The ITO, Ward-1(3), Surat V. Mansi Prints Pvt.Ltd.,

ITA 498/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6571 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 16-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUAMAR
• Keywords: Gross profit estimation; Unexplained cash credit; Salary income
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.498 AND 872/AHD/2009 A. Y.: 2005-06 AND 2006-07 THE INCOME TAX OFFICER, WARD 1(3), ROOM NO.113, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS MANSI PRINTS PVT. LTD., BLOCK NO.185, 210 PAIKI, PLOT NO.4, KADODARA, TAL. PALSANA, DIST. SURAT PA NO. AADCM 3251 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MAHESH KUAMAR, SR. DR RESPONDENT BY SHRI VINOD GOYAL, AR O R D E R PER BHAVNESH SAINI: THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-I, SURAT DATED 15 TH DECEMBER, 2008 FOR ASSESSMENT YEAR 2005-06 AND DATE D 15 TH JANUARY, 2009 FOR ASSESSMENT YEAR 2006-07. SINCE B OTH THE APPEALS ARE HAVING SAME GROUNDS, THEREFORE, THE SAME WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED COMM ON ORDER. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T AKEN NOTE OF THE DETAILS GIVEN IN THE TAX AUDIT REPORT AS ARE REFERR ED TO DURING THE COURSE OF ARGUMENTS. NO OTHER DOCUMENTS FILED IN TH E PAPER BOOK HAVE BEEN REFERRED TO DURING THE COURSE OF ARGUMENT S. ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 2 ITA NO.498 (A.Y. 2005-06) 3. THE REVENUE ON GROUND NO.1 CHALLENGED THE DELETI ON OF ADDITION OF RS.11,03,008/- ON ACCOUNT OF LOW GP. IN THE ASSE SSMENT ORDER THE AO STATED THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF DYEING AND PRINTING OF CLOTH. THE ASSESSEE HAS SHOWN TURNO VER OF RS.5.56 CRORES AND G.P . @ 20.82% IN THE CURRENT YEAR AS AGAINST TURNOVER OF RS.1.99 CRORES AND G.P. @29.25% IN THE LAST YEAR. T HE A.O. REJECTED THE BOOKS OF ACCOUNT U/S. 145(3) FOR THE FOLLOWING REASONS:- (I) THE ASSESSEE COMPANY STATED THAT IT HAS NOT MAINTAI NED DAY- TO-DAY STOCK REGISTER IN RESPECT OF CONSUMPTION OF CONSUMABLES AND, THEREFORE, THE QUANTITY SHOWN IN THE CLOSING S TOCK COULD NOT BE CONSIDERED CORRECT WHICH HAS AFFECTED THE BOOK R ESULT. THE ASSESSEE STATED THAT IT WAS DOING JOB WORK OF PROCE SSING OF ART SILK CLOTH AND HENCE QUANTITATIVE DETAILS ARE NOT K EPT IN CONNECTION WITH GOODS RECEIVED, PROCESSED AND DISPA TCHED. (II) IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF S.N. NAMASIVAYAM CHETTIAR 38 ITR 579, THE B OOK RESULTS CANNOT BE ACCEPTABLE. IN THIS CASE, THE HON 'BLE SUPREME COURT STATED AS UNDER: - 'THE KEEPING OF A STOCK REGISTER IS OF GREAT IMPORT ANCE BECAUSE THAT IS A MEANS OF VERIFYING THE ASSESSEES ACCOUNTS BY HAVING A 'QUANTITATIVE TALLY'. IF, AFTE R TAKING INTO ACCOUNT ALL THE MATERIALS INCLUDING THE WANT O F A STOCK REGISTER, IT IS FOUND THAT FROM THE METHOD OF ACCOU NTING THE CORRECT PROFITS OF THE BUSINESS ARE NOT DEDUCTIBLE, THE OPERATION OF THE PROVISO TO SECTION 13 OF THE INCOM E-TAX ACT WOULD ATTRACTED. THE INCOME-TAX OFFICER, EVEN I F HE ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 3 ACCEPTS THE ASSESSEE'S METHOD OF ACCOUNTING, IS NOT BOUND BY THE FIGURE OF PROFITS SHOWN IN THE ACCOUNT S. IT IS FOR THE INCOME-TAX AUTHORITIES TO CONSIDER THE MATE RIAL WHICH IS PLACED BEFORE THEM AND, IF, AFTER TAKING I NTO ACCOUNT IN ANY CASE THE ABSENCE OF STOCK REGISTER C OUPLED WITH OTHER MATERIALS THEY ARE OF THE OPINION THAT C ORRECT PROFIT CANNOT BE DEDUCED, THEN THEY WOULD BE JUSTIF IED IN APPLYING THE PROVISO TO SECTION 13. (III) THE BOOK RESULTS ARE REJECTED ON THE BASIS OF THE D ECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF BRITISH PA INTS INDIA LTD. 186 ITR 44, WHEREIN THE HON'BLE SUPREME COURT STATED THAT IF AFTER TAKING INTO ACCOUNT THE ABSENCE OF A STOCK REGISTER COUPLED WITH OTHER MATERIALS THE A.O. IS O F THE OPINION THAT CORRECT PROFIT AND GAINS CANNOT BE DED UCED THEN HE WOULD BE JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 145. AFTER REJECTING THE BOOKS OF ACCOUNT, THE A.O. STAT ED THAT THE ASSESSEE WAS ASKED FOR REASON FOR FALL IN THE G.P. BY 8.47%. THE ASSESSEE STATED THAT IT HAD NEWLY STARTED THIS BUSI NESS IN THE LAST YEAR. THE BUSINESS WAS ONLY FOR HALF OF THE YEAR AN D ACCORDINGLY THE BOOK RESULTS ARE NOT COMPARABLE WITH LAST YEAR. THE ASSESSEE STATED THAT DURING THE YEAR THE G.P. RATE FELL DOWN BECAUS E OF CENVAT CREDIT, INCREASE IN SALARY & WAGES AND PRICE HIKE IN COLOUR & CHEMICALS. THE ASSESSEE STATED THAT DURING THE YEAR CENVAT WAS ABO LISHED AND, THEREFORE, THERE IS NO CENVAT CREDIT AVAILABLE FOR SET OFF. IT HAS RESULTED IN CHANGE IN COST OF RAW MATERIAL CONSUMED . ACCORDING TO THE ASSESSEE, IF THE CENVAT IS ADDED BACK THE G.P. RATE FOR THE CURRENT YEAR WOULD BE 19.9% AND IN THE LAST YEAR IT WOULD B E 22.12%. THE ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 4 ASSESSEE FURTHER STATED THAT THE INCREASE IN WAGES COULD NOT BE FULLY ABSORBED DURING THE YEAR. THE ASSESSEE CONTENDED TH AT IT HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND HENCE THEY C ANNOT BE REJECTED AND BOTH THE INCREASE IN PRICES OF COLOUR & CHEMICALS AND WAGES COULD NOT BE ABSORBED FULLY. THE A.O. DID NOT ACCEPT THE ABOVE EXPLANATION AND STATED THAT IF CENVAT ISSUE IS CONS IDERED THE G. P. WAS STILL FALL BY 3.03% IN COMPARISON TO LAST YEAR. THE A.O. ALSO ACCEPTED THE ARGUMENT OF INCREASE IN SALARY AN D WAGES PARTIALLY BECAUSE WORKING HAD BEEN STARTED IN THE LAST YEAR F ROM SEPTEMBER 2003 ONLY. THE A.O. STATED THAT THE PRICE HIKE IN C OLOUR & CHEMICALS IN CERTAIN QUALITY IN COMPARISON TO PREVIOUS YEAR CANN OT RESULT IN SUCH HUGE FALL IN G.P. RATE. IN VIEW OF THESE REASONS, T HE A.O. ADOPTED THE G.P. RATE AT 22.80% AND MADE AN ADDITION OF RS.11,0 3,008/-. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE ARGUED THAT DURING THE ASSESSMENT PROCEEDINGS ALL THE BILLS AND VOUCHERS W ERE PRODUCED FOR VERIFICATION AND THE A.O. HAS NOT POINTED OUT ANY S PECIFIC DISCREPANCIES. IT WAS STATED THAT THEY HAD MAINTAIN ED STOCK RECORD OF PRINCIPAL ITEMS ON DAY-TO-DAY BASIS BUT IN THE CASE OF CONSUMABLE ITEMS WHICH ARE MORE THAN 100 IN NUMBERS ARE USED F REQUENTLY CANNOT BE MAINTAINABLE DAY-TO-DAY RECORDS. THE ASSE SSEE STATED THAT THE DECISION RELIED UPON BY THE A.O. IN THE CASES A RE DISTINGUISHABLE ON FACTS. IN THE JUDGMENT REFERRED BY THE A.O., THE HON'BLE SUPREME COURT HAS STATED THAT MERELY IN ABSENCE OF STOCK RE GISTER CANNOT BE A VALID REASON FOR REJECTING THE BOOKS OF ACCOUNT. TH E A.O. HAS NOT POINTED OUT ANY OTHER MATERIAL AND HENCE THIS ADDIT ION SHOULD BE DELETED. ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 5 4. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE MATERIAL ON RECORD DELETED THE AD DITION. HIS FINDINGS IN PARA 2.3 ARE REPRODUCED AS UNDER: 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O, IT IS CLE AR FROM THE ABOVE THAT ONLY REASON FOR REJECTING THE BOOKS OF ACCOUNT IS NON-MAINTENANCE OF STOCK REGISTER AND DA Y-TO- DAY REGISTER OF CONSUMABLES. NO OTHER DEFECTS HAVE BEEN POINTED OUT BY THE A.O. THE DECISION OF THE HON'BLE SUPREME COURT RELIED UPON BY THE A.O. ACTUALLY AGAI NST THE A.O. BECAUSE HE HAS NOT BROUGHT ANY OTHER MATER IAL ON RECORD FOR REJECTING THE BOOKS OF ACCOUNT. BESID ES THIS, THE APPELLANT HAS BEEN ABLE TO JUSTIFY THE FALL IN G.P. DUE TO CENVAT. THE GAP OF 3% HAS BEEN EXPLAINED BY INCREASING SALARY AND WAGES AND INCREASE IN THE RAT E OF COLOUR AND CHEMICALS. THE A.O. HAS NOT BEEN ABLE TO COUNTER THIS ARGUMENT BY BRINGING ANY MATERIAL ON R ECORD. SIMPLY REJECTING THE ARGUMENT CANNOT LEAD TO ADDITI ON. THEREFORE, BOTH THE REJECTION OF BOOKS OF ACCOUNT I S WRONG AND ESTIMATION OF INCOME IS WRONG AND HENCE THIS DISALLOWANCE IS ALLOWED. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE AO NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FURNISHED DE TAILS OF OPENING AND CLOSING STOCK QUANTITATIVE DETAILS AS DESI RED AT THE ASSESSMENT STAGE. IT IS MERELY STATED THAT THE ASSE SSEE DID NOT MAINTAIN DAY TO DAY STOCK REGISTER IN RESPECT OF CO NSUMABLES. THE LEARNED CIT(A) CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THE CASE CLEARLY NOTED THAT THE ONLY REASON FOR REJECTING TH E BOOKS OF ACCOUNTS IS NON-MAINTENANCE OF STOCK REGISTER AND DAY TO DAY REGISTER OF CONSUMABLES. THE LEARNED COUNSEL FOR THE ASSESSEE P OINTED OUT THAT ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 6 THE ASSESSEE MAINTAINED STOCK REGISTER AS WELL AS Q UANTITATIVE DETAILS OF THE OPENING AND CLOSING STOCK AND THE DETAILS HA VE BEEN MENTIONED IN THE TAX AUDIT REPORT. HE HAS POINTED O UT AT PAGE 48, 84 AND 85 OF THE PAPER BOOK IN THIS REGARD TO SHOW THA T THE ASSESSEE MAINTAINED DAY TO DAY STOCK REGISTER. FOR THE CONSU MABLES, IT WAS EXPLAINED THAT THE ITEMS ARE MORE THAN HUNDRED IN N UMBERS WHICH ARE USED FREQUENTLY, THEREFORE, DAY TO DAY REGISTER CAN NOT BE MAINTAINED. IT WOULD, THEREFORE, SHOW THAT THE ASSESSEE MAINTAI NED COMPLETE RECORD AND DAY TO DAY STOCK REGISTER IN RESPECT OF OTHER ITEMS EXCEPT THE CONSUMABLES. QUANTITATIVE DETAILS OF OTHER ITEM S ARE ALSO MAINTAINED. IT WAS ALSO ACCEPTED THAT THE ASSESSEE STARTED NEW BUSINESS IN THE LAST YEAR; THEREFORE BOOK RESULTS C ANNOT BE COMPARED WITH THE LAST YEAR. THE ASSESSEE ALSO EXPLAINED THA T MAIN REASON FOR FALL IN GP WAS BECAUSE OF CENVAT CREDIT, INCREASE I N SALARY AND WAGES AND PRICE HIKE IN COLOUR AND CHEMICALS. THE A SSESSEE ALSO DEMONSTRATED BEFORE THE AO THAT IN CASE CENVAT IS A DDED BACK, THE GP RATE OF THE ASSESSEE WOULD ENHANCE. IT WAS CONTE NDED THAT THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNTS IN WHI CH NO DEFECTS HAVE BEEN POINTED OUT BY THE AO. THE AO ACCEPTED PA RT OF THE CONTENTION OF THE ASSESSEE BUT NOTED THAT EVEN AFTE R CONSIDERING CENVAT THERE WAS A FALL IN GP BY 3.03% IN COMPARISO N TO LAST YEAR. THE LEARNED CIT(A) CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES RIGHTLY NOTED THAT THE AO HAS NOT BRO UGHT ANY OTHER MATERIAL ON RECORD FOR REJECTING THE BOOKS RESULTS. THE HONBLE DELHI HIGH COURT IN THE CASE SMT. POONAM RANI 326 ITR 223 HELD THAT ABSENCE OF STOCK REGISTER ALONE NOT A GROUND TO INF ER THAT ACCOUNTS ARE INACCURATE OR INCOMPLETE. IT MAY PUT T HE AO ON ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 7 GUARD AGAINST THE FALSITY IN THE RETURN AND PERSUAD E TO CAREFULLY SCRUTINIZE THE BOOKS OF ACCOUNTS. THE HONBLE DELHI HIGH COURT IN THE CASE OF BINDLES APPARELS 332 ITR 410 HELD TH AT NO DAY TO DAY STOCK REGISTER, BOOKS CANNOT BE REJECTED. CONSIDERING THE DETAILS NOTED IN THE TAX AUDIT REPORT IT IS CLEAR THAT THE ASSESSEE MAINTAINED PROPER STOCK REGISTER AND MAINTAINED QUANTITATIVE D ETAILS OF ALL THE ITEMS EXCEPT THE CONSUMABLES AND THAT THE AO HAS NO T BROUGHT ANY OTHER MATERIAL ON RECORD TO JUSTIFY REJECTION OF B OOK RESULTS, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE LEAR NED CIT(A) ON PROPER APPRECIATION OF THE FACTS AND MATERIAL ON RE CORD RIGHTLY DELETED THE ADDITION. WE CONFIRM HIS FINDINGS AND DISMISS T HIS GROUND OF APPEAL OF THE REVENUE. 6. ON GROUND NO.2 OF THE APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF RS.3,63,657/- ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY. IN THE ASSESSMENT ORDER, THE A.O. HAS STATED THAT THE ASSESSEE HAS INTRODUCED RS.80,000/- AS SHARE AP PLICATION MONEY FROM SHRI MUKESH LATH AND RS.2,58,000/- IN RESPECT OF SHARE APPLICATION MONEY FROM SMT. GEETA DEVI RAMSISARIA. THE A.O. STATED THAT THE COPY OF BANK ACCOUNT OF SHRI MUKESH LATH S HOWS THAT AN AMOUNT OF RS.80,000/- WAS DEPOSITED IN CASH ON 30.0 6.2004 AND ON THE SAME DAY THE ENTIRE AMOUNT WAS GIVEN TO THE ASS ESSEE COMPANY BY TWO CHEQUES. IN THE CASE OF SMT. GEETA DEVI RAMS ISARIA, CASH OF RS.2,58,000/- WAS DEPOSITED ON 28.08.2004 AND ON TH E SAME DAY ONE MORE CHEQUE WAS DEPOSITED OF RS.2,17,000/-. THE REAFTER TWO CHEQUES OF RS.2 LACS AND RS.2.75 LACS WERE ISSUED T O THE ASSESSEE COMPANY ON THE SAME DAY. THE A.O. ASKED THE ASSESSE E TO PROVE ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 8 THE IDENTITY OF THESE PERSONS, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. THE A.O. HAS STATED THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE IN SUPPORT OF THE SOURCE OF CASH DEPOSITED BY THESE TWO PEOPLE IN THEIR BANK ACCOUNT. THE A.O. FURTHER STAT ED THAT THE ASSESSEE HAS PROVIDED COPY OF INCOME TAX RETURN OR BALANCE SHEET AND BANK STATEMENT, ETC. BUT THESE DOCUMENTS ARE NO T SUFFICIENT TO PROVE THE CREDITWORTHINESS OF THESE PERSONS. ON GOI NG THROUGH THE COPY OF RETURNS FILED BY SHRI MUKESH LATH, IT IS SE EN THAT HE HAS SHOWN INCOME FROM SALARY OF RS.60,000/- AND ALSO SH OWN SOME INTEREST INCOME FROM ASSESSEE COMPANY ITSELF. SMT. GEETADEVI RAMSISARIA FILED HER RETURN U/S.44AF BY SHOWING INC OME OF RS.88,078/-. THE A.O. STATED THAT RELYING ON THE DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 2 14 ITR 801 STATED THAT THE ASSESSEE'S EXPLANATION ABOUT THE NA TURE AND SOURCE IS NOT SATISFACTORY. IN VIEW OF THESE REASONS, THE A.O . ADDED THE AMOUNT OF RS.3,38,000/- AS UNEXPLAINED CASH CREDIT U/S.68 AND HE ALSO DISALLOWED INTEREST EXPENDITURE OF RS.25,657/- PAID BY THE ASSESSEE ON THIS AMOUNT. THE TOTAL DISALLOWANCE MADE BY THE A.O. IS RS.3,63,657/-. DURING THE APPELLATE PROCEEDINGS, TH E ASSESSEE STATED THAT THE ASSESSEE HAS SUBMITTED COPY OF CONFIRMATIO N OF BOTH THE PERSONS. FULL NAME, ADDRESS AND PAN, COPY OF RETURN OF INCOME, BALANCE SHEET AND BANK STATEMENT HAVE ALSO BEEN SUB MITTED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTION. THE A.O. HAS NOT MADE ANY CROSS-INQUIR Y WITH THE LENDERS. THE AMOUNT HAS BEEN RECEIVED THROUGH BANK ACCOUNT OF THE LENDERS BY ACCOUNT PAYEE CHEQUE. IN VIEW OF THESE R EASONS, THE ASSESSEE HAS STATED THAT IT HAS DISCHARGED THE ONUS AND NO ADDITION ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 9 CAN BE MADE IN VIEW OF THE DECISION !OF THE HON'BLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION LTD. AND THE DECISIO N OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF ROHINI BUILDERS 1 82 CTR 373. THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT PVT. LTD. 216 CT R 195, WHEREIN THE HON'BLE SUPREME COURT HAS STATED AS UNDER:- 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE INCOME-T AX ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE P ETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BO GUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DISMISSED. IN VIEW OF THE ABOVE, THE ASSESSEE HAS STATED THAT THE ADDITION MADE BY THE A.O. SHOULD BE DELETED. 7. THE LEARNED CIT(A) CONSIDERING THE FACTS AND CIR CUMSTANCES AND THE MATERIAL ON RECORD DELETED THE ADDITION. HI S FINDINGS IN PARA 3.3 ARE REPRODUCED AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. THE APPEL LANT HAS GIVEN CONFIRMATION BEARING FULL NAME AND ADDRES S, COPY OF INCOME-TAX RETURN, COPY OF BANK STATEMENT A ND, THEREFORE, IT HAS DISCHARGED ITS ONUS. THE A.O. CAN NOT ASK THE ASSESSEE TO PROVE THE SOURCE OF CASH DEPOSITED BY THE LENDERS, IN VIEW OF ABOVE DOCUMENTS, THE APPELL ANT ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 10 HAS DISCHARGED ITS ONUS BY PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . IN ANY CASE, SINCE THE ISSUE IS REGARDING SHARE APPLIC ATION MONEY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT (SUPRA) IS APPLICABLE. IN VIE W OF ABOVE DECISION THE ADDITION MADE BY THE A.O. IS DEL ETED AND THIS GROUND OF APPEAL IS ALLOWED. ' 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE HAS GIVEN CONFIRMATION OF THE SHAREHOLDERS ALONG WITH T HEIR COMPLETE ADDRESSES, THEIR INCOME TAX RETURNS AND BANK ACCOUN TS. THE ASSESSEE HAS, THEREFORE, DISCHARGED ITS INITIAL ONU S TO PROVE GENUINENESS OF THE DEPOSIT OF THE SHARE APPLICATION MONEY. THE LEARNED CIT(A), THEREFORE, RIGHTLY NOTED THAT THE I SSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF LOVELY EXPORT PVT. LTD. (SUPRA). WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. SAME IS DISMI SSED. 9. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ITA NO.872/AHD/2009 (AY : 2006-07) 10. ON GROUND NO.1, THE REVENUE CHALLENGED THE DELE TION OF ADDITION MADE BY THE AO OF RS.4,92,662/- ON ACCOUNT OF LOW GP. ON GROUND NO.2, THE REVENUE CHALLENGED THE DELETION OF ADDITION OF RS.3,00,960/- ON ACCOUNT OF UNEXPLAINED SHARE APPLI CATION MONEY. THE AO ON THE SAME REASONS AS GIVEN IN THE ASSESSME NT YEAR 2005- 06 REJECTED THE BOOK RESULTS AND MADE THE ADDITION. THE LEARNED CIT(A) CONSIDERING HIS APPELLATE ORDER DATED 15 TH DECEMBER, 2008 DELETED THE ADDITION. IN THE SECOND GROUND ALSO THE LEARNED CIT(A) ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 11 FOLLOWING HIS ORDER DATED 15 TH DECEMBER, 2008 DELETED THE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY. 11. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT BOTH THE ISSUES ARE SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2005-06, THEREFORE, ORDER IN THAT CASE MAY BE FOLLOWED. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF T HE SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW BOTH THE ISSUES ARE SAM E. THE LEARNED CIT(A) RIGHTLY FOLLOWED HIS APPELLATE ORDER DATED 1 5 TH DECEMBER, 2008 FOR PRECEDING ASSESSMENT YEAR 2005-06 IN DELETING T HE ADDITIONS. SINCE, BOTH THE ISSUES ARE SAME, THEREFORE, THE LEA RNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIONS ON MERIT. IN TH E RESULT, THE DEPARTMENTAL APPEAL STANDS DISMISSED. 12. IN THE RESULT, BOTH THE DEPARTMENTAL APPEALS AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 -05-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 20 -05-2011 LAKSHMIKANT/- ITA NO.498 AND 872/AHD/2009 ITO, WARD 1 (3), SURAT VS. MANSI PRINTS PVT. LTD. 12 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD