SURENDRA KUMAR PANCHOLI, Jaipur V. ITO, Jaipur

ITA 166/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2079 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWINI D HOSMANI JT CIT DHK
• Assessee Lawyers: N K SHARDA
• Keywords: Business income; Salary income; Opportunity of being heard; Principle of natural justice; Additional evidence; Assessment record
• Section: 131; 68; 145; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 166/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 SURENDRA KUMAR PANCHOLI, B-4, VISHNU COLONY, ESI HOSPITAL, AJMER ROAD, JAIPUR, RAJASTHAN. CUKE VS. INCOME TAX OFFICER, WARD 2(3), JAIPUR, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAPPP 9118 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI N.K. SHARDA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI ASHWINI D. HOSMANI (JT.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/02/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/02/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A)-I JAIPUR DATED 20/12/2016 FOR THE A.Y . 2010-11. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ADVERT ISING AND RUNNING HIS BUSINESS IN THE NAME AND STYLE OF M/S A LFA ADVERTISING & MARKETING COMPANY. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 15/10/2010 DECLARING TOTAL INCOME OF RS. 3,25,780/- . THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER HAS PAS SED ASSESSMENT ORDER ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 2 U/S 143(3)/144 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) BY MAKING ADDITION OF RS. 28,92,456/- ON ACCOUNT OF TRADING A DDITION, RS. 42,45,117/- ON ACCOUNT OF UNSECURED LOAN U/S 68 OF THE ACT AND ADDED THE SAME TO THE TOTAL DECLARED INCOME OF THE ASSESS EE. THE LD. CIT(A) HAS GIVEN PART RELIEF TO THE ASSESSEE. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED BY NOT ACCEPTING THE FACT THAT PROPER OPPORTUNITY O F HEARING WAS NOT PROVIDED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, C IT(A) HAS ERRED BY CONFIRMING APPLICATION OF SECTION 145 AND REJECT ION OF BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, C IT(A) HAS ERRED BY CONFIRMING THE PART OF THE TRADING ADDITION AND ENHANCING THE RATE COMPARING TO PREVIOUS YEAR AMOUNTING TO RS. 6, 44,685/-. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, C IT(A) HAS ERRED BY CONFIRMING RS. 26,25,000/- UNSECURED LOAN U/S 68 OF INCOME TAX ACT IN SPITE OF SUBMITTING ALL NECESSARY EVIDEN CE IN THIS RESPECT. 5. THE ASSESSEE RESERVES THE RIGHT TO ADD, REDUCE A ND AMEND, WITHDRAWN OF ALL OR ANY GROUNDS OF APPEAL. 4. GROUNDS NO. 1 AND 2 OF THE APPEAL WERE NOT PRESSE D BY THE ASSESSEE, THEREFORE, THE SAME STANDS DISMISSED AS N OT PRESSED. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 3 5. GROUND NO. 5 OF THE APPEAL IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION, THEREFORE, SAME STANDS DI SMISSED. 6. IN THE GROUND NO. 3 OF THE APPEAL, THE ISSUE INV OLVED IS CONFIRMING THE PART OF THE TRADING ADDITION AND ENHANCING THE RATE COMPARING TO PREVIOUS YEAR AMOUNTING TO RS. 6,44,685/-. THE LD. C IT(A) HAS DEALT THE ISSUE BY HOLDING AS UNDER: 3.3.1 DETERMINATION : (I) IT IS NOTED FROM THE ASSESSMENT ORDER THAT ON T OTAL SALES OF RS. 2,13,70,110/-V THE APPELLANT HAS SHOWN GROSS PROFIT OF RS. 21,25,2457- GIVING A GP RATE OF 9.94% AGAINST GP RATE OF 23.48% DECLARED BY THE APPELLANT FOR THE IMMEDIATE PRECEDING YEAR I.E. AY 2009-10 AND AFTER REJECTION OF BOOKS OF ACCOUNT OF THE APPELLANT, THE AO HAS APPLIED GP RATE OF 23.48% TO THE TOTAL SALES OF RS. 2,13,70,11 0/- AND CONSEQUENTLY, HAS MADE TRADING ADDITION OF RS. 28,92,456/- TO THE INCOME OF THE APPELLANT. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMI TTED BY THE APPELLANT THAT THE CALCULATION OF GP RATE AT 9.94% BY THE AO IS INCORRECT AND IT HAS FURNISHED THE CALCULATION OF GP RATE AS UNDER: AY 2009-10 AY 2010-11 SALES / SERVICES 2,68,29,513/- 2,13,70,110.50 LESS: COST OF GOODS SOLD/ SERVICES (1,82,33,969) (1 ,45,67,590) LESS: DIRECT EXPENSES (22,94,662) (16,77,275) GROSS PROFIT 63,00,882/- 51,25,245.50 GP RATE 23.48% 23.98% IT WAS SUBMITTED BY THE APPELLANT THAT IN VIEW OF THE ABOVE CALCULATION, THE TRADING ADDITION OF RS. 28,92,456/- IS NOT JUST IFIED AS THE G.P. RATE HAS BEEN INCREASED AS COMPARED TO LAST YEAR. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 4 (III) I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. I HAVE ALS O EXAMINED THE ASSESSMENT RECORDS OF THE APPELLANT FOR THE AY 2009 - 10 AND 2010-11. IT IS NOTED THAT IN TAX AUDIT REPORT FOR THE YEAR UNDE R CONSIDERATION, THE AUDITOR HAS TAKEN THE GROSS PROFIT AT RS. 21,25,245 .50 WHILE COMPUTING THE GP RATIO WHEREAS AS PER THE ABOVE WORKING SUBMI TTED BY THE APPELLANT, WHICH IS ALSO VERIFIED FROM THE PROFIT A ND LOSS ACCOUNT OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION, THE GRO SS PROFIT WAS TO THE TUNE OF RS. 51,25,245/- AND CONSEQUENTLY, THE GP RA TE WORKED OUT TO 23.98%, WHICH IS BETTER THAN THE GP RATE DECLARED F OR THE IMMEDIATE PRECEDING YEAR BUT ON DECREASED SALES. IT APPEARS T HAT SOME TYPOGRAPHICAL ERROR WAS MADE BY THE AUDITOR WHILE C OMPUTING THE GP RATIO IN THE TAX AUDIT REPORT FOR THE YEAR UNDER CO NSIDERATION. HOWEVER, I THINK IT WOULD BE PROPER TO TAKE GP RATE AT 27% A S THE TURNOVER HAS DECREASED [ALMOST 20%) BECAUSE IT IS TRITE LAW THAT WITH INCREASE IN TURNOVER, THERE IS FALL IN GP RATE AND VICE VERSA. THEREFORE, THE TRADING ADDITION IS RESTRICTED TO RS. 6,44,685/- (57,69,930 - 51,25,245), THUS, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 7. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED AS UNDER: A. THE ASSESSEE IS A SERVICE INDUSTRY ENGAGED IN TH E BUSINESS OF ADVERTISING, WHERE THE ASSESSEE TOOK ON HIRE SPACES FOR ADVERTISEMENT ON A FIXED ANNUAL CHARGE FROM VARIOUS AGENCIES LIKE JAIPUR MUNICIPAL CORPORATION, INDIAN RAILWAY A ND SHOPPING MALLS FOR ADVERTISEMENT. ON THE OTHER SIDE, THE AVA ILABLE SPACE WAS PROVIDED TO THE VARIOUS CLIENTS ON MONTHLY RENT BASIS. IT IS USUAL PRACTICE THAT A PARTICULAR SITE REMAIN VACATE FOR FEW MONTHS AND THE ANOTHER SITE MAY OR MAY NOT ENGAGE FOR WHOL E OF THE ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 5 YEAR. IN THIS CONTEXT, IT IS NOT POSSIBLE TO CALCUL ATE THE GROSS PROFIT IN SERVICE INDUSTRY. B. ON THE OTHER SIDE, FROM THE FIGURES AVAILABLE IN THE BALANCE SHEET, IF WE CALCULATE THE GROSS PROFIT THEN IT IS ON THE HIGHER SIDE COMPARING TO THE PRECEDING YEAR I.E. 23.98% WHEREAS IN THE PRECEDING YEAR IT WAS 23.48%. THE DETAILED FIGURE I S AVAILABLE IN THE ASSESSMENT ORDER AS WELL AS IN THE ORDER OF CIT (APPEALS) AS ANNEXED IN ANNEXURE-2 AND ANNEXURE-3. C. FROM THE ABOVE CONTEXT, THE CIT (APPEAL) HAS ASS UMED IT 27% WITHOUT ANY BASIS AND WITHOUT COMMENTING ON THE FAC TS THAT HOW GROSS PROFIT CAN BE CALCULATED IN SERVICE INDUSTRIE S. D. IT IS ALSO IMPORTANT TO NOTE THAT THE ASSESSING AUTHORITY HAS ACCEPTED THE GP RATE 23.48% IN THE A.Y. 2010-11 WHI CH WAS THE GP RATE OF A.Y. 2009-10. THE MISTAKE WAS ONLY THAT DUE TO TYPOGRAPHICAL ERROR IN FORM NO. 3CD, THE GP WAS SHO WN AS 9.94% FOR A.Y. 2010-11 INSTEAD OF 23.98%. BUT THE CIT (APPEAL) HAS INCREASED THE GP RATE FROM THE GP RATE WHICH WA S TAKEN BY THE ASSESSING OFFICER AND FOR WHICH HE HAS NOT FOLL OWED THE PROCEDURE LAID DOWN IN SUB SECTION 2 OF SECTION 251 OF INCOME TAX ACT, 1961, WHERE IT IS MENTIONED THAT BEFORE EN HANCING AN ASSESSMENT THE CIT (APPEAL) HAS TO SHOWING CAUSE AG AINST SUCH ENHANCEMENT. IT IS CLEARLY EVIDENT FROM THE ORDER P ASSED BY THE LD. CIT (APPEALS) THAT NO SHOW CAUSE NOTICE WAS PRO VIDED TO THE ASSESSEE, NEITHER THE ENHANCEMENT WAS DISCUSSED BY THE ASSESSEE. THEREFORE THE ENHANCEMENT MADE BY THE LD. CIT IS UNLAWFUL AND UNJUSTIFIED. E. THERE ARE VARIOUS JUDGMENTS PASSED BY VARIOUS A UTHORITIES WHICH SUPPORT OUR CONTENTION:- (I) ROSHAN MOTORS, MUZAFFARNAGAR V CIT (ITAT) (II) CIT V SHAPOORJI PALLONJI MISTRY (1962) 44 ITR 862 (SC) ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 6 (III) LOKNATH TOLARAM V CIT (1986) 161 ITR 82 (BOM ) 8. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 9. THE BENCH HAVE HEARD BOTH THE SIDES ON THIS ISSUE . THE ASSESSING OFFICER HAS WORKED OUT THE GROSS PROFIT RATE @ 9.94% WHILE THE LD. CIT(A) HAS ACCEPTED THE ASSESSEE VERSION REGARDING T HE G.P. RATE @ 23.98%. THE LD. CIT(A) HAS NOT GIVEN ANY OPPORTUNITY TO THE A.O. TO VERIFY THE VERACITY OF THE CLAIM OF ASSESSEE. FURTH ER THE LD. CIT(A) HAS ALSO ADOPTED G.P. RATE @ 27% FOR THE REASON THAT THE RE WAS A DECREASE IN THE TURNOVER WITHOUT PROVIDING OPPORTUNITY TO THE ASSESSEE IN CONTRAVENTION OF THE PROVISIONS OF LAW. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE ISSUE IN APPE AL, WE FIND DEEM IT FIT AND JUST TO RESTORE THE ISSUE TO THE FILE OF THE LD . CIT(A) TO BE DECIDED DE NOVO AFTER PROVIDING REASONABLE AND EFFECTIVE OPPOR TUNITY OF BEING HEARD TO BOTH THE SIDES. 10. THE ISSUE INVOLVED IN GROUND NO. 4 OF THE APPEAL IS CONFIRMING RS. 26,25,000/- AS UNSECURED LOAN U/S 68 OF THE ACT. THE LD. CIT(A) HAS DEALT THIS ISSUE BY HOLDING AS UNDER: 3.4.1 DETERMINATION : (I) THE APPELLANT HAS SHOWN UNSECURED LOANS OF RS. 59,95,109/- IN ITS FINANCIAL STATEMENTS AS ON 31.03.2010 AND SINCE IT WAS NOT ABLE TO FILE CONFIRMATIONS FROM SOME OF THESE CREDITORS OF UNSEC URED LOANS DURING ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 7 ASSESSMENT PROCEEDINGS, THE AO HAS MADE ADDITION OF RS. 42,45,117/- (THE CORRECT AMOUNT SHOULD BE 43,95,387/-) U/S 68 O F THE ACT. (II) DURING THE APPELLATE PROCEEDINGS, THE APPELLAN T TILED CONFIRMATIONS FROM THESE CASH CREDITORS AS ADDITIONAL EVIDENCES B EFORE THE THEN LD. CIT(A) UNDER RULE 46A OF THE IT RULES, THE SAME WER E FORWARDED TO THE AO FOR MAKING ENQUIRIES AND TO SUBMIT ITS REMAND RE PORT AFTER VERIFYING THE IDENTITY AND CREDIT WORTHINESS OF THE CASH CRED ITORS AND THE GENUINENESS OF SUCH TRANSACTION. THE AO HAS SUBMITT ED ITS REMAND REPORTS AS REPRODUCED ABOVE IN THIS ORDER. IT IS EV IDENT FROM THE REMAND REPORT OF THE AO THAT IT WAS STATED BY THE APPELLAN T BEFORE THE AO THAT IT HAS RECEIVED FRESH LOAN OF RS. 28.85 LAC DURING THE YEAR UNDER CONSIDERATION. THE AO, AFTER MAKING ENQUIRIES, OUT OF FRESH CASH CREDITORS OF RS. 28.85 LAC, HAS ACCEPTED THE CASH C REDITORS AMOUNTING TO RS. 12.10 LAC. HOWEVER, ON A PERUSAL OF THE MATERIA L PLACED ON RECORD, IT HAS BEEN OBSERVED THAT THE APPELLANT HAS ALSO RECEI VED THE UNSECURED LOANS DURING THE YEAR UNDER CONSIDERATION AS UNDER: NAME OF THE CREDITORS AMOUNT (IN RS.) DIKSHU GUPTA 2,00,000/- HARISHANKAR MAHESHWARI 50,000/- HARPAL SINGH PALI 5,00,000/- KAMLESH AGRAWAL 1,00,000/- NEHA AGRAWAL 1,00,000/- TOTAL 9,50,000/- THE AO HAS TAKEN UNSECURED LOAN OF RS. 1 LAC WHERE AS AS PER COPY OF ACCOUNT PLACED ON RECORD, THE SAME WAS RS. 2 LAC EA CH. THUS, THE APPELLANT HAS TAKEN FRESH UNSECURED LOAN S OF RS. 38.35 LAC (28.85 + 9.50) AND NOT RS. 28.85 LAC, AS STATED BEF ORE THE AO, DURING THE YEAR UNDER CONSIDERATION. (III) IT HAS BEEN STATED EARLIER THAT NO REJOINDER WAS FILED BY THE AR IN RESPONSE TO THE REMAND REPORT DATED 08.09.2016 OF T HE AO WHICH WAS REQUIRED TO BE FILED ON OR BEFORE 19.09.2016. AGAIN , NOTICES U/S 250 OF ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 8 THE ACT WAS ISSUED TO THE APPELLANT ON 27.09.2016 A ND 06.12.2016 FIXING THE DATE OF HEARING FOR 03.10.2016 AND 19.12.2016 R ESPECTIVELY BUT NO COMPLIANCE WAS MADE. SINCE SUFFICIENT OPPORTUNITIES HAVE BEEN PROVIDED TO THE APPELLANT TO CONTROVERT THE FINDING S OF THE AO AS STATED IN THE REMAND REPORT, THE FINDINGS OF THE AO AS STA TED IN THE REMAND REPORT DATED 08.09.2016 IN RESPECT OF CASH CREDITOR S AMOUNTING TO RS. 16.75 LAC REMAINED UNCONTROVERTED. FURTHER, THE APP ELLANT HAS MISREPRESENTED BEFORE THE AO THAT IT HAS RECEIVED F RESH LOANS OF RS. 28.85 LAC DURING THE YEAR UNDER CONSIDERATION AND N OT RS. 38.35 LAC AS WORKED OUT IN THIS ORDER. FURTHER, IT IS NOTED FROM THE CONFIRMATION OF SHRI HARISHANKAR MAHESHWARI AND DIKSHU GUPTA PLACED ON RECORD THAT EVEN THEIR PAN WERE NOT STATED THEREIN. IN THE CASE OF SHRI HARPAL SINGH PALI, THE ALLEGED CONFIRMATION WAS FILED WITHOUT SI GNATURE AND PAN OF SHRI HARPAL SINGH PALI I.E. PRACTICALLY NO CONFIRMA TION WAS FILED FROM SHRI HARPAL SINGH PALI. IT IS PERTINENT TO MENTION HERE THAT THE APPELLANT HAS FILED A COPY OF THE CIVIL SUITE FILED BY SHRI HARDE EP ARORA S/O SHRI HARPAL SINGH PALI WHEREIN A SUM OF RS. 2.50 LAC WAS GIVEN AS ADVANCED TO THE APPELLANT ON 08.09.2010 I.E. THE SAID LOAN FROM SHR I HARDEEP ARORA DO NOT FALL IN THE YEAR UNDER CONSIDERATION I.E. AY 20 10-11. IN THE CASES OF MS. KAMLESH AGRAWAL AND MS. NEHA AGRAWAL, THE UNSEC URED LOAN TAKEN DURING THE YEAR WAS RS. 2 LAC AND NOT RS. 1 LAC AS STATED BY THE APPELLANT BEFORE THE AO. FURTHER, SINCE, THE APPELL ANT COULD NOT PROVE THE CASH CREDITORS STANDING IN THE NAMES OF KAMLESH AGRAWAL AND MS. NEHA AGRAWAL, THE UNSECURED LOAN IN THEIR CASES IS TAKEN AS RS. 2 LAC EACH AND NOT RS. 1 LAC EACH AS TAKEN BY THE AO. THE REFORE, IN VIEW OF THE TACTS AND CIRCUMSTANCES OF THE CASE, OUT OF FRE SH LOANS OF RS. 38.35 LAC TAKEN BY THE APPELLANT DURING THE YEAR UNDER CO NSIDERATION, THE ADDITION OF RS. 42,45,117/- MADE BY THE AO IS HEREB Y RESTRICTED TO RS. 26.25 LAC (38.25 - 12.10) IS HEREBY SUSTAINED U/S 6 8 OF THE ACT AS THE APPELLANT HAS FAILED TO PROVE THESE CASH CREDITORS. HENCE, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 11. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE L D AR HAS SUBMITTED AS UNDER: THE LD. CIT HAS SUSTAINED THE UNSECURED LOANS OF RS . 26,25,000/- U/S 68 OF INCOME TAX ACT, 1961. DETAILS OF WHICH ARE AS UNDER: - ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 9 S. NO. NAME OF PARTY AMOUNT 1. ALFA MOTORS 2,25,000/ - 2. GAYATRI SHARMA 1,50,000/ - 3. KAMLESH AGARWAL 2,00,000/ - 4. NEHA AGARWAL 2,00,000/ - 5. KOSHAL KISHORE SHARMA 9,00,000/ - 6. CHOGANI DEVI 1,50,000/ - 7. RADHEY SHYAM LADHA 50,000/ - 8. HARPAL SINGH PALI 5,00,000/ - 9. HARI SHANKAR MAHESHWARI 50,000/ - 10. DIKSHU GUPTA 2,00,000/ - TOTAL 26,25,000/ - 1. ALFA MOTORS - 2,25,000/- ALFA MOTORS HAS ADVANCED A LOAN OF RS. 2,25,000/- TO THE ASSESSEE VIDE CHEQUE NO. 151759 DATED 19.08.2009 (PG NO. 116 ). COPY OF THE BANK STATEMENT OF M/S ALFA MOTORS IS ANNEXED HEREWI TH IN ANNEXURE - 4 (PG NO. 35) WHERE IT CAN BE SEEN THAT THE LOAN GI VEN BY M/S ALFA MOTORS IS OUT OF OWN SOURCES, I.E. RECEIPT FROM VAR IOUS CUSTOMERS. ALFA MOTORS IS AN AUTHORIZED SERVICE CENTER OF MARUTI LI MITED. THE BOOKS OF ACCOUNTS OF M/S ALFA MOTORS IS DULY AUDITED WHERE T HE TOTAL TURNOVER OF ALFA MOTOR IS RS. 73,75,074/- AND TOTAL SHARE CA PITAL OF THE ALFA MOTOR IS RS. 23,86,858/- . ALFA MOTORS IS REGULARLY FILING HIS INCOME TAX RETURN SINCE LONG BACK. COPY OF THE BALANCE SHE ET OF ALFA MOTORS ON 31.03.2010, PROFIT ST LOSS ACCOUNT, COMPUTATION OF TOTAL INCOME AND INCOME TAX RETURN IS ANNEXED HEREWITH IN ANNEXU RE- 4. IN THE REMAND REPORT, THE LD. ASSESSING OFFICER HA S ISSUED NOTICE U/S 131 AND GATHERED THE DESIRED INFORMATION AND ACCEPT ED IN THE REMAND REPORT THAT THE AMOUNT HAS BEEN ADVANCED TO THE ASS ESSEE THROUGH CHEQUE. FURTHER COMMENTS OF THE AO IN REMAND REPORT ARE AS UNDER:- ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 10 AS PER COPY OF RETURN OF INCOME FOR THE A.Y. 2010 -11, THE FIRM HAS FILED IT S RETURN OF INCOME ON 19.10.2010 DECLARING INCOME OF RS. 51,010/-. IN THIS WAY, THE IDENTITY, CREDIT WORTHIN ESS AND GENUINENESS OF THE TRANSACTION HAVE BEEN NOT PROVED. SIR THE ABOVE COMMENT IS PURELY UNJUSTIFIED AND OF COURSE AGAINST THE BASIC PRINCIPLE OF THE LAW. THE PARTNER OF ALFA MOT OR SH. HEMENDRA SHARMA HIMSELF VISITED TO THE AO AND SUBMITTED THE DESIRED DETAILS INCLUDING THE PAN CARD, BANK STATEMENT, COPY OF ITR ETC. AND STILL THE COMMENT OF THE AO THAT IDENTITY IS NOT PROVED IS RE ALLY A SERIOUS MATTER WHERE YOUR INTERFERENCE IS REQUIRED. FURTHER THE AO HAS NOT MENTIONED ANY COMMENT ON THE GENUINENESS AND CREDIT WORTHINESS OF THE FIRM. THEREFORE THE COMMENT IS NOT JUSTIFIED AN D LIABLE TO BE REJECTED. FURTHER THE CIT HAS NOT EVEN TRIED TO LOOK INTO TH E DOCUMENTS SUBMITTED BY THE ALFA MOTORS AND COMMENTED THAT WHA TEVER THE ASSESSING OFFICER HAS ACCEPTED IS ALLOWED AND WHATE VER THE ASSESSING OFFICER HAS NOT ACCEPTED IS DISALLOWED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 2. GAYATRI SHARMA - 1,50,000/- THE ABOVE SUBJECTED PARTY HAS ADVANCED A LOAN OF R S. 2,50,000/ (PG NO. 116)- VIDE:- A. AMOUNT OF RS. 1,00,000/- VIDE CHEQUE NO. 358506 DATED 10.08.2009 DRAWN ON ICICI BANK, ACCOUNT NUMBER 023501517107 (PG NO. 52) ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 11 B. AMOUNT OF RS. 1,50,000/- VIDE CHEQUE NO. 434184 DATED 10.08.2009 DRAWN ON STATE BANK OF INDIA, ACCOUNT NU MBER 10002147641 (PG NO. 63) IT SEEMS FROM THE REMAND REPORT THAT THE ASSESSING OFFICER OVER SIDE BANK STATEMENT OF BANK OF INDIA FROM WHERE THE PART Y HAS ADVANCED A LOAN OF RS. 1,50,000/- TO THE ASSESSEE. ALTHOUGH THE STATEMENT OF BANK OF INDIA WAS AVAILABLE ON RECORD. THE CERTIFIE D COPY OF THE SAME IS ANNEXED HEREWITH IN ANNEXURE -5. IN THE REMAND R EPORT, THE A.O. HAS MENTIONED THAT RS. 1,50,000/- HAS NOT FOUND PLA CE IN THE BANK ACCOUNT WHICH IS NOT TRUE. THE SUBJECTED PARTY IS R EGULARLY FILING HER INCOME TAX RETURN SINCE A.Y. 2007-08 AND HAS ADVANC ED THE LOAN TO THE ASSESSEE OUT OF HER SAVINGS. IN RESPONSE TO THE NOTICE U/S 131 THE STATEMENT WAS RECORDED AND ALL DESIRED DOCUMENTS WE RE SUBMITTED BY THE PARTY WHICH IS AVAILABLE ON RECORD. FURTHER THE CIT HAS NOT EVEN TRIED TO LOOK INTO TH E DOCUMENTS SUBMITTED BY GAYATRI SHARMA AND COMMENTED THAT WHAT EVER THE ASSESSING OFFICER HAS ACCEPTED IS ALLOWED AND WHATE VER THE ASSESSING OFFICER HAS NOT ACCEPTED IS DISALLOWED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 3. KAMLESH AGARWAL - 2,00,000/- DURING THE YEAR UNDER CONSIDERATION, SUBJECTED PAR TY HAS ADVANCED A LOAN OF RS. 1,00,000.00 TO THE ASSESSEE. THE LD. CI T HAS FURTHER ADDED RS. 1,00,000/- ON THE BASIS OF ACCOUNT STATEM ENT AVAILABLE ON RECORD. THE AMOUNT WHICH IS ADDED BY LD. CIT IS ACT UALLY THE SAME CHEQUE OF RS. 1,00,000/- WHICH RETURNED BACK FIRST TIME AND THE ASSESSEE REPRESENT THE SAME IN THE BANK THEN IT WAS CLEARED. THE ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 12 ASSESSEE IN HIS BOOKS OF ACCOUNTS MADE THE TWO ENTR IES IN CREDIT SIDE AND ONE ENTRY INTO DEBIT SIDE(PG NO. 77) WHEREAS IN THE BANK STATEMENT OF SMT. KAMLESH AGARWAL, THERE IS ONLY ON E ENTRY AND OF COURSE CHEQUE RETURNED CHARGES WERE DEBITED ( PG NO . 74)AND IN THE SAME WAY IN THE BOOKS OF ASSESSEE, ONLY ONE ENTRY I S THERE (PG NO. 146). THE LD. CIT (APPEALS) ON THE BASIS OF THE BOO KS OF ACCOUNTS WHERE 2 CREDIT ENTRY OF RS. 1,00,000/- EACH IS THER E ADDED THE SAME WITHOUT VERIFYING WITH THE BANK STATEMENT OF SMT. K AMLESH AGARWAL AND THE ASSESSEE WHEREAS THE BANK STATEMENT WAS ALR EADY AVAILABLE ON THE RECORD. NOTICE U/S 131 WAS ISSUED TO SMT. KAMLESH AGARWAL WHERE STATEMENT WAS RECORDED AND ENTIRE DOCUMENTS INCLUDING CONFIRM ATION OF ACCOUNTS WAS FILED WHERE THE FIGURE IS RS. 1,00,000 /- ONLY. WE ARE ENCLOSING THE CERTIFIED COPIES OF DOCUMENTS SUBMITT ED BY SMT. KAMLESH AGARWAL AND LEDGER OF CONFIRMATION FOR YOUR KIND REFERENCE IN ANNEXURE-6. REGARDING THE ACTUAL LOAN OF RS. 1,00,000/- WHICH IS ALSO DISALLOWED BY THE ASSESSING AUTHORITY IN SPITE OF THE FACT THA T SMT. KAMLESH AGARWAL IS A REGULAR INCOME TAX ASSESSEE AND HAVING A INCOME FROM RENT AND SHE IS PARTNER IN M/S POORNIMA FIRE WORKS. WE WOULD LIKE TO DRAW YOUR KIND ATTENTION THAT IN THE QUESTION NO. 6 IN HER STATEMENT (PG NO. 67) THE ASSESSING AUTHORITY ASKED THE SOURC E OF RS. 1,00,000/- DEPOSITED IN THE BANK WHERE SHE INFORMED IN THE ANSWER THAT THERE WAS A SEARCH IN HER HOUSE WHERE THE DEPA RTMENT FOUND RS. 1,00,000/- WITH HER WHICH SHE DEPOSITED IN BANK. TH EREFORE, IT IS WELL IN THE NOTICE OF INCOME TAX DEPARTMENT AND CANNOT B E SAID THIS AMOUNT BELONGS TO THE ASSESSEE. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 13 FURTHER THE CIT HAS NOT EVEN TRIED TO LOOK INTO TH E DOCUMENTS SUBMITTED BY SMT. KAMLESH AGARWAL AND STATEMENT REC ORDED OF HER AND COMMENTED THAT WHATEVER THE ASSESSING OFFICER H AS ACCEPTED IS ALLOWED AND WHATEVER THE ASSESSING OFFICER HAS NOT ACCEPTED IS DISALLOWED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 4. NEHA AGARWAL - 2,00,000.00 DURING THE YEAR UNDER CONSIDERATION, SUBJECTED PAR TY HAS ADVANCED A LOAN OF RS. 1,00,000.00 TO THE ASSESSEE. THE LD. CI T HAS FURTHER ADDED RS. 1,00,000/- ON THE BASIS OF ACCOUNT STATEM ENT AVAILABLE ON RECORD. THE AMOUNT WHICH IS ADDED BY LD. CIT IS ACT UALLY THE SAME CHEQUE OF RS. 1,00,000/- WHICH RETURNED BACK FIRST TIME AND THE ASSESSEE REPRESENT THE SAME IN THE BANK THEN IT WAS CLEARED. THE ASSESSEE IN HIS BOOKS OF ACCOUNTS MADE THE TWO ENTR IES IN CREDIT SIDE AND ONE ENTRY INTO DEBIT SIDE (PG NO. 88)WHEREAS IN THE BANK STATEMENT OF SMT. NEHA AGARWAL, THERE IS ONLY ONE E NTRY AND OF COURSE CHEQUE RETURNED CHARGES WERE DEBITED (PG NO. 83)AND IN THE SAME WAY IN THE BOOKS OF ASSESSEE, ONLY ONE ENTRY I S THERE (PG NO. 146). THE LD. CIT (APPEALS) ON THE BASIS OF THE BOO KS OF ACCOUNTS WHERE 2 CREDIT ENTRY OF RS. 1,00,000/- EACH IS THER E ADDED THE SAME WITHOUT VERIFYING WITH THE BANK STATEMENT OF SMT. N EHA AGARWAL AND THE ASSESSEE WHEREAS THE BANK STATEMENT WAS ALREADY AVAILABLE ON THE RECORD. NOTICE U/S 131 WAS ISSUED TO SMT. NEHA AGARWAL WHE RE STATEMENT WAS RECORDED AND ENTIRE DOCUMENTS INCLUDING CONFIRM ATION OF ACCOUNTS WAS FILED WHERE THE FIGURE IS RS.1,00,000/ - ONLY. WE ARE ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 14 ENCLOSING THE CERTIFIED COPIES OF DOCUMENTS SUBMITT ED BY SMT. NEHA AGARWAL AND LEDGER OF CONFIRMATION FOR YOUR KIND RE FERENCE IN ANNEXURE-7. REGARDING THE ACTUAL LOAN OF RS. 1,00,000/- WHICH IS ALSO DISALLOWED BY THE ASSESSING AUTHORITY IN SPITE OF THE FACT THA T SMT. NEHA AGARWAL HAS MENTIONED IN THE STATEMENT RECORDER OF HER THAT SHE HAS A JOB WORK INCOME AS WELL AS SALARY INCOME FROM M/S POORN IMA FIRE WORKS AND THE ACCUMULATED CASH WAS DEPOSITED BY HER. IT SEEMS FROM THE STATEMENT RECORDED OF THAT SMT. NEHA AGARWAL AND SMT. KAMLESH AGARWAL THAT THEY ARE RELATIVE AND LIV E IN A SAME HOUSE NO. 2-A-138, SHIV SHAKTI COLONY, SHASTRI NAGAR, JAI PUR AND BOTH DEPOSITED RS. 1,00,000/- ON SAME DATED WHICH IS 21. 07.2009 WHICH IS A DATE SUBSEQUENT TO THE DATE OF SEARCH ON THEIR HO USE. IT MEANS THIS AMOUNT IS THE AMOUNT WHICH THE SEARCH PARTY HAS LEF T WITH EACH AND EVERY LADIES OF THE HOUSE AND THE SAME WAS DEPOSITE D INTO THE BANK ACCOUNT. IT IS A MATTER OF SERIOUS CONCERN THAT ONE SIDE TH E ASSESSING AUTHORITY DOES NOT BELIEVE THE CREDITWORTHINESS OF THE PERSON AND OTHER SIDE SEARCH IS OPERATING ON THE SAME PERSON. SMT. NEHA AGARWAL GAVE THE LOAN TO ALFA ADVERTISIN G & MARKETING ON DATED 29.07.2009 AND RECEIVED BACK ON 09.12.2010. I F THE ASSESSING OFFICER HAS ASSUMED THAT THE MONEY OF THE LOAN BELO NGS TO THE ASSESSEE AND ONLY DEPOSITED IN THE BANK ACCOUNT OF SMT. NEHA AGARWAL THEN ON RETURNING THE AMOUNT IT SHOULD BE A GAIN CASH WITHDRAWAL SO THAT THE ASSESSEE CAN TAKE BACK HIS A MOUNT BUT WHILE GOING THROUGH THE BANK STATEMENT IT CAN BE SEEM THE AMOUNT HAS NOT BEEN WITHDRAWN DIRECTLY OR INDIRECTLY. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 15 FURTHER THE CIT HAS NOT EVEN TRIED TO LOOK INTO TH E DOCUMENTS SUBMITTED BY SMT. NEHA AGARWAL AND STATEMENT RECORD ED OF HER AND COMMENTED THAT WHATEVER THE ASSESSING OFFICER HAS A CCEPTED IS ALLOWED AND WHATEVER THE ASSESSING OFFICER HAS NOT ACCEPTED IS DISALLOWED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 5. KOSHAL KISHORE SHARMA - 9,00,000/- KOSHAL KISHORE SHARMA ADVANCED A LOAN OF RS. 9,00, 000 TO THE ASSESSEE VIDE CHEQUE NO. 496204 (PG NO. 116). SH. K OSHAL KISHORE SHARMA IS A NRI SINCE LONG LIVING IN JAPAN SINCE MO RE THAN 30 YEARS. HE IS INDULGED IN THE BUSINESS OF IMPORT-EXPORT OF JEWELLERY. SH. KOSHAL KISHORE SHARMA VISITED THE OFFICE WHEN HE CA ME TO INDIA. THE ASSESSING OFFICER ASKED TO COME BACK WITH THE BANK STATEMENT. THE BANK STATEMENT WHICH WAS VERY OLD COULD NOT BE RECE IVED BY HIM IN DUE COURSE. THEREFORE, IT COULD NOT BE SUBMITTED TO THE ASSESSING OFFICER. HOWEVER NOW WE ARE ENCLOSING HEREWITH THE BANK STATEMENT IN ANNEXURE -8 (PG NO. 89) FROM WHERE HE ADVANCED T O THE ASSESSEE. WE ARE ENCLOSING HEREWITH THE PASSPORT IN ANNEXURE- 8 OF SH. KOSHAL KISHORE SHARMA TO PROVE THE IDENTITY OF THE SAME. H E IS A RICH PERSON AND IT IS BEYOND TO THE DOUBT ABOUT HIS CREDITWORTH INESS AND GENUINENESS. AS THE TRANSACTIONS ARE FROM CHEQUE, T HEREFORE IT SHOULD BE ALLOWED. THE JAPAN ADDRESS OF SH. KOSHAL KISHORE SHARMA IS AS UNDER:- 944-6, KASAI SHOWA, CHO, NAKAKOMA GUN YAMANASHI JNAN, JAPAN- 409-3851 IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 16 6. CHOGANI DEVI - 1,50,000/- SMT. CHOGANI DEVI GAVE A LOAN OF RS. 1,50,000/- TO THE ASSESSEE BY CHEQUE WHICH CLEARED IN THE ASSESSEES BANK ACCOUNT ON DATED 26.06.2009 (PG NO. 140). THE ASSESSING AUTHORITY IS SUED NOTICE U/S 131 TO HER WHICH WAS NOT RETURNED BACK. SMT. CHOGAN I DEVI IS AN INCOME TAX ASSESSEE HAVING PAN: ABXPD6396E AND PROVI DED THE CONFIRMATION OF ACCOUNT WHICH ARE AVAILABLE ON THE RECORD AND AGAIN WE ARE ENCLOSING HEREWITH IN ANNEXURE - 9 (PG NO. 9 0). IT IS WORTHWHILE TO MENTION THAT THE ASSESSEE BORR OWED MOST OF THE AMOUNT THROUGH FINANCE BROKER AND THIS AMOUNT WAS A LSO BORROWED THROUGH FINANCE BROKER, SH. DEEPAK BHALA TO WHOM TH E ASSESSEE HAD PAID BROKERAGE. THE BROKERAGE ACCOUNT OF SH. DEEPAK BHALA IS ENCLOSED HEREWITH IN ANNEXURE-10 (PG NO. 91). AS TH E PARTY IS NOT IN DIRECTLY TOUCH WITH THE ASSESSEE BUT ON THE BASIS O F THE PAN, THE ASSESSING OFFICER COULD HAVE VERIFIED THE INCOME TA X RETURN OF SMT. CHOGANI DEVI WHICH WE BELIEVE THAT SHE MUST BE FILI NG REGULARLY. IN SUCH CIRCUMSTANCES, THE IDENTITY, GENUINENESS AND C REDITWORTHINESS IS NOT DOUBTFUL. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 7. RADHEY SHYAM LADHA - 50,000/- SH. RADHEY SHYAM LADHA HAS ALSO GIVEN LOAN TO THE ASSESSEE WHICH WAS CLEARED IN THE ASSESSEES BANK ACCOUNT ON 13.10 .2009 (PG NO. 151). COPY OF THE SAME IS ENCLOSED HEREWITH IN ANNE XURE-11 (PG NO. 92). THIS LOAN WAS ALSO TAKEN FROM THE FINANCE BROK ER, SH. KEDAR MAI BHALA FOR WHICH THE BROKERAGE WAS PAID. THE BROKERA GE ACCOUNT IS ENCLOSED HEREWITH IN ANNEXURE-10. SH. RADHEY SHYAM LADDHA EXPIRED ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 17 ON 06.02.2014. THE DEATH CERTIFICATE IS ENCLOSED HE REWITH IN ANNEXURE-11. THE PAN OF SH. RADHEY SHYAM LADHA IS A CZPA3304K. THE ASSESSEE IS HAVING PAN ISSUED BY INCOME TAX DEP ARTMENT AND DEATH CERTIFICATE ISSUED BY MUNICIPAL CORPORATION, JAIPUR THEREFORE THE IDENTITY OF THE PERSON CANNOT BE QUESTIONED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 8. HARPAL SINGH PALI- 5,00,000/- THE SUBJECTED PARTY ADVANCED A LOAN OF RS. 5,00,00 0 TO THE ASSESSEE VIDE CH. NO. 984225. (PG NO. 139). SH. HARPAL SINGH PALI IS AN OWNER OF A VERY OLD AND FAMOUS RESTAURANT SURYA MAHAL, M L ROAD, JAIPUR. THE ASSESSEE TOOK TOTAL 3 LOANS FROM HIS FAMILY. DE TAILS ARE AS UNDER: - NAME ADDRESS AMOUNT DATE OF LOAN TAKEN HARPAL SINGH PALI S/O LATE SH. MEHTAAB SINGH JI 21, AMAR GARDEN, MAHARANI FARM, DURGAPURA, JAIPUR 5,00,000/ - 20.07.2009 HARDEEP ARORA S/O SH. HARPAL SINGH PALI SURYAMAHAL RESTROPLEX PRIVATE LIMITED, MIRZA ISMAIL ROAD, JAIPUR 2,50,000/ - 08.09.2010 ANISHA ARORA W/O SH. HARDEEP ARORA MAHARANI FARM, DURGAPURA, JAIPUR 4,00,000/ - 17.07.2009 AS THE ASSESSEE COULD NOT PAY THE ABOVE LOAN IN TH E STIPULATED TIME DUE TO THE FINANCIAL CRISIS, THE LENDER SMT. ANISHA ARORA AND SH. HARDEEP ARORA FILED CIVIL SUIT AGAINST THE ASSESSEE AND SH. HARPAL SINGH PALIS ADVOCATE ISSUED A LEGAL NOTICE TO THE ASSESSEE. THERE WAS NO CORDIAL RELATION OF THE ASSESSEE WITH THE LENDER , THEREFORE THE CONFIRMATION OF ACCOUNTS WERE NOT SIGNED. THE DETAI LS OF SUIT/LEGAL NOTICE FILED BY THEM ARE AS UNDER:- ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 18 NAME SUI T/LEGAL NOTICE FILED DATE HARPAL SINGH PALI 12.01.2018 HARDEEP ARORA 22.03.2012 ANISHA ARORA 22.03.2012 THE COPY OF THE SUIT/LEGAL NOTICE FILED IS ENCLOSE D HEREWITH IN ANNEXURE-12 (PG NO. 93-107). THE ASSESSING OFFICER HAS ALLOWED THE LOAN OF SMT. ANISHA ARORA AND IDENTIFIED IT AS GENU INE AND PROVED. THEREFORE, ON THE SAME GROUND THE LOAN FROM SH. HAR PAL SINGH PALI SHOULD BE ALLOWED. IT IS WORTHWHILE TO MENTION THAT THE ASSESSING AUT HORITY HAS NOT ISSUED NOTICE U/S 131 TO HARPAL SINGH PALI. THEREFO RE, THE ADDITION MADE BY CIT (APPEALS) WITHOUT ANY ENQUIRY IS UNJUST IFIED AND UNLAWFUL. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 9. HARI SHANKAR MAHESHWARI- 50,000/- SH. HARI SHANKAR MAHESHWARI GAVE A LOAN OF RS. 50, 000/- TO THE ASSESSEE BY CHEQUE WHICH CLEARED IN THE ASSESSEES BANK ACCOUNT ON DATED 23.07.2009 (PG NO. 139). THE ASSESSING AUTHOR ITY DID NOT ISSUE NOTICE U/S 131 TO HIM. SH. HARI SHANKAR IS AN INCOM E TAX ASSESSEE HAVING PAN: ADRPM0182D AND PROVIDED THE CONFIRMATIO N OF ACCOUNT WHICH ARE AVAILABLE ON THE RECORD AND AGAIN WE ARE ENCLOSING HEREWITH IN ANNEXURE-13 (PG NO.108). IT IS WORTHWHILE TO MENTION THAT THE ASSESSEE BORR OWED MOST OF THE AMOUNT THROUGH FINANCE BROKER AND THIS AMOUNT WAS A LSO BORROWED THROUGH FINANCE BROKER, SH. KEDAR MAI BHALA TO WHOM THE ASSESSEE ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 19 HAD PAID BROKERAGE. THE BROKERAGE ACCOUNT OF SH. KE DAR MAI BHALA IS ENCLOSED HEREWITH IN ANNEXURE-10. AS THE PARTY IS N OT IN DIRECTLY TOUCH WITH THE ASSESSEE BUT ON THE BASIS OF THE PAN, THE ASSESSING OFFICER COULD HAVE VERIFIED THE INCOME TAX RETURN OF SH. HA RI SHANKAR MAHESHWARI WHICH WE BELIEVE THAT HE MUST BE FILING REGULARLY. IN SUCH CIRCUMSTANCES, THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS ARE NOT DOUBTFUL. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE A.O . AND CONFIRMED BY CIT (APPEALS) IS UNLAWFUL AND LIABLE TO BE QUASHED. 10. DIKSHU GUPTA- 2,00,000/- THE LD. CIT (APPEALS) ADDED RS. 2,00,000/- BORROWE D FROM DIKSHU GUPTA (PG NO. 136). HOWEVER THE SAME WAS NOT ADDED BY THE LD. ASSESSING OFFICER. THE LD. CIT (APPEALS) HAS NOT DO NE ANY ENQUIRY/INVESTIGATION IN THIS CASE. NO NOTICE U/S 1 31 WAS ISSUED BY EITHER AO OR CIT (APPEALS). WE ARE ENCLOSING HEREWI TH THE COPY OF BANK STATEMENT, COPY OF ITR WITH COMPUTATION OF TOT AL INCOME FOR THE RELEVANT YEAR OF DIKSHU GUPTA IN ANNEXURE-14 (P G NO. 109-113). IT IS VERY CLEAR FROM THE BANK STATEMENT THAT THE L ENDER HAS ITS OWN SOURCES FROM WHICH SHE FINANCED TO THE ASSESSEE. TH EREFORE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF DIKSH U GUPTA IS PROVED. THE ADDITION MADE BY LD. CIT (APPEALS) IS UNLAWFUL , UNJUSTIFIED AND AGAINST THE NATURAL JUSTICE AND LIABLE TO BE QUASHE D. 12. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 20 13. AFTER HEARING BOTH THE SIDES ON THIS ISSUE, THE BENCH FIND THAT THE LD. CIT(A) HAS SUSTAINED THE PART ADDITION MADE U/S 68 OF THE ACT TO THE TUNE OF RS. 26,25,000/-. THE LD. CIT(A) HAS ALSO ADD ED CERTAIN AMOUNTS, WHICH WERE NOT CONSIDERED BY THE ASSESSING OFFICER. F URTHER THE LD. CIT(A) HAS NOT CONSIDERED THE VARIOUS SUBMISSIONS MA DE BY THE ASSESSEE, THEREFORE, WE ARE OF THE VIEW THAT THE WHOL E ISSUE OF ADDITION SUSTAINED U/S 68 OF THE ACT AND ALSO THE ADDITIONAL ADDITIONS MADE BY THE LD. CIT(A) NEEDS A FRESH LOOK AT THE LEVEL OF THE LD . CIT(A). CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, THIS I SSUE IS ALSO RESTORED BACK TO THE FILE OF THE LD. CIT(A) TO BE DECIDED DE NOVO AFTER PROVIDING EFFECTIVE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 16/02/2018. SD/- SD/- FOT; IKY JKO HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 TH FEBRUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI SURENDRA KUMAR PANCHOLI, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 2(3), JAIPUR. ITA 166/JP/2017_ SURENDRA KR. PANCHOLI VS. ITO 21 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 166/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR