D C Trading, JODHPUR V. DCIT, JODHPUR

ITA 96/JODH/2013

• Counselvise Citation: 9623314 RSA 2013
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R H GOHEL
• Keywords: Bogus purchase; Unexplained investment; Unexplained expenditure; Block assessment; Revised return; Documents seized
• Section: 69C; 143(3); 153A; 68; 69; 145; 27; 132

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 96/JODH/2013 (A.Y. 2008-09) M/S D C TRADING VS. DCIT, KULUPWADI ROAD, BORIALI CENTRAL CIRCLE-1, MUMBAI C/O PARTNER JODHPUR SHRI NAND KISHOARE MALANI MALANI HOUSE, OPP. NEHRU PARK JODHPUR. PAN NO. AADFD2247H (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJENDRA JAIN. DEPARTMENT BY : SH. R.H. GOHEL- DR. DATE OF HEARING : 30/07/2013. DATE OF PRONOUNCEMENT : 30/08/2013. O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE ASSESSEE FOR A.Y. 2008-09 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A), CENTRAL JAIPUR DATED 21/1 2/2012. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE-FIRM DERIVED ITS INCOME FROM BUSINESS. AS A CONSEQUENCE OF SEARCH U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT', FOR SHORT] IN THE CASE OF MALANI GROUP OF JODHPUR ON 12/09/200 7. BLOCK ASSESSMENT WAS FRAMED U/S 153C/153A/13B R.W.S. 143(3) ON 14/12 /2009. IN THIS ORDER, INTER ALIA, ADDITIONS OF RS. 11,23,038/- AND OF RS. 5,67,497/- WERE MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PUR CHASE IN CASH AS DISCUSSED IN PARA 6 OF THE ASSESSMENT ORDER AND ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF GAMBIER, BY UNDER-INVOICING THE SAME, U/S 69 AS DISCUSSED IN PARA 4 OF THE ASSE SSMENT ORDER, RESPECTIVELY. 2.1 THESE ADDITIONS ARE CLAIMED TO BE A PART OF THE SUR RENDER AMOUNT MADE BY SHRI NAND KISHORE MALANI, THE MAIN MAN OF T HE MALANI GROUPS FLAG SHIP. BUT THE A.O. AS WELL AS THE LD. CIT(A) D ID NOT AGREE WITH THE ABOVE CLAIM. BEING AGGRIEVED, THE ASSESSEE HAS FILE D THIS APPEAL BY RAISING THE FOLLOWING GROUNDS:- 1. THAT THE ORDER U/S 250 DATED 21.12.2012 PASSED BY THE LD. CIT(A) IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2008- 09 IS BAD IN LAW AND ON FACTS. 3 2. THAT THE LD. CIT(A), ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, HAS ERRED IN CONFIRMING THE ADDITION OF RS. 11,23,038/- ON ACCOUNT OF UNEXPLAIN ED PURCHASES IN CASH U/S 69 EVEN IF IT WAS EXPLAINED T HAT THE SAID INCOME IS COVERED BY THE SURRENDER OF UNDISCLO SED INCOME IN THE CASE OF NAND KISHORE MALANI. THE SAI D ADDITION DESERVED TO BE DELETED. 3. THAT THE LD. CIT(A), ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, HAS ERRED IN CONFIRMING THE ADDITION OF RS. 5,67,498/- IN RESPECT OF ALLEGED IN VESTMENT IN PURCHASE OF GAMBIER U/S 69 OF THE INCOME-TAX ACT , 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] O N THE BASIS OF EXH. 3 PAGES 43 AND 47 AND PEN DRIVE SEIZED FROM THE PREMISES OF SHRI NAND KISHORE MALANI EVEN IF IT WAS SATISFACTORILY EXPLAINED TO HIM THAT THE SAME IS CO VERED BY SURRENDER OF RS. 22999849/- IN A.Y. 2007-08 MADE BY THE FIRM IN RESPECT OF THE ABOVE YEAR. THE SAID INCOME WAS RELATED TO THE A.Y. IN WHICH IT WAS SURRENDERED AND NOT TO THE A.Y. 2008-09. IN VIEW OF THE ABOVE, THE SAID A DDITION DESERVED TO BE DELETED. 2.2 GROUND NO. 1 OF THIS APPEAL WAS NOT PRESSED. S O THIS GROUND IS DISMISSED AS NOT PRESSED. GROUND NOS. 4 & 5 ARE GE NERAL IN NATURE AND REQUIRED NO SPECIFIC ADJUDICATION. 4 2.3 GROUND NO. 2 IS REGARDING CONFIRMATION OF ADDI TION OF RS. 1123038/- ON ACCOUNT OF UNEXPLAINED PURCHASES IN CA SH U/S 69 EVENIF IT WAS EXPLAINED THAT THE SAID INCOME IS COVERED BY TH E SURRENDER OF UNDISCLOSED INCOME IN THE CASE OF NAND KISHORE MALA NI. 2.4 AT THE VERY OUTSET, THE LD. A.R. ARGUED THAT T HIS GROUND HAS BEEN CONSIDERED IN THE CASE OF SHRI N.K. MALANI BY THIS VERY BENCH VIDE ORDER DATED 7.11.2012 IN ITA NOS. 13 TO 15/JU/2011 FOR A. YS. 2005-06 TO 2007-08 AND THIS AMOUNT HAS BEEN ACCEPTED AS COVERE D IN THE SURRENDERED AMOUNT. 2.5 THE LD. D.R., RELIED ON THE ORDERS OF THE AUTHO RITIES BELOW. 2.6. WE FIND THAT THIS GROUND STANDS COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION GIVEN IN THE CASE OF SHRI N.K. MALA NI BY THIS BENCH VIDE ORDER DATED 7.11.2012 IN ITA NOS. 13 TO 15/JU/2011 FOR A.YS. 2005-06 TO 2007-08 AND THIS AMOUNT HAS BEEN ACCEPTED BY US AS COVERED IN THE SURRENDERED AMOUNT. HENCE, RESPECTFULLY FOLLOWING O UR OWN DECISION IN ASSESSEES OWN CASE, WE ALLOW GROUND NO. 2 OF ASSES SEES APPEAL. 5 3. THE FACTS OF GROUND NO. 3 ARE THAT THE AO INITIA LLY MADE ADDITION OF RS. 5,67,498/- ON ACCOUNT OF UNEXPLAINED EXPENDI TURE ON PURCHASE OF GAMBIER AND THIS ISSUE IS DISCUSSED BY THE AO IN PARA NO. 4 OF ASSESSMENT ORDER. SUBSEQUENTLY THE AO APPLIED PROVI SIONS OF SEC. 145(3) OF IT ACT AND AFTER REJECTING THE BOOKS OF A CCOUNTS MADE TRADING ADDITION OF RS. 636018/-. HOWEVER AS ADDITION OF RS . 567498/ HAS ALREADY BEEN MADE THEREFORE BY ALLOWING BENEFIT OF TELESCOPING FURTHER ADDITION ON ACCOUNT OF TRADING ADDITION WAS MADE AT RS. 68520/. IN THIS MANNER THE TOTAL ADDITION WAS MADE FOR RS. 6,36,018 /- THE ADDITION OF RS. 5,67,498/- HAS BEEN DISCUSSED BY THE AO IN P ARA 4 OF THE ASSESSMENT ORDER WHICH READS AS UNDER: '4. DURING THE COURSE OF SEARCH OPERATION, AT THE R ESIDENCE OF SHRI NAND KISHORE MALANI, TWO PEN DRIVES AND COM PUTER WAS SEIZED BY THE DEPARTMENT ON 12/09/2007 ALONGWIT H SIX PAGES OF FAX MESSAGES RECEIVED BY M/S D.C. TRADING AND SISTER CONCERN M/S DINESH TOBACCO INDUSTRIES AS PER SEIZED EXHIBIT-3, PAGE NO. 33, 43,44,45, 46 & 47 SEND BY M /S BRABOURNE TRADING COMPANY. PAGE NO. 43 & 47 OF EXHI BIT-3 (FORMING PART OF THIS ORDER MARKED AS ANNEXURE- X & Y) CONTAINS THE COMPLETE DETAILS OF TRANSACTION BETWEE N M/S BRABOURNE TRADING LLC, DUBAI AND M/S D.C. TRADING D URING THE PERIOD MAY, 2006 TO DECEMBER, 2006 RELATING TO PURCHASE OF GAMBIER WHICH WAS ACTUALLY BEING SHIPPE D 6 FROM INDONESIA BUT INVOICES SUBMITTED BEFORE THE CU STOM PER PURPORTEDLY ISSUED BY M/S BRABOURNE TRADING LLC , DUBAI AND M/S ALLIANCE IMPEX PTE LTD., SINGAPORE FO R THE PURPOSE OF UNDER VALUING THE SAME. 2.4 ON THE BASIS OF SEIZED EXHIBIT-3 PAGE NO. 43 & 47 (MARKED AS ANNEXURE X & Y COPY OF WHICH IS FORMING PART OF THI S ORDER) AND PRINT OUT OF THE PEN DRIVE (MARKED AS ANNEXURE Z COPY OF WHICH IS FORMING PART OF THIS ORDER) WHICH WAS FOUND AND SEIZED FROM THE RESIDENCE OF SHRI NAND KISHORE MALANI, HE WAS ASKED TO EXPLAIN T HE DETAILS OF ENTRIES CONTAINED THEREIN. SHRI NAND KISHORE MALANI HAS EX PLAINED VIDE QUESTION NOS 24 & 27, WHICH IS GIVEN IN DETAIL AT P AGES 4 AND 5 OF THE LD. CIT(A)S ORDER. THE INFORMATION IN THE SEIZED P APERS WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERAT ION WAS ALSO PASSED ON TO THE DIRECTORATE OF REVENUE INTELLIGENCE. ON THE BASIS OF THESE PAPERS FURTHER ENQUIRIES WERE CONDUCTED BY THE DIRE CTORATE OF REVENUE INTELLIGENCE TO WHOM THE ABOVE INFORMATION WAS PASS ED ON FOR NECESSARY ACTION AT THEIR END FOR TAKING ACTION FOR EVASION OF EXCISE DUTY ON THE ITEMS IMPORTED BY UNDER INVOICING THE SAME AND MAKING PAYMENT THEREAFTER UNDER HAND. THE ADDL. DIRECTOR GENERAL OF DIRECTORATE OF REVENUE INTELLIGENCE, DELHI ZONAL UN IT VIDE ITS SHOW CAUSE NOTICE DRJ F.NO -829/JODHPUR/MISC.I/ 2008/ PT II/ DCT/197 7 DATED 13/02/2009 HAS ALSO TREATED THE TRANSACTION I NVOLVED IN THESE SEIZED PAPERS RELATING TO IMPORT OF GAMBLER BY MAKI NG UNDER INVOICING IMPORT TO EVADE CUSTOM DUTY IN THE HAND OF M/S D.C. TRADING, MUMBAI FOR THE A.Y. 2005-06 TO A.Y. 2008-09 BY OBSERVING T HAT THESE TRANSACTIONS ARE RELATED TO M/S D.C. TRADING, MUMBA I AND ALSO LEVIED DIFFERENTIAL CUSTOM DUTY BY DETERMINING THE ACTUAL ASSESSABLE VALUE AT RS. 8,36,44,739/- AS AGAINST VALUE DECLARED BY T HE ASSESSEE OF RS. 19,07,176/- DECLARED ASSESSABLE VALUE BY THE ASSESS EE AND ALSO LEVIED PENALTY ON THE SAME. THE DRI MADE ENQUIRE OBTAINED THE COPIES OF ALL IMPORT DOCUMENT OF M/S D.C. TRADING VIDE LETTER DAT ED 13/12/2008 AND THE ASSTT. COMMISSIONER OF CUSTOMS, NHAVA SHEVA PRO VIDED PRINT OUT OF 28 BILLS OF ENTRY PERTAINING TO IMPORT OF GAMBLER B Y M/S D.C. TRADING ON 16/12/2008. THE CUSTOM HOUSE AGENT SHRI JANAK C. KOTAK OF M/S BHAKTI CLEFORD PVT. LTD., CHA NO 11/878 SUBMITTED C OPIES OF 30 (THIRTY) BILLS OF ENTRY, THEIR CORRESPONDING BILLS OF LADING , INVOICES, TR-6 CHALLANS ETC., RELATED TO IMPORTS OF GAMBLER BY M/S DCT, UNDER STATEMENT DATED 19.12.2008 RECORDED UNDER SECTION 1 08 OF THE CUSTOMS ACT, 1962. SUBSEQUENTLY, HE ALSO SUBMITTED REMAINING IMPORT DOCUMENTS COMPRISING COPIES OF 04 (FOUR) MORE BILL S OF ENTRY, THEIR CORRESPONDING BILL OF LADING, INVOICES, TR-6 CHALLA NS ETC., VIDE LETTER- DATED 22.12.2008. IN ALL IMPORT DOCUMENTS IN RESPEC T OF 34 (THIRTY FOUR) 8 BILLS OF ENTRY RELATING TO IMPORT OF GAMBIER BY M/S DCT WERE SUBMITTED BY THE SAID CHA. M/S DCT HAD IMPORTED A TOTAL OF 77 3.36 MT OF GAMBLER CLASSIFIABLE UNDER CTH 32019010 FROM TWO OV ERSEAS SUPPLIERS, (653.36 MT FORM M/S BRABOURNE TRADING LLC, DUBAI AN D 120 MT FROM M/S ALLIANCE IMPEX PTE LTD., SINGAPORE), THROUGH JA WAHAR LAI NEHRU CUSTOM HOUSE, JNPT, NHAVA SHEVA, VIDE 34 BILLS OF E NTRY DURING THE PERIOD FROM AUGUST, 2004 TO AUGUST, 2007, BY DECLAR ING TOTAL GIF VALUE OF USD 13,29,700. THE CONSIGNMENTS OF GAMBIER WERE SHIPPED FROM INDONESIA BUT INVOICES SUBMITTED BEFORE THE CUSTOMS WERE PURPORTEDLY ISSUED BY M/S BRABOURNE TRADING LLC, DUBAI, AND M/S ALLIANCE IMPEX PTE LTD., SINGAPORE, FOR THE PURPOSE OF UNDERVALUIN G THE SAME. THE COMPLETE DETAILS OF SUCH IMPORTS BY M/S DCT ARE ENC LOSED AS ANNEXURE 'A' TO THE SHOW CAUSE NOTICE (MARKED AS ANNEXURE-P FORMING PART OF THIS ORDER) OF THE ADDL. DIRECTOR GENERAL, DIRECTOR ATE OF REVENUE INTELLIGENCE, DELHI ZONAL UNIL, NEW DELHI. THE SHOW CAUSE NOTICE ISSUED BY DR. D.D. RISHI, ADDL. DIRECTOR GENERAL, DIRECTOR ATE OF REVENUE INTELLIGENCE, DELHI ZONAL UNIT, NEW DELHI ALONGWITH ORDER PASSED ON 22/07/2009 BY THE SETTLEMENT COMMISSION OF CUSTOM A ND CENTRAL EXCISE. MUMBAI IN SETTLEMENT APPLICATION NO. 28/CUS /RPB/2009-SC (MB)SA(C> 191-199/2009 DATED 20/03/2009 IN CASE OF M/S D.C. TRADING ALSO FORMS PART THIS ORDER (MARKED AS ANNEXURE-AS & AS-1). ON THE 9 BASIS OF THESE ENQUIRIES, THE ADDL. DIRECTOR GENERA L OF DRI HAS TRACED OUT INVOICES RELATING TO A.Y. 2005-06 TO A.Y. 2008 -09 THROUGH WHICH UNDER INVOICING HAS BEEN MADE BY THE ASSESSEE TO T HE EXTENT OF RS. 2,17,37,667/- OF GAMBIER IMPORTED BY HIM FOR WHICH UNDER HAND PAYMENT ALONGWITH SOME SURPLUS MONEY FOR THIS UNDER HAND TRANSACTION HAS BEEN MADE BY HIM. THE COMPLETE DETAILS OF SUCH IMPORT BY M/S D.C. TRADING BETWEEN THE PERIOD 26/08/2004 TO 23/08 /2007 THROUGH 34 INVOICES, WHICH HAS BEEN GATHERED BY THE DEPARTMENT OF REVENUE INTELLIGENCE TO WHOM THE INFORMATION WAS PASSED BY THE INCOME TAX DEPARTMENT. THE TRANSACTION CONTAINED IN THESE 34 I NVOICES BETWEEN THE PERIOD 26/08/2004 TO 23/08/2007 HAS BEEN INVENT ORISED BY THE DEPARTMENT OF REVENUE INTELLIGENCE AND IS MARKED AS ANNEXURE-B. THE ASSESSEE WAS CONFRONTED WITH THE SEIZED MATERIAL AL ONGWITH THE REPORT OF THE ADDL. DIRECTOR GENERAL, DIRECTORATE OF REVEN UE INTELLIGENCE, DELHI ZONE, DELHI DATED 13/02/2009 AND WAS ASKED TO EXPLAIN WHY THE FOLLOWING ADDITIONS BE NOT MADE TO THE INCOME OF TH E ASSESSEE FOR THE A.Y. 2005-06, A.Y. 2006-07, A.Y. 2007-08 & A.Y. 200 8-09 AS UNDER: S. DATE OF INVOICES PERIOD A.Y. NO. OF QTY.IN DIFFERENCE NO. INVOLVED INVOLVE INVOICE S METRIC I N D TONE ASSESSABLE VALUE OF GAMBLER IMPORTED 1. 1 TO 8 OF ANNEXURE - B 05/08/2004 2005 - 06 8 92.46 RS. TO 33,37,280/ - 10 2. 9 TO 1 8 OF ANNEXURE - 13/05/2005 2006 - 07 11 212.78 RS. B TO 88,17,6457 - 3. 19 TO 32 OF 03/04/2006 TO 2007 - 08 13 443.116 RS. 4. ANNEXURE - B 20/12/2008 90,15, 140/ - 4. 33 TO 34 OF 06/07/2007 TO 2008 - 09 2 25 RS. ANNEXURE - B 23/08/2008 5,67,498/ - TOTAL 34 773.36 RS. 2.5 IN A WRITTEN REPLY FILED ON 30/11/2009, THE AR OF THE ASSESSEE FURNISHED THE EXPLANATION AS UNDER: '(1) YOUR HONOUR HAS STATED ON THE BASIS OF INFORMA TION GATHER FROM DRI THAT MAT DIFFERENCE IN DECLARED AND ASSESSABLE VALUE OF KATHA (GAMBLER) COMES TO RS. 3337280.00 FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION AND WHY THE SAME MAY NOT BE TAXED DURING THE ASSESS MENT YEAR UNDER CONSIDERATION. IN THIS REGARD AT THE OUT SET IT IS SUBMITTED THAT PRIMARILY THE DRI HAS RELIED ON THE INFORMATION GATHERED BY YOUR DEPARTMENT DURING THE COURSE OF INCOME TAX SEARCH PROCEEDINGS AND THE YEA R WISE CALCULATION OF DIFFERENCE IN DECLARED AND ASSESSABL E VALUE HAS BEEN DONE ON PRESUMPTIVE BASIS WITHOUT DETECTIN G OR FINDING ANY EVIDENCE/PROOF TO ESTABLISH THAT SUCH DIFFERENCE WAS EVER ACTUALLY PAID. THE ASSESSEE ON THE BASIS OF DRI CALCULATIONS/FINDINGS PAID THE DUTY AN D INTEREST THEREON AND THE CASE WAS REFERRED TO SETTL EMENT COMMISSION FOR FINAL DISPOSAL AND THE SAID COMMISSI ON DISPOSED OF THE CASE BY LEVYING OF CERTAIN LUMP SUM PENALTIES. THE COPY OF THE SAID ORDER OF SETTLEMENT 11 COMMISSION HAS ALREADY BEEN SUPPLIED TO YOU AND IS ON RECORD. THE ACCEPTANCE OF DRI FINDINGS/CALCULATIONS AND PAYMENT OF DUTIES AND INTEREST THEREON TO END UP TH E UNDESIRABLE LITIGATIONS PEACEFULLY DOES NOT IN ANY MANNER TAKES PLACE OF ANY CONCRETE EVIDENCE WITH REGARDS T O ACTUAL PAYMENTS OF DIFFERENCE IN DECLARED AND ASSESSABLE V ALUE. IT WAS FURTHER SUBMITTED THAT ON THE BASIS OF DETAI LS IN PEN DRIVES FOUND DURING THE COURSE OF SEARCH PROCEEDINGS THE A SSESSEE AS PER THE DETAILS IN SAID PEN DRIVES SURRENDERED RS. 22999849 .00 IN RESPECT OF SAID TRANSACTIONS IN THE RELEVANT ASSESSMENT YEAR M ENTIONED THEREIN WHEREAS THE DIFFERENCE IN ALL THE YEARS AS PER CHAR T SUPPLIED BY YOU COMES TO RS. 21737563.00 ONLY. THE SAID SURRENDER W AS MADE DURING THE COURSE OF SEARCH PROCEEDINGS EVEN IN THE ABSENC E OF ACTUAL/SPECIFIC EVIDENCE PROVING THE ACTUAL PAYMENT AND SUBSEQUENTLY RETURN WAS FILED U/S 153A ACCORDINGLY TO END UP THE UNDESIRABLE LITIGATION PEACEFULLY. THE ASSESSEE PAID THE TAXES AND INTEREST ON SUCH INCOME AND IT MAY BE VISUALIZED THAT IT HAS SURREND ERED MOREOVER ALL INCOME WITH RESPECT OF SUCH DIFFERENCE IN COMPARISO N TO THE FINDINGS/CALCULATION BY DR1. 12 2.6 THE ASSESSEE AS PER THE PROVISION OF SECTION 69 C SURRENDERED THE SAID PRESUMED EXPENDITURE ON THE BASIS OF DETAILS I N PEN DRIVES WHICH FALLS IN AND RELATES TO THE ASSESSMENT YEAR 2007-08 . THE FICTION CREATED BY SECTION 69C DOES NOT CONTEMPLATE TAXING OF UNEXP LAINED EXPENDITURE IN ANY MANNER OTHER THAN DEEMING IT AS INCOME OF THE FINANCIAL YEAR IN WHICH SUCH EXPENDITURE IS HELD AS INCURRED. IT WAS THUS SUBMITTED THAT THE SURRENDER OF INCOME HAS RIGHTLY BEEN MADE IN THE ASSESSMENT YEAR 2007-08 AND THERE IS NEITHER ANY NE ED NOR SCOPE TO TAX IT IN ANY OTHER YEAR. IT WAS FURTHER SUBMITTED THAT NO CLAIM OF EXPENDITURE IN RESPECT OF INCOME COMPRISING OF UNEX PLAINED EXPENDITURE IS ALLOWED AND HENCE, THE PROVISIONS OF SECTION 40(A)(IA) OR SECTION 40(A)(3) CANNOT BE MADE APPLICABLE ON SUCH EXPENDITURE. 2.7 THE REPLY FILED BY THE AR OF THE ASSESSEE WAS F OUND NOT TO BE CONVINCING ONE. THE SUBMISSION OF THE PARTNER/AR OF THE ASSESSEE AS ABOVE THAT ON THE BASIS OF SEIZED PRINT OUT OF THE PEN DRIVE AND PAGES OF SEIZED OF EXHIBIT-3 (PAGE NO. 43 & 47 NOT MENTIO NED IN THE REPLY OF AR/PARTNER), THE ASSESSEE HAS MADE A SURRENDER OF R S. 4,29,99,849/- IN HIS INCOME TAX RETURN FOR THE A.Y. 2007-08 U/S 69C OF THE INCOME TAX ACT 1961 TOWARDS UNEXPLAINED EXPENDITURE AS AGAINST THE DIFFERENCE IN ALL THE YEARS AS PER CHART SUPPLIED BY THE AO AT RS . 2,17,37,563/- AND 13 THE SAID SURRENDER WAS ALSO MADE DURING THE COURSE OF SEARCH PROCEEDING EVEN IN ABSENCE OF ACTUAL SPECIFIC EVIDE NCE PROVING THE ACTUAL PAYMENT TO END UP THE UNDESIRABLE LITIGATION PEACEFULLY. THE FICTION CREATED BY SECTION 69C DOES NOT CONTEMPLATE TAXING OF UNEXPLAINED EXPENDITURE IN ANY MANNER OTHER THAN DE EMING IT AS INCOME OF THE FINANCIAL YEAR IN WHICH SUCH EXPENDIT URE IS HELD AS INCURRED. IT IS THUS SUBMITTED THAT THE SURRENDER O F INCOME HAS RIGHTLY BEEN MADE IN THE ASSESSMENT YEAR 2007-08 AND THERE IS NEITHER ANY NEED NOR SCOPE TO TAX IT IN ANY OTHER YEAR IS NOT A CCEPTABLE. IT WAS POINTED OUT THAT THE ASSESSEE IS MAINTAINING ITS BO OKS OF ACCOUNTS ON MERCANTILE BASIS. DURING THE PREVIOUS YEAR, RELEVAN T TO THE A.Y. 2005- 06, A.Y. 2006-07, A.Y. 2007-08 AND A.Y. 2008-09, TH E ASSESSEE HAS IMPORTED GAMBIER AS PER INVESTIGATION MADE AND FIND ING GIVEN IN THE SHOW CAUSE NOTICE AS WELL AS PETITION OF THE ASSESS EE, WHICH WAS FILED BY HIM BEFORE THE HON'BLE SETTLEMENT COMMISSION OF CUSTOM AND CENTRAL EXCISE, MUMBAI. THE ASSESSEE HAS UNDER INVO ICED THE VALUE OF THE GAMBIER PURCHASED BY HIM FROM ABROAD AND MADE E NTRIES ACCORDINGLY IN HIS BOOKS OF ACCOUNTS WITHOUT RECORD ING THE ACTUAL VALUE OF THE INVESTMENT MADE BY HIM IN PURCHASE OF GAMBIE R IN THE A.Y. 2005-06, A. Y. 2006-07, A.Y. 2006-07, A.Y. 2007-08 AND A.Y. 2008-09. THE VALUE OF SUCH UNDER INVOICED GAMBIER WAS DETERM INED BY THE ADDL. 14 DIRECTOR GENERAL OF DIRECTORATE OF REVENUE INTELLIG ENCE BY MAKING DISCRETE ENQUIRES AT HIS END AND THEREAFTER, THE A SSESSEE SUO-MOTO FILED A SETTLEMENT PETITION BEFORE THE HON'BLE SETT LEMENT COMMISSION OF CUSTOM AND CENTRAL EXCISE, MUMBAI BY ADMITTING T HE FACTS NARRATED IN THE SHOW-CAUSE NOTICE OF THE ADDL. DIRECTOR GENE RAL OF DIRECTORATE OF REVENUE INTELLIGENCE AND THE PAID THE TAXES AND PENALTY ACCORDINGLY. 2.8 THE LD. A.R. FURTHER MENTIONED THAT ASSESSEE HA S MADE A SURRENDER OF RS. 2,29,99,849/- IN THE A.Y. 2007-08, THE PREVIOUS YEAR OF WHICH WAS ENDED ON 31/03/2007. WHILE THE TRANSAC TION RELATING TO INVOICE NO. 33 & 34 OF THE TRANSACTION UNEARTHED BY THE DIRECTORATE OF REVENUE INTELLIGENCE RELATES TO THE DATE 22/06/2007 AND 11/08/2007 WHICH IS A PERIOD MUCH LATER THAN THAT OF THE PERIO D IN WHICH UNEXPLAINED EXPENDITURE HAVE BEEN DECLARED BY THE A SSESSEE WHICH ACCORDING TO HIM INCLUDES THESE TWO TRANSACTIONS AL SO INVOLVING THE UNDER INVOICING OF THE IMPORT OF GAMBIER. 2.9 AFTER CONSIDERING THE RIVAL SUBMISSIONS, THE LD . CIT(A) HELD AS UNDER: IN VIEW OF THE DISCUSSION MADE SUPRA, I HOLD THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN PURCHAS E OF 15 GAMBIER DURING THE YEAR UNDER CONSIDERATION WHICH H AS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED B Y HIM AND NO SATISFACTORY EXPLANATION COULD BE OFFERED BY HIM REGARDING THE SOURCE OF INVESTMENT IN PURCHASE OF G AMBIER BY UNDER INVOICING THE SAME AND ACCORDINGLY THE VAL UE OF THE UNEXPLAINED UNDER INVOICED IMPORTED GAMBIER AMOUNTING TO RS 5,67,498/- (RS. 23,18,838/- (-) RS. 17,51,340/) IS DEEMED TO BE THE INCOME OF THE ASSES SEE FOR THE YEAR UNDER CONSIDERATION AND IS TAXED U/S 69 OF THE INCOME TAX ACT, 1961. IT WILL RESULT INTO AN ADDITI ON OF RS. 5,67,498/- TO THE INCOME OF THE ASSESSEE UNDER THE HEAD 'INCOME FROM OTHER SOURCES.' 3. THE ISSUE OF TRADING ADDITION HAS BEEN DISC USSED BY THE AO IN PARA 5 OF THE ASSESSMENT ORDER WHICH READS AS UNDER : '5. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE FIRM CONTINUES TO DERIVE 'INCOME FROM TRADING OF KATHA. DURING THE YEAR UNDER CONSIDERATION, ON THE TOTAL TURNOVER OF RS. 1,34,36,170/-, THE ASSESSEE FIRM HAS DECLARED A GRO SS PROFIT OF RS. 23,47,882/- GIVING A G.P. RATE OF 17.47% AS COMPARED TO THE GROSS PROFIT OF RS. 55,16,966/- DECLARED @ 1 1.95% ON THE TOTAL TURNOVER OF RS. 4,61,82,457/- IN THE IMME DIATE PRECEDING YEAR. THERE IS A DECLINE IN G.P. RATE OF THE ASSESSEE AS COMPARED A.Y. 2006-07 WHEREIN ON THE TO TAL TURNOVER OF RS. 3,01,90,139/-, THE ASSESSEE HAS DEC LARED A GROSS PROFIT OF RS. 66,16,639/- GIVING A G.P. RATE OF_21.92% FOR WHICH NO COGENT REASON COULD BE OFFERED BY HIM. IT IS 16 POINTED OUT THAT THE ASSESSEE IS UNDER INVOICING TH E IMPORT OF GAMBIER WHICH IS EVIDENT FROM THE INCRIMINATING DOCUMENTS FOUND AND SEIZED RELATING TO HIM DURING T HE COURSE OF SEARCH OPERATION AT THE PREMISES OF THE G ROUP AS ALREADY DISCUSSED IN THE IMMEDIATE PRECEDING PARA. AS SUCH, THE BOOKS OF ACCOUNTS OF THE ASSESSEE CANNOT BE RELIED UPON AND THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961 ARE CLEARLY APPLICABLE IN HIS CASE AS POINTED OUT ABOVE. THEREFORE, BY INVOKING THE PROVI SIONS OF SECTION 145(3) OF THE ME TAX ACT, 1961,1 HEREBY EST IMATE THE TURNOVER OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AT RS. 1,40,75,0007- AND APPLY A G.P. RATE OF 21.20% ON THE SAME RESULTING INTO DETERMINATION OF GROSS PROFIT OF THE ASSESSEE AT RS. 29,83,900/- AS AGAINS T RS. 23,47,882/- DECLARED BY THE ASSESSEE RESULTING INTO TRADING ADDITION OF RS. 6,36,018/- OUT OF WHICH THE ASSESSE E IS ALLOWED TO GET BENEFIT FOR TELESCOPING OF AN AMOUNT OF RS. 5,67,498/- WHICH HAS BEEN ADDED BACK TO THE INCOME OF THE ASSESSEE FOR UNDISCLOSED INVESTMENT IN PURCHASES NO T FULLY RECORDED IN THE BOOKS OF ACCOUNTS AS DISCUSSED IN T HE PRECEDING PARAS AND THE BALANCE AMOUNT IS ADDED BAC K TO THE INCOME OF THE ASSESSEE.' 3.1 IN THIS MANNER TOTAL ADDITION OF RS. 6,36,018/- WAS MADE BY THE AO. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED HIS WRITTEN SUBMISSIONS AS UNDER AND ARGUED ON THE SAME LINES: 17 A) THE LEARNED ASSESSING OFFICER WHILE FRAMING TH E ASSESSMENT ORDER REFERRED ABOVE MADE AN ADDITION OF RS. 5,67,498/- ON ACCOUNT OF ALLEGED UNDER INVOICING IN PURCHASE OF GAMBIER KATHA. B) IN THIS REGARD IT IS RESPECTFULLY BROUGHT INTO K IND NOTICE OF YOUR HONOUR THAT DURING THE COURSE OF SEARCH PROCEEDINGS ON THE GROUP CERTAIN DOCUMENTS MARKED A S EXHIBIT-3 PAGES 43 AND 47 AND A PEN DRIVE WAS FOUND AND SEIZED FROM THE RESIDENCE OF SHRI NAND KISHORE MALA NI. ON THE BASIS OF DETAILS IN PRINT OUT OF THE PEN DRIVE THE ASSESSEE EVEN IN THE ABSENCE OF PROOF OF ANY ACTUAL PAYMENT ADMITTED THAT A SUM OF RS. 2,29,99,8491- HA S BEEN PAID AS UNACCOUNTED CASH PAYMENTS DURING THE P ERIOD 25.04.2006 TO 28.09.2006 IN RESPECT OF UNDER INVOIC ING OF IMPORT OF KATHA AND ACCORDINGLY SURRENDERED THE SAM E AS ITS INCOME DURING THE COURSE OF INCOME TAX SEARCH PROCEEDINGS IN SEPTEMBER, 2007. THEREAFTER, AS A CONSEQUENCE OF STATEMENT RECORDED DURING THE COU RSE OF SEARCH PROCEEDINGS THE ASSESSEE REVISED ITS RET URN FOR THE ASSESSMENT YEAR 2007-08 AND SURRENDERED THE A BOVE INCOME DURING THE SAID ASSESSMENT YEAR BEING THE YE AR IN WHICH THE CASH PAYMENTS WERE ADMITTED AS HAVING BEE N MADE. IN DECEMBER, 2008 THERE WAS A DRI INVESTIGATI ON ON THE ASSESSEE WHICH WAS PRIMARILY BASED ON THE DOCUM ENTS IN POSSESSION WITH THE INCOME TAX DEPARTMENT SEIZED AS A CONSEQUENCE OF INCOME TAX SEARCH PROCEEDINGS. THE D RI ON THE BASIS OF ACTUAL IMPORTS DURING THE ASSESSMENT Y EAR 18 2005-06 TO 2008-09 DETERMINED THE YEAR WISE DIFFERE NCE IN ASSESSABLE VALUE OF IMPORTS AND ACCORDINGLY COLLECT ED THE DIFFERENTIAL DUTY ALONG WITH INTEREST. IT IS RELEVA NT TO NOTE HERE THAT IN ABSENCE OF PROOF OF ACTUAL PAYMENT THE CALCULATIONS MADE BY THE DRI WERE ALSO ON PRESUMPTI VE BASIS AND WERE BASED ON THE INVOICES DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE RELATING TO RELEVA NT YEARS. 3.2 THE ASSESSING OFFICER ACCORDINGLY ISSUED SHOW C AUSE NOTICE SEEKING TO ASSESS THE DIFFERENCE IN ASSESSABLE VALU E DURING THE ASSESSMENT YEARS 2005-06 TO 2008-09, AS PER DETAILS GIVEN BELOW: ASSESSMENT YEAR AMOUNT/ RS. 2005-06 3 3,37,280/- 2006-07 88,17,645/- 2007-08 90,15,140/- 2008-09 5,67,4981- 2,17,37,5 63/- 3.3 IN REPLY TO THE AFORESAID SHOW CAUSE NOTICE, TH E ASSESSEE VIDE LETTER DATED 30.11.2009, SUBMITTED AS UNDER: 'YOUR HONOUR HAS STATED ON THE BASIS OF INFORMATION GATHERED FROM DRI THAT DIFFERENCE IN DECLARED AND ASSESSABLE VALUE OF KATHA (GAMBLER) COMES TO RS. 567498.00 FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON AND 19 WHY THE SAME MAY NOT BE TAXED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THIS REGARD AT THE OUTSET I T IS SUBMITTED THAT PRIMARILY THE DRI HAS RELIED ON THE INFORMATION GATHERED BY YOUR DEPARTMENT DURING THE COURSE OF INCOME TAX SEARCH PROCEEDINGS AND THE YEA R WISE CALCULATION OF DIFFERENCE IN DECLARED AND ASSESSABL E VALUE HAS BEEN DONE ON PRESUMPTIVE BASIS WITHOUT DETECTIN G OR FINDING ANY EVIDENCE / PROOF