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TMI Blog2014 (2) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case. Your appellant therefore prays that the A.O. be directed to allow the loss claimed by the appellant. 2. On the facts and in the circumstances of the case the learned CIT(A) erred on law and on facts in upholding the additions of Rs.85,98,027/- out of Rs.1,80,99,968/- in respect of presumed unaccounted production and profit or unrecorded sales. The learned CIT(A) failed to appreciate the facts of the case up hold the additions made on presumption and surmises. Your appellant therefore prays that the addition of Rs.85,98,027/- be deleted. 3. On the facts and in the circumstances of the case the learned CIT(A) erred in not deleting addition of Rs.1,03,50,905/- in respect of unsecured loans. The addition made by the A.O. is on assumption and not based on finding. Your appellant therefore prays that the addition of Rs.1,03,50,905/- be deleted. The appellant requests leave to add to or alter the grounds of appeal at or before the time of hearing of the appeal. 2.1. Briefly stated facts are that the case of the assessee was processed u/s.143(1) of the Income Tax Act,1961 (he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee Shri J.P.Shah argued that the lower authorities were not justified in disallowing the loss and estimating the profit at the same time. He submitted that due to non-availability of the details in the form of accounts which were taken away by the Central Excise Authorities. The assessee could not produce the evidence in support of the loss claimed. He submitted that the accounts were duly audited by the auditor of the assessee-company. He further submitted that the disallowance of loss and at the same time estimation of profit is highly excessive. The authorities below are not justified. On the contrary, ld.Sr.DR Shri K.C.Mathews supported the order of the AO. He submitted that there is no dispute that the assessee failed to produce evidences in support of its claim. He submitted that the assessee was given sufficient opportunity to produce the accounts. He further submitted that the assessee could have taken very well a certified copy from the excise officials and proven the genuineness of the claim. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rol Specialities Oil Ltd. for AY 2002-03 and directed the AO to tax the GP @ 40% of Rs.1,77,45,067/-. He submitted that the action of the authorities below is not justified on two counts. Firstly, the unrecorded sales also represented unrecorded investment as per Revenue but the authorities below failed to take note of the fact that roll over investment is not considered. He submitted that in the identical situation, the Coordinate Bench of this Tribunal (ITAT 'D' Bench) in ITA No.328/Ahd/2009 for AY 2002-03 in the case of Motorol Technologies Ltd.v s. ITO vide order dated 23/03/2012 has taken the margin @ 12.5% on such unaccounted sales. The Hon'ble ITT has followed the earlier decision rendered in the case of M/s.Vijay Proteins Ltd. reported at 58 ITD 528. On the contrary, Sr.DR supported the order of the AO and submitted that admittedly, in this case, the assessee could not produce the books of accounts, therefore the AO was required to estimate the profit and made addition u/s.69C in respect of the investments. He submitted that the proviso to section 69C makes it clear that such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew than taken by the ITAT in ITA No.328/Ahd/2009 for AY 2002-03(supra), wherein the Hon'ble Coordinate Bench has taken 12.5% margin on unaccounted sales. We, therefore, direct the AO to take 12.5% margin on unaccounted sales of Rs.1,77,45,067/- and recompute the addition accordingly. This ground of assessee's appeal is allowed as indicated above. 7. Apropos to ground No.3, the ld.counsel for the assessee submitted that this ground has been wrongly raised, therefore in view of the statement of the ld. counsel for the assessee, this ground is accordingly rejected. 8. In the result, appeal of the assessee in ITA No.717/Ahd/2009 for AY 2003-04 is partly allowed. 9. Now, we take up the Revenue's appeal in ITA No.728/Ahd/2009 for AY 2003-04. The following grounds have been raised by the Revenue in its appeal:- 1) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of rs.95,01,941/- overlooking the fact that he, himself had confirmed the addition of the A.O. for rejection of book results when the details of huge expenses were not substantiated by production of proper books for account and documents during the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Orissa Corporation Ltd. reported in 159 ITR wherein it is held that by furnishing confirmation with Pan, primary onus is discharged by the appellant. Onus thereafter shifts to the Assessing Officer to make further investigation and prove the credit non-genuine. The Assessing Officer cannot ask appellant to submit further evidences and make addition on non-compliance. Since primary onus is discharged by the appellant by submitting confirmation with PAN, credit cannot be treated as unexplained on non-submission of additional information. Accordingly, the credit is treated as explained in these four cases and addition made by the Assessing Officer is deleted." 8.3. The Revenue could not controvert this finding on fact. Therefore, we do not find any infirmity in the order of the ld.CIT(A), same is hereby upheld. This ground of Revenue's appeal is rejected. 8.4. As a result, the appeal of the Revenue in ITA No.728/Ahd/2009 for AY 2003-04 is dismissed. 9. Last, we take up the Assessee's appeal in ITA No.718/Ahd/2009 for AY 2004-05 and Revenue's appeal in ITA No.729/Ahd/2009 for AY 2004-05. 9.1. In Assessee's appeal (ITA No.718 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may be deemed necessary. Relief claimed in appeal The order of the CIT(A) on the issues raised in the aforesaid grounds be set aside and that of the Assessing Officer be restored. 9.5. Ground Nos.1 & 2 are inter-connected. The DR supported the Assessment Order. On the other hand, ld.counsel for the assessee supported the order of the ld.CIT(A). He submitted that during the appellate proceedings, all the material evidence in support of claim was placed on record. 9.6. After hearing rival contentions and perusing the orders of the authorities below, we find that ld.CIT(A) has given finding on fact in para 3.5 of his order, which is reproduced as under:- "I have considered the submissions of the counsel and facts of the case. The Assessing Officer disallowed loan in the absence of confirmation and PAN of the parties and also the creditworthiness of the lenders. The Assessing Officer also added increase in share capital amounting to Rs.4.75 crores. In the appeal proceedings the appellant submitted accounts confirmations from Alpana Gandhi, Nirmala S.Gandhi, Motorol Speciality Oils Ltd, Manhatton Fingrowth Ltd., Flexi Pack India Ltd and Mot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and prove the credit non-genuine. The Assessing Officer cannot ask appellant to submit further evidences and make addition on account of non-compliance. Since primary onus is discharged by the appellant by submitting confirmation with PAN, credit cannot be treated as unexplained on non ITA submission of additional information. Accordingly, the credit is treated as explained in these cases and addition made by the Assessing Officer is deleted. As regards loan of Rs.59,93,172/-, the same is basically from Motorola Speciality Oil Ltd. Rs.1,41,24,172/- as raw material loan and Rs.1 lac taken from Alpana Gandhi. All other accounts had only repayments during the year. The loan from Alpana Gandhi is received by cheque and she has confirmed the same therefore credit in her name is explained. As regards Motorola Specialities Oil Ltd., similar issue was there in A.Y. 2003-04 wherein a direction was given to the Assessing Officer as under:- "Similarly in the case Motorola Specialities Oil Ltd. there is journal entry for raw material loan amounting to Rs.20,41,600/-. Both the concerns are related companies and probably assessed in the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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