Income Tax Appellate Tribunal - Delhi
Iftikhar Ali Khan, New Delhi vs Assessee on 9 March, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'C': NEW DELHI
BEFORE SH. I.C. SUDHIR, JUDICIAL MEMBER
AND
SH. O.P. KANT, ACCOUNTANT MEMBER
IT(SS)A No. 39/Del/2008
Block period: 01.04.1996 to 16.08.2002
Sh. Iftikhar Ali Khan, 12, Delhi Vs. DCIT, Central Circle, New Delhi
(PAN: AEOPK8624B)
(Appellant) (Respondent)
And
IT(SS)A No. 54/Del/2008
Block period: 01.04.1996 to 16.08.2002
DCIT, Central Circle, New Delhi Vs. Sh. Iftikhar Ali Khan, 12, Delhi
(PAN: AEOPK8624B)
(Appellant) (Respondent)
Appellant by Sh. Vinod Kumar Garg, CA & Sh. R.S.
Negi, Adv.
Respondent by Sh. A.K. Saroha, CIT(DR)
Date of hearing 28.01.2016
Date of pronouncement 09.03.2016
ORDER
PER O.P. KANT, A.M.:
These cross appeals by the assessee and Revenue are directed against the order dated 09.01.2008 of the ld. CIT(A)-II, New Delhi, in respect of block period from 01.04.1996 to 16.08.2002. Both the appeals being connected , are heard together and are being disposed of by this consolidated order. 2
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 IT(SS)A No. 39/Del/2008
2. The ground of appeal raised by the assessee are as under:
l. That the Ld. CIT(A) is not justified in rejecting the books of assessee without appreciating and admitting the additional evidences filed during appellate proceedings.
2. That the Ld. CIT(A) is not justified in making an addition of Rs.9,27,0001- for the AY 2003-04 on account of cash found.
3. That the Ld. CIT(A) is not justified in making new addition of Rs.3,92,700/- (enhancement) on account of unexplained investment in purchases of raw material during the A.Y. 1998-99.
4. That the Ld. CIT(A) is not justified in enhancing the addition on account of net profit from Rs.3,55,5811- to Rs.9,45,485/- for AY 1999-2000 to 2003-04 (up to 16.08.2002) by arbitrarily applying the net profit rate of 10% on total sales.
5. That the Ld. CIT(A) is not justified in upholding the addition of Rs.
40,000/- u/s 69 for the AY 2003-04 on account of purchase of KVP in joint name with wife out of her 'MEHAR' Money.
6. That the Ld. CIT(A) is not justified in making an addition of Rs.l,54,7701- u/s 69 for the A Y 2003-04 on account of cash payment for purchase of Santro car.
7. That the Ld.CIT(A) is not justified in upholding an addition of Rs.
l,00,000/- u/s 69 for the A Y 2003-04 for under valuation of the stock found.
9. That the Ld.CIT(A) is not justified in upholding the Various additions as taxation can be of the real income and only to the extent of source of income which could give rise to such income and not beyond that.
10 That the Ld.CIT(A) is not justified in assessing the income at Rs.15,14,470/- (after telescoping) without giving benefit of initial investment of 150,000/- and also of profits ploughed back by the assessee in business.
11 That the assessee hereby disputes the very levy and of interest u/s 158 BF A(1),(2).
12. That the assessee hereby prays for any consequential relief and or legal claim arising out of this appeal before the disposal of the same.
13. That the assessee craves leaves leave for any addition, deletion, Amendment, modification, rectification in the grounds of appeal before the disposal of the same.
2. The facts in brief are that the assessee was engaged in the business of kites in the name of proprietary concern M/s Lalu Kites Centre in relevant 3 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 period. A search and seizure action under Section 132 of the Income-tax Act, 1961 (for short "the Act") was conducted at the premises of the assessee on 16th August, 2002. In search action cash of Rs. 10,27,000/- alongwith incriminating documents indicating sale and purchase of kites were found and seized. . Consequent to the search, a notice under Section 158 BC of the Act was issued for filing return of its undisclosed income for the block period from 01.04.1996 to 16.08.2002. The assessee filed its return declaring undisclosed income of Rs. 29,666/- on 09.01.2003. The case was taken up for scrutiny by way of issue of notice under Section 143(2) of the Act. The Assessing Officer did not accept the books of account produced by the assessee in the course of the assessment proceedings, and he made the following additions:
(i) On account of cash found and seized from the residents during the search action - Rs. 10,27,000/-
(ii) Undisclosed income from purchase, sale and investment in the business of Kites - Rs. 5,05,581/-
(iii) Unaccounted investment in Kisan Vikas Patra - Rs. 40,000/-
(iv) Unaccounted investment in purchase of Santro Car 1,54,770/-
(v) Unexplained investment in stock Rs. 1,50,962/-
3. Aggrieved by the above additions, the assessee filed an appeal before the ld. CIT(A) who confirmed the rejection of books of account of the assessee, and not only confirmed the additions but also enhanced income from purchase and sale of kites from Rs. 3,55,581/- to Rs. 9,45,485/- and unexplained investment at the opening of the block period from Rs. 1,50,000/- to Rs. 3,92,7000/-.The ld. CIT(A) also allowed telescoping of the unexplained investment/expenditure against the undisclosed income earned and finally confirmed the addition of Rs. 15,14,470/-.
4
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002
4. The assessee preferred an appeal against various additions sustained and enhanced by the ld. CIT(A), whereas the Revenue has preferred appeal against the benefit of telescoping allowed to the assessee.
5. In ground No. 1 of the appeal, the assessee has agitated the issue of rejecting the books of account under Section 145(3) of the Act by the Assessing Officer and sustained by the ld. CIT(A).
5.1 The Authorized Representative of the assessee filed paper book containing page no. 1 to 302 and submitted that the books of account were prepared on the basis of the documents found and seized in the course of search. He further submitted that the Assessing Officer and ld. CIT(A) has at times relied on the evidence submitted by the assessee. Ld. Authorized Representative further submitted that the Assessing Officer has relied on the books of account submitted by the assessee for the figure of sales and purchase. He further submitted that the books of account were produced before the ld. CIT(A) also and the matter was remanded twice to the Assessing Officer and no adverse view was taken by the Assessing Officer and, therefore, there was no requirement to reject the books of account.
5.2 On the other hand, ld. CIT(DR) relied on the orders of the lower authorities and submitted that the rejection of the books of account has been rightly upheld by the ld. CIT(A) in the circumstances of the case. 5.3 We have heard the rival submissions and perused the material on record. In the case of the assessee, in the course of search action few documents indicating sales/purchase, cash vouchers etc. were found and no books of 5 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 account were found. During the course of search, the assessee stated that the persons who used to write the books of account of the assessee was not in Delhi and, therefore, he could not show the books of account and he sought more time to produce the books of account. However, it has been noticed by the Assessing Officer that despite providing five opportunities between 26.08.2002 to 20.09.2002 by the Deputy Director of Income Tax (Investigation) in post search proceedings, the assessee failed to produce books of account before him. The ld. CIT(A) has also observed that though the books of account were prepared partly on the basis of the documents and evidences found during the course of search, however, the all the entries made in the books of account could not be substantiated by the vouchers or other evidences found during the course of search. The ld. CIT(A) has given detailed finding in respect of the defects noticed in the books of account from para 4.5 to 4.6 of his order, which are reproduced as under:
"4.5 The books of accounts prepared after the search and relied upon by the appellant cannot be treated as reliable. Following points need to be noted:
1. The books were not available at the time of the search. Even subsequently the books of accounts were not produced before the ADIT although five specific notices were issued to the appellant. The question of levy of penalty for non-production of books is a different issue. But such action indicates that the appellant needed time to manipulate the books with particular motive. The books were actually prepared /created in such manner.
2. As discussed earlier there is no independent cross verifiable evidence to support the various entries in books of accounts. All the business transactions are stated to be in cash. There are no business transactions done in bank which could have lent confidence of genuineness to entries. The AO's observations on this aspect were therefore correct.6
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002
3. As about the argument that the appellant was not required to maintain books as per sec 44AA, it may be mentioned that the provisions does not mandate maintenance of books for certain assessees. However it cannot stop them from doing so. Moreover it is the appellant who has prepared books & is insisting on accepting the same as correct whereas the AO has rejected them. If the appellant does not wish to rely on books he may well not object to their rejection.
4. It was repeatedly stated that the books have been prepared & reconciled with reference to the seized material being kachcha record of business transactions maintained by the appellant who was uneducated & working in unorganized sector. On examination, the seized record was found to be highly casual, unsystematic and haphazard which was in the form of mere rough notings. It is difficult to derive any logical conclusions about nature of his business. I personally test checked the books with reference to the seized material & the explanation submitted by the appellant about nature of his business. Large scale discrepancies, inconsistencies and contradictions were found during that check. Some of the points are discussed as follows:-
a. There was no consistency in reproducing the notings in seized kachcha dairy to books. Similar type of notings in seized diary were entered differently in books. Like notings on left/right of the diary were sometimes treated as sales / purchase & at others payments. Moreover notings of jama have been somewhere treated as receipt and at other payment. Some jama notings were not entered in books at all. b. No purchase bills were seized. Sales bills seized are also not complete. Therefore all purchase & sale entries cannot be treated as authentic. Moreover there is not evidence to prove that the purchase / sale was cash or credit. It was interpreted from notings in seized diary only, which were not clear & consistent/systematic. c. Even if the purchase/sale was treated as credit, there is hardly any basis for the date of actual cash transaction (payment or receipt). It was found that the date of transaction mentioned in the books at many instances was different than the date noted on the seized diary or the sale/ purchase bills. At many places entries in different dates in seized dairy were clubbed together & noted on one date. d. Many notings in seized diaries and their corresponding entry in books could not be explained. Some findings as a result of test check of books were noted on separate paper & a copy of the same was given to the AR also. e. From the list of seized items it is found that no record pertaining to FY 98- 99 was seized. How these accounts were prepared is not known.
5. Without prejudice to the above an important aspect is that the appellant had filed P&L account and balance sheet with the original returns filed by him for AY 99-00 onward. Copy of original P&L A/c & balance sheet for AY 99-00 to 02-03 (FY 98-99 to 01-02) which were submitted before me are treated as part of this order & as Annexure-A (8 pages). The revised P&L etc & balance sheet made now on the basis of newly prepared books of accounts, and filed as 7 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 part of paper book before me, are poles apart from the original final account filed with the returns. These are also treated as part of this order as Annexure-B (10 pages). The comparison of sale turnover, NP & stock as per original etc filed with return and revised books of accounts are as follows:
Astt. Turnover in Turnover in Profits in Profits Stock Stock in Year return books** return*** in in books books return 99-00 93500 462000 35100 53175 18500 265090 00-01 115000 2176967 7210 68251 9260 842510 01-02 92650 1153353 19400 64034 35800 168500 0 02-03 175000 3757316 35096 88215 45380 945240 03-04* NA 2145288 NA 81406 NA 150962 *(till 16/8/02) ** Labour Chrg. rcd not included *** other income excluded
6. The main motive to make books is to show highly inflated cash balance which has been done by showing huge creditors. Comparison of creditors, debtors & cash in b/s filed with original returns and now shown in books is as under:
Year Creditors Creditors in Debtors in Debtors Cash Cash ending in return books return in Bal in Bal in books return books 31/3/99 Nil 630590 Nil Nil 12158 509235 0 31/3/00 72500 2235576 65000 74601 89968 791646 31/3/01 72500 3190623 65000 1611792 94444 58277 31/3/02 148250 4527513 184500 3697562 207045 91468 16/8/02 NA 5405056 NA 4485823 NA 103795 0
7. The month wise average, maximum & minimum cash balance for entire period is shown as under:
Month Minimum Maximum Average
Apr-98 142100 150643 145891
May-98 150643 179005 159372
Jun-98 179005 192276 184772
Jul-98 191876 323950 231779
Aug-98 341480 584245 522335
Sep-98 584245 584354 584248
Oct-98 584354 584993 584374
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IT(SS)A No. 39 & 54/Del/2008
Block period: 01.04.1996 to 16.08.2002
Nov-98 574777 584993 584358
Dec-98 563759 574427 574082
Jan-99 539950 563759 557525
Feb-99 525766 539950 539029
Mar-99 505235 525766 522567
Apr-99 446610 505235 478521
May-99 428200 447610 443864
Jun-99 306868 428200 371488
Jul-99 203301 306868 254135
Aug-99 174986 216071 207320
Sep-99 174986 234986 202427
Oct-99 168353 293353 238775
Nov-99 256848 637173 468278
Dec-99 325296 687173 514617
Jan-00 415301 915006 652754
Feb-00 826493 877505 860380
Mar-00 778283 826493 798931
Apr-00 783091 794846 792960
May-00 714371 783091 750786
Jun-00 477815 658960 590090
Jul-00 141111 477815 332214
Aug-00 28766 269581 156641
Sep-00 84317 147317 121880
Oct-00 128725 141220 138236
Nov-00 128725 158725 132038
Dec-00 113441 144115 140434
Jan-01 97971 113441 109877
Feb-01 88316 97971 97626
Mar-01 58277 88316 67957
Apr-01 46002 58277 57867
May-01 11462 46002 43304
Jun-01 11462 16477 11629
Jul-01 15568 312618 110862
Aug-01 192110 293367 233114
Sep-01 159588 192110 173607
Oct-01 49588 159588 116270
Nov-01 57053 169228 99249
Dec-01 132955 393555 275499
Jan-02 1035 272535 217021
Feb-02 76734 242310 215434
Mar-02 61646 91468 68286
Apr-02 16072 165276 88103
May-02 19365 49285 34347
Jun-02 498 61034 27969
Jul-02 17819 266649 144432
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IT(SS)A No. 39 & 54/Del/2008
Block period: 01.04.1996 to 16.08.2002
Aug-02 291074 1037950 781227
As can be seen firstly huge cash balance on continuous basis shown in the books is unbelievable and not commensurate to the nature of business or the kind of assessee (economic level) the appellant has been portrayed to be. It is pertinent to note that the appellant was not having bank account during the relevant period (so as to keep liquid fund in bank and earn some interest) and must be keeping the funds in cash (if at all it was really available) which does not appear to be real possibility considering huge quantum. Secondly one needs credit only if he is short of cash. If the appellant was having sufficient liquid funds there was no need to purchase raw material on credit and have huge list of creditors. Thirdly the level of creditors & debtors is highly unbelievable. In many years, the debtors are more than total sales of the year & creditors more than total purchases.
8. For AY 02-03 (FY ending 31/3/02) there was yet another set of balance sheet and P & L A/c which were submitted before the AO along with letter dt.12/7/04. This is made part of this order as Annexure-C (3 pages). It may be seen that P & L A/c is different than the one filed in appeal as original account (Annexure-A pg 8) as well as final P & L A/c on the basis of books filed as part of paper book (Annexure-B pg 8). This shows that there is no sanctity of either books of accounts or the final accounts made on its basis. They are changed and manipulated at will according to the need & convenience. It may be noted that all these documents are signed by the appellant.
9. It is stated that the appellant's business of making kites is a seasonal business and major sale takes place in the months of July-August as the kites flying season is on Rakhi and 15th August. The appellant has also vehemently insisted that the cash found during the search reflected the sale proceeds as the sale was clearly over by 15th of August every year. If that were true there would not have been any stock of goods on 31st March which is no season for kites. The appellant has shown huge stock in revised books (refer to table in clause 5. above) .
10. Further, if the details of month wise sales shown in the books of accounts are analyzed it is found that in most of the years the major sale was shown in the months of Sept, Oct, Nov & Dec. Only for the period from 1/4/02 to16/8/02 (date of search) the sale has been shown from the months of April to August. A copy of statement showing month wise purchase and sales is made part of this order as Annexure-D (5 pages).
11. Similar discrepancies and contradictions can be observed form the look at month wise purchases. It was contended that the purchases are made in the lean season when the goods could be obtained at lower price. The season for sale is stated to be July, August and therefore 10 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 the purchase season for raw material should be from April to June. According to the explanation regarding the nature of appellant's business the months of purchases and sales should have been similar in a" years. There should be a clear pattern commensurate to the explanation which is absent in this case. It is found that major purchases in FY 99-00 and 01-02 are shown in the months of Sept to Dec. In FY 00-01 and part period in 02-03 the purchases are from April to August.
12. From the details 'of month wise purchase and sale for FY 98-99 it is seen that the appellant had made sale of Rs 4,62,000 from the months of April to August but there are no purchases in those months. The purchases are shown only in the months of Oct, Nov & Feb March of the Financial Year.
4.6 In view of the above discussion it may be noted that even if the rough notings in the seized diary are treated as some basic data of business transactions, the entry in books cannot be treated as reliable. All the transactions are in cash and there is no evidence to the actual date of cash changing hands. Moreover the dates mentioned in dairy have been changed in books. The picture presented in books regarding cash transactions is quite different than the notings in seized papers. Since seized papers are incomplete, the real position of business cannot be determined from the seized records. It follows that on none of the dates of the year the cash balance shown in the cash book reflects the true position of the cash available. The actual transactions are carried out in differently, and entries in the cash book are made in altogether different manner. A copy of the paper on which some findings of test .check of books of accounts were noted (copy of the same was given to appellant's AR also) is made part of this order as Annexure-E. Hence it may be concluded that there is no primary evidence in support of transactions noted in so called books of accounts.
4.7 When this was pointed out to the AR it was stated that even though the purchase/sale has been shown on different date in books, the total purchase/sale do tally with the seized documents & the annual profit per books of account is correctly stated. However this kind of arguments is quite fallacious because if the transactions are not recorded in the books on correct dates, the books cannot be said to be reliable and conclusions drawn would be erroneous. If it was sufficient to simply include all purchase and sale transactions on any date on whatsoever, there was no purpose of making any books of accounts. Only the P&L a/c could be prepared directly at the end of the year. Moreover if simply the date of cash transaction is changed in any cash business, the final results of accounts may undergo huge 11 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 change even if purchase & sales bills remain the same. On the basis of same purchase/sales any number of set of books may be prepared to show huge cash balance/minimum cash balance or even negative cash balance by simply changing the date of cash exchange. Therefore even if the total purchase & sales for different years are accepted as based on noting in seized material, manipulation of date of cash transaction renders the books unreliable as it gives a lot of leeway for adjustment of dates of transaction according to the convenience of the assessee to build up cash balance to explain cash investments etc. The books cannot be said to be correct in terms of section 145(3). Accordingly the AO's action to reject the books of accounts is confirmed."
