Karshni Metal Store, Delhi V. ITO, New Delhi

ITA 1365/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6302 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Assessee Lawyers: ASHISH CHADHA
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Question of law; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 40A(3); 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER , AND SHRI L.P. SAHU, ACCOUNTANT MEMBER, ITA NO. 1365 /DEL /20 1 5 [2006 - 07] KARSHNI METAL STORE VS. THE I.T.O 15/2675, GALI MUNDE WALI WARD 39(3) SADAR THANA ROAD NEW DELHI SADAR BAZAR, DELHI PAN : AEQPG 6252 G ITA NO. 1370/DEL /2015 [2006 - 07] BHARDWAJ METAL[INDIA] VS. THE I.T.O 5853, BASTI HARPHOOL SINGH WARD 39(3) SADAR BAZAR, DELHI NEW DELHI PAN : AADPV 4179 J ITA NO. 136 9 /DEL /2015 [2006 - 07] LAXMI DHATU BHANDAR VS. THE I.T.O 5708, BASTI HARPHOOL SINGH WARD 39(3) SADAR BAZAR, DELHI NEW DELHI PAN : AABFL 5530 B ITA NO. 13 79 /DEL /2015 [2006 - 07] KRISHAN LAL & SONS VS. THE I.T.O 5481/7, BASTI HARPHOOL SINGH WARD 39(3) SADAR BAZAR, DELHI NEW DELHI PAN : AAAFK 2721 L ITA NO. 13 80 /DEL /2015 [2006 - 07] KAKKAR BARTAN STORE VS. THE I.T.O PROP. AMIT KAKKAR WARD 39(3) 5203, SADAR THANA ROAD NEW DELHI SADAR BAZAR, DELHI PAN : A FBPK 9243 H 2 ITA NO. 136 6 /DEL /2015 [2006 - 07] KASHMIR METAL STORE VS. THE I.T.O 3829/1 - 2/GALI BARNA WARD 39(3) SADAR BAZAR, DELHI NEW DELHI PAN : AHKPK 2603 A [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI VED JAIN & SHRI ASHISH CHADHA, CA RESPONDENT BY : SHRI SHRAVAN GOTRU, SR. DR DATE OF HEARING : 1 7 . 03 . 201 6 DATE OF PRONOUNCEMENT : 2 3 . 0 3 .201 6 ORDER PER BENCH : - TH E ABOVE CAPTIONED SIX APPEAL S HAVE BEEN FILED BY DIFFERENT ASSESSEE S AND ARE DIRECTED AGAINST THE SEPARATE ORDER S OF THE CIT(A) - NEW DELHI PASSED FOR A.Y 200 6 - 0 7 . SINCE THE FACTS AND CIRCUMSTANCES OF THESE CASES ARE SIMILAR AND ALL THESE APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF BREVITY AND CONVENIENCE, WE ARE DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER. 2. FIRST OF ALL, FOR APPRECIATION OF FACTS AND CIRCUMSTANCES OF THE CASE , WE TAKE UP ITA NO. 1365/DEL/2015 IN THE CASE OF KARSHNI METAL STORE VS. ITO FOR A.Y 2006 - 07. 3 3. THE GROUNDS RAISE BY THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY T HE LEARNED CIT(A) IS BAD, BOTH IN THE EYE OF LAW AND ON THE FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE INITIATION OF THE REASSESSMENT PROCEEDINGS AN D THE REASSESSMENT ORDER ARE BAD BOTH ON FACTS AND IN LAW AND LIABLE TO BE QUASHED AS THE STATUTORY CONDITIONS AND PROCEDURE PRESCRIBED UNDER THE STATUTE HAVE NOT BEEN COMPLIED WITH. 3 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE LEARNED A.O. ARE BAD IN THE EYE OF LAW AS THE REASONS RECORDED FOR THE ISSUE OF NOTICE UNDER SECTION 148 ARE BAD IN THE EYE OF LAW AND ARE C ONTRARY TO THE FACTS. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE REASSESSMENT ORDER PASSED BY THE A.O. IS BAD AND LIABLE TO BE QUASHED AS THE SAME HAS BEE N REOPENED ON THE BASIS OF THE REASONS WHICH ARE VAGUE AND HAS BEEN RECORDED WITHOUT APPLICATION OF MIND ON THE PART OF THE A.O. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE BY THE AO, DESPITE THE FACT THAT THE ASSESSEE HAS BEEN MAINTAINING PROPER BOOKS OF ACCOUNTS AS PER LAW. 4 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMI NG THE ADDITION OF AN AMOUNT OF RS. 3 , 80 , 79 2/ - ON ACCOUNT OF BOGUS PURCHASES. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 20% OF SUCH PURCHASES, WITHOUT THERE BEING ANY BASIS FOR T HE SAME. 7.(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THAT THE FIRMS M/S VISHNU TRADING COMPANY, M/S SHREE SHYAM TRADING COMPANY & M/S SHREE BANKEY BIHARI TRADING CO. ARE NOT ENGAGED IN THE ACTUAL BUSINESS IGNORING THE FACT THAT DURING THE COURSE OF THE SEARCH SUBSTANTIAL INVENTORY IN RESPECT OF THE MATERIAL BEING PURCHASED BY THE ASSESSEE WERE FOUND WHICH CONFIRM THE FACT THAT THIS FIRM WAS DOING ACTUAL BUSINESS. (II) ON THE FACTS AND C IRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THAT THE INFERENCE DRAWN BY THE AO MERELY ON THE BASIS OF A STATEMENT THAT THESE FIRMS ARE NOT IN ACTUAL BUSINESS IS BASELESS AND CONTRARY TO THE FACTS ON RECORD. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE IN IGNORING THE FACT THAT THERE BEING A COMPLETE TALLY OF THE QUANTITY PURCHASED AND SOLD THE ALLEGATION THAT THE A SSESSEE HAS NOT MADE PURCHASES CANNOT BE SUSTAINED. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE ADDITION TO THE EXTENT OF 20% OF SUCH PURCHASES REJECTING THE MATERIAL AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE PURCHASES WERE 5 MADE IN REGULAR COURSE OF THE BUSINESS AND MATERIAL SO PURCHASED WAS SOLD IN TH E REGULAR COURSE OF BUSINESS. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION SO MADE ON THE BASIS OF MATERIAL COLLECTED AT THE BACK OF THE AS SESSEE IS BAD IN LAW & LIABLE TO BE DELETED. 11. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION MADE BY THE LEARNED AO IS UNTENABLE IN THE EYE OF LAW HAVING BEEN MADE WITHOUT PROVIDING OPPORTUNITY TO CROSS EXAMINE THE PERSON ON THE BASIS OF WHOSE STATEMENT THE ALLEGATIONS HAVE BEEN MADE AGAINST THE ASSESSEE AND WITHOUT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE. 12. THE APPELLANT CRAVES LEAVE TO AD D, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4. GROUND NOS. 1 AND 12 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION AT OUR END. 5. GROUND NOS. 2 AND 3 CHALLENGING THE VALIDITY OF REOPENING OF ASSESSMENT ARE LEGAL GROUNDS. 6. WE HAVE HEARD THE ARGUME NTS OF THE LD. DR AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS THE ORDER OF THE ITAT DELHI, SMC - 2 BENCH DATED 28.10.2015 PASSED IN ITA NO. 1372/DEL/2015 FOR A.Y 2006 - 07 IN THE CASE OF UNIQUE METAL INDUSTRIES VS. ITO FOR A.Y 2006 - 07 AND SUBMITTED 6 THAT THE CONCLUSION OF THIS ORDER ON LEGAL GROUNDS AS WELL AS ON MERITS HAVE BEEN FOLLOWED IN THE SUBSEQUENT ORDERS OF THE ITAT DELHI VIDE ORDER DATED 30.11.2015 PASS ED IN ITA NO. 1429/DEL/2015 FOR A.Y 2006 - 07 , IN THE CASE OF RADHEY SHYAM & CO. VS. ITO, ITAT F BENCH ORDER DATED 2.12.2015 PASSED IN ITA NO. 1376/DEL/2015 FOR A.Y 2006 - 07 IN THE CASE OF KISHAN LAL GAMBHIR & SONS AND THE LEGAL GROUNDS AS WELL AS GROUNDS ON MERITS ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THESE ORDERS OF THE TRIBUNAL. 7. REPLYING TO THE ABOVE, THE LD. DR STRONGLY SUPPORTED THE ACTION OF THE AO FOR REOPENING OF ASSESSMENT, INITIATION OF PROCEEDINGS AND ISSUANCE OF NOTICE U/S 147/148 OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT]. THE LD. DR FURTHER SUBMITTED THAT THE LD . CIT(A) WAS QUITE CORRECT AND JUSTIFIED IN UPHOLDING THE CONCLUSION OF THE AO ON LEGAL ISSUES AS WELL AS ON MERITS. HOW EVER, ON A SPECIFIC QUERY FROM THE BENCH, THE LD. DR FAIRLY SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS REASONS R ECORDED BY THE AO IN THE CASE OF UNIQUE METAL INDUSTRIES VS. ITO [SUPRA] AND OTHER CASES MENTIONED HEREINABOVE, ARE QUITE SYNONYMOUS AND SIMILAR TO THE FACTS OF THE PRESENT CASE. 8. ON A CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS AND PERUSAL OF MATERI AL AVAILABLE ON RECORD, WE OBSERVE THAT THE AO INITIATED THE 7 ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AND ISSUED NOTICE U/S 148 OF THE ACT BY RECORDED THE FOLLOWING REASONS: REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT IN THE CASE OF M/ S KARSHNI METAL STORE THE ASSESSMENT YEAR 2006 - 07 A LETTER BEARING F.NO. ADDL.CIT /(HQ) /(COORD.) / ACCOMMODATION ENTRY/2012 - 13/15016 DATED 26.03.2013 WAS RECEIVED FROM THE OFFICE OF THE CHIEF COMMISSIONER OF I.TAX, DELHI - 1, NEW DELHI THEREIN FORWARDING LETTER BEARING F.NO. CIT(C) - II/2012 - 13/3898 DATED 19.03.2013 RECEIVED FROM THE COMMISSIONER OF I.TAX, CENTRAL - II, NEW DELHI ALONG WITH A CD CONTAINING THE DETAILS OF ACCOMMODATION ENTRIES PROVIDED BY SH. RAKESH GUPTA & SH. VISHESH GUPTA & SH. NAVNEET JAIN & SH. VAIBHAV JAIN AND DIRECTING THIS OFFICE TO TAKE NECESSARY ACTION AS PER SECTION 148 IN RESPECT OF ENTRIES PERTAINING TO A.Y. 2006 - 07, WHICH IS TIME BARRING ON 31.03.2013. THE INFORMATION PROVIDED BY THE CIT, CENTRAL - II, NEW DELHI VIDE HIS LETTER DATE D 19.03.2013 READS AS UNDER: 1 . KINDLY FIND ENCLOSED HEREWITH LETTER DATED 13.03.2013 OF ACIT, CENTRAL CIRCLE - 10 DULY FORWARDED BY THE ADDL. CIT, CENTRAL RANGE - IV, ALONG WITH ITS ENCLOSURES ON THE SUBJECT MENTIONED ABOVE. 2 . THE ASSESSMENT OF SEARCH CASES OF SH. RAKESH GUPTA, SH. VISHESH GUPTA, SH. NAVNEET JAIN & SH. VAIBHAV JAIN ARE UNDER PROCESS WITH THE ACIT, CENTRAL CIRCLE - 10. DURING THE ASSESSMENT PROCEEDINGS U/S 153A IN THE AFORESAID CASES, 8 DETAILS REGARDING ACCOMMODATION ENTRIES GIVEN BY THE ABOVE ENTR Y PROVIDERS HAS BEEN OBTAINED BY THE ASSESSING OFFICER. 3 . THE LIST OF ACCOMMODATION ENTRY RECIPIENTS HAS BEEN OBTAINED FROM SH. RAKESH GUPTA AND SH. VISHESH GUPTA. HARD COPY OF THE LIST IS ENCLOSED AS ANNEXURE A, DULY SIGNED BY SH. VISHES GUPTA. THE LIST GIVEN THE NAME OF THE FIRM WHICH HAS PROVIDED THE ACCOMMODATION ENTRY ALONG WITH THE NAME AND ADDRESS OF THE RECIPIENTS OF ACCOMMODATION ENTRY. 4 . SH. NAVNEET JAIN & SH. VAIBHAV JAIN HAS PROVIDED ACCOMMODATION ENTRY THROUG H THIRTY SEVEN PAPER ENTITIES. THE L IST OF THE FIRMS GIVING ACCOMMODATION ENTRY IS ENCLOSED AS ANNEXURE - B. THE LIST OF ACCOMMODATION ENTRY RECIPIENTS, HAS BEEN OBTAINED FROM SH. NAVENEET JAIN & SH. VAIBHAV JAIN. IT DOES NOT GIVE YEAR WISE BIFURCATION. HARD COPY OF THE LIST IS ENCLOSED AS ANNEXURE - C, DULY SIGNED BY SH. VAIBHAV JAIN. THUS, THE FIRMS MENTION IN THE LIST B HAVE PROVIDED ACCOMMODATION ENTRIES TO THE FIRMS MENTIONED IN LIST C . 5 . THE SOFT COPY OF THE INFORMATION IN RESPECT TO ANNEXURE A, B & C IS ALSO ENCLOSED. 6 . THE INFORMATION OF ACCOMMODATION ENTRY INCLUDES A.Y. 2006 - 07 ALSO, WHICH IS A TIME BARING YEAR FOR TAKING ACTION U/S 148. 9 7 . THIS INFORMATION IS FORWARDED TO YOU FOR EARLY DISSEMINATION TO VARIOUS FIELD OFFICES IN DELHI. ON EXAMINING THE LIST OF ACCOMMODATION E NTRIES PROVIDED BY SHRI RAKESH GUPTA & SHRI VISHESH GUPTA AND SHRI NAVNEET JAIN & SHRI VAIBHAV JAIN PERTAINING TO A.Y. 2006 - 07. IT IS NOTICED THAT THE FOLLOWING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE ASSESSEE NAMELY M/S KRISHAN LAL GAMBHIR & SONS: S. NO. ACCOMMODATI ON ENTRY PROVIDED BY NAME OF PARTY TO WHOM ACCOMMODATION ENTRY IS PROVIDED AMOUNT OF ACCOMMODATIO N ENTRY 1. SHREE SHYAM TRADING CO. M/S KARSHNI METAL STORE RS. 2 , 66 , 0 6 2 2. VISHNU TRADING CO. M/S KARSHNI METAL STORE RS. 6 ,5 5 , 332 3. SHREE BANKEY BIHARI TRADING CO. M/S KARSHNI METAL STORE RS. 9,82,566 TOTAL AMOUNT OF ENTRIES RS. 19 , 03 , 960 SINCE SH. RAKESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JAIN & SH. VAIBHAV JAIN DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF I.T. ACT HAVE ADMITTED THAT THEY HAVE GIVEN ACCOMMODATION ENTRIES TO THE PARTIES WHOSE LISTS HAVE BEEN PROVIDED BY THEM TO THE ACIT, CENTRAL CIRCLE - 10, NEW DELHI, THEREFORE, IT IS FAIR TO CONCLUDE THAT M/S KRISHAN LAL GAMBHIR & SONS, WHOSE NAME IS APPEARING IN THE SAID LIST, HAS TAKEN ACCOMMODATION ENTRIES FROM SHRI RAKESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JAIN & SH. VAIBHAV JAIN PERTAINING TO A.Y. 2006 - 07. ALSO THE DETAILS OF INCOME TAX RETURN FILED BY M/S KRISHAN LAL GHAMBHIR & SONS FOR A.Y. 2006 - 07 AND PROCESSING DONE U/S 143(1) OF I.TAX ACT THEREOF WERE TAKEN 10 OUT FROM ITD SYSTEM. FURTHER, NO SCRUTINY ASSESSMENT WAS DONE IN A.Y. 2006 - 07. THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX AMOUNTING TO RS. 7,58, 321/ - FOR THE F.Y. 2005 - 06 RELEVANT TO A.Y. 2006 - 07 HAS ESCAPED ASSESSMENT AND IT IS A FIT CASE FOR INITIATION OF PROCEEDINGS U/S 147 OF THE ACT. PROPOSAL IN THE PRESCRIBED FORM FOR THE AY 2006 - 07 (F.Y. 2005 - 06) IS SUBMITTED HEREWITH FOR KIND CONSIDERATIO N AND NECESSARY APPROVAL U/S 151(2) OF THE I.T. ACT, 1961 AS THE SAME IS GETTING BARRED BY LIMITATION ON 31/03/2013. IF APPROVED, NOTICE U/S 148 OF THE ACT MAY BE ISSUED. SD/ - (PAWAN KUMAR VASHIST) INCOME TAX OFFICER WARD 39(3), NEW DELHI 9. FROM THE FIRST ORDER OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES VS. ITO [SUPRA] IT IS VIVID THAT THE TRIBUNAL IN THE SIMILAR FACTS, CIRCUMSTANCES AND SITUATION OF THE CASE, SATISFACTION NOTE HELD AS UNDER: 8. ON GOING THROUGH THE ABOVE REASONS IT IS EVIDENT THAT THIS ASSESSMENT HAS BEEN REOPENED ON THE BASIS OF THE LETTER RECEIVED FROM THE LD. CIT, CENTRAL - 2, NEW DELHI WITH THE DIRECTION TO TAKE NECESSARY ACTION AS PER SECTION 148 OF THE ACT. AS PER THIS, ACCOMMODATION ENTRIES WERE OBTAINED BY VARIOUS PERSONS FROM SH. RAKESH GUPTA AND SH. VISHESH GUPTA AS WELL AS SH. NAVNEET JAIN AND SH. VAIBHAV JAIN. COPY OF THIS LIST WAS FORWARDED IN A CD TO THE ASSESSING OFFICER. THUS THIS LIST 11 CONTAINED THE NAME OF THE ASSESSEE. THE ASSESSING OFFICER REOPE NED THE ASSESSMENT ON THE BASIS OF THIS INFORMATION. THE BASIS GIVEN BY THE ASSESSING OFFICER IN THE REASONS IS THAT THESE PERSONS HAVE ADMITTED THAT THEY HAVE GIVEN ACCOMMODATION ENTRIES TO THE PARTIES WHOSE LISTS HAVE BEEN PROVIDED BY THEM. FROM THE AB OVE FACTS IT IS APPARENT THAT THE ASSESSING OFFICER AT THAT POINT OF TIME WHEN HE RECORDED THE REASONS WAS NOT HAVING THE COPY OF THE STATEMENT OR ANY OTHER MATERIAL IN WHICH THESE PEOPLE HAVE ALLEGED TO HAVE PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE. THIS POSITION GETS ALSO CORROBORATED FROM THE FACTS STATED BY THE ASSESSING OFFICER HIMSELF IN THE REASSESSMENT ORDER IN PARA 3 PAGE 5 WHICH READ AS UNDER: - HERE IT IS PERTINENT TO MENTION THAT IN THE INTERVENING PERIOD, THIS OFFICE HAD CONVERSATIONS W ITH THE ACIT, CENTRAL CIRCLE - 10, NEW DELHI FROM WHOM VIDE THIS OFFICE S LETTER DATED 23.07.2013, 02.09.2013, 14.10.2013, 06.11.2013, 22.11.2013, 09.12.2013 & 24.12.2013 AND VIDE JOINT CIT, RANGE - 39, NEW DELHI S LETTER DATED 16.12.2013, THE FOLLOWING DETAIL S/DOCUMENTS WERE SOUGHT: - ( I ) COPIES OF THE STATEMENTS RECORDED OF SH. RAKEH GUPTA & SH. VISHESH GUPTA DN SH. NAVNEET JAIN & SH. VAIBHAV JAIN IN SEARCH/POST SEARCH/ASSESSMENT PROCEEDINGS. ( II ) SOFT COPIES OF THE TATEMENTS RECORDED OF SH. RAKEH GUPTA & SH. VISHESH G UPTA DN SH. NAVNEET JAIN & SH. VAIBHAV JAIN IN SEARCH/POST SEARCH/ASSESSMENT PROCEEDINGS. \ ( III ) HARD COPY OF ASSESSMENT ORDERS PASSED IN THESE CASES FOR A.Y. 2006 - 07 12 ( IV ) SOFT COPY OF ASSESSMENT ORDERS PASSED IN THESE CASES FOR A.Y. 2006 - 07 ( V ) ANY OTHER DETAIL/DOCUMENT YOU MAY DEEM FIT THAT NEED TO BE CONFRONTED WITH THE PARTIES WHOSE CASES HAVE BEEN REOPENED U/S 148 OF I. TAX ACT. 4. IN RESPONSE TO THESE LETTERS, THE ACIT, CENTRAL CIRCLE - 10, NEW DELHI VIDE HIS LETTER DATED 20.12.2013, RECEIVED BY THIS OFFICE ON 27.12.2 013, FORWARDED HIS REPLY ALONG WITH SUPPORTING DOCUMENTS, WHICH WERE RUNNING INTO 92 PAGES. AFTER GOING THROUGH THE REPLY FORWARDED BY THE ACIT, CENTRAL CIRCLE - 10, NEW DELHI AND THE ANNEXURE ENCLOSED THEREIN, THIS OFFICE WAS OF THE VIEW THAT THE PURCHASE BILLS PROVIDED BY THE 11 FIRMS/CONCERS CONTROLLED AND MANAGED BY SH. RAKESH GUPTA AND SH. VISHESHGUPT OR THEIR FAMILY MEMBERS IS NOTHING BUT BOGUS PURCHASE BILLS/ACCOMMODATION BILLS. 9. THE ABOVE FACTS STATED BY THE ASSESSING OFFICER MAKES IT ABUNDANTLY CLEAR THAT AT THE TIME OF FORMATION OF THE BELIEF TO REOPEN ASSESSMENT THE ASSESSING OFFICER WAS NOT HAVING THE ABOVE SAID INFORMATION. ONLY THAT HE WAS HAVING THE LETTER ALONG WITH LIST WHICH WAS FORWARDED BY THE CIT, CENTRAL - 2, NEW DELHI. 