ITO, Jaipur V. PARMANAD SHARMA, Jaipur

ITA 319/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5274 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAGHUVIR SINGH DUGAR
• Assessee Lawyers: M L BORAD DHK
• Keywords: Unexplained cash credit; Rejection of books of accounts
• Section: 40A(3); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 319/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE INCOME TAX OFFICER, WARD 7(3), JAIPUR. CUKE VS. SHRI PARMANAND SHARMA, PROP. M/S. ADITYA STEEL CORPORATION, 19, LOHA MANDI, MACHEDA, NEAR ROAD NO. 14, VKI AREA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGXPS 0396 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DUGAR (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI M.L.BORAD (ADVOCATE) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.05.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 3/06/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS)- 3, JAIPUR DATED 27.01.2014 PERTAINING TO A.Y. 2011- 12. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) THE LD.CIT (A) HAS UPHELD THE REJECTION OF BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) BUT GP RATE REDUCED FROM 2. 39% TO 1.50% AND DELETED THE TRADING ADDITION OF RS. 28,26 ,523/- WITHOUT CONSIDERING THE REASONS GIVEN BY THE AO. (II) THE LD.CIT (A) HAS DELETED ADDITION OF RS. 3,50,000 /- MADE BY THE AO U/S 68 BY RELYING ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. GK CONTRACTOR (20 09) 19 DTR 305 (RAJ.). HOWEVER, THE ADDITIONS MADE U/S 68 IN T HIS CASE RELATE TO UNSECURED LOANS FROM PARTIES AND NOT TRAD E CREDITORS OR MARKET OUTSTANDINGS, AND FURTHER NO CONFIRMATIONS FROM THESE PARTIES WERE PRODUCED. 2 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ASSESSMENT UNDER SECTION 14 3(3) OF THE IT ACT (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED THEREBY THE AO R EJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND APPLIED GP @ 2.39% TAKING AVERAGE OF TWO EARLIER YEARS ON GROSS TURNOVER. HENCE THE AO MADE TRADING ADDITION OF RS . 35,85,474/-. FURTHER, THE AO MADE ADDITION OF RS. 3,50,000/- IN RESPECT OF UNEXP LAINED CASH CREDITS, APART FROM SMALL DISALLOWANCES BY INVOKING THE PROVISIONS OF S ECTION 40A(3) OF RS. 34,306/- AND OTHER ADHOC DISALLOWANCES. THE ASSESSEE AGGRIEVED BY THIS ORDER, PREFERRED APPEAL BEFORE LD. CIT (A). THE LD. CIT (A) AFTER CONSIDER ING THE SUBMISSIONS, PARTLY ALLOWED THE APPEAL. WHILE PARTLY ALLOWING THE APPEAL, THE L D. CIT (A) UPHELD THE REJECTION OF BOOKS OF ACCOUNTS. HE, HOWEVER, ESTIMATED GROSS PRO FIT @ 1.5% IN PLACE OF 2.39%. THE LD. CIT (A) ALSO DELETED THE ADDITION MADE ON A CCOUNT OF CASH CREDIT OF RS. 3,50,000/-. 3. THE REVENUE AGGRIEVED BY THIS ORDER, IS IN APPEA L. THE FIRST GROUND IS AGAINST REDUCING THE TRADING ADDITION FROM RS. 35,85,474/- TO RS. 7,58,951/-. 3.1. THE LD. SENIOR D/R SUBMITTED THAT LD. CIT (A) WAS NOT JUSTIFIED IN REDUCING THE GROSS PROFIT RATE. THE LD. D/R SUBMITTED THAT LD. C IT (A) HAS UPHELD THE REJECTION OF BOOKS OF ACCOUNT AND FAILED TO APPRECIATE THE FACT THAT THE AO HAS TAKEN AVERAGE OF TWO EARLIER YEARS AND APPLIED THE GROSS PROFIT RATE AT 2.39%. THE ESTIMATION MADE BY LD. CIT (A) IS NOT CORRECT AND CONTRARY TO THE MATE RIAL PLACED ON RECORD. 3.2. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS AS MADE IN THE SYNOPSIS AND SUBMITTED THAT THE AO H AS FAILED TO APPRECIATE THE FACT THAT IN THE CURRENT YEAR THERE IS INCREASE IN THE G ROSS TURNOVER AND SAME CANNOT BE COMPARED WITH THE RATE OF EARLIER YEARS AS THE PROF IT RATIO VARIES FROM YEAR TO YEAR 3 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. AND IS DEPENDENT UPON VARIOUS FACTORS. THE LD. COU NSEL SUBMITTED THAT IN THE AGE OF TOUGH COMPETITION THE ASSESSEE AS A BUSINESS STRATE GY, HAS REDUCED THE MARGIN WHICH RESULTED INTO INCREASE IN THE TURNOVER. AS TH E MARGINS ARE DECREASED, NATURAL CONSEQUENCE WOULD BE LESSER PROFIT RATIO. THEREFOR E, HE SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN ADOPTING THE GROSS PROFIT AT 2.39% . 3.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND ORDERS OF AUTHORITIES BELOW. THE LD. CIT (A) WHILE DECIDIN G THIS ISSUE HAS GIVEN FINDING OF FACT IN PARA 4.6 OF HIS ORDER AS UNDER :- 4.6. I HAVE CAREFULLY CONSIDERED THE FINDINGS OF T HE AO AS ALSO THE SUBMISSION OF THE APPELLANT. IT MAY BE NOTED THAT T HE AO HAS REJECTED BOOKS OF ACCOUNTS BY APPLYING PROVISIONS OF SEC. 14 5(3) OF IT ACT AND AFTER REJECTION OF BOOKS OF ACCOUNTS HAS APPLIED GP RATE OF 2.39% WHICH IS THE AVERAGE GP RATE OF IMMEDIATELY PRECEDI NG TWO A.YS I.E. 2009-10 AND 2010-11 BEING 2.48% AND 2.3% AS AGAINST GP RATE SHOWN BY THE ASSESSEE AT 1.26%. THE AOS CASE IS TH AT THE ASSESSEE IS DEALING IN IRON SHEETS, MS PIPES ETC. HAS NOT MAINT AINED QUANTITATIVE AND QUALITATIVE DETAILS IN RESPECT OF DIFFERENT SIZ E, DIFFERENT THICKNESS AND DIFFERENT GAZE OF STOCK. AS PER AO THE STOCK WA S MAINTAINED WEIGHT WISE AND NOT ON THE BASIS OF DIFFERENT QUALI TY WISE. THE AO ALSO NOTICED THAT THE PURCHASES WERE SHOWN LESS BY RS. 6 9604/- AS ALSO THAT THE ASSESSEE HAS NOT VALUED THE STOCK AT COST OR MA RKET PRICE WHICHEVER IS LOWER. AS PER AO THE MARKET PRICE/SELL ING PRICE AT THE END OF THE YEAR WAS RS. 48.80/KG AND COST PRICE WAS AT RS. 43/KG. BUT THE ASSESSEE HAS VALUED THE STOCK OF SEEDS @ RS. 46.78/ KG. AND THAT AS PER THE METHOD OF VALUATION OF STOCK, THE RATE SHOU LD BE RS. 43/KG. WHICH WAS THE LOWER OF SELLING PRICE AND THE COST P RICE. ON THE OTHER HAND THE APPELLANT CASE IS THAT THE STOCK REGISTER WAS MAINTAINED WEIGHT WISE IN KGM. AND THAT IT WAS NOT PRACTICABLE TO MAINTAIN THE STOCK REGISTER ON THE BASIS OF DIFFERENT SIZES, DIF FERENT GAZES ETC. IT IS FURTHER STATED THAT THE BOOKS OF ACCOUNTS OF THE AS SESSEE ARE AUDITED U/S 44AB OF IT ACT AND THE AUDITORS HAVE GIVEN QUAN TITATIVE DETAILS AS REQUIRED BY CLAUSE 28( B) OF FORM NO. 3 CD AND NO M ISTAKE IS POINTED OUT BY THE AUDITORS. AS REGARDS THE DIFFERENCE IN P URCHASES, IT IS STATED THAT SUCH DIFFERENCE WAS ONLY 0.02% OF THE TOTAL PU RCHASES AND BEING NOMINAL MAY NOT BE A BASIS FOR REJECTION OF BOOK OF ACCOUNTS. AS REGARDS VALUATION OF CLOSING STOCK, THE APPELLANT R EFERRED TO ACCOUNTING STANDARD-2 (VALUATION OF INVENTORY) AND THAT AS PER SUCH ACCOUNTING STANDARD, THE COST OF INVENTORIES SHOULD COMPRISE A LL COST OF PURCHASE, COST OF CONVERSION AND OTHER COST. AS PER ASSESSEE THE AVERAGE METHOD 4 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. IS A FORMULA TO CALCULATE THE COST OF INVENTORY AND NOT THE VALUATION METHOD. THE APPELLANT ALSO CONTENDED THAT NON-MAINT ENANCE OF STOCK REGISTER ON DAY TO DAY BASIS MAY NOT LEAD TO THE IN FERENCE THAT THE BOOKS OF ACCOUNTS ARE NOT CORRECT AND TRUE INCOME O F THE ASSESSEE WAS NOT POSSIBLE FROM SUCH BOOKS OF ACCOUNTS. AS PER TH E APPELLANT SIMPLY ABSENCE OF STOCK REGISTER OF QUALITY WISE OF STOCK MAY NOT BE A BASIS FOR REJECTION OF BOOKS OF ACCOUNTS UNLESS CERTAIN F ALSITY IS DETECTED IN THE BOOKS OF ACCOUNTS. THEREFORE THE APPELLANT DISP UTED THE REJECTION OF THE BOOKS OF ACCOUNTS. AS REGARDS ESTIMATION OF PROFITS, THE APPELLANTS CONTENTION IS THAT THE RATE OF GROSS PR OFIT DEPENDENT ON MANY FACTORS INCLUDING MARKET CONDITIONS AND WITH T HE INCREASE OR DECREASE IN THE COST OF MATERIAL, VALUE OF SALES AS ALSO TRADING EXPENSES, THE GP RATE WILL SHOW COMMENSURATE CHANGE S. IN THIS BACKBGROUND, IT IS STATED THAT THE SALES OF THE ASS ESSEE HAVE INCREASED TO RS. 31.76 CRORES APPROXIMATELY IN ASSESSMENT YEA R UNDER CONSIDERATION AS COMPARED TO SALE OF RS. 10.98 CROR ES APPROXIMATELY IN A.Y. 2010-11 AND THAT NO ACHIEVE SUCH HIGHER TURNOV ER THE ASSESSEE ADOPTED POLICY OF LOW MARGIN WHICH RESULTED INTO GP RATE. THE APPELLANT ALSO FILED DETAILS IN RESPECT OF SALES AN D PURCHASES ON RANDOM BASIS WHICH INDICATED THAT THE GP RATE DURING THIS F.Y. IN DIFFERENT MONTHS VARIED BETWEEN 0.78% TO 1.66% AND THAT THE A VERAGE RATE OF GP WAS 1.25%. IT WAS ACCORDINGLY CLAIMED THAT THE E STIMATION OF PROFIT BY APPLYING HIGHER GP RATE WAS ALSO NOT JUSTIFIED. ON CAREFUL CONSIDERATION OF ALL RELEVANT FACTS, IT MAY BE MENT IONED THAT THE PROVISIONS OF SEC. 145(3) CAN BE APPLIED WHEN THE B OOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NOT CORRECT OR COMPL ETE OR WHERE THE METHOD OF ACCOUNTING PROVIDED IN SUB SEC. (1) OR TH E ACCOUNTING STANDARD NOTIFIED UNDER SUB SEC. 2 ARE NOT REGULARL Y FOLLOWED. IN THE APPELLANT CASE THE AO HAS REJECTED BOOKS OF ACCOUNT S BY OBSERVING THAT THE SAME ARE NOT CORRECT AND COMPLETE AND THAT TRUE PROFIT CANNOT BE DEDUCED FROM SUCH BOOKS OF ACCOUNTS. IN THIS CO NNECTION AS REGARDS THE OBJECTION OF THE AO THAT STOCK REGISTER IN RESPECT OF DIFFERENT SIZE, THICKNESS AND GAZE OF M.S. PIPES AN D IRON SHEETS ETC. WAS NOT MAINTAINED, IT MAY BE MENTIONED THAT THE AS SESSEE HAS MAINTAINED SUCH STOCK REGISTER ON WEIGHT WISE AND S UCH PROCEDURAL DEFICIENCY IN ITSELF DID NOT INDICATED ANY INCORREC TNESS OR INCOMPLETENESS OF THE BOOKS OF ACCOUNTS. IN FACT EV EN AS PER THE ACCOUNTING STANDARD THE ASSESSEE IS NOT REQUIRED TO MAINTAIN SUCH RECORDS. THE STATUTORY AUDITOR HAS ALSO NOT POINTED OUT ANY INACCURACY IN RESPECT OF QUANTITATIVE DETAILS REQUIRED IN FORM NO. 3 CD. AS REGARDS THE OTHER OBJECTION OF THE AO THAT THE CLOS ING STOCK HAS NOT BEEN VALUED AS PER THE PRESCRIBED STANDARDS, THE FA CT IS THAT THE ASSESSEE HAS VALUED THE STOCK ON THE AVERAGE COST P RICE BEING RS. 46.78 PER KG AND IN FACT IF AS PER THE AOS VERSION THE STOCK WOULD HAVE VALUED @ 43 PER KGS. I.E. COST PRICE THAN THE DECLARED PROFIT WOULD HAVE BEEN MUCH LESS. THEREFORE EVEN THIS OBJE CTION MAY NOT BE A VALID BASIS FOR REJECTION OF BOOKS OF ACCOUNTS. H OWEVER, THE FACT THAT 5 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. THE PURCHASES WERE SHOWN LESS BY RS. 69604/- IS NOT DISPUTED BY THE ASSESSEE AND THIS FACT INDICATED THAT THE BOOKS OF ACCOUNTS ARE NOT CORRECT AND COMPLETE. THEREFORE PROVISIONS OF SEC. 145(3) WERE APPLICABLE IN THE CASE OF THE ASSESSEE. AS REGARDS THE ESTIMATION OF PROFITS AFTER REJECTIO N OF BOOKS OF ACCOUNTS, IT IS A SETTLED LAW THAT EVEN AFTER INVOK ING THE PROVISIONS OF SEC. 145(3), THE AO IS NOT EMPOWERED TO ASSESS THE INCOME AT WHATEVER FIGURES HE WANTS AND THE AO IS SUPPOSED TO MAKE AN HONEST ESTIMATION EITHER BASED ON THE PAST HISTORY OF THE APPELLANTS OWN CASE OR ON THE BASIS OF ANY COMPARABLE CASE AND TAKING I NTO CONSIDERATION OTHER RELEVANT FACTS. IN THIS CONNECTION IT MAY BE NOTED THAT THOUGH THE ASSESSEE HAS APPLIED GP RATE OF 2.39% ON THE BASIS OF AVERAGE RATE OF GP SHOWN IN AY 2009-10 AND 2010-11 BUT THE FACT IS THAT THE TURNOVER OF THE ASSESSEE IN ASSESSMENT YEAR UNDER CONSIDERAT ION HAS INCREASED TO 37.76 CRORES AS AGAINST RS. 10.98 CRORES IN AY 2 010-11 AND RS. 7.42 CRORES IN AY 2009-10. THE FACT THAT WITH THE INCREA SE IN TURNOVER/SALES DECLINE IN GP RATE IS EXPECTED IS ALSO SUPPORTED FR OM THE FOLLOWING DECISIONS OF HONBLE JURISDICTIONAL ITAT JODHPUR RE LIED UPON BY THE APPELLANT. I. ITO VS. ARUN KUMAR GUPTA, 103 TTJ 134 (JD) II. MADAN LAL VS. INCOME TAX OFFICER, 99 TTJ 538 (JD) IT IS ALSO FACT THAT THE ASSESSEE HAS REDUCED THE P ROFIT MARGIN DURING THE ASSESSMENT YEAR UNDER CONSIDERATION TO ACHIEVE THE HIGHER SALES OF THE TURNOVER AND THESE FACTS WERE ALSO BEFORE THE A O. IT IS ALSO FACT THAT THE APPELLANT HAS FURNISHED PURCHASE AND SALE BILLS ON RANDOM BASIS INDICATING THAT THE PROFIT RATE VARIED BETWEE N 9.78% TO 1.67% AND THESE FACTS WERE ALSO BEFORE THE AO. THE AO HAS NOT POINTED OUT ANY FALSITY IN SUCH CLAIM. MOREOVER THE REGULAR BOO KS OF ACCOUNTS WERE ALSO BEFORE THE AO AT THE TIME OF ASSESSMENT PROCEE DINGS AND IT IS NOT THE CASE THAT GP RATE OF 2.38% WAS EVIDENCED FROM T HE BOOKS OF ACCOUNTS. THE FACT THAT THE SALES OF THE ASSESSEE I NCREASED TO RS. 31.76 CRORES AS COMPARE TO 10.98 CRORES IN THE IMME DIATE PRECEDING YEAR AS ALSO THE CONTENTION OF THE ASSESSEE THAT FO R INCREASING THE SALES GP RATE WAS REDUCED CAN NOT BE DOUBTED OR FAU LTED. KEEPING IN VIEW THE TOTALITY OF FACTS, IT WILL BE FAIR AND REA SONABLE TO APPLY GP RATE OF 1.50% ON THE TOTAL TURNOVER OF RS. 317586765/- A ND ACCORDINGLY GP IS DETERMINED AT RS. 4763801/- AS AGAINST RS. 40048 50/-. THE TRADING ADDITION TO THE EXTENT OF RS. 758951/- IS CONFIRMED . THE APPELLANT GETS RELIEF OF RS. 2826523/-. THE GROUND OF APPEAL IS PARTLY ALLOWED. 6 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. THIS FINDING OF FACT IS NOT CONTROVERTED BY THE REV ENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THE REVENUE HAS NOT DISPUTED T HE FACT THAT IN THE YEAR UNDER APPEAL THERE IS INCREASE IN THE SALES AND THE MARGI N AS STATED BY THE ASSESSEE IS NOT REBUTTED BY THE REVENUE BY BRINGING ANY MATERIAL W HICH SUGGEST THAT THE MARGIN AS CLAIMED BY THE ASSESSEE IS NOT CORRECT. IN THE AB SENCE OF SUCH FINDING, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD. D/R THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN REDUCING THE RATE OF GROSS PROFIT. THE GROUND R AISED BY THE REVENUE IS DEVOID OF ANY MERIT, HENCE REJECTED. 4. GROUND NO. 2 IS AGAINST DELETION OF ADDITION OF RS. 3,50,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS. 4.1. THE LD. D/R SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. THE LD. D/R SUBMITTED THAT THE JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. G.K. CONTRACT OR, 19 DTR 305 (RAJ.) AS RELIED ON BY THE LD. CIT (A) IS NOT APPLICABLE ON THE FACTS O F THE PRESENT CASE AS THE ADDITIONS MADE UNDER SECTION 68 IN THE CASE UNDER APPEAL RELA TED TO UNSECURED LOANS FROM PARTIES AND NOT TRADE CREDITORS OR MARKET OUTSTANDI NGS. THE LD. D/R SUBMITTED THAT NO CONFIRMATIONS FROM SUCH PARTIES WERE FURNISHED B Y THE ASSESSEE. 4.2. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS ARE MADE IN THE WRITTEN SUBMISSIONS. THE LD. COUNSE L SUBMITTED THAT WHEN THE AO HAS ALREADY MADE ESTIMATION OF PROFIT, SEPARATE ADD ITION IS NOT JUSTIFIED. 4.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. THE AO HAS NOTED THAT THE ASSESSEE IN THE BALANCE SHEET CLAIMED UNSECURED LOA NS FROM M/S. B.K. INDUSTRIES FOR RS. 2,50,000/- AND M/S. POOJA STEELS FOR RS. 1,00,0 00/- BUT NO CONFIRMATION WAS 7 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. FURNISHED. THE LD. CIT (A) DELETED THE ADDITION BY OBSERVING THAT WHEN PROFIT HAS BEEN ESTIMATED BY APPLYING A PARTICULAR GP RATE, NO FURTHER ADDITION CAN BE MADE BY PLACING RELIANCE ON THE JUDGMENT OF HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS. G.K. CONTRACTOR (SUPRA). THE JUDGMENT AS RELIED ON BY THE LD. CIT (A) PERTAINS TO THE BUSINESS OUTSTANDINGS. FROM THE PAP ER BOOK AS FILED, IN ANNEXURE-B TO FORM NO. 3 CD, IT IS STATED THAT THE LOAN FROM M /S. B.K. INDUSTRIES IS OF RS. 2,50,000/-. HOWEVER, IN RESPECT OF M/S. POOJA STEEL S, RS. 1,00,000/- ALSO TREATED AS LOAN. THERE IS NO MATERIAL AVAILABLE ON RECORD SUG GESTING THAT THESE AMOUNTS WERE TREATED AS ADVANCES AND RELATED TO ANY SALES OR PUR CHASES. THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THAT SUCH LOANS/CREDITS WER E RELATED TO BUSINESS/TRADE OF THE ASSESSEE. IN THE ABSENCE OF SUCH MATERIAL, TRE ATING THE SAME AS TRADE ADVANCE WOULD NOT BE CORRECT. HENCE THE RATIO AS LAID BY TH E HONBLE JURISDICTIONAL HIGH COURT WOULD NOT HELP THE ASSESSEE. ACCORDINGLY THIS GROUN D OF REVENUES APPEAL IS ALLOWED AND THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE. THE ADDITION MADE THE AO ON THIS ISSUE IS SUSTAINED 5. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3/06/2016. SD/- SD/- VH-VKJ-EHUK] ( DQY HKKJR ) ( T.R. MEENA) ( KUL BHART ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 3/06/2016. DAS/ 8 ITA NO. 319/JP/2015 ITO VS. SHRI PARMANAND SHARMA. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO WARD 7(3), JAIPUR. 2. THE RESPONDENT- SHRI PARMANAND SHARMA, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 319/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR