I.T.O.-2(3), Gwalior V. Sh. Kishore Valecha, Gwalior

ITA 390/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0597 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAKESH GUPTA
• Assessee Lawyers: S L MAURYA
• Keywords: Reopening of assessment; Unexplained cash credit; Business income; Income from undisclosed sources; Loose papers; Principle of natural justice; Opportunity of cross examination; Source of fund; Corroborative evidences; Assessment record; Reassessment proceedings; Borrowed satisfaction
• Section: 133(6); 131; 148; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 390/AGRA/2012 ASSTT. YEAR : 2008-09 INCOME-TAX OFFICER, VS. SHRI KISHORE VALECHA, WARD 2(3), GWALIOR. PROP. M/S. ACME ENTERPRISES , SENAPATI KI BAJARIYA, MADHOGANJ, LASHKAR, GWALIOR. (PAN: ABDVP8691C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.L. MAURYA, SR. D.R. RESPONDENT BY : SHRI RAKESH GUPTA, ADVOCATE DATE OF HEARING : 18.07.2013 DATE OF PRONOUNCEMENT OF ORDER : 26.07.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 30.05.2012 FOR THE ASSESSMENT YEAR 20 08-09, CHALLENGING THE DELETION OF ADDITION OF RS.3,60,03,133/- U/S. 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED CASH CREDITS BEING THE FUND UTILIZED FO R ISSUING DEMAND DRAFT THROUGH M/S. GWALIOR CITIZEN SAKH SAHAKARITA MARYADIT, GWAL IOR OF SHRI NARAINDAS RATHORE. ITA NO. 390/AGRA/2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED RETURN ON 30.09.2008 DECLARING BUSINESS INCOME FORM M/S ACME ENTERPRISES AT RS. 451239/- ALONG WITH INTEREST INCOME AT RS. 8321/-. AFTER CLAIMING DEDUCTIONS UNDER CHAPTER VIA, RETURN INCOME OF RS. 344560/- HAS BEEN SHOWN, NOTICE U/S. 148 HAS BEEN ISSUED ON 24/17.12.2010 AFTER RECORDING REASON S VIDE ORDER SHEET ENTRY DT. 24.12.2010 AS UNDER:- 24.12.2010: SEARCH U/S. 132 WAS CONDUCTED IN THE CASE OF M/S. GWALIOR CITIZEN SAKH SAHAKARI MARYADIT, GWALIOR. BO OKS OF ACCOUNTS & DOCUMENTS WERE SEIZED SECURITY OF THE BOOKS OF AC COUNTS REVEALED THAT THERE WAS A LEDGER ACCOUNT IN THE NAME OF SHRI NARAIN DAS RATHORE. IT HAS BEEN NOTICED THAT FROM THIS ACCOUNT AT PAR CHEQUES DEMAND DRAFT WERE PREPARED IN FAVOUR OF M/S. U-FLEX LIMITED M/S. VACMATE PACKAGING INDIA (P) LTD. AND M/S. POLYPLEX CORPORATION LTD. ENQUIRY MADE FROM THREE COMPANIES REVEALED THA T THEY RECEIVED THE SAID CHEQUES /DEMAND DRAFT AS PAYMENTS AGAINST GOODS WHICH HAVE BEEN SOLD TO SHRI KISHORE VALECHA, PROP. ACME ENTER PRISES. MADHOGANJ, LASHKAR, GWALIOR. THE DETAILS OF CHEQUE ISSUED IN FAVOUR OF ABOVE THREE COMPANIES ALSO INDICATE THAT THESE C HEQUES WERE PREPARED BY ONE KISHORE OR KISHORE ACME. FROM THE ABOVE THIS IS QUITE CLEAR THAT THE TRANSAC TION REVEALED IN THE LEDGER ACCOUNT OF SHRI GWALIOR CITIZEN SAKH SAHAKARI SAMITI MARYADIT, IN FACT RELATES TO SHRI KISHORE VALECHA, PROP. M/S. ACME ENTERPRISES, MADHOGANJ, LASHKAR, GWALIOR. TOTAL AMO UNT OF THESE TRANSACTIONS FOR F.Y. 2007-08 COMES TO RS. 36003133 /- THESE TRANSACTIONS DO NOT APPEAR TO HAVE BEEN ACCOUNTED F OR IN THE BOOKS OF SHRI KISHORE VALECHA PROP. M/S. ACME ENTERPRISES AN D THE SAME REMAIN UNDISCLOSED AND UNEXPLAINED. THE TOTAL AMOUNT OF RS. 36003133/- IS THE ASSESSEE S INCOME FROM UNDISCLOSED SOURCES WHICH HAVE ESCAPED ASSESSM ENT. HENCE, ISSUED NOTICE U/S. 148. SD/- ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-2, GWALIOR. ITA NO. 390/AGRA/2012 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSEE HAS BEEN ASKED TO EXPLAIN HIS TRANSACTION WITH THREE COMPANIES VIZ. M /S. U-FLEX LTD., M/S. POLYPLEX CORPORATION LTD. & M/S. VACMAT PACKAGING INDIA (P) LTD. ON THE BASIS OF AT PER CHEQUES/DRAFTS ISSUED IN THEIR NAME AND PREPARED BY ONE KISHORE OR KISHORE ACME AS PER BANK ACCOUNT OF SHRI NARAIN DAS RATHOR E IN GWALIOR CITIZEN SAKH SAHAKARITA SAMITI (GCSSSM), GWALIOR FOUND DURING CO URSE OF SEARCH OPERATION CARRIED OUT INCASE OF GCSSSM. A.O. HAS ASSESSED THE TOTAL OF THESE TRANSACTIONS AS UNEXPLAINED ON THE BASIS OF ENQUIRY REPORT OF ADIT (INV.) GWALIOR, ASSESSEES SUBMISSIONS MADE BEFORE HIM DURING POST SEARCH ENQU IRIES AND ASSESSEES FAILURE TO APPEAR HIMSELF BEFORE A.O. AND TO PRODUCE THE PERSO N SH. MANOJ, HIS EMPLOYEE AND ALLEGEDLY THE SAME PERSON IN WHOSE HAND WRITING DRA FTS HAVE BEEN PREPARED FROM ASSESSEES BANK ACCOUNTS AT IDBI & BANK OF RAJASTHA N IN FAVOUR OF ABOVE MENTIONED THREE COMPANIES. ASSESSEES SUBMISSIONS T HAT HE HAS NOT CARRIED OUT ALLEGED TRANSACTION WITH M/S. VACMAT PACKAGING IND IA PVT. LTD. ALONGWITH FILING OF CONFIRMED COPY OF ACCOUNTS OF OTHER 2 COMPANIES, BU T NOT REFLECTING TRANSACTIONS MADE THROUGH ACCOUNT OF MR. NARAIN DAS RATHORE IN G WALIOR CITIZEN SAKH SAHAKARITA SAMITI MARYADIT, HAVE NOT BEEN ACCEPTED BY THE A.O. FOR NON PRODUCTION OF HIS EMPLOYEE VIZ. SH. MANOJ AS PER TH E ASSESSMENT ORDER. ITA NO. 390/AGRA/2012 4 3. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A ). DURING THE COURSE OF APPEAL PROCEEDINGS, THE ASSESSEE HAS SUBMITTED AS U NDER IN RESPECT OF ADDITION MADE BY THE A.O. 2.1 THE INCOME TAX DEPARTMENT HAS OBTAINED CERTAIN DATA AT THE TIME OF SEARCH CONDUCTED ON M/S GWALIOR CITIZEN SAKH SAHAKA RITA MARYADIT, GWALIOR WHEREBY A LIST OF TRANSACTIONS WAS PREPARED. THE LE ARNED AO HAD PROVIDED THE SAME LIST OF TRANSACTIONS TO THE APPELLANT AT THE T IME OF ASSESSMENT PROCEEDINGS AND FURTHER MADE ADDITION RELYING UPON THE LIST OF TRANSACTIONS. THE SUMMARY OF THE LIST OF TRANSACTIONS IS AS UNDER: S NO NAME OF THE PARTY NAME OF THE PARTY IN WHOSE FAVOUR AT PAR CHEQUE WAS ISSUED TRANSACTIONS AGGREGATE AMOUNT (RS.) 1 KISHORE UFLEX LTD 52 47,94,400 2 KISHORE POLY FLEX CORP. LTD. 22 19,59,003 3 KISHORE / ACME KISHORE VACMAT PACKAGING INDIA PVT. LTD 300 2,92,49,730 TOTAL 374 3,60,03,133 2.1 IN THIS REGARD, AT THE TIME OF ASSESSMENT PROCE EDINGS THE APPELLANT HAS SUBMITTED BEFORE AO THAT NONE OF THE TRANSACTIO NS MENTIONED IN THE LIST PERTAINS TO THE APPELLANT. WITH REGARDS TO EACH OF THE ABOVE THREE PARTIES, THE APPELLANT SUBMITS AS UNDER: PARTY 1:- VACMET PACKAGINGS INDIA PVT. LTD 2.2. THE APPELLANT HAS NOT ENTERED INTO ANY BUSINES S TRANSACTION WITH VACMET PACKAGINGS INDIA PVT. LTD DURING THE AY 2008 -09. THERE WERE NO PURCHASES MADE DURING THE RELEVANT ASSESSMENT YEAR FROM THIS PARTY. 2.3 THE LIST OF THE 300 TRANSACTIONS PROVIDED BY AS SESSING OFFICER AGGREGATING TO RS.2,92,49,730/- IN CASE OF VACMET P ACKAGINGS (INDIA) PVT LTD. DOES NOT PERTAIN TO THE APPELLANT BUT RATHER IT PER TAINS TO THE FOLLOWING PARTIES: ITA NO. 390/AGRA/2012 5 S NO NAME OF THE PARTY TRANSACTIONS AGGREGATE AMOUNT (RS.) 1 AKASH ENTERPRISES, JHANSI 286 2,78,97,084 2 SRI RAJESHWAR INDUSTRIES, NOIDA 5 4,56,675 3 QUICK FOIL PRINTS, LUCKNOW 3 2,85,000 4 B. K. INTERNATIONAL, LUCKNOW 2 1,99,600 5 FRIENDS PACKAGINGS, NOIDA 3 2,99,400 6 UPENDRA PLASTICS, NOIDA 1 1,11,971 TOTAL 300 2,92,49,730 2.4 THE ABOVE CONCLUSION IS BASED ON THE SUBMISSION MADE BY VACMET PACKAGINGS (INDIA) PVT LTD. TO THE INCOME TAX DEPAR TMENT. THE APPELLANT HAD ALSO SUBMITTED THE COPY OF THE ACCOUNTS OF ALL THE ABOVE PARTIES IN THE BOOKS OF VACMET PACKAGINGS INDIA PVT. LTD TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS. HOWEVER, THE AO HAS COMPLETELY IGNORED THE EVIDENCE S SUBMITTED AND MADE THE ADDITION WITHOUT ANY BASIS. 2.5. AS PER THE ACCOUNTS OF ABOVE PARTIES, IT IS QU ITE CLEAR THAT THESE ARE THE PAYMENTS MADE AGAINST THE PURCHASE OF GOODS MADE DU RING THE RELEVANT ASSESSMENT YEAR. THE COPY OF THE SALE INVOICE OF VA CMET PACKAGINGS (INDIA) PVT LTD. MENTIONING THE NAME OF THE PARTIES WAS ALSO PR OVIDED. 2.6. ALL THE TRANSACTIONS HAVE BEEN IDENTIFIED IN T HE COPY OF THESE ACCOUNTS AND EACH OF THE 300 TRANSACTIONS HAVE BEEN TALLIED. EACH AND EVERY CHEQUE / DRAFT NUMBERS MENTIONED IN THE LIST OF TRANSACTIONS ALONG WITH THE EXACT AMOUNTS AS PROVIDED BY THE AO HAVE BEEN TALLIED. 2.7. THE REFERENCED SET OF ACCOUNTS OF THE VARIOUS PARTIES WITH THE LIST OF TRANSACTIONS PROVIDED BY INCOME TAX DEPARTMENT IS A TTACHED AS ANNEXURE 1. PARTY 2:- UFLEX LIMITED UFLEX LIMITED, INCORPORATED IN 1983 IS ENGAGED IN T HE PLASTIC FILM BUSINESS AND FLEXIBLE PACKAGING BUSINESS AND HAVING OFFICES IN U AE, EUROPE, NORTH AMERICA AND ENJOYS A FORMIDABLE MARKET PRESENCE IN MORE THA N 85 COUNTRIES. UFLEX LIMITED IS LISTED ON NATIONAL STOCK EXCHANGE (NSE) AND ALSO FORM PART OF BSE TOP 500 COMPANIES ON BOMBAY STOCK EXCHANGE (BSE). ITA NO. 390/AGRA/2012 6 2.8. THE APPELLANT HAS BEEN DEALING WITH THE UFLEX LIMITED AND HAS ALSO ENTERED INTO THE BUSINESS TRANSACTION WITH UFLEX LI MITED DURING THE AY 2008-09. 2.9. HOWEVER, THE LIST OF 52 TRANSACTIONS PROVIDED BY ASSESSING OFFICER MENTIONING THE DATE, CHEQUE NO AND AMOUNT AGGREGATI NG TO RS. 47,94,400/-, IN CASE OF UFLEX LIMITED HAS NOT BEEN ENTERED BY THE APPELL ANT. 2.10 AS PER THE LEDGER ACCOUNT OF UFLEX LIMITED FOR THE PERIOD APRIL 1, 2007 TO MARCH 31, 2008, THERE ARE SEVERAL PURCHASE TRANSACTIONS ENTERED DURING THE YEAR AGGREGATING TO RS. 2,55,50,633/- AND ALSO PAYMENT OF RS. 2,57,09,018/- MADE DURING THE SAME PERIOD. THE CLOSING BALANCE FO R THIS ACCOUNT WAS A DEBIT BALANCE OF RS. 1,58,385/-. 2.11 AS PER AUDITED ACCOUNTS ATTACHED ALONG WITH TH E AUDITED REPORT DATED AUGUST 26, 2008, THE BALANCE OF RS. 1,58,385/ - HAS BEEN DISCLOSED AS SUNDRY DEBTORS UNDER SCHEDULE D CURRENT ASSETS AND LOANS & ADVANCES FOR THE YEAR ENDED MARCH 31, 2008. 2.12 THE APPELLANT HAS SUBMITTED THE COPY OF THE AU DITED LEDGER ACCOUNT OF UFLEX LIMITED IN THE BOOKS OF M/S ACME ENTERPRISES TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, HOWEVER THE SAME HAS NOT BE EN CONSIDERED BY THE AO. 2.13 THE APPELLANT HAS ALSO APPROACHED THE UFLEX LI MITED IN THIS MATTER AND HAD OBTAINED THE ACCOUNT STATEMENT OF M/S ACME ENTERPRISES IN THE BOOKS OF UFLEX LIMITED. AS PER THE ACCOUNT, THERE WAS A CRED IT BALANCE OF RS. 1,58,385/- AS ON MARCH 31, 2008. 2.14 THE APPELLANT HAS SUBMITTED THE COPY OF THE AC COUNT STATEMENT OF M/S ACME ENTERPRISES IN THE BOOKS OF UFLEX LIMITED TO T HE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, HOWEVER THE SAME HAS NOT BEEN CONSIDER ED BY THE AO. 2.15 THE COPY OF ACCOUNT OF M/S ACME ENTERPRISES IN THE BOOKS OF UFLEX LIMITED AND THE ACCOUNT OF UFLEX LIMITED IN THE BOO KS OF M/S ACME ENTERPRISES STATING THE TRANSACTIONS ENTERED BY BOTH THE PARTIE S DURING THE AY 2008-09 IS ATTACHED AS ANNEXURE 2. HOWEVER, THIS LIST DOES NO T COVER ANY OF THE TRANSACTIONS AS MENTIONED IN THE LIST PROVIDED BY INCOME TAX DEPARTMENT. PARTY 3:- POLYPLEX CORPORATION LIMITED ITA NO. 390/AGRA/2012 7 POLYPLEX IS THE WORLDS 4TH LARGEST MANUFACTURER OF THIN POLYESTER FILM HAVING ITS HEADQUARTER LOCATED IN NOIDA. THE COMPANY HAS MANUF ACTURING FACILITIES IN INDIA, THAILAND AND TURKEY. POLYPLEX CORPORATION LIMITED I S LISTED ON NATIONAL STOCK EXCHANGE (NSE) AND ALSO FORM PART OF BSE TOP 500 CO MPANIES ON BOMBAY STOCK EXCHANGE (BSE). 2.16THE APPELLANT HAS BEEN DEALING WITH THE POLYPLE X CORPORATION LIMITED AND HAS ALSO ENTERED INTO THE BUSINESS TRANSACTION WITH POLYPLEX CORPORATION LIMITED DURING THE AY 2008-09. 2.17 HOWEVER, THE LIST OF 22 TRANSACTIONS PROVIDED BY ASSESSING OFFICER MENTIONING THE DATE, CHEQUE NO AND AMOUNT AGGREGATI NG TO RS. 19,59,003/-, IN CASE OF POLYPLEX CORPORATION LIMITED HAS NOT BEEN ENTERE D BY THE APPELLANT. 2.18 AS PER THE LEDGER ACCOUNT OF POLYPLEX CORPORAT ION LIMITED FOR THE PERIOD APRIL 1, 2007 TO MARCH 31, 2008, THERE ARE S EVERAL PURCHASE TRANSACTIONS ENTERED DURING THE YEAR AGGREGATING TO RS. 28,03,02 0/- AND ALSO PAYMENT OF RS. 28,03,020/- MADE DURING THE SAME PERIOD. THE BALANC E FOR THIS ACCOUNT WAS RS. NIL AT THE YEAR END. 2.19 THE AUDITED ACCOUNTS ATTACHED ALONG WITH THE A UDITED REPORT DATED AUGUST 26, 2008, CONFIRMS THE ABOVE NIL BALANCE AT THE YEAR ENDED MARCH 31, 2008. 2.20 THE APPELLANT HAS SUBMITTED THE COPY OF THE AU DITED LEDGER ACCOUNT OF POLYPLEX CORPORATION LIMITED IN THE BOOKS OF M/S AC ME ENTERPRISES TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, HOWEVER THE SAM E HAS NOT BEEN CONSIDERED BY THE AO. 2.21 THE APPELLANT HAS ALSO APPROACHED THE POLYPLEX CORPORATION LIMITED IN THIS MATTER AND HAD OBTAINED THE ACCOUNT STATEME NT OF M/S ACME ENTERPRISES IN THE BOOKS OF POLYPLEX CORPORATION LIMITED. AS PER T HE ACCOUNT, THERE WAS NO AMOUNT PAYABLE OR RECOVERABLE FROM M/S ACME ENTERPR ISES. 2.22 THE APPELLANT HAS SUBMITTED THE COPY OF THE AC COUNT STATEMENT OF M/S ACME ENTERPRISES IN THE BOOKS OF POLYPLEX CORPORATI ON LIMITED TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, HOWEVER THE SAME HA S NOT BEEN CONSIDERED BY THE AO. ITA NO. 390/AGRA/2012 8 2.23 THE COPY OF ACCOUNT OF M/S ACME ENTERPRISES IN THE BOOKS OF POLYPLEX CORPORATION LIMITED AND THE ACCOUNT OF POLYPLEX COR PORATION LIMITED IN THE BOOKS OF M/S ACME ENTERPRISES STATING THE TRANSACTIONS EN TERED BY BOTH THE PARTIES DURING THE AY 2008-09 IS ATTACHED AS ANNEXURE 3. HOWEVER, THIS LIST DOES NOT COVER ANY OF THE TRANSACTIONS AS MENTIONED IN THE LIST PROVID ED BY INCOME TAX DEPARTMENT. 2.24 IT IS NOTEWORTHY TO MENTION HERE THAT WHOLE RE ASSESSMENT PROCEEDINGS AND ADDITIONS MADE TO RETURNED INCOME ARE BASED ON CERTAIN LOOSE PAPERS /DOCUMENTS FOUND DURING COURSE OF SEARCH OPERATION IN THE CASE OF M/S GWALIOR CITIZEN SAKH SAHAKARITA MARYADIT, GWALIOR WHEREIN IT IS ALLEGED THAT CERTAIN TRANSACTIONS REFLECTED IN THEIR BOOKS OF ACCOUNT PE RTAINS TO APPELLANT, WITHOUT APPRECIATING THE FACTS OF THE CASE, WHERE THE- I). APPELLANT HAS DENIED TO HAVE ENTERED INTO SAID TRANSACTION SINCE BEGINNING. II). APPELLANT HAS FILED AN AFFIDAVIT DECLARING THA T THE SAID TRANSACTIONS WERE NOT ENTERED BY HIM. III). APPELLANT WAS NEVER ALLOWED TO CROSS EXAMINE THE SAID PERSONS / FIRMS IN WHOSE BOOK OF ACCOUNTS, ALLEGED TRANSACTIONS ARE APPEARING. IV). THE COPY OF ACCOUNTS OF SAID COMPANIES IN THE APPELLANTS BOOKS OF ACCOUNT AND SIMILARLY THE COPY OF ACCOUNTS OF THE A PPELLANT IN THE SAID COMPANYS BOOKS OF ACCOUNTS FURNISHED BY THE APPELL ANT WERE NOT CONSIDERED BY THE ASSESSING OFFICER AT THE TIME OF HEARING IN PROPER CONTEXT. 2.25 THE AFFIDAVIT FILED BY THE APPELLANT DECLARING THAT THE TRANSACTIONS MENTIONED IN THE LIST PROVIDED BY INCOME TAX DEPART MENT WERE NOT ENTERED BY THE APPELLANT WAS COMPLETELY IGNORED. IN THIS REGARD, W E WOULD LIKE TO BRING YOUR ATTENTION THAT THE AFFIDAVITS FILED CANNOT BE REJEC TED OUTRIGHT WITHOUT CROSS- EXAMINATION BASED ON THE DECISION OF THE APEX COURT IN MEHTA PARIKH & CO V CIT [1956] 30 ITR 181 (SC). 2.26 THE ASSESSMENT ORDER APPEARS TO HAVE BEEN FRAM ED WITH THE SOLE OBJECTIVE OF MAKING A HIGH PITCHED ORDER OF ASSESSM ENT, WITH UTTER DISREGARD TO ACTUAL FACTS OF THE CASE AS WELL AS POSITIONS OF LA W IN THIS CONTEXT. ITA NO. 390/AGRA/2012 9 2.27 THE LEARNED AO HAS SOLELY BASED THE WHOLE ORDE R OF ASSESSMENT ON THE FINDINGS OF INVESTIGATION WING OF THE TAX DEPARTMEN T, MADE IN THIS REGARDS IN THE CASE OF M/S GWALIOR CITIZEN SAKH SAHAKARITA MARYADI T, GWALIOR. 2.28 THE LEARNED AO NEITHER MADE ANY ENQUIRY WITH R ESPECT TO SAME NOR APPLIED HIS OWN MIND TO FACTS OF THE CASE BEFORE RE ACHING TO CONCLUSION REGARDING ADDITION TO RETURNED INCOME ON ACCOUNT OF UNDISCLOS ED TRANSACTIONS, WHICH IS AN ERROR FATAL ON THE PART OF LEARNED AO AND IS BASE E NOUGH TO QUASH THE PROCEEDINGS, BECAUSE AN ASSESSING OFFICER IS AN INDEPENDENT AUTH ORITY AND IS DUTY BOUND TO CONSIDER EACH AND EVERY FACT OF THE CASE IN PROPER PERSPECTIVE AND SHOULD NOT BE SWAYED BY OPINIONS OF ANY OTHER AUTHORITY. 2.29 THE WHOLE ACTION OF LEARNED ASSESSING AUTHORIT Y IN RELYING UPON THE APPRAISAL REPORT AND NOT MAKING ANY ENQUIRY IN THE FACTS OF THE CASE MAKE THE PROCEEDING VOID AB INITIO AND IS LIABLE TO BE QUASH ED. 2.30 PERUSAL OF WHICH PROVES THAT SOLE BASIS FOR MA KING ADDITION TO THE RETURNED INCOME WAS INFORMATION PASSED ON BY INVEST IGATION WING OF THE DEPARTMENT AND NO FURTHER INDEPENDENT ENQUIRIES WE RE MADE IN THE MATTER WHICH IS IN UTTER DISREGARD TO THE JUDICIAL PRINCIPLES, F URTHERMORE THE LEARNED ASSESSING OFFICER IS SUPPOSED TO TAKE HIS INDEPENDENT VIEW WH ILE FRAMING THE ORDER OF ASSESSMENT WITHOUT BEING EFFECTED BY ANY UNDUE PRES SURE, WHATEVER REPORT/ PROPOSAL IS MADE BY OTHER WINGS , IT IS FOR HIS ASS ISTANCE AND ADVISORY IN NATURE NOT BINDING UPON HIM, HIS JURISDICTION BEING OF PRIMARY FACT FINDING AUTHORITY IS INDEPENDENT AND HE IS EXPECTED TO ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN AN UNBIASED MANNER. 2.31 IT IS PERTINENT TO NOTE HERE THAT NEITHER THE AUTHORITY PREPARING THE SAID INFORMATION REGARDING ALLEGED TRANSACTIONS NO R THE LEARNED ASSESSING AUTHORITY TOOK COGNIZANCE OF SUBMISSIONS / AFFIDAVI TS FILED BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS NOR THE SAID BOOKS/DOCUME NTS FOUND FROM M/S GWALIOR CITIZEN SAKH SAHAKARITA MARYADIT CONTAINING ALLEGED ENTRIES ON THE BASIS OF WHICH ADDITION IS MADE WAS EVER GIVEN TO ASSESSEE FOR PRO PER EXAMINATION NOR ANYWHERE ON THE BOOKS/DOCUMENTS , NAME OF ASSESSEE IN FULL W AS MENTIONED TO SUBSTANTIATE THE STAND OF REVENUE. 2.32 IT IS THE LIABILITY OF REVENUE TO CONCLUSIVELY PROVE THAT ANY BOOKS CONTAINING CERTAIN NOTING FOUND FROM THE POSSESSION OF THIRD PARTY PERTAINS TO ASSESSEE AND SUCH NOTING HAS THE EFFECT OF BEING TR EATED AS UNDISCLOSED INCOME OF ASSESSEE, WHICH WAS NEVER DONE NOR EVEN ATTEMPTED T O BE DONE IN THE INSTANT CASE. ITA NO. 390/AGRA/2012 10 HENCE, THE ENTIRE PROCEEDINGS ARE VITIATED FOR WANT OF PROPER APPRECIATION / ENQUIRY OF FACTS OF THE CASE. 2.33 IN THIS REGARD ASSESSEE PLACES RELIANCE ON THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT V. SALEK CHAND AGRAW AL (2008) 300 ITR 426 (ALL) & CIT V. ATAM VALVES (P) LTD. (2011) 332 ITR 468 (P &H). BY RELYING ON VARIOUS CASE LAWS, THE ASSESSEE HAS A LSO STATED THAT NO OPPORTUNITY OF CROSS EXAMINATION OF THIRD PARTIES HAS BEEN GRAN TED TO HIM AND THAT PROVISIONS OF SEC. 68 ARE NOT APPLICABLE IN HIS CASE. 4. THE LD. CIT(A) CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE IN THE LIGHT OF THE FINDINGS AND RECORD OF THE AO WITH ENQUIRY FOLD ER OF ADIT(INV.), GWALIOR DELETED THE ADDITION OF RS.3,60,03,133/-. THE FINDI NGS OF THE LD. CIT(A) IN PARAS 4 TO 4.6 OF THE APPELLATE ORDER ARE REPRODUCED AS UND ER : 4. APPELLANTS SUBMISSIONS ALONG WITH ASSESSMENT OR DER HAVE BEEN CONSIDERED CAREFULLY. ASSESSMENT RECORDS OF A.O. I. E. ITO-2(3), GWALIOR AND ENQUIRY FOLDER OF ADIT (INV.), GWALIOR, AS RECEIVED FROM ACIT, CIRCLE-2 VIDE LETTER DT. 29.03.2012 HAVE ALSO BEEN PERUSED, THE APPELLAN T IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING OF PACKAGING MATERIAL. RETURN DEC LARING BUSINESS INCOME OF RS. 451239/- HAS BEEN FILED ON 30.09.2008 IT IS SEEN TH AT DURING THE COURSE OF SEARCH OPERATIONS IN CASE OF GWALIOR CITIZEN SAKH SAHAKARI TA SAMITI MARYADIT (GCSSSM) GWALIOR. ADIT (INV.) GWALIOR, HAS NOTED PREPARATION AND ISSUE OF AT PER CHEQUES/DEMAND DRAFTS FROM ACCOUNTS OF SHRI NARAIN DAS RATHORE IN FAVOUR OF M/S. U-FLEX LTD. M/S. VACMAT PACKAGING INDIA PVT. L TD. & M/S. POLYPLEX CORPORATION LTD. ON BEING ENQUIRED FROM THE SAMITI, SHRI RATHORE HAS DENIED OF CARRYING OUT ANY TRANSACTION FROM SAID BANK ACCOUNT , VIDE LETTER DT. 17.10.2008 ADIT(INV.) HAS BEEN INFORMED AS UNDER BY MANAGER, G WALIOR CITIZEN SAKH SAHAKARITA SAMITI MARYADIT. ITA NO. 390/AGRA/2012 11 FUOSNU GS FD VKIDS DK;KZY; LS IZKIR MIJKSDR UKSFVL FNUKAD 14-10-2008 JH UKJK;.K NKL JKBKSJ DS LECU/K EA LALFKK DKS IZKIR GQVK A MDR UKS FVL ESA JH UKJK;.K NKL JKBKSJ DS [KKRS ESA FD;S X;S O;OGKJ DKS JH JKBKSJ }KJK VLOHDKJ FD;K X;K GS MDR FOK; EAS LALFKK }KJK LALFKK LVKQ LS IWNRKN DJUS IJ EKYWE GQVK FD JH UKJK;.K NKL JKBKSJ DK LALFKK ESA [KKRK DZAEKD NMS &19 GS RFKK MDR [KKRS ESA DQY TURNOVER RS. 32065530/- GS A TKS FNUKAD 01.04.2007 LS 31.03.2008 DS E/; GQVK GS A MDR TURNOVER JH FDKKSJ@VKKSD CYSPK] HKSJKS TH DK EFUNJ EK/KKSAXT DK GS A JH CYSP K DS DEZPKJH EUKST }KJK UXN :0 NSDJ U-FLEX LTD. POLY PLEX CORPORATION LTD. VACMET PACKA GING INDIA PVT LITD DS AT PAR CHEQUE CUOK;S TKRS FKS A MDR FOK; ESA LALFKK }KJK LALFKK LVKQ LS IWNRKN DJU S IJ EKYWE GQVK FD JH CYSPK }KJK LALFKK LVKQ DKS DGK X;K FKK FD GEKJS UKE LS VKIDH L ALFKK ESA DKSBZ ENTRY UGH VKUH PKFG;S A VR% LALFKK DS LVKQ US JH CYSPK DKS LG;KSX NSUS GSRQ MDR TURNOVER JH UKJK;.K }KJK JKBKSJ DS [KKRK DZEKAD NMS-19 ESA DJ FN;K A FTLDH TKUDKJH LALFKK DKS VKT FNUKAD RD UGH FKH A MDR TURNOVER DS VYKOK LALFKK ][KKRK LS FTRUS HKH AT PAR CHEQUE U-FLEX LTD. POLY PLEX CORPORATION LTD, VACMET PACKAGING IN DIA PVT. LTD DS I{K ESA CUS GS OS LC JH FDKKSJ @ VKKSD CYSPK DS }KJK GH CUOK;S X;S GS A 4.1 SUBSEQUENTLY. ADIT(INV.) HAS ALSO SENT LETTERS TO THESE THREE COMPANIES ASKING THEM TO FURNISH THE NAME(S) OF THE PARTIES FROM WHO M THESE DRAFTS/AT PAR CHEQUES HAVE BEEN RECEIVED ALONG WITH COPY OF ACCOUNT OF TH EIR PURCHASES. ON THE BASIS OF DETAILS FURNISHED BY THEM, NAMES OF FOLLOWINGS PART IES HAVE BEEN TABULATED AS UNDER SHOWING RESPECTIVE TRANSACTIONS. //11// HINDUSTAN /GWALIOR CITIZEN SAKH/VACMAT PACKAGING P VT. LTD. SR. NO. NAME OF PARTY ADDRESS OF PARTY PERIOD AMOUNT 1 AKASH ENTERPRISES JAISWAL BHAWAN NEAR MINARA CINEMA JHANSI 01.04.07 TO 31.03.08 80054296 AKASH ENTERPRISES POLY FLEX LTD. 01.04.06 TO 31.03.07 15686195 - 01.04.07 TO 31.03.08 10147579 2. B.K. INTERNATIONAL NISHTGANJ LUKHNOW 01.04.07 TO31.03.08 10354500 - - 01.04.07 TO 31.03.08 6752826 - - 01.04.05 TO 2391412 ITA NO. 390/AGRA/2012 12 31.03.06 19498738 3 F.P. YARN & CO. SECTOR 7, NOIDA 01.04.07 TO 31.03.08 510826 - - 01.04.06 TO 31.03.07 106647 - - 01.04.05 TO 31.03.06 222621 840094 4. FRIENDS PACKAGING SECTOR 56, NOIDA 01.04.07 TO 31.03.08 543125 - - 01.06.06 TO 31.03.07 347417 - - 01.04.05 TO 31.03.06 523949 6302621 5. G.R. INDUSTRIES 01.04.07 TO 31.03.08 4228885 - - 01.04.06 TO 31.03.07 4041798 8570683 6. P.K. PRINTERES BYE PASS ROAD KRISHNA NAGAR , MATHURA 01.04.07 TO 31.03.08 5354327 - - 01.04.06 TO 31.03.07 2463415 - - 01.04.05 TO 31.03.06 2087566 9905308 7. QUICK FOIL PRINTS STATION ROAD CHAR BAGH LUCKNOW 01.04.07 TO 31.03.08 7799282 - - 01.04.06 TO 31.03.07 6671591 - - 01.04.05 TO 31.03.06 5410060 19880933 8. RAMESH INDUSTRIES SECTOR 10, NOIDA 01.04.07 TO 31.03.08 2976738 - - 01.04.06 TO 31.03.07 1479090 - - 01.04.05 TO 31.03.06 1175581 5631409 9. RADHE SHYAM INDUSTRIES SECTOR 2, NOIDA 01.04.07 TO 12085029 ITA NO. 390/AGRA/2012 13 31.03.08 10. SPACE LAMINATORS ANAND INDUSTRIAL ESTATE MOHAN NAGAR, GHAZIABAD 01.04.07 TO 31.03.08 506265 11 SHRI RAJESHWAR INDUSTRIES NOIDA SECTOR 2, NODIA 01.04.07 TO 31.03.08 18464025 12 SHRI RAJESHWAR INDUSTRIES HARDOI INDUSTRIAL AREA SITE B, UPSIDC HARDOI 01.04.07 TO 31.03.08 2376315 13 SHRI RADHASWAMI INDUSTRIES, NOIDA SECTOR 2, NOIDA 01.04.07 TO 31.03.08 4198583 14 SHRI RADHA SWAMI INDUSTRIES HARDOI SITE BUPSIDC INDUSTRIAL AREA , HARDOI 01.04.07 TO 31.03.08 4600112 15 SHRI RAMESHWARAM INDUSTRIES HARDOI NOT MENTIONED 01.04.07 TO 31.03.08 5568135 - - 01.04.06 TO 31.03.07 414119 16 UPENDRA PLASTIC SECTOR 7, NOIDA 01.04.07 TO 31.03.08 910707 49133290 HINDUSTAN /NEW CENTRAL /GWALIOR SAKH /U-FLEX LTD. D ATE: 31.10.08 1 ANNAPURNA ENTERPRISES ANNAPURNA BHAWAN NEAR OLD BUS STAND LALAITPUR (U.P) 01.04.06 TO 31.03.07 7052584 - - 01.04.07 TO 31.03.08 62885085 2. AKASH ENETERPRISES - JAISWAL BHAWAN NEAR MINERVA CINEMA JHANSI - 01.04.06 TO 31.03.07 01.04.07 TO 31.03.08 62400435 6265311 138603415 HINDUSTAN /POLY PLEX 1 AKASH ENETERPRISES JAISWAL BHAWAN NEAR MINERVA 01.04.06 TO 31.03.07 17236493 ITA NO. 390/AGRA/2012 14 - CINEMA JHANSI - 01.04.07 TO 31.03.08 9043107 2 ANNAPURNA ENTERPRISES NEAR OLD BUS STAND LALITPUR (U.P.) 01.04.06 TO 31.03.07 11644852 - - 01.04.07 TO 31.03.08 18764051 56688503 TOTAL 420943064 4.2 FURTHER AS PER ADIT (INV.) REPORT /ORDER, WHICH HAS BEEN MADE PART OF THE ASSESSMENT ORDER BY THE A.O. IT IS MENTIONED AS UNDER:- TO VERIFY THE GENUINENESS OF THESE TRANSACTION SUMM ONS WERE ISSUED TO ALL ABOVE MENTIONED 16 PARTIES AND IT HAS BEEN FOUND THAT NONE OF THE ABOVE MENTIONED PARTIES WERE FOUND TO E XIST ON THE GIVEN ADDRESS. ACCORDINGLY M/S. VACMAT PACKAGING (P) LTD. WAS AGAIN REQUESTED TO FURNISH THE CORRECT ADDRESS AND THE CO NTACT PERSON & CONTACT NUMBERS OF THE PERSONS WHO TRANSACTED /PURC HASED GOODS FROM THEM. TO WHICH THE COMPANY EXPRESSED ITS INABI LITY AND STATED THAT THEY DO NOT HAVE ANY OTHER DETAIL / PARTICULAR S TO IDENTIFY THE PERSON TO WHOM SALES WERE MADE AS MONEY WERE RECEIV ED FROM THEM THROUGH AT PAR CHEQUES /DEMAND DRAFT IN ADVANCE. H OWEVER IT IS QUITE UNLIKELY THE PARTIES STATED TO HAVE PURCHASED THE G OODS FORM ABOVE MENTIONED THREE COMPANIES ARE MOSTLY SITUATED AT NO IDA , JHANSI, AGRA, KANPUR & LUKHNOW WHEREAS THE PAYMENT IN RESPE CT OF ALL THESE PURCHASE HAVE BEEN ORIGINATED FROM THE BANKS AND SA HAKARITA SAMITIS SITUATED AT GWALIOR. MOREOVER IT IS ALSO VERY SURPR ISING THAT THE NAME OF M/S. AKASH ENTERPRISES AND M/S. ANNAPURNA ENTERP RISES STATED TO HAVE BEEN REPORTED BY ALL THE THREE RECIPIENT COMPA NY THIS SUGGEST THAT THE PERSON /PARTY WHO HAVE MADE THESE PURCHASE S AND EFFECTED THEIR PAYMENT FORM THE BANK ACCOUNTS OF VARIOUS SAH AKARITA SAMITIS I.E. THE GWALIOR CITIZEN SAKH SAHAKARI SAMITI MAR YADIT, THE HINDUSTAN SAKH SAHAKARITA SAMITI AND NEW CENTRAL SA KH SAHAKARITA SAMITI MARYADIT IS REPORTED TO BE ONE BUSINESS GROU P. AND HAVE METICULOUSLY TRANSACTED THESE TRANSACTIONS IN CLANDESTINE MANNER TO DEFRAUD THE REVENUE. IN THIS REGARD, IT MAY MENTION THAT THE P ERUSAL OF SEIZED RECORD FROM THE HINDUSTAN SAKH SAHAKARITA SAMITI REVEAL TH AT IN TWO OF THE ITA NO. 390/AGRA/2012 15 REGISTER IMPOUNDED AS BS-3 & BS-4 INDICATE THAT ISS UED TO M/S. VACMATE PACKAGING INDIA (P) LTD. & M/S. U-FLEX LTD WERE PREPARED BY ONE KISHORE OR KISHORE ACME. 4.3 IN RESPONSE TO SUMMONS ISSUED U/S 131 BY ADI T (INV.), THE APPELLANT HAS APPEARED ALONG WITH HIS BROTHER VIZ. SH. ALOK V ALECHA. STATEMENTS OF BOTH HAVE BEEN RECORDED ALONG WITH PRODUCTION OF THEIR R ESPECTIVE BOOKS OF ACCOUNTS. BOTH HAVE CATEGORICALLY DENIED OF HAVING DONE ANY T RANSACTION THROUGH GWALIOR CITIZEN SAKH SAHAKARITA SAMITI MARYADIT OR HINDUSTA N SAHAKARITA SAMITI . COPY OF ACCOUNTS OF M/S. U-FLEX LTD. & M/S. POLY PLEX IN TH EIR BOOKS HAS BEEN SUBMITTED. NO TRANSACTION DURING THE YEAR UNDER CONSIDERATION IS STATED TO HAVE BEEN MADE WITH M/S. VACMATE PACKAGING INDIA LTD. HOWEVER, ON THE BASIS OF APPARENTLY SIMILAR SIGNATURE ONE SH.MANOJ WHO HAS SIGHNED DRAF T APPLICATION FORMS FOR ISSUE OF THESE AT PAR CHEQUES/DRAFTS AND ON PAY-IN-SLIPS OF M/S ACME ENTERPRISES (PROPRIETORSHIP CONCERN OF THE APPELLANT) FOR DEPOS ITING AMOUNT IN HIS IDBI BANK ACCOUNT, THUS TREATING HIM TO BE RESPONSIBLE EMPLOY EE OF THE APPELLANT. BOTH ADIT (INV.) & A.O. HAVE HELD THAT THE APPELLANT HAS NOT RECORDED THE ALLEGED TRANSACTIONS WITH THESE 3 COMPANIES IN HIS BOOKS OF ACCOUNTS. THIS IS ESPECIALLY SO ON THE FAILURE OF THE APPELLANT TO PRODUCE SH. MANO J FOR VERIFICATION. APPELLANTS SUBMISSIONS MADE BOTH BEFORE ADIT & AO HAVE NOT BEE N ACCEPTED BY MENTIONING AS UNDER:- THE ABOVE FACTS CLEARLY PROVE T HAT SH.MANOJ IS AN EMPLOYEE/ASSOCIATE OF M/S. ACME ENTERPRISES/SH. KI SHORE VALECHA WHO IS LOOKING AFTER THESE BANK RELATED WORK AND H AVE GOT ISSUED THE DD/AT PAR CHEQUE TO M/S. THE GWALIOR CITIZEN SAKH S AHAKARI SAMITI MARYADIT AND THE HINDUSTAN SAKH SAHAKARITA SAMITI. AS THE GWALIOR CITIZEN SAKH SAHAKARI SAMITI MARYADIT WAS RELATIVEL Y MAINTAINING REGULAR BOOKS OF ACCOUNTS AND ALSO THE RELEVANT VOU CHERS IN SUPPORT OF THEIR BUSINESS TRANSACTIONS, THESE DRAFTS/AT PAR CHEQUES COULD BE ISSUED ONLY AFTER FILING UP THE DRAFT TRANSACTION F ORM AND SIGNING AT THE APPROPRIATE PLACE OF PERSONS DEPOSITING THE MONEY O R APPLYING FOR THE DRAFT APPLICATION. THEREFORE THE SIGNATURE OF MAN OJ WHO IS AN ASSOCIATE OF ACME ENTERPRISES COULD BE FOUND ON THE DRAFT APPLICATION FORM. WHEREAS IN RESPECT OF HINDUSTAN S AKH SAHAKARITA SAMITI NO PROPER BOOKS OF ACCOUNTS USED TO MAINTAIN . HOWEVER FOR RECORDING THEIR DAY TO DAY TRANSACTIONS AND KEEPING THE DETAILS OF MONEY RECEIVED AND PAID AND DEPOSITED TO BANK THE S OCIETY USED TO MAINTAIN THE RECORD IN A REGISTER WHICH IS PRIMARY RECORD OF ALL THE TRANSACTION CONDUCTED/FACILITATED BY IT ON DAY TO D AY BASIS TO THE LOCAL ITA NO. 390/AGRA/2012 16 TRADERS OF THE GWALIOR AND SURROUNDING AREAS. THESE PRIMARY RECORDS ALSO USED TO DESTROY BY THE SOCIETY AS THE SOCIETY ITSELF WAS AWARE THAT ALL THE TRANSACTION ROUTED THROUGH THE BANK OF THE SOCIETY ARE ILLEGITIMATE AND UNACCOUNTED BANK TRANSACTIONS WHIC H ARE NOT DISCLOSED FOR INCOME TAX PURPOSE. IT IS BY CHANCE THAT THESE TWO REGISTER COULD BE FOUND AND SEIZED WHICH INTER ALIA CONTAINS NAME OF THE PERSON WHO PREPARED/PURCHASE THE DRAFT OR AT PE R CHEQUE AND AMOUNT AND THE NAME OF THE PARTIES IN FAVOUR OF WHO M DD/AT PAR CHEQUES ISSUED. AS THESE PRIMARY RECORDS CLEARLY DE PICT THE NAME OF SH. KISHORE AND KISHORE ACME CLEARLY PROVE THAT ALL THESE AT PAR CHEQUES/DEMAND DRAFTS HAVE BEEN GOT ISSUED BY SHRI KISHORE VALECHA OF M/S. ACME ENTERPRISES IN FAVOUR OF M/S U-FLEX LT D., M/S VACMET PACKAGING INDIA PVT. LTD. AND M/S POLYPLEX CORPORAT ION LTD. THE NON-PRODUCING OF SH. MANOJ IS CLEAR CUT EVIDENCE OF CONCEALING THE MATERIAL FACTS LINKED M/S. ACME ENTERPRISES TO THE DRAFT/AT PAR CHEQUE ISSUED FROM THE GWALIOR CITIZEN SAHKARI SAMI TI MARYADIT IN CLANDESTINE MANNER IN THE GARB OF SH. NARAYAN DAS R ATHORE. IT MAY ALSO BE MENTIONED THAT SHRI KISHORE VALECHA IS DELI BERATELY CONCEALING THE NAME OF THEIR EMPLOYEES AS EVIDENT F ROM THE FACT THAT HE SHOWN HIS UNAWARENESS AS TO THE NAME OF HIS EMPL OYEES WORKING IN FINANCIAL YEAR 2006-07 WHOM TOTAL SALARY OF RS. 1,9 2,000/- WERE PAID WHICH WERE INTER ALAI INCLUDE SALARY TO HIS FATHER AND HIS WIFE. FURTHER THE ACCOUNT OF M/S ACME ENTERPRISES ALSO DO NOT REF LECT ALL THE EXPENSES TRUE AND CORRECT AS THE ACCOUNTING CHARGE S PAID TO THEIR ACCOUNTANT NAMELY SH.DEVI DAYAL CHETWANI JI @ RS. 350/- P.M. TOTALING TO RS. 4200/- IS NOT RECORDED IN BOOKS OF ACCOUNTS. IN FACT IN ANSWER TO QUESTION RELATED TO THE EMPLOYEES HANDLIN G PACKAGING MATERIAL ASSESSEE HAS GIVEN A VERY VAGUE REPLY THAT THE PACKAGING GOODS ARE BEING HANDLED BY THE CONTRACTOR, TEKEDAR HOWEVER THEY DO NOT CHARGE ANYTHING FROM THEM BUT CHARGES FROM THE OTHER PARTY. THIS SHOWS THE IDENTITY OF SH. M ANOJ IS DELIBERATELY CONCEALED BY M/S ACME ENTERPRISES. THE FACT THAT H IS SIGNATURE IS APPEARING ON THE PAY IN SLIP OF ACME ENTERPRISES BA NK ACCOUNT IDBI WHICH HAVE BEEN IMPOUNDED FROM THE CUSTODY OF SH. K ISHORE VALECHA ON 20.11.2008 CLEARLY ESTABLISHED THAT SH. MANOJ IS ONE OF THEIR CONFIDENT, IMPORTANT EMPLOYEES WHO UNDERTAKE ALL TH EIR BANK/FINANCE RELATED WORK. FURTHER THE FACT THAT HIS NAME/SIGNAT URE IS ALSO APPEARING IN THE DRAFT APPLICATION FORM IMPOUNDED F ROM THE GWALIOR CITIZEN SAKH SAHKARI MARYADIT ESTABLISHED BEYOND DO UBT THAT THE CHEQUES/DRAFT FROM THE GWALIOR CITIZEN SAKH SAHKARI MARYADIT WERE ITA NO. 390/AGRA/2012 17 ISSUED FOR M/S. ACME ENTERPRISES BY SH. MANOJ. THEREFORE, CHEQUES ISSUED TO M/S U-FLEX PVT LTD , M/S VACMET PACKAGING INDUSTRIES PVT LTD AND M/S POLYPLEX PVT L TD TOTALLING TO RS. 42 CRORES FROM THE BANK ACCOUNT OF THE GWALIOR CITI ZEN SAKH SAHKARI MARYADIT AND THE HINDUSTAN SAKH SAHAKARI SAMITI THR OUGH WHICH PURCHASES WERE MADE IN THE NAME OF VARIOUS NON-EXIS TING ENTITY DURING THE LAST 3 YEARS AS MENTIONED IN THE CHART A RE UNACCOUNTED PURCHASES OF M/S ACME ENTERPRISES. ACCORDINGLY, THE ASSESSING OFFICER IS REQUIRED TO TAKE NECESSARY ACTION 153C/1 48 IN THE CASE OF M/S ACME ENTERPRISES, PROP. SHRI KISHORE VALECHA TO TAX THE INCOME EARNED IN RESPECT OF THIS UNACCOUNTED PURCHASES AMO UNTING TO RS. 42 CRORES FOR THE PERIOD F.Y 2005-06 TO 2007-08. 4.4. A.O. HAS INITIATED PROCEEDINGS U/S 148 FOR T HE YEAR UNDER CONSIDERATION AND HAS MADE ADDITION OF RS. 3.60 CRORES AS PER THE IMP UGNED ASSESSMENT ORDER, AS AGAINST RS. 42 CRORES MENTIONED ABOVE. NO SUCH PROC EEDINGS HAVE BEEN INITIATED FOR ANY OTHER YEAR NOR ANY ADVERSE INFERENCE DRAWN FOR ANY OTHER YEAR BY THE A.O. ON SOME FACTS. FURTHER THE SAID ADDITION HAS BEEN M ADE IN CASE OF THE APPELLANT BY RELYING ON STATEMENTS OF THIRD PARTIES NAMELY SHRI NARAYAN DAS RATHORE AND THE MANAGER OF THE GWALIOR CITIZEN SAKH SAHKARI MARYADI T, WHO HAS GIVEN INFORMATION REGARDING THE APPELLANT AFTER DISCUSSIO N AND CONSULTATION WITH HIS STAFF. BUT THE APPELLANT HAS NOT BEEN GIVEN ANY OPP ORTUNITY TO CROSS EXAMINE ANY OF THEM ESPECIALLY WHEN TRANSACTIONS WITH M/S VACMET P ACKAGING PVT LTD. HAVE BEEN DENIED BOTH BY THE APPELLANT AND THE CONCERNED COMP ANY ITSELF. DURING THE COURSE OF APPEAL PROCEEDINGS, HIS OFFICE HAS ALSO SOUGHT INFORMATION/S 133(6) FROM M/S VACMET PACKAGING INDIA PVT LTD VIDE LETTER DTD. 26.03.2012, THE SAID CO. HAS INFORMED AS UNDER:- 1) THAT WE HAVE NOT ENTERED INTO ANY TRANSACTIONS WITH M/S ACME ENTERPRISES, PROP. SHRI KISHORE VALECHA, SENAPATI KI BARARIA, M ADHOGANJ , GWALIOR DURING THE A.Y 2008-09. 2) THE DETAIL OF DEMAND DRAFT/CHEQUE IS ALSO RECEIVED ALONG WITH THE AFORESAID NOTICE. THE NAME OF PARTIES, FROM WHOM THE SAID DEM AND DRAFTS/CHEQUE WAS RECEIVED, ARE MENTIONED IN THE SAID DETAILS ITSELF. FURTHER, COPY OF ACCOUNTS OF PARTIES MENTIONING THEIR ADDRESSES FROM WHOM THE SAID DEMAND DRAFTS/CHEQUES RECEIVED ARE ENCLOSED HEREWITH. ITA NO. 390/AGRA/2012 18 3) THE SAID DEMAND DRAFTS WERE RECEIVED AGAINST THE SA LE OF THE GOODS WHICH IS DULY ACCOUNTED FOR. 4) THAT OUR PAN IS AAACV5120B AND WE ARE REGULARLY ASS ESSED TO INCOME TAX ACT DCIT-4(1), AGRA. OUR PRESENT JURISDICTION IS AC IT, CENTRAL CIRCLE, AGRA. THE COPY OF ACKNOWLEDGEMENT OF INCOME TAX RET URN FOR A.Y. 2008-09 IS ENCLOSED. RETURN DECLARING INCOME OF RS. 27, 14, 89,794/- HAS ALSO BEEN FILED ON 03.10.2008 WITH ACIT, CIRCLE-4(1), AGRA. VIDE AFFIDAVIT, THE A PPELLANT HAS ALSO DENIED OF HAVING ANY BUSINESS CONNECTION WITH ANY OF THE FIRM S FROM WHOM VACMET PACKAGING HAS RECEIVED DRAFTS/CHEQUES. 4.5 DURING THE ENTIRE COURSE OF ASSESSMENT PROCEEDI NGS FROM 24.12.2010 TILL PASSING OF ORDER ON 19.12.2011, A.O. HAS NOT MADE E VEN A SINGLE INDEPENDENT ENQUIRY TO BRING ANY MATERIAL ON RECORD PROVING THA T IT IS THE APPELLANT INDEED WHO HAS CARRIED OUT ALLEGED UNRECORDED TRANSACTIONS WIT H ANY OF THOSE THREE COMPANIES. INFORMATION RECEIVED FROM THE INVESTIGAT ION WING, AT BEST, CAN BE A SOURCE OF INFORMATION UPON WHICH A.O. COULD HAVE IN FORMED HIS OWN INDEPENDENT BELIEF. NO EFFORT HAS BEEN MADE BY THE A.O. TO VERI FY THE CORRECTNESS OF FACTS STATED IN THE REPORT OF THE INV. WING NOR SAME HAS BEEN VE RIFIED FROM ANY INDEPENDENT SOURCE. A.O. HAS ACCEPTED THE TRUTH OF THE INFORMAT ION IN A MECHANICAL MANNER. HE HAS MERELY ACTED ON BORROWED SATISFACTION AND OPINI ON/ALLEGATION OR IPSE DIXIT BY THE ADIT. THE APPELLANT HAS NOT BEEN GIVEN ANY OPPO RTUNITY TO CROSS EXAMINE THE ACTUAL ACCOUNT HOLDER, I.E. SH. NARAIN DAS RATHORE OR MANAGER OF THE MARYADIT BANK DESPITE THERE BEING A SPECIFIC REQUEST MADE TO THE AO DURING THE COURSE OF REASSESSMENT PROCEEDINGS IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE, AS HAS BEEN HELD BY VARIOUS JUDICIAL AUTHORITIES. FROM THE ENTI RE RECORD AND ASSESSMENT ORDER, IT IS EVIDENTLY CLEAR THAT THE AOS MIND WAS OVERWH ELMED AND UNDULY INFLUENCED BY THE OBSERVATION MADE REGARDING THE SEARCH OPERATION S CONDUCTED BY THE INVESTIGATION WING IN CASE OF MARYADIT BANK/SAMITIS IN GWALIOR AND PARTICULARLY THE INFORMATION GIVEN BY THE MANGER OF THE BANK. BY RELYING ON THE MODUS OPERANDI OF THESE MARYADIT BANKS, AO HAS IGNORED TH E VITAL EVIDENCE ON RECORD AND AS PRODUCED BY THE APPELLANT IN SHAPE OF CONFIR MED COPY OF ACCOUNTS OF THOSE COMPANIES WHO ARE LISTED COMPANIES AND REGULAR INCO ME TAX PAYERS & WHERE NO ADVERSE INFERENCE HAS BEEN DRAWN IN THEIR CASES AS PER THEIR ASSESSMENT ORDERS. IN CASE OF M/S VACMET INDIA LTD (FORMERLY VACMET PACKA GING (INDIA) PVT LTD) WHERE ADDITION OF RS. 2, 92, 49,730/- HAS BEEN MADE BY TH E AO IN CASE OF THE APPELLANT, ORDER DT. 30.12.2011 HAS BEEN PASSED U/S153A OF THE IT ACT AS A CONSEQUENCE OF SEARCH OPERATIONS CARRIED OUT ON THEIR PREMISES. NO ADVERSE INFERENCE HAS BEEN ITA NO. 390/AGRA/2012 19 DRAWN IN RESPECT OF ITS TRADING ACTIVITIES AND THE ONLY ADDITION BEEN MADE IS FOR SHARE APPLICATION MONEY TREATED AS UNEXPLAINED BY T HE AO. IN FACT, AUDITED BOOKS OF ACCOUNTS OF THE APPELLANT HAVE ALSO BEEN ACCEPTE D BY THE AO AND ON THE BASIS OF DECLARED SALES AND PURCHASES, NO ADVERSE INFERENCE HAS BEEN DRAWN IN RESPECT OF HIS TRADING RESULTS. 4.6 IN THE APPELLANTS CASE, THE OBSERVATIONS MADE BY THE INVESTIGATION WING HAVE PERCOLATED THROUGHOUT AND AROUSED A SUSPICION ABOUT ALL THE TRANSACTIONS CARRIED OUT BY THE APPELLANT WITH THESE COMPANIES AND SUCH SUSPICION SNOWBALLED INTO A KIND OF CONCLUSIVE PROOF THAT ANYBODY AND EVERYB ODY WHO WAS FOUND TO BE DEALING THROUGH THESE SAMITIS / BANKS WAS EARNING I LLEGAL INCOME THROUGH UNACCOUNTED TRANSACTION. INVESTIGATION IN THE AFFAIRS OF THESE SAMITIS IS RE LEVANT TO RAISE A PRESUMPTION OF MALFUNCTION BUT THIS PRESUMPTION IS ALSO REBUTTABLE ESPECIALLY WHEN THE APPELLANT HIMSELF AND CONCERNED PARTIES HAVE DENIED OF CARRYI NG OUT ANY SUCH TRANSACTION. THE APPELLANT HAS TRIED TO DEFEND HIS CASE AND PROV E THE TRANSACTIONS BY WAY OF NUMBER OF EVIDENCES WHICH HAVE SIMPLY BEEN BRUSHED ASIDE UNDER THE WEIGHT OF HIGH SUSPICION AND APPARENTLY SAME HANDWRITING OF A N ALLEGED EMPLOYEE SH. MANOJ WHO HAS NEVER BEEN EXAMINED NOR ANY OPINION O F HANDWRITING EXPERT BEEN TAKEN ESPECIALLY WHEN THE APPELLANT, THROUGH AFFIDA VIT, HAS DENIED OF HAVING ANY RELATIONSHIP WITH HIM OR KNOW HIM. MOREOVER, A.O. H AS NOT EVEN THOUGHT OF INVESTIGATING ANY FURTHER TO ESTABLISH THE UNGENUIN ENESS OF THE TRANSACTION IN QUESTION TO PROVE THEM UNACCOUNTED. HE WAS REQUIRED TO ESTABLISH WITH THE HELP OF EVIDENCES THAT THE ALLEGED SALE/ PURCHASES TRANSACT ION ARE UNRECORDED, CARRIED OUT FROM UNDISCLOSED SOURCES OF INCOME AND AS A RESULT OF COLLUSION BETWEEN THE PARTIES. A.O. HAS HEAVILY RELIED ON STATEMENT/ INFO RMATION OF THE MANAGER OF THE SAMITI. HOWEVER, WHEN ORAL STATEMENTS ARE PITTED AG AINST VALID DOCUMENTARY EVIDENCE ON RECORDS, IT IS WELL ESTABLISHED LEGAL P OSITION THAT THE DOCUMENTARY EVIDENCE HAS TO PREVAIL OVER. IN THIS CASE, REPORT OF THE INVESTIGATION WING BASED ON STATEMENT OF THE SAMITI AND APPARENTLY SIMILAR S IGNATURE OF ALLEGED EMPLOYEE (SH. MANOJ) AND AS RELIED ON BY THE A.O. WITHOUT OF FERING THE OPPORTUNITY OF CROSS EXAMINATION IS PITTED AGAINST THE DOCUMENTARY EVIDE NCE ON RECORDS REBUTTING THESE STATEMENTS. SUCH DOCUMENTARY EVIDENCE HAS TO BE GIV EN PRECEDENCE AND ALSO CREDENCE IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD. THE INITIAL BURDEN CAST ON THE APPELLANT U/S. 68 HAS BEEN DULY DISCHARGED B Y HIM WHEREAS A.O. HAS ONLY THE STATEMENT OF THE SAMITI WHO HAS STATED THAT TR ANSACTION CARRIED OUT BY IT ARE NOT GENUINE. A.O. HAS ALSO NOT EXERCISED HIS POWERS U/S. 131 TO EXAMINE OR CROSS- EXAMINE THE PARTIES. IT IS THE AO ALONE WHO HAS TO APPLY HIS MIND AND FORM HIS OPINION WHICH IS INDEPENDENT ANS UNGUIDED BY THE OP INION OF THE OFFICER IN CHARGE OF INV. WING. THE INFORMATION REGARDING THE ACCOUNT HOLDER, AND MANAGER OF THE ITA NO. 390/AGRA/2012 20 SAMITI HAS BEEN PROVIDED REGARDING THE ACCOUNT HOLD ER, AND MANAGER OF THE SAMITI HAS BEEN PROVIDED AT THE BACK OF THE APPELLANT. THE APPELLANT HAS CARRIED OUT REGULAR BUSINESS TRANSACTION WITH M/S. U-FLEX & M/S . POLYPLEX IN THE PAST AND DURING THE YEAR ALSO WHEREAS NO TRANSACTION HAS BEE N MADE WITH VACMET PACKAGING (INDIA) PVT. LTD. DURING THE YEAR AND AS CONFIRMED REPEATEDLY BY IT ALSO BEFORE VARIOUS AUTHORITIES. THERE IS NO CORROBORATI VE EVIDENCE TO SHOW THAT THE CASE FOR THESE DRAFTS / AT PAR CHEQUES HAS BEEN REC EIVED FROM THE APPELLANT IN THE ABSENCE OF WHICH STATEMENT OF THE MANAGER OF THE SA MITI CANNOT BE ACCEPTED AS TRUE ON HIS MERE IPSE DIXIT. HE HAS NEVER BEENCONFR ONTED WITH THE EVIDENCES PRODUCED BY THE APPELLANT AND ON RECORD. CREDENCE CANNOT BE GIVEN TO THE STATEMENT OF A PERSON WHO HIMSELF ADMITS & HAS DUBI OUS DEALINGS, AS MENTIONED IN REPORT OF THE INVESTIGATION WING IN RESPECT OF SEAR CH OPERATION CARRIED OUT IN MARYADIT SAMITI CASES, AS AGAINST THE DOCUMENTARY E VIDENCES ON RECORD. THE SAME VIEW HAS BEEN HELD BY HONBLE ITAT, AGRA IN CASE OF SHRI ASHOK KUMAR LAVANIA, PROP. BAJRANG AUTOMOBILES, AGRA IN ITA NO. 112/AGR/ 2004 VIDE ORDER DT. 30.05.08. THE SAME DECISION HAS AGAIN BEEN FOLLOWED BY IT IN CASE OF SH. BAIJNATH AGARWAL, PROP. M/S. BAIJNATH SCRAP CENTRE IN ITA NO . 133/AGR/2005 VIDE ORDER DT. 13.04.2010 WHEREBY LD. THIRD MEMBER HAS ALSO AGREED WITH THE VIEW TAKEN BY THE LD. JUDICIAL MEMBER WHILE ALLOWING ASSESSEES APPEA L. AO HAS FAILED TO CONCLUSIVELY PROVE THAT ALLEGED TRANSACTION IN BOOK S OF MARYADIT SAMITI BANK PERTAIN TO THE APPELLANT AND REPRESENT HIS UNDISCLO SED INCOME OF THE YEAR, THIS VIEW HAS ALSO BEEN HELD BY HONBLE ALLAHABAD HIGH C OURT IN CASE OF CIT VS. SALEK CHAND AGRAWAL (2008) 300 ITR 426 (ALL.). IN VIEW OF FACTS ABOVE AND RESPECTFULLY FOLLOWING T HE DECISIONS OF JURISDICTIONAL HONBLE IIAT AGRA, IT IS HELD THAT A .O. IS NOT FOUND JUSTIFIED IN MAKING ADDITIONOF RS. 36003133/- AS UNDISCLOSED INC OME OF THE APPELLANT , THE SAME IS, HEREBY, DELETED. 5. THE LD. DR MERELY RELIED UPON THE ORDER OF THE A O. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. CIT(A) AFTER PERUS AL OF THE RECORD AND THE RECORD OF INVESTIGATION WING CORRECTLY DELETED THE ADDITIO N. THE ASSESSEE DENIED HAVING ANY TRANSACTION WITH THE ABOVE THREE PARTIES. THE B ANK ACCOUNT HOLDER SHRI NARAINDAS RATHORE AND BANK MANAGER WERE NOT PRODUCE D FOR CROSS EXAMINATION ON ITA NO. 390/AGRA/2012 21 BEHALF OF THE ASSESSEE. THEREFORE, THEIR ORAL EVIDE NCES CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. THE ORAL EVIDENCES CANNOT BE GIVEN PREFERENCE AGAINST THE DOCUMENTARY EVIDENCE AND RELIED UPON THE DECISION O F PUNJAB & HARYANA HIGH COURT IN THE CASE OF PARAMJIT SINGH VS. ITO, 323 IT R 588, IN WHICH IT WAS HELD THAT IT IS WELL KNOWN PRINCIPLE THAT NO ORAL EVIDENCE I S ADMISSIBLE ONCE THE DOCUMENTS CONTAIN ALL THE TERMS AND CONDITIONS. HE HAS SUBMI TTED THAT NO ENTRY OF ANY ISSUE OF CHEQUES/DRAFT HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, SECTION 68 OF THE IT ACT WOULD NOT APPLY. HE HAS SUBMITTED THA T SINCE NO ENTRY OF CHEQUES/DRAFTS IN QUESTION WERE RECORDED IN THE BOO KS OF ACCOUNT, THEREFORE, SECTION 68 WOULD NOT APPLY. HE HAS RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SUNDER LAL JAIN VS. CIT, 117 I TR 316, DECISION OF GAUHATI HIGH COURT IN THE CASE OF ANAND RAM RAITANI, 223 IT R 544, DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. SHANTA DEVI VS. CIT, 171 ITR 532 AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. BHAICHAND H. GANDHI, 141 ITR 67. HE HAS SUBMITTED THAT M/S. VACM ET PACKAGING INDIA PVT. LTD. HAS CONFIRMED DIRECTLY TO THE CIT(A) THAT NO TRANSA CTIONS WERE CONDUCTED WITH THE ASSESSEE AS IS ALLEGED BY THE AO. IN THE CASE OF OT HER TWO PARTIES, NO SUCH TRANSACTIONS WITH THE ASSESSEE WERE FOUND IN THEIR BOOKS OF ACCOUNT. NO CORROBORATIVE EVIDENCES HAVE BEEN FOUND AGAINST THE ASSESSEE. THE HAND WRITING OF MANOJ WAS NOT OBTAINED AND EXAMINED THROUGH ANY HAN D WRITING EXPERT. THE ONUS ITA NO. 390/AGRA/2012 22 UPON THE AO U/S. 148 OF THE IT ACT TO PROVE THAT TH E ASSESSEE HAS EARNED UNDISCLOSED, HAS NOT BEEN DISCHARGED. HE HAS SUBMIT TED THAT THE AO DID NOT MAKE ANY INDEPENDENT ENQUIRY AND SOLELY RELIED UPON THE INFORMATION OF ADIT(INV.) WHICH WILL NOT PROVE ANY CASE AGAINST THE ASSESSEE. THEREFORE, THE LD. CIT(A) ON PROPER APPRECIATION OF FACTS CORRECTLY DELETED THE ADDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE FINDINGS OF TH E AO ARE MERELY BASED ON THE INFORMATION PROVIDED BY THE INVESTIGATION WING. THE AO DID NOT VERIFY WHETHER SUCH INFORMATION WAS CORRECT OR BASED UPON SOME IND EPENDENT EVIDENCE OR MATERIAL. THE AO DID NOT MAKE ANY ENQUIRY INDEPENDE NTLY IN THE MATTER. THEREFORE, THE FINDINGS OF THE AO HAVE BEEN CORRECTLY SET ASID E BY THE LD. CIT(A). THE ACCOUNT HOLDER WITH M/S. GWALIOR CITIZEN SAKH SAHAKARITA MA RYADIT, GWALIOR, SHRI NARAINDAS RATHORE AND BANK MANAGER WERE NOT PRODUCE D FOR CROSS EXAMINATION ON BEHALF OF THE ASSESSEE DESPITE REQUEST MADE BY THE ASSESSEE. THEREFORE, THEIR STATEMENTS ALLEGEDLY RELIED UPON BY THE AO CANNOT B E READ IN EVIDENCE AGAINST THE ASSESSEE. WE RELY UPON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF KISHAN CHAND CHELA RAM, 125 ITR 713 AND DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF S.M.C. SHARE BROKING LTD., 288 ITR 3 45. M/S. VACMET PACKAGING ITA NO. 390/AGRA/2012 23 INDIA PVT. LTD. IN THEIR REPLY U/S. 133(6) INFORMED THAT THEY HAVE NOT ENTERED INTO ANY TRANSACTION WITH THE ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. THEY HAVE DISCLOSED THE NAMES OF THE PARTIES FROM WHOM THIS P ARTY HAS RECEIVED DEMAND DRAFTS/CHEQUES AND NONE OF THE CHEQUES/DEMAND DRAFT S WERE CONNECTED WITH THE ASSESSEE. THEY HAVE ALSO CONFIRMED THAT WHATEVER DE MAND DRAFTS WERE RECEIVED AGAINST THE SALE OF GOODS, HAVE BEEN ENTERED INTO T HEIR BOOKS OF ACCOUNT AND THEY ARE ALSO ASSESSED TO TAX AND FILED THE RETURN OF IN COME FOR THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, ON THE BASIS OF THIS REPLY OF M/S. VACMET PACKAGING INDIA PVT. LTD., NO LIABILITY CAN BE FASTENED UPON THE AS SESSEE OF ANY UNDISCLOSED MONEY AS IS CONSIDERED BY THE AO. FURTHER, THE HAND WRITI NG OF MR. MANOJ, WHO IS STATED TO BE EMPLOYEE OF THE ASSESSEE WHO HAS HANDLED THE BANK ACCOUNT, HAS NOT BEEN EXAMINED THROUGH ANY HAND WRITING EXPERT. HE WAS AL SO NOT EXAMINED AGAINST THE INTEREST OF ASSESSEE. THEREFORE, THE ORAL EVIDENCE SHOULD NOT HAVE BEEN ACCEPTED IN THIS CASE AGAINST DOCUMENTARY EVIDENCE AVAILABLE ON RECORD IN FAVOUR OF THE ASSESSEE. IN RESPECT OF OTHER TWO PARTIES, THEIR RE GULAR TRANSACTIONS TALLY WITH THE ACCOUNTS OF THE ASSESSEE AND NO FURTHER TRANSACTION S HAVE BEEN MADE BY THE ASSESSEE WITH THESE TWO PARTIES AS IS ALLEGED BY TH E AO. IT IS STATED IN THE REASONS FOR REOPENING OF ASSESSMENT THAT ALL THE THREE COMP ANIES ABOVE REVEALED THAT THEY HAVE RECEIVED CHEQUES/DEMAND DRAFTS AS PAYMENT AGAI NST GOODS, WHICH HAVE BEEN SOLD TO THE ASSESSEE. THESE APPEARS TO BE 374 TRANS ACTIONS, BUT THE AO DID NOT BRING ITA NO. 390/AGRA/2012 24 ANY EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE H AS PURCHASED ANY GOODS FROM THESE THREE PARTIES OR HAVE ISSUED ANY CHEQUES/DRAF TS FROM HIS KNOWN OR UNKNOWN SOURCES. NO SUCH DETAILS WERE ALSO FOUND FROM THE A CCOUNT OF SHRI NARAINDAS RATHORE TO CONNECT THE ASSESSEE WITH ANY OF THE 374 TRANSACTIONS IN QUESTION. THUS, NO CORROBORATIVE OR LINK EVIDENCES HAVE BEEN FOUND OR BROUGHT ON RECORD TO CONNECT THE ASSESSEE WITH ANY ALLEGED UNACCOUNTED T RANSACTIONS WITH THE THREE PARTIES. SINCE NO ENTRIES OF ANY TRANSACTIONS HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NO SPECIFIC EVIDENCES H AVE BEEN FOUND AGAINST THE ASSESSEE TO CONNECT HIM WITH THE ALLEGED SALE/PURCH ASE TRANSACTIONS WITH THE THREE PARTIES, THEREFORE, SECTION 68 WOULD NOT APPLY IN T HE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE. IT IS WELL SETTLED LAW THAT I N THE PROCEEDINGS U/S. 148 OF THE IT ACT, THE ONUS IS UPON THE AO TO PROVE THAT PARTICUL AR UNDISCLOSED INCOME BELONG TO THE ASSESSEE. IN THIS CASE, THE ASSESSEE FROM THE D AY ONE DENIED TO HAVE MADE ANY PURCHASE FROM THREE PARTIES, THEREFORE, THE AO SHAL L HAVE TO PROVE THAT THE AMOUNT IN QUESTION BELONG TO THE ASSESSEE FOR MAKING PAYME NT OF THE PURCHASE OF GOODS TO THREE PARTIES BUT THE AO IN THIS CASE DID NOT BRING ANY EVIDENCE ON RECORD TO CONNECT THE ASSESSEE WITH THE ALLEGED TRANSACTIONS. THEREFORE, THE ONUS UPON THE AO HAS NOT BEEN DISCHARGED IN ACCORDANCE WITH THE L AW. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ABOVE DISCUSSION, AND FIND ING OF THE LD. CIT(A), WE FIND THAT LD. CIT(A) HAS EXAMINED THE CASE THOROUGHLY ON THE BASIS OF MATERIAL AVAILABLE ON ITA NO. 390/AGRA/2012 25 RECORD AND CONSIDERING THE RECORD OF THE ADIT(INV.) IN WHICH NO INFIRMITY HAS BEEN POINTED OUT DURING THE COURSE OF ARGUMENTS. SINCE I T IS A DEPARTMENTAL APPEAL AND NO MATERIAL OR EVIDENCES HAVE BEEN PRODUCED TO REBU T THE FINDING OF FACT RECORDED BY THE LD. CIT(A),THEREFORE, WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE DEPARTMENTAL A PPEAL FAILS AND IS DISMISSED. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY