The ACIT, 1 (2), v. Shri Sudesh Chawla,

ITSSA 221/IND/2008 | 2005-2006
Pronouncement Date: 31-03-2011 | Result: Allowed

Appeal Details

RSA Number 22122716 RSA 2008
Assessee PAN AAOPC3494N
Bench Indore
Appeal Number ITSSA 221/IND/2008
Duration Of Justice 2 year(s) 5 month(s) 30 day(s)
Appellant The ACIT, 1 (2),
Respondent Shri Sudesh Chawla,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 31-03-2011
Date Of Final Hearing 21-03-2011
Next Hearing Date 21-03-2011
Assessment Year 2005-2006
Appeal Filed On 01-10-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER IT(SS)A NOS.209 TO 215/IND/2008 A.YS. 2000-01 TO 2006-07 ACIT-1(2) BHOPAL APPELLANT VS PREM CHAWLA G-2/161 GULMOHAR COLONY BHOPAL PAN AAOPC 3494 N RESPONDENT IT(SS)A NOS.216 TO 222/IND/2008 A.YS. 2000-01 TO 2006-07 ACIT-1(2) BHOPAL APPELLANT VS SUDESH CHAWLA G-2/161 GULMOHAR COLONY BHOPAL PAN AAPPC 0132 J RESPONDENT 2 AND IT(SS)A NOS.223 TO 229/IND/2008 A.YS. 2000-01 TO 2006-07 ACIT-1(2) BHOPAL APPELLANT VS MRS. SARITA CHAWLA PROP. M/S. ANAND COATINGS BHOPAL PAN ADGPC 8831 N C/O MANOJ AYACHIT AYACHIT & ASSOCIATES CAS B-65 NANAK APARTMENTS KASTURBA NAGAR BHOPAL RESPONDENT APPELLANT BY : SH. KESHAVE SAXENA CIT(DR) RESPONDENT BY : S/SH. H.P. VERMA & GIRISH AGRAWAL O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THIS BUNCH OF 21 APPEALS IS BY THE REVENUE AGAINST THE THREE DIFFERENT COMMON ORDERS PASSED BY THE LEARNED CIT(A )-I BHOPAL ON 23.7.2008 IN THE CASES OF THREE DIFFERENT ASSESSEES FOR SEVEN ASSESSMENT YEARS FROM 2000-01 TO 2006-07. IN IT(SS)A NO.209/IND/2008 (AY 2000-01 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 3 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.9 04 325/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.46 117/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.36 568/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.8 74 400/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSIT. 6. DELETING THE ADDITION OF RS.6 79 875/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE ON PURCHASE OF LAND (INADVERTENTLY NOT TAKEN IN THE COMPUTATION OF INCOME). IN IT(SS)A NO.210/IND/2008 (AY 2001-02 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.16 51 109/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.70 666/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4 4. DELETING THE ADDITION OF RS.5 64 246/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.4 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSIT. IN IT(SS)A NO.211/IND/2008 (AY 2002-03 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.13 48 281/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.87 479/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.74 179/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.2 55 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. IN IT(SS)A NO.212/IND/2008 (AY 2003-04 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 5 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.36 60 042/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.1 10 800/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.1 43 436/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.6 52 100/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. IN IT(SS)A NO.213/IND/2008 (AY 2004-05 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.43 30 381/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.71 592/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.2 13 584/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6 5. DELETING THE ADDITION OF RS.18 52 520/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. 6. DELETING THE ADDITION OF RS.1 29 200/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED AGRICULTURAL INCOME. 7. DELETING THE ADDITION OF RS.12 92 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN AGRICULTURAL LAND. IN IT(SS)A NO.214/IND/2008 (AY 2005-06 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.84 28 373/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.1 36 538/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY (INADVERTENTLY MENTIONED AS RS.2 36 538/- IN CIT(A) ORDER). 4. DELETING THE ADDITION OF RS.3 21 472/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.2 95 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSIT. 7 6. DELETING THE ADDITION OF RS.7 45 520/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. 7. DELETING THE ADDITION OF RS.90 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY LAND. IN IT(SS)A NO.215/IND/2008 (AY 2006-07 IN CASE OF A CIT VS. PREM CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.84 75 319/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASE. 3. DELETING THE ADDITION OF RS.1 00 742/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.8 01 204/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.8 30 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSIT. 6. DELETING THE ADDITION OF RS.3 34 500/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. 7. DELETING THE ADDITION OF RS.90 00 000/- MADE BUY THE ASSESSING OFFICER ON 8 ACCOUNT OF UNEXPLAINED CASH FOUND DURING SEARCH. IN IT(SS)A NO.216/IND/2008 (AY 2000-01 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.18 60 766/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.38 397/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 4. DELETING THE ADDITION OF RS.34 370/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 5. DELETING THE ADDITION OF RS.2 06 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSIT (INADVERTENTLY MENTIONED AS RS.8 74 400/- IN THE CIT(A)R ORDER). IN IT(SS)A NO.217/IND/2008 (AY 2001-02 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 9 2. DELETING THE ADDITION OF RS.23 46 119/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.1 39 080/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 4. DELETING THE ADDITION OF RS.1 62 580/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.3 16 043/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6. DELETING THE ADDITION OF RS.10 01 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSITS. 7. DELETING THE ADDITION OF RS.3 40 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH PAYMENT FOR DD MADE FOR RELIANCE INDUSTRIES MUMBAI. IN IT(SS)A NO.218/IND/2008 (AY 2002-03 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.30 90 263/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.3 10 883/- MADE BY THE ASSESSING OFFICER ON ACCOUNT 10 OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 4. DELETING THE ADDITION OF RS.60 083/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.1 16 046/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. IN IT(SS)A NO.219/IND/2008 (AY 2003-04 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.38 49 640/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.2 10 358/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 4. DELETING THE ADDITION OF RS.73 556/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.1 22 787/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6. DELETING THE ADDITION OF RS.3 50 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSITS. 11 IN IT(SS)A NO.220/IND/2008 (AY 2004-05 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.1 01 87 492/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.4 48 509/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 4. DELETING THE ADDITION OF RS.96 058/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.4 30 290/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6. DELETING THE ADDITION OF RS.14 50 843/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSITS. 7. DELETING THE ADDITION OF RS.12 16 941/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. IN IT(SS)A NO.221/IND/2008 (AY 2005-06 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 12 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.1 14 88 340/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.3 97 786/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 4. DELETING THE ADDITION OF RS.72 147/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.2 46 215/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6. DELETING THE ADDITION OF RS.11 50 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN/SECURITY DEPOSITS. IN IT(SS)A NO.222/IND/2008 (AY 2006-07 IN CASE OF A CIT VS. SUDESH CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.1 54 78 476/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE PURCHASE. 3. DELETING THE ADDITION OF RS.5 43 299/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXCESSIVE FREIGHT & CARTAGES. 13 4. DELETING THE ADDITION OF RS.1 41 715/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED WAGES & SALARY. 5. DELETING THE ADDITION OF RS.7 44 200/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SALARY. 6. DELETING THE ADDITION OF RS.15 32 527/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAPITAL CONTRIBUTION. 7. DELETING THE ADDITION OF RS.1 29 54 943/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSION OF SALES FROM SUNDRY DEBTORS. 8. DELETING THE ADDITION OF RS.24 39 857/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESSIVE STOCK. IN IT(SS)A NO.223/IND/2008 (AY 2000-01 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. ACCEPTING THE INCOME FROM COMPUTER PROGRAMMING AT RS.89 500/- AS AGAINST ESTIMATION OF RS.1 00 000/- MADE BY THE ASSESSING OFFICER. IN IT(SS)A NO.224/IND/2008 (AY 2001-02 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 14 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. ACCEPTING THE INCOME FROM COMPUTER PROGRAMMING AT RS.83 400/- AS AGAINST ESTIMATION OF RS.1 20 000/- MADE BY THE ASSESSING OFFICER. 3. DELETING THE ADDITION OF RS.61 500/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT ON INTEREST BEARING ADVANCES. IN IT(SS)A NO.225/IND/2008 (AY 2002-03 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. ACCEPTING THE INCOME FROM COMPUTER PROGRAMMING AT RS.1 05 700/- AS AGAINST ESTIMATION OF RS.1 50 000/- MADE BY THE ASSESSING OFFICER. 3. DELETING THE ADDITION OF RS.38 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT ON INTEREST BEARING ADVANCES. IN IT(SS)A NO.226/IND/2008 (AY 2003-04 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 15 2. ACCEPTING THE INCOME FROM COMPUTER PROGRAMMING AT RS.1 15 350/- AS AGAINST ESTIMATION OF RS.1 50 000/- MADE BY THE ASSESSING OFFICER. 3. DELETING THE ADDITION OF RS.1 99 900/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT ON LOAN TO M/S. ATUL SOLVO. 4. DELETING THE ADDITION OF RS.20 00 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN AGRICULTURAL LAND. IN IT(SS)A NO.227/IND/2008 (AY 2004-05 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY ENHANCEMENT OF INCOME AT RS.1 75 000/- AS AGAINST RS.1 26 360/- ON ACCOUNT OF RETAIL TRADE. 3. DELETING THE ADDITION OF RS.1 87 500/- ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN AND SUNDRY CREDITOR. 4. REMITTING BACK THE MATTER OF ADDITION OF RS.1 51 775/- ON ACCOUNT OF UNEXPLAINED INCOME TO THE ASSESSING OFFICER TO RE- ADJUDICATE THE ISSUE. IN IT(SS)A NO.228/IND/2008 (AY 2005-06 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 16 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.19 68 730/- ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASES. 3. DELETING THE ADDITION OF RS.12 026/- ON ACCOUNT OF UNEXPLAINED FREIGHT EXPENSES. 4. DELETING THE ADDITION OF RS.43 492/- (INADVERTENTLY MENTIONED AS RS.3 492/- IN THE COMPUTATION OF THE ASSESSMENT ORDER) ON ACCOUNT OF UNEXPLAINED SALARIES. 5. DELETING THE ADDITION OF RS.8 73 364/- ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. IN IT(SS)A NO.229/IND/2008 (AY 2006-07 IN CASE OF A CIT VS. MRS. SARITA CHAWLA) THE REVENUE HAS RAISED THE FOLLOWING GROUN DS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN 1. QUASHING THE ORDER PASSED U/S 153A R.W.S. 144 OF THE I.T. ACT. 2. DELETING THE ADDITION OF RS.40 46 975/- ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASES. 3. DELETING THE ADDITION OF RS.16 978/- ON ACCOUNT OF UNEXPLAINED FREIGHT EXPENSES. 4. DELETING THE ADDITION OF RS.3 17 841/- ON ACCOUNT OF UNEXPLAINED SALARIES. 5. DELETING THE ADDITION OF RS.5 31 356/- ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. 17 2. DURING HEARING OF THESE APPEALS WE HAVE HEARD S HRI KESHAVE SAXENA LD. CIT(DR) FOR THE REVENUE AND SHR I H.P. VERMA ALONG WITH SHRI GIRISH AGRAWAL LD. COUNSEL FOR THE ASSESSEES. MOST OF THE ISSUES ARE COMMON AND THE REASON FOR MAKING THE ADDITION ON THE IMPUGNED ISSUES IS ALSO IDENTICAL THEREFORE THESE CAN BE DISPOSED OF BY A COMMON AND CONSOLIDATED ORDER. DETAILED PAPER BOO KS HAVE BEEN FILED BY THE ASSESSEES. THOUGH NUMBERS OF GROUNDS HAVE BE EN RAISED IN THESE APPEALS BUT THE FIRST COMMON GROUND RAISED BY THE REVENUE PERTAINS TO QUASHING THE ASSESSMENT ORDERS FRAMED U /S 153A/144 OF THE I.T. ACT 1961 FOR THE IMPUGNED ASSESSMENT YEARS. T HE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT A SEARCH AND SURVEY OPERATION U/S 132(1)/133 WERE CARRIED OUT IN THE AN AND GROUP CASES ACCORDINGLY NOTICE U/S 153A WAS ISSUED ON 22.3.200 6 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME IN THE PRESC RIBED FORM WITHIN THIRTY DAYS OF THE SERVICE OF THE NOTICE. AS PER THE REVEN UE NO RETURN WAS FILED WITHIN THE STIPULATED THIRTY DAYS. SUBSEQUENTLY TH E RETURN WAS FILED ON 7.9.2006 DECLARING INCOME OF RS.6 16 565/- INCLUDIN G UNDISCLOSED INCOME OF RS.4 50 000/-. THEREAFTER NOTICE U/S 143 (2) AND 142(1) ALONG WITH QUESTIONNAIRE WERE ARGUED TO BE ISSUED ON 7.9. 2007 REQUIRING THE ASSESSEE TO FILE RETURN AND ALSO REPLY TO THE QUERI ES RAISED IN THE QUESTIONNAIRE FIXING THE CASE FOR 25.9.2007. IT WAS SUBMITTED THAT ALL THE OPERATIONS WERE CARRIED OUT FROM THE PREMISES OF AN AND ORGANICS AND ALL 18 THE SELLING AND ADMINISTRATIVE EXPENSES WERE DEBITE D IN ALL THE CONCERNS SEPARATELY. THE CRUX OF ARGUMENTS IS THAT INSPITE O F REPEATED OPPORTUNITIES THE ASSESSEE DID NOT FURNISH THE REQ UISITE DETAILS THEREFORE THE ASSESSING OFFICER HAD NO OPTION BUT TO FRAME THE ASSESSMENT U/S 144 R.W.S. 153A OF THE I.T. ACT. REL IANCE WAS ALSO PLACED UPON THE DECISIONS IN SHIVNATH RAI HARNARAYA N (INDIA) LTD. VS. DCIT [304 ITR (AT) 271] (DEL) RAJNIK & CO. VS. ACI T (251 ITR 561) (AP) AND MS. SHYAM LATA KAUSHIK VS. ACIT (114 ITD 3 05) (DEL). 3. ON THE OTHER HAND THE CRUX OF ARGUMENTS ON BEHA LF OF THE ASSESSEE IS THAT NOTICE WAS ISSUED APPROXIMATELY AF TER ONE YEAR OF THE FILING THE RETURN THEREFORE THE DELAY WAS ATTRIBU TABLE ON THE DEPARTMENT. IT WAS FURTHER SUBMITTED THAT NECESSARY DETAILS WER E FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 153A AND THE COM PLIANCES WERE MADE FROM TIME TO TIME. IT WAS ALSO SUBMITTED THAT VERY SHORT TIME WAS GIVEN BY THE ASSESSING OFFICER AND THE RETURN WAS A CCOMPANIED WITH INCOME STATEMENT P & L ACCOUNT BALANCE-SHEET OF P ROP. CONCERN OF THE ASSESSEE I.E. M/S. ANAND PAINTS AND M/S. ANAND INDU STRIES ALONG WITH CERTIFIED AUDIT REPORT. IN NUTSHELL IT WAS SUBMITT ED THAT THE RELEVANT DETAILS/EXPLANATIONS WERE DULY FILED BY THE ASSESSE E THEREFORE THE ASSESSMENT SO FRAMED U/S 153A/144 OF THE ACT IS B AD IN LAW. A STRONG PLEA WAS RAISED THAT SINCE IT WAS A TIME-BARRING MA TTER THE SUFFICIENT TIME WAS NOT AFFORDED TO THE ASSESSEE AND THE ASSES SMENT WAS FRAMED 19 IN HASTE. RELIANCE WAS PLACED UPON THE DECISIONS IN CACHWALA GEMS VS. JCIT 288 ITR 10 (SC) RAGHUBAR MANDAL HARIHAR MAND AL VS. STATE (8 STC 770) (SC) LALCHAND BHAGAT AMBIKARAM VS. CIT ( 37 ITR 288) (SC) AND STATE OF ORISSA VS. MAHARAJA SHRI B.P. SINGH DE V (76 ITR 690) (DEL). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. UNDER THE AFOREMENTIONED FACTS NOW THE QUE STION ARISES WHETHER THE ASSESSMENT SO FRAMED CAN BE QUASHED ? B RIEF FACTS ARE THAT THE SEARCH AND SURVEY OPERATION U/S 132(1)/133 WAS CARRIED OUT IN ANAND GROUP OF CASES. NOTICE U/S 153A WAS ISSUED T O THE ASSESSEE ON 22.3.2006 REQUIRING THE ASSESSEE TO FILE THE RETURN IN THE PRESCRIBED FORM WITHIN 30 DAYS FROM THE SERVICE OF NOTICE. HOWEVER NO RETURN WAS FILED WITHIN THE STIPULATED PERIOD. SUBSEQUENTLY THE RE TURN WAS FILED ON 7.9.2006 DECLARING INCOME OF RS.6 16 565/- (INCLUDI NG THE UNDISCLOSED INCOME OF RS.4 50 000/-). THE RETURN WAS ACCOMPAN IED WITH INCOME STATEMENT PROFIT AND LOSS ACCOUNTS BALANCE-SHEET OF PROPRIETORY CONCERN OF THE ASSESSEE I.E. M/S ANAND PAINTS AND M /S ANAND INDUSTRIES ALONG WITH AUDIT REPORT DULY CERTIFIED BY THE CA. THEREAFTER NOTICE U/S 143(2) AND 142(1) ALONG WITH QUESTIONNAI RE WAS ISSUED TO THE ASSESSEE ON 7.9.2007 REQUIRING THE ASSESSEE TO FILE THE RETURN ALONG WITH THE REPLIES TO THE QUERY RAISED IN THE QUESTIONNAIR E FIXING THE CASE FOR 20 25.9.2007. THE CONTENTS OF THE QUESTIONNAIRE DATED 7.9.2007 ARE AVAILABLE AT PAGES 1 TO 3 OF THE ASSESSMENT ORDER. THEREAFTER THE ASSESSEE WAS CONTACTED AND REQUESTED TO FILE THE RE QUISITE REPLY IN RESPONSE TO WHICH THE REPRESENTATIVE OF THE ASSESSE E FILED REPLY OIN 5.10.2007 ALONG WITH PART DETAILS. SINCE THE REPLY WAS INCOMPLETE THE ASSESSEE WAS ASKED TO FILE THE REMAINING DETAILS LI KE STATEMENT OF AFFAIRS AND OTHER EVIDENCE. AS PER THE REVENUE NO DETAILS WERE FILED AND THE ASSESSEE DELIBERATELY AVOIDED THE PROCEEDINGS BY NO T FURNISHING THE REMAINING DETAILS/EVIDENCES AS PER REQUIREMENTS OF QUESTIONNAIRE DATED 7.9.2007. AS PER THE ASSESSMENT ORDER THE ASSESSE E WAS CONTACTED AND IMPRESSED UPON TO FILE THE NECESSARY DETAILS AN D EVIDENCE. AT THAT STAGE ALSO THE NECESSARY DETAILS IN PART WERE FILED . THE ASSESSEE WAS FINALLY ISSUED LETTER DATED 22.11.2007 REQUESTING T HE ASSESSEE TO FURNISH THE REMAINING REQUISITE DETAILS. THE ASSESSEE SOUG HT TIME BUT AS PER THE REVENUE DID NOT FILE THE DETAILS AND AGAIN THE PRO CEEDINGS WERE ADJOURNED TO 28.11.2007. AS PER THE REVENUE INCOM PLETE DETAILS WITHOUT SUPPORTING EVIDENCE WERE FILED. SINCE IT WAS A TIME BARRING MATTER THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 153A/14 4 OF THE ACT. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) QUASHED THE ASSESSMENT VIDE ORDER DATED 23.7.2008 WHICH IS UNDE R CHALLENGE BEFORE US BY THE REVENUE. UNDER THE FACTS NARRATED ABOVE WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED ASSESSING OFFIC ER WAS JUSTIFIED IN 21 FRAMING THE ASSESSMENT U/S 144 READ WITH SECTION 15 3A OF THE ACT AND AT THE SAME TIME THE LEARNED CIT(A) IS NOT JUSTIFIE D IN ANNULLING/QUASHING THE ASSESSMENT BECAUSE EVERY TIME IT IS NOT POSSIBL E TO WAIT FOR INDEFINITE PERIOD. THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) EVEN THOUGH DECIDED EACH AND EVERY ISSUE RAISED IN APPEAL ON MERITS BUT AS PER OUR CONSIDERED VIEW HE WAS NOT JUSTIFIE D QUASHING THE ASSESSMENT WITHOUT CONTRADICTING THE STAND/FACTS ME NTIONED IN THE ASSESSMENT ORDER. THEREFORE ON THIS ISSUE WE SET A SIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) QUASHI NG THE ASSESSMENT FRAMED U/S 144/153A OF THE ACT. THIS VI EW ALSO COVERS THE IDENTICAL GROUNDS RAISED IN THE REMAINING APPEALS B EFORE US. THIS GROUND OF THE REVENUE IS THEREFORE ALLOWED. 5. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.84 28 373/- MADE ON ACCOUNT OF UNEXPLAINED BOGUS PURCHASES. TH E LEARNED CIT DR CONTENDED THAT THE LEAD CASE IN THIS BUNCH OF APPEA LS IS ITA NO. 214/IND/2008 WHICH CAN BE TAKEN UP FIRST. THE LD. COUNSEL FOR THE ASSESSEE HAD ALSO NO OBJECTION. SINCE THE FACTS AR E IDENTICAL AND THE IDENTICAL GROUND RAISED IN ITA NO. 214/IND/2008 WIL L COVER MOST OF THE OTHER GROUNDS IN REMAINING APPEALS THEREFORE WE A LSO TEND TO DISPOSE OF THIS APPEAL FIRST. 6. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE I S THAT THE ADDITION WAS DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX 22 (APPEALS) WITHOUT APPRECIATING THE FACTS ON RECORD AS LUMPSUM DISALLOWANCES WERE MADE BY THE ASSESSING OFFICER AN D SETTLEMENT WAS MADE IN OTHER SISTER CONCERN CASES. LOTS OF ADJUSTM ENTS ARE IN CASH AND THE ADDITIONS WERE DELETED WITHOUT ASSIGNING ANY RE ASON. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE STRONGLY DEF ENDED THE IMPUGNED ORDER BY CONTENDING THAT NECESSARY DETAILS LIKE INC OME STATEMENT PROFIT AND LOSS ACCOUNT BALANCE-SHEET OF THE PROPRIETARY CONCERNS AUDITED BOOKS OF ACCOUNTS WERE FILED BEFORE THE ASSESSING O FFICER. THESE DETAILS/EVIDENCES WERE ALSO CLAIMED TO BE FILED ALO NG WITH THE RETURN. THE REMAINING DETAILS WERE FILED FROM TIME TO TIME BY THE ASSESSEE. THE USE OF THE WORD IN TRICKLING FORM USED BY THE ASSES SING OFFICER WAS STRONGLY OPPOSED BY THE ASSESSEE BY SUBMITTING THAT WHATEVER DETAILS WERE ASKED FOR WERE DULY FILED AND THE ASSESSEE ATT ENDED THE PROCEEDINGS ON VARIOUS OCCASIONS. 7. IT IS SEEN THAT THE ISSUE OF ALLEGED BOGUS PURCH ASES HAS BEEN DEALT WITH BY THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) (ISSUE NO. 2) FROM PAGES 5 TO 32 OF HIS ORDER AND E ACH ASSESSMENT YEAR HAS BEEN SEPARATELY DEALT WITH BY HIM. THE CONCLUSI ON DRAWN AT PAGES 31 AND 32 OF THE IMPUGNED ORDER IS REPRODUCED HEREU NDER :- I HAVE CONSIDERED THE DETAILED SUBMISSION OF THE ASSESSEE. I HAVE ALSO GONE THROUGH THE MATERIAL PLA CED BEFORE ME. I FIND THAT THE A.O. HAS NOT POINTED OUT THE SP ECIFIC ITEMS OF BILLS OR THE ENTRY OF PURCHASE IN THE ACCOUNT BO OKS WHICH IN HIS OPINION IS A NON-GENUINE. THE AD HOC DISALLOWA NCE MADE BY THE A.O. IS ALSO NOT PERMISSIBLE UNDER THE LAW. THIS IS A 23 CASE OF SEARCH. THE PURPOSE OF THE SEARCH IS TO COL LECT THE MATERIAL FROM THE ASSESSEE AND TO FIND OUT SUCH MAT ERIAL THE AMOUNT OF ESCAPED INCOME WHICH WAS NOT OFFERED IN T HE ASSESSMENT. FOR THE PURPOSE OF ASSESSMENT THE A.O . MAY MAKE FURTHER ENQUIRY FOR ASCERTAINING THE GENUINENE SS OF THE TRANSACTION S FROM THE SUPPLIER DIRECTLY BUT THE A. O. HAS NOT DONE SUCH ENQUIRIES. HE HAS ALSO NOT IDENTIFIED ANY MATERIALS WHICH MAY PROVE POSITIVELY THAT THE ASSESSEE HAS IN FLATED THE PURCHASE EXPENSES WITH A VIEW TO REDUCE THE PROFIT. IT APPEARS THAT IN ABSENCE OF ANY IDENTIFICATION OF ENTRIES T HE A.O. HAD PROCEEDED TO MAKE DISALLOWANCE ON ASSUMPTIONS AND PRESUMPTIONS CONJECTURE AND SURMISES UNIFORMLY IN ALL THE ASSESSMENT YEARS BY GIVING IDENTICAL REASONS IN ALL THE YEARS. THE GENUINENESS OF THE PAYMENTS TO THE PARTIES AGAI NST THE SUPPLIES AS REFLECTED IN THE LEDGER ACCOUNTS HAVE N OT BEEN DOUBTED. THAT THE SAID PAYMENTS ARE AGAINST THE PU RCHASE BILLS WHICH ARE ACCOUNTED FOR IN THE CREDIT SIDE OF THE PARTIES ACCOUNTS. THUS IN MY OPINION THAT AS THE A.O. IS NOT DOUBTING THE GENUINENESS OF THE PAYMENTS TO THE SAID PARTIES AGAINST THEIR SUPPLY BILLS THEN THERE IS NO JUSTIFICATION T O DOUBT THE GENUINENESS OF THE BILLS RAISED BY SUCH PARTIES. T HE ASSESSEE HAS ALSO EXPLAINED YEARWISE THE FACTS WITH RESPECT OF EACH AND EVERY TRANSACTION OF THE SUPPLY PARTIES IN RESPECT OF WHOM THE A.O. HAD MADE OBSERVATION. THE APEX COURT IN THE CA SE OF DHAKESHWARI COTTON MILLS LTD. VS. CIT REPORTED IN 2 6 ITR 775/783(SC) HELD THAT THE INCOME TAX OFFICER IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT TH E ASSESSMENT. CONSIDERING THE SUBMISSIONS MADE AND M ATERIAL PLACED BEFORE ME I FIND THAT THERE IS NO JUSTIFICAT ION IN MAKING AD HOC ADDITION OF 1/3 RD OF THE PURCHASES DEBITED BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT. I THEREF ORE DELETE THE ADDITION MADE AT RS. 904325 IN A.Y. 2000-01 RS . 1651109 IN A.Y. 2001-02 RS. 1348281 IN A.Y. 2002-03 RS. 3660042 IN A.Y. 2003-04 RS. 4330 381 IN A.Y. 2004-05 RS. 8428373 IN A.Y. 2005-06 & RS. 847 5319 IN A.Y. 2006-07. 8. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.1 36 538/- ON ACCOUNT OF UNEXPLAINED WAGES AND SALARY (INADVER TENTLY MENTIONED AS RS.2 36 538/- IN THE IMPUGNED ORDER) AND ADDITIO N OF RS.3 21 472/- ON ACCOUNT OF UNEXPLAINED SALARY. THE LEARNED CIT D R PLACED RELIANCE ON THE ASSESSMENT ORDER BY MENTIONING THAT THE REAS ONING MENTIONED 24 THEREIN IS BASED ON FACTS. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER BY ME NTIONING THAT THE NECESSARY DETAILS WERE DULY FILED BY THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. THE IMPUGNED ISSUE (MARKED AS ISSUE NOS. 3 AND 4) HAS BEEN DEALT WITH BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN DETAIL AT P AGES 32 TO 35 OF HIS ORDER. THE RELEVANT PORTION OF HIS ORDER IS REPROD UCED HEREUNDER :- THE APPELLANT HAS FURNISHED IN THE PAPER BOOK THE DETAILS OF SALARY PAYMENT LEDGER ACCOUNT. THE SAID PAYMENTS HAVE BEEN MADE TO THE ADMINISTRATIVE STAFF OF THE F ACTORY. COPIES OF VOUCHERS HAVE ALSO FILED IN THE PAPER BOO K. I FIND THAT THE PAYMENT OF SALARY IS PROPERLY SUPPORTED BY VOUC HERS THE PERSONS ARE IDENTIFIABLE AND THERE ARE SIGNATURES O F THE RECIPIENT. THE A.O. IN THE ORDER IS NOT REFERRING ANY INCRIMINATING DOCUMENTS FOUND IN THE SEARCH OR ANY OTHER MATERIAL S FOUND IN THE POST SEARCH ENQUIRY ON THE BASIS OF WHICH HE IS HOLDING THAT 1/3 RD OF THE EXPENSES ARE INFLATED. THE FINDINGS AND THE SPECIFIC ENTRIES HAVE BEEN POINTED OUT AS OF NON-GENUINE IN NATURE. THE DISALLOWANCE HAVE BEEN MADE ON AN ADHOC BASIS THAT TOO WITHOUT REFERENCE TO ANY INCRIMINATING MATERIALS FO UND IN THE SEARCH HENCE IN MY OPINION THERE IS NO JUSTIFICA TION IN MAKING SUCH ADHOC DISALLOWANCE. THE ITAT AHMEDABAD BENCH IN THE CASE OF MONARK FOODS PVT. LTD. VS. ACIT REPORTED IN 54 TTJ (AHD) 405 HELD THAT THERE IS NO JUSTIFICATION FOR S USTAINING ANY ADHOC OR LUMP SUM DISALLOWANCE OUT OF EXPENSES CLAI MED WHERE THE ACCOUNTS ARE AUDITED AND THE A.O. HAS NO T POINTED OUT THE SINGLE INSTANCE OF ANY ITEM NOT SUPPORTED B Y VOUCHERS. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND HAV ING SEEN THE ORDER OF THE A.O. I AM OF THE OPINION THAT DISA LLOWANCE MADE BY THE A.O. IS NOT SUSTAINABLE IN LAW AND THEREFOR E I DELETE THE ADDITION OF RS. 36568 IN A.Y. 2000-01 RS. 564246 I N A.Y. 2001- 02 RS. 74179 IN A.Y. 2002-03 RS. 143436 IN A.Y. 2 003-04 RS. 213584 IN A.Y. 2004-05 RS. 321472 IN A.Y. 2005-06 & RS. 801204 IN A.Y. 06-07. 10. THE NEXT GROUND PERTAINS TO DELETING THE AD DITION OF RS.2 95 000/- MADE ON ACCOUNT OF UNEXPLAINED LOAN/SECURITY DEPOSI T. THE CRUX OF 25 ARGUMENTS ON BEHALF OF THE REVENUE IS RELIANCE ON T HE ASSESSMENT ORDER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFEND ED THE IMPUGNED ORDER. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS DEALT WITH THIS ISSUED AT PAGE 36 OF THE IMPUGNED ORDER FOR VARIOUS ASSESSMEN T YEARS AND CONCLUDED AS UNDER :- (B) IN A.Y. 2000-01 THE A.O. HAS MADE ADDITION OF RS.874400. THE FINDINGS OF THE A.O. ARE THAT THE B ALANCE-SHEET SHOWS THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED SECURITY DEPOSITS FROM VARIOUS PERSONS WHO SE NAMES HE HAS GIVEN THE ASSESSMENT ORDER AND SAYS THAT THE GE NUINENESS OF THE TRANSACTION COULD NOT BE VERIFIED HENCE RS. 874 400 ARE TREATED AS UNEXPLAINED SECURITY DEPOSIT AND TAXED AS INCOME U/S 69 OF THE IT ACT. THE ASSESSEE HAS FILED THE STATUS OF SECUR ITY DEPOSIT FROM A.Y. 2000-01 TILL A.Y. 2006-07. THE SAID CHART IS A T PAPER BOOK IS PAGE NO. 22 RELATING TO A.Y. 2000-01. HE SUBMITTED THAT THE SECURITY DEPOSIT REDUCED FROM RS. 874400 TO RS. 275 000 IN A.Y. 2006-07. IT HAS BEEN SUBMITTED THAT THE ASSESSEE T HAT HE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SELLIN G OF PAINTS & SOLVENTS ETC. THE PARTIES WHICH HAVE BEEN MENTION ED BY THE A.O. IN HIS ORDER ARE THE RETAILER WHO ARE IN THE BUSINE SS OF PAINTS SOLVENTS ETC. THESE PARTIES ARE THE DEALERS OF THE ASSESSEE PURCHASING GOODS FOR THEIR TRADING PURPOSES FROM TH E ASSESSEE AND AS PER THE UNDERSTANDING THE SECURITY DEPOSITS ARE TAKEN FOR THE PURPOSE OF GIVING THEM A DEALERSHIP/STOCKISTSHIP. THE ASSESSEE SUBMITS THAT THIS IS A ACCEPTED TRADE PRACTICE. TH E ASSESSEE ALSO SUBMITTED THAT THE REDUCTION IN THE SECURITY DEPOSI TS IN THE SUBSEQUENT YEARS THAT FOR THE PURCHASES MADE BY THE M THE SECURITY DEPOSIT AMOUNT HAS BEEN APPROPRIATED AGAIN ST SUCH PURCHASES BY THEM AND NORMALLY THIS IS DONE WHEN TH E SAID PARTIES BECOME NO MORE INTERESTED IN THE DEALERSHIP. SOME OF THE PARTIES WHOSE BALANCE STILL REMAINS HAVE MAY BE SEEN FROM T HE CHART ARE STILL RETAINING THE DEALERSHIP OF THE ASSESSEE AND THEREFORE THE AMOUNTS ARE OUTSTANDING IN THEIR ACCOUNTS. THE ASSE SSEE SUBMITS THAT ALL THESE DEPOSITS ARE GENUINE THAT THE PARTIE S AS MAY BE SEEN FROM THE NAME ITSELF THAT THEY ARE THE TRADERS IN T HE BUSINESS OF PAINT SOLVENTS ETC. AND ARE FULLY IDENTIFIABLE TH E TRANSACTIONS ARE APPEARING IN THE REGULAR BOOKS OF ACCOUNTS OF THE A SSESSEE WHICH ARE ALSO DULY AUDITED BY THE AUDITORS AND THE SAID SECURITY DEPOSITS ARE NOT IN THE NATURE OF LOANS AND ADVANCES. THEY ARE DULY 26 REFLECTED IN THE BALANCE-SHEET FURNISHED ALONG WITH THE RETURN IN THE NORMAL COURSE IN ACCORDANCE WITH THE SECTION 139 OF THE I.T. ACT AND ALSO IN THE RETURN FILED IN COMPLIANCE TO NOTIC E U/S 153A OF THE I.T. ACT. THE ASSESSEE SUBMITS THAT IN THE SEARCH NO MATERIAL WAS FOUND SUGGESTING THAT THE SAID SECURITY DEPOSITS AR E NOT GENUINE AND THEY REPRESENT THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE SAID SECURITY DEPOSITS ARE FULLY ACCOU NTED DEPOSITS AND THEREFORE THE PROVISIONS OF SECTION 69 HAS NO APPLICATION. THE ASSESSEE FURTHER INVITED THE ATTENTION TO THE PROVI SIONS OF SECTION 292C OF THE IT ACT AND ASA PER THE SAID SECTION WH ERE ANY BOOKS OF ACCOUNTS OTHER DOCUMENTS ARE FOUND IN THE POSSES SION OR CONTROL OF THE ASSESSEE IN THE COURSE OF SEARCH THEN THEA.O . IS BOUND TO PRESUME THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS ARETRUE. THE ASSESSEE SUBMITS THAT IN THE BOOKS OF ACCOUNTS SHOWS THAT THESE ARE THE DEPSOITS RECEIVED AGAINST THE DEALERSHIP AND THEREFORE THE TRUTHFULNESS HAS TO BE ACCEPTED BY THE A.O. AS TRUE AS PER THE MANDATE OF SECTION 292 C OF THE IT ACT. THE FINDINGS OF THE A.O. ARE NOT BASED ON ANY INCRI MINATING MATERIALS FOUND IN THE SEARCH AND THE SAME ARE ALSO WITHOUT ANY ADVERSE EVIDENCE AGAINST THE ASSESSEE THEREFORE T HE SAME ARE NOT SUSTAINABLE IN LAW. CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND THE NATURE OF TRANSACTIONS I FIND NO JUSTIFICATION IN SUSTAINING ADDITION OF RS.874400 AND THEREFORE TH E ADDITION OF RS.874400 IS DELETED IN A.Y. 2000-01. IN A.Y. 2001-02 IN THIS ASSESSMENT YEAR THE A.O. MADE THE ADDITION OF RS. 200000 FOR THE ADVANCE AMOUNT AGAIN ST SALES IN THE ACCOUNT OF ASHA DEVI UDAIPUR AND ALSO RS. 200000 FOR THE ADVANCE AMOUNT AGAINST SALE IN THE ACCOUNT OF KRISHNA AGENC IES KOTA. THE COPY OF THE LEDGER ACCOUNT HAS BEEN FURNISHED AT PA PER BOOK PAGE NO. 133 TO 135. THE AMOUNT FROM ASHA DEVI WAS RECE IVED BY DEMAND DRAFT AND SUBSEQUENTLY THE GOODS WERE SOLD T O NEW RAMESH PAINTS UDAIPUR A CONCERN OF HER HUSBAND. THE SAID ADVANCE AMOUNT WAS THEREFORE ADJUSTED AGAINST THE SALES M ADE IN PREVIOUS YEAR RELEVANT TO A.Y. 2002-03. SIMILARLY FROM KRI SHNA AGENCIES KOTA ADVANCE MONEY WAS RECEIVED AGAINST SALES BY D EMAND DRAFTS AND WHICH ADVANCE MONEY WAS ADJUSTED IN THE A.Y. 20 02-03 AGAINST THE SALES MADE TO THE SAID PARTY. THEREFORE THE CO NTENTION OF THE ASSESSEE IS THAT THE ADDITIONS ARE WHOLLY UNJUSTIFI ED AND THEY DO NOT REPRESENT ANY LOAN. CONSIDERING THE SUBMISSION OF T HE ASSESSEE I FIND THAT THE ADDITION MADE BY THE A.O. AT RS. 4 LA CS IS NOT JUSTIFIED AND THEREFORE THE SAID ADDITION OF RS. 4 LACS IS DELETED IN A.Y. 2001- 02. 11. THE NEXT GROUND PERTAINS TO DELETING THE ADDITI ON OF RS.7 45 520/- MADE ON ACCOUNT OF UNEXPLAINED CAPITAL ADDITION. T HE LEARNED CIT DR SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. COUN SEL FOR THE 27 ASSESSEE DEFENDED THE IMPUGNED ORDER. BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE RELEVA NT PORTION OF THE IMPUGNED ORDER :- (H) IN THE A.Y. 2005-06 FOR THE UNEXPLAINED CAPITA L THE A.O. MADE THE ADDITION FOR RS.745520. THE BALANCE-SHEET OF THE ASSESSEE OF ANAND INDUSTRIES IS AT PAPER BOOK PAGE NO. 182. IN THIS BALANCE-SHEET IN THE CAPITAL ACCOUNT RS.745520 HAS BEEN SHOWN AS THE ADDITION DURING THE YEAR. IT IS THIS AMOUNT THE A.O. HAS ADDED IN A.Y 2005-06. THE DETAILED CAPITAL ACCO UNT IN THE BOOKS ANAND INDUSTRIES HAS BEEN PLACED AT PAGE NO.1 38 TO 142 OF THE PAPER BOOK. THE PERUSAL OF THE SAID CAPITAL ACCOUNT WOULD SHOW THERE ARE CREDIT ENTRIES PASSED THROUGH THE J OURNAL IN RESPECT OF EMI PAID TO GE COUNTRYWIDE. THE ASSESSE E CONTENDED THAT THE NATURE OF ENTRIES IS EXACTLY SAM E AS EXPLAINED HEREIN BEFORE IN THE A.Y. 2003-04 WHILE D EALING WITH THE ADDITION OF RS. 652100 THE JOURNAL ENTRIES REL ATING TO GE COUNTRYWIDE APPEARING ON THE CREDIT SIDE TOF THE CA PITAL ACCOUNT ARE VERIFIABLE FROM THE SAVINGS BANK ACCOUNT OF THE ASSESSEE WHICH HAS BEEN FURNISHED AT PAPER BOOK PAGE NO. 157 ALONG WITH THE PAPER BOOK RELATED TO THE ASSESSMENT YEAR 2005-06. THE OTHER CREDIT ENTRIES ARE THE TRANSFER OF FUNDS FROM THE OTHER UNITS ANAND PAINTS THE SAID CREDIT ENTRIES ARE VERI FIABLE FROM THE DEBIT ENTRIES APPEARING IN THE CAPITAL ACCOUNT OF T HE ASSESSEE IN THE UNIT ANAND PAINTS. THE ASSESSEE AT PAPER BOOK P AGE NO. 137 HAS FURNISHED THE COPY OF ACCOUNT IN THE BOOKS OFANAND PAINTS I HAVE CONSIDERED THE SUBMISSIONS OF THE ASS ESSEE I HAVE ALSO GONE THROUGH THE PAPERS AND OTHER MATERIA LS PLACED BEFORE ME. IN MY OPINION THE CREDIT ENTRIES APPEARI NG IN THE CAPITAL ACCOUNT OF ANAND INDUSTRIES ARE VERIFIABLE WITH THE CORRESPONDING ENTRIES IN THE OTHER ACCOUNT AS MENTI ONED BY THE ASSESSEE. AND THEREFORE THE ADDITION IN THE CAPITA L ACCOUNT OF RS. 745520 APPEARING IN THE BOOKS OF ANAND INDUSTRI ES IS NOT JUSTIFIED AND THEREFORE I DELETE THE ADDITION FOR RS.7452520 IN A.Y. 2005-06. 12. THE NEXT GROUND PERTAINS TO DELETING THE ADDITI ON OF RS.90 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPER TY/LAND. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE S EIZED DOCUMENT IS THE REGISTERED DEED AND NO LOOSE PAPERS WERE FOUND. OU R ATTENTION WAS INVITED TO PAGE 48 OF THE IMPUGNED ORDER. IT WAS P LEADED THAT RS.30 LACS 28 HAS TO BE REFLECTED IN THE BALANCE-SHEET AND THE CA SH ELEMENT OF RS.99 000/- WAS NOT EXPLAINED. IT WAS CONTENDED TH AT AN UNREASONED ORDER HAS BEEN PASSED BY THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS). ON THE OTHER HAND IT WAS SUBMITTED TH AT EACH AND EVERY DETAILS WERE FURNISHED BY THE ASSESSEE AND EXCEPT T HE SALE DEED NO OTHER PAPER WAS FOUND THEREFORE THE ADDITION WAS MADE BY THE ASSESSING OFFICER WITHOUT ANY REASON THEREFORE TH E IMPUGNED ORDER IS QUITE JUSTIFIED. 13. BEFORE COMING TO ANY CONCLUSION IT IS SEEN THA T THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AT PAGE 46 ONW ARDS HAS DEALT WITH THE ISSUE (ISSUE NO.10) AND THE DETAILS OF PAY MENTS MADE ON VARIOUS DATES WERE SHOWN IN THE CHART AVAILABLE AT PAGE 47 OF THE ORDER. THE CONCLUSION DRAWN IN THE IMPUGNED ORDER IS AS UN DER :- (B) THE A.O. SAYS IN HIS ORDER THAT HE ESTIMATES TH E TOTAL COST OF THE PROPERTY AT RS.9000000 AS AND AS RS. 30 00000 IS ALSO UNEXPLAINED THEREFORE HE MADE THE ADDITION OF RS.90 00000 BEING THE COST ASSUMED BY HIM. THE ASSESSEE SUBMITS THAT ACTUAL PURCHASE PRICE IS RS. 300000 WHICH IS SUPPORTED BY THE CEASED DOCUMENTS AND AS PER THE PROVISIONS OF SECTION 292C THE A.O. IS DUTY BOUND TO PRESUME THAT THE SAID COST IS TRUE. THERE IS NO MATERIAL FOUND IN THE SEARCH OR EVEN OTHERWISE IN T HE POST SEARCH ENQUIRY THAT THE ASSESSEE HAS PAID RS. 9000000 FOR THE PURCHASE OF PROPERTY. THE ADDITION HAS BEEN MADE SOLELY ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS AND WITHOUT ANY MATERI ALS TO SUPPORT SUCH ADDITION. I FIND THAT INVESTMENT OF R S. 3000000 AS REFLECTED IN THE CEASED DOCUMENTS IS AN EXPLAINED I NVESTMENT SUPPORTED BY THE PROPER DOCUMENTS AND THEREFORE THE ADDITION MADE BY THE A.O. AT RS. 9000000 IS NOT AT ALL JUSTI FIED IN A.Y. 2005-06 AND THEREFORE THE SAID ADDITION IS DELETED. 29 14. AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) DATED 23.7.2008 THE REVENUE IS IN FURTHER APPEAL BEFORE US. 15. IT WAS VEHEMENTLY ARGUED BY THE LEARNED CIT DR SHRI KESHAV SAXENA THAT EVEN WHILE DELETING THE ADDITION MADE ON MERIT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS RELIED UPO N VARIOUS DOCUMENTS AS MENTIONED BY HIM IN HIS APPELLATE ORDE R WHICH WERE NOT EVEN FILED BEFORE THE ASSESSING OFFICER. THUS THE RE WAS A CLEAR CONTRAVENTION TO RULE 46A. HE DREW OUR ATTENTION T O THE DETAILED OBSERVATION MADE BY THE ASSESSING OFFICER WITH REGA RD TO NON- COMPLIANCE OF VARIOUS NOTICES ISSUED U/S 142(1) OF THE ACT AND THE DETAILED QUESTIONNAIRE SENT BY THE ASSESSING OFFICE R REQUIRING THE ASSESSEE TO FILE NECESSARY DETAILS REQUIRED IN SUPP ORT OF VARIOUS EXPENDITURE INCURRED ON MANUFACTURING PROCESS VIS- -VIS SALARY AND OTHER OVERHEADS AS INCURRED DURING THE PROCESS OF M ANUFACTURING BY VARIOUS ASSOCIATED/SISTER CONCERNS OF THE ASSESSEE. OUR ATTENTION WAS ALSO DRAWN TO THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH WITH REGARD TO ACQUISITION OF PROPERTY WHICH WAS CLEARLY OBSERVED BY THE ASSESSING OFFICER AS HAVING NOT BEEN DISCLOSED ANYW HERE EITHER IN THE REGULAR BOOKS OF ACCOUNTS OR IN THE RETURN FILED BE FORE THE DEPARTMENT. THE INCRIMINATING DOCUMENTS WERE ALSO FOUND INDICAT ING THE AMOUNT PAID FOR ACQUISITION OF PROPERTY WHICH WERE FOUND TO BE OWN MONEY PAID OVER 30 AND ABOVE THE REGISTERED VALUE OF PROPERTY. AS PER THE LEARNED CIT DR INSPITE OF GIVING VARIOUS OPPORTUNITIES THE ASSESS EE COULD NOT SUBMIT ANY EXPLANATION/CLARIFICATION IN REGARD TO THESE IN CRIMINATING DOCUMENTS. AS PER THE LEARNED CIT DR EVEN THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AS WELL AS BOOKS OF ACCOUNTS WERE INQUIRED BUT THE ASSESSEE GROSSLY FAILED TO SUBMIT HIS EXPLANATION I N RESPECT OF THE QUERIES RAISED BY THE ASSESSING OFFICER. HE SUBMIT TED THAT UNDER THE PROVISIONS OF SECTION 153A OF THE ACT ONCE THE SEAR CH HAS BEEN COMPLETED ALL THE ASSESSMENTS DONE PRIOR TO IT WIL L BE ABATED. IN TERMS OF SECOND PROVISO TO SECTION 153A THE LEARNED CIT D R VEHEMENTLY ARGUED THAT EVEN IF THE SEIZED RECORDS INCLUDING TH E BOOKS OF ACCOUNTS ARE WITH THE ASSESSING OFFICER HE HAS ALL THE POWE RS TO ASK THE ASSESSEE TO EXPLAIN THE ENTRIES MADE THEREIN. THE LD. DR ALSO VEHEMENTLY EMPHASIZED THE PROVISIONS OF SECTION 144 OF THE ACT WHICH SPEAKS THAT IF THERE IS ANY FAILURE TO COMPLY WITH THE TERMS OF THE NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR FAIL S TO COMPLY WITH THE DIRECTION ISSUED UNDER SUB-SECTION (2A) OF THAT SEC TION THE ASSESSING OFFICER IS SUFFICIENTLY EMPOWERED TO PASS ORDER U/S 144 OF THE ACT. WITH REFERENCE TO THE STATUTORY PROVISION AS CONTAINED U NDER SUB-CLAUSE (B) OF SECTION 144 HE INVITED OUR ATTENTION TO THE CLEAR OBSERVATION MADE BY THE ASSESSING OFFICER TO THE EFFECT THAT THE ASSESS EE HAS NOT COMPLIED WITH THE NOTICES ISSUED U/S 142(1) OR THE DIRECTION ISSUED UNDER SUB- 31 SECTION (2A) OF SECTION 142. ACCORDINGLY HE ARGUE D THAT THE ASSESSING OFFICER WAS JUSTIFIED IN PASSING THE ORDER U/S 144. AS PER THE LEARNED CIT DR WHATEVER ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER WAS AS PER THE MATERIAL BEFORE HIM IN THE FORM OF SEIZED R ECORD AND BOOKS OF ACCOUNTS AND WHERE THE ASSESSEE COULD NOT EXPLAIN T HE ENTRIES MADE THEREIN EVEN AFTER ASKING BY THE ASSESSING OFFICER ON SO MANY OCCASIONS. HE ALSO DREW OUR ATTENTION TO THE DETAI LED FINDINGS RECORDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE DELETING THE ADDITION ON MERIT WHEREIN HE HAS STATED THAT THE AS SESSEE HAS PRODUCED VARIOUS DETAILS TO JUSTIFY ITS CLAIM THAT THE PURCH ASES WERE NOT BOGUS OR THAT CAPITAL SO INTRODUCED WAS JUST A TRANSFER ENTR Y THEREFORE NO ADDITION WAS WARRANTED. ALONG WITH THE OBSERVATION OF THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HE TOOK US TO THE ORDER OF THE ASSESSING OFFICER WHEREIN NO MENTION OF ANY SUCH DOCUMENT HAV ING BEEN FILED BEFORE HIM WAS MADE. HE THEREFORE ARGUED THAT WHA TEVER ADDITIONS HAVE BEEN MADE ON MERIT WERE DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN CONTRAVENTION TO RULE 46A I NSOFAR AS NO OPPORTUNITY WAS GIVEN TO THE ASSESSING OFFICER NOR ANY REMAND REPORT WAS SOUGHT. ON THE SHORT ARGUMENT OF VIOLATION OF RULE 46A HE CONTENDED THAT ALL THE ADDITIONS DELETED BY THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) DESERVE TO BE SET ASIDE AND TH E ASSESSING OFFICER SHOULD BE GIVEN OPPORTUNITY TO EXAMINE WHATEVER DOC UMENTS WERE FILED 32 BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) FOR THE FIRST TIME. 16. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASS ESSEE ARGUED THAT VARIOUS DETAILS CALLED FOR BY THE ASSESSING OFFICER WERE PRODUCED BY THE ASSESSEE EVEN THOUGH THE SAME HAVE BEEN STATED BY T HE ASSESSING OFFICER AS INCOMPLETE BUT WHATEVER INFORMATION DOC UMENT THE ASSESSEE WAS HAVING THE SAME WERE PRODUCED BEFORE THE ASSES SING OFFICER. OUR ATTENTION WAS DRAWN TO THE DETAILED OBSERVATIONS MA DE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR DELETING T HE ADDITION ON MERIT WHICH AS PER THE LD. COUNSEL FOR THE ASSESSEE WAS ALREADY IN THE RECORD OF THE ASSESSING OFFICER IN THE FORM OF SEIZED MATE RIAL FOUND DURING THE COURSE OF SEARCH AND THE SEIZED BOOKS OF ACCOUNTS. AS PER THE LD. COUNSEL FOR THE ASSESSEE ALL THE RELEVANT INFORMAT ION WAS ALREADY IN THE POSSESSION OF THE ASSESSING OFFICER AS THE SAME WAS SEIZED BY THE SEARCH PARTY AND WAS DULY INCORPORATED IN THE BOOKS OF ACCOUNTS AVAILABLE WITH THE ASSESSING OFFICER. ACCORDINGLY THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE WAS THAT NO ADDITIONAL EVIDENCE WAS RELIED UPON BY THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) FOR DELETING THE ADDITION ON MERIT AND WHATEVER DETAILS AND DOCU MENTS HE HAS REFERRED WAS ALREADY FORMING PART OF THE BOOKS OF A CCOUNTS WHICH WERE SEIZED FROM THE ASSESSEES BUSINESS PREMISES DURING THE COURSE ORF SEARCH. THE LD. COUNSEL FOR THE ASSESSEE WANTS US TO GO THROUGH THE 33 DETAILED PAPER BOOK FILED BEFORE THE BENCH WHICH CO NSISTED OF ALL THE DOCUMENTS FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE DELETING THE ADDITION ON MERIT. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE DETAILS PAPER BOOK FILED BEFORE US. FROM RECOR D WE FIND THAT AFTER THE SEARCH THE ASSESSING OFFICER REQUIRED THE ASSE SSEE TO FURNISH VARIOUS DETAILS TO EXPLAIN THE INCRIMINATING DOCUME NTS FOUND DURING THE COURSE OF SEARCH AND ALSO ENTRIES MADE IN THE BOOKS OF ACCOUNTS WHICH WERE SEIZED DURING THE COURSE OF SEARCH. WE ALSO F IND THAT DETAILED QUESTIONNAIRE WAS SENT BY THE ASSESSING OFFICER VID E LETTER DATED 7.9.2007 TO THE ASSESSEE/LD. COUNSEL FOR THE ASSESS EE BUT THERE WAS NO COMPLIANCE. EVEN WHERE THE ASSESSEE SUBMITTED THAT HE HAS FILED SOME DOCUMENTS THE SAME WERE NOT COMPLETE AS PER THE RE QUIREMENT OF THE ASSESSING OFFICER IN HIS QUESTIONNAIRE. RELEVANT O BSERVATION OF THE ASSESSING OFFICER IN THE CASE OF PREM CHAWLA READS AS UNDER :- THEREAFTER NOTICE U/S 143(2) AND 142(1) ALONG WIT H QUESTIONNAIRE WERE ISSUED TO THE ASSESSEE ON 08.09. 2007 REQUIRING HIM TO FILE THE RETURN AND ALSO REPLY TO THE QUERIE S RAISED IN THE QUESTIONNAIRE FIXING THE CASE FOR 25.09.2007. THE C ONTENT OF QUESTIONNAIRE LTD. 07.09.2007 IS AS UNDER :- 1. PLEASE FURNISH THE DETAIL OF YOUR COMPLETE FAMIL Y FREE ALONG WITH THEIR SOURCES OF INCOME AND PARTICULAR OF IT/WT RET URN FILED IF ANY. 2. PLEASE GIVEN THE DETAIL OF YOUR SOURCES OF INCOM E WITH BRIEF NOT AS TO THE ALL THE SOURCES OF INCOME. 3. PLEASE FURNISH THE STATEMENT OF AFFAIRS ON 31.03 .2004 & 31.03.2005 DEPICTING THE DETAIL OF ALL YOUR ASSETS (MOVABLE AND IMMOVABLE) LIABILITIES AND CAPITAL. 4. PLEASE FURNISH COPIES OF ALL THE BANK ACCOUNTS H ELD/OPERATED BY YOU IN YOUR NAME BUSINESS NAME AND IN THE NAME OF DEPENDENT FAMILY MEMBER. 34 5. DETAILS OF MAJOR EXPENDITURE/INVESTMENT MADE DUR ING THE YEAR ALONG WITH EVIDENCE AS TO THE SOURCES OF INVESTMENT . 6. WITH REGARD TO YOUR PROPRIETORSHIP/CONCERN M/S A NAND INDUSTRIES & M/S ANAND PAINTS YOU ARE REQUESTED TO FURNISH FO LLOWING DETAILS. I) SOURCES OF CAPITAL INTRODUCED DURING THE YEAR W ITH EVIDENCE II) MONTHWISE DETAIKLS OF PURCHASE & SALE ALONG WIT H QUANTITATIVE DETAILS. III) QUANTITATIVE AND VALUEWISE DETAIL OF OPENING S TOCK CLOSING STOCK AND WORK IN PROGRESS. IV) DEAIL OF MAJOR EXPENSES DEBITED TO TRADING & P& L A/C AND ALSO MENTION THE PAYMENT MODE TO CONNECTING PERSON U/S 4 0A(2)(B). V) CONFIRMATION FROM UNSECURED LOAN WITH EVIDENCES OF SOURCES OF LOAN RECEIVED DURING THE YEAR. VI) CONFIRMATION FROM SUNDRY CREDITOR & SUNDRY DEBT OR-ABOVE RS. 1 LAC 7. PLEASE STATE HOW YOU ARE ASSOCIATED WITH M/S D.K . TRADERS M/S L.P. TRADERS & M/S GANPATI ENTERPRISES AND M/S ATUL SOLVO CHEM. PLEASE STATE UNDER WHICH ENTITY INCOME ARISI NG FROM THESE ORGANIZATIONS HAVE BEEN DECLARED IN THE IT RETURNS. 8. PLEASE STATE HOW AND WHERE TRANSACTIONS UNDERTA KEN IN THE NAME OF M/S ANAND AGENCIES AND ITS BANK ACCOUNTS BY THE NAME OF M/S ANAND AGENCIES RAIPUR M/S ANAND AGENCIES INDORE M/S ANAND AGENCIES BHOPAL M/S ANAND AGENCIES GONDIA AND M/S ANAND AGENCIES LALITPUR ARE DECLARED IN THE I.T. R ETURNS. 9. DURING THE COURSE OF SEARCH PROCEEDINGS AT YOUR RESIDENTIAL/OFFICE PREMISES VARIOUS DOCUMENTS AND BOOKS OF ACCOUNTS W ERE SEIZED AS PER THE PANCHNAMA. YOUR REQUESTED TO THE RECONC ILE THE TRANSACTION MENTIONED IN THIS DOCUMENTS WITH YOUR B OOKS OF ACCOUNTS IF ANY MENTIONED BY YOU. PARTICULARLY YO U ARE REQUESTED TO EXPLAIN FOLLOWING TRANSACTIONS :- A) THIS REGISTER CONTAINS QUANTITATIVE DETAILS FOR THE PERIOD OF OCTOBER-4. B) THIS IS A BUNDLE CONTAINING 54 PAPERS REGARDING SALES FROM VARIOUS SALES DEPOT & STATIONS. PAGE 1 SHOWING DETAILS OF BALANCES AS ON 06.12.04 AND IN COLUMN 5 UNDER THE HEADING OF BH TOTAL SALE OF 14.9 7 LACS HAS BEEN WRITTEN WITH PENCIL AND IN COLUMN 6 TOTAL REAL IZATION 12.18 LACS HAS BEEN WRITTEN. ON PAGE 2 A SLIP REGARDING PAGE 1 IS ATTACHED. C) THIS IS LOOSE PAPER BUNDLE CONSISTING MAINLY DET AILS OF DEBTORS AT RAIPUR DEPOT DURING F.Y. 2001-02. HOWEVER ON P AGE 43 A CHART HAS BEEN PREPARED FOR THE MONTH OF DECISION. 2004 (01/12/04 TO 17/12/04) IN WHICH POSITION OF SUNDRY CREDITORS MENTIONING THE OPENING BALANCE PURCHASE CLOSING B ALANCE ON A PARTICULAR DATE. PLEASE EXPLAIN AND VERIFY FROM THE BOOKS OF ACCOUNTS AS TO WHETHER THESE ENTRIES TALLY WITH THE BOOKS OF 35 ACCOUNTS OR NOT. THE PAYMENTS MENTIONED IN THE CHA RT SHOWS THAT A TOTAL OF RS. 10 99 940/- WAS PAID DURING THI S PERIOD. D) FROM PAGE 47 TO 53 COPY OF REGISTERED DEED OF PU RCHASE OF HOUSE AT E-3/91 ARERA COLONY BHOPAL FOR RSA. 30 00 000/- BY SHRI PREM CHAWLA ON 30/11/04 THE A.O. MAY VERIFY THE SOURCES OF INVESTMENT IN THIS PROPERTY. E) NOTEBOOK HAVING 15 WRITTEN PAGES MAINTAINED BY S HRI H.K. BAJPAI FROM PAGE 1 TO 4 COLLECTION TARGET TO DIFFE RENT EMPLOYEES ARE MENTIONED. ON PAGE 5 DETAILS OF CONS TRUCTION SCHEDULE OF FACTORY PREMISES OF M/S ANAND COATING A RE GIVEN. ON PAGE 6 PAYMENTS MADE TO VARIOUS PARTIES ON ACCOU NT OF CONSTRUCTION AMOUNTING TO RS. 3 56 268/- AS ON 2/02 /2005 HAS BEEN NOTED. ON THE LEFT SIDE OF THIS NOTHING NAME OF THE CONCERN OF THE GROUP THROUGH WHICH THE PAYMENT IS TO BE MADE HAS BEEN MENTIONED. ON PAGE 7 EXPENSES ON RAW MATERIAL & PACKING MATERIAL ETC. FOR THE MONTH OF FEB. 2005 HAS BEEN MENTIONED. ON PAGE 9 & 10 THE DETAILS OF COLLECTION TARGET OF OUTSTANDING FROM VARIOUS PARTIES AND ACHI EVEMENT BY EMPLOYEES ARE MENTIONED. F) ON PAGE 29 IT IS SHOWN THAT THE BALANCE UPTO 05- 01-05 OF BHOPAL PARTY. IN THE REMAINING PAGES DETAILS OF DA TEWISE COLLECTION MADE BY THE RAM PRAKASH DWIVEDI IS GIVEN . G) THESE ENTITIES ARE NOTHING BUT BANK ACCOUNTS OPE RATED BY PREM CHAWLA OR HIS EMPLOYEES. NO RETURN OF INCOME ARE FILED IN THESE NAMES AND CERTAIN SALES ARE ROUTED THROUGH ANAND AGENCIES MENTIONED ABOVE. ONE ACCOUNT OF ANAND AGEN CIEDS WAS LOCATED IN PUNJAB NATIONAL BANK GOVINDPURA WHE RE THE AMOUNT OF RS. 22 LACS HAS BEEN DEPOSITED BETWEEN 1. 4.2004 TILL DATE OF SEARCH. H) SUNDRY CREDITORS OF RS. 22 44 362 IN THE BOOKS O F ANAND PAINTS AS ON 31.03.05 REQUIRES VERIFICATION RS. 10 64 226/- HAVE BEEN SHOWN AGAINST ANAND ORGANICS. I) IN THE LIST OF SUNDRY CREDITORS ASON 31.03.05 RS . 27 71 172 HAS BEEN SHOWN AGAINST ANAND AGENCIES RAIPUR. RS.20 36 044 AGAINSTG M/S NEPTUNE INDORE IN THE BOO KS OF ANAND INDUSTRIES TOTAL TRADE CREDITORS SHOWN AS ON 31.03.05 ARE AT RS.62 62 842/-. J) ANOTHER METHOD OF INFLATING THE COST IS BY DEBIT ING BOGUS PURCHASES OF RAW MATERIAL SPECIALLY PACKING MATERIA L. ON RANDOM CHECKING OF PURCHASE BILLS THE BILL AMOUNTIN G TO RS. 60 000/- DATED 5.08.04 ISSUED BY ONE ANIL AGENCIES OPPORTUNITY. SAIBABA DHAM PUTLIGHAR NO SUCH CONCER N WAS FOUND AT THE ADDRESS MENTIONED IN THE BILL. THIS SH OWS THAT THE PURCHASES CLAIMED BY THE ASSESSEE GROUP SHOULD BE V ERIFIED EXTENSIVELY TO FIND OUT THE CORRECT AMOUNT OF PURCH ASES. IN RESPONSE TO WHICH ASSESSEE DID NOT FILE ANY REPL Y NOR ADJOURNMENT WAS SOUGHT. 36 THE PROVISIONS OF SECTION 144 OF THE ACT ARE VERY C LEAR. CLAUSE (B) OF SUB-SECTION (1) OF SECTION 144 SPEAKS THAT IN CASE OF FAILURE OF THE ASSESSEE TO COMPLY WITH ALL THE TERMS OF THE NOTICE ISSUED UNDER SUB- SECTION (1) OF SECTION 142 OR FAILURE OF THE ASSESS EE TO COMPLY WITH THE DIRECTION ISSUED UNDER SUB-SECTION (2A) OF SECTION 142 THE ASSESSING OFFICER AFTER TAKING INTO ACCOUNT ALL THE RELEVANT MATERIAL WHICH IS IN HIS POSSESSION SHALL AFTER GIVING THE ASSESSEE AN OPP ORTUNITY OF BEING HEARD MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LO SS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE SUM PAYABLE BY THE ASSES SEE ON THE BASIS OF SUCH ASSESSMENT. SINCE THERE WAS A GROSS FAILUR E OF THE ASSESSEE TO COMPLY WITH ALL THE TERMS OF NOTICE U/S 142(1) AS R EPRODUCED BY THE ASSESSING OFFICER IN SO MANY PARAS OF HIS ORDER EV EN THE DETAILED QUESTIONNAIRE DATED 7.9.2007 SENT BY THE ASSESSING OFFICER WAS NOT REPLIED BY THE ASSESSEE OR EVEN IF REPLIED THE SAM E DID NOT CONTAIN THE FULL INFORMATION AS REQUIRED BY THE ASSESSING OFFIC ER. EVEN DURING THE COURSE OF HEARING THE BENCH ASKED THE LD. COUNSEL FOR THE ASSESSEE TO SUBMIT COPY OF REPLY FILED BEFORE THE ASSESSING OFF ICER ALONG WITH DETAILED EXPLANATION. HOWEVER NO SUCH REPLY WAS S UBMITTED BEFORE THE BENCH. UNDER THESE CIRCUMSTANCES THE ASSESSING OF FICER WAS PERFECTLY JUSTIFIED IN PASSING ORDER U/S 144 OF THE ACT AFTER GIVING SO MANY OPPORTUNITIES TO THE ASSESSEE. WE THEREFORE DO NO T FIND ANY MERIT IN THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) IN 37 QUASHING THE ASSESSMENT FRAMED U/S 153A READ WITH S ECTION 144 OF THE ACT. 18. NOW COMING TO THE MERIT OF THE ADDITION WHICH H AS BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF SEIZED MATERI AL AND ENTRIES IN THE BOOKS OF ACCOUNTS WHICH THE ASSESSEE GROSSLY FAILED TO EXPLAIN EVEN AFTER GIVING SO MANY OPPORTUNITIES BY THE ASSESSING OFFICER WE FIND THAT SO MANY DOCUMENTS WERE REFERRED TO BY THE ASSESSING OFFICER WHICH WERE QUESTIONED BY HIM DURING THE ASSESSMENT PROCEE DINGS AND THE ASSESSING OFFICER HAS ALSO RAISED QUERY WITH REGARD TO GENUINENESS OF VARIOUS ENTRIES OF EXPENDITURE FOUND RECORDED IN TH E SEIZED BOOKS OF ACCOUNTS AND ALSO WITH RESPECT TO VARIOUS DEPOSITS ALLEGED TO BE TAKEN FROM CONCERNS UNDER THE HEAD SECURITY DEPOSITS. THE VARIOUS CREDITORS WHICH WERE EXISTING IN THE BOOKS OF ACCOUNTS AND UT ILISED AS A SOURCE OF FUND WERE NOT SUBSTANTIATED BY THE ASSESSEE BY FIL ING CONFIRMATION OR THEIR WHEREABOUTS. RELEVANT OBSERVATION OF THE ASSE SSING OFFICER READS AS UNDER :- THE ANAND GROUP OF BHOPAL IS ENGAGED IN THE BUSINE SS OF MANUFACTURING AND SALE OF INDUSTRIAL SOLVENTS AND T HINNERS CONTROLLING THE MAJOR MARKET SHARE IN M.P. CHHATTI SGARH AND BORDERING DISTRICTS OF UP AND MAHARASHTRA. THE MAIN ALLEGATIONS LEADING TO ACTION U/S 132 AGAI NST THE GROUP IS SUMMARIZED IN THE PARA BELOW :- I) THE GROUP IS INVOLVED IN MANUFACTURING AND SALE OF INDUSTRIAL SOLVENTS AND THINNERS IN THE BRAND NAME ANAND. A MAJOR PORTION OF SALE IS NOT REFLECTED IN THE BOOKS OF AC COUNTS PRIMARILY TO EVADE THE EXCISE AND SALES TAX. 38 II) AFTER THE CREATION OF CHHATTISGARH STATE THEY H AVE FORMED SOME BOGUS FIRMS AT RAIPUR IN ORDER TO EVADE SALES TAX. FURTHER SALES ARE MAINLY MADE THROUGH SOME BOGUS CO NCERNS AND ONLY A SMALL PORTION OF SALE IS REFLECTED IN TH E BOOKS OF ACCOUNTS. DURING THE COURSE OF SEARCH IT WAS FOUND THAT THE A SSESSEE WAS CARRYING ON ITS MANUFACTURING OPERATIONS FROM THE PREMISES O F M/S ANAND ORGANICS BUT THE SELLING AND ADMINISTRATIVE EXPENSE S WERE DEBITED TO ALL THE CONCERNS SEPARATELY WHEREAS ALL THE FUNCTIONS A RE PERFORMED BY THE SAME EMPLOYEES. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT EXPLAIN SALARY PAID TO VARIOUS EMPLOYEES THEREFORE IT WAS NOT POSSIBLE FOR THE ASSESSING OFFICER TO FIND OUT WHET HER THE SAME EMPLOYEE WAS DRAWING SALARY FROM DIFFERENT SOURCES BUT RENDERING THEIR SERVICES TO ONE CONCERN. IN THESE CIRCUMSTANCES S INCE THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE COST OF RAW MATERIAL S USED IN MANUFACTURING PROCESS AS DEBITED IN P&L ACCOUNT AS WELL AS MANUFACTURING AND OTHER OVERHEADS INCURRED THEREON THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF 1/3 RD OF EXPENDITURE. THE ASSESSING OFFICER ALSO FOUND THAT THE ASSESSEE WAS ENGAGED IN THE MANUFACTURING OF PAINTS IN THE NAMES OF VARIOUS FIR MS WHEREIN ONLY NET PROFIT RATE OF 2% WAS SHOWN. EVEN AFTER ASKING BY THE ASSESSING OFFICER THE ASSESSEE DID NOT SUBSTANTIATE DETAILS OF THE CL AIM OF EXPENDITURE MADE IN THE BOOKS OF ACCOUNTS AS WELL AS IN THE PRO FIT AND LOSS ACCOUNT. IT WAS ALSO FOUND DURING THE COURSE OF ASSESSMENT T HAT MANY PARTIES 39 ACCOUNTS ARE COMING FROM EARLIER YEARS UNCHANGED. EVEN IN RESPECT OF SUCH LIABILITY THE ASSESSEE COULD NOT FILE ANY CON FIRMATION TO PROVE THAT THE SAME WERE GENUINE AND STILL OUTSTANDING. HE SU BMITTED THAT IN CASE OF OF PREM CHAWLA THERE WAS SECURITY DEPOSIT FROM 3 5 PARTIES BUT THE ASSESSEE FAILED TO FURNISH ANY OF THEIR CONFIRMATIO NS OR THEIR STATEMENT OF ACCOUNT IN THE BOOKS TO SUBSTANTIATE THAT THE CREDI TS SO RAISED WERE GENUINE CREDITS. THE ASSESSING OFFICER AT PAGE 5 PA RA 2 HAS STATED THAT THE ASSESSEE WAS REQUIRED TO FILE EVIDENCE IN RESPE CT OF THE SOURCE AND GENUINENESS OF THE ABOVE SECURITY DEPOSIT TRANSACT IONS. HOWEVER NO EVIDENCE IN TERMS OF BANK ACCOUNT OF SECURITY DEPOS IT AND THEIR INCOME TAX IDENTITY WAS FILED DUE TO WHICH THE GENUINENESS OF THE TRANSACTION COULD NOT BE VERIFIED. 19. IN THE NEXT PARA OF HIS ORDER THE ASSESSING OFF ICER HAS OBSERVED THAT DURING SEARCH VARIOUS DOCUMENTS WERE FOUND AND SEIZED. THE SAME WERE HAVING BEARING ON THE INCOME OF THE CURRENT FI NANCIAL YEAR WHICH WERE CONFRONTED TO THE ASSESSEE BY MENTIONING IN TH E QUESTIONNAIRE ISSUED U/S 142(1) DATED 31.8.2007 REQUIRING THE ASS ESSEE TO EXPLAIN/FILE THE REPLY INSPITE OF VARIOUS OPPORTUNITIES AFFORDE D AND EVEN AFTER LAPSE OF OVER THREE MONTHS NO EXPLANATION WAS FILED. IN THESE CIRCUMSTANCES THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S NO EXPLANATION TO OFFER AND THE DOCUMENTS HAVE TO BE UNDERSTOOD AND I NFERRED ON THEIR FACE VALUE WHICH WERE DULY ELABORATED BY THE ASSES SING OFFICER IN THE 40 NEXT PARA OF HIS ORDER. EVEN IN RESPECT OF THE DO CUMENTS FOUND WITH REGARD TO PURCHASE OF IMMOVABLE PROPERTY CERTAIN I NCRIMINATING DOCUMENTS WERE FOUND ALONG WITH SALE DEED INDICATIN G PAYMENT OF ON MONEY ON SUCH TRANSACTION WHICH THE ASSESSEE COULD NOT EXPLAIN AS HAVING BEEN RECORDED IN THE BOOKS OF ACCOUNTS NOR T HEIR SOURCE WAS EXPLAINED THEREFORE THE ASSESSING OFFICER HAS NO ALTERNATIVE BUT TO ADD THE SAME AS THE ASSESSEES INCOME. 20. NOW COMING TO THE OBSERVATION OF THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER FOR DELETING THE VARIOUS ADDITIONS MADE ON MERIT WE FIND THAT VARIOUS DOCUMENTS AND D ETAILS WERE REFERRED AND RELIED UPON BY THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) FOR DELETING THE ADDITIONS WERE NEVER FILED BEFORE THE ASSESSING OFFICER NOR THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ASKED FOR ANY REMAND REPORT FROM THE ASSESSING OFFICER. FURT HERMORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AT HIS OWN HAS NOT GIVEN ANY FINDING WITH REGARD TO CORRECTNESS OF THE ASSESSEE CLAIM OF EXPENSES AND THE ON MONEY PAID ON THE TRANSACTION OF IMMOVA BLE PROPERTY AS FOUND IN THE INCRIMINATING DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ALSO NOT GIVEN ANY FINDING WITH REGARD TO GENUINENESS OF THE SECUR ITY DEPOSITS AND THE VARIOUS CREDITS APPEARING IN THE BOOKS OF ACCOUNTS JUSTIFYING THEIR DELETION. EVEN WHILE DELETING THE HUGE ADDITION MA DE ON ACCOUNT OF 41 BOGUS PURCHASES THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN ANY POSITIVE FINDING TO JUSTIFY THE D ELETION. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MERELY ACCEPTE D THE ASSESSEES CONTENTION WITHOUT EXAMINING THEIR CORRECTNESS AND TRUTHFULNESS AND THE STATUTORY PROVISIONS WITH REGARD TO THESE PAYMENTS UNDER THE INCOME TAX ACT AND DELETED ALL THE ADDITIONS MADE BY THE A SSESSING OFFICER. IN THIS REGARD IT IS VERY PERTINENT TO MENTION THAT I N RESPECT TO SOME OF THE ADDITIONS THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSI NG OFFICER BY OBSERVING THAT MERELY CHEQUE PAYMENT WILL NOT SUFFICE THE ASS ESSEES PURPOSE OF CLAIMING GENUINENESS OF EXPENDITURE. ACCORDINGLY THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. THE LEARNED CIT DR SPECIFICALLY DREW OUR ATTENTION THAT SIMILAR OBSERV ATION MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN RES PECT OF OTHER ADDITIONS WHEREIN RATHER THAN RESTORING THE MATTER TO THE FILE OF THE ASSESSING OFFICER HE HAS DELETED THE ADDITION BY A CCEPTING THE VERSION OF THE ASSESSEE AT ITS FACE VALUE. 21. IN VIEW OF THE ABOVE WE ARE OF THE CONSIDERED OPINION THAT THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS DEVOID OF ANY MERIT WHICH DESERVES TO BE SET ASIDE. AS IT IS EVIDENT FROM THE ABOVE DISCUSSION THAT VARIOUS DOCUMENTS WERE SU BMITTED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LEARNED COMM ISSIONER OF INCOME 42 TAX (APPEALS) AND THE ASSESSING OFFICER HAS NOT GOT ANY OPPORTUNITY TO VERIFY THE SAME. IN THE INTEREST OF JUSTICE AND FA IR PLAY WE RESTORE THESE APPEALS BACK TO THE FILE OF THE ASSESSING OFFICER F OR DECIDING THE SAME AFRESH IN THE LIGHT OF OUR ABOVE DISCUSSION. WE DIR ECT ACCORDINGLY. 22. IN THE RESULT ALL THE APPEALS OF THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.3.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE DN/-