ACIT, Kanpur v. M/s. Zaz Fashions, Kanpur

ITA 662/LKW/2010 | 2007-2008
Pronouncement Date: 14-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 66223714 RSA 2010
Assessee PAN AAAFZ0439N
Bench Lucknow
Appeal Number ITA 662/LKW/2010
Duration Of Justice 4 month(s) 9 day(s)
Appellant ACIT, Kanpur
Respondent M/s. Zaz Fashions, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 14-03-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 14-03-2011
Date Of Final Hearing 09-03-2011
Next Hearing Date 09-03-2011
Assessment Year 2007-2008
Appeal Filed On 04-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B - BENCH LUCKNOW. BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI ACCOUNTANT MEMBER I.T.A.NO.662(LKW.)/2010 A.Y. : 2007-08 THE ACIT- I VS. M/S.ZAZ FASHIONS KANPUR 201/193 SHEETLA BAZAR JAJMAU KANPUR. PAN AAAFZ0439N (APPELLANT) (RESPONDENT) C.O.NO.54(LKW.)/2010) ( IN I.T.A.NO.662(LKW.)/2010) A.Y. : 2007-08 M/S. ZAZ FASHIONS VS. THE ACIT-I KANPUR. KANPUR. (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI ANADI VERMA SR.D.R. ASSESSEE BY: SHRI SUDHINDRA KUMAR JAIN C.A . O R D E R PER N.K.SAINI ACCOUNTANT MEMBER THE APPEAL BY THE DEPARTMENT AND THE CROSS OBJEC TION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 13.8. 2010 OF THE LD.CIT(A)-II KANPUR. FIRST WE WILL DEAL WITH THE APPEAL OF THE DEPARTMENT IN I.T.A.NO.662(LKW)/2010. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE LD. COMMISSIONER OF INCOMETAX (APPEALS )-II KANPUR 2 HAS ERRED IN LAW AND ON FACTS IN REJECTING THE ESTI MATION OF GROSS PROFIT @ 28% MADE BY THE ASSESSING OFFICER WI THOUT APPRECIATING THE FACT THAT ESTIMATE WAS BASED ON TH E G.P. RATE DECLARED IN THE IMMEDIATE PREVIOUS YEAR AS WELL AS THE G.P. RATE DECLARED IN EARLIER ASSESSMENT YEAR. 2. THAT THE LD. COMMISSIONER OF INCOMETAX (APPEALS )-II KANPUR HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE AD DITION OF RS.24 36 000/- TO RS.5 00 000/- ON ACCOUNT OF ADDIT IONAL PROFIT WITHOUT GIVEN ANY BASIS FOR RESTRICTING THE ADDITIO N. 3. THAT THE LD. COMMISSIONER OF INCOMETAX (APPEALS) -II KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.22 58 277/- UNDER SECTION 40(A)(IA) OF THE INCOM E TAX ACT 1961 ON ACCOUNT OF NON-DEDUCTION OF TAX ON FREIGHT PAID BY HOLDING THAT THERE IS NO CONTRAVENTION OF PROVISION S OF SECTION 194C OF THE INCOME TAX ACT WITHOUT APPRECIATING TH E FACT THAT THE STATUTORY AUDITOR OF THE ASSESSEE HAD MADE ADVE RSE QUALIFICATIONS IN RESPECT OF THIS AMOUNT IN THE STA TUTORY TAX AUDIT REPORT IN FORM NO.3CD. 4. IN DOING SO LD. COMMISSIONER OF INCOME TAX (AP PEALS)-IL KANPUR HAS FAILED TO APPRECIATE THE FACT THAT DURIN G THE ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT GIVE ANY EVIDENCE IN SUPPORT OF HAVING DEDUCTED THE TDS AND PAYMENT THEREOF IN THE GOVERNMENT ACCOUNT AS IT WAS MANDATO RY ON THE PART OF THE ASSESSEE AS PER THE PROVISIONS CONTAINE D UNDER SECTION 194C OF THE INCOME TAX ACT 1961. 5. THAT THE LD. COMMISSIONER OF INCOMETAX (APPEALS) -LI KANPUR HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.22 58 277/- MADE UNDER SECTION 40(A)(IA) WITH THE DIRECTION TO THE ASSESSING OFFI CER TO VERIFY THE FACTS OF DEDUCTION OF TDS WITHOUT GIVING ANY D IRECTION IN THE APPELLATE ORDER TO THE EFFECT THAT/IF THE TDS IS NOT FOUND DEDUCTED WHETHER THE RELIEF ALLOWED TO THE ASSESS EE WOULD BE WITHDRAWN OR NOT. 6. THAT THE ORDER OF THE LD. CIT (A)-II KANPUR DAT ED 13.08.2010 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASS ESSING 3 OFFICER DATED 04.12.2009 BE RESTORED. 7. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND/OR TO ADD ANY FRESH GROU NDS AS AND WHEN IT IS REQUIRED TO DO SO. 3. GROUNDS NO.1 AND 2 OF THE APPEAL ARE CORRELATED AND RELATE TO THE ADDITION ON ACCOUNT OF GROSS PROFIT. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE AS SESSEE IS A PARTNERSHIP FIRM AND WAS ENGAGED IN THE BUSINESS OF MANUFACTURI NG AND EXPORT OF LEATHER SHOES AND SHOE UPPERS. THE ASSESSEE FILED THE RETU RN OF INCOME ON 31.10.2007 DECLARING AN INCOME OF RS.33 37 590 WHI CH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT 1961. L ATER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROC EEDINGS THE AO NOTICED THAT THE ASSESSEE DECLARED A GROSS PROFIT OF RS.261 .74 LACS AT THE GROSS PROFIT RATE OF 25.61% ON THE GROSS TURNOVER OF RS.1 021.80 LACS. THE AO FOUND THAT THE TRADING RESULTS DECLARED DURING THE LAST T HREE YEARS WERE AS UNDER : A.Y. TURNOVER (SALES & OTHER INCOME) GROSS PROFIT G.P. RATE 2005-06 1140.07 LACS 278.72 LACS 24.44% 2006-07 224.51 LACS 149.33 LACS 66.64% 2007-08 1021.80 LACS 261.74 LACS 25.61% 4.1 THE AO ASKED THE ASSESSEE TO PRODUCE THE BOOK S OF ACCOUNTS AND TO EXPLAIN AS TO WHY THE STOCK REGISTER WAS NOT PRODU CED BEFORE THE STATUTORY AUDITOR DURING THE COURSE OF THEIR AUDIT WHICH LED THEM TO MAKE QUALIFICATIONS IN THE AUDIT REPORT. THE ASSESSEE D ID NOT PRODUCE THE BOOKS OF ACCOUNTS HOWEVER SUBMITTED THAT IT WAS 100% MANUF ACTURER AND EXPORTER 4 OF DESIGNER SHOES AND SHOE UPPERS AND SOLELY DEPEND ENT UPON PRICES ACCEPTED BY BUYERS. AS REGARDS TO THE TRADING RES ULTS THE ASSESSEE SUBMITTED THAT THE SAID REQUIREMENTS COULD BE COMP ARED WITH THE ASSESSMENT YEAR 2005-06 WHEREIN EXPORT TURNOVER OF SHOE UPPERS WAS RS.10.35 CRORES AS AGAINST RS.6.61 CRORES IN THE A SSESSMENT YEAR UNDER CONSIDERATION AND THAT THE GROSS PROFIT RATE IN THE ASSESSMENT YEAR 2005-06 HAPPENED TO BE 24.44% WHICH WAS LESS BY 1.17% AS COMPARED TO THE ASSESSMENT YEAR 2005-06 AND THEREFORE IT WAS REASO NABLE AND COMPARABLE WITH OTHER EXPORTERS. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION OF RS.24 36 000 BY O BSERVING AS UNDER : 3.1 I HAVE GONE THROUGH THE FACTS AND CIRCUMSTANC ES OF THE CASE AND WRITTEN REPLY FILED BY THE ASSESSEE FIRM. BUT I DO NOT AGREE WITH THE ASSESSEE. THE ASSESSEE HAS NOT PRODUCED STOCK REGIS TER FOR PURCHASE OF ADHESIVE LEATHER PURCHASE CONSUMABLE STORES TRR SOLE ETC. FOR VERIFICATION BEFORE THE UNDER SIGNED AND ALSO NOT M AINTAINED MANUFACTURING RECORDS FOR DAY TO DAY MANUFACTURING ACTIVITY. FURTHER THE ASSESSEE HAS NOT PRODUCED COMPLETE BILLS AND VO UCHERS FOR JOB WORK EXPENSES SALES PROMOTION EXPENSES REPAIR & M AINTENANCE EXPENSE FACTORY EXPENSES ETC. THE ASSESSEE HAS AL SO ADMITTED THAT IT HAS NOT MAINTAINED STOCK OF MAJOR ITEMS OR RAW MATE RIAL STOCK OF LEATHER LINING SHOE UPPERS FINISHED GOODS AND ST OCK IN PROCESS AND STOCK OF PETTY NUMEROUS CONSUMABLE ITEMS. IT IS STA TED THAT THE INVENTORY IS BEING INSPECTED AND VERIFIED BY THE BA NK OFFICERS EVERY MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY CERTI FICATE GIVEN BY ANY SUCH OFFICER IN SUPPORT OF HIS CLAIM. IN THE AB SENCE OF COMPLETE RECORDS OF MANUFACTURING ACTIVITIES AND THEIR SUPPO RTING BILLS AND VOUCHERS AND ALSO IN ABSENCE OF SUPPORTING BILLS AN D VOUCHERS FOR THE EXPENSES DEBITED ON A/C OF SALES PROMOTION JOB WOR K EXPENSES REPAIR & MAINTENANCE EXPS. ETC. THE INCOME DISCLOSED BY THE ASSESSEE FIRM CAN NOT BE SAID TO BE CORRECT AND COMPLETE IN ALL R ESPECT. I AM THEREFORE NOT SATISFIED WITH THE CORRECTNESS OR CO MPLETENESS OF THE ACCOUNTS OF THE ASSESSEE CLAIMED TO HAVE BEEN MAINT AINED BY IT DURING THE RELEVANT PREVIOUS YEAR. I THEREFORE PROCEED T O COMPLETE THE ASSESSMENT U/S 144 OF THE INCOME TAX ACT 1961 FOR THE BELOW MENTIONED SPECIFIC FINDINGS OF FACTS:- 5 A. THE ASSESSEE HAS NOT MAINTAINED DAY-TO-DAY STOC K REGISTER WHICH HAS BEEN DULY COMMENTED UPON BY THE STATUTORY AUDITOR OF THE ASSESSEE IN COL.3(A)(I) OF FORM 3CB AND IN COL. 28( B) OF FORM 3CD. B. THE ASSESSEE HAS NOT PRODUCED THE AFORESAID BEFO RE THE UNDERSIGNED DURING THE COURSE OF ASSESSMENT PROCEED INGS DESPITE AVAILING REASONABLE OPPORTUNITIES OF BEING HEARD C. THE ASSESSEE HAS NOT MAINTAINED SUPPORTING VOUC HERS OF EXPENDITURES OF REVENUE NATURE WHICH HAVE BEEN ADVE RSELY COMMENTED UPON BY THE STATUTORY AUDITOR OF THE ASSE SSEE IN PARAS 3(A)(2) OF FORM 3CB AND PARS 17(E)(III)(H) AND 21A OF FORM 3CD AND D. THE ASSESSEE HAS NOT PRODUCED THE SUPPORTING VO UCHERS BEFORE THE UNDERSIGNED DURING THE COURSE OF INSTANT PROCEE DINGS DESPITE AVAILING SUFFICIENT OPPORTUNITIES. 3.2 FURTHER IT IS PERTINENT TO MENTION THAT IN THE ASSESSEE'S OWN CASE FOR A.Y. 2005-06 THE BOOK RESULT WAS REJECTED BY I NVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT FOR FAILURE TO PRODUCE COMPLETE OF BOOKS OF ACCOUNTS MANUFACTURING RECORDS BILLS AND VOUCHERS ETC. AND GP RATE OF 27% WAS TAKEN BY TAKING AVERAGE RATE OF GP OF 27% ON THE BASIS OF LAST THREE YEARS' TRADING RESULT AS UN DER:- A.Y. SALES & OTHER INCOME GROSS PROFIT G.P. RATE 2003-04 519.81 LACS 172.10 LACS 49.4% 2004-05 687.82 LACS 218.75 LACS 31.8% 2005-06 1140.07 LACS 271.33 LACS 23.8% 3.3 THE ASSESSEE FIRM HAS DISCLOSED GP RATE OF 25. 61 % DURING THE YEAR CONSIDERATION AS AGAINST THE GROSS PROFIT OF 6 6.64% IN THE IMMEDIATELY PRECEDING YEAR. THE GP DECLARED IN LAST YEAR IS ON SALES OF RS.224.51 LACS WHICH IS QUITE BELOW IN COMPARISO N TO THE TURNOVER DECLARED DURING THE YEAR. LOOKING TO THE ENTIRE FAC TS OF THE CASE AND DISCREPANCIES POINTED OUT IN PARA 3.1 ABOVE I HERE BY REJECT ITS BOOK VERSION BY APPLYING PROVISIONS OF SECTION 145(3) OF THE ACT AND CONSIDERING ITS PAST RESULT FOR HIGHER TURNOVER A GROSS PROFIT RATE OF 28% IS APPLIED ON TURNOVER OF RS.1021.80 LACS AS AG AINST A GP RATE OF 6 25.61 % DECLARED DURING THE YEAR. THUS THE GROSS P ROFIT IS ESTIMATED AT RS.286.10 LACS AS AGAINST GROSS PROFIT OF RS.261 .74 LACS DECLARED BY THE ASSESSEE. THIS RESULTED INTO AN ADDITION OF RS. 24 36 000/- WHICH IS BEING MADE ON A/C OF EXTRA PROFIT. IT IS ALSO MENTI ONED THAT NO SEPARATE ADDITION ON A/C OF UNVERIFIABLE EXPENSES FOR NOT PR ODUCING BOOKS OF ACCOUNTS BILL AND VOUCHERS ETC. ARE BEING MADE SE PARATELY. SINCE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOM E BY NOT PRODUCING THE BOOKS OF ACCOUNTS PENALTY PROCEEDINGS U/S 271( 1)(C) READ WITH SECTION 274 OF THE ACT IS BEING INITIATED ON THIS A CCOUNT. 4.2 THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A ) AND THE SUBMISSIONS OF THE ASSESSEE AS MENTIONED IN PARAS 3.2 AND 3.3 BY THE LD.CIT(A) IN THE IMPUGNED ORDER ARE REPRODUCED VERBATIM AS UNDER : 3.2 IN THIS REGARD THE APPELLANTS LD.A.R HAS SU BMITTED THAT THE APPELLANT ASSESSEE IS A 100% MANUFACTURER/EXPORTER OF SHOES. COMPARATIVE DETAIL IN RESPECT OF GROSS PROFIT WAS A S UNDER : A.Y. SALES & OTHER INCOME G.P. ON SALES G.P. RATE ON SALES A.Y.2005-06 1140.07 LACS 278.72 LACS 24.44% A.Y. 2006-07 224.51 LACS 149.33 LACS 66.64% A.Y. 2007-08 1021.80 LACS 261.74 LACS 25.61% 3.3 THERE HAS BEEN INCREASE IN TURNOVER BY 356% I. E. FROM 224.51 LACS TO 1021.80 LACS BUT A FALL IN G.P. RATE BY 41. 61% AS COMPARED TO THE ASSESSMENT YEAR 2006-07. LD. COUNSEL OF THE APP ELLANT HAS POINTED OUT THAT A.O. HAS HIMSELF ADMITTED THAT THE BOOK VERSION OF ASSESSMENT YEAR 2006-07 IS NOT COMPARABLE (PARA 3.3 OF THE ORDER). IT HAS ALSO BEEN SUBMITTED THAT WHILE REJECTING THE BO OK VERSION THE A.O. HAS REFERRED TO DISCREPANCIES NOTICED DURING E XAMINATION OF BOOKS OF ACCOUNTS AND VARIOUS OBSERVATIONS/COMMENTS AND DISCLAIMER STATED IN THE AUDITORS REPORT AND FORM 3CD FILED AL ONGWITH TAX AUDIT REPORT. IN THIS REGARD IT WAS EXPLAINED BY TH E LD.AR THAT THESE DISCREPANCIES COMMENTS/DISCLAIMER IN THE AUDITORS REPORT IN THE FORM 3CD CANNOT BE A BASIS FOR INVOKING PROVISIONS OF SECTION 145 AS SCOPE OF SECTION 145 IS APPLICABLE ONLY WHEN ASSES SEE IS NOT EMPLOYING PERMITTED METHOD OF ACCOUNTING IN ABSENC E OF WHICH 7 CORRECT PROFIT CAN NOT BE WORKED OUT. OTHER SITUATI ON WOULD ARISE ONLY WHEN THE A.O. IS NOT SATISFIED WITH THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNT. COMMENTS IN AUDITORS REPORT AND FOR M 3CD ARE MERE DISCLAIMERS AND NOT QUALIFICATION FOR TAKING ADVERS E VIEW SINCE SUCH COMMENT DO NOT MAKE IMPACT ON THE BOOK VERSION. ALL DISCREPANCIES AS RELIED UPON BY THE A.O. IS OF THEORETICAL EXERCI SE. FURTHER IT WAS SUBMITTED THAT CORRECT FACTS HAVE NOT BEEN STATED I N ASSESSMENT ORDER WHICH ARE: (A) IT IS WRONGLY STATED IN ASSESSMENT ORDER THAT ASSESSEE DOES NOT MAINTAIN STOCK RECORD BUT STOCK RECORDS WERE PRODUC ED FOR EXAMINATION ON 11.11.2009. (B) FACT IS THAT ASSESSEE MAINTAINS STOCK RECORD OF MAJOR ITEMS OF RAW MATERIAL I.E. STOCK OF LEATHER SHOE UPPERS FIN ISHED GOODS MATERIAL IN PROCESS I.E. SEMI FINISHED OR CUT COMPO NENT WHICH HAS CONSISTED OF 74.24% OF TOTAL PURCHASES BUT IT D OES NOT MAINTAIN STOCK OF PETTY CONSUMABLE STORE I.E. EYELE T THREAD LACES COTTON CLOTH ADHESIVE SAND PAPER SKIN LIN ING BUCKLES EYELET BUTTONS PUNCHES STIFFNER TOEBUFF AND THERMO ROD ETC. VALUE OF THOSE STORE IS NOT SIGNIFICANT AN D DO NOT MAKE MATERIAL IMPACT AS COMPARED WITH VOLUME OF OPERATIO N. SINCE STOCK OF ALL ITEMS WERE NOT PRODUCED BEFORE THE AUD ITORS AUDITORS HAVE MADE DISCLAIMER REMARK IN THE AUDITOR S REPORT. MERELY BECAUSE THESE STOCK RECORDS WERE NOT AGAIN P RODUCED FOR RE-EXAMINATION IT IS INCORRECT TO STATE THAT ASSES SEE DOES NOT MAINTAIN STOCK RECORD. (C) COPY OF STOCK STATEMENT ALONGWITH VALUATION DUL Y VERIFIED BY THE BANK OFFICIALS AS ON 31.3.2007 WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O. HAS DENIED THIS FACT . (D) BOOKS OF ACCOUNT ALONGWITH VOUCHERS PARTICULAR LY OF JOB WORK EXPENSES MANUFACTURING EXPENSES WERE PRODUCED FOR EXAMINATION ON 11.11.2009. DETAILED COPY OF ACCOUNT S OF ABOVE EXPENSES WERE FILED AND ARE ON THE RECORD. A.O. HA S DENIED THIS FACT. E) MONTHWISE PURCHASES AND SALES AND OTHER DETAILS ALONGWITH BOOKS OF ACCOUNTS VOUCHERS ETC. WERE PRODUCED AS EVIDENT 8 FROM PARA 2.3 STATING 'DURING THE COURSE OF EXAMINA TION OF BOOKS OF ACCOUNTS VARIOUS DISCREPANCIES WERE NOTICE D AND SHOW CAUSE NOTICE U/S 142(1) DT. 26.11.2009 WAS ISSUED. 4.3 THE ASSESSEE IN RESPECT OF COMMENTS/OBSERVATIO NS IN AUDITORS REPORT EXPLAINED AS UNDER: (I) AUDITORS REMARKS IN COL.3A(1)AND STATEMENT IN COL.28B OF FORM 3CD ARE MERE DISCLAIMERS. HOWEVER QUANTITATIVE DETAILS WERE STATED AS PER ANNEXURE IN FORM 3CD HENCE IT NO T ADVERSE REMARK. (II) COMMENT IN PARA 3A(II) OF 3CB IN RESPECT OF S UPPORTING EVIDENCE OF EXPENSES AND REVENUE NATURE AUDITORS HA VE NOT MADE ANY ADVERSE COMMENT NOR QUANTIFIED ANY AMOUNT INADMISSIBLE AND DO NOT MAKE ANY IMPACT ON BOOK VER SION. (III) AS REGARD COMMENT IN PARA 17(E)(III) (H) OF 3CD PARA 17A IN FORM 3CD I.E. EXPENDITURE' INADMISSIBLE UNDER SECTI ON 40A(3) AND COMMENT IN COL. 21A OF FORM 3CD THERE IS NO ADV ERSE COMMENT OR NOR ANY AMOUNT HAS BEEN QUANTIFIED HENCE CAN NOT BE TAKEN AS DISCREPANCY. (IV) APPELLANT HAS MADE COMPLETE COMPLIANCE OF SECTION 1 43(2) ANNEXED WITH THE NOTICE U/S 142(1) AND ALSO SHOW C AUSE NOTICE U/S 142(1) DATED 26.11.2009. 'SPECIFICALLY FINDING OF FACTS' JUSTIFYING ADDITION AS NO NEXUS WITH MATERIAL ON R ECORD AND FROM BOOKS OF ACCOUNTS' AND THESE REMARKS AND DISC LAIMERS DO NOT MAKE ANY IMPACT ON BOOK VERSION. 4.4 IT WAS FURTHER SUBMITTED THAT THE COMMENTS/OBS ERVATIONS IN AUDITORS REPORT AND FORM NO.3CD ARE MERE OPINION AND HAVE NO FORCE UNLESS CORROBORATED/HAVE NEXUS WITH THE BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT THE LOW PROFITS AND ABSENCE OF VARI ETY-WISE REGULAR STOCK REGISTER WERE NOT SUFFICIENT REASONS OR MATERIAL ON THE STRENGTH OF WHICH 9 ACCOUNTS OF THE ASSESSEE COULD BE REJECTED AND THAT THE ACTION TO INVOKE SECTION 145 OF THE I.T.ACT WAS OUTSIDE THE COPE AN D PARAMETER LAID DOWN IN THE SAID SECTION. IT WAS ALSO STATED THAT NONE OF THE CLAUSES I.E. (1) (2) AND (3) WERE APPLICABLE HENCE SECTION 145 HAD WRONGLY BEEN INVOKED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) INDIAN & EASTERN NEWSPAPER SOCIETY VS. CIT (19 79) 119 ITR 996(S.C.) (II) S.VEERIAH REDDIAR VS. CIT TRAVANCORE-COCHIN (1960) 38 ITR 152(KER.). 4.5 AS REGARDS TO THE ESTIMATION MADE BY THE AO THE ASSESSEE SUBMITTED TO THE LD.CIT(A) THAT IT WAS WILD ONE AND PURE GUE SS WORK AND HAD NO NEXUS WITH THE MATERIAL ON RECORD NOR COMPARABLE WITH OTH ER ASSESSEES. IT WAS FURTHER SUBMITTED THAT THE BASIS OF ESTIMATION SH OULD BE SPEAKING ONE AND FACTS IN ASSESSMENT YEAR 2005-06 WERE QUITE DIFFER ENT INASMUCH AS THE ASSESSMENT MADE IN THAT YEAR WAS EX PARTE ORDER UN DER SECTION 144 FOR NON- ATTENDANCE. HOWEVER FOR THE YEAR UNDER CONSIDERAT ION THE ASSESSEE HAS MADE FULL COMPLIANCE AS REQUIRED UNDER SECTION 142 (1) AND THAT THE METHOD ADOPTED ;FOR APPLYING SECTION 145(3) IN ASSESSMENT YEAR 2005-06 FOR MAKING ESTIMATION COULD NOT HAVE BEEN MECHANICALLY FOLLOWED AND BE TAKEN AS PRECEDENT. 4.6 ON THE MERITS OF THE CASE IT WAS SUBMITTED TH AT THE FALL IN GROSS PROFIT WAS BECAUSE AVERAGE EXPORT SALE PRICE PER SHOE PAI R WAS SLASHED TO RS.356.37 FROM RS.516.23 AND INCREASE IN VOLUME OF EXPORT TO 185518 SHOE PAIRS FROM MERELY 39511 IN THE ASSESSMENT YEAR 2006 -07. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD EXPORTED SHOE UPPER S OF RS.2.93 CRORES AS AGAINST NIL IN ASSESSMENT YEAR 2006-07 AND THAT TH E MARGIN OF PROFIT IN SHOE 10 UPPERS IS LIMITED TO 15%- 20% ONLY. IT WAS ALSO ST ATED THAT DETAILED INVOICE WISE SALE OF SHOE PAIRS AND SHOE UPPERS WERE ON RECORD AND THERE HAD BEEN REDUCTION BY 2.16%. OF DUTY DRAW BACK AND ASSE SSEE HAD ALSO TO BEAR THE BURDEN OF NON-REIMBURSED FREIGHT OF RS.22 58 27 7 AND THAT ALL FACTORS HAD MADE IMPACT IN THE GROSS PROFIT RATE. 5. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE SUSTAINED THE ADDITION TO THE EXTENT OF RS.5 LACS B Y OBSERVING AS UNDER : AFTER HAVING GONE THROUGH ALL THE FACTS ON RECORD AND SUBMISSIONS MADE BY THE LD .AR I AM NOT CONVINCED WITH THE REASONS GIVEN BY THE APPELLANT IN RESPECT OF THE STATED FA LL IN GROSS PROFIT RATE. THOUGH THE ASSESSEE HAS STATED THAT ALL PURCHASES A ND SALES ARE VOUCHED BUT THE AUDITOR THEMSELVES IN THE TAX AUDI T REPORT AT PARA 28(B) HAVE STATED: 'WE WERE UNABLE TO VERIFY THE QU ANTITATIVE DETAILS IN ABSENCE OF RELEVANT RECORDS.' THIS COMMENT WAS F OR BOTH - THE RAW MATERIALS AND ALSO THE FINISHED GOODS. THIS NEC ESSARILY IMPLIES THAT NO STOCK RECORDS HAD BEEN MAINTAINED BY THE A PPELLANT AND THERE WAS NO CORRELATION BETWEEN THE CONSUMPTION AND THE PRODUCTION ESPECIALLY IN THE CASE OF THE ASSESSEE WHO IS A MA NUFACTURER OF SHOES WHERE THERE IS NO EASY CORRELATION BETWEEN THE PRO DUCTION AND CONSUMPTION. THUS MAINTENANCE OF STOCK REGISTER IS IMPORTANT TO GIVE THE DETAILS OF CONSUMPTION. IN THIS REGARD I DRAW S UPPORT FROM THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF OMAX SHOE FACTORY V/S CIT [281 ITR 268] WHEREIN IT WAS H ELD:- 'HELD THAT ADMITTEDLY THE ASSESSEE WAS A MANUFACTU RER AND EXPORTER OF LEATHER SHOES. THEREFORE IT WAS NECESS ARY TO MAINTAIN A PRODUCTION REGISTER A DAY-TO-DAY RECORD OF PRODUCTION AND A CONSUMPTION REGISTER OF RAW MATERI AL. UNLESS THE CONSUMPTION REGISTER FOR RAW MATERIAL AND THE P RODUCTION REGISTER RELATING TO THE MANUFACTURED GOODS ARE MAI NTAINED THE PRODUCTION COULD NOT BE VERIFIED APART FROM NON-MAI NTENANCE OF THE PRODUCTION REGISTER AND THE RAW MATERIAL CON SUMPTION REGISTER THE ASSESSING AUTHORITY ALSO FOUND THAT P ROPER ACCOUNTS RELATING TO THE PAYMENT OF WAGES HAD NOT BEEN MAINT AINED. 11 THESE REASONS WERE SUFFICIENT TO INVOKE THE PROVISO TO SECTION 145(1) OF THE INCOME TAX ACT 1961.' 4.1 THIS LEADS TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE NOT CORRECT AND /OR COMPLETE AND THAT THE TRUE PROFIT CAN NOT BE DETERMINED. THEREFORE THERE IS NO ALTERNATI VE BUT TO REJECT THE BOOKS UNDER SECTION 145(3) OF THE ACT AND MAKE AN E STIMATION OF THE BOOK RESULTS. THE ASSESSEE HAS FURTHER NOT MAINTAIN ED STOCK OF PETTY CONSUMABLE ITEMS NOR VALUE OF THOSE STOCK HAS BEEN SHOWN IN CLOSING STOCK. IN VIEW OF THE AFORESAID INFIRMITIES IN THE ACCOUNTS AND ALSO CONSIDERING THE FACT THAT THE APPELLANT HAS PARTLY SUBSTANTIATED THE REASONS FOR FALL IN GROSS PROFIT I ESTIMATE AN ADD ITIONAL LUMP SUM EXTRA PROFIT @ RS.5 00 000/- WHICH WOULD COVER ALL THE AF ORESAID INFIRMITIES IN THE ACCOUNTS.' 6. NOW THE DEPARTMENT IS IN APPEAL. 7. THE LD.D.R. STRONGLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE ASSESSEE DID NOT MAINTAIN THE ST OCK REGISTER AND THE GROSS PROFIT DECLARED FOR THE YEAR UNDER CONSIDERATION W AS VERY LOW IN COMPARISON TO THE GROSS PROFIT OF EARLIER YEAR THEREFORE TH E ESTIMATE OF THE GROSS PROFIT AT THE RATE OF 28% APPLIED BY THE AO WAS REASONABLE AND THE LD.CIT(A) WAS NOT JUSTIFIED IN REDUCING THE ADDITION ON ACCOUNT O F GROSS PROFIT TO THE EXTENT OF RS.5 LACS ONLY. IT WAS FURTHER SUBMITTED THAT TH E LD.CIT(A)HAS NOT GIVEN ANY BASIS WHILE REDUCING THE ADDITION MADE BY THE A O. HE THEREFORE PRAYED TO RESTORE THE ADDITION MADE BY THE AO. 8. IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AO MADE THE ADDITION PURELY ON GUESS WOR K AND WITHOUT ESTABLISHING THE NEXUS WITH THE MATERIAL ON RECORD AND EVEN DID NOT CITE ANY COMPARABLE CASE WHILE MAKING THE ARBITRARY ADDITIO N. IT WAS FURTHER 12 SUBMITTED THAT THE LD.CIT(A) AFTER APPRECIATING THE FACTS IN RIGHT PERSPECTIVE WAS JUSTIFIED IN REDUCING THE ADDITION MADE BY THE AO. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE THERE WERE CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND EVEN QUANTITATIVE DETAILS WERE NOT MEN TIONED IN THE BOOKS OF ACCOUNTS. THE STOCK REGISTER WAS ALSO NOT MAINTA INED TO SUBSTANTIATE THAT THERE WAS NO DIFFERENCE IN THE QUANTITY RELATING TO PURCHASES AND FINISHED PRODUCT. IN THE INSTANT CASE THE AUDITORS IN THEIR AUDITORS REPORT HAD MADE DISCLAIMER REMARK THAT STOCK RECORDS OF ALL ITEMS W ERE NOT PRODUCED BEFORE THEM. SINCE THE TRADING RESULTS WERE NOT FULLY VERI FIABLE FROM THE RECORD PRODUCED BY THE ASSESEE THE PROVISIONS OF SECTION 145(3) WERE RIGHTLY INVOKED BY THE AO. NOW THE QUESTION ARISES AS TO W HETHER THE ESTIMATE OF THE AO WHILE DETERMINING THE INCOME OF THE ASSESSEE WAS JUSTIFIED OR THE ACTION OF THE LD.CIT(A) WAS CORRECT ? IN THE PRESEN T CASE IT IS TRUE THAT THE GROSS PROFIT RATE IN THE IMMEDIATELY PRECEDING YEAR WAS 66.32% WHILE IN THE YEAR UNDER CONSIDERATION IT WAS AT 25.61%. HOWEVER THERE WAS TREMENDOUS INCREASE IN THE TURNOVER OF THE ASSESSEE WHICH INCR EASED TO RS.1021.80 LACS IN THE YEAR UNDER CONSIDERATION AS COMPARED TO RS.2 24.51 LACS IN THE EARLIER YEAR THAT CAN BE A FACTOR FOR DECLINE IN THE GROSS PROFIT RATE AS THE TURNOVER INCREASED BY 356% IN COMPARISON TO THE EARLIER YE AR. IN THE INSTANT CASE THE EXPLANATION OF THE ASSESSEE FOR DECLINE IN GRO SS PROFIT RATE WAS THAT THE EXPORT SALE PRICE OF SHOW PAIRS WAS SLASHED TO RS. 356.37 FROM RS.516.23 WHICH CLEARLY SHOWS THAT THE SAID FACTOR MAINLY CONTRIBUTED FOR LOW GROSS PROFIT. ANOTHER EXPLANATION GIVEN BY THE ASSESSEE WAS THAT IN THE YEAR UNDER CONSIDERATION A NEW PRODUCT IN THE SHAP E OF SHOE UPPERS WAS INTRODUCED AND THE EXPORT SALE WAS OF RS.2.93 CROR ES FOR SHOE UPPERS 13 WHEREIN PROFIT MARGIN WAS LIMITED TO 15% - 20% ONLY . IT WAS ALSO EXPLAINED THAT THERE HAD BEEN REDUCTION BY 2.16% IN DUTY DRA WBACK AND THAT THE ASSESSEE HAD TO BEAR THE BURDEN OF NON-REIMBURSED F REIGHT AMOUNTING TO RS.22 58 277. FROM THE ABOVE EXPLANATION OF THE ASS ESSEE WHICH HAS NOT BEEN REBUTTED IT APPEARS THAT THERE WAS A PLAUSIBL E EXPLANATION FOR DECREASE IN THE GROSS PROFIT RATE FOR THE YEAR UNDER CONSIDE RATION IN COMPARISON TO THE EARLIER YEAR. HOWEVER THE FACT REMAINS THAT THE AS SESSEE DID NOT MAINTAIN STOCK REGISTER AND QUANTITATIVE TALLY IN RESPECT OF MANY ITEMS AND FEW OTHER DISCREPANCIES WERE ALSO POINTED OUT BY THE AO. THER EFORE THE TRADING RESULTS SHOWN BY THE ASSESSEE WERE NOT FULLY VERIFIABLE FR OM ITS RECORD. IN THESE CIRCUMSTANCES SOME ADDITION IS REQUIRED. IN THE PR ESENT CASE IT IS TRUE THAT THE AO WHILE APPLYING THE GROSS PROFIT RATE OF 28% DID NOT BRING ON RECORD ANY COMPARABLE CASE AS SUCH THE GROSS PROFIT RAT E APPLIED BY HIM WAS WITHOUT ANY BASIS. AT THE SAME TIME THE LD.CIT(A) ALSO WHILE SUSTAINING THE ADDITION TO THE EXTENT OF RS.5 LACS OUT OF THE A DDITION OF RS.24 36 000 MADE BY THE AO HAS NOT GIVEN ANY COGENT REASON. WE THER EFORE CONSIDERING THE TOTALITY OF THE FACTS AND TO MEET THE ENDS OF JUSTI CE DEEM IT FAIR AND REASONABLE TO SUSTAIN THE ADDITION TO THE EXTENT OF RS.7 LACS. ACCORDINGLY THESE GROUNDS ARE PARTLY ALLOWED IN FAVOUR OF THE D EPARTMENT. 10. THE NEXT ISSUE VIDE GROUNDS NO.3 TO 5 RELATES TO THE DELETION OF ADDITION OF RS.22 58 277 MADE BY THE AO BY INVOKING THE PROVISIONS OF 194C READ WITH SECTION 40(A)(IA) OF THE I.T.ACT ON ACCOUNT OF NON-DEDUCTION OF TAX ON FREIGHT. 11. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE AO MADE THE IMPUGNED ADDITION BY OBSERVING IN PARA 4 OF THE AS SESSMENT ORDER DATED 4.12.2009 AS UNDER : 14 4. THE ASSESSEE HAS PAID A SUM OF RS.22 58 277/- ON BEHALF OF HIS OVERSEAS BUYER WHICH ARE COVERED BY THE PROVISIONS CONTAINED U/S 194C OF THE INCOME TAX ACT 1961. THE STATUTORY AUD ITOR OF THE ASSESSEE HAS MADE ADVERSE QUALIFICATIONS IN RESPECT OF THE SAME IN HIS STATUTORY AUDIT REPORT IN PARA 3(A)(III) OF FORM 3C B AND IN COL. 17(A) OF FORM 3CD. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE ASSESSEE WAS CONFRONTED FROM THIS FACT AND WAS REQUIRED TO J USTIFY NON- DEDUCTION OF INCOME TAX ON THIS SUM. IN RESPONSE TH E ASSESSEE VIDE WRITTEN REPLY DATED 4.12.2009 STATED THAT SINCE THE OVERSEAS BUYER HAVE NOT REIMBURSED THIS SUM TO THE ASSESSEE NO TDS HAS BEEN MADE. I HAVE CONSIDERED THE FACTS OF THE CASE. THE PROVISIO NS CONTAINED U/S 194C OF THE INCOME TAX ACT 1961 ARE MANDATORY IN N ATURE AND THE ASSESSEE BEING A PERSON WHO HAS PAID/CREDITED THE A FORESAID SUM WAS STATUTORILY LIABLE TO DEDUCT INCOME TAX AT SOURCE A T THE PRESCRIBED PERCENTAGE AND TO REMIT THE SAME TO THE CENTRAL GOV T. ACCOUNT WITHIN DUE TIME. SINCE HE HAS FAILED TO DO SO THE PROVISI ONS CONTAINED U/S 40A(IA) OF THE INCOME TAX ACT 1961 ARE SQUARELY AP PLICABLE IN HIS CASE. ACCORDINGLY THE SUM OF RS.22 58 277/- IS DISA LLOWED U/S 40A(IA) OF THE INCOME TAX ACT 1961 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 12. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A ) AND SUBMITTED THAT THE ADDITION HAD BEEN MADE BY THE AO WITHOUT VERIF YING THE MATERIAL ON RECORD AND THE SUBMISSIONS MADE BY THE ASSESSEE. IT WAS STATED THAT THE ADDITION HAD BEEN BASED ON THE WRONG STATEMENT/REM ARK MADE BY THE AUDITORS IN THE AUDITORS REPORT. THE FACTS AS SUB MITTED BY THE ASSESSEE BEFORE THE LD.CIT(A) WERE AS UNDER : TOTAL FREIGHT PAID DURING THE YEAR RS.79 05 724.32 LESS: AMOUNT PAID TO GOVERNMENT ACCOUNT AND CUSTOM DUTY ON WHICH TDS IS NOT DEDUCTABLE 1109540.28 LESS: TDS NOT DEDUCTED ON OBTAINING EXEMPTION CERTIFICATE 216196 (-) RS.13 25 726.28 FREIGHT PAID ON WHICH TDS REQUIRED TO BE DEDUCTED U/S 194C RS.65 79 988.04 15 TDS DEDUCTED AND DEPOSITED ON FREIGHT OF RS.65 79 988.04 RS.1 25 037.00 10 (TEN)COPIES OF CHALLANS EVIDENCING DEPOSIT OF TD S OF RS.1 25 037 WITHIN STIPULATED TIME WERE FILED ALONGWITH SUBMISSION. 12.1 IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HA D NOT COMMITTED ANY DEFAULT UNDER SECTION 194C OF THE I.T.ACT AND HAD DEDUCTED TDS ON ALL THE AMOUNT OF FREIGHT IRRESPECTIVE OF THE FACT AS TO WH ETHER THE SAME HAD BEEN REIMBURSED OR NOT. IT WAS FURTHER SUBMITTED THAT T HE AMOUNT OF RS.22 58 277 WHICH WAS REQUIRED TO BE REIMBURSED BY FOREIGN BUYE RS WAS NOT REIMBURSED BY THEM AND THIS FACT WAS WRONGLY UNDERSTOOD BY THE AUDITORS WHILE MAKING THE REMARK IN THE AUDITORS REPORT AS POINTED OUT B Y THE AO. IT WAS EXPLAINED THAT INSTEAD OF NON-DEDUCTION OF DEPOSIT OF TDS ON UN- REIMBURSED FREIGHT OF RS.22 58 277 IT SHOULD HAVE BEEN STATED THAT TDS AMOUNT OF RS.50 224 TOGETHER WITH FREIGHT OF RS.22 58 277 HAS NOT BEEN REIMBURSED TO THE ASSESSEE. IT WAS STATED THAT THE AO SOLELY RELIED ON THE COMMENTS MADE BY THE AUDITORS IN THE AUDITORS REPO RT WITHOUT VERIFYING THE FULL FACTS. IN SUPPORT OF THE ABOVE THE ASSESS EE FURNISHED FOLLOWING DOCUMENTS TO THE LD.CIT(A): (A) DETAIL OF TDS ON FREIGHT OF RS.65 79 988.04 (B) COPIES OF 10 (TEN) CHALLAN EVIDENCING THE DEPO SIT OF TDS OF RS.1 25 037.00 (C) DETAIL OF FREIGHT AND TDS AMOUNT REIMBURSED/UN REIMBURSED PARTYWISE/BILLWISE. 13. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE OBSERVED THAT THERE WAS NO CONTRAVENTION OF THE PRO VISIONS OF SECTION 194C 16 OF THE I.T.ACT HENCE PROVISIONS OF SECTION 40(A)(I A) OF THE I.T.ACT WERE NOT APPLICABLE TO THE ASSESSEES CASE AS THE TDS HAD B EEN DEDUCTED BY THE ASSESSEE ON THE ENTIRE AMOUNT OF FREIGHT PAID IN AC CORDANCE WITH THE PROVISIONS OF SECTION 194C OF THE I.T.ACT. HE ACCOR DINGLY DELETED THE ADDITION MADE BY THE AO. AT THE SAME TIME HE DIREC TED THE AO TO VERIFY THIS FACT AND IF HE FINDS THAT TDS HAS BEEN DULY DEDUCT ED ON THE FREIGHT PAID NO DEDUCTION U/S 40(A)(IA) WOULD SURVIVE. 14. NOW THE DEPARTMENT IS IN APPEAL. 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL ON THE RECORD. IN THE IN STANT CASE IT APPEARS THAT THE AO WHILE FRAMING THE ASSESSMENT UNDER SECTION 1 44 OF THE I.T.ACT RELIED ON THE COMMENTS OF THE AUDITORS IN THEIR AUDITORS REPORT. THE ASSESSEE EXPLAINED BEFORE THE LD.CIT(A) THAT TDS WAS DEDUCTE D IN ACCORDANCE WITH THE PROVISIONS OF SECTION 194C OF THE I.T.ACT ON TH E TOTAL AMOUNT OF THE FREIGHT PAID AND THERE WAS NO CONTRAVENTION OF THE PROVISIONS OF SECTION 194C OF THE I.T.ACT. CONSIDERING THE ABOVE FACTS W E ARE OF THE VIEW THAT THIS ISSUE REQUIRES VERIFICATION AT THE LEVEL OF THE AO BECAUSE THE ASSESSMENT WAS FRAMED UNDER SECTION 144 OF THE I.T. ACT. IF THE AS SESSEE HAD DEDUCTED THE TDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 19 4C OF THE ACT AND THERE IS NO VIOLATION OF THE PROVISIONS OF THE SAID SECTION THEN NO ADDITION WAS CALLED FOR AND IN CASE IT IS FOUND THAT THE AS SESSEE HAS VIOLATED THE PROVISIONS OF THE SAID SECTION THEN THE AO IS FREE TO TAKE THE ACTION IN ACCORDANCE WITH LAW. ACCORDINGLY THIS ISSUE IS RES TORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 17 C.O.NO.54(LKW)/2010 16. IN THE ASSESSEES CROSS OBJECTION FOLLOWING GR OUND HAS BEEN RAISED: THE APPELLATE ORDER AS PASSED BY LEARNED CIT(A) WH ERE BY THE HAS SUSTAINED THE ACTION OF LEARNED AO U/S 144 AND 14 5(3) OF THE ACT IS UNJUSTIFIED AND UNWARRANTED UNDER LAW IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 17. THE REGISTRY POINTED OUT THAT THE CROSS OBJECT ION IS BARRED BY LIMITATION BY THREE DAYS. DURING THE COURSE OF HEAR ING THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HE HAS THE INSTRUCTION NO T TO PRESS THE CROSS OBJECTION AND GAVE IN WRITING AS UNDER : NOT PRESSED. SD. SUDHINDRA JAIN. COUNSEL F.C.A. 18. IN VIEW OF THE ABOVE THE CROSS OBJECTION OF T HE ASSESSEE IS DISMISSED AS NOT PRESSED. 19. IN THE RESULT APPEAL OF THE DEPARTMENT IS ALLO WED PARTLY AND PARTLY FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.3.11 . ) SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER MARCH 14TH 2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R. ITAT LUCKNOW. SRIVASTAVA.