Shri Abdul Farid Khan, Vapi V. The Income tax Officer,Vapi Ward-1, Vapi

CO 139/AHD/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1339 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAGENDRA SINGH
• Keywords: Bogus purchase; Opportunity of being heard; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBE R, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 1339/AHD/2012 & C.O. NO.139/AHD/2012 ASSESSMENT YEAR :2009-10 INCOME-TAX OFFICER, VAPI WARD-1, VAPI SHRI ABDUL FARID KHAN, 14, COMMERCIALCOMPLEX, TRANSPORT NAGAR, N.H. NO.8, VILLAGE-MORAI, VIA. VAPI-396191 V/S . & SHRI ABDUL FARID KHAN, 14, COMMERCIALCOMPLEX, TRANSPORT NAGAR, N.H. NO.8, VILLAGE-MORAI, VIA. VAPI- 396191 INCOME-TAX OFFICER, VAPI WARD-1, VAPI PAN NO. AFOPK3861L (APPELLANT) .. (RESPONDENT) / BY REVENUE SHRI NAGENDRA SINGH, SR. D.R. /BY ASSESSEE NONE /DATE OF HEARING 18.11.2015 /DATE OF PRONOUNCEMENT 30.11.2015 O R D E R PER : SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER THESE TWO APPEALS OF WHICH ONE IS FILED BY REVENUE AND THE OTHER I.E. CROSS OBJECTION BY ASSESSEE ARE AGAINST THE ORDER O F CIT(A), VALSAD, DATED 30.03.2012 FOR THE ASSESSMENT YEAR 2009-10. ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAG ED IN THE BUSINESS OF TRADING OF KRAFT WASTE PAPER. ASSESSEE ELECTRONICA LLY FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 26.09.2009 DECLARING TOTAL INCO ME OF RS.7,65,840/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSES SMENT WAS FRAMED U/S.143(3) VIDE ORDER DATED 05.12.2011 AND THE TOTA L INCOME WAS DETERMINED AT RS.1,37,19,210/-. AGGRIEVED BY THE ORDER OF ASS ESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO VIDE ORDER DATED 30.03.2012 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY T HE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND ASSESSEE HAS ALSO FI LED THE C.O. THE GROUNDS RAISED BY THE REVENUE READS AS UNDER: (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN DIRECTING ASSESSING OFFICER TO ADOPT 2% NP. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,7 9,482/- MADE ON ACCOUNT OF DISALLOWANCE OF EXPENSES. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,6 5,560/- MADE ON ACCOUNT OF ADDITION UNDER THE PROVISION OF SECTION 68 OF THE IT ACT. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDEN CES WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE AO. ON THE OTHER HAND, THE GROUNDS RAISED BY ASSESSEE I N HIS C.O. READS AS UNDER: ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 3 1. I.T.O. HAS ERRED IN ALW AND ON FACTS TO DISALL OW ON ADHOC BASIS 15% OF PURCHASES OF RS.1,26,08,324/- AS BOGUS PURCHASES. LEARNED CIT (APPEALS) DELETED SUCH ADDITION BUT ESTIMATED N.P. OF RS.17,29,564/- ON ESTIMATE BASIS OF 2% AND THUS MADE ADDITION OF R S.8,98,436/-. 4. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED ON BEHALF OF ASSE SSEE. WE, THEREFORE, PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA ASSES SEE, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. THE 1 ST GROUND RAISED BY THE REVENUE AND THE GROUND RAISED BY ASSESSEE IN C.O. BEING INTERCONNECTED BEING IN RELA TION TO ADDITION ON THE BASIS OF 2% OF NET PROFITS ARE CONSIDERED TOGETHER. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VERIFICATION OF P&L ACCOUNT, ASSESSING OFFICER NOTICED THAT ASSESSEE HA S STATED TO HAVE MADE PURCHASE OF WASTE PAPER AMOUNTING TO RS.8,40,55,496 /-. THE ASSESSEE WAS ASKED TO FURNISH DETAILS SO AS TO PROVE THE GENUINE NESS OF THE PURCHASE. ASSESSING OFFICER NOTED THAT DESPITE VARIOUS OPPORT UNITY GRANTED BY HIM, ASSESSEE DID NOT PRODUCE THE PURCHASE BILLS FOR VER IFICATION BUT ONLY SUBMITTED THE BREAK UP OF PURCHASES AS URD PURCHASES AND RD P URCHASES. ASSESSING OFFICER, THEREFORE, CONCLUDED THAT IN THE ABSENCE O F DETAILS OF PURCHASES, ASSESSEE HAS FAILED TO SUBSTANTIATE THE GENUINENESS OF PURCHASE. HE ACCORDINGLY CONSIDERED 15% OF THE TOTAL PURCHASE AM OUNTING TO RS.1,26,08,324/- AS BEING NON GENUINE AND UNVERIFIA BLE AND ADDED THE SAME TO THE INCOME. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 4 THE MATTER BEFORE THE LD.CIT(A) WHO AFTER CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE DECIDED THE ISSUE BY HOLDING AS UNDER: 6. I HAVE PERUSED THE FINDINGS OF THE AO AND THE S UBMISSIONS MADE BEFORE ME BY THE APPELLANT. THE APPELLANT IS A TRAD ER IN WASTE PAPER AND IS PURCHASING THE WASTE PAPER AND OTHER SIMILAR SCRAPS FROM SMALL TIME VENDORS WHO ARE POPULARLY KNOWN AS RADDIWALLAS . SUCH RADDIWALLAS COLLECT WASTE ITEMS FROM DIFFERENT LOCA TIONS IN AND AROUND VAPI INDUSTRIAL TOWN AND FINALLY SOLD THE WASTE PAP ER SO COLLECTED TO THE MIDDLEMAN TRADERS LIKE THE APPELLANT. THE APPELLANT PURCHASE SUCH WASTE PAPER COLLECTED ON A DAY TO DAY BASIS, ACCUMU LATE THE SAME IN QUANTITIES AND THEREAFTER SELL THE SAME TO THE END USERS I.E PAPER MILLS. THE PAPER MILLS PURCHASES THESE ITEMS IN QUANTITIES FROM THE MARKET CONSISTING OF THE TRADERS LIKE THE APPELLANT AT THE FIRST LEVEL AND RADDIWALLAS IN THE SECOND LEVEL. THE PURCHASE PRICE OF WASTE PAPER IS FIXED BY THE GUJARAT PAPER MILLS ASSOCIATION (GPMA) AND AS POINTED OUT BY THE AO IN PARAGRAPH NO. 11 OF THE ASSESSMENT ORDER, THE RATE OF EACH TON OF WASTE PAPER IS AROUND RS.8OOO/- IN THE VAPI INDUSTRIAL TOWN WHERE THERE ARE 45 TO 50 SMALL SCALE PAPER MILLS. T HE PAPER MILLS ASSOCIATION FIXES UP SUCH PURCHASE PRICE TO HAVE A LEVEL PLAYING FIELD FOR THE MEMBERS BY ENSURING UNIFORM IMPACT OF COST OF RAW MATERIALS I.E. WASTE PAPER. THE WASTE PAPER TRADERS LIKE THE APPELLANT OBTAIN VAT REGISTRATION AND OTHER REQUIRED GOVERNMENT PERMISSI ONS AND DISCLOSE TO THE VAT DEPARTMENT THEIR TURNOVER AND OTHER DETAILS ON A REGULAR BASIS THROUGH MANDATORY VAT RETURNS AND THE VAT AUTHORITI ES MAKE AN ASSESSMENT UNDER THE VAT LAW AND DETERMINE THE TAX LIABILITY ON AN YEAR TO YEAR BASIS. 6.1 THE DISALLOWANCE WAS MADE BY THE AO MAINLY BECA USE THE APPELLANT COULD NOT PRODUCE PROPER EVIDENCES IN SUPPORT OF TH E TOTAL PURCHASES MADE AND ACCORDING TO THE AO THE NATURE OF WASTE PA PER BUSINESS ENABLES PAPER MILLS TO REDUCE THEIR INCIDENCE OF TA XATION. ADMITTEDLY THE NATURE OF BUSINESS AND ALL FACTUAL ASPECTS OF THE S AME HAVE BEEN DISCLOSED BY THE APPELLANT AND HAS NOT BEEN DISPUTE D BY THE AO. ALSO ADMITTEDLY THE AO HAS DOUBTED THE PURCHASES MADE BY THE APPELLANT BUT HAS NOT BROUGHT ON RECORD ANY INSTANCE OF WASTE PAPER PURCHASES MADE BY THE CUSTOMERS OF THE APPELLANT (PAPER MILLS ) AS BEING FOUND TO BE BOGUS OR INFLATED. THE AO HAS NOT DISPUTED THE N ATURE OF BUSINESS CARRIED OUT BY THE APPELLANT AND HAS NOT POINTED OU T ANY INSTANCE OF TAX PLANNING BY ANY PAPER MILLS SPECIFICALLY TO FORM AN OPINION AS SUCH. THE APPELLANT IS A TRADER IN AN UNORGANIZED SECTOR THE AO HAS NOT DOUBTED THE SALES FIGURE DISCLOSED BY THE APPELLANT. CONSID ERING THAT THE PAPER MILLS ASSOCIATION HAS FIXED THE PRICE FOR PURCHASES OF WASTE PAPER FROM THE TRADER THE SCOPE FOR MANIPULATED SALE PRICE IS NOT ESTABLISHED NOR CAN BE INFERRED. THERE IS NO CIRCUMSTANTIAL EVIDENC E TO CONCLUDE THAT THE WASTE PAPER SUPPLIER HAVE HIGHER THAN NORMAL GR OSS MARGIN ON SALES ONLY BECAUSE THEY PURCHASE FROM SMALL TIME SC RAP VENDORS. ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 5 6.2 FURTHER IT WAS ALSO BROUGHT TO MY NOTICE THAT I N THE CENTRAL CIRCLE, SURAT (DEALING WITH SEARCH ASSESSMENTS) SIMILAR CASES WER E ASSESSED DURING THE CALENDAR YEAR 2011 WHEREIN THE ASSESSING AUTHOR ITIES CONSIDERED ALL FACTS OF THE CASE WHICH IS VERY SIMILAR TO THE FACTS OF THE CASE OF THIS CASE AND HAVE ESTIMATED THE GROSS PROFIT AND MADE A N ADDITION OF 0.5% TO 0.75 % OF THE TURNOVER AS INCOME ON THE BASIS OF SAME FACTS AND ISSUES IN DISPUTE. 6.3 THE APPELLANT HAD FURNISHED QUANTITATIVE DETAI LS OF PURCHASES AND STOCK ALONG WITH THE TAX AUDIT RETURN AND HAS DISCLOSED A SUM OF RS. 20,72,841/-AS GROSS PROFIT WHICH WORKS OUT TO 2.40 % OF THE TOTAL TURNOVER. ON CONSIDERATION OF THE NATURE OF THE BUS INESS THE ASSESSING OFFICER DOUBTED THE PROFITABILITY OF THE TRADING RE SULTS OF THE APPELLANT. AS A RESULT THE AO COMPLETED THE ASSESSMENT BY DISALLO WING A PORTION OF THE PURCHASE VALUE OF THE APPELLANT. I AM OF THE CO NSIDERED OPINION THAT WASTE PAPER COLLECTION AND SUPPLYING THE SAME TO TH E TRADERS LIKE THE APPELLANT ARE CARRIED ON BY SMALL TIME COLLECTORS W HO BELONG TO UNORGANIZED POOR SECTION OF THE SOCIETY. I AGREE WI TH THE AO TO THE EXTENT THAT THE TRADERS LIKE THE APPELLANT SHOULD C OMPLY WITH THE PROVISIONS OF THE INCOME TAX LAW IN MAINTENANCE OF BOOKS OF ACCOUNT AND OTHER PARTICULARS REQUIRED FOR THE PURPOSES OF ASSESSMENT. IN THIS CASE CONSIDERING THE PECULIAR NATURE OF THE BUSINES S AND THE MODUS OPERANDI REQUIRED FOR CARRYING OUT THE BUSINESS, TH E INFERENCES HAVE TO BE DERIVED FROM ALL THE FACTS IN ENTIRETY. ADMITTED LY THERE IS NO DISPUTE AS REGARDS THE QUANTUM OF SALES. THERE IS NO POSSIB ILITY OF WASTE PAPER TRADERS LIKE THE APPELLANT ACTING AS CONDUITS FOR T AX PLANNING ON BEHALF OF THE PAPER MILLS. THE AO HIMSELF HAS OBSERVED THA T THE PURCHASE PRICE IS FIXED BY THE GPMA. THE TRADERS LIKE THE AP PELLANT ARE DEPENDENT UPON A FEW PAPER MILLS FOR THEIR BUSINESS . IN VIEW OF THIS FACTS I AM UNABLE TO AGREE WITH THE AO THAT AN ADHO C ADDITION OF 15% OF THE PURCHASE VALUE SHALL BE MADE THE DETERMINE T HE FAIR QUANTUM OF TAXABLE PROFIT. 6.4 AS POINTED OUT BY THE APPELLANT THE CENTRAL CIR CLE SURAT HAS COMPLETED THE ASSESSMENT OF SIMILAR TRADERS BY ESTIMATING THE GROSS PROFIT AND ENHANCED THE RATE BETWEEN 0.5% TO 0.75 % BEING THE FACTS SIMILAR TO THE APPELLANT. THIS INDICATES THAT THIS TRADING ACT IVITY IS HIGH VOLUME LOW MARGIN BUSINESS, I HAVE ALSO SPARED MY THOUGHTS ON VARIOUS ASPECTS OF THE BUSINESS ACTIVITIES SUCH AS I) WHAT ARE THE ITE MS COVERED UNDER THIS TRADE, II) SOURCE OF WASTE PAPERS AND OTHER ITEMS T RADED BY THE APPELLANT, III) HOW COST OF THE GOODS IS DETERMINED , IV) MODUS-OPERANDI OF THE TRADING ACTIVITIES, V) METHODS OF ACCOUNTING FOLLOWED AND VI) THE SALES -PURCHASE RATIO. I HAVE ALSO PERUSED THE COPY OF THE ASSESSMENT ORDER PASSED BY DY. CIT, CENTRAL CIRCLE - 3, SURAT IN THE CASE OF M/S. PAPER SALES CORPORATION WHEREIN THE AO HAD MADE G.P . ADDITION OF 0.50% TO 0.75%. THE MARKET RULE IN THIS TRADE IS TH AT AS THE TURNOVER INCREASES THE G.P./N.P. DECLINES MARGINALLY. CONSID ERING THE CASE IN TOTALITY AND THE NATURE OF TRADE, IT IS SAFE TO SAY THAT 15% MARGIN IN THIS TRADE IS NOT POSSIBLE. IN THIS CIRCUMSTANCES, FOR T HE SAKE OF JUSTICE AND FAIRNESS, I CONSIDER THE N.P. RATES SHOULD APPLY BE TWEEN 2-3 % DEPENDING ON THE TURNOVER, AS MENTIONED EARLIER, HI GHER THE TURNOVER, ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 6 THE GP/NP IS LOWER. IN THIS CASE THE APPELLANT HAD SHOWN GP/NP AT 2.2%/O.95% RESPECTIVELY. THUS, APPLYING THE GENERAL RULE, IN MY CONSIDERED VIEW, THE N.P. ESTIMATED AT 2% AS AGAINS T 0.95% DISCLOSED BY THE APPELLANT WILL MEET THE JUSTICE. ACCORDINGLY , THE AO IS DIRECTED TO ADOPT NP AT THE RATE 2% FOR DETERMINING THE TAXABLE INCOME IN THIS CASE. THIS GROUND OF APPEAL IS PARTLY ALLOWED . 5.2 AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE A ND ASSESSEE BOTH ARE IN APPEAL BEFORE US. 5.3 BEFORE US, LD. D.R. POINTED TO THE VARIOUS OBSE RVATIONS MADE BY THE ASSESSING OFFICER AND SUPPORTED THE ORDER OF ASSESS ING OFFICER. 5.4 WE HAVE HEARD LD. D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION ON ACCOUNT OF UNVERIFIABLE PURCHASES. IT IS UNDISPUTED FACT THAT ASSESSEE DID NOT PRODUCE THE COPY OF PURCHASE BILLS AND OTHER SUPPORTING DOCUMENTS BEFOR E THE ASSESSING OFFICER. FURTHER, THERE IS NOTHING ON RECORD TO SHOW THAT AS SESSEE HAD PRODUCED COPY OF PURCHASE BILLS AND OTHER DOCUMENTS BEFORE CIT(A) . IT IS ALSO A FACT THAT ASSESSING OFFICER ON ONE HAND HAS ACCEPTED THE SALE S ARISING OUT OF THE IMPUGNED PURCHASES AND ON THE OTHER HAND OUT OF THE TOTAL PURCHASES CONSIDERED 15% OF PURCHASES TO BE AS NON GENUINE. WE FIND THAT LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND THE ASSESSMENT ORDER PASSED IN THE CASE OF PAPER SALES CORPORATION, ANOT HER ASSESSEE, HAS ESTIMATED THE INCOME BY APPLYING THE NET PROFIT R ATE AT 2% FOR DETERMINING THE TAXABLE INCOME. WE ALSO FIND THAT LD. CIT(A ) FOR ARRIVING AT THE CONCLUSION OF 2% OF THE NET PROFIT RATE TO BE THE A PPROPRIATE RATE HAS NOTED THAT IN THE TRADE IN WHICH ASSESSEE IS ENGAGED, AS THE T URNOVER INCREASES, THE ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 7 G.P/NP DECLINES. BUT AT THE SAME TIME BEFORE US, TH ERE IS NOTHING ON RECORD TO DEMONSTRATE AS TO WHAT WAS THE TURN OVER AND THE NE T PROFIT OF THE ASSESSEE IN IMMEDIATELY PRECEDING AND SUBSEQUENT YEARS WHICH CO ULD DEMONSTRATE THE TREND OF NP/GP EARNED BY THE ASSESSEE IN THOSE YEAR S. WE ARE FURTHER OF THE VIEW THAT IN THE PRESENT CASE, IT WOULD NOT SERVE T HE PURPOSE IF THE MATTER IS REMANDED BACK TO DECIDE THE ISSUE FOR ESTIMATION OF INCOME AFRESH IN VIEW OF THE FACT THAT THE MATTER IS ALMOST FIVE YEARS OLD A ND WOULD RESULT INTO PROLONGING THE LITIGATION AND DELAY IN ATTAINING FI NALITY TO THE ISSUE AND MORE SO EVEN IN THAT CASE, THE INCOME WILL HAVE TO BE ESTIM ATED. CONSIDERING THE TOTALITY OF THE FACTS, WE ARE OF THE VIEW THAT IN T HE PRESENT CASE, THE ENDS OF JUSTICE SHALL BE MET IF THE INCOME IS ESTIMATED BY APPLYING THE NET PROFIT RATE OF 2.5% AS AGAINST 2% CONSIDERED BY THE CIT(A). WE THUS DIRECT ACCORDINGLY. THUS, THIS GROUND OF REVENUES APPEAL IS ALLOWED AN D ASSESSEES GROUND IS DISMISSED. 6. GROUND NO.2 IS WITH RESPECT TO DELETING THE ADDI TION OF RS.1,79,482/- UNDER THE HEAD INDIRECT EXPENSES. 6.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE PROFIT AND LOSS ACCOUNT, A.O NOTICED THAT ASSESSEE HAS DEBITED RS. 11,96,547/- AS INDIRECT EXPENSES. A.O NOTED THAT AS SESSEE DID NOT FURNISH ANY SUPPORTING EVIDENCE TO SUPPORT THE INCURRING OF EXP ENSES. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MA TTER BEFORE THE CIT(A) WHO DELETED THE ADDITION BY HOLDING AS UNDER: ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 8 8. I HAVE PERUSED THE FINDINGS OF THE AO AND THE S UBMISSIONS MADE BEFORE ME BY THE APPELLANT. ADMITTEDLY THE AO HAS NOT REJECTED THE BOOKS RESULT AS DISCLOSED BY THE APPELLANT. EXPENSES CAN NOT BE DISALLOWED IN AN ADHOC BASIS. THE AO NOT RECORDED ANY CONCRETE FIND ING FOR THE DISALLOWANCE MADE. I ALSO FIND MERIT IN THE DECISION OF THE HON ORABLE JURISDICTIONAL HIGH COURT AS RELIED UPON BY THE APPELLANT. MOREOVER, W HILE DEALING WITH THE GROUND NO.1 ABOVE THE AO IS DIRECTED TO ADOPT 2% NP IN THIS CASE. HENCE, THE DISALLOWANCE RAISED IN THIS GROUND WILL AMOUNT TO DOUBLE DISALLOWANCE IF ADHOC DISALLOWANCE IF CONFIRMED. THEREFORE, THE AO IS DIRECTED TO DELETE THE DISALLOWANCE MADE ON PRESUMPTIVE BASIS AND THIS GRO UND OF APPEAL IS ACCORDINGLY ALLOWED . 6.2 AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NO W IN APPEAL BEFORE US. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF ASSESSIN G OFFICER. 6.3 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HA S NOTED THAT SINCE HE HAD DIRECTED THE ADOPTION OF NET PROFITS @ 2% FURTHER A DHOC DISALLOWANCE WOULD RESULT INTO DOUBLE DISALLOWANCE. BEFORE US, APART F ROM OTHER FINDINGS, THE OBSERVATION AND FINDING OF CIT(A) OF DOUBLE DISALLO WANCE HAS ALSO NOT BEEN CONTROVERTED BY THE REVENUE. IN VIEW OF THESE FACT S, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS, THIS GRO UND OF REVENUES APPEAL IS DISMISSED. GROUND NOS. 3 & 4 ARE CONNECTED AND ARE WITH RESPE CT TO DELETING THE ADDITION OF RS.1,65,560/- U/S.68 OF THE ACT. ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 9 7. ASSESSING OFFICER, ON PERUSING THE BALANCE SHE ET, NOTICED THAT ASSESSEE HAS ACCEPTED ADVANCES AGAINST SALES AMOUNT ING TORS.1,65,560/-. ASSESSING OFFICER NOTED THAT IN THE ABSENCE OF CONF IRMATION FROM THE PERSONS, THE EXPLANATION OF ASSESSEE THAT THE AMOUNT REPRESE NTED EXCESS AMOUNT RECEIVED FROM SUPPLIERS, WAS NOT FOUND ACCEPTABLE. HE, ACCORDINGLY, CONSIDERED THE AMOUNT TO BE CASH CREDIT U/S.68 OF T HE ACT AND ADDED IT TO THE INCOME. 7.1 AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A). CIT(A) DELETED THE ADDIT ION BY HOLDING AS UNDER: 8. I HAVE PERUSED THE FINDINGS OF THE AO AND THE S UBMISSIONS MADE BEFORE ME BY THE APPELLANT. ADMITTEDLY THE ADDITIO N WAS MADE BY THE AO IN THE ABSENCE OF CONFIRMATION FROM THE OPPOSITE PARTY . NOW BEFORE ME THE APPELLANT HAD FILED A CONFIRMATION FROM THE PARTIES WHEREIN THE PARTIES CONFIRMED THEIR ACCOUNT WITH THE APPELLANT. SINCE THE OPPOSITE PARTY HAS CONFIRMED TO GIVE THE SAID SUM TO THE APPELLANT, TH E ADDITION MADE BY THE AO IN THIS REGARD IS DIRECTED TO BE DELETED. THE APPE LLANT SUCCEEDS IN THIS GROUND OF APPEAL. 7.2 BEFORE US, LD. D.R. SUPPORTED THE ORDER OF ASSE SSING OFFICER. 7.3 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. WE FIND THAT CIT(A) BY DELETING THE ADDITION HAS NOTED THAT ASSESSEE HAS FILED CONFIRMATION OF THE PARTIES AND HE, THEREFORE, DIRE CTED THE DELETION OF ADDITION. WE ALSO FIND THAT LD. CIT(A) IN PARA 8.1 OF THE ORD ER HAS NOTED THAT BEFORE THE ASSESSING OFFICER, ASSESSEE HAD FILED THE COPY OF L EDGER ACCOUNTS OF THE ITA NOS. 1339/AHD/2012 & C.O. NO.139/AHD/12 A.Y. 09 -10 (ITO VS. SHRI ABDUL FARID KHAN) PAGE 10 PARTIES. BEFORE US, REVENUE HAS NOT PLACED ANY MAT ERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CIT(A). WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS, GROUND OF REVENU ES APPEAL IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PA RTLY ALLOWED AND C.O. OF ASSESSED IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30 TH NOVEMBER, 2015 SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD: DATED 30/11/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / APPELLANT !'# / RESPONDENT $ %&%'( # # ) / CONCERNED CIT 4 # # )- / CIT (A) , -./# !00'(1 # # '(1 23& / DR, ITAT, AHMEDABAD 4 /56 78 / GUARD FILE. BY ORDER/ 1 /2# % # # '(1 23&