Sh. Ravinder Gupta, Patiala v. JCIT, Patiala

ITA 1004/CHANDI/2010 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 100421514 RSA 2010
Assessee PAN ABJPG7085M
Bench Chandigarh
Appeal Number ITA 1004/CHANDI/2010
Duration Of Justice 1 year(s) 8 month(s) 18 day(s)
Appellant Sh. Ravinder Gupta, Patiala
Respondent JCIT, Patiala
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-03-2012
Date Of Final Hearing 06-03-2012
Next Hearing Date 06-03-2012
Assessment Year 2007-2008
Appeal Filed On 12-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO.956/CHD/2010 (ASSESSMENT YEAR : 2007-08) THE A.C.I.T. VS. SH.RAVINDER GUPTA PROP.CAPITAL TOOL CIRCLE PATIALA INDUSTRIES 7-A INDUSTRIAL ESTAT E SIRHIND ROAD PATIALA. PAN: ABJPG7085M AND ITA NO.1004/CHD/2010 (ASSESSMENT YEAR : 2007-08) SH.RAVINDER GUPTA PROP.CAPITAL TOOL VS. THE A.C.I .T. INDUSTRIES 7-A INDUSTRIAL ESTATE SIRHIND ROAD C IRCLE PATIALA PATIALA. PAN: ABJPG7085M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TEJ MOHAN SINGH DEPARTMENT BY : SHRI MANJIT SINGH DR DATE OF HEARING : 06.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 O R D E R PER SUSHMA CHOWLA J.M. : THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSE SSEE ARE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) PATIALA DATED 07.05.2010 RELATING TO ASSESSMENT YEAR 2007-08 AGA INST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (I N SHORT THE ACT). 2. THE CROSS APPEALS FILED BY THE REVENUE AND THE A SSESSEE INVOLVING SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DIS POSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE REVENUE IN ITA NO.956/CHD/2010 HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL: 2 2 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION ON A/C OF DISCREPANCIES IN THE BOOKS OF A/C TO RS.4 49 876/- ONLY AS AGAINST THE TOTAL OF RS.27 6 2 664/- IGNORING THAT THE ASSESSEE HAD FAILED TO MAINTAIN QUANTITATIVE TALLY OF RAW MATERIALS CONSUMED VIS-A-VIS FINISHED GOODS OBTAINED AND THE RESULTANT SCRAP GENERATED IN THE MANUFACTURING PROCESS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN RESTRICTING THE ADDITION TO THE EXTENT OF RS.4 00 0 00/- ONLY OUT OF THE TOTAL ADDITION OF RS.21 61 000/- MADE BY THE AO ON A/C OF SALES MADE OUTSIDE THE BOOKS OF A/C OF THE SCRAP GENERATED @ 70% OF THE RA W MATERIALS CONSUMED DURING THE MANUFACTURING PROCESS WITHOUT APPRECIAT ING THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE SALES AS SHOWN BY HI M. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORD ER PASSED BY THE CIT(A) RESTRICTING THE ADDITION TO THE EXTENT OF RS.4 00 0 00/- ONLY OUT OF THE TOTAL ADDITION OF RS.21 61 000/- MADE BY THE AO ON A/C OF SALES MADE OUTSIDE THE BOOKS ON A/C OF THE SCRAP GENERATED IN THE MANUFAC TURING PROCESS ON THE BASIS OF THE PAST HISTORY OF THE CASE IS BAD BECAU SE NO SUCH ANALYSIS HAD EVER BEEN DONE BEFORE IN T HE CASE AND ALSO THE PR INCIPLE OF RES-JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN GIVING RELIEF TO THE ASSESSEE ON THE ISSUE OF SALES MAD E OUTSIDE THE BOOKS ON A/C OF THE SCRAP GENERATED IN THE MANUFACTURING PROCESS BE CAUSE HE FAILED TO APPRECIATE THAT THE ASSESSEE WAS ENGAGED IN MANUF ACTURING OF PRECISION TOOLS OF GIVEN SPECIFICATIONS/DIMENSIONS FROM HIGH SPEED (HS) STEEL WHICH INVOLVES GREATER GENERATION OF SCRAP I.E. APPROXIMA TELY 70% AND THE SCRAP TOO IS OF HIGH VALUE BEING OF HS STEEL. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.I0 79 458/- MADE BY THE AO ON A/ C OF CONSUMPTION OF RAW MATERIAL BEING OUTSIDE THE BOOKS OF A/C OVERL OOKING THE FACT THAT THE ASSESSEE HAD HIMSELF ADMITTED IN HIS STATEMENT TH AT MINIMUM PRODUCTION CYCLE IS OF 4-5 WEEKS I.E. ONE MONTH ON THE BASIS OF WHICH THE AO HAD CALCULATED THE TOTAL PRODUCTION AND RAW MATERIAL REQUIRED AND CONSUMED FOR THE SAME. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CLT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4 48 240/- MADE BY THE AO ON A/C OF DISALLOWANCE U/S 40(A)(LA) WITHOUT APPRECIATING THAT THE ASSESSEE HAD FAILED T O DEDUCT TDS AS PER SECTION 194C ON THE PAYMENTS MADE TO THE JOB CONTRACTOR IN LIEU OF THE CUSTOMIZED GOODS SUPPLIED AS PER SPECIFICATIONS/DIMENSIONS GIVEN BY THE ASSESSEE. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CLT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4 48 240/- MADE BY THE AO ON A/C OF DISALLOWANCE U/S 40(A)(LA) AS THE CLT(A) HAS NOT CONTROVERTED THE FINDING OF THE AO THAT THE ASSESSEE HAD IMPLIEDLY ENTERED INTO WORK CONTRACT WITH THE SUPPL IER IN RESPECT OF SUPPLY MADE TO THE ASSESSEE OF THE CUSTOMIZED ITEMS AS PER SPECIFICATIONS /DIMENSIONS GIVEN BY THE ASSESSEE. 3 3 8. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CLT(A) HAS ERRED IN GIVING RELIEF TO THE ASSESSEE ON A/C OF DISALLOWANCE U/S 40(A)(L A) INASMUCH AS HE FAILED TO APPRECIATE THAT THE PRIMARY OBJECT OF THE TRANSACTI ON AND THE INTENTION OF THE PARTIES WHILE ENTERING INTO IT WAS FOR WORK CONTRAC T WHICH IS EVIDENT FROM THE BILLS OF THE SUPPLIERS I.E. APPROXIMATELY 60% OF THE AMOU NT OF THE BILLS COMPRISED OF VALUE ADDITION IMPARTED BY THE SUPPLIERS. 4. THE ASSESSEE IN ITA NO.1004/CHD/2010 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. C.I.T.(A) IS NOT JUSTIFIED IN UPHOL DING THE REJECTION OF BOOKS OF ACCOUNT. 2. THAT WITHOUT PREJUDICE TO ABOVE THE LD. CIT(A) IS NOT JUSTIFIED IN APPLYING FLAT RATE OF G.P. AT 22% OF THE SALES. 3. THAT WITHOUT PREJUDICE TO GROUND NUMBER 1 ABOVE THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.4 00 000/- ON ACCOU NT OF SALE RATE OF SCRAP WITHOUT ANY EVIDENCE ON RECORD TO THIS EFFECT. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE MANUFACTURING OF CUTTING TOOLS USING MAINLY HIGH SP EED STEEL. THE MAIN PRODUCT MANUFACTURED BY THE ASSESSEE INCLUDED GEAR CUTTER GEAR SHAPER CUTTERS GEAR SHAVING CUTTER MASTER GEAR AND MILLI NG CUTTERS INVOLVING HIGH DEGREE OF PRECISION. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE EXTENSIVE ENQUIRIES IN R ESPECT OF VARIOUS ASPECTS OF THE MANUFACTURING PROCESS UNDERTAKEN BY THE ASSESSEE AND THE MANUFACTURING EXPENSES INCURRED BY THE ASSESSEE. THE SUBMISSION OF THE ASSESSEE WAS ALSO RECORDED ON 8.9.2009. THE AS SESSING OFFICER ALSO TOOK NOTE OF THE SALES AND PURCHASES MADE BY THE AS SESSEE INCLUDING THE WORKWISE POSITION AND STOCK OF RAW MATERIAL AND COM PUTED THE EXCESS STOCK IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE WHY THE BOOKS OF ACCOU NT SHOULD NOT BE REJECTED IN VIEW OF THE PROVISIONS OF SECTION 145(3 ) OF THE ACT. SHOW CAUSE NOTICES ISSUED BY THE ASSESSING OFFICER AND T HE REPLIES OF THE ASSESSEE FILED TO EACH OF THE SHOW CAUSE NOTICES EX PLAINING MANUFACTURING PROCESS THE POSITION OF CLOSING STOC K AS ON 31.3.2007 AND 4 4 ALSO THE VARIANCE IN MONTHWISE CONSUMPTION OF ELECT RICITY AND PAYMENT OF WAGES FORMED THE MAJOR PART OF THE ASSESSMENT OR DER STARTING FROM PAGE 13 TO 32 OF THE PAPER BOOK. THE ASSESSING OFF ICER REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR THE FOLLOWING REASONS: A) NON-MAINTENANCE OF STOCK REGISTER; B) NON-MAINTENANCE OF PRODUCTION REGISTER; C) NON-DOCUMENTARY EVIDENCE OF WASTAGE CLAIM; D) NON-MAINTENANCE OF QUANTITATIVE TALLY OF SALES AND PURCHASES IN TERMS OF WEIGHT; E) THE ASSESSING OFFICER THEREAFTER COMPUTED THAT T HERE WAS NEGATIVE STOCK IN THE MONTH OF JULY 2006 EVEN AFTE R CONSIDERING THE WORK IN PROGRESS. F) FURTHER THERE WAS VARIANCE IN THE YIELD OF 30% O VER THE WHOLE YEAR. THE ASSESSEE WAS FOUND NOT TO HAVE MAINTAINE D THE DETAILS OF CONSUMPTION OF RAW MATERIAL PRODUCTION OF FINISHED GOODS GENERATION OF SCRAP AND YIELD OF FINISHED GOODS. T HE CLAIM OF THE ASSESSEE OF 70% WASTAGE INVOLVED IN THE MANUFACTURI NG PROCESS WAS FOUND TO BE WITHOUT ANY EVIDENCE IN THE ABSENCE OF ANY STOCK OR PRODUCTION RECORD ON DAY-TO-DAY BASIS. G) THE VARIANCE IN CONSUMPTION OF ELECTRICITY AND P AYMENT OF WAGES ON MONTH TO MONTH BASIS DID NOT COMMENSURATE WITH THE PRODUCTION AND THE ASSESSEE WAS UNABLE TO SUBSTANTI ATE THE REASONS FOR THE AFORESAID VARIANCE IN CONSUMPTION OF ELECTR ICITY. SIMILARLY VARIANCE IN PAYMENT OF MONTHLY WAGES WAS FOUND NOT TO COMMENSURATE WITH THE PRODUCTION. 6. THE ASSESSING OFFICER ACCORDINGLY REJECTED THE B OOKS OF ACCOUNT OF THE ASSESSEE INVOKING THE PROVISIONS OF SECTION 145 (3) OF THE ACT AND 5 5 HELD THAT THE ASSESSEE HAD UNDERSTATED THE PRODUCTI ON FOR THE PURPOSES OF INCOME TAX. THEREAFTER ADDITION WAS MADE ON ACCOUN T OF GP ON UNACCOUNTED PRODUCTION AND CONSEQUENT SALES AMOUNTI NG TO RS.27 62 664/-. FURTHER ADDITION WAS MADE ON ACCOU NT OF SCRAP AMOUNTING TO RS.21 61 100/-. THE ASSESSING OFFICER FURTHER MADE THE ADDITION ON ACCOUNT OF INVESTMENT IN PURCHASE OF RA W MATERIAL AMOUNTING TO RS.10 79 458/-. ANOTHER ADDITION WAS MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF NON-DEDUCTION OF TDS ON JOB WORK PAID OF RS.4 48 240/-. THE CASE OF THE ASSESSEE WAS THAT IT HAD PURCHASED SEMI-FINISHED GOODS FROM THE SAID PARTIES AND WAS NOT LIABLE TO DEDUCT TDS UNDER SECTION 194C OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ABOVE SAID PAYMENTS WERE FOR JOB WORK ON BEHALF OF THE AS SESSEE AND CONSEQUENTLY PROVISIONS OF SECTION 194C OF THE ACT WERE ATTRACTED AND IN VIEW OF NON-DEDUCTION OF TAX AT SOURCE THE PROVISI ONS OF SECTION 40A(IA) OF THE ACT WERE INVOKED AND THE SAID AMOUNT OF RS.4 48 240/- WAS DISALLOWED. 7. THE CIT (APPEALS) UPHELD THE REJECTION OF BOOKS OF ACCOUNT IN VIEW OF VARIOUS DISCREPANCIES POINTED OUT BY THE AS SESSING OFFICER. THE ASSESSING OFFICER FOUND THE ASSESSEE NOT TO HAVE MA INTAINED STOCK REGISTER AT VARIOUS STAGES OF PRODUCTION AND PROCES S OF RAW MATERIAL AND ALSO AT THE TIME OF DISPOSAL THEREOF. THE SHORTAGE OCCURRING IN THE MANUFACTURING PROCESS COULD NOT BE SUBSTANTIATED BY THE ASSESSEE WITHOUT ANY DOCUMENTARY EVIDENCE. FURTHER THERE WAS VARIAN CE IN PRODUCTION OF FINISHED GOODS VIS--VIS THE CONSUMPTION OF ELECTRI CITY AND WASTAGE. THE CIT (APPEALS) NOTED THAT FOR QUANTIFICATION PURPOSE S THE ASSESSING OFFICER HAD MADE THE SAID FACT AS A MAIN PLANK. IN VIEW THEREOF THE CIT (APPEALS) HELD THE ASSESSING OFFICER TO BE JUSTIFIE D IN REJECTING THE BOOKS OF ACCOUNT. 6 6 8. THE CIT (APPEALS) WAS OF THE VIEW THAT THE PRODU CTION ESTIMATED ON THE BASIS OF CONSUMPTION ELECTRICITY WAS NOT THE CORRECT BASIS ADOPTED BY THE ASSESSING OFFICER TO COMPUTE THE INCOME IN T HE HANDS OF THE ASSESSEE. THE CIT (APPEALS) FURTHER CALLED FOR THE INFORMATION IN RESPECT OF THE TURN OVER GROSS PROFIT AND GP RATE SHOWN BY THE ASSESSEE FOR THE YEAR UNDER APPEAL AND THE PRECEDING YEARS A ND IN VIEW OF THE PAST HISTORY OF THE CASE AND ALSO IN VIEW OF THE DISCREP ANCIES POINTED OUT BY THE ASSESSING OFFICER APPLIED THE RATE OF PROFIT O F 22% TO THE TOTAL TURN OVER OF RS.2.39 CRORES TO COMPUTE GROSS PROFIT IN T HE HANDS OF THE ASSESSEE. AS AGAINST THE ADDITION OF RS.27 62 664/ - MADE BY THE ASSESSING OFFICER THE CIT (APPEALS) UPHELD THE ADD ITION OF RS.4 49 876/-. 9. SECOND GRIEVANCE OF THE ASSESSEE WAS AGAINST THE ADOPTION OF SELLING PRICE OF SCRAP @ RS.80/- PER KG. BY THE ASS ESSING OFFICER RESULTING IN ADDITION OF RS.21 61 100/-. 10. BEFORE THE CIT (APPEALS) IT WAS POINTED OUT BY THE ASSESSEE THAT ONLY OBJECTION OF THE ASSESSING OFFICER WAS THE REA SONING THAT THE RAW MATERIAL USED BY THE ASSESSEE WAS SPECIAL TYPE STEE L WHICH DOES NOT CATCH RUST. HOWEVER AS A MATTER OF FACT HIGH SPE ED STEEL LIKE OTHER STEEL GET RUSTED OVER A PERIOD OF TIME. IT WAS POI NTED OUT THAT THE ADDITION IN THE HANDS OF THE ASSESSEE WAS MADE ON P RESUMPTIVE BASIS WITHOUT FINDING ANY FAULT WITH THE ACCOUNT BOOKS OF THE ASSESSEE. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD CALLED THE PARTIES TO WHOM SCRAP HAD BE EN SOLD AND EXTENSIVE ENQUIRIES WERE MADE AND NO DISCREPANCIES WERE FOUND IN THE ACCOUNTS OF THE SAID PARTIES. FURTHER THERE WAS NO BASIS FOR A SSUMING THE SELLING PRICE OF SCRAP AT RS.80/- PER KG. THE ASSESSING OF FICER ALSO MADE ADDITION ON ACCOUNT OF GENERATION OF SCRAP ON EXTRA PRODUCTION. THE CIT 7 7 (APPEALS) OBSERVED THAT NO ADDITION IS WARRANTED ON ACCOUNT OF ADDITIONAL PRODUCTION OF SCRAP AS THE ASSESSING OFF ICER HAD NOT BROUGHT ON RECORD EVIDENCE TO SHOW THAT EXTRA PRODUCTION WA S MADE BY THE ASSESSEE. ACCORDINGLY ADDITION OF RS.7 99 456/- W AS DELETED BY THE CIT (APPEALS). IN RESPECT OF THE BALANCE ADDITION OF R S.13 61 744/- THE CIT (APPEALS) NOTED THAT THE STATEMENTS OF TWO PERSONS CONNECTED WITH THE PURCHASE OF SCRAP WERE RECORDED BY THE ASSESSING OF FICER BUT HE COULD NOT FIND ANYTHING TO ESTABLISH THAT THE SCRAP WAS S OLD AT A HIGHER RATE AS STATED IN THE BILLS. THE CIT (APPEALS) ALSO NOTED FROM THE PERUSAL OF THE BILLS THAT THE SCRAP SALE WAS NOT IN TERMS OF QUANT ITY BUT IN TERMS OF LOTS. THE ASSESSEE HAD DECLARED THE SALE OF SCRAP AT RS.1 27 500/- I.E. @ RS.7 PER KG. THE QUANTUM OF SCRAP WAS NEITHER DISPUTED BY THE ASSESSEE NOR BY THE ASSESSING OFFICER AND THE ONLY ISSUE WAS ITS VALUATION. INTHE ABSENCE OF QUANTITATIVE DETAILS THE CIT (APPEALS) HELD THAT LEAKAGE OF SCRAP AND ITS PROPER SALE PRICE COULD NOT BE DETERM INED AND HENCE THE ADDITION OF RS.4 LACS WAS UPHELD ON THIS ACCOUNT AN D THE BALANCE OF RS.17 61 100/- WAS DELETED. 11. THE NEXT ADDITION BY THE ASSESSING OFFICER WAS ON THE ASSUMPTION THAT THE ASSESSEE WOULD HAVE CARRIED ON PRODUCTION OUTSIDE THE BOOKS OF ACCOUNT. THE CIT (APPEALS) VIDE PARA 4.2 NOTED THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAD THOROUGHLY CHECKED THE BOOKS OF ACCOUNT AND MADE EXTENSIVE ENQUIRIES FROM OUTSIDE S OURCES AND NOTHING ADVERSE WAS FOUND. THE CIT (APPEALS) DELETED THE A DDITION AS BEING CONSEQUENTIAL TO GROUND NO.1. THE CIT (APPEALS) HE LD THAT THE ESTIMATION OF PRODUCTION OUT OF THE BOOKS ON THE BA SIS OF CONSUMPTION OF ELECTRICITY ONLY HAD NOT BEEN ACCEPTED AND THERE WA S NO QUESTION OF ANY PURCHASE OF RAW MATERIAL FOR PRODUCTION. THE ADDIT ION OF RS.10 79 458/- WAS THUS DELETED BY THE CIT (APPEALS). 8 8 12. THE CIT (APPEALS) ALSO ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF PURCHASE OF SEMI-FINISHED GOODS BEING SI MPLE PURCHASE AND NOT BEING THE WORK CONTRACT ON WHICH TAX HAD TO BE DEDUCTED IN VIEW OF THE AMENDMENT OF THE DEFINITION OF WORK UNDER SECTI ON 194C OF THE ACT BY FINANCE ACT 2009. 13. THE ASSESSEE IS IN APPEAL AGAINST THE PART ADDI TION UPHELD BY THE CIT (APPEALS) AND ALSO REJECTION OF BOOKS OF ACCOUN T. 14. THE REVENUE IS IN APPEAL AGAINST THE RELIEF ALL OWED BY THE CIT (APPEALS). THE LEARNED D.R. FOR THE REVENUE POINTE D OUT THAT THE CIT (APPEALS) UPHELD THE REJECTION OF BOOKS OF ACCOUNT BUT THE DISALLOWANCES MADE BY THE ASSESSING OFFICER HAD BEEN RESTRICTED. IT WAS FURTHER POINTED OUT BY THE LEARNED D.R. FOR THE REVENUE THA T THE BOOKS OF ACCOUNT WERE REJECTED ON VARIOUS ACCOUNTS AND NOT O NLY ON THE BASIS OF NON-MAINTENANCE OF STOCK REGISTER. FURTHER THE EST IMATION OF TRADING RESULTS WAS MADE IN THE HANDS OF THE ASSESSEE BECAU SE OF VARIANCE IN CONSUMPTION OF ELECTRICITY WHICH RESULTED IN HIGHER PRODUCTION WHICH HAS NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. 15. IN RESPECT OF GROUND NOS. 2 TO 4 THE LEARNED D. R. FOR THE REVENUE POINTED OUT THAT THE GENERATION OF SCRAP WAS DEEMED PRODUCTION ADDITION ON WHICH POINT HAS BEEN SCALED DOWN TO RS.4 LACS. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THAT GROUND NO.5 WAS IN REL ATION TO EXCESS CONSUMPTION OF RAW MATERIAL WHICH IN TURN IS LINKED TO GROUND NO.1 RAISED BY THE REVENUE. IN RESPECT OF GROUND NOS.6 TO 8 THE LEARNED D.R. FOR THE REVENUE ADMITTED THAT NO RAW MATERIAL WAS S UPPLIED BY THE ASSESSEE FOR THE PRODUCTION OF SAID TOOLS. RELIANC E WAS PLACED ON THE ORDER OF ASSESSING OFFICER IN THIS REGARD. 9 9 16. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THA T GROUNDS OF APPEAL RAISED IN THE APPEAL OF THE ASSESSEE WERE SIMILAR T O GROUNDS OF APPEAL RAISED IN THE APPEAL OF THE REVENUE. THE LEARNED A .R. FOR THE ASSESSEE POINTED OUT THAT GROUND NO.1 OF ASSESSEES APPEAL W AS AGAINST REJECTION OF BOOKS OF ACCOUNT. IT WAS POINTED OUT THAT THE B OOKS OF ACCOUNT OF THE ASSESSEE WERE AUDITED AND DESPITE VERIFICATION MADE BY THE ASSESSING OFFICER ON VARIOUS ACCOUNTS THE PURCHASES AND SALE S HAVE NOT BEEN ACCEPTED BY THE ASSESSING OFFICER WHICH WERE COMPL ETELY VERIFIED BY THE ASSESSING OFFICER. FURTHER CONSUMPTION OF ELEC TRICITY WAS STATED TO BE AS PER THE BILLS AND IT IS POINTED OUT BY THE AS SESSEE THAT THE ENTIRE ADDITION WAS MADE IN REALM OF SUSPICION AND SURMISE S. IN RESPECT OF GROUND NO.1 RAISED BY THE REVENUE AND GROUND NO.2 R AISED BY THE ASSESSEE THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT BOOK RESULTS SHOWN BY THE ASSESSEE IN ENTIRETY SHOULD BE ACCEPTE D. IN RELATION OF GROUND NOS. 2 TO 4 RAISED BY THE REVENUE AND GROUND NO.3 RAISED BY THE ASSESSEE THE LEARNED A.R. FOR THE ASSESSEE STRESSE D THAT THERE WAS NO MERIT IN SUSTAINING THE ADDITION OF RS.4 LACS ON AC COUNT OF SCRAP. THE LEARNED A.R. FOR THE ASSESSEE FURTHER PLACED RELIAN CE ON THE ORDER OF CIT (APPEALS) IN RELATION TO GROUND NOS.6 TO 8 RAISED B Y THE REVENUE AGAINST INVOKING OF PROVISIONS OF SECTION 194C OF THE ACT. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ASSESS EE IS ENGAGED IN THE MANUFACTURING OF CUTTING TOOLS USING MAINLY HIGH SP EED STEEL. THE MAIN PRODUCT MANUFACTURED BY THE ASSESSEE INCLUDED GEAR CUTTER GEAR SHAPER CUTTERS GEAR SHAVING CUTTER MASTER GEAR AND MILLI NG CUTTERS INVOLVING HIGH DEGREE OF PRECISION. DURING THE YEAR UNDER CO NSIDERATION THE ASSESSEE HAD DECLARED TURN OVER AT RS.2.39 CRORES A S AGAINST RS.2.60 CRORES DECLARED DURING THE PRECEDING YEAR. THE GRO SS PROFIT DECLARED BY 10 10 THE ASSESSEE DURING THE YEAR WAS RS.48 14 078/- AS AGAINST RS.52 29 558/- DECLARED IN THE PRECEDING YEAR. THE GP RATE DECLARED DURING THE YEAR UNDER CONSIDERATION OF 20.12% WAS H IGHER THAN THE GP RATE OF 20.05% DECLARED DURING THE PRECEDING YEAR. IN THE EARLIER YEARS I.E. ASSESSMENT YEAR 2003-04 ON SALES OF RS.77.40 L ACS THE ASSESSEE HAD DECLARED GP RATE OF 21.07% AND IN ASSESSMENT YEAR 2 004-05 ON TURN OVER OF RS.1.28 CRORES THE GP RATE OF 21.02% WAS DECLARE D. FROM THE PERUSAL OF THE ORDER OF THE ASSESSING OFFICER WE FIND THAT EXTENSIVE VERIFICATION EXERCISE WAS CARRIED OUT BY THE ASSESSING OFFICER A ND SEVERAL SHOW CAUSE NOTICES WERE ISSUED AND PROPOSALS WERE SHOW CAUSED FOR ADDITION ON ACCOUNT OF PRODUCTION SALES OUTSIDE THE BOOKS OF A CCOUNT AND RAW MATERIAL UTILIZED FOR EXTRA PRODUCTION VALUE OF CL OSING STOCK AND ALSO CONSUMPTION OF ELECTRICITY AND WASTAGE VIS--VIS PR ODUCTION. THE ASSESSEE HAD NOT MAINTAINED ANY PRODUCTION OR STOCK REGISTER FOR THE MANUFACTURING ACTIVITIES CARRIED ON BY IT. THE CLA IM OF THE ASSESSEE THAT 70% WASTAGE WAS INVOLVED IN THE MANUFACTURING OF CU TTING TOOLS WAS NOT ACCEPTED BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY PRODUCTION RECORD ON DAY-TO-DAY BASIS. THE ASSESSING OFFICER HAD REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND RECOMPUTED THE INCOME IN THE HANDS OF THE ASSESSEE. THE CIT (APPEALS) ON THE OTHER H AND HAD UPHELD THE REJECTION OF BOOKS OF ACCOUNT VIDE PARA 2.6 OF THE APPELLATE ORDER AND WAS OF THE VIEW THAT THE ASSESSING OFFICER COULD NO T BASED HIS JUDGMENT PURELY ON CONSUMPTION OF ELECTRICITY. IT WAS FURTH ER OBSERVED BY THE CIT (APPEALS) THAT THE PERUSAL OF PAGE 25 OF THE ASSESS MENT ORDER WOULD REVEAL THAT THE ASSESSING OFFICER HAD WORKED OUT TH E ADDITION IN MOST CASUAL MANNER BY TAKING PRODUCTION OF FEW MONTHS IN WHICH THE CONSUMPTION OF ELECTRICITY WAS COMPARATIVELY LOW. AS PER THE CIT (APPEALS) THE ESTIMATION OF INCOME AFTER REJECTION OF BOOKS OF ACCOUNT WAS MADE WITHOUT ANY BASIS. HE WAS FURTHER OF THE VIEW THAT THE PAST 11 11 HISTORY OF THE CASE WHICH WAS NEITHER REFERRED TO B Y THE ASSESSING OFFICER NOR PRESSED INTO SERVICE BY THE ASSESSEE WA S THE BEST GUIDING FACTOR TO DETERMINE THE INCOME OF THE ASSESSEE. TH E CIT (APPEALS) HAS APPLIED A RATE OF PROFIT 22% ON TURNOVER OF RS.2.39 CRORES RESULTING IN ADDITION OF RS.4 49 876/-. 18. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD ISSUED VARIOUS SHOW CAUSE NOTICES TO THE ASSESSEE P ROPOSING TO MAKE ADDITION ON ACCOUNT OF DIFFERENT ISSUES. IN ONE SU CH SHOW CAUSE NOTICE THE PROPOSITION OF THE ASSESSING OFFICER WAS THAT T HE GP RATE SHOWN BY IT WAS ON LOWER SIDE AND THE ASSESSEE POINTED OUT THAT VARIANCE IN GP RATE WAS DUE TO CALCULATION ERROR BY THE ASSESSING OFFIC ER. THE SAID PROPOSAL WAS DROPPED BY THE ASSESSING OFFICER. IN THE NOTIC E DATED 17.9.2009 THE ASSESSING OFFICER HAD ALSO RAISED QUERIES REGARDING THE VALUE OF CLOSING STOCK AS ON 31.3.2007 AND ADDITION ON ACCOUNT OF DI FFERENCE IN VALUATION OF STOCK WAS PROPOSED BY THE ASSESSING OFFICER. TH E ASSESSEE IN REPLY POINTED OUT THAT THE SAID DIFFERENCE WAS CALCULATIO N ERROR MADE BY HIS OFFICE AND THE SAID POINT WAS ALSO DROPPED BY THE A SSESSING OFFICER. IN ANOTHER SHOW CAUSE NOTICE DATED 20.11.2009 THE ASSE SSING OFFICER HAD PROPOSED TO MAKE ADDITION OF RS.1.02 CRORES WHICH WAS ALSO DROPPED BY THE ASSESSING OFFICER. THE ASSESSEE HAD DURING THE COURSE OF ASSESSMENT PROCEEDINGS AT LENGTH EXPLAINED THE REASON FOR NON- MAINTENANCE OF DAY- TO-DAY STOCK/PRODUCTION REGISTER. THE PLEA OF THE ASSESSEE BEFORE THE CIT (APPEALS) VIDE PARA 2.5 AND 2.6 IN THIS REGARD WAS THAT THE ASSESSING OFFICER HAS CHECKED ALL THE SALE/PURCHASE BILLS PR OOF OF DISPATCH OF GOODS SUMMONED THE COURIER COMPANIES THROUGH WHOM THE GOODS WERE DISPATCHED MADE ENQUIRIES FROM THE SUPPLIERS AND A LSO THE CUSTOMERS. THE PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT DE SPITE THE ABOVE SAID EXERCISE CARRIED ON BY THE ASSESSING OFFICER THE BO OKS OF ACCOUNT OF THE 12 12 ASSESSEE WERE REJECTED ON SURMISES AND CONJECTURES OF NON-MAINTENANCE OF STOCK REGISTER PRODUCTION REGISTER VARIANCE IN THE CONSUMPTION OF ELECTRICITY ETC. THE ASSESSEE ALSO DURING THE COU RSE OF PROCEEDINGS HAD FURNISHED THE QUANTITATIVE TALLY OF SALES/PURCHASE AND ON THE BASIS OF THE SAME THE ASSESSING OFFICER HAD ALSO CALCULATED THE PURCHASE PRICE OF RAW MATERIAL AND SELLING PRICE OF FINISHED GOODS. 19. WE FIND NO MERIT IN THE ABOVE SAID REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE ON MERE SURMISES AND CONJECTURES. THE ESTIMATION OF PRODUCTION IN VIEW OF THE CONSUMPTION OF ELECTRICIT Y OF WAGES IN A MONTH DURING THE YEAR CANNOT FORM THE BASIS FOR COMPUTING THE MANUFACTURING RESULTS IN THE HANDS OF THE ASSESSEE. 20. THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRI BUNAL IN APPEAL NO.E/884 & 885/2006. VIDE ORDER DATED 6.9.2011 IN T HE CASE OF M/S A.K.ALLOYS & ORS. CATEGORICALLY HELD THAT THE ELECT RICITY CONSUMPTION COULD NOT BE CRITERIA TO DETERMINE THE OUTPUT LAID DOWN IN R.A. CASTINGS WHERE THE APPEAL OF THE REVENUE WAS DISMISSED BY TH E HON'BLE APEX COURT AS REPORTED IN 2011(269) ELT A-108 (SC). THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL IN THE APPEAL FILED BY M/S A.K.ALLOYS AND ITS DIRECTOR (SUPRA) HAS CATEGORICALLY HELD THA T WHERE NO COGENT EVIDENCE HAS BEEN BROUGHT ON RECORD TO PROVE THAT T HE OUTPUT HAD BEEN CLEARED CLANDESTINELY AND FURTHER WHERE THERE WAS N O COGENT EVIDENCE TO SHOW EITHER SUPPRESSION OF PURCHASE OF INPUT OR REM OVAL OF GOODS NO ADDITION IS WARRANTED IN THE HANDS OF PERSON ON ACC OUNT OF THE ALLEGED SUPPRESSION IN PRODUCTION AND ALSO ALLEGED INVESTME NT IN PURCHASE OF RAW MATERIAL. FOLLOWING THE ABOVE SAID PARITY OF REASO NING WE HOLD THAT NO ADDITION ON ACCOUNT OF PROFIT ON THE SALE OF UNACCO UNTED PRODUCTION OR ON ACCOUNT OF UNEXPLAINED INVESTMENT MERITS TO BE MADE IN THE HANDS OF THE ASSESSEE WHERE FACTS ARE SIMILAR. 13 13 21. FURTHER THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT VS. OM OVERSEAS [315 ITR 185 (P&H)] HAVE HELD THAT NO ADDI TION COULD BE MADE BY THE ASSESSING OFFICER WITHOUT POINTING ANY SPECI FIC DEFECT IN THE BOOKS OF ACCOUNT. NON-MAINTENANCE OF STOCK REGISTE R/PRODUCTION REGISTER IN ITSELF CANNOT BE HELD TO BE SUFFICIENT FOR REJEC TION OF BOOKS OF ACCOUNT. WE FIND SUPPORT FROM THE DECISION OF HON' BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PANDIT PROS. VS. CIT (1954) 26 ITR 159 (P&H)IN WHICH THE HON'BLE PUNJAB & HARYANA HIGH COURT CAME TO HE CONCLUSION THAT TO REJECT ACCOUNTS THERE MUST BE DEFINITE FINDING OF THE ITO FOR WHICH THERE MUST BE DEFINITE MATERIAL BEFOR E HIM TO COME TO SUCH FINDING. MERE ABSENCE OF STOCK REGISTER OR IN SUFFICIENCY OF PROFITS ARE NOT SUCH MATERIAL AND HE MUST ACT ON REASONABLE BASIS OR METHOD FOR DETERMINING THE INCOME. 22. THE DEFECTS POINTED OUT BY THE ASSESSING OFFICE R IN THE PRESENT CASE HAVE NOT BEEN ACCEPTED BY THE CIT (APPEALS) AN D IT HAS BEEN OBSERVED BY THE CIT (APPEALS) IN PARA 2.15 AT PAGES 12 AND 13 OF THE APPELLATE ORDER THAT THE ASSESSEE HAD FAIRLY EXPLAI NED THE REASONS FOR VARIATION IN ELECTRICITY WHICH HAVE NOT BEEN MET WI TH BY THE ASSESSING OFFICER. THE CIT (APPEALS) HAS FURTHER REFERRED TO THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF ST.TERESAS OIL MILLS VS. STATE OF KERALA (1970) 76 ITR 365 (KER) IN WHICH IT WAS OBSE RVED BY THE HON'BLE HIGH COURT THAT ACCOUNTS REGULARLY MAINTAINED IN THE COURSE OF BUSINESS HAVE TO BE TAKEN AS CORRECT UNLESS THERE A RE STRONG AND SUFFICIENT REASONS TO INDICATE THAT THEY ARE UNRELI ABLE . THE CIT (APPEALS) VIDE PARA 2.16 ALSO ADDRESSED THE ORDER O F ASSESSING OFFICER IN WORKING OUT THE ADDITION IN MOST CASUAL MANNER BY T AKING PRODUCTION OF FEW MONTHS IN WHICH CONSUMPTION OF ELECTRICITY WAS LOW AND IF THAT IS TAKEN AS MODEL TO WORK OUT ANNUAL PRODUCTION THEN IT WOULD LEAD TO 14 14 ILLOGICAL CONCLUSION THAT THE ASSESSEE HAD UNDERSTA TED AND NOT ACCOUNTED FOR THE PRODUCTION. IN VIEW OF THE ABOVE SAID FACT S AND CIRCUMSTANCES AND PRINCIPLES OF LAW WE FIND NO MERIT IN THE REJE CTION OF BOOKS OF ACCOUNT. FURTHER THE CIT (APPEALS) WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE HAD ADOPTED GP RATE OF 22% TO THE TOTAL TURNOVER OF RS.2.39 CRORES AS AGAINST RATE OF 20.12% SHOWN BY T HE ASSESSEE WHICH IS HIGHER THAN THE PRECEDING YEAR. WE FIND NO BASIS I N ADOPTING THE RATE OF PROFIT AT 22% FOR COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE WHERE THE ASSESSEE HAS SHOWN HIGHER GP RATE THAN TH E PRECEDING YEAR THOUGH THE SAME IS SLIGHTLY LOWER THAN THE EARLIER YEARS WHEN THE TOTAL TURNOVER OF THE ASSESSEE WAS MUCH LESSER. IN THE E NTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE DELETE THE ADDITIO N OF RS.4 49 876/-. CONSEQUENTLY GROUND NOS. 1 AND 2 RAISED BY THE ASSE SSEE IN ITS APPEAL ARE ALLOWED AND GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 23. NOW COMING TO THE NEXT ADDITION ON ACCOUNT OF S ALES MADE OUTSIDE THE BOOKS OF ACCOUNT OF SCRAP GENERATED DURING THE MANUFACTURING PROCESS. THE REVENUE IS AGGRIEVED BY THE DELETION OF ADDITION. THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON A CCOUNT OF TWO FACTORS I.E. I) ADDITIONAL PRODUCTION OF SCRAP TOTALING RS. 7 99 456/- AND ADOPTION OF SELLING PRICE OF SCRAP @ RS.80/- PER KG. IN VIE W OF OUR DECISION IN PARAS HEREINABOVE WHEREIN WE HAVE HELD THAT THERE W AS NO MERIT IN MAKING ANY ADDITION ON ACCOUNT OF ADDITIONAL PRODUC TION IN THE HANDS OF THE ASSESSEE THE FIRST PART OF THIS GROUND OF APPE AL I.E. ADDITIONAL PRODUCTION OF SCRAP DOES NOT SURVIVE. WE UPHOLD TH E ORDER OF THE CIT (APPEALS) IN THIS REGARD. 24. THE SECOND ASPECT OF THE ISSUE IS THE VALUATION OF SCRAP. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS HAD RECORDED THE STATEMENTS OF TWO PERSONS CONNECTED WI TH THE PURCHASE OF 15 15 SCRAP AND FROM THE AFORESAID STATEMENTS THERE WAS N OT EVIDENCE OF SELLING THE SCRAP AT HIGHER RATE THAN AS STATED IN THE BILL S. THE CIT (APPEALS) IN PARA 3.5 HAS NOTED THE ABOVE SAID FACT. THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION HAD SOLD THE SCRAP NOT IN THE T ERMS OF QUANTITY BUT IN LOTS. THE QUANTUM OF SCRAP AT 70% OF RAW MATERIAL HAS BEEN ACCEPTED BOTH BY THE ASSESSING OFFICER AND THE ASSESSEE THE ONLY DISPUTE BEING IN RESPECT OF ITS VALUE. THE ASSESSEE HAD VALUED ITS SCRAP @ RS.7/- PER KG. IN THE FACTS OF THE PRESENT CASE THE ASSESSING OFFI CER HAD MADE ENQUIRY FROM THE PERSONS TO WHOM THE SCRAP WAS SOLD AND IN WHICH THEY HAVE CONFIRMED THE RATE OF PURCHASE OF SCRAP AT THE PRIC E MENTIONED IN THE BILLS AND WHERE QUANTUM OF GENERATION OF SCRAP IS N OT IN DISPUTE THERE IS NOT MERIT IN ANY ADDITION ON THIS ACCOUNT. ACCORDI NGLY WE DELETE THE ADDITION MADE OF RS.13 61 744/- IN THIS REGARD. TH E ORDER OF THE CIT (APPEALS) IS THUS REVERSED. WE DISMISS GROUND NOS. 2 TO 4 RAISED BY THE REVENUE AND GROUND NO.3 RAISED BY THE ASSESSEE IS A LLOWED. 25. GROUND NO.5 RAISED BY THE REVENUE IS ON ACCOUNT OF CONSUMPTION OF RAW MATERIAL BEING OUTSIDE THE BOOKS OF ACCOUNT ON ACCOUNT OF ALLEGED PRODUCTION OUTSIDE THE BOOKS OF ACCOUNT IS CONSEQUE NTIAL TO THE ADDITION MADE ON ACCOUNT OF DISCREPANCIES IN THE BOOKS OF AC COUNT IN RESPECT OF PRODUCTION. IN VIEW OF OUR DELETING THE SAID ADDIT ION IN RELATION TO GROUND NOS.1 AND 2 RAISED BY THE ASSESSEE THE PRES ENT GROUND NO.5 RAISED BY THE REVENUE DOES NOT SURVIVE AND THE SAME IS DISMISSED. 26. THE LAST ISSUE RAISED BY THE REVENUE VIDE GROUN D NOS.6 TO 8 IS IN RESPECT OF ADDITION OF RS.4 48 240/-. THE ASSESSEE HAD PURCHASED CERTAIN SEMI-FINISHED GOODS TOTALING RS.4 48 240/- FROM TWO DIFFERENT PARTIES. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE TH E GOODS WERE TO THE SPECIFICATION OF THE ASSESSEE THE SAME WAS IN THE N ATURE OF WORKS CONTRACT AND INVOKING THE PROVISIONS OF SECTION 194 C OF THE ACT THE 16 16 ASSESSING OFFICER HELD THE ASSESSEE TO HAVE DEFAULT ED IN NOT DEDUCTING THE TAX AT SOURCE. THUS EXPENDITURE CLAIMED AT RS. 4 48 240/- WAS DISALLOWED IN VIEW OF THE PROVISIONS OF SECTION 40A (IA) OF THE ACT. 27. THE CIT (APPEALS) VIDE PARA 5.5 HELD AS UNDER: 5.5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND H OLD THAT THE ASSESSEE DESERVES TO SUCCEED ON THIS GROUND. IN THE CASE BEFORE ME THE RIGHT APPROACH WOULD BE NOTICE AS TO IN WHOM THE PROPERTY IN GOODS VESTS. IF THE SAME VESTS IN THE ASSESSEE AND THE GOODS ARE GIVEN TO SOME OTHER PERSON FOR JOB WORK THE TDS HAS TO BE MADE FROM THE PAYMENT. BUT IF THE PROPERTY IN GOODS REMAINS WITH THE SELLER OF THE GOODS WHO MAKES THE SAME TO ORDER OF THE ASSESSEE THERE CANNOT BE ANY CONTRACT OF JOB WORK AND THE ASSESSEE IS NOT OBLIGED TO DEDUCT ANY TAX AT SOURCE. THE STAND OF THE ASSESSEE ALSO STANDS VINDICATED BY THE AMENDMENT OF THE DEFINITION OF WORK IN SECTION 194C BY THE FINANCE ACT 2009 AS MENTIONED ABOVE. IN VIEW OF THE CASE LAW RELIED UPON BY THE ASSESSEE AND SUBSEQUENT AMENDMENT OF THE SECTION THE VIEW TAKEN BY THE A.O. CANNOT BE UPHELD. THE ASSESSEE THEREFORE SUCCEEDS ON THIS ISSUE ALSO. 28. THE LEARNED D.R. FOR THE REVENUE EXCEPT FOR PLA CING RELIANCE ON THE ORDER OF THE ASSESSING OFFICER COULD NOT CONTRO VERT THE FINDINGS OF THE CIT (APPEALS). IN VIEW THEREOF WE FIND NO MER IT IN THE GROUND NOS.6 TO 8 RAISED BY THE REVENUE. 29. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30 TH MARCH 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH 17 17