M/s DSG Papers Pvt. Ltd., Patiala V. ACIT/DCIT, Central Circle, Patiala

ITA 83/CHANDI/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1841 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Section: 145; 148; 205; 201; 64; 43; 72; 13; 22

Judgement Text

आयकर अपील य अ धकरण, च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , “ A ” , C H A N D I G A R H B E F OR E SH R I N . K . SA I N I , V I C E P R E SI D E N T & S H R I S U D H A N S HU SR I V A S T A V A , J U D I C I A L M E M B E R आयकर अपील सं./ ITA Nos. 82 to 86/C H D / 2 0 2 2 नधा रण वष / Assessment Years : 2 0 1 3 - 1 4 t o 2 0 1 7 - 1 8 M/s. DSG Papers Pvt. Ltd., 6, Green View Colony, Patiala-147 001. बनाम The ACIT / DCIT, Central Circle, Patiala. थायी लेखा सं./PAN NO: AACCD 1450 A अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से /Assessee by : Shri Sudhir Sehgal, Adv. राज व क ओर से/ Revenue by : Smt. Priyanka Dhar, Sr. DR स ु नवाई क तार#ख/Date of Hearing : 07.06.2022 उदघोषणा क तार#ख/Date of Pronouncement : 29.07.2022 आदेश/Order P er S u d h an sh u S ri va s ta va , J u d i c i a l M e mb e r : A l l th es e a pp e a l s h av e b ee n pr e fe rr e d b y t he A s s e sse e as p er t he fo l l ow i ng d e t ai l s : - S . N o. IT A N o. A s s es s me n t ye a r C I T( A ) o rd e r d at e d 1 82/ C hd / 2 0 2 2 20 13- 1 4 2 4. 12. 2 0 2 1 2 83/ C hd / 2 0 2 2 20 14- 1 5 2 4. 12. 2 0 2 1 3 84/ C hd / 2 0 2 2 20 15- 1 6 2 4. 12. 2 0 2 1 4 85/ C hd / 2 0 2 2 20 16- 1 7 2 4. 12. 2 0 2 1 5 86/ C hd / 2 0 2 2 20 17- 1 8 3 1. 12. 2 0 2 1 ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 2 1. 1 S i nc e t he s e a p pe al s i nv ol ve d i d e n t ic a l i s s ue s , t he y w e r e h e a r d t og e t he r a nd ar e be i ng di s p os e d o ff b y t hi s c o m m o n o rd e r for t h e s a k e o f co n v e n ie nc e . 2. 0 T he fa ct s i n b ri e f f or t h e a s s e ss m e n t ye ar 20 1 3 -1 4 i n I TA N o. 82 / C h d/ 20 2 2 a re t h at t h e a s s e s se e is a P r i va t e L i mit ed C o mp a n y e ng ag e d i n t he b us in es s o f ma nu fa c tu ri ng o f p ap e r a n d p a pe r p r od u ct s . The r e t ur n o f i n c o me fo r th e r el e va nt as s e s s me nt y e ar w as fi l ed on 2 8. 09 . 2 01 3 de c la ri ng a l os s o f Rs . 3, 01 , 960/ - w h er ea s t h e b ook pr o fi t i n te r ms o f s e ct i on 1 15 J B o f t h e Inc o m e T ax A c t, 19 6 1 ( he r e i n a ft e r c a l l e d 't he A c t ') w as co mpu te d a t R s . 3, 2 7, 62, 29 7/ - T he c as e w a s s e le c t e d f or s c ru ti ny . T he as s e s s me nt i n te r ms o f s e ct i o n 14 3( 3 ) o f th e A ct w a s c o mp l e t e d on 20 . 0 3. 2 01 6 at th e re t u rn e d in co m e a nd fu r th er a t a n i nc o me o f R s . 3, 42 , 59, 0 28 /- i n t e r ms o f s ec t i o n 1 1 5J B o f t he A c t. S u bs eq ue nt ly , re v i s i o na ry p r oc ee di n g s w e r e i ni ti a te d f or a s s e s sment y ea r 2 01 3 - 14 u /s 26 3 o f t he A c t a nd v i d e o r d e r d at e d 3 1. 0 8. 20 1 7, t he L d. P r. Co m mi s s i on e r o f I nc o me Ta x (P C I T ) , P a ti a la s e t a s ide t he a s s es s m en t or d e r an d d i r ec t e d t he A s s e s s i ng O ffi c er ( A O ) t o pa s s a fr es h a s s es s men t or d er . T h e a s s e s sme nt s ub s eq ue n t t o t h e re vi s i ona ry pr o c e e d i n gs w a s c o m pl e t e d o n 2 6. 1 2 . 20 18 w h e re i n t h e i n c o m e o f t h e a s s es s e e w as a s s ess e d as pe r t he o ri gi n al as s e s s me nt o rde r p a s s ed u /s 14 3(3 ) o f t he A c t o n 20. 03 . 2 01 6 . 2. 1 M e a nw h i l e, t h e re w a s a s ea r c h a n d s e iz ur e ope r a t io n o n 05 . 0 8. 2 01 6 o n t h e b us i n es s pre mi s e s o f t he a s s es s e e by t he D i re c t ora t e ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 3 G en er al o f G S T I n t el l i g e nc e a n d t h e s ea rc h w a s a ls o co n d uc t ed on o ne S hr i S a nj ay D ha w a n , E x- P r es i de nt o f t he as s e s s ee c omp a ny as w el l as t hr e e - fou r dea l e r s o f t h e a s s es s e e c o mp an y an d i n for m at i on w as pa ss e d on b y t h e I n t el l i g e n ce W i n g o f G S T t o t he I n c o m e Ta x D e par t m e n t t h a t t he a s s es s e e c o m p a ny ha d b e e n a l le g e dl y s upp r es s i ng i t s t ur n ove r by w ay o f no t a c c o un ti ng f or t he s a l es b y un de r i n vo ici ng t h e s a l es . D uri ng t he c ou rs e o f s e a r c h a t t h e re s i d en ti a l pre mi s e s o f S hri S a nj a y D ha w a n , pa r a l le l i n v oi ce s o f go o ds ma n u fa c t ur e d a nd so l d b y t he a s s es s e e c o mp a n y w er e a l le ge d l y r ec ov e re d. T he ev id en c e o f und e r v a l u a t i on o f s a le s w as a l le ge dl y i n t he for m o f s t a t e m en t s o f t hi r d p a rt i es re c or d e d u/ s 14 o f t h e Ce n t ra l E x c is e A c t , 1 94 4. Th er e w as a l s o al l e g e dl y e vi de n c e o f u na c c o un t e d s a l es a nd u n de r - v a l u a t i on o f a c co u n t e d s a l es m a de t o t hi r d p a r t i e s i n t he f or m o f e - ma il c o m mu n ic a ti on b e tw e en t he A s s es s e e Co m pa n y an d t h i r d p a r t i es . S t a t e me n t s o f Sh ri S a nj ay D h a w a n a s w e l l a s one S h r i S h iv C ha r a n La l, t he E x- D i s p a t ch I nc h ar ge o f t h e a s s es s e e co m pa ny w e re a l so r e c o r de d u /s 1 4 o f t he Ce nt ra l E x c i s e A c t , 19 44 w h i c h a ll e g ed ly po i n t e d o u t t ow a rds i s s ua nc e of p a r al l e l i nv oi c es by t h e a s s es s e e c o m p a n y. A s pe r t h e in for ma ti on a va i l a bl e , t he re w as e vi de n c e o f un ac c o unt e d s al e s t o t h i r d p a r t i es i n th e fo r m o f de li ve ry s he e ts e t c . In vi e w o f t hi s i n f or m a t i o n , th e A O pro ce e d e d t o r e o pe n t he a s s es s e e’ s c a s e u/ s 14 8 o f t h e A c t by r e c o rd i n g r eas o ns f o r t he s a me . 2. 2 D u r i n g t he c o u rs e o f re -a s s es s m e nt pr o c e e d i ngs , th e A O p roc e e de d t o re j e c t th e bo ok s o f a c c o u n t m ai nt ai ne d b y th e ass e s s e e u / s 1 45 ( 3) o f t he A c t a n d, th er e a ft e r , pro c e e d e d t o c o m pl e t e t h e re -a s s es s men t a t a n ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 4 i nc o me o f R s . 4 6, 3 6, 74 9 / - a f t e r m ak in g an a d d it i o n o f R s . 31, 40 , 0 21/ - on a c c o un t o f a dd i t io n a l ne t pr o f i t b y ap pl y i n g th e ne t pro fi t r a t e o f 4. 42 %. T h e a l l e ge d u nd i s c lo s e d s a l e s for t h e y e a r w e r e c o m pu t ed a t R s . 3, 62 , 60, 3 31 /- 2. 3 A g gr i e v e d, th e a s se s s e e c a r r i ed t h e m at t e r be f ore L d. F ir s t A ppe l la t e A u t h or it y c ha l l e ng i n g t he r e je c t i o n o f b oo ks o f a cc ou n t a n d a ls o c h a l l en gi ng t h e a d di t i o n on me ri t s . Th e L d. CIT (A ) p ar tl y a l l o w e d t he a ppe al o f t h e a s s e ss ee . T he L d. C I T( A ) u phe ld the a ct i on o f t h e A O i n r e j ec t in g t he b oo ks o f a cc ou n t b ut g av e p ar t r e li e f in r e s pe c t o f a dd i t io n a l ne t p r o fi t b y h o l d i n g t h at t h e a ve r a g e ne t pr o fi t r at e o f 3. 64 % w as t o b e ap pl ie d ra th e r t h an 4 . 4 2 % t he r eb y su s t a ini n g t h e a dd i t i on on l y t o t he ex t e nt o f Rs . 16, 0 2, 7 06 / - . 2. 4 N ow t he a s s es s e e ha s a pp r o a c h ed t h i s T ri bu na l c ha l l e ng i n g th e or d e r o f t h e L d. F i rs t A p pe l l at e A u th or i t y b y r a i s in g t h e f ol l ow i ng gr o un d s o f a p pe a l : 1. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A . O . r eg ar di ng th e r e j ec t i o n of bo oks of ac co u nt s of t h e as s e s s e wi t ho ut c ons i de r i n g t he f a ct s of t he c a s e & m at er i al av a i l ab l e o n r ec or d s . 2. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t h e L d. A . O . r e gar d i n g t h e a dd i t i on of Rs . 16 , 0 2, 7 06 /- , m a de by ap p l y i ng n e t pr o fi t (D e cl ar e d by t he a s s es s e ) @ 4. 42 % o n s up pr e s s ed s al es , i gn o ri n g t he f ac t t ha t th e s ai d bo ok s of a c c o u nt s we r e al r e a d y r ej e ct e d u /s 14 5( 3) o f t he I n co m e T ax A ct , 1 9 61. T hu s su ch ad di ti ons m us t be d e l e t e d by r ev e r s in g th e f in di n gs of t h e CI T ( Ap pe a l . ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 5 3. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f NI L t he L d. A . O . c on fi r m in g t he ad di t i o n wi t ho ut c ons i de r in g t h e f a c t t ha t t he s ai d a dd it i o n i s b as ed o n f i n di n gs of e x ci s e a u t h o r i ti e s a n d t he Id . As s e s s in g of f i c e r has f ai l e d to co n du c t a ny i nd e p e n de nt e n qu i r y i n t he m a t t er a n d N O ad di t i on c an be m a de on t he b a s is of s uc h f i nd i n g s wh e n, E xc i se l aws a nd I nc o m e t ax l aw s ar e t ot al l y i nd e p e n de nt . 4. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n of t h e L d . A . O . by n o t al lo wi n g t he i nt e r es t i nc om e o f R s . 10 , 8 2, 322 /- t o b e r e du c ed f r om n et pr o fi t t o c al cu l a t e ad d it i o n by a pp ly i ng N et P r o f it R at e of 4. 4 2 % o n s up pr e s s e d s al es . 3. 0 In I T A N o. 83/ C h d /2 0 2 2 p e r t ai ni ng t o a s s es s m en t ye ar 20 1 4- 1 5, t he b r ie f fa c t s o f t h e c a s e a re t h a t i n t hi s y ea r, t h e r e t ur n o f i n c o me w a s or i g i n a l l y fi l e d o n 29. 1 1 . 20 14 d e c l a r in g i n c o me o f Rs . 2, 4 6, 9 0, 00 0 / - un der t he no r ma l p ro v i s io ns o f t he A c t a n d in co me of Rs . 3, 52 , 95, 30 2 /- i n t e r ms o f p ro v is i on s o f se c ti on 1 1 5J B o f t h e A c t. Th e a s se ss e e’ s r et ur n w as ori g i n a l l y p ro ce s s ed u / s 1 43 (1 ) o f t he A c t an d, s ubs e qu en t l y, o n re c ei pt o f i n fo r ma t i o n fro m t he D i r e c t or a t e G e neral o f G S T I nt el l i g e n ce w i th r es p e c t o f th e s ea r c h c o nd u c t e d by t h e E x c is e D e p a rt m e nt o n t he a s s es s e e as w el l a s i t s re l a t e d p a r t i e s , th e d e a l e rs a n d cu s t o me rs , t h e a s s es s e e’ s ca s e w as re op e n e d i n t e r m s of s e c t i o n 1 47 r e a d w i th s ec t i o n 14 8 o f t he A c t as w a s d one i n as s e s sme nt y ea r 2 0 13-1 4 a ls o . T he re - a s s es s men t pr o c e ed i n gs w e re co m p l et e d a t a n i nc o me o f Rs . 3, 70 , 15, 8 60 /- a ft er a l l o w i n g t he b e n e fi t o f s e t o ff o f b r ou gh t for w a r d l os s e s fo r as s e s s me nt y e a r 2 0 1 3- 14 a n d a ft e r m ak in g a n a dd i t io n o f Rs . 1, 08 , 88, 1 27 /- i n r e s pe ct o f ad di t i o na l ne t p r o f it ea r n e d by t h e c o mp an y ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 6 by a p pl yi ng n e t pr o fi t ra t e o f 4. 19 % . T h e a ll e g ed u n d i s c l os e d s a l es fo r t he ye a r w e re co m put e d a t Rs . 1, 46 , 9 5, 491 /- by t h e A O . In t hi s ye a r a ls o , t he A O r ej e c t ed th e bo o ks o f a c c ou nt u /s 14 5(3 ) o f t he A c t . 3. 1 A ggr i e v e d, t he a s s e ss ee a p pr oa c he d t h e L d. F ir st A p pel l a t e A ut h or i t y ch al l en g i ng th e r e je c t i o n o f b o o ks o f ac co unt as w el l a s c ha ll e n gi ng t h e ad d it i o n on m e r i ts . I n t hi s y e a r a ls o, t he L d. CI T( A ) pa r t l y a l l ow ed t h e ap p e a l b y up h o l di n g t he r ej e c t io n o f b o o ks o f a c c o u nt bu t g av e re l i e f t o t he a s s es s e e in r e s p e ct o f a d di tio na l n et p r o fi t e a r n e d by a pp ly in g t h e n et p ro fi t r at e o f 3 . 64 % i n pl a c e of 4. 19 % t h er eb y s us t a in i n g th e a dd i t i on o nl y t o t h e e x t e n t o f Rs . 6, 15, 74 1 /- . 3. 2 N ow t he a ss e s s e e h as ap p r oa c he d t hi s Tr ib un a l c h a l l en g i n g t h e or d e r o f t he L d. CI T( A ) b y r a i s in g fo l l o w in g gro u n ds o f a pp e a l :- 1. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n of N IL t he L d . A. O . r ega r di n g t h e r e j e c t i on of b o o k s of ac c o u nt s of t he as s e s s ee wi t ho ut c ons i de r i n g t he f a ct s of t he c a s e & m at er i al av a i l ab l e o n r ec or d s . 2. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t h e L d. A. O . re ga r di ng t he add i t i on of R s . 6 , 15, 741 /- , m a de b y a ppl y i n g ne t p r of it (D e cl ar e d b y th e a s s ess e e ) @ 4. 19 % on s up p r es s e d s al e s , ig nor i ng t h e f ac t t h a t t h e s a id bo ok s of ac c ou nt s we r e a lr e ady r e j e ct e d u/ s 14 5 (3 ) o f t he In c o m e T a x A c t, 1 9 61 . T hus s uc h a dd i ti o n s m us t be de l et e d by r e v e rs i ng th e f i n di n gs o f t he CI T ( Ap pea l) . 3. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f NI L t he L d. A . O . c on fi r m in g t he ad di t i o n wi t ho ut c ons i de r in g t h e f a c t t ha t t he s ai d a dd i t i o n i s b as ed o n f i n di n gs of e x ci s e a u t h o r i ti e s a n d t he Id . As s e s s in g of f i c e r has f ai l e d to co n du c t a ny ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 7 i nd e p e n de nt e n qu i r y i n t he m a t t er a n d N O ad di t i on c an b e m a d e o n t he b as i s of s u c h f i nd i n g s wh e n E xc i se l aws a nd I nc o m e t ax l aw s ar e t ot al l y i nd e p e n de nt . 4. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f L d. A. O . by not al lo wi n g t h e i nt e r es t i nc om e o f R s . 11, 3 5 , 7 72 / - t o b e r e du c e d f ro m ne t pr o fi t t o c al cu l a t e ad d it i o n by a pp ly i ng N et P r o f it R at e of 4. 1 9 % o n s up pr e s s e d s al es . 4. 0 In ITA N o. 84/ Ch d /2 0 22 , fo r a s s es s m en t y e a r 20 15 -1 6 , t he or i g i n a l r et ur n o f i n c o me w a s f il e d o n 3 1 . 10. 2 01 5 dec l a r i ng a n i nc o me o f Rs . 1, 58, 54 , 75 2/ - a nd t he a s s es s men t w as c o mp le t e d u / s 14 3(3 ) o f t he A c t on 28. 0 8 . 20 17 . S ubs e q ue n t l y, i n vi ew o f t h e i n fo r ma t i o n r e c e i v ed f r o m t he D ir ec t o ra t e G en e r a l of G S T In t e l li ge nc e, r e a s s es s me n t pr oc ee di ngs w e re i n i t i ate d in t h i s a s s es s men t y e a r a ls o a nd t h e a s s es s m e n t w as c o mpl e te d a t a n i nc o me o f Rs . 4, 29 , 3 0, 91 2 / - a ft er m a k i n g a n a ddi t i on o f Rs. 2, 3 2, 47, 93 1/ - by a pp l y i n g th e ne t pro f i t ra te o f 3 . 6 4%. The a l l e ge d su ppr es s e d t ur n o ve r w a s c o mp ut e d at R s . 16, 6 3 , 6 2, 468 /- . T h e AO p ro c e e de d t o re j ec t t he b oo ks o f a cc ou nt i n t hi s ye ar a l s o. 4. 1 O n a pp e a l, t he L d. CI T ( A ) up he l d th e r ej e ct i o n o f b o oks o f a cc ou n t b ut al l ow e d r el i e f i n re s p e ct o f ne t pr o fi t by h ol di n g th at t he ra t e o f 3. 3 4% ( as de c l a r e d by t h e as s e s s ee ) w a s t o be ap pl ie d a s a ga in st t he a ve ra g e ne t p r o fi t ra te o f 3. 64 % t h e r e by s us t a i n i ng t he a dd i t io n on t hi s a c c o u nt on l y t o th e e xt en t o f Rs . 55, 56, 5 0 6/ -. ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 8 4. 2 N ow , t he a s se s s e e ha s ap pr oa c h e d t h i s Tr i b un a l ch al l en g i ng t he o rd e r o f t h e L d. CIT (A ) by r a i s i n g fo l l ow i n g gr ou nd s o f ap pe al : 1. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A . O . r eg ar di ng th e r e j ec t i o n of bo oks of ac co un t s of t he as s e ss ee wi t ho u t c ons i de r i n g t he f a ct s of t he c a s e & m at er i al av a i l ab l e o n r ec or d s . 2. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t h e L d. A . O . r e gar di ng t he a ddi ti on of Rs. 55 , 5 6, 5 06 /- , m a de by ap p l y i ng n e t pr o fi t (D e cl ar e d by t he a s s es s e e) @ 3. 34 % o n s up p r es s e d s al es , i gn o ri n g t he f ac t t ha t th e s ai d bo ok s of a c c o u nt s we r e al r e a d y r ej e ct e d u /s 1 4 5( 3 ) of t h e I n c o m e T a x A ct , 1 96 1 . T h us s u c h ad d it i o ns m us t be d el e t e d by r e ve r s in g t he f i nd i n gs of t he C IT ( A p pe al ). 3. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n 01 t h e L d . A. O . c onf i r m i ng t h e a dd i t i o n wi t ho ut c ons i de r in g t h e f a c t t ha t t he s ai d a dd i t i o n i s b as ed o n f i n di n gs of ex ci s e a u t h o r i ti e s a n d t he Id . As s e s s in g of f i c e r has f ai l e d to co n du c t a ny i nd e p e n de nt e n qu i r y i n t he m a t t er a n d N O ad di t i on c an b e m a d e o n t he b as i s of s u c h f i nd i n g s wh e n E xc i se l aws a nd I nc o m e t ax l aw s ar e t ot al l y i nd e p e n de nt . 4. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A . O . b y not al l o w i ng t h e o th e r i nc om e of R s . 3 8, 28 , 22 9/ - i . e . i nt e r e s t in c o m e o f Rs. 13 , 7 6, 7 64 /- a nd F o r ei g n E x c h an ge F lu c t u a t i o ns of R s . 2 4, 51, 46 5/ -, to b e r e d u c e d f r om ne t pr o f i t t o c al cu l a t e a d di ti o n by a p pl y in g M e t P r of it Ra t e of 3. 34 % o n s up pr es s e d s al e s. 5. 0 In IT A N o. 8 5/ C h d/ 2 02 2 for as s e s s me nt ye a r 2 016- 17 , t he re t ur n o f i n c o me w a s fi l ed o n 17. 1 0 . 201 6 d e c l ar in g i n co me o f Rs . 56 , 2 7, 2 80 /- a ft er c l ai mi n g de du c t i o n u/ s 8 0 IA o f the A ct to t h e t un e o f Rs . 1, 37 , 7 4, 81 7 / - . Th e bo o k pr o f it s de c l a r e d u /s 11 5 J B o f t h e A c t i n t h i s y ea r w er e at Rs . 3, 31, 15 , 328/ -. T he re t u rn w as pr o ce s s ed u / s ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 9 14 3(3 ) o f th e A ct . S u bs eq ue n t l y , i n v i ew o f t h e i nf o r m at i on r e c e i v e d by t he D e pa r t me n t f ro m D i r e ct or at e G e ne r a l o f G S T Int e l l i g e n ce , t h e a s s es s e e’ s c as e i n t h i s y e ar w as a l s o r eo p e n e d u/ s 1 4 7 r e a d w i t h s e ct i on 14 8 o f t h e A c t . T h e r e -a s s e s s me nt w a s c o m p let ed a t a n i nc o me o f R s. 4, 93, 0 3, 0 11 / - a f te r ma ki n g an a d di t i on o f Rs . 2, 84 , 00, 2 92 /- i n re s pe c t o f a dd i t i on al n e t p ro fi t ea r n e d o n s uppr es s e d t ur n o v e r b y a pp ly i ng ne t p r o fi t r a t e o f 3. 64 % a f te r r e j e c t in g t he bo oks o f a cc ou nt . T he a l l e ge d s u pp re ss e d t u rn ov e r in t h e y e a r w a s c o mp ut e d a t R s . 2 0, 67, 53 , 1 77 / - b y t he A O . 5. 1 A ggr i e v e d, th e as s e s s ee a pp ro a c h ed t he L d . F irs t A ppe ll a t e A ut h or i t y c h al l e n g i ng t he re j ec t i o n o f b oo ks o f ac co un t as w el l a s c ha ll e n gi ng t he a dd i t i on on m er it an d th e L d. F i rs t A ppe l l a te A ut h or i t y, w h i l e u p ho l di ng t he r e j e ct i o n o f b o o ks of a c c o un t , a ll ow e d re l i e f i n re s pe ct o f n e t pro fi t on s up p r e s se d s al e s b y h ol di n g t ha t t h e ne t pr o fi t r a t e o f 3. 15 % (a s de c l a r e d by the a s s es s e e) w a s t o be a p p l i e d r at he r t h an t h e net p ro f i t ra t e o f 3. 64% . T h i s re s ul t e d i n t he a d di t io n o n t h is ac c ou nt b e i n g s u s t a i n ed o n ly to t he e xt e n t o f Rs . 65 , 1 2, 7 25 /- . 5. 2 N ow t he a s s es s e e h as ap p r oa c h e d t hi s Tr ib un a l c ha l l en g i ng t he o rd e r o f t h e L d. CIT (A ) b y r ai s i ng fo l l ow i ng g ro un d s o f a p pe al : - 1. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A . O . r eg ar di ng th e r e j ec t i o n of bo oks of ac co un t s of t he as s e ss ee wi t ho u t c ons i de r i n g t he f a ct s of t he c a s e & m at er i al av a i l ab l e o n r ec or d s . ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 10 2. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A. O . r e gar di ng th e ad di t io n o f R s . 65 , 1 2, 7 25 /- , m ade by a pp l yi n g n et pr o f it (D e cl ar e d b y th e a s s ess e e ) @ 3. 15 % on s up p r es s e d s al e s , i gn or i ng t h e fa c t t ha t th e s ai d ) b oo ks of ac c ou nt s w e r e a l r e a dy r e j ec t ed u/ s 14 5 (3 ) o f t he In c o m e T a x A c t, 1 9 61 . T hus s uc h a dd i ti o n s m us t be de l et e d by r e v e rs i ng th e f i n di n gs o f t he CI T ( Ap pea l) . 3. T hat t he L d. CI T ( A) h as e r r e d i n c onf i rm i ng th e ac t io n of t he L d . A . O . con f i r m i ng t he a dd i t i o n wi t ho ut c ons i de r in g t h e f a c t t ha t t he s ai d a dd i t i o n i s b as ed o n f i n di n gs of e x ci s e a u t h o r i ti e s a n d t he Id . As s e s s in g of f i c e r has f ai l e d to co n du c t a ny i nd e p e n de nt e n qu i r y i n t he m a t t er a n d N O ad di t i on c an b e m a d e o n t he b as i s of s u c h f i nd i n g s wh e n E xc i se l aws a nd I nc o m e t ax l aw s ar e t ot al l y i nd e p e n de nt . 4. T hat t he L d. CI T ( A) h as e r r ed i n c onf ir m i ng th e ac t io n o f t he L d. A . O . b y not al l o w i ng t h e o th e r i nc om e of R s . 3 5, 16 , 69 2/ - i . e . i nt e r e s t in c o m e o f Rs. 20 , 1 6, 0 67 /- a nd F o r ei g n E x c h an ge F lu c t u a t i o ns of R s . 15, 00 , 6 25 / -, t o be r ed uce d fr om n et p r o fi t t o c al cu l a t e a d d i t i o n by a p p ly i ng Net P r of i t R at e of 3. 15 % o n s up pr es s e d s al e s. 6. 0 In IT A N o . 86 /C hd / 20 2 2 for a s s es s m e n t ye a r 2 017 - 1 8, t he re tu rn o f in c o m e w a s fi l e d de c la ri ng t ot a l i nc o me o f R s . 92, 0 1, 12 0 / - a n d t h e bo ok p ro fi ts u / s 115 J B o f t h e A c t w e re de c la re d a t Rs . 4, 01 , 6 6, 7 53 / - . T he a s s es s e e’ s c a s e h a d be e n s e l e ct e d for s c ru t i n y an d, s u bs eq ue nt l y , s i nc e t h e D e p a rt me nt w a s in r e c e i p t o f i n fo r ma t io n fr o m th e D i re c t ora t e G en er al o f G S T I nt e ll i g e n ce , s uc h i n fo r m a t i o n w a s al s o i nc o rp or a t ed du r i n g th e co urs e o f as s e s s me n t pr oc e e di ngs u/ s 143 (3 ) o f t h e A c t . T he a s s es s men t w a s c o m pl e t e d a t a n i n c o me o f R s . 3, 97 , 89 , 949 / - a f t e r m a ki n g a n a d d i t i o n o f Rs . 1 , 6 3, 86, 9 7 6/ - o n a c co u n t o f a d di t io na l ne t ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 11 pr o fi t e a r n e d o n s up p re s s ed s a l e s b y a p pl yi ng t h e ne t pro fi t r at e o f 3. 64 % a f t e r re j e c t i ng t he b oo ks o f ac c ou nt . Th e A O c a l c u l a t e d t he a ll e g e d s up pr es s e d s a le s at Rs . 4, 71, 4 4, 275/ - fo r thi s as s e s s me nt y ea r. 6. 1 A ggr i e v e d, t h e a ss e s s e e ca rr i e d t h e i s su e be f ore t h e Ld . F ir s t A ppe l la t e A u t h o ri t y c ha ll e n gi ng t h e re j e c ti o n o f b oo ks o f a cc ou nt a s w el l a s t h e a d d i ti on o n m er it s . A l th ou gh t he Ld. CIT ( A ) u ph e l d t he re j ec t io n o f b oo ks o f a c c o un t , h e g a v e p ar t re l i e f i n re sp e c t o f ne t pr o fi t e ar ne d o n s up pr e s s ed s a l e s b y h ol d i n g t ha t th e n e t pr o fi t ra t e o f 3. 12 % (a s d e c la r e d b y t he a ss e s s e e) w as t o b e a p p li e d r a th e r t h a n t h e a ve ra ge ne t p ro f it r a t e o f 3. 64 %. 6. 2 N ow , t he a s s es s e e ha s a pp ro a ch ed t hi s T ri bu na l c h a l l e ngi ng t h e or d e r o f t he L d. CI T( A ) b y ra is i ng f ol lo w i n g gr ou nds o f a pp ea l: - 1. T hat t h e L d . CI T ( A) has e r re d i n c onf ir m i ng t h e ac t io n of th e L d. A . O . r e ga rd in g t h e r e j ec t i o n o f bo oks o f ac c ou nt s of th e as s e s s ee wi th ou t c ons i de r i n g th e f ac ts o f t he c as e & m a t er i al av a i l ab l e o n r ec or d s . 2. T hat t h e L d . CI T ( A) has e r re d i n c onf ir m i ng t h e ac t io n o f t h e L d. A . O . r e gar d i n g t h e ad di t io n o f R s . 14 , 7 0, 9 00 /- , m ad e by a pp ly i ng ne t p ro fi t (D ec l ar e d by t h e as s es s e e ) @ 3. 12 % on s up pr es s e d s a l e s , i gn o ri n g th e f a c t th a t th e s ai d b oo k s of ac co un t s we r e al r e ad y r ej e ct e d u/ s 14 5(3 ) of t he I n c om e T ax A ct , 1 96 1. T hus s uc h a dd i t i o ns m u s t be d el e te d b y r e ve r s in g t he F i nd i ngs of t h e CI T ( A p p e al ). 3. T hat t h e L d . CI T ( A) has e r re d i n c onf ir m i ng t h e ac t io n 01 t he L d. A. O . con fi r m i n g t he a ddi t i o n wi t ho ut c o ns i der i n g t he f ac t t h a t t h e s ai d a d d i t i o n i s ba s ed on f i n di ngs of e x c is e au t h or i t i e s and t he I d. A s se s s i ng of fi c er has f ai l e d to c on d u ct an y i nd e p e n de nt e n q ui r y i n t h e m at t e r an d N O a dd i t io n ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 12 c an be m a de on t he b as i s of s u ch fi n di ng s w he n E xc i se l aws an d I n c om e t a x l aw s a re t o t a l l y i nd e p e n de nt . 4. T hat t h e L d . CI T ( A) has e r re d i n c onf ir m i ng t h e ac t io n o f t h e L d. A . O . by no t a ll ow i ng t he ot he r i nc om e of R s . 47, 0 9, 238 / - i . e . i n t e r es t i nc om e of Rs . 22 , 4 1, 9 50 /- an d F o r ei g n E x c h a ng e F l u c t ua ti on s o f R s . 2 4, 67, 28 8/ -, t o be r ed u c e d f r om ne t p r of it t o c al cu l a t e ad d it i o n by a p p l y i n g N et Pr o fi t R a t e o f 3. 12 % o n s up pr es s e d s al e s. 7. 0 A t th e ou ts e t , t h e L d. A R s ub m it t e d t ha t h i s arg u m e nt s fo r a s s es s men t y e a rs 2 01 3 -1 4 an d 20 14 - 1 5 w ou ld a l m os t be i d e n t i c a l, w he re as , f or as s e s s me nt y e ar s 20 1 5- 1 6, 2 0 1 6- 1 7 a n d 2 01 7 -1 8, th e a rg u m e n t s a ga i n w oul d b e i d e n t ic a l . It w as s u b mi t t ed t h a t t he a s s es s e e ha d b ee n ma i n t a i ni ng r e g ul a r b oo ks o f ac c ount in a ll t h e c ap ti on e d ye a rs un de r a p pe a l a nd t h e s a me w e r e a l s o s ub j e c t t o au di t . It w a s s ub mi t t e d t h a t t h e s a l es an d pu r c ha s es w er e fu l l y v ou c h e d a n d no d e f ec ts w e re e ve r fo un d i n t h e m a i n t en an ce o f boo ks o f a cc ou n t i n a ny o f t h e y e a rs un d er c ons i de ra t io n . H e a l s o s ub mit t ed t ha t e ve n th e pe r c e n t a ge o f y ie l d w as c ons t a n t t hr o ug ho ut fi v e year s and fo r t h i s pu r pos e h e dr e w our a t t e nt io n t o p ag e 22 6 o f th e p ape r b o o k, w he re in , yi e l d re p ort i n t h e y ea rs u nde r co ns id e r a ti on h a s b ee n t ab ul at ed . T he s a me i s b ei ng re pr od uc e d h e r ei nu n d e r fo r re a d y re fe r e nc e: - ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 13 7. 1 I t w as fu r t h e r s ub m i tt e d t h a t , t h us , i t c ou l d no t b e s ai d t h at t he r es ul t s re t ur n e d by t he a ss e s s e e co m pa ny w er e at a ny s uc h va r i a nc e a s w o ul d c al l for r ej e ct i o n o f bo o ks o f a cco u n t and w o ul d a l so ma n da te pr o fi t e s t i m at i o n. It w as fu rt he r s ub mi t t e d t ha t t he a s s es s e e ha s b e e n r e gu la r l y ma i nt a i n i ng t he qu a n t it a t i v e d e ta i ls i n r es pe c t o f s t oc k a nd t he c o ns ol id at e d fi gu re s for ea c h ye a r u nd e r a pp e a l w i th r es p e c t t o ra w m at e r i al c on s u me d in qua n t i t y as w el l a s op e n i ng an d c lo s in g de ta i ls o f r a w m at e r i a l ha v e bee n d ul y i nc or p o ra te d an d r e f le c t e d i n t he T ax A udi t Re po r t. It w a s s ub mi t t e d t ha t t he A O ha s no t po i nt e d o ut a n y de fe c t o r di s cr ep an ci e s i n t h e qu a n t i t at i ve de t ai l s s o pr od uc e d. I t w as a ls o s ub mit t e d th at th e r e w a s no a ll e ga t i on o f a ny mi s ap pr op ri a t i o n a n d in co rre ct r e c or d i n g o f t ra ns a c t i o ns re l a t in g t o p ur ch as e s , s a le s o r ex pen di tu re o r pe r c e nt ag e o f y i e l d, a s re c o rd e d i n t he bo oks o f a cc ou n t. I t wa s s ub m it t ed th at t he o nl y r e as o n f o r t he i mp u gn e d a d di t io ns w a s th e i n for ma t i o n o f s e ar c h b y t h e E xc i s e A ut h or i t i es i n t he p r e mi s es o f th e a s s es s e e a s ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 14 w el l a s o n S h r i S a nj a y D h aw a n w h o w a s t he E x -P re s i de n t o f t he c o mp a n y a n d h a d e ar l i e r w or k e d in t h e c o mp a n y fro m ye a r 20 09 t o ye a r 20 13 . It w as s ub m i t t e d th a t th e s ea r c h h a d a ls o b e e n ca rr ie d o ut on ce r t a in de al e rs o f t he a s s es s e e li ke S / S hri G u l sha n G a ba , N av e e n S a ll e y a nd S u d hi r S e th i. It w as s u b m it t e d th a t du ri n g t he c our s e o f s e ar c h o n t h e pr e mi s e s o f S h ri S a n j ay D h a w an , c e r t ai n i n v oi ce s (b e i n g 2 2 5 i n n u m b e r) w e r e f o un d an d in t he s a i d i nv oi c e s , t he re g i s t r a ti on n u mb e r s of ve hi c le s be lo ngi ng t o t he as s es se e c o m p a n y w er e a l so m e n ti on ed w hi c h l e d t h e A O t o fo r m a n i n co rr e c t be li e f t ha t t he as s e s s ee ’s i nc o me fo r t he c a pt i o ne d ye ar s h a d e s ca pe d a s s es s men t . I t w a s s u b mi t te d t ha t t h e E x c i s e A u t h o ri t i e s ha d a l s o re c or de d t he s ta t e m e nt s o f t hi rd pa r t i e s li ke S /S hri G ul s ha n G a b a, N av ee n S al l e y a n d S udh i r S e t h i a s w e ll a s o f M a noj K u ma r, t he D i re c t o r o f t h e a s s es s e e c o m p an y. I t w as s ub mit t e d t ha t t he A O ha d re l ie d u po n th at s t at e me nt s o f S /S h r i S an ja y D h a w an G u l s han G ab a, N av ee n S a l le y a nd S udh ir S e t h i t o ma ke th e i m p ug n e d a d di ti on s but ha d to t a ll y i g no r e d th e s ta t e m e n t o f S hri M a no j K u mar , t h e D i r e c t o r o f t he as s e s s ee c o m p a n y w he re in he ha d c o m pl et e l y den i e d ha vi ng m a de a n y o ut o f b o o ks s a l es or h a v in g i s s ue d a n y p ara ll e l i nv oi c es i n t he n a m e o f t h e a s s e ss e e c o m p a n y. I t w as s ub mi tt e d t ha t t he pa r a l l e l i nv o i c es w e r e r e c o ve r e d fr o m t h e pr e m is e s o f S hr i San j a y D h aw a n a ga in st w h o m th e D i re c t o r S hr i M a n oj K u ma r h a d a l rea dy f i le d a c o mp l a i nt , p r i o r t o th e d a t e o f s ea rc h for h av in g sto l e n bi l l b o o ks , bi l ti e s , c as h a nd o t he r el e c t r on ic it e m s . I t w as s ub m i tt e d t h a t t h e A O ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 15 ha d a l s o pr oc e e de d t o re c or d t h e s t a t e me nt o f on e Shr i S h iv C ha ra n L al , w h o w a s an E x - e mp l o y ee o f t h e c o mp a ny , w he re in, t he s ai d Ex - e mpl o y e e ha d a c ce pt e d t ha t p ar al l e l o r fa k e sa l e i nvo ic e s w e re i s s ue d a nd t h e g oo d s w er e be in g t r a ns p o r t e d t hr o u gh v e h i c le s o w ne d b y t h e a s s es s e e c o mp a n y an d f u rt he r t h a t t h e s e fa ke in v oi ce s w e re de s t r oy e d, on c e t h e c on s ig n me n t w a s del i ve re d. I t wa s s ub mi t te d t h at i f th i s st a t e m e nt w a s c or re c t , ho w c o me t he s e i n voic es w e re re c ov e r e d fr o m t he r es i d e n c e o f S hr i S an j a y D ha w a n?. 7. 2 T he L d. A R fu r t h er s ub m i t t e d t ha t in h is s t a te me nt S hr i M an o j K u ma r, D i re c to r o f t he co mp a n y h a d r e bu tt e d al l t he s t at e me nt s ma d e b y t he t hi r d p a r t i e s a s w e l l as t h e Ex- e m p l o ye e a n d t he E x -P r es i de n t o f th e co mp a n y a n d h a d s pe ci fi c al ly s t a t e d t ha t S hri S a nj a y D ha w a n w a s a d is g r un t l ed e m pl o ye e w ho ha d b ee n r e m ov e d fr o m t he pos t o f P r es i de nt a nd a g a in st w h o m a c o mp l ia nt ha d a lr ea dy b e e n fi le d. It w a s s u b mi t t e d t h at S h ri M a no j K u ma r ha d al s o po i n t e d o u t i n hi s s ta t e m e n t t ha t S hr i S hi v C h ar a n La l a l s o h ad l e ft t he c o mp a n y pr io r t o t he d a te o f se a r c h a n d as s uc h t h e s t a t e me n t o f S hr i S h i v Ch a ra n L al ha d n o e v i d e n t i a r y v a l u e. O ur a t t e n t i o n w as a ls o dr aw n t o t he s t at e m e n t o f S h ri S h iv Ch a ra n La l r e c o rde d by t h e A O w he re i n he ha d a c c ep t e d t ha t he h a d al l eg ed c r eat io n o f f a ke i nv o i c es u nd e r p re s s ure fr o m t he E xc i s e A ut h or it i es. It w a s s ub mi t t e d t ha t, th e r e f o re , i n t he a bs en ce o f a n y i nc r i m in a t ing ma te ri a l a nd onl y by pl a c i n g re l ia nc e on t he f ak e in vo i c e s s e i ze d fr om th e re s i d en ce o f ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 16 S hr i S a nj a y D h a w a n , a g a in s t w ho m th e a s s es s e e c o m pan y ha d a l r e a dy fi l ed a co m p l a i n t a nd F I R, t he A O c o u ld n ot h a ve l eg a l l y ma d e a n y a dd i t io n on a c c o un t of a l l e g e d s up p re s s ed sa l es . 7. 3 T he L d. A R fu r t he r s u b mi t te d t h at t h e F IR fi l ed a ga in s t S hri S a nj a y D h a w an f o r t h e ft o f c o mp a ny ’s do c u m e n ts , w hi c h i nc l ud e d s a le s i n vo i c es , bi l ty b oo kl e t s, r ub be r s t a mps e t c . , w a s i ts e l f s uf fi ci e nt e vi de n c e t o pr o v e t ha t t h e a s se s s e e ha d n o t ma d e a n y un di sc l os e d s a l e s a nd t ha t a l l t h e se fa ke i nv oi ce s h a d bee n c r e a t e d b y S hr i S a n j a y D haw a n t o pu t t he a s s e s s e e co m pa ny u nd er fi n a nc i a l pr es s ur e a nd l i t i g a t io n. O ur a t t e nt i o n w a s dr aw n t o t he co p y o f t he F IR a nd ot h e r c o m p la i nt s ma d e i n t hi s re g ar d a n d pla c e d a t pa ge s 2 6 0 t o 26 5 o f t he p a p e r b o ok. 7. 4 It w as fu r t h er s u b m i t t e d t ha t a s f a r a s a s s e s sme n t y e a r 20 1 3- 14 w as co nc e rn ed , t he o ri gi na l a s se s s me nt w a s c o m p le t e d u / s 1 43 (3 ) o f t h e A ct vi de ord er d a t e d 2 3. 03 . 2 016 w hi c h w as s ub je c t t o pr o c e e d i n gs u /s 2 63 o f t h e A c t a n d s ub s e qu en t l y c o ns e qu en t i a l a s s es s men t w a s al s o fra me d a t t h e s a me i nc o me w i th ou t a ny fu rt he r a dd i t io n an d , t he r e for e, re v i s i ti ng t h e s a me as s e ss me nt fo r a t h i r d t i m e w a s not to be s us t a in ed . 7. 5 T he L d. A R a l s o dr e w o ur at t en ti on t o th e re p l y f i l e d b y th e a s s es s e e co mp a n y in re s p o n s e to t he s how c a us e n ot ic e i s s ue d b y E xc i s e A u t ho ri ti e s w he re i n it ha d b e en e x pr es s l y s tat e d t ha t t he re c ov e r y o f d oc u me nt s f ro m t he re s i d en ce o f t h i r d pa r t ie s h a d n o re l ev an c e s i n c e S hr i S an j a y D haw a n h a d a l re ad y l e ft t he e m pl o y m e nt ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 17 w i th t he c o mp a ny t hre e ye a rs pr i o r to t he da t e o f sea rc h a nd a s s uc h no r e l i a n c e co ul d ha v e be e n pl ac e d on s u c h d o c u m en ts w hi c h w e re m a ni p u l a t ed. I t w a s s ub mi t t e d t h a t S h ri S an ja y D haw a n w a s a hos t i le w i tn es s h o l d i n g a g ru d g e a g a i ns t t he c o m pa ny a n d , the r e f or e , no re l ia nc e s ho ul d be pl ac e d on t h e d oc u me nt s i n t h i s r e g a rd . T h e L d. A R p la c ed r e li a n c e on t he n u me r ou s c as e l aw s , w he rei n, i t ha d b ee n he l d t h at a ny e nt r y fo u nd o f lo os e p ape rs i n t h e pr e mi s es o f t hi r d pa r t y w i t h o ut a n y c or r o bo r a t i v e ev i d e nc e , c a nn ot be ma de t h e b as i s fo r a d d i ti on . 7. 6 It w a s f urt he r s u b mi t t e d t h a t t h e A O h ad pr o ce ede d t o c al c u l at e th e al l e g e d s up pr es s e d t ur n ov er on a c o mpl e te l y w ro n g fo o t i n g i . e. on th e ba s is o f t h e s t a t e m en ts o f J a l an dh ar a nd Lu d h i a na ba s e d d e a l e rs w it ho ut t he re b ei ng an y co r r ob ora ti ve ev i de nc e t o s up p ort t he s a me . 7. 7 T he L d. A R f urt he r s ub m it t e d t ha t t he as s e s s ee co m pa ny h a d s ou g ht c r o s s e xa mi na t i o n o f a l l t h e d e a l e r s a nd h a d re qu e s t ed t h e A O t o i s s ue s u mm o ns t o t he m f o r t h e pu r p os e o f c ros s exa m i na t i o n b ut no s u c h o p p or t u n i t y w a s g r a nt e d a nd th e A O pr oc ee ded t o m a k e t he i mpu gne d a dd i t io ns ba s e d on th ei r s t a te me n t s w hi c h w as il l eg a l a n d un s us ta i n a b l e i n te r ms o f t h e j u d g e m en t o f t h e H on 'bl e A pe x C ou r t i n t he c a s e o f A nd a m a n T i mb e rs I n d us t ri es V s . C omm i s sion e r o f Ce nt r a l E xc i se re po r t e d i n ( 20 15 ) 81 C TR ( S C ) 24 1. It w a s s ub m i tt e d th at in t hi s j ud ge me nt , th e H on ' b l e A p e x Co ur t h a d he l d ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 18 t ha t no r e l i an ce c a n be p l a c e d o n t h e s t a te me nt o f s uc h pe r s ons , i f n o op por tu n i t y o f c r os s exa mi na t i on i s a ff ord e d t o t he p er s o n c onc er ne d 7. 8 I t w as fu r t h e r s ub m i tt e d b y th e Ld. A R t ha t t he s t a te me nt o f S hr i S h i v C ha ra n La l a bo ut t h e t ra ns p or ti ng o f g o ods i n t he c o mp a n y ’s o w n ve hi c l es w a s fa l s e. O ur a t t e n t i o n w as dr aw n t o t he c op i e s o f t he s a mp l e i nv oi ce s p l a c e d a t pa g e s 29 1 to2 96 o f t h e pa pe r bo ok (w h i c h a re c opi e s o f t he r e g u l ar i n vo i c es for t ra ns po r t i n g o f go ods i n t h e ve hi cl e s o w n e d b y t h e a s se s s e e a nd w hic h h a d du ly b e e n r ec or d e d i n th e bo o k s o f a c co u n t ) a n d re fe r ri ng t o t he s ai d i n v oi ce s , i t w a s su b mi t t e d t h a t a s p e r t he C ha rt p la c e d a t p age 30 7 o f th e p a p e r bo ok th er e w e r e n u me ro u s d i s c re pa n ci e s i n t h e i nv oic e s r ec ove re d f ro m t h e r es i de nc e o f S hri S a n ja y D ha w an . Th i s Ch art i s be in g r ep r o du c e d he r e i n i n un d e r for re a d y r e fe r e n ce :- 7. 9 Re fe r r i n g t o th e C h ar t , t he L d. A R sub m i t t e d t h at t he t i me ga p sh ow n fo r c o m p l et i n g t he j ou rn ey w a s un r e a l i s tic an d i t w a s ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 19 pr a c t ic a l l y i mp os s i bl e t o t r a ns p o rt t h e goo d s by the s a me ve hi c le i n s uc h q ui c k s u cc e s s io n. I t w a s f ur t h e r s ub mi t t ed t h at o n a c c o u nt o f di s t a n c e fro m o ne c i t y t o an o t h e r c i t y a s pe r t i m i ngs me n t i o ne d i n t he a bo ve C h ar t a nd c ons i de ri ng t h e t i me re q ui re d f or lo ad i n g a n d un l o a di ng , it c o u l d no t h a v e be e n p o s s ib le for t he ve h i c le t o ma ke a s e co n d t r i p w i t hi n fe w ho urs o n t h e s a m e da y c o ns i de r i n g t h e di s t a n c e b e t w ee n t he fa c t or y a n d t h e fi r s t de s t i n a tio n. T he Ld. A R s ub m i tt e d t ha t t he s e s ub m is s i o n s w er e a l s o ma d e b e for e t he l ow e r a ut ho ri t i es but t h e s a me w er e n ot g i v e n d ue c ons i der a t io n . 7. 10 Re fe r ri ng a ga i n t o t he y i el d c har t , w hi c h has a l r e a d y b ee n re p r o du c e d i n t he p re c e d i n g p a r a gr a p h N o. 7. 0, t he L d. A R s ub mi tt e d t ha t th e r e i s no i ot a o f e vi de nc e t ha t an y e x pe nd i ture t ow a r ds pu r c h as e s o f r aw m at e r i a l , ch e m ic a l s e tc . or e xp e n di t ur e t ow a r ds e xt ra l a b ou r c h a rg es or p ow e r re qu i r e d fo r ma nu f ac tu ri ng t h e ex t r a yi e ld w a s in c ur re d. It w a s s ub m i t t ed t h a t t h e re w as no s i gn i fi c a nt va r i a ti on i n p e r c e nt a ge o f yi el d fr o m yea r t o y e ar a nd, t h er e f o re , t he a ll e g a t i o n o f e x tr a pr o duc t i o n b e i n g s ol d th ro ug h fa k e i nv o ic e s o r be i ng a d j u s te d t h r ou gh u nd er - va lu at i on i s t o t a ll y mi s c o nc e i v e d a n d ba s e d me r e ly o n c onj ec t u re s a n d s ur m i s es . It w as s ub mi t t e d t h a t i n a bs e n ce o f a ny c o r rob or a t iv e e vi de n c e h a v i n g be e n fo un d t o j us t i f y t he a d di t i o n an d t he c a s e h a v i n g b e en bu il t o nl y u po n t he or a l s t at e me nt s o f s o me d ea l er s w as w e l l a s t he s t a t e me nt o f S hr i S an j a y D ha w a n, t he i mpu gne d a dd i t i ons w er e l ia bl e t o b e del e t e d. I n t hi s ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 20 re g a r d, he p l a c e d r e l i a n c e on n u me r o us ca s e l a w s w hi c h h a v e b e e n fi l ed i n t he p a p e r b oo k and h av e be e n ta k e n o n r ec or d. 7. 11 T he L d . A R, w hi l e c h al l e ng in g t he fi n d i n gs o f t h e L d. CI T(A ) , f ur t he r s u b m i tt e d t h a t al t h o ug h t h e L d. C IT (A ) h a d g i v e n pa r t i al r e l i e f b y a p pl y i n g t he a v e ra ge ne t pr o f it ra t e , he h a s s us t ai n e d t he c o m p ut a ti on o f s uppr es s e d s al e s w hi c h is e nt i rel y ba s e d u po n t h e s t at e me nt o f S hr i S h iv Ch a r a n La l , t h e t h i rd p ar ti es as w e ll a s S hri S a nj a y D h aw a n. I t w as s ub mi t t ed t h a t t he s a me w a s not s u s ta i na bl e i n v ie w o f t he a s s e s se e no t ha vi ng be en a ff o r d e d an y o pp or t u n i t y t o c ros s - e xa mi ne t he sa i d pa r t i e s . It w a s fur t h e r s ub mi t t e d t ha t o t h e r ob s er v a t i on o f t h e Ld . C I T ( A ) t ha t th e a ss e s s e e ha d a va i l ed t h e be n e fi t o f t he D i s pu t e R es ol ut i o n S ch e m e o f t he C e nt ra l E xc is e D ep ar t m en t, c a n no t be t ak e n as a j us t i fi c a ti o n for th e su s te na nc e o f a dd i t io n fo r t h e s i m pl e r e a s o n t h a t t hi s s c he me w as fo r mu l a t e d t o e nd l it i g a t i o n u nd e r th e C e nt ra l E x ci s e La w s an d t he a ss e s s e e c a nn ot b e pu t t o a di s a dv an t a ge un de r In c o me Ta x La w i f it has a va il e d t he be n e fi t o f t hi s s c he me . 7. 12 F or as s e s s me nt y ea rs 2 01 5- 16, 2 0 16 - 1 7 an d 2 0 1 7- 1 8, i t w a s s ub m i tt e d t h a t t he ba s i s fo r a ddi t i o n i s o nl y t h e st a t e me n t s o f S / S hr i G ul s ha n G a b a , N a ve e n S a l l e y a n d S ud h ir S e t hi , a nd no t a n gi bl e o r c or r o bo r a t i v e ma t e r ia l e t c. h a ve b e e n fo un d i n t his r e ga rd e i t he r fr o m t he p r e m is e s o f th e a s s es s e e o r fr o m t h e p r e m is es o f ot he r pa r t i es w hi ch w o u l d j us t i fy t h e a d d i t i ons on a cc ou nt o f su ppr es s e d ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 21 t ur n o ve r a nd f u rt he r ap pl ic a ti on o f n et pr o f i t ra te o n t he b as i s o f e ar li e r as s e s s me nt ye a r s . 7. 13 T he L d . A R fur t h e r s ub m i t t ed t h a t c er t a i n e vi de nc es w e re a ls o e x t ra c t ed f ro m t he e le c tr on i c r e co rds o f o ne pa rt y M / s B. M P a per M a r t , D e l hi ( re p r o du c e d at pa ge s 6 & 7 o f t he a s se s s me nt o r d er ) a nd t he A O ha s me nt io ne d t ha t t h es e i nv o i c e s h a v e n ot b e e n re c or de d i n t h e bo oks o f a cc o u n t o f th e as s e s s e e c omp a ny a n d h as m a de th e a d di ti on by t re at i n g t h e c a s h po rt io n me nt io n ed i n s uc h e le c t r o ni c r ec o r ds as su pp r es s e d t urn ov e r. T h e Ld. A R s ub mi t t e d t ha t t hi s a d d i t i o n w as ba s ed o n t h e s t a t e me nt o f o ne S h ri M a ni sh Ja i n o f B. M . P a pe r M a r t bu t a ga in t h e a s s e sse e w as n ot af for de d a n y op por t u n i t y t o cr o s s -e xa m i n e S h ri M an is h J ai n i n s pi t e of ha v i n g m a de a sp ec i fi c r e qu es t t o do s o . T h e Ld. A R s ub mi tt e d t h a t, t h us , t he a d di t i o ns w e re n ot s us t a i n a b le m ore s o f o r t he r e a s on t h a t t he i de nt it y o f t h e pe r s on s e nd i n g t he e - ma i l s to M / s B. M . P a pe r M a rt ha d n o t b e e n e s ta b l i s he d a n d, t h e r e fo re , th e a dd i t io n b a s ed o n s uc h un ver i f ie d e l e c t ro n i c re co r ds w a s n ot s us t a in ab l e . T h e L d. A R d r ew ou r a t te nt i o n t o t h e n ot in g m a d e by t he A O a t pa ge s 6 & 7 o f t he a s s es s men t or d e r w he re i n h e ha s m e n ti on e d t ha t t he s e ri e s o f t h e a ll e g e d u nr e c o rd ed b il l s p er t a i ni ng t o J une 2 01 5 w ere as u nde r: - a) CC 204 b) CC 205 c) CC 213 d) CC 212 e) CC 219 f) CC 220 ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 22 7. 14 It w as s ub mi t t e d t hat e ve n i f t he s t a t e me n t of S h ri M a ni s h J a in i s t ak e n as co r re c t t he n al s o as p er t he a s s ess e e’ s re gul a r b o oks o f a cc ou n t, a l m os t t h e s a me s er i e s o f bi l ls s ho ul d h a ve b ee n e x i s ti ng , w he re as , a s p er t h e re g ul a r b oo ks o f a c c ou n t f o r t he m on t h o f Ju n e 2 0 15 , t he i nv o i c e s e ri es i s 7 00. O u r a t t en ti o n w as d r aw n t o t he s a mp l e i nv oi c e pl a ce d a t pa ge s 2 9 7 to 30 6 o f t he p a pe r b o ok in t h is r e g ar d a nd i t w as s ub m i tt e d t h a t , th u s , t he en t i r e a d d i t i ons h a ve b een m ad e by r el yi ng on i rr e l ev a nt a nd i nc or re c t a l l e g a t i o n s a nd w e re li a b le t o be d e le t e d. 7. 15 A rgu i n g fo r t h e is s u e i n a p pe a l i n a s s e s s me nt y e ar 20 17 -18 , o u r a tt e n t i o n w a s dr a w n t o co p y o f t he l oos e s he et s , a s s e iz e d f r o m t he pr e m is e s o f S h r i G ul s ha n G a ba a t J al a n dh a r on 05. 0 8. 2 01 6 , w hi c h c on t a i n e d c e rt ai n n ot in gs w i th re s p e ct t o t h e qu ant i ty an d va l u e o f go ods . Th e L d. A R s ub mi tt e d t ha t t h e s e l oos e s he e ts di d n ot c a r r y t h e na me o f t h e a s s es se e a n d a l t h ou gh S h r i G u ls h a n G a ba h a d a g a i n g i v e n a n o ra l st a t e m en t t ha t t h e s e no t i ngs w e re o n a c co un t o f pa p e r s u p pl ie d by t he as s e s s ee co m p a n y, it w as s ub m i t t e d t ha t t hi s h a d al re ad y b ee n de n i e d by t h e as s e s s e e co m p a ny be f o r e t he A O i n t he s t a te me n t o f S h r i M an o j K u m ar , t he D i re c to r o f th e Co m p a n y o n 16 . 1 1. 201 9. I t w as s ub m i tt e d th at th es e lo os e s he e ts b e i n g a t hi rd p a rt y e vi d e nc e , ha vi ng no na me o f th e as s e s s ee o r s ig na t u r e o f t he a s se s s e e or o f e v e n a n y re p r es e nt a t i ve o f t he a s s es s e e , in t h e a bs e nc e o f an y c r o s s -e xa m i na t i on ha v i n g b e e n al l ow e d t o t he as s e s s ee ev en a ft e r a s pe c i fi c r e qu e s t, ha d no ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 23 e vi de n t i a r y v a l u e a nd, th er e f o re , t h e s a me c o u l d no t b e u s ed f or t he pu r pos e o f m a ki ng i mp ug ne d a dd i t io n on ac c o un t o f sup pre s s ed t ur n ov e r . 7. 16 T he L d. A R f ur t he r s ub mi tt e d t h a t g r ou n d N o.4 i n t he a s s e ss ee ’s a pp e a l s for a s s es sm e nt ye ar s 20 1 5 -1 6 , 20 1 6- 1 7, 2 0 17- 1 8 w e re n ot b ei ng pr es s e d. 8. 0 In r es p o ns e t o t he v ar io us a rg u me n t s a dv a n c e d by t he L d . A R, th e L d. S eni or D e pa r t me nt a l R e p r es e n t a t i ve (S r. D R) v e he m e nt l y a rg u e d t ha t i t w a s n ot i n di s pu te th at S /S h r i S a nj a y D ha w an , S hi v Ch ar a n L al as w el l a s G u ls h an G a ba a n d N a v e en S a l le y a nd S u ni l S et h i ha d a cc e pt ed be fo r e t h e Ce n t r a l Ex c i s e A ut h o r i t i e s d ur i n g t h e cou rs e o f s ea rc h c a rr i ed ou t b y t he E x ci s e A ut h or it i es t ha t th e as s e s s e e co mp a ny h a d be e n m a ki n g o u t o f b oo k s a le s by und er b i l l i ng o f in vo i ce s by Rs . 4 t o Rs . 10 pe r k g . a nd t ha t t h e p a y me nt for u nd e r i n vo ic i n g w as b e i n g s e tt l e d i n c as h . T he L d. D R fur t h e r s u b mi t te d t h a t i t w a s al so a f ac t o n r e c o rd t h a t t he i n v o ic e s w e re s e i ze d fr o m t he r e s i de n t i a l p re mis es o f S hr i S a n j a y D ha w an an d fu rt he r t h e d ea l e r s ha d a l so c on fi r m e d t h a t th es e i n vo ic es pe r t a in e d t o t r a ns a c t i o ns w i th t he m w hi ch w e re n ot a c c ou nt ed i n t h e bo oks o f a c c ou nt o f t h e a s se s s e e. T he L d. D R dr e w ou r a t te n t i on t o pa g e s 8 & 9 o f t he a s s es s me nt o r de r w he re in t h e A O h a s s u mm a r i s ed t he sa m p le i nv oi c e s s e iz e d fr o m t he p re mi s es o f S hr i S an ja y D ha w a n a nd i t w a s s ub m it t ed t h at n o fu r t he r e vi de n ce w a s re qu i r e d t o c or r o bo r a t e t he s a me . T h e Ld . S r. D R a l s o re fe rr e d t o t h e s ta t e m e n ts o f ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 24 S / S h ri N a ve en S a ll e y, G ul s h a n G a ba and S ud hi r S e t hi t o d e m on st ra t e t ha t b ot h t h e l ow e r a u t h or i t i es h a ve ri gh t l y c on f i rme d t h e u na c co u n t e d t ur n o ve r. It w as s u b mi t te d t h a t t h e A O ha s eve n e xp l a in e d th e m od us op e r a nd i b ei ng f o l l o w e d o u t b y t he a s s e ss e e i n t h is re g a rd a n d i t w as s ub m i tt e d t ha t t he s t at e me nt o f t he t h r ee p ar ti e s wer e i d en t i c al i n a s fa r a s t h e m o du s o p er a n di o f t h e as s e s s ee c o m pa ny w as co n c e r ne d . H e a l s o s ub m i tt e d t h a t t h e as s e s s ee w a s dul y co n fr on t e d w ith al l t he s t a t e m e n ts a nd t h e a ss e s s e e d i d n ot o ffe r an y e x p la n a t i o n i n th is r e g a rd a n d f urt he r s ub m i tt e d t ha t s i n c e t he a ss e s s e e h a d n o e x p l a n a t i on t o o ffe r, t h e cr os s - e xa mi na ti on w a s n o t n e c es s a ry. It w a s f urt he r s ub mi tt e d th at e a r l i e r , e ve n S hr i M an o j K u ma r, th e D ir ec t o r h ad a cc e p te d t he fa c t o f un de r i nv o i c i n g a n d s u pp re s s io n o f s a le s i n hi s s t at e me n t a nd i t w a s on ly a t a l at e r s t a g e t ha t t h is s ta t e m en t o f ac c ep ta nc e w a s re t r a c t e d. I t w a s s ub m i tt e d t h a t th e r et ra c ti on by S h ri M an o j K u ma r wa s a n a ft er t h o ug h t a nd sh ou l d n ot b e a cc e p t e d an d t h e a ddi t i on s h o ul d b e u p he ld ba s ed on hi s ac c ep t a n c e b e fo re t h e l ow er a ut ho r i ti e s . 8. 1 T he L d. S r . D R a ls o r e fe rr ed t o th e s t at e me nt o f S h r i S h i v C h a ra n L al , E x-e mp lo y e e , w hi c h ha s b e e n re p rod uc e d a t pa ge s 23 t o 3 0 o f t he a s s es s men t o r d er a n d ma d e a pa rt i c u l a r re fe r e n c e t o t h e Q ue s t i on N o s . 6 , 7, 9 a n d 1 2, w h e r e i n t he s a i d E x- e mp lo yee h as ex p l ai ne d t h e m o dus op e r a nd i o f is s u in g par a l l e l i n vo i c es . 8. 2 S i mi l a r l y, i n r e s pe ct o f th e e - m a i l s h avi ng be en r e c o ve r e d fr o m M /s B . M . P a per M a rt a n d s e n t b y o ne S h r i S un i l K u mar, pa r t t i m e e mpl o y e e o f th e as s e s s ee c o mp an y, t he L d. S r . D R s ub m it t ed t ha t s uc h ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 25 s t at e me nt c o ul d n o t b e i gn or ed i n th e l i g h t o f t h e s t a t e m e n t o f S h r i M an is h K u ma r, D i re c t o r o f M / s B. M . P ap er M a r t, w ho a ls o h ad a cc e p te d t he fa ct o f un de r in vo i c i n g b y t he c o m p a n y. 8. 3 Wi t h r es p e c t t o t h e a s s es s e e ’s a rg u me nt r eg a r d in g t h e o p por t u n i t y o f c r os s e xa mi ni ng no t ha v i n g be e n a l l ow e d, th e L d. S r. D R su b mi t t e d t ha t e ac h a nd e v e r y fa c e t o f t h e a s s es s e e i nd ul gi n g i n u nd e r i nv oi ci ng a nd s u pp r e ss i on o f s al e s i s bo rne o ut fr o m t h e i nv o i ce s r ec ov er e d fr o m t he pr e m i s es o f S h r i S a nj a y D a hw a n a nd a ls o f ro m t he s t a te me nt s o f t h e de a le rs a s w e ll as t he E x- e m pl oy e e o f t h e c o mp a ny and n ot hi n g mor e w as re qu i r e d t o pr ov e t h e a l l e g a t io n a ga in s t t h e a ss e ss e e c o mp a ny w i t h re s pe ct to t h e u n d e r bi l l i ng a n d s u p pre s s i o n o f s a le s a nd a s s uc h t h e a s s es s e e doe s no t d es e rv e an y l e n ie nc y j us t b ec au se cr os s -e xa m i na t i on di d n o t h a p p e n. 8. 4 It w a s fu r t h e r s u b mi t te d t ha t t h e a ss e s s e e ha v in g o p t e d fo r t he D i sp ut e R es o l ut i o n S c he me o f t h e E x c i se D e pa r t me nt i n a w a y p oi nt e d ou t t ha t t he as s e s s ee ha d a c c e p t e d t ha t i t h ad i n du lg ed i n m al pr ac t i c es . 9. 0 We ha v e h e a r d t he ri va l s ub m is s i on s a nd ha v e a ls o pe r us e d t h e m at er ia l on re c o rd . We ha ve a l s o g on e t h r o ug h t he fou r s t at e m e nt s na me l y o f S hr i G u ls h an G ab a , P ro pri e t o r o f M /s A m it P a pe rs , S hr i N av ee n S al l e y, P rop o f M /s E s s E ss S al e s Co r p or at io n an d S h r i S u dh i r S e th i, P r o pr i e t o r o f M / s J . S . E nt e rp r i s e s an d a ls o o f S h r i M a ni s h J a in , P ro pr i e t o r o f M / s B . M . P ap er s M a rt . We ha ve a l s o go ne t h ro u g h t h e s t at e me nt o f S hri S hi v Ch a r a n L a l , a n Ex - e m pl oy e e o f th e c o mp an y . W e ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 26 ha v e a l s o p er u s ed t he c o pi e s o f s o m e o f t he i n vo i c es w hi ch w er e re c ov e r e d fr o m t he re s id e nc e o f S hri S a nj a y D haw a n b as e d o n w h i c h i t ha s be en a l l eg ed t ha t t h e a s s e s se e co mpa ny w a s e n gage d i n ma ki n g un a c c o u nt ed s al e s t hr ou gh un de r bi l l i ng o f i nv oi c e s. We not e t h at i t is a n u n di s p ut e d f ac t t ha t d u ri ng t h e co urs e o f s e a rc h p ro c ee di ngs c on du ct e d by t he C en t r a l E x c is e A u t h or i t i es , n ei t her a t t he p re mi s e s o f t he a s s es s e e c o mp an y n o r fr o m a ny o t he r p r e m i s es , a ny ot h e r e vi de n c e w i th r e g a r d t o u n di s cl os e d s a l e s w a s fou nd e xc e p t fo r th e i nv oi c es re c ov e r e d fr o m th e re s i d e n ce o f S hr i S a nj a y D h aw a n a n d t he i m pu gn ed a dd i t io n s o n a c co u nt o f t he u n di s c l os e d / a ddi t i o n al n e t pro fi t on s e a rc h a ll e g e d u n ac c o un t e d s a l es ha ve be e n m a d e on l y on t he b a s is o f i n vo i c es re c ov e r e d f ro m t he re s id e n c e o f S hr i S an j a y D h aw a n a s w e l l as th e s t at e me nt s o f S / S hr i G u ls h a n G a b a , N av e e e n S a l l ey , S u d hi r S e t hi , M an is h J a in a nd S h i v Ch a r a n L a l . I t i s a l s o a n u nd is p u t e d fa c t t h at t h e a s s es s e e ha d s p ec i f i ca l l y re que s t ed t he A O t o p ro vid e a n op p or t u ni t y t o i t t o c ro s s - e xa mi ne th es e fo ur p e rs on s bu t s uc h oppo rt u ni t y w a s no t gr a n t e d an d t he A O br us he d as i de t h e r e q u e st o f t h e a s s es s e e f or t h e op por t u n i t y t o c ro s s- e xa mi ne th es e p er s o ns b y s i m pl y obs e rv i n g t ha t s i nc e t h e a s s es s e e ha d no e x pl an at i on t o o ffe r, t h er e w a s no r eq u i r e m e n t fo r g i v i n g a n y s uc h op po r t un i t y. Th us , th e fa c t re m ai ns t ha t t he A O ha d p ro ce ed e d t o ma ke t he i mp u g ne d a dd it i o ns on th e ba s is o f s t at e me nt s re c or de d beh in d t h e ba c k o f t h e a s se s s e e and w it ho ut gi vi ng a ny p ro pe r o pp o r t uni ty t o t he a s s es s e e t o r e b ut t h e s a me by c ro ss e xa mi na ti on. It i s a s et t l ed l aw t h a t u nl e s s an d u nt il t he a ll e g a t i o ns ar e ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 27 s up p ort e d b y a d e q ua t e a nd s u p p or t i ng c orr o bor at i v e e v i d e n c e, t h e a dd i t io n s o ma d e w ou l d n o t h av e a n y fe e t t o s ta nd on. H ow e ve r, t h e D ep ar t m en t fa il e d t o f ol lo w t hi s c a r di na l pr i n c i pl e o f p r o vi di ng a de qu a t e op po r t un i t y f or r e b ut t a l o f e v id en c e b e i n g s o u g ht t o be r e l i e d up on. 9. 1 It i s a l s o a fa ct o n r e c o rd t h a t S hr i S a nj a y D ha w an f r o m w h os e pr e m is e s , t he 2 25 i nv oi c es w e re re c o v er e d , w as t he E x- P re s id en t o f t h e a s s es s e e c o m pa n y w h o le ft t h e c o m pa n y i n t he ye ar 2 0 1 3 i t s e l f w h e r e as t he s e a r c h h a d t ak e n pl a ce i n 20 16. It i s a l s o bor ne o ut fr o m t h e re c o rds t ha t t h e as s e s s ee c o m pa ny h ad l o dg ed an F I R a g ai ns t S h r i S a n j a y D ha w an al l e g i n g t h e ft o f d oc u me nt s o f t he c o m pa n y li ke i nv o i c e s , b i lt y bo oks e t c. as w e l l a s t he r u b be r s t a mp o f t he c o mpany . Th is fa ct , a l on g w i th th e e v i d e nc e o f h a v i ng f il e d t h e F I R an d o th er c o mp la i n ts w as du l y b ro ug ht t o t h e no t i c e o f t he A O dur in g t h e c ours e o f a s s es s m en t pr o c e e d i n gs but t h e s a me w a s n ot g i v en a n y c o ns i de ra t i on by t he A O a nd t he A O c h os e t o r e l y on s uc h in vo i c es re c o v ere d fro m t h e pr e m is e s o f S hr i S anj a y D haw a n fo r t h e p ur p os e o f co m p ut i ng t h e a ll e g e d u nr e c o rd e d sa l es . E v e n t ho ug h, th e a s s es s e e co m p a n y h a d de mo ns t ra t e d w i t h a mp l e e v i de nc e t hat S h r i S a nj a y Dha w a n w as a di s gr un t l e d e mp lo y ee o f t he c o m p a n y w hos e i nt en ti ons w e re n o t a bo v e bo a r d an d w h o c o u l d ha v e p o s s ib l y i n d ul g ed i n s o m e k in d o f m al pr a c t i c e t o pu t t h e a s s es s e e c o m pa n y i n to u nne ce s s a r y fi n a n ci a l t r o u bl e a nd l it i g a t i o n , t h e A O ch o s e t o b u il d t he fo u n da ti on o f t he ca s e o f t he D ep ar t m en t e n t i re l y o n s uc h in vo i ce s w hi ch w e re n ot ad mi s s ib le as ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 28 e vi de n c e o n s ta nd –al on e ba s is . U n fo rt un a t el y, e v en t h e L d. F ir s t A ppe l la t e A ut ho ri t y di d n o t gi ve a ny c re d e n ce t o t hi s ve r y i mp ort an t s ub m i s s io n o f th e a s s e ss ee an d p ro c e e de d t o c on fi r m t h e qu a n t u m o f t h e a ll e g e d u nr ec or ded s al e s w it ho ut a p p re c i a ti n g a p rob a b il i ty t h a t S hr i S a nj a y D ha w a n c o ul d h ave ve r y w e l l for ge d t h e d o c u me n t s t o t he di s a d va nt ag e o f t h e a s s es s e e c o m pan y due t o s t ra i n ed r e l a t i o ns be t w e en t he as s e s s ee c o mp a n y a n d S h ri S a n j a y D h aw a n. It w oul d n ot be o ut o f pl a ce t o a g a i n u nd e rl i ne t he f a c t t ha t t he c o mp l a ints a s w e l l as t he F IR a ga in st S h ri S a nj a y D haw a n h ad be e n fi l e d by t h e a sse s s e e co mp a n y m u ch b e f or e t h e da t e o f s ea r c h by Ce n t r a l E xc i s e A uth o r i t i e s a n d , t he re fo re , b y n o s t r e t c h o f i ma gi na t i on it ca n be in fe rr e d th a t t h e a c t o f fi l in g o f t he c o mpl a in ts a n d F I R w a s an a ft e r t h o ugh t b y t h e a s s es s e e c o mp a n y. I n li gh t o f t hi s fa ct ua l m at r i x, t he r e li a nc e o f th e D e p a r t m e n t on t h e a fo r e s ai d i nv o ic e s , i n ou r co ns i d e r e d op i n i on, h as l i tt l e pe rs u a s i v e v al ue . 9. 2 We h a v e a l s o g o ne t h ro ug h th e C h a r t pl a c e d a t pa ra gr a p h N o. 7. 8 a bo ve w h i c h h as be e n fi l e d b y t h e Ld. A R , w her e i n , it h as be en de mo ns t ra t e d t h a t t he a l l e ga t i on t h a t u n re co r d e d g oo ds w e re b ei ng t ra ns po r t e d b y ve h i cl e s ow n e d by t h e a s s es s e e c o m pany i s i nco rr e c t i n a s mu c h as , it ha s b e e n de pi c t ed i n t he a bo v e s a i d c h a rt t h a t i t w as ph ys ic a ll y i mp os s ib le fo r th e s a m e v eh i c l e t o h a v e de l i v er ed g o ods a t t w o d i f fe r e n t s t a ti o ns w i th in a s h o rt s p an o f t i me o n t he s a me da y w h e n t i m e i s r eq ui re d n ot o n ly f or mo v e m e nt o f g oo ds fr om on e s ta t io n t o ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 29 a no t h e r b ut ti me is a ls o re q u i r e d fo r l oa d i n g a n d u nl oa di ng o f g o o ds . A pe r u sa l o f t hi s c h a rt w ou ld m ak e i t ve ry c l ea r th a t b y t ak in g i nt o c ons i de ra ti o n t h e d i s t an ce fr o m o n e s t a t i o n t o a no th e r, t h e s a me ve h ic l e c ou l d n ot ha ve b e e n d e p l o ye d f or t r a n s p ort i n g t h e ne x t c ons i g n m e n t on t he ve ry s a m e d a y. W e n ot e th at t hi s s ub mi s s i on w a s a l so ra i s ed b y t h e a s s es s e e bo th b e f or e t he E x c i s e A ut h or i ti e s a s w e l l a s b e f ore t h e I nc o m e T ax A u t h o ri ti e s b u t t he s a m e d id n ot f in d an y fa vo ur w i t h t he m. W e no t e fr o m t he o rd e r of t h e I nc o m e Ta x A u th or i t ie s be l ow th a t t h e y h a v e no t e ve n c ons i de re d t he s e s u b mi s s i on s o f t h e as s e s see b u t h a ve s i mp l y pr o c e e d e d t o c o m p ut e t h e q ua n t u m o f a ll e ge d re c o rded s a l es . T hus , f or t hi s r e a s o n a l s o, t h e re l i a n c e o f t h e D e pa rt me nt o n t he i nv o ic es fa il s t o m ee t t h e te s t o f l og i c a n d r ea s o na bl e n e s s. 9. 3 We ha v e a ls o go ne t hr o u gh t h e s t a t e me nt o f S h ri S h i v Ch a ra n La l , E x- e mpl oy ee o f t he co mp a n y, w h er e i n, he h a s s t a te d t ha t p a r a l l e l i nv o i c es w e re de s t r oye d a ft e r t he c on s ig n me nt o f u nr e c or de d s a l es h a d be e n de l i v er ed a n d, t h e re fo re , i f t hi s s t a t e me n t is as s u me d t o be c o rre c t t he n t h e re co ve r y o f s uc h pa r a l l e l i n voi c es fr o m t he p r e mi s es o f S h r i S a nj a y D haw a n is in c o mp le t e c on tr ad i c t io n o f t he st a t e me n t o f S h r i S hi v Ch a ra n L a l. T h us , a pp a r e nt l y ei t he r t he s t a teme n t o f S h ri S hi v Ch a ra n L a l i s i n c orr ec t o r t h e p ar a l l e l in voi ce s rec o v e re d fro m t h e pr e m is e s o f S h r i S anj a y D ha w a n a r e t he i n vo i c es w h ic h w e re no t ge n e r a t e d by t he a s s e ss e e c o mp an y . I n s uc h a s ce nari o, t he r e l i a n c e o f t he D e p a r t me n t on t he s e i n vo i c es d o es no t h ol d go od. ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 30 9. 4 We a l s o n o te t h a t i ni t i a l l y S h ri M a n o j K u ma r, the D i r e c t or o f th e a s s es s e e co mpa ny ha d a c ce pt ed t he pr ac t ic e o f t h e as se s s e e c o mpa ny o f i s s ui ng p a r a l l e l i n voi c es a n d o f ma ki n g s a le s ou t s id e t he bo oks o f a cc ou n t b ut t h is a cc e p t a n c e w a s l at e r o n re t r a c t e d . T hi s re t ra c t i on b y S hr i M a no j K u ma r is av a i l ab le o n r e c or d an d w e a l so n o t e t ha t t h e A O , w hi l e ma ki ng i mp u g ne d ad di t i ons b a s ed a n a l l e ge d u nre co rd e d t ur n ov e r , d i d n ot p oi n t o u t t o w ar d s a ny c or ro bo r a t i v e ev i d en c e r ec o ve r e d fr o m t he pr e mi s es o f t h e a ss e s s e e w hi ch w o u ld i n d i ca te t h at th e a s s es s e e c o mp a n y w a s e n g a g ed i n e i th er m a k i n g pa r a l l e l i n vo ic es o r un de rv al ui n g t he i nv oi c es o r m ak i n g s a l e s ou ts i d e r eg u l a r bo ok s o f ac co un t . H er e a ga in , t he de ni a l o f c r os s - ex a m in a t i o n b y t h e In c o me T ax A u t h or i t i es ha s a s ig ni f i c a n t b e ar in g o n t h e fi na l out c o me o f thi s b a t c h o f a p pe a ls fo r t he s i mp l e r e a s on th at t he A O ha s r el i ed u po n th o s e s ta t e me n ts w hi ch h ad b ee n re co r de d a t t he b a c k o f t he as s e s s ee a n d th e a s s es s e e w as not g iv en a n y o p po r t u ni ty t o e ff e c t i v e l y to r eb ut t h e s a me . T h is is i n th e v e ry t e et h o f t h e j u d ge me nt o f t h e H o n ' bl e Ap e x co urt in t he ca s e o f M /s A nda ma n T i mbe r I nd u s tr i e s ( s upra ) w her ei n it h as be e n s pe c i f i c al l y he l d t h at w h e r e t h e p a r t y i s bei ng a dve rs e l y a ffe c te d by t h e s t at e me nt o f a t h ir d p a r t y, de n i a l o f c ros s -e x a mi n at io n o f s u c h e ff ec t e d pa r t y w o u l d n ot b e i n ac c o r da nc e w it h l aw . T he H on' bl e A pe x C ou rt i n i ts j ud ge me nt i n th e ca s e o f A nda ma n Ti mb e r Ind us t ri es V s. Co m mi s s i on e r o f C en t r a l Ex c i s e ( s up r a ) he l d a s u nd er : - “ Ac c or d i n g t o us , no t a ll o w i n g t he as s e ss ee t o c r os s -e xa m i ne t h e w i t n e s s es by t he A d j u di c at in g A ut hor i ty th o u gh t he s t a t em e nt s o f t h os e wi tn es s e s ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 31 we r e m ad e t h e ba s i s o f t he i m p ug n e d or d er i s a s e r io us f l a w wh i c h m ak e s t he or d e r nu ll i ty i n as m uc h as i t am ou n t e d t o v io la ti on o f p r in ci pl e s o f n at ur al j us t i c e b e c a us e o f wh i c h t h e as s e s s ee w as ad v e r s el y af f ec t e d. It is to be bor n e i n m i nd t h a t t he or de r o f t he C om m i s s i on e r was bas e d up on t h e s t at em e n t s gi v en b y t he a f o r es ai d t wo w it ne s s e s. Ev e n w h en t h e as s e s s ee di s put e d t he c o r r ec t n es s of t he s t a t em e n t s an d w an t e d t o c ro s s -e xa m i n e , t he A dj ud i c at in g A ut hor i ty d i d no t gr an t t h i s o p po r t un i t y t o t h e as s e s s ee . I t wo u l d b e p e r ti ne nt t o n ot e t h at in t h e i m pu gn e d o rd er pa s s ed b y t h e A dj u di c a t i n g A ut hor i ty he ha s s p e c i f i ca l l y m e nt i o n e d t hat s uch an op por t u ni t y wa s s o u g ht by t he as s e s s ee . H o wev e r , n o s uc h o pp or tu ni t y w as gr ant e d a nd t he a fo r es a i d p l e a i s not ev e n de a l t wi t h by t he A d ju di ca t i ng A u t h or i ty. 9. 4. 1 A s i mi l ar v i ew h as be e n t a ke n b y t he H on' bl e J u ri s di ct i o na l H i gh Co ur t i n t he c as e o f C I T V s . Ra j es h K u m a r ( 2 008 ) 3 0 6 I TR 27 (D e l h i . ) w he re in i t ha s b ee n he l d as un de r -: “ T hat t h e m at e r ia l co l l e c t e d by t he D e par t m en t be h i n d t he b ac k of th e as s e ss e e w a s us e d ag a i ns t hi m w i t h o ut di s c l o s i ng th e m at e r ia l o r gi vi ng an op por t u ni t y t o c r os s -e x am i n e t he pe r s on w ho se s t at em e nt h a d b ee n u s ed by t he D e p ar t m en t a ga i ns t t he i n te r e s t o f th e a s se s s e e. T he r e was v i ol at i o n of t he pr i n c i p l e s o f na tu r al j us t i ce . ” 9. 4. 2 S i mi l a r l y, t h e H on ' bl e D e lh i H i gh C o urt i n the ca s e o f C I T V s D h ar a m P al P re m Ch a n d L t d. ( 2 00 7) 29 5 IT R 10 6 hel d as u nde r: " T hat t h e As s e s s in g O f f i c e r h ad bas e d hi s a s s es s m e nt or d er o n t he r ep or t o bt a in ed f r om t he r e s e ar c h i ns t i t u t e . T he c or r ec t n e s s of t ha t r e po rt it s e l f h avi n g be e n u n d e r c h al le ng e by t h e as s e s se e w h o ha d n ot on l y fi l e d ob j ec t io ns th er e t o bu t al s o s ou g h t pe r m is s i on o n se v e r a l oc c a s io ns to c r os s -e x am i n e t he ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 32 an al ys t e v e n agr e e i n g t o pa y t h e n e c e ss a r y ex pe ns e s, t he r e p or t c ou l d n ot au t om a t i ca l l y h av e be e n ac c ep t e d. Si n c e th e A s s es s i ng O f f ic e r di d no t per m it t he c or r ec t n e s s or o t h er w i s e o f t h e r e por t t o b e t es t e d, th er e w as a c le ar v i o l a t i o n o f t h e pr i n ci ple s of n at ur al j us t i c e by h im in r e l y i n g u p on i t to t h e de t r im e nt of th e a s s e s s e e. E ve n i f t h e s t r i ct r ul e s of e vi de nc e m ay n ot ap pl y t o a s s es s m e nt pr oc e e d in g s , t he b a s ic pr in c i p l e s of n at ur al ju s t i c e wo ul d a pp ly to t he f ac t s of t he c a s e. " 9. 4. 3 O n a s i mi l a r i s s ue , th e H o n 'b le M a d h ya P ra des h H i gh C our t i n t h e ca s e o f P ra k a s h Ch a n d N a h t a V s C IT ( 2 0 08 ) 3 01 I TR 13 4 h e l d as un der : " T hat as th e As s e s si ng O ff i c er h a d n ot s um m one d R i n s p i te of t he r e qu es t m a d e u nd e r s e c t i o n 13 1 o f the A ct , t h e e v i de n c e of R c ou l d no t h a ve b e e n us e d ag ai ns t t he a s s es s e e a n d i n t h e a bs e n c e o f a ff or d in g a r e as o na bl e op por t u ni t y o f be i n g he ar d b y s um m oni n g t he s ai d w i t nes s t h e as s e ss m e nt or de r wa s v i t i a t e d. " 9. 5 T he r e f o re , i n ou r c ons i de re d o p i n i o n , i n ab s en ce o f s u ch c r os s - e xa mi na ti on h a v i n g be en a ll ow e d t o t h e a ss e s s e e an d a l s o i n vi ew o f n o i nc ri mi na ti ng ma t e ri a l ha v i n g be e n r e c ov e r e d fr o m an y o f t h e p re mi s es s e ar c he d, c o up le d w i th th e f ac t t h at t he st a te m e nt o f S h ri S h i v Ch ar a n L al , Ex - e m p l o ye e i t se l f s t at e s t h a t t he pa r a l l el i nv oi c es us e d t o b e de s t r oy e d a f te r t he de l iv e r y o f t h e c on s i gn me n t s , th e v e r y fo un da t i o n t o m a ke t h e a dd i t io ns on a c c o un t o f un r e c o rd e d s a l e s st an d s d e m ol is h e d. T he fa c t t h a t pa r a l le l i n v o ic e s w e re r ec o ve re d fr o m t he E x -P re s i d en t a ft er t h r e e y ea rs o f h is ha vi ng l e ft t he a s s es s e e co m pa ny u nd e r ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 33 c ir cu ms t a n c e s i n w hi ch t h e a s s es s e e c o m pa ny ha d a l re a d y fi l e d c o mp l a i nt a nd F I R a ga in s t h i m ( S hr i S an j a y D h aw a n) al s o d oe s no t s up p ort t he c a s e o f t he D ep ar t m en t i n a s mu c h as the D e p a rt me nt s ho ul d no t ha ve p l a c e d c o mp le t e r e l ia n c e w i th o ut a n y c or r obo r a ti ve e v i de nc e on s uc h do cu me nt s w he n t h e c on du c t o f S hr i S a n ja y D h aw a n it s e l f w a s un der s u s p i c i o n. Th er e f or e , i n v i ew o f t h e a bo ve n ar ra t e d fa c t ua l m a t r i x a nd a ft e r du ly c o ns i de r i n g t he va ri ous e vi de nc es w hi c h t he D ep ar t m en t ha s re l i e d u po n fo r ma k i n g t h e i m p u gne d a d d i ti on s , w e a re o f t h e c ons i de re d o p i n i o n t h a t th e a dd it i o ns b as e d o n s u c h a l l e ge d u nr e c o rd ed s a le s do no t ha ve an y s o un d b a s is a n d , t he re fo r e , for a s s e s sme n t y e a rs 20 12- 1 3 a n d 2 01 3- 14, t h e i m p ug ne d a d di ti on s o n a c c ou n t o f a d d i t i on a l ne t p ro fi t e a r ne d o n a ll e ge d un re c o rd e d s a l e s ar e lia bl e t o be d el e te d. I t i s so ord er e d a c c o r di n gl y. 9. 6 Co m i ng t o th e s i mi l a r a d d i t i ons ma de in a s s e s s me nt y ea rs 20 1 5- 16 , 20 16 -1 7 a n d 2 0 1 7-1 8, i t is se e n t ha t t h e b as i s o f a d di t io n i s e - ma i l c o mm u n i c a t i on r e c ei v e d fr o m t h e e l e ct r o n ic re c o rds o f M / s B. M . P a pe r M ar t a nd t he s a i d e - m ai l ha s b e e n al l eg ed ly s en t b y on e S h r i S u ni l K u ma r , p ar t t i m e e mp lo ye e o f t h e a s s ess e e c o m p an y. Th e A O h as re p r o du c e d t he e xt r a ct o f th e e- ma il in t he a s s es s me n t ord er a nd fu r th e r t he D e pa r t me n t h as re l ie d up on t he s t a te me n t o f S h ri M a n is h J a i n o f M /s B. M . P a pe r M ar t f or t he pur pos e o f c o mp ut i ng th e a ll e ge d un r e c or d e d s a le s . H ow e ve r i t i s t o be n ot e d t ha t w he n S h r i S u nil K u ma r w as s u m mon ed by t h e A O , he s pe c i f ic a ll y d e ni e d ha vi ng any k n ow l e d ge ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 34 a bo ut t h e e - m ai l s a y in g t ha t e - m a i l i d fr o m w h i c h th e p u rp o rt ed e - ma i l w as s en t di d n ot b e lo n g to h i m. I n an a ns w er t o a n ot he r que s t i o n po s e d by t h e A O r eg ar di n g t he c on t e nt s o f t h e e - m a i l a nd a l s o w i t h re fe re nc e t o r ec or d N o. 39 co n t a i n i n g 26 5 p a g e s , S h ri S un il S ha r ma e xp re ss l y s t at e d t h a t h e h ad s i gn e d on t he fi rs t a nd l a st p a ge un d er pr e s s ur e a n d t ha t f urt he r he di d not a g r ee w i t h i t s c on t e nt s. T hu s , S h r i S uni l K u ma r ha s s p ec i fi c a ll y de ni e d h a v i n g a n y k n o w l e d ge a b ou t th e tr a ns a c ti o n s on w hi ch t h e i m pu gn e d ad d i t i ons w e re b a s ed . It i s fu rth er s ee n t h a t e v e n a ft er S h ri S u ni l K u m ar h a d m a d e a sp e c i fi c de ni a l wi th r e s p ec t t o ha vi ng s e nt t h e e- ma i l an d al s o w i th r es p ec t t o h a v i n g a ny k n ow l e dg e ab ou t t h e c on t e n ts o f r ec or d N o. 39 , bot h t h e l o w e r a ut ho r i t i es o f t he I n co me T a x D ep ar t m en t d id n o t gi v e a n y c re de n c e t o s uc h d e n i al o f S h r i S u ni l K u ma r b u t pr o ce e d ed t o m a k e t h e i mp u g ne d a d di t i o n s bas e d o n t h e s t at e me nt o f S h ri M an is h J ai n a nd , t her e f or e , t hi s a c t i o n o f t h e I nc o m e T ax D e pa rt m e nt c a nn ot b e h e ld t o b e s u st a i n a b le i n t h e e y e s o f l a w s pe c i f i c al l y b ec a u s e t he A O d i d n o t ma ke a ny i n de pen de nt i n q ui r i es pr i o r t o ma k i n g t h e i m pu gn ed a dd i t i o ns but s i mp l y rel i e d o n th e t h i r d pa r t y e vi de nc e w i th o ut b ri ng i n g on r ec or d a n y c o r ro b ora t i v e f urt he r e vi de n c e . In t he p re s en t a pp e a l s , it i s undi s p u t e d t h a t n o c o rr o b or at i ve e vi de n c e has be en f ou nd fr o m t he b u s in es s pre mi s e s o f t he a s s e ss e e a nd t he I nc o me T ax A u th o r i t i e s h a v e s i m pl y r e li e d o n the c ont en ts o f t he e - ma i l a nd t h e s t a t e m en t o f S h ri M a ni s h Ja i n w i t h out le a di ng fu rt he r e vi de n c e w h i c h c o ul d s t re ng t h e n t he ca s e o f t he D epa r t m e n t a nd , t he re fo re , w e a re u nab le t o ag re e w i t h su ch a ct i o n o f t h e D e pa rt me nt i n ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 35 pl a ci ng i ts en ti re r el i an ce o n s u c h t h i rd p a r t y e v id e n c e w it h ou t t h er e be i ng a n y c o rr o b or at i ve e vi de nc e t o m a ke th e i mpu gne d a d di ti on s . O nc e a ga in , w e w ou l d l i k e t o re fe r t o th e s t a t e me n t o f Sh r i S hi v Ch a r a n L a l , a n E x- e m pl oy e e, w ho h a s c a te g or i c a l l y s t at e d t h a t the as s e s s ee co m pa ny us e d t o d es t r o y t he al l eg ed pa r a l l e l i n v oi ce s o nc e t he c o n s ig n me nt w a s de l iv er e d. T h is s ta t e m en t o f S hr i S hi v C ha ra n L a l g oe s co n t r a r y t o t h e fa c t o f i n vo i c e s b ei n g re co ve r e d d ur i n g t h e s e a rc h a t t he r e s i d en ti a l pr e m is e s o f S hr i S an j a y D h a w a n. I t i s a l s o w or t h not i n g th a t a s p e r th e e - ma i l p ri n t o ut for J un e 2 01 5, th e b i l l nu mb e rs are r un n i ng i n t o s e r i es o f 2 00 w he re as a s p er t he re gu l ar bo o k s o f ac c o un t t h e s e ri al n u m be rs o f t he i nv oi c e s f or t he m ont h o f J u n e 2 0 1 5 i s i n t he se ri e s o f 7 00 o n w a r d s. T h us , t hi s ap p a re n t c on t ra di ct i o n c a s t e s a dou bt on t he v er a c i ty a nd t he e vi de n t i a r y v a l ue o f t h e i nv oi c es re c ove re d fr o m t he pr e mi s es o f S hr i S a nj a y D ha w a n. A cc o r d i n gl y, on an ov e r a l l vi e w o f t he fa c tu al m a t r i x o f t he ca s e a n d f or t he v ar io u s re a so ns a s a for e m enti o ne d in t he pr e c e d i n g p ar a g r a phs , w e a re o f t he c o ns i d e r e d o pi ni o n t h at t h e D ep ar t m en t c o u l d n ot ha v e v al i d l y ma de t h e i mp u gne d a d di t i o ns by pl a ci ng s o l e r e l i an c e o n t h e i n v oi ce s r e c o v er ed fr om t h e r e s i de nc e o f S hr i S a n ja y D h a w a n a s w e l l a s o n t h e s t at e m e n t o f t h e va r i o us t hi rd pa r t i es vi z. S / S h ri G ul s ha n G ab a, N a v e e n S a l l e y a n d S ud hi r S e th i w hi c h w er e r e c or d e d a t t h e b a c k o f t h e a s s e s se e w i t h ou t gi v i n g t he op po r t u n it y t o t he as s e s s ee t o c r os s e xa mi ne t he m. A l s o, for th e re as o ns me n t i o n e d i n t h e p r e c e d i n g pa ra g ra ph s , t he i m p ug ned a dd it i o ns c ou l d no t h a ve be e n m a de o n t h e ba s i s o f t he s t a t e me n t o f S hr i M an is h Jai n an d t h e ITA Nos.82 to 86-Chd-2022- M/s. DSG Papers Pvt. Ltd., Patiala 36 e le c t r o ni c re c o rd d i s c ov e r e d fr o m t h e pr e m is e s o f th e M / s B. M P a pe r M ar t, D e l hi b e c au s e t he or i g in o f t he e - ma i l w a s n ot e st a bl is h e d . T he r e f o re , w e h ave no op t i o n bu t t o d i re c t t he de l et i o n o f t he i m p ug n e d a dd i t io n s i n a ll t h e fi v e ye ar s und e r c on s id er a t i o n. It i s s o d ir ec t e d a cc or d i n g l y. 9. 7 A s fa r as t h e i s s ue o f re j ec t i o n o f bo oks o f a cc o u n t i s c o nc e r n e d , s i nc e w e ha ve a l r e a dy a l l o w e d t h e r e l i e f t o t h e a s ses s e e o n me r i t s o f t h e c as e by h o l di ng t h at t h e i mp u gn e d a d di t i ons ar e no t s us t ai na bl e , th e qu es t i o n o f re je c t i on o f b oo ks o f a cc ou n t a s s u m es onl y a ca de mi c i nt er es t , an d t he r e fo re , i t i s n ot be i ng a d j u di c a t ed at t h e p re s en t j un c t ur e . 10 . 0 In t he fi na l r es ul t , th e e nt ir e fi v e ap p e al s s ta nd p a r t l y a ll o w e d. O r de r pr o n ou n c e d on 29 . 07. 2 02 2. Sd/- Sd/- (N. K. SAINI) (SUDHANSHU SRIVASTAVA) V i c e P r e s i de n t J u di c ia l M e m be r Dated : 29.07.2022 “आर.के .” आदेशक त*ल+पअ,े+षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु -त/ CIT 4. आयकरआय ु -त (अपील)/ The CIT(A) 5. +वभागीय त न0ध, आयकरअपील#यआ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar