ITO, Tiruppur V. M/s. J.C.M.Exports, Tiruppur

ITA 1521/CHNY/2007

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6237 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 29-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SRIDHAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO. 1521/MDS/2007 / ASSESSMENT YEAR : 2002-03 THE INCOME TAX OFFICER WARD I(3) TIRUPUR VS. M/S J.C.M. EXPORTS 150, MUMMOORTHY NAGAR POOLUVAMPATTI PIRIVU P.N. ROAD TIRUPUR [PAN AACFJ 3819 N] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI N. MADHAVAN, JCIT /RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 10-06-2014 ! / DATE OF PRONOUNCEMENT : 13-06-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2002-03 , IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCO ME-TAX(APPEALS)-II, COIMBATORE DATED 30.3.2007, PASSED IN I.T.A.NO.146C /05-06 IN I.T.A.NO. 1521/07 :- 2 -: PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE SOLE SUBSTANTIVE GROUND RAISED BY THE REVENUE I S THAT THE CIT(A) OUGHT TO HAVE UPHELD IMPUGNED ADDITION O F UNACCOUNTED PROFITS BROUGHT INTO THE BUSINESS BY THE ASSESSEE OF ` 45 LAKHS MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 31.3.2005. IN THE COURSE OF HEARING, THE REVENUE REITERATES ITS PLEAD INGS TO ARGUE THAT THE IMPUGNED ADDITION HAS BEEN WRONGLY DELETED IN T HE LOWER APPELLATE PROCEEDINGS. PER REVENUE, IT IS A CLEAR CUT CASE W HEN THE ASSESSEE HAS BROUGHT ITS UNACCOUNTED PROFITS BY CHANGING ACC OUNTING ENTRIES FROM ITS SISTER CONCERN M/S MERU IMPEX TO A COMMON PARTNER SHRI DINESH JAIN. ACCORDINGLY, ACCEPTANCE OF APPEAL HAS BEEN PRAYED FOR. 3. THE ASSESSEE RELIES ON CIT(A)S ORDER UNDER CHALLE NGE AND PRAYS FOR REJECTION OF THE APPEAL. 4. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF GARMENT SUPPLYING. IT IS HAVING ITS SISTER CONCERNS NAMELY , M/S MERU IMPEX. M/S ARHAM AND M/S VARDHMAN TEXTILES. ONE SHRI DINE SH S. JAIN IS A COMMON PARTNER OF THE ASSESSEE AND M/S MERU IMPEX. ON 30.10.2002, THE ASSESSEE HAD FILED ITS RETURN DECL ARING TOTAL INCOME OF ` 1,20,650/- WHICH WAS SUMMARILY PROCESSED. I.T.A.NO. 1521/07 :- 3 -: 5. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER FOUND THE ASSESSEE TO HAVE TRANSFERRED IN ITS BOOKS A SUM OF ` 45 LAKHS TO CAPITAL ACCOUNT OF SHRI DINESH JAIN. THIS ENTRY DA TED 1.7.2001 WAS CLASSIFIED AS TRANSFER FROM MERU IMPEX ACCOUNT. PER ASSESSING OFFICER, THIS ENTRY DID NOT FIGURE IN THE LEDGER FO LIO OF THE OTHER ENTITY PERTAINING TO DATED 1.7.2001. PER ASSESSEE, THIS E NTRY INDICATED A PURPOSE OF SECURING INCREASED BANK LOANS. ITS FURT HER PLEA WAS THAT ITS OTHER PARTNERS WERE WORKING. SO, ONLY IN THE AC COUNT OF SHRI DINESH JAIN THIS FUND FLOW COULD BE DEMONSTRATED. THE AS SESSEE ALSO EXPLAINED THAT IN SUBSEQUENT ASSESSMENT YEAR, THIS ENTRY STOOD REVERSED AND ALSO PLACED ON RECORD THE NECESSARY AC COUNTS. ON THIS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PLACE ON RECORD ANY EVIDENCE OF AGREEMENT OR NECESSARY SANCTION OF THE REMAINING PARTNERS OF M/S MERU IMPEX. THE ASSESSEE COULD NO T FILE ANY. IN THESE CIRCUMSTANCES, THE ASSESSING OFFICER ADDED TH IS AMOUNT OF ` 45 LAKHS AS ACTUAL MONEY OF THE ASSESSEE IN THE SHAP E OF UNACCOUNTED PROFITS BROUGHT INTO BUSINESS. 6. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL. IN LOWER APPELLATE PROCEEDINGS THE CIT(A) SOUGHT FOR A REMAN D REPORT AND HAS DELETED THE ADDITION AS UNDER: I.T.A.NO. 1521/07 :- 4 -: 3.2 THE APPELLANT, ON THE OTHER HAND, SUBMITTED THAT NEW CREDIT OF ` 45 LAKHS TO THE CAPITAL ACCOUNT OF SHRI DINESH G J AIN (HUF) WAS POSSIBLE BY MERE BOOK TRANSFER, DEBITING THE AC COUNT OF M/S MERU IMPEX, TIRUPUR A SISTER CONCERN IN WHICH SRI DINESH KUMAR JAIN AS A COPARCENER IS ALSO A PARTNER AND CREDITIN G THE CAPITAL ACCOUNT OF SRI DINESH G. JAIN (HUF). M/S. MERU IMPE X IS THE MAJOR JOB SUPPLIER TO THE APPELLANT INCLUDING T HE SUPPLY OF FUNDS ARD MATERIALS. THIS BOOK TRANSFER WAS MADE IN ORDER TO SATISFY THE BANK NORMS FOR THE PURPOSE OF AVAILING FINANCIAL ASSISTANCE. PRIOR TO THE TRANSFER OF THE CREDIT BAL ANCE AVAILABLE WITH M/S. MERU IMPEX, THE TOTAL CAPITAL ACCOUNT OF THE PARTNERS SHOWED A BALANCE OF RS. 1,00,000/- (RUPEES ONE LAKH ONLY). THE PARTNERS OF THE FIRM HAD APPROACHED CANARA BANK FOR THE PURPOSE OF AVAILING FINANCIAL ASSISTANCE. THE CAPITAL WAS C ONSIDERED TO BE TOO LOW AND THE BANKER REQUIRED THE FIRM TO COME WI TH INCREASED CAPITAL IN THE ACCOUNT OF THE PARTNERS. IN THIS REG ARD THE PARTNERS MUTUALLY AGREED AND DECIDED TO MAKE A BOOK TRANSFER FROM THE ACCOUNT OF M/S. MERU IMPEX BY DEBITING IT'S ACC OUNT AND CREDITING THE CAPITAL ACCOUNT OF SRI DINESH G. JAIN . THE ACCOUNT OF M/S. MERU LMPEX IS IN CREDIT IN THE BOOKS OF THE AS SESSEE. SINCE SRI DINESH G. JAIN IS A PARTNER IN M/S. MERU IMPEX, WITH THE CONCURRENCE OF THE PARTNERS AND M/S. MERU IMPEX, IT WAS DECIDED TO MAKE A BOOK TRANSFER BY DEBITING THE ACCOUNT OF M/S .MERU IMPEX AND CREDITING THE CAPITAL ACCOUNT OF SRI DINE SH G. JAIN (HUF) WITH A SUM OF RS. 45.00 LAKHS ON 01/07/2001. ACCORDINGLY A TRANSFER ENTRY CREDITING IN THE CAPITAL ACCOUNT O F SRI DINESH G. JAIN WAS EFFECTED ON 01.07.2001 AND CORRESPONDINGLY IT WAS DEBITED IN THE ACCOUNT OF M/S.MERU IMPEX. THE DEBIT ENTRY IN THE ACCOUNT OF MERU IMPEX IS FOUND IN L.F. NO.19 AND CO RRESPONDING CREDIT ENTRY IN THE CAPITAL ACCOUNT OF DINESH G. JA IN IS FOUND IN L.F.NO.3. IN VIEW OF THESE FACTS IT WAS SUBMITTED T HAT THE CAPITAL INTRODUCED WAS THE RESULT OF TRANSFER ENTRY ONLY AN D NOT THROUGH ANY ACTUAL INTRODUCTION OF FUND. IT WAS THEREFORE S UBMITTED THAT NO ADDITION IS JUSTIFIED. 3.3 DURING THE APPELLATE HEARING ON 2/2/2006, SHRI K. MURALEEDHARAN FCA APPEARED. THE PRESENT ASSESSING OFFICER MR.M.THANGAVELU ITO WAS ALSO PRESENT. THE ABOVE SU BMISSION MADE BY THE LD. A.R WAS BROUGHT TO HIS NOTICE AND HE WAS ASKED TO OFFER HIS COMMENTS. SHRI M. THANGAVELU, ITO WAN TED CROSS VERIFICATION ABOUT THE ENTRY MADE IN THE CAPITAL AC COUNT OF THE PARTNER MR. DINESH G. JAIN WITH REFERENCE TO THE BO OKS/RETURNS OF M/S. MERU IMPEX. THE ID. AR WAS NOT HAVING ANY OBJE CTION TO SUCH CROSS-VERIFICATION. ACCORDINGLY, A COPY OF THE SUBM ISSIONS OF THE APPELLANT WAS HANDED OVER TO THE AO. HE WAS DIRECTE D TO GO THROUGH THE SUBMISSIONS OF THE APPELLANT. SRI MURAL EEDHARAN, THE ID AR WAS ALSO DIRECTED TO APPEAR BEFORE HIM AND FU RNISH ALL THE I.T.A.NO. 1521/07 :- 5 -: DETAILS TO ENABLE HIM TO DO THE NECESSARY CROSS-VER IFICATION. BEFORE HIM, THE ID. AR HAS APPEARED ON NUMBER OF OCCASIONS AND HAD FURNISHED VARIOUS DETAILS ALSO. T HREE INTERIM REMAND REPORTS DATED 07/06/2006, 08/09/2006 AND 12/03/2007 HAVE BEEN RECEIVED IN THIS OFFICE. A FINAL REMAND R EPORT DATED 28/03/2007 HAS ALSO BEEN RECEIVED FROM THE JCIT, TI RUPUR RANGE, TIRUPUR ON 28/3/2007 BY FAX WHEN THE CASE WAS POSTE D FOR FINAL HEARING BASED ON THE THIRD INTERIM REMAND REPORT. T HIS REPORT HAS BEEN DISCUSSED WITH THE APPELLANT ALSO WHO WAS PRES ENT ON 28/3/2007 DURING HEARING. AFTER GOING THROUGH THE F ACTS OF THE CASE, ASSESSMENT ORDER, SUBMISSIONS OF THE APPELLAN T COPIES OF ACCOUNTS PRODUCED AND FINAL REMAND REPORT, THIS ISS UE IS DECIDED AS UNDER: 3.3.1. THE OPENING CAPITAL OF ALL THE PARTNERS IN T HE FIRM WAS ONLY RS. 1,00,000/- OUT OF WHICH THE OPENING BALANCE OF DINESH G. JAIN WAS RS. 50,000/- AND OF OTHER FIVE PARTNERS IT WAS RS. 10,000/- EACH. THERE IS AN INTRODUCTION OF ADDITIONAL CAPITA L OF RS. 45,00,000/- IN THE ACCOUNT OF DINESH G.JAIN BY A JO URNAL ENTRY BY DEBITING THE ACCOUNT M/S. MERU IMPEX AND CREDITING THE CAPITAL A/C. OF THE PARTNER. THOUGH THE ENTRY IN THE CAPITA L ACCOUNT OF SHRI DINESH G. JAIN (LF NO. 3) INFLATING HIS CAPITAL BY RS. 45,00,000/- IS DATED 1/7/2001, IT APPEARS THAT IT IS NOT THE ACTUAL DATE OF ENTRY AS THE CORRESPONDING DEBIT ENTRY IN THE CASE OF M/S. M ERU IMPEX HAS NOT BEEN MADE ON 01/07/2001 THE ENTRY IN THE LEDGER ACCOUNT OF M/S. MERU IMPEX HAS BEEN DONE ON LF NO.19 AND THIS ENTRY IS UNDATED. THUS THE OBSERVATION OF AO IS ONLY PARTIAL LY CORRECT THAT CORRESPONDING TO ENTRY IN THE LEDGER OF SRI DINESH JAIN, THERE IS NO ENTRY IN THE LEDGER OF M/S MERU IMOEX. IT IS CORRECT ONLY TO THE EXTENT THAT THE ENTRY IN LEDGER FOLIO OF M/S MERU IMPEX IS NOT ON 1/07/2001. IT IS WORTH MENTIONING THAT IN THE BOOK S OF ACCOUNT OF THE APPELLANT, REGULAR PAGE ALLOTTED FOR M/S MERU I MPEX A/CAPITAL ARE 16,17 & 18. ALL THE ENTRIES UPTO 31 ST MARCH 2002 WERE MADE IN LF NO.16, 17 & UPTO THE END OF PAGE 18. PAGE NO. 19 IS ALLOTTED TO M/S. VARDHMAN TEXTILES ACCOUNT. AS THERE WAS SPA CE AVAILABLE ON THIS PAGE, THE ACCOUNT OF M/S MERU IMPEX HAS BEEN TAKEN TO THE LOWER HALF PAGE OF LF NO. 19 WHEREIN THIS DEBIT ENT RY OF RS. 45,00,000/- HAS BEEN MADE. THE ENTRY IN THE LEDGER ACCOUNT OF M/S. MERU IMPEX WAS NOT POSSIBLE TO BE MADE ON 1 /7/2001 AS THERE IS ARUNNING ACCOUNT AND THERE WAS NO SPACE TO INSERT THIS ENTRY WHEREAS IN THE CAPITAL ACCOUNT OF DINESH G. J AIN ON LF NO.3, THERE WAS SUFFICIENT SPACE TO INSERT THE ENTR Y ON 01/07/2001. THAT IS WILY THOUGH THE ENTRY IN THE CAPITAL ACCOUN T OF THE PARTNER IS DATED 1.07.2001, THE CORRESPONDING J OURNAL ENTRY HAS BEEN MADE BY DEBITING THE ACCOUNT OF M/S. MERU IMPEX ONLY AT THE END OF THE ACCOUNT. (THIS ENTRY IS NOTED IN PAGE 19 OF THE LEDGER). THUS, IN MY OPINION, NOT MUCH SIGNIFICANCE CAN BE I.T.A.NO. 1521/07 :- 6 -: ATTRIBUTED TO THE DATE 01/07/2001 AS APPEARING IN CAPITAL ACCOUNT OF DINESH G. JAIN. ACTUALLY, THE JOURNAL EN TRY CREDITING THE CAPITAL ACCOUNT OF PARTNER DINESH G. JAIN BY RS. 45 LAKHS AND CORRESPONDINGLY DEBITING THE ACCOUNT OF M/S. MERU I MPEX HAS BEEN MADE ONLY AT THE YEAR END. EFFECTIVELY BY THIS JOURNAL ENTRY, THE CREDIT BALANCE APPEARING IN THE NAME OF M/S. ME RU IMPEX IN THE BOOKS OF THE APPELLANT, HAS BEEN TRANSFERRED TO THE EXTENT OF RS. 45 LAKHS AS CAPITAL OF THE PARTNER VIZ. DINESH G. JAIN. THERE IS NO OTHER CHANGE IN THE BOOKS OF ACCOUNTS, PROFIT AND LOSS A/C. OR BALANCE-SHEET OF THE APPELLANT BY THIS ENTR Y. 3.3.2. THE FACT THAT ADDITIONAL CAPITAL INTRODUCTIO N IS MADE BY JOURNAL ENTRY IS VERY IMPORTANT. THE VERY FACT THAT IT IS DONE BY JOURNAL ENTRY BY DEBITING THE ACCOUNT OF M/S MERU IMPEX AND CREDITING THE CAPITAL A/C. OF THE PARTNER, SHOWS TH AT NO MONEY TRANSFER BY WAY OF MOVEMENT OF CASH OR CHEQUE HAS A CTUALLY TAKE PLACE FOR INFLATING THE CAPITAL OF SHRI DINESH G. J AIN. BY THIS ENTRY, THERE IS NO ADDITIONAL ACCRETION TO THE ASSE T. IDEALLY, THERE SHOULD HAVE BEEN A CORRESPONDING DEBIT ENTRY IN THE CAPITAL ACCOUNT OF DINESH G.JAIN IN THE BOOKS OF M/ S. MERU IMPEX AND CREDIT ENTRY IN THE ACCOUNT OF THE APPELL ANT. BUT AS MENTIONED BY THE JCIT AND ADMITTED BY THE LD. AR AL SO, NO CONSEQUENTIAL ENTRY WAS MADE IN THE BOOKS OF M/S ME RU IMPEX. THUS IT IS VERY CLEAR THAT IT IS A UNILATER AL ACT OF THE APPELLANT IN ITS BOOKS OF AC TO SPLIT THE CREDIT BA LANCE IN TWO PARTS TO REDUCE THE CREDITOR AND INCREASE THE CAPIT AL OF ONE OF THE PARTNER WHO IS PARTNER IN THE CASE OF M/S MERU IMPEX ALSO, JUST TO SUIT ITS PURPOSE OF AVAILING INCREAS ED FINANCIAL ASSISTANCE. 3.3.3. THE BALANCE-SHEET OF THE APPELLANT AS ON 31 .3.2002 HAS BEEN PERUSED. THE TOTAL CAPITAL IS RS. 46,00,000/- AND M/S MERU IMPEX HAS BEEN SHOWN AS CREDITOR IN THE BALANCE-SHE ET FOR RS. 7,03,085/-. IN THE LEDGER FOLIO OF M/S MERU IMPEX, JUST BEFORE PASSING THE JOURNAL ENTRY UNDER REFERENCE, THE CRED IT BALANCE WAS OF RS. 48,20,314/-. THERE ARE TWO OTHER JOURNAL ENTRIES OF RS. 12,51,253/- REPRESENTING TRANSFER FROM VARDHMAN TEXTILES (CREDIT) AND OF RS 8,68,482/- (DEBIT) REPR ESENTING TRANSFER FROM ONE ARHAM, THEREBY MAKING THE CLOSING CREDIT BALANCE OF M/S MERU IMPEX OF RS. 7,03,085/- AT THE YEAR END. IF THIS UNILATERAL ENTRY OF RS 45 LAKHS WOULD NOT HAVE BEEN MADE THEN THE CAPITAL WOULD HAVE BEEN RS 1,00,000/- AND M/S MERU IMPEX WOULD HAVE BEEN CREDITORS FOR RS. 52,03,085/-. THUS IT IS ONLY TO BE SEEN AS TO WHETHER IN THE BOOKS OF M/S MERU IRNPEX THE DEBIT BALANCE APPEARING IN THE NAME OF M /S JCM EXPORTS I.E THE APPELLANT IS ` `` ` 52,03,085/- OR NOT AND IF IT IS DIFFERENT THEN WHETHER THE DIFFERENCE CAN BE RECONC ILED OR NOT. I.T.A.NO. 1521/07 :- 7 -: 3.3.4 THE JOINT COMMISSIONER OF INCOME-TAX, TIRUPUR HIMSELF HAS VERIFIED THE ACCOUNTS OF M/S MERU IMPEX AND FOUND THAT THE APPELLANT HAS BEEN SHOWN AS THE DEBT OR OF RS. 46,64,392/- IN TILE BOOKS OF M/S MERU IMPEX. FOR THE DIFFERENCE OF RS 5,38,693/-, A RECONCILIATION STATEMENT HAS BE EN FILED BEFORE THE AO/JCIT, A COPY OF WHICH IS SUBMITTED BE FORE UNDERSIGNED ALSO. THE JCIT HAS EXAMINED THE DETAILS PRODUCED BEFORE HIM AND HAS FORWARDED HIS REPORT ON 28/03/2007. THE RELEVANT PORTION OF THE REPORT OF THE JCIT IS REPRO DUCED AS UNDER: EARLIER DURING THE REMAND PROCEEDINGS, THE AUTHOR IZED REPRESENTATIVE OF M/S MERU IMPEX PRODUCED BEFORE TH E ASSESSING OFFICER THE ACCOUNT COPIES OF THE APPELLANT AS APPE ARING IN THE BOOKS OF M/S MERU IMPEX, THE ENTRIES WHEREIN DID NO T, IN ANY WAY, TALLY WITH THE ENTRIES IN THE BOOKS OF THE APPELLAN T. IT WAS LATER EXPLAINED THAT THE ACCOUNT COPY PRODUCED WAS THE ON E EXTRACTED FROM THE TIRUPUR BRANCH OFFICE OF M/S MERU IMPEX, AND IT WAS FILED BEFORE THE ASSESSING OFFICER BY THE AUTHORIZED REPR ESENTATIVE OF M/S MERU IMPEX BY MISTAKE. ON THE OTHER HAND, ACCOR DING TO THE APPELLANT'S REPRESENTATIVE, ENTRIES RELATING TO M/S MEW IMPEX APPEARING IN THE BOOKS OF THE APPELLANT FIRM, ARE TO BE COMPARED WITH THE ENTRIES IN THE BOOKS OF ACCOUNTS OF THE HE AD OFFICE AT BOMBAY. IT IS CONTENDED ON BEHALF OF THE APPELLA NT THAT THE AGGREGATE OF THELIABILITY SHOWN IN THE BALANCE SHEE T OF THE APPELLANT FIRM BEFORE THE TRANSFER ENTRY WAS PASSED WOULD TALLY WITH THE DEBIT ENTRIES IN THE BOOKS OF M/LS MERU IM PEX, THOUGH THERE IS NO CORRESPONDING TRANSFER ENTRY IN THE BOO KS OF M/S MERU IMPEX. ADMITTEDLY, THE TRANSFER ENTRY HASNOT BEEN REFLECTE D IN THE BOOKS OF M/S MERU IMPLEX. THE APPELLANT HAS PRODUCED BOOKS OF M/S MER U IMPEX MAINTAINED AT THE HEAD OFFICE, ACCORDING TO WHICH, THERE IS A DEBIT BALANCE OF RS. 46,64,352/- IN THE ACCOUNT OF THE APPELLANT FIRM. THE APPELLANTS REPRESENTATIVE HAS FILED A RECONCIL IATION STATEMENT TO SHOW THAT THE ENTRIES IN THE BOOKS TALLY. THE M AIN PLEA OF THE APPELLANTS REPRESENTATIVE IS THAT THE LIABILITY OF THE APPELLANT TOWARDS M/S MERU IMPEX BEFORE THE TRANSFER ENTRY WA S PASSED, STILL REMAINS THE SAME AND DID NOT GET DISTURBED, WHICH S HOWS THAT THE TRANSFER ENTRY HAS NOT EFFECT. IT IS ALSO STATED T HAT THE TR4ANSFER ENTRY WAS REVERTED IN THE NEXT PREVIOUS YEAR. THE APPELLANTS REPRESENTATIVE HAS PRODUCED T HE ACCOUNT COPY OF THE APPELLANT AS APPEARING IN THE BOOKS OF M/S M ERU IMPEX(HEAD OFFICE) AND RECONCILIATION STATEMENT OF THE BALANCES OF THE APPELLANT AND M/S MERU IMPEX (HEAD OFFICE). IT IS FOUND FROM THE RECONCILIATION STATEMENT THAT SOME ENTRIES WHICH ARE NOT THERE IN THE BOOKS OF M/S MERU IMPEX ARE FOUND IN T HE BOOKS OF THE I.T.A.NO. 1521/07 :- 8 -: APPELLANT AND THERE IS DIFFERENCE IN THE OPENING BA LANCE. THESE TRANSACTIONS ARE NOT IMMEDIATELY VERIFIABLE AS THE BOOKS OF M/S MERU IMPEX HAVE BEEN PRODUCED ONLY NOW. 3.3.4.1 FROM THE PERUSAL OF THIS REPORT IT WILL B E NOTICED THAT THE A.O HAS NOT FOUND OUT ANY MAJOR IRREGULARITY IN THE RECONCILIATION STATEMENT. ON GOING THROUGH HIS REPORT AS WELL AS RECONCILIATION STATEMENT, IT IS VERY CLEAR THAT THE ENTRY OF RS. 45 LAKHS MADE UNILATERALLY IN THE APPELLANT'S BOOKS, ARE NOT GOIN G TO CHANGE LIABILITY OF THE APPELLANT TOWARDS M/S MERU IRNPEX. AS SUCH NON MAKING OF CORRESPONDING ENTRY IN THE BOOKS BY M/S M ERU IMPEX HAS NO INCOME TAX IMPLICATION REQUIRING ADDITION T O THE INCOME OF THE APPELLANT TO THAT EXTENT AS THERE IS NO INTRODU CTION OF ANY FRESH CASH OR CHEQUE OR THERE IS NO INFLATION OF ASSETS. THE ADDITION SO MADE IS THEREFORE DELETED. APPELLANT GETS RELIEF OF RS.45 LAKHS IN THIS GROUND. THEREFORE, THE REVENUE IS IN APPEAL. 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. UNDISPUTEDLY, THE REVENUES PLEAS RAISED IN THE PRE SENT CASE INVOLVES A FACTUAL ISSUE AS TO WHETHER THERE HAD BEEN ANY ATTE MPT BY THE ASSESSEE TO INTRODUCE ITS UNACCOUNTED PROFITS IN B USINESS. HOWEVER, THERE IS NO DOCUMENTARY EVIDENCE FILED BY THE REVEN UE TO CONTROVERT THE FINDINGS OF THE CIT(A). THUS, WE TAKE FACTS RE CORDED IN LOWER APPELLATE ORDER AS CORRECT. ADMITTEDLY, THE CIT (A) HAS RELIED UPON A REMAND REPORT SUBMITTED BY THE JOINT COMMISSIONER O F INCOME-TAX, TIRUPUR, AFTER EXAMINING ACCOUNTS OF M/S MERU IMPEX . THEREIN, THE ENTRIES IN QUESTION WERE DULY RECONCILED. ONLY ON THE SAID BASIS, THE CIT(A) HAS HELD THAT THIS UNILATERAL ENTRY HAS NOWH ERE CHANGED THE ASSESSEES LIABILITY TOWARDS THE OTHER ENTITY NAMEL Y M/S MERU IMPEX. I.T.A.NO. 1521/07 :- 9 -: ALSO THAT THE ASSESSEE IS STILL SHOWN TO BE OWING THE SAID AMOUNT. THE CIT(A) HAS ALSO STATED THE VERY PURPOSE OF THE IMPUGNED JOURNAL ENTRY. IN THESE CIRCUMSTANCES, WE AGREE WITH THE LO WER APPELLATE AUTHORITY THAT THIS PROCEDURAL ENTRY IN FAVOUR OF S HRI DINESH JAIN DOES NOT LEAD TO ANY FRESH CASH, CHEQUE OR INFLATION OF ASSETS BROUGHT IN THE BUSINESS. THEREFORE, WE FIND NO MERIT IN THE ARGUM ENTS OF THE REVENUE. 8. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 13 TH OF JUNE, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 13 TH JUNE, 2014 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF