Pooja Paper Craft, Ahmedabad V. The Dy.CIT.,Circle-10, Ahmedabad

ITA 681/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8621 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO. 2144/AHD/2008 (ASSESSMENT YEAR:2004-05) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-10, AHMEDABAD A PPELLANT VS. M/S. POOJA PAPER CRAFT, 15, SWASTIK AVENUE, NAVRANGPURA, AHMEDABAD RESPONDENT PAN: AADFP5875B & ITA. NOS. 678, 679, 681 & 682/AHD/2011 (ASSESSMENT YEARS:2002-03, 03-04, 05-06 & 06-07) M/S. POOJA PAPER CRAFT, 15, SWASTIK AVENUE, NAVRANGPURA, AHMEDABAD APPELLANT VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-10, AHMEDABAD RESPONDENT I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 2 / BY REVENUE :SHRI M. K. SINGH, SR. D.R. / BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. /DATE OF HEARING :26.02.2015 !' /DATE OF PRONOUNCEMENT : 30.03.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: ALL THESE APPEALS, ONE BY REVENUE I.E. INCOME TAX A CT NO. 2144/AHD/08 FOR A.Y. 04-05 AND OTHER BY ASSESSEE PE RTAIN TO SAME ASSESSEE ON SAME ISSUE. SO, THEY ARE BEING DI SPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE. 2. IN ITA NO. 2144/AHD/2008 FOR A.Y. 2004-05, REVEN UE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS B Y DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF PROCESSING CHARGES OF RS. 5,73,477/- OUT OF PROCESS ING CHARGES CLAIMED RS.11,73,477/- PAID TO SHRI SHIVCHARAN SHARMA. 2. THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS BY DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF PRODUCTION INCENTIVES AMOUNTING TO RS. 13,04,998/-. 3. ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTU RING AND TRADING PAPER TUBES. FIRST ISSUE IS WITH REGARDS T O ADDITION ON ACCOUNT OF DISALLOWANCE OF PROCESSING CHARGES OF RS .5,73,477/- OUT OF PROCESSING CHARGES CLAIMED RS.11,73,477/- PA ID TO SHRI I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 3 SHIVCHARAN SHARMA. ASSESSING OFFICER STATED THAT T HE SURVEY WAS CONDUCTED AT THE PREMISES OF ASSESSEE ON 11.10. 2006. ASSESSING OFFICER FOUND THAT PROCESSING CHARGES OF RS.11,73,477/- HAVE BEEN DEBITED BY ASSESSEE WHILE SHRI SHIVCHARAN SHARMA HAS STATED THAT HE HAS NOT RECEIV ED MORE THAN RS.6.5 LACS FROM M/S. POOJA PAPER CRAFT. ACCO RDINGLY, DISALLOWANCE OF RS.5,73,477/- WAS MADE. THE STAND OF ASSESSEE HAS BEEN THAT PAYMENT OF RS.11,73,477/- MA DE TO SHRI SHIVCHARAN SHARMA WAS FOR FOUR ACTIVITIES I.E. BOX PACKING, LOADING, UNLOADING AND PREPARATION OF GUM WHICH IS SUPPORTED BY BILLS RAISED BY SHRI SHIVCHARAN SHARMA . DURING SURVEY, HE WAS VERY AFRAID AND WAS IN CONFUSED STAT E SO HE HAS MENTIONED THAT PAYMENT OF RS.6 TO 6.5 LAKHS HAS BEE N RECEIVED ONLY FOR FIRST THREE ACTIVITIES I.E. BOX PACKING, L OADING AND UNLOADING. HE REGULARLY ASSESSED TO TAX. ULTIMATE LY, REJECTING THE STAND OF ASSESSEE, ADDITION WAS MADE OF RS.5,73 ,477/- PLACING RELIANCE ON THE STATEMENT OF SHRI SHIVCHARA N SHARMA AS UNDER: THE CONTENTION THAT ASSESSEE HAS PAID TO SHIVCHARA N SHARMA THE GUM PREPARATION CHARGES IS NOT BASED ON FACT AS SEEN FROM THE STATEMENTS ABOVE. IT IS AN AFTER THO UGHT NOT SUPPORTED BY ANY EVIDENCE. CONSIDERING ALL THE ABO VE ASPECTS AND FACTUAL POSITION, THE AMOUNT PAID TO SH IVCHARAN SHARMA IS DISALLOWABLE IN EXCESS OF RS.6 LACS. THE REFORE, DISALLOWANCE OF RS.5,73,477/- IS MADE. 3.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) DELETED THE ADDITION IN QUESTION. SAME HAS BEEN OPPOSED ON BEHALF OF REVEN UE INTER I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 4 ALIA SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN DEL ETING ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PROCESSING CHARG ES OF RS.5,73,477/- OUT OF PROCESSING CHARGES CLAIMED RS.11,73,477/- PAID TO SHRI SHIVCHARAN SHARMA. LEA RNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT SHRI SHI VCHARAN SHARMA HAS CATEGORICALLY STATED TO HAVE RECEIVED RS . 6 TO 6.5 LACS FROM ASSESSEE. SO, ORDER OF CIT(A) SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON OTHER HA ND, LEARNED AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CI T(A) ON ISSUE. 3.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT ASSESSING OFFICER HAS HELD THA T TOTAL PAYMENT OF RS.6 LACS HAS BEEN MADE TO SHRI SHIVCHAR AN SHARMA WHILE ASSESSEE HAS CLAIMED THAT ABOVE PAYMEN T WAS ONLY FOR BOX PACKING, LOADING AND UNLOADING ONLY AN D REST OF THE PAYMENT WAS FOR PREPARATION OF GUM. ON PERUSAL OF THE STATEMENT OF SHRI SHIVCHARAN SHARMA, IT IS EVIDENT THAT HE HAS BEEN PAID AMOUNT OF RS.6.5 LACS FOR WORK OF BOX PAC KING, LOADING AND UNLOADING I.E. THREE ACTIVITIES. HE HA S NOT MENTIONED THAT THIS PAYMENT INCLUDES PAYMENT TOWARD S PREPARATION OF GUM EVEN THE STATEMENT OF SHRI NITIN BHAI, PARTNER RELIED UPON BY ASSESSING OFFICER REPRODUCED ON PAGE-7 OF ASSESSMENT ORDER REVEALS THAT HE HAS CLAIMED THA T THEY HAVE DEBITED IN THE BOOKS WHATEVER WAS PAID TO SHRI SHIV CHARAN SHARMA. SO, THE ABOVE STATEMENTS MAKE IT EVIDENTLY CLEAR THAT PAYMENT FOR PREPARATION OF GUM WAS MADE IN ADDITION TO I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 5 PAYMENT MADE FOR BOX PACKING, LOADING AND UNLOADING . THE STAND OF ASSESSEE IS SUPPORTED BY THE FACT THAT PRO CESS OF PREPARATION OF GUM WAS A VITAL INGREDIENT IN THE MA NUFACTURING OF PAPER TUBES AS VARIOUS PAPERS ARE STUCK TOGETHER BY GUM OF SPECIFIC VISCOSITY TO FORM THE 16 LAYER THICK PAPER TUBE WHICH IS USED IN THE SPINDLES AND CONSISTENCY OF GUM IS ESSE NTIAL REQUIREMENT IN KEEPING THE TUBE INTACT. ASSESSEE G AVE THE DETAILED PROCESS OF GUM MAKING AND BILLS FOR PURCHA SE OF GUM. ASSESSEE'S PRODUCTS CAN NOT BE MANUFACTURED WITHOUT PREPARATION OF GUM. ASSESSING OFFICER HAS BROUGHT NOTHING ON RECORD TO SUGGEST THAT ANY OTHER PERSON WAS PAID FO R PREPARATION OF GUM SO AS TO NEGATE THE VERSION OF A SSESSEE TO ESTABLISH THAT SHRI SHIVCHARAN SHARMA WAS NOT PAID FOR PREPARATION OF GUM. MOREOVER, ASSESSEE ALSO FILED AFFIDAVIT OF SHRI SHIVCHARAN SHARMA, WHEREIN IT HAS BEEN DEPOSED THAT TOTAL AMOUNT OF RS. 11,73,477/- WAS PAID TO HIM AND HE HAS FILED CORRESPONDING RETURN OF INCOME ACCORDINGLY. THE CONTENTS OF AFFIDAVIT FILED ON BEHALF OF SHRI SHIVCHARAN SHA RMA COULD NOT BE REJECTED WITHOUT CONFRONTING THE CONTENTS OF DEP OSITION TO THE DEPONENT. MOREOVER, STAND OF ASSESSEE HAS BEEN THAT PAYMENTS WERE MADE BY CHEQUES AND TDS WAS DEDUCTED THEREON AND PAYMENTS WERE MADE SUBSEQUENT TO RAISIN G OF BILLS BY SHRI SHIVCHARAN SHARMA. UNDER THESE FACTS AND CIRCUMSTANCES, ASSESSING OFFICER WAS NOT JUSTIFIED IN NEGATING THE CLAIM OF ASSESSEE. ONCE A CERTAIN CLAIM HAS BE EN ACCEPTED ADVERSE TO THE INTEREST OF ASSESSEE, SAME CAN BE RE TRACTED BY WAY OF DEPOSITION IN AFFIDAVIT AND ASSESSING OFFICE R OUGHT TO I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 6 HAVE MADE FURTHER INQUIRIES IN RESPECT OF SAME. WI THOUT MAKING FURTHER INQUIRIES, CONTENTS OF AFFIDAVIT SHO ULD NOT BE REJECTED. IN CASE BEFORE US, ONCE STATEMENT WAS RE TRACTED BY SHRI SHIVCHARAN SHARMA BY FILING AN AFFIDAVIT, BURD EN WAS UPON REVENUE TO ESTABLISH THAT STATEMENT GIVEN EARL IER WAS CORRECT. THE EVIDENCE HAS BEEN SUBMITTED BY WAY OF BILLS FOR PURCHASE OF GUM, PROCESS OF PREPARATION OF GUM, BIL LS FOR PREPARATION OF GUM PAID TO SHRI SHIVCHARAN SHARMA. PAYMENT BEING MADE BY CHEQUE AND MAKING DEDUCTION THEREON A ND FINALLY, FILING THE RETURN OF INCOME BY SHRI SHIVCH ARAN SHARMA. ALL THESE EVIDENCES LEAD TO CONCLUDE THAT ABOVE EXP ENSES WERE DEBITED BY ASSESSEE. ACCORDINGLY, CIT(A) WAS JUSTI FIED IN DELETING THE ADDITION IN QUESTION. THIS REASONED F ACTUAL FINDING CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPH OLD THE SAME. 4. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF PR ODUCTION INCENTIVES OF RS.13,04,998/-. ASSESSING OFFICER RE LIED UPON THE STATEMENT OF THREE WORKERS I.E. S/SHRI RATHOD BALWA NTSINGH, JAT RAMPRASAD CHOKHARAM AND GARASIA VINOD TEJSINGH RECORDED DURING SURVEY AND REJECTED THE CLAIM OF AS SESSEE THAT INCENTIVES OF 0.13 PER TUBE WAS PAID TO WORKERS TO MAXIMIZE THE PRODUCTION AND AFFIDAVITS OF OTHER WORKERS FILE D IN THIS REGARD WERE REJECTED. ASSESSING OFFICER HAS CONCLU DED HIS FINDING AS UNDER: 'THE ISSUE IS SELF-EXPLANATORY FROM THE STATEMENT O F WORKERS. NITINBHAI AND VIPULBHAI RECORDED AT THE TIM E OF SURVEY U/S 133A. THE WORKERS HAD CATEGORICALLY MENT IONED I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 7 IN THE STATEMENT THAT THEY HAVE NOT RECEIVED ANYTHI NG IN EXCESS OF PAY, INCREMENT AND BONUS. SHRI VIPULBHAI I N ANSWER TO Q. NO. 10 OF HIS STATEMENT HAD STATED THA T THE WORKERS ARE NOT PAID ANYTHING EXCESS OF WHATEVER IS STATED BY HIM. SHRI NITINBHAI OR VIPULBHAI AT THE TIME OF SURVEY DID NOT BRING ANYBODY FROM THE WORKERS AT FACTORY W HO COULD MENTION THAT THEY HAD RECEIVED ANYTHING IN EX CESS OF WHATEVER IS STATED BY THE THREE WORKERS. THE COPIES OF AFFIDAVIT FILED HAVE NO RELEVANCE PARTICULARLY IN T HIS BACKGROUND AS IT IS AN AFTER THOUGHT NOT SUPPORTED BY ANY EVIDENCE OF STATEMENTS RECORDED AT THE TIME OF SURV EY AS NARRATED IN DETAIL ABOVE. THE CLAIM OF ASSESSEE REG ARDING PRODUCTION INCENTIVES DEBITED TO P&L ACCOUNT AMOUNT ING TO RS. 13,04,998/- IS THEREFORE NOT ALLOWABLE I, THERE FORE, DISALLOW RS 13.04.998/- AND ADD TO THE INCOME OF TH E ASSESSEE ' 4.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) HAS GRANTED RELIEF TO ASSESSEE. SAME HAS BEEN OPPOSED ON BEHALF OF REVEN UE INTER ALIA SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN DEL ETING ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PRODUCTION INCEN TIVES AMOUNTING TO RS.13,04,998/-. ACCORDINGLY, HE REQUE STED TO SET ASIDE THE ORDER OF CIT(A) AND THAT OF ASSESSING OFF ICER BE RESTORED. ON OTHER HAND, LEARNED AUTHORIZED REPRES ENTATIVE REITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND S UBMITTED THAT ORDER OF CIT(A) BE UPHELD. 4.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THERE WERE THREE CATEGORIES OF WORKERS. I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 8 I. ONE CATEGORY IS OF THREE WORKERS WHOSE STATEMENT S WERE RECORDED DURING THE SURVEY PROCEEDINGS WHO HAVE DEN IED HAVING RECEIVED PRODUCTION INCENTIVES, II. SECOND CATEGORY IS OF WORKERS WHO HAVE FILED AF FIDAVITS AND STATED TO HAVE RECEIVED PRODUCTION INCENTIVES A ND; III. THIRD CATEGORY IS OF OTHER WORKERS WHOSE STATE MENTS WERE NEITHER RECORDED DURING THE SURVEY NOR AFFIDAVITS W ERE FILED BY THEM LATER ON. FROM THE ABOVE, IT IS CLEAR THAT PRODUCTION INCENTI VES WERE DISALLOWABLE IN CASE OF PERSONS WHO HAVE STATED THA T THEY HAVE NOT RECEIVED ANY PRODUCTION INCENTIVES. AS REGARDS OTHER WORKERS WHO HAVE FILED AFFIDAVITS, DUE INQUIRIES SH OULD HAVE BEEN MADE BEFORE DISALLOWING PRODUCTION INCENTIVES TO THEM. AS THERE WAS NOTHING TO RECORD TO SUGGEST THAT AFFI DAVITS WERE NOT CORRECT AS THEY HAVE NOT EARLIER MADE ANY STATE MENT TO THE EFFECT THAT PRODUCTION INCENTIVES WERE NOT RECEIVED BY THEM. AS REGARDS THE REST OF THE WORKERS, NO INQUIRIES, WHAT SOEVER, HAVE BEEN CARRIED OUT OR EVIDENCES GATHERED IN SUPPORT O F FINDING THAT THEY HAVE NOT RECEIVED THE PRODUCTION INCENTIV ES. AS FAR AS STATEMENT OF SHRI VIPUL SHAH, PARTNER RECORDED A T THE TIME OF SURVEY IS CONCERNED: HE HAS CLEARLY STATED THAT HE HAS NOT HANDLED THE FINANCIAL MATTER AND ACCOUNTS. WHEN QUE RIED ABOUT THE BOGUS PRODUCTION INCENTIVES, SHRI NITINBH AI SHAH, DURING THE STATEMENT RECORDED AS REPRODUCED IN THE ASSESSMENT ORDER, HAS STATED THAT SHRI VIPUL SHAH H ANDLED THE PRODUCTION AND HE DID NOT KNOW ABOUT THE COMMERCIAL MATTERS AND WHATEVER SHOWN IN THE BOOKS IS CORRECT AND TRUE . FURTHER, I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 9 BASED ON STATEMENT OF THREE WORKERS ONLY PRODUCTION INCENTIVES IN CASE OF ALL OTHER WORKERS CANNOT BE DISALLOWED W HEN OTHERS HAVE FILED AFFIDAVITS FOR HAVING RECEIVED PRODUCTIO N INCENTIVES AND THERE IS NO ADVERSE EVIDENCE IN REGARD TO 3 RD CATEGORY OF WORKERS AS DISCUSSED ABOVE. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT ONLY ONE OF THE WORKERS I.E. JAT RAMPRAT AP CHOKARAM HAS STATED THAT HE HAS NOT RECEIVED PRODUC TION INCENTIVES, WHILE OTHER TWO HAVE STATED REGARDING THEMSELVES THAT THEY HAVE NOT RECEIVED MORE THAN STATED ABOVE. SO, IT CANNOT BE PRESUMED THAT THIS ONE WORKER JAT RAMPRAT AP CHOKARAM WAS SPEAKING ON BEHALF OF ALL OTHER WORKER S. THERE IS NO DENIAL OF THE FACT THAT PRODUCTION INCENTIVES HAVE BEEN ALLOWED IN EARLIER YEAR EVEN WHEN THE PAPERS WERE S CRUTINIZED AS IS EVIDENT FROM ASSESSMENT ORDER FOR ASSESSMENT YEAR 2003- 04. IN VIEW OF ABOVE FACTS, IT IS A CASE WHERE PROD UCTION INCENTIVES IN CASE OF ABOVE THREE WORKERS WHO HAVE DENIED TO RECEIVE PRODUCTION INCENTIVES WAS LIABLE TO BE DISA LLOWED AND NOT FOR OTHER WORKERS. ASSESSEE HIMSELF HAS STALED THAT PRODUCTION INCENTIVES WERE NOT PAID TO THREE OF THE M AND ALSO NOT CLAIMED. ACCORDINGLY, ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF REJECTING PRODUCTION INCENTIVES TO ALL AND SAME WAS RIGHTLY DIRECTED TO BE DELETED BY CIT(A). THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO IN TERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 10 6. IN ITA NO. 678/AHD/2011, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: APPELLANT CRAVES LEAVE TO SUBMIT THE FOLLOWING CON CISE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT: 1. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PROCESSING CHARGES OF RS. 11,05,491/- OUT OF TOTAL PROCESSING CHARGES OF RS. 17,05,491/-. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SUBMI TS THAT OUT OF TOTAL PROCESSING CHARGES ONLY RS. 9,05,182/- IS PAID TO SHIV CHARAN SHARMA, THEREFORE DISALLOWANCE IF ANY BE MADE THEN RESTRICTED TO RS. 3,05,182/- (RS. 9,05,182 - RS. 6,00,000/-) 2. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PRODUCTION INCENTIVE OF RS. 14, 39, 028/- MERELY ON BASIS OF THE STATEMENTS RECORDED OF THREE WORKERS DURING THE COURSE OF SURVEY IGNORING THE RECEIPTS A ND AFFIDAVITS OF REMAINING WORKERS. 6.1 FIRST ISSUE IS WITH REGARDS TO DISALLOWANCE OF PROCESSING CHARGES OF RS. 11,05,491/- OUT OF TOTAL PROCESSING CHARGES OF RS. 17,05,491/-. WE HAVE DISCUSSED AND DECIDED THI S ISSUE IN FAVOUR OF ASSESSEE IN A.Y. 2004-05 VIDE PARA 3 OF T HIS ORDER. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CONCUR WITH THE FINDING OF CIT(A) WHO H AS CONFIRMED THE DISALLOWANCE OF PROCESSING CHARGES OF RS. 11,05 ,491/- OUT OF TOTAL PROCESSING CHARGES OF RS. 17,05,491/-. SA ME IS DIRECTED TO BE DELETED. 7. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF PR ODUCTION INCENTIVE OF RS. 14,39,028/- ON THE BASIS OF STATEM ENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY I GNORING THE I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 11 RECEIPTS AND AFFIDAVITS OF REMAINING WORKERS. WE H AVE DISCUSSED AND DECIDED THIS ISSUE IN FAVOUR OF ASSES SEE IN A.Y. 2004-05 VIDE PARA 4 OF THIS ORDER. FACTS BEING SI MILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CO NCUR WITH THE FINDING OF CIT(A) WHO HAS CONFIRMED THE DISALLO WANCE OF PRODUCTION INCENTIVE OF RS. 14,39,028/- MERELY ON T HE BASIS OF STATEMENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY IGNORING THE RECEIPTS AND AFFIDAVITS OF REMAINING W ORKERS SAME IS DIRECTED TO BE DELETED. 