Dy.CIT Circle-11(1), Room No. 312 C.R. Building New Delhi Vs. M/s EL-EN India P. Ltd. 43-44, DSIDC, Scheme-III, Okhla Industrial Area, Phase-II New Delhi.

ACIT, Central Circle-2, New Delhi. Vs. M/s Essel Shyam Communication Ltd., C-138, Naraina Industrial Area, Phase-1, New Delhi.

Mrs. Perin F. Lalkaka “Thumbelina”, Opp. Sarvamangal Society, Naranpura Vistar, Ahmedabad V/S D.C.I.T Circle-7, Ahmedabad

Dy.CIT Circle-11(1), Room No. 312 C.R. Building, New Delhi. Vs. M/s EL-EN India P.Ltd. 43-44, DSIDC,Scheme-III, Okhla Industrial Area, Phase-II New Delhi.

ACIT, Central Circle-2, Vs. M/s Essel Shyam Communication New Delhi. Ltd., C-138, Naraina Industrial Area, Phase-1, New Delhi.

DCIT, CC-23, Vs. M/s. Rama Krishna Jewellers, New Delhi C/o M/s. RRA Taxindia, D-28, South Extension, Part-I, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F' NEW DELHI) BEFORE Shri G. D. AGGARWAL, HON'BLE VICE PRESIDENT And SHRI U. B. S. BEDI, JUDICIAL MEMBER I.T.A. Nos.4884, 4885, 4886, 5416, 4887, 5417 & 5418/Del/2010 (assessment years 2000-01, 2001-02, 2002-03, 2003-04,2004-05, 2005-06 & 2006-07 respectively) DCIT, CC-23, Vs. M/s. Rama Krishna Jewellers, New Delhi C/o M/s. RRA Taxindia, D-28, South Extension, Part-I, New Delhi Cross Objection Nos.370, 371, 372, 373, 47, 48 & 49/Del/2011 (assessment years 2000-01, 2001-02, 2002-03, 2004-05, 2003-04, 2005-06 & 2006-07 respectively) M/s. Rama Krishna Jewellers, Vs. DCIT, CC-23, C/o M/s. RRA Taxindia, New Delhi D-28, South Extension, Part I, New Delhi ITA No. 15 / Del/ 2011 (Assessment Year 2007-08 ) M/s. Rama Krishna Jewellers, Vs. DCIT, CC-23, C/o M/s. RRA Taxindia, New Delhi D-28, South Extension, Part I, New Delhi PAN : AAEFR1351H (Appellants) (Respondents) Assessee by : Smt. Veena Joshi, CIT DR Department by: Shri Ashwani Taneja, and Shri Rohan Khare, Adv. ORDER PER U B S BEDI, JUDICIAL MEMBER: These 15 matters comprise of 7 appeals of the department and equal number of cross objections of the assessee against separate orders passed by Ld. CIT(A) III dated 31.08.2010 for the assessment years 2000-01, 2001-02, I.T.A. Nos. 4884,4885,4886,4887,5416,5417,5418 2 /DEL/2010 C.O. Nos.370,371,372,372,47,48,49/Del/2011 I.T.A. No. 15/Del/2011 2002-03 and 2004-05, and dated 08.09.2010 for assessment year 2003-04, 2005-06 & 2006-07 respectively along with another appeal of the assessee against the order of CIT(A) XIII, New Delhi dated 16.11.2011 relevant to assessment year 2007-08. 2. Since, these mattes were heard together and involve some common issues, therefore, are being disposed off by a single order for the sake of convenience. 3. So far as the appeal of the department and cross objection of the assessee are concerned for assessment year 2000-01to 2006-07, it was, at the very outset, submitted by the Ld. counsel for the assessee that appeals of the department are mainly relatable to deletion of additions made u/s 68 and part disallowance made by the A.O. on account of making charges paid to karigars in different amounts besides challenge with regard to admission of additional evidence under Rule 46A of the Act whereas, in the cross objections of the assessee, besides confirmation of disallowance of the amounts of remuneration paid to Mrs. Mukta Chaudhary in these years, there is another challenge with regard to part confirmation of various disallowances. It was submitted that so far as deletion of addition under section 68 and addition on account of 50% of making charges is concerned, these amounts have been deleted by Ld. CIT(A) on the basis of second remand report obtained after admission of additional evidence in which the A.O. has duly admitted the claim of the assessee. So, the appeals of the revenue are not maintainable, which may be dismissed. 4. As regards cross objections of the assessee are concerned, Ld. counsel for the assessee submitted that except challenging the confirmation of remuneration paid to Mrs. Mukta Chaudhary in all these years, the assessee does not want to press confirmation of various other different disallowances in the cross objections. With respect to effective ground, it was submitted I.T.A. Nos. 4884,4885,4886,4887,5416,5417,5418 3 /DEL/2010 C.O. Nos.370,371,372,372,47,48,49/Del/2011 I.T.A. No. 15/Del/2011 that firstly, addition has been made on the basis of statement recorded at the time of search when no opportunity to cross examination was given to the assessee and secondly, in assessment year 2009-10, where the assessment was framed u/s 143(3) and such disallowance was made but deleted by Ld. CIT(A) and by filing copy of the order of Ld. CIT(A), it was pleaded that either the addition should be deleted or the matter should be restored back to the file of the A.O. for reconsideration of the issue afresh as appropriate opportunity has not been granted to the assessee by the A.O. in this regard. 5. Ld. D.R. has been heard who relied upon the order of the A.O. and pleaded for setting aside the order of Ld. CIT(A) and to restore that of the A.O. It was pointed out that when all the additions have been made after considering the second remand report of the A.O. who has duly communicated about the genuineness of the transaction for which the Department should not have any objection, on which she did not give any appropriate reply. 6. After hearing both the sides, considering the material on record, we find that in this case, search was conducted in the case of the assessee on 20.01.2006 when certain incriminating documents were seized. Subsequently, notice u/s 153A of the I. T. Act, 1961 were issued requiring the assessee to furnish the return of income for the current year as well as last six years which was duly filed and after due notice o the assessee and considering the reply, assessments were framed and certain additions were made against which the assessee preferred appeals and Ld. CIT(A) gave certain relief, against which, Department has come up in appeals and against the additions sustained, assessee has filed cross objections. But at the time of hearing of this matter, the assessee except contesting confirmation of the additions of the amount of remuneration paid to Mrs. Mukta Chaudhary, ground in relation to all other additions were not pressed and against the I.T.A. Nos. 4884,4885,4886,4887,5416,5417,5418 4 /DEL/2010 C.O. Nos.370,371,372,372,47,48,49/Del/2011 I.T.A. No. 15/Del/2011 confirmation of addition on account of remuneration paid to Mrs. Mukta Chaudhary for all these years, the Ld. A.R. of the assessee contended that neither appropriate opportunity has been given nor cross examination of Mrs. Mukta Chaudhary has been granted when additions have been made considering the statement of Mrs. Mukta Chaudhary. It was contended for deletion of addition for all these years in this regard or the matters should be restored back to the file of the A.O. for redeciding the same afresh. 6.1 We, after having considered the facts, circumstances of the case and material on record, find it just and appropriate to uphold the order of Ld. CIT(A) with respect to the additions made and to the extent sustained by the Ld. CIT(A) on the basis of second remand report in which the A.O. has agreed with the material submitted by the assessee to the Ld. CIT(A), which were sent to the A.O. So, the appeals of the department are dismissed. 6.2 So far as cross objections of the assessee are concerned, considering the rival submissions, we find it just and appropriate to set aside the orders of authorities below in respect to additions made on account of remuneration paid to Mrs. Mukta Chaudhary and confirmed by Ld. CIT(A) and restore the issue to the file of the A.O. for reconsideration of the same afresh after giving due opportunity of being heard to the assessee. We hold and direct accordingly. 6.3 As a result, all the appeals of the revenue are dismissed whereas, cross objections of the assessee are partly allowed for statistical purpose. 7. As regards the appeal of the assessee for the assessment year 2007-08 is concerned, challenge is with regard to confirmation of the order of the A.O. in disallowing sum of Rs.2.40 lacs on account of remuneration paid to Smt. Mukta Chaudhary, partner of the assessee firm and challenge is also about charging of interest u/s 234A and 234B. Since the first issue is similar to the issue in cross objections allowed by us, in earlier part of this order I.T.A. Nos. 4884,4885,4886,4887,5416,5417,5418 5 /DEL/2010 C.O. Nos.370,371,372,372,47,48,49/Del/2011 I.T.A. No. 15/Del/2011 while disposing off the appeals of the department and cross objections of the assessee, so adopting the same basis and reasoning, we set aside the orders of authorities below on this issue and restore the matter back to the file of the A.O. for redeciding the issue afresh as per directions given in the group cases above. As regards the issue in relation to confirmation of charging of interest u/s 2343A and 234B is concerned, the same is mandatory and consequential and the A.O. will consider the same while passing the order with regard to the issue restored back to his file and determine the same accordingly being mandatory and consequential. 7.1 As a result, appeal of the assessee for the assessment year 2007-08 the same is allowed partly for statistical purposes. 8. As a result, appeals of the department for all the years are dismissed whereas, the cross objections of the assessee are treated to have been allowed partly for statistical purpose. The appeal of the assessee for the assessment year 2007-08 is allowed partly for statistical purpose. 9. Order pronounced in the open court on 01.11.2013. Sd./- Sd./- (G.D. AGGARWAL) (U.B.S.BEDI) Vice President Judicial Member Date: 01st Nov., 2013. Sp. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A)-XXV, New Delhi AR, ITAT, 5. CIT(ITAT), New Delhi NEW DELHI

Shri Dinesh Kumar Sandilya, Shri Dinesh Kumar Sandilya, Mahavir Enclave, Mahavir Enclave, Enclave,Delhi.. Vs. Income Tax Officer, Income Tax Officer, Income Tax Officer, New Delhi.

Smt.Anila J.Joshi, Bazargate High School, Gunbow Street, Fort, Mumbai-400001 Vs. Income Tax Officer 12(1)(4), Mumbai.

, Û `', , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH " C " BENCH, AHMEDABAD ¢ ^ .., ^ , Û BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER And SHRI KUL BHARAT, JUDICIAL MEMBER (ss) ./IT(ss)A No.376/Ahd/2003 (Block Period - AY : 1991-92 to 2001-02) Baldevbhai P.Patel / The Asst.CIT A-9, Galaxy View Apt. Vs. Central Circle-1(3) Nr.Ankur Road Ahmedabad Naranpura Ahmedabad . / . / PAN/GIR No. : ABYPP 8210 E ( /Appellant) .. (× / Respondent) / Appellant by : - None - × /Respondent by : Shri T.P.Krishnakumar, CIT-DR / Date of Hearing : 28/10/2013 /Date of Pronouncement : 28/10/2013 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : In this case, the Assessee had filed an appeal against the order of the Ld.Commissioner of Income Tax(Appeals)-I, Ahmedabad (`CIT(A)' for short) dated 01/07/2003 pertaining to Block Period 1991-92 to 2001- 02 and the appeal of the assessee was disposed of by this Tribunal vide order dated 31/08/2007. The assessee has raised following grounds of appeal:- "The Appellant most respectfully submit as under: 1. That, the learned CIT(A) erred in law and on facts in upholding the addition of Rs.112,362/- towards late return submission for IT(ss)A No.376 /Ahd/2003 Baldevbhai P.Patel vs. ACIT Block Period AY ­ 1991-92 to 2001-02 -2- the A.Y. 2000-01. That on the facts and in the circumstances of the case full relief ought to have been granted. 2. The ld.CIT(A) was not justified in sustaining the levy of surcharge on tax payable u/s.113 of the Income Tax Act. That under the provisions of Ch.XIV-B and section 113, levy of surcharge is not sustainable in law. 3. The appellant requests that leave may, be granted to add, alter or amend the grounds of appeal at or any time before the hearing of the appeal." 2. Subsequently, the Revenue filed a miscellaneous application No.262/Ahd/2009. The said miscellaneous application was allowed by this Tribunal vide order dated 07/03/2013 by recalling the Tribunal order dated 31/08/2007. During the course of hearing of miscellaneous application on 01/03/2013, none appeared on behalf of the assessee. The Revenue has placed on record proof of service of notice of hearing. Under these circumstances, the appeal was taken up for hearing in the absence of the assessee. 3. The ld.CIT-DR submitted that this Tribunal had decided ground No.2, thereby directing the AO to delete the surcharge levied on the assessee u/s.113 of the Act. He submitted that this issue has been decided by the Hon'ble Supreme Court rendered in the case of CIT vs. Suresh N.Gupta reported at (2009) 297 ITR 322 (SC). 4. We have heard the CIT-DR, perused the material available on record and gone through the orders of the authorities below. We find that this Tribunal (`C' Bench) had decided ground No.2 in favour of assessee by relying on the decision of Special Bench in the case of Merit IT(ss)A No.376 /Ahd/2003 Baldevbhai P.Patel vs. ACIT Block Period AY ­ 1991-92 to 2001-02 -3- Enterprises vs. DCIT reported at 101 ITD 01 (Hyd)(SB). It was held by this Tribunal that "as the search in this case has taken place on 16.11.2000, i.e. prior to the levy of surcharge with effect from 1.6.2002. We, therefore, after considering the rival submissions in the facts, this issue is duly covered by the Special Bench decision, respectfully following the said decision, allow the ground of appeal of the assessee and direct the AO to delete the surcharge levied on the assessee u/s.113 of the Act". We find that this order of the Tribunal was prior to the decision of the Hon'ble Supreme Court rendered in the case of CIT vs. Suresh N.Gupta(supra). During the course of hearing of the miscellaneous application, the assessee chose not to appear before this Tribunal and while allowing the miscellaneous application, this Tribunal had relied on the decision of Hon'ble Supreme Court rendered in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported at 305 ITR 227 (SC). We find that the Hon'ble Supreme Court in the case of CIT vs. Suresh N.Gupta(supra) has held as under:- "23. For the aforestated reasons, we hold that even without the proviso to s. 113 (inserted vide Finance Act 2002 w.e.f. 1st June, 2002), the Finance Act 2001 was applicable to block assessment under Chapter XIV-B in relation to the search initiated on 17th Jan., 2001 and accordingly surcharge was leviable on the tax amounting to Rs. 97,456 at 17 per cent amounting to Rs. 16,504. We accordingly answer the above question in favour of the Revenue and against the assessee. 4.1. The Hon'ble Apex Court has further held as under:- "26. There is one more reason for rejecting the above submission. Prior to 1st June, 2002, in several cases, tax was prescribed sometimes in the 1961 Act and sometimes in the Finance Act and often in both. This made liability uncertain. In the present case, however, the rate of tax in IT(ss)A No.376 /Ahd/2003 Baldevbhai P.Patel vs. ACIT Block Period AY ­ 1991-92 to 2001-02 -4- case of block assessment at 60 per cent was prescribed by s. 113 but the year of the Finance Act imposing surcharge was not stipulated. This resulted in the above four ambiguities. Therefore, clarification was needed. The proviso was curative in nature. Hence, the proviso inserted in s. 113 merely clarifies that out of the above four dates, the relevant date for applicability of the Finance Act would be the year in which the search stood initiated under s. 158BC." 4.2. Therefore, respectfully following the aforesaid decision of the Hon'ble Apex Court, ground No.2 of assessee's appeal is hereby rejected. As a result, ground No.1 of assessee's appeal is allowed and ground No.2 is rejected. 5. In the result, Assessee's appeal stands partly allowed. Order pronounced in Court on the date mentioned hereinabove at caption page Sd/- Sd/- (..) ( ) Û ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 29/ 10 /2013 .., .../T.C. NAIR, Sr. PS Copy of the Order forwarded to : / 1. / The Appellant 2. × / The Respondent. 3. / Concerned CIT 4. () / The CIT(A)-I, Ahmedabad 5. , , / DR, ITAT, Ahmedabad 6. [ / Guard file. / BY ORDER, × //True Copy// / (Dy./Asstt.Registrar) / , / ITAT, Ahmedabad ,

ITO, Ward-39(1), Room No.-381, C.R. Building, I.P.Estate, New Delhi-110002. vs M/s Aryan Life Style Pvt. Ltd., 17B, MGF House, Asaf Ali Road, New Delhi-110002.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: `A' NEW DELHI BEFORE SHRI R.S.SYAL, ACCOUNTANT MEMBER AND SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .No.-1883/Del/2012 (ASSESSMENT YEAR-2007-08) ITO, M/s Aryan Life Style Pvt. Ltd., Ward-39(1), Room No.-381, 17B, MGF House, Asaf Ali Road, C.R. Building, I.P.Estate, vs New Delhi-110002. New Delhi-110002. PAN-AAFCA5158F (APPELLANT) (RESPONDENT) Appellant by Sh. Yogesh K. Verma, CIT DR Respondent by Sh. Umesh Gupta, CA ORDER PER DIVA SINGH, JM This is an appeal filed by the Revenue against the order dated 17.02.2012 of CIT(A)-V, New Delhi pertaining to 2007-08 assessment year on the following grounds:- "1. The learned CIT(Appeals) has erred on facts and in law in admitting additional evidences filed by the assessee in violation of Rule 46D of the I.T. Rules. 2. The learned CIT(Appeals) has erred on facts in deleting the disallowance of Rs.58,16,787/- made u/s 40(a)(ia) by the A.O. on account of rental expenses. 3. The learned CIT(Appeals) has erred on facts in deleting the disallowance of Rs.2,13,81,924/- made by A.O. on account of office and administrative expenses. 4. The learned CIT(Appeals) has erred on facts in deleting the disallowance of expenditure on fixed assets at Rs.2,00,00,000/- and disallowance depreciation of Rs.20,00,000/-. 5. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 2 I.T.A .No.-1883/Del/2012 2. The relevant facts of the case are that the assessee in the year under consideration e-filed its return declaring an income of Rs.13,905/-. However as per the computation of income business loss for the year shown was Rs.4,50,96,221/- and after adjusting short-term capital gain of Rs.13,905/-, the loss carried forward to the next year was shown as Rs.4,50,82,316/-. As per the assessment order in the year under consideration the assessee has earned income from trading of sports goods, foot wear, apparels and accessories etc from retail outlets at various locations. In the course of the assessment proceedings the assessee was required to produce books of accounts for examination and verification of the details submitted. However the books of the accounts were not produced. Accordingly qua the ground 2,3 & 4, the AO made additions for the reasons set out in para 3.2, 3.3 & 3.4 observing as under :- "3.2. Disallowance u/s 40(a)(ia):- Perusal of details filed shown that TDS has not been deducted on commission of Rs.5,87,667/- pertaining to May, 2006 payable/paid to M/s ADM Apparels, therefore, the same is disallowed as per the provision of section 40(a)(ia) of the IT Act, 1961. Similarly, out of Rental expenses of Rs.2,95,04,177/-, it is seen that TDS have been paid on aggregate amount of Rs.52,29,120./- pertaining to February 2007 in the month of June 2007. Since, TDS pertaining to February 2007 should have been paid during the financial year itself as per provisions of section 40(a)(ia) of the IT Act, 1961, the same is disallowed and added to the income of the assessee for the relevant assessment year 2007-08. Since, books of accounts have not been produced for verification it can not be ascertained as to whether the TDS have been deducted and paid as per the provisions of section 40(a)(ia), therefore, a further disallowance of Rs.25,00,000/- is made on estimated basis. Thus, total disallowance u/s 40(a)(ia) comes to Rs.58,16,787/- 3.3. It is observed that office and administrative expenses of Rs.7,12,73,080/- is more than the cost of goods sold i.e. Rs.6,58,50,604/-. Thus, it is apparently excessive, unreasonable and unjustified. Since books of accounts have also not been produced during the assessment proceedings a sum of Rs.2,13,81,924/- i.e @ 30% of the said expenses is disallowed 3 I.T.A .No.-1883/Del/2012 being unverified, unreasonable and excessive and added to the income of the assessee for the relevant assessment year 2007-08. 3.4. An addition of Rs.9,97,91,647/- have been made in fixed assets. Since, books of accounts along with bill, vouchers, in respect of the said addition in fixed assets have not been furnished a sum of Rs.2,00,00,000/- is disallowed out of addition of Rs.8,8893,149/- in furniture and fitting blocks on account of being unverified expenses and added to the income of the assessee for the relevant assessment year. Depreciation of Rs.20,00,000/- is also disallowed accordingly." 3. In appeal before the First Appellate Authority, petition moved under Rule 46A by the assessee was accepted. Considering the arguments advanced on behalf of the assessee, Ground No-2 raised in the present petition was decided in the following manner:- "4.1. The issue involved and the submission made by the appellant have been considered. Anybody verifying the details of TDS can see that the appellant has itself noted the date of TDS in a wrong fashion which is different from the earlier one-It is not continuously writing dates as per date first, month afterwards and year in the end. This can be seen from page 106 & 107 of the Paper Book (PB). It is only on actual verification and that also on being told by the appellant or its AR that one can find out that month has been written first, date second and year in the end of the TDS pertaining to February deposited in March 2007 i.e. 3.6.2007 stands for 6th March 2007. (Fault does not lie with the AO as such) but the fact remains that he did not convinced with the version of the appellant. Although the summery of TDS on the same account i.e TDS on rent payment is available on page 109 of the Paper Book. The undersigned has seen copy of challans (Pg 110 of the PB) showing the deposit of TDS and the payment has been found in order. Therefore, the disallowance of rental expenses made under section 40(a)(ia) is deleted and the ground of appeal is allowed." 3.1. Qua Ground No-3 agitated by the Revenue, the issue was concluded vide para 5.1 in the following manner:- 4 I.T.A .No.-1883/Del/2012 "5.1. The issue involved and the submission made by the appellant have been considered:- (i) The AO has made disallowance of 30% of the total office and administrative expenses purely on adhoc basis without bringing anything on record that to show that the payments were bogus or did not have business nexus. (ii) Even if the books of account were not produced during assessment proceedings, the same were produced during remand proceedings as noted above and the AO appears to have examined the same. (iii) The AO was given reasonable opportunity to submit its remand report-a letter asking for the remand report was issued on 12.10.2011; the remand report was received on 11.02.2011. In view of the above, the additions made by the AO are deleted and the grounds of appeal no.5 is allowed." 3.2. Similarly the issue agitated by Ground No-4 was decided in assessee's favour vide Ground No.-6.1 in the following manner:- "6.1. The issue involved and the submission made by the appellant have been considered. The AO has not established that the expenditure on fixed assets was from undisclosed sources. He has not conduced any inquiry even during remand proceedings as to the source of investment in the assets under consideration. This is also a fact that the assessee has not claimed the expenditure in its Profit & Loss a/c since it is capital expenditure and has added to its fixed assets. Therefore, the addition of Rs.2 crores on account of fixed assets and Rs.20 lacs on account of depreciation are deleted. This ground of appeal is therefore allowed." 4. Aggrieved by this the Revenue is in appeal before the Tribunal. Whereas the Ld. CIT DR placed heavy reliance upon the assessment order, copy of the remand report was filed so as to emphasize that despite the fact that the issue was remanded even in the remand proceedings the assessee did not comply with the specific directions given in regard to the production of relevant record, books of accounts and vouchers etc. Specifically addressing Ground No-2 it was his submission that the CIT(A) has given a finding that the assessee had noted all data of TDS in wrong 5 I.T.A .No.-1883/Del/2012 fashion and made specific reference to pages 106 and 107 of the paper book however in the copies available in the paper book, the relevant months are not very clear. As such it was his request that the assessee should be directed to produce original documents. Qua the other issues it was also his stand that despite being afforded specific opportunities the assessee could not produce the relevant record neither in regard to the administrative expenses nor in regard to the amount of investment made by the assessee. In the circumstances it was his prayer that the impugned order be set aside and the assessment order be upheld. 5. The Ld. AR on the other hand heavily relied upon the impugned order. It was his submission that due to lack of opportunity in the assessment proceedings the books of accounts could not be produced. The said reply was given by the Ld. AR in response to the specific query of the Bench as the AO has made an observation that the assessee was required to produce books of accounts for examination and verification which were not produced. Addressing the same, the Ld. AR submitted that in the remand proceedings the books of accounts were produced and considering the same, the relief has been granted by the CIT(A). In view of the fact that the department had pointed out that the photocopies were not clearly showing the month. The Ld. AR was required to file clearer copies. Responding to the said opportunity to show original document, Ld. AR filed a copy of Challan stated to be downloaded from the website of the department. Since it was not confirmed the LD. AR was required to certify the same and he was asked whether the original document was available to him. In response to which it was stated that the original documents are available and the document sought to be filed it was stated would be certified. Ld. AR was also required to address the Remand Report available on record filed by the assessee itself at pages 293-295 of the paper book. A perusal of the same shows that the AO required the assessee vide letter dated 26.10.2010 to submit the following information:- 6 I.T.A .No.-1883/Del/2012 "..1. Details of payment in respect of which tax has been deducted at source during the year, in the following format- S.No. Head of A/c in Nature of Gross amount Tax Date of deposit of tax P&L A/c payment paid by you deducted deducted Also provide copy of TDS return for the relevant Asst. Year 2007- 08 alongwith evidence of payment of TDS deducted (in original) and highlight corresponding entries in your bank statements. 2. Complete details of administrative expenses of Rs.7,12,73,080/- alongwith supporting documents i.e rent agreements, sales tax order, commission payment details etc. in original for verification. Also give justification for such expenditure. Please highlight these expenses in bank statement for verification. 3. Complete details of addition in fixed assets with original bills, vouchers and complete Books of accounts (ledger, cash book, Bank book, jornal, Fixed asset register etc.) in original for examination/verification...." 5.1. A perusal of the same shows that as per para 3 of Remand Report dated 09.02.2011, the evidence filed was found to have various shortcomings despite specific opportunity being given. As a result of this situation, the AO issued another letter to the assessee on 12.01.2011 requiring him to produce the following information:- "4. On 12.01.2011 letter was again issued to the assessee for producing the following:- "...1. Please furnish the details of payment (as per P& L a/c) in respect of which tax has been deducted at source during the year, in the following format:- S.No. Head of A/c Gross amount Amount on which Amount of Date of deposit of in P&L A/c paid by you TDS deducted & Tax deducted/ tax deducted paid rate of TDS 2. Copy of TDS return pertaining to the A.Y.2007-08 alongwith copy of challans showing TDS payments. Please highlight payment of TDS with respect of rent, commission and 7 I.T.A .No.-1883/Del/2012 brokerage', commission paid, `repair & maintenance expenses', `security charges', `legal & professional expenses' and `salaries' 3. Please give detailed notes and justification of `commission and brokerage' as well as `commission paid', as shown in P&L account. Also, furnish complete details of parties to whom commission, brokerage etc. paid alongwith their confirmed copies of accounts and copies of ITR for the relevant A.Y.2007- 08. 4. Please furnish complete details of parties to whom rent were paid alongwith their confirmed copies of accounts and copies of ITR for the relevant A.Y.2007-08. 5. Please furnish complete details of persons to whom salaries were paid i.e names, addresses, place of posting, monthly salary and gross salary paid during A.Y.2007-08. Also, provide copy of Form No-16 issued to the employees." 5.2. Consequent to this as per record the AO came to the following conclusion in para 4 & 5 which is extracted from his Report available on record:- "4. Matter was fixed for 18.01.2011 to furnish above said documents before the undersigned. On that date, letter dated 18.01.2011 was filed making claims about producing the details twice on 09.11.2010 and 16.11.2010. Contents of the letter shows assessee's/A.R.'s uncomfortableness in furnishing details as required. I do not agree with the claim made regarding production of details as stated in the said letter. Since, I was required by your goodself to send remand reports obviously I needed to examine the issues pertaining to additions made. Since, the matter could not be examined on 09.11.2010 and 16.11.2010 due to paucity of time and urgency of attending to other pressing matters, letter dated 12.01.2011 was issued affording the assessee another opportunity for furnishing certain details, as stated above. It may be seen that despite being afforded three opportunities, details requited vide letters dated 26.10.2010 and 18.01.2011 were not furnished. 5. Since, details required as stated above were not furnished the issues relating to additions made in the assessment order remains unexplained and therefore, I would request your goodself to sustain the additions made and uphold the assessment order." 8 I.T.A .No.-1883/Del/2012 6. The Ld. AR was required by the Bench to address the same. In response thereto it was submitted that the Remand Report was refuted by the assessee. The assessee's submissions it was stated is placed at pages 86-89 of the paper book. A perusal of the same shows that apart from faulting the AO and insisting that the assessee was represented by Mr. Saheed Rizvi, the assessee has not been able to give any cogent explanation addressing the specific objections of the AO. We have gone through the impugned order and have already extracted the reasoning concluding the issue in favour of the assessee given by the CIT(A). Accordingly in the light of these peculiar facts, circumstances and submissions of the parties before the Bench as available on record, we hold that Ground No-1 of the department in regard to admission of additional evidence deserves to be dismissed as evidently sufficient opportunity was not available during the assessment proceedings. Qua Ground No.- 2, the relevant evidence required to be filed by the assessee for which purpose the appeal was adjourned to the next date the assessee has filed a printout from the website of the department however the same has not been certified. The original document has not been shown despite a specific opportunity. Accordingly in the circumstances we find ourselves unable to concur with the reasoning and finding given by the CIT(A) in para 4.1. The issue as such is restored back to the AO with the direction to decide the same in accordance with law after giving the assessee a reasonable opportunity of being heard. The assessee is directed to produce the original documents before the AO in support of the claim. Addressing Ground No- 3, it is seen that no specific independent reasoning has been given in para 5.1 by the CIT(A). It is seen that the reasoning given that the books of accounts produced before the AO in the remand proceedings is factually incorrect. Since the Ld. AR assured on a specific query by the Bench that the books of accounts are available accordingly it is considered appropriate in the interests of justice to set aside the impugned order and restore the issue to the file of the AO who shall examine the 9 I.T.A .No.-1883/Del/2012 issue de novo after giving the assessee a reasonable opportunity of being heard. Same is the position in regard to the issue addressed in Ground No-4 as the factum of investment qua the original documents and books of accounts were never produced before the AO. In the circumstances, we donot find the reasoning given by the CIT in para 6.1 to be a cogent reasoning as the necessary facts qua the issue were never produced and the CIT(A) has not addressed this fact. The assessee is directed to produce the relevant record. Accordingly Ground No-4 raised by the Revenue is also allowed for statistical purpose and the issue is restored back to the file of AO who shall decide the same in accordance with law after giving the assessee a reasonable opportunity of being heard. 7. In the result, the appeal of the Revenue is partly allowed for statistical purposes. The order is pronounced in the open court on 28th of October 2013. Sd/- Sd/- (R.S.SYAL) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:28/10/2013 *Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

Raj Kumar, Vs. JCIT Bhiwani Range, Prop. Mor Hatcheries, Bhiwani. Ludana Tehsil Safidon, Distt. Jind. Vs. JCIT Bhiwani Range, Bhiwani.

Prakash Vasantbhai Golwala vs. ACIT (ITAT Ahmedabad)

London Star Diamond Company (I) P. Ltd vs. DCIT (ITAT Mumbai)

COMMISSIONER OF INCOME TAX (CENTRAL) Vs. M/S EXPRESS SECURITIES PVT LTD.

$~9. * IN THE HIGH COURT OF DELHI AT NEW DELHI + INCOME TAX APPEAL NO. 406/2013 & CM NO. 12622/2013 Date of decision: 22nd October, 2013 COMMISSIONER OF INCOME TAX (CENTRAL) ..... Appellant Through Mr. Sanjeev Sabharwal, Sr. Standing Counsel & Mr. Puneet Gupta, Advocate. versus M/S EXPRESS SECURITIES PVT LTD. ..... Respondent Through Nemo. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J. (ORAL): This appeal by the Revenue, which pertains to Assessment Year 2006-07, is delayed by 156 days. The appellant had earlier filed an appeal before the Allahabad High Court, which was withdrawn for lack of jurisdiction and now this appeal has been preferred before the Delhi High Court. Before issuing notice on the application for condonation of delay, we deem it appropriate to examine and consider the appeal on merits. ITA No. 406/2013 Page 1 of 5 2. The assessee is a company. In the return for the year in question, it had declared long-term capital gain of Rs.3,34,65,931/- and the said gain was claimed as exempt under Section 10(38) of the Income Tax Act, 1961 (Act, for short). The respondent-assessee had claimed before the Assessing Officer that they were maintaining two sets of portfolio, i.e., investment and trading portfolio and the shares, which were sold and subject matter of long-term capital gains, were held in the investment portfolio. This factual position was not disputed. 3. The Assessing Officer has recorded that as per the business activities undertaken by the assessee, they were dealing and trading in shares and financial securities in Bombay Stock Exchange, Delhi Stock Exchange and Calcutta Stock Exchange. The respondent-assessee was a registered broker with the said exchanges. The Assessing Officer held that the business of the assessee was not to invest in shares but to deal with the shares as a stock broker and trader. He observed that conversion of stock in trade into investment was done with the intention not to pay taxes as Section 10(38) was introduced by Finance Act, 2004 with effect from 1st April, 2005. Accordingly, he held that the entire amount was taxable as a "trading receipt" and not under the head "capital gains". 4. The assessment order does not mention the date on which the ITA No. 406/2013 Page 2 of 5 shares in question were purchased. We also note that the assessment order records that the assessee had converted and transferred the shares in question under the head "investment" on 1 st April, 2004. This factual position was not disputed or questioned. The shares in question were sold during the period ending 31st March, 2006, nearly 2 years after the date of conversion of stock in trade into investment with a specific declaration. Mere fact that Section 10(38) was introduced in the statute by Finance Act 2004 with effect from 1st April, 2005, does not mean that the said conversion was improper or illegal. After the said Section was inserted, the assessee on noticing the tax benefit, was entitled to convert and change his holding from stock in trade into investment. Such conversion cannot be dealt with and rejected on the ground that Section 10(38) of the Act was introduced with effect from the said date. Conversion may be rejected for other reasons and grounds like the intention was not to convert and the assessee still continued to treat and regard the shares as stock in trade and not investment. But there is hardly any discussion in the assessment order in this regard. Justification and reasons have not been elucidated and brought on record to uphold the contention of the Revenue that the shares were continued to be held as stock in trade and not as an investment. 5. The Commissioner (Appeals) noticed that the shares in question ITA No. 406/2013 Page 3 of 5 as held on 31st March, 2004 and their book value was as under:- Scrip Name Quantity Book Value as on 31/03/2004 Global Tele 3,35,000 2,09,14,050/- Himachal Futuristic 6,15,000 75,27,600/- NIIT 20,000 33,97,200/- 6. The Commissioner (Appeals) has observed that in the balance sheet as on 31st March, 2005 the shares were shown under the head "inventories" and in the subsequent balance sheet as on 31st March, 2006 shares were again shown under the head "investment at book/fair value on 1st April, 2004". Thus, the assessee converted the aforesaid stock in trade of Rs.3,18,38,850/- to the head "investment at book/fair value on 1st April, 2004" and the said disclosure was made in the balance sheets as on 31st March, 2005 and 31st March, 2006. In the first year, the Assessing Officer did not disturb the aforesaid conversion and accepted the same. The Commissioner (Appeals) noticed that for the Assessment Year 2005-06 assessment was concluded under Section 143(3) vide order dated 27th November, 2007 but the Assessing Officer did not object to the said conversion. These shares were subsequently sold as detailed in paragraph 2.9 of the order of the Commissioner (Appeals) in August, 2005, September, 2005 and ITA No. 406/2013 Page 4 of 5 substantial portion was sold in March, 2006 and long-term capital gains was declared. He observed that statute did not reject or frown upon conversion of stock in trade into investment and the said conversion was permissible. Commissioner (Appeals) referred to the Circular No. 4/2007 dated 15th June, 2007 issued by the Central Board of Direct Taxes, which stipulates that two portfolios one for stock in trade and one in respect of investments could be maintained by the same assessee. He took into account the period of holding by the assessee and the fact that the conversion into investment was made on 1st April, 2004 and outlay was disclosed in the audited accounts for the Assessment Year 2005-06. The sales made, as noticed above, were after considerable delay of approximately two years thereafter. 7. In view of the aforesaid factual findings recorded by the Commissioner (Appeals) and the tribunal, we do not see any reason to interfere and issue notice on the main appeal. Accordingly, we are not inclined to issue notice on the application for the condonation of delay and the same and consequentially the appeal are dismissed. SANJIV KHANNA, J. SANJEEV SACHDEVA, J. OCTOBER 22, 2013 VKR/NA ITA No. 406/2013 Page 5 of 5

MAK Data P. Ltd vs. CIT (Supreme Court)

M/s Natural Bio Organic Product B/2, Golden Plaza, Ankur Char Rasta, A.K. Road, Surat. Vs. Income Tax Officer (OSD), Range 9, Surat

1 ITA No 2399/Ahd/2009 . A.Y. 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL " B " BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI, A.M.) I.T. A. No. 2399/AHD/2009 (Assessment Year:2006-07) M/s Natural Bio Organic Product Vs. Income Tax Officer (OSD), B/2, Golden Plaza, Ankur Char Range 9, Surat Rasta, A.K. Road, Surat. (Appellant) (Respondent) PAN: AAFFN5752M Appellant by : Shri M.J. Shah Respondent by : Shri P.L. Kureel, Sr. D.R. ( )/ORDER Date of hearing : 08-10-2013 Date of Pronouncement : 18 -10-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. This appeal is filed by the Assessee against the order of CIT(A)-V, Surat dated 29.05.2009 for A.Y. 2006-07. 2. The facts as culled out from the order of lower authorities are as under. 3. Assessee is a firm engaged in the business of manufacturing and sale of Bio Organic Fertilizer. It filed its return of income for A.Y. 06-07 on 04.10.2006 declaring total income of Nil after claiming deduction of Rs. 2 ITA No 2399/Ahd/2009 . A.Y. 2006-07 28,42,041/- under Section 80JJA of the Act. The case was selected for scrutiny and thereafter the assessment was framed u/s. 143(3) vide order dated 31.12.2008 and the total income was assessed at Rs. 61,76,377/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) vide order dated 29.09.2009 dismissed the appeal of the Assessee. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us and has raised the following grounds:- 1.1 The CIT(A) erred in upholding the addition of Rs. 33,34,336/- on account of unexplained cash credit under section 68 of the I.T. Act, 1961. 1.2 The CIT(A) ought to have appreciated the overall facts and circumstances of the case and should have deleted the addition of Rs. 33,34,336/- made on account of unexplained cash credit under section 68 of the I.T. Act, 1961. 2.1 The CIT(A) further erred in not appreciating the facts and legal submissions and in the process erred in confirming the addition of Rs. 28,42,041/- on the pretext of rejection of deduction claimed under section 80JJA of the I.T. Act, 1961. Ground no. 1.1 and 1.2 are in connection with addition made u/s. 68 and interconnected and both the grounds are considered together. 4. During the course of assessment proceedings, A.O. noticed that Assessee has shown receipt of unsecured loan of Rs. 33,34,336/- which was claimed to have received from OM Textiles and Elegant Diamond Company. To verify the genuineness of transaction and the creditworthiness of the persons, notice under section 133(6) was issued to the parties and they were also asked to confirm the transaction by producing the copy of contra account, bank statement, return of income, proof of identity etc. 3 ITA No 2399/Ahd/2009 . A.Y. 2006-07 5. In the case of OM Textiles, A.O. noticed that the bank account furnished pertained to period 1.04.2006 to 23.05.2006 and the same was not covered under the period of scrutiny. He also observed that in the statement that there were some entries of cash amounting to Rs. one lac but as the bank account for the period was not provided of the persons who had advanced the money to the Assessee, A.O. was of the view that the genuineness of the transaction and creditworthiness of the person advancing the fund left unproved. With respect to Elegant Diamond Company, A.O. noted that the information called from Elegant Diamond Company was not received from Elegant Diamond Company till the date of finalization of assessment order but however the Assessee had submitted the copy of confirmation statement, acknowledgement of return of income, copy of bank account which it had claimed to have been received directly from Elegant Diamond Company. The submission of the Assessee was not found acceptable by the A.O. for the reason that (i) none of the documents were original and were merely photo copies bearing no date of issue/preparation. (ii) The signature on the copy of confirmation of account and on the copy of acknowledgement of return of income of Shri Rikhab Chand Jain did not tally. (iii) The acknowledgement of the return of income did not establish any relation between Shri Rikhab Chand Jain and Elegant Diamond Company, in whose name the notices were issued. (iv) The return of income of Elegant Diamond Company was filed at Gandhidham despite the fact that the address given by the Assessee was of Mumbai. (v) The income shown in the return of income was only Rs. 1,30,028/- which according to A.O. creates a doubt about the capacity to loan Rs. 30 lacs. (vi) The bank statement of Elegant Diamond Company did not carry the name and the 4 ITA No 2399/Ahd/2009 . A.Y. 2006-07 branch of the bank in which the account was maintained. In view of these facts, the A.O. considered that the Assessee has failed to prove the genuineness of transaction. He accordingly considered the amount received from both the parties as unexplained cash credit under section 68 and made an addition of Rs. 33,34,336/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A), CIT(A) upheld the order of A.O. by holding as under:- "I have gone through the assessment order and also through the submissions made and judgments relied upon by the appellant. The appellant's main contention is that when the payments are routed through banks the genuineness of transaction is proved. In this regard the appellant enclosed the bank statement of M/s Elegant Diamond Co. along with the copy of the acknowledgement of the return filed by the said party. The bank statement so attached does not bear the name and address of the person to whom that bank account belong. Further the confirmation filed by the appellant of the said party bears the signature which differs from the signature of the said party on the return filed by him. The appellant did not file any supporting document like affidavit from the said party affirming that the signature on the confirmation and on the return of income are of the same person. Merely the transactions are routed from bank is not sufficient compliance. The circumstantial evidence too play very important role. Here the documents attached in support of appellant's claim are against his claim, therefore, I hold that the addition made by the AO as unexplained cash credits is correct. As regard loan received from M/s Om Textiles the appellant has filed confirmation and acknowledgement of return and the bank statement of year not relevant to the year under consideration. In this regard, I disagree with the appellant's contention that there is no scope for doubting the same just because subject depositor has by mistake provided the bank statement for subsequent period. The appellant in his support did not produce the bank statement of the period under consideration even before me. Without verifying the entries in appellant's bank account with that of the depositor I am not is position to accept the appellant's submissions. Therefore, addition as unexplained cash credit from M/s OM Textile made by the AO stands confirmed. Therefore, the appeal of the appellant against the addition of Rs.33,34,336/- of unsecured loans treated as unexplained cash credits u/s 68 of the Act is rejected." 6. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us. Before us, with respect to Elegant Diamond Company it was submitted that it was a proprietory concern of Shri Jain. Assessee placed on paper book, the copy of confirmation from Elegant Diamond 5 ITA No 2399/Ahd/2009 . A.Y. 2006-07 Company which contained in PAN number and Address. He also placed at page 73 of the paper book, the confirmation of balance as on 31.03.2006 and pointed to the fact that it contains the telephone number of Elegant Diamond Company and further submitted that the Assessee has also deducted TDS. He also placed on record, the copy of return of income of Shri Jain for A.Y. 06-07 at page 74of the paper book and the copy of his bank account showing the payment of Rs. 30 lacs by cheque. With respect to OM Textile, he placed on record the copy of the ledger account at page 79 of the paper book. He also placed on record at page 80, the copy of return of income of Shri Jaysukhbhai Lathia. He therefore submitted that the Assessee has discharged the initial onus cast upon the Assessee and therefore no addition was called for. The ld. D.R. on the other hand submitted the Assessee has not proved the genuineness of the transaction and he pointed to the finding of CIT(A) and thus supported the order of A.O. and CIT(A). 7. We have heard the rival submissions and perused the material on record. It is an undisputed fact that Assessee has received loan from two parties namely Elegant Diamond Company and OM Textile. With respect to Elegant Diamond Company, Assessee has placed on record the copy of confirmation of accounts which contains the Telephone number of the creditor. The ld. A.R. has also placed on record the copy of return of income and the bank book of Elegant Diamond. We also find that during the course of assessment proceedings, the Assessee has furnished these materials but no enquiry was made by the A.O. He has simply rejected the submissions of the Assessee for the reasons listed in his order. We are of the view that in the present case, with respect to Elegant Diamond 6 ITA No 2399/Ahd/2009 . A.Y. 2006-07 Company, the Assessee has duly discharged the initial onus cast upon it and thus no addition is required on that count. 8. With respect to OM Textile, we find that Assessee has filed copy of the return of income and has also filed the copy of his pass book. However, no copy of the confirmation has been filed before us. Considering the totality of the facts, we are of the view that in the interest of justice and fair play one more opportunity be granted to the Assessee to substantiate its stand before the A.O. We therefore remit the matter with respect to OM Textiles to the file of A.O. and direct him to verify the submissions made by the Assessee and thereafter decide the issue in accordance with law and after giving a reasonable opportunity of hearing to the Assessee. Thus this ground of Assessee is partly allowed. Ground no. 2 is with respect to rejection of claim of deduction of Rs. 28,42,041/- under Section 80JJA. 9. A.O. noticed that Assessee had claimed deduction of Rs. 28,42,041 under 80JJA. The Assessee was asked to submit documentary evidence to confirm that it has fulfilled the condition laid down in the section for claiming the deduction. A.O. also noticed that most of the bills/ invoices for sale of Vermin Compost was issued in the name of Shri Narsibhai Savalia. A.O. issued letter u/s. 133(6) to the party for confirmation of transaction but the letter was returned unserved. Thereafter A.O. issued commission under Section 131(1)(d) to ITO, Amreli assigning inquiry for confirmation of transaction with Shri Narsibhai Savalia. A.O. noted that ITO, Amreli vide letter dated 22.12.2008 has reported that Shri Narsibhai 7 ITA No 2399/Ahd/2009 . A.Y. 2006-07 Savalia had in his statement which was recorded on oath had shown his ignorance about any transaction with the Assessee firm. The Assessee was thereafter asked to explain the mismatch in the information, but no satisfactory explanation was given by the Assessee. Thus in the absence of satisfactory explanation, Assessee disallowed the claim of deduction under 80JJA. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) after considering the submissions of the Assessee upheld the order of A.O. by holding as under:- "I have gone through the assessment order and also through the submissions made and judgments relied upon by the appellant. Except from the argument of the appellant that the general project information consists of the date of commencement of business as 2005 I disagree with all the other arguments of the appellant. But merely the date of commencement of business in the said report does not prove that the business was actually commenced in the year 2005. From the documents submitted before me it could be seen that the appellant's claim that statement given by Shri Narsibhai is not correct, is absolutely not acceptable. The signatures on the statement recorded and that on the delivery challans produced by the appellant do not match. Further the test reports of M/s Pollucon Laboratories Pvt. Ltd submitted by the appellant appears to be fabricated as there is printing as well as signature difference in all the four test reports. The condition for claiming deduction under section 80JJA is, "a deduction of an amount equal to the whole of such profits and gain for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences". In the appellant's case from the documents submitted before me it is not proved that the business has actually been commenced during the year under consideration. Therefore, I do not find any reason to interfere with the decision of the AO and hence confirm the addition of Rs. 28,42,041/- made by the AO by disallowing the deduction u/s. 80JJA. 10. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us. Before us, at the outset, the ld. A.R. submitted that the statement of Shri Narsibhai Savalia was recorded at the back of the Assessee and the Assessee was not granted any opportunity to cross-examine him. He further submitted that the Assessee be granted an opportunity to cross- examine. Shri Narsibhai Savalia and therefore the matter may be remitted 8 ITA No 2399/Ahd/2009 . A.Y. 2006-07 to the file of A.O. with necessary directions. The ld. D.R. on the other hand supported the order of A.O. 11. We have heard the rival submissions and perused the material on record. We find commission under Section 131(1)(d) of the Act was issued to ITO, Amreli who was assigned to make enquiry with Shri Narsibhai Savalia about the transaction of alleged sale by with the Assessee. A.O. in his order has noted that ITO, Amreli vide order dated 22.12.2008 has reported about ignorance of any transaction by Shri Narsibhai Savalia with the Assessee firm. The A.O. has relied on the aforesaid statement to deny deduction. A.O. has also noted that the majority of sales by the Assessee was to Shri Narsibhai Savalia. We further find that Assessee was not granted an opportunity to cross-examine Shri Narsibhai Savalia. 12. In the case of CIT vs. Eastern Commercial Enterprises (1994) 210 ITR 103 (Cal) Hon. Calcutta High Court has held as under:- "As a matter of fact, the right to cross examine a witness adverse to the Assessee is an indespensible right and the opportunity of such cross examination is one of the corner stones of natural justice. It has further held that it is trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. He must be supplied the contacts of all such evidence, both oral and documentary, so that he can prepare to meet the case against him. This necessarily also postulates that he should cross examine the witness hostile to him." 13. In view of the aforesaid facts, and to meet the ends of justice, we are of the view that the Assessee be granted an opportunity to cross-examine Shri Narsibhai Savalia. We therefore remit the matter to the file of A.O. and direct him to allow the opportunity to cross-examine of Shri Narsibhai Savalia to the Assessee and after considering the submissions 9 ITA No 2399/Ahd/2009 . A.Y. 2006-07 of Assessee decide the issue in accordance with law and after giving reasonable opportunity of hearing to the Assessee. Thus this ground of Assessee is allowed for statistical purposes. 14. In the result, the appeal of the Assessee is partly allowed for statistical purposes. Order pronounced in Open Court on 18 -10 - 2013. Sd/- Sd/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER Ahmedabad. TRUE COPY Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) ­ 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER Deputy/Asstt.Registrar ITAT,Ahmedabad

M/s Sanraj Engineering P. Ltd. A-4/B-1, Mohan Co-op Industrial Estate Mathura Raod, New Delhi. Vs. ITO Ward-7(3) New Delhi.

Hatkesh Co-op Housing Society Ltd vs. ACIT (ITAT Mumbai)

Bharat Petroleum Corporation Ltd vs. ITAT (Bombay High Court)

M/s. Roha Dyechem Pvt. Ltd. A-44-45, MIDC, 2nd Street Marol, Andheri(E) Mumbai-400 092. Vs. ACIT, Central Circle-43 Aayakar Bhavan Mumbai-20.