ITO, New Delhi V. Smt. Rita Dhingra, New Delhi

ITA 4182/DEL/2011

• Counselvise Citation: 418220114 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH K GUPTA
• Assessee Lawyers: VIKRAM SAHAY
• Keywords: Bogus purchase; Unexplained investment; Income from undisclosed sources; Principle of natural justice; Additional evidence; Wrong claim; Corroborative evidences; Onus to prove
• Section: 131; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 4182/DEL/2011 (ASSESSMENT YEAR - 2005 - 06) THE INCOME TAX OFFICER, WARD - 23(4), ROOM NO. - 188, C.R. BUILDING, I.P.ESTATE, NEW DELHI. (APPELLANT) VS SMT. RITA DHINGRA, PROP.M/S G&J APPAREL, E - 121, SAKET, NEW DELHI PAN - ADPPD1634F (RESPONDENT) APPELLANT BY SH. SURESH K. GUPTA, CA RESPONDENT BY SH. VIKRAM SAHAY, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 03.05.2011 OF CIT(A) - III, NEW DELHI PERTAINING TO 2005 - 06 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,59,94,594/ - MADE BY THE AO ON ACCOUNT OF INCOME FROM OTHER SOURCES. 2. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD. I T(A) HAS ERRED IN DELETING THE ADDITION OF RS.22,88,000/ - MADE BY THE AO ON ACCOUNT OF INTRODUCING FURTHER CAPITAL IN THE ABSENCE OF ANY EVIDENCE OR CONFIRMATION IN SUPPORT OF THE SAME. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS O F APPEAL BEFORE OR DURING THE SOURCE OF HEARING OF THE APPEAL. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE DECLARED TOTAL EXPORT SALE OF RS.4,59,95,595/ - AGAINST WHICH CERTAIN EXPENSES UNDER VARIOUS HEADS WERE CLAIMED. THE AO CONSIDERING THE FACT THAT THE MAJOR EXPENSES CONSISTED OF CONSUMABLE STORE, DYEING AND PROCESSING EMBROIDERY CHARGES, FABRICATION CHARGES, PACKING MATERIAL AND LABOUR CHARGES ETC. AND GUIDED BY THE FACT THAT I N THE PRECEDING ASSESSMENT YEAR , I T HAD BEEN HELD THAT THE MA JOR EXPENSES WERE BOGUS WHEREIN THE EXPORT SALE WERE ALSO FOUND TO BE NOT GENUINE IN THE IN DATE OF HEARING 05.03.2015 DATE OF PRONOUNCEMENT 16 .0 4 .2015 2 I.T.A .NO. - 4182/DEL/2011 DEPTH INVESTIGATION DONE BY THE INVESTIGATION WING , A DDITION OF THE SAID AMOUNT WAS MADE BY HIM OBSERVING AS UNDER: - 1. DURING THE YEAR, THE ASSESSEE HAS DECLARED TOTAL EXPORT SALE OF RS.4,59,95,595/ - . AGAINST THIS EXPORT SALE, THE ASSESSEE HAS CLAIMED EXPENSES UNDER VARIOUS HEADS. THE MAJOR EXPENSES CLAIMED ARE ON ACCOUNT OF PURCHASES, CONSUMABLE STORE, DYEING AND PROCESSING, EMBROIDERY CHARGES, FABRICATION CHARG ES, PACKING MATERIAL AND LABOUR CHARGES ETC. IN THE PRECEDING ASSESSMENT YEAR IN THE ASSESSEE S OWN CASE, IT WAS HELD THAT THE MAJOR EXPENSES UNDER THE ABOVE HEADS ARE BOGUS AND CONSEQUENTLY, THE EXPORT SALES OF THE ASSESSEE WERE ALSO NOT FOUND GENUINE. THESE FACTS HAVE BEEN DISCUSSED IN DETAIL IN THE EARLIER YEARS ASSESSMENT ORDERS IN THE ASSESSEE S OWN CASE. MOST OF THE PARTIES FROM WHOM PURCHASES WERE MADE AND FABRICATION WORK ETC. WERE GOT DONE WERE FOUND BOGUS AND THE EXPORT REALIZATION WAS HELD AS NOTHING BUT HAWALA TRANSFER THROUGH BANKING CHANNEL. THE EARLIER ASSESSMENTS WERE MADE ON THE BASIS OF IN - DEPTH INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING, NEW DELHI AT THE TIME OF SEARCH ON DHINGRA GROUP OF CASES, AND SUBSEQUENT FINDINGS OF THE AO. ACCORDINGLY THE AR OF THE ASSESSEE WAS REPEATEDLY ASKED VIDE ORDER SHEET DATED 26.11.2007 AND 05.12.2007 TO PRODUCE THE PARTIES FROM WHOM PURCHASES HAVE BEEN CLAIMED BEFORE ME AND FURNISH CONFIRMATION IN RESPECT OF EACH OF THEM. DURING DISCUSSIONS ON VARIOUS DATES TOO, THE AR WAS DRIVEN HOME THE POINT TO PRODUCE THE PURCHASE PARTIES AND FURNISH THE RELATED CONFIRMATIONS. HOWEVER, THE ASSESSEE HAS FAILED TO EITHER PRODUCE THE PURCHASE PARTIES OR FURNISH THEIR CONFIRMATIONS BEFORE ME. TAKING INTO AC COUNT THIS DEFAULT ON THE PART OF THE ASSESSEE AND ALSO THE HISTORY OF THE ASSESSEE S CASE IN THE PRECEDING ASSESSMENT YEARS, THE PURCHASES AMOUNTING TO RS.2,14,70,517/ - (THE OPENING BALANCE OF RS,14,36,890/ - HAS ALREADY BEEN TREATED AS BOGUS IN THE LAT YE AR S ASSESSMENT ORDER) ARE TREATED AS NOT GENUINE AND BOGUS. ACCORDINGLY THE INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF EXPORT SALES IS TREATED AS INCOME FROM OTHER SOURCES. PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF IN COME AND CONCEALMENT OF SUCH INCOME, AS DISCUSSED, ARE ALSO BEING INITIATED SEPARATELY. 2. FROM THE ABOVE DETAILS IT IS NOTICED THAT THE ASSESSEE DID NOT MAKE ANY PURCHASES OF STOCK OF RAW - MATERIAL DURING THE YEAR UNDER CONSIDERATION AS THE OPENING STOCK AS WELL AS THE PURCHASES CLAIMED TO HAVE BEEN MADE DURING THE INSTANT YEAR ARE FOUND TO BE BOGUS. THUS THE ASSESSEE DID NOT HAVE ANY CORRESPONDING STOCK/RAW MATERIAL FOR THE PRODUCTION OF ARTICLES AGAINST WHICH SHE HAS CLAIMED MANUFACTURING AND OTHER RELATED EXPENSES. FURTHER IT IS PERTINENT TO NOTE THAT IN THE ASSESSMENT ORDER OF THE ASSESSEE S CASE FOR THE PRECEDING ASSESSMENT YEAR 2004 - 05, THE ENTIRE PURCHASES MADE BY THE ASSESSEE WERE HELD TO BE NOT GENUINE/BOGUS ON THE BASIS OF ELABORATE FINDINGS AS REC ORDED BY THE AO IN THE ORDER. ACCORDINGLY, THE ASSESSEE S INCOME FROM SALES TOO WERE HELD TO BE NOT GENUINE AND THUS INCOME FROM UNDISCLOSED SOURCES. HENCE, THE ASSESSEE S CLAIM UNDER THE VARIOUS HEADS OF EXPENSES DURING THE INSTANT YEAR TOO ARE EVIDENTL Y PRETENTIOUS AND BOGUS. THE ASSESSEE HAS THUS NOT CONDUCTED ANY BUSINESS OF THE NATURE CLAIMED BY HIM DURING THE 3 I.T.A .NO. - 4182/DEL/2011 YEAR AND CONSEQUENTLY THE ENTIRE EXPENSES CLAIMED BY HIM ARE HEREBY DISALLOWED AND ADDED BACK TO THE DECLARED TOTAL INCOME. CORRESPONDINGLY, THE INCOME DECLARED BY HIM IN THE STATED GARB OF JOB/WORK/SALES ARE HELD TO BE GENERATED FROM UNDISCLOSED SOURCES AS THE ASSESSEE HAS FAILED TO PRODUCE ANY VERIFIABLE EVIDENCE. 3. AGGRIEVED BY THIS THE ASSESSEE CAME IN APPEAL BEFORE THE FIRST APPELLANT AUTHORITY . T HE FACTS W E R E IN THE FOLLOWING MANNER SUMMED UP BY THE CIT(A): - 4. IN GROUND NO.3 THE APPELLANT HAS CONTESTED THE ACTION OF THE AO IN MAKING AN ADDITION OF RS.4,59,94,594/ - HAVING DISALLOWED THE ENTIRE EXPENSES CLAIMED BY THE APPELLANT AND HOLDING THE SAME AS BOGUS. FROM THE ASSESSMENT ORDER IT IS NOTED THAT THE AO, DURING THE ASSESSMENT PROCEEDINGS, FOUND THAT THE APPELLANT HAS DECLARED TOTAL EXPORT SALES OF RS.4,59,94,595/ - AGAINST WHICH THERE IS A CLAIM OF EXPENSES UNDER VARIOUS HEADS. MAJOR EXP ENSES CLAIMED BY THE APPELLANT ARE ON ACCOUNT OF PURCHASES, CONSUMABLE STORES, DYEING AND PROCESSING, EMBROIDERY CHARGES, FABRICATION CHARGES, PACKING MATERIAL AND LABOUR CHARGES. THAT THERE HAS BEEN HISTORY OF DISALLOWANCE OF ALL EXPENSES IN THE ASSESSMEN T OF THE PRECEDING ASSESSMENT YEARS IN APPELLANT'S CASE AND IN THOSE ASSESSMENT YEARS, EXPORT SALES OF THE APPELLANT HAVE NOT BEEN HELD TO BE GENUINE. IT WAS ALSO FOUND IN THE EARLIER ASSESSMENT YEARS THAT MOST OF THE PARTIES FROM WHOM PURCHASES WERE SHOWN TO BE MADE AND FABRICATION WORK WERE CLAIMED TO BE GOT DONE WERE FOUND TO BE BOGUS AND CONSEQUENTLY THE EXPORT REALIZATION WERE HELD NOTHING BUT HAWALA TRANSFER THROUGH BANKING CHANNELS. IT WAS FURTHER OBSERVED BY THE AO THAT EARLIER ASSESSMENTS WERE MADE ON THE BASIS OF IN - DEPTH INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT AT THE TIME OF SEARCH ON DHINGRA GROUP OF CASES AND SUBSEQUENT FINDINGS OF THE AO. AS PER AO, THE APPELLANT WAS REQUIRED TO PRODUCE BEFORE THE AO THE PARTIES FR OM WHOM PURCHASES HAVE BEEN CLAIMED TO BE MADE AND ALSO TO FURNISH CONFIRMATIONS IN RESPECT OF EACH OF THEM. THAT AS THE ASSESSEE DURING ASSESSMENT PROCEEDINGS, FAILED TO PRODUCE THE PARTIES AND ALSO DID NOT FURNISH THE CONFIRMATIONS BEFORE THE AO, THEREFO RE, THE AO, AFTER TAKING INTO ACCOUNT THE ABOVE DEFAULT ON THE PART OF THE APPELLANT AND ALSO TAKING INTO ACCOUNT THE HISTORY OF THE APPELLANT'S CASE IN THE PRECEDING ASSESSMENT YEARS, DISALLOWED THE PURCHASES AMOUNTING TO RS. 2,14,70,517/ - AND THE SAME WE RE HELD TO BE NOT GENUINE AND BOGUS. THE AO THEREAFTER DISALLOWED ALL THE EXPENSES CLAIMED AS PER THE P&L ACCOUNT ON THE GROUND THAT THERE HAS NOT BEEN ANY CORRESPONDING STOCK/RAW MATERIAL FOR PRODUCTION OF ARTICLE AGAINST WHICH THERE IS A CLAIM OF MANUFAC TURING AND OTHER RELATED EXPENSE. IN VIEW OF THE FACT THAT IN THE PRECEDING ASSESSMENT YEAR I.E. A. Y 2004 - 05, ENTIRE PURCHASE MADE BY THE APPELLANT WERE HELD TO BE NOT GENUINE/BOGUS ON THE BASIS OF ELABORATE FINDINGS RECORDED BY THE AO IN THE ORDER FOR THE ABOVE ASSESSMENT YEAR AND ACCORDINGLY, CLAIM OF ALL EXPENSES WERE DISALLOWED AND ADDED BACK TO THE DECLARED TOTAL INCOME OF THE APPELLANT. 3.1. THE ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSEE HAVE BEEN EXTRACTED IN THE IMPUGNED ORDER AND ARE REPROD UCED FOR READY - REFERENCE: - 4 I.T.A .NO. - 4182/DEL/2011 4.1 BEFORE ME, THE APPELLANT THROUGH HER COUNSEL CONTESTED THE ABOVE ADDITION AND THE SUBMISSION MADE ON BEHALF OF THE APPELLANT ARE REPRODUCED AS UNDER: THE ASSESSING OFFICER HAS BEEN, BY AND LARGE, INFLUENCED BY THE FINDINGS RECORDED IN THE ASSESSMENT FOR EARLIER YEARS IN THE APPELLANT'S OWN CASE AND HAS BRUSHED ASIDE THE RELEVANT MATERIAL PLACED BEFORE HIM. THE BOOKS OF ACCOUNT ALONGWITH COMPLETE VOUCHERS HAD BEEN PRODUCED AND THE ASSESSING OFFICER HAS NOT FOUND ANY FAULT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN THE REGULAR COURSE OF BUSINESS. QUESTION ARISES AS TO HOW THE INFORMATION EMANATING FROM THE EARLIER YEARS ASSESSMENTS ARE TO BE USED AND NO DOUBT SUCH INFORMATION CANNOT BE IGNORED BUT SUCH INFORMATION C ANNOT HAVE OVERRIDING EFFECT, SO AS TO CHANGE THE COMPLEXION OF THE THINGS WHICH ARE DULY SUPPORTED WITH THE EVIDENCES PLACED BEFORE THE ASSESSING OFFICER. WE SHALL BE OFFERING COMMENT ON THE NATURE OF OBJECTIONS AND THEIR FATE IN THE APPELLATE PROCEEDINGS OF THE OBSERVATIONS AND FINDINGS MADE IN THE ASSESSMENTS OF THE EARLIER YEARS BUT THE ISSUE IS, CAN THE EVIDENCES FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A PARTICULAR YEAR CAN BE SUMMARILY REJECTED AND INSTEAD THE INFORMATION AND INFEREN CES - OF THE EARLIER YEARS ARE GIVEN PRECEDENCE? THE ASSESSING OFFICER HAS SIMPLY NOT CONSIDERED THAT ALL THE EXPENSES AND PURCHASES ARE DULY SUPPORTED BY THE VOUCHERS PRODUCED AND THE ASSESSING OFFICER IF HAD ANY DOUBT COULD HAVE CONDUCTED ENQUIRY ON THE BA SIS OF THE VOUCHERS PRODUCED. IF AS A RESULT OF SUCH ENQUIRY, IT IS FOUND THAT THE PURCHASE AND EXPENSES ARE NOT GENUINE THEN HE COULD HAVE SUPPORTED HIS CONCLUSION WITH THE HISTORY OF THE ASSESSEE TO BRING HOME THE POINT THAT THE ASSESSEE AS A MATTER OF R OUTINE IS IN THE HABIT OF BOOKING BOGUS PURCHASE AND EXPENSES TO SHOW BOGUS EXPORT SALES. IN THE PRESENT CASE THERE IS NO EVIDENCE GATHERED FROM THE MATERIAL AVAILABLE TO THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT DEBITS IN THE PROF IT AND LOSS ACCOUNT BY WAY OF PURCHASE AND VARIOUS EXPENSES ARE BOGUS CLAIMS AND IN THE ABSENCE OF WHICH MERELY BECAUSE THERE WERE ADVERSE FINDING IN EARLIER YEARS THE ASSESSING OFFICER CANNOT TAKE ADVERSE VIEW OF THE FACTS DULY SUPPORTED WITH THE EVIDENCE S FURNISHED IN THE FORM OF VOUCHERS DURING THE ASSESSMENT PROCEEDINGS. IT NEED BE NOTED THAT EVERY YEAR IS A INDEPENDENT YEAR AND INVOLVES INDEPENDENT PROCEEDINGS AND INDEPENDENT FINDINGS ARE REQUIRED TO BE RECORDED IN EACH PROCEEDINGS ALTHOUGH THE FINDING S IN FAVOUR OF OR AGAINST THE ASSESSEE IN ANY PROCEEDINGS MAY HAVE A REFERENCE TO EARLIER YEARS FINDINGS BUT EARLIER YEARS FINDING CANNOT BE THE SOLE BASIS FOR ARRIVING AT A CONCLUSION ADVERSE TO THE ASSESSEE IGNORING THE MATERIAL AND EVIDENCES FURNISHED R ELEVANT FOR THE PROCEEDINGS UNDER CONSIDERATION. IN THE PRESENT CASE THE ASSESSING OFFICER HAS SIMPLY ALLOWED HIMSELF TO BE SWAYED WITH THE EARLIER YEAR FINDINGS IN HOLDING EXPORT SALES AS BOGUS SALES IGNORING THE FACT THAT THE ASSESSEE HAS CLEARED THE M ATERIAL FROM THE CUSTOM AUTHORITIES BEFORE EXPORT THROUGH EXPORT INSPECTION. THERE ARE EVIDENCES OF ACTUAL EXPORT AS IS SUPPORTED BY THE EXPORT INVOICES CERTIFIED BY THE 5 I.T.A .NO. - 4182/DEL/2011 CUSTOM AUTHORITIES AGAINST WHICH PAYMENTS HAVE BEEN RECEIVED THROUGH BANKING CHANNELS . ALL THESE MATERIALS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT FOUND THE SAME TO BE CREDIBLE IN VIEW OF THE JUDGMENTS GIVEN IN THE ASSESSMENTS OF THE EARLIER YEARS. THIS IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THE SCHEME OF TAXATION PROVIDED IN THE STATUTE WHICH PROVIDES THAT ASSESSMENTS HAVE TO BE MADE ON THE BASIS OF THE MATERIAL AND THE FACTS RELEVANT FOR CONCERNED ASSESSMENT YEAR, IN VIEW OF THIS IT IS PRAYED THAT BOTH THE ABOVE FINDINGS ARE PERVERSE AND ARE CONTRARY TO THE FACTS AND MATERIAL AVAILABLE ON RECORD, THEREFORE, INFERENCES DRAWN ON THE BASIS OF THE ABOVE FINDINGS NEED BE QUASHED AS NULL AND VOID COMING TO THE OBSERVATIONS IN THE EARLIER ASSESSMENT YEARS, IT IS SUBMITTED THAT SO FAR AS THE OBSERVAT IONS MADE BY THE THEN ASSESSING OFFICER IN THE ASSESSMENT FOR ASSESSMENT YEAR 2001 - 02 IS CONCERNED IT MAY PLEASED BE NOTED THAT THERE WERE ADVERSE OBSERVATIONS WITH REGARD TO THE FOLLOWING TRADE CREDITORS WHO WERE THE SUPPLIERS OF THE RAW MATERIAL OR WHO W ERE THE JOB WORKERS FOR THE PURPOSE OF MANUFACTURE OF PRODUCTS FOR EXPORTS. THE NAMES OF THE CONCERNS, IN REGARD TO WHICH ADVERSE FINDING HAS BEEN GIVEN IN THE ABOVE ASSESSMENT YEAR ARE AS UNDER: - 1. NAINA FAB 2. PAUL INTERNATIONAL 3. GOSWMY INDIA 4. ELEGANCE FABRICS 5. ARCHANA ENTERPRISES IN THE OTHER YEARS I.E. ASSESSMENT YEAR 2002 - 03, AGAIN PARTIES AT SERIAL NOS. 1, 2 AND 5 HAVE BEEN MENTIONED AGAINST WHICH THERE IS ADVERSE FINDING BY THE THEN ASSESSING OFFICER. FURTHER IN ASSESSMENT YEAR 2003 - 04, THERE IS NO SPECIFIC ADVERSE FINDING WITH REGARD TO THE SUPPLIERS / JOB WORK PROVIDERS OF THE APPELLANT BUT THE ASSESSING OFFICER HAS DISALLOWED THE PURCHASES / JOB WORK EXPENSES ON THE BASIS OF THE EARLIER YEAR'S OBSERVATION. THE LD. CIT(A) WHILE DISP OSING THE APPEALS OF THE ABOVE YEARS HAS ALLOWED THE CLAIM OF PURCHASES AND JOB WORK CHARGES DEBITED TO PROFIT AND LOSS ACCOUNT. THE HON'BLE ITAT HAS ALSO CONSIDERED THE ABOVE ISSUES IN THE APPEAL FILED BY THE REVENUE, WHEREBY THE MATTER WITH REGARD TO ASS ESSMENT YEARS 2001 - 02 AND 2002 - 03 HAVE BEEN RESTORED TO THE FILE OF LD. CIT(A) IN DECIDE THE MATTER AFRESH. FOR ASSESSMENT YEAR 2003 - 04, HON'BLE ITAT HAS APPROVED THE DECISION OF THE HON'BLE CIT(A) ALLOWING DEDUCTION OF THE PURCHASES AND JOB WORK CHARGES. THE ASSESSMENT FOR ASSESSMENT YEAR 2004 - 05 WAS FRAMED U/S 144 WHICH HAS BEEN ANNULLED BY THE LD. CIT(A) AND HON'BLE ITAT HAS UPHELD THE ORDER OF THE LD. CIT(A) ANNULLING THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER. THE CRUX OF THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS BEFORE CIT(A) AND ITAT IS THAT THERE IS ADVERSE FINDING WITH REGARD TO FIVE PARTIES WHO ARE PURCHASES / JOB WORKERS FOR ASSESSMENT YEAR 2001 - 02 AND SOME OF THEM WERE THERE IN ASSESSMENT YEAR 2002 - 03 ALSO. IN THE OTHER YEARS, THERE IS NO SPECIFIC FINDING SURVIVING AFTER THE APPELLATE PROCEEDINGS 6 I.T.A .NO. - 4182/DEL/2011 AGAINST ANY PARTICULAR SUPPLIER / JOB WORKER. IT IS ALSO RELEVANT TO NOTE THAT DURING THE YEAR UNDER CONSIDERATION THERE WAS NO SUPPLIER / JOB WORKER A GAINST WHOM THERE WAS ADVERSE FINDING IN ASSESSMENT YEARS 2001 - 02 AND 2002 - 03 AND THEREFORE THE ASSESSING OFFICER HAS MISAPPLIED THE ABOVE INFORMATION TO TAKE ADVERSE VIEW FOR THE YEAR UNDER CONSIDERATION IGNORING THE FACT THAT EACH ASSESSMENT IS A SEPARAT E ASSESSMENT AND THE FACTS RELEVANT FOR THE YEAR UNDER CONSIDERATION WERE DISTINCTLY DIFFERENT FROM THE FACTS IN THE EARLIER YEARS. IN VIEW OF THIS THE ACTION OF THE ASSESSING OFFICER IS NOT APPROPRIATE IN VIEW OF THE FACTS OF THE CASE. THE ASSESSING OFF ICER HAS NOT CONDUCTED ANY ENQUIRY IN THE MATTER HE HAS SIMPLY SHIFTED HIS BURDEN TO FURNISH CONFIRMATION OF THE SUPPLIERS / JOB WORK PROVIDERS AND ALSO TO PRODUCE THE SAME. SUCH ACTION OF THE ASSESSING OFFICER AMOUNTS TO SHIFTING HIS LAWFUL BURDEN TO THE OTHER PERSON WHO HAS NO POWER AVAILABLE TO HIM COMMENSURATE WITH HIS DUTY TO HOLD INVESTIGATION WHEREVER HE FEELS THE SAME NECESSARY AND ESSENTIAL FOR DISCHARGE OF HIS FUNCTION AS ASSESSING OFFICER. OTHERWISE WHAT IS THE PURPOSE OF ALLOWING THE POWERS TO T HE ASSESSING OFFICER EQUIVALENT TO A CIVIL COURT U/S 131 OF THE INCOME TAX ACT? THE HON'BLE SUPREME COURT IN CIT VS ORISSA CORPORATION PVT. LTD. (1986) 159 ITR 78 LAID DOWN THAT IT IS THE BOUNDEN DUTY OF THE ASSESSING OFFICER TO EXAMINE EVIDENCE FAIRLY, OBJECTIVELY, INDEPENDENTLY AND WITHOUT BIAS. IT IS A JUDICIAL ACT TO BE PERFORMED JUDICIOUSLY, WITH ALL EARNESTNESS AND TO ARRIVE AT THE TRUTH. THE APEX COURT FURTHER HELD THAT WHEN NAMES AND ADDRESS OF THE CREDITORS WITH INCOME TAX PARTICULARS WERE PROVI DED TO THE ASSESSING OFFICER SHOULD MAKE PROPER ENQUIRY TO FIND OUT THE RELIABILITY OF THE EVIDENCES PRODUCED. IN VIEW OF ABOVE IT IS SUBMITTED THAT THE ADDITION OF RS. 4,59,94,595/ - IS THEREFORE BASED ON THE WRONG APPRECIATION OF FACTS AND AS A RESULT T HEREOF THE ADDITION IN QUESTION NEED BE DELETED. 3.2 . A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THESE SUBMISSIONS WERE FORWARDED BY THE CIT(A) TO THE AO AS IS EVIDENT FROM THE EXTRACT OF THE FOLLOWING FROM THE IMPUGNED ORDER : - 5. THE ABOVE SUBMISSION ALONG WITH THE COPIES OF ACCOUNTS/CONFIRMATION OF SUPPLIERS, JOB WORKERS WERE FORWARDED TO THE AO FOR HIS COMMENTS AND THE AO VIDE REMAND REPORT DATED 10/5/10 HAS OBJECTED TO ADMISSION OF THE ABOVE EVIDENCES ON THE GROUND THAT THESE A RE FRESH EVIDENCES AND THERE WAS NO PLAUSIBLE EXPLANATION OFFERED BY THE APPELLANT FOR NOT FILING THESE EVIDENCES DURING ASSESSMENT PROCEEDINGS. ON THE MERITS OF THE SUBMISSIONS OF THE APPELLANT, THE COMMENTS OF THE AO ARE REPRODUCED AS UNDER: I.) AS POI NTED OUT IN THE ASSESSMENT ORDER, DURING COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO 7 I.T.A .NO. - 4182/DEL/2011 PRODUCE THE PARTIES FROM WHOM PURCHASES WERE MADE. SHE WAS ALSO REQUIRED TO FURNISH CONFIRMATION FROM THEM. HOWEVER, NEITHER THE PARTIES WERE PROD UCED NOR CONFIRMATIONS WERE FURNISHED IN MOST OF THE CASES. FURTHER, THE NATURE OF BUSINESS OF THE ASSESSEE REMAINED THE SAME WHICH WERE IN THE EARLIER YEARS. UNDER THESE CIRCUMSTANCES, THE AD WAS JUSTIFIED TO PASS THE JUDGMENT BASED UPON THE FINDINGS GIVE N IN EARLIER YEARS. II.) THE ASSESSEE HAS NOT PROPERLY EXPLAINED WHY SHE WAS NOT IN A POSITION TO PRODUCE THE PARTIES CONCERNED OR TO FURNISH THE CONFIRMATIONS FROM THEM DURING ASSESSMENT PROCEEDINGS. (III) THAT THE SELF MAINTAINED BOOKS OF ACCOUNT AND VOUCHERS ARE NOT CONCLUSIVE EVIDENCE IN SUPPORT OF LARGE AMOUNT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER VARIOUS HEADS. (IV) AS THE ASSESSEE HAD CLAIMED LARGE EXPENSES UNDER VARIOUS HEADS AS DISCUSSED IN THE ASSESSMENT ORDER, ONUS WAS UPON HER TO FURNI SH ADEQUATE DOCUMENTARY EVIDENCE IN SUPPORT OF OUR CLAIM FOR SUCH EXPENDITURE. HOWEVER, THIS ONUS WAS NOT DISCHARGED. (V) THAT WHEN THE PURCHASES AND EXPENSES WERE FOUND TO BE BOGUS., THE AO WAS JUSTIFIED TO TREAT THE RECEIPTS SHOWN AS EXPORTS RECEIPTS AS INCOME FROM UNDISCLOSED SOURCES. 3.3 . IT IS FURTHER SEEN THAT THE OBJECTIONS POSED BY THE AO SET OUT IN PARA 5 ABOVE WERE CONFRONTED TO THE ASSESSEE ON WHICH ASSESSEE FILED A RE - JOINDER. THE SAME IS EXTRACTED IN PARA 6 AT PAGES 7 11 OF THE ORDER. A PERUSAL OF THE SAME SHOWS THAT IT WA S CONTENDED THAT THE AO PROCEEDED IN PRE - DETERMINED FASHION AND THE SO - CALLED OPPORTUNITIES TO FURNISH THE EVIDENCE VIDE ORDER SHEET ENTRY DATED 26.11.2007 & 05.12.2007 REQUIRING THE ASSESSEE TO PRODUCE THE PARTIES FRO M WHOM PURCHASES HAVE BEEN CLAIMED AND TO FURNISH CONFIRMATION IN RESPONSE T O EACH OF THEM W AS INCORRECT ON FACTS AS ONLY 35 DAYS WERE PROVIDED TO FURNISH THE CONFIRMATION WHICH WERE FILED IN THE PAPER BOOK RUNNING IN 43 - 125 PAGES . THIS FACT IT WAS SUBMIT TED IS EVIDENT FROM THE FACT THAT THE ASSESS MENT WA S COMPLETED ON 31.12.2007. REFERRING TO THE CONFIRMATIONS FILED IN THE PAPER BOOK IT WAS SUBMIT TED THAT IT WOULD SHOW THAT A LARGE NUMBER OF PARTIES WERE INVOLVED WHOSE CONFIRMATIONS COULD NOT HAVE BEEN FILED WITHIN A PERIOD OF 35 DAYS ONLY . THE ARGUMENT WAS ALSO PUT FORTH THAT SINCE COMPLETE ADDRESS OF THE PARTIES ALONGWITH VOUCHERS IN SUPPORT OF THE PURCHASES MADE FROM THESE PARTIES AND THE FABRICATION WO RK DONE BY THEM 8 I.T.A .NO. - 4182/DEL/2011 WE RE ALREADY PLACED BEFORE THE A O THUS THE P RIMARY ONUS OF THE ASSESSEE STOOD DISCHARGED. THIS FACT HAS NOT BEEN DISPUTED BY THE AO EITHER IN THE ASSESSMENT ORDER OR IN THE REMAND REPORT. ACCORDINGLY FILING OF THE CONFIRMATION AT THIS STAGE IT WAS SUBMITTED IS MERELY TO STRENGTHEN THE CLAIM BUT THE FACT REMAINS THAT THE PRIMARY ONUS TO SUPPORT THE EXPENSES CLAIMED IN THE P&L A/C BY SUPPORTING VOUCHERS STOOD DISCHARGED . IT WAS ALSO CANVASSED TH AT EVEN IF THE CONFIRMATION S ARE CONSIDERED TO BE ADDITIONAL EVIDENCE THAN THE FACT REMAINS TH AT THE SUPPORTING VOUCHERS WERE ALL ALONG PRODUCED BEFORE THE AO AND HAVE NOT BEEN ADVERSELY CO MMENTED UPON BY THE AO WHO HAS RECORDED ADVERSE FINDINGS ONLY ON THE FACTS AND CIRCUMSTANCES OF THE PRECEDING ASSESSMENT YEARS. IT WAS PLEADED THAT NO DOUBT PAST HISTORY OFFERS A GENERAL CLUE TO THE GENERAL CONDUCT OF THE ASSESSEE BUT SUCH INPUT CAN BE VALID UNTIL FOR FORMULATION OF THE APPROACH OF THE AO IN CARRYING OUT THE INVESTIGATION/INQUIRY BUT SUCH INPUT CANNOT BE CONSIDERED AS A SUBSTITUTE FOR EVIDENCE WHI CH ONLY IS RELEVANT FOR MAKING THE ASSESSMENT. IN SUPPORT OF THE REMAINING EVIDENCES CONSIDERED AS ADDITIONAL EVIDENCES BY THE AO THE FOLLOWING COMMENTS WERE GIVEN: - S.NO. PARTICULARS REMARKS (III) COPY OF CAPITAL ACCOUNT OF THE ASSESSEE IN THE PROPRIETO R FIRM. (PAGES 154 TO 155). THIS CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCE BECAUSE IT IS PART OF THE BOOKS OF ACCOUNT PRODUCED BEFORE THE A.O. NOT DISPUTED BY THE A.O. (VIII) COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN PROPRIETOR FIRM (PAGES 156 TO 157) - DO - (IX) COPY OF PERSONAL PASS BOOK (PAGES 158 TO 164) THIS WAS NEVER SPECIFICALLY REQUIRED TO BE SUBMITTED BY THE A.O. AND SINCE THE SAME IS REQUIRED TO BE TO DECIDE THE ISSUE OF SOURCE OF CASH, THE SAME CAN BE ADMITTED BY VIRTUE OF POWER U/S 250(4) OF THE ACT WHERE THE FIRST APPELLATE AUTHORITY CAN HOLD FURTHER ENQUIRY AS HE THINKS FIT. (X) DETAILS OF ADDITIONS TO PROPRIETOR S CAPITAL ACCOUNT (PAGES 165) THIS IS NO FRESH EVIDENCE BUT COMPILATION OF THE ADDITION TO THE CAPITAL ACCOUNT AND SOURCE OF INVE STMENT INVOLVED. (XI) COPY OF TDS RETURN (PAGES 166 TO 169) THIS ALSO CANNOT BE CALLED FRESH EVIDENCE AS THIS IS COPY OF THE TDS RETURN WHICH IS FILED BEFORE THE INCOME TAX DEPARTMENT THEREFORE, THE EVIDENCE IN QUESTION WAS AVAILABLE TO THE 9 I.T.A .NO. - 4182/DEL/2011 DEPARTMENT AND THE A.O. IN CASE, A.O. WISHED TO REFER TO THE SAME. (XII) COPY OF BANK STATEMENT (PAGES 170 TO 176) THE COPY O F THE BANK STATEMENT HAD BEEN FURNISHED TO THE A.O. IN REPLY TO QUESTION NO.15 TO THE QUESTIONNAIRE PAGE 2 OF THE PAPER BOOK AND A . O. HAS NOT IN THE ASSESSMENT ORDER DISPUTED THIS FACT WHEN HE HAS OBSERVED IN THE FIRST PARA OF THE ORDER THAT THE ASSESSEE HAS FILED DETAILS CALLED FOR. 3. 4. THE STAND OF THE AO THAT PARTIES WERE NOT PRODUCED AND CONFIRMATIONS WERE NOT FILED DURING THE ASSESSMENT P ROCEEDINGS AS THE ASSESSEE WHO HAS BEEN FOUND TO MAKE BOGUS PURCHASES WAS ASSAILED ON THE REASONING THAT ADEQUATE TIME TO DO SO WAS NOT PROVIDED AND THE EVIDENCE ON RECORD WAS DISCARDED ONLY ON THE BASIS OF THE PAST HISTORY WHICH IS NOT THE CORRECT APPROAC H AS IT DOES NOT JUSTIFY NON - CONSIDERATION OF PRIMARY EVIDENCE IN THE YEAR UNDER CONSIDERATION. 3. 5. A PERUSAL OF THE IMPUGNED ORDER FURTHER SHOWS THAT THE ASSESSEE WAS REQUIRED BY THE CIT(A) TO FURNISH AN AFFIDAVIT CONFIRMING THE FACT THAT THE PARTIES FRO M WHOM PURCHASES WERE MADE AND /OR FABRICATION WORK DONE DURING THE YEAR UNDER CONSIDERATION WERE DIFFERENT FROM THE PARTIES WHICH WERE FOUND TO BE NON - GENUINE IN THE EARLIER ASSESSMENT YEAR. A FINDING OF FACT HAS BEEN RECORDED THAT THESE AFFIDAVITS WERE INCONFIRMATION OF THE ABOVE FACTS WERE PLACED BEFORE THE CIT(A). THE NEED FOR THE ASSESSEE TO DO SO IT WAS RE - ITERATED IS NOT NECESSARY AS THE PRIMARY ONUS TO PROVE THE EXPENDITURE CLAIM STOOD DISCHARGED ONCE THE VOUCHERS AND SUPPORTING EVIDENCES ARE PROD UCED BEFORE THE AO , IN SUPPORT OF THE VARIOUS EXPENSES CLAIMED AS PER THE P&L A/C INCLUDING PURCHASES AND FABRICATION EXPENSES. THESE FACTS ARE FOUND RECORDED IN PARA 7 OF THE IMPUGNED ORDER AND REPRODUCED HEREUNDER FOR READY - REFERENCE: - 7. THE APPELLANT WAS SUBSEQUENTLY REQUIRED BY MY PREDECESSOR CIT (A) TO FURNISH SWORN AFFIDAVIT OF THE APPELLANT CONFIRMING THE FACT THAT THE PARTIES FROM WHOM PURCHASES MADE AND/OR FABRICATION WORK DONE DURING THE YEAR UNDER CONSIDERATION WERE DIFFERENT FROM THE PARTIES WHICH WERE FOUND TO BE NON GENUINE IN THE EARLIER ASSESSMENT YEARS AND THE APPELLANT HAS FURNISHED THE AFFIDAVIT TO CONFIRM THE ABOVE FACT. THE APPELLANT HAS FURTHER SUBMITTED THAT FILING OF CONFIRMATION OF THE PURCHASES AND PRODUCTION OF PARTIES WAS NOT T HE DUTY OF THE APPELLANT DESPITE THE PRIMARY ONUS ON HER TO PROVE THE EXPENDITURE CLAIMED AND IN 10 I.T.A .NO. - 4182/DEL/2011 THIS CONTEXT, THE ONUS OF THE APPELLANT ASSESSEE STANDS DISCHARGED ONCE THE VOUCHER AND SUPPORTING EVIDENCES ARE PRODUCED BEFORE THE AO IN SUPPORT OF THE VARIO US EXPENSES CLAIMED AS PER P&L ACCOUNT INCLUDING PURCHASES AND FABRICATION EXPENSES. THAT NO DISPUTE HAS BEEN RAISED BY THE REVENUE ABOUT THE ACTUAL PRODUCTION OF BOOKS OF ACCOUNTS AND VOUCHERS BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS WHICH IS EVIDEN T FROM THE FACT THAT THE AO HAS NOTED IN THE ORDER THAT IN RESPONSE TO THE NOTICES, SHRI ANIL DHINGRA, HUSBAND AND A/R OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED DETAILS CALLED FOR AND ACCORDINGLY, THE AO HAS NOT RAISED ANY OBJECTION ABOUT THE PROD UCTION OF BOOKS OF ACCOUNTS AND VOUCHERS IN THE OBSERVATIONS MADE IN THE IMPUGNED ASSESSMENT ORDER. THAT ONCE THE BOOKS OF ACCOUNTS ARE PRODUCED ALONG WITH THE VOUCHERS, THE ONUS ON THE ASSESSEE STANDS DISCHARGED AND THEN THE ONUS SHIFTS ON THE REVENUE TO PROVE THAT THE EVIDENCES SUBMITTED ARE NOT RELIABLE. THE RELIANCE HAS BEEN PLACED ON THE DECISION REPORTED IN 126 ITR 63 (KOL) AND 264 ITR 254 (GAU.). FURTHER, THE APPELLANT HAS DRAWN MY ATTENTION TO THE ORDER OF THE HON'BLE ITAT, 'F' BENCH IN ITA NOS. 366 3, 3523, 2664, 3524/DE1/2007, COMBINED ORDER FOR A.Y 2001 - 2002 TO 2004 - 05 IN THE APPELLANT'S OWN CASE AND MY ATTENTION WAS PARTICULARLY DRAWN TO THE FINDING OF THE HON'BLE ITAT WHILE DECIDING THE APPEAL FOR A. Y 2003 - 04 ON PAGE 22 OF THE ABOVE ORDER WHEREI N THE FOLLOWING FINDINGS ARE RELEVANT TO THE ISSUE IN HAND: 22. WE HAVE CONSIDERED RIVAL SUBMISSIONS. AS RIGHTLY CANVASSED BY SHRI KESHAW PRASAD, THE FACTS FOR ASSESSMENT YEAR 2003 - 04 ARE NOT SAME AS APPEARED IN THE ASSESSMENT YEAR 2001 - 02. THE AD HAS NOT ED FROM WHOM PURCHASES WERE MADE. PURCHASES FROM M/S NAINA FAB IS ONLY RS. 700/ - . M/S NAINA FAH HAS ALREADY CONFIRMED HAVING SOLD THE SAMPLE TO THE EXTENT OF RS. 920/ - . THERE ARE NO PURCHASES FROM M/S PAL INTERNATIONAL OR OTHER CONCERNS FROM WHOM PURCHASES WERE MADE DURING ASSESSMENT YEAR 2001 - 02. THEREFORE, THE REASONING AS ADOPTED FOR ASSESSMENT YEAR 2001 - 02 CANNOT BE APPLIED FOR ASSESSMENT YEAR 2003 - 04. SINCE, THERE IS NO DISPUTE REGARDING EXPORT OF GOODS, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED BY TH E ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE IS HAWALA TRANSACTION. AT LEAST, THERE IS NO MATERIAL BROUGHT OUT FOR RAISING SUCH CONTENTION. WE, THEREFORE, ARE IN AGREEMENT WITH THE REASONING ADOPTED BY COMMISSIONER'S (APPEALS) IN DELETING THE ADDITION. THE G ROUNDS NO. J &2 ACCORDINGLY FAILS. ' (EMPHASIS PROVIDED) 4 . CONSIDERING THESE FACTS THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE LD. SR. DR RELYING UPON THE ASSESSMENT ORDER CONTENDED THAT THE AO WAS JUSTIFIED ON FACTS BASED ON THE PAST HISTORY OF THE ASSESSEE AND RELIANCE AS SUCH WAS PLACED UPON THE ASSESSM ENT ORDER . THE AR OF THE ASSESSEE ON THE OTHER HAND RELYING UPON THE IMPUGNED ORDER SUBMITTED THAT MERELY BECAUSE IN THE PAST THE ASSESSEE COULD NOT PROVE CERTAIN PURCHASES/EXPENSES OF FABRICATION WORK ETC. IS NO REASON TO IGNORE THE EVIDENCE IN THE YEAR UNDER 11 I.T.A .NO. - 4182/DEL/2011 CONSIDERATION . REFERRING TO THE MATERIAL AVAILABLE ON RECORD IT WAS SUBMITTED THAT NO INFIRMITY IN REGARD TO THE PRIMARY VOUCHERS OR ANY OTHER SUPPORTING EVIDENCE HAS BEEN POINTED OUT BY THE REVENUE EITHER IN THE ASSESSMENT PROCEEDINGS OR IN THE RE MAND PROCEEDINGS AND ALSO IN THE PRESENT PROCEEDINGS. IT WAS HIS SUBMISSION THAT IT IS A MATTER OF RECORD THAT THE AO REQUIRED THE ASSESSEE TO FILE CONFIRMATIONS FROM ABOUT 82 DIFFEREN T CONCERNS/PEOPLE TO CONFIRM THE FACT THAT THEY HAVE DONE FABRICATION W ORK ETC. FOR THE ASSESSEE AND IN THE REMAND PROCEEDINGS THESE CONFIRMATIONS HAVE BEEN MADE AVAILABLE TO THE AO WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. IT WAS ALSO SUBMITTED THAT IT IS ALSO A MATTER OF RECORD THAT NONE OF THE PARTIES WERE THE ONES WHO HAD BEEN CONSIDERED TO BE BOGUS IN THE EARLIER YEARS AND THE CASE OF THE ASSESSEE INFACT WAS COVERED BY THE JUDGEMENT OF THE ITAT IN 2003 - 04 ASSESSMENT YEAR AS HAS BEEN DISCUSSED AT LENGTH BY THE CIT(A) . THUS IT WAS CONTENDED THAT SINCE THE PARTIES WERE DIFFERENT FROM THE PAR TIES IN 2001 - 02 ASSESSMENT YEAR, T HE AO ON FACTS WAS NOT JUSTIFIED TO IGNORE THE EVIDENCE ON RECORD WHICH REMAINS UNASSAILED ON RECORD. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDE RATION OF THE SAME WE ARE OF THE VIEW THAT NO DOUBT THE PAST HISTORY IS CRUCIAL AND CAN BE A RELEVANT STARTING POINT OF AN INQUIRY BY THE AO HOWEVER THE PAST HISTORY ITSELF DOES NOT WARRANT THAT THE EVIDENCE AND FACTS ON RECORD BE IGNORED. IN A CASE , WHERE THE PAST HISTORY OF THE ASSESSEE SHOWS THAT BOGUS CLAIMS HAVE BEEN RAISED , THE AO WOULD BE FULLY JUSTIFIED IN CONSIDERING THE EVIDENCE ON RECORD WITH GREATER SCRUTINY AND ENQUIRY . H OWEVER THE AO CANNOT OUTRIGHTLY DISCARD O R IGNORE THE EVIDENCE AVAILABLE O N RECORD. TO REQUIRE THE ASSESSEE TO FILE CONFIRMATION FROM 82 PARTIES WITHIN A SHORT SPAN OF 35 DAYS ODD CANNOT BE SAID TO BE A FAIR AND JUDICIOUS EXERCISE OF POWER AND THE INABILITY OF THE ASSESSEE TO DO SO CANNOT BE A GROUND TO JUSTIFY THAT THE CLAIM I N THE YEAR UNDER CONSIDERATION IS ALSO BOGUS. THUS , T O PROCEED THEREAFTER AND DISALLOW THE ENTIRE CLAIM IN TOTO LAYS THE AO OPEN TO THE ALLEGATION OF BEING ARBITRARY AND H A V I N G P R O C E E D E D ON CONJECTURES AND SURMISES. WE HAVE TAKEN OURSELVES THROUGH THE PAPER B OOK FILED AND THE MATERIAL AVAILABLE ON RECORD WHICH HAS BEEN TAKEN INTO CONSIDERATION BY THE CIT(A) A L S O AND ON A CONSIDERATION THEREOF WE ARE O F THE VIEW THAT IN THE 12 I.T.A .NO. - 4182/DEL/2011 ABSENCE OF ANY SPECIFIC INFIRMITY POINTED OUT BY THE REVENUE IN TER FERENCE IN THE FINDING ARRIVED AT IS NOT WARRANTED ON FACTS . IT IS SEEN THAT THE CIT(A) BEFORE ARRIVING A T THE CONCLUSION TOOK INTO CONSIDERATION THE FACT THAT THE PREDECESSOR CIT(A) IN THE COURSE OF THE APPEAL PROCEEDINGS HAD REQUIRED THE ASSESSEE TO STATE ON AN AFFIDAVIT THAT NO NE OF THE PARTIES TO WHOM PAYMENTS WERE CLAIMED TO BE MADE WERE THE SAME PARTIES WHICH WERE A SUBJECT MATTER OF CONSIDERATION IN 2001 - 02 ASSESSMENT YEAR WHEREIN THE ASSESSEE S EXPENSES WERE PARTLY CONSIDERED TO BE BOGUS. IT IS SEEN THAT THE ASSESSEE OBJEC TED TO THE NEED AND NECESSITY ON THE PART OF THE ASSESSEE TO DO SO ON THE GROUND THAT WHEN ALL NECESSARY PRIMARY VOUCHERS IN SUPPORT OF THE EXPENSES CLAIMED IN THE P&L A/C WERE AVAILABLE BEFORE THE AO THE ONUS ACCORDINGLY PLACED ON THE ASSESSEE IT WAS STAT ED STOOD DISCHARGED AND IT WAS SUBMITTED THAT THERE SHOULD BE NO NEED FOR THE ASSESSEE TO CONSEQUENTLY FILE AN AFFIDAVIT BEFORE THE CIT(A) IN THE MANNER DIRECTED. HOWEVER AFFIDAVIT TO THIS EXTENT WAS FILED AND CONSIDERED. THE RELEVANT FINDING HAS ALREADY BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER. 5.1. ACCORDINGLY IN VIEW OF THE ABOVE DETAILED REASONING IN T HE ABSENCE OF ANY INFIRMITY POINTED OUT IN THE IMPUGNED ORDER, WE UPHOLD THE FOLLOWING FINDING: - 8. FINDING ON GROUND NO. 3. I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE COUNSEL OF THE APPELLANT, REPORT OF THE AO AND COUNTER COMMENTS GIVEN BY THE COUNSEL OF THE APPELLANT AND THE ITAT ORDER FOR ASSESSMENT YEARS 2001 - 02 TO 2004 - 05. I FIND THAT THERE IS NO DISPU TE ABOUT THE FACT THAT ALL THE DETAILS REQUIRED BY THE AO EXCEPT FOR NON FILING OF THE CONFIRMATIONS, AND NON - PRODUCTION OF PARTIES BEFORE THE AO, ARE ON RECORD. THERE IS NO ADVERSE FINDING SPECIFICALLY REGARDING THE PARTIES FROM WHOM THE MATERIAL WAS PROC URED AND ALSO REGARDING THE PARTIES TO WHOM PAYMENT FOR EXPENSES WERE MADE OR INCURRED. ONCE THE EVIDENCES IN SUPPORT OF THE CLAIM OF PURCHASES/EXPENSES WERE PRODUCED BEFORE THE AO AND THAT AFTER PRODUCTION OF THE SAME, THE AO IS NOT SATISFIED, HE IS REQUI RED TO GIVE COGENT REASONS TO REJECT THE EVIDENCES PRODUCED. THE BURDEN OF PROCURING THE CONFIRMATIONS OF SUCH PARTIES AND ALSO OF PRODUCING THE SAME FOR EXAMINATION CANNOT BE SHIFTED ON THE ASSESSEE, AS THESE ARE THIRD PARTIES WHO FOR VARIOUS REASONS MAY NOT CHOOSE TO HEED TO THE ASSESSEE'S REQUEST FOR APPEARANCE BEFORE INCOME TAX AUTHORITIES. IN CASE THE AO HAD SPECIFIC DOUBTS REGARDING THE GENUINENESS OF THE EVIDENCES SUBMITTED BY THE APPELLANT HE HAS AMPLE POWERS UNDER THE I.T.ACT TO ENFORCE COMPLIANCE AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF WINSTRAL PETROCHEMICALS P. LTD. 41 DTR 139. I FURTHER RESPECTFULLY AGREE WITH THE FINDINGS OF THE HON'BLE ITAT IN THE ORDER OF APPEAL (SUPRA) IN THE APPELLANT'S OWN CASE WHEREIN IT WAS HELD THAT THE ADVERSE FINDINGS OF EARLIER YEARS WERE APPLICABLE WITH REFERENCE TO THOSE PARTICULAR PARTIES ONLY AND IF THOSE PARTIES DO NOT APPEAR IN THE OTHER YEARS, NO COGNIZANCE OF THE ADVERSE FINDINGS IN EARLIER YEARS CAN 13 I.T.A .NO. - 4182/DEL/2011 BE IMPORTED IN THE ASSESSMENT OF OTHER YEAR S IN ABSENCE OF ADVERSE MATERIAL ON RECORD IN THIS YEAR. IN VIEW OF THIS, I HOLD THAT THE AO HAD NO MATERIAL OR EVIDENCE TO REJECT THE PURCHASES AND OTHER EXPENSES CLAIMED IN THE P&L ACCOUNT WHEN SUCH EXPENSES WERE DULY REFLECTED IN THE AUDITED BOOKS OF AC COUNTS PRODUCED AND THE SAME BEING SUPPORTED WITH THE VOUCHERS PRODUCED BEFORE THE AO. I, THEREFORE, ALLOW THE ABOVE GROUND OF APPEAL IN FAVOUR OF THE APPELLANT AND ACCORDINGLY, THE ADDITION OF RS. 4,59,94,594/ - IS DIRECTED TO BE DELETED. 6 . THE NEXT IS SUE AGITATED BY THE REVENUE IS ADDRESSED IN PARA 3 OF THE ASSESSMENT ORDER. THE SAME IS REPRODUCED HEREUNDER FOR READY - REFERENCE: - 3. DURING THE YEAR, THE ASSESSEE HAS MADE AN ADDITION OF RS. 22,88,000/ - TO HER CAPITAL ACCOUNT. NEITHER THE SOURCE OF ADD ITION IN CAPITAL ACCOUNT HAS BEEN EXPLAINED NOR ANY CONFIRMATION BEEN FURNISHED IN THIS REGARD. HENCE, THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AS UNEXPLAINED INVESTMENT. PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME, AS DISCUSSED ABOVE, ARE ALSO BEING INITIATED SEPARATELY. (ADDITION: RS. 22,88,000/ - ) 7 . THE ASSESSEE AGGRIEVED BY THIS ASSAIL ED THE SAME BEFORE THE CIT(A). IN APPEAL ON BEHALF OF THE ASSESSEE IT WAS SUBMITTED THAT ALL THE RELEVANT DETAILS IN SUPPORT OF THE SOURCE OF INVESTMENT WAS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. A CHART GIVING DETAIL OF SOURCES OF INVESTMENT FILED IN THE PAPER BOOK PAGE 165 EXPLAINING TH E SAME WAS REFERRED TO. THE SAME IS EXTRACTED FORM THE IMPUGNED ORDER AND REPRODUCED HEREUNDER FOR READY - REFERENCE: - DATE AMOUNT MODE SOURCE 18.04.2004 350,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK, THE IMMEDIA TE SOURCE IS WITHDRAWAL OF RS. 3,75,000/ - FROM UTI BANK SAVING ACCOUNT ON 15.05.2004. 10.06.2000 100,000.00 CASH OUT OF CASH AVAILABLE AS PER CASH BOOK, THE IMMEDIATE SOURCE IS WITHDRAWAL ON DIFFERENCE DATES AS PER CASH BOOK FROM UTI BANK SAVIN G ACCOUNT. 20.11.2004 100,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK, THE IMMEDIATE SOURCE IS WITHDRAWAL OF RS. 5,00,000/ - FROM HSBC BANK SAVING ACCOUNT 22.11.2004 200,000.00 CASH ON 20.11.2004. 01.12.2004 200,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK, THE IMMEDIATE SOURCE IS WITHDRAWAL OF RS. 5,00,000/ - FROM HSBC BANK SAVING ACCOUNT ON 20.11.2004. 01.01.2005 200,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK. 02.02.2005 200,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK. 01.03.2005 1,60,000.00 CASH OUT OF THE CASH AVAILABLE AS PER CASH BOOK. 31.03.2005 1,000,000.00 FDR FDR OF SH.ANIL DHINGRA, HUSBAND OF THE 14 I.T.A .NO. - 4182/DEL/2011 ASSE SSEE ALLOWED TO BE USED AS SECURITY, WHICH IS CONFIRMED BY HIM. HE IS ASSESSED TO INCOME TAX AND FDR IN QUESTION HAS BEEN CONSIDERED IN HIS ASSESSMENT. TOTAL ADDITION 2,510,000.00 LESS: WITHDRAWALS 422,000.00 2,088,000.00 8 . THESE WE RE FORWARDED TO THE AO WHO OBJECTED TO THE SAME AS PER HIS REMAND REPORT DATED 10.05.2010. THE ASSESSEE IN RE - JOINDER IS ALSO FOUND TO HAVE O B J E C T E D TO THE OBSERVATIONS MADE IN THE REMAND REPORT STATING THAT PRIMARY EVIDENCE BY WAY OF COPY OF BANK STATEMENTS WERE FURNISHED BEFORE THE AO AND THE DETAILS OF THE CASH WITHDRAWALS CREDITED IN THE PERSONAL CASH ACCOUNTS HAS BEEN PREPARED O N T H E B A S I S O F T H E S A M E . ACCORDINGLY THE PERSONAL CASH BOOK IT WAS CLAIMED WAS ONLY A SUPPORTING STATEMENT MADE ON THE BASIS OF BANK STATEMENTS ALREADY PRODUC ED BEFORE THE AO AND INCASE THE AO HAD ANY DISPUTE, HE COULD HAVE CO - RELATE D THE WITHDRAWALS FROM THE BANK ACCOUNTS. SIMILARLY THE OBJECTIONS OF THE AO THAT HER HUSBAND SH. ANIL DHINGRA HA D PROVIDED HIS FDR OF RS.10 LACS AS A SECURITY FOR HIS WIFE FOR OBT AINING A BANK LOAN IS A MATTER OF RECORD AND EVEN IF THE EVIDENCES WERE CONSIDERED TO BE FRESH EVIDENCE IT GOES TO THE ROOT OF THE MATTER. CONSIDERING TH ESE FACTS, SUBMISSIONS AND ARGUMENTS THE CIT(A) CAME TO THE FOLLOWING CONCLUSION REPRODUCED HEREUNDER FOR READY - REFERENCE: - 10. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ARGUMENTS OF THE APPELLANT, ALONGWITH THE EVIDENCES FURNISHED DURING APPELLATE PROCEEDING AND ALSO THE REMAND REPORT OF THE AO AND THE COUNTER COMMENT OF THE APPELLANT. SO FAR A S THE ADDITIONAL EVIDENCES ARE CONCERNED. I FIND THAT THESE EVIDENCES ARE MATERIAL TO THE ISSUE IN HAND AND THEREFORE, BY VIRTUE U/S 250(4), I AM INCLINED TO ADMIT THESE EVIDENCES WHICH ARE RELEVANT FOR DECIDING THE ISSUE AT HAND. IN THE REMAND REPORT TAKI NG THE ADDITION RS. 12,88,000/ - (OTHER THAN CREDIT OF RS.10 LAKH BY WAY OF FDR), THE AO HAS RAISED FURTHER OBJECTION ABOUT THE OPENING CAPITAL OF THE APPELLANT AND SOURCES OF CREDITS IN THE BANK ACCOUNTS. I HAVE DURING THE PRESENT PROCEEDINGS ASKED THE APP ELLANT TO FURNISH THE STATEMENT OF AFFAIRS OF THE APPELLANT AS ON 31/3/04 WHICH IS THE BASIS FOR ASSESSMENT FOR THE PRECEDING ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2004 - 05. I HAVE ALSO REQUIRED APPELLANT TO PRODUCE THE CASH BOOK FOR THE YEAR UNDER CONSIDERA TION I.E. F.Y. 2004 - 05 TO SUPPORT THE SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNTS. SO FAR AS SOURCES OF OTHER CREDITS IN THE BANK ACCOUNT ARE CONCERNED, THE SAME IS DULY SUPPORTED WITH THE AUDITED ACCOUNTS. THE AO'S OBJECTION IN THE REMAND REPORT REG ARDING SOURCE OF CREDITS IN THE BANK A/C OF UTI BANK FROM WHICH WITHDRAWAL HAS BEEN MADE FOR MAKING INVESTMENT FOR RS. 15 I.T.A .NO. - 4182/DEL/2011 12,88,000/ - HAS BEEN EXAMINED FROM THE CASH BOOK AND THE BANK A/C AT UTI BANK AND THE SAME WAS FOUND TO BE EXPLAINED. IT IS HOWEVER, RELE VANT TO NOTE THAT THE SOURCE OF CREDITS IN BANK A/C OF THE APPELLANT WAS NOT THE SUBJECT MATTER OF ADDITION IN THIS APPEAL, WHICH WAS RELATED TO THE CREDITS IN CAPITAL ACCOUNT. REGARDING ADDITION OF RS. 10 LAKH MADE BY WAY OF FDR PROVIDED BY THE HUSBAND OF THE APPELLANT, THE SAME ISSUE ALSO APPEARS IN THE APPEAL OF THE HUSBAND, SHRI ANIL DHINGRA, APPEAL NO. 393/07 - 08 AND IT IS FOUND THAT THE HUSBAND HAS CONFIRMED HANDING OVER OF FDR OF RS. 10 LAKH TO WIFE AND THE SAME HAS BEEN CREDITED BY HER IN HER CAPITAL ACCOUNT. THE EXPLANATION REGARDING THE SOURCE OF FDR FOR RS. 10 LAKHS HAS BEEN ACCEPTED IN THE APPEAL ORDER DATED 02.05.2011 IN APPEAL NO. 393/07 - 08 IN CASE OF SHRI ANIL DHINGRA. THEREFORE, THE QUESTION OF ANY ADDITIONAL INVESTMENT BY WAY OF THIS FDR DOES NOT ARISE IN APPELLANT'S CASE. IN VIEW OF ABOVE DISCUSSION, THE ADDITIONS OF RS. 12,88,000/ - AND THE RS. 10,00,000/ - STAND DELETED. 9 . AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL THE LD. SR. DR RELIES UPON THE ASSESSMENT ORDER. THE AR REL YING UPON THE IMPUGNED ORDER SUBMITTED THAT ON FACTS NO INFIRMITY HAS BEEN POINTED OUT BY THE REVENUE AND THE OBJECTIONS OF THE AO IN THE REMAND REPORT HAVE ALREADY BEEN ADDRESSED IN THE RE - JOINDER REPRODUCED BY THE CIT(A) AT PAGE 15. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION THEREOF IN THE ABSENCE OF ANY SPECIFIC INFIRMITY POINTED OUT BY THE REVENUE WE FIND NO GOOD REASON TO INTERFERE WITH THE FINDING ARRIVED AT. WHILE COMING TO THE SAID CONCLUSION THE OBJECTIONS POSED IN THE REMAND REPORT BY THE AO HAVE BEEN TAKEN INTO CONSIDERATION AND IT IS SEEN THAT NO ADVERSE FACT HAS BEEN REFERRED TO THEREIN. BEING SATISFIED BY THE REASONING AND CONCLUSION THE DEPARTMENTAL GROUNDS ID DISMISSED. 1 1 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 6 T H OF APRIL 2015. S D / - S D / - (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 6 /0 4 /2015 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI