The ACIT, 2 (1), V. M/s Anand Traders,

ITSSA 102/IND/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8379 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 30-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S DESHPANDE
• Assessee Lawyers: KESHAV SAXENA
• Keywords: Rejection of books of accounts; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Peak credit; Bad and doubtful debts; Notional interest; Revised return; Documents seized
• Section: 153A

Judgement Text

- 1 - THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NOS. 65 TO 71/IND/08 A.YS.1998-1999 TO 2004-05 M/S ANAND TRADERS UJJAIN PAN AACFA-4861-B APPELLANT VS ASSTT. COMMR. OF INCOME TAX 2(1) UJJAIN RESPONDENT IT(SS)A NOS. 99 TO 103/IND/08 AND 110 &111/IND/08 A.YS. 1998-99 TO 2004-05 ASSTT. COMMR. OF INCOME TAX 2(1) UJJAIN APPELLANT VS M/S ANAND TRADERS UJJAIN RESPONDENT ASSESSEE BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI KESHAV SAXENA, CIT DR O R D E R PER JOGINDERE SINGH,JUDICIAL MEMBER THIS BUNCH OF 14 APPEALS BELONGING TO THE SAME ASSESSEE INVOLVES COMMON ISSUES, HENCE THESE WERE H EARD - 2 - TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CON SOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. 3. FIRSTLY, WE SHALL TAKE UP THE ASSESSEES APPEAL IN IT(SS)A. NO. 65/IND/08 (A.Y. 1998-99). THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER :- 1. THAT THE LEARNED CIT, APPEAL ERRED IN ADDING A SUM OF RS.11,17,452/- OUT OF A SUM OF RS.21,17,452/ - BEING THE AMOUNT STANDING IN PARTNERS CAPITAL A/C O F APPELLANTS AS OPENING BALANCE CARRIED FORWARD FROM EARLIER YEARS WHICH IS WRONG & UNJUSTIFIED BECAUSE OF FOLLOWING REASONS :- A. THAT PARTNERS AND FIRM ARE DIFFERENT ASSESSABLE ENTITIES AND OPENING BALANCE OF PARTNERS A/C CANNOT BE CONSIDERED AS FIRMS INCOME. B. THAT OPENING BALANCES IN PARTNERS CAPITAL OF APPELLANT REPRESENTED CARRIED FORWARD BALANCE OF CAPITAL OF PARTNERS OF EARLIER YEARS I.E. ASSESSMENT YEAR 1997-98 AND PRECEDING YEARS AND ARE THEREFORE DO NOT PERTAIN TO THE ASSESSMENT YEAR 1998-99 AND THEREFORE RELATES - 3 - TO THE PERIOD NOT COVERED BY SEC. 153A. 2. THAT THE LEARNED CIT APPEAL ERRED IN DISALLOWING BAD DEBTS CLAIMED OF RS.1,85,003/- CLAIMED UNDER SECTION 36(1)(VII) UNDER SECTION 28(1) OF THE INCOM E TAX ACT, 1961 AS IRRECOVERABLE ADVANCES MADE TO THE MILK SUPPLIER IN THE ORDINARY COURSE OF BUSINES S AND ALL THESE WERE FOUND RECORDED IN SEIZED MATERIAL WHICH IS WRONG AND UNJUSTIFIED. 3. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.66,709/- BY ESTIMATING THE SALES OF APPELLANT AT RS.17,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPAL OF NATUR AL JUSTICE AND THEREFORE IS WRONGLY AND UNJUSTIFIED. 4. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED AND NOT BACKED BY THE FACTS OF THE CASE. 4. GROUND NOS. 3 AND 4 WERE NOT PRESSED, HENCE, DISMISSED AS NOT PRESSED. 5. BRIEFLY, THE FACTS OF THE CASE ARE THAT THERE W AS A SEARCH UNDER SECTION 132(1) OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE. SURVEY UNDER SECTION 133 A - 4 - OF THE ACT WAS ALSO CARRIED OUT AT THE SAME PREMIS ES. SIMULTANEOUSLY, SEARCH AND SEIZURE PROCEEDINGS WERE CONDUCTED AT THE RESIDENTIAL PREMISES OF PARTNER, S HRI PRATAPRAI ROHERA AND SHRI RAMESH CHANDRA ROHERA. DURING THESE PROCEEDINGS SEVERAL LOOSE PAPERS RELAT ING TO THE ASSESSEE HAVE BEEN SEIZED. THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT , FILED REVISED RETURN FOR THE ASSESSMENT YEAR 1998-99 SHOWING TAXABLE INCOME OF RS.6,420/- ON 20 TH OCTOBER, 2005 WHICH WAS PROCESSED UNDER SECTION 143(1) OF TH E ACT. THEREAFTER, THE ASSESSMENT WAS COMPLETED BY T HE ASSESSING OFFICER ON TOTAL INCOME OF RS.25,92,475/- . 6. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF MILK AND MILK PRODUCTS. THE ASSESSEE PURCHASES MILK FROM FARMERS AND VILLAGERS AND SELLS IN WHOLESALE AND RE TAIL. THE ASSESSEE ALSO MANUFACTURES GHEE, PANNER, ETC. AND SELLS THE SAME IN WHOLESALE AND RETAIL. FROM T HE BUSINESS PREMISES, SOME LOOSE PAPERS, ACCOUNT BOOKS AND REGISTERS WERE SEIZED DURING SEARCH AND SEIZURE - 5 - PROCEEDINGS. ON THE BASIS OF LOOSE PAPERS WHICH WE RE FOUND AT THE TIME OF SEARCH AND ON THE BASIS OF KIS AN KHATA FOR EARLIER PERIODS AND THE TWO BOOKS SEIZED BS 1/37 AND BS-1/38, THE ASSESSEE PREPARED THE COMPUTERISED BOOKS OF ACCOUNTS INCORPORATING ALL TH E ENTRIES, ALSO PREPARED THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION. IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE AC T , THE RETURN FOR THE PREVIOUS YEAR WAS FILED DECLARIN G THE INCOME ON THE BASIS OF THE COMPUTERISED BOOKS OF ACCOUNTS. THE ADVANCES, WHICH WERE GIVEN DURING THE YEAR UNDER CONSIDERATION, AGAINST WHICH NO SUPPLY W AS MADE BY THE SUPPLIERS, WERE CLAIMED AS TRADING LOSSES/BAD DEBTS. THE ASSESSEE SUBMITTED BEFORE TH E AUTHORITIES BELOW THAT THERE WAS NO RECOVERY OF ANY AMOUNT FROM THESE PERSONS. THE SUPPLY OF MILK WAS ALSO STOPPED ON THE GROUND THAT CATTLE WAS DEAD OR DISPOSED OF DUE TO DROUGHT CONDITION. 7. THE SEIZED BOOK NOS. BS-1/37 AND BS-1/38 CONTAIN ED THE DETAILS OF UNRECOVERABLE ADVANCES OF EARLIER YE ARS. THESE AMOUNTS WERE DULY TAKEN INTO ACCOUNT WHILE WORKING OUT THE PEAK VALUE OF ADVANCES OF THE ASSESSMENT YEAR, UNDER CONSIDERATION. SINCE THESE - 6 - ADVANCES WERE OVERDUE FOR A LONG PERIOD AND WERE NO N- RECOVERABLE, THESE WERE WRITTEN OFF IN THE COMPUTER ISED BOOKS. ON THIS BASIS, THE UNDISCLOSED INCOME HAD B EEN WORKED OUT AND ACCORDINGLY THE RETURN OF INCOME UND ER SECTION 153A OF THE ACT WAS FILED BY THE ASSESSEE. 8. THE SEIZED LOOSE PAPERS WERE IN RESPECT OF THE S ALES MADE. SOME OF THESE LOOSE PAPERS WERE VASULI SLIP S WHICH WERE IN RESPECT OF RECOVERIES TO BE MADE FROM THE FARMERS AGAINST THE ADVANCES MADE TO THEM BY THE ASSESSEE FOR PURCHASE OF MILK. THE ASSESSING OFFIC ER EXAMINED ABOUT 15 FARMERS AND ALL THE FARMERS, EXCE PT 2 OR 3, ACCEPTED THE TRANSACTIONS AND STATED THAT THE Y WERE NOT ABLE TO SUPPLY MILK FOR SOME REASON OR THE OTHE R AND NOTHING COULD BE RECOVERED FROM THEM. THE ASSESSIN G OFFICER ALSO EXAMINED 12 PERSONS ON THE DIRECTIONS OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). AL L THESE PERSONS, EXCEPT TWO, ACCEPTED HAVING TAKEN TH E ADVANCE FROM THE ASSESSEE AS ALSO THE FACT OF NON- PAYMENT OF THE ADVANCES TAKEN FROM THE ASSESSEE. 9. THE ASSESSEE FIRM BASED UPON THE LOOSE PAPERS, BOOKS OF ACCOUNTS, REGISTERS AND OTHER DOCUMENTS - 7 - SEIZED DURING THE COURSE OF SEARCH AND ON THE BASIS OF KISAN KHATA MAINTAINED BY THE ASSESSEE FOR THE PERI OD FROM 1.4.1994 TO 31.3.2001, PREPARED COMPUTERISED BOOKS OF ACCOUNTS AND FILED RETURN UNDER SECTION 15 3A OF THE ACT ON THAT BASIS. THE ASSESSING OFFICER DID NOT ACCEPT THE COMPUTERISED BOOKS OF ACCOUNTS FOR THE REASON THAT KISAN KHATA WAS NOT FOUND DURING THE CO URSE OF SEARCH. THE ASSESSING OFFICER ALSO HELD THAT IN THE BOOKS OF ACCOUNTS SO PREPARED, THE ASSESSEE HAD ADOPTED A DEVICE TO SHOW THE INCOME OF ONE SIDE AND TO CLAIM THE BAD DEBT ON THE OTHER SIDE AS TO REDUCE I TS INCOME. THE ASSESSING OFFICER THEREAFTER EXAMINED T HE CLAIM OF THE ASSESSEE IN REGARD TO BAD DEBTS AND FO UND THAT THE CONDITIONS OF SECTION 36(2) HAD NOT BEEN COMPLIED WITH AS THE SAME HAD NOT BEEN TAKEN INTO CONSIDERATION WHILE COMPUTING THE INCOME OF EARLIER ASSESSMENT YEAR, HENCE, HE REJECTED THIS CLAIM OF T HE ASSESSEE FOR THIS REASON. THE ASSESSING OFFICER ALS O HELD THAT THE CLAIM TO THIS EXTENT HAD ALSO NOT BEE N MADE EARLIER. 10. APART FROM THIS, THE ASSESSING OFFICER EXAMINED THE CAPITAL ACCOUNT SHOWN IN SUCH BOOKS AND FOUND THAT IN THE CAPITAL ACCOUNT OF THE PARTNERS, THERE WERE CRE DITS - 8 - OF CAPITAL TO THE EXTENT OF RS. 15 LACS AND RS. 7 L ACS, THE SOURCE OF WHICH CAME FROM THE INCOME DECLARED I N VDIS-1997 WHICH RESULTED INTO AN INFERENCE BY THE ASSESSING OFFICER THAT THE ASSESSEE WAS INDULGED IN EARNING INCOME FROM UNDISCLOSED SOURCES EARLIER AS WELL. THE ASSESSING OFFICER THEREAFTER EXAMINED TH E CAPITAL ACCOUNT IN THE BOOKS OF THE ASSESSEE FIRM I N SET NO. 2 OF BOOKS OF ACCOUNTS AND COMPARED THE SAME FROM SET NO. 1 AND HELD THAT THE OPENING CAPITAL TO THE EXTENT OF RS. 21,17,452/- IN SET NO. 2 WAS UNDISCLO SED INCOME OF THE ASSESSEE FIRM FOR THE YEAR , UNDER CONSIDERATION, AS NO TAX HAD BEEN PAID THEREON NOR THE SOURCE/BASIS THEREOF HAD BEEN EXPLAINED PROPERLY. 11. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 12. AS REGARDS THE ALLOWABILITY OF ITS CLAIM OF BAD DEBTS, THE ASSESSEE RELIED UPON VARIOUS DECISIONS FOR THE PROPOSITION THAT AS PER THE AMENDED LAW, THE ASSESS EE WAS REQUIRED ONLY TO WRITE OFF THE BAD DEBT IN ITS BOOKS OF ACCOUNTS AS IRRECOVERABLE AND IT WAS NOT REQUIRE D TO PROVE THE FACT THAT THE DEBT HAS ACTUALLY BECOME BA D. THE ASSESSEE ALSO MADE AN ALTERNATIVE CLAIM FOR - 9 - ALLOWABILITY OF NON-RECOVERABLE ADVANCES GIVEN TO T HE FARMERS AND MILK SUPPLIERS UNDER SECTION 28(1) ITSE LF AND RELIED UPON FOR THIS PROPOSITION ON THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF BADRIDAS DAGA; 34 ITR 10 AND OTHER JUDICIAL DECISIONS AS WELL. TH E LEARNED COMMISSIONER OF INCOMETAX (APPEALS), HOWEVER, HELD THAT THE GENUINENESS OF THE BOOKS I.E . SET NO. 2, WAS IN ITSELF DOUBTFUL AS THE SAME WAS B ASED UPON KISAN KHATA PRODUCED ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THIS ACTION OF THE ASSESSEE ALSO INDICATED THAT THE TRANSACTIONS AS CONVENIENT TO THE ASSESSEE WERE ONLY RECORDED HENCE HE REJECTED THE CLAIM OF THE ASSESSEE. 13. AS REGARDS THE OPENING CAPITAL TO THE EXTENT OF RS.21,17,452/- SHOWN BY TWO PARTNERS, THE ASSESSEE PLEADED THAT IT WAS A CASE OF OPENING BALANCE OF PARTNERS CAPITAL ACCOUNT AS ON 1.4.1997 BROUGHT FORWARD FROM EARLIER YEARS, HENCE, THE SAME COULD N OT BE TAXED IN THE YEAR , UNDER CONSIDERATION. THE ASSESSEE ALSO SUBMITTED THAT SUCH OPENING BALANCE HAD BEEN ARRIVED AT ON THE BASIS OF KISAN KHATA WHI CH HAS BEEN TOTALLY OVERLOOKED. THE ASSESSEE ALSO PLEADED THAT THERE WAS NO MATERIAL FOUND DURING THE - 10 - COURSE OF SEARCH OR OTHERWISE WHICH COULD LEAD TO A N INFERENCE THAT THIS AMOUNT BELONGED TO THE ASSESSEE . THE ASSESSEE ALSO RELIED UPON VARIOUS JUDICIAL DECISIONS. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS), HOWEVER, TAKING CUE FROM THE TURNOVER ESTIMATED BY THE ASSESSING OFFICER OUTSIDE THE BOOK S OF ACCOUNTS, HELD THAT THE INVESTMENT IN UNDISCLOSE D BUSIENSS COULD BE REASONABLY ESTIMATED AT RS.11,17,452/-. HENCE, HE GAVE RELIEF OF RS. 10 LA CS. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 14. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROCESSING AND SELLING OF MILK AND MILK PRODUCTS FOR 15 20 YEARS AND IN THE COURSE OF SUC H BUSINESS, THE ASSESSEE HAD TO GIVE ADVANCES TO MILK SUPPLIERS WHO WERE MAINLY FARMERS. AS A CONSEQUENC E OF SURVEY, WHICH WAS CONVERTED INTO SEARCH, THE ASSESSEE FILED RETURNS ON THE BASIS OF SEIZED BOOKS TITLED AS BS-1/37 AND BS-1/38 WHICH ALSO CONTAINED THE DETAILS OF UNRECOVERABLE ADVANCES OF EARLIER YEARS WHICH WERE TAKEN INTO ACCOUNT WHILE WORKING OUT THE PEAK VALUE OF ADVANCES OF THE RELEVANT YEAR. IT WA S CONTENDED THAT SINCE THESE WERE LONG OVER DUE AND - 11 - WERE NON-RECOVERABLE, HENCE, THESE WERE WRITTEN OFF ON YEAR TO YEAR BASIS IN THE COMPUTERISED BOOKS I.E. S ET NO. 2. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHE R REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES. 15. ON THE OTHER HAND, THE LEARNED CIT DR CONTENDED THAT THE CONDITION OF SECTION 36(2) OF THE ACT TO CLAIM BAD DEBT WAS NOT SATISFIED FOR THE SIMPLE REASON THAT T HE SAME HAD NOT BEEN TAKEN INTO SALES. AS REGARDS THE ALTERNATE CONTENTION OF THE ASSESSEE TO ALLOW THIS LOSS AS A BUSINESS LOSS, THE LEARNED CIT DR SUBMITTED TH AT THIS WAS RAISED FOR THE FIRST TIME BEFORE THE LEARN ED COMMISSIONER OF INCOMETAX (APPEALS) AND IN THE BACKGROUND OF THE FACTS NARRATED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND THE FACT TH AT THESE WERE SHOWN AS RECOVERABLE IN THE BOOKS SEIZED IN THE COURSE OF SEARCH ALSO, THE YEAR OF ALLOWABIL ITY OF SUCH LOSS HAD ALSO TO BE DETERMINED AND CERTAINLY D UE TO THIS FACT, IT COULD NOT BE SAID THAT THE ASSESSE E SUFFERED BUSINESS LOSS FOR THE YEAR , UNDER CONSIDERATION. IT WAS ALSO POINTED OUT THAT THE LE ARNED COMMISSIONER OF INCOMETAX (APPEALS) HAD ALSO NOT GIVEN ANY FINDING ON THE ASPECT OF IMPUGNED AMOUNT - 12 - UNDER SECTION 28(1) HENCE ON THIS ASPECT THE MATTER COULD GO BACK TO THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 16. THE LEARNED COUNSEL FOR THE ASSESSEE IN REJOIN DER CONTENDED THAT PEAK WAS WORKED OUT ON THE BASIS OF THESE VERY ENTRIES AND WAS TAXED AS INCOME, HENCE, IT WAS NOT CORRECT TO STATE THAT THE SAME HAD NOT BEEN TAKEN INTO CONSIDERATION WHILE COMPUTING THE INCOME , HENCE, THE SAME WAS ALLOWABLE AS BAD DEBT. LEARNED CIT DR ON THIS ASPECT INTERVENED THAT THE ADDITION WAS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE IN SUCH ADVANCES AND NOT ON ACCOUNT OF ANY INCOME BEING OFFERED BY THE ASSESSEE ON ACCOUNT OF MILK SUPPLIED BY THEM WHICH WAS SOLD IN TURN BY THE ASSESSEE EITHER AS MILK AND MILK PRODUCTS. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO REFERRED TO P AGE 138 OF THE PAPER BOOK TO SUBSTANTIATE ITS CLAIM THA T THESE HAD BEEN CONSIDERED IN WORKING OUT THE PEAK. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER REFERR ED TO THE WRITTEN SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER AT PAGES 81 TO 84 OF THE PAPER BOOK TO SHOW THE CIRCUMSTANCES UNDER WHICH SUCH SUM HAD BEEN WRITTEN OFF. - 13 - 17. AS REGARDS THE ISSUE OF OPENING CAPITAL, THE LE ARNED COUNSEL FOR THE ASSESSEE MAINLY REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 18. ON THE OTHER HAND, THE LEARNED CIT DR CONTENDE D THAT THE TURNOVER OF THE UNDISCLOSED BUSINESS WAS RS.1.4 2 CRORES WHICH WAS ESTIMATED BY THE ASSESSING OFFICER AT RS.1.49 CRORES AND DISCLOSED SALES IN THAT YEAR WER E OF RS. 33 LACS. IT WAS ALSO SUBMITTED THAT THE CAPITA L ACCOUNT IN RESPECT OF UNDISCLOSED BUSINESS SHOWED A BALANCE OF RS.30 LACS, HENCE, IF THE QUANTUM OF CAP ITAL REQUIRED WAS TO BE DETERMINED ON THE BASIS OF TURNO VER THEN LEARNED COMMISSIONER OF INCOMETAX (APPEALS) GAVE MORE RELIEF TO THE ASSESSEE AS THE CAPITAL COU LD ONLY BE AROUND RS. 5 LACS. IT WAS ALSO EMPHASIZED ON THIS POINT THAT THE CAPITAL COULD NOT BE MORE THAN THE TURNOVER OR IT COULD BE A CASE OF SUPRESSION OF TUR NOVER. 19. THE LEARNED CIT DR FURTHER CONTENDED THAT THE R IGHT OFF HAD BEEN MADE IN THE BOOKS OF ACCOUNTS OF UNDISCLOSED BUSINESS HENCE IT WAS NOT A CASE OF REGULAR BOOKS OF ACCOUNTS AND, THEREFORE, THE BASIC CONDITIONS OF SECTION 36(1)(VII) OF THE ACT WERE N OT SATISFIED. 20. THE LEARNED COUNSEL FOR THE ASSESSEE AS REGARD THE - 14 - QUANTUM OF OPENING CAPITAL ULTIMATELY LEFT THE MATT ER TO THE DISCRETION OF THE BENCH. 21. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BO TH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. AS REGARDS THE ISSUE OF OPENING CAPITAL, FIRST OF ALL IT IS NOTED THAT NO INCRIMINA TING MATERIAL HAS BEEN FOUND IN THE COURSE OF SEARCH WHI CH CAN BE REFERRED TO DECIDE THE QUANTUM OF OPENING CAPITAL. IT IS ALSO TO BE NOTED THAT THE ASSESSEE I S ENGAGED IN A BUSINESS WHERE ADVANCES TO FARMERS HAVE TO BE GIVEN NECESSARILY. IT IS ALSO NOT IN DI SPUTE THAT THE ASSESSEE HAS INDULGED ITSELF INTO UNDISCLO SED BUSINESS ACTIVITIES. THUS, IN SUCH CIRCUMSTANCES, THE ONLY POSSIBLE WAY TO DETERMINE THE QUANTUM OF UNDISCLOSED INCOME IS TO MAKE AN ESTIMATION. THE ASSESSEE HAD SHOWN THE OPENING BALANCE AT RS.21 LACS APPROXIMATELY WHICH HAS BEEN ESITMATED AT RS.1 1 LACS APPROXIMATELY. THE LEARNED CIT DR HAS STATED THAT THE UNDISCLOSED SALES/DISCLOSED SALES COULD BE ADOPTED AS A BASIS TO DETERMINE THE QUANTUM OF UNDISCLOSED SALES AND FOR THAT PURPOSE, HE HAS ONLY REFERRED TO ASSESSMENT YEAR 2003-04. HOWEVER, ON THAT COUNT, WHAT WAS THE TURNOVER OF EARLIER YEARS AND - 15 - WHAT COULD BE THE QUANTUM OF INVESTMENT IN EARLIER YEARS IS NOT BEFORE US, HENCE, ON THE BASIS OF SOLI TARY FIGURE OF A PARTICULAR ASSESSMENT YEAR, THE SAME CANNOT BE ADOPTED AS A PROPER BASIS FOR THE REASON THAT THERE COULD BE UNRECOVERED ADVANCES OF EARLIER YEAR AND ADVANCES GIVEN IN EARLIER YEARS AS WELL FO R WHICH SUPPLY WAS NOT MADE AND CONSEQUENTLY SALES COULD NOT BE MADE. THUS, IN NUTSHELL, WE HOLD THAT THE INTEREST OF JUSTICE WOULD BE MET IF THE OPENING BAL ANCE IS ESTIMATED AT RS.15 LACS AS AGAINST RS. 11,17,452 /- SUSTAINED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). THUS, THIS GROUND OF THE ASSESSEE STAND S PARTLY ALLOWED. 22. AS REGARDS THE ALLOWABILITY OF BAD DEBTS, ADMIT TEDLY THE SAME HAS NOT BEEN TAKEN IN COMPUTING THE INCOME OF THE ASSESSEE FOR EARLIER YEARS OR THE RELEVANT PREC EDING YEAR, HENCE, CONDITION OF SECTION 36(2) OF THE ACT IS NOT SATISFIED AND, THEREFORE, THE SAME CANNOT BE ALLOWE D AS BAD DEBT. IN THIS REGARD WE FURTHER HOLD THAT THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT ON PEAK BASIS AND WORKED OUT ON SUCH PEAK ON THE BASIS OF SUCH ADVANCES DOES NOT RESULT INTO A SITUA TION WHERE IT CAN BE SAID THAT THESE ADVANCES HAVE BEEN - 16 - TAKEN INTO CONSIDERATION IN COMPUTING THE INCOME OF THE ASSESSEE BECAUSE THE TERM INCOME IN THE CONTEXT O F THE PROVISIONS OF SECTION 36(2) OF THE ACT NECESSA RILY REFERS TO TRADING INCOME AND NOT THE INCOME BY WAY OF UNDISCLOSED INVESTMENT. AS REGARDS THE ALTERNATE C LAIM OF THE ASSESSEE TO ALLOW THESE AS BUSINESS LOSSES UNDER SECTION 28(1) OF THE ACT, WE FIND THAT THE ASSESSEE HAS SHOWN THESE ADVANCES AS RECOVERABLE IN THE SEIZED DOCUMENTS PERTAINING TO THE ASSESSMENT YEAR 2003-04 AND NO EVENT HAS BEEN BROUGHT ON RECOR D BY THE ASSESSEE TO SHOW THAT INCURRANCE OF SUCH LOS S CAN BE ATTRIBUTED TO THE YEAR, UNDER CONSIDERATION, HENCE, SUCH LOSS CANNOT BE ALLOWED AS A BUSINESS LO SS FOR THE YEAR, UNDER CONSIDERATION. THUS, GROUND NO . 2 IS DISMISSED. 23. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 24. ITA NO. 66/IND/2008 (A.Y. 1999-2000) IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL :- 1. THAT THE LEARNED CIT APPEAL ERRED IN DISALLOWING BAD DEBTS CLAIMED OF RS.2,43,399/- CLAIMED UNDER SECTION 36(1)(VII)/UNDER SECTION 28(1) OF THE INCOME TAX ACT, 1961 AS IRRECOVERABLE ADVANCES - 17 - MADE TO THE MILK SUPPLIER IN THE ORDINARY COURSE O F BUSINESS AND ALL THESE WERE FOUND RECORDED IN SEIZED MATERIAL, WHICH IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.70,329/- BY ESTIMATING THE SALES OF APPELLANT AT RS. 19,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATU RAL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY THE FACT S OF THE CASE 25. WE FIND THAT THE ISSUE RAISED IN GROUND NO. 1 I S IDENTICAL TO THE ISSUE RAISED IN GROUND NO. 2 OF ITA NO. 65/IND/08. HENCE, FOLLOWING THE SAME REASONS, WE DISMISS THIS GROUND OF THE ASSESSEE. 26. WE ALSO FIND THAT THE ISSUES RAISED IN GROUND N OS. 2 AND 3 ARE IDENTICAL TO THE ISSUE RAISED IN GROUND N OS. 3 AND 4 OF ITA NO. 65/IND/08, HENCE, DISMISSED AS NOT PRESSED. 27. IN THE RESULT, THE APPEAL IS DISMISSED. - 18 - 28. ITA NO. 67/IND/2008 (A.Y. 2000-01) THE ASSESSEE IN THIS APPEAL HAS RAISED THE FOLLO WING GROUNDS OF APPEAL :- 1. THAT THE LEARNED CIT APPEAL ERRED IN DISALLOWING BAD DEBTS CLAIMED OF RS.5,32,317/- CLAIMED UNDER SECTION 36(1)(VII)/UNDER SECTION 28(1) OF THE INCOME TAX ACT, 1961 AS IRRECOVERABLE ADVANCES MADE TO THE MILK SUPPLIER IN THE ORDINARY COURSE OF BUSINESS AND ALL THESE WERE FOUND RECORDED IN SEIZED MATERIAL, WHICH IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.77,829/- BY ESTIMATING THE SALES OF APPELLANT AT RS. 24,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY THE FACTS OF THE CASE 29. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL TO THE - 19 - ISSUE RAISED IN GROUND NO. 2 OF IT(SS)A NO. 65/IND/ 08 AND GROUND NO. 1 OF IT(SS)A NO. 66/IND/08. HENCE, FOLLOWING THE SAME REASONS GIVEN, WE DISMISS THIS GROUND OF THE ASSESSEE. 30. THE ISSUE RAISED IN GROUND NOS. 2 AND 3 ARE IDE NTICAL TO THE ISSUE RAISED IN GROUND NOS. 2 AND 3 OF IT(SS)A NO. 66/IND/08, HENCE, DISMISSED AS NOT PRESSED. 31. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 32. IT(SS)A NO. 68/IND/08 (A.Y. 2001-02) IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL :- 1. THAT THE LEARNED CIT APPEAL ERRED IN DISALLOWING BAD DEBTS CLAIMED OF RS.1,09,903/- CLAIMED UNDER SECTION 36(1)(VII)/UNDER SECTION 28(1) OF THE INCOME TAX ACT, 1961 AS IRRECOVERABLE ADVANCES MADE TO THE MILK SUPPLIER IN THE ORDINARY COURSE OF BUSINESS AND ALL THESE WERE FOUND RECORDED IN SEIZED MATERIAL, WHICH IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.75,631/- BY ESTIMATING THE SALES - 20 - OF APPELLANT AT RS. 25,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY THE FACTS OF THE CASE 33. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL T O THE ISSUE RAISED IN GROUND NO. 2 OF IT(SS)A NO. 65/IND/08 AND GROUND NO. 1 OF IT(SS)A NO. 66/IND/08. HENCE, FOLLOWING THE SAME REASONS GIVEN, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 34. THE ISSUE RAISED IN GROUND NOS. 2 AND 3 ARE IDE NTICAL TO THE ISSUE RAISED IN GROUND NOS. 2 AND 3 OF IT(SS)A NO. 66/IND/08, HENCE, DISMISSED AS NOT PRESSED. 35. IN THE RESULT, THE APPEAL IS DISMISSED. 36. IT(SS) A NO. 69/IND/08(A.Y. 2002-03) IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL :- - 21 - 1. THAT THE LEARNED CIT APPEAL ERRED IN DISALLOWING BAD DEBTS CLAIMED OF RS.2,98,809/- CLAIMED UNDER SECTION 36(1)(VII)/UNDER SECTION 28(1) OF THE INCOME TAX ACT, 1961 AS IRRECOVERABLE ADVANCES MADE TO THE MILK SUPPLIER IN THE ORDINARY COURSE OF BUSINESS AND ALL THESE WERE FOUND RECORDED IN SEIZED MATERIAL, WHICH IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.89,427/- BY ESTIMATING THE SALES OF APPELLANT AT RS. 25,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY THE FACTS OF THE CASE 37. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL T O THE ISSUE RAISED IN GROUND NO. 2 OF IT(SS)A NO. 65/IND/08 AND GROUND NO. 1 OF IT(SS)A NO. 66/IND/08. HENCE, FOLLOWING THE SAME REASONS - 22 - GIVEN, WE DECIDE THIS GROUND AGAINST THE ASSESSEE AND DISMISS THE SAME. 38. THE ISSUE RAISED IN GROUND NOS. 2 AND 3 ARE IDE NTICAL TO THE ISSUE RAISED IN GROUND NOS. 2 AND 3 OF IT(SS)A NO. 66/IND/08, HENCE, DISMISSED AS NOT PRESSED. 39. IN THE RESULT, THE APPEAL IS DISMISSED. 40. IT(SS)A NO. 70/IND/08(A.Y. 2003-04) FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THIS APPEAL :- 1. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.3,69,215/- BY ESTIMATING THE SALES O F APPELLANT AT RS. 1,45,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATUR AL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN ADDING A SUM OF RS.7,10,742/- BEING THE AMOUNT OF NOTIONAL INTEREST ON ADVANCES MADE TO THE MILK SUPPLIERS, WHICH IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY - 23 - THE FACTS OF THE CASE 41. THE ISSUES RAISED IN GROUND NOS. 1 AND 3 ARE IN RESPECT OF ESTIMATION OF SALES AND GP AND ARBITRARINESS IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WHICH WERE NOT PRESSED, HENCE, WE DISMISS THE SAME AS NOT PRESSED. 42. AS REGARDS THE ISSUE RAISED IN GROUND NO. 2, TH E FACTS IN BRIEF ARE THAT THE ASSESSING OFFICER MADE INQUIRIES IN RESPECT OF ADVANCES GIVEN BY THE ASSESSEE TO MILK SUPPLIERS I.E. MAINLY FARMERS. TH E INQUIRES MADE BY THE ASSESSING OFFICER REVEALED THAT THE ASSESSEE HAD CHARGED INTEREST FROM THE FARMERS ON SUCH ADVANCES AND THE SAME WAS ALSO FOUND RECORDED IN BS1/37 AND BS1/38, HENCE, HE MADE THE IMPUGNED ADDITION. 43. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WHEREIN IT WAS CONTENDED THAT THESE WERE NOTIONAL ENTRIES AND NO ACTUAL OUT-FLOW OF CASH HAD TAKEN PLACE. IT WAS CONTENDED THAT THE INTEREST AMOUNT HAD ALSO BEEN TAKEN INTO CONSIDERATION WHILE WORKING OUT THE PEAK AND THE ADDITION THEREOF AGAIN - 24 - AS INTEREST INCOME AMOUNTED TO TAXATION OF THE SAME AMOUNT TWICE. THE ASSESSEE ALSO PLEADED THAT IF THIS AMOUNT WAS TO BE TAXED AS INTEREST THEN THE CREDIT FOR THE LIKE AMOUNT HAD TO BE ALLOWED IN COMPUTING THE PEAK. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS), HOWEVER, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE REASON THAT IT WAS FOUND IN THE BOOKS SEIZED AND ONE OF THE PARTNERS OF THE ASSESSEE FIRM HAD ALSO ACCEPTED THE SAME IN THE COURSE OF APPELLATE PROCEEDINGS. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 44. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED T HE FACTS AND REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES. 45. ON THE OTHER HAND, THE LEARNED CIT DR PLACED STRONG RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 46. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THAT THE INTEREST CHARGED IS CONSIDERE D WHILE WORKING OUT THE PEAK CREDITS. WE, THEREFORE, - 25 - DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARN ED COMMISSIONER OF INCOMETAX (APPEALS) AND CONFIRM THE SAME. AS SUCH, THIS GROUND IS REJECTED. 47. IT(SS) A NO. 71/IND/08 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL :- 1. THAT THE LEARNED CIT APPEAL ERRED IN MAKING AN ADDITION OF RS.4,05,562/- BY ESTIMATING THE SALES OF APPELLANT AT RS. 1,40,00,000/- AND ESTIMATING THE G.P. OF 15% THEREON PURELY ON GUESS, SURMISE AND CONJECTURES WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THEREFORE IS WRONG AND UNJUSTIFIED. 2. THAT THE LEARNED CIT APPEAL ERRED IN ADDING A SUM OF RS.3,04,367/- BEING THE AMOUNT OF NOTIONAL INTEREST ON ADVANCES MADE TO THE MILK SUPPLIERS, WHICH IS WRONG AND UNJUSTIFIED. 3. THAT THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS MOST ARBITRARY, UNWARRANTED, AND NOT BACKED BY THE FACTS OF THE CASE 48. GROUND NOS. 1 AND 3 RELATING TO ESTIMATION OF S ALES AND GP AND ARBITRARINESS IN THE ORDER OF THE LEARNE D - 26 - COMMISSIONER OF INCOMETAX (APPEALS) WERE NOT PRESSED AND, HENCE, THESE ARE DISMISSED AS NOT PRESSED. 49. SO FAR AS GROUND NO. 2 IS CONCERNED, WE FIND TH AT THE ASSESSEE HAS OFFERED AN ADDITIONAL INCOME OF RS. 5 LACS IN THE COMPUTATION. THE ADDITION, IF ANY, IS MADE IS COVERED BY THIS SURRENDERED AMOUNT. THE INTEREST DETERMINED AT RS. 3,04,367/- BEING LESS TH AN THE AMOUNT OFFERED BY THE ASSESSEE WHILE FILING THE RETURN, NO FURTHER ADDITION IS CALLED FOR. ACCORDIN GLY, WE DELETE THE ADDITION OF RS. 3,04,367/-. THEREFORE , THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. (PARA 13 OF THE ASSESSEES SUBMISSIONS). 50. TO SUM UP, IT(SS) A NO. 65/IND/2008 AND IT(SS) A. 71/IND/2008 ARE PARTLY ALLOWED AND OTHER APPEALS ARE DISMISSED. 51. NOW, WE SHALL TAKE UP THE REVENUES APPEALS. FIRSTLY, WE SHALL TAKE UP THE REVENUES APPEAL IN IT(SS) A NO. 99/IND/08. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN GRANTING RELIEF OF RS.10 LACS - 27 - HOLDING THAT THE AMOUNT INVESTED BY BOTH THE PARTNERS OF THE FIRM OUTSIDE THE BOOKS OF ACCOUNTS IS RS.10 LACS WHEN THE ASSESSEE ITSELF HAS ACCEPTED INVESTMENT OF RS.21,17,452/- IN SECOND SET OF BOOKS OF ACCOUNTS ? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS JUSTIFIED IN DELETING THE NET PROFIT OF RS. 3,288/- SHOWN BY THE ASSESSEE HIMSELF FOR NO. 2 ACCOUNTS AND IT WAS NOT A CASE OF DOUBLE ADDITION AS PRESUMED BY THE CIT(A) ? 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER WHEN THE LEARNED CIT(A) HAS REDUCED THE ADDITION OF PEAK CREDIT IN A.Y. 03-04, HE SHOULD HAVE ENHANCED INCOME OF THE EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNTS NO. 2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND BOOKS OF ACCOUNT (FORGED) IMPOUNDED BY LD. CIT(A). - 28 - 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) MATTER IS NOT REQUIRED TO BE SENT FOR SPECIAL AUDIT UNDER SECTION 142(2A) OF IT ACT TO DETERMINE THE CORRECT INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNTS, NO. 2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE BAD DEBTS WHEN AS PER SEIZED MATERIALS THE BAD DEBTS HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 52. THE ISSUE RAISED IN GROUND NO. 1 IS CONNECT ED WITH GROUND NO. 1 OF THE ASSESSEES APPEAL FOR THIS YEAR BEING IT(SS) A. NO. 65/IND/08. THE FACTS HAVE ALREADY BEEN NARRATED THEREIN, HENCE, NOT REPEATED. BOTH THE PARTIES HAVE REITERATED THE SAME ARGUMENTS . IN VIEW OF OUR DECISION ON THAT GROUND IN PARA 22 ABOVE, THE GROUND DOES NOT STAND AND ACCORDINGLY, THIS GROUND IS DISMISSED. - 29 - 53. THE FACTS RELATING TO GROUND NO. 2 ARE THAT THE ASSESSING OFFICER WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE CONSIDERED THE INCOME OF RS.3,288/- AS PER SET NO. 2 SEPARATELY. 54. THE ASSESSEE IN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) CONTENDED THAT THE REVISED RETURN UNDER SECTION 153A OF THE A CT HAD BEEN FURNISHED AFTER CONSIDERING THE INCOME OF SET-1 AND SET-2 AND, THEREFORE, THE SAID ACTION OF THE ASSESSING OFFICER AMOUNTED TO DOUBLE ADDITION OF THE SAME INCOME. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AGREEING WITH THIS SUBMISSION DELETED THE ADDITION. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 55. THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAVE REMAINED UNCONTROVERTED BEFORE US HENCE WE DISMISS THIS GROUND OF THE REVENUE. 56. IN RESPECT OF GROUND NOS. 3 AND 4 A QUERY WAS RAISED AS TO HOW THESE GROUND EMANATED FROM THE ASSESSMENT ORDER OR THE APPELLATE ORDER AND WHAT WAS THE LEGAL POSITION AS REGARDS THE MAINTAINABILI TY OF THESE GROUNDS. THE LEARNED CIT DR FAIRLY PLACED - 30 - RELIANCE ON THE GROUNDS RAISED BY THE REVENUE. IN OUR VIEW, THESE GROUNDS ARE NOT MAINTAINABLE FOR TH E REASON THAT WHETHER THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) SHOULD HAVE ENHANCED THE INCOME OR NOT CANNOT BE A SUBJECT MATTER OF DISPUTE BEFORE US AND SIMILARLY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) CANNOT REFER THE MATTER UNDER SECTION 142(2A) AS HE IS OF EQUAL RANK TO CIT. THU S, BOTH THESE GROUNDS RAISED ARE DISMISSED. 57. THE ISSUE RAISED IN GROUND NO. 5 IS ALSO INFRUC TUOUS AS THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS NOT GIVEN ANY SUCH RELIEF, HENCE, DISMISSED AS INFRUCTUOUS. 58. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 59. IT(SS) A NO. 100/IND/08 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- A. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS JUSTIFIED IN RESTRICTING THE G.P. ADDITION OF RS. 3,19,303/- TO RS.70,338/-. B. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER WHEN THE LD. CIT(A) HAS REDUCED - 31 - THE ADDITION OF PEAK CREDIT IN A.Y. 03-04, HE SHOULD HAVE ENHANCED INCOME OF THE EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. C IT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNTS, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND BOOKS OF ACCOUNT (FORGED) IMPOUNDED BY LD. CIT(A). C. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASES MATTER IS NOT REQUIRED TO BE SENT FOR SPECIAL AUDIT U/S 142(2A) OF IT ACT TO DETERMINE THE INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNT, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND THE BOOKS OF ACCOUNT (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 60. AS REGARDS GROUND NO. 1, THE FACTS IN BRIEF AR E THAT THE ASSESSING OFFICER ESTIMATED THE SALES OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE WAS FOUND TO HAVE BEEN INDULGED IN MAKING TURNOVER IN AN UNACCOUNTED MANNER AND APPLIED GROSS PROFIT RATE OF 16% THEREON AND MADE THE ADDITION OF RS.3,19,303/-. - 32 - 61. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND IT WAS CONTENDED THAT THE SALES HAD BEEN ESTIMATED WITHOUT ANY BASIS. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS), HOWEVER, UPHELD THE ACTION OF THE ASSESSING OFFICER IN REGAR D TO ESTIMATION OF SALES BUT REDUCED THE GP RATE TO 15% AND ALSO HELD THAT THE SAME SHOULD HAVE BEEN APPLIED ONLY ON THE TURNOVER OUTSIDE THE BOOKS OF ACCOUNTS. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) ALSO WORKED OUT THE SAME AT RS.2,85,000/- AND AFTER GIVING CREDIT OF GP OF RS.2,14,662/- AS PER SET NO. 2 ALREADY INCLUDED IN THE RETURN, RESTRICTED THE ADDITION TO RS.70,338/-. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 62. THE LEARNED CIT DR NARRATED THE FACTS AND PLACE D STRONG RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 63. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) 64. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES, THE ORDER OF THE LEARNED - 33 - COMMISSIONER OF INCOMETAX (APPEALS) APPEARS TO BE REASONABLE AS THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS ADOPTED THE GP RATE OF 15% AS AGAINST THE RATE OF 16% ADOPTED BY THE ASSESSING OFFICER AND THE CREDIT FOR GROSS PROFIT ALREADY INCLUDED IN THE RETURN HAS TO BE GIVEN WHIL E WORKING OUT THE QUANTUM OF ADDITION. THUS, THIS GROUND OF THE REVENUE IS DISMISSED. 65. THE ISSUE RAISED IN GROUND NOS. 2 AND 3 IS IDEN TICAL TO THE ISSUE RAISED IN GROUND NOS. 3 AND 4 OF ITA N O. 99/IND/08, HENCE, DISMISSED FOR THE SAME REASONS. 66. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 67. IT(SS) A NO. 101/IND/08 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS JUSTIFIED IN RESTRICTING THE G.P. ADDITION OF RS. 3,50,625/- TO RS. 77,829/- BY REDUCING THE SALES TO RS. 24 LACS INSTE AD OF RS. 36 LACS ESTIMATED BY THE A.O. ON THE BASIS O F QUANTITY OF MILK RECORDED IN NO. 2 BOOKS AND LOOSE PAPERS AND DOCUMENTS FOUND DURING THE COURSE OF - 34 - SEARCH ? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING T HAT THE PEAK CREDIT DETERMINED BY THE A.O. IN RESPECT O F ADVANCES GIVEN TO THE FARMERS, AS BAD DEBTS ? 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASES, THE LD. CIT(A) ERRED IN REDUCING THE BAD DEBTS WHEN AS PER SEIZED MATERIALS THE REDUCED BAD DEBTS HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN REDUCING THE ADDITION OF BAD DEBTS BY RS. 2,61,059/- WHICH IS ACTUALLY THE PEAK CALCULATED BY THE A.O. ON THE BASIS OF BS -1/37 & BS -1/38 IN RESPECT OF ADVANCES GIVEN TO MILKMEN AND WHICH CANNOT BE REGARDED AS BAD DEBTS ? 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASES, WHETHER WHEN THE LD. CIT(A) HAS REDUCED THE ADDITION OF PEAK CREDIT IN A.Y. 03-04, HE SHOULD HAVE ENHANCED INCOME OF THE EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. CIT(A) DURING THE COUSE OF APPELLATE PROCEEDINGS ON THE - 35 - BASIS OF REGULAR BALANCE SHEET, NO. 2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY LD. CIT(A). 6. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. C IT(A) WAS JUSTIFIED IN DELETING ADDITION OF RS.2,61,059/- ON ACCOUNT OF PEAK ADVANCES TO THE FARMERS ? 7. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, MATTER IS NOT REQUIRED TO BE SENT FOR SPECIAL AUDIT U/S 142(2A) OF IT ACT TO DETERMINE TH E INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNT, NO.2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 68. THE FACTS, IN BRIEF, ARE THAT THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAD SHOWN SALES IN THE REGULAR BOOKS I.E. SET NO. 1 AT RS. 32,75,005/- AND IN SET NO. 2 THE TURNOVER WAS SHOWN AT RS.21,63,322/-. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS AND ALSO HELD THAT THE ASSESSEE WAS INDULGED IN SALES OUTSIDE THE BOOKS. THEREAFTER, TH E ASSESSING OFFICER AS PER THE SEIZED DOCUMENT BS1/49 FOUND THAT THE ASSESSEE HAD PURCHASED MILK - 36 - WEIGHING 2,90,151 LITRES AND WORKED OUT THE SALE VALUE THEREOF @ RS. 33,36,603/- ON THE BASIS OF GROSS PROFIT RATIO. HE FURTHER ESTIMATED THE SALES AT RS. 36 LACS. THE ASSESSING OFFICER THEREAFTER WORKED OUT THE GROSS PROFIT ON QUANTUM OF SALES SO WORKED OUT INCLUDING THE SALES SHOWN BY THE ASSESSEE IN THE REGULAR BOOKS AT THE GROSS PROFIT RATE OF 16 % AT RS. 11,34,376/-. THE ASSESSING OFFICER GAVE A CREDIT OF GROSS PROFIT OF RS.7,83,75 1/- SHOWN BY THE ASSESSEE AND MADE THE ADDITION WITH THE BALANCE AMOUNT OF RS.3,50,625/-. 69. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WHO, AFTER CONSIDERING THE ESTIMATION MADE BY THE ASSESSING OFFICER HIMSELF IN THE LAST PRECEDING YEAR, ESTIMATED THE SALES OUTSIDE THE BOOKS OF ACCOUNTS AT RS.24 LACS AS AGAINST RS. 36 LACS, ESTIMATED BY THE ASSESSING OFFICER AND APPLIE D GP RATE OF 15%. HE RESTRICTED THE ADDITION TO RS.77,829/- AFTER GIVING CREDIT OF GROSS PROFIT SHO WN BY THE ASSESSEE IN SET NO. 2 WHICH WAS INCLUDED IN THE RETURN OF INCOME ALSO. 70. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. - 37 - 71. THE LEARNED CIT DR NARRATED THE FACTS AND PLACE D STRONG RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 72. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 73. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS ADOTPED THE BASIS FOR ESTIMATING THE TURNOVER ON THE BASIS AS APPLIED BY THE ASSESSING OFFICER IN THE PAST YEAR AND THE GP ESTIMATED BY HIM ALSO APPEARS TO BE REASONABLE, HENCE, WE DISMISS THIS GROUND OF THE REVENUE. 74. IN REGARD TO GROUND NOS. 2 TO 4 AND 6, THE FACT S IN BRIEF ARE THAT THE PEAK CREDIT WAS WORKED OUT IN RESPECT OF ADVANCES GIVEN TO THE FARMERS, WHICH HAVE BEEN MENTIONED IN BS -38 AND 38. THE ASSESSING OFFICER, HOWEVER, BASED ON THESE ENTRIES MADE IN THE SEIZED DOCUMENTS BS-1/37 AND BS- 1/38, WORKED OUT THE QUANTUM OF PEAK AT RS. 2,61,059/-. THE ASSESSEE HAS ALSO CLAIMED BAD - 38 - DEBTS OF RS.7,93,376/- WHICH CLAIM WAS REJECTED BY THE ASSESSING OFFICER FOR THE REASONS MENTIONED IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1998-99. 75. AGGRIEVED BY THIS ACTION OF THE ASSESSING OFFIC ER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND MADE SUBMISSIONS WHICH WERE IDENTICAL TO THE SUBMISSIONS MADE IN THE ASSESSMENT YEAR 1998-99. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) REDUCED THE QUANTUM OF ADDITION ON ACCOUNT OF BAD DEBTS TO THE TUNE OF RS.2,61,059/- WHICH WERE RECORDED IN DOCUMENTS BS-1/37 AND BS-1/38 WHICH WERE FOUND DURING THE COURSE OF SEARCH AND IN RESPECT OF OTHER BAD DEBTS AS PER SET NO. 2, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) DID NOT ACCEPT THE CLAIM OF THE ASSESSEE FOR THE REASON S NARRATED IN HIS APPELLATE ORDER FOR THE ASSESSMENT YEAR 1998-99. 76. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) ALSO FOUND THAT THE ASSESSEE HAD SURRENDERED A SUM OF RS. 5 LACS IN THE REVISED RETURN ON ACCOUNT OF PEAK OF ADVANCES TO THE FARMERS AND THE AVAILABILIT Y - 39 - OF FUNDS IN THE EARLIER YEARS BY WAY OF AN OPENING CAPITAL AND ALSO GROSS PROFIT ADDITIONS. THEREFORE, THIS PEAK IS ALREADY COVERED BY THE AVAILABILITY OF FUNDS TO THE ASSESSEE. ACCORDINGLY, HE DELETED THE ADDITION OF RS.2,61,059/- MADE BY THE ASSESSING OFFICER AS THE SAME AMOUNTED TO DOUBLE ADDITION. AS REGARDS BAD DEBTS, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IN PARA 1.2 CAME TO THE CONCLUSION THAT THE ADVANCES ARE IRRECOVERABLE ADVANCES AND NOTHING HAS BEEN RECOVERED FROM THESE ADVANCES. HE, ACCORDINGLY, ALLOWED THE CLAIM OF BAD DEBT OF RS. 2,24,527/-. 77. THE LEARNED CIT DR NARRATED THE FACTS AND STRON GLY RELIED UPON THE ASSESSMENT ORDER WITH THE SUBMISSION THAT THE ORDER OF THE ASSESSING OFFICER DESERVES TO BE SUSTAINED. 78. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE STRONGLY RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 79. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. WE FIND NO INFIRMITY IN THE ORDE R OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) - 40 - WHO HAS GIVEN THE COMPLETE REASONING ABOUT THE AMOUNT SURRENDERED BY THE ASSESSEE AND ALSO THE AVAILABILITY OF FUNDS. ACCORDINGLY, NO INTERFERENC E IS CALLED FOR AND, HENCE, THIS GROUND IS DISMISSED. 80. AS REGARDS THE ISSUES RAISED IN GROUND NOS. 5 AND 7 5, WE HAVE ALREADY DISCUSSED THE SAME IN PARAS 59 AND 60 ABOVE AND, HENCE, FOLLOWING THE REASONINGS GIVEN THEREIN, THESE GROUNDS ARE DISMISSED. 81. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 82. IT(SS) A NO. 102/IND/08 IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS JUSTIFIED IN RESTRICTING THE G.P. ADDITION OF RS.2,23,984/- TO RS.75,631/- BY REDUCING THE SALES TO RS. 25 LACS INSTEAD OF RS. 35,95,471/- ESTIMATED BY THE A.O. ON THE BASIS OF QUANTITY OF MILK RECORDED IN NO. 2 BOO KS AND LOOSE PAPERS AND DOCUMENTS FOUND DURING THE COURSE OF SEARCH. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING T HAT THE PEAK CREDIT DETERMINED BY THE A.O. IN RESPECT O F ADVANCES GIVEN TO THE FARMERS AS BAD DEBTS ? - 41 - 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN REDUCING THE BAD DEBTS WHEN AS PER SEIZED MATERIALS THE REDUCED BAD DEBTS HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN REDUCING THE ADDITION OF BAD DEBTS BY RS. 2,24,527/- WHICH IS ACTUALLY THE PEAK CALCULATED BY THE A.O. ON THE BAS IS OF BS -1/37 & BS-1/38 IN RESPECT OF ADVANCES GIVEN TO MILKMEN AND WHICH CANNOT BE REGARDED AS BAD DEBTS ? 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASES, THE MATTER IS NOT REQUIRED TO BE SENT FOR SPECIAL AUDIT U/S 142(2A) OF IT ACT TO DETERMINE TH E INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNT, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 6. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE LD. CIT(A) HAS REDUCED THE ADDITION OF PEAK CREDIT IN A.Y. 03-04, HE SHOULD HA VE ENHANCED INCOME OF THE EARLIER YEARS BY THE REVISED - 42 - PEAK DETERMINED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNT, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND BOOKS OF ACCOUNT (FORGED) IMPOUNDED BY LD. CIT(A). 83. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL T O THE ISSUE RAISED IN GROUND NO. 1 OF IT(SS)A NO.101/IND/08/, HENCE, FOLLOWING THE SAME REASONS, THIS GROUND OF THE REVENUE STANDS DISMISSED. 84. THE ISSUES RAISED IN GROUND NO. 2, 3, 4 AND 6 ARE IDENTICAL TO THE ISSUES RAISED IN GROUND NOS. 2, 3, 4 AND 6 OF IT(SS) A NO. 101/IND/08, HENCE, FOLLOWING THE SAME REASONS, THESE GROUNDS ARE DISMISSED. 85. THE ISSUES RAISED IN GROUND NO. 5 AND 7 ARE IDENTICAL TO ISSUE RAISED IN GROUND NO. 5 AND 7 OF IT(SS) A NO. 101/IND/08, HENCE, FOLLOWING THE SAME REASONS, THIS GROUND OF THE REVENUE IS DISMISSED. 86. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 87. IT(SS) A NO. 103/IND/08 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS JUSTIFIED IN RESTRICTING THE G.P. ADDITION OF RS.5,53,368/- TO R S. - 43 - 89,427/- BY REDUCING THE SALES TO RS. 26 LACS INSTE AD OF RS. 36,70,098/- ESTIMATED BY THE A.O. ON THE BASIS OF QUANTITY OF MILK RECORDED IN NO. 2 BOOKS A ND LOOSE PAPERS AND DOCUMENTS FOUND DURING THE COURSE OF SEARCH. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING T HAT THE PEAK CREDIT DETERMINED BY THE A.O. IN RESPECT O F ADVANCES GIVEN TO THE FARMERS AS BAD DEBTS ? 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN REDUCING THE BAD DEBTS WHEN AS PER SEIZED MATERIALS THE REDUCED BAD DEBTS HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN REDUCING THE ADDITION OF BAD DEBTS BY RS. 4,59,246/- WHICH IS ACTUALLY THE PEAK CALCULATED BY THE A.O. ON THE BAS IS OF BS -1/37 & BS-1/38 IN RESPECT OF ADVANCES GIVEN TO MILKMEN AND WHICH CANNOT BE REGARDED AS BAD DEBTS ? 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING - 44 - ADDITION OF RS. 4,59,246/- ON ACCOUNT OF PEAK ADVANCES TO THE FARMERS ? 6. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASES, THE MATTER IS NOT REQUIRED TO BE SENT FO R SPECIAL AUDIT U/S 142(2A) OF IT ACT TO DETERMINE TH E INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNT, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 7. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE LD. CIT(A) HAS REDUCED THE ADDITION OF PEAK CREDIT IN A.Y. 03-04, HE SHOULD HA VE ENHANCED INCOME OF THE EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNT, NO. 2 BOOKS OF ACCOUNT, LOOSE PAPERS AND BOOKS OF ACCOUNT (FORGED) IMPOUNDED BY LD. CIT(A). 88. ALL THE GROUNDS RAISED IN THIS APPEAL ARE IDENT ICAL WITH THE ISSUES RAISED IN IT(SS)A NOS. 101 AND 2/IND/08, HENCE, FOLLOWING THE REASONS GIVEN BY US THEREIN, THESE GROUNDS ARE DECIDED ON SIMILAR LINE S. 89. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. - 45 - 90. IT(SS) A NO. 110/IND/08 IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTIN G THE G.P. ADDITION OF RS.5,00,594/- TO RS. 3,69,215/ - REDUCING THE SALE TO RS. 1,45,00,000/- INSTEAD OF RS.1,49,76,488/- ESTIMATED BY A.O. ON THE BASIS OF QUANTITY OF MILK RECORDED IN NO. 2 BOOKS AND LOOSE PAPERS AND DOCUMENTS FOUND DURING SEARCH. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS CORRECT IN GIVING THE CREDIT OF RS.21,17,452/- WHICH DISPUTED WHILE TELESCOPING FOR WORKING OF PEAK. WHEN THE LD. CIT(A) HAS REDUCED IT TO RS. 11,17,452/- IN A.Y. 98-99. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF BAD DEBT AT RS.13,74,511/- WHICH IS ACTUALLY THE PEAK CALCULATED BY THE A.O. ON THE BASIS OF BS -1/37 AND BS-1/38 IN RESPECT OF ADVANCES GIVEN TO MILKMEN AND WHICH CANNOT BE REGARDED AS BAD DEBTS. - 46 - 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS REDUCED THE ADDITION ON PEAK CREDIT, IN THE ASSTT. YEAR UNDER CONSIDERATION , HE SHOULD HAVE ENHANCED INCOME OF EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNTS, NO. 2 BOOKS OF ACCOUNTS LOOSE PAPERS AND BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY LD. CIT(A). 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY A.O. ON A/C OF BAD DEBTS WHEN AS PER SEIZED MATERIALS THE DELETED BAD DEBTS HAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 6. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION OF RS.13,74,511/- ON ACCOUNT OF PEAK ADVANCES TO THE FARMERS. 7. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING T HE NET PROFIT OF RS. 7400/- SHOWN BY THE ASSESSEE HIMSELF FOR NO. 2 ACCOUNTS AND IT WAS NOT A CASE OF - 47 - DOUBLE ADDITION AS PRESUMED BY THE LD. CIT(A). 8. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE MATTERS IS NOT REQUIRED TO BE SENT FOR SPECIAL AUDIT U/S 142A(2A) OF IT ACT TO DETERMINE THE INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNTS NO. 2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 9. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS CORRECT IN WORKING PEAK OF CURRENT YEAR AT RS. 64 LACS AFTER GIVING THE TELESCOPING EFFECT OF G.P. OUT OF UNACCOUNTED BUSINESS AND G.P. ADDITIONS FOR A.Y. 98-99 TO 02- 03 THEREBY SUSTAINING ADDITION OF PEAK FROM 93,52,217/- TO RS. 13,00,000/-. 91. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL T O THE ISSUE RAISED IN GROUND NO. 1 OF IT(SS) A NO.101/IND/08. BOTH THE PARTIES REITERATED THE SAM E CONTENTIONS. HENCE, FOLLOWING THE SAME REASONS, WE DISMISS THIS GROUND OF THE REVENUE. 92. SO FAR AS GROUND NO. 2 IS CONCERNED, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS RELATED TO AVAILABILITY OF FUNDS FOR TELESCOPING - 48 - PURPOSES, HENCE, WHETHER THE QUANTUM OF OPENING CAPITAL WAS MAINTAINED AT THE SAME LEVEL OR REDUCED RESULTING INTO AN ADDITION ON THIS ACCOUNT IN THE ASSESSMENT YEAR 1998-99, THE RESULT THEREOF WOULD NOT IMPACT THE QUANTUM OF TELESCOPING. THE LEARNED CIT DR COULD NOT CONTROVERT THIS FINDING OF THE ASSESSEE. WE FIND SUBSTANTIAL IMPORT IN THIS CONTENTION OF THE ASSESSEE, HENCE, WE DISMISS THIS GROUND OF THE REVENUE. 93. GROUND NOS. 3, 4, 5, 6 AND 7 ARE IDENTICAL WITH THE ISSUE AS RAISED IN IT(SS) A NO. 101/IND/2008 AND, HENCE, FOLLOWING THE REASONINGS GIVEN THEREIN, THES E GROUNDS ARE DISMISSED 94. THE ISSUE RAISED IN GROUND NO. 8 IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO. 7 OF THE REVENUES APPEA L IN IT(SS) A NO.101/ND/08, HENCE, WE DISMISS THE SAME FOR THE SAME REASONS. 95. THE ISSUE RAISED IN GROUND NO. 9 IS IN RESPECT OF WORKING OUT THE PEAK CREDIT AT RS. 64,00,000/- AFTE R GIVING THE TELESCOPIC EFFECT OF GP. THE LEARNED ASSESSING OFFICER HAD MADE THESE ADDITIONS BY WORKING OUT THE PEAK CREDIT IN BS-37 AND BS-38. - 49 - BY THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS), AFTER GIVING TELESCOPING EFFECT OF G.P. OUT OF UNACCOUNTED BUSINESS AND G.P. ADDITIONS FOR THE ASSESSMENT YEARS 1998-99 TO 2002-03, SUSTAINED THE ADDITION OF PEAK FROM RS.93,52,271/- TO RS. 13 LACS. FOLLOWING WAS THE OBSERVATION AND CONCLUSION OF THE CIT(A) :- 3.3 I HAVE GONE THROUGH THE CONTENTS OF THE A/R FOR THE APPELLANT REPRODUCED ABOVE. SO FAR AS THE COMPUTATION OF PEAK VALUE BY THE A.O. AT RS. 93.52 LACS IS CONCERNED, THE MATTER WAS EXAMINED IN DETAIL WITH REFERENCE TO THE OBJECTIONS RAISED BY T HE APPELLANT BEFORE MY PREDECESSOR IN OFFICE. THE OPPORTUNITY WAS ALSO GIVEN TO THE A.O. IN THIS REGARD. AFTER THOROUGH DELIBERATIONS AND VERIFICATION OF SEIZED MATERIAL IT WAS CONCLUDED TH AT THE CORRECT AMOUNT OF PEAK FOR THE YEAR IS WORKED OUT TO RS.63.24 LACS OR WAS RS. 64 LACS. IT WAS ALSO FOUND TO BE JUSTIFIED THAT TELESCOPING EFFECT OF G.P. OUT OF UNACCOUNTED BUSINESS AND G.P. ADDITION MADE IN THIS REGARD FOR THE A.Y. 98-99 TO - 50 - 02-03 SHOULD BE GIVEN. ON CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE VIEW POINT OF A.O. AND A/R FOR THE APPELLANT, I FOUND IT REASONABLE TO GIVE CREDIT OF RS. 51,00,549/- OR RS. 51 LACS. IN THIS MANNER, THE ADDITION ON ACCOUNT OF PEAK IS SUSTAINED TO THE EXTENT OF RS. 13 LACS I.E. RS. 64 LACS RS. 51 LAC S. 96. BEFORE US, THE LEARNED CIT DR STRONGLY OBJECTE D FOR REDUCING THE PEAK CREDIT FROM RS.93,52,217/- TO RS. 13 LACS BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). HE VEHEMENTLY ARGUED THAT ONCE THE PEAK CREDIT IS DETERMINED AS PER THE SEIZED MATERIA L, THE SAME CANNOT BE REDUCED. HE CONTENDED THAT ONLY THE GROSS PROFIT CAN BE REDUCED AND NOT THE TOTAL SALE CONSIDERATION BY WORKING OUT THE PEAK. HE FURTHER STATED THAT NO TELESCOPIC BENEFIT SHOULD BE GIVEN FOR THE ADDITIONS MADE IN THE GROSS PROFIT IN THE EARLIER YEARS. 97. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WAS RIGHT IN ADOPTING THE PEAK AT RS. 13 LACS. HE CONTENDED THAT ALL THE FIGURES HAVE BEEN TAKEN FROM THE SEIZED MATERIAL - 51 - BS-37 AND 38. HE SUBMITTED THAT WHILE WORKING OUT THE PEAK, THE ADVANCES GIVEN TO THE FARMERS HAVE BEEN CONSIDERED. IN THE SAME BS 37 AND 38 THE PURCHASES MADE IN TWO MONTHS ARE ALSO RECORDED AND SINCE THE ASSESSEE IS DEALING IN PARISHABLE MATERIAL, THE SALE PROCEEDS RECEIVED ARE AVAILABLE TO THE ASSESSEE FOR FURTHER ADVANCES AND THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WAS CORRECT IN GIVING SUCH CREDIT. HE FURTHER CONTENDED THAT T HE TELESCOPIC BENEFIT WILL HAVE TO BE GIVEN SINCE THE ASSESSEE HAS ALREADY PAID TAX ON THE GROSS PROFIT ADDITIONS MADE IN THE EARLIER YEARS AND AS SUCH THE SAID FUND WAS AVAILABLE WITH THE ASSESSEE FOR ADVANCING IT TO THE FARMERS. HE, ACCORDINGLY, CONTENDED THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IS A REASONED ORDER AND REQUIRES TO BE SUSTAINED ON THIS ISSUE. 98. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FIND FROM RECORD THAT DURING SEARCH AT THE ASSESSEES PREMISES ON 25.9.2003, REGISTERS SHOWING UNACCOUNTED PURCHASES OF MILK WERE FOUND AS PER ANNEXURE BS 1/37 AND BS 1/38 SHOWING - 52 - VARIOUS ADVANCES TO SPECIFIC MILKMEN. TO WORK OUT THE UNACCOUNTED INCOME, THE UNACCOUNTED G.P. WAS WORKED OUT BY THE ASSESSING OFFICER IN WHICH PEAK AMOUNTS OF ADVANCES NOTED IN THE AFORESAID REGISTERS WERE ADDED. THUS, THE PEAK WAS WORKED OUT BY THE ASSESSING OFFICER AT RS.93.52 LACS OUT O F WHICH RS. 70.96 LACS WAS AS PER ANNEXURE BS 1/37 AND RS. 22.55 LACS WAS AS PER ANNEXURE BS 1/38 AS WORKED OUT IN THE TABLE GIVEN AT PAGES 3 TO 7 OF TH E ASSESSMENT ORDER. HOWEVER, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) REDUCED THE SAME TO RS.13 LACS WITHOUT ASSIGNING ANY REASON. WE HAVE ALREADY NOTED THE CONCLUSION OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AT PAGE 49 PARA 3.3 WHEREIN WITHOUT REFERRING TO ANY DOCUMENT AND/OR WITHOUT GIVING ANY CALCULATION, HE HAS HELD THAT THE AMOUNT SHOULD BE TAKEN AT RS. 13.00 LACS IN PLACE OF PEAK WORKED OUT BY THE ASSESSING OFFICER AT RS. 93.52 LACS. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) FURTHER OBSERVED THAT AFTER GIVING TELESCOPING EFFECT OF GR OSS PROFIT OUT OF UNACCOUNTED BUSINESS AND G.P. ADDITIO N MADE IN THIS REGARD FOR THE ASSESSMENT YEARS 1998- - 53 - 99 TO 2002-03, PEAK CREDIT SHOULD BE WORKED OUT. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS NOT CONTROVERTED ANY OF THE OBSERVATIONS/FINDINGS OR CALCULATIONS OF THE ASSESSING OFFICER TO ALLEGE THE SAME AS NOT CORRECT . HOWEVER, NO JUSTIFICATION MUCH LESS A VALID JUSTIFICATION FOR THE SAME HAS BEEN GIVEN. HE FURT HER GAVE CREDIT OF RS. 51 LACS. THUS, IT IS CLEAR THAT NO REASONING NOR ANY JUSTIFICATION FOR SUCH REDUCTION OF PEAK FROM RS. 93.52 LACS TO RS. 13 LACS WS GIVEN BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). WE DO NOT FIND ANY SUBSTANCE IN THIS PART OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). ACCORDINGLY, THE SAME IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) FOR DECIDING THE SAME AFRESH AFTER RECORDING HIS FINDING AND ASSIGNING REASONS FOR REDUCTION OF PEAK CREDITS, IF ANY. THE CIT SHALL ALSO PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE SHALL ALSO BE AT LIBERTY TO PRODUCE COGENT MATERIAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IN SUPPORT OF ITS CONTENTION. W E - 54 - DIRECT ACCORDINGLY. 99. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED IN PART. 100. IT(SS) A NO. 111/IND/08 IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE G.P . ADDITION OF RS. 5,08,739/- TO RS.4,05,562/- REDUCIN G THE SALES TO RS.1,40,00,000/- INSTEAD OF RS.1,46,85,860/- ESTIMATED BY A.O. ON THE BASIS OF QUANTITY OF MILK RECORDED IN NO. 2 BOOKS AND LOOSE PAPERS AND DOCUMENTS FOUND DURING SEARCH. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE LD. CIT(A) IS CORRECT IN DELET ING THE ADDITION OF RS. 27,74,851/- MADE BY A.O. TOWARDS PEAK WHEN THE A.O. HAS ALREADY CONSIDERED THE PEAK WHILE WORKING THE PEAK AMOUNT CONSIDERING THE EARLIER YEARS PEAK. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDIT ION OF BAD DEBT AT RS. 3,39,520/- WHICH IS ACTUALLY THE PEAK CALCULATED BY THE A.O. ON THE BASIS OF BS - 1/37, BS -1/38. - 55 - 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE MATTER IS NOT REQUIRED TO BE SENT FOR SPEC IAL AUDIT U/S 142A(2A) OF IT ACT TO DETERMINE THE CORRE CT INCOME BY MERGING OF THE REGULAR BOOKS OF ACCOUNTS NO. 2 BOOKS OF ACCOUNTS, LOOSE PAPERS AND THE BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY THE LD. CIT(A) DURING THE COURSE OF HEARING. 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE BAD DEBTS WHEN AS PER SEIZED MATERIALS THE BAD DEBTS WAS NOT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNTS AND HAVE BEEN NOTED ONLY FOR COLLECTION. 6. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER WHEN THE LD. CIT(A) HAS REDUCED THE ADDITION ON PEAK CREDIT, IN THE ASSTT. YEAR 200 3- 04 AND AFTER SET OFF DELETED THE ADDITION IN A.Y. 2004-05 ALSO HE SHOULD HAVE ENHANCED INCOME OF EARLIER YEARS BY THE REVISED PEAK DETERMINED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ON THE BASIS OF REGULAR BOOKS OF ACCOUNTS NO. 2 BOOKS ACCOUNT, LOOSE PAPERS AND BOOKS OF ACCOUNTS (FORGED) IMPOUNDED BY LD. CIT(A). - 56 - 101. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO. 1 OF IT(SS) A NO. 101/IND/2008. WE, THEREFORE, FOR THE SAME REASONS, DISMISS THIS GROUND.. 102. GROUND NOS. 2 AND 6 ARE IN RESPECT OF DELETION OF ADDITION OF RS. 27,74,851/- MADE ON ACCOUNT OF PEAK CREDITS. THE LEARNED ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT CONSIDERING THE EARLIER PEAK ADDITIONS. THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) HAS ELABORATELY DISCUSSED THIS ISSUE IN PARA 3 OF HIS ORDER AND CONCLUDED IN PARA 3.2 THAT IN THE PRECEDING YEARS, THE ASSESSING OFFICER HIMSELF ADJUSTED THE PEAK OF THE CURRENT YEAR WITH THE PEAK OF THE EARLIER YEARS AVAILABLE. HE ACCORDINGLY DELE TED THE ADDITION. 103. AFTER HEARING THE ARGUMENTS OF BOTH THE PARTIE S AND GOING THROUGH THE MATERIAL ON RECORD, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). WE, THEREFORE, UPHOLD THE SAME AND DISMISS THESE GROUNDS OF THE REVENUE. 104. THE ISSUES RAISED IN GROUND NOS.3 AND 5 ARE COVERED BY OUR DECISION IN GROUND NO. 3 OF THE - 57 - REVENUES APPEAL IN IT(SS) A NO. 110/IND/2008. FOLLOWING THE SAME REASONINGS, THIS GROUND OF THE REVENUE IS DISMISSED. 105. REGARDING GROUND NO. 4, WE FIND THAT THE ISSUE IS COVERED BY OUR DECISION IN GROUND NO. 7 OF IT(SS) A NO. 101/IND/2008. FOR SIMILAR REASONS, THIS GROUND OF THE REVENUE STANDS DISMISSED. 106. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 107. TO SUMP UP, THE APPEALS OF THE ASSESSEE IN IT( SS) A NOS. 66, 67, 68, 69 AND 70/IND/08 ARE DISMISSED A ND IT(SS) A NOS. 65 AND 71/IND/08 ARE PARTLY ALLOWED, WHEREAS ALL THE APPEALS OF THE REVENUE ARE DISMISSED, EXCEPT IT(SS) NO. 110/IND/2008 WHICH IS ALLOWED IN PART. ORDER PRONOUNCED IN OPEN COURT ON 27 TH MAY, 2010. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 27 , 2011 COPY TO APPELLANT/RESPONDENT/CIT/CIT(A)/CIT DR DN/- M.