A.C.I.T., Circle-1, Gwalior V. Sh. Jai Prakash Panjwani, Gwalior

ITA 270/AGR/2011

• Counselvise Citation: 27020314 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 11-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD
• Assessee Lawyers: ALOK DHINGRA
• Keywords: Bogus purchase; Unexplained cash credit; Principle of natural justice; Corroborative evidences; Non compliance
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 270/AGRA/2011 ASSTT. YEAR : 2008-09 A.C.I.T., CIRCLE 1, VS. SHRI JAI PRAKASH PANJW ANI, GWALIOR. LALA KA BAZAR, LASHKAR, GWALIOR. (PAN: ADQPP 7530 D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. DR RESPONDENT BY : SHRI ALOK DHINGRA, ADVOCATE DATE OF HEARING : 29.04.2014 DATE OF PRONOUNCEMENT OF ORDER : 02.05.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 29.04.2011 FOR THE ASSESSMENT YEAR 20 08-09. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE FILED DE TAILED PAPER BOOK AS WELL AS RECONCILIATION OF ACCOUNTS AS SUGGESTED BY THE LD. DR. THE LD. DR ALSO PLACED ON RECORD CERTAIN DOCUMENTS. ALL HAVE BEEN TAKEN INTO CONSIDERATION. ITA NO. 270/AGRA/2011 2 3. ON GROUND NO. 1, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.3,72,000/- ON ACCOUNT OF UNEXPLAINED CREDITOR M/ S. JAI TRADERS. THE AO ON RECEIPT OF INFORMATION U/S. 133(6) FOUND DISCREPANC IES IN THE ACCOUNT OF THE CREDITOR, JAI TRADERS AND ACCORDINGLY MADE THE ADDI TION OF RS.3,72,000/-. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE AO CALLED FOR INFORMATION U/S. 133(6) FROM THE VENDOR M/S. JAI TRADERS, INDORE AND ON COM PARISON FOUND SOME DIFFERENCES IN THE COPY OF LEDGER ACCOUNT FOR MAKIN G ADDITION WITHOUT APPRECIATING THE FACT THAT AS AGAINST DEBIT ENTRY OF RS.55,870/- IN THE BOOKS OF JAI TRADERS, THERE WAS A CREDIT ENTRY OF RS.53,900/- IN THE BOOKS OF A CCOUNT OF THE ASSESSEE AND DEBIT ENTRY OF RS.3,16,130/- IS A CONTRA ENTRY DUE TO CHE QUE RETURN ON FIRST INSTANCE BY THE BANK AND THE SAME IS VERIFIED FROM THE BANK STATEME NT FILED ON RECORD. THE AO CONSIDERED ONLY DEBIT ENTRY OF RS.3,16,130/- WITHOU T CONSIDERING THE CONTRA ENTRY. THE LD. CIT(A) PERUSED THE RECORD AND INFORMATION U /S. 133(6) AND ALSO GONE THROUGH THE STATEMENT OF ACCOUNT OF ASSESSEE IN THE BOOKS OF M/S. JAI TRADERS AS OBTAINED BY THE AO ON 25.11.2010 IS REPRODUCED AT P AGE 5 & 6 OF THE APPELLATE ORDER AS WELL AS ASSESSEES BOOKS OF ACCOUNT SHOWIN G THE ACCOUNT OF JAI TRADERS, WHICH IS ALSO REPRODUCED AT PAGE 6 OF THE APPELLATE ORDER AND IT WAS FOUND THAT DIFFERENCE OF RS.3,72,000/- IS EXPLAINED WHICH ARIS E BECAUSE OF THE CONTRA ENTRY OF RS.3,16,130/- ON ACCOUNT OF RETURN OF CHEQUES. THE ADDITION WAS ACCORDINGLY DELETED. ITA NO. 270/AGRA/2011 3 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. DR CONTEND ED THAT NO STEPS HAVE BEEN TAKEN TO GET THE ACCOUNTS VERIFIED. HOWEVER, THE AS SESSEE HAS FILED RECONCILIATION OF ACCOUNTS OF M/S. JAI TRADERS AS SUGGESTED BY THE LD . DR, WHICH IS ALSO REPRODUCED AT PAGE 5 & 6 OF THE APPELLATE ORDER AND CLEARLY PR OVE THAT THERE WAS NO DIFFERENCE IN THE ACCOUNT OF M/S. JAI TRADERS AND WHATEVER DIF FERENCE WAS TAKEN INTO CONSIDERATION BY THE AO WAS ON ACCOUNT OF RETURN OF CHEQUES AND CONTRA ENTRY MADE IN THE ACCOUNTS OF THE SAID PARTY. THE LD. DR DID NOT POINT OUT ANY INFIRMITY IN THE RECONCILIATION OF ACCOUNTS FILED BY THE ASSE SSEE ON RECORD. THE LD. CIT(A) IS, THEREFORE, JUSTIFIED IN HOLDING THAT THE DIFFERENCE IS RECONCILED BY THE ASSESSEE. GROUND NO. 1 IS, ACCORDINGLY, DISMISSED. 5. ON GROUND NO. 2, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.2,75,400/- OUT OF RS.2,99,970/- MADE ON ACCOUNT OF UNEXPLAINED CREDITOR M/S. PARAG TRADERS. THE AO DURING THE COURSE OF ASSESSME NT PROCEEDINGS CALLED FOR THE INFORMATION FROM M/S. VIRAL TRADERS U/S. 133(6) AND ON COMPARISON OF THE LEDGER ACCOUNT FROM M/S. VIRAL TRADERS WITH LEDGER ACCOUNT IN THE BOOKS OF ASSESSEE, OBSERVED THAT DEBIT ENTRIES OF RS.2,88,000/- AND RS .11,970/- AND CREDIT ENTRY OF RS.24,570/- ARE THERE IN THE BOOKS OF ASSESSEE, BUT NOT BEING REFLECTED IN THE BOOKS OF THE VENDOR PARTY. IT WAS SUBMITTED THAT THIS OBS ERVATION WAS MADE BY THE AO IN ISOLATION BECAUSE THE AO HAS NOT SHOWN THE CREDIT E NTRY OF RS.2,75,400/- AND IF ALL ITA NO. 270/AGRA/2011 4 THE DEBIT AND CREDIT ENTRIES ARE CONSIDERED COLLECT IVELY, THERE WOULD BE NO DIFFERENCE. IT WAS ALSO POINTED OUT THAT THE AO HAS WRONGLY MENTIONED THE NAME OF THE THIRD PARTY AS PARAG TRADERS IN PLACE OF M/S. V IRAL TRADERS. IT WAS SUBMITTED THAT SINCE THERE IS NO DIFFERENCE, THE ADDITION SHO ULD HAVE BEEN DELETED. THE LD. CIT(A) CONSIDERED THE MATERIAL ON RECORD AS WELL AS THE INFORMATION CALLED U/S. 133(6) AND REPRODUCED THE SAME AT PAGE 7 & 8 OF THE APPELLATE ORDER AS WELL AS ASSESSEES ACCOUNT SHOWING THE TRANSACTION WITH M/S . VIRAL TRADERS AT PAGE 8 & 9 OF THE APPELLATE ORDER. THE COMPARISON AND THE LEDG ER ACCOUNT SHOWS THE DIFFERENCE OF RS.24,570/-. THE REST OF THE TRANSACTIONS WERE G OT VERIFIED AND SUPPORTED BY THE BILLS/INVOICES EXCEPT FOR AN AMOUNT OF RS.24,570/-. THEREFORE, THE ADDITION OF RS.24,570/- WAS CONFIRMED OUT OF THE ADDITION OF RS .2,99,970/- AND REST WAS DELETED. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE INFORMATION U/ S. 133(6) RECEIPTED BY THE AO IS REPRODUCED AT PAGE 7 & 8 OF THE APPELLATE ORDER AND THE DETAILS NOTED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT ARE NOTED AT PAGE 8 & 9 OF THE APPELLATE ORDER. ALL THE ENTRIES ARE RECONCILED AND SUPPORTED BY THE BIL LS AND INVOICES EXCEPT FOR RS.24,570/-. THE ASSESSEE FILED RECONCILIATION OF A CCOUNTS AS SUGGESTED BY THE LD. DR, IN WHICH NO DISCREPANCY HAS BEEN POINTED OUT. W E, THEREFORE, DO NOT FIND ANY ITA NO. 270/AGRA/2011 5 MERIT IN THIS GROUND OF APPEAL BECAUSE ACCOUNTS WER E GOT VERIFIED AND AS SUCH NO INTERFERENCE IS CALLED FOR IN THE MATTER. 7. ON GROUND NO. 3, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.39,45,359/- ON ACCOUNT OF UNEXPLAINED CREDITOR M /S. OOM MURGA OIL MILLS. THE AO CONSIDERED THE ENTRIES IN THE BOOKS OF ACCOUNT O F THE ASSESSEE AND IN THE BOOKS OF M/S. OOM MURGA OIL MILLS AND FOUND DIFFERENCE AN D ACCORDINGLY MADE THE ABOVE ADDITION. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT THE ASSESSEE DID BUSINESS WITH THIS COMPANY AS ITS CONSIGNMENT COMMI SSION AGENT AND THE ACCOUNTS WOULD DISCLOSE NO DIFFERENCE AT ALL. ALL THE TRANSA CTIONS WERE EXPLAINED BEFORE THE AO. IT WAS SUBMITTED THAT THERE ARE CERTAIN CONTRA ENTRIES WHICH HAVE NOT BEEN APPRECIATED BY THE AO. THE TRANSACTIONS ARE NOT SAL E/PURCHASE OF THE ASSESSEE. ALL THE TRANSACTIONS ARE REGULAR BUSINESS TRANSACTIONS AND THERE IS NO DISCREPANCY. THE ASSESSEE FILED COPY OF CONSIGNMENT ACCOUNT IN THE B OOKS OF ACCOUNT, WHICH PROVED THE FINDING OF THE AO TO BE WRONG. THE ASSESSEE ACT ED AS COMMISSION AGENT IN PRINCIPLE. THEREFORE, THE ADDITION IS WHOLLY UNJUST IFIED. 8. THE LD. CIT(A) CONSIDERING THE EVIDENCES AND MAT ERIAL ON RECORD DELETED THE ADDITION. HIS FINDINGS IN PARA 2.5 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 2.5 AS REGARDS ADDITION MADE IN RESPECT OF SRI OO M MURGA OIL MILLS FOR RS.39,45,359/- , IT IS SEEN THAT THE APPELLANT IS A CONSIGNMENT AGENT OF THE SAID OIL MILLS AND HAS EAR NED COMMISSION ITA NO. 270/AGRA/2011 6 ON THE SAME. COPY OF AGREEMENT TO THIS EFFECT ENTE RED INTO WITH M/S. SRI OOM MURGA OIL MILL HAVING REGISTERED OFFICE AT ERODE, TAMIL NADU BY THE APPELLANT ON 14.06.07 BY WHICH THE APPE LLANT HAS BEEN APPOINTED THE SELLING COMMISSION AGENT FOR MADHYA P RADESH FOR THE SALE OF COCONUT OIL MANUFACTURED BY THE PRINCIPAL A CT, TAMIL NADU. AS PER THE SAID AGREEMENT, THE APPELLANT HAS BEEN A UTHORIZED TO DRAW COMMISSION AND INCIDENTAL CHARGES, I.E. BROKERAGE, RAILWAY FREIGHT, DISCOUNT, INSURANCE ETC. AND ALL SUCH EXPENSES SHAL L BE NOTIFIED IN THE COMMISSION SALE ACCOUNTS RENDERED BY THE AGENT, I.E . THE APPELLANT TO THE PRINCIPAL WHICH SHALL BE ACCEPTED BY HIM. ACCOR DINGLY, THE APPELLANT HAS MADE ENTRIES IN HIS BOOKS OF ACCOUNTS ON RECEIPT OF GOODS ON CONSIGNMENT AND LATER ON SUBMISSION OF ACC OUNTS TO HIS PRINCIPAL. CONTRA ENTRIES HAVE BEEN MADE BY THE PRI NCIPAL ACCORDINGLY. THE WHOLE TRANSACTIONS DONE WITH SRI O OM MURGA OIL MILL DO NOT RELATE TO REGULAR SALE AND PURCHASE OR TRADING ACTIVITIES, AS THE APPELLANT EARNS ONLY COMMISSION ON SALES MAD E ON BEHALF OF HIS PRINCIPAL. THIS FACT IS ALSO EVIDENT FROM THE COPY OF ACCOUNTS STATEMENT OBTAINED DIRECTLY BY THE A.O. U/S 133(6) FROM THE OIL MILL WHEREBY QUANTITY SOLD ON VARIOUS DATES HAS BEEN MEN TIONED AS P. NO. 1 TO 5 WHEREAS THE SAME TALLIED WITH THE APPELLANT' S BOOKS OF ACCOUNTS AS PER CONSIGNMENT NOTES NOS. 1 TO 5. THE PRINCIPAL HAS ALSO MADE PAYMENT IN RESPECT OF COMMISSION AT RS.42,560/- TO THE APPELLANT. THE APPELLANT HAS ALSO DECLARED TOTAL COMMISSION OF RS. 12,85,696/- AS PER HIS P&L ACCOUNT. SIMILAR COMMISSION HAS ALSO BEEN E ARNED AND DECLARED IN HIS RETURNS FOR EARLIER YEARS AT RS.31, 366/- (A.Y. 2005-06), RS.6,06,484/- (A.Y. 06-07) AND RS.8,13,069/- (A.Y. 07-08). COMPARATIVE ANALYSIS OF STATEMENT OBTAINED BY THE A .O. VIS-A-VIS ENTRIES MADE IN BOOKS OF ACCOUNTS OF THE APPELLANT, NO DIFFERENCE IS FOUND EITHER IN RESPECT OF QUANTITY OR THE AMOUNTS. THE DIFFERENCE POINTED OUT BY THE A.O. IS MAINLY ON ACCOUNT OF CON TRA ENTRIES MADE AT DIFFERENT POINTS OF TIME BY THE APPELLANT AND HIS P RINCIPAL. ACCORDINGLY, ADDITION OF RS.39,45,359/- IS, HEREBY, DELETED. 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. DR POINTED OUT PB (C-81) AND FROM THE PAPERS FILED BY THE LD. DR AT PAGE 5 TO SHOW THAT T HERE IS DIFFERENCE WHICH IS NOT RECONCILED OR TALLIED. HOWEVER, THE ASSESSEE HAS FI LED RECONCILIATION STATEMENT OF ITA NO. 270/AGRA/2011 7 ACCOUNTS AS SUGGESTED BY THE LD. DR IN WHICH ALL TH E ENTRIES WERE GOT RECONCILED AND NO DIFFERENCE HAS BEEN POINTED OUT BY THE LD. D R. THEREFORE, ON THIS REASON ITSELF THIS GROUND IS LIABLE TO BE DISMISSED. IT IS ADMITTED FACT THAT THE ASSESSEE ACTED AS A COMMISSION AGENT OF THIS PARTY THROUGH AGREEME NT. ALL THE ENTRIES HAVE BEEN MADE PROPERLY. CONTRA ENTRIES HAVE ALSO BEEN MADE. THE LD. CIT(A) ON COMPARISON OF THE STATEMENT OF ACCOUNTS FOUND THE ENTRIES TALL IED WITH THE ACCOUNTS OF THE ASSESSEE. THEREFORE, MERELY ON ACCOUNT OF CONTRA EN TRIES MADE AT DIFFERENT TIMES BY THE ASSESSEE AND THE PRINCIPAL, THE AO SHOULD NOT H AVE HELD THAT THE ACCOUNTS DID NOT TALLY. THE ASSESSEE HAS FILED RECONCILIATION ST ATEMENT OF ACCOUNTS IN THE ACCOUNT BOOKS OF THE ASSESSEE AS WELL AS ACCOUNTS OF THE PA RTY. THE DIFFERENCE AFTER CONTRA ENTRIES IS STATED TO BE 0.10, WHICH IS NEGLIGIBLE A ND DID NOT POINT OUT ANY DIFFERENCE IN THE ACCOUNTS. THIS GROUND HAS, THEREFORE, MO MER IT AND IS ACCORDINGLY DISMISSED. 10. ON GROUND NO. 4, THE REVENUE CHALLENGED THE DEL ETION OF ADDITION OF RS.6,24,000/- ON ACCOUNT OF DISALLOWANCE U/S. 40A(3 ) FOR CASH PAYMENT. THE AO AFTER RECEIVING INFORMATION FROM MOHIT TRADERS U/S. 133(6) FOUND THAT CASH PAYMENTS HAVE BEEN MADE TO THIS PARTY OF RS.6,24,00 0/- (2 LACS + 2 LACS + 2,24,000) AND ACCORDINGLY MADE THE ADDITION. THE AS SESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT HE HAS NEVER ENTERED INTO SUCH TRANSACT IONS OF CASH PAYMENT WITH M/S. MOHIT TRADERS. THE INFORMATION RECEIVED IS TOTALLY INCORRECT AND AO HAS NOT CONFRONTED ANY MATERIAL TO THE ASSESSEE BEFORE MAKI NG THE ADDITION. THE LD. CIT(A) ITA NO. 270/AGRA/2011 8 ON VERIFICATION OF THE MATERIAL ON RECORD AND INFOR MATION U/S. 133(6), DELETED THE ADDITION. HIS FINDINGS IN PARA 3.2 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 3.2 ON PERUSAL OF RECORDS, M/S. MOHIT TRADERS, SA TNA HAS SUBMITTED COPY OF ITS BANK STATEMENT IN PNB A/C. NO .5430 ALONG WITH APPELLANT'S COPY OF ACCOUNT IN ITS BOOKS. CASH PAYM ENT OF RS.2,00,000/-, RS.2,00,000/- AND RS.2,24,000/- (TOT ALING RS.6,24,000/-) HAS BEEN SHOWN AS RECEIVED ON JUNE 1ST, 2ND AND 3RD , 2007. JOURNAL ENTRY FOR BILL NO. 3014 HAS BEEN MADE ON JUNE 7 TH FOR THE TOTAL AMOUNT. IN ADDITION TO THIS AMOUNT, PAYMENT OF RS.7,51,400/ -, RS.6,00,000/-, RS.1,15,000/- AND RS.6,70,800/- HAS ALSO BEEN RECEI VED FROM THE APPELLANT ON 7.5.07, 10.5.07, 23.5.07 AND 25.5.07 F OR BILL NOS.3006, 3012 AND 3015. ALL THESE PAYMENTS HAVE BEEN MADE TH ROUGH BANK AND THE SAME ARE FOUND REFLECTED IN THE BOOKS OF ACCOUN TS OF THE APPELLANT ALSO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE ORDER SHEET ENTRY DTD. 20.12.2010, THE APPELLANT HAS BEEN INFOR MED OF CASH PAYMENTS MADE TO M/S. MOHIT TRADERS BY THE A.O. NO COPY OF ACCOUNTS, AS RECEIVED BY THE A.O. DIRECTLY FROM M/S . MOHIT TRADERS HAS BEEN SHOWN OR MADE AVAILABLE TO THE APPELLANT. VIDE LETTER DTD 22.12.2010, THE APPELLANT HAS SUBMITTED BEFORE THE A.O. THAT THERE ARE DIFFERENCES FOUND IN RESPECT OF 3-4 PARTIES RELATIN G TO SOME OF THE ENTRIES WHICH HAVE BEEN NOTED BY THE A.O. AND GIVEN TO THE APPELLANT FOR COMMENTS. HE HAS CATEGORICALLY SUBMITTED IN RES PECT OF M/S. MOHIT TRADERS THAT THE APPELLANT HAS TRANSACTED ON EARLIE R OCCASIONS FOR WHICH PAYMENT HAS BEEN MADE THROUGH CHEQUES. NO PUR CHASES HAVE BEEN MADE NOR ANY PAYMENT MADE IN RESPECT OF RS.6,2 4,000/- WHICH HAS BEEN INCORRECTLY DEBITED AND CREDITED BY M/S. M OHIT TRADERS IN ITS BOOKS OF ACCOUNTS. THE APPELLANT HAS FURTHER REQUE STED THE A.O. THAT COPY OF STATEMENT OF CONCERNED PARTIES BE MADE AVAI LABLE TO HIM GIVING AN OPPORTUNITY TO GIVE DETAILED AND COMPLETE EXPLANATION FOR EACH PARTY AND EACH ENTRY, SINCE ONLY THE DIFFERENC E IS FOUND TO HAVE BEEN PROVIDED TO HIM BY THE A.O. THE APPELLANT HAS FURTHER REQUESTED TO GIVE AN OPPORTUNITY FOR CROSS EXAMINATION OF THE PARTIES CONCERNED WHERE DIFFERENCE HAS BEEN FOUND BEFORE TAKING ANY V IEW AGAINST HIM WHILE PASSING THE ASSESSMENT ORDER. HOWEVER, A.O. H AS PROCEEDED TO PASS THE ASSESSMENT ORDER ON 27.12.2010, WHEN APPEL LANT'S A.R. HAS ATTENDED THE HEARING, BUT NEITHER THE COPY OF STATE MENT OF M/S. MOHIT TRADERS HAS BEEN MADE AVAILABLE NOR ANY OPPORTUNIT Y OF CROSS EXAMINATION GIVEN TO THE APPELLANT WHEN THE STATEME NT HAS BEEN RECEIVED ABOUT A MONTH AGO. A.O. WAS UNDER OBLIGATI ON TO ALLOW THE ITA NO. 270/AGRA/2011 9 APPELLANT'S REQUEST REGARDING CROSS EXAMINATION IN VIEW OF HIS DENIAL OF THE SAID TRANSACTION. THAT WOULD HAVE BEEN IN TH E FITNESS OF THINGS AND IN COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTIC E. IT WAS INCUMBENT UPON THE A.O. TO FURTHER GIVE CROSS EXAMINATION OPP ORTUNITY, AS IT IS A FUNDAMENTAL RULE OR LAW THAT NO DECISION MUST BE TA KEN WHICH WILL AFFECT RIGHTS OF ANY PERSON WITHOUT GIVING HIM AN A DEQUATE OPPORTUNITY OF PUTTING FORWARD HIS CASE AND TO ALLO W HIM CROSS EXAMINATION OF A THIRD PARTY BEFORE COMING TO AN AD VERSE VIEW ON THE BASIS OF STATEMENT/INFORMATION OF THE SAID THIRD PA RTY. THE PRINCIPLES OF NATURAL JUSTICE ARE FUNDAMENTAL IN NATURE, VERY BASIC AND ARE NOT CONSTRUED OR MISTAKEN AS A MERE FORMALITY. IN CASE OF SHREERAM DURGA PRASAD & FATEHCHAND NURSINGH DAS VS ITSC (198 9) 176 ITR 169(SC), IT HAS BEEN HELD THAT THE ORDER PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IS NULL AND VOID. IT IS ALSO SEEN FROM THE STATEMENT OF M/S. MOHIT TRADERS, COPY OF WHICH HAS BEEN MADE AVAILABLE TO THE APPELLANT DURING THE COURSE OF APP EAL PROCEEDINGS, THAT IN RESPECT OF ALL OTHER PURCHASES EXCEPT FOR R S 6,24,000/- FIRST THE ENTRY HAS BEEN MADE FOR BILL NUMBER AND ON RECEIPT OF PAYMENT FROM THE APPELLANT THROUGH BANK ACCOUNT, APPELLANT'S ACC OUNT HAS BEEN CREDITED ACCORDINGLY SUBSEQUENTLY ON LATER DATES. H OWEVER, IN RESPECT OF THIS AMOUNT OF RS.6,24,000/-, CASH RECEIPT ENTRI ES HAVE BEEN MADE ON 1ST, 2ND AND 3RD JUNE WHEREAS ENTRY FOR THE CONC ERNED BILL (NO.3014) HAS BEEN MADE SUBSEQUENTLY ON 7 TH . A.O. HAS ALSO NOT BROUGHT ON RECORD THE SAID BILL FROM M/S. MOHIT TRA DERS, WHEN THE APPELLANT HAS DENIED TO HAVE CARRIED OUT THE SAID T RANSACTIONS. IN VIEW OF FACTS ABOVE, A.O. IS NOT FOUND JUSTIFIED IN MAKING ADDITION OF RS.6,24,000/- TO THE APPELLANT'S INCOME. THE SAM E IS, HEREBY, DELETED. 11. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE AO MADE ADDITI ON FOR CASH PAYMENTS NOTED BY THIS PARTY IN THEIR ACCOUNTS. THE BILL NO. 3014 WAS NOT BROUGHT ON RECORD. NO COPY OF ACCOUNTS OF M/S. MOHIT TRADERS RECEIVED DIR ECTLY BY THE AO HAS BEEN MADE AVAILABLE TO THE ASSESSEE. THE ASSESSEE DENIED TO E NTER INTO ANY TRANSACTION WITH THIS PARTY OF RS.6,24,000/- AND ALSO SOUGHT OPPORTUNITY FROM THE AO TO CROSS EXAMINE ITA NO. 270/AGRA/2011 10 THIS PARTY FOR MAKING THE AFORESAID ENTRY OF CASH P AYMENTS IN THE BOOKS OF ACCOUNT, BUT THE AO DID NOT SUPPLY COPY OF STATEMENT OF M/S. MOHIT TRADERS TO THE ASSESSEE AND GAVE NO OPPORTUNITY TO CROSS EXAMINE THIS PARTY . THEREFORE, PRINCIPLES OF NATURAL JUSTICE HAVE BEEN CLEARLY VIOLATED IN THE M ATTER. SINCE NO INCRIMINATING MATERIAL IS CONFRONTED TO THE ASSESSEE AND NO CROSS EXAMINATION OF THE PARTY IS ALLOWED TO THE ASSESSEE, THEREFORE, SUCH ENTRIES IN THE BOOKS OF ACCOUNT OF M/S. MOHIT TRADERS CANNOT BE READ AS EVIDENCE AGAINST TH E ASSESSEE. WE RELY UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KI SHAN CHAND CHELARAM VS. CIT, 125 ITR 713. THE LD. CIT(A) ON PROPER APPRECIATION OF FACTS AND LAW CORRECTLY DELETED THE ADDITION. THIS GROUND IS ACCORDINGLY DI SMISSED. 12. ON GROUND NO. 5, THE REVENUE CHALLENGED THE DEL ETION OF ADDITION OF RS.2,95,07,855/- ON ACCOUNT OF BOGUS CREDITORS. THE AO MADE ADDITION OF THE AFORESAID AMOUNT ON ACCOUNT OF INGENUINE/BOGUS SUND RY CREDITORS IN THE NAME OF RUCHI SOYA REFINERS (RS.42,92,706/-) AND MARVEL TEA ESTATE INDIA LTD., JABALPUR (RS.2,52,15,149/-). THE SAME HAVE BEEN TREATED AS B OGUS BY THE AO ON THE GROUND THAT THE LETTERS SENT TO THESE PARTIES ON THE ADDRE SS GIVEN BY THE ASSESSEE HAVE BEEN RECEIVED BACK AND THE EXPLANATION GIVEN BY THE ASSE SSEE ON 27.12.2010 IS NOT SATISFACTORY. ITA NO. 270/AGRA/2011 11 13. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND THE ASSESSEES WRITTEN SUBMISSION IS INCORPORATED IN TH E APPELLATE ORDER, IN WHICH THE ASSESSEE EXPLAINED THAT HUGE ADDITION MADE ON ACCOU NT OF NON-SERVICE OF SUMMONS ON THE ADDRESS GIVEN IS ARBITRARY UNJUSTIFIED AND M ADE WITH THE SOLE OBJECTIVE OF FRAMING A HIGH-PITCHED ORDER OF ASSESSMENT, WITHOUT ANY REFERENCE TO THE ACTUAL CIRCUMSTANCES OF THE CASE, ASSESSEE HAS SUPPLIED CO MPLETE INFORMATION LIKE NAME, ADDRESSES, TELEPHONE NUMBERS, PAN OF SUNDRY CREDITO RS AND IF ANY OF THEM RETURNED UNSERVED, THEN ASSESSEE SHOULD HAVE BEEN A LLOWED AN OPPORTUNITY TO PRODUCE THEM, IT IS PERTINENT TO NOTE HERE THAT ONE OF THE CREDITORS VIZ RUCHI SOYA REFINERS HAS FAXED ITS COPY OF ACCOUNT TO OFFICE OF THE ASSESSING AUTHORITY COGNIZANCE OF WHICH WAS NOT TAKEN AND M/S. MARVEL T EA ESTATE INDIA LTD. JABALPUR HAS SHIFTED ITS OFFICE, DUE TO WHICH THE SUMMONS CO ULD NOT BE SERVED UPON HIM, BUT ITS TELEPHONE NUMBER WERE ALSO AVAILABLE WITH LEARN ED ASSESSING AUTHORITY, BUT NO ATTEMPT WAS MADE TO CONTACT THEM AND OBTAIN THE REL EVANT INFORMATION NEITHER ASSESSEE WAS GIVEN ANY OPPORTUNITY TO PRODUCE THEM, HENCE THE ADDITION IS LIABLE TO BE DELETED BEING MADE WITHOUT PROPER APPLICATION OF MIND. I. COPY OF ACCOUNT OF M/S. RUCHI SOYA REFINERS, GWALIO R IN THE BOOKS OF ASSESSEE AS WELL AS LEDGER ACCOUNT OF ASSESSEE I N THE BOOKS OF RUCHI SOYA REFINERS ALONG WITH COPY OF RELEVANT BANK STAT EMENT EXTRACT AND PURCHASES VOUCHERS IS ENCLOSED HERE WITH FOR YOUR K IND PERUSAL AND NECESSARY VERIFICATION. ITA NO. 270/AGRA/2011 12 II. COPY OF ACCOUNT OF M/S. MARVEL TEA ES TATE INDIA LTD IN THE BOOKS OF ASSESSEE AS WELL AS LEDGER ACCOUNT OF ASSESSEE IN T HE BOOKS OF COMPANY ALONG WITH COPY OF RELEVANT BACK STATEMENT EXTRACT AND PURCHASE VOUCHERS IS ENCLOSED HERE WITH FOR YOUR KI ND PERUSAL AND NECESSARY VERIFICATION. PERUSAL OF THE ABOVE WILL SQUARELY PROVE THAT ALL T HE TRANSACTION WITH THE TRADE CREDITORS ARE RELEVANT TO BUSINESS OF THE ASSESSEE AND BOTH OF THEM IN THEIR OWN CAPACITY ARE ASCERTAINABLE, GENUINE ENTITIES, HENCE ACTION OF THE LEARNED ASSESSING AUTHORITY IN MAKING ADDITION OF TOTAL PURCHASES OF RS.4292706/- OF RUCHI SOYS REFINER AND RS.25215149/- OF MARBLE TEA ESTATE INDI A LTD. IS WHOLLY UNJUSTIFIED AND IRRATIONAL. THE AO BEFORE MAKING SUCH HUGE ADDI TION OF RS.29507855/- OUGHT TO HAVE LOGICALLY CONCLUDED HIS OBSERVATION, BUT JU ST BY SAYING - ON DT. 27.12.10 ASSESSEE SUBMITTED HIS COMPLIANCE BUT THAT IS NOT S ATISFACTORY, SO THE TRANSACTION WITH ABOVE PARTIES IS CONSIDERED BOGUS, HE DID NOT PERFORM HIS QUASI-JUDICIAL FUNCTIONS IN JUDICIOUS MANNER. WITHOUT PREJUDICE T O THE ABOVE IT IS FURTHER SUBMITTED IN THE FACTS OF THE CASE THAT TRADE CREDI TORS PER SE CANNOT BE EQUATED WITH CASH CREDITORS AND BY MAKING NON COMPLIANCE FO R FURNISHING OF INFORMATION ASKED U/S. 133(6) OF THE ACT BY THE THIRD PARTY, AS SESSEE CANNOT BE PENALIZED, WHEN HE HAS FURNISHED ALL THE DETAILS OF CREDITORS AS RE QUIRED BY LEARNED A.O. AND PROVED THE TRANSACTION BEYOND DOUBT WITH THE HELP OF OTHER SUPPORTING EVIDENCES LIKE ITA NO. 270/AGRA/2011 13 PURCHASES VOUCHERS, BANK STATEMENTS ETC. IT IS PERT INENT TO MENTION HERE THAT LEARNED A.O. HAS ACCEPTED PURCHASES MADE BY ASSESSE E FROM THE SAID PARTIES, BY NOT DISTURBING ITS TRADING RESULTS THEN TREATING THE PU RCHASES CONTRARY TO THAT AND ADDING THE SAME AS BOGUS IS UNTENABLE. IN THIS REGARD ASSE SSEE RELIES ON FOLLOWING CASE LAWS: (A) (2006) 205 CTR 444 (ALL) (B) (2006) 101 TTJ (ALL) 810 HENCE IN THE FACTS OF THE CASE, IT WAS REQUESTED TO DELETE THE ADDITION OF RS.29507855/- MADE TO RETURNED INCOME OF ASSESSEE. 14. THE LD. CIT(A) ON VERIFICATION OF THE MATERIAL ON RECORD DELETED THE ADDITION. HIS FINDINGS IN PARA 5.2 AND 5.3 OF THE APPELLATE O RDER ARE REPRODUCED AS UNDER : 5.2 APPELLANTS SUBMISSIONS ALONGWITH ASSESSMENT R ECORDS AND ENQUIRY FOLDER HAVE BEEN CONSIDERED CAREFULLY. IN RESPECT OF RUCHI SOYA REFINERS, TRANSPORT NAGAR, GWALIOR, LETTER DTD . 4.11.2010 ISSUED BY THE A.O. SEEKING INFORMATION IN RESPECT OF THE A PPELLANT U/S 133(6) HAS BEEN RECEIVED BACK BY THE A.O. ON 12.11.2010 WI TH THE REMARKS OF POSTAL AUTHORITIES THAT ON 9TH, 10TH & 11 TH OF NOVEMBER, THE SAID FIRM HAS BEEN FOUND CLOSED. SIMILARLY, IN RESPECT OF M/ S. MARVEL TEA ESTATE INDIA LTD., NEAR DHANE KI KUTIA, ADHARTAL, J AIPUR (RAJASTHAN), SIMILAR LETTER HAS BEEN RECEIVED BACK ON 26.11.2010 WITH THE REMARKS TO WRITE CORRECT AND COMPLETE ADDRESS. THE APPELLA NT, THROUGH HIS A.R. ATTENDED ON VARIOUS OCCASIONS BEFORE THE A.O. ON 23.11.10, 2.12.10, 12.12.10, 20.12.10, BUT NO QUERY HAS BEEN MADE BY THE A.O. REGARDING THESE TWO CREDITORS EXCEPT ON 12.12.2010, WHEN HE HAS BEEN ASKED AS TO WHY THE SAID PARTIES BE NOT CONSIDERED INGENUINE. IN RESPONSE, THE APPELLANT HAS GIVEN HIS DAY-WISE AND PARTY-WISE PURCHASE EXPENSES, LEDGER ACCOUNT ALONGWITH COPIES OF BILLS OF THE SAID TWO PARTIES. THE A.O. HAS ALSO OBTAINED U/S 13 3(6) APPELLANT'S ASSESSMENT ORDERS DTD. 22.5.2010 FOR THE PERIOD 1.4 .2007 TO 31.3.08, ITA NO. 270/AGRA/2011 14 I.E. THE YEAR UNDER APPEAL FROM TRADE TAX AUTHORITI ES WHEREBY ASSTT. COMMISSIONER, TRADE TAX, GUNA HAS ASSESSED THE VAT SALES OF THE APPELLANT AT RS.40,35,76,053/- AND CENTRAL SALES AT RS.26,86,26,380/-. SALES AND PURCHASES DECLARED BY THE APPELLANT AS PE R HIS AUDITED BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED BY THE A.O. A .O HAS NOT MENTIONED ANY DEFECT THEREIN. THOUGH THE G.P. HAS B EEN TAKEN @ 0.65% AS COMPARED TO 0.439% DECLARED BY THE APPELLA NT BUT THAT IS ON COMPARISON WITH LAST YEAR; BOOKS OF ACCOUNTS OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION HAVE BEEN ACCEPTED BY THE A.O. PAYMENTS MADE TO BOTH THE CREDITORS ARE FOUND DULY REFLECTED IN THE BANK ACCOUNTS OF THE APPELLANT IN HDFC BANK AND S.B.I. IN FACT, M/S. RUCHI SOYA REFINERS HAS FAXED COPY OF ACCOUNT OF TH E APPELLANT IN ITS BOOKS OF ACCOUNTS ON 20.12.2010 AT 2.52 P.M. ADDRES SED TO THE A.O. NO COGNIZANCE HAS BEEN TAKEN OF THE SAME BY THE A.O . WHO FOR THE REASONS BEST KNOWN TO HIM, HAS PROCEEDED TO TREAT T HE SAID PARTY AS BOGUS. NO FURTHER EFFORT HAS BEEN MADE BY THE A.O. TO REJECT THE EVIDENCE GIVEN BY THE APPELLANT AND THE THIRD PARTY BEFORE MAKING THE IMPUGNED ADDITION. 5.3 IN RESPECT OF MARVEL TEA ESTATE, JABALPUR, AS PER COPY OF ACCOUNT SUBMITTED BY THE APPELLANT, TOTAL PURCHASES OF RS.2,68,43,059/- HAVE BEEN MADE DURING THE YEAR AND CLOSING BALANCE OF RS.1,07,79,352/- HAS BEEN SHOWN. ALL THE PAYMENT S HAVE BEEN MADE THROUGH ITS BANK ACCOUNTS IN OBC. PURCHASES INCLUD E VAT SALES BY MARVEL TEA ESTATES BESIDES CENTRAL ACCOUNTS SALES. AS PER INVOICES, COMPLETE DETAILS LIKE TIN NO., PHONE NO., ADDRESS, VEHICLE NO. FOR DELIVERY ETC. GIVING THE QUANTITATIVE DETAILS OF SA LES MADE BY IT DURING THE YEAR TO THE APPELLANT HAVE BEEN GIVEN. SIMILAR TRANSACTIONS HAVE BEEN MADE DURING NEXT ASSTT. YEAR ALSO TO THE TUNE OF RS.L,32,11,632/-. A.O. HAS NOT TAKEN COGNIZANCE OF ANY OF THESE DETAI LS AND HAS NEITHER MADE ANY OTHER ENQUIRY FROM BANK, TRADE TAX AUTHORI TIES ETC. BEFORE COMING TO THE CONCLUSION THAT THE SAID CREDITOR IS BOGUS. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE APPELLANT HAS M ADE PURCHASES/SALES OUTSIDE HIS BOOKS OF ACCOUNTS. SALES DECLARED BY THE APPELLANT AS PER HIS RETURN A LSO TALLIED WITH THE DETAIL OF SALES OBTAINED BY THE A.O. FROM TRADE TAX AUTHORITIES U/S 133(6). THUS, THE A.O. IS NOT JUSTIFIED IN TREATING THE AMOUNT OF RS. 2,95,07,855/- AS BOGUS PURCHASES SOLELY ON THE REASON THAT THE LETTE R SENT BY HIM TO THE CONCERNED PARTY HAS BEEN RECEIVED BACK. SIMILARLY, TOTAL PURCHASES AS ITA NO. 270/AGRA/2011 15 DECLARED BY THE APPELLANT HAVE ALSO BEEN ACCEPTED, THUS THE CREDIT BALANCE APPEARING IN ONE ACCOUNT CANNOT BE TREATED AS UNEXPLAINED AS THEY ARE NOT TO BE EQUATED WITH CASH CREDIT. IT IS ALSO SEEN THAT THE SAID LETTER HAS BEEN SENT AT THE ADDRESS WHICH IS I NCOMPLETE AND DOES NOT TALLY WITH THE ADDRESS MENTIONED IN INVOICES OF THE SAID COMPANY AND HAS, THUS, BEEN RETURNED BACK BY THE POSTAL AUT HORITIES TO MENTION CORRECT AND COMPLETE ADDRESS. ACCORDINGLY, ADDITION OF RS.2,95,07,855/- IS, HEREBY DELETED. 15. THE LD. DR RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT THE LETTERS SENT TO THE PARTIES WERE NOT SERVED. THE LD. CIT(A) MERELY ON THE BASIS OF THE RECORD OF THE ASSESSEE DELETED THE ADDITION AND EVE N NO CONFIRMATION FROM THE PARTIES HAVE BEEN FILED. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND REFERRED TO THE COPY OF ACCOUNT OF BOTH THE PARTIES IN THE BOOKS OF ASSESSEE AS WELL AS LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF BOTH THE PA RTIES ALONGWITH THE COPY OF RELEVANT BANK STATEMENT AND ALSO REFERRED TO THE PU RCHASE VOUCHERS AND GOT TALLIED SOME OF THE PURCHASE VOUCHERS WITH THE STATEMENT OF ACCOUNT AND BANK STATEMENT. HE HAS ALSO SUBMITTED THAT NO ADDITION COULD BE MAD E IN RESPECT OF PURCHASES MADE IN THE YEAR BECAUSE THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL. THE ADDRESS OF M/S. MARVEL TEA ESTATE INDIA LTD. IS AT JABALPUR (MP), BUT THE NOTICE HAS BEEN ISSUED AT JAIPUR. HE HAS ALSO REFERRED TO COPY OF T HE FAX ISSUED BY THE ASSESSEE AND POINTED OUT THAT IN THE CASE OF M/S. RUCHI SOYA REF INERS, THERE IS DEBIT BALANCE, FOR WHICH NO ADDITION COULD BE MADE AGAINST THE ASSESSE E AND IN THE CASE OF M/S. MARVEL TEA ESTATE INDIA LTD., THE CREDIT BALANCE IS OF RS.1.07 CRORES ONLY (PB C- ITA NO. 270/AGRA/2011 16 197). HE HAS SUBMITTED THAT SINCE THE PURCHASES HAV E BEEN MADE BY THE ASSESSEE AND ACCOUNTS HAVE NOT BEEN DISPUTED BY THE AO AND A CCOUNTS OF THE ASSESSEE HAVE BEEN ACCEPTED BY VAT DEPARTMENT AND PURCHASES HAVE BEEN ACCEPTED, THEREFORE, WHOLE ADDITION IS UNJUSTIFIED ON ACCOUNT OF UNEXPLA INED CREDITS. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND DID NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF ARGUM ENTS TOOK US THROUGH VARIOUS STATEMENTS OF BOTH THE PARTIES IN THEIR BOOKS OF AC COUNTS AND BOOKS OF ACCOUNT OF THE ASSESSEE TO SHOW THAT THE PURCHASES ARE PROPERL Y ENTERED IN THE ACCOUNTS WHICH ARE SUPPORTED BY VOUCHERS AND PAYMENTS HAVE BEEN MA DE THROUGH BANKING CHANNEL. THE ADDRESS OF M/S. MARVEL TEA ESTATE INDI A LTD. IS OF JABALPUR (MP), BUT THE AO IS STATED TO HAVE ISSUED THE SUMMON AT JAIPU R (RAJ.). THE AO ACCEPTED THE BOOKS OF ACCOUNT AND NO DISCREPANCIES HAVE BEEN POI NTED OUT IN THE PURCHASE AND THE BOOK RESULTS AND THE PURCHASES HAVE ALSO BEEN A CCEPTED BY THE DEPARTMENT OF VAT. THE PURCHASES ARE SUPPORTED BY VOUCHERS AND BA NK STATEMENT. THE LD. CIT(A) SPECIFICALLY NOTED THAT NO QUERY HAS BEEN RA ISED REGARDING THESE CREDITORS BY THE AO FOR HOLDING THE SAME TO BE INGENUINE. THE REFORE, SUCH FINDING ITSELF IS SUFFICIENT TO REJECT THIS GROUND OF APPEAL OF THE R EVENUE. DURING THE COURSE OF ARGUMENTS SINCE THE LD. COUNSEL FOR THE ASSESSEE HA S GOT TALLIED THE PURCHASES SUPPORTED BY VOUCHERS AND BANK STATEMENT AND NO DIS CREPANCY IN THE SAME HAVE ITA NO. 270/AGRA/2011 17 BEEN POINTED OUT BY THE LD. DR DURING THE COURSE OF ARGUMENTS WOULD CLEARLY SUGGEST THAT THE REVENUE HAS NO MERIT IN THIS GROUN D OF APPEAL. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THIS GROUND OF APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 17. ON GROUND NO.6, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.6,28,678/- ON ACCOUNT OF FREIGHT PAYMENT. THE AO DISALLOWED SAME EXPENSES. THE AO NOTED THAT THE ASSESSEE HAS CLAIMED AMOUNT O F RS.6,51,478/- UNDER FREIGHT EXPENSES, BUT HAS GIVEN EVIDENCE OF RS.22,800/-. TH EREFORE, ADDITION WAS MADE. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE AO HAS NOT APPRECIATED THE DOCUMENTS PRODUCED BEFORE HIM. THE ASSESSEE MAINTAI NED TWO SEPARATE ACCOUNTS FOR FREIGHT PAYMENTS WHICH WERE FURNISHED BEFORE TH E AO. THE AO TOOK COGNIZANCE OF ONLY ONE OF THE ACCOUNTS AND DUE TO O VERSIGHT OTHER COULD NOT BE SEEN. THE AO NEVER PROVIDED ANY OPPORTUNITY BEFORE MAKING THE ADDITION. THE LD. CIT(A) ON EXAMINATION OF RECORD FOUND THAT FOR THE BALANCE AMOUNT OF FREIGHT, THE DETAILS ARE PROVIDED WHICH IS GIVEN IN PURCHASE ACC OUNT AND WAS FILED BEFORE THE AO AT ASSESSMENT STAGE. THEREFORE, THE ADDITION IS UNJUSTIFIED. THE ACCOUNTS SUBMITTED BY THE ASSESSEE GIVE PARTY-WISE PAYMENT O F FREIGHT EXPENSES. THE ADDITION WAS ACCORDINGLY DELETED. ITA NO. 270/AGRA/2011 18 18. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE DO NO T FIND ANY MERIT IN THIS GROUND OF APPEAL OF REVENUE. THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO SHOW THAT FREIGHT EXPENSES HAV E BEEN PROPERLY CLAIMED. IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD, WE DO N OT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE SAME IS ACCORDINGLY D ISMISSED. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY