TMI Blog2021 (1) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record and the detail have been mentioned in the assessment order also and there is no statutory requirement under the law that copy of such approval or opportunity of hearing is to be given to the assessee. Accordingly, Ground no.2 as raised by the appellant is dismissed. Addition u/s 69C in respect of cash purchases of milk, namely Milk Tanki Purchases - appellant is stated to be one of the reputed manufacturers and exporters of milk and milk products - dispute is only with regard to purchases categorised as tanki purchases - As against the total milk purchases during the relevant year, the AO, has accepted all other purchases, except he has made addition qua Milk purchases Tanki payment which was made in cash by the appellant - CIT (A) has upheld the addition made by the appellant under section 69C holding that the appellant could not properly establish the bona fides of the purported purchases by either producing the suppliers with proper supporting evidences or establish the supply of milk in the manner as specified by the appellant during the course of scrutiny proceedings or even during search - alternate disallowance under section 40A(3) - HELD THAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities. We agree with the contention of Mr. Vohra that assessee could not have made admitted sale without having made the disputed purchases especially when sales quantity and value has been accepted, and therefore, we hold that the corresponding purchases cannot be disallowed. Lastly, if the Assessing Officer has not rejected the books of account or the trading result, then Assessing Officer cannot tinker with the gross profit by disallowing entire purchases. Accordingly, the addition made by the Assessing Officer and sustained by the CIT (A) is deleted. Alternate disallowance u/s.40A(3) - In terms of exception provided under clause (e) of Rule 6DD of the Income Tax Rules, if the assessee and producer of milk have agreed upon the arrangement that milk in a particular village would be collectively supplied to the assessee through mutually agreed person and assessee has agreed to make payment to the farmers for milk, then also no disallowance can be made even if the cash is in excess of ₹ 20,000/- .In terms of Rule 6DD and on the facts and circumstances of the case as discussed we hold that such a disallowance is outside the purview of Section 40A(3). Addition u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possession of the assessee during the course of search, then it is presumed to be belonging to such person only. Though this presumption is rebuttable but such a rebuttal has to be based on certain cogent evidences and explanation, which in our opinion has not been discharged by the assessee. Therefore, the addition is confirmed. Levying and computing interest under sections 234A, 234B and 234C - HELD THAT:- Here in this case, assessee was required to file the return u/s.153A within 15 day from the dated of notice, i.e., 26.05.2015, which assessee has filed on 11.01.2016. Therefore, interest has to be computed for the period of 8 months. As regard interest u/s 234C, the Assessing Officer has to verify the computation of interest u/s.234C which is to be computed on the basis of return of income. In so far as interest u/s.234B is concerned, same is consequential. Addition u/s 69C - certain expenditure incurred towards packing material was not accounted or recorded in the books of accounts - HELD THAT:- Once the quantity and value of the material returned is matching with the returned vouchers as shown from the paper book and the column of cash , then the explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n added by the Assessing Officer as unexplained expenditure.Accordingly, addition is confirmed. Un-reconciled balance between seized manual ledger account of parties and the books of account has been treated as unaccounted sales - HELD THAT:- Once the two entries are verifiable form party wise ledger account appearing in books of account; Ledger account of various bank accounts maintained by the assessee; and Bank statements showing receipts of sales made, then such a difference of ₹ 9,78,194/- which remained un-reconciled between balance as per seized ledger and ledgers as per books of account cannot be sustained. Even otherwise also the difference of ₹ 9,78,194/- is very meagre looking to the volume of transaction recorded in the books of account which is more than ₹ 20 crores and if simply balance of ₹ 9,78,194/- could not be un-reconciled it cannot be inferred that same are outside books of account. If so many entries are made in the manual ledger and then same are accounted for finally in the books of account then there could be possibility of some errors in corrections. In absence of any rejection of books of account and the ledger account such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) erred on facts and in law in upholding the aforesaid addition alleging that (i) the appellant failed to produce supporting evidences in the manner required by the assessing officer to justify tanki purchases; (ii) the appellant did not give the source of funds and cash withdrawals; (iii) payment in cash made by the appellant was not justified; (iv) the appellant could not produce many of the suppliers; and (v) supplier produced could not demonstrate the capacity to supply milk. 3.2 That on the facts and circumstances of the case, the CIT(A)/ assessing officer failed to appreciate (i) the modus operandi/ procurement process of milk of the appellant; (ii) that assessed/ accepted sale could not have been made by the appellant in absence of the disputed purchases. 3.3 That the CIT(A) erred on facts and in law in not appreciating that provisions of section 69C of the Act is not applicable on expenses duly recorded in the books of accounts and in respect of which source(s) was duly established. 3.4 That the CIT(A) erred on facts and in law in alternatively upholding disallowance to the extent of ₹ 7,06,864 (out of aforesaid sum) by applying provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, if any, is mechanical and thus, bad in law. The appellant in this regard relied on various decisions including Pr. CIT v. Sunrise Finlease P. Ltd. [2018] 252 Taxman 407 (Guj), Smt. Shreelekha Damani vs DCIT 173 TTJ 332 (Mum) - upheld by Bombay HC in ITA No 668 of 2016, Akil Gulamali Somji vs. ITO: ITA No.455 to 458/PN/2010 -confirmed by the Bombay High Court in ITA (L) No.1416 of 2012, Manohar Lal Jain v. State of Jharkhand Ors (2004) (3) JCR 362 (JHR HC), CIT v. Smt. Phoolmati Devi: 144 ITR 954 (All), M3M India Holdings vs DCIT: ITA No. 2691/Del/2018 (Del Trib.), and Rishabh Buildwell Pvt Ltd vs DCIT: ITA No. 2123/Del/2018 (Del Trib.). 7. The learned DR contended that the approval of JCIT was available on record, detail of which has been referred at end of the assessment order. He further stated that there is no specific requirement to provide the assessee with copy of such approval. The Ld. DR submitted that non-availability of the approval cannot be presumed and therefore, there is no merit in the ground raised by the appellant. 8. After considering the aforesaid submissions and on perusal of the assessment order and record, we find that it is an undisputed fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank account and the daily purchases are not substantial for a single farmer. The said purchase constitutes around 6% to 10% of annual milk purchases of the appellant and is under dispute in the present appeal; (b) Tanker purchases where under purchases are from various farmers/ traders in larger quantities, which purchases is not in dispute in the present appeal; (c) Milk purchased at collection Centres set-up at villages in and around Bulandshahr, which purchases is also not in dispute in the present appeal; (d) Purchases through Progressive Farmer Groups (PFG) whereunder groups have been formed by farmers for supply of milk to the appellant on their own account, which purchase is also not in dispute in the present appeal; and (e) lastly, Village purchases , which is also not in dispute in the present appeal. 10. Thus, the dispute is only with regard to purchases categorised as tanki purchases . As against the total milk purchases of ₹ 332.67 crores during the relevant year, the AO, has accepted all other purchases, except he has made addition qua Milk purchases Tanki payment which was made in cash by the appellant. Similar addition(s) were made by the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the request, only two persons namely, one Mr. Manveer Singh and one Mr. Shree Gopal is noted to have appeared, whose statement were recorded. As regards, Mr. Manvir Singh, it has been stated that he left in between when the statement was being recorded on 18.1.2019, but again appeared on 21.2.2019 on which date statement u/s 131 could be completed. Mr. Manvir Singh did not file various requisite documents such as proof of identity (except aadhar), books of accounts, detail of sales made to the appellant, copy of bank statements etc. before the AO. Further, Mr. Manvir Singh mentioned that he has been supplying around 200 litres of milk per day to the appellant from financial year 2007-08 onwards. Further, Mr. Shree Gopal, another farmer, in his statement recorded by the AO, it was observed that he also did not provide any detail of sales made to the appellant stating he did not remember the details off-hand. Based on the same, that only 2 out of 10 farmers have been produced by the appellant; and quantity of milk purchased from Mr. Manvir recorded in the books is substantially higher than the capacity admitted by him in the statement, the AO and Ld. CIT (A) held that milk tanki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of such expenditure is not explained satisfactorily. He contended that once an expenditure is recorded in the books of accounts, the source obviously stands established in as much as expenditure stands incurred out of funds in the books of accounts, whereas primary pre-condition for invoking section 69C that the expenditure incurred by the assessee is out of books of account, is not satisfied. In support he relied on the decision of Delhi High Court in case of CIT vs Radhika Creations: [2011] 10 taxmann.com 138, wherein it was held that once the expenditure was recorded in the books of accounts, the source was obviously explained not warranting any addition u/s 69C of the Act. Our attention was also invited to the decision of the Delhi Bench of the Tribunal in case of Manoj Sharma vs ITO: [2019] 103 taxmann.com 105 (SMC), wherein it has been held that if the source of purchases are from the books, then, such purchases cannot be treated as unaccounted/ unexplained. For the aforesaid proposition, the following decisions of the Tribunal were also relied on by the appellant: - ACIT vs Command Detective Securities Pvt. Ltd.: ITA No.4129/Del/2012(Del Trib.) - ACIT vs Blue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , CLR and SNF, sodium content, adulterants, etc. Such weighment/ quality slips have been placed at pages 83-98 of paper book. A purchase invoice is generated by the assessee at time of such purchase; Based on the weight and quality of milk brought by the farmers, payment is made to the said farmers, substantially in cash primarily owing to small amounts and absence of bank accounts of the farmers and preference of small farmers for cash. Further, on receipt of milk in the factory, an entry is made in the Milk purchase register kept at the gate of the factory. Sample copy was placed at page 83 of paper book. Lab testing of the milk is done by the assessee and reports are generated. Test reports were also placed at pages 99 to 112 of paper book. Subsequently, the milk is sent for processing and enters the production process. A separate production register is maintained to record inward and outward quantities. After processing, milk and other products are stored. Such stock is recorded in the stock register maintained by the assessee. Thereafter, the milk/ products are sold. Relevant sale register and invoices are maintained by the assessee. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s books, Mr. Vohra submitted that, enough documentary evidence were placed on record to justify the genuineness of purchases; producing of all the farmers/ persons was beyond the control of the assessee, specifically considering that the parties were undisputedly unrelated to the assessee. Further, nonappearance of parties cannot be the ground to draw adverse inference against the assessee [refer CIT v. Fancy International: 166 Taxman 183 (Delhi),CIT vs Nikunj Eximpt Enterprises P Ltd in ITA No.5604 of 2010 (Bom.), M/s Lalsons Jewellers Ltd. v. ACIT: ITA No.5726/Del./2010 (Del. Trib.)]; various other farmers appeared before the assessing officer during remand proceedings; however, their statements were not recorded by the assessing officer and in support thereof the appellant placed on record affidavit of such farmers at pages 127-155 of the paper book. 21. It was submitted that as regard allegation that Mr. Manvir Singh has admitted to have supplied average 6,000 litres per month of milk as against 45,000 litres of milk per month recorded by the appellant, the statement of Mr. Manvir Singh was not correctly appreciated inasmuch as the quantity of milk recorded was not the quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchases, duly recorded in the books of account, stock registers, etc., and treat the same as bogus without any cogent reasons. It was submitted that: (i) complete stock details were filed before the assessing officer as under- (a) Stock summary register, chart explaining manufacturing process, etc [69,75 of paper book]; and (b) Details of parties from whom purchases and sales made along with quantitative details of stock, yearly purchase and sales, input output ratio, etc. [page 70-72 of paper book]; (ii) the sales of milk and milk products as declared by the assessee stands accepted by the Revenue Department; (iii) both the quantity of milk/ products sold and the value of sale transactions have not doubted by the Revenue Department; (iv) stock of milk/ products, have been accepted by the assessing officer; (v) profit earned by the assessee on the entire sales and offered to tax stands accepted; (v) books of accounts and book results stand accepted; (vi) there is no allegation of any sales outside the books of account; (vii) that quantitative input output ratio declared by the assessee has been accepted without any disputed and no discrepancy has been pointed out by the assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vohra argued that even if the purchases are held to be bogus, then, addition could have, at worst, been made only to the extent of profit on the sales made against the said purchases the entire purchases cannot be disallowed (GP ratio is around 3% in the present case) [refer CIT vs. President Industries: 258 ITR 654 (Guj.), CIT v. Gurubachansingh J. Juneja: 302 ITR 63 (Guj.), PCIT vs. Ashokkumar C. Dharewa, HUF: TA No. 351 of 2017 (Guj.)]. 27. Lastly, it was submitted that similar purchases on account of milk tanki purchases have been accepted by the assessing officer in assessment years 2015-16 and AY 2016-17 in the assessment completed under section 143(3) of the Act and no addition has been made on account of milk tanki purchases being bogus [assessment orders have placed at pages 1 to 3 of Case Law paper book]. It was argued that there is no change in the modus operandi in the purchases/ business of the assessee company; and thus even on grounds of consistency, the issue deserves to be allowed in favour of the assessee company. 28. As regards alternate disallowance under section 40A(3) of the Act amounting to ₹ 45,30,989, it was argued by the Ld. Sr. Counsel that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenses are rightly disallowed. 30. We have heard the rival submissions, perused the relevant finding given in the impugned order as well as material referred to before us at the time of hearing. The addition of ₹ 23,03,77,859/- has been made in respect of cash purchase of milk shown under the head milk tanki purchases which has been added under the deeming provision of Section 69C, i.e., the assessee has incurred expenditure without any explanation about the source of such expenditure. The assessee is a manufacturer and exporter of milk and milk products and during the year it has declared purchases of ₹ 332.76 crores in the books of account. The entire purchases of milk have been shown under 5 categories, which have been elaborated in foregoing paragraph 9 above. Out of various heads of purchases of milk, the dispute is with regard to milk purchases under the head Tanki which has been purchased from the farmers of nearby villages, who come with their milk production to the appellant s factory and is delivered by one of the representative of the farmers on behalf of the group of farmers. The payments to these farmers for the purchases were mostly paid i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be understood and in that light explanation has to be seen as to why the cash payments for such purchases are inevitable. The modus operandi as has been highlighted in the foregoing paragraphs needs to be kept in mind. For purchase of such huge quantum of milk from large number of farmers and individuals, it is very difficult to make individual account of each and every farmer who comes from nearby villages with their milk production to the assessee s factories to sell their milk. It has been explained that one of the person amongst the farmers from the village collects all the milk and sends the same to the assessee s factory. The assessee keeps the record of such person/ farmer of each village and not of all individual farmers. Under these facts, the assessee makes a common entry of purchase in the books of account in order to avoid multiple of hundreds of ledgers. Apart from that, the assessee maintains other records like; when the milk is received at the factory gate, its weight/ quantity is taken and is then tested for quality; a quality slip is generated which contains the details of the milk including gross weight/ net weight, temperature, test, acidity contents, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee requires particular amount of quantity of milk for production of any milk products or for sale, then it would be very difficult to assume that assessee has not made any purchases or the source of purchases is outside the books of account. If such huge quantities of purchases are removed from the debit side of the trading account, then figures of production quantity will get affected. And if sales are not disputed, then it will disturb the entire trading result and will enhance the gross profit to much higher figure. Assessing Officer has nowhere rejected the trading result or the gross profit, which inter alia means that he accepts the quantity of stock, production and consequential sales and the closing stock. 34. The main charge of the Assessing Officer hinges upon the fact that the assessee has failed to produce the farmers, except for two, who also could not substantiate the capacity to sell the quantity of milk recorded in the books of account of the assessee. First of all, it is improbable that when assessee s purchasing milk from hundreds of farmers, to produce all of them or to get the purchases verified from each of them. Without going into the aspect, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her arguments of the ld. counsel that in the subsequent years and in the earlier years, similar purchases has not been doubted and the trading result have been accepted, though gives credence to the assessee s explanation but does not warrant any binding precedence, because in such matters same has to be seen on the facts of those years. 38. As regards the alternate disallowance u/s.40A(3) amounting to ₹ 45,30,989/- made by the ld. CIT(A), we find much substance in the arguments of the ld. Senior Counsel that, in terms of exception provided under clause (e) of Rule 6DD of the Income Tax Rules, if the assessee and producer of milk have agreed upon the arrangement that milk in a particular village would be collectively supplied to the assessee through mutually agreed person and assessee has agreed to make payment to the farmers for milk, then also no disallowance can be made even if the cash is in excess of ₹ 20,000/-. This contention of the Ld. Senior counsel is inconsonance with the decision of the Co-ordinate Bench in the case of Gamdiwala Dairy vs. ACIT (supra) which judgment has also been confirmed by the Hon ble Gujarat High Court. Thus, in terms of Rule 6DD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant impacting its income/ expenses. 42. The Ld. Sr. Counsel also argued that the assessing officer has failed to bring on record any corroborative evidence to support his conclusion with regard to the allegations made in the assessment order that these expenses are actually incurred and are unexplained. Reliance in this regard was placed on various decisions wherein it has been held that where addition has been made solely on the basis of certain vague scribbling/ noting made on loose papers and these loose papers were not in form of books of accounts or certificates which can prove conclusively that assessee has incurred unaccounted expenditure, such documents cannot be taken as sole basis for determination of unaccounted expenditure. Reliance was placed on CIT vs. Girish Chaudhary: 296 ITR 619 (Delhi), CIT vs. SM Aggarwal: 293 ITR 43 (Del), Ashwani Kumar Vs. ITO: 42 TTJ 644 (Del) and other decisions. 43. Mr. Vohra further submitted that the issue is squarely covered in favour of the appellant by order dated 19.11.2019 passed by the Delhi Bench of Tribunal in appellant s own case for preceding assessment years 2008-09 to 2012-13 in ITA No.3988 to 3992/Del/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y various employees which may have not been submitted to management for reimbursement or not approved or rejected by the company officials/ management and never paid. It is contended that the said contention is evident from the fact that the said vouchers are not signed by employees submitting the voucher, have no approval or acknowledgment and are not supported by any acknowledgement of receipt of payment there against. It was also argued that the assessing officer failed to bring on record any corroborative evidence to support his conclusion with regard to the allegations made in the assessment order that these expenses are unexplained and relied upon the legal position in the context of ground of appeal no.4 and requested for deletion of the addition made. 47. We have heard the rival submissions and also relevant finding given in the impugned order. The addition of ₹ 4,14,120/- has been made u/s.69 C on the ground that during the course of search, certain expenses were noted in the vouchers which were seized and were not recorded in the books of account. The case of the ld. counsel before us is that these are rough jottings and the amounts mentioned in the vouchers are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we agree with the contention of the ld. counsel as submitted above and direct the Assessing Officer to compute the interest u/s.234A, because the delay has to be accounted from the time allowed to file the return of income in response to notice u/s.153A. Here in this case, assessee was required to file the return u/s.153A within 15 day from the dated of notice, i.e., 26.05.2015, which assessee has filed on 11.01.2016. Therefore, interest has to be computed for the period of 8 months. As regard interest u/s 234C, the Assessing Officer has to verify the computation of interest u/s.234C which is to be computed on the basis of return of income. In so far as interest u/s.234B is concerned, same is consequential. 51. Accordingly, appeal for the earlier year 2013-14 is partly allowed. AY 2014-15- ITA No. 3994/Del/2019 (Assessee Appeal) 52. Now we take up the appeal for assessment year 2014-15 in ITA No.3994/Del/2019. The grounds of appeal for AY 2014-15 are reproduced here under: 1. That the Commissioner of Income-tax (Appeals) [ CIT(A) ] erred on facts and in law in not holding that the assessment completed vide order dated 26.12.2016 under section 143(3) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded in the books of the assessee. 5.1 That without prejudice, the CIT(A) erred on facts and in law in not appreciating that addition, if any, could have been made only to the extent of profit element included in the alleged undisclosed/ unaccounted sales. 6. That the CIT(A) erred on facts and in law in upholding the action of the assessing officer in making addition of (i) ₹ 35,72,166 and (ii) ₹ 65,14,988; alleging that the appellant failed to explain rough noting of alleged receipts and payments unearthed from dumb documents found during the course of search, that too without specifying any section or giving any cogent reason thereof. 7. That the CIT(A) erred on facts and in law in upholding addition of (i) ₹ 25,85,554 and (ii) ₹ 15,10,148; made by the assessing officer under section 69C of the Act on account of unexplained expenditure, alleging that the same were not recorded in the books of account. 8. That the CIT(A) erred on facts and in law in upholding the action of the assessing officer in making addition of ₹ 9,78,194 alleging the same to be unreconciled balance between the seized manual ledger account of parties and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dards/ specifications as prescribed by the assessee, then the same is purchased by the company. If the material does not meet the standard/ specifications requirement of the assessee, then the same is returned by the assessee to the concerned vendor. In Annexure A7 seized during the course of search, column of cash appearing in the loose sheet reflected material returned back by the assessee company to the concerned vendor. It was argued that the same is inadvertently mentioned as cash instead of material returned by the staff of the appellant. In this regard, the appellant submitted receipts of goods return vouchers (Good Return Note) issued by the appellant on return of goods to the appellant placed at pages 150-277 of paper book. 57. It was further argued that addition made by alleging that the cash payments have been made outside books by the appellant is not sustainable, because; (i) All the expenditure/ payments are duly recorded by the appellant in the books of account; (ii) Trading results declared by the assessee company which is in line with the industry standards have been accepted inasmuch as the method of accounts and the books of accounts prepared in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with several parties towards purchase of packing material wherein various details have been mentioned. The Assessing Officer has inferred that the amount shown in the column cash has been incurred outside the books of account. Before us, the ld. counsel has duly clarified that the packing material are purchased from various vendors for packing its product for sale. It is first tested by the assessee for its quality and specifications and then same are recorded in the books as purchases. If the packing material does not meet the required specifications, then the same is returned to the concerned vendors. What has been mentioned in Annexure A-7 in column of cash is in fact reflects the amount of material returned back by the assessee company to the vendor. In support, the assessee has submitted the receipt of goods and return vouchers issued by the assessee company on return of packing material, the details of which has been shown before us from the documents placed in the paper book at pages 150 to 277. 60. The packing material is direct cost and is part of the trading account. Once all the expenditure/payment have duly recorded in the books of account and trading result d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,410/- as unaccounted sales. The CIT(A) affirmed the addition made by the assessing officer on the ground that the appellant failed to offer any explanation except stating that only profit of such transactions should be added. 63. Before us, the Ld. Sr. Counsel submitted that the seized papers are merely rough noting of sales prepared by small depots in-charge which are part of total sale in the profit and loss account and that the said sale has already been offered to tax by the assessee. It was contended that, apart from the aforesaid rough noting, no evidence have been brought on record to substantiate that any sales was made outside the books of accounts. In support, he relied upon the decision of the Tribunal dated 19.11.2019 in appellant s own case for preceding assessment years 2008-09 to 2012-13 in ITA No.3988 to 3992/Del/2019, wherein it has been held that no addition could be made on the basis of notings/ jottings recorded on the loose sheet of paper, are dumb documents. It was alternatively submitted that since addition on account of GP ratio on difference in stock has already been made by the assessing officer (in groundno.3) no separate addition qua sales outside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items are given, which are in the nature of unauthenticated dumb documents/ papers having some scribbling, not having any financial implications. It was contended that the author of the document/ paper is not known or pointed out by the department nor does the appellant s name/ stamp / seal appear on the said receipts and payments accounts. It is argued that documents are not signed/ checked/ authorized by any employee or personnel of the appellant and there are no corroborative evidences to substantiate that the entries/ amounts mentioned in the said documents. In support, he again relied upon the decision of the Tribunal dated 19.11.2019 in appellant s own case for preceding assessment years 2008-09 to 2012-13 in ITA No.3988 to 3992/Del/2019 wherein it has been held that no addition could be made on the basis of notings/ jottings recorded on the loose sheet of paper, which are dumb documents. 68. The Ld. DR vehemently supported the orders of the lower authorities and contended that the AO has rightly made addition on based on specific seized annexures which cannot simply be regarded as unreliable/ dumb document. 69. We have heard the rival submissions and perused the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure A7 it was submitted that the said seized annexures are expense vouchers and journal vouchers. It was submitted that the expense vouchers relates to cash paid to various persons and the corresponding journal vouchers shows that cash was returned/ received back from the said parties, not resulting in any undisclosed income of the appellant. It is contended that the factum of such cash payment and received are recorded in the books of accounts of the appellant which is evident from the ledger accounts placed at pages 340 to 345 of the paper book. It was submitted that since amounts were accounted in books of account the provisions of section 69C of the IT Act were not applicable. Reliance was placed on the decision of Delhi High Court in case of CIT vs. Radhika Creations: 10 taxmann.com 138 and Mumbai Bench of Tribunal in the case of Parekh Corporation vs. ACIT: ITA No. 3293/Mum/2088 wherein it was held that if expenditure is recorded in the books of account, there cannot be any reason to invoke the provisions of section 69C of the IT Act. 73. The Ld. DR vehemently supported the orders of the lower authorities and contended that the AO has rightly made addition on based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s maintained day wise for the month of January and debit and credit entries are recorded by the assessee. The AO further observed that in majority of the cases, the debit and credit entries have been tabulated and the balance is written at the end of the pages. The AO noticed that the data contained in the seized annexure contains opening balance, sales made during the year, payments received from parties during the year and closing balance of the parties. After considering the submission of the Appellant, the AO noted that the balance as per ledger as appearing in seized annexure is tallying with the balance of the ledger account of the parties in the regular books of accounts of the assessee, however, after considering all the entries he noted that an amount of ₹ 9,78,194/- could not be reconciled and this amount is the difference between the balances as per seized ledger and as per books of accounts. Therefore, the said balance amount of ₹ 9,78,194/- is considered as unaccounted and out of books sales by the assessing officer. The CIT (A) affirmed the order of the AO. 78. Before us, the Ld. Sr. Counsel submitted that during assessment proceedings, appellant exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance as per seized ledger and ledgers as per books of account cannot be sustained. Even otherwise also the difference of ₹ 9,78,194/- is very meagre looking to the volume of transaction recorded in the books of account which is more than ₹ 20 crores and if simply balance of ₹ 9,78,194/- could not be un-reconciled it cannot be inferred that same are outside books of account. If so many entries are made in the manual ledger and then same are accounted for finally in the books of account then there could be possibility of some errors in corrections. In absence of any rejection of books of account and the ledger account such a petty amount of sales cannot be treated as outside the books. Thus, the addition is directed to be deleted. 81. In ground no.9, it is contended that interest under section 234C is required to be computed basis returned income whereas calculation made in the assessment order is erroneous. Further, interest under section 234B is stated to be consequential to the outcome of grounds raised in the present appeal. 82. On the issue of levy of interest, we hold that interest u/s.234C is to be computed on the basis of return of income and interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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