TMI Blog2015 (6) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... in such matters. Had it been so, then in assessee’s own case, for the assessment years 2009-10 & 2010-11, the department has not only accepted the books of account and book result but also its income from sale of milk. If in the subsequent year, the factum of sale of milk have been accepted then with the same logic, the finding of the assessment year 2006-07 and 2007-08 that there is no sale of milk, cannot be held to be applicable in the impugned assessment year, i.e. A.Y. 2008-09. Each year have to be examined independently based on facts and materials on record, because, the matter pertaining to rejection of books of accounts are factual issues, which need to be examined every year. Thus, in view of our above finding, we hold that books of account and the book result, as shown by the assessee should be accepted and consequentially the estimation of the undisclosed income of ₹ 8,30,742/-, as submitted by the CIT(A) is deleted. - Decided in favour of assessee Addition u/s 69A - Held that:- Cash was found from the residence of the Director Jasvinder Bajaj, wherein a sum of ₹ 7,34,000/- was found and ₹ 39,500/- was found from another Director, Shri Swaranjit Baj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer in making the addition of ₹ 8,73,500/- u/s 69A of the I.T. Act, although the source of investment was properly explained. 6. On the facts and in the circumstances and in law, the interest charged u/s 234A, 234B, and 234C of the I.T Act, 1961 are invalid and bad in law . 3. Brief facts of the case qua the issue raised in ground no. 3 4 are that, the assessee is a company incorporated on 31st March, 2005 with main object of carrying on the business of manufacturers and traders in all kinds of dairy/Milk products through various retail outlets and its business premises. A survey operations were conducted on 8th March, 2007 u/s 133A, on the business premises and retail outlets which was converted into search u/s 132(1) on the same date. The search and seizure operation was carried out not only on the business premises of the assessee, but also on residential premises of the Directors and family members. During the course of search seizure and survey operation conducted by the Investigation Wing, statements of various persons including Directors and employees were recorded and certain papers/documents were also seized. In pursuance of such searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier answers. Q.No. 11: Please submit the quantitative details of purchase of milk in liter of AY 2006-07 and 2007-08 along with quantitative details of all your products in liter/kgms. Ans: I shall submit the details of purchase of milk at the earliest. I shall submit the sales register details at the earliest. Q.No. 12: It is once again requested that you should provide quantitative details of milk and quantitative details of sales? Ans: We shall provide you all the details and prior to that we shall show you all the registers and we shall give you details on your guidance . AO, further noted that assessee has sales outlets at various places (as per the details noted by him at page 4 of the assessment order) and stated that assessee buys milk and manufactures various dairy products, which are sold through these outlets, however, there is no sale of milk from these retail outlets. In response to the show cause notice that the assessee does not deal in sale of milk as found during the course of search, the assessee submitted that its main business is in milk and milk products and the information gathered by the search party was based on statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, assessment order of the Assessing Officer and facts of the case carefully. It is noticed that the Appellant company is engaged in the business of sale of milk and milk products. During the course of Search and Survey operation no bills vouchers etc. were found and seized to prove that the assessee is selling milk as claimed in the books as claimed in the books of accounts. The books of Accounts were also not found during the search and never produced before Investigation wing. Statement of Shri Jaswinder Singh Bajaj director of the company was also recorded who has promised to submit the statement of sale and purchase of milk and admitted that no inward register, production/consumption register and outward register has been maintained by the company. The statement of salesmen at six other placed was also recorded who have stated that only milk products are sold on those counters and no milk was sold. During the assessment proceedings, the Assessing Officer has again called for quantitative details of sale of milk with documentary evidence. However no documentary evidence was submitted before the Assessing Officer inspite of specific enquires were made from time to time. Neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as never been denied by the Directors or the Manager Sales. It was made clear to the concerned authority that sale of milk is done in the early hours of the morning from the factory premises itself, prior to the opening of the shop. In support, he referred to the reply filed by the assessee before the AO. These averments of the assessee have not been properly rebutted either by the AO or by the CIT (A). He further submitted that a detailed statement of purchase and sale of milk and milk products for the financial year 2007-08 was filed before the AO as well as CIT (A), the copy of which is appearing form pages 46 to 105 of the paper book. The said details are also duly recorded in the books of accounts, which are not only audited but were also produced before the AO. He fairly admitted that in the assessment years 2006-07 and 2007-08, the Tribunal has decided the issue of rejection of books of accounts and estimation of net profit rate against the assessee. However, the said finding will not act as a res judicata and will not be applicable in the impugned assessment year for the reason that, in the matter of rejection of books of accounts, the AO should not be influenced by the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of accounts maintained and also the Stock Register for the period 1st April, 2007 to 31st March, 2008 and also for the period subsequent to the search i.e. assessment years 2009-10 2010-11. In response, the assessee had furnished the details of stock register as maintained in tally , which gives the details of opening balance, purchase of milk, milk processed for milk products, consumption of milk products, sale of milk and closing balance. These details have been maintained on day-to-day basis, wherein quantity-wise and value-wise details have been given. The stock register itself shows the veracity of the purchase, consumption, production and sale. The copy of register/stock register for the financial year 2007-08 has been kept on record. Lastly, Mr Lalkaka submitted that one very important fact which needs to be noted that in the case of the assessee in the assessment year 2009-10 and 2010-11, the assessment in the case of the assessee have been completed under scrutiny proceedings and order u/s 143(3) have been passed, wherein, not only the sale of milk but also the book results shown in the regular books of accounts have been accepted. The copy of the assessment orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide quantitative details of milk and the quantitative details of products sold to which it was stated that the same shall be provided after some time. The AO has also referred to the extract of certain statements of the salesmen, who have denied any sale of milk from the outlets where they were working. Similarly, some of the other employees /salesmen have reiterated the same that milk is not sold from the retail shops. From these materials, the AO had come to the conclusion that assessee has shown bogus sale of milk in its book in order to suppress the production of other milk products, which have a higher margin. He has further noted that at the time of survey/search assessee could not produce registers, books of account and details of sale of milk. 11. On the contrary, the assessee before the AO vide letter dated 16.11.2009 had stated as under: Your query regarding the statements made by the staff that they have not sold the milk is wrong in nature as you have collaborated the statement from one unit of one person without ascertaining the facts from other outlets. Moreover, the nature of selling the milk is also different as small consumable packets are sold at the outl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen the shop with the help of my attendant. From the main shop located nearby at Punjab Sind Panner Centre, 622, Durga Niwas, Khar Pali Road, Khar (W), Mumbai -52, I received on an average on daily basis 20 kgs of Paneer for my sales counter. The manager at the Durga Niwas shop delivered me Paneer with a small sheet of white paper on which the weight is written on it. In a whole day, I sell the product at my counter as a retail as per requirement of the customer say 100 gms., 250 gms., 500 gms. Etc. at the rate of ₹ 170/- per kg. At the end of the day while closing, I submit the cash and the balance paneer at the shop at Durga Niwas from where I took it in the morning. I prepare a sheet which is available with me in a printed format on which it is written the amount of product taken, amount of product sold in a day, cash received, cash submitted and the balance paneer submitted. I prepare this sheet on daily working basis. The shop is open for all days in a week from 8.30 a.m. to 9.30 p.m. There is only counter sales and there is no home delivery, hotel delivery . The aforesaid clarification and the statement have not been rebutted by the AO with any material facts or ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sales of milk and various milk products. As per the direction, the Counsel has filed the print-out of stock register, which has been maintained in tally and also the relevant purchase and sale invoices on sample basis. From the perusal of the stock register, which has been maintained on day-to-day basis, it is seen that assessee has recorded the date-wise opening balance of the milk; purchases made during the day; milk processed for milk products i.e. in the pipelines and machines; consumption for milk products; sales of milk and closing stock. All these details have been maintained on quantitative-wise and value-wise. From the perusal of the stock register, it is seen that so far as sale of milk is concerned, the quantity of sales is quite less as compared to the quantity used for manufacturing of various milk products. For example, in the month of April 2007, the quantity of milk sold is 560 liters on 04.04.2007 and 481 liters on 30th April, 2007. Similarly, in the month of May 2007, there is only one instance of milk which was sold on 05.05.2009. From the month of June onwards, the milk has been sold almost every day, though, quantity sold is far less than the quantity of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Mr. Jaswinder Singh Bajaj Computerized entries are, therefore, not being seen on computer at this premises as the papers are sent to Khar. Q. 11 What are the daily reports of production and dispatch, stock and sales for the current financial year maintained? Please produce the same. Ans: I am producing the respective papers for the current F.Y. The same are as per inventory in Annexure A. Q. 22 Do you want to say anything else? Ans: The accounts are regularly maintained in normal practice but to year-end finalization and the absence of the Accountant being on leave, the accounts of April 2007 to date, could not be updated. However, regularly our accounts are maintained regularly but due to the above two reasons the accounts were not there . Further, the relevant reply of the assessee filed before the AO vide letter dated 05.11.2009, 10.11.2009, 19.11.2009 7th December, 2009 reiterating the maintenance of books of account and the nature of details before the AO, are also reproduced hereunder: Letter dated 5th November, 2009 please note that as per your earlier questionnaire a question was put up whether the inventories are maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts. The complete movement analysis of milk is also attached which is evident that there are also parties to whom cash sale is made, hence cash sale of milk cannot be dropped out rightly. In the financial year 2007-08 sale of milk has been executed in the name of Asian Chemist Prop., Godrej Natures Basket - Kandivli, Kailash Parbat, Nanda Distributors, R. K. Shashank Dairy the amount for the same was received by cheque, which is duly reflected in the books of accounts. The complete movement analysis of milk is also attached which is evident that there are also parties to whom cash sale is made, hence cash sale of milk cannot be dropped out rightly and all evidences are paged from pg. no. 37 to 39. The copy of the statement of Balkrishna Shinde, Pratap, Malkar, Prashant Balkirshna Chavan, Ramugrah Maurya, Baldev Singh is attached herewith which is evident that the sale of milk was executed thereby not retracting the statement but defining the statement more clearly, Sir we have never denied the sale of milk and made it clear to the concerned officer that sale or supply of milk is done in the early hours prior to the opening of the shop and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of sale of milk. Thus, the reasons given by the AO as well as CIT(A) for disturbing the book results is rejected and we hold that the assessee s books of accounts and book results are liable to be accepted. 15. Now, coming to the decision of the Tribunal for the AYs 2006-07 2007-08, we find that the Tribunal has decided the issue against the assessee, after observing and holding as under: 12. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. Admittedly, this is the case where the books pertaining to the production, issuance, consumption are not maintained by the assessee. Therefore, the finding of the CIT (A) on this issue is fair and does not call for any interference. Accordingly, ground no.3 is dismissed. 13. Ground no.4 relates to merits of addition of ₹ 12,15,244/- confirmed by the CIT (A) as per the estimations discussed above. We have already extracted the finding of the AO as well as the CIT (A) in the preceding paragraphs of this order. So far as, we have not only upheld the validity of the search assessment but also confirmed the act of rejection of books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of milk to the tune of ₹ 12,54,254/-. Here, in this year, there is no such material that assessee has failed to submit any details in support of sale of milk. On the contrary, the assessee had stated before the AO as well as CIT(A) that bulk sale have been made through account payee cheques and secondly, day-to-day sales have been recorded, were also produced before the AO. No specific defect or discrepancy has been highlighted by the AO nor any enquiry has been made. Further, we have also called for the records and books of account of the assessee to see the nature of entry and recording of transactions. Therefore, under such facts and circumstances prevailing in this year, the finding of the Tribunal in the earlier years will not apply in the impugned assessment year. Otherwise also, if the assessee s books of accounts were not found properly maintained in the earlier years then, it cannot be ipso facto presumed that the books of accounts are defective or not properly maintained in this year also. The principles of res judicata will not apply in such matters. Had it been so, then in assessee s own case, for the assessment years 2009-10 2010-11, the department has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh in hand held by each individual and the company, which aggregated to ₹ 32,72,780/-. The relevant extract of the letter is as under: C) As per your questioner regarding the cash of ₹ 8,34,000/- + ₹ 39500/- from Swaranjit Singh Bajaj found during the search as mentioned in your Annexure 2 B 1. Please note that the search was on the entire group/family hence we are providing you details as per the cash in hand held by each individual the company on the date of search i.e. 8/5/07 is as under: Jasvinder Singh Bajaj, the total cash in hand was ₹ 39058/- Swaranjit Singh Bajaj, the total cash in hand was ₹ 190460/- Bhupender kaur Bajaj, the total cash in hand was ₹ 268095/- Gurpreet kaur Bajaj, the total cash in hand was ₹ 246898/- Punjab Sind dairy products pvt ltd the total in hand was ₹ 2528269/- Hence the total cash in hand by the group is 32,72,780/- (thirty two lakhs seventy two thousand seven hundred eighty only) all the relevant details are enclosed in (page no. 47 to 51) which gives complete details regarding the cash in hand. On the date of search, cash found by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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