Assistant Commissioner Of Income Tax, CHHINDWARA V. Smt.Leena Patel, CHHINDWARA

ITA 226/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1075 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 20-09-2013
• Court: TRIBUNAL
• Department Lawyers: V B SARGOR
• Assessee Lawyers: G N PUROHIT
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence; Fair market value; Onus to prove; Audi alteram partem
• Section: 40A(3); 69B; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.226/JAB/2013 A.Y. : 2007-08 ACIT, CIRCLE CHHINDWARA VS SMT.LEENA PATEL,PROP. UMIYA GINNING, SAUSAR, DISTT. CHHINDWARA APPELLANT RESPONDENT PAN NO. : ADBPB5882B APPELLANT BY : SHRI V.B.SARGOR, DR RESPONDENT BY : SHRI G.N.PUROHIT, ADV. DATE OF HEARING : 28 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 09 . 0 6 .201 5 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-I, JABALPUR, DATED 15.07.2013 FOR THE ASS ESSMENT YEAR 2007-08. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE DEPARTMENT :- 1. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 64,36,563/- MADE FOR UNDISCLOSED INVESTMENT IN PURCHASE OF RAW COTTON WITHOUT APPRECIATING THE FACT THAT THE TWO PERSONS LE. SELLERS SHESH RAO AND SATISH HAVE IN THEIR AFFIDAVITS DATED 4/12/2009 AND 3/L2/2009 RESPECTIVELY FILED BEFORE THE AO STATED THAT THEY HAVE SOLD RAW COTTON PRODUCED IN THEIR LAND TO THE ASSESSEE AND THE CIT(A) FAILED TO APPRECIATE THE FACT THAT GINNING WAS A TECHNICAL PROCESS WHICH REQUIRED COSTLY MACHINE AND THIS WAS BEYOND THE -: 3: - 3 CAPACITY AND ECONOMIC LIMIT OF THE FARMERS AND IT WAS NOT POSSIBLE FOR THE FARMERS TO SELL GINNED COTTON AND THAT THE ASSESSEE HAS TRIED TO PLACE NEW AFFIDAVITS AT THE APPEAL STAGE TO SUIT ITS STAND. 2. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT REPORTED BY THE AO IN THE REMAND REPORT DATED 27.03.2012 DISCUSSED BY HIM AT PAGE 11 OF THE APPELLATE ORDER THAT THE FRESH AFFIDAVITS FILED ARE SELF SERVING STATEMENTS AND ARE AFTERTHOUGHTS. THE AO HAS IN SUBSEQUENT REMAND REPORTS DATED 12/10/2012 (DISCUSSED BY THE CIT(A) AT PAGE 12) AND REMAND REPORT DATED 18/12/2012 ( DISCUSSED AT PAGE 14) POINTED OUT THAT THE ARGUMENT OF THE ASSESSEE IS NOT ACCEPTABLE. THE CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE SELLERS HAVE CLAIMED TO HAVE SOLD GINNED COTTON IN THE SECOND SET OF AFFIDAVITS WITHOUT ANY EVIDENCE REGARDING POSSESSION OF MACHINERY TO CARRY OUT GINNING -: 4: - 4 WORK . ONUS WAS ON THE ASSESSEE TO PROVE HER CLAIM THAT THE SELLERS HAVE SOLD GINNED COTTON TO HER AND MERE FILING OF REVISED AFFIDAVITS CANNOT BE ACCEPTED AS PROOF OF THE SAID FACT. 3. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT A MERE AFFIDAVIT PERSE DOES NOT BECOME EVIDENCE, IT CANNOT BE USED AS EVIDENCE TO PROVE A PARTICULAR FACT. IT HAS BEEN HELD BY COURTS THAT AFFIDAVIT WITHOUT GIVING SOURCE OF KNOWLEDGE OR INFORMATION, VERIFICATION MAKES THE AFFIDAVIT MEANINGLESS. IF THE ABOVE INGREDIENTS ARE MISSING AFFIDAVIT NEED NOT BE ONE AS REQUIRED BY LAW. RELIANCE IS MADE ON THE DECISION IN THE CASE OF SUKWINDER PAL BIPEN KUMAR VS STATE OF PUNJAB, AIR 1982 HON'BLE SUPREME COURT (65). 4. THE CIT(A) ERRED IN APPRECIATING THE FACT THAT ASSESSEE HAD NO RIGHT TO FILE ANY AFFIDAVIT OF ANY FARMER OF ITS OWN, WHEN NEITHER CIT(A)/ AO HAD REQUIRED THE -: 5: - 5 ASSESSEE TO FURNISH ANY AFFIDAVIT. - RELIANCE ON ITAT AHMEDABAD BENCH IN THE CASE OF SHREE CHAL THAN VIBHAG KHAND UDYOG SAHAKARI MANDI LTD. VS. ITO -104 TTJ 654(AHD). 5. THE CIT(A) HAS ERRED IN DELETING THE ADDITION RELYING ON DECISION OF I.T.A.T., JABALPUR BENCH IN THE CASE OF SANJAY RATHI VS ITO IN ITA NO. 12/JAB/11 DATED 03.02.2012 WITHOUT NOTING THAT THE FACTS ARE DIFFERENT IN THAT CASE END THE ISSUE INVOLVED IN THAT CASE WAS DIFFERENT BEING DISALLOWANCE UNDER SECTION 40A(3) AND HERE IN THE INSTANT CASE THE FARMERS DO NOT HAVE GINNING MACHINES AND HAVE GIVEN STEREOTYPED AFFIDAVITS. EVEN OTHERWISE THE DECISION OF ITAT IN THE CASE OF SANJAY RATHI HAS BEEN CHALLENGED BEFORE THE HON'BLE HIGH COURT BY THE DEPARTMENT. 6. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.64,36,563/- MADE AS UNEXPLAINED -: 6: - 6 INVESTMENT U/S. 69 OF IT ACT WITHOUT APPRECIATING THE FACT THAT THE AO HAS CLEARLY WORKED OUT UNEXPLAINED INVESTMENT MADE IN PURCHASE OF RAW COTTON WHICH HAS NOT BEEN SHOWN IN THE BOOKS BY THE ASSESSEE AS PER PARA 5 OF THE ASSESSMENT ORDER. 7. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE LAW LAID DOWN BY CALCUTTA HIGH COURT IN THE CASE OF UNIT CONSTRUCTION CO. LTD. VS. JCIT REPORTED IN 260 ITR 189 AS UNDER :- IT IS APPARENT FROM SECTIONS 69 AND 69B THAT FOR MAKING AN ADDITION, IT IS NOT NECESSARY THAT THE BOOKS OF ACCOUNT HAVE TO BE REJECTED EXPRESSLY OR THAT IT IS TO BE, IN EXPRESS TERMS, RECORDED THAT THE BOOKS OF ACCOUNT ARE NOT RELIABLE OR THE EXPLANATION IS NOT SATISFACTORY, BUT IT HAS TO BE GATHERED FROM THE ORDER ITSELF WHETHER IN EFFECT THE ASSESSING OFFICER WAS SATISFIED WITH THE EXPLANATION OR HAD FOUND -: 7: - 7 THAT THE BOOKS OF ACCOUNT WERE NOT RELIABLE. IT IS NOT THE TECHNICAL TERMS, WHICH MUST APPEAR IN THE ORDER. IT IS THE SUBSTANCE OF THE ORDER THAT THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION WHICH IS RELEVANT. WHERE ACCOUNTS ARE NOT REFLECTED IN THE ACCOUNT BOOKS, IT CAN BE EXPLAINED BY THE ASSESSEE, WHO UNDER SECTION 69 IS ENTITLED TO AN OPPORTUNITY TO EXPLAIN. IF IN THE OPINION OF THE ASSESSING OFFICER THE EXPLANATION IS NOT SATISFACTORY, THE INCOME CAN BE ADDED. THE PHRASEOLOGY OF SECTION 69 CREATES A LEGAL FICTION.' 8. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 64,36,563/- MADE AS UNEXPLAINED INVESTMENT BY MERELY RELYING ON THE SECOND SET OF AFFIDAVIT FROM THE SELLERS WHICH WERE PREPARED MUCH AFTER THE ASSESSMENT WAS COMPLETED AND AT THE APPEAL STAGE AS THESE WERE AFTER THOUGHTS. THE CIT(A) ERRED IN NOT APPRECIATING THE LAW -: 8: - 8 LAID DOWN IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 (SQ WHEREIN IT WAS HELD AS UNDER :- 'NOW WE SHALL PROCEED TO EXAMINE THE VALIDITY OF THOSE GROUNDS THAT APPEALED TO THE LEARNED JUDGES. (IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS. OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS IN DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND RELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE -: 9: - 9 TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. 9. THE CIT(A) ALSO ERRED IN DELETING THE ADDITION ON THE GROUND THAT NO FACTUAL AND ON FIELD INVESTIGATION FOR VERIFICATION WAS MADE BY THE AO , WHEN AS APPELLATE AUTHORITY POWERS OF CIT(A) ARE WIDE ENOUGH TO BE COTERMINOUS WITH THOSE OF AO AND HE CAN DIRECT THE AO TO DO WHAT HE HAS FAILED TO DO SO .THUS HE COULD HAVE CAUSED APPROPRIATE INVESTIGATION TO BE MADE IN THIS CASE AS HE IS ALSO A FACT FINDING AUTHORITY. THERE ARE JUDICIAL DECISIONS TO SAY THAT ADDITION CANNOT BE DELETED BY CIT(A) SOLELY ON THE GROUND THAT THE AO DID NOT MAKE ANY INQUIRY . 10. THE CIT(A) ERRED IN DELETING THE ADDITION -: 10: - 10 OF RS.5,33,078/- ON ACCOUNT OF GP ON SALE OF COTTON SEEDS OUT OF BOOKS WITHOUT APPRECIATING THE REASONING AND BASIS GIVEN BY THE AO IN THE ASSESSMENT ORDER. GROUND NOS. 1 TO 9: 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER :- 4. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 31.10.2007. THE ASSESSEE DERIVES INCOME FROM PROCE SSING OF RAW COTTON, GINNING AND PRESSING OF COTTON AND SALE OF COTTON BALES. DURING THE ASSESSMENT PROCEEDINGS, IT WAS FO UND FROM THE BOOKS OF ACCOUNT OF THE ASSESSEE THAT THE ASSES SEE PURCHASED GINNED COTTON FROM THE PERSONS BELOW RS. 20,000/- AND HE WAS SELLING REPEATEDLY. THE AO HAS DIRECTED THE ASSESSEE TO GIVE THE COMPLETE ADDRESSES, FARMERS N AMES AND EVIDENCES REGARDING IDENTITY AS FARMERS. 5. DURING THE ASSESSMENT PROCEEDINGS, ONE SHRI SHESH RAO S/O ATMARAM BHUJADE R/O PARDSINGA, HAS GIVEN T HE AFFIDAVIT THAT HE HAS SOLD RAW COTTON PRODUCED AT HIS LAND. SIMILARLY, SHRI SATISH S/O BRIJ MOHAN JAWDHIYA HAS ALSO STATED THAT HE IS GROWN RAW COTTON ON 40 ACRES OF L AND SINCE -: 11: - 11 LAST SO MANY YEARS AND HIS AGRICULTURAL PRODUCE BEI NG SOLD TO M/S. INDIA GINNING PROCESSING. THUS, THESE AGRICULT URISTS ADMITTED IN THEIR AFFIDAVITS THAT THEY ARE SELLING RAW COTTON TO ASSESSEE. THE AO HAS VERIFIED THE BOOKS OF ACCOUNT AND HE WAS OF THE VIEW THAT IF THE ASSESSEE PURCHASED RAW COTT ON, THEN THE ASSESSEE HAS TO PAY MANDI TAX AS NIRASHRIT SHULK, W HICH IS 2.2 % AND ENTRY TAX WHICH THE ASSESSEE IS SHOWING DIRE CTLY FROM THE GINNED COTTON. THESE PERSONS DO NOT PRODUCE AGR ICULTURAL PRODUCE UNDER MANDI TAX ACT. THEREFORE, THE ASSESSE E HAS PURCHASED GINNED COTTON 4757.33 QTLS. AND ASSESSEE HAS NOT PAID ANY TAX AND TAKING THE RATIO OF GINNED COTTON AND COTTON SEEDS, THE AO HAS MADE THE ADDITION OF RS. 64,36,56 3/- U/S 69 OF THE INCOME-TAX ACT, 1961. 6. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS DELETED BY OBSERVING AS UNDER :- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE VARIOUS SUBMISSIONS AND COUNTER SUBMISSIONS AND REMAND REPORTS FURNISHED BY THE ASSESSING OFFICER. MY FINDING IS AS UNDER :- -: 12: - 12 1. WHOLE BASIS OF THE ADDITION OF BY THE ASSESSING OFFICER IS THE ORIGINAL TWO AFFIDAVITS SUBMITTED BY THE TWO PERSONS BEFORE HIM. THE STATEMENTS RECORDED SUBSEQUENTLY WERE IN COURSE OF REMAND REFERENCE AND CANNOT BE SAID TO BE PART OF BASIS FOR ADDITION . 2. THERE WAS NO FACTUAL AND ON FIELD INVESTIGATION FOR VERIFICATION OF THE SAME AND ENTIRE RELIANCE HAS BE EN PLACED BY THE ASSESSING OFFICER ON THE AFFIDAVITS. 3. IT IS A FACT THAT ADVERSE INFERENCE WAS NOT CONFRON TED TO THE ASSESSEE WHICH COULD HAVE LET TO AN ADEQUATE EXPLANATION ON PART OF THE ASSESSEE. DUE TO THIS TH E ASSESSEE WAS CONSTRAINED TO SUBMIT A PETITION OF ADDITIONAL EVIDENCE TO VERIFY THE SITUATION. SUCH L IKE CALLOUS DISREGARD OF PRINCIPLES OF NATURAL JUSTICE IS SUFFICIENT IN ITSELF TO EXPOSE A PREDETERMINED MIND SET AND DISDAINFUL IGNORANCE OF A TAXPAYERS RIGHTS. TH E FOLLOWING IS INSTRUCTIVE IN THIS REGARD. 9. THE COURTS HAVE HELD THAT, UNLESS THE LAW EXPRESSLY OR BY NECESSARY IMPLICATION EXCLUDES THE APPLICATION OF THE RULES OF -: 13: - 13 NATURAL JUSTICE, THE SAID REQUIREMENT HAS TO BE READ IN ENACTMENTS THAT ARE SILENT. IT IS WELL-SETTLED THAT THE PRINCIPLES OF NATURAL JUSTICE SHALL BE PRESUMED TO BE NECESSARY UNLESS THESE EXISTS A STATUTORY INTERDICT. THE PRINCIPLES OF NATURAL JUSTICE, A CARDINAL PART OF WHICH IS AUDI ALTERAM PARTEM, IS THE BEDROCK OF ALL QUASI JUDICIAL DETERMINATIONS. 11. AND, THE SUPREME COURT HAS APTLY CAUTIONED, SAYING THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION WERE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVED TO BE PREFERRED. A. SHAIK MOHIDEEN VS. ITO, (2009)123 TTJ 411 (CHENNAI) I.T.A.T., CHENNAI A BENCH. 4. EVEN THE STATEMENT WHICH IS RECORDED IN COURSE OF REMAND REFERENCE AGAINST REITERATES THE SAME THING. -: 14: - 14 IN FACT, THESE STATEMENTS GO ON TO PROVE THE CONTENTION OF THE ASSESSEE THAT BOTH RAW COTTON AND GINNED COTTON WERE SOLD BY THESE TWO PARTIES OF THE ASSESSEE. 5. AS COMMENTED ABOVE, NO FOLLOW UP INVESTIGATION WAS TAKEN UP BY THE ASSESSEE WHICH MAY HAVE LED TO CREDIBLE EVIDENCE BEING CREATED WHICH COULD HAVE SUPPORTED THE CONCLUSION DRAWN BY THE ASSESSING OFFICER. IN VIEW OF THIS LACKADAISICAL APPROACH OF THE AO THE INVESTIGATION HAS BEEN RENDERED TOOTHLESS AND INADEQUATE. CONFIRMATION OF ADDITION ON THE BASIS OF MERE AFFIDAVITS WHICH STAND COUNTERED IN ANY CASE BY SUBSEQUENT AFFIDAVITS IS NOT POSSIBLE. THEN THERE IS THE FURTHER ASPECT OF SECTION 69 NOT BEEN APPLICABLE TO THE FACTS OF THE CASE, WHICH, ON FIRST FLUSH, APPEARS TO BE CORRECT. THE ASPECT OF GINNED COTTON BEING AGRICULTURE PRODUCE AS ALSO HEL D BY THE HON'BLE I.T.A.T. IN THE CASE OF SANJAY RATHI I I.T.A.NO. 12/JBP/11, DATED 3.2.2012 ALSO HAS CONSIDERABLE FORCE. -: 15: - 15 IN VIEW OF THE ABOVE DISCUSSION, I AM LEFT WITH NO ALTERNATIVE EXCEPT TO DELETE THE ADDITION WHICH HAS BEEN MADE BY THE ASSESSING OFFICER. 7. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES. LOO KING TO THE FACTS AND CIRCUMSTANCES, THE AO HAS MAINLY R ELIED ON THE STATEMENT OF TWO PERSONS, STATING THAT THEY HAV E SOLD RAW COTTON BEFORE THE AO, BUT HE HAS ALSO SUBMITTED A D OCUMENT, WHICH CLEARLY SHOWS THAT THE ASSESSEE HAS SOLD RAW COTTON AS WELL AS GINNED COTTON. SIMILARLY, SHRI SATISH JAWAD HIYA HAS ALSO GIVEN A STATEMENT THAT HE HAS SOLD RAW MATERIA L AS WELL AS GINNED COTTON TO THE ASSESSEE. FURTHER, WE FOUND TH AT THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESS EE. THE AO HAS NOT DOUBTED ABOUT THE PURCHASE OF GINNED COTTON AND WORKED OUT THE QUANTITY OF RAW COTTON PURCHASED FRO M HIS OWN FORMULA. WHILE ARRIVING AT THE CONCLUSION, THE AO H ELD THAT THE ASSESSEE HAS SOLD THE GINNED COTTON OUT OF BOOKS AN D HE HAS ALSO MADE ADDITION U/S 69 OF THE INCOME-TAX ACT, 19 61. UNDER SECTION 69B OF THE ACT, THE BURDEN OF PROOF IS ON T HE REVENUE. -: 16: - 16 UNDER SECTION 69B OF THE ACT, MERELY ON THE BASIS O F FAIR MARKET VALUE, NO ADDITION CAN BE MADE, BUT IF ON TH E BASIS OF SUFFICIENT MATERIAL ON RECORD, SOME REASONABLE INFE RENCE CAN BE DRAWN THAT THE ASSESSEE HAS INVESTED MORE AMOUNT IN PURCHASE OF GINNED COTTON THAN SHOWN IN THE ACCOUNT BOOKS, THEN ONLY ADDITION U/S 69 CAN BE MADE. THE BURDEN IS ON THE REVENUE TO PROVE THAT THE REAL INVESTMENT EXCEEDS T HE INVESTMENT SHOWN IN THE BOOKS OF THE ASSESSEE. UNDE R SECTION 69 IF THE BOOKS OF ACCOUNT REVEALS THE SALES IN REG ARD THERETO, THERE IS NO MATERIAL OF CORRESPONDING NATURE THAT THE ASSESSEE COULD HAVE PURCHASED THE COMMODITY FOR THE PURPOSE OFFERING THE SALE, THE SITUATION BECOMES DIFFICULT FOR THE A SSESSEE TO EXPLAIN AS TO HOW AND FROM WHAT SOURCE HE HAD AMOUN T WITH REGARD TO PURCHASE BEFORE IT WAS OFFERED FOR SALE. THEREFORE, IN THE CASE ON HAND, THE ASSESSEES BOOKS OF ACCOUNT A RE NOT REJECTED AND THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNT AND HE HAS ALREADY SHOWN THIS AMOUNT IN HIS BOOKS OF ACCOUNT. THEREFORE, IN OUR OPINION, THE LD. CIT(A) MAY NOT BE JUSTIFIED IN DELETING THE ADDITION, BUT ON TECHNICA L GROUND THE DELETION OF ADDITION IS JUSTIFIED. -: 17: - 17 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . 9. NEXT GROUND OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 5,33,078/- ON ACCOUNT OF GP ON SALE OF COTTON SEEDS OUT OF BOOKS WITHOUT APPRECIATING THE REASONING AND BASIS GIVEN BY THE AO IN THE ASSESSME NT ORDER. 10. THE ASSESSEE HAS SOLD THE QUANTITY OF COTTON SEED INVOLVED 9319.95 QTLS. IN PROCESSING RAW COTTON COT TON 14316.37 QTLS. AND MANUFACTURED 4757.33 QTLS. GINNE D COTTON. ASSESSEE HAS SOLD HIS COTTON OUTSIDE THE BO OKS. THE AO HAS MADE THE GROSS PROFIT OF 5.68 % AND HE M ADE ADDITION OF RS. 5,33,078/-. 11. THE MATTER CARRIED TO CIT(A) AND THE LD. CIT(A) HAS DELETED THE ADDITION. 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND FORM THE ASSESSMENT ORDER THAT THE AO HAS MADE THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTM ENT OF RAW COTTON. WE FIND THAT AS WE HAVE ALREADY HELD THAT THE ASSESSEE HAS ALREADY SOLD THIS RAW COTTON AND T HE AO -: 18: - 18 HAS HYPOTHETICALLY MADE THE ADDITION. AS WE HAVE AL READY DELETED THE ADDITION, WE DELETE THIS ADDITION ON AC COUNT OF GROSS PROFIT ON THE SALE OF COTTON SEEDS OUT OF THE BOOKS. 13. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 09 TH JUNE, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 09 TH JUNE, 2015. CPU* 46