5.4 In view of the defects pointed out by the Assessing Officer and ld. CIT(A) in the books of account, we are of considered opinion that the books of account cannot be said to be correct in terms of Section 145(3) of the Act and we find the order of the ld CIT as well reasoned and no interference is required by us, accordingly, we uphold the finding of ld. CIT(A) on this issue in dispute. This ground of the assessee is accordingly dismissed.
6. In ground no. 2, the assessee is contesting the addition of Rs. 9,27,000/- as unexplained cash. The AO had made addition of entire cash found of Rs. Rs. 10,27,000/-, however, the ld CIT(A) allowed relief of Rs. 1,00,000/- as cash as corresponding to regular business activity and sustained the balance amount of Rs. 9,27,000/- , against which the assessee is in appeal. The ld. Authorized Representative referring to the statement of the assessee at page 84 of the paper book submitted that the money found during the search was out of sale proceeds of the kites , besides money belonged to relatives and consignee parties. Further, he submitted that the denomination of currency of the money found was also mostly of Rs. 10 to Rs. 100. It was submitted that maximum sale of the assessee 12 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 was in the month of July and August and the assessee has explained the availability of cash with the help of cash book, which was produced before the Assessing Officer. Accordingly to the said cash book, the cash balance of Rs. 10,37,950/- was available on the date of search and thus the cash found should not be treated as unexplained.
6.1 The ld. CIT(DR), on the other hand, relied on the order of the lower authorities and submitted that the addition upheld by the CIT(A) may be sustained.
6.2 The ld. CIT(A) has observed that the books of account of the assessee were not reliable and cash receipt in the books of account were not appearing in the noting in the seized diary and huge cash sales of more than Rs. 4 lakhs was shown on various dates in the month of August, 2002 without any corresponding evidence in seized papers. The ld. CIT(A) also observed that there were manipulations in the bill books and the assessee had shown unsecured loans of Rs. 2,46,500/- taken in the month of July and August, 2002, just few days before the search and held that the assessee could not justify taking of such loans despite being availability of cash balance as per the cash book prepared. Considering facts and circumstances, the ld. CIT(A) admitted the availability of cash of Rs. 1 lakh in normal business and he held the rest cash available of Rs. 9,27,000/- as unexplained. The relevant paragraph of the order is reproduced as under:
" 5.1 Now I come to the explanation about seized cash. Heavy reliance has been placed of books of accounts, The books have already been rejected as unreliable and prepared with particular motive. However without prejudice to 13 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 that, the manner of cash built up in the books was further examined. During test check it was found that entry of cash receipt of Rs 16,500 on 16/4/02 in the name was wrong as there was no such noting in seized diary. Similarly, cash receipt of Rs 47,000 is shown on 23/4/02 from Rehanbhai whereas amount noted in seized dairy is only Rs 7000. Moreover huge cash sales of more than Rs 4 lacs have been shown on various dates of August 02. It may be pertinent to note that there was no evidence to this effect in seized papers. A bill book was produced to show cash sales but it cannot be treated as reliable evidence because nothing is mentioned on the bills as to the nature of sale. In books some items are treated as cash & others as credit. Normally cash sale is of small amounts, but in bill book single bills of Rs. 62000 & 66,000 were made on 15/8/02 itself which appeared to be manipulated. This was done obviously to inflate cash balance as on the date of search.
5.2 Further from the balance sheet as on 16/8/02 (date of search) it is seen that the appellant has shown unsecured loans of Rs 2,46,500. The loan was shown to have been taken in the months of July and Aug 02. It is noted that that cash balance according to the books of appellant as on 1/7/02 was Rs 17,819 and it continuously increased thereafter to become more than Rs 10 lac as on 16/8/02. A copy of statement showing date wise cash balance in July-Aug 02 is made part of this order as Annexure-F. Loan is normally taken by a person if he needs funds. A businessman may need funds for making purchase of raw material or some assets or payment to creditors etc. It is highly absurd that one would take loan to build up only cash balance as is done in the case of appellant. The cash balance on the dates on which alleged loan was claimed to be taken by the appellant is shown as under.
Date Name Amount Cash Bal
20/4/02 Bano Bequm 15000 100197
1/7/02 Abdul Hai Ansari 8000 17819
2/7/02 Aasaf Ali 15000 46069
4/7/02 Nayim Akhatar 15000 44094
8/7/02 Abdul Hai Ansari 10000 91970
11/7/02 Abdul Salam 15000 115466
19/7/02 Khusqadari 8500 166601
22/7/02 Wakil Ahmed 12000 193624
25/7/02 Erfan Ullah 15000 242325
27/7/02 Kamal Ahmed 16000 234425
29/7/02 Sarif Mohmad 15000 262375
1/8/02 Parvez Akhtar 15000 291074
5/8/02 Salim Akhtar 15000 368181
6/8/02 Ekwal Hasan 15000 393531
7/8/02 Rasid Ali 10000 402881
9/8/02 Wakil Ahmed 12000 497521
11/8/02 Shamim Akhtar 10000 504112
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IT(SS)A No. 39 & 54/Del/2008
Block period: 01.04.1996 to 16.08.2002
12/8/02 Arsad Ali 10000 681155
13/8/02 Achhe Miyan 15000 751065
Total 246500
This shows that the story of taking loan is part of exercise of fabricating books of accounts to build up imaginary cash balance. It may be pertinent to note that none of the loan entry was found recorded in the seized diary. These entries were merely made in books of accounts.This further proves that the books are unreliable & entries therein are fabricated with particular motive. 5.3 In the appeal proceedings the appellant's AR filed confirmation letters from various persons who allegedly gave loan to the appellant. The AO in his report dated 3/11/05 specifically mentioned that no confirmation letter either from any persons giving loans or alleged creditors (the cash balance was inflated on the basis of these two) was submitted during the assessment proceedings. Hence the confirmation letters from loans parties & creditors are in the nature of additional evidence. The appellant has not made any specific request to admit additional evidence explaining the circumstances as per rule 46A which prevented him from filing them before the AO. In any case since the books of accounts itself have been rejected as unreliable and the claim of taking loan is held to be made up story, the confirmation letters for loans and credits are merely self servicing documents and become irrelevant. Accordingly the question of admission of the same need not be examined. Even the verification or enquiry, if any, in respect of the credits/loans made by the AO is irrelevant. 5.4 It is seen that during the course of search initially the appellant stated that he was having cash of about Rs 3 lacs. Subsequently when huge cash of more Rs 10 lacs was found from his house, he stated that it belongs to various persons being consignees of the appellant. But no evidence to support this claim was shown during the search. Even the names of such persons were not given at that time. Subsequently also the appellant did not produce the books or other documents/ evidence in response to the specific notice by the ADIT. This was obviously for the reason that the story to explain the cash was to be made up & evidence was to be created. Time was needed to prepare books so as to be able to show cash balance on specific dates when there was any investment etc. The appellant was able to prepare books by arranging entries in such manner as to build up huge cash balance on various dates whenever some investment found during search was to be explained. However in doing so, the distorted picture of the business was presented in the books due to unusual nature of entries as discussed above. This proved the books to be unreliable & hence they were rightly rejected.
5.5 In view of this it may be seen that the appellant does not have any explanation for the cash found during the search. Therefore the AO rightly treated the same as unexplained. However it is to be noted is that fact that the appellant was carrying out business of kite making is undisputed. Even if the books and imaginary huge cash balance built up is rejected as untrue, there has 15 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 to be some cash belonging to the business of the appellant if judicious view of the issue is taken. Considering facts & circumstances sum of Rs. 1 lac is treated as normal business cash of the appellant & hence considered as explained. That leaves only Rs. 9,27,000 as unexplained cash found during the search. The addition of undisclosed income on this a/c is therefore reduced to Rs. 9,27,000."
6.3 In view of above, we find that the findings of the ld. CIT(A) on this issue are well reasoned and no interference is required. Accordingly, we uphold his finding and confirm the addition of Rs. 9,27,000 as unexplained cash. This ground of appeal raised by the assessee is thus stands dismissed. 7.1 In ground No. 3, the assessee has challenged the enhancement of unexplained investment in purchase of raw material from Rs. 1,50,000/- to Rs. 3,92,700/-.
7.2 The ld AR submitted that no addition was justified in the case of the assessee as the assessee was having enough saving of the past period which explain the initial investment in the business. The ld CIT DR on the other hand relied on orders of the lower authorities.
7.3 The Assessing Officer noted that the assessee would have needed investment for setting up the unaccounted business. He further noted that the assessee was having stock worth of Rs. 1,50,962/- after maximum sale of Kites for the relevant year upto 15th August, 2002, therefore, he estimated a sum of Rs. 1,50,000/- as investment in the business at the opening of the block period ,which was not disclosed in the return. Accordingly, he made the addition of Rs. 1,50,000/- under Section 69 of the Act as unexplained investment. 7.4 In the appellate proceedings before the ld. CIT(A), it was submitted by the assessee that the assessee started business in the year 1998 and he invested seed 16 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 money of Rs. 1,50,000/- which was out of the past savings of the assessee as the assessee was doing some work for other persons on employment basis for past 23 years. The ld. CIT(A) did not accept the plea of the assessee that the investment of Rs. 1,50,000/- was out of the savings of earlier years as the same was not supported by any evidences. The ld. CIT(A) was of the view that the limited earning made by the appellant while in service, might have been used for household expenses and, therefore, in the absence of any evidence, he rejected the contention of the assessee.
7.5 The ld. CIT(A), on the other hand, held that in the very first year of the business, the assessee made sales of Rs. 4,62,000/- without any corresponding purchases. Therefore, after allowing gross profit @ 15%, he estimated the remaining amount as unaccounted investment in purchases, amounting to Rs. 3,92,700/- instead of Rs. 1,50,000/- estimated by the Assessing Officer. The relevant paragraph of the finding of the CIT(A) is reproduced as under:
"7.4 The appellant did not make any submissions regarding point No (ii) of enhancement notice regarding unexplained investment. The issue on which enhancement notice was given is that in the very first year of own business the appellant made sales of Rs 4,62,000 from April 98 to Aug 98 without there being any purchases. The purchases have been shown in the months of Sept 98 onwards. Accordingly there is no explanation about the source of purchases which resulted in sales of Rs 4.62 lacs. Since profit for the year @ 15% has already been estimated & taxed, the unaccounted investment in purchase is worked out at Rs. 3,92,700 (85% of 4,62,000). Therefore instead of Rs. 1,50,000 added by the Assessing Officer as unexplained investment, addition of Rs. 3,92,700 is to be made. This again results in enhancement of undisclosed income."
7.6 The ld. CIT(A), relying on the evidences of sales found during the course of search and inability of the assessee to explain the corresponding purchases , 17 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 logically held the amount of Rs. 3,92,700/- after allowing the gross profit @ 15% on sales of Rs. 4,62,000/- as unexplained investment. We find that the decision of the ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in his findings. Accordingly, this ground of the assessee is dismissed.
8. In ground No. 4, the assessee has challenged the enhancement of addition on account of net profit from Rs. 3,55,581/- to Rs. 9,45,485/- by the ld. CIT(A) applying the net profit rate of 10% on total sales.
8.1 Before us, the ld AR submitted that the CIT(A) has adopted the gross profit rate of 10% on arbitrary basis, without any comparable case. Further, he relied on the submission made before the CIT(A). On the other hand, the ld CIT DR relied on the order of the CIT(A).
8.2 The Assessing Officer and ld. CIT(A) have noticed that the sales and purchases recorded in diaries and other documents seized during the course of search are more than the sales and purchases shown by the assessee in the regular return filed. The Assessing Officer confronted all the seized documents containing purchase and sale of transaction to the assessee and on the basis of which the assessee prepared year-wise lists of sales and purchases, which the assessee further, revised in the books of account prepared and produced before the Assessing Officer. Though the Assessing Officer rejected books of account, however, took the figure of sales from those books of account and after applying net profit ratio, computed the unaccounted net profit at Rs. 3,55,581/- and held the same as undisclosed income of the assessee.
18
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 8.2 The ld. CIT(A) though accepted the figure of sales taken by the Assessing Officer, however, he proposed uniform net profit rate of 10% and issued a notice to the assessee proposing enhancement of the income. After providing opportunity to the assessee and taking into consideration the disallowance for expenses in cash exceeding the limit provided in Section 40A(3) of the Act, ,the net profit rate declared by the assessee in regular return of income and also as per the revised and manipulated books for the block period, , he applied the net profit rate of 10% over the sales and labour charges shown by the assessee for the block period and after allowing the profit already declared by the assessee in the regular return of income, he made the addition of Rs. 9,45,485/-, as against the addition of Rs. 3,55,581/- made by the Assessing Officer. The relevant findings of the ld. CIT(A) are reproduced as under:
" 6.5 The appeal could not be decided earlier as there was change of incumbent of the o/o CIT(A)-XI. Then there was some delay in getting remand report. The appellant's AR had also sought adjournment on various occasions. But there cannot be denial of justice when appellant is being granted proper opportunity on all issues. Moreover till the appeal order is passed no decision is taken hence there cannot be any injustice. Further when decision has not been taken where is the question of review? The fact is that the appellant's AR was duly conducting hearings till Nov 07 without any objection. Even the books & documents were produced. However it was only when enhancement notice was issued on specific matters pointing out discrepancies, that the non-compliance began & all kind of objections came to be taken. Since the AR had filed written reply but did not attend to produce books & other documents, he was contacted on phone & was requested to attend the hearing to produce books. The hearing was fixed on 31/12/07 with consent of Mr Gurjeet Singh. However even on 31/12/07 there was no compliance. In the interest of justice one more opportunity was given by letter dtd 31/12/07 to produce books of accounts. In response to that Mr. R S Negi Adv another AR attended & produced books of accounts.
6.6 I shall first take up third issue of disallowance u/s 40A(3). In old provisions entire payment exceeding the prescribed limit was disallowed.19
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 However there was Rule 6DD(j) which specified certain circumstances needing cash payment by assessee. The AO then had discretion not to invoke sec 40A(3) if those conditions were fulfilled. However after amendment of sec 40A(3) wef 1/4/96 the discretion of the AO has' been taken away & in case of default 20% of the cash payment is to be disallowed straight unless the payment falls in any of the specific exemptions provided in Rule 600. The decisions relied upon by the AR are not relevant and not applicable to this case because in all cases the old provisions of sec 40A(3) were applicable when rule 600(j) was in existence. Moreover the basis of the decision (that in case of estimate of profit specific disallowance u/s 40A(3) is not to be made) is that all factors including cash payments are treated to have been considered while making estimate. Hence separate disallowance is not to be made u/s 40A(3). In effect present sec 40A(3) means that purchases/expenses which have been paid in cash exceeding prescribed limit are to be treated to have been inflated by 20% (since 20% of the amount has to be disallowed). Therefore if the ratio of these decisions is applied, even without accepting the same, the profit rate to be applied to estimate the NP has to be adopted taking into account the cash payments in excess of limit in sec 40A(3).
6.7 Now I come to estimation of net profit of the unaccounted business which is point No (i) of enhancement notice. In the notice 10% NP rate was proposed. This was in the light of NP rates of 37.54%, 6.26%, 20.93% & 20.05% from AY 99-00 to 02-03. Everi as per revised & manipulated books the NP rate for AY 98- 99 was 11.51%. The appellant has not made any submissions against this 10% NP rate for estimation of profit except that it should be reasonable & rational. Considering the NP rates in appellant's own accounts filed with original return, NP rate of 10% appears to be quite reasonable. Moreover as discussed in the para 6.6 the fact of cash payments in excess of Rs 20000 made in contravention of see 40A(3) is also to be considered while estimating net profit. Accordingly considering the fact of cash payments in excess of Rs 20000, the NP rate of 10% proposed in the enhancement notice is applied in the case of appellant to estimate the net profit from business. Moreover the turnover for this purpose has been taken to include labour charges shown to be received. This is because if labour charges are treated as direct income, the profit will increase substantially. On the other hand if these are treated as part of estimated profit then excluding such direct income, there would be effectively huge trading loss in the kite business every year. Hence most reasonable way is to treat the labour charges also the turnover for estimation. The profit for various years as per the above estimate is worked out as under:
Astt. Turnove Profits in Turnover Labour Total Business Undisclo Year r in return** in charges turnover profit @ sed profit return * books** 10% (g-c) a b c d e f g e 20 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 99-00 93500 35100 462000 105000 567000 56700 21600 00-01 115000 7210 2176967 49842 2226809 222681 215471 01-02 92650 19400 1153353 215680 13692033 136903 117503 02-03 175000 35096 3757316 262180 4019496 401950 366854 03-04* NA 0 2145288 95280 2240568 224057 224057 Total 945485 From the estimated profit for various years, the net profit already declared in the accounts filed with original return is excluded to arrive at the undisclosed income from business in last column of the above table. Accordingly the addition of Rs 3,55,581 made by the AO is to be replaced by Rs 9,45,485 which results in enhancement of undisclosed income."
8.3 In view of above, we find that the ld. CIT(A) as taken into consideration all the aspects while arriving at his conclusion including the fact of cash expenditure, the net profit rate declared by the assessee in regular return, net profit rate declared in the books of account prepared subsequently after search and the sales recorded in seized papers as worked out by the assessee including the labour charges. We do not find any infirmity in the order of the ld. CIT(A) and the finding are well reasoned, thus, we uphold the same. Accordingly, this ground of the assessee is dismissed.
9. Ground no. 5 is regarding addition of Rs. 40,000/- under Section 69 on account of purchase of Kisan Vikas Patra in the joint name of wife of the assessee.
9.1 The ld. Authorized Representative submitted that the money was invested out of the 'Mehar' money of the wife and thus the investment duly stood explained and no addition was required to be made in the hands of the assessee. 9.2 On the other hand, ld. CIT(DR) relied on the findings of the lower authorities.
21
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 9.3 We have heard the rival submission and perused the material on record. The ld. CIT(A) has decided the issue in paras 8.1 to 8.3 of his order. The ld. CIT(A) has considered all the submission of the assessee in respect of the Mehar money of the wife. However, the same was not found acceptable by him. The findings of the CIT(A) in this respect are as under:
"8.3 I have carefully considered the submissions made on behalf of appellant. I have seen the copy of KVPs filed in paperbook. It is noted that the investment in KVPs (4 numbers of Rs. 10,000 each) was made on 29/4/00. It is also noted that the KVPs stand in joint names of appellant & Mrs. Zahida Khan. The first name is that of appellant. If the amount was out of Mehar received by Muslim women at the time of marriage, it would have been invested in her individual name. It is a kind of her personal property similar to Stridhan for Hindu ladies. Moreover the appellant has not produced any evidence to show that the investment was out of maturity proceeds of earlier KVPs. In view of this the investment in KVPs remains unexplained and accordingly the addition of this amount as undisclosed income is confirmed. However, the undisclosed income on this a/c is related to AY 01-02 & not 02-03 as mentioned in assessment order."
9.4 We find from the above that the ld. CIT(A) has passed a well reasoned order on this issue and we do not find any infirmity in his findings. Accordingly, this ground of the assessee is dismissed.
10. Ground no. 6 is regarding addition of Rs. 1,54,770/- for the purchase of Santro Car. The ld. Authorized Representative explained that the investment on the said car was duly explained on the basis of the availability of cash in the cash book which was produced before the Assessing Officer in the course of assessment proceedings. The ld. CIT(DR), on the other hand, relied on the order of the ld. CIT(A).
22
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 10.1 We have heard rival submission and perused the material on record. The ld. CIT(A) has already mentioned the defects in the cash book prepared by the assessee and already held the books of account unreliable and rejected. The relevant paragraphs of the order of the ld. CIT(A) are reproduced as under:] "9.1 Ground No 5 is against addition of Rs 1,54,770 being cash payment for financing the purchase of Santro car on installments. It was found by the AO that the appellant had made this payment to M/s Orien Automobiles Delhi Pvt Ltd on 25/4/02 for acquisition of Santro car. When asked to explain the source of payment it was stated that the payment was made out of cash available in business and the same was reflected in the cash book. The AO did not accept the explanation since the books of account had been rejected. He therefore, treated the sum of Rs 1,54,770 as undisclosed income of the appellant for FY 02-03 . 9.2 In the appeal proceedings again the reliance was placed on the books of account and it was submitted that the payment was duly reflected therein. The payment was made out of business funds and cannot be treated as undisclosed income. The appellant was not having any other source of business except the kite business.
9.3 I have carefully considered the submissions made by the appellant. The rejection of books of account by the AO has been upheld as per discussion in the earlier paragraphs of the order. The books have been proved to be manipulated and prepared with a particular motive to explain where discrepancies found during the search process. The fact that the books were manipulated to inflate the cash balance is proved by the results of test check of books conducted by me personally. During test check it was found that entry of cash receipt of Rs 16,500 on 16/4/02 in the name of Arifbhai was wrong as there was no such noting in seized diary. Similarly cash receipt of Rs 47,000 is shown on 23/4/02 from Rehanbhai whereas amount noted in seized dairy is only Rs 7000. Fictitious loan from one Bano Begum is also shown on 20/4/02. It may therefore be seen that the appellant had made incorrect/fictitious entries in the books just to inflate cash on 25/4/02 the date when cash payment for Santro car was made. No other explanation about the source of cash except reliance on books of account has been given. Accordingly the addition of Rs 1,54,770 as undisclosed income for AY 03-04 is confirmed."
23
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 10.2 We find that the order of the ld. CIT(A) on the issue in dispute is well reasoned and no interference is required by us in his findings. Accordingly, we uphold the same and dismiss this ground of appeal of the assessee.
11. In ground No. 7, the assessee has challenged the addition of Rs. 1 lakh upheld by the ld. CIT(A) for unexplained investment in the stock. The Assessing Officer held that the stock of Rs. 1,50,962/- during the course of search as unexplained as the assessee could not substantiate the same with the help of books of account. Before the ld. CIT(A), the assessee submitted that complete books of account were produced before the Assessing Officer, however, the same were not accepted. The ld. CIT(A) after allowing Rs. 50,952/- as legitimate stock of business , held the balance amount of Rs. 1 lakh as unexplained stock/undisclosed income of the assessee. The relevant findings of the ld. CIT(A) are reproduced as under:
"10.3 I have carefully considered the submissions made by the appellant. The appellant's claim that the books of account were maintained on regular basis and were not available at the time of search because they were taken by part time accountant is factually incorrect. It has been proved that the appellant was not maintaining any books of account regularly. The computerized books were prepared subsequent to the search and manipulated/adjusted with a particular motive to explain the material found during search. If the books were available with the part time accountant they could have been produced before the ADIT immediately after the search. In the earlier part of this order it has also been proved that there are large scale manipulated/adjustments in the books particular regarding dates of transactions which rendered the books of unrealizable. Hence these books can also not be treated as the basis for explaining the stock found during the search. Further it is noted that huge stock in the range of Rs 16 lacs was shown in books which proves that the books are manipulated. The stock at the end of accounting year has to be put after physical verification and cannot be balancing figure as claimed by the appellant. Therefore appellant's explanation regarding the stock found during the search is not acceptable. However 24 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 even if books are rejected as unreliable, it cannot be said that no stock in any business would be available, even though the peak sale season was over. In my view a sum of Rs 50,952 can be treated as legitimate stock of business and considered as explained. The addition of undisclosed income on this count is reduced to Rs 1,00,000 only."
11.1 From the facts and circumstances of the case, it is evident that the assessee was engaged in sales and purchases of kites which did not appear in the return of income filed and thus certain amount of stock was not as per the trade figure reported in return of income. We are of the considered opinion that the ld. CIT(A) has allowed a reasonable amount of stock towards legitimate stock of business and the additions sustained by him is reasonable and justified. Accordingly, we uphold the finding of the ld. CIT(A) and dismiss this ground of appeal of the assessee.
12. In ground no. 9, the assessee has raised issue for various additions which can be made of the real income and only to the extent of source of income and not beyond that.
12.1 We have already considered various arguments of the assessee in respect of other grounds of addition and thus this ground of the assessee is rendered infructuous and is dismissed.
13. In ground no. 10, the assessee has raised the issue of not allowing initial investment of Rs. 1,50,000/- and the profit ploughed back by the assessee in the business. In this respect, the ld. Authorized Representative submitted that the benefit of profits of each year should be allowed to the assessee against respective investment.
25
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 13.1 Ld. CIT(DR), on the other hand, submitted that the ld. CIT(A) has already allowed the benefit of telescoping without establishing the link between the income and the investment.
13.2 We find that the ld. CIT(A) has duly considered the investments which preceded the income for the purpose of telescoping and wherever there is no income to explain the investment, he has held the same as unexplained investment. Accordingly, he has not allowed the set off of undisclosed investment of Rs. 3,92,700/- , however, for the subsequent investments, where ever the income was available for set off of investment, he has allowed the setoff. The relevant para of the CIT(A)'s order is reproduced as under:
"11.1 In ground No 7 the appellant has made a request, without prejudice to the submission in respect of specific issues, to allow telescoping of various additions that were confirmed in appeal. In other words what is contended in appeal is that the additions are in the form of undisclosed income or unexplained investment/expenditure. Addition of both, the income as well as expenditure/investment is not justified because the investment has been made out of income itself. Therefore only higher of the two should be taxed. Even in the last reply to the enhancement notice this plea was repeated.
11.2 I have considered the alternative plea of the appellant. The contention is based on the logic that any investment or expenditure is made out of income earned. Therefore both the income and the investment/expenditure should not be brought to tax otherwise it will amount to double addition. This is because the income from whatever source & based on whatever document, denotes inflow of funds. On the other hand the investment or expenditure involves outflow or utilization of such funds. If income is earned first, the expenditure/investment can obviously be said to have been made out of such income. In principle the argument of the appellant appears to be quite reasonable & should be accepted.
11.3 However what is to be noted is that the set off or telescoping of income with expenditure can be allowed only if it can be shown prima-facie that the investment could have been made out of income. In other words if the income which is claimed to be source of some investment precedes it then only it can be set off. If the income is earned after a particular investment has been made, it will not be possible to set off the two against each other because there was no 26 IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 inflow of funds before the outflow. Therefore apart from the broad categorization of income and expenditure/investment, the chronological order or the period relating to each item is also to be taken into consideration. The various items of inflow and outflow on the basis of which additions have been confirmed/made in this order are shown in the following table in chronological order:
S. Items Date/FY/Peri Income Investment/
No. od expenditure
1. Unexplained investment in 98-99 --- 3,92,700
purchase
2. Undisclosed business profit 98-99 21,600 ---
3. Undisclosed business profit 99-00 2,15,471 ---
4. Unaccounted Investment in 29/4/00 ---- 40,000
KVPS
5. Undisclosed business profit 00-01 1,17,503 ---
6. Undisclosed business profit 01-02 3,66,854 ---
7. Unacocunted cash payment 25/4/02 --- 1,54,770
for acquiring Centro car
8. Undisclosed business profit 1/4/02- 2,24,057 ---
16/8/02
9. Cash found at the residence 16/08/02 --- 9,27,000
during search & seizure
10. Unaccounted stock found 16/08/02 --- 1,00,000
during search
Total 9,45,485 15,14,470
It may be noted that there is no income (inflow of funds) before the undisclosed investment of Rs 3,92,700. Therefore this amount cannot be set off with any income. Thereafter there is sufficient income before any other undisclosed investment shown in the table. Therefore income (inflow) and expenditure/investment (outflow) can be set off against each other and only higher of the two is to be taxed. The inflow is Rs 9,45,485 whereas outflow is Rs 11,21,770 (Rs 15,14,470 - 3,92,700). Hence investment to the extent of Rs 9,45,485 can be treated to have been made out of income earned. Hence both income & investment may not be taxed. Investment being higher of the two is only brought to tax. Therefore the total undisclosed income to be taxed therefore works out to Rs 15,14,470 (Rs 3,92,700 +11,21,770) in view of the telescopic benefit allowed to the appellant. The AO is directed to compute the tax accordingly."27
IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002 13.3 In view of above, we do not find any infirmity in the finding of the ld. CIT(A) on the issue in dispute and he has allowed the telescoping after due consideration of the period of investment and income. Accordingly, this ground of the assessee is also dismissed.
14. Ground no. 11 is consequential to the above grounds of appeal and ground of nos. 12 & 13 are general in nature, therefore, not required to adjudicate upon.
15. In the result, the appeal of the assessee is dismissed. IT(SS)A No. 54/ Del/ 2008
16. The grounds of appeal raised in the appeal of the Revenue are as under:
"1. The order of the ld. CIT(A) is not correct in law and facts.
2. Whether the Ld. CIT(A)-XI New Delhi is justified in facts and in the law in directing the AO to allow the appellant the benefit of the telescopic method, thereby allowing the assessee to set off his investments against the undisclosed income with establishing the accounting link between the two.
3. The appellant craves leave to add, alter or amend any all of the grounds of appeal before or during the course of hearing of the appeal."
17. The ground No. 1 and 3 of the appeal are general and hence, no adjudication required. The ground No. 2 of the appeal has already been discussed and adjudicated in ground No. 10 of the assessee's appeal in IT(SS)A No. 39/Del/2008, Accordingly, following the decision given there, this ground of the Revenue is dismissed.
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IT(SS)A No. 39 & 54/Del/2008 Block period: 01.04.1996 to 16.08.2002
18. In the result, the appeal of the Revenue is dismissed. The decision is pronounced in the open court on 9th March, 2016.
Sd/- Sd/-
(I.C. SUDHIR) (O.P. KANT)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 9th March, 2016.
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
29
IT(SS)A No. 39 & 54/Del/2008
Block period: 01.04.1996 to 16.08.2002
Sl. No. Particulars Date
1. Date of dictation (hand written ) 24.02.2016
2. Date on which the draft is placed 25.02.2016
before the Dictating Member
3. Draft placed before the other Member
4. Approved draft comes to the Sr. PS/PS
5. Kept for pronouncement on
6. Final order received after
pronouncement
7. File sent to the Bench Clerk
8. Date on which files goes to the Head
Clerk
9. Date on which file goes to the Assistant
Registrar
10. Date of dispatch of order