ITO, V. Shri Dhruv Kumar Maheshwari,

ITA 87/JAB/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0899 (ITAT-JABALPUR)
• Duration Of Justice: 8 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2010
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Assessee Lawyers: A P SHRIVASTAVA; SA
• Keywords: Unexplained cash credit; Peak credit
• Section: 68

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE (CAMP AT JABALPUR) BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 87/JAB/2010 A.Y.2007-08 INCOME TAX OFFICER WARD KATNI :: APPELLANT VS DHRUV KUMAR MAHESHWARI KATNI PAN ADTPM6547J :: RESPONDENT CO NO.10/JAB/2010 (ARISING OUT OF ITA NO. 87/JAB/2010) DHRUV KUMAR MAHESHWARI KATNI :: OBJECTOR VS INCOME TAX OFFICER KATNI :: RESPONDENT DEPARTMENT BY SHRI ABHISHEK SHUKLA ASSESSEE BY SHRI A.P. SHRIVASTAVA & SHRI SAPAN USRETHE DATE OF HEARING 13.9.2013 DATE OF PRONOUNCEMENT 2 8 .10.2013 2 O R D E R PER JOGINDER SINGH , JUDICIAL MEMBER THE ONLY GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS. 4,37,33,824/- MADE U/S 68 OF TH E ACT ON ACCOUNT OF CASH CREDIT. 2. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE I S IN SUPPORT TO THE ADDITION MADE BY THE ASSESSING OFFICER ON TH E PLEA THAT CASH WAS DEPOSITED IN THE BANK ACCOUNT, THEREFORE, THE A DDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE WAS MAINTAINING E-BANKING FACILITY AND WAS CHARGING MERELY COMMISSION. IT WAS POINTED OUT THAT THE ASS ESSING OFFICER NEVER ASKED FOR ANY SOURCE OF MONEY FOR WHICH OUR A TTENTION WAS INVITED TO PARA 7 PAGE 5 OF THE ASSESSMENT ORDER. I T WAS EMPHATICALLY SUBMITTED THAT THE ASSESSING OFFICER V ERIFIED THE SAME WHICH TOOK ABOUT ONE YEAR. A PLEA WAS ALSO RAISED THAT NO CASH WAS DEPOSITED AS HAS BEEN CANVASSED BY THE LEARNED SENI OR DR, RATHER ALL THE PAYMENTS ARE THROUGH CHEQUE AND THE COMMISS ION EARNED WAS OFFERED FOR TAXATION BY THE ASSESSEE. 3 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF T HE ORDER OF THE LEARNED CIT(A) FOR READY REFERENCE :- NOW SO FAR AS THE ALLEGATION OF COUNSEL OF THE APP ELLANT THAT THE ASSESSMENT ORDER WAS PASSED AT THE DICTATE OF THE HIGHER AUTHORITIES IS CONCERNED, THERE IS NO DIRECT EVIDENCE FOUND ON THE BASIS OF WHICH IT COULD BE CONCLUDED T HAT THE A.O. HAD PASSED THE ORDER AS DICTATED TO HIM BY HIS ADDL. COMMISSIONER AND THAT HE HAD NOT APPLIED HIS MIND. THE CONTENTS OF THE ORDER IN RESPECT OF ALL THE THREE A SSESSES OF THIS GROUP MAY BE THE SAME BUT IT DOES NOT MEAN THA T THE A.O. HAD NOT APPLIED HIS MIND AND THAT HE BLINDLY T AXED THE INCOME AS COMPUTED BY HIS SUPERIOR. SINCE THE FACTS AND CIRCUMSTANCES OF ALL THE THREE CASES WERE IDENTICAL AND IT WAS EASIER AND CONVENIENT AND ALSO IN CONSONANCE WI TH EACH OTHER THE ASSESSMENT ORDER WAS PASSED ON THE S AME LINE. FOR THIS PURPOSE EVEN IF THE ADDL. COMMISSION ER, ACIT AND THE ITO DISCUSSED THE MATTER TOGETHER AND DECID ED TO USE THE SAME STYLE OF LANGUAGE, THERE WAS NOTHING U N- LAWFUL AND ON THIS GROUND ONLY THE ASSESSMENT ORDER CANNOT BE HELD TO BE INVALID. ON GOING THROUGH THE ORDER, IT HOWEVER, IS FOUND THAT THERE IS A BIG LACUNA OR POT ENTIAL MISTAKE IN SO FAR AS THE APPELLANTS ARGUMENTS HAVE NEITHER BEEN BROUGHT OUT IN THE ORDER NOR THEY HAVE BEEN CONTROVERTED BEFORE TAKING THE DECISION TO TAX THE INCOME U/S 68, THE WAY IT HAS BEEN DONE BY THE A.O. SO FAR THE AS THE A.O.S REMARKS REGARDING CURBING OF VARIOUS MALPRACTICES AND ANTI-SOCIAL ACTIVITIES AND MONEY LAUNDERING ACTIVITY, IS CONCERNED IT WAS NOT DIRECT LY WITH 4 REFERENCE TO THE APPELLANTS BUSINESS ACTIVITIES BU T IT WAS WITH REFERENCE TO THE RULES AND REGULATIONS ISSUED BY THE R.B.I. WHICH (ACCORDING TO THE A.O.) WERE NOT ONLY OF REGULATORY IN NATURE BUT ALSO ACT AS AN INSTRUMENT TO IMPLEMENT THE GOVERNMENT POLICIES WHICH ENSURES FIS CAL DISCIPLINE AND ALSO MALPRACTICES AND ANTI-SOWAL ACT IVITIES. IN ANY CASE DISUSING THE AOS OBSERVATIONS WHETHER THEY ARE CORRECT OR NOT AND WHETHER THEY NEED TO BE EXPU NGED OR NOT WOULD NOT HELP IN ANY WAY AND SERVE NO PURPOSE IT WOULD BE MORE APPROPRIATE IF THE CRUX OF THE MATTER IS DIRECTLY DEALT WITH. THE AOS FINDING THAT IT IS TH E ONUS UPON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF C ASH CREDITS AND TO PROVE ITS SOURCES, IS TRUE AND CORRE CT TO CERTAIN EXTENT, BUT ONLY WHEN THERE ACTUALLY WERE C ASH CREDITS ENTRIES. IN SUCH A SITUATION THE ONLY LOGIC AL AND ACCEPTED METHOD WAS TO TAX PEAK OF THE CASH CREDIT OF THE YEAR AND NOT THAT AMOUNT WHICH HAS BEEN WORKED OUT BY THE A.O. WITHOUT ANY SOUND AND SETTLED PRINCIPLE OF ACCOUNTANCY. THUS THE ENTRIES IN THE BOOKS OF ACCOU NTS AT ITS PEAK CAN ONLY BE TAXED UNDER SEC.68 WHEN THE S OURCES OF SUCH FUNDS REMAIN UNVERIFIABLE. HOWEVER DURING T HE COURSE OF APPELLATE PROCEEDINGS IT WAS CLAIMED BY T HE APPELLANT THAT SO FAR AS HE IS CONCERNED, FOR ISSUI NG OUT- STATION CHEQUES HE WAS NORMALLY RECEIVING FUNDS THR OUGH ACCOUNT PAYEE CHEQUES ONLY AND 99% OF THE ENTRIES W ERE EXPLAINABLE AND VERY WELL VERIFIABLE AND THEREFORE THERE WAS NO QUESTION OF TAXING THE SAME U/S 68. IT WAS A LSO ARGUED THAT HAD THE AO GIVEN HEED TO HIS ARGUMENTS AND ALLOWED OPPORTUNITY TO THE APPELLANT, HE COULD HAVE EXPLAINED THE SOURCES OF ALL THE RECEIPTS AND THE A O WOULD NOT HAVE MADE SUCH AN ARBITRARY ASSESSMENT. BECAUSE OF THESE REASONS THE BOOKS OF ACCOUNTS AND RELEVANT DOCUMENTS WERE EXAMINED AND IT WAS FOUND THAT IN MO ST OF THE CASES THE TRANSACTIONS WERE THROUGH ACCOUNT PAY EE 5 CHEQUES ONLY. THIS MEANS THAT EVEN PRIOR TO ISSUANC E OF OUTSTATION CHEQUE, EQUAL AMOUNT WAS RECEIVED BY THE APPELLANT MOSTLY THROUGH ACCOUNT PAYEE CHEQUES ONLY . SIMILARLY IN MANY CASES, A/C PAYEE CHEQUE WAS ISSUE D FIRST AND EQUAL AMOUNT WAS RECEIVED LATER THROUGH A /C PAYEE CHEQUE ONLY. THIS MEANS THAT IT WAS NOT A CAS E OF SIMPLE CASH CREDIT ENTRIES AND TO THE EXTENT THE AS SESSEE WAS IN A POSITION TO PROVE THE SOURCE OF SUCH CREDI T ENTRIES, IT COULD NOT BE BROUGHT TO TAX U/S 68. INITIALLY VI DE LETTER DATED 22 ND FEBRUARY,2010 A SET OF APPLICANTS WRITTEN SUBMISSION DATED 22-02-2010 WERE FORWARDED TO THE ASSESSING OFFICER ON THE SAME DATE ASKING FOR HIS COMMENTS ON THE SUBMISSIONS MADE BY THE APPELLANT. THE ASSESSING OFFICER SUBMITTED HIS PARA-WISE COMMENTS VIDE HIS LETTER DATED 17-3-2010. DURING THE COURSE OF AP PELLATE PROCEEDINGS THE ADDITIONAL COMMISSIONER, RANGE KATN I ALSO APPEARED ALONG WITH THE ASSESSING OFFICER AND THE ASSESSEE WAS DIRECTED TO APPEAR BEFORE THEM SO AS T O GET SUCH CREDIT ENTRIES VERIFIED AT RANDOM. IT WAS MADE CLEAR TO BOTH THE OFFICERS THAT AS CLAIMED BY THE ASSESSEE, ON EXAMINATION OF BOOKS OF ACCOUNTS IT WAS FOUND THAT IN MOST OF THE CASES THE AMOUNTS WERE RECEIVED THROUGH ACCO UNT PAYEE CHEQUES AND WERE REMITTED ALSO THROUGH ACCOUN T PAYEE CHEQUES AND THUS AT LEAST THE SOURCE OF THE F UNDS WAS WELL VERIFIABLE TO THAT EXTENT AND HENCE, COULD NOT BE TAXED U/S 68. THE ADDL. CIT WAS ALSO ADVISED AS TO HOW TO PROCEED AHEAD WITH TEST CHECK OF THOUSANDS OF ENTRI ES IN UNIFORM MANNER SO THAT THE RANDOM CHECKING REPRESEN TED THE TRUE AND CORRECT AFFAIR OF THE ENTIRE TRANSACTI ON. THE ADDITIONAL COMMISSIONER OF INCOME TAX, THEREFORE, P ICKED UP CERTAIN CREDIT ENTRIES TOTALLING TO RS.2,12,24,5 20/- SO AS TO VERIFY THE SOURCES AND THE GENUINENESS OF THE TRANSACTION. SUBSEQUENTLY A LETTER DATED 30-03-2010 WAS WRITTEN TO THE ITO WARD, KATNI WHEREBY HE WAS PROVI DED 6 WITH THE DETAILS OF CREDIT ENTRIES APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE TOTALING TO RS.2,12,24,520 /- AND HE WAS ASKED TO VERIFY THE CORRECTNESS OF THE FACTS , THE SOURCE OF THE FUNDS AND THE GENUINENESS OF THE TRAN SACTION AND REPORT TO THIS OFFICE ACCORDINGLY. THE ASSESSIN G OFFICE VIDE HIS LETTER DATED 5-4-2010 WROTE A LETTER TO TH E ITO SATNA REQUESTING HIS ASSISTANCE REGARDING VERIFICAT ION OF CREDIT ENTRIES IN THE CASE OF SHANKERLAL & SONS, BI HARI CHOWK, SATNA. FINALLY VIDE LETTER DATED 8-4-2010/8 5 THE ASSESSING OFFICER SUBMITTED THE REPORT WHICH WAS RE CEIVED IN THIS OFFICE ON 9-4-2010. AGAIN VIDE HIS LETTER D ATED 19-4- 2010/253 THE ITO, KATNI SUBMITTED HIS REPORT IN THE CASE OF HEMANT CLOTH STORES PROP. JAIKUMAR RAJRISHI, KATNI AND THEN AGAIN THE ITO WARD SATNA VIDE HIS LETTER DATED 30-04- 2010 RECEIVED IN THIS OFFICE ON 3 RD MAY,2010 SUBMITTED HIS REPORT. SINCE THERE WAS SOME MISTAKES WHILE PROVIDI NG INFORMATION THE APPELLANT WHILE SUBMITTING HIS REJO INDER DATED 6-5-2010 POINTED OUT MISTAKES OF RS.65,383/- REGARDING WHICH AGAIN LETTER WAS WRITTEN TO THE ITO , KATNI VIDE LETTER DATED 6-5-2010 AND THE ITO VIDE HIS REP ORT DATED 19-5-2010/627 FURTHER SUBMITTED HIS REPORT. ACCORDING TO ALL THESE REPORTS THE CREDIT ENTRIES A PPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT WERE FOUND P ROPERLY TALLIED WITH THE BOOKS OF ACCOUNTS OF THOSE VARIOUS PERSONS FROM WHOM THE FUNDS WERE RECEIVED BY THE APPELLANT FOR PREPARATION OF OUTSTATION CHEQUES. THIS MEANS THE SOURCE OF CREDIT ENTRIES TO THE EXTENT OF RS.2,12,24,520/- STOOD WELL EXPLAINED AND, THEREFORE, COULD NOT BE TAXED U/S 68 . NOW THE ASSESSMENT ORDER OF THE ASSESSING OFFICER MAKES IT CLEAR THAT THE AMOUNT OF RS.4,37,33,824/- WAS BROUGHT TO TAX WITHOUT ANY BASIS OR WITHOUT HAVING REGARD TO ANY SOUND PRINCIPLE OF THE ACCOUNTANCY. THE ASS ESSING OFFICER HAD NOT ASSIGNED ANY REASON AS TO ON WHAT B ASIS 7 HE PICKED UP SHRI VENKATESH TRADING CO., FOR COMPAR ISON WITH THE ASSESSEES CASE AND DETERMINED THE AMOUNT OF CHEQUE IN TRANSIT. AS A MATTER OF FACT, IT WAS ONL Y THE PEAK CREDIT OF THE YEAR WHICH COULD BE BROUGHT TO TAX. HOWEVER, WHILE DOING SO THE CREDIT FOR THE CAPITAL OF THE AP PELLANT AND THE KNOWN SOURCES OF FUNDS WHICH STOOD WELL EXPLAIN ED HAD TO BE GIVEN SO AS TO TAX ONLY THE UNACCOUNTED I NCOME. NEW HERE IN THE APPELLANTS CASE ALMOST 99% OF THE ENTRIES ARE IN RESPECT OF RECEIPT OF AMOUNTS AGAIN BY CHEQU ES AND, THEREFORE, THE SOURCE WERE WELL VERIFIABLE. ON RAN DOM CHECKING, AS REPORTED BY THE ASSESSING OFFICER, ALL THE ENTRIES WERE FOUND WELL VERIFIABLE AND, HENCE, SOUR CES STOOD EXPLAINED. FURTHER, IN THE INSTANT CASE ONLY IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2006-200 7 THE ASSESSEES CASE WAS PICKED UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED AFTER DETAILED ENQUIRY AND INVESTIGATION IN EVERY RESPECT. ACCORDINGLY AGAINS T THE RETURNED INCOME OF RS.4,49,800/- THE TOTAL INCOME DETERMINED BY THE ASSESSING OFFICER WAS RS.4,81,791 /- ALL THE ADDITIONS WERE MADE IN ROUTINE COURSE BY DISALL OWING DIFFERENT EXPENSES AND NO SUCH ADDITION WAS MADE U/ S 68. THIS MEANS NOT ONLY THE MODUS OPERANDI OF THE APPEL LANT IN RUNNING OF HIS BUSINESS WAS ACCEPTED BY THE DEPARTM ENT, THE TRADE RESULTS WERE ALSO ACCEPTED. THIS ALSO MEA NT THAT THE BALANCE SHEET AS ON 31-3-2006 OF THE APPELLANT WAS ALSO ACCEPTED TO BE TRUE AND CORRECT. NOW ACCORDING TO THE BALANCE SHEET THE CAPITAL ACCOUNT WAS OF RS.8,54,15 9/-, SECURED LOANS FROM THE BANKS TO THE EXTENT OF RS.65,76,383/-, UNSECURED LOANS OF RS.9,00,000/- AN D SUNDRY CREDITORS OF RS. 3,94,40,771/-. THUS FUNDS TO THE EXTENT OF RS.4,77,71,315/- WAS VERY MUCH AVAILABLE WITH THE APPELLANT, THE SOURCES OF WHICH HAD ALREADY BEE N ACCEPTED BY THE DEPARTMENT AND, THEREFORE, CREDIT O F THE SAME WAS REQUIRED TO BE GIVEN. HOWEVER EVEN IF THE 8 AMOUNT OF RS.4,37,33,824/- IS CONSIDERED TO BE PEAK CREDIT DURING THE YEAR THE EXPLAINED FUND TO THE EXTENT OF RS.4,77,71,315/- WAS AVAILABLE WITH THE APPELLANT W HICH WAS MUCH MORE THAN THE SO CALLED PEAK CREDIT. PEAK CREDIT AT ANY GIVEN POINT OF TIME DURING THE YEAR COULD NE VER REACH AS HIGH AS RS. 4,77,71,315/- THEREFORE, THE PEAK CR EDIT ALSO STOOD EXPLAINED AND COULD NOT BE TAXED U/S 68. THIS ALSO MEANT THAT THE SOURCES OF 99% OF THE CREDIT EN TRIES APPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT STOOD WELL EXPLAINED AND COULD NOT BE REQUIRED TO BE TAXE D U/S 68. AS AGAINST THIS THE ASSESSING OFFICER HAS SIMP LY SURMISED THAT THE CHEQUE IN TRANSIT WERE IN RESPECT OF UNEXPLAINED CREDIT ENTRIES AND NEEDED TO BE TAXED U /S 68 OF THE I.T. ACT. AS A MATTER OF FACT HAD HE VERIFI ED THE BOOKS OF ACCOUNTS OF THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF THE RESULT WOULD HAVE BEEN THE SAME AS WERE FOUND NOW ON VERIFICATION AND THER EFORE, IT WOULD NOT HAVE RESULTED INTO ADDITION OF RS.4,37,33,824/-. ON SUBSEQUENT VERIFICATION OF BO OKS OF ACCOUNTS THE SOURCES OF CREDIT ENTRIES ARE FUND VER IFIABLE, ADDITION OF RS.4,37,33,824/-. ON SUBSEQUENT VERIFIC ATION OF BOOKS OF ACCOUNTS THE SOURCES OF CREDIT ENTRIES ARE FOUND VERIFIABLE, ADDITION OF RS.4,37,33,824/- WAS NOT CO RRECT AND IN ACCORDANCE WITH THE LAW. THE SAME IS THEREFORE, HEREBY DELETED. AS A RESULT, APPEAL IS ALLOWED. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER ALO NG WITH THE BASIS FOR ADDITION, CONCLUSION DRAWN IN THE IMPUGNE D ORDER, ASSERTION MADE BY THE LEARNED RESPECTIVE COUNSEL AN D THE MATERIAL 9 AVAILABLE ON RECORD, ARE KEPT IN JUXTAPOSITION AND ANALYSED, WE FIND THAT THE ASSESSEE WAS OPERATING ACCOUNTS WITH SEVER AL BANKS SUCH AS IDBI, UTI AND ICICI, ETC. THESE BANKS FACILITAT E MULTI-CITY CHEQUE BOOKS AND SUCH CHEQUES ARE PAYABLE AT ALL BR ANCHES AT PAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT CERTAIN EVIDENCE TO ASCERTAIN THE IDENTITY OF THE APPLICANT (SERVICE TAKERS) AS AVAILABLE IN THE CHEQUE APPLICATION SLIP. AS PER THE REVENUE , THE IDENTITY OF SEVERAL APPLICANTS WAS NOT VERIFIABLE. THE ASSESSI NG OFFICER MADE THE ADDITION U/S 68 OF THE ACT ON THE PLEA THAT THE GENUINENESS OF CASH CREDITS WAS NOT PROVED. THE THEORY OF PEAK AMO UNT WAS ALSO NOT CONSIDERED AS PLEADED BY THE ASSESSEE DURING TH E ASSESSMENT PROCEEDINGS. THERE ARE THREE CASES IN THIS GROUP I N WHICH THE ASSESSMENT ORDERS WERE FRAMED BY DIFFERENT ASSESSIN G OFFICERS LIKE IN THE CASE OF BHAGWANDAS MAHESHWARI, THE ASSESSMEN T WAS FRAMED BY THE ADDITIONAL COMMISSIONER, RANGE-II, IN THE CASE OF HEMANT SOMANI BY THE ACIT, CIRCLE AND IN DHRUV MAHE SHWARI BY THE ITO, KATNI. THE CRUX OF ARGUMENTS BEFORE THE A SSESSING OFFICER WAS THAT THE ORDER PASSED BY THE ADDITIONAL CIT, RA NGE-2, WAS COPIED BY THE OTHER OFFICERS, MEANING THEREBY THE A SSESSING OFFICER HAD NOT ACTED INDEPENDENTLY. IDENTICAL PLEA WAS RA ISED BEFORE THE 10 LEARNED CIT(A) AS IS OOZING OUT FROM PAGES 4 ONWARD S OF THE IMPUGNED ORDER. IN THE IMPUGNED ORDER IT HAS BEEN NOTED (PAGE 6) THAT EVEN BEFORE THE LEARNED ASSESSING OFFICER IT W AS PLEADED THAT IN E-APPLICATION HARDLY ANYONE GIVES THE COMPLETE ADDR ESS AND THE ASSESSING OFFICER HIMSELF SENT THE DEMAND NOTICE BY WRITING ADDRESS AS SHRI DHRUV KUMAR MAHESHWARI, CIVIL LINE, KATNI AND THE SAME WAS SERVED UPON THE ASSESSEE. THE CRUX OF THE SUBM ISSIONS WAS THAT KATNI IS A SMALL TOWN AND THE ADDRESSES GIVEN BY THE APPLICANTS ARE SUFFICIENT AS THE CREDITORS ARE PERM ANENT BUSINESSMEN OF TOWN WHO ARE REGULARLY ASSESSED TO I NCOME TAX. AT PAGE 7 OF THE IMPUGNED ORDER THERE IS AN OBSERVATIO N THAT THE ASSESSEE SPECIFICALLY DENIED THAT HE WAS ENGAGED IN PARA-BANKING. A STRONG PLEA WAS RAISED THAT NO SUM WAS FOUND CREDIT ED IN THE BOOKS OF THE ASSESSEE AND THE ASSESSING OFFICER EVEN NEVE R BOTHERED TO EXAMINE THE TREATMENT GIVEN BY THE ASSESSEE IN HIS BOOKS RATHER THE CHEQUES SO RECEIVED WERE ENTERED IN THE TRADING ACC OUNT WHICH FIND RECORDING IN THE TRADING ACCOUNT AND MERELY THE SER VICE CHARGES/COMMISSION WAS EARNED. THE SUM AND SUBSTANC E OF THE ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE LEA RNED ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT HAS WRONGLY OB SERVED THAT THE 11 ASSESSEE FAILED TO ESTABLISH THE IDENTITY OF THE CR EDITOR AND THE ASSESSEE WAS NEVER ASKED TO DO SO. IT WAS ALSO PLE ADED THAT THE ASSESSMENT WAS FRAMED AT THE INSTANCE OF HIGHER AUT HORITIES AND THE BUSINESS WAS VIRTUALLY CLOSED AS THERE WAS NO B ALANCE AT THE END OF THE YEAR. THUS, THE ASSESSING OFFICER WAS UN JUSTIFIED IN MAKING ESTIMATED ADDITION OF 10.06% OF THE CREDITS. SO FAR AS THE CONTENTION OF THE LEARNED COUNSEL FO R THE ASSESSEE THAT THE ASSESSMENTS IN ALL THE CASES WERE FRAMED AT THE DICTATES AND ADVICE OF THE SUPERIOR OFFICERS IS NOT BORNE OUT OF FACTS, THEREFORE, WE ARE NOT IN AGREEMENT WITH THIS SUBMIS SION OF THE ASSESSEE. OUR OBSERVATION IS FURTHER SUBSTANTIATED BY THE FACTS BEING THE FACTS ARE IDENTICAL, THEREFORE, THE ASSES SMENT SO FRAMED SEEMS TO BE IDENTICAL. IN THE IMPUGNED ORDER, IT HA S BEEN OBSERVED BY THE LEARNED CIT(A) THAT THE BOOKS OF ACCOUNTS AN D RELEVANT DOCUMENTS WERE EXAMINED BY THE ASSESSING OFFICER (P AGE 12) AND IN MOST OF THE CASES THE TRANSACTIONS WERE THROUGH ACC OUNT PAYEE CHEQUE ONLY AND EVEN PRIOR TO ISSUANCE OF OUTSTATIO N CHEQUES, THE EQUAL AMOUNT WAS RECEIVED BY THE ASSESSEE MOSTLY AN D THIS OBSERVATION WAS NEITHER CONTROVERTED BY THE REVENUE NOR BROUGHT 12 OUT ANY EVIDENCE ON RECORD THAT IN FACT CASH WAS DE POSITED, THUS, IT IS NOT A CASE OF SIMPLE CASH ENTRIES . THERE IS A FURTHER MENTION OF A LETTER DATED 22.2.2010/WRITTEN SUBMISSIONS WHICH WE RE FORWARDED TO THE ASSESSING OFFICER ASKING FOR COMMENTS ON THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSING OFFICER MADE PARAWIS E COMMENTS OF THE SAME VIDE LETTER DATED 13.3.2010. IT IS FURTHE R NOTED THAT THE ADDITIONAL CIT, RANGE ALSO APPEARED ALONG WITH THE ASSESSING OFFICER AND IT WAS FOUND THAT MOST OF THE ENTRIES W ERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND ALSO REMITTED THR OUGH ACCOUNT PAYEE CHEQUES, THUS THE SOURCE WAS VERIFIABLE. LIK EWISE, LETTER DATED 30.3.2010 WAS ALSO SENT TO THE ITO, KATNI WHE REBY HE WAS PROVIDED THE DETAILS OF CREDIT ENTRIES AND WAS FURT HER ASKED TO VERIFY THE CORRECTNESS OF FACTS. THE ASSESSING