ACIT, New Delhi V. M/s Hughes Escorts Communications Ltd., New Delhi

ITA 4874/DEL/2010

• Counselvise Citation: 487420114 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 08-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANT MISHRA
• Assessee Lawyers: PINKY KAPOOR; AJAY VOHRA SH NEERAJ JAIN
• Keywords: Additional evidence
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `C: NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI C.L. SETHI, JUDICIAL MEMBER I.T. A. NO.4593/DEL/2010 ASSESSMENT YEAR : 2004-05 M/S. HUGHES COMMUNICATION DY. COMMISSIONER OF I NCOME-TAX, INDIA LTD., 1, SHIVAJI MARG, VS. CIRCLE 12(1), N EW DELHI. WESTEND GREENS, NATIONAL HIGHWAY NO.8, NEW DELHI. PAN: AAACH0765L. I.T. A. NO.4874/DEL/2010 ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX, M/S. HUGHES ESCO RTS COMMUNICATIONS CIRCLE 12(1), NEW DELHI. VS. LTD., B -25, SECOND FLOOR, NIRLAC CENTRE, QUTAB INSTITUTIONAL AREA, NEW DELHI. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI AJAY VOHRA, ADVOCATE, SH. NEERAJ JAIN & MISS PINKY KAPOO R, CA. DEPARTMENT BY : SHRI JAYANT MI SHRA, CIT/DR. O R D E R PER BENCH: THESE CROSS APPEALS, FILED BY THE ASSESSEE AND THE REVENUE, ARE AGAINST THE ORDER DATED 26.08.2010, PASSED BY THE LEARNED C OMMISSIONER OF INCOME- TAX (APPEALS) FOR THE ASSESSMENT YEAR 2004-05. 2 2. GROUND NO.1 IN REVENUES APPEAL IS GENERAL IN NA TURE WHICH NEEDS NO ADJUDICATION AS NO SPECIFIC ARGUMENTS WERE ADVANCED IN THAT REGARD. 3. GROUND NO.2 IN THE REVENUES APPEAL AND GROUND N OS.1 AND 2 IN ASSESSEES APPEAL ARE INTER-CONNECTED BEING DIRECTE D AGAINST THE CIT(A)S ORDER IN DELETING 50% ADDITION OF RS.90,35,298/- AN D IN CONFIRMING THE 50% ADDITION OF RS.90,35,298/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF PROVISION FOR IMPAIRMENT OF STOCK. 4. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MARKETING OF VERY SMALL APERTURE TERMINALS (VSATS) AND PROVISION OF S ATELLITE COMMUNICATIONS SERVICES THROUGH ITS HUB EARTH STATION AT GURGAON. THE ASSESSEE IS ALSO PROVIDING BROADBAND, INTERNET AND OTHER TELECOMMUNI CATIONS SERVICES UNDER VARIOUS LICENSES OBTAINED FROM THE DEPARTMENT OF TE LECOMMUNICATIONS, GOVERNMENT OF INDIA. THE ASSESSEE COMPANY ALSO PRO VIDES HIGH-END EDUCATION PROGRAMMES IMPARTED BY PREMIER INSTITUTES IN INDIA AND OVERSEAS. IT FILED ITS RETURN OF INCOME DECLARING PROFIT AT R S.12,59,65,323/- ON 1.11.2004. THE RETURN WAS SELECTED FOR SCRUTINY AN D NOTICE UNDER SEC. 143(2) WAS DULY ISSUED AND SERVED UPON THE ASSESSEE. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT W AS NOTICED BY THE AO THAT THE ASSESSEE HAD SHOWN VALUE OF INVENTORIES AF TER ADJUSTMENT OF RS.90,35,298/- ON ACCOUNT OF STOCK IMPAIRED DURING THE YEAR. THE ASSESSEE 3 WAS ASKED TO SUBMIT THE VALUATION OF STOCK. FROM T HE DETAILS FILED BY THE ASSESSEE, IT WAS NOTICED BY THE AO THAT THE STOCK W AS CLAIMED TO HAVE BEEN VALUED AT THE REALIZABLE VALUE. THE ASSESSEE WAS T HEN ASKED TO GIVE THE BASIS OF THE REALIZABLE VALUE ADOPTED BY IT AND TO EXPLAI N AS TO WHY THE INVENTORY BE NOT VALUED ON COST BASIS IN THE ABSENCE OF EVIDE NCE OF REALIZABLE VALUE. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE INVEN TORY CONSISTS OF OLD/USED STOCK, WHICH IS CATEGORIZED AS DEFECTIVE BUT REPAIR ABLE STOCK, AND DEMO STOCK AND THESE STOCKS WERE VALUED AT THEIR NET REALIZABL E VALUE. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT THE DEFECTIVE BUT RE PAIRABLE STOCK WAS VALUED ON THE BASIS OF ESTIMATE PROVIDED BY THE TECHNICAL DEPARTMENT WHILE THE DEMO STOCK WAS VALUED BY MAKING A SMALL REDUCTION I N ITS VALUE ON ACCOUNT OF ITS USE FROM YEAR TO YEAR. THE ASSESSEE ALSO SU BMITTED VARIOUS DETAILS REGARDING SOME ITEMS GIVING REALIZABLE RATE AS ON 3 1.03.2003 AND 31.03.2004. HOWEVER, THE ASSESSING OFFICER DISALLO WED THE ASSESSEES CLAIM OF ADJUSTMENT OF RS.90,35,298/- FOR THE REASON THAT THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE IN SUPPORT OF THE REALIZABLE VALUE TAK EN BY IT AND HAS NOT EVEN POINTED OUT ANY POLICY ADOPTED BY IT FOR VALUATION OF THE CLOSING STOCK ON THE BASIS OF PERIOD OF USE. 6. ON AN APPEAL, THE LEARNED CIT(A) REDUCED THE DIS ALLOWANCE TO 50% BY OBSERVING THAT THE ASSESSEE COULD NOT FURNISH DETAI LS OF THE INVENTORIES ON 4 ACCOUNT OF WHICH IT HAD DEBITED AN AMOUNT OF RS.90, 35,298/- AND EVEN IT IS ACCEPTABLE THAT THERE CAN BE SOME DIMINISHING IN TH E VALUE OF INVENTORY BUT IN THE ABSENCE OF COMPLETE DETAILS, THE ASSESSEES CLAIM IS ALLOWABLE TO THE EXTENT OF 50%. THE LEARNED CIT(A) HAS RELIED UPON THE DECISION OF ITAT, CALCUTTA IN THE CASE OF JOINT COMMISSIONER OF INCOM E-TAX VS. I.T.C. CALCUTTA AS REPORTED IN (2005) 299 ITR 341 (AT)(CAL.). 7. HENCE, THE ASSESSEE AS WELL AS REVENUE ARE IN AP PEAL AGAINST THE LEARNED CIT(A)S ORDER. IN OTHER WORDS, THE REVENU E IS IN APPEAL IN GRANTING RELIEF OF 50% THOUGH, ON THE OTHER HAND, THE ASSESS EE IS IN APPEAL IN SUSTAINING THE DISALLOWANCE TO THE EXTENT OF 50% OF TOTAL DISALLOWANCE MADE BY THE AO. 8. THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE H AS FAILED TO FURNISH THE BASIS AND EVIDENCE IN SUPPORT OF THE NET REALIZ ABLE VALUE ADOPTED BY THE ASSESSEE FOR THE PURPOSE OF VALUING THE INVENTORIES WHICH ARE DEFECTIVE BUT REPAIRABLE AND WHICH ARE USED FOR DEMONSTRATION TO THE CUSTOMERS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT FURNISH ED ANY REPORT FROM TECHNICAL EXPERT TO SUPPORT THE NET REALIZABLE RATE OF VARIOUS ITEMS ADOPTED BY THE ASSESSEE. HE FURTHER POINTED OUT THAT THE ASSE SSEE HAS APPLIED AD HOC PERCENTAGE OF DEDUCTION TO THE COST PRICE, WHICH CA NNOT BE SAID TO BE A SYSTEM RECOGNIZED UNDER THE PRINCIPLES OF LAW AND A CCOUNTANCY FOR THE 5 PURPOSE OF VALUING THE INVENTORIES AT NET REALIZABL E VALUE. HE FURTHER SUBMITTED THAT MERELY BECAUSE THE ASSESSEES CLAIM HAS BEEN ALLOWED IN THE ASSESSMENT YEAR 2003-04, THAT BY ITSELF CANNOT BE A BASIS TO ALLOW THE SAME IN THE YEARS UNDER CONSIDERATION UNLESS THE NET REA LIZABLE VALUE ADOPTED BY THE ASSESSEE IS SUPPORTED BY ANY EVIDENCES AND MATE RIAL. HE FURTHER POINTED OUT THAT IN SOME OF THE ITEMS, EVEN THE VALUE HAS B EEN TAKEN AT `NIL, WHICH IS NOT AT ALL JUSTIFIABLE INASMUCH AS THERE MUST BE SO ME VALUE OF STOCK EVEN IF IT IS SOLD IN THE MARKET AS A SCRAP. 9. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND, SUBMITTED THAT THE ASSESSEE AS PER THE CONSISTENT METHOD OF VALUAT ION OF STOCK, HAS VALUED THE CLOSING STOCK AT COST OR NET REALIZABLE VALUE, WHICHEVER IS LOWER AND IN SOME ITEMS OF INVENTORIES, THE NET REALIZABLE VALUE HAS BEEN TAKEN AT `NIL BECAUSE OF THE REASON THAT THESE STOCKS COULD NOT B E SOLD IN THE MARKET AND AS SUCH, THE MARKET PRICE IN THE INSTANT CASE WOULD BE `NIL. HE FURTHER SUBMITTED THAT THE NET REALIZABLE RATE HAS BEEN TAK EN AS PER THE ASSESSMENT MADE BY THE PERSON OF TECHNICAL DIVISION OF THE ASS ESSEE COMPANY. HE FURTHER SUBMITTED THAT THE DECISION OF INCOME-TAX A PPELLATE TRIBUNAL, SPECIAL BENCH IN THE CASE OF JCIT VS. I.T.C. CALCUT TA REPORTED IN 299 ITR 0341 (AT) IS NOT APPLICABLE TO THE PRESENT CASE INA SMUCH AS IN THE PRESENT CASE, THE ASSESSEE HAS FURNISHED THE DETAILS OF INV ENTORIES AND THE RATE AT 6 WHICH THEY WERE VALUED FOR THE PURPOSE OF DETERMINI NG THE VALUE OF CLOSING STOCK AT THE END OF THE YEAR. IN SUPPORT OF THE AS SESSEES CASE, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE VARIOUS DE CISIONS, WHICH WILL BE REFERRED TO HEREINAFTER BY US WHILE DECIDING THE IS SUE. 10. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIAL ON RECORD. 11. ON PERUSAL OF DETAILS FURNISHED BY THE ASSESSEE BEFORE THE A.O. VIDE LETTER DATED 27-12-2006 AND 07-02-2007, IT IS SEEN THAT THE ASSESSEE HAS MADE THE VALUATION OF STOCK INVENTORY AS AT THE END OF T HE YEAR BY REDUCING THE SUM OF RS.90,35,298/- FROM THE VALUE OF STOCK, ON ACCOU NT OF IMPAIRMENT AND DEFECT IN THE STOCK, WHICH WAS CONSISTING OF OLD/US ED STOCK, WHICH HAS BEEN CATEGORIZED AS DEFECTIVE BUT REPAIRABLE, AND DEMO S TOCK MEANT FOR MAKING DEMONSTRATION TO THE CUSTOMERS. THE ASSESSEE HAS C LAIMED THAT THE SAID STOCKS WERE VALUED AT NET REALIZABLE VALUE, WHICH I S LOWER THAN THE COST. THE DETAILS OF VALUATION OF STOCK FOR DEMONSTRATION AT CUSTOMERS PLACE AS ON 31-03-2004 IS PLACED AT PAGES 33 TO 40 OF THE PAPER BOOK FILED BEFORE US AND WHICH IS PREPARED BY TECHNICAL DIVISION OF THE ASSE SSEE. THE ASSESSEE HAS ADOPTED RATE LOWER THAN THE COST PRICE IN THESE CAS ES, AND IN SOME ITEMS, THE VALUE HAS BEEN EVEN TAKEN AT NIL. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O., THE WORKING FOR VALUATION OF CLOSING STOCK OF INVENTORY VIDE LETTER 7 DATED 27-12-2006, WHICH ARE PLACED AT PAGES 41 TO 4 5 OF THE ASSESSEES PAPER BOOK. FROM THE DETAILS OF INVENTORY VALUATION AS O N 31-03-2004, IT IS SEEN THAT THE AMOUNT OF DEVALUATION IN RESPECT OF VARIOU S ITEMS HAS BEEN DETERMINED AT RS.7,93,97,719/- AS UNDER:- INVENTORY TYPE NET VALUE VALUE TAKEN DEVALUATION AGAINST NEW INVENTORY RS.21,276,319 RS.21,273,976 RS.2,343 AGAINST USED INVENTORY RS.112,558,530 RS.56,348,170 RS.56,210,360 AGAINST DEFECTIVE INVENTORY RS.34,415,761 RS.21,339,758 RS.13,076,003 AGAINST NO VALUE RS.248,336 - RS.248,336 AGAINST SCRAP RS.5,590,655 - RS.5,59 0,655 AGAINST CONSUMABLE RS. 4,270,022 - RS.4,270,022 TOTAL DEVALUATION AS ON 31-03-2004 RS.104,630,091 RS.79,397,719 LESS:- DEVALUATION ALREADY BOOKED TILL 31-03-2003 (-) RS.66,092,399 RS.13,305,320 LESS:- TRANSFERRED TOWARDS CONSUMABLE CONSUMED DURING THE YEAR(-) RS.42,700,22 AMOUNT CHARGED IN THE YEAR ENDED ON 31-03-2004 ON A CCOUNT OF DEVALUATION- RS.9,035,298 FROM THE AFORESAID DETAILS, IT IS FOUND THAT OUT OF THE TOTAL DEVALUATION TO STOCK AMOUNTING TO RS.79,93,97,719/-, THE SUM OF RS .6,60,92,399/- HAS BEEN BOOKED AND CLAIMED IN THE EARLIER YEARS TILL 31-03- 2003, AND THE SUM OF 8 RS,.42,70,022/- HAS BEEN CLAIMED UNDER THE HEAD CO NSUMABLE CONSUMED DURING THE CURRENT YEAR, LEAVING A BALANCE OF DEVAL UATION OF RS.90,35,298/- CLAIMED IN THE YEAR UNDER CONSIDERATION. IN THE IM MEDIATE PRECEDING ASSESSMENT YEAR 2003-04, THE TOTAL VALUATION WAS WO RKED OUT AT RS.6,60,92,399/- OUT OF WHICH THE SUM OF RS.5,50,43 ,712/- WAS BOOKED AND CLAIMED TILL THE YEAR ENDED ON 31-03-2002 AND THE B ALANCE AMOUNT OF RS.1,10,48,688/- WAS CLAIMED IN THE YEAR ENDED ON 3 1-03-2003 RELEVANT TO THE ASSESSMENT YEAR 2003-04. 12. IT IS NOT IN DISPUTE THAT AS PER THE SETTLED LA W LAID DOWN BY VARIOUS COURTS FROM TIME TO TIME, THE ASSESSEE IS ENTITLED TO VALUE CLOSING STOCK AT COST OR MARKET PRICE, WHICHEVER IS LOWER. IN OTHER WORDS, THE METHOD OF VALUING THE CLOSING STOCK AT COST OR NET REALIZABLE VALUE, WHICHEVER IS LOWER, BY THE ASSESSEE CANNOT BE SAID TO BE UNACCEPTABLE. THE ASSESSEE HAS RELIED UPON THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASES OF CHAINRUP SAMPATRAM VS. CIT (1953) 24 ITR 481 (SC) & CIT VS. BRITISH PAINTS INDIA LTD. (1991) 188 ITR 44 (SC), WHERE IT HAS BEEN HELD THAT IT IS A WELL RECOGNIZED PRINCIPLE OF COMMERCIAL ACCOUNTING TO EN TER IN THE PROFIT AND LOSS ACCOUNT THE VALUE OF THE STOCK AND TRADE AT THE BEG INNING AND AT THE END OF THE ACCOUNTING YEAR AT COST OR MARKET PRICE, WHICHE VER IS THE LOWER. THE ASSESSEE ALSO MADE A REFERENCE TO THE DECISION OF H ONBLE DELHI HIGH COURT 9 IN THE CASE OF CIT VS. BHARAT COMMERCE AND INDUSTRI ES LTD. (1999) 240 ITR 256 (DEL), WHERE IT WAS HELD THAT THE ASSESSEE MAY VALUE SLOW MOVING STOCK AT THE NET REALIZABLE VALUE. REFERENCE WAS ALSO MA DE TO SOME OTHER DECISIONS REITERATING THE SAME PRINCIPLE THAT THE ASSESSEE IS ENTITLED TO VALUE THE GOODS AT A LOWER COST OR MARKET PRICE, AND IF THERE IS NO DEMAND FOR THE GOODS IN THE MARKET, THE ASSESSEE IS ENTITLED TO VALUE GOODS AT `NIL. IN THIS REGARD, FOLLOWING SOME MORE DECISIONS HAVE BEEN RELIED UPON BY THE ASSESSEE:- (I) K. MOHAMMAD ADAM SAHIB VS. CIT, 56 ITR 360 (MAD .). (II) INDIA MOTOR PARTS AND ACCESSORIES (P) LTD. VS. CIT, 60 ITR 531 (MAD.). (III) CIT VS. DALMIA CEMENT (BHARAT) LTD., 215 ITR 441 (DEL). (IV) IAC VS. CONSOLIDATED PNEUMATIC TOOL CO. (INDIA ) LTD., 14 ITD 564 (BOM.). 13. IN THE PRESENT CASE, AS DISCUSSED AND POINTED O UT ABOVE, THE ASSESSEE HAS BEEN FOLLOWING A CONSISTENT METHOD OF VALUING T HE CLOSING STOCK AT COST OR MARKET PRICE, WHICHEVER IS LOWER, WHICH IS AN AC CEPTED AND RECOGNIZED METHOD OF VALUATION OF STOCK. THE ASSESSEE HAS FUR NISHED THE DETAILS OF INVENTORY WITH THEIR RESPECTIVE NET REALIZABLE VALU E AS AT THE END OF THE YEAR. SAME METHOD WAS ADOPTED IN EARLIER YEARS. THE A.O. HAS NOT BEEN ABLE TO POINT OUT ANY DEFECT OR IRREGULARITY IN THE DETAILS FILED BY THE ASSESSEE. THE A.O. HAS FAILED TO MAKE ANY ENQUIRY TO DETERMINE TH E NET REALIZABLE VALUE OF VARIOUS ITEMS WITH A VIEW TO REBUT THE RATE OF NET REALIZABLE VALUE ADOPTED BY 10 THE ASSESSEE. THE ASSESSEE HAS FOLLOWED THE SAME M ETHOD IN EARLIER YEARS, WHERE THE ASSESSEES CLAIM WAS ALLOWED BY THE A.O. THE LEARNED CIT(A) HAS RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 50 % ON AD HOC BASIS WITHOUT CONSIDERING THE DETAILS FILED BY THE ASSESSEE AND T HE CONSISTENT METHOD ADOPTED BY THE ASSESSEE IN EARLIER YEARS. IN THIS VIEW OF THE MATTER, WE, THEREFORE, FIND NO REASON TO SUSTAIN ANY DISALLOWAN CE ON ACCOUNT OF DEVALUATION IN THE INVENTORY OF STOCK DUE TO IMPAIR MENT/DEFECTS IN THE STOCK LYING WITH THE ASSESSEE AS AT THE END OF YEAR ENDED ON 31-03-2004. WE, THEREFORE, DELETE THE DISALLOWANCE IN TOTO, AND ALL OW THE ASSESSEES CLAIM ON THIS COUNT. THUS, THE GROUND RAISED BY THE ASSESSE E IS ALLOWED AND THAT OF THE REVENUE IS REJECTED. 14. GROUND NO.3 IN REVENUES APPEAL IS DIRECTED AGA INST THE LEARNED CIT(A)S ORDER IN DELETING THE ADDITION OF RS.5,00, 00,000/- MADE BY THE A.O. ON ACCOUNT OF SALES OF VSAT EQUIPMENT. 15. ON THE BASIS OF SALES-TAX OFFICERS ORDER, THE ASSESSING OFFICER MADE THE ADDITION OF RS.5 CRORE TO THE SALES OF THE ASSE SSEE BY OBSERVING AS UNDER:- 10. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSEE WAS ASKED TO FILE CO PY OF THE SALES TAX A SSESSMENT ORDER. IT IS SEEN FROM THE SALES TAX ASSESSMENT ORD ER BY THE SALES TAX DEPARTMENT, UP THAT A SURVEY WAS CARRIED OUT AT LUCKNOW BRANCH OF THE ASSESSEE ON 20/8/2004. DURING THE COURSE OF SURVEY 226 LOOSE SHEETS WERE IMPOUNDED AN D THE PHOTOCOPIES OF THE SAME WERE PROVIDED TO THE ASSESS EE. THE LOOSE SHEET NO. 27 TO 84 PERTAINED TO AY 2004-05 WH ICH 11 PERTAINED TO INSTALLATION OF VSAT AND SUPPLY OF PAR TS FOR MAINTENANCE AT THE BRANCHES OF BOMBAY STOCK EXCHANG E IN UP. HOWEVER, NO DETAILS OF PAYMENTS MADE TO THE BSE WERE PROVIDED BY THE ASSESSEE TO THE SALES TAX DEPARTMEN T. A SHOW CAUSE WAS GIVEN TO THE ASSESSEE VIDE LETTER DA TED 20/3/2006. IN REPLY TO THIS THE ASSESSEE HAS SUBMIT TED THAT NO SALE WAS MADE TO THE BSE DURING THE YEAR UNDER CONSIDERATION. THIS REPLY WAS CONSIDERED DURING THE COURSE OF SALES TAX ASSESSMENT PROCEEDINGS AND THE REPLY O F THE ASSESSEE WAS FOUND NOT ACCEPTABLE. THE SALES SHOWN BY THE ASSESSEE FOR UP WERE REJECTED AND AN ADDITION OF RS .5 CRORES APPROX. WAS MADE TO THE SALES SHOWN BY IT. 11. THE ASSESSEE WAS CONFRONTED WITH THESE FACTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE OR DER SHEET ENTRY DATED 16.11.2006 AND IT WAS ASKED TO EX PLAIN WHY THE SALES AS PER THE SALES TAX ORDER BE NOT TAK EN AND DIFFERENCE BE NOT TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE HAS SUBMITTED VIDE ITS LETTE R DATED 29.11.2006 THAT THE PAPERS SEIZED PERTAIN TO ONLY T HE INSTALLATION / DE-INSTALLATION OF EQUIPMENT AND NO SALE WAS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION. THE ASSESSEE HAS FURTHER SUBMITTED THAT IT HAS FILE D AN FILE AGAINST THE AFORESAID ORDER AND THEREFORE THE ABOVE AMOUNT BE NOT ADDED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 12. THE SUBMISSION OF THE ASSESSEE HAS BEEN CONSIDERED. THE ASSESSEE HAS ONLY MADE GENERAL SUBMISSIONS AND NO EVIDENCE / CONFIRMATION IS SUBMI TTED BY IT. IT IS OBSERVED IN THE SALES TAX ASSESSMENT ORDE R THAT THE LOOSE SHEETS IMPOUNDED SHOW THE INSTALLATION AND SU PPLY OF VARIOUS GOODS, HOWEVER, THE ASSESSEE HAS INTENTIONA LLY NOT PROVIDED ANY EXPLANATION REGARDING THE GOODS MENTIO NED IN THE IMPOUNDED LOOSE SHEETS AND THE ASSESSEE IS TRYI NG TO CONCEAL ITS SALE MADE TO THE BSE. NO ENTRY FOR SUPP LY OF THESE GOODS IS MADE IN THE BOOKS OF ACCOUNT MAINTAI NED BY THE ASSESSEE NOR ANY DETAILS IN THIS REGARD ARE AVA ILABLE WITH THE ASSESSEE. IN VIEW OF THE ABOVE, THE SALES SHOWN BY THE ASSESSEE WERE REJECTED AND SALES WERE DETERMINED BY MAKING 12 AN ADDITION OF RS.5 CRORES. THE FINDINGS GIVEN IN T HE ABOVE ORDER ARE VERY SPECIFIC WHICH SHOW THAT THE ASSESSE E HAS MADE UNACCOUNTED SALES DURING THE YEAR UNDER CONSIDERATION. IN SPITE OF BEING GIVEN SPECIFIC OPP ORTUNITY IN THIS REGARD, THE ASSESSEE HAS FILED TO GIVE ANY DET AILS / DOCUMENTS / EVIDENCE IN SUPPORT OF ITS CONTENTION. IN VIEW OF THE ABOVE, IT IS HEREBY HELD THAT THE ASSESSEE HAS MADE UNACCOUNTED SALES OF RS.5 CRORES AND THEREFORE, AN ADDITION OF RS.5 CRORES IS MADE TO THE INCOME OF THE ASSESSE E. SINCE THE ASSESSEE HAS CONCEALED PARTICULARS OF ITS INCOM E, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) HAVE BEEN INITI ATED SEPARATELY. 16. ON AN APPEAL, THE LEARNED CIT(A) HAS DELETED TH E ADDITION BY OBSERVING AND HOLDING AS UNDER:- 6.4 THE OBJECTION RAISED BY THE AO REGARDING THE ADMISSION OF FRESH EVIDENCE UNDER RULE 46 A IS NOT ACCEPTED, FOR THE APPELLATE ORDER PASSED BY THE JT. COMMISSIO NER OF SALES TAX WAS SUBSEQUENT TO THE DEMAND RAISED BY TH E SALES TAX OFFICER AND THE ORDER PASSED BY THE JT. COMMIS SIONER OF SALES TAX IS DATED 22.12.2008 WHEREAS THE ASSESS MENT ORDER WHICH IS IN APPEAL BEFORE THE UNDERSIGNED IS PASSED ON 29.12.06. THUS AT THE TIME WHEN THE ASSESSMENT ORDE R WAS PASSED THE ORDER OF JT. COMMISSIONER OF SALES TAX W AS NOT AVAILABLE TO THE APPELLANT. NOW, SINCE THE ORDER PA SSED BY THE JT. COMMISSIONER OF SALES TAX HAS EXONERATED TH E APPELLANT, THE VERY BASIS ON WHICH THE ADDITION OF RS.5 CRORES HAVE BEEN MADE FALLS ON THE GROUND. THUS THI S DOCUMENTARY EVIDENCE FILED BY THE APPELLANT HAS TO BE ADMITTED UNDER RULE 46A BECAUSE IT IS NECESSARY TO ADJUDICATE ON THIS ISSUE. 6.5 IN THE REMAND REPORT, THE AO HAS NOT BEEN ABLE TO CONTRADICT THE STAND TAKEN BY THE APPELLANT THAT AF TER THE ORDER PASSED BY JT. COMMISSIONER OF SALES TAX, THE DEMAND OF RS.5 CRORES RAISED BY THE SALES TAX DEPARTMENT D OES NOT STAND ANY MORE. 13 6.6 SINCE THE ADDITION MADE BY THE SALES TAX OFFIC ER ON ACCOUNT OF INSTALLATION OF VSAT EQUIPMENT HAS BE EN DELETED BY THE JT. COMMISSIONER OF SALES TAX (APPEA LS), THEREFORE, THERE IS NO BASIS FOR SUSTAINING THIS AD DITION. THUS THIS ADDITION OF RS.5 CORES IS HEREBY DELETED AND T HE APPELLANT GETS RELIEF ACCORDINGLY. 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 18. IN THE PRESENT CASE, THE A.O. MADE THE ADDITION OF RS.5 CRORE ON ACCOUNT OF RS.5 CRORE ON ACCOUNT OF UNDISCLOSED SAL ES ON THE BASIS OF ASSESSMENT MADE BY THE SALES-TAX OFFICER IN THE LIG HT OF CERTAIN SURVEY CONDUCTED BY THE SALES-TAX DEPARTMENT. HOWEVER, ON AN APPEAL, AGAINST THE SALES-TAX ASSESSMENT, THE JOINT COMMISSIONER OF SAL ES-TAX (APPEALS) VIDE HIS ORDER DATED 22-12-2006 HAS DELETED THE ADDITION OF SALES BY HOLDING AND OBSERVING THAT THE IMPOUNDED DOCUMENTS/LOOSE SHEETS WERE NOT PERTAINING TO SALE OF V-SATS BUT ONLY RELATED TO CERTIFICATION OF INSTALLATION/ DE- INSTALLATION OF V-SATS FOR AND ON BEHALF OF BSE (BO MBAY STOCK EXCHANGE) AT VARIOUS LOCATIONS/OFFICES OF BSE. A COPY OF APP ELLATE ORDER PASSED BY THE JOINT COMMISSIONER OF SALES-TAX (U.P.) DATED 22-12- 2006 WAS FILED BEFORE THE CIT(A) WHICH WAS RIGHTLY ADMITTED AS ADDITIONAL EVIDENCE AFTER GIVING AN OPPORTUNITY TO THE A.O. AS THE SAME WAS NOT AVAI LABLE BY THE TIME THE A.O. MADE THE ASSESSMENT UNDER SEC. 143(3) OF THE A CT. A COPY OF SAID APPELLATE ORDER IS ALSO PLACED BEFORE US IN THE ASS ESSEES PAPER BOOK. IT IS NOT THE AOS CASE THAT SERVICE CHARGES FOR INSTALLA TION AND/OR DE-INSTALLATION 14 OF V-SATS HAS NOT BEEN SHOWN BY THE ASSESSEE IN ITS BOOKS. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE LEARNE D CIT(A)S ORDER IN DELETING THE ADDITION OF ALLEGED SALES MADE BY THE A.O. THUS, THE ORDER OF THE LEARNED CIT(A) IS UPHELD ON THIS ISSUE. 19. THE GROUND RELATING TO CHARGEABILITY OF INTERES T UNDER SEC. 234B OF THE ACT, RAISED BY THE ASSESSEE IS CONSEQUENTIAL IN NATURE. THE AO SHALL RECALCULATE THE INTEREST CHARGEABLE UNDER SEC. 234B , IF ANY, ON THE INCOME FINALLY DETERMINED AFTER GIVING APPEAL EFFECT. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED IN THE MANNER AS INDICATED ABOVE. 21. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 26 TH DECEMBER, 2011. SD/- SD/- (G.D. AGRAWAL) (C.L. SETHI) VICE PRESIDENT JUDICIAL MEMBER DATED: 26 TH DECEMBER, 2011 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.