Shri Suneet Kumar Rastogi, Surat V. The Income Tax Officer-VI(4), Lucknow

CO 14/LKW/2012

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4199 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Principle of natural justice; Set aside
• Section: 133(6); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER. ITA. NO.472/LKW/2011 (ASSESSMENT YEAR:2008-09) INCOME TAX OFFICER-VI(4), LUCKNOW APPELLANT VS. SHRI SUNEET KUMAR RASTOGI PROP. M/S RACHNA SAREE, 301/11, 1 ST FLOOR, KOTWALI ROAD, CHOWK, LUCKNOW RESPONDENT & C.O. NO.14/LKW/2012 (IN ITA. NO.472/LKW/2011) (ASSESSMENT YEAR:2008-09) SHRI SUNEET KUMAR RASTOGI PROP. M/S RACHNA SAREE, 301/11, 1 ST FLOOR, KOTWALI ROAD, CHOWK, LUCKNOW APPELLANT VS. INCOME TAX OFFICER-VI(4), LUCKNOW RESPONDENT PAN: AFVPR4656P / BY REVENUE : SHRI JAMES KURIAN, SR. D.R. / BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 2 /DATE OF HEARING : 22.07.2016 /DATE OF PRONOUNCEMENT : 09.09.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THESE TWO APPEALS OF WHICH ONE IS FILED BY REVENUE AND THE OTHER APPEAL I.E. CROSS OBJECTION BY ASSESSEE A RE AGAINST THE ORDER OF CIT(A)-II, LUCKNOW, DATED 14.05.2011 F OR A.Y. 2008-09. 2. IN ITA NO.472/LKW/2011, REVENUE HAS FILED THE AP PEAL ON FOLLOWING GROUND: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-II , LUCKNOW HAS ERRED IN LAW AND ON FACT IN FAILING TO APPRECIATE THAT NOTICES U/S 133(6) ISSUED THE SUNDR Y CREDITORS AT THE ADDRESSES PROVIDED BY THE ASSESSEE WERE RETURNED UNNERVED. THE ASSESSEE ALSO DID NOT PRODUCE THESE CREDITORS BEFORE THE A.O. IN THESE CIRCUMSTANCES THE A.O. WAS JUSTIFIED IN ADDING BACK THE CREDITORS TO THE INCOME OF THE ASSESSEE AS BEIN G BOGUS AND BEING NOTHING BUT THE ASSESSEES OWN MONEY BEING INVESTED IN THE BUSINESS IN THE GRAB OF CREDITORS. 3. ASSESSEE HAS FILED RETURN OF INCOME FOR A.Y. 2008-0 9 SHOWING TOTAL INCOME OF RS.1,28,390/-. ASSESSMENT WAS COMPLETED BY CONCERNED ASSESSING OFFICER ON INCOME OF RS.27,18,500/- VIDE ORDER U/S.143(3) OF THE ACT. A GGRIEVED BY SAME, MATTER WAS CARRIED BEFORE THE FIRST APPELL ATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND CIT(A) GRANTED RELIEF TO ASSESSEE. ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 3 3.1 ASSESSING OFFICER MADE ADDITION OF RS.1,58,55,4 54/- BY ADDING BACK ALL SUNDRY CREDITORS TO THE INCOME OF A SSESSEE. ASSESSING OFFICER MADE ABOVE SAID ADDITION BY OBSER VING AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSES SEE WAS ASKED TO GIVE THE DETAILS OF SUNDRY CREDITORS. IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED THE LIST O F SUNDRY CREDITORS. NOTICES UNDER SECTION 133(6) OF THE I.T.ACT, 1961 WERE ISSUED SO AS TO VERIFY THE SUNDR Y CREDITORS. BUT THE NOTICES WERE RECEIVED BACK UN-S ERVED. THEREAFTER THE ASSESSEE HAS PRODUCED TWO PARTIES OU T OF SUNDRY CREDITORS WHOSE STATEMENTS WERE RECORDED, BU T THEY DID NOT AGREE WITH THEIR CLOSING BALANCES IN T HE BOOKS OF ACCOUNTS OF THE ASSESSEE. THEREFORE GENUINENESS OF THE SUNDRY CREDITORS COULD NOT BE VERIFIED. HENCE AMOUNT OF RS.1,58,55,454/- IS B EING ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE CIT(A), ASSESSEE RELIED UPON THE STATEMEN T OF FACTS FILED ALONG WITH THE MEMO OF APPEAL, WHICH AR E AS UNDER: THE APPELLANT IS AN 'INDIVIDUAL' BY STATUS, WHICH STARTED THE BUSINESS OF TRADING OF CHIKEN GARMENTS AFTER PU RCHASE FROM THE LOCAL CRAFTSMEN AND SELLING IN ORGANIZED S ECTOR IN THE YEAR 2002-2003.25.09.2002 DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS , WHICH HAD BEEN INITIATED BY ISSUE OF NOTICE UNDER S ECTION 143(2) BY THE ITO, RANGE-II(3), LUCKNOW AND LATER O N TAKEN UP AND CONTINUED BY THE LD. ITO-VI(4), IN THE VERBATIM OF LD 'ITO' ' THE ASSESSEE PRODUCED COPY O F AUDIT REPORT ALONGWITH ANNEXURE, COPIES OF BANK STATEMENT , COPY OF VARIOUS LEDGERS AND OTHER RELEVANT DOCUMENT S /DETAILS & BILLS AND VOUCHERS WHICH WERE EXAMINED A ND PLACED ON FILE. BOOKS OF ACCOUNT WERE ALSO PRODUCED , EXAMINED AND TEST CHECKED'. ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 4 AFTER RECORDING THE ABOVE OBSERVATION AND ACCEPTING THE BOOKS OF ACCOUNT, THE LD 'ITO' HAS ADDED THE AMOUNT OF SUNDRY CREDITORS APPEARING ON THE LIABILITY SIDE OF THE BALANCE SHEET AMOUNTING TO RS. 158,55,454.00 WITHOU T APPRECIATION THE FOLLOWING FACTS BEFORE HIM AND THE FACTS APPLICABLE IN THIS LINE OF BUSINESS. THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF A CCOUNT AND GET HIS ACCOUNTS AUDITED U/S 44AB OF THE ACT AN D THE SAME WERE ACCEPTED BY THE LD 'ITO'. THAT THE ASSESSEE IS A TRADER IN CHIKEN GARMENTS AN D PURCHASES THE GOODS FROM THE LOCAL KARIGARS AND SEL L IT TO OUTSTATION CUSTOMERS OF DELHI, MUMBAI, BANGLORE ETC . THE PAYMENTS FROM THE PARTIES ARE RECEIVED THROUGH ACCO UNT PAYEE CHEAQUES. THAT THE PURCHASE FROM THE KARIGAR WERE PROPERLY RECORDED IN THE PURCHASE REGISTER SHOWING THE NAME OF THE KARIGAR, QUANTITY, RATE, TOTAL AMOUNT OF PURCHASE D ULY VERIFIED BY THE SAID KARIGAR WITH HIS SIGNATURE. TH E LD 'ITO' HAD ACCEPTED THE WHOLE OF PURCHASE RECORDED I N THE BOOKS OF ACCOUNT. THAT THE ASSESSEE IS MAINTAINING QUANTITATIVE TALLY OF ALL ITS STOCK AND IS ALSO EVIDENCED FROM THE OBSERVATIO N RECORDED ON FORM 3CD COLUMN NO. '28 A'. THAT THE ASSESSEE DIRECTLY DEALS WITH THE 'KARIGARS ' WHO ARE NOT VERY LITERATE AND RUNS THEIR LIVELIHOOD BY DISCOUNTING THEIR TALENT. DESPITE THE ABOVE FACT THE LD. 'ITO' HAD FOR VERIFI CATION OF SUNDRY CREDITORS, ISSUED 133(6) TO THREE PARTIES OU T OF THE TOTAL 25 PARTIES. THE LETTERS WERE RETUNED BACK AS UNSERVED BECAUSE OF CERTAIN REASONS. AFTER COMING T O KNOW THIS FACT, THE ASSESSEE PRODUCED TWO OF THE K ARIGAR AS ONE WAS OUT OF INDIA. THE LD. ITO RECORDED TH E STATEMENT AT THE BACK OF THE ASSESSEE AND ISSUED US A SHOW CAUSE NOTICE THAT WHY A SUM OF RS.32,33,342/00 SHOULD NOT BE ADDED TO YOUR INCOME. THE SAID FACT HAD BROUGHT TO THE KNOWLEDGE OF THE LD. ITO. ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 5 DURING APPELLATE PROCEEDINGS, ASSESSEE ALSO FILED W RITTEN SUBMISSIONS WHICH ARE AS DETAILED IN PARA 5(3) OF C IT(A)S ORDER. AS STATED ABOVE, AFTER CONSIDERING THE SAME , CIT(A) GRANTED RELIEF TO THE ASSESSEE. 5. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REV ENUE INTER ALIA SUBMITTING THAT CIT(A) ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT NOTICES U/S.133(6) OF TH E ACT ISSUED THE SUNDRY CREDITORS AT THE ADDRESSES PROVIDED BY A SSESSEE WERE RETURNED UNSERVED. UNDER THESE CIRCUMSTANCES, ASSESSING OFFICER WAS JUSTIFIED IN ADDING BACK THE CREDITORS TO THE INCOME OF ASSESSEE AS BEING BOGUS AND AS BEI NG NOTHING BUT ASSESSEES OWN MONEY BEING INVESTED IN THE BUSINESS IN THE GRAB OF CREDITORS. SO, THE ORDER O F CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED . ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A). 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON RECORD, WE FIND THAT THE ISSUE BEFORE US IS REGARDI NG ADDITION OF ALL SUNDRY CREDITORS OF ASSESSEE AMOUNTING TO RS.1,58,55,454/-. ASSESSING OFFICER REQUIRED SUBMI SSION OF LIST OF SUNDRY CREDITORS AS PER BOOKS OF ACCOUNTS O F ASSESSEE ALONG WITH THEIR NAMES AND ADDRESSES. DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FURNISHED A LIST O F 25 SUNDRY CREDITORS, WITH THEIR NAMES AND ADDRESSES TO ASSESSING OFFICER ON 13.12.2010. ASSESSEE ALSO FILE D CONFIRMED COPIES OF ACCOUNTS OF SUNDRY CREDITORS BE FORE ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 6 ASSESSING OFFICER. ASSESSING OFFICER ISSUED A SHOW CAUSE TO ASSESSEE ON 07.12.2010. CIT(A) OBSERVED FROM THE SHOW CAUSE NOTICE THAT LETTERS U/S. 133(6) OF THE ACT WE RE ISSUED TO 3 CREDITORS, NAMELY, SHRI SALEEM SON OF SHRI SULTAN AHMAD, SHRI JAVED SON OF SHRI JABIR ALI AND SHRI NAFEES. LETTER U/S.133(6) OF THE ACT SENT TO SHRI NAFEES WAS RECEI VED BACK UNSERVED BECAUSE THE SAID PERSON HAD LEFT FOR SAUDI ARAB. STATEMENTS OF OTHER TWO CREDITORS WERE RECORDED BY ASSESSING OFFICER AT THE BACK OF ASSESSEE WHICH IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. ON THE BASIS OF CERTAIN DISCRE PANCIES NOTED BY ASSESSING OFFICER IN THEIR STATEMENTS, HE ADDED BACK TO THE INCOME OF ASSESSEE ENTIRE SUNDRY CREDIT ORS ON THE BASIS OF INQUIRIES CONDUCTED IN TWO CREDITORS. 6.1 CIT(A) EXAMINED THE ISSUE WHETHER ASSESSING OFF ICER WAS JUSTIFIED IN ADDING BACK ALL THE CREDITORS ON T HE BASIS OF ENQUIRIES FROM TWO CREDITORS ONLY. CONFIRMED COPIE S OF ACCOUNTS OF ALL SUNDRY CREDITORS WERE FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 25.10.2010. THE MODUS-OPERANDI OF AS SESSEE WAS THAT THE PURCHASES OF CHIKANKARI ITEMS WERE MAD E FROM KARIGARS AND SUPPLIERS ON CREDIT BASIS. CASH PAYMEN TS OF AMOUNTS NOT EXCEEDING RS.20,000/- WERE MADE FROM TI ME TO TIME AS MOST OF THE SUPPLIERS WERE VILLAGE BASED AN D MOST OF THEM DO NOT HAVE BANK ACCOUNTS AND ALSO DO NOT KEEP ANY BOOKS OF ACCOUNTS. SINCE, THE ISSUE IN QUESTION WA S THAT OF A SUNDRY CREDITOR, ASSESSEE HAS DISCHARGED HIS ONUS ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 7 SUFFICIENTLY BY SUBMITTING NAME AND ADDRESSES AND CONFIRMED COPIES OF ACCOUNTS OF SUNDRY CREDITORS. 6.2 THE SUNDRY CREDITORS BEING SUPPLIERS OF ASSESSE E, THEIR SUPPLIES WERE INCLUDED AS PURCHASES IN THE BOOKS OF ACCOUNTS OF ASSESSEE. WHILE ADDING THE AMOUNT OF SU NDRY CREDITORS TO THE INCOME OF ASSESSEE, ASSESSING OFFI CER HAS NOWHERE GIVEN ANY ADVERSE FINDING WITH REGARD TO TH E PURCHASES REFLECTED IN THE BOOKS OF ACCOUNTS OF ASS ESSEE. THE SALES CORRESPONDING TO THE PURCHASES MADE FROM THE SUNDRY CREDITORS HAS ALSO NOT BEEN DOUBTED. ASSESSE E HAS SHOWN A TURNOVER/SALES OF RS. 1,72,66,610/-. BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED DURING THE COURSE OF BUSINESS. THE BOOKS OF ACCOUNTS HAVE BEEN AUDITED A ND NO DISCREPANCY HAS BEEN FOUND EITHER BY THE AUDITOR OR BY THE ASSESSING OFFICER ON EXAMINATION. IN FACT, ASSESSIN G OFFICER HAS MENTIONED IN PARAGRAPH 2 OF THE ASSESSMENT ORDE R AS UNDER: 'THE ASSESSEE PRODUCED COPY OF AUDIT REPORT ALONG W ITH ITS ANNEXURE, COPIES OF BANK STATEMENT, COPIES OF VARIO US LEDGERS AND OTHER RELEVANT DOCUMENTS/DETAILS AND BILLS/VOUCHERS WHICH WERE EXAMINED AND PLACED ON FI LE. BOOKS OF ACCOUNTS WERE ALSO PRODUCED, EXAMINED AND TEST CHECKED.' IT SHOWS THAT NO ADVERSE INFERENCE DRAWN BY THE ASS ESSING OFFICER IN SO FAR AS THE ENTRIES IN BOOKS OF ACCOUN TS ARE CONCERNED. IT SHOWS THAT THE PURCHASES AND CORRESP ONDING SALES HAVE BEEN VERIFIED BY ASSESSING OFFICER WITH NO ADVERSE INFERENCE. DURING COURSE OF APPELLATE PROCEEDINGS, CIT(A) ASKED THE ASSESSEE TO FILE A STATEMENT SHOWING THE PAYMENTS ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 8 MADE TO AND PURCHASES MADE FROM IMPUGNED SUPPLIERS/ SUNDRY CREDITORS. THE STATEMENT FILED BEFORE CIT(A) SHOWS THAT PAYMENTS TO MOST OF THE 25 SUNDRY CREDITORS, H AVE BEEN MADE IN SUBSEQUENT YEARS. THE DETAILS ARE AS UNDER S. NO NAME OPENING BALANCE PURCHASES IN THE YEAR PAYMENTS MADE CLOSING BALANCE PAID IN 2008-2009 1 ABDUL RAHIM - 1686933 720100 966233 966233 2 ANISH - 1495212 498300 996912 996912 3 ASLAM HAZI - 14568 72 513500 943372 943372 4 ASRAF 382251 - 10100 281251 281251 5 AYUB 546144 84877 139500 491521 491521 6 CHANDRIKA 520061 21447 74800 466708 466708 7 GUFRAN - 1472145 487600 984545 984545 8 GULAM MEENA 419905 - 82000 337905 337905 9 IQBAL - 1255141 35 5100 900041 900041 10 JAVED - 1483464 363000 1120464 1120464 11 MANI RATNA SILK - 187598 - 187598 159783 12 MOIN 310701 10692 34000 287393 287393 13 MUHIB 566932 30031 73000 523963 523963 14 MUSTAQ - 1481948 556400 925548 925548 15 MUZEEB 5082 48 - 69000 439248 439248 16 N AFIS - 1589482 396700 1192782 1192782 17 PANKAJ CREATIONS - 4396992 3466200 930792 930792 18 PAPPU - 168623 691900 994335 994335 19 SALIM - 1825896 748800 1077096 1077096 20 SAMAD 321843 16116 87800 250159 250159 21 SHAMSAD 323117 - 99000 224117 224117 22 SHER KHAN 348354 23290 111000 260644 260.644 23 SUHAIL 405354 45124 89500 360978 360978 24 UDAI NARAIN 473073 - 165000 307073 307073 25 VINOD 456040 4736 56000 404776 404776 TOTAL 5582023 20254231 9980800 153 55454 15827639 6.3 IN ASSESSEE'S TRADE, AS PER THE PRACTICE PREVAL ENT IN LOCAL MARKET, LOCAL ARTISANS SUPPLY CHIKEN WORK MATERIAL ON CREDIT. WHENEVER THE MATERIAL IS PURCHASED FROM THEM, THE ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 9 PURCHASE IS RECORDED IN THE PURCHASE REGISTER, WHER EIN THE DETAILS OF MATERIAL INCLUDING THE DESIGN NUMBER, NU MBER OF PIECES, TOTAL CONSIDERATION AND SIGNATURE OF THE SU PPLIER ARE RECORDED. THESE PURCHASES WERE FURTHER RECORDED IN THE ACCOUNT OF KARIGAR AND THE DETAILS OF MATERIAL ARE ACCOUNTED FOR IN STOCK REGISTER. AFTER THAT THE GOODS ARE SO LD TO CUSTOMERS FROM THE STOCK OF GOODS IN HAND. THE PAYM ENTS TO KARIGARS ACCOUNT OF PURCHASES ARE MADE IN INSTALLM ENTS ON REALIZATION OF SALE PROCEEDS. THIS IS A REGULAR CY CLE OF PAYMENT-SALE-RECEIPT OF PAYMENT AND PAYMENT TO KARI GARS. IT WAS FOUND EVIDENT FROM THE AFORESAID CYCLE AND T HE TABLE REPRODUCED ABOVE THAT THE CREDITORS ADDED BY ASSESS ING OFFICER AMOUNTING TO RS. 1,58,55,454/- IN THE SIXTH COLUMN, INCLUDE PURCHASES OF RS. 2,02,54,231/- IN THE THIRD COLUMN, WHICH ARE SHOWN IN THE PROFIT AND LOSS ACCOUNT. TH ESE CREDITORS HAVE MOSTLY BEEN PAID OFF IN SUBSEQUENT Y EARS AS SHOWN IN SEVENTH COLUMN. FURTHER, SALES OF RS. 1,72,66,610/- HAS BEEN MADE DURING THE YEAR OUT OF SUCH PURCHASES OF RS.2,02,54,231/-. WHEN PURCHASE AND SA LES HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER, THE RE WAS NO JUSTIFICATION IN ADDING THE SUNDRY CREDITORS AS UNV ERIFIED. 6.4 SECOND ASPECT OF ISSUE IS THAT THE ASSESSING OF FICER RECORDED STATEMENTS OF TWO CREDITORS. THE ASSESSING OFFICER ISSUED A SHOW CAUSE TO ASSESSEE ON THE BASIS OF STA TEMENTS OF TWO CREDITORS AND ADDED ALL THE SUNDRY CREDITORS TO THE INCOME OF ASSESSEE WITHOUT ALLOWING ANY OPPORTUNITY TO ASSESSEE TO CROSS EXAMINE THE CREDITORS WHOSE STATE MENT ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 10 WERE UTILIZED BY THE ASSESSING OFFICER AGAINST THE ASSESSEE. ACCORDING TO SETTLED LEGAL PROPOSITION IN CASE REVE NUE COLLECTED MATERIAL BEHIND THE BACK OF THE ASSESSEE AND USED THE SAME AGAINST HIM AND NO OPPORTUNITY WAS GIVEN T O HIM TO CROSS THE PERSON WHOSE STATEMENT HAS BEEN USED A GAINST THE ASSESSEE FOR MAKING THE ADDITION. THEN IT IS CL EAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE JUSTIFYI NG DELETION OF ADDITION. IN VIEW OF ABOVE, CIT(A) RIGHTLY OBSERVE D THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE A DDITION OF ENTIRE SUNDRY CREDITORS OF RS.1,58,55,454/- TO THE INCOME OF ASSESSEE ON THE BASIS OF INQUIRES CONDUCTED FROM ON LY TWO CREDITORS. THE PURCHASE AND SALES REFLECTED IN THE AUDITED BOOKS OF ACCOUNTS HAVE BEEN EXAMINED AND ACCEPTED. THERE IS NO ADVERSE INFERENCE IN RESPECT OF ANY ENTRY REL ATING TO SALE, PURCHASE OR PAYMENTS MADE TO CREDITORS. ASSE SSEE FILED CONFIRMATORY LETTERS OF BALANCES OF ALL CREDITORS, WHO HAVE BEEN PAID OFF IN SUBSEQUENT YEARS. THE CONFIRMATOR Y LETTERS FILED BY ASSESSEE INCLUDE THE CONFIRMATORY LETTERS OF THE TWO CREDITORS WHOSE STATEMENTS HAVE BEEN RECORDED BY AS SESSING OFFICER. THE TWO CREDITORS, WHOSE STATEMENTS WERE RECORDED, WERE NOT ALLOWED TO BE CROSS-EXAMINED BY ASSESSEE. IN VIEW OF ABOVE FACTUAL AND LEGAL DISCUSSION, ADDITION OF RS.1,58,55,454/- MADE BY ASSESSING OFFICER WAS RIGH TLY DELETED BY CIT(A). THIS REASONED FACTUAL LEGAL FIN DING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPH OLD THE SAME. ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 11 7. IN C.O. NO.14/LKW/2012, ASSESSEE HAS RAISED FOLL OWING GROUNDS: 1. BECAUSE OTHERWISE ALSO THE VARIATION BETWEEN TH E 'RETURNED INCOME' AND THE 'ASSESSED INCOME' AS REPRESENTED BY THE ADDITION OF RS.1,58,55,454/- AND OTHER DISALLOWANCES WHICH FORM PART OF THE INCOME ASSESSE D IN TERMS OF ASSESSMENT ORDER DATED 29.12.2010 ARE WHOL LY ERRONEOUS AS NOTICE ISSUED UNDER SECTION 143(2) WIT H THE 'APPROVAL OF ID. CCIT(CCA), LUCKNOW' IS NO NOTICE I N THE EYES OF LAW. 2. BECAUSE AS PER CLAUSE (II) OF SUB-SECTION (2) OF SECTION 143 OF THE ACT NOTICE FOR SELECTING A CASE FOR SCRU TINY ASSESSMENT, HAS TO BE NECESSARILY BASED ON THE SATISFACTION RECORDED/ OPINION EXPRESSED BY THE ASS ESSING OFFICER HIMSELF AND NOTICE ISSUED WITH THE APPROVAL OF OTHER INCOME-TAX AUTHORITIES, EVEN IF HIGHER IN HIE RARCHY CANNOT BE SAID TO BE VALID IN THE EYES OF LAW. 8. THE ISSUE RAISED IN CROSS OBJECTION GOES ACADEMI C IN VIEW OF DECISION OF REVENUES APPEAL ON MERIT. SO, SAME IS DISMISSED AS BEING ACADEMIC. 9. AS A RESULT, APPEAL FILED BY REVENUE AND CROSS OBJECTION BY ASSESSEE BOTH ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 09 TH DAY OF SEPTEMBER, 2016. SD/- SD/- (N. K. BILLAIYA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: DATED 09/09/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ITA NO.472/LKW/11 & C.O. NO.14/LKW/12 A.Y. 08-09 (ITO VS. SHRI SUNEET KR. RASTOGI) PAGE 12 ! / CONCERNED CIT 4 !- / CIT (A) ()*+ ,--. ./0 / DR, ITAT, AHMEDABAD 6+2345 / GUARD FILE. BY ORDER / . // ./0