DCIT, New Delhi V. M/s. Pearl DrinksLtd., New Delhi

ITA 5307/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4590 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 26-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUSHMA SINGH
• Keywords: Depreciation; Income from undisclosed sources; Search and seizure; Document seized; Principle of natural justice; Earning of tax free income; Documents seized
• Section: 45(2); 43B; 40A(3); 44AB; 43; 13; 145; 37; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.5061/DEL/2015 ASSESSMENT YEAR: 2012-13 M/S. PEARL DRINKS LIMITED 702, ANSAL BHAWAN, 16, K.G.MARG, NEW DELHI-110001 PAN NO.AAACP1210C VS. ACIT CENTRAL CIRCLE -07 NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.5307/DEL/2015 ASSESSMENT YEAR: 2012-13 DCIT CENTRAL CIRCLE 7 NEW DELHI VS. M/S. PEARL DRINKS LIMITED 702, ANSAL BHAWAN, 16, K.G.MARG, NEW DELHI-110001 PAN NO.AAACP1210C (APPELLANT) (RESPONDENT) APPELLANT BY SH. P. C. YADAV, ADVOCATE RESPONDENT BY SMT. SUSHMA SINGH, CIT DR DATE OF HEARING: 29/01/2020 DATE OF PRONOUNCEMENT: 25/02/2020 ORDER PER R.K PANDA, AM: THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED B Y THE ASSESSEE AND THE SECOND ONE FILED BY THE REVENUE AN D ARE DIRECTED AGAINST THE ORDER DATED 10.06.2015 OF THE CIT(A) 24, NEW DELHI PAGE | 2 RELATING TO A.Y. 2012-13. FOR THE SAKE OF CONVENIEN CE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER. ITA NO.5061/DEL/2015 ( BY ASESSEE FOR A.Y.2012-13) 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1 . THE ORDER PASSED BY THE HONBLE CIT(A) IS BAD IN LA W, WRONG ON FACTS AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. (A) THE LD CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS IN CONFIRMING THE ADDITION OF RS.6,26,000/- MADE BY LD AO U/S 40A(3) WITHOUT APPRECIATING THE FACT THAT THE PAYMENT REPRESENTS ONLY ADVANCE / IMPREST GIVEN TO THE EMPLOYEES OF THE APPELLANT COMPANY FOR INCURRING TH E EXPENDITURE. HENCE THE ADDITION OF RS.6,26,000/- U/ S 40A(3) DESERVES TO BE DELETED IN FULL. (B) THE LD CIT(A) HAS FAILED TO APPRECIATE THAT THE EXPENDITURE INCURRED BY THE EMPLOYEES IN EACH CASE W AS LESS THAN RS.20,000/- AND THEREFORE THE PROVISIONS O F SECTION 40A(3) ARE NOT APPLICABLE AT ALL. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND, DELE TE FOREGO OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS T HE ABOVE GROUNDS DUE TO SMALLNESS OF THE AMOUNT FOR WHICH TH E LD. DR HAS NO OBJECTION. ACCORDINGLY THE GROUNDS RAISED BY TH E ASSESSEE ARE DISMISSED. PAGE | 3 ITA NO.5307/DEL/2015 (BY REVENUE FOR A.Y. 2012-13) 4. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : - 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW AN D ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 8,58,68,992/- ON ACCOUNT OF INCREASED PROFIT AFTER INVOKING PROVISION OF SEC. 1 45(2) OF THE I.T. ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS THAT BOOKS O F ACCOUNTS WERE NOT REJECTED MERELY BECAUSE OF LOW PROFIT RATE, RATHER THEY WERE REJECTED BECAUSE THE ASSESSEE DID FURNISH ANY DOCUMENTARY EV IDENCE TO EXPLAIN THE ABRUPT FALL IN NET PROFIT RATE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 8,58,68,992/- ON THE GROUNDS OF NON-FOLLOWING OF PRINCIPLE OF NATURAL JUSTICE, WHEN IT HAS CO-TERMINUS POWER AS OF A.O. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETH ER THE CIT(A) HAS JUSTIFIED IN HOLDING THAT THE 'ADDITIONAL INCOM E' OF RS. 3,37,59,400/- SURRENDERED BY THE ASSESSEE DURING SE ARCH CAN BE INCLUDED IN REGULAR P & L ACCOUNT OF THE ASSESSEE. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ AL L THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 5. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF BEV ERAGES UNDER THE BRAND NAME PEPSI, MIRINDA, 7 UP, MIRINDA LEMON, EVERVESS SODA ETC. AND DERIVES INCOME FROM BUSINESS AND PROF ESSION. A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE IT ACT WAS CARRIED PAGE | 4 OUT ON M/S. JAIPURIA GROUP OF CASES ON 27.03.2012. WARRANT OF AUTHORITSATION U/S. 132 OF THE ACT WAS ALSO ISSUED IN THE NAME OF THE ASSESSEE. IN RESPONSE TO NOTICE U/S. 142 (1), THE ASSESSEE FILED ITS RETURN OF INCOME ON 10.05.2013 DECLARING LOSS OF RS.11,97,54,987/-. THE AO DURING THE COURSE OF ASS ESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS SURRENDERED AN AMOUNT OF RS.9,15,00,000/- IN ITS NAME ON ACCOUNT OF ANY D ISCREPANCY IN THE SEIZED IMPOUNDED ANNEXURE AND OTHERS. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE, IN ITS, REPLY FURNISHED THE FOLLOWING REVISED CHART SHOWING THE SURRENDERED AMO UNT, THE DETAILS OF WHICH ARE AS UNDER :- SL. NO. PARTICULARS AMOUNT (IN RS.) 1 ON ACCOUNT OF INVESTMENT IN SHARES OF M/S. PEARL BOTTLINGS PVT. LTD. 2,97,19,000/ - 2 ON ACCOUNT OF FIXED ASSETS 40,40,400/ - TOTAL 3,37,59,400/ - 6. THE AO ANALYSED THE MANNER OF THE ABOVE SURRENDE RED AMOUNT BY OBSERVING AS UNDER :- IN THIS REGARD IT IS IMPORTANT TO ANALYZE THE MANNE R IN WHICH THE SURRENDER OF ABOVE RS. 3,37,59,400/- HAS BEEN MADE BY THE ASSESSEE IN THE RETURN OF INCOME. IT IS SEEN FROM THE ABOVE CHA RT, THAT THE ASSESSEE HAS SURRENDERED RS. 2,97,19,000/- UNDER THE HEAD I NVESTMENT IN SHARES AND TO RS. 40,40,400 UNDER THE HEAD FIXED ASSETS. HOWEVER, THE SAME HAVE BEEN FOUND TO BE CREDITED IN THE P&L ACCOUNT UNDER THE PAGE | 5 HEAD ADDITIONAL INCOME. THE CREDIT ENTRY OF ADDL INCOME OF RS. 3,37,59,400/-. IN THE P & L A/C APPEARS JUST BEFORE CLAIMING THE EXPENSES. HOWEVER, BY CREDITING THE ADDITIONAL INC OME JUST BEFORE CLAIMING THE EXPENSES IN THE P&L ACCOUNT, THE ASSES SEE HAS SET IT OFF AGAINST THE EXPENSES FOR ARRIVING AT THE NET PROFIT . BY FOLLOWING THIS METHODOLOGY THE ASSESSEE HAS DERIVED PROFITS OF RS. 29 CRORE (0.79%) FROM THE P & L ACCOUNT. LET US EXAMINE THE NET PRO FITS OF THE ASSESSEE IN THE LAST 3 IMMEDIATELY PRECEDING FINANCIAL YEARS . THIS IS GIVEN BELOW : SL. NO. F.Y. TURNOVER (IN CRORE) NET PROFIT ( IN CRORES) NET PROFIT % 1 2008 - 09 189.01 8.24 4.37% 2 2009 - 10 234.92 6.19 2.63% 3 2010 - 11 260.79 3.45 1.32% FROM THE ABOVE, IT IS SEEN THAT THE N. P. OF THE AS SESSEE HAS RANGED, FROM 1.32% TO 4.27% IN THE LAST THREE FINAN CIAL YEARS. IT MAY BE NOTED THAT THESE NET PROFITS HAVE ARISEN T O THE ASSESSEE IN THESE FINANCIAL YEARS WITHOUT DECLARING ANY ADDITIONAL INCOME IN THE P & L ACCOUNT. THIS MEANS THAT THE ASSESSEE HAS EARNED PROFITS IN THESE FINANCIAL YEARS IN THE RANGE OF 1.3% TO 4.37% IN ITS REGULAR COURSE OF BUS INESS. 7. THE AO ISSUED A DETAILED QUESTIONNAIRE TO THE AS SESSEE ASKING HIM TO EXPLAIN THE ADDITIONAL INCOME CREDITE D IN THE P & L ACCOUNT AND ALSO TO JUSTIFY THE VARIOUS EXPENSES CL AIMED IN THE P & L ACCOUNT. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE PAGE | 6 HE OBSERVED THAT THE NET PROFIT OF THE PRECEDING FI NANCIAL YEARS AS WELL AS THE CURRENT FINANCIAL YEARS ARE AS UNDER :- S. NO. F. Y. TURNOVER (IN CRORE) NET PROFIT (IN CRORE) NET PROFIT% 1 2008 - 09 189.01 8.24 4.37% 2 2009 - 10 234.92 6.19 2.63% 3 2010 - 11 260.79 3.45 1.32% 4 2011 - 12 309.99 - 0.87 (WITHOUT ADDITIONAL INCOME) - 0.28% 8. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE A SSESSEE THE AO DETERMINED THE NET PROFIT AT RS.8,58,68,992/- AN D FURTHER MADE ADDITION OF RS.3,37,59,400/- TO THE TOTAL INCO ME OF THE ASSESSEE BY OBSERVING AS UNDER :- A. FIRST, IT HAS TO BE SEEN WHAT WOULD BE THE NET P ROFITS OF THE ASSESSEE IF THE SEARCH HAD NOT TAKEN PLACE. AS PER THE FINANCIALS FILED BY THE ASSESSEE, AN ADDITIONAL INCOME OF RS. 3,37,59,400/- HAS BEEN CREDITED IN THE P&L ACCOUNT AS INCOME DECLARED DUE TO UNACCOUNTED AND UNDISCLOSED DOCUMENTS FOUND DURING SEARCH. THIS MEANS THAT THE ASSESSEE HAS TAKEN THE NET UNDISCLOS ED INCOME TO THE P & L ACCOUNT WITHOUT BOTHERING TO MAKE ANY CON SEQUENTIAL CHANGES TO ITS PROFIT AND LOSS ACCOUNT OTHERWISE. I F NO SEARCH SITUATION IS BEING APPLIED, THEN THE ADDITIONAL INC OME HAS TO BE TAKEN OUT FROM THE P&L ACCOUNT, AND THE REGULAR PRO FITS OF THE ASSESSEE WILL HAVE TO BE COMPUTED WITH RESPECT TO T HE REMAINING AMOUNTS DEBITED AND CREDITED IN THE P&L ACCOUNT AND THE BALANCE PAGE | 7 SHEET. B. BY TAKING OUT THE ADDITIONAL INCOME OF RS . 3,37,59,400/- FROM THE P&L ACCOUNT, THE NET PROFITS OF THE ASSESS EE ARE REDUCED FROM RS. 2,49,63,663/- TO RS. (-)87,95,737/- BEING 0.79% AND (- )0.28% OF THE GROSS TURN OVER RESPECTIVELY. THE LAT TER (-)0.28% REPRESENTS THE STATE OF AFFAIRS OF THE REGULAR FINA NCIALS OF THE ASSESSEE IN THE ABSENCE OF SEARCH. C. THE NET PROFIT OF (-)0.28% IS PHENOMENALLY LOW A S COMPARED TO THE IMMEDIATELY PRECEDING 3 FINANCIAL YEARS (SUPRA) WHI CH HAVE BEEN DRAWN WITHOUT ANY ADDITIONAL INCOME. D. AS ALREADY STATED ABOVE THE LOW PERCENTAGE OF NE T PROFIT CANNOT BE SUBSTANTIATED BY THE ASSESSEE DESPITE VARIOUS OP PORTUNITIES PROVIDED DURING THE ASSESSMENT PROCEEDINGS. THE ASS ESSEE COULD NOT PRODUCED ANY DETAILS, CONFIRMATIONS, BILLS & VO UCHERS OR BOOKS OF ACCOUNTS TO SUBSTANTIATE THE FINANCIAL RESULT IN TH E P&L ACCOUNT. EVEN PROPER DETAILS WERE SUBMITTED TILL THE FAG END OF THE YEAR I.E. ON 14.03.2014. NO BOOKS OF ACCOUNTS WERE ALSO PRODUCED FOR VERIFICATION. THE ASSESSEE ALSO DID NOT APPEAR INSP ITE OF BEING PROVIDED A FINAL OPPORTUNITIES ON 18.03.2014. E. IN THE ABOVE BACKGROUND THE FINANCIAL RESULTS SH OWN BY THE ASSESSEE (AFTER EXCLUDING THE ADDITIONAL INCOME) CA NNOT BE ACCEPTED AND ARE REJECTED U/S 145 OF THE I.T. ACT, 1961. F. THE STRATEGY ADOPTED BY THE ASSESSEE TO CAMOUFLA GE THE ACTUAL FINANCIAL RESULTS BY CREDITING THE ADDITIONAL INCOM E TO THE P&L ACCOUNT IS NOT ACCEPTABLE. BY DOING THIS THE ASSESS EE HAS ANNULLED THE ENTIRE EFFECT OF THE SURRENDER MADE DURING THE COURSE OF SEARCH AS WELL AS IN THE RETURN OF INCOME. G. IT IS PERTINENT TO MENTION THAT THE ASSESSEE HAS NOT RETRACTED THE SURRENDER MADE BY IT DURING THE COURSE OF SEARCH. I T IS ONLY THE MANNER IN WHICH THE SURRENDER HAS BEEN MADE THAT IS OBJECTIONABLE, AS IT NULLIFIES ITS EFFECT BY INCREASING THE NET PR OFITS THAT SHOULD HAVE BEEN THERE IN ANY CASE IF THE SEARCH/SURRENDER HAD NOT TAKEN PLACE. THE ASSESSEE HAS ARTIFICIALLY REDUCED ITS NET PROFI TS BY INFLATING PAGE | 8 EXPENSES AND THERE AFTER CAMOUFLAGING THEM BY CREDI TING THE ADDITIONAL INCOME IN THE P & L ACCOUNT. H. THE SURRENDER OF RS.3,37,59,400/- WILL THEREFORE BE SEPARATELY ADDED TO THE NET PROFITS, AFTER BRING THE LATER AT PAR WITH THE NET PROFITS OF THE IMMEDIATELY PRECEDING YEARS AS HAS A LREADY BEEN DONE IN THE PARA ABOVE. THIS IS THE INCOME EARNED BY TH E ASSESSEE FROM ITS UNDISCLOSED SOURCES. THE NET PROFIT (WITHOUT A DDITIONAL INCOME) IS THEREFORE, TAKEN AT RS.8,58,68,992/-. THE UNDISCLO SED INCOME OF RS.3,37,59,400/- AS DECLARED BY THE ASSESSEE ITSELF , WILL THEREFORE BE ADDED TO IT. 9. AFTER MAKING VARIOUS ADJUSTMENTS THE AO DETERMIN ED THE TOTAL LOSS OF THE ASSESSEE AT RS.2,50,90,260/- AS A GAINST THE RETURNED LOSS OF RS.11,97,54,987/- THE COMPUTATION OF WHICH IS AS UNDER :- PROFITS & GAIN OF BUSINESS AND PROFESSION AS DISCUS SED ABOVE: 8,58,68,992 ADD: ADDITIONAL INCOME AS DISCUSSED ABOVE 3,37,59,400 ADD: DEPRECIATION DISALLOWED 148555340 EXCISE DUTY ON CLOSING STOCK OF RAW MATERIAL 7836164 BREAKAGE OF BOTTLE/ SHELLS DEBITED IN PROFIT & LOSS 1380366 LOSS ON SALE OF FIXED ASSET 643198 BREAKAGE OF WOODEN PALLETS DEBITED IN P&L ' 661104 DISALLOWED EXPENSES RELATED TO EXEMPT INCOME 2094380 DISALLOWED U/S 37 1103955 DISALLOWED U/S 43B 2671076 164945583 LESS: EXCISE DUTY ON OPENING STOCK OF RAW MATERIAL 5300687 SCRAP SALE OF BOTTLES 1499219 PAGE | 9 ALLOWED U/S 43B 2291523 ALLOWED DEPRECIATION 300572805 -309664234 TOTAL TAXABLE INCOME (-) 25090259 ROUNDED OFF (-) 25090260 10. IN APPEAL THE LD. CIT(A) DELETED THE ADDITION O F RS.8,58,68,922/- MADE BY THE AO BY OBSERVING AS UND ER :- 4.1.4 I HAVE CONSIDERED THE SUBMISSION OF THE AR, A SSESSMENT ORDER AND THE REMAND REPORTS AS WELL AS THE REMARKS OF THE JOT. FROM THE ASSESSMENT ORDER, IT IS OBSERVED THAT THE A.O. HAS TAKEN NOTE OF NET PROFIT RATIO OF 0.79% FOR THE CUR RENT PREVIOUS YEAR AS COMPARED TO NET PROFIT RATE OF 1.32% TO 4.37% FOR THE PAST THREE FINANCIAL YEARS. FURTHER HE HAS ALSO NOTED THAT IF THE SURRENDERED AMOUNT OF 3.37% IS TAKEN OUT FROM THE P &L ACCOUNT, THE NET PROFIT RATIO COMES TO (-) 0.28%. THUS HE HAS CONCLUDED THAT THERE IS A ST EEP FALL IN NET PROFIT DECLARED BY THE ASSESSEE AND IT WAS NECESSARY FOR HIM TO EXAMINE TH E CLAIM OF VARIOUS EXPENSES DEBITED TO P&L ACCOUNT. HE HAS, ISSUED A DETAILED QUESTIONNAIR E ON 1.11.13. THE APPELLANT HAS FURNISHED INFORMATION AS REQUIRED BY THE QUESTIONNAIRE, IN PA RTS. AO HAS CITED CERTAIN INADEQUACIES ON THE PART OF THE APPELLANT IN COMPLYING WITH THE REQ UIREMENTS OF THE QUESTIONNAIRE. HE HAS NOTED THAT ON 18.3.14, NO ONE APPEARED FROM THE ASS ESSEES SIDE. THEREAFTER, HE HAS PROCEEDED TO REJECT THE BOOKS OF ACCOUNT AND ASSESSED THE INC OME ON ESTIMATION BY ADOPTING THE NET PROFIT RATE EQUIVALENT TO AVERAGE OF THE PAST 3 YEA RS NET PROFIT. THE MAIN CONCLUSION DRAWN BY THE A.O. AS FOUND AT PAGES 9 TO 11 OF THE ASSESSMEN T ORDER ARE AS UNDER:- A. FIRST, IT HAS TO BE SEEN WHAT WOULD BE THE NET P ROFITS OF THE ASSESSEE IF THE SEARCH HAD NOT TAKEN PLACE. AS PER THE FINANCIALS FILED BY THE ASS ESSEE, AN ADDITIONAL INCOME OF RS. 3,37,59,400/- HAS BEEN CREDITED IN THE P&L ACCOUNT AS INCOME DECLARED DUE TO UNACCOUNTED AND UNDISCLOSED DOCUMENTS FOUND DURING SEARCH. THIS MEANS THAT THE ASSESSEE HAS TAKEN THE NET UNDISCLOSED INCOME TO THE P&L ACCOUNT WITHOUT B OTHERING TO MAKE ANY CONSEQUENTIAL CHANGES TO ITS PROFIT AND LOSS ACCOUNT OTHERWISE. I F NO SEARCH SITUATION IS BEING APPLIED, THEN THE ADDITIONAL INCOME HAS TO BE TAKEN OUT FROM THE P&L ACCOUNT, AND THE REGULAR PROFITS OF THE ASSESSEE WILL HAVE TO; BE COMPUTED WITH RESPECT TO THE REMAINING AMOUNTS DEBITED AND CREDITED IN THE P&L ACCOUNT AND THE BALANCE SHEET. B. BY TAKING OUT THE ADDITIONAL INCOME OF RS. 3,37, 59,400/- FROM THE P&L ACCOUNT, THE NET PROFITS OF THE ASSESSEE ARE REDUCED FROM RS. 2, 49,63,663/- TO RS. (-)87,95,737/- BEING 0.79% AND (-)0.28% OF THE GROSS TURN OVER RESPECTIV ELY. THE LATTER (-)0.28% REPRESENTS THE STATE OF AFFAIRS OF THE REGULAR FINANCIALS OF THE A SSESSEE IN THE ABSENCE OF SEARCH. C. THE NET PROFIT OF (-)0.28% IS PHENOMENALLY LOW A S COMPARED TO THE IMMEDIATELY PRECEDING 3 FINANCIAL YEARS (SUPRA) WHICH HAVE BEEN DRAWN WITHOUT ANY ADDITIONAL INCOME. D. AS ALREADY STATED ABOVE THE LOW PERCENTAGE OF NE T PROFIT CANNOT BE SUBSTANTIATED BY THE ASSESSEE DESPITE VARIOUS OPPORTUNITIES PROVIDED DUR ING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE COULD NOT PRODUCE ANY DETAILS, CONFIRMATIO NS, BILLS & VOUCHERS OR BOOKS OF ACCOUNTS TO SUBSTANTIATE THE FINANCIAL RESULT IN THE P&L ACC OUNT. EVEN PROPER DETAILS WERE SUBMITTED TILL THE FAG END OF THE YEAR I.E. ON 14.03.2014. NO BOOK S OF ACCOUNTS WERE ALSO PRODUCED FOR PAGE | 10 VERIFICATION. THE ASSESSEE ALSO DID NOT APPEAR INSP ITE OF BEING APPROVED A FINAL OPPORTUNITIES ON 18.03.2014. E. IN THE ABOVE BACKGROUND THE FINANCIAL RESULTS SH OWN BY THE ASSESSEE (AFTER EXCLUDING THE ADDITIONAL INCOME) CANNOT BE ACCEPTED AND ARE R EJECTED U/S 145 OF THE I.T. ACT, 1961. F. THE STRATEGY ADOPTED BY THE ASSESSEE TO CAMOUFLA GE THE ACTUAL FINANCIAL RESULTS BY CREDITING THE ADDITIONAL INCOME TO THE P&L ACCOUNT IS NOT ACCEPTABLE. BY DOING THIS THE ASSESSEE HAS ANNULLED THE ENTIRE EFFECT OF THE SURR ENDER MADE DURING THE COURSE OF SEARCH AS WELL AS IN THE RETURN OF INCOME. G. IT IS PERTINENT TO MENTION THAT THE ASSESSEE HAS NOT RETRACTED THE SURRENDER MADE BY IT DURING THE COURSE OF SEARCH. IT IS ONLY THE MANNER IN WHICH THE SURRENDER HAS BEEN MADE THAT IS OBJECTIONABLE, AS IT NULLIFIES ITS EFFECT BY INCREA SING THE NET PROFITS THAT SHOULD HAVE BEEN THERE IS ANY CASE IF THE SEARCH/SURRENDER HAD NOT TAKEN P LACE. THE ASSESSEE HAS ARTIFICIALLY REDUCED ITS NET PROFITS BY INFLATING EXPENSES AND THERE AFTER C AMOUFLAGING THEM BY CREDITING THE ADDITIONAL INCOME IN THE P&L ACCOUNT. H. THE SURRENDER OF RS. 3,37,59,400/- WILL THERE FORE BE SEPARATELY ADDED TO THE NET PROFITS, AFTER BRING THE LATER AT PAR WITH THE NET PROFITS O F THE IMMEDIATELY PRECEDING YEARS AS HAS ALREADY BEEN DONE IN THE PARA ABOVE. THIS IS THE IN COME EARNED BY THE ASSESSEE FROM ITS UNDISCLOSED SOURCES. THE NET PROFIT (WITHOUT ADDITI ONAL INCOME) IS THEREFORE, TAKEN AT RS. 8,58,68,992/-. THE UNDISCLOSED INCOME OF RS. 3,37,5 9,400/-, AS DECLARED BY THE ASSESSEE ITSELF, WILL THEREFORE BE ADDED TO IT. 4.1.5 IT IS NOTED HERE THAT THERE HAS BEEN DEFINITE DELAY ON PART OF THE ASSESSEE IN COMPLYING WITH THE REQUIREMENTS OF THE QUESTIONNAIRE OF 1.11. 13. THIS QUESTIONNAIRE CONTAINS MORE THAN 50 QUESTIONS, WHICH ARE VERY ELABORATE AND TOUCH UP ON ALMOST ALL HEADS OF EXPENDITURE AND BALANCE SHEET ITEMS. AS PER THE VARIOUS LETTERS AND APPELLANT HAS FURNISHED REPLIES TO ALMOST ALL QUESTIONS IN THE SAID QUESTIONNAIRE. HOWEVER, THE S AME HAVE BEEN FURNISHED IN PARTS OVER A PERIOD OF TIME. IT IS NOTED HERE THAT EVEN THE QUES TION NO. 43 OF QUESTIONNAIRE DATED 1.11.2013 ASSESSMENT ORDER HAS BEEN REPLIED VIDE LETTER DATED 28/02/2014 WHICH IS A VERY LARGE BUNCH CONTAINING 317 PAGES. 4.1.6 IT IS NOTED HERE THAT EVEN THOUGH THE A.O. ME NTIONS THAT HE HAS EMBARKED UPON VERIFYING THE CLAIM OF VARIOUS EXPENSES DEBITED TO P&L ACCOUNT IN THE BACKGROUND OF STEEP FALL IN NET PROFIT RATIO, HE HAS NOT SOUGHT ANY JUS TIFICATION OR EXPLANATION FOR THE FALL IN NET PROFIT RATE IN THE QUESTIONNAIRE ISSUED ON 1.11.13. WHEN HE HAS DECIDED TO REJECT THE BOOKS OF ACCOUNTS, HE HAS NOT GIVEN ANY SHOW CAUSE NOTICE SE EKING JUSTIFICATION OF FALL IN NET PROFIT RATIO. 4.1.7 IN THE REMAND PROCEEDINGS, THE A.O. HAS EXAMI NED THE JUSTIFICATION FOR THE FALL IN NET PROFIT RATIO AS SUBMITTED DURING THE APPEAL PROCEED INGS. A.O. HAS ALSO EXAMINED THE BOOKS OF ACCOUNTS PRODUCED BEFORE HIM. IT IS NOTED THAT AS P ER THE COMPARATIVE PROFITABILITY STATEMENT SUBMITTED BY THE APPELLANT, THE G.P. RATE HAS FALLE N DOWN TO 12.49% AS COMPARED TO PREVIOUS 3 YEARS AVERAGE G.P. RATE OF 16.26%. THE NET PROFIT RATIO HAS DIPPED TO (-) 0.3% FROM 2. 71% FOR THE CORRESPONDING PERIOD. THE MAJOR REASON FOR FALL IN G.P. & N.P. HAS BEEN ATTRI BUTED TO CONTINUOUS INCREASE IN COST OF MATERIAL WITHOUT PROPORTIONATE INCREASE IN THE SELL ING PRICE COST THE STIFF COMPETITION IN THE MARKET AND ALSO DUE TO TREMENDOUS INCREASE IN FINAN CE COST. THE RELEVANT CHART SHOWING THE INCREASE OR DECREASE NET PROFIT DUE TO THE VARIOUS FACTORS AS NOTED IN THE REMAND REPORT IS REPRODUCED BELOW : PAGE | 11 PARTICULARS FINANCIAL YEAR 2011 -12 AVERAGE OF FY 2008 - 09 TO 2010-11 FACTOR FOR INCREASE / DECREASE IN NET PROFIT TURNOVER NET OF EXCISE 2,954,466,905 2,206,868,948 TOTAL COST OF RAW MATERIAL CONSUMED AND PURCHASE OF TRADED GOODS 2,182,361,822. 1,553,483,254 % OVER TURNOVER 73.87% 70.39% 3.47%O OTHER MANUFACTURING / OPERATING COST 402,978,643 294,601,388 % OVER TURNOVER 13.64% 13.35% 0.29% OTHER EXPENSES 523,418,909 359,513,497 % OVER TURNOVER 17.72% 16.29% 1.43% TOTAL DECREASE IN NET PROFIT 5.19% LESS: OTHER INCOME 145,496,732 60,492,763 % OVER TURNOVER 4.92% 2.74% 2.18% NET DECREASE IN NET PROFIT DURING THE YEAR 3.01% 4.1.8 IT HAS ALSO BEEN SUBMITTED THAT THE COMPANY W AS UNABLE TO HANDLE THE COMPETITION IN THE MARKED DUE TO HUGE FINANCIAL COST AND THEREFORE, IT HAD ULTIMATELY SOLD OFF ITS BEVERAGE BUSINESS UNDER SLUMP SALE IN JANUARY, 2013 I.E. THE NEXT YEAR. IT HAS ALSO BEEN SUBMITTED KEEP THE PROMISE MADE EVIDENCES IN RESPECT OF UNDISCLOSE D SALE/ BOGUS EXPENSES THAT SURRENDER OF RS. 3,37,59,400/- HAS BEEN MADE ONLY TO BY THE PROM OTERS/DIRECTOR EVEN THOUGH NO INCRIMINATING EVIDENCES IN RESPECT OF UNDISCLOSED S ALE/ BOGUS EXPENSES ETC. WERE FOUND IN THE APPELLANTS CASE. IT HAS ALSO BEEN POINTED OUT THA T EVEN THE AO HAS NOT BROUGHT ON RECORD ANY INCRIMINATING EVIDENCES IN THE ASSESSMENT ORDER. 