The ITO, Ward-1(1), Surat V. M/s. Abhishek Ispat Pvt.Ltd., Surat

ITA 2709/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9873 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 01-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIP GARG
• Assessee Lawyers: RASESH B SHAH
• Keywords: Bogus purchase; Principle of natural justice; Question of law; Corroborative evidences; Cancellation of registration
• Section: 69C; 133(6); 143(1); 147; 69; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD D BENCH, BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI A. N. PAH UJA, A.M . ITA NO.2709/AHD/2008 A. Y.: 2005-06 THE INCOME TAX OFFICER, WAD 1(1), SURAT VS M/S. ABHISHEK ISPAT PVT. LTD., PLOT NO.5713, ROAD NO.57, GIDC, SACHIN, SURAT PA NO. AABCA 9858 J (APPELLANT) (RESPONDENT) FOR APPELLANT BY: SHRI SANDIP GARG, DR FOR RESPONDENT BY: SHRI RASESH B. SHAH, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT (A) I, SURAT DATED 30-05-2008 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A)-I, SURAT HAS ERRED IN A LLOWING THE APPEAL ON THE GROUND THAT SHRI AMRATBHAI P. PRAJAPA TI HAS NEGATED HIS STATEMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A)-I, SURAT HAS ERRED IN D ELETING THE ADDITION OF RS.76,14,067/- MADE BY THE ASSESSING OF FICER U/S. 69 C OF THE ACT, ON ACCOUNT OF UNEXPLAINED EXP ENSES. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 2 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BE LOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. THE FACTS OF THE CASE ARE THAT THE A O IN THE AS SESSMENT ORDER STATED THAT ASSESSEE HAS FILED ITS RETURN OF INCOME AT NIL ON 31-10-2005 WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT. THEREAFTER, AS INFORMATION WAS RECEIVED FROM DDIT ( INV.), BARODA/ADIT (INV)-III, SURAT THAT THE ASSESSEE HAD PURCHASED GOODS WORTH RS.56,22,347/- AND RS.19,91,720/- FROM BHAGYODAYA ENTERPRISES, BARODA AND BHAVNA TRADING CO., BARODA RESPECTIVELY. THE REPORT STATED THAT BOTH THESE FIRMS WERE PROPRI ETARY CONCERNS OF SHRI AMRATBHAI PRAJAPATI A RESIDENT OF BARODA. T HE REPORT STATED THAT THIS PERSON WAS EXAMINED U/S131 (1A) OF THE IT ACT IN CONNECTION WITH VERIFICATION OF BCTT, CASH WITHDRAW AL FROM HDFC BANK. ACCORDING TO THE REPORT, IT WAS FOUND THAT SH RI PRAJAPATI HAD ISSUED BOGUS SALE BILLS TO VARIOUS CONCERNS INCLUDI NG THE ASSESSEE COMPANY. IT WAS STATED IN THE REPORT THAT TWO FIRMS HAVE SIMPLY ISSUED SALE BILLS TO THE ASSESSEE COMPANY AND, THER EFORE, THE ASSESSMENT FOR CURRENT YEAR WAS OPENED U/S 147 OF T HE IT ACT BY ISSUING A NOTICE U/S 148 OF THE IT ACT ON 28.11.200 6. THE ASSESSEE COMPANY STATED THAT THE RETURN FILED U/S 139 OF THE IT ACT MAY BE CONSIDERED AS RETURN FILED IN RESPONSE TO NOTICE U/ S 148 OF THE IT ACT. 3.1 THE A O HAS STATED THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING AND CUTTING OF H. R. COI LS AND NON- ALLOYED SHEETS OF DIFFERENT SIZES. IN THE CURRENT Y EAR, THE ASSESSEE HAS SHOWN A TURNOVER OF RS.23.06 CRORES AND GROSS P ROFIT RATE OF 2.05% IN COMPARISON WITH A TURNOVER OF RS.15.69 CRO RES AND GROSS ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 3 PROFIT RATE OF 2.54% IN THE LAST YEAR. THE A O HAS STATED THAT AS PER REPORT RECEIVED FROM DDIT (INV), BARODA SHRI PRAJAP ATI HAD CATEGORICALLY STATED THAT NO ACTUAL BUSINESS TRANSA CTIONS WERE MADE BY HIS PROPRIETARY CONCERNS WITH THE ASSESSEE COMPANY. THE CHEQUE ISSUED AGAINST THE SALE BILL HAD BEEN DEPOSI TED IN HIS BANK ACCOUNT MAINTAINED WITH HDFC BANK, BARODA. LATER ON , HE ISSUED BEARER CHEQUES TO THE SALE PARTY ITSELF TO WITHDRAW THE SALE CONSIDERATION. HE KEPT MEAGER AMOUNT AS HIS DALALI AND BEARER CHEQUE FOR THE BALANCE AMOUNT WAS ISSUED. ACCORDING TO THE A O, THIS MODUS OPERANDI DISCUSSED BY SHRI PRAJAPATI HAS BEEN FOUND TO BE CORRECT DURING THE COURSE OF INQUIRIES CARRIED O UT U/S 133 (6) OF THE IT ACT WITH HDFC BANK. THE A O HAS PREPARED A T ABLE ON PAGE NO. 4 AND 5 OF THE ASSESSMENT ORDER SHOWING DATE OF PURCHASES AND DATE OF PAYMENTS IN RESPECT OF PURCHASES MADE F ROM BHAGYODAYA ENTERPRISES AND BHAVNA TRADING CO. THE P URCHASES WERE FROM MADE FROM JUNE, 2004 TILL AUGUST, 2004 FR OM BHAGYODAYA ENTERPRISES AND PAYMENT WAS MADE TO THIS FIRM FROM SEPTEMBER, 2004 TO DECEMBER, 2004. THE TOTAL PURCHA SES MADE WAS OF RS.55,22,347/- AND THE TOTAL PAYMENT MADE WA S ALSO RS.56,22,347/-. IN RESPECT OF BHAVNA TRADING CO., T OTAL PURCHASES OF RS.19,91,720/- WAS MADE FROM JUNE, 2004 TILL JUL Y, 2004 AND TOTAL PAYMENT OF RS.14,41,650/- WAS MADE IN SEPTEMB ER, 2004 AND BALANCE PAYMENT OF RS.5,50,00/- WAS MADE ON 31 ST MARCH, 205. 3.2 THE A O FURTHER STATED THAT SINCE MR. PRAJAPATI HAD STATED THAT ONLY SALE BILLS WERE GIVEN BY BHAGYODAYA ENTER PRISES AND BHAVNA TRADING CO., BARODA, HE ASKED THE ASSESSEE T O PRODUCE BOTH PARTIES PERSONALLY FOR FURTHER VERIFICATION AL ONG WITH THEIR ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 4 BOOKS OF ACCOUNTS IF THE ASSESSEE COMPANY WAS STILL OF THE OPINION THAT THE TRANSACTIONS CLAIMED IN THE NAME OF THESE PARTIES WERE GENUINE. THE A O FURTHER STATED IN PARA 8 OF THE AS SESSMENT ORDER THAT THE LEARNED COUNSEL FOR THE ASSESSEE COMPANY W AS SPECIFICALLY CONVEYED THAT HE GOT CONFIRMATION LETT ER IN THE NAME OF BHAGYODAYA ENTERPRISES, BARODA AND BHAVNA TRADING C O., BARODA WHICH CONTRADICTED THE EARLIER STATEMENT, ACCORDING LY, PRODUCE THE PROPRIETOR OF BOTH CONCERNS PERSONALLY TO ASCERTAIN CORRECT STATE OF AFFAIRS VIDE ORDER SHEET ENTRY DATED 27-02-2007. HO WEVER, NO EFFORT IN THIS REGARD WAS MADE BY THE ASSESSEE COMPANY. TH E A O HAS FURTHER STATED THAT THE INQUIRIES FROM THE BANKS FU RTHER REVEALED THAT THE PAYMENT OF RS.14,41,650/- MADE BY THE ASSESSEE COMPANY TO BHAVNA TRADING CO. BY WAY OF CHEQUE WAS DEPOSITED I N THE BANK OF BHAVNA TRADING CO. BUT CASH WAS WITHDRAWN THROUG H EVEN BEARER CHEQUES ISSUED BY BHAVNA TRADING CO. THE COP IES OF ALL SEVEN CHEQUES WERE SENT BY ABN AMRO BANK TO THE A O . IN THE SAME FASHION, THE SALE BILL AMOUNT WAS WITHDRAWN IN CASH THROUGH VARIOUS BEARER CHEQUES ISSUED BY SHRI PRAJAPATI BEI NG PROPRIETOR OF BHAVNA TRADING CO. IN VIEW OF THIS REASON, THE A O HAS STATED IN PARA 9 OF THE ASSESSMENT ORDER THAT THESE FACTS EST ABLISHED THAT THE CHEQUES ISSUED AGAINST PURCHASES WERE RECEIVED BACK IN CASH WITHIN SHORT TIME. THIS FACT WAS ALSO BROUGHT TO TH E NOTICE OF THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. IN VIEW OF THIS REASON, THE A O ISSUED SHOW CAUSE L ETTER ON THIS ISSUE VIDE LETTER DATED 05-09-2007 AND 15-09-2007 A ND REQUESTED THE ASSESSEE TO PROVE GENUINENESS OF THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THESE TWO FIRMS. ACCORDING TO T HE A O, THE ASSESSEE COMPANY MADE NO EFFORT TO PROVE ITS CASE. THE A O HAS STATED THAT THEREFORE, A FINAL SHOW CAUSE NOTICE WA S ISSUED TO THE ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 5 ASSESSEE COMPANY ON 21-01-2007. IN THIS NOTICE, THE A O POINTED OUT THAT IT HAS BEEN FOUND THAT THE CHEQUES ISSUED BY THE ASSESSEE WERE CLEARED IN THE RESPECTIVE CONCERNED ACCOUNT AN D LATER ON THE CASH WAS WITHDRAWN THROUGH BEARER CHEQUES. ACCORDIN G TO THE A O, THESE INQUIRIES ESTABLISHED THAT THE ASSESSEE HAD CLAIMED BOGUS PURCHASES IN THE NAME OF BOTH THESE CONCERNS AGGREGATING TO RS.76,14,067/-. THE A O ASKED THE ASSESSEE AS TO WHY THIS AMOUNT IS NOT TO BE ADDED TO THE TOTAL INCOME OF TH E ASSESSEE COMPANY. 3.3 IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, THE ASSESSEE FILED ITS WRITTEN SUBMISSION DATED 17-12-2007 AND O BJECTED TO THE ADDITION. THE A O HAS REPRODUCED THE RELEVANT PART OF THE REPLY IN PARA 10 FROM PAGE 8 TO 13 OF THE ASSESSMENT ORDER. THE GIST OF THE REPLY GIVEN BY THE ASSESSEE TO THE A O IS AS UNDER: I) THE ASSESSEE IN THE BUSINESS OF TRADING OF STEE L. THE GOODS ARE PURCHASED FROM DIFFERENT PARTIES ARRANGED BY A GROUP OF ESTABLISHED BROKERS. A MAJOR CHUNK OF PURC HASES ARE MADE THROUGH THESE BROKERS ONLY. THIS IS A WIDE LY PREVALENT PRACTICE IN THE MARKET. THE BROKERS USUAL LY STANDS GUARANTEE FOR SUPPLY OF MATERIAL AND PAYMENTS. II) GOODS HAVE BEEN PURCHASED FROM BHAGYODAYA ENTERPRISES AND BHAVNA TRADING CO. AT MULTIPLE POIN TS OF TIME. THE ASSESSEE HAS ALREADY FILED CONFIRMATIONS OF THE PARTIES ALONG WITH PAN AND, THEREFORE, IDENTITIES O F THE PARTY HAVE BEEN ESTABLISHED. COPIES OF THE BANK SHOWS THA T THE PAYMENT WAS MADE BY THE ACCOUNT PAYEE CHEQUES AND THEREFORE, THE GENUINENESS OF TRANSACTION HAS ALSO BEEN ESTABLISHED. A CONTRACT ACCOUNT CONFIRMATIONS RECEI VED FROM THE PARTY HAVE ALSO BEEN FILED DURING THE ASSESSMEN T PROCEEDINGS. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 6 III) IT IS PERTINENT TO NOTE THAT THE VERIFICATION CARRIED OUT BY THE A O FROM SHRI PRAJAPATI BY WAY OF CALLING FOR I NFORMATION U/S 133 (6) HAS ALSO YIELDED THE SAME RESULTS AND R EINFORCED THE BONAFIDE AND GENUINENESS OF THE TRANSACTIONS UN DER EXAMINATION. THE ADMITTED AND UNDISPUTED FACT OF TH E PAYMENTS BEING MADE AND THE SAME BEING CREDITED IN THE SELLERS (BOTH THE PARTIES) BANK ACCOUNTS ALSO ESTAB LISHED THE GENUINENESS OF TRANSACTIONS. IV) THE A O HAS NOT SUPPLIED COPY OF THE STATEMENT OF SHRI PRAJAPATI SATED TO HAVE BEEN RECORDED ON OATH BECAU SE OF WHICH THE ASSESSMENT HAS BEEN REOPENED AND, THEREFO RE, THE CONTEXT OF THE STATEMENT AND THE PURPOSE OF REC ORDING OF THE STATEMENT ARE NOT INFORMED TO THE ASSESSEE. THE ASSESSEE FURTHER STATED BEFORE THE A O THAT ALONG W ITH SHRI PRAJAPATI HAD DENIED THE TRANSACTION OF SALE BY HIS FIRMS OF THE ASSESSEE COMPANY DURING THE EXAMINATION BY DDIT (INV), BARODA BUT LATER ON HE HIMSELF HAS ADMITTED THAT TRANSACTIONS IN RESPONSE TO NOTICE U/S 133 (6) ISSU ED BY A O AND, THEREFORE, THE STATEMENT CANNOT BE TAKEN COGNI ZANCE OF. THE ASSESSEE STATED THAT ON THESE FACTS, THE STATEM ENT RECORDED AND NOT CONFRONTED CANNOT BE RELIED UPON. V) THE ASSESSEE FURTHER STATED BEFORE THE A O THAT IT IS A UNDISPUTED AND ACKNOWLEDGED FACT, AS MENTIONED IN T HE SHOW CAUSE NOTICE DATED 21.11.2007, THAT THE PAYMEN TS MADE FOR THE PURCHASE TRANSACTIONS HAVE BEEN CREDIT ED IN THE REGULAR BANK ACCOUNTS OF THESE SELLER CONCERNED UNLIKE THIRD UNRELATED BANK ACCOUNTS WHICH WOULD BE THE SC ENARIO IN CASE OF A SUSPICIOUS PURCHASE TRANSACTIONS. THE FAC T THAT THE PAYMENTS HAVE BEEN ACCEPTED AND DEPOSITED IN ITS OW N ACCOUNT OF THE SELLER ESTABLISHED THE GENUINENESS O F TRANSACTIONS THUS THE ONUS UPON THE ASSESSEE OF PRO VING THE GENUINENESS OF TRANSACTIONS HAS BEEN ADEQUATELY DISCHARGED. WHAT TREATMENT WAS METED OUT BY THE SE LLER IN RESPECT OF THE SALE PROCEED CANNOT LEAD TO AN ADVER SE INFERENCE BECAUSE THE ASSESSEE CANNOT BE CALLED IN TO ACCOUNT FOR AND EXPLAIN THE AFFAIR OF A THIRD PARTY NOT IN ITS CONTROL. VI) THE ASSESSEE FURTHER STATED THAT THE SAME SET O F BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCE WERE ALSO PRODU CED BEFORE THE ADIT (INV), SURAT. NO DEFECTS IN THE BOO KS OF ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 7 ACCOUNTS AND THE SUPPORTING EVIDENCES COULD BE IDEN TIFIED BY THE ADIT (INV), SURAT. THE ASSESSEE HAD INFORMED TH E ADIT (INV) THAT THE TRANSACTION WAS ARRANGED THROUGH A B ROKER SHRI PAVAN BOKADIA WHO WAS THEIR REGULAR BROKER. VII) THE ASSESSEE FURTHER STATED BEFORE THE A O THE Y HAVE GIVEN THE QUANTITATIVE DETAILS FROM TIME TO TIME AN D PERUSAL OF THE SAME CLEARLY ESTABLISHED THAT THE SAID GOODS HA VE BEEN SOLD BY THE ASSESSEE AND TAX ON THE PROFIT ON A SAM E IS ALSO PROMPTLY OFFERED FOR TAX AS PER THE RETURN OF INCOM E UNDER CONSIDERATION. THE ASSESSEE STATED THAT IN A HYPOTH ETICAL SITUATION OF THE PURCHASES NOT BEING MADE THAN THER E CANNOT BE CORRESPONDING SALES THE ASSESSEE INVITED THE A O S ATTENTION TO THE DECISION OF HON'BLE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF CIT VS LEADERS VALVES (P) LTD. 285 ITR 435 WHEREIN ON IDENTICAL SET OF FACTS THE HON'BLE CO URT HELD THAT THERE WAS NO BASIS FOR TREATING THE PURCHASES MADE BY THE ASSESSEE FROM SEVEN SCRAP DEALERS AS BOGUS AS T HE CONSUMPTION STOOD FULLY PROVED AND THE EXISTENCE OF THE SAID PARTY COULD NOT BE DENIED TRIBUNAL HAS CONCURRED WITH THE CONCLUSION OF THE CIT (A) IN VIEW OF THE FACT THAT THE TRADING RESULTS OF THE ASSESSEE HAVE BEEN ACCEPTED OR ALONE IT HAS ALSO ACCEPTED THE CONTENTION OF THE ASSESSEE TH AT IF THE A OS CONCLUSION IS ACCEPTED AND PURCHASES WORTH RS .1.49 CRORES ARE TREATED AS BOGUS IT WOULD BE IMPOSSIBLE TO MANUFACTURE THE GOODS SHOWN TO HAVE BEEN MANUFACTUR ED BY IT. THE ASSESSEE STATED THAT IN THE CURRENT CAS E ALSO THE QUANTITATIVE TALLY SUBMITTED BEFORE THE A O CLEARLY SHOWS THAT THE SALES HAVE TAKEN PLACE. THE SALES HAVE BEEN FUL L PROVED BY THE SUPPORTING DOCUMENTS AND EVIDENCES. THE EXIS TENCE OF THE PARTIES ALSO CANNOT BE DENIED IN VIEW OF THE EVIDENCES SUBMITTED ON RECORD. IN FACT, THE DEPARTMENT ITSELF HAS RECEIVED THE CONFIRMATION OF THE TRANSACTIONS AND T HE RELEVANT LEDGER ACCOUNT OF THE CONCERNED PARTY DURING VERIFI CATION U/S 133 (6A). IN VIEW OF THE QUANTITATIVE TALLY NO MANI PULATION IS POSSIBLE AS THE ASSESSEE IS ENGAGED IN TRADING ACTI VITY ONLY AND THE QUANTITATIVE TALLY OF THE STOCK IS FULLY VE RIFIABLE FROM THE BOOKS OF ACCOUNTS SUBMITTED BEFORE THE A O AND THE ADIT (INV) , SURAT. 3.4 IN VIEW OF THE ABOVE, THE ASSESSEE STATED BEFOR E THE A O THAT THE PROPOSED ADDITION OF THE GENUINE PURCHASES FROM BHAGYODAYA ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 8 ENTERPRISES AND BHAVNA TRADING CO. TREATING THEM AS BOGUS PURCHASES IS UNJUSTIFIED. THIS PROPOSED ADDITION IS ALSO AGAINST THE RULES OF NATURAL JUSTICE AS THE STATEMENT ON THE BA SIS OF WHICH THE ADDITION IS PROPOSED HAS NEVER BEEN MADE AVAILABLE TO THE ASSESSEE SO THAT HE ASSESSEE SHOULD CONSIDER AVAILI NG OF OPPORTUNITY TO EXAMINE THE PERSON IF NEEDED AND ASC ERTAIN THE BASIS OF THE ADDITION. A STATEMENT OF SOMEONE IN RE SPECT OF WHICH CROSS EXAMINATION OPPORTUNITY IS NOT GIVEN AND WITH OUT ANY CORROBORATIVE EVIDENCE, WHEN THE DEPARTMENT ITSELF HAS RECEIVED CONFIRMATION AND CONTRA ACCOUNT FROM THE SAME PARTY , CAN IN NO WAY BE A SUBSTANTIAL EVIDENCE AND BASIS TO TREAT TH E GENUINE PURCHASES AS BOGUS. 4. THE A O DID NOT ACCEPT THE ABOVE EXPLANATION OF THE ASSESSEE FOR THE FOLLOWING REASONS: I) THE ARGUMENT THAT THE ASSESSEE HAS DISCHARGED IT S ONUS OF PROVING THE PURCHASES WOULD BE ACCEPTABLE I N MODERATE SITUATION BUT NOT IN THE AVAILABLE CIRCUMSTANCES BECAUSE PURCHASES MADE FROM BOTH THE CONCERNS SAME RUN BY THE SAME PERSON SHRI PRAJAPATI WHO, DURING HIS CROSS EXAMINATION BY THE INVESTIGAT ION WING OF BARODA, CLARIFIED HIS MODUS-OPERANDI AND ADMITTED THAT HE HAD ISSUED ACCOMMODATING BILLS TO VARIOUS PARTIES INCLUDING THE ASSESSEE COMPANY. HE FURTHER STATED THAT THE ACCOUNT PAYEE CHEQUES RECEI VED AGAINST THE ACCOMMODATING BILLS HAVE BEEN DEPOSITED IN HIS BANK ACCOUNTS AND IN TURN HE HAD ISSUED BEAR ER CHEQUES TO THE PARTY WHO TOOK ACCOMMODATING BILLS AFTER DEDUCTING HIS COMMISSION OF A VERY SMALL AMOU NT. THE ENTIRE MODUS-OPERANDI AS DISCUSSED BY SHRI PRAJAPATI HAS BEEN PROVED CORRECT IN LATER ENQUIRIE S CARRIED OUT BY HIS OFFICE. THE CASH HAS BEEN FOUND TO BE WITHDRAWN FROM THE BANK ACCOUNTS OF THE TWO FIRM S. THIS WAS NOT MERELY A PLAIN STATEMENT OF SHRI PRAJA PATI BUT IT WAS CORRECT STATE OF AFFAIRS BECAUSE SHRI PR AJAPATI ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 9 DID NOT HAVE ADEQUATE FACILITY OF GODOWN AND ALSO D ID NOT HAVE GENUINE PURCHASES TO SUPPORT HIS SALES. UNDER THESE CIRCUMSTANCES THE PURCHASES SHOWN BY THE ASSESSEE COULD NOT HAVE BEEN MADE FROM THE TWO FIRMS OF SHRI PRAJAPATI EVEN THOUGH THE IDENTITY, P AN AND CONFIRMATIONS ARE AVAILABLE ON RECORDS BECAUSE THESE FACTS DO NOT PROVE THE GENUINENESS OF TRANSACTION MORE SO BECAUSE THE SELLER HIMSELF CLAR IFIED HIS STAND. II) THE ARGUMENT THAT THE PURCHASES HAVE BEEN MADE THROUGH ONE BROKER SHRI PAVAN BOKADIA IS NOT RELEV ANT BECAUSE IT IS INTERNAL AFFAIR OF THE ASSESSEE AND A LSO BECAUSE THE ASSESSEE COMPANY HAS NOT PRODUCED SHRI PAVAN BOKADIA WITH RELEVANT DETAILS TILL DATE. THIS ARGUMENT IS NOTHING BUT TO DILUTE THE ISSUE AND SHI FT THE RESPONSIBILITY TOWARDS OTHERS AND HENCE THIS ARGUME NT IS NOT ACCEPTABLE. III) AS REGARDS THE ARGUMENT OF NOT PROVIDING COPY OF STATEMENT OF SHRI PRAJAPATI, THE A. O. STATED THAT THE ENTIRE PROCEEDINGS ARE KNOWN THE ASSESSEE SINCE THE ASSESSMENT PROCEEDINGS WERE INITIATED DUE TO THE EXAMINATION OF SHRI PRAJAPATI BY THE INVESTIGATION WING AND THE DIRECTOR OF THE ASSESSEE COMPANY WAS HIMSEL F EXAMINED BY THE INVESTIGATING WING ON THIS ISSUE. T HE A. O. STATED THAT A COPY OF THE STATEMENT OF SHRI PRAJAPATI WAS SHOWN TO SHRI ATULBHAI MEHTA, ONE OF THE DIRECTORS OF THE COMPANY, WHILE ASKING THE QUESTION NO.6 OF HIS STATEMENT RECORDED ON 3-11-2006. ACCORDING TO THE A. O. THE ADIT INVESTIGATION OF SU RAT ASKED HOW THE ASSESSEE COMPANY HAD MADE THE PURCHASES FROM BHAGYODAYA ENTERPRISES AND BHAVNA TRADING COMPANY WHEN THE PROPRIETOR OF THESE FIRMS HAS DENIED THE SAID TRANSACTION AND HAS CLARIFIED T HAT HE HAS NOT ACTUALLY SOLD THE GOODS BUT SIMPLY ISSUE D SALES BILLS. AT THIS TIME THE STATEMENT OF SHRI PRA JAPATI WAS SHOWN TO THE DIRECTOR OF THE COMPANY AND THEREFORE AT THIS STAGE THE ASSESSEE CAN NOT ARGUE THAT THE STATEMENT OF SHRI PRAJAPATI HAS NOT BEEN PROVID ED. IN VIEW OF THIS REASON THE A. O. REJECTED THIS ARGU MENT ALSO. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 10 IV) AS REGARDS THE ARGUMENT THAT THE REPLY U/S 133 (6) HAS BEEN RECEIVED BY THE DEPARTMENT, THE A. O. STATED T HAT THIS SHOWS THAT THE ASSESSEE COMPANY IS STILL IN TO UCH WITH SHRI PRAJAPATI. ACCORDING TO THE A. O. WHEN TH E ASSESSEE COMPANY IS ABLE TO MAKE EFFORT TO MANAGE THE REPLY OF THE NOTICE U/S 133 (6), THE ASSESSEE S HOULD HAVE BEEN ABLE TO PRODUCE SHRI PRAJAPATI PERSONALLY FOR FURTHER VERIFICATION AND TO FIND OUT THE TRUTH. THE A. O. HAS STATED THAT HE HAD REPEATEDLY REQUESTED THE ASSESSEE TO PRODUCE SHRI PRAJAPATI FOR VERIFICATION SPECIALLY BECAUSE A CONFIRMATION/REPLY WAS RECEIVED FROM THE SIDE OF SHRI PRAJAPATI WHICH GOES AGAINST THE STATEMENT GIVEN BY HIM BEFORE THE INVESTIGATION WIN G BARODA. ACCORDING TO THE A. O. THE NOTICE U/S 133(6 ) WAS NOT INITIALLY COMPLIED BY SHRI PRAJAPATI BUT TH E ASSESSEE COMPANY ITSELF FILED CONFIRMATION AT HIS O WN AND THEREFORE, THE A. O. AGAIN ISSUED NOTICE U/S 13 3(6) TO CONFIRM THE GENUINENESS OF THE CONFIRMATION LETT ER. THE A. O. HAS STATED IN PARA 15 THAT HIS OFFICE REC EIVED REPLY FROM SHRI PRAJAPATI SIDE AND IN VIEW OF THIS CONTRADICTION ANOTHER LETTER WAS ISSUED TO SHRI PRA JAPATI TO CLARIFY WHETHER THE STATEMENT GIVEN BY HIM BEFOR E THE INVESTIGATION WING BARODA WAS CORRECT OR THE LE TTER RECEIVED ON BEHALF OF HIM IN RESPONSE TO NOTICE U/S 133 (6) IS CORRECT. ACCORDING TO THE A. O. THERE WAS NO RESPONSE TO THIS LETTER. THE A. O. STATED UNDER THE SE CIRCUMSTANCES, IT WAS FOR THE ASSESSEE TO RESOLVE T HE CONTRADICTION AND THIS COULD HAVE BEEN DONE BY PRODUCING SHRI PRAJAPATI PERSONALLY FOR THE VERIFIC ATION PURPOSES SPECIALLY BECAUSE THE ASSESSEE WAS IN TOUC H WITH SHRI PRAJAPATI. IN VIEW OF THIS REASON THE A. O. REJECTED THIS ARGUMENT ALSO. V) AS REGARDS THE RELIANCE THE DECISION OF PUNJAB A ND HARYANA HIGH COURT IN THECAE OF LEADERS VALVES (SUPRA), THE A. O. SATED THAT THE FACTS OF THIS CAS E ARE DIFFERENT FROM THE FACTS OF THE ASSESSEES CASE. 4.1 IN VIEW OF THE ABOVE REASONS THE A. O. REJECTED ALL THE ARGUMENTS OF THE ASSESSEE COMPANY AND STATED THAT T HE ASSESSEE COMPANY HAS MERELY OBTAINED BILLS FROM SHRI PRAJAPA TI AND ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 11 SQUARED THE TRANSACTION BY ISSUING THE ACCOUNT PAYE E CHEQUES AND BY WITHDRAWING THE CASH THROUGH THE BEARER CHEQUES AS EXPLAINED BY SHRI PRJAPATI. THE A. O. THEREFORE STATED THAT S INCE THE SALES HAVE BEEN MADE, THE ASSESSEE COMPANY MUST HAVE PURC HASED MATERIALS SO THAT CORRESPONDING SALES COULD BE MATE RIALIZED. THE A. O. THEREFORE, HELD THAT THE ASSESSEE COMPANY PUR CHASED REQUIRED MATERIALS OUT OF ITS UNDISCLOSED SOURCES O F INCOME. THE PURCHASES CLAIMED IN THE NAME OF M/S. BHAGYODAYA EN TERPRISES AND THE M/S. BHAVNA TRADING COMPANY ARE FOUND NON G ENUINE AS CLAIMED ON PARTICULAR DATE. THE A. O. STATED THAT A S FAR AS PAYMENTS ARE CONCERNED IT HAS NO WEIGHTAGE AS THEY WIRE MADE FOR SQUARING OFF THE NON GENUINE PURCHASE. THE A. O . FURTHER STATED THAT THERE IS NO POSSIBILITY OF ROTATION OF UNACCOU NTED FUNDS BECAUSE THE ASSESSEE COMPANY HAD CLAIMED PURCHASE F ROM BHAGYODAYA ENTERPRISES FROM 10-06-2004 TO 09-08-200 4 AGGREGATING TO R.56,22,347/- AND FROM BHAVNA TRADIN G FROM 02-06-2004 TO 25-07-2004 OF RS.19,91,720/- BUT THE PAYMENTS TO BHAVNA TRADING STARTED FROM 21-09-2004. ACCORDING T O THE A. O. THIS MEANS THE POSSIBILITY OF ROTATION OF UNACCOUNT ED FUND IS NOT AVAILABLE TO THE ASSESSEE AND HENCE THERE IS NO BEN EFIT ON ACCOUNT OF ARRIVING AT PEAK OF UNACCOUNTED FUND. IN VIEW OF THIS THE A. O. CONCLUDED THAT THE ENTIRE PURCHASED HAVE BEEN MADE FROM UNDISCLOSED SOURCE OF INCOME AND THEREFORE, ACCORDI NG TO HIM THESE EXPENSES CAN BE CONSIDERED AS UNEXPLAINED EXP ENSES U/S 69C OF THE IT ACT. THE A. O., THEREFORE, ADDED THE ENTIRE PURCHASES OF RS.76,14,067/- AS UNEXPLAINED PURCHASED EXPENSES U/S 69 C OF THE IT ACT. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 12 5. BEFORE THE LEARNED CIT (A) THE ASSESSEE REITERAT ED THE ABOVE SUBMISSIONS. THE ASSESSEE HOWEVER STATED THAT THE C OPY OF THE STATEMENT OF SHRI PRAJAPATI WAS NOT PROVIDED AND AL SO CROSS EXAMINATION OPPORTUNITY WAS NOT PROVIDED. THEREFORE , THE CASE WAS SENT FOR REMAND REPORT TO THE A O DIRECTING HIM TO PROVIDE TO THE ASSESSEE A COPY OF THE STATEMENT WHICH WAS RELI ED UPON BY HIM AND ALSO TO GIVE OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SHRI PRAJAPATI, PROPRIETOR OF BHAGYODAYA ENTERPRISE S AND BHAVNA TRADING COMPANY. COPIES OF THE SUBMISSIONS OF THE A SSESSEE WERE ALSO SENT TO THE A O FOR SUBMITTING HIS REMAND REPORT AND THAT THE REMAND REPORT OF THE A. O. WAS FORWARDED BY THE ADDL. CIT, RANGE-1. IN THE REMAND REPORT THE A. O. STATED AS U NDER: - AS DIRECTED, THIS OFFICE HAS PROVIDED COPY OF STAT EMENT OF SHRI AMRATBHAI POONAMBHAI PRAJAPATI RECORDED BEF ORE DDIT (INV)-1, BARODA AS WELL AS ADIT (INV)-3, SURAT TO THE ASSESSEE COMPANY ON 21.03.2008. FURTHER, EFFORTS HA VE BEEN MADE TO PROVIDE CROSS EXAMINATION OF SHRI AMRA TBHAI POONAMBHAI PRAJAPATI TO THE ASSESSEE. SHRI PRAJAPAT I WAS PROVIDED TWO OPPORTUNITIES TO REMAIN PRESENT IN THI S OFFICE ON 31.03.2008 AT 5.00 PM AND ON 07.04.2008 AT 5.00 PM RESPECTIVELY. HOWEVER, NO RESPONSE EITHER IN ANY MA NNER WAS RECEIVED BY THIS OFFICE. THEREFORE, CROSS EXAMI NATION COULD NOT BE PROVIDED TILL DATE. HERE IT IS HUMBLY SUBMITTED THAT WHENEVER THIS OFFICE ISSUED LETTERS TO SHRI AM RATBHAI POONAMBHAI PRAJAPATI EITHER U/S 133(6)/131(1), NO R ESPONSE WERE RECEIVED DURING THE COURSE OF ASSESSMENT PROCE EDINGS EXCEPT REPLY DATED 24.09.2007 IN RESPONSE TO ONE LE TTER ISSUED U/S 133 (6) DATED 24.08.2007, THE SAID REPLY WAS CONSIDERED NON-GENUINE AND ANOTHER LETTER U/S 133(6 ) WAS ISSUED TO SHRI PRAJAPATI FOR VERIFICATION OF CORREC TNESS OF REPLY DATED 24.09.2007, NO RESPONSE WAS RECEIVED. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 13 5.1 IT WAS FURTHER SUBMITTED THAT IN THIS REPORT, T HE A. O. FURTHER STATED THAT THE STATEMENT OF SHRI PRAJAPATI WAS NOT THE SOLE BASIS OF ASSESSMENT. HE STATED THAT:- THE OFFICE HAS MADE INQUIRIES FROM PRAJAPATIS BAN K AND FOUND THAT CASH WAS WITHDRAWN JUST AFTER THE CR EDIT RECEIVED THROUGH ASSESSEES AS WELL AS OTHER CUSTOM ERS CHEQUES. SINCE IT WAS ALREADY CLEAR THAT SHRI PRAJA PATI ISSUED ACCOMMODATING ENTRIES, THE CASH WAS WITHDRAWN TO RE MIT BACK FOR SETTLING THE ENTRIES. IN ADDITION TO THE ABOVE, THE ASSESSEE HAS FAILED T O PROVE THE GENUINENESS OF TRANSACTIONS CLAIM WITH SH RI PRAJAPATI BY PUTTING SURROUNDING EVIDENCES SUCH AS LOADING UNLOADING CHARGES, TRANSPORTATION CHARGES, WEIGHING SLIPS, OCTROI, DELIVERY CHALLANS, GATE PASSES, GOODS ARRIV AL AND DISPATCH REPORTS ETC. THE A. O. STATED THAT IN VIEW OF THESE REASONS THE ADDITION U/S 69 C WAS MADE AND IT WAS H ELD THAT THE ASSESSEE COMPANY MUST HAVE ARRANGED GOODS OUT O F ITS UNDISCLOSED SOURCE OF INCOME. 5.2 IT WAS FURTHER SUBMITTED THAT COPY OF THIS REPO RT WAS GIVEN TO THE ASSESSEE FOR COMMENTS AND THE ASSESSEE HAS SUBM ITTED ITS COMMENTS ON 29-05-2008. APART FROM THESE COMMENTS T HE ASSESSEE HAS GIVEN ITS SUBMISSION ON 17-03-2008 AND 18-03-2008. THE GIST OF THE SUBMISSIONS MADE BY TH E ASSESSEE IS ALMOST SAME AS IT WAS GIVEN TO THE A. O. AND WHICH HAVE BEEN DISCUSSED IN PARA 2.4.1. TO 2.4.2 OF THE IMPUGNED O RDER. THE FRESH ARGUMENTS TAKEN BY THE ASSESSEE BEFORE THE LEARNED CIT (A) DURING THE APPELLATE STAGE ARE THAT EVEN AFTER THE REMAND REPORT, THE A. O. HAS FAILED TO GIVE TO THE ASSESSEE OPPORT UNITY OF CROSS EXAMINING SHRI PRAJAPATI AND THEREFORE, AS PER THE SETTLED POSITION OF LAW THE STATEMENT GIVEN BY SHRI PRAJAPATI CANNOT BE CONSIDERED AS AN EVIDENCE AGAINST THE ASSESSEE. IN SUPPORT OF THE AFORESAID CONTENTION, THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS: ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 14 I) CIT VS SMC SHARE BROKERS LTD. 288 ITR 345 II) CIT VS ARJUNDAS SURINDER KUMAR & CO. 239 ITR 859 III) JVT (INDIA) EXPORTS 262 ITR 269 IV) RAJESH MEHTA VS ITO 100 TTJ (ASR) 453 V) ITO VS BAJRANG OIL INDUSTRIES 12 ITD (NAG) 631 IN VIEW OF THESE REASONS, THE ASSESSEE HAS STATED T HAT THE STATEMENT OF SHRI PRAJAPATI CANNOT BE TREATED AS AN EVIDENCE, BECAUSE IT WAS ALREADY NEGATED WHEN IN RESPONSE TO NOTICE U/S 133(6) ISSUED BY THE A. O., SHRI PRAJAPATI HAD SENT THE CONFIRMATION OF ACCOUNTS AND THAT THE ASSESSEE HAS NOT BEEN GIVEN CROSS EXAMINATION OF SHRI PRAJAPATI. IT WAS FURTHER SUBMITTED THAT THE A.O. HAS BROUGHT NO MATERIAL ON RECORD TO PROVE THE ALLEGATION MADE AGAINST HIM THAT THE CASH WITHDRAWN FROM THE B ANK ACCOUNT OF THE TWO FIRMS OF SHRI PRAJAPATI WAS RETURNED BAC K TO THE ASSESSEE COMPANY AND THAT EVEN IN THE REMAND REPORT THE A. O. HAS STATED IN PARA 4 OF THE REPORT THAT THE ASSESSE E COMPANY MUST HAVE ARRANGED GOODS OUT OF ITS UNDISCLOSED SOURCE O F INCOME. THIS CLEARLY SHOWS THAT THE A. O. DOES NOT HAVE ANY PROO F AND HE HAS ONLY COME TO THIS CONCLUSION BASED ON CONJECTURE AN D SURMISES. THE ASSESSEE MAINTAINED COMPLETE DAY TO DAY QUANTIT ATIVE RECORD OF PARTY WISE PURCHASE AND SALES BOTH IN TERMS OF Q UANTITY AND AMOUNT. THE PURCHASES MADE FROM THESE TWO FIRMS HAV E BEEN INCLUDED IN THE RECORD AND COMPLETE TALLY OF SOCK H AS BEEN PROVIDED TO THE A. O. IT WAS BECAUSE OF THAT REASO N THAT THE A. O. HAS BEEN FORCED TO STATE THAT SINCE SALES HAVE BEEN MADE BY THE ASSESSEE, THE CORRESPONDING PURCHASES MUST HAVE BEE N MADE. THE A. O. HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT PURCHASES WERE INDEED MADE OUT OF THE BOOKS FROM SO ME OTHER ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 15 PARTY AND THAT CASH WAS INDEED RETURNED BY THE FIRM S OF SHRI PRAJAPATI. IN VIEW OF THESE REASONS THE ASSESSEE HA S STATED THAT THE ALLEGATION OF THE A. O. THAT THE PURCHASES MUST HAVE BEEN MADE FROM SOME OTHER PARTIES AND CASH PAYMENT MUST HAVE BEEN MADE OUT OF UNEXPLAINED SOURCES WAS WITHOUT ANY BAS IS AND CONTRARY TO THE ACTUAL FACTS ON RECORD. THE ASSESS EE HAS FURTHER STATED THAT THE GOODS WERE NOT CHARGEABLE TO CENTRA L EXCISE AND HENCE THERE WAS NOT QUESTION OF GATE PASS. OCTROI W AS NOT APPLICABLE TO THE ASSESSEE AS THE GODOWN OF THE ASS ESSEE WAS OUTSIDE THE OCTROI CHECK POST. THE BURDEN OF DELIVE RY AS PER THE BUSINESS PRINCIPLE WAS THAT THE PRICE WAS INCLUSIVE OF TRANSPORTATION CHARGES AND IT ALSO INCLUDED LOADING AND UNLOADING CHARGES. THEREFORE, PROOF OF TRANSPORTATION WAS KEP T BY THE SUPPLIERS. IT WAS ALSO STATED THAT THE GOODS RECEIV E IN THE GODOWN OF THE ASSESSEE HAD BEEN PROPERLY RECORDED IN THE B OOKS OF ACCOUNTS WHICH WAS CLEARLY REFLECTED IN THE DAY TO DAY STOCK TALLY AND THAT SINCE THE GOODS WERE NOT SUBJECT TO EXCISE DUTY AND BECAUSE THE TRANSPORTATION BETWEEN DEALER TO DEALER , THERE WAS NO INCIDENCE OF SALES TAX AND OCTROI DUTY, THEREFORE T HERE WAS NO BENEFIT TO THE ASSESSEE BY TAKING BILL FROM ONE PAR TY AND GOODS FROM ANOTHER PARTY. THE GROSS PROFIT RATE DURING TH E CURRENT YEAR WAS ALSO 2.05% ON TURNOVER OF RS.23.16 CORES SHOWIN G A GROSS PROFIT OF R.47.49 LACS AS COMPARED TO THE GROSS PRO FIT RATE OF 2.54% ON TURNOVER OF RS.15.69 CORES SHOWING GROSS PROFIT OF RS.39.88 LACS. THIS SHOWS THAT IN ABSOLUTE TERMS THE GROSS P ROFIT SHOWN DURING THE YEAR WAS MUCH HIGHER. THE MARGINAL DECRE ASE IN GROSS PROFIT RATE WAS DUE TO INCREASE IN TURNOVER BY ALMO ST 50% OVER THE LAST YEAR. THIS SHOWS THAT THE BOOKS OF ACCOUNTS WE RE CORRECT AND THERE WAS NO REASON FOR THE ASSESSEE TO TAKE ACCOMM ODATION BILLS. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 16 THE ASSESSEE HAS FURTHER STATED THAT THE A O HAS DR AWN A PRESUMPTION THAT THE AMOUNT HAS COME BACK IN THE HA NDS OF THE ASSESSEE WITHOUT THERE BEING ANY EVIDENCE AND MEREL Y ON THE BASIS OF CASH WITHDRAWN Y SHRI PRAJAPATI FROM THE A CCOUNTS OF HIS FIRMS AND THAT ON MERE PRESUMPTION THE ADDITION COU LD NOT BE SUSTAINED IN VIEW OF THE DECISION OF THE HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF ADINATH INDUSTRIES 252 ITR 476 WHERE IN THE HON'BLE HIGH COURT HAS OBSERVED THAT IT IS VERY MUCH SURPRISING THAT IN THE INSTANT CASE THE ASSESSING OFFICER HAS DRAWN A PRES UMPTION THAT THE AMOUNT HAS COME BACK IN THE ASSESSEES HANDS, W ITHOUT ANY EVIDENCE WHATSOEVER MERELY ON THE BASIS OF WITHDRAW AL OF AMOUNTS FROM THE ACCOUNT OF GEETA INDUSTRIES AND THAT THE FACTS OF THE ASSESSEE ARE EXACTLY THE SAME. THE A O HAS O BTAINED COPIES OF CHEQUES FROM THE BANKS AS STATED BY HIM A T PAGE 6 AND 7 IN PARA 8 AND 9 OF THE ASSESSMENT ORDER. THE A O HAS STATED ALL THE 7 CHEQUES WERE BEARER BUT STILL HE WAS SILENT A S TO WHO HAS WITHDRAWN THE CASH AS EVIDENCED FROM THE BACK SIDE OF THESE CHEQUES AND STILL HE HAS MADE ALLEGATION WITHOUT EV EN BRINGING THIS MATERIAL ON RECORD THAT THE CASH HAS FLOWN BACK TO THE ASSESSEE. IN VIEW OF THESE REASONS, THE ASSESSEE STATED THAT THE ADDITION COULD NOT BE SUSTAINED IN VIEW OF THE DECISION OF THE HON 'BLE GUJARAT HIGH COURT IN THE CASE OF ADINATH INDUSTRIES (SUPRA ). 6. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE MATERIALS AVAILABLE ON RECORD THE LEARNED CIT (A) D ELETED THE ENTIRE ADDITIONS. HIS FINDINGS IN THE IMPUGNED ORDER IN PA RA 4.1 TO 4.5 ARE REPRODUCED AS UNDER: 4.1 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND OBSERVATIONS OF THE A. O. THE MAIN RE ASON AND ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 17 ARGUMENT OF THE A. O. FOR MAKING THE ADDITION OF RS.76,14,067/- AS UNEXPLAINED PURCHASES EXPENSES U/ S 69 C IS THAT THE PURCHASES MADE FROM BOTH THE CONCERNS A RE RUN BY THE SAME PERSON SHRI PRAJAPATI WHO, DURING HIS C ROSS EXAMINATION, IN CONNECTION WITH TRANSACTIONS COVERE D BY BCTT, BY THE INVESTIGATION WING OF BARODA, CLARIFIE D HIS MODUS-OPERANDI AND ADMITTED THAT HE HAD ISSUED ACCOMMODATING BILLS TO VARIOUS PARTIES INCLUDING TH E ASSESSEE COMPANY. HE FURTHER STATED THAT THE ACCOUN T PAYEE CHEQUES RECEIVED AGAINST THE ACCOMMODATING BILLS HA VE BEEN DEPOSITED IN HIS BANK ACCOUNTS AND IN TURN HE HAD ISSUED BEARER CHEQUES TO THE PARTY WHO TOOK ACCOMMO DATING BILLS AFTER DEDUCTING HIS COMMISSION OF A VERY SMAL L AMOUNT. THE ENTIRE MODUS-OPERANDI AS DISCUSSED BY SHRI PRAJ APATI HAS BEEN PROVED CORRECT IN LATER ENQUIRIES CARRIED OUT BY HIS OFFICE. THE CASH HAS BEEN FOUND TO BE WITHDRAWN FRO M THE BANK ACCOUNTS OF THE TWO FIRMS. THIS WAS NOT MERELY A PLAIN STATEMENT OF SHRI PRAJAPATI BUT IT WAS CORRECT STAT E OF AFFAIRS BECAUSE SHRI PRAJAPATI DID NOT HAVE ADEQUATE FACILI TY OF GODOWN AND ALSO DID NOT HAVE GENUINE PURCHASES TO S UPPORT HIS SALES. UNDER THESE CIRCUMSTANCES THE PURCHASES SHOWN BY THE ASSESSEE COULD NOT HAVE BEEN MADE FROM THE T WO FIRMS OF SHRI PRAJAPATI EVEN THOUGH THE IDENTITY, P AN AND CONFIRMATIONS ARE AVAILABLE ON RECORDS BECAUSE THES E FACTS DO NOT PROVE THE GENUINENESS OF TRANSACTION MORE SO BECAUSE THE SELLER HIMSELF HAS CLARIFIED HIS STAND. ACCORDING TO THE A. O. WHEN THE ASSESSEE COMPANY IS ABLE TO M AKE EFFORT TO MANAGE THE REPLY OF THE NOTICE U/S 133(6) , THE ASSESSEE SHOULD HAVE BEEN ALE TO PRODUCE SHRI PRAJA PATI FOR FURTHER VERIFICATION AND TO FIND OUT THE TRUTH. THE A. O. HAS STATED THAT HE HAD REPEATEDLY REQUESTED THE ASSESSE E TO PRODUCE SHRI PRAJAPATI FOR VERIFICATION SPECIALLY B ECAUSE A CONFIRMATION/REPLY WAS RECEIVED FROM THE SIDE OF SH RI PRAJAPATI WHICH GOES AGAINST THE STATEMENT GIVEN BY HIM BEFORE THE INVESTIGATION WING, BARODA. ACCORDING TO THE A. O. THE NOTICE U/S 133(6) WAS NOT INITIALLY COMPLIED BY SHRI PRAJAPATI BUT THE ASSESSEE COMPANY ITSELF FILED CON FIRMATION AT HIS OWN AND THEREFORE, THE A. O. AGAIN ISSUED NO TICE U/S 133(6) TO CONFIRM THE GENUINENESS OF THE CONFIRMATI ON LETTER. THE A. O. HAS STATED IN PARA 15 THAT HIS OFFICE REC EIVED REPLY FROM SHRI PRAJAPATI SIDE AND IN VIEW OF THIS CONTRA DICTION ANOTHER LETTER WAS ISSUED TO SHRI PRAJAPATI TO CLAR IFY WHETHER THE STATEMENT GIVEN BY HIM BEFORE THE INVESTIGATION WING, ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 18 BARODA WAS CORRECT OR THE LETTER RECEIVED ON BEHALF OF HIM IN RESPONSE TO NOTICE U/S 133(6) IS CORRECT. ACCORDING TO THE A. O. THERE WAS NO RESPONSE TO THIS LETTER. THE A. O. STATED UNDER THESE CIRCUMSTANCES, IT WAS FOR THE ASSESSEE TO RESOLVE THE CONTRADICTION AND THIS COULD HAVE BEEN DONE BY PRODUCING SHRI PRAJAPATI PERSONALLY FOR THE VERIFIC ATION PURPOSE SPECIALLY BECAUSE THE ASSESSEE WAS IN TOUCH WITH SHRI PRAJAPATI. IN VIEW OF THIS REASON THE A. O. RE JECTED THIS ARGUMENT ALSO. 4.2 I DO NOT AGREE WITH THE A. O. THE FACTS AND LEG AL POSITION DOES NOT SUPPORT THE CONTENTION OF THE A. O. THE STATEMENT OF SHRI PRAJAPATI CANNOT BE TREATED AS AN EVIDENCE BECAUSE IT HAS ALREADY BEEN NEGATED WHEN IN RESPONS E TO NOTICE U/S 133 (6) ISSUED BY THE A. O., SHRI PRAJAP ATI HAD SENT THE CONFIRMATION OF ACCOUNTS. IT IS PERTINENT TO NOTE THAT THE VERIFICATION CARRIED OUT BY THE A O BY WAY OF C ALLING FOR INFORMATION U/S 133 (6) FROM SHRI PRAJAPATI (AS ADM ITTED BY THE A. O. IN THE ASSESSMENT ORDER ON PAGE 16 IN PAR A 15) HAS ALSO YIELDED THE SAME RESULTS AND REINFORCED TH E BONAFIDE AND GENUINENESS OF THE TRANSACTIONS UNDER EXAMINATION. THE ADMITTED AND UNDISPUTED FACT OF TH E PAYMENTS BEING MADE AND THE SAME BEING CREDITED IN THE SELLERS (BOTH THE PARTIES) BANK ACCOUNTS ALSO ESTAB LISHED THE GENUINENESS OF TRANSACTIONS. FURTHER, THE APPELLANT HAS NOT BEEN GIVEN CROSS EXAMINATION OF SHRI PRAJAPATI. EVE N AFTER THE REMAND REPORT, THE A. O. HAS FAILED TO GIVE TO THE APPELLANT OPPORTUNITY OF CROSS EXAMINING SHRI PRAJ APATI AND THEREFORE AS PER THE SETTLED POSITION OF LAW THE ST ATEMENT GIVEN BY SHRI PRAJAPATI CAN NOT BE CONSIDERED AS AN EVIDENCE AGAINST THE APPELLANT IN VIEW OF THE FOLLO WING DECISIONS: A) CIT VS SMC SHARE BROKERS LIMITED (288 ITR 345) WHEREIN THE HON'BLE DELHI HIGH COURT STATED THERE IS NO DOUBT THAT THE STATEMENT OF MANOJ AGRAW AL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSEE WITHOUT IT B EING TESTED UNDER CROSS-EXAMINATION. IN THE ABSENCE OF T HE STATEMENT BEING TESTED, IT CANNOT BE SAID THAT IT S HOULD BE BELIEVED COMPLETELY TO THE PREJUDICE OF THE ASSESSEE. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 19 B) CIT VS ARJUNDAS SURINDER KUMAR & CO. (239 ITR 859) WHEREIN THE PUNJAB & HARYANA HIGH COURT HAS STATED DISMISSING THE APPLICATION FOR REFERENCE, THAT THE STATEMENTS RECORDED IN THE SUMMARY PROCEEDINGS DURING SEARCH COULD NOT BE USED WITHOUT CONFRONTING THE ASSESSEE-FIRM WITH THOSE STATEMENTS. THE TRIBUN AL WAS JUSTIFIED IN SETTING ASIDE THE CANCELLATION OF REGISTRATION OF THE FIRM BASED ON SUCH STATEMENTS. NO QUESTION OF LAW AROSE FROM ITS ORDER. C) J. T. (INDIA) EXPORTS (262 ITR 269) WHEREIN THE HON'BLE DELHI HIGH COURT STATED THAT THE PRINCIPLES OF NATURAL JUSTICE ARE NOT CODIFIED CANONS. BUT THEY A RE PRINCIPLES INGRAINED INTO THE CONSCIENCE OF MAN. NATURAL JUSTICE IS THE ADMINISTRATION OF JUSTICE IN A COMMONSENSE LIBERAL WAY. JUSTICE IS BASED SUBSTANTIALLY ON NATURAL IDEALS AND HUMAN VALUES. T HE ADMINISTRATION OF JUSTICE IS TO BE FREED FROM THE N ARROW AND RESTRICTED CONSIDERATION WHICH ARE USUALLY ASSOCIATED WITH A FORMULATED LAW INVOLVING LINGUIST IC TECHNICALITIES AND GRAMMATICAL NINETIES. IT IS THE SUBSTANCE OF JUSTICE WHICH HAS TO DETERMINE ITS FOR M. EVEN IF GRANT OF AN OPPORTUNITY IS NOT SPECIFICALLY PROVIDED FOR IT HAS TO BE READ INTO UNOCCUPIED INTERSTICES AND UNLESS SPECIFICALLY EXCLUDED THE PRINCIPLES OF NATURAL JUSTICE HAVE TO BE APPLIED. E VEN IF A STATUTE IS SILENT AND THERE ARE NO POSITIVE WORDS IN THE ACT OR TH RULES SPELLING OUT THE NEED TO HEAR THE P ARTY WHOSE RIGHTS AND INTERESTS ARE LIKELY TO BE AFFECTE D, THE REQUIREMENT TO FOLLOW FAIR PROCEDURE BEFORE TAKING A DECISION MUST BE READ INTO THE STATURE, UNLESS THE STATUTE PROVIDES OTHERWISE. D) RAJESH MEHTA VS INCOME TAX OFFICER (2006) 100 TTJ (ASR) 453 WHEREIN THE HON'BLE ITAT AMRITSAR STATED THAT ADDITION CAN NOT BE UPHELD EVEN ON MERITS WHERE STATEMENTS RELIED UPON BY THE A. O. WERE NEVE R CONFRONTED TO THE ASSESSEE NOR HE WAS ALLOWED TO CROSS EXAMINE THE DEPONENTS. E) ITO VS BAJRANG OIL INDUSTRIES (1985) 12 ITD (NAG) 631 WHERE IN THE HONBLE ITAT NAGPUR STATED THAT ADDITIONS WERE MADE REPRESENTING CERTAIN CREDITS ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 20 AND BOGUS PURCHASES DEPENDING UPON THE PURCHASE REGISTER IN WHICH THE RECEIPTS WERE NOTED. HOWEVER, THE SAME WAS NOT AVAILABLE AT THE TIME OF CROSS EXAMINATION OF WITNESS. LOCAL ENQUIRIES WERE MADE A T THE BACK OF THE ASSESSEE. ON THESE FACTS THE ITAT H ELD THE ASSESSMENT AS NULL AND VOID TO THE EXTENT OF TH ESE ADDITIONS. IN VIEW OF THESE REASONS, IT IS CLEAR THAT THE STAT EMENT OF SHRI PRAJAPATI CANNOT BE TREATED AS AN EVIDENCE: * BECAUSE IT WAS ALREADY NEGATED WHEN IN RESPONSE TO NOTICE U/S 133(6) ISSUED BY THE A. O., SHRI PRAJAPA TI HAD SENT THE CONFIRMATION OF ACCOUNTS * BECAUSE THE APPELLANT HAS NOT BEEN GIVEN CROSS EXAMINATION OF SHRI PRAJAPATI. 4.3 IT IS CLEAR FROM THE ABOVE DISCUSSION THAT THE A. O. HAS BROUGHT NO MATERIAL ON RECORD TO PROVE THE ALLEGATI ON MADE HIM THAT THE CASH WITHDRAWN FROM THE BANK ACCOUNT O F THE TWO FIRMS OF SHRI PRAJAPATI WAS RETURNED BACK TO TH E APPELLANT COMPANY. EVEN IN THE REMAND REPORT THE APPELLANT HA S STATED IN PARA 4 OF THE REPORT THE ASSESSEE COMPANY MUST HAVE ARRANGED GOODS OUT OF ITS UNDISCLOSED SOURCE OF INCOME. THIS CLEARLY SHOWS THE A. O. DOES NOT HAVE ANY PROOF AND HE HAS ONLY COME TO THIS CONCLUSION BASED ON CONJECTURE AND SURMISES. THE APPELLANT MAINTAINS A COMPLETE DAY TODAY QUANTITATIVE RECORD OF PARTY WIS E PURCHASE AND SALES BOTH IN TERMS OF QUANTITY AND AM OUNT. THE PURCHASES MADE FROM THESE TWO FIRMS HAVE BEEN INCLUDED IN THIS RECORD AND A COMPLETE TALLY OF STO CK HAS BEEN PROVIDED TO THE A.O. IT IS BECAUSE OF THIS REASON T HAT THE A. O. HAS BEEN FORCED TO SAY THAT SINCE SALES HAVE BEEN MADE BY THE APPELLANT, THE CORRESPONDING PURCHASES MUST HAVE BEEN MADE. THE A. O. HAS BROUGHT NO MATERIAL O N RECORD TO SHOW THAT PURCHASES WERE INDEED MADE OUT OF THE BOOKS FROM SOME OTHER PARTY AND THAT CASH WAS INDEE D RETURNED BY THE FIRMS OF SHRI PRAJAPATI. IN VIEW OF THESE REASONS, THE A.O. HAS DRAWN A PRESUMPTION THAT THE AMOUNT HAS COME BACK IN THE HANDS OF THE ASSESSEE WITHOUT THERE BEING ANY EVIDENCE AND MERELY ON THE BASIS OF CASH WITHDRAWN BY SHRI PRAJAPATI FROM THE ACCOUNTS OF HI S FIRMS. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 21 FURTHER, THE ADDITION ON MERE PRESUMPTION CAN NOT B E SUSTAINED IN VIEW OF THE DECISION OF GUJARAT HIGH C OURT IN THE CASE OF ADINATH INDUSTRIES (SUPRA). THE FACTS OF TH E APPELLANT ARE EXACTLY THE SAME. THE A. O. HAS OBTAINED THE CO PIES OF CHEQUES FROM THE BANKS AS STATED BY HIM ON PAGE 6 & 7 IN PARA 8 & 9 OF THE ASSESSMENT ORDER. IN PARA 9 ON PA GE 7 THE A. O. HAS STATED THE COPY OF ALL 7 CHEQUES WERE SENT BY ABN AMRO BANK VIDE ITS LETTER DATED 11-9-2007. THE A. O. HAS STATED THAT ALL THESE 7 CHEQUES WERE BEAR ER BUT STILL HE IS SILENT AS TO WHO HAS WITHDRAWN THE CASH AS EV IDENCED FROM THE BACK SIDE OF THESE CHEQUES AND STILL HE HA S MADE ALLEGATION WITHOUT EVEN BRINGING THIS MATERIAL ON R ECORD THAT THE CASH HAS FLOWN BACK TO APPELLANT. IN VIEW OF TH E REASONS THE ADDITION CANNOT BE SUSTAINED IN VIEW OF THE DEC ISION OF GUJARAT HIGH COURT IN THE CASE OF ADINATH INDUSTRIE S (SUPRA) ALSO. 4.3.1 IT IS CLEAR THAT THE A. O. FAILED TO GIVE CRO SS EXAMINATION EVEN AFTER HE WAS GIVEN ONE MORE OPPORTUNITY TO DO SO. IN THE REMAND REPORT OF THE A. O. HE SUBMITTED VIDE LE TTER NO.SRT/WD/-1(1)/REM.REPORT/AIPL/2008-09 DATED 11-4-2008, THE A. O. STATED AS UNDER: AS DIRECTED THIS OFFICE HAS PROVIDED COPY OF STATEMENT OF SHRI AMRATBHAI POONAMBHAI PRAJAPATI RECORDED BY DIT(INV)-I, BARODA AS WELL AS ADIT(INV) -3, SURAT TO THE ASSESSEE COMPANY ON 21.03.2008, FURTHE R, EFFORTS HAVE BEEN MADE TO PROVIDE CROSS EXAMINATION OF SHRI AMRATBHAI POONAMBHAI PRAJAPATI TO THE ASSESSEE. SHRI PRAJAPATI WAS PROVIDED TWO OPPORTUNITIES TO REMAIN PRESENT IN THIS OFFICE ON 31.03.2008 AT 5.00 PM AND ON 07-04-2008 AT 5.00 PM RESPECTIVELY, HOWEVER, NO RESPONSE EITHER IN ANY MANNER WAS RECEIVED BY THIS OFFICE. THEREFORE, CROS S EXAMINATION COULD NOT BE PROVIDED TILL DATE. HERE I T IS HUMBLY SUBMITTED THAT WHENEVER THIS OFFICE ISSUED LETTERS TO SHRI AMRATBHAI POONAMBHAI PRAJAPATI EITH ER U/S 133 (6)/131(1), NO RESPONSE WERE RECEIVED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS EXCEPT REPLY DATED 24.09.2007 IN RESPONSE TO ONE LETTER ISSUED U /S 133(6) DATED 24.08.2007, THIS SAID REPLY WAS CONSIDERED NON GENUINE AND ANOTHER LETTER U/S 133(6 ) WAS ISSUED TO SHRI PRAJAPATI FOR VERIFICATION OF ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 22 CORRECTNESS OF REPLY DATED 24.09.2007, NO RESPONSE WAS RECEIVED. 4.3.2 IN THIS REPORT, THE A. O. FURTHER STATED THAT THE STATEMENT OF SHRI PRAJAPATI WAS NOT THE SOLE BASIS OF ASSESSM ENT. HE STATED THAT:- THE OFFICE HAS MADE INQUIRIES FROM PRAJAPATIS BANK AND FOUND THAT CASH WAS WITHDRAWN JUST AFTER T HE CREDIT RECEIVED THROUGH ASSESSEES AS WELL AS OTHER CUSTOMERS CHEQUES. SINCE IT WAS ALREADY CLEAR THAT SHRI PRAJAPATI ISSUED ACCOMMODATING ENTRIES, THE CA SH WAS WITHDRAWN TO REMIT BACK FOR SETTLING THE ENTRIE S. IN ADDITION TO THE ABOVE, THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS CLAIME D WITH SHRI PRAJAPATI BY PUTTING SURROUNDING EVIDENCE S SUCH AS LOADING, UNLOADING CHARGES, TRANSPORTATION CHARGES, WEIGHING SLIPS, OCTROI, DELIVERY CHALLANS, GATE PASSES, GOODS ARRIVAL AND DISPATCH REPORTS ETC. THE A. O. STATED THAT IN VIEW OF THESE REASONS THE ADDI TION U/S 69 C WAS MADE AND IT WAS HELD THAT THE ASSESSEE COMPANY MUST HAVE ARRANGED GOODS OUT OF ITS UNDISCLOSED SOURCE OF INCOME. 4.3.3 FROM THE ABOVE IT IS CLEAR THAT THE A. O. HAS NO MATERIAL BUT HE IS MAKING THE STATEMENT WITHOUT ANY BASIS. N EITHER DURING THE STAGE OF INVESTIGATION, NOR DURING THE A SSESSMENT PROCEEDINGS AND NOR DURING THE REMAND PROCEEDINGS, THE A O HAS BEEN ABLE TO PROVIDE CROSS EXAMINATION OF T HE STATEMENT MADE BY SHRI PRAJAPATI. IN VIEW OF THE AB OVE DISCUSSION AND CASE LAWS, THE STATEMENT MADE BY SHR I PRAJAPATI HAS NO EVIDENTIARY VALUE. IN FACT, THIS S TATEMENT STOOD NEGATED WHEN THE A O WHO SHOULD HAVE MADE FUR THER INQUIRIES IF ANY. INSTEAD OF MAKING ANY INQUIRIES, HE WAS CONSTANTLY ASKING THE ASSESSEE TO PRODUCE SHRI PRAJ APATI WHEN HE HIMSELF COULD NOT ENFORCED STATUTORY PROVIS IONS OF SECTION 2131. HENCE, THE ADDITION MADE ON THE BASIS OF THE STATEMENT CANNOT BE SUSTAINED IN THE EYES OF LAW. 4.4 IT IS FURTHER SEEN THAT IN THIS CASE THESE GOOD S ARE NOT CHARGEABLE TO CENTRAL EXCISE AND HENCE THERE IS NO QUESTION ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 23 OF GATE PASS. OCTROI IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE AS THE GODOWN OF THE ASSESSEE IS OUTSIDE T HE OCTROI CHECK POST. THE BURDEN OF DELIVERY AS PER TH E BUSINESS PRINCIPLE IS THAT THE PRICE IS INCLUSIVE OF TRANSPO RTATION CHARGES AND IT ALSO INCLUDES LOADING AND UNLOADING CHARGES. THEREFORE, THE PROOF OF TRANSPORTATION IS KEPT BY T HE SUPPLIER. AS STATED ABOVE THE GOODS RECEIVED IN OUR GODOWN HA VE BEEN PROPERLY RECORDED IN THE BOOKS OF ACCOUNTS WHI CH IS ALREADY REFLECTED IN THE DAY TO DAY SOCK TALLY. SIN CE THESE GOODS ARE NOT SUBJECT TO EXCISE DUTY AND BECAUSE TH E TRANSACTION BETWEEN DEALER TO DEALER THERE WAS NO I NCIDENCE OF SALES TAX AND AS STATED ABOVE THERE WAS NO INCID ENCE OF OCTROI DUTY, THEREFORE THEE WAS NO BENEFIT TO THE A SSESSEE BY TAKING BILL FROM ONE PARTY AND GOODS FROM ANOTHER P ARTY. THE G. P. RATE ALSO DURING THE CURRENT YEAR IS 2.05% ON A TURNOVER OF RS.23.46 CRORES SHOWING A GROSS PROFIT OF R.47.4 9 LACS AS COMPARED TO THE G. P. RATE OF 2.54% ON A TURNOVER O F RS.15.69 CRORES SHOWING A GROSS PROFIT OF RS.39.88 LACS. THIS SHOWS THAT IN ABSOLUTE TERMS THE GROSS PROFIT SHOWN DURING THE YEAR IS MUCH HIGHER. THE MARGINAL DECREA SE IN G. P. RATE IS DUE TO INCREASE IN TURNOVER BY ALMOST 50% OVER THE LAST YEAR. THEREFORE, THERE SEEN TO BE NO REASO N FOR THE APPELLANT TO TAKE ACCOMMODATION BILLS. GOODS HAVE B EEN PURCHASED FROM BHAGYODAYA ENTERPRISES AND BHAVNA TRADING CO. AT MULTIPLE POINTS OF TIME. THE ASSESSE E HAS ALREADY FILED CONFIRMATIONS OF THE PARTIES ALONG WI TH PAN AND, THEREFORE, IDENTITIES OF THE PARTY HAVE BEEN ESTABL ISHED. COPIES OF THE BANK SHOW THAT THE PAYMENT WAS MADE B Y THE ACCOUNT PAYEE CHEQUES AND THEREFORE, THE GENUINENES S OF TRANSACTIONS HAS ALSO BEEN ESTABLISHED. A CONTRA AC COUNT CONFIRMATIONS RECEIVED FROM THE PARTY HAVE ALSO BEE N FILED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAD GIVEN THE QUANTITATIVE DETAILS FROM TIME TO TIME AN D PERUSAL OF THE SAME CLEARLY ESTABLISHES THAT THE SAID GOODS HA VE BEEN SOLD BY THE ASSESSEE AND TAX ON THE PROFIT ON A SAM E IS ALSO PROMPTLY OFFERED FOR TAX AS PER THE RETURN OF INCOM E UNDER CONSIDERATION. FURTHER, IN VIEW OF THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS LEADERS VALVES (P) LTD. 285 ITR 435, NO ADDITION CA N BE MADE BECAUSE ON IDENTICAL SET OF FACTS THE HON'BLE COURT HELD THAT THERE WAS NO BASIS FOR TREATING THE PUR CHASES MADE BY THE ASSESSEE FROM SEVEN SCRAP DEALERS AS BO GUS AS THE CONSUMPTION STOOD FULLY PROVED AND THE EXIST ENCE OF ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 24 THE SAID PARTY COULD NOT BE DENIED TRIBUNAL HAS C ONCURRED WITH THE CONCLUSION OF THE CIT (A). IN VIEW OF THE FACTS THAT THE TRADING RESULTS OF THE ASSESSEE HAVE BEEN ACCEP TED OR ALONE. IT HAS ALSO ACCEPTED THE CONTENTION OF THE A SSESSEE THAT IF THE A OS CONCLUSION IS ACCEPTED AND PURCHA SES WORTH RS.1.49 CRORES ARE TREATED AS BOGUS IT WOULD BE IMP OSSIBLE TO MANUFACTURE THE GOODS SHOWN TO HAVE BEEN MANUFAC TURED BY IT. IN THE ASSESSEES CASE ALSO THE QUANTITATIV E TALLY SUBMITTED BEFORE THE A O CLEARLY SHOWS THAT THE SAL ES HAVE TAKEN PLACE. THE SALES HAVE BEEN FULLY PROVED BY TH E SUPPORTING DOCUMENTS AND EVIDENCES. THE EXISTENCE O F THE PARTIES ALSO CANNOT BE DENIED IN VIEW OF THE EVIDEN CES SUBMITTED ON RECORD. IN FACT, THE DEPARTMENT ITSELF HAS RECEIVED THE CONFIRMATION OF THE TRANSACTIONS AND T HE RELEVANT LEDGER ACCOUNT OF THE CONCERNED PARTY DURING THE VE RIFICATION U/S 133 (6). IN VIEW OF THE QUANTITATIVE TALLY NO M ANIPULATION IS POSSIBLE AS THE ASSESSEE IS ENGAGED IN TRADING A CTIVITY ONLY AND THE QUANTITATIVE TALLY OF THE STOCK IS FUL LY VERIFIABLE FROM THE BOOKS OF ACCOUNTS SUBMITTED BEFORE THE A O AND THE ADIT(INV.) , SURAT. 4.5 FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE STATEMENT OF SHRI PRAJAPATI HAS NOT ONLY BEEN NEGAT ED BY SHRI PRAJAPATI HIMSELF BUT THE SAME HAS NOT BEEN SU BJECTED TO CROSS EXAMINATION AND THEREFORE THE SAME CANNOT BE CONSIDERED AS OF ANY EVIDENTIARY VALUE. FURTHER, TH E A O HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE CASH WITHDRAWN BY SHRI PRAJAPATI FROM HIS FIRMS PASSED O N TO THE APPELLANT COMPANY. AS PER THE FACTS AND POSITION OF LAW DISCUSSED ABOVE, THE ADDITION MADE BY THE A O CANNO T BE SUSTAINED. HENCE THE ADDITION IS DELETED AND THE GR OUNDS OF APPEAL ARE ALLOWED. IN THE RESULT, THE APPEAL IS ALLOWED. 7. THE REVENUE IS IN APPEAL ON THE ABOVE GROUNDS OF APPEAL CHALLENGING THE DELETION OF THE ADDITION. LEARNED D R RELIED UPON ORDER OF THE A O AND SUBMITTED THAT CREDIT SHOULD B E GIVEN TO THE STATEMENT OF A. P. PRAJAPATI RECORDED BY THE ADIT. THE ASSESSEE SHOULD HAVE PRODUCED THE ABOVE PARTY BEFORE THE A O FOR ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 25 EXAMINATION. THE LEARNED D R SUBMITTED THAT SHRI PR AJAPATI WITHDREW THE CASH FROM HIS ACCOUNT AND DISBURSED TH E SAME WOULD SHOW THAT TRANSACTION OF SALE AND PURCHASE WAS NOT GENUINE. LEARNED D R RELIED UPON FINDINGS OF THE A O RECORDE D BY LEARNED CIT (A) AT PAGE 9 AND 10 OF THE IMPUGNED ORDER. 8. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. HE HAS REFERRED TO LETTER DATED 27-11-2006 WRITTEN BY ADIT (INV.), UNIT III, SURAT TO THE ADDITIONAL COMMISSIONER OF INCOM E TAX, RANGE-I, SURAT IN WHICH IT WAS NOTED THAT VERIFICATION WAS M ADE RELATING TO THE TRANSACTIONS OF BCTT ONLY AND NO INVESTIGATION WAS CARRIED WITH REGARD TO THE ASSESSEE. HE HAS ALSO SUBMITTED THAT IN THE SAID LETTER ALSO IT IS STATED THAT STATEMENT OF SHRI ATU LKUMAR MEHTA, DIRECTOR OF THE ASSESSEE COMPANY WAS RECORDED IN WH ICH HE HAS EXPLAINED THAT THESE PURCHASES WERE MADE THROUGH PR AVINBHAI BOKADIA AND PURCHASE ARE GENUINE. HE HAS SUBMITTED THAT ORIGINAL RETURN OF INCOME WAS FILED ON 30-10-2005 IN WHICH A LL THE PURCHASES WERE DISCLOSED TO THE REVENUE DEPARTMENT AND SOURCE IS ALSO EXPLAINED BUT THE STATEMENT OF SHRI PRAJAPA TI WAS RECORDED LATER ON, ON 08-09-2006. SINCE PURCHASES WERE RECOR DED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE PRIOR TO INVESTIG ATION AND SOURCE IS EXPLAINED THEREFORE, SECTION 69 C OF THE IT ACT WOULD NOT APPLY IN THIS CASE. HE HAS REFERRED TO PARA 7 TO 9 OF THE ASSESSMENT ORDER WHERE THE A O RECORDED THAT ALL PA YMENTS ARE MADE THROUGH CHEQUES. HE HAS SUBMITTED THAT ASSESSE E WAS NOT ALLOWED CROSS EXAMINATION TO THE STATEMENT OF SHRI PRAJAPATI, THEREFORE, SUCH STATEMENT CANNOT BE READ IN EVIDENC E AGAINST THE ASSESSEE. HE RELIED UPON DECISION OF HON'BLE SUPREME COURT IN ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 26 THE CASE OF KISHANDCHAND CHELLARAM 125 ITR 713. SHR I PRAJAPATI FILED CONFIRMATION BEFORE A O AS WELL AS CONFIRMED THE TRANSACTIONS IN HIS REPLY BEFORE A O TO THE NOTICE U/S 133 (6) O F THE IT ACT. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THERE IS NO EVIDENCE ON RECORD THAT THE ASSESSEE OR ANY PERS ON CONNECTED WITH THE ASSESSEE HAVE ENCASHED THE BEARER CHEQUES ISSUED BY SHRI PRAJAPATI. HE HAS RELIED UPON DECISION OF GUJA RAT HIGH COURT IN THE CASE OF CIT VS M. K. BROTHERS 163 ITR 249. H E HAS REFERRED TO PARA 17 OF THE ASSESSMENT ORDER WHERE A O HAS AC CEPTED MATERIALS PURCHASED BY THE ASSESSEE, OTHER WISE IT WOULD HAVE BECOME IMPOSSIBLE FOR THE ASSESSEE TO MAKE THE SALE S. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT PROFIT AND TURNOVER OF THE ASSESSEE ARE BETTER AS COMPARED TO EARLIER YEARS. H E HAS SUBMITTED THAT BOTH THE SELLER PARTIES AS ABOVE ARE ASSESSED TO COMMERCIAL TAX AND THAT THEIR REGISTRATION NUMBERS WERE FILED BEFORE THE AUTHORITIES BELOW (PB 15 AND 16). LEAR NED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE ADD ITIONS HAVE BEEN RIGHTLY DELETED BY THE LEARNED CIT (A). 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIA L AVAILABLE ON RECORD. THE A O DISPUTED THE PURCHASES MADE BY T HE ASSESSEE FROM THE TWO CONCERNS OF SHRI A. P. PRAJAPATI NAMEL Y M/S. BHAGYODAYA ENTERPRISES AND M/S. BHAVNA TRADING CO. THE SELLER SHRI PRAJAPATI FILED THE CONFIRMATIONS OF SELLING T HE GOODS TO THE ASSESSEE. COPY OF THE ACCOUNTS CONFIRMED BY SHRI PR AJAPATI ARE ALSO FILED. COPIES OF THE SAME ARE FILED IN THE PAP ER BOOK. BOTH OF HIS CONCERNS ARE REGISTERED WITH GUJARAT COMMERCIAL TAX DEPARTMENT AND COPIES OF THEIR TIN NUMBER ARE ALSO FILED IN THE PAPER BOOK. THE A O ISSUED NOTICE U/S 133 (6) OF TH E IT ACT IN ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 27 WHICH ALSO SHRI PRAJAPATI IN HIS REPLY TO THE A O C ONFIRMED THE TRANSACTIONS MADE WITH THE ASSESSEE COMPANY. THE AS SESSEE ALSO FILED PAN NUMBER OF SHRI PRAJAPATI. THUS, THE ASSES SEE PROVED THE IDENTITY OF THE SELLER FROM WHOM THE ASSESSEE MADE THE PURCHASES. THE A O HOWEVER, NOTED THAT SINCE THERE WAS A CONTR ADICTION IN THE CONFIRMATION AND REPLY FILED U/S 133 (6) OF THE IT ACT AS COMPARED WITH THE STATEMENT RECORDED BY THE ADIT, THEREFORE, FURTHER LETTER WAS ISSUED U/S 133 (6) OF THE IT ACT. IN SUCH AN EV ENT, IT WAS NECESSARY FOR THE A O TO HAVE RECORDED FURTHER STAT EMENT OF SHRI PRAJAPATI IN ORDER TO FIND OUT THE TRUTH OF THE MAT TER RECORDED IN HIS STATEMENT BY ADIT. THE A O HOWEVER, DID NOT TAKE A NY STEP IN THE MATTER AND DREW THE ADVERSE INFERENCE AGAINST THE A SSESSEE FOR NOT REPLYING THE NOTICE U/S 133 (6) OF THE IT ACT I SSUED ON SECOND OCCASION DESPITE THE FACT THAT EVEN COPY OF STATEME NT OF SHRI PRAJAPATI RECORDED BY ADIT WAS NOT SUPPLIED TO THE ASSESSEE. THE LEARNED CIT (A), THEREFORE, RIGHTLY NOTED THAT A O SHOULD HAVE AFFORDED RIGHT OF CROSS EXAMINATION TO THE ASSESSEE TO VERIFY THE STATEMENT OF SHRI PRAJAPATI AT THE ASSESSMENT STAGE . IN THE ABSENCE OF THE SAME, THE LEARNED CIT (A) AT THE APP ELLATE STAGE DIRECTED THE A O TO SEND THE REMAND REPORT ON THE M ATTER AND DIRECTED THE A O TO PROVIDE COPY OF THE STATEMENT O F SHRI PRAJAPATI RECORDED BY ADIT TO THE ASSESSEE AND SHALL ALSO GIV E AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SHRI P RAJAPATI, PROPRIETOR OF BOTH THE CONCERNS FROM WHOM ASSESSEE PURCHASED THE GOODS. THE A O IN HIS REMAND REPORT ADMITTED BE FORE LEARNED CIT (A) THAT EFFORTS HAVE BEEN MADE TO PROVIDE CROS S EXAMINATION OF SHRI PRAJAPATI TO THE ASSESSEE, BUT SHRI PRAJAPA TI DID NOT ATTEND THE PROCEEDINGS, THEREFORE, CROSS EXAMINATION COULD NOT BE PROVIDED TO THE ASSESSEE. IT WOULD, THEREFORE, PROV E THAT NOT ONLY AT ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 28 THE ASSESSMENT STAGE BUT AT THE APPELLATE STAGE ALS O ASSESSEE WAS DENIED OPPORTUNITY TO CROSS EXAMINE SHRI PRAJAP ATI BY THE A O. SHRI PRAJAPATI WAS EXAMINED BY THE ADIT AND HIS STATEMENT WAS REFERRED TO THE ADIT, RANGE- I, SURAT AND THE A SSESSING OFFICER FOR TAKING ACTION IN THE MATTER. THE CASE O F THE ASSESSEE WAS ALSO REOPENED U/S 147 OF THE IT ACT DUE TO THE ABOVE REASON. SHRI PRAJAPATI IS, THEREFORE, WITNESS OF THE REVENU E DEPARTMENT TO DEPOSE AGAINST THE ASSESSEE, BUT THE A O DID NOT AF FORD ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE HIM IN ORDER TO FIND OUT THE TRUTH IN HIS STATEMENT. SINCE, NO CROSS EXA MINATION TO THE STATEMENT OF SHRI PRAJAPATI IS ALLOWED TO THE ASSES SEE, THEREFORE, HIS STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. WE RELY UPON DECI SION OF HON'BLE SUPREME COURT IN THE CASE OF KISHANCHAND CHE LLARAM 125 ITR 713 IN WHICH IT WAS HELD THAT EVIDENCE COLLECTE D AT THE BACK OF THE ASSESSEE TO BE CONFRONTED TO THE ASSESSEE TO GI VE HIM OPPORTUNITY TO REBUT IT, OTHER WISE, SAME WOULD NOT BE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE. HON'BLE DELHI HIGH CO URT IN THE CASE OF SMC SHARE BROKERS LTD. 288 ITR 345 HELD THA T A O DID NOT ALLOW CROSS EXAMINATION OF THE PERSON SEARCHED. ILL EGAL. CANNOT BE RELIED UPON. PRINCIPLES OF NATURAL JUSTICE NOT FOLL OWED. DEPARTMENTAL APPEAL WAS DISMISSED. MERE REFERENCE T O THE STATEMENT OF SHRI PRAJAPATI IN THE STATEMENT OF THE ASSESSEE WOULD NOT BE ENOUGH TO DENY RIGHT OF CROSS EXAMINATION TO HIS STATEMENT. ON THE OTHER HAND, SHRI PRAJAPATI CONFIRMED TRANSAC TIONS WITH ASSESSEE AND ALSO CONFIRMED THE TRANSACTIONS IN HIS REPLY TO THE QUERY RAISED U/S 133 (6) OF THE IT ACT. IT IS ALSO ADMITTED FACT THAT THE ASSESSEE MADE PAYMENTS OF PURCHASES THROUGH CHE QUES AND THE SAME FACT HAS BEEN RECORDED BY THE A O IN THE A SSESSMENT ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 29 ORDER. NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY TH E A O THAT THE ASSESSEE OR ANY OTHER PERSON CONNECTED WITH THE ASS ESSEE WITHDREW ANY AMOUNT FROM THE BANK OF THE SELLER TO BENEFIT THE ASSESSEE. HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS M. K. BROTHERS (SUPRA) HELD AS UNDER: DURING THE ACCOUNTING YEAR RELATING TO ASSESSMENT YEAR 1971-72, THE ASSESSEE HAD MADE PURCHASES OF TH E TOTAL VALUE OF RS.52,254 FROM CERTAIN PARTIES. THE INCOME TAX OFFICER REQUIRED THE ASSESSEE TO PRODUCE EVIDENCE R EGARDING THE PURCHASES. IN THE MEANTIME, THE SAID PARTIES HA D ADMITTED TO THE SALES TAX AUTHORITIES THAT THEY HAD ISSUED BOGUS VOUCHERS. THE INCOME TAX OFFICER HELD THAT TH E PURCHASES WERE NOT GENUINE AND ASSESSED THE AMOUNT OF RS.52,254 AS INCOME OF THE ASSESSEE FROM UNDISCLOSE D SOURCES. THE TRIBUNAL FOUND THAT THERE WAS NO EVIDE NCE TO SHOW THAT BOGUS VOUCHERS HAD BEEN ISSUED TO THE ASS ESSEE, THAT NOTHING HAD BEEN SHOWN TO INDICATE THAT VERY P ART OF THE FUNDS GIVEN BY THE ASSESSEE TO THESE PARTIES CAME B ACK TO THE ASSESSEE IN ANY FORM, AND THAT THE ASSESSEE HAD MADE ITS PAYMENTS BY CHEQUE. THE TRIBUNAL DELETED THE AD DITION. ON A REFERENCE: HELD, THAT THE CONCLUSION ARRIVED AT BY THE TRIBUNA L WAS SUPPORTED BY THE EVIDENCE ON RECORD. THE AMOUNT OF RS.52,254 WAS NOT ASSESSABLE AS INCOME FROM UNDISCL OSED SOURCES AND THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION. THE A O IN PARA 17 OF THE ASSESSMENT ORDER NOTED TH AT ASSESSEE MUST HAVE PURCHASED MATERIALS SO THAT CORRESPONDING SALES COULD BE MATERIALIZED AND HELD THAT ASSESSEE COMPANY PURC HASED REQUIRED MATERIALS OUT OF ITS UNDISCLOSED SOURCE OF INCOME. IT WOULD, THEREFORE, SHOW THAT PURCHASES CONSUMED BY T HE ASSESSEE HAVE NOT BEEN DISPUTED. NO MANUFACTURING AND FURTHE R SALES BY THE ASSESSEE HAVE BEEN DISPUTED. THUS, THE A O ACCEPTED QUANTITATIVE TALLY OF SALES AND PURCHASES MADE BY T HE ASSESSEE. ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 30 THE A O HOWEVER, FORGOT TO NOTE THAT THE ASSESSEE E XPLAINED THAT PURCHASES WERE MADE ON PAYMENT THROUGH BANKING CHAN NEL. THEREFORE, SOURCE OF THE PURCHASES HAVE BEEN EXPLAI NED WHICH HAVE ALSO NOT BEEN DISPUTED BY THE A O. ACCORDING T O SECTION 69 C OF THE IT ACT WHERE IN ANY FINANCIAL YEAR AN ASSESS EE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF OR THE EXPLANATION IF ANY OFFERED BY HIM IN THE OPINION OF THE A O, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF AS THE CASE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YE AR. IN THIS CASE, THE ASSESSEE EXPLAINED SATISFACTORILY THE SOURCE OF THE PURCHASES WHICH HAD NOT BEEN DOUBTED AND ALL THE PURCHASES AR E RECORDED IN THE BOOKS OF ACCOUNT AND SHOWN TO THE REVENUE DEPAR TMENT PRIOR TO RECORDING OF THE STATEMENT OF SHRI PRAJAPATI, TH EREFORE, BURDEN IS VERY HEAVY UPON A O TO PROVE THAT ASSESSEE MADE BOG US PURCHASES FOR WHICH NO SOURCE IS EXPLAINED. HOWEVER , NO EVIDENCE OR MATERIAL IS BROUGHT ON RECORD TO SUPPORT THE FIN DINGS OF THE A O. IT IS ALSO ADMITTED FACT THAT THE TURN OVER AND PRO FIT SHOWN BY THE ASSESSEE AS COMPARED WITH PRECEDING ASSESSMENT YEAR ARE HIGHER. THEREFORE, THERE IS NO NEED FOR THE ASSESSE E TO INFLATE THE EXPENDITURE. THE ASSESSEE ALSO EXPLAINED THAT PURC HASES ARE MADE THROUGH THE BROKER AND HIS STATEMENT WAS NOT F OUND TO BE FALSE. THE GOODS PURCHASED ARE NOT SUBJECTED TO EXC ISE AND ACCORDING TO THE EXPLANATION OF THE ASSESSEE THE TR ANSPORTATION CHARGES ARE INCLUDED IN THE VALUE OF THE GOODS, THE REFORE, NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESS EE. THE FINDINGS OF THE A O THUS WOULD NOT PROVE ANY CASE A GAINST THE ASSESSEE FOR MAKING THE ADDITION. THE PROVISIONS OF SECTION 69 C OF THE IT ACT WOULD NOT APPLY IN THE CASE OF THE AS SESSEE. THE ITA NO.2709/AHD/2008 ITO, W-1(1), SURAT VS ABHISHEK ISPAT PVT. LTD. 31 ABOVE MATERIALS DISCUSSED BY THE A O IN THE ASSESSM ENT ORDER WERE NOT SUFFICIENT TO SUSTAIN THE ADDITION AGAINST THE ASSESSEE. THERE IS NO OTHER INCRIMINATING MATERIAL OR EVIDENC E FOUND AGAINST THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES NOTED ABOVE, WE DO NOT FIND IT TO BE A FIT CASE TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT (A) TO DELETE THE ENTIRE ADDITION. WE CONFIRM THE FINDINGS OF THE LEARNED CI T (A) AND DISMISS THE APPEAL OF THE REVENUE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-09-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 30/09/2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, 6. GUARD FILE BY ORDER //TRUE COPY// DY.R/AR, I TAT, AHMEDABAD