ACIT, Circle - 40, Kolkata v. Shri Sanjay Saha, Kolkata

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH - B KOLKATA ( ) BEFORE . . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . . SHRI B.C.MEENA ACCOUNTAN T MEMBER. /ITA NO. 2002/KOL/2009 / ASSESSMENT YEAR 2005 - 06 ACIT CIRCLE 40 KOLKATA. - - - VERSUS - . SHRI SANJAY SAHA 162 CIT ROAD SCHEMD VIIM KOLKATA 700 054 ALGPS 3019 N ( / A PPELLANT ) ( / RESPONDENT ) /ITA NO. 1809/KOL/2009 / ASSESSMENT YEAR 2005 - 06 SHRI SANJAY SAHA 162 CIT ROAD SCHEMD VIIM KOLKATA 700 054 ALGPS 3019 N - - - VERSUS - . ACIT CIRCLE 40 KOLKATA. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE DEPARTMENT : SMT. JYOTI KUMARI DR / FOR THE ASSESSEE : SHRI S.BANDYOPADHYAYA AR / ORDER . . SHRI B.R.MITTAL JUDICIAL MEMBER. THESE ARE CROSS APPEALS ONE BY THE DEPARTMENT AND TH E OTHER BY THE ASSESSEE ARE AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.25.8.2009 FOR THE ASSESSMENT YEAR 2005 - 06 ON THE FOLLOWING GROUNDS. GROUNDS TAKEN BY THE REVENUE : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAD ERRED IN REDUCING THE DISALLOWANCES OF RS.30 15 767 BY 2 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) REDUCING THE GP RATE FROM 6% TO 5% WITHOUT APPRECIATING THE FACT THAT THE AVERAGE G.P. RATE FOR LAST 3 YEARS WAS 7.65% AND ASSESEE WAS ALSO NOT MAINTAINING THE BOOKS OF ACCOUNTS PROPERL Y. 2. THAT THE DEPARTMENT CRAVES LEAVE TO ADD OR ALTER OR MODIFY THE GROUNDS OF APPEAL AT THE TIME OF HEARING OR EARLIER. GROUNDS TAKEN THE ASSESEE: 1. THAT THE CIT(A) HAS ERRED IN UPHOLDING IN PRINCIPLE THE ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED FALL IN GROSS PROFIT AND GIVING RELIEF ONLY TO THE EXTENT OF 1% DIRECTING A.O. TO CALCULATE G.P. AT THE RATE OF 5% IN PLACE OF ADDITION MADE BY A.O. AT RS.30 19 767 TAKING G.P. RATE AT 6%. 2. THAT THE CIT(A) HAS FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.9 00 000 U/S.68 OF I.T.ACT 1961 BEING THE AMOUNT RECEIVED ON SALE OF JEWELLERY. 3. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS ON OR BEFORE THE HEARING OF APPEAL . 2. GROUND NO.2 IN THE APPEAL FILED BY T HE REVENUE AND GROUND NO.3 IN THE APPEAL FILED BY THE ASSESSEE ARE GENERAL IN NATURE AND HENCE NEEDS NO SPECIFIC ADJUDICATION. 3. GROUND NO.1 TAKEN BY THE DEPARTMENT AND GROUND NO.1 TAKEN BY THE ASSESSEE RELATES TO COMMON ISSUE I.E. ADDITION MADE ON ACC OUNT OF LOW GROSS PROFIT AND THEREFORE BOTH THE GROUNDS ARE TAKEN UP TOGETHER . 4. THE FACTS RELEVANT ARE THAT DURING THE AY UNDER CONSIDERATION THE ASSESSEE CARRIED ON BUSINESS IN TRADING (EXPORT & DOMESTIC) OF VARIOUS COMMODITIES. THE ASSESSEE DISCLOSE D EXPORT TURNOVER TO THE TUNE OF RS.20 96 65 679 AND DOMESTIC SALES TO THE TUNE OF RS.58 34 015. THE ASSESSEE HAS SHOWN RATE OF GP AT 4.6% WHICH THE ASSESSING OFFICER HELD TO BE LOW ON COMPARISON WITH THE GP RATE OF EARLIER YEARS I.E. 8% IN 2002 - 03 7.1 6% IN 2003 - 04 AND 7.8% IN 2004 - 05. THE ASSESSING OFFICER MADE ENQUIRIES U/S.133(6) OF THE ACT. THE ASSESSEE COULD NOT 3 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) FURNISH THE ADDRESSES OF SIX PARTIES AS MENTIONED IN THE ASSESSMENT ORDER AND REPLIES IN SOME CASES WERE NOT RECEIVED. UPON EXAMINATION OF BOOKS OF ACCOUNT THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE WAS NOT IN A POSITION TO MAINTAIN BO0KS PROPERLY. NO STOCK REGISTER WAS MAINTAINED AND PURCHASE & SALES IN RESPECT OF PARTIES HAVING NO ADDRESSES ARE NOT SUPPORTED WITH BILLS AND VOUCHERS . ON EXAMINATION OF COPIES OF BILLS IN RESPECT OF S RI ANJAN KR. AICH BURDWAN AND M/S.DIPAK DAS BURDWAN THE ASSESSING OFFICER NOTICED THAT THE BILLS ARE HAVING RUNNING HAND WRITTEN SERIAL NUMBERS. SEVERAL CHALLANS AND BILLS HAVE BEEN ISSUED FOR A PARTIC ULAR D A Y. THERE IS NO INDICATION OF DELIVERY OR RECEIPT OF GO O DS AND THERE IS N O RECORD OF MODE OF PAYMENT AND /OR ENTRY TO BOOKS OF ACCOUNT. ORIGINAL AND DUPLICATE COPY OF CASH/CREDIT MEMOS ARE KEPT WITH THE ASSESSEE. FURTHER THE ASSESSING OFFICER OBSERVE D THAT MAJOR PART OF PAYMENTS TO PARTIES VIZ. ANJAN KUMAR AICH VISA EXPORTERS KASHINATH DUTTA RAJU NASKAR AND SURAJ TRADING WERE MADE IN CASH HAVING EACH TRANSACTION OF BELOW RS.20 000. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS FAILED TO OFFE R SATISFACTORY EXPLANATION IN RESPECT OF A ) CASES WHERE LETTERS/NOTICES RETURNED UNSERVED WITH THE POSTAL REMARKS NOT KNOWN/NO SUCH PERSON B ) CASES WHERE ADDRESSES AND RELEVANT EVIDENCES COULD NOT BE PRODUCED. C ) B OOKS OF ACCOUNTS ARE NOT PROPERLY MAINTAIN ED. STOCK REGISTER IS ALSO NOT MAINTAINED. D ) CLOSI NG STOCK WAS IMPROPERLY VALUED. STOCK WAS VALUED AT THE RATE WHICH WAS NOT SUPPORTED BY PURCHASE OR SALE PRICE. E ) PAYMENTS MADE IN CASH AGAINST PURCHASES OF GOODS. F ) BILLS ON ACCOUNT OF PURCHASES ARE NOT MAINT AINED FOR ALL THE CASES. ON THE ABOVE BASIS THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE ASSESSEE BY ADOPTING 6% GROSS PROFIT ON THE TOTAL 4 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) TURNOVER OF RS.21 57 04 782 WHICH RESULTED IN ADDITION OF RS.30 19 867 TO T HE TOTAL INCOME OF THE ASSESSEE. BEING AGGRIEVED THE ASSESSEE FILED BEFORE THE FIRST APPELLATE AUTHORITY. 5. THE LEARNED CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO THE REMAND RE PORT OF THE ASSESSING OFFICER DIRECTED THE ASSESSING OFFICER TO ADOPT THE GP AT 5% AS AGAINST 6% AND THUS ALLOWED PARTIAL RELIEF ON THIS GROUND ON THE FOLLOWING OBSERVATION VIDE PARAGRAPH 4.5 OF HIS ORDER . 4.5 OBSERVATIONS AND DECISION : BECAUSE OF S HORT FALL IN RATE OF GROSS PROFIT IN COMPARISON TO IMMEDIATELY PRECEDING THREE YEARS THE A.O PROCEEDED TO SCRUTINIZE THE ACCOUNTS OF THE APPELLANT. THE A.O ISSUED NOTICES U/S 133(6) AT RANDOM TO SOME PARTIES IN RESPECT OF SALES/PURCHASES. WHEREVER SATISFA CTORY REPLIES WERE RECEIVED THE A.O ACCEPTED THE TRANSACTIONS. IN SOME CASES NOTICES COULD BE SERVED BUT NO REPLY WAS RECEIVED. IN SOME OTHER CASES NOTICES CAME BACK UNSERVED. AGAIN IN SOME OTHER CASES NOTICES COULD NOT BE SENT IN THE ABSENCE OF PROPER A DDRESSES AND EVEN RELEVANT BILLS/VOUCHERS COULD NOT BE PRODUCED BY THE APPELLANT. IN SOME CASES BILLS WERE HAVING HAND WRITTEN SERIALLY NUMBERED AND SEVERAL BILLS HAVE BEEN ISSUED ON A SINGLE DAY BY THE SAME PARTY. INDIVIDUAL BILLS FOR PAYMENT WERE KEPT B ELOW RS.20 000/ - AND PAYMENTS WERE MADE IN CASH. THE APPELLANT ALSO COULD NOT SATISFY THE A.O ON THE BASIS OF VALUATION OF CLOSING STOCK. UNDER THE CIRCUMSTANCES THE A.O PROCEEDED TO ESTIMATE THE G.P. AT 6% AND THIS RESULTED IN AN ADDITION OF RS. 30 19 867 / - . AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS PUT FORTH BY THE APPELLANT AND ALSO THE COUNTER COMMENTS OF THE APPELLANT IN RESPONSE TO REMAND REPORT I FEEL THAT IT MAY NOT BE A CASE FOR TOTAL REJECTION OF THE BOOKS OF ACCOUNT. HOWEVER KE EPING IN VIEW THE DEFECTS POINTED OUT BY THE A.O WHICH HAVE NOT BEEN TOTALLY RULED OUT BY THE APPELLANT I AM OF THE VIEW THAT IN ORDER TO MEET THE ENDS OF JUSTICE THE ESTIMATION OF G.P. AT 5% AS AGAINST DISCLOSED BY THE APPELLANT IS REASONABLE. ACCORDING LY I DIRECT THE A.O TO ADOPT THE 5 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) G.P. RATE AT 5% AS AGAINST 6% ADOPTED. THE APPEAL ON THIS GROUND IS PARTLY ALLOWED. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(A) THAT THE ASSESSEE AS WELL AS THE DEPARTMENT ARE IN APPEAL BEFORE THE TRIBUNAL. 6. DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS MAINTAINING PROPER BOOKS OF ACCOUNT AND THE DETAILS/PARTICULARS WERE FILED BEFORE THE ASSESSING OFFICER AS THE ASSESSING OFFICER HIMSELF HAS MENTIONED IN THE ASSESSMENT O RDER AT PAGE 1 (PARA 2). THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT IN THE PRECEDING AYS THE GP WAS ABOVE 7% BUT THE TURNOVER WAS MUCH LESS AND IN THE ASSESSMENT YEAR UNDER CONSIDERATION THE TURNOVER IS INCREASED THREE TIMES. HENCE THE GP DISCL OSED BY THE ASSESSEE AT 4.6% IS REASONABLE AND AS PER BOOKS OF ACCOUNT. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT ACCEPTED THE BOOK RESULT CONSIDERING THE MINOR DEFECTS. THE LEARNED AR OF THE ASSESSEE SUBMITTED THA T THERE WERE 56 PARTIES TO WHOM THE NOTICES WERE SENT AND EXCEPT IN CASE OF FIVE PARTIES THE DETAILS COULD NOT BE FURNISHED. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE BOOKS OF ACCOUNT AND THE DETAILS FURNISHED BEFORE THE ASSESSING OFFICER CONTAINE D ALL THE DETAILS ACCEPT THAT THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT MERELY BECAUSE THE STOCK REGISTER WAS NOT MAINTAINED BY THE ASSESSEE THE BOOKS OF ACCOUNT CANNOT BE REJECTED. HE PLACED RELIANCE ON T HE DECISION OF HONBLE APEX COURT IN THE CASE OF ANIS AHMAD & SONS VS. COMMISSIONER OF INCOME TAX & ANR. (2008) 214 CTR (SC) 457 AND SUBMITTED THAT MERELY BECAUSE SOME OF THE PARTIES DID NOT APPEAR NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE REMAND REPORT SOUGHT BY THE LEARNED CIT(A) WAS VAGUE AND DID NOT CONTAIN ALL THE DETAILS. HE SUBMITTED THAT THE GP DISCLOSED BY THE ASSESSEE SHOULD BE ACCEPTED. 6 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) 7. ON THE OTHER HAND THE LEARNED D R SUPPORTED THE ORDER OF THE ASSESSING OFFICER. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER FOUND DEFECT IN THE BOOKS OF ACCOUNT. SHE SUBMITTED THAT THE LETTERS ISSUED BY THE ASSESSING OFFICER COULD NOT BE SERVED ON ALL PARTIES. SHE FURTHER SUBMITT ED THAT THE ASSESSEE COULD NOT FURNISH ALL BILLS TO SUBSTANTIATE PURCHASES AND THE ASSESSING OFFICER HAS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE COULD NOT ESTABLISH THE PURCHASES WITH THE SUPPORTING BILLS. THE LEARNED DR FURTHER SU BMITTED THAT THE VALUATION OF CLOSING STOCK WAS NOT PROPER. SHE SUBMITTED THAT THE ASSESSING OFFICER WAS REASONABLE TO ESTIMATE GP AT 6% CONSIDERING THE GP IN THE PRECEDING THREE AYS 2 002 - 03 TO 2004 - 05 AT 8% 7.16% AND 7.8% RESPECTIVELY. THE LEARNED DR SUB MITTED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REDUCE THE GP FROM 6% TO 5% AND THEREFORE THE DEPARTMENT HAS ALSO DISPUTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). THE LEARNED DR RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF KACHWALA GEMS V. JCIT [288 ITR 10 (SC)] SUBMITTED THAT FAILURE TO MAINTAIN STOCK REGISTER IS JUSTIFIABLE REASON TO HOLD THAT THE GENUINENESS OF PURCHASE NOT PROVED BEYOND DOUBT AND THE BOOK RESULT COULD BE REJECTED. 8. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF T HE AUTHORITIES BELOW AND THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF BOTH PARTIES. WE HAVE ALSO GONE THROUGH THE CASES CITED BY THE LEARNED REPRESENTATIVES OF THE PARTIES AND ALSO RELIED UPON BEFORE THE AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE RELEVANT PAGES OF THE PAPER BOOK. CONSIDERING THE LAPSES AS POINTED OUT BY THE ASSESSING OFFICER WE ARE OF THE CONSIDERED VIEW THAT REJECTION OF BOOKS OF ACCOUNT IS JUSTIFIED AND AS SUCH THE BOOK RESULT CANNOT BE ACCEPTED IN TOTO . THE ASSESSING OFFICER H AS ESTIMATED THE GP AT 6% CONSIDERING THE GP OF EARLIER THREE YEARS. THE GP IN THE EARLIER THREE YEARS WAS 8% IN 2002 - 03 7.16% IN 2003 - 04 AND 7.8% IN 2004 - 05 BUT THE FACTS UNDISPUTED ARE THAT THE TURNOVER OF THE ASSESSMENT YEAR UNDER CONSIDERATION IS MUC H HIGHER THAN THOSE IN THE EARLIER YEARS. THE ASSESSING OFFICER EXCEPT CONSIDERING THE GP FOR EARLIER YEARS HAS NOT BROUGHT ANYTHING ON RECORD SO AS TO ESTIMATE THE GP AT 6%. THE LEARNED CIT(A) HAS ALSO ASSIGNED NO BASIS TO ADOPT THE GP AT 5%. AS ALREADY SAID THE BOOK RESULT OF THE ASSESSEE CANNOT 7 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) BE ACCEPTED AS CORRECT AND TRUE . THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT IT WILL BE REASONABLE AND FAIR TO DIRECT THE ASSESSING OFFICER TO MAKE AN AD H OC ADDITION OF RS.4 00 000 TO THE GROSS PROFIT DISCLOSED BY THE ASSESSEE. THUS G ROUND NO.1 OF APPEAL TAKEN BY THE ASSESSEE IS ALLOWED IN PART AND CONSEQUENTLY THE ONLY SUBSTANTIVE GROUND OF THE APEAL TAKEN BY THE DEPARTMENT IS REJECTED. 9. GROUND NO.2 OF THE APPEAL TAKEN BY THE ASSESSEE IS AGAINST CONFIRMATION OF THE ADDITION OF RS.9 00 000 U/S.68 OF THE ACT BEING THE AMOUNT RECEIVED ON SALE OF JEWELLERY. 10. THE FACTS RELEVANT ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION RECEIVED JEWELLERY GIF T FROM SMT. NAYAN RANI SAHA DAUGHTER OF SRI SUNIL KUMAR SHAH (PAN AMCOS 6825 M) ON 30.4.2004 VALUED AT RS.34 68 900 BUT DISCLOSED GOLD JEWELLERY OF RS.25 68 9000 IN THE ASSET SIDE OF HIS PERSONAL BALANCE SHEET. IT WAS EXPLAINED THAT THE ASSESSEE SOLD OU T JEWELLERY VALUED AT RS.9 00 000 OUT OF THE TOTAL VALUE OF JEWELLERY INTRODUCED IN HIS CAPITAL ACCOUNT AMOUNTING TO RS.34 68 900. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE DETAILS SUPPORTING THE CLAIM OF SALES OF JEWELLERY. THE ASSESSEE STAT ED THAT THE JEWELLERY WERE SOLD TO M/S. BHOOTHNATH JEWELLERY ( P) LTD OF 305 NEEL GAGAN APARTMENT 3 RD FLOOR (OPP.ANANTH AWAS) SANGRAMPURA SURAT THROUGH THEIR AGENT IN KOLKATA. THE ASSESSEE PRODUCED TO CHEQUES ISSUED BY BHOOTHNATH JEWELLERS (P) LTD AMOUN TING TO RS.5 00 000 AND RS.4 00 000 VIDE CHEQUES DT.17.1.2005 AND 4.2.2005 RESPECTIVELY ON SBI BURRABAZAR BRANCH KOLKATA. THEN THE ASSESSING OFFICER ISSUED LETTER DT.10.12.2007 TO M/S.BHIOOTHNATH JEWELLERS (P) LTD. TO SUBMIT THE DETAILS AND CONFIRMING T HE TRANSACTIONS FURNISHING COPIES OF BILLS FILE NO. ETC. BUT THE LETTER WAS RETURNED BACK WITH POSTAL REMARKS NO SUCH PERSONS. FROM ENQUIRY FROM STATE BANK OF INDIA BURRAABAZAR IT WAS ASCERTAINED THAT THE ACCOUNT BEING NO.10461496292 WAS OPENED AND OPE RATED BY ONE MR. ARBIND MISRA PROVIDING ADDRESS AT 22/1 ARMENIAN STREET KOLKATA . AS PER DIRECTION THE INSPECTOR VISITED THE AFORESAID PLACE I.E. 22/1 ARMENIAN STREET BUT COULD NOT 8 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) LOCATE ANY BUSINESS ACTIVITIES CONDUCTED IN THE NAME OF BHOOTHNATH JEW ELLERS (P) LTD NOR THERE WAS OR IS ANY PERSON NAMED ARBIND MISRA. FURTHER THE ASSESSEE FAILED TO EARMARK THE SPECIFIC ITEMS OF JEWELLERY SOLD. FROM THESE ABOVE FACTS THE ASSESSING OFFICER CONCLUDED THAT THE SALE OF JEWELLERY IS NOTHING BUT A CONCOCTED ONE . THEREFORE HE CONSIDERED THE AMOUNT OF RS.9 00 000 AS ASSESSEES INCOME DERIVED DURING THE RELEVANT YEAR AND ADDED THE SAME TO THE TOTAL INCOME U/S.68 OF THE ACT. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 11. THE LEARNE D CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO THE REMAND REPORT CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING VIDE PARAGRAPH 5.4. OF HIS ORDER AS UNDER : 5.4. THE JEWELLERY WERE REPORTEDLY SOLD THROUGH A KOLKATA AGENT OF A SURAT JEWELLER. THE PAYMENT WAS MADE BY CHEQUES DRAWN ON S.B.I. BURA BAZAR BRANCH. BUT NEITHER THE AGENT OF KOLKATA NOR THE OPERATION OF THE BANK ACCOUNT COULD BE IDENTIFIED AND FOUND. THE AP PELLANT IN ITS WRITTEN SUBMISSIONS IS SILENT ON THIS POINT. THE GENUINENESS OF SALE PRICE AS CREDITED IN THE ASSESSES BOOKS COULD NOT BE VERIFIED. UNDER THE CIRCUMSTANCES I FIND NO ALTERNATIVE BUT TO CONFIRM THE ADDITION OF RS.9 00 000. THE GROUND OF THE APPELLANT IS DISMISSED. 12. THE LEARNED AR OF THE ASSESSEE REITERATED THE CONTENTIONS O N THE LINE RAISED BEFORE THE LEARNED CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE GIFT BUT THE SALE OF A PART OF THE JEWELLE RY IN THE ASSESSMENT YEAR UNDER CONSIDERATION IS NOT ACCEPTED AS GENUINE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION OF SUCH JEWELLERY THROUGH CHEQUES. IN SUPPORT OF THE CLAIM THE ASSESSEE FURNISHED THE COPY OF BILL OF M/S. BHOOTNATH JEWELLERS PRIVATE LIMITED DT.16.1.2005 (P.81 OF PB) AND COPY OF TWO CHEQUES FOR RS. 5 LAKHS AND RS.4 LAKHS DT.17.1.2005 AND 4.2.2005 RESPECTIVELY (P.80 OF PB). THE 9 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) LEARNED AR OF THE ASSESSEE CONTENDED THAT SINCE THE ASSESSEE HAS ESTABLISHED THE SALES OF JEWELLERY WITH SUPPORTING EVIDENCE THE ADDITION OF RS.9 LAKHS MADE U/S.68 OF THE ACT IS NOT JUSTIFIED. 13. THE LEARNED DR ON THE OTHER HAND CONTENDED THAT THE ASSESSEE HAS STATED THAT THE JEWELLERY WAS SOLD TO M/S. BHOOTNATH JEWELLERS PRIVATE LIMITED OF SURAT THROUGH AN AGENT OF KOLKATA BUT THE ASSESSEE HAS FAILED TO FURNISH THE NAMES AND ADDRESS OF THE SAID AGENT. THE LEARNED DR FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS VERIFIED THE BANK DETAILS AND HE FOUND THAT THE ADDRESS GIVEN BY T HE BANK WAS AT 22/1 ARMENIAN STREET KOLKATA BUT ON VERIFICATION IT WAS FOUND THAT THERE WAS NO BUSINESS ACTIVITIES AT THE ABOVE ADDRESS IN THE NAM E OF BHOTH NATH JEWELLERS PVT.LTD. NOR THERE WAS ANY PERSONA NAMED ARVIND MISRA. THE ASSESSEE THUS HAVING NO T ESTABLISHED THE SALES OF JEWELLERY THE IMPUGNED ADDITION OF RS.9 LAKHS MADE U/S.68 OF THE ACT IS JUSTIFIED. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS RECEIVED GIFT OF JEWELLE RY. THE ASSESSEE CLAIMS THAT HE SOLD JEWELLERY WORTH ABOUT RS.9 LAKHS OUT OF THE SAID JEWELLERY RECEIVED ON GIFT AND INTRODUCED IN THE SHARE CAPITAL. WHILE EXPLAINING THE SAID SALE THE ASSESSEE CLAIMED THAT JEWELLERY WERE SOLD TO M/S. BHOOTNATH JEWELLERS PRIVATE LIMITED OF SURAT. THE LETTER ISSUED BY THE ASSESSING OFFICER TO THE SAID NAMED PERSON AT THE ADDRESS GIVEN IN THE BILL WAS RETURNED BACK WITH POSTAL REMARKS NO SUCH PERSON. THE ASSESSEE HAS NOT FURNISHED THE NAME OF THE AGENT THROUGH WHOM HE CLAI MED TO HAVE SOLD JEWELLERY TO M/S. BHOOTNATH JEWELLERS PRIVATE LIMITED OF SURAT. FURTHER ON ENQUIRY FROM BANK IT WAS ASCERTAINED THAT THERE WAS NO BUSINESS ACTIVITIES CONDUCTED IN THE NAME OF BHOOTNATH JEWELLERS PVT. LTD NOR THERE WAS ANY PERSON NAMED ARB IND MISRA IN THE ADDRESS GIVEN BY THE BANK I.E. 22/1 ARMENIAN STREET KOLKATA. FURTHER THE ASSESSEE HAS NOT FURNISHED ANY DETAILS OF JEWELLERY CLAIMED TO HAVE SOLD TO M/S. BHOOTNATH JEWELLERS (P) LTD. CONSIDERING THE ABOVE FACTS WE ARE OF THE CONSIDERE D OPINION THAT THE ASSESSEE HAS NOT PROVED THE SALES OF JEWELLERY TO M/S. BHOOTNATH JEWELLERS (P) LTD . MERE FILING OF BILL OF M/S. 10 /ITA NO. 2002/KOL/2009 AND ITA NO. 1809/KOL/2009 (CROSS APPEALS) BHOOTNATH JEWELLERS (P) LTD. AND THE CLAIM OF RECEIPT THROUGH CHEQUES ARE NOT SUFFICIENT TO ESTABLISH THE CLAIM THAT THE ASS ESSEE HAS RECEIVED MONEY CONSIDERATION OF RS.9 LAKHS OUT OF SALE OF PART OF JEWLLERY HE RECEIVED AS GIFT. THE ASSESSEE HAVING FAILED TO ESTABLISH HIS ABOVE CLAIM IN OUR CONSIDERED VIEW THE AUTHORITIES BELOW ARE JUSTIFIED IN MAKING ADDITION OF RS.9 LAKHS U/S.68 OF THE ACT. WE THEREFORE CONFIRM THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD AND DISMISS GROUND NO.2 OF THE APPEAL TAKEN BY THE ASSESEE. 15. IN THE RESULT ITA NO.2002/KOL/2009 FILED BY THE REVENUE IS DISMISSED AND ITA NO.1809/KOL/2009 FILED B Y THE ASSESEE IS ALLOWED IN PART. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 23.04.2010 SD/ - SD/ - ( . . ) (B.C.MEENA) ACCOUNTANT MEMBER. ( . . ) B.R.MITTAL JUDICIAL MEMBER ( ) DATE: 23. 04.2010 - COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE : SHRI SANJAY SAHA 162 CIT ROAD SCHEMD VIIM KOLKATA 2 THE REVENUE : ACIT CIRCLE 40 KOLKATA. 3. / THE CIT 4. ( ) / THE CIT(A) 5. / DR KOLKATA BENCHES KOLKATA 6. GUARD FILE . / TRUE COPY / BY ORDER / DEPUTY REGISTRAR . ( /H.K.PADHEE) / SNR.PRIVATE SECRETARY.