10. THE ABOVE OBSERVATION OF THE ASSESSING OFFICER ALSO SHOWS THAT IT WAS LETTER DATED 20.12.2013 RECEIVED BY HIM ON 27.12.2013 ON THE BASIS OF WHICH THE ASSESSING OFFICER COULD MAKE A VIEW THAT THE PURCHASE BILLS PROVIDED BY THESE PERSONS OR THEIR FAMILY MEMBERS IS NOT HING BUT BOGUS PURCHASE BILLS. AT THE TIME OF RECORDING OF THE REASONS THE ASSESSING OFFICER APPARENTLY WAS NOT HAVING ANY IDEA ABOUT THE NATURE OF THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE. IN THE REASONS RECORDED THERE 13 IS NO MENTION ABOUT THE NATUR E OF THE TRANSACTIONS. AS PER PROVISION OF SECTION 147 AN ASSESSMENT CAN BE REOPENED IF THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE REASONS TO BELIEVE HAS TO BE THAT OF THE ASSESSING OFFICER AND FURTHER THERE HAVE TO BE APPLICATION OF MIND BY THE ASSESSING OFFICER THOUGH THE REASONS TO BELIEVE DOES NOT MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT THAT INCOME HAS ESCAPED ASSESSMENT BUT AT THE SAME TIME, IT ALSO MEANS THAT THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE FACTS ON THE BASIS OF THE INFORMATION AND SATISFY HIMSELF THAT THE TAXABLE INCOME HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, ON GOING THROUGH THE REASONS IT IS QUITE EVIDENT THAT THE ASSESSING OFFIC ER WAS ALSO NOT AWARE OF THE NATURE OF THE ACCOMMODATION ENTRIES. IN THE REASONS RECORDED HE HAS SIMPLY MENTIONED THE NAME OF THE PARTY AND THE AMOUNT AND NOWHERE HAS STATED THE NATURE OF SUCH ENTRY. THIS ALSO SHOWS THAT THE ASSESSING OFFICER HAS MADE NO EFFORT TO LOOK INTO THE RETURN OF THE ASSESSEE WHICH WAS AVAILABLE WITH HIM. THIS FACT GETS FURTHER SUPPORTED FROM THE SHEET APPENDED TO THE REASONS AND QUOTED ON PAGE 4 OF THE ASSESSMENT ORDER WHEREBY AGAINST ITEM NO. 7, WHETHER THE ASSESSMENT IS PROPOS ED TO BE MADE FOR THE FIRST TIME, THE ASSESSING OFFICER HAS STATED YES , AND IN COLUMN NO. 7(A), WHETHER ANY VOLUNTARY RETURN HAD ALREADY BEEN FILED AND IN COLUMN NO. 8 (B), DATE OF FILING THE SAID RETURN NA HAS BEEN STATED. THUS THIS IS A CLEAR CASE O F NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. IT MAY ALSO BE RELEVANT THAT ON PAGE 2 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HIMSELF HAS STATED THAT IN THIS CASE THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED WITH THIS WARD ON 27.09.2006. THESE FACTS CLEARLY DEMONSTRATE THAT THE RETURN 14 WAS WITH THE SAME WARD AND AT THE TIME OF RECORDING OF THE REASONS FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER HAS NOT LOOKED AT THE RETURN AND IN A MECHANICAL WAY, ON RECEIPT OF THE LET TER FROM THE CIT, CENTRAL - 2, NEW DELHI THE ASSESSMENT HAS BEEN REOPENED. IT IS A SETTLED POSITION OF LAW THAT THERE MUST BE MATERIAL FOR FORMATION OF A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. FURTHER REASONS REFERRED TO MUST DISCLOSE PROCESS OF REAS ONING BY WHICH THE ASSESSING OFFICER HOLDS REASON TO BELIEVE. THERE MUST BE NEXUS BETWEEN SUCH MATERIAL AND BELIEF. FURTHER AND MOST IMPORTANTLY THE REASONS REFERRED TO MUST SHOW APPLICATION OF MIND BY THE ASSESSING OFFICER. IT IS ALSO A SETTLED LAW THA T THE VALIDITY OF THE INITIATION OF THE REASSESSMENT PROCEEDING IS TO BE JUDGED WITH REFERENCE TO THE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER AT THE POINT OF TIME OF THE ISSUE OF NOTICE UNDER SECTION 148. IN THE PRESENT CASE, AS IS EVIDENT FROM THE ASSESSMENT ORDER, THE ASSESSING OFFICER WAS HAVING NOTHING EXCEPT THE LIST PROVIDED BY THE CIT, CENTRAL - 2, NEW DELHI ABOUT THE LIST OF ACCOMMODATION ENTRIES. BEYOND THAT HE WAS NOT HAVING THE COPIES OF THE STATEMENT OF ANY OF THESE PERSONS. HE WAS NOT HA VING COPY OF THE ASSESSMENT ORDERS AND OTHER DETAILS OR DOCUMENT WHICH WOULD HAVE ENABLED THE ASSESSING OFFICER TO APPLY HIS MIND AND FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IN FACT THIS INFORMATION WAS NOT WITH THE ASSESSING OFFICER TILL FAG EN D OF THE REASSESSMENT PROCEEDINGS, A FACT ADMITTED BY THE ASSESSING OFFICER HIMSELF IN THE ASSESSMENT ORDER. THE JUDGMENT RELIED UPON BY THE LEARNED AR ALSO SUPPORTS THE CASE OF THE ASSESSEE. IN THE CASE OF SARTHAK SECURITIES PVT. LTD. VS. ITO (2009) 329 ITR 110 THE HON BLE JURISDICTIONAL DELHI HIGH COURT HAS HELD THAT UNDER THE CIRCUMSTANCES NARRATED 15 HEREINABOVE THE REOPENING CANNOT BE SAID TO BE A VALID REOPENING. THE HON BLE COURT HAS HELD AS UNDER: - IN THE CASE AT HAND, AS IS EVINCIBLE, THE AO WAS AWARE OF THE EXISTENCE OF FOUR COMPANIES WITH WHOM THE ASSESSEE HAD ENTERED INTO TRANSACTION. BOTH THE ORDERS CLEARLY EXPOSIT THAT THE AO WAS MADE AWARE OF THE SITUATION BY THE INVESTIGATION WING AND THERE IS NO MENTION THAT THESE COMPANIES ARE FICTITIOUS COMPANIES. NEITHER THE REASONS IN THE INITIAL NOTICE NOR THE COMMUNICATION PROVIDING REASONS REMOTELY INDICATE INDEPENDENT APPLICATION OF MIND. TRUE IT IS, AT THAT STAGE, IT IS NOT NECESSARY TO HAVE THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME BUT WHAT IS NECESSARY IS THAT THERE IS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF. TO ELABORATE, THE CONCLUSIVE PROOF IS NOT GERMANE AT THIS STAGE BUT THE FORMATION OF BELIEF MUST BE ON THE BASE OR FOUNDATION OR PLATFORM OF P RUDENCE WHICH A REASONABLE PERSON IS REQUIRED TO APPLY. AS IS MANIFEST FROM THE PERUSAL OF THE SUPPLY OF REASONS AND THE ORDER OF REJECTION OF OBJECTIONS, THE NAMES OF THE COMPANIES WERE AVAILABLE WITH THE AUTHORITY. THEIR EXISTENCE IS NOT DISPUTED. WHAT I S MENTIONED IS THAT THESE COMPANIES WERE USED AS CONDUITS. THE SAME HAS NOT BEEN REFERRED TO WHILE PASSING THE ORDER OF REJECTION. THE ASSESSEE IN HIS OBJECTIONS HAD CLEARLY STATED THAT THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH BANKING CHANNEL. THE IDENTITY OF THE COMPANIES WAS NOT DISPUTED. UNDER THESE CIRCUMSTANCES, IT WOULD NOT BE APPROPRIATE TO REQUIRE THE ASSESSEE TO GO THROUGH THE ENTIRE GAMUT OF PROCEEDINGS. IT IS TOTALLY UNWARRANTED. RESULTANTLY, THE INIT IATION OF PROCEEDINGS UNDER S. 147 AND ISSUANCE OF NOTICE UNDER S. 148 ARE HEREBY QUASHED. 16 11. SIMILARLY IN SIGNATURE HOTELS (P) LTD. VS. ITO (2011) 338 ITR 51 (DEL) THE HON BLE COURT HAS ALSO QUASHED THE REOPENING OF THE ASSESSMENT ON THE GROUND THAT THE AO DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME TAX (INV.). THE RELEVANT OBSERVATION OF THE COURT READS AS UNDER: - THE FIRST SENTENCE OF THE REASONS STATES THAT INFORMATION HAD BEEN RECEIVED FROM DIRECTOR OF IT (INV.) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING FINANCIAL YEAR 2002 - 03 AS PER THE DETAILS GIVEN IN ANNEXURE. THE SAID ANNEXURE R ELATES TO A CHEQUE RECEIVED BY THE PETITIONER ON 9TH OCT., 2002 FROM SS LTD. FROM THE BANK AND THE ACCOUNT NUMBER MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PER THE INFORMATION, THE AMOUNT RECEIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE A SSESSEE WAS THE BENEFICIARY. THE AFORESAID REASONS DO NOT SATISFY THE REQUIREMENTS OF S. 147. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAGUE. THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT ANNEXURE. ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. ANNEXURE IS NOT A POINTER AND DOES NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, IT IS APPARENT THAT THE AO DID NOT APPLY HIS OWN MI ND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THE AO ACCEPTED THE PLEA ON THE BASIS OF VAGUE INFORMATION IN A MECHANICAL MANNER. THE CIT ALSO ACTED ON THE SAME BASIS BY MECHANICALLY GIVING HIS APPROVAL. THE REASONS RECORDED R EFLECT THAT THE AO DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF IT (INV.) AND ARRIVE AT A BELIEF WHETHER OR NOT ANY INCOME HAD ESCAPED 17 ASSESSMENT. COMPANY SS LTD. HAD APPLIED FOR AND WAS ALLOTTED SHARES IN THE PETIT IONER COMPANY ON PAYMENT BY CHEQUE OF RS. 5 LACS. SS LTD. IS AN INCORPORATED COMPANY AND THE PETITIONER HAS PLEADED AND STATED THAT THE SAID COMPANY HAS A PAID - UP CAPITAL OF RS. 90 LACS. THE COMPANY WAS INCORPORATED ON 4TH JAN., 1989 AND WAS ALSO ALLOTTED PAN IN SEPTEMBER, 2001. THE FACTS INDICATED ABOVE DO NOT SHOW THAT SS LTD. IS A NON - EXISTING AND A FICTITIOUS ENTITY/PERSON. FOR THE REASONS STATED ABOVE, WRIT OF CERTIORARI IS ISSUED QUASHING THE PROCEEDINGS UNDER S. 148 12. IN THE CASE OF CIT VS. SFIL S TOCKBROKING CO. (2010) 325 ITR 285 (DEL) ALSO THE HON BLE HIGH COURT HAS QUASHED THE REOPENING PROCEEDINGS ON THE GROUND THAT FROM THE REASONS IT IS NOT DISCERNIBLE AS TO WHETHER THE AO HAS APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. THE HON BLE COURT HAS HELD AS UNDER: - THE FIRST SENTENCE OF THE SO - CALLED REASONS RECORDED BY THE AO IS MERE INFORMATION RECEIVED FROM THE DY. DIRECTOR OF IT (INV.). THE SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SAME DY. DIRECTOR TO ISSUE A NOTICE UNDER S. 148 AND THE THIRD SENTENCE AGAIN COMPRISES OF A DIRECTION GIVEN BY THE ADDL. CIT TO INITIATE PROCEEDINGS UNDER S. 148 IN RESPECT OF CASES PERTAINING TO THE RELEVANT WARD. THESE THREE SENTENCE ARE FOLLOW ED BY THE FOLLOWING SENTENCE, WHICH IS THE CONCLUDING PORTION OF THE SO - CALLED REASONS : 'THUS, I HAVE SUFFICIENT INFORMATION IN MY POSSESSION TO ISSUE NOTICE UNDER S. 148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASIS OF REASONS RECORDED AS ABOVE .' FROM THE ABOVE, IT IS CLEAR THAT THE AO REFERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS 'REASONS' ON THE BASIS OF WHICH HE WAS PROCEEDING TO ISSUE NOTICE 18 UNDER S. 148. THESE CANNOT BE THE REASONS FOR PROCEEDING UNDER S. 147/148. THE FIRST PART IS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE BEGINNING PARA OF THE SO - CALLED REASONS ARE MERE DIRECTIONS. FROM THE SO - CALLED REASONS, IT IS NOT AT ALL DISCERNIBLE AS TO WHETHER THE AO HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENT LY ARRIVED AT A BELIEF THAT, ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. CONSEQUENTLY, THE TRIBUNAL HAS ARRIVED AT THE CORRECT CONCLUSION ON FACTS. THERE IS NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR CONSIDERAT ION. 13. IN VIEW OF THE ABOVE DISCUSSED FACTS OF THE PRESENT CASE, THE REOPENING OF THE ASSESSMENT IS WITHOUT APPLICATION OF MIND AND EXAMINATION OF THE FACTS AND ACCORDINGLY THE REOPENING IS HELD TO BE INVALID AND ACCORDINGLY THE SAME IS QUASHED. ACC ORDINGLY THE REOPENING IS HELD TO BE BAD IN LAW AND GROUND NOS.2 AND 3 ARE ALLOWED. 10. ON CAREFUL CONSIDERATION AND VIGILANT PERUSAL OF THE ORDERS OF THE TRIBUNAL INCLUDING THAT OF THE UNIQUE METAL INDUSTRIES [SUPRA] THE AO HAD RECORDED SIMILARLY WORDE D REASONS AND NAME OF THE PARTIES FORM WHICH THE ASSESSEE ALLEGED TO HAVE MADE BOGUS PURCHASES WERE ALSO SAME EXCEPT THE AMOUNT MENTIONED THEREIN IN THE REASONS RECORDED IN THE TABULAR FORM ARE SAME AS IN THE CASE OF THE PRESENT ASSESSEE. THEREFORE, WE HA VE NO ALTERNATIVE BUT TO FOLLOW THE DECISIONS OF THE TRIBUNAL IN THE CASE 19 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA] AND OTHER AS MENTIONED HEREINABOVE . THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE INITIATION OF REA SSESSMENT PROCEEDINGS AS WELL AS ISSUANCE OF NOTICE U/S 148 OF THE ACT WAS NOT VALID AND THE SAME WAS VOID AB INITIO AND THUS WE QUASH THE SAME AND SUBSEQUENTLY THE ASSESSMENT ORDER PASSED IN PURSUANCE THERETO IS ALSO QUASHED. ACCORDINGLY, GROUND NOS. 2 AN D 3 OF THE ASSESSEE ARE ALLOWED. ON MERITS 1 1 . THE REMAINING ISSUES ON MERITS ARE SUSTENANCE OF ADDITION MADE BY THE LD. CIT(A) TO THE EXTENT OF 20% PURCHASES MADE BY THE ASSESSEE DURING F.Y. 2005 - 06 PERTAINING TO A.Y 2006 - 07, FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA] DATED 30.11.2015 AND OTHER CASES OF THE TRIBUNAL, WE NOTE THAT THE TRIBUNAL HAS FOLLOWED THE FINDINGS GIVEN BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE ORDER DATED 28.10.2015 IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA]. THE RELEVANT OPERATIVE FINDING OF THE ORDER OF THE TRIBUNAL IN THE CASE OF RADHEY SHYAM [SUPRA] READS AS UNDER: 7. NOW COMING TO THE MERIT ABOUT THE SUSTENANCE OF THE ADDITION BY THE CIT(A) @ 20% OF THE PURCHASES MADE BY THE AS SESSEE FROM SHRI BANKEY BIHARI TRADING CO., AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH THE ORDER OF THE TRIBUNAL, I 20 NOTED THAT THIS TRIBUNAL VIDE ITS ORDER DATED 28.10.2015 IN THE CASE OF UNIQUE METAL INDUSTRIES (SUPRA), DELETED SIMILAR ADDITION BY OBSERVING IN PARA 27 AS UNDER: 27. AS REGARDS THE ADDITION OF 20% SUSTAINED BY THE LD. CIT(A) I AM OF THE VIEW THAT SINCE PURCHASES ARE NOT BOGUS THE ADDITION ON THIS ACCOUNT CANNOT BE SUSTAINED. EVEN OTHERWISE THE ADDITION OF 20% ON THE FACTS AND CIRCUMSTANCES IS APPARENTLY TOO HIGH. THE LD. CIT(A) HAVING HELD THAT TAX HAS TO BE LEVIED ON REAL INCOME AND THE PROFIT CANNOT BE ASCERTAINED WITHOUT DEDUCTING THE COST OF PURCHASES FROM THE SALES AS OTHERWISE IT AMOUNT TO LEVY OF TAX ON GROSS RECEIPT, S HE OUGHT TO HAVE APPLIED PROFIT RATE IN THIS NATURE OF TRADE. ESTIMATING PROFIT @ 20% BY TAKING INTO CONSIDERATION THE OR VISIONS OF SECTION 40A(3) WILL NOT LEAD TO DETERMINATION OF CORRECT REAL INCOME. SECTION 40A(3) IS MEANT FOR A DIFFERENT PURPOSE WH EN THE ASSESSEE HAS MADE PURCHASES IN CASH. THIS PROVISION CANNOT BE APPLIED IN SUCH CASES. ONCE THE PURCHASES ARE HELD TO BE BOGUS THEN THE TRADING RESULTS DECLARED BY THE ASSESSEE CANNOT BE ACCEPTED AND RIGHT COURSE IN SUCH CASE IS TO REJECT BOOKS OF A CCOUNTS AND PROFIT HAS TO BE ESTIMATED BY APPLYING A COMPARATIVE PROFIT RATE IN THE SAME TRADE. THOUGH THERE CAN BE A LITTLE GUESS WORK IN ESTIMATING PROFIT RATE BUT SUCH PROFIT RATE CANNOT BE PUNITIVE. 12 . HOWEVER, WE MAY POINT OUT THAT THE LD. DR HAS VEHEMENTLY SUPPORTED THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. 21 CIT(A) AND CONTENDED THAT THE LD. CIT(A) HAS QUITE CORRECT IN HOLDING THAT SINCE THE PURCHASES ARE BOGUS, THEREFORE, THE ADDITION TO THE EXTENT OF 20% OF PURCHASES HAS TO BE SUSTAINED. ON SPECIFIC QUERY FROM THE BENCH, THE LD. DR COULD NOT BRING TO OUR NOTICE ANY COGENT OR RELEVANT MATERIAL OR EVIDENCE WHICH MAY COMPEL US TO TAKE A DIFF ERENT VIEW WHICH COULD LEAD US TO NOT TO FOLLOW THE DECISION OF THE CO ORDINATE BENCHES OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA] AND OTHER RELEVANT ORDERS . W E THEREFORE, RESPECTFULLY FOLLOW ING THE DECISION OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA] WHICH DELETED THE ADDITION AS SUSTAINED BY THE LD. CIT(A) BEING 20% OF THE PURCHASES MADE BY THE ASSESSEE DURING THE RELEVANT F.Y. CONSEQUENTLY, THE GROUNDS OF THE ASSESSEE ON MERITS ARE ALSO ALLOWED. 13 . AS A RESULT, T HE APPEAL OF THE ASSESSEE IN ITA NO. 1365/DEL/2015 IN THE CASE OF KRISHNI METAL STORE VS. ITO ARE ALLOWED. 1 4 . SINCE THE LD. DR HAS FAIRLY ACCEPTED THAT THE FACTS AND CIRCUMSTANCES IN THE CASE OF UNIQUE METAL INDUSTRIES [SUPRA] ARE QUITE SIMILAR TO THE FACTS AND CIRCUMSTANCES IN ITA NO. 22 1365/DEL/2015 IN THE CASE OF KRISHNI METAL STORE VS. ITO IN ALL THE OTHER FIVE APPEALS VIZ:, 1. ITA NO. 1370/DEL /2015 [2006 - 07] BHARDWAJ METAL[INDIA] 2 . ITA NO. 1369/DEL /2015 [2006 - 07] LAXMI DHATU BHANDAR 3. ITA NO. 1379/DEL /2015 [2006 - 07] KRISHAN LAL & SONS 4 . ITA NO. 1380/DEL /2015 [2006 - 07] KAKKAR BARTAN STORE 5. ITA NO. 1366/DEL /2015 [2006 - 07] KASHMIR METAL STORE THEREFORE, OUR CONCLUSION DRAWN BY THE EARLIER PART OF THIS ORDER IN THE CASE OF KRISHNI METAL STORE VS. ITO [SUPRA] WOULD APPLY MUTATIS MUTANDIS TO ALL THE OTHER FIVE APPEALS AS WELL. CONSEQUENTLY , THE LEGAL GROUNDS AS WELL AS GROUNDS ON MERITS IN ALL THE OTHER ABOVE MENTIONED FIVE APPEALS ARE ALSO ALLOWED. 1 5 . IN THE RESULT, ALL THE SIX APPEAL S OF THE ASSESSEE STAND ALLOWED . THE ORDER IS PR O NOU NCED IN THE OPEN COURT O N 2 3 . 0 3 .201 6 . S D / - S D / - ( L.P. SAHU ) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 3 R D MARCH , 2016 VL/ 23 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI