The DCIT (CENTRAL)-1, Bhopal V. M/s. S.D. Bansal Iron & Steel Pvt. Ltd., Bhopal

ITSSA 68/Ind/2020

AI Insights

The case involves cross-appeals by the revenue and the assessee, M/s. S.D. Bansal Iron & Steel Pvt. Ltd., against the order of the Commissioner of Income-Tax (Appeals), Bhopal. The appeals arise from an assessment order passed under section 143(3) of the Income Tax Act, 1961, following a search operation under section 132. The primary disputes include additions made by the AO on account of undisclosed cash, unexplained expenditures, and undisclosed investments in various assets, which were partly contested and partly upheld by the CIT(A). The Tribunal's decision involved a detailed examination of the submissions, evidences, and the legal provisions applicable.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134582 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-05-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2020
• Other Referred Cases: CIT Vs. M/s Abeeson Hotels Pvt. Ltd. Indore (2004) 2 ITJ 71 (MP)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Depreciation; Search and seizure; Loose papers; Principle of natural justice; Valuation report
• Section: 132; 69C; 143(3); 69B; 13

Judgement Text

आयकर अपीलीय अिधकरण, इंदौर ायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER IT(SS)A No.68/Ind/2020 (Assessment Year: 2012-13) DCIT(Central)-1 Bhopal बनाम/ Vs. M/s. S.D. Bansal Iron & Steel Pvt. Ltd., 3 rd Floor Tawa Complex, Bittan Market. E-5, Arera Colony, Bhopal (Appellant / Revenue) (Respondent / Assessee) ITA No.170/Ind/2020 (Assessment Year: 2012-13) M/s. S.D. Bansal Iron & Steel Pvt. Ltd., 3 rd Floor Tawa Complex, Bittan Market, E-5, Arera Colony, Bhopal बनाम/ Vs. DCIT(Central)-1 Bhopal (Appellant / Assessee) (Respondent / Revenue) PAN: AAKCS 6409 C Assessee by Shri Anil Khabya, AR Revenue by Shri P.K. Mishra, CIT-DR Date of Hearing 17.11.2022 / 22.02.2023 Date of Pronouncement 15.05.2023 आदेश/O R D E R Per B.M. Biyani, A.M: Feeling aggrieved by appeal-order dated 27.02.2020 passed by learned Commissioner of Income-Tax (Appeals), Bhopal [“Ld. CIT(A)”], which in turn arise out of assessment-order dated 27.03.2014 passed by learned DCIT, Central, Bhopal [“Ld. AO”] u/s 143(3) concerning the assessment-year S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 2 of 19 [“AY”] 2012-13, the revenue and assessee both have filed these cross- appeals. 2. The parties have raised following grounds: Revenue’s ITA No. 68/Ind/2020: 1. "On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 3,81,250/- made by the AO on account of undisclosed cash found during search." 2 "On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 18,94,805/- made by the AO on account of unexplained expenditure u/s 69C of the Income Tax Act, 1961." 3. "On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 48,00,000/- made by the AO on account of undisclosed investment in plant & machinery u/s 69B of the Income Tax Act,1961." 4. "On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 2,17,98,742/- made by the AO on account of undisclosed investment in building & shed u/s 69B of the Income Tax Act, 1961." 5. "On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 40,71,096/- made by the AO on account of undisclosed investment in setup of Bansal News u/s 69B of the Income Tax Act, 1961." Assessee’s ITA No. 170/Ind/2020: 1. That the ld. CIT(A) erred in maintaining addition of Rs. 13,10,200/- made by the A.O. u/s 69B of Act on account of alleged excess of cost of construction of Plant & Machinery relying on report of VO (P&M). 2. That the ld. CIT(A) erred in sustaining addition of Rs. 2,82,27,301/- on account of alleged unaccounted cost of construction as per loose papers. 3(i) That the ld. CIT(A) erred in maintaining addition of Rs. 1,03,09,382/- made by the A.O. u/s 69B of Act on account of alleged excess of cost of construction of Plant & Machinery of Bansal News relying on report of V.O.(P&M) without addressing objections of the assessee. 3(ii) In any case out of addition of Rs. 1,03,09,382/-, addition of Rs. 54,31,182/- pertain to Ass. Yr. 2011-12 which deserves to be deleted in A.Y. 2012-13. S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 3 of 19 4(i) That the ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs. 4 Crores on sustained addition of Rs. 64,28,559/- on account of LPS-9/18. 4(ii) That the ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs. 4 Crores on sustained addition of Rs. 1,03,09,382/- on account of alleged excess of cost construction in establishing Bansal News. 4(iii) That the ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs.4 Crores on sustained addition of Rs. 47,52,500/-, Rs.17,00,000/- and Rs. 2,69,093/- on account of various loose papers. 5. That the Ld. CIT(A) erred in not giving directions to AO to compute depreciation on extra cost of construction added by him as per report of DVO.” Additional ground by assessee: “That the Ld. CIT(A) erred in confirming addition of Rs. 47,52,500/- made by AO invoking provisions of section 69C on account of alleged unexplained expenditure vide para 11.6 of order of assessment.” 3. Heard the learned representatives of both sides and case records perused. 4. The registry has informed that the Revenue’s appeal is filed after a delay of 25 days and therefore time-barred. Ld. AD prayed that the delay has occurred due to Covid-19 Pandemic. Ld. AR further placed reliance on the order of Hon’ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 read with Misc. Applications, by which suo motu extension of the limitation-period for filing of appeals w.e.f. 15.03.2020 under all laws has been granted and hence there is no delay in fact. We confronted Ld. AR who agreed to the submission of Ld. AR. In view of this, the appeal is proceeded with for hearing, there being no delay. 5. Briefly stated the facts are such that a search u/s 132 was conducted upon assessee in June, 2011 and the cases of assessee from AY 2007-08 to 2012-13 were assessed. Present appeal relates to AY 2012-13, which is a search-year and therefore assessment was framed u/s 143(3). For this year, the assessee declared a total income of Rs. 1,94,60,075/- in return of income but the AO assessed at Rs. 7,71,75,192/- after making additions on several counts. Being aggrieved, the assessee went in first-appeal and S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 4 of 19 succeeded partly. Now, the revenue as well as assessee both are aggrieved by the order of first-appeal; thus come in these cross-appeals before us. We shall start with Revenue’s Appeal and thereafter take up Assessee’s Appeal; but the common grounds of both appeals, wherever convenient, shall be dealt analogously. Revenue’s Ground No. 1: 6. In this ground, revenue claims that the CIT(A) has erred in deleting the addition of Rs. 3,81,250/- made by AO on account of physical cash found during search. 7. During search-proceeding, cash balance of Rs. 3,81,250/- was found from premise of assessee and the authorities seized Rs. 3,00,000/-. During assessment-proceeding, when the AO confronted the assessee to explain source of such physical cash, the assessee submitted that it was imprest cash maintained in factory to meet day to day expenses and the same is out of cash balance reflected in regular cash-book of assessee. However, the AO did not accept assessee’s submission for the reason that no such explanation was given at the time of search. During first appellate proceeding, CIT(A) however found that the cash-book of assessee was having cash balance of Rs. 44,46,397/- as on the date of search and the impugned physical cash was also a part of the same; thus the impugned physical cash stood appropriately explained. Accordingly, Ld. CIT(A) deleted the addition. Before us, Ld. DR supported the assessment-order of AO as against which Ld. AR supported the appellate-order of CIT(A). 8. After a careful consideration, we find that the Ld. CIT(A) has given a clear finding that the cash-book of assessee was showing sufficient cash balance to cover up the impugned physical cash of Rs. 3,81,250/-. We also find that even before AO, the assessee claimed that impugned physical cash was very much part of recorded balance in cash-book but the AO simply disbelieved the submission of assessee and made addition. In the S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 5 of 19 circumstance, we agree with the reasoned conclusion taken by CIT(A) and dismiss this ground of revenue. Revenue’s Ground No. 2: 9. In this ground, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 18,94,895/- out of total addition of Rs. 35,94,295/- made by AO on account of unexplained expenditure u/s 69C. 10. During search proceeding a document marked as “BS-1/6-Page No. 3” was seized. The document is a statement dated 30.05.2011 issued by one M/s Kanchan Ispat (India) Private Ltd., Durg [“Kanchan”] to assessee. It contains details of various transactions done by Kanchan with assessee; the documents also contains the break-up of modes of payments of all transactions under three headings, namely, (i) by cheques, (ii) received in cash, and (iii) receivable in cash. The amounts of (ii) and (iii) are Rs. 17,00,000/- and 18,94,805/- respectively. As the mode of (ii) and (iii) are cash, the AO asked the assessee to reconcile the same with books of account. In reply, the assessee submitted that these are covered by overall surrender of Rs. 4 crore [inventory of Rs. 2 crore and investment in assets of Rs. 2 crore], hence no separate addition is called for. However, the AO was not satisfied. Finally, the AO made an addition of Rs. 17,00,000 (+) Rs. 18,94,805 = 35,94,805/- (slight mistake by AO, he actually added Rs. 35,94,295/-) u/s 69C. During first-appeal, Ld. CIT(A) observed that the assessee has accepted the seized-document but it showed “received in cash” of Rs. 17,00,000/- only and remaining Rs. 18,94,805/- was “receivable in cash”. Ld. CIT(A) further observed “Neither the appellant nor the impugned party i.e. Kanchan Ispat (India) Pvt. Ltd. has ever stated that the cash which is to be received was actually received from appellant. The AO also did not make any independent enquiry to unearthing true facts of the case.” Framing such a view, ultimately the CIT(A) upheld addition of Rs. 17,00,000/- and deleted addition of Rs. 18,94,805/-. S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 6 of 19 11. Ld. DR representing the revenue argues that the assessee has accepted the seized document and hence there remains no doubt or dispute qua the validity and genuineness of document as well as contents thereof. When it is so, Ld. DR submits, it is for the assessee to demonstrate as to how the payment of Rs. 18,94,805/- was in fact made to the supplier and whether or not it is recorded in assessee’ books of account. Ld. DR submitted that the assessee does not deserve any relief unless it is shown by clinching evidence that the payment of Rs. 18,94,805/- is actually recorded in books of account. He submitted that the CIT(A) has wrongly given relief to assessee despite himself admitting that the AO has not conducted unearthing enquiry on this point. Per contra, Ld. AR relied upon the order of CIT(A). 12. We have considered rival submissions of both sides and perused the records. We find sufficient merit in the submission of Ld. DR that the seized document having been accepted by assessee, the assessee has clearly accepted the transactions mentioned therein. Therefore, it is very much imperative on the part of assessee to explain as to how the payment of Rs. 18,94,805/- was made to the supplier and how it is recorded in books of account. We note that the CIT(A) has also admitted that the AO has not conducted necessary enquiry. Therefore also, it is very much clear that it requires a complete verification by AO. Hence, we think it appropriate to remand this ground of revenue back to the file of AO. The AO would carry out necessary verification; also consider the explanation put forward by assessee and take a final call. This ground of revenue is, therefore, allowed for statistical purpose. Revenue’s Ground No. 3 and Assessee’s Ground No. 1: 13. In these grounds, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 48,00,000/- out of total addition of Rs. 61,10,200/- made by AO on account of undisclosed investment in plant & machinery u/s 69B and the assessee claims that the CIT(A) has wrongly sustained the S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 7 of 19 remaining addition of Rs. 13,10,200/-. These grounds are adjudicated analogously. 14. During assessment-proceeding, Ld. AO made a reference to Departmental Valuation Officer (DVO) u/s 142A read with section 131(1)(d) for estimation of the value of investment in plant and machinery, whereupon the DVO estimated value at Rs. 6,56,10,200/-. Thereafter, the Ld. AO worked out the difference of two figures, viz. (i) investment of Rs. 5,95,00,000/- declared by assessee in books of account and (ii) value of Rs. 6,56,10,200/- estimated by DVO; and accordingly made an addition of Rs. 61,10,200/- treating the same as undisclosed investment u/s 69B. During first-appeal, Ld. CIT(A) reduced granted relief of Rs. 48,00,000/- on account of Modvat Credit adjustment and sustained balance addition of Rs. 13,10,200/-. Now both sides are aggrieved by the action of CIT(A); while the revenue claims that the CIT(A) is not justified in giving relief of Rs. 48,00,000/- to assessee, the assessee is aggrieved by the remaining addition of Rs. 13,10,200/- sustained by CIT(A). 15. We first deal with revenue’s grievance. We observe that the CIT(A) has given relief of Rs. 48,00,000/- on account of Modvat adjustment, which is very much correct. Let us explain how simple it is. The assessee has incurred actual cost of Rs. 6,43,00,000/- in plant and machinery but out of that, the excise component of Rs. 48,00,000/- is claimed as modvat credit; thus net cost of Rs. 5,95,00,000/- is shown as addition in fixed assets. But the actual investment of assessee from explained sources is Rs. 6,43,00,000/- and not Rs. 5,95,00,000/-. The DVO has estimated investment at Rs. 6,56,10,200/-. Thus, the under-disclosure by assessee comes to Rs. 13,10,200/- only [6,56,10,200 (-) 6,43,00,000]; it is not Rs. 61,10,200/- as computed by AO [6,56,10,200 (-) 5,95,00,000]. In a way, the AO has not considered the fact that out of difference of Rs. 61,10,200/- worked out by him, the difference of Rs. 48,00,000/- is adequately explained to be on account of modvat credit availed by assessee and not an under- S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 8 of 19 disclosed investment. However, Ld. CIT(A) has correctly understood this point and given relief. Therefore, we do not find any mistake in the relief of Rs. 48,00,000/- given by CIT(A). The ground raised by revenue challenging this relief granted by CIT(A) is devoid of merit and hence dismissed. 16. Coming to assessee’s grievance, Ld. AR submitted that the final difference is just Rs. 13,10,200/-, which constitutes approx. 2.20% of the investment of Rs. 5,95,00,000/- declared by assessee in books of account. Ld. AR submitted that the valuation is a mechanical-cum-estimation exercise done by the DVO which can never yield 100% exact-accurate value and hence the difference of just 2.20% is an acceptable range. The Ld. AR gainfully relied upon the decision in CIT Vs. M/s Abeeson Hotels Pvt. Ltd. Indore (2004) 2 ITJ 71 (MP) wherein the Hon’ble jurisdictional High Court of Madhya Pradesh has accepted the difference of 10% in valuation as reasonable. Ld. AR has placed a copy of the decision in the Paper-Book and drawing our attention to following paragraphs of the decision prayed to give the benefit of the decision to the assessee: “5. The question is substance that arose before the Taxing Authorities was in regard to valuation of assessee’s properties. It was found that there is some variation between the valuation made by assessee and what is made by DVO. As far as assessee’s valuation was concerned. It was valued at Rs.1,41,79,527/-, where as the valuation made by DVO was at Rs.1,58,38,500/-. In the opinion of Tribunal, 10% difference usually occurs in two valuers and hence, the valuation shown by assessee was accepted. The revenue has now come up in appeal against this finding. 6. We find no merit in the challenge laid by the Revenue. In fact, what is held by the Tribunal cannot be faulted with. The 10% difference in the valuation made by the two valuers cannot be said to be either unreasonable without any basis. It usually occurs and hence, if the authorities accepted the valuation of the assessee so far as the property in question is concerned, the reasoning cannot be regarded as entirely, illegal, or without jurisdiction.” On a careful consideration of the aforesaid decision of Hon’ble Jurisdictional High Court we observe that the decision has ruled that the difference between two valuations made by different valuers upto 10% is reasonable. This decision dealt with a case of difference in two valuations done by S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 9 of 19 different valuers whereas the present-appeal deals with a situation of difference in the investment declared by assessee in books of account and the valuation done by a valuer. Thus, there is a slight difference in the facts. But if we carefully and holistically read paragraph No. 6 of the decision, there is a clear acceptance given by Hon’ble High Court that the difference usually occurs in valuation. This is perhaps so because, as urged by Ld. AR, valuation is a mechanical-cum-estimation exercise done by the valuer and it can never yield 100% exact-accurate valuation. Therefore, in our considered view there should not be any hesitation in accepting difference upto 10% as reasonable even in present case. The Ld. DR could not contradict the applicability of decision. Thus, we are inclined to accept the submission of Ld. AR that 2.20% difference in valuation in present-case is reasonable. Taking such a view, we delete the addition of Rs. 13,10,200/- sustained by CIT(A). The ground raised by assessee is thus allowed. 17. In the combined result, the revenue’s ground is dismissed and assessee’s ground is allowed. Revenue’s Ground No. 4 and Assessee’s Ground No. 2: 18. In these grounds, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 2,17,98,742/- out of total addition of Rs. 2,82,27,301/- made by AO on account of undisclosed investment in shed & building u/s 69B. The assessee claims that the CIT(A) has erred in sustaining the entire addition of Rs. 2,82,27,301/- made by AO [though CIT(A) has given set-off benefit of Rs. 2,17,98,742/-]. 19. Facts apropos to this addition are such that during search proceeding, the authorities found that the assessee has made investment in construction of shed and building of soya plant at Plot No. 1-H, New Industrial Area, Mandideep, District – Raisen. The search-authorities seized certain documents/loose-papers marked as “BS-1-Page 1 to 41”, “BS-2-Page 1 to 37”, “BS-6-Page 1 to 90” and “BS-9-LPS-9-Page 18 to 21”, the details S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 10 of 19 are mentioned by AO in para 15.4 of assessment-order. The search- authorities also made a reference to Registered Valuer (RV) for finding the value of investment made by assessee. The RV reported investment at Rs. 5,97,68,000/-. Thereafter, during assessment-proceeding, the AO examined this issue. Initially, he made another reference dated 01.08.2013 to Departmental Valuation Officer (DVO) u/s 142A read with section 131(1)(d) for estimation of the value of investment but the DVO did not submit report till completion of assessment. Therefore, the AO noted in assessment-order “Since this case shall get barred by limitation on 31/03/2014, therefore, this assessment-order is being passed. However, after receiving the valuation report from DVO, if anything adverse is found, then remedial action shall be taken as per law.” Finally, the AO computed undisclosed investment at Rs. 2,82,27,301/- on the basis of loose-papers seized during search and made addition. Thus, it is important to note that the ultimate basis of addition of Rs. 2,82,27,301/- is neither the report of RV nor of DVO; it is various loose- papers seized during search. 20. During first-appeal, the CIT(A) examined the seized documents, considered submissions of assessee and finally held as under: “5.3.4. The appellant before me has claimed that the loose papers i.e. LPS- 9/18 comprises figure of Rs. 64,28,559/- which was used for renovation of plant. Therefore, appellant itself has admitted and has proven the genuineness of the various loose papers found and seized during the course of search. The appellant also failed to explain the source of payments narrated on these loose papers. The appellant has also failed to explain the difference as estimated by registered valuer and value declared by appellant in its books of accounts amounting to Rs.2,82,27,301/-. The appellant before me has strongly contended that a sum of Rs. 4,00,00,000/- was voluntary surrendered on account of investment in building and shed. The AO during the course of assessment proceedings has also acknowledged that appellant made voluntary surrender of Rs. 4,00,00,000/- in para 7.1 of the assessment order, however, did not allow relevant setoff with determined undisclosed investment. During the course of search as discussed above LPS-9/18 was found and seized which contains details of renovation of plant and machinery. The appellant through its written submissions has requested to excluded the amount as mentioned on the said loose paper i.e. Rs. 64,28,559/- and allow S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 11 of 19 set-off of balance amount of Rs. 2,17,98,742/- with voluntary surrender of Rs.4,00,00,000/-. In view of the principle of natural justice, I hereby allow set- off of voluntary surrender of sum of Rs. 4,00,00,000/- with total estimate of undisclosed investment of Rs.2,17,98,742/-. 5.3.5 In view of the above discussion, addition made by the AO amounting to Rs. 64,28,559/- is Confirmed and appellant gets relief of Rs. 2,17,98,742/-. Therefore, appeal on this ground is Partly Allowed.” 21. Thus, the CIT(A) has, though confirmed the entire addition of Rs. 2,82,27,301/- but allowed set-off benefit of Rs. 2,17,98,742/- against the surrendered income. Now, both sides are having rival claims before us. Ld. DR submitted that the CIT(A) has allowed arithmetical set-off of Rs. 2,17,98,742/- without verifying the details of surrender made by assessee. Ld. DR submitted that he does not have any quarrel with giving set off, if available to assessee, but the set-off cannot be blind or mere arithmetical. Ultimately, Ld. DR prays to remand this issue back to AO with a direction to consider set-off issue deeply. Per contra, Ld. AR claims that the CIT(A) was not justified in restricting set-off to Rs. 2,17,98,742/- when the assessee has made a surrender of Rs. 4 crore. Ld. AR requests that the CIT(A) ought to have allowed full set-off of Rs. 2,82,27,301/-. Thus, both of these cross- grounds raised by revenue and assessee ultimately boil down to allowing proper set-off to assessee. After a careful consideration, we remand these grounds back to the file of AO who would consider the set-off issue deeply and take a final call. Accordingly, these grounds are allowed for statistical purposes. Revenue’s Ground No. 5 and Assessee’s Ground No. 3(i) & 3(ii): 22. In ground No. 5, the revenue claims that the CIT(A) has erred in deleting addition of Rs. 40,71,096/- out of total addition of Rs. 1,43,80,478/- made by AO on account of undisclosed investment in “Bansal News” u/s 69B. Per contra, in ground No. 3(i), the assessee claims that the remaining addition of Rs. 1,03,09,382/- sustained by CIT(A) is wrong. Further, in ground No. 3(ii), the assessee also claims that out of addition of S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 12 of 19 Rs. 1,03,09,382/- sustained by CIT(A), the addition of Rs. 54,31,182/- belongs to AY 2011-12 and not to AY 2012-13. 23. Facts apropos to this addition are such that during search proceeding, the authorities found that the assessee has made investment in setting up “Bansal News”. The search-authorities also seized certain documents/loose- papers marked as “LPS-4/9-Page 3 to 19”, “LPS-1-Page 107” and “LPS- A1/1/1-Page 18”, the details are mentioned in Para 17 of assessment-order. Thereafter, during assessment-proceeding, the AO made a reference dated 24.01.2014 to Departmental Valuation Officer (DVO) u/s 142A read with section 131(1)(d) for estimation of the value of investment, but the DVO did not submit report till completion of assessment. Therefore, the AO noted in assessment-order “Since this case shall get barred by limitation on 31/03/2014, therefore, this assessment-order is being passed. However, after receiving the valuation report from DVO, Plant & Machinery, New Delhi, if any adverse is found, then remedial action shall be taken as per law.” Finally, the AO computed total investment at Rs. 9,16,80,478/- on the basis of seized loose-papers but since the assessee had already disclosed investment of Rs. 5,73,00,000/- in books of account; the AO arrived at undisclosed investment of Rs. 3,43,80,478/- [9,16,80,478 (-) 5,73,00,000]. The AO, however, observed that the assessee had already surrendered/offered Rs. 2 Crore on account of undisclosed investment in plant and machinery; therefore ultimately he made addition of Rs. 1,43,80,478/- after giving set off of Rs. 2 Crore. 24. During first-appeal, Ld. CIT(A) granted part-relief of Rs. 40,71,096/- and confirmed addition of Rs. 1,03,09,382/- by observing and holding thus: “5.4.3 I have considered the facts of the case, evidences on record and findings of the AO. During the course of appellate proceedings, ld. AR of the appellant requested to provide copies of DVO's report received by the AO. The AO vide letter dated 08.02.2018 was directed to provide copies of relevant DVOs report received by him. The AO in reply submitted copies of DVO's report. A copy of these DVO's report were also provided to appellant on 09.02.2018. The appellant in reply to remand report filed rejoinder dated S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 13 of 19 19.04.2018 and has raised various objections on report of the DVO. The AO further vide letter dated 13.06.2018 was directed to comment on objections raised by the appellant. The AO after several reminders forwarded comments and objections raised by the appellant to DVO for further comments. The DVO submitted its comments vide letter dated 03.12.2019. A copy of these comments was also provided to appellant for any further objection or reply. On perusal of report of the DVO it is seen that the total investment in setting-up Bansal news was Rs. 6,77,09,382/- only. On the other hand appellant has declared cost of plant and machineries at Rs. 5,74,00,000/-. Therefore, the AO was not justified in presuming the investment in setting-up Bansal News at Rs.9,16,80,478/-. Further, the AO itself vide para 17.4 (iv) of the assessment order has stated that the loose paper A-1/1/1 (page no 18) shows rough calculation of Rs. 2,63,23,470/-. Say, if we exclude the rough jottings and working as mentioned on the loose paper the estimated investment would come at Rs.6,53,57,008/- which is nearly equal to the value estimated by the DVO. Thus, it is evidently clear that the loose papers found during the course of search also shows rough calculations and does not clearly indicate any investment. 5.4.4. In view of the above discussion, addition made by the AO amounting to Rs.1,03,09,382/- is confirmed and appellant gets relief of Rs.40,71,096/-. Therefore, appeal on this ground is partly allowed.” 25. Before us, Ld. DR submitted that the AO made addition on the basis of seized documents; therefore the CIT(A) should have sustained entire addition made by AO. 26. Per contra, the assessee has raised two grounds, numbered as 3(i) and 3(ii). Firstly, we would take up ground No. 3(i). Apropos to ground No. 3(i), Ld. AR raised twin-objections, namely (a) the DVO has unnecessarily made high-pitched estimation which is not justified; and also (b) this addition is telescoped by the addition of Rs. 43,52,500/- made by AO in Para No. 11.6 of assessment-order. 27. We have considered rival submissions of both sides and perused the record. We find that the CIT(A) has taken into account not only the DVO’s report but also analysed the seized-documents. Before us, neither the Ld. DR nor the Ld. AR could point-out any infirmity in the conclusion made by CIT(A) that the seized-documents ultimately revealed investment of Rs. 6,53,57,008/-. Therefore, in our considered view, based on seized- documents the investment could be taken at Rs. 6,53,57,008/- and the S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 14 of 19 CIT(A) should have restricted addition to Rs. 80,57,008/- [6,53,57,008 (-) 5,73,00,000] only instead of Rs. 1,03,09,382/- [6,77,09,382 (-) 5,74,00,000]. That means, the assessee deserves a further relief of Rs. 22,52,374/- [1,03,09,382 (-) 80,57,008]. We direct the AO to delete addition further by Rs. 22,52,374/-. Regarding, the pleading made by Ld. AR that the AO has made a separate addition of Rs. 43,52,500/- vide Para No. 11.6 of assessment-order which should be taken as telescoped in present addition, we only suffice to mention that the impugned addition of Rs. 43,52,500/- (we would deal subsequently in Para No. 33 to 35 of this order under the caption “Additional ground of assessee”) is found by revenue-authorities to be on account of “unexplained expenditure” and not of “unaccounted sale”; hence there cannot be any telescoping benefit. Therefore, we are not persuaded to accept this pleading of Ld. AR. Finally, we allow only relief of Rs. 22,52,374/- in this ground. Thus, ground No. 5 of revenue is dismissed and ground No. 3(i) of assessee is partly allowed. 28. Yet in Ground No. 3(ii), the assessee makes a further claim that out of total addition made by AO, addition to the extent of Rs. 54,31,182/- belongs to AY 2011-12; therefore the AO is wrong in making addition to that extent in AY 2012-13 under consideration. Ld. AR has also filed a statement showing calculation of Rs. 54,31,182/- on Page No. 49 of the Paper-Book. We find certain infirmities in this claim, namely (i) on perusal of the impugned statement, it is very much obvious that the difference of Rs. 54,30,935/- has been computed by assessee on the basis of valuation-report of DVO, whereas the impugned addition is based on seized-documents not upon DVO’s report, and (ii) this is a new claim raised by us for the first time and never raised before CIT(A). Therefore, this claim is not allowed. Thus, ground no. 3(ii) of assessee is dismissed. Assessee’s Ground No. 4(i), 4(ii) and 4(iii): S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 15 of 19 29. In all these grounds, the assessee claims that the CIT(A) has erred in not allowing set-off benefits against income surrendered/offered by assessee. These grounds read as under: “4(i) That the Ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs. 4 crore on sustained addition of Rs. 64,28,559/- on account of LPS- 9/18. “4(ii) That the Ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs. 4 crore on sustained addition of Rs. 1,03,09,382/- on account of alleged excess of cost of construction in establishing Bansal News. “4(iii) That the Ld. CIT(A) erred in not allowing set-off of voluntary surrender of Rs. 4 crore on sustained addition of Rs. 47,52,500/-, Rs. 17,00,000/- and Rs. 2,69,093/- on account of various loose papers.” 30. We agree in principle that there should not be double taxation of same amount or same income. We also agree that if the assessee has already surrendered/offered certain income, the AO should allow set-off of additions made by him against such surrendered/offered income. Therefore, the claim of assessee is meritorious. However, we do not have a vivid picture of the details/break-up of the surrender of Rs. 4 crore claimed to have been made by assessee and various types of additions for which such set-off can be allowed. Further, the additions finally sustained (including set-off already allowed) in different grounds of appeal adjudicated in other paragraphs of this order, shall also be relevant for giving set-off. Therefore, a complete working is required to be made by AO. Being so, we think it appropriate to remand these grounds to the file of AO. The AO shall make a systematic analysis and give benefit to assessee, wherever allowable, in accordance with law. These grounds of assessee are, thus, allowed for statistical purpose. Assessee’s Ground No. 5: 31. In this ground, the assessee claims that the Ld. CIT(A) has erred in not giving direction to AO to compute depreciation on extra cost of construction added by him. S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 16 of 19 32. We find merit in the claim of assessee that the extra-cost of construction added by authorities is entitled for deduction of depreciation. However, this claim requires satisfaction of conditions prescribed in section 32 as well as proviso to section 69C and entails a detailed working of depreciation. Therefore, we direct the AO to allow depreciation to assessee in accordance with law. The assessee is also direct to extend fullest co- operation to AO and provide necessary details, if any, required by AO. This ground of assessee is thus allowed for statistical purpose. Assessee’s Additional Ground: 33. The assessee has raised following additional ground: “That the Ld. CIT(A) erred in confirming addition of Rs. 47,52,500/- made by AO invoking provisions of section 69C on account of alleged unexplained expenditure vide para 11.6 of order of assessment.” 34. During search-proceeding, one document marked as “LPS-Page No. 1 of BS-1/6” was seized which revealed that the assessee has made cash- payments of Rs. 47,52,500/-. During assessment-proceeding, when the AO confronted assessee qua the transactions mentioned in document, the assessee submitted reply dated 14.03.2014 by merely stating “The above LPS is covered by overall surrender of inventory Rs. 2 crore and investment in cost of assets Rs. 2 crore. No separate addition is called for.” Ld. AO was not satisfied with this reply and made addition u/s 69C. During first-appeal, Ld. CIT(A) upheld addition by observing and holding thus: “5.6.2 Page no 1 of LPS was also found from office premises of appellant which contains transactions of Rs. 47,52,000/- made in cash from 01.04.2011 to 12.05.2011. The appellant neither before the AO nor before me has explained the transaction mentioned on the said loose paper and also failed to get the same reconciled with its regular books of accounts. Therefore, the appellant has totally failed to furnish any material evidence in support of its claim. In view of the above discussion and in absence of any documentary evidence, I find no infirmity in the order of the AO and addition made by the AO amounting of Rs. 47,42,500/- ..... confirmed.” S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 17 of 19 35. On perusal of orders of lower-authorities, we observe that the assessee has miserably failed to explain the transactions mentioned in seized- document, which as deciphered by AO are in the nature of “unexplained expenditure”. It is also not the case of assessee that the said document does not belong to assessee or it is a dumb document. Therefore, in the circumstances, the authorities are justified in treating the transactions mentioned in the document as covered u/s 69C and thereby making/upholding addition. In the written-submission dated 09.11.2022 filed before us, Ld. AR has stated “The seized document clearly reveals that this transaction pertains to sale and not expenditure. The addition cannot be sustained u/s 69C”. This way, the assessee has raised a totally strange and opposite pleading before us that the impugned document reveals sale and not expenditure; this pleading upsets the entire proceeding done by lower authorities. Needless to mention that when the AO show-caused assessee on the seized-document, the assessee did not make any such explanation. Further, during the course of first-appeal also, the assessee did not make such an explanation. Further, the claim raised by assessee is not a legal claim. We are afraid that we can accept such an additional ground so as to permit the assessee to raise a newer claim on facts and that too for his own fault of not exercising due care before lower authorities. Being so, we turn down the claim raised by assessee. The additional ground of assessee is, thus, dismissed. S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 18 of 19 36. Resultantly, both of these appeals are partly allowed for statistical purposes. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on 15/05/2023. Order pronounced in the open court on ....../....../2023. Sd/- Sd/- (CHANDRA MOHAN GARG) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 15.05.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench,Indore 1. Date of taking dictation 1.5.23 2. Date of typing & draft order placed before the Dictating Member 1.5.23 3. Date on which the approved draft comes to the Sr. P.S./P.S. 1.5.23 4. Date on which the approved draft is placed before other Member S.D. Bansal Iron and Steel Pvt. Ltd. ITA No.170/Ind/2020 &IT(SS)No.68/Ind/2020 Assessment years 2012-13 Page 19 of 19 5. Date on which the fair order is placed before the Dictating Member for pronouncement 6. Date on which the file goes to the Bench Clerk 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of dispatch of the Order