Mr. R.K. Gupta, New Delhi V. ACIT, New Delhi

ITA 3919/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8123 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 01-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B MEENA
• Assessee Lawyers: SANJIV BINDAL
• Keywords: Gift; Search and seizure; Share purchase agreement; Opportunity of being heard; Deemed to accrue or arise in india; Tangible material
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3919/DEL/2014 AY: 20 07-08 MR. R.K. GUPTA, VS ASSTT.COMMISSIONER OF INCOME TAX, E-13/4, VASANT VIHAR, CENTRAL CIRCLE-25 NEW DELHI. NEW DELHI. (PAN: AANPG8581F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJIV BINDAL, CA RESPONDENT BY : SHRI R.B. MEENA, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER D ATED 9.5.2014 PASSED BY THE LD. CIT(A)-XXV, NEW DELHI FO R ASSESSMENT YEAR 2007-08 CONFIRMING THE ADDITION OF RS. 8,50,000/- ADDED BACK U/S 69A OF THE INCOME TAX ACT , 1961 (HEREINAFTER CALLED THE ACT). 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE HAD F ILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARIN G A TOTAL INCOME OF RS. 5,38,177/-. THE RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT AND WAS LATER PICKED UP FOR SCRUT INY AS AN OUTCOME OF A SEARCH ACTION CARRIED OUT IN THE CASE OF MDH GROUP I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 2 ON 22.11.2006. THE ASSESSEE WAS AN EXECUTIVE DIREC TOR OF THE COMPANY M/S MAHASHIAN DI HATTI (P) LTD. (FOR SHORT MDH) AND HE WAS ALSO SUBJECTED TO THE SEARCH MOUNTED AGAINST TH E GROUP ON 22.11.2006. ALLEGEDLY, INCRIMINATING DOCUMENTS WER E FOUND AND SEIZED FROM HIS RESIDENCE AT E-13/14, IIND FLOOR, V ASANT VIHAR, NEW DELHI. DURING THE SEARCH, CASH OF RS. 48,400/- AND JEWELLERY OF RS. 4,02,679/- WERE FOUND. FURTHER, ASSESSEES LOCKER NO. 39 WITH PUNJAB NATIONAL BANK, UDYOG VIHAR, GURGAON JOI NTLY HELD IN THE NAME OF SHRI R.K. GUPTA AND NUTAN GUPTA WAS ALS O OPENED AND SEARCHED ON 15.01.2007 WHEREIN CASH AMOUNTING T O RS. 8,50,000/-, NSCS/KVPS WORTH RS. 1,10,000/- AND LIC POLICY PAYMENT RECEIPTS AMOUNTING TO RS. 5,40,000/- WERE F OUND AND SEIZED. IT IS SEEN FROM THE RECORDS THAT ALL OTHER ITEMS RECOVERED FROM THE LOCKER BARRING CASH OF RS. 8,50,000/- HAVE ALREADY BEEN OFFERED TO TAXATION DURING ASSESSMENT YEAR 2001-02 TO ASSESSMENT YEAR 2007-08 I.E. IN THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING UNDER THE PROVISION S OF SECTION 153A(A) OF THE ACT. 2.1 REGARDING CASH OF RS. 8.50 LACS, IT HAS BEEN TH E ASSESSEES CONTENTION THAT THE SAME WAS RECEIVED FROM A PROSPE CTIVE BUYER I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 3 M/S PATALIPUTRA CREDIT AND SECURITIES LTD. (IN SHOR T PCSL) AGAINST PROPOSED CONSTRUCTION AND SALE OF FLAT ON P LOT NO. 416, SECTOR 46, FARIDABAD AND FORMED A PART OF THE TENTA TIVE CONSIDERATION OF R.S 35.00 LACS AGREED UPON TO BE P AID BY THE BUYER TO THE ASSESSEE. HOWEVER, THE ASSESSING OFFI CER WAS OF THE OPINION THAT THE TRANSACTION WAS NOTHING BUT AN ACC OMMODATION ENTRY ARRANGED BY THE ASSESSEE TO EXPLAIN THE UNACC OUNTED CASH FOUND AT THE TIME OF THE SEARCH. ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 8.50 LAKHS U/S 69A OF THE ACT AS UNEXPLAINED CASH. THE MATTER TRAVELLED UP TO THE I TAT AND THE F BENCH OF ITAT, NEW DELHI VIDE ORDER DATED 27.04 .2012 SET ASIDE THE ISSUE OF RS. 8.50 LAKHS TO THE FILE OF TH E ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE ASSESSEE S CLAIM BY SUMMONING THE DIRECTOR OF M/S PCSL AND INVESTIGATE THE MATTER IN DETAIL AND DECIDE THE ISSUE AFTER AFFORDING THE ASSESSEE A DUE OPPORTUNITY OF BEING HEARD. 2.2 IN THE SECOND ROUND, THE DIRECTOR OF M/S PCSL, MR. ANIL SANGHI APPEARED BEFORE THE ASSESSING OFFICER AND FU RNISHED DOCUMENTARY EVIDENCES. HIS STATEMENT WAS ALSO RECO RDED ON I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 4 OATH. HOWEVER, THE ASSESSING OFFICER AGAIN MADE TH E ADDITION OF RS. 8.50 LACS ON THE FOLLOWING REASONING:- (A) THAT THE DOCUMENTS FILED BY MR. ANIL SANGHI, DIRECT OR OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. AS WELL AS HIS STATEMENT WERE NOT CONVINCING ENOUGH OF THE FACT TH AT THE SAID COMPANY HAD ENTERED INTO AN AGREEMENT TO PURCH ASE A FLAT FOR WHICH RS. 11,00,000/- IN CASH WERE PAID TO THE ASSESSEE BY IT. (B) THAT DUE TO THE FOLLOWING REASONS IT IS UNBEL IEVABLE THAT M/S PATLIPUTRA CREDIT & SECURITIES LTD. DID NO T HAVE A BANK ACCOUNT OF ITS OWN: I. THAT IT WAS A PUBLIC LIMITED COMPANY WHICH HAD ALR EADY GONE PUBLIC WITH A PUBLIC ISSUE OF RS. 10,07,30,000 /-; AND II. THAT IT HELD SHARES WORTH RS. 51,79,705/- MOST OF WHICH ARE QUOTED ON STOCK EXCHANGE, WHICH MUST COMPULSORY BE HELD IN A DEMAT ACCOUNT AND WHICH CAN NOT BE OPENED WITHOUT HAVING A BANK ACCOUNT. I. THAT IT IS UNBELIEVABLE THAT M/S PATLIPUTRA CREDIT & SECURITIES LTD. KEPT CASH OF MORE THAN RS. 11 LACS IN THE OFFICE OF THE COMPANY FOR YEARS. II. THAT THE BALANCE SHEET OF THE SAID COMPANY AS ON 31/03/06 SHOWS CASH & BANK BALANCES OF RS. 8,91,38,789/- AND AS ON 31/03/07 SHOWS BANK BALANCE OF RS. 58,066/- ONLY. FURTHER, SINCE THE COMPANY HA D A BANK BALANCE OF RS. 8,91,38,789/- IT IS UNACCEPTABL E THAT THE COMPANY SHOULD MAKE ADVANCE PAYMENT OF RS. 11,00,000/- IN CASH AND NOT THROUGH CHEQUE. III. THAT THE SAID COMPANY DID NOT ENTER INTO ANY FORMAL AGREEMENT TO SELL OR DID NOT OBTAIN ANY AUTHENTIC C ASH RECEIPT WHILE ADVANCING THE SUM OF RS. 11,00,000/- TO THE ASSESSEE. HAD THERE BEEN ANY SUCH AGREEMENT, TH E RELEVANT DOCUMENT WOULD HAVE BEEN FOUND DURING THE SEARCH OPERATION. 2.3 IN SECOND ROUND OF APPEAL BEFORE THE LD. CIT (A ) ALSO, THE ASSESSEE FAILED AND THE ADDITION WAS CONFIRMED AGAI N. 3. NOW, THE ASSESSEE HAS AGAIN APPROACHED THE TRIBU NAL IN I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 5 THIS APPEAL AND IS CONTESTING THE IMPUGNED ADDITION OF RS. 8.50 LAKHS. 3.1 THE LD. AR SUBMITTED THAT THE ASSESSING OFFIC ER HAS REJECTED THE EXPLANATION OF THE APPELLANT REGARDING SOURCE OF RS. 8.50 LACS FOUND IN CASH FROM HIS BANK LOCKER BY NOT BELIEVING, ON MERE CONJECTURES AND SURMISES, THAT IT WAS OUT OF R S. 11 LACS RECEIVED AS AN ADVANCE FROM M/S PATLIPUTRA CREDIT & SECURITIES LTD. BY RAISING DOUBTS ON THE STATEMENT OF ITS DIRECTOR, MR. ANIL SANGHI, RECORDED BY HIM AND IGNORING THE DOCUMENTS FURNISHED BY MR. SANGHI IN SUPPORT THERETO BEFORE THE AO. IT WAS SUBMITTED THAT CONSEQUENT TO THE SEARCH AND SEIZURE PROCEEDIN GS UNDERTAKEN ON M/S PATLIPUTRA CREDIT & SECURITIES LT D. IN NOVEMBER, 1996, IT HAS BEEN REGULARLY ASSESSED TO I NCOME-TAX IN CENTRAL CIRCLE-23, NEW DELHI TILL DATE AND THE RETU RNS OF INCOME OF THE ASSESSEE FOR AYS 2007-08 AND 2008-09 AS WELL AS THOSE FILED BY M/S PATLIPUTRA CREDIT & SECURITIES LTD. WE RE BOTH ASSESSED U/S 143(3) BY CC-23, NEW DELHI. IT WAS FUR THER SUBMITTED THAT AT THE TIME OF RECORDING OF MR. ANIL SANGHIS STATEMENT ON 12/11/12 BY THE ASSESSEES AO, MR. ANI L SANGHI HAD FURNISHED DOCUMENTARY EVIDENCES IN SUPPORT THER EOF AND THESE INCLUDED - I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 6 (A) AUDITED BALANCE SHEET AS ON 31/03/07 OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. SHOWING SUNDRY DEBTORS OF RS. 48,78,303/- WHICH INCLUDED THE ADVANCE OF RS . 11,00,000/- GIVEN TO MR. RAKESH KUMAR GUPTA (THE APPELLANT) IN OCTOBER, 2006. (B) RETURN OF INCOME FILED BY M/S PATLIPUTRA CREDIT & SECURITIES LTD. FOR THE A Y 2007-08. (C) ASSESSMENT ORDER DATED 31/08/09 OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. PASSED U/S 143(3) BY THE D C1T, CENTRAL CIRCLE-23, NEW DELHI. THE LD. AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS OF M/S PATLIPUTRA CREDIT & SECURITIES L TD. FOR THE AY 2007-08, A SPECIFIC QUERY WAS RAISED BY THE AO REGARDING ADVANCE OF RS. 11,00,000/- GIVEN TO MR. R .K. GUPTA (THE ASSESSEE) AND THE SAME WAS SATISFACTORIL Y RESPONDED TO. (D ) AUDITED BALANCE SHEET AS ON 31/03/08 OF M/S PATL IPUTRA CREDIT & SECURITIES LTD. WHEREIN THE BALANCE OF SUN DRY DEBTORS STANDS REDUCED BY RS. 11,00000/- SINCE IT H AD BEEN REFUNDED BY MR. RAKESH KUMAR GUPTA (THE ASSESSEE) D URING THAT YEAR. (E) RETURN OF INCOME FILED BY M/S PATLIPUTRA CREDIT & SECURITIES LTD. FOR THE AY 2008-09. (F) ASSESSMENT ORDER DATED 15/11/10 OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. PASSED U/S 143(3) BY THE A C1T, CENTRAL CIRCLE-23, NEW DELHI. 3.2 THE LD. AR SUBMITTED THAT, THE FACTUM OF ADVANC ING RS. 11,00,000/- IN CASH TO THE APPELLANT BY M/S PATLIPU TRA CREDIT & SECURITIES LTD. IN OCTOBER, 2006 WAS DULY SCRUTINIZ ED BY THE AO OF THAT COMPANY IN THE ASSESSMENT PROCEEDINGS UNDER TAKEN U/S 143(3) OF THE ACT FOR AY 2007-08 AND IT STOOD ACCEP TED BY HIM. THEREFORE, IT CANNOT BE DOUBTED NOW MERELY ON PREPO NDERANCE OF I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 7 PROBABILITIES BY THE ASSESSEES AO. IT WAS FURTHER SUBMITTED THAT WHETHER THE COMPANY HAD KEPT ITS INVESTMENTS IN SHA RES IN THE PHYSICAL FORM OF SHARE CERTIFICATES OR IN A DEMAT A /C WAS IMMATERIAL AS FAR AS THE ADVANCING OF RS. 11 LACS I N CASH TO THE ASSESSEE WAS CONCERNED. SINCE THE EXISTENCE OF SAID INVESTMENT HAD STOOD CONFIRMED IN THE SCRUTINY ASSESSMENTS OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. AND, THEREFORE, THE EXPLANATION OF MR. ANIL SANGHI COULD NOT BE DOUBTED. THE LD. AR ALSO SUBMITTED THAT THE ASSESSEES AO HAD REFERRED TO A FIGURE OF RS. 8,91,38,789/- IN THE BALANCE SHEET OF M/S PATLIPUTR A CREDIT & SECURITIES LTD. AND STATED THAT THE SAME REPRESENTE D THE CLOSING BALANCE OF CASH AND BANK AS ON 31/03/06, THUS, CH ALLENGING THE VERACITY OF THE STATEMENT GIVEN BY MR. ANIL SAN GHI THAT THE COMPANY DID NOT HAVE ANY BANK ACCOUNT AS ON THAT DA TE. WHEREAS IT CAN BE VERIFIED FROM THE SAID BALANCE SH EET THAT THIS FIGURE OF RS. 8,91,38,789/- WAS THE AMOUNT OF INCO ME TAX DEPOSIT UNDER APPEAL AND NOT CASH AND BANK BALANC E AS ALLEGED BY THE AO AND THEREFORE NO CREDENCE COULD BE PLACED ON THE CHARGES MADE BY THE AO ON THE BASIS OF THE SAID WRO NG FIGURE PICKED UP BY HIM FOR REJECTING THE EXPLANATIONS OF MR. ANIL SANGHI. I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 8 4. THE LD. DR REFERRED AT LENGTH TO THE ORDER OF TH E LD. CIT(A) AND AVERRED THAT M/S PCSL WAS A LISTED COMPANY AND THEREFORE IT CANNOT BE BELIEVED THAT THE COMPANY DID NOT HAVE A BANK ACCOUNT. HE ALSO REFERRED TO THE FINDING OF THE LD . CIT (A) THAT THE COMPANY DID NOT HAVE SUFFICIENT CASH TO CLOSE THE D EAL. PLACING HEAVY RELIANCE ON THE ORDERS OF THE AUTHORITIES BEL OW, THE LD. DR SUBMITTED THAT ON FACTS, THE ADDITION DESERVED TO B E UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE RECORDS. IT IS SEEN FROM THE IMPUGNED ORDER TH AT THE LD. CIT (A) HAS UPHELD THE ADDITION ON MERE SUSPICION. THE LD. CIT (A) HAS OBSERVED ON PAGE 10 THAT THE ENTIRE CASE APPEARS TO HAVE BEEN MANIPULATED IN SUCH A FASHION AS TO MAKE THE E NTIRE SEQUENCE OF EVENTS LOOK GENUINE AND CREDITABLE. TH E RELEVANT QUESTION AND ANSWERS THERETO PROVE THAT THE PROBABI LITIES PREPONDERATED MORE IN FAVOUR OF THE THEORY FORMED B Y THE LD. ASSESSING OFFICER WHILE MAKING THE ADDITION OF RS. 8.50 LACS THAN THAT ADVANCED BY THE APPELLANT BEFORE THE FORMER. THE LD. CIT (A) THEN PROCEEDED TO SECOND THE OBSERVATIONS OF THE AS SESSING OFFICER THAT M/S PCSL HAD NO LIQUIDITY TO PURCHASE THE FLAT. HOWEVER, THE LD. CIT (A) HAS NOT GIVEN ANY SPECIFIC REASON AS TO HOW THE EVIDENCES/DOCUMENTS PRODUCED BOTH BY THE AS SESSEE AS WELL AS M/S PCSL WERE NOT RELIABLE. THE LD. AR HAS SUBMITTED A PAPER BOOK WHICH CONTAINS 39 PAGES OF DOCUMENTS/EVI DENCES SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUTHORIT IES. HOWEVER, THERE IS NO SPECIFIC FINDING GIVEN BY THE LD. CIT ( A) ON THESE I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 9 DOCUMENTS. IT IS SEEN FROM THE RECORDS THAT MR. AN IL SANGHI, DIRECTOR OF M/S PCSL, HAS ACCEPTED IN HIS STATEMENT RECORDED ON OATH BY THE ASSESSING OFFICER ON 12.11.2012 THAT TH E COMPANY HAD GIVEN AN ADVANCE OF RS.11,00,000/- ON 27.10.200 6 TO THE ASSESSEE. MOREOVER, M/S PCSL HAD ALSO MENTIONED TH IS ADVANCE GIVEN TO THE ASSESSEE IN ITS ASSESSMENT PROCEEDINGS BEFORE DCIT, CENTRAL CIRCLE-23, NEW DELHI WHICH IS ALSO ON RECOR D. THE CONTENTION OF THE LD. AR THAT RS. 89,138,179/- PERT AIN TO INCOME TAX DEPOSITED UNDER APPEAL IS ALSO CORRECT AS IS EV IDENT FROM THE BALANCE SHEET OF M/S PCSL ON 31.3.2007 AND PLACED A T PAGE 17 OF THE PAPER BOOK. COPY OF CASH ACCOUNT, BANK ACCO UNT AND ACCOUNT PERTAINING TO ADVANCE AGAINST FLAT ARE ALSO ON RECORD AND THEY SUPPORT THE CONTENTION OF THE ASSESSEE AND IT IS INDEED SURPRISING THAT IN THE FACE OF SUCH HUGE AMOUNT OF EVIDENCE, THE LD. CIT (A) CHOSE TO ADJUDICATE THE ISSUE ON A FICT IONAL PREPONDERANCE OF PROBABILITIES WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD TO CONTRADICT THE CLAIM OF THE A SSESSEE. EVEN IN THE APPEAL BEFORE US, THE DEPARTMENT COULD NOT P OINT OUT ANY DEFECT IN THE EVIDENCES/DOCUMENTS BUT SIMPLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. THE HON'BLE PUNJA B & HARYANA HIGH COURT IN A RECENT JUDGEMENT IN THE CASE OF CIT VS JAWAHARLAL OSWAL AND OTHERS (I.T.A. NO. 49 OF 1999, JUDGMENT DELIVERED ON 29.01.2016) DISMISSED THE DEPARTMENTS APPEAL BY HOLDING THAT SUSPICION AND DOUBT MAY BE THE STARTIN G POINT OF AN INVESTIGATION BUT CANNOT, AT THE FINAL STAGE OF ASS ESSMENT, TAKE THE PLACE OF RELEVANT FACTS, PARTICULARLY WHEN DEEM ING PROVISION IS SOUGHT TO BE INVOKED. THE HONBLE COURT HAS OBSERV ED , ...THE I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 10 PRINCIPLE THAT GOVERNS A DEEMING PROVISION IS THAT THE INITIAL ONUS LIES UPON THE REVENUE TO RAISE A PRIMA FACIE DOUBT ON THE BASIS OF CREDIBLE MATERIAL. THE ONUS, THEREAFTER, SHIFTS TO THE ASSESSEE TO PROVE THAT THE GIFT IS GENUINE AND IF THE ASSESSEE IS UNABLE TO PROFFER A CREDIBLE EXPLANATION, THE ASSESSING OFFIC ER MAY LEGITIMATELY RAISE AN INFERENCE AGAINST THE ASSESSE E. IF, HOWEVER, THE ASSESSEE FURNISHES ALL RELEVANT FACTS WITHIN HI S KNOWLEDGE AND OFFERS A CREDIBLE EXPLANATION, THE ONUS REVERTS TO THE REVENUE TO PROVE THAT THESE FACTS ARE NOT CORRECT. THE REVENUE CANNOT DRAW AN INFERENCE BASED UPON SUSPICION OR DOUBT OR PERCEPTI ONS OF CULPABILITY OR ON THE QUANTUM OF THE AMOUNT, INVOLV ED PARTICULARLY WHEN THE QUESTION IS ONE OF TAXATION, UNDER A DEEMI NG PROVISION. THUS, NEITHER SUSPICION/DOUBT, NOR THE QUANTUM SHAL L DETERMINE THE EXERCISE OF JURISDICTION BY THE ASSESSING OFFIC ER.FURTHER A DEEMING PROVISION REQUIRES THE ASSESSING OFFICER TO COLLECT RELEVANT FACTS AND THEN CONFRONT THE ASSESSEE, WHO IS THEREA FTER, REQUIRED TO EXPLAIN INCRIMINATING FACTS AND IN CASE HE FAILS TO PROFFER A CREDIBLE INFORMATION, THE ASSESSING OFFICER MAY VALIDLY RAIS E AN INFERENCE OF DEEMED INCOME UNDER SECTION 69-A. AS ALREADY HELD, IF THE ASSESSEE PROFFERS AN EXPLANATION AND DISCLOSES ALL RELEVANT FACTS WITHIN HIS KNOWLEDGE, THE ONUS REVERTS TO THE REVEN UE TO ADDUCE EVIDENCE AND ONLY THEREAFTER, MAY AN INFERENCE BE R AISED, BASED UPON RELEVANT FACTS, BY INVOKING THE DEEMING PROVIS IONS OF SECTION 69-A OF THE ACT. IT IS TRUE THAT INFERENCES AND PRE SUMPTIONS ARE INTEGRAL TO AN ADJUDICATORY PROCESS BUT CANNOT BY T HEMSELVES BE RAISED TO THE STATUS OF SUBSTANTIAL EVIDENCE OR EVI DENCE SUFFICIENT TO RAISE AN INFERENCE. A DEEMING PROVISION, THUS, E NABLES THE I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 11 REVENUE TO RAISE AN INFERENCE AGAINST AN ASSESSEE O N THE BASIS OF TANGIBLE MATERIAL AND NOT ON MERE SUSPICION, CONJEC TURES OR PERCEPTIONS. 6. THEREFORE, IN THE LIGHT OF THE FACTS AND CIRCUMS TANCES OF THE CASE, IT IS OUR CONSIDERED OPINION THAT ONCE THE AS SESSEE HAD OFFERED AN EXPLANATION FORTIFIED WITH DOCUMENTARY E VIDENCES AND FURTHER CORROBORATED BY A THIRD PARTY, THE ONUS REV ERTED TO THE REVENUE TO PROVE THAT THE FACTS WERE NOT CORRECT. THE DEPARTMENT WAS PATENTLY WRONG IN DRAWING AN ADVERSE INFERENCE BASED UPON SUSPICION OR PERCEPTION OF CULPABILITY AND HENCE TH E ADDITION CANNOT BE SUSTAINED. THE ADDITION IS ACCORDINGLY D ELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2016. SD/- SD/- (N.K. SAINI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 29TH OF APRIL, 2016 GS I.T.A. NO. 3919/D/2014 ASSESSMENT YEAR 2007-08 12 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 4. DR, ITAT BY ORDER ASSTT. REGISTRAR