9911796707
TMI Blog2020 (10) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) deleted the addition ignoring the above fact and accepting the explanation of the assessee without any basis. (iii) That, the Ld. CIT (Appeals) erred in law as well as fact in deleting the addition of Rs. 5,97,186/- which was added by the A.O. as unexplained capital introduction from undisclosed sources. (iv) That, the Ld. CIT (Appeals) has failed to notice the fact that the assessee was unable to submit any details explaining source of addition of such fresh capital introduction with documentary evidence during the assessment proceeding. During remand proceeding, the assessee could not explain before A.O. the source of such capital introduced. The Ld. CIT (Appeals) deleted the addition ignoring the above fact and accepting the explanation of the assessee without proper reasons. (v) That, the Ld. CIT (Appeals) erred in law as well as fact in deleting the addition of Rs. 83,62,872/- which was added by the A.O. on a/c of sale suppression of rice bran. (vi) That, the Ld. CIT (Appeals) has failed to appreciate the fact the said addition on a/c of sale suppression of rice bran was made on the basis of impounded document MFP-30. (vii) That, the Ld. CIT (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132 of the Income tax Act, 1961 was conducted on 21.08.2013 in the business and residential premises of Maharaja Group of cases, Bargarh (M/s. Hotel Maharaja & Group). Simultaneously, survey operation was also conducted in the business-cum-office premises belonging to the assessee group. Since the search & seizure operation was conducted in this group cases during the financial year 2013-14 relevant to the assessment year 2014-15, the case of the assessee for the assessment year 2014-15 was taken up for scrutiny assessment by the AO u/s. 143(3) of the Income tax Act, 1961. Accordingly, the AO issued notice u/s. 142(1) of the Income tax Act, 1961 calling for the return of income of the assessee for the assessment year under consideration to be filed on or before the date specified in the said notice and served on the assessee for compliance. In response to the said notice, the assessee filed his return of income for the assessment year under consideration electronically on 21.09.2015 showing a total income of Rs. 13,00,990/- after claiming deduction under Chapter-VIA of the Income tax Act, 1961. From the return of income filed by the assessee, the AO found that the assessee derives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed here that in response to the said notice and questionnaire, Sri Sudip Sawdia, advocate & the authorized representative of the assessee appeared on 14.10.2015 and filed acknowledgement copy of ITR-V, computation statement of income, Form No.26AS, copy of audited profit & loss account, balance sheet without schedules and premium paid certificate issued by LIC of India etc. However, other details and/or documents called for vide the said questionnaire were not filed. Thereafter, the case was posted for hearing on 23.10.2015. On 23.10.2015, there was no compliance on the part of the assessee. The assessee also not filed time petition. Accordingly, the case was fixed for hearing on 13.11.2015 and communicated to the assessee vide letter dated 02.11.2015. On .11.2015 there was again no compliance. Later, the assessee filed a time petition by speed post which was received in this office on 16.11.2015. Considering the said time petition, the case of the assessee was posted for hearing on 27.11.2015 at 4.00 PM. But on 27.11.2015 also there was no compliance. Subsequently, the case was fixed for hearing on 11.01.2016 at 4.15 PM and communicated to him vide this office letter dated 29.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r." In spite of several opportunities given to the assessee as discussed above, the assessee failed to furnish details as called for. Since the assessee has not filed any details and/or explanation by establishing the identity proof of the sundry creditors, their creditworthiness and the genuineness of the transaction and produced relevant books of account from which it could have been verified, more particularly the party ledger accounts, the claim made on account of sundry creditors amounting to Rs. 7,72,400/- is treated as bogus and added to the total income of the assessee for the assessment year 2014-15. Addition: Rs. 7,72,400/-. 4. On verification of balance sheet, it is seen that during the year the assessee has shown to have introduced additional capital to the tune of Rs. 5,97,186/-. In this connection, the assessee was asked vide this office letter dated 11.02.2016 to file details explaining the source of addition of such fresh capital with documentary evidence. Even though the date of compliance to the said letter dated 11.02.2016 was given on 19.02.2016, as a usual practice, the assessee neither appeared on the given date to explain the source of additional capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,80,213/- Shree Shyam Products (Bran account) Page No.22 & 23, MFP-30 01.04.2013 to 28.04.2013 Rs. 18,77,683/- including opening balance of Rs. 8,32,053/- Shree Shyam Products (Bran account) Page No.24 & 25, MFP-30 01.05.2013 to 31.05.2013 Rs. 15,78,781/- including opening balance of Rs. 15,859/-. Thus, on perusal of the ledger accounts it is seen that all the sales are made in cash and the sale of bran has not been disclosed in the regular books of account. In this connection, statements Sri Deepak Sharma, Manager of M/s. Maharaja Food was recorded on 27.11.2013 wherein he has admitted that the sales of the said rice bran have not been recorded and disclosed. The relevant portions of the statements are reproduced herein under: "Q. No.8: Please go through the impounded loose sheet bundle MFP-30 at page No.9, 10 regarding the ledger of Maharaja Food Products in the books of Shree Shyam Products, for period 1.6.2013 27.6.2013 with opening balance of Rs. 7,78,781/-. All the receipts by you are in cash in respect of bran sales. How is Shree Shyam Products associated with you and how do you account for the above transactions in your books of accounts? The total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of rice bran. Further, Sri Deepak Sharma also failed to produce any material evidence in support of his claim. Thus, it is proved beyond reasonable doubt that the undisclosed sales of rice bran was out of extra production made from milling in rice mill i.e. M/s. Maharaja Food Products". In view of the above findings, the assessee vide letter in the form of questionnaire No. DCIT(Central)/SBP/2015-16/569, dated 24.09.2015 was required to explain the undisclosed sales of rice bran with documentary evidence on 13.10.2015. On this given date, Sri Sudip Sawdia, advocate and the authorized representative appeared and represented the case on behalf of the assessee. In response to the said questionnaire, he filed acknowledgment copy of ITR-V submitted for AY. 2013-14, computation statement of total income, Form No. 26AS, copy of audit report along with audited profit & loss account and balance sheet with relevant schedules and premium paid certificate issued by the LIC of India etc. Apart from the above, the authorized representative of the assessee did not file any details/documents including the explanation called for on the undisclosed sales of rice bran as discussed above. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (Qtls.) Excess/shorta ge (Qtls.) Paddy 36,077 25,835 (-) 10,245 Rice 3,808.70 4,354 ( + ) 545.30 Broken rice 123.72 409 ( + ) 285.28 Bran 139.67 56.25 R83.42 In this connection, a statement of Sri Deepak Sharma, Manager & brother of Sri Sanjay Sharma, Proprietor of M/s. Maharaja Food Products, who looks after business activities was recorded during the course of survey operation. During such proceeding, he was asked to explain the reasons for shortage/excess of stock found. In his reply Sri Sharma stated that there should not be such difference of stock. He also stated that the stock inventory was taken on eye estimate but at the same time he also assured to explain the stock difference later on after verifying the records. However, he failed to furnish reconciliation statement of stock till the date of preparation of Appraisal Report. During the course of post-search investigation, a statement of Sri Deepak Sharma was recorded on 27.11.2013. While recording his statement, he was categorically asked to explain the stock difference which he failed to do. In his statement he simply repeated the answer which he had given earlier in his statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t & loss account and balance sheet with relevant schedules and-premium paid certificate issued by the LIC of India etc. Apart from the above, the authorized representative of the assessee did not file any details/documents including the explanation called for on the issue as discussed above. Hence, the case was subsequently fixed for hearing on 23.10.2015, 13.11.2015, 27.11.2015, 11.01.2016, 28.01.2016 and lastly, on 19.02.2016. But all the time there was no compliance on the part of the assessee. The assessee has also not thought it proper and appropriate to file time petition except for the date of hearing fixed on 13.11.2015. Even though the assessee filed time petition for the proceeding dated 13.11.2015, he has not filed the same in time. The time petition filed by the assessee was received in this office on 16.11.2015 i.e. after the date posted for hearing. Since there was non-compliance on the part of the assessee all through the proceeding, a show-cause letter No. DCIT(Central)/SBP/201-16/1392 was issued to the assessee on 10.02.2016 for compliance on 19.02.2016. Even though the said letter was served on 10.02.2016, there was no compliance on 19.02.2016 on the part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be considered separately Rs. 1,896/- Rs. 14,00,994/- Add: Sundry creditors treated as bogus as discussed in the body of the assessment order vide Para No.3 Rs. 7,72,400/- Add: Income earned from undisclosed source and introduced as fresh capital as discussed in the order vide Para No.4 Rs. 5,97,186/- Add: Unpaid outstanding liabilities disallowed as discussed in the body of the order vide Para No.5. Rs. 1,37,001/- Add: Undisclosed sale of rice bran as, discussed in the body of assessment order vide Para No.6. Rs. 83,62,872/- Add: Shortage of stock of paddy & bran found during the course of survey operation as discussed in the body of the assessment order vide Para No.7. Rs. 1,28,72,786/- Add: Excess of rice & broken rice found during the course of Survey operation as discussed in the body of the assessment order vide Para No.7. Rs. 13,47,352/- Add: Income from bus plying as discussed in the body of the assessment order vide Para No.8 Rs. 2,40,000/- Add: Income from other sources (bank interest) as shown Rs. 1,896/- Gross total income Rs. 2,57,32,487/- Less : Deductiion u/s.80C .... Rs. 1,00,000/- u/s.80TTA... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,97,186 made holding income earned from undisclosed source and introduced as fresh capital, it is humbly submitted at the outset that there is no incriminating material found during the search as regards to this issue. Therefore, the learned Assessing Officer have no jurisdiction in making disallowance and thereby making addition, in view of various judicial authorities referred to above. 56. That it is further humbly submitted that the assessee Shri Sanjay Sharma is the Proprietor of two Proprietorship concerns -(I) M/s.Maharaja Food Products, Chkarkend having rice mill business and (2) Sanjay Sharma carrying on business of bus plying and trading besides earning income from other sources. The amount of Rs. 5,97,186 which is now in dispute, is the cash introduced by Sanjay Sharma (individual) in the firm M/s. Maharaja Food Products, on different dates as per ledger copies of both the concerns. The learned AO has made the impugned addition on the observation that the assessee did not explain regarding the source of such fresh capital introduced during the year, which is not at all correct. The assessee produced the books of account including the ledger account of respective fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Puranmal Sharma, Bargarh. In view of the above, without examining the accounts produced before him, the learned AO is not at all justified in holding the impugned amount of Rs. 5,97,186 as undisclosed income introduced as capital. The copy of respective ledger accounts are placed at PB page Nos. 88 and 89, which were not examined by the learned AO though produced before him. It is respectfully submitted that on the face of books of accounts and financial statements duly audited, the action of the Assessing Officer in making the impugned addition holding it as undisclosed income, is not all justified and therefore, the addition made on this count is liable to be deleted. It is prayed that the said addition may kindly be deleted. " 6.2 In the remand report the assessing officer has stated as below. "From the assessment record, return of income and computation of income, it is noticed that assessee has not shown any income from business of bus plying and trading. The source of capital introduced could not be explained. Therefore, Rs. 5,97,186 /- is considered as unexplained capital introduction in the hand of the assessee. " 6.3 In the rejoinder, the appellant has reiterated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (i) Transaction of Radhe Krishan- Rs. 2,80,213.00 (ii) Transaction of Shyam Product- Rs. 11,05,685.00 (iii)Transaction of Shyam Product- Rs. 10,45,630.00 (iv) Transaction of Shyam Product- Rs. 15,62,922.00 Rs. 3 9,94,450.00 Rs. 46,7 5,47 9.00 Thus the total transaction as per show cause notice comes to Rs. 46,75,479, which the assessee claims to be not relating to the assessee. 24. That the assessee right from beginning is denying to have sold bran/husk to Shri Shyam Products/Radhe Krishna. It is humbly submitted that during the asst. year 2014-15 the assessee has never sold rice bran/husk to Shree Shyam Product and Radhe Krishna as alleged. The Page No.9-10, Page 11, Page-22 & 23, Page-24 & 25, Page-15, Page-20 & 21 & page- 40,41 & 42 of MFP-30 impounded during the year are unsigned loose sheets of third parties and therefore, the contents therein cannot be implicated against the assessee without examining those parties. It is humbly submitted that the assessee has sold his entire bran produced by his mill during the financial year 2013-14 i.e. asst. year 2014-15 to Bargarh Rice Miller Consotirum Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on this count is unjustified and is liable to be deleted and it is prayed accordingly." 8.3 These submissions were forwarded to the assessing officer vide this office letter dated 19.01.2018 for submission of the remand report. The assessing officer has submitted remand report in which she has stated that document MFP-30 was impounded from the business premises of the appellant and therefore, the appellant can not deny that the transaction belong to him. The relevant portion of the remand report is as below:- During the assessment proceeding addition of Rs. 83,62,872/- was made on account of undisclosed sale of Rice Bran. During the survey proceeding at the office premises of the assessee, some loose papers were impounded named as MFP-30. MFP-30 contains details of sale of Rice Bran by the assessee which was not accounted for. Seized document HMB 69 was bran sale register. On verification of both the documents, total unaccounted rice bran sale was calculated. During the assessment proceeding assessee was given opportunity to explain it. But he could not explain it. At the time of Appellate proceeding, the assessee furnished submission on page no. 53 to 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque Nos. are he same. Further, the date and the amount of the cheques are also the same. " It is not possible that a person will receive payment from two parties by a cheque bearing same number, date, amount and drawn on the same bank. 4. In the rejoinder filed by the appellant, he has stated that all the cheques have been issued by Bargarh Rice Miller Consoritium Pvt Ltd. A copy of cheques has also been filed by the appellant alongwith his bank statement. Further, the appellant has filed a certificate from United Bank of India, Bargarh Branch, Bargarh stating that Sri Shyam Products has not opened any such account with them. It is important to note that the alleged account of Maharaja Food Products in the books of alleged Sri Shyam Products, as mentioned in HMB-25 and MFP-30, is a running ledger account which has the entries of the six cheques as well as cash receipts. If these cheques do not pertain to Sri Shyam Products then the validity of the relevant seized/impounded material in HMB-25 and MFP-30 is doubtful. Since this evidence goes to the very root of the addition made, the rejoinder dtd.14.06.2018 alongwith its enclosures is forwarded herewith. " 8.5 The assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in the form of cheque that the payment is made by BMRC and not by Shri Shyam Preducts. The assessing officer has accepted the evidence and has agreed to the appellant on this issue. Therefore, there is no doubt that payment received by the appellant in cheque as appearing in the impounded material has come from BMRC and not from Shri Shyam Products. Therefore, it is my considered view that alleged ledger account in MFP-30 of the appellant in books of Shri Shyam Products is neither reliable nor valid. Accordingly, the addition made by the assessing officer of Rs. 83,62,872/- is ordered to be deleted. The ground of appeal is allowed. 9. Ground No. 2(v) and 2(vi):- 9.1 In these grounds, the appellant has contested the addition made by the assessing officer of Rs. 1,28,72,786/- on the alleged shortage of stock of paddy and bran and of Rs. 13,47,352/- on alleged excess rice and broken rice. According to the assessing officer, the appellant could not give satisfactory explanation and therefore, he made the additions. 9.2 During the course of appeal proceedings, the appellant has stated that it was impossible to take physical stock of such huge amount of paddy, bran and rice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e/bran etc., when men power and weighing machines are available in the mill premises. It is further submitted that at the time of survey, when asked, it was explained that there should not be such difference of stock. It is because the stock inventory was taken on eye estimate. The same stand was also taken before the learned Assessing Officer. However, the learned Assessing Officer did not believe the same and proceeded to estimate the price of the above stocks at Rs. 1,28,72,786 (Rs. 1,28,06,250 for pady + Rs. 66,376 for bran) and Rs. 13,47,352 (Rs. 10,90,600 for rice + Rs. 2,56,752 for broken rice) and made the addition on this count to the disclosed income. That the assessee runs a Rice Mill named "M/s. Maharaja Food Products " and is engaged in the custom milling business for milling of paddy to rice of its ' Principals and sale of bye products i.e., broken rice, bran. 29. That in this respect, the assessee has replied to the questioner issued by the AO, vide reply to SI. No. 9 (see PB 15 to 21) , as under : Reply to SI.No.9 of the notice under reference for Asst. Year 2014-15. In reply to SI. No. 9 the assessee has been asked to clarify the stock discrepancy found i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddy account or rice account they found and accepted. The physical stock of paddy and rice are tallied with the stock register. They put their signature in the stock register in support of having inspected the stock of paddy & rice and verified the physical stock with accounts on different date of inspection as stated herein before. That Civil Supply Official has not detected any omission or commission as there is no comments by those authorities in this register. They have no comments anything adversely regarding maintenance of stock register. Registers are impounded U/s.J33A of the Act and laying with the department since then. That' the said registered i.e. paddy & rice stock register has been impounded under identification No. MFP-40 Pages-1 to 20. The said register is still today laying in your Honour possession & custody. That the assessee undertakes custom-milling for M/s. Orissa State Civil Supplies Corporation Ltd. (OSCSC Ltd.) besides he also was the agent of MARKFED, NAFED, NCMSL, PACS and FCI. That for the purpose of custom milling the assessee has entered in to an agreement with the Orissa State Civil Supplies Corporation Ltd(OSCSC Ltd. /Orissa State Co-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore chalana, clean paddy storage, paddy stored in eight numbers handi loaded for boiling, storage situated above handi, drier, parboiled paddy storage in mill premises. The stock of paddy as kept different storing places as mentioned above has not taken into consideration while taking the physical verification of the stock of paddy. The facts as stated above is evident itself by looking the manner the searching official parties has taken the physical stock of paddy on estimation as they have taken the stock of paddy only kept in different four large & big godowns having capacity of more than forty thousand bags at a time each. Date of Search Inventory of Stocks Found/Seized (Paddy) Restrained at the premises SI. No. Description Quantity in Nos. ofWt. Value 01. Verandaha Godown No.-l 10505 bag Rs. 55,15,125/- 02. Godown No-2 27500 bag Rs. 1,44,3 7,500/- 03. Varandaha Godown No. 3 5900 bag Rs. 30,97,500/- 04. Godown No-4 17600 bag Rs. 92,40,000/- Total 61505 bag Rs. 3,22,90,125/- 61,505.00 x 42Kg.x 1250 = Rs. 3,22,90,125/- 100 61505 x 42 = 25832 Qtl. 100 Stock of paddy kept at different godown has been estimated taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of goods. The assessee also states when Deepak Sharma while recording the statement U/s.l33A on 22.08.2013 was asked to explain the excess/shortage of different items (Q.21 of the statement dt. 22.08.2013) In my opinion there should not be such difference of stock. Further, the stock inventory has been taken an eye estimate. However, I will explain this difference later on after going through our records. With regard to excess ofrice~as calculated is due to on eye estimation, further the yield of rice out of milling of paddy from 16.08.2013 to 20.08.2013 were scarred in the milling house. That stock as estimated as per the prescribed formula, actually there is no physical weighment. Whatever the stock either of paddy or rice calculated on estimation belongs to OSCSC Ltd. honour ship of the said items of good with the principal who transports the paddy from market yard to the assessee for custom milling. There is no question of either of shortage of paddy or excess of rice it is due to estimation not for proper weighment scientifically. In case of broken rice it is submitted that day to day yield of broken rice from 16.08.2013 to 20.08.2013 out of milling in a raw stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f eye estimation and not actually on weighment. Therefore, the additions made on the basis of such erroneous stock inventory and deducing excess/shortage, is not at all justified and not sustainable in the eye of law. 30. That it is further submitted that the milling of paddy and sale of rice are under the control and regulated by the Essential Supplies Act and the stock of paddy & rice in possession of the assessee on behalf of the OSCSC Ltd., are from time to time checked and verified by the Food & Supply Department, Govt, of Orissa. They periodically and regularly check the registers and put their initials in support of having inspected the istock of paddy and rice tallying with the physical stock with accounts. During the Assessment Year 2014-15 the Civil Supply Authority Officials inspected the assessee's mill premises and verified physicals stock of paddy and rice on different dates i.e., on 01.04.2013, 21.04.2013, 12.05.2013, 24.05.2013, 18.06.2013, 10.07.2013, 05.08.2013 & 16.08.2013 just five days before the date of survey conducted on 21.08.2013, as can be seen from the copy of the Paddy Stock Register and Rice Stock register and joint custody stock register, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priation/diversion by the miller and paddy/rice available has been stored safely". For ready reference a sample copy of such certificate is enclosed herewith at PB Page No. 109 and 110. As already stated, the assessee is required to deliver the rice to them and the assessee is debarred/prohibited from selling rice to others. The assessee is entitled to only milling charges. In this process, whatever stocks of paddy and rice are found at mill premises belong to the principal OSCSC/MARKFED and that the ownership of such stocks are of the principals. The assessee is only a Custom Milling Agent. Because the paddy as well as rice solely belongs to the Principals, the assessee does not maintain any purchase/sale register but maintains only stock registers to be verified by the Principals from time to time. This has been so explained by the assessee while answering to Question No. 6Q as under : "6Q. What are the books of account maintained by M/s. Maharaja Food Products ? B. We maintain stock register for paddy, rice, bran and broken rice. 7Q. Do you maintain Purchase and Sale registers ? A. We do not maintained Purchase and Sale register for paddy and rice, because we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The last such inspection is on 16.08.2013, just five days before the survey. No discrepancies were found by officials of the Government of Orissa. Since, they are the owner's of rice and paddy; they have far higher stakes in the stock of rice and paddy. Considering these aspects, the addition of Rs. 1,28,72,786/- on account of alleged shortage of stock of paddy and bran and of Rs. 13,47,352/- on account of alleged excess of rice and broken rice are ordered to be deleted. The grounds of appeal are allowed. 10. Ground No 3 (vi):- 10.1 In this ground, the appellant has contested the addition of Rs. 2,40,000/- on account of income from bus plying. According to the assessing officer, the appellant has one bus and income from plying of bus has not been disclosed by the appellant. He estimated the income at Rs. 2,40,000/- and made addition of this amount in the total income of the appellant. 10.2 According to the appellant, he had only one operational bus and has disclosed gross receipt of Rs. 2,96,350/- from bus plying and after deducting depreciation, the income of Rs. 1,87,750/- has been disclosed. In the remand report, the assessing officer has stated that this income h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, kindly refer to para-20 on page-10 of Annexure-I (affidavit of the assessee) wherein he has clearly stated that he was merely a custom milling agent for Orissa State Civil Supplies Corporation Ltd. (OSCSC Ltd.) besides being an agent of MARKFED, NAFED, NCMSL, PACS and FCI. In fact, paddy was purchased by his principals directly from farmers and it was sent to him for milling. These facts are again reiterated in para-23 on page-12 of Annexure-I (affidavit of the assessee) and in addition to that, it was alleged that he had appointed certain representatives for speedy work. It was also conceded by the assessee that they were not creditors however in the books of account, their closing balances were wrongly shown under the nomenclature "sundry creditors". b) These so called authorized representatives were appointed though an undated agreement (Page-57 of Annexure-II enclosed with paper book containing 114 pages) which is duly signed by the Manager, OSCSC Ltd. Against the names of so called authorized representatives, their signatures also appear. In addition to the above, copies of ledger accounts as well their confirmations are also enclosed as per pages 59 to 75 of annexure-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as discussed the remand report of the A.O.in para-6.2 on page-9 of the appellate order. In the remand report, the AO has stated that sources of capital have remained unexplained. The CIT(A) has allowed the relief to the assessee and his findings are contained in para-6.4 on page-10 of the appellate order. The decision of the CIT(A) is totally erroneous for the following reasons: a) The CIT(A) has held that an amount of Rs. 5,97,186/- was transferred from individual account to the proprietary concern. However there is no finding about the sources of such capital introduction. b) There is no evidence on record that cash of Rs. 5,97,186/- was earned from bus plying business. On the other hand, the total receipts of such bus plying business are stated at Rs. 2,96,350/- by the assessee (para-10.2 on page-30 of CIT(A)'s order) which is almost 50% of such capital introduction. The inescapable conclusion is that the amount in question was introduced by the assessee out of his undisclosed income. c) Kindly refer to page-77 of Annexure-II of paper-book containing 114 pages. On perusal of the same, it would be crystal clear that the entire amount was introduced by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. On the contrary, he had stated on oath that rice bran was produced in the vicinity of 5% to 5.5% during rice milling (as against norm of 4% fixed by the Govt.) and such unaccounted production was sold out of books of account. Reliance is placed on the decision of Hon'ble Punjab and Haryana High Court in the case of Rakesh Mahajan Vs. CIT (214 CTR 218) wherein it was held that "it is well settled that admissions constitute best piece of evidence because admission are self-harming statements made by the maker believing it to be based on truth. It is well known that no one will tell a lie especially harming one's own interest unless such a statement is true". d) The comparison of loose sheet bundle marked as MFP-30 with HMB-69 (bran sale register) leaves no doubt in mind that such sale of rice bran was not recorded in regular books of account. e) The finding of CIT(A) that cheques issued by Bargarh Rice Mills Consortium (BRMC) are found recorded in such ledger accounts, is also erroneous because if one goes by his logic that entries of cash receipts as appearing in these ledger accounts, must also relate to Bargarh Rice Mills Consortium (BRMC). It is a settled law tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of Hon'ble Delhi High court in the case of CIT Vs. Naresh Kumar Aggarwala (9 taxmann.com 249 /331 ITR 510) where it was held that there was a presumption raised under section 132(4A) on seizure of fax message and it was upon assessee to rebut that presumption by offering a plausible explanation. In view of above facts, it is requested that the addition made by the A.O. may kindly be restored and finding of CIT(A) be reversed. v.) The ninth, tenth and eleventh grounds of appeal relate to the addition of Rs. 1,28,72,786/- and Rs. 13,47,352/- made by the A.O. on account of shortage and excess stock. This issue has been discussed by the AO in para-9 on page 112 (internal marking). The final conclusion of the AO can be seen in para-7 on page 105 (internal marking). The CIT(A) has allowed the relief to the assessee and his findings are contained in para-9.4 on page-29 of the appellate order. The decision of the CIT(A) is totally erroneous for the following reasons: a) The CIT(A) has failed to consider the fact that physical inventory of stock was taken by the survey party in the presence of Shri Deepak Sharma, Manager of M/s. Maharaja Foods Products & elder brother of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of every grounds allowed by him. He should have been discussed in details before allowing the appeal of the assessee and he has not properly considered the remand report submitted by the AO and documents found during the course of search and seizure/post enquiry/survey proceedings. The Assessing Officer gave many opportunities to the assessee at the time of scrutiny assessment proceedings for rebutting the show cause notice issued to the assessee. He also did not rebut the points raised by the AO in his assessment order during the course of remand proceedings. The assessee filed affidavit before the CIT(A) after a lapse of long term which cannot be accepted and the documents were also found in the premises of the assessee regarding sale of bran has not been rebutted. He also stated that in the computation of income filed by the assessee he has not shown the income from plying of buses, therefore, the capital introduction, in case, is not acceptable. Further in respect of stock differences, there was not plausible explanation before the Assessing Officer as well as in the remand proceedings. He further stated in respect of sundry creditors referring to the paper books in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the Assessing Officer vide letter dt.19.01.2018. The Assessing Officer furnished the remand report vide letter dt.22.03.2018. Thereafter the assessee filed Counter to remand report enclosing therewith further various evidences/documents containing 19 pages (Copy attached as ANNEXURE-III). Thereafter, on the date of hearing before the learned CIT(A), the assessee along with his Advocates entered appearance alongwith the books of accounts. Considering the written submissions of the assessee, remand report of the Assessing Officer and Counter to remand report filed by the assessee, various submissions of the assessee made before him and also examining the books of account produced before him, learned CIT(A) decided the issues raised before him and passed a very reasonable order deleting various additions, which are now disputed by the Revenue in their appeal. On the other hand, the assessee supports the impugned order of the learned CIT(A). 3. GROUNDS No.(i) and (ii) as raised by the Revenue read as under: " (i) That the Ld. CIT(Appeals) erred in law as well as fact in deleting the addition of Rs. 7,72,400 which was added by the A.O. as bogus sundry creditors. (ii) That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arh No 7 Prabhat Sahu Nil 85400 Creditor Nil Creditor Bargarh No 8 Rabhupati Bhoi Nil 84000 Creditor Nil Creditor Bargarh No 9 Visiontek Consultancy (P) Ltd TRADE CREDITOR Nil 72400 Creditor Nil Creditor Bargarh No [Ledger copies attached with confirmations of the respective authorised representatives placed at PB page Nos.66 to 77] In respect of creditors namely - Visiontek Consultancy (P) Ltd., above, the assessee humbly submits that it represent for purchase of goods and the amount has been shown against purchase vouchers Therefore, the addition in respect of these trade creditors is not justified, which requires to be deleted. In respect of other creditors, it is humbly submitted that most of them are authorised representatives of the assessee to receive paddy from the paddy purchase centre and for milling from joint custody and maintenance and for delivery the resultant CMR in the RRC/FCI on behalf of the assessee. A sample copy of such letter of authorisation is placed at PB Page No. 57 - 58. In the said authorisation letter, it is further stated as under : "All the acts, deeds, things done by the above repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors, observing in paragraph 5.2 in his order, which reads as under: "5.2. In remand proceedings, the assessing officer has stated that the appellant has furnished only the ledger copies, but supporting bills and vouchers were not filed either of assessment stage or appeal stage. As it can be seen from the letter of this office dated 19.01.2018, calling for remand report, the assessing officer was asked to obtain any further details required by her during the remand proceedings. The assessing officer has not called for any details and has submitted remand report. The appellant has filed name, address, aadhar card details and ledger copies. From ledger copies, it is seen that these creditors are regular suppliers of paddy and authorised representative for paddy collection, in the previous year as well as subsequent years. This is a search and seizure case and no evidence of bogus purchases was found during the search. Considering these aspects, the creditors are held as genuine and the addition of Rs. 7,72,400 is ordered to be deleted. The ground of appeal is allowed." 3.2. That in the Balance Sheet, the assessee has shown Sundry Creditors at Rs. 7,72,400, the details of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, which reads as under: "6.4. I have carefully considered the observations of the assessing officer and the submissions of the appellant. It is clear that the introduction of capital is from the appellant to the proprietary concern and it has been demonstrated by the appellant. Remand report submitted by the assessing officer indicates that she has not all taken into consideration the submissions of the appellant. Considering these aspects the addition made by the assessing officer of Rs. 5,97,186 is ordered to be deleted." 4.2. That before the learned CIT(A) this issue was explained vide paragraph 19 of the written submission (ANNEXDURE-II) as under: "19. The assessee Shri Sanjay Sharma is the Propriter of two Proprietorship concerns -(1) M/s.Maharaja Food Products, Chkarkend having rice mill business and (2) Sanjay Sharma carrying on business of bus plying and trading besides earning income from other sources. The amount of Rs. 5,97,186, which is now under dispute, is the cash transfer from the account of Sanjay Sharma to M/s.Maharaja Food Products, on different dates, which is well verifiable from the cash book maintained. The assessee has produced the cash book. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the A.O. on a/c of sale suppression of rice bran. (vi) That the Ld.CIT (Appeals) has failed to appreciate the fact that the said addition on a/c of sale suppression of rice bran was made on the basis of impounded document MFP-30. (vii) That the Ld. CIT (Appeals) has failed to appreciate the fact that Sri Deepak Sharma, manager of the organisation had admitted in his statement recorded u/s.131 of the I.T.Act that the above sale of rice bran had not been disclosed in the regular books of a/c. (viii) That the Ld. CIT(Appeals) erred in law as well as fact in deleting the addition of Rs. 83,62,872 holding the view that the ledger a/c in impounded document MFP-30 are neither reliable nor valid when the said documents was impounded from the business premises of the assessee." 5.1. That during the course of search & survey operation, some loose papers seized and marked as MFP-30 where the assessee has been indicated to have sold rice bran to Shri Shyam Products and Radhe Krishna and the statement recorded from one Deepak Sharma, on the basis of which the Assessing Officer made the impugned addition without considering the reply to questionnaire filed by the assessee in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Radhe Krishna totalling Rs. 83,62,872, which in fact according to correct calculation is Rs. 46,75,479 thus - the total bran transaction as per show cause notice is Rs. 83,62,872/-, whereas total transaction as per table-I & II shown in the show cause notice comes at Rs. 86,69,929/- (42,54,126/- + 44,15,803/-). Further there is double addition of the same amount which also required to be deducted and so also the transaction relates to the earlier period, which is explained as under. Thus total transaction as per table-I & II - Rs. 86,69,929.00 Less : Deduction (i) Transaction of Radhe Krishan- Rs. 2,80,213.00 (ii) Transaction of Shyam Product- Rs. 11,05,685.00 (iii) Transaction of Shyam Product- Rs. 10,45,630.00 (iv) Transaction of Shyam Product- Rs. 15,62,922.00 Rs. 39,94,450.00 Rs. 46,75,479.00 Thus the total transaction as per show cause notice comes to Rs. 46,75,479, which the assessee claims to be not relating to the assessee. 24. That the assessee right from beginning is denying to have sold bran/husk to Shri Shyam Products/Radhe Krishna. It is humbly submitted that during the asst. year 2014-15 the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee has requested Your Honour vide a separate Petition dt.10.11.2017 ( by Speed Post ) to issue summons to the said third party namely, M/s.Shyam Products and M/s.Rade Krishan and allow opportunity of confrontation to the assessee, for the ends of natural justice. 25. That in view of the above, without correlating the same by examining the third party and/or obtaining statements from them, the entries found in the accounts of third party have been utilised against the assessee and therefore the addition as made by the learned Assessing Officer on this count is unjustified and is liable to be deleted and it is prayed accordingly." 5.4. That the learned CIT(A) called for remand report from the Assessing Officer, who in her turn submitted the remand report stating therein that "the document MFP 30 was impounded from the business premises of the assessee, which contains ledger copy of transaction of sale of rice bran to Shri Shyam Products and Radhe Krishna. Therefore, the assessee cannot deny that transaction does not belong to him. The sale of rice bran was not accounted in the books of account, accordingly assessing officer made the addition." On receipt of remand r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd parties, the entries therein is completely denied by the assessee and therefore, the assessee requested to summon/examine those parties. Without summoning/examining those parties and giving opportunity of cross examination to the assessee, allegation of sales transaction with those parties and thereafter making addition is in violation of principles of natural justice. 14. In this regard it is once again reiterated that the assessee right from beginning is denying to have sold bran/husk to Shri Shyam Products/Radhe Krishna. It is humbly submitted that during the asst. year 2014-15 the assessee has never sold rice bran/husk to Shree Shyam Product and Radhe Krishna as alleged. The copy of Page No.9-10, Page 11, Page-22 & 23, Page-24 & 25, Page-15, Page-20 & 21 & page- 40,41 & 42 of MFP-30 (placed at Pages 1 to 13) impounded during the year are unsigned loose sheets of third parties and therefore, the contents therein cannot be implicated against the assessee without examining those parties. 15. That as regards allegation of sales of HUSK, it is humbly submitted that the assessee had used the husk obtained from milling of paddy as fuel for steam generation which is essential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s along with enclosures containing 23 pages (copy enclosed as ANNEXURE-IV) wherein vide paragraph 12 it was specifically stated that the cheque No.386848 of United state Bank of India was received from Bargarh Rice Miller Consortium Pvt. Ltd and not from M/s.Shree Shyam Products as appeared in the seized ledger account MFP-30. The assessee produced copy of the said cheque, Bank statement, certificate from united Bank of India. The relevant portion of Paragraph 12 is as under: "12. That it may kindly be noticed that from MFP-30 the ledger account of the assessee in the books of Shree Shyam Products (Page 4 hereof) the said party has shown to have paid Rs. 4,11,824 by Cheque No.386848 of United Bank of India. This is completely false. Actually Cheque No.386848 was issued by Bargarh Rice Millers Consortium Pvt.Ltd., and it was duly deposited by the assessee in the United Bank of India. In support, copy of the said cheque and Bank statement, Certificate from United Bank of India (Pages 18,19,20 respectively). That on enquiry from the Bank it is ascertained that there is no account opened in the name of Shree Shyam Products. The certificate issued by the Bank is placed on Page 21, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee later on also. (xi) That the Ld. CIT(Appeals) has ignored the fact that the assessee was unable to explain the shortage of stock of paddy and bran and the excess of stock of rice and broken rice during the assessment proceeding as well as remand proceeding before A.O. Hence Ld. CIT(Appeals) is not justified in deleting the addition on this ground." 6.1. That during the course of survey operation the surveying party reported stock discrepancy on comparison of the stock as per books and stock found on physical verification as under: Items Stock as per books (Qtls) Stock found on physical verification (Qtls) Excess/shortage (Qtls) Paddy 36,077* 25,935 (-) 10,245 Rice 3,808.70 4,354 (+) 545.30 Broken rice 123.72 409 (+) 285.28 Bran 139.67 56.25 (-) 83.42 During the survey operation Sri Deepak Sharma, the person present then stated that the stock inventory was taken on eye estimate. During the post-search investigation while answering to question 5, Shri Sharma repeated that the difference of stock found during the course of survey may be due to eye estimation. These statement does not find favour of the AO. Therefore, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 1,28,72,786 (Rs. 1,28,06,250 for pady + Rs. 66,376 for bran) and Rs. 13,47,352 (Rs. 10,90,600 for rice + Rs. 2,56,752 for broken rice) and made the addition on this count to the disclosed income. 28. That the assessee runs a Rice Mill named "M/s. Maharaja Food Products" and is engaged in the custom milling business for milling of paddy to rice of its Principals and sale of bye products i.e., broken rice, bran. 29. That in this respect, the assessee has replied to the questioner issued by the AO, vide reply to Sl. No.9 ( see PB 15 to 21 ) , as under : Reply to Sl.No.9 of the notice under reference for Asst. Year 2014-15. In reply to Sl. No.9 the assessee has been asked to clarify the stock discrepancy found in course of survey in the mill premises on 21.08.2013 to 22.08.2013 an estimated the value of excess/shortage found at Rs. 1,28,72,786/- and Rs. 13,47,352/- shall not be added to your total income. In this regard the assessee may kindly be allowed to forth the facts & figure for kind appreciation of the case. At the outstate the assessee again prays that copy of the calculation sheet prepared for taking/determine the stock of goods such as paddy, rice, brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no comments anything adversely regarding maintenance of stock register. Registers are impounded U/s.133A of the Act and laying with the department since then. That the said registered i.e. paddy & rice stock register has been impounded under identification No. MFP-40 Pages-1 to 20. The said register is still today laying in your Honour possession & custody. That the assessee undertakes custom-milling for M/s. Orissa State Civil Supplies Corporation Ltd.(OSCSC Ltd.) besides he also was the agent of MARKFED, NAFED, NCMSL, PACS and FCI. * That for the purpose of custom milling the assessee has entered in to an agreement with the Orissa State Civil Supplies Corporation Ltd(OSCSC Ltd. /Orissa State Co-operative Marketing Federation Ltd.(MARKFED) Orissa; In terms of such agreement the principal such as MARKFED, Orissa shall purchase paddy directly from the farmers and the assessee custom miller will transport the same from the market yard on payment of charge within the limit prescribed; that after milling, rice of specified quality as per the out turn ratio fixed is delivered. Thus it is clearly evident that whatever the stocks of paddy and rice are found at mill premises belong t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s they have taken the stock of paddy only kept in different four large & big godowns having capacity of more than forty thousand bags at a time each. Date of Search Inventory of Stocks Found/Seized (Paddy) Restrained at the premises Sl. No. Description Quantity in Nos. of Wt. Value 01. Verandaha Godown No.-1 10505 bag Rs. 55,15,125/- 02. Godown No-2 27500 bag Rs. 1,44,37,500/- 03. Varandaha Godown No.3 5900 bag Rs. 30,97,500/- 04. Godown No-4 17600 bag Rs. 92,40,000/- Total 61505 bag Rs. 3,22,90,125/- 61,505.00 x 42 Kg. x 1250 = Rs. 3,22,90,125/- 100 61505 x 42 = 25832 Qtl. 100 Stock of paddy kept at different godown has been estimated taking each bag @ 42 which is not a fact at all in reality. The stock of paddy in bag are not stored at a uniform quantity, generally it is also a fact that bag/packets contents paddy either 40 Kg. to 50 Kg. and at times the bags contents 74 or 75 Kg. There is no actual weighment though all the facilities required for the purpose of weighment were available. Likewise the stock of broken rice & bran scarred at different palaces in milling premises are estimated conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, further the yield of rice out of milling of paddy from 16.08.2013 to 20.08.2013 were scarred in the milling house. That stock as estimated as per the prescribed formula, actually there is no physical weighment. Whatever the stock either of paddy or rice calculated on estimation belongs to OSCSC Ltd. honourship of the said items of good with the principal who transports the paddy from market yard to the assessee for custom milling. There is no question of either of shortage of paddy or excess of rice it is due to estimation not for proper weighment scientifically. In case of broken rice it is submitted that day to day yield of broken rice from 16.08.2013 to 20.08.2013 out of milling in a raw stage laying on the floor of in the milling house. It was mixed with husk, kunda, sand & other materials which were yet to be cleaned. In case of bran the sale to the tune of 90 qtls affected on the day of survey i.e. 21.08.213 was not deducted from the opening balance in order to arrive at closing balance. The said sale of bran has been effected to a VAT registered dealer M/s. Bargarh Rice Miller Consotorium Ltd. vide Tax Invoice No. 1121, dt.21.08.2013, bran 90 qtls. for Rs. 94,500/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Food & Supply Department, Govt. of Orissa. They periodically and regularly check the registers and put their initials in support of having inspected the stock of paddy and rice tallying with the physical stock with accounts. During the Assessment Year 2014-15 the Civil Supply Authority Officials inspected the assessee's mill premises and verified physicals stock of paddy and rice on different dates i.e., on 01.04.2013, 21.04.2013, 12.05.2013, 24.05.2013, 18.06.2013, 10.07.2013, 05.08.2013 & 16.08.2013 just five days before the date of survey conducted on 21.08.2013, as can be seen from the copy of the Paddy Stock Register and Rice Stock register and joint custody stock register, which are impounded by the search party is placed at PB page Nos. 83 to 108. No discrepancies, whatsoever, either in paddy account or rice account were noticed or reported by them. The physical stock of paddy and rice are tallied with the stock register. They put their signature in the stock register in support of having inspected the stock of paddy & rice and verified the physical stock with accounts on different date of inspection as stated herein before. In view of this, the excess/shortage claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ownership of such stocks are of the principals. The assessee is only a Custom Milling Agent. Because the paddy as well as rice solely belongs to the Principals, the assessee does not maintain any purchase/sale register but maintains only stock registers to be verified by the Principals from time to time. This has been so explained by the assessee while answering to Question No.6Q as under : "6Q. What are the books of account maintained by M/s. Maharaja Food Products ? B. We maintain stock register for paddy, rice, bran and broken rice. 7Q. Do you maintain Purchase and Sale registers ? A. We do not maintained Purchase and Sale register for paddy and rice, because we do not purchase paddy and sale rice. We receive paddy from Odisha State Civil Supply Corporation and MARKFED. In out Mill, We process paddy and produce rice and supply the same to Odisha State Civil Supply Corporation and MARKFED. We are only doing custom milling and receive milling charges and incidental charges such as handling (labour) charges and transportation charges etc. we receive milling charges @ Rs. 25/- per quintal. Thus, since we do not purchase paddy and sale rice, we are not maintaining purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f stock which are inspected by government officials. The last such inspect is on 16.08.2013, just five days before the survey. No discrepancies were found by officials of the Government of Orissa. Since, they are the owners of rice and paddy, they have far higher stakes in the stock of rice and paddy. Considering these aspects, the addition of Rs. 1,28,72,786 on account of alleged shortage of stock of paddy and bran and of Rs. 13,47,352 on account of alleged excess of rice and broken rice are ordered to be deleted. The grounds of appeal are allowed." 6.5. That in the grounds of appeal, the Revenue has challenged the impugned deletion of the addition on the ground that the person present during the survey could not give satisfactory and convincing reply as the stock discrepancy. Further no reconciliation of stock difference was produced by the assessee later on. In this respect, it is humbly submitted that at the time of survey the person present namely Sri Deepak Sharma has categorically stated in his recorded statement that the stock inventory has been taken on eye estimate and there should not be such difference of stock. On the facts and circumstances of the case as stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts, though those were produced by the assessee during the course of assessment. The allegation of the Assessing Officer that the assessee has not disclosed any income from bus plying business is not at all correct. The assessee had only one bus during the assessment year under consideration. Before the learned CIT(A) the assessee filed the copy of consolidated (individual) accounts. In the P & L account the assessee shown other business income of Rs. 13,35,950 which includes income earned from bus plying. Vehicle receipts 4,84,100 Misc.other receipts 8,51,850 Total: 13,35,950 From the vehicle receipts of Rs. 4,84,100 the assessee has claimed depreciation of Rs. 1,87,750 and income from bus plying thus comes to Rs. 2,96,350 (i.e., 4,84,100 - 1,87,750). The learned Assessing Officer should have verified the accounts as well as the balance sheet & Profit and Loss account, when produced before him. In the remand report, the Assessing Officer has not denied the above facts but stated that this income has not been shown separately anywhere in return of income and therefore, submission of the appellant cannot be accepted. Further the assessee contended bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed. 8. GROUNDS No. (xiii) and (xiv) raised by the Revenue read as under : "(xiii) That the additions made by the A.O. are lawful and justified and those need to be sustained in full. (xiv) That the appellant craves to add, amend, modify or alter any ground of appeal at the time or before hearing of appeal." 8.1. That the above two grounds of the Revenue are general in nature and need no specific adjudication. 9. That on the facts and circumstances stated in the foregoing paragraphs, the appeal filed by the Revenue may kindly be dismissed by upholding the impugned order of the learned CIT(A). The Cross objection filed by the assessee supporting the impugned order of the learned CIT(A) may kindly be allowed. It is prayed accordingly. 9. After hearing both the sides and perusing the entire material available on record and the order of authorities below, we find that the AO has made additions on different heads which has been deleted by the CIT(A) after considering the submissions of the assessee and remand report received from the AO without discussing in details on the issues involved. Aggrieved thereby the Revenue is in appeal before us and the assessee has file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milling from joint custody and maintenance and to deliver the resultant CMR in the RRC/FCI on behalf of the assessee. On perusal of the ledger copy of the creditors shown by the assessee the narration is with regard to labour charges, loading, unloading, banking and netting expenses and freight inward and outward expenses. We also noted from the paper book page No.66 which is the details of sundry creditors of Rs. 7,72,400/- and expenses have been incurred by the assessee only for the month of February & March, 2014. Ld.DR has also submitted that signature of both the pages mentioned in the paper book at Annexure-2 were not match and, therefore, it appears that the confirmations/declarations filed by the assessee cannot be relied on. The l.d CIT(A) has alleged upon the Assessing Officer that the AO without calling the creditors has submitted the remand report. The assessee had filed name, address, Aadhar Card, ledger copy of the creditors before the CIT(A). If the Assessing Officer has not discharged his duty properly then in this circumstances the ld. CIT(A) should have exercised his powers provided under the provisions of Income Tax Act. The CIT(A) has co-terminus power as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts were produced before the Assessing Officer and the capital introduction has been shown properly. In the interest of justice, we send these issues to the file of AO for verification of copy of income tax return filed with the income tax department for the purpose of verification of the income shown from business of buses plying. In respect of ground No.xii & xiii, he is further to ascertain as to whether the income from bus plying of Rs. 2,40,000/- has been shown in the return of income and has paid due taxes thereon. The assessee is directed to produce the copy of income tax return for the verification of income offered under buses plying. Accordingly, we restore the ground Nos.iii, iv, xii & xiii to the file of Assessing Officer for fresh adjudication. Thus, ground Nos. iii, iv, xii & xiii are allowed for statistical purposes. 13. Ground Nos.v,vi,vii&viii relating to deletion of addition of Rs. 83,62,872/- on account of sale suppression of rice bran. 14. In this regard, ld. DR submitted before us that in ledger account of M/s Maharajan Foods Products in the books of Shree Shyam Products, there are all the cash receipts for the month of April, May & June 2013. As there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the documents were found in the business premises of the assessee marked as MFP-30 in which cash sales are showing, in which the purchases of bran has been recorded by both the parties and against which the payments have been received in cash. During the course of search proceedings statements were recorded of Deepak Sharma, who is elder brother of the assessee, has categorically accepted in the Question Answer No.8, 9 & 10 (supra), that the payments have been received in cash and cash sales have not been recorded in the books of accounts, the bran has also been sold to BRMC, the bran production is as per Government norms is 4% but the actual production is 5-5.5% and has also stated that bran have been purchased and sold to different parties also. 16. It was the duty of the assessee to rebut the documents found regarding cash sales of bran. No retraction was made by Shri Deepak Sharma (Manager) till date as well as by the assessee. If the statements were not true then the assessee should have retracted immediately before the concerned authorities. The affidavits filed by Sanjay Sharma placed in the paper book at pages 51 & 52, is also not acceptable. Merely filing of the affid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound Nos. v to viii are allowed for statistical purposes. 18. With regard to ground Nos. ix, x & xi, ld. DR submitted that the CIT(A) failed to consider the fact that the inventory of stock was taken by the survey party in present of the Manager Sri Deepak Sharma with the help of the staff members of the assessee concern and no satisfactory and convincing reply was given by Shri Sharma when he was confronted with the stock difference during the course of survey operation. It was also submitted by the ld. DR that no reconciliation of stock difference was produced by the assessee later on also. It was further submitted by the ld. DR that the assessee was unable to explain the shortage of stock of paddy and bran and the excess of stock of rice and broken rice during the assessment proceedings as well as remand proceeding before the AO, therefore, the AO has rightly made the addition. On the other hand, ld. AR submitted that at the time of survey the person present namely Sri Deepak Sharma has categorically stated in his recorded statement that the stock inventory has been taken on eye estimate and there should not be such difference of stock. On the facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, was required to be filed after survey operation. On the other hand, the assessee has filed an affidavit dated 14.01.2018 i.e. after a lapse of 5 years. The difference observed by the AO could not be explained to the satisfaction of the AO during the assessment proceedings as well as in the remand proceedings. The submission of the assessee that the officials of Govt. of Odisha checked on 16.08.2013 just before the five days back and they did not find any mistake is also not acceptable because on 21.08.2013 there was a stock lying in the premises of the assessee. The revenue authorities have counted physically to bags as kept lying in the row. The assessee has also alleged that the stock/inventory has been counted by the search team only on the basis of eye estimation but not actual weighment of stock of paddy/rice/bran/husk etc. Therefore, considering the totality of facts and circumstances of the case, we allow 20%(twenty percent) relief to the assessee on the total addition made due to there may be difference between eye-estimation for stock taking and actual weighment of the stocks found and the rates applied by the revenue authorities and uphold 80%(eighty percent) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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