Ashwani Kumar and Co. P. Ltd.,, New Delhi v. ACIT, New Delhi

ITA 3557/DEL/2013 | 2007-2008
Pronouncement Date: 30-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 355720114 RSA 2013
Assessee PAN AACCA0441J
Bench Delhi
Appeal Number ITA 3557/DEL/2013
Duration Of Justice 4 year(s) 5 month(s) 26 day(s)
Appellant Ashwani Kumar and Co. P. Ltd.,, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 30-11-2017
Date Of Final Hearing 11-07-2017
Next Hearing Date 11-07-2017
First Hearing Date 11-07-2017
Assessment Year 2007-2008
Appeal Filed On 03-06-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER & SHRI O.P. KANT ACCOUNTANT MEMBER I.T.A. NO.3287/DEL/2013 ASSESSMENT YEAR:2007-08 DCIT CENTRAL CIRCLE 22 NEW DELHI V. ASHWANI KUMAR & CO. PVT. LTD. B-92 MAYAPURI INDL. AREA PHASE II NEW DELHI TAN/PAN:AACCA0441J (APPELLANT) (RESPONDENT) I.T.A. NO.3557/DEL/2013 ASSESSMENT YEAR:2007-08 ASHWANI KUMAR & CO. PVT. LTD. B-92 MAYAPURI INDL. AREA PHASE II NEW DELHI V. DCIT CENTRAL CIRCLE 22 NEW DELHI TAN/PAN:AACCA0441J (APPELLANT) (RESPONDENT) I.T.A. NO.4895/DEL/2013 ASSESSMENT YEAR:2009-10 DCIT CENTRAL CIRCLE 2(1) NEW DELHI V. ASHWANI KUMAR & CO. PVT. LTD. B-92 MAYAPURI INDL. AREA PHASE II NEW DELHI TAN/PAN:AACCA0441J (APPELLANT) (RESPONDENT) I.T.A. NO.3558/DEL/2013 ASSESSMENT YEAR:2009-10 ASHWANI KUMAR & CO. PVT. LTD. B-92 MAYAPURI INDL. AREA PHASE II NEW DELHI V. DCIT CENTRAL CIRCLE 22 NEW DELHI TAN/PAN:AACCA0441J (APPELLANT) (RESPONDENT) I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 2 ASSESSEE BY: SHRI PANKAJ DADU C.A. REVENUE BY: SHRI S. K. MISHRA D.R. DATE OF HEARING: 12 10 2017 DATE OF PRONOUNCEMENT: 30 11 2017 O R D E R PER AMIT SHUKLA J.M.: THE AFORESAID CROSS-APPEALS HAVE BEEN FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE AGAINST SEPARATE IMPUGNED ORDER DATED 25/3/2013 FOR THE QUANTUM OF ASSESSMENT PA SSED UNDER SECTION 143(3) READ WITH SECTION 147 FOR ASSESSM ENT YEAR 2007-08; AND ORDER DATED 2/4/2013 FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2009-10 PASSED BY THE LD. CIT (APPEALS)-III NEW DE LHI. 2. WE WILL FIRST TAKE UP THE CROSS-APPEAL FOR ASSESSME NT YEAR 2007-08. IN THE APPEAL FILED BY THE REVENUE THE FOLLOWING GROUND HAS BEEN RAISED:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.5 10 3 0 537/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT IN STOCK BEING THE DIFFERENCE IN THE STO CK STATEMENT SUBMITTED TO THE BANK AS COMPARED TO THE STOCK STATEMENT FURNISHED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 3 3. THE BRIEF FACTS QUA THE ISSUE RAISED ARE THAT THE ASSESSEE-COMPANY HAS FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 25/10/2007 DECLARING ITS TOTAL TAXABL E INCOME AT RS.47 85 298/-. SUCH RETURN OF INCOME WAS SUBJECTE D TO SCRUTINY AND ASSESSMENT ORDER UNDER SECTION 143(3) WA S PASSED VIDE ORDER DATED 31/12/2009 ACCEPTING THE RETURNED INC OME. THEREAFTER ASSESSEES CASE HAS BEEN REOPENED UNDER SECTION 147 BY ISSUANCE OF NOTICE DATED 28/3/2011 UNDER SECTION 1 48. THE BACKGROUND AND THE REASONS FOR REOPENING THE CASE WAS THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) WAS CARRIED OUT ON 8/11/2008 IN THE CASE OF NIMITAYA GROUP IN WHIC H ASHWANI MAHAJAN GROUP WAS ALSO COVERED. THE ASSESSE E- COMPANY WAS ALSO SUBJECTED TO SURVEY UNDER SECTION 13 3A WHEREIN IT WAS REVEALED THAT THE ASSESSEE-COMPANY HAS TA KEN HUGE SHARE APPLICATION MONEY. BASED ON THIS INFORMATIO N ASSESSEES CASE HAS BEEN REOPENED. DURING THE COURS E OF RE- ASSESSMENT PROCEEDINGS AND ON PERUSAL OF THE AUDIT RE PORT THE ASSESSING OFFICER NOTED THAT THE CLOSING STOCK OF THE CO MPANY AS ON 31/3/2007 HAD BEEN SHOWN AT RS.4.98 CRORES WHERE AS THE VALUE OF STOCK STATEMENT AS ON 27/3/2007 FURNISHED TO THE CITY BANK HAD BEEN SHOWN AT RS.10 08 30 357/-. THE ASSESS ING OFFICER FURTHER OBSERVED THAT FROM THE COMPUTER PRINTOUT IT WAS SEEN THAT AS PER MACHINE-WISE STOCK VALUATION THE VALU E OF 163 MACHINES HAD BEEN SHOWN AT RS.9 21 94 750/- AND THUS CAME TO THE CONCLUSION THAT THERE IS A DIFFERENCE BETWEEN THE VALUE SHOWN TO THE CITY BANK AND THE VALUE DISCLOSED IN THE TAX AUDIT REPORT. IN RESPONSE TO SHOW CAUSE NOTICE ASSESSEE HA D STATED AS UNDER:- I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 4 'THE ASSESSEE COMPANY HAS SHOWN THE VALUE OF STOCK AS ON 27.03.2007 AT RS.10 08 30 357/- AND RS.4 98 00 000/ - AS ON 31.03.2007. THE DIFFERENCE OF RS.5 10 30 357/- I N THE STOCK STATEMENT SUBMITTED TO BANK INCLUDES PLANT & MACHINERY IMMOVABLE AND IMMOVABLE ASSETS PURCHASED FROM DRT DELHI FOR RS.3 64 66 010/- AND RS.1 45 64 347/- ARE ADVANCES TO VARIOUS PARTIES AGAINST PURCHASES W HICH ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSE SSEE COMPANY. DETAILS OF ALL THE ABOVE ARE ENCLOSED HERE WITH WHICH JUSTIFY THAT THERE IS NO DIFFERENCE IN THE CL OSING STOCK OF THE COMPANY. 4. HOWEVER THE ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF DIFFERENCE BETWEEN THE STOCK STATEMENT GIVEN TO THE BANK AND THE VALUATION OF STOCK SHOWN IN THE TAX AUDIT R EPORT. 5. BEFORE THE LD. CIT (A) ASSESSEE SUBMITTED THAT THE ENTIRE RECONCILIATION OF THE DIFFERENCE AMOUNT OF RS.5 10 30 357/- WAS SUBMITTED TO THE ASSESSING OFFICER WHICH HAS BEEN FAIL ED TO BE TAKEN NOTE BY HIM. THUS IT WAS SUBMITTED THAT THERE IS N O DIFFERENCE IN THE VALUE OF CLOSING STOCK FOR THE REASO NS THAT:- (I) FIRSTLY THERE IS NO DIFFERENCE IN THE QUANTITY AND VALUE OF CLOSING STOCK WHICH HAS BEEN WORKED OUT BY THE ASSESSING OFFICER; (II) SECONDLY THERE IS NO CASH ELEMENT IN THE CLOSING STOCK AND THE DIFFERENCE OF RS.5 10 30 357/- IS ON ACCOUNT OF PAYMENT GIVEN TO THE SUPPLIERS OF PURCHASE THROUGH ACCOUNT PAYEE CHEQUES FROM THE SAID BANK ACCOUNT AND SUCH PAYMENTS HAVE BEEN SHOWN AS AMOUNTS RECOVERABLE AND NO EXPENSES INCLUDING PURCHASES HAVE BEEN DEBITED I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 5 AND THEREFORE IT WILL HAVE NO EFFECT ON THE PROFIT OF THE ASSESSEE-COMPANY FOR ASSESSMENT YEAR 2007-08; (III) THIRDLY RECONCILIATION OF STOCK STATEMENT IS MEANT ONLY FOR THEIR BANKERS. THERE IS NO MISUSE OF FUNDS OF THE OVERDRAFT OR CASH CREDIT ACCOUNT BECAUSE IT WAS MERELY TO ENJOY CREDIT FACILITIES AGAINST THE CLOSING STOCK; (IV) FOURTHLY FOR THE LAST SEVERAL YEARS ASSESSEE HAS BEEN REGULARLY ASSESSED AND THE TRADING RESULTS AND GROSS PROFIT OF THE ASSESSEE-COMPANY HAVE ALWAYS BEEN ACCEPTED. THERE IS NO CASH SALE OR CASH PURCHASE OR ANY UNACCOUNTED SALE OF PURCHASE FOUND DURING THE YEAR WHICH ALSO SUPPORTS THAT THERE IS NO DIFFERENCE IN THE CLOSING STOCK AS ON 31/3/2007. 6. THE LD. CIT(A) ON PERUSAL OF THE MATERIAL PLACED O N RECORD AND THE FINANCIAL STATEMENTS NOTED DOWN THE FOLL OWING RECONCILIATION:- (A) PLANTS AND MACHINERY RS.3 64 66 010 SCHEDULE VI II OF BALANCE SHEET (B) ADVANCES TO SUPPLIERS RS.1 45 64 347 SCHEDULE X I OF BALANCE SHEET RS.5 10 30 357 I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 6 7. LD. CIT(A) FURTHER NOTED THAT ASSESSEE HAS DISCLOSED TO THE BANKING AUTHORITIES STOCK OF RS.10 08 30 357/- COM PRISING OF THREE ITEMS; FIRSTLY PLANT & MACHINERY (RS.3 64 66 010/-); SECONDLY ADVANCES TO SUPPLIERS (RS.1 45 64 347/-); AND LASTLY STOCK IN HAND (RS.4 98 00 000/-). ALL THESE THREE ITE MS ARE DULY ACCOUNTED FOR IN THE ASSESSEES BOOKS OF ACCOUNT. HE F URTHER OBSERVED THAT THE VALUE OF STOCK STATEMENT WHICH WERE C ALLED FOR BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEE DINGS IF COMPARED WITH THE VALUE OF STOCK AS PER BOOKS OF ACCOU NT IT CAN BE SEEN STOCK FIGURE GIVEN TO THE BANK DOES NOT CONTAIN QUALITY- WISE AND QUANTUM-WISE DESCRIPTION OF EACH STOCK ITEM AN D ITS VALUE THEREOF AND THE ASSESSEE IS NOT MAINTAINING ANY DAY-TO-DAY STOCK REGISTER LOOKING TO THE NATURE OF BUSINESS ACTIVI TY CARRIED OUT BY IT. THUS HE HELD THAT ADDITION COULD NOT BE MADE MERELY ON THE BASIS OF DIFFERENCE IN THE CLOSING STOCK BASED ON STOCK STATEMENT FURNISHED TO THE BANKERS WHICH DOES NOT GIVE A NY DISCREPANCY OF QUANTITY OF ITEM-WISE STOCK WHICH WAS G IVEN TO THE BANKERS SOLELY FOR THE PURPOSE OF CREDIT LIMIT. IN SUP PORT OF HIS REASONING HE RELIED UPON THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. KHAN & SIROHI ROLL ING MILLS REPORTED IN 200 CTR 595 . HE ALSO TOOK NOTE THAT SIMILAR ADDITION WAS MADE IN THE GROUP CONCERN WHEREIN THE LD. CIT (A) HAS GIVEN RELIEF ON SIMILAR LINES. 8. BEFORE US THE LD. SR. D.R. STRONGLY RELYING UPON TH E ORDER OF THE ASSESSING OFFICER SUBMITTED THAT MERE FACT THAT ASSESSEE HAD SHOWN HIGHER VALUATION OF STOCK TO THE BAN K AS COMPARED TO THE CLOSING STOCK APPEARING IN THE BOOKS O F ACCOUNT SHOWS THAT ASSESSEE IS NOT SHOWING CORRECT POSITION OF STOCK AND I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 7 THEREFORE ASSESSING OFFICER WAS JUSTIFIED IN TREATING THE DIFFERENCE OF CLOSING STOCK AS UNEXPLAINED INVESTMENT. 9. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE REL IED UPON THE ORDER OF THE LD. CIT (A) AND ALSO CITED VARIO US DECISIONS ON THE POINT THAT MERELY BECAUSE THERE IS A DIFFERENCE IN VALUE OF STOCK AS SHOWN IN THE BOOKS OF ACCOUNT AND GIVEN TO THE BANK AND WITHOUT THERE BEING ANY DIFFERENCE IN QUANTUM OR ITEM-WISE NO ADDITION CAN BE MADE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS. THE SOLE BASIS OF THE ASSESSING OFFICER FOR MAKING THE ADDITION ON AC COUNT OF UNEXPLAINED INVESTMENT IN THE STOCK IS THAT ASSESSEE H AD DISCLOSED THE VALUE OF STOCK TO THE BANK AT RS.10 08 30 357/- AS AGAINST THE VALUE OF CLOSING STOCK SHOWN IN THE BOOKS OF ACCOUNT AS ON 31/3/2007 AT RS.4.98 CRORES. WE FIND THAT BEFORE THE LD. CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER ASSE SSEE HAS DULY EXPLAINED THAT DIFFERENCE AMOUNT OF RS.5 10 30 357/- WHICH HAS BEEN ADDED BY THE ASSESSING OFFICER WAS FIRSTLY ON ACCOUNT OF PLANT & MACHINERY OF RS.3 64 66 010/- WHICH HAS BEE N SHOWN IN SCHEDULE VIII OF THE BALANCE SHEET; AND SECONDLY ADVANCE TO THE SUPPLIERS SHOWN AT RS.1 45 64 347/- REFLECTED IN SCH EDULE XI OF THE BALANCE SHEET. THUS THERE IS NO SUCH DIFFERENCE APPARENTLY IN THE VALUE OF CLOSING STOCK. IT IS ALSO AN ADMITTED FAC T THAT THERE IS NO DIFFERENCE IN THE QUANTUM AND IN THE ACTUAL VALUE OF THE CLOSING STOCK AS APPEARING IN THE BOOKS OF ACCOUNT AND THERE IS NO CASH ELEMENT ON SUCH DIFFERENCE BECAUSE THE AMOUN T AGGREGATING TO RS.5 10 30 357/- IS ON ACCOUNT OF PAYM ENT GIVEN TO THE SUPPLIERS FOR PURCHASE/EXPENSES INCURRED THROU GH ACCOUNT I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 8 PAYEE CHEQUES FROM THE BANK ACCOUNT AND SUCH PAYMENTS HAVE BEEN SHOWN AS AMOUNT RECOVERABLE AND NO EXPENSES INC LUDING PURCHASE HAVE BEEN DEBITED TO THE PROFIT & LOSS ACCOU NT THEREFORE THERE IS NO EFFECT ON THE PROFIT OF THE ASSES SEE-COMPANY FOR ASSESSMENT YEAR 2007-08 QUA THIS AMOUNT. OTHERWISE ALSO IT IS QUITE STANDARD PRACTICE THAT THE STOCK STATEMENT GIVEN TO TH E BANK IS TO ENJOY HIGHER CREDIT LIMIT AND IF STOCK STATEM ENT DOES NOT GIVE QUANTITY AND ITEM-WISE DETAILS AND SIMPLY VA LUE HAS BEEN ENHANCED (THOUGH IT IS NOT THE CASE HERE) THEN NO ADVERSE INFERENCE CAN BE DRAWN SO AS TO HOLD THAT HIGHER VALU E OF STOCK SHOWN TO THE BANK IS TO BE RECKONED AS UNEXPLAINED I NVESTMENT IN THE HANDS OF THE ASSESSEE. THE LD. CIT (A) AFTER PROPER APPRECIATION OF FACTS AND TAKING NOTE OF THE DETAILS HAS GIVEN A CATEGORICAL FINDING WHICH IS NOT ONLY IN ACCORDANCE TO LAW BUT IS ALSO BASED ON CORRECT APPRECIATION OF FACTS. THUS WE UPHOLD THE ORDER OF THE LD. CIT (APPEALS) IN DELETING THE ADDITION OF RS.5 10 30 357/-. 11. NOW WE WILL TAKE UP ASSESSEES APPEAL. IN THE ORIGIN AL GROUNDS OF APPEAL ASSESSEE HAD CHALLENGED THE ADDITI ON OF RS.90 LAKHS FOR UNEXPLAINED CREDIT ON ACCOUNT OF SHARE APP LICATION MONEY RECEIVED FROM FOUR ENTITIES. LATER ON VIDE PETI TION FOR ADMISSION OF ADDITIONAL GROUND DATED 3/10/2017 ASSE SSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUNDS:- 1) THAT THE APPELLANT REFERS TO ITS APPEAL NO. 3557/DEL/2013 FOR A.Y. 2007-08 FILED ON 3.6.2013 ALONGWITH STATEMENTS OF FACT AND GROUNDS OF APPEAL. 2) THAT HAVING REGARDS TO THE FACTS AND CIRCUMST ANCES OF THE CASE LEARNED A.O. HAS ERRED IN LAW AND ON FACT S IN I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 9 FRAMING IMPUGNED ASSESSMENT ORDER WITHOUT COMPLYING THE MANDATORY CONDITIONS OF SEC. 147 TO 151 AND REOPENI NG OF THE CASE AND FRAMING THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW AND BEYOND THE JURISDICTION OF THE A.O. AND THERE IS NO VALID SATISFACTION AS PER THE LAW U/S 151 OF INCOME TAX ACT 1961. 3) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE LEARNED A.O. HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS.90 00 000/- ON ACCOUNT OF SHARE APPL ICATION MONEY U/S 68 BY TREATING IT AS ALLEGED ACCOMMODATIO N ENTRY AND BY DISREGARDING THE SUBMISSIONS/EVIDENCES OF TH E ASSESSEE AND WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD AND WITHOUT BRINGING ANYTHING CONTRARY ON REC ORD AND WITHOUT PROVIDING OPPORTUNITY OF CROSS EXAMINATION. 4) THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS PA SSED U/S 143(3) ON 31.12.2009 THEREFORE NO NOTICE U/S 148 C OULD HAVE BEEN ISSUED WITHOUT THE PRIOR SATISFACTION OF LD. CIT IN TERMS OF PROVISO TO SEC. 151(1) OF I.T. ACT 1961 W HICH AS PER RECORDS WAS NOT FOLLOWED. 5) THAT THE SAID IMPUGNED ADDITIONS OF RS. 90 00 00 0/- AND THE IMPUGNED ASSESSMENT ORDER ARE BAD IN LAW ILLE GAL UNJUSTIFIED CONTRARY TO FACTS AND LAW WITHOUT GIVI NG ADEQUATE OPPORTUNITY OF HEARING IN VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE AND THE SAME DESERVES TO BE QUASHED AND THE SAME ARE NOT SUSTAINABLE ON LEGAL AND FACTUAL GROUN DS. 6) THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANC ES OF THE CASE LD. A.O. HAS ERRED IN LAW AND FACTS IN CHARGI NG INTEREST U/S 234A 234B 234C AND 234D OF INCOME TAX ACT 19 61. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 10 12. SO FAR AS LEGAL GROUND WHICH HAS BEEN RAISED IN GROUNDS NO. 2 AND 4 WE FIND THAT THE ASSESSEE HAS NO T TAKEN THESE GROUNDS EITHER BEFORE THE ASSESSING OFFICER OR B EFORE THE LD. CIT (A). THESE ARE PURELY LEGAL AND JURISDICTIONAL GROUNDS CHALLENGING THE VALIDITY OF REOPENING UNDER SECTION 1 47 AND ALSO CHALLENGING THE POWER OF THE AUTHORITY FOR SANCTIONING NOTICES UNDER SECTION 148 IN TERMS OF PROVISIONS OF SECTION 15 1(1). ALL THESE FACTS AS RAISED IN THE LEGAL GROUNDS THOUGH DOES NOT NEED ANY INVESTIGATION OF NEW FACTS BUT DEFINITELY IT NEEDS VERIFICATION FROM RECORDS WHICH BEFORE ARE US ARE NOT COMPLETELY AVAILABLE. THEREFORE IN THE INTEREST OF JUSTICE WE FEEL THAT LEGAL ISSUES WHICH HAVE BEEN RAISED BEFORE US SHOULD BE SENT BAC K TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED IN ACCORDAN CE TO LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 13. BESIDES THIS THE LD. COUNSEL FOR THE ASSESSEE HAS ALS O RAISED ANOTHER LEGAL ISSUE BEFORE US THAT NO NOTICE U NDER SECTION 143(2) HAS BEEN SERVED UPON THE ASSESSEE AFTER ASSES SEE HAS FILED THE RETURN OF INCOME IN COMPLIANCE TO THE NOTICE UNDER SECTION 148. THIS ISSUE TOO HAS NOT BEEN RAISED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT (A) THEREFOR E BEING A LEGAL ISSUE WE ARE REMANDING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO VERIFY FROM RECORDS AS TO WHETHE R ANY NOTICE UNDER SECTION 143(2) HAS BEEN SERVED TO THE ASSESSEE IN ACCORDANCE TO LAW. NEEDLESS TO SAY THAT IF ON ALL THE LEGAL ISSUES IT IS FOUND THAT EITHER NOTICE UNDER SECTION 143(2) HAS N OT BEEN SERVED UPON THE ASSESSEE; OR NOTICE UNDER SECTION 148 HAS NOT BEEN SANCTIONED BY THE COMPETENT AUTHORITY; OR REASONS RECORDED ARE NOT IN ACCORDANCE WITH LAW THEN SUCH PROCEEDINGS WILL I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 11 BECOME VOID-AB-INITIO . ACCORDINGLY WE ARE REMANDING BACK THE ENTIRE LEGAL ISSUES RAISED BEFORE US TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH IN ACCORDANCE TO LAW AFT ER GIVING DUE AND EFFECTIVE HEARING TO THE ASSESSEE. 14. SO FAR AS THE ADDITION RELATING TO RS.90 LAKHS ON ACCO UNT OF SHARE APPLICATION MONEY IS CONCERNED ONE OF THE P RELIMINARY GROUND RAISED BY THE ASSESSEE BEFORE US IS THAT THE ASSESSING OFFICER HAS RAISED THE QUERY ON THIS ASPECT AT THE FAG- END OF THE LIMITATION PERIOD AND NO PROPER OPPORTUNITY WAS GIVEN TO PRODUCE THE PERSONS FROM THE COMPANIES WHO HAD SUBSCRIBED TO S HARE APPLICATION MONEY OF THE ASSESSEE-COMPANY. OTHERWISE ON MERITS LD. COUNSEL SUBMITTED THAT WHATEVER DOCUMENTS COU LD BE AVAILABLE TO PROVE PRIMA-FACIE GENUINENESS OF THE TRAN SACTION ALONG WITH IDENTITY AND CREDITWORTHINESS OF THE COMPAN IES WHO HAD SUBSCRIBED TO THE SHARES WAS DULY FILED. HOWEVER THE ONLY ADVERSE INFERENCE THAT HAS BEEN DRAWN AGAINST THE ASSE SSEE IS THAT ASSESSEE COULD NOT PRODUCE THESE PERSONS WHICH IN THE ABSENCE OF PROPER OPPORTUNITY AND TIME ASSESSEE COULD NOT COMPLY WITH. 15. ON THE OTHER HAND THE LD. SR. D.R. STRONGLY OPPOSING TO ASSESSEES SUBMISSION ON THE ISSUE OF SHARE APPLICATI ON MONEY SUBMITTED THAT THE ASSESSING OFFICER DID GIVE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE DIRECTORS OF FOUR SHARE APPLIC ANT COMPANIES HOWEVER THE ASSESSEE FAILED TO DO SO AND EVEN BEFORE THE LD. CIT(A) ASSESSEE COULD NOT PRODUCE THESE PERSO NS. THEREFORE THE ORDER OF THE LD. CIT (A) IN CONFIRMING THE SAID AMOUNT OF RS.90 LAKHS SHOULD BE CONFIRMED. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 12 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUS AL OF THE RELEVANT MATERIAL ON RECORD WE FIND FROM THE PERUS AL OF THE ORDER SHEET ENTRY (COPY OF WHICH WAS FILED DURING THE COURSE OF HEARING BEFORE US) SHOW CAUSE NOTICE HAVE BEEN ISSU ED TO THE ASSESSEE AT THE FAG-END OF LIMITATION THEREFORE APPAR ENTLY IT SEEMS THAT THE TIME GIVEN TO THE ASSESSEE TO PRODUCE THE PE RSONS FROM THE SHARE APPLICANT COMPANIES WAS LESS. THOUGH TH IS OPPORTUNITY WAS GIVEN AGAIN BY THE LD. CIT (A) BUT IT SEEMS THAT ASSESSEE FAILED TO PRODUCE THE SAID SHARE APPLICANTS. NOW BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE WOULD BE IN A POSITION TO PRODUCE THESE PERSONS AND I N THE INTEREST OF JUSTICE THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER BECAUSE ASSESSEE HAS GIVEN AL L THE RELEVANT DOCUMENTS TO PROVE ALL THE THREE LIMBS OF PROVING THE NA TURE AND SOURCE OF CREDIT I.E. IDENTITY; GENUINENESS AND CR EDITWORTHINESS. SIMPLY BECAUSE DIRECTORS OR THE AUTHORIZED PERSONS FR OM THE SAID COMPANY COULD NOT BE PRODUCED NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN. LOOKING TO THE ENTIRE FATS AND CIRCUMSTANC ES OF THE CASE AND ON THE BASIS OF THE PLEA TAKEN BY THE LD. COU NSEL FOR THE ASSESSEE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE WE FEEL THAT THE ISSUE OF SHARE APPLICATION MONEY OF RS.90 LAKHS S HOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER AND ASSESSE E WILL TRY TO PRODUCE THE CONCERNED FROM THE SAID ENTITIES TO CONFIRM THE SAID TRANSACTION. ASSESSING OFFICER SHALL GIVE DUE AND EFF ECTIVE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. ACCO RDINGLY APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 13 17. NOW WE WILL TAKE UP THE CROSS-APPEALS FOR ASSESSMEN T YEAR 2009-10. THE REVENUE IN THE GROUNDS OF APPEAL HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT( A) HAS ERRED IN DELETING THE SEDITION OF RS.9 15 99 354/- ON ACCOUNT OF VALUE OF STOCK WITHOUT CONSIDERING :NE FACT THAT ASSESSEE HAS FAILED TO PROVE THE CORRECT VALUE OF S TOCK ON THE BASIS OF BOOKS OF ACCOUNTS BEFORE THE AO. 2. LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9 50 000/- ON ACCOUNT OF CASH DEPOSIT THE ASSES SEE HAS FAILED TO EXPLAIN THE SOURCES OF CASH DEPOSIT B EFORE THE AO. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 26 49 249/- ON ACCOUNT OF UNACCOUNTED ADVANCE GIVEN TO A-ONE MACHINE COMPONENTS (P) LIMITED WITH OUT CONSIDERING THE FACTS THAT ASSESSEE HAS FAILED TO P ROVE THE GENUINENESS OF THE TRANSACTION BEFORE THE AO. 18. THE BRIEF FACTS QUA THE FIRST ISSUE RAISED ARE THAT THE ASSESSING OFFICER ON PERUSAL OF STOCK STATEMENT FILED BEFORE THE BANK AS ON 25/3/2008 AT RS.12 56 33 468/- AND THE VA LUE OF CLOSING STOCK SHOWN IN THE AUDIT REPORT AS ON 31/3/200 8 AT RS.8 42 50 000/- NOTED THAT THERE IS A SUBSTANTIAL DIFF ERENCE OF RS.4 13 83 468/-. IN RESPONSE TO SHOW CAUSE NOTICE ASSESSEE SUBMITTED AS UNDER:- IT IS AGAIN SUBMITTED THAT THE VALUE OF STOCK AS O N 25.03.2008 OF SUBMITTED TO BANK INCLUDES PLANT & MA CHINERY AND ADVANCES MADE TO SUPPLIERS WHEREAS THE STOCK STATEMENT AS ON 01.04.2008 SHOWS RS. 8 42 50 000/-. ALL THE ABOVE VALUE OF PLANT & MACHINERY AND ADVANCES M ADE FOR PURCHASES HAVE BEEN SHOWN IN THE BOOKS OF ACCOU NT OF I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 14 THE ASSESSEE COMPANY. COPIES OF THESE ACCOUNTS SHOW ING THE DIFFERENCE OF RS.4 13 83 468/- ARE ENCLOSED HEREWIT H WHICH JUSTIFY THAT THERE IS NO DIFFERENCE IN THE VALUE OF STOCK. 19. THE ASSESSING OFFICER HELD THAT ASSESSEES CONTENTION THAT DIFFERENCE ON ACCOUNT OF PLANT & MACHINERY AND ADV ANCES TO THE SUPPLIERS WHICH ARE DULY REFLECTED IN THE BOOKS OF ACCOUNT IS NOT SUPPORTED WITH ANY RELIABLE DOCUMENTARY EVIDENCE AN D ACCORDINGLY HE MADE ADDITION OF DIFFERENCE AMOUNT OF RS.4 13 83 468/- AS UNACCOUNTED INVESTMENT OUTSIDE THE B OOKS OF ACCOUNT. APART FROM THAT ASSESSING OFFICER NOTED THAT SUCH A DIFFERENCE IN THE VALUE OF STOCK AS PER BOOKS OF ACCO UNT AND AS SUBMITTED TO THE BANK AUTHORITIES WERE FOR SUMS AMOUNTIN G TO RS.2 61 20 464/- AS ON 30/9/2008; AND RS.2 40 95 42 2/- AS ON 31/10/2008 AND HAS ADDED THESE AMOUNTS ALSO WITHOUT E VEN CONSIDERING THE FACT THAT DIFFERENCE AS ON 31/3/2008 A T RS.4 13 83 468/- WAS NOT FOR THIS FINANCIAL YEAR AND NO ADDITION COULD HAVE BEEN MADE IN THE ASSESSMENT YEAR 2009-10. 20. BEFORE THE LD. CIT (A) ASSESSEE GAVE DETAILED SUBMISSIONS WHICH HAVE BEEN DEALT AND INCORPORATED B Y THE LD. CIT (A) FROM PAGES 12 TO 15 OF THE APPELLATE ORDER WH ICH BY AND LARGE ON THE SAME LINES AS GIVEN BEFORE THE LD. CIT (A) IN THE APPEAL FOR ASSESSMENT YEAR 2007-08 WHICH HAS BEEN D EALT BY US IN THE AFORESAID APPEAL FOR ASSESSMENT YEAR 2007-08. THE LD. CIT (A) DELETED THE ADDITION ON THE GROUND THAT THE AMOUNT OF RS.4 13 83 468/- COULD NOT HAVE BEEN ADDED IN THIS Y EAR AND FOR THE BALANCE AMOUNT HE GAVE SAME REASONING AS GIVEN IN APPEAL FOR ASSESSMENT YEAR 2007-08. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 15 21. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS THE MATERIAL REFERRED TO BEFORE US AT THE TIME OF HEARING. AS APPARENT FROM THE RECORDS OUT OF AGGREGATE ADDITION OF RS.9 15 99 354/- MADE BY THE AO ON ACCOUNT OF DIFFERENCE IN VALUE OF S TOCK AS PER BOOKS OF ACCOUNT AND AS PER STOCK STATEMENT SUBMITTED TO THE BANK AN AMOUNT OF RS.4 13 83 468/- WAS THE DIFFERENC E IN THE CLOSING STOCK AS ON 31/3/2008 OSTENSIBLY SAME COULD NOT HAVE BEEN ADDED IN ASSESSMENT YEAR 2009-10 BECAUSE IT PER TAINS TO ASSESSMENT YEAR 2008-09. THE FINDINGS OF THE LD. CIT( A) THAT SUCH ADDITION ON ACCOUNT OF DIFFERENCE IN VALUE OF STOCK AS ON 31/3/2008 CANNOT BE ADDED IN THE IMPUGNED ASSESSMENT YEAR IS THUS AFFIRMED. 22. SO FAR AS THE DIFFERENCE IN VALUE OF STOCK AS ON 31/10/2008 AND 30/9/2008 THE DIFFERENCE IN THE VALU E OF STOCK IS NOT ON ACCOUNT OF ANY QUANTITATIVE DIFFERENCE OR ITEM -WISE DIFFERENCE ALBEIT THIS WAS THE AMOUNT ADVANCED TO THE SUPPLIERS AND AMOUNT ON ACCOUNT OF FREIGHT EXPENSES. IN THE BOOK S OF ACCOUNT ASSESSEE HAS MADE SEPARATE ENTRY WHEREAS BEF ORE THE BANK ASSESSEE HAS INCLUDED AS PART OF STOCK-IN-HAND THE DETAILS OF WHICH ARE AS UNDER:- PARTICULARS AS ON 30.09.2008 AS ON 31.10.2008 (A) ADVANCES TO SUPPLIERS 2 45 41 095 2 21 46 627 (B) AMOUNT OF FREIGHT EXPENSES 15 79 369 19 48 795 I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 16 23. THIS RECONCILIATION WAS GIVEN TO THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO DURING THE COURSE OF REMAND PROCEEDINGS BY THE LD. CIT (A). THE LD. CIT (A) HAS CATEGORICALLY OBSERVED THAT THE ASSESSING OFFICER C OULD NOT POINT OUT ANY DISCREPANCY IN RESPECT OF STOCK AS ON 30/ 9/2008 VIDE HIS REMAND REPORT DATED 11/2/2013. HOWEVER IN R ESPECT OF ADVANCES MADE TO THE PARTIES AS ON 31/10/2008 THE ASSE SSING OFFICER ON ENQUIRY IN THE REMAND PROCEEDINGS POINTED OUT THE FOLLOWING DISCREPANCIES:- S. NO. PARTICULARS AM OUNT REMARKS 1 . JALPA MACHINERY (P) LTD. 13 50 000 PARTY DOES NOT EXISTS AT A- 41 MAYAPURI PHASE- 1 NEW DELHI 2. SADASHIV MARKETING (P) LTD. 45 15 000 PARTY NOT AVAILABLE 3. PUNITA BHARADWAJ 5 00 000 PARTY WERE AVAILABLE BUT DID NOT FILE THE CONFIRMATION 4. NORTH SOUTH ENTERPRISE (P) LTD. 14 50 000 PARTY WERE AVAILABLE BUT DID NOT FILE THE/ CONFIRMATION WHEN THIS DISCREPANCY WAS CONFRONTED TO THE A SSESSEE ASSESSEE GAVE THE FOLLOWING DOCUMENTS TO PROVE THE GENUINENESS:- S. NO. PARTICULARS R EMARKS 1. JALPA MACHINERY (P) LTD. STATED THAT CORRECT ADDRESS IN A-47 MAYAPURI AND NOT A-41 MAYAPURI FILED THE CONFIRMED COPY OF ACCOUNTS WITH PAN DETAILS AND PHOTOCOPY OF RETURN OF INCOME. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 17 2. SADASHIV MARKETING (P) LTD. FILED THE CONFIRMED COPY OF ACCOUNT WITH PAN DETAILS AND PHOTOCOPY OF RETURN OF INCOME. 3. PUNITA BHARADWAJ FILED THE CONFIRMED COPY OF ACCOUNT WITH PAN DETAILS AND PHOTOCOPY OF RETURN OF INCOME. 4. NORTH SOUTH ENTERPRISE (P) LTD. FILED THE CONFIRMED COPY OF ACCOUNT WITH PAN DETAILS. 24. AGAIN WHEN COMMENT WAS SOUGHT FROM THE ASSESSING OFFICER BY THE LD. CIT (A) POST ASSESSEES FILING OF DOCUMENTS THE ASSESSING OFFICER SAID THAT EITHER PARTY WAS NOT AVAILA BLE AT THE ADDRESS OR HAVE REFUSED TO HAVE ANY DEALING WITH THE ASSESSEE. THE LD. CIT (A) HELD THAT THE PERSON ( PUNITA BHARADWAJ) ABOUT WHOM ASSESSING OFFICER HAD SAID THAT SHE REFUSED TO HA VE ANY DEALING HAD GIVEN HER CONFIRMATION LETTER THAT SHE HAD DEALT WITH THE COMPANY AND THE LD. CIT (A) ASKED THE ASSESSING OF FICER TO SEND ENQUIRY FOLDER CONTAINING THE STATEMENT OF PUNITA B HARDWAJ ABOUT WHOM ASSESSING OFFICER HAS STATED THAT SHE HAS REF USED. EVEN FOR THE OTHER TWO PARTIES ALSO FOR WHOM AO HAS SA ID THEIR ADDRESSES NOT AVAILABLE HE ASKED FOR ASSESSING OFFI CERS ENQUIRY REPORT BUT TILL PASSING OF THE ORDER BY THE LD. CIT (A) ENQUIRY FOLDER WAS NOT MADE AVAILABLE TO HIM BY THE ASSESSING OFFICER. 25. THE LD. SR. D.R. BEFORE US SUBMITTED THAT THE LD. CIT ( A) SHOULD HAVE GIVEN MORE OPPORTUNITY TO THE ASSESSING OF FICER TO PRODUCE THE ENQUIRY FOLDER AND THEREFORE THE MATTER SHOULD BE RESTORED BACK FOR EXAMINING THIS ISSUE. 26. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAD STRONGLY OPPOSED FOR SETTING ASIDE THE ISSUE ON THE GROU ND THAT I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 18 ALL THE BASIS TO PROVE THAT ADVANCES GIVEN TO THE SUPPLIE RS WERE THROUGH ACCOUNT PAYEE CHEQUES WHICH WERE DULY REFLECTE D IN THE BOOKS OF ACCOUNT WHICH HAS ALSO BEEN CONFIRMED BY TH EM. THE ASSESSEE ALSO GIVEN CORRECT ADDRESS AS APPEARING IN THE RETURN OF INCOME OF THE RESPECTIVE PARTIES FILED FOR VARIOUS ASS ESSMENT YEARS. THUS THE MATTER SHOULD BE DECIDED HERE ON MERI TS. 27. ON CONSIDERATION OF ENTIRE FACTUM AND MATERIAL DISCUSSED IN THE IMPUGNED ORDER WE FIND THAT SO FAR A S THE AMOUNT OF ADVANCE GIVEN TO THE SUPPLIERS APPEARING IN THE BOOKS AS ON 30/9/2008 THERE SEEMS TO BE NO DISCREPANCY POI NTED OUT BY THE ASSESSING OFFICER IN RESPECT OF STOCK AS ON 3 0/9/2008 IN THE REMAND PROCEEDINGS. THUS THE AMOUNT OF RS.2 61 20 464/- WHICH HAS BEEN ADDED BY THE ASSESSING OFFICER ON ACC OUNT OF DIFFERENCE IN STOCK HAS RIGHTLY BEEN DELETED BY THE L D. CIT(A) WHICH WE CONFIRM. 28. NOW SO FAR AS THE DIFFERENCE IN STOCK ON ACCOUNT OF ADVANCES GIVEN TO FOUR PARTIES AS APPEARING IN THE BOO KS OF ACCOUNT AS ON 31/10/2008 WE FIND THAT IN THE CASE OF THREE PARTIES ASSESSEE HAS FILED CONFIRMATION COPY OF ACC OUNT WITH THEIR PAN DETAILS AND PHOTOCOPY OF RETURN OF INCOME. A LL THE AMOUNTS IN QUESTION HAS BEEN PAID THROUGH ACCOUNT PAYE E CHEQUES WHICH HAS DULY BEEN REFLECTED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. ASSESSING OFFICERS CASE FO R MAKING ADDITION WAS THAT THERE IS A DIFFERENCE OF VALUE OF CL OSING STOCK APPEARING IN THE BOOKS AND AS DISCLOSED TO THE BANK. WHEN ASSESSEE SUBMITTED THAT THIS AMOUNT OF RS.2 40 95 422/- WAS ON ACCOUNT OF ADVANCES GIVEN TO THE SUPPLIERS HE THEN WAN TED TO VERIFY THE TRANSACTION FROM THESE PARTIES WHETHER THE ADV ANCES I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 19 GIVEN AND APPEARING IN THE BOOKS OF ACCOUNT ARE FIC TITIOUS WAS NEVER SUBJECT MATTER OF DOUBT BY THE ASSESSING OFFICER AT THE ASSESSMENT STAGE. BE IT AS THAT MAY BE WE FIND THAT THE LD . CIT (A) HAS DULY ACKNOWLEDGED THE EVIDENCES FILED BY THE ASSESSEE IN SUPPORT OF THE ADVANCES GIVEN TO THE SUPPLIERS AND WH ATEVER ADVERSE COMMENT WHICH HAS BEEN GIVEN BY THE ASSESSING OFFICER THAT EITHER PARTY IS NOT AVAILABLE AT THE ADDRESS OR ONE PERSON HAS STATED THAT HE HAS NOT DONE ANY DEALING WITH THE ASSESSE E THE LD. CIT(A) HAS DULY CONSIDERED THE ENTIRE FACTS AND MA TERIAL ON RECORD WHILE GIVING HIS FINDING AND ALSO NOTED THAT F ACTUM OF REPORT AND ENQUIRY FILE WAS NOT SUBMITTED BY THE AO BEFO RE THE LD. CIT(A) DESPITE HIS REQUISITION. 29. SO FAR AS IN THE CASE OF PUNITA BHARDWAJ WHERE SHE HA S REFUSED HAVING ANY DEALING WITH THE ASSESSEE WE FE EL THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESS ING OFFICER TO CONFRONT TO THE ASSESSEE AS TO WHAT WAS HER STATEMENT GIVEN IN THE ENQUIRY WHEN SHE HERSELF HAS GIVEN CONFIRMATION L ETTER THAT SHE HAS DEALT WITH THE ASSESSEE AND HAS RECEIVED AMOUN T THROUGH ACCOUNT PAYEE CHEQUES. ONLY FOR THIS LIMITED P URPOSE THE MATTER IS REMANDED BACK TO THE ASSESSING OFFICER WI TH REGARD TO THE ADVANCES GIVEN TO PUNITA BHARDWAJ. 30. SO FAR AS ADVANCES GIVEN TO OTHER THREE PARTIES WE DO NOT FIND ANY REASON TO TINKER WITH THE FINDING OF THE LD. CIT(A) FOR THE REASON THAT ASSESSEE HAS NOT ONLY FILED CONFIRMATIO N COPY OF ACCOUNT BUT ALSO THEIR RETURNS OF INCOME AND GIVEN COR RECT ADDRESSES SHOWN BY THESE PARTIES IN THEIR RETURNS OF I NCOME WHICH WAS MADE AVAILABLE TO THE ASSESSING OFFICER. TH ERE IS NO ADVERSE MATERIAL ON RECORD TO REBUT THESE EVIDENCES. W HEN THE I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 20 PARTIES HAVE CONFIRMED THAT THE AMOUNT HAS BEEN GIVEN THROUGH ACCOUNT PAYEE CHEQUES IT CANNOT BE HELD THAT ADVANCES GIVEN TO THE SUPPLIERS ARE NON-GENUINE. THUS FOR THESE THREE P ARTIES THE FINDING OF THE LD. CIT (A) IS CONFIRMED AND NO INTER FERENCE IS CALLED FOR. ACCORDINGLY GROUND NO.1 AS RAISED BY THE REVE NUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 31. LASTLY THE REVENUE HAS CHALLENGED THE ADDITION OF RS.1 26 49 000/- ON ACCOUNT OF UNACCOUNTED ADVANCE GI VEN TO A- ONE MACHINE COMPONENTS (P.) LTD. THE ASSESSING OFFICE R ON THIS ISSUE HAS NOTED THE FOLLOWING FACTS IN THE ASSESSMENT OR DER:- 8. DURING THE COURSE OF SEARCH AT VARIOUS BUS INESS AND RESIDENTIAL PREMISES OF FIVE SUB-GROUPS RELATING TO THE NIMITAYA GROUP INCRIMINATING DOCUMENTS/DATA STORED IN CPUS LAPTOPS AND SERVERS PERTAINING TO OTHER CONCERNS WERE FOUND AND SEIZED. DURING THE COURSE OF POST SEARCH PROCEEDING S AND AFTER EXAMINING DOCUMENTS FOUND AND SEIZED DATA STORED I N CPUS LAPTOPS AND SERVERS FOUND AND SEIZED/IMPOUNDED AND DOCUMENTS FILED BY THE ASSESSEE DOCUMENTS/INFORMAT ION COLLECTED FROM BANKS DATA TAKEN FROM INTERNET FROM THE INTERNET SITE OF ROC PAN DATA QUERY IT HAS BEEN NOTICED TH AT FOLLOWING CONCERNS ARE RUNNING THEIR BUSINESS ACTIVITIES FROM THE SAME BUSINESS PREMISES OF RESPECTIVE SUB-GROUP AND ARE A LSO MANAGED AND CONTROLLED BY ME SAME PERSONS WHO HAVE SUBSTANTIAL INTEREST IN THE SUB-GROUP. I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 21 I. A-ONE MACHINED COMPONENTS PVT. LTD. II. A-1 MAYAPURI INDL AREA PHASE I NEW DELHI 27.12.04 AAFCA0530P WARD 19( ) NEW DELHI MACHINE REPAIRS AND COOLER PARTS NOT COVERED M/S ASHWANI KUMAR & CO PVT. LTD IS DOING THE BUSINE SS OF SICK UNITS PLANT AND MACHINERY AND OLD JUNK MACHINES ET C. ALTHOUGH THE ASSESSEE CLAIMS IT TO BE A TRADING ACT IVITY BUT THIS REQUIRES VARIOUS TYPES OF PROCESSING REPAIRING AS SEMBLING AND DISMANTLING OF MACHINES WHICH MAKES IT SUITABLE TO FETCH HIGHER PRICE IN MARKET. IN FACT SUCH ACTIVITY CANNOT BE T ERMED AS TRADING. BUT TO BYPASS THE CUSTOM DUTY AND EXCISE DUTY LEVIED ON SUCH ITEMS HE IS SHOWING SUCH EXPENSES O N PROCESSING IN THE NAMES OF OTHER BUSINESS CONCERNS WHICH ARE ALSO RUN BY HIM BUT THERE ARE OTHER PERSONS/EMPLOYE ES OF SHRI ASHWANI KUMAR WHO ARE SHOWN AS THE SHAREHOLDERS ETC . OF THESE CONCERNS. THE AUTHORIZED OFFICER AT PARTY D-1 HAS INFORMED AS PER HIS SURVEY REPORT THAT SHRI ASHWANI KUMAR MAHAJAN IS ALSO PROPRIETOR OF GURULAL ENTERPRISES A ND E RECTORS IN THE FOLLOWING COMPANIES: 1. SADASHIV MARKETING PVT. LTD. 2. NORTH SOUTH ENTERPRISES PVT. LTD. THE OTHER DIRECTORS OF THE ABOVE TWO COMPANIES ARE ALSO DIRECTOR IN A ONE MACHINERY COMPONENTS PVT. LTD WAS ALSO FUNCTIONING FROM THE PORTION OF THE PREMISES WITH T HE SAME I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 22 MAIN ENTRANCE. SHRI PRADEEP NAGDEV AND SHRI GOPAL N AGDEV ARE THE DIRECTORS OF THE COMPANY RESIDING AT A-3/50 JANAK PURI NEW DELHI. SHRI PRADEEP AND SHRI GOPAL NAGDEV ARE ALSO DIRECTOR OF NORTH SOUTH ENTERPRISES PVT. LTD ALONG WITH SHRI ASHWANI KUMAR MAHAJAN. BOTH THE COMPANIES I.E. A ONE MACHINED COMPONENTS PVT. LTD AND M/S NORTH SOUTH ENTERPRISES PVT. LTD ARE HAVING SIMILAR NATURE OF B USINESS. THE SEIZED DOCUMENTS SHOW CREDIT BALANCE OF RS.1 26.49 249.80 STANDING IN THE NAME OF A-ONE MAC HINED COMPONENTS PVT. LTD AS ON 31-10-2008 THE ASSESSEE WAS ASKED AS TO WHY THIS AMOUNT OF RS.1 26 49 249 80 BE NOT ADDED TO THE TOTAL INCOME. 32. ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE S UBMITTED THAT THE AMOUNT STANDING IN THE NAME OF A-ONE MACHINE COMPON ENTS (P.) LTD. AS ON 31/10/2008 WERE DULY REFLECTED IN TH E BOOKS OF ACCOUNT AND COPY OF LEDGER ACCOUNT WAS ALSO FILED. T HE ASSESSING OFFICER REJECTED ASSESSEES CONTENTION ON THE GROUND T HAT ASSESSEE HAD NOT FURNISHED ANY CONFIRMATION OF COPY OF BANK ACCOUNT AND BALANCE SHEET TO PROVE THE ENTRY APPEARING IN ITS BOOKS OF ACCOUNT. 33. BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THAT N ECESSARY DOCUMENTS AND CONFIRMATION WERE SUBMITTED DURING THE CO URSE OF ASSESSMENT PROCEEDINGS BUT THE ASSESSING OFFICER HAS COMPLETELY IGNORED THE SAME. COPY OF SAID CONFIRMATIO N OF RS.1 26 49 249/- FROM A-ONE MACHINE COMPONENTS (P.) LTD. WAS DULY FILED ALONG WITH BOOKS OF ACCOUNT AND FINANCIA L STATEMENT OF THE ASSESSEE FOR RELEVANT PERIOD. THE LD. CIT (A) O N PERUSAL OF I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 23 THE ENTIRE MATERIAL PLACED ON RECORD HELD THAT ASSESSE E HAD FILED CONFIRMATION AND COPY OF ACCOUNT OF THE SAID COMPANY AND MAINLY BECAUSE OF NON-FURNISHING OF BANK ACCOUNT THE ASSESSING OFFICER CANNOT HOLD THAT ASSESSEE HAS FAILED TO ESTABLIS H THE GENUINENESS OF THE TRANSACTION. HOWEVER DURING THE C OURSE OF APPELLATE PROCEEDINGS ASSESSEE DID FILED BANK STATEM ENT LEDGER ACCOUNT VOUCHERS RECONCILIATION STATEMENT DETAILS O F DEALINGS BETWEEN ASSESSEE AS WELL AS THE SAID COMPANY ETC. HO WEVER THE ASSESSING OFFICER HAD OBJECTED FOR ADMISSION OF SUC H ADDITIONAL EVIDENCE IN HIS REMAND REPORT. THE LD. CIT (A) HELD THAT EVIDENCE WHICH HAS BEEN FILED BY THE ASSESSEE ARE MERELY SUP PORTIVE DOCUMENTS AND OTHERWISE THE TRANSACTION ITSELF IS PROVE D FROM OTHER EVIDENCES FILED BY THE ASSESSEE BEFORE THE ASSES SING OFFICER AS WELL AS BEFORE HIM. ON PERUSAL OF THE COPY OF ACC OUNT THE LD. CIT (A) NOTED THAT IN BOTH SALE/PURCHASE AND DEALINGS WITH THE SAID COMPANY ARE DULY REFLECTED AND IT IS A COMPLETE GENUINE TRANSACTION AND THEREFORE HE DELETED THE SAID ADDITION . 34. AFTER HEARING BOTH THE PARTIES WE FIND THAT SUCH A FINDING OF THE LD. CIT(A) IS BASED ON CORRECT APPRECIATION OF FACTS BECAUSE NOT ONLY THIS TRANSACTION IS REFLECTED IN THE COPY OF AC COUNT BUT IS ALSO CONFIRMED BY THE CONFIRMATION LETTER FILED BY THE SAID COMPANY ALONG WITH COPY OF BANK STATEMENT. THE ENTIRE TRANSACTION STANDS VERIFIED BASED ON VARIOUS EVIDENCES AS DISCUSSED BY LD. CIT (A) AND THEREFORE THERE IS NO REASON TO TREAT THE SAID AMOUNT AS UNEXPLAINED CREDIT. THUS THE AD DITION DELETED BY THE LD. CIT (A) IS UPHELD. 35. NOW WE WILL DEAL WITH ASSESSEES APPEAL WHE REIN ASSESSEE HAS CHALLENGED THE ADDITION OF RS.62 LAKHS ON ACCOUN T OF I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 24 UNDISCLOSED INVESTMENT IN THE PROPERTY ON THE ALLEGED P AYMENT OF CASH. 36. DURING THE COURSE OF SEARCH A DOCUMENT WAS F OUND MARKED AS PAGE 6 OF ANNEXURE A1 AND ALSO CERTAIN PAG ES OF ANNEXURE A2 SHOWING THAT ASSESSEE HAD PURCHASED A LAN D MEASURING 6 KANAL 16 MARLAS AT VILLAGE JAKHODA HARY ANA. THIS LAND WAS REGISTERED FOR A SALE CONSIDERATION OF RS.21 .25 LAKHS AND RS.1 64 300/- WAS PAID TOWARDS STAMP DUTY. HOWEV ER AS PER RECORD A FIGURE OF 62 WAS MENTIONED WHICH WAS TREATED AS RS. 62 LAKHS BY THE DEPARTMENT AND IT WAS CONCLUDED THA T THIS WAS THE AMOUNT WHICH MIGHT HAVE BEEN PAID IN CASH OU TSIDE THE BOOKS OF ACCOUNT. IN THE ABSENCE OF ANY PROPER EXPLAN ATION AND DOCUMENTARY EVIDENCE THE ASSESSING OFFICER TREATED TH E ENTIRE CASH AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. WHIL E MAKING THIS ADDITION HE HELD THAT THIS ADDITION WOULD BE MADE IN THE HANDS OF THE COMPANY ON SUBSTANTIVE BASIS AND ON PROTE CTIVE BASIS IN THE CASE OF THE DIRECTOR SHRI. ASHWANI KUMAR MAHAJAN. THE LD. CIT(A) HAS CONFIRMED THE SAID ADDITION ON THE GROUND THAT ASSESSEE COULD NOT REBUT THE DOCUMENT FOUND FROM HIS P LACE AND PRESUMPTION IS DRAWN IN TERMS OF SECTION 132(4A) READ WITH SECTION 292C AND THEREFORE ADDITION HAS RIGHTLY BEEN MADE BY THE ASSESSING OFFICER. WHILE COMING TO HIS CONCLUSIO N HE RELIED UPON CATENA OF DECISIONS AND WHICH HAVE BEEN DEALT AN D INCORPORATED IN THE IMPUGNED APPELLATE ORDER. THE REL EVANT FINDINGS OF THE LD. CIT (A) WHILE CONFIRMING THE SAI D ADDITION IS AS UNDER:- 5.11. IT IS THUS HELD THAT MERE GENERAL AND VAGUE CONTENTION OF THE APPELLANT THAT THE SEIZED DOCUMEN TS ARE I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 25 LOOSE PAPERS AND THE SAME ARE NOT IN HIS HANDWRITIN G CANNOT BE A BASIS TO NEGATE THE ADDITION MADE IN THE ORDER OF ASSESSMENT. 5.12. THE PAGE 6 OF ANNEXURE A-L IS SEIZED FROM T HE APPELLANT'S PREMISES AND THE NOTINGS THEREIN CLEARL Y SPELLS IN NO UNCERTAIN TERMS THAT LAND IS PURCHASED AND PART COMPONENT IS PAID BY CHEQUE AND PART IN CASH AND S IMPLY STATING THAT THE SAME IS NOT IN APPELLANT'S HANDWR ITING I AM AFRAID DOES NOT COME TO APPELLANT'S RESCUE TO REB UT THE ONUS CAST UPON BY THE PROVISIONS OF SECTION 132(4A) AND SECTION 292C. NO EXPLANATION HAS BEEN GIVEN BY THE APPELLAN T AS TO HOW THE UNDER WHAT CIRCUMSTANCES THE SAID PAPER IS FOUND FROM HIS PREMISES AND HOW THE ENTRIES ON THE SAID S EIZED DOCUMENT DOES NOT RELATES TO HIM. 5.13. THUS TAKING IN TOTALITY OF ALL THE FACTS AND CIRCUMSTANCES AND EVIDENCES ON RECORD AND ENTRIES / NOTINGS ON THE SEIZED DOCUMENTS I HOLD THAT RS.62 00 000 H AVE BEEN PAID BY THE APPELLANT FROM ITS UNDISCLOSED SOURCES IN CASH FOR THE PURCHASE OF PROPERTY. ACCORDINGLY ADDITION MADE BY THE AO IS UPHELD. 37. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WAS GIVEN NO OPPORTUNITY BY THE ASSESSING OFFICER AN D THESE QUERIES WERE RAISED AT THE FAG-END OF THE ASSESSMENT PR OCEEDINGS WHICH IS EVIDENT FROM THE COPY OF THE ORDER SHEET ENTRIE S WHICH HAS BEEN FILED BEFORE US. MOREOVER ASSESSEE HAD RE BUTTED THIS DOCUMENT ON THE GROUND THAT IT IS NOT IN HIS HANDWRITING AND NOTING IF AT ALL BELONGS TO THE BROKER FROM WHOM ASSE SSING OFFICER SHOULD HAVE ENQUIRED AND ASSESSEE HAS CATEGORICALLY SUBMITTED I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 26 THAT THIS DOCUMENT DOES NOT BELONG TO HIM OR IS NOT IN HI S HANDWRITING. THUS HE PRAYED THAT THE MATTER CAN BE RESTO RED BACK TO THE FILE OF THE ASSESSING OFFICER SO THAT PROPE R ENQUIRY CAN BE MADE BEFORE MAKING ADDITION AS THE SAME HAS NO T BEEN DONE BY THE ASSESSING OFFICER. 38. ON THE OTHER HAND THE LD. SR. D.R. STRONGLY REL IED UPON THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT (A) A ND SUBMITTED THAT THE ONUS WHICH WAS CAST UPON THE ASSESSEE HAS NO T BEEN DISCHARGED AND THEREFORE THE TRANSACTION MENTIONED IN THE SAID DOCUMENT IS TO BE ADDED IN THE HANDS OF THE ASSESSEE ON LY. 39. AFTER HEARING BOTH THE PARTIES AND ON A PERUSAL OF THE IMPUGNED ORDER WE FIND THAT A DOCUMENT WAS SEIZED FRO M THE PREMISES OF THE ASSESSEE WHICH MENTIONED SALE TRANSACTI ON OF LAND WHICH REFLECTED THAT PROPERTY WAS REGISTERED FOR A CONSIDERATION OF RS.21.25 LAKHS AND OTHER EXPENSES L IKE STAMP DUTY OF RS.1 64 300/-. IN THE SAID SEIZED DOCUMENT THERE IS A FIGURE OF 62 WHICH HAS BEEN READ AS RS.62 LAKHS W HICH HAS BEEN PRESUMED TO BE MADE IN CASH. WE AT THE OUTSET AGREE THAT THE PRESUMPTION IS RAISED AGAINST THE ASSESSEE IN TERM S OF SECTION 132(4A) AND 292C THAT DOCUMENTS BELONGS TO THE ASSESSEE AND ONUS IS UPON THE ASSESSEE TO REBUT SUCH PRESUMPTION HOWEVER SUCH A PRESUMPTION IS A REBUTTAL PRESUMPTION WHICH ASSESSEE HAS TO EXPLAIN WITH COGENT E VIDENCE THAT IT BELONGS TO SOMEONE ELSE BUT HERE ASSESSEE HAS ONLY DENIED THE TRANSACTION WITHOUT REBUTTING IT BY WAY OF PROP ER EVIDENCE. HOWEVER IN THE INTEREST OF JUSTICE WE ARE OF THE OPINION THAT SINCE NO PROPER OPPORTUNITY WAS GIVEN BY THE AS SESSING OFFICER THEREFORE THE MATTER SHOULD BE REMANDED BACK TO THE FILE I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 27 OF THE ASSESSING OFFICER TO EXAMINE THIS ISSUE AFRESH AND ASSESSEE WOULD BE AT LIBERTY TO REBUT THIS PRESUMPTION BY PROVING THAT THE TRANSACTION RECORDED THEREIN; SPECIALLY ELEMENT OF CASH DOES NOT BELONG TO HIM OR EXPENSES HAS NOT BEEN INCURRED BY HI M TOWARDS PURCHASE OF THE SAID PLOT. THE ASSESSING OFFICER SHAL L DECIDE THIS ISSUE AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE A ND IF REQUIRED ASSESSEE MAY PRODUCE THE BROKER TO SUBSTANTIATE HIS POIN T. ACCORDINGLY THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH AND IN ACCORDANCE TO LAW . ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 40. IN THE RESULT APPEALS OF THE REVENUE FOR ASSE SSMENT YEAR 2007-08 IS DISMISSED; AND FOR THE ASSESSMENT YEAR 200 9-10 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES; WHEREAS THE A PPEALS OF THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 AND 2009-10 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2017. [O. P. KANT] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:30 TH NOVEMBER 2017 JJ:15-1611 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR I.T.A. NO.3287 3557 4895 & 3558/DEL/2013 28 ASSISTANT REGISTRAR DATE 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.