DCIT, CIRCLE - 4(2), KOLKATA, KOLKATA vs. M/S SUDARSHAN PAPER & BOARD PVT. LTD., KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member) ITA No. 131/Kol/2018 Assessment Year: 2013-14 Deputy Commissioner of Income Tax, Circle-4(2), Kolkata.................................................Appellant Vs. M/s. Sudarshan Paper & Board Pvt. Ltd….......……….............................…………………........Respondent 27, Brabourne Road Room No. 311 Kolkata – 700 001 [PAN : AAHCS 1241 F] C.O. No. 33/Kol/2018 Assessment Year: 2013-14 M/s. Sudarshan Paper & Board Pvt. Ltd….......……….............................………………….............Appellant 27, Brabourne Road Room No. 311 Kolkata – 700 001 [PAN : AAHCS 1241 F] Vs. Deputy Commissioner of Income Tax, Circle-4(2), Kolkata.............................................Respondent ITA No. 836/Kol/2018 Assessment Year: 2014-15 Deputy Commissioner of Income Tax, Circle-4(2), Kolkata.................................................Appellant Vs. M/s. Sudarshan Paper & Board Pvt. Ltd….......……….............................…………………........Respondent 27, Brabourne Road Room No. 311 Kolkata – 700 001 [PAN : AAHCS 1241 F]

Appearances by: Shri S.M. Surana, Advocate, appeared on behalf of the assessee. Shri Manish Kanoria, CIT D/R, appearing on behalf of the Revenue. Date of concluding the hearing : February 11th, 2021 Date of pronouncing the order : April 1st, 2021 ORDER Per J. Sudhakar Reddy, AM :- Both these appeals are filed by the revenue and are directed against separate but identical orders of the ld. Commissioner of Income Tax (Appeals) - 2, (hereinafter the “ld. CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 07/11/2017 & 22/02/2018, for the Assessment Years 2013-14 and 2014-15 respectively. The cross- objection has been filed by the assessee in ITA No. 131/Kol/2018 for the Assessment

2 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. Year 2013-14. As the issues arising in both these appeals are common, for the sake of 14. As the issues arising in both these appeals are common, for the sake of 14. As the issues arising in both these appeals are common, for the sake of convenience, they are heard together and disposed off by way of this common order. venience, they are heard together and disposed off by way of this common order. venience, they are heard together and disposed off by way of this common order. 2. The assessee is a company and is in the business of trading in paper and board. It The assessee is a company and is in the business of trading in paper and board. It The assessee is a company and is in the business of trading in paper and board. It filed its return of income for the Assessment Year 2013 filed its return of income for the Assessment Year 2013-14 on 26/09/2013 and for the on 26/09/2013 and for the Assessment Year 2014-15 on 29/11/2014. The Assessing Officer passed a best judgment 15 on 29/11/2014. The Assessing Officer passed a best judgment 15 on 29/11/2014. The Assessing Officer passed a best judgment assessment u/s 144 of the Act for both the Assessment Year determining the total assessment u/s 144 of the Act for both the Assessment Year determining the total assessment u/s 144 of the Act for both the Assessment Year determining the total income of the assessee at Rs.13,14,75,970/ income of the assessee at Rs.13,14,75,970/- for the Assessment Year 2013 for the Assessment Year 2013-14 and Rs.21,52,86,940/- for the Assessment Year 2014 for the Assessment Year 2014-15. 2.1. Aggrieved the assessee carried the matter in appeal disputing the passing of Aggrieved the assessee carried the matter in appeal disputing the passing of Aggrieved the assessee carried the matter in appeal disputing the passing of ex- parte order without giving adequate opportunity to the assessee and also disputing the giving adequate opportunity to the assessee and also disputing the giving adequate opportunity to the assessee and also disputing the manner in which the assess manner in which the assessment was completed ignoring the past records of the was completed ignoring the past records of the assessee and violating various principles of law based on which best judgment assessee and violating various principles of law based on which best judgment assessee and violating various principles of law based on which best judgment assessments were to be passed. The ld. First Appellate Authority called for a remand assessments were to be passed. The ld. First Appellate Authority called for a remand assessments were to be passed. The ld. First Appellate Authority called for a remand report. The Assessing Officer submitted the r report. The Assessing Officer submitted the remand report on 9th August, 2017, claiming August, 2017, claiming that the assessee showed no inclination to comply with the statutory notices and hence that the assessee showed no inclination to comply with the statutory notices and hence that the assessee showed no inclination to comply with the statutory notices and hence the assessment was completed u/s 144 of the Act. He justified the passing of order u/s the assessment was completed u/s 144 of the Act. He justified the passing of order u/s the assessment was completed u/s 144 of the Act. He justified the passing of order u/s 144 of the Act. In the second remand re 144 of the Act. In the second remand report, called for by the ld. CIT(A) on called for by the ld. CIT(A) on the arguments of the assessee that the addition made in the assessment were unjustified, arguments of the assessee that the addition made in the assessment were unjustified, arguments of the assessee that the addition made in the assessment were unjustified, the Assessing Officer at para 4 justifies the additions on the ground that there was no the Assessing Officer at para 4 justifies the additions on the ground that there was no the Assessing Officer at para 4 justifies the additions on the ground that there was no compliance from the assessee on 28/01/201 compliance from the assessee on 28/01/2016. Thereafter, the ld. CIT(A) considered the 6. Thereafter, the ld. CIT(A) considered the submissions of the assessee, the material brought on record by the assessee before the submissions of the assessee, the material brought on record by the assessee before the submissions of the assessee, the material brought on record by the assessee before the Assessing Officer, the past record by way of past record by way of previous assessment orders as well as the previous assessment orders as well as the subsequent assessment orders in the a subsequent assessment orders in the assessee’s case and granted relief ssessee’s case and granted relief to the assessee. 3. Aggrieved, the revenue is in appeal before us. Aggrieved, the revenue is in appeal before us. 4. The grounds of appeal for the Assessment Year 2013 The grounds of appeal for the Assessment Year 2013-14, reads as follows: 14, reads as follows:- “1. That on the facts and in the circumstances of the case and in law, the Ld “1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred . CIT(A) has erred in deleting Rs.3,12,66,706/ in deleting Rs.3,12,66,706/- on account of trade payables which could not be established by on account of trade payables which could not be established by the assessee in original assessment proceedings and remand proceedings. the assessee in original assessment proceedings and remand proceedings.

3 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. 2. That on the facts and in circumstances of the case and in law, the That on the facts and in circumstances of the case and in law, the That on the facts and in circumstances of the case and in law, the Ld. ClT(A) has erred in deleting a sum of Rs. 4,93,01,115/ erred in deleting a sum of Rs. 4,93,01,115/- on account of unsecured loan which could not be on account of unsecured loan which could not be explained by the assessee in explained by the assessee in assessment proceedings. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting of Rs. 11,14,396/ d in deleting of Rs. 11,14,396/- on account of unexplained cash credit. 4. That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting a sum of Rs. 84,47,086/ erred in deleting a sum of Rs. 84,47,086/- on account of commission paid which was not on account of commission paid which was not explained by the assessee in assessment by the assessee in assessment proceedings. 5. That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting a sum of Rs. erred in deleting a sum of Rs. 1,68,80,801/-as other income. 6. That on the facts and in circumstances of the case and in law That on the facts and in circumstances of the case and in law, the Ld. C , the Ld. CIT(A) has erred in deleting a sum of Rs. 2,53,82 erred in deleting a sum of Rs. 2,53,82,407/- as additional net profit. 7. That the appellant craves for leave to add, delete, amend or modify any ground That the appellant craves for leave to add, delete, amend or modify any ground That the appellant craves for leave to add, delete, amend or modify any ground appellate proceedings.” before or at the time of appellate proceedings 4.1. The grounds of appeal for the Assessment Year 2014 The grounds of appeal for the Assessment Year 2014-15, reads as follows: 15, reads as follows:-

“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the proceedings u/s 144 of the Act without going through the fact of th erred in deleting the proceedings u/s 144 of the Act without going through the fact of th erred in deleting the proceedings u/s 144 of the Act without going through the fact of the assessee's non- compliance in original proceedings pliance in original proceedings. 2. Whether on the facts and in circumstances of Whether on the facts and in circumstances of the case and in law, the Ld. CI the case and in law, the Ld. CIT(A) has erred in deleting Rs. 92,20,409/- - on account of unexplained cash credit. 3. Whether on the facts and in the circ Whether on the facts and in the circumstances of the case the Ld. CIT(A) has erred in umstances of the case the Ld. CIT(A) has erred in deleting Rs. 4,36,97,031/- on account of unexplained trade payables without appreciating the on account of unexplained trade payables without appreciating the facts of the assessee's failure to facts of the assessee's failure to prove or substantiate the same. 4. Whether on the facts and in circumstances Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting of the case the Ld. CIT(A) has erred in deleting Rs. 11,86,90,207/- on account of current liabilities without appreciating the facts of the on account of current liabilities without appreciating the facts of the on account of current liabilities without appreciating the facts of the assessee's failure to prove or substantiate the same prove or substantiate the same. 5. Whether on the facts and in circumstances of the case the hether on the facts and in circumstances of the case the Ld. CIT(A) has erred in allowing Ld. CIT(A) has erred in allowing commission payment of Rs. 69,20,273/ payment of Rs. 69,20,273/-. 6. Whether on the facts and in circ Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting T(A) has erred in deleting Rs. 1,48,827/- u/s 14A read with Rule 8 Rs. 1,48,827/- u/s 14A read with Rule 8D. 7. Whether on the facts and in circumstances o Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting f the case the Ld. CIT(A) has erred in deleting Rs. 2,96,05,303/- as net profit @ 2% of gross receipts t profit @ 2% of gross receipts. 8. Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting Whether on the facts and in circumstances of the case the Ld. CIT(A) has erred in deleting Rs. 69,70,413/- as other income as other income. 9. Whether the appellant craves for leave to add, delete, amend or modify any ground before Whether the appellant craves for leave to add, delete, amend or modify any ground before Whether the appellant craves for leave to add, delete, amend or modify any ground before or at the time of appellate proceedings. or at the time of appellate proceedings.”

4 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. 4.2. The grounds of appeal of the cross The grounds of appeal of the cross-objections, reads as follows: objections, reads as follows:- “1. For that on the facts and circumstances of the For that on the facts and circumstances of the case the Ld. CIT(A) was justified in deleting case the Ld. CIT(A) was justified in deleting all the additions after allowing the AO an opportunity of being head on all the issues raised in the all the additions after allowing the AO an opportunity of being head on all the issues raised in the all the additions after allowing the AO an opportunity of being head on all the issues raised in the appeal. 2. For that the assessee craves leave to add, alter or amend any ground before or at the time of For that the assessee craves leave to add, alter or amend any ground before or at the time of For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing.” 5. The ld. D/R submitted that the assessee had not co The ld. D/R submitted that the assessee had not co-operated during the course of operated during the course of assessment proceedings. He filed photocopies of the letter written by the ld. CIT(A) to assessment proceedings. He filed photocopies of the letter written by the ld. CIT(A) to assessment proceedings. He filed photocopies of the letter written by the ld. CIT(A) to the Assessing Officer calling for the remand report and submitted that the ld. the Assessing Officer calling for the remand report and submitted that the ld. the Assessing Officer calling for the remand report and submitted that the ld. CIT(A) has not directed the Assessing Officer to examine the evidences f not directed the Assessing Officer to examine the evidences filed by the assessee or to iled by the assessee or to give an opportunity to the assessee and thereafter gave his report on the submissions an opportunity to the assessee and thereafter gave his report on the submissions an opportunity to the assessee and thereafter gave his report on the submissions made by the assessee before the ld. CIT(A). He referred to the remand made by the assessee before the ld. CIT(A). He referred to the remand made by the assessee before the ld. CIT(A). He referred to the remand report wherein, the Assessing Officer has given the instances where the assessee has not appeared has given the instances where the assessee has not appeared has given the instances where the assessee has not appeared before him and justified the passing of the order u/s 144 of the Act. He submitted that before him and justified the passing of the order u/s 144 of the Act. He submitted that before him and justified the passing of the order u/s 144 of the Act. He submitted that the ld. CIT(A) has passed an order without giving proper opportunity t the ld. CIT(A) has passed an order without giving proper opportunity t the ld. CIT(A) has passed an order without giving proper opportunity to the Assessing Officer to examine the claims of the assessee and under these circumstances, these Officer to examine the claims of the assessee and under these circumstances, these Officer to examine the claims of the assessee and under these circumstances, these appeals should be set aside to the file of the Assessing Officer for fresh adjudication, in appeals should be set aside to the file of the Assessing Officer for fresh adjudication, in appeals should be set aside to the file of the Assessing Officer for fresh adjudication, in accordance with law. He submitted that the assessee should be dir accordance with law. He submitted that the assessee should be directed to cooperate ected to cooperate with the Assessing Officer in the set aside assessment proceedings with the Assessing Officer in the set aside assessment proceedings 5.1. The ld. Counsel for the assessee, on the other hand, strongly objected to the The ld. Counsel for the assessee, on the other hand, strongly objected to the The ld. Counsel for the assessee, on the other hand, strongly objected to the setting aside of the matter to the file of the Assessing Officer and submitted that t setting aside of the matter to the file of the Assessing Officer and submitted that t setting aside of the matter to the file of the Assessing Officer and submitted that the assessee had in fact appeared before the Assessing Officer on various occasions and filed assessee had in fact appeared before the Assessing Officer on various occasions and filed assessee had in fact appeared before the Assessing Officer on various occasions and filed all the details called for and that this fact is clear from both the assessment order as well all the details called for and that this fact is clear from both the assessment order as well all the details called for and that this fact is clear from both the assessment order as well as the remand report of the Assessing Officer. He submitted that the as the remand report of the Assessing Officer. He submitted that the as the remand report of the Assessing Officer. He submitted that the Assessing Officer has in a very arbitrary manner, without considering any of the papers or evidences filed a very arbitrary manner, without considering any of the papers or evidences filed a very arbitrary manner, without considering any of the papers or evidences filed before him during the assessment proceedings made high pitched and highly unjustified before him during the assessment proceedings made high pitched and highly unjustified before him during the assessment proceedings made high pitched and highly unjustified additions which cannot be sustained in law. additions which cannot be sustained in law. 5.2. He submitted that the ld. CIT(A) had called for a remand report not only on the hat the ld. CIT(A) had called for a remand report not only on the hat the ld. CIT(A) had called for a remand report not only on the issue of violations of principles of natural justice but also on the issue of additions made issue of violations of principles of natural justice but also on the issue of additions made issue of violations of principles of natural justice but also on the issue of additions made in the assessment proceedings. He pointed out that the Assessing Officer had issued in the assessment proceedings. He pointed out that the Assessing Officer had issued in the assessment proceedings. He pointed out that the Assessing Officer had issued

5 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. notices to the assessee to appear before him during the e assessee to appear before him during the remand proceedings and that proceedings and that the assessee had again appeared before the Assessing Officer and drew the attention to the assessee had again appeared before the Assessing Officer and drew the attention to the assessee had again appeared before the Assessing Officer and drew the attention to all the papers filed on record but the Assessing Officer did not refer all the papers filed on record but the Assessing Officer did not refer to any documents and simply supported his orders passed u/s 144 of the Act. He relied on the following supported his orders passed u/s 144 of the Act. He relied on the following supported his orders passed u/s 144 of the Act. He relied on the following judgments for the proposition that repeated opportunities need not be given to the judgments for the proposition that repeated opportunities need not be given to the judgments for the proposition that repeated opportunities need not be given to the Assessing Officer, when the Assessing Officer does not avail all the opportunities granted Assessing Officer, when the Assessing Officer does not avail all the opportunities granted Assessing Officer, when the Assessing Officer does not avail all the opportunities granted to him during the course of assessment proceedings as well as in the remand during the course of assessment proceedings as well as in the remand during the course of assessment proceedings as well as in the remand proceedings:-  Veto Electropowers [2012] 20 taxmann.com 279 (Jaipur) Veto Electropowers [2012] 20 taxmann.com 279 (Jaipur)  Rajesh Babubhai Damania [2002] 122 taxamn 614 (Guj.) Rajesh Babubhai Damania [2002] 122 taxamn 614 (Guj.) 6. On merits, the ld. Counsel for the assessee took this Bench On merits, the ld. Counsel for the assessee took this Bench On merits, the ld. Counsel for the assessee took this Bench through the submissions of the assessee submissions of the assessee, for each of the additions, which are brought out at pages 9 which are brought out at pages 9 to 10 of the ld. CIT(A)’s order, for the Assessment Year 2013 to 10 of the ld. CIT(A)’s order, for the Assessment Year 2013-14 and the findings of the 14 and the findings of the ld. CIT(A) on each of these arguments ld. CIT(A) on each of these arguments, from pages 10 to 18 of his from pages 10 to 18 of his order. For the Assessment Year 2014-15, the submissions of the assessee and findings of the ld. CIT(A) 15, the submissions of the assessee and findings of the ld. CIT(A) 15, the submissions of the assessee and findings of the ld. CIT(A) are at pages 9 to 27 of his order. He also relied on the order of the Tribunal in the are at pages 9 to 27 of his order. He also relied on the order of the Tribunal in the are at pages 9 to 27 of his order. He also relied on the order of the Tribunal in the assessee’s own case for the Assessment Year 2010 assessee’s own case for the Assessment Year 2010-11 and 2011 11 and 2011-12 in ITA No. 1266/Kol/2016 and ITA No. 316/Kol/2016, order dt. 09/11/2018 and such another 1266/Kol/2016 and ITA No. 316/Kol/2016, order dt. 09/11/2018 and such another 1266/Kol/2016 and ITA No. 316/Kol/2016, order dt. 09/11/2018 and such another cases, which we would be dealing as and when necessary. He submitted that the cases, which we would be dealing as and when necessary. He submitted that the cases, which we would be dealing as and when necessary. He submitted that the Tribunal may dispose off the case on merits after considering the material on record the Tribunal may dispose off the case on merits after considering the material on record the Tribunal may dispose off the case on merits after considering the material on record the submissions of the assessee made before the ld. CIT(A) as well as before the Tribunal missions of the assessee made before the ld. CIT(A) as well as before the Tribunal missions of the assessee made before the ld. CIT(A) as well as before the Tribunal and the factual findings of the ld. CIT(A). and the factual findings of the ld. CIT(A). 7. On the cross-objections, he submits that it was filed only in support of the order objections, he submits that it was filed only in support of the order objections, he submits that it was filed only in support of the order of the ld. CIT(A). 8. The ld. CIT D/R, in reply, could not contradict the factual findings of the ld. CIT(A) eply, could not contradict the factual findings of the ld. CIT(A) eply, could not contradict the factual findings of the ld. CIT(A) on each of the additions. On the issue of opportunities given to the Assessing Officer, on On the issue of opportunities given to the Assessing Officer, on On the issue of opportunities given to the Assessing Officer, on a query from the Bench, he submitted that the Assessing Officer had in fact conducted a query from the Bench, he submitted that the Assessing Officer had in fact conducted a query from the Bench, he submitted that the Assessing Officer had in fact conducted the hearing during the remand proceedings in which the remand proceedings in which, the assessee had appeared, , the assessee had appeared, and filed information and thereafter the Assessing Officer submitted filed information and thereafter the Assessing Officer submitted his remand report. his remand report.

6 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. 9. We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities e, perusal of the papers on record, orders of the authorities e, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: below as well as case law cited, we hold as follows:- 10. A perusal of the remand report demonstrates that the Assessing Officer A perusal of the remand report demonstrates that the Assessing Officer A perusal of the remand report demonstrates that the Assessing Officer acknowledges that the assessee had filed details on 25/08/2015 a acknowledges that the assessee had filed details on 25/08/2015 and 27/01/2016. It is nd 27/01/2016. It is not the case of the Assessing Officer that no details, whatsoever, w not the case of the Assessing Officer that no details, whatsoever, w not the case of the Assessing Officer that no details, whatsoever, were filed by the assessee in response to the queries raised by the Assessing Officer during the course of assessee in response to the queries raised by the Assessing Officer during the course of assessee in response to the queries raised by the Assessing Officer during the course of assessment proceedings. In fact, the ld. CIT(A) has recorded assessment proceedings. In fact, the ld. CIT(A) has recorded that all the facts necessary that all the facts necessary for assessment were on records. The Assessing Officer did not refer to any of these for assessment were on records. The Assessing Officer did not refer to any of these for assessment were on records. The Assessing Officer did not refer to any of these documents and information and completed the assessment u/s 144 of the Act. The ld. documents and information and completed the assessment u/s 144 of the Act. The ld. documents and information and completed the assessment u/s 144 of the Act. The ld. CIT(A) had called for a remand report and directed the Asses CIT(A) had called for a remand report and directed the Assessing Officer to examine sing Officer to examine all the information and documents filed the information and documents filed and report on the submissions of the assessee. In and report on the submissions of the assessee. In this remand report, the Assessing Officer in a very cryptic manner stated as follows: this remand report, the Assessing Officer in a very cryptic manner stated as follows: this remand report, the Assessing Officer in a very cryptic manner stated as follows:- “5. In course of hearing dated 12.01.2018, the A.R. of “5. In course of hearing dated 12.01.2018, the A.R. of assessee could not substantiate assessee could not substantiate as to how the assessment order dated 09.03.2016 was devoid of natural justice and as to how the assessment order dated 09.03.2016 was devoid of natural justice and as to how the assessment order dated 09.03.2016 was devoid of natural justice and merit.” 11. The assessment orders, The assessment orders, apparently, show arbitrariness and lack of judicious show arbitrariness and lack of judicious approach by the Assessing Officer. W by the Assessing Officer. When the ld. CIT(A) has called for a remand report, has called for a remand report, the Assessing Officer was provided sufficient opportunity to substantiate the additions the Assessing Officer was provided sufficient opportunity to substantiate the additions the Assessing Officer was provided sufficient opportunity to substantiate the additions made by him in the assessment order by him in the assessment order. This is not done. The Assessing Officer neither The Assessing Officer neither during the assessment proceedings nor during the r during the assessment proceedings nor during the remand proceedings examined the emand proceedings examined the information or documents filed by the assessee. information or documents filed by the assessee. Under these circumstances, and on Under these circumstances, and on examination of the facts of the case, we are of the considered opinion that this is not a fit examination of the facts of the case, we are of the considered opinion that this is not a fit examination of the facts of the case, we are of the considered opinion that this is not a fit case for being set aside to the file of the Asses case for being set aside to the file of the Assessing Officer for fresh adjudication, in for fresh adjudication, in accordance with law. 12. Now, we consider the additions on merits for both the Assessment Years. Now, we consider the additions on merits for both the Assessment Years. Now, we consider the additions on merits for both the Assessment Years. 13. Disallowance of commission: Disallowance of commission: The Assessing Officer disallowed the commission payments claimed by the The Assessing Officer disallowed the commission payments claimed by the The Assessing Officer disallowed the commission payments claimed by the assessee based on the assessment order for the Assessment Year 2011 assessee based on the assessment order for the Assessment Year 2011 assessee based on the assessment order for the Assessment Year 2011-12. On appeal,

7 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. the ld. CIT(A) deleted the additions made the ld. CIT(A) deleted the additions made in that year. The Kolkata ‘A’ Bench of the . The Kolkata ‘A’ Bench of the Tribunal in the assessee’s own case for the Assessment Year 2010 assessee’s own case for the Assessment Year 2010-11 and 2011 11 and 2011-12 in ITA Nos 1266 & 316/Kol/2016, order dt. 09/11/2018, had considered this issue and ITA Nos 1266 & 316/Kol/2016, order dt. 09/11/2018, had considered this issue and ITA Nos 1266 & 316/Kol/2016, order dt. 09/11/2018, had considered this issue and had held as follows:-

“5. We first take up the issue of disallowance of claim of payment of commission on We first take up the issue of disallowance of claim of payment of commission on We first take up the issue of disallowance of claim of payment of commission on sales. The Assessing Officer for the Assessment Year 2010 les. The Assessing Officer for the Assessment Year 2010-11 has allowed the claim of 11 has allowed the claim of payment of commission made by the assessee amounting to Rs.1,14,51,971/ payment of commission made by the assessee amounting to Rs.1,14,51,971/ payment of commission made by the assessee amounting to Rs.1,14,51,971/-, paid to 11 parties. Only in the case of one party i.e. Sugam Vinimay P. Ltd., the commission paid parties. Only in the case of one party i.e. Sugam Vinimay P. Ltd., the commission paid parties. Only in the case of one party i.e. Sugam Vinimay P. Ltd., the commission paid was disallowed. For the Assessment Year 2011 disallowed. For the Assessment Year 2011-12, the Assessing Officer chose to disallow the 12, the Assessing Officer chose to disallow the very same claim of the assessee of having incurred expenditure towards sales very same claim of the assessee of having incurred expenditure towards sales very same claim of the assessee of having incurred expenditure towards sales commission. The assessee has filed, in our view, all the required evidence to discharg commission. The assessee has filed, in our view, all the required evidence to discharg commission. The assessee has filed, in our view, all the required evidence to discharge the burden of proof that lay on its. The ld. CIT(A), in our considered opinion has rightly burden of proof that lay on its. The ld. CIT(A), in our considered opinion has rightly burden of proof that lay on its. The ld. CIT(A), in our considered opinion has rightly appreciated the factual position and at para 7.4. of his order for the Assessment Year appreciated the factual position and at para 7.4. of his order for the Assessment Year appreciated the factual position and at para 7.4. of his order for the Assessment Year 2011-12 (supra) has rightly decided the issue in favour of the assessee. 12 (supra) has rightly decided the issue in favour of the assessee. In the case of Sugam Vinimay P. Ltd., the ld. CIT(A) for the Assessment n the case of Sugam Vinimay P. Ltd., the ld. CIT(A) for the Assessment n the case of Sugam Vinimay P. Ltd., the ld. CIT(A) for the Assessment Year 2011-12 at para 7.5. has held as follows: 12 at para 7.5. has held as follows:- “7.5. So far as Sugam Vinimay “7.5. So far as Sugam Vinimay Pvt. Ltd. is concerned, AO issued summon U/s. Pvt. Ltd. is concerned, AO issued summon U/s. 131 and the same came back unserved. The assessee also could not produce 131 and the same came back unserved. The assessee also could not produce 131 and the same came back unserved. The assessee also could not produce the party before the AO. However, like other agents, it also responded to the the party before the AO. However, like other agents, it also responded to the the party before the AO. However, like other agents, it also responded to the AO's notice issued u/s. 133(6) of the Act and filed all de AO's notice issued u/s. 133(6) of the Act and filed all details asked for by the tails asked for by the AO viz., (i) Nature and amount of transaction made with the above assessee AO viz., (i) Nature and amount of transaction made with the above assessee AO viz., (i) Nature and amount of transaction made with the above assessee company during the relevant year. (ii) Name of the parties for whom sales company during the relevant year. (ii) Name of the parties for whom sales company during the relevant year. (ii) Name of the parties for whom sales were arranged with quantity and consideration of sales, (iii) Opening and were arranged with quantity and consideration of sales, (iii) Opening and were arranged with quantity and consideration of sales, (iii) Opening and closing balance and payment made during the year, (iv) Ledger copy of lance and payment made during the year, (iv) Ledger copy of lance and payment made during the year, (iv) Ledger copy of accounts with the assessee company, (v) Bank Account details in which accounts with the assessee company, (v) Bank Account details in which accounts with the assessee company, (v) Bank Account details in which transactions is reflected and (vi) Copy of acknowledgement or filing of transactions is reflected and (vi) Copy of acknowledgement or filing of transactions is reflected and (vi) Copy of acknowledgement or filing of Income Tax Return and PAN. By filing these details, th Income Tax Return and PAN. By filing these details, the assessee and M/s. e assessee and M/s. Sugan Vinimay Private Ltd. had squarely discharged the primary onus cast Sugan Vinimay Private Ltd. had squarely discharged the primary onus cast Sugan Vinimay Private Ltd. had squarely discharged the primary onus cast on them. In this case also, bill was raised by including service taxes etc. and on them. In this case also, bill was raised by including service taxes etc. and on them. In this case also, bill was raised by including service taxes etc. and assessee made the payments through account payee cheque after deduction assessee made the payments through account payee cheque after deduction assessee made the payments through account payee cheque after deduction of TDS. There was an agreement also between the assessee company and its re was an agreement also between the assessee company and its re was an agreement also between the assessee company and its agent Sugam Vinimay Pvt. Ltd by which the agent had the right to receive agent Sugam Vinimay Pvt. Ltd by which the agent had the right to receive agent Sugam Vinimay Pvt. Ltd by which the agent had the right to receive commission and Sugam Vinimay also filed the return showing the commission and Sugam Vinimay also filed the return showing the commission and Sugam Vinimay also filed the return showing the commission income. The AO also has not alleged that assess commission income. The AO also has not alleged that assessee company and ee company and Sugam Vinimay are related to each other or that the payments were not Sugam Vinimay are related to each other or that the payments were not Sugam Vinimay are related to each other or that the payments were not genuine or that the payments having been made by the assessee to the genuine or that the payments having been made by the assessee to the genuine or that the payments having been made by the assessee to the recipient have found their way back to the assessee some way or the other. recipient have found their way back to the assessee some way or the other. recipient have found their way back to the assessee some way or the other. This being the case, AO can This being the case, AO cannot summarily reject the commission payment to not summarily reject the commission payment to Sugam Vinimay as 'shyam transaction', even though the agent did not Sugam Vinimay as 'shyam transaction', even though the agent did not Sugam Vinimay as 'shyam transaction', even though the agent did not respond to his summon. It is well settled law that once the assessee has respond to his summon. It is well settled law that once the assessee has respond to his summon. It is well settled law that once the assessee has discharged the primary onus, AO cannot hold a transaction bogus with discharged the primary onus, AO cannot hold a transaction bogus with discharged the primary onus, AO cannot hold a transaction bogus without bringing any material evidence on record to the contrary. bringing any material evidence on record to the contrary. In view of such, In view of such, balance addition of Rs.21,90,181/- is also deleted.” balance addition of Rs.21,90,181/ 5.1. The ld. D/R, could not point out any infirmity in these findings of the ld. CIT(A). The ld. D/R, could not point out any infirmity in these findings of the ld. CIT(A). The ld. D/R, could not point out any infirmity in these findings of the ld. CIT(A). hence we uphold the same. For simi hence we uphold the same. For similar reasons for the Assessment Year 2010 lar reasons for the Assessment Year 2010-11, the disallowance of Rs.9,05,612/ disallowance of Rs.9,05,612/-, made for the sole reason that the party has not been , made for the sole reason that the party has not been produced before the Assessing Officer, is hereby deleted. The assessee filed all the produced before the Assessing Officer, is hereby deleted. The assessee filed all the produced before the Assessing Officer, is hereby deleted. The assessee filed all the requisite details referred above in su requisite details referred above in support of the genuineness of the claim and identity of pport of the genuineness of the claim and identity of the party. No disallowance can be made merely because the party has not appeared in the party. No disallowance can be made merely because the party has not appeared in the party. No disallowance can be made merely because the party has not appeared in person before the Assessing Officer. person before the Assessing Officer.

ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd.

5.2. The Kolkata ‘D’ Bench of the Tribunal in ITA No. 141/Kol/2016 & C.O. No. The Kolkata ‘D’ Bench of the Tribunal in ITA No. 141/Kol/2016 & C.O. No. The Kolkata ‘D’ Bench of the Tribunal in ITA No. 141/Kol/2016 & C.O. No. 11/Kol/2016; Assessment Year 2012 1/Kol/2016; Assessment Year 2012-13; Madhusudan Rungta & Sons (HUF) vs. ITO at 13; Madhusudan Rungta & Sons (HUF) vs. ITO at para 6, held as follows:- - “6. We have heard the rival submissions. We find that the primary reason for 6. We have heard the rival submissions. We find that the primary reason for 6. We have heard the rival submissions. We find that the primary reason for disallowance of this commission by the Ld. AO is due to the fact that the disallowance of this commission by the Ld. AO is due to the fact that the Ld. AO was of Ld. AO was of the opinion that the assessee had not proved the nature and factum of services the opinion that the assessee had not proved the nature and factum of services the opinion that the assessee had not proved the nature and factum of services rendered by these three commission agents to the assessee. Hence, according to the Ld. rendered by these three commission agents to the assessee. Hence, according to the Ld. rendered by these three commission agents to the assessee. Hence, according to the Ld. AO, the payment of commission, though subjected to deduction of tax at sour AO, the payment of commission, though subjected to deduction of tax at sour AO, the payment of commission, though subjected to deduction of tax at source is merely a book entry to reduce the taxable profit of the assessee. But we find that the merely a book entry to reduce the taxable profit of the assessee. But we find that the merely a book entry to reduce the taxable profit of the assessee. But we find that the assessee had duly furnished the bill raised by those commission agents on the assessee assessee had duly furnished the bill raised by those commission agents on the assessee assessee had duly furnished the bill raised by those commission agents on the assessee which clearly contained the list of parties i.e. customers of the assessee, which clearly contained the list of parties i.e. customers of the assessee, to whom sales to whom sales were made by the assessee. This clearly proves that these parties were introduced to were made by the assessee. This clearly proves that these parties were introduced to were made by the assessee. This clearly proves that these parties were introduced to the assessee by the concerned commission agents. We also find that the assessee had the assessee by the concerned commission agents. We also find that the assessee had the assessee by the concerned commission agents. We also find that the assessee had furnished the details of sales above Rs 50,000/ furnished the details of sales above Rs 50,000/- before the Ld. AO for the whole year e whole year which admittedly contained sales made to the various parties mentioned in the which admittedly contained sales made to the various parties mentioned in the which admittedly contained sales made to the various parties mentioned in the commission bill raised by commission agents. We have also cross verified from the commission bill raised by commission agents. We have also cross verified from the commission bill raised by commission agents. We have also cross verified from the details of sales furnished by the assessee before the Ld. AO with the commission bi details of sales furnished by the assessee before the Ld. AO with the commission bi details of sales furnished by the assessee before the Ld. AO with the commission bill raised by commission agents wherein the total sales made to these parties also tally. raised by commission agents wherein the total sales made to these parties also tally. raised by commission agents wherein the total sales made to these parties also tally. We also find that the said commission agents even though did not respond to the We also find that the said commission agents even though did not respond to the We also find that the said commission agents even though did not respond to the summons issued by the Ld. AO by making their personal appearance, but had summons issued by the Ld. AO by making their personal appearance, but had summons issued by the Ld. AO by making their personal appearance, but had furnished the requisite details to the Ld. AO and had also given confirmation that they requisite details to the Ld. AO and had also given confirmation that they requisite details to the Ld. AO and had also given confirmation that they had indeed included the subject mentioned commission in their returns and paid taxes had indeed included the subject mentioned commission in their returns and paid taxes had indeed included the subject mentioned commission in their returns and paid taxes thereon. All these facts clearly proved the services rendered by the commission to the thereon. All these facts clearly proved the services rendered by the commission to the thereon. All these facts clearly proved the services rendered by the commission to the assessee achieving the payment of commission. There could be more than one achieving the payment of commission. There could be more than one achieving the payment of commission. There could be more than one justifiable reason for commission agents for not appearing before the Ld. AO in justifiable reason for commission agents for not appearing before the Ld. AO in justifiable reason for commission agents for not appearing before the Ld. AO in response to the summons issued thereon. The Ld. AO is empowered under the law to response to the summons issued thereon. The Ld. AO is empowered under the law to response to the summons issued thereon. The Ld. AO is empowered under the law to take necessary action against take necessary action against these commission agents for non-compliance to the compliance to the summons issued to summons issued to Section 131 of the Act. The Statute provides for relevant remedial of the Act. The Statute provides for relevant remedial measures thereon. The ld measures thereon. The ld AO without resorting to such measures, cannot proceed to AO without resorting to such measures, cannot proceed to disbelieve the claim of commission paid by the assessee when the same are supported disbelieve the claim of commission paid by the assessee when the same are supported disbelieve the claim of commission paid by the assessee when the same are supported by various documents and confirmed by the said parties. by various documents and confirmed by the said parties. In the instant case, the In the instant case, the primary onus has been duly discha primary onus has been duly discharged by the assessee proving the claim of rged by the assessee proving the claim of commission payments made by the assessee. There is absolutely no reason for the ld commission payments made by the assessee. There is absolutely no reason for the ld commission payments made by the assessee. There is absolutely no reason for the ld AO to doubt the veracity of the said transactions. Admittedly none of the commission AO to doubt the veracity of the said transactions. Admittedly none of the commission AO to doubt the veracity of the said transactions. Admittedly none of the commission agents were relatives of the assessee or inter agents were relatives of the assessee or interested parties with the assessee so as to ested parties with the assessee so as to allege some mala fide on the part of the assessee. Hence, in our considered opinion, allege some mala fide on the part of the assessee. Hence, in our considered opinion, allege some mala fide on the part of the assessee. Hence, in our considered opinion, there is no case made out by the ld AO to treat the commission transactions as there is no case made out by the ld AO to treat the commission transactions as there is no case made out by the ld AO to treat the commission transactions as ingenuine transactions in these facts and circumsta ingenuine transactions in these facts and circumstances. We hold that mere non nces. We hold that mere non- appearance of the said commission agents in person before the Ld. AO would not make appearance of the said commission agents in person before the Ld. AO would not make appearance of the said commission agents in person before the Ld. AO would not make the transaction of payment of commission as ingenuine. Hence, we hold that the Ld. the transaction of payment of commission as ingenuine. Hence, we hold that the Ld. the transaction of payment of commission as ingenuine. Hence, we hold that the Ld. CIT(A) had rightly deleted the disallowance of commission ma CIT(A) had rightly deleted the disallowance of commission made by the Ld. AO. de by the Ld. AO. Accordingly, ground nos. 2 to 4 raised by the Revenue are dismissed.” Accordingly, ground nos. 2 to 4 raised by the Revenue are dismissed. 6. Applying the propositions of law in this case law to the facts of the case, we Applying the propositions of law in this case law to the facts of the case, we Applying the propositions of law in this case law to the facts of the case, we dismiss the revenue’s appeal on this issue for the Assessment Year 2011 dismiss the revenue’s appeal on this issue for the Assessment Year 2011 dismiss the revenue’s appeal on this issue for the Assessment Year 2011-12 and allow the ground of appeal of the assessee for the Assessment Year 2010 ground of appeal of the assessee for the Assessment Year 2010-11.

13.1. The ld. CIT(A) had deleted the addition based on the findings of his predecessor The ld. CIT(A) had deleted the addition based on the findings of his predecessor The ld. CIT(A) had deleted the addition based on the findings of his predecessor for the Assessment Year 2011 for the Assessment Year 2011-12. The ld. D/R could not distinguish these case law on The ld. D/R could not distinguish these case law on facts. Hence we find no infirmity in the order of the ld. CIT(A) on the issue of addition of we find no infirmity in the order of the ld. CIT(A) on the issue of addition of we find no infirmity in the order of the ld. CIT(A) on the issue of addition of commission payments and uphold the same commission payments and uphold the same and dismiss this ground of the revenue for and dismiss this ground of the revenue for both the Assessment Years.

9 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd.

“I have considered the submissions of the authorized representative of the appellant as I have considered the submissions of the authorized representative of the appellant as I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record before the assessing officer du before the assessing officer during the assessment proceedings. The AR of the appellate ring the assessment proceedings. The AR of the appellate has submitted that in adding back Rs. 4,93,01,115/ has submitted that in adding back Rs. 4,93,01,115/- as unexplained cash credit when as unexplained cash credit when there is no adverse comments about Beefin commodities limited, Jit Finance Pvt. Ltd. and there is no adverse comments about Beefin commodities limited, Jit Finance Pvt. Ltd. and there is no adverse comments about Beefin commodities limited, Jit Finance Pvt. Ltd. and Kandoi Transport Limited a Kandoi Transport Limited and further the AO did not proceed to enforce the attendance nd further the AO did not proceed to enforce the attendance of three other parties on whom notices u/s. 131 were duly served particularly while of three other parties on whom notices u/s. 131 were duly served particularly while of three other parties on whom notices u/s. 131 were duly served particularly while completing the assessment u/s. 144 and further should have looked into the past records completing the assessment u/s. 144 and further should have looked into the past records completing the assessment u/s. 144 and further should have looked into the past records of the assessee. The AO has also added back Rs. 4,93,01,115/- as unexplained cash credit as unexplained cash credit in the name of Bluemotion Logistic Ltd, Beefin Commodities Ltd, JIT Finance Pvt Ltd, in the name of Bluemotion Logistic Ltd, Beefin Commodities Ltd, JIT Finance Pvt Ltd, in the name of Bluemotion Logistic Ltd, Beefin Commodities Ltd, JIT Finance Pvt Ltd, Konoi Transport Ltd, Prime Rose Commonages Pvt Ltd and Trust Worthy Vinimay Pvt Ltd. Konoi Transport Ltd, Prime Rose Commonages Pvt Ltd and Trust Worthy Vinimay Pvt Ltd. Konoi Transport Ltd, Prime Rose Commonages Pvt Ltd and Trust Worthy Vinimay Pvt Ltd. The confirmation letters and details in respect of all the aforesaid 6 parties were ters and details in respect of all the aforesaid 6 parties were ters and details in respect of all the aforesaid 6 parties were submitted to the AO. The AO says that the details of three parties were not submitted to submitted to the AO. The AO says that the details of three parties were not submitted to submitted to the AO. The AO says that the details of three parties were not submitted to him. The Assessing Officer also states that he issued notice u/s. 131 to these parties on him. The Assessing Officer also states that he issued notice u/s. 131 to these parties on him. The Assessing Officer also states that he issued notice u/s. 131 to these parties on whom these notices were duly served. When the details were not furnished, it is not tices were duly served. When the details were not furnished, it is not tices were duly served. When the details were not furnished, it is not understood as to how the AD was able to issue notice u/s 131 to these three parties. understood as to how the AD was able to issue notice u/s 131 to these three parties. understood as to how the AD was able to issue notice u/s 131 to these three parties. Further, the Assessing Officer also states that notice was served on them. When notice Further, the Assessing Officer also states that notice was served on them. When notice Further, the Assessing Officer also states that notice was served on them. When notice were served, then the AO should have proceeded further to enforce their attendance then the AO should have proceeded further to enforce their attendance then the AO should have proceeded further to enforce their attendance specially in an ex-parte assessment order. The Assessing Officer did not proceed further to parte assessment order. The Assessing Officer did not proceed further to parte assessment order. The Assessing Officer did not proceed further to make enquiry or force the attendance of these three parties. It was more essential when make enquiry or force the attendance of these three parties. It was more essential when make enquiry or force the attendance of these three parties. It was more essential when the assessment was being completed u/s. 144. When the Assessing Officer did not precede sessment was being completed u/s. 144. When the Assessing Officer did not precede sessment was being completed u/s. 144. When the Assessing Officer did not precede further in spite of the fact that the assessee filed the confirmation letters and other details further in spite of the fact that the assessee filed the confirmation letters and other details further in spite of the fact that the assessee filed the confirmation letters and other details and the notices were duly served on the parties the addition was not justified and the notices were duly served on the parties the addition was not justified and the notices were duly served on the parties the addition was not justified in view of the judgment of the Hon’ble the judgment of the Hon’ble Supreme Court in the case of Orissa Corpn. Ltd. reported in Supreme Court in the case of Orissa Corpn. Ltd. reported in 159 ITR 78. The AO himself has accepted the loans from these parties in Asst. Year 2014 159 ITR 78. The AO himself has accepted the loans from these parties in Asst. Year 2014 159 ITR 78. The AO himself has accepted the loans from these parties in Asst. Year 2014- 15 (although addition has been made but it pertains to 15 (although addition has been made but it pertains to director and director and relatives only) wherein in the ex-parte assessment also the loan from these parties have been accepted. parte assessment also the loan from these parties have been accepted. parte assessment also the loan from these parties have been accepted.

10 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. Furthermore, in spite of all the details having been filed along with the written Furthermore, in spite of all the details having been filed along with the written Furthermore, in spite of all the details having been filed along with the written submissions and the AO having been given the opportunity to look into submissions and the AO having been given the opportunity to look into submissions and the AO having been given the opportunity to look into the submissions made the AO has not examined the same and has not adversely commented on the same. made the AO has not examined the same and has not adversely commented on the same. made the AO has not examined the same and has not adversely commented on the same. I find that the AO added back Rs. 4,93,01,115/ I find that the AO added back Rs. 4,93,01,115/-as unexplained cash credit when there is no as unexplained cash credit when there is no adverse comments about Beefin commodities limited, Jit Finance Pv adverse comments about Beefin commodities limited, Jit Finance Pv adverse comments about Beefin commodities limited, Jit Finance Pvt Ltd, Kandoi Transport Limited and Trust Worthy Vinimay Pvt Ltd. The AO has mentioned that notice Transport Limited and Trust Worthy Vinimay Pvt Ltd. The AO has mentioned that notice Transport Limited and Trust Worthy Vinimay Pvt Ltd. The AO has mentioned that notice u/s 131 was issued to three parties but I failed to understand why addition was made for u/s 131 was issued to three parties but I failed to understand why addition was made for u/s 131 was issued to three parties but I failed to understand why addition was made for other four parties and no addition was made for Mira Commosales Pvt other four parties and no addition was made for Mira Commosales Pvt other four parties and no addition was made for Mira Commosales Pvt Ltd when the notice u/s 131 was issued to that party. notice u/s 131 was issued to that party. I find that the notice u/s 131 was issued on I find that the notice u/s 131 was issued on 13.03.2016 to these parties for 16.03.2016 and assessment order was passed on 13.03.2016 to these parties for 16.03.2016 and assessment order was passed on 13.03.2016 to these parties for 16.03.2016 and assessment order was passed on 18.03.2016. The assessee during the assessment proceeding confirmation letters The assessee during the assessment proceeding confirmation letters and details in respect and details in respect of all the aforesaid 6 parties were submitted to the AO. The AO says that the details of of all the aforesaid 6 parties were submitted to the AO. The AO says that the details of of all the aforesaid 6 parties were submitted to the AO. The AO says that the details of these parties were not submitted to him. The AO also states that he issued notice u/s. 131 these parties were not submitted to him. The AO also states that he issued notice u/s. 131 these parties were not submitted to him. The AO also states that he issued notice u/s. 131 to these parties on whom these notices were dul to these parties on whom these notices were duly served. When the details were ved. When the details were not furnished, it is not understood as to how the A furnished, it is not understood as to how the AO was able to issue notice u was able to issue notice u/s 131 to three parties. Further, the AO O also states that notice was served on them. When notices were also states that notice was served on them. When notices were served, then the AO should have proceeded furth should have proceeded further to enforce their attendance especially er to enforce their attendance especially in an ex-parte assessment order. parte assessment order. The AO himself has accepted the loans from these himself has accepted the loans from these parties in Asst. Year 2014 Year 2014-15 (although addition has been made but it pertains to director and relatives only) wherein in the addition has been made but it pertains to director and relatives only) wherein in the addition has been made but it pertains to director and relatives only) wherein in the ex- parte assessment was made on 09.03.2016 and this assessment order was passed on parte assessment was made on 09.03.2016 and this assessment order was passed on parte assessment was made on 09.03.2016 and this assessment order was passed on 18.03.2016. Furthermore, in spite of all the details having been filed along with the 18.03.2016. Furthermore, in spite of all the details having been filed along with the 18.03.2016. Furthermore, in spite of all the details having been filed along with the written submissions and the A written submissions and the AO having been given the opportunity to look into the having been given the opportunity to look into the submissions made the A ssions made the AO has not examined the same and has not adversely commented has not examined the same and has not adversely commented on the same. The matter was also sent back to the A The matter was also sent back to the AO for remand report and the AD again did not for remand report and the AD again did not availed the opportunity to examine these parties on merit. No adverse comments/fin availed the opportunity to examine these parties on merit. No adverse comments/fin availed the opportunity to examine these parties on merit. No adverse comments/finding has been given by the A the AO in the remand report. The AO in the remand report has in the remand report has mentioned that details were filed but since nob mentioned that details were filed but since nobody appeared for hearin dy appeared for hearing, to explain and or reconcile various issues involved. and or reconcile various issues involved. Keeping in view of above, the A Keeping in view of above, the AO is directed to delete addition.”

For the Assessment Year 2014 For the Assessment Year 2014-15, at page 10 & 11, the ld. CIT(A) held as follows: 15, at page 10 & 11, the ld. CIT(A) held as follows:-

“I have considered the submissions of the authorized representative of the appellant as well “I have considered the submissions of the authorized representative of the appellant as well “I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the material as the assessment order framed in the light of the materials available on record before the s available on record before the Assessing Officer during the assessment proceedings. Assessing Officer during the assessment proceedings. The AR of the appellant has submitted that there was increase in usecured loans from The AR of the appellant has submitted that there was increase in usecured loans from The AR of the appellant has submitted that there was increase in usecured loans from Directors and their relatives and full details were filed before the A.O. even though Directors and their relatives and full details were filed before the A.O. even though Directors and their relatives and full details were filed before the A.O. even though the same were received by all the directors were having brought forward balances and such loans were received by all the directors were having brought forward balances and such loans were received by all the directors were having brought forward balances and such loans were duly accepted in earlier years. During the relevant year, all the transactions relating were duly accepted in earlier years. During the relevant year, all the transactions relating were duly accepted in earlier years. During the relevant year, all the transactions relating to the loan (whether fresh infusion or repayment of the same) has to the loan (whether fresh infusion or repayment of the same) has been done the banking been done the banking channels. Further, the assessee has been regularly paying interest on the above channels. Further, the assessee has been regularly paying interest on the above channels. Further, the assessee has been regularly paying interest on the above-mentioned loan. The same is evident from the loan confirmations. Moreover, the assessee had filed the loan. The same is evident from the loan confirmations. Moreover, the assessee had filed the loan. The same is evident from the loan confirmations. Moreover, the assessee had filed the Tax Audit Report before the A.O. from which it is c Tax Audit Report before the A.O. from which it is clearly evident that the Directors granted learly evident that the Directors granted loans in earlier years and the names of the Directors to whom interest was paid was also loans in earlier years and the names of the Directors to whom interest was paid was also loans in earlier years and the names of the Directors to whom interest was paid was also

11 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. available in the details of interest and schedule enclosed with the Audited balance sheet. available in the details of interest and schedule enclosed with the Audited balance sheet. available in the details of interest and schedule enclosed with the Audited balance sheet. The AO should have enquired the sa The AO should have enquired the same by making reference or issuing notices to the me by making reference or issuing notices to the Directors particularly when the assessment was being completed exparte. Having not done Directors particularly when the assessment was being completed exparte. Having not done Directors particularly when the assessment was being completed exparte. Having not done so the addition was not justified since particularly in the assessment U/s. 144 the AO was so the addition was not justified since particularly in the assessment U/s. 144 the AO was so the addition was not justified since particularly in the assessment U/s. 144 the AO was duty bound to act reasonably duty bound to act reasonably and make enquiries which were necessary before jumping to and make enquiries which were necessary before jumping to make the addition. The assessment should be based fn adequate material. The AO was make the addition. The assessment should be based fn adequate material. The AO was make the addition. The assessment should be based fn adequate material. The AO was aware of the directors of the assessee company, yet no notice was issued to directors nor aware of the directors of the assessee company, yet no notice was issued to directors nor aware of the directors of the assessee company, yet no notice was issued to directors nor was any notice issued to was any notice issued to the auditors to find out the truth. If the assessment is not based on the auditors to find out the truth. If the assessment is not based on adequate enquiry and material the assessment is not proper. The details and confirmations adequate enquiry and material the assessment is not proper. The details and confirmations adequate enquiry and material the assessment is not proper. The details and confirmations of the unsecured loans from Directors and their relatives were filed and were before the AO of the unsecured loans from Directors and their relatives were filed and were before the AO of the unsecured loans from Directors and their relatives were filed and were before the AO at the time of submissions of both the remand reports. The Directors or the relatives were the time of submissions of both the remand reports. The Directors or the relatives were the time of submissions of both the remand reports. The Directors or the relatives were old, the loans from them were also accepted in earlier years. All of them were assessed to old, the loans from them were also accepted in earlier years. All of them were assessed to old, the loans from them were also accepted in earlier years. All of them were assessed to tax and PAN were submitted. No enquiry at all was made at the time of assessm tax and PAN were submitted. No enquiry at all was made at the time of assessm tax and PAN were submitted. No enquiry at all was made at the time of assessment nor has any adverse comment been made in the remand reports. No notice was issued to anyone of any adverse comment been made in the remand reports. No notice was issued to anyone of any adverse comment been made in the remand reports. No notice was issued to anyone of them in the course of assessment proceedings or remand proceedings. them in the course of assessment proceedings or remand proceedings. I find that the confirmation and details chart were I find that the confirmation and details chart were field before the AO at the time of both field before the AO at the time of both the remand proceedings. The AO did not made any specific addition on unsecured loans and the remand proceedings. The AO did not made any specific addition on unsecured loans and the remand proceedings. The AO did not made any specific addition on unsecured loans and only addition of difference of opening and closing balance were made by him. There is no only addition of difference of opening and closing balance were made by him. There is no only addition of difference of opening and closing balance were made by him. There is no adverse comments made by the AO on me adverse comments made by the AO on merit on the loans and no specific negative rit on the loans and no specific negative observation were made on the addition as made by him in the assessment order. In view of observation were made on the addition as made by him in the assessment order. In view of observation were made on the addition as made by him in the assessment order. In view of above; the AO is directed to delete the addition. This ground of appeal is allowed.” above; the AO is directed to delete the addition. This ground of appeal is allowed.” above; the AO is directed to delete the addition. This ground of appeal is allowed.”

14.1. The ld. D/R, could not factually The ld. D/R, could not factually controvert these findings of the ld. CIT(A). Hence, controvert these findings of the ld. CIT(A). Hence, we uphold the same and dismiss this ground of the revenue for both the Assessment we uphold the same and dismiss this ground of the revenue for both the Assessment we uphold the same and dismiss this ground of the revenue for both the Assessment Years. 15. Unexplained cash deposits in banks: Unexplained cash deposits in banks:- The ld. CIT(A) has given a factual finding that all these cash deposits i The ld. CIT(A) has given a factual finding that all these cash deposits i The ld. CIT(A) has given a factual finding that all these cash deposits in bank, were recorded in the regular books of accounts and the details of the same furnished to were recorded in the regular books of accounts and the details of the same furnished to were recorded in the regular books of accounts and the details of the same furnished to the Assessing Officer. As these deposits are part of the regular books of accounts, the he Assessing Officer. As these deposits are part of the regular books of accounts, the he Assessing Officer. As these deposits are part of the regular books of accounts, the addition was deleted by the ld. CIT(A). We find not infirmity in the sam addition was deleted by the ld. CIT(A). We find not infirmity in the sam addition was deleted by the ld. CIT(A). We find not infirmity in the same. Thus, we uphold this factual finding of the ld. CIT(A), which is not controverted by the ld. D/R and uphold this factual finding of the ld. CIT(A), which is not controverted by the ld. D/R and uphold this factual finding of the ld. CIT(A), which is not controverted by the ld. D/R and dismiss this ground of the revenue for both the Assessment Years. dismiss this ground of the revenue for both the Assessment Years.

12 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. highly arbitrary. The ld. CIT(A) has given the following findings highly arbitrary. The ld. CIT(A) has given the following findings highly arbitrary. The ld. CIT(A) has given the following findings of fact for the Assessment Year 2013-14:-

“I have considered the submissions of the authorized representative of the appellant “I have considered the submissions of the authorized representative of the appellant “I have considered the submissions of the authorized representative of the appellant as well as the assessment order as well as the assessment order framed in the light of the materials available on framed in the light of the materials available on record before the assessing officer during the assessment proceedings. record before the assessing officer during the assessment proceedings. The AR of the appellate has submitted that the AO was wrong in adding back The AR of the appellate has submitted that the AO was wrong in adding back The AR of the appellate has submitted that the AO was wrong in adding back Rs.3,12,66,706/- as unexplained trades a able when the details of such purchases as unexplained trades a able when the details of such purchases as unexplained trades a able when the details of such purchases were filed vide letter date 04.02.2016 The assessee has disputed the addition made by were filed vide letter date 04.02.2016 The assessee has disputed the addition made by were filed vide letter date 04.02.2016 The assessee has disputed the addition made by the AO of Rs.3,12,66,706/ ,12,66,706/- on the ground that Sundry Creditors were not established. on the ground that Sundry Creditors were not established. There is no dispute over the fact that the list of sundry creditors were filed. The There is no dispute over the fact that the list of sundry creditors were filed. The There is no dispute over the fact that the list of sundry creditors were filed. The assessee is dealer in paper and all these sundry creditors are appearing from year to assessee is dealer in paper and all these sundry creditors are appearing from year to assessee is dealer in paper and all these sundry creditors are appearing from year to year and every year. The sundry creditors named by the AO in the assessment order year. The sundry creditors named by the AO in the assessment order year. The sundry creditors named by the AO in the assessment order also appeared in the list of sundry creditors for the A.Y. 2011 also appeared in the list of sundry creditors for the A.Y. 2011-12 for, which he himself 12 for, which he himself passed the assessment order and accepted the sundry creditors for that year. The passed the assessment order and accepted the sundry creditors for that year. The passed the assessment order and accepted the sundry creditors for that year. The details of the sundry creditors for A. Year 2011 ry creditors for A. Year 2011-12 is enclosed herewith. In the said 12 is enclosed herewith. In the said year the names and complete address of the parties were also available, even if for year the names and complete address of the parties were also available, even if for year the names and complete address of the parties were also available, even if for argument sake the AO felt that complete addresses were not available. The AO did argument sake the AO felt that complete addresses were not available. The AO did argument sake the AO felt that complete addresses were not available. The AO did not even issue any notic not even issue any notice U/s.133(6) to the sundry creditor to prove that any of the e U/s.133(6) to the sundry creditor to prove that any of the sundry creditors were not genuine. Therefore the addition made by the AO without sundry creditors were not genuine. Therefore the addition made by the AO without sundry creditors were not genuine. Therefore the addition made by the AO without bringing any evidence on record to prove that the creditors were not genuine, was bringing any evidence on record to prove that the creditors were not genuine, was bringing any evidence on record to prove that the creditors were not genuine, was not justified in making the addi not justified in making the addition. The AR of the appellate has further submitted tion. The AR of the appellate has further submitted that the addition for trade payable is concerned the AO states that for address of that the addition for trade payable is concerned the AO states that for address of that the addition for trade payable is concerned the AO states that for address of certain parties like MAP Limited, Mutilal Paper and Board Mill, Nextgen Printers Pvt certain parties like MAP Limited, Mutilal Paper and Board Mill, Nextgen Printers Pvt certain parties like MAP Limited, Mutilal Paper and Board Mill, Nextgen Printers Pvt Ltd, Spast Marketing Ltd., the asses Ltd, Spast Marketing Ltd., the assessee furnished incomplete addresses and therefore see furnished incomplete addresses and therefore the AO added back the entire trades payable of Rs. 3,12,67,706/ the AO added back the entire trades payable of Rs. 3,12,67,706/- as income of the as income of the assessee. Firstly, when no proper address of only 4 parties was given, why addition is assessee. Firstly, when no proper address of only 4 parties was given, why addition is assessee. Firstly, when no proper address of only 4 parties was given, why addition is made of the entire trades payable. The made of the entire trades payable. The AO could have enquired from the parties AO could have enquired from the parties Whose full address was given and if no discrepancy was found therein, then the Whose full address was given and if no discrepancy was found therein, then the Whose full address was given and if no discrepancy was found therein, then the natural presumption is that all the trades payable were genuine. It is further natural presumption is that all the trades payable were genuine. It is further natural presumption is that all the trades payable were genuine. It is further submitted that the AO has not looked into his own records submitted that the AO has not looked into his own records and has not properly and has not properly applied his mind. In the assessment year 2011 applied his mind. In the assessment year 2011-12 the AO himself has accepted all 12 the AO himself has accepted all trades payable and Sundry creditors. The list of trades payable/sundry creditors for trades payable and Sundry creditors. The list of trades payable/sundry creditors for trades payable and Sundry creditors. The list of trades payable/sundry creditors for the A. Year 2011-12 along with assessment year 2013 12 along with assessment year 2013-14 is enclosed herewith, which erewith, which shows that there appeared credit in the name of Multiwal Paper and Board Mill shows that there appeared credit in the name of Multiwal Paper and Board Mill shows that there appeared credit in the name of Multiwal Paper and Board Mill Limited in assessment year 2011 Limited in assessment year 2011-12 too. The credits in the name of Spast Marketing 12 too. The credits in the name of Spast Marketing Ltd. was only Rs.3741/ Rs.3741/- in the name of NAP Limited the credit was Rs.11,83,393/ in the name of NAP Limited the credit was Rs.11,83,393/- and Rs. 613625/- and said credit has been accepted in Assessment Year 2014 and said credit has been accepted in Assessment Year 2014 and said credit has been accepted in Assessment Year 2014-15. The credit in the name of Nextgen Printers Pvt. Ltd. was only Rs.1,52,541/ credit in the name of Nextgen Printers Pvt. Ltd. was only Rs.1,52,541/ credit in the name of Nextgen Printers Pvt. Ltd. was only Rs.1,52,541/-. The major increase in the Sundry creditors was Rs.2.34 Crores in ITC (BCM), Rs. 1.8 Croes in ITC increase in the Sundry creditors was Rs.2.34 Crores in ITC (BCM), Rs. 1.8 Croes in ITC increase in the Sundry creditors was Rs.2.34 Crores in ITC (BCM), Rs. 1.8 Croes in ITC Ltd (Geeta Press) and S. Murli Industrial Rs. 40 lakh credits in Asst. year 2011 d (Geeta Press) and S. Murli Industrial Rs. 40 lakh credits in Asst. year 2011 d (Geeta Press) and S. Murli Industrial Rs. 40 lakh credits in Asst. year 2011-12 were duly accepted including credit in the name of MAP Paper and MAP Shilpa. The were duly accepted including credit in the name of MAP Paper and MAP Shilpa. The were duly accepted including credit in the name of MAP Paper and MAP Shilpa. The AO has made the addition only on the ground that proper address, furnished. AO has made the addition only on the ground that proper address, furnished. AO has made the addition only on the ground that proper address, furnished. However, all the addresses were available with the AO in the assessment year 2011 addresses were available with the AO in the assessment year 2011 addresses were available with the AO in the assessment year 2011- 12 for which he himself completed the assessment on 11.3.2016 and duly accepted all 12 for which he himself completed the assessment on 11.3.2016 and duly accepted all 12 for which he himself completed the assessment on 11.3.2016 and duly accepted all these trades payable. I find that the AO made three assessments of the made three assessments of the appellate company in nine days. The appellate company in nine days. The assessment order for the asstt year 2014 assessment order for the asstt year 2014-15 was passed on 09.03.2016, the 15 was passed on 09.03.2016, the assessment order for the asstt year 2011 order for the asstt year 2011-12 was passed on 11.03.2016, the 12 was passed on 11.03.2016, the

13 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. assessment order for asstt year 2013 assessment order for asstt year 2013-14 i.e. the year under consideration was passed 14 i.e. the year under consideration was passed on 18.03.2016. The acc on 18.03.2016. The accepted the all these trade creditors in the asstt epted the all these trade creditors in the asstt year 2011-12 and 2014-15 (although 15 (although the addition on account of trade creditors has been made in addition on account of trade creditors has been made in 2014-15 but no specific 15 but no specific party addition has been made and only difference of opening addition has been made and only difference of opening and closing balance has been nd closing balance has been made) and both these two orders were passed prior to and both these two orders were passed prior to this order. I find from the assessme this order. I find from the assessment record that the complete address of these record that the complete address of these parties were available in these assess parties were available in these assessment folders. I also failed to understand, when folders. I also failed to understand, when the appellate did not provide addre the appellate did not provide address of these four parties than why the A ss of these four parties than why the AO made addition of entire trade payable amount. addition of entire trade payable amount. The sundry creditors named by the A The sundry creditors named by the AO in the assessment order also appeared in the in the assessment order also appeared in the list of sundry creditors for the A.Y. 2011 list of sundry creditors for the A.Y. 2011-12 for which he himself passed the 12 for which he himself passed the assessment order and accepted the sundry creditors for that year. In the said year the and accepted the sundry creditors for that year. In the said year the and accepted the sundry creditors for that year. In the said year the names and complete address of the parties were also available. names and complete address of the parties were also available. The AO has hot looked into his own records and has not properly applied his mind. In has hot looked into his own records and has not properly applied his mind. In has hot looked into his own records and has not properly applied his mind. In the assessment year 2011 the assessment year 2011-12 the AO himself has accepted all trades payable and himself has accepted all trades payable and sundry creditors. The list of trades payable/sundry creditors for the Asstt Year 2011 sundry creditors. The list of trades payable/sundry creditors for the Asstt Year 2011 sundry creditors. The list of trades payable/sundry creditors for the Asstt Year 2011- 12 along with assessment year 2013 12 along with assessment year 2013-14 shows that there appeared credit in the 14 shows that there appeared credit in the name of Multiwal Paper and Board Mills Li name of Multiwal Paper and Board Mills Limited in assessment year 2011 mited in assessment year 2011-12 too. The credits in the name o The credits in the name of Spast Marketing Ltd was only Rs. 3741/-, in the name of , in the name of NAP Limited the credit was Rs. NAP Limited the credit was Rs. 11,83,393/- and Rs. 613625/- and said credit has said credit has been accepted in Assessment year 2014 cepted in Assessment year 2014-15. The credit in the name of Nextgen the name of Nextgen Printers Pvt Ltd was only Rs. 1,52, nters Pvt Ltd was only Rs. 1,52,541/-. The major increase in the Sundry creditors . The major increase in the Sundry creditors was Rs. 2.34 Crores in ITC Ltd (BCM), Rs. 1.8 Cro was Rs. 2.34 Crores in ITC Ltd (BCM), Rs. 1.8 Crores in ITC Ltd (Geeta Press) and S. Ltd (Geeta Press) and S. Murli Industrial Rs. 40 lakhs. All the credits in Asst year 2011 Murli Industrial Rs. 40 lakhs. All the credits in Asst year 2011-12 were duly accepted 12 were duly accepted including credit in the name of MAP Paper and MAP Shilpa. The A including credit in the name of MAP Paper and MAP Shilpa. The AO has made the addition only on the ground that proper address was not furnished. However, all the addition only on the ground that proper address was not furnished. However, all the addition only on the ground that proper address was not furnished. However, all the addresses were available with the AO in Assessment Year 2011 addresses were available with the AO in Assessment Year 2011-12 for whic 12 for which he himself completed the assessment on 11.3.2016 (This order was passed on himself completed the assessment on 11.3.2016 (This order was passed on himself completed the assessment on 11.3.2016 (This order was passed on 18.03.2016) and duly accepted all these trades payable. 18.03.2016) and duly accepted all these trades payable. The Assessing Officer made the addition of difference of trade payables as per The Assessing Officer made the addition of difference of trade payables as per The Assessing Officer made the addition of difference of trade payables as per balance sheet and no specific party wise addition has been made by the AO. The specific party wise addition has been made by the AO. The specific party wise addition has been made by the AO. The notice u/s 131 was issue to ITC for the year 2011 notice u/s 131 was issue to ITC for the year 2011-12 and reply was received to the AO 12 and reply was received to the AO but the AO while making the addition for the year under consideration made the but the AO while making the addition for the year under consideration made the but the AO while making the addition for the year under consideration made the addition even trade payable relat addition even trade payable relating to ITC. The AO was not bother to see his own ing to ITC. The AO was not bother to see his own record and even when all these three assessment were made in only nine days. record and even when all these three assessment were made in only nine days. record and even when all these three assessment were made in only nine days. The matter was also sent for remand report to the AO and even than the AO did not The matter was also sent for remand report to the AO and even than the AO did not The matter was also sent for remand report to the AO and even than the AO did not look into his own record and his other two asses look into his own record and his other two assessment orders which were passed in sment orders which were passed in nine days i.e. from 09.03.2016 to 18.03.2016. nine days i.e. from 09.03.2016 to 18.03.2016. The AO in the remand report has The AO in the remand report has mentioned that details were filed but since nobody appeared for hearing. to mentioned that details were filed but since nobody appeared for hearing. to mentioned that details were filed but since nobody appeared for hearing. to explain and or reconcile various issues involved. explain and or reconcile various issues involved. Keeping in view of Keeping in view of above, the AO is directed to delete the addition. is directed to delete the addition. This ground of appeal is allowed.” For the Assessment Year 2014 For the Assessment Year 2014-15, he held as follows:-

“I have considered the submissions of the authorized representative of the appellant “I have considered the submissions of the authorized representative of the appellant “I have considered the submissions of the authorized representative of the appellant as well as the assessment order as well as the assessment order framed in the light of the materials available on framed in the light of the materials available on record before the assessing officer during the assessment proceedings. record before the assessing officer during the assessment proceedings.

14 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. The AR of the appellate has submitted that the list of sundry creditors was available The AR of the appellate has submitted that the list of sundry creditors was available The AR of the appellate has submitted that the list of sundry creditors was available in the schedule to the balance sheet which was in the schedule to the balance sheet which was duly filled before the AO. The details duly filled before the AO. The details were also filed before the AO, a copy of which is enclosed herewith. The A.O. ought to were also filed before the AO, a copy of which is enclosed herewith. The A.O. ought to were also filed before the AO, a copy of which is enclosed herewith. The A.O. ought to have verified the names of the creditors from the details already available with him the names of the creditors from the details already available with him the names of the creditors from the details already available with him in the balance sheet before completing the as in the balance sheet before completing the assessment U/s. 144. The A s. 144. The AO had the assessment records for AY. 2011 assessment records for AY. 2011-12 as well as 2013-14. Further, all these creditors 14. Further, all these creditors were paper mills whose names and addresses were available in the assessment were paper mills whose names and addresses were available in the assessment were paper mills whose names and addresses were available in the assessment records for Asstt. Yr. 2011 t. Yr. 2011-12 as well as 2013-14 and thus, the A.O. could had easily . could had easily verified the creditors. The above verified the creditors. The above-mentioned addition was not called for also in view mentioned addition was not called for also in view of the fact that the purchase has duly been accepted, all the creditors have been of the fact that the purchase has duly been accepted, all the creditors have been of the fact that the purchase has duly been accepted, all the creditors have been accepted in earlier years after making due and proper enquiry and accepted in earlier years after making due and proper enquiry and the A the AO has not brought on record any evidence to suggest that the creditors were not genuine. brought on record any evidence to suggest that the creditors were not genuine. brought on record any evidence to suggest that the creditors were not genuine. I find that the details with name and addresses were again filed along with the I find that the details with name and addresses were again filed along with the I find that the details with name and addresses were again filed along with the written submissions twice at the time of remand report stage. These creditors al written submissions twice at the time of remand report stage. These creditors al written submissions twice at the time of remand report stage. These creditors also appeared in earlier years and their addresses were available in the lis appeared in earlier years and their addresses were available in the lis appeared in earlier years and their addresses were available in the list for the assessment year 2011-12 and 2013 12 and 2013-14 yet no verification was made it yet no verification was made it the time of assessment and no adverse assessment and no adverse comment have been made in the remand report. The A comment have been made in the remand report. The AO did not made any specific addition on trade payables and only addition of difference did not made any specific addition on trade payables and only addition of difference did not made any specific addition on trade payables and only addition of difference of opening and closing balance were made by him. There is no adverse comment of opening and closing balance were made by him. There is no adverse comment of opening and closing balance were made by him. There is no adverse comment-s made by the AO on merit on the trade payables and no on merit on the trade payables and no-specific negative observation specific negative observation were made on the addition as made by him in the assessment order. In view of above, e on the addition as made by him in the assessment order. In view of above, e on the addition as made by him in the assessment order. In view of above, the AO is directed to delete the addition. is directed to delete the addition. This ground of appeal is allowed This ground of appeal is allowed. 16.1. The ld. D/R could not controvert this factual finding of the ld. CIT(A). Thus, we The ld. D/R could not controvert this factual finding of the ld. CIT(A). Thus, we The ld. D/R could not controvert this factual finding of the ld. CIT(A). Thus, we uphold the same and dismiss these grounds of the revenue. e and dismiss these grounds of the revenue.

The ld. CIT(A) at pages 17 & 18 The ld. CIT(A) at pages 17 & 18 gave the following findings the following findings of fact for the Assessment Year 2013-14:-

“I have considered the submissions of the authorized repres “I have considered the submissions of the authorized repres “I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials appellant as well as the assessment order framed in the light of the materials appellant as well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment available on record before the assessing officer during the assessment available on record before the assessing officer during the assessment proceedings. The AO while making the addition has mentioned that considering the facts of The AO while making the addition has mentioned that considering the facts of The AO while making the addition has mentioned that considering the facts of the case it is apparent that the assessee failed to satisfied the assessing officer the case it is apparent that the assessee failed to satisfied the assessing officer the case it is apparent that the assessee failed to satisfied the assessing officer about the correctness or completeness of the accounts of the assessee that about the correctness or completeness of the accounts of the assessee that about the correctness or completeness of the accounts of the assessee that whether the method of accounting provided in section 145(1) has been following whether the method of accounting provided in section 145(1) has been following whether the method of accounting provided in section 145(1) has been following by the assessee o by the assessee or income, has been computed in accordance with the standard r income, has been computed in accordance with the standard notified under section 145(1) of the act or not. Hence, addition of 2% GP was notified under section 145(1) of the act or not. Hence, addition of 2% GP was notified under section 145(1) of the act or not. Hence, addition of 2% GP was made. The AO has further added Rs 1,68,80,801/ made. The AO has further added Rs 1,68,80,801/- in the final computation of in the final computation of income as last item. income as last item. The AR of the appell The AR of the appellate has submitted that the AO was wrongly added back ate has submitted that the AO was wrongly added back Rs.2,53,82,407/ Rs.2,53,82,407/ - as net profit at 2% of the gross receipts without any basis as net profit at 2% of the gross receipts without any basis ignoring the past records and the books of accounts duly audited in accordance ignoring the past records and the books of accounts duly audited in accordance ignoring the past records and the books of accounts duly audited in accordance with law. The AO has estimated the net profit with law. The AO has estimated the net profit at 2% of the turnover and further at 2% of the turnover and further

15 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. separately added the other items of income as other income in this process the separately added the other items of income as other income in this process the separately added the other items of income as other income in this process the AO has estimated the business income at 2% at Rs. 2,53,82,407/ AO has estimated the business income at 2% at Rs. 2,53,82,407/ AO has estimated the business income at 2% at Rs. 2,53,82,407/- and separately added Rs. 1,68,80,801/ added Rs. 1,68,80,801/- as income from other sources which was p as income from other sources which was part of the business receipts and so considered in earlier years. In fact, the in comparative business receipts and so considered in earlier years. In fact, the in comparative business receipts and so considered in earlier years. In fact, the in comparative statement filed before the AO as called for by him, the computation of net profit statement filed before the AO as called for by him, the computation of net profit statement filed before the AO as called for by him, the computation of net profit and gross profit have been made by including such income. The net profit and and gross profit have been made by including such income. The net profit and and gross profit have been made by including such income. The net profit and gross profit rate was quite fair and reasonable in comparison to earlier years. . s profit rate was quite fair and reasonable in comparison to earlier years. . s profit rate was quite fair and reasonable in comparison to earlier years. . But the AO has raised the net profit 3.33% on the turnover of Rs. But the AO has raised the net profit 3.33% on the turnover of Rs. But the AO has raised the net profit 3.33% on the turnover of Rs. 1,26,91,20,332/ 1,26,91,20,332/- which is much more than the earlier years. The comparative which is much more than the earlier years. The comparative chart of the net profit of last 3 ye chart of the net profit of last 3 years have also been filed in the written ars have also been filed in the written submissions which has not been controverted by the AO. In fact, the comparative submissions which has not been controverted by the AO. In fact, the comparative submissions which has not been controverted by the AO. In fact, the comparative figures were also given to the AO in the course of assessment proceedings and he figures were also given to the AO in the course of assessment proceedings and he figures were also given to the AO in the course of assessment proceedings and he himself wanted the same. He has wanted the same. He has not given any reason as to why the earlier to why the earlier years comparative figures were not acceptable to him. Therefore, the A years comparative figures were not acceptable to him. Therefore, the A years comparative figures were not acceptable to him. Therefore, the AO was not justified in ignoring the past records and estimate the net profit as much not justified in ignoring the past records and estimate the net profit as much not justified in ignoring the past records and estimate the net profit as much higher figure. The AO wh higher figure. The AO while completing the assessment of the assessee u/s 144 completing the assessment of the assessee u/s 144 cannot ignore the past records which can be the best guide for estimating the not ignore the past records which can be the best guide for estimating the not ignore the past records which can be the best guide for estimating the income, even if he considered that the assessee’s income is to be estimated. income, even if he considered that the assessee’s income is to be estimated. income, even if he considered that the assessee’s income is to be estimated. I find that the AO while making the addition has mentioned that considering the I find that the AO while making the addition has mentioned that considering the I find that the AO while making the addition has mentioned that considering the facts of the case it is facts of the case it is apparent that the assessee failed to satisfied the Assessing apparent that the assessee failed to satisfied the Assessing Officer about the correctness or completeness of the accounts of the assessee Officer about the correctness or completeness of the accounts of the assessee Officer about the correctness or completeness of the accounts of the assessee that whether the method of accounting provided in section 145(1) has been that whether the method of accounting provided in section 145(1) has been that whether the method of accounting provided in section 145(1) has been following by the assessee or income has bee following by the assessee or income has been computed in accordance with the n computed in accordance with the standard notified under section 145(1) of the Act or not. The Assessing Officer at standard notified under section 145(1) of the Act or not. The Assessing Officer at standard notified under section 145(1) of the Act or not. The Assessing Officer at the same time did not mention in his order what are the mistakes in the books of the same time did not mention in his order what are the mistakes in the books of the same time did not mention in his order what are the mistakes in the books of accounts of the appellant company. accounts of the appellant company. The AO has also not poi The AO has also not pointed out the issues of deviation from the method of nted out the issues of deviation from the method of accounting provided in section 145 (1) or income has not been computed in accounting provided in section 145 (1) or income has not been computed in accounting provided in section 145 (1) or income has not been computed in accordance with the standard notified under section 145(1) of the act. There accordance with the standard notified under section 145(1) of the act. There accordance with the standard notified under section 145(1) of the act. There was nothing on record to show that the assessing offi was nothing on record to show that the assessing officer come to the conclusion cer come to the conclusion that the books of accounts maintained by the appellate were incorrect, that the books of accounts maintained by the appellate were incorrect, that the books of accounts maintained by the appellate were incorrect, incomplete, unreliable and consequently liable for rejection. incomplete, unreliable and consequently liable for rejection. The gross profit of the appellate company for the year under consideration was The gross profit of the appellate company for the year under consideration was The gross profit of the appellate company for the year under consideration was 4.30 % as against the gross profit of 4.08% in the preceding year i.e. against the gross profit of 4.08% in the preceding year i.e. against the gross profit of 4.08% in the preceding year i.e. -2011-12 and there was not addition by the same AO while making the assessment for the and there was not addition by the same AO while making the assessment for the and there was not addition by the same AO while making the assessment for the preceding year. It was 4.10% in the year 2014 preceding year. It was 4.10% in the year 2014-15. The gross profit in the year 15. The gross profit in the year under consideration is higher under consideration is higher in these three years. The AO has also separately in these three years. The AO has also separately added Rs. 1,68,80,801/ added Rs. 1,68,80,801/- as income from other sources which was part of the as income from other sources which was part of the business receipts. In fact, in the comparative statement filed before the AO as business receipts. In fact, in the comparative statement filed before the AO as business receipts. In fact, in the comparative statement filed before the AO as called for by him, the computation of net profit an called for by him, the computation of net profit and gross profit have been made d gross profit have been made by including such income. The AO should have started his computation of the by including such income. The AO should have started his computation of the by including such income. The AO should have started his computation of the return income and further add all the addition /disallowance made by him in return income and further add all the addition /disallowance made by him in return income and further add all the addition /disallowance made by him in the assessment order. Keeping in view of above, the AO is directed to dele the assessment order. Keeping in view of above, the AO is directed to dele the assessment order. Keeping in view of above, the AO is directed to delete these addition. These grounds of appeal are allowed These grounds of appeal are allowed.” Similarly, for the Assessment Year 2014 Similarly, for the Assessment Year 2014-15, he held as follows:-

16 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. “I have considered the submissions of the authorized representative of the I have considered the submissions of the authorized representative of the I have considered the submissions of the authorized representative of the appellant as well well as the assessment order framed in the light of the materials ht of the materials available on record before assessing officer during the assessment proceedings. available on record before assessing officer during the assessment proceedings. available on record before assessing officer during the assessment proceedings. The AO while making the addition has mentioned that considering the facts of while making the addition has mentioned that considering the facts of while making the addition has mentioned that considering the facts of the case it is apparent that the assessee failed to satisfied the assessing of apparent that the assessee failed to satisfied the assessing of apparent that the assessee failed to satisfied the assessing officer about the-correctness or correctness or completeness of the accounts of the assessee that completeness of the accounts of the assessee that whether the method of account provi whether the method of account provided in section 145 (1) has been following d in section 145 (1) has been following by the assessee or income has been comput by the assessee or income has been computed in accordance with the standard ed in accordance with the standard notified under section section 145(1) of the act or not. Hence, addition of 2% GP was ce, addition of 2% GP was made. The AO ha has further added Rs. 69,70,413/- in the final in the final computation of income as last item income as last item. The AR of the appellate has submitted that the first addition which has been The AR of the appellate has submitted that the first addition which has been The AR of the appellate has submitted that the first addition which has been taken by the assessee assessee i.e., on account of estimate of profit at Rs. 2,96,05,303/ on account of estimate of profit at Rs. 2,96,05,303/-. During the relevant ye During the relevant year, the turnover of the assessee was Rs. 1,48,02,65,126/ of the assessee was Rs. 1,48,02,65,126/-, the profit declared by the assessee during rofit declared by the assessee during year was 0.80% which was inclusive year was 0.80% which was inclusive of the other income of Rs. 69,70,413/ of the other income of Rs. 69,70,413/-. The net profit of the assessee on similar of the assessee on similar method was accepted between the A.Y. 2010 ccepted between the A.Y. 2010-11, and A.Y. 2012 and A.Y. 2012-13 therefore, even if the AO wanted to complete the assessment u/s. 144 wanted to complete the assessment u/s. 144 he should have estimated the profit in a fair and justifiable manner. Needless to estimated the profit in a fair and justifiable manner. Needless to estimated the profit in a fair and justifiable manner. Needless to say that the assessee’s own past records can be the best guide for such estimate own past records can be the best guide for such estimate own past records can be the best guide for such estimate particularly when particularly when the AO has not brought on record of any comparable case to not brought on record of any comparable case to justify the net profit estimated him. When the earlier year's comparative justify the net profit estimated him. When the earlier year's comparative justify the net profit estimated him. When the earlier year's comparative figures of the rate of profit is taken into acco figures of the rate of profit is taken into account and keeping in mind the and keeping in mind the increase in the turn over the net profit declared increase in the turn over the net profit declared by the assessee assessee was quite fair and reasonable. No addition of any nature and reasonable. No addition of any nature in the trading account was called in the trading account was called for and such addition was not justified. for and such addition was not justified. The addition is by estimating the net profit. The AO has estimated the net The addition is by estimating the net profit. The AO has estimated the net The addition is by estimating the net profit. The AO has estimated the net profit at 2% of profit at 2% of the turnover and further separately added the other items of separately added the other items of income as other income in this process the A income as other income in this process the AO has estimated the business has estimated the business income at 2% at Rs. 2,96,05,303/ income at 2% at Rs. 2,96,05,303/-, and separately added Rs. 69,70,413/ , and separately added Rs. 69,70,413/- as income from other sources which was part of the busine income from other sources which was part of the business receipts and so considered in earlier years. In fact the in comparative statement filed before considered in earlier years. In fact the in comparative statement filed before considered in earlier years. In fact the in comparative statement filed before the AO as called for by him, the computation of net profit and gross profit have as called for by him, the computation of net profit and gross profit have as called for by him, the computation of net profit and gross profit have been made by including such income. The net profit and gross profit rate was been made by including such income. The net profit and gross profit rate was been made by including such income. The net profit and gross profit rate was quite fair and re quite fair and reasonable in comparison to earlier years. But the A asonable in comparison to earlier years. But the AO has raised the net profit 2.5% on the turnover of Rs.1,48,02,65,126/ the net profit 2.5% on the turnover of Rs.1,48,02,65,126/-, which is much more , which is much more than the earlier years. The comparative chart of the net profit of last 3 years than the earlier years. The comparative chart of the net profit of last 3 years than the earlier years. The comparative chart of the net profit of last 3 years have also been filed in the writte have also been filed in the written submissions which has not been n submissions which has not been controverted by the Aa. In fact the comparative figures were also given to the controverted by the Aa. In fact the comparative figures were also given to the controverted by the Aa. In fact the comparative figures were also given to the AO in the course of assessment proceedings and he himself wanted the same. AO in the course of assessment proceedings and he himself wanted the same. AO in the course of assessment proceedings and he himself wanted the same. He has not given any reason as to why the earlier years comparative f He has not given any reason as to why the earlier years comparative f He has not given any reason as to why the earlier years comparative figures were not acceptable to him. The A were not acceptable to him. The AO while completing the assessment of the eting the assessment of the assessee u/s. 144 cannot ignore the past records which can be the best guide assessee u/s. 144 cannot ignore the past records which can be the best guide assessee u/s. 144 cannot ignore the past records which can be the best guide for estimating the income, even if he considered that the for estimating the income, even if he considered that the-assessee's income assessee's income is to be estimated par be estimated particularly when the AO has not brought on record of any has not brought on record of any comparable case comparable case to justify the net profit estimated by him. When the earlier ated by him. When the earlier year's comparative figures of the rate of profit is taken into account and year's comparative figures of the rate of profit is taken into account and year's comparative figures of the rate of profit is taken into account and keeping in mind the increase in the turn over the keeping in mind the increase in the turn over the net profit declared by the net profit declared by the assessee was quite fair and reasonable. No addition of any nature in the assessee was quite fair and reasonable. No addition of any nature in the assessee was quite fair and reasonable. No addition of any nature in the

17 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. trading account was called nor made in any earlier year when regular trading account was called nor made in any earlier year when regular trading account was called nor made in any earlier year when regular assessment was made. The assessee has already cited assessment was made. The assessee has already cited judge udgements in the written submissi written submissions. The elaborate submissions have been made in written submissions filed. The The elaborate submissions have been made in written submissions filed. The The elaborate submissions have been made in written submissions filed. The issue is covered by the order of covered by the order of Ld. CIT (A) for the assessment year 2011 A) for the assessment year 2011-12 and 2013-14. The 14. The Assessing Officer has also not made any adverse comment in has also not made any adverse comment in the remand report submi the remand report submitted by him. The rate of profit was quite fair rate of profit was quite fair and reasonable in comparison to earlier years. Henc reasonable in comparison to earlier years. Hence, no separate addition was e, no separate addition was called for since the same was part of the business income for which called for since the same was part of the business income for which called for since the same was part of the business income for which submissions have been separately made here above. submissions have been separately made here above. The issue is covered by the order of the CIT(A) for Assessment Year 2011 covered by the order of the CIT(A) for Assessment Year 2011 covered by the order of the CIT(A) for Assessment Year 2011-12 and 2013-14. No adverse comment has been made in the written submissions 14. No adverse comment has been made in the written submissions 14. No adverse comment has been made in the written submissions filed. I find that the A I find that the AO while making the addition has mentioned that while making the addition has mentioned that considering the facts of the the facts of the case it is apparent that the assessee failed to satisfied the that the assessee failed to satisfied the assessing officer about the correctness or completeness of the accounts of the assessing officer about the correctness or completeness of the accounts of the assessing officer about the correctness or completeness of the accounts of the assessee that whether the method of accounting provided in section 145 (1) assessee that whether the method of accounting provided in section 145 (1) assessee that whether the method of accounting provided in section 145 (1) has been following by the assessee or income has been c been following by the assessee or income has been computed in accordance ted in accordance with the standard notified under section 145(1) of the act or not. The A with the standard notified under section 145(1) of the act or not. The A with the standard notified under section 145(1) of the act or not. The AO at the same time did not mentioned in his order what are the mistakes in the books of same time did not mentioned in his order what are the mistakes in the books of same time did not mentioned in his order what are the mistakes in the books of accounts of the appellate company, The A accounts of the appellate company, The AO has also not pointed out the issues has also not pointed out the issues of deviation from the method of accounting provided in section 145 (1) or of deviation from the method of accounting provided in section 145 (1) or of deviation from the method of accounting provided in section 145 (1) or income has not been computed in accordance with the standard notified under income has not been computed in accordance with the standard notified under income has not been computed in accordance with the standard notified under section 145(1) of the act. There was nothing on record to show that the section 145(1) of the act. There was nothing on record to show that the section 145(1) of the act. There was nothing on record to show that the assessing officer come to the conc assessing officer come to the conclusion that the books of accounts maintained lusion that the books of accounts maintained by the appellate were incorrect, incomplete, unreliable and consequently liable by the appellate were incorrect, incomplete, unreliable and consequently liable by the appellate were incorrect, incomplete, unreliable and consequently liable for rejection. The gross profit of the appellate company for the year 2013 for rejection. The gross profit of the appellate company for the year 2013 for rejection. The gross profit of the appellate company for the year 2013-14 was 4.30 % as against the gross profit of 4.08 % i was 4.30 % as against the gross profit of 4.08 % in the preceding year i.e. the preceding year i.e. 2011-12 and it was 4.10 % in the year 2014 12 and it was 4.10 % in the year 2014-15. The AO has also separately has also separately added Rs. 69,70,413/- as income from other sources which was part of the added Rs. 69,70,413/- as income from other sources which was part of the added Rs. 69,70,413/- as income from other sources which was part of the business receipts. In fact, in the comparative statement filed before the A business receipts. In fact, in the comparative statement filed before the A business receipts. In fact, in the comparative statement filed before the AO as called for by him, the. computation of net profit and gross profit .have been d for by him, the. computation of net profit and gross profit .have been d for by him, the. computation of net profit and gross profit .have been made by including such income. The A made by including such income. The AO should have started his computation should have started his computation or the return income and further add or the return income and further add all the addition/disallowance made by /disallowance made by him in the assessment order. Keepi him in the assessment order. Keeping in view of above, the A ng in view of above, the AO is directed to delete these addition. delete these addition. These grounds of appeal are allowed.” ” 17.1. These factual findings are not controverted by the ld. CIT D/R. Hence, we uphold factual findings are not controverted by the ld. CIT D/R. Hence, we uphold factual findings are not controverted by the ld. CIT D/R. Hence, we uphold the same and dismiss this ground of the revenue the same and dismiss this ground of the revenue for both the Assessment Years ssment Years.

The ld. CIT(A) while disposing Ground No. 7 for the Assessment Year 2014 The ld. CIT(A) while disposing Ground No. 7 for the Assessment Year 2014 The ld. CIT(A) while disposing Ground No. 7 for the Assessment Year 2014-15, held as follows:-

18 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. “I have considered the submissions of the authorized represen “I have considered the submissions of the authorized representative of the appellant as tative of the appellant as well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. before the assessing officer during the assessment proceedings. The AR of the appellate has submitted that the AO has added back Rs. 11,86,90, The AR of the appellate has submitted that the AO has added back Rs. 11,86,90, The AR of the appellate has submitted that the AO has added back Rs. 11,86,90,207/- (taken in ground No. 7) as other current liabilities. The list of other current liabilities (taken in ground No. 7) as other current liabilities. The list of other current liabilities (taken in ground No. 7) as other current liabilities. The list of other current liabilities were available in the schedule to the balance sheet duly filed before the AO. The details were available in the schedule to the balance sheet duly filed before the AO. The details were available in the schedule to the balance sheet duly filed before the AO. The details were filed before the AO, a copy of which is enclosed herewith. From were filed before the AO, a copy of which is enclosed herewith. From were filed before the AO, a copy of which is enclosed herewith. From the details it is evident that the amount of Rs. 11,86,90,207/ evident that the amount of Rs. 11,86,90,207/- can be bifurcated into two parts Le Rs. can be bifurcated into two parts Le Rs. 1,28,09,245/- which is against the advances from customers and Rs. 11,05,01,600/ 1,28,09,245/- which is against the advances from customers and Rs. 11,05,01,600/ 1,28,09,245/- which is against the advances from customers and Rs. 11,05,01,600/- which is against various other liabilities. As against the outstandin which is against various other liabilities. As against the outstanding balance of Rs. g balance of Rs. 1,28,09,245/- it is submitted that the same are the money advanced by various it is submitted that the same are the money advanced by various it is submitted that the same are the money advanced by various customers with whom the assessee is doing regular business. The A.O. ought to have customers with whom the assessee is doing regular business. The A.O. ought to have customers with whom the assessee is doing regular business. The A.O. ought to have conducted independent queries from the customers when the details were availab conducted independent queries from the customers when the details were availab conducted independent queries from the customers when the details were available with him in the balance sheet filed before him. As regards to the standing balance of with him in the balance sheet filed before him. As regards to the standing balance of with him in the balance sheet filed before him. As regards to the standing balance of Rs. 11,86,90,207/- it is submitted that the said amount represents the Electricity it is submitted that the said amount represents the Electricity it is submitted that the said amount represents the Electricity expenses Rs.17,274/-, Telephone expenses Rs. 7,677/ , Telephone expenses Rs. 7,677/-, Other maintenance charge Rs. , Other maintenance charge Rs. 35,532/-, Security deposit against Rs. 11,00,00,000/ , Security deposit against Rs. 11,00,00,000/- warehouse, Salary payable Rs. warehouse, Salary payable Rs. 1,94,083/- and Others Rs. 2,47,036/ and Others Rs. 2,47,036/-. From the above it is can be seen that a sum of Rs. . From the above it is can be seen that a sum of Rs. 5,01,600/- is against the dues which are, obligatory in nature and were even paid is against the dues which are, obligatory in nature and were even paid is against the dues which are, obligatory in nature and were even paid in the next year. As far as the security deposit of Rs. 11,00,00,000/ the next year. As far as the security deposit of Rs. 11,00,00,000/ the next year. As far as the security deposit of Rs. 11,00,00,000/- against the warehouse is concerned, the assessee during the relevant year had entered into an warehouse is concerned, the assessee during the relevant year had entered into an warehouse is concerned, the assessee during the relevant year had entered into an agreement with SujaJi Fashion Pvt Ltd wherein as per the terms of the agreement the agreement with SujaJi Fashion Pvt Ltd wherein as per the terms of the agreement the agreement with SujaJi Fashion Pvt Ltd wherein as per the terms of the agreement the other party would had to pay a sum of Rs. 11 crores to the assessee for the purpose of arty would had to pay a sum of Rs. 11 crores to the assessee for the purpose of arty would had to pay a sum of Rs. 11 crores to the assessee for the purpose of acquisition of land and construction of the warehouse. Copy of the agreement is acquisition of land and construction of the warehouse. Copy of the agreement is acquisition of land and construction of the warehouse. Copy of the agreement is enclosed herewith for your kind perusal. Thus, the said amount of Rs. 11 crore being enclosed herewith for your kind perusal. Thus, the said amount of Rs. 11 crore being enclosed herewith for your kind perusal. Thus, the said amount of Rs. 11 crore being the amount received as per agreement cannot be added. It is further submitted that all received as per agreement cannot be added. It is further submitted that all received as per agreement cannot be added. It is further submitted that all the details relating to the other current liabilities was there before the A.O. The A.O. the details relating to the other current liabilities was there before the A.O. The A.O. the details relating to the other current liabilities was there before the A.O. The A.O. even had the individual names of the parties and thus he ought to have verified the even had the individual names of the parties and thus he ought to have verified the even had the individual names of the parties and thus he ought to have verified the same independently before completing the assessment u/s 144. The elaborate dependently before completing the assessment u/s 144. The elaborate dependently before completing the assessment u/s 144. The elaborate submissions have been made in the written submissions filed twice and all the details submissions have been made in the written submissions filed twice and all the details submissions have been made in the written submissions filed twice and all the details and evidences were filed. No adverse comment has been made in the two remand and evidences were filed. No adverse comment has been made in the two remand and evidences were filed. No adverse comment has been made in the two remand reports. Details of each reports. Details of each and every item and head wise detail of the current liabilities and every item and head wise detail of the current liabilities was filed. Each and every head of the current liability was explained in the written was filed. Each and every head of the current liability was explained in the written was filed. Each and every head of the current liability was explained in the written submissions filed twice. There is no adverse comment of the AO. No such additions submissions filed twice. There is no adverse comment of the AO. No such additions submissions filed twice. There is no adverse comment of the AO. No such additions were ever made. I find that the details of other current liabilities were again filed along with the written at the details of other current liabilities were again filed along with the written at the details of other current liabilities were again filed along with the written submissions twice at the time of remand report stage. The AO did not made any submissions twice at the time of remand report stage. The AO did not made any submissions twice at the time of remand report stage. The AO did not made any specific addition on trade payables. There is no adverse comments made by the AO on specific addition on trade payables. There is no adverse comments made by the AO on specific addition on trade payables. There is no adverse comments made by the AO on merit on the other current liabilities and no specific negative observation were made he other current liabilities and no specific negative observation were made he other current liabilities and no specific negative observation were made on the addition as made by him in the assessment order. In view of above, the A on the addition as made by him in the assessment order. In view of above, the A on the addition as made by him in the assessment order. In view of above, the AO is directed to delete the addition. This ground of appeal is allowed.” directed to delete the addition. This ground of appeal is allowed.” 18.1. These factual findings These factual findings are not controverted by the ld. CIT D/R. Hence, we uphold are not controverted by the ld. CIT D/R. Hence, we uphold the same and dismiss this ground of the revenue. the same and dismiss this ground of the revenue.

19 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. 19. Foreign Exchange Loss : Foreign Exchange Loss :- (only for Assessment Year 2014-15)

The ld. CIT(A) while disposing off the Additional Ground The ld. CIT(A) while disposing off the Additional Ground 1 for the Assessment for the Assessment Year 2014-15, at page 26 & 27, held as follows: 15, at page 26 & 27, held as follows:-

“I have considered the submissions of the authorized representative of the appellant as “I have considered the submissions of the authorized representative of the appellant as “I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record well as the assessment order framed in the light of the materials available on record before the assessing officer during before the assessing officer during the assessment proceedings. The AR of the appellate has submitted that the assessee has taken additional gr The AR of the appellate has submitted that the assessee has taken additional gr The AR of the appellate has submitted that the assessee has taken additional ground relating to the disallowance of Rs. 50,43,859/ relating to the disallowance of Rs. 50,43,859/- being foreign exchange loss by the AO being foreign exchange loss by the AO treating the same as speculation loss. The assessee is a treating the same as speculation loss. The assessee is an exporter and has to m n exporter and has to make provision for rate difference of the foreign currency at the time of provision for rate difference of the foreign currency at the time of provision for rate difference of the foreign currency at the time of export and fluctuations afterwards. It was categorically mentioned in the profi afterwards. It was categorically mentioned in the profit and loss account t and loss account that there was fluctuation on the purchase of goods in respect fluctuation on the purchase of goods in respect of foreign foreign currency at the time of placement o the time of placement of order and at the time of actual payment. Such loss on foreign f order and at the time of actual payment. Such loss on foreign currency was debited the trading account under cost of goods sold and the same currency was debited the trading account under cost of goods sold and the same currency was debited the trading account under cost of goods sold and the same was duly certified by the Auditor duly certified by the Auditor as the foreign currency loss on purchase of goods purchase of goods therefore in these circumstance therefore in these circumstances it cannot be said to be speculation loss. The AR of the cannot be said to be speculation loss. The AR of the appellate has further placed his reliance e has further placed his reliance on the judgment of the Hon'ble Supreme on the judgment of the Hon'ble Supreme Court has in the case of Sutlej Cotton Mills Lt Court has in the case of Sutlej Cotton Mills Ltd. vs. Commissioner of Income Tax 1979 f Income Tax 1979 AIR, 5 1979 SCR (1) 976 wherein it was held that the foreign exchange loss arising in AIR, 5 1979 SCR (1) 976 wherein it was held that the foreign exchange loss arising in AIR, 5 1979 SCR (1) 976 wherein it was held that the foreign exchange loss arising in the course business was allowable as deduction u/s 37(1) of the Act. the course business was allowable as deduction u/s 37(1) of the Act. I find that the A.O. in the assessment has nowhere doubted the genuinity of the loss I find that the A.O. in the assessment has nowhere doubted the genuinity of the loss I find that the A.O. in the assessment has nowhere doubted the genuinity of the loss incurred by the assessee. the Assessing Officer has not adversely comment on the same incurred by the assessee. the Assessing Officer has not adversely comment on the same incurred by the assessee. the Assessing Officer has not adversely comment on the same at the time of sending the remand report in the matter. Keeping in view of above, the at the time of sending the remand report in the matter. Keeping in view of above, the at the time of sending the remand report in the matter. Keeping in view of above, the AO is directed to delete the addition. AO is directed to delete the addition. This ground of appeal is allowed.” This ground of appeal is allowed.” 19.1. The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). Hence, we uphold the same and dismiss this ground of the revenue. Hence, we uphold the same and dismiss this ground of the revenue.

The ld. CIT(A) while disposing off the Additional Ground 2 for the Assessment The ld. CIT(A) while disposing off the Additional Ground 2 for the Assessment The ld. CIT(A) while disposing off the Additional Ground 2 for the Assessment Year 2014-15, at page 27 & 28, held as follows: 15, at page 27 & 28, held as follows:-

“I have considered the submissions of the authorized representative of the appellant as “I have considered the submissions of the authorized representative of the appellant as “I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record assessment order framed in the light of the materials available on record assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. before the assessing officer during the assessment proceedings. The AR of the appellate has submitted that the assessee has taken another additional The AR of the appellate has submitted that the assessee has taken another additional The AR of the appellate has submitted that the assessee has taken another additional ground relating to the admissibi ground relating to the admissibility of depreciation denied by the AO on addition of the lity of depreciation denied by the AO on addition of the new assets. The assessee during the 'relevant year had shown net purchase of plant The assessee during the 'relevant year had shown net purchase of plant The assessee during the 'relevant year had shown net purchase of plant and machinery amounting to Rs. 5,46,645/ and machinery amounting to Rs. 5,46,645/- and computers worth Rs. 2,76,990/ and computers worth Rs. 2,76,990/-. The addition of the assets were duly r addition of the assets were duly reflected in Tax Audit Report and was certified by the eflected in Tax Audit Report and was certified by the Auditor. The A.O. has not brought any material evidence to reject the claim of the Auditor. The A.O. has not brought any material evidence to reject the claim of the Auditor. The A.O. has not brought any material evidence to reject the claim of the assessee or to disbelieve the Tax Audit Report. Thus, the A.O. was not correct in assessee or to disbelieve the Tax Audit Report. Thus, the A.O. was not correct in assessee or to disbelieve the Tax Audit Report. Thus, the A.O. was not correct in disallowing the claim of depreciation disallowing the claim of depreciation on the assets purchased during the relevant year. on the assets purchased during the relevant year.

20 ITA No. 131/Kol/2018 Assessment Year: 2013-14 C.O. No. 33/Kol/2018 Assessment Year: 2013-14 ITA No. 836/Kol/2018 Assessment Year: 2014-15 M/s. Sudarshan Paper & Board Pvt. Ltd M/s. Sudarshan Paper & Board Pvt. Ltd. The elaborate submissions have been made in the written submissions filed along with The elaborate submissions have been made in the written submissions filed along with The elaborate submissions have been made in the written submissions filed along with the evidence of the purchase of the plant and machinery on which depreciation was the evidence of the purchase of the plant and machinery on which depreciation was the evidence of the purchase of the plant and machinery on which depreciation was claimed. No adverse comment have been claimed. No adverse comment have been made either in the bills of purchase or in the made either in the bills of purchase or in the claim for depreciation. In view of above, the AO is directed to verify the claim of the appellate being factual In view of above, the AO is directed to verify the claim of the appellate being factual In view of above, the AO is directed to verify the claim of the appellate being factual issue and as mentioned in the tax audit report. The Appellate has directed to file all issue and as mentioned in the tax audit report. The Appellate has directed to file all issue and as mentioned in the tax audit report. The Appellate has directed to file all relevant papers before the AO. The Appellate may be given an opportunity before papers before the AO. The Appellate may be given an opportunity before papers before the AO. The Appellate may be given an opportunity before deciding the issue to file his submission in the matter. deciding the issue to file his submission in the matter. This ground of appeal is This ground of appeal is allowed for statistical purposes. allowed for statistical purposes.” 20.1. The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). The ld. CIT D/R, could not controvert these factual findings of the ld. CIT(A). Hence, we uphold the same and dismiss this ground of the revenue. Hence, we uphold the same and dismiss this ground of the revenue.

Kolkata, the Kolkata, the 1st day of April, 2021.

Sd/- Sd/- J. Sudhakar Reddy] [Aby T. Varkey] [J. Sudhakar Reddy Judicial Member Accountant Member Accountant Member Dated : 01.04.2021 {SC SPS} Copy of the order forwarded to: M/s. Sudarshan Paper & Board Pvt. Ltd 1. M/s. Sudarshan Paper & Board Pvt. Ltd 27, Brabourne Road Room No. 311 Kolkata – 700 001 2. Deputy Commissioner of Income Tax, Circle Deputy Commissioner of Income Tax, Circle-4(2), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.