DCIT Circle-17 (1), New Delhi v. Vishal Chain & Jewellery Pvt. Ltd, New Delhi

ITA 2782/DEL/2008 | 2003-2004
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 278220114 RSA 2008
Assessee PAN NPAGE3167O
Bench Delhi
Appeal Number ITA 2782/DEL/2008
Duration Of Justice 3 year(s) 1 month(s) 2 day(s)
Appellant DCIT Circle-17 (1), New Delhi
Respondent Vishal Chain & Jewellery Pvt. Ltd, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 30-09-2011
Date Of Final Hearing 16-08-2011
Next Hearing Date 16-08-2011
Assessment Year 2003-2004
Appeal Filed On 27-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SMT DIVA SINGH JUDICIAL MEMBER AND SHRI B.K. HALDAR ACCOUNTANT MEMBER I.T.A. NO.2782/DEL/2008 & I.T.A. NO.4773 /DEL/2009 ASSESSMENT YEAR : 2003-04 & 2006-07 DCIT M/S VISHAL CHAIN & JEWELLERY CIRCLE-17 (1) PVT. LTD. 2775/20 IDST FLOOR NEW DELHI. V. BEEDAN PURA KAROL BAGH DELHI. (APPELLANT) (RESPONDENT) AABCV AABCV AABCV AABCV- -- -2103 2103 2103 2103- -- -K KK KPAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. APPELLANT BY : DR. B.R.R. KUMAR SR. DR. RESPONDENT BY : SHRI M.M. BHASIN & SHRI A.K. AGGARWAL C.AS. ORDER PER B.K. HALDAR AM: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF LD CIT(A)-XIX NEW DELHI DATED 1 0.6.2008 AND 26.10.2009 FOR ASSESSMENT YEAR 2003-04 AND 2006-07 RESP ECTIVELY. AS THE ASSESSEE IS THE SAME AND FOR THE SAKE OF CONVENIENCE T HESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. I.T.A. NO. 2782/DEL/2008 I.T.A. NO. 2782/DEL/2008 I.T.A. NO. 2782/DEL/2008 I.T.A. NO. 2782/DEL/2008 (ASSESSMENT YEAR 2003 (ASSESSMENT YEAR 2003 (ASSESSMENT YEAR 2003 (ASSESSMENT YEAR 2003- -- -04) 04) 04) 04) : :: : 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: - ITA NO2782 & 4773/DEL/08-09 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.15 32 644/- ON ACCOUNT OF VALUE OF EXCESS GOLD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.24 95 861/- ON ACCOUNT OF DIFFERENCE OF GOLD ISSUED FOR REMAKING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.1 50 000/- O N ACCOUNT OF UNEXPLAINED CREDIT OF SHARE HOLDER. 3. THE ASSESSEE IS A MANUFACTURER AND TRADER OF GOLD JEW ELLERY. DURING THE YEAR UNDER CONSIDERATION THERE WAS A SURVE Y OPERATION U/S 133A OF THE ACT ON THE BUSINESS PREMISES OF THE ASSESSEE ON 15.3.2003. THE ASSESSEE SURRENDERED A SUM OF `.36 LAKHS A S ITS INCOME CONSISTING OF THE FOLLOWING:- 1) INVESTMENT NOT DECLARED IN THE BOOKS OF ACCOUNT (FOR RENOVATION OF SHOP/FURNITURE FIXTURE. `.2 00 000/- 2) UN-ACCOUNTED STOCK OF GOLD LYING WITH SHAKTI GHOSH. `.34 00.000/- ----------------------- TOTAL `.36 00 000/- ------------------------ THE ABOVE INCOMES WERE SHOWN AS INCOME UNDER THE HEAD OTHER SOURCES. 4. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED FROM THE DETAILS OF MONTH-WISE ISSUE OF GOLD TO CONTRAC TORS IN RESPECT OF OWN GOODS (ANNEXURE-1 TO ASSESSMENT ORDER) THAT DURING T HE YEAR ITA NO2782 & 4773/DEL/08-09 3 UNDER CONSIDERATION TOTAL ISSUE OF 24 CARAT GOLD (INCL UDING GOLD SURRENDERED AT THE TIMER OF SURVEY) WAS 114020.600 GM S AND ISSUE OF OLD GOLD JEWELLERY AMOUNTED TO 6431.040 GMS. THUS T HE TOTAL GOLD ISSUED TO CONTRACTORS DURING THE YEAR UNDER CONSIDERATI ON WAS 120451.64 GMS. THE ABOVE FIGURES TALLIED WITH THE FI GURES OF CONSUMPTION OF GOLD GIVEN IN THE ANNEXURE TO FORM 3C D CONTAINING QUANTITATIVE DETAILS OF STOCK AS ON 31.3.2003. AS AGAI NST THE SAID ISSUE OF OWN GOLD THE ASSESSEE RECEIVED JEWELLERY OF DIFFERE NT PURITY FROM THE SAID CONTRACTORS MONTH-WISE RECEIPT OF WHICH WAS F URNISHED BY THE ASSESSEE (COPY ATTACHED AS ANNEXCURE-2 TO THE ASSESSMENT OR DER). THE DETAILS OF JEWELLERY OF DIFFERENT PURITY RECEIVE D FROM THE CONTRACTORS COULD BE SUMMARIZED AS UNDER:- --------------------------------------------------- ------------------------------------------------ SL.NO. PURITY OF QTY. OF SEARCH QTY. OF PURE JEWELLERY JEWELLERY (IN GMS.) GOLD I.E. 24 CARAT 1. 83% 138253.460 114750.371 2. 90% 8455.020 7609.518 3. 92% 1086.950 999.994. TOTAL 123359.883 5. THE ASSESSING OFFICER THEREFORE CONCLUDED THAT THE ASSESSEE RECEIVED EXCESS AMOUNT OF 2908.243 GMS. OF 24 CARAT GO LD FROM THE CONTRACTORS. HE THEREFORE HELD THAT THE ASSESSEE MUST H AVE ISSUED THE SAME EXCESS QUANTITY OF GOLD TO THE CONTRACTORS OUT SIDE BOOKS OF ACCOUNTS. AS THE ASSESSEE VALUED 24 CARAT IN THE CLOSING ST OCK AT `.517/- PER GM. THE ASSESSING OFFICER MADE AN ADDITION OF `.15 32 644/- (2908.243 X 527) TO THE INCOME OF THE ASSESSEE. ITA NO2782 & 4773/DEL/08-09 4 6. THE ASSESSING OFFICER ALSO REQUIRED THE ASSESSEE TO FURNI SH THE REGISTER WHEREIN ENTRIES IN RESPECT OF ISSUANCE OF GOLD TO THE CONTRACTORS AND RECEIPT OF FINISHED GOODS FROM CONTRAC TORS WERE KEPT BY THE ASSESSEE. A COPY OF THE REGISTER FOR THE PERIOD 1 .4.2002 TO 31.3.2003 WAS FURNISHED BY THE ASSESSEE. FROM THE ABOVE THE ASSESSING OFFICER NOTED THAT THE ASSESSEE ISSUED 3636.010 GM S OF 83% GOLD ORNAMENTS AND 1099.970 GMS OF 92% GOLD ORNAMENTS FOR REMAKING. THE ABOVE FIGURES OF JEWELLERY ISSUED FOR R E-MAKING ALSO TALLIES WITH THE FIGURES SHOWN IN THE ANNEXURE OF QUAN TITATIVE DETAILS OF STOCK AS ON 31.3.2003 WHICH IS A PART OF TAX AUDIT RE PORT. FROM THIS REGISTER IT WAS NOTED BY THE ASSESSING OFFICER THAT THE TOTAL GOLD ISSUED TO THE CONTRACTORS (OTHER THAN THE OLD GOLD JEWELLER Y) IN THE MONTH OF SEPTEMBER 2002 AND FEBRUARY 2003 WERE AS UNDER;- SEPTEMBER 2002. SEPTEMBER 2002. SEPTEMBER 2002. SEPTEMBER 2002. NAME OF THE CONTRACTOR DATE OF ISSUE QTY OF GOLD ISSUE D PURITY ANIL JEWELLERS 13.9.2002 1166.400 24K 19.9.2002 466.560 24K 28.9.2002 1516.320 24K 29.9.2002 933.120 24K 29.9.2002 1166.400 24K DELHI CHAIN CO. 3.9.2002 583.200 24K 3.9.2002 1663.210 83% 4.9.2002 1166.400 24K 6.9.2002 1749.600 24K 17.9.2002 933.120 24K 20.9.2002 349.920 24K 26.9.2002 583.200 24K TOTAL GOLD ISSUED 12277.45 ITA NO2782 & 4773/DEL/08-09 5 FEBRUARY 2003. FEBRUARY 2003. FEBRUARY 2003. FEBRUARY 2003. ANIL JEWLLERS. 23.2.2003 1972.800 83% 23.2.2003 1099.970 92% 23.2.2003 116.640 24K 26.2.2003 6415.200 24K 27.2.2003 1982.880 24K 28.2.2003 2566.080 24K DELHI CHAIN CO. 21.2.2003 699.840 24K TOTAL GOLD ISSUED. 14853.410 7. THUS TOTAL GOLD ISSUED ON THIS ACCOUNT AMOUNTED TO 27130.860 GMS. HOWEVER AS PER DETAILS OF RAW MATERIAL ISSUED FOR PRODUCTION (ANNEXURE I) TOTAL GOLD ISSUED FOR PRODUCTION (OTHE R THAN OLD GOLD JEWELLERY) FOR THE MONTH OF SEPTEMBER 2002 AND FEB RUARY 2003 WERE SHOWN AT 10614.240 GMS. AND 11780.640 GMS RESPECTIVELY. TOTAL OF THESE WORK OUT TO 22394.880 GMS. THUS TOTAL GOLD ISSUE D AS PER THE REGISTER EXCEEDS THE ISSUE OF GOLD AS PER ANNEXURE-I BY 4735.980 GMS. THE ASSESSING OFFICER THEREFORE CONCLUDED THAT THE AS SESSEE HAS SUPPRESSED ISSUANCE OF GOLD OF 4735.980 GMS IN ANNEXURE I. APPLYING RATE OF `.527/- PER GM. THE ASSESSING OFFICER WORKED O UT AN ADDITION OF `.24 95 861/- ON THIS ACCOUNT. 8. IT WAS ALSO NOTED BY THE ASSESSING OFFICER THAT SHRI P OONAM KUMAR A RELATIVE OF THE DIRECTOR OF THE ASSESSEE COMPAN Y INVESTED A SUM OF `.1 50 000/- IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THE ASSESSEE FURNISHED CONFIRMATION COPY OF THE INCOME TAX RETURN AND ITA NO2782 & 4773/DEL/08-09 6 COPY OF BANK STATEMENT OF THE SAID PARTY. THE ASSESSING OFFICER NOTED THAT A SUM OF `.1 50 000/- WAS DEPOSITED IN CASH IN TH E SAID BANK ACCOUNT ON 31.10.2002 AND ON 1.11.2002 A SUM OF `.1 50 000/- WAS PAID TO THE ASSESSEE TOWARDS SHARE CAPITAL. FROM THE IN COME TAX RETURN OF SHRI PONAM KUMAR IT WAS SEEN THAT HE HAD DE CLARED A TOTAL INCOME OF `.56 804/-. THE ASSESSING OFFICER THEREFORE TOOK PERSONAL DEPOSITION OF SHRI POONAM KUMAR. SHRI POONAM KUMAR ST ATED THAT HE DEPOSITED A SUM OF `.1 50 000/- IN CASH OUT OF THE FUN DS AVAILABLE WITH HIM. IT WAS STATED THAT THE SAID AMOUNT WAS RECEIVED FR OM VARIOUS PERSONS OF HIS VILLAGE TO WHOM HE HAD ADVANCED LOANS ON INTEREST. NO EVIDENCE IN SUPPORT OF THE SAME COULD BE FURNISHED BY HIM. IT WAS ALSO STATED BY SHRI POONAM KUMAR THAT THERE WERE SEVEN FAM ILY MEMBERS IN HIS FAMILY. HE AND HIS BROTHER WERE THE ONLY EARN ING MEMBERS. HIS BROTHERS MONTHLY INCOME WAS `.3 000/- PER MONTH. THE TOTAL EXPENDITURE OF THE FAMILY WAS AROUND `.1500/- TO `.2 000/- P.M. AND HE CONTRIBUTED ALMOST THE SAME AMOUNT EVERY MONTH. SHRI POONAM KUMAR WAS LIVING IN DELHI WITH HIS UNCLE AND HIS MONTHLY EXP ENDITURE WAS ABOUT `.1500/- TO `.2000/- PER MONTH. THE ASSESSING OF FICER DID NOT ACCEPT THE CLAIM OF THE PARTY THAT MONTHLY EXPENDIT URE OF A FAMILY OF SEVEN MEMBERS WAS ABOUT `.1500/- TO `.2000/- PER MONTH . HE ALSO DID NOT ACCEPT THE AVERMENT OF SHRI POONAM KUMAR THAT H IS MONTHLY EXPENDITURE WAS ONLY `.1500/- ESPECIALLY WHEN HE WAS LIVING IN A POST COLONY LIKE SHALIMAR BAGH. THE ASSESSING OFFICER THERE FORE HELD THAT SHRI POONAM KUMAR COULD NOT HAVE SAVED A SUM OF `.1 5 0 000/- WHICH HE COULD INVEST AS SHARE CAPITAL OF THE ASSESSEE COMPANY. HE THEREFORE ADDED THE IMPUGNED AMOUNT AS INCOME OF TH E ASSESSEE. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE LD CIT( A). ITA NO2782 & 4773/DEL/08-09 7 9. BEFORE THE LD CIT(A) IT WAS SUBMITTED BY THE ASSESSE E THAT THE IMPUGNED ADDITION OF `.15 32 644/- WAS MADE BY THE A SSESSING OFFICER BY NOT CONSIDERING THE FOLLOWING:- A. THE QUANTITY OF OLD GOLD JEWELLERY OF 6431.04 GMS. H AVE BEEN CONSIDERED BY THE ASSESSING OFFICER AS PURE 24 CT. GOLD WHEREAS THE SAME WAS OF THE PURITY OF 82.85%. B. IN THE QUANTITY OF CONSUMPTION THE QUANTITY OF GOLD JEWELLERY ISSUED FOR RE-MAKING WAS NOT TAKEN INTO ACCO UNT. 10. BY CONSIDERING THE ABOVE THE POSITION OF GOODS ISSU ED (CONSUMED) FOR THE PRODUCTION WOULD BE AS UNDER:- PARTICULARS OF CONSUMPTION GOODS CONSUMED CONVERSION I NTO 24 CARAT. GOLD (24 CT.) 114020.600 114008.267 OLD GOLD JEWELLERY 6431.040 5327.843 ORNAMENTS ISSUED FOR REMAKING TO M/S ANIL JEWELLERS & DE LHI CHAIN CO. 83% GOLD JEWELLERY 3636.010 3017.888 92% GOLD JEWELLERY 1099.970 1011.972 TOTAL 125167.620 123365.970 11. THUS AGAINST THE ISSUE OF 123365 970 GMS (PURE GOL D) JEWELLERY THE ASSESSEE RECEIVED JEWELLERY OF 122359.883 GMS. (PURE GOLD) FROM CONTRACTORS. THERE IS ONLY A SHORTAGE OF 6 GMS. OF PURE GOLD. 12. THE LD CIT(A) FORWARDED THE CONTENTION OF THE A SSESSEE TO THE ASSESSING OFFICER FOR A REMAND REPORT. IN THE REMAND RE PORT THE ASSESSING OFFICER STATED THAT NEW FACTS HAVE BEEN BROUGHT BY THE ITA NO2782 & 4773/DEL/08-09 8 APPELLANT DURING THE APPELLATE PROCEEDINGS. THE ASSESSI NG OFFICER HOWEVER DID NOT CONTROVERT THE RECONCILIATION STATE MENT FURNISHED BY THE ASSESSEE BEFORE THE LD CIT(A). IN THE ABOVE FACTS T HE ASSESSEE CONTENDED THAT THE IMPUGNED ADDITION BE DELETED. 13. THE LD CIT(A) BY CONSIDERING THE FACTS AND CIRCUM STANCES OF THE CASE OPINED THAT ONLY DISPUTE BETWEEN THE ASSESSING OFFIC ER AND THE ASSESSEE IS ON THE ISSUE OF TOTAL RAW MATERIAL CONSUMED FOR PRODUCTION OF FINISHED GOODS. THE LD CIT(A) ACCEPTED THE CONTENT ION OF THE ASSESSEE AND THE RECONCILIATION FURNISHED BY IT AS THE ASSESSING OFFICER DID NOT CONTROVERT THE SAME IN THE REMAND PR OCEEDINGS. HE THEREFORE DELETED THE IMPUGNED ADDITION OF `.15 32 644/-. 14. WITH REFERENCE TO THE ADDITION 0F `.24 95 861/- IT WAS CONTENDED BY THE ASSESSEE THAT ANNEXURE-1 TO THE ASSESSMENT ORDER FUR NISHED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCE EDINGS DID NOT INCLUDE THE GOLD JEWELLERY OF 4735.980 GMS. ISSUE D FOR REMAKING WHICH WAS RECORDED IN THE STOCK REGISTER. THE DETAILS OF SUCH GOLD JEWELLERY ISSUED WERE AS UNDER:- MONTH NAME OF CONTRACTOR DATE OF ISSUE Q QTY. OF GOL D ISSUE SEPT.2002 DELHI CHAIN CO. 3.9.2002 1663.210 FEB.2003 ANIL JEWELLERS. 23.2.2003 1972.800 FEB.2003 ANIL JEWELLERS. 23.2.2003 1009.970 TOTAL 4735.980 15. THE ABOVE ISSUE WAS PROPERLY RECORDED IN THE STOCK REGISTER AND REPORTED BY THE TAX AUDITOR IN THE QUANTITATIVE TAL LY. ITA NO2782 & 4773/DEL/08-09 9 16. THE ABOVE CONTENTION OF THE ASSESSEE WAS FORWARDED T O THE ASSESSING OFFICER BY THE LD CIT(A) FOR A REMAND REPORT. THE ASSESSING OFFICER DID NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE BUT MERELY STATED THAT THE ASSESSEE WAS FURNISHING NEW FACTS IN THE A PPELLATE PROCEEDINGS. 17. IN VIEW OF THE ABOVE FACTS AND CONSIDERING THAT T HE ASSESSING OFFICER HIMSELF IN PARA 3 OF THE ASSESSMENT ORDER HAS STAT ED AS UNDER:- QUOTE: THE ASSESSEE WAS ASKED TO FURNISH THE REGISTER W HEREIN ENTRIES IN RESPECT OF ISSUANCE OF GOLD TO CONTRACTORS AN D RECEIPT OF FINISHED GOODS FROM CONTRACTORS WERE MADE BY THE ASS ESSEE .. ON PERUSAL OF THE REGISTER WHEREIN ENTRIES IN RE SPECT OF ISSUANCE OF GOLD TO CONTRACTORS AND RECEIPT OF FINISHED GOODS FROM CONTRACTORS IT WAS NOTICED THAT THE ASSESSEE HAS ISSUE D 3636.010 GMS OF 83% GOLD ORNAMENTS AND 1099.970 GMS. O F 92% GOLD ORNAMENTS FOR REMAKING .THESE FIGURES OF JEWELLERY ISSUED FOR REMAKING ALSO TALLIED WITH THE FI GURES SHOWN IN ANNEXURE OF QUANTITATIVE DETAILS OF STOCK AS ON 31. 3.2003 WHICH IS A PART OF TAX AUDIT REPORTUNQUOTE. 18. THE LD CIT(A) HELD THAT THE IMPUGNED AMOUNT OF GOLD NAMELY 4735.980 GMS. HAS BEEN FULLY DISCLOSED BY THE APPELLANT IN QUANTITATIVE DETAILS ATTACHED TO THE TAX AUDIT REPORT. IF THE QUA NTITY OF ORNAMENTS ISSUED FOR REMAKING IS ADDED TO THE RAW MATERIAL CONSUM PTION (22394.880 GMS + 4735.980 GMS) THE TOTAL WOULD BE 271 30.860 GMS WHICH WOULD TALLY WITH THE REGISTER OF ISSUE AND RECEI PT OF FINISHED GOODS. THE LD CIT(A) THEREFORE DELETED THE IMPUGNED ADDITION OF `.24 95 861/-. ITA NO2782 & 4773/DEL/08-09 10 19. AS REGARDS THE ADDITION OF `.1 50 000/- U/S 68 OF THE ACT BEING THE AMOUNT RECEIVED TOWARDS SHARE CAPITAL FROM SHRI POON AM KUMAR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER. RELIANCE WAS ALSO PLACED ON THE FOLLOWING CA SE LAWS:- 1. CIT V. LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC). 2. CIT V. STELLER INVESTMENT LTD. 251 ITR 263 (SC). 3. CIT V. SHREE BHARKHA SYNTHETICS LTD. 270 ITR 477 (RA J.) 4. CIT V. FIRST POINT FINANCE LTD. 286 ITR 477 (RAJ.). 5. CIT V. DOLPHIN CANPACK LTD. 283 ITR 190 (DEL.). 6. UMA POLYMERS (P) LTD. V. DCIT 101 TTJ 124 /100 ITD 1/ 284 ITR 1(AT) (JD.) TM. 20. THE ASSESSING OFFICER IN THE REMAND REPORT CONTENDE D THAT THE CASE OF SOPHIA FINANCE LTD. WAS BASED ON THE FACTS THAT IT WAS A PUBLIC LIMITED COMPANY. THE ASSESSEE BEING A PRIVATE LIMITED C OMPANY THE RATIO OF THE ABOVE CASE WAS NOT APPLICABLE TO IT. TH E ASSESSING OFFICER PLACED RELIANCE ON THE CASE OF CIT V. RUBY TRADERS AN D EXPORTERS LTD. 263 ITR 300 (CAL.). 21. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTA NCES OF THE CASE AND THE CASE LAWS RELIED ON BY BOTH THE PARTIES THE LD CIT(A) HELD THAT THE ASSESSEE COMPANY HAD DISCHARGED ITS PRIMARY ONUS BY SUBMITTING ALL THOSE DOCUMENTS WHICH A COMPANY WAS SUPP OSED TO KEEP WITH REGARD TO SHARE CAPITAL. HE OPINED THAT TH E BURDEN IN THE CASE OF SHARE APPLICATION MONEY IS NOT AS HEAVY AS IN T HE CASE OF NORMAL CASH CREDIT. FOR THE ABOVE PROPOSITION HE RE LIED ON THE FOLLOWING CASE LAWS:- ITA NO2782 & 4773/DEL/08-09 11 1. CIT V. DIVINE LEASING & FINANCE LTD. (SLP NO. CC 375 /2008 ARISING OUT OF I.T.A. NO.53/2005 OF THE HIGH COURT O F DELHI AT NEW DELHI. 2. CIT V. (KOLKATTA) V. M/S SHIPRA RETAILERS (P) LTD. (S LP NO. CC451/2008 ARISING OUT OF I.T.A. NO.576/2004 OF THE HIGH COURT OF CALCUTTA. 3. CIT V. M/S LOVELY EXPORTS (P) LTD. (SLP NO. CC 11993/ 2007 ARISING OUT OF I.T.A. NO.953/2006 OF THE HIGH COURT OF DELH I AT NEW DELHI. 4. CIT V. M/S PONDY METAL & ROLLING MILLS (P) LTD. (SLP NO. CC 12860/2007 ARISING OUT OF I.T.A. NO.788/2006 OF THE HIGH COURT OF DELHI AT NEW DELHI. 5. CIT V. GENERAL EXPORTS CREDITS LTD. (SLP NO.21349/200 7 ARISING OUT OF I.T.A. NO. 880/2006 OF THE HIGH COURT OF DEL HI AT NEW DELHI. 22. THE LD CIT(A) ALSO QUOTED FROM THE JUDGMENT OF H ON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. VALUE CAPITAL SERVI CES PVT. LTD. I.T.A. NO.348/2008 DATED 25.4.2008 AS UNDER:- IT IS QUITE OBVIOUS THAT IS VERY DIFFICULT FOR THE A SSESSEE TO SHOW THE CREDITWORTHINESS OF STRANGERS. IF THE REVENUE HAS AN Y DOUBT WITH REGARD TO THEIR ABILITY TO MAKE THE INVESTMENT THEIR RETURNS MAY BE REOPENED BY THE DEPARTMENT. IN ANY CASE WHAT IS CLINCHING IS THE ADDITIONAL BURD EN ON THE REVENUE. IT MUST SHOW THAT EVEN IF THE APPLICANT DOE S NOT HAVE THE MEANS TO MAKE THE INVESTMENT THE INVESTMENT MADE BY THE APPLICANT ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOM E OF THE ITA NO2782 & 4773/DEL/08-09 12 ASSESSEE. THIS HAS NOT BEEN DONE IN SO FAR AS THE PRESENT CASE IS CONCERNED AND THAT HAS BEEN NOTED BY THE TRIBUNAL AL SO. UNDER THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE TRIBUNAL HAS NOT COMMITTED ANY ERROR IN DELETING THE ADDITION . 23. RELYING ON PLETHORA OF CASE LAWS AS DISCUSSED BY HIM IN PAGES 19 TO 23 OF HIS ORDER THE LD CIT(A) HELD THAT THE APPE LLANT HAD DISCHARGED ITS ONUS IN SUBSTANTIATING THE IMPUGNED TRANSACTION AN D THE ASSESSING OFFICER ON THE OTHER HAND DID NOT BRING ANY ADVER SE MATERIAL ON RECORD TO NEGATE THE CLAIM OF THE ASSESSEE. HE THEREFO RE DELETED THE IMPUGNED ADDITION OF `.1 50 000/-. 24. AGGRIEVED THE REVENUE HAS FILED APPEAL BEFORE T HE TRIBUNAL. 25. BEFORE US THE LD DR HAS RELIED ON THE ORDER OF TH E ASSESSING OFFICER. WITH REFERENCE TO THE FIRST TWO ADDITIONS DI SPUTED BY THE REVENUE IT WAS CONTENDED BY HIM THAT THE RECONCILIA TION FURNISHED BY THE ASSESSEE BEFORE THE LD CIT(A) WAS NOT PROPERLY VERI FIED BY THE ASSESSING OFFICER. AS REGARDS THE ADDITION OF `.1 50 000/ - U/S 68 OF THE ACT IT WAS CONTENDED BY HIM THAT SHRI POONAM KUMAR COULD NOT ADDUCE EVIDENCE IN SUPPORT OF HIS CLAIM THAT `.1 50 0 00/- IN CASH COULD BE DEPOSITED BY HIM OUT OF HIS OWN FUNDS. HE BEING A RELATIVE OF THE DIRECTOR OF THE COMPANY AND TAKING NOTE OF THE ABOV E CIRCUMSTANCES IT SHOULD BE CONSIDERED THAT CREDITWORTHINESS OF THE PARTY AND THE GENUINENESS OF THE TRANSACTION HAS NOT BEEN PROVED. 26. THE LD AR FOR THE ASSESSEE ON THE OTHER HAND RELI ED ON THE ORDER OF THE LD CIT(A). REFERRING TO VARIOUS PAGES O F THE PAPER BOOK IT WAS CONTENDED BY HIM THAT WITH REFERENCE TO THE FIRST TWO ADDITIONS ITA NO2782 & 4773/DEL/08-09 13 DISPUTED BY THE REVENUE PROPER RECONCILIATION WAS FUR NISHED BY THE ASSESSEE BEFORE THE LD CIT(A) AND IN THE REMAND REPORT SOUGHT BY THE LD CIT(A) THE AO COULD NOT POINT OUT ANY DISCREPANC Y IN THE SAME. IN REPLY TO A QUESTION OF THE BENCH IT WAS STATED BY HIM THAT THE ASSESSING OFFICER DID NOT ISSUE ANY SHOW CAUSE TO THE ASSESSE E BEFORE MAKING THE IMPUGNED ADDITIONS. IN THE ABOVE CIRCUMST ANCES IT WAS CONTENDED BY HIM THAT THE ADDITIONS WERE RIGHTLY DEL ETED BY THE LD CIT(A). 27. WITH REFERENCE TO THE ADDITION OF `.1 50 000/- U/S 68 OF THE ACT THE LD AR FOR THE ASSESSEE IN ADDITION TO RELYING ON THE ORDER OF THE LD CIT(A) SUBMITTED THAT THE SOLE GROUND FOR WHICH THE I MPUGNED ADDITION WAS MADE BY THE ASSESSING OFFICER WAS DEPOSIT OF `.1 50 00 0/- IN CASH IN THE BANK ACCOUNT OF SHRI POONAM KUMAR ONE DAY B EFORE THE ISSUE OF THE CHEQUE FOR EQUAL AMOUNT TO THE ASSESSEE. IT WAS CON TENDED BY HIM THAT AS SHRI POONAM KUMAR HAS NEVER DENIED INVESTI NG THE AMOUNT OF `.1 50 000/- WITH THE ASSESSEE COMPANY ON THE ABOVE GROUND NO ADDITION U/S 68 OF THE ACT COULD HAVE BEEN MADE. REF ERRING TO THE FACTS AND CIRCUMSTANCES OBTAINED IN THE CASE OF RUBY TRADER S (SUPRA) IT WAS CONTENDED BY THE LD AR FOR THE ASSESSEE THAT THE SAID CA SE WAS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE S CASE. 28. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. WE HAVE ALSO GONE THROUGH THE CASE LAWS CITED BY BOTH THE PARTIES. 29. WITH REFERENCE TO THE ADDITION OF `.15 32 644/- AND `.24 95 861/- WE FIND THAT THE RECONCILIATION FURNISHED BY THE ASSESSE E BEFORE THE LD CIT(A) ARE FULLY SUPPORTED BY THE EVIDENCE FURNISHE D BY THE ASSESSEE IN THE PAPER BOOK. THE LD CIT(A) HAS ALSO FOUND THE SAME IN ORDER. THE REVENUE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO DI SPUTE THE ITA NO2782 & 4773/DEL/08-09 14 RECONCILIATION FURNISHED BY THE ASSESSEE. IN THIS VIEW O F THE MATTER WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD CIT(A) ON THESE ADDITIONS AND CONFIRMED HIS FINDING. THUS GROUND NOS. 1 & 2 TAKEN BY THE REVENUE ARE REJECTED. 30. AS REGARDS THE ADDITION OF `.1 50 000/- U/S 68 OF THE ACT WE FIND THAT SHRI POONAK KUMAR HAS ALSO INVESTED AN AMOUNT OF `.1 87 000/- IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY PRIOR TO 31.3. 2002. HIS TOTAL SHARE CAPITAL INCLUDING THE SHARE APPLICATION MONEY O F `.1 50 000/- DURING THE FINANCIAL YEAR 2002-03 AMOUNTED TO `.3 37 000/-. THIS IS EVIDENT FROM ASSESSEES PAPER BOOK PAGE 33. THE ASSESSEE HAS ALSO FURNISHED ALL NECESSARY EVIDENCE IN THIS REGARD. SHRI POONAM KUMAR HAS NEVER DENIED THE SAID TRANSACTION IF SHRI POONAM K UMAR COULD NOT SUBSTANTIATE THE DEPOSIT OF `.1 50 000/- IN HIS BANK A CCOUNT ACTION COULD HAVE BEEN TAKEN IN HIS CASE .BUT THE SAME DOES NO T JUSTIFY ADDING THE IMPUGNED AMOUNT IN THE HANDS OF THE ASSESSE E U/S 68 OF THE ACT. THE REVENUE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE CASH DEPOSIT OF `.1 50 000/- IN SHRI POONAM KUMARS ACCOUNT CAME OUT OF THE COMPANYS COFFER. IN THE ABOVE CIRC UMSTANCES AND TAKING NOTE OF THE FINDING OF THE LD CIT(A) ON TH IS ISSUE WE DO NOT FIND ANY MERIT IN THE GROUND TAKEN BY THE REVENUE. THUS GROUND NO.3 TAKEN BY THE REVENUE IS ALSO REJECTED. 31. IN THE RESULT THE APPEAL OF THE REVENUE FOR ASSESSM ENT YEAR 2003-04 IS DISMISSED. (I.T.A. NO.4773/DEL/2009 FOR ASSESSMENT YEAR 2006 (I.T.A. NO.4773/DEL/2009 FOR ASSESSMENT YEAR 2006 (I.T.A. NO.4773/DEL/2009 FOR ASSESSMENT YEAR 2006 (I.T.A. NO.4773/DEL/2009 FOR ASSESSMENT YEAR 2006- -- -07): 07): 07): 07): 32. IN THIS APPEAL THE REVENUE HAS REVISED ITS GROUNDS O F APPEAL. THE LD AR FOR THE ASSESSEE DID NOT HAVE ANY OBJECTION TO S UBSTITUTION OF THE ITA NO2782 & 4773/DEL/08-09 15 ORIGINAL GROUNDS OF APPEALS BY THE SAID GROUNDS. IN VI EW OF THE ABOVE THE REVISED GROUNDS TAKEN BY THE REVENUE ARE BEING AD JUDICATED. THE REVISED GROUNDS TAKEN BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.2 17 64 152/- O N ACCOUNT OF DISCREPANCY IN THE PURCHASES IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY VIS-A-VIS OF THE SELLER WITHOUT ANY CRED IBLE EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.2 17 64 152/ - ON ACCOUNT OF NON VERIFICATION OF THE GENUINENESS OF THE PURCHAS ES AND ADMITTING FRESH EVIDENCE WITHOUT GIVING ANY OPPORTUN ITY TO THE ASSESSING OFFICER. 33. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF THE ACT TO SOME OF THE PARTIES F ROM WHOM THE ASSESSEE MADE PURCHASES. NOTICES SENT TO THE FOLLOWING PART IES CAME BACK UN-SERVED. NAME PURCHASES SHOWN BY THE ASSESSEE 1. BALAJI CHAIN CO. 1 55 27 844/- 2. BENGALI CHAIN CO. 62 36 308/- TOTAL 2 17 64 152/- WHEN ASKED TO PROVE THE GENUINENESS OF THESE PURCHASES T HE ASSESSEE INITIALLY FURNISHED CONFIRMATIONS FROM THE SAID P ARTIES. THE ASSESSING OFFICER HOWEVER AS PER ORDER SHEET ENTRY DATE D 17.12.2008 REQUIRED THE ASSESSEE TO PRODUCE THESE PARTIES. INSTEAD OF PRODUCING THESE PARTIES IT WAS CONTENDED BY THE ASSESSEE THAT AS THE NEW ITA NO2782 & 4773/DEL/08-09 16 ADDRESSES OF THE PARTIES AS WELL AS THEIR CONFIRMATIONS HAVE BEEN FURNISHED THE ONUS CAST ON IT STOOD DISCHARGED. THE AS SESSEE ALSO VOLUNTEERED TO DELIVER NOTICES ISSUED BY THE ASSESSING OFF ICER TO THE SAID PARTIES. IT WAS ALSO REQUESTED THAT FRESH LETTERS MAY BE ISSUED TO THESE PARTIES. 34. THE ASSESSING OFFICER OPINED THAT THOUGH IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENFORCE THE ATTENDANCE OF THE WITN ESS THAT BY ITSELF DID NOT GIVE A RIGHT TO THE ASSESSEE NOT TO PRODUCE THE PARTIES AS THE ENQUIRY LETTER ADDRESSED TO SUCH PARTIES CAME BACK UN-SE RVED. PROVIDING FRESH ADDRESSES AT THE FAG END OF THE LIMITAT ION PERIOD WOULD NOT MAKE IT MANDATORY FOR THE ASSESSING OFFICER TO LOCA TE SUCH PARTIES AND WRITE TO THEM REPEATEDLY. IT WAS HELD BY HIM T HAT IN THE ABOVE CIRCUMSTANCES THE ONUS THAT LAY ON THE ASSESSEE WAS NOT DI SCHARGED. AS THE ASSESSEE DID NOT PRODUCE THESE PARTIES AND THE ASSESSIN G OFFICER COULD NOT VERIFY THE PURCHASES MADE FROM THE SAID PARTIES WITH REFERENCE TO SUPPORTING DOCUMENTS SUCH AS PURCHASE AND S ALE BILLS AND COPIES OF BANK STATEMENTS OF THE SAID PARTIES THE ASSESSIN G OFFICER HELD THAT PURCHASES TO THE TUNE OF `.2 17 64 152/- WE RE BOGUS. HE THEREFORE MADE THE SAID ADDITION TO THE INCOME OF T HE ASSESSEE. 35. ON APPEAL BEFORE THE LD CIT(A) THE CONTENTIONS OF THE LD AR FOR THE ASSESSEE WERE AS UNDER:- THE ASSESSEE HAS PROVIDED VIDE LETTER DATED 04.4.08 THE DETAILS OF PURCHASES GIVING DATE OF PURCHASE BILL NO. AMOU NT OF PURCHASE DATE OF CHEQUE CHEQUE NO. BANK NAME AND AMOUNT OF CHEQUE. COMPLETE SET OF BOOKS OF ACCOUNTS WITH ORIGINAL PURCHA SE BILL VOUCHERS VAT RETURNS VAT RETURN DEPOSIT ACKNOWLEDGEM ENT ITA NO2782 & 4773/DEL/08-09 17 PURCHASE REGISTER BANK STATEMENTS ETC. WERE PRODUCED BEFORE AO AND WERE VERIFIED BY HIM AND NO DISCREPANCY OR MI STAKE WAS POINTED OUT BY HIM. ACCOUNT CONFIRMATIONS OF M/S BENGALI CHAIN CO. & BAL AJI CHAIN CO. WERE FURNISHED WHICH CONTAIN DETAILS OF EVERY TR ANSACTION. THE ASSESSEE IS REGISTERED WITH DELHI VAT ( VALUE ADDED T AX) DEPARTMENT UNDER DELHI TRADE & TAXES LAWS AND NEEDS TO MAINTAIN PROPER RECORDS OF SALES AND PURCHASES AND FILE MONTHLY VAT RETURNS IN THE PRESCRIBED FORMAT. PURCHASE REGISTER CLEARLY SHOWS THE EACH AND EVERY PURC HASE MADE FROM THESE ALL PARTIES INCLUDING BALAJI CHAIN CO . & BENGALI CHAIN CO. AND COPY OF THE VAT RETURN DEPOSITED WITH THE VAT DEPARTMENT SUBMITTED TO AO GAVE MONTHLY FIGURES OF SA LES PURCHASE VAT COLLECTED VAT PAID. THE MONTHLY STOCK SUMMARY WAS FILED WITH A.O. & QUANTI TATIVE DETAILS ATTACHED TO INCOME TAX AUDIT REPORT WERE ALSO ON RECORD WITH THE LD AO. THE QUANTITATIVE DETAIL LS ATTACHED WITH THE TAX AUDIT REPORT HAVE BEEN CERTIFIED BY A CHARTERED ACC OUNTANT AFTER PROPER VERIFICATION CHECKING AND EXAMINING OF ALL THE RECORDS & DOCUMENTS. FURTHER ON VERIFICATION NO DISCREPANCY WAS FOUND BY A. O. AND THUS THERE IS NO DEFECT IN PURCHASE MADE FRO M THEIR PARTIES. THE CONTENTION OF THE LD A.O. IN PARA 4.2 OF THE ASSE SSMENT ORDER THAT ON 15.12.2008 - AS NOTICES U/S 133(6) ADDRESSED TO BANGALI CHAIN & CO. & BALAJI CHAIN & CO. HAS COME BACK UN SE RVED - ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THE PURCHASES IS NOT RIGHT AS ON THIS DATE WE WERE ASKED TO F URNISH REASON FOR NON SERVICE OF NOTICES AND IN CASES WHERE THE RE IS A ITA NO2782 & 4773/DEL/08-09 18 CHANGE IN ADDRESS PRESENT ADDRESS. FOR THIS REASON VIDE O UR REPLY DATED 17.12.2008 I.E. WITHIN TWO DAYS WE HAV E PROVIDED FOR THE REASON OF CLOSURE OF PREMISES OF M/S BALAJI CHAI N CO. THERE BEING MISHAP IN HIS FAMILY (FAMILY MEMBER HAS D IED COPY OF DEATH CERTIFICATE IS ATTACHED AND THE NEW ADDRESS O F THE BENGALI CHAIN CO. WAS ALSO PROVIDED. FURTHER ON THE 17.12.2008 SAME DAY AFTER FILLING THE REPLY DURING DISCUSSIONS WITH THE AO A.R. OF THE ASSESSEE HAS REQUESTED TO SEND THE NOTICES AGAIN TO THESE PARTIES AND SENSING AO'S UNWILLINGNESS A/R ALSO VOLUNTEERED TO DELIVER THESE LET TER / NOTICES TO THESE PARTIES UNDER ACKNOWLEDGMENT OR TAKE SOMEONE FROM INCOME TAX OFFICE FOR DELIVERING THE LE TTERS AT ASSESSEE'S COST. HOWEVER THE SAME WAS FLATLY REFUSED BY LD. AO AND INSISTED ON PRODUCING THESE TWO PARTIES ON OUR OWN BEFORE HIM. A/R FURTHER EXPLAINED THAT NOBODY WOULD ATTEND LD. AO OFFICE UNLESS NOTICES ARE PROVIDED BY AO. HOWEVER THE AO WAS IN NO MOOD TO EXERCISE HIS POWERS OF SUMMONING THE WITNESS. AS THIS WAS NOT BROUGHT ON RECORD BY THE LD. AO SENSING THERE MAY BE TROUBLE/TO PROTECT THE ASSESSEE'S INTEREST WE WER E FORCED BY CIRCUMSTANCES TO BRING THE VERBAL OFFER ON RECORD VIDE OUR LETTER DT. 23.12.2008 (PB 38) AND IN OUR REPLY DATED 23.12.08 WE ONLY INCORPORATED THE OFFER WE HAVE MADE IN PAST. THEREFORE THE CONTENTION OF LD. AO. FURTHER HE HAS NEVER SENT LETTER TO BENGALI CHAIN CO. ON NEW ADDRESSES. IN CASE OF BALAJI CHAIN CO. DEATH OF THE FA MILY MEMBER HAS. RESULTED IN CLOSURE OF THE PREMISES EVEN IN THIS CASE LD. AO HAS NOT SENT THE NOTICE AGAIN AND HE FAILE D TO APPRECIATE THE SETTLED LAW AS PER COMMENTARY AND LEGA L CITATIONS ITA NO2782 & 4773/DEL/08-09 19 AS REPORTED ON PAGE 3167 OF INCOME TAX LAW BY CHATUR VEDI & PITHISARIA UNDER SECTION 68 (PB-65). 36. IT WAS NOTED BY THE LD CIT(A) THAT IN CASE OF BAL AJI CHAIN COMPANY THERE WAS NO CHANGE OF ADDRESS WHEREAS IN THE C ASE OF BENGALI CHAIN CO. THERE WAS A NEW ADDRESS. IT WAS ALSO N OTED BY HIM THAT OUT OF TOTAL PURCHASE OF `.1 55 27 844/- MADE FROM BALAJI CHAIN CO. THE ASSESSEE PAID AN AMOUNT OF `.73 LAKHS THROUGH CH EQUES DURING THE RELEVANT PREVIOUS YEAR AND THE BALANCE AMOUNT TO BE PAID TO THE PARTIES AS ON 31.3.2006 WAS `.82 27 844/- AS PER THE BO OKS OF ACCOUNTS OF THE ASSESSEE THE LD CIT(A) FOUND THE SAME TO BE VERI FIABLE. THE PAN OF THE PARTY IS ACBPV-8621-R AND IT WAS ASSESSED IN C IRCLE-6 (1). THE LD CIT(A) ALSO NOTED THAT `.82 27 844/- WAS PAID BACK BY CHEQUES. IN ADDITION AN INTEREST OF `.5 01 095/- WAS ALSO PAID BY THE ASSESSEE. THESE PAYMENTS WERE MADE DURING FINANCIAL YEAR 2006-0 7. 37. IN THE CASE OF BENGALI CHAIN CO. IT WAS NOTED BY THE LD CIT(A) THAT TOTAL PURCHASE OF `.62 36 308/- WAS MADE FROM T HE SAID PARTY. THE ASSESSEE PAID `.39 LAKHS BY CHEQUES DRAWN ON INDIAN OVERSE AS BANK AND THE CLOSING BALANCE WAS `.23 36 308/- AS ON 31.3. 2006. HE MADE SIMILAR ENQUIRIES AS IN THE CASE OF BALAJI CHAIN CO. AN D FOUND THAT THE PARTY WAS ASSESSED TO TAX IN RANGE-17 AND THE BALANCE OU TSTANDING AMOUNT WAS PAID BY THE ASSESSEE THROUGH CHEQUES DURING TH E NEXT FINANCIAL YEAR. 38. TAKING NOTE OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HELD THAT THE ASSESSEE DISCHARGED THE ONUS CAST ON IT AND THE ASSESSING OFFICER FAILED TO BRING ON RECORD ANY EVIDEN CE IN SUPPORT OF THE SAID ADDITION. IT WAS OPINED BY THE LD CIT(A) THA T IMPUGNED ADDITION WAS MADE BY THE ASSESSING OFFICER MERELY ON SUSPI CION ITA NO2782 & 4773/DEL/08-09 20 SURMISES AND CONJECTURES. FOR THE ABOVE PROPOSITION HE RELIED ON THE FOLLOWING CASE LAWS:- 1. DHIRAJLAL GIRDHARILAL V. CIT 26 ITR 736. 2. OMAR SALAY MOHAMMED SAIT. V. CIT 37 ITR 151 3. DHAKESHWARI COTTON MILLS LTD. V. CIT 26 ITR 775. 4. LALCHAND BHAGAT AMBICA RAM V. CIT 37 ITR 288 5. ACCHYALALSHAW V. ITO (2009) 30 SOT 44 (KOL.). HE THEREFORE DELETED THE IMPUGNED ADDITION. 39. AGGRIEVED THE REVENUE HAS FILED APPEAL BEFORE THE TRIBUNAL. 40. WE HAVE HEARD THE PARTIES AT GREAT LENGTH AND PE RUSED THE RECORD. WE FIND THAT IN THE REVISED GROUNDS OF APPEAL S REVENUE IN GROUND NO.2 IS CONTENDING THAT THE LD CIT(A) HAS ADMI TTED ADDITIONAL EVIDENCE AND DECIDED THE ISSUE WITHOUT GIVING ANY OPP ORTUNITY TO THE ASSESSING OFFICER. WE FIND SUCH CONTENTION OF THE REVENU E TO BE TRUE. THE DETAILS AS ENUMERATED IN SL. NO.14 & 16 OF THE ASSE SSEES PAPER BOOK PAGES WERE THE ADDITIONAL EVIDENCE BEFORE THE L D CIT(A). THE LD CIT(A) BEFORE ADMITTING AND RELYING ON THE SAME WAS R EQUIRED TO GIVE AN OPPORTUNITY TO THE ASSESSING OFFICER IN TERMS OF RULE 46A OF THE I.T. RULES 1962 WHICH HE FAILED TO DO. IN THIS VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE LD CIT(A) ON THE IMPUGNED ISSUE AND REMIT THE MATTER BACK TO HIS FILE WITH THE DIRECTION THAT A FR ESH ORDER BE PASSED AS PER LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNIT Y OF BEING HEARD. THE LD CIT(A) SHOULD ALSO GIVE NECESSARY OPPORTU NITY TO THE REVENUE IN TERMS OF RULE 46A OF I.T. RULES 1962. ITA NO2782 & 4773/DEL/08-09 21 41. IN THE RESULT THE APPEAL OF THE REVENUE FOR ASSESSM ENT YEAR 2003-04 IS DISMISSED WHEREAS THE APPEAL FOR ASSESSMENT YEAR 2006-07 FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPO SES. 42. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30TH DAY OF SEPTEMBER 2011. SD/- SD/- (DIVA SINGH) (B.K. HALD AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.30.9.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DEL HI. TRUE COPY. BY ORDER (ITAT NEW DELHI). DATE OF HEARING 29.8.2011 DATE OF DICTATION 27.9.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 30 .9.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 30.9.2011. ITA NO2782 & 4773/DEL/08-09 22