BRAHM PRAKASH GUPTA, Jaipur V. ADD. CIT, BHARATPUR

ITA 189/JPR/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9475 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 19-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: RAJIV SOGANI
• Keywords: Unexplained cash credit; Rejection of books of accounts; Onus to prove
• Section: 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L. KALRA) ITA NO.189/JP/2011 ASSESSMENT YEAR : 2006-2007 SH. BRAHM PRAKASH GUPTA VS. ADDL. CIT, BHARATPU R DAUSA. RANGE, BHARATPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV SOGANI RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING: 19.12.2011 DATE OF PRONOUNCEMENT : 06.01.2012 ORDER PER SHRI N.L. KALRA, A.M. 1. THE ASSESSEE HAS FILED AN APPEAL AGAINST ORDER O F LD. CIT (A) ALWAR DATED 21.12.2010. 2. THE FIRST GROUND OF APPEAL IS AS UNDER: THE LD. AO GROSSLY & SERIOUSLY ERRED IN NOT ACCEPTI NG THE CASH CREDITS WITH IN THE TERM OF SECTION 68 OF THE ACT AMOUNTING TO RS.3,18, 000/- AS GENUINE. THE LD. C.I.T. (A) FURTHER ERRED IN CONFIRMING THE SAME IN THE FOL LOWING CASES. SH. SRI NARAYAN GUPTA RS.2,00,000/- SH. VINAY PRAKASH GUPTA RS.18,000/- SMT. PUSHP LATA GUPTA RS.1,00,000/- 3. THE ASSESSEE HAS TAKEN UNSECURED LOANS AMOUNTING TO RS.9,77,631/- FROM SEVEN PARTIES OUT OF WHICH LOANS TAKEN FROM THREE PARTIES WERE TR EATED AS UNEXPLAINED CREDITS AND HENCE, ADDED BACK IN HIS TOTAL INCOME BY THE LD. AO. DETAILS OF WHICH ARE AS UNDER. 2 SL.NO. NAME OF PARTY AMOUNT OF LOAN AMOUNT OF ADDIT ION (IN RS.) 1 SHRI NARAYAN GUPTA 2,00,000/- 2,00,000/- 2 SHRI VINAY PRAKASH GUPTA 18,000/- 18,000/- 3 SMT. PUSHPLATA GUPTA 1,14,500/- 1,00,000/- 4 SHRI TEJ PRAKASH GUPTA 13,000/- - 5 RECHESH KUMARI GUPTA 30,500/- - 6 RATAN LAL CHOUDHARY 6,00,000/- - 7 NIKHIL TRADING CO. 1,631/- - TOTAL 9,77,631/- 3,18,000/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE TH REE PERSONS NOT ACCEPTED BY THE LD. AO WERE PRODUCED BY THE ASSESSEE FOR EXAMINATION, A ND ALL OF THEM HAD CONFIRMED THE LOAN TRANSACTIONS. HOWEVER, THE LD. AO WAS NOT SATISFIED WITH THE DISCHARGE OF ONUS BY THE ASSESSEE AND HE ADDED A SUM OF RS.3,18,000/- RECEIVED FROM T HEM AS LOANS AS UNEXPLAINED CASH CREDITS U/S 68. 4. THE LD. CIT (A) HAS CONFIRMED THE ADDITION AFTER OBSERVING AS UNDER: I HAVE PERUSED THE ASSESSMENT ORDER, AS WELL AS, SU BMISSION OF THE ASSESSEE, IT IS FOUND THAT SHRI NARAYAN GUPTA IS A PENSIONER AND HE HAS ADMITTED THE LOAN ADVANCED TO THE ASSESSEE, BUT AS DISCUSSED BY THE L D. AO IN ASSESSMENT ORDER THAT THE CASH OF RS.2,00,000/- WAS DEPOSITED IN BANK ACC OUNT ON 29.7.2005 AND ISSUED THE CHEQUE TO THE ASSESSEE ON SAME DAY. HE HAS NOT CORROBORATED THE PENSION WITH THE DEPOSIT. HE HAS NOT EXPLAINED THE SOURCE OF RS. 2,00,000/- WITH REFERENCE TO HIS SOURCE OF INCOME. IN THIS CASE, THE ASSESSEE HAS PR OVED THE IDENTITY OF THE PERSON, BUT NOT CREDITWORTHINESS OF THE CASH CREDITORS AND GENUINENESS OF THE TRANSACTION. THEREFORE, ADDITION IS CONFIRMED. THE SECOND CASH CREDITOR WAS IN THE NAME OF SHRI VI NAY PRAKASH GUPTA FOR RS.18,000/-, THE ASSESSEE HAS FILED CONFIRMATION AN D PRODUCED THE VINAY PRAKASH GUPTA FOR VERIFICATION BUT THERE IS NO CORRELATION OF THE LIC RECEIPTS WITH THE LOAN ADVANCED AS DISCUSSED BY THE LD. AO., THERE WAS A G AP BETWEEN BOTH THE DATES ABOUT MORE THAN 1 YEAR. SHRI VINAY PRAKASH GUPTA WAS A STUDENT OF ENGINEERING. THERE WAS NO SOURCE OF INCOME AT THE T IME OF LOAN ADVANCED. NO SUCH SAVINGS WAS EXPLAINED IN THE NAME OF THE SHRI GUPTA. IN THIS CASE ALSO THE IDENTITY OF THE PERSON HAS BEEN ESTABLISHED BY THE ASSESSEE BUT CREDITWORTHINESS OF THE CASH CREDITOR AND GENUINENESS OF THE TRANSACTIO N HAVE NOT BEEN PROVED BY THE ASSESSEE. THEREFORE, THIS ADDITION ALSO CONFIRMED. 3 THE THIRD CASH CREDITOR WAS IN THE NAME OF SMT. PUS HPLATA GUPTA FOR RS.1,00,000/-. SHE HAS BEEN PRODUCED BEFORE THE AO WITH CONFIRMATION FOR VERIFICATION, SHE IS MOTHER OF THE ASSESSEE. SHE HA D INCOME FROM STITCHING AND EMBROIDERY WORK AS CLAIMED BY THE ASSESSEE AS A SOU RCE OF INCOME. THE LD. AO VERIFIED THE BANK ACCOUNT AT THE TIME OF THE ASSESS MENT, IT IS FOUND THAT CASH OF RS.1,00,000/- WAS DEPOSITED IN BANK ACCOUNT ON 29.7 .2005 AND SAME WAS ADVANCED THROUGH CHEQUE TO THE ASSESSEE ON 29.7.200 5. IN THIS CASE ALSO THE IDENTITY OF THE PERSON HAS BEEN ESTABLISHED BY THE ASSESSEE BUT CREDITWORTHINESS OF THE CASH CREDITOR AND GENUINENESS OF THE TRANSACTIO N HAVE NOT BEEN PROVED BY THE ASSESSEE. THEREFORE, THIS ADDITION IS ALSO CONFIRME D. 5. BEFORE US THE LD. A/R HAS SUBMITTED AS UNDER: IN ORDER TO ESTABLISH THE GENUINENESS OF CASH CREDI T U/S 68 OF THE INCOME TAX ACT, 1961, THE ASSESSEE MUST SATISFY THREE CONDITIONS VI Z. IDENTITY OF THE CREDITOR GENUINENESS OF THE TRANSACTION CREDITWORTHINESS OF THE CASH CREDITOR HERE ALL THE THREE CONDITIONS ARE SATISFIED. THE ASSESSEE PRESENTED ALL THE THREE CREDITORS BEFO RE THE LD. AO. HENCE THE IDENTITY OF THE CASH CREDITORS IS FULLY ESTABLISHED TO THE SATISFACTION OF THE LOWER AUTHORITIES. ALL THE THREE CREDITORS ACCEPTED IN TH EIR STATEMENTS RECORDED BEFORE THE LD. AO THAT THEY HAD GIVEN THE RESPECTIVE AMOUN T AS LOAN. FOLLOWING EVIDENCES WERE FURNISHED BEFORE THE LOWER AUTHORITIES TO SUBSTANTIATE THE TRANSACTIONS FROM THESE PARTIES:- (CIT (A) ORDE R PAGE NO.2-4): SL.NO. PARTY NAME PRODUCED BEFORE THE LD.AO CONFIRMATION FILED CIT (A) PAGE 3 PARA 4.2 BANK STATEMENT PRODUCED CIT(A) PAGE 3 PARA 4.2 TRANSACTION THROUGH A/C PAYEE CHEQUE. OTHER EVIDENCES 1. SHRI NARAYAN GUPTA ON 21.2.08 COPY OF PENSION A/C CERTIFICATE OF BANK 2 VINAY PRAKASH GUPTA ON 14.2.08 3 SMT. PUSHPLATA ON 21.2.08 4 GUPTA BEFORE LD. CIT (A) IT WAS SUBMITTED THAT THE ONUS W AS FULLY DISCHARGED BECAUSE THESE 3 PERSONS DULY APPEARED BEFORE THE LD. AO AND ALL THE QUESTIONS RELEVANT FOR PROVING CREDIT WORTHINESS AND GENUINENESS OF THE TR ANSACTIONS WERE PROPERLY ANSWERED AS UNDER: NAME OF LOAN PROVIDERS SHRI NARAYAN GUPTA VINAY PRAKASH GUPTA SMT. PUSHPLA TA GUPTA QUESTIONS ANSWERED PB PAGE NO. 1-3 4-5 6-7 IDENTITY AND OCCUPATION ANSWERED IN QUESTION NO. 1 1 1&2 GIVING LOAN ACCEPTED IN QUESTION NO. 4 5 4 SOURCE OF INCOME ANSWERED IN QUESTION NO. 5 5 4 THE ASSESSEE HAS FULLY DISCHARGED HIS ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LOAN PROVID ER BY PRODUCING ALL THE RELEVANT EVIDENCES AND THE PARTIES ON RECORD. SOURCE OF SOURCE NOT REQUIRED TO BE PROVED: THE LOWER AUTHORITIES IN RESPECT OF THE FOLLOWING P ERSONS WERE NOT SATISFIED INSPITE OF THEIR HAVING APPEARED AND ACCEPTED THE L OAN TRANSACTIONS. ONCE THE CREDITORS HAVE EXPLAINED THEIR EARNINGS AND HAVE CO NFIRMED THE TRANSACTIONS OF LOANS THE ONUS IS FULLY DISCHARGED BY THE ASSESSEE APPELLANT. RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: KANHAIALAL JANGID V ASSTT CIT (2008) 217 CTR (RAJ ) 354 HELD: NO ADDITION CAN BE MADE IN THE HANDS OF THE A SSESSEE ON THE GROUND THAT THE CREDITOR COULD NOT SATISFACTORILY EXPLAIN THE SOURC E OF LOAN. ALSO HELD THAT THE BURDEN OF PROOF IN SUCH CASES DOES NOT EXTEND TO PR OVE THE SOURCE OF THE CREDITOR FROM WHERE HE MADE THE ADVANCE TO THE ASSESSEE. TO MAKE ADDITION IN SUCH CASES, THE DEPARTMENT HAS TO PROVE THAT THE SOURCE OF MONE Y COMES FROM THE ASSESSEE HIMSELF. ARAVALI TRADING CO V ITO (2008) 220 CTR (RAJ) 622 HEAD NOTES: INCOME-CASH CREDIT-BURDEN OF PROOF- ONC E THE EXISTENCE OF THE CREDITOR IS PROVED AND SUCH PERSONS OWN THE CREDITS WHICH ARE FOUND IN THE BOOKS OF THE ASSESSEE, THE ASSESSEES ONUS STANDS DISCHAR GED AND THE LATTER IS NOT FURTHER 5 REQUIRED TO PROVE THE SOURCE FROM WHICH THE CREDITO RS COULD HAVE ACQUIRED THE MONEY DEPOSITED WITH HIM. LABH CHAND BOHRA V ITO (2010) 189 TAXMAN 141 (RAJ ) SEC.68: IDENTITY AND GENUINENESS OF CASH CREDITOR P ROVED- NO NEED TO PROVE THE CAPACITY OF CASH CREDITOR- SOURCE OF SOURCE NOT TO BE ENQUIRED. ACIT, JAIPUR V M/S RAJASTHAN ASBESTORS CEMENT CO., JAIPUR (ITA NO.940/JP/2008) NOW TRIBUNAL HAS UPHELD THE DECISION OF CIT (A) AFT ER HOLDING THAT ONCE THE EXISTENCE OF THE CREDITOR IS PROVED AND CREDITORS H AVE CONFIRMED THE ADVANCEMENT OF LOANS, ONUS OF THE ASSESSEE STANDS DISCHARGED AN D THAT IT IS NOT THE DUTY OF THE ASSESSEE TO PROVE THE SOURCE FROM WHICH THE CREDITO RS HAVE ADVANCED THE LOANS. OUR CASE IS SQUARELY COVERED BY THE ABOVE NOTED CAS ES OF THE HONBLE JURISDICTIONAL HIGH COURT AND HONBLE ITAT JAIPUR B ENCH, JAIPUR. THE LD. CIT (A) HAD ERRED IN NOT FOLLOWING THE ABOVE JUDGMENTS. LOANS TAKEN FROM FOUR PARTIES, OUT OF SEVEN, HAVE B EEN ACCEPTED AS GENUINE BY THE LOWER AUTHORITIES. THE PREPONDERANCE OF PROBABILITY IS IN FAVOUR OF ASSESSEE. RELIANCE IS PLACED ON THE JUDGEMENT OF HONBLE HIGH COURT RAJASTHAN IN THE CASE OF CIT VS. BHAWANI OIL MILLS (P) LTD. 2011 49 DTR ( RAJ) 212. THE FURTHER SPECIFIC SUBMISSIONS IN RESPECT OF EACH OF THE THREE CREDITORS ARE AS UNDER: SHRI NARAYAN GUPTA THE AMOUNT OF RS.2,00,000/- WAS PROVIDED FROM HIS P ENSION INCOME WHICH HE WITHDREW FROM HIS PENSION A/C AND DEPOSITED THE SAM E IN BANK. THE LD. CIT (A) HAD ERRED IN OBSERVING THAT LENDER HAS NOT CORROBORATED HIS PENSION INCOME WITH HIS DEPOSITS. IN HIS STATEMENT RECORDED, IN REPLY OF QUESTION NO. 1 HE HAD STATED THAT HE WAS A PENSIONER SINCE 1982. THE LOAN WAS PROVIDED FROM TH E SAVINGS OF HIS PENSION INCOME. HE HELD THE ACCOUNT IN UCO BANK, BASWA WHER EAS HE WAS A RESIDENT OF DAUSAA. REGULAR OPERATION OF ACCOUNT WAS NOT POSSIB LE FOR HIM AS HE WAS AN OLD MAN AND FREQUENT TRAVELLING WAS NOT POSSIBLE. THUS, WHENEVER HE VISITED BASWA, HE USED TO WITHDRAW CASH FROM HIS ACCOUNT. VINAY PRAKASH GUPTA HE WAS A STUDENT OF ENGINEERING. HE HAD PROVIDED LO AN TO THE ASSESSEE FROM HIS LIC RECEIPTS. THE LD. CIT (A) WAS OF THE VIEW THAT HE WAS A STUDENT AND HAD NO SOURCE OF INCOME AT THAT TIME AND THERE WAS NO CORR ELATION IN THE LIC RECEIPTS AND LOAN ADVANCED. 6 IN HIS STATEMENT RECORDED, IN REPLY OF QUESTION NO. 8 HE HAD STATED THAT THE LIC RECEIPTS WERE WITHDRAWN BY HIM IN ORDER TO PAY FOR HIS COMPUTER COACHING FEE. BUT, LATER ON HE DIDNT ENROLLED HIMSELF FOR SUCH C OACHING CLASSES. AS A RESULT, THE CASH WITHDRAWN BY HIM WAS HELD IN HIS HAND AND THE SAME CASH WAS PROVIDED BY HIM TO THE ASSESSEE. SMT. PUSHPLATA GUPTA THE AMOUNT OF RS.1,00,000/- WAS PROVIDED FROM THE S TITCHING AND EMBROIDERY INCOME OF THE LOAN PROVIDER. THE LD. CIT (A) HAD NO T ACCEPTED THE SAME AS SHE DEPOSITED CASH ON 29.7.2005 AND ON THE SAME DAY SHE ISSUED CHEQUE IN FAVOUR OF ASSESSE. IN HER STATEMENT RECORDED, IN REPLY OF QUE STION NO.2 SHE HAD STATED THAT SHE WAS PERFORMING STITCHING AND EMBROIDERY WORK FR OM LAST 15-20 YEARS. SHE IS A LADY OF LIMITED NEEDS AND ALL THE INCOME EARNED BY HER WAS SAVED WHICH WAS GIVEN AS LOAN TO HER SON (ASSESSEE). DEPOSIT OF CASH IN BANK ACCOUNTS DEPOSIT OF CASH MAY NOT BE VIEWED ADVERSELY AS IN R URAL AREAS BANKING HABITS ARE LACKING AND PEOPLE AS A PRACTICE FEEL MORE COMFORTA BLE WITH CASH HOLDINGS. REPAYMENT IT IS ALSO SUBMITTED THAT THE ABOVE LOANS WERE DU LY REPAID AS FOLLOWS: NAME DATE OF REPAYMENT MODE OF PAYMENT BANK AMOUNT SHRI NARAYAN GUPTA 19.4.2008 25.4.2008 CHEQUE NO.1986 CHEQUE NO.1987 UCO 80,000/- 1,20,000/- VINAY PRAKASH GUPTA CASH 18,000/- SMT. PUSHPLATA GUPTA 15.4.2008 CHEQUE NO1985 UCO 1,00,000/- IN VIEW OF THE ABOVE THE ADDITION CONFIRMED BY THE LD. CIT (A) AMOUNTING TO RS.3,18,000/- MAY PLEASE BE DELETED. 6. ON THE OTHER HAND, THE LD. D/R RELIED ON THE ORD ER OF LD.CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES. IN THE INSTANT C ASE, THE ASSESSEE HAS BEEN ABLE TO ESTABLISH THAT THE AMOUNTS HAVE BEEN REPAID. THE CREDITORS HA VE ADMITTED TO HAVE RECEIVED THE AMOUNTS. THE PAPER BOOK CONTAINS THE COPY OF AFFIDAVIT OF AS SESSEE. THE ASSESSEE WAS AGED 25 YEARS ON 13.02.2010. THE ASSESSMENT YEAR INVOLVED BEFORE US IS 2006-07. HENCE AT THE BEGINNING OF 7 PREVIOUS YEARS THE ASSESSEE WAS OF 20 YEARS OF AGE AND THE BUSINESS OF ASSESSEE COMMENCED FOR THE FIRST TIME DURING THE YEAR. SECTION 68 REFERS T O THE WORD MAY AND IT MEANS THAT A.O. IS HAVING DISCRETION. IN THE INSTANT CASE CREDITS ARE IN THE NAME OF THE RELATIVES OF THEASSESSEE. IF SUCH CREDITS WERE TO BE TREATED AS UNEXPLAINED THEN THES E SHOULD HAVE BEEN ADDED IN THE HANDS OF CREDITOR. LOOKING TO THE FACTS AS DISCUSSED ABOVE, WE FEEL THAT LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS.3,18,000/- AND SUCH ADDIT ION IS DELETED. 8. THE SECOND GROUND OF APPEAL IS AS UNDER: LD. AO IS NOT JUSTIFIED IN ADDING RS.215000/- TO TH E TOTAL INCOME BY HOLDING THAT THE SOURCE OF CAPITAL INTRODUCED IN HIS BUSINESS NO T PROVED (PARA 4 OF THE ASSTT. ORDER) THE LD. CIT (A) FURTHER ERRED IN CONFIRMING THE SAME. 9. THIS ISSUE HAS BEEN DISCUSSED BY LD. CIT (A) IN HIS ORDER AS UNDER: THE LD. AO OBSERVED THAT TOTAL FRESH CAPITAL OF RS. 216830/- WAS INTRODUCED BY THE ASSESSEE. THE AO ASKED TO EXPLAIN THE SOURCE OF THE CAPITAL INTRODUCED AT THE TIME OF ASSESSMENT. THE AO HAS FOUND EXPLAINED SOURCE OF CAPITAL FOR RS.1830/- BUT NOT RS.215000/- WAS DEPOSITED IN THE BANK ACCOUNT ON 29 .7.2005 AS PAST SAVING. THIS SAVING WAS CLAIMED BY THE ASSESSEE FROM THE TUITION FEE INCOME BUT NO COGENT EVIDENCE WERE SUBMITTED BEFORE THE AO. THEREFORE, H E TREATED THE CAPITAL INTRODUCED RS.215000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. THE LD. A.R. OF THE ASSESSEE CONTENDED THAT IT IS S TATED THAT THE AMOUNT INTRODUCED AS CAPITAL ACCOUNT IS HIS PAST SAVING. THE ASSESSEE IS M.COM. AND DULY QUALIFIED IN COMPUTER MANAGEMENT. HE HAS BEEN RUNNING TUITION CLASSES FOR COMPUTER TRAINING AT DAUSA. CERTIFICATE OF QUALIFICATION ARE AT ANNEXURE K AND K1. IT WAS OUT OF THIS INCOME THAT HE ACCUMULATED FUNDS. N ECESSARY EXPLANATION WAS GIVEN BUT THE LD. AO NEITHER MADE ANY ENQUIRY NOR G AVE ME ANY FURTHER OPPORTUNITY TO PROVE THIS SOURCE. AN AFFIDAVIT IS F ILED IN SUPPORT WITH IN THE TERMS OF RULE 46(A) OF IT RULES, 1962. THIS MATTER WAS RE MANDED BACK TO THE AO. THE LD. AO HAS SUBMITTED HIS REPORT ON 27.10.2010. THE COPY OF THE REMAND REPORT WAS GIVEN TO THE ASSESSEE ON 02.11.2010. THE ASSESS EE HAS ALSO SUBMITTED HIS REPLY ON REMAND REPORT ON 24.11.2010. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SUBMIS SIONS OF THE ASSESSEE AND REMAND REPORT OF THE AO, ON VERIFICATION OF THE REC ORD, IT IS FOUND THAT ASSESSEE WAS STUDYING UPTO 2005 IN B.COM. (WHEREAS ASSESSEE CLAIMED M.COM. IN HIS REPLY). THE EVIDENCE SUBMITTED BY THE ASSESSEE SHOW S THAT HE HAS PARTICIPATED IN COMPUTER COURSE IN FEB, 2002 AND MAY, 2004. AS ASSE SSEE HAS STARTED HIS 8 BUSINESS IN THE YEAR 2005-2006 AND CLAIMED PAST SAV INGS OF THE TUITION HAS NO BASE BECAUSE AS SUCH NO EVIDENCE ARE AVAILABLE WITH THE ASSESSEE FOR TUITION AND ALSO HE WAS BUSY IN HIS OWN STUDIES. THE ASSESSEE H AS NOT PROVED THE SOURCE OF THE CAPITAL INTRODUCED WITH EVIDENCE BEFORE THE AO AS W ELL AS BEFORE ME, THEREFORE, I AM INCLINED TO CONFIRM THE ADDITION OF RS.2,15,000/ - 10. BEFORE US THE LD. A/R HAS SUBMITTED AS UNDER: THE LD. A.O. SERIOUSLY & GROSSLY ERRED IN MAKING AN ADDITION OF RS.5,70,819/- IN THE TOTAL INCOME ON ACCOUNT OF DIFFERENCE OF GROSS PROFIT AFTER INVOKING SECTION 145(3) OF THE ACT. THE LD. CIT (A) FURTHER ERRED IN CONFIRMING THE SAME. 11. THE LD. D/R HAS RELIED ON THE ORDER OF LD. CIT (A) 12. WE HAVE HEARD BOTH THE PARTIES. THE LD. CIT (A) NOTICED THAT THE ASSESSEE WAS STUDYING IN B.COM. UPTO 2005. NO DOCUMENTARY EVIDENCE OF TUTION FILED. THE A.O. HAS MENTIONED IN HIS REMAND REPORT AS UNDER: YEAR 2001 STUDYING IN 12 TH YEAR 2002 AGAIN IN 12 TH YEAR 2003 B.COM PART I YEAR 2004 B.COM PART II YEAR 2005 B.COM FINAL 13. THE ASSESSEE ALSO STARTED LEARNING COMPUTER AND DID SOME COURSE DURING THE PERIOD 2002 TO 2005. NO DOCUMENTS FILED IN RESPECT OF RECEIPT F ROM TUTION. HENCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE. THE ASSESSEE HAS ADMITTED THAT FUNDS BELONG TO HIM AND HENCE THE SAME IS TO BE ADDED. HOWEVER SOME CREDIT IS TO BE GIVEN FOR TH E SAVINGS AVAILABLE WITH ASSESSEE. WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO CONFIRM ADDI TION OF RS.1.5 LAKH. 14. THE THIRD GROUND OF APPEAL IS AS UNDER: THE ASSESSEE IS DULY QUALIFIED IN COMPUTER MANAGEME NT. HE HAD JOINED COMPUTER COURSE IN FEBRUARY, 2002 AND MAY, 2004. CERTIFICATE S OF QUALIFICATION WERE 9 SUBMITTED (CIT ORDER PAGE NO.5) (PB PAGE NO.8-9). I T SHOWS THAT ASSESSEE WAS COMPETENT ENOUGH TO TAKE TUITIONS. THE ASSESSEE WAS RUNNING COMPUTER TRAINING CLASSES AS A PART TIME JOB AND HE DEVOTED HIS REMAINING TIME TO HIS STUDIES ONLY. AS THE ASSESSEE WAS TUTOR IN A SMALL COMPUTER TRAINING INSTITUTE LOCATED IN THE VI LLAGE DAUSA, HENCE, IT WAS NOT POSSIBLE FOR HIM TO MAINTAIN ANY DOCUMENTARY EVIDEN CE OF HIS INCOME. COMPUTER COMPETENCE AND EARNING TUITION INCOME ARE NOT DOUBTED BY THE LOWER AUTHORITIES AND ALSO THE ABOVE CIRCUMSTANTIAL EVIDE NCES ARE SUFFICIENT ENOUGH TO PROVE THE SOURCE OF HIS INCOME. THE ASSESSEE HAD ACCUMULATED HIS INCOME FOR SETTING UP HIS NEW BUSINESS. THE LD. CIT (A) HAS ERRED IN NOT APPRECIATING THAT OUR SOCI AL SYSTEM IS SAVINGS ORIENTED. EVERY INDIVIDUAL IN OUR COUNTRY PLANS HIS EXPENSES IN A MANNER THAT LEAVES ENOUGH SAVINGS WITH HIM AT THE END OF THE DAY. 15. THIS ISSUE HAS BEEN CONSIDERED BY LD. CIT (A) I N HIS ORDER AS UNDER: THE LD. AO OBSERVED THAT THE ASSESSEE SUBMITTED THE DETAILS OF ACCOUNT OF VALUE, CONSUMPTION OF OUTWARD, GROSS PROFIT, PROFIT RATE A ND VALUE OF THE CLOSING STOCK AT THE TIME OF THE ASSESSMENT AS UNDER: VALUE CONSUMPTION GROSS PROFIT G.P.% VALUE CLOSING STOCK RS.12380405.21 RS.11528059.18 RS.852346.03 6.88% RS .414798.47 HOWEVER, THE PROFIT AND LOSS ACCOUNT ATTACHED WITH THE RETURN SHOWS THAT THE POSITION, AS UNDER: VALUE CONSUMPTION GROSS PROFIT G.P.% VALUE CLOSING STOCK RS.12380579.31 RS.12513850.05 RS.281527.73 2.27% RS .414798.47 THE ASSESSEE HAS SHOWN LESS GROSS PROFIT BY RS.5708 19/- IN RETURN. THE LD. AO HAS GIVEN OPPORTUNITY TO THE ASSESSEE AT THE TIME OF AS SESSMENT. THE ASSESSEE REPLY WAS CONSIDERED AT PAGE 7 & 8 OF THE ASSESSMENT ORDE R AND FINALLY HE REJECTED THE BOOKS U/S 145(3) OF THE IT ACT, 1961 AND MADE ADDIT ION OF RS.570819/- ON ACCOUNT OF DIFFERENCES OF GROSS PROFIT. THE LD. A.R. OF THE ASSESSEE FILED REPLY BEFORE M E, IT IS REPRODUCED AS UNDER: THIS ADDITION HAD BEEN MADE BY LD. A.O. IN SUMMARY MANNER WITHOUT FOLLOWING FULL FACTS OF THE CASE. AS PER COPY OF AGREEMENT FI LED BETWEEN THE COMPANY AND THE ASSESSEE CLAUSE 3 & 6 OF THE SAID AGREEMENT ANN EXURE L THERE IS NO SCOPE 10 FOR MISMANAGEMENT OF A/C. THE ACCOUNTS OF THE ASSES SEE ARE AUDITED U/S 44AB OF THE ACT AND IS FILED ALONG WITH RETURN. TRADING & P &L A/CS HAS BEEN WORKED OUT BY THE AUDITOR AS PER COPY ANNEXURE M. THIS IS FI NAL AS PER LAW & SYSTEM OF ACCOUNTANCY. ANY INFORMATION PREPARED IS NOT RELEVA NT FOR WHICH THIS ASSESSEE HAS GIVEN EXPLANATION BUT NOT APPRECIATE BY THE A.O. CO PY OF STOCK SUMMARY FILED AT ANNEXURE N HAS NOT BEEN UNDERSTOOD BY THE LD. AO. THIS IS CLARIFIED BY FILING COPY OF LEDGER A/C AS PER ANNEXURE O FOR PURCHASE S. FREE GOODS ARE SUPPLIED BY THE COMPANY FOR CUSTOMERS AS INCENTIVE. SUCH ITE MS ARE MARKED THROUGH JOURNAL AT A, B, C, D & E TOTAL COMES TO RS.5,70,819.00. COPY OF SALES ACCOUNT IS ALSO FILED AS PER ANNEXURE P. TH E CREDIT FOR FREE ITEM IS GIVEN IN THIS SALE VOUCHER E.G. VOUCHERS ARE ANNEXURE Q & R. ALL VOUCHERS WERE PRODUCED BEFORE THE A.O. AND ARE AVAILABLE FOR YOUR KIND PERUSAL. HENCE THERE IS NO SUCH EXTRA PROFIT/STOCK OF RS.5,70,819.00. AS WO RKED OUT BY THE A.O. THIS MATTER WAS ALSO REMANDED BACK TO THE AO ALONGW ITH THE EVIDENCES FURNISHED BY THE ASSESSEE ON 8.8.2010. THE LD. AO HAS SUBMITT ED HIS REPORT ON 27.10.2010 AND A COPY OF THE REMAND REPORT WAS GIVEN TO THE AS SESSEE ON 2.11.2010. THE ASSESSEE HAS FILED REPLY AGAINST THE REMAND REPORT ON 24.11.2010. I HAVE GONE THROUGH THE ASSESSMENT ORDER, AS WELL A S, SUBMISSIONS OF THE ASSESSEE AND REMAND REPORT OF THE LD. AO, THE ASSESSEE IS A DISTRIBUTOR OF AIRCEL DIGILINK INDIA LTD. FOR HUTCH BRAND MOBILE PHONE CONNECTION AND RECHARGE COUPON. THE ASSESSEE HAS SUBMITTED COPY OF PURCHASE ACCOUNT, CO PY OF SALE BILLS, COPY OF CUSTOMER MANAGEMENT UNIT AGREEMENT BETWEEN AIRCEL D IGILINK INDIA LTD. AND CMU OWNER. IT HAS NOT BEEN SINGED BY ANY PARTY AND NOT WITNESSED. THE ASSESSEE HAS CLAIMED THAT HE IS GOVERNED BY THE CLAUSE (3) A ND (6) OF THE AGREEMENT. THE ASSESSEE ALSO ARGUED BEFORE ME ON THE BASIS OF PURC HASE ACCOUNT WHERE HE HAS DRAWN MY ATTENTION ON FOLLOWING ENTRIES: SL.NO. DATE PARTICULARS VOUCHER TYPE VOUCHER NO. DE BIT 1 31.10.2005 CR. AIRCEL CLAIM ACCOUNT JOURNAL 1 RS.103850.00 2 07.12.2005 CR. AIRCEL CLAIM ACCOUNT JOURNAL 1 RS.58968.00 3 12.01.2006 CR. AIRCEL CLAIM ACCOUNT JOURNAL 1 RS.166320.00 4 13.02.2006 CR. AIRCEL CLAIM ACCOUNT JOURNAL 1 RS.109983.00 5 20.02.2006 CR. AIRCEL CLAIM ACCOUNT JOURNAL 1 RS.131871.40 TOTAL RS.570992.40 THE LD. A.R. HAS ALSO SUBMITTED THE SALE BILLS BEFO RE ME WHICH SHOWS THAT THERE WAS A DISCOUNT IN THE SALE BILL NO.543 DATED 20.9.2 005 FOR RS.1565/- AND BILL NO.611 DATED 20.9.2005 FOR RS.576/-. HE CLAIMED THA T WHATEVER FREE COUPON WERE RECEIVED FROM THE COMPANY HAS BEEN PASSED ON TO THE RETAILER. THIS MATTER WAS 11 ALSO REMANDED BACK TO THE AO, BUT THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE BEFORE THE AO, AS WELL AS, BEFORE ME TO SU BSTANTIATE HIS CLAIM THAT THE FREE COUPON SCHEME HAS BEEN PASSED ON TO THE RETAIL ER. THEREFORE, ASSESSEE HAS NOT DISCHARGED HIS ONUS TO PROVE THE CLAIM IS GENUI NE. THEREFORE, I HAVE NO HESITATION TO CONFIRM THE ADDITION. 16. BEFORE US THE LD. A/R SUBMITTED AS UNDER : THE ASSESSEE WAS AN AUTHORIZED DISTRIBUTOR OF THE A IRCEL DIGILINK INDIA LTD. FOR HUTCH BRAND MOBILE PHONE CONNECTION AND RECHARGE CO UPONS ETC. THE ASSESSEE WAS A PART OF TELECOM INDUSTRY WHERE THE COMPETITIO N IS SO TOUGH THAT EVERY COMPANY IS FORCED TO LAUNCH DAILY NEW SCHEMES FOR T HE CUSTOMERS FOR ITS SURVIVAL IN THE MARKET. THE COMPANY USED TO OFFER A FREE OF COST SCHEME COU PONS FOR TOP UP, RECHARGE COUPONS AND ACTIVATION ETC. FOR THE BENEFIT OF THE RETAILERS AND THE SAME WAS INFORMED TO THE DISTRIBUTORS THROUGH TELEPHONIC CON VERSATION, MAIL OR SMS AND DISTRIBUTORS (ASSESSEE) HAD TO PASS ON THE BENEFIT OF THE SCHEMES TO THE RETAILERS ON THE SAME DAY AS THE SCHEME OF THE COMPANY USED T O CHANGE DAILY. AS THE DISTRIBUTOR WAS TO PASS ON THE SCHEME ON THE SAME DAY AS ANNOUNCED, HE PROVIDED THE BENEFIT TO THE RETAILERS FROM THE STOC K HE ALREADY HELD WITH HIM. HENCE, THE CLAIM WAS FIRST PASSED ON TO THE RETAILE RS AND THEN REIMBURSED BY THE COMPANY ON MONTHLY BASIS THROUGH DELIVERY CHALLANS. (PB PAGE NO.36-39) THE DIFFERENT TRADING ACCOUNTS SUBMITTED BEFORE THE LD. AO BY THE ASSESSEE ARE AS UNDER: TRADING ACCOUNT (AS PER AUDITED BALANCE SHEET) PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 12380579.31 TO PURCHASES 12513850.05 BY CLOSING STOCK 414798.47 TO GROSS PROFIT 281527.73 12795377.78 12795377.78 TRADING ACCOUNT (AS PER STOCK SUMMARY) (PB PAGE NO. 46) PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 12380405.21 TO PURCHASES 11942857.65 BY CLOSING STOCK 414798.47 TO GROSS PROFIT 852346.03 12795203.68 12795203.68 TALLY SOFTWARE: 12 THE ASSESSEE MAINTAINED HIS BOOKS OF ACCOUNTS IN A WELL KNOWN ACCOUNTING SOFTWARE TALLY. APART FROM SIMPLE ACCOUNTING, IT AL SO PROVIDES THE USER WITH FACILITIES VIZ., STOCK SUMMARY, INTEGRATED ACCOUNTI NG ETC. WHICH ENABLES THE USER TO LINK ITS INVENTORY WITH THE FINANCIAL ACCOUNTS I .E. BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. THUS, IN AN INTERGRATED ACCOUNTING ST OCK SUMMARY (INVENTORY) GETS INTERLINKED WITH FINANCIAL STATEMENTS. HENCE, AS SO ON AS AN ENTRY FOR SALE OR PURCHASE IS TO BE MADE, THE SOFTWARE WILL ASK FOR T HE STOCK ITEM, QUANTITY AND RATE TO BE ENTERED, SO THAT THE SAME COULD AFFECT THE ST OCK SUMMARY WITH THE RESPECTIVE AMOUNT AND QUANTITIES AND IF THE STOCK ITEM AND QUA NTITY ARE NOT ENTERED THEN IT WILL NOT AFFECT THE STOCK SUMMARY. THE ASSESSEE IS A RESIDENT OF VILLAGE DAUSA AND PEO PLE OF DAUSA WERE NOT FAMILIAR WITH THE TALLY SOFTWARE AT THAT TIME. AS IT WAS THE FIRST YEAR OF THE BUSINESS OF THE ASSESSEE AND HE COULD NOT UNDERSTAND THE COMPLEXITI ES OF TALLY SOFTWARE HENCE, THE ACCOUNTING MISTAKE WAS MADE BY ASSESSEE UNINTENTION ALLY. THE ABOVE DIFFERENCE IN PURCHASES WAS ONLY AN ACCOU NTING MISTAKE ON THE PART OF THE ASSESSEE. IT CAN BE EXPLAINED BY THE FOLLOWING EXAMPLE: JOURNAL ENTRIES PASSED BY THE ASSESSEE: JOURNAL ENTRY VOUCHER TYPE AMOUNT A) ENTRY FOR NORMAL PURCHASES: PURCHASES A/C DR. TO AIRCEL DIGILINK A/C QTY RATE VALUE 100 0.90 90 (PURCHASE OF 100 QTY FROM THE COMPANY) PURCHASE VOUCHER 90 90 B) ENTRY ON SALE OF GOODS ON SCHEME: CASH A/C DR. AIRCEL CLAIM A/C DR. TO SALES A/C QTY RATE VALUE 50 1 50 (SALE OF 50 QTY ON SCHEME) SALES VOUCHER 25 25 50 A) ENTRY FOR PURCHASE OF GOODS ON CLAIM: ER. TO AIRCEL CLAIM A/C (NO EFFECT ON STOCK SUMMARY AS NO QUANTITY IS MENTI ONED) (AUGUST CLAIM RECEIVED) JOURNAL VOUCHER 25 25 EFFECT OF GOODS PURCHASED ON CLAIM ON STOCK SUMMARY : INWARD QTY RATE VALUE 28 - - (QTY IS MENTIONED ON ZERO VALUE DIRECTLY IN STOCK S UMMARY BY STOCK JOURNAL) STOCK JOURNAL 13 THE EFFECT OF THE ABOVE ENTRIES ON THE STOCK SUMMAR Y AND TRADING ACCOUNT IS AS UNDER: STOCK SUMMARY PARTICULARS INWARD OUTWARD CLOSING BALANCE QTY RATE VALUE QTY RATE VALUE QTY RATE VALUE RECHARGE 100 28 0.90 - 90 - 50 - 1 - 50 - 50 78 .90 (DAFAULT VALUATION IS DONE BY TALLY. NO BASIS FOR SUCH VALUE) 45 68 TRADING ACCOUNT AS PER BOOKS PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 50 TO PURCHASES 115 BY CLOSING STOCK 68 TO GROSS PROFIT 3 120 118 TRADING ACCOUNT AS PER STOCK SUMMARY PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 50 TO PURCHASES 90 BY CLOSING STOCK 68 TO GROSS PROFIT 28 118 118 CORRECT ENTRIES TO BE PASSED AND THEIR EFFECT ON TH E BOOKS OF THE ASSESSEE ARE AS UNDER: JOURNAL ENTRY VOUCHER TYPE AMOUNT ENTRIES FOR NORMAL PURCHASES AND SALE OF GOODS WILL REMAIN SAME. A) ENTRY FOR PURCHASE OF GOODS ON CLAIM: PURCHASES A/C TO AIRCEL CLAIM A/C QTY RATE VALUE 28 .90 25 (AUGUST CLAIM RECEIVED) PURCHASE VOUCHER 25 25 WHEN ENTRY IS PASSED BY NORMAL PURCHASE VOUCHER BY 14 MENTIONING QUANTITY THEN IT WILL AUTOMATICALLY LINKED WITH THE STOCK SUMMARY. THE EFFECT OF THE ABOVE ENTRIES ON THE STOCK SUMMAR Y AND TRADING ACCOUNT IS AS UNDER: STOCK SUMMARY PARTICULARS INWARD OUTWARD CLOSING BALANCE QTY RATE VALUE QTY RATE VALUE QTY RATE VALUE RECHARGE 100 28 0.90 0.90 90 25 50 - 1 - 50 - 50 78 .90 .90 45 70 TRADING ACCOUNT AS PER BOOKS PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 50 TO PURCHASES 115 BY CLOSING STOCK 70 TO GROSS PROFIT 5 120 120 TRADING ACCOUNT AS PER STOCK SUMMARY PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 50 TO PURCHASES 115 BY CLOSING STOCK 70 TO GROSS PROFIT 5 120 120 HENCE, THE STOCK SUMMARY, VALUATION OF CLOSING STOC K AND TRADING ACCOUNT ALSO ALTERED BY THE RESULT OF CORRECT ENTRIES AND HENCE, GROSS PROFIT OF THE BUSINESS IS ALSO CHANGED. THE CORRECTED STOCK SUMMARY IS ATTACH ED ALONGWITH THE SUBMISSIONS AND CORRECTED TRADING ACCOUNT IS AS UND ER: CORRECTED TRADING ACCOUNT PARTICULARS AMOUNT PARTICULARS AMOUNT TO OPENING STOCK - BY SALES 12380579.31 TO PURCHSES 12513850.05 BY CLOSING STOCK 499268.13 TO GROSS PROFIT 365997.39 12879847.44 12879847.44 15 HERE, IT IS EVIDENT THAT THE DIFFERENCE IN G.P. IS DUE TO THE CLAIM PURCHASES BUT AT THE SAME TIME THERE IS AN ACCOUNTING MISTAKE BY THE ASSESSEE IN THE VALUATION OF CLOSING STOCK AS GIVEN IN THE NEW STOCK SUMMARY. TH E TOTAL UNDER VALUATION IS NOW ASCERTAINED BY THE ASSESSEE, WHICH COMES TO RS.84,4 70/-. IT IS EVIDENT FROM THE ABOVE TRADING ACCOUNTS THAT DIFFERENCE IN G.P. WAS DUE TO DIFFERENCE IN PURCHASES OF RS.5,70,819/-. THE DETAI LS OF THE ENTRIES OF PURCHASES PASSED THROUGH THE AIRCEL CLAIM A/C ARE AS UNDER : DATE TYPE OF VOUCHER NARRATION AMOUNT QTY. RECEIVED AS CLAIM CALCULATION OF COST 31.10.2005 JOURNAL AUGUST CLAIM (PB PAGE NO.36) 1,03,850/- (PB PAGE NO.27) 335 VOUCHERS OF RS.330 EACH 1,03,917/- 335*330 LESS (5-6)% MARGIN 7.12.2005 JOURNAL SEPTEMBER CLAIM (PB PAGE NO.37) 58968/- (PB PAGE NO.29) 312 VOUCHERS OF RS.199 EACH 12.1.2006 JOURNAL OCTOBER CLAIM (PB PAGE NO.38) 166320/- (PB PAGE NO.30) 880 VOUCHERS OF RS.199 EACH 13.2.2006 JOURNAL NOVEMBER CLAIM 109983/- (PB PAGE NO.33) 291 VOUCHERS OF RS.199 EACH 116 VOUCHERS OF RS.499 EACH 20.2.2006 JOURNAL DECEMBER CLAIM (PB PAGE NO.39) 131871/- (PB PAGE NO.33) 349 VOUCHERS OF RS.199 EACH 139 VOUCHERS OF RS.499 EACH TOTAL 570992/- IN TAX AUDIT REPORT AT PARA NO.28 THE AUDITOR HAD REPORTED: AS PER NATURE OF BUSINESS IT IS NOT POSSIBLE TO MA INTAIN THE QUANTITATIVE DETAILS OF STOCK AS STATED BY THE PROPRIETOR OF THE FIRM. THE COMMENT IN TAX AUDIT REPORT MEANING THEREBY THA T THE STOCK SUMMARY WAS INCOMPLETE HENCE, UNRELIABLE AND ALSO THEREFORE, NO T PART OF THE AUDITED FINANCIAL ACCOUNTS. WHATEVER SCHEMES ARE ANNOUNCED BY THE COMPANY THE S AME HAS TO BE PASSED ON TO THE RETAILERS. THE COMPANY ENSURED THE SAME THRO UGH THE FOLLOWING. 16 THE SCHEME OF THE COMPANY WHICH WAS INFORMED TO THE ASSESSEE OR DISTRIBUTORS WAS ALSO INFORMED TO THE RETAILERS THROUGH SMS OR M AIL. HENCE, THE RETAILERS WERE WILL INFORMED ABOUT THE SCHEMES. ONE REPRESENTATIVE OF THE COMPANY WAS APPOINTED FOR EVERY ONE/TWO DISTRIBUTOR FOR VERIFYING THAT SCHEMES WERE PROPERLY PASSED ON TO THE RETAILERS. THE WHOLE PROCESS OF RECHARGE ACTIVATION IS BASED O N CENTRALIZED TECHNOLOGY SYSTEM. AS SOON AS THE DISTRIBUTOR PROVIDES THE SCH EME TO THE RETAILER, THE COMPANY ALSO GETS INFORMED ABOUT THE SAME THROUGH A N AUTOMATIC ACTIVATION PROCESS WHICH IS RECEIVED BY THE COMPANY ON EACH AN D EVERY SUCH SCHEME PROVIDED BY THE DISTRIBUTOR, WHICH FURTHER BECOMES THE BASIS FOR PROVIDING CLAIM TO THE DISTRIBUTORS. THE RECEIPT CUM INVOICE WHICH WAS ISSUED BY THE ASS ESSEE WAS ALSO SIGNED AND SEALED BY THE RETAILERS CONFIRMING THAT THE SCHEMES WERE PASSED TO THEM. (PB PAGE NO.40-45) IN VIEW OF THE ABOVE, NO DEALER CAN WITHHOLD THE IN CENTIVE DESIGNED TO PASS ON THE RETAILERS AND HENCE, NO FURTHER PROOF IS REQUIRED. THE ASSESSEE APPELLANT RECEIVES DIFFERENT INVOICES FROM THE COMPANY AIRCEL FOR NORMAL PURCHASES (PB PAGE NO.47-54) WHEREAS CLAIM R EIMBURSEMENTS ARE DIFFERENTLY INVOICED BY AIRCEL. (PB PAGE NO.36-39). REJECTION OF BOOKS OF ACCOUNTS U/S 145(3): THE LD. AO HAD REJECTED THE BOOKS OF ACCOUNTS ON TH E BASIS OF DIFFERENCE IN GP AMOUNTING TO RS. 5,70,819/-. AS PER ABOVE SUBMISSIO NS IT IS CLEAR THAT THE FACTS AND THE FINANCIAL DATA WAS NOT PROPERLY ANALYZED BY THE LOWER AUTHORITIES AND HENCE THERE WAS NO SUCH DIFFERENCE IN GP AS STATED BY THE LD. AO. THE ACTUAL DIFFERENCE IN GP WAS OF RS.84,296/- WHICH WAS ON AC COUNT OF UNDER VALUATION OF CLOSING STOCK. BOOKS OF ACCOUNTS SHOULD NOT BE REJE CTED ON NON MAINTENANCE OF STOCK RECORDS. THE MATTER ABOVE WAS ALREADY REMANDED TO THE AO ALO NGWITH THE EVIDENCES BUT THE APPRECIATION OF FACTS AND THE ANALYSIS OF FINAN CIAL STATEMENTS WAS NOT DONE PROPERLY. THUS NO PURPOSE WILL NOW BE SERVED BY SET TING ASIDE THE CASE. THE COPY OF REMAND REPORT IS ENCLOSED. 17. WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE HA S EXPLAINED THAT ENTRIES HAVE NOT BEEN FULLY APPRECIATED BY THE A.O. WE THEREFORE FEEL THA T THIS ISSUE IS TO BE RESTORED BACK ON THE FILE OF THE A.O. THE A.O. IF THINKS FIT, CAN CALL FOR OPIN ION OF EXPORT U/S 131 OF I.T. ACT OR MAY REFER TO OPINION TO ANY CHARTERED ACCOUNTANT AND THEREAFTER MAY DECIDE THE ISSUE. 17 18. OTHER GROUNDS OF APPEAL WERE NOT PRESSED AND HE NCE DISMISSED. 19. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 06.01.201 2 SD/- SD/- (R.K.GUPTA) (N.L.KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06.01.2012 *S.KUMAR* COPY FORWARDED TO:- 1. SHRI BRAHM PRAKASH GUPTA P/O M/S. CHOUDHARY INFO COM, NEW MANDI ROAD, DAUSA. 2. ADDITIONAL C.I.T., BHARATPUR RANGE, BHARATPUR. 3. THE CIT 4. THE CIT(A), 5. THE D/R, ITAT, JAIPUR 6. THE GUARD FILE IN ITA NO.189/JP/2011 BY ORDER A.R., I.T.A.T., JAIPUR