THE DCIT, 1(1), BHOPAL vs. SMT. SUDESH CHAWLA, BHOPAL

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Name of Assessment Date of Date of Section assessee Year order of order of under CIT(A)_1 ACIT-1(2) which passed Late Smt. 2000-01 to 30.03.2015 19.03.2013 153C Sudesh 2005-06 r.w.s. Chawla and 143(3) 2006-07 143(3) Prem Chawla 2000-01 to 30.03.2015 19.03.2013 153C 2005-06 r.w.s. and 143(3) 2006-07 143(3) Smt. Sarita 2000-01 to 31.03.2015 19.03.2013 153C Chawla 2005-06 r.w.s. and 143(3) 2006-07 143(3)

Revenue’s appeal No.ITA/405/Ind/2015 in the case of Late Smt. Sudha Chawla for Assessment Year 2006-07 is directed against the order of Ld. Commissioner of Income Tax(Appeals), (in short ‘CIT(A)’), Bhopal order dated 30.03.2015.

2. As the issue raised in all these appeals are similar, these were heard together and are being disposed off by this common order for the sake of convenience and brevity.

3. (i) The assessee late Smt. Sudesh Chawla (Through Legal Heir Shri Prem Chawla) raised following grounds of appeal:-

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Assessment Year 2000-01, IT(SS)A No.158/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.4,65,192/- being 1/10th of the total purchases of Rs.46,51,915/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.16,258/- being 1/10th of the total salary& wages of Rs.1,16,580/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.11,519/- being 1/10th of the total salary & wages of Rs.1,15,193/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C. 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c). 7. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal

on or before the date of hearing. Assessment Year 2001-02, IT(SS)A No.159/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only. 4 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.5,86,530/- being 1/10th of the total purchases of Rs.358,65,299/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.34,770/- being 1/10th of the total freight&cartage of Rs.3,47,702/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.16,258/- being 1/10th of the total salary& wages of Rs.1,16,580/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.16,258/- being 1/10th of the total salary & wages of Rs.1,16,580/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.3,40,000/- being unexplained cash payment made without accepting the explanation offered by the assessee and without considering the facts properly.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.10,01,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

9. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

10. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal

on or before the date of hearing. Assessment Year 2002-03, IT(SS)A No.160/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside 5 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.7,72,566/- being 1/10th of the total purchases of Rs.77,25,658/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.77,721/- being 1/10th of the total freight&cartage of Rs.7,77,209/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.18,025/- being 1/10th of the total salary& wages of Rs.1,80,250/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.34,814/- being 1/10th of the total salary & wages of Rs.3,48,140/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

8. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2003-04, IT(SS)A No.161/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.9,62,410/- being 1/10th of the total purchases of Rs.96,24,102/- without considering the fact that the entire 6 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.52,590/- being 1/10th of the total freight & cartage of Rs.5,25,895/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.22,067/- being 1/10th of the total salary& wages of Rs.2,20,670/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.33,836/- being 1/10th of the total salary & wages of Rs.3,38,362/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.3,50,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

9. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal

on or before the date of hearing. Assessment Year 2004-05, IT(SS)A No.162/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.25,46,873/- being 1/10th of the total purchases of Rs.2,54,68,732/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature. 7 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.1,12,127/- being 1/10th of the total freight & cartage of Rs.11,21,273/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.28,818/- being 1/10th of the total salary& wages of Rs.2,88,176/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.1,29,087/- being 1/10th of the total salary & wages of Rs.12,90,872/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.14,50,843/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving part relied of Rs.2,50,000/- only out of total addition of Rs.12,16,941/- on account of addition in capital account without considering the explanation offered by the appellant and without considering the facts properly 8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

9. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

10. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal

on or before the date of hearing. Assessment Year 2005-06, IT(SS)A No.163/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.36,22,085/- being 1/10th of the total purchases of Rs.3,62,20,852/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.99,447/- being 1/10th of the total freight & cartage of Rs.9,94,465/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.21,644/- being 1/10th of the total salary& wages of Rs.2,16,443/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.73,865/- being 1/10th of the total salary & wages of Rs.7,38,646/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.16,50,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

9. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing. Assessment Year 2006-07,

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.38,69,619/- being 1/10th of the total purchases of Rs.3,86,96,192/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.1,35,825/- being 1/10th of the total freight & cartage of Rs.13,58,248/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.42,518/- being 1/10th of the total salary& wages of Rs.4,25,176/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.2,23,260/- being 1/10th of the total salary & wages of Rs.22,32,600/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.14,00,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving part relied of Rs.38,86,483/- by giving relief of Rs.90,68,460/- only out of total addition of Rs.1,29,54,943/- on account of suppressed sales without considering the explanation offered by the appellant and without considering the facts properly 8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.24,39,857/- on account of difference in stock as per the Commercial Tax Department and as per the books of account without accepting the explanation offered by the assessee that the stock of the assessee is duly tallied with the excise records and there is no difference as such.

9. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.2,85,709/- on the basis of loose papers on which certain expenses are mentioned without accepting the explanation offered by the assessee that all the expenses mentioned on these loose papers are duly recorded in the books of account for which necessary information was submitted during the course of assessment proceedings.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 10. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C. 11. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c). 12. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

(ii) Revenue has raised following grounds of appeal in the case of late Smt. Sudesh Chawla (Through Legal Heir Shri Prem Chawla); Assessment Year 2006-07,

On the facts and in the circumstances of the case, the CIT(Appeals) has erred in: 1.Restricting the disallowance of purchase and wages and salary to 10% of total expenses as against the disallowance of 40% of purchase and freight-cartage expenses and disallowance of 33.33% of wages and salary expenses made by the A.O 2.Deleting the addition of Rs.15,32,527/- made by the AO on account of explained capital. 3.Deleting the addition of Rs.90,68,460/- made by the AO on account of suppressed sales. 4.The appellant reserves his right to add, amend or alter the grounds of appeal on or before the date, the appeal is finally heard for disposal.

(iii) Assessee Shri Prem Chawla has raised following grounds of appeal :-

Assessment Year 2000-01, IT(SS)A No.170/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.3,61,730/- being 1/10th of the total purchases of Rs.36,17,299/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.13,835/- being 1/10th of the total salary& wages of Rs.1,38,352/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.14,627/- being 1/10th of the total salary& wages of Rs.1,46,273/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.8,74,400/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

8. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2001-02, IT(SS)A No.171/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.4,95,333/- being 1/10th of the total purchases of Rs.49,53,330/- without considering the fact that the entire IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.19,700/- being 1/10th of the total salary& wages of Rs.1,97,000/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.19,280/- being 1/10th of the total salary& wages of Rs.1,92,795/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.4,00,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

8. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2002-03, IT(SS)A No.172/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.6,71,606/- being 1/10th of the total purchases of Rs.67,16,065/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.126,325/- being 1/10th of the total salary& wages of Rs.2,63,250/- without considering the fact that the 13 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

6. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2003-04, IT(SS)A No.173/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.10,98,148/- being 1/10th of the total purchases of Rs.1,09,81,477/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.133,240/- being 1/10th of the total salary& wages of Rs.3,32,400/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.43,031/- being 1/10th of the total salary& wages of Rs.4,30,310/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving relief of Rs.4,75,000/-only out of total addition of Rs.6,52,100/- and thereby confirming the addition of Rs.1,77,100/- without considering the explanation offered by the appellant and without considering the facts properly.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C. 7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c). 8. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2004-05, IT(SS)A No.174/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.12,99,114/- being 1/10th of the total purchases of Rs.1,29,91,144/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.21,478/- being 1/10th of the total salary& wages of Rs.2,14,778/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.64,076/- being 1/10th of the total salary& wages of Rs.6,40,755/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving relief of Rs.16,40,000/- only out of total addition of Rs.18,52,520/- and thereby confirming the addition of Rs.2,12,520/- without considering the explanation offered by the appellant and without considering the facts properly.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.1,29,200/- being agriculture income treated as income from other sources without considering the explanation offered by the appellant and without considering the facts properly.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C. 8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c). 9. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2005-06, IT(SS)A No.175/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.25,28,512/- being 1/10th of the total purchases of Rs.2,52,85,121/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.52,233/- being 1/10th of the total salary& wages of Rs.5,22,330/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.96,442/- being 1/10th of the total salary & wages of Rs.9,64,416/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.2,95,000/- made on account of security deposits without considering the explanation offered by the appellant and without considering the facts properly.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving relief of Rs.3,01,000/- only out of total addition of Rs.4,00,000/- and thereby confirming the addition of Rs.99,000/- on account of purchase of property. The Ld. CIT(A) further erred in enhancing the addition by Rs.3,38,810/- on account of registration expenses incurred IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group on purchase of property without considering the explanation offered by the appellant.

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving relief of Rs.5,33,000/- only out of total addition of Rs.7,45,520/- and thereby confirming the addition of Rs.2,12,520/- without considering the explanation offered by the appellant and without considering the facts properly 8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

9. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

Assessment Year 2006-07,

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in confirming the addition of Rs.25,42,596/- being 1/10th of the total purchases of Rs.2,54,25,960/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying and particular item of disallowable nature. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.30,223/- being 1/10th of the total salary& wages of Rs.3,02,226/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.2,240,388/- being 1/10th of the total salary & wages of Rs.24,03,875/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.7,80,000/- made on account of IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group unsecured loan without considering the explanation offered by the appellant and without considering the facts properly. 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in giving relied of Rs.1,00,000/- only out of total addition of Rs.2,00,000/- on account of suppressed sales without considering the explanation offered by the appellant and without considering the facts properly

7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.3,34,500/- on account of cash found during the course of search without considering the explanation offered by the appellant that belongs to Smt. SaritaChawla wife of the appellant and found in her locker only and necessary explanation in this regard was given by her.

8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C. 9. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c). 10. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

(iv) Assessee Smt. Sarita Chawla has raised following grounds of appeal:- Assessment Year 2000-01, IT(SS)A No.164/Ind/2015

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.34,800/- on account of income from computer programming without considering the fact that the said addition was made arbitrarily without any concrete basis.

3. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.82,350/- being balance of opening capital without considering the explanation offered by the appellant and without 18 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group considering the fact that the advances were given out of current year’s income only.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

6. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2001-02, IT(SS)A No.165/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.36,600/- on account of income from computer programming without considering the fact that the said addition was made arbitrarily without any concrete basis.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

5. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2002-03, IT(SS)A No.166/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 2. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.44,300/- on account of income from computer programming without considering the fact that the said addition was made arbitrarily without any concrete basis.

3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

5. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2003-04, IT(SS)A No.167/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.34,650/- on account of income from computer programming without considering the fact that the said addition was made arbitrarily without any concrete basis.

3. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.1,99,900/- being unexplained investment in the firm M/s AtulSolvoChemwithout considering the explanation offered by the appellant and without considering the fact that the said transaction is duly reflected in the books of account.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

6. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2004-05, IT(SS)A No.168/Ind/2015 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ACIT erred in giving relied of Rs.2,000/- only out of total addition of Rs.50,640/- on account of income from retail trade without considering the explanation offered by the appellant and without considering the fact that the said addition was made arbitrarily without any basis.

3. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.1,87,500/- being unexplained loan and sundry creditors arbitrarily without considering the explanation offered by the assessee that the said loan is taken in the personal capacity andsundry creditors are for expenses and purchase of material.

4. That on the facts and in the circumstances of the case, the ACIT erred in confirming the addition of Rs.1,51,775/- by treating the agriculture income as income from undisclosed sources without accepting the explanation offered by the assessee that the assessee has taken agriculture land on lease and on the same agriculture activities were done and necessary details regarding lease agreement, details of agriculture produce sale receipts were submitted during the course of assessment proceedings.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

7. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

Assessment Year 2005-06, IT(SS)A No.169/Ind/2015 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside 21 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. ACIT erred in confirming the addition of Rs.92,426/- on account of income from computer programming stating that this ground was not raised in first appeal without giving specific finding in the merit of addition.

3. That on the facts and in the circumstances of the case, the Ld. ACIT erred in confirming the addition of Rs.8,73,364/- on account of capital account without accepting the explanation of the assessee that the addition in the capital account is made out of the transfer from personal account and loan taken from relatives for which necessary information was submitted during the course of assessment proceedings.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.5,90,619/- being 1/10th of the total purchases of Rs.59,06,192/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.43,608/- being 1/10th of the total salary& wages of Rs.36,080/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.13,048/- being 1/10th of the total salary & wages of Rs.22,32,600/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature 7. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

8. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

Assessment Year 2006-07,

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside 22 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

2. That on the facts and in the circumstances of the case, the ld. ACIT erred in confirming the addition of Rs.12,14,092/- being 1/10th of the total purchase of Rs.1,21,40,919/- without considering the fact thaqt the entire disallowance was made arbitrarily, without any concrete basis and without specifying anyparticular item of disallowable nature.

3. That on the facts and in the circumstances of the case, the ld. ACIT erred in confirming the addition of Rs.5,094/- being 1/10th of the total purchases of Rs.50,936/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

4. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs.95,352/- being 1/10th of the total salary expenses of Rs.9,53,523/- without considering the fact that the entire disallowance was made arbitrarily, without any concrete basis and without specifying any particular item of disallowance nature.

5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the charging of interest u/s 234A, u/s 234B and u/s 234C.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c).

7. That the appellant craves leave to add, to urge, to alter or to amend any of the ground of appeal on or before the date of hearing.

(i) Late Smt. Sudesh Chawla 23 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group (Through L/H Shri Prem Chawla) Partners of M/s Atul Solvo Chemical & Prop. M/s Anand Organics (ii) Shri Prem Chawla Partner of M/s Atul Solvo Chemical, Prop.M/s Anand Paints &Anand Industries (iii) Smt. Sarita Chawla Partnerof Sarita Consultancy& Prop. Anand Coatings 5. In the instant appeals we are dealing with the 3 individuals named herein above, therefore the partnership firm M/s. Atul Solvo Chemical is not under consideration. During the course of search and seizure operations u/s 132 of the Act and during the survey actions u/s 132(A) of the Act certain documents were found and seized. In the statement given on 5.1.2006 u/s 132(4) of the Act Shri Prem Chawla surrendered Rs.9,50,000/- on behalf of his mother Late Smt. Sudesh Chawla, Rs.12,00,000/- was surrendered in the name of Shri Prem Chawla and Rs.3,50,000/- was surrendered in the hands of wife Smt. Sarita Chawla. Consequent 24 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group to search operations assessee(s) furnished returns u/s 153A of the Act. Assessments were completed u/s 143(3) of the Act after making additions. Assessee(s) appeal before Ld. CIT(A) was partly allowed.

Matter thereafter reached before this Tribunal. Vide order dated 31.03.2011 orders of Ld. CIT(A) were set aside and the matter of the assessment orders in question before us were restored to the file of Ld. A.O for making assessments afresh after examining the documents which were submitted for the first time before Ld. CIT(A) and the Ld. A.O was not given any opportunity to verify the same.

In view of the directions of this Tribunal fresh notices were issued and the assessments were reframed again after making various additions. Against the same appeals were filed before Ld. CIT(A) and the assessee(s) are partly succeeded. Both the assessee and revenue filed appeals before the Tribunal, however some of the appeals were dismissed due to low tax effect on account of CBDT Circular No. 17 of 2019 dated 8th August, 2019. Now all the 3 assessee(s) are in appeal before the Tribunal and Revenue is in appeal only for Assessment Year 2006-07 in the case of Late Smt.

Sudesh Chawla. 25 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 6. We will first take up common issues and thereafter we will deal with remaining grounds of each assessee(s) separately.

That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving the clear finding regarding the grounds taken that the set aside assessment was made arbitrarily without following the directions of the Hon'ble I.T.A.T. properly and without considering the fact that regular and proper books of account are maintained and the Hon'ble CIT(A) has allowed the appeal after considering the documents submitted at the time of appellate proceedings and the Hon'ble I.T.A.T. has set aside the assessment only for the reason the all the aforesaid documents were submitted for the first time at the appellant stage only.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 9. Now we take up the common issue relating to disallowance of purchases and disallowance of other direct and indirect expenses which have been raised by the following assessee(s)

(i) Late Smt. Sudesh Chawla Assessment Year 2000-01 Ground No. 2,3 & 4 Assessment Years 2001-02 to 2006-07 Ground No. 2,3,4&5 (ii) Revenue’s appeal in the case Of Late Smt. Sudesh Chawla Assessment Year 2006-07 Ground No.1 (iii) Prem Chawla Assessment Year 2000-01 to 2001-02 Ground No.2,3 & 4 Assessment Year 2002-03 Ground No. 2 & 3 Assessment Year 2003-04 Ground No.2,3&4 to Assessment Year 2006-07 (iv) Smt. SaritaC hawla Assessment Year 2005-06 Ground No. 4,5&6 Assessment Year 2006-07 GroundNo.2,3&4 10. On perusal of the above grounds we find that Ld. A.O has taken a common course of action of disallowance of purchases disallowance of some direct and indirect expenses. Therefore for adjudication purpose we will take up the facts of late Smt. Sudesh IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Chawla and shall apply the decisions accordingly on the remaining two assessee(s) also with regard to these grounds.

During the assessment proceedings it was claimed that books of accounts kept in computer were lost. Most of the staff and labour were working for all the concerns and there were inter mixing of transactions. Most of the expenses Freight, cartage charges, salary were paid in cash. Ld. A.O could not verify the purchases. Though the assessee contended that books of accounts were regularly maintained and audited and due to reasons beyond his control computer books could not retrieved. Thereafter the Ld.A.O though has not disputed the quantum of sales in any of the assessee(s) except for suppressed sale issue for Assessment Year 2006-07 in case of Late Smt. Sudesh Chawla has not made any specific observation about the sales figured and thus accepted the same. 28 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Ld. A.O completed the assessments making disallowance around 33.33% of the purchases and some of the expenses. When the matter came before Ld. CIT(A) he sustained the disallowances to 10%. Now the assessee is in appeal before the Tribunal against the additions confirmed by Ld.CIT(A) and Revenue is in appeal for A. Y.

2006-07 against the additions deleted by Ld.CIT(A).

GROUND ON DISALLOWANCE OF PURCHASE, WAGES &SALARY AND SALARY EXPENSES. GROUND NO. 2(A) UNEXPLAINED PURCHASE (Rs.4,65,192/-) AO. PB 4 CIT{A) PB 54{Findings PB 70) ITAT PB 113 Set-aside AO pg. 2 para 5 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group CIT{A) pg. 15-20 para 5.4 A.Y Purchases Purchases Disallowed Total disallowed Deptt. Assessee 2000-01 46,51,915 13,95,575 4,65,192 18,60,766 2001-02 58,65,299 17,59,589 5,86,530 23,46,199 2002-03 77,25,658 23,17,697 7,72,566 30,90,263 2003-04 96,24,102 28,87,230 9,62,410 38.49,640 2004-05 2,54,68,732 76,40,619 25,46,873 1,01,87,492 2005-06 3,62,20,852 78,66,255 36,22,085 1,14,88,340 2006-07 3,86,96,192 1,16,08,857 38,69,619 1,54,78,476 GROUND NO. 3 (A) UNEXPLAINED WAGES (11,519/-) AO. PB 5 CIT{A) PB 74 ITAT PB 113 Set-aside AO pg. 3 para 6 CIT{A) pg. 15-20 para 5.4

A.Y Wages Wages Disallowed Total disallowed Assessee Department 2000-01 1,15,193 11,519 26,878 38,397 2001-02 1,62,580 16,258 37,935 54,193 2002-03 1,80,250 18,025 42,058 60,083 2003-04 2,20,670 22,067 51,489 73,556 2004-05 2,88,176 28,818 79,240 98,058 2005-06 2,16,443 21,644 50,503 72,147 2006-07 4,25,146 42,518 99,197 1,41,715

GROUND NO 4 OF ASSESSEE UNEXPLAINED SALARY (A.Y. 2000-01) AO. PB 5 CIT(A) PB 75 ITAT PB 113 Set-aside AO pg. 3 para 7

CIT(A) pg. 15-20 para 5.4 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group A.Y Salary Salary Disallowed Total disallowed Assessee Department 2000-01 1,03,110 10,311 24,059 34,370 2001-02 3,16,043 31,604 73,743 1,05,347 2002-03 3,48,140 34,814 81,232 1,16,046 2003-04 3,68,362 33,836 78,951 1,22,787 2004-05 12,90,872 1,29,087 3,01,203 4,30,290 2005-06 7,38,646 73,865 1,72,350 2,46,215 2006-07 22,32,600 2,23,260 5,20,940 7,44,200

FACTS

The addition of Unexplained Purchases, Freight & cartage, wages and salary debited in Trading account and unexplained salary debited in profit &loss account by Id AO are on the basis of following: -

1.Most of the expenses were made in cash. 2.With regard to Freight and cartage - Proper bills and vouchers were not furnished. 3.With regard to salary and wages - name of payee could not be verified. 4.The purchases made in cash were not verifiable

Thus, the Id AO considering the above, disallowed 40 of the purchases and Freight and cartage claimed in A.V. 2000-2001 to 2006-07. With regard to Salary &wages in trading account and Salary debited in profit and loss account, 1/3rd of the total expenses were disallowed. The appellant preferred appeal before Id CIT(A) and filed written submissions.

The Id CIT(A) considering the submissions and facts of the case and also on the basis of the following allegations, contended that the books of accounts were not correct and complete and thus disallowed the expenses at 10% of the total expenses:

A.In earlier assessment, it was stated that books of accounts maintained on computers were lost and could not be retrieved.

B.Sundry Creditors for purchase balance remain unchanged from year to year.

. C. In survey u/s 133A, carried out on 21.12.05 at different business premises of the appellant as well as of family members, all the accounts were maintained at business premises of appellant 31 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group D.LPS-l of 69 pages found and impounded during survey relates to cash voucher of M/s. Anand Organics was not recorded in books of accounts. E.Common pool of labour working for all concern of family members but expenses claimed separately.

Inter-mixing of transactions between the business concerns F. of family members.

Both the department and the assessee are in appeal against the above deletion and confirmation of addition. The following submissions are made:

SUBMISSIONS:-

a.The findings of Id AO may be seen. He has not pointed any specific defect in any expenditure. He states "some" of the vouchers are not properly maintained. The disallowance is ad hoc and without pointing any specific defect. {ReJer AO para5.2,6.2, 7.2) b.The Id AO/ CIT(A) has not marked any specific vouchers of disallowable nature but summarily disallowed the large sum at the rate of 40 out of purchases. There is no basis of 40 or 10 as made out by Id AO and Id CIT(A).

2. Non-abated assessment

It is pertinent to submit that the appeal relates to search cases. The time limit for issuance of notice u/s. 143(2) had already elapsed. Thus, the assessment is said to have been completed. It cannot be said that at the time of search the assessment was pending. A non-abated assessment can only be disturbed in respect of incriminating material found as a result of search. This is so held in CIT vs Kabul Chawla 380 ITR 573 (Del)

CIT vs Gurinder Singh Bawa' 386 ITR 483{Bom.)

In our cases, no incriminating material has been found while making the additions in respect of aforesaid grounds. Whatever IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group incriminating material was found was already offered and tax was paid on same. No other material remains. In the present case, the addition is purely related to general grounds, which could have been a subject matter of regular assessment and not search assessment. Even in regular assessment, no addition can be made on ad hoc basis holding that "some" vouchers are unexplained.

3. Audited books u/s 44AB

The appellant maintains regular and proper books of account which are audited u/s 44AB of the Act. Auditor's Reports for different years are filed in Paper Book.

PB Ref. A.Y. 2001-02 PB 148-159 2002-03 PB 205-217 2003-04 PB 259-273 2004-05 PB 331-348 2005-06 PB 422-435 2006-07 PB 520-540 The auditor has not pointed out any discrepancies in the books of accounts.

4.The records of the appellant are governed by the Central Excise Laws. The assessee is maintaining the statutory records as prescribed under the said laws ,in RG 21 Part I & Part 11. The invoice prepared by the assessee is an excisable invoice and after preparation duly recorded in all the statutory records.

5.Case law:- Pr. CIT vs Jagdish S. Patel84 taxmann.com 259 (Guj.) Vijay Trading Co. 76 taxmann.com 366 (Guj)

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group The court held in above cases that when purchase made by assessee was found to be bogus, not entire amount covered under such purchases but profit element embedded therein would be subject to tax.

6.If the purchases are rejected, the sales would also be reduced. The goods of the appellant are subject to excise. Quantitative details were given with the return of income (alongwith Auditor's report in Form No. 3CD). To illustrative the quantitative data for F.Y. 2001-02 was given at PS 216-217.

7.The Ld. AO has observed that substantive details of expenses in trading and Profit and Loss account has not been filed, whereas the assessee has filed complete ledger accounts of expenses in question, which are as under: -

A.Y. PB Ref. 2001-02 PB 174-188 2002-03 PB 231-246 2003-04 PB 286-303 2004-05 PB 361-403 2005-06 PB 452-497 2006-07 PB 551-608

8. The disallowance was arbitrarily made and had no supporting basis.

9.Non-production of books before the Id AO in the first round: - Ld AO in the first round (PB 4, Third para from top) has pointed out that assessee did not file any substantive details as he claimed that books of account maintained on computer have lost and cannot be retried. He made an assessment u/s. 144. However, Id CIT(A) in the first round at PS 48 para (b) has stated in fourth line that books of accounts and other documentswere seized in search.

Thus, the Id CIT(A) was not justified in relying on the findings of the ld AO. Moreover, the order of the Id AO and of the Id CIT(A) in the first round was set-aside by the Hon'ble ITAT for assessment afresh.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 10.The Id CIT(A) referring to one instance of unrecorded transaction in books of Anand Organics (LPS-169 pages), framed similar view for the period of six years covered by sec 153A. The act of drawing inferences, without any basis of evidence is not justified. Moreover, Shri Prem Chawla, who was confronted with the said documents have surrendered Rs.9.5 lakhs as undisclosed income in the hands of the appellant. 11.The disallowance was made simply saying that 'some of the vouchers are not properly maintained and names of the persons to whom amount paid could not be verified'. Thus, the AO has not marked any specific vouchers of disallowable nature but summarily disallowed the large sum of money on the basis of untenable conjectures and sumrises. The case law supporting are:

Dhakeswari Cotton Mills Ltd. Vs. CIT 1954 26 ITR 775 SC

In tax proceedings, addition has to be based on evidences. An addition cannot be made on a mere guess work, presumptions, conjuctures and surmises.

Lalchand Bhagat Ambica Ram Vs. CIT (1959) 371TR 288 (SC); Umacharan Shaw &Bros. Vs. CIT (1959) 371TR 271 (SC) Omar Salay Mohamed Sait Vs. CIT (1959) 371TR 151 (SC) Nai Dunia News &Network Pvt Ltd. 171TJ 289 Trib.lndore

AO made adhoc disallowance for expenses holding that "some" vouchers were not verifiable. HELD, no specific defect is pointed out. 'A' has maintained proper books which has not been rejected. B. ACIT vs.Popular Art Palace (P) Ltd (1995) 82 Taxman 274 (JP.) (MAG)

It was held that since the addition is based on investigation on similar investigation conducted in earlier years and no new evidence was on record. Thus addition merely on past history of the case is not justified. C. Waidhan Engineering & Industries (P) Ltd v JCIT (2015) 60 taxmann.com 440 (Jabalpur – Trib.)

It was held that the fact that some expenditure was supported with self IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group made vouchers, could be a reason enough to reject books of account as a whole by Assessing Officer nor disallowances purely on basis of surmises and conjectures and without pointing out any specific defects in vouchers could be permissible and, consequently, addition to income of assessee made on account of such disallowance, was to be deleted. ACIT vs. Ganpati Enterprises Ltd (2013) 32 taxmann.com 262 (Delhi- Trib.) It was held that where Id AO failed to give details of expenses which were found unverifiable and made an ad hoc disallowance, said disallowance was to be deleted. The addition is purely based on conjunctures and surmises and liable to be deleted.

(i) Late Smt. Sudesh Chawla Assessment Year 2000-01 Ground No. 2,3 & 4 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Assessment Years 2001-02 to 2006-07 Ground No. 2,3,4 & 5 (ii) Revenue’s appeal in the case of Late Smt. Sudesh Chawla Assessment Year 2006-07 Ground No.1 (iii) Prem Chawla Assessment Year 2000-01 to 2001-02 Ground No.2,3 & 4 Assessment Year 2002-03 Ground No. 2 & 3 Assessment Year 2003-04 Ground No.2,3 & 4 to Assessment Year 2006-07 (iv) Smt. Sarita Chawla Assessment Year 2005-06 Ground No. 4,5 & 6 Assessment Year 2006-07 GroundNo.2, 3 & 4 15. Since we are taking the basis of the facts of Late Smt. Sudesh Chawla we observe that Ld. A.O on the basis of documents impounded during the course of search and survey carried out in the case of assessee on 21.12.2005 and thereafter on observing that books of accounts on computer were claimed to be lost, most of the expenses were incurred in cash and the assessee have failed to furnish the documentary evidence to prove the genuineness of the purchases made disallowance of 40% of total purchases made for IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group assessment Year 2001-02 to 2006-07, 40% disallowance freight and cartage expenditure for Year 2001-02 to 2006-07 and 1/3rd of disallowance for wages and salary debited in Profit & Loss Account in the following manner:-

A.Y Disallowance Disallowance Disallowance Disallowance out of out of freight out of wages out of salary purchase & Cartage & salary 2000-01 18,60,766 - 38,397 34,370 2001-02 23,46,199 1,39,080 54,193 1,05,347 2002-03 30,90,263 3,10,883 60,083 1,16,046 2003-04 38,49,640 2,10,358 73,556 1,22,787 2004-05 101,87,492 4,48,509 98,058 4,30,290 2005-06 114,88,340 3,97,786 72,147 2,46,215 2006-07 154,78,476 5,43,299 1,41,715 7,44,200

Purchases (Rs.) Freight& Cartage Wages & Salary Salary Expenses (Rs.) (Rs.) eRs.) AY. Total Disallow- Total Disallow- Total Disallow- Total Disallow- ance Expenses ance ance Expenses ance Expenses Expenses @10 % @10 % @ 10 % @ 10% 2000-01 46,51,915 4,65,191 - - 1,15,193 11,519 1,03,110 10,311 58,65,299 5,86,530 3,47,702 34,770 1,62,580 16,258 3,16,043 31,604 2001-02 2002-03 77,25,658 7,72,566 7,77,209 77,721 1,80,250 18,025 3,48,140 34,814 2003-04 96,24,102 9,62,410 5,25,895 52,589 2,20,670 22,067 3,38,362 33,836 ~ 2,54,68,732 25,46,873 11,21,273 1,12,127 2,88,176 28,818 12,90,872 . 1,29,089 2004-05 2005-06 3,62,20,852 36,22,085 9,94,465 99,446 2,16,443 21,644 7,38,646 73,S65 38 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 2006-07 3,86,96,192 38,69,620 13,58,248 1,35,825 4,25,176 42,518 22,32,600 2,23,260 Thus the assessee get following relief in these assessment years.

Particulars Assessment years 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Disallowance 1860766 2346119 3090263 3849640 10187492 11488340 15478476 , by AO Purchases Disallowance 465191 586530 772566 962410 2546873 3622085 3869620 Confirmed .. Relief 1395575 1759589 2317697 2887230 7640619 7866255 11608856 ~ . 139080 310883 . 210358 448509 397786 543299 Disallowance - by AO , ' Freigbt&; 34770 77721 52589 99446 135825 Disallowance - 112127 Cartage Confirmed . 104310 233162 157769 336382 298340 407474 - Relief 38397 54193 60083 73556 98058 72147 141715 Disallowance By AO 11519 16258 18025 22067 28818 21644 42518 Wages & Disallowance "

Salary "Confirmed 26878 37935 42058 51489 69240 50503 99197 Relief . 34370 105347 116046 112787 246215 744200 Disallowance 430290 By AO Disallowance 10311 31604 34814 33836 129089 73865 223260 Salary Expenses Confirmed 27059 73743 81232 78951 301201 172350 520940 Relief IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 17. We observe that the assessee is carrying out the business activities from past many years. Regular return of income were filed even before the conducting of search and survey operations.

For most of the years books of accounts were audited. Similar type of business of manufacturing and sale of industrial solvent and thinners and sale of paints and thinners is carried out in the name of other sister concerns.

The disallowance made by the A.O are not based on any material evidence gathered during the course of search and survey or during the assessment proceedings. It is discernable from the records that the assessee is governed by Central Excise Laws and statutory records as prescribed under such laws are being maintained for making sales and purchase. If the Ld. A.O was not able to lay hands on any documentary evidence to verify the genuineness of the 40 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group purchases, he should have resorted to gather reasonable fair market value of goods used in similar type of industries by calling necessary information, but Ld. A.O had not made any such efforts.

Even Ld. A.O has also not made efforts to know about the gross profit or net profit offered in such type of industries. Ld. A.O has also not referred to any such precedence of making the disallowance of purchase and disallowance of these expenditure. In short it seems that adhoc disallowance of purchase and expenses have been made for want of verification. Hon'ble Apex Court in the case of Dhakeshwari Cotton Mills Ltd V/s CIT (1954) 26 ITR 775 has laid down ratio that “in tax proceedings addition has to be based on evidences. An addition cannot be made on guesswork, presumptions, conjectures and surmises”.

In this case, during the course of survey conducted in the premises of the assessee, excise records were found which disclosed godown sales not disclosed in the books of account of the assessee. The Assessing Officer made addition of undisclosed income of the entire sale proceeds thereof. The Commissioner (Appeals) affirmed the addition b the Appellate 41 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Tribunal found that there was no material toindicate that the assessee made investments outside the books of account to make the alleged sales and held that the entire sale proceeds could hot have been added as undisclosed income of the assessee but the addition could be only of the profits embedded' in the sales. The Tribunal having declined to state a case, the Department applied to the High Court for art order calling for, a reference :

Held, dismissing the application for reference, that the amount of sales could not represent the income of the assessee who had not disclosed the sales, The sides only represented the price received by the seller of the goods; only the realisation of the excess over the cost incurred could form part of the profit included in the consideration for the sales. Since there was no finding to the effect that investment by way of incurring the cost in acquiring the goods which were sold had been made by the assessee and that that investment was also not disclosed, only the excess over the cost incurred could be treated as profit,

We accordingly order so and direct the Ld.A.O to compute the net profit for the above stated assessee(s) @5% of the disclosed turn over and if in case net profit rate is offered on a higher percentage i.e. more than 5% the same should be accepted. Our this decision of applying Net Profit Rate of 5% shall be sufficient to cover up the disallowance of purchase, freight and cartage, wages & salary and salary expenses in dispute before us. We thus delete the disallowance of purchase, freight and cartage, wages and salary and salary expenses challenged before us in the ground mentioned in Para 14. In the result respective grounds are partly allowed as per terms indicated above.

Assessment Year 2001-02 Ground No.6 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 24. Through Ground No.6 assessee has challenged the finding of Ld. CIT(A) confirming the addition for unexplained cash payment of Rs.3,40,000/-. Brief facts relating to this ground are that the Ld. A.O during the course of assessment proceedings u/s 153A of the Act made addition for cash of Rs. 3,40,000/- towards the payment made to Reliance Industries Ltd, Mumbai since the corresponding entries in the cash book cannot be verified. In the first round Ld. CIT(A) deleted the addition but in the set aside proceedings as per the direction of Tribunal, Ld. CIT(A confirmed the action of Ld. A.O’s action making the addition u/s 69 of the Act. Now the assessee is in appeal before the Tribunal.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 29. Now we take Ground No.7 for Assessment Year 2001-02 wherein the assessee has challenged the finding of Ld. CIT(A) confirming the addition of Rs.10,01,000/- made on account of security deposits. Brief facts are that the asssessee received security deposits of Rs.10,01,000/- from M/s. Kanhaya Agencies, Raipur. In the second round Ld. A.O has made addition for unexplained security deposits which has further confirmed by Ld. CIT(A) and now the matter is in Tribunal before us.

30 Ld. Counsel for the assessee submitted that M/s Kanhaya Agencies, Raipur is a dealer of the assessee and regular transactions took place. These deposits were received through account payee cheque and after adjusting the sales effected by this dealer remaining amount was repaid back.

Sales were effected through this dealer on behalf of the assessee.

These facts remain undisputed during both the rounds. Records also shows that sales worth Rs.7,50,644/- was made by the dealer.

Security deposits were received through account payee cheques in the bank account of the assessee and remaining amount after adjusting the cheque is claimed to have paid back. Prime facie we find no reason to doubt the genuineness of the transactions which has been carried out during the regular course of business between the assessee and its dealer since the same have taken place through account payee cheque and are part of the audited financial statements. Thus the impugned addition of Rs. 10,01,000/- deserves to be deleted. Relevant finding of Ld. CIT(A) is set aside and Ground No.7 of assessee’s appeal for Assessment Year 2001-02 is allowed.

Rs.1,50,000/- was adjusted against the goods sold and the balance amount was shown as security deposit in the audited balance sheet. Prime facie these of transaction looks to be genuine and hard to disbelieve it looking to the nature of transactions being part and parcel of business activity. We therefore are of the considered view that the finding of Ld. CIT(A) deserves to set aside and addition of Rs. 3,50,000/- deserves to be deleted. We accordingly order so and allow Ground No.6 raised by the assessee for Assessment Year 2003-04 vide IT (SS)A No.161/Ind/2015,

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 38. Brief facts relating to this issue are that assessee’s son Shri Prem Chawla made various payments on behalf of M/s Anand Organics to various suppliers totaling to Rs.14,50,843/-. Ld. A.O doubted the genuineness of the transaction and made the addition.

Ld. CIT(A) in the second round confirmed the addition mainly on account that Shri Prem Chawla accepted the anomalies in the books of accounts and has surrendered Rs. 9,50,000/- on account of debtors/creditors. Now the assessee is in appeal before the Tribunal.

The assessee and other family relatives are running various proprietaryship and partnership concerns which are carrying out almost similar type of business. When similar type of business is carrying out under various concerns owned by family members, another concern’s transactions and payments on behalf of each other at some point of time for business exigencies is quite normal.

In the instant case some amount of purchases and other expenses of M/s Anand Organics (Prop. Late Smt. Sudesh Chawla) were paid by Shri Prem Chawla from his proprietaryship concern M/s Anand Industries to the following persons:-

Name of supplier to Amount (Rs.) whom payment was made IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Jindal Polyster Limited 7,35,064

Reliance Industries Ltd 2,66,800 Surat Textile Mills Ltd 1,01,216 Malviya Traders 3,200 Fabrication Work 2,789 Om Plywood 4,639 Cermic World 20,000 Pratap Plywood 23,635 Rashi Insulation 7,783 MP Traders 10,000 Mahaveer Plywood 10,000 Ageco Cables 414 Vidya Corrugator 5,303 Shri Metal Containor 60,000 Total Rs.12,50,843

Before us there is no document produced in the form of agriculture land, proof of agriculture activity being carried out and the basis of computing the agriculture income. The assessee is only claiming that agriculture income should be accepted since it has been shown in the regular Income Tax Return filed before conducting of search u/s 132 of the Act. We note that the assessee has shown the agriculture income at Rs. 1,43,800/- for the first time in the Income Tax Return for Assessment Year 2004-05 filed on 31.10.2004 and the same amount has been reflected in the return filed in reply to notice u/s 153A of the Act. But during the course of assessment proceedings assessee has claimed at Rs. 2,03,450/- is the amount earned from agriculture activities. We thus find that there is a mismatch in the claim of the assessee itself. The agriculture income 59 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group shown in the Income Tax return is not matching to the claim made during the assessment proceedings. Assessee has also not provided any documentary evidence to support the claim. We are thus unable to accept the claim of agriculture income of Rs.2,03,450/-.

We therefore in the given facts and circumstances of the case and discussions above delete the addition of Rs.7,00,000/- out of the impugned addition of Rs.9,66,941/- and partly allow assessee’s Ground No.7 sustaining the addition at Rs.2,66,941/-. Thus ground No.No.7 for Assessment Year 2004-05 in IT(SS)A No.162/Ind/2015 is partly allowed.

Few of the loan accounts have been squared off. Ld. CIT(A) erred in confirming the addition merely referring to the statements of Shri Prem Chawla u/s 132(4) of the Act and also without appreciating the fact irregularity found was already surrendered and offered to tax.

Name Purpose Amount ChitraBalwani Loan 1,00,000/- M/s Anand Agencies, Security Deposit 3,00,000/- Gondia) M/s Anand Agencies, Loan 2,00,000/- Raipur M/s Asian Paint House Security Deposit 40,000/- Smt. SaritaChawla Loan 5,10,000/- M/s Star Hardware, Bhopal Security Deposit 1,00,000/- 62 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Vishal Kumar Raj Kumar Loan 2,00,000/- Sonia Devi Loan 2,00,000/- Total 16,50,000/-

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Therefore the addition for these amounts of security deposits Rs.4,40,000/- is directed to be deleted.

No addition was thus called for u/s 68 of the Act for the loan of Rs.5,10,000/- received from Smt. Sarita Chawla. As regards the unsecured loan of Rs.2,00,000/- each received from Shri Vishal Kumar Raj Kumar and Sonia Devi, Rs, 1,00,000/- from Smt. Chitra Balwani and Rs.2,00,000/- from M/s Anand Agencies, Raipur, we find that in the Tax Audit Report complete details of the transactions of loan taken from all the four persons are mentioned.

In the Tax Audit Report dated 5.10.2005 it is stated that the loan of 64 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Rs.2,00,000/- taken from Shri Vishal Kumar Raj Kumar and Sonia Devi have been squared off during the year. Though the loan being received through account payee cheques and the same are being squared off during the year or later repaid cannot be the sole basis to examine the genuineness and creditworthiness of the transaction but when the details of unsecured loan providers have been placed before the Ld. A.O the burden to proof shifts on the side of revenue.

The address of all the cash creditors were available on record but there was no efforts by the revenue to call for information from these cash creditors. We thus looking to the totality of facts find merit in the contention of Ld. Counsel for the assessee and hold that the Ld. A.O was not justified in making addition for unexplained cash credit u/s 68 of the Act at Rs. 7,00,000/- (Rs.

1,00,000/- from Smt. Chitra Balwani, Rs.2,00,000/- from M/s Anand Agencies, Raipur and Rs.2,00,000/- each from Shri Vishal Kumar Raj Kumar and Sonia Devi) ignoring the fact that all the transactions have been taken place through banking channel, address of cash creditors were given in Tax Audit Report, loans were taken before the date of search and the balance sheets were also 65 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group furnished before Ld. A.O and some of the loan were squared off during the year. We thus in view of above discussion set aside the finding of Ld. CIT(A) and delete the addition of Rs.16,50,000/- made on unsecured loans and cash creditors. Ground No.6 of assessee’s appeal for Assessment Year 2005-06 is allowed.

Along with the above remarks the internal auditor has attached some sheets which are closing balance of sundry debtors during the period 1.4.2005 to 31.10.2005. Ld. A.O while examining this report was of the view that if the debtors shown in the alleged report are taken as the basis, sales for the year will be higher than the sales shown by the assessee. He thus computed the suppressed sales at Rs.1,29,54,943/-. Ld. CIT(A) however sustained the addition to 30% of the suppressed sales relying on various judgments including the Hon’ble High Court of Gujarat in the case of CIT V/s President Industries (2002) 258 ITR 654 (Guj.).

Brief facts relating to this issue are that during the course of original assessment proceedings u/s 143(3), the Ld. A.O noticed that the Commercial Tax Department of the State Government had conducted a survey at the factory of M/s Anand Organics and at the residence of Shri Prem Chawla on 15.12.2005. A stock inventory on physical verification of the stock found at the factory was prepared by them as on 15.12.2005 as under :- 74 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group (i) Finished Goods Rs. 14,24,200/-

(ii) Raw material & packing material Rs. 32,30,976/-

Total Rs.46,55,176/-

Whereas as per No.344 of BF 44 impounded during the survey, the stock position of M/s Anand Organics as on 15.12.2005 was recorded as under:-

(i) Finished Goods Rs. 3,65,123/- (ii) Raw material Rs. 9,46,600/- (iii)Packing material Rs. 9,03,614/- Total Rs.22,15,339/-

Thus, there was excess stock found on the date of survey on 15.12.2005 to the extent of Rs.24,39,857/- (Rs.46,55,176 – Rs.22,15,339). The appellant was asked to explain the difference.

But the AO stated that the appellant did not clarify and explain the difference. Therefore, the AO made addition of Rs.24,39,857/- on account of unexplained investment in the excess stock found. The Ld. CIT(A) had deleted the addition. But the Hon’ble ITAT set aside the assessment to the file of the A.O. During set aside proceedings Ld. AO asked the appellant to explain the difference and show 75 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group cause as to why the addition of Rs.24,39,857/- on account of excess stock should not be made. It was submitted that the appellant used to prepare sheet of stock to monitor the activity at the floor level and, therefore, the summary sheet on page 344 of BF 44 was not containing the actual stock. The stock was also kept in tanks, which was not included in the stock summary. It was also contended that the stock taken by the Commercial Tax Department at Rs.46,55,176/- was not taken by scientific approach and based only on visual estimation. It was submitted that as per excise records maintained by the appellant, the closing stock as on 15.12.2005 was Rs.43,89,893.63 which was also monitored by Excise Department. But the Ld. A.O did not accept the submission of the appellant stating that the appellant could not give satisfactory explanation and item wise stock was not tallied.

Therefore, the AO made addition of Rs.24,39,857/- on account of unexplained investment in excess stock found. In the appellate proceedings before Ld. CIT(A) assessee made following submissions:-

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 11.3 In appellate proceedings, the appellant submitted as under :-

"It is submitted that in the original assessment addition of Rs.24, 39, 8571- was made being difference in stock as per the Commercial Tax Department and the books of accounts. In this reference, we submits as under:

Sir, the unit of the assessee is an excisable unit and being monitored by the excise department on day to day basis.

The Summary sheet mentioned by the Assessing Officer as Page No. 344 of BF 44 is not a complete stock. The assessee use to prepare this sheet to monitor the activity at shop floor only. The stock being kept at tanks are not included in the said summary sheet. Further whatever the stock recorded in the summary sheet (at Rs.2215339) is not in excess of the stock as per excise records. Therefore no addition being warranted on this ground.

Stock taken by the Commercial tax, department at Rs. 4655176 is' not being taken by scientific approach. It was only a visual estimation, as is evident from the detailed sheet enclosed. As the assessee deals in the chemicals and solvents, the. stock is being taken. by dip method. The approach of commercial tax department was very casual.

As per the Excise records maintained by the assessee closing stock as on 15.12.2005 the stock was Rs. 4389893.63. The said excise records-are being monitored by the excise department on regular interval. Copy of all the relevant documents are enclosed herewith as Annexure-II.

Sir, from above, it is clear that the assessee shown the correct stock which' is tallied with the excise records also and the stock taken by the Commercial Tax Department is the disputed one. Hence, the actual stock shown by the assessee as per books of accounts may kindly be accepted as correct. " However Ld. CIT was not satisfied and confirmed the addition for excess stock observing as follows:-

11.4 I have carefully considered the submission of the appellant and facts of the IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group case. It is noticed that the Commercial Tax Department had taken proper inventory, item wise and value wise which was duly signed by Shri Prem Chawla, who was looking after the affairs of M/s Anand Organics. Thus, the contention of the appellant that Commercial Tax Department had not properly taken the stock inventory is not found acceptable. The' appellant also could not explain the difference before the Commercial Tax Authorities. They have also impounded certain documents. The appellant also failed to furnish a copy of assessment order made by the Commercial Tax Department after conducting the survey. Page no. 344 of BF 44 was prepared in the normal course of business and was reflecting the position of stock as per books as on 15.12.2005. The appellant also failed to explain the difference with any cogent and un- impeachable evidence and furnished a general explanation. . Since, the appellant failed to satisfactorily explain the excess stock found by the Commercial Tax Department as on 15.12.2005, the AO was justified in making addition of Rs.24,39,857/- on account of unexplained investment in the excess stock found. Hence, the addition ofRs.24,39,8S7/,. is confirmed.

He also submitted that the Commercial Tax Department have not adopted a scientific approach but was merely a visual estimation.

An alternative submission was also made that in any case of IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group investigation in unaccounted stock is explained by the unaccounted sale of Rs.1,29,54,943/-.

Alternate submission of the assessee that the investigation in unaccounted stock is excessively added by unaccounted sales of Rs.1,29,54,943/- and it shows that assessee has no material evidence to rebut the excess stock found by CTD. However the fact also remains that the assessee is registered with Excise Department and is also claimed to have maintained regular books. Lower authorities have not called for such records to find out quantitative stock shown in those records. While adjudicating the issue of suppressed sales we sustained the addition of Rs.6,47,747/- @3% of the alleged suppressed sales amount.

Date Particulars Amount (Rs.) 5.12.2005 Chq No. 000271 10,95,795 20.12.2005 Chq No. 000375 4,00,000/- 27.12.2005 Chq No. 000433 36,372/- Total 15,32,167/-

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 81. In the result Revenue’s appeal for Assessment Year 2006-07 is partly allowed.

1. 1. Security deposits are received 01 deposit from from customers/dealers to whom 17 parties goods are regularly supplied, the (Refer CIT(A) balance is adjusted in succeeding order Pg no.20- years out of sales. 21) 2. The deposits received are in nature of trading liability and not an unsecured loan 8,74,400 2001- Asha Devi, 2,00,000/- 1. The appellant received security 02 Udaypur deposit were received through account payee cheques and deposited in the bank account of the assessee.

2. This account was settled into account of her concern- New Ramesh paints, Udaypur, against the goods sold in F.Y 2001-02 (PB 188) Krishna 2,00,000/- 1. The appellant received security Agencies, Kota deposit were received through account payee cheques and deposited in the bank account of the assessee.

2. This amount was settled against the goods sold them in F.Y 2001- 02, the account statement is on (PB 190-192) 4,00,000/- 2005- Deep Colour & 2,00,000/- 1. The appellant maintains proper 06 Chemicals, books of accounts, which are Kota 50,000/- audited u/s 44AB of the act.

2. The balance is appearing in the Anand balance sheet also. Agencies, 40,000/- 3. The money is advance received Gondia from M/s Anand Agencies who was acting as dealer of Indore region IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Parvinder 5,000/- Date Amount Singh 21.10.2004 50,000 2,95,000/- 01.11.2004 40,000 2006- Anand 1,00,000/- 1. This amount is appearing in the 07 Agencies, list of sundry creditors and not Indore security deposits. Refer PB 601.

2. There is no fresh addition to the balance, Rs.1,00,000 is appearing in both the schedules as on 31st March 2006 on PB 602 and the schedule as on march 2005 on PB 601.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 88. For Assessment Year 2000-01 security deposit of Rs.8,74,400/- has been received from 17 parties who are customers /dealers and as claimed by the Ld. Counsel for the assessee that these security deposits are adjusted against the sales in succeeding years. These deposits are not unsecured loan but trading liability.

The addition made by the Ld. A.O were subsequently confirmed by Ld. CIT(A) on the basis of general observation without placing any material on record to support the addition. We find that these security deposit of Rs.8,74,400/- received from 17 parties were duly reflected in the balance sheet before the conducting of search and in absence of any contrary material find no reason to confirm the addition for unexplained security deposit as in our view these were received as normal part of business. Thus the addition of Rs.8,74,400/- for Assessment Year 2000-01 for unexplained security deposit stands deleted. Ground No.5 for Assessment Year 2000-01 is allowed.

(i) Deep Colour& Chemicals, Kota Rs.2,00,000/- (ii) Anand Agencies, Gondia Rs. 90,000/- (iii) Parvinder Singh Rs. 5,000/-

This amount is not a fresh addition during the year and is the brought forward balance from Assessment Year 2005-06. Therefore 90 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group no addition was called for this amount of Rs.1,00,000/- and the same deserves to be deleted. Ground No.6 for Assessment Year 2006-07 is allowed.

Brief facts are that during the course of assessment proceedings Ld. A.O while examining capital accounts attached with the balance sheet of the partnership concern come across certain additions made in the capital account. Assessee made necessary submissions but the Ld. A.O in the second round again made the additions. In the appeal before Ld.CIT(A) assessee gave part relief. Now the assessee is in appeal before the Tribunal.

When the matter came up before Ld. CIT(A) he has also confirmed the action of Ld. A.O giving the finding that assessee has not shown any agriculture income in the past and subsequent year and looking to the fact that the assessee is running sole proprietoryship 93 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group concern there remains hardly any time to do agriculture activity and thus claim was rejected. Now the assessee is in appeal before the Tribunal.

99.Per contra Ld. Departmental Representative vehemently argued supporting the orders of both the lower authorities.

Out of this purchase consideration Rs.99,000/- was claimed by the assessee to have been withdrawn in cash from M/s Anand Industries is in dispute. We have gone through the paper book page 503 of the assessee’s capital account in the books of M/s Anand Industries. On perusal of the capital account we find that after the cash withdrawal totaling to Rs.25,000/- during April, 2004 assessee deposited Rs.90,000/-. Thereafter from May 2004 to till 6th July 2004 total cash withdrawal is Rs.57,000/-. If we fairly estimate the drawings at Rs. 17000/- for household purposes assessee would have left over with Rs.40,000/- only.To this extend the claim of the assessee can be accepted. We accordingly partly allow Ground No.6 of the assessee’s appeal and confirm the addition of Rs.59,000/- only. 97 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 106. Now we take up Ground No.5 for Assessment Year 2006-07 during which the assessee has challenged the finding of Ld. CIT(A) confirming the addition of Rs.7,80,000/- made on account of unexplained unsecured loan/sundry creditors. Brief facts relating to this ground are that during the course of assessment proceedings Ld. A.O asked the assessee to explain the unsecured loan/sundry creditors totaling to Rs.7,80,000/-. Assessee’s contention is that these are the credits in the regular course of business towards advance for goods/security deposit and other current account transactions. Ld. A.O was not satisfied he made addition for Rs.7,80,000/-. Assessee filed appeal before Ld. CIT(A) but failed to succeed. Now the assessee is in appeal before the Tribunal.

Name of Amount Date Chq. Submissions dealer number Ganpati 30,000 05,01,06 740903 1. The assessee is Traders 60,000 07.01.06 740906 maintaining regular 50,000 23,01,06 740913 books of accounts, 2,00,000 30.01.06 185506 which are also audited u/s 44AB of the Act.

2. The amount is received from the regular dealer, who is regularly purchasing from assessee.

3. The sales to Ganpati Traders amounting to Rs.11,67,344 were made in A.Y 2006-07 4. The payment 99 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group received against sale were Rs.11,42,000 and the balance Rs.25,344/- appearing in list of Debtors on PB 564.

2. The amount is received from the regular dealer, who is regularily purchasing from assessee.

3. The sales to S.M. Enterprises amounting to Rs.5,55,839 were made in A.Y 2006-07 4. The payment received against sale were Rs.5,55,839 5. The total security 100 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group deposit amounting to Rs.2,50,000 is shown separetly under Annexure C Deposits on PB 561 6. The ledger account of the party showing the receipt of security deposit, as per customary policy through cheque are on PB 603. Shakti 50,000 18.05.05 900228 1. The total security Traders, 50,000 18.05.05 900229 deposit amounting to Bhopal Rs.1,00,000 is shown separately under Annexure C. Deposits on PB 561.

2. The ledger account of the party showing the receipt of security deposit, as per customary policy through cheque are on PB.605 Pari 25,000 06.04.05’ 111146 1. The total security Traders, 25,000 06.04.05 111141 deposit amounting to Lucknow Rs.50,000 is shown separately under Annexure C. Deposits on PB 561.

2. The amount is received from the regular dealer, who is regularly purchasing from assessee.

Ground No.5 raised by the assessee for Assessment Year 2005-06 is allowed. 103 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 111. Now we will take up last effective ground No.7 of Shri Prem Chawla through which the assessee challenged the finding of Ld. CIT(A) confirming the addition of Rs.3,34,500/- on account of cash found during the course of search. Brief facts relating to this ground are that cash of Rs.3,34,500/- was found in the locker in the name of Smt. Sarita Chawla. In the statement given during the course of search Smt. Sarita Chawla accepted that she is the owner of the locker and she also gave bifurcation of source of cash found in the locker. However during the course of assessment proceedings Ld. A.O on the basis of statement of the assessee given on behalf of his wife Smt. Sarita Chawla, surrendered Rs.3,50,000/- towards income not disclosed in the return of income, Ld. A.O made the addition in the hands of the assessee.

Assessee failed to get any relief from Ld. CIT(A). Now the assessee is in appeal before the Tribunal.

She could not reply for the remaining amount of Rs.83,500/-. Ld. Counsel for the assessee also submitted that the impugned addition cannot be made in the hands of the husband when the locker was in the name of wife who has assessed to tax and has also subjected to assessment proceedings u/s 153A of the Act.

IT(SS) 164 to 169/Ind/2015 in the case of Smt. Sarita Chawla.

Ld. CIT(A) also confirmed the addition after giving a general finding.

She is well versed with computer programming work. She has been disclosing this income in the return filed u/s 139 of the Act for Assessment Years 2000-01 to 2003-04. No incriminating material was found during the course of search. The addition made by the Ld. A.O is purely on estimation and guess work. The assessments are framed u/s 153C r.w.s. 143(3) of the Act. No reference has been made to any incriminating material which could show that the assessee has not disclosed correct income from computer programming work. In these given facts and circumstances of the case the addition made on estimated basis without considering the fact that the assessee is a qualified Diploma holder and possessed professional expertise to earn such income, is not justified and thus deserves to be deleted. We accordingly allow Ground No.2 in the 109 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group case of Smt. Sarita Chawla in IT(SS) A No.164 to 167 and delete the addition of Rs.34,800/-, Rs.36,600/-, Rs.44,300/- and Rs. 34,650/- for Assessment Years 2000-01 to 2003-04 respectively.

Ld. A.O made this addition on being not satisfied with the unexplained opening capital shown in the balance sheet. Ld. CIT(A) confirmed the addition. Now the assessee is in appeal before tribunal.

This advance was given out of the opening balance as per regular returns filed by the assessee prior to search.

There is a opening capital balance as on 1.4.2000 which the assessee has shown in the Income Tax Return filed. Such opening balance are claimed to be part of accumulated savings from past.

As the assessee could not justify the basis of opening capital she was subjected to addition. We however are of the considered view that looking to the fact the assessee being married should have received gifts from family members and is filing Income Tax Returns regularly, the accumulation of past saving to the extent of Rs.82,350/- should not have been doubted. The assessee being a professional Diploma holder, savings from petty income earned from profession and other gifts in cash received on ceremonial occasions seems to have been applied to fetch the income by way of giving sundry advances for earning interest income. We therefore delete the addition of Rs.82,350/- and allow Ground No.3 raised for Assessment Year 2000-01.

Atul Solvo Chem at Rs. 1,99,900/-. During the first round of assessment proceedings assessee was asked to explain the investment in M/s Atul Solvo Chem at Rs.1,99,900/-. Assessee failed to satisfy the Ld. A.O. Ld. A.O made addition of Rs.1,99,900/-. In the second round also the submissions of the assessee were not found satisfactory by the Ld. A.O and again the addition was made. Assessee could not get any relief from Ld. CIT(A). Now the assessee is in appeal before the Tribunal.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 129. We have heard rival contentions and perused the records placed before us. Through Ground No.3 raised for addition of Rs.1,99,900/- for unexplained investment by the assessee in the firm M/s Atul Solvo Chem is in challenge. It is an undisputed fact that M/s Atul Solvo Chem is a partnership firm which is run by the family members of the assessee namely her husband, Shri Prem Chawla and mother in law Late Smt. Sudesh Chawla. M/s Atul Solvo Chem is regularly assessed to tax. The assessee made payments through account payee cheques to the two suppliers of M/s. Atul Solvo Chem namely M/s Mahindra Trading Co and M/s Neptune, Indore. Ledger account of Smt. Sarita Chawla in the books of M/s Atul Solvo Chem placed at page 188 of paper book shows the relevant transactions. The evidence placed before us is sufficient to explain the investment made in M/s AtulSolvo Chem.

We thus find no justification in the addition of Rs.1,99,900/- made by the Ld. A.O which deserves to be deleted. We accordingly order so and set aside the finding of Ld. CIT(A) confirming the addition of Rs.1,99,900/- and allow Ground No.3 raised for Assessment Year 2003-04. 113 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 130. Now we take up Ground No.2 for Assessment Year 2004-05 relating to disallowance of retail trade expenses. Ld. A.O made addition by way of estimating income at Rs. 1,75,000/- as against Rs.1,26,360/- shown by the assessee. Addition of Rs.50,640/- was made by the Ld. A.O in the first round, this addition was deleted by Ld. CIT(A). In the set aside proceedings Ld. A.O added the same suspecting it to be undisclosed income of Shri Prem Chawla (assessee’s husband). Ld. CIT(A) again gave relief of Rs.2000/- on account of arithmetic error and confirmed the addition for Rs.48,640/-. Now the assessee is in appeal before the Tribunal.

IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group 133. We have heard rival contentions and perused the records placed before us. Addition of Rs.48,640/- has been challenged by the assessee through Ground No.2 for Assessment Year 2004-05 for alleged estimation of retail trade expenses at Rs.1,26,360/-. The Ld. A.O estimated income at Rs.1,75,000/-, addition of Rs.50,640/- was made and Ld. CIT(A) sustained it to Rs.48,640/-.

Name Amount Remarks 1. The Shobha Mohabe 15,000 loans are taken by the Madhu Mohabe 15,000 assessee in her personal capacity is not a business loan. Prabha Mohabe 15,000 2. These loans were returned in the Sangeeta Mohabe 15,000 subsequent years. 3. In the Balance Sheet of the assessee (PAPER BOOK-127), these amounts are duly reflected. 60,000/-

1. 1. In Creditors 1,27,500 the Balance sheet of the assessee (Annexed at PAPER BOOK-127), this amount is shown as Sundry Creditors.

2. This amount comprises of Rs.42,500/- on account of unpaid purchases.

3. That the assessee is not required to maintain books of accounts u/s 44AA Total 1,87,500

A.Y Addition CIT(A) Submission PB ref remarks 2005- 1,80,000 Limit The M/s Anand - 06 utilized appellant Coatings is a from SBI has taken separate overdraft, accounting which entity from the should proprietor. The appear in overdraft was the liability taken in side of the personal balance capacity of the sheet assessee and instead of introduced as a capital capital. account 2,72,000 Paid from The There is a debit Assessee’s Anand appellant balance in the ledger Organics, a failed to name of assessee account in proprietary furnish any in the books of the books of concern of cogent Anand Orgnics. M/s Anand her evidence in Organics is husband. this regard. annexed at PAPER BOOK-160. The receipt was through banking channel. 4,21,000 Withdrawal The source The amount was Capital from Sarita of such introduced by Account of Chawla’s funds in the way of account M/s Anand personal personal payee cheques Coatings for account account of from the relevant and the assessee assessee’s assessment deposited is personal account year in Anand unexplained which is evident annexed at Coatings. . from the Capital PAPER of M/s Anand BOOK-158- 124 IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group Coatings. 159. 2006- 5,31,356 Income Accepted The assessee Return filed 07 from sale of the received this u/s 139 shares submission amount on annexed at introduced and deleted account of sale PB187. in Anand the addition of her shares, Computatio Coatings and then n of income introduced as showing capital. The long capital gains term capital is annexed gains arising of at PB-188. such sale is also reflected in the return filed by the assessee.

The alleged addition of Rs.8,72,000/- are of those transactions which are entered through banking channel. All these details are IT(SS)ANos.158 to 175/Ind/2015 && others Chawla Group available before the revenue authorities. No efforts were made to verify the genuineness of the claim made by the assessee. The addition has been made by the Ld. A.O on summary basis even when the assessee passed through the assessment proceedings twice. Even Ld. CIT(A) has not made any efforts to examine the transactions. In these given facts and circumstances of the case we find no reason to disbelieve the claim made by the assessee which are through banking channel, through her own saving bank account and some transactions through her huband’s proprietory concern which is also a part of appeal before us. We thus direct the revenue authorities to delete the addition of Rs.8,73,364/-. Thus the finding of Ld. CIT(A) is set aside and Ground No.3 of the assessee for Assessment Year 2005-06 is allowed.

Order was pronounced in the open court on 26 .11.2020.