DCIT, New Delhi V. M/s Link Engineers Pvt. Ltd., New Delhi

ITA 968/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69161 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHUMONA SEN
• Keywords: Search and seizure; Additional evidence; Wrong claim; Accommodation entries; Onus to prove; Retraction
• Section: 133A; 32; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI) BEFORE SHRI U. B. S. BEDI, JUDICIAL MEMBER AND SHRI B. C. MEENA, ACCUNTANT MEMBER ITA NO. 968 & 2248/ DEL/ 2011 (ASSESSMENT YEAR 2006-07) DCIT/JCIT, CC-09, VS. M/S. LINK ENGINEERS PVT. LT D., DELHI 4/3, KALKAJI EXTN., NEW DELHI PAN : AAACL1307N (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K SAMPATH, ADV. REVENUE BY: MS. SHUMONA SEN, SR. DR ORDER PER U.B.S.BEDI, JUDICIAL MEMBER : THESE TWO APPEALS OF THE DEPARTMENT ARE DIRECTED A GAINST TWO SEPARATE ORDERS OF LD. CIT(A) II, DELHI PASSED ON 15.10.2010 AND 28.02.2011 FOR THE ASSESSMENT YEARS 2006-07 & 2005-06 RESPECTIVELY. 2. SINCE THESE APPEALS INVOLVE SOME COMMON ISSUES A ND WERE HEARD TOGETHER, THE SAME ARE BEING DISPOSED OF BY A SINGL E ORDER FOR THE SAKE OF CONVENIENCE. AS IN THE ORDER FOR ASSESSMENT YEAR 2 005-06, THE ORDER FOR THE ASSESSMENT YEAR 2006-07 HAS BEEN FOLLOWED, THEREFOR E, WE FIRST TAKE UP THE CASE IN I.T.A. NO. 968/DEL/2011 FOR THE ASSESSMENT YEAR 2006-07. THE DEPARTMENT IN THIS CASE HAS RAISED THE FOLLOWING GR OUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE , THE LD CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 1.00 CRORE ON I.T.A. NO.968, 2248 /DEL/2011 2 ACCOUNT OF BOGUS CLAIM OF CONSULTANCY CHARGES PAYME NTS TO M/S T&G QUALITY MANAGEMENT CONSULTANTS LTD, WHICH WAS MANAG ED & CONTROLLED BY AN ADMITTED ENTRY PROVIDER SH. S. K. GUPTA, TO THE ASSESSEE'S DISCLOSURE OF RS. 50.00 LAKHS WITHOUT AN Y JUSTIFICATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CA SE, THE LD C1T(A) HAS ERRED IN NOT FULLY APPRECIATING THE FACT THAT D ISCLOSURE ~ ACCOUNT OF BOGUS CLAIM OF CONSULTANCY CHARGES PAYMENTS TO M /S T&G QUALITY MANAGEMENT CONSULTANTS LTD WAS MADE BY THE ASSESSEE COMPANY DURING THE SURVEY OPERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5,25,000/ - MADE B E AO 0 ACCOUNT OF UNSUBSTANTIATED PAYMENTS OF SOFTWARE DEV ELOPMENT CHARGES TO M/S HI TECH COMPUTECH (P) LTD, ANOTHER COMPANY M ANAGED & CONTROLLED BY AN ADMITTED ENTRY PROVIDER SH. S. K. GUPTA . 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 10.00 LAC S ON ACCOUNT OF PERSONAL EXPENSES OF SH. SIDDHARTH SIKKA, DIRECTOR OF THE ASSESSEE COMPANY WITHOUT FULLY APPRECIATING THE NATURE, SCAL E AND THE MODE OF PAYMENTS THEREOF. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF RS. 20.00 LACS ON ACCOUNT OF REPAIR & MAINTENANCE ~ EXPENSES INCURRED ON THE RESIDENCE OF DIRECTOR OF THE ASSESSEE COMPANY TO RS . 10.00 LACS WITHOUT GIVING ANY BASIS OR JUSTIFICATION FOR THE S AME. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR A MEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARIN G OF THE APPEAL.' 2.1 SIMILARLY, THE GROUNDS OF APPEAL OF THE DEPARTM ENT IN I.T.A. NO. 2248/DEL/2011 FOR THE ASSESSMENT YEAR 2005-06 ARE A S UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION AMOUNTING TO RS.77,92,000/- TO I.T.A. NO.968, 2248 /DEL/2011 3 RS.22,92,000/- MADE BY A.A. ON ACCOUNT OF DEPRECIAT ION OF THE SOFTWARE CLAIMED TO HAVE BEEN PURCHASED FROM M/S BT TECH NET LTD., PAYMENT OF PROFESSIONAL CHARGES TO M/S T&G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. AND PAYMENT OF COMMISSION OF M/S KRISHNA INFOMEDIA LTD. ON ACCOUNT OF ASSESSEE'S DISCLOSURE OF RS.50.00 LAKHS WITHOUT ANY JURISDICTION. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) HAS ERRED IN NOT FULLY APPRECIATING THE FACTS THAT THE ABOVE MENTIONED THREE COMPANIES WERE THE COMPANIES CONTROLLED AND M ANAGED BY AN ADMITTED ENTRY PROVIDER SH. S.K. GUPTA. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE LD . CIT(A) HAS ERRED IN NOT FULLY APPRECIATING THE FACT THAT DISCLOSURE OF RS.50.00 LAKHS WAS MADE BY THE ASSESSEE COMPANY DURING THE SURVEY OPER ATION ON ACCOUNT OF ACCOMMODATION ENTRIES OBTAINED BY THE AS SESSEE FROM THE COMPANIES CONTROLLED AND MANAGED BY AN ADMITTED ENT RY PROVIDER SH. S.K. GUPTA. 4. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND N OT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AM END ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARIN G OF THE APPEAL. 3. THE WRITTEN SUBMISSIONS OF THE DEPARTMENT FILED BEFORE THE BENCH FOR BOTH THE YEARS ARE AS UNDER: THE MAIN CASE IS THAT FOR A.Y. 2006-07 & THE FACTS AND CIRCUMSTANCES AS WELL AS THE ADDITIONS MADE IN THE ORDER FOR A.Y. 2005-06 ARE SIMILAR AND FOLLOW THE ORDER FOR A.Y. 2 006-0. THE FACTS OF THE CASE HAVE BEEN GIVEN FROM PAGES 1 TO 6 OF THE ORDER FOR A.Y. 2006-07. THE GROUND WISE SUBMISSIONS ARE A S UNDER:- GROUNDS 1 TO 3 - FROM THE FACTS EMERGING OUT OF TH E ASSESSMENT ORDER IT IS CLEAR THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION ON SHRI S.K. GUPTA AND THE SUBSEQUENT SURVEY ON THE ASSEESSEE, THAT THERE WAS NO DOCUMENTARY EVIDENCE AVAILABLE WITH EI THER PARTY TO SUBSTANTIATE THAT ANY CONSULTANCY HAD BEEN PROVIDED TO THE ASSESSEE BY M/S T & G QUALITY MANAGEMENT CONSULTANTS AND THE REFORE THE PAYMENT OF RS. 1 CRORE MADE BY THE ASSESSEE ALLEGED LY AS CONSULTANCY I.T.A. NO.968, 2248 /DEL/2011 4 CHARGES PAYMENTS, WERE BOGUS IN NATURE. IT IS APPAR ENT THAT THE BILLS RAISED FOR THIS WERE ONLY IN THE NATURE OF ACCOMMOD ATION BILLS AS NO SPECIFIC SERVICES HAD BEEN PROVIDED BY THE COMPANIE S CONTROLLED BY SHRI. S.K. GUPTA THE ADDITIONS MADE ON ACCOUNT OF CONSULTANCY CHARGE S TO M/S. T & G QUALITY MANAGEMENT CONSULTANTS LTD. AND SOFTWARE DE VELOPMENT CHARGES TO M/S HI TECH COMPUTECH (P) LTD. WERE NOT ONLY BASED ON THE STATEMENTS RECORDED ON OATH DURING THE SEARCH A ND SURVEY PROCEEDINGS, OF SHRI S.K GUPTA AND SHRI M.D GUPTA, THE LATTER BEING THE DIRECTOR OF THE ASSESSEE COMPANY, BUT ALSO THE FACT THAT NO DOCUMENTARY EVIDENCE OTHER THAN BILLS WERE FOUND WH ICH COULD SUPPORT THE FACT THAT THE RELEVANT SERVICES HAD BEE N PROVIDED BY THE COMPANIES OF SHRI S.K GUPTA. THERE WAS NO WRITTEN C ORRESPONDENCE, E-MAILS ETC TO SUBSTANTIATE THE FACT THAT SERVICES HAD BEEN RENDERED. HENCE IT WAS APPARENT THAT THE BILLS WERE ONLY IN T HE NATURE OF ACCOMMODATION BILLS AND NO SERVICES HAD BEEN PROVID ED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. FOUND THAT THE FINAL ACCOUNTS ENCLOSED WITH THE RETURN INCOME REVE ALED THAT ASSESSEE HAD NOT SHOWN ITS ADMITTED DISCLOSURE OF RS. 50 LAK HS, MADE AT THE TIME OF SURVEY U/S 133A OF THE IT ACT. THE ASSESSEE 'S REPLY WAS A CASE OF RETRACTING FROM THE DISCLOSURE MADE AT THE TIME OF SURVEY ON ITS PREMISES. HENCE AFTER CONFRONTING THE ASSESSEE WITH THE DISCREPANCIES FOUND DURING THE SURVEY, THE ADDITIONS WERE MADE AS EVEN DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT PR<:> .DUCE ANY DOCUMENTARY EVIDENCE TO JUSTIFY THE PAYMENTS MADE T O THE CONCERNS OF SHRI S.K GUPTA. THE FOLLOWING CASES ARE BEING RELIED UPON IN SUPPOR T OF THE ADDITIONS MADE BY THE A.O :-, (A) THE BURDEN OF PROOF WAS ON THE ASSESSEE TO PROD UCE EVIDENCE IN SUPPORT OF ITS CONTENTIONS AND CLAIM THAT CONSULTAN CY CHARGES AS WELL AS SOFTWARE DEVELOPMENT CHARGES WHICH WERE PAID BY IT WERE ACTUALLY IN LIEU OF SERVICES HAVING BEEN RENDERED TO THE ASS ESSEE. THIS HAS BEEN HELD IN A PLETHORA OF JUDGEMENTS, A FEW OF WHICH AR E LISTED BELOW. (I) 86 ITR 439 (SC) LACHMINARAYAN MADAN LAL V. CO MMISSIONER OF INCOME TAX (II) 164 TAXMAN 67 (DELHI) PRECISION ELECTRONICS LTD. V. DY. COMMISSIONER OF INCOME TAX (III) 188 TAXMAN 27 (DELHI) SAGA DEPARTMENTAL STO RES LTD. V. COMMISSIONER OF INCOME TAX I.T.A. NO.968, 2248 /DEL/2011 5 (IV) 15 TAXMANN.COM 112(DELHI) COMISSIONER OF INC OME TAX V. MODI STONE LTD. (V) 19 ITR 240(ALL.) NIHORI LAL PRABHUDAYAL V. COM MISSIONER OF INCOME TAX (VI) 19 TAXMANN.COM 70 (GUJ.) GUJARAT INSECTICIDE S LTD.V. ASSISSTANT COMMISSIONER OF INCOME TAX (VII) 20 TAXMANN.COM630(PUNJ.&HAR.) COMMISSIONER OF INCOME TAX(CENTRAL) LUDHIANA V. PUNJAB BREWERIES LTD. (VIII) 128 ITD 12(DELHI). ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 19(1)V. PUNJAB STAINLESS STEEL INDUSTRIES. (B) VARIOUS COURTS HAVE HELD THAT PURSUANT TO SURVE Y, BURDEN LAY ON ASSESSEE TO ESTABLISH THAT ADMISSION MADE AT TIME O F SURVEY WAS WRONG AND SUBSEQUENT RETRACTION COULD NOT BE ACCEPTED. (I) 184 TAXMAN 467(DELHI) KARUN DUBE V. ASSISTANT COMMISSIONER OF INCOME TAX (II) 118 TAXMAN 252(ALL.) DR. S.C. GUPTA V. COMMIS SIONER OF INCOME TAX IT MAY FURTHER BE ELABORATED HERE THAT COURTS HAVE ALSO HELD, INCLUDING THE JURISDICTIONAL HIGH COURT IN 196 TAXM AN 488(DELHI), AND IN 300LTR 157(MAD), THAT WHETHER THOUGH AN ADMI SSION MADE DURING SURVEY IS EXTREMELY IMPORTANT PIECE OF EVIDE NCE IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO PERSON ,WHO HAS MADE THE ADMISSION, TO SHOW THAT IT IS INCORRECT. THE ABOVE MENTIONED DECISION OF THE MADRAS HIGH COURT HAS BEEN UPHELD BY THE HON 'BLE SUPREME COURT IN 25 TAXMANN.COM 413(SC). AN EXAMINATION OF THE SAID JUDGEMENTS POINT TOWARDS THE FACT THAT EVEN IN THE CASE UNDER CONSIDERATION, THE STATEMENTS RECORDED WERE NOT BEI NG TREATED AS CONCLUSIVE EVIDENCE. RATHER, ALL THE CIRCUMSTANTIAL EVIDENCE SURROUNDING THE CASE, INCLUDING THE FACT THAT THERE WAS NO EVIDENCE WITH THE ASSESSEE, TO SUPPORT HIS RETRACTION FROM T HE STATEMENT MADE EARLIER, IN THE FORM OF ANY EVIDENCE, DOCUMENTARY O R OTHERWISE. HENCE, HE COULD NOT IN THIS CASE PROVE, HOW IT WAS OPEN TO HIM TO SHOW THAT THE STATEMENTS MADE WERE INCORRECT. WITHOUT PREJUDICE TO THE ABOVE, IT MAY BE ADDED HER E THAT EVEN IF THIS HAD BEEN A CASE WHERE NO STATEMENT HAD BEEN RECORDE D, THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SO HEAVILY STACKED AG AINST THE ASSESSEE, AS IS EVIDENT FROM THE DETAILS GIVEN ABOVE. THE ASS ESSEE HAD NO EVIDENCE AT HAND WHATSOEVER TO MAKE OUT A CASE AS T O WHY THE PAYMENTS HAD BEEN MADE BY HIM AND THEREFORE HIS CAS E IS SQUARELY I.T.A. NO.968, 2248 /DEL/2011 6 COVERED BY THE JUDGEMENTS QUOTED ABOVE WHEREIN ALLO WABILITY OF SUCH EXPENSES, WHERE NO EVIDENCE EXISTS, CANNOT BE ALLOW ED. 4. LD. D.R. SUBMITTED IN RESPECT OF GROUNDS NO.4-5 AS UNDER: GROUNDS NO.4 & 5 - THE A.O MADE AN ADDITION OF RS. 10 LAKHS ON ACCOUNT OF BUSINESS PROMOTION EXPENSES AS HE FOUND THAT THESE PAYMENTS HAD BEEN MADE THROUGH CREDIT CARDS OF THE DIRECTOR OF THE COMPANY AND CONSISTED OF PAYMENTS MADE FOR COSTLY I TEMS OF STATIONARY, CLOTHING, CHINA/CRYSTAL/SILVER WARE, CO SMETICS, PERFUMES, TOYS ,VLCC BEAUTY PARLOUR PAYMENTS, COSTLY HOTELS A ND RESTAURANTS ETC. THE ASSESSEE COULD GIVE ANY EVIDENCE TO SUPPOR T HIS CLAIM THAT SUCH EXPENSES WERE FOR THE PURPOSE OF BUSINESS. THE A.O ALSO MADE AN ADDITION OF RS. 2 LAKHS UNDER THE HEAD RENOVATION EXPENSES AS THE SAME WERE FOUND TO BE IN CURRED IN THE RESIDENCE OF THE DIRECTOR OF THE COMPANY AND THEREF ORE COULD NOT HAVE BEEN ALLOWED AS A BUSINESS EXPENSE. THE ID CIT(A) FAILED TO APPRECIATE THE ABOVE FACTS OF THE CASE. FURTHER, THE ADDITIONS WERE WRONGLY DELETED, AS A.O HAD CORRECTLY MADE THE ABOVE MENTIONED ADDITIONS AND HE WAS ALSO WELL WITHIN HIS RIGHTS TO CALL FOR THE EVIDENCES SOUGHT BY HIM AND WHICH THE ASSESSEE FAILED TO PRODUCE. THE COURTS HAVE HELD IN VARIOUS CASES INCLUDING IN 59 ITR 562 (SC) IN CHATRASINHJI KESARISHJI THAKORE V. COMMISSIONER OF INCOME TAX AND IN 12 TAXMAN 185 (MAD.) V. DATOHI NAMURTHY VS. NATRAJAN V. ASSTT. DIRECTOR OF INSPECTION, THAT IT IS ENTIRELY FOR INCOME TAX AUTHORITIES TO DETERMINE WHAT EVIDENCE THEY CON SIDERED RELEVANT FOR PURPOSES OF THEIR ENQUIRY AND TO CONTEND WHAT C ERTAIN PIECE OF EVIDENCE WHICH THEY CONSIDERED TO BE RELEVANT WAS N OT RELEVANT AT ALL TO MATTER AT ISSUE, WOULD BE IN A WAY TO ENCROACH U PON THEIR DOMAIN. 5. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE DEPARTMENT HAS MERELY REITERATED THE FINDINGS IN THE ASSESSMENT ORDER AS SUBMISSIONS TO THE GROUNDS NO.1-3 TAKEN IN THE MEMO OF APPEAL. LD. D.R. DID N OT CONTROVERT ANY FINDING REPRODUCED IN THE ORDER OF THE FIRST APPELL ATE AUTHORITY WHO PARTLY CONFIRMED THE ASSESSMENT ORDER AND THE CASE LAW CIT ED AND RELIED UPON BY THE LD. D.R. ARE NOT APPLICABLE TO THE FACTS OF THE PRE SENT CASE. I.T.A. NO.968, 2248 /DEL/2011 7 6. THE ORDER OF LD. CIT(A) HAS TO BE APPRECIATED IN THE BACKGROUND OF THE FACTS PLEADED AND EVIDENCE FILED BEFORE HIM DUR ING THE COURSE OF APPELLATE PROCEEDINGS. IN THE COURSE OF SEARCH OPE RATION, CARRIED ON 12.12.2006 AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI S.K. GUPTA AND HIS VARIOUS CONCERNS IN WHICH HE HAD INTEREST U/S 1 32 OF THE ACT. THE STATEMENT OF SHRI S K GUPTA WAS RECORDED ON 12.12.2 006 U/S 132(4) OF THE ACT. LATER, ON 27.12.2007, STATEMENT OF SHRI S K G UPTA WAS AGAIN RECORDED BY THE DIRECTORATE OF INVESTIGATION U/S 131 OF THE ACT. SHRI S.K. GUPTA IN HIS STATEMENT STATED THAT HIS CONCERNS RAISED BILLS FOR SERVICES ONLY TO PROVIDE ACCOMMODATION ENTRIES TO THE ASSESSEE AND OTHER COM PANIES. IT WAS STATED THAT NONE OF THE CONCERNS RENDERED ANY SERVICES TO THE ASSESSEE OR OTHER COMPANIES ON WHOM BILLS WERE RAISED. IN THIS APPEA L THE ASSESSEES CONCERNED WITH PAYMENT MADE BY THE ASSESSEE TO TWO CONCERNS OF SHRI S K GUPTA, VIZ T & G QUALITY MANAGEMENT CONSULTANTS (P) LTD WHO WAS PAID RS.1 CRORES AS CONSULTANCY FEE FOR THE ASSESSMENT Y EAR 2006-07 AND M/S. HIGH TECH COMPOUTECT (P) LTD WHO WAS PAID RS.5.25 L ACS FOR AMC AND FOR UPGRADATION OF MIS SOFTWARE. 7. THE WRITTEN SUBMISSIONS FILED BY THE LD. A.R. AR E AS UNDER: THE ASSESSEE IS IN RECEIPT OF THE WRITTEN SUBMISSI ONS FILED BY THE LD. DR FOR AY 2006-07 BEFORE THE HON'BLE BENCH. OUR SUB MISSIONS IN REPLY BE CONSIDERED. AT THE OUTSET IT IS MOST RESPECTFULLY SUBMITTED THA T THE LD. DR HAS MERELY REITERATED THE FINDINGS IN THE ASSESSMENT OR DER AS SUBMISSIONS TO THE GROUND NOS. 1 TO 3 TAKEN IN THE MEMORANDUM O F APPEAL. THE LD. DR DOES NOT CONTROVERT ANY FINDINGS RECORDED IN THE ORDER OF THE FIRST APPELLATE AUTHORITY WHO PARTLY CONFIRMED THE ORDER OF ASSESSMENT. THE CASE LAWS CITED AND RELIED UPON BY THE LD. DR ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (AP PEALS) {(HEREIN AFTER REFERRED TO AS CIT(A)} HAS TO BE APPRECIATED IN THE BACKGROUND OF THE FACTS PLEADED AND EVIDENCE FILED BEFORE HIM DURING THE COURSE OF I.T.A. NO.968, 2248 /DEL/2011 8 APPELLATE PROCEEDINGS. IN THIS CASE, SEARCH OPERATI ONS WERE CARRIED OUT ON 12.12.2006 AT THE BUSINESS AND RESIDENTIAL P REMISES OF SHRI S.K. GUPTA AND HIS VARIOUS CONCERNS IN WHICH HE HAS INTEREST, UNDER SECTION 132 OF THE ACT. THE STATEMENT OF SHRI S K G UPTA WAS RECORDED ON 12.12.2006 UNDER SECTION 132 (4) OF THE ACT. LAT ER, ON 27/12/07 STATEMENT OF SHRI S K GUPTA WAS AGAIN RECORDED BY T HE DIRECTORATE OF INVESTIGATION UNDER SECTION 131 OF THE ACT. SHRI S K GUPTA IN THE AFORESAID STATEMENTS STATED THAT HIS CONCERNS RAISE D BILLS FOR SERVICES ONLY TO PROVIDE ACCOMMODATION ENTRIES TO THE ASSESS EE AND OTHER COMPANIES. IT WAS STATED THAT NONE OF THE CONCERNS RENDERED ANY SERVICE TO THE ASSESSEE OR OTHER COMPANIES ON WHOM BILLS WERE RAISED. IN THIS APPEAL WE ARE CONCERNED WITH PAYMENTS MADE BY THE ASSESSEE TO TWO CONCERNS OF SHRI S K GUPTA VIZ ; T&G QUALITY MANAGEMENT CONSULTANTS (P) LTD WHO WERE PAID RS 1,00,00,000/- AS CONSULTANCY FEE FOR AY 2006-07. M/S HIGH TECH COMPUTECT (P) LTD WHO WAS PAID RS 5,2 5,000/- FOR AMC AND FOR UPGRADATION OF MIS SOFTWARE. BASED ON THE SAID STATEMENT RECORDED ON 12/12/06, S URVEY OPERATIONS WERE CARRIED OUT IN THE PREMISES OF THE ASSESSEE UN DER SECTION 133A OF THE ACT. DURING THE SURVEY ONE OF THE DIRECTORS OF THE, ASSESSEE COMPANY SHRI M. D. GUPTA, UNDER DURESS AND PRESSURE , ADMITTED IN A STATEMENT RECORDED ON OATH ON 27/28/12/06 THAT SERV ICES WERE NOT RENDERED BY THE SAID CONCERNS OF SHRI S K GUPTA. TH IS LED TO THE SURRENDER DURING SURVEY OF RS. 50 LACS FOR EACH OF THE ASSESSMENT YEARS 2005-06 AND 2006-07. HOWEVER THE ASSESSEE COM PANY STUCK TO THEIR RETURN FILED WHICH DID NOT INCLUDE THE ABOVE DISCLOSURE MADE DURING SURVEY PROCEEDINGS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE AO MADE ADDITIONS TO THE INCOME RETURNED BY THE ASSESSEE. T HE ADDITIONS MADE WERE BASED MAINLY ON THE STATEMENTS OF SHRI S K GUP TA RECORDED ON 13/06/2006 AND 27/12/07. THE AO ALSO RELIED ON OTHE R STATEMENTS OF SHRI S K GUPTA RECORDED ON 22/10/2008, 24/10/2008, 3/11/2008, 17/12/2008 AND 18/12/08, RECORDED DURING ASSESSMENT PROCEEDING OF SHRI S K GUPTA. ALL THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSEE. THE ASSESSING OFFICER ALSO RELIED 'ON THE STATEMENT OF SHRI M D GUPTA DATED 27/28/12/06. THE APPELLANT FILED APPE AL BEFORE THE FIRST APPELLATE AUTHORITY ASSAILING THE ORDERS OF THE AO. BEFORE THE FIRST APPELLATE AUTHORITY DETAILED WRITTEN SUBMISSIONS WE RE FILED AND ALSO AN APPLICATION U/S 46A OF THE ACT TO BRING ON RECOR D ADDITIONAL EVIDENCE. IN THE SUBMISSIONS AND EVIDENCE SUBMITTED TO THE FIRST I.T.A. NO.968, 2248 /DEL/2011 9 APPELLATE AUTHORITY THE ASSESSEE HAD PLACED ON RECO RD CERTIFICATE DATED 26/02/2010 OF SHRI S.K. GUPTA RETRACTING FROM ALL HIS STATEMENTS GIVEN BY HIM AGAINST THE ASSESSEE. IT WAS PLEADED I N THE CERTIFICATE THAT THE STATEMENTS WERE RECORDED UNDER PRESSURE AN D DURESS AND ACTUALLY SERVICES HAVE BEEN RENDERED BY HIS CONCERN S. SIMILARLY SHRI MD. GUPTA, DIRECTOR OF THE ASSESSEE COMPANY ALSO IN HIS AFFIDAVIT RETRACTED HIS STATEMENTS MADE DURING THE SURVEY. TH E DETAILED SUBMISSIONS MADE BY THE ASSESSEE AND THE APPLICATIO N FOR ADMISSIONS OF ADDITIONAL EVIDENCES WERE FORWARDED TO THE AO FO R A REMAND REPORT. INSPITE OF REPEATED OPPORTUNITY GIVEN BY TH E LD. COMMISSIONER OF INCOME-TAX (APPEALS) THE AO FAILED TO FILE ANY R EMAND REPORT AND IN THESE CIRCUMSTANCES THE LD. CIT(A) DECIDED THE A PPEAL ON THE BASIS OF THE MATERIAL ON RECORD. THE LD. CIT(A) CAME TO . CONCLUSION THAT THE STATEMENTS OF SHRI S.K. GUPTA AND SHRI M.D. GUPTA C OULD NOT BE RELIED UPON. THE SUBMISSIONS OF THE ASSESSEE ON THE BASIS OF WHICH THE STATEMENTS OF THE ABOVE TWO PERSONS STOOD REJECTED IS AS UNDER:- I(A) THAT THE STATEMENT OF SHRI S.K. GUPTA RECORD ED ON 13.12.2006 AND 27.12.2006 (PAGES 11 TO 34 OF THE PB ) WERE NOT PROVIDED TO THE APPELLANT DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AND WERE GIVEN TO THE APPELLANT ONLY AS PER THE DIR ECTIONS OF THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS A FTER REPEATED REQUESTS WERE MADE IN WRITING (PAGES 35T039 OF PB). AS REGARDS OTHER STATEMENTS ONLY EXTRACTS WERE PROVIDED THAT TO ON T HE DIRECTIONS OF THE CIT(A). ALL STATEMENTS HAVE BEEN TAKEN AT THE BACK OF THE ASSESSEE. THERE WAS NO OPPORTUNITY PROVIDED FOR CROSS EXAMINA TI0N OF SHRI S.K. GUPTA IN SPITE OF REQUESTS MADE IN WRITING BY THE A SSESSEE (PAGES 40- 41 OF PB). THEREFORE THE STATEMENTS HAVE NO EVIDENT IARY VALUE AND HENCE TO BE IGNORED. RELIANCE IS PLACED ON THE DECI SION OF JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF S ONA ELECTRIC CO. VS. CIT 152 ITR 507, THE APEX COURT IN THE CASES OF KIS HANDCHAND CHELLARAM V. CIT 125 ITR 713 AND KATRA GLUE FACTORY V SN 167 ITR 498. (B) SHRI S.K. GUPTA HAS IN A CERTIFICATE RETRACTE D FROM THE STATEMENT RECORDED DURING THE SEARCH AND HE HAD DEN IED EVERYTHING STATED IN RELATION TO THE ACCOMMODATION ENTRIES BEI NG PROVIDED TO THE ASSESSEE (PAGE 42-45 OF PB). THE AO HAS NOT REBUTTE D THE CERTIFICATE OF SHRI S.K. GUPTA DURING THE APPELLATE PROCEEDINGS . THE ASSESSEE VIDE SUBMISSION DATED 24.10.2008 HAD P OINTED OUT THAT SHRI S.K. GUPTA IN A STATEMENT TO THE SEARCH PARTY (ANNEX A-2 TO THE ASSESSMENT ORDER) HAS CATEGORICALLY STATED ON 24.10 .2008 IN ANSWER TO I.T.A. NO.968, 2248 /DEL/2011 10 QUESTION NO.1 THAT THE TOTAL ACCOMMODATION IN THIS CASE WOULD BE 15 TO 20% IN ALL. THIS CAN BE VERIFIED FROM THE PROFIT & LOSS AC2:OUNT OF T & G QUALITY MANAGEMENT CONSULTANTS PVT. LIMITED A S PER WHICH ITS' TOTAL INCOME IS RS.120 LACS. IF THE STATEMENT OF SH RI S.K. GUPTA IS TAKEN TO THE LOGICAL END THEN THE FAIR VALUE OF THE ACCOMMODATION GIVEN WOULD AT BEST THE RS.24 LACS WHICH IS MUCH LO WER THAN THE SURRENDER OF RS.50 LACS OFFERED FOR ASSESSMENT., TH E PRINCIPAL OF LAW IS THAT ANY STATEMENT MADE BY A PERSON HAS TO BE TA KEN AS A WHOLE. IT IS NOT PERMISSIBLE FOR DIVIDING THE STATEMENT INTO PARTS AND USING SUCH PARTS AS EVIDENCE AS WOULD SUIT ONES' PURPOSE. THE ASSESSING OFFICER HAS DONE JUST THAT FORBIDDEN ACT. IF THE STATEMENT OF SHRI S.K. GUPTA WAS SO SACROSANCT AS TO COMPEL THE CONSIDERATION OF THE ENTIRE AMOUNT AS PAID TO HIM AS SPURIOUS THEN ON THE SAME AUTHORI TY THE OTHER PART OF THE STATEMENT OF SHRI S.K. GUPTA ASSERTING THAT ONL Y 15-20% OF THE WHOLE COULD BE COLOURED AND NOT HAVE BEEN IGNORED A T ALL. I(A) THE STATEMENT ON OATH RECORDED DURING THE SURV EY PROCEEDINGS OF SHRI M.D. GUPTA (PAGES 46 TO 60 OF PB) ACCEPTING TH E ACCOMMODATION ENTRIES AND SURRENDERING INCOME DURING THE SURVEY P ROCEEDINGS ALSO HAS NO EVIDENTIARY VALUE. RELIANCE IS PLACED ON THE DECISION OF THE KERALA HIGH COURT JUDGEMENT PAUL MATHEWS & SON V. C IT 263 ITR 101 AND THE APEX COURT IN CIT V. S. KHADER & SON VS CIT 300 ITR 157 AND OF THE TRIBUNAL IN TDI MARKETING PVT. LTD. VS. ACIT 28 SOT 215. IN THIS WAY THE STATEMENT OF SHRI M.D. GUPTA W AS NON EST AND NOT ADMISSABLE IN ASSESSMENT. (B) SHRI M.D. GUPTA ALSO RETRACTED FROM THE STATEM ENT RECORDED DURING THE SURVEY PROCEEDINGS. THE AO HAS NOT REBUT TED OR ASSAILED THE STATEMENT BEFORE THE LD. CIT (A). (C) SHRI M.D. GUPTA WAS NOT THE DIRECTOR (OPERATIO NS). HE WAS THE DIRECTOR ([FINANCE). HE THUS KNEW VERY LITTLE OF TH E INTRICACIES OF TECHNICAL OPERATIONS. YET, HE CONFIRMED THAT THE OP ERATIONAL DETAILS REGARDING CARRYING OUT THE ASSIGNMENT WERE IN THE C OMPUTERS AT HIS PREMISES. THE ONLY DEFICIENCY WAS THAT HE WAS UNABL E TO IDENTIFY THE PARTICULAR COMPUTER WHICH CONTAINED THE DETAILS OF THE TECHNICAL SERVICES. THAT BY ITSELF COULD NOT BE HELD ADVERSE TO THE ASSESSEE. (D) THE ASSESSING OFFICER LOOKED FOR EVIDENCE REGA RDING RENDERING OF THE TECHNICAL SERVICES AT THE WRONG PLACES. THE SERVICES WERE RENDERED BY THE STAFF OF SHRI S.K. GUPTA AT THE PRE MISES OF MIS LMZ ENERGY INDIA LIMITED. SHRI GUPTA'S STAFF WAS ENGAGE D FULL TIME WORKING AT THE PREMISES OF MIS LMZ ENERGY INDIA LIM ITED. SO ALL PROOF WITH REGARD TO THE RENDERING OF SERVICE WAS A VAILABLE AT THE I.T.A. NO.968, 2248 /DEL/2011 11 PREMISES MIS LMZ ENERGY INDIA LIMITED WHO HAD UTILI ZED THE TECHNICAL SERVICES. THE ASSESSING OFFICER ERRONEOUS LY LOOKED TO THE PREMISES OF THE ASSESSEE AND THAT OF SHRI S.K. GUPT A FOR SUCH EVIDENCE. (E) SHRI S.K. GUPTA'S COMPANY WERE HAVING TECHNICA L EXPERTS WHO HAD ACTUALLY HELPED IN THE DISCHARGE OF THE TECHNIC AL SERVICES. OUT OF THE GROSS RECEIPTS OF RS.113 LACS SHRI S.K. GUPTA H AD SPENT AROUND RS.98.88 LACS BY WAY OF OUTGOING ON ACCOUNT OF SOFT WARE EXPENSES AND REMUNERATION TO THE TECHNICAL STAFF WAS RS.9.83 LACS. IT WAS, THEREFORE, WRONG ON THE PART OF THE ASSESSING OFFIC ER TO DOUBT SHRI S.K. GUPTA'S CAPACITY AND POTENTIAL FOR RENDERING S OFTWARE SERVICES. III) ON MERITS THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AT PAGES 1 TO 6 OF THE PAPER BOOK IS RELIED UPON. THE LD. DR HAS ALSO NOT COMMENTED ON THE DECISION O F THE CIT(A) WHO CONFIRMED ADDITION TO THE EXTENT OF RS. 50 LACS IN EACH OF THE ASSESSMENT ORDERS BASED ON THE STATEMENT OF THE CHA IRMAN AND THE MANAGING DIRECTOR SHRI S.K. SIKKA AND THE LETTER DA TED 13.10.2010 CONFIRMING THE DECLARATION MADE BY SHRI SIKKA ON AD DITIONAL INCOME FOR TWO YEARS. THE STATEMENT OF THE MANAGING DIRECT OR IS IN TUNE WITH THE DISCLOSURE MADE DURING THE SURVEY PROCEEDINGS A S A MATTER OF SETTLEMENT. AS REGARDS THE OTHER ADDITIONS THE LD. DR HAS NOT A SSAILED THE ORDERS OF THE CIT(A) AND HE MERELY REITERATED WHAT HAS BEE N STATED IN THE ASSESSMENT ORDER. RELIANCE PLACED ON THE CASE LAWS ARE THEREFORE NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. THE ASSESSEE HAS PRODUCED ALL PROOF THAT WAS NECESS ARY TO SUPPORT ITS CONTENTIONS. IT IS RATHER THE AO WHO HAS NO PROOF O R SUPPORT IN RESPECT OF HIS CONTENTIONS IN TERMS OF THE AUTHORITIES AS E XPLAINED AND STATED HEREINABOVE. THE SURVEY STATEMENT WAS INADMISSIBLE AS EVIDENCE IN THE LIGHT OF THE DECISION OF THE SUPREME AUTHORITIE S ON THE POINT. THE CONSIDERATION OF THE STATEMENTS BEING BASED AT THE THRESHOLD ITSELF, THERE IS NO SCOPE FOR EXAMINING THEIR MERITS. ALL C ASE LAWS AS CITED ON BOTH THE ASPECTS BY THE LD. DR ARE OUT OF CONTEXT A ND OTIOSE. EFFECTIVELY THE GROUND AS RAISED IN APPEAL IS MISCO NCEIVED BECAUSE THE LD. CIT(A) UPHELD THE ADDITION ON MERITS. I.T.A. NO.968, 2248 /DEL/2011 12 THE LD. C1T(A) APPRECIATED THE EVIDENCE BEFORE HIM TO COME TO THE CONCLUSION THAT CONSULTANCY SERVICES HAD BEEN RENDE RED BY MIS TNG QUALITY MANAGEMENT CONSULTANTS. THE EVIDENCE FILED BEFORE HIM ARE THE AGREEMENT ENTERED INTO BETWEEN MIS TNG QUALITY MANAGEMENT CONSULTANTS AND THE ASSESSEE PURSUANT TO WHICH THE SAID TNG QUALITY MANAGEMENT CONSULTANTS HAD TO RENDER A NUMBER OF SE RVICES WHICH ARE ITEMIZED AND RECORDED IN THE ORDER OF THE CIT(A ). (E) TNG QUALITY MANAGEMENT CONSULTANTS WHO WERE TO RENDER SERVICES TO A MULTI-NATIONAL COMPANY VIZ. LMZ (INDIA) LTD WITH WH OM THE ASSESSEE HAD ENTERED INTO AN AGREEMENT AS CONSULTANT FOR WHI CH A FEE OF RS. 4,35,00,000/- HAD BEEN PAID. (F) THE PAN NUMBERS AND THE ACCOUNTS OF TNG QUALI TY MANAGEMENT CONSULTANTS WERE ALSO PRODUCED. (G) LIST OF PROFESSIONALS WORKING FOR TNG QUALITY MANAGEMENT CONSULTANTS WERE ALSO PLACED BEFORE THE C1T(A). THESE PROFESSIO NALS WERE PAID SALARY FOR THE SERVICES RENDERED BY THEM (H) SIMILARLY EVIDENCES WERE ALSO FILED PROVING T HE SERVICES RENDERED BY M/S STRATEGIC COMPONENTS PVT. LTD. IT IS SUBMITTED THAT THE APPELLANT COMPANY ENTERED INTO CONSULTANCY AGREEMENT DATED 30.08.2004 WITH M/S LMZ ENERGY (IND IA) LTD. FOR BARH SUPER THERMAL POWER PROJECT (3 X 660 MW) FOR W HICH THE APPELLANT COMPANY WAS TO RECEIVE TOTAL CONSULTANCY FEE OF RS. 8,65,00,000/-. THE APPELLANT COMPANY FOR DISCHARGE OF ITS CONSULTANCY SERVICES TO M/S LMZ ENERGY (INDIA) LTD. AVAILED THE SERVICES OF M/S T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. TO FUL FILL VARIOUS DELIVERABLES OF THE CONSULTANCY AGREEMENT BECAUSE O F NON-AVAILABILITY OF SPECIALIZED SKILLS WITH THE APPELLANT COMPANY M/ S T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. ~ INFORMATION ABOUT LOCAL SUPPLIERS AND SERVICE VEN DORS AND VET THE QUOTATIONS GIVEN BY THEM; ~ TO NEGOTIATE AS AND WHEN NECESSARY WITH VARIOUS V ENDORS FROM TIME TO TIME ON NEED BASIS; ~ TO ASSIST IN IDENTIFICATION OF LOCAL ENGINEERING AND MACHINE FACILITIES IN AND ROUND BARH IN PARTICULAR AND STAT E OF BIHAR ETC. AS MAY BE NECESSARY; I.T.A. NO.968, 2248 /DEL/2011 13 ~ TO GIVE VARIOUS TYPES OF INFORMATION AS DESIRED B Y THE LMZ FROM TIME TO TIME; ~ INFORMATION ABOUT ALL LOCAL TAXES PREVALENT IN TH E STATE OF BIHAR. IT IS FURTHER SUBMITTED THAT DURING THE SUBSISTENCE OF THE AFORESAID CONSULTANCY AGREEMENT, THE APPELLANT COMPANY DID NO T RECEIVE ANY COMPLAINT FROM M/S. LMZ ENERGY (INDIA) LTD. REGARDI NG THE SERVICES PROVIDED BY M/S. T & G QUALITY MANAGEMENT CONSULTAN TS PVT. LTD. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT THE AP PELLANT COMPANY RECEIVED PART CONSULTANCY FEE OF RS.4,35,00,0001- F ROM M/S. LMZ ENERGY (INDIA) LTD DURING THE YEAR UNDER CONSIDERAT ION. THE FOLLOWING DOCUMENTARY EVIDENCE WERE FILED DURING THE COURSE O F ASSESSMENT PROCEEDINGS TO PROVE THE GENUINENESS OF THE TRANSAC TION BETWEEN THE APPELLANT COMPANY AND M/S. T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. COPY OF CONSULTANCY AGREEMENT DATED 30.08.2004 BETW EEN LMZ ENERGY (INDIA) LTD. AND THE APPELLANT COMPANY IS PL ACED AT PAGES 74- 80. THE SCOPE OF CONSULTANT TO BE PROVIDED BY THE A PPELLANT COMPANY IS AT PAGE 76 WHICH IS REPRODUCED BELOW:- (A) TO KEEP THE CUSTOMER INFORMED ABOUT LOCAL CONDI TIONS AT THE SITE TO PROVIDE ANY SUPPORT TO THE CUSTOMER AT THE SITE, IN CLUDING ARRANGEMENTS WITH LOCAL AUTHORITIES AND OBTAINING T HE REQUIRED PERMITS FROM THEM; (B) TO PROVIDE THE CUSTOMER INFORMATION RELATED TO GEOLOGICAL CONDITIONS TO FACILITATE HIS AWARENESS FOR TAKING D ECISIONS IN RELATION TO CONSTRUCTION ACTIVITY AT THE SITE AND A PROPER A RRANGEMENTS FOR ARTESIAN WATER; (C) TO PROVIDE INFORMATION ABOUT LOCAL SUPPLIERS, S ERVICE AND WORK VENDORS, TO COLLECT REQUIRED QUOTATIONS FROM THEM F OR SCOPE ASSIGNED BY THE CUSTOMER. (D) TO PROVIDE THE ADOPTED TECHNICAL AND COMMERCIAL INFORMATION TO THE CUSTOMER, TO TALK AND TO NEGOTIATE WITH VENDORS AS PER INSTRUCTIONS OF THE CUSTOMER; E) TO PROVIDE THE CUSTOMER WITH UP-TO-DATE INFORMAT ION REGARDING LOCAL TAXES AND FEES VALID IN BIHAR STATE FOR THE E NTERING THE TERRITORY OR PERFORMANCE THERE; (F) TO LOCATE LOCAL FACILITIES NEAR BARH OR OTHER P LACES IN BIHAR FOR MACHINING OF THE ITEMS TO BE REQUIRED BY THE CUSTOM ER DURING. EXECUTION OF THE RECEIVED CONTRACT (CONTRACTS) TO C OLLECT QUOTATIONS FROM THE OWNERS OF THE SAID FACILITIES FOR SCOPE AS SIGNED BY THE I.T.A. NO.968, 2248 /DEL/2011 14 CUSTOMER, TO ASSIST THE CUSTOMER IN TIMELY EXECUTIO N OF THE ASSIGNED SCOPE; (G) TO INTERACT WITH CLIENTS ON BEHALF OF THE CUSTO MER AS IT MAY BE DESIGNATED BY THE CUSTOMER, TO ASSIST THE CUSTOMER IN EXECUTION OF ALL ORDERS RECEIVED BY THE CUSTOMER TILL FINAL PAYMENT (H) TO INFORM THE CUSTOMER ABOUT ACTIVITIES OF HIS COMPETITORS AND THE CONCERNED FIRMS/GROUPS IN THE REGION OF THE SITE.' (II) COPY OF INVOICE DATED 2.4.2005 FOR RS. 1,00,0 0,000/- ISSUED BY M/S T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. PLACED AT PAGE 81 FOR TECHNICAL CONSULTANCY CHARGES FOR THE POWER PROJECT. (III) CONFIRMED COPY OF ACCOUNT OF THE APPELLANT I N THE BOOKS OF T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. FOR TH E YEAR UNDER CONSIDERATION DATED 1.4.2006 AT PAGE 82 ALONG WITH COPY OF LETTER DATED 1 .4.2006 ISSUED BY M/S T & G QUALITY MANAGEM ENT CONSULTANTS PVT. LTD. CONFIRMING RECEIPT OF RS.1,00 ,00,000/- FOR SERVICES RENDERED BY IT TO M/S LMZ ENERGY (INDIA) L TD. AT PAGE 83. (IV) COPY OF PAN OF T & G QUALITY MANAGEMENT CONSU LTANTS PVT. LTD. AT PAGE 84. (V) COPIES OF THE FOLLOWING LETTERS AS FILED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS:- > DATED 5.6.2008, COPY PLACED AT PAGES 85-86 > DATED 23.6.2008, COPY PLACED AT PAGES87-93 > DATED 1.12.2008, COPY PLACED AT PAGES 94-96 > DATED 10.12.2008, COPY PLACED AT PAGES 97-99 (VI) LIST OF THE QUALIFIED PROFESSIONALS WORKING FOR T & G QUALITY MANAGEMENT CONSULTANTS PVT. LTD. FOR THE YEAR UNDER CONSIDERATION ARE PLACED AT PAGES 100; (V) COPY OF CONSULTANCY RECEIVED ACCOUNT FOR THE Y EAR UNDER CONSIDERATION PLACED AT PAGES 101 . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS PRAYED THAT DISALLOWANCE OF RS.1,00,00,000/- ON ACCOUNT OF CONSULTANCY CHARGES MAY KINDLY BE DELETED. AT ANY RATE, WITHOUT PREJUDICE, THE DISALLOWANCE AS MADE IS EXCESSIVE. PLACED FOR MOST FAVOURABLE CONSIDERATION. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERI AL ON RECORD AS WELL AS CASE LAW CITED BY THE RIVAL SIDES. WE HAVE ALSO CONSIDERED THE CONSOLIDATED WRITTEN SUBMISSIONS FILED BY THE LD. D .R. AND LD. COUNSEL FOR I.T.A. NO.968, 2248 /DEL/2011 15 THE ASSESSEE FOR BOTH THE YEARS AS WELL AS ORDERS O F LD. CIT(A). AFTER CAREFULLY CONSIDERING THE ARGUMENTS AND WRITTEN SUB MISSIONS OF BOTH THE SIDES IN THE LIGHT OF CASE LAWS CITED, WE FIND THAT LD. CIT(A) HAS PASSED A WELL REASONED AND ELABORATE ORDER FOR BOTH THE YEAR S CONSIDERING EACH AND EVERY ASPECT OF THE MATTERS IN DETAIL AND THE BASIS AND REASONING AS GIVEN BY LD. CIT(A) ARE FOUND TO BE JUST AND APPROPRIATE. I N THE ABSENCE OF ANY CONTRARY MATERIAL HAVING BEEN PLACED ON RECORD, WE DO NOT FIND ANY REASONABLE BASIS TO INTERFERE IN THE ORDER PASSED B Y LD. CIT(A), WHICH ARE UPHELD FOR BOTH THE YEARS AND BOTH THE APPEALS OF T HE DEPARTMENT ARE DISMISSED. 5. IN THE RESULT BOTH THE APPEALS OF THE DEPARTMENT ARE DISMISSED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND AUGUST, 2013. SD./- SD./- (B. C. MEENA) (U.B.S.BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER SP. DT.: 02 ND AUG., 2013 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI AR, ITAT, 5. CIT(ITAT), NEW DELHI NEW DELHI