ACIT, New Delhi V. Shri Ravi Goel, New Delhi

ITA 2895/DEL/2011

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6329 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 1992-1993
• Appeal Filed On: 02-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHMA SINGH
• Assessee Lawyers: S K CHATURVEDI
• Keywords: Unexplained investment; Business income; Search and seizure; Document seized; Source of fund; Notional interest; Documents seized
• Section: 13; 22; 132; 15

Judgement Text

I.T.A.NO.2895/DEL/2011/A.Y. 199-93 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER . . /. I.T.A. NO.2895/DEL/2011 / ASSESSMENT YEAR 1992-93 ACIT CIRCLE 23(1), ROOM NO. 190, C.R. BUILDING, I.P. ESTATE, NEW DELHI. VS. RAVI GOEL LEGAL HEIR OF LT. SH. S.P. GOEL, S-347, GREATER KAILASH-II NEW DELHI. PAN NO. AAGPG7134D APPELLANT / RESPONDENT /REVENUE BY SMT. SUSHMA SINGH, CIT DR /ASSESSEE BY SH. S.K. CHATURVEDI, CA / DATE OF HEARING: 12.08 .20 21 /PRONOUNCEMENT ON 1 7 .08 .20 21 /O R D E R PER MADHUMITA ROY, J.M. 1. THE INSTANT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31.03.2011 PASSED BY THE LD. CIT(A)-XXIII, NE W DELHI ARISING OUT OF THE ORDER DATED 24.12.2009 PASSED BY LD. ACIT, CIRC LE 23(1), NEW DELHIM U/S 144(1)/254 OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS THE ACT) FOR AY 1992-93 WITH THE FOLLOWING GROUND S: I.T.A.NO.2895/DEL/2011/A.Y. 199-93 2 I.T.A.NO.2895/DEL/2011/A.Y. 199-93 3 2. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 14/15 TH SEPTEMBER, 1994. INITIALLY THE ASSESSMENTS WERE FR AMED BY AND UNDER THE ORDER DATED 13.12.2008. HOWEVER, THE LD. TRIBU NAL WAS PLEASED TO RESTORE THE MATTER TO THE FILE OF THE LD. ASSESSING OFFICER UPON WHICH THE ASSESSMENT ORDER WAS PASSED ON 24.12.2009 W ITH CERTAIN ADDITIONS. DURING THE APPELLATE PROCEEDING THE LD. CIT(A) FINA LLY UPON ISSUING REMAND REPORTS FIRST DATED 20.12.2010 AND THE OTHER DATED 23.03.2011 FINALLY DELETED CERTAIN ADDITIONS MADE BY THE LD. A O. HENCE, THE INSTANT APPEAL BEFORE US. 3. IT IS RELEVANT TO MENTION THAT THE BOOKS OF ACCOUNT OF THE APPELLANT WERE NOT FOUND DURING SEARCH, THE APPELLANT EXPLAINED TH AT THESE WERE LOST AND THE COMPLAINT WAS LODGED ON 13.11.1992 WITH THE POL ICE AUTHORITIES, COPY WHEREOF IS ALSO APPEARING AT PAGE 19 OF THE PAPER B OOK FILED BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY THE RES PECTIVE PARTIES. WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD INCLUDING THE REMAND REPORTS FORMING PART OF THE PAPER BOOK AT PA GE NOS. 10 TO 18. I.T.A.NO.2895/DEL/2011/A.Y. 199-93 4 DELETION OF ADDITION OF RS. 5,69,500/ - BEING 10% OF PROFIT ON GOODS DIRECTLY LIFTED BY THE OTHER PARTIES IS THE ISSUE B EFORE US. IN FACT THESE GOODS WERE DIRECTLY LIFTED BY THE PARTIES FROM THE CUSTOM AUTHORITIES. THE LD. AO MADE ADDITION OF RS. 5,69,500/- AND 10% PROFIT ON IT AT RS. 5,69,500/-. THE LD. CIT(A) DELETED BOTH THE ADDITI ONS. HOWEVER, IT APPEARS FROM THE ORDER PASSED BY THE LD. AO THAT TH E CONCERNED PARTIES HAVE MADE AFFIDAVIT AND NO ADVERSE EVIDENCE WAS BRO UGHT ON RECORD TO DISBELIEVE THE STATEMENT MADE IN THOSE AFFIDAVITS. FURTHER THAT, UPON PERUSAL THE COPIES OF AGREEMENTS BETWEEN THE ASSESS EE AND THE THREE PARTIES CLEARLY SHOW THAT NO MARGIN OR PROFIT WAS T O BE CHARGED BY THE ASSESSEE IN RESPECT OF THE GOODS LIFTED BY THESE TH REE PARTIES. THE AGREEMENT WITH THE PARTIES, THE AFFIDAVITS, CONFIRM ATION AND APPELLANT LETTER FILED BEFORE THE AO THE APPELLANTS LETTER F OR PERSONAL PRESENCE OF THE PARTIES LIFTED GOODS ARE PART OF THE RECORDS LY ING BEFORE US. THE LD. AO OBSERVED THAT THESE DOCUMENTS WERE NOT PRODUCED BEFORE US THOUGH THE SAME WAS IN FACT PRODUCED DURING THE ORIGINAL A SSESSMENT. IN THAT VIEW OF THE MATTER, THE LD. CIT(A) FOUND NO BASIS T O MAKE THIS ADDITION. SINCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODU CING THE ENTIRE SET OF DOCUMENTS/EVIDENCE AS MENTIONED HEREINABOVE AND IN THE ABSENCE OF ANY ADVERSE EVIDENCE RELIED UPON BY THE LD. AO. THE LD . CIT(A) FINALLY DELETED THE ADDITION OF RS. 5,69,500/- WHICH ACCORD ING TO US IS OF NO AMBIGUITY SO AS TO WARRANT INTERFERENCE AND HENCE, THIS GROUND OF APPEAL PREFERRED BY THE REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND THUS, I.T.A.NO.2895/DEL/2011/A.Y. 199-93 5 DISMISSED. THE DELETION OF ADDITION OF RS. 9,50,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT HAS BEEN CHALLENGED BEFORE U S. THE FACT CULLED OUT FROM THE RECORDS THAT THE ASSESSEE EXPLAINED TH E GOODS LIFTED FROM CUSTOM DEPARTMENT TO THE TUNE OF RS. 9,50,000/- BY FILING CONFIRMATION OF STEELEX INTERNATIONAL DETAILING THE MANNER IN WHICH GOODS HAD BEEN LIFTED BY PAYING THE SAID AMOUNT FROM THEIR BANK ACCOUNT B EING NO. 2250 OF SYND BANK, NARIMAN POINT, MUMBAI. THE ASSESSEE ALONG WI TH THE SAID CONFIRMATION AND BANK STATEMENT IS ALSO AVAILABLE B EING PART OF THE PAPER BOOK FILED BEFORE US. IT IS THE GOODS OF THE LD. A O THAT HE COULD NOT VERIFY THE DETAILS AND THUS, MADE ADDITIONS THE LD. CIT(A) , ON THE OTHER HAND, DELETED SUCH ADDITION ON THE GROUND THAT CONFIRMATI ON WAS ALREADY FILED AND THE LD. AO HAS ALSO FAILED TO BRING ANY ADVERSE EVIDENCE ON RECORD TO REJECT SUCH CONTENTION OF THE APPELLANT WHICH, ACCO RDING TO US IS JUST AND PROPER AND WITHOUT ANY AMBIGUITY SO AS TO WARRANT I NTERFERENCE. HENCE, THIS GROUND OF APPEAL FILED BY THE REVENUE FOUND TO BE DEVOID OF ANY MERIT AND THUS, DISMISSED. THE ADDITION OF RS. 18, 11,000/- AND RS. 13,45,750/- AS UNEXPLAINED INVESTMENT HAS BEEN CHAL LENGED BEFORE US BY THE REVENUE. UPON VERIFICATION OF THE DOCUMENT, IT WAS FOUND THAT THE ASSESSEE HAS MADE PAYMENT OF RS. 1 CRORE AND 61.1 L AKH ON 15.05.1991 AND 31.05.1991 RESPECTIVELY TO THE CUSTOMS AUTHORIT IES. UPON PERUSAL OF THE BANK STATEMENT IT WAS SEEN THAT THE ASSESSEE MA DE A BANK DRAFT OF RS. 21,02,500/- ON 09.05.1991 FROM HIS SYND . BANK ACCOUNT NO. 323. BEFORE MAKING IT THERE WERE VARIOUS CREDIT ENTRIES WHICH THE ASSESSEE WAS I.T.A.NO.2895/DEL/2011/A.Y. 199-93 6 DIRECTED TO EXPLAIN. THE EXPLANATION RENDERED BY T HE ASSESSEE WAS NOT FOUND SUFFICIENT AND THUS, AN AMOUNT OF RS. 18,11,0 00/- HAS BEEN ADDED US 68 OF THE ACT. THE LD. AO FURTHER FOUND THAT BE FORE MAKING THE DRAFT OF RS. 20,11,00,000/- FROM HONG KONG BANK THERE WER E SEVERAL CREDIT ENTRIES. THE ASSESSEES EXPLANATION IN THIS REGARD WAS NOT FOUND SUFFICIENT AND, THEREFORE, RS. 13,45,750/- WAS ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. HOWEVER, THERE WAS AN ARITHMETIC MISTAKE IN CALCULATING RS. 1800000/- WHICH SHOULD HAVE BEEN 1702500/- (210 2500 400000). THE LD. CIT(A) DURING THE APPELLATE PROCEEDING WENT THROUGH THE CASH FLOW STATEMENT PREPARED ON THE BASIS OF THE COPIES OF SEIZED MATERIAL TAKING INTO ACCOUNT THE OPENING CASH BALANCE, BANK WITHDRAWALS WHICH IS ALSO MADE AVAILABLE BEFORE US BEING PART OF THE PAP ER BOOK. APART FROM THAT IN THE REMAND REPORT DATED 27.10.2010 AVAILABL E AT PAGE 10 TO 15 OF THE PB SO FILED BEFORE US. THE LD. AO ADMITTED SUC H FACTS AND THE DOCUMENTARY EVIDENCES FILED IN ITS EXPLANATION OF T HE SOURCES OF FUNDS BY THE ASSESSEE AND HENCE, THE LD. CIT(A) DELETED BOTH THE ADDITIONS. ACCORDING TO US, THERE IS NO AMBIGUITY IN MAKING SU CH DECISION MADE BY THE LD. CIT(A). HENCE, THE SAID IS HEREBY CONFIRME D. THIS GROUND OF APPEAL PREFERRED BY REVENUE FAILS. THE DELETION OF ADDITION OF RS. 12490000/ - ON ACCOUNT OF CASH SALE OF AGRICULTURAL EQUIPMENT HAS BEEN CHALLENGED BEFORE U S. THE ASSESSEES CASE IS THIS THAT THE CASH FLOW COMPILED FROM THE C OPIES OF THE SEIZED I.T.A.NO.2895/DEL/2011/A.Y. 199-93 7 MATERIAL AND THE DEPARTMENT HAS NO SEIZED MATERIAL IN THAT SITUATION THE APPELLANT CANNOT BE PANELIZED WITHOUT ANY ADVERSE E VIDENCE REGARDING THE AVAILABILITY OF CASH SALES. ACCORDING TO HIM T HE CASH SALE OF AGRICULTURAL EQUIPMENT SHOWN AT RS. 1302800/- COULD NOT BE ACCEPTED AND THUS, THE DIFFERENCE OF RS. 3050000/- AND THE EXPLA INED SOURCE OF RS. 2001000/- HAS BEEN ADDED U/S 68 OF THE ACT. THE LD. CIT(A) WHILE ALLOWING THE APPEAL ALONGWITH THIS GROUND OF APPEAL RELIED ON THE BASIS OF THE DOCUMENTS, FACTS AND THE REMAND REPORT AND FURT HER OBSERVED THAT THE CASH FLOW CANNOT BE SUSPECTED IN THE ABSENCE OF ANY ADVERSE EVIDENCE RELIED UPON BY THE LD. AO WHICH ACCORDING TO US IS WITHOUT ANY AMBIGUITY SO AS TO WARRANT INTERFERENCE. THIS GROU ND OF APPEAL IS ALLOWED. 6. THE DELETION OF ADDITION OF RS. 1508644/ - MADE BY THE AO ON ACCOUNT OF LIFTING THE GOODS FROM THE CUSTOM AUTHORITIES IS TH E SUBJECT MATTER BEFORE US. IT APPEARS FROM THE RECORDS THAT THE COPY OF T HE AUDITED PROFIT AND LOSS ACCOUNT ALONG WITH THE OTHER RELEVANT DOCUMENT S HAVE BEEN FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE LD. AO VIDE PARA 4.B.1 HAS MENTIONED THAT THE BALANCE AMOUNT OF GOODS LIFTED F ROM CUSTOMS HAS NOT BEEN ACCOUNTED FOR IN BOOKS OF ACCOUNTS, THUS 10% O F THE GOODS AT RS. 15086440/- (20776940 5690500) IS ESTIMATED AS PRO FIT/INCOME OF THE ASSESSEE. THE AO HAS NOT MENTIONED ANYTHING EXCEPT THAT THIS PURCHASE WAS NOT ACCOUNTED FOR WITHOUT ANY EVIDENCE AT ALL. IN SPITE OF HAVING ALL I.T.A.NO.2895/DEL/2011/A.Y. 199-93 8 SEIZED MATERIAL AND THE DOCUMENTS OF CUSTOMS AUTHOR ITIES THE AO HAS NOT VERIFIED THE SAME. NEITHER HAS GIVEN ANY ADVERSE C OMMENT ON THE AUDITED PROFIT AND LOSS ACCOUNT. LD. CIT(A) IN HIS ORDER IN PARA 13 HAS CATEGORICALLY MENTIONED THAT ALL ABOVE GROUNDS ARE BEING DISCUSSED FOR THE SOURCE OF FUNDS FOR LIFTING THE GOODS FROM CUST OMS AND THE APPELLANT HAS ALREADY SHOWN PURCHASE IN PROFIT AND LOSS ACCOU NT AT RS. 20260309/- IN THAT VIEW OF THE MATTER, THE CONCLUSION MADE BY THE AO THAT THE SAID SALES HAD NOT BEEN REFLECTED IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE IS WITHOUT ANY BASIS AND APPLICATION OF GP RATE ON THE PRESUMED SALES OUTSIDE THE BOOKS OF ACCOUNT LEADING TO ADDITION OF RS. 1508644/- HAS BEEN RIGHTLY FOUND TO BE UNSUSTAINABLE IN THE EYE O F LAW BY THE LD. CIT(A). HENCE, THE SAME IS HEREBY CONFIRMED. THIS GROUND OF APPEAL FILED BY THE REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND HENCE, DISMISSED. 7. THE ADDITION OF RS. 1852910/ - MADE BY THE AO ON ACCOUNT OF SPECULARITY PROFIT EARNED FROM SALE OF SHARES IS THE ISSUE BEFO RE US. THE SAID SPECULATION PROFIT ON FORWARD TRANSACTIONS WHICH WE RE CARRIED FORWARD IN THESE ASSESSMENT YEARS AND COMPLETED IN THE AY 1993 -94 WITHOUT ACTUAL PROFIT/LOSS WAS GRANTED FOR. IN FACT THE LD. AO RE JECTED THE CONTENTION OF APPELLANT THAT THESE WERE FACTUALLY FORWARD TRANSAC TIONS IN SHARES OF RELIANCE INDUSTRIES LTD., DURING THE YEAR UNDER APP EAL, THE SAME WERE CARRIED FORWARD AND THE BROKER M/S PRADEEP BHALL & CO. HAS CALCULATED I.T.A.NO.2895/DEL/2011/A.Y. 199-93 9 THE NOTIONAL PROFIT ON THESE TRANSACTIONS. THE AO ONLY CONSIDERED THE DATE OF BILL WHICH WAS OF THIS YEAR SHOWING NOTIONA L SALE VALUE AT RS. 1960000/- AND 3650000/- AND NOTIONAL PROFIT OF RS. 162910/- CARRIED FORWARD ON 28.03.1992 AND RS. 1690000/- CARRIED FOR WARD ON 19.04.1992. 8. THE CASE OF THE ASSESSEE IS THIS THAT THESE WERE FO RWARDED TRANSACTIONS, PROFIT AND LOSS IS DETERMINED WHEN THE TRANSACTION GETS FINALITY OTHERWISE CARRIED FORWARD WITH NOTIONAL PROFIT/LOSS AND CHARG ES ARE DEBITED BY BROKER AS BADLATHE BILLS AND THE CONCILIATION WITH SH. PRADEEP BHALLA & COMPANY HAS ALSO BEEN PERUSED BY US. FINALLY WE FI ND THE LD. CIT(A) IN HIS ORDER IN PARA NO. 14 AND 15 HAS DELETED THE ADD ITION ON THE BASIS OF REMAND REPORT AND THE FACTS THAT THESE WERE SPECULA TIVE TRANSACTIONS AND THIS YEAR THESE WERE CARRIED FORWARD AND GOT FINALI TY IN SUBSEQUENT YEAR I.E. AY 1993-94, HE HAS REFERRED THE LD. CIT(A) ORD ER FOR AY 1993-94. WE DO NOT FIND ANY AMBIGUITY IN SUCH OBSERVATION AND D ECISION MADE BY THE LD. CIT(A) AND HENCE, THE SAME IS HEREBY CONFIRMED. THIS GROUND OF REVENUE IS THUS, DISMISSED. 9. THE ADDITION OF RS. 1500000/ - AS CASH DEPOSITED IN ACCOUNT ON 11.05.1991 IS THE ISSUE BEFORE US. THE SAID AMOUNT DEPOSITED IN THE BANK WAS NOT EXPLAINED BY THE ASSESSEE AND THUS, THE LD. AO ADDE D THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. WE HAVE PERUSED THE CASH FLOW STATEMENT AVAILABLE AT PAGE 36 OF THE PAPER BOOK FILED BEFORE US WHICH REFLECTS THAT I.T.A.NO.2895/DEL/2011/A.Y. 199-93 10 THERE WERE SUFFICIENT CASH AVAILABLE AS ON 30.04.19 91 AND ALSO THE SUFFICIENT EXPLANATION WAS MADE BY THE APPELLANT. HENCE, THE LD. CIT(A) DELETED SUCH ADDITION. HENCE, ACCORDING TO US THE LD. CIT(A) HAS RIGHTLY DELETED THE SAME. IN THAT VIEW OF THE MATTER, GROU ND PREFERRED BY THE REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND HENCE DISMISSED. 10. THE ADDITION OF RS. 239000/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IS THE ISSUE BEFORE US. THE LD. AO ADDED THE SAME ON THE PRETEXT THAT THE SAME REMAINED UNEXPLAINED IN THE ABSENCE OF BOOKS O F ACCOUNT AND OTHER EVIDENCES. THE FIRST APPELLATE AUTHORITY ON THE BA SIS OF THE EVIDENCES ADDUCED BY THE ASSESSEE WHICH IS ALSO MADE AVAILABL E BEFORE US DELETED SUCH ADDITION WHICH ACCORDING TO US IS JUST AND PRO PER. HENCE, THIS GROUND OF APPEAL PREFERRED BY THE REVENUE FAILS. 11. THE DELETION OF ADDITION OF RS. 4485420/ - ON ACCOUNT OF CLOSING STOCK HAS BEEN CHALLENGED BEFORE US. THE ASSESSEE HAD SHOWN IN ITS PROFIT & LOSS ACCOUNT SALES TO THE AMOUNT OF RS. 44011886/- ON WH ICH GP OF RS. 4908902/- HAS BEEN SHOWN. INFORMATION WAS OBTAINED FROM THE SALES TAX AUTHORITIES. IT WAS SEEN THAT BEFORE THE UPST, AUT HORITIES THE SALES WERE SHOWN AT RS. 3913620/- AND FOR CST AT RS. 23319204/ - AS AGAINST THE SALES OF RS. 44011886/- SHOWN TO THE DEPARTMENT. THE ASS ESSEE WAS ASKED TO RECONCILE AND EXPLAIN THE DISCREPANCY. THE ASSESSE E ALONG WITH ITS LETTER DATED 20.02.95 HAVE ENCLOSED THE SALES SHOWN TO THE SALES TAX I.T.A.NO.2895/DEL/2011/A.Y. 199-93 11 DEPARTMENT AND TO THE INCOME TAX DEPARTMENT. 12. THE LD. AO ULTIMATELY MADE ADDITION ON THE BASIS OF AUDITORS REPORT; ACCORDING TO THE AO THE REPORT DID NOT GIVE QUANTIT ATIVE DETAILS AND ANNEXURE A7 OF SEIZED DOCUMENTS. THE ASSESSEE HAS NOT TAKEN INTO ACCOUNT THE CLOSING STOCK OF TIN PLATE AT 224.271 T ON. THE ASSESSEES CASE IS THIS THAT THE DETAILS OF CLOSING STOCK AS FURNIS HED BY THE ASSESSEE WAS NOT TAKEN INTO CONSIDERATION BY THE AO WHILE MAKING VALUING THE CLOSING STOCK. FURTHER THAT THIS QUANTITY OF 224.271 TON E MPTY WAS ALREADY TAKEN INTO ACCOUNT FOR CALCULATING VALUE OF CLOSING STOCK AS PER CONSISTENTLY FOLLOWED POLICY OF VALUATION, LOWER OF COST OR MARK ET VALUE. THE LD CIT(A) WHILE DELETING THE ADDITION OBSERVED AS FOLL OWS: - THE ASSESSEE HAD SHOWN AN OUTSTANDING LOAN TO PLAZA PANCHSHEEL PROPERTIES AT RS. 4405455/- AS ON 31.03. 92 WHEREAS IN THE PREVIOUS YEAR IT WAS RS. 10405455/-. ASSESS EE FILED CONFIRMATION FROM PLAZA PANCHSHEEL PROPERTIES THAT THE SUM OF RS. 60 LACS HAD BEEN RETURNED TO THE ASSESSEE AND T HE PANCHSHEEL PROPERTIES IN THE EARLIER YEARS BUT NO I NTEREST HAD BEEN SHOWN IN THE COPY OF ACCOUNTS OF PLAZA PANCHSH EEL PROPERTIES FOR THIS YEAR. ASSESSEE FURTHER STATED THAT THE RECOVERY OF LOAN FROM THE ABOVE PARTY WAS DOUBTFUL AND, THEREFORE, INTEREST HAS NOT BEEN CHARGED, IT WOULD BE PERTINENT TO NOTE THAT M/S PLAZA PANCHSHEEL PROPERT IES IS OWNED BY THE HUSBAND AND FATHER IN LAW OF ASSESSEE S DAUGHTER AS STATED BY SH. S.P. GOYAL DURING THE COURSE OF SE ARCH PROCEEDINGS IN HIS STATEMENT. NO EVIDENCE REGARDIN G ANY DISPUTED IN RESPECT OF LOAN OR INTEREST HAS BEEN FI LED. THE INTEREST INCOME WAS BEING SHOWN BY THE ASSESSEE IN THE EARLIER YEARS. I.T.A.NO.2895/DEL/2011/A.Y. 199-93 12 13. THUS, IT APPEARS FROM THE ABOVE, THE LD. CIT(A) DEL ETED THE ADDITION ON THE BASIS OF FACTS, DOCUMENTS AND REMAND REPORT FRO M THE AO ON THE GROUND THAT THE APPELLANT HAS INCLUDED THIS QUANTIT Y WHILE CALCULATING THE VALUE OF CLOSING STOCK WHICH IS PROPER AND THUS, CO NFIRMED. THIS GROUND OF APPEAL PREFERRED BY THE REVENUE FAILS. 14. THE DELETION OF ADDITION OF RS. 4991098/ - MADE BY THE AO ON ACCOUNT OF GP RATE AT 20% HAS BEEN CHALLENGED BEFORE US. THE ASSESSEE DECLARED SALE IN THE PROFIT AND LOSS ACCOUNT AT RS. 4400886/ -, WHEREAS AS PER INTIMATION FROM SALES TAX DEPARTMENT, IT WAS SUM OF RS. 3913620/- AND CST OF RS. 23319204/- IT WAS SUBMITTED BY THE ASSESSEE THAT FIGURES INTIMATED BY THE SALES TAX DEPARTMENT WAS THE TAXAB LE SALES, WHEREAS IN AUDITED ACCOUNTS THE TOTAL SALE INCLUDED EXEMPTED O NE IS ALSO INCLUDED. FURTHER THAT THE SALE DECLARED AT RS. 44011886/- WA S DULY VERIFIED AND AUDITED NEITHER THE AO WAS HAVING ANY ADVERSE INFOR MATION OR MATERIAL TO REJECT BUT ON THE BASIS OF THE INFORMATION FOR THE SALES TAX DEPARTMENT REGARDING SALES, WHICH WAS MUCH LESSOR THE SALES DE CLARED REJECTED THE SALES AS PER AUDITED STATEMENTS AND ESTIMATED THE S ALE AT 4.50 CRORE AND GP WAS CALCULATED AT 20%; BUT DIFFERENCE OF ACTUAL GP TO THE TUNE OF RS. 4091098/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY TH E LD. AO. WHILE ALLOWING THE APPEAL PREFERRED BY THE ASSESSEE THE LD. CIT(A) I.T.A.NO.2895/DEL/2011/A.Y. 199-93 13 OBSERVED AS FO LLOWS: - 41 I HAVE CONSIDERED THE FACTS OF THE CASE AND IT IS SEEN THAT THE APPELLANT HAD CLEARLY EXPLAINED THE DISCRE PANCY OF TURNOVER SHOWN IN THE SALES TAX RETURN VIS--VIS TH E INCOME TAX RETURN. THE TURNOVER AS RECORDED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE AT RS. 44011886/- IS MUCH MORE THAN TH E TURNOVER AS PER THE SALES TAX RETURN. THE DIFFEREN CE HAS BEEN EXPLAINED BY THE ASSESSEE ON THE GROUND THAT TURNOV ER IN THE SALES TAX RETURN DOES NOT INCLUDE THE SALES OF EXEM PT ITEMS OF SALES LIKE AGRICULTURAL IMPLEMENTS, EXPORT SALES. THE ASSESSING OFFICER DESPITE THIS LOGICAL EXPLANATION, PROCEEDED TO APPLY A GP RATE OF 20% ON AN ESTIMATED TURNOVER OF RS. 4,50,00,000/- WITHOUT BRINGING ON RECORD ANY SOUND REASONING FOR DOING THE SAME. THERE IS NO REASON WHY THE TUR NOVER AT RS. 4,40,11,886/- AND GP RATE AS DECLARED BY THE AS SESSEE SHOULD BE REJECTED TO ESTIMATE THE TURNOVER AT RS. 4,50,00,000/- AND APPLY ANY OTHER GP RATE SAY 20%. THE ADDITION SO MADE, THEREFORE, DESERVES TO BE DELETED . 15. THUS, IT APPEARS FROM THE ABOVE THAT THE LD. CIT(A) DELETED THE ADDITION ON THE BASIS THAT THE SALES AS PER AUDITED PROFIT A ND LOSS ACCOUNT IS MUCH MORE THAN THE SALES AS PER SALES TAX DEPARTMENT BEC AUSE THE EXEMPTED SALES ARE NOT INCLUDED IN SALES TAX RETURNS. THERE FORE, THE ESTIMATION IS NOT CORRECT. REGARDING GP OF 20%, THE LD. CIT(A) M ENTIONED THAT DESPITE LOGICAL EXPLANATION THE ESTIMATION OF TURNOVER AT 4 .50 CRORE AND 20% GP WITHOUT BRINGING ON RECORD ANY SOUND REASONING FOR DOING THE SAME. THERE WAS NO REASON TO REJECT THE ACTUAL SALE OF RS . 44011886/- AND GP OF 11.15% AS OF AGAINST THE LD. CIT(A) WHICH ACCORDING TO US IS WITHOUT ANY AMBIGUITY SO US TO WARRANT INTERFERENCE AND HENCE, THIS GROUND OF APPEAL PREFERRED BY THE REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND THUS, I.T.A.NO.2895/DEL/2011/A.Y. 199-93 14 DISMISSED. 16. DELETION OF ADDITION OF RS. 1399710/ - MADE ON ACCOUNT OF NOTIONAL INTEREST ON LOAN OUTSTANDING HAS BEEN CHALLENGED BE FORE US BY THE REVENUE. 17. THE FACTS CULLED OUT FROM THE ASSESSMENT ORDER IS T HIS THAT DURING THE CURRENT YEARS ALSO INTEREST @ 15% IS CA LCULATED AND DISALLOWANCE OF RS. 13,99,170/- MADE. ULTIMATELY I NTEREST @ 15% WAS CALCULATED TO THE TUNE OF RS. 1399170/- AND THE SAM E WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE FIRST APP ELLATE AUTHORITY THE ASSESSEE SUBMITTED THE SAME. TYPED 18. THE LD. CIT(A) WHILE DELETING THE ADDITION OBSERVED AS FOLLOWS: - I.T.A.NO.2895/DEL/2011/A.Y. 199-93 15 19. IT APPEARS FROM THE ABOVE THAT THE LD. CIT( A) WHILE DELETED NOTIONAL ADDITION TOOK INTO CONSIDERATION THIS PARTICULAR AS PECT OF THE MATTER THAT THE LD. AO HAS NOT GIVEN ANY WEIGHTAGE TO THE CIRCU MSTANCES DETAILED BY I.T.A.NO.2895/DEL/2011/A.Y. 199-93 16 THE ASSESSEE THAT THE INTEREST HAD TO BE WEIVED TO SECURE THE PRINCIPLE. NO DOCUMENT WAS FURTHER FOUND DURING THE SEARCH TO SUGGEST THAT THE ASSESSEE HAD RECEIVED THE INTEREST AMOUNT OUTSIDE T HE BOOKS OF ACCOUNT AS OF THE OBSERVATION MADE BY THE LD. CIT(A) WHILE DELETING SUCH ADDITION IS ACCORDING TO US JUST AND PROPER AND WE HEREBY CO NFIRM THE SAME. THE GROUND OF APPEAL FILED BY THE REVENUE FAILS. 20. THE ADDITION OF RS. 1 LAKH MADE ON ESTIMATE BASIS I S THE SUBJECT MATTER BEFORE US. THIS IS NOTHING BUT ON THE BASIS OF THE VOUCHER CONTAINING PAYMENT OF VISA CHARGES BY VANDANA GOYAL FROM WHOSE RESIDENCE THE SAME HAS BEEN SEIZED. THE LD. CIT(A) WHILE DELETIN G SUCH ADDITION OBSERVED AS FOLLOWS: - 21. THUS, IT APPEARS THAT THE VOUCHER WHICH WAS SEIZED FROM THE RESIDENCE OF MS. VANDANA GOYAL WAS AT RS. 20858/- BEING THE VISA CHARGES OF OUR TRAVELLING AND THUS, THE SAME WAS RIGHTLY DELETED B Y THE LD. CIT(A). THE SAME IS THUS, HEREBY CONFIRMED. THIS GROUND OF APP EAL PREFERRED BY THE I.T.A.NO.2895/DEL/2011/A.Y. 199-93 17 REVENUE, THEREFORE, FAILS. 22. THE DELETION OF ADDITION OF RS. 6 LACS MADE ON ACCOUNT OF CREDITORS HAS BEEN CHALLENGED BEFORE US. THE FACTS CULLED OUT FO RM THE AOS ORDER THAT OUT OF RS. 6984000/- AS HAS BEEN SHOWN AS OUTSTANDI NG CREDITORS BY THE ASSESSEE. THE ASSESSEE FILED CONFIRMATION FROM ALL PARTIES EXCEPT THOSE OF M/S M.B. ENTERPRISES RS. 150000/- AND M/S ANAND INT ERNATIONAL RS. 450000/-. HENCE, THE SAME ARE ADDED TO THE ASSESSE ES TOTAL INCOME RS. 600000/-. 23. THE LD. CIT(A) DELETED THE ADDITION WHILE DOING SO. HE HAS RELIED UPON THE JUDGMENT PASSED IN THE MATTER OF SUGAULI SUGAR WORKS LTD., 236 ITR 518 (SC). ACCORDING TO US, THERE IS NO AMBIGUITY I N SUCH ORDER PASSED BY THE LD. CIT(A). HENCE, WE CONFIRM THE SAME. 24. IN THAT VIEW OF THE MATTER, THIS GROUND OF APPEAL P REFERRED BY THE REVENUE FAILS. 25. THE FACT CULLED OUT FROM THE AOS ORDER SUCH ADDITI ON HAS BEEN MADE ON THE FACT OF DEPOSITING AMOUNT OF RS. 3 LACS EACH TO THE BANK ACCOUNT. THE ADDITION WAS MADE REJECTING THE CASH FLOW BASED UPO N THE DOCUMENTS INCLUDING SALES OF AGRICULTURAL EUQIPMENTS AT RS. 8 13000/-. WHILE DELETING THE ADDITION THE LD. CIT(A) OBSERVED AS FOLLOWS: - I.T.A.NO.2895/DEL/2011/A.Y. 199-93 18 26. THUS, IT APPEARS THAT THE LD. CIT( A) WHILE DELETING THE ADDITION MENTIONED THAT THE APPELLANT HAS SHOWN TOTAL SALES OF RS. 11935611/- OF AGRICULTURAL EQUIPMENT DURING THE YEAR 1992 AND THE AO CANNOT REJECT THE CASH FLOW ON THE BASIS OF CASH SALE OF AGRICULTURAL EQUIPMENTS AT RS. 813000/- IN THE MONTH OF FEBRUARY, 1992. THE REASO NS SO RECORDED WHILE DELETING THE ADDITION BY THE LD. CIT(A) SEEMS TO BE ADEQUATE AND HENCE, THE SAME IS CONFIRMED. THIS GROUND OF APPEAL PREFE RRED BY REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND THUS, DISMISSED. 27. THE ADDITION OF RS. 295000/ - IS A SUBJECT MATTER BEFORE US. THE AO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE SA ID AMOUNT WAS DEPOSITED OUT OF CASH BALANCE AVAILABLE WITH THE AS SESSEE OUT OF CASH I.T.A.NO.2895/DEL/2011/A.Y. 199-93 19 SALES, WHEREAS THE APPELLANT HAS SHOWN TOTAL S ALE OF RS. 11935611/ - OF AGRICULTURAL EQUIPMENT DURING THE YEAR 1991-92 AND, THEREFORE, THE OBSERVATION MADE BY THE AO FOUND TO BE ERRONEOUS AS MADE BY THE LD. CIT(A) IS WITHOUT ANY AMBIGUITY AND THUS, THE SAME IS HEREBY CONFIRMED. THE GROUND OF APPEAL FILED BY REVENUE FAILS. 28. THE DELETION OF ADDITION OF RS.13003279/ - ON ACCOUNT OF INTEREST AT 18% OF LOANS AND ADVANCES HAS BEEN CHALLENGED BEFORE US BY THE REVENUE. THE AO DISALLOWED THEE SAID SUM OF INTEREST ON OUTSTAND ING LOANS AND ADVANCES AMOUNTING TO RS. 7240435/- WHICH WAS DELET ED BY THE LD. CIT(A) FOLLOWING THE ORDER PASSED BY THE LD. TRIBUNAL IN A SSESSEES OWN CASE IN ITA NO. 588/DEL/1995 FOR AY 1991-92 THE RELEVANT PO RTION WHERE OF IS AS FOLLOWS: - I.T.A.NO.2895/DEL/2011/A.Y. 199-93 20 29. THUS, WE DO NOT FIND ANY REASONS TO INTERFERE WITH THE ORDER PAS SED BY THE LD. CIT(A) IN THE ABSENCE OF ANY CHANGED CIRCUM STANCES. THE SAME IS HEREBY CONFIRMED. THE GROUND OF APPEAL PREFERRED B Y REVENUE IS, THUS, FOUND TO BE DEVOID OF ANY MERIT AND HENCE DISMISSED. 30. THE DELETION OF ADDITION OF RS. 2826860/ - HAS BEEN CHALLENGED BEFORE US BY THE REVENUE. THE FACT CULLED OUT FROM THE ASSES SMENT ORDER IS THIS THAT THE ASSESSEE HAD SHOWN DEBIT OF RS. 2157795/- WITH ONE SH. PRADEEP I.T.A.NO.2895/DEL/2011/A.Y. 199-93 21 BHALLA & COMPANY AND SHOWED THE CREDIT BA LANCE OF RS. 3280655/ - . THESE DIFFERENCES OF THE SAID AMOUNT HAVE BEEN ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. SINCE, THE SAME WAS NOT RE CONCILED BY THE ASSESSEE AS OF THE OBSERVATION MADE BY THE LD. AO. HOWEVER, FACT REMAINS THAT DURING ASSESSMENT THE RECONCILIATION W AS FILED TO EXPLAIN THE DIFFERENCE OF BALANCES. THE AO DID NOT CONSIDER TH E SAME AND THE FACTS THAT IN ADDITION OF RS. 1852910/-, THE NOTIONAL SPE CULATION PROFIT ON FORWARD TRANSACTIONS WAS CARRIED FORWARD AND RS. 10 00000/- WAS PAID BY ACCOUNT PAYEE CHEQUE FROM BHARAT TIN UDYOG, THE CON CERN OF WIFE OF LATE SHRI S.P. GOEL. NO GAIN ACCRUED TO THE APPELLANT. THE GAIN/LOSS WERE DULY ACCOUNTED FOR ON THE BASIS OF FINALITY OF TRAN SACTION. 31. THE LD. CIT(A) WHILE DELETING THE ADDITION OBS ERVED AS FOLLOWS: - I.T.A.NO.2895/DEL/2011/A.Y. 199-93 22 32. THUS, IT APPEARS THAT THE LD. CIT( A) DELETED THE ADDITION ON THE BASIS OF THE RECONCILIATION FILED BY THE ASSESSEE BEFORE THE AO AND BEFORE HIM AS WELL WITHOUT ANY AMBIGUITY SO AS TO WARRANT INTERFE RENCE. HENCE, THE APPEAL PREFERRED BY THE REVENUE IS FOUND TO BE DEVOID OF ANY MERIT AND THUS, DISMISSED. 33. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/08/2021. SD/- SD/- (N.K. BILLAIYA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH AUGUST, 2021 * KAVITA ARORA, SR. P.S. I.T.A.NO.2895/DEL/2011/A.Y. 199-93 23 COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI