M/s. Sneh Finance & Invesment, Pune v. ACIT, Pune

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO.518/PN/10 (ASSTT. YEAR 1999-00) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ITA NO. 519/PN/10 (ASSTT. YEAR 2000-01) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ITA NO. 482/PN/10 (ASSTT. YEAR 2000-01) DCIT CENTRAL CIRCLE-2(2) PUNE .... APPELLANT VS. M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K . RESPONDENT ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 2 OF 10 ITA NO. 520/PN/10 (ASSTT. YEAR 2001-02) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ITA NO. 522/PN/10 (ASSTT. YEAR 2002-03) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ITA NO. 483/PN/10 (ASSTT. YEAR 2002-03) DCIT CENTRAL CIRCLE-2(2) PUNE .... APPELLANT VS. M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K . RESPONDENT ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 3 OF 10 ITA NO. 525/PN/10 (ASSTT. YEAR 2003-04) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ITA NO. 524/PN/10 (ASSTT. YEAR 2004-05) M/S. SNEH FINANCE & INVESTMENT 1194/1 VRINDAVAN SOCIETY IIND FLOOR SHIVAJINAGAR PUNE-411005 PAN NO. AAHFS1098K .... APPELLANT VS. ACIT CENTRAL CIRCLE-2(2) PUNE . RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : SHRI ABHAY DAMLE ORDER PER D. KARUNAKARA RAO AM THERE ARE 8 APPEALS UNDER CONSIDERATION. OUT OF THEM A COUPLE OF APPEALS ARE FILED BY THE REVENUE AND THEY RELATE TO THE A.Y 2 000-01 AND 2002-03. CONSIDERING THE COMMONALITY OF THE GROUNDS AND THE FA CTS ALL THESE APPEALS ARE CLUBBED AND ALL OF THEM ARE BEING ADJUDICATED IN THI S COMMON ORDER. ITA NO. 518/PN/10 (A.Y 1999-00 ASSESSEES APPEAL) 2. FOR THE SAKE OF CONVENIENCE THE ASSESSEES APPEA L FOR THE A.Y 1999-00 IS TAKEN AS A SAMPLE FOR ADJUDICATION AND THE GROUNDS FO R THIS APPEAL READS AS FOLLOWS:- ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 4 OF 10 1] THE LEARNED CIT(A0 ERRED IN CONFIRMING THE DISA LLOWANCE OF INTEREST PAID TO RS. 19 91 609/- WITHOUT APPRECIATI NG THAT THE APPELLANT HAD NOT CHARGED INTEREST ON THE FUNDS GIVEN TO ITS SISTER CONCERNS BECAUSE NO INTEREST WAS CHAR GED ON THE FUNDS TAKEN FROM THEM AND HENCE THERE WAS NO R EASON TO MAKE ANY DISALLOWANCE. 2] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT SUC H DISALLOWANCE OF INTEREST WAS NOT WARRANTED IN THE A SST. U/S. 153A SINCE NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE SEARCH RELATING TO THE PAYMENT OF INTEREST AND HENC E THE DISALLOWANCE MADE IS NOT WARRANTED. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCING AND BROKERAGE. THERE WAS SEARCH ACTION U/S. 132 IN SNEH GROUP OF CASES ON 16-10-2003. CONSEQUENTLY THE ASSESSMENTS WERE COMPLETED U/S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT. DURING THE ASSESSMENT PROCEEDINGS A.O MADE AN ADDITION ON ACCOUNT OF DISA LLOWANCE OF INTEREST EXPENDITURE DEBITED TO THE P & L ACCOUNT. A.O IS OF THE OPINION THAT THE RELATABLE LOANS RAISED BY THE ASSESSEE WERE IN FACT PASSED ON TO THE SISTER CONCERNS OF THE ASSESSEE BY WAY OF INTEREST FREE FUNDS AND THEREFORE T HE IMPUGNED INTEREST EXPENDITURE IS NOT INCURRED FOR THE BUSINESS OF THE ASS ESSEE. DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE SUBMITTED THAT T HE TRANSFER OF THESE FUNDS FREE OF INTEREST TO THE SISTER CONCERNS ACCOUNTS WAS DONE ON ACCOUNT OF COMMERCIAL EXPEDIENCY . AS PER THE ASSESSEE IF THE FUNDS ARE NOT SUPPLIED BY THE ASSESSEE TO ITS SISTER/RELATED CONCERNS THE SNEH GROUP INCLUDING THE ASSESSEE WOULD SUFFER IMAGE DAMAGE AND IT IS IN THE INTEREST OF THE REPUTATION OF THE ASESSEE TO SUPPLY SUCH FUNDS FREE OF INTEREST. H OWEVER ON FINDING THAT ASSESSEE FAILED TO DEMONSTRATE THE SPECIFIC REASON IN SUPPORT OF THE COMMERCIAL EXPEDIENCY THE CIT(A) DISMISSED THE EXPLANATION OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE MADE BY THE A.O. AGGRIEVED WITH THE SAME ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 4. DURING THE PROCEEDINGS LD. COUNSEL FOR THE ASSESSE E MENTIONED THAT THE GROUP IMAGE & ITS REPUTATION AND IT SHOULD CONSTITUTE THE COMMERCIAL EXPEDIENCY AND THEREFORE IN VIEW OF THE SUPREME COURT JUDGEMENT IN THE CASE OF S.A BUILDERS LTD. 288 ITR 1 THE DISALLOWANCE IS UNCALLED FOR AND HOWEVER HE RELIED ON THE SUBMISSION MADE BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS AND REFERRED TO PAGE 15 TO 19 OF THE PAPER B OOK. ON THE OTHER HAND LD. DR FOR THE REVENUE IS CRITICAL OF THE SAID ARGUMEN TS OF THE ASSESSEE AND STATED THAT THE CONCEPT OF COMMERCIAL EXPEDIENCY IS ENTIRELY DIFFERENT FROM THE REPUTATION OF THE COMPANY AND THE REPUTATION OF THE C OMPANY DOES NOT MEET THE ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 5 OF 10 REQUISITE FEATURES OF THE COMMERCIAL EXPEDIENCY. FURTHE R RELYING ON KERALA HIGH COURT JUDGEMENT IN THE CASE OF POPULAR VEHICLES AND S ERVICES LTD. 325 ITR 523 (KER) AND PUNJAB STAINLESS STEEL INDS. 324 ITR 396 ( DELHI) LD. DR FOR REVENUE MENTIONED THAT THE COMMERCIAL EXPEDIENCY IS AN APPRO VED AND SETTLED ISSUE; BUT THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THAT SUCH EXPEDIENCY REALLY EXISTED IN TRANSFER/DIVERSION OF FUNDS TO THE SISTER CONCERNS. HE ALSO MENTIONED THAT THE ASSESSEE FAILED TO DISCHARGE HIS ONUS IN THE INSTANT CASE AND THEREFORE HE ARGUED FOR CONFIRMING THE ADDITIONS CONFIRMED BY THE CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AND THE CITATIONS RELIED UPON BY BOTH THE PARTIES. TH E CORE ISSUE IS WHETHER THERE EXISTS COMMERCIAL EXPEDIENCY OR NOT IN TRANSFER/DIVERS ION OF FUNDS TO THE SISTER RO RELATED CONCERNS WITHOUT CHARGING OF INTEREST AND WHETH ER THE REPUTATION OF THE GROUP CONSTITUTES COMMERCIAL EXPEDIENCY. IN OUR OPINIO N CIT(A) HAS GONE INTO THE FACTS OF THE CASE AND CAME TO THE RIGHT CONCLUSI ON IN DISMISSING THE SUBMISSIONS OF THE ASSESSEE. REPUTATION OF THE SNEH GROUP DEALS WITH THE GOODWILL OF THE COMPANY; WHERE AS THE COMMERCIAL EXPE DIENCY RELATES TO THE COMMERCE AND PROFITS OF THE ASSESSEES COMPANY AND NO T THAT OF THE SISTER CONCERNS. IMPUGNED TRANSFER OF FUNDS WITHOUT INTEREST WAS AIMED AT THE EXPENSE OF THE ASSESSEES PROFITS. AS SUCH IN THE PRESENT CA SE NO SPECIFIC TRANSACTIONS OR EVENTS IS BROUGHT TO OUR NOTICE THAT IF THE FUNDS ARE NOT TRANSFERRED TO THE SISTER CONCERNS THE ASSESSEE WOULD SUFFER FINANCIALLY AND C OMMERCIALLY. THEREFORE WE FIND NO COMMERCIAL EXPEDIENCY IN THESE TRANSACTIONS V IS A VIS THE ASSESSEE. FURTHER IT IS THE RESPONSIBILITY OF THE ASSESSEE TO D EMONSTRATE SUCH COMMERCIAL EXPEDIENCY AND THE ASSESSEE FAILED TO DISCHARGE THE SAME SATISFACTORILY AND SUCCESSFULLY. THEREFORE WE ARE OF THE OPINION ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY GROUND NO. 1 OF THE APPEAL IS DISMISSED. 6. REGARDING GROUND NO.2 LD. COUNSEL FOR THE ASSESSE E FAIRLY MENTIONED THAT HE WOULD NOT PRESS THE SAME AND LD. DR HAS NO OBJECT ION IN THIS REGARD. THEREFORE WE ARE OF THE OPINION THAT THE GROUND NO. 2 HAS TO BE DISMISSED AS NOT PRESSED . 7. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED . ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 6 OF 10 ITA NO. 519/PN/10 (A.Y 2000-01 ASSESSEES APPEAL) 8. THE GROUNDS OF THIS APPEAL RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 1999-00 AND T HE SAME ALREADY REPRODUCED IN THE SUCCEEDING PARAGRAPHS. BOTH THE PARTI ES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING THE COMMONALITY OF THE FACTS AND THE ARGUMENTS WE A RE OF THE OPINION THAT OUR DECISION HAS RELEVANCE TO THE IMPUGNED GROUNDS OF THI S APPEAL AND HENCE THIS APPEAL SHOULD ALSO BE DISMISSED IN VIEW OF OUR DETAI LED REASONING GIVEN IN THE CONTEXT OF ITA NO. 518/PN/10 FOR THE A.Y 1999-00. AC CORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 482/PN/10 (A.Y 2000-01 REVENUES APPEAL) 10. THIS IS A CROSS APPEAL FILED BY THE REVENUE AGAI NST THE CIT(A)S DECISION RELATING TO NETTING OFF OF THE INTEREST RECEIVED BY T HE ASSESSEE. RELEVANT DISCUSSION IS GIVEN IN PARA 7.4 OF THE IMPUGNED ORDER THE SAME IS REPRODUCED AS UNDER:- 7.4 IN VIEW OF THE DISCUSSIONS MADE IN PARAS 7.1 T O 7.3 OF THIS ORDER I FIND THAT THE AO WAS CORRECT IN MAKING THE DISALLOW ANCE OF INTEREST. HOWEVER WHILE DOING SO I FIND THAT THE PRAYER OF THE APPELLANT TO RESTRICT THE DISALLOWANCE AFTER NETTING IT OFF FROM THE INTE REST INCOME EARNED IS ACCEPTABLE IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AS TO THAT EXTENT THE APPELLANT CAN BE HELD TO HAVE DEPLOYED ITS BORROWED FUNDS AS PER COMMERCIAL AND BUSINESS NEEDS OF THE APPELLANT. THE REFORE AO IS DIRECTED TO RESTRICT THE DISALLOWANCE ACCORDINGLY. IN THE PR ESENT CASE THE APPELLANT GETS A RELIEF OF RS. 15 01 694/-. THE APPEAL IS THEREFORE PARTLY ALLOWED ON THIS GROUND OF APPEAL. 11. ABOVE DECISION OF THE CIT(A) IN OUR OPINION DOES NOT CALL FOR ANY INTERFERENCE. THEREFORE THE GROUND RAISED BY THE REVENU E IS REQUIRED TO BE DISMISSED. ITA NO. 520/PN/10 (A.Y 2000-01 ASSESSEES APPEAL) 12. THE GROUNDS OF THIS APPEAL RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 1999-00 AND T HE SAME ALREADY REPRODUCED IN THE SUCCEEDING PARAGRAPHS. BOTH THE PARTI ES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 7 OF 10 THE COMMONALITY OF THE FACTS AND THE ARGUMENTS WE A RE OF THE OPINION THAT OUR DECISION HAS RELEVANCE TO THE IMPUGNED GROUNDS OF THI S APPEAL AND HENCE THIS APPEAL SHOULD ALSO BE DISMISSED IN VIEW OF OUR DETAI LED REASONING GIVEN IN THE CONTEXT OF ITA NO. 518/PN/10 FOR THE A.Y 1999-00. AC CORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO. 522/PN/10 (A.Y 2000-01 ASSESSEES APPEAL) 13. THE GROUNDS OF THIS APPEAL RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 1999-00 AND T HE SAME ALREADY REPRODUCED IN THE SUCCEEDING PARAGRAPHS. BOTH THE PARTI ES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING THE COMMONALITY OF THE FACTS AND THE ARGUMENTS WE A RE OF THE OPINION THAT OUR DECISION HAS RELEVANCE TO THE IMPUGNED GROUNDS OF THI S APPEAL AND HENCE THIS APPEAL SHOULD ALSO BE DISMISSED IN VIEW OF OUR DETAI LED REASONING GIVEN IN THE CONTEXT OF ITA NO. 518/PN/10 FOR THE A.Y 1999-00. AC CORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO. 483/PN/10 (A.Y 2000-01 REVENUES APPEAL) 14. THE GROUNDS OF THIS APPEAL RAISED BY THE REVENUE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 2000-01. BOTH THE PARTIES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING THE COMMONALITY OF THE FACTS AND THE ARGU MENTS WE ARE OF THE OPINION THAT THIS APPEAL SHOULD ALSO BE DISMISSED I N VIEW OF OUR DETAILED REASONING GIVEN IN THE CONTEXT OF ITA NO. 482/PN/10 FOR THE A.Y2000-01. ACCORDINGLY GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO. 525/PN/10 (A.Y 2003-04 ASSESSEES APPEAL) 15. THE GROUNDS 1 AND 2 OF THIS APPEAL RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 1999-00 A ND THE SAME ALREADY REPRODUCED IN THE SUCCEEDING PARAGRAPHS. BOTH THE PARTI ES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING THE COMMONALITY OF THE FACTS AND THE ARGUMENTS WE A RE OF THE OPINION THAT OUR DECISION HAS RELEVANCE TO THE IMPUGNED GROUNDS OF THI S APPEAL AND HENCE THIS APPEAL SHOULD ALSO BE DISMISSED IN VIEW OF OUR DETAI LED REASONING GIVEN IN THE CONTEXT OF ITA NO. 518/PN/10 FOR THE A.Y 1999-00. AC CORDINGLY THESE TWO GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 8 OF 10 16. GROUND NO. 3 RELATES TO CONFIRMING OF ADDITION OF RS. 6.5 LAKHS. RELEVANT FACTS ARE THAT DURING THE SEARCH OPERATION FROM THE BA NK ACCOUNTS OF SHRI B.H. SHAH THE REVENUE CULLED OUT THAT SRI SHAH ISSUED BEA RER CHEQUES IMPLYING THE ASSESSEE. BASED ON THESE ENTRIES/TRANSACTION THE REV ENUE IS OF THE OPINION THAT THESE AMOUNTS FIGURING ON THESE BEARER CHEQUES CONSTIT UTES LOANS GIVEN TO THE ASSESSEE. FURTHER THE REVENUE IS OF THE OPINION THAT SRI SHAH SINCE FOLLOWING THE PROCEDURE OF RECOVERING THE LOANS TRI-MONTHLY FROM THE CU STOMERS THE ASSESSEE WOULD REPAID THE SAID LOANS WITH INTEREST AND THEREFORE THE SAID REPAYMENTS CONSTITUTES UNEXPLAINED CREDITS OF THE ASSESSEE. ACC ORDINGLY THE REVENUE PROCEEDED TO MAKE ADDITION U/S. 68 OF THE INCOME TAX ACT IGNORING THE FACT THE SAID SECTION DEMANDS EXISTENCE OF THE ENTRIES IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. DURING THE FIRST APPELLATE PROCEEDINGS ASSE SSEE MADE VARIOUS SUBMISSIONS AND ONE SUCH SUBMISSION RELATES TO QUEST ION OF THE LEGAL VALIDITY OF SUCH ADDITIONS. HOWEVER CIT(A) PROCEEDED TO CONFIRM T HE ADDITION OF RS 6.5 LAKHS. AGGRIEVED WITH THE SAME THE ASSESSEE FILED P RESENT APPEAL BEFORE US. 17. DURING THE PROCEEDINGS LD. AR FOR THE ASSESSEE ARG UED STATING THAT THESE AMOUNTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNT OF T HE ASSESSEE AND THEREFORE THE ADDITION CANNOT BE MADE U/S. 68 OF THE ACT. FURT HER LD. AR MENTIONED THAT THIS IS THE CASE WHERE AMOUNTS/LOANS WERE NEVER GIVEN TO THE ASSESSEE OR NEVER FIGURED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AN D THEREFORE THE QUESTION OF ASSESSEE REPAYING THE SAME TO MR. SHAH IS MERELY A PI GMENT OF IMAGINATION OF THE REVENUE. IN RESPONSE TO THE QUESTIONING BY THE B ENCH ON WHETHER THERE WAS ANY EXAMINATION OR CROSS- EXAMINATION OF MS. SHAH AS WELL AS THE ASSESSEE BOTH THE PARTIES RELIED ON THE ORDERS OF THE REVENUE. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORD ER OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. SO FAR AS THE DISC OVERIES OF THE SEARCH ARE CONCERNED THE ONLY FACT THAT IS BROUGHT TO OUR NOTICE IS THE EXISTENCE OF ISSUE OF CHEQUE BY MR. SHAH THROUGH BANKING ROUTES. THERE IS NO EVIDENCE TO DEMONSTRATE THAT THE IMPUGNED MONEY REACHED THE ASSES SEE. AO DID NOT DISCUSS OR DESCRIBE THE CONTENT OF THE ENTRIES IN THE IMPUGNED BEARER CHEQUE AND WHO SIGNED ON THE CHEQUES WHILE ENCASHING THEM. ARE THES E INDIVIDUALS ARE RELATED OR EMPLOYEES OF THE ASSESSEE? CONCERNED IMPORTANT FACT S ARE NOT BROUGHT TO THE ORDERS OF THE REVENUE. MISSING LINKS WITH REGARD TO THE FACT OF ENCASHMENT OF THIS BEARER CHEQUES RELATING TO WHO IS THE FINAL RECIPIENT OF THE CASH AFTER ENCASHING THEM HAVE TO BE BROUGHT TO THE RECORDS. FURTHER WE F IND THAT THE REVENUE HAS ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 9 OF 10 NOT EXAMINED MRS. SHAH WITH REGARD TO THE BENEFICIARIES OF THE CASH RESULTANT OF THE ENCASHMENT OF THE BARER CHEQUES. UNLESS THESE FA CTS ARE BROUGHT TO THE NOTICE THE A.OS DECISION TO INVOKE THE PROVISIONS OF SEC. 68 IS PREMATURE. THEREFORE WE ARE OF THE OPINION THAT THE MATTER HAS TO SENT BACK TO THE FILES OF THE A.O FOR EXAMINING THE ISSUE AFRESH. A.O SHALL RECO RD THE STATEMENT AS PER THE PROCEDURE FROM MR. SHAH AS WELL AS THE THE ASSESSEE ON THIS ISSUE. AO MAY ALSO UNDERTAKE REQUISITE INVESTIGATION WITH THE CONCERNED B ANKS FOR BRINGING OUT THE IDENTITY OF THE PERSONS WHO ENCASHED THE IMPUGNED CH EQUES AND BRING OUT THE NEXUS OF SUCH PERSONS TO THE ASSESSEE OR SRI SHAH BEF ORE THE ADDITION IS MADE UNDER APPROPRIATE PROVISIONS OF THE ACT. A.O SHALL GRAN T REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THIS REGARD. ACCORDI NGLY GROUND NO. 3 IS SET ASIDE . 19. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ITA NO. 524/PN/10 (A.Y 2004-05 ASSESSEES APPEAL) 20. THE GROUNDS OF THIS APPEAL RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RELATABLE TO THE ASSESSMENT YEAR 1999-00 AND T HE SAME ALREADY REPRODUCED IN THE SUCCEEDING PARAGRAPHS. BOTH THE PARTI ES MENTIONED THAT THE ARGUMENTS IF ANY ARE ALSO COMMON AND APPLY EQUALLY TO THIS APPEAL. CONSIDERING THE COMMONALITY OF THE FACTS AND THE ARGUMENTS WE A RE OF THE OPINION THAT OUR DECISION HAS RELEVANCE TO THE IMPUGNED GROUNDS OF THI S APPEAL AND HENCE THIS APPEAL SHOULD ALSO BE DISMISSED IN VIEW OF OUR DETAI LED REASONING GIVEN IN THE CONTEXT OF ITA NO. 518/PN/10 FOR THE A.Y 1999-00. AC CORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 21. IN THE RESULT ALL THE EIGHT APPEALS ARE DECIDED AS MENTIONED ABOVE. ORDER PRONOUNCED ON 21 ST FEBRUARY 2011 SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 21 ST FEBRUARY 2011 R ITA NO. 518 519 482 522 483 520 525 524/PN/10 A.Y 1999-00 TO 2004-05 PAGE 10 OF 10 COPY OF THE ORDER IS FORWARDED TO : 1. DEPARTMENT 2. ASSESSEE 3. CIT(A)-IV PUNE 4. CIT-CENTRAL PUNE 5. D.R. ITAT A BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE