ACIT, New Delhi V. M/s. SSS Loha Marketing Pvt. Ltd., Kolkata

ITA 109/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9004 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 07-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Bogus purchase; Income from undisclosed sources; Search and seizure; Question of law; Corroborative evidences; Accommodation entries; Retraction; TDS; Rule 8D
• Section: 133A; 13; 132

Judgement Text

1 ITA NO. 109/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 109/DEL/2016 (A.Y 2010-11) (THROUGH VIDEO CONFER ENCING) ACIT CENTRAL CIRCLE-26, ROOM NO. 323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI (APPELLANT) VS SSS LOHA MARKETING PVT. LTD. 18/1, MAHARISHI DEVENDARA ROAD, 7 TH FLOOR, ROOM NO. 1A, KOLKATA PAN:AAHCS3962M (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER D ATED 20/10/2015 PASSED BY CIT(A)-29, NEW DELHI FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,&5,53,574/- ON ACCOUNT OF BOGUS SALES MADE TO M/S PUNJ LLYOD LTD., WITHOUT APPRECIATING THE FACT THAT THE ONUS OF ESTABLISHING GENUINENESS OF T RANSACTION WAS ON THE ASSESSEE, WHICH IT FAILED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 4,05,53,574/- BY HOLDING THAT THE DIRECTOR HAS ADMITTED THAT SALES AND PURCH ASES BOTH ARE BOGUS APPELLANT BY SH. KUMAR PRANAV SR. DR RESPONDENT BY SH. RAKESH GUPTA, ADV DATE OF HEARING 19.07.2021 DATE OF PRONOUNCEMENT 10.08.2021 2 ITA NO. 109/DEL/2016 WITHOUT APPRECIATING THE FACT THAT THE DIRECTOR HAD RETRACTED THE ABOVE STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDIN G ITSELF, AND ALSO DURING THE APPELLATE PROCEEDING, AND HAD CLAIMED THAT THE TRANSACTION WITH M/S PUNJ LLYOD LTD WAS NOT GENUINE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING COMMISSION INC OME OF ONLY 0.25% ON THE TRANSACTION WITH M/S PUNJ LLYOD LTD WITHOUT ANY BAS IS. 4. THAT THE ORDER OF THE CIT(A) IS PERVERSE , ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 5. THAT THE GROUNDS OF APPEAL ARE WITHOUT P REJUDICE TO EACH OTHER. 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E COMPANY WAS MAINLY ENGAGED IN THE BUSINESS OF TRADING IN IRON ORE FINE S ETC. E-RETURN OF INCOME DECLARING INCOME OF RS. 1,39,61,784/- WAS FILED BY THE ASSESSEE ON 13/10/2010. THEREAFTER, THE ASSESSEE FILED REVISED COMPUTATION OF INCOME DECLARING INCOME OF RS. 1,41,88,970/-. PRIOR TO FI LING RETURN, A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OU T ON 17/3/2010 IN CASE OF PUNJ LLYOD GROUP OF CASE. DURING THE COURSE OF POS T SEARCH ENQUIRIES, SURVEY WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSES SEE COMPANY ON 30/5/2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY IN ASSESSEES CASE. THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE HAS SHOWN DIVIDEND INCOME TO THE TUNE OF RS. 11,949/- AND CLA IMED THE SAME AS INCOME. THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 62, 957/- AGAINST THE DIVIDEND INCOME AND INTEREST INCOME AS PER RULE 8D. FURTHER , THE ASSESSING OFFICER MADE ADDITION OF RS. 4,05,53,574/- IN RESPECT OF IN COME FROM OTHER SOURCES WHICH WAS SURRENDERED BY THE ASSESSEE ON ACCOUNT OF BOGUS INTEREST. ON ACCOUNT OF EXCESS TRANSACTION TO THE TUNE OF RS. 3, 03,226/-, THE SAME WAS ALSO ADDED BY THE ASSESSING OFFICER . THUS, THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 5,51,08,070/-. 3 ITA NO. 109/DEL/2016 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) HAS NOT AT ALL CONSIDERED THE FACTUAL ASPECTS AND SIMPLICITOR DELETED THE ADDITIO N WITHOUT TAKING COGNIZANCE OF THE ADMISSION OF THE DIRECTOR THAT SALES AND PUR CHASES BOTH ARE BOGUS. THE LD. DR FURTHER SUBMITTED THAT COMMISSION INCOME OF ONLY 0.25% ON THE TRANSACTION WITH M/S PUNJ LLOYD LTD. IS QUANTIFIED WITHOUT ANY BASIS. 6. THE LD. AR SUBMITTED THAT THE CASE OF THE ASSESS EE WAS IDENTIFIED AS ONE OF THE ENTRY PROVIDERS TO M/S PUNJ LLOYD AND ACCORD INGLY A SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 31/5/2 010. DURING THE SURVEY STATEMENT OF SHRI DILIP DIDWANIA, DIRECTOR OF THE A SSESSEE COMPANY WAS RECORDED U/S 133A OF THE ACT, IN WHICH HE CONFESSED THAT SALES RELATABLE TO M/S PUNJ LLOYD LTD. ARE JUST BOOK ENTRIES AND NO BOOK H AS BEEN TRADED. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE DETAILS OF SURRENDER MADE BY THE DIRECTOR OF THE COMPANY DURING THE COURSE OF SURVEY AND ITS TREATMENT IN THE BOOKS OF ACCOUNT, ATER HAVING DISCOVERED THA T NO ADDITIONAL INCOME HAS BEEN OFFERED BY THE ASSESSEE IN ITS RETURN ON INCOM E. THE LD. AR FILED SYNOPSIS WHICH IS PRODUCED HEREIN BELOW:- THE SOLE ISSUE IN THE PRESENT APPEAL IS REGARDING T HE ADDITION OF RS. 4,05,53,574/- MADE BY THE LD. AO CONSIDERING THE SA LES MADE BY ASSESSEE TO M/S. PUNJ LLOYD LTD. AS BOGUS ENTRIES. ON CONSEQUE NT APPEAL, LD. CIT (A) CONCLUDED THAT BOTH SALES AND CORRESPONDING PURCHAS ES ARE MERE BOOK ENTRIES AND THUS WILL HAVE NO IMPACT ON THE PROFITABILITY O F THE APPELLANT BECAUSE BOTH ARE DULY ENTERED IN THE BOOKS OF ACCOUNTS OF ASSESS EE. THEREFORE, LD. CIT(A) RESTRICTED THE ADDITION TO RS. 1,01,400/-, ALLEGING THAT AS PER COMMON PRACTICE WHILE PROVIDING SUCH BOGUS ENTRIES SMALL PERCENTAGE OF SUCH BOGUS ENTRY IS TAKEN BY ENTRY PROVIDER AS COMMISSION, OVER AND ABO VE THE AMOUNT, SO IT IS HELD THAT ASSESSEE HAS CHARGED COMMISSION @ 0.25% OF RS. 4,05,53,574/- AGAINST WHICH ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE YOUR HONOURS. 4 ITA NO. 109/DEL/2016 AGAINST THE DELETION OF RS. 4,04,52,174/- REVENUE H AS FILED THE APPEAL. THE BRIEF FACTS OF THE CASE ARE AS UNDER:- APPELLANT IS A COMPANY ENGAGED IN THE BUSINESS OF TRADING OF IRON ORE . DURING THE IMPUGNED ASSESSMENT YEAR APPELLANT SOLD 1350.108 MT BARS TO M/S. PUNJ LLOYD LTD FOR RS4,06,37,894/-AND CORRESPO NDING PURCHASES WAS MADE FROM M/S. RAMSARUP UTPADAK FOR RS. 3,67,84,909 /-. A SEARCH OPERATION WAS CONDUCTED AT THE PREMISES OF M/S. PUN J LLOYD LTD. ON 17.03.2010 AND DURING THE COURSE OF POST SEARCH ENQ UIRIES A SURVEY WAS CONDUCTED AT THE BUSINESS PREMISE OF THE ASSESSEE O N 30.05.2010 AND DURING SURVEY STATEMENT OF DIRECTOR OF ASSESSEE COMPANY MR . DILIP DIDAWANI WAS RECORDED. PB 61-62A IS THE COPY OF STATEMENT OF MR. DILIP DIDAWANI RECO RDED DURING THE SURVEY. SOLELY ON THE BASIS OF ABOVE MENTIONED STATEMENT L D. AO FORMED A BELIEF THAT IMPUGNED SALES TO M/S PUNJ LLOYD LTD. ARE MERE BOOK ENTRIES AND IGNORED ALL DOCUMENTARY EVIDENCES PLACED ON RECORD BY ASSES SEE GIVEN AS UNDER PB 33 IS THE COPY OF TAX AUDIT REPORT EVIDENCING THE QUAN TITATIVE RECONCILIATION OF THE STOCK PB 35 IS THE COPY OF TRANSACTION SUMMARY OF SALES MADE BY ASSESSEE TO M/S. PUNJ LLOYD LTD. SHOWING THE CST TAX WAS DULY P AID BY ASSESSEE AND ALSO EVIDENCING THE DELIVERY CHARGES IN RESPECT OF EVERY TRANSACTION OF SALES MADE BY ASSESSEE TO M/S. PUNJ LLOYD LTD. PB 35A IS THE COPY OF STATEMENT OF PURCHASES MADE BY ASSES SEE FROM M/S RAMSARUP UTPADAK LTD. EVIDENCING THAT PAYMENT FOR A LL PURCHASES HAVE BEEN MADE ALONG WITH DUE TAXES. PB 35B-35D IS THE COPY OF DETAILS OF COMMERCIAL TAXES PAID BY ASSESSEE DULY SHOWING THE SALES MADE TO M/S. PUNJ LLOYD LTD. AND DELIVERY CHARGES CHARGED ON THE SAME. PB 35F IS THE COPY OF SUMMARY OF SALES UNDER CST ACT FOR 4 QUARTER REFLECTING NAME OF M/S. PUNJ LLOYD LTD. 5 ITA NO. 109/DEL/2016 PB 35J-35L IS THE COPY OF DETAILS OF PARTY WISE SALES MADE BY ASSESSEE COMPANY DURING THE IMPUGNED ASSESSMENT YEAR. PB 35M-35N IS THE COPY OF STOCK REPORT DULY SHOWING THE RECEIP T OF THE STOCK FROM M/S. RAMSARUP UTPADAK LTD. AND ISSUE OF THE STOCK M/S. PUNJ LLOYD LTD. PB 36 IS THE COPY OF DETAILS OF DELIVERY CHARGES IN RESPE CT OF SALES MADE BY ASSESSEE TO M/S. PUNJ LLOYD LTD. PB 39 IS THE COPY OF DETAILS OF TDS DEDUCTED BY ASSESSEE EVIDENCING THAT DUE TAXES HAVE BEEN DEDUCTED BY THE APPELLANT IN RE SPECT OF DELIVERY CHARGES PAID BY ASSESSEE TO M/S. ALOK TRANSPORT PVT. LTD. PB 47 IS COPY OF LEDGER ACCOUNT OF M/S PUNJ LLYOD LTD SHO WING SALE, RECEIPTS OF PAYMENT AND TDS ON DELIVERY CHARGES. PB 48-49 IS THE LEDGER ACCOUNT OF BANK OF BARODA SHOWING THE RECEIPT OF PAYMENT FROM M/S PUNJ LLYOD LTD ARE DULY RECEIVED I N THE IMPUGNED ASSESSMENT YEAR. PB 50 IS COPY OF BANK STATEMENT OF ASSESSEE SHOWING THE P AYMENTS RECEIVED FROM M/S PUNJ LLOYD LTD VIA BANKING CHANNE LS. PB 52 IS INPUT VAT REGISTER SHOWING THE CLAIM OF I NPUT VAT ON THE PURCHASES MADE BY ASSESSEE FROM M/S RAM SARUP UTAPA DAK IN THE IMPUGNED ASSESSMENT YEAR. PB-53 IS THE COPY OF OUTPUT VAT REGISTER SHOWING DUE TAX HAVE BEEN PAID ON SALE MADE TO M/S PUNJ LLYOD LIMITED. PB 55 IS THE LEDGER ACCOUNT OF M/S RAM SARUP UTAPADAK SHO WING THE REGULARITY OF THE TRANSACTIONS. PB-56 IS THE DETAILS OF PAYMENTS MADE BY ASSESSEE TO M/S RAM SARUP GROUP DURING THE IMPUGNED ASSESSMENT YEAR. PB 57-58 IS THE COPY OF BANK STATEMENT OF THE M/S RAM SARUP UTAPADAK SHOWING THE RECEIPT OF PAYMENT VIA BANKING CHANNELS FROM ASSESSEE COMPANY. PB 59-60 IS THE COPY OF THE BANK STATEMENT OF THE ASSESSEE E VIDENCING THE 6 ITA NO. 109/DEL/2016 PAYMENT MADE BY ASSESSEE VIA BANKING CHANNELS. PB 61-62 IS THE COPY OF STATEMENT OF DIRECTOR IN WHICH THE S AID QUESTION WAS ASKED. PB 77-81 IS THE COPY OF SUBMISSION DATED 17.09.2013 FILED BY ASSESSE BEFORE LD. AO DULY SUBMITTING ALL THE DOCUMENTS VEH EMENTLY PROVING THE GENUINE NESS OF THE TRANSACTIONS ENTERED BY ASSESSE E. PB 81-131 IS THE COPY OF ANNUAL REPORT CONTAINING BALANCE SHE ET AND PROFIT AND LOSS ACCOUNT OF M/S. RAMSARUP INDUSTRIES LTD. EVIDENCING THE COMPLETE DETAILS OF ADDRESS AND CONTACT DETAILS OF ALL UNITS INCLUDING UNIT NO. 2 I.E M/S RAMSARUP UTPADAK LTD. PB 132- 306 IS THE COPY OF COMPLETE TRAIL OF DOCUMENTS IN RESPE CT OF EVERY TRANSACTION ENTERED BY ASSESSEE WITH M/S. PUNJ LLOY D LTD., M/S. RAMSARUP UTPADAK LTD. AND M/S ALOK TRANSPORT PVT. LTD. THUS, IN VIEW OF SUCH OVERWHELMING EVIDENCES IT IS MORE THAN PROVED THAT THE SALE MADE INCLUDING ONE MADE TO M/S PUNJ LLOYD LTD. WAS GENUINE SALE AND IMPUGNED ADDITION WAS BASED ON INCORRECT FACTS. THE RESPONSE OF DIRECTOR OF ASSESSEE COMPANY MR. M R. DILIP DIDAWANI ON QUESTION NO. 4 (PB 62) WAS CONSIDERED ALLEGED SURRE NDER OF UNDISCLOSED INCOME ON THE BEHALF OF ASSESSEE. WHEREAS A BARE PE RUSAL OF THE SAME WILL SHOW THAT NO SURRENDER WAS EVER BEEN MADE BY ON BEH ALF OF ASSESSEE COMPANY. WHEREAS LD. CIT(A) DULY POINTED OUT THE DE FECT IN THE BASIS OF BY LD. AO (PARA 10.9 AT PAGE 19 OF ORDER) THAT NOTHING HAS BEEN FOUND MENTIONED IN THE STATEMENT TO CONCLUDE THAT ADDITIO NAL INCOME HAS BEEN OFFERED DURING THE COURSE OF SURVEY. WHICH ITSELF S IGNIFIES THAT THE BASIS OF ADDITION IS VERY DEVOID AND IN IGNORANCE OF FACTS A ND CIRCUMSTANCES OF THE CASE. FURTHER, LD. CIT(A) ALSO IN HIS ORDER EXTENSIVELY RELIED ON THE STATEMENT OF MR. DILIP DIDAWANI. WHICH IS IN IGNORANCE OF THE FA CT THAT ON BEING AWARE THAT THE ENTIRE ASSESSMENT PROCEEDING ARE GOING ON WITH THE PRESUMPTION THAT ASSESSEE SURRENDERED ITS SALE OF RS. 4,06,37,894/- MADE TO M/S PUNJ LLOYD LTD, ASSESSEE THE RETRACTED THE SHUFFLED STATEMENT OF MR. DILIP DIDAWANI. AS A 7 ITA NO. 109/DEL/2016 MATTER OF FACT THE ONE AND ONLY BASIS OF ADDITION I N THE PRESENT CASE I.E THE STATEMENT OF DIRECTOR OF ASSESSEE COMPANY WAS NEVER MADE AVAILABLE TO ASSESSEE COMPANY AND ASSESSEE COMPANY CAME ACROSS S UCH FACT ONLY AFTER BEING SHOW CAUSED FOR MAKING SURRENDER OF ALLEGED U NDISCLOSED INCOME. PB 41 IS THE COPY OF REPLY DATED 19.02.2013 FILED BY A SSESSEE IN RESPONSE TO SHOW CAUSE NOTICE, REQUESTING FOR THE STATEMENT OF DIRECTOR OF ASSESSEE COMPANY PB42-46 THE COPY OF REPLY FILED BY ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE EXPLAINING THAT NO SURRENDER WAS EVER MADE BY DIRECTOR OF ASSESSEE COMPANY AND BOTH THE PURCHASES AND SALES I N CONNECTION TO M/S. PUNJ LLOYD LTD. ARE GENUINE. IN THIS REGARD RESPECTFUL SUBMISSION OF THE APPELL ANT WHERE NOTHING HAS BEEN FOUND DURING SURVEY NEGATING THE CLAIM OF THE APPELLANT WHICH IS DULY SUPPORTED BY VOLUMINOUS EVIDENCES NO ADDITION CAN B E MADE SOLELY ON THE BASIS OF STATEMENT DURING SURVEY PROCEEDINGS. IT IS ALSO HELD IN THE FOLLOWING JUDICIAL PRECEDEN TS. REVISIONERRONEOUS AND PREJUDICIAL ORDERASSESSMENT VIS-A-VIS DISCLOSURE DURING SURVEY SEC. 13 3A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH THUS, THE STATEMENT ELICITED DURING THE SURVEY OPER ATION HAS NO EVIDENTIARY VALUEITO DID NOT ACCEPT THE INC OME DECLARED BY THE ASSESSEE AFTER THE SURVEY IN A MECHANICAL WAY, BUT APPLIED HIS MIND TO VARIOUS ASPECTS OF THE MATTER BEFORE COMPLETING THE ASSESSMENTADVANCES ADMITTEDLY RECEIVED BY THE ASSESSEE FROM TWO PARTIE S HAVE BEEN EXPLAINED PARTLY AND THE UNEXPLAINED AMOUNT IS TELESCOPED IN THE INCOME ALREADY DISCLOSEDHENCE, NO SEPARATE ADDITION WAS MADEALLE GED ADMISSION IN THE STATEMENT OF THE MANAGING PARTNER WAS ONLY A QUALIF IED ONE AND THE ASSESSEE HAD CLEARLY EXPLAINED THE SAME TO THE AO BY COGENT MATERIALS ORDER PASSED BY THE AO CANNOT BE SAID TO BE ERRONEOUS OR PREJUDI CIAL TO THE INTERESTS OF REVENUECIT NOT JUSTIFIED IN INVOKING POWERS UNDER S. 263- PAUL MATHEWS & SONS VS. CIT, (2003) 263 ITR 101 (KER) - INCOME FROM UNDISCLOSED SOURCES ADDITIONADDITION ON THE BASIS OF 8 ITA NO. 109/DEL/2016 STATEMENT RECORDED DURING SURVEY UNDER S. 133A SEC. 133A DOES NOT EMPOWER ANY IT AUTHORITY TO EXAMINE ANY PERSON ON O ATH, HENCE, ANY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSIO N MADE DURING SUCH STATEMENT CANNOT, BY ITSELF, BE MADE THE BASIS FOR ADDITIONTHIS VIEW IS CLEARLY SUPPORTED BY CBDT CIRCULAR DT. 10TH MARCH, 2003NO SUBSTANTIAL QUESTION OF LAW ARISES - CIT VS. S. KHADER KHAN SONS, (2008) 300 ITR 157 (MAD) IN FACT, THE ABOVE DECISION HAS BEEN APPROVED BY HO NBLE SUPREME COURT AS UNDER:- INCOME FROM UNDISCLOSED SOURCES ADDITIONADDITION ON THE BASIS OF STATEMENT RECORDED DURING SURVEY UNDER S. 133A SEC. 133A DOES NOT EMPOWER ANY IT AUTHORITY TO EXAMINE ANY PERSON ON O ATH AND, THEREFORE, ANY ADMISSION MADE IN A STATEMENT RECORDED DURING SURVE Y CANNOT, BY ITSELF, BE MADE THE BASIS FOR ADDITION CIT VS. S. KHADER KHAN SON 79 DTR 184 (SC) THEREFORE, EVEN IF, IT IS ASSUMED THOUGH DENIED THA T ASSESSEE SURRENDERED THE INCOME IN HIS STATEMENT RECORDED IN THE SURVEY, YET IT CANNOT BE ADDED BASED UPON SUCH STATEMENT ALONE IN VIEW OF THE ABOV E JUDICIAL DECISIONS, MORE SO WHEN THERE WAS NO CORROBORATIVE EVIDENCE. THEREF ORE, PRAYER OF THE APPELLANT IS THAT ADDITION MADE BY LD. AO ON THE BA SIS OF ALLEGED SURRENDER IN ANY CASE CANNOT BE SUSTAINED AND MAY PLEASE BE SO H ELD. ADVERSE OBSERVATIONS OF LD. AO ARE MET AS UNDER:- 1. LD. AO HAS MENTIONED AT PAGE 5-6 OF THE ASSESSM ENT ORDER THAT DIRECTOR OF THE APPELLANT COMPANY HAS ADMITTED THAT THE GOODS W ERE NEVER DELIVERED AND SALES HAVE ALSO BEEN ADMITTED BY THE DIRECTOR AS BO GUS. RELIANCE IS PLACED ON WRITTEN SUBMISSION FILED IN T HIS REGARD BEFORE LD. CIT(A) AT PAGE 9-11. (PB 73-75) 1. LD. AO HAS MENTIONED AT PAGE 6 OF THE ASSESSMEN T ORDER THAT SOME ENQUIRIES HAVE REVEALED THAT RAM SARUP INDUSTRIES L TD. HAS PROVIDED ACCOMMODATION ENTRIES OF BOGUS SALES TO PUNJ LLOYD LTD. AND MJ PUNJ LLOYD LTD. HAS INFLATED ITS EXPENSES. 9 ITA NO. 109/DEL/2016 RELIANCE IS PLACED ON WRITTEN SUBMISSION FILED IN T HIS REGARD BEFORE LD. CIT(A) AT PAGE 11. (PB75) 1. LD. AO HAS MENTIONED AT PAGE 9 OF THE ASSESSMEN T ORDER THAT APPELLANT HAS RETRACTED THE SURRENDER AFTER TWO AND HALF YEAR S. RELIANCE IS PLACED ON WRITTEN SUBMISSION FILED IN T HIS REGARD BEFORE LD. CIT(A) AT PAGE 11-12. (PB 75-76) LD. AO THEREAFTER HAS WRITTEN EXTENSIVELY ON SAW R EGARDING ADMISSION AND ITS RETRACTION. RELIANCE IS PLACED ON WRITTEN SUBMI SSION FILED IN THIS REGARD BEFORE LD. CIT(A) AT PAGE 12. (PB 76) 1. LD. AO IN HIS REPLY DATED 29.10.2014 TO REMAND R EPORT HAS ALLEGED THAT ALL THE BILLS AND DOCUMENTS IN RESPECT OF EACH THIRTY F IVE TRUCKS HAVE BEEN PRODUCED, BUT NO EVIDENCE HAS BEEN PRODUCED BY ASSE ESSEE IN RESPECT OF BARRIER CROSSING FEE INCURRED BY THEM IN RESPECT OF ANY OF THE 35 TRUCKS. THIS ALSO GOES TO PROVE THAT IN FACT NO SALES HAVE BEEN MADE AND, THESE ARE JUST BOOK ENTRIES AND ONLY BILLS HAVE BEEN ARRANGED THRO UGH ENTRY OPERATOR. THIS FACT FURTHER FINDS SUPPORT FROM THE FACT THAT JUST FROM 16 TH TO 19 TH SEP, 2009 35 TRUCKS OF GOODS WERE SENT BUT TRANSPORTER HAS NO DO CUMENTARY EVIDENCE OF EXPENSES INCURRED IN RESPECT OF BARRIER FEE ETC. EV EN IN RESPECT OF SINGLE TRUCK. SINCE THESE ARE JUST ACCOMMODATION ENTRIES. IN REPLY, IT IS SUBMITTED THAT ASSESSE HAVE PRODUC ED VOLUMINOUS EVIDENCES TO SHOW THE GENUINENESS OF THE TRANSACTION ENTERED AND WHEREAS THE BARRIER CROSSING FEE IS CONCERNED, IT IS A VERY NOMINAL EXP ENSE INCURRED BY TRANSPORTERS. NON AVAILABILITY OF DOCUMENTS IN RESP ECT OF SUCH PETTY EXPENSE CANNOT NEGATE THE ALL THE EVIDENCES PLACED ON RECOR D PROVING THE GENUINENESS OF CLAIM OF ASSESSEE. ADVERSE OBSERVATIONS OF LD. CIT (A) ARE MET AS UNDE R:- 1. LD. CIT(A) AT PARA 10.8 OF PG 19 OF THE ORDER HA S ALLEGED THAT THE STATEMENT GIVEN DURING SURVEY CANNOT BE OVERLOOKED AND THE CO NTENTION THAT THE SALE AND PURCHASE BOTH ARE JUST BOOK ENTRIES CANNOT BE N EGATED. STATEMENT GIVEN DURING SURVEY IS PRIME DOCUMENT. IT IS NOT LENGTHY ENOUGH TO SAY THAT MR. DILIP DIDWANIA GOT EXHAUSTED, TORTURED AND FORCED TO GIVE THIS INCORRECT STATEMENT 10 ITA NO. 109/DEL/2016 WITHOUT APPLICATION OF MIND. THE LAST LINE IS IN TH E HANDWRITING OF MR. DILIP DIDWANIA ITSELF. THEREFORE, THERE IS NO REASON TO D ISPUTE THE CONTENT OF THE STATEMENT. IN REPLY, IT IS SUBMITTED THAT IT IS QUITE STRANGE ON THE PART OF LD. AO TO ASK FOR CORROBORATIVE EVIDENCE OF COERCION WHEREAS LD. AO HAS MADE ADDITION IN THE HANDS OF THE APPELLANT WITHOUT ANY CORROBORATIV E EVIDENCE. COPIES OF STATEMENTS WERE NOT GIVEN AND WHEN THESE COPIES WER E GIVEN, THE APPELLANT READ THEM AND THEN FILED HIS RETRACTION. PB 42-46 IS THE COPY OF LETTER DATED 21.02.2013 FILED BY APP ELLANT DULY EXPLAINING THAT THE SUCH STATEMENT IS THE OUTCOME O F PROLONGED INTERROGATION AS DIRECTOR OF ASSESSEE COMPANY WOULD NEVER HAVE MA DE SUCH A STATEMENT IN HIS RIGHT SENSES. MERE SIGNING OF THE STATEMENT AT THE END OF THE DO CUMENT WILL NOT AUTHENTICATE THE DOCUMENT AS MR. DILIP DIDWANIA NEV ER GOT A CHANCE TO READ THE STATEMENT AND THE STATEMENT WAS NOT MADE AVAILA BLE TO THE ASSESSEE EVEN THEREAFTER. PB41 IS THE COPY OF LETTER DATED 19.02.2013 FILED BY ASS ESSEE REQUESTING FOR THE STATEMENT WHICH ITSELF PROVES ASSESSEE WAS NEVER AWARE OF SUCH RESHUFFLING OF HIS WORDS. IT IS A MATTER OF COMMON KNOWLEDGE THAT HIGH HANDE DNESS AND ARBITRARY ATTITUDE IS RESORTED IN THE SURVEY PROCEEDINGS AND IN THE PRESENT CASE, IT IS EVIDENT BY THE SHEER FACT THAT THOUGH THERE WAS NO EVIDENCE AGAINST THE ASSESSEE TO THIS FACT YET DIRECTOR OF ASSESSEE COMP ANY WAS MADE TO SPEAK IN THIS FASHION OBVIOUSLY, A PERSON FACING INTERROGATI ON IN INTIMIDATED ENVIRONMENT CONTINUOUSLY IS BOUND TO BREAKDOWN AS H APPENED IN THE PRESENT CASE. 1. LD. CIT(A) AT PARALL.4 OF PG 20 OF ORDER HAS HEL D THAT SALES ARE BOGUS THIS MEANS THE BENEFIT OF SUCH SALES HAS BEEN PASSED ON TO THE PURCHASER BY PROVIDING MERE BOOK ENTRY OF PURCHASE IN THE HANDS OF THE RECIPIENT. IT IS A COMMON PRACTICE WHILE PROVIDING SUCH BOGUS ENTRIES THAT A SMALL PERCENTAGE OF SUCH BOGUS ENTRY IS TAKEN BY SUCH ENTRY PROVIDER AS COMMISSION, OVER AND 11 ITA NO. 109/DEL/2016 ABOVE THE AMOUNT. SINCE IN THE PRESENT CASE THE ENT RY HAS BEEN PROVIDED BY FOR RS. 4,05 CRORES. IT IS HELD THAT 0.25% OF SUCH AMOUNT HAS BEEN RECEIVED BY THE APPELLANT IN THE FORM OF COMMISSION. ACCORDINGL Y, RS. 1,01,400/- IS TREATED AS COMMISSION INCOME OF THE APPELLANT COMPA NY. IN THIS REGARD, RESPECTFUL SUBMISSION OF THE APPEL LANT THAT LD. CIT(A) ASSUMED THAT THE APPELLANT MUST HAVE RECEIVED COMMI SSION AT THE RATE OF 0.25% ON THE AMOUNT OF SALES MADE BY ASSESSEE WITHO UT ANY COBORATIVE EVIDENCE IN THIS REGARD. LD. CIT(A) HIMSELF HAS ADM ITTED THAT NOTHING HAS BEEN FOUND ON THE RECORDS TO SHOW THAT PAYMENT RECEIVED FROM M/S. PUNJ LLOYD LTD. HAS BEEN RETURNED BY ASSESSEE AND ALSO THE PAYMENT MADE BY ASSESSEE TO M/S RAMSARUP UTPADAK WAS ALSO NOT FOUND TO BE RECEI VED BACK BY THE ASSESSEE. IN THE LIGHT OF THE ABOVE IT IS VEHEMENTLY CLEAR TH AT NOT EVEN AN IOTA OF EVIDENCE HAS BEEN FOUND BY CIT(A) PROVING THAT THE TRANSACTION ENTERED IS BOGUS. THEREFORE, SUSTAINMENT OF ADDITION OF RS. 1, 01,400/- IS NOTHING BUT THE OUTCOME OF SURMISES, CONJECTURES AND REFLECTION OF PRE BIASED MIND SET OF THE LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CIT(A) HELD AS UNDER:- 11.2 IN VIEW OF THE ABOVE, AND AS ALSO RECORDED BY THE AO THAT THE SALES AND PURCHASES BOTH ARE MERELY BOOK ENTRIES, T HE SAME IS LIABLE TO BE REDUCED FROM THE SALES AS WELL AS PURCHASES, CON SIDERING THAT SINCE THERE IS NO SALES, THERE CANNOT BE ANY PURCHASES. S INCE, THERE IS NO PURCHASE OR SALE THE ELIMINATION OF SAME FROM THE P ROFIT AND LOSS ACCOUNT WILL ONLY SHOW SURPLUS BETWEEN SALE AND PURCHASE, I F ANY. ACCORDINGLY, THE ADDITION ON THE BASIS OF SALES ALONE CANNOT BE TENABLE. FURTHER, THE SALES HAVE ALREADY BEEN RECORDED IN THE BOOKS, HENC E ANY ADDITION IN THIS REGARD AMOUNTS TO DOUBLE ADDITION. 11.3 LOOKING TO THE FACTS OF THIS CASE AND IN LAW IT IS HELD THAT DURING 12 ITA NO. 109/DEL/2016 SURVEY PROCEEDINGS NO SURRENDER OF ADDITIONAL INCOM E WAS OFFERED BY THE APPELLANT. FURTHER, SINCE SALES AND PURCHASES BOTH ARE BOGUS AS STATED IN THE STATEMENT BY THE DIRECTOR OF THE APPELLANT AND ALSO MENTIONED BY THE AO, HENCE THERE COULD BE NO ADDITION ON THE BASIS O F BOGUS ENTRIES ALONE. THE BOGUS PURCHASES OFFSETS THE BOGUS SALES AND NO OTHER CORROBORATIVE/SUPPORTING EVIDENCE FOUND TO SAY THAT ANY CASH HAS BEEN PAID OR RECEIVED TOWARDS SUCH TRANSACTIONS, OUT OF BOOKS. NOTHING HAS BEEN FOUND DURING SURVEY TO CONCLUDE THAT THE APPEL LANT IS GENERATING ADDITIONAL UNACCOUNTED INCOME. IN VIEW OF THE ABOVE , THE ADDITION MADE ON ACCOUNT OF BOGUS ENTRIES IS NOT TENABLE AND LIAB LE TO BE DELETED. THE CIT(A) HAS GIVEN A DETAILED FINDING THAT NOTHIN G HAS BEEN FOUND DURING SURVEY TO CONCLUDE THAT THE ASSESSEE IS GENERATING ADDITIONAL UNACCOUNTED INCOME. IN-FACT, ALL THE DETAILS RELATING TO THE S ALES AS WELL AS PURCHASES WERE GIVEN DURING THE ASSESSMENT PROCEEDINGS AND THE BOO KS WERE NOT AT ALL REJECTED BY THE ASSESSING OFFICER, WHICH WAS PROPERLY MAINTA INED BY THE ASSESSEE. HENCE, THERE IS NO NEED TO INTERFERE WITH THE FINDI NGS OF THE CIT(A). THUS, THE APPEAL OF THE REVENUE DOES NOT SURVIVE. 8. THE ASSESSEE HAS FILED APPEAL UNDER RULE 27 OF T HE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 RELATING TO THE CONTRARY FINDI NGS GIVEN BY THE CIT(A) TO THE FACTUAL ASPECT OF THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). AS REGARDS THE OBSERVATION OF TH E CIT(A) THAT SALES ARE BOGUS ARE CONTRARY TO THE FINDINGS OF THE CIT(A) IN THE O RDER ITSELF AS WELL AS WHILE GOING THROUGH THE RECORDS ALSO THE SALES ARE PROPER LY EXPLAINED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES. WHEN WE LOOKED INTO THE EVIDENCES, WE FOUND THAT ALL THE ENTRIES AS WELL AS BILLS AND VOUCHERS OF EACH TRANSACTION ALONG WITH TRANSPORTATION RECEIPTS AND DETAILS WERE METICULOUS LY GIVEN BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A), AM OUNTING TO RS. 4,05,53,574/-. THEREFORE, THE OBSERVATION MADE BY THE CIT(A) IS CO NTRARY TO THE RECORDS. THUS, WE ALLOW APPLICATION FILED BY THE ASSESSEE UNDER RU LE 27 OF THE INCOME TAX RULES, 1963. 13 ITA NO. 109/DEL/2016 9. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF AUGUST, 2021. SD/- SD/- (ANIL CHATURVEDI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED : 10/08/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI