The ACIT, Circle-4, Surat V. M/s. Rajlaxmi Prints Pvt.Ltd., Surat

ITA 2994/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6374 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 25-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAVDR
• Assessee Lawyers: S K KABRA
• Keywords: Bogus purchase; Income from undisclosed sources; Principle of natural justice; Question of law; Block assessment; Reassessment proceedings; Set aside; Capital Gains
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' BEFORE SHRI BHAVNESH SAINI,JM & SHRI A N PAHUJA,AM ITA NO.2994/AHD/2008 (ASSESSMENT YEAR:-2003-04) ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-4,ROOM NO.223,AAYAKAR BHAVAN, MAJURA GATE, SURAT V/S M/S RAJLAXMI PRINTS PVT. LTD., 246/1, GIDC, PANDESARA, SURAT PAN: AABCR 1036 R [APPELLANT] [RESPONDENT] ITA NO.3134/AHD/2008 (ASSESSMENT YEAR:-2003-04) M/S RAJLAXMI PRINTS PVT. LTD., 246/1, GIDC, PANDESARA, SURAT V/S ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-4, SURAT [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI B L YADAV,DR ASSESSEE BY:- SHRI S K KABRA, AR O R D E R A N PAHUJA: THESE CROSS APPEALS AGAINST AN ORDER DATED 16-06- 2008 OF THE LD. CIT(APPEALS)-III, SURAT, FOR THE A SSESSMENT YEAR 2003-04, RAISE THE FOLLOWING GROUNDS:- ITA NO.2994/AHD/2008[REVENUE] [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-III, SURAT HAS ERRED IN RESTRICTING THE ADDITION OF RS.44,56,916/- TO RS.11,24,250/- MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF BOGUS PURCHASE. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A)-III, SURAT HAS ERRED IN DELETING THE ADD ITION OF RS.11,142/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISS ION PAID ON BOGUS PURCHASE. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A)-III, SURAT OUGHT TO HAVE UPHELD THE ORDE R OF THE ASSESSING OFFICER. 2 ITA NOS.2994 & 3134/AHD/2008 2 [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A)-III, SURAT MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER REST ORED. ITA NO.3134/AHD/2008[ASSESSEE] [1] AS REGARDS ADDITION OF RS.44,56,914/- ON ACCOU NT OF PURCHASES BEING CONSIDERED AS BOGUS. 1.1 THE LD. CIT(A) HAD ERRED ON THE FACTS OF THE CA SE IN DELETING THE ADDITION TO THE EXTENT OF 75% AND RESTRICTING THE A MOUNT OF ADDITION TO 25% OF THE TOTAL PURCHASE. [2] THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, MODIFY ALTER OR DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING. 2. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL OF THE REVENUE AND THAT OF THE ASSESSEE, FACTS, IN BRIEF, AS PER RELEV ANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.36,29,113/- WAS FILED ON 17-11-2003 BY THE ASSESSEE, PROCESSING MAN MADE FABRICS THE AS SESSMENT WAS INITIALLY COMPLETED ON 30-09-2005 U/S 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] DETERMI NING THE INCOME OF RS.39,24,230/-.THE SAID ASSESSMENT WAS SUBSEQUENTLY REOPENED U/S 147 OF THE ACT WITH THE ISSUE OF A NOTICE U/S 148 O F THE ACT ON 16.5.2006 SINCE THE ASSESSEE-COMPANY WAS FOUND TO HAVE CLAIMED DEDUCTION FOR NON-GENUINE PURCHASES OF COLOUR & CH EMICAL AMOUNTING TO RS.44,56,914/- FROM THE FOLLOWING FICT ITIOUS CONCERNS FLOATED BY SHRI ROHIT PANWALA: SR. NO. NAME OF THE PERSON OPERATING THE ACCOUNT NAME OF THE CONCERN ADDRESS 1 ROHIT PANWALA POOJA DYE CHEM 307, AVISHKAR APARTMENT, ADAJAN, SURAT 2 ROHIT PANWALA SHREE SAI TEXTILE 9/1866, BEGUMPURA , MUMBAIWAD, SURAT 3 SANDHYABEN PANWALA ABHI DYES 307,AVISHKAR APARTMENT, ADAJAN, SURAT 4 SANDHYABEN PANWALA SANDHYA TRADING CO. F/8, SOMNA TH MAHADEV SOCIETY, ATHWALINES, SURAT 3 ITA NOS.2994 & 3134/AHD/2008 3 5 BAHUMATI SHREE TAPI TRADING CO. 10/1494 MOTIPOLE, GOPIURA, SURAT 6 BAHUMATI SAHYADRI TEXTILES -DO- 7 BAHUMATI SHREE MAHAPRABHUJI TEXTILES F/8, SOMNATH MAHADEV SOCIETY, ATHWALINES, SURAT 8 NEHABEN SHREEJI TEXTILES 10/1494 MOTIPOLE, GOPIPURA, SURAT 9 NEHABEN NEHA SYNTHETICS F/8, SOMNATH MAHADEV SOCIETY, ATHWALINES, SURAT 10 PINABEN SHREE NATH TEXTILES 10/1494 MOTIPOLE, GOPIURA, SURAT 11 PINEBEN PUNITA CORPORATION F/8, SOMNATH MAHADEV SOCIETY, ATHWALINES, SURAT 12 MADHUSUDAN H TANNA NALANDA CORPORATION F/8, SOMN ATH MAHADEV SOCIETY, ATHWALINES, SURAT SHRI ROHIT PANWALA ADMITTED IN HIS STATEMENT THAT H E DID NOT MAINTAIN ANY BOOKS OF ACCOUNT FOR THESE CONCERNS NO R HE OR HIS FAMILY MEMBERS / IN-LAWS DID ANY BUSINESS IN COLOUR AND CHEMICALS OR CLOTH. SUBSEQUENTLY, SHRI ROHIT PANWALA AND SHRI SUKHDEVBHAI TANNA S/O OF SHRI MADHUSUDAN H TANNA SUBMITTED AFFI DAVITS, CONFIRMING THEIR STATEMENTS. ON THE BASIS OF THEIR STATEMENTS AND AFFIDAVITS, IT TRANSPIRED THAT THE ASSESSEE-COMPAN Y PURCHASED BOGUS BILLS OF COLOUR/CHEMICALS OF RS.44,56,914/- D URING THE YEAR UNDER CONSIDERATION FROM THE FOLLOWING SUPPLIERS:- SR. NO. NAME OF THE SUPPLIER AMOUNT (RS.) 1 NEHA SYNTHETICS 10,73,625 2 SHREE TAPI TRADING CO. 2,04,800 3 PUNITA CORPORATION 3,64,435 4 ABHI DYES 10,90,080 5 NALANDA CORPORATION 13,24,280 6 POOJA DYE CHEM 3,99,694 TOTAL 44,56,914 4 ITA NOS.2994 & 3134/AHD/2008 4 2.1 IN THE LIGHT OF AFORESAID INFORMATION, A SHO WCAUSE NOTICE DATED 07-03-2007, PROPOSING TO DISALLOW THE CLAIM OF PU RCHASES OF COLOUR & CHEMICALS AMOUNTING TO RS.44,56,914/- WAS ISSUED TO THE ASSESSEE DURING THE REASSESSMENT PROCEEDINGS. IN RE SPONSE, THE ASSESSEE DENIED HAVING MADE ANY BOGUS PURCHASES FRO M THE AFORESAID PARTIES; INSTEAD IT WAS SUBMITTED THAT MATERIAL AS DESCRIBED IN THE PURCHASE BILLS WAS DULY RECEIVED FROM THESE SUPPLIERS . ALL THE PU RCHASES MADE BY THE COMPANY WERE IN THE REGULAR COURSE OF BUSINESS AND PAYMENTS HAD BEEN MADE BY A/C PAYEE CHEQUES. INTER ALIA, COPY OF ACCOUNT OF THE S UPPLIERS AS PER THE BOOKS OF THE COMPANY WAS ALSO SUBMITTED .IT WAS FURTHER POIN TED OUT THAT NO CASH HAD BEEN RECEIVED BACK BY THE ASSESSEE ON ACCOUNT OF P AYMENTS, AS STATED BY THE AFORESAID SUPPLIERS NOR THERE WAS ANY EVIDENCE TO T HAT EFFECT. THE ASSESSEE ALSO SOUGHT COPY OF STATEMENTS OF THE AFORESAID SUPPLIER S AND THEIR CROSS-EXAMINATION. O N THE REQUEST ON BEHALF OF THE ASSESSEE, SHRI ROH IT PANWALA WAS EXAMINED ON 18/10/2007 AND ALSO ALLOWED TO BE CROSS EXAMINED. I N HIS DEPOSITION, TAKEN IN THE PRESENCE OF SHRI S.K.KABRA, C.A. THE AUTHORIZED REPRESENTATIVE, SHRI PANWALA REITERATED THAT NEITHER HE NOR HIS FAMILY MEMBERS E VER CARRIED ON BUSINESS IN COLOUR AND CHEMICALS; RATHER HE ISSUED ONLY ACCOMMO DATION(BOGUS) BILLS TO PARTIES WHO APPROACHED HIM. HE EXPLAINED IN DETAIL THE MODUS OPERANDI WHICH GO LIKE THIS- PARTIES WHO ARE IN NEED OF ACCOMMODATION (BOGUS) BILLS WOULD APPROACH HIM, HE, IN TURN WOULD ISSUE BILLS WITH THE NAME OF THE PARTIES, THEY WOULD TELL AND COLLECT THE CHEQUES. THEN, HE WOULD ISSUE A SLIP TO THE PARTIES AND THE CHEQUE WOULD BE DEPOSITED INTO BANK ACCOUNT. LATER HE WOUL D RETURN THE CASH THROUGH THE PARTIES WHO WOULD COME WITH SLIP. THE CASH WAS HANDED OVER AFTER DEDUCTING A COMMISSION OF 0.25%. MR.PANWALA ADMITTED THAT HE HAD NO KNOWLEDGE ABOUT CHEMICALS. WITH REGARD TO 26 BILLS ISSUED TO THE ASSESSEE COMPANY, SHRI ROHIT PANWALA STOUTLY STATED THAT HE NEVER SUPPLIED CHEMI CASL/COLOUR. NEITHER HE KNEW ANY OF THE DIRECTOR NOR ANY EMPLOYEES OF THE ASSESS EE COMPANY. IN HIS CROSS- EXAMINATION, TO A QUERY BY SHRI S.K.KABRA C.A. & A. R. OF THE ASSESSEE COMPANY, AS TO WHETHER ANY DIRECTOR OF COMPANY CAME TO HIM F OR BILL; SHRI PANWALA REPLIED THAT HE DID NOT KNOW ANYBODY FROM RAJLAXMI PRINTS P VT. LTD. AND WHOEVER COME TO HIM FOR BILLS, SUPPLIED HIM WITH DETAILS OF COLOUR AND CHEMICALS. REGARDING RETURN OF CASH, SHRI PANWALA REPLIED THAT HE PAID THE CASH TO THE PERSON WHO CAME TO 5 ITA NOS.2994 & 3134/AHD/2008 5 HIM WITH SLIP. HOWEVER, THE AO DID NOT ACCEPT THE AFORESAID SUBMISSIONS OF THE ASSESSEE AND DISALLOWED THE AFORESAID AMOUNT OF RS. 44,56,914/- ON THE GROUND THAT THE SELLER ADMITTED THAT HIS DUMMY CONCERNS V IZ. NEHA SYNTHETICS, SHREE TAPI TRADING CO, PUNITA CORPORATION, ABHI DIES, NAL ANDA CORPORATION AND POOJA DYE CHEM, HAD ISSUED ONLY BILLS, WITHOUT SUPPLYING ANY MATERIAL AND PAYMENT RECEIVED BY ACCOUNT PAYEE CHEQUE HAD BEEN RETURNED BACK IN CASH AFTER ADJUSTING THE COMMISSION . EVEN THE COPIES OF SWOR N STATEMENT RECORDED OF SHRI ROHIT PANWALA AND COPIES OF AFFIDAVITS OF SHRI SUKH EDEVBHAI TANNA & THEIR FAMILY MEMBER(S0 WERE SUPPLIED TO THE ASSESSEE ON 8/10/200 7 . IN THE LIGHT OF THESE FACTS AND RELYING UPON DECISIONS IN CIT VS. LA-MEDI CA (2001) 250ITR 575 (DEL),CIT V. DURGA PRASAD MORE [1971] 82ITR 540 (SC ), SUMATI DAYAL V. COMMISSIONER OF INCOME-TAX [ 1995] 214 ITR 801 (SC) ; AND COLLECTOR OF CUSTOMS VS. D BHOORMULL, AIR 1974 SC 859, THE AO DI SALLOWED THE CLAIM FOR DEDUCTION OF EXPENSE RS.44,56,914/- BESIDES COMMISS ION OF RS.11,142/- @ 0.25% PAID TO SHRI ROHIT PANWALA FOR ISSUING BOGUS BILLS. 3. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITI ON OF RS.11,142/- ON ACCOUNT OF COMMISSION AND REDUCED TH E DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE IN THE FOLLOWING TERMS :- BEFORE ME, THE ID. AR SUBMITTED THAT THE APPELLANT HAD PURCHASED COLOR AND CHEMICALS AND THE MATERIAL WAS RECEIVED BY IT W HICH WAS SUPPORTED BY CHALLANS AND INWARD STAMP OF SECURITY IN-CHARGE AT THE FACTORY GATE. THE PAYMENT FOR THE SAME WAS MADE BY A/C PAYEE CHEQUES. THE APPELLANT WOULD MAKE PURCHASES FROM THE SUPPLIER OR HIS REPRE SENTATIVE WHO WOULD VISIT THE OFFICE OF THE APPELLANT AND OFFER THE MAT ERIAL FOR SALE. THEREFORE, IT WAS NEVER KNOWN IF THE CHALLANS OR INVOICES WERE FA KE OR OTHER WISE. FURTHER, SHRI PANWALA HAD ALSO CATEGORICALLY STATED THAT HE DID NOT KNOW THE APPELLANT OR ANY OF HIS REPRESENTATIVES. THE ID . AR PRODUCED COPIES OF INWARD CHALLAN RECEIPT AND INVOICES IN SUPPORT OF H IS CLAIM. I HAVE CONSIDERED THE SUBMISSIONS AND GONE THROUGH THE DETAILS FILED BY THE APPELLANT. IT IS SEEN THAT THE AO HAS BEEN ABLE TO ESTABLISH THAT SHRI PANWALA WAS ONLY A NAME LENDER AND WAS ONLY ISSUING BILLS AND EARNING COMMISSION AFTER DISCOUNTING THE CHEQUES WHICH WERE DEPOSITED IN HIS BANK ACCOUNT BUT IT IS ALSO A FACT THAT SHRI PANWAL A DURING HIS CROSS EXAMINATION BY THE APPELLANT DID NOT RECOGNISE EITH ER THE PARTNERS OF THE FIRM OR THE PURCHASE MANAGER WHO WOULD BE THE ONLY FUNCTIONARIES TO WHOM THE PAY BACK WOULD HAVE BEEN MADE. I HAVE ALSO EXAMINED THE BILLS 6 ITA NOS.2994 & 3134/AHD/2008 6 AND THE INWARD RECEIPTS WHICH IS DULY STAMPED AND S IGNED BY THE SECURITY OFFICIALS AT THE MILL'S GATE INDICATING THAT THE GO ODS WERE ACTUALLY RECEIVED. IT IS HIGHLY UNLIKELY THAT THE LOWLY SECURITY OFFIC ERS WOULD BE IN COLLUSION WITH THE APPELLANT IN MAKING FALSE ENTRIES IN THE REGIST ER BECAUSE OTHERWISE THE APPELLANT WOULD LOOSE TOTAL CONTROL OF INWARD AND O UTWARD MOVEMENT OF GOODS FROM THE FACTORY AND THE VERY PURPOSE OF HAVI NG SECURITY OFFICERS AT THE FACTORY GATE WOULD BE DEFEATED. THIS MEANS THAT DESPITE SHRI ROHIT PANWALA, WHO WAS CONTROLLING THE FOUR ALLEGEDLY BOG US FIRM, HAVING DENIED MAKING ANY SALES TO THE APPELLANT FIRM, PURCHASES H AVE BEEN MADE BY THE APPELLANT AS EVIDENCED BY THE INWARD ENTRY STAMPS O N THE BILLS. NOW IT IS A COMMON PRACTICE THAT THE PURCHASES, ALTHOUGH MADE, ARE NOT FROM THE ESTABLISHED CONCERNS BUT FROM AGENTS OF SUPPLIERS A ND SMALL TRADE MERCHANTS. OBVIOUSLY, THE PURPOSE IS TO CUT DOWN IN THE COST OF SUCH PURCHASES BY GETTING THE SUPPLIES AT A LOWER RATE T HAN MENTIONED ONLY IN THE BILLS AND SAVING ON VARIOUS TAXES LIKE OCTROI, SALES TAX, EXCISE AND CERTAIN OTHER EXPENSES. SINCE I AM OF THE CONSIDERE D VIEW THAT THE SAID CHEMICALS AND COLOURS WERE RECEIVED AND USED BY THE APPELLANT, THE ONLY QUESTION IS WHAT THE BENEFIT TO THE APPELLANT WAS. AS ALREADY MENTIONED THE APPELLANT WOULD BE MAKING CONSIDERABLE SAVINGS DUE TO LOWER PRICES AND TAXES AS ALSO FREIGHT ETC., I AM OF THE VIEW TH AT IT IS A FIT CASE WHERE THE RATIO OF DECISION OF HON'BLE ITAT, AHMEDABAD IN THE CASE OF M/S VIJAY PROTEINS IS APPLICABLE. THE HONBLE TRIBUNAL, IN TH AT CASE HELD THAT IT COULD BE FAIR AND REASONABLE IF 25% OF SUCH PURCHASE PRIC E WAS DISALLOWED TO COMPENSATE FOR THE DISCREPANCIES. IN VIEW OF THIS D ECISION, I HOLD THAT ONLY 25% OF THE PURCHASE PRICE IS DISALLOWED WHICH WORKS OUT TO RS.11,14,250/- . THE AO SHALL RESTRICT THE ADDITION THIS AMOUNT ON LY. REGARDING COMMISSION OF RS.11,142/-, IT IS SEEN THA T THERE IS NO EVIDENCE THAT THIS AMOUNT PAID BY THE APPELLANT TO SHRI PANW ALA AND IT IS ONLY A MATTER OF CONJECTURE AND SURMISES. ADDITION ON THIS ACCOUNT IS DIRECTED TO BE DELETED. 4. BOTH, THE REVENUE AS WELL AS ASSESSEE ARE NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEA RNED CIT(A). THE REVENUE HAVE CHALLENGED THE RESTRICTION OF THE DISA LLOWANCE OF RS.44,56,914/- TO RS.11,14,250/- AS ALSO DELETION OF THE DISALLOWANCE OF RS.11,142/- ON ACCOUNT OF COMMISSIO N WHILE THE ASSESSEE DISPUTED THE DISALLOWANCE UPHELD BY THE LD . CIT(A) TO THE EXTENT OF RS.11,14,250/-. THE LEARNED DR SUPPORTED THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASSESSEE P LEADED THAT DISALLOWANCE UPHELD BY THE LD. CIT(A) IS ALSO REQUI RED TO BE DELETED IN THE LIGHT OF VIEW TAKEN IN THE FOLLOWING DECISIO NS IN IDENTICAL CIRCUMSTANCES : 7 ITA NOS.2994 & 3134/AHD/2008 7 I. AKRUTI DYEING & PRINTING MILLS PVT. LTD. (ITA NO .2551 & 2752/AHD/2006, ORDER DATED:26/10/2007) II. SHALU DYEING & PRINTING MILLS PVT. LTD. (ITA NO.1491 & 1492/AHD/2008, ORDER DATED: 11/07/2008) III. DADA SILK MILLS (ITA NO. 1896/AHD/20 07, ORDER DATED: 11/09/2008); AND IV. SUMAN SILK MILLS PVT. LTD. (ITA NOS. 3794 & 3894\AHD\2008, ORDER DATED: 16/12/2010). 4.1 THE LD. AR FURTHER POINTED OUT THAT DEC ISION OF THE ITAT IN AKRUTI DYEING & PRINTING MILLS PVT. LTD, HAS BEEN UPHELD B Y THE HONBLE HIGH COURT VIDE THEIR ORDER DATED 28/10/2009 IN TAX APPEAL NO.1218 OF 2008 . 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE ITAT IN THEIR DECISION DATED 26/10/2007 WHILE ADJUDICATING AN IDENTICAL ISSUE IN THE CASE OF AKRUTI DYEING & PRINTING MILLS PVT. LTD. IN ITA NO.2551 & 2752/AHD/ 2006 ,DELETED THE ADDITION, HOLDING AS UNDER: 18 THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT S HRI ROHIT PANWALA IN THE SEARCH CONDUCTED ON HIM ADMITTED OF HAVING I SSUED BOGUS / ACCOMMODATION BILLS IN THE NAMES OF VARIOUS PARTIES WHICH INCLUDED THE PARTIES FROM WHOM THE ASSESSEE HAD SHOWN THE PURCHA SES. HE SUBMITTED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIR MING THE ORDER OF THE A O MERELY ON THE GROUND THAT THE ASSESSEE HAS NOT ASKE D FOR CROSS EXAMINATION OF SHRI ROHIT PANWALLA. HE SUBMITTED TH AT SINCE THE ASSESSEE HAD MADE PAYMENT BY ACCOUNT PAYEE CHEQUE AGAINST TH E PURCHASES OF GOODS THE ADDITION BY TREATING THE PURCHASES AS BOG US WAS NOT JUSTIFIED. 19. THE LEARNED DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 20. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD WE FIND THAT A SEARCH OPERATION WAS CARRIED OUT ON SHRI ROHIT PANWALLA AND HIS ASSOCIATES AND OTHER PROCEEDINGS WERE ALSO TAKEN AG AINST THEM WHEREIN SHRI ROHIT PANWALLA STATED THAT HE USED TO PROVIDE ACCOMMODATION/FAKE BILLS AT THE REQUEST OF THE PARTIES. ON THE BASIS O F THIS, THE A O HAS TREATED THE PURCHASES MADE BY THE ASSESSEE FROM 3 PARTIES W HICH DO NOT'' INCLUDE ROHIT PANWALA FOR RS.7,21,950/- AS BOGUS. THE ASSES SEE CLAIMED THAT THE PAYMENTS TO THE PARTIES WERE MADE BY ACCOUNT PAYEE CHEQUES AND 8 ITA NOS.2994 & 3134/AHD/2008 8 AGAINST RECEIPT OF GOODS. WE FIND THAT THE REVENUE HAS BROUGHT NO MATERIAL ON' RECORD TO SHOW THAT THE PURCHASES SHOW N BY THE ASSESSEE FROM THE AFORESAID 3 PARTIES WERE NOT GENUINE AND W HERE ACCOMMODATION / FAKE BILLS SHOWN BY THE ASSESSEE. NO STATEMENT RECO RDED FROM THE ABOVE 3 PARTIES BY THE REVENUE WERE BROUGHT ON RECORD. WE F IND NO MATERIAL ON THE BASIS OF WHICH IT CAN BE ALLEGED THAT THE ABOVE PAR TIES ADMITTED THAT THE BILLS RAISED BY THEM AGAINST THE ASSESSEE WERE MERE LY ACCOMMODATION BILLS. IN THE ABOVE CIRCUMSTANCES THE DISALLOWANCE MADE BY THE REVENUE ON THE BASIS OF SURMISES AND CONJECTURES WITHOUT AN Y POSITIVE MATERIAL ON RECORD. THEREFORE, IN OUR CONSIDERED OPINION, THE D ISALLOWANCE MADE IS UNSUSTAINABLE. ACCORDINGLY, WE DELETE THE ADDITION MADE AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 5.1 THE AFORESAID DECISION OF THE ITAT IN AKRUTI DYEING & PRINTING MILLS PVT. LTD. WAS SUBSEQUENTLY FOLLOWED IN SHALU DYEING & PRINTING MILLS PVT. LTD.(SUPRA),DADA SILK MILLS (SUPRA), AND SUMAN SILK MILLS PVT. LTD. (SUPRA) AS ALSO IN SANGITA M PATEL IN ITA NO. 4320/AHD/2007, DATED:29/02/2 008 ; AVISHKAAR PROCESSING MILLS (P) LTD. IN ITA NOS. 3589,3590 & 3591/AHD/2008, DATED: 03/07/2009 & IN ITA NO.2687/AHD/2006, DATED:28/08 /2009, WHEREIN SIMILAR ADDITIONS WERE DELETED. IT MAY BE POINTED OUT THAT DECISION OF THE ITAT IN AKRUTI DYEING & PRINTING MILLS PVT. LTD. HA S BEEN UPHELD BY THE HONBLE HIGH COURT VIDE THEIR ORDER DATED 28/ 10/2009 IN TAX APPEAL NO.1218 OF 2008 WHEN IT WAS CONCLUDED THAT NO SUBSTANTIAL QUESTION OF LAW AROSE AND THAT THE TRIBUNAL ON APP RECIATION OF THE FACTS DECIDED THE ISSUE CORRECTLY. 5.2 IN THE CASE OF SUMAN SILK MILLS PV T. LTD. IN ITA NOS. 3794 & 3894/AHD./2008, A CO-ORDINATE BENCH IN THEIR ORDER DATED 16/12/2010, DEALT WITH AN IDENTICAL ISSUE EXH AUSTIVELY AS UNDER:- 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE ASSESSMENT ORDER PASSED BY THE AO IS VITIATED ON ACCOUNT OF VIOLATION OF PRINCIPLES OF N ATURAL JUSTICE. ONCE SHRI ROHIT PANWALA HAS STATED THROUGH AN AFFIDAVIT THAT HE IS RUNNING 12 CONCERNS AND OPERATING 12 BANK ACCOUNTS ISSUING BOG US BILLS TO VARIOUS PARTIES AND RETURNING CASH TO THEM AND ON THAT BASI S ASSESSMENT OF THE ASSESSEE IS REOPENED UNDER SECTION 147 THEN IT WAS NECESSARY FOR THE AO 9 ITA NOS.2994 & 3134/AHD/2008 9 TO OFFER SHRI ROHIT PANWALA FOR CROSS-EXAMINATION B Y THE ASSESSEE. SINCE ROHIT PANWALA IS THE WITNESS OF THE REVENUE THE ONU S LIES ON THE REVENUE TO ENFORCE HIS ATTENDANCE AND ALLOW THE ASSESSEE TO CROSS-EXAMINE HIM. MERELY ISSUING SUMMONS BY THE AO TO ROHIT PANWALA I S NOT ENOUGH TO DISCHARGE THE ONUS WHICH HAS TO BE ENSURED THAT ROH IT PANWALA ATTENDS HIS OFFICE AND ASSESSEE ATTENDS HIS OFFICE AND HE I S OFFERED FOR CROSS- EXAMINATION BY THE ASSESSEE. THE ENTIRE CASE OF THE REVENUE REVOLVES AROUND THE STATEMENT OF ROHIT PANWALA. SINCE NO CRO SS EXAMINATION OF ROHIT PANWALA IS ALLOWED TO THE ASSESSEE THEN HIS S TATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANNOT BE READ IN EVIDENCE AGAINST HIM. IN THIS REGARD WE REFER TO THE DECISION OF HON. SUPREME COU RT IN THE CASE OF KISHINCHAND CHELARAM VS. CIT (1980) 125 ITR 713 (SC ) WHEREIN IT IS HELD THAT OPPORTUNITY TO CONTROVERT SHOULD BE GIVEN TO T HE ASSESSEE. IN THIS REGARD WE REFER TO THE FOLLOWING HEAD NOTES FROM TH AT DECISION :- IT WAS TRUE THAT PROCEEDINGS UNDER THE INCOME-TAX LAW WERE NOT GOVERNED BY THE STRICT RULES OF EVIDENCE, AND, THER EFORE, IT MIGHT BE SAID THAT EVEN WITHOUT CALLING THE MANAGER OF THE B ANK IN EVIDENCE TO PROVE THE LETTER DATED FEBRUARY 18, 1955, IT COU LD BE TAKEN INTO ACCOUNT AS EVIDENCE. BUT BEFORE THE INCOME-TAX AUTH ORITIES COULD RELY UPON IT, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONTROVERT THE STATEMENTS C ONTAINED IN IT BY ASKING FOR AN OPPORTUNITY TO CROSS-EXAMINE THE MANA GER OF THE BANK WITH REFERENCE TO THE STATEMENTS MADE BY HIM. NOR W AS THERE ANY EXPLANATION REGARDING WHAT HAPPENED WHEN THE MANAGE R APPEARED IN OBEDIENCE TO THE SUMMONS REFERRED TO IN THE LETTER DATED MARCH 9, 1957, AND WHAT STATEMENT HE HAD MADE . 13. HONBLE DELHI HIGH COURT IN CIT VS. SMC SHARE B ROKERS LTD. (2007) 288 ITR 345 (DEL) HAS HELD THAT WHERE ASSESSEE HAS REQUESTED FOR PERMISSION TO CROSS-EXAMINE A PERSON SEARCHED AND S UCH CROSS- EXAMINATION WAS NOT ALLOWED THEN ORDER OF ASSESSMEN T WILL NOT BE VALID. IN THIS REGARD WE REFER TO THE FOLLOWING HEAD NOTES FR OM THAT DECISION:- A SEARCH WAS CARRIED OUT IN THE PREMISES OF ONE MA , A DIRECTOR OF A COMPANY. ON THE BASIS OF THE DOCUMENTS DISCOVERED A ND THE STATEMENTS OF MA, A BLOCK ASSESSMENT WAS MADE IN RE SPECT OF MA AND THE COMPANY ON AUGUST 29, 2002, UNDER THE PROVI SIONS OF SECTION 158BC OF THE INCOME-TAX ACT, 1961. SUBSEQUE NTLY, BLOCK ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE A SSESSEE AND COMPLETED ON NOVEMBER 28, 2004, UNDER THE PROVISION S OF SECTION 158BD OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSEE REQUESTED THE ASSESSING OFFICER TIME AND AGAIN TO P ERMIT IT TO CROSS- EXAMINE MA ON THE BASIS OF WHOSE STATEMENT PROCEEDI NGS HAD BEEN LAUNCHED AND FROM WHOSE POSSESSION THE DOCUMEN TS WERE RECOVERED, SO THAT THE ASSESSEE COULD PROVE ITS CAS E. THE REQUEST 10 ITA NOS.2994 & 3134/AHD/2008 10 WAS NOT ACCEDED TO BY THE ASSESSING OFFICER. THE TR IBUNAL HELD THAT THE ASSESSING OFFICER WAS FUNCTIONING AS A QUASI-JU DICIAL AUTHORITY AND WAS UNDER AN OBLIGATION TO ADHERE TO THE PRINCI PLES OF NATURAL JUSTICE. SEVERAL REQUESTS WERE MADE BY THE ASSESSEE , BUT MA WAS NOT MADE AVAILABLE FOR CROSS-EXAMINATION. ON THAT B ASIS, THE TRIBUNAL SET ASIDE THE BLOCK ASSESSMENT. ON APPEAL TO THE HIGH COURT : HELD,_ THAT THE TRIBUNAL WAS RIGHT IN ITS VIEW THAT IN THE ABSENCE OF MA BEING MADE AVAILABLE FOR CROSS-EXAMINATION, DESP ITE REPEATED REQUESTS BY THE ASSESSEE, HIS STATEMENT COULD NOT B E RELIED UPON TO ITS DETRIMENT. 14. IN CIT VS. C.F. JOHNSON (1996) 229 ITR 750 (KER ) ONE LESSEE HAD GIVEN AN AFFIDAVIT THAT HE PAID RS.10 LACS OF UNACC OUNTED MONEY TO THE LESSOR AND WAS OFFERED FOR ASSESSMENT. THE AO HAD S OUGHT TO ASSESS THIS SUM IN THE HANDS OF LESSOR WITHOUT GIVING HIM AN OP PORTUNITY TO CROSS EXAMINE THE LESSEE. HON. KERALA HIGH COURT HELD THA T SUCH ADDITION CANNOT BE MADE AS LESSEE WAS NOT PUT TO CROSS-EXAMINATION BY THE ASSESSEE. HON. KERALA HIGH COURT HELD AS UNDER :- HELD,_ THAT (I) WHETHER, IN VIEW OF THE SWORN STAT EMENT OF THE LESSEE THAT HE PAID RS.10 LAKHS TO THE ASSESSEE (LESSOR), THE TRIBUNAL WAS RIGHT IN HOLDING THAT THERE WAS NO MATERIAL ON RECO RD TO SHOW THAT THE ASSESSEE HAD RECEIVED RS. 10 LAKHS; (II) WHETHE R THE TRIBUNAL WAS RIGHT IN NOT INCLUDING THE SUM OF RS.10 LAKHS IN TH E HANDS OF THE ASSESSEE ON THE GROUND THAT THE LESSEE WAS NOT PUT TO CROSS EXAMINATION BY THE ASSESSEE; (III) WHETHER THE TRIB UNAL WAS RIGHT IN NOT REMITTING THE CASE TO THE ASSESSING AUTHORITY T O COMPLETE THE ASSESSMENT AFRESH AFTER GIVING THE ASSESSEE AN OPPO RTUNITY TO CROSS EXAMINE THE LESSEE; AND (IV) WHETHER, AS POSSESSION WAS ADMITTEDLY HANDED OVER AND IN VIEW OF SECTION 2(47)(V) OF THE INCOME-TAX ACT, 1961, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THERE WAS NO TRANSFER UNDER THE IMPUGNED AGREEMENT AND SO LEVY OF CAPITAL GAINS COULD NOT BE SUSTAINED, WERE QUESTIONS OF LAW TO BE REFER RED. 15. IN ITO VS. ABHISHEK ISPAT (P) LTD. IN ITA NO.27 09/AHD/2008 ASST. YEAR 2005-06 PRONOUNCED ON 30.9.2010 THE STATEMENT OF ONE SHRI PRAJAPATI AGAINST THE ASSESSEE WAS DIRECTED TO BE I GNORED BECAUSE HE WAS NOT OFFERED FOR CROSS-EXAMINATION BY THE ASSESSEE. THE TRIBUNAL FOLLOWED THE DECISION OF HON. SUPREME COURT IN KISHINCHAND C HELARAM (SUPRA) 16. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THERE IS VIOLATION OF NATURAL JUSTICE AND, THEREFORE, ADDITION CANNOT BE MADE ON THE BASIS OF SUCH STATEMENT OF ROHIT PANWALA ALONE. WE ACCEPT TH E ARGUMENTS OF LD. AR THAT ALL THE CONCERNS FROM WHOM ASSESSEE HAS SHO WN TO HAVE MADE PURCHASES OF COLOUR AND CHEMICALS ARE OWNED BY DIFF ERENT PERSONS. IT WAS 11 ITA NOS.2994 & 3134/AHD/2008 11 INCUMBENT ON THE AO TO CALL THESE PERSONS OR PROVE THAT THEY WERE NON- EXISTENT. IF THERE ARE SOME EXISTING OWNERS OF THES E CONCERNS THEN THEIR STATEMENTS SHOULD HAVE BEEN RECORDED AND THESE PERS ONS SHOULD HAVE ALSO BEEN OFFERED FOR CROSS-EXAMINATION. THE STATEM ENT OF ANY OTHER PERSON CLAIMING TO BE THE OWNER OF THESE CONCERNS A PPLYING TO THE FACTS OF ASSESSEES CASE CANNOT BE BLINDLY RELIED UPON WITHO UT CONFRONTING THE OSTENSIBLE OWNER. SINCE NO ENQUIRY/INVESTIGATION HA S BEEN CARRIED OUT INTO THE EXISTENCE OF OSTENSIBLE OWNER THE RELIANCE OF T HE AO MERELY ON THE STATEMENT OF ROHIT PANWALA IS VITIATED. 17. EVEN ON FACTS, IT IS NOT ESTABLISHED THAT ASSES SEE DOES NOT REQUIRE COLOUR /CHEMICALS TO THE EXTENT IT HAS SHOWN TO BE CONSUMED. NO TECHNICAL OR COMPARATIVE DATA IS BROUGHT INTO RECORD TO SHOW THAT ASSESSEE IN FACT DID NOT REQUIRE COLOUR AND CHEMICALS TO THE EXTENT IT HAS SHOWN THE PURCHASES AND, THEREFORE, THERE IS NO PERSUASIVE SP AN IN THE ARGUMENT THAT THESE PURCHASES ARE BOGUS . 18. WE ALSO NOTICE THAT THIS ASSESSEE HAS BEEN SHOW ING PURCHASES FROM THESE CONCERNS IN THE PAST AND IT HAS BEEN ACC EPTED BY THE DEPARTMENT AS SUCH. IF GP DECLARED BY THE ASSESSEE IN CURRENT YEAR IS BETTER AS COMPARED TO GP RATE IN THE IMMEDIATELY PR ECEDING YEAR WHEN SIMILAR CIRCUMSTANCES EXISTED AND WHERE APPARENT ST ATE OF AFFAIRS OF STATEMENT HAS BEEN ACCEPTED THEN THERE IS NO REASON TO DISTURB SUCH STATE OF AFFAIRS THIS YEAR. 19. THE PRINCIPLES LAID DOWN IN VIJAY PROTEINS CASE CANNOT BE APPLIED WITHOUT COMPARING THE FACTS OF THE TWO CASES. IN VI JAY PROTEINS CASE THERE WERE CASH PURCHASES AND PARTIES WERE NOT TRACEABLE WHEREAS IN THE PRESENT CASE PURCHASES WERE MADE THROUGH ACCOUNT PA YEE CHEQUES AND THERE IS NO EVIDENCE THAT CASH WAS IN FACT RETURNED TO THE ASSESSEE. FURTHER THOSE PARTIES ARE EXISTING AND THEY HAVE NO T BEEN SUMMONED OR EXAMINED. IN OTHER CASES THIS TRIBUNAL HAS DISTINGU ISHED THE DECISION IN VIJAY PROTEINS CASE AS UNDER :- IN THIS REGARD WE REFER TO THE DECISION OF THE TRI BUNAL IN ITA NO.558/AHD/2008 ASST. YEAR 2003-04 IN THE CASE OF S HRI MOHMED AKHTAR ABDULLAHCHAKKIWALA VS. ACIT AND OTHERS, PRON OUNCED ON 29.10.10 WHEREIN THE RATIO OF THE DECISION OF THE T RIBUNAL IN VIJAY PROTEINS LTD. (SUPRA) WAS DISTINGUISHED AS UNDER :- FURTHER THE DECISION OF THE TRIBUNAL IN VIJAY PROT EINS (SUPRA) SHOULD HAVE BEEN CONSIDERED IN PROPER PERSPECTIVE. IT SHOU LD NOT BE APPLIED IN A ROUTINE MANNER. ONLY IN THOSE CASES WH ERE PAYMENTS FOR PURCHASES ARE MADE IN CASH AND PURCHASERS ARE N OT TRACEABLE THEN CERTAIN PERCENTAGE OF SUCH PURCHASES CAN BE DI SALLOWED. HOWEVER, WHERE PAYMENTS ARE MADE BY ACCOUNT PAYEE C HEQUES THEN THE DECISION IN VIJAY PROTEINS (SUPRA) MAY NOT BE APPLICABLE. 12 ITA NOS.2994 & 3134/AHD/2008 12 FURTHER IN AN ANOTHER JUDGMENT OF THE TRIBUNAL IN I TA NOS.4097 & 4098/AHD/2007 ASST. YEAR 2003-04 IN THE CASE OF ACI T, CIR.6, SURAT VS. M/S S. NILESHKUMAR & CO., PRONOUNCED ON 19.11.10 TH E DECISION IN THE CASE OF VIJAY PROTEINS LTD. (SUPRA) HAS BEEN DI STINGUISHED AS UNDER :- 9. WE AGREE WITH THE LD. AR THAT FOR INVOKING THE DECISION OF THE TRIBUNAL IN VIJAY PROTEINS LTD. VS. ACIT (SUPRA) IT IS NECESSARY TO SHOW THAT PURCHASES ARE MADE BY THE ASSESSEE IN CASH AND THE CONCERNED SELLERS ARE NOT TRACEABLE. FOR THE SAKE O F CONVENIENCE WE REPRODUCE THE RELEVANT PARA FROM THE DECISION IN THE CASE OF VIJAY PROTEINS LTD. VS. ACIT (SUPRA) AS UNDER :- 19.3 IT IS WELL KNOWN THAT IF PURCHASES ARE MADE F ROM OPEN MARKET WITHOUT INSISTING FOR THE GENUINE BILLS, THE SUPPLI ERS MAY BE WILLING TO SELL THOSE PRODUCTS AT A MUCH LOWER RATE AS COMPARE D TO THE RATE WHICH THEY MAY CHARGE IN CASE THE DEALER HAS TO GIV E A GENUINE SALE INVOICE IN RESPECT OF THAT SALE AND SUPPLY THE GOODS. THERE MAY BE VARIOUS FACTORS DUE TO WHICH THERE IS BOUND TO B E A SUBSTANTIAL DIFFERENCE BETWEEN THE PURCHASE PRICE OF UNACCOUNTE D MATERIAL AND RATE OF PURCHASE OF ACCOUNTED FOR GOODS. THERE MAY BE A SAVING ON ACCOUNT OF SALES TAX AND OTHER TAXES AND DUTIES WHICH MAY BE LEVIABLE IN RESPECT OF MANUFACTURE OR SALE O F GOODS IN QUESTION. THE SUPPLIERS OR THE MANUFACTURERS MAKE A SUBSTANTIAL SAVING IN THE INCOME TAX IN RESPECT OF INCOME FROM SALE OF UNACCOUNTED GOODS PRODUCED AND SOLD BY THEM. THIS M AY ALSO BE ONE OF THE FACTORS DUE TO WHICH THE SELLER MAY BE W ILLING TO CHARGE LOWER RATES FOR UNACCOUNTED GOODS AS COMPARED TO AC COUNTED FOR GOODS. KEEPING ALL THESE FACTORS IN MIND AND ALSO K EEPING IN VIEW THE DECISION OF THE ITAT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES (SUPRA) WE HOLD THAT 25% OF THE PURCHASE PRICE ACCO UNTED FOR IN THE BOOKS OF ACCOUNTS THROUGH SUCH FICTITIOUS INVOICES IN THE NAME OF 33 BOGUS PARTIES SHOULD BE DISALLOWED OUT OF THE AMOUN T OF PURCHASES SHOWN TO HAVE BEEN MADE FROM THOSE 33 BOGUS SUPPLIE RS. SINCE PAYMENTS IN THE PRESENT CASE ARE MADE BY ACCO UNT PAYEE CHEQUES AND THE THREE PARTIES ARE IDENTIFIABLE THE RATIO OF THE DECISION IN VIJAY PROTEINS WILL NOT BE APPLICABLE. THE ONLY INFERENCE FROM ENTIRE SET OF FACTS CAN BE FOUND THAT ACCOUNTS OF THE ASSESSEE ARE NOT RELIABLE AND, THEREFORE, PROVISIONS OF SECT ION 145(3) CAN BE INVOKED. 20. EVEN NON-AVAILABILITY OF SELLER IS NOT SACROSAN CT IDEA TO HOLD THAT PURCHASES ARE BOGUS. ASSESSMENT PROCEEDINGS AR E UNDERTAKEN AFTER A YEAR OR TWO OF THE TRANSACTION AND NO ASSES SEE CAN TAKE 13 ITA NOS.2994 & 3134/AHD/2008 13 GUARANTEE THAT SELLER WOULD BE AVAILABLE AT THE GIV EN ADDRESS. ONCE PAYMENTS ARE MADE THROUGH ACCOUNT PAYEE CHEQUE S IT WAS REQUIRED TO ENQUIRE INTO AS TO WHOM THE PAYMENTS HA D FINALLY GONE, WHO IS IN CONTROL OF THAT BANK ACCOUNT, WHETHER MON EY WAS WITHDRAWN IMMEDIATELY AND WHETHER ASSESSEE WAS THE BENEFICIARY OF SUCH WITHDRAWAL; WHAT ARE THE GOODS ASSESSEE HAS PURCHASED, WHETHER THEY ARE REQUIRED IN THE BUSINESS OF THE AS SESSEE AND IF YES, TO WHAT EXTENT AND WHETHER SUCH PURCHASES ARE SUPER FLUOUS IN THE SENSE THAT EITHER THEY COULD NOT BE REQUIRED IN THE BUSINESS OR THEY ARE HIGHLY INFLATED. FURTHER IF THE PARTY IS NOT TR ACEABLE AND OWNERSHIP OF BANK ACCOUNT IS HIGHLY SUSPICIOUS AND CAN BE TRACED TO THE ASSESSEE THEN UNDER SUCH CIRCUMSTANCES ENTIR E PURCHASES NEEDED TO BE DISALLOWED. PURCHASES FROM ONE PARTY I N ONE INSTALMENT CANNOT BE PARTLY GENUINE OR PARTLY BOGUS . EVEN OTHERWISE FOR HOLDING THAT IT COULD BE PARTLY GENUINE AND PAR TLY BOGUS, LOT OF MATERIAL IS REQUIRED TO BE PLACED ON RECORD SO AS T O SHOW THE INFLATION OF PURCHASES AND RECEIPT OF MONEY BACK BY THE ASSESSEE IN ONE FORM OR THE OTHER. IN ANY CASE IT COULD HAVE BE EN A REASONABLE CASE TO DISALLOW ENTIRE PURCHASES IF PARTY IS NOT R EALLY TRACEABLE AND BANK ACCOUNT TO WHICH PAYMENT FROM THE ASSESSEE HAS GONE IS DIRECTLY OR INDIRECTLY RELATED TO THE ASSESSEE. WIT HOUT THERE BEING ANY MATERIAL TO THIS EFFECT AND FURTHER AO HAVING NOT R EJECTED THE BOOKS NO ADDITION COULD BE MADE BY THE AO. ACCORDINGLY, W E DECLINE TO INTERFERE AND REJECT THIS GROUND OF REVENUE. IN VIEW OF THIS WE HOLD THAT LD. CIT(A) WAS NOT JUS TIFIED IN APPLYING THE PRINCIPLES OF VIJAY PROTEINS CASE. 20. IN SIMILAR CIRCUMSTANCES THE TRIBUNAL HAS DELET ED THE ADDITION IN THE CASE OF AKRUTI DYEING & PRINTING MILLS (P) LTD. VS. ACIT (SUPRA) AS RELIED ON BY THE LD. AR WHICH HAS ALSO BEEN PRACTICALLY AFFIR MED BY HON. GUJARAT HIGH COURT AS REFERRED TO ABOVE. THEN THERE IS NO R EASON TO MAKE ANY ADDITION IN THE CASE OF THE PRESENT ASSESSEE SOLELY ON THE GROUND OF STATEMENT OF ROHIT PANWALA. SIMILAR VIEW HAS BEEN T AKEN BY THE TRIBUNAL IN OTHER THREE CASES AS REFERRED TO ABOVE. 21. MERELY ON THE STRENGTH OF STATEMENT OF ROHIT PA NWALA IT CANNOT BE HELD THAT PURCHASES ARE BOGUS. THE DECISION OF HON. GUJARAT HIGH COURT IN ACIT VS. M. K. BROS. (SUPRA) IS RELEVANT TO THE POI NT AS UNDER :- DURING THE ACCOUNTING YEAR RELATING TO ASSESSMENT YEAR 1971-72, THE ASSESSEE HAD MADE PURCHASES OF THE TOTAL VALUE OF RS. 52,254 FROM CERTAIN PARTIES. THE INCOME-TAX OFFICER REQUIR ED THE ASSESSEE TO PRODUCE EVIDENCE REGARDING THE PURCHASES. IN THE ME ANTIME, THE SAID PARTIES HAD ADMITTED TO THE SALES TAX AUTHORIT IES THAT THEY HAD ISSUED BOGUS VOUCHERS. THE INCOME-TAX OFFICER HELD THAT THE PURCHASES WERE NOT GENUINE AND ASSESSED THE AMOUNT OF RS. 52,254 14 ITA NOS.2994 & 3134/AHD/2008 14 AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE TRIBUNAL FOUND THAT THERE WAS NO EVIDENCE TO SHOW THAT BOGUS VOUCHERS HAD BEEN ISSUED TO THE ASSESSEE, THAT NOTHING HAD BEEN SHOWN TO INDICATE THAT ANY PART OF THE FUNDS GIVEN BY THE AS SESSEE TO THESE PARTIES CAME BACK TO THE ASSESSEE IN ANY FORM, AND THAT THE ASSESSEE HAD MADE ITS PAYMENTS BY CHEQUE. THE TRIBU NAL DELETED THE ADDITION. ON A REFERENCE: HELD,_ THAT THE CONCLUSION ARRIVED AT BY THE TRIBUN AL WAS SUPPORTED BY THE EVIDENCE ON RECORD. THE AMOUNT OF RS. 52,254 WAS NOT ASSESSABLE AS INCOME FROM UNDISCLOSED SOURCES AND T HE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION. 22. IN VIEW OF THE FOREGOING DISCUSSIONS, WE HOLD T HAT NO ADDITION IS LEGALLY SUSTAINABLE IN THE PRESENT CASE. THE APPEAL OF REVENUE IS DISMISSED AND THAT OF THE ASSESSEE IS ALLOWED. 5.3 IN THE LIGHT OF CONSISTENT VIEW TAKEN IN THE AFORECITED DECISIONS, ESPECIALLY WHEN THE REVENUE HAVE NOT BROUGHT TO OUR NOTICE ANY CONTRARY DECISION NOR PLACED BEFORE US ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE HAVE NO ALTERNATIVE BUT TO ALLOW THE CLAIM OF THE ASSESSEE IN ITS ENTIRETY. CONSEQUENTLY, GROUND NO. 1 IN THE APPEAL OF THE REVENUE IS DISMIS SED WHILE THAT IN THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. AS REGARDS GROUND NO.2 IN THE APPEAL OF THE REVE NUE, THE LD. CIT(A) DELETED THE AMOUNT OF RS. 11,142/-,THERE BEI NG NO EVIDENCE THAT THIS AMOUNT WAS PAID BY THE ASSESSEE TO SHRI PANWAL A . EVEN BEFORE US, THE LD. DR DID NOT PLACE ANY MATERIAL IN SUPPORT OF TH EIR GROUND. IN THE ABSENCE OF ANY MATERIAL ,WE ARE NOT INCLINED TO INT ERFERE. THEREFORE, GROUND NO.2 IN THE APPEAL OF THE REVENUE IS ALSO DI SMISSED. 7. GROUND NOS. 3 AND 4 IN THE APPEAL OF THE REVEN UE, BEING MERE PRAYER NOR ANY SUBMISSIONS HAVING BEEN MADE ON THES E GROUNDS, DO NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDI TIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL OF THE ASSESSEE, ALL THESE GROUNDS ARE D ISMISSED. 15 ITA NOS.2994 & 3134/AHD/2008 15 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D WHILE THAT OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 17-06-2011 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 17 -06-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S RAJLAXMI PRINTS PVT. LTD., 246/1, GIDC, PAND ESARA, SURAT 2. ACIT, CIRCLE-4, SURAT 3. CIT CONCERNED 4. CIT(A)-III, SURAT 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD