The ACIT, Circle-6, Surat V. M/s. J.B. Exports, Surat

ITA 2126/AHD/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80457 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 03-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Income from undisclosed sources; Difference of opinion; Reason to believe; Change of opinion
• Section: 69C; 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2126/AHD/2008 ( / ASSESSMENT YEAR : 2004-05) ASST.COMMISSIONER OF INCOME-TAX CIRCLE-6 SURAT / VS. M/S.J.B. EXPORTS NEAR KUMBARIA BUS SAND KADODARA ROAD KUMBHARIA, SURAT ' ./ ./ PAN/GIR NO. : AABIJ 9320 M ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '%( / APPELLANT BY : SHRI SUBHASH BAINS, CIT- DR &''%)( / RESPONDENT BY : SHRI S.N. SOPARKAR WITH MS.URVASHI SHODHAN, ARS *) / DATE OF HEARING 11/09/2014 +,-.) / DATE OF PRONOUNCEMENT 30/10/2014 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-IV, SURAT (CIT(A) IN SHORT) DATED 31/03/2008 PERTAINING TO ASSESSMENT YEAR (AY) 2004-05. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN CONSIDERING THE RE OPENING OF THE ASSESSMENT ILLEGAL AND UNLAWFUL MADE BY THE ASSESSI NG OFFICER. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 2 - [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.3,14,37,602/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES FOR NON GENUINE CLAIM OF P URCHASE EXPENSES MADE FROM M/S.ASHOK SYNTHETICS. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A)-IV, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A)-IV, SURAT MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS REOPENED AND THE ASSESSMENT U/S.143 R.W.S.147 OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED V IDE ORDER DATED 28/12/2007, THEREBY THE ASSESSING OFFICER (AO IN SH ORT) MADE ADDITION OF RS.3,14,37,602/- ON ACCOUNT OF THE BOGUS PURCHA SES TREATED AS INCOME FROM UNDISCLOSED SOURCES. AGAINST THIS, THE ASSES SEE FILED AN APPEAL BEFORE THE LD.CIT(A), RAISING VARIOUS GROUNDS INCLU DING THE GROUND AGAINST VALIDITY AND ILLEGALITY FOR REOPENING OF TH E ASSESSMENT. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, ALLOWED THE APPEAL, THEREBY THE ADDITION MADE BY TH E AO WAS DELETED. NOW THE REVENUE IS IN APPEAL BEFORE US. 3. THE EFFECTIVE GROUND IN REVENUES APPEAL IS AGAI NST THE DELETION OF ADDITION BY THE LD.CIT(A). THE LD.CIT-DR SHRI SUB HASH BAINS SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH ERE WAS NO ILLEGALITY FOR REOPENING OF THE ASSESSMENT AND SUBMITTED THAT THE AO HAD RIGHTLY MADE ADDITION IN RESPECT OF THE PURCHASES. HE REIT ERATED THE SUBMISSIONS MADE IN THE STATEMENT OF FACTS AND THE RELEVANT POR TIONS READ AS UNDER:- ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 3 - 6. THE DECISION OF THE LD.CIT(A), SURAT DELETING THE ADDITION ON ACCOUNT OF PURCHASES OF RS.3,14,37,602/- MADE FROM M/S.ASHOK SYNTHETICS IS NOT ACCEPTABLE. THE LD.CIT(A), SURAT HAS ERRED IN ACCEPTING THE VALIDITY OF VARIOUS ARGUMENTS SUBMITT ED BY THE ASSESSEE IN SUPPORT THE GENUINENESS OF ALLEGED PURC HASE TRANSACTIONS MADE WITH M/S.ASHOK SYNTHETICS OF HISA R. HE HAS OMITTED THE MOST IMPORTANT FACT THE SAID SUPPLIER W AS NOT ALL IN EXISTENCE IN F.Y. 2003-04 IN WHICH THE TRANSACTIONS WERE CLAIMED TO BE MADE. 7. THE AO HAD CORRECTLY MADE THE ADDITION IN VIEW OF FACTUAL ANALYSIS OF TRANSACTIONS MADE WITH M/S.ASHOK SYNTHE TICS BY THE ASSESSEE WHICH REVEALS THAT (1) NOTICE U/S.133(6) ISSUED TO THE ALLEGED SUPPLIER P ARTY RETURNED UNSERVED. THE INCOME-TAX UNIT OF HISAR HA D ALREADY FOUND THE SUPPLIER AS NON-GENUINE. THE ASSESSEE, ALSO COULD NOT PRODUCE ANY ONE IN THE WHO LE PROCEEDINGS WHO COULD CONFIRM THE TRANSACTIONS AND SUPPLY OF GOODS. (2) THE INSPECTOR HAD INQUIRED ON THE ADDRESS OF SURAT, OBTAINED FROM THE BANK ACCOUNT OF M/S.ASHOK SYNTHET ICS AND NOBODY HAD BEEN FOUND ON THAT ADDRESSES. THUS, IT LOOKS VERY SUSPICIOUS LIKE A WEB THAT FIRSTLY, THE BANK ACCOUNT OF THE SUPPLIER WAS OPENED IN SURAT AND SEC ONDLY THE SUPPLIER IS NOT RESPONDING FROM ANY ADDRESSES. (3) THIS WEB HAD ITS OWN LIMITATION AND HAD BEEN DESTRO YED BY THE CLINCHING EVIDENCE GATHERED FROM THE BANK INQUIRY. (4) THE BANK STATEMENT, XEROX COPIES OF CHEQUES ALONG W ITH OPENING FORMS WERE OBTAINED FROM THE BANK AND IT WA S FOUND THAT THE MONEY HAD BEEN ACTUALLY CIRCULATED A ND ROUTED THROUGH THEIR ACCOUNTS. (5) THUS, THE AO ESTABLISHED THAT ALL THE TRADING TRANS ACTION WITH M/S.ASHOK SYNTHETICS WAS JUST A BUSINESS FAAD E AND EVERY SUPPORTIVE DOCUMENTS, AS MENTIONED BY THE ASSESSEE IN ITS SUBMISSIONS WERE NAMELY PART OF A M AKE BELIEVE ARRANGEMENTS. THUS, THE ACTION OF THE AO I N ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 4 - MAKING THE ADDITION ON ACCOUNT OF PURCHASES OF RS.3,14,37,602/- FROM M/S.ASHOK SYNTHETICS IS IN OR DER AND THE DECISION OF THE LD.CIT(A), SURAT IS NOT ACCEPTABLE. 3.1. HE SUBMITTED THAT ON FURTHER ENQUIRY, THE AO FOUND THAT THE SUPPLIER OF THE ASSESSEE-FIRM, NAMELY M/S.ASHOK SYNTHETICS D ID NOT ACCEPT AND THE SUBMISSIONS MADE BY THE SO-CALLED SUPPLIER WAS HOLD ING A BANK ACCOUNT IN THE SURAT CITY ITSELF AND FROM THE BANK IT TRANS PIRED THAT THE PAYMENTS SO MADE WAS THROUGH SHROFF, WHEREIN THE BINDAL OR JB MARKED ON THE BACK SIDE OF THE CHEQUES. HE SUBMITTED THAT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS A LETTER WAS SENT TO THE CON CERNED CENTRAL EXCISE AUTHORITIES AND THE REPLY FROM THE SAID AUTHORITY WAS RECEIVED BY THE AO AFTER PASSING OF THE ASSESSMENT ORDER. THEREFORE, HE SUBMITTED THAT THE ASSESSMENT WAS REOPENED ON THE BASIS OF THE NEW MAT ERIAL WHICH WAS NOT AVAILABLE WITH THE AO DURING THE REGULAR COURSE OF ASSESSMENT PROCEEDINGS. 3.2. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSE E SHRI S.N.SOPARKAR STRONGLY SUPPORTED THE ORDER OF THE LD.CIT(A) AND S UBMITTED THAT ALL DETAILS WERE FURNISHED BEFORE THE AO DURING THE ORI GINAL ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THE ASSESSEE HAD GI VEN ALL THE DETAILS AND CONFIRMATION FROM ONE SHRI SATISH TUTEJA AND SMT. V EENA TUTEJA W/O.LATE SHRI ASHOK KUMAR TUTEJA AS ITS PROPRIETOR. HE SUBM ITTED THAT SO FAR AS THE ASSESSEE IS CONCERNED, HE HAD GIVEN ALL THE DET AILS RELATED TO THE TRANSACTION. HE SUBMITTED THAT THE MATERIAL WAS TR ANSPORTED THROUGH TRANSPORTER, NAMELY, MOONGIPA ROADWAYS PVT.LTD. H E FURTHER ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 5 - SUBMITTED THAT ALL PAYMENTS WERE MADE BY WAY OF A/ C. PAYEE CHEQUES / PAY ORDERS AND THE PAYMENTS WERE DULY CREDITED IN TO THE ACCOUNTS OF THE SUPPLIERS. HE FURTHER SUBMITTED THAT THE ASSE SSEE IS AN EXPORTER AND ALL ACCOUNTS RELATED TO SELLERS HAVE BEEN ACCEPTED BY T HE EXCISE DEPARTMENT WAS WELL AS INCOME TAX DEPARTMENT. THEREFORE, HE S UBMITTED THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. HE FU RTHER RELIED ON THE DECISION OF COORDINATE BENCH (ITAT AHMEDABAD BENCH A) RENDERED IN THE CASE OF SHRI TOTARAM B.SHARMA VS. ITO (CROS S-APPEALS) IN ITA NOS.2239 & 2291/AHD/2004 FOR AY 2001-02 DATED 25/ 01/2008. HE SUBMJITTED THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF TOTARAM B.SHARMA TRAVELLED TO THE HONBLE GUJARAT HIGH COUR T IN TAX APPEAL NOS.1344 AND 1355 OF 2008, DATED 09/02/2010, WHEREI N THE JURISDICTIONAL HIGH COURT HAS UPHELD THE DECISION OF THE TRIBUNAL. HE SUBMITTED THAT THE AO HAS WRONGLY APPLIED THE JUDGEMENT OF THE HON BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. LA-MEDIA REPO RTED AT (2001) 250 ITR 575 (DEL). HE SUBMITTED THAT THE HONBLE DELH I HIGH COURT IN THE SUBSEQUENT JUDGEMENT RENDERED IN THE CASE OF CIT VS . HI LUX AUTOMOTIVE (P.) LTD. REPORTED AT (2009) 183 TAXMAN 260 (DELHI) HAS UPHELD THE DECISION OF THE TRIBUNAL. HE SUBMITTED THAT ONCE THE ASSESSEE HAD GIVEN ALL THE DETAILS REGARDING SUPPLY OF MATER IAL, ASSESSEE DISCHARGED ITS ONUS. NOW, IT WAS ON THE AO TO PROVE THE PURCH ASES SO MADE WERE NOT ACCOUNTED OR UNDISCLOSED FOR THE PURPOSE OF INV OKING THE PROVISIONS OF SECTION 69C OF ACT. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 6 - 3.3. IN REJOINDER, THE LD.CIT-DR SUBMITTED THAT THE AO HAS GIVEN A REASONING THAT THE MONEY HAS COME BACK TO THE ASSES SEE THROUGH A CIRCUITOUS ROUTE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENTS RELIED UPON BY THE LD.SR. COUNSEL FOR THE ASSESSEE. WE FIND THAT NOTICE FOR RE-OPENING DATED 29/03/2007 WAS SERVED UPON THE ASSESSEE. IN RESPONSE THEREOF, THE ASSESSEE FILED A LETTER DATED 03/07/2007, WHEREIN IT HAS BEEN SUBMITTED THA T THE ASSESSEE MAY BE SUPPLIED COPY OF JUSTIFIABLE GROUNDS AND REASONS FO R REOPENING THE ASSESSMENT VALIDLY CONCLUDED U/S.143(3) OF THE ACT. AS PER THE CONTENTION OF THE ASSESSEE AND FINDING GIVEN BY THE LD.CIT(A) THAT THE REASONS WERE SUPPLIED TO THE ASSESSEE ONLY ON 27/12 /2007 AND RE- ASSESSMENT WAS COMPLETED ON THE NEXT DATE I.E. ON 2 8/12/2007. THE REVENUE HAS NOT PLACED ANY MATERIAL FOR CONTROVERTI NG THE FINDING OF THE LD.CIT(A). THEREFORE, THE FINDING OF THE LD.CIT(A) THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO REBUT THE REASONS R ECORDED FOR REOPENING THE ASSESSMENT IS JUSTIFIED. FURTHER, WE FIND THAT THE AO, FOR RE-OPENING THE ASSESSMENT PROCEEDINGS RECORDED THE FOLLOWING R EASONS ON 28/03/2007. IN THE COURSE OF PERUSAL OF RECORDS, IT IS FOUND T HAT THE ABOVEMENTIONED ASSESSEE FIRM HAS MADE HUGE PURCHASE TRANSACTION WI TH SOME M/S.ASHOK SYNTHETICS, HISAR. THE SUPPLIER PARTY IS THE ONLY ONE OUTSIDER PARTY FROM WHICH THE SAID FIRM HAS PURCHASED CLOTHS; OTHE RWISE ALL PURCHASES HAVE BEEN MADE IN THE LOCAL MARKET OF SURAT. SINCE SURAT CITY ITSELF IS A BIG MARKET FOR SUPPLYING FABRICS, THEREFORE THE SAI D TRANSACTION HAS CREATED A DOUBT IN THE MIND OF THE UNDERSIGNED. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 7 - 2. IN THE MEAN TIME, A REFERENCE HAS BEEN RECEIVED BY THE OFFICE FROM THE INCOME-TAX OFFICER, HISAR (WHO HAS THE JURISDIC TION OVER M/S.ASHOK SYNTHETICS) DURING THE MONTH OF MARCH, 2007. THE R ELEVANT EXTRACT OF THAT REFERENCE LETTER IS REPRODUCED AS BELOW: LETTERS WERE WRITTEN TO THE CENTRAL EXCISE DEPARTM ENT AND HARYANA FINANCIAL CORPORATION IN ORDER TO VERIFY TH E STATE OF AFFAIRS, GENUINENESS/INGENUINENESS OF THE TRANSACTI ONS, EXISTENCE / NON-EXISTENCE OF THE ABOVE FIRM (M/S.ASHOK SYNTHE TICS). IN RESPONSE THERETO, THE ASSISTANT COMMISSIONER, CENTR AL EXCISE, DIVISION HISAR HAS SUBMITTED PHOTO COPIES OF SHOW-C AUSE NOTICE, ISSUED TO M/S.ASHOK SYNTHETICS REGARDING AVAILING O F DEEMED CREDIT OF RS.12262846/- @ 8.63%, WHEN THE ABOVE FIR M WAS NOT IN EXISTENCE BECAUSE ITS PROPRIETOR HAD DIED IN 199 9 AND NO BODY HAD OBTAINED FRESH CENTRAL EXCISE REGISTRATION. SH OW CAUSE NOTICE FURTHER REVEALS THAT ON 27.04.2002 SMT.VEENA TUTEJA W/O.SHRI SATISH TUTEJA AS ITS PROPRIETOR AND GAVE L AND, BUILDING, PLANT AND MACHINERY BELONGING TO M/S.ASHOK SYNTHETI CS TO M/S.KASHISH TEXTILES ON RENT FOR TWO YEARS. M/S.KA SHISH TEXTILES WAS ALLOTTED CENTRAL EXCISE REGISTRATION ON PLOT NO .53, SECTOR 27-28, HISAR. AGAIN IN JUNE 2003, SMT.VEENA TUTEJA W/O.LATE SH.ASHOK KUMAR TUTEJA ENTERED INTO AN AGREEMENT WIT H M/S.PARNAMI CHEMICALS AND GAVE PLANT, LAND BUILDING AND MACHINERY AT PLOT NO.53, SECTO 27-28, HISAR BELONGI NG TO M/S.ASHOK SYNTHETICS TO M/S.PARNAMI CHEMICALS ON RE NT FOR A PERIOD OF FIVE YEARS. M/S.PARNAMI CHEMICALS TOOK P HYSICAL POSSESSION OF LAND, BUILDING, PLANT AND MACHINERY I N JUNE 2003. M/S.KASHISH TEXTILES SURRENDERED CENTRAL EXCISE REG ISTRATION OF PLOT NO.53, SECTOR 27-28. HISAR ON 31.07.2003 AND TOOK CENTRAL EXCISE REGISTRATION ON PLOT NEAR GATE NO.2, VIDYUT NAGAR, HISAR ON 31.07.2003. ON 21.08.2003, M/S.ASHOK SYNTHETICS WAS ISSUED PAN BASED REGISTREATION CERTIFICATE NO.ABQPT3868XM0 01 WITH SMT VEENA TUTEJA WHO LATE SHRI ASHOK KUMAR TUT EJA AS ITS PROPRIETOR. SMT.VEENA TUTEJA HAD OBTAINED THIS REG ISTRATION WITHOUT DISCLOSING THE FACT TO THE DEPARTMENT THAT SHE HAS ALREADY HANDED OVER THE PHYSICAL POSSESSION AND CON TROL OF PLANT, LAND, BUILDING AND MACHINERY BELONGING TO M/ S.ASHOK SYNTHETICS TO M/S.PARNAMI CHEMICALS IN JUNE 2003. IT IS FURTHER SUBMITTED THAT AS PER ASSISTANT COMM ISSIONER (PREV), THANE I, LETTER F.NO.V/PI/TH-I/30/2003/86 9 DATED ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 8 - 21.05.2004 ENQUIRY REGARDING THE MANUFACTURERS/PART IES WHO HAD SUPPLIED THE TEXTILE FABRICS TO M/S.ASHOK SYNTH ETICS WERE MADE. ON ENQUIRIES, IT WAS HELD BY HIM THAT ALL TH E FIRMS WERE BOGUS BECAUSE ON THE ADDRESSES GIVEN THESE FIRMS WE RE NOT FOUND IN EXISTENCE. SO WHEN THE RAW MATERIAL WAS NOT PUR CHASED, HOW THE MANUFACTURING OF CLOTHS COULD BE MADE. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CAS E, IT IS SUBMITTED THAT WHEN THE RAW MATERIAL (GREY FABRICS) WAS NOT RECEIVED BY THE FIRM M/S.ASHOK SYNTHETICS, HOW THE FINISHED GOODS COULD BE GENUINE. MOREOVER, THIS FIRM WAS NO T IN EXISTENCE DURING THE BILLING PERIOD 1.4.2003 TO 31. 03.2004 (BILL DATED 12.09.2003) AND TRANSACTIONS WORTH RS.3143760 2 BETWEEN M/S.ASHOK SYNTH3ETICS, HISAR AND JB EXPORTS, SURAT SEEM TO BE INGENUINE. 3. AFTER GETTING THE ABOVE REFERENCE, THE DOUBT OF THE UNDERSIGNED TRANSFORMED INTO REASON TO BELIEVE THAT THE PURCHAS ES MADE FROM M/S.ASHOK SYNTHETICS ARE NOT GENUINE. 4. THEREFORE, IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT FOR A.Y. 2004-05 IN THE CASE OF ABOVEMENTIONED ASSESSEE. IN VIEW OF THE REASON RECORDED ABOVE, AS PER THE PR OVISIONS OF THE SECTION 147 R.W.S. 148 OF THE INCOME TAX ACT, THE C ASE IS REOPENED. 4.1. THE CONTENTION OF LD.SR.COUNSEL FOR THE ASSESS EE DURING THE COURSE OF HEARING WAS THAT AGAINST THESE REASONS THE ASSES SEE FILED OBJECTIONS AND SUCH OBJECTIONS OUGHT TO HAVE BEEN DECIDED BY THE A O BY WAY OF A SEPARATE ORDER IN VIEW OF THE JUDGEMENT OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF TOTARAM B.SHARMA IN TAX APPEAL NOS.1344 & 1355 OF 2008(SUPRA). THE AO HAS NOT GIVEN ANY FINDING IN RESPECT OF JUSTIFIABILITY OF THE REOPENING OF THE ASSESSMENT I N THE ASSESSMENT ORDER DATED 28/12/2007. THEREFORE, WE DO NOT FIND ANY I NFIRMITY IN THE ORDER ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 9 - OF THE LD.CIT(A). WE FIND THAT THE AO HAS MADE ADD ITION ON THE BASIS OF THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE DE PARTMENT IN RESPECT OF THE SUPPLIER OF THE ASSESSEE; NAMELY M/S.ASHOK S YNTHETICS AS PER THE REFERENCE RECEIVED FROM THE CENTRAL EXCISE DEPARTME NT, IT IS STATED THAT THE PROPRIETOR OF M/S.ASHOK SYNTHETICS HAD DIED IN 1999. IT IS ALSO STATED THAT SMT.VEENA TUTEJA, WIFE OF SHRI ASHOK TU TEJA HAD ENTERED INTO AN AGREEMENT WITH M/S. KASHISH TEXTILES WITH SHRI S ATISH TUTEJA AS ITS PROPRIETOR AND GAVE LAND, BUILDING, PLANT AND MACHI NERY BELONGING TO M/S.ASHOK SYNTHETICS TO M/S.KASHISH TEXTILES ON REN T FOR 2 YEARS. IT IS FURTHER STATED THAT M/S.KASHISH TEXTILES WAS ALLOTT ED CENTRAL EXCISE REGISTRATION ON PLOT NO.53, SECTOR 27-28, HISAR. A GAIN IN JUNE 2003, SMT.VEEENA TUTEJA WIFE OF ASHOKUMAR TETEJA ENTERED INTO AN AGREEMENT WITH M/S.PRANAMI CHEMICALS AND GAVE PLANT, LAND & B UILDING AND MACHINERY AT PLOT NO.53, SECTOR 27-28, HISAR BELONG ING TO M/S.ASHOK SYNTHETICS TO M/S.PRANAMI CHEMICALS ON RENT FOR A P ERIOD OF 5 YEARS. M/S.PARNAMI CHEMICALS TOOK PHYSICAL POSSESSION OF L AND, BUILDING, PLANT & MACHINERY IN JUNE, 2003. M/S.KASHISH TEXTILES SU RRENDERED CENTRAL EXCISE REGISTRATION OF PLOT NO.53, SECTOR 27-28, HI SAR ON 31-7-2003 AND TOOK CENTRAL EXCISE REGISTRATION ON PLOT NEAR GATE NO.2, VIDYUT NAGAR, HISAR ON 31.7.2003. ON 21/08/2003 M/S.ASHOK SYNTH ETICS WAS ISSUED PAN BASED REGISTRATION CERTIFICATE NO.ABQPT 3868 XM 001 WITH SHRI VEENA TUTEJA W/O. LATE SHRI ASHOK KUMAR TUTEJA AS I TS PROPRIETOR. 4.2. FROM THE AFORESAID INFORMATION OF THE CENTRAL EXCISE DEPARTMENT, IT IS EVIDENT THAT PLANT & MACHINERY BELONGING TO M /S.ASHOK SYNTHETICS WAS BEING USED IN ONE FORM OR ANOTHER FROM THE SAME PREMISES. THIS IS ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 10 - NOT IN DISPUTE. THE LD.SR.COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS THE POWER OF ATTORNEY GIVEN BY SMT.VEENA TU TEJA TO SHRI SATISHKUMAR TUTEJA WHICH IS ENCLOSED AT PAGE NOS.47 & 48 OF THE PAPER- BOOK FILED BY THE ASSESSEE. IN THE SAID POWER OF A TTORNEY, SMT.VEENA TUTEJA HAS CLAIMED AS PROPRIETOR OF M/S.ASHOK SYNTH ETICS. THE SAID POWER OF ATTORNEY WAS EXECUTED ON 22/04/2002 AND TH E SAME WAS DULY NOTARIZED. THE LD.SR.COUNSEL FOR THE ASSESSEE HAS ALSO DREW OUR ATTENTION TOWARDS LETTER OF SHRI SATISHKUMAR TUTEJA DULY NOTA RIZED WHICH IS ENCLOSED AT PAGE NOS.40 TO 46 OF THE PAPER-BOOK, WH EREIN HE HAS CONFIRMED THAT THE MATERIAL WAS, IN FACT, SUPPLIED TO THE ASSESSEE-FIRM. HOWEVER, THE AO WITHOUT CONSIDERING THESE MATERIAL CAME TO THE CONCLUSION THAT ALL THE TRADING TRANSACTIONS WITH M /S.ASHOK SYNTHETICS WAS JUST A BUSINESS FAADE AND EVERY SUPPORTIVE DOC UMENTS AS MENTIONED BY THE ASSESSEE IN ITS SUBMISSIONS WERE NAMELY PAR T OF A MAKE BELIEVE ARRANGEMENTS. THE AO HAS NOT RECORDED IN THE ASSES SMENT ORDER AS TO HOW THE POWER OF ATTORNEY GIVEN BY SMT.VEENA TUTEJA AND CLAIMING AS PROPRIETOR OF ASHOK SYNTHETICS IS NOT CORRECT WITHO UT EXAMINING HER AND HOW THE STATEMENT OF SHRI SATISHKUMAR TUTEJA IN THE FORM OF LETTER DULY NOTARISED IS NOT CORRECT. FROM THE MATERIAL, IT IS EVIDENT THAT THE PLANT & MACHINERY ARE BELONGING TO M/S.ASHOK SYNTHETICS WAS IN USE. THE AO HAS NOT GIVEN ANY FINDING IN RESPECT OF THE NATURE OF ACTIVITY CARRIED OUT BY THE ASSESSEE BY SUCH PLANT & MACHINERY. THEREFO RE, IN OUR CONSIDERED VIEW, THE AO HAS FAILED TO GIVE A FINDING ON MATERI AL ASPECT AND IGNORED THE FACT THAT RIGHT FROM THE YEAR 1999 THE PLANT & MACHINERIES BELONGING TO M/S.ASHOK SYNTHETICS WAS IN USE. THE ASSESSMENT HAS BEEN MADE SUBSTANTIALLY ON THE BASIS OF INFORMATION GIVEN BY THE CENTRAL EXCISE ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 11 - AUTHORITIES IN RESPECT OF THE SUPPLIER OF THE ASSES SEE-FIRM. THE AO HAS OBSERVED VIDE PARA-15 OF HIS ASSESSMENT ORDER AS UN DER:- 15. IT IS OBSERVED FROM THE ANALYSIS OF BANK STAT EMENTS OF THE ASSESSEE AND M/S.ASHOK SYNTHETICS AND CHEQUES ISSUE D BY BOTH PARTIES THAT, IN FACT, THE MONEY HAS BEEN ACTUALLY CIRCULATED AND ROUTED THROUGH THEIR ACCOUNTS. EVIDENTLY, THE ULTI MATE BENEFICIARY OF THE MONEY CIRCULATION IS OUR ASSESSEE. APPARENT LY ALL CHEQUE PAYMENTS MADE BY THE ASSESSEE FIRM GET DEPOSITED IN THE BANK ACCOUNT OF M/S.ASHOK SYNTHETICS, MAINTAINED AT SURA T. MAINTENANCE OF BANK ACCOUNT IN SURAT, INSTEAD OF HI SAR ITSELF IS DOUBTFUL. IT IS REFLECTED THAT THE CONCERN WAS JUS T A FACILITATOR FOR SOME BIG PARTIES LIKE OUR ASSESSEE. FROM THE SAME ACCOUNT, M/S.ASHOK SYNTHETICS HAD ISSUED CHEQUES TO SOME COM MON NAMES IN THE GARB OF PAYMENTS FOR FABRICS PURCHASE. HOWE VER, ALL CHEQUES IN CROSS (A/C PAYEE CANCELLED) HAD BEEN R OUTED THROUGH SHROFFS (CHEQUE DISCOUNTERS), WHO HAD EXCHANGED THO SE CHEQUES WITH CASH IN FAVOUR OF JB EXPORTS. MOST OF THESE D ISCOUNTED CHEQUES HAVE THE INITIALS OF JB OR BINDAL (BIN DAL IS NEW BRAND NAME OF J B EXPORTS) EITHER IN GUJARATI VERNA CULAR OR IN ENGLISH AT THE BACK SIDE OF CHEQUES, OBVIOUSLY MARK ED BY THE SHROFF FOR IDENTIFICATION WITH THE CLIENT I.E. J B EXPORT. THESE TRANSACTIONS COMPLETELY ESTABLISHES THE BUSINESS OF ENTRY MAKI NG THROUGH ALL VALID CHANNE4LS INVOLVING BANKS. 4.3. IN THE ASSESSMENT ORDER, THE AO HAS NOT DOUBTE D OR GIVEN ANY FINDING IN RESPECT OF THE SALE MADE BY THE ASSESSEE -FIRM. HOWEVER, THE PURCHASES FROM M/S.ASHOK SYNTHETICS CLAIMED BY THE ASSESSEE-FIRM HAVE BEEN TREATED AS INCOME FROM UNDISCLOSED SOURCES. T HE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT THE FACTS OF THE PRESE NT CASE ARE SIMILAR TO THE FACTS OF THE CASE OF AKRUTI DYEING AND PRINTING PV T.LTD. VS. ACIT IN ITA NO.2752/AHD/2006 (ITAT AHMEDABAD) AND ALSO OF THE C ASE OF RAJESH P.SONI VS. ACIT REPORTED AT (2006) 100 TTJ (AHD) 89 2. THIS FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL. THE ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 12 - ASSESSEE RELIED ON THE DECISION OF HONBLE COORDINA TE BENCH RENDERED IN THE CASE OF TOTARAM B.SHARMA IN ITA NOS.2239 & 2291/AHD/2004(SUPRA), WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS VARIOUS DECISI ONS RELIED UPON BY THE PARTIES, BUT BEFORE CONSIDERING MERITS OF THE CASE, ARE OF THE OPINION THAT FIRST IT IS NECESSARY TO CONSIDER THE CONCEPT AS TO THE S O-CALLED BOGUS PURCHASES AND ITS IMPACT UPON THE TAXABLE INCOME OF AN ASSESS EE. 9.1. USUALLY, THE REVENUE TAKES A STAND THAT IF THE PARTIES, FROM WHOM THE ASSESSEE AS CLAIMED TO HAVE MADE PURCHASES OF GOODS FOR RE-SALE OR OF RAW- MATERIAL TO BE CONSUMED IN MANUFACTURING ITS OWN GO ODS, ARE NOT FOUND AVAILABLE AT THE ADDRESS GIVEN BY THE ASSESSEE OR I F THE ASSESSEE IS NOT ABLE TO PRODUCE EVIDENCE TO THE SATISFACTION OF THE ASSESSI NG OFFICER THAT THE RELEVANT PURCHASES WERE, IN FACT, MADE FROM THE SAME PARTIES , FROM WHOM HE IS CLAIMING TO HAVE PURCHASED, SUCH PURCHASES ARE BOGU S/UNVERIFIABLE/INGENUINE AND PROCEEDS TO MAKE ADDITION TO THAT EXTENT CONSID ERING THE SAME AS HAVING BEEN PURCHASED WITH THE UNDISCLOSED INVESTMENT AND THIS STAND IS TAKEN, IN SPITE OF THE FACT THAT THE ASSESSEE HAS, ON ONE HAN D, DULY ACCOUNTED FOR THE QUANTITY AS WELL AS VALUE OF SUCH PURCHASES, HAS AC COUNTED FOR THE CORRESPONDING SALES IN QUANTITY AS WELL AS IN VALUE (IF SOLD), AND IF NOT SOLD, THEN HAS ACCOUNTED FOR THE QUANTITY AS WELL AS THE VALUE OF SUCH PURCHASES IN ITS CLOSING STOCK AND, ON THE OTHER HAND, HAS ACCOU NTED FOR THE PAYMENTS FOR SUCH PURCHASES AS WELL AS RECEIPT AGAINST SALES (CO RRESPONDING TO SUCH PURCHASES) IN THE BOOKS OF ACCOUNT. IN OTHER WORD S, ONCE THE ASSESSING OFFICER IS UNABLE TO TRACE THE SELLER OR ASSESSEE I S FOUND TO BE NOT IN A POSITION TO FURNISH EVIDENCE SATISFACTORY FOR ASSESSING OFFI CER TO ESTABLISH THAT THE PURCHASE FROM THE PERSONS FROM WHOM THE ASSESSEE HA S CLAIMED TO HAVE MADE AND HAD PAID THE PURCHASE PRICE, IN FACT, WERE MADE FROM THOSE VERY PERSONS, THE REVENUE, WITHOUT FAIL, CONSIDERS SUCH PURCHASES AS BOGUS OR UNVERIFIABLE AND PROCEEDS TO MAKE ADDITION TO THE EXTENT OF SUCH PURCHASE ON THE GROUND THAT INVESTMENT IN SUCH PURCHASES HAS BEEN MADE FRO M UNDISCLOSED SOURCES. 9.2. THE APPROACH OF THE REVENUE, IN OUR OPINION, A ND AS EXPLAINED HEREUNDER, BEING CONTRARY TO THE ACCOUNTING SYSTEM AS WELL AS THE LAW, IS NOT SUSTAINABLE. (I) FIRST OF ALL, LET US CONSIDER THE EFFECT OF SO-CAL LED BOGUS/INGENUINE PURCHASES WITH THE HELP OF AN EXAMP LE AS UNDER:- EXAMPLE I QUANTITY VALUE(RS.) SUPPOSE, IN A GIVE CASE : ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 13 - OPENING STOCK IS : NIL NIL NIL PURCHASE CLAIMED TO HAVE BEEN MADE, SAY, FROM 3 PARTIES WORTH RS.100/-, RS.150/- & RS.200/- RESPECTIVELY = A + B + C 450/- (QUANTITY-WISE A,B & C OF RS.100,150 & 200 RESPECTIVELY) SALES : (QUANTITY-WISE)/VALUE-WISE = A 150/- C-STOCK (QUANTITY-WISE)/ = B+C 350/- VALUE-WISE (II) ON ENQUIRY BY ASSESSING OFFICER TWO OF THE PARTIES FROM WHOM PURCHASES, I.E. B&C; WERE MADE, ARE NOT TRACEABLE. IN THAT SITUATION PURCHASES FROM B&C ARE CONSIDERED BOGUS, THEN THE TRADING ACCOUNT (AS PER A.O.) SHOULD BE AS UNDER: SINCE PURCHASE B+C ARE BOGUS, THERE IS NO QUESTION OF THESE GOODS BEING EITHER IN THE PURCHASES OR IN SALES OR IN CLO SING STOCK AND, THEREFORE, THE TRADING ACCOUNT SHOULD BE QTY. VALUE QTY. VALUE OPENING STOCK NIL NIL SALES A 150 PURCHASE:- A 100 C STOCK(B+C) NIL GROSS PROFIT 50 ---- ---- TOTAL : 150 TOTAL : 150 FROM ABOVE, WHAT WE FOUND IS THAT THERE IS NO EFFE CT, SO FAR AS ASSESSEES GROSS PROFIT IS CONCERNED AND IF IT IS S O, THEN THERE IS NO EFFECT ON NET PROFIT ALSO, BUT THE QUESTION STILL R EMAINS TO BE CONSIDERED IS THAT WHY THE REVENUE STILL MAKES ADDITION FOR SU CH PURCHASES CONSIDERING THE SAME AS TO HAVING BEEN PURCHASED FR OM UNDISCLOSED INTEREST. THE ANSWER IS THAT SUCH AS ADDITION IS MADE WITHOU T APPLYING MIND TO THE AFFECT OF SUCH FINDINGS AND IT IS SO, B ECAUSE AN ADDITION CAN BE MADE ONLY IF IT IS FOUND THAT PAYMENT OF PRICE F OR SUCH PURCHASE IS NOT RECORDED IN THE BOOKS OF ACCOUNT. IF THE PAYMENT OF PURCHASE PRICE IS FOUND RECORDED IN THE BOOKS OF ACCOUNT, THEN THERE IS NO QUESTION OF MAKING ANY ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 14 - EXAMPLE II :- QTY. VALUE QTY. VALUE SAY, OPENING STOCK NIL NIL SALES A/2 100 PURCHASE:- A 100 C. STOCK A/2 50 (COST PRICE) 50 ----- ----- TOTAL : 150 150 IF THE ASSESSING OFFICERS FINDINGS ARE TO THE PUR CHASES BEING BOGUS, I.E. IF ASSESSEE HAS NOT MADE ANY PURCHASE; IS CONSIDERED, THEN THE TRADING ACCOUNT WILL BE QTY. VALUE QTY. VALUE OPENING STOCK NIL NIL SALES 100 PURCHASES NIL NIL C.STOCK 50 ----- ----- GROSS PROFIT 150 150 IN THE ABOVE SITUATION, THOUGH THERE IS CLOSING ST OCK OF RS.50/- ONLY (BEING AS PER COST PRICE), SALES BEING OF RS.1 00/- ONLY, YET THE G.P. IS RS.150/- WHICH IS A QUITE ABSURD RESULT. HENCE, ONE FORGETS TO SEE THAT IF THERE ARE NO PUR CHASES (IN THE ABOVE EXAMPLE), THEN HOW THERE CAN BE ANY SALE OR C LOSING STOCK AND SINCE THE REVENUE ALWAYS ACCEPTS THE SALES AND THE CLOSING STOCK, NON- ACCEPTANCE OF THE PURCHASES, WHICH ARE DULY ACCOUNT ED FOR IN THE BOOKS, IS NOT JUSTIFIED. THE CREDIT FOR SUCH PURCH ASE HAS TO BE GIVEN. IN THE ABOVE EXAMPLE NO.I OR II, AS THE CASE MAY BE , IF THE ASSESSING OFFICER IS ALLOWED TO MAKE AN ADDITION OF RS.100/- AS UNDISCLOSED INVESTMENT, THEN THE ASSESSEES INCOME WILL BE NET PROFIT + RS.100, WITHOUT ANY CREDIT FOR THE PURCHASES WHICH IS NOT JUSTIFIED EITHER UNDER THE LAW OR UNDER THE NORMAL ACCOUNTING SYSTEM. THEREFORE, WE ARE OF THE OPINION THAT THERE IS NO J USTIFICATION FOR SUCH ADDITION. ADDITION, IN SUCH CASE, CAN BE MADE ONLY IN THE CIRCUMSTANCES AND FOR THE REASONS STATED AS UNDER:- FIRST OF ALL, WE ARE OF THE OPINION THAT ONCE IT IS FOUND THAT THE ASSESSEE HAS DULY RECORDED THE ALLEGED PURCHASES (Q UANTITY AS WELL AS THE VALUE) IN ITS BOOKS OF ACCOUNT AND THE PAYMENT HAS GONE OUT OF BOOKS OF ACCOUNT, THEN THERE IS NO QUESTION OF ASSU MING THE PAYMENT OF PURCHASE PRICE AS HAVING BEEN MADE FROM UNDISCLOSED SOURCES AND, CONSEQUENTLY THERE CANNOT BE ANY ADDITION ON ACCOUN T OF UNDISCLOSED INVESTMENTS IN SUCH PURCHASES. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 15 - (A) IF THE AFORESAID FACT IS COMING OUT FROM THE BOOKS OF ACCOUNT, THEN, THE ADDITION IF ANY, CAN BE MADE ONL Y ON ACCOUNT OF FOLLOWING TWO COUNTS:- (I) IF IT IS ESTABLISHED THAT SALE OF GOODS SO PURCHASE D (IF SOLD) IS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT, OR (II) THE GOODS SO PURCHASED ARE NOT ACCOUNTED FOR IN THE CLOSING STOCK (IF NOT SOLD)., 9.3. IT IS, THEREFORE, CLEAR THAT WHERE THE SALES C ORRESPONDING TO SUCH PURCHASES ARE FOUND RECORDED IN THE BOOKS (IF SOLD) OR ARE FOUND RECORDED IN THE CLOSING STOCK (IF NOT SOLD), THEN T HERE CANNOT BE ANY ADDITION EXCEPT ON THE FOLLOWING COUNTS:- (A) IF THERE IS AN ALLEGATION OF SUPPRESSION OF SALE P RICE OR SUPPRESSION OF VALUE OF CLOSING STOCK AND FOR THAT PURPOSE, THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE AS SESSEE HAS EITHER SUPPRESSED THE SALE PRICE OR THE VALUE O F CLOSING STOCK EITHER QUANTUM-WISE OR VALUE-WISE; MEANING THEREBY THAT UNLESS AND UNTIL ANY OF THESE TWO INGR EDIENTS ARE ESTABLISHED BY THE REVENUE, THERE CANNOT BE ANY ADDITION FOR SO-CALLED BOGUS/INGENUINE PURCHASES. (B) THERE IS ANOTHER WAY OF MAKING ADDITION AND THAT CA N BE ONLY WHEN THE REVENUE IS ABLE TO ESTABLISH THAT THE ASSESSEE HAS INFLATED THE PURCHASES-EITHER BY WAY OF VALUE O R BY WAY OF QUANTITY. BUT, SO FAR AS QUANTITY IS CONCERNED, THE ONUS IS O N THE ASSESSEE TO ESTABLISH THAT WHATEVER QUANTITY WAS PU RCHASES, WAS EITHER SOLD OR WAS AVAILABLE IN CLOSING STOCK. (C) SO FAR AS INFLATION OF PURCHASE PRICE IS CONCERNED, HERE AGAIN, WE ARE OF THE OPINION THAT THE ONUS IS ON TH E REVENUE TO ESTABLISH THIS FACT. (D) ANOTHER WAY OF MAKING ADDITION IN ASSESSEES HANDS CAN BE IF REVENUE SUCCEEDS IN ESTABLISHING THAT THE PURCHA SE PRICE PAID BY THE ASSESSEE THROUGH ITS BOOKS OF ACCOUNT H AS COME BACK TO THE ASSESSEE AND HERE AGAIN, WE ARE OF THE OPINION THAT ONUS IS ON THE REVENUE TO ESTABLISH SUCH A FAC T. 9.4. MEANING THEREBY THAT THERE CANNOT BE ANY ADDIT ION EITHER ON ACCOUNT OF UNDISCLOSED INVESTMENT OR ON ACCOUNT OF UNDISCLOSED SALES OR UNDISCLOSED PROFIT ON THE GROUND THAT SOME PURCH ASES ARE CONSIDERED TO BE BOGUS OR INGENUINE ONLY FOR WANT O F AVAILABILITY OF THE SELLER. ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 16 - 10. FROM THE ABOVE DISCUSSION, WE ARE OF THE OPINIO N THAT IN A GIVEN CASE, IF UNTIL THE REVENUE ESTABLISHES SUCH FACT BY COGENT MATERIAL. 11. COMING TO THE PRESENT CASE, ADMITTEDLY, THE PU RCHASES MADE BY THE ASSESSEES FROM THE RELEVANT FOUR PARTIES, QUANT ITY-WISE AS WELL AS VALUE-WISE HAVE BEEN FOUND TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT, THE PAYMENT FOR SUCH PURCHASES HAS BEEN FO UND TO HAVE BEEN MADE BY CROSSED CHEQUES AND DULY RECORDED IN THE BO OKS OF ACCOUNT, THE SALES CORRESPONDING TO SUCH PURCHASE HAVE BEEN FOUND RECORDED IN THE BOOKS OF ACCOUNT AND IT IS SO BECAUSE REVENUE H AS NOT DOUBTED THE GENUINENESS OF THE SALES, RATHER HAS ACCEPTED THE S AME, THERE IS NO ALLEGATION OF SUPPRESSION OF VALUE OF CLOSING STOCK OR OF THE SALES QUANTITY-WISE OR VALUE-WISE AND THERE IS NO ALLEGAT ION OF INFLATION OF PURCHASES ALSO. IN VIEW OF THESE FACTS, WE ARE OF THE OPINION THAT THERE COULD NOT BE ANY ADDITION ON ANY ACCOUNT. CONSEQUE NTLY, EVEN THE ADDITION SUSTAINED BY THE CIT(APPEALS) ON THE BASIS OF PEAK OF PURCHASES, IN OUR OPINION, IS NOT SUSTAINABLE AND W E DELETE THE SAME. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. REVENUES APPEAL ITA 2291/AHD/2004 13. IT WAS ADMITTED BY THE PARTY, AT THE TIME OF HE ARING, THAT THE REVENUES APPEAL WILL BE COVERED EITHER IN FAVOUR O F THE REVENUE OR AGAINST THE REVENUE AS PER OUR ORDER IN ASSESSEES APPEAL (SUPRA), WHICH WAS HEARD ALONGWITH THIS REVENUES APPEAL. 14. SINCE WE, WHILE DISPOSING THE ASSESSEES APPEA L, HAVE DELETED EVEN THE ADDITION SUSTAINED BY THE CIT(APPEALS) BY ACCEP TING THE ASSESSEES PLEA AND HAVE ALLOWED THE ASSESSEES APPEAL, THE PR ESENT REVENUES APPEAL DOES NOT SURVIVE BEING COVERED BY THAT ORD ER. CONSEQUENTLY, THE REVENUES APPEAL IS DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 4.4. THE AFORESAID ORDER OF THE TRIBUNAL WAS CHAL LENGED BY THE REVENUE IN TAX APPEAL NOS.1344 & 1355 OF 2008. THE HONBLE JURISDICTIONAL HIGH COURT HAS AFFIRMED THE VIEW TAKEN BY THE TRIB UNAL. THE LD.SR.COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELI ANCE ON THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE C ASE OF GUJARAT POWER ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 17 - CORPORATION LTD. VS. ASST.CIT, DATED 30/07/2012 REP ORTED AT 350 ITR 266, WHEREIN THE HONBLE GUJARAT HIGH COURT VIDE PA RA-51 HELD AS UNDER:- 51. IN OUR OPINION, ANY SUCH REOPENING WOULD BE B ASED ON A MERE CHANGE OF OPINION. IN THE REASONS, THE ASSESSING OFFICER STAR TED WITH THE WORDS, 'FROM THE RECORDS, IT CAN BE SEEN THAT ..'. ENTIRE INFOR MATION AND THE MATERIAL THAT THE ASSESSING OFFICER, THEREFORE, HAD AT HIS COMMAN D WAS REFLECTED FROM THE RECORD ITSELF. THIS COUPLED WITH THE FACT THAT IN T HE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER EXAMINED SUCH CLAIMS IN DETAIL, W OULD CONVINCE US THAT ANY REOPENING OF THE ASSESSMENT OF SAME CLAIMS ON THE B ASIS OF SAME MATERIAL, AMOUNTS TO A MERE CHANGE OF OPINION. THE FACT THAT THE ASSESSING OFFICER DID NOT RECORD REASONS FOR MAKING NO DISALLOWANCE ON SU CH CLAIM OF EXEMPTION, WOULD BE OF NO CONSEQUENCE. 5. THEREFORE, IN VIEW OF THE UNREBUTTED FINDING ON FACT GIVEN BY THE LD.CIT(A) AND THE BINDING PRECEDENTS RELIED BY THE LD.SR.COUNSEL FOR THE ASSESSEE, WE DO NOT FINDING ANY INFIRMITY IN THE OR DER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/10/2014 2..,.../ T.C. NAIR, SR. PS ITA NO.2126 /AH D/2008 ASST.CIT VS. M/S.J.B.EXPORTS ASST.YEAR 2004-05 - 18 - !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-IV, SURAT 5. 78& 45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<* / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 16.10.14 (DICTATION-PAD 24- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.10.14 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BA CK TO THE SR.P.S./P.S.30.10.14 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.10.14 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER