The Deputy Commissioner of Income tax, Jammu V. Smt. Ranjana Aggarwal Prop., Jammu

ITA 203/ASR/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1419 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 40A(3); 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (BEFORE SHRI A.D. JAIN, JM & SHRI T.R. MEENA AM) ITA NO. 203/ASR/2013 ASSESSMENT YEAR : 2009-10 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMMU. VS. RANJANA AGGARWAL, PROP.- M/S LADAKH HANDLOOM & KHADI UDYOG, R.N. BAZAR, JAMMU. PAN NO.: AAUPA 5814 E APPELLANT RESPONDENT C.O. NO. 06/ASR/2014 (ARISING OUT OF ITA NO. 203/ASR/2013) ASSESSMENT YEAR : 2009-10 RANJANA AGGARWAL, PROP.- M/S LADAKH HANDLOOM & KHADI UDYOG, R.N. BAZAR, JAMMU. VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMMU. PAN NO.: AAUPA 5814 E OBJECTOR RESPONDENT ITA NO. 204/ASR/2013 ASSESSMENT YEAR : 2009-10 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMMU. VS. VEENA AGGARWAL, PROP.- M/S BAINYA SUPER MARKET, R.N. BAZAR, JAMMU. PAN NO.: AAUPA 5814 G APPELLANT RESPONDENT 2 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL ITA NO. 176/ASR/2013 ASSESSMENT YEAR : 2009-10 VEENA AGGARWAL, PROP.- M/S BAINYA SUPER MARKET, R.N. BAZAR, JAMMU. VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-2, JAMMU. PAN NO.: AAUPA 5814 G APPELLANT RESPONDENT REVENUE BY : SHRI TARSEM LAL (SR. DR) ASSESSEE BY : SHRI P.N. ARORA, (ADV) DATE OF HEARING : 27/08/2015 DATE OF PRONOUNCEMENT : 16/09/2015 O R D E R PER: T.R. MEENA, A.M. ALL THE THREE APPEALS AND C.O. ARE HEARD TOGETHER O N COMMON ISSUES, THEREFORE, COMMON ORDER IS BEING PASSED IN ALL THE CASES. 2. FIRSTLY WE ARE GOING TO DECIDE ITA NO. 203/ASR/20 13 AND C.O. 06/ASR/2014. THE APPEAL FILED BY THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARISE AGAINST THE ORDER DATED 16/01/2013 PASSED BY THE LD C.I.T.(A), JAMMU 3 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL FOR A.Y. 2009-10. THE EFFECTIVE GROUNDS OF APPEAL A S WELL AS THE C.O. ARE AS UNDER:- GROUNDS OF REVENUES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHTLY IN DELETING THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN BALANCE WITH M/S RAJ TRADING CO., BY ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE DURING ASSESSMENT PROCEEDINGS WHEN THE ASSESSEE DURI NG ASSESSMENT PROCEEDINGS HAS SUBMITTED THAT NO SUCH PURCHASES HAVE BEEN MADE BY THE ASSESSEE FROM M/S R AJ TRADING CO. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT O F DIFFERENCE IN BALANCE WITH M/S SHAKTI SHAWL STORE BY ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE DURING APPELLANT PROCEEDINGS WHEN THE ASSESSEE DURIN G THE ASSESSMENT PROCEEDINGS HAS SUBMITTED THAT NO CHEQUES HAVE BEEN MADE BY THE ASSESSEE TO M/S SHAKT I SHAWL STORE. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT O F DIFFERENCE IN BALANCE WITH M/S RAJ TRADING CO. AND WIT H M/S SHAKTI SHAWL STORE BY ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSES DURING APPELLATE PROCEEDINGS IN THE SHAPE OF REVISED COPY OF ACCOUNT OF M/S RAJ TRADING CO. AND WITH M/S SHAKTI SHAWL STORE WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSING OFFIC ER UNDER RULE 46A(3) OF THE INCOME TAX RULES, 1962 TO EXAMINE THE EVIDENCES/DOCUMENTS. 4 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION OF RS. 28,49,276/ - MADE ON ACCOUNT OF VIOLATION U/S 40A(3) OF THE INCO ME TAX ACT WHEN THE GENUINENESS OF ALL SUCH PURCHASES D O NOT STAND ESTABLISHED ON THE FACTS THAT THE INFORMA TION U/S 133(6) WERE CALLED FROM THE PARTIES ON ADDRESSES GIVEN BY THE ASSESSEE BUT LETTERS HAVE BEEN RECEIVE D BACK WITH THE REMARKS THAT ADDRESS IS NOT KNOWN WHIC H MEANS THAT THE PURCHASES MADE BY THE ASSESSEE ARE N OT GENUINE PERSONS FROM WHOM THE PURCHASES HAVE BEEN MADE. ALSO, THE ASSESSEE WAS ALSO ASKED TO FURNISH C OPY OF ACCOUNT ALONGWITH CERTIFIED COPY FROM THE DIFFERE NT PARTIES BUT SHE EXPRESSED INABILITY TO PROVIDE THE SAME. 5. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION OF RS. 28,49,276/ - MADE ON ACCOUNT OF VIOLATIONS U/S 40A(3) OF THE INC OME TAX ACT BY ADMITTING ADDITIONAL EVIDENCES FILED BY T HE ASSESSEE DURING APPELLATE PROCEEDINGS IN THE SHAPE OF STATEMENT OF PAYMENT MADE DATE WISE TO SUPPLIERS, COPIES OF ACCOUNT OF THE SUPPLIERS, BILLS OF THE SU PPLIERS WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSING OFFIC ER AS PER RULE 46A(3) OF THE INCOME TAX RULES, 1962 TO EXAMINE THE EVIDENCES/DOCUMENTS. GROUNDS OF ASSESSEES C.O.: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 8,93,489/- AND RS. 81,900/- BY INVOKING THE PROVISIONS OF SECTION 40A( 3) OF THE INCOME TAX ACT. 5 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL THE ADDITION IS NOT BASED ON FACTS AND ALL PURCHASES ARE DULY SUPPORTED BY BILLS. NON RECEIPT OF CONFIRMATIO N DOES NOT ENTITLE TO DISALLOW THE PURCHASES WHEN BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED. THE ADDITION IS PRAYED TO BE DELETED. 3. ALL THE GROUNDS OF THE REVENUES APPEAL AND GROU ND RAISED IN THE C.O. BY THE ASSESSEE ARE AGAINST THAT THE LD CI T(A) HAS ADMITTED THE ADDITIONAL EVIDENCE FOR RECONCILIATION OF THE D IFFERENCES OF PURCHASES MADE FROM M/S RAJ TRADING CO. AND M/S SHAK TI SHAWL STORE, DELETING THE ADDITION OF RS. 28,49,236/- MAD E ON ACCOUNT OF VIOLATION U/S 40A(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND CONFIRMING THE ADDITION OF RS. 8,93,489/- AND RS. 81,900 BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE AC T. 3.1 THE LD ASSESSING OFFICER OBSERVED THAT THE ASSES SEE IS A PROPRIETOR OF M/S LADAKH HANDLOOM & KHADI UDYOG, R. N. BAZAR, JAMMU DEALING IN THE BUSINESS OF RETAIL SALE OF VAR IOUS ITEMS RANGING FROM READYMADE CLOTHES SOVINEUORS TO DRY-FRUITS. THE RETURN FOR A.Y. 2009-10 WAS FILED ON 24/09/2009 AT RS. 11,33,730/-. THE CASE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE LD ASSESSING OFFICER COLLECTED INFORMATION U/S 133(6) OF THE ACT IN CASE OF M/S RA J TRADING CO., CHOWK PASSION, AMRITSAR AND M/S SHAKTI SHAWL STORE, C HOWK PASSION, 6 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL AMRITSAR. THE ASSESSEE COULD NOT RECONCILE THE DIFFE RENCE BETWEEN THE COPY OF ACCOUNT COLLECTED U/S 133(6) WITH THE LEDGER ACCOUNT IN THE BOOKS OF ASSESSEE, THEREFORE, THE LD ASSESSING OFFI CER MADE ADDITION ON ACCOUNT OF DIFFERENCE AT RS. 1,10,535/- IN THE C ASE OF M/S RAJ TRADING CO. AND RS. 50,000/- M/S SHAKTI SHAWL STORE. 3.2 THE ASSESSEE HAS BEEN MAINTAINING BANK ACCOUNT WI TH STATE BANK OF PATIYALA, GANDHI NAGAR, JAMMU IN THE NAME O F M/S LADAKH HANDLOOM & KHADI UDYOG, RAGHUNATHPUR BAZAR, JAMMU. IT WAS NOTICED BY THE LD ASSESSING OFFICER THAT SHRI VINOD KUMAR AND SHRI SARDARI LAL HAD WITHDRAWN NUMBER OF TIME FROM THE ACC OUNT, WHICH WERE SHOWN IN THE REGULAR BOOKS OF ACCOUNT THROUGH C HEQUE BUT THE SAME WERE ENCAHSED BY THE TWO PERSONS AND THERE WAS VI OLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT AS THE ASSE SSEE HAS PAID CASH PAYMENT AGAINST THE PURCHASE MORE THAN RS. 20,000/- . THE LD ASSESSING OFFICER ALSO VERIFIED THE GENUINENESS OF THESE PAYMENTS ON GIVEN ADDRESS BUT LETTER ISSUED U/S 133(6) HAD BEEN RETURNED BACK WITH REMARK ADDRESS IS NOT KNOWN. IN CASE OF M/S VI NIT SHAWLS, MOCHPURA BAZAR, LUDHIANA AND M/S PARUL FASHIONS WEA R, 1876- MAHAVIR GALI, GANDHI NAGAR, NEW DELHI, THE LD ASSESS ING OFFICER 7 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL FURTHER ASKED TO SUPPLY THE COPY OF ACCOUNT. IN CAS E OF M/S CHINAR ART AND CRAFT EMPORIUM, M/S WANI HANDICRAFTS AND M/S SA MRIDHI COLLECTIONS, THE ASSESSEE HAD NOT SUPPLIED THE COPY OF ABOVE PARTIES. THE LD ASSESSING OFFICER HAD MENTIONED CASH PAYMENT DETAILS FROM PAGE 5 TO 13 IN THE ASSESSMENT ORDER. THE LD ASSESS ING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE HAD NOT FURNISHED CONVINCING REPLY BEFORE THE ASSES SING OFFICER, THEREFORE, HE MADE TOTAL ADDITION OF RS. 38,24,665/ - U/S 40A(3) OF THE ACT. 4. BEING AGGRIEVED BY THE ORDER OF ASSESSING OFFICE R, THE ASSESSEE CARRIED THE MATTER BEFORE CIT(APPEALS) JAMMU, WHO HA D ALLOWED THE APPEAL PARTLY BY ACCEPTING THE ADDITIONAL EVIDENCE IN THE CASE OF M/S RAJ TRADING CO., IN THE CASE OF M/S SHAKTI SHAWL STOR E, BY ACCEPTING THE STATEMENT OF SALE/PURCHASE AND GROSS PROFIT FOR THE LAST THREE YEARS AND YEAR UNDER APPEAL, COPY OF RETURN FILED U NDER VAT, COPY OF CASH BOOK, DETAILED INFORMATION FOR CASH PAYMENT TO EACH SUPPLIER, COPY OF ACCOUNT OF THE SUPPLIER, STATEMENT OF PAYME NT MADE TO VARIOUS SUPPLIERS AND VARIOUS OTHER CONFIRMATIONS A ND HELD THAT PROVISIONS OF SECTION 40A(3) OF THE ACT ARE APPLICA BLE IN RESPECT OF RS. 8 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL 8,93,489/- AND RS. 81,900/-, THEREFORE, HE DELETED THE ADDITION OF RS. 28,49,276/-. 5. NOW THE REVENUE IS IN APPEAL AND THE ASSESSEE IS IN C.O. ARE BEFORE US. THE LD DR VEHEMENTLY ARGUED THAT ADDITION AL EVIDENCE HAS BEEN ACCEPTED BY THE LD CIT(A) WITHOUT SEEKING REMAND REPORT FROM THE ASSESSING OFFICER, THEREFORE, IT IS VIOLATION O F PRINCIPLES OF NATURAL JUSTICE. HE PRAYED TO SET ASIDE THE ISSUE TO THE AS SESSING OFFICER TO CONSIDER THE ADDITIONAL EVIDENCE FILED BY THE ASSES SEE BEFORE THE LD CIT(A). 6. AT THE OUTSET, THE LD COUNSEL FOR THE ASSESSEE H AS FAIRLY ACCEPTED THE PROPOSAL OF THE REVENUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. 8. WE FIND MERIT IN THE ARGUMENTS OF THE LD DR AS WE LL AS ACCEPTANCE OF THE LD AR, THEREFORE, WE SET ASIDE THE REVENUES APPEAL AS WELL AS THE ASSESSEES C.O. TO THE ASSESSING OFFI CER TO RECONSIDER THE ADDITIONAL EVIDENCE FURNISHED BEFORE THE LD CIT (A). THE ASSESSEE IS ALSO DIRECTED TO COOPERATE THE ASSESSING OFFICER AND ASSESSING 9 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL OFFICER IS ALSO DIRECTED TO PROVIDE REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY BOTH THE CASES A RE SET ASIDE TO THE ASSESSING OFFICER FOR DE NOVO. 9. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSESS EES C.O. ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. 10. NOW WE ARE GOING TO DECIDE CROSS APPEALS ONE BY T HE REVENUE BEING ITA NO. 204/ASR/2013 AND ANOTHER BY THE ASSES SEE BEING ITA NO. 176/ASR/2013. THESE ARE CROSS APPEALS ONE BY TH E DEPARTMENT ANOTHER BY THE ASSESSEE ARISE AGAINST THE ORDER DAT ED 16/01/2013 PASSED BY THE LD CIT(A), JAMMU FOR A.Y. 2009-10. THE EFFECTIVE GROUNDS OF BOTH THE APPEALS ARE AS UNDER:- GROUNDS OF REVENUES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHTLY IN DELETING THE ADDITION MADE ON ACCOUNT OF DISCOUNT OF RS. 55,425/- BY ADMITTING THE ADDITIONA L EVIDENCES FILED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS WHEN THE ASSESSEE DURING ASSESSMENT PROCEEDINGS COULD NOT PROVE THE CORRECTNESS AND GENUINENESS OF THE CLAIM OF DISCOUNT. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT O F DISCOUNT OF RS. 55,425/- BY ADMITTING THE ADDITIONA L 10 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL EVIDENCES FILED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS IN THE SHAPE OF CREDIT NOTE AND COPY OF THE BILLS ON WHICH DISCOUNT WAS ALLOWED WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSING OFFICER UNDER RULE 46A OF THE INCOME TAX RULES, 1962 TO EXAMINE THE EVIDENCES/DOCUMENTS. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION OF RS. 29,99,836/ - MADE ON ACCOUNT OF VIOLATION U/S 40A(3) OF THE INCO ME TAX ACT WHEN THE GENUINENESS OF ALL SUCH PURCHASES D O NOT STAND ESTABLISHED ON THE FACTS THAT THE INFORMA TION U/S 133(6) WERE CALLED FROM THE PARTIES ON ADDRESSES GIVEN BY THE ASSESSEE BUT LETTERS HAVE BEEN RECEIVE D BACK WITH THE REMARKS THAT ADDRESS IS NOT KNOWN WHIC H MEANS THAT THE PURCHASES MADE BY THE ASSESSEE ARE N OT GENUINE PERSONS FROM WHOM THE PURCHASES HAVE BEEN MADE. ALSO, THE ASSESSEE WAS ALSO ASKED TO FURNISH C OPY OF ACCOUNT ALONGWITH CERTIFIED COPY FROM THE DIFFERE NT PARTIES BUT SHE EXPRESSED INABILITY TO PROVIDE THE SAME. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A ) WAS RIGHT IN DELETING THE ADDITION OF RS. 29,99,836/ - MADE ON ACCOUNT OF VIOLATIONS U/S 40A(3) OF THE INC OME TAX ACT BY ADMITTING ADDITIONAL EVIDENCES FILED BY T HE ASSESSEE DURING APPELLATE PROCEEDINGS IN THE SHAPE OF STATEMENT OF PAYMENT MADE DATE WISE TO SUPPLIERS, COPIES OF ACCOUNT OF THE SUPPLIERS, BILLS OF THE SU PPLIERS WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSING OFFIC ER AS PER RULE 46A(3) OF THE INCOME TAX RULES, 1962 TO EXAMINE THE EVIDENCES/DOCUMENTS. 11 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL GROUNDS OF ASSESSEES APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 54,300/- AND RS. 84, 730/- ON ACCOUNT OF DIFFERENCE WITH COPIES OF ACCOUNT WITH THE SELLER. THE APPELLANT PURCHASED THE GOODS AMOUNTING TO RS. 54,300/- AND RS. 84,730/-. THESE PURCHASES ARE DULY SUPPORTED BY PURCHASE BILLS. THE ADDITIONS ARE PRAYE D TO BE DELETED. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 54,300/- BEING PAYME NTS MADE TO THE SELLER. THE SAID AMOUNT HAS NOT BEEN CLAIMED AS EXPENDITURE AND NO ADDITION WAS CALLED F OR. IT IS PRAYED THAT THE ADDITION OF RS. 54,300/- BE DELE TED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 52,500/-. THAT NO SUC H PAYMENT HAS BEEN MADE BY THE APPELLANT AND THE ADDITION IS NOT JUSTIFIED. IT IS PRAYED TO BE DELET ED. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 3,78,734/-. DETAILED AS UNDER:- KUNAL TRADING CO. RS. 22,608/- DHEERAJ GARMENTS RS. 49,708/- JAMSHED BROTHERS RS. 10,210/- ARTI BAG HOUSE RS. 25,847/- SIMRAN ENTERPRISES RS. 2,34,460/- DEVI SARAN BAG HOUSE RS. 35,901/- RS. 3,78,734/- 12 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL THE ADDITION IS NOT BASED ON FACTS AND ALL PURCHASES ARE DULY SUPPORTED BY BILLS. NON RECEIPT OF CONFIRMATIO NS DOES NOT ENTITLE TO DISALLOW THE PURCHASES WHEN BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED. THE ADDITION OF RS. 3,78,734/- IS PRAYED TO BE DELETED. 11. THE REVENUES APPEAL IS AGAINST DELETION OF ADDI TION BY THE LD CIT(A) AND THE ASSESSEES APPEAL IS AGAINST CONFIRMA TION OF ADDITION BY THE LD CIT(A). THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS A PROPRIETOR OF M/S BANIYA SUPER MARKET, R.N. BA ZAR, JAMMU DEALING IN THE BUSINESS OF RETAIL SALE OF VARIOUS I TEMS RANGING FROM READYMADE CLOTHES SOVINEUORS TO DRY-FRUITS. THE RET URN FOR A.Y. 2009- 10 WAS FILED ON 24/09/2009 AT RS. 14,89,340/-. THE CA SE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE LD ASSESSING OFFICER OBSERVED THAT THE ENTRY OF RS. 84,730/- IN RESPECT OF PURCHA SES MADE ON 23/5/2008 VIDE VOUCHER NO. 122 IS APPEARING IN THE BOOKS OF THE ASSESSEE WAS NOT FOUND RECORDED IN THE BOOKS OF M/S K.N. RAO FABRICS. THE LD ASSESSING OFFICER GAVE REASONABLE OP PORTUNITY OF BEING HEARD ON THIS ISSUE AND THE ASSESSEE SUBMITTED THAT THESE ARE THE GENUINE PURCHASES AND FOR WHICH COPY OF BILL WAS FUR NISHED. THE LD ASSESSING OFFICER HELD THAT THE ASSESSEES CONTENTI ON PARTLY WERE CORRECT BUT THESE TRANSACTIONS WERE NOT RECORDED BY M/S K.N. RAO 13 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL FABRICS IN ITS BOOKS OF ACCOUNT WHICH SHOWED THAT PUR CHASES WERE MADE IN CASH. HENCE, HE MADE ADDITION OF RS. 84,730 /-. SIMILAR FINDINGS WERE GIVEN BY THE LD ASSESSING OFFICER ON P URCHASES MADE OF RS. 54,300/- VIDE VOUCHER NO. 130 DATED 15/11/2008. 11.1 THE LD ASSESSING OFFICER OBSERVED THAT THERE I S AN ENTRY OF DISCOUNT RECEIVED FOR RS. 55,425/- DATED 06/2/2009 AGAINST THE PURCHASE MADE BUT WAS NOT FOUND RECORDED IN THE BOOK S OF OTHER PARTY I.E. M/S K.N. RAO FABRICS, ASHOKA ROAD, KARNA TAKA. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BE ING HEARD ON THIS ISSUE AND THE ASSESSEE SUBMITTED COPY OF CREDIT NOT E DATED 06/2/2009 IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE ASSE SSING OFFICER. HE FURTHER OBSERVED THAT ON PERUSAL OF CREDIT NOTE REV EALED THAT M/S K.N. RAO FABRICS HAS NOT PUT ANY SIGNATURE/SEAL AND IT I S JUST A LETTER PAD FROM WHERE SHE COULD NOT PROVE THE GENUINENESS OF TH E CREDIT NOTE. HAD IT BEEN ISSUED BY M/S K.N. RAO FABRICS, IT MUST HAVE ACCOUNT FOR AN AMOUNT OF RS. 55,425/- IN ITS BOOKS OF ACCOUNT, THEREFORE, THE LD ASSESSING OFFICER HELD THAT THIS TRANSACTION IS NOT GENUINE. ACCORDINGLY, HE MADE ADDITION OF RS. 55,425/- 14 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL 11.2 THE LD ASSESSING OFFICER FURTHER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ENQUIRY WERE GOT CONDUCTE D FROM THE STATE BANK OF PATIYALA, GANDHI NAGAR, JAMMU OF THE ASSESSEE WHERE THE ASSESSEE WAS MAINTAINING BANK ACCOUNT IN THE NAM E OF M/S BANIYA SUPER MARKET, RAGHUNATHPUR BAZAR, JAMMU. FRO M THIS ACCOUNT, THERE WERE LOT OF WITHDRAWALS WERE MADE BY PER SON NAMELY SH. VINOD KUJAR, SH. SITA RAM, SH. NARESH AND SH. S ARDARI LAL. THESE ENTRIES REVEALED THAT NUMBER OF THE WITHDRAWALS WERE R ELATED TO THOSE CHEQUES, WHICH HAD BEEN GIVEN/TENDERED TO VARIOUS S UPPLIERS OF THE ASSESSEE. THIS MEANS THAT THE ASSESSEE HAD ISSUED EI THER SELF CHEQUE OR ANOTHER CROSS CHEQUE TO DIFFERENT SUPPLIERS AND ENCAHSED THE SAME HERSELF THROUGH SOME OF THE ASSESSEE FOR EVADING TH E PROVISIONS OF SECTION 40A(3) OF THE ACT, WHICH PROHIBITS THE CASH PAYMENT TO VENDORS/SUPPLIERS EXCEEDING RS. 20,000/-. THE LD ASS ESSING OFFICER ALSO GATHERED INFORMATION U/S 133(6) OF THE ACT IN THE CASE OF M/S KUNAL TRADING CO., SADAR BAZAR, DELHI, DHEERAJ GARM ENTS, GANDHI NAGAR, DELHI, JAMSHED BROTHERS, SAFA KADAL, SRINAGA R, AARTI BAG HOUSE, PAHAR GANJ, DELHI, SIMRAN ENTERPRISES, AMRIT SAR, DEVI SARAN BAG HOUSE, DELHI. ON GIVEN ADDRESS LETTERS HAD BEEN RETURNED BACK 15 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL WITH THE REMARK ASSESSEE IS NOT KNOWN. HE FURTHER ASKED FOR TO THE ASSESSEE TO SUPPLY COPY OF ACCOUNT IN CASE OF M/S R UBY TRADING CO., SRINAGAR, M/S WANI HANDICRAFTS, SRINAGAR, M/S SHEIK H & CO. SRINAGAR AND M/S SHEKH HANDICRAFTS, SRINAGAR. THE ASSESSEE EX PRESSED HIS INABILITY TO PROVIDE COPY OF ACCOUNT, WHICH PROVED T HAT THESE TRANSACTIONS WERE NOT GENUINE. HE HAD SUMMARIZED THE CASH PAYMENT MADE BY THE ASSESSEE FROM PAGE NO. 7 TO 17 OF THE A SSESSMENT ORDER. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD BUT THE ASSESSEES REPLY WAS NOT FOUND CONVINCING T O HIM. THEREFORE, HE MADE ADDITION OF RS. 50,34,544/- U/S 40A(3) OF T HE ACT. 12. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALLOWED THE APPEAL PARTLY BY OBSERVING THAT THESE TWO PURCHA SES WERE NOT DISCLOSED BY THE SELLER I.E. M/S K.N. RAO FABRICS. THE ASSESSEE TRIED TO EXPLAIN BY PRODUCING THE COPY OF BILL BEFORE THE AS SESSING OFFICER AS WELL AS THE LD CIT(A). THUS, HE CONFIRMED THE ADDITION OF RS. 84,730/- AND 54,300/-. 12.1 WITH REGARD TO DISCOUNT RECEIVED FROM M/S K.N . RAO FABRICS, HE HELD THAT THE DISCOUNT WAS SUPPORTED BY THE CREDIT N OTE OF THE BILLS 16 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL AGAINST WHICH THE DISCOUNT HAD BEEN ALLOWED. MOREOVE R, THE DISCOUNT HAD REDUCED THE PURCHASES, THE ADDITION WOULD MAKE DOUBLE, THEREFORE, HE DELETED THE ADDITION. 12.2 WITH REGARD TO CASH PAYMENT OF RS. 54,300/- WR ONGLY TAKEN BY THE ASSESSING OFFICER AT RS. 53,300/-. THE LD CIT(A) HELD THAT THE CASH PAYMENT HAD NOT BEEN PROVED, THUS THE CORRESPONDING PURCHASES TO THESE PAYMENTS ARE NOT GENUINE, THEREFORE, HE CONFI RMED THE ADDITION. THE ASSESSEE MADE PAYMENT THROUGH CHEQUE T O M/S K.N. RAO FABRICS FOR RS. 52,500/-, WHICH HAS NOT BEEN RE FLECTED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT. IN ABSENCE OF ANY PROOF OR REFLECTION FROM M/S K.N. RAO FABRICS THAT THE SAID PAYMENT HAD NOT BEEN RECEIVED FROM THE APPELLANT AND EXPLAINED, THU S REMAINED UNEXPLAINED. THEREFORE, HE CONFIRMED THE ADDITION OF RS. 52,500/-. 12.3 REGARDING 40A(3), HE HAS CONSIDERED THE EVIDEN CE FURNISHED BY THE ASSESSEE THAT THE COPY OF BILLS IN SUPPORT OF P URCHASES ALONGWITH TRANSPORT RECEIPT, THE ASSESSEE ALSO SUBMITTED A ST ATEMENT OF SALE/PURCHASE AND GROSS PROFIT FOR THE LAST THREE Y EARS AND YEAR UNDER APPEAL. THE COPY OF THE RETURN, DETAIL OF PURCHASES, COPY OF CASH BOOK. IN CASE OF VARIOUS PARTIES MAINTAINED IN THE APPEAL ORDER. AFTER 17 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL CONSIDERING ALL THE EVIDENCES FURNISHED BY THE APPE LLANT HE HELD THAT THE PROVISIONS OF SECTION 140A(3) IS APPLICABLE ON THE TRANSACTION OF RS. 12,00,140/-, RS. 3,78,734 AND RS. 4,55,834/- AN D REMAINING ADDITION OF RS. 29,99,836/- WAS DELETED. 13. NOW BOTH ARE IN APPEALS BEFORE US. THE LD DR HAS VEHEMENTLY ARGUED THAT THE LD CIT(A) HAS ACCEPTED THE ADDITIONA L EVIDENCE U/S 46A WITHOUT GIVING ANY FINDING IN HIS APPEAL ORDER F OR ADMITTING THE ADDITIONAL EVIDENCE AND ALSO HAS NOT CALLED FOR A R EMAND REPORT, THEREFORE, IT IS VIOLATION OF THE PRINCIPLES OF NAT URAL JUSTICE. ACCORDINGLY, HE PRAYED TO SET ASIDE THESE TWO APPEAL S TO THE ASSESSING OFFICER TO RECONSIDER THE ADDITION EVIDEN CE FURNISHED BEFORE THE LD CIT(A), WHICH HAS BEEN FAIRLY ACCEPTED BY THE LD AR OF THE ASSESSEE. 14. WE FIND MERIT IN THE ARGUMENTS OF THE LD DR AS WELL AS ACCEPTANCE OF THE LD AR, THEREFORE, WE SET ASIDE THE REVENUES APPEAL AS WELL AS THE ASSESSEES APPEAL TO THE ASSESSING OF FICER TO RECONSIDER THE ADDITIONAL EVIDENCE FURNISHED BEFORE THE LD CIT (A). THE ASSESSEE IS ALSO DIRECTED TO COOPERATE THE ASSESSING OFFICER AND ASSESSING OFFICER IS ALSO DIRECTED TO PROVIDE REASONABLE OPPO RTUNITY OF BEING 18 ITA 203/ASR/2013, C.O. 06/ASR/2014, 404 & 176/ASR/2013 DCIT VS. RANJANA AGGARWAL HEARD TO THE ASSESSEE. ACCORDINGLY BOTH THE CASES A RE SET ASIDE TO THE ASSESSING OFFICER FOR DE NOVO. 15. IN THE RESULT, ALL THE THREE APPEALS AS WELL AS C.O. ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 16.09.2 015. SD/- SD/- (A.D. JAIN) (T. R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16.09.2015. RANJAN* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT/JCIT,CIRCLE/RANGE-2, JAMMU. 2. THE RESPONDENT- MRS. RANJANA AGGARWAL/MRS. VEENA A GGARWAL 3. THE CIT 4. THE CIT(A) 5. DR, ITAT, AMRITSAR. 6. GUARD FILE (ITA NO. 203/ASR/2013, C.O. 06/ASR/20 14, & 204 & 176/ASR/2013). BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.