GROVER VINEYARDS LTD, MUMBAI V. DCIT 1(1), MUMBAI

ITA 7038/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3126 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMPRIYA RAGHVAN
• Assessee Lawyers: SANDEEP MEHTA MANAGER TAXATION
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 68; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI PAWAN SINGH, JUDICIAL MEMBER ./I.T.A. NO.7038/M/2013 (AY: 2008-2009) M/S GROVER VINEYARDS LTD. 348, ANAND BHAVAN, 1 ST FLOOR, DR. D. N. ROAD, MUMBAI 400 020. / VS. DCIT - 1(1), AAYAKAR BHAVAN, M.K. MARG, CHURCHGATE, MUMBAI 400 020. ./PAN : AAACG3592Q ( /APPELLANT) .. ( / RESPONDENT) ./I.T.A. NO.241/M/2014 (AY: 2008-2009) DCIT - 1(1), ROOM NO. 579, AAYAKAR BHAVAN, M.K. MARG, CHURCHGATE, MUMBAI 400 020. / VS. M/S GROVER VINEYARDS LTD. 348, ANAND BHAVAN, DR. D. N. ROAD, FORT, MUMBAI 400 001. ./PAN : AAACG3592Q ( /APPELLANT) .. ( / RESPONDENT) C.O. NO.69/M/2016 (ITA NO. 241/MUM/2014 ) (AY: 2008-2009) M/S GROVER VINEYARDS LTD. 348, ANAND BHAVAN, DR. D. N. ROAD, FORT, MUMBAI 400 001. / VS. DCIT - 1(1), ROOM NO. 579, AAYAKAR BHAVAN, M.K. MARG, CHURCHGATE, MUMBAI 400 020. ./PAN : AAACG3592Q ( /APPELLANT) .. ( / RESPONDENT) / ASSESSEE BY : SHRI SANDEEP MEHTA (MANAGER - TAXATION) / REVENUE BY : MISS RAMPRIYA RAGHVAN, DR /DATE OF HEARING : 16.08.2016 /DATE OF PRONOUNCEMENT : 07.09.2016 / O R D E R 2 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. PER D. KARUNAKARA RAO, AM: 1. THERE ARE THREE APPEALS UNDER CONSIDERATION ITA NO. 7038/MUM/2013 & 241/MUM/2014 ARE THE CROSS APPEALS FILED BY THE ASS ESSEE AND THE REVENUE. FURTHER, THE ASSESSEE ALSO FILED A CROSS OBJECTION NO. 79/MUM/2016 WITH THE DELAY OF 327 DAYS. ITA NO. 7038/MUM/2013 & 241/MUM/2014 2. FIRST, WE SHALL TAKE UP THE CROSS APPEALS FIRST. TH E BRIEFLY STATED RELEVANT FACTS USEFUL FOR ALL THESE THREE APPEALS ARE THAT THE ASS ESSEE IS ENGAGED IN MANUFACTURING AND MARKETING OF FRENCH WINE. ASSESSEE FILED THE RE TURN OF INCOME ON 31.3.2010 FOR THE ASSESSMENT YEAR (AY)- 2008-09 DECLARING TOTAL I NCOME OF AROUND RS. 1,39,79,834/-. IN THE ASSESSMENT PROCEEDINGS, AO NO TICED CERTAIN DISCREPANCIES ON VARIOUS ACCOUNTS AND PROCEEDED TO MAKE ADDITIONS CO MPUTING THE ASSESSED INCOME AT RS. 7,83,39,040/-. VARIOUS ACCOUNTS UNDER WHICH THE AO MADE THE ADDITION INCLUDES NAMELY,- PRODUCTION CHARGES ACCOUNT, ADVERTISEMENT/SALES PRO MOTION EXPENSES ACCOUNT, CULTIVATION EXPENSES, CONSUMPTION OF RAW-MATERIAL ACCOUNT, STAFF EXPENDITURE ACCOUNT, PROFESSIONAL CHARGES ACCOUNT A ND UNEXPLAINED CASH CREDIT ACCOUNT, VALUATION OF CLOSING STOCK ACCOUNT, VALUAT ION OF RAW WINE ACCOUNT AND ALSO ON ACCOUNT OF GROSS PROFIT RATION . AGGRIEVED WITH THE ABOVE ASSESSMENT, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND HE G RANTED RELIEF ON ACCOUNT OF VARIOUS ADDITIONS WITH THE EXCEPTION OF (1) ON ACCO UNT OF CLOSING STOCK OF GRAPES (2) ON ACCOUNT OF VALUATION OF RAW WINE AND (3) ON ACCO UNT OF CLOSING CONSULTANCY CHARGES. AGGRIEVED WITH THE DECISION OF THE CIT(A) AND CONFIRMING OF THE ADDITION ON THESE THREE ACCOUNTS, THE ASSESSEE IS IN APPEAL BEF ORE US. FURTHER, AGGRIEVED WITH THE RELIEF GRANTED BY THE CIT(A) ON ACCOUNT OF REST OF THE ADDITIONS, THE REVENUE IS IN 3 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. APPEAL BEFORE US VIDE APPEAL ITA NO. 241/MUM/2014. FURTHER, IN SUPPORT OF THE DECISION OF THE CIT(A) ON THE ISSUES RAISED IN REVE NUES APPEAL, INITIALLY, THE ASSESSEE FILED A CROSS OBJECTION VIDE C.O. NO. 69/MUM/2016 A ND THE SAME IS FILED WITH THE DELAY OF 327 DAYS. IN THE COVERING LETTER, ASSESSEE SUBMITTED THAT THE SAID DELAY NEEDS TO BE CONDONED AS THE COPY OF THE APPEAL MEMO OF THE REVENUES APPEAL IS SERVED ON THE ASSESSEE ONLY ON 11.05.2015 BY THE RE GISTRY OF ITAT. THEREAFTER, THE ASSESSEE HAD TO APPOINT COUNSEL AND CHANGE ANOTHER COUNSEL BEFORE CROSS OBJECTION IS FILED SUCCESSFULLY ON 26.04.2016 WITH THE DELAY OF 327 DAYS. ASSESSEE PLEADED FOR CONDONING THE DELAY AND ADMIT THE SAME FOR ADJUDICA TION. ITA NO. 7038/MUM/2013 3. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE AND THE GROUNDS IN THE ASSESSEES APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN M AKING AN ADDITION OF RS. 47,26,148/- TO THE CLOSING STOCK OF GRAPES. HE OUGHT NOT TO HAVE DONE SO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN M AKING AN ADDITION OF RS. 13,30,834/- TO THE VALUATION OF RAW WINE . HE OUGHT NOT TO HAVE DONE SO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN D ISALLOWING CONSULTANCY CHARGES OF RS. 11,02,605/-. 4. REGARDING THE GROUND 1, WHICH REFERS TO THE ADDITIO N RS 47,26,148/- ON ACCOUNT OF CLOSING STOCK OF GRAPES, LD COUNSEL FOR THE SUBMITTED BEFORE US THAT THE SAID ADDITION IS UNCALLED FOR AND THE SAME REQUIRED TO BE DELETED. IN THIS REGARD, COMING TO THE ROOT OF THE MISUNDERSTANDING OF RELEV ANT FACTS RELATING TO CLOSING OF GRAPES, THE RAW MATERIAL, THE CASE OF THE ASSESSEE IS THAT THE AO AND THE CIT(A) ERRED IN CONSIDERING THE TOTAL PURCHASES OF GRAPES OF THE YEAR TOTALLING TO 982415 KGS AS THE PURCHASES OF THE MONTH OF MARCH 2008. THE G RAPES PURCHASED IN MARCH 2008 ARE ONLY 601274 KGS. FURTHER, WE FIND THAT THE AO A SSUMED THAT, WITHOUT ANY BASIS, 4 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. THE FLAT RATE OF 15% OF THE 982415 KGS VALUED AT RS 3,15 CR (ROUNDED OFF) SHOULD HAVE REMAINED IN CLOSING STOCK OF GRAPES AND THERE FORE THE ADDITION OF RS 47,26,148/- ON THIS ACCOUNT ON MERE ESTIMATION BASI S. AFTER HEARING BOTH THE PARTIES AND PERUSING THE PAPERS FILED BEFORE US, IN OUR VIE W, THE ADDITION IS NOT BASED ON ANY CREDIBLE INCRIMINATING EVIDENCE OR NOT BASED ANY SO UND REASONING. PRIMA FACIE, THE MISTAKE OF THE AO IS APPARENT IN THE ORDER OF THE A O AND THE PRESUMPTIONS DRAWN BY THE AO ARE IRREGULAR AND UNSUSTAINABLE. THEREFORE, CONSIDERING THE ADHOCISM AND ABSENCE ANY SUPPORTING MATERIAL, WE FIND THERE IS NO CASE FOR ANY ADDITION ON THIS ACCOUNT . IN THAT SENSE OF THE MATTER, THE ORDER OF THE CIT (A) IS REQUIRED TO BE REVERSED ON THIS ISSUE. WE DO NOT FI ND ANY SUSTAINABLE LOGIC FOR ESTIMATING THE CLOSING STOCK OF GRAPES AT THE RATE OF 15%. WHY 15%? IN OUR VIEW, WHEN THE FINISHED PRODUCT AND SALES ARE UNDOUBTED A ND THE BOOKS OF ACCOUNTS ARE NOT REJECTED VALIDLY INVOKING THE PROVISIONS OF SEC TION 145(3) OF THE ACT, THE AO CANNOT RESORT TO ESTIMATION. THUS, IN PRINCIPLE, THE ADDITION STANDS DELETED. HO WEVER, WE FIND THAT LD COUNSEL FOR THE ASSESSEE FILED A LETTER DATED 13.06 .2016 ENCLOSING DOCUMENTS CONTAINING RECONCILIATION OF FACTS AND FIGURES/ ADD ITIONAL EVIDENCES RUNNING INTO 11 PAGES. THESE PAPERS DEALS WITH (1) WINE QUALITY REC ONCILIATION (2) BREAKUP OF VALUATION OF CLOSING STOCK (3) BREAKUP OF PURCHASE OF GRAPES (4) BREAKUP OF PURCHASE OF WINE & (5) WORKINGS FOR GROSS PROFIT RA TION FOR TWO YEARS. CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, WE FIND THAT THE SAME ARE REQUIRED TO BE REFERRED TO FILE OF THE AO FOR CHECKING ONLY THE FACTS AND FIGU RES AND IF THEY ARE IN SYNC WITH THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE YEAR. IN THE LIMITED REMAND PROCEEDINGS, 5 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. THE AO SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND 1 IS ALLOWED PRO-TANTO . 5. REGARDING GROUND 2, WE FIND THE SAME REFERS TO T HE ADDITION OF RS. 13,30,834/- TO THE VALUATION OF RAW WINE. BEFORE US, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE AO MADE ERROR IN UNDERSTANDING TH E FACTS RELATING TO THE ISSUE TOO. EXPLAINING THE FACTS AND PROCEDURES OF MAKING RAW W INE BY THE ASSESSEE, IT IS SUBMITTED THAT THE ASSESSEE PURCHASES THE RAW WINE TOO AND, ON PURCHASE, THE RAW WINE STRAIGHT AWAY FIND ITS WAY INTO THE MATURATION CHAMBER STAGE I IN THE PRODUCTION PROCESS. THE SAME IS STORED FOR 12 TO 18 MONTHS BEFORE IT IS CONSIDERED AS STOCK IN WORK-IN- PROGRESS. THEREFORE, THERE IS NO CASE FOR ACCOUNTING OF SOMETHING CALLED CLOSING STOCK IN RAW WINE SEPARA TELY AS ON 31 ST OF MARCH. IN SUPPORT OF THE SAME, ASSESSEE FILED THE DOCUMENTS A ND EXPLANATIONS DEMONSTRATING THE PROCESS AND PROCEDURES OF MAKING THE WINE DURIN G THE HEARING BEFORE US. HAVING FAILED TO UNDERSTAND THE ABOVE, THE AO ENTERED INTO THE WRONG UNDERSTANDING OF THE SAID PROCESS, PROCEDURE AND THE FACTS AND PROCEEDED TO ESTIMATE THE CLOSING STOCK OF RAW WINE AT THE RATE OF 25% OF THE TOTAL PURCHASES OF THE RAW WINE AS ON 31.3.2008 WITHOUT REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT. ON HEARING THE BOTH THE REPRESENTATIVES, WE FIND THERE IS NO CASE FOR A DDITION OF RS 13,30,834/- ON THIS ACCOUNT. WE CANNOT APPROVE THE AOS LINE OF CONCLUS IONS ON THIS ACCOUNT. THEREFORE, IN PRINCIPLE, THE ADDITION CANNOT BE SUSTAINABLE . HOWEVER, CONSIDERING THE PRINCIPLES OF NATURAL JUST ICE AND THE ADDITIONAL WORKING PUT FORWARDED BEFORE US, IN OUR OPINION, IT IS APPROPRIATE TO REMAND THE MATTER TO THE FILE OF THE AO FOR EXAMINING THE FACT S AND FIGURES ONLY. AO IS DIRECTED TO NOT TO REPEAT THE ADDITION MECHANICALLY WHEN THE RE IS NO CASE FOR REJECTING THE 6 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. BOOKS AND THE EXPLANATIONS AND THE WHEN THE ADDITIO NAL EVIDENCES FURNISHED BEFORE US ARE IN SYNC WITH THE BOOKS OF ACCOUNTS. ACCORDIN GLY, WE ORDER FOR REVERSAL OF THE DECISION OF THE CIT(A) ON THIS ISSUE. THUS, GROUND 2 IS ALLOWED PRO-TANTO . 6. REGARDING GROUND 3 RELATING TO THE ADDITION ON A CCOUNT OF CONSULTANCY CHARGES OF RS 11,02,605/- OUT OF THE GROSS CLAIM OF RS 15,63,287/-, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID AMOUNT WAS PAI D TO M/S LABORATORIE VINICOLE. FURTHER, LD COUNSEL SUMMED UP BY STATING THAT THE S AID ADDITION WAS MADE BY THE AO HOLDING THAT THE SAME PERTAINS TO THE PRIOR PERIOD . FACTUALLY, THE ASSESSEE RECEIVED CERTAIN SERVICES FROM THE AFORESAID PERSON AND INCURRED TOTAL SUM OF RS 15,63,287/-. HOWEVER, IN THE ASSESSMENT PROCEEDINGS , AO NOTED THAT A COUPLE OF INVOICES AMOUNTING TO EUROS 10,627/- INCURRED IN CO NNECTION WITH THE VISIT OF MR ROLLANDOS VISIT AND IT PERTAINS TO EARLIER YEARS. FURTHER, IN CONNECTION WITH CLAIM OF EUROS 7622 OUT OF EURO 15,245/-, AO CONCLUDED THA T IT ALSO BELONGS TO THE EARLIER PERIOD. IN THIS REGARD, BEFORE US, LD COUNSEL SUBM ITTED IN WRITING THAT THE LIABILITY IS CRYSTALLED ONLY DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEE FOLLOWS MERCANTILE SYSTEM ACCOUNTING. THEREFORE, THE CLAIM IS ALLOWABLE UNDER CONSIDERATION. AS PER THE ASSESSEE, THE LIABILITY IS CRYSTALLED ON LY ON 26/3/2008 AND THEREFORE, THE SAME FULLY ALLOWABLE. 7. ON HEARING BOTH THE PARTIES ON THIS ISSUE, WE FI ND THERE IS NO ISSUE ABOUT THE GENUINENESS OF THE EXPENDITURE. ONLY DISPUTE BETWEE N THE PARTIES ON THIS ISSUE RELATES TO PROPER/RELEVANT ASSESSMENT YEAR, IT PERT AINS TO FOR ALLOWING THE CLAIM OF THE ASSESSEE. IN OUR VIEW, THE LAW IS SETTLED ON TH IS ISSUE THAT NORMALLY, THE DATE OF INVOICE DECIDES THE YEAR OF ITS TAXABILITY WHEN THE ASSESS EE UNDISPUTEDLY FOLLOW THE MERCANTILE SYSTEM OF ACCOUNTING. IF THE BILLS ARE F ACTUALLY RAISED ON 26.3.08, THE 7 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. RELEVANT AY 2008-09 IS APPROPRIATE FOR TAXING THE S AME OR ALLOWING THE CLAIM. FURTHER, IF THE BILLS ARE RAISED IN AN AY AND THE S AME ARE DELIVERED TO THE ASSESSEE BELATEDLY, THE ASSESSEE IS UNDER OBLIGATION TO EXPL AIN THE DELAY TO THE SATISFACTION OF THE AO. THEREFORE, WE FIND IT APPROPRIATE TO DIRECT THE AO TO EXAMINE THE RELEVANT FACTS, DATES, BILLS RELATING TO THIS ISSUE AND ALLO W THE SAME CONSIDERING THE FACTS PLACED BEFORE US. ACCORDINGLY, THE GROUND 3 IS ALLOWED FOR STATISTICAL PURPOSE. BEFORE PARTING WITH THIS ORDER, WE FIND THE AO NEED S TO UNDERSTAND THE ASSESSEE-SPECIFIC METHOD OF ACCOUNTING AND ALSO SPE CIALISED MANUFACTURING PROCESS OF THE WINE TOGETHER WITH VARIOUS STAGES INVOLVED T HEREIN. ALL FRIVOLOUS, %GE BASED AND ADHOC ADDITIONS AND HIGH PITCHED ASSESSMENT OF EVERY KIND SHOULD BE AVOIDED IN MAKING OF THE ASSESSMENT 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED PRO-TANTO . ITA NO. 241/MUM/2014 9. THE GROUNDS OF THE APPEAL BY THE REVENUE IS EXTRACT ED AS UNDER: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING OR ACCEPTING THE ADDITIONAL EVID ENCES FURNISHED BY THE ASSESSEE BEFORE HIM WITHOUT APPRECIATING THE FACT T HAT THE SAME WERE NOT PRODUCED BEFORE THE AO AT THE TIME OF ASSESSMENT PR OCEEDINGS, OBJECTED TO BY THE AO IN REMAND REPORT AND HENCE WAS IN VIOLATION OF RULE 46A OF THE I.T. RULES'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY AO ON AC COUNT OF PRODUCTION EXPENSES RELATING TO EARLIER YEAR AS WELL AS PAYMEN TS MADE BEFORE THEY ENTERED INTO AN AGREEMENT'. 3.1 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THERE WERE REASONABLE NEXUS B ETWEEN THE EXPENDITURE WHICH WERE INCURRED FOR BUSINESS PURPOSE DISALLOWED BY THE AO ON ACCOUNT OF ADVERTISING & SALES PROMOTION EXPENSES'. 3.2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE ADVERTISEMENT AND PROMOTION E XPENSES RELYING UPON THE DECISION IN THE CASE OF SARDA PLYWOOD IND. LTD. VS CIT (1999) 238 ITR 354 (CAL.) AND CIT VS DELHI CLOTH & GENERAL MILLS CO. (1999) 2 40 ITR 9 (DELHI)'. 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING ADDITION ON ACCOUNT OF CULTIVATIO N EXPENSES WHEN BOTH DURING ASSESSMENT AND FIRST APPEAL PROCEEDINGS NO DOCUMENT ARY EVIDENCE WAS PRODUCED TO ESTABLISH GENUINENESS'. 8 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. 5. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE STAFF EXPENSES RELYING UPON T HE ADDITIONAL EVIDENCE AND REMAND REPORT DESPITE THE OBJECTION BY THE AO IN RE MAND REPORT. 6. 'ON THE FACTS AND IN THE CIRCUMSTANCES 0 E CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION U/ S 68 OF THE I T. ACT MADE ON ACCOUNT OF UNEXPLAINED CASH CREATION BY THE WAY OF RIGHT SHARE '. 7. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF L OW GP STATING THAT THE BOOKS OF ACCOUNTS AUDITED AND AUDITORS REPORT U/S 44AB CO MPLIED EVEN THOUGH THE BOOKS OF ACCOUNTS NOT AUDITED BY THE AUDITOR CA AND PENALTY PROCEEDINGS U/S 271B WAS INITIATED BY THE AO'. 10. THE GROUND NO.1 RELATES TO ADMITTING OF THE ADDITIO NAL EVIDENCE BY THE CIT(A) IN VIOLATION OF RULE 46A OF THE I.T. RULES. ON HEAR ING BOTH THE PARTIES, WE FIND THE SAID GROUND IS GENERAL IN NATURE AS SUCH, REVENUE F AILED TO DEMONSTRATE THE REASONS FOR INVOKING THE RULE 46A OF THE I.T. RULES. REGARD ING ADDITIONAL EVIDENCES, WE FIND THE CIT(A) CALLED FOR REMAND REPORT FROM THE AO AS PER THE PROCEDURE BEFORE ADMITTING AND MAKING USE OF THE SAME DURING THE ADJ UDICATION OF APPEAL BY HIM. THEREFORE, THE PRINCIPLE OF NATURAL JUSTICE ARE DUL Y HONOURED BY THE CIT(A). THUS, WE FIND NO VIOLATION TO THE PROVISIONS OF THE RULE 46A OF THE I.T. RULES. THEREFORE, GROUND NO.1 STANDS DISMISSED . 11. GROUND NO.2 RELATES TO PRODUCTION EXPENSES . THE ASSESSEE CLAIMED AMOUNT OF RS. 44,21,322/- ON THIS ACCOUNT. THE SAME WAS PA ID TO M/S GREEN GOLD WINE PVT. LTD. DURING THE ASSESSMENT PROCEEDINGS, THE AO CALL ED FOR NATURE AND RELEVANT DETAILS. IN SUPPORT OF THE CLAIM OF THESE EXPENSES, THE ASSESSEE SUBMITTED VARIOUS SUPPORTIVE EVIDENCES AND DOCUMENTS IN ADDITION TO T HE COPIES OF THE AGREEMENTS DATED 10.01.2007 AND 22.11.2007. ASSESSEE SUBMITTED THAT THE PAYMENTS ARE MADE STRICTLY IN ACCORDANCE WITH THE CONTENTS OF THE SAI D AGREEMENTS. AFTER CONSIDERING THE SAID DOCUMENTS, THE AO CAME T O THE CONCLUSION THAT THE FIRST AGREEMENT DATED 10.01.2007 IS NOT VALID ONE. ACCORDINGLY, THE EXPENSES CLAIMED PRIOR TO 22.11.2007 AMOUNTING TO RS. 29,36,536/- WE RE DISALLOWED. 9 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. DURING THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) EXAMINED THE BOOKS OF ACCOUNTS AND THE MANNER OF PAYMENTS, AND CONFIRMATI ON LETTERS FILED BY THE RECIPIENT COMPANY AND CAME TO THE CONCLUSION THAT THE AGREEME NTS IN QUESTION ARE VALID. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS FULLY AL LOWED. AGGRIEVED WITH THE SAME, THE REVENUE IS IN APPEAL BEFORE US. LD DR FOR THE REVENUE MENTIONED THAT THE LETTER FRO M THE RECIPIENT COMPANY IS A FRESH EVIDENCE WHICH WAS NOT PLACED BEFORE THE AO. PER CONTRA, THE ASSESSEES COUNSEL SUBMITTED THAT THE SAID DOCUMENT WAS REMANDED TO THE FILE OF THE AO AND THE AO OBJECTED TO ACCEPTING THE SAID DOCUMENT AS A SSESSEE HAS NO ACCEPTABLE REASON FOR PRODUCING THIS DOCUMENT BELATEDLY IGNORI NG THE OBJECTIONS OF THE AO, THE CIT(A) ADMITTED THE SAME IN VIEW OF ITS RELEVANCE F OR DECIDING THE ISSUE BEFORE HIM. ACCORDINGLY, AS STATED IN PARA 9.2 OF THE ORDER OF THE CIT(A), THE CIT(A) HELD THAT THE AO DISALLOWED THE SAME WITHOUT HAVING ANY SUSTAINAB LE EVIDENCE. THEREFORE, THE CIT(A) GRANTED RELIEF RELYING ON THE AGREEMENTS, BO OKS OF ACCOUNTS, CONFIRMATION LETTERS FROM M/S GREEN GOLD WINE PVT. LTD. ETC. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA I.E. 9.2 IS EXTRACTED AS UNDER : 9.2 FROM THE ABOVE FACTS, IT CAN BE SEEN THAT THE TRANSACTION OF PAYMENT OF PRODUCTION CHARGES IS VERIFIED IN THE BOOKS OF ACCO UNT OF THE APPELLANT, CONFIRMED BY THE TRANSACTING PARTY AND SUPPORTING D OCUMENTS FOR THE TRANSACTIONS ARE VERIFIED FROM BOTH THE PARTIES. TH EREFORE, UNDER SUCH CIRCUMSTANCES, THE SAME CANNOT BE DISALLOWED MERELY ON THE SUSPICION AND BY REJECTING A PARTICULAR DOCUMENT-AGREEMENT - PARTICU LARLY SO WHEN, THE ACCOUNT BOOKS, LEDGER ACCOUNTS OF BOTH THE PARTIES AND CONF IRMATION CARRIED OUT DURING ASSESSMENT/REMAND, PROCEEDINGS IS EXISTING IN SUPPO RT OF THE SAID EXPENDITURE. THEREFORE, I FIND THAT THE DISALLOWANCE MADE BY THE AO IS BASELESS BECAUSE THE SAID TRANSACTION IS DULY RECORDED, VERIFIED BY TRAN SACTING PARTIES AND IS RELATED TO THE BUSINESS OF THE APPELLANT. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDITION AND THEREFORE, GROUND NO.1 IS ALLOWED. WE FIND THAT THAT AO HAS NOT DISPUTED THE GENUINENE SS OF THE EXPENDITURE CLAIMED BY THE ASSSESSEE. AO MERELY RAISED A TECHNICAL OBJE CTION AND WE FIND THE SAME IS UNSUSTAINABLE ON MERITS. CONSIDERING THE ABOVE, WE ARE OF THE VIEW THE RELIEF 10 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. GRANTED BY THE CIT(A) FOR THE REASONS MENTIONED IN THE PARAGRAPHS EXTRACTED ABOVE, ARE FAIR AND REASONABLE. THE CONCLUSIONS DRA WN IN THE IMPUGNED ORDER ON THIS ISSUE DO NOT CALL FOR ANY INTERFERENCE. ACCORD INGLY, THIS GROUND OF THE REVENUE IS DISMISSED . 12. GROUND NO.3 RELATES TO THE CLAIM OF EXPENDITURE ON ACCOUNT OF ADVERTISEMENT AND SALES PROMOTION EXPENSES. RELEVANT FACTS INCLUDES THAT THE ASSESSEE CLAIMED THE PAYMENT OF RS 3,77,85,644/- IN THE P&L A/C. THIS AMOUNT WAS PAID TO BRINDCO, NEW DELHI. THE ASSESSEE OUTSOURCED BRINDCO FOR THE PURPOSE OF ADVERTISING AND SALES PROMOTION. THE AO CALLED FOR THE DETAILS DURING THE ASSESSMENT PROCEEDINGS AND CAME TO THE CONCLUSION THAT THE ASS ESSEE SEPARATELY PAID THE SUM AMOUNTING TO RS. 3,10,19,830/- ON ACCOUNT OF COMMIS SION. FURTHER, THE PRESENT PAYMENT OF RS. 3,77,85,644/- IS UNCALLED FOR AND TH E IMPUGNED CLAIM OF EXPENSE BY THE ASSESSEE ON THIS ACCOUNT IS ON HIGHER SIDE. FUR THER, THE AO CAME TO THE CONCLUSION ALLOWING ONLY 50% OF THE SAID RS. 3,77,8 5,644/- SHOULD MEET THE ENDS OF THE JUSTICE. ACCORDINGLY, AO MADE ADDITION OF RS. 1 ,88,67,821/- I.E. 50% OF RS. 3,77,85,644/-. THE AO CAME TO THE CONCLUSION THAT T HE SAID AMOUNTS CONSTITUTES THE EXCESSIVE AND UNREASONABLE AMOUNT PAID TO BRINDCO. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSE E SUBMITTED THAT THE BRINDCO IS NOT A RELATED CONCERN OF THE ASSESSEE AN D THE PAYMENT MADE BY THE ASSESSEE IS AS PER THE TERMS AND CONDITIONS SPECIFI ED IN THE AGREEMENT, WHICH WAS VALIDLY ENTERED INTO BY BOTH THE PARTIES. THE PAYME NTS ARE AT ARM LENGTH. HE ALSO REASONED THAT EXCESSIVENESS AND UNREASONABLENESS AR E NOT THE PARAMETERS TO BE CONSIDERED UNDER THE PROVISIONS OF SECTION 37 OF TH E ACT. FURTHER, THE CIT(A) CONSIDERED THE AOS ARGUMENT JUSTIFYING THE CLAIM O F THE ASSESSEE FOR WHOLE A SUM OF RS. 3,77,85,644/-. AS PER THE DISCUSSION GIVEN IN P ARA 10.4 TO 10.6, THE CIT(A) CAME 11 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. TO THE CONCLUSION THAT THE CLAIM OF THE ASSESSEE IS PROPER AND THE ADDITION BY THE ASSESSEE IS UNSUSTAINABLE. ACCORDINGLY, HE GRANTED RELIEF TO THE ASSESSEE. BEFORE US LD DR RELIED ON THE ORDER OF THE AO AND WAS CRITICA L OF THE CONCLUSIONS OF THE CIT(A). PER CONTRA, LD AR FOR THE ASSESSEE SUBMITTED THAT T HE CLAIM IS MADE U/S 37 OF THE ACT AND THE AO REJECTED THE CLAIM OF THE ASSESSEE ON TH IS ACCOUNT AND HIS REASONING WAS CENTRED AROUND THE EXCESSIVENESS AND UNREASONABILI TY, WHICH IS THE LANGUAGE OF THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT AND NOT THE LANGUAGE OF SECTION 37 OF THE ACT. WE FIND THE PARTIES OF THE TRANSACTION ARE UNR ELATED AND NOT SPECIFIED PERSONS WITHIN THE MEANING OF THE SAID SECTION. WE FIND THE TRANSACTION IS DONE IN AN UNCONTROLLED ENVIRONMENT AND BETWEEN TWO UNRELATED PARTIES. IN THAT CASE, THERE IS NO SCOPE FOR EXCESS PAYMENTS. IT IS NOT CASE OF THE AO THAT THE SAID EXCESS AND UNREASONABLE PORTION OF THE PAYMENT, IF ANY, WAS RE TURNED TO THE ASSESSEE BY WAY OF CASH. THEREFORE, WE FIND THE CONCLUSIONS DRAWN BY T HE CIT(A) ON THIS ISSUE IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENC E. ACCORDINGLY, THIS PART OF THE GROUND OF THE REVENUE IS DISMISSED . 13. GROUND NO.4 RELATES TO CULTIVATION EXPENSES, THE RELEVANT FACTS ARE THAT THE ASSESSEE CLAIMED RS. 2,14,45,992/- ON ACCOUNT OF CU LTIVATION EXPENSES. AFTER EXAMINING THE DETAILS AND THE COPIES OF THE AGREEME NTS FILED BY THE ASSESSEE, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE FAILED TO PRODUCE CERTAIN DETAILS IN RESPECT OF THE CLAIMS TO RS. 33,00,563/-. CONSIDERING THE F ACT THAT THERE IS INADEQUATE EVIDENCES IN SUPPORT OF THE CLAIM, THE AO CAME TO T HE CONCLUSION THAT DISALLOWING 25% OF THE CLAIM SHOULD BE FAIR. ACCORDINGLY, HE DI SALLOWED A SUM OF RS. 53,61,968/- I.E. 25% AS OF RS. 2,14,45,992/-. THE CIT(A) CONSID ERED THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND ALSO CONSIDERED THE AGREEMENTS AND BUY BACK 12 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. AGREEMENTS AND DELETED THE ENTIRE ADDITION AS PER T HE DISCUSSION GIVEN IN PARA 11.1 TO 11.4 OF THE CIT(A) ORDER. THE CIT(A) IS OF THE V IEW THAT THERE IS NO RATIONAL TO ESTIMATE THE EXPENDITURE WHEN THE BOOKS OF ACCOUNTS ARE NOT REJECTED VALIDLY AS PER THE PROVISIONS OF SECTION 145(3) OF THE ACT. THE CI T(A) HELD THAT THE FARMERS ARE IDENTIFIABLE WITH A LAND HOLDINGS RECORDS. AGGRIEVE D WITH THE SAME, THE ASSESSEE IS IN APPEAL BEFORE US. AFTER HEARING ARGUMENTS OF BOTH THE COUNSELS, WE FIND THAT THE ADDITION MADE BY THE AO ON THIS ACCOUNT IS PURELY A CASE OF ADHOCISM, WHIMSICAL AND ESTIMATIONS BASED ON SURMISES. AO IS NOT FAIR IN NO T CONSIDERING THE BOOK RESULTS WITHOUT REJECTING THE SAME VALIDLY U/S 145(3) OF TH E ACT. IT IS NOT THE CASE OF THE AO THAT BOOKS OF NOT COMPLETE OR NOT ACCURATE. AO HAS NOT MADE OUT ANY CASE TO DEMONSTRATE THE CLAIM OF THE ASSESSEE IS NOT GENUIN E AND THEY ARE NOT ALLOWABLE U/S 37 OF THE ACT. AS SUCH, AO FAILED TO JUSTIFY WHEN HE ADOPTED FIXED RATE OF 25% FOR DISALLOWANCE. NO COMPARABLE CASES ARE ALSO CITED. I N OUR VIEW, THERE IS NO JUSTIFICATION FOR ARRIVING AT THE RATE OF 25% ADOPT ED BY HIM. THERE IS NO REASON WHY THE AGREEMENTS WITH THE IDENTIFIABLE FARMERS/CULTIV ATORS ARE NOT HONOURED. WE CANNOT APPROVE SUCH RANDOM ADDITIONS FACED ON THE W EIRD AND UNSUSTAINABLE REASONS. IN THAT SENSE, THE ORDER THE CIT(A) ON THI S ISSUE IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED . 14. GROUND NO.5 RELATES TO THE CLAIM ON ACCOUNT OF STAFF EXPENSES . THE ASSESSEE CLAIMED A SUM OF RS. 36,57,830/- ON THIS A CCOUNT AS AN ALLOWABLE EXPENDITURE. AFTER EXAMINING THE DETAILS DURING THE ASSESSMENT PROCEEDINGS, THE AO CAME TO THE CONCLUSION THAT PART OF THE ABOVE EXPEN SES ARE RELATABLE TO THE STAFF WORKING IN THE MARKETING DIVISION OF THE COMPANY. T HEREFORE, THE AO IS OF THE VIEW 13 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. THAT, WHEN MARKETING AND SALES PROMOTION WORKS ARE WHOLLY AND ENTIRELY OUTSOURCED FROM M/S BRINDCO AND COMPANY, NEW DELHI, THERE IS N O JUSTIFICATION FOR MAKING SEPARATE CLAIM ON ACCOUNT OF STAFF EXPENSE. THEREFO RE, HE RESTRICTED THE DISALLOWANCE TO 20% OF THE CLAIM ON ADHOC BASIS. BEFORE THE CIT(A), THE ASSESSEE MADE VARIOUS SUBMIS SIONS AND JUSTIFIED THAT THE STAFF EXPENDITURE DO NOT RELATE THE STAFF OF TH E MARKETING DIVISION OF THE ASSESSEE. THE CIT(A) ANALYSED THE DETAILS AND THE B REAK UP PROVIDED AND EVENTUALLY DELETED THE ENTIRE ADDITION. THE CIT(A) IS OF THE O PINION THAT THE STAFF WELFARE EXPENSES RELATABLE TO THE STAFF IN MARKETING DEPART MENT WAS NOT CLAIMED IN THIS ACCOUNT. AGGRIEVED WITH THE ABOVE, THE REVENUE IS I N APPEAL BEFORE US. AFTER HEARING BOTH THE COUNSELS, WE FIND THAT THE A DDITION MADE BY THE AO IS NOT BASED ON ANY CREDIBLE EVIDENCE OR STRONG REASON ING AND BASIS. WE FIND THAT IT IS A MATTER OF FACT THAT THERE IS NO OVERLAPPING OF TH E EXPENDITURE. THE EXPENDITURE IS UNCONNECTED TO THE STAFF OF THE MARKETING AND SALES PROMOTION ACTIVITIES. THEREFORE, THE CONCLUSION DRAWN BY THE CIT(A) IS FAIR AND REAS ONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE RELEVANT GROUND OF THE REVENUE IS DISMISSED . 15. GROUND NO.6 RELATES TO THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREATION BY WAY OF RIGHT ISSUE U/S. 68 OF THE ACT. RELEVANT FACTS INCLUDE THAT, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE W ENT FOR RIGHTS ISSUE TO M/S HINDUSTAN EXPORT AND IMPORT LTD . AND RAISED AN AMOUNT OF RS. 1.4 CRORES @ RS. 10 PER RIGHT SHARE. THE AO MADE ADDITION FOR WANT OF D ETAILS AND EXPLANATION. HOWEVER, AO IGNORED THE FACT THAT THE SAID RIGHTS ISSUE IS CASE OF CONVERSION OF THE OUTSTANDING LOAN TO THE RIGHT ISSUE OF 1.4 LAKHS SHARES TO THE SAID M/S HINDUSTAN EXPORT AND IMPORT LTD. THE ASSESSEE SUBMITTED THE P ROVISION OF SECTION 68 OF THE ACT 14 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. IS NOT APPLICABLE TO THIS KIND OF ADDITIONS. THE AO CONSIDERED THE SAME AND HELD THAT PROVISIONS OF SECTION 68 APPLY EVEN TO THE SHARE AP PLICATION MONEY TRANSACTIONS. HE ACCORDINGLY MADE THE ADDITION OF RS. 1.4 CRORES. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSE E SUBMITTED THAT THE ASSESSEE TOOK LOAN IN THE PAST FROM M/S HINDUSTAN E XPORT AND IMPORT LTD (HEIL). AND IN SUPPORT, THE ASSESSEE FILED THE CONFIRMATION TOO. THE CIT(A) REMANDED THIS CONFIRMATION TO THE FILE OF THE AO AND THERE WAS NO ADVERSE FINDING OF FACT ABOUT THE CONTENTS OF THE CONFIRMATION. IN THE REMAND PROCEED INGS, THE ASSESSEE SUBMITTED THAT THIS LOAN WAS TAKEN IN EARLIER YEARS AND WHAT HAS HAPPENED IN THE YEAR UNDER CONSIDERATION IS ONLY CONVERSATION OF THE SAID LOAN INTO EQUITY BY WAY OF RIGHT ISSUE TO THE CREDITOR AND SQUIRED UP THE LOAN TRANSACTION. A S PER THE ASSESSEE, SUCH TRANSACTIONS ARE OUTSIDE THE PROVISIONS OF SECTION 68 OF THE ACT. THE CIT(A) ACCEPTED THE SAME AND GRANTED RELIEF TO THE ASSESSEE AS PER THE DISCUSSION GIVEN IN PARAGRAPH/SUB-PARAGRAPHS OF PARAGRAPH 15 OF IMPUGNE D ORDER. BEFORE US, LD DR FOR THE REVENUE WAS CRITICAL OF TH E CONCLUSION OF THE CIT(A) ON THIS ISSUE AND HE RELY HEAVILY ON THE PROVISION S OF SECTION 68 OF THE ACT. PER CONTRA, LD AR FOR THE ASSESSEE SUBMITTED THAT WHEN THE LOA N TRANSACTION WITH THE CREDITOR- THE HEIL, WAS NOT DOUBTED, WHEN THE IDEN TITY AND CREDITWORTHINESS ARE NOT IN DISPUTE, THE TRANSACTION OF CONVERSION OF LOAN I NTO THE RIGHT ISSUE IS OUTSIDE THE PROVISIONS OF SECTION 68 OF THE ACT. FURTHER, WE PE RUSED THE CONTENTS OF THE PARAGRAPHS 15 AND ITS SUBPARAGRAPHS AND FIND THE CI T(A) ANALYSED THE PROVISIONS OF SECTION 68 OF THE ACT, CONSIDERED THE REMAND REPORT OF THE AO DATED 11.7.2012, WHERE AO SILENTLY ACCEPTED THE CLAIM OF THE ASSESSE E, RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS AND EVENTUALLY HELD THAT THE CREDIT IN THE BOOKS RELATE TO THE EARLIER 15 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. AYS AND NOT OF THE YEAR UNDER CONSIDERATION. WE FIN D HE SUMMED UP IN PARA 15.3 OF HIS ORDER THAT THERE IS NO CASE FOR INVOKING THE PR OVISIONS OF SECTION 68 OF THE ACT TO THESE TRANSACTION OF CONVERSION OF LOAN INTO THE RI GHTS ISSUE. THEREFORE, IN OUR OPINION, THE FINDING OF THE CIT(A) IS FAIR AND REAS ONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE ON THIS ISSUE. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE STANDS DISMISSED . 16. THE LAST GROUND RELATES TO THE G.P. ESTIMATION AND THE ADDITION OF RS. 1.09 CRORES ON THIS ACCOUNT. IN THE ASSESSMENT PROCEEDIN G, THE AO NOTED THAT THE G.P. SHOWN BY THE ASSESSEE IS 38% FOR THE AY 2008-09, WH EREAS THE G.P. IN EARLIER YEARS, THE AVERAGE TO 46.33%. CONSIDERING THE FACT THAT T HERE IS FALL IN G.P. FOR AY 2008-09, THE AO PROCEEDED TO ADD G.P. ADDITION AMOUNTING TO RS. 1.09 CRORES I.E. THE ADDITIONAL 5% OF THE SALES. THE CIT(A) DELETED THE SAME VIDE DISCUSSION IN PARAGRAPH 17.3 AND 17.4 OF HIS ORDER. IT IS THE REASONING OF THE CIT(A) THAT THE AO CANNOT RESORT TO ESTIMATION WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND ALSO AUDIT REPORT FURNISHED BY THE ASSESSEE. BEFORE US, LD DR SUBMITTED THE ABOVE FACTS RELATING TO THE FALL IN GP OF THE YEAR UNDER CONSIDERATION AND PLEADED FOR CONFIRMING THE VIEWS OF THE AO. PER CONTRA, LD AR FOR THE ASSESSEE ARGUED VEHEMENTLY AND RELIED HEAVILY ON THE ORDER AND FINDING OF THE CIT(A) IN PARA 17 AND ITS SUB-PARAGR APHS. AFTER HEARING PARTIES AND ON PERUSAL OF THE CONTENTS OF THE PARA 17.1 TO 17.4, W E FIND THE CIT(A) CONSIDERED THE REVISED WORKING OF THE GP OF 64.14% FOR THE YEAR AN D CALLED FOR REMAND REPORT FROM THE AO BEFORE GRANTING THE RELIEF TO THE ASSESSEE O N THIS ACCOUNT. CIT(A) CONCLUDED THAT THE AO ACCEPTED THE REVISED WORKING OF THE GP OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. CONSIDERING THE SAME, WE ARE O F THE OPINION, THE ORDER OF THE 16 ITA NOS. 7038/M/13, 241/M/14 & C.O. 69/M/16 M/S GROVER VINEYARDS LTD. CIT(A) IS FAIR AND REASONABALE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THIS GROUND OF THE REVENUE IS DISMISSED . 17. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . C.O. NO. 69/MUM/2016 TO START WITH, WE SHALL TAKE UP THE CONDONATION ISS UE FIRST. WE FIND THE REASONS GIVEN BY THE ASSESSEE IN CONNECTION WITH THE FACT OF BELA TED FILING OF THE CROSS OBJECTION IS NOT SUPPORTED BY ANY THIRD PARTY EVIDENCES. NO AFFI DAVIT OR EVIDENCE FROM THE CONCERNED COUNSEL /EMPLOYEES OR CONNECTED PERSONS W ERE BROUGHT TO OUR NOTICE. THEREFORE, CONSIDERING THE ABSENCE OF SUBSTANTIAL O R ADEQUATE REASON, IN OUR VIEW, THE DELAY IS NOT CONDONABLE. ASSESSEE FILED TO EXP LAIN THE EACH DAY OF DELAY. ACCORDINGLY, THE C.O. FILED BY THE ASSESSEE IS DISM ISSED AS NOT ADMITTED. 18. IN THE RESULT, C.O. IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2016. SD/- SD/- (PAWAN SINGH) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; !' 07.09.2016 # . ./ SK . PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ ( ) / THE CIT(A)- 4. $ / CIT 5. %&' ##() , () , / DR, ITAT, MUMBAI 6. '*+ / GUARD FILE. % # //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI