The ITO, Ward-4(3), Surat V. M/s. Sushma Synthetics Pvt.Ltd., Surat

ITA 3158/AHD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57369 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-01-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 23-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.3158/AHD/2007: A. Y.: 2002-03 THE INCOME TAX OFFICER, WARD -4(3), SURAT, ROOM NO.220, 2 ND FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS M/S. SUSHMA SYNTHETICS PVT. LTD., 602, TRIBEDH CHAMBERS, RING ROAD, SURAT PA NO. AADCS 3478 E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. GUPTA, CIT DR RESPONDENT BY SHRI RAMESH MALPANI, AR DATE OF HEARING: 18-1-2012 DATE OF PRONOUNCEMENT: 27-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-III, S URAT DATED 25-05-2007 FOR ASSESSMENT YEAR 2002-03 IN APPEAL NO.CAS-III/22 /05-06, CHALLENGING THE DELETION OF ADDITION OF RS.1,74,72, 369/- MADE BY THE AO ON ACCOUNT OF UNACCOUNTED SALES. 2. THE FACTS IN BRIEF, ARE THAT THE ASSESSEE COMPAN Y IS ENGAGED IN THE WEAVING OF GREY CLOTH AS 100% EXPORT ORIENTED U NIT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN GROSS P ROFIT OF RS.16,99,059/- @ 3.63% ON TOTAL TURNOVER OF RS.4,68 ,14,435/- AS AGAINST GROSS PROFIT OF RS.9,70,110/- @ 1.12% ON TOTAL TURN OVER OF RS.8,68,10,921/- SHOWN IN THE PRECEDING ASSESSMENT YEAR. THE ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 2 ASSESSEE CLAIMED TO HAVE MANUFACTURED THE CLOTH OF AVERAGE 21 KGS. PER 100 MTRS. QUALITY FOR WHICH YEAR CONSUMED WAS O F AVERAGE 23.34 KGS. PER 100 MTRS. THE DIFFERENCE WAS THE NORMAL SH ORTAGE ON ACCOUNT OF WASTAGE/REJECTION. THE AO DURING THE COURSE OF A SSESSMENT PROCEEDINGS CARRIED OUT DETAILED INQUIRIES AND ARRI VED AT THE CONCLUSION THAT THE AVERAGE QUALITY OF THE CLOTH MANUFACTURED BY THE ASSESSEE WAS 6.50 KGS. PER 100 MTRS. AND NOT OF 21 KGS. PER 100 MTRS. AS CLAIMED BY THE ASSESSEE. AS PER THE AO IT WAS NOT POSSIBLE TO MANUFACTURE THE QUALITY OF 21 KGS. PER 100 MTRS. ON THE ORDINARY WE AVING MACHINES/POWER LOOMS USED BY THE ASSESSEE AND THERE FORE, THE AO WAS OF THE VIEW THAT THE YARN CONSUMED BY THE ASSESSEE FOR MANUFACTURING THE CLOTH WAS 6.50 KGS. PER 100 MTRS. ONLY AND REMA INING YARN WAS SOLD BY THE ASSESSEE WITHOUT RECORDING THE SAME IN THE B OOKS OF ACCOUNTS. ACCORDINGLY, THE AO RE-WORKED THE SALES OF THE ASSE SSEE AND ESTIMATED THE SAME AT RS.6,42,86,804/- AS AGAINST RS.4,68,14, 435/- SHOWN BY THE ASSESSEE AND MADE THE ADDITION OF RS.1,74,72,369/- ON ACCOUNT OF UNACCOUNTED SALES/INCOME OUTSIDE THE BOOKS. THE WHO LE ADDITION HAS BEEN MADE BY ASSUMING THE QUALITY OF GREY CLOTH MAN UFACTURED BY THE ASSESSEE TO BE OF 6.50 KGS. PER 100 MTRS. ON THE BA SIS THAT ONE OF THE PURCHASERS M/S. MAHALAXMI PROCESSORS IT HAD RECEIVE D THE GREY CLOTH QUALITY OF NOT MORE THAN 6.50 KGS. PER 100 MTRS. FR OM THE ASSESSEE AS AGAINST QUALITY OF 22 24 KGS. PER 100 MTRS. SHOWN BY THE ASSESSEE AND HAD ISSUED DEBIT NOTE ON THE ASSESSEE IN RESPECT OF THIS QUALITY DIFFERENCE. AS PER BOOKS OF ACCOUNTS OF THE ASSESSE E THERE WAS DEBIT BALANCE OF RS.1,60,06,928/- IN THE ACCOUNT OF THE A BOVE PARTY, WHEREAS IN CROSS EXAMINATION IT WAS NOTICED BY THE AO THAT M/S. MAHALAXMI PROCESSORS WAS ALSO SHOW THE DEBIT BALANCE OF RS.1, 07,00,639/- IN THE ACCOUNT OF THE ASSESSEE AND IN THIS WAY THE AO NOT ICED THAT THE PARTIES WERE SHOWING DEBIT BALANCE TO BE RECEIVED FROM EACH OTHER. ON FURTHER ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 3 INVESTIGATION OF THE DETAILS SUPPLIED BY THE ASSESS EE, THE AO NOTICED THAT THE ABOVE PAYMENTS WERE CLEARED FROM BANK ACCOUNT O F MAHALAXMI PROCESSORS WITH THE CENTURY CO-OPERATIVE BANK LTD. AND IN THE SAID BANK ACCOUNT OF M/S. MAHALAXMI PROCESSORS THE AMOUN TS WERE TRANSFERRED FROM ANOTHER ACCOUNT IN THE NAME OF M/S . TRISHUL FABRICS AND AGAINST THE AMOUNTS SO TRANSFERRED FROM THE ACCOUNT OF M/S. TRISHUAL FABRICS TO THE ACCOUNT OF M/S. MAHALAXMI PROCESSORS CHEQUES GIVEN TO THE ASSESSEE WERE CLEARED. ON VERIFICATION OF THE A CCOUNT OF M/S. TRISHUL FABRICS IT WAS NOTICED BY THE AO THAT THE BANK MANA GER HIMSELF INTRODUCED THE ACCOUNT WITH A REMARK KNOWN TO BANK MR. PRAMOD/KANSAL GROUP. THE AO EXAMINED THE BANK MANA GER U/S 131 OF THE IT ACT AND THE BANK MANAGER STATED THAT HE KNEW MR. PRAMOD KANSAL WHO IS DIRECTOR OF THE ASSESSEE COMPANY AND THIS ACCOUNT WAS OPENED ON A REQUEST OF SAID SHRI PRAMOD KANSAL. THE AO ALSO CARRIED OUT INQUIRIES IN RESPECT OF THIS BANK ACCOUNT TO FI ND OUT ASSESSEES LINK WITH THE SAID ACCOUNT. IT WAS MENTIONED BY HIM THAT ON TWO CHEQUES ISSUED FROM THIS ACCOUNT TO A PARTY IN THE NAME OF M/S. KRISHNA TRADING CO. ON THE BACK SIDE OF THE CHEQUES THE WORD KANSA L WAS WRITTEN. ON THE BASIS OF THIS EVIDENCE THE AO REACHED THE CONCL USION THAT THE SAID ACCOUNT WAS OPENED AT THE INSTANCE OF THE ASSESSEE TO SETTLE THE ACCOUNT WITH MAHALAXMI PROCESSORS AND TOOK THE VIEW THAT THE QUALITY PRODUCED BY THE ASSESSEE WAS OF 6.5 KGS/100 MTRS. A ND THE REMAINING YEARN WAS SOLD IN THE GREY MARKET IN CASH AND THE M ONEY SO RECEIVED WAS DEPOSITED IN THE BANK ACCOUNT OF M/S. TRISHUL F ABRICS AND THEN TRANSFERRED IN THE BANK ACCOUNT OF M/S. MAHALAXMI P ROCESSORS AND FROM THERE IT WAS RECEIVED AGAINST OUTSTANDING BALANCE O F THE SAID PARTY. 2.1 IN RESPECT OF OTHER PURCHASER M/S. DEVYANI PROC ESSORS PVT. LTD. (DPPL), THE PARTY HAS FURNISHED CONFIRMATION OF ACC OUNT BUT FAILED TO ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 4 FURNISH THE QUALITY WISE AND WEIGHT WISE DETAILS OF GREY CLOTH RECEIVED BY IT FROM THE ASSESSEE COMPANY. THE AO, THEREFORE, ASKED THE ASSESSEE TO FURNISH THE DETAILS OF THE VEHICLE BY WHICH THE GOODS WERE TRANSPORTED TO THIS PARTY FROM SURAT TO JETPUR. ON THE BASIS OF DETAILS FURNISHED, THE AO CARRIED OUT ENQUIRES AND FOUND THAT THE TRANSPOR TERS DENIED HAVING TRANSPORTED ANY GOODS OF THE ASSESSEE COMPANY FROM SURAT TO JETPUR. THE AO ALSO CARRIED OUT ENQUIRIES WITH THE EXCISE A UTHORITIES AND FOUND THAT ONE SHRI RANCHHODBHAI CHOVATIA, DIRECTOR OF TH E ABOVE PURCHASER WAS EXAMINED BY THE EXCISE AUTHORITIES ON OATH ON 1 2-02-2001 WHEREIN HE STATED THAT THEY HAD DISPATCHED THE GOODS ON PAP ER AND IN FACT NO TRANSPORTATION OF GOODS TOOK PLACE. 2.3 THE LEARNED AO RELIED UPON TWO CERTIFICATES ISS UED BY MANTRA AND REACHED THE CONCLUSION THAT IN THE ORDINARY WEAVING MACHINES AS IS USED BY THE ASSESSEE, IT WAS NOT POSSIBLE TO MANUFACTURE THE QUALITY OF 21 KGS/100 MTRS. THE LEARNED AO ALSO COMPARED MANUFACT URING EXPENSES OF THE ASSESSEE WITH TWO OTHER WEAVING UNITS NAMELY M/S. SUNIL TEXTILES AND M/S.R.J. RESHAMWALA AND FOUND THAT THE MANUFACT URING EXPENSES OF THE ASSESSEE ARE MUCH LESS THAN THOSE UNITS WHIC H PROVES THAT THE ASSESSEES BOOKS OF ACCOUNTS WERE NOT RELIABLE THE AVERAGE WAGES COST OF THE ASSESSEE WAS RE.0.53 PER MTR. AS AGAINST RS. 3.52 AND RS.3.06 SHOWN BY THESE TWO PARTIES. THEREFORE, THE AO REJEC TED THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(2) OF THE IT ACT A ND ESTIMATED AND REWORKED THE ACTUAL SALES OF THE ASSESSEE AT RS.6,4 2,86,804/-. HE ACCORDINGLY, MADE THE ADDITION OF RS.1,74,72,369/- TO THE INCOME OF THE ASSESSEE. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). THE ASSESSEE OFFERED DETAILED SUBMISSIONS ALONG WIT H PAPER BOOK. THE LEARNED CIT(A) PROVIDED THE COPY OF THE SAME TO TH E AO ASKING FOR ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 5 REMAND REPORT. IN THE REMAND REPORT DATED 17-01-20 07, THE AO MENTIONED THAT IN FY 2000- 2001, THE QUALITY MANUFA CTURED BY THE ASSESSEE WAS 20KGS/100 MTRS. AND THE SAME WAS ACCEP TED. IN RESPECT OF MAHALAXMI PROCESSORS THE AO REPORTED THAT THE QU ALITIES SOLD TO THIS PARTY WAS ALSO OF SAME RANGE. IN RESPECT OF BANK AC COUNT OF M/S. TRISHUL FABRICS THE AO COULD NOT POINT OUT ANY CONNECTION O F THE ASSESSEE WITH THE TRANSACTION IN THE SAID BANK ACCOUNT EXCEPT REI TERATING THE THINGS WHICH ARE MENTIONED IN THE ASSESSMENT ORDER. THE AO ALSO POINTED OUT A CASE AGAINST THE ASSESSEE GROUP BY THE EXCISE DEP ARTMENT PERTAINED TO FY 1999-2000. IN RESPONSE TO THAT IT WAS ARGUED BY THE ASSESSEE THAT THE ADJUDICATION ORDER PASSED BY THE EXCISE AU THORITY HAS ALREADY BEEN SET ASIDE BY THE CESAT AND THE CASE PERTAINED TO FY 1999-2000 WHICH WAS MUCH PRIOR TO THE YEAR UNDER APPEAL AND H AS NO RELEVANCE WITH THE YEAR UNDER APPEAL. NOTHING ADVERSE WAS FOU ND BY THE AO BY THE INQUIRIES WITH EXCISE DEPARTMENT IN RESPECT OF YEAR UNDER APPEAL. 3.1 THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALONG WITH RELEVANT RECORDS AND THE REMAND REPORT O F THE AO DELETED THE ADDITION. HIS FINDINGS IN THE APPELLATE ORDER ARE R EPRODUCED AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS AND HAVE GONE THR OUGH THE DETAILS FURNISHED BY THE APPELLANT AND THE REMA ND REPORTS OF THE AO. IT IS SEEN THAT DURING THE ASSESSMENT PROCE EDINGS WELL AS THE REMAND PROCEEDINGS THE AO COULD NOT ESTABLISH A NY LINK OF THE APPELLANT WITH ANY OF THE TRANSACTIONS IN THE BANK ACCOUNT OF M/S. TRISHUL FABRICS. THE WORD 'KANSAL' WRITTEN ON THE B ACK SIDE OF THE CHEQUES DOES NOT ESTABLISH APPELLANTS LINK WITH TH E BANK ACCOUNT NOR WITH THE MONEYS DEPOSITED IN THE SAID ACCOUNT. THE APPELLANT RECEIVED THE PAYMENTS FROM THE BANK ACCOUNT OF M/S. MAHALAXMI PROCESSORS ONLY. IT IS NOT THE CASE OF THE AO THAT THE CHEQUES ISSUED BY M/S MAHALAXMI PROCESSORS FROM THIS ACCOUN T TO THE APPELLANT WERE NOT SIGNED BY THE PROPRIETOR OF THAT CONCERN. THEREFORE, IT CANNOT BE SAID THAT THE UNACCOUNTED S ALE PROCEEDS OF THE APPELLANT WERE DEPOSITED IN THIS BANK ACCOUNT A ND WERE TRANSFERRED TO M/S. MAHALAXMI PROCESSORS. THE AO HA D TO PROVE ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 6 THIS FACT CONCLUSIVELY. IT CANNOT ALSO BE PROVED TH AT THE ACCOUNT WAS OPENED AT THE INSTANCE OF THE APPELLANT MERELY ON THE BASIS OF STATEMENT OF THE BANK MANAGER WHOSE OWN CONDUCT IS DOUBTFUL. IT IS ALSO SEEN THAT M'S. MAHALAXMI PROCESSORS SIGNED THE DELIVERY DOCUMENTS ON EACH & EVERY OCCASION. I AM INCLINED T O AGREE WITH THE APPELLANT THAT A PERSON COULD BE CHEATED ONCE O R TWICE BUT NOT FOR 20 TIMES OR MORE BY DELIVERING POOR QUALITY OF GOODS. THE STAND OF THE PROPRIETOR OF M/S. MAHALAXMI PROCESSORS THAT HE WAS ACTUALLY TO RECEIVE SUCH A HUGE AMOUNT IN THE FORM OF DEBIT NOTES ALLEGEDLY RAISED BY HIM, CANNOT BE BELIEVED SINCE H E WOULD HAVE DEFINITELY TAKEN SOME LEGAL ACTION FOR THE RECOVERY OF SUCH A HUGE AMOUNT. EVEN DURING THE CROSS-EXAMINATION, HE COULD NOT GIVE A REPLY TO THE QUESTION OF THE APPELLANT IN THIS REGA RD AND SUBSEQUENT LETTER FILED BY HIM CANNOT BE TAKEN AS EVIDENCE. TH EREFORE THE STAND OF M/S. MAHALAXMI PROCESSORS ABOUT THE QUALIT Y OF GOODS RECEIVED BY HIM CANNOT BE ACCEPTED, MORE SO SINCE H E HAD RECEIVED SIMILAR QUALITY OF GOODS FROM THE APPELLAN T IN EARLIER YEARS ALSO. AS REGARDS THE CERTIFICATE FROM 'MANTRA', IT IS SEEN THAT THE SAME INSTITUTION HAS CERTIFIED THAT QUALITY OF 20 T O 24 KGS. WAS FEASIBLE ON THE MACHINES OF THE APPELLANT. THIS CER TIFICATE WAS GIVEN BY PHYSICALLY INSPECTED THE MACHINERY WHEREAS THE CERTIFICATE OBTAINED BY THE AO WAS NOT BASED ON THE INSPECTION OF MACHINES AND MACHINERY MANUFACTURER HAS ALSO GIVEN A CERTIFICATE IN FAVOUR OF THE APPELLANT FURTHER, IN EARLIER YEARS SIMILAR QUALITY MANUFACTURED BY THE APPELLANT WAS ALSO ACCEPTED BY THE DEPARTMENT AND THEREFORE THE AO'S OBSERVATION THAT THE QUALITY OF 25 KGMS. PER HUNDRED METERS WAS NOT POSSIBLE IS NOT BASED ON CORRECT APPRECIATION OF FACTS REGARDING SALES TO DP PL, THE TWO EMPLOYEES OF THE TRANSPORT COMPANY ADMITTED THE FAC T THAT THEY WERE NOT FULLY AWARE ABOUT THE ENTIRE WORKING OF TH E TRANSPORT VEHICLES AND WERE CONCERNED ONLY WITH THE OPERATION AT THE KOSAMBA BRANCH OF THE TRANSPORT COMPANY. IT: IS ALS O NOT DISPUTED THAT THE TRUCKS WERE USED TO TRANSPORT APPELLANT'S GOODS FROM MUMBAI TO SURAT. THE APPELLANT HAD FURNISHED LIST O F ABOUT 200 TRANSPORT VEHICLES BY WHICH GOODS WERE DELIVERED TO DPPL AND THE ENTIRE SALE CANNOT BE DOUBTED ONLY IF THREE OF THE VEHICLES WERE THREE WHEELERS. THE SALES OF THE APPELLANT WERE EX- FACTORY AND IT IS QUITE LIKELY THESE THREE WHEELERS WERE USED BY BUYE RS FOR COLLECTING GOODS FROM DIFFERENT PARTIES. THE STATEMENT OF THE DIRECTOR OF DPPL WAS RECORDED IN EARLIER YEAR AND RELATES TO TH AT PARTY AND THERE IS NOTHING AGAINST THE APPELLANT IN THE SAID STATEMENT. FURTHER THE STATUTORY REGISTERS MAINTAINED BY THE APPELLANT AND FORM NO. 'AR-3A' SIGNED BY PURCHASING PARTIES SUPPORTS THE A PPELLANT'S ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 7 CONTENTION THAT THE QUALITY MANUFACTURED AND SOLD W AS OF AVERAGE 21 KGMS. PER HUNDRED METERS. THE QUANTITATIVE DETAI LS OF PURCHASE PRODUCTION AND SALES ARE RECORDED IN THESE REGISTER S MONITORED BY THE EXCISE DEPARTMENT AND THERE IS NO FINDING OF UN ACCOUNTED SALES BY THE AO. THE APPELLANT'S UNIT WAS THE HUNDR ED PER CENT EXPORT ORIENTED UNIT UNDER THE MONITORING OF THE DI RECTOR GENERAL OF FOREIGN TRADE AND EXCISE. AUTHORITIES AND THEREFORE IT IS VERY UNLIKELY THAT SUCH POOR QUALITY OF MATERIAL WOULD B E MANUFACTURED BY HIM YEAR AFTER YEAR. IT IS ALSO IMPORTANT TO NOT E THAT IN THE APPELLANT'S LINE OF BUSINESS 10% WASTAGE IS CONSIDE RED NORMAL ACCEPTED IN THE EXIM POLICY ALSO AND IF THE VERSION OF M/S. MAHALAXMI PROCESSORS IS ACCEPTED AND DEDUCTION BE A LLOWED TO THE APPELLANT ON ACCOUNT OF SO CALLED DEBIT NOTES R AISED BY M/S. MAHALAXMI PROCESSORS OUT OF SALES, THE INCOME OF TH E APPELLANT WOULD BE LOWER THAN THE INCOME AS PER APPELLANT'S A CCOUNT. IT IS FURTHER SEEN THAT THE MANAGER OF THE BANK WAS NOT A RELIABLE WITNESS AND OPENED THE BATIK ACCOUNT BY FLOUTING AL L THE NORMS AND GUIDELINES ISSUED BY THE PJRI WHILE OPENING A NEW A CCOUNT AND HAS SIMPLY IMPLICATED THE APPELLANT FOR REASONS BES T KNOWN TO HIM. THE EVIDENCE OF THE TWO STAFF MEMBERS OF THE TRANSP ORT COMPANY CAN ALSO NOT BE RELIED UPON, SINCE DURING CROSS-EXA MINATION THEY HAVE ALSO RETRACTED THE ORIGINAL STATEMENT. I AM TH EREFORE OF THE VIEW THAT THE STATEMENT OF MAHALAXMI PROCESSORS CAN NOT BE RELIED UPON, SINCE HE WAS TRYING TO IMPLICATE THE APPELLAN T FOR SOME OF HIS OWN FAULTS AND COULD NOT REPLY TO THE REGARDING AS TO WHY HE DID NOT INITIATE ANY PROCEEDINGS FOR RECOVERY OF SO CAL LED AND UNILATERAL DEBIT NOTES OF SUCH A HUGE AMOUNT AND THEREFORE THE AOS ACTION IN MAKING THE ADDITION ON ACCOUNT OF SO CALLED UNAC COUNTED SALES IS NOT IN ORDER AND THE SAME IS HEREBY DIRECTED TO BE DELETED. 4. THE REVENUE IS IN APPEAL BEING AGGRIEVED OF THE ABOVE FINDINGS OF THE LEARNED CIT(A). 5. BEFORE US, THE LEARNED DR SUPPORTED THE ORDER OF THE AO. ON THE OTHER HAND, THE LEARNED AR REITERATED HIS SUBMISSIO N MADE BEFORE THE LEARNED CIT(A). 5.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE PAPER BOOK SUBMITTED BY THE ASSESSEE AND CITATIONS RELIED UPON BY BOTH THE PARTIES. IN THE SUBSEQUENT REMAND REPORT OF THE LEARNED AO, IT HAS ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 8 BEEN CATEGORICALLY MENTIONED THAT THE QUALITY MANUF ACTURED BY THE ASSESSEE WAS 20KGS PER 100 MTRS., AND ONLY SUCH QU ALITY OF MATERIALS WERE SOLD TO M/S. MAHALAXMI PROCESSORS. FURTHER, NO LINK COULD BE ESTABLISHED SUBSTANTIALLY BY THE REVENUE BETWEEN M/ S. TRISHULA FABRICS AND THE ASSESSEE. CERTAIN IRREGULARITIES COMMITTED BY THE BANK MANAGER HAD ALSO COME TO LIGHT; THEREFORE, THE STATEMENT OF THE BANK MANAGER CANNOT BE COMPLETELY RELIED UPON. THE DISCREPANCIES POINTED BY THE EXCISE AUTHORITIES WERE RELATED TO FINANCIAL YEAR 1 999-2000 AND THAT CASE WAS ALSO SET ASIDE BY CESAT AND NO OTHER ADVER SE FINDINGS WAS POINTED OUT BY THE EXCISE AUTHORITIES AGAINST THE A SSESSEE. THE SUBSEQUENT CERTIFICATE FROM MANTRA ALSO CLEARLY E STABLISHES THAT THE MACHINERY POSSESSED BY THE APPELLANT WAS CAPABLE OF PRODUCING 20 TO 24 KGS. PER 100 MTRS. OF FABRICS. FURTHER, IT WAS A LSO ESTABLISHED THAT THE CONCERNED TRANSPORT COMPANIES HAD TRANSPORTED THE G OODS OF THE ASSESSEE. ONLY IN CERTAIN CASES IT WAS FOUND THAT T HE GOODS OF THE ASSESSEE WAS TRANSPORTED BY AUTO RICKSHAWS BY WHICH IT CANNOT BE CONCLUSIVELY PROVED THAT THE ASSESSEE HAD NOT TRANS PORTED SUCH GOODS. CONSIDERING THE ABOVE FACTS, WE HAVE NO HESITATION TO CONCUR WITH THE ORDER OF THE LEARNED CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 DAY O F MARCH, 2012 SD/- SD/- (D.K.TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT DEKA/ DEKA/ DEKA/ DEKA/- -- - ITA NO.3158/AHD/2007 (AY 2002-03): ITO, W-4(3), SUR AT VS M/S. SUSHMA SYNTHETICS PVT. LTD. 9 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, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD