MEGA STAR WOOD P.LTD, MUMBAI V. ITO 5(2)(3), MUMBAI

ITA 7479/MUM/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3384 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRAJIT SINGHD R
• Keywords: Opportunity of being heard
• Section: 143(3); 69

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 7479 /MUM/2010 ( / ASSESSMENT YEAR : 2007-08) MEGA STAR WOOD PVT. LTD., 6 ROSHAN MAHAL, 70 NB MARG GRANT ROAD (WEST), MUMBAI 400 007. / V. ITO 5(2)-3, MUMBAI ./ PAN : AAECM9961B ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY NONE REVENUE BY : SHRI CHANDRAJIT SINGH(D.R.) / DATE OF HEARING : 8-03-2016 / DATE OF PRONOUNCEMENT : 03-06-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE COMPANY, BEING ITA NO. 7479/MUM/2010, IS DIRECTED AGAINST THE APPELLATE OR DER DATED 27-09-2010 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)- 9, MUMBAI (HEREINAFTER CALLED THE CIT(A) ), FOR THE ASSESSM ENT YEAR 2007-08, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARI SING FROM THE ASSESSMENT ORDER DATED 21-12-2009 PASSED BY THE LEARNED ASSESS ING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT,1 961 (HEREINAFTER CALLED THE ACT). ITA 7479/MUM/2010 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE COM PANY IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL , MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN DISMISSING THE APPEAL AND CONFIRMING THE ADDITIONS MA DE BY THE LEARNED ASSESSING OFFICER. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITIONS WITHOUT CONSIDERING THE SAME ON MERITS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 1,51,974/- BY WAY OF DISALLOWANCE OF INTEREST. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 11,62,184/- AS UNEXPLA INED PURCHASES. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ISSUING DIRECTIONS TO ENHANCE INCOME WITHOUT ANY VALID BASIS OR AUTHORITY AND WITHOUT GIVING A VALID NOTICE AND FAIR OP PORTUNITY TO THE ASSESSEE. 6. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) IS ARBITRARY, ILLEGAL AND INVALID. 3. AT THE TIME OF HEARING BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESSEE COMPANY WHEN THE APPEAL WAS CALLED FOR HEA RING. IT WAS OBSERVED BY THE BENCH THAT THERE WERE SIMILAR NON-APPEARANCE BY THE ASSESSEE COMPANY ON EARLIER OCCASIONS WHEN THE APPEAL WAS CALLED FOR HEARING ON EARLIER OCCASIONS. THEREFORE, WE PROCEED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LEARNED D.R.. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS DEALER IN TIMBER AND PLYWOOD. THE ASSESSEE COMPANY HAS SHOWN PURCHASES OF RS. 55,59,306/- AND SALES OF RS. 33,88,002/- , WHILE TH E NET PROFIT OF RS. 54,626/- WAS DECLARED IN THE P&L ACCOUNT FOR THE PR EVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. AS PER TH E DETAILS OF SUNDRY ITA 7479/MUM/2010 3 CREDITORS FILED DURING THE COURSE OF ASSESSMENT PRO CEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT, THE ASSESSEE COMPAN Y HAD MADE TOTAL PURCHASES OF RS. 67,21,490/- FROM VARIOUS PARTIES A ND HENCE THERE WAS A DIFFERENCE OF RS. 12,62,184/- IN THE PURCHASES SHOW N AS PER THE P&L ACCOUNT AND THE DETAILS OF THE SUNDRY CREDITORS SUBMITTED. THE ASSESSEE COMPANY WAS ASKED TO EXPLAIN THE DIFFERENCE AND IN REPLY THE AS SESSEE COMPANY SUBMITTED THAT THERE IS A TYPING ERROR WHICH HAS OCCURRED AS THE MISCELLANEOUS PURCHASES SHOULD BE RS. 28,29,668/- INSTEAD OF RS. 38,05,716/-. THE ASSESSEE COMPANY FURNISHED THE FOLLOWING DETAILS:- (A) AMBIKA TIMBER MART RS. 5,93,392/- (B) OTHER MISC. PURCHASES RS. 4,36,276/- (C) MAKLAI TIMBER MART RS. 18,00,000/- THE ASSESSEE COMPANY, HENCE, SUBMITTED THAT EARLIER THERE WAS A TYPING ERROR WHILE SUBMITTING THE DETAILS AND THE TOTAL PURCHASE S MADE WAS RS. 55,59,306 ONLY AND NOT RS. 67,21,490/- AS SHOWN IN THE STATEM ENT BECAUSE THE MISCELLANEOUS PURCHASES WERE WRONGLY SHOWN AS RS. 3 8,05,716/- INSTEAD OF RS. 22,36,276/-. THE A.O. CONSIDERED THE SUBMISSIO N OF THE ASSESSEE COMPANY AND OBSERVED THAT FROM THE STOCK STATEMENT ON 31 ST MARCH, 2007 SUBMITTED TO THE SARASWAT BANK , WHEREIN THE PURCHA SES OF TIMBER/PLYWOOD MADE BY THE ASSESSEE COMPANY IN MARCH, 2007 WERE TO THE EXTENT OF RS. 15,33,241/- WHILE AS PER LEDGER ACCOUNT VERIFICATIO N THE PURCHASES PARTIES SUBMITTED DURING ASSESSMENT PROCEEDINGS FOLLOWING P URCHASES WERE MADE BY THE ASSESSEE COMPANY IN THE MONTH OF MARCH, 2007 WH ICH WERE AS FOLLOWS:- A) AMBIKA TIMBER MART RS. 5,93,392/- B) ACE TRADERS RS. 2,63,175/- C) MAKLAI TIMBER MART RS. 17,38,952/- D) PLY TEAK TRADERS RS. 1,82,212/- ITA 7479/MUM/2010 4 TOTAL RS. 27,77,731/- IN VIEW OF THE ABOVE DETAILS, THE CONTENTION OF THE ASSESSEE COMPANY THAT THERE WAS A TYPING ERROR IN REPORTING THE FIGURES O F SUNDRY CREDITORS WAS NOT ACCEPTED BY THE A.O. . THE A.O. ALSO OBSERVED FROM THE DETAILS OF PURCHASES AS WELL AS THE SUNDRY CREDITORS THAT THE LIST OF SUNDR Y CREDITORS SHOWS THE PURCHASES OF RS. 5,93,392/ FROM THE AMBIKA TIMBER M ART , WHEREAS NO SUCH PURCHASES HAD BEEN SHOWN IN THE LIST OF PURCHASES F ILED DURING THE ASSESSMENT PROCEEDINGS WITH THE A.O. . SIMILARLY, IN THE LIST OF PURCHASES FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE PURCHASES SHOWN AT RS. 4,07,256/- WERE MADE FROM KANARA WOOD & PLYWOOD INDUSTRIES LTD., BUT THIS NAME DOES NOT APPEAR IN THE LIST OF SUNDRY CRE DITORS FILED ON 8 TH OCTOBER, 2009. ON GOING THROUGH THE COPY OF VAT RETURN FOR THE FINANCIAL YEAR 2006- 07 FILED BY THE ASSESSEE COMPANY, THE TOTAL PURCHAS ES WERE SHOWN AT RS. 8,58,419/- FOR THE QUARTER FROM 1.1.2007 TO 31.3.20 07 AS AGAINST PURCHASES OF RS. 27,77,731/- MADE IN THE MONTH OF MARCH, 2007 . THUS, IT WAS OBSERVED BY THE A.O. THAT THE ASSESSEE COMPANY HAS FURNISHED INCORRECT DETAILS OF PURCHASES AND TRIED TO JUSTIFY IT IN THE NAME OF TY PING ERROR AND IN VIEW OF THE ABOVE , THE A.O. ADDED THE DIFFERENCE IN AMOUNT OF RS. 11,62,184/- TO THE TOTAL INCOME OF THE ASSESSEE COMPANY AS THE DETAILS SUBMITTED WITH THE BANK AS WELL AS THE PURCHASES IN P&L ACCOUNT DID NOT TAL LY, VIDE ASSESSMENT ORDERS DATED 21-12-2009 PASSED U/S 143(3) OF THE ACT. SIMILARLY, THE A.O. OBSERVED THAT THE ASSESSEE COMP ANY HAS DEBITED AN AMOUNT OF RS. 1,51,974/- TOWARDS BANK INTEREST ON C ASH CREDIT FACILITY AVAILED WITH THE SARASWAT CO-OP. BANK, PRABHADEVI BRANCH. IT WAS SEEN BY THE A.O. FROM THE DETAILS FILED THAT THE ASSESSEE COMPANY OB TAINED OD FACILITY FROM SARASWAT CO.OP. BANK WHICH COMMENCED ON 28 TH SEPTEMBER, 2006 AND THE AMOUNT OF RS. 18,00,000/- WAS TRANSFERRED TO THE SI STER CONCERN OF THE ASSESSEE COMPANY I.E. M/S MAKLAI TIMBER MART ON 28 TH SEPTEMBER, 2006 ITA 7479/MUM/2010 5 DIRECTLY AND THE CC LIMIT OF THE SAID FIRM MAKLAI T IMBER MART WAS CLOSED. IT WAS OBSERVED BY THE AO FROM THE LEDGER ACCOUNT THAT THE ASSESSEE COMPANY HAS MADE PURCHASES FROM MS/ MAKLAI TIMBER MART ONLY ON 31 ST MARCH, 2007 WHICH INDICATED THAT THE BANK OD FACILITY HAD BEEN USED BY THE SISTER CONCERN M/S MAKLAI TIMBER MART AND FOR THIS FACILITY THE AS SESSEE COMPANY INCURRED INTEREST EXPENDITURE AND THE SAME WAS CLAIMED IN TH E P&L ACCOUNT. THE ASSESSEE COMPANY WAS SHOW CAUSED BY THE AO AS TO W HY BANK INTEREST ON CASH CREDIT OF RS. 1,51,974/- SHOULD NOT BE DISALLO WED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY AS THE FUNDS HAVE NO T BEEN USED FOR THE PURPOSES OF BUSINESS OF THE ASSESSEE COMPANY. IN R EPLY, THE ASSESSEE COMPANY SUBMITTED THAT THE PAYMENT HAS BEEN MADE TO THE MAKLAI TIMBER MART ON 28 TH SEPTEMBER, 2006 BY THE ASSESSEE COMPANY AND THE CO PIES OF DELIVERY CHALLAN AGAINST THE GOODS SUPPLIED BY MAKL AI TIMBER MART WERE SUBMITTED. THE ASSESSEE COMPANY SUBMITTED THAT M/S MAKLAI TIMBER MART DELIVERED THE GOODS TO THE ASSESSEE COMPANY AND THE ASSESSEE COMPANY SOLD IT TO THE CUSTOMERS AND SINCE THE DELIVERY OF THE G OODS CONTINUES TILL FEBRUARY, 2007, THE BILL WAS NOT SUPPLIED TO THE ASSESSEE CO MPANY AND WHEN M/S MAKLAI TIMBER MART ISSUED THE BILL IN THE MONTH OF MARCH 2007, THE SAME WAS ENTERED ACCORDINGLY BY THE ASSESSEE COMPANY. THE A .O. REJECTED THE CONTENTIONS OF THE ASSESSEE COMPANY AND HELD THAT T HE CASH CREDIT FACILITY WAS SANCTIONED TO THE ASSESSEE COMPANY FOR AN AMOUN T OF RS. 18 LACS AND THE SAME WAS TRANSFERRED TO M/S MAKLAI TIMBER MART ON 2 8 TH SEPTEMBER, 2006. THE ASSESSEE COMPANY HAS MADE PURCHASES OF RS. 17,3 8,952/- FROM M/S MAKLAI TIMBER MART ONLY ON 31 ST MARCH, 2007 WHICH MEANS THAT THE FUNDS WERE USED BY THE M/S MAKLAI TIMBER MART TO CLOSE IT S CASH CREDIT LIMIT AND NOT FOR THE BUSINESS OF THE ASSESSEE COMPANY WHICH WAS CLEARLY MENTIONED IN THE SANCTION LETTER OF THE BANK. IN VIEW OF THIS, THE A.O. DISALLOWED THE INTEREST OF RS. 1,51,974/- AND ADDED THE SAME TO TH E TOTAL INCOME OF THE ASSESSEE COMPANY , VIDE ASSESSMENT ORDERS DATED 21. 12.2009 PASSED BY THE AO U/S 143(3) OF THE ACT. ITA 7479/MUM/2010 6 5.AGGRIEVED BY THE ASSESSMENT ORDERS DATED 21.12.20 09 PASSED BY THE AO U/S 143(3) OF THE ACT, THE ASSESSEE COMPANY CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). 6. BEFORE THE LEARNED CIT(A), THE ASSESSEE COMPANY SUBMITTED THAT IT HAS BEEN MAINTAINING BOOKS OF ACCOUNT AS PER LAW WHICH ARE DULY AUDITED. ALL DETAILS WERE FURNISHED BEFORE THE A.O. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT. THERE WAS AN TYPING ERROR IN THE STATEMENT OF SUNDRY CREDITORS W ITH REGARD TO THE AGGREGATE OF PURCHASES MADE BY THE ASSESSEE COMPANY. HOWEVER , THE A.O. MADE AN ADDITION OF RS. 11,62,184/- AS UNEXPLAINED PURCHASE S BEING THE DIFFERENCE BETWEEN THE TWO FIGURES I.E. THE PURCHASES IN THE P &L ACCOUNT AND ANOTHER IS AGGREGATE OF PURCHASES AS PER THE STATEMENT GIVEN B Y THE ASSESSEE COMPANY DURING ASSESSMENT PROCEEDINGS. THE EXPLANATIONS RE GARDING THE ERROR COMMITTED BY THE ASSESSEE COMPANY HAS BEEN DULY EXP LAINED BUT STILL THE ADDITION HAS BEEN MADE WAS THE CONTENTION OF THE AS SESSEE COMPANY. THE ASSESSEE COMPANY SUBMITTED THAT THE TOTAL PURCHASES AS PER THE BOOKS OF ACCOUNT IS RS. 55,59,306/- AND THE SAME HAS BEEN DE BITED IN P&L ACCOUNT. THE SOURCE OF THE SAID PURCHASES IS EXPLAINED AND T HERE IS NO QUESTION OF ANY UNEXPLAINED PURCHASES U/S 69 OF THE ACT. THE ASSES SEE COMPANY SUBMITTED THAT THE ADDITION OF RS. 11,62,184/- IS PATENTLY WR ONG AND UNJUST. THE LEARNED CIT(A), HOWEVER, REJECTED THE CONTENTIONS O F THE ASSESSEE COMPANY AND OBSERVED THAT THE A.O. DISALLOWED THE DIFFEREN CE IN PURCHASE OF RS. 11,62,184/- WHICH WERE MADE OUT OF BOOKS BECAUSE TH E PURCHASES DISCLOSED DO NOT TALLY WITH THE PURCHASES CLAIMED. NAMES OF CERTAIN PARTIES FROM WHOM THE PURCHASES WERE CLAIMED, BUT THEIR NAMES WERE NO T EFFECTED IN THE LIST OF SUNDRY CREDITORS AND THE ASSESSEE COMPANY IS TRYING TO EXPLAIN IT AS A TYPING MISTAKE. NO STOCK REGISTER AND QUANTITATIVE DETAILS WERE MAINTAINED AND AS SUCH IT IS NOT POSSIBLE TO VERIFY THE QUANTITATIVE DIFFERENCES. THE ASSESSEE ITA 7479/MUM/2010 7 COMPANY HAS SHOWN PURCHASE DETAILS FROM ITS SISTER CONCERNS M/S MAKLAI TIMBER MART ON 31 ST MARCH, 2007 AMOUNTING TO RS. 17,38,951/-. THE ADVA NCE OF RS. 18 LAKHS WAS GIVEN TO THE SISTER CONCERN ON 28 TH SEPTEMBER, 2006 WHICH HAS BEEN CLAIMED AS AGAINST THE PURCHASES MAD E ON THE LAST DAY OF MARCH, 2007 AND IN SUPPORT THE ASSESSEE COMPANY HAS FILED COPIES OF DELIVERY CHALLAN. THE LEARNED CIT(A) OBSERVED THAT THESE DO CUMENTS WERE NOT SIGNED BY ANY PERSON OF M/S MAKLAI TIMBER MART AND IN FACT NO MATERIAL WERE PURCHASED FROM FEBRUARY 2007 TO MARCH 2007. THUS, THE LEARNED CIT(A) DIRECTED THE A.O. TO EXAMINE THE AFFAIRS OF THIS CO NCERN M/S MAKLAI TIMBER MART FOR THE ASSESSMENT YEARS 2006-07 & 2007-08 AND IN CASE IF ANY IRREGULARITY IS FOUND, ACTION SHOULD BE TAKEN AGAIN ST BOTH THE CONCERNS. IT WAS ALSO DIRECTED BY THE LEARNED CIT(A) TO THE A.O. TO ADD G.P. ON THE UNRECORDED PURCHASES BECAUSE SOME PROFIT MIGHT HAVE BEEN EARNED BY THE ASSESSEE COMPANY BY SELLING THESE PURCHASES OUT OF BOOKS. IT WAS ALSO DOUBTED BY THE LEARNED CIT(A) THAT THE ASSESSEE COM PANYS ACCOUNT ARE MANIPULATED AND DID NOT DISCLOSE THE TRUE AFFAIRS O F THE BUSINESS OF THE ASSESSEE COMPANY TO THE REVENUE. IN VIEW OF ALL TH ESE, THE LEARNED CIT(A) HELD THAT THE A.O. HAS PASSED A SPEAKING ORDER AND THE AO WAS QUITE JUSTIFIED IN MAKING THE ADDITION OF RS. 11,62,984/- AS UNEXP LAINED AND UNRECORDED PURCHASES AND MAKING DISALLOWANCE OF INTEREST ON AD VANCES GIVEN TO THE M/S MAKLAI TIMBER MART . THE LEARNED CIT(A) UPHELD THE ASSESSMENT ORDER DATED 21-12-2009 PASSED BY THE A.O. U/S 143(3) OF THE ACT , VIDE APPELLATE ORDERS OF THE LEARNED CIT(A) DATED 27-09-2010. 7. AGGRIEVED BY THE APPELLATE ORDERS DATED 27-09-2 010 OF THE LEARNED CIT(A), THE ASSESSEE COMPANY IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 8. THE LEARNED D.R. STRONGLY SUPPORTED THE APPELLAT E ORDERS OF THE LEARNED CIT(A) WHILE HE FAIRLY ADMITTED THAT NO NOTICE WAS SERVED ON THE ASSESSEE ITA 7479/MUM/2010 8 COMPANY BEFORE ENHANCING THE ASSESSMENT BY THE LEAR NED CIT(A) , WHEREBY DIRECTION WERE ISSUED TO THE A.O. TO ADD GP ON THE UNRECORDED PURCHASES. 9. WE HAVE HEARD THE LEARNED D.R. AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THERE IS A DIFFER ENCE BETWEEN THE PURCHASES SHOWN AS PER THE P&L ACCOUNT AND THE SUNDRY CREDITO RS DETAILS FILED BY THE ASSESSEE COMPANY BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT. THE A.O. OBSERVED FROM THE STOCK STATEMENT ON 31 ST MARCH, 2007 SUBMITTED TO THE SARASWAT BANK WHEREIN THE PURCHASES OF TIMBER/PLYWOOD MADE BY THE ASSESSEE COMPANY IN MARCH, 2007 WERE TO THE EXTENT OF RS. 15,33,241/- W HILE AS PER LEDGER ACCOUNT VERIFICATION THE PURCHASES MADE BY THE ASSE SSEE COMPANY IN MARCH, 2007 WERE DIFFERENT I.E. RS. 27,77,331/-. WE FIND T HAT THE PURCHASE DETAILS FROM ITS SISTER CONCERNS M/S MAKLAI TIMBER MART ON 31-03-2007 AMOUNTING TO RS. 17,38,951/- WHILE THE BANK LOAN VIDE OD OF R S. 18 LAKHS WAS TRANSFERRED TO THE SISTER CONCERN ON 28 TH SEPTEMBER, 2006 WHICH HAS BEEN CLAIMED AS AGAINST THE PURCHASES MADE ON THE LAST D AY OF MARCH, 2007 AND IN SUPPORT THE ASSESSEE COMPANY HAS FILED COPIES OF DE LIVERY CHALLANS WHICH ARE NOT SIGNED BY ANY PERSON. THE ASSESSEE COMPANY SUBM ITTED THAT THE DIFFERENCE OF RS. 12,62,184/- IN THE PURCHASES SHOW N AS PER THE P&L ACCOUNT AND THE SUNDRY CREDITORS WAS DUE TO THE TYPING ERRO R WHICH HAS OCCURRED AS THE MISCELLANEOUS PURCHASES SHOULD BE RS. 28,29,668 /- INSTEAD OF RS. 38,05,716/-. THE ASSESSEE COMPANY IS TRYING TO JUST IFY THE ABOVE DIFFERENCES DUE TO THE TYPING ERROR. WE HAVE ALSO FOUND THAT THE LEARNED CIT(A) HAS NOT GIVEN ANY NOTICE TO THE ASSESSEE COMPANY BEFORE ENH ANCING THE ASSESSMENT IN THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) , WHEREAS DIRECTIONS WERE GIVEN BY THE LEARNED CIT(A) TO THE A.O. TO ADD SOME GP ON THE UNRECORDED PURCHASES ON THE GROUNDS THAT THE ASSESSEE COMPANY MIGHT HAVE EARNED PROFIT BY SELLING THE PURCHASES OUT OF BOOKS. IN O UR CONSIDERED VIEW, INTEREST OF JUSTICE WILL BE BEST SERVED IF ALL THE ISSUE OF ADDITIONS MADE BY THE A.O. ARE ITA 7479/MUM/2010 9 TO BE SET ASIDE TO THE FILE OF THE AO FOR DE NOVO D ETERMINATION OF ALL THE ISSUES ON MERIT. ACCORDINGLY, WE DIRECT THE A.O. TO DECID E ALL THE ISSUE DE- NOVO AFTER TAKING INTO ACCOUNT THE RELEVANT EVIDENCES AND EXPL ANATIONS SUBMITTED BY THE ASSESSEE COMPANY WITH RESPECT TO THE PURCHASES MADE BY THE ASSESSEE COMPANY KEEPING IN VIEW OF THE STOCK MOVEMENT VIS- -VIS SALES MADE BY THE ASSESSEE COMPANY AND THEN ARRIVE AT THE ACTUAL DIFF ERENCES WHICH REMAINED AFTER QUANTITATIVE RECONCILIATION OF THE STOCK INCL UDING EXAMINATION AND VERIFICATION OF GENUINENESS OF THE PURCHASES MADE F ROM SISTER CONCERN MAKLAI TIMBER MART. THE ASSESSEE COMPANY IS DIRECTED TO F ILE RELEVANT AND COGENT MATERIAL AND EXPLANATIONS BEFORE THE A.O. WITH RESP ECT TO THE PURCHASES OF MATERIAL WITH NECESSARY QUANTITATIVE RECONCILIATION AND ITS GENUINENESS, WHICH SHALL BE ADMITTED BY THE AO . NEEDLESS TO SA Y THAT THE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD BE GIVEN BY THE AO TO THE ASSESSEE COMPANY IN ACCORDANCE WITH PRINCIPLES OF NATURAL JU STICE AND IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE COMPANY IN ITA N0. 7479/MUM/2010 FOR THE ASSESSMENT YEAR 2007-08 IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3RD JUNE , 2016. # $% &' 03-06-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 03-06-2016 [ ITA 7479/MUM/2010 10 .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI