M/s. Ankit Glass Industries (P) Ltd, Meerut v. ACIT, Meerut

ITA 835/DEL/2009 | 2001-2002
Pronouncement Date: 15-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 83520114 RSA 2009
Assessee PAN APRIL2006I
Bench Delhi
Appeal Number ITA 835/DEL/2009
Duration Of Justice 10 month(s) 9 day(s)
Appellant M/s. Ankit Glass Industries (P) Ltd, Meerut
Respondent ACIT, Meerut
Appeal Type Income Tax Appeal
Pronouncement Date 15-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 15-01-2010
Date Of Final Hearing 17-12-2009
Next Hearing Date 17-12-2009
Assessment Year 2001-2002
Appeal Filed On 06-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI R.C. SHARMA I.T.A. NO. 835/DEL/2009 ASSESSMENT YEAR: 2001-02 I.T.A. NO.2126/DEL/2009 ASSESSMENT YEAR: 2000-0 1 I.T.A. NO.2127/DEL/2009 ASSESSMENT YEAR: 2001-0 2 M/S. ANKIT GLASS INDUSTRIES (P) LTD. VS. ASSIST ANT COMMISSIONER OF IT C/O. SH. VINOD KUMAR GOEL CIRCLE-1 282-BOUNDARY ROAD CIVIL LINES MEERUT. MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. K. SAMPATH & VK GOE L ADVS. RESPONDENT BY: SMT. KAVITA BHAT NAGAR CIT(DR) AND SHRI BK GUPTA SR. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT THREE APPEALS ARE FILED BY THE ASSESSEE . ITA NO.835/DEL/09 IS DIRECTED AGAINST THE ORDER OF LEAR NED COMMISSIONER PASSED UNDER SEC. 263 OF THE INCOME-TAX ACT 1961 DATED 2. 2.2009 IN ASSESSMENT YEAR 2001-02. ITA NOS. 2126 & 2127/DEL/09 ARE FILED AGAINST THE COMMON ORDER OF THE LEARNED COMMISSIONER DATED 18.3.2009 P ASSED IN ASSESSMENT YEARS 2000-01 AND 2001-02. FIRST WE TAKE THE APPEAL OF ASSESSEE CHALLENGING THE ORDER OF CIT PASSED UNDER SEC. 263 OF THE ACT. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY AT THE RELEVANT TIME WAS MANUFACTURING EMPTY GLASS AMPULSE WHICH WERE MAINLY SUPPLIED TO THE BIG COMPANIES BUT A HUGE QUANTITY O F THE GOODS MANUFACTURED BY THE ASSESSEE WAS OF B-GRADE IN QUALITY WHICH WAS SOLD TO THE VARIOUS INDUSTRIES WHO DEALS IN MEDICINES OF ANIMAL DRUGS/I NJECTION. IT HAS FILED ITS RETURN OF INCOME ON 31.10.2001 DECLARING AN INCOME OF RS.1 02 351. LEARNED ASSESSING OFFICER IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS ISSUED NOTICES UNDER SEC. 143(2) AND 142(1) OF THE ACT. ON SCRUTINY OF THE ACCOUNTS HE FOUND THAT ASSESSEE HAD MADE A SALES O F RS.1 49 35 014 AND SHOWN A G.P. OF RS.29 30 922 IN TERMS OF PERCENTAGE THIS G.P. IS OF 19.62% WHICH IS BETTER THAN THE G.P. OF EARLIER YEARS SHOW N AT 16.96%. AFTER VERIFYING THE VARIOUS CLAIMS OF ASSESSEE HE PASSED AN ASSESSMENT ORDER UNDER SEC.143(3) ON 26.3.2004 AND DETERMINED THE TOTAL TA XABLE INCOME OF THE ASSESSEE AT RS.1 23 840. 3. LEARNED COMMISSIONER ON PERUSAL OF ASSESSMENT RE CORD ARRIVED AT A CONCLUSION THAT ORDER OF THE ASSESSING OFFICER IS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE ASSESSING OFFIC ER HAD ACCEPTED CERTAIN CREDITS IN THE ASSESSEES ACCOUNT AS GENUINE WITHOU T DUE INQUIRY. ACCORDING TO THE LEARNED COMMISSIONER THE ASSESSEE HAS NOT S HOWN ANY SUNDRY 3 CREDITORS IN THE BALANCE SHEET. IT HAS SHOWN SUNDRY DEBTORS AT RS.7 46 729.38. THE DETAILS OF THE SUNDRY DEBTORS HAVE BEEN FURNISH ED IN SCHEDULE-8. ON PERUSAL OF THE SCHEDULE LEARNED COMMISSIONER FOUND SUNDRY DEBTORS OUTSTANDING FOR MORE THAN SIX MONTHS AT RS.11 81 60 8.24. SUNDRY DEBTORS OUTSTANDING FOR LESS THAN SIX MONTHS AT RS.20 66 20 8.66. THUS THE TOTAL SUNDRY DEBTORS SHOWN BY THE ASSESSEE IN THE SCHEDUL E ARE OF RS.32 47 816.90. IT IS CLAIMED BY THE ASSESSEE THAT OUT OF THESE SUNDRY DEBTORS A SUM OF RS. 25 01 087.52 REPRESENTS THE AD VANCES RECEIVED FROM THE CUSTOMERS FOR SUPPLY OF GOODS AND THUS THE SUNDRY D EBTORS SHOWN WAS OF RS.7 46 729. LEARNED COMMISSIONER WAS OF THE OPINIO N THAT ASSESSING OFFICER HAS ACCEPTED THIS FACT WITHOUT MAKING DUE I NQUIRY AND THEREFORE HIS ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE ISSUED A SHOW-CAUSE NOTICE UNDER SEC. 263 OF THE ACT AND INV ITED THE EXPLANATION OF THE ASSESSEE AS TO WHY THE ORDER OF THE ASSESSING O FFICER BE NOT SET ASIDE BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT EMERGES OUT FROM THE RECORD THAT AFTER HEARING THE ASSESSEE LEA RNED COMMISSIONER HAS PASSED AN ORDER UNDER SEC. 263 ON 30.11.2005. THIS ORDER WAS CHALLENGED IN APPEAL BEFORE THE ITAT IN ITA NO.85/DEL/06. THE ITA T HAS SET ASIDE THE 4 ISSUE TO THE FILE OF THE LEARNED COMMISSIONER FOR A DJUDICATION OF THE ISSUE DE NOVO. THE FINDINGS OF THE ITAT DISPOSING OF ASSESSE ES APPEAL READ AS UNDER: 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. A PERUSAL OF THE IMPUGNED ORDER SHOWS TH AT THE LEARNED COMMISSIONER HAS CATEGORICALLY OBSERVED THAT VIDE R EPLY DATED 23.6.2005 THE ASSESSEE STATED THAT THE AMOUNTS IN QUESTION WERE RECEIVED THROUGH AN AGENT APPOINTED BY IT AND THAT VIDE REPLY DATED 28.8.2005 THE ASSESSEE CLAIMED TO HAVE RECEIVED TH IS MONEY BY WAY OF ADVANCES THROUGH ITS AGENTS APPOINTED; THAT STIL L THE ASSESSEE DID NOT EVEN MENTION THE NAME AND ADDRESS OF THAT AGENT ADMITTEDLY APPOINTED BY THE ASSESSEE ITSELF. FROM THIS THE L EARNED COMMISSIONER CONCLUDED THAT IT CLEARLY STOOD PROVE D THAT THE STORY OF ACCEPTING MONEY THROUGH THE AGENT WAS JUST A MAKE-B ELIEVED STORY PREFERRED BY THE ASSESSEE. IT IS SEEN THAT NO ENQU IRY IN THIS REGARD WAS CONCLUDED BY THE LEARNED COMMISSIONER. 6. AS SUCH WE DEEM IT APPROPRIATE TO REMIT THE MAT TER TO THE FILE OF THE LEARNED COMMISSIONER FOR DECISION AFRESH ON EXA MINING THE ISSUE DENOVO AFTER A THOROUGH ENQUIRY FROM THE ALLEGED AG ENT OF THE ASSESSEE WHOSE COMPLETE ADDRESS THE ASSESSEE SHALL PROVIDE TO THE LEARNED COMMISSIONER. ORDERED ACCORDINGLY. THE AS SESSEE OF COURSE SHALL PROPERLY ASSIST THE FRESH ADJUDICATIO N. THE LEARNED CIT SHALL PROVIDE DUE AND ADEQUATE OPPORTUNITY TO THE A SSESSEE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TRE ATED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY 2008. 4. IN PURSUANCE OF THE ITATS DIRECTIONS LEARNED COMMISSIONER HAD AGAIN ISSUED THE NOTICES TO THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT IT HAS RECEIVED ADVANCES FROM VARIOUS CUSTOMERS FOR SU PPLY OF EMPTY GLASS IMPULSE THROUGH SHRI MA KHAN WHO HAD WORKED AS AN AGENT FOR THE VARIOUS 5 CUSTOMERS. THE ASSESSEE HAD SUPPLIED THE GOODS TO T HOSE CONCERNS AND ADJUSTED THE ADVANCES AGAINST THE SALES. IT HAS FIL ED COPY OF THE LEDGER ACCOUNT COPY OF THE SALE BILLS BEFORE THE ASSESSIN G OFFICER DURING THE ASSESSMENT PROCEEDING. IT WAS ALSO CONTENDED THAT S ALES OF THE ASSESSEE ARE SUBJECT TO CENTRAL EXCISE AS WELL AS SALES-TAX. IT HAS DULY DEDUCTED BOTH THESE AMOUNTS WHILE EFFECTING THE SALES AND RETURN OF THE SALES-TAX AS WELL AS CENTRAL EXCISE WERE FILED THOSE RETURNS HAVE DULY BEEN ACCEPTED BY THE AUTHORITIES UNDER THE SALES-TAX ACT AND THE CENTRAL EXCISE ACT. THE SALES EFFECTED BY THE ASSESSEE HAVE NOT BEEN DOUBTED EVEN BY THE ASSESSING OFFICER IN THE SUBSEQUENT ASSESSMENT YEARS WHEN ASS ESSEE HAS SUPPLIED THE GOODS TO THE ALLEGED PURCHASERS WHO HAD GIVEN ADVAN CES. THE ASSESSEE FURTHER CONTENDED THAT IT WAS RUNNING ITS MANUFACTU RING UNIT AT MEERUT CANTONMENT. THERE WERE CERTAIN VIOLATION OF BUILDIN G BY LAWS AND ITS BUILDING WAS DEMOLISHED BY THE COMPETENT AUTHORITY. THE ASSESSEE HAS TO CLOSE ITS BUSINESS AT MEERUT AND SHIFTED FROM MEERU T TO BANGALORE. THERE IS NO CONTACT WITH THE ALLEGED PURCHASERS FROM THE LAS T 7 TO 8 YEARS. THE PURCHASES WERE MADE THROUGH SHRI M.A. KHAN WHO ACTE D AS AN AGENT. THERE WAS NO DIRECT DEALING WITH THE ASSESSEE OF THE PUR CHASER AND THEREFORE IT WAS NOT PRACTICALLY POSSIBLE FOR IT TO GAVE CONFIRM ATION OR TO DISCLOSE THE 6 COMPLETE DETAILS OF THE PURCHASERS. THE ASSESSEE HA S FILED AFFIDAVIT OF SHRI KHAN BEFORE THE LEARNED COMMISSIONER. 5. LEARNED COMMISSIONER WAS NOT SATISFIED WITH THE AFFIDAVIT OF ALLEGED AGENT SHRI M.A. KHAN ON THE GROUND THAT IT DID NOT BEAR THE PHOTOGRAPH OF THE DEPONENT AND THE ROUND STAMP OF THE NOTARY WAS NOT LEGIBLE. THE ASSESSEE HAS FILED FRESH AFFIDAVIT ALONG WITH THE PHOTOGRAPH OF SHRI M.A. KHAN BUT AGAIN THE LEARNED COMMISSIONER OBSERVED THAT PHOTOG RAPH HAS NOT BEEN CANCELLED BY THE NOTARYS STAMP OR SIGNATURE. ULTIM ATELY ASSESSEE HAD PRODUCED SHRI M.A. KHAN BEFORE THE LEARNED COMMISSI ONER ON 10.12.2008. SHRI KHAN AGED 46 IS AN EDUCATED AGRICULTURIST FROM VILLAGE TANDA P.O. CHHAPRAULI DIST. BAGHPAT. HE IS HAVING ANNUAL AGRI CULTURAL INCOME AT RS.75 000. HE IS B.COM GRADUATE AND USED TO RIGHT B OOKS OF ACCOUNT OF SOME TRADERS AND EARNED RS.20 000 PER ANNUM. SHRI K HAN DOES NOT HAVE A PAN. HIS STATEMENT WAS RECORDED BY THE LEARNED COMM ISSIONER. LEARNED COMMISSIONER AFTER APPRECIATING THE STATEMENT OF SH RI KHAN AND THE OTHER EVIDENCE ARRIVED AT A CONCLUSION THAT THE ALLEGED A DVANCE OF RS.25 14 600 FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSES SEE IS NOT AN ADVANCE BUT IT IS UNEXPLAINED CASH CREDITS WHICH IS TO BE ASSES SED AS INCOME OF THE 7 ASSESSEE WITH THE AID OF SEC. 68. THE REASONS ASSIG NED BY THE LEARNED COMMISSIONER BRIEFLY IN PARAGRAPH 22 OF THE IMPUGNE D ORDER READ AS UNDER: (I) THE ASSESSEE TRIED TO PRESENT A WRONG PICTURE OF ITS FINANCES BY NOT SHOWING ADVANCES RECEIVED BY IT SEPARATELY B UT GROUPING THEM WITH SUNDRY DEBTORS IN THE RETURN OF INCOME FI LED BY IT. (II) ON ENQUIRY THE ADDRESSES OF THE 15 PERSONS ADVANCING MONEY TO THE ASSESSEE WERE FOUND TO BE BOGUS AND TH E ASSESSEE STATED THAT IT WAS NOT AWARE OF THEIR CORRECT ADDRE SSES. IT IS NOT UNDERSTOOD AS TO HOW GOODS COULD BE SUPPLIED IN THE ABSENCE OF THE RELEVANT ADDRESSES? (III) SIGNIFICANTLY THE ADDRESSES MENTIONED IN THE LIST ADVANCES FROM CUSTOMERS WERE QUITE DIFFERENT FROM THE ADDRESSES MENTIONED ON THE SALE BILLS. (IV) NO CONFIRMATIONS OF THE ABOVE MENTIONED PERSON S COULD BE PROVIDED. (V) CERTAIN CIRCUMSTANCES ASSOCIATED WITH THESE AD VANCES WERE FOUND TO BE HIGHLY SUSPICIOUS VIZ. (A) ALL DRAFTS WERE ISSUED IN SERIATIM ON A SINGLE BANK THOUGH THE PERSONS ADVANCING MONEY CAME FROM DIFFERENT P LACES. 8 (B) ALL DRAFTS WERE FOR DENOMINATIONS BELOW RS.50 0 00/- WHICH DID NOT REQUIRE THE PURCHASER TO DISCLOSE HIS PAN. (VI) THE AGENT THROUGH WHICH THE ASSESSEE OPERATE D DENIED HIS AGENCY AND ULTIMATELY THE ASSESSEE ALSO ACCEPTE D THIS POSITION. IF THERE WAS NO AGENT HOW COULD MONEYS BE ACCEPTED ON BEHALF OF THE ASSESSEE? (VII) AN ATTEMPT WAS MADE TO PORTRAY SHRI KHAN AS A N AGENT OF THE PARTIES ADVANCING MONEYS TO THE ASSESSEE BUT TH E TESTIMONY OF SHRI KHAN WAS FOUND TO BE UNRELIABLE AS IT SUFFE RED FROM INCONSISTENCIES AND LACK OF VERIFIABLE FACTS. SIGN IFICANTLY SHRI KHAN DENIED HAVING AN OFFICE MAINTAINING BOOKS OF ACCOUNT ISSUING RECEIPTS OR EVEN HAVING A PAN. 6. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER CONTENDED THAT ASSESSMENT ORDER WAS PASSED AFTER D UE VERIFICATION AND GOING THROUGH ALL THE ISSUES THE LEARNED COMMISSIONER HA S CONSTRUED THE ADVANCES RECEIVED BY THE ASSESSEE FROM ITS CUSTOMER AS BOGUS WITHOUT THERE BEING ANY MATERIAL AND MERELY ON THE BASIS OF CHANG E OF OPINION WHICH IS NOT PERMISSIBLE U/S 263 OF THE ACT. HE FURTHER EMPHASI ZED THAT LEARNED COMMISSIONER HAS TO DEMONSTRATE THAT ORDER OF THE A SSESSING OFFICER IS ERRONEOUS. HE HAS NOWHERE POINTED OUT AS TO HOW TH E ORDER OF THE ASSESSING 9 OFFICER IS ERRONEOUS. THE TWIN CONDITIONS I.E. ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE SHOULD CO-EXIST FOR EXE RCISING THE POWERS U/S 263 OF THE ACT. THE FIRST REASON ASSIGNED BY THE LEARN ED COMMISSIONER FOR TAKING ACTION U/S 263 IS THAT ASSESSEE HAS TRIED TO PRESENT A WRONG PICTURE OF ITS FINANCE BY NOT SHOWING ADVANCES RECEIVED BY IT FROM CUSTOMER SEPARATELY BUT GROUPING THEM WITH THE SUNDRY DEBTORS IN THE RE TURN OF INCOME FILED BY IT. THE ASSESSEE HAS APPENDED SCHEDULE-8. IT HAS DISCL OSED THE LIST OF THE PERSONS FROM WHOM ADVANCES WERE RECEIVED. COPIES O F THE LEDGER ACCOUNT IN RESPECT OF ALL THESE PERSONS WERE SUBMITTED BEFO RE THE ASSESSING OFFICER. THE NEXT REASON ASSIGNED BY THE LEARNED COMMISSIONE R IS THAT ADDRESSES OF THE INCOME TAX PROCEEDINGS ADVANCING MONEY TO THE A SSESSEE WERE FOUND TO BE BOGUS. RIGHT FROM THE BEGINNING IT WAS THE STAN D OF THE ASSESSEE THAT IT HAS NO DIRECT RELATION WITH THE ALLEGED PURCHASERS. THE ADVANCES WERE RECEIVED THROUGH AN AGENT SHRI M.A.KHAN. THE GOODS WERE SUPPLIED TO THESE CONCERNS AND THERE IS NO LITIGATION PENDING W ITH THESE PERSONS. THE NEXT REASON ASSIGNED BY THE LEARNED COMMISSIONER IS THAT ADDRESSES MENTIONED IN THE LIST I.E. ADVANCES FROM CUSTOMERS WERE QUITE DIFFERENT FROM THE ADDRESSES MENTIONED IN THE SALE BILL. THE LEAR NED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IT IS QUITE DIFFICULT FOR A BUSINESS ENTITY TO MAKE A 10 MENTION OF FULL ADDRESS OF ANY PURCHASER IN THE SAL E BILL OTHERWISE THERE IS NO SUBSTANTIAL DIFFERENCE. THE FOURTH REASON ASSIGNED BY THE LEARNED COMMISSIONER IS THAT NO CONFIRMATION OF THE ABOVE M ENTIONED PERSONS CAN BE PROVIDED. IT WAS POINTED OUT BY THE ASSESSEE TH AT ADVANCES WERE RECEIVED THROUGH SHRI KHAN THEREFORE IT HAS NOT BOTHERED TO VERIFY THE CREDENTIAL OF THE PURCHASERS NOR IT IS REQUIRED BY THE LAW. THE ASSESSEE HAS SUPPLIED THE GOODS AND SQUARED UP THE ACCOUNTS. THE NEXT REASON ASSIGNED BY THE LEARNED COMMISSIONER IS CERTAIN CIRCUMSTANCES THAT THE ASSOCIATED WITH THESE ADVANCES WERE FOUND TO BE HIGHLY SUSPICIOUS N AMELY ALL DRAFTS WERE ISSUED IN SERIATIM ON A SINGLE BANK THOUGH THE PER SON ADVANCING MONEY CAME FROM DIFFERENT PLACES AND ALL DRAFTS WERE FOR DENOMINATION BELOW RS.50 000/-. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT LEARNED COMMISSIONER FAILED TO CONSTRUE THE HARD BUSINESS R EALITIES WHEN A PERSON IS WORKING AS A FREELANCE AGENT/MIDDLEMAN BETWEEN MANU FACTURER AND CONSUMER THEN IN THE SMALL TOWN SUCH ALLEGED MIDDLE MAN WOULD VISIT THE CONSUMER AND COLLECT THE MONEY GOT PREPARED THE DR AFT AND PAID THE DRAFT TO THE MANUFACTURER FOR SUPPLY OF THE GOODS. THE CONS UMER HAD NO HEADACHE OF CONTRACTING WITH THE MANUFACTURER AND ARRANGING ALL SORTS OF DOCUMENTATION FOR THE PURCHASE OF GOODS. IT IS THE MIDDLEMAN WHO WOULD COLLECT THE MONEY 11 AND ENSURE THE SUPPLY OF GOODS. IT IS THE CREDIBILI TY AND MUTUAL TRUST BETWEEN THE PURCHASER AND MIDDLEMAN WHICH ENSURE THE COMPL ETION OF TRANSACTION. IN SUCH SITUATION HE COULD PURCHASE THE DRAFT FROM ONE SINGLE BANK AND NUMBERS WOULD BE IN SERIATIM. IT IS NOT A MANIFEST ILLEGALITY. THE NEXT REASON ASSIGNED BY THE LEARNED COMMISSIONER IS THAT AGENT THROUGH WHICH THE ASSESSEE OPERATED DENIED THE AGENCY AND ULTIMAT ELY THE ASSESSEE ALSO ACCEPTED THIS POSITION. HE POINTED OUT THAT AGAIN LEARNED COMMISSIONER FAILED TO CONSTRUE THE SUBMISSIONS MADE BY THE ASSE SSEE. SHRI M.A.KHAN IN HIS REPLY TO QUESTION NO.17 OF HIS STATEMENT SPECIF ICALLY DEPOSED THAT HE USED TO COLLECT THE MONEY FROM THE PURCHASER AND MADE TH E PAYMENT TO THE ASSESSEE AFTER GETTING THE PAY ORDER PREPARED FROM THE BANK AND SUPPLY THE GOODS. THE ASSESSEE HAS NOT ENTERED INTO ANY FORMAL AGREEMENT WITH SHRI M.A.KHAN BY APPOINTING HIM AS AN AGENT BUT HE WAS W ORKING AS AN AGENT BETWEEN THE ASSESSEE AND THE ALLEGED PURCHASER. LE ARNED COMMISSIONER HAS TOOK THIS EXPLANATION OF THE ASSESSEE IN LITERARY W AY INSTEAD OF DRAWING THE TRUE INFERENCE I.E. THE SUBSTANCE OF THE ASSESSEES SUBMISSIONS. THE NEXT REASON ASSIGNED BY THE LEARNED COMMISSIONER IS THAT THE STATEMENT OF SHRI KHAN IS NOT RELIABLE BECAUSE IT SUFFERED FROM INCON SISTENCY AND CERTAIN FACTS ARE UNVERIFIABLE. LD. COUNSEL FOR THE ASSESSEE WHIL E IMPUGNING THIS REASON 12 TOOK US THROUGH THE STATEMENT OF SHRI KHAN AND POIN TED OUT THAT THIS WITNESS HAS GIVEN REPLIES STRAIGHTFORWARDLY. IT IS NOWHERE NOTICED BY THE LEARNED COMMISSIONER THAT THIS MAN STUMBLED FOR WORDS. THE REPLY MAY NOT BE IN THE LINE IN WHICH LEARNED COMMISSIONER MUST BE EXPE CTING OR HE MAY NOT BE ABLE TO IMPROVE THE FACTS AS THEY ARE AVAILABLE ON THE RECORD. HIS STATEMENT WAS RECORDED IN 2008 WHEREAS THE TRANSACTION RELATE S TO AY 2001-02. AFTER A GAP OF 6-7 YEARS IT IS BUT NATURAL THAT A WITNES S WOULD NOT BE IN A POSITION TO DISCLOSE EVERY ASPECTS IN A MATHEMATICAL PRECESS IONS. HE WAS ABLE TO TELL THE NAMES OF 5-6 PURCHASERS TO WHOM GOODS WERE SUPP LIED. IT IS QUITE DIFFICULT TO TELL NAMES OF ALL THE PARTIES. LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN SUBSEQUENT ASSESSMENT YEAR THE SA LES AGAINST THESE ADVANCES HAVE BEEN ACCEPTED BY THE ASSESSING OFFICE R. THESE HAVE BEEN ACCEPTED IN THE SALES-TAX ASSESSMENT AND IN THE CEN TRAL EXCISE ASSESSMENT. THE ASSESSEE HAS AFFECTED TOTAL SALES OF RS.1 49 35 014 DURING THIS ASSESSMENT YEAR. THE ALLEGED ADVANCE OF RS.25 14 60 0 IS 1/6 TH OF THE TOTAL SALES NO DOUBT HAS BEEN RAISED WITH REGARD TO THE O THER SALES. TAKING US THROUGH PARAGRAPH 5 OF THE IMPUGNED ORDER HE POINT ED OUT THAT THE LEARNED COMMISSIONER IN ITS ORDER DATED 30.11.2005 HAS QUOT ED AN EXAMPLE INDICATING HOW A BUSINESS INTRODUCED CASH IN ITS BO OKS OF ACCOUNT. IN THE 13 EXAMPLE IT IS OBSERVED THAT A BUSINESSMAN IN NEED OF A MONEY INTRODUCED CASH IN HIS BOOKS OF ACCOUNT NAMELY OF A AND SHOW S IT AS ADVANCE AGAINST GOODS TO BE SUPPLIED. ANOTHER PERSON B WANTS TO P URCHASE GOODS BUT DOES NOT WANT ANY BILL FOR SUCH PURCHASE. THE BUSINESSMA N CAN BE HAPPY TO SELL THE GOODS AND ACCEPT CASH FROM B FOR SALE OF GOOD S BUT CAN ISSUE THE BILL IN THE NAME OF A TO SQUARE UP THE ADVANCE INTRODUCED IN THE NAME OF A. IN THIS MANNER NO DOUBT THE TOTAL TURN OVER IS NOT EF FECTED AND THE BUSINESSMAN CAN EASILY INTRODUCE UNACCOUNTED CASH AT HIS SWEET WILL. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THIS EXAMPLE IS NOT C OMPLETE. HOW ONE CAN SAY THAT UNEXPLAINED CASH HAS BEEN INTRODUCED. WHAT WIL L HAPPEN TO THE AMOUNT COLLECTED FROM B BECAUSE SALE BILL HAS BEEN ISSUE D AGAINST THE CASH COLLECTED FROM A. THE CASH COLLECTED FROM B WIL L AGAIN REMAIN OUT OF CIRCULATION. ON THE STRENGTH OF ABOVE SUBMISSIONS HE POINTED OUT THAT THERE IS NO MATERIAL WITH THE LEARNED CIT TO SAY THAT ADV ANCES RECEIVED BY THE ASSESSEE ARE BOGUS CASH CREDITS AND NOT ADVANCES TO WARDS SUPPLY OF GOODS. 7. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORD ER OF THE LEARNED COMMISSIONER. HE CONTENDED THAT ASSESSING OFFICER H AS NOWHERE INVESTIGATED THIS ISSUE. THE ASSESSMENT ORDER IS TO TALLY SILENT. IT IS RUNNING INTO A ONE AND HALF PAGE. THERE IS NO INVESTIGATION OF THE FACTS. THUS THE 14 LEARNED COMMISSIONER IS JUSTIFIED IN TAKING COGNIZA NCE UNDER SEC. 263 OF THE ACT. IN SUPPORT OF ITS CONTENTION HE RELIED UP ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIES REPORTED IN 243 ITR 83. WITH REGARD TO THE MERIT OF THE ADDITIONS SHE POINTED OUT THAT IT IS THE ASSESSEE WHO HAS TO PROVE THE ALLEGED ADVANCES RECEIVED FOR SUPPLY OF GOODS. THE ASSESSEE EXCEPT PRODUCING SALES BILLS L EDGER ACCOUNT HAS FAILED TO PRODUCE ANY OTHER MATERIAL. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ITAT IN THE CASE OF MRS. KH ATIZA S. OOMERBHOY VS. ITO MUMBAI 101 TTJ 1095 ANALYZED IN DETAIL VARI OUS AUTHORITATIVE PRONOUNCEMENTS INCLUDING THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF MALABAR INDUSTRIES 243 ITR 83 AS WELL AS H ONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF GABRIEL INDIA LTD. AN D HAS PROPOUNDED THE FOLLOWING BROADER PRINCIPLE TO JUDGE THE ACTION OF CIT TAKEN UNDER SECTION 263. THE FUNDAMENTAL PRINCIPLE WHICH EMERGE FROM THE A BOVE CASES MAY BE SUMMARIZED BELOW (I) THE CIT MUST RECORD SATISFACTION THAT THE ORDE R OF THE A.O IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BO TH THE CONDITIONS MUST BE FULFILLED. 15 (II) SEC. 263 CANNOT BE INVOKED TO CORRECT EACH AN D EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE A O AND IT WAS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCOR RECT APPLICATION OF LAW WILL SUFFICE THE REQUIREMENT OF ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION O F MIND SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE AND IF THE A.O HAS ADOPTED ONE OF TH E COURSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE A.O HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE IT CANNOT B E TREATED AS AN ERRONEOUS ORDER UNLESS THE VIEW TAKEN BY THE A.O I S UNSUSTAINABLE UNDER LAW. (VI) IF WHILE MAKING THE ASSESSMENT THE A.O EXAMI NES THE ACCOUNTS MAKES ENQUIRIES APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINE THE INCOME THE CIT WHILE EXERC ISING HIS POWER UNDER S. 263 IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIMATED BY THE A.O. (VII) THE A.O EXERCISES QUASI-JUDICIAL POWER VEST ED IN HIS AND IF HE EXERCISES SUCH POWER IN ACCORDANCE WITH LAW AND ARR IVES AT A CONCLUSION SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SI MPLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE CIT BEFORE EXERCISING HIS JURISDICTION UNDER S. 263 MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE A.O HAS MADE ENQUIRIES DURING THE COU RSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANATION BY A LETTER IN WRITING AND THE A.O ALLO WS THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THE DECISION OF THE A.O CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HI S ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 9. IN THE LIGHT OF ABOVE TESTS IF WE EXAMINE THE F ACTS OF THE PRESENT CASE THEN IT WOULD REVEAL THAT NOTHING IS DISCERNIBLE FR OM THE ASSESSMENT ORDER WHETHER ASSESSING OFFICER HAS APPLIED HIS MIND FOR VERIFYING THESE ENTRIES OR 16 NOT. HON'BLE SUPREME COURT HAS OBSERVED IN THE CASE OF MALABAR INDUSTRIES (SUPRA) THAT IF ASSESSING OFFICER HAS NOT CARRIED O UT ANY INQUIRY AND ACCEPTED THE ACCOUNTING ENTRIES AS IT IS THEN HIS ORDER WOUL D BE ERRONEOUS. IN THE PRESENT CASE ALSO THE ASSESSEE FAILS TO PRODUCE AN Y MATERIAL INDICATING THE FACT THAT ASSESSING OFFICER HAS ISSUED SHOW-CAUSE N OTICE ON THE ISSUE OF ALLEGED SUNDRY CREDITORS AND ASSESSEE HAS SUBMITTED THE DETAILS THEREAFTER HAS APPLIED HIS MIND WHILE PASSING ASSESSMENT ORDER UNDER SEC. 143(3) OF THE ACT. TAKING INTO CONSIDERATION ALL THESE ASPECTS W E ARE OF THE OPINION THAT LEARNED COMMISSIONER WAS JUSTIFIED IN TAKING COGNIZ ANCE UNDER SEC. 263 OF THE ACT. 10. LEARNED COMMISSIONER HAS NOT SET ASIDE THE ISSU E TO THE ASSESSING OFFICER FOR VERIFICATION RATHER HE PROCEEDED TO EXA MINE THE ISSUE ON MERIT HIMSELF AND THEREAFTER DIRECTED THE ASSESSING OFFIC ER TO REVISE THE ASSESSMENT ORDER BY MAKING AN ADDITION OF RS.25 14 600. THUS WE ARE REQUIRED TO ADJUDICATE WHETHER THIS ADDITION DESERV ES TO BE MADE IN THE INCOME OF THE ASSESSEE OR NOT. THE CLAIM OF ASSESSE E IS THAT IT HAS BEEN MANUFACTURING GLASS AMPULSE. THESE ARE SOLD TO VARI OUS PARTIES. SOME OF THE PURCHASERS USED TO PURCHASE THE GOODS THROUGH ONE S HRI M.A. KHAN. SHRI M.A. KHAN USED TO COLLECT THE MONEY FROM VARIOUS PA RTIES GOT PREPARED PAY 17 ORDER MAKE THE PAYMENT TO THE ASSESSEE AND ENSURE THE SUPPLY OF GOODS TO THOSE PARTIES. THE CHARGE AGAINST THE ASSESSEE BY T HE LEARNED COMMISSIONER IS THAT IT FAILED TO FURNISH THE DETAILS OF ITS PUR CHASERS WITH COMPLETE ADDRESS AND FAILED TO FURNISH CONFIRMATION FROM THOSE PURCH ASERS SHOWING THAT THEY HAVE GIVEN ADVANCES TO THE ASSESSEE FOR SUPPLY OF G OODS. THE CONTENTION OF THE ASSESSEE IS THAT IT HAS CLOSED DOWN THE BUSINES S AT MEERUT BECAUSE OF DEMOLITION OF ITS MANUFACTURING UNIT. IT HAS NO CON TACT WITH THE PURCHASER FROM THE LAST 7-8 YEARS. IT HAS SHIFTED ITS BUSINES S FROM MEERUT TO BANGALORE. IT HAS PRODUCED THE ALLEGED AGENT SHRI M.A. KHAN BE FORE THE LEARNED COMMISSIONER. WE HAVE TWO SETS OF FACTS BEFORE US. ON THE ONE HAND CIRCUMSTANCES DEMONSTRATED BY THE ASSESSEE I.E. CLO SER OF THE BUSINESS AT MEERUT AND SHIFTING IT OFF AT BANGALORE. PRODUCTION OF SHRI M.A. KHAN BEFORE THE LEARNED COMMISSIONER THROUGH WHOM PAYMEN TS WERE RECEIVED AND GOODS WERE SUPPLIED. ACCEPTANCE OF ITS SALES BY THE ASSESSING OFFICER IN THE SUBSEQUENT ASSESSMENT YEAR ACCEPTANCE OF SALES BY THE CENTRAL EXCISE AUTHORITIES AND SALES-TAX AUTHORITIES. TIME GAP OF 7-8 YEARS TO CO-RELATE THE DETAILS OF ALL THE PURCHASERS. ON THE OTHER HAND T HE DEFECTS POINTED OUT BY THE LEARNED COMMISSIONER IN THE STATEMENT OF SHRI M A KHAN AND OTHER CIRCUMSTANCES DISCUSSED BY US WHILE TAKING NOTE OF ARGUMENTS OF LEARNED 18 COUNSEL FOR THE ASSESSEE. IF WE WEIGH BOTH THESE SE TS OF FACTS THEN SCALE WOULD TILT IN FAVOUR OF THE ASSESSEE BECAUSE IT IS QUITE DIFFICULT FOR A BUSINESSMAN TO TRACE OUT ITS PURCHASERS AFTER 7-8 Y EARS OF SALES MADE TO THEM PARTICULARLY IN THE FACTS AND CIRCUMSTANCES WHEN BU SINESS WAS CLOSED DOWN AT THAT PLACE. AN ASSESSEE IS NOT SUPPOSED TO PROVE THE IDENTITY OF ITS PURCHASERS OR TO VERIFY THEIR CREDENTIAL. HE IS EXP ECTED TO DO ONLY IF HE IS SHOWING THE ADVANCES FROM SUCH PURCHASERS AS IS THE POSITION IN THE PRESENT CASE. HON'BLE DELHI HIGH COURT I THE CASE OF CIT VS . DALMIA CEMENT REPORTED IN 254 ITR 377 PROPOUNDED THE APPROACH REQ UIRED TO BE ADOPTED BY THE REVENUE AUTHORITIES WHILE APPRECIATING INCURRE NCE OF ANY EXPENSES BY A BUSINESSMAN. IT IS OBSERVED BY THE COURT THAT AN EX PENDITURE TO WHICH ONE CANNOT APPLY AN EMPIRICAL OR SUBJECTIVE STANDARD IS TO BE JUDGED FROM THE POINT OF VIEW OF A BUSINESSMAN AND IT IS RELEVANT T O CONSIDER HOW THE BUSINESSMAN TREATS PARTICULAR ITEM OF EXPENDITURE. THOUGH THE DECISION IS IN A DIFFERENT CONTEXT I.E. ALLOWABILITY OF EXPENSES F OR THE PURPOSE OF BUSINESS IN TERM OF SECTION 37 BUT THE CONCERN OF THE HONBLE COURT IS HOW TO VISUALIZE THE BUSINESS DECISION OF BUSINESSMAN AT A PARTICULA R TIME. SOME TIME THE STANDARD OF ORGANIZEDNESS IN MANAGING THE AFFAIR BY AN ASSESSEE MAY NOT MATCH WITH EXPECTATION OF REVENUE AUTHORITIES IN S UCH SITUATION HOW TO 19 CONSTRUE THOSE HARD REALITIES HAVE BEEN EXPLAINED. IN THE PRESENT CASE ADVANCES WERE TAKEN FROM 15 PARTIES. SALES HAVE ALR EADY BEEN MADE. THEIR ACCOUNTS HAVE BEEN SQUARED UP. ONCE SALES HAVE BEEN ACCEPTED THEN IF PURCHASES ARE ALSO ADDED UNDER THE GARB OF UNEXPLAI NED CASH CREDITS THEN IT WILL AMOUNT TO TAX THE SAME AMOUNT TWICE. THUS ON AN ANALYSIS OF THE ALLEGED DEFECT POINTED OUT BY THE LEARNED CIT(APPEA LS) AND ENUMERATED BY US IN PARAGRAPH 5 OF THIS ORDER VIS--VIS THE EXPLA NATION OF ASSESSEE AND RE- APPRECIATION OF THE STATEMENT OF SHRI MA KHAN WE A RE OF THE VIEW THAT NO ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT DESERVES TO BE MADE IN THE HANDS OF ASSESSEE BECAUSE SALES HAVE BEEN ACCEPTED BY THE SALES-TAX DEPARTMENT AS WELL AS CENTRAL EXCISE. THE ASSESSEE HAS PRODUCED T HE ALLEGED MIDDLEMAN THROUGH WHOM THESE AMOUNTS HAVE BEEN COLLECTED AND GOODS WERE SUPPLIED. IT IS NOT A SIMPLE CASE OF TAKING LOAN OR UNEXPLAIN ED MONEY ROUTED BY THE ASSESSEE THROUGH DIFFERENT NAMES. THE LEARNED CIT(A PPEALS) THOUGH POINTED OUT CERTAIN CIRCUMSTANCES GIVING RISE TO SUSPICION BUT THOSE ARE NOT STRONG ENOUGH TO CHARGE THE ASSESSEE WITH TAX ON THESE AMO UNTS. IN VIEW OF THE ABOVE DISCUSSION THE ADDITION MADE BY THE LEARNED COMMISSIONER IS NOT SUSTAINABLE AND WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.25 14 600. 20 11. NOW WE TAKE ITA NO.2127/DEL/09. THIS APPEAL HA S ARISEN FROM AN ASSESSMENT ORDER MADE UNDER SEC. 147 READ WITH SEC. 143(3) OF THE ACT. A NOTICE UNDER SEC. 148 WAS ISSUED UPON THE ASSESSEE ON 31.3.2006 FOR REOPENING OF THE ASSESSMENT. THE ASSESSING OFFICER HAS OBSERVED THAT AFTER PASSING ORDER UNDER SEC. 263 THE LEARNED CIT HAS I NFORMED THE ASSESSING OFFICER THAT ASSESSEE HAS TAKEN ADVANCES FROM EIGHT MORE PERSONS WHICH HAD WRONGLY BEEN SHOWN AS ADVANCES FOR SUPPLY OF GOODS. THIS LETTER WAS WRITTEN TO THE ASSESSING OFFICER BY THE LEARNED CIT ON 25.1 .2006. ON THE BASIS OF THIS LETTER ASSESSING OFFICER FORMED AN OPINION TH AT INCOME HAS ESCAPED ASSESSMENT AND ASSESSMENT DESERVES TO BE REOPENED B Y ISSUANCE OF A NOTICE UNDER SEC. 148 OF THE INCOME-TAX ACT 1961. 12. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE NOTICE UNDER SEC. 148 W AS ISSUED UPON THE ASSESSEE ON 31.3.2006 WHICH UNDISPUTEDLY WAS SERVED IN THE MONTH OF APRIL 2006 I.E. AFTER EXPIRY OF FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR. THE ASSESSMENT ORIGINALLY WAS MADE UNDER SEC. 143(3) ON 26.3.2004. THE INTERDICTION PROVIDED IN THE PROVISO APPENDED T O SEC. 147 PROHIBITS THE ASSESSING OFFICER HAS TO REOPEN AN ASSESSMENT BY I SSUANCE OF A NOTICE UNDER SECTION 148 IN THE CASES WHERE SECTION 143(3) ASSESSMENT WAS MADE AND 21 FOUR YEARS HAVE EXPIRED FROM THE END OF THE RELEVAN T ASSESSMENT YEAR. HE CAN REOPEN THE ASSESSMENT IF IT IS ESTABLISHED THAT INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REAS ON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS. THERE IS NO ALLEGATION BY THE ASSESSING OFFICER THAT ASSESSEE F AILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. THEREFORE HE IS NOT JUST IFIED TO REOPEN THE ASSESSMENT. WE ALLOW THE FIRST GROUND OF APPEAL RAI SED BY THE ASSESSEE AND QUASH THE REASSESSMENT ORDER. EVEN OTHERWISE THE AD DITIONS ON MERIT ARE SIMILAR TO THAT OF DECIDING IN THE APPEAL AGAINST T HE ORDER UNDER SEC. 263 OF THE ACT. THESE ARE THE AMOUNTS WHICH COULD NOT BE C ONSIDERED BY THE LEARNED CIT IN THE ORDER PASSED UNDER SEC. 263. THESE ARE S OUGHT TO BE ADDED BY REOPENING OF ASSESSMENT. IN VIEW OF OUR ORDER PASSE D IN THE APPEAL AGAINST 263 ORDER THESE ARE NOT SUSTAINABLE ON MERITS. 13. NOW WE TAKE ITA NO.2126/DEL/09. THE FACTS IN T HIS YEAR ARE SIMILAR TO THAT OF ASSESSMENT YEAR 2001-02. UNDER THE SIMIL AR CIRCUMSTANCES ADVANCES AGAINST PURCHASES OF RS.7 73 063 WAS AVAIL ABLE. THE RETURN WAS PROCESSED UNDER SEC. 143(1) ON 23.11.2001. ASSESSIN G OFFICER ON THE BASIS OF THE INFORMATION GIVEN BY CIT HAS ISSUED A NOTICE ON 31.3.2006 AND REOPEN THE ASSESSMENT. IN THE LINE OF LEARNED CITS ORDER PASSED UNDER SEC. 263 THE 22 ASSESSING OFFICER DISBELIEVED THE VERSION OF ASSESS EE THAT ADVANCES FROM 13 PARTIES WERE RECEIVED FOR SUPPLY OF GOODS. HE TREAT ED SUCH ADVANCES AS UNEXPLAINED CASH CREDITS AND MADE THE ADDITION OF R S.7 73 063. 14. BEFORE THE LEARNED CIT(APPEALS) IT WAS CONTEND ED BY THE ASSESSEE THAT NOTICE UNDER SEC. 148 WAS ISSUED ON 30.3.2006 AND POSTED IN THE POST OFFICE ON 31.3.2006 WHICH INDICATES THAT SERVICES M UST HAVE TAKEN PLACE AFTER IST OF APRIL 2006 THEREFORE IT IS A TIME BARRED NOTICE AND ASSESSMENT DESERVES TO BE QUASHED. ON MERIT ASSESSEE HAS REIT ERATED ITS CONTENTIONS AS WERE RAISED IN ASSESSMENT YEAR 2001-02. THE LEARNED CIT(APPEALS) REJECTED BOTH THE CONTENTIONS AND UPHELD THE ADDITION. 15. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED HIS CONTENTIONS AS WERE RAISED BEFORE THE LEARNED CIT(APPEALS) WHEREAS LEAR NED DR RELIED UPON THE ORDER OF THE LEARNED CIT(APPEALS). 16. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. IN THIS ASSESSMENT YEAR ORIG INALLY THERE WAS NO 143(3) ASSESSMENT MADE BY THE ASSESSING OFFICER. THE RETUR NS OF ASSESSEE WERE PROCESSED ONLY UNDER SEC. 143(1) OF THE ACT. THUS THE BENEFIT OF PROVISO APPENDED TO SEC. 147 WILL NOT BE AVAILABLE TO THE A SSESSEE IN THIS YEAR. THE LIMITATION FOR SERVICE OF NOTICE UNDER SEC. 148 PRO VIDED IN SEC. 149(1) 23 CONTEMPLATES THAT SUCH NOTICE CAN BE ISSUED UP TO S IX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IF INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT IS LIKELY TO AMOUNT TO RS.1 LAC OR MORE. IT INDICATES THAT IF THE INCOME LIKELY TO ESCAPE ASSESSMENT IS MORE THAN RS. 1 LAC THEN NOTICE UNDER SEC. 148 CAN BE ISSUED UP TO SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE RELEVANT ASSESSMENT YEAR ENDED ON 31.3.2006. THUS NOTICE CAN BE ISSUED UP TO 31.3.2007. THE NOTICE WA S ISSUED WELL WITHIN THE LIMITATION. THE INFORMATION RECEIVED FROM THE LEARN ED CIT EXHIBITING THE FACT THAT ASSESSEE HAS RECEIVED ADVANCE FOR SUPPLY OF GO ODS WERE IN FACT NOT THE ADVANCES RATHER CASH CREDITS TO OUR MIND CAN SUFF ICIENTLY AUTHORIZE THE ASSESSING OFFICER TO FORM AN OPINION THAT INCOME HA S ESCAPED ASSESSMENT AND HE IS JUSTIFIED IN REOPENING THE ASSESSMENT. FO R CONSTRUING THE FACT IN THIS MANNER WE ARE FORTIFIED BY THE DECISION OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF RAJESH JAVERI REPORTED IN 291 ITR 50 0. THE FIRST GROUND OF APPEAL IS REJECTED. 17. AS FAR AS THE ADDITIONS ON MERIT ARE CONCERNED THERE IS NO INDEPENDENT DISCUSSION BY THE LEARNED CIT(APPEALS). HE HAS SIMP LY OBSERVED THAT IN VIEW OF THE FINDINGS MADE BY THE LEARNED C.I.T WHIL E PASSING ORDER UNDER SEC. 263 HE HAS NO ALTERNATIVE BUT TO HOLD THE ADVA NCES RECEIVED BY THE 24 ASSESSEE FROM VARIOUS PARTIES NAMED IN THE ASSESS MENT ORDER AS NON- GENUINE AND UNEXPLAINED. WE HAVE ALREADY DELETED TH E ADDITION MADE BY THE LEARNED COMMISSIONER WHILE PASSING ORDER UNDER SEC. 263 WHILE DEALING WITH THE ISSUE IN ITA NO.835/DEL/09. THUS FOLLOWING OUR ORDER THE ADDITION MADE HEREIN ARE ALSO DELETED. 18. IN THE RESULT ITA NOS. 835 & 2126/DEL/09 ARE P ARTLY ALLOWED WHEREAS ITA NO.2127/DEL/09 IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 15.0 1.2010 ( R.C. SHARMA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/01/2010 MOHAN LAL COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR