M/s Surbhi Agro Foods Products, Solan V. DCIT, Chandigarh

ITA 60/CHANDI/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8302 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 07-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Document seized; Opportunity of being heard; Retrospective amendment; Additional evidence; Reasonable cause; Assessment record; Documents seized
• Section: 69C; 133A; 80IB; 12A; 10B; 201(1); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 740 & 741/CHD/2013 A.YS : 2008-09 & 2009-10 M/S HEERA MOTI AGRO INDUSTRIES, VS THE DCIT, 204, HPSIDC, INDUSTRIAL AREA,BADDI, CENTRAL CIRCLE -1, DISTT. SOLAN (HP). CHANDIGARH. PAN: AADFH7463B & ITA NOS. 60, 63 & 64/CHD/2014 A.YS : 2005-06, 2008-09 & 2009-10 M/S SURBHI AGRO FOODS PRODUCTS, VS THE DCIT, 144, HPSIDC, INDUSTRIAL AREA, BADDI, CENTRAL CIRCL E-1, DISTT. SOLAN (HP). CHANDIGARH. PAN: AAJFS0102Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI RAVI SARANGAL DATE OF HEARING : 08.02.2017 DATE OF PRONOUNCEMENT : 23.02.2017 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OFF ALL THE ABOVE APPEALS FILED BY THE ASSESSEE IN WHICH IDENTICAL ISSUES HAV E BEEN RAISED. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE AP PEALS ARE DECIDED AS UNDER: ITA 740/2013 : ( M/S HEERA MOTI AGRO INDUSTRIES,SOLAN) ( A.Y. 2008-09) 3. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 18.03.2013 FOR ASSESSMENT YEAR 2008-09. 4. LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUN D NOS. 1, 2, 6, 7, 8 AND 9. THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 5. ON GROUND NO. 3, ASSESSEE CHALLENGED THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT TO THE TUNE OF RS. 2,98,897/-. IT I S MENTIONED IN THE IMPUGNED ORDER THAT IT IS CASE OF THE ASSESSING OFFICER THAT DEDUCTION UNDER SECTION 80IC OF THE ACT WAS NOT ELIGIBLE TO THE ASSESSEE AS NO RETU RN UNDER SECTION 139(1) OF THE ACT WAS FILED BY DUE DA TE I.E. 30.09.2008. NO STATUTORY AUDIT REPORT IN FORM NO. 10CCB WAS ALSO FILED. THE PLEA OF THE ASSESSEE THA T RETURN COULD NOT BE FILED BY THE DUE DATE WAS DUE T O NON-RECEIVING OF ALL THE SEIZED MATERIAL ON TIME. HOWEVER, THIS CONTENTION WAS REJECTED AS THE ASSESS EE HAD ONLY SOUGHT SEIZED MATERIAL IN RESPECT OF SPECI FIC ANNEXURES ONLY. A COPY OF THE LETTER REQUESTING FO R 3 SEIZED MATERIAL DATED 13.09.2008 HAS BEEN SCANNED I N THE IMPUGNED ORDER. IN THE COURSE OF APPEAL, IT HA S BEEN ARGUED BY THE ASSESSEE THAT AS THE PHOTO COPIE S OF THE SEIZED MATERIAL WERE MADE AVAILABLE ONLY BY 13.09.2008, THE RETURN OF INCOME COULD NOT BE FILED BY 30.09.2008 NOR COULD THE ACCOUNTS COULD BE AUDITED WITHIN THE STIPULATED PERIOD FOR REASONS BEYOND ITS CONTROL. 6. THE LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS AND THE IMPUGNED ORDER NOTED THAT DEDUCTION UNDER SECTION 80IC OF THE ACT HAS BEEN DE NIED BY THE ASSESSING OFFICER AS ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 80AC READ WITH SECTION 80IA(7 ) READ WITH SECTION 80IC(7) OF THE ACT. ON PLAIN REA DING OF THE PROVISIONS, IT IS CLEAR THAT RETURN FOR THE YEAR WAS REQUIRED TO BE FILED WITHIN THE DUE DATE AS ENVISAG ED UNDER SECTION 139(1) OF THE ACT AND THE FORM NO. 10 CCB WAS ALSO TO BE FILED ALONGWITH THE RETURN. THIS HA S NOT BEEN DONE BY THE ASSESSEE. SINCE DEDUCTION IS BEIN G CLAIMED BY THE ASSESSEE UNDER CHAPTER VI-A, IT WAS IMPERATIVE ON THE PART OF THE ASSESSEE TO HAVE FILE D ITS RETURN BY 30.09.2008. IN VIEW OF THE FACTS STATED BY THE ASSESSING OFFICER, ACTION OF THE ASSESSING OFFICER WAS CONFIRMED. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT DEDUCTION UNDER SECTION 80IC OF THE ACT 4 HAVE BEEN DISALLOWED ONLY ON THE REASON THAT RETURN OF INCOME WAS DUE TO BE FILED ON 30.09.2008 AND SINCE RETURN WAS FILED LATE, THEREFORE, DEDUCTION UNDER S ECTION 80IC CANNOT BE GIVEN BECAUSE IT HAS BEEN LAID DOWN IN SECTION 80AC THAT NO DEDUCTION SHALL BE ALLOWED UNL ESS THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR ON OR BEFORE THE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE INCOME TAX ACT. THE PL EA BEFORE THE ASSESSING OFFICER HAD BEEN THAT THERE WA S A SEARCH & SEIZURE OPERATION AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 15.07.2008 AND SINCE NO PHOTOSTAT COPIES HAVE BEEN SUPPLIED TO THE ASSESSEE DESPITE THE REPEATED REQUESTS MADE TO THE INVESTIGATION WING/A.O., CHANDIGARH AND THUS, THERE WAS A REASONABLE CAUSE FOR NOT FILING THE RETURN OF INCOME BY 30.09.2008 I.E. 2 MONTHS AFTER THE DATE OF THE SEARCH ON 15.07.2008. IT IS SUBMITTED THAT ASSESSEE HAS FURNISHED A CHART SHOWING THE SEQUENCE OF EVENTS FOR GETTING THE PHOTO COPIES AND THE FIRST APPLICATION WAS FILED ON 13.08.2008 AND THEREAFTER, NUMBER OF APPLICATIONS WERE FILED ON 14.08.2008, 15.4.2009, 31.08.2009, 15.03.2010, 26.08.2010, 02.09.2010 AND 06.09.2010. COMPLETE PHOTO COPIES WERE RECEIVED ON AROUND 15.09.2010. COPIES OF ALL THE LETTERS ARE FILED ALONGWITH THE CHART SHOWING THE SEQUENCE OF EVENTS FOR GETTING THE PHOTO COPIES. T HE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT TIME WAS REQUIRED FOR COMPILATION AND MATCHING OF ALL TH E 5 SEIZED DOCUMENTS AND AUDIT WAS TO BE DONE AND RETUR NS NUMBERING 165 WERE TO BE FILED IN THE GROUP AS A WH OLE AND AS SUCH, TIME WAS NEEDED AND THEN RETURN WAS FI LED ON 01.03.2011. 7(I) THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMI TTED THAT THIS ISSUE HAVE BEEN DISCUSSED AT LENGTH IN GR OUP CASE OF M/S SWAMI DEVI DAYAL HI TECH EDUCATION SOCIETY IN THE ORDER OF THE TRIBUNAL (ITA NOS. 1054 TO 1057/CHD/2013 & ORS ) DATED 07.11.2014, COPY OF WHICH IS FILED ON RECORD, WHEREIN THE TRIBUNAL HAD SET ASIDE THE CASES TO THE FILE OF ASSESSING OFFICER, S INCE COMPLETE PHOTO COPIES HAVE NOT BEEN RECEIVED AND ADDITIONAL EVIDENCE AS FILED BEFORE LD. CIT(APPEALS ) WERE REJECTED. THE RELEVANT FINDINGS OF THE TRIBUNAL AR E IN PARA 21 TO 22 OF THE ORDER DATED 07.11.2014 SHOWING THE SEQUENCE OF EVENTS IN THIS ORDER. THE SAME IS REPRODUCED AS UNDER : 21 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. BEFORE WE PROCEED TO ADJUDICATE THE TWO ISSUES REGA RDING NON PROVIDING OF OPPORTUNITY LEADING TO QUESTION OF ADM ISSION OF ADDITIONAL EVIDENCE, WE WOULD LIKE TO OBSERVE THAT IN THIS CASE THE CONDUCT OF THE REVENUE AS WELL AS THE ASSESSEE HAS NOT BEEN OUTSTANDING. IT SEEMS THAT THE ASSESSEE DID NO T WANT TO COOPERATE FULLY BUT AT THE SAME TIME THE REVENUE HA S ALSO TRIED TO LINGER ON THE MATER ON ONE PRETEXT OR THE OTHER. WE HAVE ALREADY NOTED IN THIS CASE THAT HEARING CONTINUED F ROM 23.12.2013 TO 16.9.2014 AND WE HAD RAISED VARIOUS Q UESTIONS TO THE REVENUE. IT SEEMS THAT THE LD. CIT-D.R COLLECT ED INFORMATION FROM ASSESSING OFFICER AND OTHER OFFICE RS AS DESIRED BY THE BENCH BUT VERY LITTLE INFORMATION WAS FORTHC OMING AND 6 VERY CRYPTIC REPLIES WERE GIVEN TO HER. THESE LETTE RS HAVE BEEN ENCLOSED ALONG WITH WRITTEN SUBMISSIONS. WE CA N ONLY APPRECIATE THE EFFORTS MADE BY THE LD. CIT-D.R, SMT .JYOTI KUMARI BUT THE CONDUCT OF THE OFFICERS OF CENTRAL C IRCLE LEAVES MUCH TO BE DESIRED. 22 IN THIS CASE SEARCH WAS CONDUCED ON 15.7.2008 AN D VARIOUS DOCUMENTS WERE FOUND AND SEIZED. EVEN THE HARD DISK OF ACCOUNTS WERE SEIZED. THE ASSESSEE MADE FI RST REQUEST ON 13.8.2008 FOR OBTAINING COPIES OF VARIOU S DOCUMENTS. THE CONTENTS OF LETTER DATED 13.8.2008 WHICH IS AVAILABLE AT PAGE 1 OF THE COMBINED PAPER BOOK ARE AS UNDER: THE ADDL DIRECTOR OF INVESTIGATION DATED: 13.8.2 008 INCOME TAX PANCHKULA SUB: RELEASE OF DOCUMENTS IMPOUNDED U/S 133A OF THE INCOME TAX ACT DURING SEARCH OPERATION ON OUR PREMISES ON 15.7 .2008 DEAR SIR, IT IS RESPECTFULLY SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATIONS CONDUCTED ON OUR PREMISES ON 15.7.2008, VARIOUS DOC UMENTS, FILES, BOOKS OF ACCOUNT, HARD DISK AND OTHER RELATED PAPER S WERE IMPOUNDED BY THE SEARCH TEAM FROM DIFFERENT PREMISES. WE HAVE TO FINALIZE OUR ACCOUNTS AND FILE OUR INCOME TAX RETURNS BY 30 TH SEPT 2008 AND ARE TO MAINTAIN FURTHER DAY TO DAY ACCOUNTS, WHICH IS N OT POSSIBLE WITHOUT THE RELEVANT RECORD. MOREOVER WE A RE TO GIVE STAT EMENT RELATING TO THE SEIZED DOCUMENTS WHICH CAN BE GIVEN ONLY AFTER SEEING THE DOCUMENTS. WE THEREFORE REQUEST YOU TO KINDLY PROVIDE US THE C OPIES OF BOOKS OF ACCOUNT AND OTHER RELATED RECORDS SEIZED DURING THE SEARCH OPERATION AT THE EARLIEST. KINDLY DO THE NEEDFUL. THANKING YOU, YOURS FAITHFULLY, SD/- (ROSHAN LAL JINDAL) THEREAFTER ANOTHER REQUEST WAS MADE ON 15.4.2009 FO R SUPPLY OF PHOTOCOPIES OF VARIOUS DOCUMENTS. NEXT R EQUEST WAS MADE ON 13.8.2009, 15.3.2010, 16.8.2010 AND 26.8.2010. WE HAVE SPECIFICALLY ASKED THE REVENUE TO SHOW WHICH DOCUMENTS WERE SUPPLIED AND WHICH DOCUMENTS W ERE STILL NOT SUPPLIED ON THE FIRST DATE. IT SEEMS THA T THE LD. CIT-D.R HAD SPECIFICALLY WRITTEN LETTERS TO THE CON CERNED OFFICERS FOR OBTAINING THIS INFORMATION AND IN THIS REGARD WE WOULD LIKE TO REPRODUCE FIRST LETTER WRITTEN BY DCI T, ITAT ON 13.5.2014 WHICH IS AS UNDER: 7 NO. CIT/ITAT/2014-15/80 DATED: 13.05.2014 TO, THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, CHANDIGARH SIR, SUB: ITA NOS. 1054 TO 1057/CHD/2013 IN THE CASE OF SWAMI DEVI DAYAL HIGHTECH EDUCATION ACADEMY A.YS. 2003-04 TO 2009-10- REGAR DING IN REFERENCE TO THE ABOVE CASE FIXED FOR HEARING BE FORE THE HONBLE ITAT, CHANDIGARH ON 13.05.2014 THE ASSESSEE HAS TAKEN UP PLEA THAT D URING THE ASSESSMENT PROCEEDINGS, DESPITE SEVERAL WRITTEN REQUESTS, HE WAS NOT PROVID ED THE PHOTOCOPIES OF SEIZED DOCUMENTS IN TIME SO AS TO EFFECTIVELY REPRESENT HIS CASE BEFORE THE ASSESSING OFFICER AND OTHER SUPERIOR AUTHORITIES. IN THIS REGARD, THE HONBLE BENCH HAS DESIRED A DATE WISE TABULATION CHART DEPICTING AS TO ON WHAT DATE SUCH REQUESTS WERE MAD E AND CONSEQUENTLY WHICH OF DOCUMENTS WERE SUPPLIED TO THE ASSESSEE (ALONGWITH DATE WISE PROOF OF SUCH RECEIPTS). SIMILAR DATA, IF ANY, PERTAINING TO THE DOCUMENTS R EQUESTED AND RECEIVED BY THE ASSESSEE FROM INVESTIGATION WING IS ALSO TO BE INCO RPORATED IN THE SAID TABLE. YOU ARE FURTHER REQUESTED TO SEND THE ASSESSMENT RECORDS IN ABOVE C ASE FOR A.Y. 2003-04 TO A.Y. 2009-10. THE NEXT DATE OF HEARING IN THE SAID APPEAL IS 16 TH & 17 TH JUNE, 2014. YOU ARE REQUESTED TO SENT YOUR COMMENTS / REPLY ON OR BEFOR E 31.05.2014. PLEASE TREAT IT AS MOST URGENT. YOURS FAITHFULLY, SD/- (AKHILESH GUPTA) DY. COMMISSIONER OF INCOME TAX, ITAT, CHANDIGARH TO THIS LETTER TWO REPLIES HAVE BEEN MADE BY THE DC IT WHICH ARE AS UNDER: GOVERNMENT OF INDIA INCOME TA DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-I, ROOM NO. 2, AAYAKAR BHAWAN, SECTOR 17-E, CHANDIGARH F.NO. DCIT/CC-I/CHD/2014-15/1122 DATED: 01/08/20 14 TO THE DY. COMMISSIONER OF INCOME TAX (ITAT), SECTOR-17 E, CHANDIGARH 8 SIR, SUB: ITA NOS. 1054 TO 1057/CHD./2013 IN THE CASE O F M/S. SWAMI DEVI DAYAL HI- TECH. EDUCATION ACADEMY ASST. YEARS 2003-04 TO 20 09-10- REGARDING- KINDLY REFER TO YOUR OFFICE LETTER F.NO. CIT/ITAT/ 2014-15/80 DATED 13.05.2014 ON THE SUBJECT CITED ABOVE. IN THIS REGARD, UPON PERUSAL OF ASSESSMENT RECORD, IT IS FOUND THAT THE ASSESSEE HAS ACKNOWLEDGED RECEIPT OF PHOTOCOPIES OF DOCUMENT S DURING THE MONTH OF JUNE AND JULY, 2009 VIDE ITS LETTER DATED 31.08.2009 RECEIVE D IN THIS OFFICE ON 01.09.2009. THE ASSESSEE FURTHER SUBMITTED THAT IT HAD NOT RECEIVED COMPLETE PHOTOCOPIES (COPY ENCLOSED). BUT NO FURTHER CORRESPONDENCE IS ON THE RECORD WITH RESPECT TO PROVIDING PHOTOCOPIES OF SEIZED DOCUMENTS. BUT UPON PERUSAL OF THE ASSESSMENT ORDERS, IT IS F OUND THAT A SCANNED LETTER WRITTEN BY SH. ROSHAN LAL JINDAL ADDRESSED TO THE A DIT(INV.)-III, CHANDIGARH IS PART OF ASSESSMENT ORDER ITSELF, IN WHICH HE HAS ACKNOWL EDGED THE RECEIPT OF SEIZED MATERIAL ON 13.09.2008 (COPY ENCLOSED). AS DESIRED, THE ASSESSMENT RECORDS IN THIS CASE AR E ENCLOSED HEREWITH AS GIVEN BELOW: SR. NO. NAME OF THE ASSESSEE A.Y. PAGES CONTAINED 1. M/S. SWAMI DEVIL DAYAL HI-TECH. EDUCATION ACADEMY, VILL. GOLPURA, THE, BARWALA, DISTT. PANCHKULA 2003-04 N-6 C-395 2. --DO-- 2004-05 N-6 C-484 3 --DO-- 2005-06 N-6 C-607 4 --DO-- 2006-07 N-7 C-409 5 --DO-- 2008-09 N-6 C-535 6 --DO-- 2009-10 N-5 C-433 FURTHER, THE INFORMATION PERTAINING TO CORRESPONDEN CE BETWEEN THE ASSESSEE AND THE INVESTIGATION WING, IF ANY, MAY BE SOUGHT DIRECTLY FROM THE INVESTIGATION WING. YOURS FAITHFULLY, SD/- (DR. RAMAN GARG) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- I , CHANDIGARH 9 ENCL: (AS ABOVE ASSTT. RECORD IN SIX VOL.) WE HAVE ALSO PERUSED THE ORDER SHEETS DURING ASSESS MENT PROCEEDINGS WHICH READS AS UNDER : 10 11 12 13 PERUSAL OF ABOVE SUBMISSIONS AND LETLTER OF DCIT CE NTRAL CIRCLE AND ORDER SHEETS DURING ASSESSMENT PROCEEDINGS SHOW THAT ORDER SHEET HAS BEEN DRAFTED ON COMPUTER WHICH ITSELF IS VERY UNUSUAL. NORMALLY ORDER SHEETS ARE WRITTEN IN THE PERSONAL H ANDWRITING OF THE ASSESSING OFFICER, WE WONDER WHETHER ORDER SHEE T HAS BEEN WRITTEN ON DATES MENTIONED IN THE ORDER SHEET OR TH EY HAVE BEEN GENERATED ON A PARTICULAR DATE. FURTHER PERUSAL OF THE ORDER SHEET WOULD SHOW THAT THERE IS NO REFERENCE TO RECEIPT OF LETTER FOR SUPPLY OF DOCUMENTS AND NO DETAILS ARE INCORPORATED WHETHER THE DOCUMENTS WERE REALLY SUPPLIED OR NOT? THEREFORE O NLY ASSUMPTION POSSIBLE IS THAT STATEMENT OF THE ASSESS EE ARE CORRECT AND COMPLETE DOCUMENTS HAVE NOT BEEN SUPPLIED TILL THE END OF AUGUST, 2010. THEREAFTER A SHOW CAUSE NOTICE FOR C ONDUCTING OF SPECIAL AUDIT WAS ISSUED ON 28.9.2010 WHICH THE ASS ESSEE OBJECTED VIDE LETTER DATED 11.10.2010. THE ASSESSI NG OFFICER REJECTED THE SAME AND APPROVAL OF THE COMMISSIONER FOR CONDUCTING OF SPECIAL AUDIT WAS SOUGHT ON 14.10.201 0. APPROVAL WAS GIVEN BY THE COMMISSIONER ON 11.11.2010. AUDIT WAS COMPLETED ON 13.5.2011 AND AUDIT REPORT WAS SUBMIT TED TO THE ASSESSING OFFICER ON 13.5.2011. RETURN OF INCOME H AS BEEN FILED ON 1.4.2011. THEREFORE ONCE THE DOCUMENTS WERE NOT PROVIDED TILL THE END OF AUGUST 2010 AND A PROPOSAL FOR SPECIAL A UDIT WAS INITIATED ONLY TOWARDS END OF 2010 THE ASSESSEE CAN NOT FILE RETURN UNLESS AND UNTIL COMPLETE DOCUMENTS ARE AVAILABLE. 14 8. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT LD. CIT(APPEALS) IN TWO CASES OF THE GROUP NAM ELY M/S SWAMI DEVI DAYAL HI TECH EDUCATION SOCIETY AND M/S MAHA PRABHU RAM MULAKH HI TECH EDUCATION SOCIETY WHEREIN THE ISSUE WAS THAT THE REGISTRATION UNDER SECTION 12A OF THE ACT WAS REFUSED BY THE ASSESSING OFFICER SINCE THE RETURN WAS NOT FILED IN TIME, AND THE LD. CIT(APPEALS) FOLLOWING THE ORDER OF M/S SWAMI DEVI DAYAL HI TECH EDUCATION SOCIETY DATED 07.11.2014 ALLOWED THE REGISTRATION UNDER SECTION 1 2A OF THE ACT SINCE THE DELAY IN GIVING PHOTO COPIES T O THE ASSESSEE WAS ON THE PART OF THE DEPARTMENT AND COPY OF THE ORDER IS PLACED ON RECORD. 9. THE DEPARTMENT PREFERRED APPEAL BEFORE ITAT CHANDIGARH BENCH AGAINST THESE ORDERS OF THE LD. CIT(APPEALS) AND THE TRIBUNAL CONFIRMED THE ORDER O F THE LD. CIT(APPEALS) BY DISMISSING DEPARTMENTAL APPEALS VIDE ORDER DATED 10.09.2015. COPY OF THE ORDER IS ALSO PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE , THEREFORE, SUBMITTED THAT DUE TO THE ABOVE REASON T HAT WHEN COMPLETE SEIZED DOCUMENTS WERE NOT SUPPLIED TO THE ASSESSEE BY THE DEPARTMENT, THERE WAS A REASONA BLE CAUSE IN FAVOUR OF THE ASSESSEE FOR FILING RETURN O F INCOME LATER ON, THEREFORE, DEDUCTION UNDER SECTION 80IC OF THE ACT COULD NOT BE REFUSED. THE LD. COUNSEL F OR THE ASSESSEE FURTHER SUBMITTED THAT SOME PHOTO COPIES W ERE GIVEN ON 13.09.2008 AS IS NOTED IN THE ORDER OF THE 15 ASSESSING OFFICER AS WELL AS LD. CIT(APPEALS) AND SUBMITTED THAT ONLY FEW URGENT COPIES WERE RECEIVED WHICH WERE REQUIRED FOR INSPECTION BY THE DENTAL COUNCIL OF INDIA AND IT HAS BEEN CONSIDERED BY THE TRIBUNAL. THE RETURN WAS FILED LATE SINCE COMPLETE PHOTO COPIES WERE NOT SUPPLIED TO THE ASSESSEE DESP ITE MAKING A REQUEST ON MANY DATES. THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS OF SECTION 80IC OF THE ACT. THE DEDUCTION IS CLAIMED BY ASSESSEE AS PER REPORT OF THE CHARTERED ACCOUNTANT. HE HAS SUBMITTED THAT PROVISIONS OF SECTION 80AC CANNOT BE CONSIDERED AS MANDATORY PROVISIONS. IF AN ATTEMPT IS MADE IN GOO D FAITH TO PERFORM THE STATUTORY REQUIREMENTS, EVEN I F IT DOES NOT PRECISELY MEET THE TERMS OF THE STATUTORY REQUIREMENTS, THE PERFORMANCE WILL STILL TO BE CONS IDERED COMPLETE IF THE ESSENTIAL PURPOSE IS ACCOMPLISHED. THE PRINCIPLE OF LIBERAL INTERPRETATION SHOULD BE ADOPT ED TO DECIDE WHETHER THE OPERATION OF SECTION 80AC IS MANDATORY OR DIRECTORY. 9(I) REFERENCE IS ALSO PLACED ON THE 4 TH PROVISO TO SECTION 10B OF THE ACT, WHEREIN SIMILAR RESTRICTION IS PROVIDED IN CLAIMING DEDUCTION UNDER SECTION 10B OF THE ACT. SECTION 10B OF THE ACT PROVIDES THAT DEDUCTIO N OF PROFIT AND GAINS AS ARE DERIVED BY 100% EXPORT ORIE NTED UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS O R COMPUTER SOFTWARE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR 16 RELEVANT TO PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE AS THE CASE MAY BE. THE 4 TH PROVISO INSERTED UNDER SECTION 10B PUTS A RIDER THAT NO DEDUCTION IN THIS SECTION SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN OF INCOME OF HIS INCOME ON OR BEFORE DUE DATE SPECIFIED UNDER SECTIO N 139(1) OF THE ACT. HE HAS SUBMITTED THAT THE WORDI NGS GIVEN IN SECTION 80AC AND IN THE 4 TH PROVISO TO SECTION 10B ARE SIMILAR AND THERE ARE DECISIONS IN THE CONT EXT OF 4 TH PROVISO TO SECTION 10B OF THE ACT THAT FILING OF R ETURN ON OR BEFORE THE DUE DATE SPECIFIED UNDER SECTION 1 39(1) IS DIRECTORY AND NOT MANDATORY. HE HAS RELIED UPON ORDER OF ITAT DELHI BENCH IN THE CASE OF ACIT VS DH EER GLOBAL INDUSTRIES PVT. LTD. 133 TTJ (DEL) 580. THE LD. COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON TH E FOLLOWING ORDERS WHEREIN THE CLAIM UNDER SECTION 80IB/IC HAVE BEEN ALLOWED EVEN IF THERE IS A DELAY IN FILING THE RETURN OF INCOME : I) UNITECH LTD. VS ACIT IN ITA 1014/DEL/2012 DATED 18.12.2013 IN WHICH IT WAS HELD THAT, WE ARE OF THE CONSIDERED VIEW THAT SECTION 80AC OF THE ACT WHICH PROHIBITS DEDUCTION UNDER SECTION 80IB OF THE ACT IF THE RETURN IS NOT FURNISHED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE ACT IS ONLY DIRECTORY AND NOT MANDATORY, PROVIDED THERE WAS REASONABLE CAUSE FOR FILING THE RETURN OF INCOME BELATEDLY. 17 II) ITO VS S.VENKATAIAH 52 SOT 437 (HYD) IN WHICH IT WAS HELD THAT, SINCE THERE WAS A SUFFICIENT CAUSE FOR DELAY IN FILING THE RETURN OF INCOME THEREFORE, CLAIM UNDER SECTION 80IC WAS ALLOWED. IT WAS ALSO HELD THAT CLAIM OF ASSESSEE UNDER SECTION 80IC CANNOT BE DENIED ON TECHNICALITIES WHEN THE ASSESSEE IS LEGALLY OTHERWISE ENTITLED FOR DEDUCTION. III) HANSA DALAKOTI VS ACIT 50 SOT 511 (DEL) IN WHICH IT WAS HELD, CLAIM OF ASSESSEE UNDER SECTION 80IC CANNOT BE DENIED SIMPLY FOR THE REASON THAT RETURN OF INCOME WAS NOT FILED WITHIN DUE DATE AS PRESCRIBED UNDER SECTION 139(1), WHERE THE ASSESSEE HAD SUBMITTED NECESSARY DOCUMENTS WITH DEPARTMENT BEFORE DUE DATE OF FILING OF THE RETURN AND DEFAULT OF THE ASSESSEE WAS ONLY TECHNICAL DEFAULT. 9(II) THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT IN THE LIGHT OF THE ABOVE PROVISIONS AND ORDERS, IT CAN BE HELD THAT SECTION 80AC IS DIRECTO RY AND NOT MANDATORY, THEREFORE, THE CLAIM OF THE DEPARTME NT WAS NOT JUSTIFIED IN DENYING ASSESSEE'S CLAIM FOR EXEMPTION UNDER SECTION 80IC OF INCOME TAX ACT. MOREOVER, IN THE CASE OF THE ASSESSEE, THERE WAS REASONABLE CAUSE WHICH IS BEYOND CONTROL OF ASSESSE E TO FILE THE RETURN OF INCOME WITHIN THE PERIOD OF LIMI TATION. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT SINCE ON MERIT, CLAIM OF THE ASSESSEE HAS NOT BEEN REJECTED, THEREFORE, FOR FAULT OF THE REVENUE IN SU PPLYING THE SEIZED DOCUMENTS BELATEDLY, DEDUCTION UNDER SEC TION 80IC SHOULD NOT BE REFUSED IN THE CASE OF THE ASSES SEE. 18 9(III) ON THE OTHER HAND, LD. DR RELIED UPON ORD ERS OF THE AUTHORITIES BELOW AND REFERRED TO LETTER DATED 13.09.2008 WHICH IS REPRODUCED IN THE ORDER OF THE ASSESSING OFFICER IN WHICH THE ASSESSEE MENTIONED T HAT ASSESSEE HAS INSPECTED ALL THE RECORDS AND TAKEN CO PIES OF THE EXTRACT REQUIRED BY IT ON 13.09.2008. THE L D. DR, THEREFORE, SUBMITTED THAT SINCE ASSESSEE INSPECTED THE RECORD, THEREFORE, NO FAULT COULD BE FOUND WITH THE REVENUE FOR SUPPLYING THE DOCUMENTS BELATEDLY. HE HAS SUBMITTED THAT ISSUE IN THE GROUP CASE OF SWAMI DEV I DAYAL HI TECH EDUCATION SOCIETY (SUPRA) IS ON ENTIR ELY DIFFERENT FACTS IN WHICH THERE IS NO CLAIM OF DEDUC TION UNDER SECTION 80IC OF THE ACT. THE LD. DR RELIED U PON ORDERS OF ITAT CHANDIGARH BENCH IN THE CASE OF LAXM I ENERGY & FOODS VS ACIT ITA 250 & 251/CHD/2013 DATED 26.02.2014 IN WHICH IT WAS HELD THAT, WHERE AN ASSESSEE WANTS TO AVAIL DEDUCTION UNDER SECTION 80I B, HE HAS TO NECESSARILY FURNISH HIS RETURN OF INCOME CON TAINING SUCH CLAIM BEFORE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE INCOME TAX ACT. 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS UNDISPUTED THAT SEARCH WAS CARRIED OUT ON 15.07.200 8. DUE DATE FOR FILING OF THE RETURN UNDER SECTION 139 (1) WAS 30.09.2008 IN THE CASE OF THE ASSESSEE. THE LD . COUNSEL FOR THE ASSESSEE REFERRED TO VARIOUS LETTER S WRITTEN TO THE ADDITIONAL DIRECTOR (INVESTIGATION) AS WELL AS TO THE ASSESSING OFFICER DEMANDING THE COPIES OF THE 19 SEIZED DOCUMENTS SO AS TO ENABLE THE ASSESSEE TO MA KE COMPLIANCE UNDER THE PROVISIONS OF THE LAW. THE LD . DR REFERRED TO THE LETTER OF THE ASSESSEE DATED 13.09. 2008 WHICH IS SCANNED IN THE ASSESSMENT ORDER. THE ASSE SSEE IN THIS LETTER HAS ACKNOWLEDGED RECEIPT OF COPIES O F SOME ANNEXURES WHICH WERE REQUIRED FOR THE PURPOSE OF INSPECTION OF DENTAL COLLEGE BY DENTAL COUNCIL OF I NDIA. THE ASSESSEE ALSO EXPLAINED THAT IT HAS INSPECTED A LL THE RECORDS AND TAKEN THE COPIES OF EXTRACTS REQUIRED O N 13.09.2008. THE LD. COUNSEL FOR THE ASSESSEE REFERR ED TO PB-2 WHICH IS LETTER DATED 14.08.2008 ADDRESSED TO ADIT (INVESTIGATION),PANCHKULA. THE ASSESSEE ASKED FOR COPIES OF EACH AND EVERY SEIZED DOCUMENT BUT FEW DOCUMENTS OF THE SEIZED DOCUMENTS OF ANNEXURE A-1 SEIZED FROM THE PREMISES OF SWAMI DEVI DAYAL HOSPIT AL & DENTAL COLLEGE WHICH WERE REQUIRED URGENTLY FOR T HE PURPOSE OF DCI INSPECTION SCHEDULED ON 18/19.08.200 8 AND COPIES OF THE SAME WERE ASKED FOR IMMEDIATELY F ROM THE INVESTIGATION WING. THE SAME PRECISE DETAILS A RE NOTED IN THE LETTER OF THE ASSESSEE DATED 13.09.200 8 ACKNOWLEDGING THE RECEIPT OF COPIES OF THESE ANNEXU RES WHICH WERE REQUIRED FOR INSPECTION OF DENTAL COLLEG E BY DENTAL COUNCIL OF INDIA. THE LD. COUNSEL FOR THE ASSESSEE WAS, THEREFORE, JUSTIFIED IN CONTENDING TH AT THE LETTER DATED 13.09.2008 SCANNED AND REPRODUCED IN T HE ASSESSMENT ORDER PERTAINED TO ONLY FEW DOCUMENTS RECEIVED BY ASSESSEE WHICH WERE REQUIRED URGENTLY F OR THE PURPOSE OF INSPECTION OF DENTAL COLLEGE BY DENT AL 20 COUNCIL OF INDIA. THIS LETTER HAS NOTHING TO DO WI TH THE REMAINING DOCUMENTS DEMANDED BY THE ASSESSEE FROM THE INVESTIGATION WING AS WELL AS FROM THE ASSESSIN G OFFICER. THE ASSESSEE, THEREAFTER, HAS BEEN CONTIN UOUSLY WRITING LETTERS TO THE INVESTIGATION WING AS WELL A S TO THE ASSESSING OFFICER FOR SUPPLY OF THE REMAINING C OPIES OF THE SEIZED DOCUMENTS AND ULTIMATELY AS PER EXPLANATION OF THE ASSESSEE, COMPLETE PHOTO COPIES WERE RECEIVED BY ASSESSEE AROUND 15.09.2010. 11. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS SEAR CHED WITH JINDAL GROUP OF CASES INCLUDING SWAMI DEVI DAY AL HI TECH EDUCATION ACADEMY AS WELL AS MAHA PRABHU RAM MULAKH HI TECH EDUCATION ACADEMY, PANCHKULA IN WHICH ALSO SEARCH WAS CONDUCTED. THE IDENTICAL ISS UE OF NON SUPPLY OF SEIZED DOCUMENTS TO SWAMI DEVI DAYAL HI TECH EDUCATION ACADEMY, PANCHKULA WAS CONSIDERED BY ITAT CHANDIGARH BENCH IN GROUP CASES OF ITA NOS. 1054/2013 ETC. VIDE ORDER DATED 07.11.2014 AND IN P ARA 21 TO 22, THE TRIBUNAL CONSIDERED THE ISSUE OF NON SUPPLY OF COPIES OF THE SEIZED DOCUMENTS TO THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER IS ALR EADY REPRODUCED ABOVE. IT CLEARLY PROVED THAT THE COMPL ETE COPIES OF THE SEIZED DOCUMENTS HAVE NOT BEEN SUPPLI ED TILL THE END OF AUGUST,2010. THEREFORE, IT WAS HEL D THAT ASSESSEE CANNOT FILE RETURN OF INCOME UNLESS AND UN TIL COMPLETE DOCUMENTS ARE AVAILABLE TO HIM. THE LD. CIT(APPEALS) IN THE CASES OF SWAMI DEVI DAYAL HI TE CH 21 EDUCATION ACADEMY AND M/S MAHA PRABHU RAM MULAKH HI TECH EDUCATION ACADEMY FOR ASSESSMENT YEAR 2010- 11 HELD THAT REGISTRATION UNDER SECTION 12A COULD N OT BE CANCELLED SINCE THERE WAS A REASONABLE CAUSE FOR DE LAY IN FILING THE RETURN OF INCOME BECAUSE OF NON SUPPL Y OF THE COPIES OF THE SEIZED DOCUMENTS. THE ORDERS OF LD. CIT(APPEALS) HAVE BEEN CONFIRMED BY THE TRIBUNAL VI DE ORDER DATED 10.09.2015 (SUPRA). IN THE BACKGROUND O F THESE FACTS AND MATERIAL ON RECORD, IT IS CLEAR THA T THE REVENUE DEPARTMENT DID NOT PROVIDE COPIES OF THE SE IZED DOCUMENTS COMPLETELY TO THE ASSESSEE TILL 15.09.201 0 THEREFORE, THERE WAS NO REASON FOR ASSESSEE TO FILE THE RETURN OF INCOME UNDER SECTION 139(1) WITHIN THE DU E DATE PROVIDED UNDER SECTION 139(1) OF THE ACT I.E. UPTO 30.09.2008.IT MAY ALSO BE NOTED HERE THAT SPECIAL A UDIT WAS ORDERED BY THE REVENUE DEPARTMENT IN NOVEMBER,2010 AND SPECIAL AUDIT WAS COMPLETED ON 13.05.2011 THEREFORE, THE ASSESSEE FILED THE RETURN OF INCOME WITHIN THE REASONABLE PERIOD ON 01.03.2011. IT IS, THEREFORE, CLEAR THAT RETURN COULD NOT BE FILED BY THE ASSESSEE WITHIN TIME BECAUSE COMPLETE PHOTO COPIES OF THE SEIZED DOCUMENTS WERE NOT SUPPLIED TO THE ASSES SEE. THERE IS NO DOUBT ABOUT THE FULFILLMENT OF THE COND ITIONS OF SECTION 80IC OF THE ACT IN THE MATTER. 11(I) THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO VARIOUS DECISIONS OF DIFFERENT BENCHES OF THE TRIBU NAL IN WHICH IT WAS HELD THAT, FILING OF RETURN OF INCOME ON OR 22 BEFORE THE DUE DATE PRESCRIBED UNDER SECTION 139(1) IS DIRECTORY AND NOT MANDATORY. IN THE CASE OF M/S UNITED LTD. VS ACIT (SUPRA), THE TRIBUNAL HAD TAKEN THE SAME VIEW. IN THE CASES OF S.VENKATAIAH AND HANSA DALAKOTI (SUPRA) IT WAS HELD THAT, CLAIM OF THE ASSESSEE UNDER SECTION 80IC CANNOT BE DENIED ON TECHNICALITI ES WHEN ASSESSEE IS LEGALLY OTHERWISE ENTITLED FOR DEDUCTION. THESE DECISIONS ARE DIRECTLY ON THE ISSUE OF DEDUCTION UNDER SECTION 80IC OF THE ACT. 12. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F VARIOUS ORDERS OF THE TRIBUNAL REFERRED TO ABOVE, I T IS PROVED FROM THE FACTS OF THE CASE THAT THERE WAS A VALID REASON FOR DELAY IN FILING OF RETURN OF INCOME AS T HE PHOTO COPIES OF THE SEIZED DOCUMENTS WERE NOT MADE AVAILABLE TO THE ASSESSEE AND ASSESSEE COULD NOT FI LE RETURN OF INCOME WITHOUT THE SAME. THE PROVISIONS OF SECTION 80AC OF THE ACT ARE NOT MANDATORY AND THAT THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON TECHNICAL ITIES WHEN ASSESSEE IS LEGALLY ENTITLED FOR DEDUCTION UND ER SECTION 80IC OF THE ACT. SINCE DELAY IN FILING THE RETURN OF INCOME IS NOT ATTRIBUTABLE TO THE ASSESSEE BECAU SE REVENUE DEPARTMENT DID NOT PROVIDE PHOTO COPIES OF THE SEIZED DOCUMENTS TO THE ASSESSEE ON TIME, THEREFORE , CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 8 0IC CANNOT BE DENIED BY THE AUTHORITIES BELOW ON THE RE ASON THAT RETURN COULD NOT BE FILED UNDER SECTION 139(1) OF THE ACT BY THE DUE DATE I.E. 30.09.2008. IN VIEW O F THE 23 ABOVE DISCUSSION, WE SET ASIDE THE ORDERS OF AUTHOR ITIES BELOW AND DIRECT THE AUTHORITIES BELOW TO GRANT DEDUCTION UNDER SECTION 80IC OF THE ACT TO THE ASSE SSEE. GROUND OF APPEAL NO. 3 OF APPEAL OF THE ASSESSEE IS ALLOWED. 13. ON GROUND NO. 4, ASSESSEE CHALLENGED ADDITION O F RS. 7,94,000/- ON ACCOUNT OF PAGE NO. 22 OF ANNEXUR E-5 SEIZED FROM THE BUSINESS PREMISES. THE ADDITION HAS BEEN DISCUSSED IN THE IMPUGNED ORDER. SEIZED DOCUM ENT PAGE 22 OF A-5 WAS FOUND TO BE FOR THE PERIOD AAPRIL,2002 TO JUNE,2007 COMPRISING OF CASH RECEIPT OF RS. 3,71,000/- AND PAYMENT OF RS. 10,18,000/-. THE ASSESSEE PRODUCED SUMMARY OF THE RECEIPT AND EXTRAC T OF CASH BOOK WHICH WAS FOUND INCORRECT AS THE FIGURES DID NOT MATCH WITH THE SEIZED PAPER. IN THE ABSENCE OF ANY FURTHER CLARIFICATION, THE AMOUNT OF RS. 7,94,000/- WAS ADDED UNDER SECTION 69C OF THE ACT WHICH IS A DIFFE RENCE BETWEEN THE RECEIPT AND THE PAYMENT. 13(I) IN APPEAL, ASSESSEE ARGUED THAT DOCUMENT IS A ROUGH MEMORANDUM ABOUT EXPENSES INCURRED OR TO BE INCURRED AGAINST CASH MAINTAINED BY THE MUNIM. THE ASSESSEE FURTHER ARGUED THAT THE RECEIPT SIDE CANNO T BE RECONCILED WITH THE REGULAR BOOKS AS BEING PART OF CASH IN HAND AS PER REGULAR BOOKS, WHEREAS THE PAYMENTS ARE DULY VERIFIABLE BEING WAGES, BANK DEPOSITS, PAYMENT OF TAXES ETC. TO CLAIM THAT THE RECEIPT SIDE COULD NOT REPRESENT UNACCOUNTED SALE. THE LD. CIT(APPEALS) F OUND 24 THAT ASSESSING OFFICER HAS HELD THAT RECEIPT AND PAYMENTS WERE IRRECONCILABLE. CLAIM OF THE ASSESSE E WAS FOUND WITHOUT ANY DOCUMENTARY EVIDENCE, ACCORDINGLY ADDITION WAS UPHELD. 14. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE VIEW THE ISSUE IS IDENTICAL AS HAVE BEEN DECIDED IN THE GROUP CASES OF M/S HEERA MOTI AGRO PRODUCTS VS DCIT IN ITA 757/2013 FOR ASSESSMENT YEAR 2008-09 IN WHICH T HE TRIBUNAL VIDE ORDER DATED 17.01.2017 DELETED THE SI MILAR ADDITION. THE FINDINGS OF THE TRIBUNAL IN PARAS 23 TO 25 OF THE ORDER ARE REPRODUCED AS UNDER : 23. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ADDITION OF RS. 4,60,000/- AS PER PAGE 22 OF ANNEXURE 5 OF SEIZED DOCUMENTS. IT IS NOTED IN THE IMPUGNED ORDER THAT CASH RECEIPT OF RS. 1,25,000/- FOR THE PERIOD APRIL,2007 TO JUNE,2007 WAS SEIZED WHICH IS MARKED AS A-5 PAGE 22. THE PAYMENT IS SHOWN AT RS. 5,85,000/-. THE ASSESSEE PRODUCED SUMMARY OF THE RECEIPT AND EXTRACT OF CASH BOOK WHICH WAS FOUND INCORRECT AS THE FIGURE DID NOT MATCH WITH THE SEIZED PAPER. IN THE ABSENCE OF ANY FURTHER CLARIFICATION, THE NEGATIVE CASH AMOUNT OF RS. 4,60,000/- WAS ADDED UNDER SECTION 69C OF THE ACT WHICH IS DIFFERENCE BETWEEN RECEIPT AND PAYMENT. I N APPEAL, ASSESSEE ARGUED THAT DOCUMENT IS A ROUGH MEMORANDUM ABOUT EXPENSES INCURRED OR TO BE INCURRED AGAINST CASH MAINTAINED BY MUNIM. THE ASSESSEE FURTHER ARGUED THAT RECEIPT SIDE CANNOT BE RECONCILED WITH THE REGULAR BOOKS AS BEING PART OF THE CASH IN HAND AS PER THE REGULAR BOOKS WHEREAS PAYMENTS ARE DULY VERIFIABLE BEING WAGES, BANK DEPOSITS, PAYMENT OF TAXES ETC. TO 25 CLAIM THAT RECEIPT SIDE SHOULD NOT REPRESENT UNACCOUNTED SALES. THE LD. CIT(APPEALS) FOUND THAT ASSESSING OFFICER HAS HELD THAT RECEIPT AND PAYMENTS WERE IRRECONCILABLE. THE ARGUMENT THAT PAYMENTS WERE OF CERTAIN AMOUNTS, WERE NEVER PUT FORTH TO THE ASSESSING OFFICER. MOREOVER, CLAIM IS WITHOUT DOCUMENTARY EVIDENCE. IN ANY CASE, EVEN IF PAID, THE SOURCE HAS TO BE EXPLAINED BY THE ASSESSEE. THIS GROUND WAS ACCORDINGLY, DISMISSED. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF THE SEIZED DOCUMENT AND SUBMITTED THAT IT IS A DUMB DOCUMENT AND DID NOT LEAD TO ANYWHERE. THERE IS NO EVIDENCE THAT THE FIGURES WERE IN LACS. IN THE ALTERNATE CONTENTION, HE HAS SUBMITTED THAT THOUGH THE ASSESSEE DID NOT PRESS GROUND NO. 5, BUT ON GROUND NO. 5 THE IDENTICAL SEIZED PAPER WAS FOUND, COPY OF WHICH IS PLACED ON RECORD IN WHICH THE AUTHORITIES BELOW HAVE APPLIED GP RATE CONSIDERING IT TO BE SALES OUTSIDE THE BOOKS OF ACCOUNT. THEREFORE, ADDITION MAY BE DELETED OR AT THE BEST, GP RATE MAY BE APPLIED. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW. 25. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE SEIZED PAPER SHOWS CASH RECEIPT 2007-08 AND AGAINST HAP [IT IS CONSIDERED TO BE THE NAME OF THE ASSESSEE M/S HEERA MOTI AGRO PRODUCT] IN THE RECEIPT COLUMN, THE FIGURE IS MENTIONED AS 1.25. IN CASH PAYMENT, IT IS 5.85 AND DIFFERENCE IS SHOWN -4.60. THE ASSESSEE CLAIMED THAT THIS DOCUMENT IS ROUGH MEMORANDUM ABOUT EXPENSES INCURRED OR TO BE INCURRED AGAINST CASH 26 MAINTAINED BY THE MUNIM. NO EVIDENCE HAS BEEN BROUGHT ON RECORD IF SAID FIGURES WERE IN LACS. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS GIRISH CHAUDHRY 163 TAXMAN 608 HELD, IN THE INSTANT CASE, THERE WERE NO MATERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS THE ASSESSING OFFICER REACHED THE CONCLUSION THAT FIGURE 48 WAS TO BE READ AS RS. 48 LACS. THE DOCUMENT RECOVERED DURING THE COURSE OF SEARCH IN THE INSTANT CASE WAS A DUMB DOCUMENT. THUS, TRIBUNAL RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME ON THE BASIS OF SEIZED MATERIAL. THE SAME FACTS ARE NOTED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER AS PER SEIZED DOCUMENT. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE ON RECORD AS TO HOW ASSESSING OFFICER CONCLUDED THAT THESE FIGURES ARE IN LACS, IT APPEARS THAT THE SEIZED PAPER IS DUMB DOCUMENT, THEREFORE, NO ADDITION SHOULD BE MADE OF THIS NATURE AGAINST THE ASSESSEE. WE, THEREFORE, FOLLOWING DECISION OF THE DELHI HIGH COURT IN THE CASE OF GIRISH CHAUDHRY (SUPRA) AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 15. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER H AS NOTED THE CONTENTS OF THE SEIZED DOCUMENTS WHICH IS RECEIPT AND PAYMENT AND THE TOTAL IS 2.24 AND 10 .18. THE ISSUE IS, THEREFORE, IDENTICAL AS HAVE BEEN DEC IDED IN THE GROUP CASE OF M/S HEERA MOTI AGRO PRODUCTS 27 (SUPRA). FOLLOWING THE ABOVE ORDER DATED 17.01.201 7, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DE LETE THE ENTIRE ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 16. ON GROUND NO. 5, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 4,40,487/- ON ACCOUNT OF PROVISIONS OF SECTI ON 40(A)(IA) OF INCOME TAX ACT. THE LD. CIT(APPEALS) NOTED THAT THE ISSUE IS COVERED BY HIS ORDER FOR ASSESSME NT YEAR 2003-04. IN ASSESSMENT YEAR 2003-04, SINCE TD S WAS NOT DEDUCTED ON CERTAIN EXPENSES CHARGED TO PRO FIT & LOSS ACCOUNT UNDER THE HEAD COMMISSION, ADVERTISEMENT, GRINDING CHARGES ETC., SAME WAS ADDE D BACK TO THE TAXABLE INCOME OF THE ASSESSEE UNDER SE CTION 40(A)(IA) ON ACCOUNT OF. 16(I) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THIS ISSUE DEALS WITH THE PROVISIONS OF SECTION 40( A)(IA) ON ACCOUNT, SINCE NO DEDUCTION OF TDS HAS BEEN GIVE N ON ACCOUNT OF BRAND CHARGES PAID TO M/S HEERA MOTI SPICES PVT. LTD. AND THESE CHARGES HAVE BEEN DISCLO SED AS INCOME IN THE REGULAR RETURN OF INCOME BY M/S HE ERA MOTI SPICES PVT. LTD. FOR WHICH NECESSARY EVIDENCES HAVE BEEN FILED IN PB-2 AT PAGES 54-59 OF THE PAPER BOOK TO SHOW THAT BRAND CHARGES HAVE BEEN INCLUDED IN THEIR INCOME ON WHICH TAX HAVE BEEN PAID. THE LD. COUNSE L FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THIS IS SUE IS 28 SAME AS HAVE BEEN CONSIDERED IN GROUP CASE OF M/S HEERA MOTI AGRO INDUSTRIES VS DCIT IN ITA 739/CHD/2013 FOR ASSESSMENT YEAR 2007-08 (ASSESSEE' S OWN CASE) IN WHICH THE TRIBUNAL VIDE ORDER DATED 20.09.2016 RESTORED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. THE FIND INGS OF THE TRIBUNAL IN PARA 11 TO 14 READS AS UNDER : 11. ON GROUND NO. 7, ASSESSEE CHALLENGED THE ADDITION OF RS. 4,62,173/- ON ACCOUNT OF PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. THE LD . CIT(APPEALS) ALSO NOTED THAT THIS ISSUE IS COVERED BY HIS FINDINGS GIVEN FOR ASSESSMENT YEAR 2003- 04. THE ASSESSING OFFICER NOTED THAT SPECIAL AUDITOR HAS OBSERVED THAT ASSESSEE MADE SOME PAYMENTS ON ACCOUNT OF BRAND CHARGES ON WHICH ASSESSEE COMPANY WAS LIABLE TO DEDUCT TDS AS PER PROVISIONS OF INCOME TAX ACT AND SINCE NO TDS HAS BEEN DEDUCTED, THEREFORE, ACCORDING TO PROVISIONS OF SECTION 40(A)(IA), ADDITION WAS MADE. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION. 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BRAND CHARGES WERE PAID TO SISTER CONCERN M/S MEERA MOTI SPICES PVT. LTD. WHO HAVE DECLARED THE AMOUNT IN QUESTION IN THEIR RETURN OF INCOME AND PAID THE TAXES. THEREFORE, WHEN BY FILING INCOME TAX RETURNS AND OFFERING SUM RECEIVED FOR TAXATION, DISALLOWANCE WOULD NOT BE JUSTIFIED AND MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR RE-EXAMINATION IN VIEW OF DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP P. LTD. REPORTED IN 377 ITR 635, IN WHICH IT WAS HELD AS UNDER : 29 SECTION 40(A)(IA) OF THE INCOME TAX ACT,1961 IS AI MED AT ENSURING THAT AN EXPENDITURE SHOULD NOT BE ALLOWED AS DEDUCTION IN THE HANDS OF AN ASSESSEE IN A SITUATIO N IN WHICH INCOME EMBEDDED IN SUCH EXPENDITURE HAS REMAINED UN TAXED DUE TO TAX WITHHOLDING LAPSES BY THE ASSESSEE. IT I S NOT A PENALTY FOR TAX WITHHOLDING LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RESTRICTION FOR AN INCOME GO ING UNTAXED DUE TO TAX WITHHOLDING LAPSE. THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM APRI L 1, 2005, BEING THE DATE FROM WHICH SUB-CLAUSE (IA) OF SECTIO N 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. THE FIRS T PROVISO TO SECTION 201(1) OF THE ACT HAS BEEN INSERTED TO BENE FIT THE ASSESSEE. IT ALSO STATES THAT WHERE A PERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAID TO A RESIDENT OR ON THE S UM CREDITED TO THE ACCOUNT OF A RESIDENT, SUCH PERSON SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME UNDER S ECTION 139. WHAT IS COMMON TO BOTH PROVISOS TO SECTIONS 40(A)(I A) AND 201(1) OF THE ACT IS THAT AS LONG AS THE PAYEE OR R ESIDENT HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT R ECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AN D HAS ALSO PAID TAX ON SUCH INCOME, THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAULT. HELD, DISMISSING THE APPEAL, THAT THE PAYEES HAD FI LED RETURNS AND OFFERED THE SUMS RECEIVED TO TAX. NO DISALLOWAN CE COULD BE MADE UNDER SE 40(A)(IA). 12(I). THE LD. DR ALSO STATED THAT MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR VERIFICATION OF THE FACTS. 13. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW MATTER REQUIRES RE- CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER . THE ASSESSING OFFICER SHALL VERIFY THE FACT OF 30 PAYMENT OF TAXES ON FILING THEIR RETURN OF INCOME I N THE LIGHT OF DECISION OF THE DELHI HIGH COURT I N THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP P. LTD. SUPRA). THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. IN THE RESULT, GROUND NO. 7 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS O F AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF ASSESSING OFFICER. THE ASSESSING OFFICER SHALL VER IFY THE FACT OF PAYMENT OF TAX ON FILING OF RETURN OF INCOM E IN THE LIGHT OF ORDER IN THE CASE OF M/S HEERA MOTI AG RO INDUSTRIES (SUPRA). THE ASSESSING OFFICER SHALL GI VEN REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 18. IN THE RESULT, THIS GROUND OF APPEAL OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 741/CHD/2013 (M/S HEERA MOTI AGRO INDUSTRIES ) ( A.Y. 2009-10 ) 20. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 18.03.2013 FOR ASSESSMENT YEAR 2009-10. 31 21. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1, 2, 5, 8 & 9 OF THE APPEAL. THESE GR OUNDS ARE DISMISSED AS WITHDRAWN. ON GROUND NO. 3 ASSESS EE CHALLENGED DISALLOWANCE OF DEDUCTION UNDER SECTION 80IC OF THE ACT TO THE TUNE OF RS. 7,61,557/-. THIS GRO UND IS SAME AS HAVE BEEN DECIDED IN ITA 740/2013 FOR ASSESSMENT YEAR 2008-09 IN THE CASE OF THE ASSESSEE . FOLLOWING THE ORDER IN THE CASE OF ASSESSEE IN ASSESSMENT YEAR 2008-09 (SUPRA) WE SET ASIDE THE OR DERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFIC ER TO GRANT DEDUCTION UNDER SECTION 80IC OF THE ACT TO TH E ASSESSEE. GROUND NO. 3 OF APPEAL OF THE ASSESSEE I S ACCORDINGLY ALLOWED. 22. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN CONFIRMING THE ADDITION OF RS. 5,82,821/- ON ACCOUNT OF PROVISIONS OF SECTION 40(A )(IA) OF THE ACT. THIS ISSUE IS SAME AS HAVE BEEN DECIDE D IN THE CASE OF THE SAME ASSESSEE IN ASSESSMENT YEAR 2008-09 ON GROUND NO. 5 (SUPRA). FOLLOWING THE REA SON FOR THE SAME, WE SET ASIDE THE ORDERS OF AUTHORITIE S BELOW AND RESTORE THIS ISSUE TO THE FILE OF ASSESSI NG OFFICER WITH DIRECTION TO RE-DECIDE THIS GROUND AS IS DIRECTED IN ASSESSMENT YEAR 2008-09. THIS GROUND I S ALLOWED FOR STATISTICAL PURPOSES. 23. ON GROUND NOS. 6 AND 7, ASSESSEE CHALLENGED ADDITION OF RS. 36,38,694/- IN RESPECT OF SUNDRY CREDITORS WHICH WERE TRADE CREDITORS AS PER REGULAR 32 BOOKS OF ACCOUNT OF THE ASSESSEE. IT IS NOTED IN T HE IMPUGNED ORDER THAT ISSUE IS COVERED BY A.Y. 2003-0 4 AND FURTHER NOTED THAT THE ADDITION ON ACCOUNT OF SUNDRY CREDITORS AMOUNTING TO RS. 55,05,290/- WAS MADE IN ASSESSMENT YEAR 2003-04 AS THE ASSESSEE DID NOT FILE CONFIRMATIONS. IT HAS BEEN SUBMITTED BY T HE ASSESSEE THAT SUNDRY CREDITORS AS PER BALANCE SHEET DATED 31.03.2003 WAS TO THE TUNE OF RS. 55,05,290/- . IT WAS FURTHER EXPLAINED THAT ASSESSEE WHO IS ENGAGED IN MANUFACTURING AND TRADING WOULD HAVE SUNDRY CREDITO RS, DEBTORS IN NORMAL COURSE OF BUSINESS. REGARDING NO N FILING OF CONFIRMATIONS BEFORE THE ASSESSING OFFICE R, IT WAS PLEADED THAT THE TIME AVAILABLE WAS VERY SHORT FOR COMPLIANCE. IT WAS ARGUED THAT A LEDGER ACCOUNT WH ICH WAS ALREADY IN POSSESSION OF THE DEPARTMENT, REVEAL ED THE RECEIPT OF MATERIALS FROM SUPPLIERS DULY ACKNOWLEDGED BY PURCHASE BILLS AND PAYMENT ON THE DEBIT SIDE WHICH WAS EVIDENCED FROM THE BANK STATEMENT. THESE ARE RUNNING ACCOUNTS IN LEDGER. DURING THE APPEAL PROCEEDINGS, YEARWISE LIST OF SUN DRY CREDITORS FOR FINANCIAL YEAR 2002-03 TO 2008-09 INDICATING AMOUNT OUTSTANDING AT THE END OF EACH YE AR WAS FILED IN THE PAPER BOOK. HOWEVER, ONLY SOME CONFIRMATIONS WERE FILED AS IT WAS CONTENDED THAT P ERIOD UNDER CONSIDERATION IS AS OLD AS 3 TO 10 YEARS, SO OBTAINING CONFIRMATION WAS DIFFICULT. IT WAS ALSO CONTENDED THAT THESE ARE RUNNING BALANCES WHICH HAD ALSO BEEN CLEARED UP IN SUBSEQUENT YEARS. THE 33 ASSESSING OFFICER CONSEQUENT TO ASSESSMENT YEAR 200 3- 04 HAD ADDED ONLY FRESH ADDITIONS IN ASSESSMENT YEA R UNDER APPEAL FOR NON FURNISHING OF CONFIRMATIONS/BI LLS. 24. THE LD. CIT(APPEALS) AFTER CONSIDERING SUBMISSI ONS OF THE ASSESSEE AND MATERIAL ON RECORD NOTED THAT S OME OF THE CONFIRMATIONS FURNISHED NOW HAVE BEEN SOUGHT FOR ADMISSION AS ADDITIONAL EVIDENCES ON GROUND OF NON- PROVIDING OF REASONABLE OPPORTUNITY. THE LD. CIT(APPEALS) FOUND THAT ASSESSING OFFICER WHILE DISPOSING OF APPEAL FOR ASSESSMENT YEAR 2009-10 UND ER APPEAL HAD ACCEPTED THE CONFIRMATIONS FILED IN RESP ECT OF 6 FRESH CREDITORS AND IN THOSE CASES NOT FILED, SAM E HAD BEEN ADDED BACK. IN RESPECT OF ANOTHER SIX CREDITO RS, ASSESSING OFFICER FOUND THAT NO PAN NUMBER HAS BEEN PROVIDED AND CONSEQUENTLY REJECTED THE CONFIRMATION . REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE HAS BE EN REJECTED. THE LD. CIT(APPEALS) FOUND THAT ENTIRE A MOUNT OF SUNDRY CREDITOR AS ON 31.03.2003 PERTAINING TO ASSESSMENT YEAR 2003-04 OF RS. 55,05,290/- HAD BEEN ADDED BACK. TO HIS MIND, IT IS NOT TENABLE. TRADI NG RESULTS FOR ASSESSMENT YEAR 2003-04 HAVE OTHERWISE BEEN ACCEPTED BY THE ASSESSING OFFICER. SO IT DEFIS E LOGIC TO ADD ENTIRE AMOUNT IN THIS ACCOUNT. THESE ARE RUN NING ACCOUNTS. THE LD. CIT(APPEALS), THEREFORE, HELD TH AT HE IS UNABLE TO CONFIRM THESE ADDITIONS IN ASSESSMENT YEAR 2003-04 AND ACCORDINGLY ENTIRE ADDITION FOR ASSESSM ENT YEAR 2003-04 WAS DELETED AND APPEAL OF THE ASSESSEE 34 WAS ALLOWED. HOWEVER, FOR SUBSEQUENT YEARS INCLUDI NG ASSESSMENT YEAR 2009-10. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION IN RESPECT OF FRESH CREDITOR S. 25. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS IDENTICAL AS HAVE BEEN CONSIDERED BY I TAT CHANDIGARH IN GROUP CASE OF M/S HEERA MOTI AGRO INDUSTRIES VS DCIT (ASSESSEE) IN ITA 739/2013 FOR ASSESSMENT YEAR 2007-08 IN WHICH THE TRIBUNAL VIDE ORDER DATED 20.09.2016 SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF ASSESSING OFFICER. FINDINGS OF TRIBUNAL IN PARAS 5 TO 10 OF THIS ORDER ARE REPRODUCED AS UNDER : 5. ON GROUND NOS. 3 TO 6, ASSESSEE CHALLENGED THE ADDITION OF RS. 5,92,647/- IN RESPECT OF SUNDRY CREDITORS/TRADE CREDITORS. IN THIS CASE SEARCH & S EIZURE OPERATION WAS CARRIED OUT AND ASSESSMENT UNDER SECTION 153A/143(3) OF THE ACT WAS FRAMED. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE CONFIRMATIONS FROM THE SUNDRY CREDITORS AND TO FURN ISH CONFIRMED LEDGER ACCOUNTS. THE ASSESSING OFFICER N OTED THAT ASSESSEE HAS INTRODUCED FRESH CREDITORS AMOUNT ING TO RS. 5,92,647/- DURING THE YEAR. IN THE ABSENCE OF CONFIRMATION AND COPY OF THE LEDGER ACCOUNT, ADDITI ON WAS ACCORDINGLY MADE. THE LD. CIT(APPEALS) DECIDED SEVERAL APPEALS OF THE ASSESSEE THROUGH COMMON ORDE R AND NOTED IN THE IMPUGNED ORDER THAT THIS GROUND IS COVERED IN ASSESSMENT YEAR 2003-04. IT IS, THEREFOR E, NECESSARY TO TAKE INTO CONSIDERATION THE FINDINGS O F LD. CIT(APPEALS) IN ASSESSMENT YEAR 2003-04. THE LD. CIT(APPEALS) NOTED THAT ADDITION ON ACCOUNT OF SUND RY CREDITORS AMOUNTING TO RS. 55,05,290/- WAS MADE IN 35 ASSESSMENT YEAR 2003-04. THE ASSESSEE DID NOT FILE CONFIRMATIONS. IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT SUNDRY CREDITORS AS PER BALANCE SHEET DATED 31.03.2003 WAS TO THE TUNE OF RS. 55,05,290/- 5(I) IT WAS FURTHER EXPLAINED THAT THE ASSESSEE WH O IS ENGAGED IN MANUFACTURING AND TRADING, WOULD HAVE SUNDRY CREDITORS, DEPOSITORS IN NORMAL COURSE OF BUSINESS. REGARDING NON FILING OF THE CONFIRMATION BEFORE ASSESSING OFFICER, IT WAS PLEADED THAT TIME AVAILABLE WAS VERY SHORT FOR COMPLIANCE. IT WAS ARGUED THAT LEDGER ACCOUNT WAS ALREADY IN POSSESSION OF THE DEPARTMENT, CLEARLY REVEALED THE RECEIPT OF MATERIAL FROM THE SUPPLIERS DULY ACKNOWLEDGED BY THE PURCHASE BILLS AND PAYMENTS ON THE DEBIT SIDE WHICH WAS EVIDENCED FROM THE BANK STATEMENTS. THESE ARE RUNNING ACCOUNTS IN THE LEDGER. DURING APPEAL PROCEEDINGS, YEAR-WISE LIST OF SUNDRY CREDITORS FOR FINANCIAL YEARS 2002-03 TO 200 8- 09 INDICATING THE AMOUNT OUTSTANDING AT THE END OF EACH YEAR WAS FILED IN THE PAPER BOOK. HOWEVER, ONLY SOME CONFIRMATIONS WERE FILED AS IT WAS CONTENDED THAT PERIOD UNDER CONSIDERATION IS AS OLD AS 3-10 YEARS, SO OBTAINING CONFIRMATIONS WAS DIFFICULT. IT WAS ALSO CONTENDED THAT THESE ARE RUNNING BALANCES WHICH HAVE BEEN SQUARED UP IN SUBSEQUENT ASSESSMENT YEARS. THE LD. CIT(APPEALS) ALSO NOTED THAT IN ASSESSMENT YEAR UNDER APPEAL I.E . 2007-08, THE ASSESSING OFFICER MADE ADDITION OF FRESH SUNDRY CREDITORS FOR NON FURNISHING OF CONFIRMATIONS/BILLS. 6. THE LD. CIT(APPEALS) IN HIS FINDINGS OBSERVED THAT SOME OF THE CONFIRMATIONS FURNISHED NOW HAVE BEEN SOUGHT FOR ADMISSION AS ADDITIONAL EVIDENCE ON THE GROUND OF NON PROVIDING OF REASONABLE OPPORTUNITY. THE LD. CIT(APPEALS) FOUND THAT 36 ASSESSING OFFICER WHILE DISPOSING OFF APPEAL FOR ASSESSMENT YEAR 2009-10 HAD ACCEPTED THE CONFIRMATIONS FILED IN RESPECT OF SIX FRESH CREDITO RS AND IN RESPECT OF THOSE CASES NOT FILED, THE SAME HAVE BEEN ADDED BACK. IN RESPECT OF ANOTHER SIX CREDITORS, ASSESSING OFFICER FOUND THAT NO PAN NUMBER WAS PROVIDED AND CONSEQUENTLY REJECTED THE CONFIRMATIONS. THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE WAS REJECTED SEPARATELY. 7. THE LD. CIT(APPEALS) FOUND THAT ENTIRE AMOUNT OF SUNDRY CREDITORS OUTSTANDING AS ON 31.03.2003 PERTAINING TO ASSESSMENT YEAR 2003-04 OF RS. 55,05,290/- HAD BEEN ADDED BACK. THE LD. CIT(APPEALS) NOTED THAT TO HIS MIND, SUCH ADDITION IS NOT TENABLE. TRADING RESULT FOR ASSESSMENT YEAR 2003-04 HAS, OTHERWISE BEEN ACCEPTED BY ASSESSING OFFICER SO IT DEFINES LOGIC TO ADD BACK THE ENTIRE BALANCE IN THE ACCOUNT. IT WAS ALSO NOTED THAT MAN Y OF THE PARTIES ARE HAVING RUNNING ACCOUNT FROM PRIO R TO 01.04.2002, THEREFORE, LD. CIT(APPEALS) WAS UNABLE TO CONFIRM THE ADDITION FOR ASSESSMENT YEAR 2003-04 AS BY DOING SO, THE ENTIRE TRADING RESULTS OF THE ASSESSEE WOULD BE ABNORMAL. THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 WAS ACCORDINGLY ALLOWED. 7(I) THE LD. CIT(APPEALS), AS REGARDS ASSESSMENT YEAR UNDER APPEAL 2007-08 HELD THAT FRESH CREDIT ADDITIONS ARE IN ORDER AND ACCORDINGLY, SAME WAS CONFIRMED. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT ALL ARE TRADE CREDITORS AS PER REGULAR BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE 37 AND HAVE BEEN AUDITED. NO EVIDENCE OF PURCHASE OR SALES OUTSIDE THE BOOKS OF ACCOUNT HAS BEEN FOUND. THE PURCHASES ARE DULY RECORDED IN THE BOOKS OF ACCOUNT WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT. CHART IS FILED IN THE PAPER BOOK TO SH OW BALANCES YEAR AFTER YEAR DUE TO THE PARTIES. NO EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH THAT SUCH BALANCES WERE NOT DUE OR ANY PURCHASES IN RESPECT OF SUCH PARTIES WERE BOGUS. THE BOOKS OF ACCOUNT HAD BEEN SEIZED DURING THE COURSE OF SEARCH AND ALL THE ACCOUNTS WERE WITH THE DEPARTMENT INCLUDING LEDGER ACCOUNT. THEREFORE, THERE IS NO QUESTION OF NON PRODUCTION OF THE RECORD. THE ASSESSING OFFICER DID NOT GIVE ANY OPPORTUNITY TO T HE ASSESSEE TO PRODUCE THE MATERIAL BEFORE HIM. 8(I) THE ASSESSING OFFICER IN ASSESSMENT YEAR 2009 - 10 ACCEPTED THE CLAIM OF ASSESSEE. ALL ARE RUNNING ACCOUNTS AND PURCHASES FROM THE PARTIES HAVE BEEN ACCEPTED AND OUTSTANDING AMOUNTS HAVE BEEN PAID IN SUBSEQUENT YEAR. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE CHART OF SUNDRY TRADE CREDITORS FRO M 31.03.2003 TO 31.03.2009 IN THE PAPER BOOK WHICH IS FILED AT PAGE 4 TO 7 OF THE PAPER BOOK. HE HAS SUBMITTED THAT IN ASSESSMENT YEAR 2007-08, THE ASSESSEE HAS RUNNING ACCOUNTS OF THE TRADE CREDITOR S AND PAID THE BALANCE AMOUNT IN SUBSEQUENT YEAR. HE HAS, THEREFORE, SUBMITTED THAT ON THE SAME REASONING AS ADOPTED BY LD. CIT(APPEALS) FOR ASSESSMENT YEAR 2003-04, THE ENTIRE ADDITION SHOULD HAVE BEEN DELETED. IT IS ALSO STATED THAT THE DEPARTMENTAL APPEAL FOR ASSESSMENT YEAR 2003-04 HAVE BEEN DISMISSED BY THE TRIBUNAL IN GROUP CASES. 8(II) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON DECISION OF T HE MADHYA PRADESH HIGH COURT IN THE CASE OF V.I.S.P. ( P) 38 LTD. VS CIT 265 ITR 202 IN WHICH IT WAS HELD THAT I F LIABILITY SHOWN IN THE ACCOUNT IS FOUND BOGUS, THEN AMOUNT CAN BE ADDED TOWARDS THE INCOME OF THE ASSESSEE. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS A CASE OF SEARCH AND IT IS NOT INDICATED IF ANY MATER IAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE TO PROVE THAT ASSESSEE HAD BOGUS LIABILITY SHOWN IN THE BOOKS OF ACCOUNT ON ACCOUNT OF PURCHASE OF MATERIAL. THE BOOKS OF ACCOUNT INCLUDI NG THE LEDGER ACCOUNT WERE ALREADY IN POSSESSION OF TH E DEPARTMENT AND ACCORDING TO THE ASSESSEE, ALL THE MATERIALS PURCHASED HAVE BEEN SUPPORTED BY PURCHASE BILLS AND PAYMENTS ARE EVIDENCED BY BANK STATEMENTS. THE ASSESSING OFFICER HAS NOWHERE MENTIONED IN THE ASSESSMENT ORDER AS TO HOW MANY PARTIES WEE HAVING TRADE BALANCES FOR WHICH ADDITIO N HAS BEEN MADE AND EVEN NO SPECIFIC AMOUNT OF EACH PARTY HAS BEEN MENTIONED. THEREFORE, NO SPECIFIC FINDING OF FACT HAVE BEEN GIVEN AGAINST THE ASSESSE E FOR MAKING THE ADDITION. THE LD. CIT(APPEALS) HELD IN THE IMPUGNED ORDER THAT THE ISSUE IN ASSESSMENT YEAR UNDER APPEAL I.E. 2007-08 IS COVERED BY HIS ORDER FOR ASSESSMENT YEAR 2003-04. THE FACTS ARE IDENTICAL AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2003-04. THE LD. CIT(APPEALS) IN ASSESSMENT YEAR 2003-04 DELETED THE ENTIRE ADDITION BECAUSE ENTIRE SUNDRY CREDITORS OUTSTANDING ON END OF THE FINANCIAL YEAR CANNOT BE ADDED. THE LD. CIT(APPEAL S) NOTED THAT THE TRADING RESULTS FOR ASSESSMENT YEAR 2003-04 HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER THEREFORE, THERE IS NO LOGIC TO MAKE ADDITION OF TH E ENTIRE BALANCE IN THIS ACCOUNT. 9(I) THE LD. CIT(APPEALS) ALSO NOTED THAT MANY OF THE PARTIES ARE HAVING RUNNING ACCOUNTS FROM PRIOR TO 39 01.04.2002. THE LD. CIT(APPEALS) ALSO HELD THAT IF ADDITION OF THIS NATURE IS CONFIRMED, THE TRADING RESULTS OF THE ASSESSEE WOULD BE ABNORMAL. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF ARGUMENTS SUBMITTED THAT THE DEPARTMENTAL APPEAL FOR ASSESSMENT YEAR 2003-04 HAD BEEN DISMISSED BY THE TRIBUNAL IN GROUP CASES. WHEN ACCORDING TO THE LD. CIT(APPEALS), THE ISSUE IS COVERED BY HIS ORDER FOR ASSESSMENT YEAR 2003-04, THERE SHOULD NOT BE ANY REASON TO CONFIRM THE ADDITION AGAINST THE ASSESSEE IN ASSESSMENT YEAR UNDER APPEAL, BECAUSE THE FACTS ARE IDENTICAL. THE ASSESSEE PLEADED THAT PURCHASES HAVE BEEN MADE FROM VARIOUS PARTIES AND ASSESSEE HAS RUNNING ACCOUNTS WITH THEM. ALL ENTRIES ARE SHOWN IN THE BOOKS OF ACCOUNT WHICH HAVE BEEN SEIZED BY THE DEPARTMENT. THE ASSESSEE HAS PRODUCED THE CHART IN THE PAPER BOOK FROM ASSESSMENT YEAR 2002-03 TO 2008-09 TO SHOW THAT THESE ARE RUNNING ACCOUNTS WITH VARIOUS PARTIES SINCE LONG. ACCORDING TO LD. COUNSEL FOR THE ASSES SEE, EVEN IN SOME OF THE CASES OF THE GROUP, WHO WERE TRADE CREDITORS IN ASSESSMENT YEAR UNDER APPEAL, AR E ASSESSED BY THE SAME ASSESSING OFFICER, THEREFORE, FACTS SHOULD HAVE BEEN VERIFIED FROM THEIR RECORD AVAILABLE WITH THE REVENUE DEPARTMENT. IN ASSESSMENT YEAR UNDER APPEAL ALSO, TRADING RESULTS HAVE BEEN ACCEPTED BY ASSESSING OFFICER, THEREFORE, FOR BALANCE TRADING AMOUNT, THE LD. CIT(APPEALS) SHOULD NOT HAVE CONFIRMED THE ADDITION. THE PARTIE S HAVE RUNNING ACCOUNTS WITH THE ASSESSEE AND IF SIMILAR ADDITION IS MADE, IT WOULD GIVE ENTIRE TRAD ING RESULTS OF THE ASSESSEE, TO BE ABNORMAL. THEREFORE , THE LD. CIT(APPEALS) SHOULD HAVE FOLLOWED THE ORDER FOR ASSESSMENT YEAR 2003-04 FOR THE PURPOSE OF DELETING THE ADDITION AGAINST THE ASSESSEE. HOWEVER, LD. CIT(APPEALS) NOTED THAT ADDITION IS LIMITED TO FRESH ADDITIONS ONLY. THIS REASON IS AL SO 40 INCORRECT BECAUSE LD. COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT EVEN IF THERE ARE SOME FRESH CREDITORS FROM THE SAME PARTIES APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BUT THESE ARE RUNNING ACCOUNTS FROM THE EARLIER YEARS, THEREFORE, FOR DIFFERENCE OF THE AMOUNT ITSELF, NO SUCH ADDITI ON SHOULD BE MADE AGAINST THE ASSESSEE. SINCE, NO DETAILS HAVE BEEN GIVEN IN THE ASSESSMENT ORDER AND THE CHART NOW FILED HAVE NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ALSO ACCORDING TO THE ASSESSEE, WHEN NO PROPER OPPORTUNITY HAVE BEEN GIVEN BY THE ASSESSING OFFICER, IT WOULD BE REASONABLE AND APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE- DECIDE THIS ISSUE BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9(II) WE, ACCORDINGLY, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE BY FOLLOWING THE REASONS FOR DECISION GIVEN B Y LD. CIT(APPEALS) FOR ASSESSMENT YEAR 2003-04 (SUPRA ) WHEREBY ADDITION ON IDENTICAL ISSUE HAVE BEEN DELETED. THE ASSESSING OFFICER SHALL GIVE REASONAB LE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 10. IN THE RESULT, GROUND NOS. 3 TO 6 OF THE APPEA L OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S. 26. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE VIEW, IT IS IDENTICAL MATTER WHICH HAVE BEEN DECIDE D IN GROUP CASE OF M/S HEERA MOTI AGRO INDUSTRIES (SUPRA ) IN WHICH ALSO, THE MATTER WAS RESTORED TO THE FILE OF ASSESSING OFFICER FOR RE-DECIDING THE ISSUE FOLLOWI NG THE ORDER OF LD. CIT(APPEALS) FOR ASSESSMENT YEAR 2003- 04. 41 FOLLOWING THE ORDER IN THE CASE OF M/S HEERA MOTI A GRO INDUSTRIES (SUPRA), WE SET ASIDE THE ORDERS OF AUTH ORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF ASSESSI NG OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE BY FOLLOWING THE REASONS FOR DECISION GIVEN BY LD. CIT(APPEALS) FOR ASSESSMENT YEAR 2003-04 (SUPRA) WHEREBY ADDITION ON IDENTICAL ISSUE HAVE BEEN DELET ED. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 27. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 60/2014 (M/S SURBHI AGRO FOODS PRODUCTS, BADDI) ( A.Y. : 2005-06) 28. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 07.10.2013 FOR ASSESSMENT YEAR 2005-06. 29. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1, 2, 3, 5 AND 6 OF THE APPEAL. THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 30. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 2,04,020/- ON ACCOUNT OF SUNDRY CREDITORS. 42 31. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS ISSUE IS SAME AS HAVE BEEN DECI DED IN GROUP CASES OF M/S HEERA MOTI AGRO INDUSTRIES (SUPRA) VIDE ORDER DATED 20.09.2016. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY, SET ASIDE AND MA TTER IS RESTORED TO THE FILE OF ASSESSING OFFICER WITH D IRECTION TO RE-DECIDE THIS ISSUE AS IS DIRECTED IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES (SUPRA). THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 32. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA 63/2014 (M/S SURBHI AGRO FOODS PRODUCTS, BADDI) ( A.Y. : 2008-09) 33. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 07.10.2013 FOR ASSESSMENT YEAR 2008-09. 34. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1, 2, 3, 5 AND 6 OF THE APPEAL. THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 35. ON GROUND NO.4, ASSESSEE CHALLENGED THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IC OF THE ACT TO THE TUNE OF RS. 9,62,558/-. THIS GROUND IS SAME AS IS DECIDED IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRI ES ITA 740/2013 ON GROUND NO. 3. FOLLOWING THE REASONS FOR DECISION FOR THE SAME, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT ASSESSING OFFICER TO G RANT 43 DEDUCTION UNDER SECTION 80IC OF INCOME TAX ACT TO T HE ASSESSEE. THIS GROUND IS ALLOWED. 36. ON GROUND NO. 7, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 53,568/- ON ACCOUNT OF SUNDRY CREDITORS. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS ISSUE IS SAME AS HAVE BEEN DECIDED IN GROUP CASES O F M/S HEERA MOTI AGRO INDUSTRIES (SUPRA) VIDE ORDER D ATED 20.09.2016. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY, SET ASIDE AND MATTER IS RESTORED TO TH E FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE TH IS ISSUE AS IS DIRECTED IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES (SUPRA). THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 37. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ITA 64/2014 (M/S SURBHI AGRO FOODS PRODUCTS, BADDI) ( A.Y. : 2009-10) 38. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 07.10.2013 FOR ASSESSMENT YEAR 2009-10. 39. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1, 2, 3 AND 5 OF THE APPEAL. THESE GRO UNDS ARE DISMISSED AS NOT PRESSED. 40. ON GROUND NO. 4 ASSESSEE CHALLENGED THE ADDITIO N OF RS. 1,56,618/-ON ACCOUNT OF SUNDRY CREDITORS. TH E LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS 44 ISSUE IS SAME AS HAVE BEEN DECIDED IN GROUP CASES O F M/S HEERA MOTI AGRO INDUSTRIES (SUPRA) VIDE ORDER D ATED 20.09.2016. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY, SET ASIDE AND MATTER IS RESTORED TO TH E FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE TH IS ISSUE AS IS DIRECTED IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES (SUPRA). THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 41. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 42. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD FEBRUARY, 2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD