DCIT, CC-X, KOLKATA, Kolkata V. M/s Manasi Exim (P) Ltd., Kolkata

ITA 787/KOL/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8424 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: N O N E
• Keywords: Accommodation entries; Retraction
• Section: 143(3); 131

Judgement Text

I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NOS. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 DEPUTY COMMISSIONER OF INCOME TAX,...... .........APPELLANT CENTRAL CIRCLE-X, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- M/S. MANASI EXIM (P) LIMITED,...................... .............................RESPONDENT 2B, GRANT LANE, KOLKATA-700 012 [PAN: AAECM 3160 C] APPEARANCES BY: SHRI RADHEY SHYAM, CIT (D.R.), FOR THE APPELLANT N O N E, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JULY 11, 2019 DATE OF PRONOUNCING THE ORDER : JULY 17, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTR AL-I, KOLKATA DATED 14.01.2014 FOR A.Y. 2006-07. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY. T HE INVESTIGATION CARRIED OUT BY THE DEPARTMENT OF INCOME TAX (INVEST IGATION), KOLKATA REVEALED THAT SOME ENTITIES WERE INVOLVED IN PROVID ING ACCOMMODATION ENTRIES TO VARIOUS COMPANIES BASED IN MUMBAI, WHICH IN TURN HAD USED THE SAID FUNDS FOR PAYMENTS TO MADHIPURA MERCANTILE COOPERATIVE BANK AT MUMBAI, WHICH WAS CONTROLLED BY SHRI KETAN PAREKH. SINCE THE ASSESSEE- COMPANY WAS ONE OF SUCH ENTITIES, THE STATEMENT OF ITS DIRECTOR SHRI AJAY AGARWAL WAS RECORDED UNDER SECTION 131 BY THE DDIT( INVESTIGATION), I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 2 KOLKATA ON 15.12.2006. IN THE SAID STATEMENT GIVEN ON OATH, SHRI AJAY AGARWAL ACCEPTED THAT HE HAD GOT CASH OF EQUIVALENT AMOUNT FROM THE MUMBAI BASED COMPANIES BELONGING TO SHRI KETAN PARE KH GROUP AND AFTER DEPOSITING THE SAID CASH INTO THE BANK ACCOUNT OF T HE ASSESSEE-COMPANY, CHEQUES WERE ISSUED TO THE SAID COMPANIES. HE ALSO FURNISHED A LIST OF CHEQUES SO ISSUED AGAINST CASH THAT HAD BEEN RECEIV ED BY HIM. ALTHOUGH SHRI AJAY AGARWAL SUBSEQUENTLY FILED AN AFFIDAVIT R ETRACTING HIS STATEMENT, THE ASSESSING OFFICER DID NOT ACCEPT THE SAME ON TH E BASIS OF THE ENQUIRIES CONDUCTED BY THE INVESTIGATION WING ON A TEST-CHECK BASIS, WHICH REVEALED THAT CASH WAS DEPOSITED IN VARIOUS BANK AC COUNTS IN DIFFERENT STAGES. ACCORDING TO THE ASSESSING OFFICER, THIS FA CTUAL POSITION SUBSTANTIATED THE STATEMENT OF SHRI AJAY AGARWAL, D IRECTOR OF THE ASSESSEE-COMPANY THAT CASH WAS INDEED RECEIVED BY T HE ASSESSEE- COMPANY IN LIEU OF CHEQUES GIVEN TO VARIOUS COMPANI ES BELONGING TO KETAN PAREKH GROUP. HE ACCORDINGLY HELD THAT ACCOMM ODATION ENTRIES WERE GIVEN BY THE ASSESSEE-COMPANY TO VARIOUS MUMBA I BASED COMPANIES BELONGING TO KETAN PAREKH GROUP AND SINCE THE ACCOM MODATION ENTRIES SO GIVEN DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 200 6-07 AGGREGATED TO RS.33,66,00,000/-, HE ADDED THE COMMISSION INCOME @ 2% AMOUNTING TO RS.67,32,000/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED FOR A.Y. 2006-07 UNDER SECTION 143(3) VID E AN ORDER DATED 31.12.2008. IN THE ASSESSMENT SO MADE, HE ALSO MADE AN ADDITION OF RS.33,66,00,000/- IN THE HANDS OF THE ASSESSEE ON P ROTECTIVE BASIS OBSERVING THAT THE UNEXPLAINED INCOME TO THAT EXTEN T IN THE FORM OF CASH GIVEN BY THE MUMBAI BASED COMPANIES WAS ASSESSABLE ON SUBSTANTIVE BASIS IN THE HANDS OF THE SAID COMPANIES. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) FOR A.Y. 2006-07, APPEAL WAS PREFERRED BY TH E ASSESEE-COMPANY BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING T HE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE O N RECORD, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSES SING OFFICER TO THE I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 3 TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2006-07 ON AC COUNT OF THE ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COM PANIES IN THE FORM OF COMMISSION INCOME AT THE RATE OF 2% AS WELL AS F URTHER ADDITION ON ACCOUNT OF PROTECTIVE BASIS FOR THE FOLLOWING REASO NS GIVEN IN PARAGRAPH NO. 6 OF HIS IMPUGNED ORDER:- 6. I HAVE PERUSED THE RELEVANT ORDERS AND CONSIDE RED THE MATERIAL PLACED ON RECORD. I FIND FROM THE APPEAL F OLDER THAT IN COURSE OF THE APPELLATE PROCEEDINGS, MY LEARNED PREDECESSOR TRIED TO ASCERTAIN ABOUT THE CASES WHER E SUBSTANTIVE ADDITIONS WERE MADE CORRESPONDING TO TH E PROTECTIVE ADDITION IN THE PRESENT CASE; AND ALSO, ABOUT THE FATE OF THE APPEALS IN THOSE CASES. THE LD CIT(A) C ALLED FOR THE REPORT VIDE HIS LETTER DATED 23-07-2009 WHICH WAS F OLLOWED BY REMINDERS DATED 17-08-2010, 13-07-2011, 30-10-2013 AND 19- 11-2013. HOWEVER, THOUGH A SUBSTANTIAL PERIOD OF 4 & 1/2 YEARS HAS ELAPSED, NOTHING HAS BEEN HEARD IN THIS R EGARD FROM THE AO. IN THIS FACTUAL BACKGROUND; GIVEN THE FACTS OF THE CASE AND THE FINDINGS OF THE AO IN HIS ASSESSMENT ORDER; AND ALSO, THE DECISIONS OF THE HON'BLE BENCHES OF THE JURISDI CTIONAL ITAT IN SIMILAR CASES INVOLVING IDENTICAL FACTS AND CIRC UMSTANCES, THE PRESENT APPEAL IS NOW BEING DECIDED ON THE BASI S OF THE MATERIAL AVAILABLE ON RECORD. I FIND THAT THE AO HA S MADE THE ADDITIONS ON THE BASIS OF THE ADMISSION MADE BY THE DIRECTOR BEFORE. THE DDIT(INV) WHICH WAS LATER RETRACTED. IT IS A SETTLED LEGAL PROPOSITION THAT A MERE ADMISSION WHICH IS LA TER RETRACTED AND WHICH IS NOT CORROBORATED OR SUPPORTE D BY ANY INDEPENDENT MATERIAL CANNOT BE MADE THE BASIS FOR A DDITION. ONCE THE ADMISSION MADE BY THE DIRECTOR WAS RETRACT ED, THE ONUS WAS ON THE AO TO BRING POSITIVE MATERIAL ON RE CORD WHICH COULD CORROBORATE OR SUPPORT THE ADMISSION. BUT, IN THE PRESENT CASE, NO SUCH MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO. ON THE CONTRARY, THE AO HAS SIMPLY REJECTED THE RETRACTION WITHOUT ASSIGNING ANY REASON. THE AO HAS NOT EVEN DISCUSSED IN HIS ASSESSMENT ORDER AS TO WHY THE RET RACTION MADE BY THE DIRECTOR THROUGH A SWORN AFFIDAVIT WAS NOT ACCEPTABLE TO HIM. MOREOVER, THE AO HAS BROUGHT ON RECORD NO INDEPENDENT MATERIAL WHICH COULD POSSIBLY CORROBORA TE OR SUPPORT THE ADMISSION MADE EARLIER BY THE DIRECTOR OF THE ASSESSEE COMPANY. IN THIS FACTUAL BACKGROUND, I AM OF THE CONSIDERED VIEW THAT THE AO HAS ERRED IN LAW AS WEL L AS ON FACTS IN RESTING HIS ASSESSMENT ON THE ADMISSION OF THE DIRECTOR WHICH WAS LATER RETRACTED AND WHICH WAS NO T CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERI AL ON RECORD. I ALSO FIND FROM THE ASSESSMENT ORDER THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH WAS MADE BY THE AO O N PROTECTIVE BASIS. THE AO HAS HIMSELF GIVEN THE FIND ING IN HIS ASSESSMENT ORDER THAT THE ASSESSEE COMPANY HAD ISSU ED CHEQUES BY TAKING EQUAL AMOUNT OF CASH FROM VARIOUS COMPANIES; AND THAT, SUCH CASH WAS ASSESSABLE AS UN EXPLAINED I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 4 INCOME IN THE HANDS OF THOSE COMPANIES. THE AO HAS THEN ADDED THE SAME CASH ON PROTECTIVE BASIS AS UNEXPLAI NED INCOME OF THE ASSESSEE COMPANY WITHOUT ASSIGNING AN Y CONCRETE REASONS. I FIND NO' BASIS OR JUSTIFICATION FOR THE AO TO CONSIDER ON PROTECTIVE BASIS SUCH CASH AS UNEXPLA INED INCOME OF THE ASSESSEE COMPANY WHICH HE HIMSELF HELD WAS A SSESSABLE AS UNEXPLAINED INCOME IN THE HANDS OF THE VARIOUS C OMPANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. THE ADDITION ON PROTECTIVE BASIS ON ACCOUNT OF UNEXPLAI NED CASH BY THE AO CONTRADICTS HIS OWN FINDINGS THAT SUCH CA SH WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE HANDS OF TH E VARIOUS COMPANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. ABOVE ALL, IDENTICAL ADDITIONS MADE BY THE AO IN SIMILAR CASES WERE DELETED BY MY LEARNED PREDECESSO R AS WELL AS BY THE HON.BLE BENCHES OF THE JURISDICTIONAL ITA T. IN OTHER WORDS, SIMILAR ADDITIONS BASED ON THE ADMISSION OF THE DIRECTOR OF THE COMPANY WHICH WAS LATER RETRACTED W AS DELETED BY THE JURISDICTIONAL ITAT IN THE ASSESSMEN T OF SUCH COMPANY. IN THESE CASES, THE DIRECTOR OF THE COMPAN Y MADE ADMISSION REGARDING PROVIDING ACCOMMODATION ENTRY I N LIEU OF CASH WHICH WAS LATER RETRACTED. THOUGH THE AO MADE SIMILAR ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH AND COMMIS SION INCOME IN THE CASE OF THE COMPANY, THE SAME WAS DEL ETED BY THE LD CIT(A) AS WELL AS BY THE JURISDICTIONAL ITAT . THE ISSUES IN THE' PRESENT APPEAL ARE THUS COVERED BY THE ORDE RS OF THE HON'BLE BENCHES OF THE JURISDICTIONAL ITAT WHEREIN SIMILAR ADDITIONS, MADE UNDER IDENTICAL FACTS AND CIRCUMSTA NCES, WERE DELETED. RESPECTFULLY FOLLOWING THE DECISIONS OF TH E JURISDICTIONAL ITAT, IT IS TO, BE HELD THAT THE ADD ITIONS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSIO N INCOME IS NEITHER SUSTAINABLE IN LAW NOR ON FACTS. THE ADD ITIONS OF RS.33,66,00,000/- AND RS.67,32,000/- IS DIRECTED TO BE DELETED. GROUND NO. 1 & 2 ARE ALLOWED. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS) G IVING RELIEF TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THE REVE NUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF LD. D.R. AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUES R AISED IN GROUNDS NO. 1 & 2 OF THIS APPEAL RELATE TO THE DELETION BY THE LD . CIT(APPEALS) OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COM PANIES ON PROTECTIVE BASIS AND THE DELETION BY THE LD. CIT(AP PEALS) OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISS ION INCOME ALLEGEDLY I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 5 RECEIVED BY THE ASSESSEE FOR GIVING ACCOMMODATION E NTRIES. IT IS OBSERVED THAT THE SIMILAR ISSUES WERE INVOLVED IN SOME OTHER CASES AND ALL THESE CASES WERE ADJOURNED IN THE PAST AND ALSO BLOCKED F OR SOME PERIOD FOR GETTING THE INFORMATION ABOUT THE STATUS OR OUTCOME OF THE CASES WHERE THE SIMILAR AMOUNTS WERE ADDED ON SUBSTANTIVE BASIS . INSPITE OF SUFFICIENT TIME GIVEN TO BOTH THE PARTIES, THEY HAVE FAILED TO FURNISH THE SAID INFORMATION. IT IS WELL SETTLED THAT PROTECTIVE ASS ESSMENT IS PERMISSIBLE IN LAW AND IN CASE A DOUBT OR AMBIGUITY ABOUT REAL ENT ITY IN WHOSE HANDS A PARTICULAR INCOME IS TO BE ASSESSED, THE ASSESSING AUTHORITY IS ENTITLED TO HAVE RECOURSE TO MAKE A PROTECTIVE ASSESSMENT. AS H ELD BY THE HONBLE SUPREME COURT IN THE CASE OF LALJI HARIDAS VS.- IT O (43 ITR 387), THE OFFICER MAY, WHEN IN DOUBT, TO SAFEGUARD THE INTERE ST OF THE REVENUE CAN ASSESS IT IN MORE THAN ONE HAND BUT THIS PROCEDURE CAN BE PERMITTED ONLY AT THE STAGE OF ASSESSMENT. PROTECTIVE ASSESSMENT B ECOMES REDUNDANT WHEN THE SUBSTANTIVE ASSESSMENT BECOMES FINAL AND I F THE SUBSTANTIVE ASSESSMENT FAILS, IT IS PROTECTIVE ASSESSMENT WHICH IS TO BE TREATED AS SUBSTANTIVE. KEEPING IN VIEW THIS COROLLARY BETWEEN THE SUBSTANTIVE ASSESSMENT AND PROTECTIVE ASSESSMENT, AN APPEAL AGA INST THE PROTECTIVE ASSESSMENT SHOULD ORDINARILY AWAIT THE OUTCOME OF T HE SUBSTANTIVE ASSESSMENT SO THAT THE PROTECTIVE ASSESSMENT CAN BE INCONFORMITY WITH THE SUBSTANTIVE ASSESSMENT. IN THE CASE OF CIT VS. - SURENDRA GULAB CHAND MODI (140 ITR 517), THE APPEAL ARISING OUT OF THE P ROTECTIVE ASSESSMENT WAS DISPOSED OF BY THE APPELLATE AUTHORITY I.E. TRI BUNAL VACATING THE PROTECTIVE ASSESSMENT WITHOUT WAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT , WHICH MATTER WAS PENDING IN THE HONBLE SUPREME COURT. THE HONBLE G UJARAT HIGH COURT HELD THAT THE TRIBUNAL WAS NOT JUSTIFIED IN PROCEED ING WITH THE MATTER AND IN DISPOSING OF IT INSTEAD OF BLOCKING IT TILL THE DISPOSAL OF THE MATTER PENDING IN THE HONBLE SUPREME COURT IN ORDER TO BR ING IT INCONFORMITY WITH THE VIEW OF THE HONBLE SUPREME COURT. THE HON BLE GUJARAT HIGH COURT ACCORDINGLY DIRECTED THE TRIBUNAL TO KEEP THE MATTER ALIVE AND I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 6 PENDING AWAITING THE DECISION OF THE HONBLE SUPREM E COURT IN THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT . 6. IN THE PRESENT CASE, THE LD. CIT(APPEALS) DID NO T AWAIT THE OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASS ESSMENT AND SINCE THE SAID INFORMATION WAS NOT FORTHCOMING EVEN AFTER A C ONSIDERABLE PERIOD FROM THE CONCERNED ASSESSING OFFICER, HE PROCEEDED TO DISPOSE OF THE APPEAL ARISING FROM THE PROTECTIVE ASSESSMENT BY HI S IMPUGNED ORDER AND DELETED THE ADDITION MADE ON PROTECTIVE BASIS WITHO UT AWAITING THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTAN TIVE ASSESSMENT. KEEPING IN VIEW THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS.- SURENDRA GULAB CHAND MODI (SUPRA), WE HOLD THAT THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDI TION MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS IN THE YEAR U NDER CONSIDERATION WITHOUT AWAITING FOR THE FINAL OUTCOME OF THE PROCE EDINGS ARISING FROM THIS SUBSTANTIVE ASSESSMENT. WE, THEREFORE, SET ASI DE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND REMIT THE MATTER BACK TO HIM FOR KEEPING IT ALIVE AND PENDING TILL THE OUTCOME OF TH E PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT. 7. AS REGARDS THE ISSUE RELATING TO THE ADDITION MA DE ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSESSE E FOR GIVING ACCOMMODATION ENTRIES, WE FIND THAT THIS ISSUE IS C ONSEQUENTIAL TO THE ISSUE RELATING TO THE ADDITION MADE ON PROTECTIVE B ASIS ON ACCOUNT OF ACCOMMODATION ENTRIES ALLEGEDLY GIVEN BY THE ASSESS EE-COMPANY TO THE MUMBAI BASED COMPANIES. SINCE THE SAID ISSUE IS REM ITTED BACK BY US TO THE LD. CIT(APPEALS), WE ALSO REMIT THE CONSEQUENTI AL ISSUE RELATING TO ADDITION ON ACCOUNT OF COMMISSION INCOME BACK TO TH E LD. CIT(APPEALS) FOR DECIDING THE SAME AFRESH. GROUNDS NO. 1 & 2 OF THE REVENUES APPEALS FOR THE YEAR UNDER CONSIDERATION ARE ACCORDINGLY TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 7 8. AS REGARDS THE REMAINING ISSUE RAISED IN GROUND NO. 3 OF THE REVENUES APPEAL FOR A.Y. 2006-07 RELATING TO DELET ION BY THE LD. CIT(APPEALS) OF THE ADDITION OF RS.5,08,55,000/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSITS FOUND TO BE MAD E IN THE BANK ACCOUNT OF THE ASSESSEE, IT IS OBSERVED THAT THE LD. CIT(AP PEALS) HAS DELETED THE SAID ADDITION FOR THE FOLLOWING REASONS GIVEN IN PA RAGRAPH NO. 8 OF HIS IMPUGNED ORDER:- 8. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE REMAND REPORT OF THE A.O. IT WAS CONTENDED BEFORE M E THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WAS VERI FIABLE FROM THE CASH BOOK OF THE ASSESSEE COMPANY. IT WAS FURTHER CONTENDED THAT THE CASH BALANCES AVAILABLE IN THE CASH BOOK WERE DUE TO CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCOUNT (WHICH WAS VERIFIABLE FROM THE BANK STATEMENT) AND. THE SALE PROCEEDS OF SHARES (WHICH WAS DULY SUPPORTED BY SALES INVOICES) . THE AO HAS ADMITTED IN HIS REMAND REPORT THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VERIFIABLE FROM T HE CASH BOOK WHICH WAS PRODUCED BEFORE HIM IN COURSE O F THE REMAND PROCEEDINGS. THE AO HAS ALSO ADMITTED TH AT THE SALE PROCEEDS OF SHARES REFLECTED IN THE CASH B OOK ARE DULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PRODUCED BEFORE HIM. THE AO HAS FOUND NO DEFECT IN THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOT POINTED OUT ANY RECEIPTS RECORDED IN THE CASH BOOK WHOSE SOURCE WAS NOT EXPLAINED. THE REMAND REPORT O F THE AO CONTAINS NO ADVERSE FINDING OR REMARK ABOUT THE CASH BOOK. IN THIS FACTUAL BACKGROUND, THE ONLY CONCLUSION THAT CAN POSSIBLY BE DRAWN IS THAT THE C ASH DEPOSITS IN THE BANK ACCOUNT ARE EXPLAINED WITH REFERENCE TO THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOTED IN HIS REMAND REPORT THAT APART FROM T HE BANK STATEMENT, CASH BOOK AND THE SALES INVOICES, T HE ASSESSEE COULD PRODUCE NO OTHER EVIDENCE FOR VERIFICATION. BUT THEN, IT HAS NOT BEEN CLARIFIED B Y THE AO AS TO WHAT MORE EVIDENCE HE REQUIRED THE ASSESSEE T O PRODUCE FOR VERIFICATION. I AGREE WITH THE LD AR TH AT THERE IS NO ADVERSE FINDING IN THE REMAND REPORT OF THE AO. THE AO HAS CATEGORICALLY ADMITTED THAT THE BANK STATEMENT, CASH BOOK AND SALES INVOICES WERE PRODUC ED BEFORE HIM AND THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VERIFIABLE FROM THE CASH BOOK. I AM THEREFORE OF THE CONSIDERED VIEW THAT SUCH CASH DEP OSITS IN THE BANK ACCOUNT WHICH WERE DULY VERIFIABLE FROM THE I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 8 CASH BOOK OF THE ASSESSEE COMPANY COULD NOT BE TREA TED AS ITS UNDISCLOSED INCOME. THE ADDITION OF RS.5,08,55,000/- IS DELETED. GROUND NO 3 IS ALLOWED . 9. IT IS OBSERVED THAT THE CASH DEPOSITS FOUND TO B E MADE IN THE BANK ACCOUNT OF THE ASSESSEE AGGREGATING TO RS.5,08,55,0 00/- WERE TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED AND AN ADDITIO N TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. DU RING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), IT WAS CLAIMED BY THE ASSESSEE THAT THE SAID DEPOSITS IN BANK ACCOUNT WER E MADE FROM THE CASH BALANCES AVAILABLE IN THE CASH BOOK AND THIS FACTUA L POSITION WAS VERIFIABLE FROM THE CASH BOOK REGULARLY MAINTAINED BY THE ASSESSEE. IN ORDER TO VERIFY THIS CLAIM OF THE ASSESSEE, THE MAT TER WAS REMANDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER. DURING T HE COURSE OF REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSES SEE-COMPANY PRODUCED ITS BANK ACCOUNT, CASH BOOK AS WELL AS THE CONCERNE D SALES INVOICES AND FROM VERIFICATION OF THE SAME, THE ASSESSING OFFICE R ADMITTED IN HIS REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS) THA T THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VERIFIABLE FROM THE CASH BOOK PRODUCED BY THE ASSESSEE. HE ALSO ADMITTED THAT THE AVAILABILITY OF CASH FOR DEPOSITS MADE IN THE BANK ACCOUNT AS REFLECTED IN THE CASH BOOK W AS DULY SUPPORTED BY THE RELEVANT SALES INVOLVES AS WELL AS EVIDENCE SHO WING ALLOTMENT OF SHARES. AS EMPHASIZED BY THE LD. CIT(APPEALS) IN HI S IMPUGNED ORDER, THERE WAS NO ADVERSE FINDINGS WHATSOEVER GIVEN BY T HE ASSESSING OFFICER IN HIS REMAND REPORT REGARDING THE AVAILABILITY OF CASH WITH THE ASSESSEE FOR THE DEPOSITS TO BE MADE IN BANK ACCOUNT. AT THE TIME OF HEARING BEFORE US, THE LD. D.R. HAS ALSO NOT BROUGHT ANYTHING ON R ECORD TO REBUT OR CONTROVERT THIS POSITION. WE, THEREFORE, FIND NO JU STIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(AP PEALS) DELETING THE ADDITION OF RS.5,08,55,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALLEGED UNEXPLAINED CASH DEPOSITS FOUND TO BE M ADE IN THE BANK ACCOUNT OF THE ASSESSEE AND UPHOLDING THE SAME, WE DISMISS GROUND NO. 3 OF THE REVENUES APPEAL. I.T.A. NO. 787/KOL/2014 ASSESSMENT YEAR: 2006-2007 M/S. MANASI EXIM (P) LIMITED 9 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 17, 2019 . SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 17 TH DAY OF JULY, 2019 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-X, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 (2) M/S. MANASI EXIM (P) LIMITED, 2B, GRANT LANE, KOLKATA-700 012 (3) COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL- 1, KOLKATA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.