Ram Niwas Gupta, New Delhi V. ACIT Circle-46(1), New Delhi

ITA 3787/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1026 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 30-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Assessee Lawyers: D.C. AGARWAL
• Keywords: Bogus purchase; Unexplained cash credit; Business income; Additional evidence; Third party statement; Tax effect; Reassessment proceedings; Bogus
• Section: 147; 68; 133(6); 44AB; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A NO.3787/DEL/2019 ASSESSMENT YEAR: 2015-16 RAM NIWAS GUPTA, OFFICE NO.307, 3 RD FLOOR EXPRESS TOWER, AZADPUR, COMMERCIAL COMPLEX, NEW DELHI VS. ACIT, CIRCLE-46(1) NEW DELHI. TAN/PAN: AHQPG8014M (APPELLANT) (RESPONDENT) I.T.A NO.4886/DEL/2019 ASSESSMENT YEAR: 2015-16 ACIT, CIRCLE-46(1) NEW DELHI. VS. RAM NIWAS GUPTA, OFFICE NO.307, 3 RD FLOOR EXPRESS TOWER, AZADPUR, COMMERCIAL COMPLEX, NEW DELHI TAN/PAN: AHQPG8014M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI D.C. AGARWAL, ADV. & SHRI R.N. POONIA, AR RESPONDENT BY: SMT. SULEKHA VERMA, CIT-DR DATE OF HEARING: 11 07 2019 DATE OF PRONOUNCEMENT: 11 09 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL BY THE REVENUE AGAINST THE IMPUGNE D ORDER DATED 19.03.2010, PASSED BY COMMISSIONER OF INCOME TAX I.T.A. NO.3787 & 4886/DEL/2019 2 (APPEALS)-XVI, NEW DELHI FOR THE QUANTUM OF ASSESSM ENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2009-10. 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHA LLENGED; FIRSTLY , ADDITION OF RS.15,29,13,896/- ON ACCOUNT OF DIFFE RENCE IN CREDIT BALANCE WITH ONE OF THE SUNDRY CREDITOR, M/S. ARCOTECH LIMITED WHICH HAS BEEN TREATED AS BOGUS PU RCHASES BY THE ASSESSING OFFICER; SECONDLY, ADDITION OF RS. 25 LACS ON ACCOUNT OF DIFFERENCE IN CREDIT BALANCE WITH SUNDRY CREDITOR, M/S. A.V. INFRAPROJECTS PVT. LTD. WHICH TOO HAS BEE N TREATED AS BOGUS PURCHASES; AND LASTLY , ADDITION OF RS.3,15,25,170/- BEING AMOUNT OF ADDITIONAL CREDIT BALANCE IN THE AC COUNT OF M/S. PROGRESSIVE ALLOYS INDIA PVT. LTD. AS BOGUS PU RCHASES. 3. WHEREAS, IN REVENUES APPEAL THE ONLY DISPUTE IS WITH REGARD TO DELETION OF UNEXPLAINED CREDIT OF RS.1,40 ,92,683/- OF M/S. METAL IMPEX. 4. THE FACTS IN BRIEF ARE THAT ASSESSEE IS AN INDIV IDUAL ENGAGED IN THE BUSINESS OF TRADING OF METALS AND AL LOYS. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS FIRST OF ALL, COMPARED THE TOTAL SALES AND NET PROFIT RATE FOR TH E ASSESSMENT YEARS 2014-15 AND 2015-16 IN THE FOLLOWI NG MANNER: A.Y. 2014-15 A.Y. 2015-16 SALES RS.901,184,322 RS.4,910,951,501 NET PROFIT RS. 1,251,627 RS.1,853,780 NP RATIO 0.14% 0.04% I.T.A. NO.3787 & 4886/DEL/2019 3 THE LD. ASSESSING OFFICER THEN FURTHER NOTED THAT A SSESSEE HAD SHOWN OUTSTANDING BALANCE IN THE ACCOUNT OF THE SUN DRY CREDITORS AMOUNTING TO RS.1,66,84,33,017/-, THE INF ORMATION AND LIST OF THE SUNDRY CREDITORS HAVE BEEN REPRODUC ED IN THE ASSESSMENT ORDER AT PAGES 2 AND 3. THERE WERE OVERA LL 30 PARTIES AND AT THE YEAR END THE BALANCE SHOWN UNDER THE HEAD SUNDRY CREDITORS OF RS.161,84,38,017/-. THE ASSESSEE WAS REQUIRED TO PROVIDE THE DETAILS OF ALL THE SUND RY CREDITORS AND FILE THEIR CONFIRMATIONS. AS NOTED BY THE ASSES SING OFFICER, MOST OF THE PARTIES HAVE FILED THEIR CONFIRMATIONS. HOWEVER, ON THE PERUSAL OF THE SAME, THE ASSESSING OFFICER NOTE D THAT; FIRSTLY , IN THE CASE OF M/S. METAL IMPEX, OUTSTANDING BALA NCE OF RS.2,68,14,003/- WAS SHOWN, WHEREAS THE CONFIRMA TION GIVEN BY THE SAID PARTY SHOWED BALANCE OF RS.1,27,2 1,140/- AS ON 31.03.2015. ACCORDINGLY, ASSESSING OFFICER AD DED THE DIFFERENCE OF RS.1,40,92,683/- BY INVOKING PROVISIO NS OF SECTION 68. SECONDLY , ON PERUSAL OF CONFIRMATION BALANCE IN THE CASE OF M/S. ARCOTECH LIMITED, THE ASSESSING OF FICER HAS MADE ADDITION OF RS.15,29,13,896/- ON THE GROUND TH AT THERE WAS NO RESPONSE BY THE ASSESSEE AND ACCORDINGLY THE SAME WAS ADDED ON THE GROUND THAT THERE WAS INCREASE IN CREDIT BALANCE BY THIS AMOUNT. THIRDLY , THE ASSESSING OFFICER MADE AN ADDITION OF RS.25 LACS ON ACCOUNT OF CREDIT BALA NCE WITH M/S. A.V. INFRAPROJECTS PVT. LTD., HOLDING THAT CON FIRMATION SUBMITTED BY THE ASSESSEE DID NOT HAVE EITHER ANY S IGNATURE OR STAMP OF THE PARTY. LASTLY , ADDITION WAS MADE ON ACCOUNT OF CREDIT BALANCE OF RS.3,15,25,170/- IN THE ACCOUN T OF M/S. I.T.A. NO.3787 & 4886/DEL/2019 4 PROGRESSIVE ALLOYS INDIA PVT. LTD ON SIMILAR REASON . ALL THESE ADDITIONS HAVE BEEN MADE ON THE GROUND THAT, SINCE THERE IS MISMATCH OF BALANCES IN THE ACCOUNTS SUBMITTED BY T HE PARTIES AND ACCOUNTS OF THE ASSESSEE AND THEREFORE, THESE ARE ALL BOGUS PURCHASES. NOT ONLY THAT THESE ALLEGED BO GUS PURCHASES HAVE ADDED U/S.68 AS UNEXPLAINED CREDIT. 5. BEFORE THE LD. CIT (A), ASSESSEE HAD FILED FOLLO WING DOCUMENTS AS ADDITIONAL EVIDENCES WITH REGARD TO TH E FOUR SUNDRY CREDITORS ON WHICH ASSESSING OFFICER HAS MAD E THE ADDITION. 1. COPY OF LEDGER ACCOUNT OF METAL IMPEX (PROP. NA VEEN TAYAL) FROM THE BOOKS OF APPELLANT AND CONTRA CONFIRMATION ALON G WITH COPY OF THEIR ITR. 2. COPY OF LEDGER ACCOUNT OF M/S ARCOTECH LTD. FRO M THE BOOKS OF APPELLANT AND CONTRA CONFIRMATION ALONG WITH COPY O F THEIR ITR. 3. COPY OF THE LEDGER ACCOUNT OF M/S A.V. INFRAPRO JECTS PVT. LTD. FROM THE BOOKS OF APPELLANT AND CONTRA CONFIRMATION AND BANK STATEMENT INDICATING THE PAYMENT OF OUTSTANDING AS ON 31.03.2 015. 4. COPY OF LEDGER ACCOUNT OF M/S. PROGRESSIVE ALLO Y INDIA PVT. LTD. FORM THE BOOKS OF APPELLANT AND CONTRA CONFIRMATION ALONG WITH COPY OF THEIR ITR. 5. COPIES OF BANK ACCOUNTS OF THE APPELLANT SHOWIN G THE DETAILS OF TRANSACTIONS WITH THE AFOREMENTIONED PARTIES. 6. LD. CIT (A) FORWARDED THE ADDITIONAL EVIDENCES T O THE ASSESSING OFFICER TO SUBMIT HIS REMAND REPORT. HOWE VER, THE ASSESSING OFFICER IN HIS FIRST REMAND REPORT STATED THAT THESE EVIDENCES SHOULD NOT BE ADMITTED. THEREAFTER, LD. C IT (A) I.T.A. NO.3787 & 4886/DEL/2019 5 AGAIN SENT BACK THE MATTER TO THE ASSESSING OFFICER TO COMMENT ON MERITS OF THE ADDITIONAL EVIDENCES AND V ERIFY THE SAME. THEN IN THE SECOND ROUND OF REMAND PROCEEDING S, ASSESSING OFFICER CONDUCTED HIS OWN INQUIRY AND AGA IN SENT NOTICES U/S.133(6) TO THESE FOUR PARTIES TO WHICH A LL OF THEM RESPONDED AND SUBMITTED HIS REMAND REPORT WHICH HAS A VERY VITAL BEARING ON THE ISSUES INVOLVED BEFORE US, WHI CH IS REPRODUCED HERE UNDER:- YOUR HONOUR HAS FORWARDED THE COPY OF ADDITIONAL E VIDENCE FILED BY THE ASSESSEE TO SUBMIT OUR REPORT ON MERITS OF T HE EVIDENCE FILED. TO-VERIFY THE MERIT AND GENUINENESS OF TRANSACTION AS PROVIDED IN ADDITIONAL EVIDENCE THE UNDER SIGNED ISSUED NOTICES U/S 133(6) FOR THE I.T. ACT 1961 TO THE PARTIES IN RESPECT OF WHICH TH E ADDITION WAS MADE BY THE A.O. REPORT ON MERITS OF THE ADDITIONAL EVID ENCE IS AS UNDER: SI. NO. ADDITIONAL EVIDENCE FILED IN RESPECT OF SUNDRY CREDITOR CREDIT BALANCE /ADDITION REMARKS (IN RESPONSE TO NOTICE U/S 133(6)) 1 M/S METAL IMPEX (DIFFERENCE OF AMOUNT IN PURCHASE LEDGER AND CONFIRMATION RECEIVED WAS ADDED BACK TO THE INCOME OF THE ASSESSEE) RS. 1,40,92,683/- THE CONFIRMATION WAS RECEIVED AND THE CREDIT BALANCE OF THE ADDITIONAL EVIDENCE MATCHES WITH THE PURCHASE LEDGER PROVIDED IN ADDITIONAL EVIDENCE. THE DIFFERENCE WAS BECAUSE OF CHEQUES ISSUED FOR PAYMENTS WHICH WERE NOT CONSIDERED AT THE TIME OF ASSESSMENT. I.T.A. NO.3787 & 4886/DEL/2019 6 2 M/S ARCOTECH LTD. (NO CONFIRMATION WAS RECEIVED, DIFFERENCE OF CLOSING BALANCE AND OPENING BALANCE WAS ADDED) RS. 15,29,13,896/ - THE CONFIRMATION RECEIVED AS ADDITIONAL EVIDENCE AND THE ONE RECEIVED THROUGH THE NOTICE U/S 133(6) ARE MATCHING IN CREDIT BALANCE. 3. M/S A.V. INFRAPROJECTS PVT. LTD (CONFIRMATION WAS CONSIDERED INCOMPLETE AS IT WAS UNSIGNED AND WAS NOT BEARING ANY STAMP OF RS.25,00,000/ - THE CONFIRMATION WAS RECEIVED WHICH IS DULY SIGNED AND STAMPED ALSO THE CREDIT BALANCE TALLIES. 4. M/S PROGRESSIVE ALLOY INDIA PVT. LTD (CONFIRMATION RECEIVED WAS NOT HAVING DETAILS OF TRANSACTION) RS.3,15,25,17 0 THE CONFIRMATION RECEIVED HAS DETAILS OF THE TRANSACTIONS AND THE CREDIT BALANCE TALLIES. WITHOUT PREJUDICE TO ABOVE, THERE BEING NO SUFFICIE NT CAUSE OF FAILURE, SUCH ADDITIONAL EVIDENCE OF ASSESSEE SHOUL D NOT BE ENTERTAINED AT THIS STAGE. MERE SUBMISSION OF THE L EDGER ACCOUNTS AND BANK STATEMENTS DO NOT PROVE THE GENUINENESS OF THE PURCHASES AND SAME HAD BEEN PROVED BOGUS DURING ASSESSMENT PROCEE DINGS. THE PURCHASE BILLS/BILTY/CHALLANS WERE NOT PROVIDED BY THE ASSESSEE, FAILING EXAMINATION THAT THE GOODS WERE REALLY SENT BY THE SAID CREDITORS TO THE ASSESSEE. 7. LD. CIT (A) AFTER DETAILED DISCUSSION AND REASON ING ADMITTED THE ADDITIONAL EVIDENCES AND TOOK ALL THE DOCUMENTS ON RECORD INCLUDING THE REMAND REPORT AND SUBMISSIO NS /EXPLANATION OF THE ASSESSEE. THE LD. CIT (A) HAS E VEN INCORPORATED THE SUBMISSIONS AND THE REASONING GIVE N BY THE ASSESSEE IN REBUTTAL OF ASSESSING OFFICERS FINDING AGAINST THE ASSESSMENT ORDER AND THE REMAND REPORT WHICH FOR TH E SAKE OF READY REFERENCE IS REPRODUCED HEREUNDER: I.T.A. NO.3787 & 4886/DEL/2019 7 ADDITION MADE NAME OF PARTY / AMOUNT IN RS. FINDINGS/REASON IN BRIEF AS GIVEN BY AO IN THE ORDER- WITH RELEVANT PAGE/PARA OF THE ORDER OUR REMARKS M/S METAL IMPEX 1,40,92,863/- CONFIRMATION DOES NOT SHOW DETAILS OF TRANSACTIONS BETWEEN THE PARTIES. DIFFERENCE IN BALANCE AS PER THE CONFIRMATION AND BALANCE AS PER LEDGER ACCOUNT THIS CANNOT BE REASON FOR ADDITION. DULY SIGNED CONFIRMATION WAS FILED. THIS CANNOT BE REASON FOR ADDITION AS NO OPPORTUNITY TO RECONCILE THE DIFFERENCE WAS ALLOWED. WE ARE ALSO FILING COPY OF ACCOUNT FROM OUR BOOKS, DULY CONFIRMED COPY OF ACCOUNT FROM THE BOOKS OF M/S METAL IMPEX (PROP. NAVEEN TAYAL), COPY OF THEIR ITR, COPY OF BANK STATEMENT FOR RELEVANT AND SUBSEQUENT YEAR OF THE APPELLANT. THE AFORESAID DOCUMENTS ARE NOT STRICTLY SPEAKING ADDITIONAL EVIDENCES BUT THE SAME MAY KINDLY, BE TREATED AS ADDITIONAL EVIDENCE AND ADMITTED IN VIEW OF RULE 46A OF THE I.T. RULES AS THE AO HAD NOT ISSUED ANY SHOW CAUSE NOTICE AND NEVER ASKED US TO PRODUCE BOOKS OF ACCOUNTS ALTHOUGH THE ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT AND THE REPORT OF TAX AUDIT WAS FILED. (PAGE NO. 01 TO 03 OF THE PAPER BOOK) M/S. ACROTECH LTD. 15,29,13,896/- NO CONFIRMATION IS FILED EVEN IN RESPONSE TO THE NOTICE U/S 133(6). DISALLOWANCE WAS MADE ON ACCOUNT OF AMOUNT ADDED IN THE ACCOUNT DURING THE YEAR AS BOGUS PURCHASES NON RECEIPT OF CONFIRMATION CANNOT BE REASON FOR ADDITION AS THE PARTY IS A WIDELY HELD COMPANY BEING QUOTED IN STOCK EXCHANGE. NO ADDITION CAN BE MADE ON ACCOUNT OF AMOUNT ADDED DURING THE YEAR AS I.T.A. NO.3787 & 4886/DEL/2019 8 ALL THE PURCHASES ARE GENUINE. WE ARE ALSO FILING COPY OF ACCOUNT FROM OUR BOOKS, DULY CONFIRMED COPY OF ACCOUNT FROM THE BOOKS OF M/S ARCOTECH LIMITED, COPY OF THEIR ITR, COPY OF BANK STATEMENT FOR RELEVANT AND SUBSEQUENT YEAR OF THE APPELLANT. THE AFORESAID DOCUMENTS ARE NOT STRICTLY SPEAKING ADDITIONAL EVIDENCES BUT THE SAME MAY KINDLY, BE TREATED AS ADDITIONAL EVIDENCE AND ADMITTED IN VIEW OF RULE 46A OF THE I.T. RULES AS THE AO HAD NOT ISSUED ANY SHOW CAUSE NOTICE AND NEVER ASKED US TO PRODUCE BOOKS OF ACCOUNTS ALTHOUGH THE ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT AND THE REPORT OF TAX AUDIT WAS FILED. (PAGE NO. 04 TO 24 OF THE PAPER BOOK) M/S. AV INFRA PROJECTS (P) LTD. 25,00,000/- CONFIRMATION DOES NOT HAVE SIGNATURE AND STAMP OF THE PARTY. CONFIRMATION DOES NOT SHOW TRANSACTIONS BETWEEN THE PARTIES. COPY OF ACCOUNT FROM THE BOOKS OF THE APPELLANT HAS BEEN FILED. NON FILING OF CONFIRMATION CANNOT BE REASONS FOR ADDITION AS ALL THE TRANSACTION ARE GENUINE AND DULY REFLECTED IN THE ACCOUNTS. WE ARE ALSO FILING COPY OF ACCOUNT FROM OUR BOOKS, DULY CONFIRMED COPY OF ACCOUNT FROM THE BOOKS OF M/S A.V. INFRAPROJECTS PVT. LTD., COPY OF THEIR ITR, COPY OF BANK STATEMENT FOR RELEVANT AND SUBSEQUENT YEAR OF THE APPELLANT. I.T.A. NO.3787 & 4886/DEL/2019 9 THE AFORESAID DOCUMENTS ARE NOT STRICTLY SPEAKING ADDITIONAL EVIDENCES BUT THE SAME MAY KINDLY, BE TREATED AS ADDITIONAL EVIDENCE AND ADMITTED IN VIEW OF RULE 46A OF THE I. T. RULES AS THE AO HAD NOT ISSUED ANY SHOW CAUSE NOTICE AND, NEVER ASKED US TO PRODUCE SMB. ACCOUNTS ALTHOUGH THE ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT AND THE REPORT OF TAX AUDIT WAS FILED. (PAGE NO. 25 TO 28 OF THE PAPER BOOK) M/S PROGRESSIVE ALLOYS INDIA (P) LTD. 3,15,25,170/- CONFIRMATION DOES NOT SHOW TRANSACTIONS BETWEEN THE PARTIES. M/S PROGRESSIVE ALLOYS (P) LTD. FILED THE SAME CONFIRMATION AS SUBMITTED BY THE ASSESSEE AMOUNT ADDED IN THE ACCOUNT DURING THE YEAR IS ADDED AS BOGUS PURCHASES THIS CANNOT BE REASON FOR ADDITION. DULY SIGNED CONFIRMATION WAS FILED. FILING OF SAME CONFIRMATION RATHER PROVES THAT THE TRANSACTIONS ARE GENUINE. CONFIRMATION HAS BEEN FILED BY THE APPELLANT AND ALSO BY THE PARTY IN RESPONSE TO NOTICE U/S 133(6). WE ARE ALSO FILING COPY OF ACCOUNT FROM OUR BOOKS, DULY CONFIRMED COPY OF ACCOUNT FROM THE BOOKS OF M/S PROGRESSIVE ALLOYS (INDIA) PVT. LTD., COPY OF THEIR ITR, COPY OF BANK STATEMENT FOR RELEVANT AND SUBSEQUENT YEAR OF THE APPELLANT. THE AFORESAID DOCUMENTS ARE NOT STRICTLY SPEAKING ADDITIONAL EVIDENCES BUT THE SAME MAY KINDLY, BE TREATED AS ADDITIONAL EVIDENCE AND ADMITTED IN VIEW OF RULE 46A OF THE I. I.T.A. NO.3787 & 4886/DEL/2019 10 T. RULES AS THE AO HAD NOT ISSUED ANY SHOW CAUSE NOTICE AND NEVER ASKED US TO PRODUCE BOOKS OF ACCOUNTS ALTHOUGH THE ACCOUNTS ARE AUDITED U/S 44AB OF THE ACT AND THE REPORT OF TAX AUDIT WAS FILED. (PAGE NO. 29 TO 32 OF THE PAPER BOOK) 8. LD. CIT (A) AFTER INCORPORATING THE CONFIRMATION OF ACCOUNTS BY THE PARTIES HAS DECIDED INDEPENDENTLY A LL THE CREDITORS. IN SO FAR AS M/S. METAL IMPEX IS CONCERN ED, THE SAME HAS BEEN DELETED ON THE GROUND THAT DISCREPANC Y IN CREDIT BALANCE WAS MERELY ON ACCOUNT OF DIFFERENCE OF TIMINGS OF POSTING THE CREDITS OF THE CHEQUE AMOUNT IN THE RESPECTIVE ACCOUNTS, BECAUSE CHEQUES ISSUED FOR PAYMENTS WERE NOT CONSIDERED AT THE TIME OF ASSESSMENT. THE MISMATCH WAS ON THE GROUND OF THAT CHEQUES WERE PAID ON 31.03.2015, BUT WAS CLEARED IN APRIL/ MAY OF 2015 AND SINCE CHEQUES WER E CONSIDERED BY THE ASSESSEE IN THE LEDGER ACCOUNT AS ON 31 ST MARCH 2015 AND PARTY HAS SHOWN THESE AMOUNTS IN APR IL AND MAY, 2015. ASSESSEE TO PROVE THIS HAD FILED COPY OF BANK STATEMENT TO SUBSTANTIATE THE CLAIM THAT CHEQUE ISS UED ON 31.03.2015 WERE DEBITED IN APRIL/MAY, 2015. HENCE, ACCOUNT WAS RECONCILED. AFTER VERIFYING THE ACCOUNTS OF BOT H THE PARTIES AND BANK STATEMENT, CIT (A) HAS DELETED THI S AMOUNT. AGAINST THESE FINDINGS THE DEPARTMENT HAS COME IN A PPEAL. I.T.A. NO.3787 & 4886/DEL/2019 11 9. IN SO FAR AS M/S. ARCHOTECH LTD. IS CONCERNED, T HE LD. CIT (A) DESPITE NOTING THAT ASSESSING OFFICER HAD M ADE INQUIRY DIRECTLY FROM THE PARTY AND HAS COMMENTED THAT CRED IT BALANCE OF THE CREDITOR MATCHES WITH THE ASSESSEE A FTER RECONCILIATION AND LEDGER ACCOUNT OF THE ASSESSEE I N THE BOOKS OF ACCOUNT OF THE CREDITOR DOES MATCH WITH THE ACCO UNT OF THE ASSESSEE AND ALSO MATCHED WITH THE CONFIRMATION ACC OUNT SENT BY THE CREDITORS IN RESPONSE TO THE NOTICE U/S .133(6), HAS STILL PROCEEDED TO CONFIRM THE ADDITION. SHE HAS IN FERRED THAT IT WAS AN ATTEMPT ONLY TO MATCH THE INDIVIDUAL ENTR Y WHICH HAS NO EVIDENTIARY VALUE AND WITHOUT ANY PROPER REB UTTAL OF THESE VITAL FACTS THE ADDITION HAS BEEN CONFIRMED. 10. SIMILARLY WITH REGARD TO A.V. INFRAPROJECTS PVT . LTD., SHE NOTED THAT ASSESSING OFFICER HAS COMMENTED THAT THE CONFIRMATION RECEIVED IS NOW DULY SIGNED AND STAMPE D AND ALSO THE CREDIT BALANCE ARE TALLYING AND DESPITE NO TING ALL THAT THE LEDGER ACCOUNT IN THE BOOKS OF THE CREDITOR AND IN THE BOOKS OF THE ASSESSEE ARE MATCHING, BUT STILL HELD THAT THERE ARE SOME VARIATION IN THE DATES AND ON THIS BASIS S HE HAS CONFIRMED THE ADDITION. 11. LASTLY, WITH REGARD TO M/S. PROGRESSIVE ALLOYS INDIA (P) LTD AGAIN ASSESSING OFFICER IN HIS REMAND REPORT HA S STATED THAT CONFIRMATION RECEIVED HAS ALL THE DETAILS OF T HE TRANSACTION AND THE CREDIT BALANCES ARE TALLYING. H OWEVER, THE LD. CIT (A) PROCEEDED TO CONFIRM THE ADDITION ON TH E GROUND THAT PURCHASE BILLS ETC. WERE NOT PROVIDED BY THE A SSESSEE. I.T.A. NO.3787 & 4886/DEL/2019 12 12. WE HAVE HEARD BOTH THE PARTIES AT LENGTH AND ALSO PERUSED THE RELEVANT MATERIAL AND FINDINGS GIVEN IN THE IMPUGNED ORDER REFERRED TO AT THE TIME OF HEARING. THE MAIN CONTENTION OF THE LD. CIT-DR WAS THAT ASSESSING OFF ICER HAD MADE INQUIRY AND EVEN THOUGH IN THE REMAND PROCEEDI NGS THE ACCOUNT GOT TALLIED, BUT MERE SUBMISSION OF LEDGER ACCOUNTS AND BANK STATEMENT DOES NOT PROVE THE GENUINENESS O F THE PURCHASE BECAUSE BILL-WISE ENTRIES COULD NOT BE PRO VED AND CONFIRMATION OF ACCOUNT RECEIVED DURING THE COURSE OF REMAND PROCEEDINGS WERE MERELY MAKE BELIEVE EXPLANATION. H E THUS, STRONGLY RELIED UPON THE OBSERVATIONS AND FINDINGS OF CIT (A). 13. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONCE AN INDEPENDENT VERIFICATION HAS BEEN MADE BY THE ASSESSING OFFICER BY CALLING THE CONFIR MATION U/S.133(6), THEN GENUINENESS OF THE TRANSACTION OF THE SUNDRY CREDITORS CANNOT BE DOUBTED. HE FURTHER SUBMITTED T HAT FOR THE ASSESSMENT YEAR 2014-15, RE-ASSESSMENT PROCEEDI NGS U/S 147 WERE RE-INITIATED PRECISELY ON THE SAME GROUND AND AFTER DETAILED INQUIRY FROM THE SAME VERY PARTIES THE ASS ESSING OFFICER HAS NOT MADE ANY ADDITION. IN SUM AND SUBST ANCE, HIS MAIN CONTENTIONS WERE AS UNDER: (I) THE ADDITIONS WERE MADE MAINLY FOR THE REASON S THAT CONFIRMATION WAS NOT RECEIVED FROM THE PURCHAS E CREDITORS IN RESPONSE TO NOTICE U/S 133(6), WHICH W ERE SUBSEQUENTLY PROVIDED TO LD. CIT (A) AS ADDITIONAL EVIDENCE WHICH WERE ACCEPTED BY HIM. I.T.A. NO.3787 & 4886/DEL/2019 13 (II) IN THE REMAND REPORT, THE LD. AO HAD ACCEPTED THAT ALL THE BALANCES IN THE BOOKS OF PURCHASE CRED ITORS TALLY WITH THE BALANCES IN THE BOOKS OF THE ASSESSE E. (III) IN THE REASSESSMENT PROCEEDINGS FOR AY 2014- 15 WAS REOPENED U/S 147 ON THE BASIS OF ASSESSMENT ORD ER FOR AY 2015-16, THE LD. AO CALLED FOR THE INFORMATI ON FROM SAME SET OF PURCHASE CREDITORS U/S 133(6), AN D THEIR ACCOUNTS GOT TALLIED AND THE BALANCES WERE ACCEPTED . THE ASSESSMENT WAS MADE ON THE RETURNED INCOME. (IV) THE ADDITIONS IN THE AY 2015-16 HAVE BEEN CONFIRMED ON THE BASIS OF INCORRECT FINDING THAT AS SESSEE DID NOT SUBMIT COPIES OF PURCHASE BILLS AND TOTALLY IGNORING THE REMAND REPORT AND FINDING IN THE REASSESSMENT-ORDER FOR AY 2014-15. 14. NOW HERE IN THIS CASE, THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF FOUR SUNDRY CRE DITORS ON THE GROUND THAT THE ACCOUNTS SUBMITTED BY THEM ARE NOT TALLYING WITH THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THERE WERE CERTAIN DIFFERENCES IN THE BALANCES BETWEEN TH E ACCOUNTS OF THE PARTIES AND THE ASSESSEE. ONE VERY IMPORTANT FACT IS THAT NOWHERE THE ASSESSING OFFICER HAS REJECTED THE TRADING RESULT OR THE BOOKS OF ACCOUNT. IF ENTIRE BOOKS OF ACCOUNT ALONG WITH SALE AND PURCHASE BILLS, LEDGER ACCOUNTS AND BANK STATEMENT, ETC. HAVE BEEN FILED, THEN MERELY BECAUS E THERE WERE SOME DIFFERENCE EITHER IN OPENING AND CLOSING BALANCE IN THE ACCOUNTS OF THE CREDITORS, IT CAN BE HELD THAT THE I.T.A. NO.3787 & 4886/DEL/2019 14 PURCHASES MADE FROM THE PARTIES QUA THOSE AMOUNTS A RE BOGUS. IF PURCHASES ARE BOGUS, THAT MEANS ASSESSEE MUST HAVE MADE INVESTMENT OUTSIDE THE BOOKS OF ACCOUNT A ND IN THAT SITUATION, SECTION 68 CANNOT BE INVOKED AND IF ANY ADDITION AT ALL COULD HAVE BEEN MADE CAN BE U/S.68. HERE IN THIS CASE ASSESSEE HAS DULY EXPLAINED THE NATURE AN D SOURCE OF THE CREDIT THAT THESE WERE ON ACCOUNT OF PURCHAS ES MADE BY THE ASSESSEE FROM THESE PARTIES WHO HAVE NOT ONLY C ONFIRMED THE PURCHASES BUT ALSO WAS TALLIED WITH THEIR RESPE CTIVE ACCOUNT WITH THE PURCHASE AND SALES BILLS. 15. ONE VERY IMPORTANT FACT THAT HERE IN THIS CASE IS THAT, DURING THE COURSE OF APPELLATE PROCEEDINGS AND IN R EMAND PROCEEDINGS, INQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER DIRECTLY FROM THESE PARTIES, WHO HAVE NOT ONLY CONF IRMED THE TRANSACTION BUT HAVE ALSO FILED THEIR COPY OF LEDGE R ACCOUNTS ALONG WITH DETAILS AND BANK STATEMENTS. AFTER VERIF YING THESE DETAILS, THE ASSESSING OFFICER HAS CATEGORICALLY AC CEPTED IN HIS REMAND REPORT THAT THE CONFIRMATIONS HAVE BEEN RECE IVED FROM THE PARTIES AND THEY ARE MATCHING WITH THE CREDIT B ALANCE OF THE ASSESSEE AND BOTH THE ACCOUNTS ARE TALLYING. DE SPITE SUCH A CATEGORICAL FINDING, LD. CIT (A) HAS STILL PROCEE DED TO CONFIRM THE ADDITION ON A VERY LAME REASON. ON ONE HAND, LD . CIT (A) ACCEPTS THAT THE CONFIRMATION OF CREDIT BALANCES OF THE CREDITOR HAVE BEEN RECEIVED DIRECTLY FROM THE INQUIRY MADE B Y THE ASSESSING OFFICER AND LEDGER ACCOUNT AS APPEARING I N THE BOOKS OF ACCOUNT OF THE CREDITORS MATCHES WITH THE ACCOUNT OF THE ASSESSEE AND ALSO MATCHES WITH THE CONFIRMATION ACCOUNT I.T.A. NO.3787 & 4886/DEL/2019 15 SUBMITTED BY THE CREDITOR, BUT STILL PROCEEDS TO DR AW ADVERSE INFERENCE. THE PREMISE OF THE ADDITION MADE BY THE ASSESSING OFFICER WAS THAT CERTAIN BALANCES DO NOT MATCH WITH THE ACCOUNTS OF THE CREDITORS. NOW WHEN THE DIFFERENCE HAS BEEN RECONCILED AND BALANCE HAS BEEN EXPLAINED AND ACCOU NTS GOT TALLIED, THEN WHERE IS THE QUESTION OF DRAWING ANY ADVERSE INFERENCE. EVEN IF IN THE FIRST INSTANCE THE BALANC E WAS NOT TALLYING WITH THE ACCOUNTS OF THE CREDITORS, THEN A LSO, HOW THE AUTHENTICITY AND CREDIBILITY OF THIRD PARTY ACCOUNT S IS GIVEN MORE PRECEDENCE TO THE ASSESSEES ACCOUNT WHEN ASSE SSEE HAS SHOWN PURCHASE BILL WISE DETAILS AND CORRESPONDING SALE AND STOCK, MATCHING WITH THE BANK ACCOUNTS AND ENTIRE TRANSACTION IS THROUGH CHEQUE. IF THE BOOKS ACCOUNT S ALONGWITH PURCHASE AND SALES HAVE NOT BEEN DOUBTED THEN ACCOUNT OF SUNDRY CREDITORS CANNOT BE DOUBTED WHEN THERE IS RUNNING ACCOUNT AND ALL THE PURCHASE HAVE BEEN SETT LED EITHER IN THIS YEAR OR IN SUBSEQUENT YEAR. 16. IN SO FAR AS THE ALLEGATION OF PURCHASE BILLS A RE CONCERNED, THE LD. COUNSEL BEFORE US HAS CATEGORICA LLY POINTED OUT THAT THE ASSESSEE VIDE SUBMISSION DATED 17.09.2 018 HAD SPECIFICALLY STATED BEFORE THE LD. CIT (A) THAT ALL THE BILLS OF PURCHASE AND SALES WERE AVAILABLE WHICH WERE ALSO P RODUCED BEFORE THE ASSESSING OFFICER AND SAME CAN ALSO BE P RODUCED ONCE AGAIN IF SO DESIRED FOR NECESSARY VERIFICATION . HE ESPECIALLY DREW OUR ATTENTION TO THE LETTER WRITTEN TO THE LD, CIT (A). DESPITE SUCH A CATEGORICAL AVERMENT, AND W ITHOUT ANY I.T.A. NO.3787 & 4886/DEL/2019 16 SUCH VERIFICATION OF THE MATERIAL ON RECORD, THE AD DITION HAS BEEN CONFIRMED. 17. COMING TO THE ADDITION OF RS.15,29,13,806/- O N ACCOUNT OF M/S. ARCOTECH LTD., THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD FILED LEDGER ACCOUNT OF THE SAID PARTY FROM WHICH CERTAIN BALANCE OUTSTANDING WERE N OTED BY THE ASSESSING OFFICER. AT THE FAG END HE HAD TRIED TO SEND NOTICE U/S. 133(6) TO THE SAID CREDITOR BUT THE RES PONSE COULD NOT BE RECEIVED BY THE ASSESSING OFFICER TILL THE C OMPLETION OF THE ASSESSMENT. HOWEVER, IN THE REMAND PROCEEDINGS AGAIN INQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER AND THE CONFIRMATIONS ALONG WITH BANK STATEMENTS, ITRS AND LEDGER ACCOUNT WAS RECEIVED IN RESPONSE TO NOTICE U/S 133( 6) AND AFTER VERIFICATION HE FOUND THAT THE CREDIT BALANCE HAVE BEEN RECONCILED OR IS MATCHING WITH THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAD ALSO STATED THAT BILLS O F PURCHASE AND SALES WERE AVAILABLE AND ARE TALLYING WITH THE ACCOUNTS. THUS, WHEN ACCOUNTS AND THE AMOUNT STANDS RECONCILE D AND PURCHASES ARE NOT IN DOUBT, THEN NO ADVERSE INFEREN CE CAN BE DRAWN ON THE BASIS OF FINDING GIVEN IN THE ASSESSME NT PROCEEDINGS THAT BALANCE COULD NOT BE RECONCILED. U NDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON AS TO HOW ADDITION COULD BE MADE OR CONFIRMED. 18. SIMILARLY, WITH REGARD TO THE A.V. INFRAPROJE CTS PVT. LTD. AND M/S. PROGRESSIVE ALLOYS INDIA PVT. LTD. ALSO SI MILAR CONFIRMATIONS WITH THE LEDGER ACCOUNT, BANK STATEME NTS, ITRS I.T.A. NO.3787 & 4886/DEL/2019 17 ETC. HAVE BEEN RECEIVED AND ASSESSING OFFICER HAS F OUND THAT THE BALANCE SHOWN BY THE PARTY AND THE ASSESSEE ARE TALLYING AND ALL THE TRANSACTIONS ARE MATCHING FROM THE BANK STATEMENT. THUS, UNDER THESE CIRCUMSTANCES, NO ADDI TION COULD HAVE BEEN MADE. OTHERWISE ALSO, IF THE AMOUNT REPRESENTS PURCHASES MADE BY THE ASSESSEE ON CREDIT THAT DOES NOT MEAN THAT PROVISION OF SECTION 68 ARE ATTR ACTED, IF ON INQUIRY MADE IN THE REMAND PROCEEDINGS THERE IS NO ADVERSE MATERIAL AGAINST THE ASSESSEE. THUS, NO ADDITION CA N BE MADE. ACCORDINGLY, THE ADDITIONS MADE BY THE ASSESSING OF FICER AND CONFIRMED BY THE LD. CIT (A) ARE DIRECTED TO BE DEL ETED. 19. IN SO FAR AS REVENUES APPEAL IS CONCERNED, FIR ST OF ALL ON THE MERITS, NO ADDITION IS WARRANTED, AS IT WAS FOU ND THAT DIFFERENCE WAS ON ACCOUNT OF CHEQUES ISSUED FOR PAY MENTS WHICH HAS BEEN DEBITED IN THE BOOKS OF ACCOUNT OF T HE ASSESSEE ON 31.03.2015, BUT WAS CLEARED IN THE SUBS EQUENT MONTH AND HAS BEEN SHOWN BY THE CREDITORS IN THOSE MONTHS, HENCE NO ADDITION IS CALLED FOR. MOREOVER, NOW IN T HE LIGHT OF THE NEW CBDT CIRCULAR NO.17/2019, THE TAX EFFECT ON THE DISPUTED ISSUE IS MUCH BELOW RS.50 LACS, AND THEREF ORE, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 20. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS A LLOWED AND APPEAL OF THE REVENUE IS DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2019. I.T.A. NO.3787 & 4886/DEL/2019 18 SD/- SD/- DATED: 11 TH SEPTEMBER, 2019 PKK: [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER