ACIT, Noida V. M/s Narayan International, Noida

ITA 859/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6183 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER, AND SHRI O.P. KANT, ACCOUNTANT MEMBER, ITA NO. 859/DEL /2011 ASSESSMENT YEAR: 2006 - 07 THE A.C.I.T VS. M/S NARAYAN INTERNATIONAL CIRCLE, NOIDA A - 56, GROUND FLOOR, SECTOR - 4 NOIDA PAN : AACFN 3948 A [APPELLANT] [RESPONDENT] DATE OF HEARING : 03.03.2016 DATE OF PRONOUNCEMENT : 31 .03.2016 ASSESSEE BY : SHRI ROHIT JAIN, ADV MS. DEEPASHREE RAO, CA DEPARTMENT BY : SHRI P. DAM KANUNJNA, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GHAZIABAD, DATED 29/11/2010 IN FIRST APPEAL NO. 120/2008 - 09/GZB - NOIDA FOR A.Y. 2006 - 07. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1 . 1. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS BY ALLOWING RELIEF OF RS .8,50,000/ - TO THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDIT 2 2 U/S 68 OF THE I.T. ACT, WITHOUT APPRECIATING THE FACTS MENTIONED IN THE ASSESSMENT ORDER. 2 . THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY ALLOWING RELIEF OF RS. 80,25,560/ - TO THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CRED ITS IN THE SHAPE OF STOCK TRANSFERRED, BY TREATING SUFFI CIENT STOCK OF READY AND DYED FABRIC WAS ACTUALLY AVAILABLE WITH NATH INTERNATIONAL INSTEAD OF APPRECIATING THE FACTS MENTIONED IN THE ASSESSMENT ORDER. 3 . THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY A LLOWING RELIEF OF RS. 9,35,100/ - TO TH E ASSESSEE ON ACCOUNT OF NON GENUINE RENT, BY TREATING IT SATISFACTORY USE O F THE FOUR PREMISES FOR VARIOUS BUSINESS PURPOSES, WITHOUT APPRECIATING THE FACTS MENTIONED IN THE ASSESSMENT ORDER. 4 . THAT THE ORDER OF THE LD. CIT(A) BEING ERRONEOUS IN LAW AND ON THE FACTS DESERVES TO BE SET - ASIDE AND THE ORDER OF THE AO BE RESTORED. 3 . BRIEFLY STATED, THE FACTS GIVING RISE TO THIS APPEAL ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM HAVING THREE PARTNERS, ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF HOME FURNISHING TEXTILE ARTICLES LIKE QUILT, CUSHION COVERS, CURTAINS, ETC. FOR T HE RELEVANT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 17.10.2006 DECLARING AN INCOME OF RS. 2,98,38,714/ - . ASSESSMENT WAS COMPLETED VIDE ORDER DATED 30.12.2008 U/S 143(3) OF THE INCOME TAX ACT, 1961 [FOR SHORT, 'THE ACT'] ASSESSING T HE INCOME OF THE ASSESSEE AT RS. 3 3 3,96,49,370/ - AGAINST THE INCOME OF RS. 2,98,38,714/ - . GROUND NO. 1 THE LD. AR SUBMITTED THAT THE THREE PARTNERS NAMELY, SHRI ONKAR NATH AGRAWAL, SHRI PRAVEEN KUMAR AGRAWAL AND SHRI VIPIN KUMAR AGRAWAL WERE REGULARLY MAINTAINING THEIR INDIVIDUAL BOOKS OF ACCOUNTS AND FILING THEIR BALANCE SHEET/STATEMENT OF AFFAIRS WITH THE INCOME TAX DEPARTMENT ALONGWITH THEIR RETURN OF INCOME. THE AO NOTICED THAT THE FOLLOWING AMOUNTS WERE FOUND CREDITED IN THE CAPITAL ACCOUNTS OF TH E PARTNERS: SHRI VIPIN KUMAR AGRAWAL - RS. 3,00,000/ - SHRI PRAVEEN KUMAR AGRAWAL - RS. 3,50,000/ - SHRI ONKAR NATH AGRAWAL - RS. 2,00,000/ - NOT SATISFIED WITH THE EXPLANATION TENDERED BY THE ASSESSEE, THE AO MADE ADDITION OF THE AFOREMENTIONED AMOUNT S. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER VERIFYING THE SOURCES OF EACH OF THE PARTNERS, DELETED THE AFORESAID ADDITION MADE BY THE AO. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER OF TH E LD. CIT(A). 4 4 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. DR SUPPORTING THE ACTION OF THE AO CONTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 8,50,000/ - ON ACCOUNT OF CAPI TAL INTRODUCTION BY THE THREE PARTNERS. 5. REPLYING TO THE ABOVE, THE LD. AR SUBMITTED THAT IN THE PRESENT CASE, THE IDENTITY IS UNDISPUTED AND THE CREDIT WORTHINESS STOOD ESTABLISHED AS COPY OF THE INCOME TAX PARTICULARS, BANK ACCOUNT OF THE PARTNER WERE PLACED ON RECORD. THE LD. AR SUBMITTED THAT THE ASSESSEE NOT ONLY PROVED THE SOURCE OF CREDIT BUT ALSO SOURCE OF SOURCE EVENTHOUGH TECHNICALLY NOT REQUIRED TO DO SO. THERE WAS NO DISPUTE ABOUT THE GENUINENESS OF THE TRANSACTION. THE LD. AR LASTLY CONTE NDED THAT WHEN THE ASSESSEE HAS EVEN EXPLAINED THE SOURCE OF SOURCE, THEN ADDITION COULD ONLY HAVE BEEN MADE IN THE HANDS OF THE PARTNER AND NOT THE ASSESSEE. IN SUPPORT OF THIS CONTENTION, THE LD. AR HAS RELIED ON VARIOUS DECISIONS INCLUDING THE OFT QUOT ED JUDGMENT OF THE ALLABAHAD HON'BLE HIGH COURT IN THE SUNDERLAL JAIN VS. CIT REPORTED IN 117 ITR 316 [ALL]. 5 5 6. ON CAREFUL CONSIDERATION OF THE ABOVE FROM THE FIRST APPELLATE ORDER, WE NOTE THAT THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAD EXPLAINED THE SOURCES TO BE OUT OF CASH WITHDRAWN BY THE PARTNERS FROM THEIR BANK ACCOUNTS AND OUT OF REGULAR CASH IN HAND. THE SAID CONTENTION OF THE ASSESSEE WAS SUPPORTED BY COPIES OF PARTNER S BANK PASS BOOK AND ALSO CASH BOOK AS MAINTAINED BY THEM IN REGULAR COURSE OF BUSINESS . THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THE SOURCE OF EACH AND EVERY AMOUNT CREDITED IN THE CAPITAL ACCOUNT OF THE THREE PARTNERS. THE EXPLANATION OF THE ASSESSEE IS FULLY SUPPORTED BY DOCUMENTS PLACED IN THE PAPER BOOK IN THE FORM OF BANK PASS BOOK, EXTRACTS FROM THE REGULAR BOOKS OF ACCOUNTS OF RESPECTIVE PARTNERS AND THE FINANCIAL STATEMENTS OF THE PARTNERS. THEREFORE, THE LD. CIT(A) WAS QUITE JUSTIFIED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS. 8,50,000/ - MADE BY THE AO. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER ON THIS COUNT AND DISMISS GROUND NO. 1 RAISED BY THE REVENUE. GROUND NO. 2 7. VIDE GROUND NO.2, THE DEPARTMENT HAS DISPUTED THE DELETION OF ADDITION OF RS. 80,25,560/ - BY THE LD. CIT(A) WHICH WAS MADE BY THE 6 6 AO ON ACCOUNT OF UNEXPLAINED CREDIT IN THE CAPITAL CONTRIBUTION OF THE ASSESSEE FIRM. THE AO ACCEPTED THE TRANSFER OF GRAY FABRIC STOCK OF RS. 36,03,260/ - BUT DID NOT ACCEPT THE TRANSFER OF 1,89, 517 MTRS OF READY AND DYED FABRIC AGGREGATING TO RS. 80,25,560/ - . OBSERVING THAT THE READY AND DYED FABRIC WAS NOT ACTUALLY AVAILABLE WITH M/S NATH INTERNATIONAL AND THEREFORE AND THE PARTNERS COULD NOT HAVE TRANSFERRED THE SAME TO THE ASSESSEE FIRM, THE AO MADE THE ADDITION OF UNEXPLAINED STOCK OF RS. 80,25,560/ - AS UNEXPLAINED CREDIT. HOWEVER, IN APPEAL, THE LD. CIT(A) RECORDING A FINDING THAT THE STOCK OF READY AND DYED FABRIC WAS ACTUALLY AVAILABLE WITH M/S NATH INTERNATIONAL, DELETED THE ADDITION MA DE BY THE AO. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. DR SUPPORTED THE ACTION OF THE AO AND SUBMITTED THAT THE LD. CIT(A) WAS NOT RIGHT IN ALLOWING RELIEF TO THE ASSESSEE. 9. THE LD. AR SUBMITTED WRITTEN BROAD PROPOSITION IN S UPPORT OF HIS ORAL ARGUMENTS WHICH HAVE BEEN REPRODUCED VERBATIM HEREUNDER: 2.5 DURING THE YEAR UNDER CONSIDERATION, M/S. NATH INTERNATIONAL KEPT PHYSICAL STOCK OF GRAY, READY AND DYED FABRIC AT THE FOLLOWING OFFICE AND FACTORY PREMISES: A 56, SECTOR 4, NOIDA; 2/46, LOHAI ROAD, FARRUKHABAD 7 7 2 . 5 BEFORE COMING TO THE DETAILS OF STOCK AVAILABLE WITH M/S. NATH INTERNATIONAL, IT MAY BE PERTINENT TO DESCRIBED BRIEFLY THE MANUFACTURING OPERATIONS CARRIED OUT BY THE SAID FIRM, M/S. NATH INTERNATIONAL. 2 . 6 THE BASIC RAW MA TERIAL REQUIRED IN THE MANUFACTURE OF THE ABOVE ITEMS IS CLOTH, COTTON, CONSUMABLES, ETC. PURCHASE OF CLOTH IS CARRIED OUT FROM THE NOIDA OFFICE. THE CLOTH REQUIRED FOR MANUFACTURING IS REQUIRED TO BE DYED AND PROCESSED AND THE SAME IS SENT FOR DYING TO TH E VARIOUS INDEPENDENT CONTRACTORS. IN CERTAIN CASES, THE DYED CLOTH (READY FABRIC) IS ALSO PURCHASED AND IN THAT CASE THE DYING ACTIVITY IS NOT REQUIRED. THE DYED CLOTH IS SENT FROM NOIDA OFFICE TO THE FACTORY AT FARUKHABAD AND NOIDA WHERE CUTTING OF THE C LOTH FOR MANUFACTURING AS PER THE DIMENSIONS AND THE REQUIREMENTS OF THE FINAL PRODUCT TAKE PLACE. AFTER CUTTING, THE CLOTH IS FABRICATED AND QUILTED. FABRICATION AND QUILTING OPERATIONS, SUBSEQUENT TO CUTTING OF THE CLOTH, ARE MAINLY OUTSOURCED TO VARIOUS INDEPENDENT CONTRACTORS IN FARUKHABAD AND NOIDA AND PART OF SUCH OPERATIONS ARE ALSO CARRIED OUT AT THE FACTORY OF THE RESPONDENT IN FARUKHABAD AND NOIDA. ON RECEIPT OF FABRICATED AND QUILTED MATERIAL FROM THE CONTRACTORS, THE GOODS ARE FINISHED AND PACKE D AT THE FACTORY PREMISES AT FARUKHABAD AND NOIDA. 2 . 7 M/S. NATH INTERNATIONAL WAS REGULARLY MAINTAINING THE FOLLOWING STOCK REGISTERS FOR RECORDING EACH AND EVERY MOVEMENT OF STOCK: - A . RAW MATERIAL STOCK REGISTER IS MAINTAINED AT NOIDA OFFICE WHEREIN ALL THE DAILY QUANTITATIVE DETAILS OF RECEIPTS OF RAW CLOTH/ DYED CLOTH, ETC., ARE ENTERED INTO. IN THE SAID STOCK REGISTER DISPATCHES TO THE FARUKHABAD AND TO VARIOUS CONTRACTORS ARE ALSO RECORDED; B . SEPARATE STOCK REGISTER IS MAINTAINED AT THE NOIDA OFFICE FOR DAI LY RECEIPT OF DYED CLOTH/ MATERIAL FROM THE CONTRACTORS TO WHOM RAW MATERIAL/CLOTH IS SENT FOR DYING. DAILY DISPATCHES TO 8 8 THE FARUKHABAD AND TO VARIOUS CONTRACTORS ARE ALSO RECORDED THEREIN; C . STOCK REGISTER IS MAINTAINED AT FARUKHABAD WHEREIN DAILY RECEIPT OF RAW MATERIAL/ CLOTH FROM THE NOIDA OFFICE ARE RECORDED. IN THE SAID REGISTER THE QUANTITATIVE DETAILS OF CLOTH/ OTHER MATERIAL AFTER CUTTING IS SEPARATELY RECORDED AND THE MATERIAL/ CLOTH SENT FOR FABRICATION/QUILTING IS ALSO RECORDED; D . SEPARATE STOCK RE GISTER IS MAINTAINED FOR FINISHED GOODS WHEREIN DAILY QUANTITATIVE DETAILS OF PRODUCTION OF EACH FINISHED ITEMS IS RECORDED. 2 . 8 THE FACT THAT M/S. NATH INTERNATIONAL HAD SUFFICIENT STOCK OF READY/ DYED FABRIC IS EVIDENT FROM THE FOLLOWING: 2 . 9 THE AFORESAID DETAILS ARE AS PER STOCK REGISTERS (RELEVANT EXTRACTS PLACED IN THE PAPER BOOK), WHICH WERE PHYSICALLY PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS CIT(A) AS UNDER: PARTICULARS QUANTITY (MTR.) REMARKS PG.N O. OPENING STOCK OF FABRIC (GRAY AND READY) OF. WAS ASSESSED/; 2,12,821 ACCEPTED IN ASSESSMENT U/S 143(3) FOR THE ASSESSMENT YEAR 2005 - 06 32, 139 - 144, PURCHASES OF FABRIC (GRAY: 3,97,211 MTRS AND READY: 3,31,452 MTRS) 7,28,663 NOT QUESTIONED BY A.O 32 OPENING STOCK READY FABRIC IN FEBRUARY, 06 AT FARRUKHABAD 2,35,907 OUT OF THIS 1,89,517 MTRS WITHDRAWN BY TWO PARTNERS - IGNORED BY AO 36, 84 - 85 CONSUMPTION CHART DURING THE LAST 4 YEARS. CONSUMPTION RATIO OF THE RAW MATERIAL REMAINED CONSTANT 27 9 9 - AO ON 04.12.2008 AND 15.12.2008 - REFER PAGES 92 - 94@94, 95 - 97@97) - CIT(A) (REFER PARA 6.5/ PAGES 11/12 AND PAGE 18 OF CIT(A) ORDER) 2 . 10 NEITHER IN THE ASSESSMENT ORDER NOR IN THE REMAND REPORT, THE ASSESSING OFFICER HAS BEEN'ABLE TO CONTROVERT/ REBUT AFORESAID FIGURES. 2 . 11 APART FROM THE AFORESAID, IT IS FURTHER SUBMITTED THAT M/S NATH INTERNATIONAL, DURING THE RELEVANT PERIOD, WAS ENJOYING A CREDIT LIMIT OF RS.3,50,00,000/ - FROM THE BANK (SANCTION LETTER OF THE BANK IS PLACED AT PAGE 45) AND USED TO SUBMIT MONTHLY STOCK STATEMENT TO THE BANK FOR THE ABOVE LIMITS. TO FURTHER SUPPORT THE EXISTENCE OF STOCK WITH M/S NATH INTERNATIONAL, THE FOLLOWING FURTHER DETAILS/ DOCUMENTS HAVE ALSO BEEN PLACED ON RECORD: PARTICULARS REMARKS PG.NO. STOCK AUDIT REPORT AS ON 30 - 2005 OF M/S. RESHMA & COMPANY, CHARTERED ACCOUNTANTS APPOINTED BY CANARA BANK FOR CONDUCTING THE STOCK AUDIT OF M/S. NATH INTERNATIONAL. INDEPENDENT PHYSICAL VERIFICATION OF STOCK AND INSPECTION OF THE STOCK RECORDS WAS CONDUCTED BY SAID FIRM - REFER STOCK AUDIT REPORT 60 - 80 @76 (POINT NO. 12 - 14), @78 MONTMONTHLY STOCK STATEMENTS SUBMITTED WITH CANARA BANK SAMPLE FOR THE FOLLOWING MONTHS OF APRIL, JUNE, AUGUST, FEBRUARY AND MARCH, PLACED IN THE PAPER BOOK PARTICULAR ATTENTION INVITED TO THE STOCK STATEMENT FOR FEBRUARY, 06 - READY STOCK OF 2,35,907 MTRS AT FARUKHABAD BRANCH 46 - 59 54 10 10 2 . 12 THE AFORESAID DETAILS/ DOCUMENTS, PARTICULARLY THE STOCK REGISTERS, CLEARLY ESTABLISH BEYOND ANY DOUBT, EXISTENCE OF STOCK OF READY AND DYED FABRIC WITH M/S. NATH INTERNATIONAL. THE CONTENTION OF THE ASSESSING OFFICER THAT THE SAID FIRM. M/S. NATH INTERNA TIONAL, DID NOT HAVE SUFFICIENT STOCK OF READY AND DYED FABRIC IS, THUS, IT IS SUBMITTED, PATENTLY ERRONEOUS. 2 . 13 THE ASSESSING OFFICER, IT IS FURTHER SUBMITTED, PROCEEDED TO DRAW INCORRECT CONCLUSION/ INFERENCES MERELY FROM THE MONTHLY DETAILS OF STOCK PURCHASED BY M/S. NATH INTERNATIONAL. THE OBSERVATION OF THE ASSESSING OFFICER THAT SINCE M/S. NATH INTERNATIONAL P URCHASED/ RECEIVED FROM DYERS ONLY 687 MTRS OF READY FABRIC AND DYED FABRIC AND THEREFORE, WAS IN NO POSITION TO TRANSFER STOCK TO THE RESPONDENT IS, IT IS SUBMITTED, PATENTLY ERRONEOUS. 2 . 14 IN COMING TO THE AFORESAID ERRONEOUS CONCLUSION, THE ASSESSING OFFIC ER, IT IS SUBMITTED, COMPLETELY IGNORED TO CONSIDER THE DETAILS OF STOCK OF READY FABRIC AT FARRUKHABAD AND AT NOIDA, DISCUSSED SUPRA. ON PERUSAL OF THE SAID DETAILS, IT WILL KINDLY BE NOTICED THAT THOUGH ONLY 687 MTRS OF NEW STOCK WAS RECEIVED IN THE MONT H OF FEBRUARY, 2006, BUT M/S. NATH INTERNATIONAL HAD FOLLOWING OPENING STOCK IN THAT MONTH: OPENING STOCK (FEB, 06) - MTRS AT NOIDA (39282.70+9370.80) 48,653 AT FARUKHABAD 2,35,907 TOTAL 2,84,560 2 . 15 THE ASSESSING OFFICER FAILED TO APPRECIATE THAT OUT OF THE AFORESAID OPENING STOCK ALREADY AVAILABLE WITH M/S.NATH INTERNATIONAL IN FEBRUARY, 2006, THAT THE PARTNERS WITHDREW THE STOCK AND INTRODUCED THE SAME IN THE RESPONDENT - FIRM. 11 11 2 . 16 IN THE REMAND REPORT DATED 12.08.2010, THE ASSESSING OFFICER MERELY REITERATED THE FINDINGS GIVEN IN THE ASSESSMENT ORDER. A POINT BY POINT REBUTTAL TO THE SAME WAS FILED BEFORE THE CIT(A), PLACED AT PAGES 270 - 276 OF THE PAPER BOOK. 2 . 17 IN THE LIGHT OF THE AFORESAID FACTS, THE ORDER OF THE CIT(A) DELETING THE AD DITION OF RS.80,25,560/ - AS UNEXPLAINED CREDIT CALLS FOR BEING AFFIRMED. 10. PER CONTRA, THE LD. DR SUPPORTED THE ACTION OF THE AO AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. 11. IN THE LIGHT OF THE ABOVE, WHEN WE ANALYSE THE FACTS OF THE PRESENT CASE AND CONCLUSION OF THE LD. CIT(A), THEN WE ARE INCLINED TO HOLD THAT IN THE PRESENT CASE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHEREIN HE HAS CATEGORICALLY HELD THAT SUFFICIENT STOCK OF READY AND DYED FABRIC WAS ACTUALLY AVAILABLE WITH THE P ARENT FIRM M/S NATH INTERNATIONAL OUT OF WHICH 1,89,517 METERS OF STOCK WAS WITHDRAWN BY THE PARTNERS AND WAS INTRODUCED AS THEIR CAPITAL CONTRIBUTION IN THE ASSESSEE FIRM. THE LD. CIT(A) FURTHER HELD THAT THE FINDINGS OF THE AO THAT NO SUCH STOCK WERE AVAILABLE WITH T HE SAID FIRM IS F ACTUALLY INCORRECT AND IN VIEW OF THE ABOVE FACTS NOTED BY THE LD. CIT(A) THE ADDITION 12 12 MADE BY THE AO CANNOT BE HELD AS SUSTAINABLE AND THE FIRST APPELLATE AUTHORITY RIGHTLY ADDED THE SAME . HENCE WE AGREE WITH THE EXPLANATION TENDERED BY THE LD. AR AND CONSEQUENTLY CONCUR WITH THE CONCLUSION ARRIVED AT BY THE LD. CIT(A). ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS COUNT. GROUND NO. 2 OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. GROUND NO. 3 12. COMING TO THE LAST GROUND OF APPEAL RAISED BY THE REVENUE, THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF QUILTS, QUILTED BED COVERS, CUSHION COVERS, TABLE COVERS, ETC. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HELD T HAT THE RENT PAID BY THE RESPONDENT FOR 4 RENTAL PREMISES OUT OF 7 RENTAL PREMISES OCCUPIED BY THE RESPONDENT DURING THE RELEVANT ASSESSMENT YEAR IS NOT GENUINE AND ACCORDINGLY MADE A DISALLOWANCE OF RS.9,35,100/ - . 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER WRONGLY INTERPRETED THE AFORESAID TWO DIFFERENT INFORMATION AND WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD, ARBITRARILY ADDED THE RENT PAID AMOUNTING TO RS . 9,35,100/ - FOR 4 PREMISES TO THE INCOME 13 13 OF THE ASSESSEE. THE LD. AR D ETAILED THE USAGE OF PREMISES IN THE CHART PLACED AT PAGE 165 OF PAPER BOOK. COPY OF THE RENT AGREEMENTS OF ALL THE FOUR PREMISES, COPY OF LEDGER ACCOUNT OF RENT, COPY OF SALES TAX REGISTRATION (FORM 15 FOR BRANCH ADDITION WITH SALES TAX DEPARTMENT), COPY OF ELECTRICITY BILLS PAID BY THE ASSESSEE FOR THE PREMISES WERE PLACED ON RECORD TO SUPPORT HIS CONTENTION. THE CIT(A), AFTER EXAMINING/ VERIFYING THE AFORESAID DETAILS, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE LD. AR SUBMITTED THAT THE AO DISALLOWED AN AMOUNT OF RS. 9,35,100/ - IN RESPECT OF THE FOUR RENTED PREMISES, WHEREAS ACTUAL RENT COMES TO RS.7,95,100/ - INSTEAD OF RS. 9,35,100/ - . THE LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE AO. 14. ON A CAREFUL PERUSAL OF THE ASSESSMENT ORDER, W E FIND THAT THE AO MIXED TWO DIFFERENT TYPES OF INFORMATION AND WRONGLY INTERPRETED THEM AND ARRIVED AT THE CONCLUSION ARBITRARILY WITHOUT GIVING THE ASSESSEE ANY OPPORTUNI TY OF BEING HEARD. FROM THE WRITTEN SUBMISSIONS OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW , IT IS AMPLY CLEAR THAT HT PROPERTY SITUATED AT A - 1, SECTOR 26, NOIDA WAS USED FOR ACTIVITIES, THE PROPERTY SITUATED AT B - 114, SECTOR 5, NOIDA AND KANODIA HOUSE, LOHAI ROAD, FARRUKABAD WERE USED FOR PRODUCTION ACTIVITIES AND THE PROPERTY AT 504A, NAGARJUNA APARTMENTS, MAYUR VIHAR 1, NEW DELHI WAS USED 14 14 FOR OFFICE OF THE ASSESSEE AND ALL FOUR DISPUTED RENT WAS PAD FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. T HESE FACTS HAVE NOT BEEN CONTROVERTED BY THE AO AS WELL AS BY THE LD. SR. DR. HENCE, THE CONCLUSION OF THE LD. CIT(A) IS SUSTAINABLE. WHEN THE ASSESSEE HA D PROVIDED DETAILED USAGE OF PREMISES, WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE CO NCLUSION OF THE FIRST APPELLATE AUTHORITY AND THUS WE UPHOLD THE SAME. ACCORDINGLY, GROUND NO. 3 OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. 15 . IN THE RESULT, THE APPEAL OF THE REVENUE IS JETTISONED. THE ORDER IS P RONOUNCED IN THE OPEN COURT ON 3 1 .03.2016. S D / - S D / - (O.P. KANT) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 1 S T MARCH, 2016 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI