ITO Ward-I, V. KArnail Singh,

ITA 776/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9586 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-08-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 28-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: K R CHHABRA
• Keywords: Gross profit estimation; Income from undisclosed sources
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO.776/DEL./2008 (ASSESSMENT YEAR : 2003-04) ITO, WARD 3, VS. SH. KARNAIL SINGH, PROP. KARNAL. M/S LUXMI PESTICIDES, V. NIGDU, DISTT. KARNAL. (PAN/GIR NO.N.A.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.R. CHHABRA, ADV. REVENUE BY : SHRI B.K. GUPTA, SR. DR ORDER PER K.D. RANJAN: AM THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 200 3-04 ARISES OUT OF THE ORDER OF COMMISSIONER, KARNAL. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.1,07,235 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOW G.P . RATE. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE DECLARED GROSS PROFIT @ 1.452% WHEREAS THE ASSESSING OFFICER FOUND THAT THE OTHER CONCERN M/S SINGLA AGRO AGENCY , TARAORI DEALING IN THE SAME TRADING HAD DECLARED GROSS PROFIT @ 2.25%. THE ASS ESSING OFFICER MADE AN ADDITION OF RS.1,07,235/- BY APPLYING G.P. RATE OF 2.25%. 3. ON APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT THERE WAS NO CHANGE IN THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE FROM YEAR TO YEAR. THE PROVISIONS OF SECTION 145 OF THE ACT WERE NOT APPLICABLE SINCE THE ASSESSEE HAD KEPT STOCK DETAIL S AND IN THE ABSENCE OF ANY DISCREPANCY POINTED OUT BY THE ASSESSING OFFICER, THE ADDITION ON ACCOUNT OF G.P. WAS ILLEGAL AND WITHOUT ANY REASONS. THE ASSESSEE HAD MAINTAINED C OMPLETE QUANTITATIVE DETAILS OF THE GOODS IN RESPECT OF OPENING STOCK, PURCHASES, SALES AND CLOSING STOCK. THE PROFITS ADMITTED BY THE ASSESSEE COULD VERY WELL BE VERIFI ED BY THE ASSESSING OFFICER WITH THE ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 2 HELP OF QUANTITATIVE DETAILS. THE CLOSING STOCK HA D BEEN PROPERLY VERIFIED AND QUANTITATIVE DETAILS WERE MAINTAINED. IT WAS ALSO SUBMITTED THA T REASONABLE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE TO SUPPORT THE G.P. RATE A DMITTED BY HIM. THE RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF PANDIT BROTHERS VS. CIT, 261 ITR 159, WHEREIN IT WAS HELD THAT WHEN THERE WAS NO DISCREPANCY POINTED OUT IN THE ACCOUNT BOOKS MAINTAINED BY THE ASSESSEE, THE TRADING RESULT SHOWN BY THE ASSESSEE COULD NOT BE DISTURBED. THE COMMISSIO NER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OBSERVED THAT THE ASSES SEE HAD MAINTAINED REGULAR BOOKS OF ACCOUNT AND ALL DETAILS INCLUDING STOCK INVENTORY W ERE FILED BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAD CITED A PARALLEL CASE OF M/S ISHWA R PREM PAWAN KUMAR, WHERE G.P. RATE OF 1.17% WAS DECLARED. THE ASSESSING OFFICER HAD N EITHER FOUND ANY DEFECT IN THE BOOKS OF ACCOUNT NOR REJECTED THE BOOKS OF ACCOUNT U/S 14 5. THEREFORE, THE ADDITION COULD NOT BE MADE ON ACCOUNT OF LOW GROSS PROFIT. HE ACCORDI NGLY DELETED THE ADDITION. 4. BEFORE US, LD.SR.DR SUPPORTED THE ORDER OF THE A SSESSING OFFICER. ON THE OTHER HAND, LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 5. WE HAVE HEARD BOTH THE PARTIES. IN THIS CASE, T HE ASSESSING OFFICER HAD NOT REJECTED THE BOOK RESULT U/S 145 OF THE ACT. THE A SSESSEE HAD MAINTAINED QUANTITATIVE DETAILS OF OPENING STOCK, PURCHASES, SALES AND CLOS ING STOCK. THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT BO OKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE NOT RELIABLE. IN THE ABSENCE OF ANY SUCH INFORMATION HAVING BROUGHT ON RECORD BY THE ASSESSING OFFICER, IN OUR CONSIDERED OPINION, THE COMMISSIONER OF INCOME- TAX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITIO N ON ACCOUNT OF LOW GROSS PROFIT RATE MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE DO NOT FIND ASSESSMENT YEAR INFIRMITY IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS) IN DELETING THE ADDITION. THE ASSESEES CASE IS ALSO COVERED BY TH E DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PANDIT BROTHERS VS. CIT (SUPRA). 6. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DELE TING THE ADDITION OF RS.1,00,000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF VARIATI ON WITH THE ACCOUNTS OF M/S AJAY ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 3 LUXMI INSECTICIDES & PESTICIDES LTD. THE FACTS OF THE CASE RELATING TO THIS GROUND OF APPEAL ARE THAT THE ASSESSING OFFICER OBTAINED A ST ATEMENT FROM VIJAY LUXMI INSECTICIDES & PESTICIDES LTD. RELATING TO ASSESSEE IN WHICH NIL BALANCE WAS SHOWN WHEREAS THE ASSESSEE WAS SHOWING A DEBIT BALANCE OF RS.1,00,000 AGAINST NAGARJUNA LTD. AS ON 31.3.2003. THE ASSESSEE EXPLAINED THIS DIFFERENCE THAT ON 01.04.2003, NAGARJUNA LTD. HAD MADE GENERAL ENTRY AND THERE HAVE BEEN A CREDIT BALANCE IN THE ACCOUNT OF ASSESSEE OF RS.1,00,000 AND, THEREFORE, THE DIFFERENCE WAS RE-C ONCILED, BUT THE SAME WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS THE CONFIRMATION FROM N AGARJUA LTD. HAD NOT BEEN FILED. 7. BEFORE COMMISSIONER OF INCOME-TAX (APPEALS), IT WAS SUBMITTED THAT AN AMOUNT OF RS.1,00,000 LAKH SENT BY THE ASSESSEE ON 31.12.2 003 WAS KEPT IN SEPARATE ACCOUNT AND THE ASSESEE COMPANY ITSELF HAD RECTIFIED SAID ENTRY BY CREDITING THE SAID AMOUNT OF RS.1,00,000 AS ON 01.04.2003 TO THE ACCOUNT OF THE ASSESSEE. THEREFORE, THERE WAS NO DIFFERENCE IN BOTH THE ACCOUNTS OF THE COMPANY AS W ELL A THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMI SSIONS MADE BY THE ASSESSEE DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSIONS OF THE ASSESSEE. AS EXPLAINED BY THE ASSESSEE , THE COPY OF THE ACCOUN T WAS DIRECTLY OBTAINED BY THE ASSESSING OFFICER FROM M/S NAGARAJUNA LTD. AND A CR EDIT BALANCE OF RS.1 LAC WAS SHOWN IN THE ACCOUNT OF THE ASSESSEE AS ON 1.4.03 B Y WAY OF A JOURNAL ENTRY AND THE SAME IS RECONCILED BY THE ASSESSEE FORM THE DEB IT BALANCE OF NAGARJUNA LTD. OF RS.1 LAC AS ON 31.3.2003 AND, THEREFORE, THERE WAS NO FURTHER CONFIRMATION REQUIRED FROM M/S NAGARJUNA LTD. BECAUSE THE BALANC E STANDS RECONCILED BY THE BOOKS OF ACCOUNT OF BOTH THE PARTIES, THEREFORE, TH E ADDITION IS DELETED AND THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 8. WE HAVE HEARD BOTH THE PARTIES. FROM THE FACTS RECORD BY THE COMMISSIONER OF INCOME-TAX (APPEALS), IT IS CLEAR THAT THE AMOUNT O F RS.1,00,000 STANDS RECONCILED AND, THEREFORE, NO FURTHER CONFIRMATION WAS REQUIRED FRO M M/S NAGARJUNA LTD. ACCORDINGLY, IN OUR CONSIDERED OPINION, NO ADDITION COULD BE MADE O N ACCOUNT OF THE DIFFERENCE IN THE BALANCE. HENCE, THE COMMISSIONER OF INCOME-TAX (AP PEALS) WAS JUSTIFIED IN DELETING THE ADDITION. ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 4 9. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DELE TING THE ADDITION OF RS.50,000 MADE OUT OF AGRICULTURE INCOME . THE FACTS OF THE CASE RELATING TO THIS GROUND OF APPEAL ARE THAT THE ASSESSEE ADMITTED AGRICULTURE INCOME OF RS.3,8 0,000/-. THE ASSESSEE FILED COPY OF FORM NO.J IN RESPECT OF AGRICULTURE PRODUCE SOLD BY HIM FROM 01.04.2002 TO 31.03.2003. THE TOTAL SALE PROCEEDS WERE AT RS.5,44,687/-. THE ASSESSEE INCURRED RS.1,64,687/- AS FARM EXPENSES. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE COULD HAVE EARNED RS.3,30,000/- FROM 22 ACRES LAND OWNED BY HI M. HE TREATED THE AMOUNT OF RS.50,000 AS INCOME FROM UNDISCLOSED SOURCES. 10. ON APPEAL, THE COMMISSIONER OF INCOME-TAX (APPE ALS) DELETED THE ADDITION ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT BROUGHT A NY MATERIAL ON RECORD TO JUSTIFY THE ADDITION OF RS.50,000/- AS INCOME FROM OTHER SOURCE S. 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT ASSESSEE OWNS 22 ACRES AGR ICULTURAL LANDS. THE ASSESSEE HAD ADMITTED RS.3,80,000/- NET INCOME FROM AGRICULTURE OPERATIONS. THE ASSESSEE HAD PRODUCED FORM NO.J IN SUPPORT OF SALE PROCEEDS OF A GRICULTURE PRODUCE. ON THE OTHER HAND, THE ASSESSING OFFICER HAD NOT BROUGHT ANY MAT ERIAL ON RECORD TO JUSTIFY HIS ESTIMATION OF INCOME AT RS.3,30,000/- AS AGAINST RS .3,80,000/- ADMITTED BY THE ASSESSEE. IN THE ABSENCE OF ANY MATERIAL ON RECORD, IN OUR CO NSIDERED OPINION, THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION. 12. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.7,18,174/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CREDIT NOTES SHOWN IN THE TRADING ACCOUNT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT IN T HE TRADING ACCOUNT, THE ASSESSEE HAD CREDITED THE AMOUNT OF RS.7,15,174/- ON ACCOUNT OF CREDIT NOTES IN ITS SALES ACCOUNT. ON A QUERY FROM ASSESSING OFFICER, IT WAS SUBMITTED BY T HE ASSESSEE THAT CREDIT NOTES WERE DISCOUNT AND WERE REQUIRED TO BE REDUCED FROM THE P URCHASES. THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER ON T HE GROUND THAT THE DISCOUNT WAS EITHER ALLOWED ON PURCHASES OR SALES. IN BOTH THE CASES, IT WAS TO BE REDUCED FROM THE TOTAL AMOUNT OF THE BILL ON WHICH NO LOCAL TAXES AND DUTY WAS CHARGED. THE BILLS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE FO UND TO BE WITHOUT DISCOUNT AND AMOUNT OF BILLS WERE ENTERED IN PURCHASES AND SALES ACCOUNT. THE ASSESSING OFFICER ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 5 FURTHER OBSERVED THAT CREDIT NOTES ON OTHER WERE AL LOWED AS AN INCENTIVE BY THE VARIOUS COMPANIES TO BOOST UP THEIR SALES AND AFTER ACHIEVE MENT OF CERTAIN TARGETS, THE SAME WAS ALLOWED WHICH DIRECTLY HAD NO EFFECT ON PURCHASE PR ICE. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT THE ASSESSEE HAD WRONGLY CREDITED TH E AMOUNT OF CREDIT NOTES IN TRADING ACCOUNT TO REDUCE THE VALUE OF CLOSING STOCK TO THE TUNE OF RS.7,15,174/-. 13. BEFORE COMMISSIONER OF INCOME-TAX (APPEALS), IT WAS SUBMITTED THAT THE ASSESSEE HAD MAINTAINED QUANTITATIVE DETAILS OF CLOSING STOC K AND, THEREFORE, THERE WAS NO QUESTION OF UNDERVALUING THE CLOSING STOCK. THE ASSESSEE FI LED THE DETAILS OF CREDIT NOTES RECEIVED FROM VARIOUS PARTIES. THE COMMISSIONER OF INCOME-T AX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE OBSERVED THAT THER E APPEARED TO BE A COMPLETE MISUNDERSTANDING OF THE FACTS BY THE ASSESSING OFFI CER. THE ASSESSEE HAD RIGHTLY CLAIMED THAT CREDIT NOTES ON ACCOUNT OF INCENTIVE FOR REACH ING THE SPECIFIED TARGETS CAN BE ISSUED ONLY AT THE END OF THE YEAR WHEN TARGETS HAVE BEEN ACHIEVED AND, THEREFORE, IF SUCH CREDIT NOTES WERE REDUCED FROM THE BILLS OF THE PURCHASES THEN THERE WAS NOTHING WRONG. SUCH CREDIT NOTES WERE EITHER TO BE REDUCED FROM THE TOT AL COST OF THE PURCHASES OR SHOWN ON THE CREDIT SIDE OF TRADING ACCOUNT. BOTH THE TREATMEN TS HAD THE SAME EFFECT ON GROSS PROFIT. SUCH CREDIT NOTES DID NOT AFFECT THE VALUATION OF C LOSING STOCK BECAUSE THE CLOSING STOCK WAS PHYSICALLY COUNTED AND VALUED AT THE YEAR END A ND SAME HAD BEEN CLAIMED TO HAVE BEEN DONE BY THE ASSESSEE . THE COMMISSIONER OF IN COME-TAX (APPEALS) IN VIEW OF ABOVE FACTS DELETED THE ADDITION. 14. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAD RECEIVED CREDIT NOTES FROM VARIOUS PARTIES WHICH HAS BEEN CREDITED IN THE TRADING ACCOUNT. THERE IS NO DOUBT THAT CREDIT NOTES WERE RECEIVED BY THE ASSESSEE. THE CREDIT NOTES RECEIVED BY THE ASSESSEE CAN EITHE R BE REDUCED FROM PRODUCE OR CREDITED TO THE P&L A/C. IN EITHER WAY, IT WILL NOT AFFECT THE GROSS PROFIT EARNED BY THE ASSESSEE. THE CREDIT NOTES RECEIVED BY THE ASSESSEE WILL NOT IN ANY WAY AFFECT THE CLOSING STOCK WHICH IS MAINTAINED BY THE ASSESSEE QUANTITATIVELY. THEREFORE, IN OUR CONSIDERED OPINION, THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIF IED IN DELETING THE ADDITION ON ACCOUNT OF CREDIT NOTES. ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 6 15. THE LAST ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.3,52,340/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECUR ED LOANS. THE FACTS OF THE CASE RELATING TO THIS GROUND ARE THAT DURING THE YEAR U NDER CONSIDERATION, THE ASSESSEE HAD TAKEN UNSECURED LOANS OF RS.9,14,190/- FROM VARIOUS PARTIES IN CASH OUT OF WHICH THE ASSESSING OFFICER MADE ADDITION OF RS.3,52,340/- AN D ACCEPTED THE BALANCE LOAN. 16. ON APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), IT WAS SUBMITTED THAT THE LOANS WERE TAKEN BY THE ASSESSEE FROM VARI OUS AGRICULTURIST AGAINST WHICH THE PURCHASES WERE MADE BY THEM. IT WAS ALSO SUBMITTED THAT IN SOME OF THE CASES NOTICES COULD NOT BE SERVED AS THE PERSONS WERE NOT AVAILA BLE AT THE TIME WHEN ENQUIRY LETTERS WERE SENT. THE ASSESSEE EXPLAINED THE CREDITS WITH REFERENCE TO EVERY PERSON. THE EXPLANATION OFFERED BY ASSESSEE WAS SENT TO THE AS SESSING OFFICER FOR HIS COMMENTS. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDER ING THE SUBMISSIONS MADE BY THE ASSESSEE AND REMAND REPORT SUBMITTED BY THE ASSESSI NG OFFICER DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSIONS OF THE ASSESSEE. THE TOTAL ADDITION WAS MADE FOR RS.3,52,340/- ON ACCOUN T OF UNSECURED LOANS OUT OF WHICH IN THE REMAND REPORT, THE ASSESSING OFFICER H AS NOT FOUND ANYTHING INCRIMINATING OR WRONG EXCEPT THE 8 PARTIES, WHICH DID NOT APPEAR BEFORE HIM OR SUMMONS COULD NOT BE SERVED, THEREFORE, THE DISPUTE IS REDUCED TO THE LOAN TAKEN FROM 8 PARTIES OUT OF THE 8 PARTIES ALSO LOAN FROM SH. TARA SINGH RS.16,900/- AND SHRI MANGAL SINGH, RS.19,200/- HAS ALREADY BEEN ACC EPTED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER AND IN THE REMAND REPORT DATED 31.12.2007 ALSO, THE ASSESSING OFFICER HAS FOUND TH E LOAN FROM BOTH THESE PARTIES IN ORDER AFTER CONSIDERING THE AFFIDAVITS AND OTHER DOCUMENTS, THEREFORE, THE DISPUTE IS FURTHER REDUCED TO 6 PARTIES WHICH ARE R EVENUE DISCUSSED BELOW:- 1. SH. AMRIK SINGH S/O SH. BALWANT SINGH RS.19,00 0/- 2. SH. PAWAN KUMAR S/O BANARASI DASS RS.19,720/- 3. SJ. BHAGWANT SINGH S/0 SH. THJAKUR SINGH RS.19 ,900/- 4. SH. TONY SHARMA ALIAS JAGDISH S/O SH. RAM KUMAR RS.18,710/- 5. SH. MUKESH SHARMA S/O SH. RAM KUMAR RS.18,750/ - 6. SH. MOHAN LAL S/O MILKI RAM RS.19,470/- RS.1,15,640/- IN ALL THE ABOVE SIX CASES, SUMMONS COULD NOT BE SE NT BY THE ASSESSING OFFICER EITHER BECAUSE OF DEATH OR CHANGE OF ADDRESS OR INC OMPLETE ADDRESS OF THE CREDITORS BUT AS IS CLEAR FORM THE REPORT OF THE AS SESSING OFFICER AND THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER DID NOT CONTACT THE ASSESSEE FOR GIVING NEW ADDRESS OR COMPLETE ADDRESS AT THE T IME OF INVESTIGATION FOR ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 7 SENDING THE REMAND REPORT, THEREFORE, THE ASSESSEE HAS SUBMITTED THE COMPLETE AND PRESENT ADDRESS IN ALL THE ABOVE SIX CASES WITH THE IR AFFIDAVITS, IDENTITY PROFIT AND EVIDENCES FOR LAND HOLDING. IN HIS COMMENTS DATED 31.12.2007, ASSESSING OFFICER HAS NOT GIVEN ANY REASON AS TO WHY THE ASSE SSEE WAS NOT CONTACTED IN THESE CASES WHEN THE SUMMONS COULD NOT BE SERVED. HE HAS STATED THAT THE ADDITIONS APPEARS TO BE IN ORDER IN THESE CASES BUT IN VIEW O F FRESH EVIDENCES PRODUCED BY THE ASSESSEE, THE ISSUE MAY BE DECIDED ACCORDINGLY. IN THE CASE OF AMRIK SINGH, HE HAS OBJECTED THAT HE HAS PETTY LAND HOLDING, WHE REAS , AS PER AFFIDAVIT AND THE EVIDENCE FILED BY THE ASSESSEE HE IS THE OWNER OF 8 .5 ACRES AGRICULTURE LAND WITH HIS FATHER WHICH IS JOINTLY CULTIVATED BY THE FAMIL Y AND IN SUBSEQUENT YEAR, HE HAS PURCHASED PESTICIDES FOR RS.39,000/- AGAINST WHICH THE ADVANCE HAS BEEN ADJUSTED. THEREFORE, HIS CREDITWORTHINESS AND THE LOAN IS PRO VED. IN THE CASE OF PAWAN KUMAR ALSO, THE LAND HOLDING IS 5 ACRES BUT THE ASS ESSING OFFICER HAS SAID THAT IT IS IN THE NAME OF HIS FATHER BUT THE ASSESSEE HAS SUBM ITTED THAT IT IS THE FAMILY LAND WHICH IS JOINTLY CULTIVATED BY THE FAMILY AND THEY HAVE ALSO CULTIVATED ANOTHER 10 ACRE LAND WHICH WAS TAKEN ON LEASE AND THEREFORE, G IVING ADVANCE OF RS.19,700/- IS VERY REASONABLE AND ACCEPTABLE, PARTICULARLY WHE N THE ASSESSING OFFICER HAS HIMSELF ACCEPTED CREDITWORTHINESS IN OTHER CREDITOR S WHERE THE LAND HOLDING IS FAR THAT 5 ACRES. IN THE CASE OF BHAGWANT SINGH WHO AHS ALREADY EXPIRED, HIS SON SH. DAVENDER SINGH FILED THE AFFIDAVIT WITH FARD JAMABA NDI. THOUGH SH. BHAGWNT SINGH WAS OWNER OF 2.5 ACRE OF LAND ONLY BUT HE HAD CULTIVATED ANOTHER 10 ACRES ON LEASE AS PER THE AFFIDAVIT FILED BY THE SON OF S . BHAGWANT SINGH AND IN THE SUBSEQUENT YEAR THE ADVANCE OF RS.19,990/- HAS BEEN ADJUSTED AGAINST THE PURCHASE OF PESTICIDES FOR RS.26,221/-. THEREFORE, THE TRANSACTION IS GENUINE AND ACCEPTED. IN THE CASE OF TONY SHARMA AND MUKESH SH ARMA, BOTH ARE REAL BROTHERS, FATHERS NAME WAS NOT GIVEN, THEREFORE, T HE SUMMONS COULD NOT BE SERVED BUT THEY HAVE FILED DOCUMENTS OF LAND HOLDIN G OF 12 ACRES IN THE NAME OF THEIR FATHER AND THE FACT THAT IN SUBSEQUENT YEAR, MUKESH SHARMA HAD PURCHASED PESTICIDES FOR THE ASSESSEE FOR RS.27,040/- AGAINST WHICH THE ADVANCE WAS ADJUSTED, THEIR LOAN TRANSACTION APPEARS TO BE GENU INE AND THEREFORE, ACCEPTED. IN THE CASE OF MOHAN LAL, HE LIVES WITH HIS GRANDMOTHE R, WHO OWNS 3 ACRES AND HE HAS TAKEN 5 ACRES ON LEASE, THEREFORE, IT CANNOT BE SAID THAT HE DID NOT HAVE THE MEANS TO GIVE A SMALL LOAN OF RS.19,470/-, THEREFO RE, THE ADVANCE BEING A SMALL AMOUNT IS ACCEPTED. 17. BEFORE US, LD.SR.DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND ON THE OTHER HAND LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF T HE COMMISSIONER OF INCOME-TAX (APPEALS). 18. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEA LS) , WE FIND THAT AFTER REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, THE CONT ROVERSY REMAINED ABOUT 6 PERSONS FROM WHOM THE LOAN OF RS.1,15,640/- WAS RECEIVED. LD.COMMISSIONER OF INCOME-TAX ITA NO. 776 (DEL) OF 2008 (A.Y. : 2003-04) 8 (APPEALS) HAS DISCUSSED EACH AND EVERY AMOUNT SHOWN AS CASH CREDIT AS ON THE LAST DAY OF THE ACCOUNTING YEAR. HE HAD RECORDED A FINDING THA T IN MAJORITY OF THE CASES THE CASH CREDIT APPEARING IN THEIR NAMES WERE SQUARED UP BY PURCHASE OF PESTICIDES. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DISCUSSED ELABORATELY IN HIS ORDER. IN VIEW OF THE FINDINGS BY THE COMMISSIONER OF INCOME-TAX (APP EALS), IN OUR CONSIDERED OPINION, NO ADDITION COULD BE MADE. ACCORDINGLY, WE DO NOT FIN D ANY INFIRMITY IN DELETING THE ADDITION ON ACCOUNT OF CASH CREDITS APPEARING THE B OOKS OF ACCOUNT OF THE ASSESSEE. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 20. ORDER PRONOUNCED IN OPEN COURT ON 30/09/2009. [ I.P. BANSAL ] [ K. D. RANJA N ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : SEPT. 30, 2009. *SKB* COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), KARNAL. 5. DIT(DR), ITAT, NEW DELHI. BY ORDER ASSISTANT REGISTRAR, ITAT.