ACIT, New Delhi V. M/s. Shri Hari Diagems Exports, New Delhi

ITA 4978/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2737 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 09-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 20-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Search and seizure; Principle of natural justice; Opportunity of cross examination; Question of law
• Section: 143(3); 153A; 133(6); 10B; 68; 69; 37; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) SHRI RAJPAL YADAV, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4978/DEL./2012 (ASSESSMENT YEAR : 2008-09) ACIT, CENTRAL CIRCLE 2, VS. M/S. SHRI HARI DIAGEM S EXPORTS, NEW DELHI. A 22, GREEN PARK, NEW DELHI. (PAN : ABHFS0255R) CO NO.415/DEL/2012 (IN ITA NO.4978/DEL./2012) (ASSESSMENT YEAR : 2008-09) M/S. SHRI HARI DIAGEMS EXPORTS, VS. ACIT, CENTRAL CIRCLE 2, A 22, GREEN PARK, NEW DELHI. NEW DELHI. (PAN : ABHFS0255R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE REVENUE BY : SHRI RAMESH CHANDRA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE APPEAL FILED BY THE REVENUE AND CROSS APPEAL F ILED BY THE ASSESSEE EMANATE FROM THE ORDER OF THE CIT (APPEALS)-III, DE LHI DATED 26.07.2012. 2. THE ASSESSEE HAS SET UP 100% EXPORT ORIENTED UNI T AT 1414, KUCHA USTAB HIRA DARIBA, CHANDNI CHOWK, DELHI. THE UNIT I S REGISTERED AS EOU IN NOIDA SPECIAL ECONOMIC ZONE. IT IS ELIGIBLE FOR DED UCTION U/S 10IB OF THE ACT. ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 2 THE ASSESSEE FIRM ENGAGED IN THE MANUFACTURING AND EXPORTING OF GOLD AND DIAMOND JEWELLERY. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE INCOME-TAX ACT, 1961 ON 26.02.2009 AT THE PREMI SES OF THE ASSESSEE LOCATED AT A-22, GREEN PARK, NEW DELHI. A NOTICE U /S 153A OF THE INCOME- TAX ACT, 1961 WAS ISSUED AND THE RETURN DECLARING I NCOME OF RS.2,163/- WAS FILED ON 23.03.2010. THE ASSESSING OFFICER MADE AN ADDITION OF RS.2,50,73,931/- ON ACCOUNT OF UNEXPLAINED INVESTME NT. 3. THE GROUNDS OF APPEAL OF THE REVENUE READ AS UND ER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,50,73,931/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT U/ S 69 OF THE INCOME-TAX ACT, 1961. 2. THE ORDER OF THE CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. 4. THE GROUNDS IN CROSS OBJECTION OF THE ASSESSEE R EAD AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS E RRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE CONTENTION OF THE ASSE SSEE THAT THE PROCEEDINGS INITIATED UNDER SECTION 153A AGAINST THE APPELLANT ARE IN VIOLATION OF THE STATUTORY CONDITIONS AND THE PROCEDURE PRESCRIBED U NDER THE LAW AND AS SUCH THE SAME IS BAD IN LAW AND LIKELY TO BE QUASHED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE C ONTENTION OF THE ASSESSEE THAT THE ASSESSMENT FRAMED UNDER SECTION 153A/143(3 ) BEING AGAINST THE STATUTORY PROVISION OF THE ACT AND THE PROCEDURE PR ESCRIBED UNDER THE LAW, IS BAD AND THE SAME IS LIABLE TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE C ONTENTION OF THE ASSESSEE THAT IN A REASSESSMENT PROCEEDING UNDER SECTION 153 A OF THE ACT THE ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 3 ADDITIONS AND DISALLOWANCES ARE TO BE CONFINED TO T HE MATERIAL FOUND DURING THE COURSE OF SEARCH ONLY. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN IGNORING THE CO NTENTION OF THE ASSESSEE THAT THE FINDINGS GIVING BY THE AO ARE CONTRARY AS THE AO ON THE ONE HAND IS HOLDING THAT THE INVESTMENTS MADE IN THE PURCHAS ES ARE BOGUS AND ON THE OTHER HAND MAKING AN ADDITION THAT THE INVESTMENT I N PURCHASES HAVE NOT BEEN DISCLOSED. 5. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN IGNO RING THE CONTENTION OF THE ASSESSEE THAT THE AO HAS ERRED BOTH ON FACTS AND IN LAW IN NOT ALLOWING THE EXEMPTION UNDER SECTION 10A OF THE ACT ON THE ASSES SED INCOME. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE GROUNDS OF CROSS OBJECTION. 5. IN THE REVENUES APPEAL, THE GROUND NOS.2 & 3 AR E GENERAL IN NATURE AND THE SAME DO NOT REQUIRE ANY ADJUDICATION. GROUND N OS.1 & 2 IN THE CROSS OBJECTION OF THE ASSESSEE WERE NOT PRESSED, HENCE S AME ARE DISMISSED. GROUND NO.6 OF THE CROSS OBJECTION FILED BY THE ASS ESSEE IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 6. IN THE GROUND NO.1 OF REVENUES APPEAL, THE ISSU E INVOLVED IS AGAINST DELETION OF ADDITION OF RS.2,50,73,931/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE INC OME-TAX ACT, 1961. 7. THE CIT (A) HAS DELETED THE ADDITION BY HOLDING AS UNDER :- IN THESE GROUNDS OF APPEAL THE APPELLANT HAS CONTE STED THE ADDITION MADE BY THE AO FOR RS.2,50,73,931/- BY HOLDING THAT THE PURCHASE EXPENSES OF THIS AMOUNT CLAIMED BY THE ASSESSEE ARE IN THE NATURE OF UNEXPLAINED INVESTMENTS MADE BY THE ASSESSEE U/S 69 OF THE IT ACT. FROM THE ASSESSMENT ORDER IT IS NOTED THAT THE ABOV E ADDITION TO INCOME IS BASED ON A REPORT RECEIVED FROM CIB, JAIP UR AS WELL DIT (INVESTIGATION), JAIPUR THAT THE PURCHASES SHOWN TO HAVE BEEN MADE BY THE ASSESSEE FROM M/S POOJA JEWELLERS, M/S ANIL EXPORTS, M/S ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 4 STONE IMPEX, M/S TOUCH STONE, M/S MAHAVIR GEMS, M/S VAISHALI GEMS, M/S KIRAN JEWELLERS AND M/S ROHIT GEMS ARE BO GUS AS THE PROPRIETORS OF THESE CONCERNS HAVE DENIED SUPPLY OF GOODS TO THE ASSESSEE. THAT WHEN THE ASSESSEE WAS ASKED TO FILE FRESH CONFIRMATION FROM THESE SUPPLIERS (AS THE EARLIER CONFIRMATIONS WERE NOTED TO BE QUITE OLD IN NATURE) THE ASSESSEE DID SUBMIT COPY O F CONFIRMATION OF THESE PARTIES OF LATEST DATE BUT THESE HAVE BEEN DI SBELIEVED BY THE AO ON THE GROUND THAT THESE ARE NOT GENUINE AS THE DAT ES ON THESE CONFIRMATIONS HAVE BEEN CHANGED AFTER CUTTING /APPL YING WHITENER. A COPY OF STATEMENTS RECORDED OF THE ABOVE SUPPLIERS (EXCEPT THAT OF M/S ROHIT GEMS AND M/S KIRAN JEWELLERS) WERE ALSO P ROVIDED TO THE ASSESSEE, IN ORDER TO CONFRONT THE SAME. HOWEVER, I N RESPONSE THERETO THE ASSESSEE SUBMITTED THAT IN THESE STATEMENTS NO SPECIFIC REFERENCE OF THEIR TRANSACTIONS WITH THE ASSESSEE FIRM HAS BE EN MADE AND THAT THE ASSESSEE FIRM HAS DULY ACCOUNTED FOR ALL TRANSACTIO NS ENTERED INTO WITH THE ABOVE FIRMS. IT IS NOTED FROM THE ASSESSMENT OR DER AS WELL AS THE REMAND REPORT RECEIVED FROM THE AO THAT THE ONLY RE ASON FOR MAKING THE ADDITION TO INCOME IS THAT THE ABOVE STATED PUR CHASES FROM SUPPLIERS RECORDED IN THE BOOKS OF THE APPELLANT FO R RS.2,50,73,931/- WERE JUST BOOK ENTRIES AND THAT THE GOODS/ITEMS MEN TIONED IN THE RESPECTIVE BILLS HAVE NOT BEEN PURCHASED BY THE ASS ESSEE. AS AGAINST THE ABOVE POSITION OF THE AO, THE APPELL ANT'S CONTENTION REVOLVES AROUND THE PROPOSITION THAT IN NONE OF THE STATEMENTS RELIED BY THE AO, THE PROPRIETORS OF THE SUPPLIER CONCERNS HAVE MADE THERE IS ANY SPECIFIC MENTION OF THE NAME OF THE ASSESSEE AND THEREFORE THESE STATEMENTS CANNOT BE USED AGAINST THE ASSESSE E WITHOUT ANY FURTHER INVESTIGATION, WHICH EVIDENTLY HAS NOT BEEN CARRIED OUT BY THE AO. THE OTHER BASIC CONTENTION OF THE APPELLANT IS THAT THE QUANTITY OF THE MATERIAL/GOODS MENTIONED IN ALL THE PURCHASE IN VOICES (WHICH HAVE BEEN HELD AS BOGUS BY THE AO) HAS BEEN DULY RE CORDED IN THE VARIOUS BOOKS OF ACCOUNTS INCLUDING STOCK REGISTER MAINTAINED BY THE ASSESSEE IN HIS REGULAR COURSE OF BUSINESS. IN THIS CONNECTION THE ASSESSEE HAS ALSO FILED STOCK SUMMARY AS PER ANNEXU RE E TO 3CD REPORT GIVING QUANTITATIVE DETAILS OF OPENING STOCK , PURCHASES, CONSUMPTION/SALES AND CLOSING STOCK OF RAW MATERIAL AND FINISHED GOODS WHERE QUANTITY OF ALL PURCHASES INCLUDING ALL EGED BOGUS PURCHASES FOR THE VALUE OF RS.2,50,73,931/- HAS BEE N DULY ACCOUNTED FOR. THE APPELLANT HAS ALSO FILED COPIES OF MONTHLY RETURN FILED WITH CENTRAL EXCISE DEPARTMENT IN WHICH THE QUANTITATIVE DETAILS OF PURCHASES MADE FROM THE ABOVE SUPPLIER CONCERNS FIG URES. IT HAS BEEN ARGUED THAT THE ITEMS PRODUCED OUT OF THE ALLEGED P URCHASES HAVE BEEN USED FOR MANUFACTURE OF JEWELLERY WHICH IS SOLD/EXP ORTED AND THAT IN THE ABSENCE OF RECEIPT OF QUANTITY IN THE STOCK REC ORDS OF THE APPELLANT, THE DETAILS OF SUCH PRODUCTION/SALES WOU LD NOT TALLY. ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 5 IT IS OBSERVED THAT IN HIS REMAND REPORT THE AO HAS AGREED TO THE FACT THAT THE QUANTITY OF MATERIAL/ITEMS PURCHASED FROM THE SUPPLIER CONCERNS (AS REFLECTED IN THE INVOICES) HAVE BEEN R ECORDED IN THE BOOKS OF ACCOUNTS AND THE AO HAS NOT DOUBTED THE CO RRECTNESS OF THE QUANTITATIVE DETAILS OF PURCHASES /SALES MADE BY TH E APPELLANT. THUS THERE IS CONSIDERABLE FORCE IN THE ARGUMENT OF THE ASSESSEE THAT WITHOUT TAKING INTO ACCOUNT THE QUANTITY AND ITEMS OF THE ALLEGED BOGUS PURCHASES THE ASSESSEE WOULD NOT BE IN A POSI TION TO PRODUCE THE ITEMS WHICH HAVE BEEN EXPORTED OR ARE LYING IN THE STOCK AT THE END OF THE FINANCIAL YEAR. UNDER THESE CIRCUMSTANCE S AND TAKING INTO ACCOUNT THE FACT THAT IN NONE OF THE STATEMENTS OF THE ALLEGED SUPPLIERS THERE IS ANY REFERENCE OF THE NAME OF THE ASSESSEE AS WELL AS KEEPING INTO CONSIDERATION THE FACT THAT THE DISALLOWANCE O F THE PURCHASES FOR RS.2,50,73,931/- WOULD RESULT IN A GP RATE OF 76.91 % WHICH IS QUITE ABNORMAL IN APPELLANT'S LINE OF BUSINESS (AS COMPAR ED TO THE GP RATE OF 46.45% DURING AY 2009-10 AND 32.59% DURING AY 20 10-11), I AM OF THE CONSIDERED VIEW THAT THE ADDITION MADE FO R RS.2,50,73,931/- IS NOT SUSTAINABLE IN FACTS. IN THIS CONNECTION IT IS OBSERVED THAT THE FACTS OF THE APPELLANT'S CASE ARE QUITE SIMILAR TO THAT OF THE DECISION OR ITAT IN CASE OF PRADEEP KUMAR JAIN VS. ITO IN ITA N O. 1716/DEL/11 DECIDED BY 'F' BENCH ON 30.11.2011, WHICH HAS BEEN RELIED UPON BY THE APPELLANT. APART FROM THE ABOVE, IT IS ADDITIONALLY OBSERVED T HAT WHILE THE AD HAS MADE THE ADDITION TO INCOME FOR RS.2,50,73,931/ - AS UNEXPLAINED INVESTMENT BUT IT IS A MATTER OF RECORD THAT THE AD HAS NOT QUESTIONED OR DOUBTED THE SOURCE OF THESE INVESTMENTS AND THER EFORE IT CANNOT BE SAID THAT THE INVESTMENT IS UNEXPLAINED. FOR THIS R EASON TOO THE ADDITION TO INCOME IS NOT SUSTAINABLE AND IS DIRECT ED TO BE DELETED. ACCORDINGLY GROUNDS OF APPEAL NO.6 TO 9 ARE ALLOWED . 8. LD. DR TOOK US THROUGH THE ORDER OF THE ASSESSIN G OFFICER AND PLEADED THAT THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. LD. DR SUBMITTED THAT ALL THE CONFIRMATIONS FILED BY THE ASSESSEE WE RE DEFECTED INCLUDING THE CONFIRMATIONS OF ASSOCIATE FIRMS OF THE ASSESSEE. T HESE FRESH CONFIRMATIONS WERE FILED BUT THE SUPPLIERS PUT THE LATEST DATE BY CHANGING THE DATE OF THE OLD CONFIRMATIONS AND HAD PUT THEIR SIGNATURES UNDER FI RMS STAMP. IN THE ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 6 STATEMENTS RECORDED BY DIT (INVESTIGATION), JAIPUR, THE SUPPLIERS HAVE CATEGORICALLY DENIED THE SUPPLY OF THE MATERIAL. TH EY HAVE ADMITTED FOR GIVING ACCOMMODATION ENTRY. THEREFORE, NO USEFUL PURPOSE C OULD HAVE SERVED BY GIVING AN OPPORTUNITY OF CROSS EXAMINATION OF SUCH PARTIES. LD. DR ALSO SUBMITTED THAT CIB UNIT, JAIPUR WAS FAILED TO FIND M/S. ROHIT GEMS AT THE AVAILABLE ADDRESS. HE RELIED ON THE ORDER OF THE A SSESSING OFFICER. 9. ON THE OTHER HAND, LD. AR SUBMITTED THAT ALL THE CONFIRMATIONS WERE FIELD BEFORE THE ASSESSING OFFICER. THE CONFIRMATI ONS WERE AGAIN FILED AFTER GETTING THE SIGNATURES AND STAMP OF THE FIRM OF THE SUPPLIERS. THE ASSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRY FOR ESTABL ISHING THAT CONFIRMATIONS WERE NOT GENUINE. THE ASSESSING OFFICER COULD HAVE CALLED SUCH INFORMATION ISSUING NOTICE U/S 133(6) OF THE ACT. THE STATEMEN TS WERE RECORDED BY DIT (INVESTIGATION), JAIPUR. IN ALL THESE STATEMENTS, N OWHERE THE ASSESSEES NAME APPEARED. THESE STATEMENTS WERE GENERAL IN NATURE. FURTHER, THE ASSESSEE WAS NEVER CONFRONTED WITH THESE STATEMENTS NOR AN OPPOR TUNITY TO CROSS EXAMINATION THESE PARTIES WERE GIVEN WHICH IS A CLE AR VIOLATION OF NATURAL JUSTICE. LD. AR ALSO SUBMITTED THAT SOME OF THE PAR TIES WERE NOT SUPPLIER TO THE ASSESSEE, HOWEVER, THE ASSESSING OFFICER HAS NO T CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE IN THIS REGARD. TH E ASSESSEE HAS FILED STOCK SUMMARY, QUANTITATIVE DETAILS OF OPENING STOCK, PUR CHASES TO THE CONSUMPTION OF SALES AND CLOSING STOCK OF RAW MATERIAL AND FINI SHED GOODS. IN THE ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 7 QUANTITATIVE DETAILS, ALL THE PURCHASES INCLUDING T HE ALLEGED PURCHASES WHICH HAVE BEEN DOUBTED BY THE ASSESSING OFFICER HAS BEEN CONSIDERED AND HAS BEEN DULY ACCOUNTED FOR. PAYMENTS TO ALL THESE PARTIES WERE MADE FROM THE BANK ACCOUNT OF THE ASSESSEE. THE ITEMS PURCHASED HAVE B EEN USED FOR MANUFACTURING JEWELLERY FOR SALE/EXPORT. IN ABSENCE OF QUANTITATIVE PURCHASE THROUGH THESE BILLS, THE PRODUCTION AND SALES ACCOU NT CANNOT BE TALLIED. LD. AR FURTHER SUBMITTED THAT ASSESSEES EXPORT PROFIT OF JEWELLERY WAS EXEMPTED U/S 10B OF THE INCOME-TAX ACT, 1961, HENCE, THERE I S NO QUESTION OF SUPPRESSING THE PROFIT. THE QUANTITATIVE RECORDS MA INTAINED BY THE ASSESSEE IN TERMS OF PURCHASE OF THE RAW MATERIAL HAS TO MAKE S TATUTORY COMPLIANCE FOR CENTRAL EXCISE RULES, VAT AND OBLIGATION CASTED IN REPORT U/S 44AB OF THE INCOME-TAX ACT, 1961. THEREFORE, THERE WAS NO QUES TION OF SUPPRESSION OF ANY INCOME OR EXPENDITURE IN TERMS OF PURCHASES. 10. WE HAVE HEARD BOTH THE SIDES. THE ADDITION OF UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME-TAX ACT, 1961 HAS BEEN MADE ON THE BASIS OF THE REPORT RECEIVED FROM CIB, JAIPUR AS WELL AS DIT (INVESTIGA TION), JAIPUR. THE ASSESSEE HAS SHOWN PURCHASES FROM M/S. POOJA JEWELL ERS, M/S ANIL EXPORTS, M/S STONE IMPEX, M/S TOUCH STONE, M/S MAHAVIR GEMS, M/S VAISHALI GEMS, M/S KIRAN JEWELLERS AND M/S ROHIT GEMS. THE PROPRI ETOR OF THESE CONCERNS DENIED SUPPLY OF GOODS IN THE STATEMENTS BEFORE CIB , JAIPUR AND DIT (INV.), JAIPUR. HOWEVER, THE ASSESSEES NAME WAS NOT APPEA RING IN THE STATEMENTS ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 8 RECORDED BY THE DIT (INVESTIGATION), JAIPUR. WHEN THE ASSESSING OFFICER WAS ASKED FOR FRESH CONFIRMATIONS FROM THESE SUPPLIERS IN ADDITION TO THE CONFIRMATIONS SUBMITTED EARLIER OCCASION, THE FRESH CONFIRMATIONS WERE FILED FROM THESE PARTIES. IN THE STATEMENTS RECORDED, TH ERE WAS NO SPECIFIC REFERENCE TO THE TRANSACTIONS ENTERED INTO BY THESE PERSONS W ITH THE ASSESSEE. FURTHER THE ASSESSEE WAS NEVER PROVIDED AN OPPORTUNITY TO C ROSS EXAMINE THESE PERSONS WITH REFERENCE TO THE TRANSACTIONS ENTERED INTO WITH THE ASSESSEE. IN SUCH A SITUATION, SUCH STATEMENTS CANNOT BE MADE BA SIS FOR MAKING AN ADDITION IN THE CASE OF THE ASSESSEE. FURTHER ASSESSING OFFI CER HAS DOUBTED THE CONFIRMATIONS. FRESH CONFIRMATIONS WERE FILED, HO WEVER, HE HAS NOT MADE ANY FURTHER ENQUIRY TO ESTABLISH THE NON-GENUINENES S OF THESE CONFIRMATIONS. THE QUANTITY OF MATERIAL/GOODS PURCHASED BY THESE I NVOICES HAS BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT INCLUDING THE STOC K REGISTER MAINTAINED BY THE ASSESSEE. QUANTITATIVE DETAILS OF OPENING STOCK , PURCHASES, CONSUMPTIONS/SALES AND CLOSING STOCK OF RAW MATERIA L AND FINISHED GOODS HAVE BEEN REPORTED IN THE AUDITED BOOKS OF ACCOUNT. THE ASSESSEE IS ALSO ABLE TO FILE THE MONTHLY RETURN SUBMITTED WITH THE CENTRAL EXCIS E DEPARTMENT IN WHICH QUANTITATIVE DETAILS OF THE PURCHASES FROM THESE CO NCERNS WERE ALSO REPORTED. AFTER REDUCING THE QUANTITATIVE PURCHASES THROUGH T HESE BILLS FROM THESE PERSONS, THE QUANTITATIVE DETAILS OF GOODS SOLD/EXP ORTED CANNOT BE TALLIED. THE QUANTITATIVE DETAILS OF PURCHASES/SALES HAVE NOT BE EN DISPUTED BY THE REVENUE. ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 9 THEREFORE, IT CANNOT BE SAID THAT THE SALES WERE MA DE WITHOUT ANY PURCHASES. CONSIDERING THESE FACTS, WE FIND THAT THE ASSESSEE S NAME DID NOT APPEAR IN THE STATEMENTS RECORDED OF THE SUPPLIERS BY THE DIT (IN VESTIGATION), JAIPUR. THE ASSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRY WHEN THE ASSESSEE SUBMITTED FRESH CONFIRMATIONS FROM THE SUPPLIERS. THE QUANTITATIVE DETAILS OF PURCHASES AND SALES HAVE NOT BEEN DOUBTED. ON SIMIL AR FACTS, ITAT IN THE CASE OF PRADEEP KUMAR JAIN HUG VS. ITO IN ITA NO.1716/DE L/2011 IN ITS ORDER DATED 30.11.2011 HAD HELD AS UNDER :- 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AN D GONE THOUGH THE RECORD CAREFULLY. IN ORDER TO CLAIM ANY EXPENDITURE NOT BEING EXPENSES DESCRIBED IN SECTION 30 TO 36 AN D NOT BEING IN THE NATURE OF CAPITAL EXPENSES OR PERSONAL EXPEN SES LAID OUT AND SPENT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, ONES CLAIM HAS TO BE EXAMINED UNDER THE RESIDUARY PROVISION OF SECTION 37. HENCE, IN ORDER TO BE ELIGIBLE FOR EXPE NSES UNDER THIS SECTION ONE HAS TO FULFILL THE CONDITIONS (I) THE EXPENDITURE MUST NOT BE GOVERNED BY THE PROVISIONS OF SECTION 3 0 TO 36 (II) EXPENDITURE MUST HAVE BEEN LAID OUT WHOLLY AND EXCL USIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE (III) T HE EXPENDITURE MUST NOT BE PERSONAL IN NATURE (IV) THE EXPENDITURE MUST NOT BE CAPITAL IN NATURE. THE EXPRESSION WHOLLY EMPLOYED IN SECTION 37 REFERS TO THE QUANTUM OF EXPENDITURE, WHILE THE WORD EXCLUSIVELY REFERS TO THE MOTIVE, OBJECTIVE AND P URPOSE OF THE EXPENDITURE. 9. BEFORE US, THERE ARE TWO SETS OF FACTS. ACCORDIN G TO THE ASSESSEE, IT HAS ENTERED INTO A GENUINE BUSINESS TR ANSACTION. IN SUPPORT OF ITS CLAIM, IT HAS FILED CONFIRMATION FRO M THE SELLER. IT HAS FILED EVIDENCE EXHIBITING THE PAYMENT MADE THRO UGH ACCOUNT PAYEE CHEQUE. THE SELLER IS AN INCOME TAX ASSESSEE AND HAVING PERMANENT ACCOUNT NUMBER. ON THE OTHER HAND, THE DE PARTMENT IS POSSESSING STATEMENT OF THE SELLER RECORDED BY THE INVESTIGATION WING WHEREIN HE HAS DISCLOSED THAT NO SALE WAS MADE BUT ONLY ACCOMMODATION ENTRY WAS GIVEN. WE ARE REQUIRED TO E VALUATE THE ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 10 EVIDENTIARY VALUE OF THIS STATEMENT. WHETHER IT CAN BE CONSIDERED AS A GOSPEL TRUTH AND ASSESSEE CAN BE BURDENED WITH THE TAX LIABILITY? THIS STATEMENT WAS RECORDED FROM THE BAC K OF THE ASSESSEE. IT WAS NOT GIVEN AN OPPORTUNITY TO CROSS EXAMINE HIM. PROBABLY IF CASE WAS TO BE DECIDED ONLY ON THIS STA TEMENT, WE WOULD HAVE REMITTED THE MATTER TO THE AO FOR READJU DICATION AFTER PROVIDING THE OPPORTUNITY OF CROSS EXAMINATIO N, BUT FOR THE SAKE OF ARGUMENTS, EVEN IF WE TAKE THIS STATEMENT A S ADMISSIBLE UNDER LAW THEN ALSO SOLELY ON THE BASIS OF THIS STA TEMENT THE OTHER EVIDENCE PRODUCED BY THE ASSESSEE CANNOT BE I GNORED. MR. VIKAS PARASHER MIGHT BE MAKING THIS STATEMENT FALSE LY OR ALLEGING SUCH TYPE OF SITUATION IN ORDER TO SAVE HI S OWN SKIN. THE ASSESSEE HAS PRODUCED COMPLETE VOUCHERS OF PURCHASE S AND SALES, AO DID NOT FIND DEFECT. IT HAS PURCHASED GOO DS OF MORE THAN ` 10 CRORE. IT HAS SOLD GOODS OF MORE THAN ` 9,88,00,000/-. THE PURCHASES FORM M/S. VIKAS ENTERPRISES IS OF ONL Y ROUGHLY ` 30 LACS. IN TERMS OF PERCENTAGE, IT IS NOT MORE THA N 5%. THE AO HAS ACCEPTED THE SALES DISCLOSED BY THE ASSESSEE. H E HAS ACCEPTED ALL MAJOR PURCHASES AND SALES. THE ASSESSEE IS IN T HE BUSINESS OF SUCH AN ITEM WHICH IS SUBJECT TO CENTRAL EXCISE. TH E CENTRAL EXCISE AUTHORITIES HAVE NOT DISBELIEVED THESE BOOKS OF ACCOUNTS OR BILL OR VOUCHERS SUBMITTED BY IT. IN SUCH SITUAT ION, THE SOLE STATEMENT OF SHRI VIKAS PARASHER CAN BE A STARTING POINT OF INVESTIGATION BUT CANNOT BE A CONCLUSIVE EVIDENCE T O DISBELIEVE THE PURCHASES MADE BY THE ASSESSEE. THE AO OUGHT TO HAVE COLLECTED MORE CORROBORATIVE EVIDENCE. HE HAS ISSUE D NOTICE U/S 143(2) FOR THE FIRST TIME ON 3RD JULY, 2008, BUT CO ULD TAKE UP THE PROCEEDINGS SERIOUSLY ON 10.11.2009. WHEN HE ISSUED A QUESTIONNAIRE IN DETAIL, HE PASSED THE ASSTT. ORDER ON 29.12.2009 WITHOUT CONDUCTING THE INQUIRY. RATHER IN OTHER WOR DS WITHIN ONE AND A HALF MONTHS HE CONCLUDED THE PROCEEDING R ELIED UPON THE STATEMENT OF A PERSON RECORDED FROM THE BACK OF THE ASSESSEE AND DISALLOWED THE PURCHASES. HE EVEN DID NOT TOUCH THE OTHER MATERIAL SUBMITTED BY THE ASSESSEE. THUS, TAKING IN TO CONSIDERATION THE DETAILS OF PURCHASES DETAILS OF S ALES DETAILS OF OTHER PARTIES AND ALL OTHER EVIDENCE PLACED ON THE RECORD WE ARE OF THE OPINION THAT AO FAILED TO COLLECT CONCLUSIVE EVIDENCE ON THE RECORD TO SAY THAT PURCHASES WERE BOGUS. THE SO LE STATEMENT OF SHRI VINOD PARASHER DOES NOT INSPIRE CONFIDENCE TO US TO IGNORE THE ACCOUNTS OF THE ASSESSEE ACCEPTED BY THE CENTRAL EXCISE AUTHORITIES, MORE PARTICULARLY WHEN MORE THA N 95% OF ITS PURCHASES WERE FOUND TO BE IN ORDER. THE PURCHASES FROM M/S. ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 11 VIKAS ENTERPRISES WERE NOT AT SUCH A HIGH RATES WHI CH COULD ENABLE THE ASSESSEE TO INFLATE ITS EXPENSES. THE AV ERAGE PURCHASE PRICE IS 101.69 PER KG AND AVERAGE SALE PRICE IS 10 4.43 IT HAS PURCHASED THE GOODS FROM M/S. VIKAS ENTERPRISES @ 1 04.16. IN THIS SITUATION, HOW IT WILL HELP THE ASSESSEE TO IN FLATE ITS EXPENSES IS NOT DISCERNABLE. THE SPECIFIC DETAILS IN THIS RE GARD ARE AVAILABLE ON PAGES 59 AND 60 OF THE PAPER BOOK. THU S, CONSIDERING ALL THESE ASPECTS, WE ALLOW THE APPEAL OF ASSESSEE AND DELETE THE ADDITIONS. IN VIEW OF THESE FACTS, WE FIND NO FAULT IN THE ORD ER OF THE CIT (A). MOREOVER, THE ISSUE REGARDING NOT CARRYING OUT INDEPENDENT IN VESTIGATION BY THE ASSESSING OFFICER, ADDITION CANNOT BE MADE IS ALSO SUPPORTED BY THE FOLLOWING DECISIONS:- 1) CANERON CONE IND P LTD VS ACIT ITA NO. 4114/DE L/11, PRONOUNCED ON 3.05.2013. 2) CIT VS GANGESHWARI METAL PVT LTD. ITA 597/2012 'AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRI ES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXH AUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COM ES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRE SENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER, AF TER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FR OM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESS MENT ORDER TO THE FOLLOWING EFFECT: - 'INVESTIGATION MADE BY THE INVESTIGATION WING OF TH E DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRA NSACTION OF ACCOMMODATION ENTRY. THE ASSESSEE WAS ASKED TO EXPL AIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/- MAY NOT BE ADDE D TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COM PANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SH ARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS. 55,50,000/- AND NOT RS.1,11,50,000/- AS MENTIONED IN THE NOTICE. THE AS SESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTI ON OF THE ASSESSEE IN ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 12 RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESS EE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,00 0/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALANCE SHEET, E TC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF A DDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACC EPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSES SEE AS HAS BEEN ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT . AS SUCH ENTRIES OF RS.55,50,000/- RECEIVED BY THE ASSESSEE ARE TREA TED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSE E AND ADDED TO ITS INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME, PENALTY PROCE EDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY.' THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRE SENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THER E WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONC E THE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY RE FERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER S ECTION 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGAT IVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW. THE APPEAL IS DISMISSED. 3) CIT VS FAIR FINVEST LTD ITA 232/2012 PARA 8. 'THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATIO N MONIES, IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJ ECT IT ON TENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CO NDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE AL LEGED HAWALA OPERATORS; SUCH A LINK WAS SHOWN TO BE PRESENT IN T HE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON B Y THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THA T IN ALL CASES OF SHARE CAPITAL ADDED UNDER SECTION 68, THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE OF THE FACTS, EV IDENCE AND MATERIAL. ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 13 NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS ACCORDINGLY DISMISSED. ' 4) CIT VS EXPO GLOBE INDIA LTD ITA 1257/2011 PARA 7. 'THIS COURT HAS CAREFULLY CONSIDERED THE SU BMISSIONS. THE PREVIOUS DISCUSSION, PARTICULARLY THE ORDER OF THE CIT (A), WOULD REVEAL THAT EVEN THOUGH THE ASSESSING OFFICER HAD INITIALLY CONCLUDED ON THE BASIS OF THE MATERIA LS MADE AVAILABLE AT THAT STAGE THAT SERVICE OF THE ENTRY PROVIDERS HAD BEEN UTILIZED TO BRING IN CAPITAL, AFTER REMAND THE CIT (A) ELABORATELY TO OK INTO ACCOUNT CONSIDERABLE MATERIAL FURNISHED BY THE ASSESSEE. TH ESE INCLUDED INCOME TAX RETURNS, BALANCE SHEETS, ROC PARTICULARS AND BANK ACCOUNT STATEMENTS. ON THE BASIS OF THESE, THE CIT (A) HELD THAT THE SHARE APPLICATION MONEY OR THE SOURCE OF THE SHARE APPLIC ATION MONEY HAD BEEN SATISFACTORILY EXPLAINED. THE ITA T WAS OF THE OPINION THAT NO INTERFERENCE WAS WARRANTED HAVING REGARD TO THE FAC TS OF THIS CASE. THIS COURT IS OF THE OPINION THAT THE ONLY SENTENCE IN PARAGRAPH-6 OF THE IMPUGNED ORDER THAT AMOUNTS WERE REFUNDED TO TH E APPLICANTS ITSELF SHOULD NOT BE A GROUND TO CONCLUDE THAT THE FINDINGS RECORDED BY THE LOWER AUTHORITIES ARE NOT ON THE BASIS OF EVIDE NCE. THE ENTIRE CONTROVERSY SOUGHT TO BE RAISED IS PURELY FACTUAL. 8. THE COURT IS NOT SATISFIED THAT THE VIEW OF THE TRIBUNAL IS SO UNREASONABLE AS TO WARRANT INTERFERENCE UNDER SECTI ON260A. 9. THE APPEAL IS ACCORDINGLY DISMISSED. ' 5) CIT VS GOEL SONS GOLDEN ESTATE PVT LTD ITA 212/2 012 PARA 3. 'WE HAVE EXAMINED THE SAID CONTENTION AND F IND THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S HAS FILED CONFIRMATION LETTERS FROM THE COMPANIES, THEIR PAN NUMBER, COPY OF BANK STATEMENTS, AFFIDAVITS AND BALANCE SHEET. THER EAFTER THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO PRODUCE THE SAID DIRECTORS/ PARTIES. ASSESSEE EXPRESSED ITS INABILIT Y TO PRODUCE THEM. THE ASSESSING OFFICER DID NOT CONSEQUENT THERETO CO NDUCT ANY INQUIRY AND CLOSED THE PROCEEDINGS. THIS IS A CASE WHERE TH E ASSESSING OFFICER HAS FAILED TO CONDUCT NECESSARY INQUIRY, VE RIFICATION AND DEAL WITH THE MATTER IN DEPTH SPECIALLY AFTER THE AFFIDA VIT/CONFIRMATION ALONG WITH THE BANK STATEMENTS ETC. WERE FILED. IN CASE THE ASSESSING OFFICER HAD CONDUCTED THE SAID ENQUIRIES AND INVEST IGATION PROBABLY THE CHALLENGE MADE BY THE REVENUE WOULD BE JUSTIFIE D. IN THE ABSENCE OF THESE INQUIRIES AND NON-VERIFICATION OF THE DETA ILS AT THE TIME OF ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 14 ASSESSMENT PROCEEDINGS, THE FACTUAL FINDINGS RECORD ED BY THE ASSESSING OFFICER WERE INCOMPLETE AND SPARSE. THE I MPUGNED ORDER PASSED CANNOT BE TREATED AND REGARDED AS PERVERSE. THE APPEAL IS DISMISSED AS NO SUBSTANTIAL QUESTION OF LAW ARISES. ' 6) ACIT VS PANCHANAN INTERNATIONAL (P) LTD (DELHI B ENCH) ITA 50/DEL/2011 PARA 8. 'WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD ACCEPTED SHARE APPLICATION MONEY OF RS .10,00,000/- THROUGH BANKING CHANNEL AND HAD FILED DETAILS/DOCUM ENTS REGARDING THE ABOVE SAID COMPANIES. THE ASSESSING OFFICER WIT HOUT GOING INTO THE DOCUMENTS AND WITHOUT CONDUCTING ANY ENQUIRY RE JECTED THE DETAILS AND MADE THE ADDITION. THE LD CIT(A) L AFTE R GOING THROUGH THE SUBMISSIONS MADE BY THE LD AR HAD RIGHTLY DELET ED THE ADDITION. THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF G OEL SONS GOLDEN ESTATE PVT LTD. SQUARELY FITS IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. IN THAT CASE, THE ASSESSEE HAD ACCEPT ED RS.30 LAKHS AS SHARE APPLICATION MONEY FROM FIVE COMPANIES AND HAD FILED CONFIRMATIONS, PAN NUMBERS, BANK STATEMENT, BALANCE SHEET ETC. WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER DID NO T CONDUCT ANY ENQUIRIES AND MADE THE ADDITION. THE RELEVANT OBSER VATION OF HON'BLE HIGH COURT ARE REPRODUCED BELOW:- 'WE HAVE EXAMINED THE SAID CONTENTION AND FIND THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS FIL ED CONFIRMATION LETTERS FROM THE COMPANIES, THEIR PAN NUMBER, COPY OF BANK STATEMENTS, AFFIDAVITS AND BALANCE SHEET. THEREAFTE R THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO PRODUCE THE SAID DIRECTORS/PARTIES. ASSESSEE EXPRESSED ITS INABILITY TO PRODUCE THEM. T HE ASSESSING OFFICER DID NOT CONSEQUENT THERETO CONDUCT ANY INQU IRY AND CLOSED THE PROCEEDINGS. THIS IS A CASE WHERE THE ASSESSING OFF ICER HAS FAILED TO CONDUCT NECESSARY INQUIRY, VERIFICATION AND DEAL WI TH THE MATTER IN DEPTH SPECIALLY AFTER THE AFFIDAVIT/CONFIRMATION AL ONG WITH THE BANK STATEMENTS ETC. WERE FILED. IN CASE, THE ASSESSING OFFICER HAD CONDUCTED THE SAID ENQUIRIES AND INVESTIGATION PROB ABLY THE CHALLENGE MADE BY THE REVENUE WOULD BE JUSTIFIED. IN THE ABSE NCE OF THESE INQUIRIES AND NON VERIFICATION OF THE DETAILS AT TH E TIME OF ASSESSMENT PROCEEDINGS, THE FACTUAL FINDINGS RECORDED BY THE A SSESSING OFFICER WERE INCOMPLETE AND SPARSE. THE IMPUGNED ORDER PASS ED CANNOT BE TREATED AND REGARDED AS PERVERSE. THE APPEAL IS DIS MISSED AS NO SUBSTANTIAL QUESTION OF LAW ARISES.' ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 15 9. FOLLOWING THE VARIOUS JUDICIAL PRONOUNCEMENTS IN CLUDING ABOVE, WE ARE OF THE OPINION THAT THE CASE OF THE A SSESSEE IS SQUARELY COVERED BY THE ABOVE JUDGMENT AND THEREFORE THE LD CIT(A) HAD RIGHTLY DELETED THE ADDITION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD CIT(A). 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED.' IN VIEW OF THESE, WE SUSTAIN THE ORDER OF THE CIT ( A) ON THE ABOVE GROUNDS. 11. IN GROUND NO.3 OF THE CROSS OBJECTION, THE ISSU E RAISED IS THAT IN A REASSESSMENT PROCEEDING U/S 153A, THE ADDITIONS AND DISALLOWANCES ARE TO BE CONFINED TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH ONLY. 12. THE CIT (A) HAS DECIDED THIS GROUND AS UNDER :- IN THESE GROUNDS OF APPEAL THE APPELLANT HAS ESSEN TIALLY ARGUED THAT THE ORDER PASSED BY THE AO U/S 153A /143(3) IS BAD IN LAW AS THE NOTICE U/S 153A IS IN VIOLATION TO THE PROVISIONS O F THE ACT. IT HAS ALSO BEEN ARGUED THAT THE ASSESSMENT IS NOT CONFINED TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH AND THAT THE ACT DOES N OT GIVE POWER TO THE AO TO REAPPRAISE THE ALREADY SETTLED ISSUES. ON A PERUSAL OF THE GROUNDS OF APPEAL AND THE SUBMISSIONS MADE BY THE A PPELLANT IT IS OBSERVED THAT THIS IS A CASE WHERE SEARCH U/S 132 O F THE IT ACT WAS CARRIED OUT ON 26.02.09 AT THE PREMISES OF THE ASSE SSEE LOCATED AT A- 22, GREEN PARK, NEW DELHI AND CONSEQUENTLY NOTICE U /S 153A WAS ISSUED ON 28.08.2009, IN RESPONSE TO WHICH RETURN O F INCOME WAS FILED BY THE ASSESSEE ON 23.03.2010. IT IS ALSO A M ATTER OF RECORD THAT THE ASSESSEE HAD ON THE EARLIER OCCASION FILED HIS ORIGINAL RETURN U/S 139(1) OF THE IT ACT ON 28.09.2009 IN WHICH SAME IN COME, THAT IS FOR RS.2,163/- WAS FILED. ON THE FACE OF IT IS APPARENT THAT AS SEARCH U/S 13 2 WAS CARRIED OUT ON THE APPELLANT'S BUSINESS PREMISES THEREFORE IT IS P ERFECTLY LEGAL IN TERMS OF SECTION 153A FOR THE AO TO HAVE ISSUED NOT ICE U/S 153A AND ALSO SUBSEQUENTLY FINALIZED THE IMPUGNED ASSESSMENT ORDER. FURTHER AS THE ASSESSMENT RELATING TO A Y 2008-09 WAS PENDI NG ON THE DATE OF INITIATION OF THE SEARCH, THEREFORE THE AO WAS WELL WITHIN HIS JURISDICTION TO ASSESS THE INCOME NOT ONLY WITH RES PECT TO THE INCRIMINATING MATERIAL/DOCUMENTS FOUND AS A RESULT OF SEARCH BUT THE ORIGINAL JURISDICTION OF THE AO TO EXAMINE OTHER IS SUES WHICH ARE NOT ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 16 CONNECTED WITH THE SEARCH WAS ALSO AVAILABLE TO THE AO. THIS VIEW FINDS SUPPORT FROM THE ORDER OF THE SPECIAL BENCH O F THE HON'BLE TRIBUNAL IN CASE OF M/S ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT IN ITA NOS. 5018 TO 5022 & 5059/M/10. ACCORDINGLY GROU NDS OF APPEAL NO.1 TO 5 ARE DISMISSED. 13. AT THE OUTSET OF THE HEARING, LD. AR HIMSELF SU BMITTED THAT IN THIS CASE, THE REGULAR RETURN OF INCOME WAS FILED ON 28.09.200 8. NOTICE U/S 153A OF THE INCOME-TAX ACT, 1961 WAS ISSUED ON 28.08.2009. THER E WAS NO ASSESSMENT MADE U/S 143(3) OF THE ACT. ONLY INTIMATION U/S 143 (1) OF INCOME-TAX ACT, 1961 WAS ISSUED. IN VIEW OF THESE FACTS, GROUND NOS .3 & 4 OF ASSESSEES CROSS OBJECTION ARE DISMISSED. 14. IN THE GROUND NO.5, THE ASSESSEE HAS TAKEN AN A LTERNATIVE GROUND WHERE IN CASE THE ADDITION IS SUSTAINED THEN ASSESSEE SHO ULD BE ALLOWED EXEMPTION U/S 10A OF THE ACT. AS WE HAVE SUSTAINED THE ORDER OF THE CIT (A) ON THE DELETION OF ADDITION IN THE EARLIER PART OF THIS OR DER, THEREFORE, WE FIND NO NEED TO ADJUDICATE THIS ISSUE. 15. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JULY, 2013. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF JULY, 2013 TS ITA NO.4978/DEL./2012 CO NO.415/DEL/2012 17 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-III, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.