TaxTMI 
TaxTMI 
2018 (8) TMI 189
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.... in the assessment year 2011-12 are summarised as under: - Nature of Addition made by the AO 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Personal expenses 5,23,970 4,77,263 6,16,841 5,43,453 29,52,758 19,93,202 Bogus purchases made from Nitin Enterprises 27,15,435 40,77,004 2,19,48,700 89,49,347 2,52,67,172 2,11,70,553 Unexplained purchases made from Kiran Furniture 1,87,375 8,17,996 14,28,290 9,88,687 2,54,685 1,03,39,624 Disallowance u/s 40A (3) 5,00,973 2,55,101 12,05,538 - - - Unexplained Cash found - - - - - 6,68,483 Disallowance on account of Tour Travelling, repairs, depreciation on car etc. - - - - - 6,65,138 Sale of Scrap - - - - - 1,74,23,441 3. Whereas on merits the assessee has challenged in the appeal for assessment year 2011-12 following two additions: - i) Addition on account of scrap sales: Rs.1,16,15,628/- ii) Disallowance on account of low declaration of income: Rs. 11,84,425/- 4. The assessee in the revenue's appeal for the assessment year 2006-07, 2007-08 and 2008-09 has filed a petition under rule 27 of the Income Tax App....
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....al was found during the course of search so as to enable the AO to make the addition on the impugned issues in the assessment passed u/s 153A; and secondly, they have already been considered in the assessment completed earlier and had attained finality. This ground has been raised vide ground Nos. 1 & 2 before CIT(A) in all these years, which has been decided against the assessee in a very detailed manner, which for sake of ready reference is reproduced hereunder: - "6.1 From a plain reading of section 153A it is evident that it requires the Assessing Officer to assess or re-assess the total income of six assessment years immediately preceding the year of search. There has been lot of debate and judicial controversy regarding the nature of assessment or re-assessment proceedings to be undertaken u/s 153A. Legislature requires the Assessing Officer to assess or re-assess the total income of pending six assessment years. The words 'total income' has been used under clause 'b' of section 153A (1) as well as under first proviso to section 153A (1). 6.2 The assessment or re assessment proceedings to be undertaken u/s 153A may be classified as under: a. For the as....
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....ssessment made for the first time, all principles of assessment which are applicable to assessment under section 143(3) shall become applicable and in case if a re-assessment is being made, all the principles of re-assessment which are applicable in the case of proceedings under section 147/148 shall become applicable. 6.5 The provisions contained under section 153A are not comparable with the nature of provisions contained under chapter XIVB regarding block assessment proceedings. Concept of block assessment under chapter XIVB was altogether different. It was a special procedure of assessment for search cases to be made relating to only undisclosed income. There was then the concept of dual assessment proceedings. Normal assessment proceedings for other than undisclosed income used to be undertaken independently and simultaneously. Section 153A does not contain any such special procedure to assess undisclosed income found as result of search, rather pending normal assessment or reassessment proceedings are abated and, in a way, merged with the proceedings to be undertaken u/s 153A. Assessment proceedings pursuant to notice u/s 153A are not intended to be restricted to make asse....
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....re not intended to be restricted to make assessment of undisclosed income only detected as a result of search but normal assessment proceedings for other than undisclosed income can be undertaken independently and simultaneously. Delhi Bench of ITAT in the case of Shivnath Rai Harnarain (Indian) Ltd. v. Dy. CIT [2009] 117 ITO 74 wherein it has been held as under: "In view of our above analysis of the provisions of sections, the contentions of the learned counsel for the assessee have no force because there is no requirement for an assessment made under section 153A of the Act being based on any material seized in the course of search. Further, under the second proviso to section 153A pending assessment or reassessment proceedings in relation to any assessment year falling within the period of six assessment years referred to in section 153A(b) of the Act shall come to an end (abate), which means that the AO gets jurisdiction for six assessment years referred to in section 153A(b) of the act for making an assessment or reassessment." Further Delhi Bench of ITAT in the case of Ms. Shaym Lata Kaushik v. Asstt. CIT [2008] 114 ITD 305 has expressed the similar view- 'The co....
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....Appellate Tribunal Rules, 1963 provides that: "27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him." The aforesaid rule gives the liberty to the respondent to support the first appellate order on any of the ground decided against him, that is, the respondent can raise a defence upon the order filed by the appellant on any of the grounds which have been decided against him. The appellant before the first appellate authority may raise many arguments in an appeal to plead his case and if one of the lines is accepted and other is rejected, then in the second appeal filed by the respondent (of the first appeal and now the appellant), then the respondent has a right to defend that part which was adversely decided. Here the issue of scope of addition in terms of assessment completed u/s 153A has been decided against the assessee and therefore, as a respondent it can very well raise the defence in the appeal filed by the revenue that additions which have deleted on facts are also not sustainable in law. The only limitation which can be inferred is that it is not open to the respondent that it cannot claim....
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....ior to the date of search and such an assessment order cannot be said to be abated in terms of second proviso to section 153A. In so far as assessment year 2007-08 is concerned, the return income filed by the assessee had attained finality, because no notice u/s 143(2) has been issued as required within the stipulated time period which was 30.9.2008. Thus, it was submitted by the Ld. Counsel that for these three assessment years, assessments were unabated. He further pointed out it is an admitted fact that none of the additions made by the AO are based on any seized material or incriminating documents found in the course of search, which fact is not only evident from the assessment order but also not disputed by the Ld. CIT(A). The Ld. CIT (A) has decided this issue against the assessee on the ground that once notice u/s 153A is issued for any other six assessment years then AO has to make the assessment /reassessment afresh and there is no bar under these provisions that the additions only based on incriminating material can be made and in support he placed strong reliance on the judgment of Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar Bhatia (2012) 211 Taxmann 453 (....
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....ongly relied upon the order of Ld. CIT (A) and on judgment of Hon'ble Kerala High Court in the case of E.N. Gopakumar vs. CIT (2016) 75 taxmann.com 215 (Kerala), wherein the Hon'ble Kerala High Court has taken note of all the judgments of Hon'ble Delhi High Court. Besides this she also relied upon following judgments: - i. CIT Vs Raj Kumar Arora [2014] 52 taxmann.com 172 (Allahabad)/[2014] 367 ITR 517 (Allahabad) where Hon'ble Allahabad High Court held that Assessing Officer has power to reassess returns of assessee not only for undisclosed income found during search operation but also with regard to material available at time of original assessment. ii. CIT Vs Kesarwani Zarda Bhandar Sahson Alld. [ITA No. 270 of 2014] (Allahabad), where Hon'ble Allahabad High Court held that Assessing Officer has power to reassess returns of assessee not only for undisclosed income found during search operation but also with regard to material available at time of original assessment. iii. CIT Vs St. Francis Clay Decor Tiles (385 ITR 624), where Hon'ble Delhi Kerala Court held that notice issued under section 153A - return must be filed even if no incriminating documents discov....
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....ned finality and hence has to be reckoned as unabated assessment in terms of second proviso to section 153A. Now under the jurisdiction of Hon'ble Delhi High Court it is a well settled principle that in the case of assessments which have attained finality and are non-abated assessment, then no additions can be made over and above the original assessed income unless some incriminating material has been found during the course of search qua that assessment year. This proposition has been well discussed in the judgment of CIT vs. Kabul Chawla, wherein their Lordships have also discussed the judgment of Shri Anil Kumar Bhatia (supra). After considering the various judgments the Hon'ble High Court have summarised the decisions in the following manner: - "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under :- i. Once a search takes place under section 132 of the Act, notice under Section 153A (1) will have to be mandatory issued to the person searched requiring him to file returns for ii. Assessments and reassessments pending on the dat....
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....binding precedence for the reason that; firstly, most of the judgments are distinguishable; secondly, majority of the High Court judgments are in favour; and lastly, jurisdictional High Court in series of judgment has reiterated the same principle. Thus, in view of the settled proposition laid down by the Hon'ble Jurisdictional High Court which is applicable on the facts of the present case also, we hold that all the additions made by the AO in the assessment years 2006-07, 2007-08 and 2008-09 are beyond the scope of assessment u/s 153A, because assessments for these assessment years had attained finality before the date of search and no incriminating material or seized documents were found qua these additions. Accordingly, additions made by the AO are quashed on this ground. 16. Since we have already deleted the additions on the legal ground therefore the deletion of the addition made by the Ld. CIT(A) which has been raised in the revenue's appeal in ITA Nos. 4630/Del/2014, 4631/Del/2014 & 4632/Del/2014 have become academic and infructuous. Accordingly, the revenue's appeals are treated as dismissed. 17. Now we come to the appeal for the assessment year 2009-10, 2010-11 and 2011....
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....ring both the parties and on perusal of the relevant finding in the impugned order, we find that assessee has filed entire details of expenses alongwith the relevant vouchers and audited books of accounts and had also informed the mode and manner of payment of such expenses. The very nature of these expenses debited shows that they have been incurred during the normal course of business and without pointing out any specific defect in the nature of expenses or specifying that such expenses were either for non-business purpose or for personal use, no adhoc disallowance can be made or sustained, especially when entire books of accounts and vouchers have been produced for scrutiny before the AO. Thus, we do not find any infirmity in the order of the Ld. CIT (A) for deleting such an addition and same is affirmed and accordingly, the disallowance of business expenses is dismissed. Admittedly similar reasoning has been given by the AO for similar kind of expenses in the assessment year 2010-11 and 2011-12, therefore, our reasoning given above will apply mutatis mutandis for these two years also. Accordingly, the grounds raised by the revenue on this issue stand dismissed. 21. Other major....
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....amination. (d) The Ld. A.O. was unjustified in making disallowance of entire purchases made from such third party in absence of any evidence which could support that the purchases made were not genuine. (e) The Ld. A.O. was unjustified in making addition without rejecting the books of accounts. (f) The Ld. A.O. was unjustified in rejecting entire purchases and simultaneously accepting the liability on account of purchases made from M/s. Nitin Enterprises as genuine, acknowledged, confirmed liability and accepting cost of such purchases included in stocks. (g) The additions are contrary to settled position in favour of assessee by the judgment of Hon'ble High Court in the case of CIT v. Mahalaxmi Glass Works (P) Ltd., 318 ITR 116 (Bom) and also the judgment of Hon'ble Delhi High Court in the case of CIT v. Maha veer Aluminium Ltd, 297 ITR 77 , wherein, it has been held that if there is change in valuation of closing stock in one end, it must necessarily be a corresponding change at the other end, otherwise, the true profit would not be reflected. Hon'ble Delhi High Court in the case of Mahaveer Almn Ltd (supra) have held after considering the decision in the ....
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....ant from M/s Nitin Enterprises were found recorded in the stock register. Without pointing out to any discrepancy in the books of account maintained by the appellant, the Assessing Officer in an unreasonable and unjustified manner treated such purchases as bogus. There was no incriminating material found in the course of search operation u/s 132 pertaining to purchases made by the appellant. Without bringing any adverse material on record and without rejecting the books of account pointing to any discrepancy, making an addition by the Assessing Officer was unwarranted. 13.6 On perusal of the details under the head "sundry creditors", I find that M/s Nitin Enterprises appeared as a creditor in the books of the appellant. Therefore, to doubt the purchases made by the appellant on the basis of the statement of Sh. Nitin Bansal, partner of M/s Nitin Enterprises without considering the other evidence furnished by the appellant was not justified. From the details on record, it is seen that all purchases were supported by relevant bills and payments were made through banking channels as per the statements furnished. It is also a matter of record that M/s Nitin Enterprises filed a suit ....
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....nsel for the defendant has handed over two cheques in the total sum of Rs. 55,58,927/- [(i) Ch. No. 433650 dated 1.7.2012, drawn on YES Bank in the sum of Rs. 25,58927/- and [ii] Ch. No.433648 dated 1.06.2012, drawn on YES Bank in the sum of Rs. 30,00,000/-] to counsel for the plaintiff in Court today in full and final settlement of all the claims. 5. Learned counsel for the parties submit that in view of the settlement arrived at between the parties' present suit may be decreed in terms of Deed of Settlement dated 17.05.2012, marked as Exhibit C-1. 6. Heard counsel for the parties and also perused the application and the Deed of Settlement, marked as Exhibit C-1. The terms of settlement are lawful. Accordingly, present application is allowed. As prayed, suit stands decreed in terms of Deed of Settlement dated 17.05.2012, marked as Exhibit C-1, leaving the parties to bear their own costs. Let a decree sheet be drawn up accordingly. 7. Having regard to the fact that the parties have arrived at an amicable settlement before framing of issues, court fee shall be refunded to the plaintiff in terms of section 16A of the Court Fee Act, as prayed. 8. Application stands dispose....
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....gly relied upon the order of the AO and submitted that once the said party has been found to be providing bogus bills and the partner has categorically admitted that the firm was providing bogus bills to the assessee after receiving the cheque and returning the same in cash, then it cannot be held that such purchases are genuine. 25. On the other hand, Ld. Counsel submitted that assessee had filed plethora of evidences like; a) Copy of Legal Notice dated 11.3.2011 issued by M/s. Nitin Enterprises to the assessee for recovery of dues. b) Copy of Suit for Recovery of dues filed by M/s. Nitin Enterprises before Hon'ble Delhi High Court [CS(OS) 2055 of 2011]. c) Copy of Statement of Accounts (Ledger) and Reconciliation filed by M/s. Nitin Enterprises during Suit for Recovery before Hon'ble High Court, confirming the transactions and balance arising therefrom as recoverable on oath. d) Copy of Ledger Account of M/s. Nitin Enterprises in the books of the assessee and reconciliation of balances. e) Copy of Settlement Deed dated 17.05.2012 between the assessee and M/s. Nitin Enterprises and Settlement Order of Hon'ble Delhi High Court. It was pointed out that, AO e....
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....es; and v) settlement deed between the assessee and M/s. Nitin Enterprises whereby parties have settled the dues which got ratified by the settlement order of the Hon'ble Delhi High Court. All these evidences have neither been rebutted nor has any adverse view been given by the AO. Apart from that, there is a categorical finding that the statement of Shri Nitin Bansal recorded by the survey parties was behind the back of the assessee and the copy of the statement was neither provided nor was any opportunity given for cross examination. The assessee has made the payment to the party through banking channels and simply relying upon the statement of one of the partner that cash has been returned in lieu of cheque cannot be accepted without such a person being subjected to cross examination. Even otherwise also such a statement itself loses its credibility and evidentiary value, when the firm itself has taken a legal action for recovery of same dues from the assessee on the purchases made for which it has issued the bills. Not only that, there has been amicable settlement of dues and payment has been made by the assessee to the said party. In light of these evidences filed before Hon'b....
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.... M. Mestry, Proprietor, M/s. Kiran Furniture. (e) The mode of payments made. (f) Nature of services obtained, place where such service obtained and bills of services rendered raised by M/s. Kiran Furniture. (g) The Income tax returns of M/s. Kiran Furniture which duly reflected that the job charges received from the appellant were duly accounted for and income earned therefrom has been offered for taxation by the said party. (h) The TDS records in the form of TDS Certificates, as required by the provisions of Chapter XVII showing the nature of services obtained and TDS as required by law duly deducted and deposited by us to the credit of Central Govt. 28. Ld. CIT(A) after considering the facts and record has deleted the said addition after observing and holding as under :- "6. I have gone through the facts of this issue, written submissions made by the appellant, citations of the case laws relied upon by the appellant in support of its contentions, and considered them. I have also called for the assessment record and perused it. During the year under consideration, the appellant company obtained services from the said party i.e. Mls Kiran Furniture at the project sites w....
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....niture or that the same was not obtained by the appellant, or that the services obtained were not utilized for the business of the appellant. The Assessing Officer's action while making the impugned addition is contradictory to each other. On one hand, the entire job work charges paid were disallowed and on the other hand the Assessing Officer himself accepted the liability on account of services obtained from the party duly acknowledged and confirmed liability as a trade liability. Despite of the submissions made and evidences furnished notices issued u/s 133(6) which remained un-complied, does not tantamount to an adverse inference that could be drawn against the appellant as it was open to the Assessing Officer to conduct further investigations I enquiry by exercising the powers conferred upon him in the Income Tax Act, 1961 to issue a commission u/s 131 (1 )(d) to his counterpart in Mumbai to carry out a conclusive enquiry. The appellant furnished the details of its transactions with M/s Kiran Furniture before the Assessing Officer in the course of the assessment proceedings for proper scrutiny in the form of invoices, schedule 9 forming part of the financial statements, co....
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....d that M/s Kiran Furniture duly appeared in the list of sundry creditors of the appellant. Sh. Kishore Mahadeo Mestry, who is proprietor of M/s Kiran Furniture is being regularly assessed to income tax under PAN AGPPM57590 with the ITO Ward- 25(3)(2) Mumbai and his accounts were duly audited. The appellant company also appeared in the list of sundry debtors of M/s Kiran Furniture. The transactions with the appellant company were duly accounted for and disclosed in the return filed and income earned from the said transactions were duly offered for taxation by M/s Kiran Furniture. The appellant in his submissions relied on plethora of the case laws in support of its contentions. Considering all these facts I am of the view that there is substantial material on record to prove the existence of the party and the genuineness of the transactions. Without bringing any adverse material on record contrary to that furnished by the appellant, the Assessing Officer was not justified in considering only that piece of evidence that could probably be used against the appellant while ignoring the other corroborative evidence furnished by it. An assessment has to be made considering the entire mate....
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....d under the same search proceeding and Panchanama was also drawn in their names jointly. Nothing further was asked or queries were raised from the assessee and the search team being satisfied with the ownership of the Dollars released the same to the said foreign nationals instantly. However, during the impugned assessment proceeding, the Ld. A.O. asked the assessee to explain the source of these dollars. In reply, the assessee reiterated the fact as stated above and further submitted that confirmation from M/s. G.L. Litmus Events Pvt. Ltd. is awaiting and the same will be filed as soon as it is received. In spite of the above facts, the A.O. without calling for any further explanation or issuing any further notice or enquiring the matter from M/s. G.L. Litmus Events Pvt. Ltd., whose search assessment was also under his charge, made the addition of Rs. 6,68,483/- in the hands of the assessee as unexplained cash on the ground that the assessee failed to furnish a confirmation pertaining to the source of Dollars. 31. Before the Ld. CIT (A) assessee submitted that following documents in support of the claim that the dollar/cash found at the searched premises jointly owned by several ....
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....esented the undisclosed income. It is a matter of fact that the appellant's premises was also shared by M/s G. L. Litmus Events Pvt. Ltd. and that pursuant to the search a Panchnama was also drawn in the joint names of the appellant and M/s G. L. Litmus Events Pvt. Ltd. with the address at A-37, Sector 80, Phase-II, Noida (UP). It is also a matter of record that considering the fact that the amount pertained to the foreigners, namely Mr. Alexander Vidal, Mr. Herve Chu and Mr. Victor Besa, contracted by M/s G. L. Litmus Events Pvt. Ltd., the search party did not seize the dollars but released the said amount of Rs. 6,68,483/-. In the course of the assessment proceedings / post search proceedings the appellant furnished the following: (a) Copy of confirmation from M/s. CL Litmus Events Pvt. Ltd. confirming the facts that Mr. Alexender Vidal, Mr. Herve Chu and Mr. Victor Besa were persons contracted for the its project as well as that the foreign currency found during search belonged and returned to these contracted person. (b) Statement of floating advance accounts for the period 4.10.2010 to 31.10.2010 acknowledged by said foreign nationals. This is undoubtedly acknowledgm....
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....elf has categorical stated that the cash in the form of foreign currency belonged to M/s. GL Litmus Events Pvt. Ltd., and without any other material to hold that the foreign currency belong to the assessee AO has held to be undisclosed income of the assessee. Even the Panchnama also shows the joint name of assessee and M/s. G.L. Litmus Events Pvt. Ltd. and how this adverse inference has only been drawn by the assessee is not understood. The copy of confirmation from M/s. G.L. Litmus Events Pvt. Ltd. confirming the entire facts and other catena of documents which have been filed before the AO has neither been considered nor any has been rebutted by the AO. Accordingly, observation and finding of the Ld. CIT (A) based on facts and material on record that the foreign currency does not belong to the assessee but to M/s. G.L. Litmus Events Pvt. Ltd. cannot be disturbed and accordingly the order of Ld. CIT(A) affirmed. In the result the grounds raised by the revenue on this score is dismissed. 34. Coming to the issue of scrap sales which has been raised by the assessee as well as by the revenue in the assessment year 2009-10, the facts in brief are that the AO has made the addition of R....
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....red Rs. 20,00,000/- as unaccounted income from scrap sale from material supplied for CWG project. In the said connection it was explained by the Appellant that one Shri Rajendra Kumar Site Manager, was in charge and looking after the CWG site. After his death, a noting on loose sheet was recovered from his office desk wherein an amount of Rs. 16,78,340/- was found recorded as sale of scrap, without giving the details of the items sold, quantity and to whom sold. These facts were unknown to the appellant-company and he was doing so of his own. However, inspite of the fact that during the entire search not a single document was found suggesting suppression of income, the Appellant, considering the above unforeseen peculiar circumstances owing to the noting on loose sheet recovered from the office desk of the said site manager after his death, with a view to coming out clean to protect its goodwill, to buy peace of mind and to cover up any other shortfall besides the abovementioned income of Rs.l6,78,340/- arising from sale of scrap, offered a sum of Rs. 20 lakhs on account of scrap sale to tax in the Settlement Application filed before the Hon'ble Settlement Commission u/s.....
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....The scrap generated in the normal course of business has been sold in the respective years and duly accounted for in the books of account. (c) Most of the material for rental contract was of such nature that either it does not have any scrap value or otherwise the scrap value is negligible. That in these types of work, the company had to bear cost for breakage and removal of the installed material/scrap/garbage, which was much more than the negligible scrap value. Hence, in many occasions the materials were not removed and the local contractors were asked to remove the same and to keep the scrap as payment in lieu of the services provided for dismantling/removing the structures and cleaning the village site. (d) That in the interest of the business and in view of various cost involved in removing the structures etc. within a short span of time, shortage of godowns for storing those scrap etc., the company gave authority to its site supervisor/in charge to dispose of at the site itself at the maximum bargain price. (e) That the structures erected in the CWG village have more artistic value than the cost of the material used, which has no residual value after the work is ove....
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...., no other incriminating material pertaining to the scrap sale was recovered by the Investigating Wing of the department except that an amount of Rs. 16, 78,340/- was found recorded as sale of scrap, without giving the details of the items sold, quantity, and to whom sold. However, the appellant did not admit the receipt of such amount from the manager site in charge i. e. Sh. Rajinder Kumar even though such existence of transactions prove that there was a sale of scrap by the appellant. Therefore, this was the evidence in the possession of the Assessing Officer with regard to the scrap sale and which was found not recorded in the books of account of the appellant. in the course of the assessment proceedings, the appellant failed to provide the complete details of sale of scrap and admitted that was an unaccounted sale of scrap to the extent of the transactions found recorded on the loose sheet recovered from the desk of the manager site in charge. The fact that the appellant offered Rs. 20 lakhs as income on account of sale of scrap in an application filed before the Hon'ble Settlement Commission itself established beyond doubt that the appellant made sale of scrap out of its ....
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....ame. 134 Rental charges for pre- fabricated ceiling provided in CWG (Rs.25,38,077) PVC & AMF ceiling - This material has no scrap value 136 Rental charges for Tents (for providing cassette floor, ramps/cable ducts & stage at CWG (Rs.48,34,400) Tents are part of stock of assessee-company - brought back to its godown for reuse and reflected in stock as at 31.03.2011. 137 Rental charges for providing temporary walls & doors at CWG (Rs. 2,61,15,924) Company had stock of these materials for recycle and these items formed part of stock as at 31.03.2011. 138 Rental charges for providing miscellaneous on site material (Rs.41,43,540) Repair/renovation of doping centres toilets etc. - Nothing in the nature to be resold or scrap value. 177 Rental charges for providing signage, design, hoarding services at Delhi Airports. (Rs. 51,40,000) Furniture supplied at the Airport brought back after CWG and part of closing stock valued as per their balance useful life. Signages installed at Airports were not dismantled and hence not taken as stock or scrap. 178 Rental charges for providing Electrical & other equipments (Rs.75,20,586) a)Electrical Material supplied from own stock and t....
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....s. 20 lacs as income on account of scrap and material placed from CWG project before the settlement commission and the assessee has not provided any documentary evidences. Based on this fact, the AO has treated the entire details of services and material given on hire to M/s. G L Litmus Events P Ltd. and disallowed 50% of their value on the ground assessee has failed to provide details of purchase made for CWG and keeping in view the material and usage. He held that scrap value of these items cannot be less than 50% of the value. Ld. CIT (A) too has made value of scrap sold at 20% of the purchase value. Assessee who has awarded the execution of CWG had assigned M/s G.L. Litmus Events for the execution of CWG for the services and sales the said services also included rental charges of Rs. 5,80,78,138/-. The details of which have been incorporated above. During the course of survey a loose document was found in the office of Site Manager showing an amount of Rs. 16,78,340/- recorded sale of scrap without giving the details of item sold etc. Based on this material assessee has offered sum of Rs. 20 lacs on account of scrap sale before the Settlement Commission but its application befo....
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....n no addition should be made; secondly, if the stock taken on rent has been returned back then also no addition on account of alleged sale of scrap should be estimated; and lastly, the AO shall examine whether any part of the scrap which has been sold in the subsequent year has been accounted for or not. With this direction this matter is remanded back to the AO, who shall give proper opportunity of hearing to the assessee to substantiate its contention alongwith the documentary evidences. In the result grounds raised by the assessee as well as by the revenue on this score are treated as partly allowed for statistical purpose. 41. Lastly, in the assessee's appeal the other ground which has been raised relates to addition of Rs. 11,84,424/-. The facts qua the issue are that the assessee was awarded contract with DDA to provided installation of signage at different sites for Common Wealth Games. In its books of accounts for the impugned assessment year, (i.e., A. Y. 2011-12) the assessee company has booked an amount of Rs. 78,39,230/- as revenue from DDA, whereas the AO on the information obtained from DDA found that bill wise payment to the assessee were to the tune of Rs. 90,23,65....