M/s. ORIENTAL CONTAINERS LTD., MUMBAI V. ACIT CENT CIR 21, MUMBAI

ITSSA 166/MUM/2006

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9099 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 27-04-2010
• Assessment Year: misc
• Appeal Filed On: 18-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K PAHWA
• Assessee Lawyers: ARVIND SONDE
• Keywords: Search and seizure; Loose papers; Document seized; Assessment record; Block assessment; Retraction; Reason to believe; Documents seized
• Section: 131; 132; 139

Judgement Text

IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4 .2002 TO 29.1.2003 1 IN THE INCOME TAX APPELLATE TRI BUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI A.L. GEHLOT, A.M. AND SHRI V. DURGA R AO, J.M. IT(SS) NO. 166/M/06 BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) M/S ORIENTAL CONTAINERS LTD., APPELLANT 1076, DR. E. MOSES ROAD, WORLI, MUMBAI 400 018 (PAN AAACO0480F) VS. ASSTT. COMMISSIONER OF INCOME-TAX, RESPONDENT CENTRAL CIRCLE 21, AAYAKAR BHAVAN, MUMBAI 400 020. APPELLANT BY : MR. ARVIND SONDE RESPONDENT BY : MR. S.K. PAHWA ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A)-IV, MUMBAI, ON 14 TH MARCH, 2008 FOR THE BLOCK PERIOD 1997- 98 TO 2002-03. (BROKEN PERIOD 1.4.2002 TO 29.1.2003 ) 2. THE ASSESSEE HAS RAISED AS MANY AS 8 GROUNDS, WH ICH CONTAIN SUB- GROUNDS ALSO. AT THE TIME OF HEARING, THE LEARNED A R SUBMITTED THAT OUT OF THE SAID GROUNDS THE ONLY EFFECTIVE GROUND IS GROUND NO . 2(A) AND THE REMAINING GROUNDS ARE ARGUMENTATIVE IN NATURE. GROUND NO. 2(A ) READS AS UNDER:- 2.(A). ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS. 3,05,80,428/- AS UNA CCOUNTED CASH SALES IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 2 OF SCRAPS ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH FROM THE CABIN OF MR. P.R. KABRA AND THE REA SONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS OF THE CASE, THE PROVISIONS OF THE INCOME TAX ACT, 1961 AND RULES MA DE THEREUNDER. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH ACTION CONDUCTED AT THE VARIOUS PREMISES OF THE ASSESSEE ON 29.01.03 AND CO NCLUDED ON 26.3.2003. DURING THE COURSE OF SEARCH A NUMBER OF LOOSE PAPER S AND DOCUMENTS WERE FOUND FROM THE CABIN OF MR. P.R. KABRA, WHO IS REPO RTED TO BE ITS DIRECTOR- COMMERCIAL. SINCE MR. PR KABRA WAS NOT PRESENT IN T HE PREMISES ON 29.01.2003, HIS CABIN WAS DULY OPENED BY THE SEARC H PARTY, WHICH LEAD TO THE FINDING OF THE IMPUGNED DOCUMENTS, WHICH PERTAIN TO VARIOUS MATTERS RELATED TO THE COMPANYS AFFAIRS, INCLUDING THE SALE OF SCR AP BY THE COMPANY. THE STATEMENT ON OATH OF MR. P.R. KABRA, U/S 132(4) OF THE ACT WAS RECORDED ON 30.01.2003, WHERIN QUESTIONS AND ANSWERS ABOUT THE SALE OF SCRAP BY THE COMPANY WERE RECORDED. 3.1 ON THE BASIS OF STATEMENT OF MR. PR KABRA, THE AO NOTICED THAT THERE WAS DIFFERENCE OF RATE IN THE SALE OF SCRAP TO THE TUNE OF RS. 35/- IN CASE OF ALUMINIUM SCRAP AND THERE WILL BE DIFFERENCE OF RAT E TO THE TUNE OF RS. 5/- IN CASE OF TIN PLATE SCRAP. THE AO FURTHER NOTED THAT MR. KABRA STATED IN HIS STATEMENT THAT THESE DIFFERENCES ARE RECEIVED IN CA SH WHICH WERE UTILISED FOR MEETING UNACCOUNTED EXPENSES. FOR THE PURPOSE OF RE ADY REFERENCE THE RELEVANT QUESTIONS AND ANSWERS OF THE STATEMENT ARE REPRODUCED BELOW:- Q.NO. 13. HOW MUCH IS YOUR TOTAL TURNOVER FROM SALE OF SCRAP OF ALL CATEGORIES IN A YEAR? ANS. IN A GIVEN YER, THE SALE OF SCRAP OF TIN PLATE WOULD BE AROUND 300-500 M.TON, WHERE AS THE SALE OF ALUMINIUM SCRAP OF APPRLX. 180 M. TONS. ON THIS BASIS THE SALE OF SCRAP IN ONE YEA R IS AROUND RS. 1.6 CRORE, INCLUDING THE SCRA OF MISC. ITEMS. THIS HAS BEEN CALCULATED BY TAKING A RATE OF RS. 70/- PER K.G. FOR ALUMINIUM SC RAP AND RS. 5/- PER KG. OF THE TINPLATE SCRAP. I HAVE ALSO ESTIMATED, T HE SALE OF MISC. SCRAP OF RS. 10 LAKHS. Q.NO. 14. ON GOING THROUGH THE INVOICES FOR SAE OF SCRAP OF ALUMINIUM, IT IS FOUND THAT THE RATE BILLED IN THE INVOICES IS RS. 35/- PER K.G. ALONG IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 3 WITH EXCISE AND SALES TAX AS APPLICABLE WHICH COMES TO EFFECTIVE RATE OF RS. 43/- PER K.G. INCLUDING EXCISE AND SALES TAX , WHEREAS AS PER THE REPLY BY YOU IN RESPONSE TO QUESTION NO. 13, IT HAS BEEN STATED THAT THE SALE RATE IS RS. 70/- PER K.G. WHY THERE IS SUC H A VAST DIFFERENCE BETWEEN THE RATE AT WHICH THE SCRAP IS SOLD AND THE RATE AT WHICH THE INVOICES ARE BEING RAISED? ANS. THE DIFFERENCE IS RECEIVED IN CASH OUT OF BOOK S OF ACCOUNTS. THE ACCOUNTING ENTRIES ARE MADE AS PER THE INVOICES RAI SED AND THE BALANCE IS RECEIVED IN CASH. Q.NO. 15. WHAT DO YOU DO WITH THIS CASH ONCE IT IS RECEIVED FROM PARTIES ? ANS.THIS CASH IS UTILIZED FOR MEETING UNACCOUNTED EXPENSES WHICH ARE PAID IN CASH. Q.NO. 16. WHY THE SALE PROCEEDS OF SCRAPS IS NOT BE ING ACCOUNTED FULLY AND WHY A PART OF IT IS BEING RECEIVED IN CASH ?. ANS. THERE ARE CERTAIN UNFORESEEN EXPENSES WHICH AR E INCURRED IN CASH. TO MEET THESE EXPENSES, I AM FORCED TO RECEIV E A PART OF SALE PROCEEDS IN CASH. 3.2 DURING THE COURSE OF SEARCH, VARIOUS STATEMENTS OF THE CONCERN PERSONS WERE ALSO RECORDED REGARDING QUANTUM OF PRODUCTION OF SCRAP OF DIFFERENT TYPES. VARIOUS PERSONS HAVE GIVEN DIFFERENT PERCENT AGES WHICH ARE AS UNDER:- SR. NO. NAME OF THE PERSON GIVING STATEMENT/DATE DESIGNATION % OF SCRAP PRODUCTION OF ALUMINIUM % OF SCRAP PRODUCTION OF TIN PLATES 1. PR KABRA/29.1.2003 M.D., G.M. (COMMERCIAL) 25-30% - 2. D.K. TOSHINIWAL 29.1.2003 - 30% - 3. RAMKISHAN LOHIA 29.1.2003 EMPLOYEE, FACTORY 32.23% - 4. GAJANAN TOSHINIWAL 29.1.2003 SR. OFFICER- EXCISE 1-1.5% 5. BHAVESH D. PATEL SR. PRODUCTION ENGINEER 14.23% 6. LAWRENCE PRINTING 2-3% IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 4 MARCUS/29.1.2003 MANAGER 7. U.M. KALA/29.1.2003 GM 20-22% 20-25% 8. MOHAN P CHAUDHARY EMPLOYEE- PEN 10-12% 9. S.N. MAHESHWARI G.M. GOA 2-5% 3.3 DURING THE COURSE OF BLOCK ASSESSMENT, THE AO A SKED THE ASSESSEE TO GIVE EXPLANATION IN RESPECT OF SEIZED PAPERS AND QU ANTIFY THE UNDISCLOSED INCOME ON ACCOUNT OF CASH SALE OF SCRAP. THE ASSESS EE VIDE HIS LETTER 28 TH OCTOBER, 2004 SUBMITTED THAT THE ASSESSEE HAD NO KN OWLEDGE OF THE PAPERS FOUND AND SEIZED FROM THE CABIN OF MR. KABRA. AN AF FIDAVIT OF MR. KABRA DATED 4 TH FEBRUARY, 2003 WAS SUBMITTED ALONG WITH THE LETTER .THE CONTENTS OF THE AFFIDAVIT READS AS UNDER:- I. PARASRAM KABRA, SON OF LATE SHRI RAMCHANDRA KABR A, AGED ABOUT 62 YEARS AND RESIDING AT 129, PANKAJ C, DR. A.B. ROA D, WORLI, MUMBAI 400 018, SOLEMNLY AFFIRM AND STATE AS UNDER:- 1. THAT AN ACTION UNDER SECTION 132 WAS TAKEN IN OFFIC E PREMISES OF ORIENTAL CONTAINERS LIMITED ON 29.01.2003 AND CONTI NUED UP TO 30.01.2003. 2. THAT AT THE TIME OF ACTION UNDER SECTION 132, I WA S NOT AN EMPLOYEE OF ORIENTAL CONTAINERS LIMITED. I WAS NOT IN THE SE RVICES OF ORIENTAL CONTAINERS LIMITED WITH EFFECT FROM 01.08. 2002. 3. THAT I AM SUFFERING FROM HIGH BLOOD PRESSURE AND EA RLY RENAL (KIDNEY) IMPAIRMENT FOR WHICH I AM TAKING MEDICINE S FOR THE LAST 15-20 YEARS UNDER REGULAR SUPERVISION OF FAMILY DOC TOR AND SPECIALIST DR. SHRI BHUPENDRA GANDHI. 4. THAT DURING THE COURSE OF INTERROGATION I WAS MADE TO ACCEPT THAT I WAS WORKING AS DIRECTOR (COMMERCIAL) THOUGH I WAS NOT AN EMPLOYEE OF THE COMPANY. 5. THAT PRESENTLY I AM WORKING AS AN ADVISOR TO ORIENT AL CONTAINERS LIMITED ADVISING ON PROCUREMENT OF RAW MATERIAL AND VISITING THE OFFICE OCCASIONALLY. 6. THAT AT THE TIME OF ACTION ON 29.01.2003, I WAS NOT PRESENT IN THE OFFICE. MY CABIN WAS BROKEN IN MY ABSENCE BY INCOME TAX AUTHORITIES AND SOME PAPERS WERE SEIZED. I WAS INFO RMED ON 30.01.2003 BY THE INCOME TAX AUTHORITIES THAT IF I DONT ATTEND AND GIVEN STATEMENT, MY HOUSE COULD BE SEARCHED U/S 132 . THOUGH I WAS NOT WELL, I HAD TO COME TO GIVE STATEMENT BEFORE IN COME TAX AUTHORITIES UNDER DURESS AND PRESSURES. IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 5 7. THAT I WAS INTERROGATED BY A TEAM OF INCOME TAX OFF ICIALS ON 30.01.2003 FROM 11.30 AM UP TO AROUND 6.00 P.M. 8. THAT I WAS FORCED TO GIVE A STATEMENT PERTAINING TO THE LOOSE PAPERS/PAD FOUND FROM MY CABIN WITH REGARDS TO ALLE GED SALE OF SCRAP. 9. THAT ON ACCOUNT OF ILL HEALTH I SUCCUMBED TO THE PR ESSURE OF SEARCH PARTY AND GAVE STATEMENT AS DESIRED BY THE SEARCH P ARTY TO SATISFY THEM AND TO GET RID OF THEIR GRILLING. 10. THAT I GAVE STATEMENT UNDER STRESS AND PRESSURE AND ONLY TO SAVE MY LIFE FROM HEART ATTACH DUE TO HIGH BLOOD PRESSUR E AND PUT AN END TO CONTINUES HARASSMENT BY THE SEARCH OFFICIALS. 11. THAT WHATEVER STATEMENT WAS GIVEN BY ME WAS UNDER S TRESS AND PRESSURE AND I DISOWN THE SAME. 12. THAT THE ROUGH WORKING RELATED TO SALE OF SCRAP WAS NOTIONAL WORK TO GIVE VALUE ADDITION TO SCRAP AND DID NOT REPRESE NT ANY ACTUAL TRANSACTION. 13. THAT THERE WAS NO CASH FOUND FROM MY CABIN ON ACCOU NT OF ANY UNDISCLOSED CASH EARNINGS MADE BY WAY OF SALE OF SC RAP. 14. THAT I MADE THIS AFFIDAVIT TO RETRACT THE STATEMENT RECORDED ON 30.01.2003 AS THE SAME WAS MADE UNDER DURESS AND PR ESSURE. 15. THAT NO CREDENCE, VALUE OR SIGNIFICANCE BE MADE OF MY STATEMENT RECORDED ON 30.01.2003 NOR DO THE ENTRIES RECORDED IN THE LOOSE PAPERS/PADS HAVE ANY BEARING WITH THE ACTUAL WORKIN G AND ACCOUNTS DECLARED BY ORIENTAL CONTAINERS LIMITED. 16. THAT WHATEVER STATED ABOVE IS TRUE AND CORRECT TO T HE BEST OF MY KNOWLEDGE AND BELIEF. SOLEMNLY AFFIRMED BEFORE ME AT MUMBAI THIS 4 TH DAY OF FEBRUARY, 2003 (PARASRAM KABRA) IN THE AFFIDAVIT MR. KABRA STATED THAT HIS STATEMEN T RECORDED BY ASSTT. DIRECTOR OF INCOME TAX ON 30.01.2003 WAS UNDER PRES SURE, THEREFORE, NO CREDENCE SHOULD BE GIVEN TO THE CONTENTS OF SAME. T HE ASSESSEE SUBMITTED HIS COMMENTS AND EXPLANATION IN RESPECT OF THE DOCUMENT FOUND FROM THE CABIN OF MR. KABRA, READS AS UNDER:- THE ROUGH PAPER FOUND IN THE CABIN OF P.R. KABRA. S INCE THIS PAPER CONTAINS WORKING OF MR. P.R. KABRA, NECESSARY EXPLA NATION WITH REGARD TO THIS PAPER COULD BE OBTAINED FROM HIM. WE HAVE NO KNOWLEDGE OF THE CONTENTS RECORDED IN THE SAID PAPE R. ON ENQUIRY FROM MR. P.R. KABRA, HE HAD EXPLAINED TO US THAT THE NOT ING MADE BY HIM WERE HIS WORKING OF NOTIONAL LOSS/VALUE ADDITION SU FFERED BY THE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 6 COMPANY AS PROJECTED BY HIM BY NOT SETTING UP FURNA CE FOR THE PURPOSE OF CONVERTING SCRAP INTO ALUMINIUM INGOTS/M.S. BARS . 3.5 THE ASSESSEE FURNISHED COPY OF INVOICES OF OTHE R MANUFACTURING SELLING ALUMINIUM SCRAP AND THE RATES ON WHICH SCRAP SOLD B Y OTHER PARTIES ARE AROUND THE SAME RATES ON WHICH THE ASSESSEE SOLD THE SCRAP TO ESTABLISH THAT THE ASSESSEE SOLD THE SCRAP AT PREVAILING MARKET PRICE, AS UNDER:- NAME OF THE COMPANY INVOICE DATE OF SALE RATE DESCRPTION POLYCAP 6.10.2002 RS. 35/- PER KG. ALUMINIUM SCRAP PAYAL INDUSTRIES 16.12.2002 RS. 38/- PER KG. ALUMINIUM SCRAP SHALIMAR TUBES 04.11.1999 RS. 42/- PER KG. ALUMINIUM SCAP 3.6 THE ASSESSEE HAS ALSO FURNISHED RATES OF FRES H MATERIALS I.E. ALUMINIUM INGOTS OF NATIONAL ALUMINIUM CO. LTD., WHICH IS AS UNDER:- YEAR RATES PER KG. (RS.) 1996 61.65 1997 66.95 1998 71.70 1999 68.20 2000 80.50 2001 80.50 2002 80.50 THE ASSESSEE SUBMITTED THAT THE PRICE OF ALUMINIUM SCRAP CAN NEVER BE THE PRICE OF ALUMINIUM INGOTS. THE SCRAP PRICES ARE NOR MALLY VERY MUCH LOWER THAN THE PRIME MATERIAL. 3.7 A SUMMON U/S 131 WAS ISSUED TO MR. KABRA AND ON 29.11.2004 HIS STATEMENT WAS RECORDED UNDER OATH. MR. KABRA HAS RE ITERATED THE SAME FACTS IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 7 WHICH WERE REFLECTED IN HIS AFFIDAVIT. THE AO ALSO EXAMINED PURCHASING PARTIES. THE OBSERVATIONS OF THE AO ARE REPRODUCED AS UNDER:- IN ORDER TO SEE THE OTHER SIDE OF THE COIN THE PART IES WHO PURCHASED SCRAP FROM THE ASSESSEE WERE SUMMONED AND THEIR STATEMENTS WERE RE CORDED. ALMOST ALL OF THEM DENIED HAVING PAID ANY CASH TO THE ASSESSEE COMPANY. ALL O F THEM WERE SHOWN THE RELEVANT SEIZED DOCUMENTS AND WERE ASKED TO CONFIRM THE PURC HASES AND PAYMENT OF CASH COMPONENTS. HOWEVER, FOR OBVIOUS REASONS ALL OF TH EM DENIED HAVING PAID ANY CASH COMPONENT. THEY ALL BELIEVED IN THE AGE OLD MAXIM ASK ME NO QUESTIONS AND WE WILL TELL NO LIES. THEY ALL KNEW THAT THE MOMENT TRUTH IS RE VEALED THEY WILL BE LANDING THEMSELVES IN TROUBLE. THE LOGIC BEHIND DENYING PAYMENTS, PART ICULARLY WHEN THE ENTRIES ARE NOT IN THEIR HANDWRITING CAN WELL BE UNDERSTOOD. BUT WHEN THE NATURE OF ENTRIES ARE SELF- EXPLANATORY, THEY CAN STAND ON THEIR OWN FEET WITHO UT THE NEED OF ANY SUPPORT 4. THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION . THE AO ALSO REJECTED MR. KABRAS EXPLANATION AND NOTED THAT MR. KABRA GAVE ELABORATE STATEMENT REGARDING SALE OF SCRAP ON 30.01.2003. HE FURTHER MADE AN AFFIDAVIT ON 4 TH FEBRUARY03 BUT THE SAME WAS FAILED TO BRING ON RE CORD TILL 28 TH OCTOBER04 WHEN THE SAME WAS SUBMITTED IN THE OFFIC E OF THE AO. THE AO NOTED THAT PANCHANAMA PREPARED DURING THE SEARCH ON 30.01.2003 DO NOT REVEAL ANY UNTOWARD INCIDENT LEADING TO ANY HARASSM ENT AND UNDUE PRESSURE TO SHRI PR KABRA. BESIDES, AT THE END OF THE STATEM ENT, MR KABRA STATED THAT THE STATEMENT WAS GIVEN VOLUNTARILY WITHOUT ANY US E OF FORCE AND COERCION. THE AO NOTED THAT IN ALL THE SEIZED DOCUMENTS MENTI ONED THE NAME OF THE PARTIES TO WHOM SCRAP HAS BEEN SUPPLIED, THEN THE Q UANTITIES OF SCRAP SUPPLIED IS WRITTEN IN KGS IN MOST OF THESE THE ACTUAL RATE APPLIED IS MENTIONED. THEREAFTER, THE BILLED RATES ARE ALSO MENTIONED. IN SOME OF THEM THE CHALLAN NUMBERS ARE WRITTEN. THEN THE TOTAL SALE PROCEEDS A RE CALCULATED AND REDUCED FROM THE BILLED AMOUNT, THE REMAINDER REPRESENTING CASH COMPONENT OF THE SCRAP SALE PROCEEDS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. A YEAR-WISE UNACCOUNTED SALE OF SCRAP NOTED BY THE AO IN THE FORM OF A TABLE AT PAGE NUMBER 20 OF HIS ORDER. THE AO NOTICED THAT IN THE FY 1997-98 TO FY IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 8 2001 THE TOTAL UNACCOUNTED SCRAP SALES WERE RS. 2,2 8,16,576/-. THE TOTAL SCRAP SALE SHOWN IN THE BOOKS DURING THESE FYS WAS RS. 8,25,38,038/-. THE RATIO BETWEEN THE EVIDENCES FOUND FOR SCRAP SALE AN D SALE OF SCRAP IN BOOKS WORKS OUT TO RS. 27.63%. IN ORDER TO WORK OUT TOTAL UNACCOUNTED SALE OF SCRAP DURING THE BLOCK PERIOD THE AO APPLIED THIS RATIO O F 27.63%(IN AOS ORDER IT IS 27.65%) ON TOTAL SCRAP SALE SHOWN IN THE BOOKS D URING THE BLOCK PERIOD OF RS. 11,05,98,294/-, WHICH WORKS OUT TO RS. 3,05,80, 428/-. THE AO HELD THAT OUT OF THE TOTAL UNACCOUNTED SCRAP SALE RS. 3,05,80 ,428/-, UNACCOUNTED SALE OF SCRAP OF RS. 3,00,04,573/- IS SUPPORTED BY CLINCHIN G EVIDENCES FOUND DURING THE COURSE OF SEARCH. THE ADDITIONAL AMOUNT OF RS. 5,75,855/- REPRESENTED UNACCOUNTED SALE OF SCRAP WORKED OUT ON THE BASIS O F RATIO 27.63%. ACCORDINGLY, THE AO MADE ADDITION OF RS. 3,05,80,42 8/-. 5 THE ADDITION MADE BY THE AO HAS BEEN CONFIRMED BY THE CIT(A) OBSERVING AS UNDER:- REGARDING RETRACTION BY PR KABRA:- THE CONDUCT OF T HE APPELLANT AND MR. PR KABRA IN THIS REGARDS IS STRANGE AND PATENTL Y SMACKS OF BLATANT FALSEHOOD. IT IS SURPRISING TO NOTE THAT SUCH A CRI TICAL DOCUMENT VIZ, THE RETRACTION AFFIDAVIT DATED 04.02.03, ON WHICH BASIS THE APPELLANT SEEKS TO DEFEND ITSELF AGAINST THE AOS CHARGE OF CONCEAL MENT OF INCOME ARISING FROM CASH SALE OF SCRAP, AND IT SEEKS TO NU LLIFY THE STATEMENT OF MR. P.R. KABRA RECORDED ON OATH ON 30.01.03, WAS NO T FILED BY THE APPELLANT AT THE EARLIEST OPPORTUNITY I.E. ON 04.02 .03 ITSELF AND THAT IS WAS FILED AFTER A LAPSE OF OVER 20 MONTHS. THE APPE LLANT/PR KABRA PREFERRED TO NOT FILE THIS PURPORTED RETRACTION AND DECIDED TO LET SEVERAL OCCASIONS TO DO SO GO AMISS, SOLELY TO ITS OWN DETRIMENT. THE DELAY IN FILING A DOCUMENT OF THIS SIGNIFICANCE AND THE OVERALL CONDUCT OF THE APPELLANT RAISES IRREVERSIBLE SUSPICIOUS OF ITS BONAFIDE AND TRUTH. THE REASON AS TO WHY THE APPELLANT WAITED S O LONG TO FILE THE RETRACTION AFFIDAVIT AND DAMAGED ITS OWN CASE FURTH ER, BY RAISING INEXPLICABLE DOUBTS ABOUT THE BONAFIDES AND VERACIT Y OF THE SAID AFFIDAVIT REMAINS UNANSWERED, SOLELY TO THE DETRIME NT OF THE APPELLANT. THE RETRACTION OF THE STATEMENT ON OATH OF MR. P.R. KABRA, IS THUS NOT BONAFIDE AND GENUINE, NOT JUST BECAUSE OF THE SUSPI CIOUS AND CONTUMACIOUS CONDUCT OF THE APPELLANT IN THIS REGA RD, BUT MORESO BECAUSE IT IS WHOLLY DEVOID OF ANY SUPPORTING EVIDE NCE, SO AS TO NEGATE THE GLARING EVIDENCES OF UNACCOUNTED CASH SALES OF SCRAP, FOUND DURING THE COURSE OF THE SEARCH ACTION. IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 9 HE EVEN MAKES SUCH A RIDICULOUS STATEMENT THAT IT W AS THE ADI WHO DICTATED THE ANSWERS AND THAT HE MERELY SIGNED ACRO SS THE DOTTED LINE. SUCH A STATEMENT OF SUCH A SENIOR MAN IS SIMPLY NOT BELIEVABLE AND HAS NO CREDIBILITY AT ALL. THESE ARE THE MOST COMMON AN D OUTLANDISH CLAIMS MADE WHEN ASSESSEES COOK UP AFTERTHOUGHT STORIES. T HERE ARE NO SUCH CIRCUMSTANCES AND NEITHER ANY EVIDENCE, AS ALLEGED BY THE APPELLANT, EVIDENT OR APPARENT IN THE SEARCH PROCEEDINGS/ACTIO N. 5.1 REGARDING CONTENTION OF THE ASSESSEE THAT THE P APERS FOUND FROM THE CABIN OF PR KABRA, THE CIT HELD THAT THE DOCUMENTS FOUND FROM PR KABRA CABIN UNDISPUTEDLY RELATED TO THE COMPANY. 5.2 IN RESPECT OF WHETHER MR. KABRA WAS AN EMPLOYEE OF THE ASSESSEE COMPANY OR NOT, THE CIT(A) HELD THAT MR. PR KABRA W AS A SENIOR PERSON, WHO LOOKED AFTER A NUMBER OF MATTERS AND WAS GIVEN SUCH RESPONSIBILITIES AS BEHAVE TO BE GIVEN TO A SENIOR MANAGEMENT PERSON. H E WAS HANDLED SUCH MATTERS AS SALE OF SCRAP, PRODUCTION, OPERATION ETC . WHICH WERE DIRECTLY RELATED TO THE COMPANIES BUSINESS. 5.3 AS REGARDS EXPLANATION OF THE ASSESSEE THAT MR. KABRA WAS TRYING TO PREPARE A PROJECT REPORT TO SUBMIT TO THE MANAGEMEN T TO PERSUADE THEM TO PUT UP A FURNACE TO CONVERT SCRAP INTO ALUMINUMS INGOTS /BARS BY SHOWING THE NOTIONAL LOSS SUFFERED BY THE COMPANY BY NOT PUTTIN G UP A FURNACE, THE CIT(A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESS EE ON THE GROUND THAT WHY SUCH EXPLANATION WAS NOT GIVEN BY MR. KABRA AT THE INCEPTION WHEN HIS STATEMENT WAS RECORDED. 5.4 AS REGARDS COMPARATIVE RATES, THE CIT(A) HELD T HAT MERE PHOTO COPIES OF INVOICES ARE NOT PROPER OR ACCEPTABLE EVIDENCE I N THIS REGARD WITHOUT BRINGING THEIR APPLICABILITY THAT THE SCRAP WAS SOL D BY THE ASSESSEE. THE CIT(A) HELD THAT THE ASSESSEE HAS PLACED EXCESSIVE RELIANCE ON THE PURPORTED RETRACTED STATEMENT OF MR. KABRA DOES NOT FOUND TO BE BONAFIDE AND TRUE. THE CIT(A) ALSO CONSIDERED SECTION 132(4) AND HELD THAT BALD DELAYED AND UNSUBSTANTIATED RETRACTION IS WORTHLESS. IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 10 5.5 THE CIT(A) HELD THAT THE AO MADE THE ADDITION O F RS. 3,05,80,423/- BASED ON PRIMARY EVIDENCE AND BASED ON DOCUMENTS FO UND DURING THE COURSE OF SEARCH. THE CIT(A) FURTHER HELD THAT RELIANCE OF THE AO ON THE INSPECTORS REPORT WAS A CIRCUMSTANTIAL AND SECONDARY EVIDENCE, WHICH ONLY STRENGTHENS THE PRIMARY EVIDENCE. EVEN IF THE SAID REPORT IS FO UND TO BE DEBATABLE, IT YET CANNOT DILUTE OR DEFACE THE VALUE AND EFFICACY OF T HE PRIMARY EVIDENCE. 6. THE LEARNED AR SUBMITTED THAT A MASSIVE SEARCH A CTION U/S 132 WAS CARRIED OUT ON 29 TH JANUARY, 2003 WITH A FORCE OF ABOUT 100 OFFICERS A ND CONTINUED UP TO 28.06.2003. DURING THE COURSE OF SE ARCH NO UNACCOUNTED CASH, RAW MATERIAL OR FINISHED GOODS WERE FOUND AT ANY OF THE PREMISES OF THE ASSESSEE COMPANY. THE LEARNED AR FURTHER SUBMITTED THAT NO UNACCOUNTED CASH/ASSET WAS FOUND AT THE PERSONAL RESIDENCE OF T HE PROMOTERS, DIRECTORS AND EXECUTIVE DIRECTOR. ALL THE JEWELLERY WAS TALLIED A S PER THE INCOME TAX/WEALTH TAX RETURNS FILED. ALL THE CASH IN HAND IN THE COMP ANYS ACCOUNT WAS TALLIED AND WAS NOT SEIZED BY THE SEARCH PARTY. THE LEARNED AR FURTHER SUBMITTED THAT SEIZED FROM THE CABIN OF MANAGING DIRECTOR MR. RAJE NDRA SOMANI OF RS. 6.00 LAKH, WHICH WAS HIS PERSONAL AND HAS BEEN EXPLAINED BY MR. RAJENDRA SOMANI IN HIS PERSONAL FILE IN HIS PERSONAL SUBMISSION OF BLOCK ASSESSMENT. THE LEARNED AR SUBMITTED THAT DURING THE COURSE OF SEAR CH NO INCRIMINATING DOCUMENTS WERE FOUND REPRESENTING UNDISCLOSED INCOM E. IT IS ALSO THE SUBMISSION OF THE LEARNED AR THAT LOOSE PAPERS WERE FOUND IN THE CABIN OF MR. PR KABRA WITH SOME NOTING BY HIM WHO WAS NOT AN EMPLOYEE OF THE ASSESSEE CO. THE LEARNED AR SUBMITTED THAT THE STAT EMENT OF MR. PR KABRA WAS TAKEN U/S 132(4) UNDER THREAT & DURESS, HOWEVER , MR. KABRA RETRACTED THE STATEMENT MADE ON 30.01.2003 VIDE AFFIDAVIT DATED 0 4.02.2003, WHICH WAS NOT ACCEPTED BY THE AO ON THE GROUND THAT THE AFFIDAVIT CONTAINING RETRACTION MADE ON 04.02.2003 BUT IT WAS BROUGHT ON RECORD ONL Y ON 28.10.2004. THE LEARNED AR POINTED OUT THAT THE AFFIDAVIT RECORDED ON 04.02.2003 DOES NOT GET VITIATED ON ACCOUNT OF ALLEGED DELAY IN FILING THE SAME BEFORE THE AO AS HELD IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 11 IN THE CASE OF CIT VS. K BHUVANENDRA [2008] 303 ITR 235. IN THIS CONNECTION, THE LEARNED AR PLACED ON THE JUDGMENT O F APEX COURT IN THE CASE OF KTMS MOHD. & ANOTHER V. UNION OF INDIA (1992) IN SC 124, WHEREIN THE APEX COURT HAS OBSERVED THAT WHEN THE AUTHORITIES I NTEND TO TAKE ACTION AGAINST THE DEPONENT OF A STATEMENT ON THE BASIS OF HIS INCULPATORY STATEMENT WHICH HAS BEEN SUBSEQUENTLY RETRACTED, THE OFFICER CONCERNED MUST TAKE BOTH THE STATEMENTS TOGETHER, GIVE A FINDING ABOUT THE N ATURE OF THE RETRACTION AND THEN ACT UPON THE EARLIER INCULPATORY ONE. BUT TO B ISECT THE TWO STATEMENTS AND MAKE US OF THE INCULPATORY STATEMENT ALONG BY P ASSING THE OTHER CANNOT BE LEGALLY PERMISSIBLE BECAUSE ADMISSIBILITY, RELIA BILITY AND THE EVIDENTIARY VALUE OF THE INCULPATORY STATEMENT DEPEND ON THE BE NCH MARK OF THE PROVISIONS OF THE EVIDENCE ACT AND GENERAL CRIMINAL LAW. 6.1 THE LEARNED AR SUBMITTED THAT THE INVESTIGATING OFFICERS HAD ONLY TAKEN A CONFESSION STATEMENT FROM MR. KABRA AND APA RT FROM THAT NO ATTEMPT HAS BEEN MADE TO CONTROVERT THE RETRACTION MADE BY MR. KABRA ON 04.02.2003. HE SUBMITTED THAT THERE IS NO ALLEGATION THAT THE M ANAGEMENT OF THE ASSESSEE WAS IN ANY WAY PARTY TO SUCH ARRANGEMENT, WHICH IS EVIDENT FROM THE STATEMENT OF MR. KABRA DATED 30.01.2003 & 29.11.04. FURTHER MR. KABRA VIDE LETTER DATED 25.11.04 CLARIFIED THAT THE ASSESSEE D ID NOT HAVE ANY KNOWLEDGE OF LOOSE PAPERS WRITTEN BY HIM AND THE SAME WERE NE VER SHARED BY HIM WITH ANY PERSON IN THE ASSESSEE COMPANY. THE LEARNED AR CONTENDED THAT DURING THE COURSE OF SEARCH THE ADI SHOULD HAVE PRODUCED T HE SAID STATEMENT BEFORE THE DIRECTORS OF THE ASSESSEE COMPANY FOR CROSS EXA MINATION BUT THE ADI FAILED TO DO SO. FOR THIS CONTENTION, THE LEARNED A R RELIED UPON THE JUDGMENT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD., 288 ITR 345 (DEL) WHEREIN IT WAS HELD THAT STATEMENT RELIED ON BY THE DEPARTMENT CANNOT BE USED AGAINST THE ASSESSEE WITHOUT IT BEING TESTED AND MADE AVAIL ABLE TO THE ASSESSEE FOR CROSS-EXAMINATION. THE LEARNED AR CONTENDED THAT TH E REVENUE AUTHORITIES HAVE ERRED IN RELYING UPON THE CONFESSIONAL STATEME NT ALONE. IN A CASE OF CIRCUMSTANTIAL EVIDENCE THE TOTALITY OF THE CIRCUMS TANCES HAS GOT TO BE TAKEN IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 12 INTO CONSIDERATION AND THE COMBINED EFFECT OF ALL T HOSE CIRCUMSTANCES IS DETERMINATIVE OF THE QUESTION AS TO WHETHER OR NOT A PARTICULAR FACT IS PROVED, FOR WHICH HE RELIED UPON THE JUDGMENT IN THE CASE O F CIT VS. RAMESHWAR PRASAD BAGLA 68 ITR 653 (ALL.) THE LEARNED AR HAS S UBMITTED THAT IN THE ASSESSMENT RECORDS OF THE BUYERS OF THE SCRAP WHERE IN THE SALE PRICE OF THE ASSESSEE AND THE PURCHASE PRICE OF THE BUYER HAVE B EEN TALLIED AND NO ADDITION WHATSOEVER HAS BEEN MADE IN THEIR RESPECTI VE ASSESSMENTS. FURTHER THE SALE PRICE OF MOST OF THE DEALERS OF THE ASSESS EE HAS BEEN EXAMINED WHEREIN LEARNED AO HAS NOT FOUND ANY DISCREPANCY. T HE AO CANNOT BLOW HOT & COLD AT THE SAME TIME. THE LEARNED AR POINTED OU T THAT ONCE THE ADMISSION MADE IN THE EARLIER STATEMENT IS RETRACTED, THE SEC OND STATEMENT HAS TO BE READ TOGETHER TO EVALUATE THE WEIGHT OF THE ADMISSION FO R THE PURPOSE OF APPRECIATING THE EVIDENCE. THE SAID PRINCIPLES ARE OBSERVED BY HONBLE SUPREME COURT IN THE CASE OF PULLANGODE RUBBER PROD UCT CO. LTD. VS. STATE OF KERALA, 91 ITR 18 THAT THE ENTRIES IN THE BOOKS OF THE ASSESSEE COMPANY AMOUNTED TO AN ADMISSION AND THOUGH WAS AN IMPORTAN T PIECE OF EVIDENCE COULD NOT BE SAID TO BE CONCLUSIVE AND THAT IT WAS OPEN TO THE PERSON TO MAKE AN ATTEMPT TO SHOW THAT IT WAS INCORRECT. THE SAID PRINCIPLE REGARDING EVIDENTIARY VALUE OF ADMISSION WAS ALSO FOLLOWED IN CIT VS. ASHOK KUMAR SONI (RAJ.) (HC) 291 ITR 172 WHEREIN IT WAS OBSERVE D THAT VALUE IS TO BE ATTACHED IN TOTALITY OF AVAILABLE MATERIAL TO THE A LLEGED ADMISSION OF THE ASSESSEE AND WHETHER PREVIOUS STATEMENT IS EXPLAINE D OR NOT ARE ALL QUESTIONS FALLING IN THE REAL OF REACHING FINDING OF FACT BY APPRECIATING EVIDENCE. THUS, THE LEARNED AR SUBMITTED THAT THE STATEMENT MADE BY MR. KABRA CANNOT BE CONSIDERED AS THE SAME IS NOT VOLUNTARY AND WAS MAD E UNDER THREAT AND DURESS OF THE SEARCH OFFICER. ONCE THE SAID STATEMENT WAS RETRACTED AND THE EARLIER STATEMENT OF ADMISSION WAS EXPLAINED AND ALSO IT WA S DISAPPROVED BY THIRD PARTIES THE SAME CANNOT BE ACCEPTED AS THE CONCLUSI VE PROOF. FOR THIS CONTENTION, THE AR PLACED ON THE DECISION OF CBI VS . V.C. SHUKLA & OTHERS, AIR 1998 SC (PG. 1406) WHEREIN THE APEX COURT HAS H ELD THAT IN THE ABSENCE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 13 OF INDEPENDENT AND CORROBORATIVE EVIDENCE THE DOCUM ENT OR PAPERS SEIZED WILL NOT HAVE ANY EVIDENTIARY VALUE. 6.2 THE LEARNED AR SUBMITTED THAT THE AO HAS NOT FO UND ANY OF THE FOLLOWING FROM THE MATERIALS PRODUCED BY THE ASSESS EE, LEADING TO MAKE AN ADDITION:- A) NO UNACCOUNTED CASH/ASSETS WAS FOUND B) NO UNACCOUNTED EXPENSES WERE FOUND. C) THE PARTIES (SCRAP MERCHANTS) HAVE CONFIRMED THE SCRAP SALE AND RECEIPTS AS PER BOOKS OF ACCOUNTS AND HAVE DENIED A NY CASH TRANSACTIONS WITH THE ASSESSEE. D) LOOSE PAPERS IN THE PERSONAL HANDWRITING OF PR K ABRA WERE EXPLAINED BY HIM AND HE HAS RETRACTED HIS EARLIER S TATEMENT. E) NEITHER THE DIRECTORS/NOR THE OTHER PERSONS INVO LVED WITH GENERATION OF SCRAP EVER STATED OR CONFIRMED SUCH OUT OF BOOKS CASH TRANSACTIONS. F) DOCUMENTARY EVIDENCE WERE SUBMITTED TO DEMONSTRA TE THAT THE RATE AT WHICH THE ASSESSEE HAS SOLD THE SCRAP WAS VERY M UCH COMPARABLE AND WAS IN CONSONANCE WITH THE RATES CHARGED BY OTH ER DEALERS. G) LIST OF NALCO RATES FOR FRESH ALUMINIUM INGOTS W ERE ALSO SUBMITTED TO PROVE THAT SCRAP RATE CANNOT BE MORE T HAN THE RATES OF PRIME MATERIAL. H) THE ASSESSEE HAD UNABSORBED BROUGHT FORWARD LOSS ES UP TO 2003-04 AND WAS NOT AVAILING THE BENEFITS OF DEDUCTION U/S 80IA & U/S 80 HHC IN LIEU OF LOSSES DECLARED IN THE RETURN OF INCOME. HENCE, THERE WAS NO MOTIVATION OR BENEFIT WHAT SO EVER TO THE ASSESSEE TO ENTER INTO SUCH KIND OF CASH TRANSACTIONS. I) NO ADVERSE INFERENCE CAN BE DRAWN OUT OF LOOSE P APERS KEPT BY A PERSON WHO IS NOT AN EMPLOYEE OF COMPANY, NOT SUPPO RTED BY ACTUAL CASH OR GENERATION OF ANY TANGIBLE ASSET OUT OF BOO KS. IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 14 J) THE ASSESSEE COMPANY HAD NO KNOWLEDGE OF PAPERS FOUND AND SEIZED FROM THE CABIN OF MR. KABRA. HOW CAN THE SAME ARE T AKEN AS ASSESSEE COMPANIES INCOME. 6.3 IN SUPPORT OF HIS CASE THE LEARNED AR RELIED UP ON THE FOLLOWING DECISIONS:- 1. DY. CIT VS. PRAMUKH BUILDERS, 112 ITD 179 (AHD) (TM) 2. DCIT VS. M/S PREMSONS, (MUM) ITAT ITA NO.4698/ MUM/2006. 3. KAILASHBEN MANHARLAL CHOKSI VS. CIT 174 TAXMAN 4 66 (GUJ.) 4. CIT VS. VIVEK DOUGALL [2008] 4 DTR 103 (DEL.) 5. PANGAMBAM KALANJAY SINGH V.STATE OF MANIPUR,AIR 1956 SC9 6. SRI KRISHNA V. KURUKSHETRA UNIVERSITY, AIR 1976 SC 376 7. PAKANI SWAMI V. STATE OF TAMIL NADU, AIR 1956 SC 593 8. PYARE LAL BHARGAVA VS. STATE OF RAJASTHAN, AIR 1 963 SC 1094 9. KTMS MOHAMMED, 197 ITR 196 (1992) 10. L. SOHAN LAL GUPTA V. CIT [1958] 33 ITR 786 (AL L.) 11. S.P. GOYAL, 82 ITD 85 12. SUSHILADEVI AGARWAL, 49 TTJ (AHD) 663 13. DEEPCHAND & CO., 51 TTJ (BOM) 421 14. PUSHPA VIHAR 48 TTJ (BOM) 389 15. RAMDAS MOTOR, 232 ITR 177 (AP) 16. KURUKSHETRA UNIVERSITY AIR 1976 (SC) 376 6.4 FOR EVIDENTIARY VALUE OF LOOSE PAPERS, THE AR R ELIED UPON THE FOLLOWING DECISIONS:- 1. S.K. GUPTA, 63 TTJ 532 (DEL.) 2. ASHWANI KUMAR 39 ITD 183 (DEL.) 3. SHAILESH SHAH 53 ITD 153 (BOM) 4. D.N. KAMANI HUF 70 ITD 77 (PAT.) (TM) 7. ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPO N THE ORDERS OF THE REVENUE AUTHORITIES. HE SUBMITTED THAT DURING THE C OURSE OF SEARCH, SOME EVIDENCE IN THE FORM OF LOOSE PAPER REGARDING SALE OF SCRAP WAS FOUND. THE EXPLANATION OF THE ASSESSEE WAS THAT THOSE PAPERS A RE NOT RELATED TO THE ASSESSEE. THE LEARNED DR SUBMITTED THAT WHY MR. KAB RA WAS NOT POINTED OUT THIS EXPLANATION WHILE GIVING STATEMENT AT THE TIME OF SEARCH. THE LEARNED DR IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 15 SUBMITTED THAT MR. KABRA HAS CATEGORICALLY ADMITTED IN HIS STATEMENT AT THE TIME OF SEARCH THAT THOSE PAPERS WERE RELATED TO UN ACCOUNTED SCRAP SALE. THE LEARNED DR SUBMITTED THAT THERE IS NO EVIDENCE ON R ECORD TO SHOW THAT THE STATEMENT OF MR. KABRA WAS TAKEN BY FORCE OR UNDUE PRESSURE. HE FURTHER SUBMITTED THAT THERE IS NO COMPLIANT BY MR. KABRA T HAT THE STATEMENT WAS TAKEN BY FORCE OR UNDUE PRESSURE. THE LEARNED DR SU BMITTED THAT ADMISSION MADE AT THE TIME OF SEARCH IS ACCEPTABLE EVIDENCE. HE RELIED UPON THE DECISION REPORTED IN THE CASE OF HIRALAL MAGANLAL & CO. V. DEPUTY COMMISSIONER OF INCOME-TAX, SR-52 96 ITD 113. THE LEARNED DR SUBMITTED THAT THE ASSESSEE CAME OUT WITH A THEORY WHICH IS A N AFTER THOUGHT. THE LEARNED DR SUBMITTED THAT THE PAPER FOUND AT THE TI ME OF SEARCH CLEARLY SHOWED TWO ITEMS, ONE IS ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THE OTHER IS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE LEARNED DR SUBMITTED THAT DOCUMENTS FOUND IN THE FORM OF LOOSE PAPERS DURING THE COURSE OF SEARCH ARE AN IMPORTANT DOCUMENT AND THE SAME IS ADMISSIBLE UN LESS IT IS PROVED OTHERWISE. THE LEARNED DR IN SUPPORT OF HIS CONTENT ION RELIED UPON THE DECISIONS IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. V. STATE OF KERALA 91 ITR 18(SC) AND T.S. KUMARASAMY V. ASSISTA NT COMMISSIONER OF INCOME-TAX [1998] 65 ITD 188 (MAD.) 7.1 THE LEARNED DR SUBMITTED THAT RETRACTION AFFIDA VIT HAS BEEN RIGHTLY REJECTED BY THE AO AS THE REASONS GIVEN FOR RETRACT ION IN THE AFFIDAVIT WERE NOT PROPER AND GOOD REASONS. MR. KABRA WAS TO TELL TO BE HAVING ILLNESS BUT HOW HE DISCHARGED HIS DUTIES. THE LEARNED DR WAS RE FERRING VARIOUS QUESTIONS AND ANSWERS TO THE STATEMENT OF MR. KABRA. THE LEAR NED DR SUBMITTED THAT THE TYPE OF DURESS AND PRESSURE WAS NOT POINTED OUT BY MR. KABRA. THE LEARNED DR SUBMITTED THAT DOCUMENTARY EVIDENCE NEVE R STATES LIE AND WHAT IS STATED IN THE AFFIDAVIT IS NOT TENABLE WHICH SELF S ERVINGS/SELF MADE EVIDENCE. THE LEARNED DR IN SUPPORT OF HIS CONTENTION RELIED UPON THE FOLLOWING DECISIONS:- IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 16 1) SETH CHAMPALAL RAM SWARUP (R.B.) V. COMMISSI ONER OF INCOME-TAX 68 ITR 181 (SC) 2) P.R. PATEL V. DEPUTY COMMISSIONER OF INCOM E-TAX 78 ITD 51(MUM) 3). ASIA INVESTMENTS LTD. V. DEPUTY COMMISSIONE R OF INCOME-TAX 90 ITD 630 (MUM) 4) INCOME-TAX OFFICER V. SKYJET AVIATION (P.) LTD. [1999] 71 ITD 95 (AHD.) (TM 7.2 THE LEARNED DR SUBMITTED THAT THE AO HAS BROUGH T ON RECORD THE FACTS BASED ON MATERIAL FOUND AT THE TIME OF SEARCH. UNDE R THE CIRCUMSTANCES, RETRACTION OF STATEMENT OF MR. KABRA IS NOT ACCEPTA BLE. THE AO MADE THE ADDITION ON THE BASIS OF CORROBORATIVE EVIDENCE, TH EREFORE, ADDITION SUSTAINED BY THE CIT(A) MAY BE CONFIRMED. 8 WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES, RECORD PERUSED AND GONE THROUGH THE DECISIONS CITED. AS REGARDS TH E DECISIONS CITED BY BOTH SIDES WE AGREE WITH THE RATIOS LAID DOWN IN THOSE C ASES UNDER THE CIRCUMSTANCES AND FACTS OF THE RESPECTIVE CASE. THE FACTS OF THOSE CASES AND FACTS OF THE CASE UNDER CONSIDERATION ARE NOT SIMIL AR. HOWEVER THE RATIOS OF THOSE DECISIONS HAVE BEEN CONSIDERED WHILE DECIDING THE CASE UNDER CONSIDERATION BY US. BEFORE DEALING WITH THE VARIO US LIMBS OF THIS PROVISION OF SECTION 132 OF THE ACT, WE MAY GLANCE AT THE HIS TORICAL DEVELOPMENT OF THE CONCEPT OF SEARCH AND SEIZURE. CHRONOLOGICALLY THER E IS A CHEQUERED HISTORY OF EVOLUTION OF THIS LAW. THE AUTHORITIES UNDER THE IN COME-TAX ACT, 1922 DID NOT ORIGINALLY POSSESS ANY POWER OF SEARCH AND SEIZURE. THEY HAD ONLY THE POWERS NORMALLY EXERCISABLE BY CIVIL COURTS UNDER THE PROV ISIONS OF CIVIL PROCEDURE CODE, 1908 SUCH AS THE POWERS OF DISCOVERY AND INSP ECTIONS AND ENFORCING ATTENDANCE OF WITNESSES, ETC. THE POWERS WERE EMBOD IED IN SECTION 132 OF THE INCOME-TAX ACT, 1961. HOWEVER, SECTION 30 OF THE FI NANCE ACT, 1964 WHICH REPLACED SECTION 132 BY A COMPLETELY NEW PROVISION ENLARGED THESE POWERS. IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 17 THE PROVISIONS OF THIS SECTION HAVE SINCE BEEN GRAN TED SEVERAL EXTENSIONS BY DEPARTMENT CIRCULARS. SUCH SEARCH AND SEIZURE CAN B E AUTHORISED UNDER THAT PROVISION IF IN CONSEQUENCE OF INFORMATION IN POSSE SSION OF THE CONCERNED AUTHORITY, HE HAS REASON TO BELIEVE THAT THE BOOKS OR DOCUMENTS ARE NOT, OR WOULD NOT BE PRODUCED OR ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING WHICH REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY, HAS NOT BEEN, OR WOULD NOT BE DISCLOSED FOR THE PUR POSES OF THE SAID ACT. THESE ASSETS REFERRED TO IN CLAUSE (C) OF SECTION 1 32(1) ARE FOR THE PURPOSE OF SECTION 132, AND DESCRIBED AS THE UNDISCLOSED INCO ME OR PROPERTY. IN A NUTSHELL THE OBJECT OF SECTION 132 WAS TO GET HOLD OF EVIDENCE ON THE TAX LIABILITY OF A PERSON, TO GET HOLD OF ASSETS REPRES ENTING INCOME BELIEVED TO BE UNDISCLOSED AND FINALLY APPLYING SO MUCH OF THEM AS MAY BE NECESSARY IN DISCHARGE OF THE EXISTING OR ANTICIPATED TAX LIABIL ITY OF THE PERSON CONCERNED. THE OBJECTIVE OF THE SEARCH IS JUST TO ASCERTAIN FA CTS AND COLLECT EVIDENCE OF CONCEALED AND UNDISCLOSED INCOME BUT IT IS NOT THEI R MAIN OBJECTIVE TO EXTRACT DECLARATION FROM THE PERSONS SEARCHED ABOUT THE ALL EGED UNDISCLOSED INCOME. SEARCH AND ITS ASSESSMENT POWERS ARE EXTRAORDINARY POWERS OF REVENUE AUTHORITIES WHICH REQUIRE TO BE EXERCISED STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 8.1 UNDER SUB-SECTION (4) OF SECTION 132, THE AU THORISED OFFICER MAY, DURING THE COURSE OF HIS SEARCH OR SEIZURE, EXAMINE ON OAT H ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCO UNT, DOCUMENTS OR OTHER ASSETS MENTIONED THEREIN AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN EVIDENCE IN A NY PROCEEDINGS UNDER THE ACT. IN ASSESSING UNDISCLOSED INCOME OF THE ASSESSE E ON THE BASIS OF MATERIAL FOUND DURING SEARCH, IT IS NECESSARY THAT THE MATER IAL SHOULD BE PERFECT IN EVIDENCE TO INDICATE THE EXISTENCE OF UNDISCLOSED I NCOME. IN THE ABSENCE OF SUCH EVIDENCE, THE ADDITION MADE HAS TO BE DELETED. THE POWER TO INTERROGATE ON OATH CONFERRED BY SECTION 132(4) IS NOT FOR THE PURPOSE OF GENERAL INVESTIGATIONS OF THE ASSETS, BUT FOR THE LIMITED P URPOSE OF SEEKING IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 18 EXPLANATION OF INFORMATION IN RESPECT OF THE DOCUME NTS, ARTICLES OR THINGS FOUND DURING THE SEARCH. THUS, THE AUTHORISED OFFIC ER HAS A LIMITED POWER TO MAKE ENQUIRIES ON OATH IN RESPECT OF HIS FINDINGS F ROM THE SEARCH AND HE IS NOT AUTHORISED TO PUT QUESTIONS IN GENERAL. 8.2 IN THE LIGHT OF ABOVE DISCUSSION WE CONSIDE R THE FACTS OF THE CASE UNDER CONSIDERATIONS. THAT SEARCH ACTION WAS COMMENCED ON 29.01.2003 AND CONCLUDED ON 26.3.2003. DURING THE COURSE OF SEARCH CASH OF RS. 19,60,420/- FOUND WHICH WAS TALLIED AND WAS FOUND IN ORDER. SOM E INCRIMINATING DOCUMENTS IN RESPECT OF SCRAP SALE WERE FOUND FROM THE CABIN OF MR. P.R. KABRA. MR. KABRA IN HIS STATEMENT RECORDED U/S 132( 4) AT THE TIME OF SEARCH ADMITTED THAT PART OF SCRAP SALE WAS MADE IN CASH. CASH RECEIVED ON ACCOUNT OF SCRAP SALE WAS USED FOR CERTAIN UNFORESEEN EXPEN SES WHICH WERE INCURRED IN CASH. HOWEVER, MR. KABRA RETRACTED FROM HIS STAT EMENT BY FILING AFFIDAVIT DATED 4/2/2003, FILED WITH DEPARTMENT ON 28/10/2004 . IN THE POST SEARCH INVESTIGATIONS MADE DURING BLOCK ASSESSMENT PROCEED INGS THE PURCHASING PARTIES OF SCRAP WERE ADMITTED THAT THEY PURCHASED THE SCRAP SALE AT THE PRICE AT WHICH THE ASSESSEE ACCOUNTED FOR IN THEIR BOOKS OF ACCOUNT AND NO CASH PAYMENTS WERE MADE ON AND ABOVE THAT PRICE. THE ASS ESSEE TRIED TO JUSTIFY THAT THE SCRAP SALES WERE CORRECTLY RECORDED IN THE BOOKS OF ACCOUNT AND NO EXTRA AMOUNT WAS RECEIVED IN CASH AS ALLEGED BY THE DEPARTMENT. THE ASSESSEE IN SUPPORT OF THEIR CONTENTION FURNISHED EVIDENCE I N THE FORM OF COMPARABLE RATES OF SCRAPS OF THE MARKET & OTHERS. SCARP SALE AND BOOKS OF ACCOUNT ARE SUBJECT TO EXAMINATION BY THE EXCISE AUTHORITIES. T HERE IS NO MATERIAL ON RECORD WHICH SHOWS ANY ADVERSE REMARKS BY THE EXCIS E AUTHORITIES IN THIS REGARDS. IT IS NOT THE CASE OF THE REVENUE THAT THE RE WAS ABNORMAL GENERATION OF SCARPS IN THE PRODUCTIONS PROCESS. THE ASSESSEE FURNISHED THE RELEVANT MATERIALS TO ESTABLISH THAT THE GENERATION OF SCARP S WAS THE REASONABLE. THE AO DID NOT ACCEPT THE ASSESSEES CONTENTION AND HEL D THAT THE PART OF SCRAP SALE WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE CASE OF THE REVENUE IS THAT IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 19 NOTING AND CALCULATION FOUND IN INCRIMINATING DOC UMENTS WHICH WERE RELATED TO SCAP SALE AND WERE NOT ACCOUNTED FOR THE BOOKS O F ACCOUNT. AS PER THE NOTING THE SCRAP SALES NEAR ABOUT RS. 70 PER KG WHE REAS SCRAP BILLS WERE OF RS. 35/- PER KG. THE DIFFERENCE AMOUNT OF CASH SALE S OF SCRAP SALE WAS THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE EXPLAN ATION OF THE ASSESSEE IS THAT THESE PAPERS WERE FOUND FORM THE OFFICE/ CABIN OF MR. KABRA AND THESE WERE THE WORKING OF MR. KABRA FOR THE PROJECT OF SE TTING UP FURNACE FOR THE PURPOSE OF CONVERTING SCRAP INTO ALUMINIUM INGOTS/M S BARS. ALL CALCULATION IS THE CALCULATION OF NOTIONAL CALCULATION. 8.3 AS PER THE ABOVE DISCUSSIONS, IN CASE OF SE ARCH A SEPARATE PROCEDURE IS DEVISED IN CHAPTER XIV-B TO DEAL WITH THE CASES WHE RE SEARCH IS INITIATED OR REQUISITION MADE UNDER SECTION 132 OR 132A, AFTER 3 0-6-1995.CHAPTER XIV-B LAYS DOWN A SPECIAL PROCEDURE FOR ASSESSMENT OF SEA RCH CASES AND PROVIDES FOR ASSESSMENT OF UNDISCLOSED INCOME AS A RESULT OF SEARCH. THE UNDISCLOSED INCOME IS DEFINED IN CLAUSE (B) OF SECTION 158B . ACCORDING TO THIS SECTION UNDISCLOSED INCOME' INCLUDES (1) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR (2) ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF A CCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, (3) OR ANY EXPENSE, DEDUCTION OR ALLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE (4) THAT SUCH MONEY, BULLION, JEWELLERY, VALUABLE A RTICLE, THING, ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTI ON REPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THIS ACT, 8.4 AS STATED IN ABOVE DISCUSSIONS THAT THE OB JECT OF SEARCH PROVISIONS OF THE ACT IS TO FIND OUT UNDISCLOSED INCOME. ONLY FIN DING OUT LOOSE PAPERS OR DOCUMENTS IS NOT THE OBJECT OF THE SEARCH PROVISION S THE ACT THAT IS THE REASON IT HAS BEEN REPEATEDLY HELD BY VARIOUS COURTS THAT MERELY FINDING OF LOOSE PAPERS OR DOCUMENT AT THE TIME OF SEARCH IS NOT SUF FICIENT FOR BLOCK ASSESSMENT UNDER CHAPTER XIV-B OF THE ACT. THE IMPO RTANT THING IS THAT THOSE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 20 LOOSE PAPERS AND DOCUMENTS FOUND DURING THE COURSE OF SEARCH MUST BE RELATED TO UNDISCLOSED INCOME BACKED BY THE ASSETS. FROM ABOVE DEFINITION OF UNDISCLOSED INCOME AND OUR ABOVE GENERAL DISCUSS IONS ON SEARCH UNDER SECTION 132 OF THE ACT WE FIND THAT THE ULTIMATE OB JECT IS TO FIND OUT UNDISCLOSED INCOME AND NOT TO FIND OUT THE DOCUMENT WHICH ARE NOT REPRESENT INCOME. THEREFORE THE CBDT HAS TIME TO TIME ISSUES INSTRUCTIONS/CIRCULARS POINTING OUT THAT DOCUMENT FOUND AT THE TIME SEARCH AND STATEMENT TAKEN AT THE TIME OF SEARCH SHOULD BACK BY INCOME/ ASSETS.( CIRCULAR NO 286/2/2003-IT (INV,), DT. 10.3.2003)ACCORDING TO THE DEFINITION O F UNDISCLOSED INCOME WE FIND THAT IN THE CASE UNDER CONSIDERATION THE REVE NUES CASE FALLS UNDER CLAUSE 2 MENTIONED ABOVE, ANY INCOME BASED ON ANY E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS. IN THE CASE UNDER CONSIDERATION THE QUESTION TO BE EXAMINED HERE IS THAT WHETHER ON THE BASIS OF MATERIAL FOUND AT THE TIME OF SEARCH CAN IT BE HELD THAT THE INCOME WAS UNDISCLOSED INCOME AND HAS NOT BEEN OR WOULD NOT HAVE BEEN DISC LOSED FOR THE PURPOSE OF THIS ACT? THE FIRST ASPECT OF THE ABOVE CONDITION T O BE EXAMINED IS THE WORD INCOME.INCOME IS DEFINED IN SECTION 2(24) OF TH E ACT. INCOME INCLUDES PROFITS AND GAINS/LOSS. PROFITS/LOSS IS A RESULT OF BUSINESS TRANSACTIONS. IT IS PERTINENT TO MENTION THAT PROFIT AND GAINS/LOSS CAN BE EARNED FROM A TRANSACTION ONLY ON COMPLETION OF ITS BUSINESS CIRC LES. A BUSINESS TRANSACTION HAS ITS OWN INDEPENDENT CIRCLES AND AFTER COMPLETIO N OF THE CIRCLES OF THE TRANSACTION, THE BUSINESS PROFIT/LOSS CAN BE DETERM INED. THE REVENUES CASE IN THIS APPEAL IS THAT THERE WAS UNACCOUNTED SALE O F SCRAP ON THE BASIS OF MATERIAL FOUND AT THE TIME OF SEARCH. THIS SALE O F SCRAP TRANSACTION HAS ALSO ITS OWN CIRCLE. THE ASSESSEE IS SELLER OF SCRAP AND THERE MUST BE SOME OTHER PARTIES, WHO ARE PURCHASERS. THE TRANSACTION MUST H AVE CONSIDERATION, AS IN THE CASE UNDER CONSIDERATION, STATED TO BE CASH. TH E CIRCLE OF THE TRANSACTION FURTHER REQUIRES/EXTENDS, THAT ON RECEIPT OF THE CA SH, THAT CASH MUST BE UTILIZED OR APPLIED IN ACQUIRING , BULLION, JEWELLE RY OR OTHER VALUABLE ARTICLE OR THING OR INVESTMENT OF PROPERTIES OR INCURRING E XPENDITURE FOR THE PURPOSE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 21 OF THE BUSINESS OR KEEP THE CASH IN THE FORM OF ASS ET AS IT IS. WHEN THE DEPARTMENT EXERCISES EXTRAORDINARY POWER OF SEARCH IN THAT CASE EVIDENCE, DOCUMENTS AND MATERIAL PERTAIN TO THE CIRCLE OF THE TRANSACTIONS RELATED TO INCOME MUST BE FOUND. KEEPING IN VIEW ABOVE DISCUSS ION ON CIRCLES OF BUSINESS TRANSACTION, IN THE CASE UNDER CONSIDERATI ON WE FIND THAT ONLY THE FIRST STEP OF THE CIRCLE OF TRANSACTION OF SCRAP SA LES SATISFIED BUT THE OTHER SUBSEQUENT STEPS OF THE CIRCLES OF THE TRANSACTIONS NAMELY; APPLICATION OF CASH ARE MISSING. THESE SUBSEQUENT STEPS OF THE CIRCLE O F THE TRANSACTIONS DID NOT SUPPORT THE REVENUES CASE. ON EXAMINATION BY THE A O, IT WAS FOUND THAT ALL THE PURCHASING PARTIES CLEARLY DENIED THAT THEY HAV E PAID ANY EXTRA CASH TO THE ASSESSEE. THE CASH FOUND AT THE TIME OF SEARCH WAS FOUND TO BE IN ORDER AND TALLIED WITH THE BOOKS OF ACCOUNT. THERE IS NO MATE RIAL BASED ON WHICH IT CAN BE SAID THAT THE CASH GENERATED ON ACCOUNT OF SCRAP SALE HAS BEEN APPLIED OR INCURRING EXPENDITURE FOR THE BUSINESS OR OTHERWISE OR THE ASSESSEE HAS INVESTED THE SAME IN SOME OTHER INVESTMENTS EITHER IN MOVABLE OR IMMOVABLE PROPERTIES ASSETS. THE REVENUE HAS COMPLETELY FAIL ED TO POINT OUT ANY MATERIAL IN RESPECT OF OTHER STEPS OF THE CIRCLE OF THE TRANSACTION OF SCRAP SALE. IN OTHER WORDS, IT CAN BE HELD THAT THE REVENUE HAS NOT BEEN ABLE TO FIND OUT THAT THERE WAS ANY INCOME FROM THE TRANSACTION WHIC H CAN BE SAID TO BE UNDISCLOSED INCOME ASSESSABLE UNDER THE BLOCK ASSES SMENT. THE DOCUMENTS FOUND AT THE TIME OF SEARCH ARE NOT BACKED BY ANY I NCOME, ASSET, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG. 8.5 ONE OF THE CONDITIONS FOR TO DETERMINATION OF UNDISCLOSED INCOME IS THAT THE INCOME SO FOUND AT THE TIME OF SEARCH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSE OF THIS ACT. IF WE S EE THE FACTS OF THE CASE UNDER CONSIDERATION, WE FIND THAT THE SCRAP SALE HA S ALREADY BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE SAME WERE OFFERED FOR TAX IN THE RESPECTIVE YEARS. THE ASSESSMENT OF UNDISCLO SED INCOME OF A BLOCK PERIOD IS DIFFERENT FROM THE REGULAR ASSESSMENT OF THE TOTAL INCOME OF A PREVIOUS REGULAR ASSESSMENT YEAR .THE BLOCK ASSESSM ENT TARGETS THE AREA OF IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 22 UNDISCLOSED INCOMETHAT WHAT WAS NOT DISCLOSED AND WOULD NOT BE DISCLOSEDWHILE THE REGULAR ASSESSMENT IS TO ASSESS THE TOTAL INCOME OR LOSS OF THE PREVIOUS YEAR WHERE RETURN IS FILED UNDER SE CTION 139 AND THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIENT UNDER S ECTION 143(2) TO ENSURE THAT THE ASSESSEE HAD NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDERPAID TAX IN ANY MANN ER. BOTH THESE AREAS ARE DIFFERENT AND THERE IS NO WARRANT TO PREVENT THE ST ATUTORY POWER OF REGULAR ASSESSMENT FROM BEING EXERCISED WHERE THE BLOCK ASS ESSMENT IS UNDERTAKEN OR COMPLETED FOR ASSESSING THE UNDISCLOSED INCOME. THA T SURELY IS NOT INTENDED BY THE LEGISLATURE AND NO SUCH DISASTROUS RESULT IS CONTEMPLATED BY INTRODUCING SPECIAL PROCEDURE FOR ASSESSMENT OF SEA RCH CASES IN CHAPTER XIV- B. THE SPECIAL PROCEDURE FOR ASSESSMENT OF UNDISCLO SED INCOME AS A RESULT OF SEARCH, WHICH IS INTENDED TO TARGET THAT INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPO SES OF THE ACT, IS NOT MEANT TO PROVIDE AN INSULATION TO SUCH ASSESSEES FR OM THE CONSEQUENCES OF REGULAR ASSESSMENTS MADE OR TO BE MADE FOR ANY PREV IOUS YEAR FALLING UNDER THE BLOCK PERIOD. THE POWERS OF REGULAR ASSESSMENT ARE KEPT INTACT AND SO ARE ALL THE APPELLATE, REVISION AND OTHER POWERS AFFECT ING SUCH REGULAR ASSESSMENT AND ALL THE STATUTORY CONSEQUENCES FLOWING FROM THE EXERCISE OF SUCH POWERS WOULD FOLLOW ALONGSIDE OF THIS SPECIAL ASSESSMENT P ROCEDURE DEVISED FOR DEALING WITH THE UNDISCLOSED INCOME AS A RESULT OF SEARCH. ONCE THE ASSESSEE DISCLOSED THOSE TRANSACTIONS IN THE BOOKS OF ACCOUN T, THOSE TRANSACTIONS ARE SUBJECT TO REGULAR ASSESSMENT AND NOT SUBJECTED TO BLOCK ASSESSMENT. THAT THE BLOCK ASSESSMENT OF UNDISCLOSED INCOME AND ITS BEIN G CHARGED TO A HIGHER RATE OF TAX PRESCRIBED, IS INDEPENDENT OF THE REGUL AR ASSESSMENTS AND IT OPERATES IN A DIFFERENT FIELD OF THE ASSESSMENT OF UNDISCLOSED INCOME WHICH IS NOT AND WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPO SES OF THE ACT. HONBLE BOMBAY HIGH COURT, IN CIT V. DR. M.K.E. MEMON [2001 ] 248 ITR 310/[2000] 112 TAXMAN 96, HAS NOTED AND SPELT OUT T HE DIFFERENCE BETWEEN THE NORMAL, REGULAR ASSESSMENT AND THE BLOCK-ASSESS MENT OF UNDISCLOSED IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 23 INCOME UNDER CHAPTER XIV-B OF THE ACT. THE COURT HE LD THAT OFTEN THE ASSESSING OFFICER DOES NOT KEEP THE ABOVE DISTINCTI ON IN MIND. THE REGULAR ASSESSMENT IS TO ENSURE THAT THE ASSESSEE HAS NOT U NDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDERPAI D THE TAX IN ANY MANNER, WHEREAS WHAT IS ASSESSED UNDER CHAPTER XIV-B IS ONL Y THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND NOT THE INCOME OR L OSS OF THE PREVIOUS YEAR, WHICH IS ONLY DONE IN THE NORMAL, REGULAR ASSESSMEN T UNDER SECTION 143(3). UNDISCLOSED INCOME, BY THIS CHAPTER, XIV-B OF THE A CT IS CLASSIFIED SEPARATELY FOR THE PURPOSES OF ASSESSMENT AND IS RE QUIRED TO BE WORKED OUT IN THE MANNER PRESCRIBED THEREIN AND TREATED TO A HIGH ER RATE OF TAX. THIS PROCESS DO NOT DISTURB THE ASSESSMENTS ALREADY MADE OF THE PREVIOUS YEARS AND IS ONLY INTENDED TO SNIFF OUT WHAT HAD REMAINED HIDDEN AND WOULD NOT HAVE BEEN DISCLOSED BY THE ASSESSEE. THERE WOULD, THEREFORE, BE NO OVERLAPPING IN THE NATURE OF THE ASSESSMENT MADE UNDER THIS CHAPTER OF UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT MADE UNDER SECTION 143(3).IN THE CASE UNDER CONSIDERATION POSITION OF SCARP SALE AS NOTED BY IN HIS ORDER AT PAGE 20 READS AS UNDER :- F.Y. SCRAP SALE AS PER BOOKS CASH SALES AS PER TH E SEIZED PAPERS 1996-97 1,70,12,798 NIL 1997-98 1,64,55,173 1,22,47,146 1998-99 2,19,09,393 57,90,000 1999-2000 1,73,18,477 31,91,451 2000-01 1,57,80,391 12,97,644 2001-02 1,10,94,604 2,90,335 2002-03 1,10,27,458 71,87,997 TOTAL 11,05,98,294 3,00,04,573 IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 24 FROM THE ABOVE TABLE WE FIND THAT THE SCARP SALES WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THIS FACT HAS ADMITTED BY THE AO HIMSELF. THE SCRAP SALES WHICH HAVE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT WE RE SUBJECT TO REGULAR ASSESSMENTS. IN THE REGULAR ASSESSMENTS ALL BOOKS O F ACCOUNT, VOUCHERS, CHALLANS WERE SUBJECT TO VERIFICATION BY THE OFFICE R. WE FIND THAT IN THE REGULAR ASSESSMENT NO ADDITIONS WERE MADE ON ACCOUN T OF SCRAP SALES. WHEN ON THE BASIS OF THOSE DOCUMENTS/MATERIAL NO ADDITIO NS WERE MADE IN REGULAR ASSESSMENTS, THEN HOW ADDITIONS CAN BE MADE IN BLOC K ASSESSMENT ON THOSE SAME MATERIAL/DOCUMENTS. FURTHER, WHEN THE AO EXAMI NED THOSE BILLS/CHALLANS DURING THE COURSE OF REGULAR ASSESSM ENTS AT THAT TIME OF REGULAR ASSESSMENT THERE WERE NO ADDITIONAL WORKING AS ON THE WORKING ON WHICH THE AO MAKE THE IN THE CASE UNDER CONSIDERATION. .IN OT HER WORDS THE WORKING ON THOSE PAPERS WERE CARRIED OUT AFTER THE REGULAR ASS ESSMENTS .A BUSINESSMEN USUALLY DOING SUCH WORKING CALCULATIONS, RATIO ANAL YSIS ETC. FOR SETTING UP FUTURE PROJECTS AND PURPOSES OF THE BUSINESS. IT IS TO BE SEEN THAT SUCH WORKING IS FOUND FOR THE AYS. 1997-98 TO 2002-03. I F WE LOOK INTO THE ISSUE FROM THE VIEW POINT OF A BUSINESSMAN, WE FIND THAT SUCH WORKING IS ONLY IN RESPECT OF SOME PROJECT OTHERWISE NO PRUDENT BUSINE SSMAN WILL GIVE THOSE WORKING OF CASH SCRAP SALE WHICH WERE MADE OUT OF B OOKS OF ACCOUNT AND KEEP SAFE IN THE CABIN OF A PERSON LIKE KABRA WHO I S NOT EVEN EMPLOYEE OF THE ASSESSEE COMPANY. THE PRESUMPTION OF REVENUE IS THA T IT IS UNACCOUNTED SCRAP SALE. THE PRESUMPTION OF THE AO IS NOT ACCEPTABLE E VEN BY THE PRINCIPLE OF HUMAN PROBABILITIES. THEREFORE, THE EXPLANATION OF THE ASSESSEE IN THIS REGARDS THAT THE NOTING MADE BY MR KABRA WERE HIS WORKING OF NO TIONAL LOSS/VALUE ADDITION SUFFERED BY THE COMPANY AS PROJ ECTED BY HIM BY NOT SETTING UP FURNACE FOR THE PURPOSE OF CONVERTING SC RAP INTO ALUMINIUM INGOTS/M.S. BARS, IS ACCEPTABLE. THE EXPLANATION OF THE ASSESSEE FURTHER SUPPORTED BY THE FACTS THAT THE AO MADE ENQUIRIES F ROM THE PURCHASING PARTIES OF THE SCRAP AND THOSE PARTIES ADMITTED THA T TRANSACTIONS OF SCRAP SALE WAS AT THE AMOUNT WHICH HAS BEEN ACCOUNTED FOR BY T HE ASSESSEE IN ITS BOOKS IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 25 OF ACCOUNT. THEY DID NOT PAY ANY AMOUNT OF ADDITIO NAL CASH AMOUNT AGAINST THOSE PURCHASES. FURTHER, THE ASSESSEE HAS ESTABLIS HED BY FURNISHING VARIOUS EVIDENCES INCLUDING RATES OF FRESH MATERIAL I.E. AL UMINIUM INGOTS OF NATIONAL ALUMINIUM COMPANY LTD. THAT THE RATES TAKEN FOR WOR KING OF PROJECT WAS THE RATES OF FRESH MATERIAL. THE ASSESSEE HAS ALSO FURN ISHED COMPARATIVE RATE OF SCRAP, WHICH WAS ALMOST THE SAME RATES ON WHICH THE ASSESSEE HAS SOLD THE SCRAP AND ACCOUNTED FOR THE SAME IN THE BOOKS OF AC COUNT. SCARP SALE AND BOOKS OF ACCOUNT ARE SUBJECT TO EXAMINATION BY THE EXCISE AUTHORITIES. THERE IS NO MATERIAL ON RECORD WHICH SHOWS ANY ADVERSE RE MARKS BY THE EXCISE AUTHORITIES IN THIS REGARDS. THE REVENUE AUTHORITI ES ADMITTED THAT SCRAP SALE WAS SUBJECT TO EXCISE.IT IS EVIDENT FROM THE FACT THAT WHILE FAMING QUESTION 14 TO MR KABRA THE REVENUE RAISED FOLLOING QUESTIO N:- Q.NO. 14. ON GOING THROUGH THE INVOICES FOR SAE OF SCRAP OF ALUMINIUM, IT IS FOUND THAT THE RATE BILLED IN THE INVOICES IS RS. 35/- PER K.G. ALONG WITH EXCISE AND SALES TAX AS APPLICABLE WHICH COMES TO EFFECTIVE RATE OF RS. 43/- PER K.G. INCLUDING EXCISE AND SALES TAX , WHEREAS AS PER THE REPLY BY YOU IN RESPONSE TO QUESTION NO. 13, IT HAS BEEN STATED THAT THE SALE RATE IS RS. 70/- PER K.G. WHY THERE IS SUC H A VAST DIFFERENCE BETWEEN THE RATE AT WHICH THE SCRAP IS SOLD AND THE RATE AT WHICH THE INVOICES ARE BEING RAISED? FURTHER, THE ASSESSEE IN SUPPORT OF THEIR EXPLANATI ON SUBMITTED COMPARATIVE RATES OF SCARPS OF DIFFERENT PARTIES VIDE LETTER DA TED 15TH FEBRUARY, 2005 WHICH IS REPRODUCED AT PAGE 17 OF ASSESSMENT ORDER. AS PER THAT DETAILS THE COMPARATIVE RATES OF SCRAP WAS RS. 35 TO 42/- PER K G AND ACCORDINGLY THE SELLING RATE OF SCARP WAS NOT FOUND ABNORMAL. 8.6 NOW COME TO THE MR KABRAS STATMENT RECORD ED AT THE TIME OF SEARCH. ACCORDING TO SECTION 132(4), DURING THE COURSE OF T HE SEARCH AND SEIZURE THE AUTHORISED OFFICE EMPOWERS TO EXAMINE ON OATH ANY P ERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, D OCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND AN Y STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFTER BE US ED IN EVIDENCE IN ANY PROCEEDING UNDER THE I.T. ACT. STATEMENT UNDER SECT ION 134(4) IS ONE OF THE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 26 IMPORTANT PIECES OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW T HAT IT IS INCORRECT. THIS PROVISION EMBEDDED IN SUB-SECTION (4) IS OBVIOUSLY BASED ON THE WELL ESTABLISHED RULE OF EVIDENCE THAT MERE CONFESSIONAL STATEMENT WITHOUT THERE BEING ANY DOCUMENTARY PROOF SHALL NOT BE USED IN EV IDENCE AGAINST THE PERSON WHO MADE SUCH STATEMENT. FIRST OF ALL WE FIND THAT MR KABRA HAS RETRACTED FROM HIS STATEMENT BY FILING AN AFFIDAVIT. THE AO E XAMINED MR. KABRA BY ISSUING SUMMONS U/S 131. THE AO CLEARLY POINTED OUT FATE OF THE UNTRUE SUBMISSION MADE AGAINST THE STATEMENT RECORDED U/S 131 IN SPITE OF THAT FACT MR. KABRA RETRACTED HIS STATEMENT AS UNDER: THIS STATEMENT BEFORE THE ASST. DIRECTOR OF INCOM E TAX (INV.) IV(2), MUMBAI WAS MADE BY ME UNDER STRESS AND PRESS URE AND THE SAME HAS BEEN RETRACTED BY ME VIDE MY AFFIDAVIT DT. 04.0 2.2003. THEREFORE NO CREDENCE, VALUE OR SIGNIFICANCE BE MADE OF MY ST ATEMENT RECORDED ON 30.01.2003 NOR THE ENTRIES RECORDED IN THE LOOSE PAPERS/PAD FOUND FROM MY CABIN. I WOULD LIKE TO STATE FURTHER THAT A T THE TIME OF ACTION ON 29.01.2003, I WAS NOT PRESENT IN THE OFFICE. MY CABIN WAS BROKEN IN MY ABSENCE BY INCOME TAX AUTHORITIES AND SOME PAPER S WERE SEIZED. I WAS INFORMED ON 30.01.2003 BY THE INCOME TAX AUTHOR ITIES THAT IF I DO NOT ATTEND AND GIVE STATEMENT, MY HOUSE COULD BE SE ARCHED U/S 132. THOUGH I WAS NOT WELL, I HAD TO COME TO GIVE STATEM ENT BEFORE INCOME TAX AUTHORITIES UNDER DURESS AND PRESSURE. I WAS IN TERROGATED BY A TEAM OF INCOME TAX OFFICIALS ON 30.01.2003 FROM 11.30 AM UPTO AROUND 6.00 PM I WAS FORCED TO GIVE A STATEMENT PERTAINING TO THE LOOSE PAPERS/ PAD FOUND FROM MY CABIN WITH REGARD TO ALLE GED SALE OF SCRAP. ON ACCOUNT OF ILL HEALTH I SUCCUMBED TO THE PRESSUR E OF SEARCH PARTY AND GAVE STATEMENT AS DESIRED BY THE SEARCH PARTY T O SATISFY THEM AND TO GET RID OF THEIR GRILLING. I GAVE STATEMENT UNDE R STRESS AND PRESSURE AND ONLY TO SAVE MY LIFE FROM HEART ATTACK DUE TO H IGH BLOOD PRESSURE AND PUT AN END TO CONTINUOUS HARASSMENT BY THE SEAR CH OFFICIALS. WHATEVER STATEMENT WAS GIVEN BY ME UNDER STRESS AND PRESSURE AND I DISOWN THE SAME. THE ROUGH WORKING RELATED TO SALE OF SCRAP WAS NOTIONAL WORK TO GIVEN VALUE ADDITION TO SCRAP AND DID NOT REPRESENT ANY ACTUAL TRANSACTION. 8.7 IN RESPECT OF RETRACTION FROM THE STATEMENT RECORDED DURING THE COURSE OF SEARCH WE WOULD LIKE TO REFER A JUDGMENT OF GUJA RAT HIGH COURT IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI V.CIT- (GUJ) 220 C TR ITR138 (GUJ).THE IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 27 COURT OBSERVED THAT THE GLARING FACT REQUIRED TO BE NOTED IS THAT THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 132(4) O F THE ACT AT MID NIGHT. IN NORMAL CIRCUMSTANCES, IT IS TOO MUCH TO GIVE ANY CR EDIT TO THE STATEMENT RECORDED AT SUCH ODD HOURS. THE PERSON MAY NOT BE I N A POSITION TO MAKE ANY CORRECT OR CONSCIOUS DISCLOSURE IN A STATEMENT IF S UCH STATEMENT IS RECORDED AT SUCH ODD HOURS. MOREOVER, THIS STATEMENT WAS RETRAC TED AFTER TWO MONTHS. THE MAIN GRIEVANCE OF THE ASSESSING OFFICER WAS THAT TH E STATEMENT WAS NOT RETRACTED IMMEDIATELY AND IT WAS DONE AFTER TWO MON THS. IT WAS AN AFTERTHOUGHT AND MADE UNDER LEGAL ADVICE. HOWEVER, IF SUCH RETRACTION IS TO BE VIEWED IN LIGHT OF THE EVIDENCE FURNISHED ALONG WITH THE AFFIDAVIT, IT WOULD IMMEDIATELY BE CLEAR THAT THE ASSESSEE HAS GIVEN PR OPER EXPLANATION FOR ALL THE ITEMS UNDER WHICH DISCLOSURE WAS SOUGHT TO BE O BTAINED FROM THE ASSESSEE. HENCE THERE IS NO JUSTIFICATION FOR MAKIN G ADDITION MERELY ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132 (4).S IMILAR IS THE POSITION IN THE CASE UNDER CONSIDERATION THEREFORE THE ADDITION CANNOT BE SUSTAINED MERELY ON THE BASIS OF THE STAMEN OF THE MR. KABRA. FURTHE, EVEN FOR THE SAKE OF ARGUMENT IF WE ACCEPT THE ACCEPT THE REVE NUES CONTENTION THAT MR KABRA HAS ACCEPTED IN HIS STATEMENT RECORDED AT THE TIME OF SEARCH THAT THERE WERE SCARP SALES AND THAT STATEMENT IS BINDING, TH EN WHOLE STATEMENT OF MR KABRA RECORDED AT THE TIME OF SEARCH IS REQUIRED T O BE CONSIDERED. IT IS NOT FAIR THAT ONE OF THE PARTS OF THE STATEMENT OF MR . KABRA IS ACCEPTED AS CORRECT THAT THOSE PAPERS WERE RELATED TO SCRAP SAL E, THEN IN THE SAME STATEMENT HE STATED THAT WHATEVER THE CASH RECEIVED HAS BEEN UTILIZED OR APPLIED FOR INCURRING EXPENDITURE. THE NET INCOME / RESULTS ARE NIL. WHEN THERE IS NO UNDISCLOSED INCOME THE ASSESSMENT CANNO T BE MADE UNDER THE BLOCK ASSESSMENT. 8.8 IN THE LIGHT OF ABOVE DISCUSSIONS WE FIND THAT THE MATERIAL FOUND DURING THE COURSE OF SEARCH BASIS ON WHICH IT CAN BE HELD THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS, OR ANY IT(SS) NO. 166/M/06 M/S ORIENTAL CONTAINERS LTD. BLOCK ASSESSMENT PERIOD AY 1997-98 TO 2002-2003 (BROKEN PERIOD 1.4.2002 TO 29.1.2003) 28 EXPENSE, DEDUCTION OR ALLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE OR WHERE SUCH MONEY, BULLION, JEWELLERY, VALU ABLE ARTICLE, THING, ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSA CTION REPRESENTS INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BE EN DISCLOSED FOR THE PURPOSES OF THIS ACT. SINCE NO UNDISCLOSED INCOME W AS FOUND THEREFORE AMOUNT TAKEN BY THE AO AS UNDISCLOSED ON THIS ACCOU NT IN THE BLOCK ASSESSMENT IS DELETED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 16 TH JULY, 2010 SD/- SD/- (V. DURGA RAO, ) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 16 TH JULY, 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, D BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV