A.P. Metal Company, Delhi V. ITO, New Delhi

ITA 1373/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4888 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Question of law; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 69C; 40A(3); 153A; 147; 148

Judgement Text

IN THE INCOME - TAX APPELLATE TRIBUNAL, DELHI BENCH A , NEW DELHI BEFORE : SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1367/DEL./2015 ASSESSMENT YEAR: 2006 - 07 BRIGHT METAL AGENCIES, 5888/3, BASTI HARPHOOL SINGH, SADAR BAZAR, DELHI (PAN - AAHPK6455G) (APPELLANT) VS. INCOME - TAX OFFICER, WARD 39(3), NEW DELHI. (RESPONDENT) ITA NO. 1373/DEL./2015 ASSESSMENT YEAR: 2006 - 07 A.P. METAL COMPANY, PROP. PRADEEP KUMAR GUPTA, 1990, BAGICHI RAGHUNATH, SADAR BAZAR, DELHI (PAN - AAEPG7987L) (APPELLANT) VS. INCOME - TAX OFFICER, WARD 39(3), NEW DELHI. (RESPONDENT) APPELLANT S BY SHRI VED JAIN, ADVOCATE RESPONDENT BY SHRI ARUN KUMAR YADAV, SR. DR ORDER PER L.P. SAHU, A.M.: THESE TWO APPEALS FILED BY DIFFERENT ASSESSES, ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A) - XX, NEW DELHI FOR THE ASSESSMENT YEAR 2006 - 07. SINCE THE FACTS AND CIRCUMSTANCES OF THESE CASES ARE SIMILAR, COMMON QUESTIONS OF LAW AND FACTS ARE INVOLVED THEREIN AND BOTH THESE APPEALS WERE DATE OF HEARING 0 8.08.2017 DATE OF PRONOUNCEMENT 30 .08.2017 ITA NOS. 1367 & 1373/DEL./2015 2 HEARD TOGETHER, THEREFORE, FOR THE SAKE OF BREVITY AND CONVENIENCE, BOTH THE APPEALS ARE BEING DISPOSED OF BY T HIS CONSOLIDATED ORDER. 2. FIRST OF ALL, FOR APPRECIATION OF FACTS AND CIRCUMSTANCES OF THE CASE, WE TAKE UP ITA NO. 1367/DEL/2015 IN THE CASE OF BRIGHT METAL AGENCIES. THE GROUNDS RAISED IN THIS APPEAL BY ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE 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 AND 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 CIRC UMSTANCES 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 SEC TION 148 ARE BAD IN THE EYE OF LAW AND ARE CONTRARY 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 A ND LIABLE TO BE QUASHED AS THE SAME HAS BEEN 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. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE ADDITION OF AN ITA NOS. 1367 & 1373/DEL./2015 3 AMOUNT OF RS.4,87,030/ - 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 THE 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 VISH U TRADING COMPANY, & M/S OM AGENCIES 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 CIRCUMSTANCES 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 BUSIN ESS 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 TH E QUANTITY PURCHASED AND SOLD THE ALLEGATION THAT THE ASSESSEE 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 MADE IN REGULAR COURSE OF THE BUSINESS AND MATERIAL SO PURCHASED WAS SOLD IN THE REGULAR COURSE OF BUSINESS. 10. ON THE FACTS AND CIRCUMS TANCES 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 ASSESSEE 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 OPPORTUNI TY TO CROSS EXAMINE THE PERSON ON THE BASIS OF WHOSE STATEMENT THE ITA NOS. 1367 & 1373/DEL./2015 4 ALLEGATIONS HAVE BEEN MADE AGAINST THE ASSESSEE AND WITHOUT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE. 3. GROUND NO. 1 IS GENERAL IN NATURE AND NEED NO ADJUDICATION AT OUR END. 4. GROUND NOS. 2 AND 3 , CHALLENGING THE VALIDITY OF REOPENING OF ASSESSMENT ARE LEGAL GROUNDS. 5. THE BRIEF FACTS OF THE CASE ARE THAT APPELLANT FILED ITS RETURN OF INCOME ON 31.10.2006 DECLARING AN INCOME OF RS.1,07,000/ - . THE SAME WAS PROCESSED U/S. 131(1) OF THE ACT ON 29.01.2007. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE COMMISSIONER OF INCOME TAX, CENTRAL - II THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES FROM ENTRY PROVIDERS, THE AO REOPENED THE CASE BY ISSUING NOTICE U/S. 148 AFTER RECOR DING THE REASONS ON 28.03.2013 . THE ASSESSEE RAISED OBJECTIONS ON REOPENING OF ASSESSMENT, WHICH STOOD DISPOSED OF BY AO AND AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE , THE ASSESSING OFFICER MADE AN ADDITION OF RS.24,35,150/ - U/S. 69C OF THE ACT, T REATING THE SAME AS ACCOMMODATION ENTRIES OF BOGUS PURCHASES, MADE BY THE ASSESSEE. THE LEARNED CIT(A) VIDE IMPUGNED ORDER, REJECTED THE PLEA RAISED BY ASSESSEE ON VALIDITY OF REOPENING PROCEEDINGS AND RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 20% OF TH E BOGUS PURCHASES OF RS.24,35,150/ - , REPRESENTING TO THE PROFITS DERIVED OUT OF SUCH PURCHASES VIDE ITA NOS. 1367 & 1373/DEL./2015 5 THE IMPUGNED ORDER. IT IS THIS ORDER, WHICH IS ASSAILED BY THE ASSESSEE IN THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS DRAW ING 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 , SUBMITTED 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 PASSED 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; M/S. PUNJAB METAL SORE VS. ITO ITA NO. 1512/DEL/2015 DATED 02/12/2015; M/S. KARSHINI METALS VS. ITO, ITA NO. 1366/DEL/2015 DATED 23/03/2016 AND THE LEGAL G ROUNDS 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 SUPPORTED THE ACTION OF THE AO FOR REOPENING OF ASSESSMENT, INITIATION OF PROCEEDINGS AND ISSUANCE OF N OTICE U/S 147/148 OF THE ACT. 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. HOWEVER, ON A SPECIFIC QUERY FROM THE BENCH, THE LD. DR ITA NOS. 1367 & 1373/DEL./2015 6 FAIRLY SUBMIT TED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS REASONS RECORDED BY THE AO IN THE CASE OF UNIQUE METAL INDUSTRIES VS. ITO ( SUPRA ) AND OTHER CASES MENTIONED HEREINABOVE, ARE SIMILAR TO THE FACTS OF THE PRESENT CASE. 8. ON A CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS AND PERUSAL OF MATERIAL AVAILABLE ON RECORD, WE OBSERVE THAT THE AO INITIATED THE ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AND ISSUED NOTICE U/S 148 OF THE ACT BY RECORDING THE FOLLOWING REASONS: REASONS FOR THE BELI EF THAT THE INCOME HAS ESCAPED ASSESSMENT IN THE CASE OF M/S BRIGHT METAL AGENCIES 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 PROVIDE D 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 PRO VIDED BY THE CIT, CENTRAL - II, NEW DELHI VIDE HIS LETTER DATED 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 S UBJECT MENTIONED ABOVE. 2 . THE ASSESSMENT OF SEARCH CASES OF SH. RAKESH GUPTA, SH. VISHESH GUPTA, SH. NAVNEET JAIN & SH. VAIBHAV JAIN ARE UNDER ITA NOS. 1367 & 1373/DEL./2015 7 PROCESS WITH THE ACIT, CENTRAL CIRCLE - 10. DURING THE ASSESSMENT PROCEEDINGS U/S 153A IN THE AFORESAID CASES, DETAIL S REGARDING ACCOMMODATION ENTRIES GIVEN BY THE ABOVE ENTRY 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 THROUGH THIRTY SEVEN PAPER ENTITIES. THE LIST 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. V AIBHAV 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. 7. THIS INFORMATION IS FORWARDED TO YOU FO R EARLY DISSEMINATION TO VARIOUS FIELD OFFICES IN DELHI. ON EXAMINING THE LIST OF ACCOMMODATION ENTRIES 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 FOLLO WING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE ASSESSEE NAMELY M/S KRISHAN LAL GAMBHIR& SONS: ITA NOS. 1367 & 1373/DEL./2015 8 S. NO. ACCOMMODATION ENTRY PROVIDED BY NAME OF PARTY TO WHOM ACCOMMODATION ENTRY IS PROVIDED AMOUNT OF ACCOMMODATION N ENTRY 1. VISHUTRADING CO. M/S BRIGHT METAL AGENCIES 17,63,016 2. OM AGENCIES M/S BRIGHT METAL AGENCIES 6,72,134 TOTAL AMOUNT OF ENTRIES 24,35,150 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 BRIGH T METAL AGENCIES, WHOSE NAME IS APPEARING IN THE SAID LIST, HAS TAKEN ACCOMMODATION ENTRIES FROM SHRI RAKESH GUPTA & SH. VISHESH GUPTA AND SH. NAVNEET JAIN & SH. VAIBHAVJAIN PERTAINING TO A.Y. 2006 - 07. ALSO THE DETAILS OF INCOME TAX RETURN FILED BY BRIGHT METAL AGENCIES FOR A.Y. 2006 - 07 AND PROCESSING DONE U/S 143(1) OF I.TAX ACT THEREOF WERE TAKEN 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 . 24,35,150/ - 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 CONSI DERATION 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) 28.03.2013 INCOME TAX OFFICER, WARD 39(3), NEW DELHI ITA NOS. 1367 & 1373/DEL./2015 9 9. FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES VS. ITO ( SUPRA ) IT IS VIVID THAT THE TRIBUNAL ON THE SIMILAR REASONS RECORDED , HELD AS UNDER WHILE DECIDING THE LEGAL ASPECT OF THE CASE : 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, A CCOMMODATION 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 CONTAINED THE NAME OF THE ASSESSEE. THE ASSESSING OFFICER REOPENED 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 ABOVE 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 PROVIDE D 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 WITH 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 DETAILS/DOCUMENTS WERE SOUGHT: - (I) COPIES OF THE STATEMENTS RECORDED OF SH. RAKEH GUPTA &SH. VISHESH GUPTA , SH. NAVNEET JAIN & SH. VAIBHAV JAIN IN SEARCH/POST SEARCH/ASSESSMENT PROCEEDINGS. (II) SOFT COPIES OF THE S TATEMENTS RECORDED OF SH. RAKEH GUPTA& SH. VISHESH GUPTA , 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. ITA NOS. 1367 & 1373/DEL./2015 10 (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 27.12.2013, 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 ANNEX URE ENCLOSED THEREIN, THIS OFFICE WAS OF THE VIEW THAT THE PURCHASE BILLS PROVIDED BY THE 11 FIRMS/CONCER N S CONTROLLED AND MANAGED BY SH. RAKESH GUPTA AND SH. VISHESH GUPT A 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 BAS IS OF WHICH THE ASSESSING OFFICER COULD MAKE A VIEW THAT THE PURCHASE BILLS PROVIDED BY THESE PERSONS OR THEIR FAMILY MEMBERS IS NOTHING BUT BOGUS PURCHASE BILLS. AT THE TIME OF RECORDING OF THE REASONS THE ASSESSING OFFICER APPARENTLY WAS NOT HAVING ANY I DEA ABOUT THE NATURE OF THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE. IN THE REASONS RECORDED THERE IS NO MENTION ABOUT THE NATURE 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 MEA N 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 THA T THE TAXABLE INCOME HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, ON GOING THROUGH THE REASONS IT IS QUITE EVIDENT THAT THE ASSESSING OFFICER 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 ITA NOS. 1367 & 1373/DEL./2015 11 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 PROPOSED 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 OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. IT MAY ALSO BE RELEVANT THAT O N 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 WAS WITH THE SAME WAR D 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 LETTER 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 REASONING BY WHICH THE ASS ESSING 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 THAT THE VALIDITY OF THE INI TIATION 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 ASSE SSING 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 HAVING 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 END 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 TH E HON BLE JURISDICTIONAL DELHI HIGH COURT HAS HELD THAT UNDER THE CIRCUMSTANCES NARRATED 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 ITA NOS. 1367 & 1373/DEL./2015 12 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 EST ABLISHED 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 PRUDENCE 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 IS 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 BA NK 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 INITIATION OF PROCEEDINGS UNDER S. 147 AND ISSUANCE OF NOTICE UNDER S. 148 ARE HEREBY QUASHED. 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 ITA NOS. 1367 & 1373/DEL./2015 13 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 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. SF IL STOCKBROKING 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 TH E 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 FOLLOWED 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 UNDER S. 148. THESE CANNOT ITA NOS. 1367 & 1373/DEL./2015 14 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 INDEPENDENTLY 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 F ACTS. THERE IS NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES FOR CONSIDERATION. 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. ACCORDINGLY 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 ) , WE OBSERVE THAT THE AO HAD RECORDED SIMILARLY WORDED REASONS AND NAME OF THE PARTIES FORM WHOM THE ASSESSEE ALLEGED TO HAVE M ADE BOGUS PURCHASES WERE ALSO SAME EXCEPT THE AMOUNT MENTIONED THEREIN IN THE REASONS RECORDED IN THE TABULAR FORM , AS IN THE CASE OF THE PRESENT ASSESSEE. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES ( SUPRA ), HOLD THAT THE INITIATION OF REASSESSMENT 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 , LIABLE TO BE QUASHED ALONG WITH ASSESSMENT ORDER PASSED IN PURSUA NCE THERETO. ACCORDINGLY, GROUND NOS. 2 AND 3 OF THE ASSESSEE ARE ALLOWED. ITA NOS. 1367 & 1373/DEL./2015 15 11. NOW COMING TO THE MERIT ABOUT THE SUSTENANCE OF THE ADDITION BY THE CIT(A) @ 20% OF THE PURCHASES MADE BY THE ASSESSEE FROM M/S VISHU TRADING COMPANY, & M/S OM AGENCIES., AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH THE ORDER OF THE TRIBUNAL, WE NOTE 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, SHE OUGHT TO HAVE APPLIED PROFIT RATE IN THIS NATURE O F 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 WHEN THE ASSESSEE HAS MADE PURCHASES IN CASH. THIS PROVISI ON 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 ACCOUNTS AND PROFIT HAS TO BE ESTIMATED BY APPLYING A COMPA RATIVE 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. T HE LD. DR COULD NOT BRING TO OUR NOTICE ANY COGENT OR RELEVANT MATERIAL OR EVIDENCE WHICH MAY LEAD US TO TAKE A DIFFERENT VIEW AND 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. WE , THEREFORE, RESPECTFULLY ITA NOS. 1367 & 1373/DEL./2015 16 FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF UNIQUE METAL INDUSTRIES ( SUPRA ), WHEREBY THE ADDITION OF 20% OF THE PURCHASES SUSTAINED BY THE LD. CIT(A) HAS BEEN DELETED IN THE IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE , ARE NOT INCLINED TO SUSTAIN THE SIMILAR ADDITION IN THE INSTANT CASE . CONSEQUEN TLY, THE GROUNDS OF THE ASSESSEE ON MERITS ARE ALSO FOUND COVERED IN FAVOUR OF ASSESSEE BY THE AFORESAID DECISION AND ARE ACCORDINGLY ALLOWED. 13. AS A RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 1367/DEL/2015 ARE ALLOWED. 14. SINCE BOTH THE PARTIES FAIR LY ACCEPTED THAT THE FACTS AND CIRCUMSTANCES IN THE CASE OF A.P. METAL COMPANY (ITA NO. 1373/DEL./2015) ARE IDENTICAL TO THE APPEAL OF M/S. BRIGHT METAL INDUSTRI ES (ITA NO. 1367/DEL./2015) , THEREFORE, OUR DECISION RENDERED IN APPEAL OF M/S. BRIGHT METAL IN DUSTRIES, WOULD APPLY MUTATIS MUTANDIS TO THE APPEAL OF M/S. A.P. METAL COMPANY. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN ITA NO. 1373/DEL/2015 ALSO STANDS ALLOWED. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. 16. ORDER PRONOUNCED IN THE OPEN COURT ON 30.08.2017 . SD/ - SD/ - ( AMIT SHUKLA ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30.08.2017 *AKS*