M/s Jindal Fine Industries, Ludhiana V. ACIT, Ludhiana

CO 31/CHANDI/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7946 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-10-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 28-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: Document seized; Documents seized
• Section: 143(3); 80HHC; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 890/CHD/2010 ASSESSMENT YEAR : 1999-2000 A.C.I.T, CIRCLE V V M/S JINDAL FINE INDUSTRIES LUDHIANA OPP.DHANDARI KALAN RLY STATION G.T. ROAD, LUDHIANA AAAFJ 8879 N ITA NO. 891/CHD/2010 ASSESSMENT YEAR : 2002-2003 A.C.I.T, CIRCLE V V M/S JINDAL FINE INDUSTRIES LUDHIANA OPP.DHANDARI KALAN RLY STATION G.T. ROAD, LUDHIANA AAAFJ 8879 N CROSS-OBJECTIONS NO. 30/CHD/2010 ARISING OUT OF ITA NO. 890/CHD/2010 ASSESSMENT YEAR : 1999-2000 M/S JINDAL FINE INDUSTRIES V A.C.I.T. CIRCLE V LUDHIANA LUDHIANA CROSS-OBJECTIONS NO. 31/CHD/2010 ARISING OUT OF ITA NO. 890/CHD/2010 ASSESSMENT YEAR : 1999-2000 M/S JINDAL FINE INDUSTRIES V A.C.I.T. CIRCLE V LUDHIANA LUDHIANA (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI MANJEET SINGH ASSESSEE BY: SHRI SUDHIR SEHGAL DATE OF HEARING 29.10.2012 DATE OF PRONOUNCEMENT 31.10.2012 O R D E R PER T.R.SOOD, A.M THESE APPEALS ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-II, LUDHIANA, DATED 6.3.2010. 2. CROSS-OBJECTIONS NO. 30 & 31.CHD/2010 AT THE TIME OF HEARING THE LD. COUNSEL OF THE ASSE SSEE SUBMITTED THAT HE IS NOT PRESSING THE CROSS-OBJECTI ONS. LD. DR 2 FOR THE REVENUE HAD NO OBJECTION IF THE SAME ARE AL LOWED TO BE WITHDRAWN. IN VIEW OF THIS THE CROSS-OBJECTIONS AR E DISMISSED AS WITHDRAWN. 3. ITA NO. 890/CHD/2010 IN THIS APPEAL FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1 THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DIRECTING THE AO TO REDUCE THE PROFITS OF RS. 9, 89,652/- ONLY IN RESPECT OF SALE OF SCRAP (WORKED OUT BY AD OPTING UNITARY METHODS) FROM THE PROFITS OF THE BUSINESS O F THE ASSESSEE FOR THE PURPOSES OF COMPUTING DEDUCTION U/ S 80HHC OF INCOME-TAX ACT, 1961. 2. THAT THE ORDER OF THE LD. CIT(A)-II BE SET ASIDE AND THAT OF THE AO BE RESTORED. 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT ORIG INAL ASSESSMENT WAS MADE U/S 143(3) OF THE ACT R.W.S. 14 7. LATER ON SUCH ASSESSMENT WAS SET ASIDE BY CIT-II, LUDHIAN A BY AN ORDER PASSED U/S 263 OF THE ACT ON THE ISSUE OF SAL E OF SCRAP IN RELATION TO DEDUCTION U/S 80HHC VIDE ORDER DATED 30 .3.2009. DURING SET ASIDE PROCEEDINGS THE AO WANTED TO EXCLU DE THE SALE OF SCRAP FROM PROFIT OF BUSINESS OF THE ASSESS EE AND FROM TOTAL TURNOVER. THE ASSESSEE EXPLAINED THAT SCRAP IS MAINLY GENERATED DURING THE MANUFACTURING OF CYCLE PARTS I N THE FORM OF BOORA AND JALLI. THIS SCRAP WAS BEING SOLD IN T HE OPEN MARKET. IT WAS CONTENDED THAT THE ASSESSEE HAD RIG HTLY CLAIMED DEDUCTION U/S 80HHC BY INCLUDING THE SALE V ALUE OF SCRAP IN THE PROFIT AND IN TOTAL TURNOVER OF THE AS SESSEE. THE ASSESSEE RELIED ON A FEW DECISIONS OF THE TRIBUNAL. SOME EXAMPLES WERE ALSO GIVEN. IN FACT PROFIT OF SCRAP WAS COMPUTED BY A LETTER DATED 4.12.2009 WHICH IS AS UNDER:- CALCULATION OF COST OF SCRAP PROFITS OF THE BUSINESS AS PER P & L A/C = RS. 4,03 ,00,312/- TOTAL TURNOVER = RS. 35,80,18,694/- SCRAP SALES = RS. 87,91,845/- PROFITS ON SCRAP SALES = TOTAL PROFITS * SCRAP SALES TOTAL TURNOVER = RS. 4,03,00,312 * RS. 87,91,845 RS. 35,80,18,694 3 = RS. 9,89,652 THEREFORE, , COST OF SCRAP = RS. 87,91,845 RS. 9,89,652 = RS. 78,02,193 THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESS EE AND OBSERVED THAT SINCE THE ASSESSEE HAD ALREADY DEBITE D THE ENTIRE AMOUNT OF PURCHASE AND RAW MATERIAL IN THE MANUFACTURING ACCOUNT AND THEREFORE, ONLY EXPENDITU RE RELEVANT FOR DETERMINATION OF PROFIT ELEMENT EMBEDDED IN THE SALE OF SCRAP WAS THE AMOUNT ATTRIBUTABLE TO GENERATION OF SCRAP. SINCE THE ASSESSEE HAD NOT FURNISHED ANY DETAILS, H E DID NOT ACCEPT THE WORKING OF PROFIT OF SCRAP SALE AT RS. 9 ,89,652/- AND REDUCED ENTIRE SCRAP SALE AMOUNTING TO RS. 87,91,84 5/- FROM THE PROFIT OF THE ASSESSEE FOR THE PURPOSE OF COMPU TING DEDUCTION U/S 80HHC, 5. BEFORE THE LD. CIT(A) IT WAS MAINLY SUBMITTED TH AT SCRAP IS GENERATED DURING MANUFACTURING OF CYCLE PARTS AND THIS SCRAP IS SOLD IN THE OPEN MARKET. THE SALE PRICE OR REAL IZABLE VALUE WHICH IS MUCH LESS THAN THE RAW MATERIAL AND THEREF ORE, NO PROFIT WAS GENERATED ON THE SCRAP VALUE. IT WAS FU RTHER STATED THAT IF THE ENTIRE AMOUNT ON SALE OF SCRAP WAS REDU CED FROM MANUFACTURING COST THEN THE PROFIT WOULD AUTOMATICA LLY GO UP OR THE SAME SHOULD NOT BE REDUCED FROM THE BUSINESS PR OFITS. RELIANCE WAS PLACED ON THE DECISION OF TRIBUNAL OF CHANDIGARH BENCH IN CASE OF KANGARO INDUSTRIES V JCIT IN ITA N O. 23/CHD/2007 AND SOME OTHER DECISIONS. 6 AFTER CONSIDERING THE SUBMISSIONS, THE LD. CIT(A) FOUND FORCE IN THE SUBMISSIONS OF THE ASSESSEE. HE HELD THAT THE DECISION OF KANGARO INDUSTRIES V JCIT ( SUPRA) WAS NOT APPLICABLE BECAUSE THE TRIBUNAL ITSELF HAS TAKEN A DIFFERENT VIEW IN THE LATTER DECISION OF TURBO TOOLS PVT LTD IN ITA NO.828/CHD/2007 AND FLEXFIT INDUSTRIES, ITA NO. 142 /CHD/2008. HE FURTHER HELD THAT IF THE ASSESSEE WAS EARNING NE T PROFIT OF 10% TO 12% ON ITS MANUFACTURING ACTIVITIES THEN IT WAS NOT POSSIBLE TO EARN 100% PROFITS ON SCRAP SALE OTHERWI SE THE ASSESSEE WOULD START BUSINESS OF SCRAP ONLY. ULTIM ATELY HE MADE THE FOLLOWING OBSERVATIONS:- THEREFORE, THOUGH THERE COULD NOT BE ANY SCIENTIFI C JUSTIFICATION FOR COMPUTING PROFITS ON SALE OF S CR AP BY APPLYING UNITARY METHOD, KEEPING IN VIEW THE PROPOS ITION THAT THE PROFIT EARNED BY AN ASSESSEE ON ACTIVITY O THER 4 THAN THE MAIN ACTIVITY WOULD BE LESS THAN OR AT THE MOST EQUAL TO THE PROFIT EARNED FROM TEN MAIN ACTIVITY, THE PROFIT WORKED OUT BY THE UNITARY METHOD APPEARS TO BE QUIT E JUSTIFIED. KEEPING IN VIEW THE ABOVE DISCUSSION I WOULD AGREE WITH THE ALTERNATIVE CONTENTION OF THE LD. CO UNSEL THAT THE PROFIT, IF ANY, EMBEDDED IN THE SALE OF SC RAP IN THIS CASE WOULD BE RS. 9,89,652/- AS PER THE CALCUL ATIONS GIVEN ABOVE IN THE PRECEDING PARAGRAPHS. THE AO IS , THEREFORE, DIRECTED TO REDUCE ONLY THIS PROFIT FROM THE PROFITS OF THE BUSINESS OF THE APPELLANT FOR THE PU RPOSES OF COMPUTING DEDUCTION U/S 80HHC. THIS GROUND OF APPE AL IS, THEREFORE, PARTLY ALLOWED. 7 BEFORE IS. THE LD. DR FOR THE REVENUE STRONGLY RE LIED ON THE ORDER OF THE AO. 8 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN CASE OF ACIT V. JAGRAON CYCLE INDUSTRIES IN ITA NO. 274/CHD/2012. 9 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AND FIND THAT IN CASE OF ACIT V. JAGRAON CYCLE INDUSTRIES (S UPRA) THE ISSUE RAISED BY THE REVENUE IN GROUND NO. 1 AS REPR ODUCED BY THE TRIBUNAL AT PARA 3 WHICH IS AS UNDER: THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO CALCULATE PROFITS ON SALE OF SC RAP BY APPLYING UNITARY METHOD BY IGNORING THE FACT THAT S CRAP IS GENERATED AS PART OF THE PRODUCTION PROCESS AND WAS A WASTE PRODUCT TO WHICH NO COST COULD BE ATTRIBUTED AND HENCE ANY RECEIPT ON SALE OF SCRAP WOULD BE THE PRO FIT OF THE BUSINESS OF THE ASSESSEE. ON THIS THE TRIBUNAL HAS RECORDED THE FOLLOWING FIN DING AT PARA 9 WHICH IS AS UNDER: 9 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE WE A RE IN AGREEMENT WITH THE ORDE R OF THE CIT(A) THAT ONLY THE PROFIT ELEMENT IN THE SAL E OF SCRAP IS TO BE EXCLUDED FROM THE PROFITS OF THE BUS INESS FOR DETERMINING THE PROFITS ELIGIBLE FOR DEDUCTION U/S 80HHC OF THE ACT. THE SAID RATIO WAS LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE. THE MATTER WAS DELIBERATED UPON BY THE CVA AND SET ASIDE TO THE FI LE OF THE AO WITH DIRECTIONS. THE AO GIVING EFFECT TO TH E ORDER OF THE LD. CIT(A), VIDE ORDER DATED 17.2.2012 HAD RECOMPUTED DEDUCTION U/S 80HHC OF THE ACT BY COMPUT ING PROFITS ON SALE OF SCRAP AT RS. 2,98,598. THE LD. AR FOR THE ASSESSEE HAS PLACED ON RECORD THE SAID ORDER OF THE AO. IN VIEW THEREOF, WE FIND NO MERIT IN THE PRESET GROUNDS OF APPEAL RAISED BY THE REVENUE AND HE SAME ARE DISMISSED. 10 IN THE ABOVE CASE ALSO THE REVENUE WAS ON APPEAL AGAINST THE DECISION OF LD. CIT(A) WHEREIN IT WAS H ELD BY THE 5 APPELLATE AUTHORITY THAT ONLY PROFIT ELEMENTS IN TH E SALE OF SCRAP IS TO BE EXCLUDED FROM THE PROFITS FOR THE PURPOSE OF DEDUCTION U/S 80HHC. THIS FINDING HAS BEEN CONFIRMED BY THE TRIBUNAL. SINCE THE ISSUE BEFORE US IS IDENTICAL. SINCE THE ISSUE BEFORE US IS IDENTICAL AND IN CASE BEFORE US FIRST APPELLA TE AUTHORITY IN THE IMPUGNED ORDER HAS ONLY DIRECTED TO REDUCE THE PROFIT FROM THE BUSINESS PROFIT FOR THE PURPOSE OF DEDUCTION U/ S 80HHC OF THE ACT. WE, FOLLOWING THE ABOVE ORDER, IN CASE OF JAGRAON CYCLE INDUSTRIES (SUPRA) DECIDE THE ISSUE AGAINST T HE REVENUE. 11. IN THE RESULT, APPEAL IN ITA NO. 890/CHD/2010 I S DISMISSED. ITA NO. 891/CHD/2010 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS. 3,07,686/- MADE U/S 69 C OF THE ACT ON THE BASIS OF SEIZED DOCUMENTS. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACS IN DIRECTING THE AO TO REDUCE THE PROFIT OF RS. 6,50,7 09/- ONLY IN RESPECT OF SALE OF S CRAP (WORKED OUT BY A DOPTING UNITARY METHOD) FROM THE PROFITS OF THE BUSINESS OF THE ASSESSEE FOR THE PURPOSES OF COMPUTING DEDUCTION U/ S 80HHC OF THE ACT. 12 GROUND NO. 1 AFTER HEARING BOTH THE PARTIES WE FIND THAT SEARCH WAS CONDUCTED IN THE PREMISES OF THE STREAML INE ENTERPRISES GROUP OF CASES DURING WHICH SOME INCRIM INATING DOCUMENTS WERE FOUND AND SEIZED. SHRI SATNAM ARORA WHO IS PROPRIETOR OF THREE CONCERNS NAMELY M/S STREAMLINE ENTERPRISES, M/S STREAMLINE PETROLEUM AND M/S SERVO ROADLINES WAS THE MAIN PERSON OF THESE CASES AND HI S STATEMENT WAS ALSO RECORDED. SHRI ARORA ADMITTED T HAT HE HAD ENGAGED IN THE BUSINESS ACTIVITIES OUTSIDE REGULAR BOOKS OF ACCOUNT. HE CATEGORICALLY ADMITTED THAT HE WAS PUR CHASING BITUMEN FROM GOVERNMENT OFFICIALS AND SELLING THE BITUMEN/FURNACE OIL TO STEEL ROLLING AND FORGING UN ITS. IT WAS FURTHER NOTICED FROM THE APPRAISAL REPORT IN M/S ST REAMLINE GROUP OF CASES THAT DAY TO DAY UNACCOUNTED TRANSACT IONS CARRIED OUT BY THE GROUP WERE KEPT IN COMPUTERIZED FORM. CERTAIN ZIP DRIVES, FLOPPIES, HARD DISCS WERE SEIZE D AND SAME WERE OPERATED BY THE INVESTIGATION WING IN THE PRE SENCE OF SHRI SATNAM ARORA IN THE PRESENCE OF INDEPENDENT WI TNESSES. 6 THESE FLOPPIES AND ZIP DRIVES CONTAIN COMPLETE DETA ILS OF ACTUAL AFFAIRS. DURING THESE PROCEEDINGS, IT WAS F URTHER NOTED THAT M/S STREAMLINE GROUP OF CASES HAD MADE CERTAIN TRANSACTIONS WITH THE ASSESSEE I.E. M/S JINDAL FIN E INDUSTRIES. FROM THE STATEMENT IT WAS FOUND THAT THE ASSESSEE H AD MADE PURCHASES WORTH RS. 3,70,676/- FROM M/S STREAMLINE ENTERPRISES AND MADE PAYMENT AMOUNTING TO RS. 2,48, 996/- BILLS IN CASH WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAD ALSO RECEIVED RS. 2,66,772/- FROM STREAMLINE ENTERPRISES BECAUSE THIS AMOUNT HAS NOT BEEN SHOWN IN THE BOOKS OF ACCOUNT. THE ASSESSEE DURING ASSESSMENT PROCEEDINGS MAINLY SUBMITTED THAT ALL THE PAYMENTS WERE MADE BY CHEQUE AND EVEN THE COPIES OF ACCOUNTS WERE ALSO FURNISHED. HOWEVER, THESE SUBMISSIONS WERE NOT ACC EPTED AND GP RATE OF 22% WAS APPLIED ON THE PAYMENTS RECEIVED AMOUNTING TO RS. 2,66,772/- AND TAXABLE INCOME WAS WORKED OUT TO RS. 58,690/-. FURTHER A SUM OF RS. 2,48,996 /- WAS ALSO TREATED AS CONCEALED INCOME BECAUSE NO SOURCES FOR CASH PAYMENTS WERE EXPLAINED. 13 BEFORE THE LD. CIT(A), IT WAS MAINLY SUBMITTED T HAT THE ASSESSEE HAD MAINLY AVAILED ONLY TRANSPORT FACILITY OF STREAMLINE PVT LTD AND PAYMENTS FOR THE SAME WAS MA DE BY CHEQUE. THE ASSESSEE HAD ALSO PURCHASED CONSIGNMEN T FUEL FROM AJANTA AUTO SYSTEM A SISTER CONCERN OF STREAML INE GROUP AND PAYMENTS AGAINST THE SAME WAS MADE BY ACCOUNT P AYEE CHEQUE. CONFIRMED COPIES OF THESE WERE FILED BEFOR E THE AO AS WELL AS THE LD. CIT(A). ALLEGED COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNT OF STREAMLINE GROU P REPRODUCED BY THE AO WAS NOT SUPPORTED BY ANY BILL/ VOUCHERS OR EVIDENCE. NO DISCREPANCY WAS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. COPY OF ORIGINAL PRINT OU TS COULD NOT BE ACCEPTED AS THE AUTHENTICITY OF THE SAME WAS NOT PROVED. RELIANCE WAS ALSO PLACED ON THE APPELLATE ORDER FOR AY 1999- 2000 IN ITA NO. 254/IT/CIT(A)-II/LDH/06-07, SIMILAR ADDITION 7 HAS BEEN DELETED. THE LD. CIT(A) AFTER EXAMINED TH E SUBMISSIONS DELETED THE ADDITION BY FOLLOWING PARA: 5 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF TH E LD. COUNSEL OF THE APPELLANT AND PERUSED THE RELEVANT R ECORD. ONE OF THE MAIN CONTENTIONS OF THE APPELLANT AGAINS T THE ADDITION IS THAT THE AUTHENTICITY OF THE ALLEGED CO MPUTER PRINT OUTS COULD NOT BE ACCEPTED TILL THE ORIGINAL WERE BEING PRODUCED ALONG WITH THE PERSONS FROM WHOSE CUSTODY THESE HAD BEEN TAKEN AND THAT PERSON HAD BE EN CROSS EXAMINED BY THE APPELLANT. IT IS SUBMITTED T HAT EVEN THE STATEMENT OF SHRI SATNAM ARORA RECORDED DU RING THE COURSE OF SEARCH HAD NOT BEEN PROVIDED TO THE APPELLANT. IN PARA 2.4 OF THE WRITTEN SUBMISSIONS RELIANCE HAS BEEN PLACED UPON A NUMBER OF DECISIONS AS PER W HICH THE STATEMENT RECORDED AT THE BACK OF AN ASSESSEE C ANNOT BE USED AGAINST IT WITHOUT CROSS EXAMINING THE SAME . THE LD. COUNSEL HAS FURTHER REFERRED TO THE DECISION ON SIMILAR ISSUE IN APPELLANTS OWN CASE FOR THE AY 1999-2000 IN APPEAL NO. 254/IT/CIT(A)-II/LDH/06-07. AS ALSO SUBMITTED BY THE LD. COUNSEL OF THE APPELLANT THE A O HAS MENTIONED ON PAGE 2 OF THE ASSESSMENT ORDER IN PARA 4 THAT HE CATEGORICALLY ADMITTED THAT HE WAS PURCHAS ING BITUMEN FROM GOVERNMENT OFFICIALS AND SELLING BITUMEN/FURNACE OIL TO STEEL ROLLING AND FORGING UN ITS. THE APPELLANT IS RUNNING A FORGING UNIT FOR MANUFACTURI NG OF CYCLE PARTS. THEREFORE, AS PER THE ABOVE STATEMEN T OF SHRI SATNAM ARORA, THE APPELLANT SHOULD HAVE PURCHA SED FURNACE OIL FROM THE SAID STREAMLINE GROUP OF CASE. HOWEVER, FROM THE DETAILS OF TRANSACTIONS BROUGHT O UT I9N THE TABLE IN PARA 6 OF THE ASSESSMENT ORDER THE APP ELLANT IS ALSO SHOWN TO HAVE CREDITED DIFFERENT AMOUNTS BY M/S STREAMLINE GROUP OF CASES FOR AMOUNT TL 4139 FO E TC. AS STATED BY THE LD. COUNSEL THESE PAYMENTS ARE AS UNDER:- DATE PARTICULARS CREDIT AMOUNT 13.4.2001 BY AMOUNT OF 12 KL FO 111497.00 29.4.2001 BY AMOUNT OF TL 4139 FO 137499.00 5.1 THEREFORE, AS PER THESE ENTRIES THE APPELLANT SHOULD HAVE SOLD FURNACE OIL TO M/S STREAMLINE ENTERPRISES . ON THE OTHER HAND, SHRI SATNAM ARORA HAD STATED IN HIS STATEMENT RECORDED AS ABOVE THAT THEY HAD BEEN PURCHASING FURNACE OIL AND BITUMEN FROM GOVERNMENT OFFICIALS/DEPARTMENTS OUTSIDE THE BOOKS OF ACCOUNTS AND SELLING TO SOME FORGING UNITS. WHEN AS PER OTHER E NTRIES THE APPELLANT HAD BEEN SHOWN TO HAVE PURCHASED FURN ACE OIL FROM M/S STREAMLINE GROUP OF CASES, AS RIGHTLY POINTED OUT BY THE LD. COUNSEL, IT IS NOT UNDERSTOOD AS TO HOW THERE COULD BE ENTRIES WITH REGARD TO SALE OF FURNA CE OIL BY THE APPELLANT TO THAT GROUP. IN VIEW OF THE ABOVE POSITION THERE IS CONSIDERABLE FORCE IN THE CONTENTION OF TH E LD. COUNSEL THAT THE REAL NATURE OF THE ENTRIES IN THE SEIZED RECORD COULD NOT BE ASCERTAINED. THOUGH NOT ALLOWI NG CROSS EXAMINATION OF A WITNESS IN ITSELF GOES IN FA VOUR OF 8 AN ASSESSEE IN AS MUCH AS SUCH STATEMENT COULD NOT BE USED AGAINST IT IN THE CASE OF THE APPELLANT, AS VE RY RIGHTLY CONTENDED BY THE LD. COUNSELS IT WAS ALL TH E MORE IMPORTANT TO HAVE SUCH CROSS EXAMINATION OF SHRI SA TNAM ARORA SO AS TO FIND OUT THE REAL NATURE OF THESE TRANSACTIONS. FURTHER AS MENTIONED IN THE WRITTEN SUBMISSIONS OF THE LD. COUNSEL SIMILAR ISSUE CAME U P FOR DISCUSSION IN APPELLANTS OWN CASE FOR THE AY 1999- 2000. FOR ALMOST SIMILAR REASONS ADDITION MADE UNDER IDEN TICAL CIRCUMSTANCES WAS DELETED BY OBSERVING AS UNDER:- THUS THE CLEAR NATURE OF THE ENTRIES RECORDED IN T HE SEIZED DOCUMENTS IS NOT ASCERTAINED. KEEPING IN VIEW THE OVERALL POSITION DISCUSSED ABOVE I.E. SHRI SATNAM ARORA HAVING NOT MENTIONED THE NAME OF THE APPELLANT IN THE NAMES OF EIGHT PARTIES SO MENTIONE D IN HIS STATEMENT, SHRI SATNAM ARORA HAVING NOT BEEN EVEN EXAMINED BY THE APPELLANT, AND THE AO MAKING THE ADDITION ON ACCOUNT OF SALES MADE TO STREAMLIN E GROUP OUTSIDE THE BOOKS OF ACCOUNT AGAINST THE APPELLANT HAVING MADE SUCH PURCHASE AS PER THE REASONS RECORDED FOR REOPENING OF THE S ETC. THE ADDITION MADE BY THE AO AS ABOVE, CANNOT BE UPHELD. THE ADDITION OF RS. 72,884/- IS, THEREFORE , DELETED. 5.2 IN VIEW OF THE SAME REASONS AS DISCUSSED IN THE APPELLANT ORDER FOR THE AY 1999-2000 MENTIONED ABOV E AND THE DISCUSSION MADE IN THE PRECEDING PARAS, ADD ITION OF RS. 307686/- IS DELETED. THESE GROUNDS OF APPEA L ARE, THEREFORE, ALLOWED. 14 BEFORE US, THE LD. DR FOR THE REVENUE STRONGLY S UPPORTED THE ORDER OF AO. 15 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND A LSO RELIED ON THE APPELLATE ORDER FOR AY 1999-2000 AND POINTED OUT THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THIS O RDER. 16 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY A ND AGREE WITH THE FINDINGS OF THE LD. CIT(A) BECAUSE IT IS C LEAR THAT THE ASSESSEE WAS NOT CONFRONTED WITH THE MATERIAL FOUND WITH THE THIRD PARTY. THE LD. CIT(A) HAS RECORDED A DETAILE LD FINDING AND GIVEN A GOOD REASONING IN DELETING THE ADDITION WIT H WHICH WE AGREE AND CONFIRM THE SAME. THEREFORE, THIS GROUN D OF APPEAL IS REJECTED. 9 17 GROUND NO. 2 THIS ISSUE IS IDENTICAL TO THE IS SUE RAISED IN GROUND NO. 1 FOR AY 1999-2000 WHICH WE HAVE ADJU DICATED IN PARA 9. FOLLOWING THE SAME WE DECIDE THE ISSUE AGA INST THE REVENUE. 18 IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A ND BOTH THE CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 31.10.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 31.10. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 10