DCIT, CIRCLE-7(1), DELHI vs. DLF LIMITED, DELHI

3. Whether on the facts and circumstances of the case and in law, the Ld. NFAC has erred in deleting the addition of Rs. 87,56,26,373/- made by the AO on account of disallowance of expenses related to exempted income u/s 14A r.w Rule 8D of the Act ignoring that the AO has categorically held that the assessee has made disallowance of expenses u/s 14A on estimate basis and no working has been submitted as per the provision of Rule 8D r.w.s 14A of the Act?

4. Whether the Ld. NFAC under the facts and circumstances of the case and in law is justified in deleting the addition of account of reclassification of Income from house property amounting to Rs 21,27,10,118/-.

5. Whether the Ld. NFAC under the facts and circumstances of the case and in law was justified in deleting the addition of Rs. 3,98,74,706/- made by the AO on account of disallowance of expenses of Helicopter and Aircraft which were not related to business of assessee.

6. Whether on the facts and circumstances of the case the CIT(A) was justified in allowing the alternate claim of the assessee amounting to Rs.653,32,48,000/- in case the principal claim is disallowed.

means applying different standards and parameters on budgeted and actual cost for IDC in POCM working. Hence, according to me, the method followed by the Company i.e. charging actual IDC cost based on the total project area of Phase-Y and thereby apportioning and applying the same on the actual area launched is the correct method adopted by the company and hence the working of the Special Auditor and Assessing Officer is not correct and same cannot be applied while working out the revenue as per POCM. 9.9 I am therefore, of the considered view that Assessing Officer was not justified in replacing the figures of budgeted IDC and actual IDC cost incurred for recognizing revenue as per POCM Method taken by the appellant company in its working for recognizing revenue on the basis of POCM method. Hence, the addition of Rs. 76,51,08,140/- made by the ASSESSING OFFICER on the basis of apportionment of actual IDC cost only on the launched area: and ignoring the increased saleable area of the Magnolia and Belaire projects is uncalled for and the same is, therefore, deleted.” 6.3.3 The ITAT upheld the order of CIT(A) in assessment year 2009-10 vide its order dated 10.09.2020 in and the subsequent years upto A.Y. 2016-17 in the appellant’s own case. Recently, in its consolidated order dated 19.07.2023 in ITA No. 5978/Del/2017, 2238/Del/2019 and 5919/Del/2019 for assessment years 2014-15 to 2016-17 respectively, the issue of adoption of POCM has been decided in favour of the appellant by following its own order in A.Y. 2009- 10. 6.3.4 Since there is no change in the facts and circumstances of the case as compared to earlier years and the POCM working of the appellant has stood the test of appeal upto ITAT for A.Y. 2006-07 to 2016-17, it is held that the POCM working of the appellant cannot be interfered with and, accordingly, the addition of Rs. 703,21,82,434/- made by the AO is deleted.” In view of the aforesaid finding, we find that Ld. CIT(A) has given a correct finding and as submitted by the Ld. AR for the assessee that the instant issue is squarely covered in favour of the assessee vide ITAT order dated 11.3.2016 for AY 2006-07 which has been followed in all the subsequent years upto 2016-17, hence, respectfully following the said precedent in assessee’s own case, we uphold the action of the Ld. CIT(A) and reject the Ground No. 1 raised by the Revenue. ii) As regards deletion of addition on account of disallowance on account of capitalization of interest expenses made by the Assessing Officer is concerned. Upon AO’s addition, Ld. CIT(A) deleted the addition by concluding as under:- “7.3.2 It is pertinent to mention here that the issue of capitalization of interest has been coming up in the appellant’s case in the various assessment years. The same has been decided in favour of the appellant in the various assessment years. The Hon’ble ITAT ‘B’ Bench Delhi vide its latest order dated 19.07.2023 in the appellant’s own case in 2238/Del/2019 and 5919/Del/2019 for AY 2014- 15 to 2016-17 respectively has rejected the artificial formula adopted by the AO for making disallowance on account of capitalization of interest. The ITAT held that the issue is covered in favour of the assessee in its own case for AY 2006-07 in ITA NO. 2677/Del/2011. The findings of ITAT in para 49 of its order for AY 2006-07 have been reproduced by the ITAT in para 8 of its order dated 19-07-2023 (supra). The ITAT in its order dated 16.07.2023 upheld the order of CIT(A) deleting the disallowance made by the AO on account of capitalization of interest. The findings of CIT(A) for AY 2016- 17 deleting the said disallowance are reproduced below:- “8.4 I have considered the facts of the case, finding of the AO and submissions of the appellant. Having gone through the submissions of the appellant, the order of assessment passed by the Assessing Officer and the material evidences placed on the record, it emerges that the Assessing Officer made the national disallowance of the interest expenses of Rs. 51,53,80,000/- on account of capitalizing the same. This very issue has been examined by my predecessor in the A.Y.

2009-10. His details observations on the issue in consideration are reproduced …………….. …………….. 1.19 It is observed from the facts of the present case that the Assessing Officer has not identified any specific diversion of funds which were not used for the purposes of business. The funds borrowed from the banks and self-generated funds have either been utilized in the construction business or the same have been advanced to the subsidiaries, associate companies for furthering of the business of the assessee or given as loan to subsidiary and associate companies at an appropriate rate of interest and the appellant has earned the interest income thereon, which has been offered for the tax during the year. It is noted that there is no diversion of money for non-business purposes. The loans to the subsidiaries have been given for the business purposes and interest has been charged on the same. 8.6 It is a matter of record that the borrowed funds have been utilized for the business of the real estate and the loans and advances to the subsidiaries. The company has earned the interest of Rs. 723.09 crore from the loans and advances which has been offered as the income. From the financial accounts of the appellant, it is evident that the in the year under consideration, the appellant company has incurred interest expenses of Rs. 1,577.83 crores of which Rs.1,377.51 has been debited to the Profit & Loss Account and the balance Rs.200.32 Crores has been capitalized in various projects reflected in the balance sheet under the head, "work in progress” (classified & as stock) and “capital work in progress” (classified as fixed assets). This’ interest was capitalized as per Accounting Standard, AS-16 issued by the Institute of Chartered Accountants of India (ICAI). In view of the above facts, it is clear that the appellant company has effectively claimed the net interest of Rs.522.76 crore on the term loans which have been used for the purposes of business of the company. Hence, no further disallowance or capitalization of interest is warranted and there is no question of making any adhoc disallowance. This is further supported by the fact that the balance sheet of the company in the schedule 14 as on 31.03.2016 shows the closing inventory of Rs.8,112.73 crore, which indicates the use of the substantial amount of interest bearing funds. It is observed that the facts and circumstances of the case regarding the capitalization of interest in this year are verbatim identical to the Assessment Year 2009-10. Therefore, I have no hesitation to follow the detailed reasoning given by my predecessor(s) in the appellate orders for the earlier Assessment Years, and accordingly, it is held that capitalization of interest of Rs. 51,53,80,000/- on notional basis by the Assessing Officer based on various permutations was not justified and, accordingly, the addition made by the AO at Rs.51,53,80,000/- is not sustainable and it is hereby deleted.’’ (emphasis supplied) 7.3.3 It is observed that the facts and circumstances with regard to capitalization of interest in this year are identical to the facts in the assessment year 2009-10 and subsequent assessment years. I have no reason to differ with the findings of my predecessors in the appellate orders for the earlier assessment years. Accordingly, I am of the considered view that capitalization of interest of Rs. 20,19,62,000/- on notional basis by the AO based on various permutations is not justified. The claim of interest by the appellant which is in accordance, with the provisions of section 36(1 )(iii) of the Act deserves to be allowed. Therefore, the addition of Rs. 20,19,62,000/- is not sustainable and hence the same is deleted.” In view of the aforesaid finding, we find that Ld. CIT(A) has given a correct finding and as submitted by the Ld. AR for the assessee that the instant issue is squarely covered in favour of the assessee vide ITAT order dated 11.3.2016 for AY 2006-07 which has been followed in all the subsequent years upto AY 2016-17, hence, respectfully following the said precedent in assessee’s own case, we uphold the action of the Ld. CIT(A) and reject the Ground No. 2 raised by the Revenue. 7 iii) As regards deletion of disallowance of expenses u/s. 14A read with Rule 8D(2)(ii) & (iii) made by the Assessing Officer is concerned. Upon AO’s addition, Ld. CIT(A) deleted the addition by concluding as under:- “8.3.2 It may further be mentioned here that the issue of disallowance of expenses u/s 14A r.w. Rule 8D has been decided by CIT(A) as well as ITAT in favour of the appellant in the various assessment years in its own case. The Hon’ble ITAT ‘B’ Bench Delhi vide its latest order-dated 19.07.2023 in the appellant’s own case in 2238/Del/201.9 and 5919/Del/2019 for AY 2014-15 to 2016-17 respectively has decided the issue in its favour by relying on the orders of ITAT Delhi in the appellant’s own case in ITA No. 4187/Del/2015 for AY.2010-11 and ITA No. 4159/Del/2015 and also referring to the decision of the Hon’ble Delhi High Court in Maxopp Investment Ltd.(supra), upholding the order of CIT(A) and rejecting the ground of appeal raised by the Revenue. The relevant para of the ITAT’s order is reproduced below:- “ The issue has been considered in case of assessee in assessment year 2010-11 vide ITA no. 4187/Del/2015 order dated 29.09.2020 and it has been further followed in A.Y. 2011-12 vide ITA no. 4159/Del/2015. The Ld. CIT(A) has considered the fact that assessee had made his own disallowance for which Assessing Officer has not recorded his satisfaction about disallowance so made by the appellant and relying judgment of Hon’ble Delhi High Court in Maxopp Investment Ltd. \/s CIT247 CTR 162(Del), benefited the assessee. As the same being settled proposition of law requires no interference. The ground is rejected. ” 8.3.3 Since there is no change in the facts and circumstances on the issue in the assessment year under consideration as compared to earlier years, I have no hesitation in following the detailed reasoning given by CIT(A) in the earlier assessment years. Accordingly, it is held that the addition of Rs. 87,56,26,373/- u/s. 14A r.w. Rule 8D made by the AO is not justified and the same is deleted.” In view of the aforesaid finding, we find that Ld. CIT(A) has given a correct finding and as submitted by the Ld. AR for the assessee that the instant issue is squarely covered in favour of the assessee vide ITAT order for AY 2010-11 to 2016-17 wherein the disallowance was deleted on the ground of non-recording of satisfaction in terms of section 14(2), hence, respectfully following the said precedent in assessee’s own case, we uphold the action of the Ld. CIT(A) and reject the Ground No. 3 raised by the Revenue. iv) As regards deletion of addition on account of reclassification of Income from house property to income from business and profession made by the AO is concerned. Upon AO’s addition, Ld. CIT(A) deleted the addition by concluding as under:- “9.3.1 The issue regarding classification of income under the head ‘income from house property’ or ‘income from business and profession’ came up before the appellate authorities in respect of ‘DLF Centre’ belonging to DLF Universal Limited in the assessment year 1996-97. This property was also held by the company as stock- in-trade. The ITAT, Delhi, while discussing other addition of depreciation in respect of ‘DLF Centre’, confirmed the stand of the assessee of offering the rental income from ‘DLF Centre’ under the head ‘Income from House Property’ by observing that the income would have been taxable as business income if the property would have been let out along with any machinery, plant or furniture. Therefore, the issue of reclassification of income from properties has been adjudicated in favor of the appellant in A.Y. 1996-97 vide ITAT’s order dated 06.06.2008 in and 3522/Del/2000 for 1996-97. The relevant Paras of the ITAT order are reproduced below:- “24.3 From the above facts and the case law relied upon both by the revenue and the assessee, It is clear that there was no letting of any machinery, plant or furniture belonging to the assessee. Once this finding of fact is not controverted, then there can be only one conclusion that letting of building which has certain amenities for which no separate charges are being recovered by the assessee would be liable to tax under the “income from, house property”. Before parting, we would also like to deal with the alternate submission by the counsel of the assessee Mr. Pradeep Dinodia that in case this is taxed as “income from other sources”, then deduction of depreciation and annual repairs would still have to be allowed to the assessee. This would, in fact, make the whole exercise of revenue to change the head of income as purely academic as there would be very marginal difference between the allowance of depreciation and repairs and a notional allowance of 20% in the year under review. We agree with the assessee’s counsel that there is no gain to the revenue in any case by shifting the head of income from one to the other. ” “24.4 Further, the A.O. in prior years has himself taxed the rental income of DLF Centre as “income from house property” and no changes in the facts and circumstances of the case are discernible in the year under review. ” “24.5 Having considered all the facts and circumstances of the case, the orders of the A.O. as well as the CIT (Appeal) and the arguments both of the learned CIT DR and the AR of the assessee, we are of the considered opinion that the CIT (Appeal) is correct in holding that the income from DLF Centre should be held under the head “Income from house property” and does not call for any interference. The revenue’s appeal on this ground is dismissed. ” 9.3.2 It may be mentioned here that the. appeals filed by the Revenue for A.Y. 1996-97 and 1997-98 were dismissed by Hon’ble Delhi High Court vide its order dated 05.09.2017 in and 18.05.2017 in ITA No. 407/2009. The AO has observed that the Hon’ble ITAT in the above referred case for A.Y. 1996-97 did not deal with the issue of reclassification of income from properties. This observation of the AO, in the light of facts stated above, is factually incorrect. Applying the same ratio as that of ‘DLF Centre’ which was also held as stock-in-trade, the other properties held as stock-in-trade from which rental income is being derived are to be assessed under the head Income from house property’. In the assessment years 2016- 17 also, the same issue was decided in favor of the appellant in its own case by CIT(A)-34, Delhi, vide his order dated 30.04.2019 in appeal no. 186/18-19. The observations of CIT(A) are reproduced below:- “11.4 I have considered the facts of the case, finding of the AO and submission of the appellant. It is noted that the Assessing Officer has made the addition of Rs.24,34,94,843/- by treating part of the rental income from the property shown as stock in trade as "business income" as against "income from the house property" shown by the assessee, by following the earlier years assessment orders. It was submitted by the appellant that this issue is covered in favour of the assessee by the orders of CIT(A) in the preceding years from 2006-07 to 2015-16. It was further submitted that the ground is covered in its favour by the order of ITAT in A. Y. 1996-97. The issue has been examined by my predecessor in the A.Y. 2009-10. For the sake of brevity, his detailed observations on this issue are reproduced as under:- “I have considered the submission of the appellant and observation of the ASSESSING OFFICER and decision of Hon’ble ITAT for A.Y. 1996-97 in appellant’s own case and decision of the Hon’ble CIT(A)- XVIII for A.Y. 2006-07 and my own decisions in appellant’s own case for A.Y. 2007-08 and 2008-09. It is seen that the issue in this ground is covered in favour of the appellant by the order of Hon’ble ITAT in appellant’s own case for AY 1996-97 of the appellant has received income from the properties owned by it and such properties are reflecting in balance sheet as stock in trade. The appellant has furnished the receipt of house tax payment with respect to above said properties during the course of assessment proceedings which established that said properties belong to appellant and owned by it. It is noticed that the Assessing Officer has made the addition by reclassifying the income by relying upon the judgment of Hon’ble Gujarat High Court in the case of CIT vs. Neha Builders Pvt. Ltd. (supra). However, there is no dispute on the facts noted above. Taking into consideration the order of Hon’ble ITAT in the appellant’s own case for earlier years and the decision in CIT vs. National & Grindlays Bank Limited (supra) and CIT (A)’s order for the immediately preceding years relevant to AY 2006-07, 2007-08 & 2008-09 in appellant’s own case the income received from the properties owned by the appellant and shown in the balance sheet is to be assessed as income from house property. ASSESSING OFFICER is directed to treat the income from such properties as income from “house property” and allow deduction under section24(a) of the IT Act. Hence, the addition made by the ASSESSING OFFICER of Rs. 13,82,35,746/- is deleted. In this regard, reliance is placed on the judgment of Hon’ble Kolkata High Court in the case of Azimganj Estate Pvt. Ltd. vs. CIT [2013] 352 ITR 82 (Cal):- Income from house property-lncome from business - Construction Business- Rental Income from unsold Flats- Assessable as Income from house Property- Income Tax Act- ss, 14, 22.

The facts ofAheJ0ove cited judicial pronouncements are identical with the facts of appellant's case, therefore, ratio of the said judgment is squarely applicable in the facts of the appellant’s case. Hence, the addition made on account of disallowance on deduction under section 24(a) of the IT Act u/as not justified and same is deleted." 11.5 It is noted that the facts and circumstances of the present case, in this year, are similar and identical to the facts in the preceding years. Accordingly, I tend to follow the detailed reasoning given by my predecessor in the appellate order for the A.Y. 2009-10. Accordingly, the addition made by the Assessing Officer at Rs.24,34,94,843/- on account of reclassification of "income from the house property” to "business income" is not sustainable and it is hereby deleted. While disposing of the appeal, CIT(A), in para 11.4, of his order also dealt with the judgment of Hon’ble Gujarat High Court in CIT vs Neha Builders 296ITR 661, which has also been referred by the AO in the impugned order. Recently, ITAT Delhi, vide its order dated 19.07.2023 in 2238/Del/2019 and 5919/Del/2019 has also decided the issue in favour of the appellant and dismissed the ground of appeal raised by the Revenue. Since the facts and circumstances this year are the same as in the earlier assessment years referred above on this issue, I have no hesitation in holding that the AO was not justified in reclassifying ‘income from house property’ to ‘income from business or profession’ and thereby making addition of Rs. 21,27,10,118/-. Accordingly, the addition of Rs. 21,27,10,118/- made by the AO is deleted.” In view of the aforesaid finding, we find that Ld. CIT(A) has given a correct finding and as submitted by the Ld. AR for the assessee that the instant issue is squarely covered in favour of the assessee vide ITAT order dated 11.3.2016 for AY 2006-07 which has been followed in all the subsequent years upto 2016-17, hence, respectfully following the said precedent in assessee’s own case, we uphold the action of the Ld. CIT(A) and reject the Ground No. 4 raised by the Revenue. v) As regards deletion of disallowance on account of Helicopter and Aircraft expenses made by the AO, treating them as not incurred wholly and exclusively for business purchase holding them personal in nature is concerned. Upon AO’s addition, Ld. CIT(A) deleted the addition by concluding as under:- “10.3.3 It may be pointed out here that similar expenses had been incurred by the appellant in the earlier years also and the same were allowed by the AO upto assessment for A.Y. 2009-10. Similar disallowance out of these expenses in A.Y. 2010-11 to 2016-17 made by the AO has been deleted by CIT(A) and the appeals filed by the department before the ITAT, Delhi have been dismissed. Recently, ITAT Delhi vide its order dated 19.07.2023 in 2238/Del/2019 and 5919/Del/2019 for A.Y. 2014-15 to 2016-17 respectively , by following the orders for the assessment years 2010-11 and 2011-12 has decided the issue against the Revenue. The relevant portion of the ITAT’s order is reproduced below:- “The issue arises out of addition made by the Ld. AO on account of personal nature expenses attributed to the use of helicopter and aircraft expenses treating them as hot incurred wholly & exclusively for business purpose. Ld. CIT(A) taking into account the nature of business activity of the assessee considered the observations of Ld. AO not sustainable and further holding that if any expenditure is identified as personal expenditure incurred on the directors and other employees it would fall within the meaning perquisite and is taxed accordingly. In asssessee’s own case for A. Y. 2010-11 (supra) the issue has been considered and decided in favour of the assessee…..This has been followed subsequently in assesssee’s own case for A.Y. 2010-11 and 2011-12(supra). In the light of aforesaid, following aforesaid, the ground has no substance, the same is decided against the Revenue.” 10.3.4 The facts of this year in respect of this addition are exactly similar to the facts in the earlier years where the addition made by the AO has been deleted by the CIT(A) and ITAT. Therefore, in the assessment year 2017-18 also, similar addition of Rs. 3,98,74,706/- made by the AO on estimated basis following earlier years orders, which have not stood the test of appeal, is not sustainable and hence the same is deleted.”

In view of the aforesaid finding, we find that Ld. CIT(A) has given a correct finding and as submitted by the Ld. AR for the assessee that the instant issue is squarely covered in favour of the assessee vide ITAT order dated 29.09.2020 for AY 2010-11 which has been followed in all the subsequent years upto 2016-17, hence, respectfully following the said precedent in assessee’s own case, we uphold the action of the Ld. CIT(A) and reject the Ground No. 5 raised by the Revenue. vi) As regards allowing to Alternate Claim under POCM as a consequence of disallowance of one-time claim of deduction in AY 2017-18 is concerned. Since we have already confirmed the deletion of addition made on account of recognition of revenue as per Percentage of Completion Method (POCM), thus the instant issue has now become infructuous and need not be adjudicated.

1. The Ld. CIT(A) has grossly erred in law and on the facts and in the circumstances of the appellant’s case in confirming the addition of Rs. 80,27,888/- on account of alleged unverified/ un-reconciled purchase transaction.

2. That the claim of expenses is supported from documentary evidences and the correctness of same being not dispute, the upholding of disallowance by CIT(A) is mechanical and on arbitrary basis.

8. Briefly stated facts are that assessee submitted details of sundry creditors vide letter dated 11.03.2021, the AO issued notices u/s. 133(6) to 12 parties to 14 verify the claim of transactions made by the assessee with them. AO observed that no reply to the notices u/s. 133(6) was furnished by M/s A & S Printographics Pvt. Ltd. and Kapil Bhukar. Hence, the AO held that the assessee had not provided the ledger confirmation in respect of outstanding creditor balance exceeding three years from M/s A&S Printographics Pvt. Ltd. (Rs. 6,48,968/-) and from Kapil Bhukar (Rs. 9,00,000/-) totaling to Rs. 15,48,968/-. AO further noted that in respect of the following creditors, the closing balance as shown by the assessee and as shown by the creditor was not matching and there were following discrepancies:- Name of the party Closing balance Closing balance Difference as per as per the assessee as per the party assessment order (Rs.) (Rs.) (Rs.) Balaji Mariline 1,73,954/- 10,05,768/- 23,26,646/- Pvt. Ltd. Le Millennia 12,34,556/- Nil 12,34,556/- Supermart LLP Aecom India 17,34,64,985/- 17,78,77,535/- 44,12,550/- Private Limited Total 79,73,752/- Therefore, total addition of Rs. 95,22,720/- (i.e. Rs. 15,48,968/- plus Rs. 79,73,752/-) was made by the AO on account of alleged unverified/ un- reconciled ledger balances.

appellant did not make any effort to prove the genuineness of purchases from these parties, when the AO had raised doubts in this regard in view of non-compliance of notices u/s 133(6) by these parties. The appellant could have produced these parties before the AO to prove their genuineness or could have filed confirmations from them or any other evidence to prove the genuineness of these purchases. Merely filing their name, address, PAN no. etc does not mean that the genuineness of purchases from these parties was proved by the appellant. As regards appellant’s reliance on the various judicial decisions for the proposition that an assessee cannot be penalised for failure of the third party to reply to the notices u/s 133(6), it may be mentioned here that in those cases sufficient evidence in the form of confirmation from the party delivery challan, sale tax return, sale tax challan etc. was filed to prove the genuineness of purchases. But in the appellant’s case, no such evidence to prove the genuineness of purchases from these two parties was filed. Therefore, reliance on these judicial precedents by the appellant is misplaced. Therefore, I am of the considered view that the AO was justified in making this addition of Rs. 15,48,968/- and the same is upheld. 11.3.1 As regards the addition of Rs. 79,73,752/- in respect of unreconciled differences in the ledger accounts of Balaji Mariline Private Limited, Le Millennia Supermart LLP and Aecom India Private Limited, it is seen that firstly, there is an arithmetical error in respect of the alleged difference in the account of Balaji Mariline Private Limited. As per the chart given in para 9.2 of the assessment order, in the case of Balaji

Mariline Private Limited, the closing balance as on 31.03.2018 as per the appellant and as per this party is Rs. 1,73,954/- and Rs. 10,05,768 respectively. Therefore, the difference should be Rs. 8,31,814/- whereas the AO has taken this difference as Rs. 23,26,646/- which is factually incorrect. Therefore, on the face of itself, the addition to the extent of Rs. 14,94,832/- (Rs.23,26,646-Rs.8,31,814) cannot be sustained due to arithmetical mistake and hence the addition to the extent Rs. 14,94.8321- in respect of difference in the account of this party is deleted. 11.3.2 As regards the remaining closing balance differences totaling to Rs. 64,78.920/- (Rs.8,31,814+Rs.12,34,556+Rs. 44.12,550) in respect of Balaji Mariline Private Limited, Le Millennia Supermart LLP and Aecom India Private Limited respectively, it is noticed that vide AO’s notice dated: 15.04.2021, the appellant was asked to file the reconciliation of the accounts of, inter-alia, the above mentioned three parties. The statement of account submitted to the AO by Balaji Mariline Private Limited was also enclosed with this notice and is available at page no. 472 of a paper book filed by the appellant. Therefore, it cannot be said that proper opportunity to file reconciliation in respect of these parties was not given by the AO. In these circumstances, I am of the considered view that the addition to the extent of Rs. 64,78,920/- (Rs. 79,73,752 - Rs. 14,94,832) in respect of unreconciled purchases is upheld. 11.3.3 In view of the above discussions, the addition to the extent of Rs. 14,94,832 is deleted and the balance addition of Rs.

80,27,888/- (Rs. 95,22,720- Rs.14,94,832) made by the AO in respect of unverified/unreconciled transactions is upheld.”