ITO, Kota V. SMT. MEENA SOMANI PROP., Kota

ITA 598/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54303 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 10-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHRI
• Assessee Lawyers: C M BIRLA
• Keywords: Business income; Loose papers
• Section: 40A(3); 133A; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.598/ JP/2011 ASSESSMENT YEAR 2002-03 PAN: CFLPS 1545 G THE ITO VS. SMT. MEENA SOMANI WARD- 2(1) PROP. M/S. SWASTIK STONE KOTA KHUNDI, BUNDI ROAD, KOTA (APPELLANT ) (RESPONDENT) ITA NO.614/ JP/2011 ASSESSMENT YEAR 2002-03 PAN: CFLPS 1545 G SMT. MEENA SOMANI VS. THE ITO PROP. M/S. SWASTIK STONE WARD- 2 (1) KHUNDI, BUNDI ROAD, KOTA KOTA (APPELLANT ) (RESPONDENT) ITA NO.599/ JP/2011 ASSESSMENT YEAR 2003-04 PAN: CFLPS 1545 G THE ITO VS. SMT. MEENA SOMANI WARD- 2(1) PROP. M/S. SWASTIK STONE KOTA KHUNDI, BUNDI ROAD, KOTA (APPELLANT ) (RESPONDENT) ITA NO.615/ JP/2011 ASSESSMENT YEAR 2003-04 PAN: CFLPS 1545 G SMT. MEENA SOMANI VS. THE ITO PROP. M/S. SWASTIK STONE WARD- 2 (1) KHUNDI, BUNDI ROAD, KOTA KOTA (APPELLANT ) (RESPONDENT) ITA NO.600/ JP/2011 ASSESSMENT YEAR 2004-05 PAN: CFLPS 1545 G THE ITO VS. SMT. MEENA SOMANI WARD- 2(1) PROP. M/S. SWASTIK STONE KOTA KHUNDI, BUNDI ROAD, KOTA (APPELLANT ) (RESPONDENT) 2 ITA NO.616/ JP/2011 ASSESSMENT YEAR 2004-05 PAN: CFLPS 1545 G SMT. MEENA SOMANI VS. THE ITO PROP. M/S. SWASTIK STONE WARD- 2 (1) KHUNDI, BUNDI ROAD, KOTA KOTA (APPELLANT ) (RESPONDENT) ITA NO.601/ JP/2011 ASSESSMENT YEAR 2005-06 PAN: CFLPS 1545 G THE ITO VS. SMT. MEENA SOMANI WARD- 2(1) PROP. M/S. SWASTIK STONE KOTA KHUNDI, BUNDI ROAD, KOTA (APPELLANT ) (RESPONDENT) ITA NO.617/ JP/2011 ASSESSMENT YEAR 2005-06 PAN: CFLPS 1545 G SMT. MEENA SOMANI VS. THE ITO PROP. M/S. SWASTIK STONE WARD- 2 (1) KHUNDI, BUNDI ROAD, KOTA KOTA (APPELLANT ) (RESPONDENT) DEPARTMENT BY : SHRI VINOD JOHRI ASSESSEE BY : SHRI C.M. BIRLA DATE OF HEARING: 19-10-2011 DATE OF PRONOUNCEMENT: 22-12-2011 ORDER PER BENCH THE ASSESSEE AS WELL AS REVENUE FILED THE APPEALS AGAINST RESPECTIVE ORDERS OF THE LD. CIT(A). 2.0 FIRST OF ALL, WE TAKE UP THE APPEAL OF THE ASSE SSEE FOR THE ASSESSMENT YEAR 2002-03 IN ITA NO. 614/JP/20/JP/2011. 2.1 THE GROUND OF APPEAL NO. 1 AND 2 OF THE ASSESSE E ARE AS UNDER:- 3 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(A) ERRED IN NOT ANNULLING THE ORDER OF THE LEARNED AO WHICH WAS BASED ON REPORT OF THE LEARNED SPECIAL AUDITORS WHO WERE APPOINTED FOR THE ASSIGNMENTS BEYOND THE PROVISIONS OF SEC.142(2A ) OF THE INCOME TAX ACT, 1961. RELIANCE IN THIS REGARD IS MADE ON DECIS ION OF HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. BAJRANG TEXTIL ES 205 CTR 287 (RAJ.). 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(A) FURTHER ERRED IN NOT ANNULLING ORDER OF THE LEARNED AO WHICH WAS FRAMED BY HIM BEYOND TIME PROVIDED IN SECTION 1 53(2) OF THE IT ACT 1961 WHICH WAS EXTENDED BY LEARNED AO BY APPOINTING SPECIAL AUDITORS U/S 142(2A) AND EXTENDING THEIR TIME AGAIN AND AGAI N THUS TAKING BENEFIT OF PROVISO TO SEC.153(4). 2.2 THE SURVEY U/S 133A OF THE ACT WAS CONDUCTED O N 01-10-2008 AT THE BUSINESS PREMISES OF SOMANI GROUP. CERTAIN INCRIMINATING DOC UMENTS WERE IMPOUNDED. FROM THE BOOKS OF ACCOUNTS, THE AO NOTICED THAT THERE ARE CE RTAIN ENTRIES RELATING TO ASSESSMENT YEAR 2002-03. THE AO ACCORDINGLY ISSUED NOTICE U/S 148 OF THE ACT. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED THE RETURN ON 08-04-2009 VIDE WHICH THE INCOME OF RS. 71,919/- WAS DISCLOSED. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF EXTRACTING LIME STONE FROM THE MINES AND THEREAFTER SUCH LIME STONE IS BEING SOLD. THE ASSESSEE IS HAVING TWO MINES. 2.3 THE AO CONSIDERING THE COMPLEXITIES OF THE ACCO UNTS AND INTEREST OF REVENUE REFERRED THE MATTER FOR SPECIAL AUDIT U/S 142(2A) A FTER GETTING THE APPROVAL FROM LD. CIT, KOTA. THE AO HAS MENTIONED THAT THE ASSESSEE HAS N OT EITHER COOPERATED DURING THE COURSE OF SURVEY OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAS MENTIONED THAT THE ASSESSEE WAS ASKED TO CONVEY THE DATE ON W HICH THE COPIES OF THE IMPOUNDED DOCUMENTS BE GIVEN TO HER AFTER RECORDING HER STATE MENT. THE DATE WAS FIXED ON 25-06- 2009. ON THIS DATE, NONE ATTENDED THE PROCEEDINGS. THE AO ISSUED A LETTER ON 07-09-2009 VIDE WHICH THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE CASE OF ASSESSEE BE NOT REFERRED FOR SPECIAL AUDIT FOR THE ASSESSMENT YEARS 2002-03 TO 2005-06. ON THE APPOINTED 4 DATE, NONE ATTENDED THE PROCEEDINGS. THE SPECIAL AU DITOR HAS SUBMITTED THE REPORT ON 10- 05-2010. 2.4 BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE WR ITTEN SUBMISSION AND ACCORDING TO WHICH IT WAS SUBMITTED THAT AO WAS NOT LEGALLY RIGH T IN REFERRING THE MATTER FOR SPECIAL AUDIT U/S 142(2A) OF THE ACT. IT WILL BE USEFUL TO REPRODUCE PARA 4.2 TO 4.3 FROM THE ORDER OF THE LD. CIT(A) AS UNDER:- 4.2 APPELLANT IN HIS WRITTEN SUBMISSIONS ARGUED T HAT COPIES OF IMPOUNDED DOCUMENTS WERE NOT GIVEN TO HIM BEFORE FI LING OF RETURN. IT WAS ALSO ARGUED THAT COPIES OF IMPOUNDED DOCUMENTS WERE NOT GIVEN EVEN BEFORE REFERRING THE CASE FOR SPECIAL AUDIT U/S 142(2A). IT WAS FURT HER ARGUED THAT THERE WAS NO COMPLEXITY IN THE ACCOUNTS, WHICH REQUIRED SPECIAL AUDIT. IN SUPPORT OF HIS ARGUMENT, APPELLANT RELIED ON FOLLOWING JUDICIAL DE CISIONS: (A) PEERLESS GENERAL FINANCE & INVESTMENT CO.LTD.& ANR VS. DY.CIT & ORS (1991) 156 CTR (CAL) 512. (B) MUTHOOTTU MINI JURIES VS. DY.CIT & ANR (2001) 166 CTR (KER) 180. (C) STATE FOREST CORPORATION VS. JOINT CIT (2001) 170 CTR (HP) 133. (D) ALLIDHARA TEXPRO ENGINEERING (P) LTD. VS. DY.C IT (2009) 223 CTR (GUJ) 481. (E) WEST BENGAL STATE CO-OPERATIVE BANK LTD.VS. JT. CIT & ORS (2004) 190 CTR (CAL) 245. (F) RAJESH KUMAR & ORS VS. DY.CIT & ORS (2006) 206 CTR (SC) 175. (G) HIND SAMACHAR LTD. VS. ACIT & ANR (2005) 216 C TR (SC) 303. (H) SAHARA INDIA (FIRM) VS. CIT & ANR (2008) 216 C TR (SC) 303. (I) CIT VS. BAJRANG TEXTILES 205 CTR (RAJ) 287. 4.3 IT WAS THEREFORE ARGUED THAT THE ASSESSMENT ORD ER OF AO DESERVES ANNULMENT. 2.5 THE LD. CIT(A) UPHELD THE ISSUE OF REFERRING TH E CASE FOR SPECIAL AUDIT U/S 142(2A) AFTER OBSERVING AS UNDER:- 5 4.4 ARGUMENTS OF THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. FROM THE PERUSAL OF RECORDS IT IS FOUND THAT APPELLANT ADOPTED NON CO-OPERATIVE ATTITUDE, NOT ONLY DURING THE COUR SE OF SURVEY BUT ALSO IN SUBSEQUENT PROCEEDINGS BEFORE AO. IN VARIOUS STATEM ENTS RECORDED DURING SURVEY, EVASIVE REPLIES WERE GIVEN. NO EXPLANATION WAS GIVEN REGARDING ENTRIES IN VARIOUS DOCUMENTS & LOOSE PAPERS FOUND D URING THE COURSE OF SURVEY. NO REGULAR BOOKS OF ACCOUNTS WERE MAINTAINE D BY APPELLANT. NO BOOKS OF ACCOUNTS WERE FOUND DURING SURVEY WHICH CA N BE CALLED CORRECT AND COMPLETE. IN VIEW OF ALL THESE FACTS, DECISION OF AO TO REFER THE CASE FOR SPECIAL AUDIT U/S 142(2A) IS JUSTIFIED. AO ALSO PROVIDED VARIOUS OPPORTUNITIES TO THE APPELLANT TO EXPLAIN HER CASE, BUT THERE WAS NO COMPLIANCE OR PARTIAL COMPLIANCE ONLY. THEREFORE CO NTENTION OF THE APPELLANT THAT JUSTICE WAS DENIED BY AO AND THE ASS ESSMENT WAS COMPLETED WITHOUT PROVIDING PROPER OPPORTUNITY IS N OT ACCEPTABLE. GROUND NO. 1, 2 & 3 OF THE APPEAL ARE THUS DISMISSED. 2.6 BEFORE US, THE LD. AR HAS FILED THE WRITTEN SUB MISSION AS UNDER:- (I) THAT SURVEY OPERATIONS WERE CARRIED ON 1 ST OCT. 2008 AT BUSINESS PREMISES OF SOMANIS GROUP I.E. SOMANI CARRIERS & SOMANI & C O. - PROP. BABULAL SOMANI; SWASTIK STONES PROP.SMT. MEENA SOMANI; AND SWASTI K STONE CRUSHERS PROP.RITESH KUMAR SOMANI WHO ARE FATHER, MOTHER AND SON RESPECTIVELY. (II) DURING SURVEY NOT EVEN SINGLE RUPEE EXTRA MON EY, SINGLE PENNY EXTRA STOCK OR ANY EVIDENCE FOR INVESTMENT (EXCEPT ONE PAPER FO R RS. 30000/- INVESTMENT) BEYOND WHAT IS APPEARING IN BOOKS WERE FOUND. MORE THAN 90 00 PAGES OF ACCOUNTS BOOKS /VOUCHERS /BILLS ETC. WERE IMPOUNDED BY DEPTT. (III) APPELLANTS VIDE THEIR LETTERS DATED 07.10.20 08, 18.03.2009, 25.03.2009, 21.04.2009, 26.08.2009 & 17.09.2009 (PB 22 TO 27 & 29) MADE REQUEST FOR PROVIDING COPIES OF THE IMPOUNDED DOCUMENTS, HOWEVE R TILL 30.04.2010 IT WAS NOT GIVEN. IN THESE REQUESTS LETTER THE APPELLANT HAD R EPEATEDLY STATED THAT IN ABSENCE OF SUCH COPIES IT WAS NOT POSSIBLE FOR HIM TO PROVIDE INFORMATION CALLED FOR BY THE AUTHORITIES, REPLY QUESTIONS POSED FROM THEM BY DEP TT. COMPUTE CONCEALED INCOME, IF ANY, PREPARE RETURN IN COMPLIANCE TO NOTICE U/S 148 AND TO VERIFY IF THERE ARE COMPLEXITIES IN ACCOUNTS WHICH JUSTIFIES APPOINTMEN T OF SPECIAL AUDITORS IN CONSONANCE TO PROVISIONS OF SEC.142(2A) OF THE INCO ME TAX ACT, 1961 ETC.ETC. 6 (IV) MEANWHILE NOTICE U/S 148 WERE ISSUED TO ME FOR ASS.YEAR 2002-03 TO 2004- 05 ON 02.03.2009 AND FOR ASS.YEAR 2005-06 ON 08.04. 2009 (PB 1 TO 4) WHICH WERE SERVED ON ME ON 04.03.2009 AND 08.04.2009 RESPECTIV ELY IN RESPONSE WHERE OF I FILED MY RETURN OF INCOME FOR ASS.YEARS 2002-03 TO 2004-0 5 ON 08.04.2009 AND FOR ASS.YEAR 2005-06 ON 05.05.2009. IN CONSONANCE TO PR OVISIONS OF SEC.153(2) TIME LIMIT FOR COMPLETION OF ASSESSMENT FOR ASS.YEAR 200 2-03 TO 2004-05 WAS 31.12.2009 AND FOR ASS.YEAR 2005-06 ON 31.12.2010. RETURNS FOR ALL THESE 4 YEARS WERE APPENDED WITH TRADING A/C, P&L A/C & BALANCE SHEET (PB 9 TO 18). (V) THE LEARNED AO DID NOT CALLED ME DURING 01.10. 2008 TO 07.09.2009 FOR ANY EXPLANATION EITHER ON IMPOUNDED PAPERS OR DURING 08 .04.2009 TO 06.09.2009 ON ROI FILED IN COMPLIANCE TO NOTICE U/S 148. (VI) VIDE HIS LETTER NO.2238 DATED 07.09.2009 THE LEARNED AO ASKED ME TO EXPLAIN ON OR BEFORE 17.09.2009 WHY CONSIDERING NAT URE AND COMPLEXITY OF THE ACCOUNTS SEEN IN MY IMPOUNDED RECORDS AND IN THE IN TEREST OF REVENUE MY ACCOUNTS/ IMPOUNDED RECORDS FOR ASS.YEAR 2002-03 TO 2005-06 B E NOT GOT AUDITED U/S 142(2A) OF THE IT ACT, 1961. IT WAS ALSO MENTIONED IN THE LAST PARA OF THIS LETTER THAT THIS IS LAST OPPORTUNITY TO ME AND THAT IF I DID NOT COMPLIED TH IS LETTER THERE SHALL BE NO OPTION BUT TO ASSUME BY HIM THAT I DO NOT HAVE ANY OBJECTION . I MAY ADD HERE BEFORE THIS LETTER I NEVER RECEIVED ANY COMMUNICATION FROM LEARNED AO OR ANY OTHER AUTHORITIES EITHER IN RELATION TO IMPOUNDED PAPERS OR ON MY RETURN OF INC OME FILED. ON 17.09.2009 I WENT TO OFFICE OF THE LEARNED AO TO EXPLAIN HIM THAT THE RE WAS NO COMPLEXITY IN MY ACCOUNTS WHICH MAY SUGGEST FOR APPOINTMENT OF SPECI AL AUDITORS U/S 142(2A) HOWEVER I WAS DENIED PERSONAL MEETING AND THEREFORE I FILED LETTER DATED 17.09.2009 ON SAME DAY AT RECEIPT COUNTER MENTIONING THEREIN T HAT COPIES OF IMPOUNDED PAPERS BE GIVEN TO ME FIRST SO THAT AFTER EXAMINING SAID P APERS I MAY SATISFY AND THEN EXPLAIN WHETHER THERE IS ANY JUSTIFICATION IN APPOINTING AU DITORS U/S 142(2A). THOUGH DENIAL OF PERSONAL HEARING DOES NOT APPEAR FROM ORDER SHEE TS ETC. HOWEVER IT IS EVIDENT FROM INDIRECT EVIDENCES. DURING HEARING OF APPEAL I HAD SUBMITTED SO IN MY LETTER DATED 21.12.2010. COPY WHEREOF WAS GIVEN TO LEARNED AO AL SO WHICH HE DID NOT OBJECTED IN HIS REMAND REPORT.. (VII) IN REPLY TO MY LETTER DATED 17.09.2009 I RE CEIVED LETTER DATED 17.09.2009 (PB 30) FROM THE LEARNED AO WHEREIN HE MENTIONED MY NON-ATTENDANCE. HE WROTE IN THIS LETTER THAT UNDER SECTION 142(2A) NO WHERE IT IS PROVIDED TO ISSUE ZEROX COPIES OF THE IMPOUNDED RECORDS BEFORE SPECIAL AUDIT. (VIII) I RECEIVED LETTER DATED 19.11.2009 FROM L EARNED AO WHEREIN HE INTIMATED ME THAT CONSIDERING THE NATURE AND COMPLEXITY OF AC COUNTS IN MY CASE AND ALSO IN THE INTEREST OF JUSTICE I AM DIRECTED TO GET MY ACCOUNT S FOR ASS.YEAR 2002-03 TO 2005-06 & ASS.YEAR 2008-09 AUDITED U/S 142(2A) FROM SHRI P. KHANDELWAL OF M/S P.KHANDELWAL & CO. WHO HAS BEEN NOMINATED AS SPECIA L AUDITOR BY LEARNED CIT, KOTA. IN THE SAID LETTER TERMS AND REFERENCE OF AUD IT WERE ALSO GIVEN. I MAY MENTION BEFORE SUCH NOMINATION OF SPECIAL AUDITORS NEITHER LEARNED AO NOR HONBLE CIT THOUGHT APPROPRIATE TO APPRISE ME ABOUT ANY COMPLE XITY IN MY ACCOUNTS WHICH MAY 7 JUSTIFY THIS NOMINATION I MAY ALSO ADD IN HIS LETTE R DATED 07.09.2009 (PB 28) AND ALSO IN ORDER SHEET U/S 142(2A) THE LEARNED AO HAD ASKE D MY EXPLANATION FOR AUDIT OF BOOKS OF ACCOUNTS FOR ASS.YEAR 2002-03 TO 2005-06 B UT AUDITORS WERE APPOINTED FOR A.Y. 2008-09 ALSO. (IX) IN CONSONANCE TO PROVISIONS OF SEC.142(2A) AS SESSEE IS TO GET ACCOUNTS AUDITED FROM SPECIAL AUDITORS AND SUBMIT REPORT IN CONSONANCE TO SEC. 142(2C) WITH IN TIME SPECIFIED BY THE LEARNED AO. TIME LIMIT AS PER LETTER DATED 19.11.2009 WAS 31.12.2009. IN CONSONANCE TO PROVISO TO SEC. 142(2C ) THE LEARNED AO MAY EXTEND TIME EITHER SUO MOTTO OR ON AN APPLICATION MADE IN THIS BEHALF BY THE ASSESSEE FOR ANY GOOD AND SUFFICIENT REASONS. (X) IN THIS REGARD I REPRODUCE SEC.142(2C) WHICH R EADS:- (2C) EVERY REPORT UNDER SUB-SECTION (2A) SHALL BE FURNISHED BY THE ASSESSE TO THE [ASSESSING] OFFICER WITHIN SUCH PERIOD AS MAY BE SP ECIFIED BY THE [ASSESSING] OFFICER: PROVIDED THAT THE [ASSESSING] OFFICER MAY, [SUO MOT U, OR] ON AN APPLICANTION MADE IN THIS BEHALF BY THE ASSESSEE AND FOR ANY GOOD AND SU FFICIENT REASON, EXTEND THE SAID PERIOD BY SUCH FURTHER PERIOD OR PERIODS AS HE THIN KS FIT; SO, HOWEVER, THAT THE AGGREGATE OF THE PERIOD ORIGINALLY FIXED AND THE PE RIOD OR PERIODS SO EXTENDED SHALL NOT, IN ANY CASE, EXCEED ONE HUNDRED AND EIGHTY DAY S FROM THE DATE ON WHICH THE DIRECTION UNDER SUB-SECTION (2A) IS RECEIVED BY THE ASSESSEE. IN THIS CASE TIME WAS EXTENDED BY THE LEARNED ITO FROM 31.12.2009 TO 28.02.2010, FROM 28.02.2010 TO 28.03.2010 AND FROM 28.03.2010 T O 30.04.2010 (PB 38, 40 & 42) ON REQUEST OF SPECIAL AUDITORS WHICH IS BEYOND PROV ISIONS OF SECTION 142(2C). FROM THESE REQUEST LETTERS OF SPECIAL AUDITOR NO WHERE I T TRANSPIRES THAT EXTENSION WAS SOUGHT BY THEM FOR GOOD AND SUFFICIENT REASONS (PB 37, 39 & 41). BESIDES REQUEST BY SPECIAL AUDITORS FOR EXTENSION OF TIME BEYOND 28.02 .2010 WAS MADE AFTER LAPSE OF TIME AVAILABLE U/S 142(2C) (PB 39). THE LEARNED ITO SUO MOTTO FURTHER EXTENDED TIME FROM 30.04.2010 TO 10.05.2010. (XI) THAT AS PER SCHEME OF THE ACT AUDIT U/S 142(2 A) IS TO BE GOT DONE BY AUDITEE. SPECIAL AUDIT IS VERY CLOSE TO INVESTIGATI ON WHEREIN LEARNED SPECIAL AUDITORS MINUTELY EXAMINES EACH IMPOUNDED PAPERS/DO CUMENTS AND THEN FORM HIS OPINION ON SAME. SUCH EXAMINATION THEREFORE NEEDS A SSISTANCE FROM ASSESSEE AND HIS ACCOUNTS STAFF AS WELL. AUDITORS VIDE THEIR LETTER DATED 13.01.2010, 16.03.2010, 08.04.2010 AND 12.04.2010 ASKED ME TO PRODUCE BEFOR E THEM BOOKS OF ACCOUNTS AND COPIES OF IMPOUNDED RECORDS FOR AUDIT AND I VERY EA RNESTLY SUBMITTED THEM VIDE MY LETTERS DATED 21.01.2010, 25.01.2010, 22.03.2010, 1 0.04.2010 AND 16.04.2010 THAT OUR ALL RECORDS ARE IMPOUNDED BY DEPTT. AND THEY HA VE NOT PROVIDED ME COPIES OF THE SAME. I THEREFORE EXPRESSED MY INABILITY IN PRODUCI NG THE SAME TO THEM FOR AUDIT. (XII) AS APPEARS FROM LETTER DATED 04.12.2009 AND 25.03.2010 (PB 37 & 41) OF SPECIAL AUDITORS ADDRESSED TO THE LEARNED ITO SPECI AL AUDITORS HAVE GONE THROUGH 8 THE IMPOUNDED RECORDS LYING AT OFFICE OF THE LEARNED ITO. FROM THESE LET TERS IT IS VERY CLEAR THAT THEY HAD GONE THROUGH THE RECORDS. THERE WERE MORE THAN 9000 IMPOUNDED PAPERS/PAGES AND WHILE SITTING IN OFFICE OF THE LEA RNED AO WHERE THERE ARE MANY INTERVENTIONS THEREFORE THERE AUDITORS CAN GO THROU GH PAPERS / RECORDS ONLY AND CANNOT DO AUDIT AND THAT TOO SPECIAL AUDIT WHEREIN PAPERS/DOCUMENTS HAVE TO BE DEEPLY LOOKED INTO AND WHICH EXERCISE AS HAS BEEN HELD B Y HONBLE APEX COURT IN SAHARA INDIA CASE (2008) 216 CTR 203 IS MORE OR LESS IN TH E NATURE OF INVESTIGATION AND IN SOME CASES MAY EVEN TURN OUT TO BE STIGMATIC. HOW M ANY PAPERS WERE EXAMINED BY THE LEANED SPECIAL AUDITORS IS UNKNOWN TO ME BECAUS E IT WAS IN BETWEEN HIM AND LEARNED AO ONLY. THERE IS EVERY PROBABILITY THAT HE EXAMINED THOSE PAPERS ONLY WHICH WERE MADE AVAILABLE BY THE LEARNED AO TO HIM. 2.2 AS SUBMITTED IN PARA 2(VIII) ABOVE THE TERMS O F REFERENCES OF AUDIT WERE GIVEN IN LETTER DATED 19.11.2009 WHICH INCLUDES:- (A) TO EXAMINE ALL THE BOOKS OF ACCOUNT, BILLS, VO UCHERS, LOOSE PAPERS, DOCUMENTS, BANK STATEMENTS ETC. AND TO PREPARE CASH INFLOW/ OUTFLOW STATEMENTS, CAS H BOOK, LEDGER, TRIAL BALANCE, FINAL ACCOUNTS I.E. TRADING AND PROF IT AND LOSS ACCOUNT, BALANCE SHEET ETC. FOR DIFFERENT YEARS AS MENTIONED ABOVE WITH THE AIM TO ENABLE THE DEPARTMENT TO ARRIVE AT THE TRUE STATE OF FINANCIAL AFFAIRS OF THE VARIOUS CONCERNS IN WHICH THE ASSESSES IS ASSOCIATE D EITHER AS A PROPRIETOR OR PARTNER (BOTH IN INDIVIDUAL OR HUF CAPACITY) OR A DIRECTOR OF COMPANY . (B) TO LIST ALL THE TRANSACTIONS OF LOANS / DEPOSI TS TAKEN /ACCEPTED BY THE ASSESSEE DURING THE AFORESAID ASSESSMENT YEAR ABOVE RS. 2000 0/- EACH OTHERWISE THAN THROUGH ACCOUNT PAYEE CHEQUE, GIVING SUCH PARTICULARS AS NA ME AND ADDRESS OF THE BORROWER, DATE OF LOAN, PERIOD OF LOAN,, INTEREST RATE, AMOUNT OF INTEREST, DETAILS AND SECURITY, AMOUNT RECEIVED BACK, MODE OF REPAYMENT ETC. (C) TO LIST ALL THE TRANSACTIONS OF LOANS GIVEN BY THE ASSESSEE DURING THE AFORESAID ASSESSMENT YEAR ABOVE RS. 20000/- EACH OTHER WISE T HAN THROUGH ACCOUNT PAYEES CHEQUE, GIVING SUCH PARTICULARS AS NAME AND ADDRESS OF THE BORROWER, DATE OF LOAN, PERIOD OF LOAN, INTEREST RATE, AMOUNT OF INTEREST, DETAILS AND SECU RITY, AMOUNT RECEIVED BACK, MODE OAF REPAYMENT ETC. (D) TO LIST ALL IMMOVABLE PROPERTIES ACQUIRED AND / OR CONSTRUCTED BY THE ASSESSE DURING THE AFORESAID YEARS GIVING, INTER-ALIA, PART ICULARS OF IDENTITY OF BUYER/SELLER ADDRESSED OF THE LOCATION OF THE PROPERTY, DATE OF OCCUPATION, CONSIDERATION, MODE OF PAYMENT ETC. (E) TO REPORT ANY IRREGULARITIES, ILLEGAL OR UNLAW FUL TRANSACTION OR TRANSACTIONS NOT PERMITTED IN THE LAW IF NOTICED IN THE ACCOUNTS SO RECASTED, REFRAMED ON THE BASIS OF ENTRIES AVAILABLE IN THE BOOKS OF ACCOUNTS, LOOSE PAPERS, D OCUMENTS ETC.IMPOUNDED IN THE CASE OF THE ASSESSEE. (F) TO STATE AND REPORT THE INSTANCES OF VIOLATION OF PROVISIONS OF SECTION 269SS, 269T AND 40A(3) OF THE INCOME TAX ACT, 1961. 9 (G) TO REPORT ANY FACTS AND CIRCUMSTANCES WHICH COME TO THE NOTICE OF THE AUDITOR AND WHICH HAVE THE BEARING ON THE DETERMINATION OF INCOME OF THE ASSESEE FOR THE ASSESSMENT YEARS AS AFORESAID . (H) TO ASCERTAIN THE CAPITAL EMPLOYED BY THE ASSES SEE IN VARIOUS VENTURES AND TRANSACTIONS INCLUDING OPENING CAPITAL, CAPITAL INT RODUCED AND CLOSING CAPITAL. (I) TO DRAW THE LIST OF CREDITORS AND DEBTORS IN R ESPECT OF EACH BUSINESS AND PERTAINING TO EACH FINANCIAL YEAR RELEVANT TO THE A SSESSMENT YEARS MENTIONED ABOVE, WHICH HAVE A BEARING OVER THE INCOME AS WELL AS ASSETS BE LONGING TO THE ASSESSEE. (J) TO EXAMINE ENTRIES OF VARIOUS BANK ACCOUNTS OF VARIOUS BUSINESS CONCERNS AND INDIVIDUAL TO FIND OUT THE NATURE OF TRANSACTIONS, WHICH ARE NOT RECORDED OR WHICH HAVE NOT BEEN EXECUTED THROUGH BANKING CHANNELS. 2.3 FROM ABOVE IN GENERAL AND (A), (D) & (J) IN PA RTICULAR IT APPEARS SPECIAL AUDITORS WERE APPOINTED WITH AN INTENTION TO SHIFT RESPONSIBILITY OF THE LEARNED AO TO COMPUTE CORRECT TAXABLE INCOME TO THE SPECIAL AUDIT ORS. AS APPEARS FROM ORDER SHEET RELATING TO SPECIAL AUDIT THE HONBLE CIT ALS O DID NOT THOUGHT APPROPRIATE TO UNDERSTAND WHETHER THERE WAS REALLY COMPLEXITY IN A CCOUNTS WHICH MAY SUGGEST APPOINTMENT U/S 142(2A) BESIDES FROM THIS ORDER SHE ET IT ALSO DOES NOT TRANSPIRES THAT HOW THE INTEREST OF REVENUE SHALL BE SUB SERVED WIT H APPOINTMENT OF SPECIAL AUDITORS (PB 31 TO 33) 2.4 THE HONBLE CALCUTTA HIGH COURT IN WEST BENGAL STATE CO-OPERATIVE BANK LTD. VS. JOINT COMMISSIONER OF INCOME TAX & OR S. (2004) 190 CTR (CAL) 245 . WHILE DISCUSSING COMPLEXITY OF THE ACCOUNTS HAS HELD:- AUDIT SPECIAL AUDIT UNDER S. 142(2A) - CONDITION S PRECEDENT ASSESSEE-CO OPERATIVE BANKS ACCOUNTS ALREADY AUDITED NOT ONLY UNDER S.44A B BUT ALSO BY THE DIRECTORATE OF CO- OPERATIVE AUDIT APPOINTED BY THE STATE GOVERNMENT NEITHER BOOKS OF ASSESSEE EXAMINED BY AO SO AS TO FORM AN OPINION AS REGARDS COMPLEXIT Y OF ACCOUNTS NOR OPPORTUNITY OF HEARING GIVEN WHICH WAS NECESSARY IN VIEW OF CIVIL CONSEQUENCES OF ORDER UNDER S.142(2A) CIT GRANTING APPROVAL IN A MECHANICAL WAY ORDER OF AO UNDER S. 142(2A) AND APPROVAL OF CIT INVALID, HENCE QUASHED. BEFORE HE COMES TO THE CONCLUSION, AS TO THE NATURE AND COMPLEXITY OF THE ACCOUNTS, HE SHALL MAKE A GENUINE AND HONEST ATTEMPT TO UNDERSTA ND THE ACCOUNTS OF THE ASSESSEE AND APPRECIATE THE ENTRIES THEREIN AND IN CASE OF DOUBT , HE SHOULD SEEK EXPLANATION FROM THE ASSESSEE OR HIS REPRESENTATIVE. A CURSORY LOOK AT T HE BOOKS OF ACCOUNT IS NOT SUFFICIENT FOR FORMATION OF OPINION BY THE AO FOR EXERCISE OF POWE R UNDER S. 142(2A) OF THE SAID ACT. HIS OPINION MUST BE BASED UPON OBJECTIVE CONSIDERATIONS AND NOT ON THE BASIS OF SUBJECTIVE SATISFACTION. NATURALLY THE AO MUST HAVE OCCASION A ND OPPORTUNITY TO EXAMINE THE ACCOUNTS OF THE ASSESSEE TO FORM HIS OPINION. THEREFORE, I CONCLUDE THAT THE AO WITHOUT EXAMINING THE BOOKS OF ACCOUNT HAS FORMED HIS OPINION REGARDING THE NATURE AND COMPLEXITY AND THE CIT, OVERLOOKING THIS SERIOUS LEGAL LAPSE, HAS MECHANICALLY APPROVED. IT IS TRUE THEY H AVE MATERIAL, BUT WITH THESE MATERIALS NO ONE CAN REASONABLY AND RATIONALLY FORM AN OPINIO N. 10 IN HIS PROPOSAL, HE HAS NOT STATED HOW THE INTEREST OF THE REVENUE WILL BE SUB SERVED WITH SUCH SPECIAL AUDIT. IN MY VIEW INFERENCE AND/OR PRESUMPTION CANNOT B E THE BASIS FOR FORMATION OF AN OPINION. 2.5 HONBLE APEX COURT IN SAHARA INDIA (2008) 216 CTR 302 WHILE DEALING WITH THE PROVISIONS OF SEC.142(2A) HAD HELD AS UNDE R:- THUS, BEFORE DUBBING THE ACCOUNTS TO BE COMPLEX OR DIFFICULT TO UNDERSTAND, THERE HAS TO BE A GENUINE AND HONEST ATTEMPT ON THE PART OF THE AO TO UNDERSTAND ACCOUNTS MAINTAINED BY THE ASSESSEE; APPRECIATE THE ENTRIES MADE THEREIN AND IN THE EVENT OF ANY DOUBT, SEEK EXPLANATION FROM THE ASSESSEE, BUT OPINION REQUIRED TO BE FORMED BY THE AO FOR EXERCISE OF POWER UNDER THE SAID PROVISI ON MUST BE BASED ON OBJECTIVE CRITERIA AND NOT ON THE BASIS OF SUBJECTIVE SATISFA CTION. THERE IS NO GAINSAYING THAT RECOURSE TO THE SAID PROVISION CANNOT BE HAD BY THE AO MERELY TO SHIFT HIS RESPONSIBILITY OF SCRUTINIZING THE ACCOUNTS OF AN A SSESSEE AND PASS ON THE BUCK TO THE SPECIAL AUDITOR. SIMILARLY, THE REQUIREMENT OF PREV IOUS APPROVAL OF THE CHIEF CIT OR THE CIT IN TERMS OF THE SAID PROVISION BEING AN INB UILT PROTECTION AGAINST ANY ARBITRARY OR UNJUST EXERCISE OF POWER BY THE AO, CA STS A VERY HEAVY DUTY ON THE SAID NIGH RANKING AUTHORITY TO SEE TO IT THAT THE REQUIR EMENT OF THE PREVIOUS APPROVAL, ENVISAGED IN THE SECTION IS NOT TURNED INTO AN EMPT Y RITUAL . NEEDLESS TO EMPHASIZE THAT BEFORE GRANTING APPROVAL, THE CHIEF CIT OR THE CIT, AS THE CASE MAY BE, MUST HAVE BEFORE HIM THE MATERIAL ON THE BASIS WHEREOF A N OPINION IN THIS BEHALF HAS BEEN FORMED BY THE AO. THE APPROVAL MUST REFLECT THE APP LICATION OF MIND TO THE FACTS OF THE CASE. 2.6 FROM LETTERS DATED 07.09.2009 AND 17.09.2009 (PB 28 & 30) IT APPEARS THAT THE LEARNED ITO WAS VERY SURE THAT THERE SHALL BE A PPOINTMENT OF SPECIAL AUDITORS, COPIES OF IMPOUNDED PAPERS SHALL NOT BE GIVEN TO ME TO ENABLE ME TO GET IT AUDITED FROM SPECIAL AUDITORS BUT AUDITORS SHALL GO THROUGH RECORDS IN INCOME TAX OFFICE, HIS GO THROUGH TO THE RECORDS SHALL BE LIMITED TO T HOSE PAPERS ONLY WHICH SHALL BE THOUGHT APPROPRIATE BY THE LEARNED AO, PERIOD FOR S UBMISSION OF REPORT BY AUDITORS SHALL BE EXTENDED AGAIN AND AGAIN AND THAT AFTER CO MPLETION OF AUDIT ONLY FOR EYEWASH COPIES OF IMPOUNDED RECORDS SHALL BE GIVEN TO ME. I T APPEARS IT WAS COLLUSION WHEREIN UNFORTUNATELY AUDITORS ALSO SUPPORTED DEPTT. SUPPOR TED BECAUSE HONBLE SPECIAL AUDITORS WERE WELL AWARE OF AUDIT ETHIC AND WHEN IT WAS NOT POSSIBLE FOR HIM TO CONDUCT AUDIT IN PRESENCE OF AUDITEE, HE COULD HAVE REFUSED FOR THE SAME. NORMALLY AFTER VERIFICATION OF PAPERS/ DOCUMENTS AUDITORS PL ACE THEIR IDENTIFICATION MARK THEREON TOGETHERWITH THEIR SEAL TO ENABLE HIM TO JU STIFY THAT WHO HAD VERIFIED A PARTICULAR PAPER, HOWEVER FROM THE ZEROX COPIES OF THE IMPOUNDED PAPERS IT APPEARS THAT HE HAS NOT DONE SO IN THIS CASE WHICH SUPPORTS THAT NO VERIFICATION OF RECORDS AND EVEN IMPORTANT PAPERS WAS MADE BY HIM. SIMPLY SOME PAPERS APPEARS TO BE SHOWN TO AUDITORS BY LEARNED AO OR IT MAY BE THAT SPECIAL AU DITORS MIGHT BE BRIEFED BY LEARNED AO AS TO SOME IMPORTANT PAPERS. 2.7 I SUBMIT AS PER TERMS AND REFERENCE ASSIGNED J OB OF AUDITORS NARRATED IN PARA 2.2 (A) ABOVE INCLUDES PREPARATION OF CASH INF LOW/ OUTFLOW STATEMENTS, CASH BOOK, LEDGER, TRIAL BALANCE, FINAL ACCOUNTS I.E. TR ADING AND PROFIT AND LOSS ACCOUNT, 11 BALANCE SHEET ETC. FOR DIFFERENT YEARS WITH THE AIM TO ENABLE THE DEPARTMENT TO ARRIVE AT THE TRUE STATE OF FINANCIAL AFFAIRS OF THE VARIO US CONCERNS IN WHICH THE ASSESSES IS ASSOCIATED EITHER AS A PROPRIETOR OR PARTNER (BOTH IN INDIVIDUAL OR HUF CAPACITY) OR A DIRECTOR OF COMPANY AUDITORS JOB, WITH RESPECT, DOES NOT INCLUDES ALL THIS, HE IS NOT SUPPOSED TO PREPARE CASH BOOK, LEDGER, TRIAL BALANC E, ETC. 2.8 WHILE DECIDING THE ISSUE SIMILAR TO US THE HON BLE ITAT JODHPUR BENCH IN BAJRANG TEXTILES VS. DY.CIT (2004) 83 TTJ (JD) WHIL E TAKING SUPPORT FROM THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN SWADESH I COTTON MILLS CO. LTD. VS. CIT (1985) 171 ITR 634 (ALL) HELD THAT ONLY VOLUMIN OUS RECORDS OR THAT TIME FOR GATHERING OF INFORMATIONS CANNOT BE EQUATED TO THE COMPLEXITY IN ACCOUNTS. THE HONBLE BENCH FURTHER HELD THAT TO PREPARE CASH BOO K, LEDGER, TRADING & P&L A/C ETC IS NOT THE SUBJECT OF SPECIAL AUDITORS. 2.9 THIS DECISION WAS AFFIRMED BY RAJASTHAN HIGH C OURT IN CIT VS. BAJRANG TEXTILES (2006) 205 CTR 287 (RAJ). THE HONBLE COUR T HELD- THE TRIBUNAL FOUND THAT MERELY BECAUSE ACCOUNTS AN D DOCUMENTS WERE VOLUMINOUS, IT IS NOT TAKEN TO ASSUME COMPLEXITY SO AS TO INVOKE T HE PROVISIONS OF S.142(2A) OF THE IT ACT AS A MATTER OF COURSE. THE TRIBUNAL ALSO NOTICE D THAT THE AO HAS NOT MERELY REFERRED THE ACCOUNTS TO BE AUDITED UNDER SPECIAL A UDIT BY AN AUDITOR NAMED BY HIM, BUT HE HAS DIRECTED THE SPECIAL AUDITOR TO PREPARE THE BOOKS OF ACCOUNT IN THE FORM OF CASH BOOK, LEDGER, ON THE BASIS OF DOCUMENTS/PAPER S SEIZED DURING THE COURSE OF SEARCH AS PER HIS DIRECTIONS. THE AUDITOR WAS ALSO REQUIRE D TO PREPARE TRADING, P&L A/C, WHICH WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND FURTHER TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD. APPARENTLY THE ORDER WAS FOR PREPARING FRESH BOOKS RATHER THEN TO CONDUCT A SPECIAL AUDIT. THIS WAS ON THE FACE, OF IT BEYOND THE SCOPE OF PROVISIONS OF S. 142(2A) OF THE IT ACT. NO AUTHORITY HAS BEEN GIVEN TO THE AO TO DIREC T THE PREPARATION OF FRESH BOOKS BY REFERRING THE MATTER TO AN AUDITOR UNDER SPECIAL AU DIT. AUDIT IS FOR THE PURPOSE OF SATISFYING ONE ABOUT AUTHENTICITY AND CREDIBILITY O F ACCOUNTS PREPARED BY THE ASSESSEE BUT NOT FOR PREPARING NEW ACCOUNT BOOKS AS PER DIR ECTIONS OF AOS. APPARENTLY THE TRIBUNAL FOUND THAT IT WAS ABUSE OF PROCESS BY THE AO. THE FINDINGS GIVEN BY THE TRIBUNAL ARE FINDINGS OF FACT BASED UPON THE RELEVA NT MATERIAL. 2.10 I AM REPRODUCING COMMENTS AND OBSERVATIONS OF AUDIT ORS IN RELATION TO MY ACCOUNTS FOR ASS.YEAR 2002-03 TO 2005-06 AND 2008-0 9 (PB 44 & 45) WHICH ARE AS UNDER:- COMMENTS & OBSERVATIONS OF AUDITORS APPOINTED U/S 1 42(2A) FOR THE ASSESSMENT YEAR 2002-03, 2003-04, 2004-05, 2005-06 & 2008-09 WE HAVE BEEN APPOINTED AUDITORS U/S 142(2A) BY THE WORTHY CIT, KOTA VIDE HIS OFFICE NO. CIT/KOTA/ITO(T)/2009-10/2541 DATED 13.11.2009. AFTE R EXAMINING THE IMPOUNDED 12 BOOKS AND DOCUMENTS LYING WITH THE INCOME TAX OFFIC ER, WARD-2(1), KOTA OUR COMMENTS AND OBSERVATION ARE AS FOLLOWS:- 1. LETTERS OF REQUIREMENT OF DOCUMENTS, INFORMATION AND EXPLANATION WERE SENT ON 13.01.2010, 16.03.2010,08.04.2010 &12.04.2010. THE ASSESSEE REPLIED VIDE HIS LETTER DATED 21.01.2010, 25.01.2010, 22.03.2010, 10 .04.2010 & 16.04.2010 SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS FOR THE PE RIOD HAVE BEEN IMPOUNDED DURING THE SURVEY AND LYING IN THE INCOME TAX DEPAR TMENT. REGULAR BOOKS OF ACCOUNT ARE NOT AVAILABLE FOR AUDIT. UNDER SUCH CIR CUMSTANCES, WE ARE UNABLE TO PREPARE AND SUBMIT SPECIAL AUDIT REPORT FOR THE GIV EN PERIOD BUT COMMENTS AND OBSERVATIONS HAVE BEEN PREPARED AFTER EXAMINING THE IMPOUNDED RECORDS WITH THE DEPARTMENT. 2. NO PROPER EXPLANATION/VERIFICATION IS AVAILABLE FOR THE FOLLOWING AMOUNT OF ROYALTY, FOUND IN LOOSE PAPER NO.5 OF ANNEXURE NO. 42. F.Y. ROYALTY OF M.LNO. 370/90 ROYALTY OF M.LNO. 223/90 2001-02 960000 810000 2002-03 850000 501661 2003-04 176000 240000 2004-05 270000 427954 2005-06 99000 187000 2006-07 109000 45000 3. NO PROPER EXPLANATION/VERIFICATION IS AVAILABLE FOR THE FOLLOWING AMOUNT OF ROYALTY, FOUND IN LOOSE PAPER NO.73 OF ANNEXURE NO. 56. M.L.NO. ROYALTY AMOUNT DEPOSITED WEIGHT 223/90 122323 140000 3058.09 370/90 73689 80000 1542.23 280/97 630295 671300 15017.355 TOTAL: 826307 891300 19617.675 4. NO PROPER EXPLANATION/VERIFICATION IS AVAILABLE FOR THE TRADING ACCOUNT OF DEEPAK STONE FOUND IN LOOSE PAPER NO.48 OF ANNEXURE NO. 23 . TRADING ACCOUNT FOR F.Y.2002-03 PARTICULARS AMOUNT PARTICULARS AMOUNT LIME STONE 1559453 SALES (AGAINST S.T.17) 3694608 S.T. 169952 S.T. AND S.C. 169952 ROYALTY 1811485 WELFARE 45289 G.P. 278381 TOTAL 3864560 3864560 TRADING ACCOUNT FOR F.Y.2003-04 PARTICULARS AMOUNT PARTICULARS AMOUNT 13 LIME STONE 720632 SALES (AGAINST S.T.17) 1686335 S.T. 71570 S.T. AND S.C. 77570 ROYALTY 22248 WELFARE 842612 G.P. 100843 TOTAL 1757905 1763905 5. FOLLOWING PAYMENTS HAVE BEEN MADE TO SWASTIK STO NE CRUSHER OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE AND BANK DRAFT, AS PER ANNEXUR E NO. A/10 OF IMPOUNDED BOOKS (CASH BOOK OF SWASTIK STONE CRUSHER). THUS THERE IS VIOLATION U/S 40A(3) OF INCOME TAX ACT, 1961. DATE C.F.OF ANN. A/10 AMOUNT 26.06.2007 41 42242 05.09.2007 76 80000 TOTAL: 122242 THANKING YOU, YOURS FAITHFULLY, SD/- (P.KHANDELWAL) CHARTERED ACCOUNTANT 2.11 I MAY MENTION AT THIS STAGE THAT DURING ASSESS MENT PROCEEDINGS, THE LEARNED AO WAS SATISFIED WITH MY EXPLANATION THAT PARA 4 OF THE REPORT DOES NOT PERTAIN TO ME AND THEREFORE IT WAS NOT CONSIDERED IT IN MY CASE. FROM THESE REPORTS YOU WILL PLEASE FIND THAT AUDITORS HAVE GATHERED INFORMATIONS FOR L EARNED AO TO ENABLE HIM TO TAKE DECISION ON THOSE INFORMATIONS. WE WITH RESPECT SUB MIT IT NEITHER REFLECTS ANY COMPLEXITY IN ACCOUNTS NOR IT JUSTIFIES ROLE OF THE SPECIAL AUDITORS IN TERMS OF PROVISIONS OF SEC.142(2A). 2.12 AS MENTIONED IN THE LEARNED AOS APPOINTMENT L ETTER DATED 19.11.2009 THE AUDITORS WERE TO GIVE THEIR REPORT BY 31.12.2009. U /S 142(2C) SUCH PERIOD CAN BE EXTENDED BY THE AO EITHER SUO MOTO OR ON REQUEST OF THE ASSESSEE FOR ANY GOOD AND SUFFICIENT REASONS. HOWEVER, IT CAN NOT BE EXTENDED ON REQUEST OF AUDITORS. BUT IN THIS CASE PERIOD WAS EXTENDED FROM 31.12.2009 TO 28.02.2 010, FROM 28.02.2010 TO 28.03.2010 AND FROM 28.03.2010 TO 30.04.2010 ON REQ UEST OF AUDITORS WHICH IS WITNESSTH FROM LETTERS DATED 21.12.2009 & 04.03.201 0 OF THE LEARNED AO (PB 38 & 40). I MAY FURTHER MENTION SECOND EXTENSION IS REQU ESTED BY AUDITORS AFTER LAPSE OF TIME AVAILABLE TO HIM. 2.13 FROM MY AFORESAID SUBMISSIONS IT IS EVIDENT TH AT:- (I) DURING SURVEY NO EXTRA MONEY / EXCESS STOCK / A DDITIONAL INVESTMENT OTHER THAT WHAT IS INCORPORATED IN BOOKS WAS FOUND; 14 (II) IN SPITE OF REPEATED REQUESTED COPIES OF IMPOU NDED PAPERS WERE NOT GIVEN TO ME FOR 18 MONTHS; (III) DURING 02.10.2008 TO 07.09.2009 THE LEARNED A O DID NOT CALL ME TO ASSIST HIM TO EXPLAIN ANY COMPLEXITY IN IMPOUNDED P APERS OR PAPERS ATTACHED WITH ROI FILED IN RESPONSE TO NOTICE U/S 148. (IV) ON 17.09.2009 WHEN I WENT TO THE OFFICE OF THE LEARNED AO FOR EXPLAINING COMPLEXITY IN ACCOUNTS IN CONTEXT OF HIS LETTER DATED 07.09.2009 (PB 28) I WAS DENIED PERSONAL ATTENDANCE BY LEARNED AO; (V) NO COMPLEXITY IN ACCOUNTS WAS JUDGED BY LEARNED AO OR HONBLE CIT BEFORE APPOINTMENT U/S 142(2A); (VI) AUDIT WAS CONDUCTED AT INCOME TAX OFFICE IN MY ABSENCE AND SO I WAS DENIED OPPORTUNITY TO EXPLAIN THE DOCUMENTS /AC COUNTS (PB 38 & 40); (VII) IMPOUNDED PAPERS WERE GIVEN TO ME ON 01.05.20 10 IN SUCH A SHAPE THAT I COULD NOT SYSTEMATICALLY ARRANGE THEM FOR CO UPLE OF WEEKS AND THEREFORE I COULD NOT OFFER ANY EXPLANATION TO SPECIAL AUDITORS ON HI S QUESTIONNAIRE VIDE LETTER DATED 12.04.2010 ( PB 310 & 311). (VIII) FROM AUDIT REPORTS IT IS CRYSTAL CLEAR THAT THERE WAS NO COMPLEXITY IN MY ACCOUNTS; (IX) THE QUESTIONNAIRE DATED 26.05.2010 (PB 46 TO 5 5) OF LEARNED AO APPEARS TO BE FULLY BASED ON QUESTIONNAIRE DATED 12.04.2010 FROM SPECIAL AUDITORS (PB 310 & 311) WHICH STRENGTHS OUR SUBMISSION THAT AUDITORS WERE APPOINTED TO SHIFT RESPONSIBILITY OF LEARNED AO TO HIM. (X) THOUGH THE LEARNED AO IN BODY OF ASSESSMENT ORD ER HAS QUOTED 2 INSTANCES OF MY NON COOPERATION HOWEVER I SUBMIT FI RST WAS BECAUSE OF ILLNESS OF SHRI B.L.SOMANI AND SECOND WAS NOT BECAUSE OF ME BUT BEC AUSE OF LEANRED AO ONLY. 2.14 FROM ABOVE IT IS CLEAR THAT PURPOSE OF APPOINT MENT OF SPECIAL AUDITORS U/S 142(2A) WAS TWO FOLD (I) THAT HE SHOULD ASSIST LE ARNED AO IN COMPUTING CONCEALED INCOME; AND (II) TIME AVAILABLE U/S 153(2) IS GOT EXTENDED. 2.15 IN VIEW OF AFORESAID SUBMISSIONS AND ALSO IN L IGHT OF DECISION OF HONBLE JODHPUR ITAT BENCH IN BAJRANG TEXTILES VS. DY CIT WCHIH IS AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT IN BAJRANG TEXTILE (SUPRA) AND APEX COUR T SAHARA INDIA (SUPRA) AND ALSO DECISIONOF HONBLE I REQUEST ORDERS FOR ASS.YEAR 20 02-03 TO 2005-06 DESERVES ANNULMENT AND THEREFORE I PRAY FOR THE SAME . 2.7 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE AUTHORITIES BELOW. 15 2.8 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE I N HIS WRITTEN SUBMISSION BEFORE US HAS STATED THAT THE AO DID NOT CALL THE ASSESSEE D URING 1-10-2008 TO 7-09-2009 FOR ANY EXPLANATION ON IMPOUNDED PAPERS AND ALSO DID NOT C ALL THE ASSESSEE DURING 08-04-2009 TO 6-12-2009 AFTER RETURN OF INCOME FILED IN COMPL IANCE TO NOTICE U/S 148 OF THE ACT. THE AO IN HER STATEMENT AT PAGE 2 HAS MENTIONED THAT TH E ASSESSEE IN HER STATEMENT HAS STATED THAT HER BUSINESS IS BEING MANAGED BY HER HUSBAND S HRI BABU LAL SOMANI. IF ANY INFORMATION IS NEEDED THEN THE SAME WILL BE PROVIDE D BY SHRI BABU LAL SOMANI. IN THE ASSESSMENT ORDER, THE AO HAS NOT MENTIONED THE DAT E ON WHICH HE HAS RECORDED THE STATEMENT OF THE ASSESSEE. THE STATEMENT OF SHRI BA BU LAL SOMANI WAS RECODED ON 11-10- 2008. IN THE STATEMENT, SHRI BABU LAL SOMANI ADMITT ED THAT DEEPAK STONE IS THE FIRM OWNED BY SHRI RITESH SOMANI. IT MEANS THAT SHRI BAB U LAL SOMANI WAS LOOKING AFTER THE BUSINESS OF HIS WIFE. THE MATTER CAN BE REFERRED TO THE SPECIAL AUDIT IN CASE THE NATURE AND THE COMPLEXITIES OF THE ACCOUNTS SO DEMANDS. IN THE WRITTEN SUBMISSION REPRODUCED ABOVE, THE ASSESSEE HAS ENCLOSED THE COPY OF THE AU DIT REPORT SUBMITTED BY THE SPECIAL AUDITOR. IN THIS REPORT PARA 4 RELATES TO M/S. DEEP AK STONES. SHRI BABU LAL SOMANI HAS ALREADY ADMITTED THAT THIS FIRM RELATES TO SHRI RIT ESH SOMANI. OTHER PAPERS ARE WITH REFERENCE TO ROYALTY PAID IN RESPECT OF TWO MINES FOR THE ASSESSMENT YEAR 2001-02 TO 2006-07. PARA 5 OF THE AUDIT REPORT PREPARED BY THE SPECIAL AUDITOR IS IN RESPECT OF PAYMENT IN CASH. IT IS TRUE THAT NATURE AND COMPLEX ITIES OF THE ACCOUNTS IS TO BE SEEN AT THE APPOINTED TIME WHEN THE MATTER IS BEING REFERRED. I N THIS CASE, THE ASSESSEE HAS NOT PROVIDED ANY INFORMATION TO THE SPECIAL AUDITOR WHI CH MEANS THAT THE INFORMATION WHICH THE SPECIAL AUDITOR HAS INCLUDED IN THE AUDIT REPOR T ARE ONLY RELEVANT IN THE CASE OF THE ASSESSEE. ALL THESE ISSUES CLEARLY INDICATE THAT TH ERE HAVE BEEN NO COMPLEXITIES OF THE ACCOUNTS. HENCE, IT WAS NOT A CASE WHICH COULD HAVE BEEN REFERRED U/S 142(2A). THE AO 16 IN HIS ORDER HAS CLEARLY MENTIONED THAT NO BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED. HENCE, THE ASSESSMENT WAS TO BE COMPLETED WITHIN 09 MONTHS FROM THE END OF THE FINANCIAL YEAR. ONLY NOTICE U/S 148 OF THE ACT WAS SERVED. AS PER SECTION 153(4) OF THE ACT (EXPLANATION 1 (III), THE PERIOD COMMENCING FRO M THE DATE ON WHICH THE AO DIRECTED THE ASSESSEE TO GET THE ACCOUNTS AUDITED U/S 142(2A ) AND ENDING WITH LAST DATE ON WHICH THE ASSESSEE IS REQUIRED TO FURNISH A REPORT AND SU CH AUDIT, IS TO BE EXCLUDED. SINCE WE HAD ALREADY HELD THE AO WAS NOT JUSTIFIED IN REFERRING THE MATTER FOR SPECIAL AUDIT, THEREFORE, THE PERIOD MENTIONED IN SECTION 153(4) WILL NOT BE AVAILABLE. THE ASSESSMENT ORDER IS THEREFORE, TIME BARRED AND IS CANCELLED. 3.1 THAT GOA NO.3(I) OF THE ASSESSEE AND GROUND NO. 1 OF DEPTT .READS AS UNDER:- GOA NO.3(I) OF ASSESSEE - THE LEARNED CIT(A) ERRED IN CONFIRMING SALES AT R S.3949594/- AS AGAINST RS.2900868/- DISCLOSED BY THE APPELLANT AND ALSO AP PLYING NP RATE OF 5% ON ENTIRE SALES AS AGAINST DECLARED RATE ACCEPTED BY THE LEAR NED AO ON DISCLOSED SALES OF RS.2900868/-. GOA NO.1 OF DEPTT .- THE LEARNED CIT(A) ERRED IN RESTRICTING TRADING AD DITION FROM RS. 1048726/- TO RS. 851246/-. (IN FACT IT SHOULD BE 197480/-) 3.2 WE HAVE HEARD BOTH THE PARTIES. THE GROUND NO. 3 (1) OF THE ASSESSEE AND THE GROUND NO. 1 OF THE REVENUE ARE ON THE SAME ISSUE A ND THEREFORE, THESE ARE DISPOSED OFF TOGETHER. 3.3 THE LEARNED AO HAD MADE ADDITION OF RS. 1048726 /- WITH FOLLOWING REASONS/ (I) THE ASSESSEE HAS MADE ROYALTY PAYMENT RS. 1795 270/- AND ITS PAYMENT AS PER MINING DEPTT. SHOULD BE RS.40/- PER TON OF LIME STONE PRODUCTION THEREFORE MY PRODUCTION SHOULD BE 1795270/40 I.E. 44871.75 M.TON ; (II) SALE PRICE OF LIME STONE TO SHRIRAM CEMENT WO RKS LTD. KOTA IS @ RS. 88/- PER M.TON AND THEREFORE MY TOTAL SALES SHOULD BE RS . 44871.75*88=3949594/-. (III) THE ASSESSEE HAD DISCLOSED SALES AT RS. 2900 868/- LEARNED AO MADE 17 ADDITION OF RS. 1048726/- (3949594-2900868) 3.4 BEFORE US, THE ASSESSEE HAS SUBMITTED AS UNDER :- (I) MY ACTUAL ROYALTY PAYMENT IS RS. 1770000/- WHIC H IS MATCHING WITH THE FIGURES GIVEN BY MINING DEPTT.AND WHICH IS APPEARING IN THE LEARNED AOS LETTER DATED 26.05.2010 ALSO. REST RS. 25270/- ARE LABOUR EXPENSES RS. 10970/- AND BLASTING EXPENSES RS. 14300/- WHICH ARE WRONGLY DEBITED TO ROYALTY ACCOUNT. (II) THAT EVERY ROYALTY PAYMENT DOES NOT MEAN LIME STONE PRODUCTION AND EVERY PRODUCTION DOES NOT MEAN SALEA BLE PRODUCTION. MOREOVER SALE PRICE FROM SHRIRAM CEMENT WORKS IS FOR VERY HI GH QUALITY PRODUCTION WHICH IS NOT PAID BY OTHERS. (III) HOWEVER TO PURCHASE PEACE I SUBMITTED THAT EV EN IF THIS FORMULA OF LEARNED AO IS ACCEPTED IT WILL GIVE SALE TO 1770 000/40*88 I.E. RS. 3894000/- AND UNDISCLOSED SALES TO 993132 (3984000-2900868). (IV) I THEREFORE MADE REQUEST TO HONBLE CIT(A) FOR APPLICATION OF REASONABLE RATE OF 5% ON RS. 993132/- WHICH IS GENE RALLY APPLIED IN THIS LINE OF BUSINESS AND WHICH IS AT PAR TO SEC.44AF ALSO. I AL SO DREW ATTENTION OF LEARNED CIT(A) THAT THE LEARNED AO IN HIS LETTER DATED 26.0 5.2010 HAD INITIALLY PROPOSED 10% NP RATE ON UNDISCLOSED SALES(PB 46). 3.5 THE AO SUBMITTED THE REMAND REPORT WHICH IS REP RODUCED BY THE LD. CIT(A) IN PARA 5.3 OF HIS ORDER AND THE SAME IS REPRODUCED AS UNDER:- THE ASSESSEE HAS SHOWN TOTAL SALES LIME STONE OF RS.2900868/- AND DECLARED LOSS OF RS.59330/-. ON TH E PERUSAL OF ROYALTY ACCOUNT IT WAS FOUND THAT THE ASSESSEE HAS PAID ROY ALTY OF RS.179527O/-. THE SAID PAYMENT OF ROYALTY WAS MADE @40/- PER M.T. , AS PER INFORMATION GATHERED FROM THE MINING DEPT. THE ASSE SSEE HAS SOLD THE MAXIMUM QUANTUM OF SALE TO SHRI RAM CEMENT WORKS, K OTA WHERE THE RATE HAS BEEN TAKEN BY THE ASSESSEE @ RS.88/- PER M .T. AND IT WAS ALSO FOUND THAT THE ASSESSEE HAS NOT SHOWN ANY CLOSING S TOCK OF THE SAME. THUS ON THE BASIS OF ROYALTY PAYMENT THE PRODUCTION IS C ALCULATED AT RS.3946594 (1795240 X 88/40) & THE ASSESSEE HAS SHO WN TOTAL SALE OF RS.2900868/-. THUS THE DIFFERENCE OF RS 1048726 (39 43594 - 2900868) WAS MADE. DETAILED DISCUSSION HAVE BEEN MADE IN THE ASSESSMENT ORDER AS PER PARA NO 1 IN THIS REGARD ' 18 3.6 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S APPLIED 5% NET PROFIT RATE ON ENTIRE SALES AND RESTRICTED THE ADDITION TO RS. 1,9 7,480/- 3.7 BEFORE US, THE LD. AR HAS SUBMITTED AS UNDER:- 3.07 THERE ARE PLETHORA OF JUDGMENTS WHEREIN HON BLE COURTS / HONBLE ITAT BENCHES HAVE HELD APPLICATION OF DISCL OSED NP RATE / GP RATE IN CASE OF UNDISCLOSED SALES. (RELIANCE IS MADE ON CIT VS. BALCHAND AJIT KUMAR 186 CTR (MP) 419; MANMOHAN SADANI VS.CIT 304 ITR 52 (MP) & CIT VS. PRESIDENT INDUSTRIES 158 CTR 372).MY DISCLO SED NP RATE WAS ALSO NOT DISTURBED BY LEARNED AO. HOWEVER AS IT WAS IN N EGATIVE THEREFORE I HAD REQUESTED HONBLE CIT(A) TO APPLY NP RATE OF 5% (WH ICH IS AT PAR TO RATE MENTIONED U/S 44AF) ON UNDISCLOSED SALES. 3.08 THOUGH HONBLE CIT(A) HAS APPLIED 5% NP RATE B UT HE HAS APPLIED 5% NP RATE ON DISCLOSED SALES ALSO WHICH WA S NOT DISPUTED BY THE LEARNED AO. I SUBMIT THIS AMOUNTS TO ENHANCEMENT. A S ENHANCEMENT HAS BEEN MADE WITHOUT GIVING NOTICE IN CONSONANCE TO PR OVISIONS OF SEC. 251(1) IT IS BEYOND LEGAL SANCTION. I THEREFORE REQUEST THAT GROUND NO.1 OF THE DEPTT. WHICH BEING UNTENABLE BE DISMISSED AND MY GROUND NO .3(I) BE PARTLY ALLOWED WITH A FINDING TO APPLY 5% NP RATE ON UNDISCLOSED S ALES ONLY AS AGAINST ENTIRE SALES AND IN CASE OF DISCLOSED SALES ORDER O F THE LEARNED ITO BE SUSTAINED. 3.8 ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TH E ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS. THEREFORE, THE AO WAS JUSTIFIED IN ESTIMATING THE SALES AND CONSIDERING THE PROFIT WHICH IS DIFFERENT BETWEEN T HE ROYALTY AND THE SALES PRICE. 3.9 WE HAVE HEARD BOTH THE PARTIES. IN CASE ANY MIN ERAL IS BEING TAKEN OUT FROM THE MINES THEN IT IS DONE WITH THE HELP OF THE RAVANNA ISSUED BY THE MINING DEPARTMENT. IN THE RAVANNA, IT IS TO BE MENTIONED AS TO WHOM SUCH MINERAL IS BEING SOLD. IT IS TRUE THAT THE ROYALTY IS PAYABLE ON THE MINERAL WHICH IS DISP ATCHED AND NOT ON THE MINERAL WHICH IS LYING AT MINES. THUS THE ROYALTY IS AN INDICATOR IN RESPECT OF QUANTITY DISPATCHED. HOWEVER, IN EXTRACTING THE ORE OR MINERAL, THE ASSE SSEE HAS TO INCUR OTHER EXPENSES AND ROYALTY IS NOT THE ONLY EXPENDITURE. THERE MAY BE C OMPARABLE CASES AND THE AO COULD HAVE COLLECTED THE INFORMATION FROM THE MINING DEPA RTMENT. WE THEREFORE, FEEL THAT THE 19 ISSUE, OF ESTIMATING THE PROFIT FROM SALE OF LIME S TONE AND ALSO ESTIMATING THE QUANTUM OF SALES, IS REQUIRED TO BE RECONSIDERED BY THE AO. T HEREFORE, THESE ISSUES ARE RESTORED BACK ON THE FILE OF THE AO. 4.1 GROUND NO. 3 (II) OF THE ASSESSEE AND GROUND NO . 2 OF THE DEPARTMENT ARE ON THE SAME ISSUES THEREFORE, THESE ISSUES WILL BE DISPOSE D OFF TOGETHER. GOA NO.3(II) OF ASSESSEE - THE LEARNED CIT(A) ERRED IN MAKING ADDITION OF RS. 135000/- (CASH IN HAND ON 01.04.2001) IGNORING THIS FACT THAT APPE LLANT WAS DOING BUSINESS OF LIME STONE EARLIER ALSO WHICH JUSTIFIES CASH IN HAND ON 01.04.2001. MOREOVER AS IT WAS OPENING CASH BALANCE ADDITION IS NOT JUSTIFIED IN ASS. YEAR 2002-03. GOA NO.2 OF DEPTT.- THE LEARNED CIT(A) ERRED IN RESTRICTING ADDITION O N ACCOUNT OF ADVANCES OF RS. 780568/- TO RS. 135000/-. 4.2 ALONGWITH THE RETURN FILED ON 08.04.2009 IN R ESPONSE TO NOTICE U/S 148, THE ASSESSEE HAD APPENDED P&L A/C AND BALANCE SHEET WHEREIN INTE REST OF RS. 277800/- AND LOANS & ADVANCES OF RS. 780568/- (PB 10) WERE SHOWN BY ME. IN REPLY TO POSERS IN THIS REGARD THE ASSESSEE HAD SUBMITTED THAT MY LOANS ARE APPEARING IN BALANCE SHEET AND INTEREST IS BEING SHOWN IN P&L A/C. DURING HEARING OF THE GROUP CASE IT WAS ARGUED BY US THAT IN ANNEXURE- 24 FINANCIAL ACTIVITIES OF SMT.MEENA SOMANI FROM AS S.YEAR 2002-03 TO 2009-10 WERE APPEARING. IT WAS ALSO SUBMITTED BY US THAT ORIGIN OF THE ANNEXURE-24 IS ASS.YEAR 2002-03. THE ASSESSEE MENTIONED ACTION U/S 148 IN OUR GROUP WAS TAKEN AS UNDER:- SHRI BABULAL SOMANI ASS.YEAR 2004-05 TO 2007-08 SMT.MEENA SOMANI ASS.YEAR 2002-03 TO 2005-06 RITESH KUMAR SOMANI ASS.YEAR 2003-04 TO 2007-08 AS IN ANNEXURE-24 ENTRIES ARE FROM ASS. YEAR 2002-0 3 AND AS NOTICE U/S 148 FOR ASS.YEAR 2002-03 WAS NOT ISSUED TO OTHERS, THE ASSESSEE SUBM ITTED THE THEN AO WAS PERHAPES VERY 20 CLEAR THAT ANNEXURE-24 BELONGS TO ME ONLY. 4.3 THE ADDITIONS IN RELATION TO ANNEXURE-24 WERE MADE IN ASS.YEAR 2002-03 & 2003- 04 IN MY HANDS. ADDITIONS FOR AMOUNT ADVANCED AND A DDHOC INTEREST @ 18% WERE MADE FROM ASS.YEAR 2003-04 TO 2008-09 IN HANDS OF RITESH KUMAR SOMANI ON SUBSTANTIVE BASIS AND SAME WERE REPEATED FOR AMOUNT ADVANCED IN ASS.Y EAR 2004-05 TO 2008-09 IN HANDS OF SHRI BABULAL SOMANI ON PROTECTIVE BASIS. INSTALLMEN T REALISEABLE AND INTEREST RECEIVED WERE AGAIN TAXED IN HANDS OF SHRI BABULAL SOMANI FOR ASS .YEAR 2004-05 TO 2008-09 ON SUBSTANTIVE BASIS AND IN ASS.YEAR 2004-05 & 2005-06 IN MY HANDS ON PROTECTIVE BASIS. AS ASSESSEE HAD NOT RECEIVED ANY NOTICE U/S SEC.148 F OR ASS.YEAR 2006-07 & 2007-08 AND ASSESSEE DID NOT FILE MY ROI FOR THESE 2 YEARS NO ADDITIONS WERE MADE IN MY HANDS IN THOSE YEARS. HOWEVER, FOR ASS.YEAR 2008-09 ASSESSEE HAD FILED ROI WHICH WAS SUBJECT TO SCRUTINY. THIS ASSESSMENT WAS COMPLETED ON 13.12.20 10 I.E. AFTER 5 MONTHS OF EARLIER ORDERS. DURING ASSESSMENT PROCEEDINGS ON ASSESSEE'S REQUEST LEARNED AO EXAMINED THE BOOKS OF ACCOUNTS VIZ-A-VIZ ANNEXURE-24. AS THE AO HE DID NO T FIND ANY DEFICIENCY AND HE DID NOT MAKE ANY ADDITIONS IN SPITE OF THE FACT THAT IN SAM E ASSESSMENT YEAR ADDITIONS WERE MADE IN RITESH KUMAR SOMANI AND BABULAL SOMANIS CASE. THIS WAS DEPARTURE TO PAST HISTORY. STATUS OF ADDITIONS MADE BY LEARNED AO AND RELIEF BY LEARN ED CIT(A) EITHER WITH DIRECTION OR WITHOUT DIRECTION IN DIFFERENT YEARS IN DIFFERENT H AND IS GIVEN AT PB 312 TO 317.) THE MATTER IN RELATION TO ASS.YEAR 2004-05 TO 2008-09 IN CASE OF BABULAL SOMANI, RITESH KUMAR SOMANI AND ASSESSEE FOR LIMITED PURPOSE I.E. VERIF ICATION OF CASH BOOK VIZ-A-VIZ ANNEXURE- 24 WAS REMITTED BACK TO LEARNED AO BY HONBLE CIT(A ). THE LEARNED AO VERIFIED ALL ENTRIES FROM CASH FROM ASS.YEAR 2002-03 TO 2008-09 AND DID NOT FOUND ANY WRONG THEREIN (PB 294 TO 295, 302 TO 309) 21 4.4 THE LEARNED AO MADE ADDITIONS OF RS.780568/- IN ASS.YEAR 2002-03 WHICH REPRESENTS ADVANCE OF LOANS RS. 534000/- AND INTEREST. THE LEA RNED AO WHILE MAKING THESE ADDITIONS DID NOT APPRECIATE THIS FACT THAT ASSESSEE HAD ALREADY SHOWN INTEREST RS. 277800/- IN P&L A/C (PB 9) AND ADVANCES OF RS. 780568/- (PB 10) WERE APPEA RING IN MY BALANCE SHEET AS AT 31.03.2002. BOTH P&L A/C AND BALANCE SHEET WERE FILED TOGETHERW ITH ROI FILED ON 08.04.2009. 4.5 DURING APPEAL HEARING ASSESSEE SUBMITTED TO TH E LEARNED CIT(A) THAT POST SURVEY ASSESSEE HAS PREPARED BOOKS OF ACCOUNTS WITH THE B ANK STATEMENTS AND INFORMATIONS WITH ME. WITH THESE BOOKS OF ACCOUNTS ENTRIES APPEARING IN A NNEXURE A-24 ARE VERIFIABLE WITH THE HELP OF WHICH THE ASSESSEE HAS FILED ROI ON 08.04.2009 TO GETHER WITH P&L A/C AND BALANCE SHEET WHEREIN INTEREST AMOUNT AND ADVANCES AS PER ANNEXUR E-24 ARE APPEARING. IT WAS FURTHER SUBMITTED THAT COPIES OF IMPOUNDED PAPERS ARE GIVEN TO ASSESSEE ON 01.05.2010 WHEREAS ROI WAS FILED ON 08.04.2009 I.E. MORE THAN ONE YEAR BEF ORE DURING HEARING OF APPEAL CASH BOOK, COPIES OF ACCOUNTS OF THE PARTIES AS WELL AS COPY O F ANNEXURE A-24 WERE PRODUCED BEFORE LEARNED CIT(A). ENTRIES OF ANNEXURE A-24 (PB 57 TO 156) VIZ-A-VIZ CASH BOOK (PB 169 TO 181) AND COPIES OF ACCOUNTS OF PARTIES (PB 182 TO 184) W ERE VERIFIED BY HONBLE CIT(A) ALSO. HE WAS SATISFIED WITH THE ENTRIES BUT HE DID NOT ACCEP TED OPENING CASH IN HAND RS.135000/- AND THEREFORE HE MADE THIS ADDITION BUT DELETED ADDITIO NS OF RS.780568/- MADE BY THE LEARNED AO. 4.6 BEFORE US, THE LD. AR HAS FILED THE FOLLOWING S UBMISSIONS:- 4.07 (I)THAT BASE OF ANNEXURE-24 STARTS FROM ASS. YEAR 2002-03 AND NOTICE U/S 148 FOR ASS.YEAR 2002-03 WAS GIVEN TO ME ONLY WHICH MEANS THAT THE THEN AO WAS SATISFIED THAT THIS ANNEXURE CONTAINS M Y FINANCIAL ACTIVITIES ONLY. (II) THAT I HAD FILED MY ROI ON 08.04.2009 WITH THE HELP OF CASH BOOK (PB 169 TO 181) WHEREFROM ALL ENTRIES RELATING TO A NNEXURE-24 IS VERIFIABLE. COPIES OF IMPOUNDED PAPERS WERE GIVEN TO ME ON 01.0 5.2010 I.E. AFTER MORE THAN ONE YEAR OF ROI FILED. 22 (III) THE HONBLE CIT(A) WAS PROVIDED COPIES OF CAS H BOOK WHEREFROM HE ALSO VERIFIED ALL ENTRIES. HE PROVIDED COPIES OF SAME TO LEARNED AO WHO DID NOT MADE ANY OTHERWISE COMMENTS IN HIS REMA ND REPORT. (IV) MATTER IN RELATION TO ASS.YEAR 2004-05 TO 2008 -09 IN CASE OF BABULAL SOMANI, RITESH KUMAR SOMANI AND MYSELF FOR LIMITED PURPOSE I.E. VERIFICATION OF CASH BOOK VIZ-A-VIZ ANNEXURE-24 WAS REMITTED BACK TO LEARNED AO BY HONBLE CIT(A). THE LEARNED AO VERIFIED ALL E NTRIES FROM CASH FROM ASS.YEAR 2002-03 TO 2008-09 AND DID NOT FOUND ANY W RONG THEREIN (PB 294 TO 295, 302 TO 309). (V) WHILE MAKING ASSESSMENT FOR ASS.YEAR 2008-09 I N MY CASE THE LEARNED AO VERIFIED ALL ENTRIES AND HE DID NOT MADE ANY ADDITIONS OF THE NATURE WHICH WERE MADE IN EARLIER YEARS AND IN OTHE R GROUP CASES (PB 277 TO 282). 4.08 (I) AS STATED ABOVE THE HONBLE CIT(A) DID NOT FOUND MERIT IN OPENING CASH BALANCE RS. 135000/- BECAUSE APPELLAN T HAD NOT FILED ROI FOR ASS.YEAR 2001-02 AND EARLIER YEARS AND THEREFORE HE MADE ADDITION OF RS. 135000/-. THE LEARNED CIT(A) DID NOT APPRECIATE THI S FACT THAT NOTICE U/S 148 FOR ASS.YEAR 2001-02 WAS NOT GIVEN BECAUSE ANNEXURE 24 HAD STARTED FROM ASS.YEAR 2002-03. I DID NOT FILE RETURN IN EARLIER YEARS BECAUSE MY INCOME WAS B.T.L. AT THAT TIME. I HAD FILED ROI FOR ASS.YE AR 2002-03 TO 2005-06 IN RESPONSE TO NOTICE U/S 148 ONLY. THE LEARNED AO HAD NOT MADE ADDITION FOR OPENING CASH BALANCES AND THEREFORE TO MAKE SUCH AD DITION DURING APPEAL BY HONBLE CIT(A) WITHOUT GIVING NOTICE FOR ENHANCEMEN T IS BEYOND LEGAL SANCTION. BESIDES IT IS ENHANCEMENT DISCOVERING NEW SOURCE OF INCOME. TO DISCOVER NEW SOURCE AND MAKE ENHANCEMENT BY HONBLE CIT(A) IS BEYOND PROVISIONS OF SEC. 250/251. RELIANCE IN THIS REGARD IS MADE ON CIT VS. RAJ BAHADUR HARDU LAL MOTI LAL CHAMARIA 66 ITR 443 (SC) . (II) I MAY ADD DURING 01.04.2001 TO 01.01.2002 I HA D NOT STARTED FINANCING ACTIVITY. I ADVANCED FIRST LOAN OF RS. 15 0300/- ON 02.01.2002 (PB 178) FOLLOWED WITH SECOND AND THIRD LOANS OF RS. 10 0000/- (PB 179) & 284000/- (PB 181) ON 01.02.2002 AND 10.03.2002 RESP ECTIVELY. MY OPEING CASH IN HAND ON THESE 3 DAYS WAS RS.439290/-, 41637 4/- AND 452253/- RESPECTIVELY THUS SUFFICIENT FOR THESE LOANS. IN VI EW OF THIS FACT ALSO ADDITION IS NOT MAINTAINABLE. (III) BESIDES THE HONBLE CIT(A) HAS TAXED OPENING CASH IN HAND OF 01.04.2001 WHICH IF AT ALL TAXABLE RELATES TO ASS.Y EAR 2001-02 AND NOT ASS.YEAR 2002-03 AND THEREFORE ON THIS REASONING AL SO ADDITION NEEDS DELETION. 4.7 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE AO. 23 4.8 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE IN HIS SUBMISSION HAS MENTIONED THAT THE AO HAS VERIFIED ALL THE ENTRIES FROM CASH BOOK FOR ASSESSMENT YEAR 2002-03 TO 2008-09 AND DID NOT FIND ANY WRONG THEREIN. NO ADDI TION HAS BEEN MADE FOR THE ASSESSMENT YEAR 2008-09. KEEPING IN VIEW THE FACTS SUBMITTED BEFORE US BY THE LD. AR, WE FEEL THAT ENTIRE ADDITION WAS NOT REQUIRED TO BE MADE. THE ASSESSEE HAS SHOWN THE OPENING CASH BALANCE AND IT HAS BEEN FOUND BY THE A O THAT ENTRIES AS MENTIONED BY THE ASSESSEE FOR OTHER YEARS HAVE BEEN FOUND TO BE CORR ECT. THEREFORE, THE ENTRIES IN RESPECT OF OPENING CASH CANNOT BE FAULTED. THUS THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 1.35 LACS. 5.1 THE GROUND OF APPEAL NO.3(III) OF THE ASSESSEE READS AS UNDER:- THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF RS.16800/- FROM PROPERTY INCOME. 5.2 ON THIS ISSUE, THE LD. AR HAS FILED THE FOLLOWI NG SUBMISSIONS BEFORE US. 5.02 THE LEARNED AO MADE THIS ADDITION BASED ON S TATEMENT OF MY HUSBAND SHRI BABULAL SOMANI IGNORING THAT TILL 31.0 3.2008 SHOP WAS USED BY ME FOR MY BUSINESS. THE LEARNED AO DID NOT APPRECIA TE THIS FACT THAT STATEMENT WAS MADE BY MY HUSBAND DURING SURVEY AND AT THAT TIME MY HUSBAND WHO IS ABOUT 70 YEARS OF AGE AND NOT SEEN S UCH EPISODE IN LIFE WAS UPSET. WHILE COMPLETING ASSESSMENT FOR ASS.YEAR 200 8-09 (PB 277 TO 282) LEARNED AO APPRECIATED THIS FACT AND DID NOT MADE T HIS ADDITION. THE HONBLE CIT(A) HAS ALSO CONFIRMED THE ADDITION IGNORING MY SUBMISSIONS. I REQUEST FOR DELETION OF ADDITIONS OF RS.16800/-. 5.3 AFTER HEARING BOTH THE PARTIES, WE FEEL THAT TH E LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 16,800/-. 6.1 GROUND OF APPEAL NO. 4 IS ALTERNATIVE GROUND TO GROUND NO. 3 (I). SINCE THE ISSUE RAISED IN GROUND NO. 3(I) IS RESTORED BACK ON THE F ILE OF THE AO, THEREFORE, THE ASSESSEE WILL BE FREE TO RAISE THIS ISSUE WHEN THE ISSUE MEN TIONED IN GROUND NO. 3(1) IS DECIDED BY THE AO. 24 7.1 GROUND NO. 5 IS WITHOUT PREJUDICE TO GROUND NO. 3 (II). SINCE WE HAD DECIDED THE GROUND OF APPEAL NO 3(II) IN FAVOUR OF THE ASSESSEE , THEREFORE, THE GROUND NO. 5 IS ACADEMIC. ITA NO. 598/JP/2011 REVENUE FOR THE ASSESSMENT YEAR 2002-03 8.1 THE ISSUES RAISED IN THE APPEAL OF THE REVENUE STAND DECIDED WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE. THEREFORE, THE FINDINGS AS MENTIONED IN THE APPEAL OF THE ASSESSEE WILL BE APPLICABLE ON THE ISSUES RAISED BY THE ASSESSEE IN ITS APPEAL. ITA NO.615/ JP/2011 ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 9.1 THE GROUND OF APPEAL 1 AND 2 ARE THE SAME AS RA ISED IN THE APPEAL FOR THE ASSESSMENT YEAR 2002-03. FOLLOWING OUR FINDINGS REC ORDED IN THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 200203, THESE GROUND OF APP EAL ARE ALLOWED AND ASSESSMENT ORDER IS CANCELLED. 10.1 GROUND NO. 3 (I) IS AGAINST CONFIRMATION OF SA LES AT RS. 29,73,654/- AS AGAINST RS. 21,51,750/- SHOWN BY THE ASSESSEE AND APPLYING THE NET PROFIT RATE OF 5% ON ENTIRE SALES AS AGAINST DECLARED RATE. 10.2 THIS ISSUE WAS ALSO RASIED IN THE APPEAL OF TH E ASSESSEE FOR THE ASSESSMENT YEAR 2002-03. THIS ISSUE HAS BEEN RESTORED BACK ON THE F ILE OF THE AO FOR ASSESSMENT YEAR 2002-03. FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2002-03, THIS ISSUE IS RESTORED BACK ON THE FILE OF THE AO. 11.1 GROUND OF APPEAL 3 (II) IS AGAINST CONFIRMING THE ADDITION OF RS. 16,800/- FROM PROPERTY INCOME. 11.2 THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE FOR THE Y 2002-03. FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2002-03 , WE H OLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 16,800/ -. 25 12.1 GROUND OF APPEAL NO 4 IS WITHOUT PREJUDICE TO GROUND NO. 3 (1). SINCE THE ISSUE MENTIONED IN GROUND NO. 3(I) HAS BEEN RESTORED BACK ON THE FILE OF THE AO, THEREFORE, THE ASSESSEE WILL BE AT LIBERTY TO RAISE THIS ISSUE BEF ORE THE AO. ITA NO. 599/JP/2011 REVENUE FOR THE ASSESSMENT YEAR 2003-04 13.1 THE FIRST GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE TRADING ADDITION FROM RS. 8,21,904/ - TO RS. 1,48,683/-. 13.2 THE ISSUE IS THE SAME AS RAISED BY THE ASSESSE E IN ITS GROUND OF APPEAL 3 (I). FOLLOWING OUR FINDINGS FOR GROUND OF APPEAL 3 (1), WE RESTORE THIS ISSUE ON THE FILE OF THE AO. 14.1 THE SECOND GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF ADVANCES OF RS . 7.80 LACS 14.2 THIS ADDITION IS IN RESPECT OF ADVANCES AND A RE ON THE BASIS OF ANNEXURE A-24. WHILE DECIDING THE ISSUE IN THE CASE OF THE ASSESSE E FOR THE ASSESSMENT YEAR 2002-03, WE HAVE REPRODUCED THE SUBMISSIONS OF THE ASSESSEE AND HAVE NOTICED THAT ENTRIES IN THIS ANNEXURE ARE VERIFIABLE AND NO ADDITION HAS BEEN MA DE IN THE ASSESSMENT YEAR 2008-09. FOLLOWING OUR FINDING FOR THE ASSESSMENT YEAR 2002- 03, WE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 7.80 LACS . ITA NO. 616/JP/2011 ASSESSEE FOR THE ASSESSMENT YEAR 2004-05 15.1 THE GROUND OF APPEAL NOS. 1 AND 2 ARE THE SAME AS RAISED IN APPEAL GROUND OF APPEAL FOR THE ASSESSMENT YEAR 2002-03. FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2002-03, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIF IED IN REFERRING THE MATTER U/S 142(2A). ONCE THE FINDING IS RECORDED THAT THE MATTER WAS NO T REQUIRED TO BE REFERRED TO SPECIAL AUDIT THEN THE ASSESSMENT ORDER IS BEYOND TIME LIMI T AS AVAILABLE UNDER THE ACT. THEREFORE, THE ASSESSMENT ORDER IS CANCELLED. 26 16. GROUND OF APPEAL NO. 3 WAS NOT PRESSED BY THE A SSESSEE. THEREFORE, THE SAME IS DISMISSED BEING NOT PRESSED. 17.1 GROUND OF APPEAL NO. 4 OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 16,800/- FROM PROPER TY INCOME. 17.2 FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2002-03, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 16,800/- ITA NO. 600/JP/2011 REVENUE FOR THE ASSESSMEN T YEAR 2004-05 18.1 THE FIRST GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO VERIFY THE ADDITION MADE ON ACC OUNT OF ADVANCES OF RS. 3.20 LACS 18.2 ON THIS ISSUE, THE LD. CIT(A) HAS HELD AS UNDE R:- 6.4 THE APPELLANT HAS SHOWN LOANS AND ADVANCES OF RS. 646840/- AND INTEREST RECEIVED OF RS. 86128/- IN HER RETURN FOR THE YEAR. AO HAS NOT BOTHERED TO EXAMINE THESE DETAILS EITHER DURING ASSESSMENT PROC EEDINGS OR DURING REMAND PROCEEDINGS. IN THE REMAND REPORT OBSERVATIONS MADE IN THE ASSESSMENT ORDER HAVE BEEN REPEATED MECHANICALLY. NO SPECIFIC DEFECTS HAV E BEEN FOUND IN THE DETAILS FURNISHED BY APPELLANT ALONGWITH THE RETURN AND THE CASH BOOK PREPARED AFTER SURVEY. HOWEVER SINCE THE REMAND REPORT SENT BY AO IS SILENT ON THIS ISSUE, IT WILL BE PROPER FOR AO TO EXAMINE THIS ISSUE ONCE AGAIN. AO IS DIRECTED TO VERIFY WITH THE HELP OF APPELLANT WHETHER THE AMOUNTS ARE REFLE CTED IN BOOKS OF APPELLANT OR NOT. IF THE AMOUNTS ARE RECORDED IN REGULAR BOOKS OF APPELLANT, ADDITION OF RS. 320000/- MAY BE DELETED BY AO. GROUND NO. 4(II) IS THUS PARTLY ALLOWED. 18.3 AFTER HEARING BOTH THE PARTIES, WE FIND NO INF IRMITY IN THE ORDER OF THE LD. CIT(A) AND THE LD. CIT(A) HAS DIRECTED THE AO TO EXAMINE T HE ISSUE ONCE AGAIN BECAUSE THE REMAND REPORT IS SILENT ON THE CONTENTIONS RAISED B Y THE ASSESSEE. THEREFORE, GROUND NO. 1 OF THE REVENUE IS DISMISSED. ITA NO. 617/JP/2011 ASSESSEE FOR THE ASSESSME NT YEAR 2005-06 27 19.1 THE GROUND OF APPEAL NO. 1 IS THE SAME AS RAIS ED IN GROUND OF APPEAL 1 FOR THE ASSESSMENT YEAR 2002-03. 19.2 DURING THE COURSE OF PROCEEDING BEFORE US, THE ASSESSEE HAS RAISED THE ADDITIONAL GROUND WHICH IS THE SAME AS GROUND OF APPEAL NO 2 F OR THE ASSESSMENT YEAR 2002-03. THE ADDITIONAL GROUND OF APPEAL RELATES TO LEGAL ISSUE AND THEREFORE, THE SAME IS ADMITTED. FOLLOWING OUR FINDING FOR THE ASSESSMENT YEAR 2002- 03, WE HOLD THAT THE AO WAS NOT JUSTIFIED IN REFERRING THE MATTER TO SPECIAL AUDIT AND HENCE THE ASSESSMENT ORDER HAS BEEN BEYOND THE LIMITATION AND THEREFORE, THE ASSESSMENT ORDER IS CANCELLED. 20.1 GROUND OF APPEAL NO. 2 WAS NOT PRESSED BY THE ASSESSEE. THEREFORE, THE SAME IS DISMISSED BEING NOT PRESSED. 21.1 GROUND OF APPEAL NO. 3 OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 25,000/- 21.2 GROUND OF APPEAL NO. 1 OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE TRADING ADDITION TO RS. 25,000/- AS AGAINST RS. 2,69,920/-. 21.3 WE HAVE HEARD BOTH THE PARTIES. WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2002-03, WE HAVE RESTORED BACK THE MATTER OF TRADIN G ADDITION ON THE FILE OF THE AO. THEREFORE, THE ISSUE OF TRADING ADDITION IS RESTORE D BACK ON THE FILE OF THE AO. 22.1 THE FOURTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 16,800/- FROM PROPER TY INCOME. 22.2 FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2002-03, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 16,800/-. ITA NO. 601/JP/2011 REVENUE FOR THE ASSESSMEN T YEAR 2005-06 23.1 THE SECOND GROUND OF APPEAL OF THE REVENUE I S THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF ADVANCES OF RS . 13,67,284/-. 28 23.2 WE HAVE HEARD BOTH THE PARTIES. SIMILAR ISSUE WAS RAISED BY THE REVENUE IN THE ASSESSMENT YEAR 2004-05. THE LD. CIT(A) HAS MENTION ED THAT IF THE AMOUNTS ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE THE N THE ADDITION MAY BE DELETED. FOR THIS PURPOSE, THE LD. CIT(A) HAS DIRECTED TO VERIFY WITH THE HELP OF THE ASSESSEE THAT AMOUNTS ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESS EE OR NOT. . HENCE, THIS IS NOT A CASE WHERE ADDITION HAS BEEN DELETED. WE THEREFORE, FEEL THAT SUCH VERIFICATION IS REQUIRED TO BE MADE. WE THEREFORE, CONFIRM THE FINDINGS OF THE LD. CIT(A) AND ACCORDINGLY THE AO IS DIRECTED TO VERIFY THE ADVANCES. 24. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THAT OF THE REVENUE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22-12 -2011 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 22 /12/2011 *MISHRA COPY FORWARDED TO :- 1. THE ITO WARD- 2 (1), KOTA 2. SMT. MEENA SOMANI, KOTA 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.598 TO 617/JP /11) A.R, ITAT, JAIPUR 29 30