M/s. Dimension Capbuilds Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 1900/DEL/2014 | 2003-2004
Pronouncement Date: 25-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 190020114 RSA 2014
Assessee PAN AAACD4046J
Bench Delhi
Appeal Number ITA 1900/DEL/2014
Duration Of Justice 2 year(s) 6 month(s) 23 day(s)
Appellant M/s. Dimension Capbuilds Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 25-10-2016
Date Of Final Hearing 22-08-2016
Next Hearing Date 22-08-2016
Assessment Year 2003-2004
Appeal Filed On 01-04-2014
Judgment Text
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI C.M.GARG JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI ACCOUNTANT MEMBER ITA NO. 1900/DEL/2014 (ASSESSMENT YEAR: 2003 - 04 ) DIMENSION CAPBUILDS PVT LTD B - 65 GATE NO. 3 NARAINA INDUSTRIAL AREA PHASE - II NEW DELHI PAN:AAACD4046J VS. ITO WARD - 10(3) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. JITENDRA KR. GARG CA REVENUE BY: SH. ANIL KUMAR SHARMA SR DR DATE OF HEARING 22/08/ 2016 DATE OF PRONOUNCEMENT 25 / 10 /2016 O R D E R PER PRASHANT MAHARISHI A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - VI NEW DELHI DATED 24.01.2014 FOR THE ASSESSMENT YEAR 2003 - 04. 1. THAT THE ASSESSMENT ORDER DATED 27.12.2010 PASSED U/S 143(3)/147 OF THE ACT AND SUSTAINED BY THE LEARNED C1T(A) IS BAD IN LAW AND AGAINST FACTS OF THE CASE. 2. THAT NO VALID ISSUANCE/ SERVICE OF NOTICE U/S 148/ 149. THEREFORE ASSUMPTION OF JURISDICTION TO PASS AN ORDER U/S 147/148 IS VOID AND INVALID. 3) THAT SATISFACTION OF THE ASSESSING OFFICER FOR FORMATION OF BELIEF THAT INCOME HAS ESCAPED ASSESSMENT TO TAX IS A CONDITION PRECEDENT BEFORE ASSUMING JURISDICTION. ASSESSING OFFICER ASSUMED JURISDICTION WITHOUT SUCH SATISFACTION. HENCE THE NOTICE ISSUED U/S 148 IS INVALID AND VOID AB INITIO. 4) THAT THE ASSUMPTION OF JURISDICTION BY ISSUANCE OF THE NOTICE OF REASSESSMENT U/S 148 IS BASED ON SOME VAGUE DEPOSITION OF THIRD PARTY WITHOUT BRINGING ANY MATE RIAL ON RECORD TO CONFIRM THE EXISTENCE OF NEXUS BETWEEN STATEMENT AND RECEIPT OF MONEY. 5) THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAMINE THE MATERIAL BASED ON WHICH ASSESSING OFFICER ARRIVED AT THE CONCLUSION THAT ASSESSEE IS BENEFICIARY OF ALLEGED ACCOMMODATION ENTRIES. 6] THAT THE ASSESSING OFFICER MADE ADDITION OF US. 3550000/ - AND CONFIRMED BY THE LEARNED C1T(A] ON ACCOUNT OF SALE OF INVESTMENT MERELY ON THE BASIS OF SUSPICION WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORDS. 7) TH AT GENUINE SALE OF INVESTMENTS HELD IN SHARES OF OTHER COMPANY HAS WRONGLY BEEN ADDED TO THE INCOME OF APPELLANT MERELY ON THE BASIS OF EVIDENCE PROCURED FROM THIRD PARTY WITHOUT PUTTING THE EVIDENCE (BANK STATEMENTS ETC.] FOR CROSS EXAMINATION OF THE ASSE SSEE. PAGE 2 OF 6 8) THAT 20% EXPENSE OF RS. 2780187 HAVE BEEN DISALLOWED ON THE BASIS OF GUESS WORK AND SUSTAINED BY THE LEARNED CIT(A) WHEN THE ACCOUNTS ARE AUDITED BY THE CHARTERED ACCOUNTANT AND HAVE BEEN PREPARED BY FOLLOWING VARIOUS GUIDELINES AND ACCOUNTING STANDARDS PRESCRIBED UNDER THE STATUTE. 9) THAT ONCE BOOKS OF ACCOUNTS HAVE BEEN REJECTED ANY ADDITION BASED ON SAME SET OF ACCOUNTS CANNOT BE SUSTAINED. 2. ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND INVESTMENT. FOR T HE YEAR IT FILED ITS RETURN OF INCOME ON 19 / 11 / 2003 DECLARING A LOSS OF RS. 373570/ . N O ASSESSMENT WAS FRAMED UNDER SECTION 143 (3) OF THE INCOME TAX ACT. HOWEVER LATER ON INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING NEW DELHI INDICATING THA T THE ASSESSEE IS AMONGST ONE OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES. THEREFORE THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED AND NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 26 TH OF MARCH 2010. IN RESPONSE TO THE ABOVE NOTICE THE ASSESSEE SUBMITTED A LETTER THAT THE ORIGINAL RETURN FILED UNDER SECTION 139 (1) MAY BE TREATED AS A RETURN FILED IN RESPONSE TO THE ABOVE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. AND THEREAFTER TH E ASSESSMENT WAS FRAMED UNDER SECTION 143 (3) READ WITH SECTION 147 OF THE INCOME TAX ACT. AGAINST THE RETURNED INCOME OF THE ASSESSEE OF A LOSS OF RS. 373574. THE ASSESSMENT WAS FRAMED AT RS. 60 72466/ . IN THE ASSESSMENT ORDER TO DISALLOWANCES WERE MADE ( 1 ) IS OUT OF EXPENSES OF RS. 2896040/ AND (2) ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES OF RS. 3550000/ . AGAINST THE ABOVE ASSESSMENT ORDER THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX APPEAL WHO VIDE ORDER DATED 24 TH OF JANUARY 2014 DISMISSED THE APPEAL OF THE ASSESSEE. THEREFORE ASSESSEE IS IN APPEAL BEFORE US. 3. IN THE BEGINNING LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT HE WOULD BE PRESSING ONLY GROUND NO. 6 7 AND 8 OF THE APPEAL AND SPECIFICALLY DOES NOT WANT TO PRESS ANY OTHER GROUND OF THE APPEAL. IN VIEW OF THIS THE GROUND NO. 1 TO GROUND NO. 5 AND GROUND NO . 9 AND 10 OF THE APPEAL ARE DISMISSED A S NOT PRESSED. 4. WITH RESPECT TO THE GROUND NO. 6 AND 7 OF THE APPEAL OF THE ASSESSEE WHICH IS AGAINST THE CONFIRMATI ON OF ADDITION OF RS. 3 550000/ MADE BY THE LD. ASSESSING OFFICER CONFIRMED BY THE 1 ST APPELLATE AUTHORITY ON ACCOUNT OF SALE OF INVESTMENT ON THE BASIS OF SUSPICION WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD. THE BRIEF FACTS OF THIS ADDITION IS THAT LD . ASSESSING OFFICER RECEIVED INFORMATION FROM INVESTIGATION WING THAT THE ASSESSEE HAS RECEIVED BOGUS ACCOMMODATION ENTRIES WORTH RS. 19.50 LAKHS FROM 2 PARTIES TO WHOM THE ASSESSEE HAS SOLD CERTAIN INVESTMENTS HELD IN M/S FUTURISTIC SALES PRIVATE LIMI TED. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THE CONFIRMATION LETTER. HOWEVER THOSE CONFORMATION LETTERS WERE DISBELIEVED AND THE LD. ASSESSING OFFICER IN ORDER TO VERIFY THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE HE ISSUED ENQUIRY LETTER UNDER SECTION 133 (6) OF THE INCOME TAX ACT THROUGH HIS INSPECTOR. HOWEVER THE REPORT WAS PAGE 3 OF 6 RECEIVED FROM THE INSPECTOR THAT THESE PARTIES ARE NOT FOUND IN EXISTENCE AT THE GIVEN ADDRESS AND THEREFORE ASSESSEE WAS REQUIRED TO PRODUCE THEM IN ORDER TO DISCH ARGE ITS ONUS TO PROVE THEIR IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE ABO VE TRANSACTION OF THE SALE OF THE SHARES. IN VIEW OF THIS THE ASSESSING OFFICER HELD THAT THE ABO VE TRANSACTION IS BOGUS AND H IS VIEW WAS FURTHER SUPPORTED FROM THE INFORMA TION CALLED FROM THE BANKERS OF THOSE PARTIES WHEREIN THE BANK STATEMENT RECEIVED REVEALED THAT THE CASH HAS BEEN DEPOSITED IN THE RESPECTIVE ACCOUNTS BEFORE THE CLEARANCE OF CHE QUE TO THE ASSESSEE COMPANY. THE LD. ASSESSING OFFICER WAS ALSO PRIVY TO THE INFORMATION FROM INVESTIGATION WING THAT THE THESE PARTIES ARE AMONG THE GROUP COMPANIES CONTROLLED BY SH. RAM GARG WHO HAS CARRIED OUT THE BUSINESS OF PROVIDING BOGUS ACCOMMODATION ENTRIES. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD. ASS ESSING OFFICER FU RTHER CAME TO KNOW THAT THE ASSESSEE HAS FURTHER SOLD SALES OF RS. 16 LAKHS AND FOR THOSE SALES THE ASSESSEE WAS ASKED TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THOSE PARTIES TO WHOM THE SHARES OF THESE COMPANIES HAVE BE EN SOLD. THE APPELLANT COULD NOT SUBMIT TH ESE DETAILS TO THE SATISFACTION OF THE ASSESSING OFFICER AND THEREFORE THE FURTHER ADDITION OF RS. 16 LAKHS WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE AGGRIEVED BY THE ADDITION CARRIED FURTHER MATTER TO THE 1 ST APPELLATE AUTHORITY WHO CONFIRME D THE ADDITION MADE BY THE ASSESSING OFFICER AND THEREFORE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AUTHORIZED REPRESENTATIVE OF THE APPELLANT SUBMITTED THAT THE ASSESSEE HAS SUBMITTED THE COMPLETE DETAILS OF THE PARTIES TO WHOM THE SHARES OF FUTURISTIC SA LES PRIVATE LIMITED HAVE BEEN SOLD STATING THE NUMBER OF SHARES SOLD THE NAME AND ADDRESS OF THOSE PARTIES AND PERMANENT ACCOUNT NUMBER OF THESE PARTIES. HE FURTHER SUBMITTED THAT THE SHARES ARE HELD BY THE ASSESSEE A S INVESTMENT IN PAST YEARS AND FOR TH IS HE REFERRED TO PAGE NO. 5.11 OF THE PAPER BOOK WHERE SHARES HELD FOR 22 LAKHS HAVE BEEN SOLD DURING THE YEAR BY THE ASSESSEE. HE THEREFORE SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE COMPLETE TRANSACTION THE PAYMENTS HAVE BEEN RECEIVED BY THE CHEQUE BY THE APPELLANT FROM THOSE PARTIES AND THEREFORE THERE CANNOT BE ANY ADDITION ON ACCOUNT OF THE SHARES SOLD TO THESE PARTIES. FURTHER WITH RESPECT TO THE OTHER SHARES SOLD BY THE ASSESSEE TO THE OTHER PARTIES NAME BEING SMT. VASUDHA SANGHAI USHA DEVI SAN GHAI AND SMT.KAMLA AGARWAL IT WAS SUBMITTED THAT THE THESE PARTIES HAVE CONFIRMED THE TRANSACTION TO THE LD. ASSESSING OFFICER BY SEPARATE LETTERS IN THE REMAND PROCEEDINGS. HE FURTHER SUBMITTED THAT IN REJOINDER TO THE REMAND REPORT THE APPELLANT SUBMI TTED THAT LD ASSESSING OFFICER DID NOT TO ACCEPT THE STATEMENT MADE BY THESE PERSON AND HOWEVER ALSO NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE TRANSACTION AND ALSO THE TIME SO UGHT BY THE ASSESSEE WAS NOT GIVEN. IT WAS FURTHER SUBMITTED PAGE 4 OF 6 THA T DESPITE THE REQUEST MADE BY THE APPELLANT TO THE ASSESSING OFFICER NO INFORMATION WAS GIVEN ABOUT THE INFORMATION RECEIVED BY THE ASSESSING OFFICER W ITH RESPECT TO THE BENEFICIARY BEING APPELLANT OF THE ACCOMMODATION ENTRIES FOR WHICH THE ADDITION HAS BE EN MADE. HE THEREFORE SUBMITTED THAT THE ASSESSMENT MADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE THE 1 ST APPELLATE AUTHORITY IS WITHOUT GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE AND TO REBUT THE EVIDENCES COLLECTED BY THE LD. ASSESSING OFFICER. 6. IN RESPONSE TO THIS LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS BEEN GIVEN ENOUGH OPPORTUNITY OF HEARING BEFORE THE 1 ST APPELLATE AUTHORITY AS WELL AS BEFORE THE ASSESSING OFFICER. HOWEVER IT FAILED TO COMPLY WITH THE CONDITI ON OF PRODUCING THE PARTIES BEFORE THE LD. ASSESSING OFFICER AND HENCE THE ADDITION HAS BEEN RIGHTLY MADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE 1 ST APPELLATE AUTHORITY. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE BEFORE US. UNDOUBTEDLY THE ASSESSEE HAS SOLD THE INVESTMENT OF SH ARES IN ONE COMPANY HELD BY IT A S AN INVESTMENT IN THE PAST YEAR. HOWEVER THE INVESTMENT HAVE BEEN SOLD TO THE 2 PARTIES WHOSE NAME ADDRESS PERMANENT ACCOUNT NUMBER WAS FURNISH ED BY THE ASSESSEE TO THE ASSESSING OFFICER BUT THE LD. ASSESSING OFFICER ON ISSUE OF NOTICE UNDER SECTION 133 (6) OF THE INCOME TAX ACT THROUGH THE INSPECTOR COULD NOT FIND THE EXISTENCE OF THOSE PARTIES. THE ASSESSEE SAYS THAT THESE PARTIES ARE IN EXIS TENCE. HOWEVER IT COULD NOT PRODUCE THEM BECAUSE OF THE SHORTAGE OF TIME BEFORE THE LD. ASSESSING OFFICER. WE ARE OF THE OPINION THAT MERE FURNISHING OF THE CONFIRMATION OF THE PARTIES SUCH AS NAME ADDRESS AND PERMANENT ACCOUNT NUMBER DOES NOT PROVE THE IDENTITY CREDITWORTHINESS GENUINENESS OF THE TRANSACTION WHERE THE ASSESSING OFFICER HAS GOT THE INFORMATION FROM THE INVESTIGATION WING AND FURTHER THE SAME WERE ALSO CORROBORATED BY THE BANK STATEMENT OBTAINED BY THE LD. ASSESSING OFFICER FROM THE BANK ERS OF THE BUYER COMPANIES WHERE THE CASH WAS DEPOSITED OF THE IDENTICAL AMOUNT ON THE SAME DAY AND THE CHEQUES WERE ISSUED TO THE ASSESSEE TOWARDS THE PURCHASE OF THOSE SHARES. DESPITE THE OPPORTUNITY GIVEN BY THE LD. ASSESSING OFFICER TO THE ASSESSEE TO PRODUCE THE PARTIES SAME COULD NOT BE PRODUCED BY THE ASSESSEE BECAUSE OF THE PAUCITY OF TIME AS THE ASSESSEE WAS ASKED TO PRODUCE THE PARTIES ON 13/12/2010 AND MERELY WITHIN 14 DAYS THE ASSESSMENT WAS FRAMED ON 27 TH /12 /2010. THE ASSESSMENT WAS FRAMED BY THE THE LD. ASSESSING OFFICER BECAUSE OF THE TIME BARRING LIMITATION ARRIVING FOR PASSING OF THE ABOVE SAID ASSESSMENT ORDER. IN VIEW OF THIS WE SET ASIDE THE ADDITION OF RS. 19.50 LAKHS BACK TO THE FILE OF THE LD. ASSESSING OFFICER AND DIRECT THE ASSESSE E WITHIN 3 MONTHS OF THIS ORDER TO PRODUCE THE DIRECTORS OF THE ABOVE COMPANY ALONG WITH THE REQUISITE DETAILS SUCH AS THE SOURCES PAGE 5 OF 6 OF FUNDS DEPOSITED BY THOSE COMPANIES INTO THE BANK ACCOUNT IN CASH BEFORE ISSUE OF THE CHEQUES AND THE TRANSACTION PRICE OF PURCHASE OF SHARES OF THE COMPANIES TO THE SATISFACTION OF THE ASSESSING OFFICER TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION OF THE SALE OF SHARES OF FUTURISTIC LTD BY THE ASSESSEE. THE LD. ASSESSING OFFICER MAY ALSO INQUI RE FROM THE ASSESSING OFFICER OF THOSE COMPANIES ABOUT THE ASSESSMENT PROCEEDINGS PENDING IN THOSE COMPANIES OR WHETHER MERELY THE PERMANENT ACCOUNT NUMBER HAS BEEN OBTAINED TO VERIFY ABOUT THE CREDITWORTHINESS OF THOSE COMPANIES. WITH RESPECT TO THE SALE OF FURTHER 3 WOMEN WE ALSO FURTHER DIRECT THE LD. ASSESSING OFFICER A CCORDINGLY AS WE HAVE HELD WITH RESPECT TO OTHER BUYERS OF THOSE SHARES HELD BY THE ASSESSEE A S INVESTMENT. IN THE RESULT GROUND NO. 6 AND 7 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED WITH ABOVE DIRECTION. 8. THE GROUND NO. 8 OF THE APPEAL OF THE ASSESSEE WAS AGAINST THE DISALLOWANCE OF RS. 2896040/ BEING 20% OF THE EXPENSES CLAIMED BY THE ASSESSEE OF RS. 14480187/ - THE ABOVE DISALLOWANCE HAS BEEN MADE BY THE LD. ASSESSING OFFICER A S THE A SSESSEE HAS FAILED TO PRODUCE THE BOOKS OF ACCOUNTS WITH SUPPORTING BILLS AND VOUCHERS BEFORE THE LD. ASSESSING OFFICER. THEREFORE THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE REMAIN ED UN VERIFIED. AND THEREFORE THE LD. ASSESSING OFFICER REJECTED T HE BOOKS OF ACCOUNTS APPLYING THE PROVISIONS OF SECTION 145 (3) OF THE INCOME TAX ACT AND DISALLOWED 20% OF THOSE EXPENSES AMOUNTING TO RS. 2896040/ . ON APPEAL BEFORE THE 1 ST APPELLATE AUTHORITY HE HAS GRANTED RELIEF TO THE ASSESSEE TO RECOMPUTE THE ADDI TION BASED ON 20% OF DISALLOWANCE OUT OF PURCHASES AND OTHER DISALLOWANCES EXCLUDING OPENING STOCK OF THE CURRENT YEAR OR CLOSING STOCK OF THE PREVIOUS YEAR. BEFORE THE 1 ST APPELLATE AUTHORITY THE APPELLANT SUBMITTED THAT THE BOOKS OF ACCOUNTS COULD NOT B E PRODUCED BEFORE THE LD. ASSESSING OFFICER BECAUSE OF DEATH OF ONE OF ITS KEY DIRECTOR AND THEREFORE IT CAUSES GENUINE HARDSHIP TO THE ASSESSEE AS IT COULD NOT LOCATE THE BOOKS OF ACCOUNTS. 9. THE LD. AUTHORIZED REPRESENTATIVE ONCE AGAIN REITERATED THE FAC TS STATED AT PARA NO. 4.22 OF THE ORDER OF THE 1 ST APPELLATE AUTHORITY WHEREIN IT HAS BEEN MENTIONED THAT DUE TO THE DEATH OF ONE OF THE KEY DIRECTORS THE REPRESSIVE REASSESSMENT PROCEEDINGS WOULD NOT BE ATTENDED BY PRODUCTION OF THE BOOKS OF ACCOUNTS OF T HE ASSESSEE AND IT WAS ALMOST AFTER 7 YEARS OF THE CLOSE OF FINANCIAL YEAR THE ASSESSEE COULD NOT LOCATE THE BOOKS OF ACCOUNTS. HE FURTHER SUBMITTED THAT ALL ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER WERE DULY CONFIRMED AN D LD AO HAS ACCEPTED TRADING R ESULTS AFTER SUCH ENQUIRIES . 10. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT BEFORE THE LD. ASSESSING OFFICER AND THEREFORE THE LD. ASSESSING OFFICER DID NOT HAVE ANY OTHER OPTION BUT TO DISALLOW THE ESTIM ATED PERCENTAGE OF PAGE 6 OF 6 THE EXPENDITURE AND WHEREAS THE 20% OF SUCH EXPENDITURE IS THE PROPER AMOUNT WHICH WOULD HAVE BEEN DISALLOWED. THE ABOVE PERCENTAGE OF DISALLOWANCE HAS ALSO BEEN CONFIRMED BY THE LD. 1 ST APPELLATE AUTHORITY AFTER CORRECTION OF THE REMOV AL OF OPENING STOCK FROM THE DISALLOWANCE. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE LD. ASSESSING OFFICER AND THEREFORE THE DISALLOWANCE HAS BEEN MADE BY THE LD. ASSESSING OFFICER E STIMAT ING 20% OF THE ALL THE EXPENDITURE OF THE ASSESSEE INCLUDING THE OPENING STOCK AS DISALLOWABLE . THE LD. 1 ST APPELLATE AUTHORITY HAS REDUCED THE ABOVE AMOUNT BY THE AMOUNT OF OPENING STOCK BUT CONFIRMED THE BALANCE DISALLOWANCE OF EXPENDITURE. SUCH D ISALLOWANCES HAS RESULTED BECAUSE THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE LD. ASSESSING OFFICER DUE TO THE DEATH OF ONE OF THE KEY DIRECTORS. THEREFORE ASSESSEE IS GRANTED ONE MORE OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNTS OF TH E ASSESSEE BEFORE THE LD. ASSESSING OFFICER FOR VERIFICATION OF THE ABOVE EXPENDITURE A S ESTIMATED DISALLOWANCE CANNOT BE UPHELD WHEN THE ASSESSEE IS READY TO PRODUCE THE BOOKS OF ACCOUNTS. IN THE RESULT GROUND NO. 8 OF THE APPEAL OF THE ASSESSEE IS SET ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS ALONG WITH ALL SUPPORTING VOUCHERS AND BILLS WITHIN THREE MONTHS OF THIS ORDER TO SATISFY THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE CLAIM OF EXPENDITURE OF THE ASSESSEE. IN THE RESULT GROUND NO. 8 OF THE APPEAL OF THE ASSESSEE IS ALLOWED ACCORDINGLY. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 2 5 / 10 /2016. - S D / - - S D / - ( C.M.GARG ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 5 / 10 /2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI