Giridharimal Bhanwarlal, Coochbihar V. ITO, Ward - 1, Coochbehar, Coochbihar

ITA 929/KOL/2011

• Counselvise Citation: 92923514 RSA 2011
• Duration Of Justice: 4 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 23-06-2011
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAM SOM
• Assessee Lawyers: M K SARKAR; A K MAHESWARIFCA
• Keywords: Unexplained expenditure; Search and seizure; Document seized; Documents seized; Reassessment proceedings
• Section: 69C; 40A(3)

Judgement Text

ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI .M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.929 TO 933/KOL/2011 ASSESSMENT YEAR :2002-03 TO 2006-07 SHRI.GIRIDHARIMAL BHANWARLAL, MAIN ROAD, POST DINHATA, DIST. COOCHBEHAR (W.B.) PIN- 736135 PAN: AACFG7878G V/S . INCOME TAX OFFICER, WARD NO.1, COOCHBEHAR, WEST BENGAL. /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI M.K.SARKAR, ADVOCATE & SHRI A.K MAHESWARI,FCA /BY RESPONDENT SHRI NILOY BARAM SOM, JCIT, SR.DR. /DATE OF HEARING 27.10.2015 /DATE OF PRONOUNCEMENT 30-10-2015 / O R D E R PER S.S.VISWANETHRA RAVI, JUDICIAL MEMBER:- THESE ARE APPEALS BY THE ASSESSEE AGAINST COMMON O RDER 29.3.2011 OF CIT(A) JAIPAIGURI, RELATING TO AY 2002-03 TO 2006-07. 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH THESE APPEALS ARISE FOR CONSIDERATION ARE IDENTICAL IN ALL THE ASSESSMENT YEARS 2002-03 T O 2006-07. FOR THE SAKE OF READY ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 2 REFERENCE, WE WILL REFER TO FACTS AS RECORDED IN TH E ASSESSMENT ORDER IN AY 2002-03. THE FACTS AS IT EMANATES FROM THE ORDER OF THE AO FOR AY 2002-03 ARE AS FOLLOWS: 2.1 THE ASSESSEE IS A PARTNERSHIP FIRM. THEY CARRY ON TRADING IN CLOTH ON RETAIL BASIS. THERE WAS A SEARCH AND SEIZURE OPERATION CA RRIED OUT BY THE REVENUE U/S.132 OF THE INCOME TAX ACT, 1961 (ACT) IN THE BUSINESS PREM ISES OF S.SAJJAN KUMAR SUMAN KUMAR TEXTILE COMPANY PVT.LTD. ( IN SHORT SSK TEXT ILE), OF VARANASHI, U.P. (HEREINAFTER REFERRED TO AS SSK TEXTILE). IN THE C OURSE OF SUCH SEARCH A CASH COLLECTION PRINTED BOOK CONTAINING CASH SALES STATED TO HAVE B EEN EFFECTED BY SSK TEXTILE WHEREIN THE CASH PAYMENTS EXCEEDED RS.20,000/- PER DAY WAS FOUND. THE SEIZED DOCUMENT, IN SO FAR AS IT RELATES TO THE ASSESSEE, CONTAINED CA SH SALES EXCEEDING RS.20,000/- ON A DAY EFFECTED BY THE SSK TEXTILE TO THE ASSESSEE. P AYMENT IN EXCESS OF RS.20,000 BY CASH ON A DAY FOR PURCHASES EFFECTED ATTRACTS DISAL LOWANCE OF 20% OF SUCH EXPENSES UNDER SEC.40A(3) OF THE ACT IN THE HANDS OF THE ASS ESSEE, IF SUCH PURCHASES ARE CLAIMED AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT . IN ORDER TO DISALLOW SUCH CASH PAYMENTS THE JDIT(INV.), VARANASHI WHO CONDUCTED SE ARCH IN THE CASE OF SSK TEXTILE FORWARDED THE SEIZED DOCUMENTS TO THE AO OF THE ASS ESSEE. BASED ON SUCH INFORMATION RECEIVED, THE AO INITIATED PROCEEDINGS U/S.147 OF T HE ACT IN THE CASE OF THE ASSESSEE. 3. THE ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE U/S.147 OF THE ACT IN THESE APPEALS, BESIDES CHALLENGING THE ADDITIONS MADE IN THE REASSESSMENT PROCEEDINGS. WE WILL DEAL WITH THE ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 3 MERITS OF THE ADDITION MADE FIRST AND IF NECESSARY, WE WILL DEAL WITH THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS. 4. IN THE REASSESSMENT PROCEEDINGS, THE AO REFERR ED TO THE RECEIPT OF THE INFORMATION FROM THE DDIT(INV.), VARNASHI ABOUT CAS H PURCHASES AND CALLED UPON THE ASSESSEE TO FURNISH COPIES OF PURCHASE BILLS, PURCH ASE ACCOUNT OF SSK TEXTILES AS APPEARING IN THE BOOKS OF THE ASSESSEE. THE ASSESS EE SUBMITTED A COPY OF THE PURCHASE LEDGER ACCOUNT OF SSK TEXTILES DULY CONFIR MED BY THEM TO THE EFFECT THAT PURCHASES BY THE ASSESSEE FROM SSK TEXTILES DURING THE PREVIOUS YEAR RELEVANT TO AY 2002-03 WAS A SUM OF RS.45,832/-. THE PURCHASES WE RE ON DIFFERENT DATES AND THE PAYMENTS FOR SUCH PURCHASES HAD BEEN MADE BY DEMAND DRAFTS. 5. THEREUPON THE AO ISSUED A NOTICE U/S.133(6) OF THE ACT DATED 17.8.2009 TO SSK TEXTILES TO SEND CONFIRMATION WITH LEDGER ACCOUNT O F SALES OF GOODS BY THEM TO THE ASSESSEE. IN COMPLIANCE TO THE SAID NOTICE SSK TEX TILES SENT CONFIRMATION LETTER DATED 2.9.2009 WITH SALES LEDGER ACCOUNT OF GOODS SOLD TO THE ASSESSEE WITH MODE OF PAYMENT. THE SAID CONFIRMATION ALSO REFLECTED THE SAME FIGURES AS GIVEN BY THE ASSESSEE VIZ., RS.45,832/- AND THE MODE OF PAYMENT BY DEMAND DRAFTS. 6. THE AO IN PAGE-3 OF PARA 2 OF THE ORDER OF ASS ESSMENT FOR AY 2002-03 AFTER RECEIPT OF SUCH REPLY FROM SSK TEXTILES COMES TO TH E CONCLUSION THAT BOTH THE ASSESSEE AND SSK TEXTILES WERE SUPPRESSING THE TRANSACTIONS AS EVIDENCED BY THE SEIZED DOCUMENTS IN THE COURSE OF SEARCH OF SSK TEXTILES. THE DETAILS OF THE CASH PURCHASES ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 4 STATED TO HAVE BEEN EFFECTED BY THE ASSESSEE FROM S SK TEXTILES FOR AY 2002-03 WERE AS FOLLOWS: 6.1 SUMMARY OF CASH PURCHASE EXCEEDING R S.20,000/- IN R/O GIRIDHARIMAL BHANWARLAL, DINHATA, COOCHBEHAR FROM S. SAJJAN KUMA R SUMAN KUMAR TEXTILE COMPANY PVT. LTD VARNASHI, U.P DURING SEVERAL DATES AS FOLLOWS:- F.Y 2001-02 AND A.Y 2002-03 SL. NO. NAME & ADDRESS OF THE ASSESSEE DATE OF PAYMENT SL NO & REFF. OF SEIZED MATERIAL AMOUNT (RS) ASSTT. YEAR 1. GIRIDHARILAL BHANWARMLAL, DINHATA, COOCHBEHAR 16.10.01 107. A-84, PG-113 1,10,000/- 2002-03 2. -DO- 20.11.01 108,A-4,PG- 113 1,00,000/- -DO- 3. -DO- 14.12.01 109 - DO- 1,25,000/- -DO- 4. -DO- 25.12.01 110 - DO- 75,000/- -DO- 5. -DO- 04.01.02 111 - DO- 1,00,000/- -DO- 6. -DO- 16.10.01 45, SSK-49 PG - 63 1,10,000/- -DO- 7. -DO- 20.11.01 46. - DO- 1,00,000/- - DO- 8. -DO- 14.12.01 47. - DO - 1,25,000/- - DO- 9. -DO- 25.12.01 48. - DO- 75,000/- - DO- 10. -DO- 04.01.02 49. DO- 1,00,000/- - DO- ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 5 ACCORDING TO THE AO THE ASSESSEE HAS EFFECTED PURCH ASES WORTH RS.10,20,000 FROM SSK TEXTILES AND SUCH EXPENDITURE HAS NOT BEEN RECO RDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND WAS THEREFORE LIABLE TO BE ADDED A S UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE AO WAS OF THE FURTHER VIEW THAT SINCE THE PURCHASES WERE EFFECTED BY MAKING PAYMENTS FOR THE SAME BY CASH IN EXCESS OF RS.20,000 PER DAY, 20% OF SUCH EXPENSES, ACCORDING TO THE PROVISIONS OF SEC.40A(3) OF THE ACT AS IT PREVAILED AT THE RELEVANT AY, HAD TO BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. THE FURTHER CONCLUSION OF THE AO WAS THAT THE GOODS PURCHASED NOT RECORDED IN THE BOOKS OF ACCOUNT HAD BEEN SOLD BY THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNTS AND THE ASSESSEE HAD EARNED A GROSS PROFIT OF 13.49% WHICH IS THE GROSS PROFIT MARGIN O F THE ASSESSEE AS PER BOOKS OF ACCOUNTS AND DECLARED IN THE REGULAR RETURNS FILED BY THE ASSESSEE FOR THE RELEVANT AY. THE AO ACCORDINGLY PROPOSED TO MAKE AN ADDITION TO THE TOTAL INCOME AS FOLLOWS: 1. UNDISCLOSED EXPENDITURE U/S.69C RS.10,20,000 2. UNDISCLOSED PROFIT FROM SALES OF UNDISCLOSED STOCK RS. 1,37,598 3. DISALLOWANCE OF 20% OF CASH PURCHASES U/S.40A(3) OF THE ACT RS.2,04,000 7. THE AO AGAIN CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE AFORESAID ADDITIONS BE NOT MADE. THE ASSESSEE IN REPLY REITE RATED ITS STAND THAT THERE WAS NO UNRECORDED PURCHASES AND THEREFORE THERE WAS NO QU ESTION OF MAKING ANY ADDITION. THE AO THEREUPON WROTE LETTERS TO THE DCIT CENTRAL CIRCLE, VARANASHI DATED ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 6 24.11.2009 CALLING FOR ANY CORROBORATIVE EVIDENCE TO SHOW THAT THE UNRECORDED SALES RECORDED IN THE SEIZED DOCUMENT IN THE SEARCH OF SS K TEXTILES WAS IN FACT TRUE AND THAT IT WAS THE ASSESSEE WHO PURCHASED GOODS FROM SSK TE XTILES AS RECORDED IN THE SEIZED DOCUMENT. THE DCIT, CENTRAL CIRCLE, VARANASHI BY H IS LETTER DATED 3.12.2009 SENT A COLLECTION BOOK OF CASH SALES WHICH WAS ALSO SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF SSK TEXTILES. ACCORDING TO THE AO ON A COM PARISON OF THIS COLLECTION REGISTER WITH THE RECORD OF CASH SALES SEIZED, IT WAS EVIDEN T THAT THE ASSESSEE HAD ALSO MADE CASH PAYMENTS FOR PURCHASES FROM SSK TEXTILES AND T HAT THE BILL NUMBER AS WELL AS DATES, AS FOUND IN THE SEIZED CASH SALES RECORDING AND THE COLLECTION BOOK OF CASH SALES TALLIED 8. BASED ON THE AFORESAID DEVELOPMENT, THE AO AGA IN SENT A NOTICE U/S.133(6) OF THE ACT TO SSK TEXTILES DATED 19.11.2009 TO SEND CO RRECT INFORMATION REGARDING UNRECORDED SALES. SSK TEXTILES SENT A REPLY DATED 16.12.2009 WHEREIN THEY MENTIONED THAT THE MATTER WAS OLD AND THE DOCUMENTS WERE SEIZ ED BY THE DEPARTMENT AND NOT IN THEIR CUSTODY AND IN THE ABSENCE OF NECESSARY RECOR DS IT WAS UNABLE TO PROVIDE ANY DETAILS AS WAS DESIRED IN THE NOTICE U/S.133(6) OF THE ACT. THE AO AGAIN SENT A REMAINDER LETTER DATED 18.12.2009 TO SSK TEXTILES. THE SSK TEXTILES SENT ANOTHER REPLY DATED 24.12.2009 REITERATING THEIR INABILITY TO PRO VIDE ANY INFORMATION. 9. IN THE LIGHT OF THE ABOVE EVIDENCE BEFORE THE AO, THE AO CAME TO THE CONCLUSION THAT IN THE LATTER CORRESPONDENCE SSK TEXTILES DID NOT CONFIRM THE PURCHASES BY THE ASSESSEE TO THEM AS CORRECT AS PER THE BOOKS OF ASS ESSEE AND IN THE CIRCUMSTANCES THE ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 7 RECORDING IN THE SEIZED DOCUMENT HAVE TO BE CONSTRU ED AS UNEXPLAINED PURCHASES BY THE ASSESSEE. THE AO ACCORDINGLY DREW THE FOLLOWING CO NCLUSIONS. THE ASSESSEE HAS EFFECTED PURCHASES WORTH RS.10,20,000 FROM SSK TEXT ILES AND SUCH EXPENDITURE HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS OF THE A SSESSEE AND WAS THEREFORE LIABLE TO BE ADDED AS UNEXPLAINED EXPENDITURE INCURRED BY T HE ASSESSEE NOT RECORDED IN THE BOOKS OF ACCOUNTS. SINCE THE PURCHASES WERE EFFECT ED BY MAKING PAYMENTS FOR THE SAME BY CASH IN EXCESS OF RS.20,000 PER DAY, 20% OF SUCH EXPENSES, ACCORDING TO THE PROVISIONS OF SEC.40A(3) OF THE ACT AS IT PREVAILED AT THE RELEVANT AY, HAD TO BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. THE FURTHER CONCLUSION OF THE AO WAS THAT THE GOODS PURCHASED NOT RECORDED IN THE BOOKS OF ACCOUNT HAD BEEN SOLD BY THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNTS AND THE ASSESSEE HAD EARNED A 13.49% WHICH IS THE GROSS PROFIT MARGIN OF THE ASSE SSEE AS PER BOOKS OF ACCOUNTS AND DECLARED IN THE REGULAR RETURNS FILED BY THE ASSESS EE FOR THE RELEVANT AY. THE AO ACCORDINGLY ADDED THE FOLLOWING SUMS TO THE TOTAL I NCOME OF THE ASSESSEE: 1. UNDISCLOSED EXPENDITURE U/S.69C RS.10,20,000 2. UNDISCLOSED PROFIT FROM SALES OF UNDISCLOSED STOCK RS. 1,37,598 3. DISALLOWANCE OF 20% OF CASH PURCHASES U/S.40A(3) OF THE ACT RS.2,04,000 ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 8 10. THE QUANTUM OF ADDITION MADE IN AYS 2002-03 TO 2006-07 WERE AS FOLLOWS: ADDITIONS MADE ASST YRS U/S. 69C U/S. 40A(3) G.P RATE APPLIED 2002-03 RS.10,20,000/- RS.2,04,000/- RS.1,37,598/- 2003-04 RS.14,30,000/- RS.2,86,066/- RS.1,82,182/- 2004-05 RS.7,40,000/- RS.1,48,000/- RS. 60,310/- 2005-06 RS.17,58,280/- RS.3,52,656/- RS.2,19,433/- 2006-07 RS.9,68,280/- RS.1,93,656/- RS.1,32,460/- 11. ON APPEAL BY THE ASSESSEE, THE CIT(A) CONFIRME D THE ORDER OF THE AO. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT THE SEIZED DOCUM ENTS BY MISTAKE CONTAINS A REFERENCE TO THE NAME OF THE ASSESSEES FIRM AND TH AT THE REAL PERSON TO WHOM REFERENCE WAS MADE IN THE SEIZED DOCUMENT WAS A PRO PRIETORSHIP CONCERN OF ONE INDIVIDUAL AT DINHATA CARRYING ON BUSINESS UNDER TH E NAME AND STYLE OF GIRDHARI LAL & CO. THE SAID BUSINESS ENTITY ALSO CONFIRMED THE S TAND OF THE ASSESSEE BUT THE CIT(A) REFUSED TO BELIEVE THE STAND OF THE ASSESSEE IN THI S REGARD ON THE BASIS THAT SUCH A STAND WAS NOT TAKEN BEFORE THE AO AND IT WAS AN AFTERTHOU GHT. 12. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE SUBMISSION OF THE LEAR NED COUNSEL FOR THE ASSESSEE WHO SUBMITTED THAT IT IS A SETTLED PRINCIPLE OF LAW T HAT SURMISES, CONJECTURES OR SUSPICION CANNOT REPLACE HARD EVIDENCE. THERE WAS NO EVIDENCE BEFORE THE ASSESSING OFFICER OR LD.CIT(A) THAT THE ASSESSEE HAD ACTUALLY MADE CAS H PURCHASE FROM S.S. K TEXTILES AT ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 9 ANY POINT OF TIME AND EVEN IF THERE IS EVIDENCE TO THAT EFFECT, NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAS BROUGHT SUCH EVIDENCE ON RECORD EXCEPT MENTIONING ENORMOUS ENTRY IN A CASH COLLECTION BOOK WRITTEN BY A THIRD PARTY WHICH CANNOT BE SAID TO CONSTITUTE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AS PER THE LAWS OF ACCOUNTING. EVEN OTHERWISE, ENTRY IN A THIRD PARTY S ACCOUNT WRONGLY OR OTHERWISE REGISTERED, UNLESS CORROBORATED BY CIRCUMSTANTIAL EVIDENCE CANNOT BIND THE PRESENT ASSESSEE TO THE CONSEQUENCES OF SUCH ENTRIES. THE ASSESSING OFFICER HAS IN A STATE OF FICTION MADE VARIOUS PRESUMPTION AND THE LEARNED CI T(A) ALSO WITHOUT JUDICIOUS APPLICATION OF MIND ACTED ON THOSE PRESUMPTION IN T OTAL DEFIANCE OF FACTS ON RECORD. 12.1 RELIANCE WAS PLACED ON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF CBI VS. V.C SHUKLA & OTHERS, WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT TO MAKE AN ENTRY RELEVANT THEREUNDER IT MUST BE SHOWN THAT IT HAS BEEN MADE IN A BOOK, THAT BOOK IS A BOOK OF ACCOUNT AND THAT BOOK OF ACC OUNT HAS BEEN REGULARLY KEPT IN THE COURSE OF BUSINESS. FROM THE ABOVE SECTION IT IS A LSO MANIFEST THAT EVEN IF THE ABOVE REQUIREMENTS ARE FULFILLED AND THE ENTRY BECOMES AD MISSIBLE AS RELEVANT EVIDENCE, STILL, THE STATEMENT MADE THEREIN SHALL NOT ALONE BE SUFFI CIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY. 12.2 BESIDES THE ABOVE, SUBMISSIONS WERE MADE ON VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS AND THE PLEA OF MISTAKEN I DENTITY ALSO. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 10 13. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. THE SEQUENCE OF EVENTS AND THE EVIDENCE ON RECORD SHOWS THAT IN THE REASSESSMENT PROCEEDINGS, THE AO REFERRED TO THE RECEIPT OF THE INFORMATION FROM THE DDIT(INV.), VARNASI ABOUT CASH PURCHASES AND CALLED UPON THE AS SESSEE TO FURNISH COPIES OF PURCHASE BILLS, PURCHASE ACCOUNT OF SSK TEXTILES AS APPEARING IN THE BOOKS OF THE ASSESSEE. THE ASSESSEE SUBMITTED A COPY OF THE PUR CHASE LEDGER ACCOUNT OF SSK TEXTILES DULY CONFIRMED BY THEM TO THE EFFECT THAT PURCHASES BY THE ASSESSEE FROM SSK TEXTILES DURING THE PREVIOUS YEAR RELEVANT TO AY 20 02-03 WAS A SUM OF RS.45,832/-. THE PURCHASES WERE ON DIFFERENT DATES AND THE PAYM ENTS FOR SUCH PURCHASES HAD BEEN MADE BY DEMAND DRAFTS. THEREUPON THE AO ISSUED A N OTICE U/S.133(6) OF THE ACT DATED 17.8.2009 TO SSK TEXTILES TO SEND CONFIRMATIO N WITH LEDGER ACCOUNT OF SALES OF GOODS BY THEM TO THE ASSESSEE. IN COMPLIANCE TO TH E SAID NOTICE SSK TEXTILES SENT CONFIRMATION LETTER DATED 2.9.2009 WITH SALES LEDGE R ACCOUNT OF GOODS SOLD TO THE ASSESSEE WITH MODE OF PAYMENT. THE SAME ALSO REFLE CTED THE SAME FIGURES AS GIVEN BY THE ASSESSEE VIZ., RS.45,832/-. AT THIS STAGE THER E WAS NO EVIDENCE BEFORE THE AO TO COME TO A CONCLUSION THAT THE SEIZED DOCUMENT REFER S TO THE ASSESSEE OR THAT IT WAS THE UNRECORDED PURCHASES MADE BY THE ASSESSEE. REALIZI NG THE LACK OF EVIDENCE TO MAKE ANY ADDITION IN THE HANDS OF THE ASSESSEE, THE AO A GAIN CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE AFORESAID ADDITIONS BE NOT MADE. THE ASSESSEE IN REPLY REITERATED ITS STAND THAT THERE WAS NO UNRECORDED P URCHASES AND THEREFORE THERE WAS NO QUESTION OF MAKING ANY ADDITION. THE AO THEREUPON WROTE LETTERS TO THE DCIT CENTRAL CIRCLE, VARANASI DATED 24.11.2009 CALLING FOR ANY CORROBORATIVE EVIDENCE TO SHOW THAT ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 11 THE UNRECORDED SALES RECORDED IN THE SEIZED DOCUMEN T IN THE SEARCH OF SSK TEXTILES WAS IN FACT TRUE AND THAT IT WAS THE ASSESSEE WHO P URCHASED GOODS FROM SSK TEXTILES AS RECORDED IN THE SEIZED DOCUMENT. THE DCIT, CENT RAL CIRCLE, VARANASI BY HIS LETTER DATED 3.12.2009 SENT A COLLECTION BOOK OF CASH SALE S WHICH WAS ALSO SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF SSK TEXTILES. ACCO RDING TO THE AO ON A COMPARISON OF THIS COLLECTION REGISTER WITH THE RECORD OF CASH SA LES SEIZED, IT WAS EVIDENT THAT THE ASSESSEE HAD ALSO MADE CASH PAYMENTS FOR PURCHASES FROM SSK TEXTILES AND THAT THE BILL NUMBER AS WELL AS DATES, AS FOUND IN THE SEIZE D CASH SALES RECORDING AND THE COLLECTION BOOK OF CASH SALES TALLIED 14. BASED ON THE AFORESAID DEVELOPMENT, THE AO AGA IN SENT A NOTICE U/S.133(6) OF THE ACT TO SSK TEXTILES DATED 19.11.2009 TO SEND CORREC T INFORMATION REGARDING UNRECORDED SALES. SSK TEXTILES SENT A REPLY DATED 16.12.2009 WHEREIN THEY MENTIONED THAT THE MATTER WAS OLD AND THE DOCUMENTS WERE SEIZ ED BY THE DEPARTMENT AND NOT IN THEIR CUSTODY AND IN THE ABSENCE OF NECESSARY RECOR DS IT WAS UNABLE TO PROVIDE ANY DETAILS AS WAS DESIRED IN THE NOTICE U/S.133(6) OF THE ACT. THE AO AGAIN SENT A REMAINDER LETTER DATED 18.12.2009 TO SSK TEXTILES. THE SSK TEXTILES SENT ANOTHER REPLY DATED 24.12.2009 REITERATING THEIR INABILITY TO PROVIDE ANY INFORMATION. 15. IN THE LIGHT OF THE ABOVE EVIDENCE BEFORE THE AO IS IT POSSIBLE TO COME TO A CONCLUSION THAT THE SEIZED DOCUMENT (SEIZED FROM A THIRD PARTY) RECORDS PURCHASES EFFECTED BY THE ASSESSEE ?. IN OUR OPINION SUCH A CONCLUSION CANNOT BE REACHED. THERE IS ABSOLUTELY NO MATERIAL TO LINK THE ASSESSEE AND THE SEIZED DOCUMENT. SSK TEXTILES ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 12 CONFIRMED THE BALANCE AS RECORDED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE. THEY HAVE AT NO POINT OF TIME ADMITTED THAT THE DOCUMENT SEIZ ED FROM THEM RECORDS PURCHASES BY THE ASSESSEE FOR WHICH THE ASSESSEE MADE CASH PAYME NTS. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE CONCLUSION DR AWN BY THE AO ARE PURELY BASED ON SURMISES AND CONJECTURES AND NOT BASED ON LEGALLY A CCEPTABLE EVIDENCE. 16. WE THEREFORE HOLD THAT THERE IS NO MATERIAL ON RECORD TO THE COME TO THE CONCLUSION THAT THE ASSESSEE MADE PURCHASES FROM SSK TEXTILES AS RECORDED IN THE SEIZED DOCUMENT AND THAT THE ASSESSEE HAD MADE PAYMENTS TH EREFOR IN CASH VIOLATING THE PROVISIONS OF SEC.40A(3) OF THE ACT. THE CONSEQUEN T PRESUMPTION OF SALE OF GOODS SO PURCHASED AND ADDITION OF GROSS PROFIT ON SUCH SALE S IS ALSO NOT SUSTAINABLE. WE THEREFORE DIRECT THAT THE ADDITIONS MADE IN ALL THE AYS BE DELETED. IN VIEW OF THE ABOVE CONCLUSION, WE DO NOT DEEM IT NECESSARY TO DEAL WIT H THE OTHER CONTENTIONS PUT FORTH BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US. 17. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 30 /10/2015 SD/- SD/- (M.BALAGANESH) (S.S.VISWANETHRA RAVI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, - 30 /10/2015 **PP/SPS ITA NOS. 929 TO 933/KOL/11--B-JM GIRIDHARIMAL BHANWARLAL 13 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- 2. / RESPONDENT- 3. ! $ / CONCERNED CIT KOLKATA 4. $ - / CIT (A) KOLKATA 5. % ((! , ! , / DR, ITAT, KOLKATA 6. * / GUARD FILE. BY ORDER/ , / ! ,