OFFICER TH ROUGH HIS LETTER DATED 5.4.2010 WROTE A LETTER TO ITO, SATNA, FOR AS SISTANCE AND VERIFICATION OF SUCH CREDIT ENTRIES. FINALLY, THE A SSESSING OFFICER VIDE LETTER DATED 8.4.2010 SUBMITTED A REPORT AGAIN VIDE LETTER DATED 19.4.2010/253, ITO, KATNI, SUBMITTED HIS REPORT AND AGAIN ITO, WARD SATNA, VIDE LETTER DATED 30.4.2007 SUBMITTED H IS REPORT. ALL THESE REPORTS WERE DULY EXAMINED BY THE LEARNED CIT (A) AND FINALLY REACHED TO THE AFORESAID CONCLUSION. THE CONCLUSIO N DRAWN IN THE 13 IMPUGNED ORDER WAS NOT CONTROVERTED BY THE REVENUE BY BRINGING ANY COGENT MATERIAL ON RECORD. AT PAGES 14 AND 15 OF THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS MENTIONED THE BALANCE SHEET AS ON 31.3.2006, CAPITAL ACCOUNT, SECURED LOANS FROM BANK S, UNSECURED LOANS, SUNDRY CREDITORS, CONCLUDING THAT FUNDS TO T HE EXTENT OF RS.4,77,71,315/- WERE VERY MUCH AVAILABLE WITH THE ASSESSEE AND THE SOURCE OF WHICH HAS BEEN ACCEPTED BY THE DEPART MENT. THE LEARNED CIT(A) HAS FURTHER CONSIDERED THE PEAK THEO RY CONCLUDING THAT PEAK CREDIT ALSO STOOD EXPLAINED. THE TOTALITY OF FACTS AND THE CONCLUSION DRAWN BY THE LEARNED CIT(A) IS INDICATIV E OF THE FACTUM THAT THE ADDITION MADE U/S 68 OF THE ACT WAS UNWARR ANTED AS THE SOURCE OF ALMOST 99% OF THE ENTRIES APPEARING IN TH E BOOKS OF THE ASSESSEE STOOD EXPLAINED. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LEARNED CI T(A). IN CONCLUDING PARA IT HAS BEEN SPECIFICALLY MENTIONED THAT ON SUBSEQUENT VERIFICATION OF BOOKS OF ACCOUNTS, THE S OURCE OF CREDIT ENTRIES WAS FOUND VERIFIABLE. THIS OBSERVATION WAS ALSO NOT CONTROVERTED BY THE REVENUE WITH THE HELP OF ANY PO SITIVE MATERIAL. IN VIEW OF THESE FACTS, WE HAVE NO OPTION BUT TO AF FIRM THE ACTION OF THE LEARNED CIT(A). 14 4. NOW WE SHALL TAKE UP THE CROSS OBJECTION RAISED BY THE ASSESSEE. IT IS BROADLY IN SUPPORT OF THE CONCLUSIO N DRAWN IN THE IMPUGNED ORDER. SINCE WE HAVE UPHELD THE CONCLUSION DRAWN IN THE IMPUGNED ORDER, THEREFORE, THIS CROSS OBJECTION OF THE ASSESSEE HAS REMAINED FOR ACADEMIC INTEREST ONLY, THEREFORE, IT IS DISMISSED AS INFRUCTUOUS, MORE SPECIFICALLY WHEN THE CONCLUSION DRAWN IN THE IMPUGNED ORDER IS BASED UPON THE SUBMISSIONS OF THE ASSESSEE AND THE REPLY FILED BY THE ASSESSING OFFICER . FINALLY, THE APPEAL OF THE REVENUE AND THE CROSS O BJECTION OF THE ASSESSEE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28.1 0 .2013. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 28.10.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS!