A.C.I.T.,Circle-3(1), Gwalior V. Sh. Vipin Kumar Agarwal, Guna

ITA 323/AGR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9958 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJARSHI DWIVEDYCIT
• Keywords: Unexplained cash credit; Rule of consistency
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 461/AGRA/2015 ASSESSMENT YEAR : 2012-13 THE ACIT, VS SHRI VIPIN KUMAR AGARWAL, CIRCLE 3, PROP. M/S V.S.FOOD PRODUCTS, GWALIOR. 19, LAXMI BAI COLONY, GUNA (MP). PAN: AEMPA6727L & ITA NO. 323/AGRA/2014 ASSESSMENT YEAR : 2011-12 THE ACIT, VS SHRI VIPIN KUMAR AGARWAL, CIRCLE 3(1), 19, M/S V.S.FOOD PRODUCTS, GWALIOR. LAXMI GANJ, GUNA (MP). PAN: AEMPA6727L & ITA NO. 462/AGRA/2015 ASSESSMENT YEAR : 2012-13 THE ACIT, VS SHRI SHAILENDRA KUMAR AGARW AL, CIRCLE 3, PROP. M/S SHAILENDRA KUMAR & GWALIOR. BROTH ERS, SHASTRI PARK ROAD, LAXMI GANJ, GUNA. PAN: AAWPA6030C & ITA NO. 322/AGRA/2014 ASSESSMENT YEAR : 2011-12 THE ACIT, VS SHRI SHAILENDRA KUMAR AGARW AL, CIRCLE 3(1), LAXMI GANJ, SHASTRI PARK ROAD GWALIOR. GUNA . PAN: AAWPA6030C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJARSHI DWIVEDY,CIT- DR RESPONDENT BY : SHRI RAJINDRA SHARMA, ADVOCATE C/O SHRI VIJAY WARGIAYA DATE OF HEARING : 08.02.2016 DATE OF PRONOUNCEMENT : 25.02.2016 2 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OF ALL THE DEPARTMENTAL APPEALS FILED IN THE CASES OF TWO ASSESSEES ON IDEN TICAL QUESTIONS. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. BOTH THE PARTIES MAINLY ARGUED IN THE CASE OF IT A 461/2015 IN THE CASE OF THE ASSESSEE SHRI VIPIN KUM AR AGARWAL AND SUBMITTED THAT ISSUE IS SAME IN THE REMAINING APPEALS, THEREFORE, ORDER IN THE CASE OF SHRI VIPIN KUMAR AGARWAL MAY BE FOLLOWED IN OTHER APPEAL S OF THE DEPARTMENT. WE, THEREFORE, PROCEED TO DECID E THE DEPARTMENTAL APPEAL IN THE CASE OF SHRI VIPIN KUMAR AGARWAL IN ITA 461/2015. ITA 461/2015 : ( VIPIN KUMAR AGARWAL ) 4. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), GWALIOR DATED 12.06. 2015 FOR ASSESSMENT YEAR 2012-13 CHALLENGING THE ORDER O F LD. CIT(APPEALS) IN DELETING THE ADDITION OF RS. 2,43,99,263/- ON ACCOUNT OF UN-VERIFIABLE PURCHASES UNDER CHUKARA REGISTER EVEN THOUGH ASSESSEE DID NOT PRODUCE THE KARAR PATRA AND ALSO DID NOT MAINTAIN S TOCK REGISTER. 3 5. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER MADE ADDITION OF RS. 2.43 CR OF CHUKARA KHA TE JAMA NOT ACCEPTING THE CONTENTION OF THE ASSESSEE. HE DISCUSSED THIS ISSUE IN DETAIL IN ASSESSMENT ORDER AND IN PARA 4 OF THE ASSESSMENT ORDER NOTED THAT ASSESS EE HAS ACCEPTED THAT NO STOCK REGISTER IS MAINTAINED. FROM BOOKS OF ACCOUNT, IT IS NOT POSSIBLE TO CHECK THE D AILY POSITION OF PURCHASE AND SALE OF DIFFERENT ITEMS AN D THE STOCK IN HAND ON A PARTICULAR DATE. THEREFORE, PUR CHASE AND SALE MAY NOT BE FULLY VERIFIED. THE ASSESSEE H AS FAILED TO PRODUCE PRIMARY EVIDENCE OF PURCHASE IN T HE FORM OF KARAR PATRA BY WHICH GRAIN IS PURCHASED F ROM FARMER IN MANDI SAMITI. THIS VOUCHER CONTAINS NAME AND COMPLETE ADDRESS OF THE FARMER, ITEM, RATE, QUA NTITY AND TOTAL AMOUNT PAID WITH HAMMALI ETC. IN THE ABS ENCE OF THE VOUCHERS, IT MAY NOT BE ASCERTAINED, WHETHER THE ITEM CLAIMED TO HAVE BEEN PURCHASED, QUANTITY OF G RAIN, RATE ON WHICH PURCHASE IS MADE. IT MAY ALSO NOT BE CHECKED HOW MUCH QUANTITY IS PURCHASED THROUGH MAND I SAMITI AND OTHERWISE. BY PAYING MANDI TAX, IT DOES NOT PROVE THAT ALL PURCHASES ARE GENUINE. THE ASSESSEE HAS NOT FILED ANY EVIDENCE THAT SAME PERSON IS HAVING AGRICULTURE LAND AT DIFFERENT VILLAGES. NO AUTHORI TY IS FILED THAT ONE PERSON IS AUTHORIZED TO COLLECT MONE Y ON BEHALF OF OTHERS. VARIOUS SIGNATURES AS OBSERVED I N CHUKARA REGISTER APPEAR TO HAVE BEEN MADE BY A FEW PERSONS IN DIFFERENT STYLES. THE ASSESSEE HAS ACCE PTED THAT HE HAS NOT MAINTAINED SEPARATE DETAILS FOR TRA DING 4 TRANSACTIONS AND COMMISSION TRANSACTIONS. THEREFOR E, IT IS NOT VERIFIABLE. THE ASSESSEE HAS SUBMITTED THAT CHUKARA REGISTER IS MAINTAINED ON THE BASIS OF KARA R PATRA BUT HE HAS NOT KEPT THE SAME. THE ASSESSEE RECORDS ENTRY IN THIS CHUKARA REGISTER. IN THE ABS ENCE OF ANY THIRD PARTY EVIDENCE, THE ENTRIES IN THE CHU KARA REGISTER ARE NOT VERIFIABLE. THE ASSESSEE HAS MAINTAINED CHUKARA REGISTER DATE-WISE. ALL THE PAYMENTS TO THE FARMERS ARE MADE ON THE SAME DAY ON WHICH THE PURCHASES ARE SHOWN. AT SOME PLACES, ASSESSEE HAS CLAIMED THAT THIS PAYMENT WAS NOT MADE ON THE SAME DAY AND ON A LATER DATE, THE PAYMENT WA S MADE. THE FARMERS HAVE NOT MENTIONED THE DATE ON WHICH THE PAYMENT WAS MADE TO THEM. THEREFORE, GENUINENESS OF THE PURCHASES AND PAYMENT IS NOT VERIFIABLE AT ALL. 5(I) THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM, THEREFORE, IT SHOULD BE OPEN TO SHOW THE PAYMENT IN NEXT YEAR. THE ASSESSING OFFICER, ACCORDINGLY, MADE THE ADDITION OF RS. 2,43,99,263/- SHOWN AS CHUKARA KHAT A JAMA ( RS. 2,19,88,512/- + RS. 24,10,751/- ). 6. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSESSEE IS QUOTED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT MERE NON-MAINTENANCE OF STOC K REGISTER IS NOT CONCLUSIVE FOR MAKING ADDITION. AL L PURCHASES AND SALES ARE DULY RECORDED IN THE BOOKS OF 5 ACCOUNT AND THE ENTIRE TRANSACTIONS INCLUDING STOCK POSITION ARE VERIFIABLE FROM THE BOOKS OF ACCOUNT W HICH WERE PRODUCED AT ASSESSMENT STAGE AND TEST-CHECKED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS N OT POINTED OUT AS TO WHICH OF THE TRANSACTION REMAINED UNVERIFIABLE. THE ASSESSEE MAINTAINED ALL THE TRANSACTIONS IN CHUKARA REGISTER WHICH WERE MADE IN MANDI CAMPUS AND GIVEN DETAILS OF THE NAME, ADDRESS OF THE SELLER, WEIGHT, RATE, VALUE AND TOTAL HAMMALI P AID ETC. ON WHICH MANDI TAX HAS BEEN PAID ON ENTIRE PURCHASES WHICH HAVE BEEN ACCEPTED BY KRISHI UDYOG MANDI SAMITI AS WELL. THE ASSESSEE COULD NOT PRODU CE THE KARAR PATRA BECAUSE OF NOT KEEPING THEM IN PERMANENT RECORD BUT THREE COPIES OF THE KARAR PATR A ARE MAINTAINED AS PER MANDI SAMITI, ONE COPY FOR FARMER/SELLER, ONE COPY FOR KRISHI MANDI SAMITI AND ONE FOR THE ASSESSEE. THIS KARAR PATRA CONTAINED THE COMPLETE DETAILS OF THE GOODS SOLD BY THE FARMERS A ND ACCEPTED BY THE KRISHI UPAJ MANDI SAMITI WHICH IS INDEPENDENT GOVERNMENT AGENCY ON WHICH ALL MANDI SHULK HAVE BEEN PAID BUT ASSESSING OFFICER NEVER AS KED FOR ANY SUCH DETAILS AND MADE THE ADDITION WITHOUT MAKING PROPER ENQUIRY INTO THE MATTER. THE ASSESSE E CARRIED ON THE BUSINESS OF TRADING AS WELL AS COMMI SSION AGENT. THE ASSESSEE SOLD THE GOODS TO THE CUSTOMER S AS PER THEIR DIRECTIONS AS A TRADER OR AFTER CHARGING THE COMMISSION. ON ALL THE DETAILS, THE MANDI TAX HAVE BEEN PAID. ALL THE TRANSACTIONS CARRIED OUT THROUG H THE 6 ASSESSEE ARE RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE MAINTAINED CHUKARA REGISTER IN CHRONOLOGIC AL ORDER WHICH CONTAINED PAYMENTS MADE TO THE FARMERS ON THE SAME DAY EXCEPT SOME TRANSACTIONS CARRIED OUT L ATER ON AND IN SOME CASES THE RECEIVER DID NOT PUT THE D ATE BELOW THE SIGNATURE BUT THAT IS NOT SIGNIFICANT TO MAKE THE ADDITION. 6(I) IT WAS FURTHER SUBMITTED THAT ASSESSEE CARRIED ON BUSINESS OF PURCHASE AND SALES AS WELL AS ADHAT O F SOYABEAN, MUSTARD SEED, CHANA AND WHEAT AND TRANSACTED WITH VARIOUS FARMERS IN THE KRISHI UPAJ MANDI CAMPUS OF HEAD OFFICE, GUNA AND BRANCH OFFICE , ARON AS WELL AS OUTSIDE THE MANDI CAMPUS. THE ASSESSEE MAINTAINED REGULAR AND PROPER BOOKS OF ACCOUNT WHICH ARE AUDITED UNDER SECTION 44AB OF THE INCOME TAX ACT. THE ASSESSEE PRODUCED ALL THE BOOK S OF ACCOUNT AND RELEVANT DETAILS INCLUDING AUDIT REPORT AT ASSESSMENT STAGE WHICH HAVE BEEN EXAMINED AND TEST CHECKED BY THE ASSESSING OFFICER. 6(II) AS PER MODUS-OPERANDI FOLLOWED, ASSESSEE CARR IED ON BUSINESS, TRANSACTED WITH VARIOUS FARMERS IN THE KRISHI UPAJ MANDI SAMITI CAMPUS. OUT OF THOSE TRANSACTIONS, THE FARMERS TOOK PART PAYMENT IN CASH AND REMAINING AMOUNT LEFT DEPOSITED WITH THE ASSESSEE A ND TOOK SUBSEQUENTLY AS PER THEIR REQUIREMENT. APART FROM THIS, THE ASSESSEE HAD ALSO PURCHASED THE GOODS FRO M OTHER DEALERS OUTSIDE THE MANDI CAMPUS ON CREDIT BA SIS 7 WHICH HAVE NOT BEEN DISPUTED BY ASSESSING OFFICER. AFTER THAT, ALL THE TRANSACTIONS OF PURCHASE IN MAN DI CAMPUS I.E. CASH PAYMENTS AND AMOUNT LEFT DEPOSITED TOWARDS PURCHASES WERE RECORDED IN CHUKARA REGISTER AND THEREAFTER, THE CASH PURCHASES WERE RECORDED IN THE CASH BOOK SEPARATELY AND AMOUNT LEFT DEPOSITED WERE SEPARATELY RECORDED IN THE CHUKARA KHATA. SUCH PURCHASES ARE SUBJECT TO PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK PAYABLE TO THE KRISHI UPAJ MANDI SAMITI. THE ASSESSEE PAID ALL THE TAXES OF THE KRI SHI UPAJ MANDI ON PURCHASES WHICH HAVE BEEN ACCEPTED BY THE MANDI SAMITI AS WELL AS COMMERCIAL TAX AUTHORIT IES AND THE ASSESSING OFFICER. THE DETAILS OF CHUKARA KHATA WERE ALSO PRODUCED BEFORE LD. CIT(APPEALS) FOR HIS PERUSAL. NO OTHER TRANSACTIONS WERE RECORDED IN CHUKARA REGISTER. THE COMPLETE DETAILS OF TRANSACT IONS I.E. NAME OF FARMER WHO HAVE SOLD THE GOODS TO THE ASSESSEE, DETAILS OF GOODS PURCHASED ARE RECORDED I N THE CHUKARA REGISTER. THE ASSESSING OFFICER HAD ACCEPT ED THE TRANSACTIONS OF GOODS PURCHASED FROM THE FARMER S AS RECORDED IN THE CHUKARA REGISTER, MEANING THEREBY T HE PURCHASES DECLARED IN THE TRADING ACCOUNT HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THE ASSESS ING OFFICER HAS ALSO ACCEPTED THE CORRESPONDING SALES A S WELL AS CLOSING STOCK WHICH WAS OUT OF PURCHASES ON LY. THE ASSESSING OFFICER WAS, THEREFORE, NOT JUSTIFIED IN OBSERVING THAT NO COMPLETE DETAILS HAVE BEEN PRODUC ED. THE CHUKARA REGISTER HAD THE SIGNATURES OF ALL THE 8 PERSONS, THEREFORE, ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSING OFFICER DID NOT MAKE PROPER ENQUIRY INTO THE MATTER. 6(III) THE ASSESSEE RELIED UPON DECISION OF GUJRA T HIGH COURT IN THE CASE OF KHANDELWAL CONSTRUCTIONS VS CI T 227 ITR 900 AND DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS PANCHAM DASS JAIN 205 CTR 444 IN WHICH IT WAS HELD THAT PROVISIONS OF SECTION 68 ARE NOT ATTRACTED TO AMOUNTS REPRESENTING PURCHASE MADE ON CREDIT AND ORDER OF ITAT JABALPUR BENCH IN THE CASE OF ITO VS BHARAT KUMAR MULTANI 12 ITJ 765 IN WHICH IT WAS HELD THAT WHEN PURCHASES HAVE NOT BEEN DOUBTED, THERE IS NO REASON TO DOUBT THE CREDITORS. IT WAS, THEREFORE, SUBMITTED THAT SINCE ALL THE PURCHASES W ERE SUBJECT TO MARKET RULES AND TAXES HAVE BEEN PAID BY THE ASSESSEE, THEREFORE, ADDITION WAS WHOLLY UNJUSTIFIE D. THE ASSESSEE PRODUCED SUFFICIENT DETAILS BEFORE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT W HEN SOME AMOUNT WAS LEFT BY THE FARMERS WITH THE ASSESS EE, IT WAS PAID SUBSEQUENTLY WHICH HAVE BEEN DULY RECOR DED IN THE BOOKS OF ACCOUNT. IT WAS SUBMITTED THAT ASSESSING OFFICER MADE THE ADDITION CONSIDERING THE MANDI RULES MENTIONING THAT THE PAYMENTS WERE NOT MADE ON THE SAME DAY. HOWEVER, ASSESSING OFFICER H AS IGNORED AND DID NOT APPRECIATE THE PREVAILING BUSIN ESS PRACTICE, CUSTOM AND USES AND PAST HISTORY OF THE ASSESSEE. THEREFORE, ADDITION WAS WHOLLY UNJUSTIFI ED. 9 THE ASSESSEE ALSO RELIED UPON DECISION OF MADRAS HI GH COURT IN THE CASE OF CIT VS SHREE RAJENDRA MILLS LT D. 93 ITR 122. 7. THE LD. CIT(APPEALS), CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND MATERIAL ON RECORD, DELETED THE ENTIRE ADDITION. HIS FINDINGS IN THE APPELLATE ORD ER IN PARAS 5.4 AND 5.5 ARE REPRODUCED AS UNDER : 5.4 I HAVE PERUSED THE ASSESSMENT ORDER, WRITTEN SUBMISSION, ORAL ARGUMENTS PUT FORTH DURING COURSE OF HEARING, LEGAL PROVISIONS REFERRED BY THE AO AS WELL AS LD. AR OF THE APPELLANT AND DECISIONS RELIED UPON. IN THIS CASE, THE APPELLANT CARRIED ON THE BUSINESS OF TRADING AND AD AT OF GRAINS. THE APPELLANT HAS PURCHASED THE GOODS FROM VARIOUS FARMERS IN THE MANDI CAMPUS IN CASH AS WELL AS ON CREDIT. THE ENTIRE PURCHASES IN THE M ANDI CAMPUS WERE RECORDED IN REGISTER NAMED AS CHUKARA REGISTER. THEREAFTER, THE CREDIT PURCHASES WERE RECORDED IN CHUKARA KHATA IN THE BOOKS OF ACCOUNT. THE APPELLANT HAS PAID THE AMOUNT TO THE FARMERS ON THE SAME DATE AND IN SOME CASES SUBSEQUENTLY. THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 2,43 ,99,263/- OF CHUKARA KHATE JAMA DURING THE YEAR UNDER CONSIDERATION. WHILE MAK ING THE ADDITION THE ASSESSING OFFICER HAS MENTIONED THAT THE APPELLANT DID NOT FURNISH THE COMPLETE DETAILS OF THE PERSONS WHO DEPOSITED THIS AMOUNT IN CASH WITH HIM AND FAILED TO FURNISH THE DETAILS IN THIS REGARD AN D SUBMITTED ONLY CHUKARA REGISTER FOR THE PART PERIOD IN WHICH THE TRANSACTI ON OF PURCHASE FROM DIFFERENT AGRICULTURIST ARE RECORDED DATE WISE. THE SIGNATURE S OF THE AGRICULTURISTS ARE ALSO TAKEN IN RECEIPTS OF THE CONSIDERATION. IN SOM E CASES, THE PAYMENTS WERE RECEIVED BY THE SAME PERSON. ON THE OTHER HAND , THE LD. AR OF THE APPELLANT VEHEMENTLY CONTESTED THAT THE APPELLANT C ARRIED ON THE BUSINESS OF PURCHASE AND SALES AS WELL AS ADAT OF GRAINS AND TR ANSACTED WITH THE VARIOUS FARMERS IN THE KRISHI UPAJ MANDI CAMPUS. APART FROM THIS, THE APPELLANT TRANSACTED WITH THE OTHER DEALERS OUTSIDE THE MANDI CAMPUS, WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE APPELLANT HA S MAINTAINED REGULAR AND PROPER BOOKS OF ACCOUNTS, WHICH WERE DULY AUDITED U /S44AB OF THE ACT AND PRODUCED DURING ASSESSMENT PROCEEDINGS. THE FACT OF PRODUCING THE BOOKS OF ACCOUNTS DURING ASSESSMENT PROCEEDINGS IS MENTIONED IN PARA 2 AT PAGE 2 OF THE ASSESSMENT ORDER. AS PER MODUS OPERANDI FOLLOWED BY THE APPELLANT, HE PURCHASED THE GOODS FROM VARIOUS FARMERS IN THE MAN DI CAMPUS IN CASH AS WELL AS ON CREDIT. THEREAFTER, THE CREDIT PURCHASES WERE RECORDED IN CHUKARA KHATA IN THE BOOKS OF ACCOUNTS AS CONTROL CREDITOR ACCOUNT. THE LD. AR OF THE APPELLANT ALSO MENTIONED THAT SUCH PURCHASES ARE SU BJECT TO PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK PAYABLE TO KRISHI UPAJ MA NDI SAMITI, WHICH WAS PAID AND DEBITED TO THE PURCHASE ACCOUNT. THE ENTIRE PUR CHASES MADE FROM THE 10 FARRNERS IN THE MANDI CAMPUS WHICH INCLUDES THE CRE DIT PURCHASES RECORDED IN CHUKARA KHATA AND MANDI SHULK AND NIRASHRIT SHULK P AID BY THE APPELLANT ARE ACCEPTED BY THE KRISHI UPAJ MANDI SAMITI AS WELL AS ASSESSING OFFICER. CHUKARA KHATA WAS SQUARED UP SUBSEQUENTLY. THE LD. AR OF TH E APPELLANT HAS SUBMITTED WRITTEN SUBMISSION AND PUT FORTH ORAL ARGUMENTS ALS O DURING COURSE OF HEARING, WHICH IS PLACED ON RECORD. THE LD. AR OF T HE APPELLANT HAS ALSO SUBMITTED THAT THE LD. ASSESSING OFFICER HAS ACCEPT ED THE PURCHASES, SALES AND CLOSING STOCK. HE FURTHER SUBMITTED THAT ONCE T HE PURCHASES, SALES AND CLOSING STOCK HAS BEEN ACCEPTED BY THE ASSESSING OF FICER THEN THE ADDITION FOR CREDIT PURCHASES CONSIDERING THEM AS UNEXPLAINED CA SH CREDIT IS NOT JUSTIFIED. FOR THIS PROPOSITION, HE PLACED RELIANCE ON THE DEC ISION IN THE CASE OF CIT VS. PANCHAM DAS JAIN (2006) 205 CTR 444 (ALL.) AND ITO VS. BHARAT KUMAR MULTANI (2009) 12 ITJ 765 (TRIB - JAB.). HE ALSO SUBMITTED THAT THE ASSESSING OFFICER HAD MADE THE OBSERVATION REGARDING PREPARATION OF CHUKA RA REGISTER WITH ALLEGED SIGNATURES IN SOME CASES BY ONE OR TWO PERSONS MERE LY ON CONJECTURE, SURMISES, OWN IMAGINATION, WRONG PRESUMPTION AND WI THOUT ANY BASIS. HE ALSO SUBMITTED THAT ALL THESE OBSERVATIONS ARE MERE LY SUBJECTIVE WITHOUT PLACING ANY ADVERSE MATERIAL ON RECORD AND WITHOUT CONDUCTI NG PROPER ENQUIRY. HE ALSO SUBMITTED THAT SO FAR GENUINENESS OF PURCHASES IS CONCERNED THE APPELLANT HAD SUBMITTED RELEVANT DETAILS OF TRANSAC TION OF PURCHASES FROM THE FARMERS UPON WHICH THE APPLICABLE MANDI SHULK AND N IRASHRIT SHULK WAS DEPOSITED. ALL THE PURCHASES, PAYMENT OF MANDI SHUL K AND NIRASHRIT SHULK HAVE BEEN ACCEPTED BY THE KRISHI UPAJ MANDI SAMITI AS WELL THE ASSESSING OFFICER. AFTER ACCEPTING THE PURCHASES AND PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK ON THOSE PURCHASES, THE ASSESSING O FFICER HAS NOT CONDUCTED ANY FURTHER ENQUIRIES. SINCE, THE ASSESSING OFFICER HIM SELF HAS ACCEPTED THE PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK ON THOSE PURCHAS ES AS WELL AS CORRESPONDING SALES ALSO, THEN THE AO IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 2,43,99,263/- OF CHUKARA KHATE JAMA RELATED TO PURCHASES FROM FAR MERS. FOR THIS PROPOSITION HE PLACED RELIANCE ON THE DECISION IN THE CASE OF ITO VS. SANTOSH JAIN (2010) 14 ITJ 710, RAJENDRA BANSAL VS. ITO (2006) 6 ITJ 122 AND KHANDE LWAL CONSTRUCTIONS VS. CIT (1997) 227 ITR 900. HE ALSO SUBMITTED THAT THE ASSE SSING OFFICER HAS REFERRED THE MANDI RULES AND MENTIONED THAT THE PAYMENTS TO THE FARMERS SHOULD BE ON THE SAME DAY. IN THIS MATTER LD. AR OF THE APPELLANT SU BMITTED THAT AS PER PREVAILING SYSTEM IN THIS LINE OF BUSINESS, PURCHAS ES WERE MADE ON CREDIT FT JM FARMERS AND APPELLANT HAD BEEN PURCHASING ON SIM ILAR CREDITS FOR SEVERAL YEARS. SO FAR THE DEDUCTION / ALLOWANCES AN D ADDITIONS FOR THE PURPOSE OF ASSESSMENTS UNDER THE INCOME TAX ACT ARE CONCERNED, THEY ARE GOVERNED WITH THE PROVISIONS OF THE INCOME TAX ACT AND NOT AS PER MANDI RULES. FOR THIS PROPOSITION HE PLACED RELIANCE IN T HE CASES OF NILGIRI FINANCE AND HIRE PURCHASE PVT. LTD. VS. CIT (1995) 213 ITR 384 (MAD.) AND CIT VS. SHRI RAJENDRA MILLS LTD. (1974) 93 ITR 122 (MAD.). THE L D. AR OF THE APPELLANT ALSO SUBMITTED THAT THE APPELLANT CARRIED ON THE BUSINES S OF TRADING AT HIS OWN AS WELL AS COMMISSION AGENT. THE APPELLANT SOLD THE GOODS AS PER DIRECTION OF THE CUSTOMER EITHER IN THE CAPACITY AS TRADER OR IN THE CAPACITY AS COMMISSION AGENT. WHENEVER THE APPELLAN T HAS OBTAINED THE 11 ORDER TO SUPPLY THE GOODS ON COMMISSION BASIS, THEN HE CHARGED THE COMMISSION. THE APPELLANT HAS DISCLOSED THE COMMISS ION INCOME AS WELL AS PROFIT ELEMENT FROM TRADING TRANSACTION. ALTHOUGH T HE APPELLANT COULD N~T KEEP THE RECORD SEPARATELY FOR BOTH THE TRANSACTION S I.E. TRADING AS WELL AS COMMISSION BASIS. BUT ALL THESE TRANSACTIONS ARE DULY RECORDED IN THE BOOKS OF ACCOUNT. THE AO HAS NOT POINTED OUT ANY SP ECIFIC DEFECT RELATED TO THESE TRANSACTIONS. 5.5 I HAVE CONSIDERED CAREFULLY THE ASSESSMENT OR DER, WRITTEN SUBMISSION, ORAL ARGUMENTS PUT FORTH DURING COURSE OF HEARING, LEGAL PROVISIONS REFERRED BY THE A.O AND LD. AR OF THE APPELLANT AND DECISION S RELIED UPON AND FIND CONSIDERABLE FORCE IN THEM. THE APPELLANT CARRIED O N THE BUSINESS OF TRADING AND ADAT OF GRAINS. APART FROM THIS, THE APPELLANT TRANSACTED WITH OTHER DEALERS ALSO OUTSIDE MANDI CAMPUS. THE ASSESSING OF FICER HAS MADE THE ADDITION OF RS. 2,43,99,263/- OF CHUKARA KHATE JAMA WITH THE FARMERS IN THE MANDI CAMPUS. WHEREAS, THE OTHER CREDIT PURCHASES H AS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS MA DE THE ADDITION OF RS. 2,43,99,263/- MENTIONING THAT THE APPELLANT HAD REC EIVED THE AMOUNT FROM THE FARMERS AND CREDITED IN THE BOOKS OF ACCOUNT. W HEREAS, IT IS NOT A CASE OF CASH DEPOSITED IN THE BOOKS OF ACCOUNT. THE APPE LLANT CARRIED ON THE BUSINESS OF TRADING AND ADAT OF GRAINS IN THE MANDI CAMPUS. DURING COURSE OF BUSINESS, THE APPELLANT PURCHASED THE GOODS FROM FARMERS AND PAID PART OF THE PURCHASE VALUE IN CASH AND REMAINING AMOUNT KEPT OUTSTANDING IN THE NAME OF FARMERS, WHICH WAS PAID SUBSEQUENTLY. T HE PURCHASES MADE BY THE APPELLANT WERE SUBJECTED TO PAYMENT OF MANDI SH ULK AND NIRASHRIT SHULK PAYABLE TO THE KRISHI UPAJ MANDI SAMITI, WHICH WAS PAID SUBSEQUENTLY BY THE APPELLANT. THE ASSESSING OFFICER AS WELL AS KRI SHI UPAJ MANDI SAMITI HAVE ACCEPTED THE PURCHASES MADE BY THE APPELLANT A ND PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK ON THOSE PURCHASES. THE A SSESSING OFFICER HAS ALSO ACCEPTED THE CORRESPONDING SALES AND CLOSING 'STOCK OUT OF THOSE PURCHASES. THE ASSESSING OFFICER HAS DOUBTED THE SANCTITY OF C HUKARA KHATA MENTIONING THAT IN THE CHUKARA REGISTER / MANDI PAYMENT REGIS TER, SOME PAYMENTS WERE ACKNOWLEDGED BY THE SAME PERSON. WHEREAS THE L D. AR OF THE APPELLANT HAS VEHEMENTLY CONTESTED THAT THIS OBSERV ATION IS NOT CORRECT AND THE ASSESSING OFFICER HAS GIVEN THIS OBSERVATIO N MERELY ON CONJECTURE, SURMISES, OWN IMAGINATION, WRONG PRESUMPTION AND WI THOUT ANY BASIS. I HAVE PERUSED THIS AND FIND THAT THE ASSESSING OFFIC ER HAS GIVEN THIS OBSERVATION AT HIS OWN WITHOUT CONDUCTING ANY INQUI RY AFTER ACCEPTING THE PURCHASES AND PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK ON THOSE PURCHASES. THE AMOUNT OF RS. 2,43,99,263 /- WAS NOT THE AMOUNT OF CASH DEPOSITED BUT IT IS TOWARDS PURCHASES. WHEN THE ASS ESSING OFFICER HAS ACCEPTED THE PURCHASES THEN THE AMOUNT REPRESENTED BY CREDIT WAS NOT ASSESSABLE AS INCOME OF THE APPELLANT. BY ACCEPTING THE CORRESPONDING SALES, THE AO IS NOT JUSTIFIED IN CONSIDERING THE T RANSACTIONS OF RS. 2,43,99,263/- RELATED TO PURCHASES AS NON-GENUINE. FOR THIS PROPOSITION, I HAVE GONE THROUGH THE DECISION IN THE CASE OF KHAND ELWAL CONSTRUCTION VS. 12 CIT (1997) 227 ITR 900 (GUJ.) AND 1TO VS. BHARAT KU MAR MULTANI (2009) 12 TTJ 765 (JAB.) AS RELIED UPON BY THE LD. AR OF THE APPE LLANT AND FIND THAT ADDITION OF AMOUNT OF RS. 2,43,99,263/- WITHOUT CONDUCTING T HE PROPER ENQUIRY TO ASCERTAIN THE GENUINENESS IS NOT PERMISSIBLE. THE L D. AR OF THE APPELLANT HAS MENTIONED THAT ONCE THE SALES AND CLOSING STOCK OUT OF PURCHASES IN QUESTION HAS BEEN ACCEPTED THEN THE ADDITION OF RS. 2,43,99,263/- DOUBTING THE TRANSACTIONS RECORDED IN THE CHUKARA REGISTER I S NOT JUSTIFIED HAVING PLACED RELIANCE IN THE DECISION IN THE CASE OF CIT VS. PANCHAM DAS JAIN (2006) 205 CTR 444 (AIL). I HAVE ALSO GONE THROUGH THE FAC T THAT THE ASSESSING OFFICER HAS NOT ONLY ACCEPTED THE PURCHASES BUT HAS ACCEPTED THE CORRESPONDING SALES AND CLOSING STOCK OUT OF THOSE PURCHASES. ONCE THE PURCHASES HAVE BEEN ACCEPTED THEN, THERE IS NO REAS ON TO DOUBT THE CREDITORS. I HAVE PERUSED THE DECISION IN THE CASE OF CIT VS. PANCHAM DAS JIN (2006) 205 CTR 444 (ALL.) IN WHICH THE HON'BLE ALLA HABAD HIGH COURT HAS HELD THAT WHEN THE SALES AND CLOSING, STOCK HAS BEE N ACCEPTED OUT OF PURCHASES INCLUDING CREDIT PURCHASES, THEN THE ADDI TION OF THE AMOUNT OF CREDIT PURCHASES COULD NOT BE MADE. I HAVE ALSO GON E THROUGH THE DECISION IN THE CASE OF ITO VS. BHARAT KUMAR MULTANI (2009) 12 ITJ 765 (TRIB. - JAB.), IN WHICH THE HON'BLE TRIBUNAL HAS HELD THAT WHEN PURCH ASES HAVE NOT BEEN DOUBTED, THERE IS NO REASON TO DOUBT THE CREDITORS. IN THIS CASE, THE ASSESSING OFFICER HAS NOT DOUBTED THE TOTAL PURCHAS ES AS WELL AS THE PAYMENT OF MANDI SHULK AND NIRASHRIT SHULK UPON THO SE PURCHASES, WHICH INCLUDES THE AMOUNT OF RS. 2,43,99,263/-, THEN THE ADDITION OF SUCH AMOUNT COULD NOT BE MADE. I HAVE ALSO GONE THROUGH THE OBS ERVATIONS REGARDING APPLICABILITY OF THE MANDI RULES. THE LD. AR HAS SU BMITTED THAT THE APPELLANT HAS BEEN CARRYING ON THE BUSINESS OF TRADING AND ADAT O F GRAINS IN THE MANDI CAMPUS WITH THE PREVAILING PRACTICE AND SYSTEM IN T HIS LINE OF BUSINESS OF KEEPING THE AMOUNT DEPOSITED, WHICH WAS LEFT BY THE FARMER OUT OF THE PURCHASE VALUE OF THE GOODS FOR LAST SEVERAL YE ARS. THE DEDUCTION / ALLOWANCES AND ADDITIONS FOR THE PURPOSE OF ASSESSM ENT UNDER THE INCOME TAX ACT ARE GOVERNED BY THE PROVISIONS OF TH E INCOME TAX ACT AND NOT BY THE MANDI RULES. THE LD. AR OF THE APPELLANT HAS RELIED UPON THE DECISION IN THE CASES OF NILGIRI FINANCE AND HIRE PURCHASE P VT. LTD. VS. CIT (1995) 213 ITR 384 (MAD.) AND CIT VS. SREE RAJENDRA MILLS LTD. (1974) 93 ITR 122 (MAD.). I HAVE PERUSED BOTH THE DECISIONS OF THE HON'BLE MADR AS HIGH COURT. ALTHOUGH, BOTH THE DECISIONS ARE NOT RELATED TO MAN DI RULES AND INCOME TAX. BUT, BOTH THE DECISIONS ARE RELATED TO ALLOWAB ILITY OF EXPENDITURE UNDER THE INCOME TAX ACT, WHICH WERE INCURRED IN VI OLATION OF PROVISIONS OF COMPANIES ACT, 1956. IN BOTH THESE CASES, THE HON'B LE HIGH COURT HAS HELD THAT THE EXPENDITURE INCURRED CANNOT BE DISALLOWED FOR VIOLATION OF PROVISION OF COMPANIES ACT, 1956. APPLYING THE RATIO OF THESE DECISIONS, I FIND THAT THE MANDI RULES FOR THE PURPOSE OF INCOME TAX ASSESSMEN T ARE NOT RELEVANT AND ACCORDINGLY, THE ADDITION OF RS. 2,43,99,263/- COUL D NOT BE MADE. THE AO COULD ALSO NOT POINTED OUT THE SPECIFIC INSTANCE OF DISCREPANCY ABOUT TRADING TRANSACTION AS WELL AS COMMISSION BASED TRA NSACTIONS. AFTER CONSIDERING ALL THESE, I AM OF THE CONSIDERED OPINI ON THAT THE ADDITION OF RS 13 . 2,43,99,263/- IS NOT SUSTAINABLE FOR THE OBSERVAT IONS MADE BY THE ASSESSING OFFICER NAMELY THE APPELLANT FAILED TO FI LE ANY DETAILS, THE PAYMENT IN SOME CASES WAS ACKNOWLEDGED BY SAME PERS ON ON BEHALF OF FEW PERSONS. IN FACT, THE APPELLANT HAS SUBMITTED THE R ELEVANT DETAILS OF PURCHASES ALONG WITH THE PAYMENT OF MANDI SHULK, NI RASHRIT SHULK ON THOSE PURCHASES, SALES AND CLOSING STOCK WHICH HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. THE PURCHASES AND PAYMENT OF MAN DI SHULK INCLUDING NIRASHRIT SHULK HAS ALSO BEEN ACCEPTED BY THE KRISH I UPAJ MANDI SAMITI. THE ASSESSING OFFICER HAS MENTIONED THAT IN THE CHUKARA REGISTER / MANDI PAYMENT REGISTER, IN SOME CASES THE PAYMENTS WERE A CKNOWLEDGED BY DIFFERENT PERSONS AT HIS OWN WITHOUT CONDUCTING ANY ENQUIRY, WHICH IS ALSO NOT SUSTAINABLE IN ABSENCE OF ANT INQUIRY. BY ACCEP TING THE PURCHASES AND CORRESPONDING SALES BY THE AO, THE GENUINENESS OF T HE TRANSACTIONS STOOD ESTABLISHED. THE APPELLANT HAS NOT CREDITED THE ENT RIES OF RS. 2,43,99,263/- IN THE BOOKS OF ACCOUNT AS CASH TAKEN OR ACCEPTED F ROM THE FARMERS. THE AMOUNT OF RS. 2,43,99,263/-IS REPRESENTED BY THE AM OUNT OF PURCHASES, WHICH WAS CREDITED IN THE BOOKS OF ACCOUNT IN THE C REDITOR CONTROL ACCOUNT TITLED AS CHUKARA KHATA. THEREFORE, IT IS NOT A CAS E OF CASH DEPOSITED IN THE BOOKS OF ACCOUNT. THEREFORE, AFTER CONSIDERING ALL THESE FACTS, I AM OF THE CONSIDERED OPINION THAT THE ADDITION OF RS. 2,43,99 ,263/- IS NOT SUSTAINABLE AND ACCORDINGLY IS, HEREBY, DELETED. 8. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT IN TRADING, ASSESSEE EAR NED PROFIT BUT ON COMMISSION, IT HAS EARNED MORE. KARA R PATRAS WERE NOT PRODUCED. STOCK REGISTER NOT PRODU CED. THERE WERE DISCREPANCIES IN THE BOOKS OF ACCOUNT. PART AMOUNT WAS RETAINED BY ASSESSEE OUT OF PURCHASES AN D THE SAME WAS NOT PAID TO THE FARMERS AT THE TIME OF SALE. THE CONFIRMATIONS OF THE FARMERS WERE NOT FILED THEREFORE, LD. CIT(APPEALS) SHOULD NOT HAVE DELETED THE ADDITION. 9. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT KRISHI UPAJ MANDI SAMITY I S 14 GOVERNMENT BODY AND ALL THE TRANSACTIONS OF PURCHAS ES HAVE BEEN ROUTED THROUGH THE KRISHI UPAJ MANDI SAMI TY AND ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY FROM THEM WHERE KARAR PATRA WERE ALSO AVAILABLE. THE ASSESSING OFFICER ACCEPTED TRADING RESULTS AND DID NOT REJECT THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE INCOME TAX ACT. THE ASSESSING OFFICER ACCEPTED PURCHASES, SALES AND CLOSING STOCK ETC. THEREFORE, ADDITION WAS WHOLLY UNJUSTIFIED. PAYMENTS TO THE FARMERS HAVE BEEN DOUBTED ONLY IN PART. THE AMOUNT WHICH WAS RETAINED FOR THE FARMERS IN CHUKARA REGIS TER WAS PAID IN THE SUBSEQUENT ASSESSMENT YEAR WHICH HA VE NOT BEEN DISBELIEVED BY THE REVENUE DEPARTMENT. TH E ASSESSING OFFICER DID NOT MAKE ANY ADDITION IN RESP ECT OF AMOUNT OF RS. 74,39,980/- IN RESPECT OF HEAD OFF ICE WHICH WAS PAYABLE AS ON 31.03.2012 TOWARDS PURCHASE S (PB-15). THE ASSESSING OFFICER, HOWEVER, MADE ADDI TION OF RS. 2.19 CSR IN RESPECT OF PAYMENTS MADE TOWARDS PURCHASE IN THE FINANCIAL YEAR, DETAILS OF WHICH IS FILED AT PAGE 26 OF THE PAPER BOOK WHICH PERTAIN TO THE H EAD OFFICE. HOWEVER, IN RESPECT OF BRANCH OFFICE, THE ASSESSING OFFICER MADE ADDITION OF RS. 24,10,751/- IN RESPECT OF AMOUNT PAYABLE AS ON 31.03.2012 TOWARDS PURCHASES (PB-22). IT WOULD, THEREFORE, MAKE IT CL EAR THAT ASSESSING OFFICER WAS NOT CLEAR AS TO WHAT ADD ITION IS TO BE MADE, WHETHER OF THE PAID AMOUNT TOWARDS PURCHASES OR AMOUNT PAYABLE TOWARDS THE PURCHASES. THE ASSESSING OFFICER ACCEPTED BOOK RESULTS OF THE 15 ASSESSEE AND PROFIT DECLARED BY ASSESSEE HAVE BEEN ACCEPTED AND PROVISIONS OF SECTION 145(3) HAVE NOT BEEN APPLIED IN THIS CASE. THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT WHEN ASSESSEE MADE PURCHASES FROM TH E FARMERS THROUGH KRISHI UPAJ MANDI SAMITI, ASSESSEE PAID ALL THE TAXES TO THE MANDI SAMITI AND SOME TIM E THE FARMERS TOOK THE ENTIRE MONEY OF THEIR SALE PROCEED S AND SOME TIME THE FARMERS TOOK PART PAYMENT IN CASH AND REMAINING LYING WITH THE ASSESSEE AND THE FARMER TO OK THAT AMOUNT SUBSEQUENTLY AS PER THEIR REQUIREMENTS. THE AMOUNT WHICH WAS LEFT WITH THE ASSESSEE OF PURCHASES HAVE BEEN RECORDED IN THE CHUKARA REGISTE R AND COMPLETE DETAILS HAVE BEEN MAINTAINED BY THE ASSESSEE. SAME PRACTICE HAVE BEEN FOLLOWED BY THE ASSESSEE SINCE BEGINNING WHICH IS ALSO PRACTICE OF THE MANDI WHICH HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. IN PRECEDING ASSESSMENT YEAR 2009-10 IN T HE CASE OF THE SAME ASSESSEE, THE ASSESSEE HAS SIMILAR AMOUNT PAYABLE IN CHUKARA REGISTER IN A SUM OF RS. 24,69,648/- ( PB-10 OF THE AUDIT REPORT) AND THE ASSESSING OFFICER IN THE ASSESSMENT ORDER UNDER SEC TION 143(3) DATED 28.11.2011 DID NOT MAKE ANY ADDITION AGAINST THE ASSESSEE. COPIES OF THE AUDIT REPORT A ND ASSESSMENT ORDER HAVE BEEN PLACED ON RECORD. THE L D. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER MISUNDERSTOOD THE ENTIRE ISSUE AN D TREATED THE SAME AS CASH CREDIT WHEREAS, ASSESSEE D ID NOT ACCEPT ANY CASH FROM THE FARMERS. IT WAS MONEY OF 16 THE FARMER WHICH WAS LEFT IN PART WITH THE ASSESSEE AT THE TIME OF PURCHASES MADE FROM THE FARMERS. THEREFORE, LD. CIT(APPEALS), ON PROPER APPRECIATION OF THE FACTS AND MATERIAL ON RECORD, CORRECTLY DELETED THE ADDITION. 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN THIS CASE, THE ASSESSING OFFICER REJECTED THE SUBMISSION S OF THE ASSESSEE WITH REGARD TO PAYMENTS OF RS. 2,19,88,512/- AND RS. 24,10,751/- ( RS. 2,43,99,263 /-) SHOWN AS CHUKARA KHATA JAMA AND MADE THE ADDITION. THE ASSESSEE EXPLAINED THAT HE IS CARRYING ON BUSIN ESS OF PURCHASES AND SALES AS WELL AS ADHAT ON GRAINS A ND TRANSACTED THE BUSINESS THROUGH VARIOUS FARMERS IN KRISHI UPAJ MANDI COMMITTEE CAMPUS. THE MADHYA PRADESH KRISHI UPAJ MANDI ADHINIYAM, 1972 HAVE BEEN FILED BEFORE US AND VARIOUS PROVISIONS HAVE BEEN REFERRED TO. SOME OF THE SALIENT FEATURES OF THE SA ME ACT ARE THAT ; EVERY PERSON WHO DESIRES TO OPERATE IN THE MARKET AREA, SHALL APPLY TO MARKET COMMITTEE FOR GRANT OF LICENCE OR RENEWAL IN THE MANNER AS PRESCRIBED BY BY-LAWS AND ONLY SUCH AUTHORIZED PERSON HAVING LICENCE COULD OPERATE IN MANDI COMMITTEE CAMPUS. ANY PERSON WHO BUYS NOTIFIED AGRICULTURE PRODUCE IN MARKET AREA, SHALL EXECUTE AN AGREEMENT IN TRIPLICA TE IN SUCH FORM AS MAY BE PRESCRIBED, IN FAVOUR OF THE SELLER, ONE COPY OF THE AGREEMENT SHALL BE KEPT BY THE BUYER AND ONE COPY SHALL BE SUPPLIED TO THE SELLER AND THE REMAINING COPY SHALL BE KEPT ON RECORD IN THE MARKET COMMITTEE. 17 10(I) THE SAID AGREEMENT IS CALLED AS KARAR PATRA. THE ASSESSEE DID NOT PRODUCE COPY OF THE KARAR PATRA BECAUSE IT WAS NOT KEPT, HOWEVER, SUCH AGREEMENT/KA RAR PATRA IS AVAILABLE IN THE KRISHI UPAJ MANDI SAMITI. THEREFORE, ASSESSING OFFICER COULD HAVE VERIFIED TH E FACT OF SALE OF THE AGRICULTURE PRODUCE BY THE FARMER TO THE ASSESSEE BUT ASSESSING OFFICER DID NOT MAKE ANY ENQ UIRY INTO THE MATTER. IT IS ALSO PROVIDED IN MADHYA PRA DESH KRISHI UPAJ ADHINIYAM THAT, PRICE OF THE AGRICULTURE PRODUCE BROUGHT IN THE MARKET YARD SHALL BE PAID ON THE SAME DAY TO THE SELLER AT THE MARKET YARD AND IN CA SE THE PURCHASER DOES NOT MAKE PAYMENT, HE SHALL BE LIABLE TO MAKE ADDITIONAL PAYMENT TO THE SELLER. IT APPEARS THAT ASSESSING OFFICER WAS SWAYED BY THESE PROVISIONS FO R MAKING ADDITION AGAINST THE ASSESSEE WITHOUT CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE. SINCE SOME OF THE FARMERS LEFT THEIR PAR T CONSIDERATION OF SALE PROCEEDS WITH THE ASSESSEE, A ND THE SAME IS RECORDED IN THE CHUKARA REGISTER, ASSES SING OFFICER TREATED THE SAME AS CASH CREDIT DESPITE THE FACT THAT ASSESSEE DID NOT RECEIVE ANY CASH AMOUNT FROM ANY OF THE FARMERS. THE ASSESSEE EXPLAINED THAT WHENEV ER FARMERS HAVE SOLD THEIR AGRICULTURE PRODUCE TO HIM, GENERALLY PAYMENTS ARE MADE TO THE FARMERS SAME DAY BUT OUT OF CERTAIN TRANSACTIONS, SOMETIMES FARMERS TOOK THE PART AMOUNT IN CASH AND REMAINING AMOUNT LEFT DEPOSITED WITH THE ASSESSEE WHICH WAS TAKEN SUBSEQUENTLY AS PER THE REQUIREMENTS OF THE FARMERS . 18 THE ASSESSING OFFICER DID NOT DISPUTE PURCHASES MAD E BY ASSESSEE AS WELL AS CORRESPONDING SALES MADE BY ASSESSEE. THE CLOSING STOCK HAS BEEN ACCEPTED. AL L TRANSACTIONS CARRIED OUT BY THE ASSESSEE THROUGH KR ISHI UPAJ MANDI SAMITI WERE SUBJECTED TO MANDI SHULK WHI CH HAVE PAID BY ASSESSEE, HAVE NOT BEEN DISPUTED BY TH E ASSESSING OFFICER. ALL THE KARAR PATRA AND RECEIPT S OF MANDI SHULK ETC. ARE AVAILABLE WITH THE KRISHI UPAJ MANDI BUT ASSESSING OFFICER DID NOT MAKE ANY ENQUIR Y FROM THE MARKET COMMITTEE. 10(II) IT IS INTERESTING TO NOTE HERE THAT EVEN IF ASSESSING OFFICER MADE WRONG ADDITION UNDER SECTION 68 OF THE INCOME TAX ACT BUT HE WAS TOTALLY CONFUSED W ITH THE FACTS OF THE CASE BECAUSE SOME TIME HE HAS MADE ADDITION ON ACCOUNT OF AMOUNTS PAYABLE TO THE FARME R AND SOME TIMES THE AMOUNT PAID TO THE FARMERS. FOR INVOKING PROVISIONS OF SECTION 68 OF THE ACT, THE ASSESSING OFFICER SHALL HAVE PUT TO ASSESSEE THAT S UM IS CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WH ICH HAVE BEEN PAYABLE AND SUCH AMOUNTS HAVE BEEN RECEIV ED BY ASSESSEE FROM THE FARMERS. HOWEVER, THE FACTS I N THIS CASE ARE TOTALLY DIFFERENT. THE ASSESSING OFFICER MADE ADDITION OF RS. 2,19,88,512/- IN RESPECT OF HEAD OF FICE IN RESPECT OF PAYMENTS MADE TOWARDS PURCHASES IN TH E FINANCIAL YEAR. THE DETAILS OF THE SAME ARE FILED AT PAGE 26 OF THE PAPER BOOK. THEREFORE, THIS ADDITION WAS WHOLLY UNJUSTIFIED BECAUSE ONCE ASSESSING OFFICER 19 ACCEPTED THE GENUINENESS OF THE PURCHASES MADE BY T HE ASSESSEE FROM THE FARMERS AND AMOUNT PAID IN THE PURCHASES, THERE IS NO REASON TO DISBELIEVE EXPLANA TION OF THE ASSESSEE. 10(III) THE ASSESSING OFFICER MADE FURTHER ADDITIO N OF RS. 24,10,751/- IN RESPECT OF BRANCH OFFICE AMOUNT PAYABLE AS ON 31.03.2012 (PB-22) BUT THE SAME AMOUN T HAS BEEN PAID IN APRIL, 2012 (PB-27) WHICH HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER IN SUBSEQUEN T YEAR. IT IS INTERESTING TO NOTE HERE THAT WHEN ASS ESSING OFFICER MADE ADDITION OF THE AMOUNT PAYABLE FOR BRA NCH OFFICE, NO ADDITION HAVE BEEN MADE BY ASSESSING OFF ICER IN RESPECT OF AMOUNT OF HEAD OFFICE IN A SUM OF RS. 74,39,980/- PAYABLE AS ON 31.03.2012 TOWARDS PURCHASES (PB-15). THEREFORE, ASSESSING OFFICER IS TOTALLY CONFUSED AND IT APPEARS THAT HE DID NOT APP LY HIS MIND TO THE FACTS OF THE CASE. SOMETIME, HE HAS MA DE ADDITION OF THE AMOUNT PAID TOWARDS PURCHASES WHICH WAS CONDUCTED THROUGH MANDI COMMITTEE AND SOMETIME FOR THE AMOUNT PAYABLE BUT ON PAYABLE AMOUNT FOR HE AD OFFICE, HE DID NOT MAKE ANY ADDITION. THEREFORE, T HERE APPEARS THAT THE ASSESSING OFFICER MADE THE ADDITIO N WITHOUT ANY JUSTIFICATION AGAINST THE ASSESSEE. 10(IV) IT MAY ALSO BE NOTED HERE THAT IN ASSESSME NT YEAR 2009-10, THE ASSESSEE IN THE AUDIT REPORT HAS SHOWN THE AMOUNT PAYABLE ON ACCOUNT OF CHUKARA IN A SUM OF RS. 24,69,648/- BUT IN THE ASSESSMENT ORDER 20 UNDER SECTION 143(3) DATED 28.11.2011 NO SUCH ADDIT ION HAVE BEEN MADE AGAINST THE ASSESSEE. IT IS WELL SE TTLED LAW THAT INCOME TAX AUTHORITIES ARE BOUND TO FOLLOW RULE OF CONSISTENCY, THEREFORE, ASSESSING OFFICER CANNOT BE ALLOWED TO MAKE ADDITION AGAINST THE ASSESSEE IN ON E YEAR ON THE SAME FACTS WITHOUT ANY JUSTIFICATION. IT APPEARS THAT ASSESSING OFFICER MADE ADDITION OF CHUKARA KHATA JAMA WITH THE FARMERS IN THE MANDI CAMPUS WHEREAS THE OTHER CREDIT PURCHASES HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF CHUKARA JAMA DESPITE THE FACT THAT IT IS NOT A CASE OF CASH DEPO SIT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE MADE PURCHASES OF THE AGRICULTURE PRODUCE FROM THE FARMERS AND AMOUNT IS PAID AS PER MANDI ADHINIYAM T O THEM AND SOMETIMES, PART AMOUNT IS LEFT WITH THE ASSESSEE WHICH WAS PAID SUBSEQUENTLY. ON ALL THE PURCHASES, ASSESSEE MADE PAYMENTS OF MANDI SHULK. THEREFORE, THE LD. CIT(APPEALS) WAS JUSTIFIED IN HO LDING THAT THERE IS NO CASH DEPOSIT IN THIS CASE BUT IT W AS AMOUNT PAID BY ASSESSEE TOWARDS PURCHASES. WHEN TH E ASSESSING OFFICER HAS ACCEPTED THE PURCHASES, THEN THE AMOUNT REPRESENTED BY CREDIT PURCHASE WAS NOT ASSESSABLE AS INCOME OF THE ASSESSEE. THE DECISION S RELIED UPON BY THE LD. CIT(APPEALS) IN HIS FINDINGS SQUARELY APPLY TO THE FACTS AND CIRCUMSTANCES OF TH E CASE. THE LD. CIT(APPEALS) WAS ALSO JUSTIFIED IN H OLDING THAT MANDI RULES FOR THE PURPOSE OF INCOME TAX 21 ASSESSMENT ARE NOT RELEVANT. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC INSTANCE OF DISCREPANC Y ABOUT TRADING TRANSACTIONS AS WELL AS COMMISSION BA SED TRANSACTIONS. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE LIGHT O F THE FINDING OF FACT RECORDED BY LD. CIT(APPEALS) WHICH HAVE NOT BEEN REBUTTED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO INTERFE RE WITH THE ORDER OF LD. CIT(APPEALS) IN DELETING THE ENTIR E ADDITION. NO INFIRMITY HAVE BEEN POINTED OUT IN TH E ORDER OF THE LD. CIT(APPEALS). WE, THEREFORE, DO N OT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCORDINGLY, DISMISSED. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ITA 323/2014 : ( SHRI VIPIN KUMAR AGARWAL) 12. IN THIS APPEAL, REVENUE CHALLENGED THE ORDER OF LD. CIT(APPEALS), GWALIOR DATED 19.08.2014 FOR ASSESSME NT YEAR 2011-12 CHALLENGING THE DELETION OF ADDITION O F RS. 4.29 CR MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDIT UNDER SECTION 68 OF THE INCOME T AX ACT. IN THIS CASE, THE LD. CIT(APPEALS) DELETED THE ENTIRE ADDITION. IT IS EXPLAINED THAT AMOUNT PAYABLE AT R S. 99,12,190/- WAS ADDED ON ACCOUNT OF PURCHASES FOR T HE AMOUNT PAYABLE OF HEAD OFFICE. FURTHER ADDITION OF RS. 3,30,50,000/- WAS MADE ON ACCOUNT OF AMOUNT PAID TOWARDS PURCHASES OF BRANCH OFFICE. HOWEVER, NO ADDITION HAS 22 BEEN MADE IN RESPECT OF THE AMOUNT PAID TOWARDS PURCHASES OF RS. 4.05 CR OF THE HEAD OFFICE. ITA 322/2014 : ( SHRI SHAILENDRA KUMAR AGARWAL ) 13. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS), GWALIOR DATED 19.08. 2014 FOR ASSESSMENT YEAR 2011-12 CHALLENGING THE DELETIO N OF ADDITION OF RS. 5.90 CR UNDER SECTION 68 OF THE INC OME TAX ACT. THE LD. CIT(APPEALS) DELETED THE ADDITION . IT IS EXPLAINED THAT THIS ADDITION WAS MADE BY ASSESSING OFFICER IN RESPECT OF AMOUNT PAID DURING THE FINANC IAL YEAR. NO AMOUNT WAS PAYABLE IN CHUKARA KHATA. ITA 462/2015 : ( SHRI SHAILENDRA KUMAR AGARWAL) 14. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS), GWALIOR DATED 12.06. 2015 FOR ASSESSMENT YEAR 2012-13 CHALLENGING THE DELETIO N OF ADDITION OF RS. 11,13,12,000/- ON ACCOUNT OF UNVERIFIABLE PURCHASES UNDER CHUKARA REGISTER. THE LD. CIT(APPEALS) DELETED THE ENTIRE ADDITION. IT IS EX PLAINED THAT THE ADDITION WAS MADE IN RESPECT OF PURCHASES OF WHICH PAYMENT IS MADE DURING THE YEAR AND NO AMOUNT WAS OUTSTANDING. 15. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUES IN THE REMAINING THREE APPEALS ARE SAME AS HAVE BEEN CONSIDERED IN ITA 461/2015 IN THE CASE OF SHRI VIPIN KUMAR AGARWAL. WE, THEREFORE, FIND THAT ISSUE IS SAME AND THEREFORE, 23 FOLLOWING THE REASONS FOR DECISION IN THE CASE OF S HRI VIPIN KUMAR AGARWAL IN ITA 461/2015, WE DISMISS REMAINING THREE DEPARTMENTAL APPEALS. 16. IN THE RESULT, THESE THREE REMAINING APPEALS AR E DISMISSED. 17. IN THE RESULT, ALL THE DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH FEBRUARY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/AGRA