CIT(APPEALS) ALSO GROSSLY ERRED IN SUSTAINING THE SAME BY MARKING THAT THE ASSESSEE DI D NOT PRODUCE THE BOOKS OF ACCOUNTS. 7. THAT THE LEARNED CIT(APPEALS) GROSSLY ERRED IN INI TIATING PENALTY PROCEEDINGS U/S 271(1)(C) BY TREATING THE L OSS DISALLOWED BY HIM AS CONCEALED INCOME RS. 11,41,070/ -. GROUND OF ITA NO. 561/JP/2012 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A), KOTA HAS ERRED IN:- I) DELETING ADDITION OF RS. 14,92,848/- OUT OF TOTA L ADDITION OF RS. 18,12,459/- BEING UNEXPLAINED SUNDRY CREDITO RS IN SPITE OF THE FACT THAT THE ASSESSEE HAS NOT FILED A ND CONFIRMATION OF THE CASH CREDITORS, THEREFORE, GENU INENESS OF THE TRANSACTION ANY CREDITWORTHINESS OF CREDITORS NOT PROVED; ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 4 II) DELETING DISALLOWANCE OF RS. 3,44,763/- OUT OF S ALARY EXPENSES SINCE THE ASSESSEE HAD NOT SURRENDERED ANY PART OF CASH FOUND DURING THE COURSE OF SURVEY ON A CCOUNT OF BOGUS SALARY; III) DELETING ADDITION OF RS. 14,83,182/- TO BE FIX ED ASSETS DESPITE OF THE FACT THAT THE ASSESSEE FAILED TO PRO DUCE BOOKS OF ACCOUNT, VOUCHERS ETC. IN SUPPORT OF INVES TMENT IN FIXED ASSETS AND COULD ALSO NOT EXPLAIN THE SOUR CES OF THIS INVESTMENT. 2. THE 1 ST GROUND OF THE ASSESSEES APPEAL IS AGAINST DECIDIN G THE CASE EX PARTE U/S 144 OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED AS THE ACT) BY THE ASSESSING OFFICER AND C ONFIRMED BY THE LD CIT(A). THE LD ASSESSING OFFICER OBSERVED THAT THE A SSESSEE FILED RETURN ON 13/10/2008 DECLARING TOTAL INCOME OF RS. 5,66,89 0/- COMPRISING OF INCOME FROM RETAIL TRADING OF SURGICAL ITEMS. THE CASE WAS SELECTED FOR SCRUTINY. THE LD ASSESSING OFFICER ISSUED FIRST NOTI CE ON 20/11/2008, WHICH WAS SERVED ON THE ASSESSEE ON 21/11/2008. THE AS SESSEE WAS ASKED TO FURNISH ALL THE NECESSARY DETAILS INCLUDIN G COPY OF AUDIT REPORT ALONGWITH ANNEXURES. ON THE DATE OF HEARING, NONE AT TENDED NOR WRITTEN SUBMISSIONS ANY ADJOURNMENT SOUGHT. HOWEVER, AN APPLICATION WAS RECEIVED ON 05/12/2008 FOR WANT OF SINE DIE ADJOU RNMENT WHEREIN THE FOLLOWING HAS BEEN STATED: ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 5 THIS IS TO INFORM YOU THAT WE ARE BUSY IN OUR BUSINE SS. THE BUSINESS OF FARMA IS GAINING MOMENTUM IN WINTER SEAS ON. WE THEREFORE, REQUEST YOU TO ADJOURN THE CASE SINE DIE. THE LD ASSESSING OFFICER FURTHER OBSERVED THAT THE A SSESSEE AGAIN REQUESTED VIDE LETTER DATED 04/6/2009 TO FURNISH AU DIT REPORT ALONGWITH SUPPORTING DOCUMENTS IN RESPECT OF ITS DECLARED INC OME AND CASE WAS FIXED FOR 07/06/2009. LATER ON, THE ASSESSEES CASE WAS TRANSFERRED TO ITO, WARD 2(1), KOTA TO ACIT, CIRCLE-2, KOTA, THEREFO RE, NOTICE U/S 142(1) OF THE ACT WAS ISSUED AGAIN ON 30/08/2010 FI XING THE CASE FOR HEARING ON 09/09/2010, WHICH WAS DULY SERVED UPON THE ASSESSEE ON 30/08/2010. ON THE DATE OF HEARING, NONE ATTENDED N OR WAS ANY ADJOURNMENT SOUGHT FROM THE ASSESSEE. HOWEVER, THE A SSESSEE HAD SENT ADJOURNMENT APPLICATION THROUGH REGISTERED POS T WHICH WAS RECEIVED IN HIS OFFICE ON 06/09/2010 BY WHICH ADJOUR NMENT WAS SOUGHT AT LEAST FOR 20 DAYS AS THE CONSULTANT WAS OUT OF S TATION. THEREAFTER, AGAIN NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE O N 08/09/2010 FIXING THE CASE FOR HEARING ON 21/09/2010. ON THE D ATE OF HEARING I.E. 21/09/2010 ALSO, NONE ATTENDED NOR ANY ADJOURNMENT SOUGHT. THEREAFTER ON 04/10/2010, ASSESSEE FURNISHED COPY OF AUDIT REPORT ALONGWITH COPY OF COMPUTATION OF INCOME AND COPY OF I.T. RETURN ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 6 FOR A.Y. 2008-09. THEREAFTER, ASSESSEE HAS AGAIN SO UGHT ADJOURNMENT VIDE APPLICATION DATED 08/10/2010 STATING THEREIN T HAT THE ASSESSEE IS CELEBRATING NAVRATRA AND FOR THAT HE IS OUT OF STAT ION. CONSIDERING THE ASSESSEES ADJOURNMENT APPLICATION, CASE IS AGAIN F IXED AND DULY INFORMED TO THE ASSESSEE FOR 14/10/2010. ON 14/10/2 010, NONE ATTENDED NOR ANY ADJOURNMENT SOUGHT. THEREAFTER, AGA IN NOTICE U/S 142(1) ALONGWITH QUESTIONNAIRE WAS ISSUED TO THE ASSE SSEE ON 10/11/2010 FIXING THE CASE FOR HEARING ON 18/11/201 0 WHICH WAS SENT THROUGH REGISTERED POST. ON THE DATE OF HEARING I.E . 18/11/2010, PARTLY SUBMISSIONS WERE FILED BY THE ASSESSEE. THEREAFTER V IDE HIS OFFICE LETTER DATED 10/12/2010, THE ASSESSEE WAS SPECIFICALLY INFO RMED TO SUBMIT THE COMPLETE DETAILS AND INFORMATION ALONGWITH BOOKS OF ACCOUNTS, BILLS, VOUCHERS AND OTHER RELEVANT DETAILS/DOCUMENT S WHICH WERE FOUND AT THE TIME OF SURVEY, AS PER ANNEXURE-A. THE CASE WA S FIXED FOR 16/12/2010. THE LD ASSESSING OFFICER REPRODUCED THE QUESTIONNAIRE ISSUED TO THE ASSESSEE ON PAGE 2 TO 4 OF THE ASSESS MENT ORDER. ON 16/12/2010, AGAIN PARTLY REPLY WAS FURNISHED BY THE ASSESSEE BUT COULD NOT PRODUCE BOOKS OF ACCOUNT, BILLS, VOUCHERS AND O THER RELEVANT DETAILS/DOCUMENTS. THEREFORE, THE ASSESSMENT PROCEE DINGS COULD NOT BE PRECEDED. THE LD A.O. HAD GIVEN NUMBER OF OPPORTU NITIES TO ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 7 THE ASSESSEE EVEN THEN A FINAL OPPORTUNITY WAS GIVEN VIDE SHOW CAUSE NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 22/12/201 0 FIXING THE CASE FOR HEARING ON 27/12/2010 ON WHICH IT WAS SPECIFICALL Y INFORMED THAT NON-COMPLIANCE OF THE AFORESAID NOTICE TILL 10.00 A M ON 27/12/2010 WOULD RESULT IN EX PARTE ASSESSMENT AS WELL AS INITIA TION OF PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT. THE EXTRACT OF LETTER OF ASSESSING OFFICER REPRODUCED ON PAGE NO. 4-5 OF THE ASSESSMEN T ORDER. ON 27/12/2010 AT THE GIVEN TIME, NO ONE ATTENDED NOR A NY REPLY RECEIVED FROM THE ASSESSEE. HOWEVER, AT 2.30 PM ON THIS DATE, THE ASSESSEE SUBMITTED MORE OR LESS SAME REPLY AS ALREADY FILED ON 18/11/2010 BUT NOT PRODUCED BOOKS OF ACCOUNT AND OTHER INCRIMINATI NG DOCUMENTS AND LOOSE PAPERS AS PER ANNEXURE-A, AS IMPOUNDED AT THE TIME OF SURVEY AND RETURNED BACK TO THE ASSESSEE ON THE SAME DAY. WHEN THE ASSESSEE WAS NOT COOPERATIVE WITH ASSESSING OFFICER, HE DECIDED TO PASS ORDER U/S 144 OF THE ACT AS AN EX PARTE ORDER. BEING A MATTER GETTING TIME BARRED ON 31/12/2010 BY RELYING ON THE DECISION GIVEN IN THE CASE OF MOTOR GENERAL FINANCIAL VS. CIT 254 ITR 4 49 (DEL.). CONSIDERING THE ABOVE FACTS, WHICH ARE FILED ALONGWIT H THE RETURN, PAST HISTORY OF THE ASSESSEE, THE ASSESSMENT WAS COMPLETE D U/S 144 OF THE ACT. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 8 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD DISMISSED THE ASSESSEES GROUND BY OBSERVING THAT THERE WAS A SURVEY U/S 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 12/10/2007. VARIOUS BOOKS OF ACCOUNT AND DOCUMENTS WERE FOUND DU RING THE COURSE OF SURVEY WERE INVENTORISED. DURING THE COURSE OF HE ARING BEFORE THE ASSESSING OFFICER, THE ASSESSEE DID NOT PRODUCE BOO KS OF ACCOUNT OR OTHER DOCUMENTS INVENTORISED DURING THE SURVEY. THE ASSESSEE FAILED TO COMPLY TO THE REQUIREMENT OF NOTICE U/S 143(2) AND 142 OF THE ACT AND THEREFORE, AS PER PROVISIONS OF SECTION 144(1)(B)(C ), THE ASSESSING OFFICER RIGHTLY PASSED ORDER U/S 144 OF THE ACT. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US ON THIS G ROUND. THE LD AR OF THE ASSESSEE REITERATED THE ARGUMENTS MADE BE FORE THE LD CIT(A) AND SUBMITTED THAT THE ASSESSEE HAD COMPUTERIZED BO OKS OF ACCOUNT AND HAD SUBMITTED ALL THE PAPERS, DETAILS PRODUCED PRINTOUTS OF LEDGER ACCOUNTS MAINTAINED IN COMPUTER SYSTEM TO LD ASSESS ING OFFICER ON 27/12/2010 AND ALSO BEFORE THE CIT(A) ON 24/1/2012 A S EVIDENT FROM THE SUBMISSIONS MADE TO THEM. THE COPIES OF THE LETT ERS DATED 27/12/2010 AND 24/1/2012 HAS BEEN ANNEXED, THEREFOR E, LD AR ARGUED ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 9 THAT FRAMING OF THE ASSESSMENT U/S 144 OF THE ACT M AY PLEASE TO DECLARED AS NULL AND VOID. ALL THESE DETAILS REQUIR ED BY THE ASSESSING OFFICER WAS SUBMITTED IN DETAIL ON 27/12/2010, WHICH HAS NOT BEEN CONSIDERED BY HIM. HE RELIED ON THE FOLLOWING DECISI ONS:- (I) 1978, 115, ITR 524 SUPREME COURT (II) 1966, 60 ITR 239 SUPREME COURT (III) 1970, 76 ITR 690 SUPREME COURT. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LOWER AUTHORITY THAT THE ASSESSEE WAS NON-COOPERA TIVE FOR TWO YEARS FROM THE DATE OF FIRST NOTICE ISSUED BY THE A SSESSING OFFICER TILL THE ASSESSMENT BARRED BY LIMITATION I.E. 30/12/2010 . EVEN THE ASSESSEES SUBMISSION PRESUMED TO BE CORRECT THAT H E HAS FURNISHED DETAILS BEFORE THE ASSESSING OFFICER ON 27/12/2010, IT SHOWS THAT THE ASSESSEES INTENTION NOT TO BE INVESTIGATED OR SCRU TINIZED THE CASE IN PROPER SENSE OF SCRUTINY. THEREFORE, THIS GROUND MA Y PLEASE BE DISMISSED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND GO NE THROUGH THE CASE LAW. THE ASSESSEES ATTITUDE WAS TOTALLY NON-COOP ERATIVE WITH THE DEPARTMENT AS EVIDENT FROM THE NUMBER OF DATES FOR HEARING GIVEN BY ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 10 THE ASSESSING OFFICER. THE ASSESSEE HAD NEVER PRODUC ED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER AS CLAIMED BY HIM, WHICH HAS BEEN CONFIRMED BY THE LD CIT(A). BOTH THE AUTHORITIE S CANNOT BE HELD IRRESPONSIBLE WHEN ASSESSEES CONDUCT SHOWS THAT HE H AD NOT PRODUCED BOOKS OF ACCOUNT IN GIVEN TIME BEFORE THE ASSESSING OFFICER. THE ASSESSEES CLAIMED THAT HE HAD SUBMITTED BOOKS OF A CCOUNT ON 27/12/2010 DOES NOT SERVE ANY PURPOSE AS THE CASE WA S GOING TO BARRED BY LIMITATION ON 30/12/2010, THEREFORE, THE ASSESSEES GROUND OF APPEAL IS DISMISSED. 7. THE 2 ND AND 3 RD GROUND OF ASSESSEES APPEAL IS AGAINST ESTIMATING THE G.P. AND ENHANCED BY THE LD CIT(A) BY RS. 1,92,5 38/- AND INCREASED TO 11,41,070/-. THE LD ASSESSING OFFICER O BSERVED THAT THE ASSESSEE HAS CLAIMED TRADING EXPENSES AT RS. 3,07,8 58/- AND CLAIMED GROSS LOSS OF RS. 4,89,312/-. THE ASSESSEE WAS ASKED TO FURNISH THE EVIDENCES OF TRADING EXPENSES OF RS. 3,07,858/- ON VARIOUS DATES BUT THE ASSESSEE HAD FURNISHED COPY OF ACCOUNT, WHICH WA S NOT SUFFICIENT TO EXPLAIN THE EXPENSES. HOWEVER, IT HAS BEEN HELD T HAT BUSINESS LOSS OF RS. 4,89,312/-, WHICH WAS ASKED TO CLARIFY BY THE ASSESSING OFFICER ON DIFFERENT DATES ALONGWITH EVIDENCES. THE ASSESSEE HAS FILED PARTLY ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 11 REPLY TO THE ASSESSING OFFICER AND ONLY EXPLANATION WAS THAT THIS GROSS LOSS WAS AS PER AUDIT REPORT AND ACCOUNTS BOOK. SINC E THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS RELEVANT TO THE FACTS WE RE ALSO NOT PRODUCED FOR VERIFICATION. THE ASSESSEE WAS ALSO ASK ED TO FURNISH HEAD WISE AS WELL AS QUANTITY WISE AND QUALITY WISE INVENTOR IES OF PURCHASES AND SALES BUT NO SUCH INVENTORY WAS FURNISHED AT THE ENDING REPLY DATED 27/12/2010. THE LD ASSESSING OFFICER ASKED TO FURNISH TWO TRADING ACCOUNTS FROM 01/4/2007 TO 12/10/2007 (TILL THE DATE OF SURVEY) AND FROM 13/10/2007 TO 31/3/2008, SEPARATEL Y. BUT THE SAME WAS NOT SUBMITTED BEFORE THE ASSESSING OFFICER. HE S IMPLY STATED THAT DURING THE COURSE OF SURVEY PROCEEDINGS THE TRIAL B ALANCE AND STOCK DETAILS TILL 12/10/2007 WAS PROVIDED TO THE DEPARTME NT. THEREFORE, IN ORDER TO PROVIDE THE BIFURCATED DETAILS HE REQUESTE D THE ASSESSING OFFICER TO PROVIDE IT THE COPY OF THESE DOCUMENTS. THE ASSESSEE DID NOT RETAIN COPY OF THEM, THEREFORE, IT HAS ATTACHED FUL L TRADING AND P&L ACCOUNT. THE LD ASSESSING OFFICER OBSERVED THAT DURI NG THE COURSE OF SURVEY PROCEEDINGS, THE COMPUTERIZED TRIAL BALANCE AND STOCK REGISTER PREPARED AND SAME WAS PROVIDED ITSELF BY THE PARTNER S OF THE FIRM, WHICH WERE DULY SIGNED BY SHRI MURLI MANOHAR GUPTA, O NE OF THE PARTNER OF THE FIRM AND INCRIMINATING DOCUMENTS IMP OUNDED DURING THE ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 12 COURSE OF SURVEY HAD BEEN RETURNED BACK ON THE SAME DATE TO THE ASSESSEE. THEREFORE, THE LD ASSESSING OFFICER HAS N OT FOUND THE ASSESSEES REPLY CONVINCING BUT BEYOND THE TRUTH. A CCORDINGLY HE DECIDED THE ASSESSEES SALE AT RS. 13.25 CRORES AGA INST THE SALE DECLARED IN TRADING ACCOUNT AT RS. 13,13,70,013/- A ND RECASTED THE TRADING ACCOUNT AND GROSS PROFIT WAS CALCULATED AT R S. 9,48,532/- AND THE SAME WAS ADDED IN THE INCOME OF THE ASSESSEE. 8. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DECIDED THE ASSESSEES APPEAL BY ENHANCING THE ADDITION AT RS. 1,92,538/- BY OBSERVING THAT ON VERIFICATION OF BOOKS OF ACCOUNT, IT WAS NOTICED BY HIM THAT THE TURNOVER OF ASSESSEE INCLUDED SALE OF SHARES AND STOCK OPTION (DERIVATIVES). THE ASSESSEE PURCHASED AND SOL D SHARES OF RS. 8,28,80,996/- AND RS. 7,77,80,690/- THE OPENING STO CK WAS NIL AND CLOSING STOCK WAS RS. 2,75,400/-. THE ASSESSEE HAD CL AIMED EXPENSES OF RS. 74,521/- RELATED TO SHARE BUSINESS. THE ASSES SEE HAD CLAIMED LOSS OF RS. 48,24,906/- ON SALE OF SHARES. IT WAS SE EN BY THE LD CIT(A) THAT THE TRANSACTIONS WERE SQUARED UP WITHOUT ACTUAL DELIVERY AND AS PER THE DETAILS FILED BY ASSESSEE ITSELF THE LOSS O F SQUARED UP ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 13 TRANSACTIONS (WITHOUT DELIVERY) COMES TO RS. 11,41,0 70/-. THE ASSESSEE VIDE ORDERSHEET ENTRY DATED 20/03/2012 WAS ASKED TO SHOW CAUSE U/S 251(2) WHY RS. 11,41,070/- SHOULD NOT BE TREATED AS SPECULATION LOSS AND DISALLOWED U/S 73 OF THE ACT BY THE LD CIT(A). TH E ASSESSEE REPLIED VIDE LETTER DATED 23/03/2012, WHICH HAS BEEN REPROD UCED BY THE LD CIT(A) ON PAGE NO. 6 OF HIS ORDER. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD CIT(A) HELD THAT PROVISIONS OF SECTIO N 43(5)(D) OF THE ACT ARE APPLICABLE ONLY ON DERIVATIVES TRADING (FUTURE & OPTIONS) AND NOT ON TRADING OF SHARES.. THE ASSESSEE HAD INCURRED LOS S OF RS. 11,41,070/- FROM TRADING OF SHARES WITHOUT ANY DELIV ERY, THEREFORE THE SAME WAS FOUND BY HIM AS SPECULATION LOSS AND ACCORD INGLY, DISALLOWED U/S 73 OF THE ACT. AFTER REDUCING LOSS OF SHARE TRA DING, THE ASSESSEES PROFIT FROM MEDICAL BUSINESS CAME TO RS. 43,35,594/ - ON A TURNOVER OF RS. 4,96,19,004/- GIVING G.P. RATE OF 8.74%. THE GRO SS PROFIT RATE OF 8.74% IS CONSIDERED REASONABLE IN THE LINE OF WHOLES ALE MEDICAL BUSINESS. ACCORDINGLY, NO SEPARATE ADDITION WAS CONS IDERED NECESSARY BY HIM. IN THE RESULT, THE ADDITION OF RS. 11,41,07 0/- WAS RESULTED IN ENHANCEMENT OF INCOME BY RS. 1,92,538/-. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 14 9. NOW THE ASSESSEE IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE REITERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A). HE HAS FURTHER SUBMITTED THAT THE LD ASSESSING OFFICER MADE ADDITI ON IN SALES AT RS. 9,48,532/- WITHOUT ANY BASIS. THE APPELLANT HAD DECLA RED TOTAL SALES AT RS. 13,13,70,013/- WHICH INCLUDES TRADING TURNOVER O F MEDICAL EQUIPMENT AS WELL AS TRADING TURNOVER OF SHARES. THE LD A.O. HAS ESTIMATED THE TURNOVER AT RS. 13.25 CRORES WITHOUT A NY BASIS. THE LD CIT(A) WRONGLY HELD THAT SALE TRANSACTIONS WERE SPECU LATIVE IN NATURE AS THESE TRANSACTIONS WERE MADE THROUGH ELECTRONIC M ODE AND WHEN THE PURCHASES MADE AND SHARES COME ON SCREEN OF THE BROKER, IT TANTAMOUNT TO PURCHASE AND WHEN IT IS SOLD THEN IT I S A PERFECT SALE. HE AGAIN REFERRED SECTION 43(5)(D) THAT AN ELIGIBLE TR ANSACTION IN RESPECT OF TRADING OF DERIVATIVES REFERRED TO IN CLAUSE (AC) O F SECTION 2(20) OF SECURITIES CONTRACTS (REGULATION) ACT, 1956 CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE, SHALL NOT BE DEEMED TO BE AN SPECUL ATIVE TRANSACTION. IN THE SAME SECTION ELIGIBLE TRANSACTION WAS ALSO DE FINED AND ACCORDING TO THAT, TRANSACTION CARRIED OUT ELECTRONICALLY ON SCREEN BASED SYSTEM THROUGH A STOCK BROKER OR SUB-BROKER OR SUCH OTHER INTERMEDIARY REGISTERED U/S 12 OF SEBI AND WHICH IS SUPPORTED BY A TIME STAMPED CONTRACT NOTE ISSUED BY SUCH BROKER OR SUB-BROKER O R OTHERS. THE SAID ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 15 SALE AND PURCHASE WOULD BE TREATED AS TRADING OF SH ARES (BUSINESS) AND NOT THE SPECULATION TRANSACTION. THESE TRANSACTIONS WERE DONE THROUGH BROKER, WHO HAS ISSUED THE TRANSACTION NOTE AFTER CH ARGING THE COMMISSION. IN SPECULATIVE TRANSACTION, NO TRANSACT ION NOTE IS ISSUED BY THE BROKER BUT HE ONLY GIVES THE DIFFERENCE OF P ROFIT/LOSS IN CASE OF HIS SPECULATIVE SHARE TRANSACTION. THE ASSESSEE HAD SHOWN PURCHASE AND SALE NUMBER OF SHARES WITH SCRIPT, THEREFORE, SA ME SHOULD NOT BE TREATED SPECULATIVE TRANSACTION. HE ALTERNATIVELY A RGUED THAT EVEN THIS IS AN SPECULATIVE LOSS U/S 73, WHICH WAS NOT ALLOWED TO BE SET OFF AGAINST THE BUSINESS INCOME U/S 73 OF THE ACT. THERE FORE, THIS IS A BUSINESS LOSS, WHICH IS ADJUSTABLE AGAINST THE BUSI NESS PROFIT DURING THE YEAR U/S 70 OF THE ACT. THUS, HE PRAYED TO DELETE TH E ADDITION CONFIRMED BY THE LD CIT(A). 10. AT THE OUTSET THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A) AND ARGUED THAT THE LD CIT(A) HAD VERI FIED ALL THE PARTICULARS OF TRANSACTIONS OF SHARES AND HELD THAT THESE TRANSACTIONS ARE SPECULATIVE IN NATURE. THEREFORE, ORDER OF THE LD CIT(A) MAY PLEASE BE CONFIRMED. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 16 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. AS PE R SECTION 43(5) SPECULATIVE TRANSACTION MEANS A TRANSACTION IN WH ICH A CONTRACT FOR THE PURCHASE OR SALE OF ANY COMMODITY, INCLUDING ST OCKS AND SHARES, IS PERIODICALLY OR ULTIMATELY SETTLED OTHERWISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIPS. THE ASSESSEE HAS REFERRED SECTION 43(5)(D), WHICH IS REPRODUCED AS UNDER:- 43(5) (D) AN ELIGIBLE TRANSACTION IN RESPECT OF T RADING IN DERIVATIVES REFERRED TO IN CLAUSE [(AC)] OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE;] PRIMA FACIE IT IS CLEAR THAT SECTION 43(5)(D) IS FO R TRADING IN DERIVATIVES NOT TRADING OF SHARES. THE ASSESSEE CLAIMED THAT THE ASSESSEE HAS TRADED THESE SHARES THROUGH BROKER AND THROUGH ELEC TRONICS MODE, WHICH COMES U/S 43(5)(D) OF THE ACT AND SHALL NOT BE DEEMED TO BE AN SPECULATIVE TRANSACTION, HAS WRONGLY INTERPRETED SEC TION 43(5) OF THE ACT. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE REGA RDING DELIVERY OF SHARES AND TRANSACTIONS NOTE, DETAIL OF SCRAP TRADE D DURING THE YEAR ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 17 UNDER CONSIDERATION. THEREFORE, WE DO NOT FIND ANY RE ASON TO INTERVENE IN THE ORDER OF THE LD CIT(A). ACCORDINGLY, BOTH TH ESE GROUNDS OF ASSESSEES APPEAL ARE DISMISSED. 12. THE GROUND NO. 4 OF THE ASSESSEES APPEAL IS AGA INST CONFIRMING THE ADDITION TO SUNDRY CREDITORS AT RS. 3,19,611/- AND GROUND NO. 1 OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITI ON MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUNDRY CREDITORS AT RS. 14,92,848/-. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN SUNDRY CREDITORS AT RS. 18,12,459/- IN THE AUDIT REPORT AN D WAS ASKED TO FURNISH THE CONFIRMATION, COMPLETE NAME, ADDRESSES, PAN, COPY OF LEDGER TO SUPPORT ITS CLAIM BUT THE SAME WERE NOT SU BMITTED BEFORE HIM EVEN BOOKS OF ACCOUNT WERE ALSO NOT PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, HE MADE ADDITION OF RS. 18,12,45 9/-. 13. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD ALLOWED THE APPEAL PARTLY BY OBSERVING THAT IN CASE OF CREDITOR S HAVING PAN, THE ASSESSING OFFICER WOULD HAVE VERIFIED THE DETAILS F ROM THEIR CASE RECORDS, MORE SO WHEN THE DETAILS WERE ASKED AT THE FAG-END I.E. ON 27/12/2010. THE CASE WAS GETTING TIME BARRED BY 31/12 /2010. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 18 REGARDING CREDITORS WITHOUT PAN, IN HIS OPINION, THE BURDEN WAS HEAVIER ON ASSESSEE. CONSIDERING THE ABOVE OBSERVAT ION, HE CONFIRMED ADDITION OF RS. 3,19,616/- AND GIVING RELIEF OF RS. 14,92,848/-. 14. NOW BOTH ARE BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT ALL THESE CREDITORS WERE TRADE CREDIT ORS AND ASSESSEE FIRM HAD REGULAR BUSINESS TRANSACTION WITH THEM. MER ELY ON THE GROUND OF NON FURNISHING OF PAN NUMBERS, THE ACTION OF LD A.O. BY TREATING THE SUNDRY CREDITORS AS UN-GENUINE WAS UNJUSTIFIED. THE D ETAILS OF SUNDRY CREDITORS WAS FURNISHED BEFORE THE LD ASSESSING OFFI CER VIDE SUBMISSION DATED 16/12/2010 (POINT NO. 5(II). HE HAS ALSO DRAWN OUR ATTENTION ON PAGE NO. 123 OF THE PAPER BOOK FOR THIS PURPOSE. FU RTHER THESE DETAILS FOR CONFIRMATION WAS REQUIRED BY LD A.O. VIDE SHOW CA USE NOTICE DATED 27/12/2010 AND WERE FILED BEFORE THE ASSESSING OFFIC ER ON 27/12/2010. THE APPELLANT WAS ALSO FILED COPY OF LEDGER ACCOUNT O F THE TRADE CREDITORS. THE LD CIT(A) WAS ALSO NOT RIGHT IN CONFIRM ING THE TRADE CREDITORS NOT HAVING PAN TO THE TUNE OF RS. 3,19,61 1/-. IT IS NOT NECESSARY THAT EVERY TRADER IS REQUIRED TO HAVE PAN BEFORE MAKING ANY BUSINESS TRANSACTION IF NET INCOME IS BELOW THE BASI C EXEMPTION LIMIT. THE LD ASSESSING OFFICER DID NOT MAKE ANY INQUIRY FR OM THESE PARTIES ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 19 FOR VERIFICATION OF THESE TRANSACTIONS ABOUT ESSENT IALITY FOR HAVING PAN NUMBER. THE LD ASSESSING OFFICER IS DISCHARGING THE FUNCTION OF QUASI JUDICIAL AUTHORITY WHICH SHOULD HAVE JUSTIFIED HIMS ELF FOR MAKING PROPER INQUIRY IN THE MATTER OF CREDITORS AND ABOUT THEIR GENUINENESS. THE ASSESSEE HAD SUBMITTED DETAILS OF THE TRADE CREDITO RS ALONGWITH BALANCE SHEET. AGAINST THE APPEAL MADE BY THE REVENUE, IT H AS BEEN SUBMITTED THAT THE NATURE OF THE TRANSACTION WITH SUNDRY CREDI TORS IS OF TRADING ACTIVITY ONLY WHICH OCCURS AGAINST PURCHASE AND SALE S OF ANY COMMODITY AND THERE IS NO NEED FOR PROVING CREDITWOR THINESS OF SUNDRY CREDITORS. HE RELIED UPON THE DECISION OF HONBLE A LLAHABAD HIGH COURT IN THE CASE OF CIT VS. JAGDISH PRASAD TIWARI (2014) 22 0 TAXMAN 141 (ALL) AND ARGUED THAT WHEN THE BOOKS OF ACCOUNT REJ ECTED U/S 145(3) OF THE ACT, NO ADDITION U/S 68 CAN BE MADE. THEREFOR E, ADDITION CONFIRMED BY THE LD CIT(A) MAY BE DELETED. 15. AT THE OUTSET, THE LD DR HAS ARGUED THAT THE AS SESSING OFFICER HAD GIVEN NUMBER OF OPPORTUNITIES TO THE ASSESSEE V IDE VARIOUS SHOW CAUSE LETTERS MENTIONED IN THE ASSESSMENT ORDER AND IT IS FOUND THAT THE ASSESSEE HIMSELF ADMITTED THAT IT HAS SUBMITTED ITS AUDIT REPORT ON 04/10/2010 ALONGWITH COMPUTATION OF INCOME, COPY OF RETURN FOR THE ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 20 YEAR UNDER CONSIDERATION, HARDLY LESS THAN TWO MONTH S WERE REMAINED WITH ASSESSING OFFICER TO COMPLETE THE ASSESSMENT. A S PER ASSESSEES SUBMISSION AS PAGE 120 AND 121 OF THE PAPER BOOK, T HE ASSESSEE SUBMITTED CREDITORS LEDGER COPY ON 18 TH NOVEMBER, 2010 BEFORE THE ASSESSING OFFICER AS PER ITEM NO. 7. AS PER PAGE NO . 122 AND 123 OF PAPER BOOK, WHICH WERE FILED AGAINST THE SHOW CAUSE LE TTER OF ACIT DATED 10/12/2010 AND AT SL. NO. 5, THE ASSESSEE AGA IN FURNISHED DETAIL OF SUNDRY CREDITORS. THEREFORE, THE ASSESSEES ARGUM ENT IS TOTALLY BEYOND THE TRUTH THAT THE ASSESSING OFFICER HAS ASK ED TO GIVE THE CONFIRMATION ON 27/12/2010. THIS TIME ALSO, HE ONLY HAD GIVEN DETAILS OF SUNDRY CREDITORS, NO CONFIRMATION WITH FULL ADDRE SS WAS FILED BY THE ASSESSEE. THE LD ASSESSING OFFICER VIDE LETTER DATED 22/12/2010 (PAPER BOOK PAGE NO. 124) AT ITEM NO. 4 HAS AGAIN ASKED TH E ASSESSEE TO FURNISH COMPLETE NAME, ADDRESS, PAN ALONGWITH CONFIR MATION AND COPY OF LEDGER IN SUPPORT OF THESE SUNDRY CREDITORS. AGA IN THE LD CIT(A) AS WELL AS THE ASSESSEE WERE WRONG ON FACT THAT THE ASSES SING OFFICER WAS ASKED TO FILE CONFIRMATION BY SHOW CAUSE NOTICE DAT ED 27/12/2010. ON 27/12/2010, THE ASSESSEE SUBMITTED A LETTER BEFORE THE ACIT, CIRCLE-, KOTA AND REPEATED THE SAME REPLY IN POINT NO. 4 REG ARDING SUNDRY ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 21 CREDITORS AMOUNTING TO RS. 18,12,459/-, THEREFORE, SAME MAY BE CONFIRMED. 16. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. AS ME NTIONED ABOVE, THE ASSESSEE WAS NON-COOPERATIVE WITH THE DEPARTMENT EVEN THERE IS NO COPY OF REPLIES FILED TO SHOW THAT FULL NAME, ADDRES S AND PAN OF TRADE CREDITORS WERE FILED BEFORE ASSESSING OFFICER. THE LD CIT(A) WAS ALSO WRONG TO ACCEPT THE ASSESSEES CLAIM AND HELD THAT S HOW CAUSE NOTICE WAS GIVEN BY THE ASSESSING OFFICER ITSELF FOR TRADE CREDITORS ON 27/12/2010 IS AGAINST THE FACT OF THE CASE AS SUBMI TTED BY THE LD DR WITH REFERENCE TO PAPER BOOK SUBMITTED BY THE ASSESS EE. WE HAVE ALSO PERUSED THE ABOVE DOCUMENTS, THE ARGUMENT OF THE LD DR WAS FOUND CORRECT AND THE ASSESSEE HAD NOT SUBMITTED COMPLETE DETAILS OF CREDITORS WITH FULL ADDRESS WITH PAN BEFORE THE ASSES SING OFFICER. ANY EXPENSES CLAIMED IN THE P&L ACCOUNT, BURDEN LIES ON THE ASSESSEE, WHICH HAS NOT BEEN DISCHARGED BY THE ASSESSEE, THERE FORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS ISSUE TO THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER AND SUBMIT ALL THE REQUIRED DETAILS FOR HIS SATISFACTION TO PR OVE THE GENUINENESS OF ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 22 THE TRADE CREDITORS AS PER LAW. ACCORDINGLY, BOTH TH E GROUNDS OF APPEALS ARE SET ASIDE TO THE ASSESSING OFFICER. 17. GROUND NO. 5 OF THE ASSESSEES APPEAL IS AGAINS T CONFIRMING THE ADDITION OF UNSECURED LOAN OF RS. 3 LACS IN THE NAM E OF M/S GERA MEDICAL AGENCIES. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN OF RS. 3 LACS IN THE NAME O F M/S GERA MEDICAL AGENCIES. THE LD ASSESSING OFFICER GAVE SHOW CAUSE VIDE LETTER DATED 25/12/2010 TO FURNISH THE COMPLETE NAME, ADDR ESS ALONGWITH CONFIRMATION OF M/S GERA MEDICAL AGENCIES IN REGARD TO THIS UNSECURED LOAN. AS PER LETTER DATED 18/11/2010, THE ASSESSEE HAD FILED LEDGER COPY OF M/S GERA MEDICAL AGENCIES BUT NO CONFIRMATI ON REGARDING THE SAME WAS FILED. SINCE NO BOOKS OF ACCOUNT OR OTHER R ELEVANT MATERIAL WAS PRODUCED, THE CREDITWORTHINESS, IDENTITY AND GENU INENESS OF THE ABOVE CREDITOR COULD NOT BE PROVED NOR IT BE PROVE D THAT THE LOAN WAS TAKEN EXCLUSIVELY FOR THE BUSINESS PURPOSES. THEREFO RE, THE ASSESSING OFFICER MADE ADDITION OF RS. 3 LACS IN THE INCOME O F THE ASSESSEE, WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD CI T(A), WHO HAS ALSO CONFIRMED THE ADDITION BY OBSERVING THAT THE N O CONFIRMATION WAS FILED BEFORE THE ASSESSING OFFICER ACCORDINGLY HE D ISMISSED THE APPEAL ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 23 OF ASSESSEE. THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAD TAKEN LOAN OF RS. 3 LACS THROUGH ACCOUNT PAYEE CHEQ UE AND INTEREST ON WHICH PAID BY CHEQUE AFTER TDS DEDUCTED. THE LEDGER C OPY OF PAN WAS SUBMITTED TO THE ASSESSING OFFICER VIDE SUBMISSION DATED 27/12/2010 (RELEVANT POINT NO. 5), COPY ANNEXED WITH THE PAPER BOOK AT PAGE NO. 129, COPY OF LEDGER ACCOUNT OF M/S GERA MEDICAL AGE NCIES AND TDS DEPOSIT CHALLAN FOR ABOVE SAID PERIOD HAS BEEN ANNE XED AT SL. NO. 156 TO 158 OF PAPER BOOK. THUS, MERELY ON THE GROUND OF NON-PRODUCTION OF BOOKS OF ACCOUNT, SUCH UNSECURED LOAN WAS ADDED TO THE TOTAL INCOME WHEREAS THE ENTIRE TRANSACTION WAS TAKING PLACE THROU GH BANK ACCOUNT AND SUCH BANK ACCOUNT DETAILS ETC. ARE LYING WITH TH E ASSESSING OFFICER, THUS WITHOUT GOING INTO THE FACTUAL ASPECT OF THE CA SE, ADDITION OF UNSECURED LOAN IS UNJUSTIFIED IN THE FACTS AND CIRC UMSTANCES OF THE CASE. THE PARTY WAS LOCAL, THE LD ASSESSING OFFICER S HOULD HAVE ENQUIRE THIS TRANSACTION BY ISSUING SUMMON U/S 131 OF THE A CT. THE ASSESSEES BOOK OF ACCOUNT WERE COMPUTERIZED WHICH IS DULY EVIDE NT FROM THE STATEMENT RECORDED BY THE DEPARTMENTAL AUTHORITY ON 12/10/2007, THEREFORE, SAME MAY BE DELETED. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 24 18. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD CIT(A) AND HAS ALSO DRAWN OUR ATTENTION ON PAPER BOOK SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE ON 27/12/2010 HAD SUBMITTED THAT HE HAD RECEIVED THE LOAN THROUGH ACCOUNT PAYEE CHEQUE AND DEDUCTED TDS AND PAID TO THE GOVERNMENT EXCHEQUER BUT AS PER SECTION 68 THE ASSESSEES BURDEN HAS NOT BEEN DISCHARGED. THEREFORE, THE SAME MAY BE CONFIRMED. 19. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. AS PE R SECTION 68, THE ASSESSEE HAS TO PROVE GENUINENESS OF THE TRANSACTIO N, CREDITWORTHINESS AND IDENTITY OF THE PERSON. WHATEVER PAGE REFERRED BY THE AR OF THE ASSESSEE ONLY EVIDENCED THAT THE ASSESSEE HAD FILED COPY OF ACCOUNT OF M/S GERA MEDICAL AGENCIES, KOTA ON WHICH NO PAN HAS BEEN GIVEN BY IT. THE ASSESSEE FURNISHED THESE DETAILS ON 27/12/20 10 HARDLY THREE DAYS HAD REMAINED WITH THE ASSESSING OFFICER TO COMP LETE THE ASSESSMENT PROCEEDINGS, THEREFORE, THERE IS NO LAPS E ON THE PART OF THE ASSESSING OFFICER TO MAKE THE ADDITION U/S 68 OF TH E ACT, WHICH WAS CONFIRMED BY THE LD CIT(A). EVEN EVIDENCE FILED BEFO RE US, DOES NOT SHOW THAT THE ASSESSEE HAD FILED CONFIRMATION AS WEL L AS PAN NUMBER BEFORE THE ASSESSING OFFICER. EVEN THE ASSESSEE BEF ORE THE ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 25 LD CIT(A) HAS CLAIMED THAT IT HAS FILED THE CONFIRMA TION WITH PAN NUMBER BEFORE THE ASSESSING OFFICER, WHICH WAS BEYOND THE TRUTH. AS DISCUSSED ABOVE, THE ASSESSEES ATTITUDE WAS NON-COO PERATIVE BUT IN THE INTEREST OF JUSTICE, THIS ISSUE BE ALSO REQUIRE D TO BE SET ASIDE TO THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO COOP ERATIVE WITH THE ASSESSING OFFICER, SUBMIT THE REQUIRED CONFIRMATION AS PER LAW. THEREFORE, THIS GROUND OF APPEAL IS SET ASIDE TO THE ASSESSING OFFICER. 20. GROUND NO. 6 OF THE ASSESSEES APPEAL IS AGAINS T CONFIRMING THE ADDITION OF MISCELLANEOUS EXPENSES AT RS. 15,12,001 /- BY THE LD CIT(A). THE LD ASSESSING OFFICER OBSERVED THAT DURING THE CO URSE OF SURVEY PROCEEDINGS, BOTH THE PARTNERS HAD ADMITTED THAT TH EY VOLUNTARILY SURRENDERED ADDITIONAL INCOME OF RS. 41,93,700/- FO R TAXATION BUT WHILE FILING THE INCOME TAX RETURN, THE NET INCOME HAD BE EN DECLARED AT RS. 21,94,196/- AND CLAIMED VARIOUS EXPENSES AT RS. 15, 12,001/-. SINCE THE ASSESSEE HAD NOT PRODUCED BOOKS OF ACCOUNT NOR ANY BILL OR VOUCHER IN SUPPORT OF HIS CLAIM TOWARDS EXPENDITURE. THE GENUINENESS OF SAME COULD NOT BE ESTABLISHED. HE FURTHER RELIED ON THE DECISION IN ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 26 THE CASE OF MOTOR GENERAL FINANCIAL VS. CIT (SUPRA) AND MADE ADDITION OF RS. 15,12,001/- IN THE INCOME OF THE ASSESSEE. 21. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- I HAVE GONE THROUGH ASSESSING OFFICERS FINDING AN D ASSESSEE SUBMISSION. THE ASSESSEE SURRENDERED AS SUM OF 41,9 3,700/- REPRESENT BY CASH (RS. 20,49,000/-) AND BOGUS CREDI TORS (RS. 21,44,700/-). BOTH OF THESE REPRESENT CASH/INCOME G ENERATED FROM BUSINESS. IN THIS CASE ASSESSEE GENERATED UNDI SCLOSED INCOME OF RS. 41,93,700/- OUT OF WHICH IT INTRODUCED RS. 21,44,700/- IN BOOKS OF ACCOUNTS THROUGH BOGUS CASH CREDITS AND REMAINING 20,49,000/- WAS FOUND AS EXCESS CASH. THE ASSESSING OFFICER HAS RIGHTLY CONCLUDED NO EXPE NSES CAN BE CLAIMED AGAINST UNDISCLOSED INCOME AS SAME WA S NET OF ALL THE EXPENSES (GENERATED AFTER INCURRING ALL THE EXPENSES). MOREOVER, THE ASSESSEE DID NOT PRODUCE CRUCIAL EVI DENCE (BOOKS AND DOCUMENTS INVENTORIED DURING SURVEY) WHIC H GOES AGAINST THE ASSESSEE. CONSIDERING THE OVERALL FACTS, THE ADDITION OF RS. 15,12,001/- IS CONFIRMED. THIS GROUND OF APPEAL IS D ISMISSED. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 27 22. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR FOR THE ASSESSEE SUBMITTED THAT THE LD ASSESSING OFFICER HA D NOT ISSUED ANY SHOW CAUSE NOTICE BEFORE DISALLOWING THESE EXPENSES. THE SALARY EXPENSES HAD BEEN ADDED TWICE WHILE FRAMING ASSESSMEN T ORDER BY THE ASSESSING OFFICER AND CIT(A) IS ALSO ERRONEOUS TO TH IS EXTENT BY WHICH SUCH ADDITION IS SUSTAINED. THE LD ASSESSING OFFICER DISALLOWED 50% SALARY EXPENSES OUT OF RS. 6,58,526/- AND AGAIN FUR THER TOTAL EXPENSES ARE DISALLOWED, WHICH IS QUITE UNJUSTIFIED IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. THE FOLLOWING EXPENSES WERE CLAIMED OUT OF TOTAL INCOME DURING THE YEAR: EXPENSES CLAIMED IN TRADING ACCOUNT (I) TRADING EXPENSES 307858 EXPENSES CLAIMED IN P&L ACCOUNT (II) MISC. EXPENSES 38853 (III) PETROL & VEHICLE EXPENSES 52228 (IV) BANK CHARGES 25316 (V) RENT 240000 (VI) ENTERTAINMENT EXPENSES 40459 (VII) SALARY 689526 (VIII) ELECTRICITY EXPENSES 71360 (IX) INTEREST PAID 28160 (X) REPAIR & MAINTENANCE 63233 (XI) DEPRECIATION 196778 TOTAL 1512001 TOTAL (A+B) 1819862 ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 28 THE DETAILS OF ALL ABOVE EXPENSES WERE SUBMITTED TO T HE LD ASSESSING OFFICER VIDE SUBMISSION DATED 16/12/2010. HE HAS DR AWN OUR ATTENTION ON PAGE NO. 123 OF THE PAPER BOOK. THE LD ASSESSING OFFICER HAD CONSIDERED ASSESSEES REPLY IN HIS ASSESSMENT ORDER AT PAGE 4-5 FOR ISSUING FINAL SHOW CAUSE NOTICE TO THE ASSESSEE. HE FURTHER ARGUED THAT THE LD ASSESSING OFFICER VIDE SHOW CAUSE NOTICE DATE D 22/12/2010 HAS NOT ASKED TO FILE ANY EVIDENCE WITH RESPECT TO MISC. EXPENSES CLAIMED BY THE ASSESSEE. HE REFERRED PARTICULARLY PAGE NO. 124 TO 126 OF THE PAPER BOOK FOR THIS PURPOSE MEANING THEREBY HE WAS S ATISFIED WITH THE GENUINENESS OF THESE EXPENSES, BUT WHILE FRAMING TH E ASSESSMENT ORDER THE DISALLOWANCES WERE MADE IN THE ARBITRARY MA NNER AND HE WAS NOT JUSTIFIED IN DISALLOWANCE OF THE EXPENSES AT THE BACK OF THE APPELLANT AND EVEN WITHOUT PROVIDING REASONABLE OPPO RTUNITY OF HEARING TO THE APPELLANT. ALL ABOVE EXPENSES ARE NE CESSARY IN NATURE OF DOING BUSINESS AND ARE NOT EXCESSIVELY BEEN CLAIMED LOOKING TO VOLUME OF BUSINESS. PRINTOUT COPY OF LEDGER ACCOUNT HAD BE EN SUBMITTED TO THE ASSESSING OFFICER AND TO THE CIT(A) VIDE SUBMISSION DATED 27/12/2010 AND DATED 24/1/2012 RESPECTIVELY. HE FURTHER RELIED ON THE DECISION IN THE CASE OF BRIJ BHUSHAN LAL PARDUMAN KUMAR ETC. VS . CIT (1978) 115 ITR 524 (SC) ON EX PARTE ASSESSMENT AND STATE OF KER ALA VS. ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 29 C.VELUKUTTY (1966) 60 ITR 239 (SC) ON BEST JUDGMENT AND STATE OF ORISSA VS. MAHARAJA SHRI B.P. SINGH DEO (1970) 76 I TR 690 (SC) ON BEST JUDGMENT. THUS, HE PRAYED TO DELETE THE ADDITIO N CONFIRMED BY THE LD CIT(A). 23. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORT ED THE ORDER OF THE LD CIT(A) AND ARGUED THAT THE ASSESSEE HAS NOT S UBMITTED ANY EVIDENCE FOR CLAIM OF MISC. EXPENSES CLAIMED BY IT. HE HAS PARTICULARLY DRAWN OUR ATTENTION ON PAGE REFERRED BY THE LD AR FO R THE ASSESSEE FROM NOWHERE IT IS CLEAR THAT THE ASSESSEE HAD SUBM ITTED THESE EVIDENCES FOR THE LOWER AUTHORITY, THEREFORE, ORDER OF THE LD CIT(A) MAY PLEASE BE CONFIRMED. 24. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD ASSESSING OFFICER ISSUED VARIOUS QUESTIONNAIRE TO THE APPELLANT, WHICH WAS NOT RESPONDED. ON 27/12/2010, HE APPEARED BEFORE THE AS SESSING OFFICER. BEFORE THAT HE PARTLY FILED THE INFORMATION BEFORE THE ASSESSING OFFICER WHATEVER EVIDENCE IT REFERRED, DOES NOT SUPPORT THE ASSESSEES CASE THAT HE HAD FILED THE REQUIRED EVIDENCES FOR CLAIM OF EXPENSES, THEREFORE, WE IN THE INTEREST OF JUSTICE, SET ASIDE THIS ISSUE TO THE ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 30 ASSESSING OFFICER AND ASSESSEE IS DIRECTED TO COOPE RATE WITH THE ASSESSING OFFICER AND SUBMIT THE REQUIRED DETAIL TO DECIDE THE SET ASIDE PROCEEDINGS. ACCORDINGLY, THIS GROUND IS SET ASIDE TO THE ASSESSING OFFICER. 25. GROUND NO. 7 OF THE ASSESSEES APPEAL IS AGAINS T INITIATION OF PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT, IS PRE MATURE AND DOES NOT REQUIRE ANY ADJUDICATION. HENCE, THE SAME IS DISMIS SED. 26. THE GROUND NO. (II) OF THE REVENUES APPEAL IS A GAINST DELETING THE DISALLOWANCE OF RS. 3,44,763/- OUT OF SALARY EXP ENSES. SINCE THE ASSESSEE HAD NOT SURRENDERED ANY PART OF THE CASH F OUND DURING THE COURSE OF SURVEY ON ACCOUNT OF BOGUS SALARY. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CLAIMED SALARY PAYME NT OF RS. 6,89,526/-, THE ASSESSING OFFICER ASKED VIDE LETTER DATED 10/11/2010 TO FURNISH THE DETAIL OF SALARY PAYMENT IN THE PRESCRI BED PROFORMA. THE ASSESSEE MADE PARTLY COMPLIANCE ON 18/11/2010. THER EFORE, THE ASSESSING OFFICER AGAINST REQUESTED ON 10/12/2010 T O GIVE THE DETAILS IN PRESCRIBED PROFORMA. THE ASSESSEE VIDE HIS LETTER DATED 16/12/2010 FILED A LIST CONTAINING THE NAME OF 12 PERSONS TO W HOM SALARY WAS CLAIMED TO HAVE BEEN PAID. ONLY NAME OF THE EMPLOYE ES SUCH AS ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 31 RAJESH SONI, SONU KUMAR, VATSAL SONI, DEVENDRA KUMA R ETC. WERE GIVEN WITHOUT ANY AMOUNT OF SALARY. THE COMPLETE NAME AND ADDRESS OF THESE PERSONS WERE NOT MADE AVAILABLE THE ASSESS EE OR IN OTHER WORDS, IT CAN BE SAID THAT ASSESSEE WAS NOT ABLE TO F URNISH THE COMPLETE NAME AND ADDRESS OF THESE PERSONS. HOWEVER, IT IS LAST REPLY DATED 27/12/2010, THE ASSESSEE FILED COPY OF LEDGER ACCOUNT OF THESE PERSONS AND TRIED TO JUSTIFY ITS CLAIM TOWARDS SALA RY PAID TO THEM. ON VERIFICATION OF DETAILS, IT WAS FOUND THAT RS.90,000 /- SALARY PAID IN CASH TO ONE SHRI RAJESH SONI, WHO WAS CLAIMED AS PURCHASE MANAGER. AN OUTSTANDING BALANCE OF RS.2,19,500/- HAS ALSO BEEN SHOWN AGAINST HIS NAME. DURING THE COURSE OF SURVEY PROCEEDINGS, STAT EMENT OF SHRI RAJESH SONI WAS ALSO RECORDED IN WHICH HE ADMITTED TH AT HIS SALARY HAS NOT DECIDED TILL DATE AND HE WAS GETTING RS.20,000/ - PER MONTH ON ACCOUNT OF EXPENSES. THEREAFTER, THE LD ASSESSING OF FICER AGAIN HAS GIVEN SHOW CAUSE NOTICE ON THIS ISSUE VIDE LETTER DA TED 22/10/2010 TO FURNISH COMPLETE DETAILS OF SHRI RAJESH SONI VIZ AD DRESS, PAN AND CONFIRMATION IN RESPECT OF S/SHRI RAJESH SONI, SONU KUMAR, VATSAL SONI, CHOUTHMAL, MANISH KUMAR AND JITENDRA KUMAR AND ALL OTHER PERSONS TO WHOM SALARY HAD BEEN PAID. IT WAS REPLIED VIDE LETTER DATED 27/12/2010 BY THE ASSESSEE THAT SHRI RAJESH SONI WAS PAID SALARY OF ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 32 RS.90,000/- AND REMAINING AMOUNT IS ADVANCED TO HIM . THE LD ASSESSING OFFICER CONSIDERED THE ASSESSEES REPLY A ND HELD THAT IN STATEMENT OF SHRI RAJESH SONI, HE ADMITTED ONLY SAL ARY OF RS.20,000/- P.M. ON ACCOUNT OF EXPENSES BUT SALARY HAS NOT BEEN DECIDED TILL DATE OF SURVEY I.E. ON 12/10/2007. THE OTHER PERSONS ALSO ADMITTED THE IDENTICAL FACT. SHRI PREM KUMAR PRAJAPAT (SALESMAN) ADMITTED SALARY@ 2550/- PER MONTH WHEREAS THE ASSESSEE HAS CLAIMED SA LARY FOR THE YEAR RS.34,036/-. SHRI JITENDRA KUMAR ADMITTED SALA RY OF RS.7500/- PER MONTH WHEREAS THE ASSESSEE CLAIMED FOR THE WHOLE YEAR SALARY CLAIMED IN THE NAME OF JITENDRA KUMAR @ 85,878/-. THE STATEM ENT OF OTHER EMPLOYEES WERE ALSO NOT TALLIED WITH THE RECORD ON SA LARY. THEREFORE, THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF EXPENSES WITH EVIDENCE EVEN REPEATED QUERY RAISED BY THE A.O. THER EFORE, HE DISALLOWED RS. 50,000/-OUT OF TOTAL SALARY ON RS. 3, 44,763/-. 27. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD ALLOWED THE APPEAL BY OBSERVING THAT THE ASSESSEE HAS SURRENDE RED MISC. INCOME OF RS. 41,93,700/- RELATED TO UNACCOUNTED CASH FOUN D DURING THE COURSE OF SURVEY. THE PAYMENT OF BOGUS SALARY WOULD R ESULT IN ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 33 GENERATION OF CASH AND AS THE AMOUNT OF CASH SURREN DERED WAS MORE THAN THE SALARY DISALLOWED. THE ASSESSEE HAS BEEN GIV EN BENEFIT OF TELESCOPIC. ACCORDINGLY THE ASSESSING OFFICER WAS DI RECTED TO DELETE THE ADDITION OF RS. 3,44,763/-. 28. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS SURRENDERED DUR ING THE COURSE OF SURVEY PROCEEDINGS AT RS. 21,93,700/- WHICH INCLUDES EXCESS CASH OF RS. 20,49,000/- AND SUNDRY CREDITORS OF RS. 21,44,7 00/-, WHICH HAS BEEN CREDITED IN THE P&L ACCOUNT AND THEREAFTER NET INCOME WAS RS. 21,94,196/- FOR THE YEAR UNDER CONSIDERATION. THEREF ORE, ORDER OF THE LD CIT(A) DESERVED TO BE CONFIRMED ON THIS ISSUE. 29. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE HAD SURRENDERED CASH FOUND DURING THE COURSE OF SURVEY AT RS. 20,49,000/- IN TOTAL SURRENDER OF RS. 41,93,700/-, THEREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). THIS GROUND OF REVENUE IS DISMISSED. 30. THE GROUND NO. (III) OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITION OF RS. 14,83,182/- TO FIXED ASSETS. TH E LD ASSESSING OFFICER ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 34 OBSERVED THAT THE ASSESSEE HAD MADE ADDITION IN FIX ED ASSETS AT RS. 14,83,182/-. THE ASSESSING OFFICER ASKED TO FURNISH COMPLETE BILLS AND VOUCHERS ALONGWITH SOURCE OF INVESTMENT. IT WAS SUBMI TTED BEFORE THE ASSESSING OFFICER THAT THESE ASSETS WERE INTRODUCED BY SHRI LUCKY BATHLA FROM HIS PROPRIETORSHIP FIRM AMOUNTING TO RS . 10,90,344/- AND TO THAT EXTENT HIS SHARE CAPITAL HAD BEEN CREDITED IN PERSONAL CAPITAL ACCOUNT, REMAINING ADDITIONS WERE MADE DURING THE YE AR WERE COMPUTER, FIRE EQUIPMENTS AND CAR JEN ESTILO BUT NO BILL VOUCHERS AND BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, HE MADE ADDITION OF RS. 14,83,182/-. 31. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED BY THE MATTER BEFORE THE LD CIT(A), WHO HAD ALLOWED THE APPEAL BY OBSERVING THAT THE ASSETS WERE DULY SH OWN IN THE BOOKS OF ACCOUNT AND BALANCE SHEET WHICH CAN EITHER AT IT EM OF CREDIT SIDE OR DEBIT SIDE MAKING ADDITION UNDER THE HEAD INCOME AS WELL AS ASSETS WOULD RESULT IN DOUBLE ADDITION, THEREFORE, HE DELET ED THE ADDITION. 32. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND ARGUED THAT THE ASSESSEE NEVER SUBMITTED THE PURCHASE BILLS, COPY OF THE BALANCE S HEET AND BOOKS OF ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 35 ACCOUNT OF SHRI LUCKY BATHLA FOR RS. 10,90,344/-. I T IS ALSO NOT ACCEPTABLE THAT THE LD ASSESSING OFFICER HAD MADE D OUBLE ADDITION ONE UNDER THE HEAD OF INCOME AND ANOTHER UNDER THE HEAD OF ASSETS. 33. AT THE OUTSET, THE LD AR OF THE ASSESSEE REITER ATED THE ARGUMENTS MADE BEFORE THE LD CIT(A). HE HAS ALSO DRAWN OUR ATTE NTION ON PAGE NO. 87 OF THE PAPER BOOK AND ARGUED THAT ALL THE AS SETS HAS BEEN DISCLOSED IN AUDIT REPORT AND BOOKS OF ACCOUNT WERE AUDITED. THEREFORE, ORDER OF THE LD CIT(A) MAY PLEASE BE CONFIRMED. 34. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEE NEVER HAD FURNISHED ANY EVIDENCE FOR PURCHASE OF ASSETS BEFOR E THE LOWER AUTHORITIES. BOOKS OF ACCOUNT WERE ALSO NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE LD CIT(A) ALSO DECIDED THE IS SUE ON THE BASIS OF BOOKS OF ACCOUNT WITHOUT REFERRING TO THE PURCHASE B ILLS. FURTHER THE ASSETS TRANSFERRED FROM PROPRIETORSHIP CONCERN OF S HRI LUCKY BATHLA HAS NOT BEEN VERIFIED FROM THE BALANCE SHEET OF SHRI LU CKY BATHLA. THE LD CIT(A) HAS ACCEPTED THE ASSESSEES ARGUMENT WITHOUT A LLOWING THE OPPORTUNITY TO THE ASSESSING OFFICER, THEREFORE, IN THE INTEREST OF JUSTICE, THIS ISSUE IS REQUIRED TO BE SET ASIDE TO THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO PRODUCE BOOKS OF ACCOUNT , PURCHASE BILLS ITA 485 & 561/JP/2012_ ACE INDIA MEDICAL SYSTEMS VS. ACIT 36 AND ASSETS, BALANCE SHEETS OF SHRI LUCKY BATHLA AND BOOKS OF ACCOUNT OF PROPRIETORSHIP CONCERNED OF SHRI LUCKY BATHLA TO ASCERTAIN WRITTEN DOWN VALUE OF ASSETS FOR CALCULATING CORRECT DEPRECI ATION AND INCOME OF THE ASSESSEE. THUS, THIS GROUND IS SET ASIDE TO THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE ASSESS ING OFFICER AND FURNISH THE REQUISITE DETAILS. 35. IN THE RESULT, APPEALS OF THE ASSESSEE AS WELL A S THE APPEAL OF THE REVENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/08/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 11 TH AUGUST, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- ACE INDIA MEDICAL SYSTEMS, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-2, KOTA 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 485 & 561/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR