The ACIT, Gandhidham Circle, GANDHIDHAM V. M/s Odhavram Construction Suppliers, GANDHIDHAM

ITA 1142/RJT/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67226 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MEENA I
• Assessee Lawyers: DM RINDANI
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 1142 / RJT/20 09 . I I / ASSESSMENT YEAR S 20 05 - 06 INCOME TAX OFF ICER WARD (2), PLOT NO.32, SECTOR - 3, GANDHIDHAM - KUTCH . ( / APPELLANT) VS. M/S ODHAVRAM CONSTRUCTION SUPPLIERS, SRC GODOWN NO.2, KHANNA MARKET, GANDHIDHAM - KUTCH. PAN: AAAFO3426A 2W / RESPONDENT N / REVENUE BY SHRI S L MEENA I / ASSESSEE BY SHRI D M RINDANI /DATE OF HEARING 16.1 .2013 / DATE OF PRONOUNCEMENT 11.4. 2013 / ORDER .. , R / T. K. SHARMA, J. M . THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 30.9.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2005 - 06 . 2 . BRIEF FACTS LEADING TO THE CONTROVERSY INVOLVED IN THIS APPEAL ARE THAT THE ASSESSEE IS A FIRM, ENGAGED IN TRADING OF CONSTRUCTION MATERIAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FI LED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.29,560/ - . THE ASSESSEE HAS SHOWN TURNOVER OF RS.11,73,42,762/ - AND NET PROFIT OF RS.29,560/ - . THE GROSS PROFIT RATIO FOR THE YEAR COMES AT 0.84% AND NET PROFIT COMES AT 0.16% AS AGAINST THE GROSS RATIO FO R THE PRECEDING YEAR AT 2.01% AND NET PROFIT RATIO AT 0.51% ON TURNOVER OF RS.3,81,81,389/ - . THUS, THERE IS A STEEP FALL IN THE TRADING PROFITS IN COMPARISON TO THAT OF THE PRECEDING YEAR. THE AUDITOR HAS MENTIONED IN THEIR TAX - AUDIT - REPORT THAT THEY ARE NOT IN A P OSITION TO GIVE THE QUANTITATIVE DETAILS OF OPENING STOCK, PURCHASES AND SA LES IN THE ABSENCE OF INFORMATION MADE AVAILABLE TO THEM . 3. AFTER MAKING AFORESAID OBSERVATIONS, IN THE ASSESSMENT ORDER, THE AO MADE AN ADDITION OF RS.3 1,48,561/ - ON ACCOUNT OF NEGATIVE STOCK . THE POSITION ITA NO.1142/RJT/2009. 2 INDICATING THE NEGATIVE STOCK IN THE MONTHS OF APRIL, MAY, JUNE, JULY, AUGUST AND DECEMBER 2004 AND JANUARY, FEBRUARY 20 0 5 HAS TABULATED BY THE AO AT PAGE 4 OF THE ASSESSMENT ORDER. 3.1 IN THE ASS ESSMENT ORDER, THE AO MADE FURTHER ADDITION OF RS.19,50,277/ - BY REJECTING THE BOOKS OF ACCOUNT AND ESTIMATED GP AT THE RATE OF 2.50% AS AGAINST GP DECLARED BY THE ASSESSEE AT THE RATE OF 2.42% IN THE ASSESSMENT YEAR 2002 - 03, 2.81% IN THE ASSESSMENT Y EAR 20 0 3 - 04 AND 2.01% KIN THE ASSESSMENT YEAR 2004 - 05. THE REASONING GIVEN BY THE AO FOR MAKING THIS ADDITION CAN BE SUMMARIZED AS UNDER: A) THE ASSESSEE HAS NOT PRODUCED THE COMPLETE SALES AND PURCHASE BILLS FOR VERIFICATION OR EVEN ADDRESS OF BUYERS AND SUPPLIERS; B) THE ASSESSEE HAS NOT MAINTAINED THE QUANTITATIVE RECORD THROUGH IT HAS ADMITTED IN REPLY DATED 15.12.20 0 0 THAT THERE ARE ONLY FEW ITEMS, MAINTAINING PHYSICAL QUANTITY IS MORE PRACTICABLE . THUS, QUANTITY OF STOCK SHOWN COULD NOT BE VERIFIED. C) THE ASSESSEE HAS ADMITTED THAT MAINTAINING STOCK REGISTER IS NOT P RACTICAL. D) THE ASSESSEE HAS UNDERVALUED ITS CLOSING STOCK AS DISCUSSED IN PARAGRAPH 4.1 OF THE ASSESSMENT ORDER. E) AS PER THE WORKING OF THE ASSESSEE ITSELF, THERE IS PE AK NEGATIVE STOCK OF RS.17,61,887/ - IN THE MONTH OF JULY 20 0 4. NO EXPLANATION ALONG WITH SUPPORTING EVIDENCE IS PROVIDED BY THE ASSESSEE. 3.2 T HE THIRD ADDITION MADE BY THE AO IS IN RESPECT OF UNEXPLAINED LOAN OF RS.35,00,000/ - IN RESPECT OF FOLLOWI NG CREDITORS: I) JAGDISH KUMAR BHANUSHALI RS.4,20,000/ - II) HARINDER SINGH MINHAS RS.3,00,000/ - III) SHIV ENTERPRISES RS.20,00,000/ - IV) VISHRAM BHAL LAXMIDAS RS.7,80,000/ - TOTAL RS.35,00,000/ - 3.3 THE REASONING GIVEN BY THE AO FOR MAKING THIS ARE THAT THE ASSESSEE HAS NOT PROVED IDENTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AND TRUSTWORTHINESS OF THE CREDITORS. 3.4 . FINALLY, THE AO ALSO DISALLOWED THE CA PITAL INTRODUCED BY THE ASSESSEE PARTNERS AMOUNTING TO RS.9,35,134/ - AS UNEXPLAINED . ACCORDING TO THE AO, THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE ABOVE DEPOSITORS . ITA NO.1142/RJT/2009. 3 4 . ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION OF RS.31,48,561/ - MA DE ON ACCOUNT OF UNEXPLAINED PURCHASES MAINLY ON THE GROUND THAT IN THIS ASSESSMENT YEAR, THE ASSESSEE HAS ACHIEVED ALL TIME HIGH TURNOVER OF 307% AS COMPARED TO THE PRECEDING YEAR. THE BULK SALE OF ABOUT 59.76% WAS ONLY TO A SINGLE PARTY ALONG VI Z M/S SAW PIPES LIMITED AT COMPETITIVE RATE. THE ASSESSEE USED TO MANAGE DIRECT DELIVERY OF BULK MATERIALS FROM THE SUPPLIERS TO THE DOOR STEP OF THE PURCHASERS AND BILLS WERE RAISED AT ONCE. THE CORRESPONDING BILLS FROM THE SUPPLIER WOULD BE RECEIVED ON LATER DATE AND RECORDED IN BOOKS ACCORDINGLY. IT WAS CONTENDED THAT THE PEAK VALUE OF THE STOCK WORKED OUT BY THE AO WAS INCLUSIVE OF PROFIT MARGIN , WHEREAS THE PEAK VALUE WAS NEARLY RS.17.62 LAKHS THAT TOO, DUE TO ERRONEOUS POSTING OF PURCHASE ON LATER DATE. THE LD. CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DELETED FOR THE DETAILED REASONS GIVEN IN THE IMPUGNED ORDER. 4. 1 WITH REGARD TO THE GP ADDITION, BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT BULK SALE ABOUT 59.76 TO A SINGLE PARTY ALONG AT VERY COMPETITIVE RATE DEFINITELY HAD BEARING UPON THE GROSS PROFIT RATIO. HE ACCORDINGLY, APPLIED THE GP RATE AT THE RATE OF 1.5% AND RESTRICTED THE GP ADDITION AND ALLOWED THE RELIEF OF RS.11,73,429/ - . 4. 2 . IN RESPECT OF UNE XPLAINED LOAN OF RS.35,00,000/ - , BEFORE THE LD. CIT(A), THE ASSESSEE FURNISHED THE FRESH EVIDENCE. THE AO OBJECTED TO THE FRESH AND ADDITIONAL EVIDENCE KEEPING IN VIEW THE PROVISIONS OF SECTION 46A OF THE INCOME TAX RULES 1962 . HE ISSUED SUMMONS TO A LL THE FOUR CREDITORS AND EXAMINED THREE CREDITORS. THE FOURTH CREDITOR DID NOT RESPOND TO SUMMON , THOUGH IT WAS SERVED UPON HIM. THE AO EXAMINED THREE CREDITORS AND THEY CONFIRMED TO HAVE GIVEN THE LOANS TO THE ASSESSEE. THEY WERE ASSESSED TO TAX AND PRODUCED THE BANK STATEMENTS. ON THE BASIS OF REMAND REPORT THE LD. CIT(A) DELETED THE ADDITION OF RS.35,00,000/ - . 4. 3 FINALLY, IN THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION OF RS.9,35,134/ - MADE ON ACCOUNT OF CAPITAL INTRODUCED BY THE ASSESSEE AS CAPITAL ITA NO.1142/RJT/2009. 4 OF THE PARTNERS FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PANKAJ DYESTUFF INDUSTRIES IN IT NO.241 OF 1993 AND ALSO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NARAYANDAS KEDARNATH V/S CIT REPORTED IN 22 ITR 18 (BOM) . 5. 0 AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL BY TAKING FOLLOWING GROUNDS : 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.31,48,561/ - MADE ON ACCOUNT OF UNEXPLAINED PURCHASES 02. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING GP ESTIMATE ADOPTED @ 1.5% INSTEAD OF 2.5% ADOPTED BY THE AO AND GRANT RELIEF OF RS.11,73,429/ - OUT OF ADDITION OF RS.19,50,277/ - 03. THE LD. CIT( A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.35,00,000/ - MADE ON ACCOUNT OF UNEXPLAINED LOAN; 04. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.9,35,134/ - MADE ON ACCOUNT OF UNEXPLAINED CAPITAL; 05. THA T ON FACTS OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO TO THE ABOVE EXTENT. 06 IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT 5. 1 . AT THE TIME OF H EARING BEFORE US, ON BEHALF OF THE REVENUE SHRI S.L.MEENA, APPEARED AND PRODUCED REMAND REPORT DATED 14.5.2009 SUBMITTED BY THE AO BEFORE THE LD. CIT(A) . HE POINTED OUT THAT THE ASSESSEE HAS NOT MAINTAINED THE STOCK REGISTER. BEFORE THE AO, THE ASSES SEE FAILED TO PROVIDE POSTAL ADDRESSES OF THE PARTIES FROM WHOM PURCHASES WERE MADE. EVEN CONFIRMATION FROM 19 CREDITORS WERE NOT FURNISHED. THE AO, THEREFORE , WAS OF THE OPINION THAT PURCHASES WERE LARGELY NOT VERIFIABLE. THE STOCK TALLY PREPARED BY THE AO SHOWED THAT IN THE MONTH OF JULY THERE WAS NEGATIVE STOCK OF 31.48 LAKHS WHICH MEANS THAT THE SALES EXCEEDED THE PURCHASES. ON RE - WORKING THE ASSESSEE ADMITTED CORRECT FIGURES WOULD BE 17.62 LAKHS. BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT DISCREPANCY WAS ON ACCOUNT OF DELAYED POSTING OF PURCHASE BILLS IN THE BOOKS OF ACCOUNTS, BUT HE WAS NOT ABLE TO SUBSTANTIATE HIS SUBMISSIONS BY PRODUCING THE DETAILS OF THE RELEVANT BILLS. THE AO, THEREFORE TOOK FIGURES OF RS. 31,48,561/ - AS UNEX PLAINED PURCHASED ALLEGEDLY MADE OUT OF ITA NO.1142/RJT/2009. 5 BOOKS. THE LD. DR POINTED OUT THAT TO MEET THE ORDERS BY THE DUE DATES THE ASSESSEE HAD MADE PURCHASE OUTSIDE THE BOOKS , OUT OF THE UNEXPLAINED MONEY SINCE THE FUNDS/STOCKS WERE NOT AVAILABLE IN THE BOOKS. SUBSE QUENTLY, HE WOULD HAVE RECOUPED THESE SUMS/STOCKS WHEN THERE WAS SUFFICIENT MONEY IN THE BOOKS TO SHOW PURCHASE OF MATERIALS. THIS INFERENCE CAN BE DRAWN FROM THE FACT THAT ULTIMATELY THE FIGURES OF OPENING STOCK + PURCHASE + GROSS PROFIT = SALES + CLOSI NG STOCK A S PER THE B OOKS OF A CCOUNTS. THEREFORE, WHATEVER MONEY WAS IMPLANTED IN THE BUSINESS HAS BEEN TAKEN OUT. THIS SHORTAGE THEREFORE CLEARLY REPRESENT THE UNEXPLAINED MONEY BEING AVAILABLE WITH THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT AND THERE FORE THE SAME ARE LIABLE TO BE TAXED U/S 69 A OF THE INCOME TAX ACT 1961 (THE ACT) . 5. 2 . WITH REGARD TO THE DELETION OF AFORESAID ADDITION BY THE LD. CIT(A) , SAYING THAT THERE CANNOT BE ANY TRANSACTION WHEN THE SALES WERE RECORDED AND PURCHASE WERE UNRECORDED. THERE WAS NOTHING ON RECORD TO SUGGEST THAT THE PURCHASE WERE FROM UNDISCLOSED INCOME . THE LD. DR POINTED OUT THAT TH US FINDING OF THE LD. CIT(A) IS INCORRECT IN VIEW OF THE FACT THAT THE BOOKS OF ACCOUNTS CLEARLY SHOW THAT SALES WERE MAD E BEFORE THE PURCHASE WHICH IS PRACTICALLY IMPOSSIBLE. THE SALES CAN BE MADE ONLY IF THE PURCHASE ARE THERE, IN CASE THE PURCHASE ARE NOT OUT OF THE STOCK AVAILABLE WITH THE FIRM THE ONLY PRESUMPTION IS THAT THE PURCHASE WERE MADE OUTSIDE THE BOOKS OF ACCOUNT. 5. 3 ON THE OTHER HAND, THE LD. A R SUBMITTED THAT THE AO REJECTED THE BOOKS OF ACCOUNT S AND ESTIMATED THE GP. ONCE THE BOOKS OF ACCOUNTS ARE REJECTED AND PROFIT IS ESTIMATED, NO SEPARATE ADDITIONS SHOULD BE MADE IN THE BOOK RESULT. THE ASSE SSEE HAS VALUED STOCK AT COST. THUS, OPENING STOCKS ARE ACCEPTED, THEREFORE, ADDITION ON ACCOUNT OF UNEXPLAINED PURCHASES AND STOCK VALUATION CANNOT BE MADE. IN SUPPORT OF THIS LD.A R RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. KASHIRAM TEXTILE MILLS P. LTD. REPORTED IN 284 ITR 61 (GUJ) AND CIT VS. P. PRAVIN AND CO.(2005) 274 ITR 534 ( GUJ ) . CONTINUING HIS ARGUMENTS, THE A R OF THE ASSESSEE PLEADED THAT THE GP SHOWN BY THE ASSESSEE IN THIS ASSESSMENT YEAR IS .08%. THE GP ITA NO.1142/RJT/2009. 6 ASSESSED BY THE AO IS 2.5% AND THE LD. CIT(A) KEEPING IN VIEW THE SPECIFIC FACTS OF THE CASE CONSIDERED GP AT 1.5%. THE LD. AR POINTED OUT THAT THERE IS NO EVIDENCE THAT THE ASSESSEE HAS MADE PURCHASES OUTSIDE THE BOOKS, THEREFORE, THE VIEW TAKE N BY THE LD. CIT(A) DELETING THE ADDITION OF RS.31 , 48,561/ - BE UPHELD. ALTERNATIVELY, HE PLEADED THAT AFTER DEDUCTING THE COST OF SALES, REVISED SHORTAGE OF STOCK( IN RS) COM E S TO RS.17,61,887/ - AND NOT RS.31,48,501/ - . THIS WOULD GET COVERED AND SOURC E THEREOF WOULD GET EXPLAINED /MET OUT OF GROSS PROFIT ADDITION OF RS.11,73,429/ - SUSTAINED BY THE LD. CIT(A). IN SUPPORT OF THIS TELESCOPIC BENEFIT HE POINTED OUT THAT 70% OF SALES ARE MADE IN THE FIRST FOUR MONTHS HENCE MOST OF THE PROFITS IS EA RNED IN THE FOUR MONTHS. WITH REGARD TO GP, HE SUBMITTED THAT RATE OF GP 1.5% APPLIED BY THE LD. CIT(A) IS FAIR AND REASONABLE AS 60% OF SALES ARE TO A SINGLE PARTY.. 6. IN REJOINDER, THE LD. DR POINTED OUT THAT GP DECLARED BY THE ASSESSEE AT 2.42% IN THE ASSESSMENT YEAR 2002 - 03, 2.81% IN THE ASSESSMENT YEAR 2003 - 04 AND 2.01% KIN THE ASSESSMENT YEAR 2004 - 05. THE AVERAGE GP FOR THE LAST THREE ASSESSMENT YEARS COMES TO 2.41%. HE ACCORDINGLY POINTED OUT THAT LOOKING INTO PAST HISTORY OF THE CASE, THE GP APPLIED BY THE AO AT 2.5% IS FAIR AND REASONABLE AND THE LD. CIT(A) IS NOT JUSTIFIED IN REDUCING THE SAME T O 1.5%. 7 . HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN RESPECT OF ADDITION CONTESTED BY THE REVENUE IN GROUND NO.1 AND 2, IT IS PERTINENT TO NOTE THAT IN THE ASSESSMENT ORDER THE AO HAS WORKED OUT UNEXPLAINED PURCHASES AT RS.31,48,501/ - . ADMITTEDLY, THERE IS NO EVIDENCE INDICATING THE UNEXPLAINED PURCHASES MADE BY THE ASSESSEE OUTSI DE THE BOOKS OF ACCOUNT. AT THE SAME TIME, FIGURE WORKED OUT BY THE AO IN THE ASSESSMENT ORDER CANNOT BE IGNORED AS NEITHER BEFORE AO, NOR BEFORE LD.CIT(A) THE ASSESSEE HAS PRODUCED THE BILLS OF PURCHASES OR EVIDENCES THAT THE PAYMENTS OF PURCHASE BIL LS WERE MADE ON LATTER DATE. BEFORE US, THE LD. A R ADMITTED THAT THE REVISED SHORTAGES IN STOCK COMES TO RS.17,61 , 887/ - . THEREFORE, WE ARE OF THE VIEW THAT THIS WORKING FURNISHED BY THE LD. A R IS FAIR AND REASON ABLE , W E ARE THEREFORE OF THE VIEW IN T HE IMPUGNED ORDER, THE LD. ITA NO.1142/RJT/2009. 7 CIT(A) IS NOT CORRECT IN DELETING THE ENTIRE ADDITION OF RS.31,48,501/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED PURCHASES. WE ACCORDINGLY, HOLD THAT CORRECT AMOUNT OF UNEXPLAINED PURCHASES IS RS. 17,61,887 / - AS ADMITTED BY TH E ASSESSEE BEFORE THE AO AND BEFORE US . 7.1 WITH REGARD TO THE GP ADDITION, WE ARE OF THE VIEW THAT L OOKING TO THE PAST HISTORY OF THE CASE, THE GP DECLARED BY THE ASSESSEE IS ON THE LOWER SIDE. ONCE THE BOOK OF ACCOUNTS ARE REJECTED, THE AO HAS NO OPTION BUT TO ESTIMATE THE GP ON THE BASIS OF PAST HISTORY OF THE CASE . THE AVERAGE RATE OF GP FOR LAST THREE YEARS WORKED OUT AT 2.41%. IN THE ASSESSMENT YEAR 20 0 3 - 04, THE GP RATE WAS 2.81%. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, WE ARE OF THE VIEW THAT THE GP ADDITION MADE BY TH E AO IN THE ASSESSMENT YEAR UNDER APPEAL AMOUNTING TO RS.19,50,277/ - BY APPLYING GP RATE OF 2.5% IS FAIR AND REASONABLE. WE ACCORDINGLY RESTORE THE SAME. 7.2 NOW LET US EXAMINE THE PLEA OF THE ASSESSEE TO ALLOW THE BENEFIT OF TELESCOPY I.E WHETHER SET OFF OF ADDITION TO THE EXTENT OF RS.17,61,887/ - ON ACCOUNT OF UNEXPLAINED PURCHASES SUSTAINED (SUPRA) CAN BE ALLOWED AGAINST THE GP ADDITION OF RS.19,50,277/ - . ADMITTEDLY, BULK OF THE PU RCHASES WERE MADE IN FIRST FOUR MONTHS AS IS EVIDENT FROM WORKING AS TABULATED BY THE AO AT PAGE 4 OF THE ASSESSMENT ORDER. THIS ADDITION IS LOWER THAN GP ADDITION OF RS.19,50,277/ - CONFIRMED BY US HEREINABOVE. AFTER GIVING BENEFIT OF TE LESCOPY, WE ARE OF THE VIEW THAT THERE IS NO NECESSITY OF MAKING SEPARATE ADDITION OF RS.17,61,887/ - IN RESPECT OF UNEXPLAINED PURCHASES. HOWEVER, SINCE THIS PL EA OF THE TELESCOPY WAS NOT RAISED EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A ). WE, THEREFORE, RESTORE TH E ISSUE OF ALLOWANCE OF TELESCOPY TO THE FILE OF AO WITH A DIRECTION THAT AO MAY CONSIDER THE SAME AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . WITH REGARD TO THE DELETION OF UNEXPLAINED LOAN OF RS.35,00,000/ - , WE FIND THAT THE LD . CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO AND IN THE REMAND REPORT, THE AO ACCEPTED THAT HE HAS EXAMINED THREE CREDITORS AND THEY ITA NO.1142/RJT/2009. 8 CONFIRMED TO HAVE GIVEN THE LOANS TO THE ASSESSEE. THEY WERE ASSESSED TO TAX AND PRODUCED THE BANK STATEMENTS. ON THE BASIS OF REMAND REPORT THE LD. CIT(A) DELETED THE ADDITION OF RS.35,00,000/ - . SINCE THE AO ACCEPTED THAT THE ASSESSEE HAS DISCHARGED ITS LIABILITY AND THE LD. CIT(A) ON THE BASIS OF AOS ACCEPTANCE DELETED THE ADDITION OF RS.35,00,000/ - . BEFORE US ALSO THE LD. DR COULD NOT BROUGHT ON RECORD TO CONTROVERT THE FINDING OF THE LD. CIT(A). THEREFORE, WE HAVE NO OTHER ALTERNATIVE BUT TO CONFIRM ORDER OF THE LD. CIT(A). ACCORDINGLY WE CONFIRM. THE GROUND NO.3 IS DISMISSED. 9 . WITH REGARD TO DELETIO N OF ADDITION OF RS.9,35,134/ - MADE ON ACCOUNT OF CAPITAL INTRODUCED BY THE ASSESSEE AS CAPITAL OF THE PARTNERS, WE FIND THAT THE LD.CIT(A) OBSERVED AND HELD THAT ALL THE PARTNERS WE R E ASSESSED TO TAX AND FURTHER CAPITAL WAS REFLECTED IN THEIR RESPECTIVE ACCOUNTS THEREFORE, HE HELD THAT THE AO HAS NO CASE TO MAKE ADDITION IN THIS REGARD. HE ACCORDINGLY , DELETED THE ADDITION AND WHILE DELETING THE ADDITION OF RS.9,35,134/ - HE LENT THE SUPPORT FROM THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF PANKAJ DYESTUFF INDUSTRIES (SUPRA) AND ALSO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NARAYANDAS KEDARNATH V/S CIT (SUPRA). BEFORE US ALSO LD. DR FAILED TO CONTRADICT THE FINDINGS OF THE LD.CIT(A). THE LD. DR ALSO COULD NOT BRI NG ON RECORD ANY NEW DECISION OF ANY OTHER COURT TO NULLIFY THE EFFECTS OF THE ABOVE MENTIONED TWO JUDGMENTS. THEREFORE , WE CONFIRMED THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE GROUND NO.4 TAKEN BY THE REVENUE. 1 0 . GROUNDS NO.5 AND 6 ARE ACADEMIC IN NATURE AND HENCE NO SEPARATE ADJUDICATION IS RE QUIRES ACCORDINGLY, WE DISMISS THE SAME. 1 1 . IN THE RESULT, FOR STATISTICAL PURPOSES THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABO VE. SD SD ( D. K. SRIVASTAVA ) (T. K. SHARMA) FOR / ACCOUNTANT MEMBER N / JUDICIAL MEMBER S/ ORDER DATE 11.4. 2013 . /RAJKOT ITA NO.1142/RJT/2009. 9 SRL RJO IO / COPY OF ORDER FORWARDED TO: - 1. / APPELLANT - , . 2W / RESPONDENT - 3. / CONCERNED CIT . 4. - / CIT (A) . 5. 2, , / DR, ITAT, RAJKOT 6. I / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.