DCIT, BHILWARA V. Shri Jai Kumar Jagetia, BHILWARA

ITA 486/JODH/2010

• Counselvise Citation: 48623314 RSA 2010
• Duration Of Justice: 3 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2014
• Assessment Year: 1994-1995
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Unexplained cash credit; Rejection of books of accounts; Unexplained investment; Income from undisclosed sources; Loose papers; Document seized; Principle of natural justice; Question of law; Onus to prove; Documents seized
• Section: 145; 148; 154; 68

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 486 /JODH/201 0 (A.Y. 1994 - 95 ) DCIT , CIRCLE, BHILWARA. VS. SHRI JAI KUMAR JAGETIA, NEW AZAD CHOWK, BHILWARA. (APPELLANT) PAN NO. AANPJ 9198 H (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 15 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 28 /0 8 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 16 /0 6 /201 0 OF L D . CIT(A), AJMER . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: THE LD. CIT(A) , AJMER IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE HAS ERRED IN: - 1. DELETING THE TRADING ADDITION OF RS. 35,612/ - ON ESTIMATED SALES OF RS. 4,75,000/ - 2. RESTRICTING THE ADDITION OF RS. 1,32,407/ - AGAINST RS. 10,15,11 6/ - MADE ON ACCOUNT OF UNRECORDED PURCHASES/SUPPRESSION IN SALES. 2 3. DELETING THE ADDITION OF RS. 6 ,04,070/ - MADE ON ACCOUNT OF UNACCOUNTED RECEIPTS BASED ON TRANSACTIONS RECORDED AS PER PAGE 2 & 3 OF SEIZED MATERIALS. 4. RESTRICTING THE ADDITION TO RS. 70,297/ - AGAINST RS. 5,38,940/ - MADE ON ACCOUNT OF UNACCOUNTED PURCHASES. 5. RESTRIC T ING THE ADDITION TO RS. 89,791/ - AGAINST RS. 1,25,656/ - MADE U/S. 68 OF THE I.T. ACT, 1961. 6. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 FIRST ISSUE IN THIS APPEAL RELATES TO THE DELETION OF TRADING ADDITION OF RS. 35,612/ - . 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE DERIVED INCOME FROM HIS PROPRIETORSHIP CONCERN M/S. ROOP MILAN SAREE CENTRE, BHILWARA AND DECLARED GRO SS PROFIT RATE OF 8% ON THE TOTAL SALE OF RS. 4,45,455/ - . THE ASSESSEE INTIMATED THAT THIS WAS THE FIRST YEAR OF BUSINESS WHICH WAS CARRIED OUT FROM JANUARY TO MARCH 1994 ONLY. THE ASSESSING OFFICER, HOWEVER, REJECTED THE BOOKS OF ACCOUNTS ON THE FOLLOWI NG GROUNDS: - A . THE SALES ARE NOT VERIFIABLE. B. NO STOCK REGISTER HAS BEEN MAINTAINED. C. SEARCH WAS CONDUCTED AT THE PREMISES OF THE APPELLANT DURING THE YEAR AND CERTAIN LOOSE PAPERS WERE FOUND INDICATING UNRECORDED PURCHASES AND SALES MADE BY APPELLANT. 3 4. THE ASSESSING OFFICER ESTIMATED THE SALE AT RS. 4,75,000/ - AND APPLIED GROSS PROFIT RATE OF 15% . ACCORDINGLY, TRADING ADDITION OF RS. 35,612/ - WAS MADE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) , WHO DELETED THE ADDITION BY OBSERVING THAT THE ASSESSING OFFICER MADE SEPARATE ADDITION ON ACCOUNT OF UNRECORDED PURCHASES AND GROSS PROFIT THEREON. THEREFORE, THERE WAS NO JUSTIFICATION FOR FURTHER ESTIMATION OF SALE AT RS. 4,75,000/ - AS AGAINST RS. 4 ,45,455/ - DECLARED BY THE ASSESSEE AND THERE WAS NO BASIS FOR APPLICATION OF GROSS PROFIT RATE OF 15% AS AGAINST 8% DECLARED BY THE ASSESSEE. NOW THE DEPARTMENT IS IN APPEAL. 6 . LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER. 7 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 8 . WE HAVE CONSIDERED T HE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE , LD. CIT(A) CATEGORICALLY STATED THAT WHATEVER DISCREPANCY WAS FOUND IN THE LOOSE PAPERS AND DOCUMENTS HAD BEEN SEPARATELY CONSIDERED 4 BY TH E ASSESSING OFFICER AND THE SEPARATE ADDITION WAS MADE ON ACCOUNT OF UNRECORDED PURCHASES AND GROSS PROFIT THEREON. THEREFORE, THERE WAS NO JUSTIFICATION IN MAKING THIS ADDITION. WE DO NOT SEE ANY INFIRMITY IN THE OBSERVATION OF THE LD. CIT(A) AND ACCORDINGLY DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 9 . THE OTHER ISSUE S VIDE GROUND NOS. 2 TO 4 ARE CORRELATED AND RELATE TO THE DELETION OF ADDITION OUT OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNRECORDED PURCHA SES/SUPPRESSION IN SALES , SO THESE ARE DEAL T WITH SIMULTANEOUSLY . 10 . FACTS RELATING TO THESE ISSUES, IN BRIEF, ARE THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS. 10,15,116/ - BY MAKING THE FOLLOWING OBSERVATIONS: - UNRECORDED PURCHASES AS PER PAGE NO.7 FROM 10/01/1994 TO 31/03/1994 WORKS OUT TO RS. 8,50,350/ - + 19 + 1610 + 39,647 I.E. RS. 8,91,626/ - WHICH IS WRITTEN IN THE SAID NOTEBOOK AS RS. 8916 ) 26. ON SCRUTINY OF REGULAR BOOKS OF ACCOUNTS OF M/S. ROOP MILAN SAREE CENTRE, A PROPRIETORSHIP CONCERN OF SHRI JAI KUMAR JAGETIA REFLECTS OF THESE TRANSACTION S MENTIONED AS 891626 ON DIFFERENT DATES, BUT THE ASSESSEE DID NOT HAVE ANY PURCHASE BILLS IN SUPPORT OF THESE TRANSACTIONS. HOWEVER, THE OTHER TRANSACTIONS WHICH WERE RECORDED IN SAME REGULAR LEDGER AND CASH BOOK SUPPORTED BY PURCHASES BILLS WHICH CLEARLY SHOWS THAT THESE TRANSACTIONS ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF M/S. ROOP MILAN SAREE CENTRE, BHILWARA AFTER SEARCH, ON WHICH NO RELIANCE CAN BE PL A CED. THE ENTIRE TRANSACTIONS REFLECTED IN HIS NOTEBOOK 5 HAVE BEEN WRITTEN IN CODED LANGUAGE WHICH IS EVIDENT FROM PAGE NO.3 ACCOUNT OF R.S.R. GIVEN THE NARRATION AS UNDER: - 100) 00 DATED 30/05/1994 24000) 90)00 DATED 07/06/1994 50)00 DATED 07/06/1994 MAMA KO HERE THE SUM OF TRANSACTIONS 100 + 90 + 50 = 240)00 WRITTEN IN, BUT THE ACTUAL TRANSACTION ARE OF RS. 24,000/ - . MOREOVER, THE DIFFERENT TRANSACTIONS REFLECTED IN THIS NOTEBOOK ARE WRITTEN IN CODED LANGUAGE WHICH IS EVIDENT FROM NATURE OF PAYMENT SHO WN THEREIN. FOR EXAMPLE ON PAGE NO.7 THE SALE OF SAREES WRITTEN AS RS. 5)65 ON 30/01/1994, 26) 45 9)79 SHOWN IN 26/02/1994, WHICH IS IMPROBABLE TO HAVE ANY SALE OF LADIES SAREES IN THE COST AS INDICATED IN THE NOTEBOOK. ON BACK SIDE OF PAGE NO. 10 THE INTEREST WORKED OUT UPTO 31/03/1994 AND PAID ON 12/08/1994. THUS, IT IS AMPLY CLEAR THAT THE PURCHASE REFLECTED IN THIS ACCOUNT INCLUDING SALES THEREOF ARE SUPPRESSED BY THE A SSESSEE AMOUNTING TO RS. 8,82,7 10/ - WHICH IS NOT RECORDED IN HIS REGULAR BO OKS OF ACCOUNTS. THE PURCHASES COST AND PROFIT ELEMENT IS REQUIRED TO BE TAXED IN THE HANDS OF THE ASSESSEE FOR A.Y. 1994 - 95 . SINCE THE ASSESSEE HAS NOT FURNISHED ANY CALCULATION OF PROFIT ON THIS UNRECORDED/ UNEXPLAINED PURCHASE / SALES. ACCORDINGLY, I THEREFORE TAKE 15% PROFIT OF SUCH UNRECORDED PURCHASE AMOUNTING TO RS. 8,82,710/ - . THUS TOTAL ADDITION OF RS. 10,15,116/ - ON THIS ACCOUNT IS MADE AMOUNTING TO RS. 1,32,407/ - (PROFIT) + 8,82,710/ - (UNRECORDED / UNDISCLOSED PURCHASE) AND THE SAME IS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE. 11 . THE ASSESSING OFFICER FURTHER MADE THE ADDITION OF RS. 6,04,070/ - ON ACCOUNT OF UNRECORDED RECEIPTS U/S. 68 OF THE ACT WITH THE FOLLOWING OBSERVATIONS: - ON PAGE NO.2 & 3 OF THE AFORESAID NOTEBOOK THE FOLLOWING RECEIPTS HAVE BEEN NOTED IN THE CODED LANGUAGE, THE DETAILS ARE AS UNDER: - 6 DATE PAGE NO. 3 DATE 1000)00 11/01/94 R.M. 790)00 20/01/94 R.M. 1197)00 17/01/94 100)00 28/01/94 83)70 25/01/94 120)00 05/02/94 300)00 26/01/94 100)00 28/02/94 250)00 10/02/94 100)00 21/03/94 1000)00 18/02/94 1000)00 05/03/94 4830)7 0 1210)00 THE TOTAL UNACCOUNTED RECEIPTS OF PAGE NO. 2 & 3 AS MENTIONED ABOVE ACTUALLY WORKED OUT TO RS. 6,04,070/ - (483070 + 121000), THE SAME IS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE AS UNRECORDED /UNEXPLAINED DEPOSITS U/S. 68 OF THE I.T. ACT, 1961. 12. THE ASSESSING OFFICER ALSO MADE THE ADDITIONS OF RS. 4,68,643/ - AND RS. 70,297/ - ON THE BASIS OF ENTRIES RECORDED IN PAGES 5 TO 8 & 11 OF THE NOTEBOOK WITH THE FOLLOWING OBSERVATIONS: - FROM THE DEEP SCRUTINY OF THE AFORESAID NOTEBOOK UNRECORDED PURCHASES HAVE BEEN FOUND THAT THE SAME HAVE NOT BEEN REFLECTED IN GOOD PURCHASE / PURCHASES OF SAREE A/C IN THE LEDGER / BOOKS OF ACCOUNTS OF THIS ASSESSMENT YEAR . THE PAGE WISE DETAILS AS NARRATED IN THE SAID NOTE BOOK ARE AS UNDER: - PAGE NO. 5 BALAJI SAREES : 59) 1 0 DATED 17/03/94 PAGE NO. 6 A.S. & CO. 878)40 DATED 26/02/94 12)7 0 INTEREST PAGE NO. 7 & 8 SELECTION AJMER 710)00 DATED 05/02/94 1549)15 DATE NOT GIVEN BUT BETWEEN 10/02/94 TO 18/02/94 396)47 DATE 06/03/94 7 143)25 DATE 30/03/94 PAGE NO. 11 24)10 INTEREST UPTO 31/03/94 552)21 DATED 19/03/94 361)05 DATED 23/04/93 ________ 4686)43 TOTAL THE ENTIRE TRANSACTIONS WORTH OF RS. 4,68,643/ - ARE NOT FOUND RECORDED IN THE ACCOUNT BOOKS ACTUALLY AND THE SAME DO NOT REFLECT IN THE PURCHASE A/C AS MENTIONED ABOVE. DURING THE SET - ASIDE ASSESSMENT PROCEEDINGS IN SPITE OF SUFFICIENT OPPORTUNITY PROVIDED TO THE ASSESSEE WITH REGARD TO THE ABOVE FINDING AND INFERENCE DRAWN OF CODED ENTRIES WRITTEN AS RS. 4686)43 AND CORRECT AMOUNT TAKEN AT RS. 4,68,643/ - OF PURCHASES (DECODED AMOUNT) HAD NOT BEEN REBUTTED BY THE ASSESSEE. THEREFORE, THE PRINCIPLE PURCHASE AMOUNT T A KEN RS. 4,68,643/ - ALONG WITH ESTIMATED PROFIT AS @ 15% RELATING TO THE ABOVE TRANSACTION WORKED OUT I.E. AT RS. 70,297/ - TREATING THE SAME AS PROFIT AS SUCH UNRECORDED RECEIPTS IS HEREBY ADDED IN THE TAXABLE INCOME. THE ASSESSEE HAS INC ORPORATED THE ABOVE ENTRIES IN CODED LANGUAGE BY IGNORING LAST TWO DIGITS, THEREFORE, THE ACTUAL AMOUNT AS REFLECTED FROM THE NOTEBOOK HAS BEEN TAKEN INTO ACCOUNT. THUS, AN ADDITION OF RS. 5,38,940/ - (468643 + 70297) FOR UNACCOUNTED PURCHASES AND 15% PROFIT EARNED THROUGH THESE TRANSACTIONS IS MADE IN THE TAXABLE INCOME OF THE ASSESSEE IN THE A.Y. 94 - 95 . 13 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - THE THREE ADDITIONS AS ABOVE ARE MADE BASED ON A NOTEBOOK MARKED SEIZED ANNEXURE A - 11 (PAPER BOOK PAGE 42 TO 49) BASED ON WHICH ADDITIONS MADE FOR TRADING IN FORM OF INVESTMENT / PURCHASE OF STOCK AND GP MARGIN S THEREON HENCE THE SAME ARE TAK E N CONSOLIDATED . BASED ON HON'BLE RAJASTHAN HIGH COURT DECISION DATED 25/04/08 IN ASSESSEES CASE (DBIT APPEAL NO. 52 OF 2004) ON SEIZED NOTEBOOK FOUND, THE A.O. HAS CONSIDERED THESE ENTRIES IN CODED AND AFTER DECODING THE 8 SAME HAS TRIED TO MAKE ADDITION S FOR UNRECORDED PURCHASES , SALES, CREDITS AT HIS OWN WHIM WITHOUT CONSIDERING THE FOLLOWING FACTS: - DURING THE COURSE OF SEARCH & SEIZURE OPERATION ON 28/09/1994 THE IMPORTANT ISSUES INVOLVED IN THIS CASE ARE: - (C) NO EXCESS / SHORTAGE OF STOCK OF GOODS / CASH FOUND NOR DETERMINED BY DEPARTMENT . (D) THAT THE BUSINESS WAS ONLY STARTED ON 10/01/1994 & RUN ONLY FROM 10/01/94 TO 31/03/94 F O R THE YE A R. (E) COMPLETE BALANCE SHEET OTHER DOCUMENTS / RECORDS OF BUSINESS WERE FOUND DURING THE COURSE OF SEARCH / SURV EY & VERIFIED. (F) THAT FINAL ADDITION TO UNDISCLOSED INCOME / EXPENSES INVESTMENTS ETC. HAVE BEEN MADE IN SUBSEQUENT YEAR (YEAR OF SE A RCH I.E. ASSESSMENT YEAR 1995 - 96). (G) DURING THE COURSE OF ASSESSMENT PROCEEDINGS / LD CIT(A) S ORDER & HON'BLE ITATS ORDER IT HAS BEEN THOROUGHLY EXAMINED & ESTABLISHED THAT CODED F I G U R ES AS PER ANNEXURE A 11 OF SEIZED NOTEBOOK HAVE ALREADY BEEN ENTERED IN REGULAR BALANCE SHEET FOR SALES / PURCHASES AS PER THE CASE IS. (H) THAT THE A.O. HIMSELF IN FRESH ORDER U/S. 148 / 143 (3) DATED 07/12/2009 (AFTER THE DIRECTIONS OF HON'BLE RAJASTHAN HIGH COURT JODHPUR BENCH) HAS ACCEPTED THAT THE TRANSACTIONS ENTERED IN THIS NOTEBOOK (ANNEXURE A - 11) CONTAIN PURCHASE S AND SALES OF S AREES AND PAYMENT MADE /RECEIVED FRO M VARIOUS CUSTOMERS BY THE ASSESSEE (PARA 5(1) PAGE 7 OF SAID ORDER) . (I) THAT THE A.O. IN HIS ORDER HAS ALSO NOT DENIED THIS FACT THAT TRANSACTIONS OF SALE PURCHASE IN THIS NOTE BOOK WERE FOUND ENTERED IN REGULAR CASH BOOK, LEDGER & CONSIDERING TH E SAME EVEN THE PROVISIONS OF SECTION 145(1) HAVE BEEN APPLIED (REFER POINT 1 ABOVE) (J) LOOKING TO THESE FACTS WITH SIMILAR FINDING & EVIDENCES ON RECORD HOW THE A.O. CAN TAKE SOME TRANSACTIONS OF THIS NOTE BOOK AS SALE, SOME AS PURCHASES & OTHERS AS CASH - CREDIT (AS TAKEN FOR ADDITION ON PAGE 2 & 3 OF ANNEXURE A - 11. WHERE A SUM OF RS. 6,04,070/ - HAS BEEN CONSIDERED AS CASH CREDIT. (K) THUS IT IS TRUE & ESTABLISHED THAT THE CODED FIGURES OF SAID ANNEXURE A - 11 ARE NOTHING BUT KACCHI BAHI FOR SALES / PU RCHASES & PARTIES ACCOUNT FOR SALES / PURCHASES DULY ENTERED & RECONCILED WITH PACKKI BAHI AS VERIFIED FROM TIME TO TIME BY VARIOUS AUTHORITIES AND THUS THE STAND OF A.O FOR ADDITION U/S. 68 OF RS. 6,04,07I0I/ - IS WRONG . IT IS WORTH TO NOTE THAT IN A BAHI THERE IS DEBIT & CREDIT BOTH AS A MATTER OF ACCOUNTING 9 PRINCIPLE & PRU DEN CE . THE A.O. WITHOUT CONSIDERING THIS ASPECT HAS ADDED BOTH DEBIT SUMMATION AND CREDIT SUMMATION. WHEREAS IF NOT PROVED OTHERWISE THE DEBIT AND CREDIT SHOWN PAYMENT RECEIVED/MADE & ONLY NET OF BOTH AT THE MOST TO BE ADDED. SINCE FURTHER IT IS A MATTER OF SALES PURCHASE AS HELD BY A. O . ONLY EITHER ON PURCHASE S SUMMATION OR SALES SUMMATION GROSS MARGIN GROSS PROFIT ELEME NT SHOULD BE APPLIED TO BE SET OFF FROM OTHER TANGIBLE ADDITIONS FOR UNEXPLAINED INVESTMENTS, HOUSE HOLD DRAWINGS OR OTHER EXPENSES. THUS ON DECODING THE ANNEXURE & BASED ON ACCOUNTING PRINCIPLES THE SALES / PURCHASES ARE TO BE DETERMINED & WHICHEVER IS HIGHER (SALES / PURCHASES SUMMATION) G.P. THEREON MAY BE APPLIED AS AN ALTERNATIVELY MEANS DETAILS AS BELOW: THE A.O. WITHOUT CONSIDERING THE TERM OF PEAK WITHOUT TAKING CARE OF ACCOUNTING PROCEDURE FOR DEBIT AND CREDIT HAS TRIED TO A DD ALL AT ONE STROKE WHICH IS UNJUSTIFIED & AGAINST THE NATURAL JUSTICE. THE FOLLOWING DETAILS ARE TO BE CONSIDERED WHILE EXAMINING THESE LOOSE PAPERS DECODING: - (I) THAT THOUGH THE TRANSACTIONS ARE ALREADY ENTERED IN REGULAR BOOKS OF ACCOUNT. HOWEVER, CONSIDERING THE DECODED TERM AS PER DIRECTIONS OF HON'BLE COURT THE IN DI VI DUAL PAPER & SUMMARY LEDGERIZED THEREOF ARE AS ENCLOSED (PAGE NO. 1 TO 33) (II) : - (A) CHART OF EACH SEIZED DOCUMENT INDIVIDUALLY (PAGE NO 34 TO 37) (B) CHART OF SEIZED DOCUMENTS OF ENTRIES CONSIDERED BY A.O. AS UNEXPLAINED /UNRECORDED EXCLUDING OF PAGE 2 & 3 (UNEXPLAINED CREDITS) . (C) CHART OF SEIZED DOCUMENTS OF ENTRIES CONSIDERED BY A. O . AS UNEXPLAINED UNRECORDED INCLUDING OF PAGE 2 & 3 . (PAGE NO. 40 TO 41) (III) THAT THE PURCHASE SIDE OF ALL THE SEIZED DOCUMENTS AS CONSIDERED BY A.O. COMES TO RS. 11,36,035/ - AND SALES SIDE GIVES TOTAL OF RS. 9,76,580/ - (WITH OR WITHOUT (B)(C)). (IV) THAT THE MODUS OPERANDI OF THIS UNEXPLAINED TRANSACTIONS IS THAT THE ASSESSEE PURCHASES GOODS ON CREDIT AND MAKE DAILY CASH SALES AS VERIFIABLE FROM THE SEIZED PAPERS. THUS FOLLOWING THE THEORY OF ROTATION OF FUNDS THE ASSESSEE USED TO E A RN PROFITS ON THESE TRANSACTIONS WHICH PILED UP FROM MONTH TO MONTH . THUS ON DATE OF SEARCH ON 28/09/1994 NO STOCK OR CASH IN EXC ESS FOUND AND THESE 10 INCOME WERE CONVERTED INTO ASSETS IN FORM OF OTHER TANGIBLE/INTANGIBLE ASSETS FOUND UNDISCLOSED DURING ASSESSMENT YEAR 1995 - 96 BEING YEAR OF SEARCH. THESE PILED UP EARNING HAS ALREADY BEEN TAXED IN THE YEAR OF SEARCH I.E. A.Y. 19 95 - 96 IN FORM OF UNDISCLOSED ASSETS HENCE THE ADDITIONS IN THE YEAR IS A DOUBLE ADDITION. THUS EITHER THE GROSS MARGIN ON PURCHASE SIDE TOTAL (D R SUMMATION) OR SALES SIDE TOTAL (CR. SUMMATION) AT THE BEST CAN BE APPLIED ON THESE TRANSACTIONS AFTER DECODING. SINCE A SUM OF RS. 71,000.00 [710)00 CODED] HAS BEEN CONSIDERED TWICE IN CHART OF SEIZED LOOSE PAPER (IN A.OS TOTAL OF RS. 10,15,116.00 AS P ER GROUND NO. 3 & IN A.OS TOTAL OF RS. 5,38,940.00 GROUND NO. 5) BASED ON PAGE 7 & 8) HENCE THE REVISED TOTALS WILL INCLUDE RS. 71,000/ - IN EITHER OF THE PAPER ONCE ONLY (SEIZED PAPER 4 TO 8) . 14 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT IN THIS CASE A SEARCH WAS CONDUCTED, BUT THERE WAS NO MENTION OF ANY EXCESS STOCK OR EXCESS CASH FOUND DURING THE SEARCH EITHER IN THE ORIGINAL ASSESSMENT ORDER DATED 31 /03/1998 OR THE ASSESSMENT ORDER DATED 12/07/2009 PAS SED BY THE ASSESSING OFFICER IN THE SET ASIDE ASSESSMENT PROCEEDINGS , SO IT CAN BE REASONABLY CONCLUDED THAT NO EXCESS CASH OR STOCK WAS FOUND AND THE ENTIRE ADDITIONS HAD BEEN MADE BY THE ASSESSING OFFI CER ON THE BASIS OF THE ENTRIES IN THE SEIZED NOTEBOOK WHICH WAS CLEAR FROM THE NOTING OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WHEREIN HE MENTIONED THAT THE TRANSACTIONS ENTERED INTO NOTEBOOK CONTAIN PURCHASES & SALES OF SAREES AND PAYMENT MADE/RECEIVED FROM VARIOUS CUSTOMERS BY THE ASSESSEE . THE LD. CIT(A) 11 FURTHER OBSERVED THAT SEIZED NOTEBOOK HAD BEEN WRITTEN AS KACCHI BAHI F O R SALES AND PURCHASES AND CERTAIN TRANSACTIONS OF THIS NOTEBOOK WERE DULY RECORDED IN THE REGULAR B OOKS. HE POINTED OUT THAT THE ENTRIES IN THIS NOTEBOOK IND I C A TED THAT BOTH PURCHASE AND SALE WERE ENTERED ON LEFT AND RIGHT SIDE OF EACH PAGE . ON LEFT HAND SIDE OF PAGE NO. 7, TOTAL TRANSACTIONS OF RS. 8,91,626/ - WERE RECORDED WHICH WERE CONSIDERED BY THE ASSESSING OFFICER AS UNRECORDED AND THE TOTAL TRANSACTIONS RECORDED ON THE RIGHT HAND SIDE WERE OF RS. 3,55,059/ - , T HE ASSESSING OFFICER TREATED THOS E TRANSACTIONS AS PURCHASES AND SALES RESPECTIVELY. THE LD. CIT(A) WAS OF THE VIEW THAT THE SALE PROCEEDS WERE UTILIZED BY THE ASSESSEE ON DAILY BASIS BECAUSE THERE WAS NO CREDIT SALES AND THE ENTRIES IN THE NOTEBOOK REVEALED THAT PURCHASES AND SALES HAD BEEN MADE WITHIN A SHORT SPAN OF TIME. HE THEREFORE, CONCLUDED THAT THERE WAS ROTATION OF FUNDS F OR MAKING UNACCOUNTED PURCHASES BY UTILIZI NG SALE PROCE EDS THEREOF . THEREFORE, THE ADDITION OF ENTIRE SUM OF RS. 8 , 82,710/ - ON ACCOUNT OF UNACCOUNTED PURCHASES WAS NOT JUSTIFIED. THE LD. CIT(A) CONSIDERED IT FAIR AND REASONABLE TO MAKE THE ADDITION FOR GROSS PROFIT IN RESPECT OF THOSE UNACCOUNTED TRANSACTIONS , ACCORDING LY, HE APPLIED GROSS PROFIT RATE OF 15% ON RS. 8,82,710/ - AND WORKED OUT THE PROFIT AT 12 RS. 1,32,407/ - AND THE ADDITION WAS RESTRICTED TO RS. 1,32,407/ - AS AGAINST RS. 10,15,116/ - . 15 AS REGARDS TO THE ENTRIES ON PAGE NOS. 2 & 3 WHICH WERE CONSIDERED BY THE ASSESSING OFFICER AS UNACCOUNTED RECEIPTS OF THE ASSESSEE , THE LD. CIT(A) OBSERVED THAT NO MATERIAL HAD BEEN BROUGHT ON RECORD BY THE ASS ESSING OFFICER TO CONCLUDE THAT THE ASSESSEE HAD ANY OTHER SOURCE OF INCOME. THEREFORE, THE TRANSACTIONS RECORDED IN THE NOTEBOOK WERE TO BE TAKEN AS SALE AND PURCHASE OF SAREES ONLY. HE POINTED OUT THAT THE PROFIT IN RESPECT OF UNACCOUNTED TRANSACTIONS HAD BEEN SEPARATELY ESTIMATED AT RS. 1,32,407 / - AND RS. 70,927/ - , THEREFORE, THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION OF RS. 6,04,070/ - . ACCORDINGLY , THE SAID ADDITION WAS DELETED. 16 AS REGARDS TO THE ENTRIES ON PAGE NOS. 5 TO 8 & 11 , THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER CONSIDERED CERTAIN ENTRIES AND IGNORED OTHER ENTRIES WHILE MAKING THE ADDITION OF RS. 10,15,116 / - ON ACCOUNT OF UNRECORDED PURCHASES, BUT NO COMMENT S HA VE BEEN MAD E REGARDING SALES MADE IN RESPECT OF SAME. THE LD. CIT(A) POINTED OUT THAT THE BUSINESS WAS CARRIED OUT BY THE ASSESSEE DURING TH E YEAR FOR 3 MONTH ONLY AND THE ENTRIES IN THE NOTEBOOK ALSO CONFIRMED THIS FACT BECAUSE 13 DATES RECORDED WERE OF ABOVE MENTIONED PERIOD ONLY . THE LD. CIT(A) FURTHER POINTED OUT THAT FEW ENTRIES HAD BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNTS WHILE REMAINING ENTRIES DID NOT FIND PLACE IN THE REGULAR BOOKS. THEREFORE, UNACCOUNTED TURNOVER OF THE ASSESSEE WAS TO BE ESTIMATED FROM THIS NOTEBOOK AND PROFIT THEREON WAS TO BE CONSIDERED AS INCOME FROM UNACCOUNTED TRANSACTIONS. THE LD. CIT(A) POINTED OUT THAT THE UNRECORDED TRANSA CTIONS IN THE REGULAR BOOKS OF ACCOUNTS WERE AT RS. 4,68,647/ - . THE LD. CIT(A) ESTIMATED THE GROSS PROFIT AT RS. 70, 297 / - BY APPLYING GROSS PROFIT RATE OF 15% AND DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO THAT EXTENT ONLY I.E. RS. 70,297/ - AS AGAINST RS. 5,38,940/ - . NOW THE DEPARTMENT IS IN APPEAL . 17 LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER . 18 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 19 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREF ULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT 14 CASE , IT APPEARS THAT THE ASSESSING OFFICER CONSIDERED THE ENTRIES OF ONE SIDE ONLY NOTED IN THE NOTEBOOK FOUND DURING THE COURSE OF SEARCH AND MADE THE ADDITION OF THE ENTIRE SUM WHILE LD . CIT(A) CONSIDERED ENTRIES OF BOTH SIDES OF THE NOTEBOOK, THE ENTRIES NOTED ON THE LEFT SIDE WERE CONSIDERED AS UNRECORDED PURCHASES AND ON THE RIGHT SIDE AS RECORDED SALES. THE LD. CIT(A) WORKED OUT THE PROFIT BY APPLYING GROSS PROFIT RATE OF 15% ON THE UNRECORDED TRANSACTIONS AND RESTRICTED THE ADDITION TO THAT EXTENT INSTEAD OF THE ADDITION MADE BY THE ASSESSING OFFICER , WHO CONSIDERED THE ENTIRE TRANSACTIONS AS INCOME OF THE ASSESSEE. I N OUR OPINION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF THE ENTIRE TRANSACTIONS PARTICULAR L Y WHEN HE HIMSELF HAD POINTED OUT THAT FEW OF THE ENTRIES WERE ALREADY RECORDED IN THE BOOKS OF ACCOUNTS AND THE REMAINING TRANSACTIONS WERE RELATING TO THE PURCHASES. IN THE PRESENT CASE, T HE ASSESSING OFFICER DID NOT BRIN G ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT T HE ASSESSEE WAS ENGAGED IN ANY OTHER ACTIVITY AND EARNING THE INCOME FROM OTHER SOURCES . THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN CONSIDERING THE TRANSACTIONS RECORDED IN THE NOTEBOOK AS SALE AND PURCHASE OF THE SAREES ONLY AND RESTRICTING THE ADDITION BY APPLYING THE GROSS PROFIT RATE OF 15% ON THE TOTAL PURCHASES WHICH WERE UNRECORDED AND SINCE THE ENTRIES IN THE NOTEBOOK HAD BEEN MADE WITHIN A 15 SHORT SPAN OF TIME , S O, IT COULD BE REASONABLE TO CONCLUDE THAT THERE WAS ROTATION OF FUNDS FOR MAKING UNACCOUNTED PURCHASES BY UTILIZING SALE PROCEEDS THEREOF. IN OUR OPINION, THE LD. CIT(A) WAS FAIR AND REASONABLE IN RES TRIC T ING THE ADDITION BY APPLYING THE GROSS PROFIT RATE ON THE UNRECORDED PURCHASES. WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THESE ISSUES. 20 THE LAST ISSUE VIDE GROUND NO. 5, RELATES TO THE RESTRICTION OF ADDITION TO RS. 89,791/ - AS AGAINST RS. 1,25,656/ - MADE BY THE ASSESSING OFFICER U/S. 68 OF THE ACT. 21 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF VARIOUS CASH CREDITS AND AFTER CONSIDERING THE REPLY OF THE ASSESSEE CAME TO THE CONCLUSION THAT THE CREDITORS OF RS. 1,25,656/ - REMAINED UNEXPLAINED. ACCORDINGLY, THE ADDITION FOR THE S AID AMOUNT WAS MADE. 22 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - THAT BEFORE THE HON 'BLE HIGH COURT , THE INCOME TAX DEPARTMENT WAS IN APPEAL ON 3 ISSUES (SUBSTANTIAL QUESTION OF LAW) SPECIFICALLY [BASED ON FACTS & LOOKING TO EARLIER SET - ASIDE ISSUE+. 16 THE HON ABLE RAJASTHAN HIGH COURT, JODHPUR IN APPEAL NO. 52 OF 2004 DATED 25.04.08 AT PAGE 3 PARA 1 H AS CATEGORICALLY DECIDED THAT OUT OF THREE QUESTIONS, SO FAR QUESTION NO. 3 IS CONCERNED , THE PARTIES ARE AD - IDEM THAT THIS QUESTION DOES NOT ARISE BECAUSE ON THIS ASPECT THE LEARNED CIT HAS REMANDED THE MATTER, A G AINST WHICH NO APPEAL WAS FILED, THEREFORE , THIS WAS NOT THE QUESTION BEFORE THE LEARNED I.T.A.T. SO FAR AS THE OTHER TWO QUESTIONS ARE CONCERNED, THE LEARNED ASSESSIN G OFFICER HAS FOUND , CONSEQUENT UPON PURPORTED DEEP SCRUTINY OF THE LOSE PAPERS AND NOTE BOOK. THUS AS PER SAID ORDER THE HONBLE H IGH COURT HAS CONSIDERED, DISCUSSED & PRONOUNCED (SET - ASIDE) ONLY ON ISSUE NO. (I) & (2) I.E. APPLICABILITY OF PROVISIONS OF SECTION 145 (1) / (2) & SECTION A(3) & ADDITIONS ON THE BASIS OF UNEXPLAINED LOOSE PAPERS AS PER ANNEXURE A - LL. SINCE WHILE PRONOUN CING THE ORDER THE HON 'BLE HIGH COURT HAS CLEARLY STATED AS UNDER: - IN THAT VIEW OF THE MATTER, INSTEAD OF TECHNICALLY DECIDING THE QUESTION AS FRAMED, WE THINK IT APPROPRIATE, TO SIMPLY SET ASIDE THE ORDERS OF THE LEARNED TRIBUNAL, AND THE COMMISSIONER, AND REMAND THE MATTER BACK TO THE LEARNED ASSESSIN G OFFICER, TO UNDERTAKE A COMPLETE AND THROUGH INVESTIGATION, INCLUDING INVESTIGATION FROM THE RELEVANT TRANSPORTERS, PURCHASERS, BANKS, AND FROM ALL POSSIBLE CORNERS, AND ARRIVE AT APPROPRIATE CONCLUSIONS , IN A FAIR, OBJECTIVE, AND DISPASSIONATE MANNER. OBVIOUSLY, THE ASSESSMENT ORDER, AS ORI G INALLY PASSED, SHALL STAND ACCORDINGLY MODIFIED . THUS ONLY THE LD CIT(A) S ORDER / ITATS ORDER (WHERE THIS ISSUE BEING SET - ASIDE) ARE ONLY TO BE MODIFIED. AND ONC E PARTICULAR ISSUE ALREADY DECIDED VIDE SEPARATE SET - ASIDE ORDERS. THE AO HAS NO FURTHER JURISDICTION ON THE MATTER. THUS THE THIRD ISSUE RELATED TO EACH CREDITORS WAS NOT THE SUBJECT MATTER OF HONBLE COURT & SAME SHOULD NOT BE RE - DECIDED BY LD. AO. *SINCE IN THE AOS BASIC OR IN INITIAL ASSESSMENT ORDER DATED 31.03.98 ADDITIONS FOR RS. 3,85,471.00 FOR VARIOUS CASH CREDITORS WERE ADDED LD. CIT (A) IN APPEAL ORDER NO. 70/IT/98 - 99 DATED 15.12.98 SET - ASIDE THIS ISSUE BACK TO AO WHILE DECIDING THE ISSU ES AND LATER VIDE A.OS ORDER (SET ASIDE) DATED 17 29/11/2000, LD. CIT(A) S ORDE R NO. 457/2000 - 01 DATED 31/01/20 0 1 & HON'BLE ITATS, JODHPUR ORDER (SET - ASIDE) NO. 140/JU/20 0 1 DATED 23/06/2005 HAVE BEEN DEALT SEPARATELY & DEPARTMENT HAS NOT MADE FURTHER APPEAL ON SAID ISSUE BASED ON ITATS (SET - ASIDE) ORDER]. THUS IT IS REQUESTED TO KINDLY CONSIDER THE FACTS/LEGAL ASPECT. AN APPLICATION U/S. 154 HAS SEPARATELY BEEN MOVED TO A.O. FOR CONSIDERATION OF FACTS. ALTERNATIVELY THE FACTS MAY BE DECIDED ON MERITS AS CONSIDERED EARLIER (REFER SET - ASIDE ORDERS, IF REQUIRED WE MAY BE FURTHER GIVEN A CHANCE TO FILE AN ADDITIONAL PAPER BOOK ON ISSUE WITH FACTS. 23 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE, RESTRICTED THE ADDITION TO RS. 89,791/ - ON THE BASIS OF THE OBSERVATIONS MADE BY THE ITAT, JODHPUR BENCH IN I.T.A.NO. 140 & 141/JU/2001 IN ASSESSEES OWN CASE VIDE ORDER DATED 23/06/2005 , AND OBSERVED IN PARA 9.3 OF THE IMPUGNED ORDER AS UNDER: - 9.3 FROM THE PERUSAL OF RECORDS IT IS FOUND THAT IN THIS CASE HONBLE ITAT, JODHPUR BENCH MADE THE FOLLOWING OBSERVATIONS IN ITS ORDER DATED 23.06.2005 IN ITA NO. 140 & 141 /JU/2001: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVA NT MATERIAL ON RECORD IN THE LIGHT OF THE PRECEDENTS CITED BEFORE US. THE FIRST AND PRIMARY QUESTION IS TO DECIDE THE TIME WHEN THE ONUS TO PROVE THE GENUINENESS OF THE CREDITS AS CAST UPON THE ASSESSEE U/S 68, IS DISCHARGED. IT IS SETTLED LEGAL POSITION T HAT THE ASSESSEE IS DUTY BOUND TO SATISFY ALL THE THREE INGREDIENTS, VIZ, IDENTITY OF THE CREDITORS, CAPACITY OF THE CREDITOR TO ADVANCE THE AMOUNT AND THE GENUINENESS OF THE TRANSACTION, SO AS TO COME OUT OF THE PURVIEW OF SEC. 68. IN THE CASE OF CIT VS. KORLAY TRADING CO., LTD. [1998] 232 ITR 820 [CAL], THE AMOUNTS WERE RECEIVED THROUGH CHEQUES. IN THE ABSENCE OF SATISFACTION, THE ASSESSING OFFICER MADE ADDITION. THE TRIBUNAL FOUND THAT THE ASSESSEE 18 HAD DISCHARGED ITS INITIAL BURDEN WHEN IT FURNISHED NECE SSARY PARTICULA RS OF THE CREDITORS. THE HON BLE CALCUTTA HIGH COURT AFTER REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION LD. (1986) 159 ITR 78 (SC) HELD THE FINDINGS OF THE TRIBUNAL TO BE PERVERSE IN DELETING THE ADDITION. IT WAS HELD THAT MERE FILING OF I. T. NOS. WAS NOT ENOUGH TO PROVE THE GENUINENESS OF THE CASH CREDIT AS THE CREDITOR SHOULD BE IDENTIFIED AND HE SHOULD BE CREDIT WORTHY. SIMILAR VIEW WAS REITERATED IN THE CASE OF K.M. SADHU KHAN & S ONS P. LTD. VS. CIT [1997] 239 ITR 77 [CAL] TO HOLD THAT THE BURDEN OF PROOF WAS ON THE ASSESSEE TO PROVE THE IDENTITY AND CAPACITY OF THE CREDITOR AND ALSO GENUINENESS OF THE LOAN. IN THE CASE OF CIT VS. PRECISION FINANCE P. LTD. [1994] 208 ITR 465 [CAL] THE ASSESSEE HAD RECEIVED CREDITS BY WAY OF TRANSACTIONS THROUGH BANKING CHANNEL. IT WAS HELD THAT THE ASSESSEE MUST PROVE THE IDENTITY OF THE CREDITORS AND THEIR CREDITWORTHINESS. IN THE ABSENCE OF ANY MATERIAL TO ESTABLISH THESE ASPECTS, THE AMOUNT WAS H ELD TO BE ASSESSABLE FROM UNDISCLOSED SOURCES. THE BOMBAY BENCH OF THE TRI B UNAL IN THE CASE OF B. TAX CORPORATION VS. INCOME - TAX OFFICER [1993] 202 ITR 17 [BOM.] [AT] [TM] IT HAS HELD THAT MERE FILING OF CONFIRMATORY LETTERS AND GIR NOS. OF THE ALLEGED CRE DITORS WAS NOT SUFFICIENT. IT WAS FURTHER OBSERVED THAT ENQUIRY INTO THE CREDITWORTHINESS OF THE MONEY LENDERS WAS NECESSARY. THE HON 'BLE RAJASTHAN HIGH COURT IN THE CASE OF KISHORILAL SANTOSHILAL [1995] 216 ITR 9 [RAJ.] HAS OBSERVED THAT THE BURDEN TO PRO VE THE IDENTITY, CAPACITY AND GENUINENESS WAS ON THE ASSESSEE AND IF THE CASH CREDIT IS NOT SATISFACTORILY EXPLAINED, THE ASSESSING OFFICER IS JUSTIFIED TO TREAT IT AS INCOME FROM UNDISCLOSED SOURCES. A SURVEY OF THE AFORENOTED JUDGMENTS CLEARLY BRINGS OUT THAT THE PRIMARY ONUS IS CAST UPON THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE CREDITOR, PROVE HIS CREDIT WORTHINESS TO ADVANCE THE AMOUNT AND ALSO ESTABLISH THE GENUINENESS OF THE TRANSACTION SO AS TO COME OUT OF THE PURVIEW OF SEC. 68 OF THE ACT. UNLE SS ALL THE THREE CONDITIONS ARE CUMULATIVELY SATISFIED, THE ASSESSEE CANNOT BE SAID TO HAVE DISCHARGED ITS BURDEN. MERE FILING OF CONFIRMATION FROM THE CREDITOR OR THE FACT THAT THE AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL IS NOT THE SOLO 19 CRITERION TO P ROVE THE GENUINENESS OF THE CREDIT. IT IS UPON THE ASSESSEE TO SATISFY THE ASSESSING OFFICER WITH REGARD TO THE CAPACITY OF THE CREDITOR TO ADVANCE THE AMOUNT IN QUESTION. IF THE ASSESSEE DEPOSITS HIS OWN UNACCOUNTED MONEY IN THE BANK ACCOUNT OF A PERSON A ND OBTAINS CHEQUES FROM HIM, THE ASSESSEE CANNOT TURN AROUND AND CONTEND THAT HE HAS DISCHARGED HIS ONUS. CAPACITY OF THE CREDITOR TO ADVANCE THE LOAN IS AN IMPORTANT ASPECT AND IT IS THE DUTY OF THE ASSESSEE TO SATISFY THE ASSESSING OFFICER ON THIS COUNT AS WELL. THE THIRD NECESSARY INGREDIENT IS TO PROVE THE GENUINENESS OF THE TRANSACTIONS OF THE CREDITOR ADVANCING THE MONEY AND THE ASSESSEE RECEIVING IT. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF KISHORILAL SANTOSHILAL (SUPRA) HAS SETTLED THE POSITION BEYOND DOUBT THAT THE AFORENOTED THREE INGREDIENTS ARE REQUIRED TO BE SATISFIED BY THE ASSESSEE SO AS TO COME OUT OF THE SCOPE OF SEC. 68. IT IS, THEREFORE, CLEAR THAT THE GENERAL SUBMISSION MADE BY THE LD. A.R. FOR ACCEPTING THE GENUINENESS OF T HE CREDITS CANNOT BE ACCEPTED. HOWEVER, WE FIND THAT IN RESPECT OF LOAN OF RS. 50,000/ - RECEIVED FROM SHRI RAJMANL BHERULAL SANCHETI, THE ASSESSEE HAS LED EVIDENCE TO ESTABLISH THE GENUINENESS OF THE CREDIT IN THE FORM OF COPY OF ACKNOWLEDGEMENT OF RETURN FILED BY THE CREDITOR ALONG WITH LIST OF DEBTORS IN WHICH THE NAME OF ASSESSEE IS APPEA RING FOR RS. 50,000/ - AND THE COPY OF REGULAR BANK ACCOUNT IN WHICH SEVERAL TRANSACTIONS OF DEPOSITS AND WITHDRAWALS HAVE BEEN RECORDED AND ONE OF SUCH TRANS ACTIONS IS THE ADVANCEMENT OF L O A N TO THE ASSESSEE. IN VIEW OF THESE FACTS, WE ACCEPT THE GENUINEN ESS OF THE CREDIT IN THE NAME OF SHRI RAJMANL BHERULAL SANCHETI AMOUNTING TO RS. 50,0000/ - . FOR THE OTHER AMOUNTS, NO RELEVANT MATERIAL HAS BEEN PLACED ON RECORD JUSTIFYING THE ACCEPTABILITY OF THE CREDITS. FOR THE REASONS STATED IN THE ASSESSMENT AND TH E IMPUGNED ORDER IN RESPECT OF THESE PERSONS INDIVIDUALLY, WE ARE NOT INCLINED TO ACCEPT THE GENUINENESS OF THE CREDITS TO THE TUNE OF RS. 89,791/ - . THE LD. CIT(A) ON THE BASIS OF THE ABOVE OBSERVATIONS, RESTRICTED THE ADDITION TO THE TUNE OF RS. 89,791/ - . NOW THE DEPARTMENT IS IN APPEAL. 20 24 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT APPEARS THAT THIS ISSUE HAS ALREADY BEEN ADJUDICATED BY THE ITAT, JODHPUR BENCH VIDE ORDER DATED 23/06/2005 AND NOTHING CON TRARY TO THE OBSERVATIONS MADE IN THE SAID ORDER IS BROUGHT ON RECORD. WE THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 25 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 28 TH AUGUST , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH AUGUST , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .