ACIT CC-45, MUMBAI V. ANIL M. GUPTA, MUMBAI

ITA 9215/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3369 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY MEHTAGOVIND JHAVERI
• Assessee Lawyers: SANJAY SINGH
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business expenditure; Income from undisclosed sources; Search and seizure; Salary income; Loose papers; Document seized; Peak credit; Additional evidence; Valuation report; Deemed dividend; Accommodation entries; Tax effect; Retraction; Documents seized
• Section: 143(3); 153A; 234B; 14A; 32; 131; 68; 69; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER. ITA NO.638/MUM/2011,( A.Y. 2005-06) ITA NO. 664/MUM/2011(A.Y.2006-07) SHRI ANIL MAHAVIR GUPTA, 203, GIRIRAJ, IRON MARKET, S.T.ROAD, MUMBAI 400009 PAN: ADKPG 6798 ... APPELLA NT VS. THE ACIT, CEN. CIR.45, MUMBAI .... RESPONDENT ITA NO.9215/MUM/2010,( A.Y. 2002-03) ITA NO.9216/MUM/2010,( A.Y. 2003-04) ITA NO.9225/MUM/2010,( A.Y. 2004-05) ITA NO.9226/MUM/2010,( A.Y. 2005-06) ITA NO.9227/MUM/2010,( A.Y. 2006-07) THE ACIT/DCIT, CEN. CIR.45, MUMBAI ... APPELLANT VS. SHRI ANIL MAHAVIR GUPTA, 203, GIRIRAJ, IRON MARKET, S.T.ROAD, MUMBAI 400009 PAN: ADKPG 6798 ..... RESPONDENT C.O.NO.179 TO 182/MUM/2012 (ARISING OUT OF ITA NO.9215,9216,9225&9226/MUM/2010 , A.YS. 2002-03 TO 2005-06) ASSESSEE BY : S/SHRI VIJAY MEHTA/GOVIND JHAVERI RESPONDENT BY : SHRI SANJAY SINGH DATE OF HEARING : 22/07/2016 DATE OF PRONOUNCEMENT : 31/08/2016 2 SHRI ANIL MAHAVIR GUPTA ORDER PER G.S.PANNU, A.M: THE CAPTIONED ARE NINE 11 APPEALS PERTAINING TO THE SAME ASSESSEE IN RELATION TO THE ASSESSMENT YEARS2002-03 TO 2006-07 AND INVOLVE CERTAIN COMMON ISSUES. ACCORDINGLY, ALL TH E APPEALS HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORD ER IS BEING PASSED FOR SAKE OF CONVENIENCE AND BREVITY. 2. BEFORE PROCEEDING TO ADJUDICATE THE ISSUES RAISE D IN THE RESPECTIVE APPEALS, A BRIEF BACKGROUND IS AS FOLLOW S. THE ASSESSEE BEFORE US IS AN INDIVIDUAL, WHO IS DIRECTOR OF A CO NCERN, VIZ. M/S. S.K.S.ISPAT LTD. APART FROM DERIVING SALARY INCOME FROM THE SAID CONCERN, ASSESSEE IS CARRYING ON PROPRIETARY BUSINE SS OF TRADING IN VARIOUS STEEL PRODUCTS UNDER THE NAME AND STYLE OF M/S. GUPTA STEEL CORPORATION. A SEARCH ACTION UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WAS CARRIED OUT BY THE DEPARTMENT IN THE PREMISES OF THE AFORESAID COMPANY AND ALSO AT THE R ESIDENTIAL PREMISES OF THE DIRECTORS, INCLUDING THE ASSESSEE ON 10/11/2 006. AS A CONSEQUENCE, PROCEEDINGS UNDER SECTION 153A OF THE ACT WERE INITIATED BY THE ASSESSING OFFICER FOR SEVEN ASSESSMENT YEARS STARTING FROM ASSESSMENT YEAR 2001-02 TO 2007-08 AND IN RESPONSE, ASSESSEE FILED RETURNS FOR EACH OF THE SAID ASSESSMENT YEARS. IN SO FAR AS THE ASSESSMENT YEARS 2002-03 TO 2005-06 ARE CONCERNED, THE RETURNS SO FILED HAVE BEEN SUBJECT TO SCRUTINY ASSESSMENTS, WH ICH WERE COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT DATED 18/12/2008, AND FOR ASSESSMENT YEAR 2006-07, ASSESSMENT HAS BEEN COMPLE TED UNDER SECTION 143(3) OF THE ACT. IN THE ASSESSMENTS SO F INALIZED, THE ASSESSING 3 SHRI ANIL MAHAVIR GUPTA OFFICER MADE VARIOUS ADDITIONS WHICH WERE CARRIED IN APPEAL BEFORE THE CIT(A), WHO HAS ALLOWED SUBSTANTIAL RELIEF. AGAINS T THE RELIEFS ALLOWED BY THE CIT(A), REVENUE IS IN APPEAL FOR THE CAPTION ED ASSESSMENT YEARS OF 2002-03 TO 2006-07. THE ASSESSEE HAS FILED C ROSS- OBJECTIONS FOR ASSESSMENT YEARS 2002-03 TO 2005-06, AND CROSS-APPE ALS FOR ASSESSMENT YEAR 2005-06 AND 2006-07, WHEREBY THE A DDITIONS SUSTAINED BY THE CIT(A) HAVE BEEN CHALLENGED AND/O R THE ADDITION DELETED BY THE CIT(A) HAVE BEEN SUPPORTED. IN THIS BACKGROUND, WE PROCEED TO CONSIDER THE RESPECTIVE APPEALS FOR EACH OF THE ASSESSMENT YEARS. 3. WE MAY FIRST TAKE UP THE APPEAL OF THE REVENUE F OR ASSESSMENT YEAR 2002-03, WHICH IS AGAINST AN ORDER PASSED BY CIT(A)-36, MUMBAI DATED 15/10/2010, WHICH IN TURN ARISES OUT OF AN O RDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 18/12/2008. 4. IN THIS APPEAL, THE FOLLOWING TWO GROUNDS HAVE B EEN RAISED:- '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE} AND IN LAW} THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITI ON MADE BY THE ASSESSING OFFICER BY ESTIMATING THE HOUSEHOLD EXPEN SES OF THE ASSESSEE AT RS.4.48LAKHS WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT FURNISHED DETAILS OF HIS HOUSEHOLD EXPENSES AND CONTRIBUTION, IF ANY, BY OTHER FAMILY MEMBERS FOR SCRUTINY PARTIC ULARLY WHEN THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE V ERY MEAGER.' '2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE}, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITI ON OF RS.378,059/ - MADE U/ S 2(22)(E) OF THE ACT BY HOLDING THAT THE T RANSACTION WERE NOT BY WAY OF LOAN OR BORROWING AND WERE FOR SUPPLY OF GOODS AND REPAID IN KIND WITHOUT APPRECIATING THAT THE ASSESS EE HAD NOT ADDUCED ANY EVIDENCE BEFORE THE ASSESSING OFFICER I N THIS REGARD AND HENCE, THE CIT(A) ERRED IN ACCEPTING THE ADDITI ONAL EVIDENCE IN CONTRAVENTION OF THE RULE 46A OF I. T RULES, 1962. 4 SHRI ANIL MAHAVIR GUPTA THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) O N THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 5. AT THE TIME OF HEARING, LD. REPRESENTATIVE FOR T HE ASSESSEE POINTED OUT THAT THE TAX EFFECT IN THE GROUNDS RAIS ED BY THE REVENUE IS BELOW THE LIMITS PRESCRIBED BY THE CBDT FOR FILING OF APPEALS BEFORE THE TRIBUNAL. IN THIS CONTEXT, LD. DEPARTMENTAL REPRES ENTATIVE APPEARING FOR THE REVENUE HAS NOT BROUGHT OUT ANYTHING TO THE CONTRARY. 6. AS A CONSEQUENCE, THE APPEAL OF THE REVENUE IN ITA NO.9215/MUM/2010 FOR ASSESSMENT YEAR 2002-03 IS DIS MISSED AS NOT-MAINTAINABLE. THUS, THE RELEVANT CROSS-OBJECTIO N PREFERRED BY THE ASSESSEE FOR ASSESSMENT YEAR 2002-03, WHICH IS MERE LY IN SUPPORT OF THE ORDER OF CIT(A), IS RENDERED INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. 7. NOW, WE MAY TAKE UP THE APPEAL OF THE REVENUE PE RTAINING TO ASSESSMENT YEAR 2003-04 IN ITA NO.9216/MUM/2010 AND CROSS OBJECTION OF THE ASSESSEE VIDE C.O.NO.180/MUM/2012 , 7.1 IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 69,28,100/ - MADE UNDER SECTION 68 OF THE ACT, AS UNEXPLAINED CA SH CREDIT, CLAIMED TO BE ADVANCES RECEIVED FROM CUSTOMERS, BY HOLDING THAT THERE WAS NO MATERIAL TO DOUBT ASSESSEE'S EXPLANATI ON, THOUGH THE ASSESSEE HAD NEITHER FURNISHED CONFIRMATIONS WITH P AN DETAILS ETC., NOR PRODUCED THE PARTY FOR VERIFICATION TO ESTABLIS H THEIR IDENTITY AND CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TION AND THUS THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST UPON HIM UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. 5 SHRI ANIL MAHAVIR GUPTA 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE; AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION M ADE BY 'THE ASSESSING OFFICER BY ESTIMATING THE HOUSEHOLD EXPEN SES OF THE ASSESSEE AT RS. 6 LAKHS WITHOUT APPRECIATING THAT T HE ASSESSEE HAD NOT FURNISHED DETAILS OF HIS HOUSEHOLD EXPENSES AND CONTRIBUTION, IF ANY, BY OTHER FAMILY MEMBERS FOR SCRUTINY PARTICULA RLY WHEN THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE VER Y MEAGER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION O F RS.14,26,974/ - MADE U/S 2(22)(E) OF THE ACT BY HOLDING THAT THE TR ANSACTION WERE NOT BY WAY OF LOAN OR BORROWING AND WERE FOR SUPPLY OF GOODS AND REPAID IN KIND WITHOUT APPRECIATING THAT THE ASSESS EE HAD NOT ADDUCED ANY EVIDENCE BEFORE THE ASSESSING OFFICER I N THIS REGARD AND HENCE, THE CIT(A) ERRED IN ACCEPTING THE ADDITI ONAL EVIDENCE IN CONTRAVENTION OF THE RULE 46A OF L T RULES, 1962' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) O N THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/ OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 7.2 IN THE MEMO OF CROSS-OBJECTION, ASSESSEE HAS RA ISED THE FOLLOWING GROUND:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE I.T. ACT, 1961 IS BAD IN LAW AS THE ASSESSMENT WAS NOT PENDING AT THE TIME OF SEARCH AND THERE IS NO N EXUS BETWEEN FOLLOWING ADDITIONS MADE AND ANY INFORMATION & MATERIAL FOUND DURING THE SEARCH. S.NO. PARTICULARS AMOUNT (RS.) 1. ADDITION ON ACCOUNT OF ADVANCE FROM CUSTOMERS 69,28,100 2. AD-HOC ADDITION OF HOUSEHOLD EXPENSES 6,00, 000 3. ADDITION ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION. 2(22)(E). 14,26,974/- 2. THE CROSS-OBJECTOR CARVES LEAVE TO ADD TO, AMEND , ALTER OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF CROSS-OBJECTION. 7.3 SUBSEQUENTLY, ANOTHER GROUND HAS ALSO BEEN RAI SED,WHICH READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E ADDITIONS MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF T HE I.T. ACT, 1961 IS BAD IN LAW AS THE ASSESSMENT WAS NOT PENDING AT THE TIM E OF SEARCH AND THERE IS NO NEXUS BETWEEN FOLLOWING ADDITIONS MADE AND ANY I NFORMATION & MATERIAL FOUND DURING THE SEARCH. 6 SHRI ANIL MAHAVIR GUPTA S.NO. PARTICULARS AMOUNT (RS.) 1. ADDITION ON ACCOUNT OF ADVANCE FROM CUSTOMERS 69,28,100 2. AD-HOC ADDITION OF HOUSEHOLD EXPENSES 6,00, 000 3. ADDITION ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION. 2(22)(E). 14,26,974/- 2. THE CROSS-OBJECTOR CARVES LEAVE TO ADD TO, AMEND , ALTER OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF CROSS-OBJECTION. 7.4 AT THE TIME OF HEARING THE LD. REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT THE CROSS OBJECTION INVOLVES A POINT OF LAW AND, THE SECOND GROUND IN THE CROSS-OBJECTION HAS BEEN RAI SED AS MATTER OF ABUNDANT CAUTION BECAUSE EVEN OTHERWISE, THE SAME P OINT IS SUBSUMED IN THE GROUND OF CROSS OBJECTION RAISED ORIGINALLY. THE POINT SOUGHT TO BE MADE OUT BY THE ASSESSEE IS THAT THE ADDITIONS I N QUESTION ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND IN THE CO URSE OF THE SEARCH; AND, SINCE THE ORIGINAL ASSESSMENT FOR THE YEAR UN DER CONSIDERATION DOES NOT ABATE IN TERMS OF THE SECOND PROVISO TO S ECTION 153A(1) OF THE ACT, THEREFORE, FOLLOWING THE JUDGMENT OF THE HON' BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSI NG CORPORATION (NHAVA SHEVA) LTD, 374 ITR 645 (BOM), SUCH ADDITION S ARE BEYOND THE SCOPE AND AMBIT OF THE JURISDICTION CONFERRED ON T HE ASSESSING OFFICER UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. 7.5 THE AFORESAID CONTROVERSY IN OUR VIEW, GOES TO THE ROOT OF THE MATTER, THEREFORE, IT IS BEING ADDRESSED AT THE THR ESHOLD. IN ORDER TO APPRECIATE THE SAME, FOLLOWING DISCUSSION IS RELEVA NT. AS NOTED EARLIER, ASSESSEE AND OTHER ENTITIES IN ITS GROUP WERE SUBJE CT TO SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT ON 1 0/11/2006. IN PURSUANCE TO SUCH ACTION, A NOTICE UNDER SECTION 15 3A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 5/10/2007 CALLING FOR A R ETURN OF INCOME FOR ASSESSMENT YEAR 2003-04, IN RESPONSE TO WHICH, ASSE SSEE FILED A RETURN 7 SHRI ANIL MAHAVIR GUPTA OF INCOME DECLARING AN INCOME OF RS.30,48,790/-, WH ICH WAS THE SAME AS THE INCOME ORIGINALLY DECLARED IN THE RETURN O F INCOME FILED UNDER SECTION 139(1) OF THE ACT ON 2/12/2003 FOR ASSESSM ENT YEAR 2003-04. THE RETURN OF INCOME SO FILED BY THE ASSESSEE HAS BEEN SUBJECT TO SCRUTINY ASSESSMENT UNDER SECTION. 143(3) R.W.S. 15 3(A) DATED 18/12/2008, WHEREBY THE TOTAL INCOME HAS BEEN ASSES SED AT RS.1,20,03,860/- BY MAKING FOLLOWING THREE ADDITION S, I.E. (I) ADVANCES RECEIVED FROM CUSTOMERS CONSIDERED UNEXPLAINED UNDE R SECTION 68 OF THE ACT - RS.69,28,100/-; (II) AMOUNT RECEIVED FRO M M/S. S.K.S. ISPAT PVT. LTD., CONSIDERED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT - RS.14,26,974/-; AND, (III) ESTIMATED ADDITION ON LOW HOUSEHOLD WITHDRAWALS RS.6.00 LACS. NOTABLY, THE CIT(A) HA S DELETED ALL THE ADDITIONS SO MADE BY THE ASSESSING OFFICER, WHICH I S BEING CHALLENGED IN APPEAL BY THE REVENUE AS PER ABOVE STATED GROUNDS O F APPEAL. BE THAT AS IT MAY, PLEA RAISED BY THE ASSESSEE IN THE CRO SS-OBJECTION IS TO THE EFFECT THAT SUCH ADDITIONS ARE NOT BASED ON ANY MA TERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE AND CONSIDERING THAT THE ORIGINAL ASSESSMENT DOES NOT A BATE IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT, THE SAID ADDITIONS ARE BEYOND JURISDICTION IN TERMS OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA). 7.6 AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT WITH RESPECT TO THE ADDITIONS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THERE WAS NO INCRIMINATI NG MATERIAL FOUND AT THE TIME OF SEARCH AND THAT SUCH ADDITIONS HAVE BEEN MADE AS A RESULT OF THE VERIFICATION EXERCISE CARRIED OUT IN THE COURSE OF 8 SHRI ANIL MAHAVIR GUPTA ASSESSMENT PROCEEDINGS ITSELF. IT IS ALSO POINTED OUT THAT IN THE CONTEXT OF THE ORIGINAL RETURN OF INCOME FILED UNDER SECTIO N 139(1) OF THE ACT ON 02/12/2003, NO NOTICE UNDER SECTION 143(2) OF THE A CT WAS ISSUED WITHIN THE PRESCRIBED PERIOD AND, THEREFORE, SUCH A SSESSMENT PROCEEDINGS STOOD COMPLETE AND THAT IN ANY CASE ON THE DATE OF SEARCH I.E. ON 10/11/2006, THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR OF 2003-04 WAS NOT PENDING. THE SAID FACTUAL MATRI X HAS BEEN CANVASSED BY THE ASSESSEE TO SAY THAT ASSESSMENT FO R THE YEAR UNDER CONSIDERATION DOES NOT ABATE IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. AS A CONSEQUENCE, IT IS CANVAS SED THAT THE IMPUGNED ADDITIONS MADE BY THE ASSESSING OFFICER CO ULD NOT HAVE BEEN MADE IN THE IMPUGNED ASSESSMENT PROCEEDINGS AS THE Y ARE NOT BASED ON ANY MATERIAL SEIZED OR FOUND DURING THE COURSE O F SEARCH AT THE PREMISES OF THE ASSESSEE. 7.7 ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTAT IVE HAS POINTED OUT THAT THE PROPOSITION BEING CANVASSED BY THE ASS ESSEE WOULD NOT APPLY IN A SITUATION WHERE AN ORIGINAL ASSESSMENT H AS NOT BEEN FINALIZED UNDER SECTION 143(3) OF THE ACT, AND IN THE PRESENT CASE ORIGINAL ASSESSMENT HAS BEEN MADE UNDER SECTION 143(1) OF TH E ACT. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE THE PROVISIONS OF SECTION 153A EMPOWER THE ASSESSING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSE SSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH A SEARCH WAS CONDUCTED AND, THEREFORE, UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER WAS DUTY BOUND TO ASSESS OR REASSESS TOTAL INCOME OF SUCH ASSESSMENT YEARS, AND, THEREFORE, THE IMPUGNED ADDITIONS WERE JUSTI FIABLY MADE IN THE ASSESSMENT MADE UNDER SECTION 143(3) R.W.S. 153A(1) OF THE ACT. 9 SHRI ANIL MAHAVIR GUPTA 7.8 AS THE AFORESAID DISCUSSION SHOWS, THE PERTIN ENT POINT RAISED BY THE ASSESSEE BEFORE US IS THAT THE IMPUGNED ADDITIO NS HAVE BEEN MADE IN THE ABSENCE OF THE REQUISITE JURISDICTION. IN O RDER TO APPRECIATE THE CONTROVERSY, IT IS PERTINENT TO OBSERVE THAT SECTIO N 153A OF THE ACT POSTULATES THE ASSESSMENT IN CASES OF SEARCH OR REQ UISITION UNDER SECTION 132 OR UNDER SECTION 132A OF THE ACT RESPEC TIVELY. THE SAID SECTION ENVISAGES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH WAS CONDUCTED. THE SECOND PROVISO TO SECTION 153A(1) O F THE ACT ALSO PRESCRIBES THAT ASSESSMENT OR RE-ASSESSMENT, IF AN Y, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX YE ARS REFERRED TO IN SUB- SECTION(1) OF SECTION 153A OF THE ACT, WHICH IS PEN DING ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITION AS TH E CASE MAY BE, SHALL ABATE. IN OTHER WORDS, IN SO FAR AS THE PENDING AS SESSMENTS ARE CONCERNED, THE COMPETENCE OF THE ASSESSING OFFICER TO MAKE THE ORIGINAL ASSESSMENT CONVERGES WITH THE ASSESSMENT T O BE MADE UNDER SECTION 153A OF THE ACT, I.E. ONLY ONE ASSESSMENT S HALL BE MADE FOR SUCH ASSESSMENT YEARS BASED ON THE FINDINGS OF THE SEARC H AS WELL AS ANY OTHER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE ASSESSING OFFICER. NOTABLY, THERE WOULD ASSESSMENTS IN THE PERIOD OF T HE SIX ASSESSMENT YEARS IDENTIFIED IN SECTION 153A(1) OF THE ACT, WHI CH WOULD HAVE BECOME FINAL( I.E. WHICH ARE NOT PENDING ON THE DAT E OF SEARCH); SUCH ASSESSMENTS DO NOT ABATE IN THE TERMS OF THE SECOND PROVISO TO SEC. 153A(1) OF THE ACT. THE CONTROVERSY BEFORE US IS W ITH RESPECT TO THE SCOPE AND AMBIT OF SUCH AN ASSESSMENT BECAUSE IN TH E PRESENT CASE THE ASSESSMENT AS ON THE DATE OF SEARCH STOOD COMPLETED INASMUCH AS THE 10 SHRI ANIL MAHAVIR GUPTA DATE FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT HAD LAPSED IN RELATION TO THE RETURN ORIGINALLY FILED BY THE ASSE SSEE UNDER SECTION 139(1) OF THE ACT ON 02/12/2003. 7.9 IN THIS CONTEXT, THE JUDGMENT OF THE HON'BLE BO MBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) IS RELEVANT, WHEREBY THE DECISION OF T HE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGIS TICS LTD. & ORS. VS. DCIT,137 ITD 287(MUM) HAS BEEN UPHELD. A PERTINEN T POINT ADDRESSED BY THE HONBLE HIGH COURT WAS AS TO WHETHER THE SCO PE OF ASSESSMENT UNDER SECTION 153A OF THE ACT ENVISAGES ADDITIONS, WHICH ARE OTHERWISE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF SEARCH. AS PER HONBLE HIGH COURT, NO ADDITION COU LD BE MADE IN RESPECT OF THE ASSESSMENT THAT HAD BECOME FINAL IN THE EVENT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE HONBLE HIGH COURT ALSO NOTICED ITS EARLIER JUDGMEN T IN THE CASE OF MURALI AGRO-PRODUCTS LTD.(SUPRA) AND ELABORATELY CU LLED OUT THE SCOPE AND AMBIT OF THE ASSESSMENT AND REASSESSMENT OF TOT AL INCOME UNDER SECTION 153A(1) OF THE ACT READ WITH THE PROVISO TH EREOF. THE HONBLE HIGH COURT HAS RULED THAT AN UNABATED ASSESSMENT UN DER SECTION 153A(1) OF THE ACT WOULD NOT ENCOMPASS AN ADDITION FOR WHICH NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH, BECAUSE IN SUCH A CASE, THE ORIGINAL ASSESSMENT HAD BECOME FI NAL. 7.10 IN THIS CONTEXT, IT IS ALSO NOTABLE THAT THE H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA IN ITA 707/2014 DATED 28/08/2015 HAS ALSO CONSIDERED A SIMILAR DISPUTE AND HAS SUM MARIZED THE ENTIRE LEGAL POSITION AS FOLLOWS:- 11 SHRI ANIL MAHAVIR GUPTA SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR S IX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN W HICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TO TAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ON E ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH TH E DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATIO N AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHO UT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASS ESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEA RCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT 12 SHRI ANIL MAHAVIR GUPTA ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. 7.11 IN THE ABOVE BACKGROUND, NOW WE MAY EXAMINE TH E MANNER IN WHICH THE IMPUGNED ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER. THE FIRST ADDITION IS ON ACCOUNT OF RS.69 ,28,100/- REPRESENTING ADVANCES RECEIVED FROM CUSTOMERS, WHICH HAVE BEEN H ELD BY THE ASSESSING OFFICER TO BE UNEXPLAINED CREDITS WITHI N THE MEANING OF SECTION 68 OF THE ACT. THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER REVEALS THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE PARTIES AND, THEREFORE, THE ASSESSING OFFICER H AS PROCEEDED TO TREAT THE SAME AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT. WITH RESPECT TO THE ADDITION IN RESPECT OF DEEMED DIVIDE ND UNDER SECTION 2(22)(E) OF THE ACT OF RS.14,26,974/-, THE RELEVANT DISCUSSION IN PARA 9 OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFF ICER HAS JUSTIFIED THE ADDITION ON THE BASIS OF HIS EXAMINATION OF THE BA LANCE SHEET OF M/S. S.K.S ISPAT LTD., FROM WHOM SUCH AMOUNT IS SAID TO HAVE BEEN RECEIVED. THE THIRD ADDITION IS ON ACCOUNT OF LOW HOUSEHOLD W ITHDRAWALS AND SUCH ADDITION IS BASED ON THE PERCEPTION OF THE ASSESSIN G OFFICER THAT THE DECLARED WITHDRAWALS FOR HOUSEHOLD EXPENSES ARE LOW AND OUGHT TO HAVE BEEN HIGHER. BE THAT AS IT MAY, THERE IS NO DI SCUSSION IN THE ASSESSMENT ORDER, WHICH WOULD SUGGEST THAT ANY INCR IMINATING MATERIAL WAS FOUND IN THE COURSE OF SEARCH RELATABLE TO SUCH ADDITIONS. THEREFORE, FACTUALLY SPEAKING, WE DO NOT FIND THAT THE ADDITIONS IN QUESTION ARE BASED ON ANY INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE. THEREFORE, IN THIS BACKGROUND, WE UPHOLD THE PLEA THE PLEA OF THE ASS ESSEE THAT SUCH ADDITIONS ARE BEYOND THE SCOPE AND AMBIT OF AN ASSE SSMENT ORDER UNDER SECTION 143(3) R.W.S. 153(A)(1) BECAUSE IN R ESPECT OF ASSESSMENT 13 SHRI ANIL MAHAVIR GUPTA YEAR 2003-04, THE ORIGINAL ASSESSMENT HAD BECOME FI NAL AND IT HAS NOT ABATED, HAVING REGARD TO THE SECOND PROVISO TO SEC TION 153A(1) OF THE ACT. 7.12 BEFORE PARTING, WE MAY REFER TO THE ARGUMENT S ET UP BY THE LD. DEPARTMENTAL REPRESENTATIVE TO THE EFFECT THAT THE AFORESAID PROPOSITION OF LAW LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAV A SHEVA) LTD. (SUPRA) IS NOT APPLICABLE IN THE INSTANT CASE, BE CAUSE, IN THIS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (1) OF THE ACT ITSELF AND NOT AS A SCRUTINY ASSESSMENT UNDER SECTI ON 143(3) OF THE ACT. IN THIS CONTEXT, LD. REPRESENTATIVE FOR THE ASSESSE E HAD RELIED UPON THE DECISION OF OUR CO-ORDINATE BENCH IN THE CASE OF GO VIND AGARWAL IN ITA NO.3389&3390/MUM/2011 DATED 10/01/2004, WHEREIN UND ER IDENTICAL CIRCUMSTANCES THE ADDITION MADE IN ASSESSMENT UNDER SECTION 153A OF THE ACT WITHOUT SUPPORT OF THE INCRIMINATING MATERI AL WAS HELD UNSUSTAINABLE EVEN WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF THE ACT. THE RELEVANT DISCUSSION IN THE CASE OF GOVIND AGARWAL (SUPRA) IS AS UNDER:- DECISION OF THE TRIBUNAL : 9. WE HAVE HEARD BOTH THE PARTIES ON THE LEGAL ISSU E RELATING TO THE SUSTAINABILITY OR VALIDITY OF THE ADDITIONS MADE IN THE ASSESSMENTS MADE U/S 153A READ WITH SECTION 143(3) OF THE ACT IN RESPECT OF COMPLETED ASSESSMENTS. 10. THE STAND OF THE REVENUE IS THAT THE FIRST PROV ISO TO SECTION 153A EMPOWERS THE AO TO ISSUE NOTICE U/S 153A OF THE ACT IN RESPECT OF THE 6 AYS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TO OK PLACE. THE RELEVANCE OF THE EXISTENCE OF INCRIMINATING MATERIAL IS NOT PROV IDED IN THE SAID PROVISIONS. AS PER THE REVENUE THERE SHOULD NOT BE ANY DIFFEREN CE QUA THE COMPLETED ASSESSMENTS AND THE ABATED ASSESSMENTS FOR ALL SIX AYS IN SO FAR AS THE POWERS OF THE AO IS CONCERNED AND HE IS EMPOWERED T O ISSUE NOTICE U/S 153A AND MAKE ADDITIONS EITHER BASED IN THE INCRIMINATIN G MATERIAL OR OTHERWISE. 14 SHRI ANIL MAHAVIR GUPTA 11. PER CONTRA, THE CASE OF THE ASSESSEE IS THAT TH E AO MAY BE EMPOWERED TO ISSUE NOTICES FOR ALL THE SIX AYS IN VIEW OF THE CI TED DECISIONS IE JAI STEEL (INDIA) LTD (SUPRA), SCOPE (P) LTD (SUPRA) ETC. HOWEVER, IN CASE OF COMPLETED ASSESSMENTS, AO IS EMPOWERED TO MADE ADDITIONS ONLY BASED ON THE INCRIMINATING MATERIALS AND NOT OTHERWISE JAI STEEL (INDIA) LTD (SUPRA), LMJ INTERNATIONAL LTD (SUPRA), GURINDER SINGH BAWA (SUP RA) ETC. FOR MAKING THE ROUTINE ADDITIONS, WHICH ARE NORMALLY DONE IN THE R EGULAR ASSESSMENTS, THE COMPLETED ASSESSMENT NEED NOT BE DISTURBED BY INVOK ING THE PROVISIONS OF SECTION 153A OF THE ACT IF NOT FOR REITERATING THE RETURNED OR ASSESSED INCOME AS THE CASE MAY BE. JUDGMENT IN THE CASE OF JAI STE EL (INDIA) LTD (SUPRA) SUPPORTS THE ABOVE LEGAL PROPOSITION. AS PER THE AS SESSEE, REGARDING THE CASES OF ABATED ASSESSMENTS, CONSIDERING THE SCHEME OF ASSESSMENTS U/S 153A, PER CONTRA, EVEN THE ROUTINE ADDITIONS ARE DO NE IN THESE ASSESSMENTS. 12. WE HAVE HEARD THE PARTIES AND THEIR DIVERGENT S TANDS ON THE LEGAL ISSUE AND THE VALIDITY OF THE INSTANT ASSESSMENT/REASSESS MENT WITH THE ROUTINE ADDITIONS U/S 68 AND SECTION 14A OF THE ACT BASED O N THE ACCOUNTED TRANSACTIONS. THE INSTANT CASE FOR THE AY 2002-03 D EALS WITH THE CASE OF DISTURBING THE COMPLETED ASSESSMENT. EARLIER THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. COMPLETENESS OF TH E SUMMARY ASSESSMENT IS CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE VI DE MANY JUDGMENTS CITED ABOVE. IN THE ASSESSMENT U/S 153A, THE AO MADE (I) ADDITION U/S 68 ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUS E DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,070/-; AND ( II) DISALLOWANCE U/S 14A: RS. 23,31,469/-. ADMITTEDLY, THERE IS NO INCRIMINAT ING MATERIAL BEFORE THE AO TO SUPPORT THE ABOVE ADDITIONS. THE VALUATION REPOR T, WHICH IS GARNERED BY THE AUTHORITIES CONSTITUTES MERE ESTIMATES AND THE PROVISIONS OF SECTION 132 IS NOT REQUIRED TO OBTAIN SUCH REPORT FROM THE DVO. AS SUCH, FOR MAKING AFORESAID ADDITIONS OF RS 31,33,070/-, AO HAS NOT U SED EVEN THE SAID VALUATION REPORT AND THE AO DISALLOWED WHAT IS REPO RTED IN THE BOOKS. SIMILAR IS THE CASE WITH THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, UNDISPUTEDLY, THE IMPUGNED QUANTUM ADDITIONS ARE MADE MERELY BASED ON THE ENTRIES IN THE ACCOUNTED BOOKS AND CERTAINLY NOT BASED ON EITHER T HE UNACCOUNTED BOOKS OF ACCOUNTS OF THE ASSESSEE OR BOOKS NOT PRODUCED TO T HE AO EARLIER OR THE INCRIMINATING MATERIAL GATHERED BY THE INVESTIGATIO N WING OF THE REVENUE. CONSIDERING THE LEGAL PROPOSITIONS PLACE BEFORE US BY THE ASSESSEES COUNSEL, WE ARE OF THE OPINION, SUCH ASSESSMENTS OR ADDITION S ARE UNSUSTAINABLE IN LAW. 13. FOR THE SAKE COMPLETENESS OF THE ASSESSEE, WE I NSERT HERE SOME OF THE EXTRACTS FROM RELEVANT JUDGMENTS AND THEY ARE: A. [2013 36 TAXMANN.COM 523 (RAJASTHAN) IN THE CASE OF JAI STEEL (INDIA) VS. ACIT - FROM HELD PORTION: .THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UND ER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 1 32 OR 132A, 15 SHRI ANIL MAHAVIR GUPTA INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF RE ASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE, WHICH WOULD R EQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE AB ATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESS ED. FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A, IT IS APPARENT THAT: (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND S ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A, THE ASS ESSING OFFICER ACTS UNDER HIS ORIGINAL JURISDICTION, FOR W HICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCO ME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. ..THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSING OFFICER IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UND ER SECTION 153A IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID P ROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH A ND/OR REQUISITION. PARA 26 OF THE JUDGMENT: THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT O R REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PR OVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE W ORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOU LD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS B EEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SE ARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPOR T THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. B. [2012] 28 TAXMANN.COM 328 (MUMBAI TRIB.) IN THE CASE OF GURINDER SINGH BAVA VS. DCIT . WHETHER SINCE ASSESSMENT UNDER SECTION 153A WAS PASSED BY ASSESSING OFFICER ON BASIS OF MATERIAL AVAILABLE IN RETURN OF INCOME 16 SHRI ANIL MAHAVIR GUPTA AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MAT ERIAL FOUND DURING SEARCH AND SINCE NO ASSESSMENT WAS ABATED, A SSESSMENT UNDER SECTION 153A WAS TO BE QUASHED BEING MADE WIT HOUT JURISDICTION AVAILABLE UNDER SECTION 153A - HELD, Y ES [PARA 6.2] [IN FAVOUR OF ASSESSEE] PARA 6.1 OF THE ORDER: THE SPECIAL BENCH IN THE CAS E OF ALCARGO GLOBAL LOGISTICS LTD. (SUPRA), HAS HELD THAT PROVISIONS OF SECTION 153A COME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIA TED AFTER 31.5.2003 AND ON SATISFACTION OF THIS CONDITION, THE AO IS UN DER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JUR ISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSE SSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSMENT UNDER SECTION 153A C AN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CO NTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMEN TS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCL OSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSME NT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PENDI NG IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEM ENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMI NATING MATERIAL FOUND DURING SEARCH. B. ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMIS SIONER OF INCOME- TAX, CENTRAL CIRCLE-44 [2012] 23 TAXMANN.COM 103 (M UM.) (SB) PARA 58 OF SB DECISIONS: THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UNDER: (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF REL EVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUN D IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL A SSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH. 17 SHRI ANIL MAHAVIR GUPTA 14. THUS, IN CASE OF THE COMPLETED ASSESSMENTS EITH ER U/S 143(1) OR 143(3), THE ABOVE EXTRACTS ARE UNIFORM IN ADVOCATING AGAINS T MAKING ADDITIONS IN ROUTINE MANNER IN THE ASSESSMENTS MADE U/S 153A OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL GATHERED IN THE SEARCH AC TION. STATUTORY NOTICE U/S 153A OF THE ACT CAN ALSO BE ISSUED TO REITERATE THE RETURNED INCOME OR FOR MAKING ADDITIONS BASED ON THE INCRIMINATING MATERIA L OR UNPRODUCED BOOKS OF ACCOUNT. OTHERWISE, ADDITIONS MADE IN ROUTINE MA TTER AS IN THE PRESENT APPEAL ARE NOT SUSTAINABLE. FURTHER, FOR THE SAKE C OMPLETENESS OF THE ORDER, WE HAVE PERUSED THE ORDERS/JUDGMENTS RELIED UPON BY LD DR FOR THE REVENUE AND FOUND THEY ARE DISTINGUISHABLE ON FACTS FOR ONE REASON OR OTHER. TO START WITH, WE HAVE PERUSED THE JUDGMENT OF HONBLE HONBL E DELHI HIGH COURT IN THE CASE OF MADUGULA VENU (SUPRA) AND FIND THAT, TH OUGH EXPLAINED THE PROVISIONS IN PLAIN LANGUAGE, IT DOES NOT DEALT WIT H THE RELEVANCE OR FACTUM OF INCRIMINATING MATERIAL. FURTHER, THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA (SUPRA) IS NOT ON THE NOTICES ISSUED U/S 153A OF THE ACT AND THE SAME IS PRONOUNCED IN T HE CONTEXT OF THE NOTICE U/S 153C OF THE ACT. FURTHER, ALSO, THE COORDINATE BENCH DECISION IN THE CASE OF SCOPE (P) LTD (SUPRA) HAS GRANTED RELIEF TO THE ASSESSEE THOUGH THE NOTICE ISSUED U/S 153A OF THE ACT WAS UPHELD. HOWEVER, THI S ORDER HAS NOT CONSIDERED THE THEN EXISTING DECISION OF THE COORDI NATE BENCH DECISION IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) WHICH IS RE LEVANT FOR THE PROPOSITION THAT THE COMPLETED ASSESSMENT MAY NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SPECIFIC TO THE ASSESSEE. IN FACT, ALL THESE JUDGMENTS TAKE SPIRIT FROM THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA), WHICH IS RELEVANT FOR THE PR OPOSITION THAT THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF IN CRIMINATING MATERIAL SUCH AS BOOKS OF ACCOUNTS, OTHER DOCUMENTS FOUND IN THE SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND U NDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF THE SEARCH. 15. WE ALSO FIND THAT THE CIT(A) MADE A REFERENCE TO THE INCRIMINATING MATERIAL, WHICH YIELDED DISCLOSURE OF SOME UNDISCLO SED INCOME. BUT, ON PERUSAL OF THE DOCUMENTS, WE FIND THAT THE CIT(A) E NTERED INTO AN ERROR ZONE AND THE DISCLOSURE IS ONLY RS 5 CRORES IN THIS CASE AND THE SAME RELATES TO THE LANDS DEALS. IN PRINCIPLE THIS DISCLOSURE HAS NOTHI NG DO WITH THE IMPUGNED ADDITIONS U/S 68 OR 14A OF THE ACT. IN THE INSTANT CASE, SPECIFIC TO THE ASSESSEE, NO INCRIMINATING MATERIAL WITH THE DETAIL S WAS REFERRED EITHER IN THE ASSESSMENT ORDER OR IN THE ORDER OF THE CIT (A) FOR MAKING THE IMPUGNED ADDITIONS. AS PER THE CITED JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, THE ASSESSMENT U/S 153A IS ONLY FOR REITERATION RATHER THAN MAKING ANY ADDITIONS IN A ROUTINE MANNER WITHOUT THE STRENGTH OF THE INC RIMINATING MATERIALS. SIMILAR VIEW WAS TAKEN UP BY THE ITAT, DELHI H BE NCH, IN THE CASE OF V.K. FISCAL SERVICES P LTD VS. DCIT VIDE ITA NOS.5460 TO 5465/DEL/2012 (WWW.ITATONLINE.ORG). IN THIS REGARD, PARA 13 FROM THE SAID ORDER OF THE ITAT DELHI BENCH (SUPRA) IS RELEVANT AND THE SAME READS AS UNDER: 18 SHRI ANIL MAHAVIR GUPTA 13. APPLYING THE ABOVE CASE LAWS TO THE FACTS OF T HE CASE, WE HAVE TO NECESSARILY QUASH THE ASSESSMENT PROCEEDINGS FOR AY 2004-2005, 2005-06, 2007-08, 2008-09 ON THE FOLLOWING GROUNDS. (A) NO BOOKS OF ACCOUNTS BELONGING TO THE ASSESSE W ERE FOUND AND SEIZED IN THE PREMISES OF THE OTHER PERSON. WHAT WA S FOUND WAS IN THE HARD DISK WAS ONLY A CONFIRMATION OF ACCOUNT TH AT AN ATTACHED ANNEXURES. SUCH DOCUMENTS CANNOT BE SAID TO BE BOOK S OF ACCOUNTS OR DOCUMENTS BELONGING TO THE ASSESSEE. (B) THE REVENUE HAS NOT PRODUCED THE RECORD OF THE SEARCHED PERSON TO DEMONSTRATE THAT SATISFACTION WAS RECORDED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S. GLOBAL R EALITY VENTURES P. LTD. ON THE DATE OF RECORDING OF SATISFACTION, FIRS T NOTICE U/S 153(C) WAS ISSUED. THERE IS NO INDICATION WHATSOEVER, THAT THE ASSESSMENT PROCEEDINGS IN THE CASE OF GLOBAL REALITY VENTURES P. LTD WERE IN PROGRESS OR NOT, AT THE POINT OF TIME AND THAT THE AO DURING THE COURSE OF THAT PROCEEDINGS RECORDED THIS SATISFACTI ON. THE PROCEDURE CONTEMPLATED UNDER THE ACT WAS NOT FOLLOWED. (C) THE SATISFACTION IS RECORDED ON 23 RD JULY, 20 10. THE RELEVANT AY WOULD BE 2011-12. THE SIX PRECEDING AYS RELEVANT TO THIS AY WOULD BE 2005- 14 06 / 2006-07 / 2007-08 / 2008-09 / 2010-11 . THUS, THE NOTICE ISSUED U/S 153C FOR THE AY 2004-05 IS CLEA RLY BARRED BY LIMITATION. (D) EVEN OTHERWISE, AS THERE IS NO INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH, THE AO SHOULD HAVE DRO PPED THE PROCEEDINGS INITIATED U/S 153C OF THE ACT. (E) AS THERE IS NO DISPUTE THAT NO ASSESSMENT OR REASSESSMENT HAS ABATED IN TH IS CASE FOR THE REASON, THAT THE DATE OF SEARCH, THE DATE OF SEARCH WHICH IN THE CASE ON HAND WOULD BE 25.3.2010, BY VIRTUE OF FIRST PROV ISO TO SECTION 153C, I.E., THE DATE OF PASSING AN ORDER U/S 127 TRANSFERRING THE CASES OF THE ASSESSEE TO THE PRESENT ASSESSING OFFI CER NO ASSESSMENT OR REASSESSMENT WAS PENDING. WHEN NO ASSESSMENT HAS ABATED, THE QUESTION OF MAKING ANY ADDITION OR MAKING DISALLOWA NCE WHICH ARE NOT BASED ON ONLY MATERIAL FOUND DURING THE SEARCH IS BAD IN LAW. 16. IN THESE CIRCUMSTANCES, WE HAVE NO DOUBT ABOUT THE ABSENCE OF ANY SEIZED MATERIAL WHICH ARE INCRIMINATING IN NATURE T O BACK THE ADDITIONS U/S 68 OR 14A O THE ACT MADE IN THE ASSESSMENT MADE U/S 153A OF THE ACT FOR THE AY UNDER CONSIDERATION. REGARDING THE DVOS REPORT GATHERED DURING THE SEARCH ACTION, WE FIND THAT THE REPORT SUFFERS FROM CERTAIN DEFICIENCIES QUA COST OF CONSTRUCTION OF RESIDENTIAL PROPERTY AND TH E LAND OBTAINED THERETO. THE SAID REPORT CONSTITUTES AN OPINION OF THE THIRD PARTY WHICH CANNOT BE USED BY THE AO FOR MAKING ADDITIONS AND SUCH ADDITI ONS, IF ANY, CANNOT BE SUSTAINED LEGALLY. AS SUCH, WE FIND THAT THE AO HAS NOT USED THE SAID REPORT OF THE DVO ALSO FOR MAKING ADDITIONS OF RS. 31,33,007/ -, THE DIFFERENCE BETWEEN ACCOUNTED AMOUNT OF RS. 46,13,007/-, CLAIMED AS THE AMOUNT SPENT ON CONSTRUCTION OF HOUSE AND ACQUISITION OF LAND AS ON 31.3.2002 MINUS RS. RS. 14.8 LAKHS, THE INVESTMENT MADE ON THE LAND PLOTS. AO MADE ADDITION FOR ASSESSEES FAILURE TO PROVIDE EVIDENCES / BILLS IN SUPPORT OF THE CLAIM OF 19 SHRI ANIL MAHAVIR GUPTA EXPENDITURE ON THE CONSTRUCTION. IT THE PRESUMPTION OF THE AO THAT THE PLOTS SINCE ACQUIRED ONLY BY JULY 2001, THE ASSESSEE WOUL D NOT HAVE SPEND RS. 31,33,007/- BY 31.3.2002. THIS IS MERELY A PRESUMPT ION RATHER CONCLUSION BASED ON ANY EVIDENCES. SUCH ADDITIONS ARE UNSUSTAI NABLE IN LAW IN THE ASSESSMENTS MADE U/S 153A R.W.S 143(3) OF THE ACT. 17. RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF J AI STEEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONED THAT T HE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION ( 153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INA SMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQU ISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED 15 ASSESSMENTS DOE S NOT ARISE, WHICH WOULD MORE REITERATION.. THUS, THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISION S OF THE TRIBUNAL ARE CATEGORICAL IN CONCLUDING THAT, IN CASE OF THE CONC LUDED ASSESSMENTS LIKE THE PRESENT ONE, THE ADDITIONS ARE MADE ONLY BASED ON T HE INCRIMINATING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE F ACTS OF THE JAI STEEL LTD (SUPRA) ARE IDENTICAL TO THE PRESENT ONE IE AO MADE ADDITIONS BY REASSESSING U/S 153A ON THE COMPLETED ASSESSMENT U/S 143(1) OF THE ACT. THUS, CONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STE EL LTD (SUPRA), THE ARGUMENTS ON THE LEGAL ISSUE RAISED BEFORE US STAND S COVERED. THEREFORE, CONSIDERING THE RAJASTHAN HIGH COURTS JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE I SSUE OF NOTICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE I MPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INC RIMINATING MATERIALS. IN THE ABSENCE OF INCRIMINATING MATERIAL, THE ROLE OF THE AO IS ONLY TO REITERATE THE RETURNED INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE R AISED IN THE GROUNDS FOR BOTH THE APPEALS OF THE ASSESSEE (ITA NO 3389&3390/ M/2011) IS ALLOWED. 7.13 QUITE CLEARLY, THE TRIBUNAL IN THE CASE OF SHR I GOVIND AGARWAL (SUPRA) HAS UPHELD THAT MAKING OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT, WITHOUT THE BACKING OF INC RIMINATING MATERIAL, IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASSESSMENT ON THE DATE OF SEARCH STOOD COMPLETED UNDER SECTION 143(1) OF THE ACT, THEREBY RESULTING IN NON-ABATEMENT OF SUCH ASSESSME NT IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. NOT ABLY, THE TRIBUNAL HAS REFERRED TO VARIOUS DECISIONS, INCLUDING THE JUDGME NT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (IND IA) (SUPRA). THEREFORE, 20 SHRI ANIL MAHAVIR GUPTA THE PLEA OF THE LD. DEPARTMENTAL REPRESENTATIVE IS REJECTED IN VIEW OF THE AFORESAID PRECEDENT. 7.14 IN CONCLUSION, BY FOLLOWING THE RATIO OF THE J UDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTA L WAREHOUSING CORPORATION (NHAVA-SHEVA) LTD. (SUPRA) AND THAT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA(SUPRA), WE HOLD THAT THE IMPUGNED ADDITIONS COULD NOT HAVE BEEN MADE IN THE ASSESSMENT FINALIZED UNDER SECTION 143(3) R.W.S. 153A(1) OF TH E ACT CONSIDERING THE ABSENCE OF ANY INCRIMINATING MATERIAL HAVING BEEN F OUND IN THE COURSE OF SEARCH QUA THE IMPUGNED ADDITIONS AND THE ORIGIN AL ASSESSMENT NOT HAVING ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A(1) OF THE ACT. AS A CONSEQUENCE, THE GROUND RAISED BY THE ASSESSEE IN ITS CROSS- OBJECTION IS ALLOWED. 7.15 RESULTANTLY, THE ULTIMATE DECISION OF THE CIT( A) IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF (I) ADVANCES RECEIVED FROM CUSTOMERS CONSIDERED UNEXPLAINED UNDE R SECTION 68 OF THE ACT - RS.69,28,100/-; (II) AMOUNT RECEIVED FRO M M/S. S.K.S. ISPAT PVT. LTD., CONSIDERED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT - RS.14,26,974/-; AND, (III) ESTIMATED ADDITION ON LOW HOUSEHOLD WITHDRAWALS RS.6.00 LACS IS HEREBY AFFIRMED, ALBE IT ON A DIFFERENT GROUND. 7.16 AS A CONSEQUENCE, WHEREAS THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED, THE APPEAL OF THE REVENUE IS DISMISSED. 8. NOW WE MAY TAKE UP THE APPEAL OF THE REVENUE IN ITA NO. 9225/MUM/2010 FOR ASSESSMENT YEAR 2004-05, WHICH IS DIRECTED 21 SHRI ANIL MAHAVIR GUPTA AGAINST AN ORDER PASSED BY CIT(A)-36, MUMBAI DATED 15/10/2010, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) DATED 18/12/2008. 9. IN THIS APPEAL, REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.3, 07,63,572/- BY DISALLOWING 25% OF THE ENTIRE. EXPENSES OF THE PROPRIETARY BUSI NESS WITHOUT APPRECIATING THAT THE ASSESSEE NEITHER PRODUCED THE PARTIES TO W HOM FREIGHT EXPENSES WERE PAID NOR FILED THE DETAILS OF SUCH EXPENSES FO R VERIFICATION AND MORE PARTICULARLY WHEN THE CONFIRMATIONS FROM THE PARTIE S WERE ALSO NOT FILED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CLT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.13 ,20, 00,143/ - MADE ON ACCOUNT OF DISALLOWANCE OF COMMISSION AND BROKERAGE BY HOLDING THAT THE DISALLOWANCE WAS BASED ON INSUFFICIENT GROUNDS WITH OUT APPRECIATING THAT THE ASSESSEE NEITHER PRODUCED THE PARTIES NOR FILED THE DETAILS OF SUCH COMMISSION AND BROKERAGE FOR VERIFICATION AND ALSO THAT THE CONFIRMATIONS FROM THE PARTIES WERE NOT FILED BY THE ASSESSEE AND THUS GENUINENESS OF THE EXPENDITURE CLAIMED AS BUSINESS EXPENDITURE WAS NOT PROVED. '3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY ESTIMATING THE HOUSEHOLD EXPENSES OF THE ASSESSEE A T RS.6LAKHS WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT FURNISHED DE TAILS OF HIS HOUSEHOLD EXPENSES AND CONTRIBUTION, IF ANY, BY OTHER FAMILY MEMBERS FOR SCRUTINY PARTICULARLY WHEN THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE VERY MEAGER.' 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2, 50,89,124/- MADE U/S 2(22)(E) OF THE ACT BY HOLDING THAT THE TRANSACTION WERE NOT BY WAY OF LOAN OR BORROWING AND WERE FOR SUPPLY OF GOODS AND REPAID I N KIND WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT ADDUCED ANY EVIDENCE BEFORE THE ASSESSING OFFICER IN THIS REGARD AND HENCE, THE CIT (A) ERRED IN ACCEPTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF THE RULE 46 A OF I T RULES, 1962' 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 3 5,44,18,832/ - MADE U/S 68 OF THE ACT BY HOLDING THAT THAT THE ADDITION MADE O N A/C OF THE PROGRESSIVE PEAK BALANCE RELATING TO UNEXPLAINED SUNDRY CREDITO RS WAS NOT SUSTAINABLE 22 SHRI ANIL MAHAVIR GUPTA IGNORING HIS OWN CONCLUSION THAT THE ASSESSEE WAS N OT REPORTING TRUE AND CORRECT STATE OF AFFAIRS PARTICULARLY WHEN ASSESSEE HAD NO DELIVERY DETAILS, LORRY RECEIPTS AND THE ALLEGED CREDITORS HAD ADMITT ED THAT THE TRANSACTION WERE ONLY ON PAPER.' 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 3 5,44,18,832/- MADE U/S 68 OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE D ID NOT PRODUCE BOOKS OF ACCOUNTS, BILLS, VOUCHERS BEFORE THE A.D. FOR EXAMI NATION AND PARTICULARLY WHEN THE ALLEGED CREDITORS HAD IN THEIR ORIGINAL ST ATEMENT RECORDED U/S. 131 HAD DENIED THE TRANSACTION OF ANY SALE OF GOODS TO THE ASSESSEE AND ALSO SOME OF THEM HAVE DECLARED COMMISSION INCOME ONLY O N THE AMOUNT OF ACCOMMODATION ENTRIES OF PURCHASE / SALE'. 9.1 THE ASSESSEE HAS FILED CROSS-OBJECTION RAISING A GROUND, WHICH IS IDENTICAL TO THAT CONSIDERED BY US IN THE ASSESSMEN T YEAR 2003-04 IN THE EARLIER PARAS. SINCE THE ISSUE RAISED IN THE CROSS -OBJECTION GOES TO ROOT OF THE MATTER, IT IS BEING TAKEN-UP AT THE THRESHOL D. 9.2 IN ASSESSMENT YEAR 2004-05, THE RELEVANT FACTS ARE THAT IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT, ASSESSEE FILED A RETURN OF INCOME ON 14/02/2008 DECLARING TO TAL INCOME AT RS.97,04,433/-, WHICH WAS THE SAME AT WHICH THE RET URN OF INCOME WAS ORIGINALLY FILED UNDER SECTION 139(1) OF THE ACT ON 1/11/2004. IN THE ENSURING ASSESSMENT FINALIZED UNDER SECTION 143(3) R.W.S. 153A(1) OF THE ACT, THE ASSESSING OFFICER HAS DETERMINED THE TOTAL INCOME AT RS.55,25,76,104/-, AFTER MAKING THE FOLLOWING ADDIT IONS, (I) DISALLOWANCE OUT OF TOTAL EXPENSES DEBITED IN THE P&L ACCOUNT ON ADHOC BASIS RS.3,07,63,572/-; (II) COMMISSION AND BROKERAGE ON ACCOUNT OF NON- PRODUCTION OF PARTIES RS.13,30,00,143/-; (III) DE EMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT ON ACCOUNT OF RECEIPT OF MONEY FROM M/S. SKS ISPAT LTD. OF RS.2,50,89,124/-; (IV) LOW HOUSEH OLD WITHDRAWALS RS.6.00 LACS; AND, (V) SUNDRY CREDITORS BALANCES C ONSIDERED AS 23 SHRI ANIL MAHAVIR GUPTA UNEXPLAINED UNDER SECTION 68 OF THE ACT RS.35,44, 18,832/-. NOTABLY, WHEN ASSESSEE CARRIED THESE ADDITIONS BEFORE THE CI T(A), THE SAME HAVE BEEN DELETED BY THE CIT(A) FOR THE REASONS ASSIGNED IN THE ORDER. 9.3 IN THE CONTEXT OF THE PROPOSITION LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHO USING CORPORATION (NHAVA-SHEVA), WHICH HAS BEEN ADVERTED TO AT LENGTH BY US IN THE EARLIER PARAS IN THE APPEAL FOR THE ASSESSMENT YEAR 2003-04 , IN THE PRESENT YEAR TOO, WE HAVE PERUSED THE MANNER IN WHICH THE A DDITIONS HAVE BEEN MADE IN THE ASSESSMENT ORDER. QUITE CLEARLY, THE ENTIRE DISCUSSION IN THE ASSESSMENT ORDER DOES NOT REFER TO ANY MATER IAL FOUND DURING THE COURSE OF SEARCH, LEAVE ALONE ANY INCRIMINATING MAT ERIAL, IN ORDER TO SUPPORT THE IMPUGNED ADDITIONS. THEREFORE, IT IS Q UITE CLEAR THAT THE ADDITIONS ARE NOT BASED ON ANY SEIZED MATERIAL FOUN D DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE AND, THER EFORE, FOLLOWING OUR DISCUSSION IN THE EARLIER PARAS FOR ASSESSMENT YEAR 2003-04(SUPRA), HEREIN ALSO SUCH ADDITIONS ARE HELD TO BE BEYOND T HE SCOPE AND AMBIT CONTEMPLATED UNDER SECTION 153A R.W.S. 143(3) OF TH E ACT. THE FACTS AND CIRCUMSTANCES IN THE INSTANT YEAR ARE IDENTICAL TO THOSE CONSIDERED BY US IN ASSESSMENT YEAR 2003-04, EXCEPT TO THE EXT ENT OF THE HEADS OF ADDITIONS AND THE AMOUNT OF ADDITIONS BEING DIFFERE NT. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, OUR DECISION IN THE GRO UND IN THE CROSS- OBJECTION OF THE ASSESSEE FOR ASSESSMENT YEAR 2003- 04(SUPRA) APPLIES MUTATIS MUTANDIS IN THIS YEAR TOO. AS A CONSEQUENCE, WE HEREBY AF FIRM THE ULTIMATE CONCLUSION OF THE CIT(A) IN DELETING T HE AFORESAID FIVE ADDITIONS, ALBEIT ON A DIFFERENT GROUND. 24 SHRI ANIL MAHAVIR GUPTA 9.4 AS A CONSEQUENCE, WHEREAS THE CROSS OBJECTION O F THE ASSESSEE IS ALLOWED, THE APPEAL OF THE REVENUE IS DISMISSED. 10. NOW WE MAY TAKE UP THE ASSESSMENT YEAR 2005 -06, WHEREIN REVENUE AND ASSESSEE HAVE FILED CROSS-APPEALS, AND ASSESSEE HAS ALSO FILED A CROSS-OBJECTION. THE APPEAL OF THE REVENUE IN ITA NO.9226/MUM/2010, IS DIRECTED AGAINST AN ORDER PAS SED BY CIT(A)-36, MUMBAI DATED 15/10/2010, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S . 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 18 /12/2008. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1, 89,39,320/ - MADE ON ACCOUNT OF DISALLOWANCE OF COMMISSION BY HOLDING TH AT THE DISALLOWANCE WAS BASED ON INSUFFICIENT GROUNDS WITHOUT APPRECIATING THAT THE ASSESSEE DID NOT FILE THE DETAILS OF SUCH COMMISSION, NEITHER PRODUC ED THE PARTIES NOR FURNISHED THE CONFIRMATIONS FROM THE PARTIES FOR VE RIFICATION AND THUS GENUINENESS OF THE EXPENDITURE CLAIMED AS BUSINESS EXPENDITURE WAS NOT PROVED .' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY ESTIMATING THE HOUSEHOLD EXPENSES OF THE ASSESSEE A T RS.6 LAKHS WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT FURNISHED DE TAILS OF HIS HOUSEHOLD EXPENSES AND CONTRIBUTION, IF ANY, BY OTHER FAMILY MEMBERS FOR SCRUTINY PARTICULARLY WHEN THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE VERY MEAGER. ' 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 7 6,50,46,685/ - MADE U/S 68 OF THE ACT BY HOLDING THAT THAT THE ADDITION MADE O N A/C OF THE PROGRESSIVE PEAK BALANCE RELATING TO UNEXPLAINED SUNDRY CREDITO RS WAS NOT CORRECT AND CONVINCING, IGNORING HIS OWN CONCLUSION THAT THE AS SESSEE WAS NOT REPORTING TRUE AND CORRECT STATE OF AFFAIRS PARTICULARLY WHEN ASSESSEE HAD NO DELIVERY DETAILS, LORRY RECEIPTS AND THE ALLEGED CREDITORS H AD ADMITTED THAT THE TRANSACTION WERE ONLY ON PAPER.' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.76 ,50,46,685/- MADE U/S 68 OF 25 SHRI ANIL MAHAVIR GUPTA THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE DID NOT PRODUCE BOOKS OF A/CS, BILLS, VOUCHERS BEFORE THE A.O. FOR EXAMINATION AND PARTICULARLY WHEN THE PARTIES IN THEIR ORIGINAL STATEMENT RECORDED U/S 1 31 HAD DENIED THE TRANSACTION OF ANY SALE OF GOODS TO THE ASSESSEE AN D ALSO SOME OF THEM HAVE DECLARED COMMISSION INCOME ONLY ON THE AMOUNT OF AC COMMODATION ENTRIES OF PURCHASE/SALE '. 5. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2, 14,45,387/- MADE U/S 68 OF THE ACT, AS UNEXPLAINED CASH CREDIT, CLAIMED TO BE ADVANCE RECEIVED FROM CUSTOMERS, BY HOLDING THAT THE ADDITION WAS UNCALLE D FOR, WITHOUT APPRECIATING THAT ASSESSEE HAD NEITHER FURNISHED TH E CONFIRMATIONS WITH PAN DETAILS ETC., NOR PRODUCED THE PARTIES FOR VERIFICA TION TO ESTABLISH THEIR IDENTITY AND CREDITWORTHINESS AND THE GENUINENESS O F THE TRANSACTION AND THUS THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST UPON HIM UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. 6 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE U/S 69B OF THE ACT OF AMOUNT OF RS.5,05,39,000/-, BY TREATING THE DIFFERENCE BET WEEN THE COST PAID BY OTHERS AND THE COST TO THE ASSESSEE IN RESPECT OF T HE SHARES OF SKS ISPAT LTD, WHERE IN ASSESSEE IS A DIRECTOR, BY IGNORING THAT T HE SHARES OF SKS ISPAT LTD OF FACE VALUE OF RS. 10, WHICH WERE SHOWN AS PURCHASED AT HIGHLY SUPPRESSED VALUE OF RS.2/ - PER SHARE BY THE ASSESSEE WHEREAS IN THE YEAR UNDER CONSIDERATION AND ALSO IN SUBSEQUENT YEAR THEY WERE SOLD @ RS. 100/ - PER SHARE TO OTHERS.' 7. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE U/S 69B OF THE ACT OF AMOUNT OF RS.5,05,39,000/-, BY TREATING THE DIFFERENCE BE TWEEN THE COST PAID BY OTHERS AND THE COST TO THE ASSESSEE IN RESPECT OF T HE SHARES OF SKS ISPAT LTD, WHERE IN ASSESSEE IS A DIRECTOR, BY IGNORING THAT T HE A. O. HAD SUFFICIENT MATERIAL ON RECORD TO DRAW REASONABLE INFERENCE AS WAS HELD BY THE HON'BLE RAJASTHAN H. C. IN AMAR KUMARI V/S. CIT226 ITR 344. 8. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE) AND IN LAW) THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE U/ S 69B OF THE ACT OF AMOUNT OF RS.5,05,39,000/-, IGNORING THAT THE BROKER IN TH E TRANSACTION OF SALE/PURCHASE OF THE SHARES WAS NOT PRODUCED FOR VE RIFICATION I EXAMINATION THOUGH WAS SPECIFICALLY ASKED BY THE A. 0. 9. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE OF RS. 30,00,000/- AS UNACCOUNTED RECEIPTS BY HOLDING THAT THE AMOUNT DOE S NOT REPRESENT RECEIPT OF THE ASSESSEE IGNORING THAT THE ADDITION WAS MADE ON THE BASIS OF PAPERS SEIZED FROM ASSESSEE'S TRUSTED EMPLOYEE WHO HAD DEP OSED THAT THE SAME WERE GIVEN TO HIM BY THE ASSESSEE. 26 SHRI ANIL MAHAVIR GUPTA 10. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE OF RS.30,00, 000/- AS UNACCOUNTED RECEIPTS BY HOLDING THAT PROVISIONS OF SEC 68) 69 ETC. DO NOT APPLY WITHOUT APPRECIATING THAT THE ADDITION WAS MA DE ON THE BASIS OF PAPERS SEIZED FROM ASSESSEE'S TRUSTED EMPLOYEE AND THERE WAS SUFFICIENT MATERIAL TO INFER THAT THE NOTINGS IN THE SEIZED PA PER PERTAINED TO THE ASSESSEE. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) O N THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 10.1 IN ITS CROSS-APPEAL, ASSESSEE HAS RAISED THE F OLLOWING TWO GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANT'S CASE AND IN LAW LEARNED CIT (APPEAL) HAS ERRED IN SUSTAINING, I N PART, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF MAXIMUM CR EDIT STANDING IN THE ACCOUNTS OF THE SUNDRY CREDITORS OF RS.76,50,46,685 /- U/S. 68 OF THE ACT TO THE EXTENT OF RS. 11.76/- CRORES AFTER APPLYING THE GROSS PROFIT RATE OF 6.5% ON THE SALES OF RS. 430.94/- CRORES. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E APPELLANT'S CASE AND IN LAW LEARNED CIT (APPEAL) HAS ERRED IN UPHOLDING THE INTEREST CHARGED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 2 34A, 234B & 234C OF THE ACT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E APPELLANT'S CASE AND IN LAW LEARNED CIT (APPEAL) HAS ERRED IN NOT DECIDING THE ADDITIONAL GROUND OF APPEAL RAISED BY THE APPELLANT. 4. THAT EACH OF THE GROUNDS OF APPEAL ENUMERATED AB OVE IS WITHOUT PREJUDICE TO AND INDEPENDENT OF ONE ANOTHER. 5. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO H IMSELF THE RIGHT TO ADD, ALTER OR AMEND ANY OF THE AFORESAID GROUNDS OF APPE AL BEFORE OR AT THE TIME OF HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DO CUMENTS AND PAPERS IN SUPPORT OF ITS CLAIM AS MAY BE NECESSARY. 10.2 IN THE CROSS-OBJECTION, ASSESSEE HAS RAISED A GROUND WHICH IS IDENTICAL TO THAT CONSIDERED BY US IN THE APPEAL FO R ASSESSMENT YEAR 2003-04 IN THE EARLIER PARAS. 10.3 IN ASSESSMENT YEAR 2005-06, THE RELEVANT FACTS ARE THAT IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION. 153A, ASSESSEE FILED A 27 SHRI ANIL MAHAVIR GUPTA RETURN OF INCOME ON 14/2/2008 DECLARING TOTAL INCOM E AT RS.1,26,18,084/-, WHICH IS SAME AT WHICH THE RETUR N OF INCOME WAS ORIGINALLY FILED UNDER SECTION 139(1) OF THE ACT ON 30/1/2005. IN THE ENSUING ASSESSMENT FINALIZED UNDER SECTION 143(3) R .W.S. 153A(1) OF THE ACT, THE ASSESSING OFFICER HAS DETERMINED THE TOTAL INCOME AT RS.87,32,79,760/-, AFTER MAKING THE FOLLOWING ADDIT IONS (I) DISALLOWANCE OF COMMISSIONER & BROKERAGE EXPENSES RS.1,89,39,320/- ; (II)LOW HOUSEHOLD WITHDRAWALS RS.6,00,000/- (II I) ADDITION UNDER SECTION 69B OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENTS IN PURCHASE OF SHARES - RS.5,05,39,000/-; (IV) ADDIT ION ON ACCOUNT OF ADVANCE FROM CUSTOMERS RS.2,14,45,387/-; (V) ADDI TION ON ACCOUNT OF UNACCOUNTED RECEIPTS RS. 30,00,000/-; (VI)SUNDRY CREDITORS BALANCES CONSIDERED UNEXPLAINED UNDER SECTION 68 OF THE ACT - RS.76,50,46,685/-; AND, (VII) DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT OUT OF DIFFERENCE COMMISSION EXPENSES RS.10,91,286/-. 10.4 IN APPEAL BEFORE THE CIT(A), ASSESSEE CHALLEN GED ALL THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE CIT(A) HAS DEL ETED ALL THE ADDITIONS EXCEPT THE ADDITION IN RELATION TO ITEM NO. (VI) A BOVE, WHEREIN IT HAS BEEN PARTLY DELETED AND THE ADDITION HAS BEEN SCALE D DOWN TO RS.11,76,00,000/-. 10.5 BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSE SSEE HAS RAISED A PRELIMINARY OBJECTION BASED ON THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING C ORPORATION (NHAVA- SHEVA)(SUPRA), WHICH HAS ALREADY BEEN EXAMINED BY US IN THE EARLIER PARAS FOR ASSESSMENT YEAR 2003-04. IN THE LIGHT OF OUR SAID DISCUSSION, IN THE PRESENT YEAR ALSO WE HAVE PERUSED THE MANNER IN WHICH THE 28 SHRI ANIL MAHAVIR GUPTA ADDITIONS HAVE BEEN MADE IN THE ASSESSMENT ORDER. IT IS QUITE CLEAR THAT EXCEPT IN RELATION TO THE ADDITION ON ACCOUNT OF UN EXPLAINED RECEIPTS OF RS.30,00,000/-, THE DISCUSSION IN THE ASSESSMENT ORDER DOES NOT REFER TO ANY MATERIAL FOUND DURING THE COURSE OF SEARCH, LEAVE ALONE ANY INCRIMINATING MATERIAL, TO JUSTIFY THE ADDITION S. THEREFORE, IN SO FAR AS THE ADDITIONS ON ACCOUNT OF ITEM NOS.(I), (II), (I II)(IV)(VI) AND (VII) MENTIONED IN PARA 10.3 ABOVE ARE CONCERNED, IT IS Q UITE CLEAR THE SAME ARE NOT BASED ON ONLY MATERIAL SEIZED DURING TH E COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE; THEREFORE, FOLLOWING THE DISCUSSION IN THE EARLIER PARAS FOR ASSESSMENT YEAR 2003-04(SUPRA), H EREIN ALSO WE HOLD THAT SUCH ADDITIONS ARE BEYOND THE SCOPE AND AMBIT CONTEMPLATED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT, AND OUR DECISION IN THE CROSS-OBJECTION OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 APPLIES MUTATIS MUTANDIS IN THIS YEAR TOO, QUA THE ADDITIO NS ENUMERATED BY US IN ITEM NOS.(I) TO (IV), (VI) AND (VII) REFERRED ABOVE. AS A CONSEQUENCE, WE HEREBY AFFIRM THE ULTIMATE CONCLUSION OF THE CI T(A) IN DELETING THE ADDITIONS ENUMERATED AT ITEM NOS. (I) TO (IV),(VI) AND (VII) ABOVE, ALBEIT ON A DIFFERENT GROUND. FURTHER, THE GROUND RAISED BY THE ASSESSEE IN ITS CROSS-APPEAL RELATING TO SUSTENANCE OF A PART ADDIT ION BY THE CIT(A) IN RELATION TO ITEM NO.(VI) ABOVE IS ALSO ALLOWED, BEC AUSE THE ENTIRE ADDITION IN THIS CONTEXT MADE BY THE ASSESSING OFFI CER IS HELD TO BE UNTENABLE BY US WHILE ADJUDICATING THE ISSUE RAISE D IN THE CROSS- OBJECTION. 10.6 THUS, THE APPEAL OF THE ASSESSEE IN ITA NO.638 /MUM/2011 AS WELL AS C.O. NO.182/MUM/2010 OF THE ASSESSEE ARE AL LOWED. 29 SHRI ANIL MAHAVIR GUPTA 11. NOW THE GROUNDS REMAINING IN THE APPEAL OF THE REVENUE ARE GROUND NOS. 9 & 10, WHICH RELATE TO AN ADDITION OF RS.30,00,000/- MADE BY THE ASSESSING OFFICER AS UNACCOUNTED RECEIPTS. 11.1 IN THIS CONTEXT, THE BRIEF FACTS ARE THAT THE SAID ADDITION IS IN TERMS OF THE DISCUSSION IN PARA 13 OF THE ASSESSMEN T ORDER. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.30.00 LACS ON THE BASIS OF A LOOSE PAPER BEING PAGE 13 OF ANNEXURE A-4 SEIZED FR OM THE RESIDENCE OF ONE MR.BHARAT G. SHAH, AN EMPLOYEE OF THE ASSESSEE. THE ASSESSING OFFICER NOTES THAT IN THE COURSE OF SEARCH, SAID MR . BHARAT G. SHAH STATED THAT SUCH LOOSE PAPERS WERE GIVEN TO HIM BY THE ASSESSEE TO BE KEPT WITH HIM. AS PER THE ASSESSING OFFICER, THE C ONTENTS OF THE RELEVANT SEIZED MATERIAL, WHICH HAS BEEN REPRODU CED IN PARA-13 OF THE ASSESSMENT ORDER, INDICATES THAT ONE MR. SURESH AG ARWAL PAID THE ASSESSEE RS.30,00,000/- IN MARCH, 2006 IN TWO INSTA LMENTS OF RS.15,00,000/- EACH. IT IS FURTHER NOTICED BY THE ASSESSING OFFICER THAT THOUGH THERE WAS AN ACCOUNT OF MR. SURESH AGARWAL I N THE ACCOUNT BOOKS OF ASESSEES PROPRIETARY CONCERN, M/S. GUPTA STEEL CORPORATION, BUT THE AFORESAID AMOUNT WAS NOT ACCOUNTED FOR. FO R THE SAID REASONS, THE ASSESSING OFFICER TREATED THE SUM OF RS.30,00,0 00/- AS UNACCOUNTED INCOME OF THE ASSESSEE. 11.2 BEFORE THE CIT(A), ASSESSEE REITERATED THAT TH E PAPER WAS FOUND AND SEIZED FROM MR. BHARAT G. SHAH AND NOT FROM THE ASSESSEE. FURTHER, THERE WAS NO MATERIAL TO SAY THAT SUCH SEI ZED MATERIAL RELATED TO THE ASSESSEE FOR ANY OF HIS ACTIVITIES. THE ASS ESSEE ALSO POINTED OUT THAT SUCH LOOSE PAPERS WERE PRINTED ACCOUNT PAPER S AND ON TOP OF IT IS 30 SHRI ANIL MAHAVIR GUPTA WRITTEN TRIAL DATA AND THAT ASSESSEE HAD NO KNOWL EDGE AS TO WHO HAS WRITTEN OR PRINTED THE SAME. 11.3 THE CIT(A) HAS CONSIDERED THE SUBMISSIONS PUT- FORTH BY THE ASSESSEE AND FOUND THAT THERE WAS NO MATERIAL BROUG HT ON RECORD TO ESTABLISH THAT THE SEIZED PAPERS BELONGED TO THE A SSESSEE. THE CIT(A) ALSO FOUND THAT THE SEIZED DOCUMENTS DO NOT INDICA TE WHO IS THE RECIPIENT OF THE AMOUNTS MENTIONED AND IN WHAT CONN ECTION THE MONEY WAS PAID. ACCORDING TO THE CIT(A), MERELY BECAUSE THERE IS AN ACCOUNT APPEARING IN THE ACCOUNT BOOKS OF THE ASSESSEE IN THE NAME OF MR. SURESH AGARWAL, IT WOULD NOT LEAD TO AN ASSUMPTION THAT THE SEIZED DOCUMENT REFLECT TRANSACTIONS BETWEEN ASSESSEE AND MR.SURESH AGARWAL. IN FACT, THE CIT(A) INFERS THAT THE DOCUME NT REFLECTS TRANSACTION BETWEEN MR. BHARAT G. SHAH AND MR. SU RESH AGARWAL, AS THE DOCUMENT WAS FOUND IN THE POSSESSION OF BHARA T G. SHAH. UNDER THESE CIRCUMSTANCES, CIT(A) HAS DELETED THE ADDITIO N IN THE HANDS OF THE ASSESSEE. 11.4 BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE EMPLOYEE FROM WHOM THE IMPUGNED LOOSE PAPERS WE RE FOUND IS A TRUSTED EMPLOYEE OF THE ASSESSEE AND THE NOTINGS I N THE SEIZED PAPER SHOWED THAT IT PERTAIN TO THE ASSESSEE. IT WAS, T HEREFORE, CONTENDED THAT THE ADDITION HAS BEEN WRONGLY DELETED BY THE C IT(A). 11.5 ON THE OTHER HAND, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) WAS JUSTIFIED IN DELETI NG THE ADDITION AS THERE WAS NO MATERIAL TO LINK THE SAID SEIZED DOCUM ENT WITH THE TRANSACTIONS UNDERTAKEN BY THE ASSESSEE WITH MR. S URESH AGARWAL, WHICH WERE DULY ACCOUNTED FOR IN THE ACCOUNT BOOK S. 31 SHRI ANIL MAHAVIR GUPTA 11.6 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. QUITE CLEARLY THE SEIZED PAPER IN QUESTION WAS FOUND FROM THE PRE MISES OF MR. BHARAT G. SHAH, WHO IS AN EMPLOYEE OF THE ASSESSEE. THERE FORE, THE PRIMARY ONUS WAS ON MR. BHARAT G. SHAH TO EXPLAIN THE CONTE NTS OF THE DOCUMENT SO AS TO JUSTIFY THE INFERENCE OF THE ASSE SSING OFFICER THAT IT REFLECTED UNACCOUNTED TRANSACTIONS OF THE ASSESSEE, AND, SUCH AN ONUS DOES NOT APPEAR TO HAVE BEEN DISCHARGED, HAVING REG ARD TO THE MATERIAL ON RECORD. EVEN OTHERWISE, WE DO NOT FIND ANY INFIR MITY IN THE CONCLUSION OF THE CIT(A) THAT THERE IS NO MATERIAL TO CONNECT THE ASSESSEE WITH SUCH LOOSE PAPERS. THEREFORE, UNDER T HESE CIRCUMSTANCES, WE FIND NO REASONS TO INTERFERE WITH THE CONCLUSION OF THE CIT(A) IN DELETING THE IMPUGNED ADDITION. THE ORDER OF CIT(A ) IS HEREBY AFFIRMED AND ACCORDINGLY REVENUE FAILS ON GROUNDS OF APPEAL NO.9 & 10 ALSO. 11.7 RESULTANTLY, APPEAL OF THE REVENUE FOR ASSESSM ENT YEAR 2005-06 IS DISMISSED. 12. NOW WE MAY TAKE UP ASSESSMENT YEAR 2006-07, WHE REIN REVENUE AND ASSESSEE HAVE FILED CROSS-APPEALS. THE CROSS-A PPEALS ARE WITH RESPECT TO ORDER PASSED BY CIT(A) WHICH IS AGAINS T AN ORDER PASSED BY CIT(A)-36, MUMBAI DATED 15/10/2010, WHICH IN TURN A RISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) D ATED 18/12/2008. THE GROUNDS OF APPEAL RAISED BY THE REVENUE AS WELL AS ASSESSEE READ AS UNDER:- GROUNDS OF APPEAL IN ITA NO.9227/MUM/2010(REVENUES APPEAL) : '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY 32 SHRI ANIL MAHAVIR GUPTA ESTIMATING THE HOUSEHOLD EXPENSES OF THE ASSESSEE A T RS.6LAKHS WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT FURNISHED DE TAILS OF HIS HOUSEHOLD EXPENSE AND CONTRIBUTION, IF ANY, BY OTHER FAMILY M EMBERS FOR SCRUTINY PARTICULARLY WHEN THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE VERY MEAGER. ' 2' ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.24 ,03,56,882/- MADE U/S 68 OF THE ACT BY HOLDING THAT THAT THE ADDITION MADE O N A/C OF THE PROGRESSIVE PEAK BALANCE RELATING TO UNEXPLAINED SUNDRY CREDITO RS WAS NOT SUSTAINABLE IGNORING HIS OWN CONCLUSION THAT THE ASSESSEE WAS N OT REPORTING TRUE AND CORRECT STATE OF AFFAIRS PARTICULARLY WHEN ASSESSEE HAD NO DELIVERY DETAILS, LORRY RECEIPTS AND THE ALLEGED CREDITORS HAD ADMITT ED THAT THE TRANSACTION WERE ONLY ON PAPER.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN. DELETING THE ADDITION OF RS. 24,03,56,882/-MADE U/S 68 OF THE ACT WITHOUT-APPRECIATING THAT THE ASSESSEE D ID NOT PRODUCE BOOKS OF ACCOUNTS, BILLS, VOUCHERS BEFORE THE A.O. FOR EXAMI NATION AND PARTICULARLY WHEN THE ALLEGED CREDITORS HAD IN THEIR ORIGINAL ST ATEMENT RECORDED U/S 131 HAD DENIED THE TRANSACTION OF ANY SALE OF GOODS TO THE ASSESSEE AND ALSO SOME OF THEM HAVE DECLARED COMMISSION INCOME ONLY O N THE AMOUNT OF ACCOMMODATION ENTRIES OF PURCHASE/SALE'. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1, 51,00,000/ - MADE U/S 68 OF THE ACT, AS UNEXPLAINED CASH CREDIT, CLAIMED TO BE ADVANCES RECEIVED FROM CUSTOMERS, BY HOLDING THAT THERE WAS NO MATERIAL TO DOUBT ASSESSEE'S EXPLANATION, THOUGH THE ASSESSEE HAD NEITHER FURNIS HED CONFIRMATIONS WITH PAN DETAILS ETC., NOR PRODUCED THE PARTY FOR VERIFI CATION TO ESTABLISH THEIR IDENTITY AND CREDITWORTHINESS AND THE GENUINENESS O F THE TRANSACTION AND THUS THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST UPON HIM UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. 5. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE OF RS.30,00,000/ - AS UNACCOUNTED RECEIPTS BY HOLDING THAT THE AMOUNT DOE S NOT REPRESENT RECEIPT OF THE ASSESSEE WITHOUT APPRECIATING THAT THE ADDIT ION WAS MADE ON THE BASIS OF PAPERS SEIZED DURING SEARCH FROM ASSESSEE' S TRUSTED EMPLOYEE, WHO HAD DEPOSED THAT THE SAME WERE GIVEN TO HIM BY THE ASSESSEE' 6. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE OF RS. 30,00,000/ - AS UNACCOUNTED RECEIPTS BY HOLDING THAT PROVISIONS OF SEC 68,69 DO NOT APPLY, WITHOUT APPRECIATING THAT THE ADDITION WAS MADE ON THE BASIS OF PAPERS SEIZED DURING SEARCH FROM THE ASSESSEE'S TRUSTED EM PLOYEE AND THERE WAS 33 SHRI ANIL MAHAVIR GUPTA SUFFICIENT MATERIAL TO INFER THAT THE NOTINGS IN TH E SEIZED PAPER PERTAINS TO THE ASSESSEE. GROUNDS OF APPEAL IN ITA NO.664/MUM/2011-(ASSESSEES APPEAL): 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E APPELLANT'S CASE AND IN LAW LEARNED CIT (APPEAL) HAS ERRED IN SUSTAINING, I N PART, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF MAXIMUM CR EDIT STANDING IN THE ACCOUNTS OF THE SUNDRY CREDITORS OF RS.24,03,56,882 /- U/S. 68 OF THE ACT TO THE EXTENT OF RS. 10.96/- CRORES AFTER APPLYING THE GROSS PROFIT RATE OF 6.5% ON THE SALES OF RS.262,31,64,265/- 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANT'S CASE AND IN LAW LEARNED CIT (APPEAL) HAS ERRED IN UPHOLDING THE INTEREST CHARGED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 2 34A, 234B & 234C OF THE ACT. 3. THAT EACH OF THE GROUNDS OF APPEAL ENUMERATED AB OVE IS WITHOUT PREJUDICE TO AND INDEPENDENT OF ONE ANOTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO HI MSELF THE RIGHT TO ADD, ALTER OR AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL BEF ORE OR AT THE TIME OF HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DOCUM ENTS AND PAPERS IN SUPPORT OF ITS CLAIM AS MAY BE NECESSARY. 12.1 THE FIRST GROUND IN THE APPEAL OF THE REVENUE IS WITH RESPECT TO THE DECISION OF THE CIT(A) IN HOLDING THAT THERE WA S NO JUSTIFICATION FOR THE ASSESSING OFFICER TO MAKE AN ADHOC ADDITION OF RS.6.00 LACS ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES. IN THIS CONTEXT, THE RELEVANT FACTS ARE THAT THE ASSESSING OFFICER NOTES IN THE ASSESSMENT ORDER THAT LOOKING AT THE STATUS OF THE ASSESSEE A LUMPSUM ADDITION OF RS.6.00 LACS IS MADE AS UNACCOUNTED EXPENDITURE FOR HOUSEHOLD EXPENSES. THE CIT(A) HAS DELETED THE SAME ON THE G ROUND THAT IT IS PURELY AN ADHOC ADDITION. 12.2 IN OUR VIEW, THE ORDER OF THE CIT(A) DESERVES TO BE AFFIRMED AS THERE IS NO EVIDENCE REGARDING UNACCOUNTED HOUSEHO LD EXPENSES FOUND DURING THE COURSE OF SEARCH. THE CIT(A) FURTHER NO TES THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE NUMBER OF FAMILY MEM BERS AND THE 34 SHRI ANIL MAHAVIR GUPTA INDIVIDUAL WITHDRAWALS MADE BY THEM. NONE OF THE A FORESAID FINDINGS OF THE CIT(A) HAVE BEEN NEGATED BY THE REVENUE BEFO RE US AND, THEREFORE, WE HEREBY UPHOLD HIS DECISION OF DELET ING THE IMPUGNED ADDITION. THUS, ON THIS ASPECT REVENUE FAILS. 13. IN SO FAR AS, THE GROUNDS NO.2 TO 4 IN THE APPE AL OF THE REVENUE AND THE GROUND NO.1 IN THE APPEAL OF THE ASSESSEE ARE CONCERNED, THEY ARISE OUT OF A SINGULAR ADDITION OF RS.24,03,56,882 /- MADE BY THE ASSESSING OFFICER BY INVOKING SECTION 68 OF THE ACT . SINCE THE SAID CROSS- GROUNDS RELATE TO THE SAME ISSUE, THEY ARE BEING TA KEN UP TOGETHER. 13.1 AS NOTED EARLIER, ASSESSEE IS CARRYING ON THE BUSINESS OF TRADING IN VARIOUS STEEL PRODUCTS UNDER THE NAME AND STYLE OF PROPRIETARY CONCERN M/S. GUPTA STEEL CORPORATION. IN THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONSIDERED THE M AXIMUM CREDIT BALANCE STANDING IN THE NAMES OF THE FOLLOWING EIGH T CREDITORS AT RS.24,03,56,882/- AS UNEXPLAINED CREDITS WITHIN THE MEANING OF SECTION 68 OF THE ACT:- NAME OF THE PARTY AMOUNT (RS.) 1. NISHA ENTERPRISES 21608878 2. LOHA ISPAT LTD. 40280019 3. BHAGWATI STEEL CAST. LTD. 14961115 4. OFFSHORE INDUSTRIAL CONST.(P) LTD. 29315674 5. BALAJI TRADING CO. 14984883 6. N. MOHANLAL & CO. 52781812 7. SHIVOHAM STEEL TRADERS 51329471 8. SHREE SAI INDUSTRIES 15095030 240356882 35 SHRI ANIL MAHAVIR GUPTA THE PRIMARY REASON ADVANCED BY THE ASSESSING OFFICE R TO HOLD THAT THE AFORESAID CREDITS AS UNEXPLAINED WAS THAT THE CRE DITORS CLAIMED TO HAVE ADMITTED BEFORE THE DEPARTMENT THAT THEY HAVE PROVIDED ACCOMMODATION TRANSACTIONS ONLY AND THUS, ASSESSEE HAD NOT MADE ANY ACTUAL PURCHASES FROM THE SAID CREDITORS. 13.2 IN APPEAL BEFORE THE CIT(A), ASSESSEE MADE VAR IED FACTUAL AND LEGAL SUBMISSIONS ASSAILING THE STAND OF THE ASSES SING OFFICER. THE CIT(A), AFTER TAKING INTO CONSIDERATION THE SUBMISS IONS PUT-FORTH BY THE ASSESSEE, THE REMAND REPORT OF THE ASSESSING OFFICE R AS WELL AS THE MATERIAL ON RECORD NOTICED THAT OUT OF THE STATEMEN T OF SEVEN PARTIES REFERRED BY THE ASSESSING OFFICER SIX PARTIES RETR ACTED THEIR STATEMENTS BY FILING AFFIDAVITS. THE CIT(A) HAS ALSO NOTED TH AT DURING THE REMAND PROCEEDINGS CALLED FOR BY HIM, THE ASSESSING OFFICE R RECORDED FRESH STATEMENTS OF SIX PARTIES, WHERE THEY ADMITTED THAT THEIR TRANSACTIONS WITH THE ASSESSEE WERE GENUINE. HOWEVER, THE CIT(A ) NOTED THAT WITH RESPECT TO ONE PARTY I.E. MRS MEHRUNISA HUSSEINI , DIRECTOR OF M/S. CHEVEND TECHNOLOGY P. LTD. AND CHEVERON METAL PRODU CT (P) LTD., THE STATEMENTS WERE NOT RETRACTED AND, THEREFORE, THERE REMAINED AN ELEMENT OF DOUBT AND THE TRADING RESULTS OF THE ASS ESSEE COULD NOT BE TAKEN AT ITS FACE VALUE. FOR THIS REASON, THE CIT( A) DELETED THE ADDITION OF RS.24,03,56,882/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT, BUT PROCEEDED TO RETAIN AN ADDITION OF RS. 10.96 CRORES WITH RESPECT TO THE TRADING RESULTS OF THE ASSESSEE. TH E CIT(A) ARRIVED AT SUCH AN ADDITION BY CONSIDERING THAT THE GROSS PROF IT NORMALLY EARNED IS @ 6.5% AND AFTER TAKING INTO ACCOUNT THE GROSS PROF IT OF 2.32% DECLARED BY THE ASSESSEE, THE DIFFERENTIAL OF 4.18% WAS APPL IED ON THE TOTAL TURNOVER OF RS.262 CRORES DECLARED BY THE ASSESSEE AND COMPUTED THE 36 SHRI ANIL MAHAVIR GUPTA ADDITION OF RS.10.96 CRORES TO THE TRADING RESULTS. IN THIS BACKGROUND, THE REVENUE IS IN APPEAL, CHALLENGING THE ACTION OF THE CIT(A) IN HOLDING THAT THERE WAS NO JUSTIFICATION FOR THE ADDITION OF RS.24,03,56,882/- MADE UNDER SECTION 68 OF THE ACT, WHEREAS THE ASSES SEE IS IN APPEAL CHALLENGING THE ORDER OF THE CIT(A) IN RETAINING AN ADDITION OF RS.10.96 CRORES TO THE TRADING RESULTS. 13.3 IN THE COURSE OF HEARING, THE LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE CIT(A) HAD FAILED TO APPRECIAT E THE STAND OF THE ASSESSING OFFICER, WHEREIN IT HAS BEEN BROUGHT OUT THAT IN THE ORIGINAL STATEMENT OF THE CREDITORS RECORDED BY THE DEPARTME NT, SUCH CREDITORS HAD INITIALLY DENIED SUPPLY OF GOODS AND, THEREFORE , THE ASSESSING OFFICER WAS JUSTIFIED IN TREATING SUCH CREDITORS AS UNEXPLAINED. 13.4 ON THE OTHER HAND, LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) MADE NO MISTAKE IN SETTING-ASID E THE ACTION OF THE ASSESSING OFFICER BECAUSE THERE WAS NO MATERIAL ADV ERSE WITH RESPECT TO THE SEVEN PARTIES IN QUESTION. IN THIS CONTEXT, TH E LD. REPRESENTATIVE FOR THE ASSESSEE REFERRED TO PAGE-18 OF THE PAPER BOOK, WHEREIN FOR EACH OF THE EIGHT PARTIES, IT HAS BEEN NARRATED AS TO HOW T HE ASSESSING OFFICER WAS WRONG IN INFERRING THAT THE CREDITORS WERE UNEX PLAINED. ON THIS ASPECT, LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT FOR THE PARTIES LISTED AT S.NO.2 TO 8 IN THE PARA ABOVE, TH E ENQUIRES BEING REFERRED BY THE ASSESSING OFFICER WERE NOT RELATED TO THEM, BUT THE SAME RELATED TO OTHER PARTIES. IT HAS BEEN FURTHE R POINTED OUT THAT THE STATEMENTS REFERRED BY ASSESSING OFFICER ALSO RELAT ED TO THE PURCHASES EFFECTED BY THE SISTER CONCERN M/S. S.K.S. ISPAT & POWER LTD., AND IN THAT CASE VIDE ITA NO.9203/MUM/2010 DATED 06/06/201 4 FOR 37 SHRI ANIL MAHAVIR GUPTA ASSESSMENT YEAR 2006-07, THE ADDITION HAS BEEN DELE TED BY THE TRIBUNAL. BY REFERRING TO THE COPY OF THE ORDER OF THE TRIBUNAL DATED 6/6/2014(SUPRA), IT IS POINTED OUT THAT IN THAT CAS E ALSO ADDITIONS WITH RESPECT TO THE SUNDRY CREDITORS WERE MADE ON SIMILA R CIRCUMSTANCES AND THE SAME STOOD DELETED. 13.5 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. BEFORE WE PROCEED TO EXAMINE THE EFFICACY OF RIVAL STANDS ON THE ASPECT OF ADDITION MADE UNDER SECTION 68 OF THE ACT, THE DETA ILS OF THE EIGHT PARTIES AND THE SAY OF THE ASSESSEE ON EACH OF THEM IS TABULATED AS UNDER:- SR.NO. PARTY NAME ADDITIONS MADE BY AO SAY OF THE ASSESSEE 1 NISHA ENTERPRISES 21,608,878 PARTY CO NFIRMED THE TRANSACTION BEFORE AO DURING REMAND PROCEEDINGS. THE A.O. MADE ADDITION ON THE BASIS OF STATEMENT OF SHRI KAMLESH AJMERA DATED 09.06.2008 WHEREIN HE STATED THE TRANSACTIONS WERE MERE PAPER TRANSACTIONS. HOWEVER SHRI KAMLESH AJMERA SUBSEQUENTLY RETRACTED HIS SAID STATEMENT VIDE AFFIDAVIT DATED 27.10.2008 AND CONFIRMED BEFORE THE A.O. DURING REMAND PROCEEDINGS ON 23.02.2010 THAT THE TRANSACTIONS WERE GENUINE. 2 LOHA ISPAT LTD. 40,280,019 THE ADDITION WAS MADE WITHOUT RAISING ANY SPECIFIC QUERY FOR THIS PARTY. A.O. ADDED THE CLOSING OUTSTANDING BALANCE IGNORING THE BUSINESS TRANSACTIONS DURING THE YEAR. NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. 3 BHAGWATI STEEL CAST. LTD. 14,961,115 THE ADDITION WAS MADE WITHOUT RAISING ANY SPECIFIC QUERY FOR THIS PARTY. NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID 38 SHRI ANIL MAHAVIR GUPTA THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. THE PARTY APPEARED BEFORE A.O. IN REMAND PROCEEDINGS AND CONFIRMED THE TRANSACTION. 4 OFFS HORE INDUSTRIAL CONST. (P.)LTD. 29,315,674 THE ADDITION WAS MADE WITHOUT RAISING ANY SPECIFIC QUERY FOR THIS PARTY. NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. 5 BALAJI TRADING CO. 14,984,883 AO HAS MADE ADDITION OF CLOSING OUTSTANDING BALANCE OF RS.1,49,84,883/- IGNORING THE FACT THAT THERE WAS AN OPENING DEBIT BALANCE OF RS.4,23,67,975/- ON ACCOUNT OF SALES MADE TO THE PARTY WHICH HAS BEEN ACCEPTED IN THE PREVIOUS YEAR RELEVANT TO A.Y.2006-07. NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID TO THE PARTY RS.1.45 CRS AND RECEIVED DISCOUNT OF RS.4.84 LACS IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. 6 N.MOHANLAL & CO. 52,781,812 NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. 7 SHIVOHAM STEEL TRADERS 51,329,471 NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. THE PARTY APPEARED BEFORE ASSESSING OFFICER IN REMAND PROCEEDINGS AND CONFIRMED THE TRANSACTION. 8 SHREE SAI INDUSTRIES 15,0 95,030 NO SUMMONS HAS BEEN ISSUED BY THE A.O. THE ASSESSEE HAS PAID THE ENTIRE OUTSTANDING AMOUNT IN SUBSEQUENT YEAR. THE ASSESSEE HAS 39 SHRI ANIL MAHAVIR GUPTA FILED CONFIRMATION OF PARTY WITH PAN BEFORE THE CIT(A) AND THE SAME WAS FORWARDED TO THE A.O. 240,356,882 THE FINDINGS OF THE CIT(A) WITH RESPECT TO THE AFOR ESAID PARTIES IS AS UNDER:- 46.IT IS PERTINENT TO NOTE THAT NONE OF THE ABOVE M ENTIONED PARTIES HAVE DENIED MAKING ANY SALES TO THE APPELLANT. THE AFORE SAID PARTIES HAD MADE PURCHASES FROM SOME OF THE ALLEGED PARTIES WHO HAVE STATED THAT THEY HAD ISSUED ACCOMMODATION BILLS WERE IN FAVOUR OF THE AB OVE PARTIES AND NOT THE APPELLANT. BUT OF SUCH ACCOMMODATION BILLS, HOW MUC H QUANTITY OR VALUE OF BILLS WAS PART OF THE PURCHASE OF APPELLANT HAS NEI THER BEEN ENQUIRED NOR QUANTIFIED. IN NONE OF THE ABOVE CASES, THERE ARE A NY INSTANCES OF CASH BEING WITHDRAWN. 47.IT IS ALSO GATHERED THAT IN NONE OF THE ABOVE CA SES, THERE HAVE BEEN ANY ADDITION DISALLOWANCE OF THE PURCHASES ON ACCOUNT O F THEY BEING BOGUS AND THE BOOK RESULTS HAVE BEEN PAID BY A/C PAYEE CHEQUE S IN THE SUBSEQUENT FINANCIAL YEAR BY THE APPELLANT AND HAS BEEN SO ALL OWED BY THE SAME AO . IT IS ALSO GATHERED THAT OUT OF THE 169 PARTIES WHO HAVE ALLEGEDLY ISSUED ACCOMMODATION BILLS OR GIVEN ENTRIES, ONLY 7 WERE E XAMINED AND ON THAT BASIS THE ADDITION HAS BEEN MADE, THIS MEANT THAT T HE ENTIRE ADDITION HAS BEEN BASED ON THE EXAMINATION OF ONLY LESS THAN 5% OF THE PARTIES WHO INITIALLY ACCEPTED THE TRANSACTION, THEN DENIED THE SAME AND LATER AGAIN CHANGED THE STANCE BY ACCEPTING IT. THE FREQUENT CH ANGE OF STANCE BY SUCH PARTIES IS BY ITSELF ( MAKING THEIR ENTIRE STATEMEN TS DOUBTFUL AND NOT WORTH TAKING AS EVIDENCE ON RECORD. 48. DURING THE COURSE OF HEARING, THE APPELLANT WIT HOUT PREJUDICE TO THE SUBMISSION ALREADY MADE SUBMITTED WITHOUT ADMITTING THAT ASSUMING ALL THE PURCHASES ARE BOGUS THEN THE CORRESPONDING SALES HA S ALSO TO BE TREATED AS BOGUS. THE AR OF THE APPELLANT FURTHER EMPHASIZED T HAT ONCE THE PURCHASED ARE ALLOWED AS GENUINE THEN HOW COME THE OUTSTANDIN G BALANCE CAN BE DISALLOWED AND ADDED TO THE INCOME WHILE THE APPELL ANT IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. IF THE APPELLANT H AS TO FOLLOW THE METHODOLOGY AS ADOPTED BY THE AO THEN THE SAME SHOU LD BE ALLOWED IN THE YEAR OF PAYMENT. 49. CONSIDERING THE SUBMISSION MADE, I AGREE THAT W HERE BOTH PURCHASES AND SALES PARTIES HAVE BEEN ADMITTED AS GENUINE THEN IT IS NOT CORRECT TO DOUBT THE PROGRESSIVE BALANCE OF THE SAID PARTY AS BOGUS PARTICULARLY WHEN THE SUNDRY CREDITORS HAVE APPEARED BEFORE THE AO DURING THE REMAND PROCEEDINGS AND HAVE ADMITTED OF HAVING SUPPLIED TH E GOODS AND ALSO 40 SHRI ANIL MAHAVIR GUPTA RECEIVED THE PAYMENT. THE CONCEPT OF PEAK OR INITIA L INVESTMENT WOULD APPLY IN THOSE CASES, WHERE THE ROTATION OF THE FUNDS IS IDENTIFIED AND THERE IS SOME CASH WITHDRAWN AT SOME STAGE. HOWEVER, IN .THE INST ANT CASE, NO SUCH EVIDENCE IS AVAILABLE. THERE IS ALSO NO EVIDENCE, T HAT WHEREVER EVEN IF SOME CASH IS WITHDRAWN THIS CASH IS ROUTED TO THE APPELL ANT. 50. AFTER PERUSING THE ASSESSMENT ORDER AND THE SUB MISSION MADE BY THE APPELLANT I HAVE REACHED THE CONCLUSION THAT ONLY 7 PARTIES INVOLVED IN THE PURCHASE TRANSACTIONS HAD ADMITTED TO HAVE DONE PAP ER TRANSACTIONS BEFORE THE AO IN THE VARIOUS AY'S. HOWEVER, DURING THE APP ELLATE PROCEEDINGS, IT WAS BROUGHT TO MY NOTICE THAT THE AO HAS NOT TAKEN INTO CONSIDERATION THE RETRACTED AFFIDAVIT MADE BY THE 6 PARTIES OUT OF 7 PARTIES INSPITE OF THE FACT THAT THE SAME WERE GIVEN TO THE AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS. THE AO DURING THE COURSE OF REMAND PRO CEEDINGS ISSUED SUMMONS TO ALL THESE 6 PARTIES HAVE ADMITTED TO HAV E SOLD GOODS TO THE APPELLANT AND HAVE RECEIVED THE PAYMENTS BY A/C PAY EE CHEQUES ONLY. INSPITE OF THE SAID STATEMENTS THE DOUBT STILL REMAINS BECA USE ONE PARTY MRS. MEHRUNISA HUSSEINI DIRECTOR OF M/S. CHEVEND TECHNOL OGY P LTD AND CHEVERON METAL PRODUCTS (P) LTD EVEN DURING THE SEARCH PROCE EDINGS AND POST SEARCH PROCEEDINGS MAINTAINED THAT HER COMPANY HAD DONE ON LY PAPER TRANSACTION WITH THE APPELLANT. 51. IN THIS BACK GROUND AND CONSIDERING THE OVERALL FACTS, THE TRADING RESULTS OF THE APPELLANT CANNOT BE TAKEN AT FACE VALUE AND ACCEPTED AS GENUINE. THE AO HAS ACCEPTED THE PURCHASES MADE FROM THESE 7 PAR TIES AND THE CORRESPONDING SALES AND ALSO PART PAYMENT MADE TO T HESE CREDITORS AS GENUINE BUT HAS DOUBTED THE PROGRESSIVE PEAK BALANC E PAYABLE TO THESE CREDITORS AS DOUBTFUL AND MADE ADDITIONS WHICH IS N OT CORRECT AND CONVINCING PARTICULARLY CONSIDERING THE-FACTS OF THE CASE MADE THEREFORE ON A/ C OF PROGRESSIVE PEAK BALANCE IS NOT SUSTAINABLE. 13.6 THE FIRST POINT TO BE NOTICED IS THE FINDING O F THE CIT(A) THAT THE AFORESAID PARTIES HAVE NOT DENIED MAKING OF SALES T O THE ASSESSEE, BUT THE AFORESAID PARTIES HAD MADE PURCHASES FROM CERTA IN OTHER PARTIES WHO STATED THAT THEY HAD ISSUED ONLY ACCOMMODATION BILLS IN FAVOUR OF THE AFORESAID PARTIES. THIS ASPECT HAS NOT BEEN DI SPUTED BY THE REVENUE BEFORE US, AND IN ANY CASE, THE FURTHER FIN DING OF THE CIT(A) THAT NO PARTICULAR PURCHASE EFFECTED BY THE ASSESSE E HAS BEEN LINKED TO SUCH ACCOMMODATION BILLS OBTAINED BY THE SUPPLIERS HAS ALSO NOT BEING DISPUTED BEFORE US. IN FACT, IT IS FOR THIS REASON THAT THE ASSESSING OFFICER CHOSE TO TREAT THE MAXIMUM CREDIT BALANCE S TANDING IN THE 41 SHRI ANIL MAHAVIR GUPTA AFORESAID EIGHT CREDITORS AS UNEXPLAINED WITHIN TH E MEANING OF SECTION 68 OF THE ACT. THE SAID APPROACH OF THE ASSESSING OFFICER IS ITSELF SUSPECT BECAUSE WHAT IS EXPECTED TO BE ASSESSED UND ER SECTION 68 OF THE ACT ARE THE PARTICULAR CREDITS WHICH ARE FOUND TO BE UNEXPLAINED. 13.7 IT IS ALSO EMERGING THAT THE ACTION OF ASSESSI NG OFFICER IS BASED ON THE VERIFICATION CARRIED OUT FROM SEVEN PARTIES INV OLVED IN PURCHASE TRANSACTIONS OVER VARIOUS ASSESSMENT YEARS, AND NOT IN RELATION TO THE TRANSACTIONS CARRIED OUT SPECIFICALLY IN THE INSTAN T ASSESSMENT YEAR. IN FACT, THE CIT(A) RECORDS OUT OF THE 169 PARTIES WHO WERE ALLEGED TO HAVE ISSUED ACCOMMODATION BILLS, ONLY 7 WERE EXAMINED BY THE DEPARTMENT AND THE ADDITION IS MADE ON THAT BASIS. QUITE CLEA RLY, THE ASSESSING OFFICER PROCEEDED TO CONSIDER THE AFORESAID 8 CREDI TORS MAXIMUM BALANCE DURING THE YEAR AS UNEXPLAINED WITHOUT RECO RDING AN ADVERSE FINDING WITH REGARD TO THEIR TRANSACTIONS FOR THE Y EAR UNDER CONSIDERATION. EVEN WITH REGARD TO THOSE 7 PARTIES WHO ADMITTED INITIALLY TO HAVE UNDERTAKEN ACCOMMODATION TRANSACT IONS, 6 OF THEM RETRACTED THEIR STATEMENTS BY FILING AFFIDAVITS AND DURING THE COURSE OF REMAND PROCEEDINGS DIRECTED BY THE CIT(A), ASSESSIN G OFFICER SUMMONED SUCH 6 PARTIES WHO ADMITTED TO HAVE SOLD G OODS TO THE ASSESSEE. WE FIND THAT AFTER SUCH RETRACTION BY TH E CREDITORS AND RECORDING OF THEIR STATEMENT BY THE ASSESSING OFFIC ER, THERE IS NOTHING BROUGHT ON RECORD BY THE REVENUE TO DISPROVE THAT S UCH RETRACTIONS ARE UNTENABLE OR BAD IN THE EYES OF LAW. IN ANY CASE, THERE CAN BE NO DISPUTE THAT ONLY SUCH CREDITORS CAN BE SAID TO BE DOUBTFUL OR UNEXPLAINED IN WHOSE CASE ENQUIRIES HAVE BEEN CARRI ED OUT SPECIFIC TO THE TRANSACTIONS CARRIED OUT WITH THE ASSESSEE IN T HE INSTANT ASSESSMENT YEAR. 42 SHRI ANIL MAHAVIR GUPTA 13.8 EVEN OTHERWISE, WE FIND THAT IN THE CONTEXT O F THE CREDITORS STATED AT SL.NO.2 TO 8 OF THE TABULATION ABOVE, THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY ADVERSE MATERIAL SPECIFIC TO TH E TRANSACTIONS WITH ASSESSEE. IN SO FAR AS THE ISSUE RELATING TO M/S. NISHA ENTERPRISES IS CONCERNED, THE ASSESSING OFFICER MADE THE ADDITION ON THE BASIS OF STATEMENTS OF SHRI KAMLESH AJMERA DATED 9/6/2008, W HEREIN IT WAS STATED THAT THE TRANSACTIONS WERE MERE PAPER TRANSA CTION. IT IS SEEN THAT SUBSEQUENTLY, THE SAID CREDITOR RETRACTED HIS STATEMENT AND CONFIRMED THE SAME BEFORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS BY ASSERTING THAT THE TRANSACTIONS WERE GENUINE. WE FIND THAT SIMILAR SITUATION WAS BEFORE THE TRIBUNAL IN T HE CASE OF S.K.S ISPAT & POWER LTD.(SUPRA), A GROUP CONCERN, FOR ASSESSMEN T YEAR 2006-07 ITSELF AND HAVING REGARD TO FACT-SITUATION, THE TRA NSACTION WITH M/S. NISHA ENTERPRISES HAVE BEEN HELD TO BE GENUINE. IN FACT, IN THE ORDER OF THE TRIBUNAL DATED 6/6/2014(SUPRA), THE AFFIDAVIT O F THE SAID CONCERN RETRACTING THE EARLIER STATEMENT DATED 6/9/2008 HAS BEEN REPRODUCED, WHICH ALSO REFERS TO THE SALES MADE TO THE ASSESSEE FOR THE INSTANT PERIOD. BE THAT AS IT MAY, IN OUR VIEW, THE FINDIN GS OF THE CIT(A) DO NOT REQUIRE ANY INTERFERENCE IN SO FAR AS THEY RELATE T O SETTING-ASIDE OF THE ACTION OF THE ASSESSING OFFICER IN TREATING THE SUN DRY CREDITORS AS UNEXPLAINED. THEREFORE, ON THIS ASPECT REVENUE FAI LS. 13.9 IN SO FAR AS ASSESSEES APPEAL IS CONCERNED, I T IS CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.10.96 CRORES TO THE TRADING RESULTS. IT IS SEEN THAT THE CIT(A) OP INED THAT THE TRADING RESULTS WERE NOT RELIABLE FOR THE REASON THAT IN T HE CASE OF ONE OF THE 43 SHRI ANIL MAHAVIR GUPTA PARTIES I.E. MRS MEHRUNISA HUSSEINI , DIRECTOR OF M /S. CHEVEND TECHNOLOGY P. LTD. AND CHEVERON METAL PRODUCT (P) L TD., THE INITIAL STATEMENTS WERE NOT RETRACTED, WHICH SHOWED AN ELEM ENT OF DOUBT ON THE PURCHASES EFFECTED BY THE ASSESSEE. FOR THIS R EASON, HE HAD MADE ADDITION TO THE TRADING RESULTS. 13.10 ON THIS ASPECT, THE LD. REPRESENTATIVE FOR TH E ASSESSEE POINTED OUT THAT SO FAR AS THE INSTANT ASSESSMENT YEAR IS C ONCERNED, THE STATEMENT OF MRS. MEHRUNISA HUSSEINI HAS NO RELEVAN CE BECAUSE NO TRANSACTION HAS BEEN CARRIED OUT BY THE ASSESSEE WI TH THE SAID CONCERN DURING THE YEAR UNDER CONSIDERATION. SECONDLY, IT IS CANVASSED ON AN ALTERNATIVE BASIS THAT THE ADOPTION OF GROSS PROFIT @ 6.5% BY THE CIT(A) IS UNREASONABLE AND IN ANY CASE THE CIT(A) HAS ERRE D IN APPLYING THE G.P AT 6.5% ON THE ENTIRE SALES OF THE ASSESSEE. 13.11 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS. IN OUR CONSIDERED OPINION, THE ADDITION TO THE TRADING RES ULTS MADE BY THE CIT(A) IS BASED ON CONJECTURES AND SURMISES, IN AS MUCH AS, THE STATEMENT OF MRS. MEHRUNISA HUSSEINI, RELIED UPON B Y HIM IS NOT RELEVANT FOR THE INSTANT YEAR. SECONDLY, EVEN OUT OF EIGHT CREDITORS, WHOSE MAXIMUM BALANCE WAS CONSIDERED UNEXPLAINED, T HE STATEMENT OF ONLY ONE PARTY I.E. M/S. NISHA ENTERPRISES WAS O UT OF THE STATEMENT OF SEVEN PARTIES RECORDED BY THE ASSESSING OFFICER. E VEN ON THIS ASPECT, WE FIND THAT THE SAID CONCERN RETRACTED ITS INITIA L STATEMENT AND IN THE REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER, TH E SAID PARTY ADMITTED TRANSACTIONS WITH THE ASSESSEE. THE ADDI TION MADE ON SIMILAR BASIS IN CONNECTION WITH TRANSACTIONS WITH M/S. NISHA ENTERPRISES IN THE HANDS OF THE SISTER CONCERN S.K.S ISPAT & POWER LTD. (SUPRA) FOR 44 SHRI ANIL MAHAVIR GUPTA ASSESSMENT YEAR 2006-07 HAS BEEN DELETED BY THE TRI BUNAL. CONSIDERED IN THIS LIGHT, IN OUR VIEW, SO FAR AS TRADING RESUL TS FOR THE INSTANT ASSESSMENT YEAR ARE CONCERNED, THE SAME CANNOT BE T REATED AS UNRELIABLE ON THE BASIS OF THE VERIFICATION EXERCIS E OF THE CREDITORS CARRIED OUT BY THE ASSESSING OFFICER. FURTHERMORE, THE UNSUSTAINABILITY OF THE ADDITION MADE BY THE CIT(A) CAN BE SEEN FROM THE FACT THAT HE HAS APPLIED ADHOC GROSS PROFIT RATE OF 6.5% ON THE ENTIRE SALES MADE BY THE ASSESSEE INSTEAD OF CONFINING IT TO ANY PARTICU LAR TRANSACTIONS WHICH WERE UNPROVED, AS PER HIM. IN FACT, ONCE THE CIT(A ) DID NOT FIND THE INADEQUACY BROUGHT OUT BY THE ASSESSING OFFICER WIT H RESPECT TO SUNDRY CREDITORS AS BEING JUSTIFIED, HE HAD NO PLAUSIBLE E VIDENCE, APART FROM MERE DOUBTS, TO TREAT THE TRADING RESULT AS UNRELIA BLE. THEREFORE, THE ADDITION SUSTAINED BY THE CIT(A) IS UNWARRANTED AND IS HEREBY DIRECTED TO DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE ALLOWED. 14. THE ONLY OTHER GROUNDS REMAINING IN THE APPEAL OF THE REVENUE ARE GROUND OF APPEAL NOS.5 & 6, WHICH INVOLVE A C OMMON ISSUE. THE DISPUTE RELATES TO AN ADDITION OF RS.30.00 LACS REC EIVED BY THE ASSESSEE AS UNACCOUNTED RECEIPTS. THIS ADDITION HAS BEEN M ADE ON THE BASIS OF LOOSE PAPERS, BEING PAGE-13 TO ANNEXURE A-4 SEIZED IN THE COURSE OF SEARCH FROM THE PREMISES OF ONE MR. BHARAT G. SHAH, AN EMPLOYEE OF THE ASSESSEE. IT WAS A COMMON GROUND BETWEEN THAT PARTIES THAT THE SAID ISSUE IS IDENTICAL TO THE GROUND NOS. 9 & 10 C ONSIDERED BY US IN THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005-06 I N EARLIER PARAS. FOLLOWING OUR DECISION IN GROUND OF APPEAL NOS.9 & 10, IN THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005-06, THE SAID GROUNDS ARE ALSO DECIDED ACCORDINGLY AND THE SAME ARE DISMISSED. 45 SHRI ANIL MAHAVIR GUPTA 15. RESULTANTLY, WHEREAS THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2006-07 IS DISMISSED, THAT OF THE ASSESSEE I S ALLOWED. 16. RESULTANTLY, THE CAPTIONED APPEALS ARE DISPOSED OF, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/2016 SD/- SD/- (SANJAY GARG) (G.S. PANNU) JUDICIAL MEMBER ACCOU NTANT MEMBER MUMBAI, DATED 31/08/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI