Asstt.C.I.T., Gwalior V. Sh. Mukesh Kumar Jain, Gwalior

ITA 267/AGR/2010

• Counselvise Citation: 26720314 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V BAPNA
• Keywords: Rejection of books of accounts; Unexplained investment; Business expenditure; Loose papers; Document seized; Corroborative evidences; Documents seized
• Section: 133A; 153A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.262, 263, 264, 265, 266 & 267/AGR/2010 ASSESSMENT YEARS: 2002-03, 2006-07, 2003-04, 2004- 05, 2005-06 & 2007-08 RESPECTIVELY ASSTT. COMMISSIONER OF INCOME TAX, VS. SHRI M UKESH KUMAR JAIN, CIRCLE-1, GWALIOR. PROP. JAINA JEWELLERS, SARAFA BAZAR, LASHKAR, GWALIOR (M.P.). (PAN: ABWPJ 4620 L) ITA NO.270/AGR/2010 ASSESSMENT YEAR: 2002-03 ASSTT. COMMISSIONER OF INCOME TAX, VS. SMT. B ABITA JAIN, CIRCLE-1, GWALIOR. PROP. JAINA JEWELLERS, SARAFA BAZAR, LASHKAR, GWALIOR (M.P.). (PAN: AESPJ 2883 A) ITA NO.158/AGR/2010 ASSESSMENT YEAR: 2002-03 SHRI MUKESH KUMAR JAIN, VS. ASSTT. COMMISSIONER O F INCOME TAX, PROP. JAINA JEWELLERS, CIRCLE-1, GWALIOR. SARAFA BAZAR, LASHKAR, GWALIOR (M.P.). (PAN: ABWPJ 4620 L) ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 2 ITA NO.162/AGR/2010 ASSESSMENT YEAR: 2002-03 SMT. BABITA JAIN, VS ASSTT. COMMISSIONER OF INCO ME TAX, PROP. JAINA JEWELLERS, CIRCLE-1, GWALIOR. SARAFA BAZAR, LASHKAR, GWALIOR (M.P.). (PAN: AESPJ 2883 A) (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. ASSESSEE BY : SHRI V. BAPNA, C.A. DATE OF HEARING : 12.03.2012 DATE OF PRONOUNCEMENT : 23.03.2012 ORDER PER BENCH: THESE ARE APPEALS FILED BY THE REVENUE IN CASE OF S HRI MUKESH KUMAR JAIN FOR ASSESSMENT YEARS 2002-03, 2003-04, 2004-05, 200 5-06, 2006-07 & 2007-08 AGAINST THE ORDERS OF CIT(A), ALL DATED 31.03.2010, AND APPEAL BY THE ASSESSEE SHRI MUKESH KUMAR JAIN FOR ASSESSMENT YEAR 2002-03 AND C ROSS APPEAL IN CASE OF SMT. BABITA JAIN FOR ASSESSMENT YEAR 2002-03 AGAINST HE ORDER OF CIT(A) DATED 31.03.2010. 2. THE GROUNDS RAISED IN REVENUES APPEALS IN CASE OF BOTH THE ASSESSEES AND THE GROUNDS RAISED IN BOTH THE ASSESSEES APPEALS F OR ASSESSMENT YEAR 2002-03 ARE ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 3 BASED ON IDENTICAL SET OF FACTS. THEREFORE, FOR TH E SAKE OF CONVENIENCE, ALL THE APPEALS ARE DECIDED BY THIS COMMON ORDER. SINCE FA CTS ARE IDENTICAL, THEREFORE, FACTS OF THE CASE OF SHRI MUKESH KUMAR JAIN HAVE BE EN CONSIDERED FOR DECIDING THESE APPEALS. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY UN DER SECTION 133A OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) WAS CO NVERTED INTO SEARCH UNDER SECTION 132A OF THE ACT ON 20.02.2008. DURING THE COURSE OF SEARCH, LOOSE PAPER LPS PAGE 26 IN CASE OF SHRI MUKESH KUMAR JAIN AND L PS PAGE 28 IN CASE OF SMT. BABITA JAIN WAS FOUND AND SEIZED. IN THE SAID LOOS E PAPER, 26 HUNDIES OF RS.23,42,500/- AND 28 HUNDIES OF RS.5,65,000/- BOTH DATED 31.03.2001 WAS MENTIONED ON THOSE PAPERS. BEFORE THE ASSESSING OF FICER, THE ASSESSEE SUBMITTED THAT THE SAID LPS PAGE 26 AND PAGE 28 WERE ROUGH PA PERS AND NOT RELATED TO THE YEAR UNDER CONSIDERATION AS THE DATE MENTIONED IN T HE PAPER FOUND IS DATED 31.03.2001. THE ASSESSING OFFICER DID NOT ACCEPT T HE ASSESSEES CONTENTION AND OBSERVED AS UNDER :- I) THE ASSESSEE HAS NOT DENIED THE TRANSACTION ENTE RED INTO IN THE EARLIER PERIOD. II) THE TRANSACTIONS ARE NOT COMPLETE IN THE SENSE THAT SINGLE PAYMENT ARE NOT MADE FOR THE ADVANCE OR LOANS COLLE CTED FROM DIFFERENT PARTIES AS HUNDIES AND THEREFORE BE TREAT ED AS RUNNING ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 4 LEDGERS UP TO THE PERIOD OF SEARCH ASSESSMENT AND N OT RECORDED IN ITS BOOKS OF ACCOUNTS. III) THIRD PARTY CONFIRMATION FOR SUCH PAYMENTS/REC EIPT ARE NOT FURNISHED DURING THE YEAR. 4. THE ASSESSING OFFICER MADE ADDITION OF RS.23,42, 500/- & RS.5,65,000/- ON THE BASIS OF LOOSE PAPERS. THE ASSESSING OFFICER A LSO CALCULATED INTEREST ON THE BASIS OF LOOSE PAPERS AND MADE ADDITIONS OF RS.4,21 ,650/- IN CASE OF SHRI MUKESH KUMAR JAIN IN EACH YEAR FROM ASSESSMENT YEARS 2002- 03 TO 2007-08 AND RS.1,01,700/- IN CASE OF SMT. BABITA JAIN FOR ASSES SMENT YEAR 2002-03. 5. THE CIT(A) CONFIRMED THE ADDITION OF RS.24,95,50 0/- IN CASE OF SHRI MUKESH KUMAR AND RS.5,65,000/- IN CASE OF SMT. BABI TA JAIN FOR ASSESSMENT YEAR 2002-03, HOWEVER, IN THE CASE OF SHRI MUKESH KUMAR JAIN, THE CIT(A) ENHANCED THE MOUNT FROM RS.23,42,500/- TO RS.24,95,500/-. T HE CIT(A), WHILE CONFIRMING THE ADDITION, HELD THAT WITHOUT REBUTTING WITH ANY DOCUMENTARY EVIDENCE THE NOTING FOUND ON LOOSE PAPERS OR REFUTING PRESUMPTION OF OW NERSHIP OF SAID DOCUMENT OR LEADING ANY EVIDENCE, ADDITION MADE U/S. 69 READ WI TH SECTION 292C, ADDITION CONFIRMED. ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 5 6. HOWEVER, IN RESPECT OF ADDITION ON ACCOUNT OF IN TEREST ON THE BASIS OF LOOSE PAPERS, THE CIT(A) DELETED THE ADDITIONS. THE RELE VANT FINDING OF CIT(A) IN CASE OF SHRI MUKESH KUMAR JAIN FOR ASSESSMENT YEAR 2002- 03 IS REPRODUCED AS UNDER :- 4.2 THE APPELLANTS SUBMISSIONS ALONGWITH ASSESSME NT ORDER, RECORD AND SEIZED DOCUMENTS HAVE BEEN CONSIDERED CA REFULLY. THOUGH THE AMOUNT OF RS.24,95,500/- (IN PLACE OF RS.23,42, 500/-) MENTIONED IN THE SEIZED DOCUMENT NUMBERED LPS 26 HAS BEEN CON FIRMED, AS PER PARA 3.3 ABOVE, REPRESENTING UNEXPLAINED INVESTMENT OF THE APPELLANT; HOWEVER, THE A.O. HAS NOT BROUGHT ANY MATERIAL ON R ECORD TO SHOW THAT INTEREST @ 18% HAS BEEN EARNED BY THE APPELLAN T DURING THE YEAR ON THE AMOUNT ALLEGED TO HAVE BEEN LENT. NO SUCH D OCUMENT EVIDENCING THE EARNING OF INTEREST FROM THE SAID HU NDIES OF RS.23,42,500/- FOR ANY OF THE YEAR UNDER CONSIDERAT ION HAS BEEN FOUND EVEN AFTER EVERY NOOK AND CORNER OF THE BUSINESS AN D RESIDENTIAL PREMISES A OF THE APPELLANT HAVE BEEN SEARCHED U/S 132 OF THE I.T. ACT. FURTHER FROM PERUSAL OF RECORDS IT IS SEEN THAT AS PER THE RETURN FILED ON 15.09.09 IN RESPONSE TO NOTICE U/S 153A, WHICH I S THE SAME RETURN AS FILED IN ORIGINAL ON 25.10.02, INTEREST INCOME O F RS.51,133/- HAS BEEN DECLARED BY THE APPELLANT FOR THE ASSESSMENT Y EAR UNDER CONSIDERATION. ALSO THE LOOSE DOCUMENT I.E. LPS 26 ON THE BASIS OF WHICH THE A.O. HAS WORKED OUT UNDISCLOSED INTEREST INCOME DOES NOT MENTION ANYWHERE THE PERIOD OR THE RATE OF INTEREST OR THE FACT THAT THE SAID AMOUNTS HAVE BEEN GIVEN ON INTEREST RECEIVED/R ECEIVABLE FROM THE PERSONS MENTIONED THEREIN. THE ONUS TO ESTABLISH T HAT THE EXPLANATION FURNISHED BY THE APPELLANT IN RESPECT OF HIS DECLAR ED INCOME IS FALSE, IS ON THE A.O. THE A.O. HAS NOT MADE ANY INQUIRY FROM ANY OF THE PERSON MENTIONED IN THE DOCUMENT TO SHOW THAT THE A PPELLANT HAS EARNED INTEREST FROM THE AMOUNTS ALLEGED TO HAVE BE EN LENT. IT HAS BEEN HELD BY HONBLE DELHI HIGH COURT IN CASE OF CI T, DELHI-II VS. JUPITER BUILDERS (P) LTD (2006) 157 TAXMAN THAT IF NO EVIDENCE IS FOUND REPRESENTING UNDISCLOSED EXPENSES/INCOME DURI NG THE COURSE OF A SEARCH AND RELEVANT EXPENSES/INCOME HAVE BEEN DUL Y REFLECTED AND DISCLOSED IN THE RETURNS FILED, NO FURTHER ADDITION CAN BE MADE IN RESPECT OF SUCH EXPENSES/INCOME. ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 6 4.3 IN VIEW OF FACTS ABOVE, A.O. WAS NOT JUSTIFIED IN ESTIMATING THE INTEREST INCOME AT RS.4,21,650/- WITHOUT ANY COGENT AND SUPPORTING EVIDENCE ON RECORD. ADDITION OF RS.4,21,650/- IS, HEREBY, DELET4ED. 7. THE ASSESSEE IS IN APPEAL RAISING GROUND NO.2 AG AINST THE ADDITION SUSTAINED BY THE CIT(A) ON THE BASIS OF LOOSE PAPERS AND REVE NUE IS IN APPEALS AGAINST THE DELETION OF INTEREST FROM ASSESSMENT YEARS 2002-03 TO 2007-08. 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE SOLE ISSUE WHICH IS TO BE DECIDED IN THE GROUND S OF APPEALS OF ASSESSEES IS WHETHER LPS-26 OF WHICH COPY PLACED AT PAGE NO.25 O F ASSESSEES PAPER BOOK IS PERTAINING TO THE YEAR UNDER CONSIDERATION I.E. ASS ESSMENT YEAR 2002-03 OR NOT. THE ASSESSEE RAISED GROUND NO.2 CONTENDING THAT THI S PAPER IS DATED 31.03.2001, THEREFORE, NOT RELATED TO THE ASSESSMENT YEAR 2002- 03. IT IS ADMITTED FACT THAT THE PAPER LPS-26 & 28 FOUND AT THE TIME OF SEARCH BOTH ARE DATED 31.03.2001. SUB- SECTION (4A) OF SECTION 132 PROVIDES THAT WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THINGS ARE FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE C OURSE OF A SEARCH, THE FOLLOWING PRESUMPTIONS SHALL BE MADE:- (I) SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONGS TO SUCH PERSON ; ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 7 (II) THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHE R DOCUMENTS ARE TRUE; AND (III) (A) THE SIGNATURE AND EVERY OTHER PART OF SUC H BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON, ARE IN THAT PERSONS HANDWRITING ; (B) SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HAN DWRITING OF, ANY PARTICULAR PERSON, ARE SIGNED BY AND ARE IN THE HAN DWRITING OF THAT PERSON; AND (C) IN THE CASE OF A DOCUMENT WHICH IS STAMPED, EXE CUTED OR ATTESTED AND WHICH PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED BY A PERSON, IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY SUCH PERSON. 9. ON PLAIN READING OF SECTION 132(4A), WE NOTICE T HAT THE PRESUMPTION IS THAT THE THINGS FOUND IN THE POSSESSION OR CONTROL OF A PERSON BELONGS TO HIM AND CONTENTS NOTED THEREIN ARE TRUE. IN THE CASE UNDER CONSIDERATION, IF WE READ THE DOCUMENT LPS-26 FOUND AT THE TIME OF SEARCH, WE NOT ICE THAT THE SAID PAPER IS DATED 31.03.2001 NARRATING THE DETAILS OF NAME OF 1 4 PERSONS ALONG WITH AMOUNT AGAINST EACH, THEY ARE:- VIJAYRAM SHARMA, HUF 2,06,000/- DONGER SINGH 3,10,500/- ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 8 HARIMOHAN SHARMA 1,60,000/- RATIRAM SHARMA 2,57,000/- KAMLESH SHARMA 1,48,000/- VIJAYRAM SHARMA 1,46,000/- CHANDRAKANT GO 1,25,000/- HARIMOHAN SHARMA, HUF 1,39,000/- RATIRAM SHARMA, HUF 2,40,000/- RAMBHAI SHARMAS 2,27,000/- MITHLESH SHARMA 1,70,000/- ASHOK GUPTA 1,35,000/- SIYARAM GOGIL 1,40,000/- GIRJESH GO 92,000/- 10. THE CIT(A) NOTED THAT THE SAID LOOSE DOCUMENT I S IN THE HANDWRITING OF THE ASSESSEE WHICH HAS BEEN ADMITTED BY HIM DURING THE COURSE OF APPELLATE PROCEEDINGS. ON READING OF THE ENTIRE CONTENTS OF THE SAID PAPER, ONE OF THE IMPORTANT POINTS NOTED IN THE SAID PAPER IS DATE WH ICH IS 31.03.2001. THIS DATE ALONG WITH OTHER NOTING ARE TO BE TAKEN AS TRUE IN ACCORDANCE WITH SECTION 132(4A) OF THE ACT. WE, THEREFORE, ARE OF THE CONSIDERED V IEW THAT THE SAID PAPER CONTAINS THE DATE 31.03.2001 WHICH BELONG TO ASSESSMENT YEAR 2001-02 AND NOT ASSESSMENT YEAR 2002-03. THEREFORE, ON THE BASIS O F SAID LOOSE PAPER, THE ADDITION CANNOT BE MADE IN THE YEAR UNDER CONSIDERA TION I.E. ASSESSMENT YEAR 2002-03. WE NOTICED THAT THE CIT(A) WHILE CONFIRMI NG THE ADDITIONS WRONGLY RELIED UPON SECTION 292C OF THE ACT AS HE IGNORED T HE IMPORTANT FACT NOTED ON LOOSE PAPER I.E. DATE FOR WHICH SECTION 132(4A) IS APPLIC ABLE. WE, THEREFORE, DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE CIT(A) OF ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 9 RS.24,95,500/- IN CASE OF SHRI MUKESH KUMAR JAIN AN D RS.5,65,000/- IN CASE OF SMT. BABITA JAIN AS THE SAID PAPER DOES NOT PERTAIN TO THE YEAR UNDER CONSIDERATION I.E ASSESSMENT YEAR 2002-03. 11. ANOTHER ADDITION OF RS.4,21,650/- IN CASE OF SH RI MUKESH KUMAR JAIN AND RS.1,01,700/- IN CASE OF SMT. BABITA JAIN WHICH WER E MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST EARNED ON HUNDIES ME NTIONED IN LPS PAGE 26 & 28 LOOSE PAPER FOUND AT THE TIME OF SEARCH, THE ASSESS ING OFFICER CALCULATED THE AMOUNT OF INTEREST APPLYING 18% RATE OF INTEREST ON RS.23,42,500/- ON PRESUMPTION THAT THE ASSESSEE HAS INVESTED THE AMOUNT MENTIONE D IN LOOSE PAPER LPS PAGE 26 AND CALCULATED THE INTEREST FOR ALL THE SIX YEARS O F WHICH CALCULATION COMES TO RS.4,21,650/-. THE CIT(A) DELETED THE SAID ADDITIO NS ON THE GROUND THAT THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY FROM ANY OF THE PERSONS MENTIONED IN THE DOCUMENTS TO SHOW THAT THE ASSESSEE HAS EARNED INTEREST FROM AMOUNTS ALLEGED TO HAVE BEEN LENT. THE CIT(A) RELIED UPON THE JUDG MENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. JUPITER BUILDERS PVT. LTD, 287 ITR 287 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT PROCEEDINGS UNDER CHAPTER XIV-B ARE TAKEN ONLY IN RESPECT OF UNDISCLOSED INCOME WHICH IS UNEARTHED AS A RESULT O F SEARCH. THE CIT(A) HAS FOLLOWED THIS ORDER FOR ASSESSMENT YEAR 2002-03 AND SUBSEQUENT ASSESSMENT YEARS 2003-04 TO 2007-08. AFTER CONSIDERING THE FA CTS OF THE CASE, WE DO NOT FIND ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 10 ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE ASSESSI NG OFFICER MADE THE ADDITION ON PRESUMPTION BASIS. APART FROM THE FACT THAT AS PER DETAILED DISCUSSION MADE IN PARAGRAPH NOS.8 TO 10 ABOVE, WE HOLD THAT THE LOOSE PAPER FOUND I.E. LPS-26 IS NOT PERTAINING TO THE ASSESSMENT YEAR 2002-03. THERE I S NO MATERIAL ON RECORD BASED ON WHICH IT CAN BE SAID THAT THE ASSESSEE WAS EARN ING INTEREST ON THAT AMOUNT IN SUBSEQUENT YEAR FROM ASSESSMENT YEARS 2002-03 TO 20 07-08. THEREFORE, NOTIONAL INCOME CANNOT BE TAXED IN THE FORM OF INTEREST. IN THE LIGHT OF THE ABOVE DISCUSSION, WE CONFIRM THE ORDER OF CIT(A) ON THE I SSUE. 12. ONE MORE GROUND RAISED IN REVENUES APPEALS IN CASE OF SHRI MUKESH KUMAR JAIN IS IN RESPECT OF DELETION OF ADDITION ON ACCOUNT OF GROSS PROFIT BY THE CIT(A). 13. THE BRIEF FACTS OF THE ISSUE ARE THAT DURING TH E ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DET AILS OF SALES AND PURCHASES ITEM- WISE, QUANTITY-WISE AND QUALITY-WISE WITH VALUATION AND G.P. RATE ITEM-WISE, PURCHASE AND SALES, OPENING STOCK AND CLOSING STOCK ITEMS-WISE, QUANTITY-WISE, QUALITY-WISE, RATE APPLIED FOR EACH ITEM WITH SUPPO RTING DOCUMENTS, PURITY AND STOCK REGISTER. THE ASSESSEE DID NOT FURNISH THE R EQUIRED DETAILS. IN ABSENCE OF THE DETAILS, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE BOOKS OF ACCOUNT OF THE ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 11 ASSESSEE REMAINED UNVERIFIABLE AND UNRELIABLE. ASS ESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS. AFTER REJECTING THE BOOKS OF AC COUNTS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DECLARED NET PROFIT O F RS.1,07,815/- ON SALE OF RS.42,68,564/- ON WHICH CALCULATION OF G.P. COMES T O 8.04% IN ASSESSMENT YEAR 2002-03. THE ASSESSING OFFICER ALSO EXAMINED STOCK TURNOVER RATIO WHICH WAS 1:12 AND NOTED THAT IN THIS LIME OF BUSINESS G.P. I S ESTIMATED AT 22%. THE ASSESSEE HAS NOT GIVEN PROPER EXPLANATION REGARDING THE G.P. DECLARED BY THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY CALCULATED G.P. OF RS .76,08,400/- AS AGAINST G.P. DECLARED BY THE ASSESSEE OF RS.1,07,815/- AND MADE ADDITION OF RS.75,00,585/- IN ASSESSMENT YEAR 2002-03. IN ASSESSMENT YEAR 2003-0 4 THE ADDITION MADE BY THE ASSESSING OFFICER IS RS.85,16,304, IN ASSESSMENT YE AR 2004-05 THE ADDITION MADE BY THE ASSESSING OFFICER IS RS.97,64,301/-, IN ASSE SSMENT YEAR 2005-06 THE ADDITION MADE BY THE ASSESSING OFFICER IS RS.78,29, 677/-, IN ASSESSMENT YEAR 2006-07 THE ADDITION MADE BY THE ASSESSING OFFICER IS RS.1,38,97,663/- AND IN ASSESSMENT YEAR 2007-08 THE ADDITION MADE BY THE AS SESSING OFFICER IS RS.1,43,60,534/-. 14. THE CIT(A) UPHELD THE ACTION OF THE ASSESSING O FFICER FOR REJECTION OF BOOKS OF ACCOUNT OBSERVING THAT THERE IS NO DENYING THE FACTS THAT SOME DEFICIENCY AND DEFECTS HAVE BEEN FOUND IN MAINTENANCE OF BOOKS OF ACCOUNT DURING THE COURSE ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 12 OF SEARCH AND ON THAT ACCOUNT THE ASSESSEE MADE DIS CLOSURE OF RS.1,10,00,000/- FOR VARIATION IN STOCK ALONG WITH DISCLOSURE OF RS.4,45 ,172/- AND RS.1,00,000/- FOR UNRECORDED BUSINESS EXPENDITURE AND HOUSE HOLD EXPE NSES. HOWEVER, IN RESPECT OF ESTIMATION OF G.P., THE CIT(A) DID NOT AGREE WITH T HE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSING OFFICER FIRST ESTIMATED T HE SALES ON STOCK TURNOVER RATIO FOR WHICH NO BASIS HAS BEEN GIVEN AND THEN HAS FURT HER ESTIMATED THE PROBABLE G.P. AGAIN WITHOUT ANY BASIS. THE DISCLOSURE HAS BEEN MA DE AND ACCEPTED AFTER COMPLETE PROCESSING OF DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING F URTHER ADDITION ON ESTIMATE BASIS WITHOUT ANY SUPPORTING DOCUMENTS OR MATERIAL ON REC ORD. THE CIT(A) FOLLOWED THE REASONS MENTIONED BY HIM IN ANOTHER CASE I.E. I N THE CASE OF SUNIL JAIN, BROTHER OF THE ASSESSEE IN AN APPEAL FOR THE ASSESSMENT YEA R 2008-09. THE CIT(A) FOLLOWED HIS REASONING AND ORDER FOR ASSESSMENT YEA R 2002-03 IN ALL SUBSEQUENT YEARS. THE RELEVANT FINDING OF THE CIT(A) IS REPRO DUCED FROM PARAGRAPH NO.5.3 AT PAGE NO.10 OF HIS ORDER AS UNDER :- 5.3 THERE IS NO DENYING THE FACT THAT SOME DEFICIE NCIES AND DEFECTS HAVE BEEN FOUND IN THE MAINTENANCE OF BOOKS OF ACCO UNTS DURING THE COURSE OF SEARCH FOR WHICH THE APPELLANT HAS DULY M ADE THE DISCLOSURE OF RS.1,10,00,000/- FOR VARIATION IN STOCK ALONGWIT H A DISCLOSURE OF RS.4,45,172/- AND RS.1,00,000/- FOR UNRECORDED BUSI NESS EXPENSES AND HOUSEHOLD EXPENSES RESPECTIVELY. THE SAME HAS BEEN ACCEPTED BY THE A.O. WHICH IS EVIDENT FROM THE STATEMENT OF THE AP PELLANT RECORDED ON 25.02.08 AND 26.02.08 WHERE IN RESPONSE TO QUESTION NO.23 AND ITS ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 13 REPLY MAKING THE DISCLOSURE AS ABOVE, THE APPELLANT HAS BEEN ASKED TO GIVE THE MODE OF TAX PAYMENT ON THE DISCLOSURE MADE . AS NOTED ABOVE IN THE ASSESSMENT ORDER THE A.O. HAS MADE ESTIMATES IN STAGES WHICH TANTAMOUNT TO REWRITING THE SEIZED MATERIAL AND DIS CLOSURE. THE A.O. HAS FIRST ESTIMATED THE SALES ON A STOCK TURNOVER R ATIO FOR WHICH NO BASIS HAS BEEN GIVEN AND THEN HAS FURTHER ESTIMATED THE PROBABLE G.P., AGAIN WITHOUT ANY BASIS. SEIZED MATERIAL HAS TO BE READ AND ACCEPTED AS A WHOLE. IT IS NOT PERMISSIBLE TO PICK AND CHOOSE OR MAKE FURTHER ESTIMATE THEREFROM UNLESS AND UNTIL THERE I S COGENT MATERIAL IN SUPPORT OF UNDERTAKING SUCH AN EXERCISE. THE DISCL OSURE HAS BEEN MADE AND ACCEPTED AFTER COMPLETE PROCESSING OF DOCU MENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE A.O. WAS N OT JUSTIFIED IN MAKING FURTHER ADDITION ON ESTIMATE BASIS WITHOUT A NY SUPPORTING DOCUMENT OR MATERIAL ON RECORD. FOR THE REASONS ME NTIONED BY ME IN THE CASE OF SHRI SUNIL JAIN, BROTHER OF THE APPELLA NT, IN THE APPEAL FOR THE A.Y. 08-09 (APPEAL NO.205/IT/09-10/GWL), THE AC TION OF THE A.O. FIRST IN ESTIMATING THE SALES AND THEN ESTIMATING T HE PROBABLE G.P. THEREON @ 22% WITHOUT ANY COGENT AND SUPPORTIVE EVI DENCE ON RECORD IS NOT FOUND JUSTIFIABLE. ADDITION OF RS.75 ,00,585/- IS HEREBY DELETED. 15. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE FIND THAT AFTER CONFIRMING THE ACTION OF ASSESSI NG OFFICER IN RESPECT OF REJECTION OF BOOKS OF ACCOUNT, THE CIT(A) NOTED ON MERIT THAT THE ASSESSING OFFICER HAS FIRST ESTIMATED THE SALES ON A STOCK TURNOVER RATIO FOR W HICH NO BASIS HAS BEEN GIVEN. FURTHER HE APPLIED PROBABLE G.P. WITHOUT ANY BASIS. THE CIT(A) RELIED UPON THE REASONS GIVEN BY HIM IN CASE OF SHRI SUNIL JAIN WHO SE APPEAL HAS BEEN DECIDED BY I.T.A.T. VIDE ITA NO.161/AGR/2010 ORDER DATED 10.03 .2011 CONFIRMING THE ORDER OF CIT(A). THE FINDING OF THE I.T.A.T. IS REPRODUC ED BELOW: ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 14 8. AS REGARDS TO THE APPEAL FIELD BY THE REVENUE I N WHICH THE REVENUE HAS CONTENDED THAT THE LD. FIRST APPELLATE AUTHORITY HAS WRONGLY ACCEPTED THE BOOKS WHEN PURCHASES ARE NOT S UPPORTED BY BILLS AND INVOICES OR OTHER SUPPORTING DOCUMENTS WH ICH ARE MOSTLY FROM UNREGISTERED DEALERS AND GIVING RELIEF TO THE ASSESSEE FOR ` 1,92,83,893/- (REDUCING G.P. ADDITION TO ` 7,00,000/-) AS AGAINST THE ADDITION OF ` 1,99,83,893/- MADE ON ACCOUNT OF ESTIMATED G.P. TH E LD. FIRST APPELLATE AUTHORITY HAS CLEARLY MENTIONED IN THE IMPUGNED ORDER THAT THIS IS THE FIRST YEAR OF OPERATION OF T HE ASSESSEES BUSINESS AND HE HAS DECLARED SALES OF ` 78,68,534/- ON WHICH G.P. OF ` 11,99,728/- HAS BEEN EARNED THEREBY GIVING G.P. RAT E OF 15.24% AND THE ASSESSING OFFICER HAS ESTIMATED THE SAME @ 22% WITHOUT GIVING ANY BASIS FOR THE SAME. THE LD. FIRST APPELLATE AU THORITY HAS ALSO SUPPORTED HER VIEW BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT, DELHI-I VS. BANSAL HIGH CARBONS (P) LT D (2007) 165 TAXMAN 243. THE LD. FIRST APPELLATE AUTHORITY WHI LE DELETING THE ADDITION IN DISPUTE IN THE APPEAL FILED BY THE REVE NUE HERSELF HAS HELD THAT THERE ARE SOME DEFICIENCIES AND DEFECTS IN MAI NTENANCE OF BOOKS OF ACCOUNTS BY THE ASSESSEE DURING THE COURSE OF SE ARCH FOR WHICH THE ASSESSEE HAS MADE DISCLOSURE OF ` 58,79,843/- FOR VARIATION IN STOCK, CASH, HOUSEHOLD EXPENSES AND BUSINESS EXPENSES WHIC H HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AND DELETED THE REMAINING ADDITION IN DISPUTE. AFTER GOING THROUGH THE IMPUGNED ORDER , WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUT HORITY HAS RIGHTLY DELETED THE ADDITION IN DISPUTE IN THE APPEAL FILED BY THE REVENUE ON THE BASIS OF DOCUMENTARY EVIDENCE FILED BY THE ASSE SSEE AS WELL AS THE DISCLOSURE STATEMENT MADE BY THE ASSESSEE DURING TH E SEARCH WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. KEEPIN G IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF TH E CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE W ELL REASONED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. WE UP HOLD THE SAME BY DISMISSING THE APPEAL FILED BY THE REVENUE. 16. SINCE ON IDENTICAL SET OF FACTS THE I.T.A.T. IN CASE OF SHRI SUNIL JAIN WHILE DISCUSSING GROUND OF APPEAL OF REVENUE CONFIRMED TH E ORDER OF CIT(A). TO ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 15 MAINTAIN CONSISTENCY, WE FOLLOW THE ORDER OF I.T.A. T. CITED SUPRA AND IN THE LIGHT OF FACTS, WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE . 17. ONE MORE GROUND I.E. GROUND NO.1 RAISED BY THE ASSESSEE IN ITS APPEAL READS AS UNDER :- ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT(A) ERRED IN CONFIRMING ACTION OF ACIT OF PASSING ORDER U/S 153A OF INCOME TAX ACT 1961 WITHOUT ISSUING NOTICE U/S 143(2) OF INCOM E TAX ACT, 1961 IS ILLEGAL, UNJUSTIFIED AND BAD IN LAW. 18. LD. AUTHORISED REPRESENTATIVE DID NOT PRESS THI S GROUND OF APPEAL, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 19. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE D ISMISSED AND BOTH APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 23 RD MARCH, 2012 PBN/* ITA NOS.262, 263, 264, 265, 266, 267, 270, 158 & 162/AGR/2010 A.YS. 2002-03 TO 2007-08 16 COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY