ACIT, New Delhi V. M/s. Karam Chand Rubber Industries (P) Ltd., New Delhi

ITA 6599/DEL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0054 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Bogus purchase; Related party transaction; Salary income; Document seized; Documents seized
• Section: 153A; 131; 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.6599/DEL/2014 ASSESSMENT YEAR: 2011-12 ACIT, CENTRAL CIRCLE-7, NEW DELHI. VS. KARAM CHAND RUBBER INDUSTRIES (P) LTD., R/O D-1039, NEW FRIENDS COLONY, NEW DELHI. PAN: AAACK4889J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. YADAV, ADVOCATE REVENUE BY : SHRI VIJAY VERMA, CIT, DR DATE OF HEARING : 04.10.2018 DATE OF PRONOUNCEMENT : 12.12.2018 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30 TH SEPTEMBER, 2014 OF THE CIT(A)-31, NEW DELHI RELATING TO ASSESS MENT YEAR 2011-12. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF CYCLE/RICKSHAW RIMS. A SEARCH U/S 132 OF THE IT ACT WAS CARRIED OUT AT M/S DHIRANI GROUP OF CASES ON 28 TH JULY, 2011 DURING WHICH THE BUSINESS PREMISES OF THE ASSESSEE WAS ALSO COVERED. IN RESP ONSE TO NOTICE U/S 153A OF THE IT ITA NO.6599/DEL/2014 2 ACT DATED 21 ST MAY, 2012, THE ASSESSEE FILED ITS RETURN OF INCOME ON 13 TH JUNE, 2012 DECLARING TOTAL INCOME OF RS.46,05,820/-. IN RESPO NSE TO NOTICE U/S 142(1)/143(2), THE ASSESSEE FILED THE REQUISITE DETAILS AS CALLED FOR BY THE ASSESSING OFFICER FROM TIME TO TIME. 3. THE ASSESSING OFFICER, DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, OBSERVED THAT THE ASSESSEE HAS PURCHASED NICKEL FROM THE BEL OW MENTIONED FOUR PARTIES, THE DETAILS OF WHICH ARE AS UNDER:- S.NO. NAME OF THE ENTITY F.Y. (IN WHICH THE TRANSACTION IS RELATED) AMOUNT OF PURCHASES (RS.) 1 AMIT TRADING CO. SHOP NO.2263/68/7, G.F. GALI HINGABEG, KHARI BAOLI, DELHI. 2010-11 43,47,750 2 HARI OM TRADER, 86-A, BANK COLONY, MANDOLI, DELHI. 2010-11 1,16,24,236 3. SHIVAM TRADERS, 105, 1 ST FLOOR, C-17, GURU NANAK PURA, LAXMI NAGAR, DELHI. 2010-11 70,67,212 4 VARDHAMAN TRADING CO. NO.28, CHANDER GUPT COMPLEX, LAXMI NAGAR, DELHI. 2010-11 49,41,659 TOTAL 2,79,80,857 4. IN THE COURSE OF POST SEARCH ENQUIRY, SUMMONS U/ S 131 OF THE IT ACT WERE ISSUED TO THE ABOVE FOUR PARTIES FROM WHOM THE ASSE SSEE HAS MADE THE PURCHASES. HOWEVER, THE SUMMONS WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES. THE ASSESSING OFFICER, THEREFORE, ASKED SHRI VIKRAM DHI RANI, DIRECTOR OF THE ASSESSEE COMPANY TO PRODUCE THE ABOVE FOUR PARTIES FOR HIS E XAMINATION. SINCE SHRI DHIRANI FAILED TO PRODUCE THE ABOVE FOUR PARTIES, THE ASSES SING OFFICER CONDUCTED THE ENQUIRY ITA NO.6599/DEL/2014 3 THROUGH THE INSPECTOR OF THE UNIT WHO REPORTED THAT SUCH CONCERNS/FIRMS COULD NOT BE LOCATED. HE FURTHER REPORTED THAT THESE PARTIES NE VER EXISTED AT THE ADDRESS PROVIDED BY THE ASSESSEE. FROM THE VERIFICATION OF BOOKS OF AC COUNT, THE ASSESSING OFFICER NOTED THAT WHILE ROUTINE PAYMENTS WERE MADE TO OTHER ENTI TIES FROM 7 TO 30 DAYS OF THE DATE OF ISSUE OF THE BILLS, HOWEVER, IN THE CASE OF THE ABOVE FOUR PARTIES, THE PAYMENTS WERE MADE ON THE VERY NEXT DAY OF RAISING THE BILL. THE ASSESSING OFFICER RECORDED THE STATEMENT OF SHRI DHIRANI AND CONFRONTED HIM ABOUT THE DISCREPANCIES OF NON-EXISTENCE OF PARTIES AT THE GIVEN ADDRESS AS WELL AS THE UNUS UAL MANNER OF PAYMENTS TO THESE PARTIES. HE EXTRACTED SOME OF THE QUESTIONS PUT TO HIM AND THE REPLY GIVEN BY SHRI DHIRANI IN THE BODY OF THE ASSESSMENT ORDER AND OBS ERVED THAT THE REPLY GIVEN BY SHRI DHIRANI WAS CASUAL AND EVASIVE. HE, THEREFORE, ISS UED A QUESTIONNAIRE TO THE ASSESSEE ASKING HIM TO FURNISH THE COMPLETE DETAILS REGARDIN G CORRECT/LATEST ADDRESSES, PANS IN RESPECT OF THE FOUR PARTIES, ETC. THE ASSESSING OF FICER ASKED THE ASSESSEE TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE PARTIES AND T HE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE, IN RESPONSE TO THE SAME, VIDE ITS LET TERS ON VARIOUS DATES, STATED THAT THE TRANSACTION IS GENUINE. THE ASSESSEE FURNISHED THE DETAILS LIKE COPY OF FORM NO.C ISSUED BY THE ASSTT. COMMISSIONER, COMMERCIAL, GHAZ IABAD AND COPY OF VAT RETURN FILED BY THE ASSESSEE COMPANY TO PROVE THE PURCHASE S, ETC. HOWEVER, THE ASSESSING OFFICER REJECTED THE SAME ON THE GROUND THAT THESE DETAILS DO NOT PROVE THE EXISTENCE OF THE PARTIES NOR ABOUT THEIR GENUINENESS. RELYING O N THE REPORT GIVEN BY THE INVESTIGATION WING AS WELL AS THE REPORT OF WARD IN SPECTOR, THE ASSESSING OFFICER HELD THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY AND GENUINENESS OF THE PARTIES FROM WHOM ITA NO.6599/DEL/2014 4 PURCHASES AMOUNTING TO RS.2,79,80,857/- HAS BEEN MA DE. HE, THEREFORE, TREATED THE SAME AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE. 5. SIMILARLY, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PAID SALARY TO SMT. SHIBANI KHOSLA, WHO IS SISTER OF SHRI VIKRAM DHIRAN I AND, THEREFORE, SHE FALLS UNDER THE DEFINITION OF SECTION 40A(2)(B). THE ASSESSING OFFICER RECORDED THE STATEMENT OF SMT.KHOSLA U/S 131 OF THE IT ACT ON 13 TH OCTOBER, 2011 IN THE COURSE OF POST SEARCH PROCEEDINGS. IN ABSENCE OF ANY CONVINCING REPLY GI VEN BY HER TO JUSTIFY THE PAYMENT OF SALARY TO HER BY THE ASSESSEE COMPANY, THE ASSES SING OFFICER, REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSESSEE DISALLOWED THE EN TIRE SALARY PAID TO MRS. KHOSLA AMOUNTING TO RS.4,20,000/-. THE ASSESSING OFFICER A LSO MADE ADDITION OF RS.1,01,075/- ON ACCOUNT OF FOREIGN TRAVELLING EXPE NSES. HOWEVER, THE SAME IS NOT UNDER DISPUTE, THEREFORE, WE ARE NOT CONCERNED WITH THIS. THE ASSESSING OFFICER, ACCORDINGLY, DETERMINED THE TOTAL INCOME OF THE ASS ESSEE AT RS.3,31,07,750/-. 6. BEFORE THE CIT(A), THE ASSESSEE STRONGLY CHALLEN GED THE ORDER OF THE ASSESSING OFFICER. SO FAR AS THE DISALLOWANCE OF PURCHASES A MOUNTING TO RS.2,79,80,857/- IS CONCERNED, IT WAS SUBMITTED THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF MANUFACTURING CYCLE/CYCLE RIMS. IT WAS SUBMITTED T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD GIVEN THE ITEM-WISE B REAK-UP OF EACH AND EVERY PURCHASE ITEM ALONG WITH COMPARATIVE FIGURES OF THE PREVIOUS YEARS. THE TOTAL PURCHASES MADE DURING THE YEAR WAS OF RS.30,37,93,9 09/-. THE ABOVE TOTAL PURCHASE INCLUDES THE PURCHASES MADE FROM THE FOUR PARTIES W HICH WERE DISALLOWED BY THE ITA NO.6599/DEL/2014 5 ASSESSING OFFICER. THE ASSESSEE SUBMITTED THAT ALL THE FOUR DEALERS ARE DULY REGISTERED WITH THE DEPARTMENT OF TRADE AND TAXES. COPIES OF T HE DATA AVAILABLE AT THE WEBSITE OF THE DEPARTMENT WAS SUBMITTED BEFORE THE CIT(A). COP IES OF THE LEDGER ACCOUNT OF THE FOUR PARTIES IN THE BOOKS OF ACCOUNT OF THE ASSESSE E COMPANY WERE FILED AND IT WAS ARGUED THAT ALL THE PAYMENTS HAVE BEEN MADE BY ACCO UNT PAYEE CHEQUE/BANK DRAFT. SAMPLE COPIES OF THE BILLS RAISED BY THOSE PARTIES WERE SUBMITTED AND IT WAS STATED THAT THE BILLS CONTAINED THE COMPLETE ADDRESS OF THE PAR TIES, THEIR TIN NOS., ETC. FURTHER, THE PURCHASES HAVE BEEN MADE AGAINST C FORMS WHICH HAVE BEEN DULY ISSUED BY THE ASSESSEE COMPANY. IT WAS ARGUED THAT THE PURCHASES AND DETAILS OF THE C FORMS ISSUED HAVE BEEN REFLECTED IN THE VAT RETURN FILED BY THE COMPANY. COPIES OF FORM NO.XXXVIII OF THE DEPARTMENT OF COMMERCIAL TAXES WH ICH ARE TO ACCOMPANY EACH CONSIGNMENT OF GOODS THAT ENTERS UP FROM OUTSIDE TH E STATE WERE SUBMITTED AND IT WAS STATED THAT THESE FORMS, INTER ALIA , CONTAIN DETAILS OF THE TRANSPORTER, TRUCK NO., NA ME OF THE DRIVER, ADDRESS OF THE DRIVER AND EVEN HIS LICE NCE NO. THE SELLERS OF THE GOODS WERE INDICATED IN THESE FORMS. IT WAS SUBMITTED THAT TH E COPY OF THE FORM-C WHICH IS ISSUED BY THE ACIT, COMMERCIAL TAXES, GHAZIABAD, WAS ISSUE D BY THE ASSESSEE COMPANY TO THE SELLER. THE COPY OF THE UP VAT RETURN FILED BY THE ASSESSEE COMPANY WHICH CLEARLY SHOWS THE MATERIAL SUPPLIED BY HIS SUPPLIER WAS ALSO SUBMITTED. SO FAR AS THE REPORT OF THE INSPECTOR IS CONCERNED, IT WAS SUBMIT TED THAT THE ASSESSEE HAS ALREADY FILED THE NECESSARY EVIDENCE TO ESTABLISH THE GENUI NENESS OF THE PURCHASES. THE ASSESSEE FURTHER SUBMITTED THE DETAILS OF THE LAST PURCHASES MADE BY IT FROM THE FOUR PARTIES IN QUESTION. IT WAS ARGUED THAT THE SEARCH WAS CONDUCTED AT THE PREMISES OF THE ITA NO.6599/DEL/2014 6 ASSESSEE IN JULY, 2011 AND IT IS POSSIBLE THAT WHEN THE INSPECTOR VISITED THE PARTIES DURING THE POST SEARCH PROCEEDINGS, THE PARTIES WER E NOT AVAILABLE AT THE ABOVE ADDRESS AS THEY HAD ALREADY DISCONTINUED THEIR BUSINESS. T HE DECISION OF THE MUMBAI BENCH IN THE CASE OF DCIT VS. SHRI RAJEEV G. KALATHIL, VIDE ITA NO.6727/ MUM/2012, ORDER DATED 20.08.2014 WAS RELIED UPON. VARIOUS OTHER DECISIONS WERE ALSO BROUGHT TO THE NOTICE OF THE CIT(A). 7. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- 4.4.12 I HAVE CONSIDERED THE SUBMISSIONS OF THE A R AND THE ASSESSMENT ORDER. THE AO HAS NOT REFERRED TO ANY SEIZED DOCUMENTS ON THE BASIS OF WHICH ANY ADVERSE CONCLUSION COULD HAVE BEEN ARRIVED AT IN RE SPECT OF THE SAID 4 SUPPLIERS. THE MAIN REASON FOR HOLDING THE PURCHASES AS BOGUS, IS THE NON-AVAILABILITY OF THE SUPPLIERS AT THE GIVEN ADDRESSES. THERE IS NO FINDI NG THAT THE ASSESSEE DID NOT MAKE THE PAYMENTS NOR THAT ANY PAYMENTS HAVE BEEN M ADE OTHERWISE THAN THROUGH BANKING CHANNELS. THERE IS ALSO NO FINDING THAT THERE WAS NO MOVEMENT OF GOODS. THERE IS ALSO NO FINDING THAT THE RAW MAT ERIALS SUPPOSED TO HAVE BEEN PURCHASED FROM THESE 4 PARTIES HAVE NOT BEEN UTILIZ ED IN THE MANUFACTURING PROCESS. 4.4.13 THE APPELLANT HAS SUBSTANTIATED THE PURCHASES BY PR OVIDING THE DOCUMENTS SUCH AS PURCHASE INVOICES, COPY OF THE LE DGER ACCOUNTS, EVIDENCES FOR HAVING MADE PAYMENTS THROUGH BANKING CHANNELS, C FO RM ISSUED TO THE SUPPLIERS, COPY OF TH E VAT RETURN DULY REFLECTING THE SAID PURCHASES. AP PELLANT HAS ALSO SUBMITTED THE COPIES OF FORM XXXVIII OF DE PARTMENT OF COMMERCIAL TAXES WHICH ACCOMPANIES EACH CONSIGNMENT OF GOODS T HAT ENTER UTTAR PRADESH FROM OUTSIDE THE STATE. THESE FORMS CONTAIN MANY OT HER DETAILS SUCH AS NAME OF THE SELLER OF GOODS DETAILS OF THE TRANSPORTER, TRU CK NO., THE NAME OF THE DRIVER, THE ADDRESSES OF THE DRIVER AND EVEN HIS LICENSE NO ETC . THERE IS NO FINDING OF THE AO THAT THESE ARE BOGUS DETAILS. 4.4.14 WHEN THE APPELLANT FURNISHES THE DOCUMENTS OF THE N ATURE DESCRIBED IN THE PREVIOUS PARAGRAPHS, THE INITIAL BURDEN CAST UP ON HIM TO PROVE THE PURCHASES GETS DISCHARGED. THE BUYER OF GOODS IS REQUIRED TO KEEP COPY OF INVOICES AND PAYMENT DETAILS TO SHOW THAT HE HAS INCURRED EXPEND ITURE BY WAY OF PURCHASE OF GOODS. IN THE PRESENT CASE, THERE IS NO DISPUTE THA T THE APPELLANT WAS HAVING ALL THE NECESSARY DOCUMENTS INCLUDING DOCUMENTS TO BE S UBMITTED TO THE COMMERCIAL ITA NO.6599/DEL/2014 7 TAX AUTHORITIES. THE AO HAS DISALLOWED THE PURCHASE S MERELY ON THE GROUND THAT THE SUPPLIERS WERE NOT TRACEABLE AT THE GIVEN ADDRE SSES. SUCH AN ACTION OF THE AO CANNOT BE SUSTAINED. NON-AVAILABILITY OF THE SUPPLI ERS AT THE GIVEN ADDRESSES COULD BE FOR SEVERAL REASONS INCLUDING SHIFTING OF THEIR PREMISES OR CLOSING DOWN OF THE BUSINESS. AS SUCH, THERE IS NO REQUIREMENT U NDER THE LAW THAT THE BUYER OF GOODS SHOULD CONTINUE TO KEEP TRACK OF THE SELLERS WHEREABOUTS. HOWEVER, IN THE PRESENT CASE THERE ARE MANY EVIDENCES SUCH AS PAYME NTS MADE THROUGH BANKING CHANNELS, REFLECTION OF PURCHASES IN THE VAT RETURN S FILED BEFORE THE COMMERCIAL TAX AUTHORITIES AND FORM XXXVIII CONTAINING SEVERAL DETAILS INCLUDING OF THE TRANSPORTER TRUCK NO. ETC. WHICH SUPPORT APPELLANT S VERSION. THERE IS NO FINDING THAT ANY OF THE DETAILS CONTAINED IN ANY OF THESE F ORMS ARE BOGUS. THERE IS ALSO NO EVIDENCE OR ALLEGATION EVEN THAT THE PAYMENTS MADE BY THE ASSESSEE HAVE BEEN RECEIVED BACK BY HIM. THERE IS NO FINDING THAT THE GOODS WERE NOT USED IN THE MANUFACTURING ACTIVITY. IN THIS KIND OF SCENARIO IT CAN ONLY BE SAID THAT THE DISALLOWANCE HAS BEEN MADE ONLY ON THE BASIS OF SUS PICION ARISING OUT OF NON- TRACEABILITY OF THE SUPPLIERS AT THE GIVEN ADDRESSE S. HOWEVER, SUCH SUSPICION ALONE CANNOT BE A VALID BASIS FOR MAKING DISALLOWAN CES. 4.4.15 THE JUDICIAL OPINION IS UNIFORMLY IN FAVOUR OF THE APPELLANT AS REGARDS THE ONUS CAST UPON THE ASSESSEE IN RESPECT OF PURCH ASES. THE ASSESSEE CANNOT BE ASKED TO PRODUCE THE SUPPLIER OF GOODS. THE SUPPLIE R IS DULY REGISTERED WITH THE COMMERCIAL TAXES DEPARTMENT. WITHOUT ADVERSE EVIDEN CES IN THE DOCUMENTS SUBMITTED OR THE AFFAIRS CONDUCTED BY THE ASSESSEE, SUCH ACTION CANNOT BE RESORTED TO. FURTHER, WHEN THERE IS NO FINDING THAT THE MATE RIAL PURCHASED HAS NOT BEEN UTILIZED IN THE PRODUCTION PROCESS, THE AO CANNOT D OUBT THE PURCHASES DULY ACCOUNTED IN THE AUDITED BOOKS OF WITH SUPPORTING D OCUMENTS. THE AO HAS MISUNDERSTOOD THE REQUIREMENTS OF LAW CAST UPON THE ASSESSEE IN CASE OF PURCHASE OF GOODS. THE AO HAS ASKED THE ASSESSEE TO PROVE TH E IDENTITY, GENUINE NESS AND CREDIT WORTHINESS OF THESE SUPPLIERS (3 RD LINE OF 2 ND PARA ON PAGE 4 OF THE ASSESSMENT ORDER) AS IF IT IS A CASE OF CASH CREDIT S OR UNSECURED LOAN. 4.4.16 THE NON-AVAILABILITY OF A PARTY AT THE GIVEN ADDRES SES COULD BE ONE OF THE GROUNDS FOR INITIATION OF INVESTIGATION. THE TRANSA CTION COULD BE FINALLY HELD AS BOGUS ONLY AFTER MATERIAL FACTS DISPROVING THE CONT ENTS OF THE DOCUMENTS ETC. ARE ESTABLISHED. IN THE PRESENT CASE, AO HAS FAILED TO BRING ON RECORD ANY MATERIAL FACTS DISPROVING THE FACTS SUBMITTED BY THE ASSESSE E. THE INITIAL ONUS HAD BEEN DULY DISCHARGED BY THE ASSESSEE BY SUBMITTING DULY AUDITED BOOKS OF ACCOUNTS AND VARIOUS DOCUMENTS. IT WAS FOR THE AO, TO HAVE B ROUGHT ON RECORD ANY EVIDENCES TO DISPROVE THE CONTENTS OF THE BOOKS OF ACCOUNTS AND DOCUMENTS. FAILURE OF THE ASSESSEE TO PRODUCE THE PARTIES FOR VERIFICATION OR MAKING IMMEDIATE PAYMENTS CANT BE GROUNDS FOR MAKING DISA LLOWANCES. THEY COULD ONLY LEAD TO A SUSPICION THAT THE PURCHASES COULD B E BOGUS. BUT NOTHING MORE. HOWEVER, SUSPICION CANNOT BE THE SOLE GROUND FOR DI SALLOWING THE PURCHASES. HENCE THE DISALLOWANCE OF PURCHASES IS HEREBY DELET ED. GROUND ON THE ISSUE IS ALLOWED. ITA NO.6599/DEL/2014 8 8. SO FAR AS THE SALARY TO THE SISTER OF THE ASSESS EE IS CONCERNED, IT WAS ARGUED THAT THE ASSESSING OFFICER HAD BEEN DULY INFORMED THAT S MT. SHIBANI KHOSLA WAS LOOKING AFTER THE ROUTINE OFFICE WORK AND WAS EMPLOYED AS A DMINISTRATIVE OFFICER. AS ON THE DATE OF RECORDING OF THE STATEMENT U/S 131, SHE HAD ALREADY LEFT THE SERVICE FOR MORE THAN SIX MONTHS. FURTHER, THE ASSESSEE HAD DULY DED UCTED RS.21,000/- AS TDS FROM THE PAYMENTS MADE TO HER AND HAD ISSUED FORM NO.16 WHIC H IS PART OF HER RETURN OF INCOME FILED BY HER. IT WAS ARGUED THAT BESIDES HA VING SALARY INCOME, SHE WAS ALSO HAVING RENTAL INCOME, INCOME UNDER THE HEAD CAPITA L GAINS AND INCOME FROM OTHER SOURCES. SHE DECLARED INCOME OF RS.16,31,215/- WHI CH ATTRACTS THE SAME RATE OF TAX AT WHICH THE ASSESSEE WAS BEING TAXED AND, THEREFORE, THERE WAS NO LOSS OF REVENUE AND THERE WAS NO TAX PLANNING AS SUCH IN THE PAYMENTS M ADE TO SMT. SHIBANI KHOSLA. RELYING ON VARIOUS DECISIONS, IT WAS SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS INCORRECT. 9. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD.CIT(A) GAVE PART RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER:- 4.3.6 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR AND THE ASSESSMENT ORDER. THE CORRECT TIME TO ELICIT THE TRUE FACTS BEHIND AN Y TRANSACTION WOULD BE WHEN A PERSON IS CONTACTED AND STATEMENT RECORDED BEFORE A NYBODY TUTORS HIM OR HER. IN THE PRESENT CASE STATEMENT U/S 131 HAS BEEN RECORDE D WHEREIN SMT. SHIBANI KHOSLA WAS UNABLE TO GIVE SIMPLE DETAILS SUCH AS WH EN SHE HAD JOINED THE SERVICE. THE A.O. HAS ALSO NOTED THAT FOR THE JOBS SUCH AS MAINTENANCE OF OFFICE BLOCK, GARDEN AND HOUSEKEEPING OF THE OFFICE, NO ON E WOULD PAY RS. 60,000/- PER MONTH. DURING THE ASSESSMENT PROCEEDINGS ALSO, AS S UCH, NO PARTICULAR EVIDENCES WERE FILED NOR ANY DETAILS OF DUTIES WERE EXPLAINED BY THE APPELLANT TO ESTABLISH THAT SMT. SHIBANI KHOSLA HAD REALLY WORKED AS ADMIN ISTRATIVE OFFICER IN THE COMPANY. FURTHER, SMT. SHIBANI KHOSLA IS A BLOOD RE LATIVE (DAUGHTER) OF THE MD OF THE APPELLANT COMPANY. THEREFORE, THERE IS A HIG HER DEGREE OF ONUS CAST UPON THE ASSESSEE TO ESTABLISH THAT THE PAYMENTS TO HER WERE MADE WHOLLY AND ITA NO.6599/DEL/2014 9 EXCLUSIVELY IN RETURN FOR THE SERVICES RENDERED BY HER. IN THIS REGARD IT MUST BE HELD THAT THE APPELLANT HAS NOT BEEN ABLE TO SUFFIC IENTLY ESTABLISH THAT THE ENTIRE AMOUNT PAID TO SMT. SHIBANI KHOSLA WAS IN RETURN FO R THE SERVICES RENDERED BY HER OR THAT IT WAS NOT IN EXCESS FOR THE SERVICES R ENDERED BY HER. 4.3.7 HOWEVER, I DO NOT FIND MERIT IN AOS ACTION IN COMPLETELY DISBELIEVING THAT SMT. SHIBANI KHOSLA WAS EMPLOYED BY THE COMPAN Y AND THAT THE PAYMENTS MADE TO HER WERE RELATED TO THE BUSINESS OF THE COM PANY. IT IS NOT UNUSUAL FOR A DAUGHTER OF MD TO BE PAID SALARY. IT IS ALSO NOT UN USUAL THAT NO BODY, IN PARTICULAR, WAS REPORTING TO HER. IT IS NOTED THAT BEING A RELATED PARTY TRANSACTION THE ONUS WAS ON THE APPELLANT TO HAVE BROUGHT ON RE CORD SUFFICIENT EVIDENCES TO ESTABLISH THE JUSTIFICATION FOR MAKING SUCH LARGE S UM OF SALARY PAYMENT TO THE DAUGHTER OF THE MD OF THE APPELLANT COMPANY. AGAIN THE AO HAS NOT BEEN ABLE TO ADDUCE SUFFICIENT EVIDENCES TO DISPROVE THAT MS. SHIBANI KHOSLA ASSISTED THE MD OF THE COMPANY. AO HAS NOTED THAT THE KIND OF WORK CLAIMED TO HAVE BEEN RENDERED BY MRS. KHOSLA COULD HAVE FETCHED HER RS. 3000 - 5000/- PER MONTH IN AN INDUSTRIAL AREA OF GAZIABAD. I, HOWEVER, CONSIDE R, THE SAME TO BE NOT BASED ON ANY MATERIAL EVIDENCE. THE PERSON IS DAUGHTER OF TH E MD AND HER VERY PRESENCE COULD BE A BIG BENEFIT TO THE MD IN LOOKING AFTER T HE AFFAIRS, AS HE CAN RELY ON HER /TRUST HER BEING HIS OWN DAUGHTER. CONSIDERING ALL THE FACTORS, I AM OF THE VIEW THAT ENDS OF JUSTICE WOULD BE MET IF PAYMENT OF SAL ARY AT THE RATE OF RS. 15,000/- PER MONTH IS ALLOWED FOR THE KIND OF JOB SHE MIGHT HAVE DONE AND THE BALANCE IS DISALLOWED. IN THE RESULT ASSESSEE GETS A RELIEF OF RS. 1,80,000/-. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW A ND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2,79,80,857/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF PURCHASES TREATED AS BOGUS NATURE. 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 1,80,000/- OUT OF TOTAL ADDITION OF RS. 4,20,000/- MADE BY AO ON ACCOUNT OF DISALLOWANCE OF SALARY. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL GR OUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEA L. ITA NO.6599/DEL/2014 10 11. THE LD. DR STRONGLY OPPOSED THE ORDER OF THE CI T(A) DELETING THE ADDITION ON ACCOUNT OF BOGUS PURCHASE AND SUBSTANTIAL RELIEF IN THE SALARY PAID TO THE RELATED PARTY. SO FAR AS THE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASE IS CONCERNED, HE SUBMITTED THAT ENQU IRIES REGARDING PARTIES WERE MADE IN POST SEARCH ENQUIRIES AND NONE OF THE PARTIES WE RE FOUND AT THE ADDRESS PROVIDED BY THE ASSESSEE. THIS FACT WAS ALSO CONFRONTED TO THE ASSESSEE ON 4 TH NOVEMBER 2011 ITSELF WHICH IS WITHIN EIGHT MONTHS OF THE CLOSE OF THE FINANCIAL YEAR. STILL THESE PARTIES WERE NOT TRACEABLE AND NO INFORMATION REGARDING THE M COULD BE FOUND ON VISITING THE PREMISES BY THE WARD INSPECTOR. REFERRING TO PAGE 4 AND 5 OF THE ASSESSMENT ORDER, HE SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, ENQUI RIES WERE AGAIN CONDUCTED. HOWEVER, THE PREMISES OF VARDHAMAN TRADING COMPANY COULD NOT BE LOCATED WHILE IN THE CASE OF SHIVAM TRADERS, THE LOCAL ENQUIRY RESUL TED IN THE INFORMATION THAT NO SUCH CONCERN EXISTED THERE. HE SUBMITTED THAT THIS INFO RMATION WAS GIVEN BY A PERSON WHO HAS BEEN RUNNING A STATIONERY SHOP IN THAT AREA FOR THE LAST 11-12 YEARS. SIMILAR INFORMATION WAS GATHERED IN RESPECT OF AMIT TRADING CO. SO FAR AS HARI OM TRADER IS CONCERNED, THEY STAYED THERE ONLY FOR ONE MONTH WIT HOUT DOING ANY ACTIVITY. HE SUBMITTED THAT ALTHOUGH THE ASSESSEE IN ITS PAPER B OOK ON PAGES 30-48 HAS ENCLOSED LEDGER ACCOUNTS OF THESE PARTIES, SAMPLE BILLS AND VAT REGISTRATION, HOWEVER, IT DOES NOT CONTAIN VAT REGISTRATION OF HARI OM TRADERS. O NLY THE TIN IS MENTIONED IN THE COPY OF THE BILL ENCLOSED. HE SUBMITTED THAT THE P RINT OUT FROM THE WEBSITE OF THE GOVERNMENT OF NCT, DELHI OF THE BILLS SHOWS THE STA TUS OF THE SAID CONCERN AS CANCELLED. SO FAR AS THE OTHER THREE CONCERNS AR E CONCERNED, HE SUBMITTED THAT THE ITA NO.6599/DEL/2014 11 REGISTRATION STATUS SHOWS AS CANCELLED. FURTHER, THESE CONCERNS HAVE BEEN DEFAULTERS IN FILING THEIR QUARTERLY RETURNS. THESE THREE CON CERNS WERE REGISTERED IN A.Y. 2010-11 I.E., JUST A YEAR BEFORE. ALL THESE FACTS CONFIRM THAT THE CONCERNS WERE NOT GENUINE CONCERNS. HE ACCORDINGLY, SUBMITTED THAT MERELY BEC AUSE THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL THE SAME DOES NOT ESTA BLISH THE GENUINENESS OF PURCHASES. 12. REFERRING TO THE DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT, REPORTED IN 83 TTJ 904 (AHM EDABAD) HE SUBMITTED THAT THE SLP FILED BY THE ASSESSEE WAS DISMISSED AND THE DEC ISION OF THE HON'BLE GUJARAT HIGH COURT WAS CONFIRMED AND THE ENTIRE UNDISCLOSED INCO ME GENERATED OUT OF BOGUS TRANSACTION WAS ADDED TO THE TOTAL INCOME. HE ALSO RELIED ON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS LTD. VS. ACIT REPORTED IN 58 ITD 428 . SO FAR AS THE RELIEF GRANTED ON ACCOUNT OF DISAL LOWANCE OF SALARIES IS CONCERNED, HE SUBMITTED THAT THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN DISALLOWING THE WHOLE AMOUNT AND THE CIT(A) WAS NOT JUSTIFIED I N DELETING AN AMOUNT OF RS.1,80,000/- OUT OF THE ADDITION OF RS.4,20,000/- MADE BY THE ASSESSING OFFICER. 13. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSING OFF ICER HAS NOT MADE ANY INDEPENDENT ENQUIRIES BUT HEAVILY RELIED ON THE FINDINGS OF THE INVESTIGATION WING. HE SUBMITTED THAT IT IS AN ADMITTED FACT THAT A SEARCH WAS CONDU CTED WHICH IS A SERIOUS INVASION IN THE PRIVACY OF AN ASSESSEE AND, THEREFORE, ASSESSME NT IN SUCH TYPE OF CASES HAS TO BE ITA NO.6599/DEL/2014 12 MADE STRICTLY ON THE BASIS OF MATERIAL GATHERED DUR ING THE COURSE OF SEARCH. HOWEVER, IN THE INSTANT CASE, NO EVIDENCE WHATSOEVER WAS FOU ND DURING THE COURSE OF SEARCH WHICH WOULD SHOW THAT THE ASSESSEE HAS RECEIVED THE AMOUNT OF PURCHASES FROM THE RESPECTIVE BUYERS BY WAY OF ANY UNDER HAND DEALING SETTLEMENTS. HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT REFERRED TO ANY SEIZE D DOCUMENTS ON THE BASIS OF WHICH ANY ADVERSE CONCLUSION COULD HAVE BEEN ARRIVED AT I N RESPECT OF THE SAID FOUR SUPPLIERS. HE SUBMITTED THAT ALL THESE PAYMENTS WERE MADE THRO UGH BANKING CHANNEL. HOWEVER, THE ASSESSING OFFICER HAS DISALLOWED THE PURCHASES MAINLY ON THE GROUND OF NON- AVAILABILITY OF THE SUPPLIERS AT THE GIVEN ADDRESSE S. HOWEVER, THERE IS NO FINDING BY THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT MAK E THE PAYMENTS NOR THAT THERE WAS NO MOVEMENT OF GOODS. THERE IS ALSO NO FINDING THA T THE RAW MATERIALS SUPPOSED TO HAVE BEEN PURCHASED FROM THESE FOUR PARTIES HAVE NO T BEEN UTILIZED IN THE MANUFACTURING PROCESS. SINCE THE ASSESSING OFFICER HAS ACCEPTED THE SALES AND NET RESULT REFLECTED BY THE ASSESSEE IN ITS AUDITED BAL ANCE SHEETS, THEREFORE, THE ADDITION COULD NOT HAVE BEEN MADE ON ACCOUNT OF BOGUS PURCHA SES. 14. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSE SSEE HAS SUBSTANTIATED THE PURCHASES BY PROVIDING THE DOCUMENTS SUCH AS PURCHA SE INVOICES, COPY OF THE LEDGER ACCOUNTS, EVIDENCES FOR HAVING MADE PAYMENTS THROUG H BANKING CHANNELS, C FORM ISSUED TO THE SUPPLIERS, COPY OF VAT RETURN DULY RE FLECTING THE SAID PURCHASES, ETC. THE ASSESSEE HAS ALSO SUBMITTED THE COPIES OF FORM NO.XXXVIII OF THE DEPARTMENT OF COMMERCIAL TAXES WHICH ACCOMPANIES EACH CONSIGNMENT OF GOODS THAT ENTERS UTTAR ITA NO.6599/DEL/2014 13 PRADESH FROM OUTSIDE THE STATE. THESE FORMS CONTAI N MANY OTHER DETAILS SUCH AS NAME OF THE SELLER OF THE GOODS, DETAILS OF THE TRANSPOR TER, TRUCK NUMBER, THE NAME OF THE DRIVER AND THE ADDRESS OF THE DRIVER AND EVEN THE L ICENCE NO. OF THE DRIVER, ETC. THERE IS NEITHER ANY FINDING OF THE INVESTIGATION WING NOR T HAT OF THE ASSESSING OFFICER THAT THE DETAILS FURNISHED BY THE ASSESSEE ARE BOGUS. THUS, THE ASSESSEE, IN THE INSTANT CASE, HAS DISCHARGED THE INITIAL BURDEN CAST ON IT TO PROVE T HE GENUINENESS OF THE PURCHASES. THE BUYER OF GOODS IS REQUIRED TO KEEP COPY OF INVOICES AND PAYMENT DETAILS TO SHOW THAT IT HAS INCURRED THE EXPENDITURE BY WAY OF PURCHASE OF GOODS. THEREFORE, MERELY BECAUSE THE SUPPLIER WAS NOT TRACEABLE AT THE GIVEN ADDRESS THE SAME CANNOT BE A GROUND TO MAKE THE ADDITION IN THE FACTS OF THE PRESENT CASE ESPECIALLY WHEN THE ASSESSING OFFICER HAD MADE HIS CONCLUSION MERELY ON THE FINDI NG OF THE INVESTIGATION WING THAT THE SUPPLIER WAS NOT TRACEABLE. HE SUBMITTED THAT T HERE MAY BE HUNDREDS OF REASONS FOR THE NON-AVAILABILITY OF THE SELLERS AT THE GIVEN AD DRESS. FURTHER, THERE IS NO REQUIREMENT UNDER THE LAW THAT THE BUYER OF GOODS SHOULD CONTIN UE TO KEEP TRACK OF THE SELLERS WHEREABOUTS. SINCE THE ASSESSEE, IN THE INSTANT CA SE, HAS DISCHARGED THE ONUS CAST ON IT BY PROVING THE PURCHASE OF GOODS AND SINCE SUCH MAT ERIALS PURCHASED WERE CONSUMED BY THE ASSESSEE, THE PAYMENTS HAVING BEEN MADE THRO UGH BANKING CHANNELS AND THE BOOKS OF THE ASSESSEE WERE AUDITED AND NOTHING ADVE RSE WAS FOUND DURING THE COURSE OF SEARCH THAT THE MONEY HAS COME TO THE ASSESSEE I NDIRECTLY OR DIRECTLY, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUST IFIED AND THE CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION. ITA NO.6599/DEL/2014 14 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CON SIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING OFFICER IN THE IN STANT CASE MADE ADDITION OF RS.2,79,80,857/- ON ACCOUNT OF BOGUS PURCHASES FROM THE FOUR PARTIES, THE DETAILS OF WHICH ARE GIVEN AT PARA 3 OF THIS ORDER ON THE GROU ND THAT THOSE CONCERNS WERE NOT EXISTING AT THE GIVEN ADDRESS AND THE ASSESSEE FAIL ED TO PRODUCE THE PARTIES DESPITE BEING ASKED. WE FIND THE LD.CIT(A) DELETED THE ADD ITION, THE REASONS FOR WHICH ARE REPRODUCED IN THE PRECEDING PARAGRAPHS. IT IS THE S UBMISSION OF THE LD. DR THAT WHEN THE CONCERNED PARTIES WERE NOT AVAILABLE AT THE GIV EN ADDRESS AS FOUND BY THE DEPARTMENT DURING THE POST SEARCH ENQUIRIES AND SIN CE THE ASSESSEE FAILED TO PRODUCE THESE PARTIES TO PROVE THEIR IDENTITY, CREDIT WORTH INESS AND GENUINENESS, THEREFORE, THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N SO MADE. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT MERELY BECAUS E THOSE PARTIES WERE NOT TRACEABLE AT THE GIVEN ADDRESS, ADDITION CANNOT BE MADE ON ACCOU NT OF SUCH PURCHASES, ESPECIALLY WHEN SUCH PAYMENTS WERE MADE THROUGH BANKING CHANNE LS AND THE ASSESSEE HAS SUBSTANTIATED THE PURCHASE BY PROVIDING THE DOCUMEN TS SUCH AS PURCHASE INVOICES, COPY OF THE LEDGER ACCOUNTS, EVIDENCES FOR HAVING M ADE PAYMENTS THROUGH BANKING CHANNELS, C FORM ISSUED TO THE SUPPLIERS, COPY OF V AT RETURN DULY REFLECTING THE SAID PURCHASES, COPY OF FORM NO.XXXVIII ISSUED BY THE CO MMERCIAL TAX DEPARTMENT CONTAINING THE NAME OF THE SELLER OF THE GOODS, DET AILS OF THE TRANSPORTER, TRUCK NUMBER, NAME AND ADDRESS AND LICENCE NUMBER OF THE DRIVER E TC. THERE IS ALSO NO FINDING THAT ITA NO.6599/DEL/2014 15 THE RAW MATERIALS PURCHASED FROM THE ABOVE PARTIES HAVE NOT BEEN UTILIZED IN THE MANUFACTURING PROCESS AND SALES HAVE BEEN ACCEPTED BY THE REVENUE. 16. WE FIND MERIT IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. IT IS AN ADMITTED FACT THAT DURING THE COURSE OF SEARCH N OTHING ADVERSE WAS FOUND FROM THE PREMISES OF THE ASSESSEE REGARDING THE PURCHASES MA DE FROM THE FOUR PARTIES CONCERNED. ONLY DURING POST SEARCH ENQUIRY IT WAS FOUND THAT THOSE FOUR PARTIES ARE NOT AVAILABLE AT THE GIVEN ADDRESS. HOWEVER, IT IS A FACT THAT THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL AND THE ASSESSEE HAD S UBSTANTIATED THE PURCHASES BY PROVIDING DOCUMENTS SUCH AS PURCHASE INVOICES, COPY OF THE LEDGER ACCOUNTS, EVIDENCES FOR HAVING MADE PAYMENTS THROUGH BANKING CHANNELS, C FORM ISSUED TO THE SUPPLIERS, COPY OF VAT RETURN DULY REFLECTING THE S AID PURCHASES, ETC. THE ASSESSEE HAS ALSO SUBMITTED THE COPIES OF FORM NO.XXXVIII OF THE DEPARTMENT OF COMMERCIAL TAXES WHICH ACCOMPANIES DETAILS OF EACH CONSIGNMENT OF GOODS THAT ENTERS UTTAR PRADESH FROM OUTSIDE THE STATE. NONE OF THESE DOCUM ENTS HAVE BEEN PROVED TO BE FALSE OR UNTRUE AND THUS, THE INITIAL BURDEN CAST ON THE ASSESSEE WAS DULY DISCHARGED. NO DOUBT, THOSE FOUR PARTIES WERE NOT AVAILABLE AT THE GIVEN ADDRESS AT THE TIME OF ENQUIRY BY THE INSPECTOR. HOWEVER, IS IT IS ALSO AN ADMITTE D FACT THAT THE ENQUIRIES WERE CONDUCTED AT A LATER STAGE AND THERE MAY BE A NUMBE R OF REASONS FOR THOSE PARTIES TO SHIFT THEIR PLACE OF BUSINESS. FROM THE SUBMISSION S MADE BY THE LD. DR, WE FIND THE NAMES OF THOSE PARTIES WERE EXISTING AT THE WEBSITE OF THE GOVERNMENT OF NCT, DELHI EARLIER, BUT, AT THE RELEVANT TIME OF ENQUIRY, THE STATUS OF THE CONCERNS WAS SHOWN AS CANCELLED. THIS INDICATES THAT AT SOME POINT OF T IME, THESE CONCERNS WERE VERY MUCH ITA NO.6599/DEL/2014 16 AVAILABLE IN THE WEBSITE OF GOVERNMENT OF DELHI AND , THEREFORE, IT CANNOT BE SAID THAT THESE FIRMS ARE BOGUS WHEN THE ASSESSEE PURCHASED T HE GOODS AND MADE THE PAYMENTS THROUGH BANKING CHANNEL AND THE ASSESSEE SUBSTANTIA TED ALL THE NECESSARY DOCUMENTS WHICH IS REQUIRED TO BE KEPT SUCH AS PURCHASE INVOI CES, LEDGER ACCOUNTS, C FORM ISSUED TO THE SUPPLIERS, FORM NO.XXXVIII OF THE DEPARTMENT OF COMMERCIAL TAXES WHICH ACCOMPANIES DETAILS OF EACH CONSIGNMENT OF GOODS TH AT ENTERS UTTAR PRADESH FROM OUTSIDE THE STATE. IN OUR OPINION, THE ASSESSEE IN THE INSTANT CASE HAS DISCHARGED THE INITIAL ONUS CAST ON IT. UNDER THESE CIRCUMSTANCES AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE CIT(A) WHILE DELETING THE ADDITION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). SO FAR AS THE DECISION IN THE CASE OF N.K. PROTEINS LTD., IS CONCERNED, IN THAT CASE, DURING THE COURSE OF SEARC H PROCEEDINGS AT THE OFFICE PREMISES OF THE ASSESSEE BLANK SIGNED CHEQUE BOOKS AND VOUCH ERS OF NUMBER OF CONCERNS WERE FOUND. ACCORDINGLY, THE PURCHASES MADE THROUGH THE SE CONCERNS WERE TREATED AS BOGUS PURCHASES BY THE ASSESSING OFFICER AND THE ENTIRE D EPOSITS IN BANK ACCOUNTS OF THESE PARTIES WERE TREATED AS ASSESSEES INCOME ON PROTEC TIVE BASIS. THE TRIBUNAL RESTRICTED THE ADDITION ON ACCOUNT OF SUCH ALLEGED BOGUS PURCH ASES AT 25% OF THE TOTAL PURCHASES AND THE HON'BLE HIGH COURT MODIFIED THE ORDER OF TH E TRIBUNAL AND DIRECTED FOR ADDITION OF THE ENTIRE BOGUS PURCHASES. HOWEVER, I N THE INSTANT CASE, NO SUCH BLANK CHEQUE BOOKS AND VOUCHERS OF THE ALLEGED FOUR CONCE RNS HAVE BEEN FOUND. THEREFORE, THE DECISION IN THE CASE OF N.K. PROTEINS LTD. CANN OT BE APPLIED TO THE FACTS OF THE PRESENT CASE. SIMILARLY, IN THE CASE OF VIJAY PROT EINS LTD., THE PURCHASES WERE MADE THROUGH BROKERS AND SUCH DOCUMENTS RELATING TO THE BROKERS WERE PRODUCED FOR THE FIRST ITA NO.6599/DEL/2014 17 TIME BEFORE THE CIT(A) AND IT WAS ALSO FOUND THAT T HERE WAS CLOSE LINK BETWEEN THE ASSESSEE COMPANY AND ONE MR. P. THEREFORE, THE ABO VE DECISION RELIED ON BY THE LD. DR IS ALSO NOT APPLICABLE TO THE FACTS OF THE PRESE NT CASE. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE CIT(A) DELETING THE ABOVE ADDITION ON ACCOUNT OF THE PURCHASE FROM THE FOUR P ARTIES. ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUND OF APPEAL NO.2 OF THE REVENUE IS DISMISSED. 17. SO FAR AS GROUND NO.3 IS CONCERNED, WE FIND THE ASSESSING OFFICER DISALLOWED THE ENTIRE ADDITION OF RS.4,20,000/- PAID TO SMT. S HIBANI KHOSLA BY INVOKING THE PROVISIONS OF SECTION 40A(2)(B) OF THE IT ACT AND I N APPEAL, THE LD.CIT(A) DELETED THE ADDITION OF RS.1,80,000/-, THE REASONS FOR WHICH HA S ALREADY BEEN GIVEN IN THE PRECEDING PARAGRAPHS. WE FIND FROM THE ORDER OF TH E A.O. THAT SMT. SHIBANI KHOSLA WAS RECEIVING SALARY AND BONUS FROM ASSESSMENT YEAR 2006-07 TO 2010-11 RANGING FROM RS.3,74,000/- DURING FINANCIAL YEAR 2006-07 WH ICH HAS GONE UP TO RS.7,80,000/- IN ASSESSMENT YEAR 2010-11. EVEN IN THE ASSESSMENT ORDER WHILE THE A.O. MENTIONS THAT THE KIND OF WORK RENDERED BY MRS. KHOSLA WOULD HAVE FETCHED HER RS.3000/- TO 5000/- PER MONTH IN AN INDUSTRIAL AREA OF GHAZIABAD . THUS, THE A.O IS NOT SAYING THAT MRS. KHOSLA HAS NOT DONE ANY WORK FOR THE ASSESSEE COMPANY. THEREFORE, HE COULD NOT HAVE DISALLOWED THE ENTIRE SALARY. SINCE THE LD. C IT(A) AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE HAS RESTRICTED RS.1,80,000/- AS AGAINST RS.4,20,000/- DISALLOWED BY THE A.O., WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD.CIT(A) IS JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ACC ORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. ITA NO.6599/DEL/2014 18 18. GROUND OF APPEAL NO.1 BEING GENERAL IN NATURE I S DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 2.12.2018. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 12 TH DECEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI