DCIT, New Delhi V. M/s. Vasudeva Jewellers Pvt. Ltd., New Delhi

ITA 4248/DEL/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1132 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K MI SHRA
• Keywords: Bogus purchase; Gross profit estimation; Unexplained cash credit; Rejection of books of accounts; Unexplained investment; Capital asset converted into stock in trade; Business income; Search and seizure; Document seized; Peak credit; Corroborative evidences; Tax effect; Documents seized
• Section: 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D.AGRAWAL, VICE PRESIDE NT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-4246-4248/DEL/2014 ( ASSESSMENT YEAR: 2006-07, 2007-08, 2008-09) DCIT CENTRAL CIRCLE-11 NEW DELHI VS . M/S. VASUDEVA JEWELLERS PVT. LTD. 2653, VIJAY PLAZA BUILDING, KAROL BAGH, NEW DELHI PAN : AABCV6233G ITA NO. 3669/DEL/2014 ASSESSMENT YEAR : 2007-08 M/S. VASUDEVA JEWELLERS PVT. LTD. 2653, VIJAY PLAZA BUILDING, KAROL BAGH, NEW DELHI PAN : AABCV6233G VS . DCIT CENTRAL CIRCLE-11 NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SH. VED JAIN, ADV, SH. ASHISH G OEL, MS. SURBHI GOEL, CA. REVENUE BY : SHRI J.K.MISHRA, CIT-DR ORDER PER SUDHANSHU SRIVASTAVA, J.M.: ITA 4246/DEL/2104 IS THE APPEAL PREFERRED BY THE RE VENUE AGAINST THE ORDER DATED 09/05/2014 PASSED BY THE LD . CIT (APPEALS) XXXI, NEW DELHI {CIT (A) } AND PERTAINS TO ASSESSME NT YEAR (AY) 2006- 07. ITA 4247/DEL/2014 IS THE REVENUES APPEAL AGAIN ST ORDER DATED DATE OF HEARING 10.01.2019 DATE OF PRONOUNCEMENT 15.03.2019 2 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 09/05/2014 PASSED BY THE LD. CIT (APPEALS) XXXI, NEW DELHI AND PERTAINS TO AY 2007-08 WHEREAS ITA 3669/DEL/2018 IS THE ASSESSEES CROSS APPEAL FOR AY 2007-08. ITA 4248/DEL/2014 IS T HE REVENUES APPEAL AGAINST ORDER DATED 09/05/2014 PASSED BY THE LD. CIT (APPEALS) XXXI, NEW DELHI AND PERTAINS TO AY 2008 -09. SINCE ALL THESE APPEALS INVOLVE IDENTICAL ISSUES, THEY WERE H EARD TOGETHER AND THEY ARE BEING DISPOSED OF THROUGH THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. WE NOW TAKE UP THE APPEALS ONE BY ONE. 2.0 ITA 4246/DEL/2014 (DEPARTMENTS APPEAL) FOR AS SESSMENT YEAR 2006-07: THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS STATED TO BE CARRYING OUT THE BUSINESS OF TRADING I N GOLD BULLION AND FOOD GRAINS. A SEARCH AND SEIZURE OPERATION U/S 132 (1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS CO NDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI RAJESH KA NODIA AND HIS GROUP CONCERNS/COMPANIES /FAMILY MEMBERS ON 28/03/2 011. STATUTORY NOTICE U/S 153C OF THE ACT WAS ISSUED ON 05/09/2012 AND IN RESPONSE THERETO, THE RETURN OF INCOME WAS FILED DECLARING AN INCOME OF RS. 5,61,700/-. THE ASSESSMENT WAS COMPLE TED U/S 153C OF THE ACT ON 28/03/2013 AT AN INCOME OF RS. 2,97,3 2,922/- AFTER MAKING AN ADDITION OF RS. 15,90,026/- BY MAKING AN ESTIMATED ADDITION BY ESTIMATING THE GROSS PROFIT @ 0.2% ON S ALE OF GOLD 3 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) BULLION/BARS. THIS ADDITION WAS MADE ON THE GROUND THAT SINCE THE ENTIRE SALES WERE MADE IN CASH, THE PROFIT SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE. A FURTHER ADDITION OF RS. 2,75,81,1 96/- WAS MADE BY ADDING BACK THE ENTIRE PAYMENT MADE TO VARIOUS FARM ERS FOR PURCHASE OF AGRICULTURAL PRODUCE ON THE GROUND THAT SOME INC RIMINATING DOCUMENTS WERE FOUND REGARDING THESE PAYMENTS AND F URTHER ON THE GROUND THAT THESE AMOUNTS WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 2.1 THE ASSESSEES APPEAL BEFORE THE LD. CIT (A) W AS ALLOWED AND BOTH THE ADDITIONS WERE DELETED. NOW, THE DEPAR TMENT IS BEFORE THE ITAT CHALLENGING THE DELETION BY THE LD. CIT (A ). THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER: 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15,90,026/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF GP RATE OF 0.2% OF TOTAL TURNOVER OF RS.79,50,13,356/- AS AGAINST A GP RATE AT 0.01% WH ICH APPEARS TO BE AT LOWER SIDE, SINCE THE ASSESSEE WAS MAKING TOTAL SALES IN CASH AND NO DETAILS OF PARTIES TO WHOM SALES WERE M ADE FURNISHED AND THE PROFIT SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,75,81,196/- MADE BY ASSESSING OFFICER ON ACCOUNT OF CASH PAID TO FARMER S SINCE, THE ASSESSEE HAS NOT FURNISHED THE COMPLETE DETAILS AND ADDRESS OF 4 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) PARTIES FROM WHOM PURCHASES HAVE BEEN MADE AND TO W HOM SALES HAVE MADE DURING THE YEAR, DOCUMENTARY EVIDEN CES REGARDING SOURCE OF CASH PAID TO FARMERS, DETAILS R EGARDING PAYMENTS RECEIVED FROM THE PARTIES TO WHOM AGRICULT URAL PRODUCE SOLD, MODE OF PAYMENT RECEIVED AND CONFIRMATION FRO M THE PARTIES. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF TH E APPEAL. 2.2 ON GOING THROUGH THE ABOVE GROUNDS OF APPEAL, IT IS NOTED THAT THERE ARE TWO EFFECTIVE ISSUES. THE FIRST ISSU E IS THE DELETION OF ADDITION OF RS.15,90,026/- MADE BY THE ASSESSING OF FICER (AO) BY ENHANCING THE GROSS PROFIT RATE TO 0.2% ON THE REAS ONING THAT THE PROFIT DECLARED BY THE ASSESSEE WAS ON THE LOWER SI DE. THE SECOND ISSUE IS REGARDING THE DELETION OF ADDITION OF RS. 2,75,81,196/- MADE BY THE AO ON ACCOUNT OF THE CASH PAYMENT TO THE FAR MERS. 3.0 THE LD. CIT DR SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ABOVE ADDITIONS MADE BY T HE ASSESSING OFFICER ON THE BASIS OF THE REASONS STATED IN THE ASSESSMEN T ORDER. THE LD. CIT DR FILED A WRITTEN SYNOPSIS, THE RELEVANT PART OF THE SAID SYNOPSIS READS AS UNDER: 2. IN THIS CASE, SURPRISINGLY SALE OF THE ASSESSE RUNNING INTO HUNDREDS OF CRORES IS IN CASH ONLY. ASSESSE IS SEL LING HUGE QUANTITY OF BULLION AND JEWELLERY ONLY IN CASH THAT TOO EXCEEDING RUPEES 1 LAKH. THERE IS NO DISPUTE ABOUT THE PURCH ASE. 5 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) HOWEVER, DETAILS OF SALE PARTY HAS NOT BEEN FURNISH ED. AS REGARDS, SALE IN CASH, THE ASSESSE HAS FURNISHED TH E GENERAL KIND OF EXPLANATION IN PAGES 546-549 OF PB FOR A.Y. 2006 -07.IN THE SIMILAR TRADE, THE DIRECTOR OF THE COMPANY SH. RAJE SH K KANODIA, IN HIS PROPRIETARY CONCERN HAS SHOWN GP RATE OF 0.0 1% (AS MENTIONED IN THE ORDER OF THE ITAT IN HIS CASE FOR A.Y. 2005-06), WHILE IN THE CASE OF THE ASSESSEE IT IS MERELY 0.00 75%. SINCE THE ASSESSEE HAS NOT FURNISHED ANY SPECIFIC REASON FOR SUCH LOW GP, PARTICULARLY IN THE LIGHT OF THE FACT THAT ALL THE SALE, THAT TOO RUNNING IN LAKHS, IN IN CASH, THE A.O. HAD NO OPTIO N BUT TO ESTIMATE A REASONABLE PROFIT RATIO. THE BOOKS OF A CCOUNT ARE MAINTAINED ON THE BASIS OF TRANSACTIONS RECORDED BY THE ASSESSE. SINCE THE ASSESSE IS NOT PROVIDING THE PARTICULARS OF SALE AND CASH SALE VOUCHERS WERE SEIZED, THE A.O HAS RIGHTLY MADE THE ADDITION ON ACCOUNT OF LOW GP. 3. IN RESPECT OF CASH SALE OF GRAINS AND PULSES IN A.Y 2006-07, IT MAY BE NOTED THAT THIS WAS NOT THE BUSINESS OF THE ASSESSE NEITHER IN THE PAST NOR IN A.Y. 2007-08 ONWARDS. T HE ASSESSE HAS SHOWN CASH PURCHASES FROM 10 FARMERS IN 133 TRANSAC TIONS AND CASH SALE TO ABOUT 10 FARMERS, THE ADDRESSES OF SEL LERS AND BUYERS HAVE NOT FURNISHED. SINCE THE SOURCE OF CAS H DEPOSITS WAS NOT SATISFACTORILY EXPLAINED, THE A.O. HAS TREATED THE DEPOSITS AS CASH-CREDITS. IN THIS REGARD, RELIANCE IS PLACED O N THE DECISION OF THE HONBLE ITAT, MUMBAI BENCH IN THE CASE OF CHAMP ALAL S SHAHV ITO [2017] 86 TAXMANN.COM 258 IN WHICH ASSESS E WAS SHOWING SOURCE OF CASH DEPOSITS FROM CASH SALE OF B ULLION AND THE ADDRESS OF THOSE PARTIES WERE NOT PROVIDED. 6 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 4. FURTHER, RELIANCE IS ALSO PLACED ON THE ORDER OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT-II V SANJAY JAIN (201 5) 55 TAXMANN.COM 512. 4.0 IN REPLY, IT WAS SUBMITTED BY THE LD. AR THAT THE ADDITION MADE BY THE ASSESSING OFFICER BY ENHANCING THE GROS S PROFIT RATE IS ARBITRARY AND AD HOC . IT WAS SUBMITTED THAT THE AO HAD MADE THE ADDITION MERELY ON THE BASIS OF DOUBTS AND SUSPICIO N, WITHOUT THERE BEING ANY MATERIAL OR EVIDENCE, TO SUPPORT THE ALLE GATION THAT THE ASSESSEE HAD EARNED PROFITS OVER AND ABOVE WHAT WAS STATED IN THE BOOKS OF ACCOUNTS. IN THIS REGARD THE LD. AR INVIT ED OUR ATTENTION TO THE ASSESSMENT ORDER TO POINT OUT THAT NO DISCREPAN CY WHATSOEVER HAD BEEN POINTED OUT IN THE BOOKS OF ACCOUNT MAINTA INED BY THE ASSESSEE COMPANY. THE LD. AR SUBMITTED THAT THESE BOOKS OF ACCOUNTS WERE DULY AUDITED, THE ASSESSEE HAD MAINTA INED COMPLETE STOCK RECORDS, THE PURCHASES WERE FROM REPUTED SUPP LIERS, INCLUDING BANKS ETC AND THE SALES WERE DULY RECORDED. THE LD . AR SUBMITTED THAT THE ASSESSING OFFICER WAS NOT BEEN ABLE TO POI NT OUT ANY INCONSISTENCY AND ON THE CONTRARY, THE ADDITION HAD BEEN MADE MERELY ON THE BASIS OF DOUBT, AS WAS EVIDENT, FROM THE ASSESSMENT ORDER ITSELF WHERE THE AO HAD STATED THAT THE ADDIT ION WAS BEING MADE TO COVER UP ANY POSSIBLE LEAKAGE. IT WAS CONTENDED BY THE LD. AR THAT WHEN THE BOOKS OF ACCOUNTS WERE DULY MAINTAINED WHI CH WERE DULY 7 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) AUDITED, NO ADDITION ON ACCOUNT OF GP RATE COULD BE SUSTAINED WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED. IT WA S FURTHER SUBMITTED THAT IN THE PRESENT CASE, THE AO HAD SIMPLY MADE TH E ADDITION WITHOUT EVEN REJECTING THE BOOKS OF ACCOUNTS. 4.1 AS REGARDS THE SALES HAVING BEEN MADE IN CASH, IT WAS SUBMITTED BY THE LD. AR THAT THERE WAS NO PROHIBITI ON UNDER ANY LAW, INCLUDING INCOME TAX ACT, IN MAKING THE SALES IN CA SH AND AS SUCH NO ADVERSE INFERENCE COULD BE DRAWN MERELY BECAUSE THE SALES HAVE BEEN MADE IN CASH. IT WAS FURTHER STATED THAT THE LD. CI T (A) HAS DELETED THE ADDITION RELYING ON HIS OWN ORDER IN THE CASE O F THE ASSESSEE FOR AY 2005-06. IT WAS FURTHER SUBMITTED THAT THE REVEN UE HAD FILED AN APPEAL AGAINST THE SAID ORDER BEFORE THE ITAT. HOWE VER, THE SAME WAS DISMISSED DUE TO LOW TAX EFFECT. THE LD. AR FURTHE R SUBMITTED THAT SIMILAR ADDITIONS WERE ALSO MADE IN THE GROUP CASE OF MR. RAJESH KANODIA AND THIS IDENTICAL ISSUE IN THAT CASE WAS D ECIDED BY THE LD. CIT (A) BY RELYING ON THE ORDER IN THE CASE OF M/S VASUDEVA JEWELLERS IN AY 2005-06. IT WAS FURTHER SUBMITTED THAT IN TH E CASE OF MR. RAJESH KANODIA, THE ITAT HAS DECIDED THE APPEAL AND CONFIRMED THE DELETION OF THE ADDITION MADE ON THIS ACCOUNT. ON THIS BASIS, IT WAS SUBMITTED BY THE LD. AR THAT THE FACTS OF THE PRESE NT CASE WERE IDENTICAL TO THE FACTS IN THE CASE OF MR. RAJESH KA NODIA BEING ITA NO. 8 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 4241-43/DEL/2014 WHEREIN, VIDE ORDER DATED. 28.7.20 17, THE ITAT HAS UPHELD THE DECISION OF THE LD. CIT (A). 4.2 ON THE ISSUE OF ADDITION OF RS. 2,75,81,196/- MADE BY THE AO ON ACCOUNT OF CASH PURCHASES OF FOOD GRAINS FROM THE FARMERS, IT WAS SUBMITTED BY THE LD. AR THAT THE ABOVE SAID ADD ITION HAD BEEN MADE BY THE AO WITHOUT APPRECIATING THE FACTS OF TH E CASE. IT WAS SUBMITTED THAT THE IMPUGNED ADDITION HAD BEEN MADE ON THE BASIS OF DOCUMENT A-3 (VOUCHERS) SEIZED FROM THE PREMISES OF THE ASSESSEE. THE LD. AR SUBMITTED THAT THESE VOUCHERS WERE PART OF THE REGULAR BOOKS OF ACCOUNT AND SHOWED PAYMENTS MADE TO VARIOU S FARMERS FOR THE PURCHASE OF FOOD GRAINS. IT WAS SUBMITTED THAT DURING THE YEAR THE ASSESSEE WAS ALSO INVOLVED IN TRADING OF FOOD GRAIN S. THE TOTAL PURCHASES OF THE FOOD GRAINS WERE RS. 2,78,65,926/- AND THE SAME WERE SOLD FOR RS. 3,20,96,683/-. IN THE PROCESS, T HE ASSESSEE HAD EARNED AN INCOME OF RS. 42,30,757/- WHICH HAD BEEN DULY DECLARED IN THE AUDITED ACCOUNTS FILED ALONG WITH THE RETURN OF INCOME MUCH BEFORE THE SEARCH. THE LD. AR REITERATED THAT SINCE THE ENTIRE PURCHASES WERE MADE FROM CULTIVATORS I.E., FARMERS AND WAS ALSO SOLD IN THE UNORGANIZED SECTOR, ALL THE TRANSACTIONS WER E DONE IN CASH. THE LD. AR INVITED OUR ATTENTION TO THE DOCUMENTS P LACED BEFORE THE AO IN SUPPORT OF THE ABOVE TRANSACTIONS WHICH INCLU DED SALES TAX RETURNS (PAPER BOOK PG. 287-389), BANK STATEMENTS ( PAPER BOOK PG. 9 ITA N O. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 392-433), AUDITED FINANCIAL STATEMENTS (PAPER BOOK PG. 6-23), TAX AUDIT REPORT (PAPER BOOK PG. 24-44), SOURCE OF PAYM ENT TO FARMERS MADE BY ASSESSEE- DATE WISE CHART (PAPER BOOK PG. 4 39-450), COPY OF SALE INVOICES (PAPER BOOK PG. 452-567). IT WAS SUBM ITTED THAT ALL THESE DOCUMENTS WERE DATED PRIOR TO THE DATE OF SEA RCH AND INDICATE THAT THE ASSESSEE WAS ENGAGED IN TRADING OF FOOD GR AINS AND FURTHER SAME WAS ALSO DISCLOSED IN THE VAT RETURNS AND IN T HE RETURN OF INCOME FILED IN THE USUAL COURSE. IT WAS CONTENDED THAT THE LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO AND HAS CORRECTLY HELD THAT THE CONTENTION OF THE AO THAT THE ASSESSE E HAD NOT FURNISHED EVIDENCES SHOWING THE LAND HOLDING/S OF T HE FARMERS AND THE PROOF OF CULTIVATION DONE BY THE FARMER/S AS NO T WARRANTED AS IT WAS NOT A CASE WHERE THE ASSESSEE HAD CLAIMED EXEMP TION OF AGRICULTURE INCOME. THE LD. AR RE-EMPHASISED THAT THE AO HAD NOT BROUGHT ANY ADVERSE EVIDENCE TO DISBELIEVE THE SUBM ISSIONS. IT WAS SUBMITTED THAT THERE WAS NO DISPUTE THAT THE ASSESS EE HAD DECLARED THE PURCHASE AND SALE OF AGRICULTURAL PRODUCE. IT W AS ALSO SUBMITTED THAT THE QUANTITATIVE DETAILS OF STOCK WERE DULY RE FLECTED IN THE ANNUAL ACCOUNTS OF THE COMPANY (PAPER BOOK PG. 22), NATURE OF BUSINESS WAS DULY SPECIFIED IN FORM 3CD (PAPER BOOK PG. 25), DET AILS OF STOCK MOVEMENT WERE PROVIDED IN THE TAX AUDIT REPORT (PAP ER BOOK PG. 32). THE LD. AR SUBMITTED THAT THE ASSESSEE HAD MADE WIT HDRAWAL OF CASH 10 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) OF RS. 11,85,000/- FROM BANK ON 08.09.2005, AS WAS EVIDENT FROM PAPER BOOK PG. 451, AND THE SAME WAS PAID TO THE F ARMERS AND THEN THE FARMERS WERE PAID FROM THE SALE PROCEEDS OF THE COMMODITIES. 4.3 IT WAS CONTENDED BY THE LD. AR THAT IN THE ABS ENCE OF ANY ADVERSE DOCUMENT OR MATERIAL HAVING BEEN BROUGHT ON RECORD BY THE AO, THE LD. CIT (A) HAD RIGHTLY HELD THAT THE PAYME NT/S MADE BY THE ASSESSEE CANNOT BE SAID TO BE UNEXPLAINED. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO PERUSED THE ORDERS PASSED BY THE AUTHORITIES BELOW. THE FIRST ISSUE IS REGARDING THE DELETION OF ADDITION MADE BY THE AO B Y ENHANCING THE GROSS PROFIT RATE. ON GOING THROUGH THE ORDER OF T HE LD. CIT (A), WE NOTE THAT THE LD. CIT (A) HAS DELETED THE ADDITION FOLLOWING HIS ORDER FOR THE PROCEEDING ASSESSMENT YEAR 2005-06. THE FI NDINGS RECORDED BY THE LD. CIT (A) IN ASSESSMENT YEAR 2005-06 ARE A S UNDER: 4.8.6 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR AND THE ASSESSMENT ORDER. THE AO HAS MADE THE ADDITION ON THE GROUND THAT THE GP RATE DECLARED BY THE ASSESSE WAS AT LOW ER SIDE AND THAT THE GP RATE IN THE GROUP CASES ARE NOT CONSTAN T AND CANNOT BE VERIFIED FROM THE DETAILS FILED BY THE ASSESSEE. H E PROCEEDS TO MAKE AN ADDITION IN GP RATE OF 0.2% TO COVER UP THE POSSIBLE LEAKAGE OF REVENUE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THUS IT IS NOTED THAT THE ENTIRE AD DITION IS AN ADHOC ADDITION WITHOUT ANY SPECIFIC EMPIRICAL BASIS . HOW THE AO HAS ARRIVED AT GP RATE OF 0.2% IS NOT ASCERTAINABLE FROM THE ORDER. 11 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THE AO STATED IN THE ORDER THAT THE SALES MADE BY T HE ASSESSEE IS AT LESSER PRICE THAN THE MARKET RATE ON VARIOUS OCC ASIONS. HOWEVER, THIS IS A GENERAL STATEMENT WITHOUT ANY SP ECIFIC INSTANCES WHICH COULD BE CONSIDERED FOR ADJUDICATIO N. THE AO ALSO STATED THAT THE DATE AND TIMING OF SALE OF GOL D CANNOT BE SAID WITH CERTAINTY AND THE PRICE OF SALE CONSIDERED BY THE ASSESSEE IN THE CASH VOUCHER CANNOT BE VERIFIED IN THE ABSENCE OF ANY DETAILS OF BUYERS. THIS OBSERVATION AGAIN IS NOT SPECIFIC AND CANNOT BE SUBJECTED TO ADJUDICATION AT THIS STAGE. EVEN OTHE RWISE, IT IS NOT IN DISPUTE THAT THE APPELLANT HAS FURNISHED THE BOO KS OF ACCOUNTS WITH PURCHASE AND SALE DETAILS/LEDGERS AND DAY TO D AY STOCK REGISTER WITH QUANTITATIVE DETAILS. THERE APPEARS TO BE NO MANDATE OR REQUIREMENT THAT THE ASSESSEE SHOULD REC ORD THE NAME AND ADDRESS OF ALL THE PARTIES IN THE SALE BILLS WH EN THE SAME IS MADE ACROSS THE COUNTER IN CASH. THE ASSESSING OFF ICER HAS NOT DISPUTED THE TOTAL TURNOVER OF THE ASSESSEE AS HE H AS ADOPTED THE GP RATE ON THE DECLARED TURNOVER ITSELF. FURTHER, THERE IS ALSO NO DISPUTE ON THE APPELLANTS SUBMISSIONS BEFORE THE A O THAT IT HAS FILED VAT RETURNS BEFORE THE APPROPRIATE AUTHORITIE S, THE COPIES OF WHICH HAVE ALSO BEEN FURNISHED BEFORE THE AO. THER E IS ALSO NO DISPUTE ABOUT THE ASSESSEE FURNISHING DETAILS OF PU RCHASE OF GOLD FROM BANK/MMTC AND FURNISHING OF OTHER DETAILS IN S UPPORT OF OPENING STOCK, SALES CLOSING STOCK AND CASH DEPOSIT S IN BANK ACCOUNTS. THE AO HAS ALSO NOT COUNTERED OR POINTED OUT ANY DEFICIENCIES IN THE MODUS OPERANDI OF THE BUSINESS MODEL AS SUBMITTED BEFORE HIM REPRODUCED AT PAGE 3 OF THE A SSESSMENT ORDER. 4.8.7 THE AO HAS ALSO NOT COUNTERED THE SUMMARY OF THE ARGUMENTS/SUBMISSIONS TAKEN BEFORE THE AO AS REPROD UCED BY 12 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) HIM AT THE LATER PART OF PAGE 3 AND THE BEGINNING P ART OF THE PAGE 4 OF THE ASSESSMENT ORDER. IT IS ALSO OBSERVED THA T THE AO HAS NOT REPRODUCED THE ENTIRE CONTENTS OF THE WRITTEN SUBMI SSIONS OF THE APPELLANT DEALING WITH THE CASH SALES AND ABSENCE O F NAMES AND ADDRESSES OF THE BUYERS IN THE CASH SALES. THE REL EVANT PORTION OF THE ASSESSEES WRITTEN SUBMISSIONS WHICH HAVE BEEN OMITTED TO BE REPRODUCED IN THE ASSESSMENT ORDER WHICH ARE DIR ECTLY DEALING WITH THE SAID ISSUES IS REPRODUCED BELOW FOR READY REFERENCE: EXECUTION OF SALES AND DISCLOSURES IN BOOKS OF AC COUNTS IT INVOLVES FOLLOWING STEPS 1. EXECUTION OF SALES (A) ORDERS FOR PURCHASE OF COMMODITY WITH MMTC AND OTHE R REPUTED ORGANIZATION SUPPLIERS ARE PLACED UPON RECE IPT OF ENQUIRY BY THE CUSTOMERS. SUCH ORDERS ARE DELIVERE D BY THE SUPPLIERS AT PREVAILING RATES OF THE COMMODITY AT T HE TIME OF SUPPLIES. (B) UPON RECEIPT OF THE SUPPLIES AND COSTS THEREOF IT I S ENSURED THAT THE SUPPLIES BE MADE AT A RATE SO THAT AT LEAST MIN IMUM OF THE COST BE RECOVERED. (C) FURTHER AS PER MARKET TEND PREVALENT IN THE TRADE I T IS THE PRACTICE THAT THE SUPPLIES ARE MADE AT A RATE ON WH ICH THE ORDERS FROM CUSTOMERS ARE BOOKED BY THEM AND NOT ON THE DATE OF DELIVERY. THUS CONSIDERING THE VOLATILE NATURE OF MARKET WHERE THE PRICES ARE FREQUENTLY FLUCTUATING THERE I S AN OBVIOUS LIKELY SITUATION WHERE THE SALES ARE RECORDED AT A RATE THAT MAY BE LOWER AND HIGHER THAN THE MARKET RATES. (D) HOWEVER, DUE PRECAUTIONS COMMENSURATE WITH THE KNOW LEDGE, EXPERTISE AND EXPERIENCE OF MANAGEMENT IS TAKEN THA T EVEN IN ADVERSE SITUATIONS NO SALE BE MADE AT A PRICE LOWER THAN COSTS HOWEVER SINCE THE MARKET IS UNCONTROLLABLE PREDICTA BLE EVEN AFTER TAKING DUE PRECAUTIONS THE POSSIBILITY OF LOS S IN SOME CASES CANNOT BE RULED OUT WHERE THE PRICES OF THE C OMMODITY HAVE RISEN AFTER THE BOOKING RECEIVED FROM CUSTOMER S. 13 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) (E) FOR THE SALES SO MADE, BILLS ARE DULY RAISED AND CA SH RECEIVED THEREOF IS PROPERLY ACCOUNTED FOR IN BOOKS OF ACCOU NTS. (F) AS DISCUSSED EARLIER, THE ASSESSEE IS MAINLY ENGAGE D IN THE BUSINESS OF MANUFACTURING, FABRICATE, IMPORT, EXPOR T, TRADING AND OTHERWISE DEALING IN SILVER, GOLD AND DIAMOND J EWELLERY, PRECIOUS AND SEMI PRECIOUS STONES, DUE TO THE NATUR E OF ITEMS AND ITS SIGNIFICANT VALUATION, THE TURNOVER RUNS IN HUNDREDS OF CRORES OF RUPEES. SINCE THE ENTIRE PURCHASES ARE B EING MADE FROM SUPPLIERS ON NATIONAL INTERNATIONAL REPUTE AND BIG ORGANIZATIONS LIKE MMTC ETC. THERE IS A HUGE PRESSU RE OF TIMELY PAYMENT TO THEM BY US OTHERWISE THEY START CHARGING HEAVY INTEREST ON DAILY BASIS ON THE OUTSTANDING AMOUNT. IN SUPPORT FOLLOWING DOCUMENTS HAVE ALREADY BEEN PL ACED ON RECORD FOR YOUR REFERENCE AND RECORDS: (A) STOCK MOVEMENT SHEET CONTAINING DETAILS OF PURCHASE S AND SALE. (B) COPIES OF RELEVANT PURCHASES AND SALES BILLS. (C) MARKET RATES OF COMMODITY OBTAINED FROM INTERNET IN SUPPORT OF COST OF SALES RECORDED IN BOOKS. 1. DISCLOSURES MADE IN ACCOUNTS AND RECORDS (A) HOWEVER, CONSIDERING THE MARKET AND BUSINESS PECULI ARITIES AND CUT THROAT COMPETITION IN THE LINE OF BUSINESS, THE ASSESSEE IS DEALING, IT IS NOT PRACTICABLE FOR THE ASSESSEE TO INSIST THE PURCHASERS, MAKING CASH PURCHASES FROM THE ASSESSEE , TO DISCLOSE THEIR FULLY NAMES AND ADDRESSES, AND THERE FORE, ON CASH BILLS NAMES AND ADDRESS ARE NOT/NOT FULLY RECO RDED. IT MAY BE APPRECIATED THAT EVEN OTHERWISE IN IF THE BU YER HAD STATED WRONG NAMES AND ADDRESSES, THE WE ARE BOUND TO RECORD WHATEVER NAMES AND ADDRESSES HAS BEEN GIVEN, AS THE ASSESSEE HAS NO REASON TO DOUBT THE VERSION OF THE BUYER. IN THIS LINE OF BUSINESS, NORMALLY, THE BUYERS ARE REL UCTANT TO DISCLOSE THEIR IDENTITY AND WHEN THE ASSESSEE HAS S HOWN ENTIRE SALES AMOUNT IN CASH, WHICH IS DULY RECORDED IN BOO KS AND AUDITED AS SUCH EVEN BY TAX AUDITORS. WITHOUT PREJ UDICE IT MAY ALSO BE APPRECIATED THAT IN ANY CASE NON DISCLOSURE OF NAMES AND ADDRESSES OF THE PURCHASERS IS NOT GOING TO ADV ERSELY AFFECT THE INTEREST OF THE ASSESSEE OR REVENUE. 14 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) (B) THE ASSESSEE IS DULY MAINTAINING DAY-TO-DAY QUANTIT ATIVE DETAILS OF PURCHASE AND SALES MADE BY IT. THE QUAN TITATIVE TALLIES OF PURCHASES AND SALES MADE AND RECORD THER EOF IS DULY MAINTAINED WHICH WERE EVEN EXAMINED BY INVESTIGATIN G AUTHORITIES AND IT IS A MATTER OF FACT ON RECORD TH AT NO DEVIATION THEREOF WAS FOUND IN A CONCLUSIVE PROOF OF NOT ONLY THE FACTS STATED ABOVE BUT ALSO THE GENUINENESS INVOLVED THER EOF. (C) THE CASH SALES SO MADE IS DULY RECORDED IN THE BOOK S OF ACCOUNTS AND CASH THEREOF AFTER MEETING NECESSARY E XPENSES, RECORDED IN BOOKS IS DEPOSITED IN BANK ACCOUNTS AS AND WHEN REQUIRED SO AFTER CONSIDERING WORKING CAPITAL REQUI REMENTS AND OTHER CONTINGENCIES. AS A CONSEQUENTIAL EVIDENCE RE FERENCE IS DRAWN TO THE FACT THAT MAJOR AMOUNT RECEIVED THROUG H CASH SALES WAS DEPOSITED IN BANK AND DULY SHOWN IN BOOKS OF ACCOUNTS WHICH IS AN AUTOMATIC ACID TEST AND PROOF OF GENUINENESS OF FACTS INVOLVED. (D) IN THIS CONNECTION REFERENCE IS ALSO RESPECTFULLY D RAWN TO SALES TAX RETURNS ALREADY FILED, BEING YET AGAIN A PROOF OF THE FACT THAT THE ASSESSEE HAS FULLY PAID THE SALES-TAX ON SALES, WHICH WAS LIABLE TO BE DEBITED IN PROFIT AND LOSS ACCOUNT. IN VIEW OF THE FACTS STATED ABOVE IT IS THUS UNDOUB TEDLY THAT ALL THE SALES EXECUTED BY THE COMPANY ARE NOT ONLY DULY REC ORDED IN THE BOOKS OF ACCOUNTS BUT ALSO THE ACCOUNTS REGULARLY M AINTAINED IN THE COURSE OF BUSINESS, DULY AUDITED UNDER THE PROV ISIONS OF THE ACT AND IT IS A MATTER OF FACT BORNE OUT BY THE AUD IT REPORT THAT THEY ARE FREE FROM ANY QUALIFICATION BY THE AUDITOR S. THIS READ IN CONJOINT WITH OUTCOMES OF SEARCH WHEREIN NOTHING IN CONTRADICTION WAS FOUND STERNLY SUGGESTS THAT IT SHOULD BE TAKEN AS CORRECT, UNLESS THERE ARE STRONG AND SUFFICIENT REASONS TO I NDICATE THAT THEY ARE UNRELIABLE. 4.8.8 CONSIDERING THE ABOVE, I AM OF THE VIEW THAT IN THE ABSENCE OF ANY SPECIFIC EMPIRICAL DEFICIENCIES POINTED OUT BY THE AO, THE 15 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ACCOUNTS OF THE ASSESSEE COULD NOT BE DOUBTED ESPEC IALLY IN RESPECT OF THE GP RATE. THE AO IS NOT DISPUTING TH E PURCHASE FIGURES NOR THE SALES FIGURES. HE HAS NOT POINTED OUT ANY INSTANCE OF OUT OF BOOK SALES OR BOGUS PURCHASES. THE KIND OF OBSERVATIONS MADE BY THE AO COULD BE MADE AGAINST ANY ASSESSEE. THERE IS ALWAYS POSSIBILITY THAT A BUSINESSMAN WOULD BE ATTE MPTING TO REDUCE THE TAXABLE PROFITS. HOWEVER, SUCH MERE POS SIBILITY, WITHOUT ANY SPECIFIC EVIDENCE CANNOT BE A GROUND TO MAKE AN ADHOC ADDITION. FURTHER, IT IS NOTED THAT HE AO HA S ADOPTED A CERTAIN GP RATE WITHOUT EVEN SPECIFICALLY EXPLAININ G WHY AND ON WHAT BASIS HE HAS ADOPTED THAT RATE. IN THE PRESEN T CASE THE APPELLANT HAS BEEN FILING THE VAT RETURNS AND THE A R HAS POINTED OUT THAT THE TRADING RESULTS ARE IN PERFECT SYNCHRO NY THE P&L FIGURES FURNISHED IN THE RETURN OF INCOME. UNLESS THE AO IS ABLE TO POINT OUT SPECIFIC INSTANCE OF SALE OF GOLD JEWELLE RY AT LOWER THAN THE MARKET RATE IT WOULD NOT BE POSSIBLE TO UPHOLD THE DECISION OF THE AO. THE WHOLE ASSESSMENT ORDER ONLY CONTAINS V ERY GENERAL OBSERVATIONS OF THE AO, BUT DO NOT GIVE ANY SPECIFI C INSTANCES BASED ON WHICH HE HAS MADE SUCH REMARKS. THEREFORE , I DO NOT FIND ANY MERIT IN THIS KIND OF ADHOC ADDITIONS. IT IS ALSO NOTED THAT THERE IS MERIT IN ARS ARGUMENT THAT THE ADDITION I S OTHERWISE UNSUSTAINABLE AS THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNTS. IN THIS REGARD RELIANCE HAS BEEN PLACED BY THE AR O N THE DECISION OF HONBLE DELHI BENCH OF ITAT IN THE CASE OF ACIT VS SH. VIJAY KUMAR AGGARWAL (ITA NO.: 4183/DEL/2012 DATED 28/06/ 2013) WHEREIN IT HAS BEEN HELD AS UNDER. 4. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SID ES AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A). THE ASSESSING OFFICER HAS MEN TIONED 16 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THAT THE PROFIT ON SALE OF PAINTINGS IS RANGING BET WEEN10% TO 1000%. HOWEVER, ON WHAT BASIS HE MADE SUCH OBSERVA TIONS IS BEST KNOWN TO HIM. THE LEARNED CIT (A) HAS RECO RDED THE FINDING THAT IN ASSESSEES OWN CASE, LAST YEAR, THE GROSS PROFIT DISCLOSED WAS 14.78% WHILE THE GROSS PROFIT IN THE YEAR UNDER CONSIDERATION WAS BETTER. FURTHER, THE QUESTION OF APPLICATION OF GP RATE CAN ARISE ONLY ON THE REJ ECTION OF BOOKS OF ACCOUNT AS PER SECTION 145(3). FOR REJECT ION OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS TO RECO RD THE FINDING THAT HE IS NOT SATISFIED ABOUT THE CORRECTN ESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE OR THE METHOD OF ACCOUNTING PROVIDED UNDER SECTION 145(1) OR ACCO UNTING STANDARDS AS NOTIFIED UNDER SECTION 145(2) HAVE NOT BEEN FOLLOWED BY THE ASSESSEE. IN THIS CASE, THE ASSESS ING OFFICER HAS NOT RECORDED ANY SUCH FINDING WHICH MAY ENTITLE HIM TO REJECT THE BOOKS OF ACCOUNT AND APPLY THE GROSS PRO FIT RATE. IN THE GP RATE DISCLOSED BY THE ASSESSEE IS LOW IN THE OPINION OF THE ASSESSING OFFICER, THAT ENTITLES THE ASSESSI NG OFFICER TO PROBE DEEP INTO THE ACCOUNTS OF THE ASSESSEE BUT, T HAT BY ITSELF, IS NOT SUFFICIENT FOR REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145(3) AND APPLICATION OF HIGHER GP RATE. EVIDENTLY, IN THIS CASE, THE ASSESSING OFFICER HAS NOT REJECTE D THE BOOKS OF ACCOUNT OF THE ASSESSEE AND, THEREFORE, IN OUR O PINION, THE ESTIMATION OF GROSS PROFIT BY APPLYING THE GP RATE OF 50% WAS NOT JUSTIFIED. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT (A) AND DISMISS THE APPEAL FILED BY THE REVENUE . 4.8.9 CONSIDERING ALL THE ABOVE, I HEREBY DELETE T HE ADDITION MADE ON ACCOUNT OF ENHANCING THE GP RATE BY 0.2% MA DE BY THE AO WITH THE REMARK THAT IT WAS BEING MADE TO COVER UP THE POSSIBLE LEAKAGE OF REVENUE BY THE ASSESSEE. 5.1 `THE ABOVE ORDER WAS FOLLOWED BY THE LD. CIT(A ) IN THE CASE OF MR. RAJESH KANODIA, PROPRIETOR OF M/S VASUDEVA J EWELLERS, A SISTER CONCERN, WHICH WAS ALSO PART OF THE SEARCH IN THE A SSESSMENT YEAR 17 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 2005-06, 2006-07 AND 2007-08. THESE ORDERS PASSED BY THE LD. CIT (A) IN THE CASE OF MR. RAJESH KANODIA CAME UP FOR C ONSIDERATION BEFORE THE ITAT IN ITA NOS. 4241-4243/DEL/2014. TH E ITAT, VIDE ORDER DATED 28.07.2017, HAS UPHELD THE ORDERS OF TH E LD. CIT (A) DELETING THE AD HOC ADDITION MADE BY THE AO. THE RELEVANT FINDING OF THE ITAT READS AS UNDER: 16. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO ACCEPTED TH E OPENING STOCK, PURCHASES, CLOSING STOCK AND CASH DEPOSITS IN THE B ANK ACCOUNTS WHICH WERE RECORDED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS MAINTAINED IN THE REGULAR COURSE OF BUSINESS. THE A O DOUBTED THE VALUE OF THE SALE FOR THE REASON THAT THE DATE AND TIMING OF SALE OF GOLD COULD NOT HAVE BEEN SAID WITH CERTAINTY AND TH AT THE PRICE OF SALE CONSIDERED BY THE ASSESSEE IN THE CASH VOUCHER COULD NOT BE VERIFIED IN THE ABSENCE OF ANY DETAILS OF BUYERS, H OWEVER, NO INFLATED SALE WAS POINTED OUT. ON THE CONTRARY, THE SALE WAS DULY DECLARED BY THE ASSESSEE IN HIS VAT RETURNS FILED BEFORE THE AP PROPRIATE AUTHORITIES (COPIES OF WHICH WERE FURNISHED BEFORE THE AO). IN THE PRESENT CASE, IT IS NOTICED THAT HE AO APPLIED GP R ATE OF 0.2% ON ESTIMATE BASIS AND MADE THE AD-HOC ADDITION. HOWEVE R, NO SPECIFIC INSTANCE OF INFLATED PURCHASE OR SUPPRESSED SALE WA S POINTED OUT AND NO SPECIFIC DEFECT WAS POINTED OUT IN THE BOOKS OF ACCOUNTS. THE ASSESSEE FURNISHED THE BOOKS OF ACCOUNTS WITH PURCH ASE/SALE DETAILS, LEDGER AND DAY TO DAY STOCK REGISTER WITH QUANTITATIVE DETAILS, THE SAME HAD BEEN ACCEPTED BY THE AO. THER EFORE, THE AD- HOC ADDITION MADE BY THE AO, BY APPLYING THE GP RAT E OF 0.2% WAS 18 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) NOT JUSTIFIED, PARTICULARLY WHEN NO COMPARABLE CASE WAS BROUGHT ON RECORD WHEREIN SUCH A PROFIT WAS EARNED. WE, THEREF ORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE ARE OF THE VIEW THAT THE LD. CIT (A) RIGHTLY DELETED THE ADDITION MADE B Y THE AO BY FOLLOWING HIS OWN ORDER FOR THE REASSESSMENT YEAR 2 005-06 IN THE CASE OF M/S VASUDEVA JEWELLERS PVT. LTD. (SUPRA), A GAINST WHICH AN APPEAL WAS FILED BY THE DEPARTMENT BEFORE THE ITAT IN ITA NO. 4245/DEL/2014 WHICH HAS BEEN DISMISSED VIDE ORDER D ATED 12.07.2016. IN THAT VIEW OF THE MATTER, WE DO NOT S EE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 5.2 HAVING PERUSED THE ORDERS PASSED BY THE LD. CI T (A) AS WELL THE ONE PASSED BY THE COORDINATE BENCH OF THE ITAT, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO HAS RIGHTLY B EEN DELETED BY THE LD. CIT (A). THE ASSESSE HAS MAINTAINED REGULAR BO OKS OF ACCOUNT WHICH ARE DULY AUDITED. THE ASSESSEE HAS MAINTAINE D COMPLETE STOCK RECORDS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY ERROR OR DISCREPANCY IN THE BOOKS OF ACCOUNT MAINTAINED BY T HE ASSESSEE. THE ASSESSING OFFICER HAS ALSO ACCEPTED THE OPENING STO CK, PURCHASES, SALES AND CLOSING STOCK. THE CASH SALES HAVE BEEN D ULY RECORDED IN THE BOOKS OF ACCOUNTS. IN ABSENCE OF ANY STATUTORY PROVISION PROHIBITING SALES IN CASH, NO ADVERSE INFERENCE CAN BE DRAWN MERELY ON THE BASIS THE SALES HAVE BEEN MADE IN CASH. WE A LSO NOTE THAT THIS IS A CASE OF SEARCH AND NOTHING INCRIMINATING WAS F OUND DURING THE 19 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) SEARCH SO AS TO DOUBT THAT THE SALES RECORDED IN TH E BOOKS OF ACCOUNT WERE UNDERSTATED. THE AO HAS MADE THE IMPUGNED ADD ITION MERELY ON THE BASIS OF A DOUBT AS HAS BEEN RIGHTLY POINTED OUT BY THE LD. AR BY REFERRING TO THE ASSESSMENT ORDER. FURTHER, IN ABSENCE OF REJECTION OF THE BOOKS OF ACCOUNTS, THE AD HOC ADDITION TO THE GP RATE CANNOT BE SUSTAINED. IN VIEW OF THE ABOVE FACTS, WE UPHOLD T HE ORDER OF THE LD. CIT (A) DELETING THE ADDITION OF RS. 15,90,026/-. ACCORDINGLY, GROUND NO. 2 IS DISMISSED. 5.3 THE NEXT ISSUE IN GROUND NO.3 IS THE DELETION OF THE ADDITIONS MADE BY THE AO ON ACCOUNT OF THE PAYMENTS TO THE FARMERS IN RESPECT OF THE PURCHASE OF FOOD GRAINS. ON GOING THROUGH THE ASSESSMENT ORDER, WE NOTE THAT THE ASSESSING OFFICE R HAS MADE THE ADDITION ON THE BASIS THAT THE ASSESSEE HAD NOT FUR NISHED ANY DETAILS OF FARMERS LIKE THEIR ADDRESSES, DETAILS OF PURCHAS ES MADE FROM THEM, ANY DOCUMENTARY EVIDENCES SHOWING THAT PURCHASES HA VE BEEN ACTUALLY MADE, LAND HOLDINGS OF THE FARMERS AND PRO OF OF CULTIVATION DONE BY THE FARMERS. IT HAS ALSO BEEN ALLEGED THAT THE ASSESSEE HAD NOT FURNISHED EVIDENCE REGARDING WITHDRAWAL OF CASH FOR MAKING PAYMENTS TO THE FARMERS. 5.4 THE LD. CIT (A) HAS DELETED THE ADDITION AND T HE FINDINGS OF THE LD. CIT (A) ON DELETION OF THE ADDITION ARE AS UNDER: 20 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 4.3.8 I HAVE CONSIDERED THE SUBMISSION OF THE AR, THE ASSESSMENT ORDER AND THE VARIOUS DOCUMENTS REFERRED TO BY THE AR. IT IS OBSERVED THAT THE AO HAS MADE THE ADDITI ON OF RS.2,75,81,196/- ON THE GROUND THAT THE ASSESSEE HA S NOT FURNISHED EVIDENCES SHOWING THE LAND OWNING OF THE FARMERS AND PROOF OF CULTIVATION DONE BY THE FARMERS. IT HAS B EEN FURTHER STATED BY THE AO THAT THE ASSESSEE HAS NOT FURNISHE D EVIDENCES REGARDING WITHDRAWAL OF CASH FOR MAKING PAYMENT TO THE FARMERS. THERE IS NO MERIT IN THESE OBSERVATIONS OF THE AO. THE DOCUMENTS SUCH AS THE VAT RETURNS, P&L ACCOUNT AND BALANCE SH EET, AUDITORS REPORT ALL SUBMITTED BY THE APPELLANT IN THE USUAL COURSE OF THE BUSINESS MUCH BEFORE THE DATE OF SEARCH BEFO RE THE APPROPRIATE AUTHORITIES INDICATE THAT THE APPELLANT DID ENGAGE ITSELF IN TRADING IN FOOD GRAINS AND ALSO DISCLOSED IT BOTH IN THE VAT RETURNS AND IN THE RETURN OF INCOME FILED IN TH E USUAL COURSE. NOT ONLY THE FIGURES TALLY BUT THE EXPLANATION WITH REGARD TO THE APPELLANTS INVOLVEMENT IN TRADING IN FOOD GRAINS A LSO MATCH WITH THE DOCUMENTS SUBMITTED BEFORE THE AO. 4.3.9 THE CONTENTION OF THE AO THAT THE ASSESSEE H AS NOT FURNISHED EVIDENCES SHOWING THE LAND HOLDING OF THE FARMERS AND THE PROOF OF CULTIVATION DONE BY THE FARMER IS NOT WARRANTED. IT IS NOT A CASE WHERE THE ASSESSEE IS CLAIMING AGRICULTU RAL INCOME AND EXEMPTION THEREOF. IT IS A CASE WHERE THE ASSESSEE IS TRADING IN AGRICULTURAL PRODUCE I.E. CEREALS AND PULSES. IT H AS MADE PURCHASE OF CEREALS AND PULSES AND IT HAS MADE SALE S OF THE SAME. IN THE PURCHASE AND SALE OF THE SAME IT HAS MADE PROFIT WHICH HAS BEEN INCLUDED IN THE TAXABLE INCOME AND A S SUCH THERE IS NO ONUS ON THE ASSESSEE TO FURNISH EVIDENCES SHO WING THE LAND OWNING BY THE FARMERS. THE APPELLANTS ONUS GETS D ISCHARGED BY 21 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THE SUBMISSIONS/EXPLANATION/AND DOCUMENTS AS ABOVE. IF THE AO DID NOT BELIEVE THE APPELLANTS EXPLANATION, THERE WAS A NEED TO BRING ON RECORD FURTHER ADVERSE EVIDENCES IF ANY. HOWEVER, THE AO COULD NOT HAVE COMPELLED THE APPELLANT TO FURNIS H SUCH DETAILS WITHOUT ANY ADVERSE EVIDENCES. THE CASH PAID VOUCH ERS WITH REVENUE STAMP AFFIXED AND DULY SIGNED BY THE RECEIV ER, IN THEMSELVES, ARE NOT ADVERSE EVIDENCES. THERE IS NO DISPUTE THAT THE APPELLANT HAD DECLARED THE PURCHASE AND SALE OF AGRICULTURAL PRODUCE. THE AO HAS NOT BEEN ABLE TO REBUT THE CLA IM OF THE APPELLANT THAT IT ENGAGED IN TRADING OF AGRICULTURA L PRODUCE. 4.3.10 THE EVIDENCES IN THIS REGARD ARE OVERWHELMIN GLY IN FAVOUR OF THE APPELLANT. THE QUANTITATIVE DETAILS OF OPEN ING STOCK, SALES AND PURCHASES AT POINT NO. 14 OF NOTES TO ACCOUNTS IN THE AUDITED BALANCE SHEET CLEARLY SHOW THAT THE APPELLANT PURCH ASED 18,31,983.65 KG OF CEREALS AND PULSES WHOSE VALUE I S ALSO SHOWN AS RS.278.66 LAKHS. THIS BALANCE SHEET IS DATED 31 .08.2006 AND IS PART OF THE RETURN OF INCOME FILED ORIGINALLY ON 28/11/2006 BEFORE THE DEPARTMENT. THUS, THE EXPLANATION CANNO T ALSO BE TERMED AS AN AFTERTHOUGHT. THE COPIES OF FORM DVAT -16 FILED BEFORE THE DELHI SALES TAX AUTHORITIES FOR THE MONT H OF MARCH2006, JANUARY 2006, DECEMBER 2006, NOVEMBER 2006, AUGUS2006, MAY2006 PRESENT IN THE PAPER BOOKS SHO W ON THEIR 1 ST PAGES THAT BULLION AND CEREALS & PULSES WERE THE CO MMODITIES DEALT WITH BY THE APPELLANT DURING THE RELEVANT PRE VIOUS YEAR. 4.3.11 THE CONTENTION OF THE AO THAT THE ASSESSEE H AS NOT FURNISHED EVIDENCES REGARDING WITHDRAWAL OF CASH FO R MAKING PAYMENT TO THE FARMERS IS ALSO NOT BORNE OUT OF REC ORDS. IN THIS REGARD THE ASSESSEE HAS SHOWN TO HAVE SUBMITTED DET AILED REPLY BEFORE THE AO, A COPY OF WHICH WAS ALSO FILED IN TH E PAPER BOOK & 22 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) PLACED AT PAGES 439 TO 450. THE ASSESSEE HAS MADE WITHDRAWAL OF RS.11,85,000/- FROM THE BANK ON 8 TH SEPTEMBER, 2005 AS IS EVIDENT FROM THE COPY OF THE BANK STATEMENT PLACED AT PAPER BOOK PAGE 451. THE AR HAS SUBMITTED THAT THIS CASH WITH DRAWAL HAS BEEN UTILIZED FOR MAKING PAYMENT TO THE FARMERS AND THEREAFTER THE ASSESSEE HAS BEEN RECEIVING MONEY ON SALE AND M AKING FURTHER PURCHASES. IN THE AUDITED BALANCE SHEET AN D PROFIT AND LOSS ACCOUNT, THE ASSESSEE HAS GIVEN DETAILS OF THE PURCHASES AND SALE OF THESE AGRICULTURAL COMMODITIES INCLUDING QU ANTITATIVE DETAILS. THIS AUDITED BALANCE SHEET WAS FILED MUCH BEFORE THE DATE OF THE SEARCH. ONCE THE APPELLANT LEADS EVIDE NCES TO SHOW THAT HE HAD DONE TRADING IN FOOD GRAINS AND POINTS OUT THAT THE CASH VOUCHER REFER TO THE PAYMENTS MADE TO FARMERS, THE AO COULD HAVE DISAGREED WITH SUCH CLAIM ONLY BY BRINGING ANY ADVERSE EVIDENCES. BUT NO EVIDENCES ARE BROUGHT ON RECORD. THUS THE CONCLUSION ARRIVED AT BY THE AO THAT THE PAYMENT OF RS.2,75,81,196/- REMAINED UNEXPLAINED IS NOT BORN O UT OF RECORDS. HENCE, THEADDITION MADE ON THIS COUNT IS HEREBY DEL ETED. THE GROUND IS ALLOWED. 5.5 ON GOING THROUGH THE FACTS AND THE ORDER PASSE D BY THE LD. CIT (A), WE NOTE THAT THE ASSESSEE HAS PURCHASED AG RICULTURE PRODUCE FROM VARIOUS FARMERS. THE PAYMENTS FOUND MENTIONED IN THE SEIZED DOCUMENTS RELATE TO THE SAID PURCHASE OF AGRICULTUR E PRODUCE FROM THE FARMERS. FROM THE AUDITED BALANCE SHEET IT IS EVIDENT THAT THE ASSESSEE, DURING THE YEAR, HAS DONE TRADING IN FOOD GRAINS. SINCE, THESE PURCHASES HAVE BEEN MADE FROM THE FARMERS, TH E PAYMENTS OF 23 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THE SAME HAVE BEEN MADE IN CASH AND ARE REFLECTED I N THE BOOKS OF ACCOUNTS. IT IS NOT THE CASE OF THE ASSESSING OFFI CER THAT THESE PAYMENTS WERE NOT FOUND REFLECTED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE COMPANY. WE HAVE ALSO EXAMINED THE VARIOU S DOCUMENTS TO WHICH OUR ATTENTION WAS INVITED BY THE LD. AR. WE NOTE THAT THE SALES AND PURCHASES OF THE FOOD GRAINS HAVE BEEN DULY REF LECTED IN THE SALES TAX RETURNS FILED FOR THE RELEVANT PERIOD. THE ASS ESSEE COMPANY HAS ALSO FURNISHED A DETAILED CHART MENTIONING THE SOUR CE OF PAYMENTS MADE TO THE FARMERS ALONG WITH COPIES OF SUPPORTING EVIDENCES TO SUBSTANTIATE ITS CLAIM REGARDING SOURCE OF PAYMENTS FOR THESE PURCHASES. THE ASSESSING OFFICER HAS NOT POINTED O UT ANY DISCREPANCY IN THE SAME. AS REGARDS THE OBSERVATION OF THE ASS ESSING OFFICER AND THE CONTENTION OF THE LD. DR RAISED IN THE WRITTEN SUBMISSION THAT THE ASSESSEE HAS NOT FURNISHED EVIDENCE/S REGARDING WIT HDRAWAL OF CASH FOR MAKING PAYMENTS TO THE FARMERS AND THAT THE SOU RCE OF CASH DEPOSIT WAS NOT SATISFACTORILY EXPLAINED, AFTER EXA MINING THE DOCUMENTS ON RECORD, WE ARE OF THE VIEW THAT THIS O BSERVATION IS FACTUALLY INCORRECT. THE ASSESSEE, DURING THE ASSE SSMENT PROCEEDINGS, HAS SUBMITTED DETAILED REPLY IN RESPONSE TO NOTICE DATED 06.02.2013 ISSUED BY THE ASSESSING OFFICER WHEREBY HE HAS EXPL AINED THE SOURCE OF PAYMENTS. ON PERUSAL OF THE DETAILED CHART SUBM ITTED BY THE ASSESSEE IT IS NOTED THAT THE ASSESSEE HAS MADE A W ITHDRAWAL OF RS. 24 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 11,85,000/- ON 08.09.2005 FROM THE BANK AND HAS UTI LIZED THE SAME FOR MAKING PAYMENTS TO THE FARMERS. THEREAFTER, TH E ASSESSEE HAS SOLD THE PRODUCE SO PURCHASED AND THE AMOUNT RECEIV ED AGAINST SUCH SALES HAS BEEN UTILIZED FOR MAKING FURTHER PURCHASE S AND SO ON. WE HAVE ALSO VERIFIED THE FUND FLOW STATEMENT FILED BE FORE THE ASSESSING OFFICER ALONG WITH THE ABOVE-MENTIONED LETTER WHICH GIVES THE COMPLETE DETAILS ON A DAY TO DAY BASIS OF THE PURCHASES MADE AND THE SALES ALONG WITH THE SOURCES. THIS FUND FLOW STATEMENT I S RUNNING FROM 08.09.2005 WHEN THE ASSESSEE MADE THE FIRST PURCHAS E OF RS.1,50,000/- OUT OF THE CASH WITHDRAWAL OF RS.11, 85,000/- FROM ITS BANK ACCOUNT WITH ALLAHABAD BANK TILL 31.03.2006. THE LD. CIT DR, DURING THE COURSE OF THE HEARING, COULD NOT POINT O UT ANYTHING ADVERSE IN THIS STATEMENT AND THE DETAILS OF THE PU RCHASES AND SALES SUBMITTED BY THE ASSESSEE BOTH IN QUANTITY AND VALU E. WE HAVE ALSO PERUSED THE BALANCE SHEET AND THE ANNEXURE THERETO. ON GOING THROUGH THE SAME, WE NOTE THAT ASSESSEE HAS MADE A TOTAL PURCHASE OF THE AGRICULTURE COMMODITIES I.E. PULSES AND CERE ALS OF RS.2.78 CRORE AND HAS MADE SALES OF RS.3.21 CRORE WITH THE RESULT THAT A PROFIT OF RS. 0.43 CRORE HAS BEEN DECLARED ON SUCH SALES AND PURCHASES OF AGRICULTURE COMMODITIES. IT IS NOT THE CASE OF THE ASSESSEE THAT IT IS CLAIMING ANY EXEMPTION ON SUCH INCOME. IN THESE CI RCUMSTANCES, WE ARE OF THE VIEW THERE WAS NO JUSTIFICATION FOR THE AO TO DRAW ANY 25 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ADVERSE INFERENCE MERELY BECAUSE VOUCHERS OF PURCHAS ES IN CASH WERE FOUND DURING THE SEARCH. THESE VOUCHERS ARE PART O F THE REGULAR BOOKS OF ACCOUNT AND IT IS ALSO NOT THE CASE THAT S UCH VOUCHERS WERE UNACCOUNTED FOR. WE HAVE ALSO GONE THROUGH THE VAR IOUS JUDGMENTS RELIED UPON BY THE LD. DR. THE FACTS OF THESE JUDG MENTS ARE DIFFERENT THAN THE PRESENT CASE. IN THESE CASES, THERE WERE DEPOSITS IN THE BANK FOR SALES MADE IN CASH AGAINST PURCHASES IN CR EDIT AND THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE CREDIT PURC HASES. IT WAS ON THESE FACTS THAT THE ADDITIONS WERE MADE UNDER SECT ION 68OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE HAS FIRST WITHDRA WN CASH AND THEN MADE THE PURCHASES FROM THE CASH SO WITHDRAWN AND A FTER MAKING SALES AGAINST PAID PURCHASES RECEIVED THE CASH AGAI NST SUCH SALES. SO, FIRST THERE IS SOURCE OF THE MONEY IN THE CASE OF T HE ASSESSEE AND HENCE, IT CANNOT BE SAID THAT THE CASH RECEIVED AGA INST SALE IS UNEXPLAINED CREDIT. 5.6 WE HAVE ALSO GONE THROUGH THE FINDINGS RECORDE D BY THE LD. CIT (A) AND WE ARE IN AGREEMENT WITH THE FINDINGS O F THE LD. CIT (A). IN VIEW OF THE ABOVE ANALYSIS WE ARE IN AGREEMENT W ITH THE FINDINGS OF THE LD. CIT (A) AND SEE NO REASON TO INTERFERE WITH THE SAME AND ACCORDINGLY, GROUND NO.3 IS DISMISSED. 5.7 GROUND NOS.1 & 4 ARE GENERAL IN NATURE AND NEE D NO ADJUDICATION. 26 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 6.0 IN THE RESULT, THE APPEAL OF THE REVENUE FOR A Y 2006-07 IS DISMISSED. 7.0 ITA 3669/DEL/2014 (ASSESSEES APPEAL) AND ITA 4247/DEL/2014 (DEPARTMENTS APPEAL) FOR AY 2007-08: THE FACTS IN BRIEF RELEVANT TO THIS YEAR ARE THAT IN THIS YEAR ALSO NOTICE U/S 153C OF THE ACT WAS ISSUED ON 05/09 /2012 SUBSEQUENT TO THE SEARCH WHICH HAD TAKEN PLACE ON 2 8/03/2011. THE ASSESSEE FILED ITS RETURN OF INCOME ON 04/12/2012 A ND AN INCOME OF RS. 6,06,960/- WAS DECLARED THEREIN. THE ASSESSMENT WAS COMPLETED U/S 153C OF THE ACT ON 28/03/2013 AT AN INCOME OF R S. 2,39,19,083/-. THE ADDITIONS WERE ON TWO COUNTS. TH E FIRST ADDITION WAS OF RS. 91,09,118/- BEING ADDITION ON ACCOUNT OF GROSS PROFIT ESTIMATION BY ESTIMATING THE SAME @ 0.2% ON THE GRO UND THAT THE ASSESSEE HAD MADE ONLY CASH SALES OF GOLD BULLION A ND, THEREFORE, THE PROFIT WAS NOT VERIFIABLE. THE OTHER ADDITION WAS O F RS. 1,42,03,005/- WHICH PERTAINED TO CASH DEPOSITS OF THE SAME AMOUNT AS APPEARING IN THE LEDGER SEIZED FROM THE RESIDENCE OF SHRI RAJESH KUMAR KANODIA. 7.1 THE ASSESSEES APPEAL BEFORE THE LD. CIT (A) W AS PARTLY ALLOWED WHEREIN THE GROSS PROFIT ADDITION/ENHANCEME NT WAS DELETED BY THE LD. CIT (A) BY FOLLOWING HIS EARLIER YEARS ORDER ON IDENTICAL ISSUE IN AY 2006-07. WITH RESPECT TO THE OTHER ADDI TION OF RS. 27 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 1,42,03,005/-, THE LD. CIT (A) HELD THAT THE ASSESS EE SHOULD BE ALLOWED THE BENEFIT OF TELESCOPING AND, THEREAFTER, HE WORKED OUT THE PEAK CREDIT AT RS. 96,41,736/- AND CONFIRMED THE AD DITION TO THAT EXTENT AND DELETED THE BALANCE. 7.2 THE ASSESSEE AS WELL AS THE REVENUE, BOTH BEIN G AGGRIEVED, ARE NOW BEFORE THE ITAT AND HAVE RAISED THE FOLLOWI NG GROUNDS IN THEIR RESPECTIVE APPEALS: 7.2.1 GROUNDS RAISED IN ASSESSEES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [C IT (A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE PROCEEDINGS INITIATED UNDER S ECTION 153C AGAINST THE APPELLANT ARE IN VIOLATION OF THE STATU TORY CONDITIONS AND THE PROCEDURE PRESCRIBED UNDER THE LAW AND AS S UCH THE SAME IS BAD IN LAW AND LIKELY TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE PROCEEDINGS INITIATED UNDER S ECTION 153C AND ASSESSMENT FRAMED IN CONSEQUENCE THEREOF IS BAD AND LIABLE TO BE QUASHED IN THE ABSENCE OF ANY VALID SATISFACT ION BEING RECORDED BY THE AO OF THE SEARCHED PERSON THAT ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF THE SEARCH. 28 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT FRAMED IS AGAINST THE SPIRIT OF SECTION 153C OF THE ACT WHEREBY THE REASSESSMENT IS TO BE CONFINED TO THE ADDITIONS AND DISALLOWANCES CONSEQU ENT TO THE MATERIAL FOUND DURING THE COURSE OF THE SEARCH AND DOES NOT GIVE POWER TO THE AO TO RE-APPRAISE/REVIEW THE COMPLETED ASSESSMENT. 5. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN SUSTAINING TH E ADDITION TO THE EXTENT OF RS.96,41,736/- MADE BY THE AO ON ACCO UNT OF A DOCUMENT FOUND DURING THE COURSE OF THE SEARCH. (II) THAT THE SAID ADDITION HAS BEEN CONFIRMED THE LEARNED CIT(A) IGNORING THE FACT THAT THIS DOCUMENT WAS NOT FOUND FROM THE PREMISES OF THE ASSESSEE AND NO TRANSACTION STATED IN THE DOCUMENT PERTAINS TO OR HAVE BEEN CORROBORATED TO B E THAT OF THE APPELLANT COMPANY. (III) THAT ADDITION HAS BEEN CONFIRMED BY ARBITRARI LY REJECTING THE DETAILED EXPLANATION AND EVIDENCES BROUGHT ON RECOR D BY THE ASSESSEE. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR AL TER ANY OF THE GROUNDS OF APPEAL. 7.2.2 GROUNDS RAISED IN DEPARTMENTS APPEAL: 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.91,09,118/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF GP RATE OF 0.2% OF TOTAL TURNOVER OF RS.455,45,59,305/- AS AGAINST A GP RATE AT 0.01% WH ICH APPEARS TO BE AT LOWER SIDE, SINCE THE ASSESSEE WAS MAKING TOTAL SALES IN 29 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) CASH AND NO DETAILS OF PARTIES TO WHOM SALES WERE M ADE FURNISHED AND THE PROFIT SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,42,03,005/- MADE BY ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSITS. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF TH E APPEAL. 8.0 IN THE APPEAL FILED BY THE REVENUE, GROUND NOS . 1 & 4 ARE GENERAL IN NATURE AND HENCE NEED NO ADJUDICATION. 8.1 GROUND NO. 2 IN REVENUES APPEAL IS DELETION O F ADDITION MADE BY THE AO BY ENHANCING THE GP RATE TO 0.2% AS AGAINST THE GP RATE DECLARED BY THE ASSESSEE ON THE REASONING THAT THE SAME APPEARS TO BE ON THE LOWER SIDE. THIS ISSUE IS THE SAME AS IN THE APPEAL FOR THE PRECEDING A.Y. 2006-07. BOTH THE PARTIES AGREE D THAT THE FACTS OF THIS ISSUE ARE IDENTICAL TO THE FACTS OF THE ISSUE IN THE A.Y. 2006-07. IN ITA NO. 4246/DEL/2014 FOR AY 2006-07, WE HAVE AL READY UPHELD THE ORDER OF THE LD. CIT (A) AND DISMISSED THE GROU ND RAISED BY THE REVENUE. THE RELEVANT FINDING ON THIS ISSUE ARE CON TAINED IN PARA 5.2 ABOVE OF THIS ORDER. FOLLOWING OUR OWN ORDER FOR TH E A.Y. 2006-07, WE UPHELD THE ORDER OF THE LD. CIT (A) IN DELETING THE ADDITION MADE BY 30 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THE AO BY ENHANCING THE GROSS PROFIT RATE AND, ACCO RDINGLY, GROUND 2 IS DISMISSED. 8.2 GROUND NO. 3 IN REVENUES APPEAL IS REGARDING PARTIAL RELIEF OF RS.45,61,269/- GIVEN BY THE LD. CIT(A) OUT OF TH E TOTAL ADDITION OF RS.1,42,03,005/- MADE BY THE ASSESSING OFFICER. GR OUND NO. 5 IN ASSESSEES APPEAL IS REGARDING ADDITION OF RS. 96,4 1,736/- SUSTAINED BY THE LD. CIT(A) OUT OF THE ADDITION OF RS.1,42,03 ,005/- MADE BY THE ASSESSING OFFICER. THUS, BOTH THESE GROUNDS ARE REL ATED. 8.3 IT WAS SUBMITTED BY THE LD. CIT DR THAT LD. CI T (A) WAS NOT JUSTIFIED IN DELETING THE ABOVE ADDITION. THE LD. CIT DR CONTENDED THAT THIS ADDITION HAS BEEN MADE ON THE BASIS OF TH E SEIZED DOCUMENTS FOUND DURING THE COURSE OF THE SEARCH AT THE PREMISES OF THE ASSESSEE AND, THUS, THE PRESUMPTION UNDER SECTI ON 132(4A) READ WITH SECTION 292C OF THE ACT THAT THIS DOCUMENT BEL ONGED TO THE ASSESSEE AND THAT THE CONTENTS OF THIS DOCUMENT WER E TRUE, WOULD BE APPLICABLE. IT WAS SUBMITTED BY THE LD. CIT DR THA T THE ASSESSING OFFICER HAD ACCORDINGLY MADE THE ADDITION OF THE AG GREGATE OF CREDIT SIDE OF THIS DOCUMENT ASSUMING THAT THE SAME WAS UN DISCLOSED INCOME OF THE ASSESSEE. IT WAS SUBMITTED BY THE LD . CIT DR THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN RESTRICTING THE AD DITION TO RS. 96,41,736/- AS AGAINST THE ADDITION OF RS. 1,42,03 ,005/- MADE BY THE AO, ONCE HE HAS HELD THAT THIS DOCUMENT BELONGE D TO THE 31 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ASSESSEE. THE LD. DR FILED A WRITTEN SYNOPSIS. TH E RELEVANT PART OF THE SYNOPSIS IS AS UNDER: 5. IN THE ABOVE CASE, IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED WITH REGARD TO P RESUMPTION OF ENTRIES FOUND RECORDED IN DOCUMENTS SEIZED DURIN G SEARCH FROM THE PREMISES OF THE DIRECTOR OF THE ASSESSE CO MPANY SH. RAJESH KANODIA IN TERMS OF SECTIONS 132(4A) & 292C OF I.T. ACT: 1. CIT VS SONAL CONSTRUCTION [2012-TIOL-851-HC-DEL-IT] (DELHI) 2. CIT VS NARESH KUMAR AGGARWALA[2011] 9 TAXMANN.COM 2 49 (DELHI)/[2011] 198 TAXMAN 194 (DELHI)/[2011] 331 IT R 510 (DELHI) 3. MAHABIR PRASAD RUNGTA VS CIT [2014] 43 TAXMANN.COM 328 (JHARKHAND)/[2014] 266 CTR 175 (JHARKHAND) 4. BHAGHEERATHA ENGINEERING LTD VS ACIT [2017] 79 TAXM ANN.COM 325 (KERALA)/[2015] 379 ITR 244 (KERALA)/[2016] 282 CTR 209 (KERALA) 5. ASHOK KUMAR VS CIT [2016] 69 TAXMANN.COM 129 (PATNA)/[2016] 239 TAXMAN 436 (PATNA)/[2016] 386 IT R 342 (PATNA)/[2016] 290 CTR 450 (PATNA) 6. BALDEV RAJ VS CIT [2010] 2 TAXMANN.COM 335 (PUNJAB & HARYANA) PARTICULARLY FOR A.Y. 2007-08, IN RESPECT OF THE DO CUMENT SEIZED FROM THE PREMISES OF THE DIRECTOR OF THE ASSESSE CO MPANY AND AS STATED BY SH RAJESH KANODIA ON OATH THAT THE SEIZED DOCUMENT BELONGED TO THE ASSESSE, ONUS WAS ALWAYS ON THE ASS ESSE TO EXPLAIN THE TRUE AND CORRECT DETAILS OF TRANSACTION S RECORDED ON THE DOCUMENTS SEIZED. THE ASSESSE HAS FAILED TO DISCHA RGE ONUS CAST 32 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ON IT. UNDER THE CIRCUMSTANCES, THE A.O. HAS RIGHTL Y ADDED THE CASH DEPOSITS RECEIVED BY IT. IN THIS REGARD, THE RATIO OF THE FOLLOWING DECISIONS MAY ALSO BE KINDLY CONSIDERED:- A. MAHAVIR WOOLEN MILLS VS COMMISSIONER OF INCOME-TAX [2000] 111 TAXMAN 566 (DELHI) B. COMMISSIONER OF INCOME-TAX VS P.R. METRANI 120 TAX MAN 612 (KAR.) C. P.R. METRANI VS COMMISSIONER OF INCOME-TAX, BANGALO RE 157 TAXMAN 325 (SC) AS REGARDS CASH RECEIPTS IN A.Y. 2007-08, THE CIT ( A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF PEAK CREDIT . IN THIS REGARD, RELIANCE IS PLACED ON THE FOLLOWING DECISION OF HON BLE ALLAHABAD HIGH COURT IN THE CASE OF BHAIYALAL SHYAM BEHARI V CIT (276 ITR 38). FURTHER, RELIANCE IS PLACED ON THE DECISION OF HON BLE DELHI HC IN THE CASE OF CIT V D K GARG (2017) 84 TAXMANN.COM 25 7. FURTHER, IN RESPECT OF PROCEEDINGS U/S 153 C, DECIS ION IN THE CASE OF DR. A. V. SREEKUMAR V CIT [2018] 90 TAXMANN.COM 355 (KERALA) MAY KINDLY BE CONSIDERED. IN THE ABOVE MENTIONED CASE, HONBLE KERALA HC HAS CONSIDERED THE DECISION OF DELHI HC IN THE CASE OF KABUL CHAWL A ALSO. IN THE INSTANT CASE ALSO, ON THE BASIS OF EVIDENCE/MATERIA L AVAILABLE WITH THE A.O., THE ASSESSMENT COULD HAVE BEEN REOPE NED U/S 148. THE MERE FACT THAT THE PROVISION UNDER WHICH THE DE PARTMENT PROCEEDED WAS NOT PROPER, WOULD NOT VITIATE THE ENT IRE PROCEEDINGS ESPECIALLY SINCE THERE IS NO PROCEDURAL REQUIREMENT DISTINGUISHING A NOTICE UNDER SECTION 148 OR ONE UN DER SECTION 153A/153 C. 33 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 8.4 IN REPLY, IT WAS SUBMITTED BY THE LD. AR THAT THE ENTIRE ADDITION MADE BY THE AO WAS UNSUSTAINABLE AS THE DO CUMENT ON THE BASIS OF WHICH THIS ADDITION HAD BEEN MADE DID NOT PERTAIN TO THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSID ERATION. THE LD. AR INVITED OUR ATTENTION TO THE SEIZED DOCUMENT PLA CED AT PAPER BOOK PAGES 56-58 TO POINT OUT THAT THIS DOCUMENT PERTAIN ED TO THE PERIOD FROM 1 ST APRIL, 2007 TO 27 TH NOVEMBER, 2007 WHEREAS THE YEAR UNDER CONSIDERATION WAS ASSESSMENT YEAR WAS 2007-08, I.E. PREVIOUS YEAR 2006-07. IT WAS SUBMITTED THAT, THUS, THE ADDITION ON THE BASIS OF THIS DOCUMENT WAS LEGALLY UNSUSTAINABLE IN THE YEAR UNDER CONSIDERATION. 8.4.1 IT WAS FURTHER CONTENDED BY THE LD. AR THAT THE AO HAD NOT POINTED OUT AS TO UNDER WHICH SECTION THIS ADDITION WAS BEING MADE, I.E. WHETHER IT WAS BEING ASSUMED THAT THE SEIZED D OCUMENT REPRESENTED UNEXPLAINED CASH CREDIT SO AS TO APPLY SECTION 68 OR WHETHER IT WAS BEING ASSUMED THAT THE SEIZED DOCUME NT REPRESENTED UNEXPLAINED INVESTMENT SO AS TO APPLY PROVISIONS OF SECTION 69. IT WAS SUBMITTED THAT IN ABSENCE OF ANY FINDING AS TO WHETHER IT WAS CASH CREDIT OR INVESTMENT BY THE ASSESSING OFFICER, THE ADDITION MADE WAS UNSUSTAINABLE. 8.4.2 THE LD. AR FURTHER CONTENDED THAT IN ANY CAS E BOTH UNDER SECTIONS 68 AND 69, ADDITIONS CAN BE MADE ONLY IN T HE YEAR IN WHICH 34 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) THE CREDIT APPEARS OR INVESTMENT IS MADE AND THE SE IZED DOCUMENT ON THE BASIS OF WHICH THIS ADDITION HAS BEEN MADE CLEA RLY SHOWED THAT IT DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. 8.4.3 IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE AO AND LD. CIT (A), BOTH, HAD GONE WRONG IN NOT APPRECIATING T HAT SECTION 132(4A), THOUGH, MAKES A PRESUMPTION THAT THE DOCUM ENT BELONGS TO THE PERSON FROM WHOSE CONTROL OR POSSESSION THE DOC UMENT IS FOUND, BUT AT THE SAME TIME THIS SECTION ALSO STATES THAT THE CONTENTS OF SUCH DOCUMENT ARE TRUE. IF THAT BE SO, IT HAS TO BE ASS UMED THAT WHAT IS STATED IN THE SEIZED DOCUMENT IS TRUE. IT WAS SUBMI TTED THAT FROM THE DOCUMENT, IT WAS APPARENT THAT THIS WAS AN ACCOUNT OF A PERSON NAMED KS. IF THAT BE SO THEN WHILE APPLYING PROV ISIONS OF SECTION 132(4A), IT HAS TO BE PRESUMED THAT THE CREDIT APPE ARING IN THIS ACCOUNT PERTAINS TO THE SAID PERSON KS AND HENCE, NO ADDITION CAN BE MADE ON THE BASIS OF CREDIT IN THIS ACCOUNT. IT WAS FURTHER SUBMITTED THAT THE ORDER PASSED BY THE ASSESSING OF FICER IS SILENT AND HAS NOT STATED AS TO UNDER WHAT ASSUMPTION WAS THE ADDITION BEING MADE ON ACCOUNT OF THIS DOCUMENT. IT WAS SUBMITTED THAT THE AO HAS NOT STATED AS TO WHAT INFERENCE HE WAS DRAWING ON T HE BASIS OF THIS DOCUMENT. IT WAS SUBMITTED THAT SIMPLY BECAUSE SOME FIGURES HAVE BEEN FOUND TO BE STATED ON A PIECE OF PAPER, IT CAN NOT BE ASSUMED THAT SUCH FIGURES REPRESENTED INCOME AND THAT TOO E ARNED BY THE 35 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSING OFFI CER BEING AN ADJUDICATING OFFICER HAS TO DETERMINE THE CORRECT I NCOME BASED ON THE FACTS BEFORE HIM. THE LD. AR SUBMITTED THAT THE AO , FIRST, HAS TO APPLY HIS MIND TO THE PAPER AND THE FIGURES STATED THEREIN AND EVEN IN THE ABSENCE OF ANY EXPLANATION, AFTER ANALYSIS BY H IM, HAS TO RECORD A FINDING WITH THE REASONING AS TO HOW THE FIGURE STA TED IN THE SEIZED DOCUMENT IS BEING CONSIDERED AS INCOME AND, THEREAF TER, ALSO RECORD A FINDING THAT SUCH INCOME BEING CONSIDERED BY HIM ON THE BASIS OF THE DOCUMENT BEFORE HIM IS THAT OF THE ASSESSEE. THE L D. AR EMPHASIZED THAT IN THE PRESENT CASE, NO SUCH EXERCISE HAD BEEN CARRIED OUT BY THE AO AS WAS EVIDENT FROM THE ASSESSMENT ORDER AND FUR THER THAT THE CREDIT SIDE HAD BEEN ASSUMED AS INCOME WITHOUT ESTA BLISHING ANY CO- RELATION. 8.4.4 IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE LD. CIT (A), THOUGH, HAS RESTRICTED THE ADDITION TO THE PEAK CRE DIT BUT HE HAS ALSO GONE WRONG IN CONFIRMING THE ADDITION ON THE BASIS OF PEAK CREDIT WITHOUT GIVING ANY FINDING AS TO HOW THE FIGURE STA TED IN THE SEIZED DOCUMENT WAS BEING ASSUMED AS INCOME OF THE ASSESSE E. 8.4.5 THE LD. AR SUBMITTED THAT WITHOUT PREJUDICE TO HIS CONTENTION THAT THE ENTIRE ADDITION WAS UNSUSTAINAB LE, THE ADDITION, IF ANY, CANNOT EXCEED THE PEAK CREDIT. IT WAS SUBMITT ED THAT A SEIZED DOCUMENT HAS TO BE CONSIDERED IN ITS ENTIRETY AND D EBIT SIDE CANNOT 36 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) BE IGNORED WHILE CONSIDERING THE CREDIT SIDE AND AS SUCH THE LD. CIT (A) WAS JUSTIFIED TO CONSIDER BOTH DEBIT AND CREDIT SIDES. 9.0 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND H AVE ALSO PERUSED THE ORDERS PASSED BY THE AO AND THE LD. CIT (A). THE AO HAS MADE THE ADDITION OF RS. 1,42,03,005/- ON THE B ASIS OF THE SEIZED DOCUMENT. THE LD. CIT (A) HAS RESTRICTED THIS ADDI TION TO RS. 96,41,736/- ON THE BASIS OF PEAK CREDIT. ON GOING THROUGH THE SEIZED DOCUMENT PLACED AT PAPER BOOK PAGE 56-58, WE NOTE T HAT THE SEIZED DOCUMENT PERTAINS TO THE PERIOD 1 ST APRIL, 2007 TO 27 TH NOVEMBER, 2007. THE TRANSACTIONS RECORDED THEREIN ON THESE P AGES PERTAIN TO THIS PERIOD. THIS PERIOD WILL FALL IN ASSESSMENT Y EAR 2008-09 AND NOT IN ASSESSMENT YEAR 2007-08 IN WHICH YEAR THE AO HAS MADE THE ADDITION. THE LD. CIT DR DURING THE COURSE OF THE HEARING HAS FAIRLY ADMITTED THAT THIS DOCUMENT DOES NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. TAKING INTO CONSIDERATION THIS FACT, THE ADDITION MADE BY THE AO IS UNSUSTAINABLE AND, ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ENTIRE ADDITION OF RS.1,42,03,005/-. AC CORDINGLY, GROUND NO. 3 OF REVENUES APPEAL IS DISMISSED AND GROUND N O.5 OF ASSESSEES APPEAL IS ALLOWED. 9.1 IN VIEW OF OUR FINDING ON GROUND NO.5 OF THE A SSESSEES APPEAL, THE OTHER GROUNDS NOS. 1 TO 4 & 6 BECOME AC ADEMIC IN NATURE AND HENCE ARE NOT BEING ADJUDICATED UPON. 37 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) 10. IN THE RESULT, FOR AY 2007-08, THE APPEAL OF T HE REVENUE IS DISMISSED AND THAT OF THE ASSESSEE IS ALLOWED. 11. ITA 4248/DEL/2014 (DEPARTMENTS APPEAL) FOR AY 2008-09: THE FACTS IN BRIEF WHICH ARE RELEVANT TO THIS YEA R ARE THAT IN THIS YEAR ALSO NOTICE U/S 153C OF THE ACT WAS ISSUE D ON 05/09/2012 SUBSEQUENT TO THE SEARCH WHICH HAD TAKEN PLACE ON 2 8/03/2011. THE ASSESSEE FILED ITS RETURN OF INCOME ON 04/12/2012 A ND AN INCOME OF RS. 3,04,530/- WAS DECLARED THEREIN. THE ASSESSMENT WAS COMPLETED U/S 153C OF THE ACT ON 28/03/2013 AT AN INCOME OF R S. 79,02,679/-. THE ADDITION WAS OF RS. 75,98,149/- BEING ADDITION ON GROSS PROFIT ESTIMATION TO 0.2% ON THE GROUND THAT THE ASSESSEE HAD MADE ONLY CASH SALES OF GOLD BULLION AND, THEREFORE, THE PROF IT WAS NOT VERIFIABLE. THE ASSESSEES APPEAL BEFORE THE LD. CIT (A) WAS AL LOWED ON THE ISSUE WHEREIN THE GROSS PROFIT ADDITION/ENHANCEMENT WAS D ELETED BY THE LD. CIT (A) BY FOLLOWING HIS EARLIER YEARS ORDER ON ID ENTICAL ISSUE IN AY 2005-06. NOW, THE DEPARTMENT HAS APPROACHED THE ITA T AGAINST THIS DELETION AND HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 75,98,149/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF GP RATE OF 0.2% OF TOTAL TURNOVER OF 38 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) RS.379,90,74,730/- AS AGAINST A GP RATE AT 0.01% WH ICH APPEARS TO BE AT LOWER SIDE, SINCE THE ASSESSEE WAS MAKING TOTAL SALES IN CASH AND NO DETAILS OF PARTIES TO WHOM SALES WERE M ADE FURNISHED AND THE PROFIT SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF TH E APPEAL. 12.0 IN THE APPEAL, GROUND NOS. 1 & 3 ARE GENERAL IN NATURE AND HENCE NEED NO ADJUDICATION. 12.1 GROUND NO. 2 IN REVENUES APPEAL IS AGAINST T HE DELETION OF ADDITION OF RS. 75,98,149/- MADE BY THE AO BY ENHA NCING THE GP RATE TO 0.2% AS AGAINST THE GP RATE DECLARED BY THE ASSESSEE ON THE REASONING THAT THE SAME APPEARS TO BE ON THE LOWER SIDE. THIS ISSUE IS THE SAME AS IN THE DEPARTMENTS APPEALS FOR THE PRECEDING A.Y. 2006-07 AND 2007-08. BOTH THE PARTIES DURING THE C OURSE OF THE HEARING AGREED THAT THE FACTS OF THIS CASE ARE IDEN TICAL TO THE FACTS OF THE ISSUE IN THE A.Y. 2006-07 AND 2007-08. IN ITA N O. 4246/DEL/2014 AND 4247/DEL/2014 FOR AY 2006-07 AND 2007-08 RESPECTIVELY, WE HAVE UPHELD THE ORDER OF THE LD. C IT (A) DELETING THE ADDITION MADE BY AO BY ENHANCING THE GROSS PROFIT R ATE AND HAVE DISMISSED THE GROUND RAISED BY THE REVENUE. (REFER TO PARA 5.2 AND 8.1 OF THIS ORDER). ACCORDINGLY, FOLLOWING OUR OWN ORDERS FOR THE A.Y. 2006-07 AND 2007-08, WE UPHELD THE ORDER OF THE LD. CIT (A) FOR THIS 39 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) ASSESSMENT YEAR DELETING THE ADDITION OF RS. 75,98, 149/- MADE BY THE AO BY ENHANCING THE GROSS PROFIT RATE AND, ACCORDIN GLY, GROUND 2 IS DISMISSED. 13. IN THE RESULT THE APPEAL OF REVENUE FOR AY 200 8-09 IS DISMISSED. 14. IN THE FINAL RESULT, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED AND THE SOLE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.2019. SD/- SD/- (G.D.AGRAWAL) (SUDHANSHU SRIVA STAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 15.03.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 40 ITA NO. 4246-4248, 3669/DEL/2014 (VASUDEVA JEWELLERS PVT. LTD.) DATE OF DICTATION DICTATED ON DRAGON DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER