The Income-tax Officer, Jammu V. M/s. Golden Tea Store, Jammu

ITA 121/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95053 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GHANSHAM GUPTA
• Assessee Lawyers: RK GUPTA
• Keywords: Peak credit; Revised return
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.121(ASR)/2014 ASSESSMENT YEAR:2007-08 PAN: AAGFG9697M INCOME TAX OFFICER, VS. M/S. GOLDEN TEA STORE, WARD 2(1), JAMMU. JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. GHANSHAM GUPTA, DR RESPONDENT BY:SH.R.KGUPTA, CA DATE OF HEARING: 22/09/2015 DATE OF PRONOUNCEMENT: 17/11/2015 ORDER THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2007-08, AGAINST THE ORDER DATED 26.12.2013, PASSED BY THE LD.CIT(A), JAMMU. THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF ADDITION IN RESPECT OF CASH INTRODUCED IN THE BOOKS OF ACCOUNT FROM UND ISCLOSED SOURCES FOR WHICH NO EXPLANATION HAS BEEN FURNISHED . 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF CASH PAY MENTS OUTSIDE THE BOOKS OF ACCOUNT FROM UNDISCLOSED SOURC ES. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF ADDITION MADE IN RESPECT OF DISCOUNT RECEIPT NOT SHOWN BY THE ASSESS EE. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF ADDITION MADE IN RESPECT OF DIFFERENCE IN CLOSING BALANCE WITH M/S. KANCHAN ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 2 ENTERPRISES FOR WHICH NO EXPLANATION FURNISHED BY T HE ASSESSEE. 2. APROPOS GROUND NO.1, THE AO OBSERVED THAT THE AS SESSEE WAS DEALING IN TRADING OF TEA, WASHING SOAP, ETC., AND THAT THE FOLLOWING ACCOUNT OF M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR, WAS APPEARING IN THE BOOKS OF THE ASSESSEE: ACCOUNT : M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR DATE PARTICULARS TYPE DEBIT CREDIT BALANCE 26.4.2006 BY CASH RECPT - 1,00,000 1,00,000 CR. 28.4.2006 TO CASH PYMT 1,00,000 - 0 19.5.2006 BY CASH RECPT - 1,00,000 1,00,000 CR 29.5.2006 TO CASH PYMT 1,00,000 - 0 02.06.2006 BY CASH RECPT - 1,00,000 1,00,000 CR. 24.06.2006 BY CASH RECPT - 1,00,000 2,00,000 CR. 25.07.2006 TO CASH PYMT 1,00,000 - 1,00,000 CR. 25.08.2006 TO CASH PYMT 1,00,000 - 0 07.11.2006 BY CASH RECPT - 1,75,000 1,75,000 CR 20.01.2007 BY CASH RECPT - 1,50,000 3,25,000 CR 14.02.2007 BY CASH RECPT - 1,50,000 4,75,000 CR 27.02.2007 BY CASH RECPT - 1,50,000 6,25,000 CR 23.03.2007 BY CASH RECPT - 1,20,000 7,45,000 CR 24.03.2005 BY CASH RECPT - 1,50,000 8,95,000 CR 31.03.2007 TO CASH PYMT 3,50,000 - 5,45,000 CR ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 3 TOTAL 7,50,000 12,95,000 5,45,000 CR CREDIT BALANCE 5,45,000 - GRAND TOTAL 12,95,000 12,95,000 3. THE AO RECORDED THE STATEMENT OF SH. KRISHAN LAL GUPTA, PARTNER OF THE ASSESSEE FIRM, U/S 131 OF THE INCOME TAX ACT , 1961. SH. GUPTA STATED THAT HE DID NOT KNOW THE WHEREABOUTS OF M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR, AS, ACCORDING TO HIM, THEIR FIRM NEVER HAD ANY BUSINESS WITH THE SAID PARTY. THIS FACT WAS ALSO CO NFIRMED BY SH. GUPTA TELEPHONICALLY FROM THE OTHER PARTNERS DURING THE C OURSE OF HIS STATEMENT. 4. FROM THE ABOVE, THE AO OBSERVED AS FOLLOWS AND M ADE THE ADDITION: FROM THE ABOVE DISCUSSION IT IS CLEAR THAT ASSESSE E CREATED A BOGUS ACCOUNT OF M/S. ASHOK KUMAR MOHIT KUMAR IN IT S BOOKS OF ACCOUNT AND CASH INTRODUCED IN THE BOOKS O F ACCOUNT FROM UNDISCLOSED SOURCES WAS ROUTED THROUGH THIS BOGUS ACCOUNT ACCORDING TO HIS REQUIREMENT. THEREBY THE ASSESSEE CREDITED CASH OF RS.12,95,000/- IN HIS BOO KS OF ACCOUNT. SINCE CREDIT OF CASH IS IN TWO PERIODS, I. E., FROM 26.04.2006 TO 25.08.2006 AND FROM 07.11.2006 TO 24.03.2007, IN THE FIRST PERIOD, ASSESSEE CREDITED CASH OF RS.4,00,000/- AND REPAID THE ENTIRE CASH DURING THI S PERIOD, ADDITION OF RS.2,00,000/- IS MADE TO THE INCOME OF ASSESSEE ON ACCOUNT OF PEAK CREDITS DURING THE PERIOD FROM 26.04.2006 TO 25.08.2008. AS REGARDS THE CREDIT OF CASH DURING THE PERIOD FROM 07.11.2006 TO 24.03.2007, TH E ASSESSEE CREDITED CASH OF RS.8,95,000/- AND THERE W ERE NO REVERSE ENTRIES OF CASH DURING THIS PERIOD, THEREFO RE, ADDITION OF RS.8,95,000/- ON ACCOUNT OF CASH INTRODUCED FRO M UNDISCLOSED SOURCES DURING THE PERIOD FROM 07.11.20 06 TO 24.03.2007, THEREBY TOTAL ADDITION OF RS.10,95,000/ - IS MADE ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 4 TO THE INCOME OF ASSESSEE ON ACCOUNT OF CASH INTROD UCED IN THE BOOKS OF ACCOUNT FROM UNDISCLOSED SOURCES, FOR WHICH, NO EXPLANATION HAS BEEN FURNISHED BY THE ASSESSEE. 5. THE LD. CIT(A) SUSTAINED THE ADDITION TO THE EXT ENT OF RS.25,250/-, BEING PROFIT ON SALE OF RS.5,45,000/- (PEAK), THERE BY GIVING RELIEF OF RS.10,69,750/- TO THE ASSESSEE. 6. BEFORE ME, THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE ON ACCOUNT O F ADDITION IN RESPECT OF CASH INTRODUCED IN THE BOOKS OF ACCOUNT FROM UNDIS CLOSED SOURCES, FAILING TO TAKE INTO ACCOUNT THAT NO EXPLANATION HA D BEEN OFFERED BY THE ASSESSEE; AND THAT NO ALLEGATION OF FRAUD HAD BEEN MADE BY THE ASSESSEE BEFORE THE AO, WHICH ALLEGATION HAS WRONGLY BEEN TA KEN INTO CONSIDERATION BY THE LD. CIT(A) TO GIVE RELIEF TO T HE ASSESSEE. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED, AS BEFORE THE LD. CIT(A), THAT THE PARTNERS OF THE ASSESSEE F IRM DID NOT HAVE ANY KNOWLEDGE OF ACCOUNTS. THEY WERE TOTALLY DEPENDENT ON THEIR ACCOUNTANT FOR MAINTENANCE OF BOOKS OF ACCOUNT. IT WAS ONLY DU RING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE FIRM CAME TO KNOW THAT CASH OF RS.5,45,000/- WHICH WAS NET OF RECEIPTS AND PAYM ENTS, HAD BEEN INTRODUCED BY THE ACCOUNTANT IN THE BOOKS OF ACCOUN T THROUGH ACCOUNT OF M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR, A NON-EXIS TENT PARTY, ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 5 WITHOUT HAVING SUCH ENTRY IN THE DAY BOOK MAINTAINE D BY THE FIRM. ON COMING TO KNOW OF THIS STRANGE ENTRY IN THE BOOKS O F ACCOUNT, BECAUSE OF WHICH ADDITION WAS MADE BY THE AO, THE ASSESSEE FIR M GET A DETAILED INVESTIGATION OF THE BOOKS OF ACCOUNT CONDUCTED BY FRESHLY ENGAGED COUNSEL, AT THE TIME OF FILING OF THE APPEAL BEFORE THE LD. CIT(A). IT WAS IN SUCH INVESTIGATION, THAT IT CAME TO THE KNOWLEDGE O F THE ASSESSEE FIRM THAT THEIR ACCOUNTANT HAD COMMITTED FRAUD WHILE MAI NTAINING THEIR BOOKS OF ACCOUNT. HE HAD DEPOSITED DIFFERENT AMOUNTS OF V AT WITH BANK, AS AGAINST ACTUAL DEMAND, AS PER THE BOOKS AND IN ORDE R TO COVER UP THE DIFFERENCE OF VAT, HE HAD MANIPULATED THE ACCOUNTS BY SUPPRESSING THE SALES AND TO RECTIFY THE NEGATIVE CASH, HE HAS INTR ODUCED FAKE CREDITORS IN THE BOOKS OF ACCOUNT. IT CAME TO KNOWLEDGE THAT THE SAME PRACTICE CONTINUED IN THE FINANCIAL YEARS 2007-08 AND 2008-0 9 ALSO AND THE TOTAL FRAUD AMOUNT ON ACCOUNT OF DIFFERENCE IN VAT DEPOSI TED ROSE TO RS.7,02,559/-. THEREAFTER, THE ASSESSEE FIRM GOT AN FIR FILED AGAINST THE ACCOUNTANT WITH THE SHO, WAREHOUSE POLICE STATION, JAMMU. A COPY OF THE SAID FIR WAS FILED BEFORE THE LD. CIT(A). ALL T HIS WAS BROUGHT TO THE NOTICE OF THE AO VIDE THE ASSESSEES REPLY IN RESPO NSE TO THE AOS ORDER- SHEET ENTRY DATED 29.06.2011 IN RESPECT OF ASSESSME NT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009-10. A COPY OF THE SAID REP LY WAS ALSO FILED BEFORE THE LD. CIT(A). THE ACCOUNTS FOR THE AY 2007 -08 WERE REVISED AND GOT RE-AUDITED. COPIES OF THE REVISED ACCOUNTS ALON GWITH REVISED COMPUTATION OF INCOME AND TAX THEREON WAS ALSO FILE D BEFORE THE LD. ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 6 CIT(A). HOWEVER, REVISED RETURN COULD NOT BE FILED DUE TO THE TIME LIMIT FOR THE PURPOSE HAVING EXPIRED. ALL THE VAT RETURNS, QU ARTERLY, AS WELL AS YEARLY, WERE ALSO REVISED AND COPIES THEREOF WERE F ILED BEFORE THE LD. CIT(A). THE LD. CIT(A) DULY TOOK ALL THESE FACTS IN TO CONSIDERATION BEFORE ALLOWING THE RELIEF TO THE ASSESSEE, WHICH BE SUSTA INED. 8. I HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE . IT IS ON RECORD THAT THE ALLEGED FRAUD ON THE ASSESSEE BY THEIR ACCOUNTA NT CAME TO LIGHT ONLY WHEN ADDITION WAS MADE BY THE AO, WHEREUPON, THE NE CESSARY INVESTIGATION WAS GOT CONDUCTED, WHEREIN, ALL THE AFORESAID FACTS CAME TO THE KNOWLEDGE OF THE ASSESSEE. THE ASSESSEE BROUGHT THESE FACTS BEFORE THE LD. CIT(A), AS ABOVE. THE AO HAD MADE THE ADDIT ION BY TAKING PEAK CREDITS OF RS.2 LACS AND RS.8.9 LACS IN THE ACCOUNT OF M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR, SHOWN AS A SUNDRY CREDITOR IN THE ASSESSEES BOOKS OF ACCOUNT. THE LD. CIT(A) TOOK NOTICE OF THE FACTS THAT THE AO, IN THE ASSESSMENT ORDER, HAD OBSERVED THAT THE ACCOUNT OF THE SAID SUNDRY CREDITOR HAD BEEN STATED TO HAVE BEEN FICTITIOUSLY CREDITED BY THE ASSESSEES ACCOUNTANT IN THE BOOKS OF THE FIRM WITH OUT ANY KNOWLEDGE OF THE PARTNERS. THE LD. CIT(A) NOTED THE ASSESSEES CONTENTION THAT IT WAS THE ASSESSEES ACCOUNTANT, WHO HAD CREDITED THIS D UMMY ACCOUNT IN ORDER TO RECTIFY NEGATIVE CASH, WHICH RESULTED DUE TO SUPPRESSION OF SALES OF RS.5,45,000/- AND THAT THE MOTIVE FOR SUCH SUPPR ESSION OF SALE WAS SIPHONING OFF OF THE CASH OUT OF VAT AMOUNT. THE LD. CIT(A) TOOK INTO ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 7 ACCOUNT THE FACT THAT THE ASSESSEE FIRM GOT ITS ACC OUNT RE-AUDITED AND HAD DEPOSITED THE DIFFERENCE AMOUNT ON VAT AFTER SH OWING CREDIT FIGURES OF SALES IN THE REVISED VAT RETURNS; THAT THE CASE OF THE ASSESSEE FIRM HAD ALSO BEEN SELECTED FOR SCRUTINY FOR THE AY 2009-10 AND IN THAT YEAR ALSO, THE AO HAD QUESTIONED THE ASSESSEE REGARDING ADJUST MENT OF SUNDRY CREDITORS IN THE BOOKS OF ACCOUNT IN FURTHER YEARS VIS--VIS THE ASSESSMENT ORDER PASSED FOR THE AY 2007-08, I.E., T HE YEAR UNDER CONSIDERATION; THAT FOR THE AY 2009-10, THE AO HAD ACCEPTED THE ASSESSEES CONTENTION THAT ITS ACCOUNTANT HAD COMMI TTED A FRAUD OF RS.7,02,559/- BY DEPOSITING LESS VAT WITH THE VAT A UTHORITIES AND, TO COVER UP THE NEGATIVE CASH, HE HAD INTRODUCED FAKE CREDITORS IN THE ASSESSEES BOOKS OF ACCOUNT, WITHOUT THE KNOWLEDGE OF THE PARTNERS OF THE FIRM; THAT THE AO HAD BEEN INTIMATED BY THE ASSESSE E REGARDING DUMMY ACCOUNT HAVING BEEN CREDITED BY THE ACCOUNTANT IN T HE BOOKS OF THE FIRM FOR RECTIFYING NEGATIVE CASH; THAT THE AO HAD ALSO BEEN INFORMED THAT THE PARTNERS OF THE ASSESSEE FIRM DID NOT KNOW ABOUT TH E WHEREABOUTS OF M/S. ASHOK KUMAR MOHIT KUMAR, KISHATWAR, AS THE ASS ESSEE FIRM HAD NEVER DONE ANY BUSINESS WITH THE SAID PARTY; AND TH AT THE COPY OF FIR LODGED AGAINST THE ASSESSEES ACCOUNTANT FURTHER CO NFIRMED THAT THE BOOKS OF ACCOUNT HAD BEEN MANIPULATED BY THE ACCOUN TANT WITHOUT ANY KNOWLEDGE OF THE PARTNERS OF THE ASSESSEE FIRM. 9. IT WAS ON THE BASIS OF THE ABOVE, THAT THE LD. C IT(A) OBSERVED THAT THE FACTS AND FIGURES CONFIRMED THE STAND OF THE AS SESSEE THAT THEIR BOOKS ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 8 OF ACCOUNT HAD BEEN MANIPULATED AND DUMMY ACCOUNT H AD BEEN CREDITED FOR RECTIFYING THE NEGATIVE CASH. IT WAS ONLY ON BE ING HIMSELF SATISFIED WITH SUCH FACTS AND FIGURES AND THE DETAILS/EVIDENC E FILED, THAT THE LD. CIT(A) CAME TO THE CONCLUSION, AND I AM OF THE CONS IDERED OPINION RIGHTLY SO, THAT THE ASSESSEE HAD DISCHARGED ITS DU TY AND HAD EXPLAINED ALL THE FACTS. THE LD. CIT(A) HAS FURTHER CORRECTLY OBSERVED THAT HAD THE AO, IN DISCHARGE OF HIS DUTY, EXAMINED THE CAUSE OF THE FICTITIOUS ACCOUNT IN DEPTH, SO AS TO ASSESS THE REAL INCOME OF THE AS SESSEE, BY EXAMINING THE FACTS LIKE DAY BOOK, VAT RETURNS, AND VAT CHALL ANS, WHICH FORMS PART OF THE RECORD MAINTAINED BY THE ASSESSEE, THE AO WO ULD HAVE COME TO KNOW THAT IT WAS THE ASSESSEES ACCOUNTANT, WHO HAD DUPED THE ILLITERATE PARTNERS OF THE ASSESSEE FIRM WITH HIS FRAUDULENT A CTION. THE LD. CIT(A) ALSO OBSERVED THAT HE HAD SATISFIED HIMSELF WITH TH E FACTS AND FIGURES WHICH STOOD EXAMINED BY THE AO IN THE SUBSEQUENT AS SESSMENT YEAR, I.E., IN AY 2009-10. HE SUSTAINED THE ADDITION TO THE EXTENT OF RS.25,250/-, WHICH WAS THE PROFIT ON THE SALE OF RS .5,45,000/-, I.E., THE PEAK. 10. THE DEPARTMENT HAS NOT BEEN ABLE TO DISLODGE TH E CATEGORICAL FINDINGS RECORDED BY THE LD. CIT(A). ALL THE FACTS AND FIGURES WERE DULY EXAMINED BY THE LD. CIT(A) AND IT WAS ONLY FINDING THEM TO BE CORRECT THAT THE ORDER OF THE LD. CIT(A) ON THIS ISSUE GOT PASSE D. FINDING NO ERROR WHATSOEVER THEREIN, THE SAME IS HEREBY UPHELD. GROU ND NO. 1 IS REJECTED. ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 9 11. COMING TO GROUND NO.2, AS PER THE ASSESSMENT OR DER, THE AO CALLED FOR THE COPY OF THE ASSESSEES ACCOUNT IN TH E BOOKS OF SOME OF THE CREDITORS. THE AO OBSERVED THAT M/S. KANCHAN ENTERP RISES, ONE OF THE CREDITORS OF THE ASSESSEE HAD RECEIVED CASH PAYMENT FROM THE ASSESSEE ON 19.04.2006 FOR RS.20,000/- AND ON 20.04.2006 FOR RS.20,000/- BUT NO SUCH CASH PAYMENTS WERE APPEARING IN THE BOOKS O F THE ASSESSEE. 12. ACCORDINGLY, OBSERVING THAT THERE WERE CASH PAY MENTS BY THE ASSESSEE OUTSIDE ITS BOOKS OF ACCOUNT, THE AO MADE AN ADDITION OF RS.40,000/-. THE LD. CIT(A) DELETED THE ADDITION. 13. THE LD. DR CONTENDS THAT THE LD. CIT(A) HAS ERR ED IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF CASH PAYMENTS OUTSIDE THE BOOKS OF ACCOUNT FROM UNDISCLOSED SOURCES. 14. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 15. HERE, THE LD. CIT(A) HAS DELETED THE ADDITION B Y OBSERVING AS FOLLOWS: 4.2. THE AO HAS STATED THERE ARE CASH PAYMENTS BY THE APPELLANT AMOUNTING TO RS.40,000/- OUTSIDE THE BOOKS OF ACCOU NT. THE APPELLANT HAS STATED THAT THESE PAYMENTS HAVE BEEN MADE BY IT IN THE PRECEDING PREVIOUS YEAR BUT SOMEHOW M/S. KANCHA N ENTERPRISES HAS BOOKED THESE IN THE YEAR UNDER CONS IDERATION. IT HAS BEEN FURTHER STATED BY THE APPELLANT THAT COLLE CTION DONE BY AGENT OF THE PARTY HAS PROBABLY BEEN DEPOSITED IN T HE CURRENT YEAR. I HAVE GONE THROUGH THE COPY OF ACCOUNTS OF M/S. KA NCHAN ENTERPRISES IN THE BOOKS OF APPELLANT AND APPELLANT S ACCOUNT IN THE BOOKS OF M/S. KANCHAN ENTERPRISES. THE DIFFEREN CE IN OPENING BALANCE DO REVEAL ABOUT THIS FACT. THE PERUSAL OF T HESE ACCOUNT ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 10 STATEMENTS CLEARLY CONFIRMS THE CONTENTION OF THE A PPELLANT. I, THEREFORE, DELETE THE ADDITION OF RS.40,000/-. 16. THUS, AS PER THE LD. CIT(A), THE ASSESSEE IS R IGHT IN CONTENDING, AS AVAILABLE FROM THE ACCOUNTS OF M/S. KANCHAN ENTERPR ISES IN THE BOOKS OF THE ASSESSEE AND THE ASSESSEES ACCOUNT IN THE BOOK S OF M/S. KANCHAN ENTERPRISES, THAT THE PAYMENTS IN QUESTION HAD BEEN MADE BY THE ASSESSEE TO M/S. KANCHAN ENTERPRISES IN THE PRECEDI NG PREVIOUS YEAR, BUT THEY GOT BOOKED IN THE YEAR UNDER CONSIDERATION BY M/S. KANCHAN ENTERPRISES, PROBABLY SINCE THE COLLECTION, AS MADE BY THE AGENT OF THE PARTY, HAD BEEN DEPOSITED IN THE CURRENT YEAR. AS A GAINST THIS CATEGORICAL OBSERVATION OF THE LD. CIT(A), NOTHING HAS BEEN BRO UGHT BY THE DEPARTMENT TO DISPROVE THE SAME. ACCORDINGLY, FIND ING NO MERIT THEREIN, GROUND NO.2 IS REJECTED. 17. SO FAR AS REGARDS GROUND NO.3, THE AO OBSERVED THAT THE ASSESSEE HAD NOT OFFERED ANY EXPLANATION IN RESPECT OF DISCO UNT OF RS.1134/- RECEIVED FROM M/S. GUPTA SOAP FACTORY. THE AO ADDED THIS AMOUNT, AS NOT SHOWN IN THE ASSESSEES BOOKS OF ACCOUNT. 18. THE LD. CIT(A) DELETED THE ADDITION, OBSERVING THAT THIS AMOUNT STOOD ALREADY INCLUDED IN THE NET PROFIT OF RS.2525 0/-, FORMING THE SUBJECT MATTER OF GROUND NO.1. 19. THOUGH THE LD. DR HAS CONTENDED THAT THE LD. CI T(A) HAS ERRED IN ALLOWING THE RELIEF ON ACCOUNT OF THIS ADDITION MAD E IN RESPECT OF DISCOUNT RECEIPT NOT SHOWN BY THE ASSESSEE, THE DEPARTMENT H AS NOT BEEN ABLE TO ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 11 DISLODGE THE OBSERVATION THAT THIS AMOUNT STANDS AL READY INCLUDED IN THE NET PROFIT OF RS.25,250/-, WHICH ADDITION HAS BEEN SUSTAINED BY THE LD. CIT(A) AND THIS ACTION OF THE LD. CIT(A) HAS BEEN U PHELD BY US WHILE DEALING WITH THE GROUND NO.1. ACCORDINGLY, GROUND N O.3 IS REJECTED. 20. CONCERNING GROUND NO.4, ACCORDING TO THE AO, TH IS AMOUNT REPRESENTED THE DIFFERENCE IN THE CLOSING BALANCE O F THE ASSESSEE WITH M/S. KANCHAN ENTERPRISES AND IT HAD NOT BEEN CREDIT ED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. THE LD. CIT(A) DELETED THE ADDITION. 21. ACCORDING TO THE DEPARTMENT, HERE ALSO, THE ASS ESSEE FAILED TO OFFER ANY EXPLANATION REGARDING THE DIFFERENCE IN THE CLO SING BALANCE WITH M/S. KANCHAN ENTERPRISES AND SO, THE LD. CIT(A) ERRED IN DELETING THE ADDITION CORRECTLY MADE. 22. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE IMPUGNED ORDER IN THIS REGARD. 23. BY OBSERVING THE ACCOUNT OF M/S. KANCHAN ENTERP RISES, IT IS SEEN, THE LD. CIT(A) FOUND THE ASSESSEE TO BE RIGHT IN CO NTENDING THAT THIS ENTRY WAS A DEBIT ENTRY, WHICH COULD NOT BE ADDED TO INCO ME. THIS OBSERVATION OF THE LD. CIT(A) HAS AGAIN GONE UNREBUTTED, SINCE THE DEPARTMENT HAS REMAINED UNABLE TO SHOW THAT THE ENTRY CONCERNED WA S NOT A DEBIT ENTRY IN THE ACCOUNT OF M/S. KANCHAN ENTERPRISES. THAT BE ING SO, OBVIOUSLY, THE FACTS WERE MISUNDERSTOOD BY THE AO AND ADDITION WAS ERRONEOUSLY MADE, INSTEAD OF ALLOWING EXPENDITURE ON ACCOUNT OF DIFFERENCE. ITA NO.121(ASR)/2014 ASSESSMENT YEAR 2007-08 12 THEREFORE, HERE ALSO, THE GRIEVANCE OF THE DEPARTME NT BY WAY OF GROUND NO.4 CONTAINS NO FORCE. GROUND NO.4 IS REJECTED. 24. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH NO VEMBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 17/11/2015 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. GOLDEN TEA STORE, JAMMU. 2. THE ITO, WARD 2(1), JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.