UNITED SHIPPERS LTD, MUMBAI V. ACIT CEN CIR-21, MUMBAI

ITSSA 25/MUM/2009

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1184 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 19-11-2014
• Assessment Year: misc
• Appeal Filed On: 23-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KUMAR
• Assessee Lawyers: A V SONDE
• Keywords: Recovery proceedings; Depreciation; Business expenditure; Search and seizure; Principle of natural justice; Block assessment; Unabsorbed depreciation
• Section: 69C; 143(3); 133A; 153A; 37(1); 32; 147; 148; 132; 144; 139

Judgement Text

, , , IN THE INCOME TAX ASSESSEE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER IT(SS) NO.25/MUM/2009 BLOCK PERIOD:-01/04/1996 TO 29/01/2003 M/S UNITED SHIPPERS LTD. UNITED INDIA BLDG. 2 ND FLOOR, SIR P.M. ROAD, MUMBAI-400001 / VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-21, MUMBAI-400021 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACU 0764C ! ' / ASSESSEE BY SHRI A.V. SONDE # / REVENUE BY SHRI NARENDRA KUMAR CIT-DR $ #% & ' ' / DATE OF HEARING : 07/10/2015 & ' ' / DATE OF ORDER: 28/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 23/12/2008 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS RAISED VARIOUS GROUNDS. DURING HEA RING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, INVI TED OUR ATTENTION TO THE SYNOPSIS OF THE GROUNDS AND ARGUED THE IT(SS) NO.25/MUM/2009 2 SUMMARIZED GROUNDS (CONSENTED TO BE CORRECT BY THE LD. DR) WHICH ARE SUMMARIZED AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND IN FACTS IN UPHOLDING THE DISALLOWANCE OF F OLLOWING EXPENSES IN THE BLOCK ASSESSMENT PROCEEDINGS MADE B Y THE ASSESSING OFFICER. THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE ACTION OF THE ASSESSING OFFICER IS NEITHER WITHIN THE JURISDICTIO N OF BLOCK ASSESSMENT PROCEEDINGS FOR WANT OF SEIZED MATERIAL NOR SUSTAINABLE ON THE FACTS AND MERITS OF THE CASE. A) RS.63,00,000/- BEING 3% OF COMMISSION PAID TO M/S REYNOLD PETROCHEM LTD. AND SUPERVISION CHARGES PAID TO M/S SHREEJI ROAD LINES LTD. B) RS. 2,43,80,380/- BEING COMMISSION PAID TO M/S STRAUSS INDUSTRIES AND EXPORTS LTD. AND M/S CELLULOSE & CHEMICALS LTD. C) RS.37,01,000/- BEING COMMISSION PAID TO M/S SHAGUN CASTING PVT. LTD. D) RS.99,83,000/- BEING COMMISSION PAID TO M/S MOIRA STEEL LTD. E) RS.24,92,000/- BEING COMMISSION PAID TO M/S KALANI INDUSTRIES LTD. F) RS.32,98,000/- BEING COMMISSION PAID TO M/S ENNAR STEEL AND ALLOYS LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN NOT GRANTING DEDUCTION U/S 33AC TO THE APPELLANT CO MPANY FROM THE ADDITIONAL INCOME ASSESSED FROM THE BUSINE SS OF OPERATION OF SHIPS TO THE EXTENT OF RESERVE CREATED BY THE IT(SS) NO.25/MUM/2009 3 APPELLANT WHICH IS WRONG AND CONTRARY TO THE PROVIS ION OF THE INCOME TAX ACT, 1961 AND THE RULES MADE THEREUN DER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT DECIDING BUT DIRECTING THE ASSESSING O FFICER TO VERIFY WHETHER SURCHARGE @ 5% IS PAYABLE ON THE INC OME- TAX CHARGEABLE ON THE TOTAL UNDISCLOSED INCOME AS A GAINST SURCHARGE @ 2.5 % PAYABLE BY THE APPELLANT, WHICH I S WRONG AN CONTRARY TO THE PROVISION OF THE INCOME TA X ACT, 1961, AND THE RULES MADE THEREUNDER. 2. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAIN S TO CONFIRMING A SUM OF RS.63 LAKH, BEING 3% OF, RS.21 CRORES, PAID AS A COMMISSION TO REYNOLD PETRO CHEM LTD. AND SUPERVISIONS CHARGES TO M/S SHREEJI ROAD LINES AS UNDISCLOSED INCOME. THE CRUX OF ARGUMENT ADVANCED B Y SHRI A.V. SHONDE, LD. COUNSEL FOR THE ASSESSEE, CONTENDE D THAT SIX PAYMENTS, MADE TO VARIOUS PARTIES I.E. GROUND NO.1, (A), (C), (D), (E) AND (F) ARE IDENTICAL BY EXPLAINING THAT N OTHING WAS FOUND DURING THE SEARCH. OUR ATTENTION WAS INVITED TO PARA 6 (PAGE-7) OF THE ASSESSMENT ORDER BY ASSERTING THAT THE LD. ASSESSING OFFICER HIMSELF ACCEPTED THAT SERVICES WE RE RENDERED BY THE PARTIES UNDER QUESTION AND STILL MA DE AD-HOC DISALLOWANCE. OUR ATTENTION WAS FURTHER INVITED TO PAGE 551 TO 554 OF THE PAPER BOOK, WHEREIN, THERE WAS CONFIR MATION OF PAYMENT OF COMMISSION. IT WAS SUBMITTED THAT SAME O FFICER DECIDED THE CASES OF ASSESSEE AS WELL AS OF M/S REY NOLD PETRO CHEM LTD. OUR ATTENTION WAS INVITED TO PAGE 9 OF TH E ASSESSMENT ORDER WITH RESPECT TO FINDING IN THE CAS E OF REYNOLD PETRO. IT WAS EXPLAINED THAT RPL MADE PURC HASES AND NOT THE PRESENT ASSESSEE, WHICH IS EVIDENT FROM THE IT(SS) NO.25/MUM/2009 4 ASSESSMENT ORDER BY PROVIDING THE DETAILS OF RPL AN D NOT OF THE PRESENT ASSESSEE. OUR ATTENTION WAS FURTHER INV ITED TO PAGES 68 TO 70 OF THE PAPER BOOK CONTAINING THE DET AILS OF BANK PAYMENT BY ASSERTING THAT ALL THE PAYMENTS ARE THROUGH CHEQUE. THE LD. COUNSEL FURTHER INVITED OUR ATTENT ION TO PAGE 82 TO 88 OF THE DEBIT NOTES AND PAGE 349 TO 400 ASC ERTAINING THE DETAILS OF PAYMENT TO REYNOLD PETRO LTD. BY CLA IMING THAT ALL THE PAYMENTS ARE THROUGH CHEQUE. IT WAS EMPATHE TICALLY CONTENDED (PAGE 403) CONTAINING BLOCK ASSESSMENT OR DER BY POINTING OUT THAT NOTHING HAS BEEN ADDED BY THE SAM E ASSESSING OFFICER. THE LD. COUNSEL INVITED OUR FU RTHER ATTENTION TO PAGES 408 TO 416 BY CONTENDING THAT RE YNOLD HAS WROTE VARIOUS LETTERS TO THE ASSESSING OFFICER BY E XPLAINING THAT EITHER I AM GENUINE OR NOT GENUINE BUT THERE I S NO QUESTION OF DISALLOWING OF 3%. 2.1. ON THE OTHER HAND, THE LD. CIT-DR, SHRI NARE NDRA KUMAR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IM PUGNED ORDER BY CONTENDING THAT EVIDENCE CAN BE IN THE FOR M OF STATEMENT AND NOT NECESSARILY THAT ANY MATERIAL IS FOUND. THE LD. DR, PLACED RELIANCE UPON THE DECISION IN MANGE RAM MITTAL VS ACIT 103 ITD 389 (DEL. TRIB.)(SB), CIT VS HOTEL MERIA 332 ITR 537 (KER.), SHIVNATH RAI HARNARAIN (I NDIA) LTD. VS DCIT 117 ITD 74 (DEL.), SHRI LAKSHMI FINANCE & O RS. VS DCIT 238 CTR 323 (MAD.) AND NAGPUR DRUGS (P.) LTD. VS DCIT 98 ITD 285 (DEL.). 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, IT(SS) NO.25/MUM/2009 5 ARE THAT THE SEARCH AND SEIZURE ACTION U/S 132 OF T HE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) WAS CARRIED OUT AT THE PREMISE OF THE ASSESSEE ON 29/01/2003 AND WAS CONCL UDED ON 27/03/2003. NOTICE U/S 158BC OF THE ACT WAS SER VED UPON THE ASSESSEE ON 24/07/2003. THE ASSESSEE DECL ARED TOTAL UNDISCLOSED INCOME OF RS.12,50,000/- IN ITS R ETURN FILED ON FORM NO. 2B ON 09/02/2004. FURTHER NOTICES U/S 142(2)/143(2) R.W.S. 158BC WERE ISSUED ON 30/09/200 4 TO WHICH THE ASSESSEE MADE VARIOUS SUBMISSIONS ON VARI OUS DATES. BLOCK ASSESSMENT WAS COMPLETED, ASSESSING TH E TOTAL UNDISCLOSED INCOME AT RS.5,00,54,387/-, ON 25/02/20 05, MAKING ADDITIONS OUT OF COMMISSIONS/TRANSPORT SUPER VISION CHARGES PAID TO FOLLOWING PARTIES BY THE ASSESSEE C OMPANY WHICH ARE SUMMARIZED AS UNDER:- NAME OF THE PARTIES (RS.) AMT. (RS.) (A) (I) M/S STRAUSS INDUSTRIES & EXPORTS LTD. (II) M/S CELLULOSE & CHEMICALS LTD. 28,16,920 2,15,63,460 2,43,80,380 (B) M/S REYNOLD PETROCHEM LTD. & M/S SHREEJI ROADLINES LTD. (BEING 3% OF 21 CRORES PAID AS COMMISSION AND TRANSPORT SUPERVISION CHARGES 63,00,000 (C) M/S SHAGUN CASTING PVT. LTD. 37,01,000 (D) M/S MOIRA STEEL LTD. 99,83,000 (E) M/S KALANI INDUSTRIES LT D. 24,92,000 (F) M/S ENNAR STEEL & ALLOYS LTD. 32,98,000 2.3. IF THE AFORESAID SUMMARIZED FIGURES ARE ANALYZ ED, WE FIND THAT THE BUSINESS EXPENSES, IN THE NATURE O F COMMISSION OF TRANSPORT SUPERVISION CHARGES (CLAIME D TO BE IT(SS) NO.25/MUM/2009 6 PAID TO VARIOUS PARTIES) WERE RECORDED AND DISCLOSE D IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IF THIS FACTUAL POSITION IS ANALYZED WITH RESPECT TO SECTION 158BB OF THE ACT, WHICH DEALS WITH UNDISCLOSED INCOME, THEN IT CAN BE SAID THAT THE INCOME WHICH HAS BEEN DISCLOSED AND DULY RECORDED I N THE BOOKS OF ACCOUNTS OF THE ASSESSEE CANNOT BE INCLUDE D AS INCOME. MEANING THEREBY, IF THE ASSESSEE HAS DISCLO SED THE PARTICULARS OF THE EXPENDITURE AND STILL THE ASSESS ING OFFICER INTENDS TO TAKE DIFFERENT VIEW, THEN SUCH INCOME, C ANNOT BE TERMED AS UNDISCLOSED INCOME, THOUGH THE SAME MAY B E CONSIDERED FOR INCLUSION IN THE TOTAL INCOME DURING THE COURSE OF REGULAR ASSESSMENT THAT TOO ONLY IN ACCORDANCE W ITH LAW. SECTION 158BB OF THE ACT PRESCRIBES ABOUT COMPUTATI ON OF UNDISCLOSED INCOME OF THE BLOCK PERIOD, THEREFORE, FOR READY REFERENCE, WE ARE REPRODUCING HEREUNDER THE RELEVAN T PROVISION OF SECTION 158BB OF THE ACT. COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PE RIOD. 158BB. (1) THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHA LL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD COMPUTED, IN ACCORDANCE WITH THE PROVI SIONS OF THIS ACT, ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH O R REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERI ALS OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND REL ATABLE TO SUCH EVIDENCE, AS REDUCED BY THE AGGREGATE OF THE TOTAL INCOME, OR AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE OF THE L OSSES OF SUCH PREVIOUS YEARS, DETERMINED, (A) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 144 OR SECTION 147 HAVE BEEN CONCLUDED PRIOR TO THE DATE OF COMMEN CEMENT OF THE SEARCH OR THE DATE OF REQUISITION, ON THE BASIS OF SUCH ASSESSMENTS; (B) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER S ECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) O F SECTION 142 OR SECTION 148 BUT ASSESSMENTS HAVE NOT BEEN MA DE TILL THE DATE OF IT(SS) NO.25/MUM/2009 7 SEARCH OR REQUISITION, ON THE BASIS OF THE INCOME D ISCLOSED IN SUCH RETURNS; (C) WHERE THE DUE DATE FOR FILING A RETURN OF INCOM E HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, (A) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOK S OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH ENTRIES RESULT IN COMPUTATION OF LOSS FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD; OR (B) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOK S OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH INCOME DOES NOT EX CEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD; (CA) WHERE THE DUE DATE FOR FILING A RETURN OF INCO ME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL, IN CASES N OT FALLING UNDER CLAUSE (C); (D) WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DA TE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 HAS NOT EXPIRED, ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSAC TIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUI SITION RELATING TO SUCH PREVIOUS YEARS; (E) WHERE ANY ORDER OF SETTLEMENT HAS BEEN MADE UN DER SUB-SECTION (4) OF SECTION 245D, ON THE BASIS OF SUCH ORDER; (F) WHERE AN ASSESSMENT OF UNDISCLOSED INCOME HAD BEEN MADE EARLIER UNDER CLAUSE (C) OF SECTION 158BC, ON THE BASIS OF SUCH ASSESSMENT. EXPLANATION.FOR THE PURPOSES OF DETERMINATION OF U NDISCLOSED INCOME, (A) THE TOTAL INCOME OR LOSS OF EACH PREVIOUS YEAR SHALL, FOR THE PURPOSE OF AGGREGATION, BE TAKEN AS THE TOTAL INCOME OR LOSS C OMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT WITHOUT GIVING EFFECT TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABS ORBED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32: PROVIDED THAT IN COMPUTING DEDUCTIONS UNDER CHAPTER VI-A FOR THE PURPOSES OF THE SAID AGGREGATION, EFFECT SHALL BE G IVEN TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORB ED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32; (B) OF A FIRM, RETURNED INCOME AND TOTAL INCOME ASS ESSED FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD SHAL L BE THE INCOME IT(SS) NO.25/MUM/2009 8 DETERMINED BEFORE ALLOWING DEDUCTION OF SALARY, INT EREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED TO AN Y PARTNER NOT BEING A WORKING PARTNER : PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DETERMINED S HALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE PARTNERS, WHETHER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT; (C) ASSESSMENT UNDER SECTION 143 INCLUDES DETERMINA TION OF INCOME UNDER SUB-SECTION (1) OR SUB-SECTION (1B) OF SECTION 143. (2) IN COMPUTING THE UNDISCLOSED INCOME OF THE BLOC K PERIOD, THE PROVISIONS OF SECTIONS 68, 69, 69A, 69B AND 69C SHA LL, SO FAR AS MAY BE, APPLY AND REFERENCES TO 'FINANCIAL YEAR' IN THO SE SECTIONS SHALL BE CONSTRUED AS REFERENCES TO THE RELEVANT PREVIOUS YE AR FALLING IN THE BLOCK PERIOD INCLUDING THE PREVIOUS YEAR ENDING WITH THE DATE OF SEARCH OR OF THE REQUISITION. (3) THE BURDEN OF PROVING TO THE SATISFACTION OF TH E ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME HAD ALREADY BEEN DISCLO SED IN ANY RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE COMMENCE MENT OF SEARCH OR OF THE REQUISITION, AS THE CASE MAY BE, SHALL BE ON THE ASSESSEE. (4) FOR THE PURPOSE OF ASSESSMENT UNDER THIS CHAPTE R, LOSSES BROUGHT FORWARD FROM THE PREVIOUS YEAR UNDER CHAPTER VI OR UNABSORBED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32 SH ALL NOT BE SET OFF AGAINST THE UNDISCLOSED INCOME DETERMINED IN THE BL OCK ASSESSMENT UNDER THIS CHAPTER, BUT MAY BE CARRIED FORWARD FOR BEING SET OFF IN THE REGULAR ASSESSMENTS. 2.4. IF THE AFORESAID PROVISION OF THE ACT IS ANAL YZED, IT IS EMPTILY CLEAR THAT THE PHRASE SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFF ICER IN SECTION 158BB CANNOT BE BISECTED OR TAKEN IN ISOLAT ION FOR THE PURPOSE OF COMPUTATION. SUCH OTHER MATERIAL OR INF ORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER SHOULD BE RELATABLE TO SUCH EVIDENCE. THE WORD SUCH USED AS A PREF IX TO THE WORD EVIDENCE ASSUMES MUCH SIGNIFICANCE IN THIS P ROVISION AS IT INDICATES ONLY THE EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNTS OR OTHER DOCUMENTS , AT THE IT(SS) NO.25/MUM/2009 9 TIME OF SEARCH. ANY OTHER MATERIAL CANNOT FORM THE BASIS OF COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PERI OD. OUR VIEW IS FORTIFIED BY THE DECISION FROM HONBLE MADR AS HIGH COURT IN CIT VS G. K. SENNIAPPAN (2006) 284 ITR 220 (MAD.) AND CIT VS S. AJIT KUMAR (2008) 300 ITR 152 (MAD.). IN THE ABSENCE OF ANY FINDING BY THE ASSESSING OFFICER IN THE BLOCK ASSESSMENT ORDER WITH RESPECT TO SUCH EVIDENCE THAT THE CLAIMED COMMISSION WERE NOT RECORDED IN THE BOOKS A T LEAST ON THE DATE OF SEARCH AND SINCE THE ASSESSMENT WAS BAS ED UPON THE INCOME RETURNED BY THE ASSESSEE AND DULY MENTIO NED INTEREST HE BOOKS OF ACCOUNTS, IN OUR VIEW, THE ACT ION OF THE ASSESSING OFFICER IS NOT JUSTIFIED, THEREFORE, IT C AN BE CONCLUDED THAT THE WHOLE BASIS OF MAKING THE ADDITI ON BY THE ASSESSING OFFICER IS ONLY BASED UPON THE STATEMENTS AND NOT ON THE BASIS OF MATERIAL, IF ANY, FOUND DURING THE SEARCH, THE ADDITION SO MADE CANNOT STAND ON ITS OWN LEGS. THE RATIO LAID DOWN IN CIT VS BINOY MATHAI (2009) 311 ITR 226 (KER .) AND CIT VS R.M. PATEL (2008) 298 ITR 274 (MAD.), CIT VS K. BHUVENANDRAN (2008) 303 ITR 235 (MAD.) SUPPORTS OUR VIEW. ADMITTEDLY, THE STATEMENT IS A GOOD PIECE OF EVIDEN CE BUT IT HAS TO BE CORROBORATED WITH THE MATERIAL AND MERELY ON THE BASIS OF STATEMENT, THE ADDITION, IF ANY, MADE BY T HE ASSESSING OFFICER HAVING NO LEGS TO STAND, MORE SPECIFICALLY, WHEN THE PAYMENTS WERE MADE THROUGH CHEQUE, DULY CONFIRMED B Y THE PARTIES, THEREFORE, THE ASSESSEE IS HAVING A MERIT IN ITS CONTENTION. THE RATIO LAID DOWN IN CIT VS K.P. CHA NDRADASAN (2011) 331 ITR 443 (KER.), CIT VS TEMPLETON ASSET IT(SS) NO.25/MUM/2009 10 MANAGEMENT (INDIA) PVT. LTD. (2011) 337 ITR 451 (BO M.) SUPPORTS OUR VIEW. 2.5. IF THE OBJECT OF SECTION 158BB OF THE ACT IS ANALYZED, IT CAN BE SAID THAT BLOCK ASSESSMENT COMPUTATION IN SECTION 158BB DOES NOT EXCLUDE EITHER THE CONCEPT OF PREVI OUS YEAR OR CONCEPT OF TOTAL INCOME, THEY ARE RETAINED. S ECTION 158BB (1) INCORPORATES THE PRINCIPLE OF AGGREGATION OF TO TAL INCOME OF THE PREVIOUS YEAR FALLING WITHIN THE BLOCK PERIOD C OMPUTED IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER IV, WHICH DEALS WITH COMPUTATION OF TOTAL INCOME. EVEN COMPUTATION OF UNDISCLOSED INCOME U/S 158BB HAS TO BE DONE IN TH E MANNER PROVIDED UNDER CHAPTER IV DEALING WITH COMP UTATION OF TOTAL INCOME. IN VIEW OF THE NON OBSTANTE CLAUS E IN SECTION 158BA AND RETENTION OF THE CONCEPT OF PREVIOUS YEA R AND TOTAL INCOME ONE HAS TO READ SECTION 158BB WITH S ECTION 4. FROM A BARE READING OF SECTION 158BB, IT IS CLEAR T HAT THE UNDISCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE CO MPUTED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH O R REQUISITION OF BOOKS OF ACCOUNTS OR DOCUMENTS AND SUCH OTHER MA TERIALS AS AVAILABLE WITH THE ASSESSING OFFICER. THE INCIDE NT OF SEARCH IS THE FOUNDATION FOR APPLICABILITY OF CHAPTER XIV- B, AS WAS HELD IN HOTEL KUMAR PALACE VS CIT (2006) 283 ITR 11 0 (PUNJAB & HARYANA). 2.6. AS PER THE PROVISIONS OF SECTION 158BB (3), T HE BURDEN OF PROVING TO THE SATISFACTION OF THE ASSESS ING OFFICER THAT THE ALLEGED UNDISCLOSED INCOME HAS ALREADY BEE N IT(SS) NO.25/MUM/2009 11 DISCLOSED IS UPON THE ASSESSEE. AS CANVASSED BY TH E LD. COUNSEL FOR THE ASSESSEE, THE ALLEGED COMMISSION/TR ANSPORT SUPERVISIONS CHARGES HAD ALREADY BEEN DISCLOSED BY THE ASSESSEE IN ITS COMPUTATION OF INCOME AND DULY DISC LOSED IN THE RETURN OF INCOME, THEREFORE, THE ONUS HAD ALREA DY BEEN DISCHARGED BY THE ASSESSEE. 2.7. IF THIS ISSUE IS ANALYZED WITH RESPECT TO SCO PE AND AMBIT OF SECTION 158BD OF THE ACT, A PERUSAL OF THE SECTION MAKES IT CLEAR THAT THE ASSESSING OFFICER NEED ONLY SATISFY HIMSELF THAT UNDISCLOSED INCOME BELONGS TO ANY PERS ON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MAD E U/S 132 OR WHOSE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS O R ASSET WERE REQUISITIONED U/S 132A OF THE ACT. THE BOOKS O F ACCOUNT OR OTHER DOCUMENT OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSON. THUS, SECTION 158BD IS AN ENABLING PROVISION TO ASSESS A PERSON OTHER THAN TH E ASSESSEE SEARCHED OR OTHER THAN THE ASSESSEE WHOSE BOOKS OF ACCOUNTS AND DOCUMENTS WERE CALLED FOR AND VERIFIED U/S 132A OF THE ACT. MEANING THEREBY, HANDING OVER OF THE DOCUMENTS OR OTHER MATERIAL IS A NECESSARY CONDITION, THUS, IT OOZES O UT THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEME NT AND THE CORROBORATIVE MATERIAL SHOULD BE IN EXISTENCE. 2.8. IF THE OBSERVATION MADE IN THE ASSESSMENT OR DER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION IT(SS) NO.25/MUM/2009 12 DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL AND T HE RATIO LAID DOWN IN VARIOUS ORDERS, DISCUSSED HEREINABOVE ALONG WITH THE LANGUAGE USED IN SECTION 158BB OF THE ACT, IF K EPT IN JUXTAPOSITION AND ANALYZED, THE UNDISPUTED FACT OOZ ES OUT IS THAT THE CLAIMED BUSINESS EXPENSES IN THE NATURE OF COMMISSION/TRANSPORTATION SUPERVISION CHARGES, PAID TO THE PARTIES, WERE DULY RECORDED/DISCLOSED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THUS, SUCH EXPENSES CANNOT BE ASSE SSED AS UNDISCLOSED INCOME WITHIN THE SCOPE OF SECTION 158B OF THE ACT MERELY ON THE GROUND THAT ADVERSE INFERENCE IS DRAWN BY THE ASSESSING OFFICER. EVEN HONBLE APEX COURT IN INDO-ADAN SALT MANUFACTURING AND TRADING COMPANY VS CIT 159 I TR 624 HELD THAT IT IS THE PRIMARY FACTS WHICH ARE TO BE D ISCLOSED BY THE ASSESSEE AND NOT INFERENTIAL FACT. THE RATIO LA ID DOWN IN CIT VS VIKRAM A. DOSHI 256 ITR 129 (BOM.), PRAKASH FOODS VS DCIT 64 ITD 396 (PUNE), CHITRA DEVI VS ACIT 77 ITJ 640 (JODH.) ITAT AND C. J. SHAH & COMPANY VS ACIT 118 T AXMAN 183 (MUM.) SUPPORTS OUR VIEW. A PERUSAL OF SECTIONS 158BA, SECTION 158BB AND SECTION 158BC OF THE ACT MAKES IT CLEAR THAT ASSESSMENT COULD BE MADE ONLY IN RESPECT OF UN DISCLOSED INCOME AND SUCH UNDISCLOSED INCOME MUST COME AS A R ESULT OF SEARCH, THUS, UNDISCLOSED INCOME FOR THE PURPOSES O F CHAPTER XIVB CANNOT BE MADE ON THE BASIS OF PRESUMPTION, ES TIMATION AND SURMISES BUT HAS TO BE DETERMINED ON THE BASIS OF DOCUMENTS, MATERIAL, EVIDENCE AND INFORMATION FOUND DURING THE SEARCH AND SUCH DOCUMENTS/INFORMATION MUST BE AUTHENTIC RELIABLE AND VERIFIABLE. OUR VIEW IS FORT IFIED BY THE IT(SS) NO.25/MUM/2009 13 RATIO LAID DOWN IN SUNDER AGENCIES VS DCIT 63 ITD 2 45 (MUM), KASAT PAPER AND PULP LTD. VS ACIT 74 ITD 755 (PUNE) AND JGA S. SHETTY VS ACIT 69 ITD 336 (MUM.), MORE SPECIFICALLY, WHEN, THE PAYMENTS WERE MADE BY ACCOU NT PAYEE CHEQUE AND THE RESPECTIVE PARTIES CONFIRMED AND ADM ITTED OF THE RECEIPT OF THE SAID PAYMENTS FOR THE SERVICES P ROVIDED BY THEM TO THE ASSESSEE. WE ALSO NOTE THAT IF THE ASS ESSING OFFICER WAS NOT SATISFIED WITH THE SERVICES RENDERE D BY THE PARTIES TO THE ASSESSEE THEN EITHER THE AMOUNTS CAN BE FULLY DISALLOWED OR CAN BE FULLY ALLOWED, BECAUSE, THERE IS NO QUESTION OF AD-HOC DISALLOWANCE, UNLESS AND UNTIL A NY CORROBORATIVE MATERIAL IS PLACED ON RECORD FOR MAKI NG SUCH DISALLOWANCE. 2.9. SO FAR AS, THE LEGALITY ASPECT IS CONCERNED, THE LD. CIT-DR CONTENDED THAT THE EVIDENCE CAN BE IN THE FO RM OF STATEMENT AS ALWAYS IT IS NOT NECESSARY THAT ANY MA TERIAL IS FOUND. THE LD. CIT-DR RELIED UPON CERTAIN CASES, W HICH HAVE BEEN MENTIONED IN THE PRECEDING PARA OF THIS ORDER, WHILE ARGUING THE ISSUE. NOW, WE SHALL DEAL WITH THE CAS ES RELIED UPON BY HIM. SO FAR AS, THE CASE IN 103 ITD 389 (S UPRA) IS CONCERNED, IN THAT CASE, INCRIMINATING DOCUMENTS WE RE FOUND, WHEREAS IN THE CASE OF 332/537 (KERALA) IS CONCERNE D, STATEMENT OF THE PARTNER WAS RECORDED, WHEREAS, IN THE PRESENT APPEAL, THE STATEMENT WAS OF A THIRD PARTY. LIKEWISE, 117 ITD 74 (DEL.) IS CONCERNED, THIS CASE WAS WITH RESPECT TO 153A OF THE ACT, THEREFORE, NOT APPLICABLE. LIKEWI SE, IN CASE OF 98 ITD 285 (DEL.) IS CONCERNED, MATERIAL WAS FOUND AND THE IT(SS) NO.25/MUM/2009 14 CASE WAS BUILT UPON SUCH MATERIAL, THEREFORE, THE C ASES RELIED UPON BY THE LD. CIT-DR MAY NOT HELP THE REVENUE, WH EREAS, THE CASES, DISCUSSED BY US, IN THE RELEVANT PARAS, FAVOURS THE ASSESSEE. SO FAR AS, THE ARGUMENT OF THE LD. CIT-DR, WHETHER AFFIDAVIT CAN NULLIFY STATEMENT, IS CONCERNED, RELI ANCE WAS PLACED IN RAM RATAN AND OTHERS VS CIT 142 ITR 618, IN THAT CASE RECOVERY PROCEEDINGS STARTED 15 YEARS AFTERWAR DS, WHEREAS, IN GARIBDAS CHANDRIKA PRASAD VS CIT 230 IT R 771(MP) IS CONCERNED, IT WAS AS CASE OF PARTNER OF THE ASSESSEE FIRM, WHO WAS CONTRADICTING HIMSELF. IN THE PRESEN T APPEAL, NO INCRIMINATING MATERIAL WAS FOUND, THEREFORE, AS DIS CUSSED IN VARIOUS PARAS OF THIS ORDER, THE AD-HOC DISALLOWANC E, MADE BY THE ASSESSEE THAT TOO ON THE BASIS OF STATEMENT ONL Y IS NOT JUSTIFIED MORE SPECIFICALLY WHEN EVIDENCE WAS PRODU CED BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM. BANK STATEMENTS OF THE RECIPIENTS OF THE COMMISSION/SERVICE CHARGES AND AL SO OF THE ASSESSEE WERE DULY PRODUCED, SAME WERE DISCLOSED IN THE RESPECTIVE STATEMENT OF ACCOUNTS, THEREFORE, WE FIN D MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. S O FAR AS, THE CONTENTION OF CROSS EXAMINATION OF SUCH WITNESS IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE, UNCONTROVERTEDLY, EXPLAINED, THAT CROSS EXAMINATION WAS NOT ALLOWED TO THE ASSES SEE IN SPITE OF SPECIFIC REQUEST MADE BY THE ASSESSEE. SO FAR AS, THE CONTENTION OF THE LD. CIT-DR THAT WHY SUCH PERSON L EFT BOMBAY, IS CONCERNED, IT WAS EXPLAINED BY THE ASSES SEE THAT DUE TO HEAVY LOSSES, THEY LEFT BOMBAY AND DULY WROT E A LETTER IT(SS) NO.25/MUM/2009 15 DATED 21/02/2005 (PAGE-170 OF THE PAPER BOOK) AND A LL THESE LETTERS WERE SENT TO THE ASSESSING OFFICER. NO EFFO RTS WERE MADE BY THE ASSESSING OFFICER TO EXAMINE THEM AFTER THIS LETTER. (PAGES 173, LETTER OF C. BOHRA)(PAGE 175 BANK STATE MENT, PAGE 177(NO CASH WITHDRAWN) AND ALL THESE PERSONS RESPON DED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) . FURTHER PAGES 212 AND 213 OF THE PAPER BOOK FORTIFIES THE S TAND OF THE ASSESSEE (EVEN PAGES 54 AND 57 WERE FILED DURING OR IGINAL PROCEEDINGS, MEANING THEREBY THE CONFIRMATION WERE FILED). THE PRESENT CASE IS OF A BLOCK ASSESSMENT, THEREFORE, W HAT IS THE SEIZED MATERIAL HAS TO BE CONSIDERED. THE ADDITION IS EXPECTED TO BE MADE ON THE BASIS OF SEIZED MATERIAL AND NOT ON THE BASIS OF STATEMENTS AS DISCUSSED HEREINABOVE. OUR VIEW IS FORTIFIED BY THE DECISION IN VINOD KUMAR JAIN VS AC IT 1 SOT 352 (DEL.) AND N. R. PAPER AND BOARD LIMITED AND OTHERS VS DCIT 234 ITR 733 (GUJ.). HONBLE GUJARAT HIGH COURT HELD AS UNDER:- CHAPTER XIV-B OF THE INCOME-TAX ACT, 1961, LAYS DO WN A SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES AND PROVID ES FOR ASSESSMENT OF UNDISCLOSED INCOME AS A RESULT OF SEA RCH. UNDER SECTION 158BB(1) , READ WITH SECTION 158BC OF THE I NCOME-TAX ACT, 1961, WHAT IS ASSESSED IS THE UNDISCLOSED INCOME OF THE BLOCK PERIOD AND NOT THE TOTAL INCOME OR LOSS OF THE PREVIOUS YE AR REQUIRED TO BE ASSESSED IN THE NORMAL REGULAR ASSESSMENT UNDER SEC TION 143(3) . THIS EXERCISE UNDER SECTION 143(2) AND (3) FOR REGU LAR ASSESSMENT STANDS IN CONTRAST TO THE EXERCISE OF THE ASSESSING OFFICER UNDER SECTION 158BB READ WITH SECTION 158BC(B) , WHERE HE HAS TO ASSESS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD ON THE BASIS OF IT(SS) NO.25/MUM/2009 16 THE EVIDENCE FOUND AND MATERIAL AVAILABLE AS A RESU LT OF THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. THE REGULAR ASSESSMENT IS TO ASSESS THE TOTAL INCOME OR LOSS OF THE PREVIOUS YEAR WHERE A RETURN IS FILED UNDER SECTION 139 AND THE A SSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIENT UNDER SECTION 1 43(2) TO ENSURE THAT THE ASSESSEE HAD NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDERPAID TAX IN ANY MANNER. THUS, WE FIND MERIT IN THE CONTENTION OF THE ASSESS EE AS NO MATERIAL WAS FOUND DURING SEARCH PROCEEDINGS ON 29/01/2003 AND THE ADDITION/AD-HOC DISALLOWANCE HAS BEEN MADE MERELY ON THE BASIS OF STATEMENT, THUS, THE ST AND OF THE ASSESSING OFFICER CANNOT BE SAID TO BE JUSTIFIED. 2.10. NOW, WE SHALL DEAL WITH THE DISALLOWANCE OF COMMISSION PAID TO EACH AND EVERY PARTY. THE FIRST ONE IS M/S STRAUSS INDUSTRIES & CELLULOSE AND CHEMICALS LTD.. WE NOTE THAT IN A.Y. 1999-2000, THE ASSESSEE PAID COMMISSI ON OF RS.11,98,960/- AND FOR A.Y. 2000-01, IT WAS RS.16,1 7,960/-. THE IMPUGNED COMMISSIONS WERE PAID BY THE ASSESSEE FOR THE SERVICES RENDERED BY THE PAYEE FOR PROCURING AND AR RANGING BUSINESS OF M/S ENSOURCE ENERGY INDIA LTD.. THE FOL LOWING QUANTITY OF IMPORTED COAL FROM DIFFERENT PORTS TO T HE PLACE OF DESTINATION WAS TRANSPORTED. ASSESSMENT YEAR ENSOURCE ENERGY PVT. LTD. TOTAL QUANTITY IN MT 1999 - 2000 1,19 ,896/ - 2000 - 01 80,898/ - THE UNCONTROVERTED POSITION IS THAT DEBIT NOTES WER E RECEIVED REGULARLY FROM M/S STRAUSS INDUSTRIES & EX PORTS LTD., IT(SS) NO.25/MUM/2009 17 IN RESPECT OF SERVICES PROVIDED TO THE ASSESSEE, GI VING FULL DETAILS OF NAME OF THE VESSEL IN WHICH COAL WAS IMP ORTED, THE QUANTITY OF COAL TRANSPORTED, RATE OF COMMISSION AN D THE TOTAL AMOUNT DUE TO THEM, ALL THESE DETAILS, COPIES OF TH E DEBITS NOTES WERE DULY SUBMITTED BEFORE THE ASSESSING OFFI CER. THE PAYMENTS WARE MADE THROUGH ACCOUNT PAYEE CHEQUE AND THE COPY OF ACCOUNT OF M/S STRAUSS INDUSTRIES & EXPORT LTD., IN THE BOOKS OF THE ASSESSEE, WAS ALSO PROVIDED. IT WAS A REGULAR BUSINESS TRANSACTION REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. A CONFIRMATION BY WAY OF AN AFFIDAVIT FR OM THE DIRECTOR (SHRI NAVNIT N.PATEL) OF M/S STRAUSS INDUS TRIES & EXPORT LTD., IN RESPECT OF SERVICES PROVIDED BY THE M, COMMISSION PAYMENT, DETAILS OF ACTUAL PAYMENT OF CO MMISSION WERE PRODUCED BEFORE THE ASSESSING OFFICER. IT IS ALSO NOTED THAT DURING THE COURSE OF SURVEY, STATEMENT U/S 133 A OF SHRI NAVNIT N. PATEL WAS RECORDED ON 29/01/2003, WHEREIN , ON OATH, HE TENDERED THAT THE STATEMENT WAS NOT CORREC TLY RECORDED AND THE OFFICER DID NOT RECORD CORRECTLY W HATEVER IS STATED BY HIM. HE HAS FURTHER CONFIRMED THAT THE ST ATEMENT WAS NOT THE TRUE ANSWERS AND HE CONFIRMED THAT HE A SKED THE COPIES OF THE STATEMENT, WHICH WAS NOT PROVIDED TO HIM AND ONLY AFTER OBTAINING THE COPIES FROM THE INCOME TAX DEPARTMENT ON 15/12/2003 BY THE ASSESSEE AND SUPPLYI NG SUCH COPY TO MR. NAVNIT PATEL, HE FILED AN AFFIDAVI T ON 06/01/2004. WE HAVE PERUSED THE AFFIDAVIT, WHEREIN, IN PARA- 6, HE CLEARLY MENTIONED/SWORN THAT SERVICES WERE RE NDERED TO THE ASSESSEE BY M/S STRAUSS INDUSTRIES & EXPORT LTD . ALONG WITH ONE MR. FATEHRAJ THANVI (PAGE 163 AND 164 OF T HE PAPER IT(SS) NO.25/MUM/2009 18 BOOK) AND MR. C.S. BOHRA (PAGE 161 AND 162 OF THE P APER BOOK). THE AFFIDAVIT IS SELF EXPLANATORY, IT IS AL SO NOTED THAT MR. FATEHRAJ THANVI AS WELL AS MR. C.S. BOHRA, IN T HEIR RESPECTIVE AFFIDAVIT, CONFIRMED THE FACTS STATED BY SHRI NAVNIT PATEL. IN PARA -7 OF THE AFFIDAVIT OF SHRI NAVNIT P ATEL (PAGES 157 TO 160 OF THE PAPER BOOK II DULY FILED BEFORE THE A SSESSING OFFICER/FIRST APPELLATE AUTHORITY), HE CLEARLY, CON FIRMED THAT, HE EXPLAINED THE TRUE NATURE OF TRANSACTION TO THE OFFICER OF THE DEPARTMENT AND TRUE STATE OF AFFAIRS WAS NOT RECORD ED WHILE RECORDING OF THE STATEMENT BY THE OFFICERS OF THE D EPARTMENT DURING SURVEY PROCEEDINGS. IN PARA -8 OF THE AFFIDA VIT, HE HAS CLEARLY STATED THAT ANSWER TO QUESTION NOS. 5,6, 7 AND 8 ARE NOT CORRECTLY RECORDED AND HE CLARIFIED THE FACTUAL POSITION BY PROVIDING BRAKE UP OF COMMISSION RECEIVED BY HIS CO MPANY (PARA-9) FROM THE ASSESSEE WHICH ALSO EXACTLY TALLI ES WITH THE DETAILS SUBMITTED BEFORE THE ASSESSING OFFICER BY T HE ASSESSEE. IT IS ALSO NOTED THAT IN PARA-10 OF THE AFFIDAVIT, MR. NAVNIT PATEL, CONFIRMED THAT CHEQUES WERE DEPOSITED IN THE BANK ACCOUNT OF THE COMPANY AND NO CASH WAS WITHDRAWN FR OM THE BANK ACCOUNTS, BY FURTHER CONFIRMING THE TRANSACTIO N (PARA- 11) THAT THE TRANSACTIONS WITH THE ASSESSEE ARE GEN UINE TRANSACTION. NOW, THERE ARE TWO VERSIONS PITTED AG AINST EACH OTHER, ONE IS THE STATEMENT RECORDED DURING SURVEY AND SECOND ONE IS THE DOCUMENTARY EVIDENCE WHICH IS BASED UPON FACTUAL MATRIX, THEREFORE, IN OUR VIEW, THE LATER VERSION C ARRIES MORE WEIGHT IN COMPARISON TO THE STATEMENT WHICH IS NOT CORROBORATED WITH MATERIAL FACTS, THEREFORE, IN OUR VIEW, NO AD- IT(SS) NO.25/MUM/2009 19 HOC DISALLOWANCE IS PERMISSIBLE UNDER THE FACTS AND THE CIRCUMSTANCES AVAILABLE ON RECORD. (A) SO FAR AS PAYMENT OF COMMISSION OF M/S CELLULOSE AN D CHEMICALS LTD. IS CONCERNED, THE ASSESSEE PAID COMM ISSION TO THEM OR INTRODUCING THE AHMEDABAD ELECTRICITY COMPA NY LTD. (DURING THE F.Y. 1998-99 AND 1999-2000) AND PAID COMMISSION TO THEM AMOUNTING TO RS.90,14,560/- (A.Y . 1999- 2000) AND RS.1,25,48,900/- (A.Y. 2000-01). THE PAYM ENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE WHICH WERE REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. IT IS NO T WORTHY THAT COPIES OF ACCOUNTS FOR THESE ASSESSMENT YEARS WERE SUBMITTED BEFORE THE ASSESSING OFFICER AND IN THE RETURN OF I NCOME, THE PAYMENT OF COMMISSION OF BOTH THE YEARS WAS DULY RE FLECTED IN THE PROFIT & LOSS ACCOUNT. FURTHER, VIDE AFFIDAVIT DATED 06/01/2004, MR. NAVNIT N. PATEL, DIRECTOR OF THE CO MPANY CONFIRMED THE TRANSACTIONS OF M/S CELLULOSE & CHEMI CAL LTD. WITH THE ASSESSEE AND FURTHER CONFIRMED THE COMMISS ION AMOUNT FOR THE SERVICES RENDERED BY THEM. IT IS ALS O NOTED THAT THE LD. ASSESSING OFFICER CONVENIENTLY IGNORED THE REPLY OF M/S FATEHRAJ THANVI (LETTER DATED 21/02/2005) AND OF M/ S C.S. BOHRA (LETTER DATED 18/02/2005), WHICH WERE SUBMITT ED BY THE ASSESSEE ON 23/02/2005 (PAGES 170 TO 174 OF THE PAP ER BOOK). IN THESE LETTERS, BOTH OF THEM CONFIRMED RECEIPT OF COMMISSION AND SERVICES RENDERED BY THEM AND ALSO SUPPLIED THE COPIES OF BANK STATEMENT OF BOTH THE COMPANIES SHOWING RECEIP T OF COMMISSION. IT IS WORTH MENTIONING HERE THAT IF TH E ASSESSEE HAS DISCLOSED THE TRANSACTIONS (PRIOR TO SEARCH) IN THE REGULAR IT(SS) NO.25/MUM/2009 20 BOOKS OF ACCOUNTS AND SINCE THESE ARE REGULAR BUSIN ESS TRANSACTION DULY SUPPORTED BY DOCUMENTS AND CONFIRM ATION AND THE FACT, THE RECIPIENT AND ALSO CONFIRMED THE TRANSACTION THEN THERE IS NO ROOM FOR DOUBT AND DEBATE AND CANN OT FORM BASIS OF BLOCK ASSESSMENT. IT IS ALSO NOTED THAT D URING SEARCH, NO INCRIMINATING MATERIAL, DOCUMENTS/OTHER PAPERS W ERE FOUND SUGGESTING THAT THE PAYMENT OF COMMISSION FAL LS WITHIN THE DEFINITION OF UNDISCLOSED INCOME. THE ASSESSEE BEFORE THE DATE OF SEARCH ITSELF MADE THE ENTRIES IN THE BOOKS OF ACCOUNTS WHICH IS AUTHENTICATED BY THE CORRESPONDING CONFIRM ATION BY THE RECIPIENT, THEREFORE, THE COMMISSION PAYMENT CA NNOT FORM PART OF UNDISCLOSED INCOME. THE DEPARTMENT IS HEAVI LY PLACING RELIANCE UPON THE STATEMENT OF MR. PATEL, RECORDED DURING SURVEY. HOWEVER, NEITHER ANY OPPORTUNITY WAS PROVI DED TO THE ASSESSEE TO CROSS EXAMINE HIM NOR ANY EVIDENCE WAS PRODUCED CONNECTING THE STATEMENT OF MR. PATEL WITH THE RECO RD OF THE ASSESSEE AND ALSO OF THE COMPANY. THE ASSESSEE ALS O FURNISHED BANK STATEMENT OF SATARA SAHKARI BANK LTD . IN THE CASE OF CELLULOSE AND CHEMICALS LTD. (PAGES 175 & 1 76 OF THE PAPER BOOK), BANK STATEMENT OF UNITED BANK OF INDIA (PAGES 177 & 178 OF THE PAPER BOOK), BANK STATEMENT OF UNI ON BANK OF INDIA (PAGES 179 TO 183 OF THE PAPER BOOK), LEDG ER ACCOUNT OF STRAUSS IND. & EXPORT LTD. IN THE BOOKS OF THE A SSESSEE FOR THE PERIOD FROM 01/04/1999 TO 31/03/2000 (PAGE 184 OF THE PAPER BOOK) AND LEDGER ACCOUNT OF CELLULOSE & CHEMI CALS (PAGES 185 & 186 OF THE PAPER BOOK). ALL THESE DOCU MENTS WERE DULY FILED BEFORE THE ASSESSING OFFICER AS WEL L AS THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, PR IMA FACIE, IT(SS) NO.25/MUM/2009 21 IT IS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AND THE ADDITION, SO MADE, DESERVES TO BE DELETED, MORE SPECIFICALLY, WHEN NO CORROBORATIVE MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE. (B) SO FAR AS, DISALLOWANCE AT THE RATE OF 3% OUT OF T HE AMOUNT PAID TO M/S REYNOLD PETRO CHEM. LTD. AND SHR EEJI ROAD LINES LTD. IS CONCERNED, THE ASSESSEE PAID COM MISSION OF RS.179.09 LAKHS (A.Y. 2002-03) AND RS.429.97 LAKHS (A.Y. 2003-04), WHICH WERE PAID FOR SERVICES RENDERED BY THESE PAYEES FOR PROCURING AND ARRANGING BUSINESS OF AHMA DABAD ELECTRICITY COMPANY LTD. AND M/S COASTAL ENERGY PVT . LTD., WHICH IS AS UNDER:- A.Y. 2002-03 A) COMMISSION PAID OF RS.91,17,475/- IN RESPEC T OF TRANSACTION WITH THE AHAMADABAD ELECTRICITY COMPANY LTD. B) COMMISSION OF RS.87,91,525/- PAID IN RESPECT O F TRANSACTION WITH M/S COASTAL ENERGY PVT. LTD. A.Y. 2003-04 A) COMMISSION OF RS.2,47,88,640/- IN RESPECT OF T RANSACTION WITH THE AHAMADABAD ELECTRICITY COMPANY LTD. B) COMMISSION OF RS.1,82,09,250/- PAID IN RESPECT OF TRANSACTION WITH M/S COASTAL ENERGY PVT. LTD. THE ASSESSEE TRANSPORTED FOLLOWING QUANTITY OF IMPO RTED COAL FROM DIFFERENT PORTS TO THE PLACE OF DESTINATION IN A.Y. 2002-03 AND 2003-04 WITH RESPECT TO BUSINESS PROCURED FORM BOTH THESE COMPANIES WHICH IS SUMMARIZED AS UNDER:- IT(SS) NO.25/MUM/2009 22 ASSESSMENT YEARS THE AHMEDABAD ELECTRICITY COMPANY LTD. (TOTAL QUANTITY) M/S COASTAL ENERGY PVT. LTD. (TOTAL QUANTITY) 2002 - 03 3,64,699 MT 3,51,661 MT. 2003 - 04 6,19,716 MT. 3,64,185 MT. IT IS ALSO NOTED THAT DEBITS NOTES FROM M/S RENYOLD PETRO CHEM. LTD., IN RESPECT OF SERVICES PROVIDED BY THEM , WERE REGULARLY RECEIVED BY THE ASSESSEE, WHICH GIVES THE FULL DETAILS OF NAME OF VESSELS IN WHICH COAL WAS IMPORTED, QUAN TITY OF COAL TRANSPORTED, RATE OF COMMISSION AND TOTAL AMOUNT DU E TO THEM WAS AVAILABLE AND COPIES OF THE SUCH DEBIT NOTES (P AGES 146 TO 156 OF PAPER BOOK II) WERE SUBMITTED BEFORE THE ASS ESSING OFFICER AS WELL AS BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS). THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE, COPY OF ACCOUNT OF M/S REYNOLD PETRO CHEM. LTD., IN THE BOOKS OF THE ASSESSEE, WERE DULY SUBMITTED BY T HE ASSESSEE AND THESE ARE REGULAR BUSINESS TRANSACTION DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. A CONF IRMATION BY WAY OF AN AFFIDAVIT, FROM M/S RENYOLD PETRO CHEM LT D., WITH RESPECT TO SERVICES PROVIDED BY THEM, TOTAL PAYMENT OF COMMISSION, ACTUAL DETAILS OF PAYMENT OF COMMISSION WERE SUBMITTED BEFORE THE ASSESSING OFFICER. IT IS ALSO NOTED THAT M/S RENYOLD PETROL CHEM LTD. IS A PUBLIC LTD. COMPA NY, REGULARLY ASSESSED TO TAX AND DULY FILED ITS RETURN OF INCOME FOR A.Y. 2002-03 AND 2003-04 CONFIRMING THAT COMMISSION WAS RECEIVED BY THEM AND REGULARLY REFLECTED IN THEIR R EGULAR BOOKS OF ACCOUNTS AND FURTHER ASSESSED TO TAX AT SURAT. T HIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. IT IS ALSO NOTED IT(SS) NO.25/MUM/2009 23 THAT THE LD. ASSESSING OFFICER ISSUED A LETTER TO M /S RENYOLD PETROL CHEM LTD. WITH RESPECT TO TRANSACTION ENTERE D INTO WITH THE ASSESSEE AND SAID LETTER WAS DULY ACKNOWLEDGED AND RESPONDED CONFIRMING THE TRANSACTION AND RECEIPT OF COMMISSION, DIRECTLY TO THE ASSESSING OFFICER. IT IS ALSO NOTED THAT M/S AHMADABAD ELECTRICITY COMPANY AND COASTAL ENERGY PVT. LTD. WERE INTRODUCED BY M/S RENYOLD PETROL CHE M LTD. TO THE ASSESSEE AND EARNED REVENUE FROM EXECUTING THE TRANSACTIONS WITH BOTH THESE PARTIES. THE ASSESSEE PAID COMMISSION RANGING FROM 25 TO 50 PER TON IN TWO YEA RS AND COLLECTED CHARGES RANGING FROM RS.502 TO 745 PER TO N, MEANING THEREBY, THE ASSESSEE EARNED HUGE INCOME OU T OF THIS TRANSACTION AS A PRUDENT BUSINESSMAN AND SUCH EXPEN DITURE WAS INCURRED IN REGULAR COURSE OF BUSINESS FOR WHIC H DEDUCTION WAS CLAIMED U/S 37(1) OF THE ACT. IT IS NOT WORTHY THAT ALL THIS EXPENDITURE, SUPPORTED BY EVIDENCES, WAS DULY REFLECTED IN THE BOOKS OF ACCOUNTS AND NECESSARY DO CUMENTS WERE FILED BEFORE THE DEPARTMENT. IT IS WORTH MENTI ONING THAT SCRUTINY ASSESSMENT WAS COMPLETED IN RESPECT OF A.Y . 2000-01 AND 2001-02, WHEREIN, SAID EXPENDITURE WAS ALLOWED. THE SCRUTINY ASSESSMENT OF A.Y. 2001-02 WAS COMPLETED A FTER THE DATE OF SEARCH WHICH ITSELF PROVES THAT EXPENDITURE WAS GENUINE AS THE SAME WAS REFLECTED IN THE REGULAR BO OKS OF ACCOUNTS. THE CASE OF THE ASSESSEE IS FURTHER FORTI FIED BY THE STATEMENT RECORDED U/S 132(4) OF THE ACT BY DDIT (I NVEST.-III), SURAT, OF SHRI DINESH CHANDRA SHARMA PROPRIETOR OF M/S SHREEJI ROAD LINES, ON 10/04/2003 CONFIRMING THAT H E PROVIDED SUPERVISION SERVICES TO THE ASSESSEE AND F URTHER IT(SS) NO.25/MUM/2009 24 CONFIRMED OF HAVING RECEIPT THE PAYMENTS OF COMMISS ION FOR THE SERVICES SO RENDERED FROM TIME TO TIME AND INTU RN THEY ARE FILING INCOME TAX RETURNS REGULARLY AT SURAT, THUS, THE ASSESSEE IS HAVING A STRONG CASE IN ITS FAVOUR. (C) SO FAR AS PAYMENT OF COMMISSION TO M/S SHAGUN CASTING PVT. LTD. IS CONCERNED, THE ASSESSEE PAID COMMISSION/SERVICES CHARGES TO IT DURING THE PREVIO US YEAR 01/04/1999 TO 31/03/2000, 01/04/2000 TO 31/03/2001 AND 01/04/2001 TO 31/03/2002 AND COPIES OF DEBIT NOTES, RAISED BY M/S SHAGUN CASTING PVT. LTD. FOR THE SERVICES RE NDERED AS WELL AS COPIES OF ACCOUNTS IN THE BOOKS OF THE ASSE SSEE, SHOWING THE DETAILS OF PAYMENTS, WERE SUBMITTED BEF ORE THE ASSESSING OFFICER. M/S SHAGUN CASTING PVT. LTD. IN TRODUCED THE ASSESSEE BY ARRANGING AND PROCURING THE STEVEDO RING BUSINESS, IN RESPECT OF COAL IMPORTED BY VARIOUS PA RTIES AT DIFFERENT PORTS. IT IS ALSO NOTED THAT SURVEY ACTI ON U/S 133A OF THE ACT WAS ALSO CARRIED OUT UPON M/S SHAGUN CASTIN G PVT. LTD., WHEREIN, STATEMENT OF ONE MR. SHYAM SUNDAR TO TLA WAS RECORDED. WHEREIN, HE CONFIRMED OF PROVIDING SERVI CES TO THE ASSESSEE AND FURNISHED COMPLETE DETAILS OF NATURE O F SERVICES AND PAYMENTS. HE ALSO CONFIRMED THE TRANSACTIONS B ETWEEN THE ASSESSEE COMPANY AND THEM. (D) SO FAR AS, THE PAYMENTS MADE TO M/S. SHREEJI ROADLINES SURAT, IS CONCERNED, AS EXPLAINED BY THE ASSESSEE, THE EXPENDITURE WAS INCURRED FOR TOTAL SUPERVISION AND HANDLING CHARGES FOR TRANSPORTATION OF COAL, IT(SS) NO.25/MUM/2009 25 THE DETAILS OF WHICH ARE SUMMARIZED AS UNDER:- ASST. YEAR SUPERVISIONS & HANDLING CHARGES 1999 - 2000 RS.3,65,79,999 2000 - 01 RS.4,38,98,359 2001 - 02 RS. 4,46,67,678 2002 - 03 RS.3,13,86,321 IN CASE OF SUPERVISION, THE RESPONSIBILITIES INVOLV ED THE TIMELY PLACEMENT OF TRUCKS ROUND THE CLOCK OPER ATIONS AT COMPARATIVE FREIGHT RATE, FAST MOVEMENT OF TRUCK S, EXPEDITIOUS REPAIRS OF TRUCK'S SMALL NATURE, ENROUT E CO- ORDINATION TO ENSURE NO STOPPAGE BY DRIVERS, CO- ORDINATION WITH RTO WHEREVER NECESSARY, ENSURING OVERALL SUPERVISION FOR NO THEFT DURING THE TRANSIT . (E) AS PER THE ASSESSEE, IT IS THE RESPONSIBILITY O F THE ASSESSEE COMPANY TO ENSURE THAT THE COAL WHICH IS IMPORTED REACHES THE ULTIMATE DESTINATION AND THE Q UALITY OF THE COAL IS ALSO RETAINED AND THE QUANTITY IS AL SO WITHIN THE PERMISSIBLE RANGE. THE NORMAL WASTAGE IS ALLOWE D AND IF THE WASTAGE IS MORE THAN THE PERMISSIBLE LIMIT THEN THE ASSESSEES ARE RESPONSIBLE FOR THE DIFFERENCE. IT IS VERY ESSENTIAL IN THIS BUSINESS TO ENSURE THAT THERE IS PROPER SUPERVISION BETWEEN THE MOVEMENT OF COAL FROM THE P ORT OF IMPORT TO THE DESTINATION OF THE CLIENT. M/S. SH REEJI ROADLINES HAVE PROVIDED THESE SERVICES FOR WHICH SUPERVISION CHARGES RANGING MOSTLY FROM RS. 10/- PM T TO RS. 20/- PMT. HAVE BEEN PAID TO THEM. THEIR RESPONSIBIL ITY WAS IT(SS) NO.25/MUM/2009 26 TO ENSURE THAT THERE IS SMOOTH MOVEMENT OF THE CARG O FROM THE PORT OF IMPORT TO THE FINAL DESTINATION. (F) M/S. SHREEJI ROADLINES HAVE RAISED DEBIT NOTES FOR THE SERVICES PROVIDED BY THEM AND THE COPIES OF THE SAME WERE SUBMITTED BEFORE THE DEPARTMENT. THE ENT RIES FOR PAYMENT OF SUPERVISION AND HANDLING CHARGES ARE DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS PRI OR TO THE DATE OF SEARCH. THE PAYMENTS HAVE BEEN MADE BY ACCO UNT PAYEE CHEQUES AND THE DETAILS OF THE PAYMENTS WERE ALSO GIVEN. ALL THESE PAYMENTS ARE MADE FROM REGULAR BOO KS OF ACCOUNTS AND THE COPIES OF THE ACCOUNTS OF THE PART Y WAS SUBMITTED. THE ASSESSEE HAS ENTERED INTO AN AGREEME NT ON 1S DAY OF JUNE 1999 AND THE COPY OF THE SAME WAS AL SO SUBMITTED TO THE LEARNED A.O. THERE ARE VARIOUS CORRESPONDENCE WITH THE PARTY IN CONNECTION WITH TH E SERVICES PROVIDED BY THEN AND THE COPIES OF THE SAM E WERE ALSO GIVEN TO THE A.O. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. (G) WE ALSO NOTE THAT THE EXPENDITURE IS DULY REFLE CTED IN THE BOOKS OF ACCOUNT WHICH IS SUPPORTED WITH EVIDEN CES AND THE EXPENDITURE HAS BEEN DISCLOSED IN THE PROFI T & LOSS ACCOUNT AND OTHER DOCUMENTS FILED WITH THE DEPARTME NT. THE SCRUTINY ASSESSMENTS HAVE BEEN COMPLETED IN RES PECT OF ASSESSMENT YEARS 2000-01 AND 2001-02 IN WHICH TH E SAID EXPENDITURE HAS BEEN ALLOWED. THE SCRUTINY ASSESSME NT FOR ASST. YEAR 2001-02 WAS COMPLETED AFTER THE DATE OF IT(SS) NO.25/MUM/2009 27 SEARCH WHICH ITSELF PROVES THAT THE EXPENDITURE IS GENUINE AND WHICH IS DULY REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE HAD ALSO OBTAINED A CONFIRMATION BY WAY OF AN AFFIDAVIT OF MR. DINESHCHANDRA SHARMA, PROPRIETOR OF M/S. SHREEJI ROADLINES CONFIRMING THE TRANSACTIONS. HE HAS ALSO CONFIRMED THAT THE CHEQUE S RECEIVED BY HIM AND THE SUPERVISION & HANDLING CHAR GES ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS. (H) IN ANSWER TO QUESTION NO. 2 HE HAS CONFIRMED T HAT HIS COMPANY WAS PROVIDING SERVICES AND WAS RECEIVING CO MMISSION AND BROKERAGE FROM THE ASSESSEE I.E. UNITED SHIPPER S LTD. IN ANSWER TO QUESTION NO. 4 HE HAS CONFIRMED THAT THE COMMISSION RECEIVED IS DULY RECORDED IN THE BOOKS O F ACCOUNTS OF THE COMPANY. IN ANSWER TO QUESTION NO. 5 HE HAS CONFIRMED THAT M/S. UNITED SHIPPERS LTD. HAS THEIR OWN BARGES AND THEY DID THE JOB OF FACILITATING THE CONTACTS OF THE CLIENT PARTIES WITH UNITED SHIPPERS LTD. HE WAS TAKING THE ASSISTANCE OF HIS BROTHER WHO WAS WORKIN G WITH THE ASSESSEE COMPANY. THE BUSINESS WAS INTRODU CED BY M/S. SHAGUN CASTING PVT. LTD. AND AS FAR AS FOLL OW UP MATTER WAS CONCERNED THE HELP OF HIS BROTHER WAS TA KEN. IN ANSWER TO QUESTION NO. 10 HE HAS CONFIRMED THAT THE COMMISSION RECEIVED FROM UNITED SHIPPERS LTD. IS DI SCLOSED IN THE RETURN OF INCOME FILED BY THE SAID COMPANY W ITH DCIT, CENTRAL-1, KOLHAPUR. IT(SS) NO.25/MUM/2009 28 (I) IT CAN BE SEEN THAT MR. SHYAMSUNDER TOTLA IN RESPONSE TO SURVEY ACTION HAS CONFIRMED THE BUSINES S TRANSACTION BETWEEN ASSESSEE COMPANY AND M/S. SHAGU N CASTING PVT. LTD. THERE IS NO DISCREPANCY BETWEEN T HE REPLIES WHICH HE HAS GIVEN ON THE SPOT IN SURVEY PROCEEDINGS AND THE DETAILS SUBMITTED BY THE ASSESS EE COMPANY. HE HAS CONFIRMED THE TRANSACTIONS WHICH IS RECORDED IN HIS REGULAR BOOKS OF ACCOUNTS. MR. SHYAMSUNDER TOTLA HAS CONFIRMED THE NATURE OF SERVI CES PROVIDED BY HIM. IN THE STATEMENTS RECORDED U/S 133 A HE HAS MADE A MENTION ABOUT THE ASSISTANCE TAKEN OF HIS BR OTHER BUT HAS ALSO CONFIRMED THAT NO PAYMENT HAS BEEN MADE TO HIS BROTHER MR. DWARKAPRASAD TOTLA. IN VIEW OF THIS , IT CAN BE CONCLUDED THAT THE CLAIM MADE IN CONNECTION WITH THE PAYMENT OF COMMISSION TO M/S. SHAGUN CASTING PV T. LTD. IS GENUINE AND JUSTIFIED. (J) SO FAR AS, PAYMENT OF COMMISSION TO M/S MOIRA S TEELS LTD. IS CONCERNED, THE COMMISSION / SERVICE CHARGES WERE PAID DURING THE PREVIOUS YEAR 1/4/1998 TO 31/3/1999 , 1/4/1999 TO 31/3/2000 AND 1/4/2000 TO 31/3/2001. TH E COPIES OF THE DEBIT NOTES RAISED BY M/S. MOIRA STEE LS LTD. FOR THE SERVICES PROVIDED AS WELL AS THE COPY OF ACCOUN TS IN BOOKS SHOWING THE DETAILS OF PAYMENT WERE SUBMITTED. M/S. MOIRA STEELS LTD. HAD INTRODUCED THE BUSINESS OF ARRANGIN G AND PROCURING THE STEVEDORING, BARGING AND TRANSPORTATION IN RESPECT OF COAL IMPORTED BY TATA IRON & STEEL CO. L TD. AT DIFFERENT PORTS. SURVEY ACTION U/S 133A WAS UNDERTA KEN ON IT(SS) NO.25/MUM/2009 29 M/S. MOIRA STEELS LTD., WHEREIN, STATEMENT OF MR. V IMAL TODI WAS RECORDED, CONFIRMING THEREIN THAT SERVICES WERE PROVIDED TO THE COMPANY AND HE HAS ALSO GIVEN THE C OMPLETE DETAILS OF NATURE OF SERVICES AND ALSO THE DETAILS OF PAYMENTS. HE HAS ALSO CONFIRMED THE TRANSACTIONS BETWEEN THE ASSESSEE COMPANY AND THEIR COMPANY. THE STATEMENT RECORDED U/S 133A ALSO SUBSTANTIATED IN QUESTION NO . 3 MR. VIMAL TODI HAS CONFIRMED THAT THEY ARE IN THE BUSIN ESS OF PROVIDING SERVICES AND THEY EARN COMMISSION INCOME. IN QUESTION NO. 5 MR. TODI HAS CONFIRMED THAT ALL THE TRANSACTIONS RELATING TO COMMISSION HAVE BEEN REFLE CTED IN THEIR REGULAR BOOKS OF ACCOUNTS. IN QUESTION NO. 6 MR. TODI PRODUCED THE FILE IN CONNECTION WITH THE TRANSACTIONS WITH THE ASSESSEE WHICH CONTAINED GENERAL CORRESPONDENCE AS WELL AS THE COPIES OF THE CREDIT NOTES, DEBIT NOTES AND PAYMENT ADVICE ETC. IN QUEST ION NO. 7 & 8 HE HAS CLARIFIED HIS RELATIONSHIP WITH TH E ASSESSEE AND HAS GIVEN THE DETAILS OF THE QUANTITY OF COAL TO BE IMPORTED AT THE PORTS AND WHAT WAS THE NATURE OF WORK REQUIRED TO BE DONE. IN QUESTION NO. 9 HE HAS GIVEN A REFERENCE OF MR. AJAY MATHUR OF TISCO WITH WHOM HE HAS RELATIONSHIP AND PROCURED THIS BUSINESS. IN QUESTION NO. 11 HE HAS CONFIRMED THE QUANTUM OF COMMISSION WHICH HIS COMPANY HAS RECEIVED. IN QUESTION NO. 13 THE REASONS FOR RECEIVING THE COMMI SSION BEING INTRODUCTION OF BUSINESS OF TISCO TO THE ASSE SSEE I.E. UNITED SHIPPERS LTD. IS STATED. IN QUESTION NO . 18 HE HAS GIVEN THE DETAILS AS TO THE PERSON WITH WHOM HE WAS IT(SS) NO.25/MUM/2009 30 IN TOUCH AT UNITED SHIPPERS LTD. AND HE USE TO GET THE INFORMATION ABOUT THE QUANTITY OF COAL WHICH WAS IMPORTED. IN QUESTION NO. 23 HE HAS CONFIRMED THE R ATES AT WHICH THE COMMISSION WAS RECEIVED BY HIM FOR PROVID ING DIFFERENT SERVICES. (K) FROM THE PERUSAL OF THE ABOVE, IT CAN BE SEEN THAT MR. TODI, THE DIRECTOR OF COMPANY IN RESPONSE TO SU RVEY ACTION HAS CONFIRMED EACH & EVERY ASPECT OF THE BUS INESS TRANSACTION BETWEEN ASSESSEE COMPANY AND M/S. MOIRA STEELS LTD. THERE IS NO DISCREPANCY BETWEEN THE REP LIES WHICH HE HAS GIVEN ON THE SPOT IN SURVEY PROCEEDING S AND THE DETAILS SUBMITTED BY ASSESSEE COMPANY. HE HAS CONFIRMED THE TRANSACTIONS WHICH IS RECORDED IN THE IR REGULAR BOOKS OF ACCOUNT. IN VIEW OF THESE FACTS, I T CAN BE SUMMED UP THAT THE CLAIM MADE IN CONNECTION WITH TH E PAYMENT OF COMMISSION TO M/S. MOIRA STEEL LTD. IS G ENUINE AND JUSTIFIED. (L) THE ASSESSEE PAID COMMISSION/SERVICE CHARGES DURING THE PERIOD 114/98 TO 31/3/99 TO M/S. KALANI INDUSTRIES LTD. THE COPIES OF THE DEBIT NOTES RAISE D BY M/S. KALANI INDUSTRIES LTD. FOR THE SERVICES PROVIDED AS WELL AS THE COPY OF ACCOUNTS IN BOOKS SHOWING THE DETAILS OF PA YMENT WERE SUBMITTED BEFORE THE DEPARTMENT. M/S. KALANI INDUSTRIES LTD. HAD INTRODUCED THE BUSINESS OF MINC ORE RESOURCES PVT. LTD. FOR IMPORT OF COAL AT DIFFERENT PORTS. SURVEY ACTION U/S 133A WAS UNDERTAKEN ONM/S. KALANI INDUSTRIES LTD. AND STATEMENT OF MR. KURESH MATKAWA LA HAS IT(SS) NO.25/MUM/2009 31 BEEN RECORDED. ON PERUSAL OF THE SAID STATEMENT IT CAN BE SEEN THAT MR. KURESH HAS CONFIRMED PROVIDING SERVIC ES TO ASSESSEE COMPANY AND HE HAS ALSO GIVEN THE COMPLETE DETAILS OF NATURE OF SERVICES AND ALSO THE DETAILS OF PAYMENTS. HE HAS ALSO CONFIRMED THE TRANSACTIONS BETWEEN ASSESSEE COMPANY AND THEM. THE STATEMENT RECORDED U/S 133A FURTHER SUBSTANTIATES THE GENUINENESS OF THE TRANSACTIONS. (M) IN ANSWER TO QUESTION NO. 6 MR. KURESH HAS CONFIRMED THAT THEIR COMPANY IS DOING LIAISONING AN D CONSULTANCY WORK. HE HAS ALSO GIVEN THE NAME OF UNITED SHIPPERS LTD. WITH WHOM THE BUSINESS TRANSACTIONS HAD TAKEN PLACE. HE HAS ALSO GIVEN THE NAME OF M/S. MINCORE RESOURCES WHO WAS INTRODUCED A ND ALSO HAS GIVEN THE NATURE OF WORK INVOLVED. IN ANSW ER TO QUESTION NO 10 HE HAS CONFIRMED THE RATE AT WHICH COMMISSION HAS BEEN PAID. IN ANSWER TO QUESTI ON NO. 12 HE HAS GIVEN THE DETAILS OF RECEIPT OF COMMISSIO N. (N) FROM THE PERUSAL OF ABOVE STATEMENT IT CAN BE SEEN THAT MR. KURESH MATKAWALA IN RESPONSE TO SURVE Y ACTION HAS CONFIRMED THE BUSINESS TRANSACTION BETWE EN ASSESSEE COMPANY AND M/S. KALANI INDUSTRIES LTD. TH ERE IS NO DISCREPANCY BETWEEN THE REPLIES WHICH HE HAS GIVEN ON THE SPOT IN SURVEY PROCEEDINGS AND THE DETAILS SUBMITTED BY THE ASSESSEE COMPANY. HE HAS CONFIRMED IT(SS) NO.25/MUM/2009 32 THE TRANSACTION WHICH IS RECORDED IN HIS REGULAR BO OKS OF ACCOUNT. IN VIEW OF THE ABOVE, IT CAN BE CONCLUD ED THAT THE CLAIM MADE IN CONNECTION WITH THE PAYMENT OF COMMISSION OF RS.24,92,000/- TO M/S. KALANI INDUSTR IES LTD. IS GENUINE AND JUSTIFIED. (O) THE ASSESSEE COMPANY HAD PAID COMMISSION / SERVICE CHARGES DURING THE PREVIOUS YEAR 1/4/2001 T O 31/3/2002 TO M/S. ENNAR STEEL & ALLOY LTD. THE COPI ES OF THE DEBIT NOTES RAISED BY M/S. ENNAR STEEL & ALLOY LTD. FOR THE SERVICES PROVIDED AS WELL AS THE COPY OF ACCOUN TS IN ASSESSEE BOOKS SHOWING THE DETAILS OF PAYMENT WERE SUBMITTED. M/S. ENNAR STEEL & ALLOY LTD. HAD PROVID ED SERVICES REGARDING HANDLING AND COORDINATION IN RES PECT OF PETCOKE AT TUTICORIN / CHENNAI PORT. THEIR JOB WAS TO HANDLE PORT ACTIVITIES AT ABOVE PORTS. THE ASSESSEE COMPAN Y USED TO LOAD PETCOKE FROM BEDI PORT, JAMNAGAR AND IT WAS TRANSPORTED TO TUTICORIN/ CHENNAI PORT. M/S. ENNAR STEEL & ALLOY LTD. USED TO SEND THEIR TEAM AT THE ABOVE P ORTS FOR HANDLING THE ACTIVITIES UNDER THE SUPERVISION O F MR. VINOD KUMAR ON ARRIVAL OF THE SHIP. AT THE PORT, TH E CARGO WAS UNLOADED FROM SHIP AND THE SAID CARGO WAS LOADE D BACK ON TRUCKS AND VARIOUS FORMALITIES HAVE TO BE COMPLETED ON THE PORT. (P) SURVEY ACTION U/S 133A WAS UNDERTAKEN ON M/S. ENNAR STEEL & ALLOY LTD. AND STATEMENT OF MR. RAJENDRA KU MAR IT(SS) NO.25/MUM/2009 33 AGARWAL, THE MANAGING DIRECTOR OF COMPANY, WAS RECORDED, WHEREIN, HE HAS CONFIRMED PROVIDING SERVI CES TO ASSESSEE COMPANY AND HE HAS ALSO GIVEN THE COMPLETE DETAILS OF NATURE OF SERVICES AND ALSO THE DETAILS OF PAYMENTS. HE HAS ALSO CONFIRMED THE TRANSACTIONS BETWEEN ASSE SSEE COMPANY AND THEM. THE STATEMENT RECORDED U/S 133A FURTHER SUBSTANTIATES THE BUSINESS TRANSACTIONS. IN REPLY TO QUESTION NO. 2 MR. AGARWAL HAS CONFIRME D THAT PORT HANDLING ACTIVITY FOR M/S. UNITED SHIPPERS LTD . WAS UNDERTAKEN. IN ANSWER TO QUESTION NO. 3 HE HAS GIVE N THE COMPLETE DETAILS REGARDING THE NATURE OF SERVICES P ROVIDED. IN ANSWER TO QUESTION NO. 4 HE HAS, CONFIRMED THE NUMB ER OF TIMES THE SERVICES ARE PROVIDED IN FINANCIAL YEA R 2001-02. IN ANSWER TO QUESTION NO. 9, HE CONFIRMED THE RATE AT WHICH THE PAYMENT HAS BEEN MADE. (Q) FROM THE PERUSAL OF ABOVE, IT CAN BE SEEN THAT MR. RAJENDRA KUMAR AGARWAL IN RESPONSE TO SURVEY ACTION HAS CONFIRMED THE BUSINESS TRANSACTION BETWEEN THE ASSE SSEE COMPANY AND M/S. ENNAR STEEL & ALLOY LTD. THERE IS NO DISCREPANCY BETWEEN THE REPLIES WHICH HE HAS GIVEN ON THE SPOT IN SURVEY PROCEEDINGS AND THE DETAILS SUBMITTE D BY US. HE HAS CONFIRMED THE TRANSACTIONS WHICH ARE RECORDE D IN HIS REGULAR BOOKS OF ACCOUNTS. M/S. ENNAR STEEL & A LLOY LTD. USED TO SEND THEIR TEAM AND ONE MR. VINOD KUMA R IS SPECIFICALLY IDENTIFIED BEING THE PERSON WHO USED T O TRAVEL TO BOTH THE PORTS FOR PROVIDING SERVICES. THE NATURE O F SERVICE WAS SUCH THAT LIAISONING WITH THE PORT AUTHORITIES WAS VERY CRUCIAL IT(SS) NO.25/MUM/2009 34 AND ESSENTIAL AND IF THERE WAS ANY DELAY IN UNLOADI NG THE CARGO OR FURTHER LOADING ON THE TRUCKS, THE COMPANY WOULD SUFFER HEAVY LOSSES ON ACCOUNT OF DEMURRAGE FOR THE SHIPS. MR. RAJENDRA KUMAR AGARWAL HAS CONFIRMED THE NATURE OF SERVICES PROVIDED BY HIM, THEREFORE, IT CAN BE CONC LUDED THAT THE CLAIM MADE IN CONNECTION WITH THE PAYMENT OF CO MMISSION TO M/S. ENNAR STEEL & ALLOY LTD. IS GENUINE. 2.11. SO FAR AS, THE ALLEGATION OF THE ASSESSING O FFICER (WHICH WERE CONFIRMED BY THE LD. COMMISSIONER OF IN COME TAX (APPEALS) ALSO) THAT THESE PERSONS WERE CONDUIT TO THE ASSESSEE TO INFLATE ITS EXPENDITURE, IS CONCERNED, AS NARRAT ED HEREINABOVE, WE FIND THAT THIS IS MERELY A PRESUMPT ION AND NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE EVIDENCING THAT IN FACT NO SERVICE RENDERED BY THEM . THE PAYMENT OF IMPUGNED AMOUNTS WERE ACCEPTED BY THE ASSESSING OFFICER HIMSELF, THEREFORE, MAKING A AD-H OC DISALLOWANCE OUT OF SUCH COMMISSION/PAYMENTS IS WIT HOUT ANY REASON. AS MENTIONED EARLIER, EITHER THE PAYMEN TS, IF FOUND TO BE BOGUS, HAS TO BE DISALLOWED FULLY OR TO BE ALLOWED ON THE BASIS OF RECORD MAINTAINED BY THE ASSESSEE, IN WHICH NO DISCREPANCY WAS FOUND. NO PERSON WILL MAKE PAYMENT S TO ANYBODY WITHOUT ANY REASON. SO FAR AS, SATISFACTION OF THE ASSESSING OFFICER IS CONCERNED, IT IS A SUBJECTIVE APPROACH, WHEREAS, THE ASSESSEE HAS DISCHARGED ITS ONUS WITH THE HELP OF DOCUMENTARY EVIDENCES, DULY CONFIRMED BY THE PARTIE S TO WHOM PAYMENTS WERE MADE AND DULY ACCOUNTED FOR, THE REFORE, WE FIND THAT THE SERVICES WERE ACTUALLY RENDERED, A S DISCUSSED HEREINABOVE, THEREFORE, THE PAYMENTS WERE ALSO GENU INE. NO IT(SS) NO.25/MUM/2009 35 EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE SUBSTANTIATING ITS PRESUMPTION. IT SEEMS THAT WHOL E ADDITION IS BASED ON PRESUMPTION THAT EXPENDITURE HAS BEEN I NFLATED. ONLY IT CAN BE SAID THAT PRESUMPTION CANNOT TAKE TH E SHAPE OF EVIDENCE, HOWEVER STRONG IT MAY BE. SO FAR AS, THE ALLEGATION OF THE REVENUE THAT THES E ARE UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE, IS CONCERNED, SINCE ALL THE AMOUNTS/PAYMENTS OF COMMISSION/SERVICE CHARGES ARE DULY DISCLOSED IN TH E PROFIT AND LOSS ACCOUNT/BOOKS OF ACCOUNTS, THAT TOO BEFORE THE DATE OF SURVEY, HOW IT CAN BE UNDISCLOSED INCOME OF THE ASSESSEE, MORE SPECIFICALLY WHEN THE PAYMENTS WERE MADE THROU GH ACCOUNT PAYEE CHEQUES, WHICH WERE RECORDED BY THE P AYEES ALSO IN THEIR RESPECTIVE BOOKS AND DISCLOSED IN THE RESPECTIVE RETURN, THEREFORE, THERE IS NO QUESTION OF TREATING THE SAME AS UNDISCLOSED INCOME. OUR OBSERVATION/CONCLUSION IS FURTHER FORTIFIED BY THE FACT THAT THE SAME ASSESSING OFFIC ER, ON THE SAME DATE, MADE THE ASSESSMENT OF DIFFERENT PARTIE S, ACCEPTING THE RETURNED INCOME. WE HAVE ALSO PERUSED PAGES 349 TO 400(CONTAINING THE DETAILS OF PAYMENT) AND F OUND THAT ALL THE PAYMENTS ARE THROUGH CHEQUE. FROM PAGE 403 (BLOCK ASSESSMENT ORDER) NOTHING HAS BEEN ADDED BY THE SAM E ASSESSING OFFICER ON THE SAME DATE. IT IS ALSO NOT ED (PAGE 408 TO 416) THAT M/S REYNOLD PETRO CHEM LTD. ADDRESSED VARIOUS LETTERS TO THE ASSESSING OFFICER, CONFIRMING EVERYT HING MENTIONING BALANCE SHEET, THEREFORE, THE LD. ASSESS ING OFFICER CONVENIENTLY IGNORED THIS COMMUNICATION. AT PAGE 16 5, THE SAME ASSESSING OFFICER OBSERVES THAT SHRI NAVNIT PA TEL WAS NOT IT(SS) NO.25/MUM/2009 36 AVAILABLE, WHEREAS, HIS STATEMENT WAS RECORDED U/S 132(4) (PAGES 165 TO 169 OF THE PAPER BOOK). THE AFFIDAVIT IS AVAILABLE IS AT PAGE 157 DATED 06/01/2004, WHEREAS, THE STATE MENT WAS RECORDED ON 29/01/2003. AT PAGE 4 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER MENTIONS THIS LETTER, WHEREAS , THE RETURN WAS FILED ON 09/02/2004. AT PAGE 145 (PARA 11), WE NOTE THAT THE ASSESSEE ASKED FOR CROSS EXAMINATION BUT THAT W AS NOT ALLOWED. ALL THESE LETTERS WERE MADE AVAILABLE TO T HE ASSESSING OFFICER OR IT CAN BE SAID THAT THESE WERE SENT TO T HE ASSESSING OFFICER. RATHER, THE ASSESSING OFFICER DID NOT MAKE ANY EFFORT TO MAKE INVESTIGATION EVEN AFTER RECEIPT OF THIS LE TTER. AT PAGE 173 (LETTER OF SHRI CHNDRAKANT BOHRA), PAGE 175 (BA NK STATEMENT) PAGE 177 (NO CASH WAS WITHDRAWN). IT IS ALSO NOTED THAT DURING ORIGINAL PROCEEDINGS ITSELF, THE CONFIR MATIONS WERE FILED. ALL THESE FACTS CLEARLY ESTABLISHES THAT THE ASSESSEE IS HAVING THE CASE IN ITS FAVOUR. OUR VIEW IS FURTHER FORTIFIED BY THE FACT THAT THE LD. FIRST APPELLATE AUTHORITY, VI DE LETTER NO. CIT(A)/C-IV/REPORT/2006-07 DATED 04/06/2007 (PAGE 2 12 OF THE PAPER BOOK) MADE AVAILABLE THE REMAND REPORT, R ECEIVED FROM THE ASSESSING OFFICER AND SOUGHT COMMENTS ON T HE REPORT OF THE ASSESSING OFFICER. ONE OF THE PARA FROM TH E REPORT WITH RESPECT TO GROUND NO.2 IS REPRODUCED HEREUNDER FOR READY REFERENCE AND CONSIDERATION:- I HAVE VERIFIED ALL THE PAPERS SUBMITTED BY THE ASS ESSEE INCLUDING ALL THE ADDITIONAL PAPERS. RS.2,43,80,380/- WERE ADDED AS UNDISCLOSED INCOME BEING COMMISSION PAID T O M/S STRAUSS INDUSTRIES & EXPORTS LTD. RS.1,02,13,520/- AND M/S CELLULOSE & CHEMICALS LTD. RS.1,41,66,860/-. DETAIL ED DISCUSSION HAS BEEN MADE BY THE THEN ASSESSING OFFI CER IN BLOCK IT(SS) NO.25/MUM/2009 37 ASSESSMENT ORDER FOR MAKING ADDITION OF RS.2,43,80, 380/-. PAGE NO. 1 TO 4, 30 TO 40, 43 TO 46 74 TO 98 OF IND EX II WHICH ARE RELATED TO THIS GROUND WERE DULY SUBMITTED AT THE T IME OF BLOCK ASSESSMENT PROCEEDINGS AND ADDITIONAL PAGE NO. 5 TO 29 41 & 42, 47 TO 73 OF INDEX II ARE RELATED TO THIS GROUND HAS BEEN VERIFIED BY ME. AL THE ADDITIONAL PAPERS ARE SUPPORTED DOCUMENTS OF MAIN DOCUMENTS WHICH WERE SUBMITTED AT THE TIME OF BLOCK ASST. PROCEEDINGS. HENCE UNDISCLOSED INCO ME OF RS.2,43,80,380/- OF THIS GROUND REMAINS UNCHANGED. IN THE AFORESAID REPORT, THE LD. ASSESSING OFFICER DULY VERIFIED THE PAPERS SUBMITTED BY THE ASSESSEE INCLU DING ALL THE ADDITIONAL PAPERS WITH RESPECT TO GROUND NO.2, IDEN TICAL IS THE SITUATION FOR GROUND NO. 3 (A) AND (B), RAISED BEFO RE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY THE ASSESSE E, MEANING THEREBY, THE DOCUMENTS WERE FOUND GENUINE, THEREFORE, MAKING AD-HOC DISALLOWANCE OUT OF THE TO TAL AMOUNT CANNOT BE SAID TO BE JUSTIFIED. 3. THE NEXT GROUND RAISED BY THE ASSESSEE PERTAINS TO NON-GRANTING OF DEDUCTION U/S 33AC OF THE ACT TO TH E ASSESSEE FROM THE ADDITIONAL INCOME FROM THE BUSINESS OF OP ERATION OF SHIP TO THE EXTENT OF RESERVE CREATED BY THE ASSESS EE. THE LD. COUNSEL ADVANCED HIS ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED. IT WAS ALSO CONTENDED, WE ARE MAKING BLOCK ASSESSMENT AND THERE WAS NO SEIZED MATERIAL WHICH P ERTAINS TO OTHER PARTY WHERE NO ADDITION WAS MADE. THE LD. DR DEFENDED THE ADDITION. 3.1. WE NOTE THAT (PARA 13, PAGE 20) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED T HAT NO ARGUMENT WAS PUT FORWARD IN SUPPORT OF THIS GROUND BEFORE THE IT(SS) NO.25/MUM/2009 38 LD. COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE , FOR WANT OF SUBMISSION, THIS GROUND WAS REJECTED. IN VIEW OF THIS FINDING, WE FIND NO MERIT IN THE GROUND OF THE ASSE SSEE AS THE SAME IS NOT BORNE OUT FROM THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THIS GROUND I S DISMISSED. 4. THE LAST GROUND PERTAINS TO NOT DECIDING BUT DIR ECTING THE ASSESSING OFFICER TO VERIFY WHETHER SURCHARGE @ 5% IS PAYABLE ON THE INCOME TAX CHARGEABLE ON THE TOTAL UNDISCLOS ED INCOME AS AGAINST SURCHARGE AT THE RATE OF 2.5% PAYABLE BY THE ASSESSEE. THE LD. COUNSEL AS WELL AS THE LD. DR AGR EED THAT THIS GROUND MAY BE SENT TO THE FILE OF THE ASSESSING OFF ICER TO ABIDE BY THE DIRECTION OF THE THE LD. FIRST APPELLATE AUT HORITY. WE FIND NO INFIRMITY IN THE DIRECTION OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS), THEREFORE, WE DIRECT THE LD. ASSESSING OFFICER TO ABIDE BY THE DIRECTION CONTAINED IN THE FIRST APPELLATE ORDER, PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE LD. ASSESSING OFFICER TO EXPEDITIOUS LY DECIDE THE ISSUE, AFTER HEARING THE ASSESSEE, THUS, THIS GROUN D IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28/10/2015. SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; ) DATED : 28/10/2015 IT(SS) NO.25/MUM/2009 39 F{X~{T? P.S/. .. !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 1 $ 2' ( +, ) / THE CIT, MUMBAI. 4. 1 1 $ 2' / CIT(A)- , MUMBAI 5. 4#5/' , 1 +,'+ 6 , $ / DR, ITAT, MUMBAI 6. 7 / GUARD FILE. ! / BY ORDER, 04,'/' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI.