ACIT, Ghaziabad V. Vijay Kumar Goel, Ghaziabad

ITA 670/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91229 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Bogus purchase; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. GEORGE GEORGE K. , JM ITA NO. 670 /DEL /2013 : ASSTT. YEAR : 2009 - 10 ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE - 2, GHAZIABAD VS VIJAY KUMAR GOEL, PROP. MANKEY LAL JAGDISH PRASAD, 228, HAPUR ROAD, GHAZIABAD (APPELLANT) (RESPONDENT) CO NO. 68/DEL/2013 : ASSTT. YEAR : 2009 - 10 VIJAY KUMAR GOEL, PROP. MANKEY LAL JAGDISH P RASAD, 228, HAPUR ROAD, GHAZIABAD VS ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE - 2, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. ACFPG8289C ASSESSEE BY : SH. AJAY WADHWA , ADV. REVENUE BY : SH. P. DAM KANUNJNA , SR. DR DATE OF HEARING : 04.06 .201 5 DATE OF PRONOUNCEMENT : 17 .06 .2015 ORDER PER N. K. SAINI, AM: THIS APPEAL OF THE DEPARTMENT AND THE CROSS OBJECTION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 23.11.2012 OF LD. CIT(A), GHAZIABAD. 2. IN TH E DEPARTMENTAL APPEAL F OLLOWING GROUNDS HAVE BEEN RAISED: 1. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , DESPITE THE FACTS THAT ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 2 APPELLANT HAS MADE PURCHASE FROM SUCH A DEALER WHOSE PURCHASES HAVE BEEN PROVED BOGUS BY COMME RCIAL TAX OFFICER. 2. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , BEING COST OF MATERIAL PURCHASED PAID THROUGH BANKING CHANNEL ONLY IRRESPECTIVE OF THE FACT THAT THE EXISTENCE OF THE PARTY WAS DOUBTFUL AND TOTAL PAYMENT WAS BEING ROTATED IN VARIOUS ACCOUNTS IN THE NAME OF FICTITIOUS FIRMS. 3 . THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , ON THE GROUND THAT THE TRADING RESULTS AND SALES WERE NOT DISTURBED BY THE AO. 4 . THAT THE LD. CIT(A) H AS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , ON THE GROUNDS THAT THE MATERIAL IN THE POSSESSION OF THE AO WAS NEITHER SUPPLIED TO THE ASSESSEE NOR WAS HE CONFRONTED WITH THE INFORMATION. IT IS A FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDI NGS POINT WISE/QUESTION WISE REPLY WAS SUBMITTED BY THE ASSESSEE ON THE MATERIAL IN THE POSSESSION OF THE AO. 5. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , ON THE BASIS OF DICTUM THAT WHEN THE SALES HAVE BEEN ACCEPTED, PU RCHASES HAVE TO BE ACCEPTED ALSO. 6 . THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,39,70,618/ - , EVEN WHEN HE HIMSELF HAS ACCEPTED THAT THE POSSIBILITY OF APPELLANT BUYING MATERIAL FROM THE PARTIES OTHER THAN M/S RIDDHI SIDDHI ENTERPRISES CANNOT BE RULED OUT. ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 3 7 . THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT AO HAS NOT DISTURBED THE TRADING RESULTS AS DISCLOSED BY THE ASSESSEE, IGNORING THE FACT THAT THE DEFECTS EXPOSED AND ADDITION MADE DO CONSTITUTE DISTURBING THE TRADING RESULTS. 8. THE REFORE, THE ORDER OF CIT(A) BE CANCELLED OR SET - ASIDE AND THE ORDER OF THE AO MAY BE RESTORED. 9. THE APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 3. THE GROUNDS RAISED IN ASSESSEE S CROSS OBJECTION ARE AS FOLLOWS: 1. THAT ASSESSEE FILED THE RETURN SHOWING INCOME RS. 9,65,460/ - WHILE THE LD. ASSESSING OFFICER MADE THE ADDITION OF RS. 1,39,70,618/ - WITHOUT ANY PROPER VERIFICATION WHICH WAS WRONG, ILLEGAL AND AGAINST FACTS OF THE CASE. 2. THAT ASSESSEE FILED THE APPEA L BEFORE CIT(A) GHAZIABAD WHO AFTER HEARING THE CASE PARTLY ALLOWED THE APPEAL AND ADDITION WAS REDUCED FROM RS. 1,39,70,618/ - TO RS. 6,98,530/ - WHICH WAS ALSO WRONG AND OUGHT TO BE DELETED. 3. THAT LD. ASSESSING OFFICER RELIED UPON THE FALSE STATEMENT OF PARTY, M/S RIDDHI SIDDHI ENTERPRISES WHICH WAS LATER ON REVERTED BACK BY THE SAME PARTY BY FILING AN AFFIDAVIT WITH LD. ASSESSING OFFICER BUT LD. ASSESSING OFFICER DENIED THE AFFIDAVIT AND DID NOT ACCEPTED THE SAME. ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 4 4. FROM THE ABOVE GROUNDS IT WOULD BE CLEAR THAT THE GRIEVANCE OF THE DEPARTMENT AND THE ASSESSEE RELATES TO THE DELETION/SUSTENANCE OF THE ADDITIONS MADE BY THE AO ON ACCOUNT OF PURCHASES. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE AS SESSEE WAS ENGAGED IN THE WHOLESALE OF IRON & STEEL BUSIN ESS AND FILED THE RETURN OF INCOME ON 29.09.2009 DECLARING INCOME OF RS. 9,65,460/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE WAS HAVING THE TOTAL TURNOVER OF RS. 23,19,41,31 2/ - AS AGAINST THE TOTAL TURNOVER AT RS. 8,65,18,700/ - IN THE PRECEDING YEAR. HE ALSO NOTED THAT THE G.P. RATE DECLARED BY THE ASSESSEE AT 4.04% WAS BETTER THAN THE G.P. RATE OF THE PRECEDING YEAR AT 3.02% . THE AO NOTED THAT THERE WAS A SLIGHT DECLINE IN N ET PROFIT RATE AT 0.35% AS AGAINST 0.63% IN THE PRECEDING YEAR. THE AO ASKED THE ASSESSEE TO F URNISH THE REASON FOR DECLINE IN NET PROFIT RATE. THE ASSESSEE SUBMITTED THAT THERE WAS CONSIDERABLE INCREASE IN THE SALES AS WELL AS THE G.P. RATE AND THAT THE S LIGHT DECLINE IN THE NET PROFIT RATE WAS DUE TO HEAVY INCREASE IN THE SALES AND THE MARKET FLUCTUATION. THE AO POINTED OUT THAT A NUMBER OF NOTICES SENT TO THE DIFFERENT PAR TIES FROM WHOM, THE ASSESSEE MADE PURCHASES RETURNED UNSERVED. HE ASKED THE ASSESSE E TO EXPLAIN THE REASONS FOR THE ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 5 SAME . IN REPLY, T HE ASSESSEE SUBMITTED THAT IT WAS DUE TO CHANGE IN ADDRESS, HOWEVER THE CONFIRMED COPIES OF ACCOUNT FROM THOSE PARTIES WERE FURNISHED. THE AO OBSERVED THAT THE ASSESSEE MADE PURCHASES FROM M/S RIDDHI SIDDHI ENTERPRISES WHOSE PROPRIETOR GAVE A STATEMENT ON OATH U/S 131(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) SHOWING HIS IGNORANCE ABOUT SALES AND PURCHASES IN THE NAME OF M/S RIDDHI SIDDHI ENTERPRISES AND STATED THAT HE HAS GIVEN ENT RIES TO VARIOUS TRADERS FOR EARNING COMMISSION FOR THE SAME. THE AO ALSO POINTED OUT THAT INFORMATION WAS OBTAINED FROM THE OFFICE OF ASSISTANT COMMISSIONER COMMERCIAL TAX, GHAZIABAD WHO HAD INFORMED THAT REGISTRATION OF M/S RIDDHI SIDDHI ENTERPRISES HAS B EEN CANCELLED , THE PURCHASES OF M/S RIDDHI SIDDHI ENTERPRISES WERE FROM NON - EXISTANT/BOGUS FIRMS AND THAT THE SALES MADE BY THIS CONCERN SHOULD ALSO BE CONSIDERED AS BOGUS. THE AO ASKED THE ASSESSEE TO SUBSTANTIATE AND PROVE THE GENUINENESS OF THE TRANSACT IONS WITH M/S RIDDHI SIDDHI ENTERPRISES. IN RESPONSE THE ASSESSEE SUBMITTED AS UNDER: THAT IN THIS RESPECT, WE CONTRADICT YOUR VERSION REGARDING BOGUS PURCHASE & SALES BY THE ASSESSEE AS PER ARGUMENTS GIVEN BELOW: (A) THAT AS PER YOUR COPIES SUPPLIED FR OM TRADE TAX DEPARTMENT WHERE IT HAS BEEN MENTIONED THAT ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 6 REGISTRATION OF FIRM M/S RIDDHI SIDDHI ENTERPRISES WAS CANCELLED ON 15.05.2008 WHILE ON THE SAME DATE TRADE TAX DEPARTMENT HAS ISSUED A CERTIFICATE OF REGISTRATION AND ALLOTMENT OF TIN 09688807641 EF FECTIVE WITH 15 .05.2008 WHICH IS THE SAME DATE HENCE, IT IS NOT CLEAR THAT WHICH CERTIFICATE IS CORRECT. COPY OF CERTIFICATE UPVAT - XI IS ENCLOSED HEREWITH. (B) THAT AS PER STATEMENT TAKEN ON OATH FROM SH. SURENDRA SHARMA, HE HAD ACCEPTED THAT HE WAS RUNNI NG THE FIRM M/S RIDDHI SIDDHI ENTERPRISES THROUGH HIS AGENT MR. RAVI AND HE HAS FIL ED RETURN WITH TRADE TAX DEPT. SHOWING SALES DURING 2009 - 10 AMOUNTING RS. 28,18,51,946.00 EVEN THOUGH HE HAS NEVER MENTIONED THAT HE DO ES NOT KNOW THE FIRM M/S BANKEY LAL JA GDISH PRASAD NOR HE DENIED THE CONNECTION WITH MR. RAVI WHO WAS LOOKING AFTER HIS BUSINESS (AS PER HIS STATEMENT RECORDED). (C ) THAT OUR ASSESSEE PURCHASE D THE GOODS FROM HIM SIMULTANEOUSLY SOLD THE SAME TO VARIOUS PARTIES DURING THE PERIOD FROM AUGUST 20 08 TO FEBRUARY 2009 ACCORDING TO THE ASSESSEE AND AS PER RECORDS THERE WAS NO BOGUS PURCHASE OR SALES WHICH HAS BEEN CONFIRMED BY THE ASSESSEE AFTER FILING HIS AFFIDAVIT DATED 22.12.2011. (D) THAT ASSESSEE HAS ALSO FILED COPIES OF ALL PURCHASE BILLS FROM M/S RIDDHI SIDDHI ENTERPRISES WHIC H ARE THE EVIDENCE THAT GOODS WERE ACTUALLY PURCHASED AS ON THE BILLS TRUCK NO. AND SELLERS SIGNATURE ARE AVAILABLE WHICH PROVED THAT GOODS HAVE BEEN PURCHASED BY OUR ASSESSEE. ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 7 (E ) THAT ASSESSEE MADE PAYMENT THORUGH PAYEE ACCOUNT CHEQUE ONLY AND HE HAD NO CONCERN THAT SELLER WHERE DEPOSITED THE SAME CHEQUES AND WHAT HE DID OF THAT AMOUNT. (F ) THAT AS PER COPIES OF OATH STATEMENT OF SH. SURENDRA KUMAR SHARMA IT HAS BEEN MENTIONED THAT HIS BANK ACCOUNT IS WITH PUNJAB NATION AL BANK, NAVYUG MARKET BUT COPY FOR THE SAME HAS NOT BEEN OBTAINED BY NEITHER YOU NOR THE SAME HAS BEEN SUPPLIED TO US, BUT YOU HAVE OBTAINED COPIES OF BANK ACCOUNT FROM UNION BANK OF INDIA & MAHAMEDHA CO - OPERATIVE (P) LTD. (G ) THAT AS ASSESSEE HAS NOT AC CEPT ED THROUGH HIS AFFIDAVIT THAT HE HAS PURCHASED THE GOODS FROM M/S RIDDHI SIDDHI ENTERPRISES IN ACTUAL SO THERE IS NO QUESTION OF BOGUS PURCHASE FROM HIM. (H ) THAT YOUR VERSION THAT OUR ASSESSEE HAS PURCHASED THE GOODS WHICH ARE BOGUS PURCHASE IS WRON G, ILLEGAL AND AGAINST THE FACTS OF THE CASE AS IF PURCHASE WERE THE BOGUS THAN SALE SHOULD ALSO BE BOGUS WHILE WE HAVE IN ACTUALLY GOODS SOLD TO VARIOUS PARTIES WHICH CAN BE VERIFIED FROM OUR BALANCE SHEET OR AS PER LIST OF SUNDRY DEBTORS FILED WITH YOU O R EVEN FROM TRADE TAX DEPARTMENT. (I ) THAT AS PER DETAILS FOR PURCHASE FROM M/S RIDDHI SIDDHI ENTER PRISES AND DETAILS OF PAYMENT MA DE TO HIM DATE WISE IT IS CLEAR THAT ALL THE PURCHASE OR SALES WERE FROM 2 ND AUGUST 2008 TO 26 FEBRUARY 2009. THERE WERE PUR CHASE 12 TIMES AND PAYMENT WERE ALSO MADE ON ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 8 DIFFERENT DATES AFTER WHICH NO CREDIT BALANCE WAS WITH ASSESSEE ON 31.03.2009 SO IT CANNOT BE ESTIMATED THAT TOTAL PURCHASE AND PAYMENT WERE BOGUS OR AT ONE TIME. (J ) THAT ALL THE PURCHASE FROM THE SAID PARTY O R FROM OTHER PARTIES AND SALES TO DIFFERENT PARTIES WERE GENUINE AND ACTUAL WHICH HAS BEEN DECLARED BEFORE THE TRADE TAX AUTHORITY AND REQUIRED TAX HAS ALSO BEEN DEPOSITED WITH TRADE TAX DEPARTMENT. (K ) THAT IT IS ALSO REQUESTED THAT IF ANY ACTION IS TAK EN THAT SHOULD BE TAKEN AGAINST THE PROPRIETOR OF M/S RIDDHI SIDDHI ENTERPRISES OR HIS AGENT MR. RAVI, MOREOVER YOU HAVE NOT TRIED TO CONFIRM HIS STATEMENT AND SEARCHING HIS AGENT MR. RAVI WHILE MR. RAVI AS STATED BY SHRI SURENDRA KUMAR SHARMA COULD NOT BE AS ASCERTAINED THEN HOW CAN BE TREATED STATEMENT OF SHRI SURENDRA KUMAR SHARMA TRUE AND CORRECT WITHOUT ANY PROPER EVIDENCE MOREOVER YOU HAVE NOT GIVEN TO US ANY CHANCE TO CROSS EXAMINE HIM. 6 . HOWEVER, THE AO WAS NOT SATISFIED FROM THE SUBMISSIONS OF T HE ASSESSEE AND CONSIDERED THE AMOUNT OF RS. 1,39,70,618/ - (WHICH WAS THE PURCHASES MADE BY THE ASSESSEE FROM M/S RIDDHI SIDDHI ENTERPRISES) AS INCOME OF THE ASSESSEE. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 9 MC DOWELL AND CO. VS COMMERCIAL TAX OFFICER 154 ITR 148 (SC) NANAK CHAND LAAXMAN DAS VS CIT (1983) 140 ITR 151 (ALL. ) ANRAJ NARAIN DAS VS CIT (1951) 20 ITR 562 (PUNJ) A.D. JAYVEERAPANDIA NADAR VS CIT (1964) 54 ITR 401 (MAD.) CIT VS V.K. MAHIM (1995) 213 ITR 820 (KER) CIT VS PRECISION FINANC E PVT. LTD. 208 ITR 465 (CAL) CIT VS DURGA PRASAD MORE 82 ITR 540 (SC) 7 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: THE APPELLANT WAS NOT PROVIDED ANY OPPORTUNITY TO CROSS EXAMINE SH. SURENDRA KUMAR SHARMA . THE ASSESSING OFFICER ALSO REFERRED TO CERTAIN JUDGMENTS WHICH ARE ABSOLUTELY DISTINGUISHABLE IN AS MUCH AS THESE JUDGMENTS PERTAIN TO THE QUESTION OF CONFIRMATION OF THE CREDITORS AND/OR AS THE CASE MAY BE THOUGH IN THE CASE OF THE APPELLANT, THE ASSESS ING OFFICER HAS SIMPLY RELIED ON THE SELF SERVING STATEMENT OF THE THIRD PARTY NAMELY SH. SURENDRA KUMAR SHARMA. THAT THE OBSERVATIONS MADE IN THE ORDER BY ASSESSING OFFIC ER ARE TOTALLY BASED ON THE HEAR SAY. THE INCOME TAX OFFICER, WARD - 2(3), GHAZIABAD H AS M ADE AN ASSESSMENT ON SH. SUREND RA KUMAR SHARMA PROPRIETOR OF M/S RIDDHI SIDDHI ENTERPRISES AND ON THE ALLEGED INFORMATION RECEIVED FROM THE INCOME TAX OFFICER, WARD - 2(3), GHAZIABAD, ASSESSING OFFICER HAS TREATED THE PURCHASE MADE BY THE APPELLANT FROM THE SAID RIDDHI SIDDHI ENTERPRISES AS BOGUS PURCHASE. THE IMPORTANT ASPECT OF THE MATTER HAS BEEN LOST SIGHT OF IN ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 10 AS MUCH AS THERE IS NO EVIDENCE ON RECORD TO PROVE CORRECT, THE CONTENTION OF SH. SURENDRA KUMAR SHARMA. THERE IS NO EVIDENCE ON RECORD TO ES TABLISH THAT WHAT IS STATED BY SH. SURENDRA KUMAR SHARMA IS IN FACT NOT WRONG. THERE IS EVERY POSSIBILITY THAT IN ORDER TO SAVE HI S OWN SKIN, THE SAID SH. SUREND RA KUMAR SHARMA HAS GIVEN WRONG STATEMENT. THE OBSERVATIONS MADE BY THE ASSESSING OFFICER WHEN ANALYZED, IT CAN BE SAFELY CONCLUDED THAT IT IS CERTAINLY NOT THE CASE OF ASSESSING OFFICER THAT WHAT IS STATED BY SH. SURENDRA KUMAR SHARMA ALONE IS ABSOLUTELY CORRECT AND CONSEQUENTLY, IT CANNOT BE USED IN THE CASE OF THE APPELLANT TILL IT IS ESTABLISHED BEYOND DOUBT THAT WHAT IS STATED BY HIM IS TRUE AND CORRECT. WHATEVER FINDINGS IS RECORDED IN THE TRADE TAX CASE OF SH. SURENDRA KUMAR SHARMA, IT IS SIMPLY A REFLECTION OF HIS SYSTEM OF WORKING, PRESENTATIONS AND CONDUCT WHICH CANNOT BE GENERALIZED AND IM PORTED TO THE CASE OF THE APPELLANT. THE FINDING IN THE CASE OF RIDDHI SIDDHI ENTERPRISES IS MADE CONSIDERING HIS SPECIFIC CIRCUMSTANCES AND CONDITION OF ACCOUNTS PRODUCED. THE FINDING AND/OR THE OBSERVATION MADE IN THE CASE OF SH. SURENDRA KUMAR SHARMA P ROPRIETOR M/S RIDDHI SIDDHI ENTERPRISES CANNOT BE MADE BASIS TO REJECT THE ACCOUNTED VERSION OF THE APPELLANT TILL AN OPPORTUNITY TO CROSS EXAMINE SHRI SURENDRA KUMAR SHARMA IN REGARD TO HIS STATEMENT IS PROVIDED TO APPELLANT. IT IS ACCORDINGLY TO BE SEEN , EVEN WHEN THE OBSERVATION OF THE ASSESSING OFFICER IS CONSIDERED TO BE CORRECT, WHERE FROM THE STOCK IS RECEIVED BY THE APPELLANT FOR ONWARD SALES AS RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER HAS NOT REJECTED THE SALES. THE ASSESSING OFFICE R HAS NOWHERE EXPRESSED ANY DOUBT ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 11 OVER THE SALE OF THE MATERIAL AS REFLECTED IN THE BOOKS OF ACCOUNT AND STOCK REGISTER. IN SUCH CIRCUMSTANCES, GOING BY THE OBSERVATION OF THE ASSESSING OFFICER, PURCHASES MADE FROM RIDDHI SIDDHI ENTERPRISES CAN AT BEST BE TREATED AS UNVERIFIABLE PURCHASE. IN SUCH CIRCUMSTANCES, THE ENTIRE PURCHASE VALUE CANNOT BE ADDED TO THE INCOME ESPECIALLY WHEN NO DOUBT IS EXPRESSED ON THE SALES AND THE STOCK REGISTER PRODUCED BEFORE THE ASSESSING OFFICER, A REASONABLE RATE CAN BE APPLI ED. THE ASSESSING OFFICER HAS ON THE OTHER HAND ADDED RS./ 1,39,70,618/ - BEING THE ENTIRE AMOUNT OF PURCHASE VALUE OF THE MATERIAL TO THE INCOME OF THE APPELLANT. IT IS NOT LEGALLY CORRECT TO MAKE ADDITION OF THE ENTIRE PURCHASE VALUE TO THE INCOME OF THE APPELLANT WHEN THE SAME IS UNVERIFIABLE AND BOOKS ARE REJECTED THE ONLY JUDICIOUS METHOD TO FRAME ASSESSMENT IS TO BE APPLY A REASONABLE RATE OF PROFIT ON THE TOTAL TURNOVER. IT IS FURTHER STATED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE MONEY WITHDRAWN BY SH. SURENDRA KUMAR SHARMA OF M/S RIDDHI SIDDHI ENTERPRISES FOUND ITS WAY BACK TO THE COFFERS OF THE APPELLANT NAMELY SH. VIJAY KUMAR GOEL. ON THE OTHER HAND IT IS FACT ON RECORD THAT ALL THE TRANSACTIONS ARE ENTE RED THROUGH PROPER BANKING CHANNEL AND EVEN THERE IS NO EVIDENCE ON RECORD TO PROVE THAT THE APPELLANT HAD PAID HIS MONEY TO THE ONWARD BUYERS OF THE MATERIAL TO ISSUE CHEQUE TO THE APPELLANT. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE BOO KS OF ACCOUNT AND/OR HEAVY CASH DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT TO SUGGEST THAT THE MONEY IS RECEIVED BACK IN CASH FROM M/S RIDDHI SIDDHI ENTERPRISES. ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 12 8 . THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS ATMA PRAKASH BATRA 340 ITR 177 (GUJ.) DALPAT SINGH CHOUDHARY VS ACIT 65 DTR 148 (JODH) STATE OF KERALA VS M.M.M MATHEW AND ANOTHER 42 STC 348 (SC) 9 . THE ASSESSEE FURTHER SUBMITTED TO THE LD. CIT(A) AS UNDER: IT IS IN CONTINUATION TO THE WRITTEN SUBMISSION MADE ON THE LAST DATE OF HEARING AND IN REPLY TO THE SPECIFIC QUERY RAISED BY YOUR HONOR ON THE QUESTION OF UNVERIFIABLE PURCHASE FROM M/S RIDDHI SIDDHI ENTERPRISES AND THE MARGIN OF PROFIT DERIVED THEREON, THE FOLLOWING SUBMISSION IS MADE. THAT BEFORE MAKING SUBMISSION ON THE QUESTION OF MARGIN OF PROFIT EARNED ON PURCHASE OF MATERIAL FROM M/S RIDDHI SIDDHI ENTERPRISES, IT IS STATED THAT EVEN THE OBSERVATION OF THE ASSESSING OFFICER IN REGARD TO THE PURCHASES MADE FROM M/S RIDDHI SIDDHI ENTERPRISES ITSELF ARE BASED ON WRONG AP PRECIATION OF FACTS AND CONTENT OF THE STATEMENT OF SH. SURENDRA KUMAR SHARMA RECORDED UNDER OATH AT THE TIME OF THE HEARING OF THE CASE. IF THE REPLY GIVEN BY SH. SURENDRA KUMAR SHARMA TO THE QUESTIONS ASKED BY THE ASSESSING OFFICER IS CAREFULLY EXAMINED, IT WOULD BE SEEN THAT SH. SURENDRA KUMAR SHARMA HAS NO WHERE ADMITTED THAT HE IS INVOLVED IN PROVIDING ACCOMMODATION BILLS TO THE PARTIES AND/OR SPECIFICALLY TO THE APPELLANT FIRM SO TO TERM THE PURCHASES MADE BY THE APPELLANT AS BOGUS. 10 . THE ASSESSEE MADE A REFERENCE TO THE STATEMENT OF SH. SURENDRA KUMAR SHARMA WHICH HAS BEEN REPRODUCED BY THE LD. ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 13 CIT(A) IN THE IMPUGNED ORD ER FOR THE COST OF REPETITION, T HE SAME IS NOT REPRODUCED HEREIN. 11. THE ASSESSEE ALSO SUBMITTED AS UNDER: FROM THE ANSWER G IVEN BY SH. SURENDRA KUMAR SHARMA TO QUESTION NUMBER 18 ABOVE, IT WOULD BE SEEN THAT THE SO CALLED MR. RAVI HAD SHOWN THE GODOWN TO SH. SURENDRA KUMAR SHARMA WHERE THE STEEL WAS STORED. IT GOES TO PROVE THAT M/S RIDDHI SIDDHI ENTERPRISES ENGAGED ITSELF IN THE ACTUAL PURCHASE/SALE OF MATERIAL AND THAT THE APPELLANT HAD PURCHASED ACTUAL MATERIAL FROM M/S RIDDHI SIDDHI ENTERPRISES. THAT FROM THE STATEMENT OF SH. SURENDRA KUMAR SHARMA RECORDED UNDER OATH BY THE ASSESSING OFFIER, WARD - 2(3), GHAZIABAD IT IS NOT P ROVED THAT SH. SURENDRA KUMAR SHARMA IS ENGAGED IN PROVIDING ACCOMMODATION BILLS. SH. SURENDRA KUMAR SHARMA HAS EQUALLY NOWHERE ALLEGED IN HIS STATEMENT UNDER OATH THAT MATERIAL WAS NOT SUPPLIED TO APPELLANT. TO EVERY ANSWER GIVEN BY HIM IN RESPONSE TO THE QUESTIONS OF THE ASSESSING OFFICER, HE HAS SIMPLY STATED THAT THE SO CALLED MR. RAVI WAS HANDLING HIS BUSINESS, GOT THE BILL/CHEQUES SIGNED FROM HIM. THE ASSESSING OFFICER HAS NOT EXAMINED THE SAID MR. RAVI AND THUS THERE IS NO MATERIAL ON RECORD TO CONC LUDE THAT SH. SURENDRA KUMAR SHARMA PROPRIETOR M/S RIDDHI SIDDHI ENTERPRISES HAS ADMITTED TO HAVE ISSUED ACCOMMODATION BILLS TO THE APPELLANT ESPECIALLY IN THE BACKGROUND OF THE FACT THAT THE NAME OF THE APPELLANT NAMELY SH. VIJAY KUMAR GOEL AND HIS PROPRI ETORSHIP CONCERN APPARENTLY BY THE NAME OF M/S ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 14 BANKEY LAL J AGDISH PRASA D IS NO WHERE MENTIONED BY THE S AID SH. SURENDRA KUMAR SHARMA IN HIS STATEMENT RECORDED UNDER OATH. IT IS NOTHING LESS THAN A SELF SERVING STATEMENT THAT APPEARS TO HAVE BEEN GIVEN JUST TO AVOID THE TAX LIABILITY IN HIS OWN CASES. THAT SH. SURENDRA KUMAR SHARMA HAS GIVEN AN AFFIDAVIT IN WHICH HE HAS ALLEGED THAT THE ASSESSING OFFICER WARD - 2(3), GHAZIABAD FORCED HIM TO SIGN THE PRE - PREPARED STATEMENT UNDER THREAT AND UNDUE PRESSURE. IT I S FURTHER STATED THAT EVEN WITHOUT CONSIDERING THE CONTENT OF AFFIDAVIT, THE ASSESSING OFFICER HAD NO MATERIAL AT ALL TO TREAT THE PURCHASES MADE BY THE APPELLANT FROM M/S RIDDHI SIDDHI ENTERPRISES AS BOGUS PURCHASES MERELY ON THE STRENGTH OF THE COMMUNICA TION RECEIVED FROM THE INCOME TAX OFFICER, WARD 2(3), GHAZIABAD, WITHOUT GIVING AN OPPORTUNITY TO THE APPELLANT TO CROSS EXAMINE THE PARTY NAMELY SH. SURENDRA KUMAR SHARMA, PROPRIETOR M/S RIDDHI SIDDHI ENTERPRISES ON THE SUBJECT AND/OR TO EXAMINE THE SO CA LLED MR. RAVI SO AS TO ARRIVE AT LOGICAL CONCLUSION. SINCE, SH. SURENDRA KUMAR SHARMA HAS NOWHERE ADMITTED TO ISSUE ACCOMMODATION BILLS, THE PURCHASES MADE FROM SH. SURENDRA KUMAR SHARMA PROPRIETOR M/S RIDDHI SIDDHI ENTERPRISES CANNOT BE TERMED AS BOGUS A ND CONSEQUENTLY, ADDITION OF RS. 2,38,86, 670/ - BEING THE TOTAL PURCHASE PRICE OF THE MATERIAL IS ILLEGAL AND BAD IN THE EYES OF THE LAW. THE ADDITION MADE BY THE ASSESSING OFFICER IS UNJUSTIFIED AND WITHOUT PROPER MATERIAL ON RECORD. THE PURCHASE RATE AND SALE RATE OF IRON AND STEEL PURCHASED FROM RIDDHI SIDDHI ENTERPRISES AND ALSO ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 15 FROM OTHER PARTIES. IT WOULD BE SEEN THAT THE PURCHASES FROM ALL THE PARTIES ARE AT PAR IRRESPECTIVE OF THE FACT THAT THERE ARE FLUCTUATIONS IN THE PRICES OVER THE PERIOD. THE A PPELLANT HAS NOT EARNED ANY EXTRA PROFIT ON THE PURCHASES MADE. THE LEDGER COPY OF M/S RIDDHI SIDDHI ENTERPRISES FROM THE BOOKS OF THE APPELLANT IS ENCLOSED TO PROVE THAT ALL THE PURCHASE TRANSACTIONS HAVE TAKEN PLACE THROUGH BANKING CHANNELS ONLY. THAT T HE ASSESSEE HAS ALSO ENCLOSED THE PHOTOCOPY AND LEDGER COPY OF VARIOUS BANK ACCOUNT MAINTAINED BY THE ASSESSEE WHICH CLEARLY PROVE THAT THERE ARE NO CASH DEPOSITS IN THE BANK OF THE APPELLANT AND THUS IT IS WRONG TO ALLEGED THAT THE CASH WITHDRAWN BY M/S R IDDHI SIDDHI ENTERPRISES FOUND ITS WAY BACK TO THE COFFERS OF THE APPELLANT. IN VIEW OF THE SUBMISSIONS MADE ABOVE THE ADDITION HAS BEEN MADE WITHOUT SUFFICIENT MATERIAL ON RECORD AND THUS THE SAME DESERVES TO BE DELETED. APPROPRIATE RELIEF MAY KINDLY BE GRANTED. 12 . THE LD. CIT(A) ALSO ASKED THE REMAND REPORT FROM THE AO WHO FURNISH ED THE SAME VIDE LETTER DATE 24.09.2012 WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) IN PARA 6 OF THE IMPUGNED ORDER , T HE ASSESSEE ALSO FURNISHED A REJOINDER VIDE LETTER DATE D 25.10.2012 WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) IN PARA 7 OF THE IMPUGNED ORDER FOR THE COST OF REPETITION, THE SAME ARE NOT REPRODUCED HEREIN. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 16 REPORT OF THE A O OBSERV ED THAT NO INDEPENDENT E NQUIRY HAD BEEN MADE BY THE AO TO FORM AN OPINION THAT M/S RIDDHI SIDDHI ENTERPRISES HAD PROVIDED ACCOMMODATION BILLS TO THE ASSESSEE IN RESPECT OF THE MATERIAL PURCHASED BY IT AND HIS REMAND REPORT WAS SILENT ON THIS ISSUE. THE LD. CIT(A) POINTED OUT THAT SH. SURENDRA KUMAR SHARMA HAD GIVEN EVASIVE REPLIES TO THE QUESTIONS AND HAD NOWHERE STATED THAT HE WAS INTO BUSINESS OF PROVIDING ACCOMMODATION BILLS OR THAT HE HAD PROVIDED ACCOMMODATION BILLS TO THE ASSESSEE IN THE MATERIAL PURC HASED FROM HIM. THE LD. CIT(A) OBSERVED THAT THE AO HAD NOT POINTED OUT ANY DEFECTS IN THE SALES RECORDS AND IN THE BOOKS OF ACCOUNTS. THE LD. CIT(A) CATEGORICALLY STATED THAT THE AO HAD NOT COMMENTED UPON THE SUBMISSION OF THE ASSESSEE ON THE TOTAL SALES SHOWN BY HIM IN THE BOOKS OF ACCOUNTS. HE ALSO MENTIONED THAT WITHDRAWALS MADE BY SH. SURENDRA KUMAR SHARMA FROM HIS DIFFERENT BANK ACCOUNTS DID NOT MATCH WITH ANY OF THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND THERE WERE MOSTLY CHEQUE CLEARING EN TRIES AND NO CASH DEPOSITS. THE LD. CIT(A) MENTIONED THAT SH. SURENDRA KUMAR SHARMA IN HIS STATEMENT RECORDED UNDER OATH BY INCOME TAX OFFICER, WARD 2(3), WHICH WAS ATTACHED BY THE AO WITH THE REMAND REPORT , HAD NOWHERE STATED THAT HE ISSUE D ACCOMMODATION BILLS TO THE PARTIES INCLUDING THE ASSESSEE AND ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 17 THAT THE AO HAD NOT CONDUCTED ANY INDEPENDENT ENQUIRY TO CONCLUDE THAT THE ACTUAL MATERIAL WAS NOT PURCHASED BY THE ASSESSEE. THE LD. CIT(A) OBSERVED THAT THE INFORMATION IN POSSESSION OF THE AO , IF ANY, WAS NEVER CONF RONTED TO THE ASSESSEE EXCEPT THAT A QUERY WAS RAISED ON 26.12.2011 BUT COPIES OF THE MATERIAL WAS NOT PROVIDED TO THE ASSESSEE. HE ALSO OBSERVED THAT THE ALLEGATION OF THE AO THAT CHEQUES WERE CREDITED IN THE BANK ACCOUNT OF M/S RIDDHI SIDDHI EN TERPRISES AND THE CASH WAS WITHDRAWN ON THE SAME DATE DID NOT CONCLUSIVELY ESTABLISH THAT THE ASSESSEE DID NOT MAKE ANY PURCHASE . THE LD. CIT(A) OBSERVED THAT SALES HAD BEEN ACCEPTED AND THE AO HAD NOT EXPRESSED ANY DOUBT OVER THE SALES MADE BY THE ASSESSE E AND THAT THE COPY OF THE TRADE TAX ORDER FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION REVEALED THAT THE PURCHASE S MADE BY THE ASSESSEE FROM M/S RIDDHI SIDDHI ENTERPRISES HAD BEEN ACCEPTED BY THE TRADE TAX DEPARTMENT. THE LD. CIT(A) FURTHER OBSE RVED THAT LOOKING TO THE FACTS AND SURROUNDING CIRCUMSTANCES OF THE CASE THE POSSIBILITY OF BUYING THE SAID MATERIAL FROM THE PARTIES OTHER THAN M/S RIDDHI SIDDHI ENTERPRISES COULD NOT BE COMPLETELY RULED OUT SPECIALLY IN THE BACKGROUND OF THE FACT THAT NO DOUBT WAS EXPRESSED BY THE ASSESSEE ON THE QUANTUM OF THE MATERIAL SOLD. THE LD. CIT(A) WAS OF THE VIEW THAT THE MATERIAL MIGHT ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 18 HAVE BEEN PURCHASED BY THE ASSESSEE FROM THE PARTIES OTHER THAN RIDDHI SIDDHI ENTERPRISES PROBABLY TO SAVE SOME LOCAL TAXES ETC . AND AT BEST COULD BE TREATED AS UNVERIFIABLE PURCHASE S INVITING SOME BETTER MARGIN OF PROFIT. THE LD. CIT(A) HELD THAT THE AO WAS NOT JUSTIFIED TO MAKE THE ADDITION OF THE ENTIRE COST OF MATERIAL TO THE INCOME OF THE ASSESSEE THAT WOULD RESULT INTO UNIMA GINABLE PROFIT IN THE BUSINESS PARTICULARLY WHEN THE SALES HAD BEEN ACCEPTED PURCHASE S ALSO HAVE TO BE ACCEPTED. THE LD. CIT(A) OBSERVED THAT THE AO HAD NOT DISTURB ED THE TRADING RESULT S AS DISCLOSED BY THE ASSESSEE AND THE PAYMENT FOR THE PURCHASE OF MATE RIAL HAD BEEN MADE THROUGH BANK ING CHANNEL , S IMILARLY, THE PAYMENT FOR THE SALE OF THE MATERIAL HAD BEEN RECEIVED THROUGH PROPER BANKING CHANNEL AND THERE WAS NO MATERIAL ON RECORD THAT THE ASSESSEE PAID HIS MONEY IN CASH FOR ISSUING CHEQUE IN HIS NAME AND THAT THERE WAS NO EFFECTIVE CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE. HE ACCORDINGLY DELETED THE ADDITION OF RS. 1,39,70,618/ - MADE BY THE AO AND IN VIEW OF THE INFERENCE THAT THE ASSESSEE MIGHT HAVE MADE IMPUGNED PURCHASES FROM SOME OT HER PARTIES AT A LOWER COST , AND THUS EARNED MUCH BETTER PROFIT ON THE SALE OF THE IMPUGNED PURCHASES, HE DIRECT ED THE AO TO APPLY NET PROFIT RATE OF 5% ON THE SAID UNVERIFIABLE PURCHASE S OF RS. 1,39,70,618/ - WHICH WAS WORKED ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 19 OUT AT RS. 6,98 ,530/ - . ACCORDINGLY THE ADDITION TO THAT EXTENT WAS SUSTAINED. 13 . NOW THE DEPARTMENT IS IN APPEAL AGAINST THE DELETION OF ADDITION OF RS. 1,39,70,618/ - AND THE ASSESSEE HAD FILED THE CROSS OBJECTION AGAINST THE SUSTENANCE OF ADDITION OF RS. 6,98,530/ - . 14 . THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 30.12.2011. HE FURTHER SUBMITTED THAT THE TRADING RESULTS OF M/S RIDDHI SIDDHI ENTERPRISES WERE TREATED AS BOGUS AND THE REGISTRATI ON OF THE SAID FORM WAS CANCELLED BY THE TRADING TAX DEPARTMENT, THEREFORE, THE PURCHASE S SHOWN BY THE ASSESSEE FROM THE SAID PARTY WERE ONLY THE BOOK ENTRIES. AS SUCH THE AO WAS JUSTIFIED IN TREATING THE PURCHASE S AMOUNTING TO RS. 1,39,70,618/ - FROM THAT PARTY AS BOGUS AND MAKING THE ADDITION. IT WAS FURTHER STATED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. 1 5 . IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITI ES BELOW AND FURTHER SUBMITTED THAT THE AO MADE THE ADDITION ONLY ON THE BASIS OF STATEMENT OF SH. SURENDRA KUMAR SHARMA WHICH ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 20 WAS RETRACTED LATER ON BY STATING THAT NO BOGUS ENTRIES WERE PROVIDED EITHER TO THE ASSESSEE OR ANY OTHER PERSON. IT WAS FURTHER SUBMITTED THAT THE SALES SHOWN BY THE ASSESSEE WERE ACCEPTED BY THE TRADING TAX DEPARTMENT AS WELL AS BY THE AO AND WHEN THE SALES AND THE GROSS PROFIT RATE WERE ACCEPTED THERE WAS NO REASON TO DOUBT THE PURCHASES. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTI FIED IN DELETING THE ARBITRARY ADDITION MADE BY THE AO . A S REGARDS TO THE ADDIT ION SUSTAINED BY THE LD. CIT(A), T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PURCHASE S OF RS. 1,39,70,618/ - WERE INCLUDED IN THE TOTAL PURCHASE S OF THE ASSESSEE AND ON T HE BASIS OF + THOSE PURCHASE S ONLY , THE SALES WERE MADE ON WHICH THE ASSESSEE DECLARED THE GROSS PROFIT WHICH WAS PROGRESSIVE I N COMPARISON THE EARLIER YEAR S O, THERE WAS NO OCCASION TO MAKE THE IMPUGNED ADDITION. HE ACCORDINGLY PRAYED TO DELETE THE ADDITI ON SUSTAINED BY THE LD. CIT(A). 16 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE AO MADE THE ADDITION MERELY ON THE BASIS OF STATEMENT OF ONE SH. SURENDRA KUMAR SHARMA , PROPRIETOR OF M/S RIDDHI SIDDHI ENTERPRISES WHICH WAS LATER ON RETRACTED AND IT WAS STATED THAT HE WAS NOT INDULGED IN PROVIDING THE ENTRIES TO THE ASSESSEE OR TO ANY ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 21 OTHER PERSON. THE AO DID NOT PROVIDE ANY OPPORTUNITY TO TH E ASSESSEE TO CROSS EXAMINE SH. SURENDRA KUMAR SHARMA . IN THE PRESENT CASE, IT IS ALSO NOTICED THAT THE TURNOVER OF THE ASSE SSEE WAS ACCEPTED BY THE TRADE TAX DEPARTMENT AND IT IS NOT THE CASE OF THE AO THAT PROPER BOO K S OF ACCOUNTS WERE NOT MAINTAINED BY THE ASSESSEE IN REGULAR COURSE OF BUSINESS OR THE SAME METHOD OF ACCOUNTING WAS NOT FOLLOWED CONSISTENTLY. THE LD. CIT(A) EXAMINED THE BANK ACCOUNTS AS WELL AS BOOKS OF ACCOUNTS OF THE ASSESSEE AND CATEGORICALLY STATED THAT THE PURCHASES AS WELL AS THE SAL ES WERE THROUGH BANKING CHANNEL AND THERE WAS NO CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE. IN THE PRESENT CASE, THE AO HAS NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNTS, THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF ALLEGED BOGUS PURCHASES PARTICULARLY WHEN THE GP RATE DECLARED BY THE ASSESSEE WAS PROGRESSIVE AND WAS ACCEPTED BY THE AO. AS REGARDS TO THE ADDITIONS SUSTAINED BY THE LD. CIT(A) BY APPLYING THE NET PROFIT RATE OF 5% OF THE ALL EGED UNVERIFIABLE PURCHASE. WE ARE OF THE VIEW THAT WHEN THE LD. CIT(A) HIMSELF ACCEPTED THE TRADING RESULTS OF THE ASSESSEE AND ALSO HELD THAT THE PAYMENT FOR PURCHASE S OF MATERIAL HAD BEE N MADE THROUGH BANKING CHANNEL, GP RATE DECLARED BY THE ASSESSEE WA S PROGRESSIVE THEN THERE WAS NO OCCASION TO MAKE ITA NO. 670 & CO 68 /DEL / 2013 VIJAY KUMAR GOEL 22 THE ADDITION BY APPLYING THE NET PROFIT RATE OF 5% BY CONSIDERING THE PURCHASE S OF RS . 1,39,70,618/ - AS UNVERIFIABLE. W E, THEREFORE, BY CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREIN ABOVE DELETE THE ADDITION SUSTAINED BY THE LD. CIT(A). 17 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 17 /0 6 /2015 ) SD/ - SD/ - (GEORGE GEORGE K. ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 /06 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR