AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1280
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.... Shruti Khandelwal, Advocate For the Revenue : Smt. Kusum Bansal, CIT, DR & Shri K. Mehboob Ali Khan, CIT DR ORDER PER BENCH: All these captioned appeals have been directed against the separate orders of the Ld. CIT(A) and pertained to the assessments carried out under Section 153A of the Income Tax Act, 1961 (hereinafter referred to as the "Act") pursuant to the search action carried out under Section 132 of the Act in Scott Edil Group of cases on 15.11.2017. Since the facts involved in all these captioned appeals are identical and there are common issues, hence the same were heard together and the same are being disposed of by this common order. 2. The grounds/issues raised in all the appeals are summarized as under : ITA No. 489/Chandi/2023 (Sanjeev Aggarwal, AY 2017-18) (Assessee's Appeal) 1. Ground No. 1 - General in nature. 2. Ground no. 2 - Deemed dividend on account of credits exceeding remuneration/payments received from SEPL. 3. Ground no. 3 - Deemed dividend on account of credits exceeding remuneration/payments received from SEARLE. 4. Ground no. 4 - approval u/s 153D 5. Ground no. 5 - transfer order u/s 127 ....
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...., Sector-21, Chandigarh. 6. Ground no. 6 - Addition u/s 69C r.w.s. 115BBE on account of difference in valuation of H.NO 3100, Sector-21, Chandigarh. 7. Ground No. 7 - Unexplained investment in jewellery. 8. Ground No. 8 - Approval u/s 153D. 9. Ground No. 9 - Reasonable opportunity of being heard not provided. ITA No. 591/Chandi/2023 (Maxport India Pvt Ltd, AY 2018-19) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law. 3. Ground No. 3 - Order deserves to be quashed in absence of incriminating material. 4. Ground No. 4 - Deemed dividend on account of credits exceeding remuneration/payments received from SEPL 5. Ground No. 5 - Approval u/s 153D. 6. Ground No. 6 - General in nature. ITA No. 579/Chandi/2023 (Maxport India Pvt Ltd, AY 2017-18)(Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Transfer order u/s 127 dated 30.03.2018 was without sanction of law, hence bad in law. 3. Ground No. 3 - Order deserves to be quashed in absenc....
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....ame as deemed dividend. 6. Ground No. 6 - Payment of Rs. 7,77,384/- by SEPL for construction of house and holding the same as deemed dividend. 7. Ground No. 7 - Difference in valuation as per DVO report and books of accounts. 8. Ground No. 8- Shortage of stock found during search. 9. Ground no. 9 - approval u/s 153D 10. Ground no. 10. - reasonable opportunity of being heard not given. 11. Ground no. 11 - general in nature. ITA No. 732/Chandi/2023 (Balram Krishan Aggarwal, AY 2017-18) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Transfer order u/s 127 dated 30.03.2018 was without sanction of law, hence bad in law. 3. Ground No. 3 - Order deserves to be quashed in absence of incriminating material. 4. Ground No. 4 - Payment by SEPL for construction of house and holding the same as deemed dividend. 5. Ground No. 5 Purchases treated as bogus purchase. 6. Ground No. 6 - Approval u/s 153D. 7. Ground No. 7 - Reasonable opportunity of being heard not given. 8. Ground No. 8- General in nature. ITA No. 730/Chandi/2023 (Balram Krish....
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....y Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law. 3. Ground No. 3 - Order deserves to be quashed in absence of incriminating material. 4. Ground No. 4 - Direction to Ld. AO u/s 150 to take appropriate action u/s 148. 5. Ground No. 5 - Approval u/s 153D. 6. Ground No. 6 - Reasonable opportunity of being heard not given. 7. Ground No. 7- General in nature. ITA No. 834/Chandi/2023 (Scott Edil Pharmacia Ltd, AY 2018-19) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Order deserves to be quashed in absence of incriminating material. 3. Ground No. 3 - Approval u/s 153D. 4. Ground No. 4 - Addition on ground of shortage of stock during search, hence GP rate applies on undisclosed sales. 5. Ground No. 5 - Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment. 6. Ground No. 6 - Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law. 7. Ground No. 7 - Reaso....
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.... from manufacturing activity. 7. Ground No. 7 and 8- Disallowance of 80IC claimed ion ITR. 8. Ground No. 9 - Enhancement u/s 251(1)- Dealt separately in ITA No. 833/Chandi/2023, SEPL for AY 2017-18. 9. Ground No. 10 and 11 - Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment. 10. Ground No. 12- Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law. 11. Ground No. 13- Reasonable opportunity of being heard not given. 12. Ground No. 14 - General in nature. ITA No. 830/Chandi/2023 (Scoot Edil Pharmacia Ltd, AY 2014-15) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Order deserves to be quashed in absence of incriminating material. 3. Ground No. 3 - Approval u/s 153D. 4. Ground No. 4 - Addition made u/s 69C due to non-response by parties confirming the purchases made. 5. Ground No. 5 - Disallowance of 80IC on sales made to Maxport. 6. Ground No. 6 and 7 - Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment. ....
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....No. 1 - General in nature. 2. Ground No. 2 - Order deserves to be quashed in absence of incriminating material. 3. Ground No. 3 - Approval u/s 153D. 4. Ground No. 4 - Difference in valuation as per DVO report and books of accounts. 5. Ground No. 5- Addition u/s 68. 6. Ground No. 6 - Addition u/s 68 on account of receipts from employees of B.M. Pharmaceuticals. 7. Ground No. 7 and 8 - Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment. 8. Ground No. 9 - Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law 9. Ground No. 10- Reasonable opportunity of being heard not given. 10. Ground No. 11 - General in nature ITA No. 844/Chandi/2023 (Scott Edil Advanced Research Laboratories and Education Ltd, AY 2013-14) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Order deserves to be quashed in absence of incriminating material. 3. Ground No. 3 - Approval u/s 153D. 4. Ground No. 4 - Difference in valuation as per DVO report and books of accounts. 5. Ground....
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.... No. 10- Reasonable opportunity of being heard not given. 10. Ground No. 12 - General in nature. ITA No. 857/Chandi/2023 (Scoot Edil Advanced Research Laboratories and Education Ltd, AY 2016-17) (Appeal by Assessee) 1. Ground No. 1 - General in nature. 2. Ground No. 2 - Order deserves to be quashed in absence of incriminating material. 3. Ground No. 3 - Approval u/s 153D. 4. Ground No. 4 - Difference in valuation as per DVO report and books of accounts. 5. Ground No. 5- Addition made u/s 69C due to non-response by parties confirming the purchases made. 6. Ground No. 6 - Disallowance of 80IC on sales made to Maxport. 7. Ground No. 7 - Enhancement u/s 251(1)- Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment 8. Ground No. 8 - Direction to Ld. AO u/s 150 to take appropriate action u/s 148. 9. Ground No. 9 and 10 - Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment. 10. Ground No. 11 - Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law ....
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....tted by DVO. 2. Ground No. 6 - General in nature. 3. A perusal of the above grounds of appeal would reveal that the following common issues are involved in theses appeals: Issue 1: No incriminating Material found during the course of search action. Issue 2: Deemed dividend on account of credits exceeding remuneration/payments received from M/s SEPL. Issue 3: Difference in valuation of factory building in Village Dasora, Majra Hiltop, Near Venus Remedies, JharmBaddi as per DVO's report and as books of the appellant. Issue 4: Enhancement u/s 251(1) regarding alleged understatement of investment in property at 28/6, Industrial Area, Phase-2, Chandigarh. Issue 5 : Directions by CIT(A) to AO to initiate 147/148 proceedings taking shelter of s. 150(1)(2) for AY 2010-11 and 2012-13. Issue 6: Shortage of stock found during search held as undisclosed sale. Issue 7: Commission/profit earned at estimated rate of 1% of total alleged sales and purchases, allegedly conducted outside books. Issue 8: Addition made by Ld. AO of Rs. 58,09,346/- by disallowing deduction u/s 80IC on account of GP on net sales ....
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.... 7 Scott Edil Advance Research Laboratories and Education Limited 2015-16 Assessee 856/Chandi/2023 8 Scott Edil Advance Research Laboratories and Education Limited 2016-17 Assessee 857/Chandi/2023 9 Scott Edil Pharmacia Limited 2013-14 Assessee 829/Chandi/2023 10 Scott Edil Pharmacia Limited 2014-15 Assessee 830/Chandi/2023 11 Scott Edil Pharmacia Limited 2015-16 Assessee 831/Chandi/2023 12 Scott Edil Pharmacia Limited 2016-17 Assessee 832/Chandi/2023 13 Balram Krishan Aggarwal 2015-17 Assessee 729/Chandi/2023 14 Balram Krishan Aggarwal 2016-17 Assessee 730/Chandi/20203 Assessee's appeal in ITA No. 829/Chandi/2023 is taken as the lead case for the purpose of narration of facts. The assessee in this appeal has taken the following ground on this issue: Ground No. 2: That on facts, circumstances and legal position of the case, the impugned assessment order passed by Ld AO acquiring jurisdiction u/s 153A even when the ld. AO had wrongly assumed jurisdiction u/s 153A and more-so when no incriminating material was found from assessee's own search operation u....
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....mpany at present or past also. Also in past/present I was not a shareholder in any company. It is also stated that I am not a partner in any of the concerned and I am not involve in any of the business. I am just a employee working in the company M/s Scott Edil Pharmacia Ltd. I did not participate in any of the meetings or conferences in any of the company." 9. A perusal of the above statement of Mrs. Pooja Pandita would show that she has simply denied of having any knowledge about the affairs of the company. She has stated that she was just an employee of the company. The department has strongly relied upon the said part of the statement of Mrs. Puja Pandita, director of the group company. The Ld. DR, however, could not point out as to how the said statement of Mrs. Puja Pandita, would constitute incriminating material for making the impugned additions. There is no admission in whatsoever manner by said Mrs. Puja Pandita that the assessee was indulged in any bogus sale transaction as alleged by the department. Moreover, the said statement also stood retracted by Mrs. Puja Pandita. Moreover, the said statement cannot be used in case of group entities of the assessee company as e....
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....d without looking into books of account and without understanding law and that he had been compelled and perturbed by events of search and that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon'ble Delhi High Court, after considering the fact and circumstances of the case, while dismissing the appeal of the revenue, observed that though the fact that the assessee may have retracted his statement belatedly, yet, it did not relieve the AO from examining the explanation offered by the assessee with reference to the books of account produced before him. It has been held that a retracted statement even under section 132(4) of the Act would require some corroborative material for the Assessing Officer to proceed to make additions on the basis of such statement. 12. In the case of "Basant Bansal vs. ACIT" reported in (2015)63 taxmann.com 199 (Jaipur Trib.), having somewhat similar facts, the assessee therein, during the search and seizure action u/s 132 of the Act, offered a summary discloser of income as undis....
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....To The Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. Sir, Subject: Confession of additional Income during the course of search & seizure and survey operation - regarding Instances have come to the notice of the Board where assessee's have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessee's while filing returns of income. In these circumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. ....
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....s Act." 16. It may be pointed be pointed out here that section 132 of the Act is a comprehensive provision. The exercise of power under the search and seizure provision, having serious consequences on the searched person, requires caution and strict compliance. As per the provisions of section 132(4), the authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any such statement recorded of him may be used in evidence in any proceeding under the Act. Hence, as per the provisions of section 132(4), for subjecting a person to examination, such person must be found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing. Admittedly, Mrs. Pooja Pandita was neither found in possession or control of any books of accounts nor of any of the assets/ items as mentioned U/s 132(4). Therefore, the search party was neither supposed to record her statement, nor any reliance can be placed on ay such statement is beyond the authority given und....
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.... accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken." 8.5.2. This position has been reiterated by Hon'ble Delhi High Court in the case of "Pr. CIT Vs. Best Infrastructure(India) Pvt. Ltd.", 397 ITR 182 (Delhi.), by observing in para 38 of the said order that statements recorded under Section 132(4) of the Act of the Act do not by themselves constitute incriminating material as has been expla....
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....date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person" 19. A perusal of the above provisions would reveal that section 153C starts with a non-obstante clause which covers the provisions of section 139, 147, 148, 149, 151 and 153 of the Income Tax Act. The purpose of the said non-obstante clause is that in case of a conflict between the provisions of section 153C and the other sections as mentioned above, the special provisions of section 153C will prevail over the other general provisions of the Act. Even otherwise, it is settled law that when a special law/provision is enacted, that will prevail over the general provisions of the law/statute. As per the special provisions u/s 153C of the Act, in case of any incriminating material is found during the course of a search action which is relating to a person other than the searched person, then the procedure as laid down u/s 153C of the Act is to....
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.... 2. Sanjeev Kumar Aggarwal 2017-18 Assessee 489/Chandi/2023 2 3. Sanjeev Kumar Aggarwal 2017-18 Department 505/Chandi/2023 1 4. Sanjeev Kumar Aggarwal 2018-19 Department 506/Chandi/2023 1 5. Vaishali Aggarwal 2017-18 Assessee 482/Chandi/2023 2 6. Vaishali Aggarwal 2018-19 Assessee 483/Chandi/2023 3 7. Balram Krishan Aggarwal 2017-18 Assessee 731/Chandi/2023 4 8. Balram Krishan Aggarwal 2018-19 Assessee 732/Chandi/2023 4 9. Balram Krishan Aggarwal 2012-13 Assessee 726/Chandi/2023 4 10. Balram Krishan Aggarwal 2013-14 Assessee 727/Chandi/2023 4 11. Balram Krishan Aggarwal 2014-15 Assessee 728/Chandi/2023 4 22. At the request of the parties, the lead case, for the purpose of narration of facts is taken up in the case of Sanjeev Kumar Aggarwal for AY 2018-19 bearing ITA No. 480/Chandi/2023. The assessee has raised the issue of deemed dividend vide Ground No. 3 in the said appeal, which for the sake of ready reference is reproduced as under: "Ground No.3: That on facts, circumstances and legal posit....
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....ee preferred appeal before the CIT(A). 26. In appeal before the CIT(A), the assessee reiterated the submissions as were made before the Assessing Officer. The Assessee further contended that the ld. Assessing Officer had considered only the credit entries but totally ignored the substantial payments made by assessee to SEPL. The submissions of the assessee have been reproduced by the ld. CIT(A) from page 102 to page 132 of the impugned order. 27. The Ld. CIT(A), after considering the submissions of the assessee, however, observed that there was nothing on record to substantiate that such transactions between the assessee and M/s SEPL were in the nature of business transactions. He further observed that there was nothing on record to substantiate that M/s SEPL was under obligation to extend such loans to the assessee against furnishing of personal guarantee. He observed that that such transaction have not been carried out during the ordinary course of business operations for business expediency between the assessee and M/s SEPL. He concluded that in this case all the conditions of Section 2(22)(e) were satisfied and that the case of the assessee was not covered by any of the e....
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....funds as per his requirements. There is nothing on record to substantiate that M/s SEPL was under obligation to extend such loans to the appellant against furnishing of personal guarantee. Therefore on such facts ratio of Hon'ble Calcutta High Court in the case of Pardeep Kumar Malhotra vs CIT (supra) is not applicable to facts of the present case. The very nature of the ledger account of the appellant in the books of M/s SEPL/SEARLE demonstrates that such transactions have not been carried out in specific urgent circumstances. M/s SEPL/SEARLE has given the above loans to the appellant as a routine/ regular feature. Such transactions are in the nature of current account. Such transaction have not been carried out during the ordinary course of business operations for business expediency between the appellant and M/s SEPL. From the nature of transactions carried out by the appellant with M/s SEPL/SEARLE, it is evident that such transaction are in the nature of extending loans to each other on various dates. Therefore it is held that the AO was justified in bringing such transactions under the ambit of section 2(22)(e) of the Act as all the remaining conditions (beneficial share h....
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....(e). The Ld. AR of the assessee has further contended that these were not gratuitous advances, but a reflection of ongoing business transactions, thus falling outside the scope of deemed dividends as per the statutory provision. Reliance has been placed on following case laws : i). DCIT vs Futurz Next Services Ltd. (Del Trib) (ITA No. 3556/Del/2016) dated 04.01.2022 ii). Bombay Oil Industries Ltd. Vs. DCIT (2009) 28 SOT 383 (Bom) iii). "Exotica Housing & Infrastructure Company Pvt. Ltd. vs. ITO., 82 ITR 0046, (Delhi ITAT), 31. The Ld. Counsel for the assessee has further contended that the assessee provided personal guarantees to SEPL in order to secure credit facilities from banks which included a fund-based limit of Rs. 42.85 crore and a non-fund-based limit of Rs. 15 crores. Copy of record of sanction letters of loans raised by SEPL have been placed at page 96-106 of the Paper Book, the relevant part of the same is reproduced below:   32. The ld. Counsel of the assessee has further demonstrated that the value of properties and personal guarantees given by the assessee were more than the entire value of the loans. The guarantee given by the a....
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....f the assesse u/s 2(22)(e) should not be considered again while calculating peak for subsequent periods otherwise the same would lead to double addition of the same entry in the hands of the assessee. 36. The ld. DR, however, has placed reliance on the orders of the lower authorities and submitted that all the conditions enumerated in Section 2(22)(e) of the Act have been fulfilled i.e. (a) The company is closely held, (b) The shareholder holds a substantial interest in the company, (c) The payment is made out of accumulated profits, and (d) The company is not engaged in the business of money lending. She, therefore, has submitted that both the lower authorities were justified in treating the amount received by the assessee as deemed dividend in the hands of the assessee. She has further contended that the Ld. CIT(A) was not justified in directing the AO to add only the peak credits of the year instead of the entire advances received by the assessee from the SEPL. 37. We have heard the rival contentions and gone through the record. There is no denial of fact that the transactions between the assessee group company SEPL were like that of a current and running account. It is no....
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....o apply provisions of Section 2(22)(e)-When current account is maintained between parties, provisions of Section 2(22)(e) would not apply-Thus, issue is covered by aforesaid decisions of Tribunal in favour of assessee as well as various decisions considered by jurisdictional Delhi High Court-Assessee's appeal allowed." 38. Even the Ld. Counsel for the assessee has demonstrated that the assessee had mortgaged substantial personal properties and provided personal guarantees to enable SEPL to obtain credit facilities from banks which included a fund-based limit of Rs. 12.85 crore and a non-fund-based limit of Rs. 15 crore. The transactions between assessee and SEPL were mutually beneficial. The Ld. Counsel in this respect has referred to sanction letters of loans raised by SEPL which are placed from page 96-106 of Additional Paper Book. It is proved on the file that the advances were not gratuitous. The Ld. Counsel has further demonstrated from the ledger of the assessee in the books of SEPL that there were both type of transactions i.e. the assessee had not only taken the advances but has also given the advances. Both the assessee and SEPL would give and take advances as per their....
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....eeming fiction would not be given a wider meaning than hat it purports to do. The provisions would necessarily be accorded strict interpretation and the ambit of the fiction would not be pressed beyond its true limits. The requisite condition for invoking Section 2(22)(e) of the Act is that payment must be by way of loan or advances. Since there is a clear distinction between the inter-corporate deposits viza-vz loans/advances, according to us the authorities below were not right in treating the same as deemed dividend u/. 2(22)(e) of the Act" [emphasis supplied] Similarly, we also support and guidance from the judgment of Hon'ble jurisdictional High Court in the case of Pradip Kumar Malhotra v. CIT 338 ITR 538 (Cal) wherein the Hon'ble High Court held as under:- "The phrase "by way of advance or loan" appearing in sub-clause (e) of section 2(22) of the Income-tax Act, 1961, must be construed to mean those advances or loans which a shareholder enjoys simply on account of being a person who is the beneficial owner of share (not being share entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than t....
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.... identical in all the appeal given in the chart above, hence, in view of the discussion made above, the addition on account of deemed dividend u/s 2(22)(e) in all the 11 appeals as mentioned in the chart above is ordered to be deleted. These grounds taken by the assessee stand allowed, whereas the grounds taken by the Revenue on the issue of deemed dividend stand dismissed. Issue 3: Difference in valuation of building/Immovable Property situated at Village Dasora, Majra Hiltop, Near Venus Remedies, Jharmajri, Baddi: 41. Following is the list of cases involving this issue : Sr. No. Name of the assessee AY Appeal by Appeal No. Ground No. AO Order CIT Order 1 Scott Edil Advance Research Laboratories and Education Limited 201718 Assessee 845/Chandi/2023 4 Page 2-7 Para 7.4-7.5 Page 105- 111 Para 12.7 2 Scott Edil Advance Research Laboratories and Education Limited 201819 Assessee 846/Chandi/2023 4 Page 2-7 Para 7.4-7.5 Page 85-91 Para 10.6 3 Sanjeev Kumar Aggarwal 201819 Assessee 480/Chandi/2023 6 Page 14-15 Para 11.2 Page 206- 208 Para 13.5 4 Vaishali Aggarwal 201819 Asses....
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....ssee show-causing it as to why the difference of the valuation may not be added to the income of the assessee, to which the assessee responded disputing the DVO's valuation and submitted an independent valuation report from M/s Sharma & Associates, a registered valuer, empanelled with the Income Tax Department, valuing the property at Rs. 46.07 crores. The assessee also provided an analysis highlighting computational errors in the DVO's valuation methodology. The ld. AO, however, rejected the contentions raised by the assessee holding that DVO was an independent authority and that there was no reason to consider valuation report of registered valuer over DVO's report. The AO, based on the DVO's report, made addition of the differential amount under Section 69C read with Section 115BBE of the Act. Assessing Officer made identical addition in every year being the difference reported by the Ld. DVO. Being aggrieved by the said order of the AO on this issue, the assessee preferred appeal before the Ld. CIT(A). 44. In appeal before the Ld. CIT(A), the assessee contended that the valuation report of the DVO was based on assumptions and estimations, ignoring actual records of expenses ....
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.... the Ld. AR on the above issue, it is found that there is merit in the argument that PWD rates should have been adopted for the purpose of valuation by the DVO. However, the appellant has not provided any material to show that the revised valuation made by the DVO was higher than the valuation on the basis of PWD rates. Therefore no merit is found in such submission of the appellant. Such income is not eligible for deduction u/s 80IC of the Act as the same has not been derived from the eligible business. Further the DVO has allowed rebate on account of self supervision/ self procurement of the material after going through relevant record. The appellant has furnished copy of construction account wherein various expenditure for labour, material, steel, electrical items etc have been clearly demarcated. From the same it is evident that no contractor was engaged by the appellant for the purpose of construction of the said building. The AO has not brought on record any material to show that construction was not done through self supervision/ self procurement of the material. The DVO only after being satisfied on this account and as per the relevant guidelines has allowed rebate for this....
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....criminating material regarding the same was found during the course of search action. That even the said books have neither been doubted nor rejected by AO or the Ld. CIT(A). The ld. Counsel for the assessee contended that the construction on the said property was carried out primarily during FYs 2009-10 to 2011-12, though some activity was done almost every year. That the expenses incurred on the subject property were duly recorded in the books. That the expenditure incurred on the construction in the books of accounts was at Rs. 44. 51 cr. However, as per the valuation report from the independent registered valuer namely M/s Sharma & Associates, was at Rs. 46.07cr, which was only 3.5% more than the value recorded in books. He, therefore has submitted that under the circumstances, no addition was warranted in this case due to such a small difference. The Ld. counsel for the assessee further contended that while making valuation of the property, DVO made certain mistakes which included calculation on CPWD rates rather than State PWD rates, which were lesser than the CPWD rates. It has been contended that thought the Ld. CIT(A) agreed with the view that State PWD rates should be use....
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....income invested in alleged construction. 52. The Ld. CIT (DR), on the other hand, has contended that the ld. AO was justified in making the impugned addition on the basis of valuation report of the DVO on account of difference calculated proportionately, based on the expenses incurred by the assessee over different years. She has placed reliance on the orders of ld. AO and ld. CIT(A) and stated the assessee's reliance on an alternate valuation report by M/s Sharma and Associates, was not tenable as the DVO was an independent authority, and the valuation was conducted on a reference made by the Investigation Wing u/s 132(9D), ensuring credibility and impartiality. She has further contended that assessee's claim that the estimates made by DVO were without any evidence was not correct. That the DVO used available data and professional expertise to determine the construction cost. The ld. DR rebutting the contentions of the Ld. AR of the assessee regarding books being not rejected and even no defect pointed out by any of the authorities in the same, has submitted that that the books of accounts alone cannot conclusively determine the correctness of declared expenses, especia....
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....n'ble Supreme Court in Sargam Cinema v. CIT (328 ITR 513) has held that a DVO's report cannot be relied upon unless the books of accounts are found to be incorrect. The Income Tax Act does not mandate blind reliance on a DVO's report unless corroborated by substantive proof of undisclosed investment. Valuation reports are opinion-based and susceptible to variations due to differing methodologies, assumptions, and regional price fluctuations. The reliance in this respect can be placed on the following decisions: "(i) [Assistant Commissioner of Income Tax, Central Circle-1(3), Kolkata v. Narula Educational Trust [2021] 126 taxmann.com 158 (Kolkata - Trib.) (ii) Champaklal S. Kasat v. Deputy Commissioner of Income-tax, Cent. Cir. 1(3), Ahmedabad [2017] 82 taxmann.com 243 (Ahmedabad - Trib.) (iii) Kay Jay Projects Pvt. Ltd. Versus Dcit, Central Circle, Noida 2023 (8) Tmi 431: Assessment u/s 153A - Addition towards the cost of construction of the building - Reference made to ld. DVO u/s 142A - HELD THAT:- Admittedly, no incriminating material has been found during the course of search qua this addition towards cost of construction. This fact is evident from th....
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....n by the Tribunal as no material was found in the search and seizure operations, which would justify the A0's action in referring the matter to the DVO for his opinion on valuation of the said properties. If that be the case, then the valuation arrived at by the DVO would be of no consequence. In any event, the Tribunal has also, on facts, held that the DVO's valuation was based on incomparable sales, which is not permissible in law - in favour of assessee. [Para 5] (vi) Smt. Jatinder Kaur, Smt. Harbhajan Kaur Versus The Dcit Cc-1, Ludhiana2021 (10) Tmi 1150 - Itat Chandigarh Assessment u/s 153A - Undisclosed investment in the residential buildup house - difference in values as declared by the assessee and as opined by the DVO, - Whether no incriminating evidence was found during the course of search relating to the part additions as confirmed by the Worthy CIT(A)? - Tribunal in the second appeal reversed the findings of the Ld. CIT(A) and deleted the addition holding that since no material was found during the search to justify the reference to the DVO, the action was not in accordance with law - HELD THAT:- As in the present case, the authorities below h....
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....eport of the DVO. It has been settled that in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO. See K.P. Varghese vs. ITO, Ernakulam&Anr. [1981 (9) TMI 1-SUPREME Court],C.I.T. vs. Abhinav Kumar Mittal [2013 (1) TMI 629 - DELHI HIGH COURT], C.I.T. Vs. Mahesh Kumar [2010 (8) TMI 64 - DELHI HIGH COURT]. Thus in the absence of any evidence that the assessee has invested more than value declared in the registered sale deed of property purchased, the addition in this regard on the basis of Valuation Report by the DVO is not sustainable. [Para 50] (ix) 2015 (3) TMI 156 - DELHI HIGH COURTCOMMISSIONER OF INCOME TAX VERSUS NISHI MEHRA, ARUN MEHRA, SUSHIL MEHRA, SUBHASH MEHRA, SURBHI MEHRA, MANJU MEHRA Scope, power and jurisdiction of AO in block assessment proceedings and the term "undisclosed income - AO concluded a comparison between declared value and the value determined by the DVO disclosed serious discrepancy and added the difference and brought them to tax in the block assessment orders - ITAT concluded that the A0 could not have brought to tax the amounts that he ultimately did....
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....o file return of undisclosed income for block period 1-4-1989 to 28-1-2000 - Thereafter, valuation of cost of construction of buildings constructed by assessee-firm was referred to DVO, for valuation under section 133(6) - Assessing Officer added difference in valuation of cost of construction adopted by assessee-firm and DVO as undisclosed income - Whether since no material was found during search to indicate that assessee had not recorded expenses incurred on construction in books of account, in absence of any seized materials and solely on basis of DVO's report addition of undisclosed income under section 158BB could not be made - Held, yes [Para 10] [In favour of assessee] 11.1 It has further been held by Hon'ble Delhi High Court and Hon'ble Gujarat High Court that report of the DVO is not binding and no addition can be made in the basis of the standalone valuation report." 55. As noted above, it has been held time and again by various courts of law that the DVO's report on standalone basis without any corroborating material cannot be construed as incriminating material and hence the additions solely on the basis of the DVO's report are not sustainable. ....
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....t of the DVO the revenue had to prove that the assessee had received extra consideration over and above the declared value of the same. That question was answered by this Court in favour of the assessee and against the revenue. The Division Bench in the case of Puneet Sabharwal (supra) had also placed reliance on the decision of Supreme Court in K. P. Varghese (supra) as also on another decision of a Division Bench of this Court in CIT v. Smt. Suraj Devi [2010] 328 ITR 604 wherein this Court held that the primary burden of proof with regard to concealment of income was on the revenue and it was only when the said burden was discharged that reliance could be placed on the valuation report of the DVO. There are several other decisions of this Court in the same vein. One such case being the case of CIT v. VinodSinghal (IT Appeal No.482/2010 decided on 05.05.2010) where, again, reliance was placed on the very same decision of the Supreme Court in K.P. Varghese (supra) and also on a decision of this Court in CIT v. Smt. Shakuntala Devi [2009] 316 ITR 46. It was observed that there must be a finding that the assessee had received an amount over and above the consideration stated in the s....
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....Appeals) as well as the Tribunal both have examined the issue on the basis of the material available on record. It is noted that the assessee had made no disclosure towards the purchase of land in his statement during the search proceedings. The addition was made merely on the basis of the DVO's report without there being any other material. Moreover, the DVO had also substantially relied on jantri rates and had made other reference's for arriving at the valuation." 10. Both the issues are based primarily on factual aspects. No question of law, therefore, these appeals are dismissed." 10. Similarly, in the case of CIT Vs. Berry Plastics P. Ltd., (2013) 35 taxmann.com 296 (Guj), the Hon'ble Gujarat High Court has made following observations: "9. We are of the opinion that CIT(Appeals) as well as the Tribunal committed no error in deleting the additions made by the Assessing Officer. It is undisputed that the sole basis for making the addition was the DVO's report. DVO's report may be a useful tool in the hands of the Assessing Officer, Nevertheless it is an estimation and without there being anything more, cannot form basis for additions under ....
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....rty as per the State PWD rates. He has also given the comparison between CPWD rates and State PWD rates. Therefore, the observations of the Ld. CIT(A) that the assessee has failed to demonstrate the difference between the State PWD rates and CPWD rates is factually incorrect. Even, as pointed out by the Ld. Counsel for the assessee, there was no evidence that the assessee has ever given any contract of the construction of the property to any builder. That even as per the DVO, the properties in question were improved/renovated during different assessment years. Under the circumstances, the A.O should have given the deduction of 10% to 15% on the value estimated by the DVO on account of selfsupervision and self-purchasing of material. The ld. Counsel has submitted that the difference of amount of investment in the said property even as per the DVO's report is less than 10% and is liable to be ignored. The ld. Counsel has further submitted that if the difference of valuation on account of 20% less State PWD rates, 10% to 15% saving on account of self-supervision/self-purchase of material is deducted, then the resultant figure will be minus.. The Hon'ble J&K High Court in Honest Group ....
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....ged understatement of investment in property at 28/6, Industrial Area, Phase-2, Chandigarh. During assessment proceedings u/s 153A for AY 2012-13 to 2018-19, the ld. AO noted that Sanjeev Aggarwal held a General Power of Attorney (GPA) for a property transferred to Vaishali Aggarwal in 2015. This property was leased to group concerns SEARLE and SEPL. The tenants had incurred expenditure for construction/improvement of the said property. The DDIT referred the valuation of the property to the DVO. The value of the construction cost as per DVO's report was more than that was shown in the books of accounts of tenants SEARLE & SEPL. The AO added the difference of valuation in the hands of individuals/Landlords treating the said difference in valuation as an expenditure incurred from undisclosed sources. 69. The Ld. CIT(A), however, held that the addition on account of difference in DVO's report and books of the company-tenant cannot be made in the hands of Individual-Landlords but can only be made in the hands of tenants since the tenants have themselves admitted of having made accounted portion of expenditure. He deleted the addition made in the hands of Individual-Landlords but, pr....
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....1314 Assessee 829/Chandi/2023 8 2 Scott Edil Advance Research Laboratories and Education Limited 2010-11 Assessee 842/Chandi/2023 4 3 Scott Edil Advance Research Laboratories and Education Limited 2010-11 Assessee 842/Chandi/2023 4 67. The issue raised by the assessee in the above appeals relates to the directions given by the ld. CIT(A) to ld. AO to initiate 147/148 taking shelter of s. 150(1)(2) for AY 2010-11 and 2012-13 68. In view of our findings given, above, the direction of the Ld. CIT(A) to reopen the assessment on account of difference in valuation the basis of DVO's report for AY. AY 2010-11 & 2012-13 is also set aside/quashed This issue is accordingly decided in favour of the assessee. Issue 6: Shortage of stock found during search held as undisclosed sale. 69. Following is the list of cases involving this issue :- Sr. No. Name of the assessee AY Appeal by Appeal No. Ground No. 1 Scott Edil Advance Research Laboratories and Education Limited 2018-19 Assessee 846/Chandi/2023 5 2 Scott Edil Pharmacia Ltd. 2018-19 Assessee 846/Chandi/2023 4 3 Balram Krishan ....
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....roper stock register, as reflected in Clause 35 of Form 3CD. That the assessee had not properly maintained the quantitative and qualitative details of raw materials, finished goods, and work-in-progress. The Ld. CIT(A), therefore, held that the ld. AO rightly determined the book stock by applying the average GP rate of the preceding three years, which was reasonable and accepted method. He held that the claim of the assessee that the physical inventory was incorrectly recorded was an afterthought. He, therefore, upheld the addition, so made by the AO. 74. We have heard the rival contentions and gone through the record. The ld. Counsel of the assessee contended that the assessee is a renowned pharmaceutical manufacturer, and like any other manufacturing company, it always has a substantial component of Work in Progress (WIP) at any given time. The nature of the pharmaceutical industry necessitates continuous production cycles, meaning that raw materials undergo multiple stages of transformation before reaching the finished goods stage. However, during the search, the search team completely ignored WIP during the physical stock-taking process, which resulted in a flawed and incomp....
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.... MONOSCOT 1GM 2,86,500.00 10.00 28,65,000.00 FG 5 C-one 1.5 SB 1,35,000.00 14.00 18,90,000.00 WIP 6 C-one 250mg 1,96,250.00 4.00 7,85,000.00 WIP TOTAL 9,60,45,000.00 SCOTT-EDIL ADVANCE RESEARCH LAB.& EDU.LTD. FY 2012-13 Sr. Particulars Qty. Rate(Rs) Amount Group 1 Ceftriaxone Sodium Sterile 5,330.00 6,800.00 3,62,44,000.00 RM/PM 2 Cefotaxime Sodium Sterile 2,549.00 7,000.00 1,78,43,000.00 RM/PM 3 Ceforoxim Axetile 3,351.00 7,865.00 2,63,55,615.00 RM/PM 4 Cefixime Trihydrate 2,430.00 8,750.00 2,12,62,500.00 RM/PM 5 Cefpodoxime Proxetile 2,550.00 12,300.00 3,13,65,000.00 RM/PM 6 Cephalexin 1,905.00 3,500.00 66,67,500.00 RM/PM 7 Paracetamol 19,120.00 275.00 52,58,000.00 RM/PM 8 10ml Clear vials 9,05,100.00 0.83 7,46,707.50 RM/PM 9 10ml WFI 1,74,225.00 1.00 1,74,225.00 RM/PM 10 20mm Gray Butyl Rubber 18,75,300.00 0.38 7,12,614.00 RM/PM 11 20mm Seals green 19,25,600.00 ....
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.... Consumables Total 19,73,60,000.00 SCOTT EDIL ADVANCE RESEARCH LAB & EDU LTD FY 2013-14 Sr. Particulars Qty. Rate Amount Group 1 Ceftriaxone Sodium Sterile 4,558.00 7,450.00 3,39,57,100.00 RM/PM 2 Cefotaxime Sodium Sterile 11,140.00 7,200.00 8,02,08,000.00 RM/PM 3 Ceforoxim Axetile sodium 1,890.00 8,500.00 1,60,65,000.00 RM/PM 4 Cefixime Trihydrate 2,373.00 9,210.00 2,18,55,330.00 RM/PM 5 Cefpodoxime Proxetile 2,526.00 12,300.00 3,10,69,800.00 RM/PM 6 Cephlexin 12,066.00 3,850.00 4,64,54,100.00 RM/PM 7 Sulbactum 1,042.00 5,665.66 59.03.616.73 RM/PM 8 Amoxycillin Trihydrate 1,500.00 2,390.00 35,85,000.00 RM/PM 9 PVC 1,430.00 126.50 1,80,895.00 RM/PM 10 10ml Clear vials 12,58,415.00 0.83 10,38,192.38 RM/PM 11 20 ml vials 2,56,486.00 1.00 2,56,486.00 RM/PM 12 7.5 ml vials 3,54,821.00 0.38 1,34,831.98 RM/PM 13 10ml WFI 5,12,261.00 1.20 6,14,713.20 RM/PM 14 20mm Gray But....
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....00.00 WIP 49 Penmox-D Caps (B/C) 2,60,000.00 26.37 68,56,425.00 WIP 50 Cef O Tab 200mg 1,50,000.00 26.02 39,02,750.00 WIP 51 Machinery Part 1,629.00 389.80 6,34,984.20 Consumables 52 Diesel 8,368.00 65.76 5,50,279.68 Consumables 53 Plastic Bags 3,925.00 140.00 5,49,500.00 Consumables 54 Bearings/Others 5,986.00 253.80 15,19,236.12 Consumables Gross Total 34,85,00,000.00 75. The ld. Counsel of the assessee has further contended that even the assessee's stock was pledged as collateral with banks to avail CC limits and loans, making the banks an interested party in ensuring the accuracy of stock records. Banks conducted regular stock audits through independent external auditors, who physically verified the stock before approving any financial facility. These third-party verifications consistently confirmed the stock position as per the assessee's books, and at no point did these audits report pointed any discrepancies in stock levels. Copies of stock audit reports of the External Auditors appointed by the bankers to physically ....
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....s, no undisclosed bank accounts, and no buyer confirmations unearthed during the search action which could prove that the assessee was involved in unaccounted sales. That only a sum of Rs. 5.65 lakhs in cash were found across all premises, which was inconsistent with the allegation of the department of massive unaccounted sales. The Ld. Counsel therefore, has contended that the entire exercise done by the department of the valuation od stock was inaccurate and flawed. That the additions were made solely and entirely on assumptions and presumptions, without any iota of incriminating material found in the respect during the course of search action. 77. The ld. Counsel for the assessee has further relied on the decision of the Chandigarh Bench of the Tribunal in the case of " Vishal Paper Industries vs. JCIT (2013) 21 ITR 0220 (Chd Trib), wherein it was held that enhanced income due to disallowances should be eligible for 80-IC deduction, and contended that the assessee was entitled to 100% deduction u/s 80IC, and any addition to business income should also qualify for this deduction. He has submitted that even the CBDT Circular No. 37/2016 clarifies that disallowances resulting in....
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....in the form of WIP at any given time, however, the physical inventory taken by the search team only accounted for raw materials and finished goods. Thus, the valuation of inventory becomes flawed on this score. Even we find force in the contention of the Ld. Counsel that the valuation of stock by applying GP rate of the past years was not an appropriate method for computing book stock in a large-scale pharmaceutical manufacturing unit. Even the search party did not reconcile the book stock with actual stock as recorded in audited books through an expert in the field. The Ld. Counsel, as noted above, has pointed out serious errors in physical stock taking such as exclusion of certain storage locations and godowns, counting errors and misclassification of items, particularly pharmaceutical products of different compositions, dosages, and packaging sizes, incorrect valuation rates applied, failure to account for packaging materials, chemicals, and semi-processed goods. Even the assessee had submitted a detailed explanation along with supporting documents to the DDIT during post-search investigations, proving that the physical inventory recorded by them was incorrect. However, neither ....
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....lternate contention of the Ld. AR that even otherwise, the addition made on the alleged suppressed profits will be eligible for deduction u/s 80IC, it is to be noted that if the allegations are that the assessee had indulged in suppression of profits by making unaccounted sales and there is no allegation of any unaccounted purchases, and the assessee's unit is eligible for 80IC deduction, then obviously such profit determined by the AO will be business profit of the manufacturing unit and the same will be eligible for 80IC deduction as held by the coordinate Chandigarh Bench of the Tribunal also in the case of " Vishal Paper Industries vs. JCIT (supra). (2013) 21 ITR 0220 (Chd Trib). In this case, the AO on the one hand has alleged that the assessee has booked bogus/excess purchases, on the other hand made addition on account of supressed sales. This stand of the AO is contradictory to the allegation of bogus purchases. Nonetheless, since we have deleted the addition on this issue, hence this issue is rendered academic in nature. Issue 7: Estimation of Commission/profit @ rate of 1% of total alleged unaccounted sales and purchases. 83. Following is the list of cases involving....
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....he assessee contended before the AO that it was an active entity within the group, performing intergroup sales and purchases. However, the AO pointed out that no evidence of physical movement of goods or genuine trading activity was provided. The assessee also contended that even Smt. Pooja Pandita has also retracted from her statement. The AO however observed that assessee company was a shell company and it has not actually carried out any sale or purchase but facilitated group entities by providing the bills for these sales and purchases when such goods never existed. The AO concluded that the company's transactions were not genuine and were sham in nature. Based on these findings, the AO treated the income of the company as commission income, applying a rate of 6.5% on the alleged purchases and sales with the group companies. Being aggrieved by the said order of the AO, assessee preferred appeal before the Ld. CIT(A) on this issue. 86. The ld. CIT(A) upheld the estimation of income, however, restricted the commission rate @ 1%. He rejected assessee's arguments regarding the lack of any material and the involuntary nature of statements made during search. The ld. CIT(A) also t....
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.... movement of goods, it was not a case where the goods never existed. It had been manufactured by one group entity and sold to assessee who sold it onwards to another group entity. Identical was the position when such another group entity sold goods to the assessee company, who in turn sold it to original manufacturer group entity. 90. At this stage, a specific question was put to the Ld. Counsel for the assessee as to why the assessee company was engaged in circular trading of goods if no commission/bogus profit element was involved in these transactions. In reply, the ld. Counsel for the assessee explained that in fact, the entire circular trading transactions were done to increase the turnover of the assessee as well as of the group companies. He explained that the banks for the purpose of giving loan/credit limit etc. consider the higher turnover. He explained that the entire exercise was done to inflate the turnover, however, it was not a case of bogus billing to earn a commission income. He in this respect has submitted that it is not the case of the department that the assessee has shown bogus purchases from any third party or the assessee has shown bogus sales to show bog....
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....ho in turn sold such goods to the second party at Rs. 3,32,72,933/- and the last party has sold back to the assessee at Rs. 3,32,72,933/- ultimately the difference in the first sale and the last sale was of 0.28% of circular purchases made by the assessee. The ld. CIT(A) has also referred the decision of the ITAT Ahmedabad on the identical issue of circular transaction in the case of M/s. Arman Fashion Pvt. Ld. vs. ITO vide ITA 2400 and 2407/Ahd/2012. The ld. CIT(A) has also discussed in his finding that this was not a case of estimation of net profit on circular purchases but this was a case where the assessee had incurred expenses for circular purchases/transaction @ 0.28% and estimated the disallowance @ 0.30% of circular trading purchases. The ld. CIT(A) has also explained in his finding regarding analysis of the transaction made by the assessee that these transactions were carried out in order to show better turnover in financial accounts. The Revenue could not controvert the facts reported by the ld. CIT(A) with any relevant material. Therefore, looking to the above facts and finding, we do not find any infirmity in the decision of ld. CIT(A) in estimating the disallowance @ ....
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....sales and purchases between group entities without actual movement of goods, the group aimed to artificially inflate profits and claim benefits u/s 80IC. 93. We have heard the arguments of both parties and perused the material on record. The issue under consideration pertains to the alleged commission/profit earned at an estimated rate of 6.5% by the Assessing Officer on total alleged sales and purchases conducted on paper only, which stood reduced by the Ld. CIT(A) @ 1%. It is not the case of the department that the assessee is involved in providing accommodation entries. The only case of the department is that the assessee has shown bogus sales and purchases from group entities to artificially inflate the profits and claim benefit u/s. 80IC of the Act. Moreover, it is the own case of the department that the transactions were circular transactions within the group entities. There is no allegation that the goods at the first instance or to say in the case of the initial/first party were bogus nor there is any allegation that sales made by any of the group entities/first party to third parties were bogus. The only case of the department is that the trading within the group compan....
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.... 1 Scott Edil Advance Research Laboratories and Education Limited 2017-18 Assessee 845/Chandi/2023 6 2 Scott Edil Pharmacia Limited 2017-18 Assessee 833/Chandi/2023 5 95. The lead case taken up is Scott Edil Advance Research Laboratories and Education Limited. for AY 2017-18, having ITA No. 845/Chandi/2023. The assessee in this appeal has taken the following grounds of appeal: Ground no. 6: That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the addition made by Ld. AO of Rs. 58,09,346/- by disallowing deduction u/s 80IC on account of GP on net sales made to M/s Maxport India Pvt. Ltd. by erroneously holding that purchases and sales to the said concern are bogus and has arisen on account of non-manufacturing activities. 96. The issue under consideration pertains to addition made by Ld. AO of Rs. 58,09,346/- by estimating the GP on net of sales and purchase transactions made by SEARLE to M/s Maxport India Pvt. Ltd. The ld. Counsel of the assessee has contended that the ld. AO has computed the difference in sales & purchases in every year in respect of transactions with the Maxport and whe....
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....ion made by Ld. AO of Rs. 4,00,00,000/- u/s 68 regarding amount received from M/s Jai Ambey Pharmaceuticals Pvt Ltd (hereinafter referred to as "JAPPL") by erroneously holding that M/s JAPPL is a shell company even when the amount was received against sale made to that party. 100. This issue/appeals already stood decided in favour of the assessee in view of our findings given above on issue No. 1, while holding that the assessments in the above cases stood completed and not abated, therefore the additions in the absence of any incriminating material are not sustainable in the light of the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). This issue is accordingly decided in favour of the assessee. Issue 10 : Addition made u/s 2(22)(e) of the Act on account of payment by SEPL for construction of House No. 3100, Sector 21, Chandigarh and House no. 323, Sector 9, Chandigarh; & Issue 11: Addition made of Rs. 4,60,077/- each in the hands of individuals/ owners of the house No.3100 u/s 69C r.w.s 115BBE of the Act on account of difference in valuation as per DVO's report as compared to the books of accounts. 101. Following ....
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....l (25%), Mrs. Vaishali Aggarwal (35%), Sh. Balram Krishan Aggarwal (30%) & Smt. Pushpa Rani (10%). Value as per DVO: 119 lakhs Expenditure in books of SEPL: 60.51 Lakhs Expenditure in books of Assessee: 60 Lakhs Total Addition made by AO u/s 2(22)(e): 60 lakhs : Sanjeev Kumar 60 x 25% : 15.12 Lakhs Vaishali Aggarwal 60 x 35% : 21 Lakhs Balram Krishan 60 x 30%: 18 Lakhs 104. The ld. CIT(A) while confirming the addition made by the ld. AO, observed that the assessee failed to provide evidence that the property was used by SEPL as its office. As a result, the Ld. CIT(A) held that SEPL discharged the assessee's liability for the construction, which constituted a benefit to the assessee without consideration, classifying the payments as "income from other sources." Therefore, the additions of Rs. 15,12,958/- and Rs. 7,77,384/- were upheld as income from other sources. 105. Before us, the Ld. Counsel for the assessee contended that the SEPL was the tenant of the assessee and the ld. AO added the construction expenses for the aforesaid two houses incurred by the tenant company as payments to the assessee as deemed dividend. That the tena....
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...., as discussed in earlier paras of this order, the Govt. Valuer was supposed to adopt State PWD rates instead of CPWD rates and further that the CPWD rates are higher about 20% than the PWD rates in Chandigarh. Further the Regd. Valuer engaged by the assessee has estimated the value of the house No. 3100, sector 21, Chandigarh at Rs. 40 Lakhs, hence it is directed that the value of the said house be taken at Rs. 40 Lakhs. The assessee and the SEPL have booked the total expenditure in respect of the said house in their books of account of Rs. 35,57,000. The difference i.e. 40 (-) 35.57 = 4.43 lakhs is considered as investment from undisclosed sources. The said amount be divided in the ratio of 1/3rd each and hence the addition u/s 69C is restricted to the extent of 1.47 Lakhs in the hands of each of the three owners of the said house. Remaining additions on account of gratuitous expenses incurred by the SEPL in respect of both the houses is hereby confirmed as income from other sources. Issue 12: Disallowance in respect of bad debts claimed during the year. 108. Following is the list of cases involving this issue :- Sr. No. Name of the assessee AY Appeal by Appe....
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....lly written off in the books of accounts. The Ld. Counsel in this respect has explained that such bad debts having been written off through computation of income was sufficient compliance of requirement of s. 36(2). He has contended that it was a settled principle of law that reflection in accounts of a transaction was not determinative of its allowability for tax purposes and vice-versa as held in Taparia Tools Ltd. vs. CIT [2015] 372 ITR 605 (SC). He has further relied upon the decision of Bombay High Court in the case of "PCIT vs. JSW Steel Ltd" [2020] 115 taxmann.com 165 (Bombay) to contend that that a new claim for the first time can be made in the ITR filed u/s 153A post search though, such claim was not made in the ITR filed u/s 139. He has further submitted that the taxability of an item or allowability of an expense under taxation laws cannot be decided as per the treatment or disclosure of the item given in books of accounts, rather, the same is to be decided as per the facts and underlying taxation principles. He in this respect has further placed reliance upon the following case laws: i. Sutlej Cotton Mills Ltd. Vs. Commissioner Of Income Tax, 116 ITR 1, wherei....
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....rminative of its allowability in the Tax proceedings. We are of the view that that the writing off the debts which have become bad, though is not sine qua non, but a relevant factor for claim of deduction in this respect. However, this is also a fact on the file that though such debts were actually written off in subsequent years, but the same could not be claimed in those years as the same were already claimed in the return u/s 153A for the year under consideration. In our view, when the genuineness of the claim is not doubted and the debts have also actually become bad in the year under consideration, then denial deduction on the technical ground of not writing off the same in the books of accounts, due to error or omission, would further complicate the matter as in that event the assessment for the years in which the same was written off in the books would have to be reopened and that would disturb the already finalized assessments and that in our view would not be appropriate at this stage, especially, when the claim of the assessee is otherwise admissible for the year under consideration. We therefore, direct the AO to allow the deduction of the bad debts in the year under con....
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....tself was not enough to hold that the purchases made from them were bogus. The Ld. AR has submitted that the AO was not justified in brushing aside the entire evidence and documents filed by the assessee in the shape of invoices, proof of movement of goods, tax compliances made etc. and even without any inquiry or evidence proving the suppliers were bogus. The Ld. AR has demonstrated that the purchases were duly recorded in the books of accounts, supported by invoices, transport receipts and payment details having been made through banking channels. He has also contended that the quantitative stock records matched the purchases and sales, proving that goods were actually received and utilized in the business. That the purchased material was used in the production process, leading to the manufacture and then sale of finished goods. The unused purchases or partly used were carried over as raw material or work-in-progress in inventory. The Ld. AR explained that the assessee was purchasing goods from more than 300 suppliers in India and was also importing goods from certain countries. Similarly, the sales were made with inn India and the goods were also exported to more than 50 countri....
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....ion of Ld. AO where the impugned assessment was re-opened u/s 153A by illegally using extended period of limitation. 122. This appeal already stood decided in favour of the assessee in view of our findings given above on issue No. 1, while holding that the assessments in the above cases stood completed and not abated, therefore the additions in the absence of any incriminating material are not sustainable in the light of the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). This issue is accordingly rendered academic in nature and hence not adjudicated at this stage. The assessee will be at liberty to raise this issue at appropriate stage if need be. Issue 15: Transfer order u/s 127 dtd. 30.03.2018 was without sanction of law, hence bad in law: 123. Following is the list of cases involving this issue : Sr. No. Name of the assessee AY Appeal by Appeal No. Ground No. 1 Scott Edil Advance Research Laboratories and Education Limited 2018-19 Assessee 846/Chandi/2023 3 2 Scott Edil Advance Research Laboratories and Education Limited 2017-18 Assessee 845/Chandi/2023 3 3 Scott E....
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....s and Education Limited for AY 2010-11, 842/Chandi/2023.The assessee in this appeal has taken the following ground of appeal: Ground No. 5: That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of passing assessment order on the basis of transfer order u/s 127 dtd 30.03.2018 as such order is without sanction of law and once order u/s 127 is bad, therefore order u/s 153A r.w.s 143(3) passed by Ld. AO is also bad. 125. This issue/ground is not pressed by the Ld. Counsel for the assessee. Hence this issue is accordingly decided against the assessee being not pressed. Issue 16: Carry forward of MAT credit against the demand raised consequent to impugned addition made in assessment 126. Following is the list of cases involving this issue : Sr. No. Name of the assessee AY Appeal by Appeal No. Ground No. 1 Scott Edil Advance Research Laboratories and Education Limited 2018-19 Assessee 846/Chandi/2023 6 & 7 2 Scott Edil Advance Research Laboratories and Education Limited 2017-18 Assessee 845/Chandi/2023 7 & 8 3 Scott Edil Advance Research Laborator....
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.... disallowing the deduction u/s 80-IC even when the appellant had itself not claimed deduction on such items in the ITR filed. Ground No. 8: That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO by disallowing the deduction u/s 80-IC on the subsidy income of Rs. 1,25,913/-. 131. This appeal already stood decided in favour of the assessee in view of our findings given above on issue No. 1, while holding that the assessments in the above cases stood completed and not abated, therefore the additions in the absence of any incriminating material are not sustainable in the light of the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). This issue is accordingly rendered academic in nature and hence not adjudicated at this stage. The assessee will be at liberty to raise this issue at appropriate stage if need be. Issue 18: Jewellery found at House no 2273, Sector 21C, Chandigarh & Locker no 64, Bank of India, Sector 35, Chandigarh during the search. 132. Following is the list of cases involving this issue :- Sr. No. Name of the assessee AY Appeal by ....
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....over the relevant block period. That given the family's status and substantial earnings, maintaining jewellery worth Rs. 1,40,19,917/- was reasonable, and no addition should be made on this account. The Ld. Counsel has relied upon details of past income details showing that it had sufficient owned funds wherefrom jewellery had been bought. The Ld. Counsel in this respect had referred to the following chart of past assessed income of the assessee's, which was also furnished before the lower authorities: In the present case, the same can be substantiated and proved through the incomes declared by / assessed on the assessees during the block-period. The same is as under :- Returned/Assessed Income u/s 143(3) AYs Sanjeev Kumar Aggarwal Vaishali Aggarwal Balram Krishan Aggarwal 2012-13 34,90,190 21,64,560 54,39,420 2013-14 1, 11,46,732 17,78,320 50,35,130 2014-15 20,85,260 13,94,990 44,66,130 2015-16 18,69,900 50,28,310 47,52,020 2016-17 50,28,310 50,29,200 57,05,310 2017-18 49,46,910 48,03,020 6,55,020 2018-19 67,56,200 80,57,430 9,10,740 Average Income 50,46,215 4....
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.... Appeal by Appeal No. Ground No. 1 Scott Edil Advance Research Laboratories and Education Limited 2018-19 Assessee 846/Chandi/2023 3 2 Scott Edil Advance Research Laboratories and Education Limited 2017-18 Assessee 845/Chandi/2023 3 3 Scott Edil Advance Research Laboratories and Education Limited 2016-17 Assessee 857/Chandi/2023 3 4 Scott Edil Advance Research Laboratories and Education Limited 2015-16 Assessee 856/Chandi/2023 3 5 Scott Edil Advance Research Laboratories and Education Limited 2014-15 Assessee 855/Chandi/2023 3 6 Scott Edil Advance Research Laboratories and Education Limited 2013-14 Assessee 844/Chandi/2023 3 7 Scott Edil Advance Research Laboratories and Education Limited 2012-13 Assessee 543/Chandi/2023 3 8 Scott Edil Pharmacia Limited 2013-14 Assessee 829/Chandi/2023 3 9 Scott Edil Pharmacia Limited 2014-15 Assessee 830/Chandi/2023 3 10 Scott Edil Pharmacia Limited 2015-16 Assessee 831/Chandi/2023 3 11 Scott Edil Pharmacia Limited 2016-17 Assessee 832/Chandi/2023 ....
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....cryptic approval note on 30.12.2019. In the approval note, he has simply written "the approval u/s 153D of the Act, 1961, is accorded for the AY 2014-15." 150. The Ld. Counsel has contended that the said approval has been granted by the Ld. Addl. CIT without application of mind. He in this respect has stressed on the following points of arguments : a) That there is no discussion on the file by the Ld. AO during assessment proceedings with the Addl. CIT. That the approval u/s 153D given in this case is mechanical and ritualistic only and without any application of mind. b) That the Ld. Addl. CIT even did not mention that he has looked into the records or the draft assessment order. That he has just signed the dotted lines. c) That the approval was sought by the AO on 29.12.2019. In this large search group containing more than 50 assessment orders and all these approvals were given in less than 5 working hours. Based on this limited time used by Addl. CIT, it would not have been possible to go through this voluminous assessment record, draft assessment orders containing such minute issues. d) Seized record was never sent to the Addl. CIT as is e....
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....as required to get approval of the Addl. CIT/CIT u/s 153D of the Act before passing the impugned assessment orders. It is also a matter of record that the AO had forwarded the draft assessment orders to the Addl. CIT 29.12.2019. We take a sample copy of the letter forwarding the draft order in the case of SEPL vide letter no 886 along with assessment record to seek the approval u/s 153D of the Act which was accorded on 30.12.2019. The copy of the letter sent by the AO to the Addl. CIT is reproduced as under (for reference only the letter for AY 2018-19 has been reproduced as under. However the AO has sent separate letter for different assessment years):- 145. A perusal of the above letter reveals that the AO had sent the draft Assessment Order on 29.12.2019 to the Addl. CIT along with assessment records. However, the AO did not send the seized material along with the assessment records. The Ld. Addl. CIT sent the approval in all the cases the next day i.e. on 30.12.2019. The contents of the approval in the said case are reproduced as under: 146. The identical approval letters have been sent by the Addl. CIT in respect of more than 40 draft assessment orders involving multiple....
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....ed on 21.08.2024. The matter was again fixed for clarifications for 27.11.2024. This time the Ld. CIT (DR) Mr. K. MehboobAli Khan was also joined in arguments by another CIT(DR) Smt. Kusum Bansal. At their request, the matter was adjourned to 5.12.2024. On 5. 12. 2024, the matter was again heard at length, and both the Ld. CITs (DRs) and the counsel for the assessee addressed the arguments and hearing was concluded to their satisfaction. Thereafter, it took considerable time to us also to go through each of the issue and adjudicate upon the same. What we want to convey is that the above facts and circumstances show that the draft assessment orders were sent by the AO in approximately 50 cases, which required due application of mind, but the Ld. Addl CIT sent the approval on the very next working day in a casual and mechanical manner vide one line order saying that approval is accorded without even minimum deliberations. Under the circumstances, the case laws cited by the Ld. Counsel for the assessee are squarely applicable. The Coordinate Chandigarh Bench of the Tribunal, in the case of "Inder International vs. ACIT" (supra), in some what similar circumstances, has observed as unde....
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....dia Office of the Asst. Commissioner of Income Tax, Central Circle-II, Opp. B.V.M. School Kitchlu Nagar, Ludhiana. No.ACIT/C-II/Ldh/2017-18/446 Dated:29.06.2017 To The Additional Commissioner of Income Tax, Central Range, Ludhiana. Madam, Sub: Approval under section 153D of the Income Tax Act,1961- in the case of M/s Inder International(PAN AABFI7996J) and Sh.Abhay Jain (PAN AHEPJ7203M) - matter regarding- ********* Kindly refer to the subject cited above. Keeping in view the orders of Hon'ble Punjab & Haryana High Court Chandigarh (whereby directing the assessment order to complete the assessment proceedings by 30.06.2017), draft assessment orders of the following cases have been prepared: S. No. Name & address of the assessee PAN Assessment Years 1. M/s Inder International, 594, Nirankari Mohalla No.1, Overlock Road, Ludhiana AABF17996J 2011-12 to 2016-17 (six Years U/s 153A) 2. S.Abhay Jain Prop. M/s Shree Lakshmi Steels, 467, Industrial A....
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....draft assessment order of other group cases and the Addl.CIT, Central Range, Ludhiana has accorded approval u/s 153D of the Act that very day i.e. 29.06.2017 as is clear from the above approval reproduced. The Addl.CIT simply recorded that: "Necessary statutory approval u/s 153D is given to pass the above assessment order as such. Assessment record in this case is returned herewith." 12. We have gone through the decision of Hon'ble Bombay High Court cited by the Ld.Counsel for the assessee in the case of Shreelekha Damani (supra) wherein almost identical approval was considered by the Hon'ble Bombay High Court and the relevant findings are as under: "6. Having heard the learned Counsel for the both sides and having perused the documents on record, we have no hesitation in upholding the decision of the Tribunal. The Additional CIT while granting an approval for passing the order of assessment, had made following remarks :- "To, The DCIT(OSD)-1 Mumbai Subject : Approval u/s 153D of draft order u/s 143(3) r.w.s. 153A in the case of Smt. Shreelekha Nandan Damani for A.Y. 2007-08 reg. Ref : No. DCIT (OSD)-1/CR-7/Appr/2010-11 ....
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....pare a draft assessment order which need to be placed before the approving authority i.e. Joint/Addl. Commissioner (designated authority giving approval to search assessments u/s. 153D of the Act). The approving authority is necessarily required to objectively evaluate such draft assessment order with due application of mind on various issues contained in such order so as to derive his/ her conclusive satisfaction that the proposed action of AO is in conformity with subsisting law. The AO is obligated to pass the assessment order exactly, as per approval/ directions of the designated authority. Inevitably, this evaluation is to be made on basis of material gathered at time of search as well as obtained in the course of the assessment proceeding. The requirement of law is to grant approval not merely as a formality or a symbolic act but a mandatory requirement. 11.2 In the backdrop of facts narrated in the preceding paras, it is the contention on behalf of the asssessee that approval granted under S. 153D does not meet the requirement of law and hence assessment orders passed in consequence of such non-est approval is a nullity in law. The assessment orders thus passed is vitiated i....
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....een granted on a dotted line without any availability of reasonable time which firms up the belief towards non application of mind. Besides, the approval has been granted in a consolidated manner for all assessment years for which voluminous assessment orders were prepared. The whole sequence of action apparently appears to be illusory to merely meet the requirement of law as an empty formality. It is also alleged on behalf of assessee that the draft assessment orders are not available on record which allegation has not been rebutted. The draft assessment orders showing some marking/initials etc. could have given a valuable input on the applicability of mind and could throw light on objectivity applied owing to total silence on any delineation on these aspects in the approval memo. The records before us are totally muted. 11.4 Based on solitary communication placed before us, it is ostensible that draft assessment orders were placed before the Addl. CIT on 29.12.2010 for the first time. It is axiomatic from the plain reading of approval memo that various assessment orders and the issues incorporated in the assessment orders, were never subjected to any discussion with the authority....
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....e easily inferred that the said order was approved, solely relying upon the implied undertaking obtained from the Assessing Officer in the form of draft assessment order that AO has taken due care while framing respective draft assessment orders and that all the observations made in the appraisal report relating to examination/investigation of seized material and issues unearthed during search have been statedly considered by the AO seeking approval. Thus, the sanctioning authority has, in effect, abdicated his/ her statutory functions and delightfully relegated his/her statutory duty to the subordinate AO, whose action the Additional CIT, was supposed to supervise. The addl. CIT in short appears to have adopted a short cut in the matter and an undertaking from AO was considered adequate by him/ her to accord approval in all assessments involved. Manifestly, the Additional CIT, without any consideration of merits in proposed adjustments with reference to appraisal report, incriminating material collected in search etc. has proceeded to grant a simplicitor approval. This approach of the Additional CIT, Central has rendered the Approval to be a mere formality and can not be countenan....
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....nt is noted in above paras. We noted that the relevant Para of the above approval letter merely says that "Necessary statutory approval u/s 153D is given to pass the above assessment order as such. Assessment record in this case is returned herewith..."which clearly proves that the Addl. CIT had routinely given approval to the AO to pass the order only on the basis of contents mentioned in the draft assessment order without any application of mind and seized materials were not looked at because that was not available before him at the time of granting of approval to the draft assessment order and other enquiry and examination was never carried out. From the said approval, it can be easily inferred that the said order was approved, solely relying upon the implied undertaking obtained from the Assessing Officer in the form of draft assessment order that AO has taken due care while framing respective draft assessment orders and that all the observations made in the appraisal report relating to examination/investigation of seized material and issues unearthed during search have been statedly considered by the AO seeking approval. Thus, the sanctioning authority has, in effect, abdicate....
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....0.000.00 India-3169 Dr House No 3100, Receipt 127 23,00,000.00 Sec 21 Chd (25% Dr House No 3100, Journal 77 1,11,186.00 Share) Sec 21 Chd (25% Dr House No Journal 128 27.068.00 Share) 3100, Sec 21 Chd (25% 9-11-2017 Dr State Bank Journal 129 7,50,000.00 Share) of India-3169 Dr House No Receipt 130 13,98,000.00 323 Sec 9D Chd Dr House No Journal 78 1,28,000.00 323 Sec 9D Chd Dr House No Journal 131 1,23,298.00 323 Sec 9D Chd Dr House No Journal 132 133 1,81,130.00 323 Sec 9D Chd Dr House No Journal 134 18, 192.00 323 Sec 9D Chd House No Journal 135 18,880.00 Dr 323 Sec 9D Chd 10-11-2017 Dr State Journal 136 58,880.00 Bank of India-3169 Dr State Receipt 81 5,50,000.00 Bank of India-3169 1-12-2017 Cr Salary Receipt 82 26,00,000.00 From Scott Edil Pharmacia Cr Rent Journal 145 5,50,000.00 Ltd From SEPL- Flat 303 15-12-2017 Dr State Journal 147 13,500.00 Zirakpur Bank of India-3169 16-12-2017 Dr State Receipt 100 4,00,000.00 Bank of India-3169 Receipt 104 5,70,000.00 Dr State Bank of India-3169 26-12-2017 Dr Receipt 105 4,00,000.00 House No 323 Sec 9D Chd 1-1-2018 Cr Jou....
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....ited (Current Transactions) Ledger Account : 1-Apr-2017 to 31-Mar-2018 Page 2 Particulars Vch Type Vch No. Debit Credit hate Brought Forward 5,10,79,547.00 2,45,59,812.00 C r Salary From Scott Edil Pharmacla Ltd Journal 63 4,50,000.00 18-2017 Cr Rent From SEPL- Flat 303 Zirakpur Journal 64 13,500.00 Dr House No 323 Sec 9D Chd Journal 65 45,686.00 28-2017 Dr State Bank of India-3169 Receipt 30 11,00,000.00 15-8-2017 14-8-2017 Cr State Bank of India-3169 Payment 29 15,00,000.00 15-8-2017 Dr House No 323 Sec 9D Chd Journal 67 25,446.00 Dr House No 323 Sec 9D Chd Journal 25,446.00 16-8-2017 Cr State Bank of India-3169 Payment 32 25,50,000.00 18-8-2017 Dr House No 323 Sec 9D Chd Journal 72 41,400.00 20-8-2017 Dr House No 323 Sec 9D Chd Journal 73 39,001.00 Dr House No 323 Sec 9D Chd Journal 74 2,100.00 Dr House No 323 Sec 9D Chd Journal 75 9,378.00 Dr House No 323 Sec 9D Chd Journal 76 30,786.00 V 30-8-2017 -Dr State Bank of India-3169 Receipt 45 30,00,000.00 1-9-2017 Dr State Bank of India-3169 Receipt 48 11,00,000.00 r Salary From Scott Edil Pharmacia Ltd Journal 80 5,00,000.00 Cr Rent....
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.... 20-8-2017 Dr 30,786.00 V 30-8-2017 -Dr 1-9-2017 Dr 5-9-2017 Dr 6-9-2017 Dr 8-9-2017 Dr 28-9-2017 Cr 29-9-2017 Cr 94 95 30-9-2017 Dr 1-10-2017 13-10-2017 Cr 17,00,000.00 24-10-2017 Dr 26-10-2017 Dr 6,609.00 31-10-2017 Dr UN 4-11-2017 Dr continued ... Sanjeev Aggarwal Scott Edil Pharmacia Limited (Current Transactions) Ledger Account 1-Apr-2017 to 31-Mar-2018 Page 1 Date Particulars Vch Type Vch No Debit Credit Cr Opening Balance 88,25,547.00 1-4-2017 14-2017 Dr House No 3100, Sec 21 Chd (25% Share) Journal 1,00,000.00 Cr Salary From Scott Edil Pharmacia Ltd Journal 6,00,000.00 Cr Rent From SEPL- Flat 303 Zirakpur Journal 13,500.00 6-4-2017 Dr State Bank of India-3169 Receipt 2 5,00,000.00 10-4-2017 Dr State Bank of India-3169 Receipt 2,40,689.00 1-5-2017 Cr Salary From Scott Edil Pharmacia Ltd Journal 15 6,00,000.00 Cr Rent From SEPL- Flat 303 Zirakpur Journal 17 13,500.00 9-5-2017 Dr State Bank of India-3169 Receipt 6,00,000.00 17-5-2017 Dr State Bank of India-3169 Receipt 13 60,000.00 1-6-2017 Cr Salary From Scott Edil Pharmacia Ltd Journal 24 5,00....
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....-6-2017 Dr 20,75,000.00 2-7-2017 Dr 4-7-2017 Dr 23 5-7-2017 Dr 2,50,000.00 1,49,67,000.00 13-7-2017 Cr 17-7-2017 Dr 5,80,000.00 42 House House No 323 Sec 9D Chd House No 323 Sec 9D Chd House continue. Document 2 99 96 This agreement forms part of stamp papers (Non-Judicial) worth Rs. 1001- Executed by Sayfew Aggammal, Vaishali Aggammel + Ballon .p .. On 29/12/16 Place: Chandigarh Date: 29.12.16 DEED OF GUARANTEE THIS DEED OF GUARANTEE made the 29 th day of Del 2016 by 1. Shri Sanjeev Aggarwal 2. Sh. Balram Krishan Aggarwal and 3. Smt. Vaishali Aggarwal all residents of H.No.2273, Sector 21-C, Chandigarh (hereinafter referred to as "the Guarantors" which expression shall unless repugnant to the context or meaning thereof be deemed to include their respective heirs, executors , administrators and legal representatives) in favour of State Bank of India, SME Branch, Industrial Estate, Phase-I, Chandigarh being the Lead Bank of "SBI Consortium" as defined in the Working Capital Consortium Agreement dated the 29 day of Del 2016 (hereinafter referred to as "Lead Bank" which expression shall unless repu....