7.3 AS A RESULT, APPEAL FILED BY ASSESSEE FOR A.Y. 02-03 IS ALLOWED. 8. IN ITA NO. 679/AHD/2011, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: APPELLANT CRAVES LEAVE TO SUBMIT THE FOLLOWING CON CISE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT: 1. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PROCESSING CHARGES OF RS. 18,83,673/- OUT OF TOTAL PROCESSING CHARGES OF RS. 24,83,673/-. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SUBMI TS THAT OUT OF TOTAL PROCESSING CHARGES ONLY RS. 11,90,880/- IS PAID TO SHIV CHARAN SHARMA, THEREFOR E DISALLOWANCE IF ANY BE MADE THEN RESTRICTED TO RS. 5,90,880/- (RS. 11,90,880 - RS. 6,00,000/-) 2. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PRODUCTION INCENTIVE OF RS. 10,62,324/- MERELY ON BASIS OF THE STATEMENTS RECORDED OF THREE WORKERS DURING THE COURSE OF SURVEY IGNORING THE RECEIPTS A ND AFFIDAVITS OF REMAINING WORKERS. I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 12 9. FIRST ISSUE IS WITH REGARDS TO DISALLOWANCE OF P ROCESSING CHARGES OF RS. 18,83,673/- OUT OF TOTAL PROCESSING CHARGES OF RS. 24,83,673/-. WE HAVE DISCUSSED AND DECIDED THI S ISSUE IN FAVOUR OF ASSESSEE IN A.Y. 2004-05 VIDE PARA 3 OF T HIS ORDER. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CONCUR WITH THE FINDING OF CIT(A) WHO H AS CONFIRMED THE DISALLOWANCE OF PROCESSING CHARGES OF RS. 18,83 ,673/- OUT OF TOTAL PROCESSING CHARGES OF RS. 24,83,673/-. SA ME IS DIRECTED TO BE DELETED. 10. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF P RODUCTION INCENTIVE OF RS. 10,62,324/- ON THE BASIS OF STATEM ENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY I GNORING THE RECEIPTS AND AFFIDAVITS OF REMAINING WORKERS. WE HA VE DISCUSSED AND DECIDED THIS ISSUE IN FAVOUR OF ASSES SEE IN A.Y. 2004-05 VIDE PARA 4 OF THIS ORDER. FACTS BEING SI MILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CO NCUR WITH THE FINDING OF CIT(A) WHO HAS CONFIRMED THE DISALLO WANCE OF PRODUCTION INCENTIVE OF RS. 10,62,324/- MERELY ON T HE BASIS OF STATEMENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY IGNORING THE RECEIPTS AND AFFIDAVITS OF REMAINING W ORKERS SAME IS DIRECTED TO BE DELETED. 11. AS A RESULT, APPEAL FILED BY ASSESSEE FOR A.Y. 03-04 IS ALLOWED. 12. IN ITA NO. 681/AHD/2011, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 13 APPELLANT CRAVES LEAVE TO SUBMIT THE FOLLOWING CON CISE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT: 1. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PROCESSING CHARGES OF RS. 22,14,800/- OUT OF TOTAL PROCESSING CHARGES OF RS. 28,14,800/-. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SUBMI TS THAT OUT OF TOTAL PROCESSING CHARGES ONLY RS. 14,17,934/- IS PAID TO SHIV CHARAN SHARMA, THEREFOR E DISALLOWANCE IF ANY BE MADE THEN RESTRICTED TO RS. 8,17,934/- (RS. 14,17,934 - RS. 6,00,000/-) 2. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PRODUCTION INCENTIVE OF RS. 14,74,217/- MERELY ON BASIS OF THE STATEMENTS RECORDED OF THREE WORKERS DURING THE COURSE OF SURVEY IGNORING THE RECEIPTS A ND AFFIDAVITS OF REMAINING WORKERS. 13. FIRST ISSUE IS WITH REGARDS TO DISALLOWANCE OF PROCESSING CHARGES OF RS. 22,14,800/- OUT OF TOTAL PROCESSING CHARGES OF RS. 28,14,800/-. WE HAVE DISCUSSED AND DECIDED THI S ISSUE IN FAVOUR OF ASSESSEE IN A.Y. 2004-05 VIDE PARA 3 OF T HIS ORDER. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CONCUR WITH THE FINDING OF CIT(A) WHO H AS CONFIRMED THE DISALLOWANCE OF PROCESSING CHARGES OF RS. 22,14 ,800/- OUT OF TOTAL PROCESSING CHARGES OF RS. 28,14,800/-. SA ME IS DIRECTED TO BE DELETED. 14. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF P RODUCTION INCENTIVE OF RS. 14,74,217/- ON THE BASIS OF STATEM ENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY I GNORING THE RECEIPTS AND AFFIDAVITS OF REMAINING WORKERS. WE H AVE I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 14 DISCUSSED AND DECIDED THIS ISSUE IN FAVOUR OF ASSES SEE IN A.Y. 2004-05 VIDE PARA 4 OF THIS ORDER. FACTS BEING SI MILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CO NCUR WITH THE FINDING OF CIT(A) WHO HAS CONFIRMED THE DISALLO WANCE OF PRODUCTION INCENTIVE OF RS. 14,74,217/- MERELY ON T HE BASIS OF STATEMENTS RECORDED OF THREE WORKERS DURING COURSE OF SURVEY IGNORING THE RECEIPTS AND AFFIDAVITS OF REMAINING W ORKERS AS DISCUSSED ABOVE. SAME IS DIRECTED TO BE DELETED. 15. AS A RESULT, APPEAL FILED BY ASSESSEE FOR A.Y. 05-06 IS ALLOWED. 16. IN ITA NO. 682/AHD/2011, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND: APPELLANT CRAVES LEAVE TO SUBMIT THE FOLLOWING CON CISE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT: 1. LD. CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF PROCESSING CHARGES OF RS. 14,02,250/- OUT OF TOTAL PROCESSING CHARGES OF RS. 20,02,250/-. 17. THE ONLY ISSUE IS WITH REGARDS TO DISALLOWANCE OF PROCESSING CHARGES OF RS. 14,02,250/- OUT OF TOTAL PROCESSING CHARGES OF RS. 20,02,250/-. WE HAVE DISCUSSED AND DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE IN A.Y. 2004-05 VI DE PARA 3 OF THIS ORDER. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO CONCUR WITH THE FINDING OF C IT(A) WHO HAS CONFIRMED THE DISALLOWANCE OF PROCESSING CHARGE S OF RS. I.T.A. NOS. 2144/A/08, 678,679,681 & 682/A/11 FOR A.YS. 04-05, 02-03,03-04,05-06 & 06-07) (DCIT VS. M/S. M/S. POOJA PAPER CRAFT) PAGE 15 14,02,250/- OUT OF TOTAL PROCESSING CHARGES OF RS. 20,02,250/-. SAME IS DIRECTED TO BE DELETED. 18. AS A RESULT, THIS APPEAL FILED BY ASSESSEE FOR A.Y. 06-07 IS ALSO ALLOWED. 19. AS A RESULT, REVENUES APPEAL IS DISMISSED AND ASSESSEES APPEALS FOR ALL YEARS ARE ALLOWED AS INDICATED ABOV E. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF MARCH, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 30/03/2015 TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;