M/s. Tiki Tar Industries,Baroda, Baroda v. The ACIT., Cent.Circle-2,, Baroda

ITSSA 181/AHD/2006 | misc
Pronouncement Date: 17-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 18120516 RSA 2006
Assessee PAN AAAFT9211E
Bench Ahmedabad
Appeal Number ITSSA 181/AHD/2006
Duration Of Justice 5 year(s) 7 month(s) 7 day(s)
Appellant M/s. Tiki Tar Industries,Baroda, Baroda
Respondent The ACIT., Cent.Circle-2,, Baroda
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 17-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 17-02-2012
Date Of Final Hearing 09-02-2012
Next Hearing Date 09-02-2012
Assessment Year misc
Appeal Filed On 10-07-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH BEFORE SHRI G.C.GUPTA VICE-PRESIDENT (AZ) AND SHRI B.P. JAIN ACCOUNTANT MEMBER IT(SS)A NO.181 & 172/AHD/2006 BLOCK PERIOD:1/4/1996 TO 11/3/2003 TIKI TAR INDUSTRIES 8 TH FLOOR NEPTUNE TOWERS PRODUCTIVITY ROAD BARODA PAN NO.AAAFT9211E ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2 BARODA / V/S . / V/S . ACIT CENTRAL CIRCLE-2 BARODA M/S TIKKI TAR INDUSTRIES 8 TH FLOOR NEPTUE TOWRS PRODUCTIVITY ROAD BARODA / APPELLANT .. / RESPONDENT /ASSESSEE BY SHRI J.P. SHAH SR-AR /REVENUE BY SHRI S.K.GUPTA CIT-DR / DATE OF HEARING 09-02-2012 !'# / DATE OF PRONOUNCEMENT 17-02-2012 $ $ $ $ / // / ORDER PER B.P. JAIN ACCOUNTANT MEMBER:- THESE CROSS-APPEALS OF THE ASSESSEE AND REVENUE ARI SE FROM THE ORDER OF LD. COMMISSIONER OF INC-TAX (APPEALS)-IV AHMEDABAD DAT ED 31-03-2006 FOR THE BLOCK IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 2 PERIOD FROM 01-04-1996 TO 11-03-2003. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NO.181/AHD/2006 (BY ASSESSEE) 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE ASSESSING OFFICER HAS ERRED IN FACT AND IN LAW IN INVOKING THE PROVISIONS OF CHAPTER XIV B OF THE INCOME TAX ACT 1961 (THE ACT) BY VIRTUE OF A NOT ICE U/S. 158 BC WHICH IS DEFECTIVE IN ITS FORM AND CONTENTS. IT IS MOST RESPECTFULLY SUBMITTED THAT THE NOTICE I SSUED U/S. 158 BC OF THE ACT IS DEFECTIVE IN ITS FORM AND CONTENTS AND THEREFORE THE ENTIRE PROCEEDINGS UNDER CHAPTER XIV B INITIATED BY THE DEFECTIVE NOTI CE IS VOID AB INITIO AND T MAYBE SO HELD AND THE ASSESSMENT BE ANNULLED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE AO HAD WRONGLY RELIED ON THE STATEMENT U/S. 132(4) FOR THE PURPOSE OF MAK ING ADDITION WHICH WAS TAKEN UNDER COERCION AND THE ADMISSION GIVEN IN THE STATEMENT WAS NEITHER VOLUNTARY NOR SPONTANEOUS BUT WAS GIVEN IN CONSIDER ATION OF REMOVING THE ILLEGAL PROHIBITORY ORDERS PLACED AT VARIOUS PLACES FOR 44 DAYS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE ASSESSMENT ORDER IS PASSED BEYOND THE PERIOD OF LIMITATION MENTIONED US . 158BE OF THE ACT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE AO ERRED IN MAKING ADDITION OF TOTAL INVESTMENTS AND CONSIDERING THE S AME AS UNDISCLOSED INCOME OF THE APPELLANT DESPITE THE FACT THAT HE CONCLUDES IN THE ASSESSMENT ORDER THAT UNDISCLOSED INCOME OF THE APPELLANT ON THE BAS IS OF SEIZED MATERIALS FOR THE BLOCK PERIOD IS MUCH LESSER THAN THE INCOME ASS ESSED. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF RS.11 56 550 BEIN G GP @ 17% ON UNACCOUNTED SALES OF RS.68 03 234. THE AO HAD ESTIM ATED THE GP @ 18% INSTEAD OF 14% DECLARED BY THE APPELLANT. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN CONSIDERI NG AN AMOUNT OF RS.1 97 908 AS UNDISCLOSED INCOME OF THE APPELLANT. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN CONSIDERI NG AN AMOUNT OF RS.10 57 256 AS UNDISCLOSED INCOME ON THE GROUND TH AT THE SAME REPRESENTS UNACCOUNTED INVESTMENTS IN DEBTORS. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 3 8. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN UPHOLDING ADDITION OF RS.2 00 000 OUT OF ADD ITION OF RS.7 27 745 MADE BY THE AO AS UNDISCLOSED INCOME OF THE APPELLANT ON ACCOUNT OF ALLEGED BOGUS COMMISSION AND NON-GENUINE SERVICE CHARGES. 9. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN ESTIMATIN G PROFITS @ 14% ON CONTACT RECEIPTS OF RS.1 02 75 318 AND THEREBY MAKING ADDIT ION OF RS.9 63 402 TO THE UNDISCLOSED INCOME OF THE APPELLANT. 10. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING AN ADDITION OF RS.90 500 ON ACCOU NT OF ALLEGED UNACCOUNTED INVESTMENT IN HOUSEHOLD ARTICLES / EQUIPMENTS. 11. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN UPHOLDING THE ADDITION OF RS.11 38 217 ON AC COUNT OF ALLEGED UNACCOUNTED INVESTMENT IN STOCK FOUND DURING THE CO URSE OF SEARCH. THE LEARNED AO ERRED IN FACT AND IN LAW IN NOT ALLOWING SET OFF OF SHORTAGE OF STOCK OF RAW MATERIAL FOUND AS A RESULT OF SEARCH WHILE C OMPUTING THE EXCESS STOCK OF THE FINISHED GOODS. 12. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN UPHOLDING ADDITION OF RS.2 40 226 OUT OF RS. 4 80 456 AS UNDISCLOSED INCOME ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITUR E ON PAYMENTS OF WAGES IGNORING THE FACT THAT THE SAID AMOUNT WAS NEVER CL AIMED AS DEDUCTION. 13. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF RS.3 00 000 MADE BY THE AO ON ALLEGED GROUND OF UNACCOUNTED INVESTMENT IN PLANT AND MACHI NERY AT HALOL FACTORY. 14. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF RS.2 89 000 MADE BY THE AO ON ALLEGED GROUND OF UNACCOUNTED INVESTMENT IN CONSTRUCTION NO OF VIZAG FACTORY. 15. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE AO HAS CHARGED INTEREST WITHOUT CLEARLY SPECIFYING THE SECTION UND ER WHICH THE INTEREST IS REQUIRED TO BE CHARGED. 16. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN CHARGING INTEREST DESPITE THE FACT THAT THE DELAY IN FILING THE RETURN OF INCOME IS PURELY ATTRIBUTABLE TO THE DEPARTMENT AND THERE IS NO FAULT ON THE PART OF THE APPELLANT. 17. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN CHARGING INTEREST WITHOUT CLEARLY SPECIFYING THE SECTION UNDER WHICH THE INTEREST IS REQUIRED TO BE CHARGED. 18. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT TH AT THE INTEREST IS CHARGED IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 4 DESPITE THE FACT THAT THE DELAY INFILLING THE RETUR N OF INCOME IS PURELY ATTRIBUTABLE TO THE DEPARTMENT BY NOT RELYING ON CO RRECT FACTS. 19. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN INITIATIN G PENALTY PROCEEDINGS SU/S.158BFA(2) OF THE INCOME AX ACT 1961. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- IT(SS)A NO.172/AHD/2006 (BY REVENUE) 1.THE LD. CIT(APPEALS) ERRED IN LAW AND ON FACTS I N DIRECTING THE AO TO ADOPT G.P. RATE OF 17% INSTEAD OF 18% ADOPTED BY AO AND T HEREBY GAVE RELIEF OF RS.64 032/- 2. THE LD. CIT(APPEALS) ERRED IN LAW AND ON FACTS I N DELETING ADDITION OF RS.5 27 745/- MADE ON ACCOUNT OF BOGUS COMMISSION A ND NON-GENUINE SERVICE CHARGE. 3. THE LD. CIT(APPEALS) ERRED IN LAW AND ON FACTS I N DELETING ADDITION OF RS.4 80 450/- MADE ON ACCOUNT OF UNACCOUNTED WAGE E XPENSES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER ON T HE ABOVE POINTS. 2. THE GROUNDS NO 1 TO 4 OF ASSESSEE ARE NOT PRESSE D AND THE SAME ARE DISMISSED AS NOT PRESSED. 3. AS REGARDS GROUND NO.5 OF THE ASSESSEE AND GROUN D NO.1 OF THE REVENUE THE BRIEF FACTS ARE THAT ASSESSING OFFICER ON THE B ASIS OF CERTAIN SEIZED ANNEXURE WORKED OUT THE UNACCOUNTED SALES OF RS.68 03 234/-A ND APPLIED A GROSS PROFIT (GP FOR SHORT) RATE OF 18% MAKING AN ADDITION OF RS.12 24 552/-. 4. THE LD. CIT(A) VIDE PARA-63 TO 6.5 OF HIS ORDER APPLIED AN AVERAGE RATE OF 17% AS PER GP DECLARED IN SEIZED ANNEXURE. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 5 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSING OFFICER HAS WORKED OUT THE GP AS PER THE SEIZED ANNEXURE BETWEEN 16.16 TO 18.81%. THE ASSESSEE HAD ALREADY DECLARED GP RAT E OF 15%. THE LD. AR PLACED ON RECORD THE DECISION OF ITAT AHMEDABAD D BENCH IN ITA NO.3232/AHD/2007 AND ITA NO.3348/AHD/2007 DATED 02-11-2007 WHERE IN THE CASE OF M/S TIKITAR INDUSTRIES BHANDUP (W) WHERE GP RATE OF 15% HAVE B EEN UPHELD. SINCE THE ASSESSEE HAVING DECLARED 15% GP THE AO IS NOT JUST IFIED IN ENHANCING THE GP RATE FURTHER TO 18%. IN THE CIRCUMSTANCES AND FACTS OF T HE CASE AND TO MEET BOTH THE ENDS OF JUSTICE WE DIRECT THE AO TO APPLY A GP RATE OF 15% ON THE UNACCOUNTED SALES AS PER SEIZED ANNEXURES. THEREFORE BOTH THE ORDERS OF AUTHORITIES BELOW ARE MODIFIED ACCORDINGLY. THUS GROUND NO.5 OF THE ASSESSEE IS P ARTLY ALLOWED AND OF GROUND NO.1 OF THE REVENUE IS DISMISSED. 6. AS REGARDS GROUND NO.6 AND 7 OF THE ASSESSEE TH E BRIEF FACTS ARE THAT ASSESSING OFFICER MADE AN ADDITION OF RS.1 97 908/- SINCE THE ASSESSEE HAD UNDER INVOICED THE AMOUNT IN RESPECT OF SALES MADE I.E. T HE ASSESSEE HAD CHARGED LOWER RATE IN RESPECT OF MATERIAL DISPATCHED TO M/S.GANGE SHWAR OIL & CHEMICALS. THE NORMAL RATE FOR BITUMEN WAS RS.9 000/- PER METRIC T ONE WHEREAS THE ASSESSEE HAD CHARGED @ RS.5 000/- PER METRIC TONE FOR RS.8 850/- PER METRIC TONE WHICH WORKED OUT AT RS.35 400/- AS UNDER INVOICED. SIMILARLY AS PER ANNEXURE-A/5 LEDGER ACCOUNT OF MR. G.R. AGARWAL UDAIPUR SEIZED DETAIL OF WHICH IS AVAILABLE AO'S ORDER AT PAGES 11-12. FROM THE SAID SEIZED ANNEXURE THE AO WORKED OUT THE UNDISCLOSED INCOME AT RS.1 97 908/-. SIMILARLY THE ASSESSEE WAS ENGAG ED IN THE ACTIVITY OF ADJUSTMENT BILLING AS PER THE SEIZED ANNEXURE-A/1 A/2 A/3 W HERE IT WAS FOUND THAT THE ASSESSEE HAD NOT DISPATCHED ANY MATERIAL AND BILLS WERE PREPARED FOR ONE MATERIAL AND DISPATCH WAS MADE FOR SOME OTHER MATERIAL. THE EVIDENCES HAVE BEEN FOUND AS PER ANNEXURE-A/5. THE RELEVANT EXTRACT ARE AVAILABL E AT PAGES 31 OF THE AO'S ORDER. THE AO WORKED OUT THE UNDISCLOSED INCOME AT RS.10 5 7 256/-. 7. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 6 8. LD. CIT-DR ON THE OTHER HAND RELIED UPON THE ORD ERS OF BOTH THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE SU BMISSIONS MADE BEFORE THE LD. CIT(A) WHICH WERE READ DURING THE HEARING BEFORE US . SHRI PRADIP JAIN WHO WAS LOOKING AFTER THE DAY-TO-DAY AFFAIRS OF THE BUSINES S WAS THE BROTHER-IN-LAW OF SHRI RAJESH K. SHAH HIS STATEMENT U/S132(4) WAS RECORDE D AND HE HAS STATED THE MEANINGS OF O E A IN HIS STATEMENT U/S.132(4) OF THE ACT WITH THE SAID MEANINGS THE DIFFERENCE OF RS.1 97 908/- AND RS.10 57 256/- HAS CORRECTLY BEEN WORKED OUT BY THE AO. AS REGARDS THE STATEMENT U/S.132(4) OF THE ACT THE ASSESSEE HAD NOT DISCHARGED HIS ONUS IN PROVING THAT CONFESSION MADE U/S. 132(4) WAS AS A RESULT INTIMIDATION DURESS AND COERCION OR SAME WAS MADE AS A RESULT MISTAKEN BELIEF OF LAW OR FACTS. THEREFORE AO WAS JUSTIFIED IN ASSESS ING THE INCOME OF THE ASSESSEE ON THE BASIS OF STATEMENT U/S.132(4) OF THE ACT. THE R ELIANCE IS PLACED ON THE JUDGMENT OF HONBE CHHATTISGARH HIGH COURT IN THE CASE OF ACIT V. HUMAM CHAND JAIN (2010) 191 TAXMAN 319 (CHHATTISGARH) AND HONBLE BOMBAY HIGH COURT IN THE CASE OF KESRI K DEBOO V. ACITI (2009) 313 ITR 189 (BOM). IN THE CIRCUMSTANCES AND FACTS OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT( A) WHO HAS RIGHTLY CONFIRMED THE ACTION OF AO. THUS GROUNDS NO. 6 & 7 OF THE ASSESS EE ARE DISMISSED. 10. AS REGARDS GROUND NO. 8 AND GROUND NO.2 OF THE REVENUE THE BRIEF FACTS ARE THAT DURING THE COURSE OF SEARCH PROCEEDINGS IN THE CASE OF M/S. SWASTIK TAR GROUP SEIZED PAPERS INDICATING INFLATION OF EXPENSES BY W AY OF ADJUSTMENT ENTRIES OF COMMISSION FROM THE ASSESSEE WERE FOUND. THE AMOU NT WHICH IS DEBITED IN BOOKS OF ACCOUNT HAS BEEN PAID BY CHEQUE AND CASH HAS BEE N RETURNED BACK AND RECEIVED BY THE ASSESSEE. THE ENTRIES ARE FOUND ON PAGE NO.6 3 OF ANNEXURE-A/1 DATED 11-03- 2003 OF PANCHANAMA DRAWN AT PREMISES OF SHRI SOMABH AI. THE NOTINGS ARE :- NAME MS TIKI TAR INDUSTRIES ADDRESS; BARODA CREDIT BILL NO. DATE DEBIT BILL NO. DATE RS. PS. RS. PS. 1 94 263 00 CHEQUE RECEIVED SFI A/C COMMISSION 2 00 000 00 CASH 1.8.02 IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 7 WHEN THE ASSESSEE WAS CONFRONTED WITH THIS ENTRY AN D ALSO STATEMENT OF SHRI MANNSUKH H MADHANI U/S. 131(1A) CONFIRMING THE FACT THAT THIS IS MERE ADJUSTMENT ENTRY SHRI RAJESH K SHAH DENIED HAVING GIVEN ADJUS TMENT ENTRY. IT HAS BEEN ALSO CLAIMED BY THE ASSESSEE THAT HE HAS GOT ALL DOCUMEN TS LIKE CREDIT NOTE ETC. PREPARED AND THAT M./S. SWASTIK TAR INDUSTRIES HAS BEEN GIVEN GENUINE COMMISSION PAYMENT FOR SERVICES RENDERED. DURING THE COURSE FO R ASSESSMENT PROCEEDINGS AND ON VERIFICATION OF THE SEIZED MATERIAL ANNEXURE-A/2 1 IT HAS FOUND THAT ON PAGE NO.140 TO 142 THAT THERE ARE CREDIT NOTE FOR COMMI SSION/SERVICE CHARGES FOR MATERIAL SUPPLIED TO VARIOUS CLIENTS PREPARED IN THE NAME OF SHRI DHARMESH P SADARIYA PRADIP P SADARIYA AND MAYUR P SADARIYA. HOWEVER TH E NAME OF THE ABOVE PARTIES HAS BEEN STRIKE OFF WITH THE PENCIL AND THE NAME OF M/S. JAYA TRADING CORPORATION FOUND TO BE WRITTEN. THIS CREATED DOUBTS AND THE A BOVE PARTIES HAS BEEN ISSUED SUMMONS U/S. 131 OF THE ACT ON 18-102-2005. IN RES PONSE TO THAT SUMMON THE PARTY HAVE PERSONALLY APPEARED BEFORE AO. 11. IN RESPONSE TO THE SAID NOTICE U/S 131 THE PAR TIES HAD SUBMITTED REPLY THAT THEY HAVE NO BUSINESS CONNECTION WITH THE ASSESSEE NOR THEY HAVE SOLD ANY GOODS TO TIKI TAR COMPANY AND NOR THEY HAVE RECEIVED ANY COMMISSION EITHER IN CASH OR BY CHEQUE. THESE STATEMENTS ARE AVAILABLE AT PAGE 14 O F AOS ORDER. THE AO ISSUED SHOW-CAUSE TO THE ASSESSEE ALONG WITH COPIES OF THE STATEMENTS. IN RESPONSE TO THE SAME THE ASSESSEE SUBMITTED THAT HE HAS NOT INFLAT ED THE EXPENSES. THE REPLY IS AVAILABLE AT PAGES 15 & 16 OF AOS ORDER. THE AO WA S OF THE VIEW THAT TOTAL INCOME FROM THE INFLATED EXPENSES OF THE ASSESSEE IS RS.7 27 745/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 12. THE LD. CIT(A) DELETED THE ADDITION WITH REGARD TO RS.5 27 745/- SINCE NO DOCUMENT WAS FOUND WHICH COULD INDICATE NON-GENUINE NESS WITH REGARD TO THE TRANSACTION WITH THE ASSESSEE. LD. CIT(A) HOWEVER CONFIRMED THE ADDITION OF RS.2 LAKH SINCE MANSUKH H MADHANI PARTNER OF SWASTIK TA R INDUSTRIES IN THE STATEMENT HAD CONFIRMED TO BE AN ADJUSTMENT ENTRY. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT SHRI M ANSUKH H MADHANI PARTNER OF IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 8 SWASTIK TAR INDUSTRIES HAD CONFIRMED TO BE AN ADJUS TMENT ENTRY. MOREOVER NO COGENT EXPLANATION HAS BEEN BROUGHT ON RECORD BY TH E ASSESSEE BEFORE ANY OF THE AUTHORITIES BELOW TO PROVE THE GENUINENESS OF THE T RANSACTION. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AS REGARDS CON FIRMATION OF ADDITION OF RS.2 LAKH. 14. AS REGARDS THE DELETION OF ADDITION OF RS.5 27 745/-- ALL THE PERSONS HAD CONFIRMED THE TRANSACTION WITH THE ASSESSEE AND THE REFORE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.5 27 745/-. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) ON THE SAID ADDITION. THUS GRO UND NO.8 OF THE ASSESSEE AND GROUND NO.2 OF THE REVENUE BOTH ARE DISMISSED. 15. AS REGARDS GROUND NO.9 OF THE ASSESSEE THE BRI EF FACTS ARE THAT DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF M/S TIKI INDUSTRIES INDORE CERTAIN INCRIMINATING DOCUMENTS LIKE BLANK CHALLAN BOOKS O THER ACCOUNTS STATEMENT AND DULY SIGNED BLANK CHEQUES AND OTHER PAPERS WERE FOUND. I N THE STATEMENT RECORDED OF SHRI RAJESH TONGIA WHO WAS STATED TO BE PERSON RUNN ING M/S. QUALITY INSULATION ONE OF THE SO-CALLED SUB-CONTRACTORS OF THE ASSESSEE. T HE STATEMENT WAS CONFRONTED TO SHRI KISHOR PANCHAL U/S. 132(4) AS PER THE NOTINGS ON PAGE 12 OF ANNEXURE-A/21 SEIZED FROM THE OFFICE PREMISES OF M/S. TIKI TAR IN DUSTRIES BARODA. THE ASSESSING OFFICER WORKED OUT THE PROFIT OF RS.5 22 994/- @ 18 .65% AND IN CASE OF SUB-CONTRACT AT RS.1 81 388/- AT 8.05%. IT WAS ALSO WORKED OUT T HAT AVERAGE RATE OF PROFIT ON CONTRACT EXECUTED BY THE ASSESSEE DURING THE BLOCK PERIOD COMES TO15.62% AND AVERAGE RATE OF PROFIT ON SUB-CONTRACTOR WAS AROUND 5%. CONSIDERING THE MARGIN IN CONTRACT BUSINESS EXECUTED BY THE ASSESSEE THE AO APPLIED THE RATE OF 14% ON TOTAL CONTRACT RECEIPT OF RS.1 02 75 318/- AND WORKED OUT THE PROFIT ON SUB-CONTRACTOR AT RS.14 38 545/-. THE ASSESSEE HAD ALREADY DECLARED T HE SUB-CONTRACT PROFIT TO RS.5 88 856/- IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS SHOWN THE SUB- CONTRACT PROFIT TO RS.4 75 143/- AS AGAINST RS.14 3 8 545/- AND THE DIFFERENCE OF RS.9 63 402/- WAS CONSIDERED AS UNDISCLOSED INCOME OUT OF SUB-CONTRACT PROFIT DURING THE BLOCK PERIOD. 16. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSE SSING OFFICER. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 9 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSING OFFICER IN THE PRESENT CASE HAS MADE THE ADDITIONS ON THE BASIS OF SEIZED ANNEXURE STATEMENT OF MR. RAJESH H TONGIA WHO HAS STATED TO BE PERSON RUNNING M/S. QUALITY INSULATION AND AS PER NOTINGS OF THE S EIZED ANNEXURE THE AO HAS RIGHTLY WORKED OUT THE SUB-CONTRACT PROFIT FOR WHICH NO COG ENT EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE BEFORE ANY OF THE AUTHORITIES BELOW. T HEREFORE IN THE CIRCUMSTANCES AND FACTS OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY CONFIRMED THE ACTION OF THE AO. THUS GROUN D NO.9 OF THE ASSESSEE IS DISMISSED. 18. AS REGARDS GROUND NO.10 OF THE ASSESSEE. THE AS SESSING OFFICER ON THE BASIS OF THE HOUSEHOLD ARTICLES FOUND DURING THE COURSE O F SEARCH MADE AN ADDITION OF RS.90 500/-. 19. LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSIN G OFFICER SINCE THE ASSESSEE HAD NOT ADVANCED ANY DISCUSSION ON THE SAID ADDITI ON. 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. BEFORE US LD. COUNSEL FOR THE ASSESSEE DID NOT SERIOUSLY P ERSUE THE SAID GROUND AND HENCE THE SAME IS DISMISSED. THUS GROUND NO.10 OF THE AS SESSEE IS DISMISSED. 21. AS REGARDS GROUND NO.11 THE BRIEF FACTS ARE TH AT DURING THE COURSE OF SEARCH AT FACTORY PREMISES OF THE ASSESSEE THE FINISHED GO ODS AS WELL AS RAW MATERIALS LYING IN THE FACTORY PREMISES INVENTORISED TO THE DIFFERE NCE IN THE STOCK WHICH WAS WORKED OUT AS PER DETAILS AVAILABLE AT PAGE-25 OF AO'S ORD ER. SIMILARLY BY ON PERUSING RAW MATERIAL IT WAS FOUND THAT THERE WAS A SHORTAGE OF RS.92 032/-. THE EXCESS STOCK OF FINISHED GOODS AND SHORTAGE OF RAW MATERIAL WAS WOR KED OUT AT RS.11 38 217/- WHICH WAS STATED AS UNACCOUNTED INVESTMENT OF THE ASSESSE E AND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 22. LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSIN G OFFICER. 23. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE RELI ED UPON THE WRITTEN SUBMISSION BEFORE THE LD. CIT(A) ESPECIALLY THE WORKING AT PAG E-30 OF THE LD. CIT(A) WHERE THE IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 10 EXCESS AND SHORTAGE HAD BEEN SET OFF BY THE ASSESSE E AND EXCESS OF RS.67 000/- HAS BEEN WORKED OUT FOR THE PURPOSE OF ADDITION ACC ORDINGLY. 24. LD. DR ON THE OTHER HAND POINTED OUT THE DETAIL S OF THE SEIZED ANNEXURE WHERE EACH AND EVERY ITEM IS A SEPARATE ITEM AND SE T OFF THEREFORE CANNOT BE GIVEN. 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT ITEMS FOUND IN EXCES S OR IN SHORTAGE ARE ALMOST RELATED TO THE BITUMEN BEING THE COMMON RAW MATERIAL AND TH EREFORE THE SET OFF FOR THE EXCESS AND SHORTAGE SHOULD HAVE BEEN GIVEN BY THE A SSESSING OFFICER WHICH HAS NOT BEEN DONE. THEREFORE THE MATTER IS RESTORED TO THE FILE OF AO WHO WILL GIVE THE SET OFF OF SHORTAGE AGAINST THE EXCESS OF THE RAW MATERIAL/ FINISHED GOODS AND ALLOW THE RELIEF TO THE ASSESSEE ACCORDINGLY. THUS GROUND NO.11 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 26. AS REGARDS GROUND NO.12 OF THE ASSESSEE AND GRO UND NO.3 OF THE REVENUE. THE BRIEF FACTS ARE THAT DURING THE COURSE OF SEARC H AT FACTORY PREMISES ANNEXURE- 1/14 WAS SEIZED AND FROM CONTENTS IT WAS OBSERVED T HAT THERE ARE DETAILS OF PAYMENT MADE TO VARIOUS EMPLOYEES AT HALLOL FACTORY FOR THE PERIOD MAR01 TO FEB.02. THE TOTAL AMOUNT OF SALARY AND WAGES WAS RS.9 53 405/- PLUS BONUS OF RS.96 284/-. THE ASSESSEE SUBMITTED THE EXPLANATION FOR THE SAME. AF TER CONSIDERING THE EXPLANATION THE NET UNDISCLOSED EXPENDITURE WAS FOUND TO BE AT RS.4 80 452/- WHICH WAS ADDED TDO THE INCOME OF THE ASSESSEE. 27. LD. CIT(A) RESTRICTED THE ADDITION TO THE EXTEN T OF RS.2 40 226/- SINCE THE SEIZED MATERIAL OF UNACCOUNTED WAGES FOR THE BLOCK PERIOD WAS FOR THE AMOUNT OF RS.2 40 226/- ONLY. 28. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT THERE ARE EVIDENCES OF UNACCOUNTED WAGES TO THE EXTENT OF RS.2 40 226/- AND THEREFORE THE LD. CIT(A) HAS RIGHTLY RESTRICTED THE ADDITION TO THE EXTENT OF RS.2 40 22 6/-. WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). THUS GROUND NO.12 OF THE ASSESSEE A ND THAT OF REVENUES GROUND NO.3 BOTH ARE DISMISSED. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 11 29. AS REGARDS GROUND NO.13 OF THE ASSESSEE THE BR IEF FACTS ARE THAT DURING THE COURSE OF SEARCH SHRI RAJESH K SHAH IN HIS STATEME NT DATED 24-04-2003 HAD ACCEPTED UNACCOUNTED INVESTMENT OF RS.20 LAKH IN VA RIOUS FACTORY PREMISES. IN THE POST-SEARCH INQUIRY HE WAS ASKED TO QUANTIFY THE A BOVE INVESTMENT WHICH HAD BEEN EXPLAINED AND IDENTIFIED BY HIM WHICH IS AVAILABLE AT PADGE-34 OF AO'S ORDER. THE AO AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IN VIEW OF THE STATEMENT U/S.132(4) TREATED RS.3 LAKH AS UNACCOUNTED INVESTMENT OF THE ASSESSEE IN HALLOL FACTORY. 30. LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OF FICER. 31. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF LD. CIT(A) THAT THE SEARCH TOOK PLACE ON 11-03-2003 AND THE STATEMENT OF U/S. 132(4) WAS RECORD ON 24-04-20 03 WHICH SHOWS THAT THE STATEMENT WAS NOT GIVEN IN HASTE. THE STATEMENT WAS GIVEN AFTER A GAP OF ALMOST FORTY-TWO DAYS. THEREFORE THE SAME HAS TO BE CONSI DERED AS GIVEN AFTER CONSIDERING ALL THE MATERIAL FACTS IN HIS COMMAND. THE ALLEGATI ON OF THE ASSESSEE THAT THE PROHIBITORY ORDERS WERE USED AS A TOOL TO PUT PRESS URE IS ALSO BASELESS AS THE RECORDS AND ALSO THE PROCEEDINGS DO NOT PROVE THE S AID ALLEGATION. IN THE CIRCUMSTANCES AND FACTS OF THE CASE WE FIND NO INFI RMITY IN THE ORDER OF THE LD. CIT(A). THUS GROUND NO.3 OF THE ASSESSEE IS DISMIS SED. 32. AS REGARDS GROUND NO.14 OF THE ASSESSEE THE BRI EF FACTS ARE THAT A SURVEY U/S.133A WAS CONDUCTED AT THE FACTORY VIZAG BRANCH OF THE ASSESSEE. SOME INCRIMINATING DOCUMENTS WERE FOUND. THE ACTUAL PLAN T OF THE FACTORY WAS NOT STARTED AT THIS FACTORY TILL THE DATE OF SEARCH AS CONSTRUC TION OF FACTORY COMMENCED IN OCT02 AS PER SEIZED ANNEXURE. THE ASSESSING OFFICER WORKE D OUT THE DISCREPANCY AT RS.4 17 520/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 33. LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSIN G OFFICER. 34. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS WE CONCUR WITH THE FINDINGS OF LD. CIT(A) IN THE ABSENCE OF ANY CO GENT EXPLANATION BEFORE ANY OF THE AUTHORITIES BELOW. THUS GROUND NO.14 OF THE ASSESS EE IS DISMISSED. IT(SS)A NO.181 & 172/AHD/2006 B.P.1/4/96 TO 11/3/03 TIKI TAR INDS. V. ACIT CC -2 BRD PAGE 12 35. AS REGARDS GROUNDS NO.15 TO 18 OF THE ASSESSEE WITH REGARD TO CHARGE OF INTEREST THE SAME IS DIRECTED TO BE CHARGED ONLY F ROM THE DATE OF SUBMISSION OF LETTER FOR OBTAINING THE PHOTO-COPIES OF THE SEIZED DOCUME NTS BY THE ASSESSEE TO THE ASSESSING OFFICER TILL THE SUPPLY OF THE SAID PHOTO -COPIES. THE MATTER IS RESTORED TO THE FILE OF AO FOR ALLOWING THE RELIEF IF ANY AFT ER VERIFYING THE RECORDS. THUS GROUNDS NO.15 TO 18 ARE ALLOWED FOR STATISTICAL PURPOSES. 36. AS REGARDS GROUND 19 OF THE ASSESSEE IS GENERAL IN NATURE AND THEREFORE DOES NOT REQUIRE ANY ADJUDICATION. 37. IN THE RESULT APPEAL OF ASSESSEE IN IT(SS)A NO.181/AHD/.2006 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THAT OF REVENUE IN IT(SS)A NO.172./AHD/2006 IS DISMISSED. % $ !'# &'( 17 / 02 /201 2 ! - . / THIS ORDER PRONOUNCED IN OPEN COURT ON 17/02/ 201 2. SD/- SD/- ( G.C.GUPTA ) ( B.P. JAIN ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) &'(- 17/02/2012 1 / DKP* $ $ $ $ 223 223 223 223 43' 43' 43' 43' / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ''27 8 / CONCERNED CIT 4. 8- / CIT (A) 5. 3;. 2227 27# 1 / DR ITAT AHMEDABAD 6. .>? @% / GUARD FILE. BY ORDER/ $ /TRUE COPY/ A/1 ' 27# 1 /