TO ESTABLISH THAT SUCH DIFFERENCE WAS EVER ACTUALLY PAID. THE ASSESSEE ON THE BASIS OF DRI CALCULATIONS /FINDINGS PAID THE DUTY A ND INTEREST THEREON AND THE CASE WAS REFERRED TO SETTL EMENT COMMISSION FOR FINAL DISPOSAL AND THE SAID COMMISSI ON DISPOSED OF THE CASE BY LEVYING OF CERTAIN LUMP SUM PENALTIES. THE COPY OF THE SAID ORDER OF SETTLEMENT COMMISSION HAS ALREADY BEEN SUPPLIED TO YOU AND IS ON RECORD. THE ACCEPTANCE OF DRI FINDINGS / CALCULATIO NS AND PAYMENT OF DUTIES AND INTEREST THEREON TO END UP TH E UNDESIRABLE LITIGATION PEACEFULLY DOES NOT IN ANY M ANNER TAKES PLACE OF ANY CONCRETE EVIDENCE WITH REGARDS T O ACTUAL PAYMENTS OF DIFFERENCE IN DECLARED AND ASSESSABLE V ALUE. ON THE BASIS OF DETAILS IN PEN DRIVES FOUND DURING THE COURSE OF SEARCH PROCEEDINGS THE ASSESSEE AS PER TH E DETAILS IN SAID PEN DRIVES SURRENDERED RS. 22999849 .00 IN RESPECT OF SAID TRANSACTIONS IN THE RELEVANT ASSESS MENT YEAR MENTIONED THEREIN WHEREAS THE DIFFERENCE IN AL L THE YEARS AS PER CHART SUPPLIED BY YOU COMES TO RS. 21737563.00 ONLY. THE SAID SURRENDER WAS MADE DURIN G THE COURSE OF SEARCH PROCEEDINGS EVEN IN THE ABSENCE OF ACTUAL 20 / SPECIFIC EVIDENCE PROVING THE ACTUAL PAYMENT AND SUBSEQUENTLY RETURN WAS FILED U/S 153 A ACCORDINGLY TO END UP THE UNDESIRABLE LITIGATION PEACEFULLY. THE ASSES SEE PAID TAXES AND INTEREST ON SUCH INCOME AND IT MAY BE VIS UALIZED THAT IT HAS SURRENDERED MORE OVERALL INCOME WITH RE SPECT TO SUCH DIFFERENCE IN COMPARISON TO THE FINDINGS / CALCULATIONS BY DRI. THE ASSESSEE AS PER THE PROVIS ION OF SECTIONS 69 C SURRENDERED THE SAID PRESUMED EXPENDI TURE ON THE BASIS OF DETAILS IN PEN DRIVES WHICH FALLS I N AND RELATES TO THE ASSESSMENT YEAR 2007-08. THE FICTION CREATED BY SECTION 69 C DOES NOT CONTEMPLATE TAXING OF UNEX PLAINED EXPENDITURE IN ANY MANNER OTHER THAN DEEMING IT AS INCOME OF THE FINANCIAL YEAR IN WHICH SUCH EXPENDIT URE IS HELD AS INCURRED. IT IS THUS SUBMITTED THAT THE SUR RENDER OF INCOME HAS RIGHTLY BEEN MADE IN THE ASSESSMENT YEAR 2007- 08 AND THERE IS NEITHER ANY NEED NOR SCOPE TO TAX I T IN ANY OTHER YEAR. IT IS FURTHER SUBMITTED THAT NO CLAIM O F EXPENDITURE IN RESPECT OF INCOME COMPRISING OF UNEXPLAINED EXPENDITURE IS ALLOWED AND HENCE, THE PROVISIONS OF SECTION 40 (A) (LA) OR SECTION 40 (A) (3) CANNOT BE MADE APPLICABLE ON SUCH EXPENDITURE.' 3.4 THE LD. A.R. PLEADED THAT IN SPITE OF AFORESAID WELL JUSTIFIED SATISFACTORY EXPLANATIONS / CLARIFICATIONS THE LEAR NED ASSESSING OFFICER PROCEEDED TO MAKE AN ADDITION OF RS. 5,67,498/- U/ S 69 OF INCOME TAX ACT AS UNEXPLAINED INVESTMENT IN PURCHASE OF KATHA DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THIS REGARD IN ADDITION TO 21 SUBMISSIONS BEFORE THE ASSESSING OFFICER HE FURTHER SUBMITTED AS UNDER: (I) SIR, AT THE OUTSET IT IS SUBMITTED THAT THE AS SESSING OFFICER HAS MADE THE ABOVE ADDITION U/S 69 OF INCOME TAX AC T BY HOLDING IT AS UNEXPLAINED INVESTMENT IN PURCHASES OF KATHA AND THE SAID VIEW TAKEN BY HIM DO NOT HAVE ANY LEG TO STAND. THE PROVISION OF SECTION 69 ARE APPLICABLE TO INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT WHICH IS NOT AT ALL THE CAS E OF THE ASSESSEE WHEREIN ALL THE PURCHASES ARE UNDISPUTEDLY DULY RECORDED IN THE BOOKS OF ACCOUNT OF RELEVANT YEARS AND THE ONLY MATTER OF DISPUTE WAS DIFFERENCE IN ASSESSABLE VALU E AND DECLARED VALUE OF IMPORTS OF KATHA. THE ASSESSING O FFICER IN HIS SHOW CAUSE NOTICE DID NOT MENTION THE PROVISIONS IN WHICH HE PROPOSES TO MAKE THE ADDITION AND THEREFORE IN VIEW OF ABOVE SUBMISSIONS THE ADDITION U/S 69 WAS NOT ONLY UNJUST IFIED BUT ALSO UNLAWFUL. (II) THERE WAS NO NEW DETECTION AT ALL IN THE FINDI NGS OF DRI AND THE CALCULATIONS OF DIFFERENCE IN ASSESSABLE VALUE AND DECLARED VALUE WAS MADE BY IT BASED ON THE INVOICES ACTUALLY RECORDED IN THE BOOKS OF ACCOUNT AND THE SAID CALCULATIONS COUL D HAVE BEEN EASILY DONE WITHOUT ANY INVESTIGATION AT ALL. THUS, THE CONTENTION OF THE ASSESSING OFFICER THAT THE YEAR W ISE DETECTION OF ASSESSABLE AND DECLARED VALUE WAS A RESULT OF DR I INVESTIGATIONS IS NOT AT ALL CORRECT. THE ABOVE CAL CULATIONS WERE MADE ON PRESUMPTIVE BASIS WITHOUT ANY PROOF OF ACTU AL PAYMENTS AND PRESUMPTION /STRONG SUSPICION /STRANGE COINCIDE NCES /GRAVE DOUBTS / SURMISES / CONJECTURES HOWSOEVER STRONG CA NNOT TAKE 22 PLACE OF LEGAL / AUTHENTIC PROOF AS HELD IN THE CAS ES OF STATE OF KERELA V/S M.M. MATHEW AND ANOTHER (SO AND UMACHARA N SHAW AND BROS. V/S CIT (1959) 37 ITR 271 (SC). IT W AS THEREFORE, ON THE BASIS OF DOCUMENTS DETECTED DURIN G THE INCOME TAX SEARCH PROCEEDINGS, THE ASSESSEE ADMITTED HAVIN G MADE SUCH PAYMENTS OF DIFFERENCE AMOUNT WORTH RS. 2,29,99.84 9.00 IN CASH DURING THE PERIOD 25.04.06 TO 28.09.06. WHICH FALLS IN THE ASSESSMENT YEAR 2007-08 AND ACCORDINGLY SURRENDERED IT AS UNDISCLOSED INCOME IN THE SAID YEAR WHILE GIVING TH E STATEMENTS DURING THE COURSE OF SEARCH PROCEEDINGS OF INCOME T AX DEPARTMENT. (III) SIR, EVEN IF THE DIFFERENCE IN ASSESSABLE VAL UE AND DECLARED VALUE HAS BEEN MADE YEAR WISE AND THE DIFFERENTIAL CUSTOM DUTY AND INTEREST WAS PAID THEREON, ON THE SAID BASIS IT CANNOT BE SAID THAT THE ACTUAL PAYMENT WAS MADE IN THAT YEAR ONLY WHEN THE DETECTED DOCUMENTS SPEAKS OTHERWISE. IF BASED ON TH E DOCUMENTS SEIZED THE ACTUAL PAYMENT HAS BEEN ADMITT ED IN THE ASSESSMENT YEAR 2007-08 THAN THE SAME CANNOT BE ASS ESSED IN ANY OTHER YEAR AS THE PAYMENT CAN ONLY BE MADE WHEN THE ASSESSEE IN FACT HAS THE MONEY AND NOT OTHERWISE. I F THE PAYMENT WAS STILL TO BE MADE TILL THEN THE UNEXPLAI NED INVESTMENT CAN BE TAXED ONLY IN THE YEAR IN WHICH T HE ASSESSEE MADE' THE ACTUAL INVESTMENT BY MAKING THE PAYMENT A ND NOT ON THE BASIS OF PRESUMED LIABILITY. 23 IT IS FURTHER SUBMITTED THAT PAYMENT OF DUTY BASED ON DIFFERENCE IN ASSESSABLE VALUE AND DECLARED VALUE AS PER THE F INDINGS OF DRI CANNOT AFFECT THE ASSESSMENT OF INCOME IN THE INCOM E TAX ACT IN VIEW OF THE FACT THAT THE CUSTOM DUTY LIABILITY ARO SE AS SOON AS THE GOODS WAS ACTUALLY IMPORTED WHEREAS THE INCOME TAX LIABILITY ON THE UNDISCLOSED INCOME WAS BASED ON THE FACT THA T WHEN THE ASSESSEE ACTUALLY PAID THE MONEY SO INVOLVED. THUS, THE ASSESSEE RIGHTLY ADMITTED THE SAME AS ITS UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 2007-08 WHILE GIVING STATEMENT DURI NG THE COURSE OF SEARCH PROCEEDINGS AND ALSO WHILE FILING THE REVISED RETURN FOR THE SAID ASSESSMENT YEAR AS WELL AS RETU RN FILED U/S 153 A / 153 C. (IV) THE PROVISIONS OF SECTIONS 68 TO 69 D CATEGORI CALLY EMPOWERS THE ASSESSING OFFICER THAT HE MAY ASSESS THE INCOME COVERED BY THE PROVISIONS OF THESE SECTIONS IN THE FINANCIAL Y EARS MENTIONED IN THEM AND THE LEGISLATION HAS NOT USED THE WORD S HALL WITH A VIEW THAT THE MATTER IS PRACTICALLY AND DISCRETIONA RILY CONSIDERED BY THE ASSESSING OFFICER AS PER THE DIFFERENT CIRCU MSTANCES OF EACH AND EVERY CASE. IF THE ASSESSEE DO NOT HAVE IN POSSESSION OF ANY MONEY IN THE YEAR OF LIABILITY AND PAYMENT TO C REDITOR IS MADE SUBSEQUENTLY HOW THE UNEXPLAINED INVESTMENT CA N BE ASSESSED IN THE YEAR OF INCURRENCE OF LIABILITY. TH E CREDIT WAS ULTIMATELY WIPED OUT IN THE ASSESSMENT YEAR 2007-08 WHEN THE ASSESSEE WAS IN POSSESSION OF MONEY TO PAY AND HENC E THE INCOME WAS SURRENDERED IN THAT YEAR. THE AFORESAID VIEWS F IND SUPPORT FROM THE DECIDED CASE OF CIT V/S SMT. P. K. NOORJAH AN (1999) 237 ITR 570 (SC) WHEREIN IT WAS HELD THAT WHEN IT W AS IMPOSSIBLE 24 FOR THE ASSESSEE TO HAVE SOURCES OF MAKING THE INVE STMENT THE UNEXPLAINED INVESTMENT COULD NOT BE TREATED AS THE INCOME OF THE ASSESSEE. FURTHER, IN THE CASE OF CIT V/S SMT. UMA DEVI BHUWALKA (1990) 181 ITR 547 (MAD), IT WAS HELD THAT THE ASSESSMENT OF SUCH INCOME MAY BE MADE ONLY IN THE Y EAR IN WHICH THE MONEY FOR INVESTMENT ACTUALLY SURFACED AN D NOT IN ANY OTHER YEAR. IN ADDITION TO ABOVE IN THE CASE OF ACI T V/S K. H. DHAMDHERE (2008) 19 SOT 201 (COCHIN) THE CREDIT PUR CHASES ON BOUGHT NOTES NOT INVOLVING PAYMENT OF CASH WERE NOT HELD AS BOGUS PURCHASES TAXABLE U/S , 69 C. SIMILARLY IN TH E CASE OF CIT V/S LUBTEC INDIA LIMITED (2009) 311 ITR 175 (DEL) A DDITIONS AS UNEXPLAINED EXPENDITURE WERE MADE BY THE ASSESSING OFFICER ON THE BASIS OF SOME SEIZED PAPERS AND IT WAS HELD THA T ADDITION U/S 69 C WAS NOT SUSTAINABLE TILL THE TIME THE ASSESSIN G OFFICER SHOW THAT THE EXPENDITURE WAS IN FACT ACTUALLY INCURRED BY THE ASSESSEE. SIR, IN VIEW OF ABOVE IT IS SUBMITTED THAT THE ASSE SSING OFFICER SHOULD HAVE OPTED TO ASSESS THE SAID INCOME IN THE YEAR OF PAYMENT ONLY AND IF HE WAS HAVING ANY DOUBT ABOUT THE YEAR OF PAYMENT EVEN IF SAME WAS QUITE CLEAR FR OM THE DOCUMENTS DETECTED DURING THE COURSE OF SEARCH PROCEEDINGS HE SHOULD HAVE MADE FURTHER PROBE / INQ UIRY FROM THE PARTIES TO WHOM THE PAYMENTS WERE MADE. (V) IN VIEW OF FOREGOING DISCUSSION IT IS SUBMITTED THAT THE UNLAWFUL ADDITION OF RS. 5,67,498/- MADE BY THE ASS ESSING OFFICER ON PRESUMPTIVE BASIS MAY PLEASE BE DELETED AND THE 25 SURRENDER OF INCOME OF RS. 2,29,99,849/- DURING THE YEAR 2007-08 ON THE BASIS OF ACTUAL PAYMENT/INCURRENCE M ADE BY THE ASSESSEE MAY PLEASE BE ACCEPTED. (VI) THE ASSESSING OFFICER, AS PER GROUND NO. 02 OF THE APPEAL, ENHANCED THE SALE OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON ACCOUNT OF A BOVE ALLEGED UNACCOUNTED INVESTMENT IN PURCHASES AMOUNTI NG TO RS. 5,67,498/- AND HAS FURTHER ADDED GROSS PROFIT W ORTH RS. 68,520/- AFTER SET OFF OF ABOVE ALLEGED UNACCOUNTED INVESTMENT IN PURCHASES. IN THIS REGARD IT IS SUBMITTED THAT AS SUBMITTED IN FOREGOING PARAS THE ADDITION MADE BY LEARNED ASSESSING OFFICE R IS UNLAWFUL AND UNJUSTIFIED AND HENCE, UNSUSTAINABLE. THUS, THERE CANNOT BE ANY ENHANCEMENT OF SALE AND ESTIMAT ION OF GROSS PROFIT THEREON TO MAKE A FURTHER GROUND FOR M AKING ADDITION. HOWEVER, EVEN OTHERWISE WHEN THE ASSESSEE HAS SURRENDERED ENTIRE UNEXPLAINED EXPENDITURE / INVEST MENT IN UNDER PRICING OF PURCHASES THERE CANNOT BE ANY S EPARATE ADDITION BASED ON GROSS PROFIT. THE TRADING ADDITIO N BASED ON GROSS PROFIT RATE CAN ONLY BE MADE IN THE CASES OF SUPPRESSION OF SALES WHEREIN GROSS PROFIT IS ESTIMA TED AND ADDITION IS RESTRICTED TO THE AMOUNT OF GROSS PROFI T ONLY. THUS, THE ASSESSING OFFICER BY MAKING THE SAID ADDI TION HAS RESORTED TO MAKING MULTIPLE ADDITION OF SAME INCOME . 26 IT IS FURTHER SUBMITTED THAT DURING THE COURSE OF I NCOME TAX SEARCH PROCEEDINGS 'WHICH ARE GRAVEST MODE OF INVESTIGATION PROVIDED UNDER THE INCOME TAX ACT, NO EVIDENCE OF ANY SUPPRESSION OF SALES OR UNACCOUNTED SALES OVER AND ABOVE THAT RECORDED IN THE BOOKS OF ACCOUN T BY THE ASSESSEE FIRM WAS FOUND / DETECTED. FURTHER EXC EPT THE DIFFERENCE WHICH HAS ALREADY BEEN SURRENDERED THERE WAS NO DETECTION OF ANY EVIDENCE OF ANY OTHER MANIPULAT ION IN PURCHASES OR OTHER EXPENDITURE. THUS, THERE WAS NEI THER ANY SCOPE FOR INVOKING PROVISIONS OF SECTION 145 (3 ) NOR ANY SCOPE OF MAKING ANY ADDITION ON ACCOUNT OF GROSS PR OFIT BY ENHANCEMENT OF SALES ON ESTIMATED BASIS. THE SAID E XERCISE OF ESTIMATION OF SALES AND GROSS PROFIT BY THE ASSE SSING OFFICER WAS ALSO HIGHLY UNJUSTIFIED AND UNWARRANTED IN VIEW OF THE FACT THAT ALL THE SO CALLED UNACCOUNTED / UNEXPLAINED TRANSACTIONS, UNEXPLAINED CASH AND ASSE TS ETC. DETECTED DURING THE COURSE OF SEARCH PROCEEDINGS WE RE SURRENDERED AS UNDISCLOSED INCOME BY THE ASSESSEE O R GROUP PERSONS / FIRMS / COMPANIES AND AFTER SUCH A FACTUA L EXERCISE THERE REMAINS NO SCOPE OF MAKING ANY ADDIT ION MERELY ON ESTIMATED BASIS WITHOUT ANY SUBSTANCE / EVIDENCE WHATSOEVER. THUS, IT APPEARS THAT THE ABOV E ADDITION HAS BEEN MADE MERELY FOR SAKE OF MAKING AD DITION AND TO CREATE UNWARRANTED DEMAND IN THE ASSESSMENT PROCEEDINGS. IT IS FURTHER SUBMITTED THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NEITHER ISSUED A SHOW CAUSE NOTICE NOR INFORMED THE ASSESSEE OF HIS INTENTION TO INVOKE THE PROVISIONS OF SECTION 27 145 (3) AT ANY STAGE. IN THIS REGARD THE KIND ATTEN TION OF YOUR HONOUR IS ALSO DRAWN TOWARDS THE DECIDED CASES OF CIT V/S GOTAN LIME KHANIJ UDHYOG (2002) 256 ITR 243 (RA J.) AND CIT V/S UTTAM CHUNA PA THAR UDHYOG (2001) 116 TAXMAN 524 (RAJ.) WHICH SUPPORT THE VIEWS NARRATED ABOVE. IT IS FURTHER SUBMITTED THAT ASSESSEE COULD HAVE EA SILY SET OFF THE SURRENDER WORTH RS. 2,29,99,849/- IN RESPEC T OF PAYMENT OF DIFFERENCE IN PURCHASE PRICE IN THE ASSE SSMENT YEAR 2007-08 OUT OF OTHER UNDISCLOSED PAYMENTS OR C ASH FOUND AT THE TIME OF SEARCH. HOWEVER, EVEN IF IT WA S EVIDENT THAT SEPARATE AND MULTIPLE SURRENDERS WERE OBTAINED DURING THE COURSE OF SEARCH PROCEEDINGS IT DID NOT RETRACT THE SAME AND INCLUDED THE SURRENDERED INCOM E IN THE RETURNS FILED U/S 153 A / 153 C TO KEEP HIS WOR DS, PURCHASE PEACE AND TO OBVIATE UNDESIRABLE LITIGATIO N. (VII) SIR, IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES THE ADDITIONS OF RS. 5,67,498/- AND 68,520/- MADE BY TH E LEARNED ASSESSING OFFICER ARE NEITHER JUSTIFIED LEG ALLY NOR ON MERITS AND THUS THE SAME ARE WITHOUT ANY SUBSTAN CES. IT IS THEREFORE REQUESTED THAT THE ASSESSING OFFICER M AY PLEASE BE DIRECTED TO DELETE THE SAID ADDITIONS.' 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, THE LD. CIT(A) HELD AS UNDER: 28 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS ALSO THE FINDING OF THE AO. FIRST OF A LL THE ISSUE OF ADDITION OF RS. 567498/- IS TO BE EXAMINED . IT MAY BE NOTED THAT THERE IS NO DISPUTE ON THE FACT THAT DURING THE COURSE OF SEARCH DATED 12.9.2007 AS PER SEIZED EXHIBIT- 3, PAGE 43 AND 47 TWO PEN DRIVES AND COMPUTERS WERE FOUND AND SEIZED. WHEN PRINT OUT OF SUCH PEN DRIVES HAVE TAKEN IT WAS FOUND THAT IT CONTAINED UNACCOUNTED TRANSACTIONS OF PURCHASE OF GAMBIER AND ADMITTEDLY SUCH PURCHASE WERE PARTLY MADE IN AN UNACCOUNTED MANNER, SH. NAND KISHORE MALANI IN HIS STATEMENT VERY SPECIFICA LLY ADMITTED THAT PAYMENT SHOWN IN SUCH DOCUMENTS (PRIN T OUT TAKEN FROM PEN DRIVES) CONTAINED ARE BOTH THROUGH C HEQUE AND CASH AND THAT ALL SUCH PAYMENT IN CASH ARE OF UNACCOUNTED NATURE. TOTAL SUCH CASH PAYMENT WAS DETERMINED AT RS. 22999849/-. THE APPELLANT HAS ALS O SURRENDERED SUCH AMOUNT IN RESPECT OF A.Y. 2007-08. THE MAIN DISPUTE IS THAT AS PER AO SUCH CASH PAYMENTS W ERE MADE DURING A.Y. 2005-06 TO 2008-09 AS UNDER: S.NO. DATE OF INVOICES PERIOD INVOLVED A.Y. INVOLVED NO. OF INVOICES QTY. IN METRIC TONE DIFFERENCE I N ASSESSABLE VALUE OF GAMBIER IMPORTED . 1 1 TO 8 OF ANNEX. B 5.8.2004 TO 17.1.2005 2005 - 06 8 92.46 RS. 3337280/ - 2 9 TO 18 OF ANNEX. B 13.5.2005 TO 3. 2.2006 2006 - 07 11 212.78 RS. 8817645/ - 3 19 TO 32 OF ANNEX. B 3.4.2006 TO 20.21.200 6 2007 - 08 13 443.116 RS. 9015140/ - 29 4 33 TO 34 OF ANNEX. B 6.7.2007 TO 23.8.2008 2008 - 09 9 25 RS. 56749S/ - TOTAL 34 773.36 RS. 21737563/ - ACCORDINGLY THE AO TAXED ALL SUCH UNACCOUNTED PURCH ASES IN RESPECT OF RELEVANT A.YS. THE ADDITION ON ACCOUNT OF SUCH UNAC COUNTED PURCHASES IN RESPECT OF A.Y. 2008-09 WAS ARRIVED AT RS. 56749 8/-. WHEREAS THE APPELLANT CONTENDED THAT ALL SUCH UNACCOUNTED PURCH ASES/ INVESTMENT ARE ALREADY SURRENDERED/ TAXED IN A.Y. 2007-08. 4.1 DURING THE APPELLATE PROCEEDINGS IT WAS GATHERE D THAT ON THE SAME ISSUE THE HON'BLE JURISDICTIONAL ITAT HAS ALRE ADY DECIDED THE APPEAL OF THE APPELLANT IN RESPECT OF A.Y. IS 2005- 06 TO 2007-08 IN ITAS NO. 13 TO 15 VIDE ORDER DATED 7.11.2012 AND THE ISS UE WHETHER SUCH UNDISCLOSED INVESTMENT ON ACCOUNT OF UNACCOUNTED PU RCHASES SHOULD BE TAXED IN RESPECTIVE ASSESSMENT YEARS OR IN A.Y. 200 7-08 WAS DECIDED AND IT WAS HELD THAT THE ADDITION REGARDING UNDER I NVOICING OF THE PURCHASES IS TO BE TAXED IN THE RELEVANT YEAR. THE RELEVANT FINDING OF THE HON'BLE ITAT IS CONTAINED IN PARA 6 & 7 OF THE SAID ORDER WHICH READS AS UNDER: '6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. FIRST MATE RIAL GROUND RELATING TO SEGREGATION OF SURRENDERED AMOUNT OF RS . 2,29,99,849/- AS THIS INCOME RELATED TO ASSESSMENT IN WHICH IT WAS SURRENDERED. IT WAS ARGUED BY THE ID. COUNSEL F OR THE 30 ASSESSEE THAT NO INCRIMINATING EVIDENCE WAS FOUND D URING SEARCH WHILE MAKING STATEMENT U/S 132(4) OF THE ACT THE AS SESSEE HAD SURRENDERED IN ONE PARTICULAR YEAR. HE ARGUED THAT THE A.O. IN THIS CASE HAS FOLLOWED THE CUSTOM DEPARTMENT'S ACTI ON WHO HAVE WORKED OUT TAXES IN DIFFERENT ASSESSMENT YEARS AND HAS ALSO LEVIED INTEREST AS WELL AS PENALTY. THIS ACTION, AC CORDING TO HIM, IS NOT CORRECT. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE DE PARTMENT ARGUED THAT DURING SEARCH, A PEN DRIVE AND INCRIMINATING M ATERIAL AS EXH. 3 [PAGES 43 AND 47 WERE FOUND AND SEIZED FROM THE RES IDENCE OF SHRI N.K. MALANI. IT WAS ARGUED, THAT ON THE BASIS OF DE TAILS FOUND FROM THE PRINT OUT OF PEN DRIVE, THAT IT WAS CONFRONTED TO HIM ADMITTED THAT A SUM OF RS. 2,29,99,849/- HAD BEEN P AID AS UNACCOUNTED CASH DURING THE PERIOD 25.4.2006 TO 28.9.2006 IN RE SPECT OF UNDER-INVOICING OF IMPORT OF KATHA AND ACCORDINGLY SURRENDERED THE SAME AS ITS INCOME DURING THE COURSE OF SEARCH ITSELF. IT WAS ARGUED THAT THE ASSESSEE CANNOT DISPUTE THE ACTION OF THE DRI, EXCISE AND CUSTOM ON THE BASIS OF DOCUMENTS SEIZED FROM THE POSSESSION OF THE ASSESSEE, THE I. T. DEPARTMENT AND DETERMINED THAT ACTUAL IMPORT WAS UNDERTAKEN IN ASS ESSMENT YEAR 2005-06 TO 2008-09 AND AFTER DETERMINING THE YEAR-W ISE DIFFERENCE IN ASSESSABLE VALUE OF IMPORTS, COLLECTED THE DIFFEREN TIAL DUTY ALONG WITH INTEREST. THE ASSESSEE INSTEAD OF REPLYING THE NOTI CE OF THE DRI, WENT BEFORE THE SETTLEMENT COMMISSION AND ADMITTED, ENTIRE F ACTS WHICH WERE STATED IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. WE ARE UNABLE TO ACCEPT THE STATEMENT OF THE ID. COUNSEL FOR THE ASS ESSEE THAT NO EVIDENCE 31 WHICH CAN BE CONSIDERED INCRIMINATING WAS FOUND DURING THE SEARCH. IN FACT, A PEN DRIVE ALONGWITH ANNEXURE EXH. 3 [PAGES 43 AND 47] WERE FOUND DURING SEARCH. FROM THE PRINTOUT OF THE PEN-D RIVE, PROOF OF PAYMENT IN CASH OUT OF UNACCOUNTED MONEY WHICH WAS NOT ACTU ALLY RECORDED IN THE BOOKS OF ACCOUNTS WERE FOUND. SHRI MALANI, IN HIS S TATEMENT RECORDED U/S 132(4) OF THE ACT HAS VERILY ACCEPTED AND CLARIFIED THE ACTUAL MODUS UNDERTAKEN BY THE FIRM IN ORDER TO RECORD THE IMPOR TS FROM DUBAI. A COPY OF SETTLEMENT COMMISSION HAS BEEN MADE ANNEX URE BY THE A.O. ALL OTHER RELEVANT DOCUMENTS HAVE BEEN APPENDED TO THE ASSESSMENT ORDER AS ANNEXURE WHICH ARE AVAILABLE ON RECO RD. AS THERE IS NO DISPUTE REGARDING VALUATION DONE BY TH E DEPARTMENT, THE ASSESSEE HAS ACCEPTED THE SETTLEMENT COMMISSION'S DIRECTION AND HAS EVEN PAID, INTEREST AND PENALTY LEVIED BY THAT DEPARTMENT. ALL THE DOCUMENTS RELATING TO THE ACTIONS TAKEN BY THE DRI ARE ON RECORD, AS A PART OF ASSESSMENT ORDER. IT IS UNDENIABLE CASE THAT ONLY ON THE BASIS OF DET AILS FOUND IN THE PEN DRIVE HAS SURRENDERED RS. 2,29,99,849/- IN RESPECT OF TRA NSACTIONS, WE ARE NOT IN AGREEMENT WITH OTHER STATEMENT OF ID. COUNSEL FOR T HE ASSESSEE THAT AS PER PROVISIONS OF SECTION 69C, THE SURRENDERED AMOUNT H AS TO BE CONSIDERED IN THE ASSESSMENT YEAR 2007-08 ONLY. THE ASSESSEE HA S HIMSELF ACCEPTED THE ENTIRE SURRENDERED AMOUNT WHICH IS UNDOUBTEDLY ASSE SSEE'S EXPENDITURE FOR PURCHASE OF KATHA AND, AS PER THE DETAILS FOUND IN PEN DRIVE THIS SURRENDER HAD BEEN CORRECTLY SEGREGATED. WE HAVE GONE THROUGH THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE BUT WE DO NOT FIND ANY MERIT IN 32 THEM. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HA S BEEN UNDER-INVOICING ITS IMPORT OF KATHA FOR THE LAST MANY YEARS AND AS PER DETAILS COLLECTED BY THE DRI, IMPORT WAS MADE THROUGH 34 INVOICES DURING TH E PERIOD FROM 26.8.2004 TO 23.8.2007. THE FIRM WAS PAYING DIFFERENTIAL AMOU NT ACTUAL PURCHASE AMOUNT AND BILLED THE PURCHASE MOUNT IN CASH FROM U NDISCLOSED SOURCES. THE ACTUAL AMOUNT OF PURCHASE HAS BEEN COMPUTED BY THE DRI AND HAS TERMED IT AS ACTUAL ASSESSABLE VALUE. THIS DIFFERENTIAL PRICE IN PURCHASES HAS BEEN ACCEPTED BY THE ASSESSEE AND IT HAS ALSO P AID DIFFERENTIAL CUSTOM DUTY ALONG WITH INTEREST WHILE FILING PETITION BEFORE THE CUSTOM AND CENTRAL EXCISE DEPTT. IT IS A REALIT Y OF LIFE THAT ON-MONEY HAS TO BE PAID SIMULTANEOUSLY WHEN THE PURCHASES ARE MA DE. IT IS REVEALED THAT PURCHASES WERE MADE IN DIFFERENT YEARS, THEN DEFINI TELY CASH WAS PAID IN THOSE DIFFERENT YEARS ONLY. THE ASSESSEE HAS NOT BR OUGHT ANY EVIDENCE THAT THE ENTIRE CASH PAYMENT WAS MADE DURING THE RELEVAN T PERIOD PRIOR TO ASSESSMENT YEAR 2007-08 AS HAS BEEN CLAIMED. IT IS ALSO A FACT THAT NO SUCH EVIDENCE OF PAYMENT OF ALL PURCHASES MADE IN ONE YE AR WAS FOUND DURING THE COURSE OF SEARCH. IN THE/PRINTOUT TAKEN FROM PEN DR IVE, DETAILS OF 21 ORDERS PLACED, BETWEEN PERIODS STARTING FROM 25.4.2006 UPT O 28.9.2006 ARE NOTICED. THE ORDERS AT 51. NO. I TO 8 AND 10 TO 17 ARE COVERED BY ENTRIES AT 51. NOS. 20 TO 22 AND 24 TO 32 AS PER ANNEXURE P AT TACHED WITH ASSESSMENT ORDER. THIS ANNEXURE CONTAINED DETAILS OF IMPORT OF KATHA AS PER CHART APPENDED, AS ANNEXURE A OF THE SHOW CAUSE NOTICE IS SUED BY THE DRI. 33 REMAINING FIVE ORDERS AT SI. NO. 9 AND 18 TO 21 PER TAINED TO PURCHASES MADE BY M/S DINESH TOBACCO INDUSTRIES. OBVIOUSLY, THESE 17 ORDERS REVEALED FROM PEN DRIVE ARE COVERED UNDER 12 INVOICES WHICH PERTA IN TO FINANCIAL YEAR 2006-07. THE DIFFERENCE BETWEEN ACTUAL PURCHASE PRI CE AND DECLARED PRICE OF THESE INVOICES INCLUDING ONE MORE INVOICE PERTAI NING TO FINANCIAL YEAR 2006-07 COMES TO RS. 90,15,140/-. THIS AMOUNT HAS B EEN CONSIDERED AS UNEXPLAINED, INVESTMENT IN ASSESSMENT YEAR 2007-08 BY THE A.O. A CON-JOINT EFFECT OF THE STATEMENT AND PRINT OUT OF PEN DRIVE CLEARLY DEPICTS THAT THE ENTIRE AMOUNT OF RS. 2,22,99,849/- PAID IN CASH OUT SIDE THE BOOKS OF ACCOUNTS RELATE TO DIFFERENT YEARS AS STATED ABOVE. WE MAY REPEAT THAT THERE IS NO EVIDENCE OF CASH PAYMENT HAVING BEEN MA DE BY THE FIRM IN THE PERIOD RELEVANT ONLY TO ASSESSMENT YEAR 2007-08 FOR ALL THE PURCHASES MADE EVEN IN THE EARLIER YEARS. THE ASSESSEE HAS NOT EVE N PRODUCED ANY IOTA OF EVIDENCE IN THIS REGARD. NOTHING IN SUPPORT OF THE ABOVE CONTENTION OF THE ASSESSEE WAS FOUND DURING SEARCH. SO, WE UPHOLD THE ADDITION REGARDING UNDER-INVOICING OF THE PURCHASES MADE BY THE FIRM I N THE RELEVANT YEAR. AS THE HONBLE JURISDICTIONAL ITAT HAS ALREADY ADJUDICA TED THE ISSUE AGAINST THE ASSESSEE AND GIVEN A VERY SPECIFIC FINDING THAT THE AMOUNT IS TO BE TAXED IN RESPECT OF RELEVANT A.Y. THEREFORE THE ACTION OF TH E AO FOR TAXING SUCH AMOUNT OF RS. S67498/- IN A.Y. 2008-09 IS CONFIRMED . THEREFORE, THE GROUND OF APPEAL WAS ACCORDINGLY DISMISSED BY THE LD. CIT( A). 34 6. BEFORE US IT WAS STATED THAT THE SURRENDER MADE BY SHRI NAND KISHORE MALANI, AS INDIVIDUAL, HAS BEEN ACCEPTED BY THE APP ELLATE TRIBUNAL [ITAT], AND BECAUSE THESE AMOUNTS ARE ALSO INCLUDED IN THE SURRENDERED AMOUNT, NO SEPARATE ADDITIONS CAN BE MADE IN THIS ASSESSEES H ANDS. THE LD. D.R. HAS ALSO AGREED WITH THIS FACTUAL POSITION. 7. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE ALSO IN AGREEMENT WITH THE SUBMISSIONS MADE BY LD. A.R. AS WE ARE THE AUTHOR O F ALL THOSE ORDERS OF THIS GROUP. WE HAVE GONE THROUGH THE ORDER OF THIS BENCH RENDERED IN THE CASE OF MALANI RAMJIWAN JAGANNATH VS DCIT IN ITA NOS. 1 36/JU/2011 A.Y. 2008-09 DATED 11/03/2013. WE ARE SATISFIED THAT BOT H THE ADDITIONS WHICH ARE REFERRED TO IN THE GROUNDS OF THIS APPEAL STAND COVERED IN THE SURRENDERED AMOUNT OF RS. 2,29,99,849/- MADE BY SHRI N.K. MALANI. WE HAVE ALSO GONE THROUGH THE ORDER OF THIS BENCH R ENDERED IN THE CASE OF M/S. D.C. TRADING VS DCIT IN ITAS 13 TO 15/ JU/2011 FOR A.YS. 2005-06 TO 2007-08 DATED 07/11/2012. AS PER PAGE 6 PARA 4 OF THE ORDER, AN AMOUNT OF RS. 5,67,498/- IS RELATED TO A. Y. 2008-09 IN THIS ASSESSEES CASE. THEREFORE, THIS ISSUE ALREADY STAN DS DECIDED AGAINST THE ASSESSEE. THIS AMOUNT HAS TO BE CONSIDERED IN A.Y. 2008-09, I.E. THE YEAR UNDER CONSIDERATION. ACCORDINGLY, GROUND NO. 3 IS DECIDED AGAINST THE ASSESSEE. 35 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH AUGUST, 2013. SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2013. V L /- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR