DCIT, CC-1(3), Kolkata, Kolkata V. M/S. Mangilall Rungta, Kolkata

ITSSA 34/KOL/2015

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3411 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Search and seizure; Document seized; Corroborative evidences; Documents seized
• Section: 143(3); 153A; 14A; 133(6); 32; 131; 132

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER IT(SS)A NO.34/KOL/2015 ASSESSMENT YEAR:2006-07 DCIT, CENTRAL CIRCLE- 1(3), AAYAKAR BHAWAN, POORVA, 3 RD FLOOR, 110, SHANTIPALLY, KOLKATA- 700 107 / V/S . M/S MANGILALL RUNGTA 8A, EXPRESS TOWER, 42A, SHAKESPEARE SARANI, KOLKATA-700 017 [ PAN NO.AAFFM 7653 D ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI NIRAJ KUMAR, CIT-DR /BY RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ! /DATE OF HEARING 13-06-2017 ! /DATE OF PRONOUNCEMENT 11-08-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA DATED 12.12.2014. ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-V KOLKATA U/S 143(3)/153A/153D OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 07.03.2014 FOR ASSESSMENT YEAR 2006-08. THE REVISED GROUNDS RAISED BY THE REV ENUE PER ITS APPEAL ARE AS UNDER:- (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION TOWARDS SUPPRESSION OF PROFIT OF RS.67,92,764/- WITHOUT APPRECIATING THE FACT THAT THE AO HAS AUTHENTICATED THE ALLEGATION F RAMED BY THE INVESTIGATION WING BASED ON THE SEIZED DOCUMENTS IN WHICH OUT OF THE A LLEGED BILLS TWO BILLS AS MENTIONED IN THE ASSESSMENT ORDER ARE DIFFERENT IN ALL RESPEC T. WHILE MAKING DECISION IN ITS ORDER, LD. CIT(A) HAS FURTHER ERRED IN IGNORING THE FINDINGS OF THE AO THAT THERE IS NO JUSTIFICATION IN CONSIDERING THE SAID TWO BILLS AS REPRESENTING THE SAME EXPORT INSTEAD OF TWO DIFFERENT LOTS OF EXPORT. IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 2 (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION TOWARDS UNDISCLOSED SALE OF RS.49,66,584/- IGNORING THE ALLEGATION MADE BY THE VIGILANCE DEPARTMENT IN THE FIR, WHICH IS PENDI NG FOR DISPOSAL BEFORE THE COMPETENT JUDICIAL AUTHORITY. SO FOR THE INTEREST O F THE REVENUE, THE AO HAS RIGHTLY MADE THE ADDITION CONSIDERING THE LEGAL PROCEEDINGS INITIATED BY THE DY. SP, VIGILANCE CELL UNIT, BHUBANESWAR. THE LD. CIT(A) HA S FURTHER ERRED IN NOT APPRECIATING THE AO AS THE REVENUE AUTHORITY TO MAK E ADDITIONS TO PROTECT THE INTEREST OF REVENUE IN THE LIGHT OF THE FINDINGS OF THE AGEN CY, TILL FINAL VERDICT PASSED BY COMPETENT JUDICIARY FOR THE FIR FILED AGAINST THE A SSESSEE COMPANY. (3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCES TOWARDS ISSUES INVOLVED WITH SEC. 36( 1)(VA) READ WITH 2(24)(X) OF THE ACT AND ADDITIONS U/S 14A OF THE ACT FOR RS.3,80,37 2/- AND RS.651/- RESPECTIVELY ON THE GROUND THAT THE AO HAD NO JURISDICTION TO MAKE ADDITIONS ON ISSUES OF REGULAR ASSESSMENT WHICH HAS ATTAINED FINALITY AS ON THE DA TE OF THE SEARCH. LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT DURING THE R EASSESSMENT MADE U/S. 153A OF THE IT ACT AFTER PROVIDING THE ASSESSEE OPPORTUNITY TO SUBMIT ITS INCOME TAX RETURN (ITR) AFRESH ALONGWITH ANY DOCUMENTS AND AS SUCH, ANY INE LIGIBLE ALLOWANCES FOUND IN THOSE DOCUMENTS CANNOT BE OVERLOOKED/IGNORED FOR THE INTE REST OF REVENUE INSPITE OF THE FACT THAT THE ASSESSMENT IN THE CASE ATTAINED FINALITY A S ON THE DATE OF SEARCH. FURTHER, LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE DOCU MENTS SUBMITTED BY THE ASSESSEE ITSELF AUTHENTICATES THE INELIGIBILITY OF THE ALLOW ANCES WHICH MAY BE CONSIDERED AS INCRIMINATING DOCUMENTS FURNISHED DURING THE COURSE OF REASSESSMENT. (4) THE APPELLANT CRAVE THE LEAVE TO MAKE AN ADDITI ON, ALTERATION, AND MODIFICATION ETC OF GROUND OR GROUNDS ON OR BEFORE THE DATE OF H EARING OF THE APPEAL. SHRI NIRAJ KUMAR, LD. DEPARTMENTAL REPRESENTATIVE R EPRESENTED ON BEHALF OF REVENUE AND SHRI SUBASH AGARWAL, LD. ADVOCATE APPEARED ON B EHALF OF ASSESSEE. 2. FIRST ISSUE RAISED BY REVENUE IN GROUND NO.1 IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSED PROFIT FOR 67,92,764/- ONLY ON THE UNDISCLOSED SALE OF RS. 3,0 8,06,903.00. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PART NERSHIP FIRM AND ENGAGED IN BUSINESS OF MINING OF MANGANESE AND IRON ORE AND IT S EXPORTS. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S 13 2 OF THE ACT AT RUNGTA GROUP OF CASES DATED 06.02.2012 AT THE RESIDENTIAL AND BUSIN ESS PREMISES OF SEVERAL PERSONS WHO BELONGED TO RUNGTA GROUP. THE ASSESSEE IS ONE OF TH E PARTY BELONGING TO THE SAID RUNGTA GROUP. DURING THE SEARCH SEVERAL DOCUMENTS W ERE SEIZED AND THE RELEVANT DOCUMENTS ON THE BASIS OF WHICH ADDITIONS WERE MADE ARE MARKED AS RH-42 AND RH 39 RESPECTIVELY. THE DISPUTE GOES THAT THE RELEVANT PAGE NO. 69 OF SEIZED MATERIAL RH- 42 REFLECTS THE PURCHASE MADE BY THE ASSESSEE FROM M/S RUNGTA MINES LTD. (RML FOR SHORT) WHICH WAS DISCLOSED IN THE BOOKS OF ACCOUNTS . SIMILARLY THE PAGE NO.67 OF THE IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 3 SEIZED MATERIAL RH-39 REPRESENTS THE PURCHASE MADE BY THE ASSESSEE FROM M/S RUNGTA SONS PVT. LTD. (RSPL FOR SHORT) WHICH WAS NOT DISCL OSED IN THE BOOKS OF ACCOUNTS. THE NECESSARY DETAILS OF SUCH PURCHASES ARE DETAILED BE LOW:- PAGE SELLER PURCHASER INVOICE & DATE QUANTITY OF PURCHASE/SALE(MT) AMOUNT REMARKS 69 OF RH42 RML M.RUNGTA 3 OF 31.1.06 19928.39 29,141,936 EXPOR T 67OF RH39 RSPL M. RUNGTA 2 OF 12.1.06 19928.330 3,08,06,903 EXPORT DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE CLAIMED THAT THE BILL OF RSPL WAS WRONGLY MADE AND SUBSEQUENTLY IT WAS RECTIFIED BY R ML BY ISSUING THE ABOVE STATED INVOICE. THUS, ASSESSEE SUBMITTED THAT PAGE NO.67 O F SEIZED MATERIAL RH-39 DOES NOT REPRESENT THE PURCHASE AND THEREFORE THE SAME WAS N OT SHOWN IN THE BOOKS OF ACCOUNTS. 3.1 HOWEVER, AO DISREGARDED THE CONTENTION OF THE A SSESSEE BY OBSERVING THAT BOTH THE BILLS RAISED BY RML AND RSPL ARE DIFFERENT IN T ERMS OF BILL NO. DATE OF BILL, THE SELLER, QUANTITY, RATE, ETC. THEREFORE, IT CANNOT B E SAID THAT THE BILL RAISED BY RSPL WAS WRONGLY MADE AND IT WAS SUBSEQUENTLY RECTIFIED BY R ML. IN VIEW OF THE ABOVE, AO HELD THAT THE BILL OF RSPL IS REPRESENTING THE PURC HASE OUTSIDE THE BOOKS OF ACCOUNT FOR 3,08,06,903/- WHICH HAS BEEN EXPORTED BY ASSESSEE W ITHOUT SHOWING PROFIT EARNED ON SUCH EXPORT. ACCORDINGLY, AO WORKED OUT THE PROF IT EARNED ON SUCH UNDISCLOSED PURCHASE FOR 67,92,764/- AND ADDED TO THE TOTAL INCOME OF ASSESS EE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE AO HAS NOT BRO UGHT ANY SUBSTANTIAL EVIDENCE TO PROVE THAT IT HAS PURCHASED THE GOODS FROM RSPL OUT SIDE BOOKS OF ACCOUNT. THERE IS ALSO NO EVIDENCE SUGGESTING THAT THE PURCHASE FROM RSPL HAS BEEN EXPORTED AND ITS EXPORT PROCEEDS HAVE BEEN RECEIVED BY THE ASSESSEE. THE AO ERRED IN INFERRING THE UNDISCLOSED PURCHASE FROM RSPL MERELY ON THE GROUND OF RECOVERY OF PURCHASE BILL DURING SEARCH PROCEEDI NGS. IT IS IMPORTANT TO NOTE THAT ALL THE COMPANIES FROM WHICH ASSESSEE HAS SHOWN PURCHAS ES BELONGED TO THE SAME GROUP WHICH ARE BEING OPERATED FORM THE SAME OFFICE PREMI SES. THEREFORE THE BILL FROM RSPL WAS GENERATED IN THE NAME OF ASSESSEE INADVERT ENTLY AND THEREFORE IT WAS RECTIFIED BY RML SUBSEQUENTLY. THE ALLEGATION OF TH E AO THAT THE ASSESSEE HAS MADE IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 4 CLANDESTINE EXPORT IS BASELESS. IT IS BECAUSE THE E XPORT CAN TAKE PLACE THROUGH PORT AND IT INVOLVES DIFFERENT CHANNEL/ STAGES BEFORE ACTUAL EXPORT OF THE GOODS. THE AO HAS ALSO NOT BROUGHT ANY DEFECT IN THE BOOKS OF ACCOUNT, BANK ACCOUNT AND OTHER DOCUMENTS WHICH WERE EXAMINED DURING THE ASSE SSMENT PROCEEDINGS. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT THE ADDITION HAS B EEN MADE ON ACCOUNT OF SUPPRESSED PROFIT BY THE AO ON THE BASIS HIS OWN SURMISE AND C ONJECTURE AND WITHOUT ANY BASE. LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 13. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED ON RECORD. I FIND THAT PAGE 67 OF RH-39 CONTAINS BILL NO 2 DATED 12-01-2006 DRAWN BY M/S RUNGT SONS (P) LTD. BARBIL (ORISSA) SHOWING PUR CHASE BY THE ASSESSEE OF IRON ORE FINES OF 19928.330 GROSS MT (18670.850 DRY MT) @ RS .1650/- PER MT FOR TOTAL VALUE OF RS.3,08,06,903/-. I ALSO FIND THAT PAGE 69 OF RH -42 CONTAINS BILL NO 3 DATED 31-01- 2006 DRAWN BY M/S RUNGTA MINES LTD. BARBIL (ORISSA) SHOWING PURCHASE BY THE ASSESSEE OF IRON ORE FINES OF 19928.390 GROSS MT (1 8213.710 DRY MT) @ RS1600/- PER MT FOR TOTAL VALUE OF RS.291,41,936/-. THE AO W AS THEREFORE FACTUALLY CORRECT IN POINTING OUT THAT THE TWO BILLS PAGE 69 OF RH-42 AN D PAGE 67 OF RH-39) CONTAINED DIFFERENT CONTENTS. THE LD AR ON THE OTHER HAND HAS ARGUED THAT THERE WAS NO SUBSTANTIAL OR NOTICEABLE DIFFERENCE IN THE CONTENT S OF THE BILLS AND SO THE AO HAS ERRED IN REJECTING THE CONTENTION THAT THEY REPRESE NTED THE SAME PURCHASE. I FIND SUBSTANCE IN THE ARGUMENT THAT THE TWO BILLS DIFFER ED VERY SLIGHTLY BUT STILL THE POINT HAS TO BE CONCEDED TO THE AO THAT THE TWO BILLS DID DIFFER IN CONTENT AND THEREFORE IT COULD NOT BE PRESUMED THAT THEY REPRESENTED THE SAM E PURCHASE. THE AO HOWEVER WAS NOT JUSTIFIED IN STRAIGHTWAY JUMPING TO THE CONCLUS ION THAT BILL AT PAGE 67 OF RH-39 REPRESENTED UNACCOUNTED PURCHASES OF IRON ORE FINES WHICH WAS CLANDESTINELY EXPORTED BY THE ASSESSEE THEREBY MAKING UNACCOUNTED PROFIT. THE RECOVERY OF A PURCHASE BILL COULD HAVE BEEN A LEAD FOR INVESTIGAT ION BUT IT COULD NOT: BE MADE THE SOLE BASIS FOR CONCLUDING THAT THE ASSESSEE HAD IND ULGED IN CLANDESTINE EXPORT WITHOUT THERE BEING ANY POSITIVE MATERIAL OR EVIDENCE ON RE CORD TO SUPPORT THE ALLEGATIONS. I NOTE THAT THE AO HAS NO MATERIAL, EVIDENCE OR DOCUM ENT IN SUPPORT OF HIS ALLEGATIONS OF CLANDESTINE EXPORT AND THAT HIS CONCLUSION OF IM AGINARY EXPORT IS BASED PURELY ON HIS ASSUMPTIONS AND PRESUMPTIONS. I ALSO FIND MERIT AND SUBSTANCE IN THE CONTENTION OF THE LD AR THAT THE DEPARTMENT EVEN IN COURSE OF THE SEARCH & SEIZURE OPERATION HAS FOUND NO DOCUMENT OR EVIDENCE TO SUGGEST THAT THE A SSESSEE WAS INVOLVED IN CLANDESTINE EXPORT FOR THE AO HAS DISCUSSED NO SEIZ ED MATERIAL IN THE IMPUGNED ORDER THAT EVEN REMOTELY SUGGESTED OR INDICATED THAT THE ASSESSEE HAD MADE CLANDESTINE EXPORT OF IRON ORE FINES. THE MAIN ISSUE THAT REQUI RES ADJUDICATION IN THE PRESENT APPEAL IS WHETHER THE ASSESSEE DURING THE RELEVANT FINANCIAL YEAR HAS ACTUALLY MADE EXPORT IN EXCESS OF WHAT HAS BEEN RECORDED IN ITS S TATUTORY RECORDS. THE AO HAS BROUGHT NO SUPPORTING MATERIAL ON RECORD TO SUBSTAN TIATE HIS CONCLUSIONS THAT CLANDESTINE EXPORT WAS MADE BY THE ASSESSEE. THE AO HAS INSTEAD ASSUMED AND BLINDLY CONCLUDED ON THE BASIS OF A BILL SEIZED IN WORK OUT SUPPRESSED PROFIT ON IMAGINARY EXPORTS. THE APPROACH ADOPTED BY THE AO I N THE IMPUGNED ORDER IS FLAWED AND DOES NOT HAVE ANY SANCTITY. THE AO HAS TO PROVE BEYOND DOUBT THAT THE EXPORT OF IRON ORE FINES AS ALLEGED BY HIM IN THE IMPUGNED OR DER WAS ACTUALLY MADE BY THE IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 5 ASSESSEE BUT UNFORTUNATELY NO SUCH POSITIVE EVIDENC E HAS BEEN COMING. THE MERE RECOVERY OF A PURCHASE BILL BY ITSELF CANNOT BE THE GROUND TO INFER THAT THE ASSESSEE WAS ENGAGED IN CONCEALING ITS EXPORT. IT IS THE BAS IC PHILOSOPHY IN TAXATION MATTERS THAT NO TAX CAN BE LEVIED ON THE BASIS OF ASSUMPTIO NS AND PRESUMPTIONS. ARTICLE 265 OF THE CONSTITUTION OF INDIA SAYS THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY THE AUTHORITY OF LAW. UNLESS THE AO HAS PROVED TO THE H ILT THE ALLEGED EXPORT OF IRON ORE FINES BY PLACING ON RECORD AUTHENTIC, RELIABLE AND CREDIBLE EVIDENCE, HE CANNOT DEMAND TAX ON THE BASIS OF HYPOTHESIS AND THEORETIC AL CALCULATION WITHOUT CONSIDERING THE GROUND REALITY OF THE FUNCTIONING OF THE ASSESS EE GROUP. THE DIFFERENT COMPANIES OF THE ASSESSEE GROUP OPERATE FROM THE SAME OFFICE PRE MISES AND THEREFORE INADVERTENT ERRORS IN PREPARATION OF BILLS BY SUCH COMPANIES WE RE HUMANLY I POSSIBLE AND COULD NOT BE RULED OUT ALTOGETHER. THE IMPUGNED ORDER OF THE AO IS ITSELF AN ACKNOWLEDGMENT OF THE FACT THAT INADVERTENT ERRORS CAN SOMETIMES CREEP IN THE PREPARATION OF BILLS BY DIFFERENT COMPANIES OF THE GROUP FOR THE AO HAS HIMSELF DISREGARDED THE BILLS FOUND AT PAGES 36 AND 66 OF T HE SEIZED DOCUMENT RH-42 THOUGH SUCH BILLS WERE NOT EXPLICITLY I CANCELLED. THE AO HELD IN THE IMPUGNED ORDER THAT THESE BILLS WERE ERRONEOUSLY DRAWN AND ALSO THAT SU CH ERRORS WERE INADVERTENT. THE AO DID NOT ACCEPT THAT BILL FOUND AT PAGE 67 OF RH- 39 WAS INADVERTENTLY DRAWN BUT HAS CERTAINLY ACKNOWLEDGED IN THE IMPUGNED ORDER TH AT INADVERTENT ERRORS IN PREPARATION OF BILLS BY DIFFERENT COMPANIES OF THE GROUP COULD NOT BE RULED OUT ALTOGETHER. UNDER THE CIRCUMSTANCES, THE MERE RECOV ERY OF A PURCHASE BILL BY ITSELF CANNOT BE MADE THE GROUND TO INFER THAT THE ASSESSE E WAS INVOLVED IN CONCEALING ITS EXPORT. THE AO WAS INSTEAD EXPECTED TO PLACE ON REC ORD AUTHENTIC, RELIABLE AND CREDIBLE EVIDENCE TO PROVE BEYOND DOUBT THE ALLEGED EXPORT OF IRON ORE FINES BY THE ASSESSEE. THE CLANDESTINE PURCHASE AND EXPORT OF IR ON ORE FINES AS ALLEGED BY THE AO IN THE IMPUGNED ORDER HAS TO BE PROVED BY TANGIBLE, DIRECT, AFFIRMATIVE AND INCONTROVERTIBLE EVIDENCES RELATING TO (A) PURCHASE OF IRON ORE FINES, LABOUR EMPLOYED AND PAYMENT MADE TO THEM, RECORDS OF SECURITY OFFIC ERS, DISCREPANCY IN THE STOCK OF IRON ORE FINES; (B) CLANDESTINE REMOVAL OF IRON ORE FINES WITH REFERENCE TO ENTRY OF TRUCKS IN THE MINES PREMISES, LOADING OF IRON ORE F INES THEREIN, SECURITY GATE RECORDS, TRANSPORTERS' DOCUMENTS SUCH AS LRS, ENTRIES AT DIF FERENT CHECK POSTS, FORMS OF COMMERCIAL TAX AND RECEIPTS BY THE CONSIGNEES; (C) AMOUNTS RECEIVED FROM THE CONSIGNEES, STATEMENT OF THE CONSIGNEES, RECEIPTS O F SALE PROCEEDS BY' THE CONSIGNOR AND ITS DISPOSAL AND (D) ENTRIES IN THE PRESCRIBED RECORDS OF THE PORTS THROUGH WHICH THE EXPORT WAS ALLEGEDLY MADE. BUT, IN THE INSTANT CASE, NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO. IT IS A SETTLED LEGAL PROPOSITION THAT IN CASE OF ALLEGED CLANDESTINE REMOVAL, THE ONUS IS ON THE AO TO PROVE WHAT IT ALLEGES WITH POSITIVE AND CONCRETE EVIDENCE. IN ABSENCE OF ANY POSITIVE EVIDE NCE BROUGHT BY THE AO TO DISCHARGE HIS ONUS, THE IMPUGNED ORDER CANNOT BE SU STAINED. THE AO HAS THUS NOT ONLY ASSUMED IMAGINARY PURCHASE OF IRON ORE FINES B UT ALSO ASSUMED ITS CLANDESTINE EXPORT WITHOUT THERE BEING ANY INCRIMINATING MATERI AL ON RECORD TO SUPPORT SUCH ALLEGATIONS. I ALSO FIND MERIT IN THE ARGUMENT THAT EXPORT THAT TOO THROUGH A PORT COULD NOT BE CLANDESTINELY MADE WITHOUT THE SAME BEING DU LY ENTERED IN THE PRESCRIBED RECORDS OF THE PORT FOR GOODS MEANT FOR EXPORT HAS TO PASS THROUGH DIFFERENT CHANNELS AND ENTRIES ARE DULY MADE IN THE PRESCRIBED RECORDS MAINTAINED AT THE PORT. BUT, NO SUCH EVIDENCE AS ENTRIES IN THE PORT RECORDS HAS BE EN PLACED BY THE AO TO SUBSTANTIATE HIS ALLEGATIONS THAT THE ASSESSEE MADE CLANDESTINE EXPORT OF IRON ORE FINES. ALSO, THE IMPUGNED ORDER IS SILENT ON THE ISSUE OF RECEIPT OF EXPORT PROCEEDS FOR SUCH PROCEEDS CAN ONLY COME THROUGH THE BANKING CHANNEL. I FIND T HAT THE AO HAS ASSESSED THE ASSESSEE FOR THE ASSESSMENT YEARS 2006-07 TO 2012- 13 WHEREIN HE HAS DULY IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 6 ACKNOWLEDGED THAT HE HAD EXAMINED THE BOOKS OF ACCO UNT, BANK ACCOUNTS, DOCUMENTS AND EVIDENCE PRODUCED IN COURSE OF THE ASSESSMENT P ROCEEDINGS OR FOUND IN THE SEARCH. BUT NOWHERE THE AO HAS FOUND THE SALE PROCE EDS OF THE ALLEGED EXPORT CREDITED IN THE BANK ACCOUNTS OF THE ASSESSEE. THE AO HAS NOT ALLEGED THAT THE ASSESSEE MAINTAINED ANY UNDISCLOSED BANK ACCOUNT NO R ANY SUCH BANK ACCOUNT WAS UNEARTHED IN THE SEARCH. UNDER THE CIRCUMSTANCES, T HERE IS NO EVIDENCE TO SUGGEST THAT THE PROCEEDS OF ALLEGED EXPORT WERE EVER RECEIVED I N THE BANK ACCOUNTS OF THE ASSESSEE. IN THE ABSENCE OF ANY SUPPORTIVE MATERIAL OR EVIDENCE, THE ALLEGATION OF CLANDESTINE EXPORT HAS REMAINED UNSUBSTANTIATED. TH E AO WAS REQUIRED IN LAW TO PROVE BEYOND REASONABLE DOUBT THE ALLEGED EXPORT OF IRON ORE FINES BY PLACING ON RECORD AUTHENTIC, RELIABLE AND CREDIBLE EVIDENCE AN D NOT DEMAND TAX ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS BUT HE HAS FAILED TO B RING ON RECORD AN IOTA OF EVIDENCE WHICH COULD EVEN REMOTELY SUGGEST OR INDIC ATE THAT THE ASSESSEE WAS INVOLVED IN CLANDESTINE EXPORT. I ALSO FIND THAT TH ERE IS ANOTHER TO THE ISSUE UNDER CONSIDERATION. THE DEPARTMENT HAS SEARCHED THE PREM ISES OF THE ASSESSEE GROUP INCLUDING THOSE OF THE COMPANY M/S RUNGTA SONS (PJ LTD. BUT. NO DOCUMENT OR EVIDENCE WAS FOUND IN THE SEARCH WHICH SUGGESTED OR INDICATED THAT ANY UNACCOUNTED SALE WAS MADE BY M/S RUNGTA SONS (P) LTD. I HAVE PE RUSED THE ASSESSMENT ORDER PASSED U/S 153A/143(3) BY THE SAME AO IN THE CASE O F M/S RUNGTA SONS (PJ LTD FOR THE RELEVANT ASSESSMENT YEAR 2006-07. THE AO HAS NO WHERE HELD IN THE ASSESSMENT ORDER THAT M/S RUNGTA SONS (P) LTD WAS INVOLVED IN MAKING UNACCOUNTED SALES. THE IMPUGNED BILL FOUND AT PAGE 67 OF RH -39 IS ADMITTE DLY NOT ENTERED IN THE BOOKS OF M/S RUNGT A SONS (P) LTD. HOWEVER, AS NO MATERIAL S UGGESTING UNACCOUNTED SALE BY M/S RURIGTA SONS (P) LTD WAS FOUND IN THE SEARCH TH E AO HAS RIGHTLY TAKEN NO ADVERSE VIEW IN ITS CASE. BUT THEN, THE AO CANNOT TURN AROU ND AND HELD THAT THE ASSESSEE MADE UNACCOUNTED PURCHASE FROM M/S RUNGTA SONS (P) LTD. ALSO, THE DEPARTMENT HAS RECOVERED NO MATERIAL IN THE SEARCH EVIDENCING UNAC COUNTED PAYMENTS BY THE ASSESSEE OR UNACCOUNTED RECEIPTS BY M/S RUNGTA SONS (P) LTD IN RELATION TO THE ALLEGED UNACCOUNTED TRANSACTION. THE AO HAS THUS ERRED IN L AW AS WELL AS ON THE FACTS OF THE CASE IN ASSUMING IMAGINARY EXPORT OF IRON ORE FINES WITHOUT THERE BEING ANY MATERIAL, DOCUMENT OR EVIDENCE TO SUPPORT THE ALLEGATIONS. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF SUPPRESSED PROFIT IS NEITHER SUSTAINABLE IN LAW NOR ON FACTS. THE ADD ITION OF RS.67,92,764/- IS THEREFORE DIRECTED TO BE DELETED. GROUND NO 3 IS ALLOWED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 5. LD. DR SUBMITTED THAT THE BILLS FROM RML AND RPM L ARE REPRESENTING THE TRANSACTIONS OF PURCHASE. HAD THE BILL OF RSPL BEIN G ISSUED WRONGLY THEN THERE WOULD HAVE NOT BEEN ANY DIFFERENCE IN TERMS OF QUANTITY, RATE ETC. LD. DR IN SUPPORT OF CLAIM DREW OUR ATTENTION ON PAGES 44 AND 45 OF THE PAPER BOOK WHERE THE BILLS RAISED BY RSPL AND RML WERE PLACED. LD. DR FURTHER SUBMITTED THAT THE ABOVE DIFFERENCE WAS DULY ACCEPTED BY LD. CIT(A) IN HIS APPELLATE ORDER BY OBSERVING AS UNDER:- THE AO WAS THEREFORE FACTUALLY CORRECT IN POINTING OUT THAT THE TWO BILLS (PAGE 69 OF RH-42 AND PAGE 67 OF RH-39) CONTAINED DIFFERE NT CONTENTS. .. IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 7 LD. DR FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ER RED IN DELETING THE ADDITION MADE BY THE AO ON HIS WRONG SURMISE AND CONJECTURE. LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO AND REQUESTED THE BENCH TO CONFIRM THE SAME. ON THE OTHER HAND, LD. AR BEFORE US FILED PAPER BOO K WHICH IS RUNNING FROM PAGES 1 TO 70 AND SUBMITTED THAT BILL FROM RSPL WAS WRONGLY PRINTED BUT SUBSEQUENTLY IT WAS RECTIFIED BY RML. HOWEVER, IN THE PROCESS OF RECTIF ICATION, THE BILL RAISED BY RSPL WAS INADVERTENTLY NOT CANCELLED. THE ASSESSEE HAS S HOWN ALL MOST SAME AMOUNT OF QUANTITY FOR THE PURCHASE FROM THE RML WHICH WAS DU LY RECORDED. HE FURTHER SUBMITTED THAT AO HAS NOT BROUGHT ANYTHING ON RECOR D TO JUSTIFY THAT THE IMPUGNED PURCHASE FROM RSPL WAS MADE BY THE ASSESSEE. HAD TH ERE BEEN ACTUAL PURCHASE FROM RSPL OUTSIDE THE BOOKS OF ACCOUNTS AND ITS SUBSEQUE NT EXPORTS THEN THERE WOULD HAVE BEEN OTHER CORROBORATIVE EVIDENCES. BUT NO SUCH EVI DENCE WAS BROUGHT ON RECORD. THE NECESSARY CORROBORATIVE EVIDENCES CAN BE SUMMARISED AS UNDER. I) NO PROVE OF DELIVERY AND MOVEMENT OF THE GOODS; II) NO EVIDENCE OF EXPORT OF GOODS; III) NO PROVE FOR THE REMITTANCE AGAINST THE EXPOR T OF GOODS; IV) NO EVIDENCE OF THE CUSTOMS CLEARANCE FOR THE A LLEGED EXPORT OF GOODS; BESIDES, THE ABOVE, LD. AR SUBMITTED THAT DIFFERENT COMPANIES AS DISCUSSED IN THE ASSESSMENT ORDER WHICH WERE BELONGING TO THE GROUP, WERE OPERATING FROM THE SAME OFFICE PREMISES AND THUS THE ERROR WAS COMMITTED IN ADVERTENTLY IN RAISING THE INVOICES BY THE RSPL. LD. AR RELIED ON THE ORDER OF LD. CIT( A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS ARE THAT THE BILLS OF TWO DIFFERENT COMPANIES RAISED IN THE NAME OF THE ASSESSEE WERE R ECOVERED DURING SEARCH PROCEEDINGS U/S 132 OF THE ACT. THE BILLS WERE RAIS ED BY TWO DIFFERENT COMPANIES WHICH WERE BELONGING TO THE SAME GROUP. THE CLAIM O F THE ASSESSEE WAS THAT BILL RAISED BY RSPL WAS WRONG AND THE SAME WAS CORRECTED BY RML BY ISSUING THE INVOICE. IN FACT, THE BILL WAS RAISED BY RSPL INADVERTENTLY IN PLACE OF RML WHICH WAS SUBSEQUENTLY RECTIFIED. HOWEVER, THE AO OBSERVED CE RTAIN DIFFERENCE IN BOTH THE BILLS RAISED BY RSPL AND RML AND ACCORDINGLY CONTENTION O F THE ASSESSEE WAS REJECTED. AS IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 8 PER AO THE ASSESSEE HAS CLANDESTINELY EXPORTED THE UNDISCLOSED PURCHASES FROM RSPL AND EARNED A PROFIT OF RS. 67,92,764.00 ON SUCH EXP ORT WHICH WAS NOT OFFERED TO TAX. 6.1 HOWEVER, LD. CIT(A) DELETED THE ADDITION MADE B Y THE AO ON THE GROUND THAT AO FAILED TO BRING ANYTHING ON RECORD OTHER THAN TH E COPY OF THE BILL IN SUPPORT OF UNDISCLOSED PURCHASE. NOW THE ISSUE BEFORE US ARISE S WHETHER THE BILL RAISED BY RSPL FOUND DURING THE COURSE OF SEARCH PROCEEDINGS U/S.1 32 OF THE ACT REPRESENTS THE UNDISCLOSED PURCHASE OF THE ASSESSEE IN THE GIVEN F ACTS AND CIRCUMSTANCES. INDEED, THE BILL WAS RECOVERED DURING SEARCH PROCEEDING WHICH W AS RAISED BY RSPL AND THE SAME WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THER EFORE, THE SAME WAS TREATED AS UNDISCLOSED PURCHASE WHICH HAS RESULTED SUPPRESSED PROFIT FOR 67,92,764/- AS ALLEGED BY THE AO. HOWEVER, ON EXAMINATION OF THE FACTS OF THE CASE, WE FIND CERTAIN DEFECTS IN THE ORDER OF AO WHICH RE ENUMERATED:- A) NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO SUGGESTING THAT THE UNDISCLOSED PURCHASE HAS BEEN EXPORTED BY THE ASSES SEE; B) NO DEFECT IN THE BOOKS OF ACCOUNT INCLUDING STOC K REGISTER OF THE ASSESSEE HAS BEEN REPORTED BY THE AO. C) THE AO HAD NOT TAKEN ANY CONFIRMATION FROM RSPL FOR THE IMPUGNED AMOUNT OF UNDISCLOSED PURCHASE U/S. 133(6) / 131 OF THE ACT. D) THE AMOUNT OF PURCHASES SHOWN BY THE ASSESSEE FR OM RSPL AS WELL AS RML IS OF THE SIMILAR AMOUNT, QUANTITY, RATE ETC. THE D IFFERENCE BETWEEN TWO PURCHASES IS OF NEGLIGIBLE VALUE. THERE IS NO EVIDE NCE OF ANY PAYMENT MADE BY THE ASSESSEE TO RSPL FOR THE IMPUGNED PURCHASE. THEREFORE IN VIEW OF ABOVE WE ARE OF THE OPINION TH AT THE ALLEGATION OF THE AO THAT THE PURCHASE BILL FROM RSPL REPRESENTS UNDISCLOSED PURC HASES IS BASED ON SURMISE AND CONJUNCTURE. THUS THE IMPUGNED ADDITION IS NOT WARR ANTED. IN THIS CONNECTION, WE ALSO RELY ON THE CASE OF RAWALWASIA ISPAT UDYOG LTD. VS. CCE REPORTED IN 186 ELT 465 (TRIBUNAL DEL) WHEREIN THE RELEVANT EXTRACT IS REPRODUCED BELOW:- 10. THE LEARNED ADVOCATE HAS ALSO VEHEMENTLY CONTE NDED THAT THE REVENUE HAS NOT ADDUCED ANY EVIDENCE REGARDING PURCHASE OF RAW-MATE RIALS REQUIRED TO MANUFACTURE THE ALLEGED QUANTITY OF PIPES NOR ANY MATERIAL HAS BEEN PRODUCED REGARDING CONSUMPTION OF ELECTRICITY. WE FIND SUBSTANTIAL FOR CE IN THESE SUBMISSIONS OF THE LEARNED ADVOCATE AS THERE IS NOTHING ON RECORD TO S HOW WHOM THE VARIOUS RAW- IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 9 MATERIALS WERE PURCHASED FROM. IT HAS BEEN HELD BY THE TRIBUNAL IN THE CASE OF KASHMIR VANASPATI P. LTD. V. CCE , 1989 (39) ELT 655(T) THAT CHARGE OF CLANDESTINE REMOVAL CANNOT BE PROVED ONLY ON THE BASIS OF ENTRI ES IN THE NOTEBOOK MAINTAINED BY THE LABOURERS UNLESS THE SAME IS SUPPORTED BY OTHER EVIDENCE SUCH AS RAW-MATERIAL CONSUMED, GOODS ACTUALLY MANUFACTURED AND CLEARED W ITHOUT PAYMENT OF DUTY. REGRINDING THE USE OF ELECTRICITY THE REVENUE HAS N OT CONTROVERTED THE SUBMISSION OF THE LEARNED ADVOCATE THAT DURING THE MATERIAL PERIO D, THEIR CONSUMPTION OF ELECTRICITY HAS REMAINED MORE OR LESS THE SAME. IT IS ALSO NOT THE CASE OF REVENUE THAT THE APPELLANTS WERE SHOWING EXCESS CONSUMPTION OF ELECT RICITY THAN REQUIRED. THERE IS ALSO NO MATERIAL/EVIDENCE ON THE RECORD TO EVEN SUG GEST THEFT OF THE ELECTRICITY BY THE APPELLANTS. THE ADJUDICATING AUTHORITYS FINDING TH AT IT IS MATTE OF COMMON KNOWLEDGE THAT THE PERSONS WHO INDULGE IN CLANDESTI NE MANUFACTURE AND REMOVAL OF GOODS, ALSO INDULGE IN CLANDESTINE PURCHASING OF RA W MATERIALS AND INDULGE IN THEFT OF ELECTRICITY AND OTHERWISE ALSO THEY CAN USE UNACCOU NTED DIESEL TO HIDE THE PRODUCTION, BY USING THEIR GENERATOR IS BASED ON SURMISE SAND C ONJECTURES. THE CHARGE OF CLANDESTINE REMOVAL HAS TO BE PROVED BY THE REVENUE BY BRINING POSITIVE EVIDENCE ON RECORD AND NOT BY PRESUMPTIONS AND ASSUMPTIONS. THE SUPREME COURT HAS HELD IN THE JUDGMENT IN THE C ASE OF OUDH SUGAR MILLS LTD. V. UOL, 1987 (2) ELT (J 127) THAT NO SHOW CAUSE NOTICE OR AN ORDER CAN BE BASED ON ASSUMPTIONS AND PRESUMPTIONS. THE FINDINGS BASED ON SUCH PRESUMPTIONS AND ASSUMPTIONS WITHOUT ANY TANGIBLE EVIDENCE WILL BE V ITIATED BY AN ERROR OF LAW. SIMILARLY, IN THE CASE OF POLY PRINTERS V. CCE, DEL HI-1,2002 (139)ELT 295, THE TRIBUNAL DID NOT FIND THE CHARGE OF CLANDESTINE MAN UFACTURE AND CLEARANCES OF THE FINAL PRODUCT BY THE ASSESSEE SUSTAINABLE AS NO EVIDENCE HAS ALSO BEEN COLLECTED BY RECORDING THE STATEMENT OF ANY BUYERS TO ESTABLISH THE CLANDESTINE SALE F THE FIND PRODUCT BY THE APPELLANT WITHOUT PAYMENT OF DUTY... NO UNACCOUNTED PRINTING INK WAS FOUND LYING IN THE FACTORY PREMISES OF THE FIRM .... THE TRIBUNAL ALSO IN THE CASE OF LAXMI ENGG. WORKS V. CCE, DELHI, 2002 (139) ELT 573 (T) WHEREIN THE CHARGE OF CLANDESTINE MANUFACTURE AND REMOVAL WAS M ADE ON THE BASIS OF STATEMENTS, WHICH WERE RETRACTED SUBSEQUENTLY, HAS OBSERVED THA T EVEN OTHERWISE THERE IS NOTHING ON RECORD TO SUGGEST IF STATEMENTS OF SUPPL IERS OF THE RAW-MATERIAL I.E. SELLICA/INGOTS WHICH WERE NOT ACCOUNTED FOR IN THE STATUTORY RECORD BY THE APPELLANTS AND OF THE BUYERS TO WHOM THE FINAL PROD UCT I.E. COPPER WIRE RODS WERE ALLEGEDLY SUPPLIED BY THEM WITHOUT THE PAYMENT OF DUTY, DURING THE PERIOD IN QUESTION, WERE RECORDED. NO EVIDENCE REGARDING C ONSUMPTION OF ELECTRICITY DURING THE PERIOD IN QUESTION MORE THAT WHAT IT WAS CONSUMED IN THE NORMAL COURSE BY THE APPELLANTS WAS COLLECTED DURING THE I NVESTIGATION. THE TRIBUNAL HAS HELD THAT NO CAPITAL OUT OF THE STATEMENTS COULD BE TAKEN AS THE SAME HAD REMAINED UNCORROBORATED FROM ANY OTHER RELIABLE AND CONCRETE SUBSTANTIVE EVIDENCE. IN THE PRESENT MATTERS ALSO, THE STATEMENTS AND THE INVOIC ES HAVE REMAINED UNCORROBORATED BY ANY INDEPENDENT UNIMPEACHABLE EVIDENCE, SUCH AS PURCHASE OF RAW- MATERIALS/CONSUMPTION OF ELECTRICITY/PURCHASE OF GO ODS BY BUYERS, ETC. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE REVENUE HAS NOT SUCCEE DED IN PROVING THE ALLEGATION OF CLANDESTINE MANUFACTURE AND CLEARANCE OF PIPES BY T HE APPELLANTS ON THE BASIS OF 143 INVOICES IN QUESTION. WE, THEREFORE, SET ASIDE THE DEMAND OF DUTY ON THIS COUNT. THUS, IN CONCLUSION WE ARE OF THE OPINION THAT RECO VERY OF PURCHASE BILL DOES NOT REPRESENT THE UNDISCLOSED PURCHASE FROM THE RSPL IN THE GIVEN FACTS & CIRCUMSTANCES. IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 10 IT IS BECAUSE IF THE PURCHASE HAD BEEN MADE BY THE ASSESSEE THEN IT HAS TO BE AVAILABLE EITHER IN THE STOCK OR IT SHOULD HAVE BEEN SOLD TO SOME OTHER PARTY. BUT IN THIS REGARD NO EVIDENCE HAS BEEN BROUGHT ON RECORD. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT. ACCORDINGLY WE U PHOLD THE SAME. HENCE, THIS GROUND OF REVENUE IS DISMISSED. 7. NEXT ISSUE RAISED BY REVENUE IN APPEAL IS THAT L D. CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO FOR 49,66,584/- ON ACCOUNT OF UNDISCLOSED SALE. 8. THE ASSESSEE IN ITS AUDIT REPORT HAS SHOWN THE P RODUCTION OF IRON ORE DURING THE YEAR AT 68089.390 MT. HOWEVER, DURING THE SEARCH PR OCEEDINGS CERTAIN DOCUMENTS WERE SEIZED WHICH ARE MARKED AS RH-26 AND COPY OF F IR NO.52 WHICH WERE SHOWING THE PRODUCTION AT 82171 MT. ACCORDING, IT WAS OBSER VED THAT THE ASSESSEE HAS SHOWN LESS QUANTITY OF PRODUCTION BY 14081.61 MT. THUS, THE AO CALLED UPON THE ASSESSEE TO EXPLAIN THE DIFFERENCE IN THE QUANTITY OF PRODUC TION AS DISCUSSED ABOVE. THE ASSESSEE IN COMPLIANCE THERETO SUBMITTED AS UNDER:- 1) FIR HAS NOT REACHED TO ITS FINALITY AND THE MATT ER IS SUB JUDICE IN THE COURT OF LAW. THE FIR NO. 52 WAS CHALLENGED BEFORE HIGH COUR T OF ORISSA BY WAY OF WRIT PETITION NO.786/2009 WHICH HAS NOT REACHED TO FINALITY. 2) THERE IS NO ALLEGATION IN THE FIR FOR SHOWING LE SS QUANTITY OF PRODUCTION RATHER IT ALLEGES THAT THE MINING OF IRON ORE HAS B EEN CARRIED OUT FROM THE BROKEN FOREST AREA. AS PER THE FIR, THE ASSESSEE WAS ENTIT LED FOR THE PRODUCTION OF MANGANESE ORE FROM THE FOREST AREA AND ASSESSEE WAS NOT AUTHORIZED FOR THE PRODUCTION OF IRON ORE FROM THE FOREST AREA. 3) THERE IS NO ALLEGATION THAT THE PRODUCTION OF IR ON ORE HAS TAKEN PLACE WITHOUT RECORDING IN THE BOOKS OF ACCOUNT. 4) THERE IS NO BASIS FOR MENTIONING IN THE FIR FOR SHOWING PRODUCTION OF 82171 MT. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE BY OBSERVING THAT THE PRODUCTION QUANTIFIED IN THE FIR CANNOT BE IGNORED. ACCORDINGLY, AO WORKED OUT THE SALE VALUE OF SUPPRESSED QUANTITY OF PRODUCTION I.E . 14081.61 MT X 352.70 PM = 49,56,583.85. THE SALE VALUE WAS TREATED BY THE AO AS UNDISCLOSED INCOME AND ACCORDINGLY THE SAME WAS ADDED TO THE TOTAL INCOME OF ASSESSEE. IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 11 9. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THE FOLLOWING:- A) THAT ALLEGATION IN THE FIR IS ABOUT THE UNAUTHOR IZED EXTRACTION OF IRON ORE FROM THE MINE AND IT DOES NOT ALLEGE THAT PRODUCTIO N WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. B) THE ASSESSEE ALSO SUBMITTED THAT THE FIR HAS BEE N CHALLENGED BEFORE HIGH COURT ORISSA AND THE MATTER IS SUBJUDICE IN THE COU RT OF LAW. THE AO HAS NOT BROUGHT ANYTHING ON RECORD OTHER THAN THE COPY OF F IR SUGGESTING THAT THE ASSESSEE HAS SHOWN LESS PRODUCTION IN ITS BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO PLACED ITS RELIANCE ON THE ORDER OF ITAT CHAND IGARH IN THE CASE OF INCOME TAX OFFICER VS. ARORA ALLOYS LTD. REPORTED (2012) 25 TAXMANN.COM 134 (CHANDIGARH TRIB.) IT WAS ALSO SUBMITTED THAT THE PRODUCTION DETAILS OF IRON ORE WAS DULY SUBMITTED IN THE STATUTORY RETURNS FIL ED TO THE INDIAN BUREAU OF MINES WHICH WERE DULY ACCEPTED. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE LD. C IT(A) DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 15. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL PLACED ON RECORD. I FIND FROM THE IMPUGNED ORDER THAT THE AO HAS RELIED SOLELY ON THE ALLEGATIONS CONTAINED IN THE FIR V/HEREIN IT WAS ST ATED THAT THE ASSESSEE PRODUCED 82171 MT OF IRON ONE DURING THE YEAR. I HAVE PERUSE D THE COPY OF THE FIR THAT WAS PRODUCED BY THE LD AR IN COURSE OF THE APPELLATE PR OCEEDINGS. I FIND THAT THE FIGURES FOR PRODUCTION OF IRON ORE HAVE SIMPLY BEEN MENTION ED IN THE FIR AND THERE NO REFERENCE TO THE MATERIAL THAT CONSTITUTED THE BASI S FOR THE-ALLEGED FIGURES OF PRODUCTION. I FIND THAT THERE IS NO DISCUSSION IN T HE FIR AS 10 HOW THE FIGURES OF PRODUCTION WERE ACTUALLY WORKED OUT. THE LD AR HAS PLACED ON RECORD THE AUDITED ACCOUNTS OF THE ASSESSEE FOR THE FINANCIAL YEAR 200 6-07, 2007-08 AND 2008-09. I FIND THAT THERE IS NO DISCREPANCY IN THE FIGURES OF PROD UCTION FOR THESE YEARS AND THAT SUCH FIGURES MENTIONED IN THE FIR TALLY WITH THOSE CONTA INED IN THE AUDITED ACCOUNTS. IT IS ONLY IN THE RELEVANT FINANCIAL YEAR 2005-06 THAT TH E FIR HAS ALLEGED THE PRODUCTION AS 82171 MT WHEREAS THE ACTUAL PRODUCTION AS PER THE A UDITED ACCOUNTS WAS 68,089.390 MT. IN SUCH FACTUAL BACKGROUND, I FIND SUBSTANCE IN THE SUBMISSIONS OF THE ASSESSEE THAT THE FIR CONTAINED NO DETAIL OR BASIS IN SUPPOR T OF ITS ALLEGATION THAT THE ASSESSEE PRODUCED 82171 MT OF IRON ORE DURING THE RELEVANT Y EAR AND THEREFORE THE AO WAS NOT JUSTIFIED IN BLINDLY FOLLOWING THE FIR. I AGREE WITH THE LD AR THAT THE ALLEGATIONS MADE IN THE FIR WERE MERE COMPLAINTS WHICH HAD NOT BEEN CONFIRMED BY ANY COURT OF LAW. BUT EVEN OTHERWISE, THE AO COULD NOT BLINDLY R EST HIS ASSESSMENT ON THE FIR WITHOUT HIMSELF VERIFYING THE CORRECTNESS OR OTHERW ISE OF THE ALLEGATIONS MADE IN THE FIR. I AM OF THE OPINION THAT THE FIR COULD HAVE BE EN A LEAD FOR THE AO TO INVESTIGATE THE ISSUE OF PRODUCTION. BUT, WITHOUT VERIFYING THE GENUINENESS OF THE ALLEGATIONS MADE IN THE FIR AND WITHOUT CARRYING OUT PROPER INVESTIG ATION, THE AO WAS NOT JUSTIFIED IN IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 12 BLINDLY FOLLOWING THE FIR AND IN PRESUMING THAT THE ALLEGATIONS MADE THEREIN WERE ALL TRUE AND CORRECT. I ALSO FIND SUBSTANCE IN THE CONT ENTION OF THE ASSESSEE THAT THE FIR WAS RELATED BASICALLY TO THE ISSUE OF ILLEGAL MININ G AND THERE WAS NO COMPLAINT THAT THE MINERAL EXTRACTED FROM THE MINES WERE NOT RECOR DED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. IN OTHER WORDS, THERE WAS NO ALLEGATION TH AT THE ASSESSEE WAS INVOLVED IN PRODUCTION THAT WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE AO HAS HIMSELF CONCEDED IN PARA 8.2 OF THE IMPUGNED ORDER THAT THE BASIC OBJECTION OF THE VIGILANCE CELL PERTAINED TO THE LEGALITY OF THE MINING OPERAT ION UNDERTAKEN BY THE ASSESSEE WHICH HAD NO RELEVANCE IN THE PROCEEDINGS UNDER THE INCOME TAX ACT. BUT EVEN OTHERWISE, THE ALLEGATIONS MADE IN THE FIR CANNOT C ONSTITUTE SUFFICIENT MATERIAL FOR THE AO TO CONCLUDE THAT THE ASSESSEE WAS INVOLVED IN R SUPPRESSION OF ITS PRODUCTION. THE AO HAS CERTAINLY ERRED IN LAW AND ALSO ON FACTS IN RESTING HIS ENTIRE ASSESSMENT ON THE FIR WITHOUT EVEN VERIFYING THE CORRECTNESS OR OTHER WISE OF THE ALLEGATIONS MADE THEREIN. THERE BEING NO POSITIVE MATERIAL OR EVIDEN CE ON RECORD TO SUPPORT THE ALLEGATIONS MADE IN THE FIR, THE AO WAS NOT JUSTIFI ED IN RELYING BLINDLY AND SOLELY ON SUCH ALLEGATIONS FOR DRAWING ADVERSE INFERENCE IN T HE CASE OF THE ASSESSEE. IN CASE THE AO BECAME SUSPICIOUS DUE TO THE ALLEGATIONS MADE IN THE FIR, HE SHOULD HAVE INDEPENDENTLY VERIFIED THE CORRECTNESS OR OTHERWISE OF SUCH ALLEGATIONS AND THEN DRAWN HIS CONCLUSIONS BASED ON HIS OWN INVESTIGATIO N. I HOWEVER FIND THAT THE AO HAS MADE NO EFFORTS TO VERIFY THE GENUINENESS OF THE AL LEGATIONS AND HAS CARRIED OUT NO INVESTIGATION TO ASCERTAIN AS TO WHETHER OR NOT THE ASSESSEE WAS ACTUALLY INVOLVED IN SUPPRESSION OF ITS PRODUCTION. UNDER THE CIRCUMSTAN CES, I AM UNABLE TO HOLD THE CONCLUSION OF THE AO THAT THE ASSESSEE WAS INVOLVED IN SUPPRESSION OF ITS PRODUCTION. THE CASE OF THE ASSESSEE IS SUPPORTED BY ITO VS. AR ORA ALLOYS LTD 12 ITR 263 (SUPRA) WHEREIN IT WAS HELD THAT THE PROCEEDINGS UNDER THE CENTRAL EXCISE ACT HAVE RELEVANCE ONLY FOR FORMATION OF OPINION OF ESCAPEME NT OF INCOME AND THEREAFTER THE IT AUTHORITIES HAVE TO INDEPENDENTLY FINALISE T HE RE-ASSESSMENT IRRESPECTIVE OF THE FINAL VIEW IN EXCISE PROCEEDINGS. THE AO HAS RE -ASSESSED THE INCOME AND MADE THE IMPUGNED ADDITIONS SOLELY ON THE BASIS OF THE INFORMATION RECEIVED BY HIM FROM THE CENTRAL EXCISE DEPARTMENT WITHOUT BRIN GING ANY MATERIAL ON RECORD TOO JUSTIFY OR SUPPORT THE ADDITIONS. THE IM PUGNED ADDITIONS ARE LIABLE TO BE CANCELLED ON THIS GROUND ALONE AND ARE ACCORDING LY CANCELLED . THE LD. AR HAS SUBMITTED THAT THE PRODUCTION DATA IS REGULARLY REO PENED IN THE STATUTORY RETURNS FILED BEFORE THE INDIAN BUREAU OF MINES. THE COPY OF SUCH RETURN FOR THE RELEVANT FINANCIAL YEAR 2005-06 WAS PLACED ON RECORD IN COURSE OF THE APPELLATE PROCEEDINGS. IT WAS SUBMITTED THAT THE PRODUCTION DATA CONTAINED IN SUC H STATUTORY RETURNS WAS IN ACCORDANCE WITH THE BOOKS OF THE ASSESSEE WHICH WAS DULY ACCEPTED BY THE INDIAN BUREAU OF MINES. THE ASSESSEE IN ITS RETURN FILED B EFORE THE INDIAN BUREAU OF MINES DECLARED PRODUCTION OF IRON ORE AT 67321 MT WHICH A LMOST TALLIES WITH THE PRODUCTION AS CONTAINED IN THE BOOKS OF ACCOUNT ( PRODUCTION 68089.390 MT MINUS SHORTAGE 761.870 MT ). THE LD AR HAS ARGUED IN COURSE OF THE APPELLATE PROCEEDINGS THAT THE ENTIRE PRODUCTION WAS DULY RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF THE BUSINESS. A LSO, THE BOOKS OF ACCOUNT WERE DULY AUDITED AND THE TAX AUDIT REPORT CONTAINED NO ADVER SE REMARKS. IT WAS FURTHER ARGUED THAT THE BOOKS OF ACCOUNT AND ALL RELEVANT MATERIAL WERE PLACED BEFORE THE AO AT THE ASSESSMENT STAGE. I FIND THAT THE AO HAS DULY ACKNO WLEDGED IN THE IMPUGNED ORDER THAT ' BOOKS OF ACCOUNT, BANK ACCOUNTS, DOCUMENTS AND OTHE R EVIDENCES PRODUCED DURING THE COURSE OF HEARING WERE SEEN. BOOKS OF AC COUNTS AND DOCUMENTS SEIZED DURING THE COURSE OF SEARCH WERE EXAMINED AND ASSES SEE'S EXPLANATION OBTAINED . THE AO HAS HOWEVER FAILED TO POINT OUT ANY SPECIFIC DEFECT OR MISTAKE IN THE BOOKS OF IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 13 ACCOUNT OR OTHER RELEVANT MATERIAL T.HAT WAS AVAILA BLE BEFORE HIM AT THE ASSESSMENT STAGE. I ALSO FIND FROM THE IMPUGNED ORDER THAT THE AO HAS NOT REJECTED THE BOOKS OF THE ASSESSEE. I THEREFORE FIND MERIT IN THE CONTENT ION THAT THE AO UNDER THE CIRCUMSTANCES WAS NOT AUTHORISED TO DISTURB THE BOO K RESULTS AND ASSUME IMAGINARY PRODUCTION THAT TOO WITHOUT THERE BEING ANY POSITIV E MATERIAL ON RECORD TO SUPPORT HIS ALLEGATIONS. THE AO HAS CERTAINLY ERRED IN LAW AS W ELL AS ON FACTS IN ASSUMING PRODUCTION WHEN HE HAD FOUND NO DEFECT IN THE BOOKS OF ACCOUNT AND WHEN THERE WAS NO MATERIAL OR EVIDENCE TO SUPPORT HIS ALLEGATIONS. THE AO HAS INSTEAD IMPORTED AND BLINDLY APPLIED THE ALLEGATIONS MADE IN THE FIR TO ASSUME IMAGINARY PRODUCTION. THE APPROACH ADOPTED BY THE AO IN THE IMPUGNED ORDER IS FLAWED AND DOES NOT HAVE ANY SANCTITY. THE AO HAS TO PROVE BEYOND DOUBT THAT THE EXCESS PRODUCTION OF IRON ORE AS ALLEGED BY HIM IN THE IMPUGNED ORDER WAS ACTUALLY M ADE BUT UNFORTUNATELY NO SUCH POSITIVE EVIDENCE HAS BEEN PLACED ON RECORD. IT IS THE BASIC PHILOSOPHY IN TAXATION MATTERS THAT NO TAX CAN BE LEVIED ON THE BASIS OF A SSUMPTIONS AND PRESUMPTIONS. ARTICLE 265 OF THE CONSTITUTION OF INDIA SAYS THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY THE AUTHORITY OF LAW. UNLESS THE AO HAS P ROVED TO THE HILT THE ALLEGED EXCESS PRODUCTION BY PLACING ON RECORD AUTHENTIC, RELIABLE AND CREDIBLE EVIDENCE, HE CANNOT DEMAND TAX ON THE BASIS OF HYPOTHESIS AND ASSUMPTIO NS. THE ALLEGATIONS MADE IN THE FIR BY ITSELF CANNOT BE THE GROUND TO INFER THAT TH E ASSESSEE WAS ENGAGED IN SUPPRESSING ITS PRODUCTION. I ALSO FIND THAT THERE IS ANOTHER ASPECT EMBEDDED INTO THE ASSUMED IMAGINARY PRODUCTION FOR THE AO HAS ALSO AS SUMED THAT THE EXCESS PRODUCTION WAS CLANDESTINELY REMOVED FROM THE MINES AND SOLD AWAY IN THE MARKET. BUT THEN, THE CLANDESTINE PRODUCTION AND REMOVAL OF IRON ORE HAS TO BE PROVED BY TANGIBLE, DIRECT, AFFIRMATIVE AND INCONTROVERTIBLE EVIDENCES RELATING TO (A) PRODUCTION OF IRON ORE WITH REFERENCE TO LABOUR EMPLOYED AND P AYMENT MADE TO THEM, RECORDS OF SECURITY OFFICERS, DISCREPANCY IN THE STOCK OF IRON ORE; (B) CLANDESTINE REMOVAL OF IRON ORE WITH REFERENCE TO ENTRY OF TRUCKS IN THE MINES PREMISES, LOADING OF IRON ORE THEREIN, SECURITY GATE RECORDS, TRANSPORTERS' DOCUM ENTS SUCH AS LRS, ENTRIES AT DIFFERENT CHECK POSTS, FORMS OF COMMERCIAL TAX AND RECEIPTS BY THE CONSIGNEES; AND, (C) AMOUNTS RECEIVED FROM THE CONSIGNEES, STATEMENT OF THE CONSIGNEES, RECEIPTS OF SALE PROCEEDS BY THE CONSIGNOR AND ITS DISPOSAL. B UT, IN THE INSTANT CASE, NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO. IT I S A SETTLED LEGAL PROPOSITION THAT IN CASE OF ALLEGED CLANDESTINE REMOVAL, THE ONUS IS ON THE AO TO PROVE WHAT IT ALLEGES WITH POSITIVE AND CONCRETE EVIDENCE. IN ABSENCE OF ANY POSITIVE EVIDENCE BROUGHT BY THE AO TO DISCHARGE HIS ONUS, THE IMPUGNED ORDER CA NNOT BE SUSTAINED. THE AO HAS THUS NOT ONLY ASSUMED IMAGINARY EXCESS PRODUCTION O F IRON ORE BUT ALSO ASSUMED ITS CLANDESTINE REMOVAL FROM THE MINES AND SUBSEQUENT S ALE IN THE MARKET WITHOUT THERE BEING ANY INCRIMINATING MATERIAL ON RECORD TO SUPPO RT SUCH ALLEGATIONS. THE LAW DOES NOT ENTITLE THE AO TO DISREGARD ALL STATUTORY RECOR DS AS WELL AS AUDITED FINANCIAL ACCOUNTS AND RECORDS OF THE ASSESSEE WHICH HAVE BEE N DULY VERIFIED AND ACCEPTED BY THE COMPETENT AUTHORITIES FROM TIME TO TIME. THE AO CANNOT IGNORE THE FACTS, RECORDS, DOCUMENTS AND TRANSACTIONS ACTUALLY CARRIED OUT AND REFLECTED IN THE BOOKS OF ACCOUNT AND RECORDS DULY ASSESSED, AUDITED AND ACCEPTED BY OTHER REVENUE AUTHORITIES. I FIND THAT THE RATIO LAID DOWN BY THE HON'BLE ITAT, HYDER ABAD IN THE CASE OF M/S JEEVAKA INDUSTRIES VS ACIT ITA NO. 684 & 983/HYD/2011 THAT UNLESS AND UNTIL THE BOOKS OF ACCOUNT WERE IMPEACHED BY ANY AUTHORITY, IT WAS INC UMBENT ON SUCH AUTHORITY TO ACCEPT THE BOOKS OF ACCOUNT AS IT REFLECTS THE TRUE AND CORRECT PROFIT OF THE ASSESSEE IS SQUARELY APPLICABLE IN THE PRESENT CASE. THE LD AR HAS ARGUED THAT THE QUANTITATIVE DETAILS RELATING TO PRODUCTION OF IRON ORE TALLIED WITH THE RECORDS AND REGISTERS MAINTAINED BY THE ASSESSEE AND SO THERE WAS NO BASI S FOR THE AO TO CONCLUDE THAT IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 14 THERE WAS EXCESSIVE PRODUCTION OF IRON ORE. THERE I S NO ALLEGATION BY THE AO THAT THE ASSESSEE HAS NOT MAINTAINED THE PRESCRIBED RECORDS. I AM THEREFORE OF THE CONSIDERED VIEW THAT ONCE THE AO ACCEPTED THE QUANTITATIVE DET AILS FURNISHED BY THE ASSESSEE THAT TALLIED WITH THE BOOKS OF ACCOUNT; THE SAME CANNOT BE REJECTED UNLESS THERE IS CONCLUSIVE EVIDENCE TO SUGGEST THAT THE ASSESSEE MA DE ANY UNACCOUNTED SALES. BUT, IN THE PRESENT CASE THERE IS NOT AN IOTA OF EVIDENCE W HICH COULD EVEN REMOTELY SUGGEST THAT THE ASSESSEE WAS INVOLVED IN MAKING UNACCOUNTE D SALES. I AM OF THE CONSIDERED OPINION THAT THE AO HAS ERRED IN LAW IN ASSUMING IM AGINARY PRODUCTION OF IRON ORE BY MECHANICALLY RELYING ON THE ALLEGATIONS MADE IN THE FIR THE ASSESSEE WAS INVOLVED IN MAKING UNACCOUNTED SALES. I AM OF THE CONSIDERED OP INION THAT THE AO HAS ERRED IN LAW IN ASSUMING IMAGINARY PRODUCTION OF IRON ORE BY MECHANICALLY RELYING ON THE ALLEGATIONS MADE IN THE FIR AND ALSO IN ASSUMING TH AT SUCH PRODUCTION WAS CLANDESTINELY REMOVE FROM THE MINES AND SUBSEQUENTL Y SOLD AWAY IN THE MARKET. I ALSO FIND MERIT THE CONTENTION THAT NO ADVERSE MATERIAL WAS RECOVERED BY THE DEPARTMENT EVEN IN COURSE OF THE SEARCH FOR THE AO HAS NOT DIS CUSSED IN THE IMPUGNED ORDER ANY SEIZED MATERIAL WHICH EVEN REMOTELY SUGGESTED OR IN DICATED THAT THE ASSESSEE HAD SUPPRESSED ITS PRODUCTION. THE AO HAS BROUGHT NO MA TERIAL ON RECORD TO BACK HIS FINDING THAT THE ASSESSEE WAS ENGAGED SUPPRESSING I TS PRODUCTION. THE DEPARTMENT HAS NOT RECOVERED EVEN COURSE OF THE SEARCH ANY EVIDENC E WHICH COULD SUBSTANTIATE THE ALLEGATION OF THE AO. UNDER THE CIRCUMSTANCES, I FI ND THAT THERE IS NOT EVEN AN IOTA EVIDENCE TO BACK THE CONCLUSION OF THE AO THAT THE ASSESSEE WAS INVOLVED SUPPRESSING ITS PRODUCTION AND IN CLANDESTINELY REMOVING THE EX CESS PRODUCTION FOR SUBSEQUENT SALE IN THE MARKET. ALSO, NO MATERIAL DOCUMENT WAS RECOVERED IN THE SEARCH OR BROUGHT ON RECORD BY THE AO IN ASSESSMENT ORDER TO SHOW THAT THE CORRESPONDING SALE PROCEEDS WERE RECEIVED BY THE ASSESSEE. THE DECISIO N OF THE AO IS NOT BASED ON PROPER FINDINGS. THE CONCLUSIONS DRAWN BY THE AO AR E BASED MORE ON ASSUMPTION AND PREJUDICES THAN ON FACTUAL GROUND. IN VIEW OF THE A BOVE, I AM OF OPINION THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED S ALES IS NEITHER SUSTAINABLE IN LAW NOR ON THE FACTS OF THE CASE. THE ADDITION RS.49,66 ,584/- IS DELETED . GROUND NO 4 IS ALLOWED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 10. LD. DR BEFORE US SUBMITTED THAT A REPORT WAS SU BMITTED BY THE DEPUTY S.P. VIGILANCE CELL UNIT BARBIL TO THE SUPERINTENDENT OF POLICE VIGILANCE BALARORE DIVISION, BALASORE WHEREIN IT WAS ALLEGED THAT ASSE SSEE HAS BEEN SHOWING LESS QUANTITY OF PRODUCTION CONTINUOUSLY. LD. DR DREW OUR ATTENTI ON ON THE RELEVANT EXTRACT OF THE REPORT WHICH IS PLACED ON PAGE 54 TO 57 OF THE PAPE R BOOK AND THE RELEVANT PORTION IS REPRODUCED BELOW:- YEAR PRODUCTION IN MT DESPATCH IN MT +65% FE. +65% FE. 2003 8000.00 25.600 2004 54175.000 45188.440 IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 15 2005-06 82171.000 84290.460 2006-07 79014.000 87355.120 2007-08 26458.000 26084.560 2008-09 14494.000 18928.560 TOTAL 2,64,312.00 2,61,872.790 HE FURTHER SUBMITTED THAT IN THE SAID REPORT IT WAS HIGHLIGHTED THAT ASSESSEE IS ENGAGED IN ILLEGAL MINING ACTIVITIES AND IT HAS EXTRACTED A PPROXIMATE COST OF IRON ORE FOR 57,6122,500/-. HE VEHEMENTLY RELIED ON THE ORDER OF AO. ON THE OTHER HAND, LD. AR BEFORE US SUBMITTED THAT IN THE AFORESAID REPORT OF VIGILANCE DEPARTMENT, IT HAS BEEN MENTIONED THAT AS SESSEE HAS BEEN ENGAGED IN ILLEGAL MINING OF IRON ORE AND NOT THAT THE SAME WAS NOT RE CORDED IN ITS BOOKS OF ACCOUNT. THE ENTIRE COST OF EXTRACTION OF IRON ORE WAS DETERMINE D APPROXIMATELY FOR 57,61,22,500/- WHICH WAS REPORTED BY VIGILANCE DEPARTMENT PERTAINI NG TO THE YEARS 2003 TO 2009. BUT THE FACT THAT DEPARTMENT HAS NOT MADE ANY ADDIT ION IN ANY YEAR OTHER THAN THE AY 2006-07. IT IS BECAUSE IN NONE OF THE YEAR NO EXTRA CTION OF IRON ORE HAS TAKEN PLACE WITHOUT RECORDING THE SAME IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS BEEN FILING ITS ANNUAL RETURN WITH INDIAN BUREAU OF MINE ON REGULAR BASIS WHICH ARE PLACED ON PAGES 60-62 OF THE PAPER BOOK AND WHICH WERE DULY ACCEPTE D. HAD THERE BEEN ANY UNDER- REPORTING OF EXTRACTION OF IRON ORE, THE DEPARTMENT SHOULD HAVE TAKEN THE ACTION AGAINST THE ASSESSEE. HOWEVER, NO SUCH ACTION HAS T AKEN BY THE DEPARTMENT TILL DATE. THE FIR ALLEGES THAT ASSESSEE HAS EXTRACTED IRON OR E IN PLACE OF MANGANESE AND THERE IS NO MENTION FOR THE EXTRACTION OF IRON ORE WHICH HAV E NOT BEEN REPORTED BY THE ASSESSEE TO IT DEPARTMENT AT THE TIME OF ASSESSMENT PROCEEDI NGS. THERE IS NO BASIS IN THE FIR FOR SHOWING THE PRODUCTION AT 82171 MTT. THE AO HAS BLINDLY RELIED ON THE FIR WITHOUT POINTING OUT ANY DEFECTS IN THE SYSTEM OF A CCOUNTING OF THE ASSESSEE. LD.AR IN THIS CONNECTION HAS RELIED ON THE ORDER OF CUSTOMS, EXCISE AND GOLD TRIBUNAL DELHI IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. HARC HARAN AND BROTHERS REPORTED IN (2004) 168 ELT 454 TRI DELHI. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW:- 4. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RECORD. THE PERUSAL OF THE RECORD SHOWS THAT THE CASE HAS BEEN BUILT AGAINST T HE RESPONDENTS FOR EVASION OF DUTY BY CLANDESTINE REMOVAL OF THE GOODS DURING THE PERI OD IN DISPUTE MAINLY ON THE BASIS IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 16 OF THE DOCUMENTS SEIZED BY THE INCOME TAX AUTHORITI ES FROM THEIR DIFFERENT PREMISES. NO INDEPENDENT ENQUIRY WAS CARRIED OUT BY THE DEPAR TMENT TO ASCERTAIN IF THROUGH THE SEIZED DOCUMENTS WHICH INCLUDED CERTAIN INVOICES AN D OTHER RECORDS, ANY ACTUAL CLEARANCE OF THE EXCISABLE GOODS WERE EFFECTED BY T HE RESPONDENTS OR NOT. NO EVIDENCE EVEN REGARDING THE EXCESS PURCHASE OF THE RAW MATER IAL, CONSUMPTION OF ELECTRICITY, ETC., HAD ALSO BEEN COLLECTED BY THE DEPARTMENT TO SUBSTANTIATE THE CHARGE OF CLANDESTINE REMOVAL OF THE GOODS. THE PARTICULARS O F THE ALLEGED BUYERS/CONSIGNEES OF THE GOODS GIVEN IN THE SEIZED INVOICES WERE NOT EVE N VERIFIED NOR THEIR STATEMENTS WERE RECORDED DURING THE INVESTIGATION. THE PLEA OF THE RESPONDENTS THAT BESIDES THE MANUFACTURING ACTIVITIES, THEY HAD INCOME FROM THEI R TRADING AND MARRIAGE PLACES, BUSINESS WAS NOT CONSIDERED BY THE ADJUDICATING AUT HORITY. THEREFORE, UNDER THESE CIRCUMSTANCES, IN MY VIEW, THE COMMISSIONER (APPEAL S) HAS RIGHTLY OBSERVED THAT THE CHARGE OF CLANDESTINE REMOVAL OF THE GOODS HAVING B EEN BASED ON ASSUMPTIONS AND PRESUMPTIONS AND ON THE RECORD, THE CORRECTNESS OF WHICH WAS NEVER ACCEPTED BY THE RESPONDENTS AND NOT PROVED BY THE DEPARTMENT, CANNO T BE SUSTAINED. HE HAD RIGHTLY SET ASIDE THE ORDER-IN-ORIGINAL VIDE WHICH THE ADJU DICATING AUTHORITY CONFIRMED THE DUTY DEMAND AND IMPOSED PENALTY ON THE RESPONDENTS. I DO NOT FIND ANY ILLEGALITY IN THE IMPUGNED ORDER AND THE SAME IS UPHELD. THE APPE AL OF THE REVENUE DISMISSED. SIMILARLY, LD AR ALSO RELIED ON THE ORDER OF ITAT C HANDIGARH BENCH IN THE CASE OF INCOME TAX OFFICER VS. ARORA ALLOYS LTD. (SUPRA).THE RELEVANT OPERATIVE PORTION IS REPRODUCED BELOW:- 18. APPLYING THE AFORESAID PRINCIPLES, WE SHALL NOW EXAMINE AS TO WHETHER THE STATEMENT MADE BY SHRI HARMESH ARORA BEFORE THE CEN TRAL EXCISE AUTHORITIES IN THE CONTEXT OF LEVY OF EXCISE DUTY ON UNACCOUNTED PRODU CTION CAN FORM THE SOLE BASIS FOR MAKING THE IMPUGNED ADDITIONS BY THE ASSESSING OFFI CER. THE FIRST AND MOST IMPORTANT ASPECT IS THAT THE SAID STATEMENT WAS NOT RECORDED BY THE INCOME-TAX AUTHORITIES BUT BY THE CENTRAL EXCISE AUTHORITIES. AS HELD BY THE HIGH COURT (REPRODUCED SUPRA), PROCEEDINGS UNDER THE CENTRAL EXCISE ACT HAVE RELEV ANCE ONLY FOR FORMATION OF OPINION OF ESCAPEMENT OF INCOME AND THEREAFTER THE INCOME-TAX AUTHORITIES HAVE TO INDEPENDENTLY FINALISE THE REASSESSMENT IRRESPECTIV E OF THE FINAL VIEW IN EXCISE PROCEEDINGS. WE FIND THAT THE ASSESSING OFFICER HAS REASSESSED THE INCOME AND MADE THE IMPUGNED ADDITIONS SOLELY ON THE BASIS OF THE I NFORMATION RECEIVED BY THEM FROM THE CENTRAL EXCISE DEPARTMENT WITHOUT BRINGING ANY MATERIAL ON RECORD TO JUSTIFY OR SUPPORT THE ADDITIONS. THE IMPUGNED ADDITIONS ARE L IABLE TO BE CANCELLED ON THIS GROUND ALONE AND ARE ACCORDINGLY CANCELLED. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. THE ISSUE IN THE IN STANT CASE REVOLVES UPON THE ADDITION MADE BY THE AO ON ACCOUNT OF LESS PRODUCTI ON SHOWN BY THE ASSESSEE. THE AO HELD THE LESS PRODUCTION SHOWN BY THE ASSESSEE O N THE BASIS OF DOCUMENT SEIZED DURING THE COURSE OF SEARCH, I.E. FIR NO.52. THE AO OTHER THAN FIR HAS NOT BROUGHT ANY EVIDENCE SUGGESTING THAT THE ASSESSEE HAS SHOWN LESS QUANTITY OF PRODUCTION OF IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 17 IRON ORE IN ITS BOOKS OF ACCOUNTS. THEREFORE, LD. C IT(A) HAS DELETED THE ADDITION MADE BY THE AO. NOW THE ISSUE BEFORE US ARISES FOR OUR A DJUDICATION SO AS TO WHETHER THE ADDITION ON ACCOUNT OF LESS PRODUCTION IN THE GIVEN FACTS AND CIRCUMSTANCES IS LIABLE TO BE ADDED AS UNDISCLOSED INCOME OF ASSESSEE. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE ADD ITION HAS BEEN MADE SOLELY ON THE BASIS OF FIR AND WITHOUT ANY OTHER EVIDENCE SUGGEST ING THAT ASSESSEE HAS SHOWN LESS QUANTITY OF PRODUCTION. HOWEVER, ON PERUSAL OF THE FIR WE ALSO FIND IT HAS NOWHERE BEEN ALLEGED THAT THE ASSESSEE HAS SHOWN LESS QUANT ITY OF PRODUCTION RATHER IT HAS BEEN ALLEGED THAT ASSESSEE IS ENGAGED IN EXTRACTION OF I RON ORE IN PLACE OF MANGANESE. THE RELEVANT EXTRACT OF THE FIR IS REPRODUCED BELOW:- WHILE MINING LEASE WAS GRANTED AND PERMISSION UNDER DRP WAS GIVEN FOR EXTRACTION OF MANGANESE ORE ONLY, PARTNER OF M/S MA NGILAL RUNGTA IN HIS LETTER DTD. 09.04.2001 SUBMITTED AN APPLICATION TO THE SECTETAR Y TO GOVT. OF ORISSA, STEEL AND MINES DEPTT. TO INCLUDE IRON ORE IN THE LEASE DEED. SRI P.C. PATRA, THE THEN DY. DIRECTOR, MINES IN HIS LTR. NO.8080/MINES DTD. 30.0 4.2001 RECOMMENDED BY WRITING THAT AS BECAUSE THE AREA IS BROKEN PRIOR TO 1980 NO DRP APPROVAL WAS REQUIRED. WHILE EXAMINING THE MATTER IN THE OFFICE OF DIRECTO R OF MINES, THE JT. DIRECTOR O MINES GAVE NOTING POINTING OUT THAT THE AREA MIGHT NOT BE BROKEN PRIOR TO 1980 AND SOUGHT FOR CERTAIN CLARIFICATION FOR COMPLIANCE BEFORE CON SIDERATION OF THE APPLICATION. BUT OVERLOOKING THE REMARKS OF THE JT. DIRECTOR, MINES, THE THEN DIRECTOR, MINES SRI SASADHAR SAHOO HAS RECOMMENDED FOR INCLUSION OF THE IRON ORE AND ACCORDINGLY THE GOVERNMENT INCLUDED IRON ORE VIDE ORDER NO. III(A)/ SM/10/2001-9094 DTD. 27.09.2002. THE SUPPLEMENTARY DEED FOR INCLUSION OF IRON ORE AS 2 ND MINERAL IN SILIJODA-KALIMATI MINES OVER AN AREA OF 715.639 HEC T. IN KEEONJHAR DISTRICT WAS EXECUTED BETWEEN COLLECTOR, KONJHAR AND SRI NANDALA L RUNGTA, PARTNER OF M/S MANGILAL RUNGT ON 27.09.2003. IT IS ALSO IMPORTANT TO NOTE THAT THE ASSESSEE HAS BEEN FILING ITS ANNUAL RETURN WITH INDIAN BUREAU OF MINE ON REGULAR AND NO DISCREPANCY FOR LESS REPORTING OF PRODUCTION HAS BEEN DETECTED. THE COPIES OF THE RETURNS ARE PL ACED ON PAGES 60-62 OF THE PAPER BOOK AND WHICH WERE DULY ACCEPTED. IN CASE THERE HA D BEEN ANY UNDER-REPORTING OF EXTRACTION OF IRON ORE, THE DEPARTMENT I.E. INDIAN BUREAU OF MINE, SHOULD HAVE TAKEN THE ACTION AGAINST THE ASSESSEE. HOWEVER, NO SUCH A CTION HAS TAKEN BY THE DEPARTMENT TILL DATE. IT WAS ALSO OBSERVED THAT THE FIR CONTAINS THE MISM ATCH IN THE PRODUCTION OF QUANTITY DECLARED BY THE ASSESSEE OVER THE PERIOD BEGINNING FROM 2003 TO 2008-09. THE NECESSARY DETAILS OF THE MISMATCH IS PLACED ON PARA 10 OF THIS ORDER. HOWEVER, THE IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 18 REVENUE HAS NOT MADE ANY ADDITION FOR THE DISCREPAN CIES IN THE QUANTITY OF PRODUCTION OTHER THAN THE YEAR UNDER CONSIDERATION. THE LD. DR HAS ALSO NOT BROUGHT ANYTHING CONTRARY SUGGESTING THE ADDITION ON ACCOUNT LESS PR ODUCTION WAS MADE FOR ANY OTHER YEAR. IT WAS ALSO FOUND THAT THE LD. DR HAS ALSO FAILED T O JUSTIFY THE SOURCE OF INFORMATION AS MENTIONED IN THE FIR FOR THE PRODUCTION OF THE QUAN TITY ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE AO. IN THE LIGHT OF ABOVE REASONING AND AFTER HAVING RE LIANCE ON THE ORDER OF HONBLE ITAT CHANDIGARH IN THE CASE OF INCOME TAX OFFICER VS. ARORA ALLOYS LTD. REPORTED (2012) 25 TAXMANN.COM 134, WE HOLD THAT THE ORDER OF THE L D. CIT(A) IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED F OR. WE HOLD ACCORDINGLY. THE GROUND OF APPEAL OF REVENUE IS DISMISSED. 12. NEXT ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 3,80,372/- AND 651/- RESPECTIVELY UNDER SECTION 36(1)(VA) AND 14A OF THE OF THE ACT RESPECTIVELY. 13. AO DURING ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS PAID EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AFTER THE DUE DATE. ACCORDINGLY THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS CONTRAVENED THE P ROVISIONS OF SECTION 36(1)(VA) OF THE ACT. THUS THE AO MADE THE DISALLOWANCES AND ADDED T HE SUM OF RS. 3,80,372.00 ONLY TO THE TOTAL INCOME OF THE ASSESSEE. 13.1 SIMILARLY THE AO OBSERVED THAT THE ASSESSEE HA S EARNED DIVIDEND INCOME WHICH IS EXEMPTED UNDER SECTION 10(34) OF THE ACT BUT NO DISALLOWANCE HAS BEEN MADE BY THE ASSESSEE UNDER SECTION 14A OF THE ACT. THUS THE AO INVOKED THE PROVISIONS OF SECTION 14A READ WITH RULE 8D AND MADE THE DISALLOWANCE OF RS.651/- ONLY WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE 14. AGGRIEVED ASSESSEE BEFORE AN APPEAL TO LEARNED CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER : .... THE ASSESSMENT WHICH HAD ATTAINED FINALITY BEFORE T HE INITIATION OF THE SEARCH CANNOT BE DISTURBED OR ALTERED IN THE SEARCH ASSESS MENT MADE U/S. 153A EXCEPT ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND IN THE SE ARCH. IN OTHER WORDS, THE AO HAD O JURISDICTION TO MAKE ADDITIONS ON ISSUES OF REGULAR ASSESSMENT WHICH HAD ALREADY ATTAINED FINALITY AS ON THE DATE OF THE SEARCH. IN VIEW OF THE ABOVE LEGAL POSITION, I AM OF THE OPINION THAT THE DISALLOWANCES MADE BY THE A O BY INVOKING SECTION 2(24)(X) IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 19 READ WITH 36(1)(V) OR SECTION 14A BEING RELATED TO THE ITEMS OF REGULAR ASSESSMENT COULD NOT BE LAWFULLY MADE BY THE AO WHILE MAKING T HE SEARCH ASSESSMENT U/S. 153A. THE ADDITION OF RS.3,80,372/- MADE UNDER SECTION 2( 24)(X) READ WITH 36(1)(V) AND RS.651/- MADE UNDER SECTION 14A ARE DELETED. GROUND NO 5 AND 6 ARE ALLOWED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 15. BEFORE US BOTH LD. DR AND LD. AR RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET IT WAS OBSERVED THAT THE AO H AS MADE THE IMPUGNED ADDITIONS WITHOUT FINDING ANY INCRIMINATING MATERIALS IN SUPP ORT OF EMPLOYEE CONTRIBUTION TOWARDS PF AND EXPENSES INCURRED IN RELATION TO EXE MPTED INCOME. IT IS UNDISPUTED FACT THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATIO N UNDER SECTION 143(3) WAS COMPLETED ON 02-07-2007. AS PER THE JUDICIAL PRECED ENTS THE COMPLETED PROCEEDINGS CAN BE DISTURBED UNDER THE SEARCH PROCEEDINGS ONLY IN CASES WHERE INCRIMINATING MATERIALS ARE UNEARTHED. IN THIS CONNECTION WE FIND SUPPORT AND GUIDANCE FROM THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT CENTRAL-III VS. KABUL CHAWLA REPORTED IN 2016 380 ITR 573 (DEL) WHEREIN IT WAS HELD AS UNDER : (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITI ON OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. WE ALSO FIND THAT THE HONBLE JURISDICTIONAL HIGH C OURT RECENTLY IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS M/S. SALASA R STOCK BROKING LTD. IN G.A. NO. 1929 OF 2016 I.T.A.T. NO. 264 OF 2016 DT. 24.08 .2016 HAS ENDORSED THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT CENTRAL-III VS. KABUL CHAWLA (SUPRA) AND ALSO PLACED RELIANCE ON ITS OWN DECISION IN THE CASE OF COMMISSIONER OF INCOME- TAX KOLKATA III VS. VEERPRABHU MARKETING LTD. REPO RTED IN 388 ITR 574 . ONCE THE PROCEEDINGS U/S 153A OF THE ACT ARE INITI ATED WHICH ARE SPECIAL PROCEEDINGS, THE LEGISLATURE PROVIDES DIFFERENT TREATMENTS FOR A BATED AND UNABATED ASSESSMENTS. IT(SS)A NO.34/KOL/2015 A.Y. 2 006-07 DCIT,CC-1(3) KOL. VS. M/S MANGILALL RUNG TA PAGE 20 IN RESPECT OF ABATED ASSESSMENTS, FRESH ASSESSMENTS ARE TO BE FRAMED BY THE AO U/S 153A OF THE ACT WHICH WOULD HAVE A BEARING ON THE D ETERMINATION OF THE TOTAL INCOME BY CONSIDERING ALL THE ASPECTS, WHEREIN EXISTENCE O F INCRIMINATING MATERIALS DO NOT HAVE ANY RELEVANCE. HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS THE LEGISLATURE HAS CONFERRED POWERS ON THE LD. AO TO JUST FOLLOW THE A SSESSMENTS ALREADY CONCLUDED UNLESS INCRIMINATING MATERIALS ARE FOUND IN THE COU RSE OF SEARCH. THAT FOR THE REASONS STATED ABOVE AND ON BASIS OF V ARIOUS JUDICIAL PRONOUNCEMENTS, WE HOLD THAT THE VARIOUS DISALLOWANCES MADE FOR THE AS SESSMENT YEAR UNDER CONSIDERATION WHICH WERE UNABATED/CONCLUDED ASSESSMENTS AS ON DAT E OF SEARCH CANNOT BE MADE IN THE SEARCH ASSESSMENTS IN THE ABSENCE OF ANY INCRIM INATING MATERIAL FOUND IN THE COURSE OF SEARCH. ACCORDINGLY ALL THE ADDITIONS U/S 36(1)(VA) AND 14A OF THE ACT ARE DIRECTED TO BE DELETED. SINCE THE LEGAL ISSUES ARE ADDRESSED, WE REFRAIN TO GIVE OUR FINDINGS ON MERITS OF DISALLOWANCES UNDER THE PROVI SIONS OF THE ACT. ACCORDINGLY GROUND RAISED BY THE REVENUE IS DISMISSED. 17. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11/08/2017 SD/- SD/- (%&') (!&') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS )&*+ - 11/08/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CC-1(3)/ AAYAKAR BHAWAN, POORVA, 3 RD FLOOR, 110, SHANTI PALLY, KOLKATA-107 2. /RESPONDENT-M/S MANGILALL RUNGTA, 8A, EXPRESS TOWER, 4A, SHAKESPEARE SA RANI, KOLKATA-17 3. **, - / CONCERNED CIT 4. - - / CIT (A) 5. ./0 %%, , , / DR, ITAT, KOLKATA 6. 012 / GUARD FILE. BY ORDE R/ & , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO , ,