AAREY DRUGS & PHARMACEUTICALS LTD, MUMBAI V. ITO 6(1)(1), MUMBAI

ITA 5190/MUM/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62608 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-11-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 10-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: N M PORWAL
• Keywords: Unexplained cash credit; Depreciation; Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI G.E.VEERABHADRAPPA (PRESIDENT) AND SHRI B.R.MITTAL(JUDICIAL MEMBER) ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 ARREY DRUGS & PHARMACEUTICALS LTD., 203, SAHAKAR BHAVAN, 340/346, NASRSHI NATHA STREET, MASJID, MUMBAI-09 PA NO.AAACA 5253A I.T.O. 6(1)(1) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI N.M.PORWAL RESPONDENT BY: SHRI C.G.K. NAIR DATE OF HEARING: 5.7.2012 DATE OF PRONOUNCEMENT: 13.7.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THESE APPEALS FOR ASSESSMEN T YEARS 2000-2001 TO 2002- 03 ALL DATED 25.6.2009 AND ASSESSMENT YEARS 2003-04 TO 2004-05 BOTH DATED 22.3.2011 AGAINST ORDERS OF LD CIT(A), MUMBAI. 2. SINCE MOST OF THE GROUNDS AND FACTS IN ALL THESE APPEALS ARE COMMON, WE HEARD THESE APPEALS TOGETHER AND DISPOSE OFF THE SAME BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE RELEVANT FACTS ARE THAT ASSESSEE IS A COMPAN Y DEALING IN THE BUSINESS OF MANUFACTURING AND TRADING IN PHARMACEUTICALS DRUGS, CHEMICALS, ETC. ON THE BASIS OF INFORMATION RECEIVED BY THE INVESTIGATION WING OF T HE INCOME TAX DEPARTMENT, UNIT-I, MUMBAI, FROM THE CRIME BRANCH, MUMBAI POLICE THAT T HE ASSESSEE COMPANY WAS INVOLVED IN THE ADULTERATION OF PETROLEUM PRODUCTS, THE AO INITIATED REASSESSMENT ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 2 PROCEEDINGS BY ISSUING NOTICE U/S.148 OF THE I.T.AC T, 1961 FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION I.E. A.YS. 2000-2001 TO 2004-05 . 4. FIRSTLY, WE TAKE UP APPEAL FOR ASSESSMENT YEAR 2 000-2001 BEING I.T.A. NO.5188/M/2009. 5. THE ASSESSEE HAS FILED CONCISE GROUNDS OF APPEAL WHICH ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD CIT(A) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS: (I) DEPRECIATION : RS.34,26,233 (II) ADMN. EXPENSES: RS. 1,05,694 (III) DONATION : RS 9,000 6. IN RESPECT OF GROUND NO.1(I), THE RELEVANT FACTS ARE THAT ASSESSEE DEBITED DEPRECIATION OF RS.49,68,365. THE AO DISALLOWED TH E CLAIM OF DEPRECIATION STATING THAT THE ASSESSEE COMPANY CLOSED DOWN THE PRODUCTION AND , THEREFORE, THERE IS NO REASON TO ALLOW DEPRECIATION ON THE ASSETS OF THE COMPANY. B EING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). 7. LD CIT(A) CALLED FOR A REMAND REPORT FROM THE AS SESSING OFFICER AS THE ASSESSEE CONTENDED THAT AS PER TAX AUDIT REPORT, ASSESSEE HA D BEEN TRADING ONLY DURING THE YEAR. THE AO SUBMITTED HIS REMAND REPORT VIDE LETTER DATE D 23.4.2009, COPY PLACED AT PAGES 26 TO 30 OF PB. THE AO IN THE REMAND REPORT (PARA 7) STATED THAT ASSESSEE FILED A LIST OF ASSETS DURING THE REMAND PROCEEDINGS UNDER THE H EAD PLANT AND MACHINERY ON WHICH DEPRECIATION IS CLAIMED, BUT NO DOCUMENTARY E VIDENCE IS PRODUCED. THE AO IN THE REMAND REPORT HAS FURTHER STATED THAT ASSESSEE FILE D A LETTER DATED 25.2.2008 STATING; INTER ALIA , THAT DURING THE YEAR, MANUFACTURING ACTIVITY WAS STOPPED DUE TO LOSS, HOWEVER THE OTHER TRADING AND BUSINESS ACTIVITY WAS ON WHER EIN, MAJOR PART OF THE MACHINERY WERE USED FOR CONVERSION, MIXING AND STORAGE PURPOS ES. IN LIEU OF THE USE, THE DEPRECIATION HAS BEEN CLAIMED DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2000-2001. THE AO STATED THAT ASSESSEE HAS FAILED TO FURNISH/PRODUCE THE DOCUMENTARY EVIDENCE CALLED FOR TO PROVE THAT THE MACHINERY WAS PUT TO USE DURING THE YEAR AND IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 3 WAS RIGHTLY DISALLOWED. IN VIEW OF ABOVE, LD CIT(A) VIDE PARA 6.3 OF THE IMPUGNED ORDER, HAS STATED AS UNDER: 6.3 I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE AR AND I FIND THAT THE ASSESSEE HAS CLOSED DOWN MANUFACTURING ACTIVITY . HENCE, NO DEPRECIATION IS ALLOWABLE ON PLANT AND MACHINERY US ED BY THE ASSESSEE FOR MANUFACTURING. HOWEVER, DEPRECIATION ON OTHER ASSETS LIKE BUILDING, MOTOR CAR, ETC, IS ALLOWABLE IRRESPECTIVE OF THE FA CT THAT WHETHER ANY MANUFACTURING WAS DONE BY THE ASSESSEE OR NOT. THE AO IS DIRECTED TO ALLOW DEPRECIATION AS PER INCOME TAX ACT/RULES ON B UILDING AND MOTOR CARS, ETC EXCEPT ON THE PLANT AND MACHINERY USED BY THE ASSESSEE FOR MANUFACTURING ACTIVITY. SINCE NO MANUFACTURING WAS DONE BY THE ASSESSEE, NO DEPRECIATION IS ALLOWABLE ON PLANT AND MACHINERY. THIS GROUND OF APPEAL IS PARTLY ALLOWED. HENCE, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 8. DURING THE COURSE OF HEARING, LD A.R. REITERATED THE FACTS AS STATED BEFORE THE AO DURING THE COURSE OF REMAND PROCEEDINGS THAT THE AS SESSEE DISCONTINUED ITS MANUFACTURING ACTIVITY DUE TO LOSS BUT IT HAD BEEN TRADING DURING THE YEAR. LD A.R. ALSO REFERRED TO PAGES 11 & 12 OF PB AND SUBMITTED THAT THERE WAS SALE OF RS.52.27 CRORES IN THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDE R CONSIDERATION. HE SUBMITTED THAT DURING THE COURSE OF TRADING BUSINESS, ASSESSEE USE D ITS PLANT AND MACHINERY FOR STORAGE PURPOSE. HOWEVER, ASSESSEE COULD NOT SUPPORT THE S AID STATEMENT WITH ANY DOCUMENTARY EVIDENCE THAT PLANT AND MACHINERIES WER E USED BY THE ASSESSEE DURING ITS TRADING BUSINESS. 9. LD D.R. ALSO SUBMITTED THAT NO EVIDENCE HAS BEEN PLACED ON RECORD BY LD A.R. AND THEREFORE, THE ORDER OF LD CIT(A) BE CONFIRMED. 10. WE ON CONSIDERATION OF SUBMISSIONS OF LD REPRES ENTATIVES OF PARTIES AND IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE ON RECORD, THAT THE ASSESSEE USED PLANT AND MACHINERY DURING THE COURSE OF ITS TRADING ACTIVITI ES AS SUBMITTED BEFORE US, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD C IT(A). HENCE, WE REJECT GROUND NO.1(I) OF APPEAL TAKEN BY ASSESSEE. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 4 11. IN GROUND NO.1(II), THE ASSESSEE HAS DISPUTED T HE ORDER OF LD CIT(A) IN CONFIRMING A SUM OF RS.1,05,694 OUT OF RS.4,76,220 DISALLOWED BY THE AO UNDER THE HEAD ADMINISTRATIVE EXPENSES 12. DURING THE RELEVANT ASSESSMENT YEAR, ASSESSEE D EBITED AN AMOUNT OF RS.8,52,435 AS ADMINISTRATIVE EXPENSES. THE AO STA TED THAT THE ASSESSEE COMPANY WAS CLOSED DOWN DURING THE YEAR 1999 BUT STILL DEBITED AN AMOUNT OF RS.8,52,435 AS ADMINISTRATIVE EXPENSES FOR WHICH NO PROOF OR EVIDE NCES WERE PRODUCED. THEREFORE, THE AO DISALLOWED 50% OF THE CLAIM OF THE ASSESSEE WHIC H COMES TO RS.4,76,220 AND ADDED TO THE TAXABLE INCOME OF THE ASSESSEE. BEING AGGRI EVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). 13. LD CIT(A) ASKED THE AO TO SUBMIT REMAND REPORT. LD CIT(A) STATED THAT THE AO IN HIS REMAND REPORT, REITERATED THAT ASSESSEE COUL D NOT ABLE TO PRODUCE EVIDENCE OF RS.1,05,694 AS UNDER: A) CONVEYANCE : RS.24,436 B) PROFESSIONAL-OTHERS : RS. 1,580 C) MOTOR CAR-OTHERS : RS.45,753 D) TRAVELLING EXP. : RS.10,220 E) SUNDRY EXPENSES : RS. 3,737 F) OFFICE REPAIRS-OTHERS : RS.19,968 RS.1,05,694 IN VIEW OF ABOVE, LD CIT(A) CONFIRMED THE DISALLOW ANCE OF RS.1,05,694 AS THE ASSESSEE COULD NOT PRODUCE SUPPORTING EVIDENCES. H ENCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 14. DURING THE COURSE OF HEARING, LD A,.R. COULD NO T CONTROVERT THE FINDINGS OF LD CIT(A) THAT THE ASSESSEE COULD NOT PRODUCE DOCUMENT ARY EVIDENCES IN RESPECT OF ABOVE AMOUNT OF RS.1,05,694 DISALLOWED BY THE AO SAVE AND EXCEPT STATING THAT DOCUMENTS WERE SEIZED BY THE CRIME BRANCH OF MAHARASHTRA POLI CE. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 5 15. SINCE THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH DETAILS OF THE ABOVE EXPENSES, WHICH COULD BE SUBSTANTIATED BY DOCUMENTARY EVIDEN CE, WE FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF GOODYEAR INDIA LTD. V. COMMISSIONER OF INCOME-TAX, 246 ITR 116 (DEL) UPHOLD THE ORDER OF LD CIT(A) AND REJECT GROUND NO.1(II). 16. IN RESPECT OF GROUND NO.1(III), THE AO DISALLOW ED THE CLAIM OF THE ASSESSEE AS THE ASSESSEE COULD NOT PRODUCE THE RECEIPTS TO JUSTIFY THE CLAIM. LD CIT(A) CONFIRMED THE ACTION OF THE AO AFTER OBSERVING THAT EVEN DURING T HE REMAND PROCEEDINGS, ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR THE SAID AMOUNT OF ALLEGED DONATION OF RS.9,000. DURING THE COURSE OF HEARING ALSO BEFORE US, LD A.R . COULD NOT CONTROVERT THE FINDINGS OF LD CIT(A). HENCE, WE UPHOLD THE ORDER OF LD CIT(A) TO DISALLOW THE CLAIM OF THE ASSESSEE OF RS.9,000 UNDER THE HEAD DONATION. HENCE, GROU ND NO.1(III) OF CONCISE GROUND OF APPEAL IS REJECTED. 17. NOW WE TAKE UP APPEAL FOR ASSESSMENT YEAR 2001-02 BEING I.T.A. NO.5189/M/2009. 18. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS: (I) LOSS BY THEFT : RS.2,10,000 (II) ADMN. EXPENSES : RS.3,03,215 (III) ENTERTAINMENT EXP. : RS.1,82,629 19. IN RESPECT OF GROUND NO.1(I) OF APPEAL, IT WAS OBSERVED AT THE TIME OF HEARING THAT THE SAID GROUND IS NOT ARISING OUT OF ORDERS O F AUTHORITIES BELOW. HOWEVER, LD A.R. SUBMITTED THAT AT THE TIME OF REMAND PROCEEDINGS SO UGHT BY THE CIT(A), THE ASSESSEE FURNISHED COPY OF FIR BEFORE THE AO FOR THEFT OF RS .1,60,000 AND REFERRED TO PAGES 45 TO 51 OF PB. HE FURTHER SUBMITTED THAT ASSESSEE HA D ALSO WRITTEN OF RS.50,000 AS SUNDRY DEBTOR SINCE ASSESSEE FAILED TO PRODUCE ANY EVIDENC E WITH REGARD TO THEFT LIKE FIR ETC. TO SUBSTANTIATE HIS SUBMISSION, HE REFERRED COPY OF REMAND REPORT PLACED AT PAGES 32 TO ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 6 36 OF PB. LD D.R. SUBMITTED THAT THE ORDER OF LD C IT(A) IS SILENT ON THIS ISSUE AND, THEREFORE, THE MATTER COULD BE RESTORED BACK TO HIS FILE FOR HIS CONSIDERATION. 20. ON CONSIDERATION OF ABOVE SUBMISSIONS OF LD REP RESENTATIVES OF PARTIES AND ALSO CONSIDERING PARA 8 OF THE REMAND REPORT PLACED AT P AGES 32 TO 36 OF PB R.W. 45 TO 51 OF PB, WE RESTORE THE ISSUE TO THE FILE OF LD CIT(A) T O DECIDE THE CLAIM OF THE ASSESSEE IN RESPECT OF RS.1,60,000 ON MERITS BY A SPEAKING ORDE R. HOWEVER, IN RESPECT OF BALANCE AMOUNT OF RS.50,000, NO SUBMISSIONS WERE MADE BY LD A.R. WE ALSO OBSERVE THAT THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTS AT THE TIM E OF REMAND PROCEEDINGS AND, ACCORDINGLY, THE AO COULD NOT VERIFY THE CLAIM OF T HE ASSESSEE. HENCE, THE CLAIM OF RS.50,000 MADE BY THE ASSESSEE IS REJECTED. ACCORD INGLY, GROUND NO.1(I) IS ALLOWED IN PART FOR STATISTICAL PURPOSES BY RESTORING IT TO LD CIT(A) TO DECIDE AFRESH AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH PARTIES. 21. IN RESPECT OF GROUND NO.1(II)AND (III), LD A.R. SUBMITTED THAT SAME ARE NOT PRESSED FOR. ACCORDINGLY, GROUND NO.1(II) AND (III ) OF THE REVISED GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 22. THE ASSESSEE HAS ALSO TAKEN AN ADDITIONAL GROUN D WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN NOT APPRECIATING EXPLANATION 5 TO SUB-SECTION 1 OF SECT ION 32 OF THE INCOME TAX ACT, 1961. HE FAILED TO APPRECIATE THAT THE PR OVISIONS OF SUB-SECTION 1 OF SECTION 32 SHALL APPLY WHETHER THE ASSESSEE COMP ANY HAS CLAIMED THE DEDUCTION OR NOT IN RESPECT OF DEPRECIATION IN COMP UTING ITS TOTAL INCOME FOR THE ASSESSMENT YEAR 2001-02. 23. AT THE TIME OF HEARING, LD A.R. SUBMITTED THAT SAID ADDITIONAL GROUND TAKEN BY THE ASSESSEE IS NOT PRESSED FOR AS EXPLANATION 5 TO SUB -SECTION 1 OF SECTION 32 IS NOT APPLICABLE TO THE ASSESSMENT YEAR 2001-02. HENCE, ADDITIONAL GROUND OF APPEAL TAKEN BY THE ASSESSEE IS REJECTED. 24. NOW WE TAKE UP APPEAL FOR ASSESSMENT YEAR 2002-03 BEING I.T.A. NO.5190/M/2009. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 7 25. IN THIS APPEAL, THE ASSESSEE HAS FILED CONCISE GROUND OF APPEAL WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN CONFIRMING THE ADDITIONS TOWARDS ADMINISTRATIVE EXPENSES AT RS .1,97,524. 26. THE ASSESSEE CLAIMED AN AMOUNT OF RS.6,51,392 A S ADMINISTRATIVE EXPENSES. THE AO DISALLOWED 50% OF THE CLAIM OF ASSESSEE WHIC H COMES TO RS.3,25.700 ON THE GROUND THAT NO PROOF OR EVIDENCES HAVE BEEN FILED B Y THE ASSESSEE. THE ASSESSEE FILED APPEAL BEFORE LD CIT(A). LD CIT(A) STATED THAT ASS ESSEE COULD NOT FILE DETAILS OF VOUCHERS IN RESPECT OF EXPENSES, DETAILS OF WHICH A RE GIVEN IN PARA 6.2 AT PAGE 4 OF THE IMPUGNED ORDER, AGGREGATING TO RS.1,97,524. ACCORD INGLY, LD CIT(A) DISALLOWED THE CLAIM OF RS.1,97,524 OUT OF RS.3,25,700 DISALLOWED BY THE AO. HENCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 27. AT THE TIME OF HEARING, LD A.R. COULD NOT DISPU TE THE FINDINGS OF LD CIT(A) THAT ASSESSEE FAILED TO PRODUCE ANY EVIDENCE IN RESPECT OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES SUSTAINED BY LD CIT(A). HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD CIT(A). ACCORDINGLY, GROUND OF APPEAL TAKEN BY ASSESSEE IS REJECTED. 28. THE ASSESSEE HAS FILED ADDITIONAL GROUND AS UND ER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN NOT APPRECIATING EXPLANATION 5 TO SUB-SECTION 1 OF SECT ION 32 OF THE INCOME TAX ACT, 1961. HE FAILED TO APPRECIATE THAT THE PROVISIONS OF SUB-SECTION 1 OF SECTION 32 SHALL APPLY WHETHER THE ASSESSEE COMPANY HAS CLAIME D THE DEDUCTION OR NOT IN RESPECT OF DEPRECIATION IN COMPUTING ITS TOTAL INCO ME FOR THE ASSESSMENT YEAR 2002-03. 29. DURING THE COURSE OF HEARING, IT WAS CONCEDED B Y LD A.R. THAT ABOVE ADDITIONAL GROUND IS NOT ARISING OUT OF ORDERS OF AUTHORITIES BELOW. LD A.R. ALSO CONCEDED THAT ASSESSEE DID NOT MAKE ANY CLAIM FOR DEPRECIATION BE FORE THE AO AND NO DETAILS WERE FILED BEFORE HIM. HOWEVER, LD A.R. SUBMITTED THAT THE LIST OF PLANT AND MACHINERIES WERE FILED DURING THE COURSE OF REMAND PROCEEDINGS BEFOR E THE AO. HE SUBMITTED THAT A DIRECTION COULD BE GIVEN TO THE AO TO ALLOW THE CLA IM OF DEPRECIATION TO THE ASSESSEE AS APPLICABLE TO IT. HOWEVER, LD D.R. SUBMITTED THAT THE SAID ADDITIONAL GROUND SHOULD NOT BE ADMITTED AS IT IS NOT ARISING OUT OF ORDERS OF A UTHORITIES BELOW NOR ASSESSEE MADE ANY CLAIM BEFORE THE AUTHORITIES BELOW FOR CLAIM OF DEP RECIATION. THE ASSESSEE ALSO DID NOT ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 8 FILE ANY DETAILS TO CLAIM DEPRECIATION BEFORE THE A UTHORITIES BELOW. HE SUBMITTED THAT ADDITIONAL GROUND SHOULD BE REJECTED. 30. CONSIDERING THE FACTS OF THE CASE, AS MENTIONED HEREINABOVE, WE AGREE THAT THE CLAIM OF DEPRECIATION OF THE ASSESSEE BY WAY OF ADD ITIONAL GROUND BEFORE US IS NOT MAINTAINABLE AS NO DETAILS WERE FILED BY THE ASSESS EE BEFORE AUTHORITIES BELOW. MOREOVER, TO ADJUDICATE THIS GROUND, A PROPER VERI FICATION OF FACTS ARE REQUIRED TO BE CONSIDERED. THE RELEVANT FACTS WERE NOT ADMITTEDLY MADE AVAILABLE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND/OR BEFORE THE FIRST APPELLATE AUTHORITY. IF THE ADDITIONAL EVIDENCES AS CONTENDED BY LD A.R. ARE AD MITTED AT THIS STAGE, THE MATTER WOULD GO BACK TO AO FOR VERIFICATION AND TO ADJUDIC ATE THE CLAIM OF THE ASSESSEE AFRESH. THE ASSESSEE HAS NOT GIVEN ANY REASONS AS TO WHY TH E SAID FACTS COULD NOT BE PLACED BEFORE AUTHORITIES BELOW OR WHEN LD CIT(A) SOUGHT R EMAND REPORT FROM THE AO. A SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL, MUMBAI B ENCHES IN THE CASE OF JAY BHARAT CO.OP. HOUSING SOCIETY LTD VS ITO, 125 ITD 90 (MUM) . IN THE SAID CASE, THE ASSESSEE BEING A CO-OPERATIVE SOCIETY CLAIMED RECEIPT AS EXE MPT FROM TAX. THE AO DID NOT ENTERTAIN THE ASSESSEES CLAIM. LD CIT(A) APPROVED THE ORDER OF AO. THE ASSESSEE RAISED A NEW GROUND BEFORE THE TRIBUNAL THAT THE SA ID AMOUNT IN QUESTION WAS NOT TAXABLE ON THE GROUND OF MUTUALITY. THE TRIBUNAL H ELD THAT THE ISSUE RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL REQUIRE A PROPER VERIF ICATION OF FACTS AND THE RELEVANT FACTS WERE NOT AVAILABLE ON RECORD OR IN THE ASSESSMENT P ROCEEDINGS. IT WAS HELD THAT IF ONE WOULD ADMIT THE SAID GROUND, THEN THE MATTER WOULD BE REQUIRED TO GO BACK TO AO FOR VERIFICATION AND THE ORDER FOR DIRECTING THE AO TO VERIFY THE FACTS AND ADJUDICATE THE CLAIM OF THE ASSESSEE. IT WOULD BE AGAINST THE SPI RIT OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD VS. CIT, 284 ITR 323 (SC). THEREFORE, IT WAS HELD THAT THE CLAIM OF THE ASSESSEE WITH REG ARD TO DOCTRINE OF MUTUALITY COULD NOT BE ENTERTAINED AT THE TRIBUNAL STAGE. IN THE CASE BEFORE US, THERE IS NO DISPUTE TO THE FACT THAT THERE WAS NO CLAIM OF THE ASSESSEE FOR DE PRECIATION BEFORE THE AUTHORITIES BELOW AND THE SAID CLAIM IS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL FOR THE FIRST TIME. CONSIDERING THE FACTS OF THE CASE AND THE FACT THAT NO DETAILS WERE FILED BEFORE THE AUTHORITIES BELOW TO CONSIDER THE CLAIM OF THE ASSE SSEE FOR DEPRECIATION, WE ARE OF THE CONSIDERED VIEW THAT ADDITIONAL GROUND FOR CLAIMING DEPRECIATION IS NOT MAINTAINABLE AS CLAIM OF THE ASSESSEE FOR DEPRECIATION DEPENDS ON T HE FACTUAL DETAILS WHICH THE ASSESSEE ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 9 FAILED TO FURNISH NOT ONLY IN THE RETURN FILED BUT ALSO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE LD CIT(A). HENCE, WE REJECT THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE. 31. NOW WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 2003-04 BEING I.T.A. NO.4600/M/2011. 32. IN GROUND NO.1 OF APPEAL, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.5,09,955 ON ACCOUNT O F CASH IN HAND. 33. THE AO HAS STATED THAT AS PER RETURN OF INCOME IN THE BALANCE SHEET SCHEDULE-8 UNDER THE HEAD CASH AND BANK BALANCE, CASH BALAN CE IS SHOWN AT RS.5,09,555. THE AO HAS STATED THAT IN THE ABSENCE OF ANY PROOF/DETAILS , THE SAID AMOUNT IS ADDED TO THE INCOME OF THE ASSESSEE. IN THE FIRST APPEAL, LD CI T(A) CONFIRMED THE ACTION OF AO BY OBSERVING THAT ASSESSEE FAILED TO FURNISH ANY DETAI LS OR PRODUCE BOOKS OF ACCOUNT. HENCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 34. AT THE TIME OF HEARING, LD A.R. REFERRED PAGE 2 1 OF PB WHICH IS SCHEDULE TO AUDITED BALANCE SHEET AND STATED THAT IN THE HEAD CASH AND BANK BALANCE, THE ASSESSEE HAS SHOWN CASH BALANCE ON HAND AT RS.5,09, 555.72 AS ON 31.3.2003. HE SUBMITTED THAT THE SAID ENTRY IS APPEARING IN THE B OOKS OF ACCOUNT WHICH WAS DULY AUDITED. LD D.R.COULD NOT DISPUTE THE ABOVE FACTS. 35. CONSIDERING THE FACT THAT THE SAID AMOUNT OF RS .5,09,555.72 IS APPEARING IN THE BALANCE SHEET WHICH IS DULY AUDITED, WE DO NOT FIND ANY JUSTIFICATION TO TREAT THE SAID AMOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE. HENC E, WE DELETE THE ADDITION OF RS.5,09,555 BY REVERSING THE ORDERS OF AUTHORITIES BELOW. THEREFORE, GROUND NO.1 OF APPEAL IS ALLOWED. 36. IN GROUND NO.2 OF APPEAL, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN CONFIRMING THE DISALLOWANCE OF 50% OF EXPENSES CLAI MED BY THE ASSESSEE UNDER THE HEAD ADMINISTRATIVE EXPENSES. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 10 37. THE AO IN PARA 7.2 OF THE ASSESSMENT ORDER HAS STATED THAT ASSESSEE DEBITED AN AMOUNT OF RS.26,56,303 AS ADMINISTRATIVE EXPENSES. HE STATED THAT ASSESSEE COMPANY WAS CLOSED DOWN DURING THE YEAR 1999 AND THAT ASSES SEE HAS FAILED TO PRODUCE PROOF OR EVIDENCES FOR DEBITING THE AMOUNT OF RS.26,56,303 A S ADMINISTRATIVE EXPENSES. THE AO IN ABSENCE OF REQUISITE PROOF OF THE CLAIM OF THE A SSESSEE DISALLOWED 50% OF THE CLAIM WHICH COMES TO RS.13,28,150 AND ADDED TO THE INCOME OF THE ASSESSEE. 38. IN THE FIRST APPEAL, LD CIT(A) HAS STATED THAT ASSESSEE PRODUCED COPIES OF BILLS WORTH RS.1,28,945 ONLY. HE HAS FURTHER STATED THAT THE EXPENSES AGGREGATING TO RS.11,99,205 WERE INCURRED IN CASH SUPPORTED BY INT ERNAL VOUCHERS. LD CIT(A) HAS STATED THAT FOR REMAINING AMOUNT OF RS.13,28,150, A SSESSEE FAILED TO PRODUCE ANY PROOF OR THE BOOKS OF ACCOUNT. HE HAS STATED THAT THE RE MAND REPORT WAS SOUGHT FROM THE AO AND ASSESSEE COULD NOT PRODUCE ANY SUPPORTING EVIDE NCE OR BOOKS OF ACCOUNT. IN VIEW OF ABOVE, LD CIT(A) CONFIRMED THE ACTION OF AO. HE NCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 39. AT THE TIME OF HEARING, LD A.R. REFERRED PAGE 6 1 OF PB AND SUBMITTED THAT THE DISALLOWANCE FOR THE ASSESSMENT YEAR 2003-04 IS EXC ESSIVE AS COMPARED TO THE DISALLOWANCE MADE IN THE PRECEDING ASSESSMENT YEAR. HE REFERRED TO PAGE 61 OF PB WHICH CONTAINS A CHART FROM A.Y. 1999-2000 TO 2002- 03 AND STATED THAT THE PERCENTAGE OF EXPENSES ALLOWED WERE 79.79%, 87.68%, 76.44& AND 69.59% RESPECTIVELY FROM A.YS. 1999-2000 TO 2002-03 AND, THEREFORE, THE DISALLOWAN CE, IF ANY, IS TO BE MADE IN THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2003- 04, PROPORTIONATELY FOLLOWING THE PRECEDING ASSESSMENT YEAR. LD D.R. SUPPORTED THE OR DERS OF AUTHORITIES BELOW AND STATED THAT ASSESSEE FAILED TO PRODUCE PROOF OR BOO KS OF ACCOUNT FOR THE CLAIM OF EXPENSES AND, THEREFORE, ORDER OF LD CIT(A) BE CONF IRMED. 40. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF AUTH ORITIES BELOW AND SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES. WE HAVE ALSO PERUSED PAGE 61 OF PB TO WHICH OUR ATTENTION WAS DRAWN BY LD A.R. LD A.R. HAS NOT DISPUTED THE FACT AS STATED BY LD CIT(A) THAT ASSESSEE PRODUCED COPY OF BILLS ONLY FOR RS.1,28,94 5. FURTHER, EXPENSE OF RS.11,99,205 WAS INCURRED IN CASH WHICH WAS SUPPORTED BY INTERNA L VOUCHERS AND FOR THE BALANCE AMOUNT OF RS.13,28,150, ASSESSEE FAILED TO PRODUCE ANY PARTICULARS OR BOOKS OF ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 11 ACCOUNT. THE HONBLE AP HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. TRANSPORT CORPORATION OF INDIA LTD., 256 ITR 701 (AP) HELD THAT UNSUPPORTED PAYMENT IS NOT DEDUCTIBLE. FURTHER, HONBLE APEX C OURT HAS HELD IN THE CASE OF CIT VS. CALCUTTA AGENCY CO., 19 ITR 191 (SC) THAT IF ASSESS EE FAILS TO ESTABLISH THE FACT NECESSARY TO SUPPORT HIS CLAIM FOR DEDUCTION U/S.37 (1), THE CLAIM IS NOT ADMISSIBLE. HONBLE MADRAS HIGH COURT HAS HELD IN THE CASE OF RATNASWAMI (K.S.) V. ADDITIONAL INCOME-TAX OFFICER, 42 ITR 568 (MAD) THAT THE CLAIM CAN BE DISALLOWED IF THE ASSESSEE HAS NOT ESTABLISHED THAT AMOUNT IN QUESTIO N HAS BEEN WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSE OF BUSINESS. SINCE IN THE CASE BEFORE US, ASSESSEE HAS NOT BEEN ABLE TO FURNISH THE REQUISITE PROOF TO ESTABLISH TH AT THE EXPENSES AGGREGATING TO RS.13,28,150 WHICH HAS BEEN DISALLOWED BY AUTHORITI ES BELOW, WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSES OF THE ASSESS EE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF LD A.R. HENCE, WE UPHOLD THE ORDER O F LD CIT(A) AND REJECT GROUND NO.2 OF APPEAL TAKEN BY ASSESSEE. 41. IN GROUND NO.3, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN DISALLOWING THE COMMISSION EXPENSES OF RS.20,02,250. 42. THE RELEVANT FACTS AS STATED BY LD CIT(A), ARE THAT THE ASSESSEE UNDER THE ADMINISTRATIVE HEAD ALSO PAID A COMMISSION OF RS.20 ,02,250. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAID PAYMENT BUT THE ASSESSEE DID N OT FURNISH ANY DETAILS. THEREFORE, THE AO IN THE ABSENCE OF ANY RECORD OR PROOF, DISAL LOWED THE CLAIM OF THE ASSESSEE VIDE PARA 7.3 OF THE ASSESSMENT ORDER. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE CIT(A). 43. IT WAS CONTENDED BEFORE THE CIT(A) THAT THE SAI D COMMISSION WAS PAYABLE TO M/S. GURUDEV CHEMOX INDUSTRIES, BANGARE AND WAS PAI D IN F.Y. 2003-04 I.E. RELEVANT TO ASSESSMENT YEAR 2004-05. LD CIT(A) HAS STATED THAT NOTICE UNDER SECTION 133(6) OF THE I.T.ACT WAS ISSUED WHICH WAS RETURNED BACK BY THE P OSTAL AUTHORITIES WITH THE REMARKS ADDRESSEE LEFT. HE HAS STATED THAT NO FURTHER VE RIFICATION COULD BE DONE AND THE ASSESSEE WAS ALSO UNABLE TO EXPLAIN THE SERVICES RE NDERED BY M/S. GURUDEV CHEMOX INDUSTRIES, BANGARE, FOR WHICH COMMISSION WAS PAID TO THEM. LD CIT(A) HAS STATED THAT EVEN DURING REMAND PROCEEDINGS, ASSESSEE FAILED TO SUBSTANTIATE WITH EVIDENCE. HENCE, ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 12 LD CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE AO . ACCORDINGLY, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 44. DURING THE COURSE OF HEARING, LD A.R. REITERATE D THE ABOVE SUBMISSION. HE FURTHER REFERRED PAGE 129 OF PB WHICH IS A COPY OF BANKS STATEMENT AND SUBMITTED THAT THE SUM OF RS.20 LAKHS WAS PAID BY CHEQUE TO M/S. GURUDEV CHEMOX INDUSTRIES, BANGARE. LD A.R. FURTHER REFERRED TO PAGE 130 OF P B WHICH IS A COPY OF CERTIFICATE DATED 29.3.2005 OF THE RECIPIENT OF THE ALLEGED COMMISSIO N. SAVE AND EXCEPT THE ABOVE DOCUMENT, ASSESSEE COULD NOT FURNISH ANY OTHER EVID ENCE. FURTHER, ASSESSEE SOUGHT PERMISSION TO FILE ADDITIONAL EVIDENCE ALONGWITH AF FIDAVIT. THE SAME WERE FOUND TO BE COPY OF LEDGER COPIES FOR THE PERIOD 1.4.2002 TO 31 .3.2003 RUNNING INTO PAGES 1 TO 97 OF PB. DURING THE COURSE OF HEARING, A QUERY WAS RAIS ED TO THE ASSESSEE WHETHER THE TDS WAS DEDUCTED ON THE ALLEGED PAYMENT OF COMMISSION T O M/S. GURUDEV CHEMOX INDUSTRIES, BANGARE. LD A.R. COULD NOT REPLY ANYTH ING TO ESTABLISH AS TO WHETHER ANY TDS WAS DEDUCTED ON THE PAYMENT OF ALLEGED COMMISSI ON. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMI TTED THAT EVEN DURING THE REMAND PROCEEDINGS, ASSESSEE HAS NOT PLACED ANY EVIDENCE O N RECORD TO JUSTIFY THE ALLEGED CLAIM OF PAYMENT OF COMMISSION. 45. WE HAVE CONSIDERED THE ORDERS OF AUTHORITIES BE LOW AND SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES. CONSIDERING THE FACT T HAT ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH WHETHER ANY SERVICE WAS RECEIVED TO THE A SSESSEE FOR THE ALLEGED PAYMENT OF COMMISSION OF RS.20,02,250 TO M/S. GURUDEV CHEMOX I NDUSTRIES, BANGALORE. MERELY FILING OF SAID CERTIFICATE AT PAGE 130 OF PB DOES NOT ESTABLISH THAT ANY SERVICE WAS RECEIVED TO THE ASSESSEE ON ACCOUNT OF WHICH THE SA ID COMMISSION PAYMENT WAS ALLEGED PAID TO THE ASSESSEE TO M/S. GURUDEV CHEMOX INDUSTR IES, BANGALORE. IN THE ABSENCE OF ANY DOCUMENTS ON RECORD, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD CIT(A). HENCE, GROUND NO.3 IS REJECTED. 46. IN GROUND NO.4, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN CONFIRMING THE ADDITION BY DEBITING RS.19 LAKHS BEING CASH DEPOSIT ED IN BANK. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 13 47. THE AO HAS STATED THAT ON PERUSAL OF BANK STATE MENT OF CORPORATION BANK ACCOUNT NO.6252 FROM 3.4.2002 TO 31.3.3003, THE ASS ESSEE COMPANY HAS DEPOSITED IN CASH RS.19 LAKHS. HE HAS STATED THAT ASSESSE WAS U NABLE TO PRODUCE BOOKS OF ACCOUNT AS WELL AS DETAILS ETC. HE HAS FURTHER STATED THAT ASSESSEE WAS UNABLE TO PROVE THAT THESE ARE SALES TRANSACTIONS. ACCORDINGLY, THE AO HAS CONSIDERED THE SAID AMOUNT OF RS.19 LAKHS AS UNEXPLAINED CASH CREDIT AND ADDED TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). 48. ON BEHALF OF ASSESSEE, IT WAS CONTENDED THAT AS SESSEE COMPANY SOLD MATERIALS TO CRYSTAL CHEM INDUSTRIES AT VAPI, GURUDEV CHEMOX IN DUSTRIES AT BANGALORE AND SWETA ENTERPRISES AT SURAT IN THE YEAR 1998-99 AND 1999-2 000, WHICH WERE RECOVERED DURING THE ASSESSMENT YEAR 2002-03. SUBSEQUENTLY, THE SAI D CASH WAS DEPOSITED INTO BANK. IT WAS STATED THAT THE ASSESSEE WAS HAVING VARIOUS CUS TOMERS AT THE SAID PLACES AND THEY WERE CALLED AND GOODS WERE SOLD ON THE SPOT FOR CAS H. THE ASSESSEE HAS STATED THAT NO DATA WAS KEPT FOR PARTY-WISE SALES. IT WAS FURTHER EXPLAINED THAT THE SUNDRY DEBTORS WERE REDUCED TO THE EXTENT OF GOODS SOLD. LD CIT(A ) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND STATED THAT ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM. HE HAS FURTHER STATED THAT T HE CLAIM MADE BY THE ASSESSEE WITH REGARD TO REDUCTION IN SUNDRY DEBTOR IS NOT VERIFIA BLE FROM THE RETURN OF INCOME. HE HAS FURTHER STATED THAT THE CLAIM OF THE ASSESSEE WITH REGARD TO UNEXPLAINED CASH CREDIT IS NOT VERIFIABLE. LD CIT(A) HAS FURTHER STATED THAT DURING THE REMAND PROCEEDINGS, ASSESSEE HAS SHOWN INABILITY TO PRODUCE BOOKS OF AC COUNT AND SUPPORTING DOCUMENTS STATING THAT THE BOOKS OF ACCOUNT ARE STILL IN THE CUSTODY OF VARIOUS LAW ENFORCEMENT AGENCIES. LD CIT(A) CONFIRMED THE ACTION OF AO AS NO NEW EVIDENCE WAS PRODUCED BY THE ASSESSEE BEFORE THE AO DURING THE REMAND PROCEE DINGS. HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 49. DURING THE COURSE OF HEARING, LD A.R. REITERATE D THE FACTS AS STATED BEFORE THE AUTHORITIES BELOW. HE FURTHER SUBMITTED THAT IN TH E PRECEDING ASSESSMENT YEAR SUCH CLAIM MADE BY THE ASSESSEE ON ACCOUNT OF SALE OF TH E RETURNED GOODS WAS ALLOWED BY LD CIT(A) AND, THEREFORE, THERE IS NO JUSTIFICATION NO T TO ACCEPT THE CLAIM FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 14 50. LD D.R. SUPPORTED THE ORDER OF LD CIT(A) AND SU BMITTED THAT IN THE ABSENCE OF ANY DOCUMENT OF THE SAID CASH DEPOSIT AGGREGATING T O RS.19 LAKHS, IN THE BANK OF THE ASSESSEE OUT OF SALE OF RETURNED GOODS, LD CIT(A) IS JUSTIFIED TO CONFIRM THE ACTION OF AO. HE SUBMITTED THAT EVEN IN THE REMAND PROCEEDING S, ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUBSTANTIATE HIS SUBMISSION. 51. WE HAVE CONSIDERED THE ORDERS OF AUTHORITIES BE LOW AND SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES. IT IS A FACT THAT ASSE SSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE REGARDING THE SALE OF RETURNED GOODS FROM THE ABOVE NAMED THREE PARTIES. LD A.R. CONCEDED TO LD CIT(A) THAT NO DATA WAS ALSO KE PT FOR SALE OF THE SAID GOODS. THEREFORE, THE CONTENTION OF LA A.R. IS NOT SUPPORT ED BY ANY DOCUMENT AND IN THE ABSENCE OF WHICH, WE DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF LD CIT(A). ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A) BY RE JECTING GROUND NO.4 TAKEN BY THE ASSESSEE. 52. NOW WE TAKE UP APPEAL FOR ASSESSMENT YEAR 2004-05 BEING I.T.A NO.4601/M/2011. 53. IN GROUND NO.1 OF APPEAL, THE ASSESSEE HAS DISP UTED THE ORDER OF LD CIT(A) IN CONFIRMING RS.4,39,472 ON ACCOUNT OF CASH IN HAND A S APPEARING IN THE BALANCE SHEET. 54. THE FACTS AND THE REASONING GIVEN BY AUTHORITIE S BELOW FOR MAKING THE AFORESAID ADDITION OF RS.4,39,472 ARE SIMILAR TO GROUND NO.1 OF APPEAL FOR ASSESSMENT YEAR 2003- 04, WHICH WE HAVE DISCUSSED HEREINABOVE IN PARA 35. CONSIDERING THE REASONING GIVEN BY US IN PARA 35 HEREINABOVE, WE DELETE THE ADDITIO N OF RS.4,39,478 BY ALLOWING GROUND NO.1 TAKEN BY THE ASSESSEE. 55. IN GROUND NO.2 OF APPEAL, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN CONFIRMING THE DISALLOWANCE OF 50% OF THE EXPENSES UNDER THE HEAD ADMINISTRATIVE EXPENSES. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 15 56. THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.3,65,7 64 UNDER THE HEAD ADMINISTRATIVE EXPENSES. THE AO DISALLOWED 50% O F THE CLAIM OF THE ASSESSEE I.E. RS.1,82,880 AS ASSESSEE COULD NOT PRODUCE REQUISITE PROOF OF INCURRING THE EXPENSES. LD CIT(A) CONFIRMED THE ACTION OF AO AFTER OBSERVING T HAT ASSESSEE COULD PRODUCE DETAILS OF THE EXPENSES OF RS.1,36,500 AND FOR RS.46,380, WAS INCURRED IN CASH WERE SUPPORTED BY INTERNAL VOUCHERS. LD CIT(A) HAS STATED THAT NO SU PPORTING OR ORIGINAL VOUCHERS WERE FURNISHED BY THE ASSESSEE. HE HAS FURTHER STATED T HAT DURING THE REMAND PROCEEDINGS, ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNT AND OTH ER SUPPORTING DOCUMENTS. THUS, LD CIT(A) CONFIRMED THE ACTION OF AO TO DISALLOW THE S UM OF RS.1,82,880. HENCE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 57. DURING THE COURSE OF HEARING, LD A.R. MADE HIS SUBMISSIONS ON THE LINE OF SUBMISSIONS MADE IN GROUND NO.2 OF APPEAL FOR ASSES SMENT YEAR 2003-04, WHICH, WE HAVE MENTIONED HEREINABOVE. 58. CONSIDERING THE REASONING AND FACTS OF THE CASE AS MENTIONED HEREINABOVE IN PARA 40 WHILE DISPOSING OFF GROUND NO.2 OF APPEAL F OR ASSESSMENT YEAR 2003-04, WE UPHOLD THE ORDER OF LD CIT(A) AND REJECT GROUND NO. 2 OF THE APPEAL TAKEN BY THE ASSESSEE. 59. IN GROUND NO.3, ASSESSEE HAS DISPUTED THE ORDER OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.36,20,000 MADE BY THE AO FOR CASH DE POSIT IN BANK DURING THE YEAR. 60. DURING THE COURSE OF HEARING, LD A.R. MADE HIS SUBMISSIONS ON THE LINE OF SUBMISSIONS AS MADE IN GROUND NO.4 OF APPEAL FOR AS SESSMENT YEAR 2003-04. 61. THIS GROUND IS SIMILAR TO GROUND NO.3 FOR ASSES SMENT YEAR 2003-04 WHICH WE HAVE DISCUSSED IN PARAS 47 TO 50 AND FOR THE REASON S GIVEN BY US IN PARA 51 HEREINABOVE, WE UPHOLD THE ORDER OF LD CIT(A) AND R EJECT GROUND NO.3 TAKEN BY THE ASSESSEE. ITA NO.5188/MUM/2009: ASSESSMENT YEAR: 2000-01 ITA NO.5189/MUM/2009: ASSESSMENT YEAR: 2001-02 ITA NO.5190/MUM/2009: ASSESSMENT YEAR: 2002-03 ITA NO.4600/MUM/2011: ASSESSMENT YEAR: 2003-04 ITA NO.4601/MUM/2011: ASSESSMENT YEAR: 2004-05 16 62. IN THE RESULT, APPEALS FOR ASSESSMENT YEAR 2000 -2001 AND 2002-03 ARE DISMISSED, APPEAL FOR ASSESSMENT YEAR 2001-02 IS AL LOWED IN PART FOR STATISTICAL PURPOSES AND APPEALS FOR ASSESSMENT YEAR 2003-04 AND 2004-0 5 ARE ALLOWED IN PART. PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2012 SD/- (G.E.VEERABHADRAPPA) PRESIDENT SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 13 TH JULY , 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),14, MUMBAI 4. COMMISSIONER OF INCOME TAX, 6, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI