SHRI PREM CHAWLA, Bhopal V. THE ACIT 1(2), Bhopal

ITSSA 172/IND/2015

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1438 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-06-2020
• Assessment Year: 2002-2003
• Appeal Filed On: 09-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: N D PATWA A RS
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Business income; Income from undisclosed sources; Search and seizure; Salary income; Loose papers; Initiation of penalty proceedings; Fair market value; Wrong claim; Corroborative evidences; Tax effect; Set aside; Capital Gains
• Section: 143(3); 133A; 153A; 234B; 274; 143(2); 192; 64; 44AB; 113; 43; 48; 2(A); 73; 72; 13; 119; 22; 153C; 132; 139; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NOS. 158 TO 163/IND/2015 ASSESSMENT YEARS 2000-01 TO 2005-06 & ITA NO.441/IND/2015 ASSESSMENT YEAR-2006-07 ITA NO.405/IND/2015 ASSESSMENT YEAR-2006-07 IT(SS)A NOS. 170 TO 175/IND/2015 ASSESSMENT YEARS 2000-01 TO 2005-06 & ITA NO.443/IND/2015 ASSESSMENT YEAR-2006-07 LATE SMT. SUDESHCHAWLA L/H SHRIPREMCHAWLA BHOPAL VS. ACIT 1(2), BHOPAL (APPELLANT) (REVENUE ) PAN AAP PC 0132J DCIT 1(1), BHOPAL VS. LATE SMT . SUDESHCHAWLA L/H SHRIPREMCHAWLA BHOPAL (REVENUE ) (RESPONDENT) PAN AAPPC0132J IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 2 IT(SS)A NOS. 164 TO 169/IND/2015 ASSESSMENT YEARS 2000-01 TO 2005-06 & ITA NO.442/IND/2015 ASSESSMENT YEAR-2006-07 APPELLANT BY SHRI ASHISH GOYAL & N.D. PAT W A, ARS RESPONDENT BY SMT. ASHIMA GUPTA, CIT - DR DATE OF HEARING: 21 . 0 9 .20 20 DATE OF PRONOUNCEMENT: 26 . 11 .2020 / O R D E R PER BENCH: IN THE ABOVE CAPTIONED APPEALS, 21 APPEALS ARE AT THE INSTANCE OF RESPECTIVE ASSESSEE(S) AND ARE DIRECTED AGAINST THE RESPECTIVE ORDERSOF LD. COMMISSIONER OF INCOME TAX( APPEALS), (IN SHORT CIT(A)), BHOPALAND LD. ACIT 1(2), BHOPAL AS UNDER :- SHRIPREMCHAWLA BHOPAL VS. ACIT 1(2), BHOPAL (APPELLANT) (REVENUE ) PAN: AAOPC3494N SMT. SARITA CHAWLA BHOPAL VS. ACIT 1(2), BHOPAL (APPELLANT) (REVENUE ) PAN ADGPC8831N IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 3 NAME OF ASSESSEE ASSESSMENT YEAR DATE OF ORDER OF CIT(A)_1 DATE OF ORDER OF ACIT-1(2) SECTION UNDER WHICH PASSED LATE SMT. SUDESH CHAWLA 200 0 - 01 TO 2005-06 AND 2006-07 3 0 .03.2015 19.03.2013 153C R.W.S. 143(3) 143(3) PREM CHAWLA 200 0 - 01 TO 2005-06 AND 2006-07 30.03.2015 19.03.2013 153C R.W.S. 143(3) 143(3) SMT. SARITA CHAWLA 200 0 - 01 TO 2005-06 AND 2006-07 31.03.2015 19.03.2013 153C R.W.S. 143(3) 143(3) REVENUES APPEAL NO.ITA/405/IND/2015 IN THE CASE OF LATE SMT. SUDHA CHAWLA FOR ASSESSMENT YEAR 2006-07 IS DI RECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), (IN SHORT CIT(A)), BHOPAL ORDER DATED 30.03.2015. 2. AS THE ISSUE RAISED IN ALL THESE APPEALS ARE SIMIL AR, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. (I) THE ASSESSEE LATE SMT. SUDESH CHAWLA (THROUGH L EGAL HEIR SHRI PREM CHAWLA) RAISED FOLLOWING GROUNDS OF APPEAL:- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 4 ASSESSMENT YEAR 2000-01, IT(SS)A NO.158/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,65,192/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.46,51,915/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.16,258/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,16,580/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.11,519/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.1,15,193/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2001-02, IT(SS)A NO.159/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 5 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,86,530/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.358,65,299/- WITHOUT CONSIDERING TH E FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.34,770/- BEI NG 1/10 TH OF THE TOTAL FREIGHT&CARTAGE OF RS.3,47,702/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.16,258/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,16,580/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.16,258/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.1,16,580/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,40,000/- B EING UNEXPLAINED CASH PAYMENT MADE WITHOUT ACCEPTING THE EXPLANATION OFFE RED BY THE ASSESSEE AND WITHOUT CONSIDERING THE FACTS PROPERLY. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,01,000/- MADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 10. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE , TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE O F HEARING. ASSESSMENT YEAR 2002-03, IT(SS)A NO.160/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 6 THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,72,566/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.77,25,658/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.77,721/- BE ING 1/10 TH OF THE TOTAL FREIGHT&CARTAGE OF RS.7,77,209/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.18,025/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,80,250/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.34,814/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.3,48,140/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2003-04, IT(SS)A NO.161/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.9,62,410/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.96,24,102/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 7 DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.52,590/- BEI NG 1/10 TH OF THE TOTAL FREIGHT & CARTAGE OF RS.5,25,895/- WITHOUT CONSIDER ING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.22,067/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.2,20,670/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.33,836/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.3,38,362/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,50,000/- M ADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2004-05, IT(SS)A NO.162/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.25,46,873/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.2,54,68,732/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 8 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,12,127/- B EING 1/10 TH OF THE TOTAL FREIGHT & CARTAGE OF RS.11,21,273/- WITHOUT CONSIDE RING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.28,818/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.2,88,176/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,29,087/- B EING 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.12,90,872/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.14,50,843/- MADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING PART RELIED OF RS.2,50,000/- ONLY O UT OF TOTAL ADDITION OF RS.12,16,941/- ON ACCOUNT OF ADDITION IN CAPITAL AC COUNT WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLAN T AND WITHOUT CONSIDERING THE FACTS PROPERLY 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 10. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE , TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE O F HEARING. ASSESSMENT YEAR 2005-06, IT(SS)A NO.163/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 9 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.36,22,085/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.3,62,20,852/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.99,447/- BEI NG 1/10 TH OF THE TOTAL FREIGHT & CARTAGE OF RS.9,94,465/- WITHOUT CONSIDER ING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.21,644/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.2,16,443/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.73,865/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.7,38,646/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.16,50,000/- MADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2006-07, ITA NO.441/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 10 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.38,69,619/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.3,86,96,192/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,35,825/- B EING 1/10 TH OF THE TOTAL FREIGHT & CARTAGE OF RS.13,58,248/- WITHOUT CONSIDE RING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.42,518/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.4,25,176/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,23,260/- B EING 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.22,32,600/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.14,00,000/- MADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING PART RELIED OF RS.38,86,483/- BY GI VING RELIEF OF RS.90,68,460/- ONLY OUT OF TOTAL ADDITION OF RS.1,2 9,54,943/- ON ACCOUNT OF SUPPRESSED SALES WITHOUT CONSIDERING THE EXPLANATIO N OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.24,39,857/- ON ACCOUNT OF DIFFERENCE IN STOCK AS PER THE COMMERCIAL TAX DEPARTMENT AND A S PER THE BOOKS OF ACCOUNT WITHOUT ACCEPTING THE EXPLANATION OFFERED B Y THE ASSESSEE THAT THE STOCK OF THE ASSESSEE IS DULY TALLIED WITH THE EXCI SE RECORDS AND THERE IS NO DIFFERENCE AS SUCH. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,85,709/- O N THE BASIS OF LOOSE PAPERS ON WHICH CERTAIN EXPENSES ARE MENTIONED WITH OUT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE THAT ALL THE EX PENSES MENTIONED ON THESE LOOSE PAPERS ARE DULY RECORDED IN THE BOOKS O F ACCOUNT FOR WHICH NECESSARY INFORMATION WAS SUBMITTED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 11 10. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 11. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 12. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE , TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE O F HEARING. ( II) REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN THE CASE OF LATE SMT. SUDESH CHAWLA (THROUGH LEGAL HEIR SHRI PREM CHAWLA); ASSESSMENT YEAR 2006-07, ITA NO.405/IND/2015 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) HAS ERRED IN: 1.RESTRICTING THE DISALLOWANCE OF PURCHASE AND WAGE S AND SALARY TO 10% OF TOTAL EXPENSES AS AGAINST THE DISALLOWANCE OF 40 % OF PURCHASE AND FREIGHT-CARTAGE EXPENSES AND DISALLOWANCE OF 33.33% OF WAGES AND SALARY EXPENSES MADE BY THE A.O 2.DELETING THE ADDITION OF RS.15,32,527/- MADE BY T HE AO ON ACCOUNT OF EXPLAINED CAPITAL. 3.DELETING THE ADDITION OF RS.90,68,460/- MADE BY T HE AO ON ACCOUNT OF SUPPRESSED SALES. 4.THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE, THE APPEAL IS FINALLY HEARD FOR DISPOSAL. (III) ASSESSEE SHRI PREM CHAWLA HAS RAISED FOLLOWING GROUNDS OF APPEAL :- ASSESSMENT YEAR 2000-01, IT(SS)A NO.170/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 12 THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,61,730/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.36,17,299/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.13,835/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,38,352/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.14,627/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,46,273/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.8,74,400/- M ADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2001-02, IT(SS)A NO.171/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,95,333/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.49,53,330/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 13 DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.19,700/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,97,000/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.19,280/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.1,92,795/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,00,000/- M ADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2002-03, IT(SS)A NO.172/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,71,606/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.67,16,065/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.126,325/- BE ING 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.2,63,250/- WITHOUT CONSIDERIN G THE FACT THAT THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 14 ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2003-04, IT(SS)A NO.173/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,98,148/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.1,09,81,477/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.133,240/- BE ING 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.3,32,400/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.43,031/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.4,30,310/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING RELIEF OF RS.4,75,000/-ONLY OUT OF TOTAL ADDITION OF RS.6,52,100/- AND THEREBY CONFIRMING THE ADDITION O F RS.1,77,100/- WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 15 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2004-05, IT(SS)A NO.174/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.12,99,114/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.1,29,91,144/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.21,478/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.2,14,778/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.64,076/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.6,40,755/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING RELIEF OF RS.16,40,000/- ONLY OUT OF TOTAL ADDITION OF RS.18,52,520/- AND THEREBY CONFIRMING THE ADDITION OF RS.2,12,520/- WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERLY. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,29,200/- B EING AGRICULTURE INCOME TREATED AS INCOME FROM OTHER SOURCES WITHOUT CONSID ERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING TH E FACTS PROPERLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 16 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2005-06, IT(SS)A NO.175/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.25,28,512/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.2,52,85,121/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.52,233/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.5,22,330/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.96,442/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.9,64,416/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,95,000/- M ADE ON ACCOUNT OF SECURITY DEPOSITS WITHOUT CONSIDERING THE EXPLANATI ON OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING RELIEF OF RS.3,01,000/- ONLY OUT O F TOTAL ADDITION OF RS.4,00,000/- AND THEREBY CONFIRMING THE ADDITION O F RS.99,000/- ON ACCOUNT OF PURCHASE OF PROPERTY. THE LD. CIT(A) FUR THER ERRED IN ENHANCING THE ADDITION BY RS.3,38,810/- ON ACCOUNT OF REGISTR ATION EXPENSES INCURRED IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 17 ON PURCHASE OF PROPERTY WITHOUT CONSIDERING THE EX PLANATION OFFERED BY THE APPELLANT. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING RELIEF OF RS.5,33,000/- ONLY OUT O F TOTAL ADDITION OF RS.7,45,520/- AND THEREBY CONFIRMING THE ADDITION O F RS.2,12,520/- WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERLY 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 10. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE , TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE O F HEARING. ASSESSMENT YEAR 2006-07, ITA NO.443/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.25,42,596/- BEING 1/10 TH OF THE TOTAL PURCHASES OF RS.2,54,25,960/- WITHOUT CONSIDERING T HE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING AND PARTICULAR ITEM OF DISALLOWA BLE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.30,223/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.3,02,226/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,240,388/- BEING 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.24,03,875/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,80,000/- M ADE ON ACCOUNT OF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 18 UNSECURED LOAN WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACTS PROPERL Y. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN GIVING RELIED OF RS.1,00,000/- ONLY OUT OF TOTAL ADDITION OF RS.2,00,000/- ON ACCOUNT OF SUPPRESSED SALES WITHOU T CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CO NSIDERING THE FACTS PROPERLY 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,34,500/- O N ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT THAT BELONGS TO SMT. SARITACHAWLA WIF E OF THE APPELLANT AND FOUND IN HER LOCKER ONLY AND NECESSARY EXPLANATION IN THIS REGARD WAS GIVEN BY HER. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 10. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE , TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE O F HEARING. (IV) ASSESSEE SMT. SARITA CHAWLA HAS RAISED FOLLOWI NG GROUNDS OF APPEAL:- ASSESSMENT YEAR 2000-01, IT(SS)A NO.164/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.34,800/- ON ACCOUN T OF INCOME FROM COMPUTER PROGRAMMING WITHOUT CONSIDERING THE FACT T HAT THE SAID ADDITION WAS MADE ARBITRARILY WITHOUT ANY CONCRETE BASIS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.82,350/- BEING BAL ANCE OF OPENING CAPITAL WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 19 CONSIDERING THE FACT THAT THE ADVANCES WERE GIVEN O UT OF CURRENT YEARS INCOME ONLY. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2001-02, IT(SS)A NO.165/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.36,600/- ON ACCOUN T OF INCOME FROM COMPUTER PROGRAMMING WITHOUT CONSIDERING THE FACT T HAT THE SAID ADDITION WAS MADE ARBITRARILY WITHOUT ANY CONCRETE BASIS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2002-03, IT(SS)A NO.166/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 20 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.44,300/- ON ACCOUN T OF INCOME FROM COMPUTER PROGRAMMING WITHOUT CONSIDERING THE FACT T HAT THE SAID ADDITION WAS MADE ARBITRARILY WITHOUT ANY CONCRETE BASIS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2003-04, IT(SS)A NO.167/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.34,650/- ON ACCOUN T OF INCOME FROM COMPUTER PROGRAMMING WITHOUT CONSIDERING THE FACT T HAT THE SAID ADDITION WAS MADE ARBITRARILY WITHOUT ANY CONCRETE BASIS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.1,99,900/- BEING U NEXPLAINED INVESTMENT IN THE FIRM M/S ATULSOLVOCHEMWITHOUT CONSIDERING TH E EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING THE FACT T HAT THE SAID TRANSACTION IS DULY REFLECTED IN THE BOOKS OF ACCOUNT. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2004-05, IT(SS)A NO.168/IND/2015 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 21 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN GIVING RELIED OF RS.2,000/- ONLY OUT OF TOTAL AD DITION OF RS.50,640/- ON ACCOUNT OF INCOME FROM RETAIL TRADE WITHOUT CONSIDE RING THE EXPLANATION OFFERED BY THE APPELLANT AND WITHOUT CONSIDERING TH E FACT THAT THE SAID ADDITION WAS MADE ARBITRARILY WITHOUT ANY BASIS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.1,87,500/- BEING U NEXPLAINED LOAN AND SUNDRY CREDITORS ARBITRARILY WITHOUT CONSIDERING TH E EXPLANATION OFFERED BY THE ASSESSEE THAT THE SAID LOAN IS TAKEN IN THE PER SONAL CAPACITY ANDSUNDRY CREDITORS ARE FOR EXPENSES AND PURCHASE O F MATERIAL. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ACIT ERRED IN CONFIRMING THE ADDITION OF RS.1,51,775/- BY TREA TING THE AGRICULTURE INCOME AS INCOME FROM UNDISCLOSED SOURCES WITHOUT A CCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE ASSESS EE HAS TAKEN AGRICULTURE LAND ON LEASE AND ON THE SAME AGRICULTU RE ACTIVITIES WERE DONE AND NECESSARY DETAILS REGARDING LEASE AGREEMENT, DE TAILS OF AGRICULTURE PRODUCE SALE RECEIPTS WERE SUBMITTED DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2005-06, IT(SS)A NO.169/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 22 THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. ACIT ERRED IN CONFIRMING THE ADDITION OF RS.92,426/- ON ACCOUNT OF INCOME FROM COMPUTER PROGRAMMING STATING THAT THIS GROUND WAS N OT RAISED IN FIRST APPEAL WITHOUT GIVING SPECIFIC FINDING IN THE MERIT OF ADDITION. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. ACIT ERRED IN CONFIRMING THE ADDITION OF RS.8,73,364/- O N ACCOUNT OF CAPITAL ACCOUNT WITHOUT ACCEPTING THE EXPLANATION OF THE AS SESSEE THAT THE ADDITION IN THE CAPITAL ACCOUNT IS MADE OUT OF THE TRANSFER FROM PERSONAL ACCOUNT AND LOAN TAKEN FROM RELATIVES FOR WHICH NEC ESSARY INFORMATION WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCE EDINGS. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,90,619/- B EING 1/10 TH OF THE TOTAL PURCHASES OF RS.59,06,192/- WITHOUT CONSIDERING TH E FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.43,608/- BEI NG 1/10 TH OF THE TOTAL SALARY& WAGES OF RS.36,080/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.13,048/- BEI NG 1/10 TH OF THE TOTAL SALARY & WAGES OF RS.22,32,600/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. ASSESSMENT YEAR 2006-07, ITA NO.442/IND/2015 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROUNDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT F OLLOWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WIT HOUT CONSIDERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTA INED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUMENTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BL E I.T.A.T. HAS SET ASIDE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 23 THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFOR ESAID DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. ACIT ERRED IN CONFIRMING THE ADDITION OF RS.12,14,092/- BEING 1/10 TH OF THE TOTAL PURCHASE OF RS.1,21,40,919/- WITHOUT CONSIDERING TH E FACT THAQT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING ANYPARTICULAR ITEM OF DISALLOWAB LE NATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. ACIT ERRED IN CONFIRMING THE ADDITION OF RS.5,094/- BEIN G 1/10 TH OF THE TOTAL PURCHASES OF RS.50,936/- WITHOUT CONSIDERING THE F ACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT ANY CONC RETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.95,352/- BE ING 1/10 TH OF THE TOTAL SALARY EXPENSES OF RS.9,53,523/- WITHOUT CONSIDERIN G THE FACT THAT THE ENTIRE DISALLOWANCE WAS MADE ARBITRARILY, WITHOUT A NY CONCRETE BASIS AND WITHOUT SPECIFYING ANY PARTICULAR ITEM OF DISALLOWA NCE NATURE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 23 4A, U/S 234B AND U/S 234C. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATION OF PENALTY PROCE EDINGS U/S 271(1)(C). 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO URGE, TO ALTER OR TO AMEND ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HE ARING. 4. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE REC ORDS ARE THAT SEARCH U/S 132 OF THE ACT WERE CONDUCTED AT THE RES IDENCE OF THE ASSESSEE(S) ON 21.12.2005 AT BHOPAL. SIMULTANEOUSLY SURVEY OPERATIONS U/S 133A OF THE ACT WERE ALSO CARRIED OU T ON THE VERY SAME DAY AT VARIOUS BUSINESS CONCERNS OF THE GROUP. IN THE INSTANT APPEAL 3 ASSESSEE(S) ARE RUNNING FOLLOWING BUSINESS CONCERNS :- (I) LATE SMT. SUDESH CHAWLA IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 24 (THROUGH L/H SHRI PREM CHAWLA) PARTNERS OF M/S ATUL SOLVO CHEMICAL & PROP. M/S ANAND ORGANICS (II) SHRI PREM CHAWLA PARTNER OF M/S ATUL SOLVO CHEMICAL, PROP.M/S ANAND PAINTS &ANAND INDUSTRIES (III) SMT. SARITA CHAWLA PARTNEROF SARITA CONSULTANCY& PROP. ANAND COATINGS 5. IN THE INSTANT APPEALS WE ARE DEALING WITH THE 3 I NDIVIDUALS NAMED HEREIN ABOVE, THEREFORE THE PARTNERSHIP FIRM M/S. ATUL SOLVO CHEMICAL IS NOT UNDER CONSIDERATION. DURING THE CO URSE OF SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE ACT AND DURIN G THE SURVEY ACTIONS U/S 132(A) OF THE ACT CERTAIN DOCUMENTS WER E FOUND AND SEIZED. IN THE STATEMENT GIVEN ON 5.1.2006 U/S 132 (4) OF THE ACT SHRI PREM CHAWLA SURRENDERED RS.9,50,000/- ON BEHAL F OF HIS MOTHER LATE SMT. SUDESH CHAWLA, RS.12,00,000/- WAS SURRENDERED IN THE NAME OF SHRI PREM CHAWLA AND RS.3,50,000/- W AS SURRENDERED IN THE HANDS OF WIFE SMT. SARITA CHAWLA . CONSEQUENT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 25 TO SEARCH OPERATIONS ASSESSEE(S) FURNISHED RETURNS U/S 153A OF THE ACT. ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE A CT AFTER MAKING ADDITIONS. ASSESSEE(S) APPEAL BEFORE LD. CIT(A) WA S PARTLY ALLOWED. MATTER THEREAFTER REACHED BEFORE THIS TRIBUNAL. VI DE ORDER DATED 31.03.2011 ORDERS OF LD. CIT(A) WERE SET ASIDE AND THE MATTER OF THE ASSESSMENT ORDERS IN QUESTION BEFORE US WERE RESTOR ED TO THE FILE OF LD. A.O FOR MAKING ASSESSMENTS AFRESH AFTER EXAMINI NG THE DOCUMENTS WHICH WERE SUBMITTED FOR THE FIRST TIME B EFORE LD. CIT(A) AND THE LD. A.O WAS NOT GIVEN ANY OPPORTUNITY TO VE RIFY THE SAME. IN VIEW OF THE DIRECTIONS OF THIS TRIBUNAL FRESH NO TICES WERE ISSUED AND THE ASSESSMENTS WERE REFRAMED AGAIN AFTER MAKIN G VARIOUS ADDITIONS. AGAINST THE SAME APPEALS WERE FILED BEF ORE LD. CIT(A) AND THE ASSESSEE(S) ARE PARTLY SUCCEEDED. BOTH THE ASSESSEE AND REVENUE FILED APPEALS BEFORE THE TRIBUNAL, HOWEVER SOME OF THE APPEALS WERE DISMISSED DUE TO LOW TAX EFFECT ON ACC OUNT OF CBDT CIRCULAR NO. 17 OF 2019 DATED 8 TH AUGUST, 2019. NOW ALL THE 3 ASSESSEE(S) ARE IN APPEAL BEFORE THE TRIBUNAL AND R EVENUE IS IN APPEAL ONLY FOR ASSESSMENT YEAR 2006-07 IN THE CASE OF LATE SMT. SUDESH CHAWLA. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 26 6. WE WILL FIRST TAKE UP COMMON ISSUES AND THEREAFTER WE WILL DEAL WITH REMAINING GROUNDS OF EACH ASSESSEE(S) SEP ARATELY. 7. WE WILL FIRST TAKE UP GROUND NO.1 COMMONLY RAISED IN ALL THE APPEALS OF THE ASSESSEE(S) AND THE SAME READS AS BE LOW :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN NOT GIVING THE CLEAR FINDING REGARDING THE GROU NDS TAKEN THAT THE SET ASIDE ASSESSMENT WAS MADE ARBITRARILY WITHOUT FOLL OWING THE DIRECTIONS OF THE HON'BLE I.T.A.T. PROPERLY AND WITHOUT CONSID ERING THE FACT THAT REGULAR AND PROPER BOOKS OF ACCOUNT ARE MAINTAINED AND THE HON'BLE CIT(A) HAS ALLOWED THE APPEAL AFTER CONSIDERING THE DOCUME NTS SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS AND THE HON'BLE I.T.A .T. HAS SET ASIDE THE ASSESSMENT ONLY FOR THE REASON THE ALL THE AFORESAI D DOCUMENTS WERE SUBMITTED FOR THE FIRST TIME AT THE APPELLANT STAGE ONLY. 8. PRIME FACIE THIS GROUND IS GENERAL IN NATURE AND SINCE NO SUBMISSIONS HAVE BEEN MADE BEFORE US WITH REGARD TO THIS GROUND, WE CONSIDER THE SAME TO BE GROUND NOT PRESSED. E VEN OTHERWISE WE HAVE PERUSED THE IMPUGNED ORDERS OF LD. CIT(A) A ND FIND THAT THE ISSUE RAISED BY THE ASSESSEE HAS BEEN DULY ADDR ESSED IN THE APPELLATE ORDER IN PARA 5.4 OF THE IMPUGNED ORDER D ATED 30.3.2015 ISSUED IN THE CASE OF LATE SMT. SUDESH CHAWLA AND S IMILAR IS THE CASE OF OTHER TWO ASSESSEE(S). THEREFORE THIS COMMO N GROUND NO.1 IN ALL THE APPEALS OF THE 3 ASSESSEE(S) ARE DISMISS ED AS NOT PRESSED. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 27 9. NOW WE TAKE UP THE COMMON ISSUE RELATING TO DISALL OWANCE OF PURCHASES AND DISALLOWANCE OF OTHER DIRECT AND INDI RECT EXPENSES WHICH HAVE BEEN RAISED BY THE FOLLOWING ASSESSEE(S) (I) LATE SMT. SUDESH CHAWLA ASSESSMENT YEAR 2000-01 GROUND NO. 2,3 & 4 ASSESSMENT YEARS 2001-02 TO 2006-07 GROUND NO. 2,3,4&5 (II) REVENUES APPEAL IN THE CASE OF LATE SMT. SUDESH CHAWLA ASSESSMENT YEAR 2006-07 GROUND NO.1 (III) PREM CHAWLA ASSESSMENT YEAR 2000-01 TO 2001-02 GROUND NO.2,3 & 4 ASSESSMENT YEAR 2002-03 GROUND NO. 2 & 3 ASSESSMENT YEAR 2003-04 GROUND NO.2,3&4 TO ASSESSMENT YEAR 2006-07 (IV) SMT. SARITAC HAWLA ASSESSMENT YEAR 2005-06 GROUND NO. 4,5&6 ASSESSMENT YEAR 2006-07 GROUNDNO.2,3&4 10. ON PERUSAL OF THE ABOVE GROUNDS WE FIND THAT LD. A .O HAS TAKEN A COMMON COURSE OF ACTION OF DISALLOWANCE OF PURCHASES DISALLOWANCE OF SOME DIRECT AND INDIRECT EXPENSES. THEREFORE FOR ADJUDICATION PURPOSE WE WILL TAKE UP THE FACTS OF LATE SMT. SUDESH IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 28 CHAWLA AND SHALL APPLY THE DECISIONS ACCORDINGLY ON THE REMAINING TWO ASSESSEE(S) ALSO WITH REGARD TO THESE GROUNDS. 11. BRIEF FACTS RELATING TO THIS GROUNDS ARE THAT DURI NG THE SURVEY PROCEEDINGS VARIOUS DOCUMENTS WERE IMPOUNDED AND SO ME WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. IN THE STATEMENT OF SHRI PREM CHAWLA ADMITTED THAT DUE TO LACK OF INFORMATIO N ABOUT THE PROPER HEAD SOME OF THE CASH VOUCHERS REMAINED TO B E RECORDED. DURING THE ASSESSMENT PROCEEDINGS IT WAS CLAIMED TH AT BOOKS OF ACCOUNTS KEPT IN COMPUTER WERE LOST. MOST OF THE ST AFF AND LABOUR WERE WORKING FOR ALL THE CONCERNS AND THERE WERE IN TER MIXING OF TRANSACTIONS. MOST OF THE EXPENSES FREIGHT, CARTAG E CHARGES, SALARY WERE PAID IN CASH. LD. A.O COULD NOT VERIFY THE PU RCHASES. THOUGH THE ASSESSEE CONTENDED THAT BOOKS OF ACCOUNTS WERE REGULARLY MAINTAINED AND AUDITED AND DUE TO REASONS BEYOND HI S CONTROL COMPUTER BOOKS COULD NOT RETRIEVED. THEREAFTER THE LD.A.O THOUGH HAS NOT DISPUTED THE QUANTUM OF SALES IN ANY OF THE ASSESSEE(S) EXCEPT FOR SUPPRESSED SALE ISSUE FOR ASSESSMENT YEA R 2006-07 IN CASE OF LATE SMT. SUDESH CHAWLA HAS NOT MADE ANY SP ECIFIC OBSERVATION ABOUT THE SALES FIGURED AND THUS ACCEPT ED THE SAME. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 29 LD. A.O COMPLETED THE ASSESSMENTS MAKING DISALLOWAN CE AROUND 33.33% OF THE PURCHASES AND SOME OF THE EXPENSES. WHEN THE MATTER CAME BEFORE LD. CIT(A) HE SUSTAINED THE DISA LLOWANCES TO 10%. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL AGAINST THE ADDITIONS CONFIRMED BY LD.CIT(A) AND REVENUE IS IN APPEAL FOR A. Y. 2006-07 AGAINST THE ADDITIONS DELETED BY LD.CIT(A). 12. LD. COUNSEL FOR THE ASSESSEE MADE DETAILED ARGUMEN TS REFERRING TO THE FOLLOWING WRITTEN SUBMISSIONS CONT ENDING THAT ABNORMAL HIGH PERCENTAGE OF DISALLOWANCE HAS BEEN M ADE AND EVEN WHEN THE BOOKS OF ACCOUNTS WERE AUDITED AND REGULAR RETURNS WERE FILED SUCH ABNORMAL DISALLOWANCE OF PURCHASES AND E XPENSES ARE UNCALLED FOR. WRITTEN SUBMISSIONS IN RESPECT OF LA TE SMT. SUDESH CHAWLA WITH REFERENCE TO THE CLAIM OF DISALLOWANCE OF PURCHASES AND SOME OF THE DIRECT AND INDIRECT EXPENSES ARE RE PRODUCED BELOW:- GROUND ON DISALLOWANCE OF PURCHASE, WAGES & SALARY AND SALARY EXPENSES. GROUND NO. 2(A) UNEXPLAINED PURCHASE (RS.4,65,192/- ) AO. PB 4 CIT{A) PB 54{FINDINGS PB 70) ITAT PB 113 SET-ASIDE AO PG. 2 PARA 5 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 30 CIT{A) PG. 15-20 PARA 5.4 A.Y PURCHASES PURCHASES DISALLOWED TOTAL DISALLOWED DEPTT . ASSESSEE 2000 - 01 46,51,915 13,95,575 4,65,192 18,60,766 2001 - 02 58,65,299 17,59,589 5,86,530 23,46,199 2002 - 03 77,25,658 23,17,697 7,72,566 30,90,263 2003 - 04 96,24,102 28,87,230 9,62,410 38.49,640 2004 - 05 2,54,68,732 76,40,619 25,46,873 1,01,87,492 2005 - 06 3,62,20,852 78,66,255 36,22,085 1,14,88,340 2006 - 07 3,86,96,192 1,16,08,857 38,69,619 1,54,78,476 GROUND NO. 3 (A) UNEXPLAINED WAGES (11,519/-) AO. PB 5 CIT{A) PB 74 ITAT PB 113 SET-ASIDE AO PG. 3 PARA 6 CIT{A) PG. 15-20 PARA 5.4 A.Y WAGE S WAGES DISALLOWED TOTAL DISALLOWED ASSESSEE DEPARTMENT 2000 - 01 1,15,193 11,519 26,878 38,397 2001 - 02 1,62,580 16,258 37,935 54,193 2002 - 03 1,80,250 18,025 42,058 60,083 2003 - 04 2,20,670 22,067 51,489 73,556 2004 - 05 2,88,176 28,818 79,240 98,058 2005 - 06 2,16,443 21,644 50,503 72,147 2006 - 07 4,25,146 42,518 99,197 1,41,715 GROUND NO 4 OF ASSESSEE UNEXPLAINED SALARY (A.Y. 20 00-01) AO. PB 5 CIT(A) PB 75 ITAT PB 113 SET-ASIDE AO PG. 3 PARA 7 CIT(A) PG. 15-20 PARA 5.4 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 31 A.Y SALARY SALARY DISALLOW ED TOTAL DISALLOWED ASSESSEE DEPARTMENT 2000 - 01 1,03,110 10,311 24,059 34,370 2001 - 02 3,16,043 31,604 73,743 1,05,347 2002 - 03 3,48,140 34,814 81,232 1,16,046 2003 - 04 3,68,362 33,836 78,951 1,22,787 2004 - 05 12,90,872 1,29,087 3,01,203 4,30,290 200 5 - 06 7,38,646 73,865 1,72,350 2,46,215 2006 - 07 22,32,600 2,23,260 5,20,940 7,44,200 FACTS THE ADDITION OF UNEXPLAINED PURCHASES, FREIGHT & CA RTAGE, WAGES AND SALARY DEBITED IN TRADING ACCOUNT AND UNEXPLAINED S ALARY DEBITED IN PROFIT & LOSS ACCOUNT BY ID AO ARE ON THE BASIS OF FOLLOWING : - 1. MOST OF THE EXPENSES WERE MADE IN CASH. 2. WITH REGARD TO FREIGHT AND CARTAGE - PROPER BILLS A ND VOUCHERS WERE NOT FURNISHED. 3. WITH REGARD TO SALARY AND WAGES - NAME OF PAYEE COU LD NOT BE VERIFIED. 4. THE PURCHASES MADE IN CASH WERE NOT VERIFIABLE THUS, THE ID AO CONSIDERING THE ABOVE, DISALLOWED 4 0 OF THE PURCHASES AND FREIGHT AND CARTAGE CLAIMED IN A.V. 2000-2001 T O 2006-07. WITH REGARD TO SALARY & WAGES IN TRADING ACCOUNT AND SALARY DEBITED IN PROF IT AND LOSS ACCOUNT, 1/3 RD OF THE TOTAL EXPENSES WERE DISALLOWED. THE APPELLANT PREFERRED APPEAL BEFORE ID CIT(A) AND FIL ED WRITTEN SUBMISSIONS. THE ID CIT(A) CONSIDERING THE SUBMISSIONS AND FACTS OF THE CASE AND ALSO ON THE BASIS OF THE FOLLOWING ALLEGATIONS, CONTENDE D THAT THE BOOKS OF ACCOUNTS WERE NOT CORRECT AND COMPLETE AND THUS DIS ALLOWED THE EXPENSES AT 10% OF THE TOTAL EXPENSES: A. IN EARLIER ASSESSMENT, IT WAS STATED THAT BOOKS OF ACCOUNTS MAINTAINED ON COMPUTERS WERE LOST AND COULD NOT BE RETRIEVED. B. SUNDRY CREDITORS FOR PURCHASE BALANCE REMAIN UNCHAN GED FROM YEAR TO YEAR. . C. IN SURVEY U/S 133A, CARRIED OUT ON 21.12.05 AT DIFFERENT BUSINESS PREMISES OF THE APPELLANT AS WELL AS OF FAMILY MEMBERS, ALL THE ACCOUNTS WERE MAINTAINED AT BUSINESS PREM ISES OF APPELLANT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 32 D. LPS-L OF 69 PAGES FOUND AND IMPOUNDED DURING SURVEY RELATES TO CASH VOUCHER OF M/S. ANAND ORGANICS WAS NOT RECORDE D IN BOOKS OF ACCOUNTS. E. COMMON POOL OF LABOUR WORKING FOR ALL CONCERN OF FA MILY MEMBERS BUT EXPENSES CLAIMED SEPARATELY. F. INTER-MIXING OF TRANSACTIONS BETWEEN THE BUSINESS C ONCERNS OF FAMILY MEMBERS. BOTH THE DEPARTMENT AND THE ASSESSEE ARE IN APPEAL AGAINST THE ABOVE DELETION AND CONFIRMATION OF ADDITION. THE FOLLOWIN G SUBMISSIONS ARE MADE: SUBMISSIONS:- 1. ADDITION LACKS SPECIFIC DEFECTS. A. THE FINDINGS OF ID AO MAY BE SEEN. HE HAS NOT POINT ED ANY SPECIFIC DEFECT IN ANY EXPENDITURE. HE STATES 'SOME ' OF THE VOUCHERS ARE NOT PROPERLY MAINTAINED. THE DISALLOWANCE IS AD HOC AND WITHOUT POINTING ANY SPECIFIC DEFECT. {REJER AO PARA 5.2,6.2, 7.2) B. THE ID AO/ CIT(A) HAS NOT MARKED ANY SPECIFIC VOUCH ERS OF DISALLOWABLE NATURE BUT SUMMARILY DISALLOWED THE LA RGE SUM AT THE RATE OF 40 OUT OF PURCHASES. THERE IS NO BASIS OF 4 0 OR 10 AS MADE OUT BY ID AO AND ID CIT(A). 2. NON-ABATED ASSESSMENT IT IS PERTINENT TO SUBMIT THAT THE APPEAL RELATES TO SEARCH CASES. THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S. 143(2) HAD ALREADY ELAPSED. THUS, THE ASSESSMENT IS SAID TO HAVE BEEN COMPLETED. IT CANNOT BE SAID THAT AT THE TIME OF SEARCH THE A SSESSMENT WAS PENDING. A NON-ABATED ASSESSMENT CAN ONLY BE DIST URBED IN RESPECT OF INCRIMINATING MATERIAL FOUND AS A RESU LT OF SEARCH. THIS IS SO HELD IN CIT VS KABUL CHAWLA 380 ITR 573 ( DEL) CIT VS GURINDER SINGH BAWA' 386 ITR 483{BOM.) IN OUR CASES, NO INCRIMINATING MATERIAL HAS BEEN F OUND WHILE MAKING THE ADDITIONS IN RESPECT OF AFORESAID GROUN DS. WHATEVER IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 33 INCRIMINATING MATERIAL WAS FOUND WAS ALREADY OFFER ED AND TAX WAS PAID ON SAME. NO OTHER MATERIAL REMAINS. IN THE PR ESENT CASE, THE ADDITION IS PURELY RELATED TO GENERAL GROUNDS, WHI CH COULD HAVE BEEN A SUBJECT MATTER OF REGULAR ASSESSMENT AND N OT SEARCH ASSESSMENT. EVEN IN REGULAR ASSESSMENT, NO ADDITI ON CAN BE MADE ON AD HOC BASIS HOLDING THAT 'SOME' VOUCHERS ARE UNEXPLAINED. 3. AUDITED BOOKS U/S 44AB THE APPELLANT MAINTAINS REGULAR AND PROPER BOOKS O F ACCOUNT WHICH ARE AUDITED U/S 44AB OF THE ACT. AUDITOR'S R EPORTS FOR DIFFERENT YEARS ARE FILED IN PAPER BOOK. A.Y. PB REF. 2001-02 PB 148-159 2002-03 PB 205-217 2003-04 PB 259-273 2004-05 PB 331-348 2005-06 PB 422-435 2006-07 PB 520-540 THE AUDITOR HAS NOT POINTED OUT ANY DISCREPANCIES I N THE BOOKS OF ACCOUNTS. 4. THE RECORDS OF THE APPELLANT ARE GOVERNED BY THE CE NTRAL EXCISE LAWS. THE ASSESSEE IS MAINTAINING THE STATUTORY RECORDS A S PRESCRIBED UNDER THE SAID LAWS ,IN RG 21 PART I & PART 11. THE INVOICE PREPARED BY THE ASSESSEE IS AN EXCISABLE INVOICE AND AFTER PREPARAT ION DULY RECORDED IN ALL THE STATUTORY RECORDS. 5. CASE LAW:- PR. CIT VS JAGDISH S. PATEL84 TAXMANN.COM 259 (GUJ.) VIJAY TRADING CO. 76 TAXMANN.COM 366 (GUJ) IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 34 THE COURT HELD IN ABOVE CASES THAT WHEN PURCHASE M ADE BY ASSESSEE WAS FOUND TO BE BOGUS, NOT ENTIRE AMOUNT COVERED UNDER SUCH PURCHASES BUT PROFIT ELEMENT EMBEDDED THEREIN WOULD BE SUBJECT TO TAX. 6. IF THE PURCHASES ARE REJECTED, THE SALES WOULD ALSO BE REDUCED. THE GOODS OF THE APPELLANT ARE SUBJECT TO EXCISE. QUANT ITATIVE DETAILS WERE GIVEN WITH THE RETURN OF INCOME (ALONGWITH AUDITOR' S REPORT IN FORM NO. 3CD). TO ILLUSTRATIVE THE QUANTITATIVE DATA FOR F.Y . 2001-02 WAS GIVEN AT PS 216-217. 7. THE LD. AO HAS OBSERVED THAT SUBSTANTIVE DETAILS OF EXPENSES IN TRADING AND PROFIT AND LOSS ACCOUNT HAS NOT BEEN FILED, WHE REAS THE ASSESSEE HAS FILED COMPLETE LEDGER ACCOUNTS OF EXPENSES IN QUEST ION, WHICH ARE AS UNDER: - A.Y. PB REF. 2001-02 PB 174-188 2002-03 PB 231-246 2003-04 PB 286-303 2004-05 PB 361-403 2005-06 PB 452-497 2006-07 PB 551-608 8. THE DISALLOWANCE WAS ARBITRARILY MADE AND HAD NO SUPPORTING BASIS. 9. NON-PRODUCTION OF BOOKS BEFORE THE ID AO IN THE FIR ST ROUND: - LD AO IN THE FIRST ROUND (PB 4, THIRD PARA FROM TOP) HAS POI NTED OUT THAT ASSESSEE DID NOT FILE ANY SUBSTANTIVE DETAILS AS HE CLAIMED THAT BOOKS OF ACCOUNT MAINTAINED ON COMPUTER HAVE LOST AND CANNOT BE RETR IED. HE MADE AN ASSESSMENT U/S. 144. HOWEVER, ID CIT(A) IN THE FIRS T ROUND AT PS 48 PARA (B) HAS STATED IN FOURTH LINE THAT BOOKS OF ACCOUNT S AND OTHER DOCUMENTSWERE SEIZED IN SEARCH. THUS, THE ID CIT(A) WAS NOT JUSTIFIED IN RELYING ON THE FINDINGS OF THE LD AO. MOREOVER, THE ORDER OF THE ID AO AND OF THE ID CIT(A) IN THE FIRST ROUND WAS SET-ASIDE BY THE HON'BLE ITAT FOR ASSESSM ENT AFRESH. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 35 10. THE ID CIT(A) REFERRING TO ONE INSTANCE OF UNRECORD ED TRANSACTION IN BOOKS OF ANAND ORGANICS (LPS-169 PAGES), FRAMED SIM ILAR VIEW FOR THE PERIOD OF SIX YEARS COVERED BY SEC 153A. THE ACT OF DRAWING INFERENCES, WITHOUT ANY BASIS OF EVIDENCE IS NOT JUSTIFIED. MOR EOVER, SHRI PREM CHAWLA, WHO WAS CONFRONTED WITH THE SAID DOCUMENTS HAVE SURRENDERED RS.9.5 LAKHS AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 11. THE DISALLOWANCE WAS MADE SIMPLY SAYING THAT 'SOME OF THE VOUCHERS ARE NOT PROPERLY MAINTAINED AND NAMES OF THE PERSONS TO WHOM AMOUNT PAID COULD NOT BE VERIFIED'. THUS, THE AO HAS NOT MARKED ANY SPECIFIC VOUCHERS OF DISALLOWABLE NATURE BUT SUMMARILY DISALLOWED THE LARGE SUM OF MONEY ON THE BASIS OF UNTENABLE CONJECTURES AND SUMRISES. THE CASE LAW SUPPORTING ARE: DHAKESWARI COTTON MILLS LTD. VS. CIT 1954 26 ITR 77 5 SC IN TAX PROCEEDINGS, ADDITION HAS TO BE BASED ON EVI DENCES. AN ADDITION CANNOT BE MADE ON A MERE GUESS WORK, PRESUMPTIONS, CONJUCTURES AND SURMISES. LALCHAND BHAGAT AMBICA RAM VS. CIT (1959) 371TR 288 (SC); UMACHARAN SHAW & BROS. VS. CIT (1959) 371TR 271 (SC) OMAR SALAY MOHAMED SAIT VS. CIT (1959) 371TR 151 (SC) NAI DUNIA NEWS & NETWORK PVT LTD. 171TJ 289 TRIB.LNDORE AO MADE ADHOC DISALLOWANCE FOR EXPENSES HOLDING THA T 'SOME' VOUCHERS WERE NOT VERIFIABLE. HELD, NO SPECIFIC DEFECT IS PO INTED OUT. 'A' HAS MAINTAINED PROPER BOOKS WHICH HAS NOT BEEN REJECTED . B. ACIT VS.POPULAR ART PALACE (P) LTD (1995) 82 TAXMAN 274 (JP.) (MAG) IT WAS HELD THAT SINCE THE ADDITION IS BASED ON INV ESTIGATION ON SIMILAR INVESTIGATION CONDUCTED IN EARLIER YEARS AND NO NEW EVIDENCE WAS ON RECORD. THUS ADDITION MERELY ON PAST HISTORY OF THE CASE IS NOT JUSTIFIED. C. WAIDHAN ENGINEERING & INDUSTRIES (P) LTD V JCIT (20 15) 60 TAXMANN.COM 440 (JABALPUR TRIB.) IT WAS HELD THAT THE FACT THAT SOME EXPENDITURE WAS SUPPORTED WITH SELF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 36 MADE VOUCHERS, COULD BE A REASON ENOUGH TO REJECT B OOKS OF ACCOUNT AS A WHOLE BY ASSESSING OFFICER NOR DISALLOWANCES PURELY ON BASIS OF SURMISES AND CONJECTURES AND WITHOUT POINTING OUT ANY SPECIF IC DEFECTS IN VOUCHERS COULD BE PERMISSIBLE AND, CONSEQUENTLY, AD DITION TO INCOME OF ASSESSEE MADE ON ACCOUNT OF SUCH DISALLOWANCE, WAS TO BE DELETED. ACIT VS. GANPATI ENTERPRISES LTD (2013) 32 TAXMANN. COM 262 (DELHI- TRIB.) IT WAS HELD THAT WHERE ID AO FAILED TO GIVE DETAILS OF EXPENSES WHICH WERE FOUND UNVERIFIABLE AND MADE AN AD HOC DISALLOWANCE, SAID DISALLOWANCE WAS TO BE DELETED. THE ADDITION IS PURELY BASED ON CONJUNCTURES AND SU RMISES AND LIABLE TO BE DELETED. 13. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDER OF LD. A.O AND ALSO SUB MITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE NECESSARY DOCUMENTS TO VERIFY THE GENUINENESS OF THE PURCHASES AND THE EXPENSES FIGUR E OF WAGES, FREIGHT & CARTAGES AND SALARY. DUE TO LACK OF SUCH DOCUMENTS LD. A.O HAS RIGHTLY MADE THE LD. A.O TO MAKE THE DISALL OWANCE. 14. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THE COMMON ISSUE RAISED BY THE RE SPECTIVE ASSESSEE(S) IN FOLLOWING GROUNDS RELATES TO DISALLO WANCE OF PURCHASE, FREIGHT & CARTAGES, WAGES AND SALARY EXPENDITURE. (I) LATE SMT. SUDESH CHAWLA ASSESSMENT YEAR 2000-01 GROUND NO. 2,3 & 4 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 37 ASSESSMENT YEARS 2001-02 TO 2006-07 GROUND NO. 2,3,4 & 5 (II) REVENUES APPEAL IN THE CASE OF LATE SMT. SUDESH CHAWLA ASSESSMENT YEAR 2006-07 GROUND NO.1 (III) PREM CHAWLA ASSESSMENT YEAR 2000-01 TO 2001-02 GROUND NO.2,3 & 4 ASSESSMENT YEAR 2002-03 GROUND NO. 2 & 3 ASSESSMENT YEAR 2003-04 GROUND NO.2,3 & 4 TO ASSESSMENT YEAR 2006-07 (IV) SMT. SARITA CHAWLA ASSESSMENT YEAR 2005-06 GROUND NO. 4,5 & 6 ASSESSMENT YEAR 2006-07 GROUNDNO.2, 3 & 4 15. SINCE WE ARE TAKING THE BASIS OF THE FACTS OF LATE SMT. SUDESH CHAWLA WE OBSERVE THAT LD. A.O ON THE BASIS OF DOCU MENTS IMPOUNDED DURING THE COURSE OF SEARCH AND SURVEY CA RRIED OUT IN THE CASE OF ASSESSEE ON 21.12.2005 AND THEREAFTER O N OBSERVING THAT BOOKS OF ACCOUNTS ON COMPUTER WERE CLAIMED TO BE LO ST, MOST OF THE EXPENSES WERE INCURRED IN CASH AND THE ASSESSEE HAV E FAILED TO FURNISH THE DOCUMENTARY EVIDENCE TO PROVE THE GENUI NENESS OF THE PURCHASES MADE DISALLOWANCE OF 40% OF TOTAL PURCHAS ES MADE FOR IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 38 ASSESSMENT YEAR 2001-02 TO 2006-07, 40% DISALLOWANC E FREIGHT AND CARTAGE EXPENDITURE FOR YEAR 2001-02 TO 2006-07 AND 1/3 RD OF DISALLOWANCE FOR WAGES AND SALARY DEBITED IN PROFIT & LOSS ACCOUNT IN THE FOLLOWING MANNER:- A.Y DISALLOWANCE OUT OF PURCHASE DISALL OWANCE OUT OF FREIGHT & CARTAGE DISALLOWANCE OUT OF WAGES & SALARY DISALLOWANCE OUT OF SALARY 2000 - 01 18,60,766 - 38,397 34,370 2001 - 02 23,46,199 1,39,080 54,193 1,05,347 2002 - 03 30,90,263 3,10,883 60,083 1,16,046 2003 - 04 38,49,640 2,10,358 73,556 1,22 ,787 200 4 - 0 5 101, 87,492 4,48,509 98,058 4,30,290 200 5 - 0 6 114,88,340 3,97,786 72,147 2,46,215 2006 - 07 154,78,476 5,43,299 1,41,71 5 7,44,200 16. LD. CIT(A) HAVE PARTIAL RELIEF BY SUSTAINING THE D ISALLOWANCE TO 10% IN THE FOLLOWING MANNER:- PURCHASES (RS.) FREIGHT& CARTAGE WAGES & SALARY SALARY EXPENSES (RS.) (RS.) ERS.) AY. TOTAL DISALLOW- TOTAL DISALLOW- TOTAL DISALLOW- TOTAL DISALLOW- EXPENSES ANCE EXPENSES ANCE EXPENSES ANCE EXPENSES ANCE @10 % @10 % @ 10 % @ 10% 2000-01 46,51,915 4,65,191 - - 1,15,193 11,519 1,03,110 10,311 2001-02 58,65,299 5,86,530 3,47,702 34,770 1,62,580 16 ,258 3,16,043 31,604 2002-03 77,25,658 7,72,566 7,77,209 77,721 1,80,250 18 ,025 3,48,140 34,814 2003-04 96,24,102 9,62,410 5,25,895 52,589 2,20,670 22 ,067 3,38,362 33,836 ~ 2004-05 2,54,68,732 25,46,873 11,21,273 1,12,127 2,88,176 28,818 12,90,872 . 1,29,089 2005-06 3,62,20,852 36,22,085 9,94,465 99,446 2,16,443 21,644 7,38,646 73,S6 5 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 39 2006-07 3,86,96,192 38,69,620 13,58,248 1,35,825 4,25,176 42,518 22,32,600 2,23,260 THUS THE ASSESSEE GET FOLLOWING RELIEF IN THESE AS SESSMENT YEARS. PARTICULARS ASSESSMENT YEARS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-0 6 2006-07 DISALLOWANCE 1860766 2346119 3090263 3849640 10187492 11488340 1547 8476 , BY AO PURCHASES DISALLOWANCE 465191 586530 772566 962410 2 546873 3622085 3869620 CONFIRMED .. RELIEF 1395575 1759589 2317697 2887230 7640619 7866255 116088 56 ~ . DISALLOWANCE - 139080 310883 . 210358 448509 397786 543299 BY AO FREIGBT&; DISALLOWANCE 34770 77721 52589 ' 112127 99446 135825 , - CARTAGE CONFIRMED . RELIEF - 104310 233162 157769 336382 298340 407474 DISALLOWANCE 38397 54193 60083 73556 98058 72147 141715 BY AO ' WAGES & DISALLOWANCE 11519 16258 18025 22067 28818 21644 42518 SALARY 'CONFIRMED RELIEF 26878 37935 42058 51489 69240 50503 99197 DISALLOWANCE 34370 105347 116046 112787 . 430290 246215 744200 BY AO SALARY DISALLOWANCE 10311 31604 34814 33836 129089 73865 223260 EXPENSES CONFIRMED RELIEF 27059 73743 81232 78951 301201 172350 520940 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 40 17. WE OBSERVE THAT THE ASSESSEE IS CARRYING OUT THE B USINESS ACTIVITIES FROM PAST MANY YEARS. REGULAR RETURN OF INCOME WERE FILED EVEN BEFORE THE CONDUCTING OF SEARCH AND SURV EY OPERATIONS. FOR MOST OF THE YEARS BOOKS OF ACCOUNTS WERE AUDITE D. SIMILAR TYPE OF BUSINESS OF MANUFACTURING AND SALE OF INDUSTRIAL SOLVENT AND THINNERS AND SALE OF PAINTS AND THINNERS IS CARRIED OUT IN THE NAME OF OTHER SISTER CONCERNS. 18. DURING BOTH THE ROUNDS OF THE ASSESSMENT PROCEEDIN GS BOTH THE LOWER AUTHORITIES HAVE NOT RAISED ANY DOUBTS ON THE GENUINENESS OF SALES SHOWN BY THE ASSESSEE FOR ASSE SSMENT YEAR 2000-01 TO ASSESSMENT YEAR 2006-07 EXCEPT FOR THE I SSUE OF SUPPRESSED SALE WHICH WILL BE DEALT BY US IN THE SU BSEQUENT PARAS. THE DISALLOWANCE MADE BY THE A.O ARE NOT BASED ON A NY MATERIAL EVIDENCE GATHERED DURING THE COURSE OF SEARCH AND S URVEY OR DURING THE ASSESSMENT PROCEEDINGS. IT IS DISCERNABLE FROM THE RECORDS THAT THE ASSESSEE IS GOVERNED BY CENTRAL EXCISE LAWS AND STATUTORY RECORDS AS PRESCRIBED UNDER SUCH LAWS ARE BEING MAI NTAINED FOR MAKING SALES AND PURCHASE. IF THE LD. A.O WAS NOT A BLE TO LAY HANDS ON ANY DOCUMENTARY EVIDENCE TO VERIFY THE GENUINENE SS OF THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 41 PURCHASES, HE SHOULD HAVE RESORTED TO GATHER REASON ABLE FAIR MARKET VALUE OF GOODS USED IN SIMILAR TYPE OF INDUS TRIES BY CALLING NECESSARY INFORMATION, BUT LD. A.O HAD NOT MADE ANY SUCH EFFORTS. EVEN LD. A.O HAS ALSO NOT MADE EFFORTS TO KNOW ABOU T THE GROSS PROFIT OR NET PROFIT OFFERED IN SUCH TYPE OF INDUST RIES. LD. A.O HAS ALSO NOT REFERRED TO ANY SUCH PRECEDENCE OF MAKING THE DISALLOWANCE OF PURCHASE AND DISALLOWANCE OF THESE EXPENDITURE. IN SHORT IT SEEMS THAT ADHOC DISALLOWANCE OF PURCHASE AND EXPENSES HAVE BEEN MADE FOR WANT OF VERIFICATION. HON'BLE A PEX COURT IN THE CASE OF DHAKESHWARI COTTON MILLS LTD V/S CIT (1954) 26 ITR 775 HAS LAID DOWN RATIO THAT IN TAX PROCEEDINGS ADDITION H AS TO BE BASED ON EVIDENCES. AN ADDITION CANNOT BE MADE ON GUESSWORK, PRESUMPTIONS, CONJECTURES AND SURMISES. 19. WE ALSO FIND THAT HON'BLE GUJARAT HIGH COURT IN TH E CASE OF CIT V. PRESIDENT INDUSTRIES [2002J 258 ITR 654 (GUJ.) HELD AS UNDER:- IN THIS CASE, DURING THE COURSE OF SURVEY CONDUCTED IN THE PREMISES OF THE ASSESSEE, EXCISE RECORDS WERE FOUND WHICH DISCLOSED GODOWN SALES NOT DISCLOSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER MADE ADDITION OF UNDISCLOSED INCOME OF THE ENTIRE S ALE PROCEEDS THEREOF. THE COMMISSIONER (APPEALS) AFFIRMED THE ADDITION B THE APPELLATE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 42 TRIBUNAL FOUND THAT THERE WAS NO MATERIAL TOINDICAT E THAT THE ASSESSEE MADE INVESTMENTS OUTSIDE THE BOOKS OF ACCOUNT TO MA KE THE ALLEGED SALES AND HELD THAT THE ENTIRE SALE PROCEEDS COULD HOT HA VE BEEN ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE BUT THE ADDITION COULD BE ONLY OF THE PROFITS EMBEDDED' IN THE SALES. THE TRIBUNAL HAVING DECLINED TO STATE A CASE, THE DEPARTMENT APPLIED TO THE HIGH COURT FOR ART ORDER CALLING FOR, A REFERENCE : 'HELD, DISMISSING THE APPLICATION FOR REFERENCE, TH AT THE AMOUNT OF SALES COULD NOT REPRESENT THE INCOME OF THE ASSESSE E WHO HAD NOT DISCLOSED THE SALES, THE SIDES ONLY REPRESENTED THE PRICE RECEIVED BY THE SELLER OF THE GOODS; ONLY THE REALISATION OF TH E EXCESS OVER THE COST INCURRED COULD FORM PART OF THE PROFIT INCLUDE D IN THE CONSIDERATION FOR THE SALES. SINCE THERE WAS NO FIN DING TO THE EFFECT THAT INVESTMENT BY WAY OF INCURRING THE COST IN ACQ UIRING THE GOODS WHICH WERE SOLD HAD BEEN MADE BY THE ASSESSEE AND THAT THAT INVESTMENT WAS ALSO NOT DISCLOSED, ONLY THE EXCESS OVER THE COST INCURRED COULD BE TREATED AS PROFIT, '. 20. IN THE INSTANT CASE ALSO THE ONLY DIFFICULTY POINT ED OUT IS THAT THE ASSESSEE HAS FAILED TO PRODUCE THE RECORD RELEV ANT TO PURCHASE AND EXPENSES BUT NO FURTHER ENQUIRY WAS MADE ON THE BASIS OF AUDIT REPORT FURNISHED BY THE ASSESSEE, LIST OF SUN DRY CREDITORS FILED THEREIN, EXTRACTING INFORMATION ABOUT THE NET PROFI T AND GROSS PROFIT RATES OFFERED IN SIMILAR KIND OF INDUSTRIES IN THE BUSINESS, THE LD. A.O MADE ABNORMAL DISALLOWANCE WHICH HAS RESULTED I N ASSESSING IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 43 THE NET PROFIT TO ABNORMAL LEVEL OF 70.70% FOR ASSE SSMENT YEAR 2000-01 AND ALSO IN THE RANGE OF 35 TO 50% FOR OTHE R ASSESSMENT YEARS WHICH BY NO SCALE CAN BE ACCEPTABLE. LD. CIT (A) HAS ALSO RESORTED TO THE SAME PATTERN BUT GIVING PARTIAL REL IEF TO THE ASSESSEE BY CONFIRMING DISALLOWANCE TO 10%. 21. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND FOLLOWING JUDICIAL PRECEDENCE IN OUR CONSIDERED VIE W THE SALES DECLARED BY THE ASSESSEE IN THE RESPECTIVE RETURNS OF INCOME SHOULD BE TAKEN AS A BASIS AND NET PROFIT RATE CAN BE APPL IED EVENLY FOR ALL THE YEARS WHICH SHOULD BE HIGHER THAN THE HIGHEST N ET PROFIT OFFERED BY THE ASSESSEE(S) IN ANY OF THE ASSESSMENT YEARS. WE FIND THAT THE NET PROFIT OFFERED BY THE ASSESSEE FOR ASSESSMENT Y EAR 2001-02 TO ASSESSMENT YEAR 2006-07 IS AT 0.37%, 1.71%, 1.72%, 2.99%, 1.84%, 0.95% AND 1.97% RESPECTIVELY. IN THE CASE OF ANOTHER ASSESSEE I.E. SHRI PREM CHAWLA NET PROFIT RATE OFFE RED FOR ASSESSMENT YEAR 2001-02 TO ASSESSMENT YEAR 2006-07 IN THE CONCERN M/S ANAND PAINTS IS 2.31%, 3.52%, 1.36%, 1. 44%, 1.94%, 1.83% AND 2.67% RESPECTIVELY AND IN CASE OF SMT. SA RITA CHAWLA NET PROFIT RATE OF 3.2% AND 4.9% IS OFFERED FOR ASS ESSMENT YEAR IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 44 2005-06 AND ASSESSMENT YEAR 2006-07. FROM PERUSAL O F ABOVE NET PROFIT RATE WE FIND THAT THE NET PROFIT RATE IS RAN GING FROM 0.37% TO 5% APPROX. IT IS ALSO NOT DISPUTED THAT DURING THE BOTH ROUNDS BEFORE THE LOWER AUTHORITIES THE REASONS BEST KNOWN TO THE ASSESSEE NECESSARY DOCUMENTARY EVIDENCE TO PROVE THE GENUINE NESS OF THE PURCHASES AND EXPENSES WERE NOT PLACED AND BOOKS OF ACCOUNTS WERE CLAIMED TO BE LOST WHEN THE PROCEEDINGS WERE U NDERGOING BEFORE THE APPELLATE AUTHORITIES. THE ELEMENT OF CARELESSNESS ON THE PART OF THE ASSESSEE CANNOT BE REFUSED. HOWEVER LOOKING TO THE FACT THAT THE ISSUES RAISED BEFORE US ARE IN THE SE COND ROUND AND THE MATTERS PERTAINING TO ASSESSMENT YEAR 2000-01 T O ASSESSMENT YEAR 2006-07 AND THUS WITH A VIEW TO END LITIGATION , BEING FAIR TO BOTH THE PARTIES AND TO MEET THE END OF THE JUSTICE WE ARE OF THE CONSIDERED VIEW THAT NET PROFIT RATE OF 5% OF THE DISCLOSED TURNOVER IN THE BUSINESS CONCERN OWNED BY ALL THE A SSESSEE(S) IN THE INSTANT APPEAL BEFORE US I.E. IN THE CASE OF LA TE SMT. SUDESH CHAWLA, SHRI PREM CHAWLA FOR ASSESSMENT YEAR 2000-0 1 TO ASSESSMENT YEAR 2006-07 AND IN THE CASE OF SMT. SAR ITA CHAWLA FOR ASSESSMENT YEAR 2005-06 AND ASSESSMENT YEAR 2006-07 SHALL BE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 45 SUFFICIENT TO COVER UP ALL THE DISCREPANCIES RELATI NG TO UNVERIFIABLE PURCHASE, FREIGHT AND CARTAGE, WAGES &SALARY AND SA LARY EXPENSES. WE ACCORDINGLY ORDER SO AND DIRECT THE LD.A.O TO CO MPUTE THE NET PROFIT FOR THE ABOVE STATED ASSESSEE(S) @5% OF THE DISCLOSED TURN OVER AND IF IN CASE NET PROFIT RATE IS OFFERED ON A HIGHER PERCENTAGE I.E. MORE THAN 5% THE SAME SHOULD BE ACCEPTED. OUR THIS DECISION OF APPLYING NET PROFIT RATE OF 5% SHALL BE SUFFICIENT TO COVER UP THE DISALLOWANCE OF PURCHASE, FREIGHT AND CARTAGE, WAGE S & SALARY AND SALARY EXPENSES IN DISPUTE BEFORE US. WE THUS DELET E THE DISALLOWANCE OF PURCHASE, FREIGHT AND CARTAGE, WAGE S AND SALARY AND SALARY EXPENSES CHALLENGED BEFORE US IN THE GROUND MENTIONED IN PARA 14. IN THE RESULT RESPECTIVE GROUNDS ARE PARTL Y ALLOWED AS PER TERMS INDICATED ABOVE. 22. NOW WE TAKE UP REMAINING GROUNDS OF THE INSTANT AP PEAL. 23. WE WILL FIRST TAKE UP THE REMAINING GROUNDS OF ASSE SSEE LATE SMT. SUDESH CHAWLA. ASSESSMENT YEAR 2001-02 ITA NO.159/IND2015 GROUND NO.6 IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 46 24. THROUGH GROUND NO.6 ASSESSEE HAS CHALLENGED THE FI NDING OF LD. CIT(A) CONFIRMING THE ADDITION FOR UNEXPLAINED CASH PAYMENT OF RS.3,40,000/-. BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE LD. A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT MADE ADDITION FOR CASH OF RS. 3,40,000/- TOWARD S THE PAYMENT MADE TO RELIANCE INDUSTRIES LTD, MUMBAI SINCE THE C ORRESPONDING ENTRIES IN THE CASH BOOK CANNOT BE VERIFIED. IN THE FIRST ROUND LD. CIT(A) DELETED THE ADDITION BUT IN THE SET ASIDE PR OCEEDINGS AS PER THE DIRECTION OF TRIBUNAL, LD. CIT(A CONFIRMED THE ACTION OF LD. A.OS ACTION MAKING THE ADDITION U/S 69 OF THE ACT. NOW T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 25. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE ARE REGULAR TRANSACTIONS WITH RELIANCE INDUSTRIES LTD AND DEMAN D DRAFTS ARE ISSUED BY DEPOSITING CASH IN BANK WHICH IS VERIFIAB LE FROM THE LEDGER ACCOUNT. 26. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 27. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. ASSESSEE HAS CHALLENGED THE FIND INGS OF LD. CIT(A) IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 47 CONFIRMING THE ADDITION OF RS.3,40,000/- U/S 69 OF THE ACT MADE BY LD. A.O FOR UNEXPLAINED CASH EXPENDITURE. WE NOTE THAT THE ASSESSEE AS WELL AS OTHER GROUP CONCERNS MAKE REGUL AR PURCHASES FROM RELIANCE INDUSTRIES LTD. IN THE LEDGER ACCOUN T, PAGE 189 TO 293 OF THE PAPER BOOK DATED 4.7.2016 SHOWS THE REGU LAR TRANSACTIONS BETWEEN THE ASSESSEE AND RELIANCE INDU STRIES LTD. IN THIS LEDGER ACCOUNT VARIOUS ENTRIES FOR PAYMENT THR OUGH DEMAND DRAFT AND CASH ARE APPEARING. LOWER AUTHORITIES HA VE NOT DOUBTED THE TRANSACTIONS IN THIS LEDGER ACCOUNT. THE ADDITI ONS WAS MADE FOR SOURCES OF CASH. THE ASSESSEES FINANCIAL STATEMEN T ARE DULY AUDITED. THERE IS A POSITIVE CASH BALANCE AT THE C LOSE OF THE YEAR. 28. UNDER THESE GIVEN FACTS AND CIRCUMSTANCES OF THE C ASE THE SOURCE OF CASH CANNOT BE DOUBTED WHICH HAS BEEN USE D TO MAKE DEMAND DRAFT FOR PAYING TO RELIANCE INDUSTRIES LTD. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION OF RS. 3,40,000/- MADE FOR UNEXPLAINED CASH PAYMENT AND AL LOW GROUND NO.6 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2 001-02 VIDE APPEAL NO.IT(SS)A NO.159/IND/2015. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 48 29. NOW WE TAKE GROUND NO.7 FOR ASSESSMENT YEAR 2001-02 WHEREIN THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.10,01,000/- MADE ON A CCOUNT OF SECURITY DEPOSITS. BRIEF FACTS ARE THAT THE ASSSES SEE RECEIVED SECURITY DEPOSITS OF RS.10,01,000/- FROM M/S. KANH AYA AGENCIES, RAIPUR. IN THE SECOND ROUND LD. A.O HAS MADE ADDIT ION FOR UNEXPLAINED SECURITY DEPOSITS WHICH HAS FURTHER CON FIRMED BY LD. CIT(A) AND NOW THE MATTER IS IN TRIBUNAL BEFORE US. 30 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT M/S KA NHAYA AGENCIES, RAIPUR IS A DEALER OF THE ASSESSEE AND RE GULAR TRANSACTIONS TOOK PLACE. THESE DEPOSITS WERE RECEI VED THROUGH ACCOUNT PAYEE CHEQUE AND AFTER ADJUSTING THE SALES EFFECTED BY THIS DEALER REMAINING AMOUNT WAS REPAID BACK. 31. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 32. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PACED BEFORE US. THROUGH GROUND NO.7 ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 10,01,000/- MADE FOR SECURITY D EPOSIT RECEIVED FROM M/S KANHAYA AGENCIES, RAIPUR. WE NOTE THAT M/ S KANHAYA IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 49 AGENCIES, RAIPUR WAS APPOINTED AS A DEALER OF CHATT ISGARH REGION. SALES WERE EFFECTED THROUGH THIS DEALER ON BEHALF O F THE ASSESSEE. THESE FACTS REMAIN UNDISPUTED DURING BOTH THE ROUND S. RECORDS ALSO SHOWS THAT SALES WORTH RS.7,50,644/- WAS MADE BY THE DEALER. SECURITY DEPOSITS WERE RECEIVED THROUGH ACCOUNT PAY EE CHEQUES IN THE BANK ACCOUNT OF THE ASSESSEE AND REMAINING AMOU NT AFTER ADJUSTING THE CHEQUE IS CLAIMED TO HAVE PAID BACK. PRIME FACIE WE FIND NO REASON TO DOUBT THE GENUINENESS OF THE TRAN SACTIONS WHICH HAS BEEN CARRIED OUT DURING THE REGULAR COURSE OF B USINESS BETWEEN THE ASSESSEE AND ITS DEALER SINCE THE SAME HAVE TAK EN PLACE THROUGH ACCOUNT PAYEE CHEQUE AND ARE PART OF THE AU DITED FINANCIAL STATEMENTS. THUS THE IMPUGNED ADDITION OF RS. 10,0 1,000/- DESERVES TO BE DELETED. RELEVANT FINDING OF LD. CI T(A) IS SET ASIDE AND GROUND NO.7 OF ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001-02 IS ALLOWED. 33. NOW WE TAKE UP GROUND NO.6 OF ASSESSEES APPEAL FO R ASSESSMENT YEAR 2003-04 VIDE IT(SS)A NO.161/IND/201 5. IN THIS GROUND ASSESSEE HAS CHALLENGED THE ADDITION OF RS, 3,50,000/- CONFIRMED BY LD. CIT(A) MADE BY LD. A.O ON ACCOUNT OF UNEXPLAINED IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 50 SECURITY DEPOSITS. BRIEF FACTS RELATING TO THIS GR OUND ARE THAT SECURITY DEPOSIT OF RS. 3,50,000/- RECEIVED FROM M/ S ANAND AGENCIES, INDORE WAS HELD TO BE UNEXPLAINED BY LD. A.O AND HIS ACTION WAS CONFIRMED BY LD. CIT(A) AND ASSESSEE HAS NOW CHALLENGED THE ISSUE BEFORE THIS TRIBUNAL. 34. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS T RANSACTION WITH M/S ANAND AGENCIES, INDORE WAS A PART OF REGUL AR BUSINESS TRANSACTIONS BETWEEN THE ASSESSEE AND THE DEALER FO R INDORE REGION I.E M/S ANAND AGENCIES, INDORE. THE ASSESSEE IS CA RRYING OUT BUSINESS TRANSACTION CONSISTENTLY WITH THIS DEALER AND THEREFORE THE SAME SHOULD NOT BE DOUBTED. 35. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIE S, 36. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORDS PLACED BEFORE US. THROUGH GROUND NO.6 FOR ASSESSME NT YEAR 2003- 04 VIDE IT (SS)A NO.161/IND/2015 ADDITION OF RS. 3, 50,000/- MADE FOR UNEXPLAINED SECURITY DEPOSIT CONFIRMED BY LD. C IT(A) IS IN CHALLENGE BEFORE US. WE NOTE THAT DURING THE ASSES SMENT YEAR 2003-04 GROSS TURNOVER OF ASSESSEE IS RS.1,24,03,36 0/-. BOOKS OF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 51 ACCOUNTS MAINTAINED BY THE ASSESSEE IS VERIFIED BY THE AUDITOR FOR PREPARING THE TAX AUDIT REPORT U/S 44AB OF THE ACT. M/S ANAND AGENCIES, INDORE WAS ACTING AS DEALER FOR INDORE RE GION. THE AMOUNT OF RS. 3,50,000/- WAS RECEIVED AS SECURITY D EPOSIT. RS.1,50,000/- WAS ADJUSTED AGAINST THE GOODS SOLD A ND THE BALANCE AMOUNT WAS SHOWN AS SECURITY DEPOSIT IN THE AUDITED BALANCE SHEET. PRIME FACIE THESE OF TRANSACTION LOOKS TO BE GENUINE AND HARD TO DISBELIEVE IT LOOKING TO THE NATURE OF TRANSACTI ONS BEING PART AND PARCEL OF BUSINESS ACTIVITY. WE THEREFORE ARE OF T HE CONSIDERED VIEW THAT THE FINDING OF LD. CIT(A) DESERVES TO SET ASID E AND ADDITION OF RS. 3,50,000/- DESERVES TO BE DELETED. WE ACCORDIN GLY ORDER SO AND ALLOW GROUND NO.6 RAISED BY THE ASSESSEE FOR ASSESS MENT YEAR 2003-04 VIDE IT (SS)A NO.161/IND/2015, 37. NOW WE TAKE UP GROUND NO.6 RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 VIDE IT (SS)A NO.162/IND/20 15 THROUGH WHICH HAS CHALLENGED THE FINDING OF LD. CIT(A) CONF IRMING THE ADDITION OF RS. 14,50,843/- MADE BY LD. AO ON ACCOU NT OF UNEXPLAINED LOAN FROM SHRI PREM CHAWLA. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 52 38. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT ASSESS EES SON SHRI PREM CHAWLA MADE VARIOUS PAYMENTS ON BEHALF OF M/S ANAND ORGANICS TO VARIOUS SUPPLIERS TOTALING TO RS.14,50, 843/-. LD. A.O DOUBTED THE GENUINENESS OF THE TRANSACTION AND MADE THE ADDITION. LD. CIT(A) IN THE SECOND ROUND CONFIRMED THE ADDITI ON MAINLY ON ACCOUNT THAT SHRI PREM CHAWLA ACCEPTED THE ANOMALIE S IN THE BOOKS OF ACCOUNTS AND HAS SURRENDERED RS. 9,50,000/ - ON ACCOUNT OF DEBTORS/CREDITORS. NOW THE ASSESSEE IS IN APPEA L BEFORE THE TRIBUNAL. 39 . LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE PAPE R BOOK RUNNING PAGE 404 AND 405 SHOWING THE CURRENT ACCOUN T OF SHRI PREM CHAWLA IN THE BOOKS OF ASSESSEES SOLE PROPRIE TARY CONCERN M/S ANAND INDUSTRIES. IN THIS ACCOUNT VARIOUS PAYM ENTS HAVE BEEN MADE TO SUPPLIERS WHICH ARE CLAIMED TO HAVE BE EN MADE ON BEHALF OF M/S ANAND ORGANICS. THE DETAILS OF VARIO US SUPPLIERS IS PLACED ON RECORD AND THE OUTSTANDING AMOUNT OF RS.1 4,40,500/- HAVE BEEN SHOWN IN THE ORIGINAL RETURN OF INCOME AL SO. 40. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING ORDERS OF BOTH THE LOWER AUTHORIT IES. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 53 41. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.6 FOR ASSESSMEN T YEAR 2004- 05 ASSESSEE HAS CHALLENGED THE ADDITION OF RS.14,58 ,348/- CONFIRMED BY THE LD. CIT(A) WHICH WAS MADE BY THE L D. A.O FOR UNEXPLAINED CREDIT FROM SHRI PREM CHAWLA AT RS. 14, 50,843/-. 42. WE OBSERVE THAT SHRI PREM CHAWLA IS THE SON OF THE ASSESSEE. THE ASSESSEE AND OTHER FAMILY RELATIVES ARE RUNNING VARIOUS PROPRIETARYSHIP AND PARTNERSHIP CONCERNS WHICH ARE CARRYING OUT ALMOST SIMILAR TYPE OF BUSINESS. WHEN SIMILAR TYPE OF BUSINESS IS CARRYING OUT UNDER VARIOUS CONCERNS OWNED BY FAMILY MEMBERS, ANOTHER CONCERNS TRANSACTIONS AND PAYMENTS ON BEHA LF OF EACH OTHER AT SOME POINT OF TIME FOR BUSINESS EXIGENCIES IS QUITE NORMAL. IN THE INSTANT CASE SOME AMOUNT OF PURCHASES AND OT HER EXPENSES OF M/S ANAND ORGANICS (PROP. LATE SMT. SUDESH CHAWL A) WERE PAID BY SHRI PREM CHAWLA FROM HIS PROPRIETARYSHIP CONCER N M/S ANAND INDUSTRIES TO THE FOLLOWING PERSONS:- NAME OF SUPPLIER TO WHOM PAYMENT WAS MADE AMOUNT (RS.) IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 54 JINDAL POLYSTER LIMITED 7,35,064 RELIANCE INDUSTRIES LTD 2,66,800 SURAT TEXTILE MILLS LT D 1,01,216 MALVIYA TRADERS 3,200 FABRICATION WORK 2,789 OM PLYWOOD 4,639 CERMIC WORLD 20,000 PRATAP PLYWOOD 23,635 RASHI INSULATION 7,783 MP TRADERS 10,000 MAHAVEER PLYWOOD 10,000 AGECO CABLES 414 VIDYA CORRUGATOR 5,303 SHRI METAL CONTAINOR 60, 000 TOTAL RS.12,50,843 43. APART FROM THE ABOVE RS.2,00,000/- WAS ALSO PAID T O JINDAL POLYSTER LIMITED BY SHRI PREM CHAWLA FROM HIS PERSO NAL ACCOUNT, THUS PAYMENT OF RS. 14,58,843/- HAS BEEN MADE BY SH RI PREM IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 55 CHAWLA THROUGH HIS SOLE PROPRIETARYSHIP WAS M/S ANA ND INDUSTRIES AND HIS PERSONAL ACCOUNT. ALL THESE TRANSACTIONS A RE SHOWN IN THE REGULAR BOOKS OF ACCOUNTS AND WERE ALSO FORM PART O F THE AUDITED BALANCE SHEET WHICH WERE FILED WITH REGULAR RETURN OF INCOME BEFORE THE SEARCH WAS CONDUCTED U/S 132 OF THE ACT. 44. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE ARE OF THE VIEW THAT SINCE THE IDENTITY AND CREDITW ORTHINESS OF SHRI PREM CHAWLA IS NOT IN DOUBT AND SO IS THE GENUINENE SS OF THE TRANSACTION WHICH HAVE BEEN MADE IN THE REGULAR COU RSE OF BUSINESS BETWEEN THE TWO SISTER CONCERNS, ARE OF TH E VIEW THAT THIS ADDITION OF RS.14,50,843/- MADE FOR UNEXPLAINED CRE DIT FROM SHRI PREM CHAWLA DESERVES TO BE DELETED. WE ACCORDINGLY ORDER SO AND SET ASIDE THE FINDING OF LD. CIT(A) AND ALLOW GROUN D NO.6 RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 IN IT(SS) A NO. 162/IND/2015. 45. NOW WE TAKE UP GROUND NO.7 FOR ASSESSMENT YEAR 200 4-05 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDI NG OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.9,66,941/- AFTER GIVI NG PART RELIEF OF RS. 2,50,000/- AGAINST THE ADDITION OF RS. 12,16,94 1/- WAS MADE BY IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 56 THE LD. A.O FOR UNEXPLAINED ADDITION TO THE CAPITAL ACCOUNT. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURING THE F INANCIAL YEAR 2003- 04 RELEVANT TO ASSESSMENT YEAR 2004-05 ASSESSEE MAD E SOME ADDITION TO ITS CAPITAL ACCOUNT IN THE SOLE PROPRIT ARYSHIP CONCERN M/S ANAND ORGANICS WHICH INCLUDED WITHDRAWAL OF RS. 7,00,000/- FROM M/S ATUL SOLVO CHEM WHEREIN THE ASSESSEE HAS P ARTNER RS.2,50,000/- FROM PERSONAL ACCOUNT OF LATE SUDESH CHAWLA AND RS.2,04,350/- FROM AGRICULTURE ACTIVITIES. THE LD. A.O WAS NOT SATISFIED WITH THE SOURCE OF CAPITAL INTRODUCED IN M/S ANAND ORGANICS AND MADE ADDITION OF RS.12,16,941/-. IN T HE SECOND ROUND WHEN THE MATTER CAME UP BEFORE LD. CIT(A) HE PARTLY ALLOWED ASSESSEES GROUND BY GIVING RELIEF FOR THE CAPITAL INTRODUCED THROUGH ACCOUNT PAYEE CHEQUE AT RS.2,50,000/- FROM ASSESSEE S OWN SAVING BANK ACCOUNT AND CONFIRMED THE REMAINING AMOUNT. N OW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST T HE ADDITION OF RS.9,66,941/-. 46. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE WRIT TEN SUBMISSION SUBMITTED THAT RS. 7,00,000/- IS RECEIVE D FROM THE PARTNERSHIP FIRM M/S ATUL SOLVO CHEMICALS AND THE S AME IS IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 57 AVAILABLE FROM THE CAPITAL GAIN OF M/S ATUL SOLVO CHEMICALS AND THUS THE SAME IS EXPLAINED. AS REGARDS INCOME FROM AGRICULTURE AT RS.2,04,350/- IT IS SUBMITTED THAT THE ASSESSEE EAR NED AGRICULTURE INCOME AND HAVE BEEN SHOWN IT IN THE INCOME TAX RET URN WHICH WAS FILED BEFORE THE DATE OF SEARCH AND THUS THE SOURCE OF CAPITAL INTRODUCED IN THE PROPRIETARYSHIP CONCERN SHOULD NO T HAVE BEEN DOUBTED BY BOTH THE LOWER AUTHORITIES. 47. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 48. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.7 FOR ASSESSMEN T YEAR 2004- 05 ASSESSEE HAS CHALLENGED THE ADDITION CONFIRMED B Y LD. CIT(A) AT RS.9,66,941/-. THE LD. A.O MADE THE ADDITION FOR R S.12,69,941/- FOR THE UNEXPLAINED CAPITAL ADDITION TO THE PROPRIE TARYSHIP CONCERN M/S ANAND ORGANICS OUT OF WHICH LD. CIT(A) DELETED THE ADDITION FOR RS.2,50,000/- BEING THE AMOUNT RECEIVED BY CHEQ UE FROM OTHERS IN SAVING BANK ACCOUNT AND THE REMAINING AMOUNT OF RS.9,66,941/- IS NOT DISPUTED. WE OBSERVE THAT OUT OF RS.9,66,9 41/- SOME OF RS.7,00,000/- RELATES TO THE CASH WITHDRAWN BY THE ASSESSEE FROM IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 58 PARTNERSHIP FIRM M/S. ATUL SOLVO CHEMICAL. FROM PE RUSAL OF THE PAPER BOOK PAGE 409 SHOWING THE PARTNERS CAPITAL A CCOUNT IN THE BOOKS OF M/S ATUL SOLVO CHEMICAL WHICH SHOWS THAT D URING THE YEAR THE ASSESSEE HAS WITHDRAWN RS.9,47,731.50. ASSSESS EE ALSO MADE ADDITION AT RS.1,00,000/- DURING THE YEAR BUT THE O PENING AND CLOSING BALANCE OF THE CAPITAL ACCOUNT IS NEGATIVE. THIS WAS THE SOLE REASON FOR WHICH THE LOWER AUTHORITIES HAVE NOT ACC EPTED THE CAPITAL INTRODUCED AT RS.7,00,000/- MADE FROM CASH WITHDRAW ALS FROM PARTNERSHIP FIRM M/S AUTUL SOLVO CHEMICAL. IN OUR VIEW MERELY FOR THE REASON THAT THERE IS NEGATIVE OR DEBIT BALANCE OF THE OPENING AND CLOSING OF THE CAPITAL ACCOUNT IN THE BOOKS OF PART NERSHIP FIRM CANNOT BE ESTOPPELS FOR A PARTNER TO WITHDRAWAL FRO M PARTNERSHIP FIRM. THERE IS NO FINDING ON RECORD OF THE LD. A.O TO HAVE INVESTIGATED INTO THE CAPITAL ACCOUNT OF THE PARTNE RSHIP FIRM TO PROVE ANY MATERIAL AGAINST THE ASSESSEE. THUS WHE N THE PARTNERS CAPITAL ACCOUNT IS NOT IN DISPUTE THEN RAISING DOUB T OF WITHDRAWALS MADE IN CASH (WHICH THE PARTNER IS ALLOWED TO DO SO ) IT WAS NOT JUSTIFIED BY BOTH THE LOWER AUTHORITIES TO MAKE ADD ITION FOR RS.7,00,000/- WHICH IN OUR VIEW IS DULY EXPLAINED B Y ASSESSEE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 59 HAVING ITS SOURCE FROM THE CASH WITHDRAWALS FROM TH E PARTNERSHIP FIRM M/S ATUL SOLVO CHEMICALS. AS REGARDS THE INCO ME FROM AGRICULTURE ACTIVITIES AT RS. 2,04,350/- THE CLAIM OF WHICH HAVE BEEN DENIED BY BOTH THE LOWER AUTHORITIES, WE OBSERVE TH AT ONLY FROM ASSESSMENT YEAR 2004-05 THE ASSESSEE HAS SHOWN AGRI CULTURE INCOME IN THE REGULAR RETURN OF INCOME FILED U/S 13 9 OF THE ACT. BEFORE US THERE IS NO DOCUMENT PRODUCED IN THE FORM OF AGRICULTURE LAND, PROOF OF AGRICULTURE ACTIVITY BEING CARRIED O UT AND THE BASIS OF COMPUTING THE AGRICULTURE INCOME. THE ASSESSEE IS ONLY CLAIMING THAT AGRICULTURE INCOME SHOULD BE ACCEPTED SINCE IT HAS BEEN SHOWN IN THE REGULAR INCOME TAX RETURN FILED BEFORE CONDU CTING OF SEARCH U/S 132 OF THE ACT. WE NOTE THAT THE ASSESSEE HAS S HOWN THE AGRICULTURE INCOME AT RS. 1,43,800/- FOR THE FIRST TIME IN THE INCOME TAX RETURN FOR ASSESSMENT YEAR 2004-05 FILED ON 31. 10.2004 AND THE SAME AMOUNT HAS BEEN REFLECTED IN THE RETURN FI LED IN REPLY TO NOTICE U/S 153A OF THE ACT. BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE HAS CLAIMED AT RS. 2,03,450/- IS THE AMOUNT EARNED FROM AGRICULTURE ACTIVITIES. WE THUS FIND T HAT THERE IS A MISMATCH IN THE CLAIM OF THE ASSESSEE ITSELF. THE A GRICULTURE INCOME IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 60 SHOWN IN THE INCOME TAX RETURN IS NOT MATCHING TO T HE CLAIM MADE DURING THE ASSESSMENT PROCEEDINGS. ASSESSEE HAS AL SO NOT PROVIDED ANY DOCUMENTARY EVIDENCE TO SUPPORT THE CLAIM. WE A RE THUS UNABLE TO ACCEPT THE CLAIM OF AGRICULTURE INCOME OF RS.2,03,450/-. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES O F THE CASE AND DISCUSSIONS ABOVE DELETE THE ADDITION OF RS.7,00,00 0/- OUT OF THE IMPUGNED ADDITION OF RS.9,66,941/- AND PARTLY ALLOW ASSESSEES GROUND NO.7 SUSTAINING THE ADDITION AT RS.2,66,941/ -. THUS GROUND NO.NO.7 FOR ASSESSMENT YEAR 2004-05 IN IT(SS )A NO.162/IND/2015 IS PARTLY ALLOWED. 49. NOW WE WILL TAKE UP GROUND NO.6 FOR ASSESSMENT YEA R 2005- 06 IN IT(SS)A NO.163/IND/2015 THROUGH WHICH THE ASS ESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS,16,50,000/- MADE BY THE LD. A.O ON ACCOUNT OF U NEXPLAINED SECURITY DEPOSITS/UNSECURED LOANS. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O ASKED ASSE SSEE TO EXPLAIN THE UNSECURED LOANS/SECURITY DEPOSITS AMOUNTING TO RS.16,50,000/-. THE ASSESSEE SUBMITTED BEFORE LD. A .O THAT MOSTLY THE AMOUNTS ARE UNSECURED LOANS TAKEN FROM RELATIVE S AND OTHER IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 61 PARTIES THROUGH ACCOUNT PAYEE CHEQUES AND HAVING PA N. FEW OF THE CASH CREDITORS HAVE ALSO BEEN REPAID AND THE LOAN ACCOUNTS WERE SQUARED OFF. THE LD. A.O WAS NOT SATISFIED AND HE CONFIRMED THE ADDITION U/S 68 AT RS. 16,50,000/-. WHEN THE MATTE R TRAVELLED BEFORE LD. CIT(A) IN SECOND ROUND THE ASSESSEE AGAI N SUBMITTED THE DETAILED SUBMISSIONS WITH NECESSARY DETAILS. LD. CI T(A) HOWEVER HAS NOT DEALT THE ALLEGED CREDITORS IN DETAIL AS WELL A S INDIVIDUALLY BUT SUMMARILY DISMISSED THE ASSESSEES GROUND REFERRING TO THE STATEMENT MADE BY SHRI PREM CHAWLA(SON OF THE ASSES SEE) SURRENDERING RS.9,50,000/- U/S 132(4) OF THE ACT ON ACCOUNT OF DEBTORS/CREDITORS. LD. CIT(A) HAS ALSO MENTIONED TH AT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SUFFICIENT A ND THE TRANSACTIONS ARE NOT GENUINE BUT LD. CIT(A) FAILED TO BRING ANY MATERIAL ON RECORD TO DISAPPROVE THE CLAIM OF THE A SSESSEE. LD. CIT(A) CONFIRMED THE FINDING OF LD. A.O MAKING THE ADDITION OF RS.16,50,000/- AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 50. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED AND RELIED ON WRITTEN SUBMISSIONS PLACED ON RECORD AND THE RELEVA NT PAGES OF THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 62 PAPER BOO PLACED AT PAGE 498 TO 505 AND ALSO SUBMIT TED THAT THERE WERE REGULAR TRANSACTIONS OF UNSECURED LOANS AND SE CURITY DEPOSITS. FEW OF THE LOAN ACCOUNTS HAVE BEEN SQUARED OFF. LD . CIT(A) ERRED IN CONFIRMING THE ADDITION MERELY REFERRING TO THE STA TEMENTS OF SHRI PREM CHAWLA U/S 132(4) OF THE ACT AND ALSO WITHOUT APPRECIATING THE FACT IRREGULARITY FOUND WAS ALREADY SURRENDERED AND OFFERED TO TAX. 51. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 52. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.6 FOR ASSESSME NT YEAR 2005- 06 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A ) CONFIRMING THE ADDITION FOR THE UNEXPLAINED UNSECURED LOAN/SECURIT Y DEPOSITS TOTALING TO RS.16,50,000/- RECEIVED FROM FOLLOWING PARTIES:-. NAME PURPOSE AMOUNT CHITRABALWANI LOAN 1,00,000/ - M/S ANAND AGENCIES, GONDIA) SECURITY DEPOSIT 3,00,000/ - M/S ANAND AGENCIES, RAIPUR LOAN 2,00,000/ - M /S ASIAN PAINT HOUSE SECURITY DEPOSIT 40,000/ - SMT. SARITACHAWLA LOAN 5,10,000/ - M/S STAR HARDWARE, BHOPAL SECURITY DEPOSIT 1,00,000/ - IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 63 VISHAL KUMAR RAJ KUMAR LOAN 2,00,000/ - SONIA DEVI LOAN 2,00,000/ - TOTAL 16,50,000/ - 53. IN THE ABOVE STATED LIST THE AMOUNT REFERRED AS SE CURITY DEPOSITS AT RS.3,00,000/-, RS.40,000/-, RS.1,00,000 /- TOTALING TO RS.4,40,000/- RECEIVED FROM M/S ANAND AGENCIES, GON DIA, M/S ASIAN PAINT HOUSE, STAR HARDWARE, BHOPAL ARE REGULA R SECURITY DEPOSITS RECEIVED ON ACCOUNT OF APPOINTMENT AS DEAL ERS TO FACILITATES SALES. SINCE THE ASSESSEE SENDS GOODS FOR SALE TO ALL THESE DEALERS AND RECEIVE THE SALE CONSIDERATION ON LATER DATES A S AND WHEN THE GOODS ARE SOLD. THE SECURITY DEPOSITS ARE KEPT WITH THE ASSESSEE FOR SECURITY PURPOSES. IN CASE THE DEALERS ARE REMOVED THEN THE ASSESSEE ADJUSTS THE SALE AGAINST THE SECURITY DEPO SIT. THIS ISSUE HAS BEEN DISCUSSED IN PRECEDING PARAS ALSO. WE THE REFORE OBSERVING THE CONSISTENCY OF THE BUSINESS AND THE TRANSACTION BEING NORMALLY CARRIED OUT IN THE COURSE OF BUSINESS FIND NO REASO N TO DOUBT THE GENUINENESS OF THE SECURITY DEPOSITS RECEIVED BY CH EQUE AND DULY APPEARING IN THE AUDITED BALANCE SHEET FOR ASSESSME NT YEAR 2005- 06 AND THE BALANCE CARRY FORWARD TO ASSESSMENT YEAR 2006-07 ALSO. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 64 THEREFORE THE ADDITION FOR THESE AMOUNTS OF SECURIT Y DEPOSITS RS.4,40,000/- IS DIRECTED TO BE DELETED. 54. NOW THE REMAINING AMOUNT OF RS.12,10,000/- IS THE UNSECURED LOANS. OUT OF THIS AMOUNT RS.5,10,000/- IS LOAN RECEIVED FROM ASSESSEES DAUGHTER IN LAW SMT. SARIT A CHAWLA. THE IDENTITY AND GENUINENESS OF TRANSACTION IS NOT IN DOUBT. AS REGARDS OF CREDITWORTHINESS OF SMT. SARITA CHAWLA IS CONCER NED SHE BEING PROFESSIONAL HAVING KNOWLEDGE OF COMPUTER IS HAVING REGULAR SOURCE OF INCOME FROM PROFESSIONAL SOURCES, HER CREDIBILIT Y CANNOT BE DOUBTED FOR THE LOAN AMOUNT OF RS.5,10,000/- RECEIV ED THROUGH THE BANKING CHANNEL WHICH IS DULY REFLECTED IN HER BALA NCE SHEET ALSO. NO ADDITION WAS THUS CALLED FOR U/S 68 OF THE ACT F OR THE LOAN OF RS.5,10,000/- RECEIVED FROM SMT. SARITA CHAWLA. AS REGARDS THE UNSECURED LOAN OF RS.2,00,000/- EACH RECEIVED FROM SHRI VISHAL KUMAR RAJ KUMAR AND SONIA DEVI, RS, 1,00,000/- FROM SMT. CHITRA BALWANI AND RS.2,00,000/- FROM M/S ANAND AGENCIES, RAIPUR, WE FIND THAT IN THE TAX AUDIT REPORT COMPLETE DETAILS OF THE TRANSACTIONS OF LOAN TAKEN FROM ALL THE FOUR PERSON S ARE MENTIONED. IN THE TAX AUDIT REPORT DATED 5.10.2005 IT IS STATE D THAT THE LOAN OF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 65 RS.2,00,000/- TAKEN FROM SHRI VISHAL KUMAR RAJ KUMA R AND SONIA DEVI HAVE BEEN SQUARED OFF DURING THE YEAR. THOUGH THE LOAN BEING RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THE SAME ARE BEING SQUARED OFF DURING THE YEAR OR LATER REPAID CANNOT BE THE SOLE BASIS TO EXAMINE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION BUT WHEN THE DETAILS OF UNSECURED LOAN PROVIDERS HA VE BEEN PLACED BEFORE THE LD. A.O THE BURDEN TO PROOF SHIFTS ON TH E SIDE OF REVENUE. THE ADDRESS OF ALL THE CASH CREDITORS WERE AVAILABL E ON RECORD BUT THERE WAS NO EFFORTS BY THE REVENUE TO CALL FOR INF ORMATION FROM THESE CASH CREDITORS. WE THUS LOOKING TO THE TOTAL ITY OF FACTS FIND MERIT IN THE CONTENTION OF LD. COUNSEL FOR THE ASSE SSEE AND HOLD THAT THE LD. A.O WAS NOT JUSTIFIED IN MAKING ADDITI ON FOR UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AT RS. 7, 00,000/- (RS. 1,00,000/- FROM SMT. CHITRA BALWANI, RS.2,00,000/- FROM M/S ANAND AGENCIES, RAIPUR AND RS.2,00,000/- EACH FROM SHRI VISHAL KUMAR RAJ KUMAR AND SONIA DEVI) IGNORING THE FACT T HAT ALL THE TRANSACTIONS HAVE BEEN TAKEN PLACE THROUGH BANKING CHANNEL, ADDRESS OF CASH CREDITORS WERE GIVEN IN TAX AUDIT R EPORT, LOANS WERE TAKEN BEFORE THE DATE OF SEARCH AND THE BALANCE SHE ETS WERE ALSO IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 66 FURNISHED BEFORE LD. A.O AND SOME OF THE LOAN WERE SQUARED OFF DURING THE YEAR. WE THUS IN VIEW OF ABOVE DISCUSSI ON SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION OF RS .16,50,000/- MADE ON UNSECURED LOANS AND CASH CREDITORS. GROUND NO.6 OF ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005-06 IS ALLOWED. 55. NOW WE TAKE UP GROUND NO.6 OF ASSESSEES APPEAL FO R ASSESSMENT YEAR 2006-07 IN ITA NO.441/IND/2015 THRO UGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT( A) CONFIRMING THE ADDITION OF RS.14,00,000/- MADE BY LD. A.O ON ACCOU NT OF UNSECURED SECURITY DEPOSITS. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURING THE YEAR ASSESSEE TOOK LOAN OF RS.14,00 ,000/- FROM HIS SON SHRI PREM CHAWLA. LD. A.O NOT SATISFIED WITH T HE EXPLANATION GIVEN BY THE ASSESSEE THAT SHRI PREM CHAWLA MADE PA YMENT TO M/S NEPTUNE BULK FROM HIS BANK ACCOUNT ON BEHALF OF M/S ANAND INDUSTRIES. ASSESSEE FAILED TO GET ANY RELIEF FROM LD. CIT(A) IN SECOND ROUND AND NOW THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. 56. LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 11 O F WRITTEN SUBMISSION AND ALSO THE RELEVANT COPY OF ACCOUNT OF SHRI PREM IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 67 CHAWLA PAGE NO.609 OF PAPER BOOK CONTENDING THAT DU RING MARCH 2006 SHRI PREM CHAWLA MADE VARIOUS PAYMENTS TOTALIN G TO RS.14,00,000/- TO THE SUPPLIER M/S NEPTUNE BULK FOR AND ON BEHALF OF M/S ANAND ORGANICS FROM HIS SOLE PROPRIETORYSHIP CONCERN M/S ANAND INDUSTRIES. THESE WERE GENUINE BUSINESS TRAN SACTIONS AND NO ADDITION U/S 68 OF THE ACT WAS CALLED FOR. 57. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE AUTHORITIE S. 58. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THE ASSESSEE IS IN APPEAL THROUG H GROUND NO.6 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.14,00,000/- MADE BY T HE LD. A.O BY TREATING THE LOAN OF RS.14,00,000/- AS UNEXPLAINED U/S 68 OF THE ACT. WE OBSERVE THAT SHRI PREM CHAWLA SON OF THE A SSESSEE IS RUNNING TWO PROPRIETARYSHIP CONCERN M/S ANAND PAINT S AND ANAND INDUSTRIES AND IS ALSO PARTNER OF M/S ATUL SOLVO CH EMICALS. IN THE INSTANT BUNCH OF APPEALS SHRI PREM CHAWLA IS ALSO O NE OF THE ASSESSEE IN APPEAL BEFORE THIS TRIBUNAL. SHRI PREM CHAWLA IS REGULARLY FILING RETURN OF INCOME AND HAVING SOURCE OF INCOME FROM IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 68 RUNNING BUSINESS. BOOKS OF ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT, IN OUR VIEW THE IDENTITY AND CREDITWORTHINESS OF SHRI PREM CHAWLA IS NOT IN DOUBT. AS REGARDS THE GENUINENESS OF THE TRANSACTION IS CONCERNED WE FIND THAT IN THE PRECED ING YEARS ALSO SHRI PREM CHAWLA HAS BEEN MAKING PAYMENTS FROM HIS SOLE PROPRIETORSHIP CONCERN M/S ANAND INDUSTRIES TO M/S ANAND ORGANICS OF WHICH THE ASSESSEE (LATE SMT. SUDESH CH AWLA) WAS THE PROPRIETOR. DURING ASSESSMENT YEAR 2006-07 SIMILAR TYPE OF TRANSACTION TOOK PLACE WHEREIN SUM OF RS.14,00,000/ - WAS PAID TO THE SUPPLIER OF THE ASSESSEEE M/S NEPTUNE BULK THRO UGH THE IDBI BANK ACCOUNT OF M/S ANAND INDUSTRIES. PAYMENTS OF RS.2,00,000/- ,RS.1,00,000/-, RS.3,00,000/-, RS.2,00,000/-, RS.2, 00,000/- RS.1,00,000/- AND RS.3,00,000/- WERE MADE ON 24.3.2 006, 24.03.2006, 29.03.2006, 30.03.2006, 31.03.2006, 31. 03.2006, AND 31.03.2006. COPY OF ACCOUNT OF SHRI PREM CHAWLA AL SO ASSERTS THESE FACTS. LOOKING TO THE TOTALITY OF FACT WE FI ND THAT BOTH THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DOUBTING TH E CASH CREDITOR NAMELY SHRI PREM CHAWLA. SINCE WE ARE SATISFIED WI TH THE IDENTITY AND CREDITWORTHINESS OF SHRI PREM CHAWLA AND GENUIN ENESS OF THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 69 TRANSACTION CARRIED OUT BETWEEN THE ASSESSEE AND SH RI PREM CHAWLA NO ADDITION IS CALLED FOR U/S 68 OF THE ACT AT RS. 14,00,000/- FOR THE ALLEGED RECEIPT FROM SHRI PREM CHAWLA. RELEVANT FIN DING OF LD. CIT(A) IS SET ASIDE AND GROUND NO.6 OF ASSESSEES A PPEAL FOR ASSESSMENT YEAR 2006-07 IS ALLOWED. 59. NOW WE TAKE UP GROUND NO.7 OF THE ASSESSEES APPEA L FOR ASSESSMENT YEAR 2006-07 AND GROUND NO.3 OF REVENUE S APPEAL IN ITA NO.405/IND/2015. ASSESSEE HAS CHALLENGED THE F INDING OF LD. CIT(A) WHO SUSTAINED THE ADDITION AT RS.38,86,483/ - AS AGAINST THE ADDITION OF RS.1,29,54,943/- MADE BY LD. A.O ON ACC OUNT OF SUPPRESSED SALES. ON THE OTHER HAND REVENUE HAS CH ALLENGED THE DELETION OF ADDITION OF RS.90,68,460/-. BRIEF FACT S RELATING TO ADDITION FOR SUPPRESSED SALES ARE THAT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS WHILE EXAMINING THE RECORDS LD. A.O OBSERVED THAT IN THE INTERNAL AUDIT REPORT PREPARED BY DALJIT SINGH BHATIA ASSOCIATES FIGURES OF SUNDRY DEBTORS WERE ME NTIONED AS ON 31.10.2005. ON THE BASIS OF THIS FIGURE ASSESSEES SALES WERE ESTIMATED AND ADDITION OF SUPPRESSED SALE AT RS.1,2 9,54,943/- WAS MADE. IN THE FIRST ROUND LD. CIT(A) DELETED THE AD DITION. IN THE SET IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 70 ASIDE PROCEEDINGS ON THE DIRECTION OF THIS TRIBUNAL , THE LD. A.O AGAIN ASKED INFORMATION. ASSESSEE FILED SUBMISSION S AND CONTENDED THAT QUARTER ENDING FIGURES OF SUNDRY DEB TORS CANNOT BETAKEN AS A BASIS TO COMPUTE THE SALES AND SUCH ES TIMATION IS NOT BASED ON ANY ACCOUNTING PRINCIPLE. LD. A.O WAS NOT SATISFIED, HE AGAIN MADE ADDITION OF RS.1,29,54,943/-. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND PARTIALLY SUCCEEDED AS LD. CIT(A) APPLIED GROSS PROFIT RATE OF 30% ON THE ALLEGED UNA CCOUNTED SUPPRESSED SALES OF RS.1,29,54,943/- AND SUSTAINED THE ADDITION AT RS.38,86,483/-. NOW THE ASSESSEE IS IN APPEAL AGAI NST THE ADDITION SUSTAINED AT RS.38,86,483/- AND REVENUE HAS CHALLEN GED THE ACTION OF LD. CIT(A) DELETING THE ADDITION OF RS.90,68,460 /-. 60. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE WRIT TEN SUBMISSIONS SUBMITTED THAT THE ALLEGED FIGURES OF S UNDRY DEBTORS IN THE INTERNAL AUDIT REPORT WERE MERE PROJECTIONS AND UN RECONCILED BALANCES AND THUS SHOULD NOT BE COMPARED TO THE ACT UAL FIGURES IN THE BOOKS OF ACCOUNTS, NO ENQUIRY WAS MADE FROM THE PARTIES TO FIND THE REAL BALANCE AND THE ADDITION IS BASED MERELY O N SURMISES AND CONJECTURES, REGULAR BOOKS OF ACCOUNTS ARE MAINTAIN ED AND ARE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 71 AUDITED U/S 44AB OF THE ACT BUT WHICH WERE LOST SHO RTLY AFTER THE LD. CIT(A) DELETED THE ADDITION IN THE FIRST ROUND. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT LD. CIT(A) ERRED I N NOT SUSTAINING THE ADDITION APPLYING GROSS PROFIT ON THE ALLEGED S UPPRESSED SALES EVEN WHEN NO ADDITION WAS CALLED FOR THE SUPPRESSED SALES. 61. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF LD. A.O. 62. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. BOTH THE ASSESSEE AND REVENUE AR E IN APPEAL RELATING TO THE ISSUE OF SUPPRESSED SALES. ASSESSE E THROUGH GOUNDNO. 7 HAS CHALLENGED THE ADDITION SUSTAINED BY LD. CIT(A) AT RS.38,86,489/- OUT OF 30% OF ALLEGED SUPPRESSED SAL ES AT RS.1,29,54,943/- WHEREAS REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) DELETING THE ADDITION OF RS.90,68,460/-. 63. THE ISSUE OF SUPPRESSED SALES CROPPED UP FROM THE INTERNAL AUDIT REPORT PREPARED BY DALJIT SINGH BHATIA ASSOCI ATES, CA FOR M/S ANAND ORGANICS. THIS REPORT IS PLACED AT PAGE 611 TO 620 OF THE PAPER BOOK. ON PAGE 611 WHICH IS THE LETTER HEAD OF THE INTERNAL AUDITOR FOLLOWING IS MENTIONED:- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 72 WITH REFERENCE TO YOUR LETTER DATED 25.11.2005 REG ARDING RECONCILIATION OF OPENING AND CLOSING BALANCE OF GROUP DEBTORS AND GR OUP CREDITORS WITH YOUR RECORDS. THIS IS TO INFORM YOU THAT AS PER OU R VERBAL DISCUSSION WE SUBMIT INTERNAL AUDIT REPORT FOR THE PERIOD JUNE 20 05 TO OCTOBER 2005 AND CHECKED DAY TO DAY TRANSACTION DURING THE ABOVE PER IOD WITHOUT RECONCILING THE ACTUAL BALANCE OF GROUP DEBTORS AND CREDITORS BEFORE THE SAID DATE. THUS THERE IS A DIFFERENCE IN OPENING C LOSING BALANCE OF GROUP DEBTORS AND GROUP CREDITORS WITH YOUR RECORDS. ALONG WITH THE ABOVE REMARKS THE INTERNAL AUDITOR HAS ATTACHED SOME SHEETS WHICH ARE CLOSING BALANCE OF S UNDRY DEBTORS DURING THE PERIOD 1.4.2005 TO 31.10.2005. LD. A.O WHILE EXAMINING THIS REPORT WAS OF THE VIEW THAT IF THE DEBTORS SHO WN IN THE ALLEGED REPORT ARE TAKEN AS THE BASIS, SALES FOR THE YEAR W ILL BE HIGHER THAN THE SALES SHOWN BY THE ASSESSEE. HE THUS COMPUTED T HE SUPPRESSED SALES AT RS.1,29,54,943/-. LD. CIT(A) HOWEVER SUST AINED THE ADDITION TO 30% OF THE SUPPRESSED SALES RELYING ON VARIOUS JUDGMENTS INCLUDING THE HONBLE HIGH COURT OF GUJAR AT IN THE CASE OF CIT V/S PRESIDENT INDUSTRIES (2002) 258 ITR 654 (GU J. ). 64. BEFORE US LD. COUNSEL FOR THE ASSESSEE CONTENDED T HAT LD. A.O HAS COMPUTED THE SUPPRESSED SALES ON SURMISES AND C ONJECTURES AND FIGURE IN THE REPORT WERE MERE PROJECTIONS AND UN RECONCILED IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 73 BALANCE. IN THE FIRST ROUND LD. CIT(A) DELETED THE ADDITION AND THIS TRIBUNAL LATER ON SET ASIDE THE ISSUE FOR AFRESH AD JUDICATION BY THE LD. A.O. AFTER THE FIRST ROUND BEFORE LD. CIT(A) B OOKS OF ACCOUNTS WERE LOST. 65 . ON PERUSAL OF THE INTERNAL AUDIT REPORT AND THE A TTACHED SHEETS WHICH ARE THE PRINT OUTS OF TALLY SOFTWARE ( SOFTWARE USED TO PREPARE BOOKS OF ACCOUNTS ON COMPUTER),THE LIST OF SUNDRY DEBTORS ATTACHED WITH THE AUDIT REPORT ARE NOT PREPARED IN EXCEL SHEET OR TYPED SPECIALLY FOR OTHER PURPOSE WHICH CAN BE TERM ED AS PROJECTED LIST. THE PRINT OUTS TAKEN BY THE INTERNAL AUDITOR ARE FROM THE TALLY SOFTWARE WHICH IS SHOWING THE BALANCE ON THE CLOSI NG DATE OF 31.10.2005 AFTER CONSIDERING THE TRANSACTIONS ENTER ED INTO DURING THE PERIOD COMMENCING 1.4.2005. THEREFORE THIS CON TENTION OF THE ASSESSEE THAT THE FIGURES ARE MERE PROJECTIONS HAVE NO MERITS. APART FROM THIS SUBMISSION THAT THE ADDITION MADE BY THE LD. A.O ARE ON ESTIMATED BASIS. LD. COUNSEL FOR THE ASSESSEE FAIL ED TO REBUT THE FACT WITH PARALLEL WORKING OF TRADE CYCLE OF SUNDRY DEBTORS AND ITS COMPARISON WITH THE TOTAL SALES FOR THE YEAR. THOU GH THERE IS NO CONCRETE FINDING BY LD. A.O BUT SO IS THE CASE THAT ASSESSEE HAS ALSO IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 74 FAILED TO FULFILL THE BURDEN OF PROVING BY SHOWING THAT THERE WAS NO ELEMENT OF SUPPRESSED SALES, WE THEREFORE TO MEET T HE END OF JUSTICE AND BEING FAIR TO BOTH THE PARTIES SUSTAINED THE AD DITION BY APPLYING NET PROFIT OF 5% ON THE ALLEGED SUPPRESSED SALES OF RS.1,29,54,943/- AND THUS SUSTAIN THE ADDITION TO RS.6,47,747/- AND PARTLY ALLOW GROUND NO.7OF THE ASSESSEES APPEAL AND GROUND NO.3 OF THE REVENUES APPEAL FOR ASSESSMENT YEAR 2006-07. 66. NOW WE TAKE UP GROUND NO.8 OF THE ASSESSEES APPEA L FOR ASSESSMENT YEAR 2006-07 IN ITA NO.441/IND/2015 THRO UGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT( A) CONFIRMING THE ADDITION OF RS.24,39,857/- ON ACCOUNT OF DIFFERENCE IN STOCK AS PER THE COMMERCIAL TAX DEPARTMENT AND AS PER THE BOOKS OF ACCOUNTS. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3), THE LD. A.O NOTICED THAT THE COMMERCIAL TAX DEPARTMENT OF THE STATE GOV ERNMENT HAD CONDUCTED A SURVEY AT THE FACTORY OF M/S ANAND ORGA NICS AND AT THE RESIDENCE OF SHRI PREM CHAWLA ON 15.12.2005. A STOCK INVENTORY ON PHYSICAL VERIFICATION OF THE STOCK FOU ND AT THE FACTORY WAS PREPARED BY THEM AS ON 15.12.2005 AS UNDER :- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 75 (I) FINISHED GOODS RS. 14,24,200/- (II) RAW MATERIAL & PACKING MATERIAL RS. 32,30,97 6/- TOTAL RS.46,55,176/- WHEREAS AS PER NO.344 OF BF 44 IMPOUNDED DURING TH E SURVEY, THE STOCK POSITION OF M/S ANAND ORGANICS AS ON 15.12.2005 WAS RECORDED AS UNDER:- (I) FINISHED GOODS RS. 3,65,123/- (II) RAW MATERIAL RS. 9,46,600/- (III)PACKING MATERIAL RS. 9,03,614/- TOTAL RS.22,15,339/- THUS, THERE WAS EXCESS STOCK FOUND ON THE DATE OF SURVEY ON 15.12.2005 TO THE EXTENT OF RS.24,39,857/- (RS.46,5 5,176 RS.22,15,339). THE APPELLANT WAS ASKED TO EXPLAIN THE DIFFERENCE. BUT THE AO STATED THAT THE APPELLANT DID NOT CLARIF Y AND EXPLAIN THE DIFFERENCE. THEREFORE, THE AO MADE ADDITION OF RS. 24,39,857/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE EXCESS STO CK FOUND. THE LD. CIT(A) HAD DELETED THE ADDITION. BUT THE HONB LE ITAT SET ASIDE THE ASSESSMENT TO THE FILE OF THE A.O. DURING SET ASIDE PROCEEDINGS LD. AO ASKED THE APPELLANT TO EXPLAIN THE DIFFERENC E AND SHOW IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 76 CAUSE AS TO WHY THE ADDITION OF RS.24,39,857/- ON A CCOUNT OF EXCESS STOCK SHOULD NOT BE MADE. IT WAS SUBMITTED THAT THE APPELLANT USED TO PREPARE SHEET OF STOCK TO MONITOR THE ACTIVITY AT THE FLOOR LEVEL AND, THEREFORE, THE SUMMARY SHEET O N PAGE 344 OF BF 44 WAS NOT CONTAINING THE ACTUAL STOCK. THE STOCK W AS ALSO KEPT IN TANKS, WHICH WAS NOT INCLUDED IN THE STOCK SUMMARY. IT WAS ALSO CONTENDED THAT THE STOCK TAKEN BY THE COMMERCIAL TA X DEPARTMENT AT RS.46,55,176/- WAS NOT TAKEN BY SCIENTIFIC APPRO ACH AND BASED ONLY ON VISUAL ESTIMATION. IT WAS SUBMITTED THAT A S PER EXCISE RECORDS MAINTAINED BY THE APPELLANT, THE CLOSING ST OCK AS ON 15.12.2005 WAS RS.43,89,893.63 WHICH WAS ALSO MONIT ORED BY EXCISE DEPARTMENT. BUT THE LD. A.O DID NOT ACCEPT THE SUBMISSION OF THE APPELLANT STATING THAT THE APPELLANT COULD N OT GIVE SATISFACTORY EXPLANATION AND ITEM WISE STOCK WAS NO T TALLIED. THEREFORE, THE AO MADE ADDITION OF RS.24,39,857/- O N ACCOUNT OF UNEXPLAINED INVESTMENT IN EXCESS STOCK FOUND. IN T HE APPELLATE PROCEEDINGS BEFORE LD. CIT(A) ASSESSEE MADE FOLLOWI NG SUBMISSIONS:- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 77 11.3 IN APPELLATE PROCEEDINGS, THE APPELLANT SUBMIT TED AS UNDER :- 'IT IS SUBMITTED THAT IN THE ORIGINAL ASSESSMENT AD DITION OF RS.24, 39, 8571- WAS MADE BEING DIFFERENCE IN STOCK AS PER T HE COMMERCIAL TAX DEPARTMENT AND THE BOOKS OF ACCOUNTS. IN THIS REFE RENCE, WE SUBMITS AS UNDER: SIR, THE UNIT OF THE ASSESSEE IS AN EXCISABLE UNIT AND BEING MONITORED BY THE EXCISE DEPARTMENT ON DAY TO DAY BASIS. THE SUMMARY SHEET MENTIONED BY THE ASSESSING OFFIC ER AS PAGE NO. 344 OF BF 44 IS NOT A COMPLETE STOCK. THE ASSESSEE USE TO PRE PARE THIS SHEET TO MONITOR THE ACTIVITY AT SHOP FLOOR ONLY. THE ST OCK BEING KEPT AT TANKS ARE NOT INCLUDED IN THE SAID SUMMARY SHEET. FURTHE R WHATEVER THE STOCK RECORDED IN THE SUMMARY SHEET (AT RS.2215339) IS N OT IN EXCESS OF THE STOCK AS PER EXCISE RECORDS. THEREFORE NO ADDITIO N BEING WARRANTED ON THIS GROUND. STOCK TAKEN BY THE COMMERCIAL TAX, DEPARTMENT AT RS. 4655176 IS' NOT BEING TAKEN BY SCIENTIFIC APPROACH. IT WAS ON LY A VISUAL ESTIMATION, AS IS EVIDENT FROM THE DETAILED SHEET ENCLOSED. AS THE ASSESSEE DEALS IN THE CHEMICALS AND SOLVENTS, THE. STOCK IS BEING TAKEN. BY DIP METHOD. THE APPROACH OF COMMERCIAL TAX DEPARTMENT WAS VERY CASUAL. AS PER THE EXCISE RECORDS MAINTAINED BY THE ASSESS EE CLOSING STOCK AS ON 15.12.2005 THE STOCK WAS RS. 4389893.63. TH E SAID EXCISE RECORDS-ARE BEING MONITORED BY THE EXCISE DEPARTM ENT ON REGULAR INTERVAL. COPY OF ALL THE RELEVANT DOCUMENTS ARE ENCLOSED HEREWITH AS ANNEXURE-II. SIR, FROM ABOVE, IT IS CLEAR THAT THE ASSESSEE SHO WN THE CORRECT STOCK WHICH' IS TALLIED WITH THE EXCISE RECORDS AL SO AND THE STOCK TAKEN BY THE COMMERCIAL TAX DEPARTMENT IS THE DIS PUTED ONE. HENCE, THE ACTUAL STOCK SHOWN BY THE ASSESSEE AS PER BOOKS OF ACCOUNTS MAY KINDLY BE ACCEPTED AS CORRECT. ' HOWEVER LD. CIT WAS NOT SATISFIED AND CONFIRMED T HE ADDITION FOR EXCESS STOCK OBSERVING AS FOLLOWS:- 11.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APP ELLANT AND FACTS OF THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 78 CASE. IT IS NOTICED THAT THE COMMERCIAL TAX DEPARTM ENT HAD TAKEN PROPER INVENTORY, ITEM WISE AND VALUE WISE WHICH WAS DULY SIGNED BY SHRI PREM CHAWLA, WHO WAS LOOKING AFTER THE AFFAIRS OF M/S AN AND ORGANICS. THUS, THE CONTENTION OF THE APPELLANT THAT COMMERCIAL TAX DEP ARTMENT HAD NOT PROPERLY TAKEN THE STOCK INVENTORY IS NOT FOUND ACCEPTABLE. THE' APPELLANT ALSO COULD NOT EXPLAIN THE DIFFERENCE BEFORE THE COMMERCIAL TAX AU THORITIES. THEY HAVE ALSO IMPOUNDED CERTAIN DOCUMENTS. THE APPELLANT ALSO FAI LED TO FURNISH A COPY OF ASSESSMENT ORDER MADE BY THE COMMERCIAL TAX DEPARTM ENT AFTER CONDUCTING THE SURVEY. PAGE NO. 344 OF BF 44 WAS PREPARED IN THE N ORMAL COURSE OF BUSINESS AND WAS REFLECTING THE POSITION OF STOCK AS PER BO OKS AS ON 15.12.2005. THE APPELLANT ALSO FAILED TO EXPLAIN THE DIFFERENCE WIT H ANY COGENT AND UN- IMPEACHABLE EVIDENCE AND FURNISHED A GENERAL EXPLAN ATION. . SINCE, THE APPELLANT FAILED TO SATISFACTORILY EXPLAIN THE EXCESS STOCK F OUND BY THE COMMERCIAL TAX DEPARTMENT AS ON 15.12.2005, THE AO WAS JUSTIFIED I N MAKING ADDITION OF RS.24,39,857/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE EXCESS STOCK FOUND. HENCE, THE ADDITION OFRS.24,39,8S7/,. IS CON FIRMED. 67. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 68 . LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMI SSIONS MADE BEFORE LD. CIT(A) AND STRESSED ON THE FACT THAT SIN CE THE ASSESSEE IS DEALING IN EXCISABLE GOODS AND MONITORED BY EXCISE DEPARTMENT ON DAY TO DAY BASIS NO CASE OF EXCESSIVE STOCK SHOULD HAVE BEEN MADE. HE ALSO SUBMITTED THAT THE COMMERCIAL TAX DEPARTMEN T HAVE NOT ADOPTED A SCIENTIFIC APPROACH BUT WAS MERELY A VISU AL ESTIMATION. AN ALTERNATIVE SUBMISSION WAS ALSO MADE THAT IN ANY CASE OF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 79 INVESTIGATION IN UNACCOUNTED STOCK IS EXPLAINED BY THE UNACCOUNTED SALE OF RS.1,29,54,943/-. 69. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 70. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.8 FOR ASSESSME NT YEAR 2006- 07 ASSESSEE HAS CHALLENGED THE ADDITION FOR EXCESS STOCK OF RS.24,39,857/-. AS DISCUSSED ABOVE THAT THE ASSESS EE WAS SUBJECTED TO SURVEY BY COMMERCIAL TAX DEPARTMENT ( IN SHORT CTD). AS PER THE INVENTORY PREPARED BY CTD STOCK WAS VALUED AT RS.46,55,176/- AND STOCK AS PER BOOKS AS ON 15.12.2 005 WAS RS. 22,15,339/-. ONE OF THE PERSON LOOKING AFTER THE B USINESS NAMELY SHRI PREM CHAWLA ACCEPTED THE WORKING OF CTD SHOWIN G EXCESS STOCK OF RS.24,39,857/-. NO DOCUMENTS IN THE FORM OF SALES TAX ASSESSMENT ORDERS WERE FILED BEFORE THE LOWER AUTHO RITIES ABOUT THE FATE OF THE SURVEY CONDUCTED AT ASSESSEES BUSINESS PREMISES. EVEN BEFORE US NO INFORMATION HAS BEEN FILED TO SHOW ABO UT THE FATE OF SURVEY PROCEEDINGS OF CTD. LD. COUNSEL FOR THE ASS ESSEE HAS MAINLY REFERRED TO THE PROCESS OF PHYSICAL VERIFICA TION ADOPTED BY IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 80 CTD BUT HAS NOT FILED ANY EVIDENCE TO SHOW THAT ASS ESSEE HAS CHALLENGED THE ALLEGED EXCESS STOCK BEFORE THE ASS ESSING AUTHORITY OR ANY OTHER APPELLATE AUTHORITY OF THE COMMERCIAL TAX DEPARTMENT. ALTERNATE SUBMISSION OF THE ASSESSEE THAT THE INVE STIGATION IN UNACCOUNTED STOCK IS EXCESSIVELY ADDED BY UNACCOUNT ED SALES OF RS.1,29,54,943/- AND IT SHOWS THAT ASSESSEE HAS NO MATERIAL EVIDENCE TO REBUT THE EXCESS STOCK FOUND BY CTD. H OWEVER THE FACT ALSO REMAINS THAT THE ASSESSEE IS REGISTERED WITH E XCISE DEPARTMENT AND IS ALSO CLAIMED TO HAVE MAINTAINED REGULAR BOOK S. LOWER AUTHORITIES HAVE NOT CALLED FOR SUCH RECORDS TO FIN D OUT QUANTITATIVE STOCK SHOWN IN THOSE RECORDS. WHILE ADJUDICATING T HE ISSUE OF SUPPRESSED SALES WE SUSTAINED THE ADDITION OF RS.6, 47,747/- @3% OF THE ALLEGED SUPPRESSED SALES AMOUNT. 71. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND TOTALITY OF THE FACTS HOLD THAT SINCE WE HAVE P ARTLY SUSTAINED ADDITION APPLYING NET PROFIT RATE OF 5% ON DISCLOSE D TURNOVER IN ASSESSMENT YEAR 2000-01 TO 2006-07 AND ALSO 5% OF S UPPRESSED SALES FOR ASSESSMENT YEAR 2006-07 ASSESSEE DESERVES TELESCOPING BENEFIT AND THE ADDITION CONFIRMED BY US SHALL BE S UFFICIENT TO COVER IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 81 UP THE ADDITION OF EXCESS STOCK OF RS.24,39,857/-. WE ACCORDINGLY ORDER SO AND DELETE THE ADDITION OF RS. 24,39,857/- AND ALLOW THE ASSESSEES GROUND NO.8 FOR ASSESSMENT YEAR 2006-07 IN ITA NO.441/IND/2015. 72. NOW WE TAKE UP GROUND NO.9 CHALLENGING THE ADDITIO N OF RS.2,85,709/- MADE ON THE BASIS OF LOOSE PAPERS FOU ND DURING THE COURSE OF SEARCH. ASSESSEE HAS NOT CHALLENGED THE G ENUINENESS OF THE LOOSE PAPERS AND THE ENTRIES CONTAINED THEREIN. LOOSE PAPERS SHOWS SOME EXPENSES INCURRED BY THE ASSESSEE AT RS. 2,85,709/-BUT THE PURPOSE OF EXPENSES AND THE SAME BEING INCURRED FOR BUSINESS HAS NOT BEEN PROVED AT ANY STAGE BY THE ASSESSEE. BEFORE US ALSO ASSESSEE HAS GIVEN GENERAL STATEMENT WHICH IS NOT S UFFICIENT TO PROVE THAT RS.2,85,709/- WERE EXPENSES INCURRED IN THE REGULAR COURSE OF BUSINESS. SINCE THE DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH THE ASSESSEE IS DUTY BOUND TO EXPL AIN THE CONTENTS THEREIN WITH SUPPORTING EVIDENCES. SINCE THE ASSESS EE FAILED TO DO SO WE FIND NO FORCE IN THE CONTENTION OF THE ASSESSEE AND THUS CONFIRM THE ADDITION OF RS.2,85,709/- MADE ON THE BASIS OF LOOSE PAPERS. IN IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 82 THE RESULT GROUND NO.9 OF THE ASSESSEE FOR ASSESSME NT YEQR 2006- 07 IN ITA NO.441/IND/2019 IS DISMISSED. 73. REMAINING GROUNDS RAISED BY THE ASSESSEE LATE SMT. SUDESH CHAWLA THROUGH LEGAL HEIR SHRI PREM CHAWLA IN THE A PPEALS FOR ASSESSMENT YEARS 2000-01 TO 2006-07 ARE CONSEQUENTI AL, PREMATURE AND GENERAL IN NATURE RELATING TO THE CHARGING OF INTE REST U/S 234A, 234B & 234C, INITIATION OF PENALTY PROCEEDINGS AND THUS NE EDS NO ADJUDICATION.. 74. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE PREM CHAWLA ARE PARTLY ALLOWED. 75. NOW WE TAKE UP REMAINING GROUND NO.2 RAISED BY REV ENUE IN THE CASE OF ASSESSEE LATE SMT. SUDESH CHAWLA FOR ASSESS MENT YEAR 2006-07 (ITA NO.451/IND/2015) CHALLENGING THE FINDING OF LD . CIT(A) DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CAPITAL ADDI TION MADE BY LD. A.O AT RS.15,32,527/-. 76. BRIEF FACTS RELATING TO THIS GROUND ARE THAT THERE WERE CREDITS IN THE CAPITAL ACCOUNT OF THE ASSESSEE AT RS.15,32,527 /- WHICH WERE CLAIMED TO BE SALE PROCEEDS FROM SALE OF EQUITY SHA RES. IN THE FIRST ROUND LD.A.O MADE ADDITION TREATING THEM AS UNVERIF IABLE BUT LD. CIT(A) HAS ALLOWED AND DELETED THE ADDITION. IN THE SET ASIDE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 83 PROCEEDINGS BY THIS TRIBUNAL AGAIN THE LD. A.O CALL ED FOR THE INFORMATION AND SIMILAR SUBMISSIONS WERE MADE BY TH E ASSESSEE ABOUT SALE OF SHARES THROUGH SHARE BROKER BUT SAME WERE NOT APPRECIATED BY THE LD. A.O AND AGAIN ADDITION OF RS .15,32,527/- WAS MADE. THEREAFTER ASSESSEE PREFERRED APPEAL BEF ORE LD. CIT(A) AND SUCCEEDED AS LD. CIT(A) ON OBSERVING THAT THE A SSESSEE HAS SHOWN LONG TERM CAPITAL GAIN IN THE INCOME TAX RETU RN AND SALE CONSIDERATION OF RS.15,32,527/- WAS CREDITED TO CAP ITAL ACCOUNT ALLOWED THE CLAIM OF ASSESSEE AND DELETED THE ADDIT ION. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 77. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. A.O. 78. LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE FINDING OF LD. CIT(A) AND ALSO THE SUBMISSIONS MADE BEFORE HIM. 79. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH IT. RE VENUE HAS CHALLENGED THE FINDING OF LD. CIT(A) DELETING THE A DDITION OF RS.16,52,527/- MADE BY THE LD. A.O FOR UNVERIFIABLE CAPITAL ADDITION DURING THE YEAR. WE OBSERVE THAT DURING T HE YEAR UNDER IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 84 APPEAL ASSESSEE CLAIMED TO HAVE RECEIVED SALE CONSI DERATION OF RS.15,32,167/- FROM SALE OF EQUITY SHARES THROUGH N IRMAN SHARE BROKER. FOLLOWING AMOUNTS WERE RECEIVED :- DATE PARTICULARS AMOUNT (RS.) 5.12.2005 CHQ NO. 000271 10,95,795 20.12.2005 CHQ NO. 000375 4,00,000/ - 27.12.2005 CHQ N O. 000433 36,372/ - TOTAL 15,32,167/ - 80. ABOVE STATED AMOUNT IS SHOWN TO HAVE BEEN RECEIVED AS SALE CONSIDERATION FOR SALE OF EQUITY SHARES. THE ENTRI ES ARE REFLECTED IN THE BANK STATEMENT. LD. CIT(A) HAS VERIFIED WITH T HE ABOVE STATED AMOUNT OF SALE CONSIDERATION AT RS.15,32,167/-FOR W HICH LONG TERM CAPITAL GAIN U/S 10(38) IS CLAIMED EXEMPT BY THE AS SESSEE. LD. DEPARTMENTAL REPRESENTATIVE FAILED TO BRING ANY CON TRARY MATERIAL TO DISAPPROVE THE CLAIM MADE BY THE ASSESSEE AS WEL L AS FINDING OF LD. CIT(A). WE THUS FIND NO REASONS TO INTERFERE I N THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.15,36,167/-. AC CORDINGLY GROUND NO.3 OF THE REVENUE FOR ASSESSMENT YEAR 2006-07 IN ITA NO.451/IND/2015 AS DISMISSED. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 85 81. IN THE RESULT REVENUES APPEAL FOR ASSESSMENT YEAR 2006-07 IS PARTLY ALLOWED. 82. NOW WE TAKE UP THE REMAINING GROUNDS OF THE ASSESS EE NAMELY SHRI PREM CHAWLA FOR ASSESSMENT YEAR 2000-01 TO 200 6-07. 83. THE COMMON ISSUE RELATING TO UNSECURED LOAN/SECURI TY DEPOSITS CONFIRMED BY LD. CIT(A) AMOUNTING TO RS.8, 74,400/-, RS.4,00,000/-, RS.2,95,000/- AND RS.1,00,000/- PERT AINING TO ASSESSMENT YEAR 2000-01, 2001-02, 2005-06 AND 2006- 07 ARE RAISED BY THE ASSESSEE IN GROUND NO.5 (ASSESSMENT Y EAR 2000-01), GROUND NO.5 (ASSESSMENT YEAR 2001-02), GROUND NO.5 (ASSESSMENT YEAR 2005-06) AND GROUND NO.6 (ASSESSME NT YEAR 2006-07) RESPECTIVELY. 84. BRIEF FACTS IN COMMON ARE THAT THE ASSESSEE HAS SH OWN AMOUNT RECEIVED AS SECURITY DEPOSIT FROM DEALERS. LD. A.O WAS NOT SATISFIED THAT THE GENUINENESS OF THE TRANSACTIONS, HE THUS MADE THE ADDITION. ASSESSEE FAILED TO GET ANY RELIEF FROM L D. CIT9A). NOW THE MATTER IS BEFORE THIS TRIBUNAL. 85. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REF ERRING TO THE FOLLOWING WRITTEN SUBMISSIONS:- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 86 IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE APPELLA NT FAILED TO PROVE THE GENUINENESS OF THE UNSECURED LOAN/SECURITY DEPOSITS WHICH WAS RECEIVED FROM FOLLOWING PERSONS IN THE RELEVANT ASSESSMENT Y EAR AS UNDER:- A.Y NAME AMOUNT REMARKS 2000 - 01 2001- 02 SECURITY DEPOSIT FROM 17 PARTIES (REFER CIT(A) ORDER PG NO.20- 21) 8,74,400/ - 1. SECURITY DEPOSITS ARE RECEIVED FROM CUSTOMERS/DEALERS TO WHOM GOODS ARE REGULARLY SUPPLIED, THE BALANCE IS ADJUSTED IN SUCCEEDING YEARS OUT OF SALES. 2. THE DEPOSITS RECEIVED ARE IN NATURE OF TRADING LIABILITY AND NOT AN UNSECURED LOAN 8,74,400 ASHA DEVI, UDAYPUR 2,00,000/ - 1. THE APPELLANT RECEIVED SECURITY DEPOSIT WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. 2. THIS ACCOUNT WAS SETTLED INTO ACCOUNT OF HER CONCERN- NEW RAMESH PAINTS, UDAYPUR, AGAINST THE GOODS SOLD IN F.Y 2001-02 (PB 188) KRISHNA AGENCIES, KOTA 2,00,000/ - 1. THE APPELLANT RECEIVED SECURITY DEPOSIT WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. 2. THIS AMOUNT WAS SETTLED AGAINST THE GOODS SOLD THEM IN F.Y 2001- 02, THE ACCOUNT STATEMENT IS ON (PB 190-192) 4,00,000/ - 2005 - 06 DEEP COLOUR & CHEMICALS, KOTA ANAND AGENCIES, GONDIA 2,00,000/ - 50,000/- 40,000/- 1. THE APPELLANT MAINTAINS PROPER BOOKS OF ACCOUNTS, WHICH ARE AUDITED U/S 44AB OF THE ACT. 2. THE BALANCE IS APPEARING IN THE BALANCE SHEET ALSO. 3. THE MONEY IS ADVANCE RECEIVED FROM M/S ANAND AGENCIES WHO WAS ACTING AS DEALER OF INDORE REGION IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 87 PARVINDER SINGH 5,000/ - 2,95,000/- DATE AMOUNT 21.10.2004 50,000 01.11.2004 40,000 2006 - 07 ANAND AGENCIES, INDORE 1,00,000 / - 1. THIS AMOUNT IS APPEARING IN THE LIST OF SUNDRY CREDITORS AND NOT SECURITY DEPOSITS. REFER PB 601. 2. THERE IS NO FRESH ADDITION TO THE BALANCE, RS.1,00,000 IS APPEARING IN BOTH THE SCHEDULES AS ON 31 ST MARCH 2006 ON PB 602 AND THE SCHEDULE AS ON MARCH 2005 ON PB 601. 86. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 87. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. THE COMMON ISSUE RAISED BY THE A SSESSEE NAMED SHRI PREM CHAWLA FOR ASSESSMENT YEARS 2000-01, 2001 -02, 2005- 06 AND 2006-07 RELATES TO ADDITION OF UNEXPLAINED S ECURITY DEPOSITS CONFIRMED BY LD. CIT(A) AT RS. 8,74,400/, RS. 4,00, 000/-, RS. 2,95,000/- AND RS. 1,00,000/- RESPECTIVELY. WE OBS ERVE THAT THE ASSESSEE IS INTO THE BUSINESS OF PAINTS AND THINNER S AND HAS BEEN CONSISTENTLY FILING INCOME TAX RETURNS SUPPORTED WI TH AUDITED FINANCIAL STATEMENTS AS AND WHERE APPLICABLE. ASSE SSEE IN THE DUE COURSE OF BUSINESS APPOINTS DEALERS IN VARIOUS PART S OF THE COUNTRY FOR THE PURPOSE OF EFFECTING SALE. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 88 88. FOR ASSESSMENT YEAR 2000-01 SECURITY DEPOSIT OF RS.8,74,400/- HAS BEEN RECEIVED FROM 17 PARTIES WHO ARE CUSTOMERS /DEALERS AND AS CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THESE SECURITY DEPOSITS ARE ADJUSTED AGAINST THE SA LES IN SUCCEEDING YEARS. THESE DEPOSITS ARE NOT UNSECURED LOAN BUT TR ADING LIABILITY. THE ADDITION MADE BY THE LD. A.O WERE SUBSEQUENTLY CONFIRMED BY LD. CIT(A) ON THE BASIS OF GENERAL OBSERVATION WITH OUT PLACING ANY MATERIAL ON RECORD TO SUPPORT THE ADDITION. WE FIN D THAT THESE SECURITY DEPOSIT OF RS.8,74,400/- RECEIVED FROM 17 PARTIES WERE DULY REFLECTED IN THE BALANCE SHEET BEFORE THE CONDUCTIN G OF SEARCH AND IN ABSENCE OF ANY CONTRARY MATERIAL FIND NO REASON TO CONFIRM THE ADDITION FOR UNEXPLAINED SECURITY DEPOSIT AS IN OUR VIEW THESE WERE RECEIVED AS NORMAL PART OF BUSINESS. THUS THE ADDI TION OF RS.8,74,400/- FOR ASSESSMENT YEAR 2000-01 FOR UNEXP LAINED SECURITY DEPOSIT STANDS DELETED. GROUND NO.5 FOR AS SESSMENT YEAR 2000-01 IS ALLOWED. 89. AS REGARDS SECURITY DEPOSIT OF RS. 2,00,000/- EAC H RECEIVED FROM ASHA DEVI, UDAYPUR AND KRISHNA AGENCIES, KOTA DURING ASSESSMENT YEAR 2001-02 WE NOTE THAT THE SECURITY D EPOSITS WERE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 89 RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. SECURITY D EPOSIT OF ASHA DEVI, UDAYPUR WAS SETTLED AGAINST THE GOOD SOLD IN HER CONCERN NEW RAMESH PAINTS, UDAYPUR DURING FINANCIAL YEAR 2001-0 2 AND THE SAME WAS THE CASE OF KRISHNA AGENCIES, KOTA. LEDGER ACCOUNTS PLACED AT PAGE 188, 190, 192 SUPPORTS THESE FACTS. REVENUE HAS ALSO NOT PLACED ANY CONTRARY EVIDENCE AGAINST THE A SSESSEE. WE THUS TAKING A CONSISTENT VIEW AS DISCUSSED IN PRECEDING PARAS FIND NO REASONS TO DOUBT THE GENUINENESS OF SECURITY DEPOSI TS AND RELEVANT FINDING OF LD. CIT(A) IS SET ASIDE AND GROUND NO.5 FOR ASSESSMENT YEAR 2001-02 STANDS ALLOWED. 90. AS REGARDS SECURITY DEPOSIT OF RS.2,95,000/- RECEI VED DURING ASSESSMENT YEAR 2005-06 IS CONCERNED THE SAME WAS R ECEIVED FROM FOLLOWING 3 PARTIES :- (I) DEEP COLOUR& CHEMICALS, KOTA RS.2,00,000/- (II) ANAND AGENCIES, GONDIA RS. 90,000/- (III) PARVINDER SINGH RS. 5,000/- 91. ON PERUSAL OF THE RECORDS WE FIND THAT THE ASSESSE E HAS ACHIEVED GROSS TURNOVER DURING THE YEAR UNDER APPEA L AT RS.3,14,20,001/-WHICH HAS ALMOST DOUBLED AS COMPARE D TO IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 90 TURNOVER OF PRECEDING YEAR. AUDIT REPORT U/S44AB O F THE ACT STANDS DULY SUBMITTED ON DUE DATES AND THE SECURITY DEPOSI TS ARE APPEARING IN THE AUDITED BALANCE SHEET. PAYMENTS H AVE BEEN RECEIVED THROUGH BANKING CHANNEL AND SECURITY DEPOS ITS ARE RECEIVED FROM THE DEALERS AND IN CASE PAYMENT IS NO T RECEIVED OR DEALERSHIP IS CANCELLED, THE SECURITY DEPOSIT IS AD JUSTED AGAINST THE SALES. THE ABOVE SAID TRANSACTIONS HAVE BEEN CARRIE D OUT IN NORMAL COURSE OF BUSINESS AND IN ABSENCE OF ANY DOCUMENTAR Y EVIDENCE TO QUESTION THE SAME MAKING ADDITION FOR UNEXPLAINED S ECURITY DEPOSIT AT RS. 2,95,000/-BY THE LD. A.O AND SUBSEQUENTLY CONFIRMED BY LD. CIT(A) GIVING GENERAL REMARKS IS NOT JUSTIFIED. THUS THE ADDITIO N FOR UNEXPLAINED SECURITY AT RS.2,95,000/- STANDS DELETED. GROUND N O.5 FOR ASSESSMENT YEAR 2005-06 IS ALLOWED. 92. AS REGARDS UNEXPLAINED SECURITY DEPOSIT OF RS.1,00 ,000/- IN ASSESSMENT YEAR 2006-07 THIS WAS RECEIVED FROM ANAN D AGENCIES, INDORE. AS APPEARING IN PAPER BOOK PAGE 601 THE AL LEGED AMOUNT IS APPEARING IN THE LIST OF SUNDRY CREDITOR AND NOT AS SECURITY DEPOSIT. THIS AMOUNT IS NOT A FRESH ADDITION DURING THE YEAR AND IS THE BROUGHT FORWARD BALANCE FROM ASSESSMENT YEAR 2005-0 6. THEREFORE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 91 NO ADDITION WAS CALLED FOR THIS AMOUNT OF RS.1,00,0 00/- AND THE SAME DESERVES TO BE DELETED. GROUND NO.6 FOR ASSES SMENT YEAR 2006-07 IS ALLOWED. 93. NOW WE TAKE UP NEXT COMMON ISSUE RELATING TO ADDIT ION IN CAPITAL ACCOUNT AT RS. 1,77,100/-, RS.2,12,520/- AN D RS.2,12,520/- FOR ASSESSMENT YEAR 2003-04, 2004-05 AND 2005-06 RE SPECTIVELY. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS LD. A.O WHILE EXAMINING CAPITAL ACCOUNTS ATTACHED WITH THE BALANCE SHEET OF THE PARTNERSHIP CONCERN COME ACROSS CERTAI N ADDITIONS MADE IN THE CAPITAL ACCOUNT. ASSESSEE MADE NECESSAR Y SUBMISSIONS BUT THE LD. A.O IN THE SECOND ROUND AGAIN MADE THE ADDITIONS. IN THE APPEAL BEFORE LD.CIT(A) ASSESSEE GAVE PART RELI EF. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 94. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITT ED THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION IGNORING TH E FACT THAT THE IMPUGNED AMOUNTS WAS PAID FROM THE PERSONAL BANK AC COUNT OF THE ASSESSEE HELD WITH PUNJAB NATIONAL BANK. 95. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 92 96. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. ASSESSEES COMMON GRIEVANCE THROU GH GROUND NO.5 FOR ASSESSMENT YEAR 2003-04, GROUND NO.5 FOR A SSESSMENT YEAR 2004-05 AND GROUND NO.7 FOR ASSESSMENT YEAR 20 06-07 RELATES TO ADDITION IN CAPITAL ACCOUNT TAKEN BY LD. CIT(A) AT RS. 1,77,100/-, RS.2,12,250/- AND RS.2,12,250/- RESPECT IVELY. THE COMMON FACTS PRESENTED BEFORE US THAT ALL THESE THR EE AMOUNTS WERE CLAIMED AS TRANSFER BY THE ASSESSEE FROM HIS P ERSONAL SAVING BANK ACCOUNT HELD WITH PUNJAB NATIONAL BANK TO ITS SOLE PROPRIETARYSHIP CONCERN M/S ANAND INDUSTRIES. LD. CIT(A) DENIED THE RELIEF BY MAKING GENERAL OBSERVATION THAT ASSES SEE COULD NOT PLACED ANY EVIDENCE. WE HOWEVER FAILED TO SUPPORT THIS OBSERVATION OF LD. CIT(A) SINCE DETAILS OF BANK ACCOUNTS WERE V ERY MUCH AVAILABLE BEFORE THE LOWER AUTHORITIES. TRANSACTION HAS TAKEN PLACE FROM ONE ACCOUNT TO ANOTHER. ASSESSEE IS INTO BUSI NESS SINCE LAST MANY YEARS AND CONSISTENTLY OFFERING INCOME. MAJOR AMOUNT OF ADDITION MADE BY LD. A.O STANDS ALREADY DELETED BY LD. CIT(A). IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO REASON TO DOUBT THE CREDITWORTHINESS OF THE ASSESSEE TO TR ANSFER THE ALLEGED IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 93 AMOUNT FROM HIS PERSONAL BANK ACCOUNT TO THE SOLE P ROPRIEORYSHIP CONCERN M/S ANAND INDUSTRIES. WE ACCORDINGLY DELET E THE ADDITION OF RS.1,77,100/- FOR ASSESSMENT YEAR 2003-04, RS.2, 12,250/- FOR ASSESSMENT YEAR 2004-05 AND RS. 2,12,250/- FOR ASSE SSMENT YEAR 2005-06 AND ALLOW GROUND NO.5 FOR ASSESSMENT YEARS 2003-04 AND 2004-05 AND GROUND NO.7 FOR ASSESSMENT YEAR 2005-06 . 97. NOW WE TAKE UP GROUND NO.6 FOR ASSESSMENT YEAR 200 4-05 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE ADDIT ION OF RS.1,29,200/- THEREBY CONFIRMING THE ACTION OF LD. A.O FOR DENYING THE BENEFIT OF AGRICULTURE INCOME AND TAXING IT AS INCOME FROM OTHER SOURCE. BRIEF FACTS RELATING TO THIS GROUND ARE TH AT ASSESSEE HAS SHOWN TO HAVE PERFORMED AGRICULTURE OPERATION ON TH E AGRICULTURE LAND TAKEN ON LEASE AND HAVE EARNED NET PROFIT OF R S.1,29,200/- AGAINST TOTAL SALE CONSIDERATION OF RS.2,96,875/-. LD. A.O REJECTED THIS CLAIM AND TAXED THE INCOME AS INCOME FROM OTHE R SOURCE. WHEN THE MATTER CAME UP BEFORE LD. CIT(A) HE HAS AL SO CONFIRMED THE ACTION OF LD. A.O GIVING THE FINDING THAT ASSES SEE HAS NOT SHOWN ANY AGRICULTURE INCOME IN THE PAST AND SUBSEQUENT Y EAR AND LOOKING TO THE FACT THAT THE ASSESSEE IS RUNNING SO LE PROPRIETORYSHIP IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 94 CONCERN THERE REMAINS HARDLY ANY TIME TO DO AGRICUL TURE ACTIVITY AND THUS CLAIM WAS REJECTED. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 98. LD. COUNSEL FOR THE ASSESSEE AGAIN SUBMITTED THE S UBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND DREW OUR ATTE NTION TO BATAI AGREEMENT DATED 05.01.2003 AND SALE BILL OF KRISHI UPAJ MANDI TO SUPPORT THE CONTENTION THAT THE ASSESSEE HAD EARNED GENUINE INCOME FROM AGRICULTURE AT RS.1,29,200/-. 99. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 100. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.6 FOR ASSESSMEN T YEAR 2004- 05 ASSESSEE NAMELY SHRI PREM CHAWLA CHALLENGED THE FINDING OF LD. CIT(A) TREATING THE AGRICULTURE INCOME AT RS. 1,29, 200/- AS INCOME FROM OTHER SOURCE. WE OBSERVE THAT LD. CIT(A) HAS APPLIED THE PROBABILITY THEORY IN REJECTING THE CLAIM BY OBSERV ING THAT SINCE THE ASSESSEE HAS NOT SHOWN ANY AGRICULTURE INCOME IN TH E PAST AND IN THE SUBSEQUENT ASSESSMENT YEARS AND THE ASSESSEE HA RDLY HAD ANY TIME TO CARRY OUT THE ACTIVITY SINCE HE WAS RUNNING TWO IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 95 PROPRIETARYSHIP CONCERNS THEREFORE THE ASSESSEE HAD MADE FALSE CLAIM. WE HOWEVER ARE NOT IN AGREEMENT WITH THIS G ENERAL PROBABILITY THEORY APPLIED BY LD. CIT(A) WITHOUT EX AMINING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE IN THE F ORM OF BATAI AGREEMENT BETWEEN SHAKUNI KUMARI AND THE ASSESSEE D ATED 01.05.2003 AND THE SALE BILLS OF KRISHI UPAJ MANDI ISSUED IN THE NAME OF ASSESSEE. BOTH THE LOWER AUTHORITIES HAVE NOT FIND ANY DISCREPANCY IN THESE DOCUMENTS FILED BY THE ASSESSE E. AGAINST THE SALE PROCEEDS OF RS.2,96,864/- THE INCOME HAS SHOWN AT RS. 1,29,200/- WHICH IS AROUND 43% ONLY. 101. IN OUR CONSIDERED VIEW WHEN THE ASSESSEE MADE THE CLAIM WITH NECESSARY SUPPORTING EVIDENCES IT WAS NOT JUSTIFIED ON THE PART OF THE LD. A.O AS WELL AS LD. CIT(A) TO DENY THE CLAIM WITHOUT FINDING ANY DISCREPANCY IN THE EVIDENCES PLACED BEFORE THEM . THEREFORE THE GENERAL OBSERVATION OF LD. CIT(A) THAT THE ASSESSEE NOT EARNING ANY AGRICULTURE INCOME IN THE PAST AND SUBSEQUENT YEAR SEEMS TO BE HOLLOW AND CANNOT BE ACCEPTED. THEREFORE GROUND NO. 6 FOR ASSESSMENT YEAR 2004-05 IS ALLOWED AND THE CLAIM OF THE ASSESSEE OF HAVING EARNED AGRICULTURE INCOME OF RS. 1,29,200 /- IS ACCEPTED. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 96 102. NOW WE TAKE UP GROUND NO.6 OF THE ASSESSEE FOR ASS ESSMENT YEAR 2005-06 WHEREIN THE FINDINGS OF LD. CIT(A) IS CHALLENGED CONFIRMING THE ADDITION OF RS.99,000/- INCURRED ON ACCOUNT OF INVESTMENT IN IMMOVEABLE PROPERTY. BRIEF FACTS REL ATING TO THIS ARE THAT THE ASSESSEE MADE INVESTMENT IN IMMOVEABLE PRO PERTY DURING THE YEAR. APART FROM THE AMOUNTS TRANSFERRED FROM BANK ACCOUNTS THERE WAS A CLAIM OF INCURRING CASH OF RS.99,000/- WHICH WAS WITHDRAWN FROM THE PROPRIETARYSHIP CONCERN. ASSESS EE FAILED TO PROVE THIS WITHDRAWAL AND THE ACTION OF THE LD. A.O WAS CONFIRMED BY LD. CIT(A) FOR THIS EXPENDITURE IN CASH FOR WANT OF SOURCE. NOW THE ASSESSEE HAS CHALLENGED THIS ADDITION BEFORE TH E TRIBUNAL. 103. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE WRITT EN SUBMISSION SUBMITTED THAT THE ASSESSEE HAD MADE REG ULAR CASH WITHDRAWALS FROM THE PROPRIETARYSHIP CONCERN M/S AN AND INDUSTRIES AND SOURCE OF CASH WITHDRAWAL IS FROM HI S CAPITAL ACCOUNT ONLY. REFERENCE WAS MADE TO PAGE 503 OF PA PER BOOK SHOWING CAPITAL ACCOUNT OF M/S ANAND INDUSTRIES. 104. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 97 105. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.6 ASSESSEE HAS CHALLENGED THE ADDITION FOR UNEXPLAINED CASH WITHDRAWAL OF RS. 99,000/- FOR ASSESSMENT YEAR 2005-06. WE OBSERVE THAT THE ASSESS EE PURCHASED PROPERTY AT E-3/91, ARERA COLONY, BHOPAL JOINTLY WI TH SMT. SUDESH CHAWLA ON 30.11.2004. ASSESSEE INVESTED A SUM OF R S.30 LAKHS. OUT OF THIS PURCHASE CONSIDERATION RS.99,000/- WAS CLAIMED BY THE ASSESSEE TO HAVE BEEN WITHDRAWN IN CASH FROM M/S AN AND INDUSTRIES IS IN DISPUTE. WE HAVE GONE THROUGH THE PAPER BOOK PAGE 503 OF THE ASSESSEES CAPITAL ACCOUNT IN THE B OOKS OF M/S ANAND INDUSTRIES. ON PERUSAL OF THE CAPITAL ACCOUN T WE FIND THAT AFTER THE CASH WITHDRAWAL TOTALING TO RS.25,000/- D URING APRIL, 2004 ASSESSEE DEPOSITED RS.90,000/-. THEREAFTER FROM MA Y 2004 TO TILL 6 TH JULY 2004 TOTAL CASH WITHDRAWAL IS RS.57,000/-. IF WE FAIRLY ESTIMATE THE DRAWINGS AT RS. 17000/- FOR HOUSEHOLD PURPOSES ASSESSEE WOULD HAVE LEFT OVER WITH RS.40,000/- ONLY .TO THIS EXTEND THE CLAIM OF THE ASSESSEE CAN BE ACCEPTED. WE ACCO RDINGLY PARTLY ALLOW GROUND NO.6 OF THE ASSESSEES APPEAL AND CONF IRM THE ADDITION OF RS.59,000/- ONLY. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 98 106. NOW WE TAKE UP GROUND NO.5 FOR ASSESSMENT YEAR 200 6-07 DURING WHICH THE ASSESSEE HAS CHALLENGED THE FINDIN G OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.7,80,000/- MADE ON AC COUNT OF UNEXPLAINED UNSECURED LOAN/SUNDRY CREDITORS. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS LD. A.O ASKED THE ASSESSEE TO EXPLAIN T HE UNSECURED LOAN/SUNDRY CREDITORS TOTALING TO RS.7,80,000/-. A SSESSEES CONTENTION IS THAT THESE ARE THE CREDITS IN THE REG ULAR COURSE OF BUSINESS TOWARDS ADVANCE FOR GOODS/SECURITY DEPOSIT AND OTHER CURRENT ACCOUNT TRANSACTIONS. LD. A.O WAS NOT SATI SFIED HE MADE ADDITION FOR RS.7,80,000/-. ASSESSEE FILED APPEAL BEFORE LD. CIT(A) BUT FAILED TO SUCCEED. NOW THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 107. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE WRITT EN SUBMISSIONS AND SUBMITTED THAT DETAILS OF EACH TRAN SACTIONS ARE DULY APPEARING IN AUDITED BALANCE SHEET. PAYMENTS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. MOST OF THE ALLEGED CASH CREDITORS ARE IN THE FORM OF SECURITY DEPOSIT AND SUNDRY CRED ITORS AND ASSESSEE IS HAVING REGULAR TRANSACTIONS WITH THESE CONCERNS. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 99 THEREFORE THE ADDITION FOR UNEXPLAINED CASH CREDIT OF RS.7,80,000/- WAS NOT JUSTIFIED. 108. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 109. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.5 FOR ASSESSME NT YEAR 2006- 07 FINDING OF LD. CIT(A) CONFIRMED THE ADDITION TOW ARDS UNEXPLAINED CASH CREDIT IS IN DISPUTE. BEFORE US LD. COUNSEL F OR THE ASSESSEE GIVING DETAILS OF EACH OF THE ALLEGED CASH CREDITOR S IN THE FOLLOWING PARTICULAR FORM:- NAME OF DEALER AMOUNT DATE CHQ. NUMBER SUBMISSIONS GANPATI TRADERS 30,000 60,000 50,000 2,00,000 05,01,06 07.01.06 23,01,06 30.01.06 740903 740906 740913 185506 1. THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS, WHICH ARE ALSO AUDITED U/S 44AB OF THE ACT. 2. THE AMOUNT IS RECEIVED FROM THE REGULAR DEALER, WHO IS REGULARLY PURCHASING FROM ASSESSEE. 3. THE SALES TO GANPATI TRADERS AMOUNTING TO RS.11,67,344 WERE MADE IN A.Y 2006-07 4. THE PAYMENT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 100 RECEIVED AGAINST SALE WERE RS.11,42,000 AND THE BALANCE RS.25,344/- APPEARING IN LIST OF DEBTORS ON PB 564. 5. THE TOTAL SECURITY DEPOSIT AMOUNTING TO RS.3,40,000 IS SHOWN SEPARATELY UNDER ANNEXURE-C DEPOSITS ON PB 561. 6. THE LEDGER ACCOUNT OF THE PARTY SHOWING THE RECEIPT OF SECURITY DEPOSIT, AS PER CUSTOMARY POLICY THROUGH CHEQUE ARE ON PB 603. S,M ENTERPRISES, FARIDABAD 2,50,000 26.04.05 209352 1. THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS, WHICH ARE ALSO AUDITED U/S 44AB OF THE ACT. 2. THE AMOUNT IS RECEIVED FROM THE REGULAR DEALER, WHO IS REGULARILY PURCHASING FROM ASSESSEE. 3. THE SALES TO S.M. ENTERPRISES AMOUNTING TO RS.5,55,839 WERE MADE IN A.Y 2006-07 4. THE PAYMENT RECEIVED AGAINST SALE WERE RS.5,55,839 5. THE TOTAL SECURITY IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 101 DEPOSIT AMOUNTING TO RS.2,50,000 IS SHOWN SEPARETLY UNDER ANNEXURE C DEPOSITS ON PB 561 6. THE LEDGER ACCOUNT OF THE PARTY SHOWING THE RECEIPT OF SECURITY DEPOSIT, AS PER CUSTOMARY POLICY THROUGH CHEQUE ARE ON PB 603. SHAKTI TRADERS, BHOPAL 50,000 50,000 18.05.05 18.05.05 900228 900229 1. THE TOTAL SECURITY DEPOSIT AMOUNTING TO RS.1,00,000 IS SHOWN SEPARATELY UNDER ANNEXURE C. DEPOSITS ON PB 561. 2. THE LEDGER ACCOUNT OF THE PARTY SHOWING THE RECEIPT OF SECURITY DEPOSIT, AS PER CUSTOMARY POLICY THROUGH CHEQUE ARE ON PB.605 PARI TRADERS, LUCKNOW 25,000 25,000 06.04.05 06.04.05 111146 111141 1. THE TOTA L SECURITY DEPOSIT AMOUNTING TO RS.50,000 IS SHOWN SEPARATELY UNDER ANNEXURE C. DEPOSITS ON PB 561. 2. THE LEDGER ACCOUNT OF THE PARTY SHOWING THE RECEIPT OF SECURITY DEPOSIT, AS PER CUSTOMARY POLICY THROUGH CHEQUE ARE ON IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 102 PB.605 KRISHNA ENTERPRISES, HARIDWAR 40,000 16.07.05 149600 1. THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS, WHICH ARE ALSO AUDITED U/S 44AB OF THE ACT. 2. THE AMOUNT IS RECEIVED FROM THE REGULAR DEALER, WHO IS REGULARLY PURCHASING FROM ASSESSEE. 3. THE SALES TO KRISHNA. ENTERPRISES AMOUNTING TO RS.79,145 WERE MADE IN A.Y 2006-07 4. THE PAYMENT RECEIVED AGAINST SALE WERE RS.75,000 5. THE TOTAL SECURITY DEPOSIT AMOUNTING TO RS.40,000 IS SHOWN SEPARETLY UNDER ANNEXURE C DEPOSITS ON PB 561 6. THE LEDGER ACCOUNT OF THE PARTY SHOWING THE RECEIPT OF SECURITY DEPOSIT, AS PER CUSTOMARY POLICY THROUGH CHEQUE IS ON PB 607. 110. WE HAVE GONE THROUGH THE ABOVE DETAILS AND ALSO GO NE WITH THE RELEVANT PAPER BOOK PAGE MENTIONED HERE UNDER. ASSE SSEE HAS IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 103 TURNOVER FOR ASSESSMENT YEAR 2006-07 IS 3,28,36,548 /-. FINANCIAL STATEMENT OF BOTH THE PROPRIETORSHIP CONCERNS M/S A NAND PAINTS AND M/S ANAND INDUSTRIES ARE DULY AUDITED. NECESSAR Y INFORMATION ARE PROVIDED IN FORM 3CD AND ITS ANNEXURES ATTACHED TO THE REPORT U/S 44AB OF THE ACT. AS DISCUSSED IN THE PRECEDING PARAS AND FACTS REMAINS SIMILAR WE FIND THAT THE ALLEGED CASH CREDI TS ARE MAINLY TOWARDS SECURITY DEPOSIT RECEIVED FROM THE DEALERS THROUGH BANKING CHANNEL AS PER THE POLICY OF THE ASSESSEES BUSINES S. REGULAR SALES HAVE BEEN EFFECTED THROUGH THESE DEALERS. IN CASE OF NON RECEIPT OF SALE CONSIDERATION OR DISCONTINUING OF THE DEALERSH IP THE AMOUNT IS ADJUSTED AGAINST THE SALES. ALMOST IN ALL THE PART IES REFERRED IN THE LIST ARE HAVING REGULAR BUSINESS TRANSACTIONS OF SA LE/PURCHASE OF GOODS WITH THE ASSESSEE. NO FURTHER ENQUIRY HAVE B EEN INITIATED DURING BOTH THE ROUNDS OF PROCEEDINGS. IN THESE GI VEN FACTS AND CIRCUMSTANCES IT IS NOT JUSTIFIED TO DOUBT THE GENU INENESS OF THE CASH CREDITS/SECURITY DEPOSITS/SUNDRY CREDITORS. WE THEREFORE DIRECT THE REVENUE AUTHORITIES TO DELETE THE ADDITION OF R S.7,80,000/-. GROUND NO.5 RAISED BY THE ASSESSEE FOR ASSESSMENT Y EAR 2005-06 IS ALLOWED. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 104 111. NOW WE WILL TAKE UP LAST EFFECTIVE GROUND NO.7 OF SHRI PREM CHAWLA THROUGH WHICH THE ASSESSEE CHALLENGED THE FI NDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.3,34,500/- ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH. BRIEF FACTS REL ATING TO THIS GROUND ARE THAT CASH OF RS.3,34,500/- WAS FOUND IN THE LOCKER IN THE NAME OF SMT. SARITA CHAWLA. IN THE STATEMENT G IVEN DURING THE COURSE OF SEARCH SMT. SARITA CHAWLA ACCEPTED THAT S HE IS THE OWNER OF THE LOCKER AND SHE ALSO GAVE BIFURCATION OF SOUR CE OF CASH FOUND IN THE LOCKER. HOWEVER DURING THE COURSE OF ASSESS MENT PROCEEDINGS LD. A.O ON THE BASIS OF STATEMENT OF TH E ASSESSEE GIVEN ON BEHALF OF HIS WIFE SMT. SARITA CHAWLA, SURRENDER ED RS.3,50,000/- TOWARDS INCOME NOT DISCLOSED IN THE R ETURN OF INCOME, LD. A.O MADE THE ADDITION IN THE HANDS OF THE ASSESSEE. ASSESSEE FAILED TO GET ANY RELIEF FROM LD. CIT(A). NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 112. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LO CKER WAS IN THE NAME OF SMT. SARITA CHAWLA. HER STATEMENT WERE TAKEN ON 21.12.2005 AND IN REPLY TO SPECIFIC QUESTION SHE HA D STATED THAT CASH LYING IN BANK LOCKER REPRESENT RS.2 LAKHS RECE IVED FROM IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 105 AANDPUR SAHIB TRUST AND RS.51,000/- FROM HER PERSON AL SAVINGS. SHE COULD NOT REPLY FOR THE REMAINING AMOUNT OF RS. 83,500/-. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE IM PUGNED ADDITION CANNOT BE MADE IN THE HANDS OF THE HUSBAND WHEN THE LOCKER WAS IN THE NAME OF WIFE WHO HAS ASSESSED TO TAX AND HAS ALSO SUBJECTED TO ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT. 113. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 114. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. ADDITION FOR RS.3,34,500/- ON AC COUNT OF CASH FOUND DURING THE COURSE OF SEARCH IS IN DISPUTE BEF ORE US RAISED BY THE ASSESSEE THROUGH GROUND NO.7 CHALLENGING THE FI NDING OF LD. CIT(A). IT IS AN UNDISPUTED FACT THAT THE IMPUGNED CASH AMOUNT OF RS.3,34,500/- WAS FOUND IN THE LOCKER IN THE NAME O F SMT. SARITA CHAWLA. IN THE PRIMARY STATEMENT GIVEN BY HER BEFO RE THE SEARCH TEAM ON 21.05.2005 IN QUESTION NO.19 SHE WAS SPECIF ICALLY ASKED ABOUT THE SOURCE OF CASH OF RS.3,34,500/- FOUND IN THE LOCKER NO.27 OWNED BY HER HELD WITH STATE BANK OF INDIA, M AHAVEER NAGAR, BHOPAL. IN REPLY TO THIS QUESTION SHE STATED THAT RS.2.50 LAKHS WAS IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 106 TOWARDS THE AMOUNT COLLECTED FOR THE CONSTRUCTION O F ASHRAM FROM VARIOUS PERSONS ON BEHALF OF ANANDPUR SAHIB TRUST, RS.51,000/- IS ON ACCOUNT OF HER PAST SAVINGS AND FOR THE REMAININ G AMOUNT OF RS.33,500/- SHE COULD NOT EXPLAIN. THE ABOVE STATEM ENT CLEARLY SHOWS THAT SMT. SARITA CHAWLA WERE VERY WELL AWARE ABOUT THE CASH FOUND IN HER LOCKER. SHE HAS NOT STATED THAT THE I MPUGNED AMOUNT RELATES TO HER HUSBAND. SHE IS ALSO A REGULAR TAX PAYER EARNING PROFESSIONAL INCOME AND BUSINESS INCOME. REVENUE A UTHORITIES HAVE MADE THE IMPUGNED ADDITION MERELY ON THE BASIS OF STATEMENT GIVEN BY SHRI PREM CHAWLA. WE NOTE THAT SHRI PREM CHAWLA WHO WAS LOOKING AFTER THE BUSINESS AFFAIRS OF GROUP CON CERN ALONG WITH THE FAMILY MEMBERS AND COMPANY REPRESENTED AND GAVE STATEMENTS TOWARDS SURRENDER OF CERTAIN AMOUNT IN THE NAME OF VARIOUS ASSESSEE(S).BUT MERELY MAKING SURRENDER IN THE NAME OF OTHER PERSONS CANNOT GIVE FREE HAND TO REVENUE AUTHORITIE S TO MAKE THE ADDITION IN THE HANDS OF THE PERSONS WHO HAS SURREN DERED ON BEHALF OF OTHER PERSONS. WHEN THE DOCUMENTARY EVIDENCES WE RE AVAILABLE WHICH IN THIS CASE ARE PRIMARY STATEMENT OF SMT. SA RITA CHAWLA ABOUT THE SOURCE OF CASH FOUND IN HER LOCKER, THE A CTION OF THE LD. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 107 A.O TO MAKE THE ADDITION IN THE HANDS OF THE ASSESS EE SHRI PREM CHAWLA WAS DULY UNJUSTIFIED AND THUS DESERVES TO BE DELETED. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND A LLOW GROUND NO.7 OF ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07. 102. ALL THE REMAINING GROUNDS OF ASSESSEE FOR ASSE SSMENT YEAR 2000-01 TO 2006-07 ARE CONSEQUENTIAL, PREMATURE AND GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 115. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE SHRI PREM CHAWLA IN APPEAL SS(A) NO.172 TO 175/IND/2015 AND ITA NO.1 43/IND/2015 ARE PARTLY ALLOWED AS PER THE TERMS INDICATED ABOVE . 116. NOW WE TAKE UP THE REMAINING GROUNDS RAISED IN APP EAL NOS. IT(SS) 164 TO 169/IND/2015 IN THE CASE OF SMT. SARI TA CHAWLA. 117. THROUGH SIMILAR GROUND NO.2 RAISED IN ASSESSMENT Y EARS 2000-01 TO 2003-04 THE FINDING OF LD. CIT(A) IS CH ALLENGED FOR CONFIRMING THE ADDITION OF RS. 34,800/-, 36,600/-, RS.44,300/- AND RS.34,650/- TOWARDS COMPUTER PROGRAMMING ACTIVITY I NCOME. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE DISCLOSED INCOME FROM COMPUTER PROGRAMMING IN THE RETURN OF INCOME F ILED FOR ASSESSMENT YEARS 2000-01 TO 2003-04. AS THE ASSESS EE COULD NOT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 108 PROVIDE DOCUMENTARY EVIDENCES TO EXPLAIN THE SOURCE OF THIS INCOME LD. A.O ESTIMATED IT ON A HIGHER AMOUNT AND MADE TH E AFORESAID ADDITIONS. IN THE SECOND ROUND OF ASSESSMENT ON TH E DIRECTION OF THIS TRIBUNAL THESE ADDITIONS WERE AGAIN MADE AND T HE SAME WERE SUBSEQUENTLY CONFIRMED BY LD. CIT(A) AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 118. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AS SESSEE HOLD DIPLOMA IN COMPUTER PROGRAMMING FROM NIT AND PROVID ED SERVICES TO COMPUTER PROGRAMMERS. AS THE ASSESSEES INCOME WAS LESS THAN THE LIMIT PRESCRIBED U/S 44A OF THE ACT SHE IS NOT REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS. THE ADDITION M ADE BY LD. A.O IS ENTIRELY BASED ON ESTIMATION AND GUESS WORK. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 119. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 120. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. THROUGH SIMILAR GROUND NO.2 FOR A SSESSMENT YEARS 2000-01 TO 2003-04 ASSESSEE CHALLENGED THE AD DITION OF RS.34,800/-, RS.36,600/-, RS.44,300/- AND RS. 34,65 0/- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 109 RESPECTIVELY. THESE ADDITIONS WAS MADE BY LD. A.O ESTIMATING THE INCOME FROM COMPUTER PROGRAMMING WORK ON A HIGHER A MOUNT THAN THE AMOUNT DISCLOSED BY THE ASSESSEE IN HER INCOME TAX RETURN. LD. CIT(A) ALSO CONFIRMED THE ADDITION AFTER GIVING A GENERAL FINDING. 121. WE NOTE THAT THE ASSESSEE IS HOLDING DIPLOMA IN COM PUTER PROGRAMMING FROM NATIONAL INSTITUTE OF INFORMATION TECHNOLOGY. SHE IS WELL VERSED WITH COMPUTER PROGRAMMING WORK. SHE HAS BEEN DISCLOSING THIS INCOME IN THE RETURN FILED U/S 139 OF THE ACT FOR ASSESSMENT YEARS 2000-01 TO 2003-04. NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE ADDITION MADE BY THE LD. A.O IS PURELY ON ESTIMATION AND GUESS WORK. TH E ASSESSMENTS ARE FRAMED U/S 153C R.W.S. 143(3) OF THE ACT. NO R EFERENCE HAS BEEN MADE TO ANY INCRIMINATING MATERIAL WHICH COULD SHOW THAT THE ASSESSEE HAS NOT DISCLOSED CORRECT INCOME FROM COMP UTER PROGRAMMING WORK. IN THESE GIVEN FACTS AND CIRCUMS TANCES OF THE CASE THE ADDITION MADE ON ESTIMATED BASIS WITHOUT C ONSIDERING THE FACT THAT THE ASSESSEE IS A QUALIFIED DIPLOMA HOLDE R AND POSSESSED PROFESSIONAL EXPERTISE TO EARN SUCH INCOME, IS NOT JUSTIFIED AND THUS DESERVES TO BE DELETED. WE ACCORDINGLY ALLOW GROUN D NO.2 IN THE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 110 CASE OF SMT. SARITA CHAWLA IN IT(SS) A NO.164 TO 16 7 AND DELETE THE ADDITION OF RS.34,800/-, RS.36,600/-, RS.44,300 /- AND RS. 34,650/- FOR ASSESSMENT YEARS 2000-01 TO 2003-04 RE SPECTIVELY. 122. THROUGH GROUND NO.3 FOR ASSESSMENT YEAR 2000-01 AD DITION OF RS.82,350/- IS IN CHALLENGE WHICH WAS CONFIRMED BY LD. CIT(A). LD. A.O MADE THIS ADDITION ON BEING NOT SATISFIED W ITH THE UNEXPLAINED OPENING CAPITAL SHOWN IN THE BALANCE SHEET. LD. CIT(A) CONFIRMED THE ADDITION. NOW THE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 123. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT INCOME OF RS.4300/- WAS EARNED ON THE SUNDRY ADVANCES OF RS.8 2,000/-. THIS ADVANCE WAS GIVEN OUT OF THE OPENING BALANCE A S PER REGULAR RETURNS FILED BY THE ASSESSEE PRIOR TO SEARCH. 124. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 125. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.3 FOR ASSESSMEN T YEAR 2000- 01 ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.82,350/- BEING OPENING BALANCE OF CA PITAL ACCOUNT. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 111 WE OBSERVE THAT ON ACCOUNT OF SEARCH THE ASSESSEE W AS ALSO SUBJECTED TO SCRUTINY FROM ASSESSMENT YEAR 2001-02 TO 2006-07. THERE IS A OPENING CAPITAL BALANCE AS ON 1.4.2000 W HICH THE ASSESSEE HAS SHOWN IN THE INCOME TAX RETURN FILED. SUCH OPENING BALANCE ARE CLAIMED TO BE PART OF ACCUMULATED SAVIN GS FROM PAST. AS THE ASSESSEE COULD NOT JUSTIFY THE BASIS OF OPEN ING CAPITAL SHE WAS SUBJECTED TO ADDITION. WE HOWEVER ARE OF THE C ONSIDERED VIEW THAT LOOKING TO THE FACT THE ASSESSEE BEING MARRIED SHOULD HAVE RECEIVED GIFTS FROM FAMILY MEMBERS AND IS FILING IN COME TAX RETURNS REGULARLY, THE ACCUMULATION OF PAST SAVING TO THE E XTENT OF RS.82,350/- SHOULD NOT HAVE BEEN DOUBTED. THE ASSE SSEE BEING A PROFESSIONAL DIPLOMA HOLDER, SAVINGS FROM PETTY INC OME EARNED FROM PROFESSION AND OTHER GIFTS IN CASH RECEIVED ON CERE MONIAL OCCASIONS SEEMS TO HAVE BEEN APPLIED TO FETCH THE INCOME BY W AY OF GIVING SUNDRY ADVANCES FOR EARNING INTEREST INCOME. WE TH EREFORE DELETE THE ADDITION OF RS.82,350/- AND ALLOW GROUND NO.3 R AISED FOR ASSESSMENT YEAR 2000-01. 126. NOW WE TAKE UP GROUND NO.3 FOR ASSESSMENT YEAR 200 3-04 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDI NG OF LD.CIT(A) IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 112 CONFIRMING THE ADDITION OF UNEXPLAINED INVESTMENT I N THE FIRM M/S. ATUL SOLVO CHEM AT RS. 1,99,900/-. DURING THE FIRS T ROUND OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO EXPLAI N THE INVESTMENT IN M/S ATUL SOLVO CHEM AT RS.1,99,900/-. ASSESSEE FAILED TO SATISFY THE LD. A.O. LD. A.O MADE ADDITI ON OF RS.1,99,900/-. IN THE SECOND ROUND ALSO THE SUBMIS SIONS OF THE ASSESSEE WERE NOT FOUND SATISFACTORY BY THE LD. A.O AND AGAIN THE ADDITION WAS MADE. ASSESSEE COULD NOT GET ANY RELI EF FROM LD. CIT(A). NOW THE ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL. 127. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IN VESTMENTS MADE IN M/S ATUL SOLVO CHEM IS GENUINE. M/S. ATUL SOLVO CHEM IS A PARTNERSHIP FIRM IN WHICH THE ASSESSEES HUSBAND AND MOTHER IN LAW ARE PARTNERS. CERTAIN PAYMENTS WERE MADE TO TH E SUPPLIERS OF M/S ATUL SOLVO CHEM BY THE ASSESSEE. ALL THESE TRA NSACTIONS WERE DURING THE PRE SEARCH PERIOD AND HAVE BEEN SHOWN IN THE BALANCE SHEET OF M/S ATULSOLVOCHEM, THUS NO ADDITION WAS CA LLED FOR. 128. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 113 129. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. THROUGH GROUND NO.3 RAISED FOR AD DITION OF RS.1,99,900/- FOR UNEXPLAINED INVESTMENT BY THE ASS ESSEE IN THE FIRM M/S ATUL SOLVO CHEM IS IN CHALLENGE. IT IS AN UNDISPUTED FACT THAT M/S ATUL SOLVO CHEM IS A PARTNERSHIP FIRM WHIC H IS RUN BY THE FAMILY MEMBERS OF THE ASSESSEE NAMELY HER HUSBAND, SHRI PREM CHAWLA AND MOTHER IN LAW LATE SMT. SUDESH CHAWLA. M/S ATUL SOLVO CHEM IS REGULARLY ASSESSED TO TAX. THE ASSES SEE MADE PAYMENTS THROUGH ACCOUNT PAYEE CHEQUES TO THE TWO S UPPLIERS OF M/S. ATUL SOLVO CHEM NAMELY M/S MAHINDRA TRADING CO AND M/S NEPTUNE, INDORE. LEDGER ACCOUNT OF SMT. SARITA CHA WLA IN THE BOOKS OF M/S ATUL SOLVO CHEM PLACED AT PAGE 188 OF PAPER BOOK SHOWS THE RELEVANT TRANSACTIONS. THE EVIDENCE PLAC ED BEFORE US IS SUFFICIENT TO EXPLAIN THE INVESTMENT MADE IN M/S AT ULSOLVO CHEM. WE THUS FIND NO JUSTIFICATION IN THE ADDITION OF RS .1,99,900/- MADE BY THE LD. A.O WHICH DESERVES TO BE DELETED. WE AC CORDINGLY ORDER SO AND SET ASIDE THE FINDING OF LD. CIT(A) CONFIRMI NG THE ADDITION OF RS.1,99,900/- AND ALLOW GROUND NO.3 RAISED FOR ASSE SSMENT YEAR 2003-04. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 114 130. NOW WE TAKE UP GROUND NO.2 FOR ASSESSMENT YEAR 200 4-05 RELATING TO DISALLOWANCE OF RETAIL TRADE EXPENSES. LD. A.O MADE ADDITION BY WAY OF ESTIMATING INCOME AT RS. 1,75,00 0/- AS AGAINST RS.1,26,360/- SHOWN BY THE ASSESSEE. ADDITION OF R S.50,640/- WAS MADE BY THE LD. A.O IN THE FIRST ROUND, THIS ADDITI ON WAS DELETED BY LD. CIT(A). IN THE SET ASIDE PROCEEDINGS LD. A.O AD DED THE SAME SUSPECTING IT TO BE UNDISCLOSED INCOME OF SHRI PREM CHAWLA (ASSESSEES HUSBAND). LD. CIT(A) AGAIN GAVE RELIEF OF RS.2000/- ON ACCOUNT OF ARITHMETIC ERROR AND CONFIRMED THE ADDIT ION FOR RS.48,640/-. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 131. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AS SESSEE HAD FILED HER RETURN OF INCOME U/S 44AF OF THE ACT AND HAS SHOWN AS INCOME AT 20% OF NET SALES WHICH IS MORE THAN THE M INIMUM STANDARDS PRESCRIBED BY THE ACT. ASSESSEE IS NOT R EQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS. NO INCRIMINATI NG MATERIAL AGAINST THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH. 132. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 115 133. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. ADDITION OF RS.48,640/- HAS BEEN CHALLENGED BY THE ASSESSEE THROUGH GROUND NO.2 FOR ASSESSMENT YEA R 2004-05 FOR ALLEGED ESTIMATION OF RETAIL TRADE EXPENSES AT RS.1 ,26,360/-. THE LD. A.O ESTIMATED INCOME AT RS.1,75,000/-, ADDITION OF RS.50,640/- WAS MADE AND LD. CIT(A) SUSTAINED IT TO RS.48,640/- . 134. WE NOTE THAT NO INCRIMINATING MATERIAL TOWARDS UNA CCOUNTED TRANSACTION OF SALES BY THE ASSESSEE WERE FOUND. I NCOME HAS BEEN OFFERED U/S 44AF OF THE ACT BY THE ASSESSEE SHOWING 20% OF NET PROFIT WHICH IS HIGHER THAN THE PERCENTAGE REQUIRED TO BE SHOWN U/S 44AF OF THE ACT. UNDER THESE GIVEN FACTS ESTIMATIN G THE INCOME AT HIGHER AMOUNT WILL TANTAMOUNT TO ADDITION WITHOUT A NY BASIS WHICH IN OUR VIEW DESERVES TO BE DELETED. THUS THE FINDI NG OF LD. CIT(A) IS SET ASIDE AND THE ADDITION FOR RETAIL TRADE EXPENS ES AT RS.48,640/- IS DELETED. GROUND NO.2 FOR ASSESSMENT YEAR 2004-0 5 IS ALLOWED. 135. NOW WE TAKE UP GROUND NO.3 FOR ASSESSMENT YEAR 200 4-05 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDI NG OF LD. CIT(A) CONFIRMING THE ADDITION FOR UNEXPLAINED LOANS AND S UNDRY CREDITORS AT RS.1,87,500/-. THERE WERE CERTAIN PETTY LOANS O F RS.60,000/- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 116 FROM 4 PERSONS AT RS.15000/- EACH AND SUNDRY CREDIT ORS OF RS.1,27,500/- SHOWN IN THE BALANCE SHEET FILED FOR ASSESSMENT YEAR 2004-05. LD. A.O MADE THE ADDITION ON BEING NOT SA TISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE BEING ALLEGED LOA N AND SUNDRY CREDITORS. ASSESSEE COULD NOT FIND ANY FAVOUR FROM LD. CIT(A). NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 136. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE WRITT EN SUBMISSIONS PLACED AT PAPER BOOK AT PAGE 9 & 10 CON TENDING THAT THE UNSECURED LOANS WERE TAKEN IN THE PERSONAL CAPA CITY AND WERE RETURNED IN SUBSEQUENT YEARS. SUNDRY CREDITORS AT R S.1,27,500/- INCLUDES THE OUTSTANDING EXPENSE OF RS.42,500/- AND OUTSTANDING PURCHASE OF RS.85,000/-. ASSESSEE HAS SHOWN THE IN COME U/S 44AF OF THE ACT AND WAS NOT REQUIRED TO MAINTAIN BO OKS OF ACCOUNTS. 137. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 138. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. ASSESSEE HAS CHALLENGED THE ADDI TION OF RS.1,87,500/- CONFIRMED BY LD. CIT(A) WHICH WAS MAD E BY LD. A.O IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 117 TOWARDS UNEXPLAINED LOANS OF SUNDRY CREDITORS. THE IMPUGNED AMOUNT OF RS.1,75,800/- IS TOWARDS UNSECURED LOAN O F RS.60,000/- AND SUNDRY CREDITORS OF RS.1,27,500/- FOR WHICH LD. COUNSEL FOR THE ASSESSEE HAS GIVEN FOLLOWING SUBMISSIONS; NAME AMOUNT REMARKS SHOBHA MOHABE 15,000 1 . THE LOANS ARE TAKEN BY THE ASSESSEE IN HER PERSONAL CAPACITY IS NOT A BUSINESS LOAN. 2. THESE LOANS WERE RETURNED IN THE SUBSEQUENT YEARS. 3. IN THE BALANCE SHEET OF THE ASSESSEE (PAPER BOOK-127), THESE AMOUNTS ARE DULY REFLECTED. MADHU MOHABE 15,000 PRABHA MOHABE 15,000 S ANGEETA MOHABE 15,000 60,000/ - CREDITORS 1,27,500 1 . IN THE BALANCE SHEET OF THE ASSESSEE (ANNEXED AT PAPER BOOK-127), THIS AMOUNT IS SHOWN AS SUNDRY CREDITORS. 2. THIS AMOUNT COMPRISES OF RS.42,500/- ON ACCOUNT OF UNPAID PURCHASES. 3. THAT THE ASSESSEE IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS U/S 44AA TOTAL 1,87,500 139. WE NOTE THAT THE ASSESSEE OPTED TO FILE THE RETUR N OF INCOME BY SHOWING NET PROFIT AS PER THE PROVISIONS OF SECT ION 44AF OF THE ACT APPLICABLE TO RETAIL TRADE BUSINESS. ASSESSEE HAS SHOWN HIGHER AMOUNT OF NET PROFIT AS PER SECTION 44AF OF THE ACT AND SINCE THE ASSESSEE IS FALLING UNDER THIS PROVISIONS SHE WAS N OT REQUIRED TO IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 118 MAINTAIN REGULAR BOOKS OF ACCOUNTS. THIS CLAIM OF THE ASSESSEE HAS NOT BEEN CHALLENGED BY THE REVENUE AUTHORITIES. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. AS SESSEE MADE THIS CLAIM U/S 44AF OF THE ACT IN THE RETURN FILED PRIOR TO THE CONDUCT OF SEARCH. WHEN THE SALES EFFECTED BY THE ASSESSEE ARE NOT IN CHALLENGE NOR ANY INCRIMINATING MATERIAL HAS BEE N FOUND DURING THE COURSE OF SEARCH ADDITIONS MADE IN THE PROCEEDI NGS U/S 153C R.W.S. 143(3) OF THE ACT ARE UNCALLED FOR. EVEN OTH ERWISE UNSECURED LOANS ARE RECEIVED BY THE ASSESSEE IN PERSONAL CAPA CITY AND IS CLAIMED TO HAVE BEEN RETURNED IN THE SUBSEQUENT YEA RS. THE ALLEGED SUNDRY CREDITORS AT RS.1,27,500/- COMPRISES OF OUTS TANDING EXPENSES OF RS.42,500/- AND UNPAID PURCHASES OF RS. 85,000/- WHICH SEEMS TO BE GENUINE AS PART OF BUSINESS TO CA RRY OUT RETAIL TRADE. WE THUS DIRECT THE REVENUE AUTHORITIES TO D ELETE THE ADDITION OF RS.1,87,500/- AND ALLOW GROUND RAISED BY THE ASS ESSEE FOR ASSESSMENT YEAR 2004-05. 140. NOW WE TAKE UP GROUND NO.4 FOR ASSESSMENT YEAR 200 4-05 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDI NG OF LD. CIT(A) CONFIRMING THE ACTION OF LD. A.O OF TREATING THE AG RICULTURE INCOME IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 119 AS INCOME FROM OTHER SOURCE. WE OBSERVE THAT SIMILA R ISSUE CAME UP BEFORE US IN THE CASE OF ASSESSEES HUSBAND SHRI PREM CHAWLA AND THE FACTS AND ISSUES REMAIN THE SAME. THE ACTIO N OF THE LD. A.O CONFIRMED BY LD. CIT(A). LD. COUNSEL FOR THE ASSES SEE MADE SIMILAR SUBMISSION THAT THERE WAS A BATAI AGREEMENT WITH SH RI AJAY KUMAR SAHU DATED 1.5.2003 AND THE SALES ARE EVIDENCED BY SALE BILL OF KRISHI UPAJ MANDI. 141. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 142. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.4 ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) CONFIRMING THE ADDITION FO R RS. 1,51,775/- TREATING THE CLAIM OF AGRICULTURE INCOME AS INCOME FROM UNDISCLOSED SOURCES. WE OBSERVE THAT THE ASSESSEE HAD NOT SHOWN ANY AGRICULTURE INCOME PRIOR TO ASSESSMENT YEAR 2004-05 AND SUBSEQUENT TO ASSESSMENT YEAR 2005-06 WHICH CREATES SUSPICION ABOUT THE GENUINENESS OF AGRICULTURE INCOME SHOWN F OR ASSESSMENT YEAR 2004-05. BUT THE EVIDENCE PLACED BY THE ASSES SEE BEFORE THE LOWER AUTHORITIES AND BEFORE US CLEARLY SPELLS OUT THAT THE ASSESSEE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 120 HAD EARNED INCOME FROM AGRICULTURE. THE BATAI AGRE EMENT WITH SHRI AJAY KUMAR SAHU DATED 1.5.2003 AND SALES BILLS OF K RISHI UPAJ MANDI, BAIRAGARH PLACED AT PAPER BOOK PAGE 131 TO 1 35 SUPPORTS THE CLAIM BY THE ASSESSEE. IN BOTH THE ROUNDS OF A SSESSMENT PROCEEDINGS NO EFFORTS WERE MADE BY THE LOWER AUTHO RITIES TO MAKE ENQUIRY ABOUT THE GENUINENESS OF THE CLAIM OF AGRIC ULTURE INCOME MADE BY THE ASSESSEE. IN THESE GIVEN FACTS AND CIR CUMSTANCES WHERE THE CLAIM OF THE ASSESSEE IS REJECTED WITHOUT CONDUCTING PROPER ENQUIRY TO HOLD THE DOCUMENTS AS BOGUS, THE ACTION OF THE LD. A.O OF TREATING THE AGRICULTURE INCOME AS INCOM E FROM OTHER SOURCE IS NOT JUSTIFIED. WE THUS SET ASIDE THE FIN DING OF LD. CIT(A) AND ALLOW GROUND NO.4 RAISED BY THE ASSESSEE HOLDIN G THAT THE ASSESSEE HAD EARNED INCOME FROM AGRICULTURE AT RS.1 ,51,775/- DURING ASSESSMENT YEAR 2004-05. 143. NOW WE TAKE UP GROUND NO.2 OF THE ASSESSEE FOR ASS ESSMENT YEAR 2005-06 THROUGH WHICH THE ADDITION OF RS.94,42 6/- HAS BEEN CHALLENGED BY THE ASSESSEE. THIS ADDITION MADE BY T HE LD. A.O ON ACCOUNT OF INCOME FROM COMPUTER PROGRAMMING. LD. C IT(A) HAS CONFIRMED THIS ADDITION STATING THAT SINCE THIS GRO UND WAS NOT IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 121 RAISED IN THE FIRST ROUND OF APPEAL ASSESSEE CANNOT CLAIM IT IN THE SECOND ROUND. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 144. LD. COUNSEL FOR THE ASSESSEE REFERRED AND RELIED B Y THE WRITTEN SUBMISSIONS. 145. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF BOTH THE LOWER AUTHORITIES. 146. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. ASSESSEE HAS CHALLENGED THE ADDI TION OF RS.92,426/- MADE BY LD. A.O AND CONFIRMED BY LD. CI T(A). ON PERUSAL OF THE WRITTEN SUBMISSIONS AND ON GOING THR OUGH THE COMPUTATION OF INCOME FILED BY THE ASSESSEE ALONG W ITH INCOME TAX RETURN WE OBSERVE THAT THERE WAS AN APPARENT ERROR MADE BY THE LD. A.O IN UNDERSTANDING THE COMPUTATION OF INCOME. WE FIND THAT IN PROFIT & LOSS ACCOUNT OF THE BUSINESS SHOWN BY T HE ASSESSEE, ASSESSEE HAS ALSO SHOWN SALARY INCOME OF RS.64,000/ - AND INTEREST AND BANK INTEREST OF RS. 28,426/-. WHILE PREPARING COMPUTATION OF INCOME ASSESSEE HAS REDUCED THESE TWO INCOMES FROM NET PROFIT SHOWN IN THE PROFIT & LOSS ACCOUNT TO ARRIVE AT THE PROFIT FROM BUSINESS. SALARY INCOME OF RS.64,000/- AND INTERES T INCOME OF IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 122 RS.28,426/- STANDS DULY OFFERED TO TAX UNDER THE HE AD INCOME FROM SALARY AND INCOME FROM OTHER SOURCES IN THE COMPUTA TION OF INCOME. THE COPY OF THE SAME IS FLED AT PAGE 148 O F PAPER BOOK. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF T HE CASE FIND THAT THE ALLEGED AMOUNT OF RS.92,426/- DISALLOWED BY THE LD. A.O TREATING IT AS EXPENSES OF M/S SARITA CONSULTANCY N OT ALLOWABLE IS UNCALLED FOR AS THE ALLEGED AMOUNT OF RS.92,426/- C OMPRISES OF INCOME FROM SALARY AND BANK INTEREST WHICH ARE ALRE ADY OFFERED TO TAX. THUS WE DIRECT THE REVENUE AUTHORITIES TO DEL ETE THE ADDITION OF RS.92,426/- AND ALLOW GROUND NO.2 RAISED BY THE ASS ESSEE. 147. NOW WE TAKE UP GROUND NO.3 OF ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005-06 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ACTION OF LD. A.O OF MAKING ADDITION FOR UNEXPLAINED CAPITAL ACCOUNT ADDITION AT RS. 8,73,364/-. DURING THE ASSESSMENT PROCEEDINGS ASSE SSEE WAS DIRECTED TO EXPLAIN THE SOURCE OF THE CAPITAL ADDIT ION. ASSESSEE MADE SUBMISSIONS WHICH ARE NOT FOUND SATISFACTORY. NO RELIEF WAS GIVEN BY LD. CIT(A) AND NOW THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 123 148. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED SUP PORTING THE WRITTEN SUBMISSIONS PLACED AT PAGE 14 & 15 OF P APER BOOK CONTENDING THAT ALL THE AMOUNTS ARE DULY EXPLAINED WHICH INCLUDES THE AMOUNT UTILIZED THROUGH LIMITS GIVEN BY STATE B ANK OF INDIA, PAYMENTS MADE FROM M/S ANAND ORGANICS ( PROPRIETORY CONCERN OF ASSESSEES HUSBAND) AND WITHDRAWAL FROM PERSONAL AC COUNT AND DEPOSITING THROUGH ACCOUNT PAYEE CHEQUE IN M/S ANAN D COATINGS. 149. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 150. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE REC ORDS. THROUGH GROUND NO.3 ADDITION OF RS.8,73,364/- IS IN CHALLEN GE FOR ASSESSMENT YEAR 2005-06. LD. CIT(A) CONFIRMED THE ADDITION MADE BY LD. A.O ON ACCOUNT OF UNEXPLAINED ADDITION TO CA PITAL ACCOUNT DURING THE YEAR. WE OBSERVE THAT THE ASSESSEE RUNS SOLE PROPRIETARYSHIP CONCERN M/S ANAND COATINGS, THIS CO NCERN WAS STATED DURING THE YEAR. TO RUN THE BUSINESS ASSESS EE TRANSFERRED FUNDS TOWARDS CAPITAL. THE ALLEGED AMOUNT OF RS.8, 73,364/- MAJORLY INCLUDES 3 ITEMS TOTALING TO RS.8,72,000/- FOR WHICH THE LD. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 124 COUNSEL FOR THE ASSESSEE HAS AGAIN GIVEN THE PARTIC ULARS IN THE CHART WHICH IS REPRODUCED BELOW:- A.Y ADDITION CIT(A) REMARKS SUBMISSION PB REF 2005 - 06 1,80,000 LIMIT UTILIZED FROM SBI THE APPELLANT HAS TAKEN OVERDRAFT, WHICH SHOULD APPEAR IN THE LIABILITY SIDE OF THE BALANCE SHEET INSTEAD OF CAPITAL ACCOUNT M/S ANAND COATINGS IS A SEPARATE ACCOUNTING ENTITY FROM THE PROPRIETOR. THE OVERDRAFT WAS TAKEN IN PERSONAL CAPACITY OF THE ASSESSEE AND INTRODUCED AS A CAPITAL. - 2,72,000 PAID FROM ANAND ORGANICS, A PROPRIETARY CONCERN OF HER HUSBAND. THE APPELLANT FAILED TO FURNISH ANY COGENT EVIDENCE IN THIS REGARD. THERE IS A DEBIT BALANCE IN THE NAME OF ASSESSEE IN THE BOOKS OF ANAND ORGNICS. ASSESSEES LEDGER ACCOUNT IN THE BOOKS OF M/S ANAND ORGANICS IS ANNEXED AT PAPER BOOK-160. THE RECEIPT WAS THROUGH BANKING CHANNEL. 4,21,000 WITHDRAWAL FROM SARITA CHAWLAS PERSONAL ACCOUNT AND DEPOSITED IN ANAND COATINGS. THE SOURCE OF SUCH FUNDS IN THE PERSONAL ACCOUNT OF THE ASSESSEE IS UNEXPLAINED . THE AMOUNT WAS INTRODUCED BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE ASSESSEES PERSONAL ACCOUNT WHICH IS EVIDENT FROM THE CAPITAL OF M/S ANAND CAPITAL ACCOUNT OF M/S ANAND COATINGS FOR RELEVANT ASSESSMENT YEAR ANNEXED AT PAPER BOOK-158- IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 125 COATINGS. 159. 2006 - 07 5,31,356 INCOME FROM SALE OF SHARES INTRODUCED IN ANAND COATINGS ACCEPTED THE SUBMISSION AND DELETED THE ADDITION THE ASSESSEE RECEIVED THIS AMOUNT ON ACCOUNT OF SALE OF HER SHARES, AND THEN INTRODUCED AS CAPITAL. THE LONG TERM CAPITAL GAINS ARISING OF SUCH SALE IS ALSO REFLECTED IN THE RETURN FILED BY THE ASSESSEE. RETURN FILED U/S 139 ANNEXED AT PB187. COMPUTATIO N OF INCOME SHOWING CAPITAL GAINS IS ANNEXED AT PB-188. 151. WE HAVE GONE THROUGH ABOVE DETAILS. RS.18,000/- I S FROM LIMITS UTILIZED FROM STATE BANK OF INDIA, RS.2,72,0 00/- HAS BEEN RECEIVED FROM M/S ANAND ORGANICS (PROP. PREM CHAWLA WHO IS THE HUSBAND OF THE ASSESSEE) AND RS.4,21,000/- THROUGH ACCOUNT PAYEE CHEQUE ON VARIOUS DATES FROM ASSESSEES OWN SAVING BANK ACCOUNT HELD WITH BANK OF INDIA. WE OBSERVE THAT ALL THE A BOVE STATED TRANSACTIONS ARE APPEARING IN THE CAPITAL ACCOUNT O F SMT. SARITA CHAWLA WHICH IS PART OF AUDITED PROFIT & LOSS ACCOU NT. BALANCE SHEET OF M/S ANAND COATINGS IS DULY AUDITED U/S 44A B OF THE ACT. THE ALLEGED ADDITION OF RS.8,72,000/- ARE OF THOSE TRANSACTIONS WHICH ARE ENTERED THROUGH BANKING CHANNEL. ALL THE SE DETAILS ARE IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 126 AVAILABLE BEFORE THE REVENUE AUTHORITIES. NO EFFOR TS WERE MADE TO VERIFY THE GENUINENESS OF THE CLAIM MADE BY THE ASS ESSEE. THE ADDITION HAS BEEN MADE BY THE LD. A.O ON SUMMARY BA SIS EVEN WHEN THE ASSESSEE PASSED THROUGH THE ASSESSMENT PRO CEEDINGS TWICE. EVEN LD. CIT(A) HAS NOT MADE ANY EFFORTS TO EXAMINE THE TRANSACTIONS. IN THESE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE WE FIND NO REASON TO DISBELIEVE THE CLAIM MADE BY THE ASSESSEE WHICH ARE THROUGH BANKING CHANNEL, THROUGH HER OWN SAVING BANK ACCOUNT AND SOME TRANSACTIONS THROUGH HER HUBANDS PROPRIETORY CONCERN WHICH IS ALSO A PART OF APPEAL BEFORE US. WE THUS DIRECT THE REVENUE AUTHORITIES TO DELETE THE ADDITION OF RS.8, 73,364/-. THUS THE FINDING OF LD. CIT(A) IS SET ASIDE AND GROUND N O.3 OF THE ASSESSEE FOR ASSESSMENT YEAR 2005-06 IS ALLOWED. 152. ALL THE REMAINING GROUNDS RAISED BY THE ASSESSEE A RE EITHER CONSEQUENTIAL, PREMATURE AND GENERAL IN NATURE WHIC H NEEDS NO ADJUDICATION. 153. IN THE RESULT APPEAL OF THE ASSESSEE FOR ASSESSMEN T YEARS 2000-01 TO 2004-05 IS ALLOWED AND FOR ASSESSMENT YE ARS 2005-06 AND 2006-07 IS PARTLY ALLOWED. IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 127 154. IN THE RESULT APPEALS FILED BY THE ASSESSEE LATE SM T. SUDESH CHAWLA (THROUGH LEGAL HEIR SHRI PREM CHAND CHAWLA) THROUGH IT(SS)A NO.158 TO 163/IND/2015 FOR ASSESSMENT YEAR 2000-01 TO 2005-2006 & ITANO.441/IND/2015 FOR ASSESSMENT YEAR 2006-07 AND THAT OF REVENUES APPEAL FOR ASSESSMENT YEAR 20 06-07 IN ITA, NO.405/IND/2015 ARE PARTLY ALLOWED. IN THE CASE OF SHRI PREM CHAWLA FOR ALL THE APPEALS FOR ASSESSMENT YEARS 200 0-01TO 2005-06 IN IT(SS)A NO.170 TO 175/IND/2015 AND FOR ASSESSMEN T YEAR 2006- 2007& ITA. NO.443/IND/2015 ARE PARTLY ALLOWED & FOR SMT. SARITA CHAWLA IN IT(SS)A NO.164& 168/IND/2015 FOR ASSESSME NT YEAR 2000-01 & 2004-05 ARE ALLOWED AND IT(SS)A NO. 169/I ND/2015 FOR A.Y. 2005-2006 & ITA. NO.442/IND/2015 FOR A.Y.2006- 07ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 .11.2 020. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 26 TH NOVEMBER, 2020 /DEV IT(SS)ANOS.158 TO 175/IND/2015 && OTHERS CHAWLA GROUP 128 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE