Sunita Rani, Sonepat V. ITO, Sonepat

ITA 2194/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3706 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Keywords: Gift; Opportunity of being heard; Source of fund; Additional evidence; TDS
• Section: 143(3); 133(6); 37(1); 13; 22; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. KULDIP SINGH, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 2194/DEL/2017 : ASSTT. YEAR : 2011-12 SUNITA RANI, H.NO. 736D, RISHI NAGAR, SONIPAT, HARYANA VS INCOME TAX OFFICER, WARD-2, SONIPAT, HARYANA (APPELLANT) (RESPONDENT) PAN NO. ASAPR0913R ASSESSEE BY : NONE REVENUE BY : SH. SARAS KUMAR, SR. DR DATE OF HEARING: 23.01.2020 DATE OF PRONOUNCEMENT: 24.02.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A)-2, GURGAON DATED 01.02.201 7. 2. FOLLOWING THE GROUNDS HAVE BEEN RAISED BY THE AS SESSEE: 1. THE COMMISSIONER OF INCOME TAX (APPEAL), HEREIN AFTER C.I.T. (A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADD ITION OF RS. 42,05,216/- ON ACCOUNT OF CAPITAL OUT OF RS. 49,55, 216. THAT THE CIT (A) ERRED ON FACTS AND IN LAW IN CONFI RMING THE ADDITION BY AO OF RS. 72,00,000/- ON ACCOUNT OF UNS ECURED LOAN OUT OF RS. 107,00,000/-. 2. THAT THE CIT (A) ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ADDITION BY AO OF RS 54,51,492/- ON ACCOUNT OF SUND RY CREDITORS OUT OF RS. 67,07,216/-. 3. THAT THE CIT (A) ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ADDITION BY AO OF RS.55,69,337 ON ACCOUNT OF COMMIS SION/MIN GUARANTEE. ITA NO. 2194/DEL/2017 SUNITA RANI 2 4. THAT THE CIT (A) ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ADDITION BY AO OF RS 2,39,210/- ON ACCOUNT OF ADVER TISEMENT EXPENSE AND RS.3,06,885/- ON ACCOUNT OF OTHER EXPEN SES. 5. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER IN THIS REGARD WITH OUT CONSIDERING THE CONTEMPORANEOUS/CIRCUMSTANTIAL EVIDENCE FURNISHED B Y THE APPELLANT AND WITHOUT APPRECIATING THAT THE TRANSAC TIONS WERE SUPPORTED BY PROPER DETAILS/ DOCUMENTS /VOUCHERS. 3. THE RETURN OF INCOME WAS FILED ON 28.09.2011 WIT H AN INCOME OF RS.4,36,460/-. THE CASE WAS TAKEN UP FOR ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 AND THE CASE WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE. LATER, SEVERAL OPPORTUNITIES WERE PROVID ED ON 15.07.2013, 14.08.2013, 17.09.2013, 28.10.2013, 09.01.2014 AND 03.12.2014. OWING TO NON-SUBMISSION OF ANY DETAILS AND COMPLIANCE, TH E ASSESSING OFFICER COMPLETED THE PROCEEDINGS DETERMINING THE TOTAL INC OME AT RS.3,94,12,151/- ON 18.02.2014. 4. THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT (A) ON 19.03.2014 WHO HAS COMPLETED THE PROCEEDINGS ON 01.02.2017. ON ACCOUNT OF CAPITAL: 5. THE LD. CIT (A) CONFIRMED AN AMOUNT OF RS.42,05, 216/- OUT OF THE AMOUNT OF THE ADDITION MADE BY THE ASSESSING OFFICE R OF RS.49,55,216/-. 6. WE HAVE GONE THROUGH THE ENTIRE ORDER OF THE LD. CIT (A) AND FIND THAT THE LD. CIT (A) HAS ACCEPTED AND FOUND IT CORR ECT REGARDING THE AMOUNTS RECEIVED AS GIFTS FROM HUSBAND OF RS.2,50,0 00/- AND RS.9,50,000/- FROM HER FATHER-IN-LAW. THE LD. CIT ( A) CONFIRMED THE REMAINING AMOUNT OWING TO NON-SUBSTANTIATION OF THE AMOUNTS RECEIVED. 7. WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT (A ) IN THE RATIONALE GIVEN WHILE CONFIRMING THE ADDITION. WE FIND THAT T HE LD. CIT (A) HAS OBTAINED THREE REMAND REPORTS DATED 30.06.2015, 17. 12.2015 AND ITA NO. 2194/DEL/2017 SUNITA RANI 3 27.05.2016 FROM THE ASSESSING OFFICER, THE INPUTS O F WHICH IS DULY CONSIDERED WHILE ADJUDICATING THE ISSUE. WE HAVE GO NE THROUGH THE ENTIRE ORDER IN DETAIL AND FIND THAT THE LD. CIT (A) HAS R IGHTLY GIVEN REMISSION OF RS.7,50,000/-. FOR THE SAKE OF READY REFERENCE, THE ORDER OF THE LD. CIT (A) IS REPRODUCED AS UNDER: (PAGE NO. 6 PARA 5 TO PAGE NO. 10 PARA 5.5) 5.0 ADDITION OF RS.49,55,216/- ON ACCOUNT OF INTRO DUCTION OF NEW CAPITAL: THE ASSESSING OFFICER HAS MADE THE ABOVE-M ENTIONED ADDITION DURING THE COURSE OF ASSESSMENT PROCEEDING S WHEN NO EXPLANATION WAS FILED. 5.1 IN THE APPEAL PROCEEDINGS, THE APPELLANT HAS GI VEN ADDITIONAL EVIDENCE EXPLAINING THE SOURCE OF CAPITAL BEING GIF T FROM MR. SUSHIL KUMAR, ASSESSEES HUSBAND AMOUNTING RS. 2,50,000/-, SH. TELU RAM, ASSESSEE'S FATHER-IN-LAW AMOUNTING RS. 12,50,0 00/- AND SH. RAJBIR SINGH, ASSESSEE'S FATHER AMOUNTING RS.4,50,0 00/. THIS MAKES A TOTAL OFRS. 19,50,000/-. NO EXPLANATION HAS BEEN TENDERED IN RESPECT OF THE REMAINING AMOUNT OF RS. 30,05,216/-, 5.2 THE ASSESSING OFFICER HAS EXAMINED THE AMOUNT R ECEIVED FROM MR. SUSHIL KUMAR, ASSESSEE'S HUSBAND, SH. TELU RAM, ASSESSEE'S FATHER-IN-LAW AMOUNTING AND SH. RAJBIR S INGH IN THE COURSE OF REMAND PROCEEDINGS AND SUBMITTED THE FOLL OWING REPORTS: A) IN REPORT-1, DATED 30.06.2015 IT WAS REPORTED TH AT IN SUPPORT OF GIFT OF SH. SUSHIL KUMAR ONLY CONFIRMATION IS SUBMI TTED AND NO ANY SOURCE OF HIS INCOME OR BANK ACCOUNT IS PRODUCED. I N RESPECT OF GIFT OF RS. 12,50,000/- (CLAIMED TO BE RECEIVED FROM FAT HER IN LAW) ALSO NO ANY BANK ACCOUNT OR SOURCE OF RS. 12,50,000/- HA S BEEN EXPLAINED ONLY COPY OF FIRD OF LAND IS SUBMITTED. F ROM WHICH IT CANNOT BE ARRIVED AT THAT THE GIFT WAS GIVEN TO THE ASSESSEE OR NOT. NO ANY OCCASION OF GIFT IS EXPLAINED BY THE ASSESSE E. ASSESSEE WAS ASKED TO PRODUCE THE ABOVE THREE PERSONS. IN RESPON SE ONLY SH. RANBIR SINGH FATHER OF THE ASSESSEE ATTENDED AND HI S STATEMENT WAS RECORDED PLACED ON RECORD) AND HE PRODUCED COPY OF HIS SALARY BANK ACCOUNT AND STATED THAT HE HAS GIVEN CASH GIFT OUT OF HIS GPF WITHDRAWAL AND PAYMENT RECEIVED FROM HIS OFFICE. WH EN ASKED ABOUT THE OCCASION OF GIFT HE STATED THAT GIFT WAS GIVEN FOR THE BIRTHDAY OF HIS GRANDSONS I.E. CHILDREN OF THE ASSESSEE. BUT WH EN ASKED ABOUT THE DATE OF BIRTHDAY. HE STATED THAT BIRTHDAY OF TH E CHILDREN ARE IN THE MONTH OF MAY AND JULY. BUT THE DATE OF WITHDRAW AL OF AMOUNT FROM HIS ACCOUNT IS IN THE MONTH OF JANUARY. HENCE NO ANY PROOF OF GIFT/SOURCE OF ADDITION OF CAPITAL OF RS. 45,00,000 /- IS SUBMITTED BY THE ASSESSEE AND THE SAME STANDS UNEXPLAINED. ITA NO. 2194/DEL/2017 SUNITA RANI 4 B) IN REPORT-2, DATED 17.12.2015 ON THIS ISSUE THE ASSESSING OFFICER FURNISHED NO FURTHER COMMENTS BUT REITERATED THE CO MMENTS EARLIER SUBMITTED VIDE REPORT DATEDM17.12.2015. C) IN REPORT-3, DATED 27.05.2016 IT WAS REPORTED TH AT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE VIDE ORDER SHEET ENT RIES DATED 17.04.2016, 11.04.2016, 20.05.2016 & 23,05,2016 ASK ED TO PRODUCE PERSONS/CREDITORS FOR PROVING GENUINENESS A ND CREDIT WORTHINESS OF THE PERSON/CREDITORS, ON 24.05.16 THE AUTHORIZED REPRESENTATIVE PRODUCED SH. TELU RAM S/O SH. KULWAN T SINGH WHO HAS SHOWN GIVEN GIFT OF RS. 12,50,000/- TO THE ASSE SSEE. HIS STATEMENT WAS RECORDED. HE WAS SPECIALLY ASKED TO I NTIMATE THE DATE OCCASION AND SOURCE OF GIFT. IN STATEMENT HE H AS FIRSTLY STATED THAT HE IS EARNING RS. 8,00,000/- PER ANNUM FROM PA TTA (LEGAL AGREEMENT) OF 14 ACRE OF LAND WHEREAS, IN ANOTHER Q UESTION HE HAS STATED THAT HE HAS RECEIVED 40 TO 45 THOUSAND PER A CRE AS LEASE RENT WHICH COMES TO RS.5,00,000/- PER ANNUM. REGARDING H OUSE HOLD EXPENSES FIRSTLY HE HAS STATED THAT THESE ARE 5 LAC S APPROX. & AFTER THAT HE STATED 2.5 LACS PER ANNUM. THE REPLY OF THE ASSESSEE ON THIS ISSUE IS CONTRADICTORY. IT IS SURPRISING HOW HE HA S MADE SAVING OF SO HUGE AMOUNT. WHEN HE WAS ASKED TO STATE THE MODE OF GIFT HE STATED THAT RS. 3 LACS ARE FROM BANK BALANCE AND BA LANCE OF RS. 9.5 LACS FROM CASH AVAILABLE. THE ASSESSEE HAS MAINTAIN ED TWO BANK ACCOUNTS, THEN WHY HE HAS KEPT TOO HUGE CASH IN HOU SE. THE SOURCE OF GIFT HE STATED THAT THIS IS FROM AGRICULTURAL IN COME. BUT HE HAS RECEIVED RS. 5.6 LACS FROM LEASE AND SPENT RS. 5 LA C ON HOUSEHOLD EXPENSES. THEN SAVING OF TOO MUCH CASH SEEMS DOUBTF UL. KEEPING IN VIEW OF THE FACTS THE GENUINENESS AND CREDITWORTHIN ESS OF DONOR NOT PROVED. FURTHER, THE ASSESSEE WAS ASKED TO PRODUCE THE PERSONS FROM WHOM HE HAS RECEIVED LEASE RENT. HE HAS SHOWN HIS INABILITY TO PRODUCE THE SAME. FURTHER, THE ASSESSEE WAS ASKED W HETHER HE HAS GIFTED SUCH AMOUNT TO OTHER TWO DAUGHTER-IN-LAWS. H E TOO STRAIGHTLY REFUSED TO GIVE ANY GIFT TO OTHER TWO DAUGHTERS-IN- LAW. ONUS IS LYING ON THE ASSESSEE TO PROVE THE GENUINE & CREDITWORTHI NESS OF ENTRIES AND ASSESSEE HAS FAILED TO PROVE IT. THEREFORE, IT IS REQUESTED THAT SUBMISSION OF THE ASSESSEE MAY KINDLY NOT BE CONSID ERED. THUS ABOVE FACTS SUBMITTED BY THE ASSESSEE ARE NOT GENUI NE AND UN- RELIABLE AND THUS UNACCEPTABLE.' 5.3 RESPONSE OF THE APPELLANT: ALL THE ABOVE REPORT S WERE GIVEN TO THE APPELLANT AND FINALLY A WRITTEN SUBMISSION W AS FILED ON HER BEHALF ON WHEREIN THE FOLLOWING WAS SUBMITTED: 6. THE AO IS NOT JUSTIFIED WHILE MAKING ADDITION ON ACCOUNT OF INTRODUCTION OF NEW CAPITAL AMOUNTING RS. 49,55,216 /-. DURING REMAND PROCEEDINGS, DOCUMENTS RELATING TO AD DITION IN CAPITAL THROUGH GIFTS FROM RELATIVES HAVE BEEN FILE D WITH LD. AO AND IT HAS BEEN SUBMITTED BEFORE AO THAT PART, OF ADDIT ION WAS ON ACCOUNT OF GIFT FROM MR. ITA NO. 2194/DEL/2017 SUNITA RANI 5 SUSHI! KUMAR, ASSES SEE'S HUSBAND AMOUNTING RS. 2,5 0,000/-, SH TELU RAM, ASSESSEE'S FATHERIN-LAW AMOUNTING RS. 12 ,50,000/- AND SH. RAJBIR SINGH, ASSESSEE'S FATHER AMOUNTING R S.4,50,000/- FOR WHICH CONFIRMATION WERE SUBMITTED WITH LD. AO S H. RAJBIR SINGH FATHER OF ASSESSEE VISITED THE OFFICE OF LD. AO AND RECORDED HIS STATEMENT AND THE SAME HAS BEEN TAKEN ON RECORD BY LD. AO IN REMAND REPORT DATED 15.07.2015. SH. TELU RAM VISITED THE OFFICE OF LD. AO THREE TIM ES ON 16.05.2016, 19.05.2016 AND 23.05.2016. DESPITE BEING NOT CARRYI NG GOOD HEALTH (AS HE IS MORE THAN 80 YEARS OF AGE) HIS STATEMENT WAS NOT BEEN RECORDED IN FIRST TWO VISITS. IN HIS STATEMENT HE HAS CONFIRMED THAT HE HAD GIFTE D RS. 12,50,000/- FOR SUPPORTING THE BUSINESS VIDE RS, 3, 00,000/- FROM BANK AND RS. 9,50,000/- IN CASH. SH. TELU RAM REPEATEDLY TOLD TO ID. AO THAT THE TOT AL FAMILY EXPENSES AS ON DATE ARE APROX. RS. 5,00,000/- PER A NNUM AND EXPENSES IN THE CAPTIONED YEAR WERE APROX. RS. 2,50 ,000/- BUT DESPITE BEING TOLD TO CONCERNED INSPECTOR, WHO DRAF TED THE STATEMENT, HE MENTIONED THE EXPENSES TO THE TUNE OF RS. 5,00.000/- PER ANNUM IN THE STATEMENT INSTEAD OF RS. 2,50,000/ - PER ANNUM AND DESPITE REMINDER HE REFUSED TO CHANGE THE STATE MENT AND TOLD TO EXPLAIN THE SAME TO CIT(APPEAL). SH. TELU RAM, ON BEING ASKED TO PRODUCE THE PERSONS FROM WHOM HE WAS GETTING LEASE RENT, NEVER EXPRESSED HIS INABILI TY TO PRODUCE THE TENANTS. RATHER HE REQUESTED TO LD. AO TO ACCORD TH E TIME TO PRODUCE THE PERSON AS IT WAS NOT POSSIBLE TO PRODUC E THE TENANTS THEN AND THERE. BUT AO REFUSED TO ACCORD THE TIME. 5.4 I HAVE GIVEN CAREFUL CONSIDERATION TO THE FACTS OF CASE AND FIND THAT OUT OF TOTAL ADDITION TO CAPITAL ACCOUNT NO EX PLANATION HAS BEEN GIVEN THE EXTENT OF RS. 49,55,216/-, IN RESPECT OF RS. 30,05,216/- WHICH IS CONFIRMED STRAIGHT AWAY. IN RESPECT OF THE BALANCE FOR WHICH EXPLANATION IS GIVEN, THE SAME IS AS UNDER: A) GIFT FROM HUSBAND 2,50,000/- B) GIFT FROM FATHER 4,50,000/- C) GIFT FROM FATHER- IN LAW 12,50,000/- I. GIFT FROM HUSBAND: THE APPELLANT IN THE COURSE O F ASSESSMENT PROCEEDINGS/REMAND PROCEEDINGS HAS FAILED TO PRODUC E COGENT AND CONVINCING EVIDENCE WHICH WOULD SUPPORT THAT THE HU SBAND OF THE APPELLANT WOULD GIVE A GIFT OF THE AMOUNT AS IS CLA IMED. NO BANK ACCOUNT HAS BEEN PRODUCED AND NO SOURCE OF INCOME H AS BEEN DISCLOSED IN THE COURSE OF REMAND PROCEEDINGS AS HA S BEEN REPORTED BY THE ASSESSING OFFICER IN HIS REPORT DATED 30.06. 2015. EVEN IN THE ITA NO. 2194/DEL/2017 SUNITA RANI 6 REPLY SUBMITTED IN RESPONSE TO REMAND REPORTS, THE APPELLANT HAS NOT CONTROVERTED THE FINDINGS GIVEN BY THE ASSESSIN G OFFICER. HENCE, THE GIFT FROM THE HUSBAND REMAINS UNSUBSTANTIATED. II. GIFT FROM FATHER: THE FATHER OF THE APPELLANT H AS ALLEGEDLY GIFTED AN AMOUNT OF RS. 4,50,000/- AND IN THE REMAN D REPORT THE ASSESSING OFFICER HAS OBJECTED TO THE CONTENTION ON LY ON THE GROUND THAT THE DONOR HAS NOT BEEN ABLE TO PROVIDE DETAILS OF DATE OF BIRTH DAY OF HIS GRANDSONS. THE OCCASION OF GIFT HAS NOT BE EXPLAINED AND THEREFORE THE ASSESSING OFFICER WAS OF THE VIEW THA T THE GIFT IS NOT GENUINE. IT IS REPORTED BY THE ASSESSING OFFICER TH AT THE DONOR HAS GIVEN CASH GIFT OUT OF GPF WITHDRAWAL. HOWEVER, NO FACTUAL FINDINGS HAVE BEEN RECORDED BY THE AO IN RESPECT OF THE SOUR CE OF FUND OF THE DONOR. I HAVE CONSIDERED THE FACTUAL METRICS AND FI ND THAT IT IS NOT IMPORTANT FOR THE DONOR TO REMEMBER THE DATES PARTI CULARLY WHEN THE SOURCE OF FUND HAS BEEN FULLY EXPLAINED. THE GI FT FROM SUCH CLOSE RELATIVE HAS TO BE ACCEPTED. III. GIFT FROM FATHER - IN - LAW: IT HAS BEEN REPOR TED BY THE ASSESSING OFFICER THAT THE STATEMENT OF THIS PERSON WAS RECOR DED WHERE HE ADMITTED THAT TOTAL EARNING PER ANNUM FROM THE AGRI CULTURAL INCOME IS ABOUT RS. 8.00 LAKHS ONLY. EVEN IN THIS INCOME, THERE IS A COMPONENT OF LEASE RENT RECEIVED WHICH COULD NOT BE PROVED IN THE COURSE OF REMAND PROCEEDINGS. THE TOTAL INCOME AS C LAIMED ABOVE HAS NOT BE SUBSTANTIATED IN THE STATEMENT. FURTHER, IT HAS BEEN STATED THAT GIFT TO THE APPELLANT HAS BEEN GIVEN FR OM TWO SOURCES, ONE IS OUT OF BANK ACCOUNT FROM WHERE RS. 3 LACS WE RE WITHDRAWN AND THE REMAINING AMOUNT OF RS. 9.5 LACS HAS BEEN G IVEN FROM THE AGRICULTURAL INCOME. EVEN THOUGH THE ASSESSING OFFI CER HAS PROPOSED THAT NOTHING COULD BE SUBSTANTIATED BUT I FIND THAT THE ASSESSING OFFICER DID NOT CONDUCT FURTHER ENQUIRIES IN RESPEC T OF GIFT MADE OUT OF BANK BALANCE TO THE EXTENT OF RS. 3.00 LACS. IT HAS BEEN SPECIFICALLY STATED THAT SUCH AN AMOUNT HAS BEEN WI THDRAWN FROM THE BANK BUT THE ASSESSING OFFICER DID NOT ACCEPT T HE CONTENTION WITHOUT GIVING ANY REASON. THE GIFT FROM FATHER-IN- LAW TO THIS EXTENT OF RS. 3 LACS STANDS EXPLAINED WHEREAS THERE IS NO EVIDENCE TO SUBSTANTIATE THE REMAINING GIFT OF RS. 9.5 LAKHS. 5.5. IN SUMMATION, OUT OF THE TOTAL ADDITION OF RS. 49,55,216/-, THE FOLLOWING COMPONENT OF ADDITION TO THE EXTENT OF RS. 42,05,216 IS CONFIRMED AND BALANCE RS.7,50,0 00/- IS DELETED : S.NO. PARTICULARS AMOUNT (I) NO EXPLANATION 30,05,216/- (II) GIFT FROM HUSBAND 2,50,000/ - (III) GIFT FROM FATHER-IN- LAW 9,50,000/- 42,05,216/ - ITA NO. 2194/DEL/2017 SUNITA RANI 7 8. SINCE, THE ORDER OF THE LD. CIT (A) IS CORRECT O N FACTS, WE DECLINE TO INTERFERE WITH THE ORDER AND THE AMOUNT OF RS.42,05 ,216/- IS HEREBY CONFIRMED. LOANS OF RS.72,00,000/-: 9. THE LD. CIT (A) CONFIRMED AN AMOUNT OF RS.72,00, 000/- OUT OF THE AMOUNT OF THE ADDITION MADE BY THE ASSESSING OFFICE R OF RS.2,09,94,924/-. 10. WE HAVE GONE THROUGH THE ENTIRE ORDER OF THE LD . CIT (A) AND FIND THAT THE LD. CIT (A) HAS ACCEPTED AND FOUND IT CORR ECT REGARDING THE AMOUNTS RECEIVED FROM PNBCC ACCOUNT OF RS.74,34,788 /- AND RS.28,60,136/- FROM ANDHRA BANK. REGARDING THE SECU RITY DEPOSIT RECEIVED BY THE ASSESSEE OF RS.1,07,00,000/-. AN AMOUNT OF RS.35,00,000/- HAS BEEN CONFIRMED BY M/S AERI APPAREL INC., M/S NEW ST YLES APPAREL, M/S MALIK & SONS AND M/S VIDHI FASHION. THE LD. CIT (A ) CONFIRMED THE REMAINING AMOUNT OWING TO NON-SUBSTANTIATION OF THE AMOUNTS RECEIVED. 11. WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT ( A) IN THE RATIONALE GIVEN WHILE CONFIRMING THE ADDITION. WE FIND THAT T HE LD. CIT (A) DELETED THE AMOUNT OF RS.35,00,000/- BASED ON THREE REMAND REPORTS DATED 30.06.2015, 17.12.2015 AND 27.05.2016 FROM THE ASSE SSING OFFICER, THE INPUTS OF WHICH IS DULY CONSIDERED WHILE ADJUDICATI NG THE ISSUE. WE HAVE GONE THROUGH THE ENTIRE ORDER IN DETAIL AND FIND TH AT THE LD. CIT (A) HAS RIGHTLY GIVEN REMISSION OF RS.35,00,000/- AND CONFI RMED THE AMOUNT OF RS.72,00,000/-. FOR THE SAKE OF READY REFERENCE, TH E ORDER OF THE LD. CIT (A) IS REPRODUCED AS UNDER: (PAGE NO. 11 PARA 6 TO PAGE NO. 17 PARA 6.4.1) 6.0. ADDITION OF RS. 2,09,94,924/- ON ACCOUNT OF SECURED & UNSECURED LOANS: THE ASSESSING OFFICER HAS MADE THE ABOVE- MENTIONED ADDITION DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN NO EXPLANATION WAS FILED. 6.1. IN THE APPEAL PROCEEDINGS, THE APPELLANT HAS GIVEN ADDITIONAL EVIDENCE EXPLAINING THE SOURCE OF LOANS AS BELOW: ITA NO. 2194/DEL/2017 SUNITA RANI 8 (A) PNB CCA/C RS. 74,34,788/- (B) ANDHRA BANK RS. 28,60,136/- (C) SECURITY DEPOSIT FROM DEALERS RS. 1,07,00,000 /- TOTAL RS. 2,09,94,924/- 6.2. REMAND REPORTS: THE ASSESSING OFFICER HAS EXAM INED THE ADDITIONAL EVIDENCE AND CONTENTIONS OF THE APPELLAN T. AFTER DUE CONSIDERATION SUBMITTED THE FOLLOWING REPORTS: A) IN REPORT-1, DATED 30.06.2015 THE FOLLOWING WAS REPORTED THAT: AS PER BALANCE SHEET ASSESSEE HAS SHOWN LIABILITY O F RS. 1, 07,00,000/- ON ACCOUNT OF SECURITY DEPOSIT. DURING REMAND PROCEEDINGS ALSO ASSESSEE ONLY SUBMITTED COPY OF AG REEMENT WITH MANY PARTIES FROM WHICH IT IS NOT CLEAR THAT THE AC TUALLY THE TRANSACTION HAVE TAKEN PLACE OR NOT. THOUGH ASKED S PECIFICALLY ASSESSEE HAS NOT GIVEN ANY DETAIL/PROOF/BANK ACCOUN T STATEMENT ETC. IN THIS REGARD. HENCE ADDITIONAL EVIDENCE TOWARDS A DDITION OF RS.1,07,00,000/- ON ACCOUNT OF LIABILITIES STANDS U NEXPLAINED. 5. AS PER BALANCE SHEET ASSESSEE HAS RAISED LOAM TH ROUGH BANKS OF RS.1,07,00,000/- AND BUT THOUGH ASKED DURING ASSTT. PROCEEDINGS ASSESSEE DID NOT EVEN EXPLAINED ACCOUNT NO. AND THE NAME OF THE BANKS AND PERSONS FROM WHOM LOAN WERE TAKEN. DURING REMAND PROCEEDINGS BANK STATEMENT FROM PUNJAB NATIONAL BAN K AND ANDHRA BANK WAS CALLED FOR WHICH REVEALED THAT DURING THE YEAR ASSESSEE WAS HAVING CC ACCOUNT NO. 1710008700001131 WITH PNB WITH LIABILITY OF RS.74,34,788/- AND HAVING O.D. ACCOUNT NO.117731100000229 WITH ANDHRA BANK HAVING LIABILIT Y OF RS.28,60,136/- WHICH MAY BE DECIDED ON MERITS. B) IN REPORT-2, DATED 17.12.2015 ON THIS ISSUE THE ASSESSING OFFICER FURNISHED NO FURTHER COMMENTS BUT REITERATED THE CO MMENTS EARLIER SUBMITTED VIDE REPORT DATED 17.12.2015. C) IN REPORT-3, DATED 27.05.2016 AFTER THE ENQUIRY THE FOLLOWING WAS REPORTED: TO MEET THE END OF JUSTICE THE ASSESSEE WAS AGAIN G IVEN AN OPPORTUNITY OF BEING HEARD ON 25.04.2016. ON 25.04. 2016 AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS & FURNISH LIST OF CREDITORS/PERSONS FROM WHOM SECURITIES WERE RECEIVED WITH COMPLETE NA ME & ADDRESS & SUBMITTED THAT DUE TO CLOSURE OF BUSINESS & NOT H AVING GOOD RELATION WITH THE PARTIES IT IS NOT POSSIBLE TO PRO DUCE THE PARTIES FOR CONFIRMATION AS WELL AS CONFIRMED COPIES. THE AR OF THE ASSESSEE REQUESTED TO ISSUE NOTICE U/S 133(6) TO THESE PARTI ES FOR CONFIRMATION. ON REQUEST OF THE ASSESSEE AND TO MEE T THE END OF JUSTICE, NOTICE TO THE FOLLOWING PARTIES WERE ISSUE D, AS PER LIST WITH ITA NO. 2194/DEL/2017 SUNITA RANI 9 NAME & ADDRESS OF PERSONS PROVIDED BY THE AR DURING PROCEEDINGS, WHOSE DETAILS ARE AS UNDER: S. NO. NAME OF THE PARTY LETTER/DISPATCH NO. & DATE OF ISSUE BALANCE IN THE BOOKS OF A/C OF THE ASSESSEE BALANCE IN THE BOOKS OF A/C OF THE PARTY POSTAL REMARKS 1. M/S AERI APPAREL INC 316 DT. 25.04.2016 20,00,000 20,00,000 2. M/S OM SELECTION 315 DT. 25.04.2016 2,00,000 3. M/S SHREE RAM TEXTILES 314 DT. 25.04.2016 RECEIVED - UNSERVED AS INCOMPLETE ADDRESS 4. M/S MEHTA GARMENTS 313 DT. 25.04.2016 3,00,000 - DO - 5. M/S SHREE BALAJI & CO. 311 DT. 25.Q4.2016 2,03,000 RECEIVED UNSERVED AS NO SUCH FIRM. 6. M/S SHE COLLECTION 310 DT. 25.04.2016 3,10,000 - RECEIVED UNSERVED AS INSUFFICIENT ADDRESS. 7. M/S INDUS COLLECTION 309 DT. 25.04.2016 3,10,000 - 8. M/S PAUL BROTHERS 308 DT. 25.04.2016 4,00,000 - RECEIVED UNSERVED AS NO SUCH FIRM. 9. M/S JAI GARMENTS 307 DT. 25.04.2016 3,00,000 - 10. M/S GIRIRAJ FASHION HOUSE 306 DT. 25.04.2016 4,00,000 - 11. M/S SINGH'S COLLECTION 305 DT. 25.04.2016 3,00,000 - RECEIVED UNSERVED AS NO SUCH FIRM . 12. M/S SHAKTI SALES 304 DT. 25.04.2016 1,25,000 - DO - 13. M/S ANIL DAHIYA HUF 303 DT. 25.04.2016 2,00,000 - 14. M/S AMBIKA GARMENTS 302 DT. 25.04.2016 5,00,000 - RECEIVED UNSERVED AS UNCLAIMED 15. M/S SINGLA COLLECTION 301 DT. 25.04.2016 1,20,000 NIL 16. M/S SAHID KID POINT 300 DT. 25.04.2016 1,50,000 RECEIVED UNSERVED AS NO SUCH FIRM. ITA NO. 2194/DEL/2017 SUNITA RANI 10 17. M/S RAMA STORE 299 DT. 25.04.2016 5,00,000 - 18. M/S NEW STYLE APPA RELS PROP. RAM KUMAR DUHAN 298 DT. 25.04.2016 5,00,000 5,00,000 19. M/S MALIK & SONS 297 DT. 25.04.2016 5,00,000 5,00,000 20. M/S VIDHI FASHION 296 DT. 25.04.2016 5,00,000 5,00,000 21. SH. DAYANAND KHATRI 295 DT. 25.04.2016 1,50,000 RECEIVED UNSERVED AS EXPIRED 22. M/S SHEELA GARMENTS 294 DT. 25.04.2016 3,00,000 2,00,000 23. M/S SHARAN ENTERPRISES 293 DT. 25.04.2016 1,50,000 5,00,000 24. M/S ARORA BARTAN STORE 292 DT. 25.04.2016 3,00,000 25. M/S VIKARAN FASHION 291 DT. 25.04.2016 1,00,000 - RECEIVED UNSERVED AS NOT KNOWN. 26. M/S SWATI FASHION POINT 290 DT. 25.04.2016 5,00,000 - RECEIVED UNSERVED AS NO SUCH FIRM 27. M/S SINGHAL BROTHER 289 DT. 25.04.2016 4,00,000 5,00,000 28. M/S KAMAL INTERNATIONAL 288 DT. 25.04.2016 5,00,000 - RECEIVED UNSERVED AS INCOMPLETE ADDRESS. 29. M/S AGGARWAL GENERAL STORE 287 DT. 25.04.2016 3,00,000 - RECEIVED UNSERVED AS NO SUCH FIRM 30. M/S SHRI SHANKER TRADER 286 DT. 25.04.2016 2,00,000 RECEIVED UNSERVED FROM THE ABOVE IT IS CLEAR THAT IN SOME CASES THE P OSTAL AUTHORITIES RETURNED THE NOTICES WITH THE POSTAL REMARKS MENTIO NED AGAINST EACH, ONLY ASSESSEE MENTIONED AT SERIAL NO. 1, 18, 19 & 20 HAS CONFIRMED THE BALANCES WHICH TALLIED WITH THE BALAN CES OF THE ASSESSEE. THE ASSESSEE MENTIONED AT SR. NO. 13, 22, 23 & 27 HAS SHOWN BALANCES WHICH DIFFER TO THE ASSESSEE AS SHOW N IN THE TABLE ABOVE. THE ASSESSEE WAS ASKED TO PRODUCE THE PERSONS FROM WHOM SECURITIES HAS BEEN RECEIVED. THE ASSESSEE HAS STRA IGHTLY DENIED TO PRODUCE THESE PERSONS EITHER DUE TO CLOSURE OF BUSI NESS OR NOT GAD ITA NO. 2194/DEL/2017 SUNITA RANI 11 RELATION. EVEN THEN THE ASSESSEE HAS FAILED TO PROD UCE THE PERSONS FROM WHOM THE VERIFICATION HAS BEEN RECEIVED. FURTHER THIS OFFICE HAS RECEIVED BY NAME TWO LETTER S FROM SH. RAJESH TUSHIR AMOUNTING TO RS. 5,00,000/- AND SH. GHANSHAM DASS AND TO RS.3,00,000/- IN WHICH THEY HAVE STATED THAT THEY H AVE GIVEN ADVANCES/ SECURITIES TO M/S BRU INTERNATIONAL OF RS .5,00,000/- & RS.3,00,000/- RESPECTIVELY. SH. GHANSHAM DASS HAS A TTACHED A COPY OF PAN ONLY AND SH. RAJESH TUSHIR HAS FILED COPY OF ITR FOR A.Y. 2014-15 AND ALSO STATED NO RETURN WAS FILED FOR A.Y . 2011-12. IT IS VERY STRANGE THAT WHEN THIS OFFICE HAS NOT IS SUED ANY LETTER U/S 133(6) TO BOTH OF THEM OR NO VERIFICATION HAS BEEN SOUGHT FROM THEM, THEN HOW THEY ARE SENDING LETTER REGARDING SE CURITIES. MOREOVER, THE ASSESSEE HAS NOT INTIMATED THEIR NAME S IN THE LIST OF PERSONS FROM WHOM THEY HAVE RECEIVED SECURITIES. KEEPING IN VIEW THE ABOVE FACTS, THE MATTER MAY KIN DLY BE DECIDED ON MERITS. 6.3 RESPONSE OF THE APPELLANT: ALL THE ABOVE REPORT S WERE GIVEN TO THE APPELLANT AND FINALLY A WRITTEN SUBMISSION WAS FILED ON HER BEHALF ON WHEREIN THE FOLLOWING WAS SUBMITTED: 3. THE AO HAS ERRED ON FACTS AND IN LAW WHILE MAKIN G ADDITION ON ACCOUNT OF SECURED AND UNSECURED LOANS. THAT DETAIL S OF SECURED AND UNSECURED LOANS ARE AS BELOW: (A) PNB CCA/C RS.74,34,788/- (B) ANDHRA BANK RS.28,60,136/- (C) SECURITY DEPOSIT FROM DEALERS RS.1,07,00,000/- TOTAL RS. 2,09,94,924/- SECURED LOANS DURING REMAND PROCEEDINGS, BANK STATEMENTS FROM PUN JAB NATIONAL BANK AND ANDHRA BANK WAS CALLED FOR BY HON'BLE ASSE SSING OFFICER (HERE-IN-AFTER CALLED AO) WHICH REVEALED THAT YOUR APPELLANT WAS LIABLE TO PAY TO PUNJAB NATIONAL BANK RS. 74,34,788 /- AND TO ANDHRA BANK RS. 28,60,136/-. THE ABOVE FACT HAS BEEN CONFIRMED BY LD. AO IN 1ST REMAND REPORT DATED 15.07.2015. SECURITY DEPOSITS THE SECURITY DEPOSITS FROM DEALERS ARE BASICALLY TH E DEPOSITS RECEIVED BY M/S BRU INTERNATIONAL (PROP. SUNITA RANI) FROM T HE DEALERS WHILE ENTERING INTO AGREEMENT FOR OPENING THE FRANCHISEE OF BRU FASHION, A BRAND OF M/S BRU INTERNATIONAL. ITA NO. 2194/DEL/2017 SUNITA RANI 12 DURING REMAND PROCEEDINGS, APPELLANT SUBMITTED DETA IL LIST OF THE PERSONS FROM WHOM SECURITY DEPOSIT HAS BEEN RECEIVE D (COPY HAD ALREADY BEEN SUBMITTED WITH YOUR HONOUR VIDE OUR LE TTER DATED 19.10.2015 FOR YOUR KIND PERUSAL). LD. AO HAD CALLED FOR THE CONFIRMATIONS FROM VARIOU S PARLIES WHO HAD GIVEN SECURITY DEPOSITS TO THE APPELLANT. IN RESPON SE TO NOTICE FORM LD. AO, VARIOUS PARTIES HAVE CONFIRMED THE BALANCE TO THE TUNE OF RS. 51,00,000/- (RS. FIFTY ONE LAC ONLY). THE SAID FAD HAS BEEN CONFIRMED BY LD. AO IN HIS REMAND REPORT DATED 27.0 5.2016 AT PAGE NO. 2 & 3 VIDE ENTRIES AT SR. NO. 1, 13, 18, 1 9, 20, 22, 23 & 27. YOUR HONOUR, WE SUBMITTED BEFORE LD. AO (HAT THERE WAS MASSIVE FIRE IN THE PREMISE OF APPELLANT AND WHOLE RECORDS INCLUDING ACCOUNTS, COMPUTERS, VOUCHERS, DOCUMENTS ETC GOT DESTROYED IN FIRE AND WHATEVER RECORDS WE HAVE PRODUCED BEFORE LD. AO HAS BEEN COLLECTED FROM BANK & FEW CUSTOMERS/SUPPLIERS ETC. YOUR HONOUR, AS THE APPELLANT SUFFERED HEAVY LOSSES DUE TO FIRE AND COULD NOT PAY OFF ITS CREDITORS AND DEPOSITORS HENC E THEY ARE NOT CO- OPERATING WITH APPELLANT AND ARE NOT CONFIRMING THE IR BALANCES UNTIL THEIR DUES ARE PAID OFF COMPLETELY. YOUR HONOUR SHALL APPRECIATE THE FACTS RELATING TO FUNDS TRAIL MENTIONED BELOW: TOTAL DEPOSITS IN ALL BANK ACCOUNTS (A) RS.4,51,0 7,348/- SALES DURING THE YEAR: RS.3,85,37,036/- SUNDRY DEBTORS ON 31.03.2011 RS.25,85,760/- LESS: SUNDRY DEBTORS AS ON 31.03.2010 RS.44,290/- INCREASE IN SUNDRY DEBTORS RS.25,41,470/- RS.2 5,41,470/- REALIZATION FROM SALE PROCEEDS RS.3,59,95, 566/- LESS: FUNDS UTILIZED FOR ADDITION IN FIXED ASSETS RS.13,87,650/- (B) RS.3,46,07,916/- BALANCE BEING RECEIVED TOWARDS SECURITY DEPOSITS (A- B) RS.1,04,99,432/- TOTAL DEPOSITS IN ALL BANK ACCOUNTS RS.4,51 ,07,348/- 6.4. I HAVE GIVEN CAREFUL CONSIDERATION TO THE ENTI RE GAMUT OF FACTS AND ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER IN REMAND. OUT OF THE TOTAL AMOUNT OF RS.2,09,94,924/-, THE AO HAS AC CEPTED THE COMPONENTS PERTAINING TO PNB CC A/C RS.74,34,788/- AND ANDHRA BANK RS.28,60,136/- AS EXPLAINED WHICH LEAVES BEHIN D THE COMPONENT OF ADDITION PERTAINING TO SECURITY DEPOS IT FROM DEALERS TO THE EXTENT OF RS.1,07,00,000/-, 6.4.1. IN THE REMAND PROCEEDINGS, THE ASSESSING O FFICER CONDUCTED COMPLETE ENQUIRIES ABOUT SECURITY DEPOSIT FROM DEAL ERS OF RS.1,07,00,000/- AND AFTER SUCH ENQUIRY CAME TO A C ONCLUSION THAT THE FOLLOWING DEPOSITS HAVE BEEN CONFIRMED: ITA NO. 2194/DEL/2017 SUNITA RANI 13 S. N O. S. NO. OF REMAND REPORT NAME AMOUNT 1 1 M/S AERI APPAREL INC. 20,00,000/- 2 18 M/S NEW STYLE APPARELS PROP. RAM KUMAR DUHAN 5,00,000/- 3 19 M/S MALIK & SONS 5,00,000/ - 4 20 M/S VIDBI FASHION 5,00,000/ - IT IS ALSO REPORTED THAT IN RESPECT OF SOME OTHER P ERSONS THERE IS A DISCREPANCY IN THE FIGURES REPORTED BY THE RESPECTI VE PARTIES AND FURTHER SOME OF THE PARTIES CONFIRMED CERTAIN BALAN CES DESPITE THE FACT THAT NO NOTICE UNDER SECTION 133(6) OF INCOME TAX ACT WAS ISSUED TO SUCH PERSONS. 1 AM IN AGREEMENT WITH THE ASSESSING OFFICER THAT THESE CONFIRMATIONS DO NOT INSPIRE CONFIDENCE, PARTICULARLY IN VIEW OF THE FACT THAT THE APPELLANT HAS NOT DISCHAR GED INITIAL ONUS OF PRODUCING THESE CREDITORS BEFORE THE ASSESSING OFFI CER. THERE IS NO DOCUMENTARY EVIDENCE WHICH WOULD PROVE THAT THE AMO UNTS SO STATED TO HAVE BEEN RECEIVED AS SECURITY DEPOSITS WERE E ITHER THROUGH THE BANKING CHANNEL OR FROM THE CREDIBLE SOURCE. THE AS SESSING OFFICER HAD DOUBTS IN HIS MIND ABOUT THE GENUINENESS OF THE SE CREDITORS AND THEREFORE PROVIDED AN OPPORTUNITY TO THE APPELLANT TO SUBSTANTIATE HER CLAIM BY PRODUCING THE RESPECTIVE CREDITORS. TH E PROCESS OF CONFIRMATION BY POST WAS INITIATED ONLY TO FACILITA TE THE APPELLANT BUT EVEN THIS EXERCISE HAS RESULTED IN CONFIRMATION OF CREDITS IN RESPECT OF THE AFORESAID FOUR PERSONS. EACH CREDIT APPEARING I N THE BOOKS OF ACCOUNT HAS TO BE SUBSTANTIATED BY THE APPELLANT WI TH THE HELP OF COGENT AND CONVINCING EVIDENCE. IN THE PRESENT CASE , DESPITE NUMBER OF OPPORTUNITIES GIVEN TO THE APPELLANT THERE HAS B EEN NO COMPLIANCE. THE LETTERS ISSUED BY THE ASSESSING OFFICER HAS REM AINED UN-SERVED OR HAS NOT BEEN RESPONDED BY THE RESPECTIVE CREDITO RS. IN SOME CASES, AS MENTIONED ABOVE, EVEN THOUGH THE LETTERS HAVE BEEN RESPONDED BUT THE CREDIT BALANCE ARE DIFFERENT WHIC H WOULD MEAN THAT THE CONFIRMATIONS ARE NOT RELIABLE. THE APPELLANT GETS RELIEF OF RS.35,00,000/- IN RESP ECT OF THE AFOREMENTIONED FOUR CREDITORS OUT OF THE TOTAL CRED IT AMOUNT OF RS.1,07,00,000/- AND THE BALANCE AMOUNT OF RS.72,00 ,000/- IS CONFIRMED. 12. SINCE, THE ORDER OF THE LD. CIT (A) IS CORRECT ON FACTS, WE DECLINE TO INTERFERE WITH THE ORDER AND THE AMOUNT OF RS.72,00 ,000/- IS HEREBY CONFIRMED. ITA NO. 2194/DEL/2017 SUNITA RANI 14 SUNDRY CREDITORS: 13. THE LD. CIT (A) CONFIRMED AN AMOUNT OF RS.54,51 ,492/- OUT OF THE AMOUNT OF THE ADDITION MADE BY THE ASSESSING OFFICE R OF RS.67,07,216/-. 14. WE HAVE GONE THROUGH THE ENTIRE ORDER OF THE LD . CIT (A) WHO ENQUIRED REGARDING THE AMOUNTS RECEIVED FROM SEVEN PARTIES WHICH ARE TABULATED AS UNDER:(PAGE NO. 18 TABLE PARA 8.1) S. NO. NAME OF THE PARTY AMOUNT 1. M/S RUCHI ENTERPRISES , MUMBAI 20,46,050 2. M/S S.R. ENTERPRISES , LUDHIANA 10,43,574 3. M/S GUJARAT COTFAB, DELHI 3,80,826 4. M/S GOYAL TRADERS , DELHI 8,15,818 5. M/S NIRMAL TEXTILES, DELHI 3,24,204 6. M/S AHMADABAD COTTON MFG. CO. 1,56,470 7. M/S SANTOSH FINE FAB LTD., DELHI 7,18,428 15. THE CONFIRMATIONS OF THE SUNDRY CREDITORS HAVE BEEN ACCEPTED BY THE LD. CIT (A) AS ADDITIONAL EVIDENCES. BASED ON THE A DDITIONAL EVIDENCES FILED, ENQUIRIES WERE CONDUCTED DURING THE APPELLAT E PROCEEDINGS ALSO BY THE LD. CIT (A) WHICH COULD NOT LEAD TO ANY SUBSTAN TIATION OF EXISTENCE OF SUNDRY CREDITORS. OWING TO SUCH ENQUIRY, ONLY THREE CREDITORS HAVE GIVEN THEIR CONFIRMATION. THE DETAILS OF THREE PARTIES AR E AS UNDER: (PAGE NO. 22 PARA 8.5.1) SL. NO. NAME AMOUNT (I) GUJARAT COTT. FAB 3,80,826/- (II) SANTOSH FINE FAB LTD. 7,18,428/- (III) AHMADABAD COTTON MFG CO. 1,56,470/- 12,55,724/- 16. THE LD. CIT (A) CONFIRMED THE REMAINING AMOUNT OWING TO NON- SUBSTANTIATION OF THE AMOUNTS RECEIVED. 17. WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT ( A) IN THE RATIONALE GIVEN WHILE CONFIRMING THE ADDITION. WE FIND THAT T HE LD. CIT (A) DELETED ITA NO. 2194/DEL/2017 SUNITA RANI 15 THE AMOUNT OF RS.35,00,000/- BASED ON THREE REMAND REPORTS DATED 30.06.2015, 17.12.2015 AND 27.05.2016 FROM THE ASSE SSING OFFICER, THE INPUTS OF WHICH IS DULY CONSIDERED WHILE ADJUDICATI NG THE ISSUE. WE HAVE GONE THROUGH THE ENTIRE ORDER IN DETAIL AND FIND TH AT THE LD. CIT (A) HAS RIGHTLY GIVEN REMISSION OF RS.35,00,000/- AND CONFI RMED THE AMOUNT OF RS.72,00,000/-. FOR THE SAKE OF READY REFERENCE, TH E ORDER OF THE LD. CIT (A) IS REPRODUCED AS UNDER: (PAGE NO. 18 PARA 8 TO PAGE NO. 22 PARA 8.6) 8. ADDITION OF RS.67,07,216/- ON ACCOUNT OF SUNDRY CREDITORS: THE ASSESSING OFFICER HAS MADE THE ABOVE-MENTIONED ADDI TION DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN APPELLANT FAI LED TO FILE CONFIRMATION OF BALANCES FROM SUNDRY CREDITORS AS A PPEARING IN THE BALANCE SHEET. 8.1 IN THE APPEAL PROCEEDINGS, THE APPELLANT HAS GI VEN ADDITIONAL EVIDENCE EXPLAINING THE FOLLOWING SUNDRY CREDITORS: S. NO. NAME OF THE PARTY AMOUNT 1. M/S RUCHI ENTERPRISES, MUMBAI 20,46,050 2. M/S S.R. ENTERPRISES, LUDHIANA 10,43,574 3. M/S GUJARAT COTFAB, DELHI 3,80,826 4. M/S GOYAL TRADERS, DELHI 8,15,818 5. M/S NIRMAL TEXTILES, DELHI 3,24,204 6. M/S AHMADABAD COTTON MFG. CO. 1,56,470 7. M/S SANTOSH FINE FAB LTD., DELHI 7,18,428 CONFIRMATION FROM ANOTHER PARTY NAMELY SHREE RAM TE XTILE (4,43,161/-) WAS FURNISHED NOT BEFORE THE ASSESSING OFFICER BUT IN THE APPELLATE PROCEEDINGS. 8.2 REMAND REPORTS: THE ASSESSING OFFICER HAS EXAMI NED THE ADDITIONAL EVIDENCE AND CONTENTIONS OF THE APPELLAN T. AFTER DUE CONSIDERATION SUBMITTED THE FOLLOWING REPORTS: A) IN REPORT-1, DATED 30.06.2015 THE FOLLOWING WAS REPORTED THAT: DURING ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO FURNISH NAMES AND COMPLETE ADDRESS AND CONFIRMATION OF THE SUNDRY CREDITORS FOR RS.67,07,216/- BUT ASSESSEE DID NOT F URNISH ANY REPLY. NOW ASSESSEE SUBMITTED CONFIRMATION OF FEW PARTIES THOUGH ASSESSEE WAS REQUESTED TO SUBMIT COMPLETE ADDRESS OF ALL THE PARTIES. HENCE COPY OF ACCOUNT/CONFIRMATION WAS CALLED FOR FROM TH E PARTIES OUT OF ITA NO. 2194/DEL/2017 SUNITA RANI 16 WHICH ONLY CONFIRMATION FROM SMT. NEELAM OF GUJARAT COTTON FAB OF RS.3,80,826/- AND SANTOSH FINE FAB OF RS.7,18,428/- & FROM AHMADABAD COTTON MFG. CO. OF RS.1,56,470/- IS RECEI VED AND QUERY LETTER IN RESPECT OF BALANCE CREDITORS WERE RECEIVE D BACK OR NO ANY CONFIRMATION IS RECEIVED TILL DATE. HENCE ADDITIONA L EVIDENCE TOWARDS ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS STANDS UNEXPLAINED. B) IN REPORT-2, DATED 17.12.2015 ON THIS ISSUE THE ASSESSING OFFICER FURNISHED THE FOLLOWING REPORT: ON 04.12.2015 THE AR OF THE ASSESSEE ATTENDED THIS OFFICE AND FILED CONFIRMATION OF FOLLOWING PARTIES: 1. M/S AERI APPARELS INC. 2. M/S RUCHI ENTERPRISES 3. M/S S.R ENTERPRISES AND SOUGHT FOR ADJOURNMENT AND CASE WAS ADJOURNED T O 10.12.2015 WITH THE DIRECTIONS THAT THE FURTHER ADJOURNMENT WI LL BE DISALLOWED. ON 10.12.2015 NEITHER ANYBODY ATTENDED THE PROCEEDI NGS NOR WAS ANY WRITTEN SUBMISSION RECEIVED. LETTERS WERE ISSUED FOR CALLING INFORMATION U/S 133 (6) OF THE I.T. ACT, AND CONFIRMATION OF THE BALANCES TO THE FOLLOWING P ARTIES: S. NO. NAME OF THE PARTY LETTER/DISPATCH NO. DATE 1. AERI APPAREL INC. 8367 08.12.2015 2. M/S RUCHI ENTERPRISES 8373 - DO - 3. M/S S.R. ENTERPRISES 8374 - DO - 4. M/S GUJARAT COTFAB 8375 - DO - 4. M/S GOYAL TRADERS 8376 -DO- 5. M/S NIRMAL TEXTILES 8377 - DO - 6. M/S AHMADABAD COTTON MFG. CO. 8378 - DO - 7. M/S SANTOSH FINE FAB LTD. 8379 - DO - NO RESPONSE FROM ANY OF ABOVE SAID PARTIES HAS BEEN RECEIVED TILL DATE. THEREFORE, IT IS CLEAR THAT THE TRANSACTIONS MADE BY THE ASSESSEE WITH ABOVE SAID PARTIES ARE NOT GENUINE AN D CLAIM OF THE ASSESSEE REQUIRED NOT TO BE ENTERTAINED. ON 11.12.2 015 AGAIN LETTER WAS SENT TO THE ASSESSEE FOR SUBMISSION OF DOCUMENT ARY EVIDENCES IN SUPPORT OF HIS CLAIM FOR 18.12.2015, FAILING WHICH REPORT WILL BE SUBMITTED ON THE MATERIAL/FACTS AVAILABLE ON RECORD . ITA NO. 2194/DEL/2017 SUNITA RANI 17 8.3 RESPONSE OF THE APPELLANT: ALL THE ABOVE REPORT S WERE GIVEN TO THE APPELLANT AND. FINALLY A WRITTEN SUBMISSION WAS FILED ON HER BEHALF ON WHEREIN THE FOLLOWING WAS SUBMITTED: SUNDRY CREDITORS THE AO HAS ERRED ON FACTS AND IN LAW WHILE MAKING A DDITION AMOUNTING RS.67,07,216/- ON ACCOUNT OF CREDITORS. D URING REMAND PROCEEDINGS AT THE TIME OF 1V REMAND REPORT, CONFIR MATION LETTERS WERE SENT TO FIVE CREDITORS OUT OF SEVEN AND THREE CONFIRMATIONS HAD BEEN RECEIVED BY LD. AO FROM M/S. GUJRAT COTTON FAB RS3,80,826/-, M/S SANTOSH FINE FAB LTD. RS.7,18,428/- AND M/S. AH MADABAD COTTON MFG CO. RS1,56,470/-. THE FACT HAS BEEN STAT ED BY LD. AO IN THE REMAND REPORT DATED 15.07.2015. AS FAR AS M/S. NIRMAL TEXTILES AMOUNTING RS. 3,24,2 04/- IS CONCERNED (HEY HAVE CONFIRMED US THAT THEY HAVE NOT RECEIVED ANY LETTER FROM SONIPAT INCOME TAX OFFICE AND WITH REGARD TO M/S. G OEL TRADERS AMOUNTING RS. 8,15,818/- IS CONCERNED, THEY HAVE RE FUSED TO CO- OPERATE UNTIL THEIR DEBTS ARE PAID OFF IN FULL. M/S. S.R. ENTERPRISES ANOTHER CREDITOR FOR RS. 10,4 3,574/- HAD ALREADY FILED THE CONFIRMATION TO LD. AO WHICH IS T HERE ON RECORDS IN THE FILE OF AO, HOWEVER DESPITE BEING REMINDED BY A R OF APPELLANT, THE LD. AO CHOSE TO IGNORE THE FACT AND NOT TAKEN T HE SAME IN HIS CURRENT REMAND REPORT. 8.4. ENQUIRY IN APPEAL PROCEEDINGS:- ON THIS ISSUE THE APPELLANT SUBMITTED THAT THREE PARTIES NAMELY M/S R UCHI ENTERPRISES, S.R. ENTERPRISES AND NIRMAL TEXTILES ARE READY TO C ONFIRM THE ACCOUNTS. IN ORDER TO VERIFY THE CORRECTNESS OF THE CLAIM, NOTICES WERE ISSUED FROM THIS OFFICE VIDE LETTER DATED 22.1 2.2016 IN THESE THREE PARTIES FOR CONFIRMING THE BALANCE. HOWEVER, THE NOTICES CAME BACK. 8.4.1. ON RETURN OF THE NOTICES THE APPELLANT WAS G IVEN OPPORTUNITY ON 29.12.2016 WITH THE FOLLOWING LETTER: 'THE AFORESAID APPEAL IS PENDING AND IN THE APPEAL PROCEEDING THIS OFFICE ISSUED NOTICE TO THE FOLLOWING CONCERNS IN O RDER TO VERIFY THE CORRECTNESS OF SUBMISSIONS MADE BY YOU AT THE ADDRE SSES PROVIDED BY YOU. HOWEVER, ALL THE LETTERS HAVE BEEN RECEIVED BACK WITH THE FOLLOWING POSTAL REMARKS: SR. NO. PARTICULARS REMARKS 1 M/S NIRMAL TEXTILES, LD - 62, PITAM PURA, DELHI - 110024 IS NAM KA KOI PRAPTKARTA NAHI HAI. ITA NO. 2194/DEL/2017 SUNITA RANI 18 2 M/S S.R. ENTERPRISES, 3085, SUNDER NAGAR, NEAR BIKANER SWEET, LUDHIANA -141001. SUPPORT ADDRESS, NO. STREET NO. 3 M/S RUCHI ENTERPRISES, 88, 2 ND CAVED CROSS LANE, ROOM NO. 14, T D FLOOR, DADESETH AGIARY LANE, KALBA DEVI, MUMBAI-2. NOT KNOWN 2. YOU ARE HEREBY GIVEN AN OPPORTUNITY TO PRODUCE T HESE PERSONS IN SUPPORT OF YOUR CLAIM. THE CASE IS FIXED FOR HEARIN G ON 13.01.2017. IN RESPONSE NOTHING WAS SUBMITTED. 8.5 IN ORDER TO GIVE SUBSTANTIAL JUSTICE TO THE APP ELLANT, THIS OFFICE IN THE COURSE OF APPELLATE PROCEEDINGS ISSUED LETTE RS/ NOTICE UNDER SECTION 133(6) OF INCOME TAX ACT TO THE FOLLOWING P ARTIES FOR CONFIRMATION OF THE CREDIT AMOUNT. THESE NOTICES RE MAINED UN-SERVED WITH THE FOLLOWING REMARKS: I. IS NAM KA KOI PRAPTKARTA NAHI HAI. II. SUPPORT ADDRESS, NO STREET NO. III. NOT KNOWN. IT CAN BE SEEN FROM THE AFORESAID, THAT THE CREDITO RS OF THE APPELLANT ARE NOT GENUINE AND THEREFORE THE CONTENTION REMAIN S UNSUBSTANTIATED. THE APPELLANT BY ORDER SHEET DATED 16.01.2017 WAS PROVIDED WITH AN OPPORTUNITY TO PRODUCE THE AFORESA ID 3 CREDITORS BUT NO SUCH CREDITOR WAS PRODUCED BEFORE THE UNDERSIGNE D. 8.5.1. IN THE REMAND PROCEEDINGS, ONLY THE FOLLOWI NG CREDITORS HAVE CONFIRMED THE BALANCES FOR WHICH RELIEF CAN BE GIVE N TO THE APPELLANT: SL. NO. NAME AMOUNT (I) GUJARAT COTT. FAB 3,80,826/- (II) SANTOSH FINE FAB LTD. 7,18,428/- (III) AHMADABAD COTTON MFG CO. 1,56,470/- 12,55,724/ - 8.6. I HAVE GIVEN CAREFUL CONSIDERATION TO THE ENTI RE FACTS OF THE CASE AND FIND THAT THE APPELLANT FAILED TO DISCHARG E INITIAL ONUS' OF PROVING GENUINENESS OF ITS SUNDRY CREDITORS. EVEN D URING ENQUIRY BY THE AO AND THIS OFFICE ONLY THREE CREDITORS CONFIRM ED BALANCE. IN CONSIDERATION OF THE FACTS ABOVE, OUT OF TOTAL A DDITION OF RUPEES RS.67,07,216/- ON ACCOUNT OF SUNDRY CREDITORS, THE APPELLANT GETS A RELIEF OF RS. 12,55,724 AND THE BALANCE AMOUNT OF R S. 54,51,492/- IS CONFIRMED. THE GROUND OF APPEAL IS PARTLY ALLOWED. ITA NO. 2194/DEL/2017 SUNITA RANI 19 COMMISSION AMOUNT: 18. THE ASSESSING OFFICER MADE ADDITION OF COMMISSI ON PAID OWING TO THE ABSENCE OF DETAILS OF THE PERSONS TO WHOM THE C OMMISSION HAS BEEN PAID. THE ASSESSEE COULD NOT EVEN PROVIDE DETAILS W HETHER ANY TDS HAS BEEN DEDUCTED ON THIS AMOUNT OR NOT. THE TOTAL DISA LLOWANCE MADE BY THE ASSESSING OFFICER WAS RS.55,69,337/- ON ACCOUNT OF COMMISSION. THIS AMOUNT CONSISTS OF COMMISSION PAID AMOUNTING TO RS. 16,01,337/- AND MINIMUM GUARANTEE PAID TO /SHOP-OWNERS/SHOWROOM OWN ERS/DEALERS (BEING REIMBURSEMENT OF EXPENSES INCURRED ON SHOP/S HOWROOM BY DEALER AS PER THE TERMS OF AGREEMENT) AMOUNTING RS.39,68,0 00/-. EVEN, THE MINIMUM GUARANTEE AND REIMBURSEMENT HAS NOT BEEN SU PPORTED BY THE ASSESSEE SO AS TO MAKE HER ELIGIBLE FOR DEDUCTION U /S 37 OF THE INCOME TAX ACT, 1961. THE DETAILS OF THE PAYMENTS HAVE NOT BEE N SUBMITTED. EVEN, THOUGH THE ASSESSEE CLAIMS THAT THE EVIDENCES HAVE BEEN LOST IN FIRE, THE SAME COULD HAVE BEEN AS WELL PROVED BY THE BANK ACC OUNTS BY WAY OF TRANSFER OF FUNDS OR FLOW OF FUNDS TO THE COMMISSIO N AGENTS OR EVEN THE CONFIRMATION FROM THE AGENTS WHO RECEIVED THE AMOUN TS COULD HAVE GONE A LONG WAY IN PROVING THE EXPENDITURE. HOWEVER, WE FIND FROM THE RECORD THE ASSESSEE HAS FAILED TO SUPPORT HIS CLAIM IN ANY OF THE ACCEPTABLE FORMS. HENCE, THE DEDUCTION CLAIMED BY THE ASSESSEE IS HEREBY CONFIRMED. 19. FOR THE SAKE OF READY REFERENCE, THE ORDER OF T HE LD. CIT (A) IS REPRODUCED AS UNDER:(PAGE NO. 23 PARA 9.1 TO PAGE N O. 25 PARA 9.4) 9.1 ADDITIONAL EVIDENCE: IN THE APPEAL PROCEEDINGS , THE APPELLANT HAS GIVEN ADDITIONAL EVIDENCE FOR EXPLAINING THE CO NTENTION THAT THE SAID AMOUNT CONSISTS OF COMMISSION PAID AMOUNTING RS. 16,01,337/- AND MINIMUM GUARANTEE AMOUNTING RS.39,6 8,000/- PAID TO / SHOP-OWNERS / SHOWROOM-OWNERS / DEALERS (BEING REIMBURSEMENT OF EXPENSES INCURRED ON SHOP/SHOWROOM BY DEALER AS PER THE TERMS OF AGREEMENT). THE APPELLANT APPOINTE D VARIOUS DEALERS AS THEIR EXCLUSIVE BRAND FRANCHISEE AND THE Y WERE ALLOWED TO DEAL IN ALL MERCHANDISES OF THE APPELLANT THROUGH T HEIR SHOWROOM. THE APPELLANT WOULD DISPATCH AND DELIVER THE GOODS TO DEALERS ON CONSIGNMENT BASIS AT THE SHOWROOM PREMISES AND IN T URN THOSE ITA NO. 2194/DEL/2017 SUNITA RANI 20 DEALERS AFTER DEPOSIT OF CERTAIN AMOUNT AS SECURITY DEPOSIT AS PER THE AGREEMENT FOR THE DUE PERFORMANCE OF THE TERMS AND CONDITION OF THE AGREEMENT. IN RETURN OF SERVICES, A PARTICULAR SUM OF AMOUNT WAS TO BE PAID BY THE APPELLANT TO REGISTERED DEALERS ON M ONTHLY BASIS AS REIMBURSEMENT OF EXPENSES. THE DEALERS WERE ENTITLE D TO COMMISSION AS PER THE TERMS OF AGREEMENT. IN SUPPORT OF CONTEN TION COPIES OF SOME OF THE AGREEMENTS WERE FILED. DURING REMAND PR OCEEDINGS, A PARTIAL LIST OF PERSONS TO WHOM COMMISSION HAD BEEN PAID WAS GIVEN TO THE ASSESSING OFFICER. 9.2 REMAND REPORTS: THE ASSESSING OFFICER HAS EXAMI NED THE ADDITIONAL EVIDENCE AND CONTENTIONS OF THE APPELLAN T. AFTER DUE CONSIDERATION SUBMITTED THE FOLLOWING REPORTS: A) IN REPORT-1, DATED 30.06.2015 THE FOLLOWING WAS REPORTED THAT: AS PER BALANCE SHEET ASSESSEE HAS SHOWN LIABILITY O F RS. 1,07,00,000/- ON ACCOUNT OF SECURITY DEPOSIT. DURIN G REMAND PROCEEDINGS ALSO ASSESSEE ONLY SUBMITTED COPY OF AG REEMENT WITH MANY PARTIES FROM WHICH IT IS NOT CLEAR THAT THE AC TUALLY THE TRANSACTION HAVE TAKEN PLACE OR NOT . THOUGH ASKED SPECIFICALLY ASSESSEE HAS NOT GIVEN ANY DETAIL/PROOF/BANK ACCOUN T STATEMENT ETC. IN THIS REGARD. HENCE ADDITIONAL EVIDENCE TOWARDS A DDITION OF RS. 1,07,00,000/- ON ACCOUNT OF LIABILITIES STANDS UNEX PLAINED. 5. AS PER BALANCE SHEET ASSESSEE HAS RAISED LOANS T HROUGH BANKS OF RS.1,07,00,000/- AND. BUT THOUGH ASKED DURING ASSTT . PROCEEDINGS ASSESSEE DID NOT EVEN EXPLAINED ACCOUNT NO. AND THE NAME OF THE BANKS AND PERSONS FROM WHOM LOAN WERE TAKEN. DURING REMAND PROCEEDINGS BANK STATEMENT FROM PUNJAB NATIONAL BAN K AND ANDHRA BANK WAS CALLED FOR WHICH REVEALED THAT DURING THE YEAR ASSESSEE WAS HAVING CC ACCOUNT NO. 1710008700001131 WITH PNB WITH LIABILITY OF RS. 74,34,788/- AND HAVING O.D. ACCOUN T NO. 117731100000229 WITH ANDHRA BANK HAVING LIABILITY O F RS. 28,60,136/- WHICH MAY BE DECIDED ON MERITS. B) IN REPORT-2, DATED 17.12.2015 ON THIS ISSUE THE ASSESSING OFFICER FURNISHED NO FURTHER COMMENTS BUT REITERATE D THE COMMENTS EARLIER SUBMITTED IN THESE REPORT. 9.3. IN REBUTTAL TO THE ABOVE THE APPELLANT VIDE SU BMISSIONS DATED 19.10.2015 ON THE POINT OF COMMISSION SUBMITTED AS UNDER: 'THE AO HAS ERRED ON FACTS AND IN LAW WHILE MAKING ADDITION AMOUNTING RS. 55,69,337/- ON ACCOUNT OF COMMISSION. THIS AMOUNT CONSISTS OF COMMISSION PAID AMOUNTING RS. 16,01,337 /- AND MINIMUM GUARANTEE PAID TO /SHOP- OWNERS/SHOWROOM- OWNERS/DEALERS (BEING REIMBURSEMENT OF EXPENSES INC URRED ON SHOP/SHOWROOM BY DEALER AS PER THE TERMS OF AGREEME NT) AMOUNTING RS. 39,68,000/-. ITA NO. 2194/DEL/2017 SUNITA RANI 21 THE MODEL OF THE FRANCHISEE BUSINESS OF M/S BRU INT ERNATIONAL IS AS FOLLOWS: M/S BRU INTERNATIONAL APPOINTED VARIOUS DEALERS AS THEIR EXCLUSIVE BRAND FRANCHISEE, AND THEY WERE ALLOWED TO DEAL IN ALL BRU FASHION MERCHANDISES THROUGH THEIR SHOWROOM. M/S BRU INTERN ATIONAL WAS SUPPOSED TO DISPATCH AND DELIVER THE GOODS TO DEALE RS ON CONSIGNMENT BASIS AT THE SHOWROOM PREMISES. THOSE D EALERS WERE SUPPOSED TO DEPOSIT CERTAIN AMOUNT AS SECURITY DEPO SIT WITH M/S. BRU INTERNATIONAL AS PER THE AGREEMENT FOR THE DUE PERF ORMANCE OF THE TERMS AND CONDITION OF THE AGREEMENT. THAT A PARTIC ULAR SUM OF AMOUNT WAS TO BE PAID BY M/S BRU INTERNATIONAL TO R EGISTERED DEALERS ON MONTHLY BASIS AS REIMBURSEMENT OF EXPENSES. THE DEALERS WERE ENTITLED TO COMMISSION AS PER THE TERMS OF AGREEMEN T. AGREEMENTS SUBSTANTIATING THE ABOVE CLAIMS HAD ALRE ADY BEEN FILED WITH YOUR HONOUR IN OUR SUBMISSION DATED 20.02.2015 PAGE NO. 39 TO 150 OF THE PAGE BOOK. DURING REMAND PROCEEDINGS, COMPLETE LIST OF PERSONS TO WHOM COMMISSION HAD BEEN PAID, HAVE BEEN FILED WITH LD. AO ALONG WITH COPY OF AGREEMENTS CONTAINING COMPLETE ADDRESS OF P AYEES. THE LD. .40 HAS NOT GIVEN ANY COMMENT IN HIS REMAND REPORT REGARDING PAYMENT OF COMMISSION TO DEALERS WHICH SHOWS THAT T HE LD. AO HAS NOTHING TO COMMENT IN THIS REGARD. YOUR HONOR WILL APPRECIATE THAT DURING THE CAPTIONE D YEAR APPROX. RS. 5,25,00,000/- HAD BEEN PAID FROM VARIOUS BANKS FOR VARIOUS EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT. 9.4 I HAVE GIVEN CAREFUL CONSIDERATION TO THE ABOVE AND FIND THAT THE APPELLANT HAS NOT GIVEN ANY DIRECT EVIDENCE OF PAYMENT OF COMMISSION BUT MERELY STATED THAT A PART OF IT CONS TITUTE MINIMUM GUARANTEE PAID (RS.39,68,337) AND REIMBURSEMENT OF EXPENSES (RS.39,68,000) AS PER THE AGREEMENT ENTERED WITH TH E DEALERS/SHOP OWNERS/SHOWROOM OWNERS. HOWEVER, AS PER PROVISIONS OF SECTION 37(1) OF THE I.T, ACT THE APPELLANT HAS TO PROVE TW O ELEMENTS, IN RESPECT OF ANY EXPENSE ONE IS THAT SUCH EXPENSE HAS BEEN INCURRED AND SECONDLY IT HAS BEEN EXPANDED FOR THE PURPOSES OF BUSINESS. IN THE PRESENT CASE BY MERELY PRODUCING DEALERS AGREEM ENT /CONTEMPLATED SUM MINIMUM GUARANTEE/REIMBURSEMENT B Y ITS IS NOT ENOUGH EVIDENCE TO ESTABLISH THAT THE CLAIMED AMOUN T HAS ACTUALLY BEEN SPENT. NO DIRECT EVIDENCE OF MODE OF PAYMENT, DATE OF PAYMENT ETC. HAS BEEN GIVEN BY THE APPELLANT. IN ABSENCE OF SUCH DETAILS THE VERACITY OF EXPENSE CANNOT BE VERIFIED BY THE AO. T HE APPELLANT MERELY CLAIMED THAT EVIDENCE HAS BEEN LOST IN TIRE BUT AT THE SAME TIME SHE COULD HAVE LED SECONDARY EVIDENCE BY PRODU CING SUCH PARTIES AND OBTAINING DETAILS FROM SUCH PARTIES ABO UT THE PAYMENT OF THE SAID SUM. THE INITIAL ONUS HAS NOT BEEN DISCHAR GED BECAUSE BY ITA NO. 2194/DEL/2017 SUNITA RANI 22 MERELY PROVIDING LIST NO FRUITFUL ENQUIRY CAN BE CO NDUCTED UNTIL AND UNLESS FURTHER DETAILS ARE GIVEN. THESE AGENTS WERE ALLEGEDLY IN FIDUCIARY RELATIONSHIP WITH THE APPELLANT AND IT WA S MUCH EASIER FOR HER TO OBTAIN CONFIRMATION OF ACCOUNTS FROM THE SAI D AGENTS. SHE HAS NOT TAKEN ANY SUCH STEPS AND THEREFORE PRIMA FACIE GENUINENESS OF EXPENDITURE IS IN DOUBT. FURTHER, THE BUSINESS PURP OSE OF THE EXPENSE HAS ALSO TO BE DEMONSTRATED BESIDES THE PAY MENT WHICH IS MISSING IN THIS CASE BECAUSE NONE OF THE AGENT HAS BEEN EXAMINED BY THE APPELLANT. UNDER THESE CIRCUMSTANCES THE AO HAS CORRECTLY DISALLOWED THE EXPENSE CLAIMED, THEREFORE, GROUND O F APPEAL IS DISMISSED. ADVERTISEMENT: 20. FOR THE SAKE OF READY REFERENCE, THE ORDER OF T HE LD. CIT (A) IS REPRODUCED AS UNDER: (PAGE NO.25 PARA 10 ) 10. ADDITION OF RS.2,39,210/- ON ACCOUNT OF ADVER TISEMENT EXPENSES: THE DISALLOWANCE OF THIS EXPENSE HAS BEEN MADE BY THE ASSESSING OFFICER BECAUSE NO EVIDENCE OF ANY NATURE WAS PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OF FICER INTENDED TO VERIFY THE CORRECTNESS OF CLAIM OF EXPENSE AND I TS ALLOW-ABILITY AS PER THE PROVISIONS OF INCOME TAX ACT BUT THE APPELL ANT HAS PAID TO ADDUCE ANY EVIDENCE IN SUPPORT OF ITS CLAIM. MOREOV ER DURING THE APPELLANT PROCEEDINGS ALSO NO PRAYER FOR ADDITIONAL EVIDENCE HAS BEEN FILED IN SUPPORT OF THIS CONTENTION. UNDER THE CIRCUMSTANCES, THE GROUND OF APPEAL IS DISMISSED. 21. WE FIND FROM THE RECORD THAT THE ASSESSEE HAS N OT PRODUCED ANY EVIDENCE TO SUPPORT THE CLAIM OF EXPENDITURE. IN TH E ABSENCE OF ANY EVIDENCES OR PROOF SUBMITTED BY THE ASSESSEE, THESE EXPENSES CANNOT BE ALLOWED AS UTILIZED FOR THE PURPOSE OF BUSINESS. TH E ORDER OF THE LD. CIT (A) IS CONFIRMED ON THIS GROUND. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2020. SD/- SD/- (KULDIP SINGH) (D R. B. R. R. KUMAR) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 24/02/2020 *SUBODH*