M/s Water Flow (India) Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 4775/DEL/2010 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 477520114 RSA 2010
Assessee PAN AGUPA1761E
Bench Delhi
Appeal Number ITA 4775/DEL/2010
Duration Of Justice 8 month(s) 21 day(s)
Appellant M/s Water Flow (India) Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 22-07-2011
Date Of Final Hearing 29-06-2011
Next Hearing Date 29-06-2011
Assessment Year 2006-2007
Appeal Filed On 01-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: I NEW DELHI BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.K. HALDAR ACCOUNTANT MEMBER ITA NO: 4775/DEL/2010 A.Y. : 2006-2007 WATER FLOW INDIA P.LTD. VS. ITO WARD 18(2) A-59 KIRTI NAGAR NEW DELHI NEW DELHI ITA NO: 5450/DEL/2010 A.Y. : 2006-2007 ITO WARD 18(2) VS. WATER FLOW INDIA P.LTD. NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. DEEPAK GULATI C.A. RESPONDENT BY : SH. B.KISHORE SR. D.R. O R D E R PER DIVA SINGH JUDICIAL MEMBER THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE DEPARTMENT AGAINST THE ORDER DT. 14.9.2010 OF CIT(A)-XXI NEW DELHI PERTAINING TO A.Y. 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS B EFORE THE TRIBUNAL. 1. THAT THE ORDER OF LD.AO IS BAD IN LAW AND ON FA CTS AND CIRCUMSTANCES OF THE CASE. 2. (A) THAT THE ADDITION OF RS. 19 85 000/- BEING T HE CASH DEPOSITED IN BACK ACCOUNT OF APPELLANT IS NOT AS PER LAW AND FACTS AND CIRCUMSTANCES OF THE CASE AS THE SAME HAS BEEN ADD ED AS UNEXPLAINED CASH CREDITS WITHOUT PROVIDING THE SEC TION UNDER WHICH THE SAME HAS BEEN ADDED AND HENCE THE SAME IS NOT B ASED ON LAW OF INCOME TAX AND IS ONLY ON FLIMSY GROUNDS. ITA 4775/DEL/10 & PAGE 2 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI (B) THAT THE APPELLANT IS A PRIVATE LIMITED COMPANY AND THE ACCOUNTS OF WHICH ARE DULY AUDITED BY INDEPENDENT CHARTERED ACCOUNTANT WHO CERTIFIES THEM BEING TRUE AND FAIR. FURTHER N O DISCREPANCY HAS BEEN OBSERVED IN THE DETAILS SUBMITTED BEFORE THE L D.A.O. (C )THAT THE APPELLANT HAS FULL DETAILS OF SOURCE O F THESE CASH CREDITS WHICH ARE DULY RECORDED IN THE BOOKS WHICH WERE DEP OSITED AFTER WITHDRAWING SAME FROM OTHER BANK ACCOUNT AND ALSO C ASH WAS AVAILABLE IN THE CASH BOOK OF THE APPELLANT THE FA CTS WHICH HAS NOT BEEN DENIED BY LD.AO AS WELL AS HONBLE CIT(A). (D) THAT THE CONFIRMATION OF ADDITION BY HONBLE CI T(A) IS NOT BASED ON FACTS AND CIRCUMSTANCES OF THE CASE AS FULL DETA ILS WERE PROVIDED AT THE TIME OF APPEAL PROCEEDING AND HONBLE CIT(A) FAILED TO APPRECIATE THE SAME. THE APPELLANT PRAYS FOR LEAVE TO ADD ALTER MODIFY AND WITHDRAW ANY OF THE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING. 3. THE DEPARTMENT IN THIS APPEAL HAS RAISED THE FO LLOWING GROUNDS BEFORE THE TRIBUNAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 42 13 779/- M ADE ON ACCOUNT OF UNCONFIRMED CREDITORS BY NOT DECIDING ON MERITS THE CONCLUSIVE EVIDENCE BROUGHT ON RECORD BY THE AO TO SHOW THAT T HE SAID CREDITORS WERE NOT GENUINE AND BY IGNORING THAT : (I) NOTICE U/S 133(6) SENT TO THE SUNDRY CREDITORS WERE RECEIVED BACK UNSERVED WITH THE REMARKS NO SUCH COMPANY/REFUSED ETC. (II) CONFIRMATIONS AND OTHER DETAILS OF THE SUNDRY CREDI TORS WAS EVIDENTLY NOT FILED BY THE ASSESSEE DURING THE ASSE SSMENT PROCEEDINGS TO AVOID NECESSARY CROSS EXAMINATION AN D ENQUIRES TO VERIFY THE GENUINENESS AND CREDIT WORTHINESS OF THE CREDITORS. (III) IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE DETA ILS AND CONFIRMATIONS AS FILED DURING THE APPELLATE PROCEED INGS CANNOT BE ACCEPTED ONLY AT THE FACE VALUE WITHOUT ANY ENQUIRY REGARDING THE GENUINENESS AND THE CREDITWORTHINESS OF THE CRE DITORS. (IV) THE BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS WERE NOT PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS DES PITE SPECIFIC AND ADEQUATE OPPORTUNITY. (V) THE CONDITIONS LAID DOWN FOR ADDITIONAL EVIDENCE UN DER RULE 46A ARE NOT SATISFIED IN THE CASE. ITA 4775/DEL/10 & PAGE 3 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI 4. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSMENT IN THE CASE OF THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF M ANUFACTURING OF DEEPWELL HAND PUMPS AND HAND PUMP PARTS ETC. WAS M ADE U/S 144 OF THE ACT. AS AGAINST THE RETURNED INCOME OF RS.6 80 090/- THE A.O. MADE AN ADDITION OF RS. 42 13 779/- ON ACCOUNT OF SUNDR Y CREDITORS AND ANOTHER ADDITION OF RS. 19 85 000/- WAS MADE ON AC COUNT OF CASH DEPOSITED IN THE BANK ACCOUNT. INCOME WAS ASSESSED AT RS. 68 78 869/-. 5. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY T HE ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS WAS DELETED BY THE CIT( A) AGAINST WHICH ACTION THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBU NAL. IN REGARD TO THE ADDITION SUSTAINED ON ACCOUNT OF DEPOSITS IN THE B ANK ACCOUNT THE ASSESSEE IS IN APPEAL BEFORE THIS FORUM. 6. THE RELEVANT FACTS QUA THE ASSESEES APPEAL ARE FOUND DISCUSSED IN PAGE 2 OF THE ASSESSMENT ORDER VIZ. THAT FROM A PE RUSAL OF THE BANK ACCOUNT MAINTAINED WITH OBC THE AO OBSERVED THAT TH E ASSESSEE HAS MADE THE FOLLOWING CASH DEPOSITS IN ITS BANK ACCO UNT ON THE FOLLOWING DATES. DATED CASH DEPOSITS (RS.) 25.11.05 3 00 000/ - 29.11.05 2 00 000/ - 15.12.05 1 75 000/ - 20.12.05 1 25 000/ - 6.2.06 2 60 000/ - 17.2.06 3 25 000/ - 8.3.06 4 00 000/ - 20.3.06 2 00 000/ - ITA 4775/DEL/10 & PAGE 4 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI IN VIEW OF THE FACT THAT AFTER SEEKING FREQUENT ADJ OURNMENTS NO ONE WAS PRESENT BEFORE THE A.O. THE ADDITION WAS MADE HOLD ING THAT THE ASSESSEE HAS FAILED TO PROVIDE ANY EXPLANATION/OR ANY DOCUME NTARY EVIDENCE IN RESPECT OF THE CASH DEPOSITS. IN THE ABSENCE OF AN Y EXPLANATION THE SAID AMOUNT WAS TREATED AS UNEXPLAINED CASH CREDITS AND ADDED TO THE INCOME OF THE ASSESSEE COMPANY. 7. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY T HE ASSESSEE FILED VARIOUS DOCUMENTS IN SUPPORT OF ITS CLAIM WHICH WER E BEEN FORWARDED TO THE AO IN TERMS OF RULE 46A OF THE I.T.RULES AND RE MAND REPORTS WERE OBTAINED ON 20.5.2009 25.9.2009 AND 29.6.2010. TH E SAME WERE CONFRONTED TO THE ASSESSEE TO MAKE HIS SUBMISSIONS . THE CLAIM PUT FORTH BY THE ASSESSEE BEFORE THE CIT(A) ON THE BASI S OF DOCUMENTARY EVIDENCES WAS THAT THESE WERE CASH WITHDRAWALS FROM THE ASSESSEES DISCLOSED BANK ACCOUNTS AND AFTER A FEW DAYS AT TIM ES AND ON SOME OCCASIONS EVEN A FEW HOURS CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. AS SUCH THE SOURCE STOOD EXPLAINED A S THESE WERE CASH WITHDRAWALS FROM THE DISCLOSED BANK ACCOUNTS OF THE ASSESSEE. IN THE CIRCUMSTANCES ADDITION U/S68 WAS NOT WARRANTED. IT IS SEEN THAT THE CIT(A) REPRODUCED THE DETAILS OF CASH DEPOSITED AFT ER WITHDRAWAL FROM BANK ACCOUNTS OF THE ASSESSEE AT PAGE 7 OF THE IMP UGNED ORDER. THE DATES AND AMOUNTS OF WITHDRAWAL AND DEPOSIT ARE NOT IN DISPUTE. HOWEVER CONSIDERING THE REPLY OF THE ASSESSEE AND THE REMAND REPORT OF ITA 4775/DEL/10 & PAGE 5 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI THE A.O THE CIT(A) REJECTED THE CLAIM OF ASSESSEE VIDE PARA 7.2 OBSERVING AS UNDER. 7.2. AFTER CONSIDERING THE AOS REPLY AND ASSESSEE S REJOINDER IT IS FOUND THAT THERE IS FORCE IN THE O BSERVATION OF THE AO AS HE HAS OBSERVED THAT CASH WITHDRAWN ON 5.11.2 005 AND ON 8.11.2005 AMOUNTING TO RS. 5 00 000/- AND RS. 4 00 000/- RESPECTIVELY REMAINED LYING IDLE AT HOME TO BE RE-D EPOSITED IN THE BANK ON 25.11.2005 (RS. 3 00 00/-) 29.11.2006 (RS.2 00 000/-) AND 15.12.2005 (RS. 1 75 000/-). I N THE REPLY THE ASSESSEE HAS FAILED TO EXPLAIN WHY THE AMOUNTS WERE WITHDRAWN FROM ONE BANK ACCOUNT AND SAME WERE REDEP OSITED IN THE OTHER ACCOUNT. THE CHART APPEARING AT PAGE NO.86 OF THE PAPER BOOK CLEARLY ESTABLISHES THIS FACT THAT THERE IS NO FORCE IN THE ARGUMENT OF THE ASSESSEE THAT AS TO WHY ON SAME DATE AMOUNT HAS BEEN WITHDRAWN FROM ONE ACCOUNT AND HAS BEEN DEPOSITED IN OTHER ACCOUNT E.G. AN AMOUNT OF RS.3 5 0 000/- WITHDRAWN FROM ACCOUNT OF HDFC AS ON 17.2.2006 AND DEPOSITED IN OTHER BANK ACCOUNT AMOUNTING TO RS. 3 25 000/- ON THE SAME DATE. IN VIEW OF THE FINDINGS OF THE AO A ND OBSERVING THE CASH IN FLOW/OUT FLOW FROM THE CHART THE REPLY OF THE ASSESSEE APPEARS TO BE AN AFTERTHOUGHT AND IT DESER VES TO BE REJECTED. THEREFORE THE ADDITION AMOUNTING TO RS. 19 85 000/- IS CONFIRMED. 8. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 9. LD.A.R. VEHEMENTLY CONTENDED THAT SINCE THE ASSE SSEE HAS DEMONSTRATED ADEQUATELY BY WAY OF DOCUMENTARY EVIDE NCES THAT THE CASH DEPOSITS IN THE OBC BANK ACCOUNT WERE FROM THE WITH DRAWAL OF DISCLOSED BANK ACCOUNTS OF THE ASSESSEE. AS SUCH THE SOURCE STOOD EXPLAINED. ELABORATING FURTHER IT WAS HIS SUBMISSION ON THE BA SIS OF PAGE 165 OF THE PAPER BOOK STATING THAT THE ASSESSEE IS A SENIOR CI TIZEN AND WHEN HE REALIZED THAT CERTAIN CHEQUES WERE TO BE PRESENTED IN THE OBC ACCOUNT HE HAS WITHDRAWN ADEQUATE AMOUNT FROM HIS OTHER BAN K ACCOUNT AND DEPOSITED IT IN THE OBC. IT WAS HIS SUBMISSION REF ERRING TO PAGE 7 OF ITS ITA 4775/DEL/10 & PAGE 6 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI IMPUGNED ORDER THAT AT TIMES HE HAS WITHDRAWN AND KEPT MONEY LYING WITH HIM TO BE DEPOSITED IN THE BANK ACCOUNT AS AND WHEN CHEQUE WAS TO BE PRESENTED. IT WAS HIS SUBMISSION THAT THESE WERE THE TIMES WHEN RTGS FACILITIES WERE NOT AVAILABLE FOR INSTANT TRAN SFER OF FUNDS FROM ONE BANK TO THE OTHER AND THIS WAS THE QUICKEST METHO D BY VIRTUE OF WHICH THE ASSESSEE WHO WAS A SENIOR CITIZEN CONSIDERED IT SAFEST AND QUICK CONCEIVED THAT THE CHEQUES ON BEING PRESENTED WOUL D BE HONOURED BY THE BANK. IN THE CIRCUMSTANCES DOUBTS ENTERTAINE D BY THE DEPARTMENT AS TO WHY HE HAS ACTED IN SUCH A MANNER ARE NOT JUS TIFIED SINCE THE SOURCE STOOD EXPLAINED. IT WAS FURTHER ARGUED BY H IM THAT THE IDIOSYNCRASIES OF A SENIOR CITIZEN WHO FUNCTIONS AC CORDING TO HIS UNDERSTANDING CANNOT BE DOUBTED PER SE IN THE FA CE OF THE EXPLANATION OFFERED. 10. LD.D.R. ON THE OTHER HAND HEAVILY RELYING UPON THE FINDING OF THE CIT(A) AND THE OBSERVATION OF THE AO IN THE REMAND REPORT WHICH HAS BEEN REPRODUCED IN THE IMPUGNED ORDER AT PAGE 8 CON TENDED THAT THE A.O. WAS JUSTIFIED IN HOLDING THAT NO PRUDENT BUSIN ESS MAN WOULD LIKE TO KEEP HIS CASH IDLE AT HOME. OUR ATTENTION WAS INVI TED TO PAGE 26 OF THE PAPER BOOK WHICH CONTAINS HIS SPECIFIC REPLY WHICH IS REPRODUCED HEREUNDER FOR A READY REFERENCE. THE AO HAS MADE THE ABOVE ADDITION AS UNEXPLAINED CASH CREDIT U/S 68 AS NEITHER EXPLANATION WAS OFFERED NOR DOCUM ENTARY EVIDENCES WERE FILED BY THE ASSESSEE REGARDING THE SOURCES OF THESE DEPOSITS DURING SCRUTINY. NOW THE ASSESSEE FILED CERTAIN DOCUMENTS IN SUPPORT OF CASH DEPOSITS AND WITHDRAWA LS. ITA 4775/DEL/10 & PAGE 7 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI HOWEVER IT IS DIFFICULT TO UNDERSTAND AS TO HOW CA SH WITHDRAWN ON 5.11.2008 AND 8.11.2008 AMOUNTING TO RS. 5 00 00 0/- AND RS. 4 00 000/- RESPECTIVELY REMAINED LYING IDLE AT HOME TO BE REDEPOSITED IN THE BANK ON 25.12.2008 (RS. 3 00 000 /-) 29.12.2008 (RS. 2 00 000/-) AND 15.12.2008 (RS.1 75 000/-). NO PRUDENT BUSINESSMAN WOULD LIKE TO KEEP ITS CASH IDL E AT HOME. THIS SOWS THAT THOSE CASHES WERE WITHDRAWN FOR MAKI NG CERTAIN PAYMENTS. THEREFORE THE ADDITION MADE BY THE AO O N ACCOUNT OF CASH DEPOSITS DESERVES TO BE UPHELD. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CAREFUL CONSIDERATION OF THE SAME WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES O F THE CASE IT WOULD BE APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE O F THE AO. IT IS SEEN THAT THE ASSESSEE HAS PUT FORTH THE CLAIM THAT THE SAID FUNDS WERE WITHDRAWN FROM ITS DISCLOSED BANK ACCOUNTS IN ORDER TO ENSURE THAT THE CHEQUES PRESENTED BEFORE THE OBC BANK WERE HONOURED. FOR T HE SAID PURPOSE IT IS NECESSARY TO VERIFY THIS ASPECT FACTUALLY AND N ECESSARY JOURNAL ENTRY IN REGARD TO THE WITHDRAWALS AND DEPOSITS WHICH MAY HAVE BEEN PASSED BY THE ASSESSEE WOULD THROW LIGHT ON THIS. A PERU SAL OF THE GROUNDS RAISED BY THE ASSESSEE SHOWS THAT IT IS CLAIMED THA T ALL THE DETAILS AND RELEVANT BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED BY THE ASSESSEE. THIS ASPECT NEEDS VERIFICATION. THE A.O. SHALL PASS A S PEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A RE ASONABLE OPPORTUNITY OF BEING HEARD. FRESH EVIDENCE IF NEED BE MAY BE FILED BY THE ASSESSEE BEFORE THE AO WHO SHALL ENTERTAIN AND EXAMINE THE SAME. ACCORDINGLY THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ITA 4775/DEL/10 & PAGE 8 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. 13. THE FACTS PERTAINING TO THE DEPARTMENTAL GROUND ARE FOUND DISCUSSED IN PAGE 1 OF THE ASSESSMENT ORDER VIZ. T HE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS ISSUED NOTICES U/S 133(6) OF THE INCOME TAX ACT 1961 DT. 23.5.2008 TO SUNDRY CREDITORS FOR CON FIRMATION OF THEIR BALANCES. IN RESPONSE TO THESE NOTICES THE FOLLOWI NG FIVE PARTIES DID NOT FILE ANY CONFIRMATION. 1. VAISHNOV STEELS RS. 11 17 309 2. RAJAT TRADERS RS. 10 45 476 3. J.M.TRADERS RS. 4 52 249 4. ARISHTNEMI STEELS RS. 8 61 131 5. ANANT TRADERS RS. 7 37 614 ----------------- RS. 42 13 779/- ============ 14. SINCE THE ASSESSEE INITIALLY SOUGHT ADJOURNMENT AND SUBSEQUENTLY DID NOT APPEAR BEFORE THE AO TO PUT WITH HIS EXPLA NATION THE ADDITION OF RS. 42 13 797/- WAS MADE. 15. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE FILED VARIOUS DOCUMENTS AND EVIDENCES IN SUPPORT OF ITS C LAIM WHICH WERE REMANDED BACK TO THE AO IN ORDER TO AFFORD AN OPPOR TUNITY IN TERMS OF RULE 46A OF INCOME TAX RULES. THE A.O. RESPONDED V IDE REMAND REPORT DT. 20.5.209 25.9.2009 AND 29.6.2010. THE SAME WE RE PROVIDED TO ASSESSEE TO GIVE HIS COMMENTS. CONSIDERING THE EXP LANATION AND THE REMAND REPORTS THE ADDITION WAS DELETED OBSERVING A S UNDER. ITA 4775/DEL/10 & PAGE 9 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI GROUND NOS.4 (B) 4(C ) AND 4(D) : SINCE ADDITIONA L EVIDENCE HAS BEEN ADMITTED UNDER RULE 46A OF IT RULES 1962 THE SE GROUNDS HAVE BEEN PROPERLY DEALT AT THE APPELLATE STAGE. W ITH REGARD TO THE QUANTUM AND NATURE OF ADDITION IT IS FOUND THA T ASSESSEE HAS FILED CONFIRMATION FROM VARIOUS CREDITORS WITH COMPLETE ADDRESS PAN NUMBER. THE ASSESSEE HAS ALSO FILED T HE COPY OF SALES TAX ORDER FROM SALES TAX DEPARTMENT WHICH IS APPEARING AT PAGE NO. 71 OF THE PAPER BOOK FILED ALONG WITH THE ADDITIONAL EVIDENCE HAVING SAME FIGURES OF THE SALES AND PURC HASES AS SHOWN IN THE P&L ACCOUNT. THUS ASSESSEE HAS PROVE D THAT THERE IS NO SCOPE OF ANY DOUBT OF SALES AND PURCHASES. T HE AO WHILE MAKING ENQUIRY U/S 133(6) OF THE I.T.ACT HAS HELD T HAT OUT OF 58 PARTIES NOTICES WERE RECEIVED BACK IN CASE OF FIVE PARTIES THE TOTAL BALANCES OF WHICH HAS BEEN ADDED. SO THERE IS NO SCOPE OF ADDITION ON THIS ACCOUNT AND THE ISSUE IS DECIDED I N FAVOUR OF ASSESSEE AND ADDITION AMOUNTING TO RS. 42 13 779/- IS DELETED. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE T HE TRIBUNAL. 16. LD.D.R. CONTENDED THAT IN THE FACTS AND CIRCUMS TANCES OF THE CASE THE AO WAS JUSTIFIED IN MAKING THE ADDITION IN VIEW OF THE FACT THAT THE SAID PARTIES HAD NOT RESPONDED TO THE NOTICES ISSUE D U/S 133(6) OF THE ACT AND IT WAS HIS SINCERE REQUEST THAT THE ISSUE MAY BE RESTORED BACK AND THE AO MAY BE ALLOWED TO CONSIDER THE FRESH EVI DENCES WHICH HAVE BEEN THE BASIS FOR DELETING THE ADDITION. 17. LD.A.R. ON THE OTHER HAND VEHEMENTLY CONTENDED THAT MORE THAN A YEAR HAS ALREADY BEEN GIVEN TO THE AO AS ALL THE EV IDENCES WERE MADE AVAILABLE TO HIM BY THE CIT(A) ON THE BASIS OF WHI CH THREE SEPARATE REMAND REPORTS FROM THE AO ARE AVAILABLE ON RECORD . IT WAS HIS SUBMISSION THAT THE AO HAD ISSUED NOTICES TO ABOUT 58 PARTIES OUT OF WHICH ONLY 5 PARTIES HAVE NOT RESPONDED TO THE NOTI CE ISSUED U/S 133(6) OF THE ACT. IT WAS HIS SUBMISSION THAT DURING THE STAGE OF ASSESSMENT ITA 4775/DEL/10 & PAGE 10 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI PROCEEDINGS THE ASSESSEES ACCOUNTANT HAD A DISPUTE WITH THE ASSESSEE AND AS SUCH THE ASSESSEES CASE WENT UNREPRESENTED BEFORE THE A.O. THUS THE EVIDENCES AVAILABLE WERE FILED FIRST TIME BEFORE THE CIT(A). IT WAS HIS SUBMISSION THAT THE A.O. HAS HAD AN OCCASIO N TO LOOK AT ALL THE RELEVANT DOCUMENTS FOR ALMOST A YEAR AND HE HAS CON SIDERED AND EXAMINED THIS AS HE HAS SPECIFICALLY POINTED OUT TO THE DISCREPANCY IN THE PAN ADDRESS OF ONE OF THE PARTIES. THE AO HAS POI NTED OUT THAT THE PAN NUMBERS MENTIONED OF RAJATH TRADERS AS AVGPA 82985 WAS INCORRECT. IN REGARD TO THIS IT HAS BEEN EXPLAINED TO THE CIT( A) THAT THE SAID CONCERN HAD BEEN ISSUED TWO PAN NUMBERS AND ONE OF THEM WA S CANCELLED. THIS EXPLANATION WAS AGAIN FORWARDED TO THE A.O. FOR TH E SAID PURPOSE OUR ATTENTION WAS INVITED TO PAGE 4 OF THE IMPUGNED ORD ER WHEREIN THESE FACTS ARE ADDRESSED. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ADDITION STOOD RIGHTLY DELETED. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CAREFUL CONSIDERATION OF THE SAME WE ARE NOT INCLINED TO AGREE WITH THE REQUEST OF THE LD.D.R. I N AS MUCH AS THAT ISSUE MAY BE RESTORED BACK TO THE AO. IT IS SEEN THAT MO RE THAN A YEAR HAS BEEN MADE AVAILABLE TO THE AO BY THE CIT(A) AND AL L THE RELEVANT DETAILS AND MATERIAL WHICH HAS BEEN RELIED UPON BY THE CIT (A) HAS BEEN PLACED BEFORE THE A.O. IN THE SAID REMAND REPORT THE AO HAS NOT CARED TO POINT OUT ANY INFIRMITY APART FROM THE FACT THAT THE PAN NUMBER DETAILS OF RAJAT TRADERS WERE WRONG. THE DISCUSSION WITH REGA RD THERETO IS FOUND ITA 4775/DEL/10 & PAGE 11 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI IN PAGE 3 TO 4 VIDE PARAS 1 TO 6 MADE BY THE ASSESS EE WHICH IS REPRODUCED IN THE SAID ORDER. FOR READY REFERENCE WE REPRODUCE PARA 6 OF THE SAME HEREUNDER. THAT THE ONLY INFIRMITY WHICH LD.AO HAS FOUND DU RING THE COURSE OF PREPARING THE REMAND REPORT IS IN PAN NO. OF RAJAT TRADERS WHERE THE PAN NO. MENTIONED IS AVGPA 82985 AND THE SAME WAS FOUND TO BE WRONG. IN THIS REGARD IT IS M OST HUMBLY SUBMITTED THAT THE PAN NO. OF RAJAT TRADERS WHO IS PROPRIETORSHIP OF MR.RADHEY RAMAN AGGARWAL IS AGUPA 1761E. WHEN CONTACTED TO THE PARTY HE EXPLAINED HE HAD BE EN ALLOTTED TWO PAN NUMBERS FROM THE DEPARTMENT AND ONE PAN NO. WAS CANCELLED AND IT IS WHY THE SAME COULD NOT BE VER IFIED BY THE LD.A.O. HOWEVER FROM THE ABOVE FACT IT IS CLEARLY ESTAB LISHED THAT THE LD.AO HAS VERIFIED ALL DOCUMENTS IN SUPPORT OF CLA IM AND NOT FOUND ANYTHING CONTRARY IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE AND HENCE THE ASSESSEES POSITION IS DULY CONFIRMED. 19. A PERUSAL OF PARA 5.1 OF THE IMPUGNED ORDER SHO WS THAT THE SAME WAS FORWARDED VIDE LETTER DT. 14.6.2010 TO THE AO A ND THE AO WAS SPECIFICALLY DIRECTED TO EVALUATE THE DOCUMENTS AF TER GIVING OPPORTUNITY TO THE ASSESSEE AND TO SUBMIT A SPECIFIC PARA WISE COMMENTS WHICH WERE MADE AVAILABLE TO THE CIT(A) VIDE REMAND REPORT DT. 29.6.2010. A PERUSAL OF THE SAME SHOWS THAT THE AO HAS MAINLY NARRATED T HE FACTS AS WERE AVAILABLE AT THE ASSESSMENT STAGE. A PERUSAL OF TH E WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) SHOWS THAT IT WAS CLAIMED B Y THE ASSESSEE THAT THESE WERE PARTIES WITH WHOM THE ASSESSEE HAD ALREA DY CONDUCTED BUSINESS IN THE EARLIER YEARS AND THE ASSESSEE IN THE COURSE OF THE PROCEEDINGS HAD PROVIDED TO THE AO LIST OF 58 SUNDR Y CREDITORS AMOUNTING TO RS. 1 33 89 674/- ALONG WITH THE ADDRE SSES AND BALANCES. ITA 4775/DEL/10 & PAGE 12 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI IT IS ALSO CLAIMED THEREIN THAT ALL THE CREDITORS A RE REGISTERED WITH RESPECTIVE SALES TAX AUTHORITIES WHICH STOOD SUPPOR TED BY THE INVOICES BILLS OF CREDITORS WERE AVAILABLE FORE THE AO THE P AYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND STATEMENT OF ACCO UNT OF ALL THE CREDITORS DULY CONFIRMED BY THE RESPECTIVE PARTIES ALONG WITH PAN NUMBERS OF THE PARTIES COPIES OF INVOICES OF PART IES PROOF OF PAYMENT THROUGH ACCOUNT PAYEE CHEQUES ALONG WITH COPY OF BA NK STATEMENT TO ESTABLISH THE TRANSACTION. DETAILS OF PURCHASE FIL ED WITH THE SALES TAX DEPARTMENT WHERE THE ASSESSEE WAS REGISTERED TIN NU MBER AND SALES TAX REGISTRATION NUMBER MENTIONED ON THE INVOICE OF THE RESPECTIVE PARTIES DETAILS OF THE SALES AND PURCHASE OF THE RESPECTIVE SUPPLIER AND THE DETAILS OF CLOSING STOCK IN HAND AS ON 31.3.2006 WE RE ALL PROVIDED TO THE CIT(A) WHICH WERE FORWARDED TO THE AO SINCE NO SPE CIFIC INFIRMITY IN THE SAME HAS BEEN POINTED OUT BY THE AO WHO HAS MERELY REITERATED THE POSITION IN THE COURSE OF ASSESSMENT STAGE AND THE SHORT COMING WRONG PAN NUMBER IN THE CASE OF RAJAT TRADERS ARE EXPLAIN ED BY THE ASSESSEE WHICH EXPLANATION WAS NOT FOUND WANTING BY THE AO. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE WE FIND OURSEL VES UNABLE TO COME TO ANY OTHER FINDING THAN THE ONE ARRIVED AT BY THE CI T(A) WHO HAS CONCLUDED AS UNDER. GROUND NOS.4 (B) 4(C ) AND 4(D) : SINCE ADDITIONA L EVIDENCE HAS BEEN ADMITTED UNDER RULE 46A OF IT RULES 1962 THE SE GROUNDS HAVE BEEN PROPERLY DEALT AT THE APPELLATE STAGE. W ITH REGARD TO THE QUANTUM AND NATURE OF ADDITION IT IS FOUND THA T ASSESSEE HAS FILED CONFIRMATION FROM VARIOUS CREDITORS WITH COMPLETE ITA 4775/DEL/10 & PAGE 13 OF 13 ITA 5450/DEL/10 M/S WATER FLOW (INDIA) PVT. LTD. NEW DELHI ADDRESS PAN NUMBER. THE ASSESSEE HAS ALSO FILED T HE COPY OF SALES TAX ORDER FROM SALES TAX DEPARTMENT WHICH IS APPEARING AT PAGE NO. 71 OF THE PAPER BOOK FILED ALONG WITH THE ADDITIONAL EVIDENCE HAVING SAME FIGURES OF THE SALES AND PURC HASES AS SHOWN IN THE P&L ACCOUNT. THUS ASSESSEE HAS PROVE D THAT THERE IS NO SCOPE OF ANY DOUBT OF SALES AND PURCHASES. T HE AO WHILE MAKING ENQUIRY U/S 133(6) OF THE I.T.ACT HAS HELD T HAT OUT OF 58 PARTIES NOTICES WERE RECEIVED BACK IN CASE OF FIVE PARTIES THE TOTAL BALANCES OF WHICH HAS BEEN ADDED. SO THERE IS NO SCOPE OF ADDITION ON THIS ACCOUNT AND THE ISSUE IS DECIDED I N FAVOUR OF ASSESSEE AND ADDITION AMOUNTING TO RS. 42 13 779/- IS DELETED. ACCORDINGLY BEING SATISFIED BY THE FINDING AND REA SONING FOR THE REASONS GIVEN HEREINABOVE THE DEPARTMENTAL GROUND IS DISMI SSED. 20. IN THE RESULT THE APPEAL FILED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE DEPARTMENTAL APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (B.K. HALDAR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND JULY 2011 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CI T(A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR