HIGH VOIT ELECTICALS P LTD ,MUMBAI vs. INCOME TAX OFFICER WARD -1 , PALGHAR

2.1 In appeal before the Commissioner of Income Tax (Appeals), the In appeal before the Commissioner of Income Tax (Appeals), the In appeal before the Commissioner of Income Tax (Appeals), the assessee contended that it had originally been allotted PAN assessee contended that it had originally been assessee contended that it had originally been “AABFH1723L” in the status of a partnership firm, although it was “AABFH1723L” in the status of a partnership firm, although it was “AABFH1723L” in the status of a partnership firm, although it was in fact a company. The fourth letter in this PAN denotes the status The fourth letter in this PAN denotes the status The fourth letter in this PAN denotes the status of the assessee i.e. F stand for Firm. of the assessee i.e. F stand for Firm. A fresh PAN “AABCH7678H” in A fresh PAN “AABCH7678H” in the correct status of company was later the correct status of company was later allotted. The assessee allotted. The assessee claimed to have requested cancellation of the earlier PAN; however, claimed to have requested cancellation of the earlier PAN; however, claimed to have requested cancellation of the earlier PAN; however, the old PAN continued to subsist. According to the assessee, certain the old PAN continued to subsist. According to the assessee, certain the old PAN continued to subsist. According to the assessee, certain information—such such such as as as contract contract contract receipts receipts receipts and and and credit credit credit card card card transactions—was erroneously reflected aga was erroneously reflected against the old PAN in inst the old PAN in departmental records, although these very items had already been departmental records, although these very items had already been departmental records, although these very items had already been accounted for and offered to tax in the return filed under the new accounted for and offered to tax in the return filed under the new accounted for and offered to tax in the return filed under the new PAN.

2.2 The Ld. CIT(A) called for a remand report from the Assessing he Ld. CIT(A) called for a remand report from the Assessing he Ld. CIT(A) called for a remand report from the Assessing Officer. During remand proceeding During remand proceedings, the assessee filed all the he assessee filed all the documents before the Assessing Officer to justify its claim. The documents before the Assessing Officer to justify its claim. T documents before the Assessing Officer to justify its claim. T Assessing Officer, in remand proceedings, accepted the fact of Assessing Officer, in remand proceedings, accepted the fact of Assessing Officer, in remand proceedings, accepted the fact of double PAN allotment and status mismatch but did not accept the double PAN allotment and status mismatch but did not accept the double PAN allotment and status mismatch but did not accept the assessee’s explanation on the grou assessee’s explanation on the ground that the said documents were documents were not filed during the course of original proceedings before the AO not filed during the course of original proceedings before the AO not filed during the course of original proceedings before the AO and that the assessee continued to use both PANs in commercial and that the assessee continued to use both PANs in commercial and that the assessee continued to use both PANs in commercial dealings. Though, the Assessing Officer verified , the Assessing Officer verified all the details but all the details but the Ld. CIT(A) rejected th the Ld. CIT(A) rejected the contention of the assessee and upheld e contention of the assessee and upheld the estimation of the 8% addition on the service tax charges and the estimation of the 8% addition on the service tax charges and the estimation of the 8% addition on the service tax charges and contract receipt and also upheld the disallowance of credit card contract receipt and also upheld the disallowance of credit card contract receipt and also upheld the disallowance of credit card expenses. The relevant finding of the Ld. CIT(A) is reproduced as expenses. The relevant finding of the Ld. CIT(A) is reproduced as expenses. The relevant finding of the Ld. CIT(A) is reproduced as under:

“5.1 Grounds 5.1 Grounds of the appeal are directed against the addition of Rs. of the appeal are directed against the addition of Rs. 17,78,645/- that was determined at 8% of its turnover reported in the that was determined at 8% of its turnover reported in the that was determined at 8% of its turnover reported in the Service Service Service Tax Tax Tax Return Return Return amounting amounting amounting to to to Rs.1,53,68,205/- Rs.1,53,68,205/ Rs.1,53,68,205/ and Rs.68,64,865/ Rs.68,64,865/- on account of gross receipts from contract work on account of gross receipts from contract work totaling to Rs. totaling to Rs.2,22,33,070/- by the AO. The appellant has contended by the AO. The appellant has contended that the assessee has never received the notice for Re that the assessee has never received the notice for Re that the assessee has never received the notice for Re-opening u/s 148 of the Act, 1961 and service of order was dated 30/12/2021. 148 of the Act, 1961 and service of order was dated 30/12/2021. 148 of the Act, 1961 and service of order was dated 30/12/2021. Further, the learned officer has stated in his order that the assessee Further, the learned officer has stated in his order that the assessee Further, the learned officer has stated in his order that the assessee is company, however on PAN it belongs to Partnership Firm which is s company, however on PAN it belongs to Partnership Firm which is s company, however on PAN it belongs to Partnership Firm which is different in nature and it has already filed letter for cancellation of different in nature and it has already filed letter for cancellation of different in nature and it has already filed letter for cancellation of the PAN and the same has already been furnished to concerned the PAN and the same has already been furnished to concerned the PAN and the same has already been furnished to concerned jurisdiction officer on dated 18/10/2012. The appellant h jurisdiction officer on dated 18/10/2012. The appellant h jurisdiction officer on dated 18/10/2012. The appellant has further contended that the learned officer erred by stating in the order that contended that the learned officer erred by stating in the order that contended that the learned officer erred by stating in the order that due to absence of documentary evidence total income has been due to absence of documentary evidence total income has been due to absence of documentary evidence total income has been determined @ 8%, however the learned officer has never rejected the determined @ 8%, however the learned officer has never rejected the determined @ 8%, however the learned officer has never rejected the Books of Accounts, consideration of income on Books of Accounts, consideration of income on ad-hoc basis is bad in hoc basis is bad in law. The appellant has claimed that the learned officer has erred by law. The appellant has claimed that the learned officer has erred by law. The appellant has claimed that the learned officer has erred by passing an order as it does not comply with basic condition i.e. passing an order as it does not comply with basic condition i.e. passing an order as it does not comply with basic condition i.e. opportunity of being heard. The learned officer indulged in opportunity of being heard. The learned officer indulged in opportunity of being heard. The learned officer indulged in speculation, surmises and conjectures b speculation, surmises and conjectures by way considering amount y way considering amount which is Rs. 1,53,68,205/ which is Rs. 1,53,68,205/- as per Service Tax Return and Rs. as per Service Tax Return and Rs. 68,64,865/- receipt in the form of contract receipts considering total receipt in the form of contract receipts considering total receipt in the form of contract receipts considering total income @ 8% which is Rs. 17,78,645/ income @ 8% which is Rs. 17,78,645/- as income of the assessee. as income of the assessee. 5.2 During the assessment proceedin 5.2 During the assessment proceedings, the AO has found that the gs, the AO has found that the appellant has not file its return of income for the A.Y 2013 appellant has not file its return of income for the A.Y 2013 appellant has not file its return of income for the A.Y 2013-14. Further, a notice u/s 148 was issued after prior approval of the Further, a notice u/s 148 was issued after prior approval of the Further, a notice u/s 148 was issued after prior approval of the competent authority on 18/03/2020 after recording the reasons to competent authority on 18/03/2020 after recording the reasons to competent authority on 18/03/2020 after recording the reasons to file return of income for the r file return of income for the relevant assessment year within 30 days elevant assessment year within 30 days from the service of this notice. As per the information available with from the service of this notice. As per the information available with from the service of this notice. As per the information available with the AO, the information received from the ITS details reflects credit the AO, the information received from the ITS details reflects credit the AO, the information received from the ITS details reflects credit card card payment payment of of Rs.3,62,292/ Rs.3,62,292/-, , undisclosed undisclosed turnover turnover of of Rs.1,53,68,205/ Rs.1,53,68,205/- which has been reported the Service Tax Return h has been reported the Service Tax Return and receipt of Rs.68,64,865/ and receipt of Rs.68,64,865/- in the form of contract receipts during in the form of contract receipts during the FY 2012-13. Since, in this case no return of income has been filed 13. Since, in this case no return of income has been filed 13. Since, in this case no return of income has been filed for the year under consideration accordingly, no assessment was for the year under consideration accordingly, no assessment was for the year under consideration accordingly, no assessment was made and the only requirement to initiate proceedings u/s.147 of the only requirement to initiate proceedings u/s.147 of the only requirement to initiate proceedings u/s.147 of Income Tax Act, 1961 is the reason to believe, which was recorded. Income Tax Act, 1961 is the reason to believe, which was recorded. Income Tax Act, 1961 is the reason to believe, which was recorded. 5.3 During the assessment proceedings, the AO has issued multiple 5.3 During the assessment proceedings, the AO has issued multiple 5.3 During the assessment proceedings, the AO has issued multiple notices to the appellant which clearly shows that several notices to the appellant which clearly shows that several notices to the appellant which clearly shows that several opportunities to submit its response was provided to the appellant by ities to submit its response was provided to the appellant by ities to submit its response was provided to the appellant by the AO. However, no compliance from the appellant was made in the AO. However, no compliance from the appellant was made in the AO. However, no compliance from the appellant was made in response to the notices u/s 148 & 142(1) of the IT Act during the response to the notices u/s 148 & 142(1) of the IT Act during the response to the notices u/s 148 & 142(1) of the IT Act during the entire Scrutiny proceeding despite several repeated request made entire Scrutiny proceeding despite several repeated request made entire Scrutiny proceeding despite several repeated request made and providing numerous opportunities to make compliances. Hence, nd providing numerous opportunities to make compliances. Hence, nd providing numerous opportunities to make compliances. Hence, the claim of the appellant that the AO has violated the principle of the claim of the appellant that the AO has violated the principle of the claim of the appellant that the AO has violated the principle of natural justice by not providing opportunity of being heard is natural justice by not providing opportunity of being heard is natural justice by not providing opportunity of being heard is factually incorrect and unacceptable. Since the appellant re factually incorrect and unacceptable. Since the appellant re factually incorrect and unacceptable. Since the appellant remained non-complied during the whole scrutiny proceedings, the AO was left complied during the whole scrutiny proceedings, the AO was left complied during the whole scrutiny proceedings, the AO was left with no option but to pass the best judgment assessment order with no option but to pass the best judgment assessment order with no option but to pass the best judgment assessment order u/s144 of the Income Tax Act 1961 in the case of the appellant for u/s144 of the Income Tax Act 1961 in the case of the appellant for u/s144 of the Income Tax Act 1961 in the case of the appellant for the assessment year 2013 the assessment year 2013-14. In this regard, ex-part parte show cause letter was sent to the appellant by the AO. However, again no reply letter was sent to the appellant by the AO. However, again no reply letter was sent to the appellant by the AO. However, again no reply was made by the appellant 5.4 It was clear that the appellant has was made by the appellant 5.4 It was clear that the appellant has was made by the appellant 5.4 It was clear that the appellant has neither filed IT return of income for the relevant assessment year i.e neither filed IT return of income for the relevant assessment year i.e neither filed IT return of income for the relevant assessment year i.e 2013-14 u/s 139 of the Act nor in resp 14 u/s 139 of the Act nor in response to the notice u/s 148 of onse to the notice u/s 148 of the IT Act. The AO was in the possession of the information that the the IT Act. The AO was in the possession of the information that the the IT Act. The AO was in the possession of the information that the appellant had reported turnover of Rs.1,53,68,205 in the Service Tax appellant had reported turnover of Rs.1,53,68,205 in the Service Tax appellant had reported turnover of Rs.1,53,68,205 in the Service Tax Return and also receipts of Rs.68,64,865/ Return and also receipts of Rs.68,64,865/- in the form of contract in the form of contract receipts during the F receipts during the FY 2012-13, totaling to Rs.2,22,33,070/ 13, totaling to Rs.2,22,33,070/-. In course of assessment proceedings, it was asked to furnish the course of assessment proceedings, it was asked to furnish the course of assessment proceedings, it was asked to furnish the requisite details w.r.t. contractual receipts and income earned requisite details w.r.t. contractual receipts and income earned requisite details w.r.t. contractual receipts and income earned thereon during the year under consideration and copy of Service tax thereon during the year under consideration and copy of Service tax thereon during the year under consideration and copy of Service tax return filed for t return filed for the period under consideration. However, neither any he period under consideration. However, neither any submission nor any written reply was submitted by the appellant submission nor any written reply was submitted by the appellant submission nor any written reply was submitted by the appellant before the AO. In the absence of the documentary evidence, it was before the AO. In the absence of the documentary evidence, it was before the AO. In the absence of the documentary evidence, it was not possible for the AO to verify the correctness of the accounts. not possible for the AO to verify the correctness of the accounts. not possible for the AO to verify the correctness of the accounts. Consequently, the AO has taken the liberal view and allowed all the ently, the AO has taken the liberal view and allowed all the ently, the AO has taken the liberal view and allowed all the possible expenses before reaching at a conclusion with respect to possible expenses before reaching at a conclusion with respect to possible expenses before reaching at a conclusion with respect to income of the appellant. Accordingly, the AO has estimated and income of the appellant. Accordingly, the AO has estimated and income of the appellant. Accordingly, the AO has estimated and assessed the total income of the appellant for A.Y.2013 assessed the total income of the appellant for A.Y.2013 assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs. 17,78,645/ determined at Rs. 17,78,645/- which was 8% of its turnover reported which was 8% of its turnover reported in the Service Tax Return amounting to Rs.1,53,68,205/ in the Service Tax Return amounting to Rs.1,53,68,205/ in the Service Tax Return amounting to Rs.1,53,68,205/- and Rs.68,64,865/ Rs.68,64,865/- on account of gross receipts from contract work on account of gross receipts from contract work totalling to Rs.2,22,33,070/ to Rs.2,22,33,070/- under best judgment assessment u/ under best judgment assessment u/s 144 of the Income Tax Act, 1961. ME TAX DEPARTME 144 of the Income Tax Act, 1961. ME TAX DEPARTME

5.5 It is also relevant to mention that a Remand Report in the case of 5.5 It is also relevant to mention that a Remand Report in the case of 5.5 It is also relevant to mention that a Remand Report in the case of the appellant for AY 2013 the appellant for AY 2013-14 was received from the AO. As per the 14 was received from the AO. As per the AO, the circumstances referred to in Rule 46A for producing AO, the circumstances referred to in Rule 46A for producing AO, the circumstances referred to in Rule 46A for producing additional evidence have not been fulfilled in the instant case, hence al evidence have not been fulfilled in the instant case, hence al evidence have not been fulfilled in the instant case, hence additional evidence should not be admitted. With respect to allotment additional evidence should not be admitted. With respect to allotment additional evidence should not be admitted. With respect to allotment of two PANs, the AO has stated that the appellant's stand regarding of two PANs, the AO has stated that the appellant's stand regarding of two PANs, the AO has stated that the appellant's stand regarding double allotment of PAN and status mismatch is correct. double allotment of PAN and status mismatch is correct. double allotment of PAN and status mismatch is correct. However, this does not absolve the assessee from its mistake of not changing this does not absolve the assessee from its mistake of not changing this does not absolve the assessee from its mistake of not changing the PAN - AABFH1723L with the third parties from whom, the said AABFH1723L with the third parties from whom, the said AABFH1723L with the third parties from whom, the said information was received and from whom the assessee is having information was received and from whom the assessee is having information was received and from whom the assessee is having regular financial transactions. As per the AO, Prima regular financial transactions. As per the AO, Prima regular financial transactions. As per the AO, Prima facie, the mistake does not seem inadvertent and it looks like an avenue to mistake does not seem inadvertent and it looks like an avenue to mistake does not seem inadvertent and it looks like an avenue to suppress its receipts with the PAN AABCH7678H. Therefore, the suppress its receipts with the PAN AABCH7678H. Therefore, the suppress its receipts with the PAN AABCH7678H. Therefore, the assessee's contention that the income has already been offered assessee's contention that the income has already been offered assessee's contention that the income has already been offered under the PAN under the PAN - AABCH7678H does not hold any water and AABCH7678H does not hold any water and the assessee has not produced any verifiable evidence to substantiate assessee has not produced any verifiable evidence to substantiate assessee has not produced any verifiable evidence to substantiate this claim. 5.5.1 Further, the AO has found that during the original assessment 5.5.1 Further, the AO has found that during the original assessment 5.5.1 Further, the AO has found that during the original assessment proceedings for A.Y.2013 proceedings for A.Y.2013-14 u/s. 143(3) of the Act under the PAN 14 u/s. 143(3) of the Act under the PAN AABCH7678H, the assessee never produced AABCH7678H, the assessee never produced this information this information (receipts on the PAN (receipts on the PAN - AABFH1723L) before the AO by his own AABFH1723L) before the AO by his own accord. It was only after the system captured receipts on the PAN accord. It was only after the system captured receipts on the PAN accord. It was only after the system captured receipts on the PAN - AABFH1723L that the department came to know about these receipts AABFH1723L that the department came to know about these receipts AABFH1723L that the department came to know about these receipts and thereafter the case was selected for re and thereafter the case was selected for re-assessment u/s. 147 of sessment u/s. 147 of the Act. What is even more alarming in the instant case was the fact the Act. What is even more alarming in the instant case was the fact the Act. What is even more alarming in the instant case was the fact that the assessee did not make any compliance nor put this stand that the assessee did not make any compliance nor put this stand that the assessee did not make any compliance nor put this stand during the course of faceless proceedings for re during the course of faceless proceedings for re-assessment. So, the assessment. So, the AO thereby notes that the assess AO thereby notes that the assessee deliberately did not allow the AO ee deliberately did not allow the AO to verify his stand (regarding offering the income under the PAN to verify his stand (regarding offering the income under the PAN to verify his stand (regarding offering the income under the PAN AABFH1723L while filing return under the PAN AABFH1723L while filing return under the PAN - AABCH7678H) during both the assessment and the re during both the assessment and the re- assessment proceedings. assessment proceedings. And once the assessment proceedi And once the assessment proceedings have been completed, the ngs have been completed, the assessee puts this stand and that too unaccompanied by any cogent assessee puts this stand and that too unaccompanied by any cogent assessee puts this stand and that too unaccompanied by any cogent or verifiable proof. Therefore, keeping in light the above facts, the AO or verifiable proof. Therefore, keeping in light the above facts, the AO or verifiable proof. Therefore, keeping in light the above facts, the AO was not satisfied with the assessee's explanation/stand produced so was not satisfied with the assessee's explanation/stand produced so was not satisfied with the assessee's explanation/stand produced so far. 5.5.2 On verifi 5.5.2 On verification of case records, the AO has noticed that the cation of case records, the AO has noticed that the assessee has filed its return of income on 27/08/2013 with the PAN assessee has filed its return of income on 27/08/2013 with the PAN assessee has filed its return of income on 27/08/2013 with the PAN AABCH7678H showing total income of Rs.2,23,68,227/ AABCH7678H showing total income of Rs.2,23,68,227/ AABCH7678H showing total income of Rs.2,23,68,227/-. The case was selected for scrutiny under manual selection and assessment was selected for scrutiny under manual selection and assessment was selected for scrutiny under manual selection and assessment was completed u/s. 143(3) on 29/02/2016 assessing total income at ed u/s. 143(3) on 29/02/2016 assessing total income at ed u/s. 143(3) on 29/02/2016 assessing total income at Rs.2,35,31,730/ Rs.2,35,31,730/-. Thereafter, new information was received on . Thereafter, new information was received on department's system for the PAN department's system for the PAN - AABFH1723L. Therefore, the case AABFH1723L. Therefore, the case was selected for re was selected for re-assessment by recording reasons and issuing assessment by recording reasons and issuing notice u/s. 148 of the Act. Thereafter, the re s. 148 of the Act. Thereafter, the re-assessment was assessment was completed ex- -parte as there was no compliance from the assessee. parte as there was no compliance from the assessee. The AO estimated profit @ 8% from the undisclosed turnover and The AO estimated profit @ 8% from the undisclosed turnover and The AO estimated profit @ 8% from the undisclosed turnover and treated the credit card payments as unexplained expenditure u/s. treated the credit card payments as unexplained expenditure u/s. treated the credit card payments as unexplained expenditure u/s. 69C of the Act. The AO during the re Act. The AO during the re-assessment proceedings has assessment proceedings has added income from these receipts and has assessed accordingly. added income from these receipts and has assessed accordingly. added income from these receipts and has assessed accordingly. Further, the AO has stated that he cannot empirically verify from the Further, the AO has stated that he cannot empirically verify from the Further, the AO has stated that he cannot empirically verify from the return of income whether these receipts have been offered while filin return of income whether these receipts have been offered while filin return of income whether these receipts have been offered while filing return of income with PAN return of income with PAN - AABCH7678H. 5.5.3 Other relevant details/information for the instant case: 5.5.3 Other relevant details/information for the instant case: 5.5.3 Other relevant details/information for the instant case: a. The assessee is obviously using both the PANs for its transactions a. The assessee is obviously using both the PANs for its transactions a. The assessee is obviously using both the PANs for its transactions because than only, the department has received information from because than only, the department has received information from because than only, the department has received information from third parties whe third parties where the other PAN was used by the assessee. re the other PAN was used by the assessee. b. Further, the GST department has been intimated of this fact and b. Further, the GST department has been intimated of this fact and b. Further, the GST department has been intimated of this fact and their reply is awaited. their reply is awaited. c. The assessee is liable for penalty u/s. 272B of the Act and the c. The assessee is liable for penalty u/s. 272B of the Act and the c. The assessee is liable for penalty u/s. 272B of the Act and the penal proceedings are being initiated and will be penal proceedings are being initiated and will be uploaded on ITBA uploaded on ITBA Portal. 5.6 I have gone through the materialistic facts of the case and 5.6 I have gone through the materialistic facts of the case and 5.6 I have gone through the materialistic facts of the case and contention of the appellant. During the course of appellate contention of the appellant. During the course of appellate contention of the appellant. During the course of appellate proceedings, the appellant has furnished the statement of facts and proceedings, the appellant has furnished the statement of facts and proceedings, the appellant has furnished the statement of facts and form no. 35 along with his submission w form no. 35 along with his submission which has been taken on hich has been taken on record, remand report, etc. It is established that the appellant's stand record, remand report, etc. It is established that the appellant's stand record, remand report, etc. It is established that the appellant's stand regarding double allotment of PAN and status mismatch is correct. regarding double allotment of PAN and status mismatch is correct. regarding double allotment of PAN and status mismatch is correct. However, the appellant has not intentionally changed the PAN However, the appellant has not intentionally changed the PAN However, the appellant has not intentionally changed the PAN - AABFH1723L with the third parti AABFH1723L with the third parties from whom, the said information es from whom, the said information on the basis of which the case was opened was received, which is on the basis of which the case was opened was received, which is on the basis of which the case was opened was received, which is clear case to suppress its receipts with the PAN clear case to suppress its receipts with the PAN - AABCH7678H. Hence, the undersigned is in agreement with the AO that the Hence, the undersigned is in agreement with the AO that the Hence, the undersigned is in agreement with the AO that the appellant's contention that the i appellant's contention that the income has already been offered ncome has already been offered under the PAN AABCH7678H does not hold any water and the under the PAN AABCH7678H does not hold any water and the under the PAN AABCH7678H does not hold any water and the assessee has not produced any verifiable evidence to substantiate assessee has not produced any verifiable evidence to substantiate assessee has not produced any verifiable evidence to substantiate this claim. Further, during the original assessment proceedings for this claim. Further, during the original assessment proceedings for this claim. Further, during the original assessment proceedings for A.Y.2013-14 u/s. 143(3) of the Act 14 u/s. 143(3) of the Act under the PAN – AABCH7678H, the appellant has never produced this information (receipts on the the appellant has never produced this information (receipts on the the appellant has never produced this information (receipts on the PAN AABFH1723L) before the AO by his own accord and only after PAN AABFH1723L) before the AO by his own accord and only after PAN AABFH1723L) before the AO by his own accord and only after the system captured receipts on the PAN AABFH1723L that the the system captured receipts on the PAN AABFH1723L that the the system captured receipts on the PAN AABFH1723L that the department came to know about these r department came to know about these receipts and thereafter the eceipts and thereafter the case was selected for re case was selected for re-assessment u/s. 147 of the Act. If the assessment u/s. 147 of the Act. If the system of the department did not catch the misadventure of the system of the department did not catch the misadventure of the system of the department did not catch the misadventure of the appellant, then this part of the income of the appellant could be appellant, then this part of the income of the appellant could be appellant, then this part of the income of the appellant could be easily escaped from the tax avenue. easily escaped from the tax avenue.

5.7 Moreover, the assessee did not make any compliance nor put this 5.7 Moreover, the assessee did not make any compliance nor put this 5.7 Moreover, the assessee did not make any compliance nor put this stand during the course of faceless proceedings for re stand during the course of faceless proceedings for re stand during the course of faceless proceedings for re-assessment. It clearly established that the appellant deliberately did not allow the clearly established that the appellant deliberately did not allow the clearly established that the appellant deliberately did not allow the AO to verify his stand (regarding offering the i AO to verify his stand (regarding offering the income under the PAN ncome under the PAN AABFH1723L while filing return under the PAN AABFH1723L while filing return under the PAN – AABCH7678H) during both the assessment and the re during both the assessment and the re-assessment proceedings. Now assessment proceedings. Now after completion of the assessment proceedings, the assessee put this after completion of the assessment proceedings, the assessee put this after completion of the assessment proceedings, the assessee put this stand without any cogent or verifiable pr stand without any cogent or verifiable proof. In addition to above oof. In addition to above findings about the appellant, it is clear that the appellant is using findings about the appellant, it is clear that the appellant is using findings about the appellant, it is clear that the appellant is using both the PANs for its transactions which is verified from the fact that both the PANs for its transactions which is verified from the fact that both the PANs for its transactions which is verified from the fact that the department has received information from third parties where the the department has received information from third parties where the the department has received information from third parties where the other PAN was used other PAN was used by the assessee. Considering all the above cited by the assessee. Considering all the above cited facts and discussion by the AO around the embedded surrounding facts and discussion by the AO around the embedded surrounding facts and discussion by the AO around the embedded surrounding circumstances and discussion it is established that the AO was right circumstances and discussion it is established that the AO was right circumstances and discussion it is established that the AO was right in his observation and subsequent action by making addition of Rs. in his observation and subsequent action by making addition of Rs. in his observation and subsequent action by making addition of Rs. 17,78,645/- at 8% of its turnover reported in the Service Tax Return at 8% of its turnover reported in the Service Tax Return at 8% of its turnover reported in the Service Tax Return amounting to Rs.1,53,68,205/ amounting to Rs.1,53,68,205/- and Rs.68,64,865/- on account of gross receipts from contract work totaling to Rs.2,22,33,070/ gross receipts from contract work totaling to Rs.2,22,33,070/ gross receipts from contract work totaling to Rs.2,22,33,070/- by the AO. Therefore, the grounds raised by the appellant AO. Therefore, the grounds raised by the appellant are are disallowed. “

3. We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The ground No. 4 & 5 of the . The ground No. 4 & 5 of the appeal of the assessee relate to the merit of the addition. The Ld. appeal of the assessee relate to the merit of the addition. The Ld. appeal of the assessee relate to the merit of the addition. The Ld. counsel for the assessee filed a Paper Book containing pages 1 to 51 counsel for the assessee filed a Paper Book containing pa counsel for the assessee filed a Paper Book containing pa and referred to the page No and referred to the page Nos. 44 to 47, , which is Form 26AS in , which is Form 26AS in respect of the old PAN, showing that the contract receipts initially respect of the old PAN, showing that the contract receipts initially respect of the old PAN, showing that the contract receipts initially reflected therein had been reversed or rectified by the deductor by reflected therein had been reversed or rectified by the deductor by reflected therein had been reversed or rectified by the deductor by substituting the new PAN. substituting the new PAN. The relevant para of the TDS certificate is of the TDS certificate is reproduced as under: reproduced as under:

Sr. No Name of Deducror TAN of Total Amount Total Tax Total Tax Total TDS Deductor Paid/ Credited Deducted * Deducted * Deposited 1 CENTRAL RAILWAY ELW CENTRAL RAILWAY ELW NSKCQ1530E 0.00 0.00 0.00 0.00 JALGAON Sr. Section Transaction Status of Status of Date of Remarks** Amount Paid/ Tax Deducted## TDS Tax Deducted No, Date Booking Booking* Booking Credited Deposited

3.2 Similarly, regarding the service charges of Rs.1,53,68.205/ Similarly, regarding the service charges of Rs.1,53,68.205/ Similarly, regarding the service charges of Rs.1,53,68.205/- the Ld. counsel for the assessee referred to profit and loss account the Ld. counsel for the assessee referred to profit and loss account the Ld. counsel for the assessee referred to profit and loss account of the assessee, wherein total revenue from the operation is wherein total revenue from the operation is wherein total revenue from the operation is reported at Rs.31,87,87,879/ reported at Rs.31,87,87,879/-. Detail of the revenue etail of the revenue from operation has been provided on Paper Book page 27 which included service has been provided on Paper Book page 27 which included service has been provided on Paper Book page 27 which included service charges of Rs.1,53,68,205/ charges of Rs.1,53,68,205/-. The allegation of the Assessing Officer . The allegation of the Assessing Officer is that this amount of the service charge is amount of the service charge was reflected in the old was reflected in the old PAN and not included in the return of inco not included in the return of income filed against the new me filed against the new PAN. The assessee has provided detail of the service charges of PAN. The assessee has provided detail of the service charges of PAN. The assessee has provided detail of the service charges of Rs.1,53,68,205/- which is available on Paper which is available on Paper Book page 28. For Book page 28. For ready reference said service charges detail is reproduced as under: ready reference said service charges detail is reproduce ready reference said service charges detail is reproduce

“HIGH VOLT ELECTRICAL PVT. LTD. “HIGH VOLT ELECTRICAL PVT. LTD. 2012-13 J 46, MIDC TARAPUR VOISAR THANE DIST SERVICE CHARGES

Ledger Account 1-Apr-2012 to 31-Mar-2013 Page 1 Date Particulars Debit Credit Vch Type Vch No. CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 1 1,95,362.00 22-4-2012 By WESTERN RLY DAHOD WESTERN RLY DAHOD Sales 4 1,55,816.00 28-4-2012 By 14-5-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 6 1,95,362.00 24-5-2012 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 7 3,58,114.00 CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 11 3,58,114.00 14-6-2012 By 26-6-2012 By SOUTH EAST CENTRAL RLY, BHILAI SOUTH EAST CENTRAL RLY, BHILAI Sales 14 2,82,865.00 By SOUTH EAST CENTRAL RLY, BHILAI EAST CENTRAL RLY, BHILAI Sales 15 2,82,865.00 WESTERN RLY, BARODA WESTERN RLY, BARODA Sales 16 3,59,100.00 28-6-2012 By 29-7-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 28 1,95,362.00 6-8-2012 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 32 3,58,114.00 22-8-2012 SOUTH EAST CENTRAL RLY, BHILAI SOUTH EAST CENTRAL RLY, Sales 33 1,33,360.00 By 4-9-2012 EAST CENTRAL RLY GOMOH EAST CENTRAL RLY GOMOH Sales 40 12,40,550.00 By 12-9-2012 By SOUTH CENTRAL RLY VIJAYWADA SOUTH CENTRAL RLY VIJAYWADA Sales 42 4,14,590.00 SOUTH CENTRAL RLY VIJAYWADA SOUTH CENTRAL RLY VIJAYWADA Sales 43 4,14,590.00 By 15-9-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 48 1,95,362.00 EAST CENTRAL RLY GOMOH EAST CENTRAL RLY GOMOH Sales 56 12,40,550.00 13-10-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 57 1,95,362.00 15-10-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 65 1,95,362.00 7-11-2012 By 11-11-2012 By SOUTH EAST CENTRAL RLY, BHILAI SOUTH EAST CENTRAL RLY, BHILAI Sales 66 2,82,865.00 EAST CENTRAL RLY GOMOH EAST CENTRAL RLY GOMOH Sales 67 12,40,550.00 19-11-2012 By BEST UNDERTAKING BEST UNDERTAKING Sales 78 4,81,728.00 4-12-2012 By 12-12-2012 By SOUTH EAST CENTRAL RLY, BHILAI SOUTH EAST CENTRAL RLY, BHILAI Sales 82 2,82,865.00 22-12-2012 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 87 2,56,703.00 Tata Power Co Ltd Tata Power Co Ltd Sales 92 39,000.00 13-1-2013 By 15-1-2013 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 93 1,95,362.00 19-1-2013 By CENTRAL RLY BHUSAWAL CENTRAL RLY BHUSAWAL Sales 94 1,95,362.00 Tata Power Co Ltd Tata Power Co Ltd Sales 95 20-1-2013 By 1,12,000.00 CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 103 3,58,114.00 31-1-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 104 3,58,114.00 By 6-2-2013 By WESTERN RLY, BARODA WESTERN RLY, BARODA Sales 107 2,34,675.00 By WESTERN RLY, BARODA WESTERN RLY, BARODA Sales 108 2,34,675.00 12-2-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 110 3,58,114.00 27-2-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sates 115 3,58,114.00 CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 117 3,75,644.00 8-3-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 118 3,75,644.00 By CENTRAL RLY KALYAN CENTRAL RLY KALYAN Sales 120 7,05,325.00 12-3-2013 By 19-3-2013 By WESTERN RLY, BARODA WESTERN RLY, BARODA Sales 121 2,34,675.00 23-3-2013 By SOUTH CENTRAL RLY VIJAYWADA CENTRAL RLY VIJAYWADA Sales 123 4,13,002.00 SOUTH CENTRAL RLY VIJAYWADA SOUTH CENTRAL RLY VIJAYWADA Sales 124 4,13,002.00 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 125 3,58,114.00 25-3-2013 By 28-3-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Safes 126 3,75,644.00 31-3-2013 By CENTRAL RLY KALWA CENTRAL RLY KALWA Sales 132 3,58,114.00 To Closing Balance Closing Balance 1.53.68.205.00 1.53.68.205.00 1.53.68.205.00 1.53.68.205.00 3.3 It was urged that these receipts, as well as the service tax It was urged that these receipts, as well as the service tax It was urged that these receipts, as well as the service tax turnover, were in fact part of the revenue disclosed in the assessee’s turnover, were in fact part of the revenue disclosed in the assessee’s turnover, were in fact part of the revenue disclosed in the assessee’s profit and loss account under the new PAN, and that the additions profit and loss account under the new PAN, and that the additions profit and loss account under the new PAN, and that the additions amounted to taxing the same income twice , amounted to taxing the same income twice , hence, no hence, no separate addition was required in the hands of the assessee required in the hands of the assessee.

3.4 Regarding credit card expenses also the assessee justified that Regarding credit card expenses also the assessee justified that Regarding credit card expenses also the assessee justified that the same were incurred out of regular bank account of the assessee the same were incurred out of regular bank account of the assessee the same were incurred out of regular bank account of the assessee hence no separate addition is warranted. hence no separate addition is warranted.

3.5 On careful examination of the material on record, including On careful examination of the material on record, including On careful examination of the material on record, including the entries in Form 26AS and the detailed ledger of service charges the entries in Form 26AS and the detailed ledger of service charges the entries in Form 26AS and the detailed ledger of service charges aggregating to ₹1,53,68,205/ 1,53,68,205/– forming part of the revenue of forming part of the revenue of ₹31,87,87,879/– as disclosed in the audited accounts, we find merit as disclosed in the audited accounts, we find merit as disclosed in the audited accounts, we find merit in the submissions of learned counsel for the assessee. The in the submissions of learned counsel for the assessee. The in the submissions of learned counsel for the assessee. The documentary evidence demonstrates that the contract receipts and documentary evidence demonstrates that the contract receipts and documentary evidence demonstrates that the contract receipts and service charges forming the basis of the additions were already service charges forming the basis of the additions were already service charges forming the basis of the additions were already included in the income returned under the new PAN. Likewise, the included in the income returned under the new PAN. Likewise, the included in the income returned under the new PAN. Likewise, the credit card payments of redit card payments of ₹3,62,292/– were shown to have been made were shown to have been made through the assessee’s regular bank account and form part of its through the assessee’s regular bank account and form part of its through the assessee’s regular bank account and form part of its recorded business expenditure. The revenue has not brought on recorded business expenditure. The revenue has not brought on recorded business expenditure. The revenue has not brought on record any material to establish that such expenditure was record any material to establish that such expenditure was record any material to establish that such expenditure was unexplained within the meaning of Section 69C. ained within the meaning of Section 69C.

3.6 In the circumstances, the additions sustained by the In the circumstances, the additions sustained by the In the circumstances, the additions sustained by the Commissioner (Appeals) cannot be upheld. As the impugned Commissioner (Appeals) cannot be upheld. As the impugned Commissioner (Appeals) cannot be upheld. As the impugned receipts and expenditures were already reflected in the assessee’s receipts and expenditures were already reflected in the assessee’s receipts and expenditures were already reflected in the assessee’s books and subjected to tax in the books and subjected to tax in the return under the correct PAN, return under the correct PAN, separate addition on the same account would result in double separate addition on the same account would result in double separate addition on the same account would result in double taxation, which the law does not countenance. taxation, which the law does not countenance. Accordingly, the Accordingly, the additions of ₹17,78,645/ 17,78,645/– towards estimated profit and towards estimated profit and ₹3,62,292/– towards unexplained expenditure are towards unexplained expenditure are deleted. Grounds No. 4 and 5 deleted. Grounds No. 4 and 5 in the assessee’s appeal thus succeed. in the assessee’s appeal thus succeed.

3.7 In view of this finding on merits, the grounds challenging the In view of this finding on merits, the grounds challenging the In view of this finding on merits, the grounds challenging the validity of the reassessment proceedings have become academic and validity of the reassessment proceedings have become academic and validity of the reassessment proceedings have become academic and require no adjudication. require no adjudication.