TMI Blog2015 (4) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... certain claim has been accepted adverse to the interest of assessee, same can be retracted by way of deposition in affidavit and Assessing Officer ought to have made further inquiries in respect of same. Without making further inquiries, contents of affidavit should not be rejected. In case before us, once statement was retracted by Shri Shivcharan Sharma by filing an affidavit, burden was upon revenue to establish that statement given earlier was correct. The evidence has been submitted by way of bills for purchase of gum, process of preparation of gum, bills for preparation of gum paid to Shri Shivcharan Sharma. Payment being made by cheque and making deduction thereon and finally, filing the return of income by Shri Shivcharan Sharma. All these evidences lead to conclude that above expenses were debited by assessee. Accordingly, CIT(A) was justified in deleting the addition - Decided in favour of assessee. Disallowance of production incentives - CIT(A) deleted the addition - Held that:- It is evident from the assessment order that only one of the workers i.e. Jat Rampratap Chokaram has stated that he has not received production incentives, while other two have stated regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer found that processing charges of ₹ 11,73,477/- have been debited by assessee while Shri Shivcharan Sharma has stated that he has not received more than ₹ 6.5 lacs from M/s. Pooja Paper Craft. Accordingly, disallowance of ₹ 5,73,477/- was made. The stand of assessee has been that payment of ₹ 11,73,477/- made to Shri Shivcharan Sharma was for four activities i.e. box packing, loading, unloading and preparation of gum which is supported by bills raised by Shri Shivcharan Sharma. During survey, he was very afraid and was in confused state so he has mentioned that payment of ₹ 6 to 6.5 lakhs has been received only for first three activities i.e. box packing, loading and unloading. He regularly assessed to tax. Ultimately, rejecting the stand of assessee, addition was made of ₹ 5,73,477/- placing reliance on the statement of Shri Shivcharan Sharma as under: The contention that assessee has paid to Shivcharan Sharma the gum preparation charges is not based on fact as seen from the statements above. It is an after thought not supported by any evidence. Considering all the above aspects and factual position, the amount paid to Shivchar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparation of gum. Assessing Officer has brought nothing on record to suggest that any other person was paid for preparation of gum so as to negate the version of assessee to establish that Shri Shivcharan Sharma was not paid for preparation of gum. Moreover, assessee also filed affidavit of Shri Shivcharan Sharma, wherein it has been deposed that total amount of ₹ 11,73,477/- was paid to him and he has filed corresponding return of income accordingly. The contents of affidavit filed on behalf of Shri Shivcharan Sharma could not be rejected without confronting the contents of deposition to the deponent. Moreover, stand of assessee has been that payments were made by cheques and TDS was deducted thereon and payments were made subsequent to raising of bills by Shri Shivcharan Sharma. Under these facts and circumstances, Assessing Officer was not justified in negating the claim of assessee. Once a certain claim has been accepted adverse to the interest of assessee, same can be retracted by way of deposition in affidavit and Assessing Officer ought to have made further inquiries in respect of same. Without making further inquiries, contents of affidavit should not be rejected. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, CIT(A) has granted relief to assessee. Same has been opposed on behalf of Revenue inter alia submitted that CIT(A) was not justified in deleting addition made on account of disallowance of production incentives amounting to ₹ 13,04,998/-. Accordingly, he requested to set aside the order of CIT(A) and that of Assessing Officer be restored. On other hand, learned Authorized Representative reiterated the submissions made before CIT(A) and submitted that order of CIT(A) be upheld. 4.2 After going through rival submissions and material on record, we find that there were three categories of workers. i. One category is of three workers whose statements were recorded during the survey proceedings who have denied having received production incentives, ii. Second category is of workers who have filed affidavits and stated to have received production incentives and; iii. Third category is of other workers whose statements were neither recorded during the survey nor affidavits were filed by them later on. From the above, it is clear that production incentives were disallowable in case of persons who have stated that they have not received any production incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We uphold the same. 5. As a result, appeal filed by Revenue is dismissed. 6. In ITA No. 678/Ahd/2011, assessee has filed the appeal on the following grounds: Appellant craves leave to submit the following concise grounds of appeal before the Hon'ble ITAT: 1. Ld. CIT (A) erred in confirming disallowance of processing charges of ₹ 11,05,491/- out of total processing charges of ₹ 17,05,491/-. Without prejudice to the above, the appellant submits that out of total processing charges only ₹ 9,05,182/- is paid to Shiv Charan Sharma, therefore disallowance if any be made then restricted to ₹ 3,05,182/- (Rs. 9,05,182 - ₹ 6,00,000/-) 2. Ld. CIT (A) erred in confirming disallowance of production incentive of ₹ 14, 39, 028/- merely on basis of the statements recorded of three workers during the course of survey ignoring the receipts and affidavits of remaining workers. 6.1 First issue is with regards to disallowance of processing charges of ₹ 11,05,491/- out of total processing charges of ₹ 17,05,491/-. We have discussed and decided this issue in favour of assessee in A.Y. 2004-05 vide para 3 of this order. Facts bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to be deleted. 10. Next issue is with regards to disallowance of production incentive of ₹ 10,62,324/- on the basis of statements recorded of three workers during course of survey ignoring the receipts and affidavits of remaining workers. We have discussed and decided this issue in favour of assessee in A.Y. 2004-05 vide para 4 of this order. Facts being similar so following same reasoning, we are not inclined to concur with the finding of CIT(A) who has confirmed the disallowance of production incentive of ₹ 10,62,324/- merely on the basis of statements recorded of three workers during course of survey ignoring the receipts and affidavits of remaining workers Same is directed to be deleted. 11. As a result, appeal filed by assessee for A.Y. 03-04 is allowed. 12. In ITA No. 681/Ahd/2011, assessee has filed the appeal on the following grounds: Appellant craves leave to submit the following concise grounds of appeal before the Hon'ble ITAT: 1. Ld. CIT (A) erred in confirming disallowance of processing charges of ₹ 22,14,800/- out of total processing charges of ₹ 28,14,800/-. Without prejudice to the above, the appellant submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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