DCIT, Circle, Sriganganagar V. M/s. GRG Oil Mill, Sriganganagar

ITA 192/JODH/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1958 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 24-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRISH MEHTA
• Keywords: Bogus purchase; Income from undisclosed sources; Loose papers; Principle of natural justice; Opportunity of cross examination; Question of law; Third party statement; Accommodation entries; Competent authority; Reassessment proceedings
• Section: 143(3); 133(6); 44AB; 13; 147; 131; 148; 132; 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, JODHPUR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 192/JODH/2019 ASSESSMENT YEAR: 2012-13 DCIT VS. M/S GRG OIL MILL, CIRCLE, SRIGANGANAGAR C-371/374 AGRO FOOD PHASE-2 RIICO INDUSTRIAL AREA SRIGANGANAGAR RAJASTHAN PAN NO. ABAFS0920N CROSS OBJECTION NO. 15/JODH/2019 (ITA NO. 192/JODH/2019) ASSESSMENT YEAR: 2012-13 M/S GRG OIL MILL, VS. DCIT C-371/374 CIRCLE, SRIGANGANAGAR AGRO FOOD PHASE-2 RIICO INDUSTRIAL AREA SRIGANGANAGAR RAJASTHAN (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJENDRA JAIN, ADVOCATE DEPARTMENT BY: SHRI GIRISH MEHTA JCIT DR DATE OF HEARING : 27/11/2019 DATE OF PRONOUNCEMENT : 27/11/2019 O R D E R PER N.K. SAINI, VICE PRESIDENT : THE APPEAL BY THE DEPARTMENT AND THE CROSS OBJECTIO N BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DT. 19/03/2019 OF THE LD . CIT(A), BIKANER. 2. THE ONLY GROUND RAISED IN THE DEPARTMENTAL APPEA L READ AS UNDER: 2 ' ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,60,17,159/- TO RS. 22,89,570/- MADE U/S 68 OF THE IT ACT, 1961 ON ACCOUNT OF BOGUS SALE TO M/S KALKA UDHYOG, COMPLETELY IGNORING THE FACTS BROUGHT ON RECORD BY THE AO. ' 2.1 IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ' 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF TH E CASE THE ID CIT (A) ERRED IN UPHOLDING THE ORDER PASSED BY THE ID AO. 2. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE ID CIT (A) ERRED IN UPHOLDING THE VALIDITY OF NOTICE U/S 148 OF THE ACT. 3. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE ID C1T (A) ERRED IN UPHOLDING THE FINDING OF ID AO THAT THE SALES/PURCHASES MADE BY APP ELLANT AS BOGUS WITHOUT CONSIDERING VALID DOCUMENTARY EVIDENCE PLACED ON RECORD. 4. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE ID C1T (A) ERRED IN SUSTAINING ADDITION OF RS. 22,89,570/- BY APPLYING GROSS PROFIT RATE 8.80% ON ALLEGED BOGUS SALES/PURCHASES WHICH WAS ALREADY RECORDED IN REGULA R BOOKS OF ASSESSEE AMOUNTS TO DOUBLE ADDITION. 5. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE ID C1T (A) ERRED IN RECORDING VARIOUS FINDING AGAINST THE PRINCIPLE OF NATURAL JU STICE AND ALSO CONTRARY TO THE MATERIAL AVAILABLE ON RECORD. 6. THAT THE RESPONDENT MAY KINDLY BE PERMITTED TO RAISE ANY ADDITIONAL AND/OR ALTERNATIVE GROUND AT OR BEFORE THE HEARING OF APPEAL. 7. THE RESPONDENT PRAYS FOR JUSTICE & RELIEF. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1, 2 AND THE GROUND NOS. 5 TO 7 ARE GENERAL IN NATURE, SO THESE GROUNDS DO NOT REQUIRE ANY COMMENT ON OUR PART. 4. NOW THE ONLY CONTROVERSY AGITATED BY BOTH THE PA RTIES RELATES TO THE DELETION / SUSTENANCE OF ADDITION MADE BY THE ASSESSING OFFICE R BY CONSIDERING THE SALES AS BOGUS. 5. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THA T THE ASSESSING OFFICER ON THE BASIS OF INFORMATION AVAILABLE THAT THE ASSESSEE HAD OBTAINE D ACCOMMODATION ENTRIES FOR BOGUS PURCHASE/SALE TO THE TUNE OF RS. 2,60,17,159/- FROM ONE SHRI TRILOK GOEL (PROP OF M/S KALKA UDYOG AND M/S KALKA FLOUR MILLS, B-73, DUGGAL COLON Y, DEVLI ROAD, KHANPUR, NEW DELHI-62) AND THAT SHRI TRILOK GOEL DURING THE COURSE OF HIS ASSESSMENT PROCEEDINGS ADMITTED IN HIS STATEMENT THAT HE WAS NOT ENGAGED IN ACTUAL TRADING OF EDIBLE OIL AND FLOUR BUT WAS PROVIDING ONLY ACCOMMODATION ENTRY TO DIFFERENT PAR TIES, REOPENED THE ASSESSMENT OF THE ASSESSEE UNDER SECTION 148 OF THE INCOME TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS ACT). THE ASSESSEE OBJECTED TO THE ISSUANCE OF NOTICE UNDER S ECTION 148 OF THE ACT AND THE OBJECTION WERE DISPOSED OFF BY THE ASSESSING OFFICER VIDE ORD ER DATED. 21/07/2017. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH COPIES OF ALL PURCHASES / SALE BILLS FOR THE A.Y. 2012-13 AND COPY OF STATEMENT OF ALL BANK ACCOUNTS. IN RESPONSE THE ASS ESSEE FURNISHED THE DATEWISE DETAILS OF SALES AND PURCHASES. THE ASSESSING OFFICER THEREAFT ER ASKED THE ASSESSEE TO FURNISH THE FOLLOWING INFORMATION : 3 1. AUDIT REPORT FOR THE A.Y. 2010-11. 2. CONFIRMED COPY OF ACCOUNTS OF CREDITORS ABOVE 5 LACS. 3. COPY OF DAILY STOCK REGISTER 4. COMPARISON CHART OF CONSUMPTION FOR THE LAST 2 YEAR S MENTIONING NO. OF ELECTRICITY CONSUMED AND MONTHLY ELECTRICITY BILL. 5. COMPARISON CHART OF YIELD FOR THE LAST 3 YEARS OF M USTARD OIL, CAKE AND SHORTAGE. 6. COMPARISON CHART OF MONTH WISE PRODUCTION CHART FOR THE LAST 2 YEARS MENTIONING QUANTITY PRODUCED AND ITS VALUE. 6.1 IN RESPONSE THE ASSESSEE SUBMITTED THAT THE CAS E WAS ALREADY ASSESSED UNDER SECTION 143(3) OF THE ACT AND COPIES OF CREDITORS ABOVE RS. 5,00,000/-, STOCK REGISTER, COMPARISON CHART OF YIELD, ELECTRICITY CONSUMPTION, MONTH WISE PRODUCTION WERE ALREADY CONSIDERED BY THE LD. ACIT AND EACH AND EVERY ASPECT OF THE ACTIV ITY WAS COVERED DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. ACCORD ING TO THE ASSESSING OFFICER THE ASSESSEE HAD NOT SUBMITTED THE INFORMATION AS SOUGHT BUT JUS T POINTED OUT ABOUT THE CASE ASSESSED UNDER SECTION 143(3) OF THE ACT AND DISPOSAL OF TH E OBJECTIONS RAISED BY IT. HE THEREFORE ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSE SSMENT MAY NOT BE COMPLETED UNDER SECTION 144 OF THE ACT. HE ALSO FORWARDED THE COPY OF STATEMENT OF SHRI TRILOK GOEL RECORDED UNDER SECTION 131 OF THE ACT TO THE ASSESSEE. IN RE SPONSE THE ASSESSEE ASKED TO CROSS EXAMINE SHRI TRILOK GOEL WHO SUBMITTED THE NAME OF 30 PARTIES. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF THE ASSESSEE FOR CROSS E XAMINATION BY OBSERVING AS UNDER: 'THE PLEA OF CROSS EXAMINATION IS NOT ACCEPTABLE IN V IEW OF FOLLOWING DECISIONS:- HONBLE ALLAHABAD HC JUDGEMENT IN THE CASE OF PRERA CASTING P. LTD CITATION IN ITS DECISION REJECTED ASSESSEES ARGUMENT OF DENIAL OF OPPORTUNITY O F CROSS EXAMINATION OF WITNESS STATING THAT WHEN THE ASSESSEE COULD NOT PROVE THE IDENTITY OF THE INVESTORS WHICH IS THE PRIMARY REQUIREMENT TO BE FULFILLED, GRANTING OPPORTUNIT Y OF CROSS EXAMINATION IS LARGELY INCONSEQUENTIAL THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF RAM ESHWAR LAI MALI V/S CIT 256 ITR 536 (RAJ.) HAS HELD THAT 'THERE IS NO PROVISION FOR PERM ITTING THE CROSS EXAMINATION OF THE PERSONS WHOSE STATEMENT WERE RECORDED DURING SURVEY. THERE IS OTHER EVIDENTIARY MATERIAL ALONG WITH THE STATEMENT OF THE ENTRY PROVIDER TO PROVE THE ASSESSEE BEING INDULGED IN BENEFICIARY OF BO GUS LTCG. THERE ARE THE FOLLOWING CASE LAWS WHICH UPHELD ADDITION EVEN THOUGH CROSS-EX AMINATION WAS NOT PROVIDED. THE CASE LAWS STATED THAT OTHER MATERIAL EXISTS THAT JU STIFIED THE ADDITION AND HENCE MERELY DENYING CROSS EXAMINATION CANNOT QUASH THE ADDITION: CIT JALANDHAR - I V/S K.D. BALI [2011] 10 TAXMANI.C OM 215. RAJAT BANSAL V/S CIT [2011] 11 TAXMANN.COM 3157 - BU RDEN WAS ON ASSESSEE TO EXAMINE SAID PARTY WITH WHOM HE HAD MADE TRANSACTIONS TO PRO VE GENUINENESS THEREOF IN THE CASE OF MAHENDRA N. CHATTERJEE V/S COLLECTOR OF CENTRAL EXCISE (1977) TAX LR 1754 (CAL.) THE HON'BLE CALCUTTA HIGH COURT HELD THAT 'R IGHT TO CROSS EXAMINATION IS NOT NECESSARILY A PART OF REASONABLE OPPORTUNITY.' 4 6.2 THE ASSESSEE ALSO FURNISHED THE BILL OF TRANSPO RTERS THROUGH WHOM GOODS WERE SUPPLIED TO M/S KALKA UDYOG. THE ASSESSING OFFICER OBSERVED THAT THE LETTERS WRITTEN TO THOSE TRANSPORTERS RETURNED WITH POSTAL AUTHORITY REMARKS ' INSUFFICIENT ADDRESS'. THE ASSESSING OFFICER HELD THAT THE ASSESSEE FAILED TO PROVE THE GENUINEN ESS OF THE TRANSPORTERS. HE ALSO OBSERVED THAT THE MOBILE NUMBER ON THE BILL OF M/S DEEPAK TR ANSPORT COMPANY DID NOT BELONGS TO THEM. THE ASSESSING OFFICER ALSO OBSERVED THAT LETT ER WAS ISSUED TO M/S KALKA UDYOG UNDER SECTION 133(6) BUT NO CONFIRMATION WAS RECEIVED. TH E ASSESSING OFFICER MENTIONED IN THE ASSESSMENT ORDER THAT FROM THE ACCOUNT STATEMENT OF M/S KALKA UDYOG IN PNB ACCOUNT AND OBC ACCOUNT IT WAS NOTICED THAT THE CASH WAS DEPOSI TED IN THOSE ACCOUNTS ON REGULAR BASIS AND THEN THE AMOUNT WAS TRANSFERRED BY RTGS TO M/S GRG OIL MILLS, SRI GANGANAGAR THROUGH RTGS, HE GAVE THE DETAILS AS UNDER: SL NO. DATE CASH DEPOSIT ON THE SAME DATE (RS.) AMOUNT TRANSFERRED TO M/S GRG OIL MILL (RS.) 1 30.07.2011 35,00,000 15,00,000 2 01.08.2011 28,05,000 12,00,000 3 06.08.2011 20,00,000 15,00,000 4 08.08.2011 2300,000 15,00,000 5 10.08.2011 20,00,000 10,00,000 6 16.08.2011 39,00,000 16,00,000 7 17.08.2011 16,00,000 9,00,000 8 19.08.2011 15,00,000 15,00,000 9 26.08.2011 27,00,000 15,50,000 10 01.09.2011 16,50,000 15,00,000 11 07.09.2011 23,00,000 18,00,000 12 19.09.2011 15,00,000 16,34,432 13 22.09.2011 35,00,000 16,00,000 14 23.09.2011 26,00,000 16,00,000 15 26.09.2011 30,00,000 14,00,000 16 27.09.2011 11,00,000 2,00,000 17 01.10.2011 45,00,000 16,00,000 6.3 ON THE BASIS OF ABOVE THE ASSESSING OFFICER OBS ERVED THAT WHENVER AMOUNT WAS DEPOSITED IN CASH THE SAME WAS TRANSFERRED BY RTGS THEREFORE SHRI TRILOK GOEL GOT CASH FROM ACCOMMODATION PARTIES AND THE SAME WAS DEPOSITED BY HIM IN HIS BANK ACCOUNT AND WAS TRANSFERRED TO ACCOMMODATE PARTIES. THE ASSESSING O FFICER OBSERVED THAT IN THE ABSENCE OF SALE / PURCHASE BILLS AND CONFIRMATION OF SUNDRY CR EDITORS THE GENUINENESS OF THE SALE MADE BY THE ASSESSEE TO M/S KALKA UDYOG AND CORRESPONDIN G PURCHASES COULD NOT BE VERIFIED AND THAT THE ASSESSEE WAS INTRODUCING ITS OWN MONEY UND ER THE GUISE OF SALE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT D ISCLOSED TRUE FIGURES OF SALE AND PURCHASE OF GOODS RATHER INTRODUCED HIS OWN UNACCOUNTED MONE Y UNDER THE GUISE OF SALE WHICH WAS 5 BOGUS. HE ACCORDINGLY MADE THE ADDITION OF RS. 2,60 ,17,159/- BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: A] THAT DURING THE ORIGINAL ASSESSMENT PROCEEDING T HE ASSESSEE HAS FURNISHED DETAILS OF PURCHASE, SALES ETC BEFORE THE ID AO AND T HE ID AO AFTER DUE VERIFICATION FROM THE BOOKS OF ACCOUNTS, BILLS & VOUCHERS AND ORDER OF COMMERCIAL TAXATION DEPARTMENT ETC AND HAS FOUND THE SALES & PURCHASES MADE BY THE A SSESSEE FIRM ARE GENUINE AND THE DECLARED PROFIT RATE ALSO REASONABLE AND ACCORDINGLY THE ID AO HAS ACCEPTED TRADING RESULT AS DISCLOSED BY THE ASSESSEE. B] FURTHER IN THE CASE OF ASSESSEE FIRM A SEARCH U/ S 132A WAS CARRIED OUT ON 17/02/2011 AND AT THE TIME OF SEARCH THE AUTHORIZED OFFICER HAS NOT FOUND ANY INCRIMINATING MATERIAL TO SHOW THE ASSESSEE FIRM HA S RECEIVED ANY ACCOMMODATION ENTRY FROM ANY PARTY AND THE PURCHASE & SALES MADE BY THE ASSESSEE ARE FOUND TRUE & CORRECT AND NO ADVERSE FINDING IN THIS REGARD HAS BEEN MADE BY THE AO. C] THAT ON THE BASIS OF THIRD PARTY STATEMENT THE ID AO MADE ALLEGATION THAT THE ASSESSEE FIRM HAS OBTAINED ACCOMMODATION ENTRY IN RE SPECT OF BOGUS SALES WHICH ARE BASED ON ASSUMPTION & PRESUMPTION PARTICULARLY WHEN THERE WAS NO MATERIAL OR EVIDENCE IN THE POSSESSION OF THE AO TO ESTABLISH THAT THE SA LES MADE BY THE ASSESSEE FIRM TO RESPECTIVE PARTIES ARE BOGUS. D] THAT DURING THE ASSESSMENT PROCEEDING THE ASSESS EE FIRM HAS FURNISHED COPY OF ORDER OF VAT IN WHICH THE COMPETENT AUTHORITY HAS AC CEPTED THE VALUE OF SALES DISCLOSED BY THE ASSESSEE AND AS SUCH IN LIGHT OF DECISION OF HONBLE SUPREME COURT REPORTED IN 255 ITR AT PAGE 273 AND DECISION OF HONBLE MADRAS HIGH COURT REPORTED IN 273 ITR AT PAGE 262 THE ACTION OF THE ID AO IS APPARENTLY ILLEGAL AND ALSO CONTRARY TO THE PRINCIPLE OF ACCOUNTANCY. E] THAT THE ID AO IN THE ASSESSMENT PROCEEDING HAS NOT BROUGHT ON RECORD ANY MATERIAL OR EVIDENCE TO PROVE THAT THE ASSESSEE HAS NOT MADE ACTUAL SALES BUT HAS PROVIDED ACCOMMODATION ENTRY TO RESPECTIVE PARTY WHER EAS THE ASSESSEE HAS FURNISHED ALL THE LEGAL DOCUMENTS WHICH PROVES IDENTITY OF TH E PERSON WHO HAVE MADE PURCHASES FROM THE ASSESSEE, GENUINENESS OF THE TRANSACTION A S THE RESPECTIVE PARTIES HAS MADE PAYMENT THROUGH BANKING CHANNEL AND SALES MADE BY THE ASSESSEE SUBJECT TO C FORM ISSUED BY THE COMMERCIAL DEPARTMENT. FURTHER THE ONUS CAST ON THE ASSESSEE IS TO ESTABLISH THE IDENTITY AND GENUINENESS OF THE TRANS ACTION. THIS ONUS HAS BEEN DISCHARGED BY ASSESSEE AND SAME CAN BE REBUTTED BY ASSESSING OFFIC ER ON THE BASIS OF COGENT REASONS BUT HE HAS BEEN REBUTTED ONLY BY VAGUE FINDINGS AS DISCUSSED IN THE ORDER. F] THAT THE ID AO HAS NOT PROVIDED THE MATERIAL, DOC UMENTARY EVIDENCES AND STATEMENT ON THE BASIS OF WHICH HE HAS MADE ALLEGATION AGAINST THE ASSESSEE THAT HE HAS OBTAINED ACCOMMODATION ENTRY FROM SUCH PARTY, AS SAME WERE N OT AVAILABLE WITH HIM. FURTHER WITHOUT PROVIDING OPPORTUNITY OF CROSS EXAMINATION OF THE STATEMENT OF THE THIRD PARTY WHOSE STATEMENT WAS RECORDED BACK OF THE ASSESSEE BY OTHER AO AND AS SUCH BLINDLY RELIED ON SUCH STATEMENTS IS AGAINST THE ETHICS, MOR ALITY, AND NATURAL JUSTICE AND FOR THIS REASON THE ASSESSEE CANNOT BE FASTEN WITH A LIABILIT Y AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF UNION OF INDIA VS. T.R. VERMA REPORTED IN AIR 1957 (SC) 882 IN WHICH IT WAS HELD 'WHEN THE ASSESSING OFFICER RECORDED A STATEMENT BEHI ND THE BACK OF THE ASSESSEE, IT WAS HIS DUTY TO HAVE ALLOWED THE ASSESSEE TO CROSS EXAMI NE SUCH A WITNESS. STATEMENT OF PERSON CANNOT BE USED AGAINST THE ASSESSEE, IT WAS N OT FOR THE ASSESSEE TO DEMAND CROSS EXAMINATION BUT WAS FOR THE AO TO ALLOW CROSS EXAMIN ATION IF THE STATEMENT OF THE WITNESS WERE TO BE MADE THE BASIS OF ADDITION.' G] THAT THE ID AO DURING THE ASSESSMENT PROCEEDINGS HAS FAILED TO PROVIDE ANY DOCUMENTARY EVIDENCE OR MATERIAL TO ESTABLISHED DIRE CT NEXUS WITH THE ASSESSEE FIRM WHICH PROVES THAT THE ASSESSEE FIRM HAS MADE SALES TO SUCH PARTY ARE BOGUS AND THE OBSERVATION MADE ONLY ON THE BASIS OF ASSUMPTION & PRESUMPTION AS THERE ARE NO DIRECT OR INDIRECT DOCUMENTARY EVIDENCE WERE PLACED ON RECO RD TO JUSTIFIED THE ADDITION MADE 6 BY HIM. HON'BLE PUNJAB & HARYANA COURT IN THE CASE OF CIT VS. ANUPAM KAPOOR REPORTED IN (2008) 299 ITR 179 (P&H) IS VERY MUCH RELEVANT. THE HELD PORTION OF THIS DECISION IS EXTRACTED HEREIN BELOW 'HELD, DISMISSING THE APPEALS, THAT THERE WAS NO MATERIAL BEFORE THE ASSESSING OFFICER WHICH COULD HAVE LED TO A CON CLUSION THAT THE TRANSACTION WAS A DEVICE TO CAMOUFLAGE ACTIVITIES TO DEFRAUD THE REVE NUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE ASSESSING OFFICER MERELY ON SURMISES AN D CONJECTURES. THE TRIBUNAL TOOK INTO CONSIDERATION THAT IT WAS ONLY ON THE BASIS OF A PRE SUMPTION THAT THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD PAID CASH AND PURCHAS ED THE CHEQUE. IN THE ABSENCE OF ANY COGENT MATERIAL IN THIS REGARD, HAVING BEEN PL ACED ON RECORD, THE ASSESSING OFFICER COULD NOT HAVE REOPENED THE ASSESSMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY, EVIDENCE WHEREOF WAS WITH THE ASSESSI NG OFFICER. THEREFORE, THE ASSESSING OFFICER COULD NOT HAVE ADDED THE INCOME, WHICH WAS R IGHTLY DELETED BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL' H] THE HONBLE SUPREME COURT IN THE CASE OF COMMON C AUSE VS. UOI (SAHARA DIARIES) (SUPREME COURT) - 'S. 34 OF THE EVIDENCE A CT: ENTRIES IN LOOSE PAPERS/ SHEETS ARE IRRELEVANT AND INADMISSIBLE AS EVIDENCE. SUCH LOOSE PAPERS ARE NOT BOOKS OF ACCOUNT AND THE ENTRIES THEREIN ARE NOT SUFFICIENT TO CHARG E A PERSON WITH LIABILITY. EVEN IF BOOKS OF ACCOUNT ARE REGULARLY KEPT IN THE ORDINARY COURSE O F BUSINESS, THE ENTRIES THEREIN SHALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WIT H LIABILITY. IT IS INCUMBENT UPON THE PERSON RELYING UPON THOSE ENTRIES TO PROVE THAT THEY ARE IN ACCORDANCE WITH FACTS ENTRIES IN BOOKS OF ACCOUNT ARE NOT BY THEMSELVES SUFFICIENT TO CHARGE ANY PERSON WITH LIABILITY, THE REASON BEING THAT A MAN CANNOT BE ALLOWED TO MAKE EVIDENCE FOR HIMSELF BY WHAT HE CHOOSES TO WRITE IN HIS OWN BOOKS BEHIND THE BACK OF THE PARTIES. THERE MUST BE INDEPENDENT EVIDENCE OF THE TRANSACTION TO WHICH THE ENTRIES RELATE AND IN ABSENCE OF SUCH EVIDENCE NO RELIEF CAN BE GIVEN TO THE PARTY WHO RELIES UPON SUCH ENTRIES TO SUPPORT HIS CLAIM AGAINST ANOTHER' I] FROM THE ASSESSMENT ORDER IT IS APPEARS THAT THE W ORKING OF THE ID AO IS THAT HE SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL TH E EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S CREATIVE W ORLD TELEFILMS LTD REPORTED IN 333 ITR PAGE 100. THE RELEVANT PORTION OF THE ORDER IS 'THE ASSESSING OFFICER DID NOTHING EXCEPT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT 'NOT TRACEABLEIN OUR CONSIDERED VIEW, THE ASSESSING OFFI CER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR F ROM THEIR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAILS AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE ABOVE CIRC UMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPEAL. IN THE RESULT, THE APPEAL IS DISMISSED.' J] THAT THE ALLEGATION MADE BY ID AO THAT THE ASSESS EE HAVE RECEIVED BOGUS INVOICES WITHOUT INVOLVING ANY ACTUAL DELIVERY OF GOODS ON T HE BASIS OF THIRD PARTY AND ACCORDINGLY THE ID AO TO TREAT ASSESSEES SALES AS BOGUS. THERE IS FURTHER NO DISPUTE THAT ASSESSEES PURCHASES IN QUESTION CORRESPONDING TO THE IMPUGNED S ALES ALREADY STAND ACCEPTED. FURTHER ALSO LAW IS SETTLED THAT ORAL EVIDENCE HAVI NG NOT ENTITLED TO ANY WEIGHT WITH REFERENCE TO DOCUMENTARY EVIDENCES PLACED ON RECORD AS HELD BY HON'BLE APEX COURT IN THE CASE OF MURAKA PROPRIES V/S BIHARI LAI REPORTED IN AIR (1978)SC300, 236 CTR 466 K] THAT THE ASSESSEE HAD DISCHARGED HIS DUTY BY FUR NISHING COMPLETE DETAILS OF RESPECTIVE PARTIES WHO HAVE PURCHASED THE GOODS AND AL SO EXPLAINED THE SALES CONSIDERATION ARE RECEIVED THROUGH BANKING CHANNEL A ND THE SALES ARE SUBJECT TO VAT TAX ETC BEFORE THE ID AO. THE ID AO HAD NOT DISPROVED TH E ABOVE DOCUMENTARY EVIDENCES AT ANY STAGE OF ASSESSMENT PROCEEDING AND MAINLY REL IED ON THE STATEMENT OF THIRD PARTY WHICH HAVING NO EVIDENTIARY VALUE AS DISCUSSED ABOVE . FURTHER THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V/S RAJENDRA SONI REPO RTED IN 54 DTR 349. THE HONBLE HIGH COURT HELD AS UNDER:- THUS THE ASSESSEE HAS PROVED ITS ONUS BY PROVING THE IDENTITY OF SELLER AND IF THE POST OFFICE REGISTERY FOR CONFIRMATION BY AO HAS BEEN RETU RNED WITH NARRATION SHOP CLOSED STILL THE ASSESSEE HAS DISCHARGED IT ONUS... THAT THE LD AO HAS NOWHERE DISCLOSED AS TO FROM WHI CH RECORD OF THE ASSESSEE HE HAS 7 REACHED TO SUCH CONCLUSION THAT THE SALES MADE BY TH E ASSESSEE FICTITIOUS OR BOGUS PARTICULARLY WHEN THE ASSESSEE HAS DISCLOSED THE PURC HASES AND SALES IN THE BOOKS OF ACCOUNTS ARE SUPPORTED FROM BILLS & VOUCHERS. THE SALE S ARE REGULARLY ASSESSED TO TAX NOT ONLY INCOME TAX BUT ALSO COMMERCIAL TAXES DEPARTMEN T. IT IS SUBMITTED THAT THE ID AO HIMSELF TREATED THE PURCHASES MADE BY THE ASSESSEE AR E GENUINE THAN HOW THE SALES ARE BOGUS BECAUSE WITHOUT SUCH PURCHASES CORRESPONDING SALE S IS NOT POSSIBLE. FURTHER THE LD AO HAS ALSO HELD THAT THE PROFIT RATE DISCLOSED BY T HE ASSESSEE TO BE GENUINE. ITO V. PERMANAND (2007) 107 TTJ 395(JD)(TRIB) WHER E IT WAS HELD THAT - INCOME FROM UNDISCLOSED SOURCESADDITION UNDER S. 69ALLEGED BOG US PURCHASESAO RECEIVED INFORMATION FROM THE SALES-TAX DEPARTMENT THAT THE PU RCHASES MADE BY THE ASSESSEE FROM TWO PARTIES WERE BOGUSSOLELY RELYING ON THE SAME , AO MADE ADDITION UNDER S. 69NOT JUSTIFIEDNO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE MERELY ON THE BASIS OF OBSERVATIONS MADE BY A THIRD PARTYWHILE MAK ING THE ASSESSMENT, IT IS THE SATISFACTION OF THE AO WHICH IS OF PRIME IMPORTANCEI T CANNOT BE SUBSTITUTED BY THE SATISFACTION OF SOMEONE ELSEASSESSEE HAS DISCHARGE D THE PRIMARY ONUS CAST ON HIM BY SHOWING THE PURCHASES IN THE BOOKS OF ACCOUNTS, PAYME NT BY WAY OF ACCOUNT PAYEE CHEQUES AND PRODUCING THE VOUCHERS OF SALE OF GOODS ................................. ADDITION RIGHTLY DELETED. 2) JAGDAMBA TRADING COMPANY VS. INCOME TAX OFFICER ITAT, JODHPUR SMC BENCH - (2007) - WHERE IT WAS HELD THAT - AS REGARDS THE AVERMENT OF THE SELLER IN HIS AFFIDA VIT SUBMITTED IN SALES-TAX PROCEEDINGS THAT HE HAS NOT MADE ANY SALES DURING THE RELEVANT Y EAR, SAME CANNOT BE RELIED UPON, PARTICULARLY WHEN NO OPPORTUNITY OF CROSS-EXAMINATION WAS GIVEN TO THE ASSESSEESAID AFFIDAVIT HAVING BEEN FILED DURING THE SALES-TAX PRO CEEDINGS OF THE SELLER, IT HARDLY HAS ANY EVIDENTIARY VALUE AGAINST THE ASSESSEE IN THE INCOM E-TAX PROCEEDINGS THEREFORE, THE PURCHASES IN QUESTION CANNOT BE HELD TO BE BOGUSIMPUGNED ADDITION DELETED. 3.5 HONBLE RAJASTHAN HIGH COURT IN THE CASE OF C.I. T. BIKANER VS SHRI INDER KUMAR D.B. INCOME TAX APPEAL NO. 198/2013. THE HONBLE HIGH COURT HELD AS UNDER:- THE ITAT APPEARS JUSTIFIED IN OBSERVING THAT SHRI JESSA RAM WA S NEITHER EXAMINED IN THE PRESENCE OF THE ASSESSEE NOR WAS ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSEE AND HENCE, HIS STATEMENT COULD NOT HAVE BEEN RELIED UPON AGAINST THE ASSESSEE. THE ITAT HAS ALSO RIGHTLY OBSERVED THAT THE DEPOSITS MADE BY SHRI JESSA RAM IN HIS BANK ACCOUNT CANNOT BE TAKEN AS PROOF OF THE RECEIPT FROM THE ASSESSEE-RESPONDENT ON THAT PARTICULAR DATE. OBVIOUSLY, THE PROCEDURE AND SYSTEM OF ACCOUNTING OF A THIRD PAR TY WAS NOT A MATTER WITHIN THE CONTROL OF THE ASSESSEE-RESPONDENT; AND MERELY WITH REFERENCE TO THE ENTRIES MADE BY A THIRD PARTY, CONCLUSION COULD NOT HAVE BEEN DRAWN AG AINST THE ASSESSEE-RESPONDENT 7.1 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER OBSERVED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY CONCRETE EVIDENCE ADVERSE TO THE FACTS P OINTED OUT BY THE ASSESSEE, AND NEVER DISPUTED THE PURCHASES, STOCK STATEMENTS, YIELD OBT AINED BY THE ASSESSEE AND THE VAT RETURNS. HE FURTHER OBSERVED THAT THE ASSESSING OFF ICER SUPPLIED THE REASONS TO BELIEVE BASED ON THE INFORMATION RECEIVED FROM DIT OFFICE NEW DEL HI AND DID NOT POINT OUT ANY DEFECT OR ADVERSE COMMENTS WITH REGARD TO THE SALE RECORD AND THE DETAILS OF PURCHASE SUBMITTED BY THE ASSESSEE BUT TREATED THE SAME AS UNEXPLAINED CA SH CREDIT UNDER SECTION 68 OF THE ACT. 7.2 THE LD. CIT(A) REFERRED TO THE JUDGMENT OF HON' BLE DELHI HIGH COURT IN THE CASE OF JAGJIT PAL SINGH VS. CIT, REPORTED IN 33 DTR 19 AND IN THE CASE OF CIT VS. KUWER FIBERS (P) LTD. REPORTED AT [2017] 77 TAXMANN.COM 345 (DEL). THE LD . CIT(A) UPHELD THE REOPENING OF THE CASE UNDER SECTION 147 R.W.S 148 OF THE ACT AND OBS ERVED THAT IF THERE WERE SALES THERE OUGHT TO HAVE BEEN PURCHASES AND VICE-VERSA AND WHEN THE SALE AND PURCHASE HAD BEEN 8 ACCEPTED THERE APPEARS TO BE NO JUSTIFICATION FOR M AKING THE ADDITION FOR THE WHOLE AMOUNT. LD. CIT(A) REFERRED TO THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SHRI. SNAJAY KAILASH GUPTA VS. ITO, IN ITA NO. 7077/MUM/2016 DT. 02/07/2 018 WHEREIN IT WAS HELD THAT WHEN THE SALES WERE NOT DOUBTED 100% DISALLOWANCE FOR BOGUS PURCHASE WAS NOT DISALLOWABLE. THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO APPLY GP R ATE OF 8.8% WHICH WAS DISCLOSED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ON THE TO TAL SALES OF RS. 2,60,17,159/- AND SUSTAINED THE ADDITION OF RS. 22,89,510/-. 8. NOW THE DEPARTMENT IS IN APPEAL AGAINST THE RELI EF ALLOWED TO THE ASSESSEE AND THE ASSESSEE FILED THE CROSS OBJECTION AGAINST THE SUST ENANCE OF THE ADDITION. 9. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE MAINT AINED DAY TO DAY BOOKS OF ACCOUNT AND STOCK REGISTER. THE ENTIRE SALES & PURCHASES WERE D ULY RECORDED AND SUPPORTED WITH BILLS & VOUCHERS. IT WAS FURTHER SUBMITTED THAT THE BOOKS O F ACCOUNTS MAINTAINED BY THE ASSESSEE WERE SUBJECT TO THE AUDIT UNDER SECTION 44AB OF THE ACT, AND THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. IN RESPONSE TO THE STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER THE ASSESSEE FURNISHED ALL THE DOCUMENTARY EVIDENCES, P RODUCED THE BOOKS OF ACCOUNT, BILLS & VOUCHERS BEFORE THE ASSESSING OFFICER WHO PASSED TH E ASSESSMENT ORDER DATED. 20/01/2015 UNDER SECTION 143(3) OF THE ACT BY MAKING AN ADDITI ON OF RS. 8,96,814/-. THE REFERENCE WAS MADE TO PAGE NO. 34 TO 39 OF THE ASSESSEE'S PAPER B OOK. 9.1 IT WAS CONTENDED THAT THE ASSESSEE PREFERRED AN APPEAL AGAINST THE SAID ASSESSMENT ORDER AND THE LD. CIT(A), BIKANER ALLOWED SUBSTANTI AL RELIEF VIDE ORDER DATED. 24/10/2016, REFERENCE WAS MADE TO PAGE NO. 40 TO 45 OF THE ASSE SSEE'S PAPER BOOK. 9.2 IT WAS FURTHER CONTENDED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T THE TRANSACTIONS MADE WITH M/S KALKA UDYOG WERE GENUINE TRANSACTION, DULY RECORDED AND S UPPORTED FROM THE DOCUMENTARY EVIDENCES WHICH WAS SUBJECT TO COMMERCIAL TAXES AND ALL THE DOCUMENTARY EVIDENCES WERE FURNISHED BEFORE THE ASSESSING OFFICER, REFERENCE W AS MADE TO PAGE NO. 71 TO 246 OF THE ASSESSEE'S PAPER BOOK. 9.3 IT WAS STATED THAT THE ASSESSING OFFICER HAD NO T BROUGHT ON RECORD ANY ADVERSE MATERIAL AGAINST DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSEE HAD RECEIVED ADVANCE PAYMENT FROM M/S KALK A UDYOG AND THEREAFTER SEND THE GOODS AND REMAINING PAYMENTS WERE RECEIVED THROUGH RTGS WHICH WERE DULY REFLECTED IN THE BANK STATEMENTS. 9.4 LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE N O. 78 TO 146 OF THE ASSESSEE'S PAPER BOOK WHICH ARE THE COPIES OF THE LEDGER ACCOUNT ALO NGWITH BILLS ISSUED BY THE ASSESSEE, THE 9 DECLARATION FOR CARRYING GOODS OUTSIDE THE STATE IS SUED BY COMMERCIAL TAXATION IN RESPECT OF TRANSIT OF GOODS, COPIES OF TRANSPORTER'S RECEIPTS, WEIGHING RECEIPT IN RESPECT OF EACH TRANSACTION. IT WAS FURTHER SUBMITTED THAT M/S KALK A UDYOG PROVIDED THE COPIES OF THE C-FORM TO THE ASSESSEE AGAINST THE SALE, REFERENCE WAS MAD E TO PAGE NO. 164 TO 167 OF THE PAPER BOOK. IT WAS ALSO SUBMITTED THAT THE GENUINENESS O F THE TRANSACTIONS WAS ALSO PROVED FROM THE VAT RETURNS AND THE STOCK STATEMENT PLACED AT P AGE NOS. 168 TO 170 OF THE ASSESSEE'S PAPER BOOK. IT WAS CONTENDED THAT THE COPY OF STATE MENT SHOWING DATE, QUANTITY, AND PARTY WISE PURCHASES, SALES MADE BY THE ASSESSEE DURING T HE YEAR UNDER CONSIDERATION DULY SUPPORTED FROM THE BILLS APPEARED IN THE AUDITED FI NANCIAL STATEMENT, REFERENCE WAS MADE TO PAGE NO. 174 TO 238 OF THE ASSESSEE'S PAPER BOOK . 9.5 THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER DID NOT PROVIDE THE OPPORTUNITY FOR CROSS EXAMINATION OF SHRI TRILO K GOEL DURING THE COURSE OF ASSESSMENT PROCEEDINGS EVEN AFTER REPEATED REQUESTS MADE BY TH E ASSESSEE. IT WAS ALSO CONTENDED THAT THE ASSESSING OFFICER DID NOT PROVIDE ANY MATE RIAL OR DOCUMENTARY EVIDENCE ON THE BASIS OF WHICH THE ALLEGATION WAS MADE THAT THE ASS ESSEE WAS ONE OF THE PARTY WHO HAD TAKEN ACCOMMODATION ENTRY FOR BOGUS SALES/PURCHASES FROM SHRI TRILOK GOEL AND / OR HIS ENTITIES. IT WAS SUBMITTED THAT THE ASSESSING OFFIC ER HIMSELF HAD ACCEPTED PURCHASE / SALE AND STOCK AS DECLARED BY THE ASSESSEE NOT ONLY DURI NG THE COURSE OF REASSESSMENT PROCEEDINGS BUT ALSO IN THE ORIGINAL ASSESSMENT PRO CEEDINGS AND WHEN THE SALE TRANSACTION MADE BY THE ASSESSEE WITH SHRI TRILOK GOEL WERE DUL Y RECORDED IN THE BOOKS OF ACCOUNT AND WERE ALSO PART OF SALE DECLARED THEN HOW AND IN WHA T MANNER THE ASSESSING OFFICER HAD TREATED SUCH SALES TRANSACTIONS AS BOGUS WITHOUT BR INGING ON RECORD ANY ADVERSE MATERIAL. IT WAS STATED THAT DENIAL OF CROSS EXAMINATION OF SHRI TRILOK GOEL BY THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(A) WHICH WAS CONTRARY TO T HE PRINCIPLES OF NATURAL JUSTICE. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASES OF M/S SAHARA INDIA (FARMS) VS. CIT & ANR. IN [2008] 300 ITR 403, AND ANDMAN TIMBER IND. VS. COMMISSION OF CENTRAL EXCISE (2015) 281 CTR 211. 9.6 IT WAS FURTHER STATED THAT THE ASSESSEE HAD EXP LAINED BEFORE THE AUTHORITIES BELOW AND THAT IN THE PAST SIMILAR TYPE OF TRANSACTION OF SALE AND PURCHASES OF GOODS HAD BEEN ACCEPTED BY THE DEPARTMENT AS GENUINE. IT WAS SUBMI TTED THAT EVEN WHEN THE SEARCH WAS CONDUCTED UNDER SECTION 132 OF THE ACT AT THE BUSIN ESS PREMISES OF THE ASSESSEE ON 17/02/2011 AND 18/02/2011, THE DEPARTMENT HAD NOT F OUND ANY MATERIAL / INFORMATION ETC WHICH REVEALED THAT THE ASSESSEE HAD INVOLVED IN AN Y BOGUS TRANSACTION OF SALES / PURCHASES THEREFORE, WITHOUT BRINGING OUT ANY ADVERSE MATERI AL, THE ASSESSING OFFICER TREATED THE SALES MADE BY THE ASSESSE TO ALLEGED PARTY AS UNEXPLAINED UNDER SECTION 68 OF THE ACT IN TOTALLY INARBITRARILY MANNER. IT WAS CONTENDED THAT THE LD. CIT(A) HAD APPLIED GP RATE ON SUCH SALES WITHOUT CONSIDERING THE FACT THAT ASSESSEE ITSELF H AD DECLARED SUCH GP ON THE SALE MADE TO 10 THE ALLEGED PARTY IN THE BOOKS OF ACCOUNTS THEREFOR E IT WAS A DOUBLE TAXATION ON THE SAME TRANSACTION ON WHICH THE INCOME EARNED BY THE ASSES SEE HAD ALREADY BEEN DECLARED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS : * ITO VS. SHREE M.D. INDUSTRIES, (2012), 34 CCH 023 8 DATED. 28/12/2012 (AHD TRIB.) * M/S VINOD COMMODITIES LTD., JODHPUR VS. ACIT, JOD HPUR IN ITA NO. 135/JODH/2019 DT. 09/05/2019 (JODHPUR TRIB) 10. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGL Y SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE THEREI N. IT WAS SUBMITTED THAT THE ASSESSEE HAD NOT FURNISHED THE VARIOUS DETAILS EVEN WHEN THE AMP LE OPPORTUNITIES WERE GIVEN BY THE ASSESSING OFFICER. IT WAS EMPHASIZED THAT THE LETTE R ISSUED BY THE ASSESSING OFFICER TO THE TRANSPORTERS WAS RETURNED BACK UNSERVED, AND SHRI T RILOK GOEL IN HIS STATEMENT ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRY IN LIEU OF CAS H RECEIVED FROM THE PARTIES, THEREFORE THE SALES DECLARED BY THE ASSESSEE TO M/S KALKA UDY OG WAS INFACT THE UNDISCLOSED INCOME EARNED BY THE ASSESSEE. THEREFORE THE ASSESSING OFF ICER RIGHTLY MADE THE ADDITION AND THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE RELIEF TO THE ASSESSEE. 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS NOT IN DISPUTE THAT THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNTS WHICH WERE SUBJECT TO AUD IT UNDER SECTION 44AB OF THE ACT AND THE ASSESSING OFFICER HAD NOT POINTED OUT ANY SPEC IFIC DEFECT ON THE SAID BOOKS OF ACCOUNTS. THE LD. CIT(A) HAD ALSO CATEGORICALLY STATED IN THE IMPUGNED ORDER THAT THE ASSESSING OFFICER HAD NEVER DISPUTED PURCHASES, STOCK STATEMENTS, YIE LDS, VAT RETURNS AND THOUGH NOTHING ADVERSE WAS POINTED OUT ABOUT THE EVIDENCE SUPPLIED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE SAID OBSERVATION OF THE LD. CIT(A) WAS NOT REBUTTED. IN THE PRESENT CASE THE SALES MADE BY THE ASSESSEE TO M/S KALKA UDYOG WAS AGAINST C FORM AND FORM NO. 49 ETC WHICH WERE DULY DECLARED IN VAT RET URNS WHICH HAD BEEN ACCEPTED BY THE CONCERNED DEPARTMENT AND NOTHING CONTRARY TO THAT H AS BEEN BROUGHT ON RECORD. IN THE INSTANT CASE THE ASSESSEE INCLUDED THE IMPUGNED SAL ES IN ITS TURNOVER AND DULY RECORDED THE SAME IN ITS BOOKS OF ACCOUNTS WHICH HAD NOT BEEN RE JECTED BY THE ASSESSING OFFICER AND EVEN THE SALE DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS WAS NOT DISTURBED. THE ASSESSING OFFICER HAD ACCEPTED THE PURCHASES DECLAR ED BY THE ASSESSEE WHICH WERE NOT FOUND TO BE INFLATED. THE SALES OF THE ASSESSEE WER E ALSO NOT FOUND TO BE SUPPRESSED AND EVEN THE GP RATE DECLARED WAS FOUND TO BE GENUINE T HEREFORE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE ENTIRE SALES ON THE BASIS OF STATEMENT OF THIRD PARTY AS BOGUS AND ADDING THE SAME IN HANDS OF THE ASSESSEE. IN THE PR ESENT CASE THE LD. CIT(A) ALTHOUGH ACCEPTED THE SALES OF THE ASSESSEE TO BE GENUINE BU T MADE THE ADDITION BY APPLYING THE GP RATE OF 8.8% WHICH WAS ALREADY DECLARED BY THE A SSESSEE AND ACCEPTED BY THE DEPARTMENT. IN OUR OPINION WHEN THE IMPUGNED SALES OF RS. 2,60,17,159/- WAS ALREADY 11 INCLUDED BY THE ASSESSEE IN ITS TURNOVER ON WHICH T HE GP RATE OF 8.8% WAS EARNED THERE WAS NO JUSTIFICATION FOR MAKING THE SIMILAR ADDITION ON THE SAME SALES WHICH WAS ALREADY PART OF THE TURNOVER ACCEPTED BY THE DEPARTMENT. IN THAT VI EW OF THE MATTER WE ARE OF THE VIEW THAT THE ADDITION OF RS. 22,89,510/- SUSTAINED BY THE LD . CIT(A) WAS NOT JUSTIFIED. ON A SIMILAR ISSUE THE HON'BLE APEX COURT IN THE CASE OF CIT -7, NEW DELHI VS. M/S ODEON BUILDERS PVT. LTD. IN CIVIL APPEAL NOS. 9604-9605 OF 2018 ORDER DATED. 21 /08/2019 HELD AS UNDER : THUS, THE ENTIRE DISALLOWANCE IN THIS CASE IS BASED ON THIRD PARTY INFORMATION GATHERED BY THE INVESTIGATION WING OF THE DEPARTMENT, WHICH H AVE NOT BEEN INDEPENDENTLY SUBJECTED TO FURTHER VERIFICATION BY THE AO WHO HAS NOT PROVIDED THE COPY OF SUCH STATEMENTS TO THE APPELLANT, THUS DENYING OPPORTUNITY O F CROSS EXAMINATION TO THE APPELLANT, WHO HAS PRIMA FACIE DISCHARGED THE INITIAL BURDEN OF SUBSTANTIATING THE PURCHASES THROUGH VARIOUS DOCUMENTATION INCLUDING PUR CHASE BILLS, TRANSPORTATION BILLS, CONFIRMED COPY OF ACCOUNTS AND THE FACT OF PAYMENT TH ROUGH CHEQUES, & VAT REGISTRATION OF THE SELLERS & THEIR INCOME TAX RETU RN. IN VIEW OF THE ABOVE DISCUSSION IN TOTALITY, THE PURCHASES MADE BY THE APPELLANT FROM M/S P ADMESH REALTORS PVT. LTD. IS FOUND TO BE ACCEPTABLE AND THE CONSEQUENT DISALLOWANC E RESULTING IN ADDITION TO INCOME MADE FOR RS.19,39,60,866/-, IS DIRECTED TO BE DELETED. 11.1 IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAD NOT PROVIDED THE OPPORTUNITY ASKED BY THE ASSESSEE TO CROSS EXAMINATION SHRI TRILOK GO EL ON THE BASIS OF WHICH THE IMPUGNED SALES WAS TREATED AS BOGUS AND EVEN THE ASSESSEE FU RNISHED ALL THE DOCUMENTS RELATING TO PURCHASE / SALES, TRANSPORTATION ETC, VARIOUS COPIE S OF ACCOUNTS, VAT RETURNS, COPY OF C FORM OBTAINED FROM M/S KALKA UDYOG. THEREFORE THE ASSESS ING OFFICER ARBITRARILY ADDED THE ENTIRE SALES IN THE HANDS OF THE ASSESSEE AND THE LD. CIT( A) ALTHOUGH CONSIDERED THE SALES DECLARED BY THE ASSESSEE AS GENUINE BUT WRONGLY MADE THE ADD ITION BY APPLYING THE GP RATE OF 8.8% DECLARED BY THE ASSESSEE ON THE SAME SALES WHICH WA S ALSO PART OF THE TURNOVER OF THE ASSESSEE ON WHICH THE PROFIT WAS ALSO ALREADY DECLA RED. WE THEREFORE ARE OF THE CONFIRMED VIEW THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 12. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2019 ) SD/- SD/- (SANDEEP GOSAIN) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 27/11/2019 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CI T(A), 4. THE CIT, 5. THE DR