Ganga Contracts & Projects, Noida v. ITO, New Delhi

ITA 3500/DEL/2009 | 2003-2004
Pronouncement Date: 11-11-2011 | Result: Dismissed

Appeal Details

RSA Number 350020114 RSA 2009
Assessee PAN AABCG2726R
Bench Delhi
Appeal Number ITA 3500/DEL/2009
Duration Of Justice 2 year(s) 3 month(s) 3 day(s)
Appellant Ganga Contracts & Projects, Noida
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 11-11-2011
Date Of Final Hearing 01-11-2011
Next Hearing Date 01-11-2011
Assessment Year 2003-2004
Appeal Filed On 07-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BEN CH BEFORE SHRI C.L. SETHI JM & SHRI A.N. PAHUJA AM ITA NO.3500/DEL/2009 ASSESSMENT YEAR:2003-04 M/S GANGA CONTRACTS & PROJECTS LTD. 203 DOHIL CHAMBER 46 NEHRU PLACE NEW DELHI-19 V/S . INCOME TAX OFFICER WARD 12(1) NEW DELHI [PAN NO.: AABCG 2726 R] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI MANPREET SINGH KAPOOR AR REVENUE BY SHRI SALIL MISHRA DR DATE OF HEARING 01-11-2011 DATE OF PRONOUNCEMENT 11-11-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 7.8.2009 BY THE ASSESSEE AGAIN ST AN ORDER DATED 20.03.2009 OF THE LEARNED CIT(A)-XII NEW DEL HI RAISES THE FOLLOWING GROUNDS:- 1. THAT THE LEARNED ASSESSING OFFICER IS BAD IN LA W AND ON FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. ASSESSING OFFICER HAS ERRED IN MAKING THE ADDIT ION OF ` ` 10 14 000/- OUT OF SHARE APPLICATION MONEY AS UNEXPLAINED CASH CREDIT. THE ACTION OF THE ASSESSI NG OFFICER IS ILLEGAL AND BAD IN LAW. THE HONBLE CIT(A)-XII ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. ASSESSING OFFICER WITHOUT APPRECIATING AND GOING INTO THE DETAILS OF VARIOUS FACTS AND CIRCUMS TANCES AND DOCUMENTS FILED BY THE APPELLANT. 3. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. ASSESSING OFFICER HAS ERRED IN MAKING THE ADDIT ION DUE TO DISALLOWANCE OF DEPRECIATION ON FIXED ASSETS OF ` `10 09 215/- THE HONBLE CIT(A)-XII ERRED IN CONFIRMING THE ADDI TIONS MADE BY LEARNED ASSESSING OFFICER WITHOUT APPRECIAT ING ITA N O.3500 /DEL./2009 2 AND GOING INTO THE DETAILS OF VARIOUS FACTS AND CIRCUMSTANCES AND DOCUMENTS FILED BY THE APPELLANT. 4. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION DUE TO DISALLOWANCE OF EXPENSES OF ` `10 00 000/- ON AD HOC BASIS. THAT THE HONBLE CIT(A)-XII ERRED IN CONFIRMING THE ADDITIONS MADE BY LD. ASSESSING OFFICER WITHOUT APPRECIATING AND GOING INTO THE DETAILS OF VARIOUS FACTS AND CIRCUMSTANCES AND DOCUMENTS FILED BY THE APPELL ANT. THE APPELLANT PRAYS FOR LEAVE TO ADD ALTER MODIFY AND WITHDRAW ANY OF THE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING. 2. THIS APPEAL INITIALLY DISPOSED OF VIDE ORDE R DATED 24.6.2010 WAS RECALLED VIDE ORDER DATED 7.1.2011 IN MA NO.447/DEL./2010. A DVERTING FIRST TO GROUND NO. 2 IN THE APPEAL FACTS IN BRIEF AS PER RELEVAN T ORDERS ARE THAT RETURN DECLARING LOSS OF ` ` 57 405/- FILED ON 6 TH NOVEMBER 2003 BY THE ASSESSEE AFTER BEING PROCESSED ON 25.3.2004 U/S 143(1) OF THE INCOME-TAX ACT 1961 (HEREAFTER REFERRED TO AS THE ACT) WAS SELECTED FOR SCRUTINY W ITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ISSUED ON 22 ND NOVEMBER 2004. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER (A.O. IN SHORT) NOTICED THAT THE ASSESSEE RECEIVED SHARE APPLICATION MONEY OF ` `10 14 000/-. IN RESPONSE TO A QUESTIONNAIRE ISSUED BY THE AO SEEKING DETAILS OF SHARE APPLICATION MONEY WITH COMPLETE ADDRESSES AND CONFIRMATION OF ALL THE INV ESTORS THEIR IT PARTICULARS COPY OF BANK STATEMENT AND SOURCES OF INVESTMENT ESTABLISHING THEIR CREDITWORTHINESS THE ASSESSEE REPLIED VIDE LETTER DATED 28 TH SEPTEMBER 2005 THAT THE FOLLOWING PERSONS MADE INVESTMENT IN CASH TOWARDS THE SHARE CAPITAL: [IN ` ] I) SHRI SATISH KUMAR GADDH : `3 14 000/- II) CAPT. SANT DAS (FATHER OF SHRI ITA N O.3500 /DEL./2009 3 SATISH KR. GADDH) : `5 00 000/- (3) MRS. VIBHA KHOSLA (DAUGHTER OF SH. SATISH KUMAR GADDH.): `2 00 000/- HOWEVER THE ASSESSEE DID NOT SUBMIT EITHER THEIR C ONFIRMATIONS OR COPY OF THE BANK ACCOUNTS NOR ESTABLISHED THEIR IDENTITY OR CR EDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. ACCORDINGLY A SH OW CAUSE NOTICE DATED 23.01.2006 WAS ISSUED. IN RESPONSE THE ASSESSEE W HILE ENCLOSING THE BANK STATEMENT OF SHRI SATISH KUMAR GADDH SUBMITTED THAT HE HAD WITHDRAWN THE MONEY FROM OBC BASANT LOK NEW DELHI AND INVESTED IN THE COMPANY FOR URGENT NEEDS. WHILE REFERRING TO THE BANK STATEMENT OF S HRI S.K. GADDH FOR THE PERIOD 7 TH MARCH 2002 TO 13 TH FEBRUARY 2003 THE ASSESSEE SUBMITTED THAT CASH WITHDRAWALS OF ` `30 000/- ON 19 TH SEPTEMBER 2002; ` ` 5 000/- ON 23 RD SEPTEMBER 2002; ` `25 000/- ON 26 TH OCTOBER 2002; ` `2 LACS ON 08.11.2002; ` `1 LAC ON 09.11.2002; ` ` 1 LAC ON 11.11.2002; ` `85 000/- ON 11.12.2002; AND ` ` 50 000/- ON 30.12.2002 TOTALLING TO ` ` 5 95 000/- THE ASSESSEE ENCLOSED AN AFFIDAVIT OF S HRI SK GADDH VIDE LETTER DATED 6 TH MARCH 2006 MENTIONING THAT SHRI SK GADH WITHDREW CASH OF ` 3 25 000 FOR INVESTMENT IN SHARE CAPITAL OF THE CO MPANY. HOWEVER THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE O N THE GROUND THAT INITIALLY THE ASSESSEE SUBMITTED THAT NO DATA WAS AVAILABLE A ND LATER IT WAS SUBMITTED THAT EXPENSES OF THE COMPANY WERE BORN BY SHRI S.K. GADDH AND THE AMOUNT TRANSFERRED TO SHARE APPLICATION MONEY. THE ASSESS EE DID NOT PRODUCE THE DETAILS OF EXPENSES BORNE BY HIM NOR PRODUCED RELEV ANT BOOKS OF ACCOUNTS AND VOUCHERS ON THE GROUND THESE WERE DESTROYED IN FIRE ON 26.11.2002 EVEN THOUGH AUDITORS IN COL. 9(B) &(C) IN FORM NO. 3CD ENCLOSED WITH THE AUDIT REPORT MENTIONED THAT CASH BOOKS LEDGER JOURNAL BANK BO OK AND PURCHASE REGISTER ETC.(COMPUTERIZED BOOKS) WERE EXAMINED BY HIM. VIDE LETTER DATED 28.2.2006 THE AUDITOR CLARIFIED THAT HE EXAMINED THE BOOKS M AINTAINED FROM DEC. 2002. IN THE ABSENCE OF COMPLETE DETAILS/BOOKS OF ACCOUNTS A ND THE ASSESSEE HAVING FAILED TO ESTABLISH NEXUS OF SUCH WITHDRAWALS IN CA SH FOR INCURRING THE EXPENSES AND ITS SUBSEQUENT INVESTMENT IN SHARE APPLICATION THE AO ADDED THE AMOUNT OF ITA N O.3500 /DEL./2009 4 ` 3 14 000/- U/S 68 OF THE ACT. INTER ALIA THE AO O BSERVED THAT BESIDES THE DEPOSIT OF ` ` 17 60 000/- (CLAIMED AS SALE CONSIDERATION OF HOUSE PROPERTY OF SHRI S.K. GADDH.) FROM 16.09.2002 TO 30.12.2002 THERE W ERE CASH DEPOSITS OF ` `7 17 800/- ON VARIOUS DATES IN THE BANK ACCOUNT. 2.1 FOR SHARE APPLICATION MONEY OF LATE CAPTAIN SA NT DAS IT WAS SUBMITTED THAT HE EXPIRED ON 3RD DECEMBER 2004.THE ASSESSEE EXPLAINED THAT HE INVESTED ` `4 25 000/- OUT OF CASH OF ` 4 59 000/- RECEIVED ON SALE OF FLAT AND ` `75 000/- WITHDRAWN FROM HIS POST OFFICE ACCOUNT. H OWEVER THE DATE OF RECEIPT OF CASH ON SALE OF FLAT OR EVIDENCE IN RESPECT OF WITH DRAWAL OF CASH FROM POST OFFICE ACCOUNT WAS NOT SUBMITTED. LATER SHRI S.K. GADDH I N HIS AFFIDAVIT SUBMITTED THAT HE RECEIVED FOLLOWING CHEQUES FROM HIS FATHERS SA VING BANK ACCOUNT NO.11913 WITH BANK OF INDIA I) CHEQUE NO.594298 DATED 13.11.2001 FOR ` 1 60 000/- II) CHEQUE NO.594297 DATED 13.11.2001 ` `3 85 000/-. HOWEVER THE AO DID NOT ACCEPT THE SUBMISSIONS OF T HE ASSESSEE ON THE GROUND THAT THOUGH SHRI SK GADDH IS STATED TO HAVE RECEIVE D CHEQUES DATED 13.11.2001 ISSUED BY HIS FATHER HE CLAIMED THAT MONEY WAS AP PROPRIATED TOWARDS SHARE APPLICATION MONEY IN NEXT FY. SINCE BANK STATEMENT OF SHRI SK GADH FOR THE PERIOD 2001-02 WAS NOT FILED NOR THE ASSESSEE SUBMI TTED ANY EVIDENCE THAT INVESTMENT TOWARDS SHARE APPLICATION MONEY WAS SOUR CED OUT OF THE AFORESAID AMOUNT RECEIVED FROM CAPT. SANT DAS THE AO ADDED T HE AMOUNT OF ` 5 00 000/- U/S 68 OF THE ACT. 2.2 AS REGARDS INVESTMENTS OF ` ` 2 00 000/- IN THE NAME OF MRS. VIBHA KHOSLA DAUGHTER OF SHRI S.K. GADDH THE ASSESSEE SUBMITTED HER AFFIDAVIT MENTIONING THAT SHE RECEIVED GIFT OF ` `1 50 000/- IN CASH FROM HER MOTHER SMT. KANCHAN GADDH WHILE THE REST OF AMOUNT WAS INVESTED OUT OF HER DOMESTIC SAVINGS AND WITHDRAWALS FROM THE BANK. THE AFFIDAVIT OF SMT. KANCHAN MENTIONED THAT SHE GIFTED ` `1 50 000/- IN CASH TO HER DAUGHTER SMT. VIBHA KHO SLA OUT OF FOLLOWING ITA N O.3500 /DEL./2009 5 SUMS WITHDRAWN FROM SAVING ACCOUNT NO.24216 OF STA TE BANK OF INDIA NEW COLONY BRANCH GURGAON : CHEQUE NO. DATE AMOUNT 00870580 22.10.2002 15 000/- 00870582 26.12.2002 1 17 800 AND THE REMAINING ACCOUNT OUT OF HER CASH SAVINGS. HOWEVER THE AO DID NOT ACCEPT THE SUBMISSIONS OF T HE ASSESSEE ON THE GROUND THAT THERE WAS NOTHING TO SUGGEST THAT THE AMOUNT OF ` `2 00 000/- WAS ACTUALLY GIVEN TO THE ASSESSEE BY SMT. VIBHA KHOSLA TOWARDS SHARE APPLICATION MONEY. SINCE THE ASSESSEE FAILED TO ESTABLISH HER CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTIONS THE AO ADDED THE AMOUNT OF ` `2 LACS U/S 68 OF THE ACT. 2.3. IN NUTSHELL THE AO OBSERVED THAT THE ENTIRE SHARE APPLICATION MONEY OF ` `10 14 000/- RECEIVED DURING THE YEAR WAS CLAIMED TO HAVE BEEN RECEIVED IN CASH. SINCE THE ASSESSEE FAILED TO ESTABLISH THAT C ASH WITHDRAWALS MADE BY SHRI S.K. GADDH MD OF THE COMPANY WERE UTILIZED FOR THE EXPENSES OF THE ASSESSEE COMPANY NOR THE ASSESSEE FURNISHED ANY EVIDENCE THA T THE AMOUNT OF ` `10 14 000/- CREDITED IN THE BOOKS OF ACCOUNTS OF T HE ASSESSEE COMPANY WAS ACTUALLY SHARE APPLICATION MONEY INVESTED BY THE PE RSONS MENTIONED ABOVE THE AO CONCLUDED THAT THE ENTIRE AMOUNT WAS UNACCOUNTED MONEY OF THE ASSESSEE CREDITED IN THE FORM OF SHARE APPLICATION MONEY AN D ACCORDINGLY ADDED BY WAY OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. ON APPEAL THE LD. CIT(A) FOUND THAT WHEN THE DETAILS OF SHARE APPLICATION MONEY WERE SOUGHT BY THE AO THE ASSESS EE VIDE LETTER DATED 30.08.05 STATED THAT NO DATA AVAILABLE. SUBSEQUEN TLY VIDE LETTER DATED 28.09.05 THE ASSESSEE STATED THAT THE FOLLOWING PERSONS MA DE THE INVESTMENTS:- A) SHRI SATISH KUMAR GADDH ` `3 14 000/- (DIRECTOR) ITA N O.3500 /DEL./2009 6 B) CAPT. SANT DAS ` `5 00 000/- (FATHER OF SATISH KR. GADDH) C) MRS. VIBHA KHOSLA ` `2 00 000/- (DAUGHTER OF SATISH KR. GADDH) 3.1 INITIALLY THE ASSESSEE DID NOT SUBMIT ANY CO NFIRMATION OF THE AFORESAID THREE PERSONS BEFORE THE AO NOR COPIES OF THEIR BANK ACC OUNT. SUBSEQUENTLY VIDE LETTER DATED 27.02.2006 THE ASSESSEE SUBMITTED A C OPY OF BANK STATEMENT OF SHRI S.K. GADDH FOR THE PERIOD FROM 7.03.2002 TO 13.02.2 003 WITH ITS REPLY BEFORE THE AO REVEALING SELF WITHDRAWALS OF ` .30 000/- DATED 19.9.2002 ` .5 000/- DATED 23.9.2002 ` . 25 000/- DATED 26.10.2002 ` 2 00 000/- DATED 8.11.2002 ` `1 LAC DATED 9.11.2002 AND ` 50 000/- DATED 30.12.2002/- TOTALING TO ` `5 95 000/-. THE ASSESSEE VIDE LETTER DATED 6 TH MARCH 2006 FILED AFFIDAVIT OF SHRI S.K. GADDH WHEREIN IT WAS STATED THAT HE SOLD HIS HOUSE AT C -57 NITI BAGH NEW DELHI AND OUT OF SALES PROCEEDS HE MADE THIS INVESTMENT FROM TIME TO TIME FOR THE URGENT NEEDS OF THE COMPANY .THE ASSESSEE DID NOT SUBMIT T HE DETAILS OF EXPENSES BORN BY HIM NOR ESTABLISHED THE NEXUS OF SUCH WITHDRAWA LS IN CASH FOR SUBSEQUENT INVESTMENT IN SHARE APPLICATION. WHILE REFERRING TO LETTER DATED 6.3.2006 OF THE ASSESSEE AND FINDINGS OF THE AO THE LD. CIT(A) UPH ELD THE CONCLUSION OF THE AO THAT MERELY PRODUCING DETAILS OF IDENTITY OR BANK A CCOUNT OR CONFIRMATIONS DOES NOT ESTABLISH THE ABILITY OF THE PERSONS TO HAVE SU CH AMOUNT. ACCORDINGLY ADDITION OF ` `10 14 000/- WAS SUSTAINED.. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF LEARNED CIT(A).THE LD. AR ON BEHALF OF THE ASSESSEE WHILE REFERRING TO RELEVANT PAGES OF THE PAPER BOOK SUBMITTED THAT THE AMOUNT OF ` `3 14 000/- HAVING BEEN INVESTED OUT OF SALE PROCEEDS OF THE HOUSE OWNED BY SHRI S.K. GADDH THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION. AS REGARDS SMT. VIBHA KHOSLA LEARNED AR SUBMITTED THAT THE AMOUNT HAS BE EN INVESTED OUT OF GIFT RECEIVED BY HER FROM HER MOTHER. TO A QUERY BY THE BENCH THE LD. AR DID NOT REVEAL EITHER DATE OF GIFT NOR ANY EVIDENCE THAT A MOUNT TOWARDS SHARE APPLICATION ITA N O.3500 /DEL./2009 7 BY SMT. VIBHA KHOSLA WAS INVESTED OUT OF GIFT RECE IVED FROM HER MOTHER. HE FURTHER SUBMITTED THAT ON THE RELEVANT DATES WHEN T HE AMOUNTS WERE GIVEN BY HER MOTHER TO SMT. VIBHA KHOSLA THAT COULD BE TREATED AS DATE OF GIFT. TO A FURTHER QUERY BY THE BENCH THE LD. AR AGREED TO PRODUCE CO PY OF APPLICATION FORMS SUBMITTED BY THE AFORESAID PERSONS FOR ALLOTMENT OF SHARES ON ACCOUNT OF INVESTMENT MADE BY THESE THREE PERSONS AND THE RELE VANT SHARE CERTIFICATES. HOWEVER HE DID NOT REPLY AS TO WHY DESPITE HAVING BANK ACCOUNTS THE AMOUNT WAS BROUGHT IN BY WAY OF CASH. AS REGARDS INVESTM ENT BY CAPTAIN SANT DAS THE LEARNED AR SUBMITTED THAT THE AN AMOUNT OF ` ` 2 LACS WAS INVESTED ON 04.04.2002 AND ` `3 LACS ON 25 TH APRIL 2002 OUT OF AN AMOUNT OF ` 5 45 000/- RECEIVED FROM LATE SHRI SANT DAS ON 13.11.2001 WHO SOLD HIS FLA T AND INVESTED ` 4 50 000/- IN CASH AND ` 75 000/- WITHDRAWN FROM HIS POST OFFICE ACCOUNT. ACCORDINGLY THE LD. AR PLEADED THAT ADDITION UPHELD BY THE LEARNED CIT( A) BE DELETED. 5. ON THE OTHER HAND LEARNED DR WHILE SUPPORTING T HE FINDINGS OF THE LD. CIT(A) SUBMITTED THAT THE ASSESSEE DID NOT FURNISH EITHER COPIES OF SHARE APPLICATION FORMS NOR ESTABLISHED THAT THE AMOUNT INVESTED IN CASH WAS IN FACT BROUGHT IN BY THE AFORESAID THREE PERSONS WHO WERE FAMILY MEMBERS OF THE MD OF THE COMPANY .SINCE THE ASSESSEE NEITHER ESTABLI SHED CREDITWORTHINESS OF THE PERSONS ON THE DATES WHEN THE AMOUNT WAS RECEIVED A S SHARE APPLICATION MONEY NOR ESTABLISHED THE GENUINENESS OF THE TRANSACTIONS THE LD. CIT(A) RIGHTLY UPHELD THE ADDITION THE LD. DR ADDED. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THE ISSUE BEFORE US IS AS TO WHETHER THE AMOUNT OF ` 10 14 000/- STATED TO HAVE BEEN RECEIVED IN CASH FROM THE AFORESAID THREE PERS ONS TOWARDS SHARE APPLICATION MONEY CAN BE ADDED U/S 68 OF THE ACT. AS IS EVIDENT FROM THE AFORECITED FACTS THE ASSESSEE CLAIMED THAT SHRI SA TISH KUMAR GADDH MD OF THE COMPANY INVESTED AN AMOUNT OF ` 2 LACS ` 1 4 000/- AND ` 1 00 000 TOWARDS SHARE APPLICATION MONEY. IN HIS AFFIDAVIT DATED 6.3 .2006 [PG. 99 OF PB] IT IS AVERRED BY SHRI S.K.GADDH THAT AN AMOUNT OF ` 3 25 000 WAS WITHDRAWN IN CASH OUT OF SALE PROCEEDS OF HOUSE AT C-57 NITI BAGH NE W DELHI AND INVESTED IN SHARE ITA N O.3500 /DEL./2009 8 OF THE COMPANY M/S GANGA & CONTRACTS LTD. FROM TIME TO TIME. THE RELEVANT EXACT DATES WHEN THESE AMOUNTS WERE INVESTED ARE NOT EVI DENT FROM THE IMPUGNED ORDER NOR FROM ANY OF THE DOCUMENTS INCLUDING COPY OF AFFIDAVIT PLACED IN THE PAPER BOOK. IT WAS ONLY ON A SPECIFIC QUERY BY THE BENCH THAT THE LD. AR INVITED OUR ATTENTION TO PAGE 103 & 132 OF THE PAPER BOOK A ND SUBMITTED THAT AMOUNTS WERE INVESTED ON 8.11.2002..HOWEVER NO EVIDENCE IN SUPPORT OF THIS DATE IS PLACED BEFORE US NOR COPIES OF THE SHAREHOLDERS RE GISTER SHARE APPLICATION FORMS SHARE TRANSFER REGISTER SHARE CERTIFICATES ETC. HAVE BEEN SUBMITTED EVEN AFTER SPECIFIC REQUEST. THERE IS NOTHING TO SUGGEST AS TO WHETHER THE AFORESAID AMOUNT WAS INDEED TOWARDS SHARE APPLICATION MONE Y AND WHY INVESTMENT WAS MADE IN CASH AND THAT TOO IN THREE DIFFERENT AMOUNT S ON THE SAME DATE WHEN THE SAID PERSON POSSESSED A NUMBER OF BANK ACCOUNTS. EV EN NAME OF A DIFFERENT COMPANY VIZ. M/S GANGA & CONTRACTS LTD. IS MENTIONE D IN THE AFORESAID AFFIDAVIT OF SHRI S.K.GADDH. IT MAY BE POINTED OUT THAT THOUG H THE SAID AMOUNT BROUGHT IN BY WAY OF SHARE APPLICATION MONEY IS CLAIMED TO H AVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OF THE COMPANY NO SUCH EVIDENC E WAS PLACED BEFORE THE LOWER AUTHORITIES NOR OUR ATTENTION WAS INVITED TO ANY SUCH EVIDENCE. 6.1 AS REGARDS INVESTMENT IN THE NAME OF LATE SHRI SANT DAS FATHER OF THE MD IT IS STATED THAT SHRI S.K.GADDH RECEIVED AN AMOU NT OF ` 5 45 000/- IN TWO CHEQUES NO.594297 & 594298 FROM SHRI SANT DAS ON 1 3.11.2001 OUT OF SALE PROCEEDS OF FLAT. IN HIS AFFIDAVIT [PG. 120PB] SHR I S.K.GADDH CLAIMED THAT CASH OF ` 10 00 000/- WAS RECEIVED FROM ONE SHRI SUDHIR AGARW AL EVEN THOUGH IN DETAILS IT IS SUBMITTED THAT THREE CHEQUES FOR ` 1 51 000/-; ` 3 00 000/- AND ` 1 00 000/-ALL DATED 9.11.2001 AND AN AMOUNT OF ` 4 49 000/- IN CASH WAS RECEIVED ON SOME UNSPECIFIED DATE. IT IS CLAIMED BY THE ASSESSEE TH AT AN AMOUNT OF ` 2 LACS WAS INVESTED BY SHRI SANT DAS ON 4.4.2002 & ` 3 LACS ON 25.4.2002 IN CASH .HOWEVER COPIES OF SHARE APPLICATION FORMS SHARE CERTIFICATE S OR SHARE REGISTER HAVE NOT BEEN PLACED BEFORE US NOR ANY EVIDENCE THAT IN FACT THE AMOUNT WAS INVESTED BY SHRI SANT DAS .THERE IS NOTHING TO SUGGEST THAT THE AMOUNT WAS INVESTED BY LATE SHRI SANT DAS TOWARDS SHARE APPLICATION MONEY NOR T HE ASSESSEE ESTABLISHED ITA N O.3500 /DEL./2009 9 NEXUS OF THESE AMOUNTS WITH THE SOURCES OF FUNDS F OR THESE TWO AMOUNTS EITHER BEFORE THE LOWER AUTHORITIES AND EVEN BEFORE US. 6.2 AS REGARDS SMT. VIBHA KHOSLA IN HER AFFIDAVI T [PG.125PB] IT IS AVERRED THAT SHE INVESTED ` 2 LACS IN CASH AS SHARE APPLICATION MONEY OUT OF GI FT OF ` 1.50 LACS RECEIVED FROM HER MOTHER IN CASH AND REST OUT OF B ANK AND DOMESTIC SAVINGS. NEITHER THE DATE OF INVESTMENT NOR THE DATE OF GIFT IS MENTIONED IN THE SAID AFFIDAVIT. IN A CONFIRMATION DATED 27.2.2006 BY HER MOTHER IT IS STATED THAT SHE WITHDREW THE AMOUNT OF ` 15 000/- THROUGH CHEQUE NO. 870580 ON 22.10.2002 AND ` 1 17 800 THROUGH CHEQUE NO.870582 ON 26.12.2002 FRO M HER BANK ACCOUNT WITH SBI AND GAVE A GIFT. THE DATE OF GIFT IS NOT S PECIFIED IN THE SAID CONFIRMATION NOR THE LD. AR APPEARING BEFORE US SPECIFIED ANY F IRM DATE OF GIFT OR DATE OF INVESTMENT TOWARDS SHARE APPLICATION BY SMT VIBHA K HOSLA. EVEN COPY OF HER SHARE APPLICATION FORM OR SHARE CERTIFICATES HAS NOT BEEN PLACED BEFORE US DESPITE SPECIFIC REQUEST. 6.3 IT IS APPARENT FROM THE AFORECITED FACTS T HAT THE ASSESSEE DID NOT ESTABLISH GENUINENESS OF THE TRANSACTIONS OF SHARE APPLICATIO N MONEY BEFORE THE LOWER AUTHORITIES OR EVEN CREDITWORTHINESS OF THE INVEST ORS NOR PLACED ANY EVIDENCE THAT THE AMOUNT WAS INDEED BROUGHT IN TOWARDS SHARE APPLICATION MONEY. EVEN BEFORE US SITUATION IS NO BETTER. THOUGH IT IS CLA IMED THAT RECORDS OF THE COMPANY WERE DESTROYED IN FIRE BUT EVEN COPIES OF SHARE CE RTIFICATES IN POSSESSION OF THE AFORESAID THREE INVESTORS WERE NOT PLACED BEFORE US . IN THIS CONNECTION WHILE ADJUDICATING A SIMILAR ISSUE OF SHARE APPLICATION M ONEY ADDED U/S 68 OF THE ACT HONBLE JURISDICTIONAL HIGH COURT OBSERVED IN CIT V. DIVINE LEASING AND FINANCE LTD. [2007] 158 TAXMAN 440 (DELHI) AS UNDER: 16. IN THIS ANALYSIS A DISTILLATION OF THE PRECE DENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF S. 68 OF THE IT ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION NAMELY WHETHER IT HAS BEEN TRA NSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINE SS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF THE ITA N O.3500 /DEL./2009 10 SHAREHOLDERS REGISTER SHARE APPLICATION FORMS SHA RE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXP LANATION BY THE ASSESSEE; (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS T O RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUB SCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD T HE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT WITHOUT MORE AGAINS T THE ASSESSEE; (7) THE AO IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF T HE CREDITOR/SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. 6.4 HONBLE HIGH COURT POINTED OUT IN THE A FORESAID DECISION THAT THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE PERNI CIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MONEY THROUGH THE MASQUERADE OR CHAN NEL OF INVESTMENT IN THE SHARE CAPITAL OF A COMPANY MUST BE FIRMLY EXCORIATE D BY THE REVENUE. IT WAS ALSO OBSERVED THAT WHERE MONEYS HAVE BEEN RECEIVED IN C ASH OR EVEN DEMAND DRAFTS THE STANDARD OF PROOF WOULD BE MUCH MORE RI GOROUS AND STRINGENT THAN WHERE THE TRANSACTION IS BY CHEQUE WHERE THE DATE A ND SOURCE OF THE INVESTMENT CANNOT BE MANIPULATED. IN CIT VS. OASIS HOSPITALIT IES PVT. LTD. HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION DATED 31.1.2011 IN ITA NO. 2093 OF 20111 AFTER A COMPREHENSIVE REVIEW OF ALL IMPORTAN T CASES U/S 68 OF THE ACT CONCLUDED THAT THE INITIAL BURDEN IS UPON THE AS SESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY T HE ASSESSEE. IN ORDER TO DISCHARGE THIS BURDEN THE ASSESSEE IS REQUIRED TO PROVE: (A) IDENTITY OF SHAREHOLDER; (B) GENUINENESS OF TRANSACTION; AND (C) CREDIT WORTHINESS OF SHAREHOLDERS. IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDUAL SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHOLDER WILL HAVE TO BE PR ODUCED BEFORE THE AO TO PROVE HIS IDENTITY. GENUINENESS OF THE TRANSACTION IS TO BE DEMONSTRATED BY SHOWING THAT THE ASSESSEE HAD IN FACT RECEIVED MONEY FROM THE SAID SHAREHOLDER AND IT CAME FROM THE COFFERS FROM THAT VERY SHAREHOLDER. O THER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACTION COULD BE THE COPIES OF T HE SHAREHOLDERS REGISTER SHARE APPLICATION FORMS SHARE TRANSFER REGISTER E TC.. AS FAR AS CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER IS CONCERNED THAT CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDITORS/SU BSCRIBERS SHOWING THAT IT HAD ITA N O.3500 /DEL./2009 11 SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. THIS JUDGMENT FURTHER HOLDS THAT ONCE THESE DOCUMEN TS ARE PRODUCED THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGE THE ON US CAST UPON HIM. 6.5 A SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE HON'BLE APEX COURT IN CIT V. LOVELY EXPORTS (P.) LTD. 216 CTR(SC)195. THE HONBLE HIGH COURT WHILE DECIDING THE ISSUE AS IN LOVELY EXPORTS (P.) LTD. V. CIT 299 ITR 268 WAS OF THE VIEW THAT IN THE CONTEXT OF SECTION 68 OF THE A CT THE ASSESSEE HAS TO PRIMA FACIE ESTABLISH ( I ) THE IDENTITY OF THE CREDITOR ( II ) THE GENUINENESS OF THE TRANSACTIONS WHETHER TRANSMITTED THROUGH BANKING I NDISPUTABLE CHANNELS ( III ) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDI TOR. THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE SAID DECISION OF T HE COURT WAS DISMISSED BY THE SUPREME COURT VIDE ITS DECISION IN [2008] 216 CTR (SC) 195 WHICH READS AS UNDER:- 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME-TAX ACT? WE FIND NO IN SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE AP PLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER THE N THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW. HENCE NO INFIRMITY IS FOUND WITH THE IMPUGNED JUDGMENT.' 6.6 . THE HON'BLE DELHI HIGH COURT IN CIT V. WINSTRAL PETRO CHEMICALS (P.) LTD. IN IT APPEAL NO. 592 OF 2010 IN THEIR JUDGMENT DATED 12-5-2010 WHILE RELYING ON THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN LOVELY EXPORTS (P.) LTD. ( SUPRA ) OBSERVED THAT WHERE THE IDENTITY OF THE SUBSCRIBER HAS BEEN ESTABLISHED BY WAY OF DIFFERENT PROOFS FILED IN THIS REGARD AND IF THE AO ENTERTAINS ANY DOUBT ABOUT THE GENUINENESS OF THE DOCUMENTS THE SAME COULD HAVE B EEN VERIFIED BY HIM FROM THE RECORDS AVAILABLE WITH THE AUTHORITIES. FROM TH E ABOVE SAID IT TRANSPIRES THAT THE ONUS IS UPON THE ASSESSEE TO ESTABLISH THE IDEN TITY OF THE SUBSCRIBER IN RELATION TO THE SHARE APPLICATION MONEY RECEIVED. W HERE THE ASSESSEE FAILS TO ITA N O.3500 /DEL./2009 12 ESTABLISH THE IDENTITY OF THE SUBSCRIBER THE ONUS CAST UPON THE ASSESSEE TO PROVE THAT THE CREDITS ARE GENUINE DOES NOT STAND DISCHAR GED. IN THE CASE BEFORE US THE ASSESSEE DID NOT DISCLOSE THE PAN OF LATE SHRI SA NT DAS NOR OF MRS. VIBHA KHOSLA BEFORE THE LOWER AUTHORITIES AND NOR EVEN BE FORE US . AS ALREADY POINTED OUT ABOVE THE ASSESSEE DID NOT FURNISH ANY EVIDENC E THAT THE AFORESAID AMOUNT OF ` 10 14 000/- RECEIVED IN CASH WAS INDEED RECEIVED FROM THE AFORESAID THREE FAMILY MEMBERS TOWARDS SHARE APPLICATION MONEY NOR THE ASSESSEE EVEN ESTABLISHED THEIR CREDITWORTHINESS ON THE DATES WH EN THE AMOUNT WAS CREDITED IN THE BOOKS OF THE ASSESSEE. THE AVERMENTS MADE IN T HE AFFIDAVITS OF SHRI S.K.GADDH AND MRS. VIBHA KHOSLA ARE VAGUE AND DO NO T EVEN MENTION THE DATES OF INVESTMENT OR DATE OF GIFT IN THE CASE OF MRS. V IBHA KHOSLA. EVEN THE NAME OF THE COMPANY IN WHICH INVESTMENT IS STATED TO HAVE B EEN MADE BY SHRI S.K.GADDH IS A DIFFERENT COMPANY VIZ. M/S GANGA AND CONTRACTS LTD.[PG. 98PB]. THE RELEVANT EXACT DATES OF INVESTMENT HAVE NOT BEE N GIVEN IN THE CASE OF MRS. VIBHA KHOSLA NOR ANY EVIDENCE IN RESPECT OF DATES O F INVESTMENT BY SHRI S.K.GADDH IN THREE DIFFERENT AMOUNTS. IN VIEW OF TH E FOREGOING ESPECIALLY WHEN EVEN COPIES OF THE SHAREHOLDERS REGISTER SHARE APP LICATION FORMS SHARE TRANSFER REGISTER SHARE CERTIFICATES ETC. HAVE NOT BEEN PLA CED BEFORE US APPARENTLY THE INITIAL ONUS TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE HAS NOT BEEN DISCHARGED. WHEN WE KEEP IN MIND THE PRINCIPLES OF LAW LAID DOWN IN THE RATIO IN THE AFO RESAID DECISIONS AND APPLY THE SAME TO THE FACTS OF THIS CASE IT IS DIFFICULT TO FIND FAULT WITH THE APPROACH OF THE LOWER AUTHORITIES. IN THE INSTANT CASE NO STEPS HA VE BEEN TAKEN BY THE ASSESSEE TO DISCHARGE A VERY HEAVY ONUS PLACED UPON IT WHEN THE AMOUNT IS STATED TO HAVE BEEN RECEIVED IN CASH DESPITE THE FACT THAT THE AF ORESAID THREE FAMILY MEMBERS WERE OPERATING BANK ACCOUNTS AND NO REASONS AT ALL HAVE BEEN ADDUCED FOR RECEIPT OF AMOUNT IN CASH. IN NUTSHELL THE GENUINE NESS OF THE TRANSACTIONS HAS NOT BEEN ESTABLISHED NOR CREDITWORTHINESS OF THE I NVESTORS ON THE DATES WHEN THE AMOUNT WAS RECEIVED BY THE ASSESSEE IN CASH . IN VIEW OF THE FOREGOING ESPECIALLY WHEN THE LD. AR ON BEHALF OF THE ASSESSE E DID NOT PLACE ANY MATERIAL ITA N O.3500 /DEL./2009 13 BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT V IEW IN THE MATTER WE ARE NOT INCLINED TO INTERFERE. THEREFORE GROUND NO.2 IN TH E APPEAL IS DISMISSED.. 7. GROUND NO.3 RELATES TO DISALLOWANCE OF DEPRECIAT ION OF FIXED ASSETS DESTROYED IN FIRE. THE AO NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE CLAIMED DEPRECIATION ON CERTAIN A SSETS WHICH WERE EITHER SOLD OR DESTROYED IN FIRE OR TAKEN BY THE FINANCIER DUE TO NON-PAYMENT OF LOAN . TO A QUERY BY THE AO THE ASSESSEE SUBMITTED THAT DEPREC IATION HAS BEEN CORRECTLY CLAIMED. HOWEVER THE AO DISALLOWED THE CLAIM FOR DEPRECIATION OF ` 10 09 215/- (AS CALCULATED IN PARA 2 OF THE ASSESSMENT ORDER) O N THE GROUND THAT ASSETS EITHER DESTROYED BY FIRE OR HAVING BEEN SOLD WERE NOT EXISTING AS ON 31.03.2003. 8. ON APPEAL THE LEARNED CIT(A) UPHELD THE FINDING S OF THE AO ON THE GROUND THAT DEPRECIATION COULD NOT BE ALLOWED ON NO N EXISTING ASSETS. 9 THE ASSESSEE IS NOW IN APPEAL AGAINST THE AFORESA ID FINDINGS OF LEARNED CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE CONTEN DED THAT THEY HAD CLAIMED DEPRECIATION ON VARIOUS ASSETS UNTIL THE DATE OF F IRE. IN THE EVENT THEIR CLAIM FOR DEPRECIATION IS DISALLOWED THE ASSESSEE MAY BE ALL OWED LOSS ON FIRE ON THE BASIS OF WDV AS ON 31.3.2002. TO A QUERY BY THE BENCH THE LD. AR ADMITTED THAT THEY HAVE RAISED GROUND ONLY WITH REGARD TO DISALLOWANCE OF DEPRECIATION AND NO SUCH GROUND RELATING TO CLAIM OF LOSS HAS BEEN RAISED. O N THE OTHER HAND THE LD. DR SUPPORTED THE FINDINGS OF LEARNED CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY THE ASSETS ON WHICH DEPRECIATION HAS BEEN DISALLOWED WERE EITHER DESTROYED IN FIRE OR SOLD. WE FIND THAT THE ASSESSE E CLAIMED DEPRECIATION OF NON EXISTING ASSETS DETAILED IN PARA 4 OF THE IMPUGNED ORDER. THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT DISPUTE THE DISALLOWANCE OF DE PRECIATION BUT CLAIMED THAT LOSS IN FIRE MAY BE ENHANCED. THE ISSUE OF LOSS IN FIRE IS NOT RAISED IN GROUNDS OF APPEAL BEFORE US NOR IT EMERGES FROM THE FINDINGS O F THE LD. CIT(A) . THE ISSUE OF LOSS IN FIRE IN FACT WAS NEVER RAISED BEFORE THE LD. CIT(A) THE CLAIM FOR SUCH LOSS ITA N O.3500 /DEL./2009 14 OF ` 6 56 021/- HAVING BEEN ALLOWED BY THE AO. EVEN IN THEIR LETTER FILED SUBSEQUENT TO THE HEARING THE LD. AR DID NOT DETA IL ANY WORKING OF LOSS. IN VIEW OF THE FOREGOING ESPECIALLY WHEN THE ISSUE OF DI SALLOWANCE OF DEPRECIATION HAS NOT BEEN DISPUTED BEFORE US GROUND NO.3 IN THE APP EAL IS DISMISSED. HOWEVER THE ASSESSEE IS FREE TO APPROACH THE AO FOR THEIR C LAIM OF INCREASE IN LOSS DUE TO FIRE IN ACCORDANCE WITH LAW. 11. GROUND NO.4 RELATES TO DISALLOWANCE OF ADHOC EXPENSES OF ` 10 00 000/- SINCE THE ASSESSEE DID NOT PRODUCE RELEVANT BOOKS O F ACCOUNTS AND VOUCHERS IN SUPPORT OF EXPENSES CLAIMED FOR THE PERIOD PRIOR T O 26.11.2002 THE SAID BOOKS AND VOUCHERS CLAIMED TO HAVE BEEN DESTROYED IN FIR E AND THE ASSESSEE SUO MOTU OFFERED DISALLOWANCE OF ` 86 046.70 IN THEIR LETTER DATED 22.3.2006 THE AO DISALLOWED AN AMOUNT OF ` 10 LACS OUT OF ` 1 33 09 311/- ON ACCOUNT OF ADMINISTRATIVE AND EXPENSES AND OTHER OVERHEADS ON THE GROUND THAT THE ASSESSEE HAD CONTRACT RECEIPTS OF MORE THAN ` 8 CRORES AND STILL DECLARED LOSS OF ` 57 405/- IN ITS RETURN AND DID NOT PRODUCE EVEN THE VOUCHERS RELATING TO EXPENSES AT THEIR SITES. INTER ALIA THE AO REFERRE D TO PROVISIONS OF SEC. 44AD OF THE ACT STIPULATING ESTIMATION OF GROSS PROFITS @8 % IN THE EVENT CONTRACT RECEIPTS WERE LESS THAT ` 40 LACS AND THE ASSESSEE BEING NOT MAINTAINING ANY BOOKS OF ACCOUNTS.. 12. ON APPEAL THE LD. CIT(A) UPHELD THE DISALLOWAN CE ON THE GROUND THAT THE ASSESSEE FAILED TO SUBSTANTIATE THEIR CLAIM FOR EXP ENSES. 13. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAIN ST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR REITERATED THEIR SUBMISS IONS BEFORE THE LD. CIT(A). TO A QUERY BY THE BENCH THE LD. AR SUBMITTED THAT NET PROFIT IN THE YEAR UNDER CONSIDERATION WAS 0.35% AS AGAINST 1.04 % IN THE PR ECEDING ASSESSMENT YEAR AND 3.56% IN THE AY 2001-02. HOWEVER NO REASONS HA VE BEEN ADDUCED BEFORE US FOR THIS SUBSTANTIAL FALL IN PROFITS. THE LD. DR ON THE OTHER HAND SUPPORTED THE FINDINGS OF THE LD. CIT(A). ITA N O.3500 /DEL./2009 15 14. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. INDISPUTABLY THE ASSESSEE DID NOT PRODUCE ANY BOOK S OF ACCOUNTS OR VOUCHERS IN SUPPORT OF EXPENSES INCURRED PRIOR TO THE FIRE WHIL E THERE IS SUBSTANTIAL FALL IN THE PROFITS IN THE YEAR UNDER CONSIDERATION VIS-A-VIS R ESULTS OF THE PRECEDING YEARS. ONCE THE ASSESSEE FAILED TO FURNISH THE RELEVANT DE TAILS AND SUBSTANTIATE THE BOOK RESULTS FOR THE RELEVANT PERIOD UNDER CONSIDE RATION IT WAS OPEN TO THE AO AND THE LD. CIT(A) TO REJECT THE BOOK RESULTS AND E STIMATE THE PROFITS. IT IS NOT A CASE WHERE BOOKS OF ACCOUNT ARE PROPERLY MAINTAINED AND THE AO DISALLOWED EXPENSES IGNORING THE BOOKS OF ACCOUNT WITHOUT GIV ING ANY REASONS. NO DOUBT THE AO/CIT(A) SHOULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TO TALLY ARBITRARILY BUT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED IN A BEST JUDGMENT ASSESSMENT AND IT IS THE ASSESSEE HIMSELF WHO IS T O BLAME AS HE DID NOT SUBMIT PROPER ACCOUNTS AND DETAILS.[ KACHWALA GEMS VS JCIT 288 ITR 10 (2007)(SC) ]. SINCE THE ASSESSEE DID NOT SUBSTANTIATE THE BOOK RESULTS WITH COGENT EVIDENCE BEFORE THE AO OR THE LD. CIT(A) NOR EXPLAINED REA SONS FOR DECLINE IN PROFITS AND NO MATERIAL HAS BEEN PLACED BEFORE US SO AS TO ENA BLE US TO TAKE A DIFFERENT VIEW IN THE MATTER WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LEARNED CIT(A) LE UPHOLDING THE DISALLOWANCE OF ` 10 LACS OUT OF EXPENSES. IN THIS VIEW OF THE MATTER AND CONSIDERING THE TOTALITY OF FACTS AND CI RCUMSTANCES OF THE CASE WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). THEREFORE GROUND NO 4 IN THE APPEAL IS ALSO DISMISSED. 15. GROUND NO.1 IN THE APPEAL BEING GENERAL IN NATU RE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROUND DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND ACCORDINGLY THESE GROUNDS ARE DI SMISSED. 16. NO OTHER SUBMISSION OR PLEA WAS MADE BEFORE U S. ITA N O.3500 /DEL./2009 16 17. IN THE RESULT APPEAL IS DISMISSED. SD/- SD/- (C.L. SETHI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) COPY OF THE ORDER FORWARDED TO :- 1. M/S GANGA CONTRACTS & PROJECTS LTD. G-17 SECTO R-39 (BASEMENT) NOIDA UP. 2. INCOME TAX OFFICER WARD 12 (1) NEW DELHI. 3. CIT(A)-XII NEW DELHI. 4. CIT CONCERNED. 5. DR ITAT C BENCH NEW DELHI 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI ORDER PRONOUNCED IN OPEN COURT