4.1.9 IT IS NOTED HERE THAT THE A.O. HAS COMPLETED THE ASSESSMENT WITHOUT SEEKING ANY EXPLANATION FOR FALL IN GP/NP RATIO FROM THE APPELL ANT. DURING THE APPELLANT PROCEEDINGS, THE JUSTIFICATION/EXPLANATION PROVIDED BY THE ASSESSEE HAS BEEN EXAMINED BY THE A.O. WITH REGARD TO THE BOOKS OF ACCOUNT. HE HAS NOT FOUND ANY DISCR EPANCIES NOR RAISED ANY COUNTER GROUNDS. THE JCIT, WHO HAS FORWARDED THE AOS REPORT HAS REM ARKED THAT THE ASSESSEE HAS INFLATED THE EXPENSES AND HAS NULLIFIED THE FACT OF SURRENDER OF ADDITIONAL INCOME BY CREDITING THE SAME TO P&L ACCOUNT. HE HAS ALSO STATED THAT THE ADDITIONAL INCOME IS THE INCOME FROM UNDISCLOSED SOURCES AND CANNOT BE TREATED FOR THE PURPOSE OF AL LOWING EXPENSES. IN THIS REGARD, IT IS NOTED THAT BY CREDITING UNDISCLOSED INCOME ON THE CREDIT SIDE OF P&L ACCOUNT, THE SAME DOES NOT GET NULLIFIED. NO DOUBT, THE SAME MUST HAVE BEEN DONE T O BUTTRESS THE NET PROFIT FIGURE IN THE BOOKS. HOWEVER, THERE IS NO SUBSTANCE IN THE ARGUME NT THAT MERELY BECAUSE UNDISCLOSED INCOME CREDITED IN THE P&L ACCOUNT, ITS EFFECT GETS NULLIFIED. WHETHER UNDISCLOSED INCOME IS SHOWN AT THE TIME OF FINAL COMPUTATION OF INCOME OR IT IS CREDITED TO P&L ACCOUNT, THE EFFECT WOULD BE ONE AND THE SAME. IT IS NOTED HERE THAT TH E APPELLANT HAS BEEN FILING LOSS RETURNS OVER THE YEARS AND HAS UNABSORBED OLD & CURRENT DEPRECAT ION LOSS OF MORE THAN 20 CRORES. THE PAGE | 12 APPELLANT IS PAYING TAXES U/S 115JB. THUS ANY UNDIS CLOSED INCOME WOULD HAVE GOT SET OFF AGAINST THE DEPRECIATION LOSS. THAT WOULD RESULT IN NON-PAYMENT OF TAXES. BUT IT WOULD NOT MEAN THERE WAS NO SURRENDER OF INCOME. 4.1.10 IN THE ABOVE BACKGROUND IT HAS TO BE CONCLUD ED THAT NO GROUND SURVIVES FOR REJECTION OF BOOKS AND ESTIMATION OF INCOME. THE RE SULT OF REMAND PROCEEDINGS SUPPORT THE STAND OF THE APPELLANT. THE APPELLANT GROUP HAVE AL SO HONOURED THERE DECLARATION OF SURRENDER OF INCOME MADE DURING SEARCH & SEIZURE PROCEEDINGS. AS IS EVIDENT FROM THE DETAILED LETTER DATED 28.02.2014 SUBMITTED BEFORE THE AO, THE GROUP HAD SURRENDERED RS. 10 CRORE DURING THE SEARCH AND INITIALLY IT HAD GIVEN THE_ FOLLOWING BR EAKUP OF THE SAID SURRENDER. NAME OF THE ASSESSEE AMOUNT (RS.) SH. C.K. JAIPURIA 1000000 SH. RUCHIRANS JAIPURIA 2500000 M/S. PEARL DRINKS LTD. AND OTHERS 91500000 M/S. JAIPURIA BEVERAGES & FOOD INDUSTRIES PVT. LTD. 5000000 TOTAL 100000000 4.1.11 THE ABOVE SURRENDERED AMOUNT HAS BEEN REWORK ED OUT ON THE BASIS OF STUDY AND ANALYSIS OF THE SEIZED DOCUMENTS. IN THEIR LETTER D ATED 28.02.2014 SUBMITTED BEFORE THE AO ON 07.03.2014, A DETAILED EXPLANATION OF SURRENDERED I NCOME IN HANDS OF DIFFERENT ENTITIES AND DIFFERENT ASSESSMENT YEARS HAS ALSO BEEN PROVIDED. THE TOTAL SURRENDERED AMOUNT INFACT EXCEEDS RS. 10 CRORE BY RS. 16 LACS THE BREAKUP OF WHICH IS AS UNDER:- NAME OF THE ASSESSEE INCOME SURRENDERED (AMOUNT IN RS.) TAX PAID (AMOUNT IN RS.) M/S. JAIPURIA BEVERAGES & FOOD INDUSTRIES PVT. LTD. 27665794 11321359 4 A / S . PEARL DRINKS LTD. 33759400 5762680 M/S. PEARL BOTTLING PVT. LTD. 32210000 2174160 SH. RUCHIRAINS JAIPURIA 3500000 2000000 M/S. GANPATIE TRADERS PVT. LTD. 1668000 0 ' SH. C.K. JAIPURIA 2816140 881364 TOTAL 101619334 22139563 1 4.1.12 CONSIDERING THE ABOVE, I FIND MERIT IN APPEL LANTS GROUND AND DELETE THE ADDITION OF RS. 8,58,68,992/-. THE GROUNDS ON THE ISSUE ARE ALL OWED. PAGE | 13 11. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL. 12. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET , DREW THE ATTENTION OF THE BENCH TO PARA 4.1.2 OF THE ORDER O F THE CIT(A) AND SUBMITTED THAT THE AO, WHILE REJECTING THE BOOKS OF ACCOUNT HAS NOT POINTED OUT ANY SPECIFIC DEFICIENCY IN THE BOOK S OF ACCOUNTS AND MADE HUGE ADDITION BY ESTIMATING THE NET PROFIT . REFERRING TO THE ORDER OF THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE NAMELY M/S. PEARL BOTTLING (P) LTD. VIDE I TA NO. 5305 AND 5306/DEL/2015 ORDER DATED 27.02.2019 FOR A.Y.20 11-12 AND 2012-13, HE SUBMITTED THAT UNDER IDENTICAL CIRCUMST ANCES THE TRIBUNAL AT PAGE 34 PARA 6.1 HAS THOROUGHLY DISCU SSED THE ISSUE AND UPHELD THE ORDER OF THE CIT(A) IN DELETIN G THE ADDITION. HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE, THE GROUND RAISED BY THE RE VENUE SHOULD BE DISMISSED. 13. THE LD. DR ON THE OTHER HAND WHILE SUPPORTING T HE ORDER OF THE AO DREW THE ATTENTION OF THE BENCH TO PARA 1.3. 7 AT PAGE 5 OF THE ORDER OF THE CIT(A) AND PARA 4.1.9 AND 4.1.10 A T PAGE 41 OF THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE AO H AS PUT SPECIFIC QUESTIONS TO THE ASSESSEE AS TO WHY THE BOOKS OF AC COUNT OF THE ASSESSEE COMPANY SHOULD NOT BE REJECTED AND PROFIT BE ESTIMATED. THEREFORE, IT IS WRONG TO SAY THAT NO SPECIFIC QUES TION WAS ASKED BY THE AO. SHE SUBMITTED THAT SINCE THE ORDER OF T HE CIT(A) IS NOT PAGE | 14 IN ACCORDANCE WITH LAW AND CONTRARY TO FACTS, THERE FORE, THE SAME SHOULD BE REVERSED AND THE ORDER OF THE AO BE RESTO RED. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO IN THE INSTANT CASE, INVOKING THE PROVISIONS OF SECTION 145 OF THE IT ACT, REJECTED THE BOOK RESULTS AND ESTIMATED NET PROFIT AT RS.8,5 8,68,992/- BY ADOPTING NET PROFIT RATE 2.77% AND THEREAFTER MADE ADDITION OF RS.3,37,59,.400/- DECLARED BY THE ASSESSEE AS ITS A DDITIONAL INCOME. WE FIND THE LD. CIT(A) DELETED THE ADDITIO N OF RS.8,58,68,992/- DETERMINED BY THE AO BY ESTIMATING THE NET PROFIT AT RS.2.77% OVER AND ABOVE THE PROFIT DECLAR ED BY THE ASSESSEE, THE REASONS OF WHICH HAVE ALREADY BEEN RE PRODUCED IN THE PRECEDING PARAGRAPH. 15. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE NAME LY M/S. PEARL BOTTLING PRIVATE LIMITED. WE FIND THE TRIBUNAL VID E ITA NO.5305 AND 5306/DEL/2015 ORDER DATED 27.02.2019 FOR A.Y.20 11-12 AND 2012-13 HAS DISCUSSED THE ISSUE THOROUGHLY AND UPHE LD THE ORDER OF THE CIT(A) DELETING THE ADDITION MADE BY T HE AO BY OBSERVING AS UNDER :- 6.1 AFTER PERUSING THE AFORESAID FINDINGS OF THE LD . CIT(A), WE FIND THAT THE RETURN OF INCOME FILED BEFORE THE A.O. ON THE ISSUE ARE PAGE | 15 CONTAINS REPORT OF THE AUDITORS U/S 44AB OF THE ACT . THE AUDITORS, WHO HAVE AUDITED THE BOOKS OF ACCOUNT, WERE FULLY S ATISFIED THAT ALL THE ACCOUNTING STANDARDS HAVE BEEN FOLLOWED AND HE DID NOT MAKE ANY ADVERSE REMARKS IN THE AUDITED REPORT. THE PROVISIONS OF SECTION 145 DESCRIBES CERTAIN CONDITIONS FOR REJ ECTION OF BOOKS OF ACCOUNT BUT NON FURNISHING OF DETAILS IS NOT ONE OF THE PRESCRIBED CONDITIONS FOR REJECTION OF BOOKS OF ACCOUNT. WE AL SO FIND THAT ALL THE DETAILS CALLED FOR VIDE QUESTIONNAIRE DATED 1.1 1.13 HAVE BEEN FURNISHED. AS REGARDS FALL IN NET PROFIT RATIO, A C OMPARATIVE CHART OF FINANCIAL RESULTS FOR THE CURRENT ASSESSMENT YEA R AND FOR THE THREE PRECEDING ASSESSMENT YEARS HAS BEEN PROVIDED THE FALL IN G.P. AND NET PROFIT RATIO HAS BEEN ATTRIBUTED TO IN CREASE IN COST OF PURCHASES AND RAW MATERIAL AND DUE TO INCREASE IN F INANCIAL COST. THE FALL IN G.P. BY 5.4% (24.85% TO 19.36%) AND NET PROFIT RATE BY 18.17% (I.E. 2.81% TO (-) 5.36%) WAS ON ACCOUNT, OF INCREASE IN COST OF PURCHASE AND COST OF RAW MATERIAL CONSUMED. IT I S FURTHER NOTED THAT THERE IS A FALL IN G.P. BY 5.49%. OUT OF 5.49% , 4.91% FALL IN G.P. HAS BEEN ATTRIBUTED TO INCREASE IN COST OF RAW MATERIAL CONSUMED AND PURCHASES OF TRADED GOODS. THE BALANCE FALL IN G.P. (5.49% (-) 4.91% - 0.58%), WAS ATTRIBUTABLE TO INCR EASE IN SALARY, WAGES, REPAIRS & MAINTENANCE EXPENSES. THE FALL IN NET PROFIT RATIO HAS BEEN ATTRIBUTED TO FALL G.P. RATE WHICH I N TURN WAS CLUE TO INCREASE IN COST OF RAW MATERIAL AND INCREASE IN PU RCHASE OF CREDIT GOODS. THE NET PROFIT RATE HAS BEEN SEVERELY AFFECT ED BY INCREASED FINANCIAL COST BY 107.63% DURING THE CURRENT PREVIO US YEAR AS COMPARED TO AVERAGE FINANCIAL COST OF LAST THREE PR ECEDING YEARS. THE LOAN LIABILITY HAS ALMOST DOUBLED OVER THE YEAR S FROM 25.79% AS ON 31.3.08 TO 44.72% AS ON 31.3.11. THE INCREASE IN FINANCIAL CHARGES WAS 1.84% DURING THE CURRENT PREVIOUS YEAR AS COMPARED TO THE AVERAGE OF PREVIOUS THREE FINANCIAL YEARS. W E FURTHER AO HAS NOT FOUND ANY DISCREPANCIES IN THE BOOKS OF ACC OUNTS PRODUCED BEFORE HIM. DURING THE ASSESSMENT PROCEEDI NGS, AO HAS PAGE | 16 HOWEVER, NOT SOUGHT ANY EXPLANATION NOR CONFRONTED WITH THE ADVERSE EVIDENCES. IT IS ALSO OBSERVED THAT THE AO HAS RESORTED TO REJECTION OF BOOKS, ALL OF A SUDDEN WITHOUT ANY IND ICATION TO THE ASSESSEE. NO SHOW CAUSE NOTICE HAS BEEN ISSUED TO T HE APPELLANT BEFORE REJECTING THE BOOKS OF ACCOUNT. FURTHER, EVE N THOUGH THE A.O. HAS NOTED THE FALL IN N.P. RATIO IN THE ASSESS MENT ORDER, NO EFFORT HAS BEEN MADE BY HIM TO ASCERTAIN THE APPELL ANT'S VERSION ABOUT THE REASONS FOR FALL IN GP/NP RATES. THE QUES TIONNAIRE DATED 1.11.13 ISSUED BY HIM DOES NOT SEEK ANY CLARIFICATI ON OR EXPLANATION FOR THE FALL IN N.P. RATE. IT IS FURTHE R NOTED THAT THAT THE FALL IN G.P. IS DUE TO INCREASE IN COST OF RAW MATE RIALS AND OVER THE YEARS, THE FINANCIAL CHARGES HAVE SEEN A GROWTH OF 1.84% FROM AVERAGE OF 3.64% (FOR THE PAST 3 YEARS) TO 5.48% DU RING THE CURRENT PREVIOUS YEAR. FURTHER, THE FALL IN N.P. RA TE HAS BEEN ATTRIBUTED TO THE INCREASE IN INPUT COST AND FINANC E COST. SINCE THIS IS A SEARCH & SEIZURE CASE AND THE PREVI OUS YEAR OF THE PRESENT ASSESSMENT YEAR FALLS WITHIN THE BLOCK PERI OD OF 6 YEARS. A.O. HAS NOT BROUGHT ON RECORD ANY ADVERSE MATERIAL . AO HAS REJECTED THE BOOKS OF ACCOUNT MERELY ON THE BASIS O F FALL IN N.P. RATIO. THERE IS NO RULE OF LAW THAT AN ENTERPRISE C ANNOT INCUR LOSSES OR IT CANNOT DECLARE LESSER NET PROFIT THAT WHAT IS SHOWN IN THE PREVIOUS YEAR. THE SAME IS PERMISSIBLE AS LONG AS THE SAME IS SUPPORTED BY PROPER BOOKS OF ACCOUNT, BILLS AND VOU CHERS. DURING THE REMAND PROCEEDINGS, THE A.O. HAS EXAMINED THE J USTIFICATION FOR FALL IN NET PROFIT SUBMITTED BY THE ASSESSEE AN D HAS NOT REPORTED ANY DISCREPANCIES NOR TAKEN ANY COUNTER AR GUMENTS. WE HAVE ALSO NOTED THAT THIS IS NOT A FIT / CASE FOR R EJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF PROFITS AS THE SEARCH HAS NOT THROWN UP ANY SPECIFIC DISCREPANCIES IN THE ACCOUNTS REGULARL Y MAINTAINED BY THE APPELLANT. THE A.O. HAS REJECTED THE BOOKS O F ACCOUNT AND PAGE | 17 ESTIMATED THE PROFITS OF THE BUSINESS ONLY BASED UP ON NP RATIO WITHOUT CONFRONTING THE SAME TO THE APPELLANT. THIS IS COMPLETELY IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. A.O. HAS ADOPTED A VERY SIMPLISTIC APPROACH IN COMPLETING THE ASSESSME NT. SUCH ACTION OF THE A.O. CANNOT BE SUSTAINED. IN VIEW OF THE ABOVE, WE AGREE WITH THE FINDING OF THE LD. CIT(A) THAT NO GR OUND SURVIVES BOOKS AND ESTIMATION OF INCOME. THE RESULT OF REMAN D PROCEEDINGS SUPPORT THE STAND OF THE ASSESSEE. THE ASSESSEE GRO UP HAVE ALSO HONOURED THERE DECLARATION OF SURRENDER OF INCOME M ADE DURING SEARCH & SEIZURE PROCEEDINGS. AS IS EVIDENT FROM TH E DETAILED LETTER DATED 28.02.2014, SUBMITTED BEFORE THE AO SU RRENDERED RS. 10 CRORE DURING THE SEARCH. THEREFORE, THE LD. CIT( A) HAS RIGHTLY DELETED THE ADDITION OF RS.2,66,81,850/- AND ALLOWE D THE APPEAL OF THE ASSESSEE, WHICH DOES NOT INTERFERENCE ON OUR PART, THEREFORE, WE UPHOLD THE ACTION OF THE LD. CIT(A) O N THE ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY THE REVENUE . IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, IT IS NOTED THAT THE CASE LAWS CITED BY THE LD. CIT(A) ARE DISTINGUISHED TO THE FACTS OF THE PRESENT CASE, HENCE, THE SAME ARE NOT APPLICABLE IN THE PRE SENT CASE. IN THE RESULT, THE ITA NO. 5305/DEL/2015 (AY 2011- 12) STANDS DISMISSED. 16. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTIC AL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF SISTER CONCERN OF THE ASSESSEE CITED (SUPRA), THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF SISTER CONC ERN OF THE ASSESSEE WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. PAGE | 18 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AND THE APPEAL FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.02.2020. SD/- SD/- (SUCHITRA KAMBLE) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:-25 .02.2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 25.02.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.02.2020 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 25.02.2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 25.02.2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 25.02.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 25.02.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.0 2.2020 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER