M/s Prem Bansal Real Estate (P) Ltd., Zirakpur V. ACIT, Patiala

ITA 601/CHANDI/2011

• Counselvise Citation: 60121514 RSA 2011
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JYOTI GUPTA
• Assessee Lawyers: N K GARG
• Keywords: Unexplained cash credit; Unexplained expenditure; Business income; Search and seizure; Deemed to accrue or arise in india; Onus to prove
• Section: 69C; 40A(3); 143(3); 80HHC; 133A; 80IB; 68; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: A BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 600/CHANDI/2011 ASSESSMENT YEAR: 2006-07 PREM BANSAL REAL ESTATE (P) LTD V. A.C.I.T. C.C. P ATIALA SWASTIK VIHAR, PATIALA ROAD ZIRAKPUR PAN: AADCP 4437 C ITA NO. 627/CHANDI/2011 ASSESSMENT YEAR: 2006-07 D.C.I.T. C.C. PATIALA V PREM BANSAL REAL ESTATE (P) LTD ITA NO. 601/CHANDI/2011 ASSESSMENT YEAR: 2007-08 PREM BANSAL REAL ESTATE (P) LTD V. A.C.I.T. C.C. P ATIALA ITA NO. 628/CHANDI/2011 ASSESSMENT YEAR: 2007-08 D.C.I.T. C.C. PATIALA V PREM BANSAL REAL ESTATE (P) LTD ITA NO. 629/CHANDI/2011 ASSESSMENT YEAR: 2008-09 D.C.I.T. C.C. PATIALA V PREM BANSAL REAL ESTATE (P) LTD APPELLANT BY: SHRI N.K. GARG RESPONDENT BY: SMT. JYOTI GUPTA DATE OF HEARING: 1.11.2012 DATE OF PRONOUNCEMENT: 12 .01.2012 ORDER D K SRIVASTAVA: APPEALS BEARING ITA NO. 600/CHANDI/ 2011 AND ITA NO. 627/CHANDI/2011 ARE CROSS-APPEALS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 24.3.2011 FOR AY 2006-07. APPEALS BEARING ITA NO.601/CHANDI/2011 AND ITA NO. 628/CHANDI/2011 ARE ALSO CROSS-APPEALS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 24.3.2011 FOR AY 2007-0 8. THE APPEAL BEARING ITA NO. 629/CHANDI/2011 FILED BY THE DEPARTMENT IS DIRE CTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 24.3.2011 FOR AY 2008-09. MOST OF THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON. WE, THEREFORE, FIND IT CO NVENIENT TO DISPOSE OFF ALL OF THEM BY A CONSOLIDATED ORDER. ITA NO. 600/CHANDI/2011: AY 2006-07: ASSESSEES APP EAL 2. AS THE NAME OF THE ASSESSEE INDICATES, THE ASSES SEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE. THE ASSESSEE BELONGS TO PR EM BANSAL GROUP OF CASES IN WHICH SEARCH AND SEIZURE OPERATIONS WERE CARRIED OU T ON 16.10.2007 U/S 132 OF PREM BANSAL REAL ESTATE V. ACIT 2 ITAS NO. 600 & OTHERS/CHANDI/2011 THE INCOME-TAX ACT. THE ASSESSEE FILED ITS RETURN O F INCOME ON 10.7.2008 RETURNING NIL INCOME. ASSESSMENT WAS, HOWEVER, COMP LETED U/S 143(3) ON 31.12.2009 ASSESSING THE TOTAL INCOME OF THE ASSESS EE AT RS. 2,60,38,870/- AFTER MAKING VARIOUS ADDITIONS/DISALLOWANCES. AGGRIEVED B Y THE ADDITIONS/DISALLOWANCES MADE BY THE AO, THE ASSESSEE FILED APPEAL BEFORE TH E LD. CIT(A) WHICH WAS PARTLY ALLOWED. THE ASSESSEE IS NOW IN APPEAL AGAINST THOS E ADDITIONS/DISALLOWANCES WHICH HAVE BEEN CONFIRMED BY THE LD. CIT(A) WHILE T HE DEPARTMENT IS IN APPEAL AGAINST THOSE ADDITIONS/DISALLOWANCES WHICH HAVE BE EN DELETED/REDUCED BY THE LD. CIT(A). 3. GROUND NO. 1 TAKEN BY THE ASSESSEE IS GENERAL IN NATURE AND THEREFORE, DOES NOT REQUIRE ANY ADJUDICATION. 4. GROUND NO. 2 TAKEN BY THE ASSESSEE READS AS UNDE R:- 2 THAT THE LD. APPELLATE AUTHORITY WRONGLY AND ILL EGALLY REJECTED THE CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ADDITIONS OF RS. 17 LAKHS MADE ON ACCOUNT OF UNPROVED SHARE APPLICATION MONEY, ALTHOU GH THERE IS ONLY ONE SOURCE OF INCOME I.E. PROJECT INCOME. 5. PERUSAL OF ASSESSMENT ORDER SHOWS THAT THE AO, W HILE COMPLETING THE ASSESSMENT, NOTICED CASH CREDITS AMOUNTING TO RS.17 LAKHS IN THE NAMES OF SEVERAL PERSONS. ON BEING CALLED UPON TO EXPLAIN TH E NATURE AND SOURCE THEREOF, IT WAS STATED BY THE ASSESSEE THAT THEY WERE SHARE APP LICATION MONEY RECEIVED FROM VARIOUS APPLICANTS. THE ASSESSEE COULD NOT HOWEVER ADDUCE ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM WITH THE RESULT THAT THE SAI D SUM OF RS. 17 LAKHS WAS TREATED AS UNEXPLAINED AND CONSEQUENTLY TAXED. ON APPEAL, T HE LD. CIT(A) HAS CONFIRMED THE AFORESAID ADDITION MADE BY THE AO. THE ASSESSEE HAS NOT CHALLENGED THE ORDER OF THE LD. CIT(A) CONFIRMING THE SAID ADDITIO N MADE BY THE AO AND THUS THE ORDER OF THE LD. CIT(A) IN THIS BEHALF HAS ATTAINED FINALITY. 6. PERUSAL OF THE APPELLATE ORDER PASSED BY THE LD. CIT(A) SHOWS THAT AN ALTERNATIVE CLAIM WAS MADE BY THE ASSESSEE BEFORE H IM TO THE EFFECT THAT DEDUCTION U/S 80IB SHOULD BE ALLOWED ON THE SAID AD DITION TREATING IT AS PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING. THE AFORESAID CLAIM HAS, HOWEVER, BEEN REJECTED BY THE LD. CIT(A) WITH THE FOLLOWING OBSER VATIONS:- AR ALTERNATIVELY CLAIMED DEDUCTION U/S 80IB ON THE AFORESAID ADDITION. HOWEVER, THIS CONTENTION OF AR IS NOT ACCEPTABLE AS IT HAS NOT BEEN PROVED THAT SHARE APPLICATION MONEY OF RS. 17 LAKHS ADDED IN THE ASSESSEES CASE IS EMERGING OUT OF ASSESSEES INCOME ELIGIBLE FOR D EDUCTION U/S 80IB. IN VIEW OF THE ABOVE, THIS ALTERNATIVE CONTENTION OF A R IS REJECTED AND IT IS HELD PREM BANSAL REAL ESTATE V. ACIT 3 ITAS NO. 600 & OTHERS/CHANDI/2011 THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80IB ON THE ADDITION OF RS. 17 LAKHS MADE ON ACCOUNT OF UNPROVED SHARE APPLICATION MONEY. 7. IN SUPPORT OF APPEAL, THE LD. COUNSEL FOR THE AS SESSEE SUBMITS THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED S HARE APPLICATION MONEY FORMS PART OF TOTAL INCOME OF THE ASSESSEE AND THER EFORE IT SHOULD BE INCLUDED IN THE PROFITS FOR THE COMPUTATION OF RELIEF U/S 80IB. 8. THE LD. DR HOWEVER, RESISTS THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. SHE RELIES UPON THE ORDER PASSED BY T HE LD. CIT(A). SHE ALSO RELIES UPON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIG H COURT IN NATIONAL LEGGUARD WORKS V. CIT (APPEALS) AND ANOTHER, 288 ITR 18 (P&H ) IN SUPPORT OF THE ORDER OF THE LD. CIT(A). 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. UNEXPLAINED CASH CREDITS ALLEGEDLY RECEIVED AS SHAR E APPLICATION MONEY HAS BEEN TAXED AS UNEXPLAINED CASH CREDIT U/S 68 BY THE AO A ND THEREFORE DOES NOT CONSTITUTE PROFITS DERIVED FROM INDUSTRIAL UNDERTAK ING. UNEXPLAINED CASH CREDITS/INVESTMENTS ARE TAXED U/S 68, 69, 69A, AND 69B ONLY FOR THE REASON THAT THEIR NATURE AND SOURCE HAVE NOT BEEN ESTABLISHED A ND THEREFORE THEIR NATURE AND SOURCE CANNOT BE TRACED TO ANY KNOWN SOURCE, E.G., BUSINESS OF THE ASSESSEE. THE AFORESAID VIEW IS DULY SUPPORTED BY THE JUDGMENT IN FAKIR MOHMED HAZI HASSAN V. CIT, 247 ITR 290 (GUJ) IN WHICH THE HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER: THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C OF THE INCOME-TAX ACT, 1961 WOULD SHOW THAT IN CASES WHERE THE NATURE AND SOURCES OF INVESTMENTS MADE BY THE ASSESSEE OR THE NATURE AND SOURCES OF ACQUISITION OF MONEY, BULLION, ETC., OWNED BY THE A SSESSEE OR THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT EXPLAINED AT ALL, OR NOT SATISFACTORILY EXPLAINED, THEN, THE VAL UE OF SUCH INVESTMENTS AND MONEY OR THE VALUE OF ARTICLES NOT RECORDED IN THE BOOKS OF ACCOUNT OR THE UNEXPLAINED EXPENDITURE MAY BE DEEME D TO BE THE INCOME OF SUCH ASSESSEE. IT FOLLOWS THAT THE MOMENT A SATISFACTORY EXPLANATION IS GIVEN ABOUT SUCH NATURE AND SOURCE B Y THE ASSESSEE, THEN THE SOURCE WOULD STAND DISCLOSED AND WILL, THE REFORE BE KNOWN AND THE INCOME WOULD BE TREATED UNDER THE APPROPRIA TE HEAD OF INCOME FOR ASSESSMENT AS PER THE PROVISIONS OF THE ACT. HOWEVER, WHEN THESE PROVISIONS APPLY BECAUSE NO SOURCE IS DI SCLOSED AT ALL ON THE BASIS OF WHICH THE INCOME CAN BE CLASSIFIED UND ER ONE OF THE PREM BANSAL REAL ESTATE V. ACIT 4 ITAS NO. 600 & OTHERS/CHANDI/2011 HEADS OF INCOME U/S 14 OF THE ACT, IT WOULD NOT BE POSSIBLE TO CLASSIFY SUCH DEEMED INCOME UNDER ANY OF THESE HEADS INCLUDI NG INCOME FROM OTHER SOURCES WHICH HAVE TO BE SOURCES KNOWN OR E XPLAINED. WHEN THE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME U/S 14, IT FOLLOWS THAT THE QUESTION OF GIVI NG ANY DEDUCTIONS UNDER THE PROVISIONS WHICH CORRESPOND TO SUCH HEADS OF INCOME WILL NOT ARISE. IF IT IS POSSIBLE TO PEG THE INCOME UNDE R ANY ONE OF THOSE HEADS BY VIRTUE OF A SATISFACTORY EXPLANATION BEING GIVEN, THEN THESE PROVISIONS OF SECTION 69, 69A, 69B AND 69C WILL NOT APPLY, IN WHICH EVENT, THE PROVISIONS REGARDING DEDUCTIONS ETC., AP PLICABLE TO THE RELEVANT HEAD OF INCOME UNDER WHICH SUCH INCOME FAL LS WILL AUTOMATICALLY BE ATTRACTED. THE OPENING WORDS OF SECTION 14 SAVE AS OTHERWISE PROVIDED BY THIS ACT CLEARLY LEAVE SCOPE FOR DEEMED INCOME OF THE NATURE COVERED UNDER THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C B EING TREATED SEPARATELY, BECAUSE SUCH DEEMED INCOME IS NOT INCOM E FROM SALARY, HOUSE PROPERTY, PROFITS AND GAINS OF BUSINESS OR PR OFESSION, OR CAPITAL GAINS, NOR IS IT INCOME FROM OTHER SOURCES BECAUS E THE PROVISIONS OF SECTION 69, 69A, 69B AND 69C TREAT UNEXPLAINED INVE STMENTS, UNEXPLAINED MONEY, BULLION, ETC., AND UNEXPLAINED E XPENDITURE AS DEEMED INCOME WHERE THE NATURE AND SOURCE OF INVEST MENT, ACQUISITION OR EXPENDITURE, AS THE CASE MAY BE, HAV E NOT BEEN EXPLAINED OR SATISFACTORILY EXPLAINED. THEREFORE, I N THESE CASES, THE SOURCE NOT BEING KNOWN, SUCH DEEMED INCOME WILL NOT FALL EVEN UNDER THE HEAD INCOME FROM OTHER SOURCES. THEREFORE, TH E CORRESPONDING DEDUCTIONS WHICH ARE APPLICABLE TO THE INCOMES UNDE R ANY OF THESE VARIOUS HEADS, WILL NOT BE ATTRACTED IN THE CASE OF DEEMED INCOMES WHICH ARE COVERED UNDER THE PROVISIONS OF SECTION 6 9, 69A, 69B AND 69C OF THE ACT IN VIEW OF THE SCHEME OF THOSE PROVI SIONS. 10. SECTION 80IB(3) ALLOWS DEDUCTION IN RESPECT OF PROFITS AND GAINS DERIVED FROM ELIGIBLE INDUSTRIAL UNDERTAKING AND NOT IN RES PECT OF INCOME TAXED U/S 68 OF THE I-T ACT. BESIDES, THE ASSESSEE HAS LED NO EVIDE NCE TO ESTABLISH THAT THE IMPUGNED ADDITION REPRESENTS PROFITS AND GAINS DERI VED FROM INDUSTRIAL UNDERTAKING. IN THE CONTEXT OF ADMISSIBILITY OF DED UCTION OF THE AMOUNTS SURRENDERED DURING SURVEY OPERATION, U/S 80HHC, THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD IN NATIONAL LEGGUARD, 288 ITR 18 (P& H) AS UNDER: WE ARE UNABLE TO ACCEPT THIS SUBMISSION. DEDUCTION UNDER SECTION 80HHC OF THE ACT IS AVAILABLE ONLY ON SHOWING FULFILLMENT OF THE CONDITIONS SPECIFIED PREM BANSAL REAL ESTATE V. ACIT 5 ITAS NO. 600 & OTHERS/CHANDI/2011 THEREIN AND THERE COULD BE NO PRESUMPTION THAT SURR ENDER MADE ON ACCOUNT OF UNEXPLAINED STOCKS REPRESENTED EXPORT INCOME. TH E ASSESSEE WAS UNABLE TO GIVE ANY EXPLANATION. THERE COULD BE NO PRESUMPT ION THAT EH ADDITIONAL AMOUNT SURRENDERED REPRESENTED INCOME FROM EXPORTS. DEDUCTION U/S 80HHC OF THE ACT CAN BE CLAIMED ONLY ON SHOWING FAC TS WHICH MAKE THE ASSESSEE ELIGIBLE FOR THE DEDUCTION. THE BURDEN TO PROVE THESE FACTS WAS ON THE ASSESSEE AND NOT ON THE REVENUE. 11. SIMILAR PRINCIPLES ARE SQUARELY APPLICABLE TO T HE MATTER BEFORE US. IF THE ASSESSEE WANTED TO CLAIM DEDUCTION U/S 80IB(3), IT WAS FOR THE ASSESSEE TO ESTABLISH THAT THE DISALLOWANCES/ADDITIONS SO MADE WERE PROFITS OF INDUSTRIAL UNDERTAKING. THE ASSESSEE HAS NOT DISCHARGED THAT B URDEN. ITS CLAIM IN THIS BEHALF CANNOT BE ACCEPTED. IN THIS VIEW OF THE MATTER, THE ORDER OF THE LD. CIT(A) IN THIS BEHALF IS REVERSED AND THAT OF THE AO IS RESTORED. 12. GROUND NO. 3 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. ADDITIONAL GROUND OF APPEAL: 13. DURING THE COURSE OF HEARING, THE ASSESSEE FILE D AN APPLICATION FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL, WHICH REA DS AS UNDER: SUB. APPLICATION FOR ADDITIONAL GROUND OF APPEAL REG. PREM BANSAL REAL ESTATE PVT. LTD. V. ACIT, CE NTRAL CIRCLE, PATIALA APPEAL NO.600/CHANDI/2011-FOR AY 2006-07 RESPECTFULLY SUBMITTED, IN THE INTEREST OF EQUITY AND JUSTICE, THE FOLLOWIN G ADDITIONAL GROUND OF APPEAL MAY KINDLY BE ALLOWED:- THAT THE ADDITION OF RS.17 LAKHS ON ACCOUNT OF SHA RE APPLICATION MONEY SHOULD BE TELESCOPED AGAINST THE ADDITION OF RS.9,8 1,990/- MADE ON ACCOUNT OF UNACCOUNTED CASH RECEIPT OF SALE PROCEED OF FLATS. IT IS PRAYED THAT APPLICATION FOR ADDITIONAL GROUND MAY KINDLY BE ALLOWED FOR WHICH NO NEW EVIDENCE IS REQUIRED. 14. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS MADE ADDITION OF RS.17 LAKHS ON ACCOUNT OF UNEXPLAINED SHARE APPLICA TION MONEY AND FURTHER ADDITION OF RS.9,81,990/- ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS BEING SALE PROCEEDS OF FLATS. THE ASSESSEE NOW SEEKS TELESCOPI NG OF RS.17 LAKHS TREATED BY THE AO AS UNEXPLAINED SHARE APPLICATION MONEY AGAIN ST RS.9,81,900/- TAXED BY PREM BANSAL REAL ESTATE V. ACIT 6 ITAS NO. 600 & OTHERS/CHANDI/2011 THE AO AS UNEXPLAINED CASH RECEIPTS ON SALE OF FLAT S. THE BENEFIT OF TELESCOPING IS GIVEN SO AS TO AVOID DOUBLE TAXATION OF THE SAME IN COME. BUT THE CONCEPT OF TELESCOPING NEEDS TO BE APPLIED WITH CAUTION. IT CA N BE APPLIED ONLY WHEN (I) THE ASSESSEE ADMITS IN CLEAR AND UNAMBIGUOUS TERMS THAT THE AMOUNT ADDED EARLIER WAS HIS INCOME; (II) THE AMOUNT SO ADDED WAS AVAILA BLE (AND NOT UTILIZED ELSEWHERE) FOR TELESCOPING AGAINST ANOTHER ADDITION ; AND (III) THE MATERIALS AVAILABLE ON RECORD ARE NOT INCONSISTENT WITH THE C LAIM FOR TELESCOPING. THE ISSUE IN ADDITIONAL GROUND OF APPEAL WAS NEITHER RAISED B EFORE THE AO/CIT(A) NOT DOES IT ARISE FROM THEIR ORDERS. RELEVANT FACTS ARE NOT AVA ILABLE ON RECORD. IN THIS VIEW OF THE MATTER, THE ISSUE IN THE ADDITIONAL GROUND OF A PPEAL IS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN CONFORMITY WIT H LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. ADDITIO NAL GROUND OF APPEAL IS TREATED AS ALLOWED WITH THE AFORESAID DIRECTIONS. 15. APPEAL BEARING ITA NO. 600/CHANDI/2011 FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 601/CHANDI/2011: AY 2007-08: ASSESSEES APP EAL 16. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 THAT THE IMPUGNED APPELLATE ORDER IS AD BOTH ON FACTS AND LAW TO THE EXTENT THAT THE RELIEF HAS NOT BEEN ALLOWED. 2. THAT THE LD. APPELLATE AUTHORITY WRONGLY AND ILL EGALLY REJECTED THE CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ADDITIONS OF RS. 2,03,55,000/- MADE ON ACCOUNT OF UNPROVED SHARE APPLICATION MONEY , ALTHOUGH THERE IS ONLY ONE SOURCE OF INCOME I.E. PROJECT INCOME AND R S. 39,369/- ADDITION MADE ON ACCOUNT OF UNDISCLOSED PURCHASES. 3. THAT THE APPELLANT CRAVES PERMISSION TO ELUCIDAT E, ADD, AMEND, MODIFY, DELETE ANY GROUND OF GROUNDS OF APPEAL BEFO RE THE DISPOSAL IN THE INTEREST OF SUBSTANTIAL JUSTICE. IT IS THEREFORE PRAYED THAT THE APPEAL MAY KINDLY BE ACCEPTED AS PRAYED ABOVE OR ANY OTHER RELIEF TO WHICH THE APPEL LANT MAY BE FOUND ENTITLED MAY KINDLY BE GRANTED. 17. GROUNDS NO. 1 AND 3 ARE GENERAL IN NATURE AND T HEREFORE DO NOT REQUIRE ANY ADJUDICATION. THE ISSUE RAISED IN GROUND NO. 2 IS S IMILAR TO THE ONE RAISED BY THE ASSESSEE IN GROUND NO. 2 IN ITS APPEAL FOR AY 2006- 07 WHICH WE HAVE ALREADY DECIDED AGAINST THE ASSESSEE. FOLLOWING THE SAME, G ROUND NO. 2 IS DISMISSED. THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PREM BANSAL REAL ESTATE V. ACIT 7 ITAS NO. 600 & OTHERS/CHANDI/2011 ITA NO. 627/CHD/2011: AY 2006-07: APPEAL BY THE DEP ARTMENT ITA NO. 628/CHD/2011: AY 2007-08: APPEAL BY THE DEP ARTMENT ITA NO. 629/CHD/2011: AY 2008-09: APPEAL BY THE DEP ARTMENT 18. IN APPEAL BEARING ITA NO. 627/CHD/2011: AY 2006 -07, THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS: 1 THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S IN ALLOWING DEDUCTION U/S 80IB ON THE DISALLOWANCES MADE U/S 40 A(3) ON ACCOUNT OF RS. 3,60,970/- ON ACCOUNT OF UNEXPLAINED DONATIONS, DISALLOWANCE OF RS. 14,16,512/- U/S 40A(3) AND ADDITION OF RS. 9,81,990 /- ON ACCOUNT OF UNDISCLOSED CASH RECEIPTS IGNORING THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD , 288 ITR 18 AND HON'BLE ITAT, CHANDIGARH DECISION IN THE CASE OF VA LLABH YARN ITA NO. 79/CHD/2010. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 19. IN APPEAL BEARING ITA NO. 628/CHD/2011, THE DEP ARTMENT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S IN ALLOWING DEDUCTION U/S 80IB ON THE DISALLOWANCES MADE U/S 40 A(3 )ON ACCOUNT OF RS. 1,92,000/- ON ACCOUNT OF UNEXPLAINED DONATIONS, DISALLOWANCE OF RS. 1,65,188/- OF FBT, DISALLOWANCE OF RS. 2,82,846/- O F FEE PAID TO REGISTRAR AND DISALLOWANCE OF RS. 9,47,050/- U/S 40A(3) ON AC COUNT OF UNDISCLOSED CASH RECEIPTS IGNORING THE JUDGMENT OF HON'BLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD, 288 ITR 18 AND HON'BLE ITAT, CHANDIGARH DECISION IN THE CASE OF VALLABH YARN ITA NO. 79/CHD/2010. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 20. IN APPEAL BEARING ITA NO. 629/CHD/2011 THE DEPA RTMENT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: PREM BANSAL REAL ESTATE V. ACIT 8 ITAS NO. 600 & OTHERS/CHANDI/2011 1 THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S IN ALLOWING DEDUCTION U/S 80IB ON THE DISALLOWANCES MADE U/S 40 A(3) ON ACCOUNT OF RS. 81,501/- ON ACCOUNT OF UNEXPLAINED DONATIONS, D ISALLOWANCE OF RS. 1,22,844/- OF FBT, DISALLOWANCE OF RS. 25,00,762/- U/S 40A(3) AND ADDITION OF RS. 1,80,340/- ON ACCOUNT OF UNDISCLOSED CASH RE CEIPTS IGNORING THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD, 288 ITR 18 AND HON'BLE ITAT, CHANDIGIARH DECISION IN THE CASE OF VALLABH YARN ITA NO. 79/CHD/2010. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 21. GROUNDS NO. 2 AND 3 IN ALL THE APPEALS FILED BY THE DEPARTMENT ARE GENERAL IN NATURE AND THEREFORE THEY DO NOT REQUIRE ANY ADJ UDICATION. 22. APROPOS GROUND NO.1, PERUSAL OF ASSESSMENT ORDE R FOR AY 2006-07 SHOWS THAT THE AO HAS MADE THREE MAJOR DISALLOWANCES WITH WHICH WE ARE CONCERNED IN THE PRESENT APPEALS. FIRST DISALLOWANCE IS OF A SUM OF RS. 3,60,970/- DEBITED TO THE PROFIT AND LOSS ACCOUNT AS DONATION. SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THAT THE DONATION WAS ACTUALLY GIVEN, THE AO DISALL OWED A SUM OF RS. 3,60,970/-, WHICH, ON APPEAL, HAS BEEN CONFIRMED BY THE LD. CIT (A). SECOND DISALLOWANCE IS OF A SUM OF RS. 14,16,512/- BEING 20% OF PURCHASES MAD E IN CASH U/S 40A(3) OF THE ACT, WHICH, ON APPEAL, HAS BEEN CONFIRMED BY THE LD . CIT(A). THIRD ADDITION MADE BY THE AO IS OF RS. 9,81,990/- ON ACCOUNT OF UNDISC LOSED CASH RECEIPTS, WHICH, ON APPEAL, HAS BEEN CONFIRMED BY THE LD. CIT(A). THUS ALL THE THREE AFORESAID DISALLOWANCES/ADDITIONS MADE BY THE AO HAVE BEEN CO NFIRMED BY THE LD. CIT(A). IN AY 2007-08 AND AY 2008-09 SIMILAR DISALLOWANCES/ ADDITIONS WERE MADE BY THE AO, WHICH, ON APPEAL, HAVE BEEN CONFIRMED BY THE LD . CIT(A). PERUSAL OF THE APPELLATE ORDER PASSED BY THE LD. CIT(A) SHOWS THAT HE HAS ISSUED DIRECTIONS TO THE AO TO CONSIDER THE AMOUNTS SO DISALLOWED OR ADD ED BY THE AO AND CONFIRMED BY THE LD. CIT(A) AS ELIGIBLE FOR RELIEF U/S 80IB. 23. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) DIRECT ING THE AO TO GRANT RELIEF TO THE ASSESSEE U/S 80IB IN RESPECT OF THE AMOUNTS ADD ED/DISALLOWED BY THE AO AND CONFIRMED BY THE LD. CIT(A), THE DEPARTMENT IS IN A PPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, THE LD. DR SUBMITS THAT NONE OF THE AFORESAID ADDITIONS/DISALLOWANCES IS IN THE NATURE OF PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING AND THEREFORE NOT ELIGIBLE FOR RELIEF U /S 80IB. PREM BANSAL REAL ESTATE V. ACIT 9 ITAS NO. 600 & OTHERS/CHANDI/2011 24. IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE SUPP ORTS THE ORDER OF LD. CIT(A) AND SUBMITS THAT THE ADDITIONS/DISALLOWANCES MADE B Y THE AO AND CONFIRMED BY THE LD. CIT(A) WOULD INCREASE THE PROFITS OF INDUST RIAL UNDERTAKING AND THEREFORE THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO INCLU DE THEM FOR RELIEF U/S 80IB. 25. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CO NSIDERED THEIR SUBMISSIONS. PERUSAL OF SUB-SEC (3) OF SEC 80IB SHOWS THAT THE A MOUNT OF DEDUCTION IN THE CASE OF AN ELIGIBLE INDUSTRIAL UNDERTAKING SHALL BE COMP UTED WITH REFERENCE TO THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDE RTAKING. THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE HAS ESTABLISHED TH AT THE DISALLOWANCES/ADDITIONS MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) WERE PART OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING. 26. DISALLOWANCE U/S 40A(3) HAS BEEN MADE ON THE GR OUND THAT PAYMENTS FOR EXPENSES WERE MADE IN CASH AND NOT ON THE GROUND TH AT THE PAYMENTS WERE NOT MADE. THE ASSESSEE HAS INVITED DISALLOWANCE U/S 40A (3) BECAUSE IT HAS INCURRED EXPENSES IN CASH AND NOT BECAUSE IT HAS NOT INCURRE D SUCH EXPENSES. THE AMOUNT OF EXPENDITURE INCURRED IN CASH CANNOT BE CONSIDERE D AS PROFITS AND GAINS DERIVED FROM THE INDUSTRIAL UNDERTAKING ALTHOUGH IT WOULD B E LIABLE TO BE DISALLOWED U/S 40A(3). EXPENSES INCURRED CANNOT ASSUME THE CHARACT ER OF PROFITS; RATHER THEY REDUCE THE PROFITS. THEREFORE THE DISALLOWANCE MADE BY THE AO U/S 40A(3) CANNOT BE TREATED AS PROFITS DERIVED FROM INDUSTRIAL UNDER TAKING IN TERMS OF SECTION 80IB(3). 27. THE FACT THAT UNEXPLAINED CASH RECEIPTS HAVE BE EN TAXED AS INCOME OF THE ASSESSEE, DOES NOT NECESSARILY ESTABLISH THAT THEY ARE IN THE NATURE OF PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING UNLESS THE ASSE SSES PROVES SO. IN THE PRESENT CASE, THE ASSESSEE HAS FAILED TO PROVE THAT THE ADD ITIONS/DISALLOWANCES MADE BY THE AO AND CONFIRMED BY THE CIT(A) CONSTITUTE PROFI TS DERIVED FROM AN ELIGIBLE INDUSTRIAL UNDERTAKING AND THEREFORE THEY CANNOT BE CONSIDERED FOR INCLUSION IN THE PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING. SIMILA R IS THE CASE WITH REGARD TO OTHER DISALLOWANCE. 28. IN VALLABH YARN (P) LTD. V. ADDL CIT, ITA NO. 7 9/CHD/2010, THIS TRIBUNAL HAS NOTED THE JUDGMENT OF THE HON'BLE HIGH COURT NA TIONAL LEGGUARD, 288 ITR 18 (P&H) AND APPLIED THE SAME IN THE CONTEXT OF SECTIO N 80IB WITH THE FOLLOWING OBSERVATIONS:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREF ULLY. AT THE OUTSET, IT IS TO BE NOTED THAT EVERY BUSINESS INCOM E EARNED IS NOT ENTITLED TO THE BENEFITS OF SECTION 80IB OF THE ACT . ONLY PROFITS PREM BANSAL REAL ESTATE V. ACIT 10 ITAS NO. 600 & OTHERS/CHANDI/2011 AND GAINS WHICH ARE DERIVED FROM THE ELIGIBLE INDUS TRIAL UNDERTAKING ARE ELIGIBLE FOR SECTION 80IB BENEFITS. THE AFORESAID PROPOSITION IS WELL FOUNDED AND IS BECAUSE OF THE E XPRESSION DERIVED FROM APPEARING IN SECTION 80IB OF THE ACT . THE MANNER AND IMPORT OF THE SAID EXPRESSION HAS BEEN EXPLAINE D IN THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. STERLING FOODS, 237 ITR 579 (S.C), WHICH IS IN LINE WITH THE AFORESAID PROPOSITION. AS PER THE HON'BLE SUPREME C OURT, THE EXPRESSION DERIVED FROM OBLIGATES THAT THERE SHOU LD BE A DIRECT NEXUS BETWEEN THE INCOME AND THE INDUSTRIAL UNDERTA KING BEFORE AN INCOME CAN BE SAID TO BE QUALIFYING FOR EXEMPTIO N. CONSIDERED IN THIS BACKGROUND, WHEN THE CLAIM OF THE ASSESSEE IS TO BE EXAMINED, IT IS TO BE SEEN AS TO WHETHER THE INCOME IN QUESTION CAN BE SAID TO HAVE BEEN DERIVED FROM THE INDUSTRIA L UNDERTAKING OF THE ASSESSEE, WHICH IS ELIGIBLE FOR BENEFIT U/S 80IB OF THE ACT. AT THIS POINT, IT WOULD ALSO BE PERTINENT TO NOTE T HAT THE BURDEN IS ON THE ASSESSEE TO ESTABLISH THAT SUCH INCOME FULFI LLS THE CONDITIONS PRESCRIBED FOR THE CLAIM OF EXEMPTION PR OVIDED UNDER SECTION 80IB OF THE ACT. 6. IN THIS CONNECTION, WE MAY MAKE A REFERENCE TO THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD WORKS (SUPRA). IN THE SAID CAS E, THE ASSESSEE WAS AN EXPORT ORIENTED UNIT. CONSEQUENCE T O A SURVEY U/S 133A OF THE ACT, AN ADDITIONAL INCOME WAS OFFER ED OVER AND ABOVE THE NORMAL BUSINESS INCOME IN ORDER TO COVER THE DISCREPANCY IN STOCKS PHYSICALLY AVAILABLE AT THE P REMISES OF THE ASSESSEE. THE ADDITIONAL INCOME WAS DULY REFLECTED IN THE PROFIT & LOSS ACCOUNT AND THE SAME WAS ALSO CONSIDERED BY TH E ASSESSEE WHILE WORKING OUT THE DEDUCTION U/S 80HHC OF THE AC T AS PROFITS OF THE BUSINESS. THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF DEDUCTION U/S 80HHC OF THE ACT IN RESPECT TO SUCH A DDITIONAL INCOME. THE HON'BLE HIGH COURT UPHELD THE STAND OF THE REVENUE AND NEGATED THE PLEA OF THE ASSESSEE THAT ONCE THE AMOUNT HAS BEEN SURRENDERED AS BUSINESS INCOME, THE BURDEN OF PROVING THAT SUCH INCOME WAS NOT ELIGIBLE FOR 80HHC BENEFITS, WA S ON THE REVENUE. THE ASSESSEE HAD CONTENDED THAT IT SHOULD BE PRESUMED THAT THE INCOME REPRESENTED EXPORT INCOME AS THE AS SESSEE WAS AN EXPORT ORIENTED UNIT. THE HON'BLE HIGH COURT, WH ILE NEGATING THE PLEA OF THE ASSESSEE HELD AS UNDER : PREM BANSAL REAL ESTATE V. ACIT 11 ITAS NO. 600 & OTHERS/CHANDI/2011 WE ARE UNABLE TO ACCEPT THIS SUBMISSION. DEDUCTION UNDER SECTION 80HHC OF THE ACT IS AVAILABLE ONLY ON SHOWI NG FULFILLMENT OF THE CONDITIONS SPECIFIED THEREIN AND THERE COULD BE NO PRESUMPTION THAT SURRENDER MADE ON ACCOUNT OF UNEXPLAINED STOCKS REPRESENTED EXPORT INCOME. THE A SSESSEE WAS UNABLE TO GIVE ANY EXPLANATION. THERE COULD BE NO PRESUMPTION THAT THE ADDITIONAL AMOUNT SURRENDERED REPRESENTED INCOME FROM EXPORTS. DEDUCTION UNDER SE CTION 80HHC OF THE ACT CAN BE CLAIMED ONLY ON SHOWING FAC TS WHICH MAKE THE ASSESSEE ELIGIBLE FOR THE DEDUCTION. THE B URDEN TO PROVE THESE FACTS WAS ON THE ASSESSEE AND NOT ON TH E REVENUE. 7. A PERUSAL OF THE AFORESAID DISCUSSION SHOWS THA T AS PER THE HON'BLE HIGH COURT, THERE COULD BE NO PRESUMPTION T HAT THE SURRENDERED INCOME REPRESENTED EXPORT INCOME ELIGIB LE FOR THE BENEFITS U/S 80HHC OF THE ACT. IT IS FURTHER OBSERV ED THAT TO PROVE THAT THE INCOME WAS ELIGIBLE FOR THE CLAIM OF EXEMP TION, THE BURDEN WAS ON THE ASSESSEE AND NOT ON THE REVENUE. IN OUR CONSIDERED OPINION, THE PARITY OF REASONING LAID DO WN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NATIONAL LEGGUARD (SUPRA) IS ALSO CLEARLY ATTRACTED TO A CLA IM OF DEDUCTION U/S 80IB ON AN INCOME SURRENDERED DURING THE SURVEY OPERATION. FIRSTLY, IT IS TO BE OBSERVED THAT THE DEDUCTION U/ S 80HHC IS ALSO PRESCRIBED UNDER CHAPTER VI-A DEDUCTIONS IN RESP ECT OF CERTAIN INCOMES AS IS THE CASE OF A DEDUCTION U/S 80IB OF THE ACT. FURTHER, SECTION 80HHC AS WELL AS SECTION 80IB OF T HE ACT PROVIDE FOR DEDUCTION IN RESPECT OF SPECIFIED PROFITS AND G AINS, SUBJECT TO CONDITIONS PRESCRIBED THEREIN. SECTION 80HHC PROVID ES FOR EXEMPTION IN RELATION TO PROFITS EARNED FROM EXPORT S WHILE SECTION 80IB PROVIDES EXEMPTION FROM INCOMES DERIVED FROM T HE ELIGIBLE UNDERTAKINGS MENTIONED IN THE SAID SECTION. THEREFO RE, IN BOTH THE PROVISIONS, THE SPECIFIED CONDITIONS HAVE TO BE FUL FILLED BEFORE AN ASSESSEE IS ALLOWED THE PRESCRIBED BENEFITS. FOLLOW ING THE RATIO OF THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF NATIONAL LEGGUARD WORKS (SUPRA) EVEN IN CON TEXT OF SECTION 80IB, THERE CANNOT BE A PRESUMPTION THAT TH E ADDITIONAL INCOME SURRENDERED CONSEQUENT TO A SURVEY U/S 133A, REPRESENTED INCOME DERIVED FROM THE ELIGIBLE INDUSTRIAL UNDERTA KING OF THE PREM BANSAL REAL ESTATE V. ACIT 12 ITAS NO. 600 & OTHERS/CHANDI/2011 ASSESSEE. IN THIS REGARD, THE ASSESSEE HAS SET UP A PLEA THAT THE ADDITIONAL INCOME SURRENDERED IS ON ACCOUNT OF REAL IZATION OF SUNDRY DEBTORS AND THEREFORE, THE SAME IS TO BE TRE ATED AS BUSINESS INCOME, AS A CONSEQUENCE OF WHICH IT CAN B E SAID TO HAVE BEEN DERIVED FROM INDUSTRIAL UNDERTAKING AS THE ASS ESSEE HAS NO OTHER BUSINESS ACTIVITY. IN OUR VIEW, THE AFORESAID PLEA OF THE ASSESSEE HAS TO FAIL BECAUSE IT TANTAMOUNTS TO MAKI NG A PRESUMPTION THAT THE ADDITIONAL INCOME SURRENDERED REPRESENTED AN INCOME DERIVED FROM THE ELIGIBLE INDUSTRIAL UNDE RTAKING OF THE ASSESSEE. QUITE CLEARLY, THE PARITY OF REASONING LA ID DOWN IN THE CASE OF NATIONAL LEGGUARD WORKS (SUPRA) DOES NOT PE RMIT A PRESUMPTION THAT THE SURRENDERED INCOME IS ELIGIBLE FOR BENEFITS U/S 80IB OF THE ACT. 8. ALTHOUGH, THE ASSESSEE HAS PLEADED THAT THE ADD ITIONAL INCOME IS ON ACCOUNT OF REALIZATION OF SUNDRY DEBTO RS AND THIS TO OUR MIND IS ALSO SUSPECT. IN THIS CONNECTION, WE MA Y REFER TO THE LETTER OF SURRENDER DATED 10.11.2005, WHICH HAS BEE N ADVERTED TO BY THE LEARNED COUNSEL DURING THE COURSE OF HEARING , TO SUPPORT THE SUBMISSIONS. THE CONTENTS OF THE SURRENDER LETT ER READ AS UNDER: PLEASE REFER TO THE SURVEY PROCEEDINGS CONDUCTED U /S 133A OF THE INCOME TAX ACT TODAY AT OUR BUSINESS PREMISE S AT RAHON ROAD AND SUNDER NAGAR, LUDHIANA. DURING SURVEY PROCEEDINGS, SOME DISCREPANCIES AND CERTAIN PAPER SHEET ENTRIES WERE FOUND WHICH COULD NOT BE E XPLAINED AT THAT MOMENT. HOWEVER, IN ORDER TO BUY PEACE AND TO AVOID ANY LITIGATION WITH THE DEPARTMENT WITH RESPECT TO THE EXPLANATION OF SUCH DISCREPANCIES AND PAPER SHEET E NTRIES, WE HEREBY OFFER FOR TAXATION AN ADDITIONAL INCOME OF R S.44 LAKHS FROM BUSINESS IN THE HANDS OF THE COMPANY FOR THE A SSESSMENT YEAR 2006-07 SUBJECT TO NO PENALTY OR PROSECUTION U NDER ANY PROVISIONS OF THE INCOME TAX ACT TO COVER ALL DISCR EPANCIES OR UNEXPLAINED ENTRIES. THE INCOME TAX DUE ON THE ABOVE AMOUNT SHALL BE PAI D ON OR BEFORE THE DUE DATE OF PAYMENT OF ADVANCE TAX FOR T HE ASSESSMENT YEAR 2006-07. PREM BANSAL REAL ESTATE V. ACIT 13 ITAS NO. 600 & OTHERS/CHANDI/2011 A PERUSAL OF THE AFORESAID DEMONSTRATES THAT ALL WH AT THE ASSESSEE HAD OFFERED AS ADDITIONAL INCOME IS STATED TO BE EA RNED FROM BUSINESS. APART FROM THE AFORESAID, THERE IS NO MATERIAL OR EVIDENCE LED BY THE ASSESSEE TO DEMONSTRATE THE NAT URE OF INCOME SURRENDERED. IN ANY CASE, THE PLEA OF THE ASSESSEE THAT THE SURRENDERED INCOME IS BY WAY OF REALIZATION OF DEBT ORS IS UNSUBSTANTIATED. EVEN IF IT IS ACCEPTED THAT THE AD DITIONAL INCOME SURRENDERED IS TO BE REGARDED AS BUSINESS INCOME, T HERE CANNOT BE ANY PRESUMPTION THAT THE SAME IS ELIGIBLE FOR THE B ENEFITS U/S 80IB OF THE ACT BECAUSE IT IS FURTHER REQUIRED TO BE EST ABLISHED THAT SUCH BUSINESS INCOME IS DERIVED FROM THE ELIGIBLE I NDUSTRIAL UNDERTAKING FOLLOWING THE PARITY OF REASONING IN TH E CASE OF M/S STERLING FOODS (SUPRA). QUITE CLEARLY, THERE IS NO MATERIAL TO ESTABLISH THE SAME AND THEREFORE, WE FIND NO ERROR IN THE APPROACH OF THE INCOME TAX AUTHORITIES IN DENYING DEDUCTION U/S 80IB OF THE ACT ON AN AMOUNT OF RS.44 LAKHS SURRENDERED BY THE ASSESSEE AS ADDITIONAL INCOME CONSEQUENT TO SURVEY U/S 133A OF THE ACT. 29. IN THE MATTERS BEFORE US, THE ASSESSEE HAS NOT ESTABLISHED THAT THE ADDITIONS/DISALLOWANCES MADE BY THE AO AND CONFIRME D BY THE CIT(A) CONSTITUTE PROFITS DERIVED FROM AN ELIGIBLE INDUSTRIAL UNDERTA KING. BESIDES, SUCH ADDITIONS/DISALLOWANCES HAVE NOT BEEN INCLUDED IN T HE PROFITS OF INDUSTRIAL UNDERTAKING IN THE AUDITED ACCOUNTS. IN THIS VIEW O F THE MATTER, THE ORDER OF THE CIT(A) IN THIS BEHALF IS REVERSED AND THAT OF THE A O RESTORED. APPEALS FILED BY THE DEPARTMENT ARE ALLOWED. 30. IN VIEW OF THE FOREGOING, APPEAL BEARING (I) IT A NO. 600/CHD/2011 IS PARTLY ALLOWED, (II) 601/CHD/2011 IS DISMISSED, AND (III) 627-629/CHD/2011 IS ALLOWED. ORDER PRONOUNCED ON 12.01.2012 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEM BER CHANDIGARH: 12.01.2012 SURESH COPY TO: 1. THE APPELLANT, PREM BANSAL REAL ESTATE (P) LTD. ZIRAKPUR 2. THE RESPONDENT, A.C.I.T. C.C. PATIALA 3. THE CIT(A)-I, LUDHIANA 4. THE LD. CIT, LUDHIANA 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH PREM BANSAL REAL ESTATE V. ACIT 14 ITAS NO. 600 & OTHERS/CHANDI/2011