SHRI OMPRAKASH DHANWANI, Indore V. THE ACIT-2(1), Indore

ITSSA 242/IND/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1983 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY
• Assessee Lawyers: S S DESHPANDE
• Keywords: Gross profit estimation; Unexplained cash credit; Rejection of books of accounts; Unexplained investment; Unexplained expenditure; Gift; Business income; Income from undisclosed sources; Loose papers; Document seized; Transactions in derivatives; Permanent establishment; Documents seized
• Section: 69C; 153A; 133(6); 132; 68

Judgement Text

ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS)A NOS. 241 TO 243/IND/2015 A.YS.2009-10 TO 2011-12 OMPRAKASH DHANWANI INDORE PAN AEZPD 9192B ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 2(1) INDORE ::: RESPONDENT IT(SS)A NOS. 254 TO 256/IND/2015 A.YS.2009-10 TO 2011-12 ASSTT.COMMR. OF INCOME TAX 2(1) INDORE ::: APPELLANT VS OMPRAKASH DHANWANI INDORE ::: RESPONDENT ASSESSEE BY SHRI S.S. DESHPANDE REVENUE BY SHRI RAJEEV VARSHNEY DATE OF HEARING 30.3.2016 DATE OF PRONOUNCEMENT 17.5.2016 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 2 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE ASSESSEE AND THE REVENUE EMANATE FROM DIFFERENT ORDERS OF THE LEARNED CIT(A)-I, INDORE, ALL DATED 27.2.2015. SINCE THE ISSU ES INVOLVED IN THESE APPEALS ARE COMMON, THEREFORE, WE TE ND TO DISPOSE OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN IT(SS) A NO.241/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THE ORDER PASSED BY THE LD AO WHICH WAS RECEIVED BY THE ASSESSEE ON 02/04/2013 IS WITHIN THE TIME AND IS AS PER LAW. 2. THE ADDITIONS MAINTAINED ON ACCOUNT OF ESTIMATES OF G.P. AND ON ACCOUNT OF THE ENTRIES APPEARING IN THE BOOKS OF ACCOUNTS WHICH ARE ALREADY DISCLOSED IN TH E BALANCE SHEET FILED ALONG WITH THE ORIGINAL RETURNS , ARE BAD IN LAW SINCE NO INCRIMINATING MATERIAL HAS BEEN FOUND. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 3 3. THE LD CIT(A) HAS ERRED IN UPHOLDING THE REJECTION O F BOOKS OF ACCOUNTS ON THE GROUNDS THAT THE DEPOSITS IN THE BANK ARE NOT COMMENSURATE WITH THE SALE RECEIPT S ON A PARTICULAR DAY AND RELYING ON THE PAPERS PERTA INING TO THE A.Y. 2010-11 & 2011-12 AND NOT TAKING ANY COGNIZANCE OF THE FACT THAT ALL ENTRIES IN THE LOOS E PAPER WERE COMPLETELY EXPLAINED. 3.1 THE REJECTION OF BOOKS OF ACCOUNTS ON ABOVE GROUNDS ARE TOTALLY ILLEGAL AND BAD IN LAW IN THE ABSENCE OF ANY DEFECT FOUND IN THE BOOKS OF ACCOUNTS SPECIALLY IN THE CASH BOOK WHERE ALL TRANSACTIONS INCLUDING THE CASH SALES ARE RECORDED. THE ASSESSEE HAS MAINTAINED DAY TO DAY STOCK REGISTERS WHICH HAS BEEN VERIFIED BY THE LD AO AND THE LD CIT(A). 4. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THERE IS A HUGE SUPPRESSION OF CASH SALES AND AS SUCH ENHANCIN G THE SALES AT 17.5% AND ESTIMATING THE G.P. AT THE R ATE OF 1.25% IN GOLD TRANSACTION. ALL SALES AND PURCHASES ARE FULLY VOUCHED AND THE QUANTITATIVE DETAILS HAVE BEE N MAINTAINED BY THE ASSESSEE. THE LD CIT(A) FURTHER ER RED IN MAINTAINING THE ADDITION IN THE SILVER ACCOUNT B Y ESTIMATING THE G.P. 4.1 THE G.P. ADDITION MAINTAINED AT RS 1,77,80,700/- MAY PLEASE BE DELETED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 4 5. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE SILVER SEIZED AT RS 2,02,47,590/- BY THE POLICE DEPARTMENT IS AN UNACCOUNTED INVESTMENT. IT WAS PROVED BEFORE THE LOWER AUTHORITIES THAT THE SEIZED SILVER WAS SOLD BY A REPUTED PARTY WITH THE BILL OF EXCHAN GE OF THE CUSTOMS DEPARTMENT AND WITH THE BAR NUMBERS. THUS IT CANNOT BE TREATED AS AN UNACCOUNTED INVESTMENT. THE CONCLUSION THAT IT IS AN UNACCOUNTE D INVESTMENT IS BAD IN LAW AND DESERVES TO BE DELETED . 6. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE PURCHASES MADE FROM M/S HYUNDAI EXPORTS AT RS 17,85,88,277/- ARE UNEXPLAINED PURCHASES. THE REMAR K ABOUT THE SEAL OR ABOUT THE SIGNATURES ARE NOT PROP ER AND COULD NOT BE SATISFACTORILY EXPLAINED IS TOTALL Y CONTRARY TO THE FACTS SINCE THE ORIGINAL BILLS AND THE CONFIRMATION OF ACCOUNTS WERE FILED BEFORE THE LOWE R AUTHORITIES AND THE PURCHASES WERE DULY ENTERED IN THE STOCK REGISTER. 7. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 50,00,000/- U/S 68 FROM M/S PRAMILA INVESTORS & FINANCE LTD. WHEN ALL NECESSARY PAPERS WERE FILED BEFORE THE LOWER AUTHORITIES AND THE TRANSACTION WA S MADE THROUGH BANKING CHANNEL. 8. THE ASSESSEE CRAVES TO ALTER, AMEND, ADD OR DELETE ANY OF THE GROUNDS OF APPEAL. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 5 IN IT(SS) A NO.242/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THE ORDER PASSED BY THE LD AO WHICH WAS RECEIVED BY THE ASSESSEE ON 02/04/2013 IS WITHIN THE TIME AND IS AS PER LAW. 2. THE ADDITIONS MAINTAINED ON ACCOUNT OF ESTIMATES OF G.P. AND ON ACCOUNT OF THE ENTRIES APPEARING IN THE BOOKS OF ACCOUNTS WHICH ARE ALREADY DISCLOSED IN TH E BALANCE SHEET FILED ALONG WITH THE ORIGINAL RETURNS , ARE BAD IN LAW SINCE NO INCRIMINATING MATERIAL HAS BEEN FOUND. 3. THE LD CIT(A) HAS ERRED IN UPHOLDING THE REJECTION O F BOOKS OF ACCOUNTS ON THE GROUNDS THAT THE DEPOSITS IN THE BANK ARE NOT COMMENSURATE WITH THE SALE RECEIPT S ON A PARTICULAR DAY AND RELYING ON THE PAPERS PERTA INING TO THE A.Y. 2011-12 AND NOT TAKING ANY COGNIZANCE O F THE FACT THAT ALL ENTRIES IN THE LOOSE PAPER WERE COMPLETELY EXPLAINED. 3.1 THE REJECTION OF BOOKS OF ACCOUNTS ON ABOVE GROUNDS ARE TOTALLY ILLEGAL AND BAD IN LAW IN THE ABSENCE O F ANY DEFECT FOUND IN THE BOOKS OF ACCOUNTS SPECIALLY IN THE CASH BOOK WHERE ALL TRANSACTIONS INCLUDING THE CASH SALES ARE RECORDED. THE ASSESSEE HAS MAINTAINED DAY TO DAY STOCK REGISTERS WHICH HAS BEE N VERIFIED BY THE LD AO AND THE LD CIT(A). ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 6 4. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THERE IS A HUGE SUPPRESSION OF CASH SALES AND AS SUCH ENHANCIN G THE SALES AT 17.5% AND ESTIMATING THE G.P. AT THE R ATE OF 1.25% IN GOLD TRANSACTION. ALL SALES AND PURCHASES ARE FULLY VOUCHED AND THE QUANTITATIVE DETAILS HAVE BEE N MAINTAINED BY THE ASSESSEE. THE LD CIT(A) FURTHER ER RED IN MAINTAINING THE ADDITION IN THE SILVER ACCOUNT B Y ESTIMATING THE G.P. 4.1 THE G.P. ADDITION MAINTAINED AT RS 7,79,54,342/- MAY PLEASE BE DELETED. 5. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ARBITRATION WAS CORRECT AND THAT THE ASSESSEE HAS M ADE THE PAYMENT OF 5 CRORES TO LAL SAI ESTATES. THE LD CIT(A) FURTHER ERRED IN OBSERVING THAT EVEN IF THE IDA ACQUIRES THE LAND THE ASSESSEE WOULD BE ENTITLED TO RECEIVE HUGE COMPENSATION. IT WAS PROVED THAT THE L AND IN QUESTION WAS UNDER ACQUISITIOIN OF IDA AND TILL TODAY THE SAME HAS NOT BEEN RELEASED. THE OBSERVATIONS OF THE LD CIT(A) IN PARA 15 TO 15.4 DESERVES TO BE DELETED. 6. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 3,00,00,000/- U/S 68 IN THE NAME OF M/S SAMBHAV EXPORTS WHEN ALL NECESSARY PAPERS WERE FILED BEFORE THE LOWER AUTHORITIES AND THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL. THE DISALLOWANCE OF INTERE ST OF RS 10,71,780/- MAY PLEASE BE DELETED. 7. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 3,00,00,000/- U/S 68 IN THE NAME OF M/S KHUSHI EXPORTS WHEN ALL NECESSARY PAPERS WERE FILED BEFORE THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 7 LOWER AUTHORITIES AND THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL. THE DISALLOWANCE OF INTERE ST OF RS 14,46,575/- MAY PLEASE BE DELETED. 8. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 1,00,00,000/- U/S 68 IN THE NAME OF M/S VINAY JEMS WHEN ALL NECESSARY PAPERS WERE FILED BEFORE TH E LOWER AUTHORITIES AND THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL. THE DISALLOWANCE OF INTERE ST OF RS 7,59,452/- MAY PLEASE BE DELETED. 9. THE ASSESSEE CRAVES TO ALTER, AMEND, ADD OR DELETE ANY OF THE GROUNDS OF APPEAL. IN IT(SS) A NO.243/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THE ORDER PASSED BY THE LD AO WHICH WAS RECEIVED BY THE ASSESSEE ON 02/04/2013 IS WITHIN THE TIME AND IS AS PER LAW. 2. THE LD CIT(A) HAS ERRED IN UPHOLDING THE REJECTION O F BOOKS OF ACCOUNTS ON THE GROUNDS THAT THE DEPOSITS IN THE BANK ARE NOT COMMENSURATE WITH THE SALE RECEIPTS ON A PARTICULAR DAY AND RELYING ON THE LOO SE PAPERS WITHOUT TAKING ANY COGNIZANCE OF THE FACT THAT ALL ENTRIES IN THE LOOSE PAPER WERE COMPLETELY EXPLAINED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 8 2.1 THE REJECTION OF BOOKS OF ACCOUNTS ON ABOVE GROUNDS ARE TOTALLY ILLEGAL AND BAD IN LAW IN THE ABSENCE OF ANY DEFECT FOUND IN THE BOOKS OF ACCOUNT S SPECIALLY IN THE CASH BOOK WHERE ALL TRANSACTIONS INCLUDING THE CASH SALES ARE RECORDED. THE ASSESSEE HAS MAINTAINED DAY TO DAY STOCK REGISTERS WHICH HAS BEEN VERIFIED BY THE LD AO AND THE LD CIT(A). 3. THE LD CIT(A) HAS ERRED IN OBSERVING THAT THERE IS A HUGE SUPPRESSION OF CASH SALES AND AS SUCH ENHANCING THE SALES AT 17.5% AND ESTIMATING THE G.P. AT THE RATE OF 1.25% IN GOLD TRANSACTION. ALL SALES AND PURCHASES ARE FULLY VOUCHED AND THE QUANTITATIVE DETAILS HAVE BEEN MAINTAINED BY THE ASSESSEE. THE LD CIT(A) FURTHER ERRED IN MAINTAINING THE ADDITION IN THE SILVER ACCOUNT BY ESTIMATING THE G.P. 3.1 THE G.P. ADDITION MAINTAINED AT RS 14,14,94,803/- MAY PLEASE BE DELETED. 4. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ARBITRATION WAS CORRECT AND THAT THE ASSESSEE HAS MADE THE PAYMENT OF 5 CRORES TO LAL SAI ESTATES. THE LD CIT(A) FURTHER ERRED IN OBSERVING THAT EVEN IF THE IDA ACQUIRES THE LAND THE ASSESSEE WOULD BE ENTITLED TO RECEIVE HUGE COMPENSATION. IT WAS PROVED THAT THE LAND IN QUESTION WAS UNDER ACQUISITIOIN OF IDA AND TILL TODAY THE SAME HAS NOT BEEN RELEASED. THE OBSERVATIONS OF THE LD CIT(A) IN PARA 15 TO 15.4 DESERVES TO BE DELETED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 9 5. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE CASH FOUND AT RS 84,84,900/- IS UNACCOUNTED. THE CASH BOOK OF THE ASSESSEE SHOWED A CASH BALANCE OF RS 68,86,569/- AND AS SUCH THE ADDITION OF THE WHOLE AMOUNT IS BAD IN LAW. 6. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ENTRIES ON THE LOOSE PAPER LPS1 PAGE 34 OF RS 16,60,044/-, 45,30,200/-, 3,00,000/-, 4,79,215/- AND RS 1,24,456/- ARE NOT REFLECTED IN THE BOOKS. 7. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 6,07,51,227/- AS THE INCOME OF MCX TRANSACTIONS NOT REFLECTED IN THE BOOKS. IT WAS PROVED BEFORE THE LD CIT(A) AND BEFORE THE LD AO THAT ALL ENTRIES IN THE LOOSE PAPERS WERE TALLIED W ITH THE MCX PORTER AND THE RECOGNIZED STOCK EXCHANGE. THUS THE ADDITIONS MADE ARE BAD IN LAW. 8. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ENTRIES ON THE LOOSE PAPER LPS5 PAGE 108 & 109 OF RS20,27,500/-, 2,34,64,832/-, 20,22,954/- ARE UNRECORDED TRANSACTIONS WHEN ALL THE ENTRIES WERE EXPLAINED. THIS IS MERELY A SAUDA BAHI AND THE SAUDAS MATURED WERE ENTERED IN THE BOOKS. 9. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ENTRIES ON THE LOOSE PAPER LPS5 PAGE 55 OF RS. 27,69,710/-, 1,12,60,200/-, 5,00,000/-, 5,00,000/- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 10 , 79,40,236/- ARE UNRECORDED TRANSACTIONS WHEN ALL THE ENTRIES WERE EXPLAINED. 10. THE LD CIT(A) HAS ERRED IN MAKING A REMARK THAT THE ENTRIES ON THE LOOSE PAPER LPS2 PAGE 5 & 6 OF RS 6,47,000/- BELONG TO THE ASSESSEE AND IT IS THE INCOME. 11. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 1,00,00,000/- U/S 68 IN THE NAME OF SANSKAR EXIMES PVT. LTD. WHEN ALL NECESSARY PAPERS WERE FILED BEFORE THE LOWER AUTHORITIES AND THE TRANSACTION WAS MADE THROUGH BANKING CHANNEL. THE DISALLOWANCE OF INTEREST OF RS 7,15,397/- MAY PLEASE BE DELETED. 12. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 17,99,014/- AND RS 12,00,000/- BEING THE INTEREST PAID ON THE UNSECURED LOANS RECEIVED FROM KHUSHI EXPORTS AND VINAY GEMS WHICH WERE ADDED U/S 68 IN THE EARLIER YEAR. 13. THE LD CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS 2,74,06,204/- ON THE BASIS OF THE SEIZED PAPER LPS2 PAGE 52 WHICH WAS TAKEN OUT FROM THE INTERNET. THE CONFIRMATION FROM BALKRISHNA PARASMAL WAS FILED THAT HE HAS TAKEN OVER THE FIRM M/S JITESH INTERNATIONAL. THE SAID PAPER WAS FOUND ON E-MAIL WHICH DOES NOT PROVE THAT THE TRANSACTION BELONGS TO THE ASSESSEE. THE ADDITION MADE IS UNWARRANTED FOR AND MAY PLEASE BE DELETED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 11 14. THE ASSESSEE HAS OFFERED THE ADDITIONAL INCOME OF RS 7,28,25,000/- IN HIS RETURN. THE ADDITIONS MAINTAINED UPTO THIS AMOUNT IS ALREADY COVERED IN THE SAID SURRENDER. 15. THE TELESCOPIC BENEFIT MAY PLEASE BE ALLOWED IN RESPECT OF THE ADDITIONS MAINTAINED IN THE EARLIER YEAR WHEN SUCH AN AMOUNT WAS AVAILABLE TO THE ASSESSEE. 16. THE ASSESSEE CRAVES TO ALTER, AMEND, ADD OR DELETE ANY OF THE GROUNDS OF APPEAL. 3. IN IT(SS) A NO.254/IND/2015 THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS (I) WHILE ALTERING THE ADDITION OF RS.4,15,97,088/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES OF GOLD BAR MADE BY THE A.O., HAS ERRED IN FACT IN HOLDING THAT THE A.O. MADE MISTAKES IN CONVERSION OF 1 KG GOLD BAR IN 100 GRAMS OF GOLD BAR DURING ESTIMATION OF GROSS PROFIT ON SALE OF GOLD BAR. WHEREAS, NOWHERE IN THE ASSESSMENT ORDER, THE A.O. MENTIONED SUCH CONVERSION, BUT ONLY TALKED ABOUT 100 GRAMS OUT OF 1 KG GOLD BAR. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 12 (II) ERRED IN GIVING THE AFORESAID RELIEF. THE AFORESAID ISSUE WAS NOT CLARIFIED BY THE A.O. IN THE REMAND REPORT. AS SUCH, THE REMAND REPORT WAS INCOMPLETE AND DEFECTIVE. INSTEAD OF CALLING FOR THE COMPLETE REMAND REPORT, THE CIT(A) RELIED ON THE INCOMPLETE AND DEFECTIVE REMAND REPORT AND HAS GIVEN RELIEF TO THE ASSESSEE. THIS TANTAMOUNT TO PERVERSE FINDING OF FACTS, SINCE THE REVENUES VERSION ON THE MATTER WAS NEITHER OBTAINED NOR CONSIDERED. (III) WHILE ALTERING THE ADDITION OF RS.4,15,97,088/- AND RS.2,59,9,535/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES OF GOLD AND SILVER BAR RESPECTIVELY MADE BY THE A.O. ERRED IN NOT GIVING ANY CONTRARY FINDING OR ANY CONTRARY ENQUIRY AGAINST THE A.O.S FINDINGS ON THE BASIS OF WHICH THE A.O. TOOK THE GROSS PROFIT RATE FOR GOLD AND SILVER BAR RESPECTIVELY. (IV) ERRED IN NOT ACCEPTING THE RATES TAKEN BY THE A.O. EVEN AFTER CONFIRMING THE FINDINGS RELATED TO LARGE UNACCOUNTED CASH SALES. (V) ERRED IN GIVING THE AFORESAID RELIEFS. WHEN INCRIMINATING MATERIALS WERE FOUND AND ADMITTED TO BE CREDIBLE AND AUTHENTIC BY THE CIT(A) AND WHEN REJECTION OF BOOKS WAS UPHELD BY THE CIT(A); THE FINDINGS ON THE BASIS OF THE SAME SHOULD NOT HAVE BEEN SUBSTITUTED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 13 BY THE ESTIMATION OF GROSS PROFIT, THAT TOO ON THE BASIS OF THE ASSESSEES ACCOUNTS WHICH HAVE BEEN PROVED TO BE UNAUTHENTIC AND ETHEREAL. THIS ACT OF THE CIT(A) DEFIES LOGIC AND CONTRADICTS HIS OWN STAND. (VI) ERRED IN FACT AND LAW IN DELETING THE ADDITION OF RS.2,002,47,590/- MADE ON ACCOUNT OF UNACCOUNTED STOCK WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE UNACCOUNTED STOCK WAS AN APPLICATION OF UNACCOUNTED GROSS PROFIT, EVEN AFTER CATEGORICALLY ADMITTING THAT THE SEIZED STOCK OF SILVER WAS UNACCOUNTED STOCK. (VII) ERRED IN FACT AND LAW IN DELETING THE ADDITION OF RS.45,00,000/- MADE ON ACCOUNT OF UNEXPLAINED CREDIT U/S 68, BY NOT PROVIDING THE BASIS FOR HIS CONCLUSION OR CONTRARY FINDING TO THE REASONS GIVEN IN THE ASSESSMENT ORDER. (VIII) ERRED IN FACT AND LAW IN DELETING THE ADDITION OF RS.17,85,88,277/- MADE ON ACCOUNT OF UNACCOUNTED PURCHASES, WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE UNACCOUNTED PURCHASES WERE OUT OF UNACCOUNTED GROSS PROFIT OR THE GROSS PROFIT WAS OUT OF SUCH UNEXPLAINED PURCHASES. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 14 IN IT(SS) A NO.255/IND/2015 THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS (I) WHILE ALTERING THE ADDITION OF RS.17,35,42,064/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES OF GOLD BAR MADE BY THE A.O., HAS ERRED IN FACT IN HOLDING THAT THE A.O. MADE MISTAKES IN CONVERSION OF 1 KG GOLD BAR IN 100 GRAMS OF GOLD BAR DURING ESTIMATION OF GROSS PROFIT ON SALE OF GOLD BAR. WHEREAS, NOWHERE IN THE ASSESSMENT ORDER, THE A.O. MENTIONED SUCH CONVERSION, BUT ONLY TALKED ABOUT 100 GRAMS OUT OF 1 KG GOLD BAR. (II) ERRED IN GIVING THE AFORESAID RELIEF. THE AFORESAID ISSUE WAS NOT CLARIFIED BY THE A.O. IN THE REMAND REPORT. AS SUCH, THE REMAND REPORT WAS INCOMPLETE AND DEFECTIVE. INSTEAD OF CALLING FOR THE COMPLETE REMAND REPORT, THE CIT(A) RELIED ON THE INCOMPLETE AND DEFECTIVE REMAND REPORT AND HAS GIVEN RELIEF TO THE ASSESSEE. THIS TANTAMOUNT TO PERVERSE FINDING OF FACTS, SINCE THE REVENUES VERSION ON THE MATTER WAS NEITHER OBTAINED NOR CONSIDERED. (III) WHILE ALTERING THE ADDITION OF RS.17,35,42,064/- AND RS.9,65,123/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 15 OF GOLD AND SILVER BAR RESPECTIVELY MADE BY THE A.O. ERRED IN NOT GIVING ANY CONTRARY FINDING OR ANY CONTRARY ENQUIRY AGAINST THE A.O.S FINDINGS ON THE BASIS OF WHICH THE A.O. TOOK THE GROSS PROFIT RATE FOR GOLD AND SILVER BAR RESPECTIVELY. (IV) ERRED IN NOT ACCEPTING THE RATES TAKEN BY THE A.O. EVEN AFTER CONFIRMING THE FINDINGS RELATED TO LARGE UNACCOUNTED CASH SALES. (V) ERRED IN GIVING THE AFORESAID RELIEFS. WHEN INCRIMINATING MATERIALS WERE FOUND AND ADMITTED TO BE CREDIBLE AND AUTHENTIC BY THE CIT(A) AND WHEN REJECTION OF BOOKS WAS UPHELD BY THE CIT(A); THE FINDINGS ON THE BASIS OF THE SAME SHOULD NOT HAVE BEEN SUBSTITUTED BY THE ESTIMATION OF GROSS PROFIT, THAT TOO ON THE BASIS OF THE ASSESSEES ACCOUNTS WHICH HAVE BEEN PROVED TO BE UNAUTHENTIC AND ETHEREAL. THIS ACT OF THE CIT(A) DEFIES LOGIC AND CONTRADICTS HIS OWN STAND. (VI) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.2,00,00,000/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNT WAS INCLUDED IN THE AMOUNT ALREADY OFFERED FOR TAXATION, AND DESPITE THE FACT THAT NO DIRECT NEXUS BETWEEN THE TWO COULD BE ESTABLISHED. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 16 RS.2,00,00,000/- AS UNACCOUNTED INCOME OF THE ASSESSEE. (VII) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.2,71,75,000/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNT WAS INCLUDED IN THE AMOUNT ALREADY OFFERED FOR TAXATION, AND DESPITE THE FACT THAT NO DIRECT NEXUS BETWEEN THE TWO COULD BE ESTABLISHED. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID RS.2,71,75,000/- AS UNACCOUNTED INCOME OF THE ASSESSEE. (VIII) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.9,47,306/- WITHOUT APPRECIATING THE FACTS NARRATED BY THE A.O. WHILE MAKING SUCH ADDITION AND ALSO WITHOUT GIVING ANY CONTRARY FINDING AGAINST THE ORDER OF THE A.O. IN IT(SS) A NO.256/IND/2015 THE REVENUE HAS TAKEN TH E FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS (I) WHILE ALTERING THE ADDITION OF RS.30,97,58,529/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES OF GOLD BAR MADE BY THE A.O., HAS ERRED IN FACT IN HOLDING THAT THE A.O. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 17 MADE MISTAKES IN CONVERSION OF 1 KG GOLD BAR IN 100 GRAMS OF GOLD BAR DURING ESTIMATION OF GROSS PROFIT ON SALE OF GOLD BAR. WHEREAS, NOWHERE IN THE ASSESSMENT ORDER, THE A.O. MENTIONED SUCH CONVERSION, BUT ONLY TALKED ABOUT 100 GRAMS OUT OF 1 KG GOLD BAR. (II) ERRED IN GIVING THE AFORESAID RELIEF. THE AFORESAID ISSUE WAS NOT CLARIFIED BY THE A.O. IN THE REMAND REPORT. AS SUCH, THE REMAND REPORT WAS INCOMPLETE AND DEFECTIVE. INSTEAD OF CALLING FOR THE COMPLETE REMAND REPORT, THE CIT(A) RELIED ON THE INCOMPLETE AND DEFECTIVE REMAND REPORT AND HAS GIVEN RELIEF TO THE ASSESSEE. THIS TANTAMOUNT TO PERVERSE FINDING OF FACTS, SINCE THE REVENUES VERSION ON THE MATTER WAS NEITHER OBTAINED NOR CONSIDERED. (III) WHILE ALTERING THE ADDITION OF RS.30,97,58,529/- AND RS.40,69,563/- ON ACCOUNT OF ESTIMATION OF GROSS PROFIT ON SALES OF GOLD AND SILVER BAR RESPECTIVELY MADE BY THE A.O. ERRED IN NOT GIVING ANY CONTRARY FINDING OR ANY CONTRARY ENQUIRY AGAINST THE A.O.S FINDINGS ON THE BASIS OF WHICH THE A.O. TOOK THE GROSS PROFIT RATE FOR GOLD AND SILVER BAR RESPECTIVELY. (IV) ERRED IN NOT ACCEPTING THE RATES TAKEN BY THE A.O. EVEN AFTER CONFIRMING THE FINDINGS RELATED TO LARGE UNACCOUNTED CASH SALES. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 18 (V) ERRED IN GIVING THE AFORESAID RELIEFS. WHEN INCRIMINATING MATERIALS WERE FOUND AND ADMITTED TO BE CREDIBLE AND AUTHENTIC BY THE CIT(A) AND WHEN REJECTION OF BOOKS WAS UPHELD BY THE CIT(A); THE FINDINGS ON THE BASIS OF THE SAME SHOULD NOT HAVE BEEN SUBSTITUTED BY THE ESTIMATION OF GROSS PROFIT, THAT TOO ON THE BASIS OF THE ASSESSEES ACCOUNTS WHICH HAVE BEEN PROVED TO BE UNAUTHENTIC AND ETHEREAL. THIS ACT OF THE CIT(A) DEFIES LOGIC AND CONTRADICTS HIS OWN STAND. (VI) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.3,00,00,000/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT SUCH UNACCOUNTED PAYMENT HAD BEEN MADE FROM UNACCOUNTED INCOME DETERMINED ON ACCOUNT OF ESTIMATION OF GROSS PROFIT AND DESPITE THE FACT THAT NO DIRECT NEXUS BETWEEN THE TWO COULD BE ESTABLISHED. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) AS HIMSELF HELD THE AFORESAID RS.3,00,00,000/- AS UNACCOUNTED PAYMENT MADE BY THE ASSESSEE. (VII) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OFRS.84,84,900/- MADE ON ACCOUNT OF SEIZED UNACCOUNTED CASH WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNT WAS INCLUDED IN THE ADDITION MADE ON ACCOUNT OF ESTIMATION OF GROSS PROFIT AND DESPITE THE FACT THAT NO DIRECT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 19 NEXUS BETWEEN THE TWO COULD BE ESTABLISHED. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID RS.84,84,900/- AS UNACCOUNTED INCOME OF THE ASSESSEE. (VIII) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.70,72,244/- AND RS.11,07,760/- MADE ON ACCOUNT OF UNACCOUNTED JEWELLERY WITHOUT APPRECIATING THE FACTS NARRATED BY THE A.O. WHILE MAKING SUCH ADDITION. THE CIT(A) HAS ERRED IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT INVESTMENT IN GOLD ORNAMENTS TO THE EXTENT OF ONLY RS. 52 LAKHS WAS UNACCOUNTED AND DELETING THE REST OF THE ADDITION WITHOUT BRINGING CONCRETE MATERIAL ON RECORD. THE CIT(A) HAS ERRED IN ARRIVING THE CONCLUSION THAT THE UNACCOUNTED INVESTMENT IN GOLD ORNAMENT OF RS.52 LAKHS IS AN APPLICATION OF INCOME ESTIMATED ON ACCOUNT OF UNACCOUNTED GROSS PROFIT WITHOUT ESTABLISHING ANY LINK WHICH COULD PROVE THE NEXUS BETWEEN THE TWO. (IX) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.1,98,36,250/- MADE ON ACCOUNT OF PROJECT AT BHOPAL FROM UNACCOUNTED MONEY WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT UNACCOUNTED INVESTMENT IS A MERE APPLICATION OF UNACCOUNTED INCOME DETERMINED ON ACCOUNT OF ESTIMATION OF GROSS PROFIT AND DESPITE THE FACT THAT NO DIRECT NEXUS BETWEEN THE TWO COULD BE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 20 ESTABLISHED. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID RS.1,98,36,250/- AS UNACCOUNTED. (X) ERRED IN FACTS AND LAW IN DELETING THE ADDITIONS OF RS.16,60,044/-, RS.45,30,200/-, RS.4,79,215/- AND RS.1,24,456/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNTS WERE INCLUDED IN THE AMOUNT OF UNACCOUNTED INCOME DETERMINED ON ACCOUNT OF ESTIMATION OF GROSS PROFIT AND DESPITE THE FACT THAT NO DIRECT NEXUS BETWEEN THE TWO COULD BE ESTABLISHED. (XI) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.8,44,62,392/- MADE ON ACCOUNT OF UNACCOUNTED TRANSACTIONS IN MCX ON THE BASIS OF SEIZED PAPER LPS-5 PAGE NO. 107. THE CIT(A) HAS ERRED IN ARRIVING AT THE CONCLUSION THAT ADDITION OF RS.2,37,11,165/- WAS THE AMOUNT ACCOUNTED FOR IN THE BOOKS WITHOUT BRINGING ANY FINDING OR MATEIRAL ON RECORD CONTRARY TO THE FINDINGS OF THE A.O. ON THIS ISSUE. ALSO THE CIT(A) HAS ERRED IN DELETING THE REST OF ADDITION OFRS.6,07,51,227/- WITHOUT ESTABLISHING THE LINK WHICH COULD PROVE THAT THE SAID AMOUNT WAS INCLUDED IN THE UNACCOUNTED INCOME DETERMINED ON THE BASIS OF ESTIMATION OF GROSS PROFIT EVEN AFTER CONFIRMING THAT THE SAID AMOUNT IS UNACCOUNTED INCOME. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 21 (XII) ERRED IN FACTS AND LAW IN DELETING THE ADDITIONS OF RS.20,27,500/-, RS.2,34,64,852/- AND RS.20,22,954/- MADE ON ACCOUNT OF UNRECORDED TRANSACTIONS REFLECTING THE IN THE SEIZED PAPER PAGE NO. 108 TO 109 WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNTS WERE INCLUDED IN THE UNACCOUNTED INCOME DETERMINED ON THE BASIS OF ESTIMATION OF GROSS PROFIT. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID AMOUNTS AS UNACCOUNTED. (XIII) ERRED IN FACTS AND LAW IN DELETING THE ADDITIONS OF RS.27,69,710/-, RS. 1,12,60,200/- , RS .5,00,000/- RS .5,00,000/- AND RS.79,40,236/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD WHICH COULD PROVE THAT THE SAID AMOUNTS WERE INCLUDED IN THE UNACCOUNTED INCOME DETERMINED ON THE BASIS OF ESTIMATION OF GROSS PROFIT. THIS ERROR IS ALL THE MORE GLARING FOR THE REASON THAT THE CIT(A) HAS HIMSELF HELD THE AFORESAID AMOUNTS AS UNACCOUNTED. (XIV) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.6,47,000/- MADE ON THE BASIS OF LPS-2 WITHOUT ESTABLISHING ANY LINK WHICH COULD PROVE THAT UNACCOUNTED EXPENSES WERE INCLUDED IN THE UNACCOUNTED INCOME EVEN WHEN THE CIT(A) HIMSELF HAS ADMITTED THAT THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 22 ASSESSEE COULD NOT OVERCOME HIMSELF FROM THE DEEMING PROVISION U/S 132(4A) OF THE IT ACT. (XV) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.4,34,30,138/- MADE ON THE BASIS OF LPS-2. WHILE DOING SO, THE CIT(A) HAS OVERLOOKED THE FACTS DRAWN BY THE A.O. AND HAS DELETED THE ADDITION WITHOUT BRINGING ANY FINDINGS OR MATERIAL ON RECORD WHICH COULD PROVE THAT ADDITION OFRS.4,34,30,138/- IS THE PART OF UNACCOUTNED INCOME OF RS.6,07,51,227/- TAXED FROM MCX TRADING CONFIRMED BY HIM ELSEWHERE IN HIS ORDER. ALSO AS DISCUSSED SUPRA, THE CIT(A) HAS ERRED IN ARRIVING AT THE CONCLUSION THAT THE AMOUNT OF RS.4,34,30,138/- WAS INCLUDED IN THE UNACCOUNTED INCOME DETERMINED ON ACCOUNT OF ESTIMATION OF GROSS PROFIT. (XVI) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.3,85,520/- MADE ON THE BASIS OF LPS-2. WHILE DOING SO, THE CIT(A) HAS OVERLOOKED THE FACTS DRAWN BY THE A.O. AS FAR AS PURCHASE OF GOLD FROM M/S PRAKASH JEWELLERS IS CONCERNED. (XVII) ERRED IN FACTS AND LAW IN DELETING THE ADDITION OF RS.9,43,900/- MADE ON ACCOUNT OF TRADING ON MCX. WHILE DOING SO, THE CIT(A) HAS OVERLOOKED THE FACTS DRAWN BY THE A.O. AS FAR AS TRADING ON MCX AND EXPENSES IN THIS REGARD IS CONCERNED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 23 (XVIII) ERRED IN FACTS AND LAW WHILE DECIDING THE GROUND NO. 5 OF APPELLANT BY IGNORING THAT THE SURRENDERED AMOUNT OF RS. 7,28,25,000/- IS ALREADY REDUCED FROM THE ADDITIONS MADE ON VARIOUS ACCOUNTS IN THE COMPUTATION OF ASSESSED INCOME IN THE END OF THE ASSESSMENT ORDER. 3. IN THE ASSESSEES APPEALS, GROUND NO. 1 & 8 IN IT( SS) A NOS. 241/IND/2015, GROUND NOS. 1 & 9 IN IT(SS) A NO. 242/IND/2015 AND GROUND NOS. 1, 14, 15 AND 16 IN IT( SS) A NO. 243/IND/2015 ARE GENERAL IN NATURE AND AS SUCH D O NOT REQUIRE ANY ADJUDICATION. 4. IN THE REVENUES APPEALS, GROUND NO. (IX) IN IT(SS ) A NO. 254/IND/2015, GROUND NO. (IX) IN IT(SS) A NO. 255/IND/2015 AND GROUND NO. (XIX) IN IT(SS) A NO. 256/IND/2015 ARE GENERAL IN NATURE AND AS SUCH DO NOT REQUIRE ANY ADJUDICATION. 5. GROUND NOS. 2 TO 4.1 IN IT(SS) A NOS. 241/IND/20 15, GROUND NOS. 2, 3, 3.1, 4 AND 4.1 IN IT(SS) A NO. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 24 242/IND/2015 AND GROUND NOS. 2, 2.1, 3 AND 3.1 IN IT( SS) A NO. 243/IND/2015 IN THE ASSESSEES APPEALS AND GROUND NOS. 1 TO 5 IN IT(SS) A NOS. 254 TO 256/IND/2015 IN THE REVENUES APPEAL RELATE TO REJECTION OF BOOKS OF ACCOU NTS AND WITH REGARD TO PART SUSTENANCE/DELETION OF ADDITIONS MADE ON THE BASIS OF GROSS PROFIT IN ALL THESE ASSESSME NT YEARS INVOLVED IN THESE CROSS-APPEALS. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DOING THE BUSINESS OF TRADING IN GOLD AND S ILVER BULLION AND FUTURE TRADING IN COMMODITIES THROUGH MCX . THE BOOKS OF ACCOUNTS ARE AUDITED AND TAR WAS ALSO FILED FOR ALL THESE YEARS. A SEARCH TOOK PLACE AT THE RESIDENC E AS WELL AS BUSINESS PREMISES ON 25/11/2010. THE STATEMEN TS WERE RECORDED WHEREIN THE ADDITIONAL INCOME OF RS. 10 CRORES WAS DISCLOSED. THE ASSESSING OFFICER FROM THE INDEPENDENT INQUIRY CONDUCTED WITH RESPECT TO THE GO LD ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 25 BULLION TRADING BUSINESS, FOUND THAT ON AN AVERAGE 100 GRAM GOLD KG BAR WAS SOLD WITH A PROFIT IN THE RANGE OF RS. 3000/- TO RS. 4000/- DURING THE YEARS UNDER CONSIDERATION. SO FAR AS SILVER BULLION TRADING BUSINE SS IS CONCERNED, THE ASSESSING OFFICER FOUND THAT ON AN AVER AGE 1 KGM SILVER BAR WAS SOLD WITH PROFIT IN THE RANGE OF RS.600/- TO RS. 1000/- DURING THE YEARS UNDER CONSIDERATION. THE ASSESSING OFFICER, THEREFORE, WAS OF THE OPINION THAT ANY PRUDENT BUSINESSMAN WHO IS TAKING RIS K OF SELLING THIS PRECIOUS METAL THAT TOO IN CASH WHERE PLACE OF DELIVERY OF BULLION AND PLACE OF CASH DEPOSIT AGAINS T SALE IS DIFFERENT, WILL NOT TAKE RISK FOR VERY LOW GROSS PROFIT OF RS.264.48 ON SALE OF PER 100 GRAM GOLD BAR AND RS.217.3 9 ON SALE OF PER KG. SILVER BAR (AS SHOWN BY THE ASSESSEE IN HIS AUDITED ACCOUNT FOR THE ASSESSMENT YEARS UNDER REFERENCE. THE ASSESSING OFFICER ALSO MENTIONED THAT THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 26 EMPLOYEES OF THE ASSESSEE PROVIDE FACILITY TO THE CUS TOMERS FOR COLLECTING THE CASH AND DELIVERING THE BULLION AND FOR THIS PURPOSE THE ASSESSEE HAS MAINTAINED MORE THAN 20 COLLECTION CENTRES. THE EMPLOYEES OF THE ASSESSEE ST AY IN HOTELS WHERE THERE IS NO PERMANENT ESTABLISHMENT. THU S IT IS VERY OBVIOUS THAT THE COST OF EXPENDITURE INCURRE D TO PROVIDE THIS FACILITY MUST HAVE BEEN MADE GOOD FROM T HE SALE PRICE OF BULLION. THE ASSESSING OFFICER ALSO OBS ERVED THAT THE EXPENSES WERE INCURRED ON DALALI WHICH WERE N OT CLAIMED IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER, THEREFORE, HELD THAT ALL THESE CUMULATIVE FACT ORS SHOW THAT THE ASSESSEE WAS EARNING HIGHER PROFIT. THE ASSESSING OFFICER ACCORDINGLY MADE THE ADDITION TOWARDS GROSS PROFIT IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 27 7. ON APPEAL, THE LEARNED CIT(A) APPLIED GP RATE OF 1.25% ON THE SALE OF GOLD & SILVER BULLION IN THESE YEARS AND ALSO ENHANCED THE TURNOVER BY 17.5% FOR ALL THE YEAR S. LEARNED CIT(A) CONFIRMED THE ADDITION OF RS.1,77,80,7 00/- FOR THE ASSESSMENT YEAR 2009-10, RS.7,79,54,342/- FO R THE ASSESSMENT YEAR 2010-11 AND RS.14,14,94,809 FOR THE ASSESSMENT YEAR 2011-12. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 8. BEFORE US, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT NO INCRIMINATING DOCUMENTS WERE FOUND. HE FURTHER SUBMITTED THAT THE ASSESSEE MAINTAINED COMPLET E STOCK RECORDS OF ALL THE PURCHASES AND SALES WHICH WERE FULLY VOUCHED. THE ASSESSEE IMPORTED GOLD AND SILVER BULLION UNDER THE GOVERNMENT POLICY THROUGH THE BANK S. THE ASSESSEE ALSO PURCHASED GOODS EITHER FROM THE BANK S OR FROM VARIOUS REPUTED DEALERS. ALL THE PURCHASES ARE FULLY ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 28 VOUCHED. THE PAYMENTS ARE NORMALLY RECEIVED THROUGH RTGS IN ADVANCE. EVEN FOR CREDIT PURCHASES THE PAYMEN TS ARE MADE THROUGH BANKING CHANNELS MOSTLY THROUGH RTGS IN A SHORT PERIOD. THE ASSESSEES SALES ARE EITHER IN C ASH OR BY CHEQUE. THE CREDIT SALES ARE VERY FEW. THE BILLS ARE ISSUED IN ALL CASES. SINCE THE MARKET FLUCTUATES ON TH E BASIS OF INTERNATIONAL PRICES, THE ASSESSEE DOES NOT HO LD STOCK FOR A LONG. THE MARKET PRICE IS VERIFIABLE ON T HE MCX GOLD REPORT OR THE SARAFA PUBLICATIONS. SINCE INDORE IS A CENTRAL PLACE FOR ALL THE SMALL GOLD DEALERS IN SURROUND ING AREAS, THE DEALERS PURCHASE GOODS IN CASH FOR WHICH BILL S ARE PREPARED AND ENTRIES ARE MADE IN REGULAR BOOKS OF ACCOUNTS. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CLAIMS THAT ALL THE TRANSACTIONS ARE VERIFIABLE. NO DEFEC T IN THE BOOKS OF ACCOUNTS IS FOUND. NO EVIDENCE THAT SALES OR PURCHASES ARE MADE OUTSIDE THE BOOKS WAS FOUND AND HE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 29 PLEADED THAT IN SUCH A SITUATION, REJECTION OF BOOKS OF ACCOUNTS WAS UNWARRANTED AND APPLYING THE GP RATE WAS UNJUSTIFIED. HE FURTHER PLEADED THAT THE ASSESSING O FFICER REJECTED THE BOOKS OF ACCOUNTS RELYING ON CERTAIN LOO SE PAPERS FOUND DURING THE COURSE OF SEARCH PERTAINING T O THE ASSESSMENT YEAR 2011-12. HE EXPLAINED THAT PAPER LPS-1 PAGE 34 IS A ROUGH MEMORANDUM CASH BOOK DATED 10.7.2010, PAGE 55 OF LPS-5 IS A ROUGH MEMORANDUM CASH BOOK DATED 25.11.2010, LPS-5 PAGE 108 AND 109 IS SAUDA BOOK DATED 24.11.2010 AND LPS-5 PAGE 107 IS THE TRIAL BALANCE AS ON 24.11.2010. ON THE BASIS OF THESE PAPERS AND THE FACT THAT THE ASSESSEE IS SELLING GOLD IN CASH, THE ASSESSING OFFICER REACHED THE CONCLUSION THAT THE BOO KS ARE LIABLE TO BE REJECTED. HE FURTHER SUBMITTED THAT LPS- 1 PAGE 34 AND LPS-5 PAGE 35 ARE TOTALLY EXPLAINED AND ALL THE ENTRIES OF THE CREDIT SIDE ARE ENTERED IN THE BOOKS OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 30 ACCOUNTS. HE ALSO SUBMITTED THAT LPS-1 PAGE 34 IS THE ENTRY OF RS.45,30,200/- FOR CASH SALES AND ENTERED UND ER THE HEAD SALES AND THE CORRESPONDING DEBIT IS THE DEPOSIT IN THE BANK WHICH IS ENTERED IN THE BANK STATEMENT AND REFLECTED IN THE BOOKS. WITH REGARD TO THE DEBIT ENTRY MCX OF RS. 1,79,415/- LPS-1 PAGE 34 AND R S. 5 LAC OF LPS-5 PAGE 55, IT WAS SUBMITTED THAT THESE WERE TEMPORARY ADVANCES. THE OPENING CASH BALANCE SHOWN IS THE CASH BALANCE OF BRANCH OFFICE WHICH FORMS PART AND PARCEL OF TOTAL CASH BALANCE SHOWN IN THE BOOKS OF ACCOUNTS. HE EXPLAINED THAT THE ASSESSEE HAS TWO OFFICE S ONE IN SARAFA AND ONE IN GUMASTA NAGAR. THEREFORE, ALL THESE ENTRIES IN THE LOOSE PAPERS ARE DULY ENTERED IN THE BOOKS OF ACCOUNTS AND THESE CANNOT BE MADE BASIS FOR REJECTION OF BOOKS OF ACCOUNTS. WITH REGARD TO LPS-5 PAGE 106 TO 109 HE SUBMITTED THAT THESE ARE THE COPIES OF SAUDA ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 31 BOOK WHEREIN SAUDAS WERE ENTERED. HE PLEADED THAT ALL TH E ENTRIES OF SAUDA PURCHASES ARE ENTERED IN THE BOOKS AND ACTUAL TRANSACTIONS TOOK PLACE SUBSEQUENTLY. HE SUBMITTE D THAT COPIES OF THE SALE BILLS WHEN ACTUAL SALE TOOK PLAC E ARE PLACED IN THE PAPER BOOK PAGES 131 TO 157. WITH REGARD TO SAUDA AT PAGE 118 ON 24.11.2010, IT WAS SUBMITTED THAT THIS WAS A HOLIDAY ON ACCOUNT OF GURU TEGH BAHADUR JAYANTI AND SAUDA MADE HAS BEEN ENTERED IN THE SAUDA BOOK. THIS PAPER DOES NOT DEPICT ANY PURCHASE OR SALE BUT MERELY SHOWS THE SAUDAS AND CANNOT BE REGARDED AS AN UNACCOUNTED ENTRY. HE SUBMITTED THAT WITHOUT PREJUDIC E TO THE ABOVE PLEADINGS, THE PURCHASES ARE ENTERED IN BOOK S AT COST WITHOUT VAT AND VAT CHARGES ARE SEPARATELY DEBITED IN THE VAT A/C. A BILL SHOWING APPROXIMATE RATE OF RS.20,000/- OF RIDDHI SIDDHI BULLION DATED 22.11.201 0 WAS ALSO INCLUDED. THE SALES ARE EFFECTED ALONG WITH VAT. W ITH ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 32 REGARD TO LOOSE PAPER LPS 5 PAGE 107 WHICH IS A TRIAL BALANCE AS ON 24.11.2010, HE SUBMITTED THAT THE ASSESSEE HAS GIVEN COMPLETE BIFURCATION OF THE ACCOUNTED AND UNACCOUNTED ENTRIES AND IT WAS SUBMITTED THAT THE UNACCOUNTED ENTRIES WERE ONLY TO THE TUNE OF RS. 95,69,286/- ON THE CREDIT SIDE AND RS. 59,76,204/- O N DEBIT SIDE. WITH REGARD TO THE ENTRY IN THE NAME OF M CX OF RS. 6,50,10,406/- IT WAS SUBMITTED THAT THIS IS THE AM OUNT OF AHMEDABAD BRANCH BALANCE WHICH WAS TO THE TUNE OF RS. 6.8 CRORES. HE PLEADED THAT WITHOUT PREJUDICE TO THES E, THIS WAS A CREDIT ENTRY AND AT THE MOST THE COMMISSION @ 2% COULD BE ESTIMATED. IT WAS SUBMITTED THAT THIS TRIAL BAL ANCE CANNOT BE MADE BASIS FOR REJECTING THE BOOKS. HE ADMITTEDLY SUBMITTED THAT IT MIGHT CONTAIN THE UNACCOUNTED ENTRIES BUT THEY ARE ALL BALANCES AS ON A PARTICULAR DAY WHICH HAS BEEN TAXED FOR THE A.Y. 2011- 12. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 33 ON THE BASIS OF THIS TRIAL BALANCE THE BOOKS OF ACCOUNTS CANNOT BE REJECTED FOR EARLIER YEARS. HE SUBMITTED THAT NO FAULT HAS BEEN FOUND IN THE BOOKS AND ON THE BASIS OF PRESUMPTIONS AND ASSUMPTIONS, THE BOOKS CANNOT BE REJECTED, ESPECIALLY WHEN NO INCRIMINATING MATERIAL WAS FOUND. HE ALSO PLEADED THAT THE PRINCIPLE OF RES-JUDIC ATA IS NOT APPLICABLE TO THE INCOME TAX MATTERS AND EACH YEAR I S INDEPENDENT AND PROVISIONS OF SECTION 153A CLEARLY PR OVIDE FOR TAXING THE UNDISCLOSED INCOME FOR EACH YEAR. HE, THEREFORE, FINALLY SUBMITTED THAT ON THE BASIS OF THE TRIAL BALANCE FOR THE ASSESSMENT YEAR 2011-12, THE BOOKS OF ACCOUNTS CANNOT BE REJECTED. 9. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE AUTHORITIES BELOW HAVE REJECTED THE BOOKS OF ACCOUNTS ON HYPOTHETICAL GROUNDS AND ON PURE SURMISES. HE ALSO SUBMITTED THAT NO SPECIFIC DEFECT H AS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 34 BEEN POINTED OUT IN THE BOOKS OF ACCOUNTS, ESPECIALLY IN THE CASH BOOK WHERE ALL THE TRANSACTIONS INCLUDING THE CASH SALES ARE DULY RECORDED. HE ALSO SUBMITTED THAT THE ASSESSEE HAS MAINTAINED COMPLETE DAY-TO-DAY STOCK REGISTER WITH QUANTITIES AND ALL THE PURCHASES ARE FULLY VOUCHED AND ARE DONE THROUGH THE BANKING CHANNEL. THE SALES ARE ALSO VOUCHED AND TOTAL SALES ARE RECORDED IN TH E BOOKS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DEALS IN THE GOLD BAR, THE MARKET OF WHICH IS OFTEN FLUCTUATING IN HOURS. THE ASSESSEE IS REQUIRED T O SALE THE GOODS WITHOUT HOLDING MUCH STOCK. HE EMPHASIZED THAT ALL THE PURCHASES ARE MADE EITHER FROM BANK OR FROM REPUTED DEALERS WHO PURCHASE THE GOODS FROM THE BANKS. HE SUBMITTED THAT UNDER THESE CIRCUMSTANCES THE BOOKS CANNOT BE REJECTED AND A NET PROFIT RATE CANNOT BE APPLIE D. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 35 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ADDITIONAL COMMISSIONER OF SAME RANGE IN THE CASE OF RITESH KUMAR JOSHI HAS ACCEPTED GP RATE OF 0.14%. HE ALSO DREW OUR ATTENTION TO THE ORDER IN THE CASE OF BAL DEV KRISHNA 65 TTJ 254 WHEREIN THE GP ESTIMATED AT RS. 400 /- PER 120 GMS, WHICH COMES TO AROUND 0.2%, WAS ACCEPTED. HE ALSO RELIED UPON THE CASE OF VONAMALA JAGDISHWARAIAH WHEREIN GP AT 0.1% HAS BEEN ACCEPTED BY HYDERABAD BENCH OF ITAT. HE ALSO CLAIMED THAT IN THE CASE OF MAHENDRA KUMAR AGRAWAL THE REJECTION OF BOOKS WAS HELD UNJUSTIFIED AND THE GP OF 0.1% WAS ACCEPTED. HE ALSO PLEADED THAT SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF I TO V/S GIRISH M MEHTA. THE ASSESSEE HAD FILED NUMBER OF INSTANCES OF SALE AND PURCHASE SHOWING THE RATE OF PROF IT EARNED BY THE ASSESSEE AT PAGES 40 - 46 OF PAPER BOOK NO. II. IT WOULD BE NOTICED THAT IN THE EARLIER YEAR WHEN THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 36 QUANTUM OF THE SALE WAS VERY LESS THE ASSESSEE HAS SHOWN A BETTER PROFIT. FOR THE YEAR 2009-10 THE TURNOVER W AS RS.190.26 CRORES WHICH INCREASED TO RS.1035.93 CRORE S IN THE ASSESSMENT YEAR 2011-12. THUS, THE SALES HAVE INCREASED BY MORE THAN 5 TIMES. THE GOLD RATES ARE VERIFIABLE FROM THE INTERNET WHICH ARE FLUCTUATING EVE RY HOUR ON THE BASIS OF THE INTERNATIONAL MARKET. THE LEARN ED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT NO INCRIMINATING DOCUMENT AND UNACCOUNTED PURCHASES OR SALES WERE DETECTED FOR THE ASSESSMENT YEAR 2009-10. T HE GP RATE WAS ALSO 0.53% WHICH REFLECTS GOOD RESULTS FOR THE YEAR. THEREFORE, THERE IS NO JUSTIFICATION FOR ESTIMAT ING GP FOR THE ASSESSMENT YEAR 2009-10 AND ALSO ENHANCING THE TURNOVER. THE LEARNED COUNSEL FOR THE ASSESSEE, THER EFORE, SUBMITTED THAT THE ADDITION MADE AND SUSTAINED ON THIS ACCOUNT DESERVES TO BE DELETED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 37 10. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THE INCRIMINATING MATERIAL HAS BEEN FOUND IN THE SHAPE O F LOOSE PAPERS AND THOUGH IT MAY PERTAIN TO THE LAST YEAR BUT ON THAT BASIS THE BOOKS OF ACCOUNTS COULD BE REJECTED AND THE PROFIT COULD BE ESTIMATED. HE SUBMITTED THAT FOR THE ASSESSMENT YEARS 2009-10 TO 2011-12 THE ASSESSMENTS WERE ABATED. THEREFORE, THE BOOKS OF ACCOUNTS WERE RIG HTLY REJECTED AND PROFIT WAS ESTIMATED. HE RELIED ON THE DE CISION IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT; 346 ITR 106 (AP). 11. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GON E THROUGH VARIOUS LOOSE PAPERS FOUND AND SEIZED DURING SEARCH OPERATION. FOR ALL THESE THREE ASSESSMENT YEARS, THE ASSESSMENTS WERE ABATED. FROM VARIOUS LOOSE PAPERS SEIZE D DURING SEARCH OPERATION RELEVANT TO ASSESSMENT YEAR 201 1- 12, WE FIND THAT CERTAIN ENTRIES ARE NOT TALLYING WITH THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 38 REGULAR BOOKS OF ACCOUNTS. FURTHER CERTAIN ENTRIES IN THE SEIZED DOCUMENTS SHOWING TRIAL BALANCE ARE ALSO NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. THE ASSESS EE ADMITTEDLY ACCEPTED THE FACT THAT FOR THE ASSESSMENT YEA R 2011-12 THERE WERE INCRIMINATING DOCUMENTS WHICH WER E NOT RECORDED IN THE BOOKS OF ACCOUNTS. ALL THESE FACT S SUGGEST THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2011-12 WERE NOT REFLECTING TRUE AFFAIRS AND WERE LIABLE TO BE REJECTED FOR WORKING OUT THE TAXABLE PROFIT. THEREFORE, WE SUSTAIN THE REJECTION OF BOOKS OF ACCOUNTS BY INVOKING THE PROVI SIONS OF SECTION 145(3) OF THE ACT FOR THE ASSESSMENT YEAR 201 1-12 AS HELD BY THE LOWER AUTHORITIES. FOR THE ASSESSMENT Y EAR 2010-11 THERE IS SHARP DECLINE IN GP RATE. THE ASSESSM ENT WAS ABATED. THE GP RATE FOR ASSESSMENT YEAR 2009-10 WAS 0.53% WHICH DECLINED TO 0.13% IN THE ASSESSMENT YEAR ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 39 2010-11. THEREFORE, WE SUSTAIN THE REJECTION OF BOO KS OF ACCOUNTS FOR THE ASSESSMENT YEAR 2010-11 ALSO. 12. AS REGARDS APPLICATION OF GROSS PROFIT RATE AND ENHANCEMENT IN THE TURNOVER, WE HAVE GONE THROUGH THE VARIOUS DOCUMENTS PLACED BEFORE US AS ALSO THE RECORD O F THE CASE. WE FIND THAT THE ASSESSEE HAS DISCLOSED GP RAT E OF 0.53% IN THE ASSESSMENT YEAR 2009-10, 0.13% IN ASSESSMENT YEAR 2010-11 AND 0.10% IN THE ASSESSMENT YEAR 2011-12 ON THE SALES RECORDED IN THE BOOKS OF ACCOUNTS. THE TURNOVER AS PER BOOKS OF THE ASSESSEE FO R THE ASSESSMENT YEAR 2009-10 WAS RS.190.26 CRORES. THE TURNOVER OF GOLD BULLION FOR THE ASSESSMENT YEAR 2010 -11 INCREASED TO RS.585.95 CRORES AND FOR THE ASSESSMENT Y EAR 2011-12 IT INCREASED TO RS.1035.53 CRORES. ONE OF TH E MAJOR REASONS CLAIMED FOR THE FALL IN GP RATE WAS THE MANIFOLD INCREASE IN THE TURNOVER. THE ASSESSING OFF ICER ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 40 ESTIMATED THE PROFIT ON 1 KG. OF GOLD IN THE RANGE OF RS. 4000/- TO RS. 6000/- PER 100 GM AND GP ON SALES OF SI LVER WAS IN THE RANGE OF RS.1200/- TO RS. 2500/- ON 1 KG. THE CIT(A) ESTIMATED THE GP AT 1.25% AND ALSO ENHANCED THE TOTAL TURNOVER BY 17.5% FOR THESE YEARS AND MADE THE ADDITION. 13. WE FURTHER FIND THAT THE CIT(APPEALS) VIDE PARA- 14 OF THE ORDER CONCLUDED THAT METHOD OF ESTIMATION OF P ROFIT ADOPTED BY AO WAS DEFECTIVE AND FAULTY HENCE SUCH ESTIMATION OF INCOME WAS REJECTED FOR ALL THE YEARS IN RELATION TO GROSS PROFIT ON SALES OF GOLD BULLION. SI MILAR DEFECTS WERE ALSO THERE IN ESTIMATION OF PROFIT BY AO ON SALE OF SILVER BARS HENCE THAT ESTIMATION WAS ALSO REJECTED. HOWEVER, THE LEARNED CIT(A) GROUPED THE SALES OF GOLD BULLION AND SILVER BULLION TOGETHER AT RS. 10,35,53,5 8,633/- (I.E. GOLD BULLION RS.1030,03,690/- AND SILVER BULLI ON ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 41 RS.5,50,01,943/-) FOR A.Y. 2011-12. SIMILARLY, THE LEARNED CIT(A) GROUPED THE SALES OF GOLD BULLION AND SILVER B ULLION TOGETHER AT RS. 585,95,67,563/- (I.E. GOLD BULLION RS.584,67,73,769/- AND SILVER BULLION RS.1,27,93,794 /-) FOR A.Y. 2010-11 AND BY MAKING ENHANCEMENT OF 17.5% ON AGGREGATE SALES, THE LEARNED CIT(A) APPLIED GROSS PROFIT RATE OF 1.25%. 14. WE FURTHER FIND THAT THE ADDITIONS IN SILVER BUL LION ACCOUNT WERE MADE BY THE ASSESSING OFFICER AT RS.9,65,123/- AND RS.40,69,563/- IN A.Y. 2010-11 & 2011-12 BY ESTIMATING GROSS PROFIT ON SALE OF SILVER BULLION. IT WAS ALSO CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US THAT NO INCRIMINATING DOCUMENTS REGARDING PURCHASE/SALE OF SILVER BULLION WERE FOUND. GROSS PROFIT ON SALES OF SILVER BULLION WAS DISCLOSED @ 0.6 3% IN A.Y. 2010-11 AND @ 1.06% IN A.Y. 2011-12. QUANTITATI VE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 42 RECORDS HAVE BEEN MAINTAINED AND BOOKS OF ACCOUNTS ARE AUDITED. SALE OF SILVER BARS DURING AND IN A.Y. 2010-11 WAS RS.1,27,93,794/- (522.946 KG) WHEREAS SALE IN A.Y. 20 11- 12 WAS RS.5,50,01,943/- (1861.524 KG.). THE ASSESSIN G OFFICER DID NOT APPLY GROSS PROFIT RATE BUT HE CONDUC TED MARKET ENQUIRY OF SILVER BULLION TRADE BUSINESS. THE ASSESSING OFFICER ON THE BASIS OF MARKET ENQUIRY FOUND THAT PROFIT ON ONE KG SILVER BAR WAS IN THE RANGE OF RS.12 00/- TO RS.2500/- PER KG. HE, THEREFORE, ESTIMATED THE GROSS PROFIT @ RS.2,000/- PER KG. IN A.Y. 2010-11 AND @ RS.2,500/ - PER KG. ON SALES OF 522.946 KG IN A.Y. 2010-11 & ON 1861 .524 KG IN A.Y. 2011-12 ON SALES OF SILVER BAR. 15. WE ALSO FIND THAT THE ASSESSEE IS DEALING IN PRECIOUS METAL LIKE GOLD AND SILVER AND THE RATES ARE VERIFIABLE AND AVAILABLE IN OPEN TO EVERY CUSTOMER FROM MCX GOLD REPORTS OR SARAFA PUBLICATIONS. THUS, THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 43 CUSTOMERS WHO PURCHASE GOODS FROM THE ASSESSEE WERE W ELL AWARE ABOUT THE PREVAILING MARKET PRICE OF THESE METALS AT THE RELEVANT TIME. MOST OF THE PURCHASES ARE FROM REPU TED DEALERS. VERY FEW DOCUMENTS PERTAINING TO THE ASSESSME NT YEAR 2011-12 WERE SEIZED WHICH SUGGEST THAT THE ASSES SEE INDULGED IN TRADING WHICH WAS NOT RECORDED IN THE BOO KS OF ACCOUNTS. FOR RECORDED PURCHASES, THE ASSESSEE WAS MAINTAINING DAY TO DAY STOCK REGISTER WITH QUANTITIES AN D PURCHASE VOUCHERS. THE PAYMENTS WERE ALSO MADE THROUG H BANKING CHANNELS. THEREFORE, THE LEARNED CIT(A)S AC TION IN ENHANCING THE TURNOVER BY 17.5% FOR ALL THE YEARS IS UNJUSTIFIED. THERE WAS SEIZURE OF DOCUMENTS WHICH SU GGEST UNACCOUNTED SALES FOR THE ASSESSMENT YEAR 2011-12 AND WITH A VIEW TO PLUG THE LOOPHOLES, WE ARE OF THE VIEW THAT THE ENHANCEMENT IN TURNOVER BY 5% ON THE SALES RECORDED IN THE BOOKS OF ACCOUNTS SHALL BE REASONABLE FOR THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 44 ASSESSMENT YEAR 2011-12. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ENHANCE THE TURNOVER BY 5%. FU RTHER, ON ACCOUNT OF SHARP FALL IN GP RATE AS DISCLOSED BY THE ASSESSEE AS COMPARED TO ASSESSMENT YEAR 2009-10, WE ALSO FIND IT APPROPRIATE TO ENHANCE THE TURNOVER BY 5 % FOR THE ASSESSMENT YEAR 2010-11 . WE DIRECT ACCORDINGLY. SINCE WE ARE ACCEPTING THE GP RATE DECLARED FOR THE ASSESSMENT YE AR 2009-10 IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTS FOR THE RELEVANT PERIOD AND BETTER BOOK RESULTS IN COMPARI SON TO SUCCEEDING YEARS AND NO DEFECT IN BOOKS OF ACCOUNT S WAS FOUND BY THE AUTHORITIES BELOW FOR ASSESSMENT YEAR 20 09- 10, THEREFORE, WE DIRECT TO ACCEPT THE BOOK RESULTS FOR THE ASSESSMENT YEAR 2009-10. THE GOLD PRICES WERE ALSO INCREASED DURING THE RELEVANT PERIOD. THE AVERAGE GOLD PRICE FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2 007- 08 WAS RS.8.36 LACS PER KG. WHICH INCREASED TO RS. 16. 32 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 45 LACS PER KG FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2010-11 AND RS. 20,72,000/- FOR THE PERIOD RELEVANT T O ASSESSMENT YEAR 2011-12. WE ALSO OBSERVE THAT WHENEVER THERE IS TREMENDOUS INCREASE IN THE PRICE OF GOLD, T HE MARGIN OF PROFIT SHRINKS. GOLD MARKET IS WELL INFORMED MARKED AND GUIDED BY INTERNATIONAL PRICE. THERE WAS VAT OF 1% ON THE RECORDED TRADING OF GOLD. THUS, THE GRO SS PROFIT ESTIMATED ON UNRECORDED SALES CANNOT BE APPLIED TO THE RECORDED SALES AS THE MARGIN OF TAX ALSO REMAINS WITH TH E SELLER OF UNACCOUNTED SALES WHILE IN THE RECORDED SALE S THE PRICES ARE INCREASED BY VAT WHICH REDUCES THE MARGIN O F PROFIT BY THE SIMILAR AMOUNT. THE CUMULATIVE EFFECT O F INCREASE IN TURNOVER AND INCREASE IN GOLD PRICE MUST H AVE REDUCED THE GROSS PROFIT FOR THE ASSESSMENT YEARS 201 0-11 AND 2011-12. WE ALSO FIND THAT THE ADDITIONAL COMMISSIONER OF THE SAME RANGE IN THE CASE OF SHRI NITESH ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 46 KUMAR DOSHI FOR THE A.Y. 2010-11 HAS ACCEPTED THE G.P . RATE AT 0.14% ON THE RECORDED SALES AND SHRI DOSHI WAS ALSO ENGAGED IN SIMILAR BUSINESS. IN THE CASE OF BALDEV KRISHNA THE GP WAS ESTIMATED AT RS. 400/- PER 120 GMS WHICH COMES TO AROUND 0.2% OF THE SALES RECORDED. SIMILARLY IN THE CASE OF VONAMALA JAGDISHWARAIAH; (2015) 44 CCH 005 GP AT 0.1% HAS BEEN ACCEPTED BY HYDERABAD BENCH OF ITAT AND IN THE CASE OF MAHENDRA KUMAR AGRAWAL (2015) TAX PUBLICATION (DT) 2124 THE JAIPUR BENCH OF THE TRIBUNAL ACCEPTED THE GP OF 0.1% . FURTHER, WE ARE OF THE VIEW THAT ON UNRECORDED SALES ESTIMATED, THE PROFIT HAS TO BE WORKED OUT AT THE RATE OF 1.25%. CONSIDERING ALL TH ESE ASPECTS WE SUSTAIN THE GROSS PROFIT RATE OF 1.25% ON T HE ENHANCED TURNOVER OF GOLD BULLION FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 AND ON THE RECORDED TURNOVER ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 47 DISCLOSED IN THE BOOKS OF ACCOUNTS, WE DIRECT TO APPL Y GROSS PROFIT RATE OF 0.25%. 16. WE ALSO HOLD THAT THE CIT(A) WAS NOT JUSTIFIED IN CONSIDERING THE COMBINED SALES OF GOLD AND SILVER BU LLION BECAUSE THERE WAS NOT A SINGLE INCRIMINATING DOCUMENT O R ANY EVIDENCE FOUND ON THE BASIS OF WHICH THE ASSESSIN G OFFICER COULD REJECT THE BOOK RESULTS OF PURCHASE/SAL E OF SILVER BULLION. NO ADDITION CAN BE MADE ON ESTIMATION S AND ON HYPOTHETICAL GROUNDS WITH REGARD TO SALE OF SILVER BULLION. WE ARE ALSO OF THE VIEW THAT NOT ONLY THE ENHANCEMENT MADE BY THE CIT(A) IN SILVER BULLION ACCOU NT BY 17.5% BUT THE APPLICATION OF GP RATE OF 1.25% APPLIE D BY THE LEARNED CIT(A) IS NOT JUSTIFIED. WE, THEREFO RE, DELETE THE ADDITIONS MADE IN SILVER BULLION ACCOUNT FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 48 17. GROUND NO. 5 IN IT(SS) A NO. 241/IND/20 15 (ASSESSEES APPEAL) AND GROUND NO. 6 IN IT(SS) A NO. 254/IND/2015 (REVENUES APPEAL) IS REGARDING THE ADDITI ON SUSTAINED OF RS. 2,02,47,590/ - ON ACCOUNT OF UNACCOUN TED INVESTMENT IN A.Y. 2009-10. 18. THE FACTS, IN BRIEF, ARE THAT ON 26.1.2010 THE POLICE INTERCEPTED TWO PERSONS WITH 30 SILVER BARS W EIGHING 919.276 KGS VALUED AT RS.2,02,47,590/-. THEY WERE TRANSFERRING THE BULLION FROM THE RESIDENCE OF THE AS SESSEE AT GUMASTA NAGAR TO HIS OFFICE AT CHHOTA SARAFA, INDORE. THE POLICE SEIZED THE SILVER WHICH WAS REQUISITIONED BY DDIT (INV.) BY INVOKING PROVISIONS OF SECTION 152A OF THE ACT. THE ASSESSEE CLAIMED THAT THESE SILVER BARS WERE PURCHASED ON 25.8.2008 BY THE ASSESSEE AT AHMEDABAD FROM RIDDHI SIDDHI JEWELLERS 609.456 KGS AND M/S M.D . OVERSEAS 309.211 KGS AND THEN TRANSPORTED FROM BRANCH ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 49 OFFICE AT AHMEDABAD TO INDORE OFFICE BY RAJESH DRIVER OF THE ASSESSEE WHO CARRIED THE SAME BY VEHICLE NO. MP 41, D- 0175. THE ORIGINAL BILLS WERE HANDED OVER TO THE POL ICE. THE ASSESSING OFFICER DID NOT BELIEVE THE ASSESSEES EXP LANATION AND MADE THE ADDITION. THE LEARNED CIT(A) ALSO RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER AND NOTED THAT THERE ARE SUBSTANTIAL EVIDENCES AND MANY HOLES IN THE STORY OF THE ASSESSEE REGARDING PURCHASE OF SILVER AND HE ACCORDINGLY UPHELD THE ADDITION. HOWEVER, THE LEARNED CIT(A) ALLOWED THE BENEFIT OF TELESCOPING OF INCOME ADDED IN THE EARLIER YEARS BY ESTIMATING THE GROSS PROFIT. NO W THE ASSESSEE AS ALSO THE REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 19. BEFORE US, WHILE PLEADING ON BEHALF OF THE ASSE SSEE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FO R THE PURCHASE OF THIS SILVER, THE ASSESSEE HAS MADE ADVANCE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 50 PAYMENT THROUGH RTGS AND THE SELLERS HAVE CONFIRMED T HE TRANSACTIONS. THE BILLS WERE PRODUCED. EVEN THE BILLS OF EXCHANGE, WHICH WERE OBTAINED BY THE SELLER ON THE IM PORT OF GOODS, WERE ALSO PRODUCED. HE ALSO PLEADED THAT THE BAR NUMBERS ON THE SEIZED SILVER AND THE BAR NUMBERS IN T HE PURCHASE BILL WERE TALLYING. THESE SILVER BARS WERE PURCHASED FROM RIDDHI SIDDHI BULLION WHICH IS ASSESSE D TO TAX WHICH HAS DECLARED INCOME FOR MORE THAN RS.5 CROR ES. AS SUCH IT IS A REPUTED FIRM AND, THEREFORE, NOT BELI EVING THE BILLS ISSUED BY RIDDHI SIDDHI BULLION IS HIGHLY UNJUSTIFIED. HE, THEREFORE, PRAYED TO DELETE THE AD DITION. 20. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT NO PROOF OF TRANSPORT OF SILVER FROM AHMEDABAD TO IND ORE HAS BEEN FILED AND, THEREFORE, THE TRANSACTION IS UNEXPLAINED. HE, THEREFORE, PLEADED THAT THE AUTHORITIE S BELOW WERE JUSTIFIED IN MAKING THE ADDITION. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 51 21. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS MADE PAYMENT IN ADVANCE THROUGH RTGS AND SUBMITTED A BILL ISSUED BY RIDDHI SIDDHI BULLION. THE SELLER HAS ALSO CONFIRMED THE TRANSACTION. THE COPY OF BILL OF EXCHANGE OBTAINED FROM THE SELLER ON ACCOUNT OF IMP ORT OF GOODS WAS ALSO PRODUCED. SINCE IT WAS AN IMPORTED MATERIAL AND THE BAR NUMBERS WERE INSCRIBED ON THE SEIZ ED BARS WHICH TALLIED WITH THE PURCHASE BILLS, WE FIND NO MERIT IN SUSTAINING SUCH ADDITION. WE, THEREFORE, DIRECT TO DELETE THE SAME. 22. GROUND NO. 6 IN IT(SS) A NO. 241/IND/2015 I S REGARDING SUSTAINING THE ADDITION OF PURCHASES MADE FROM M/S HYUNDAI EXPORTS AT RS.17,85,88,277/- AS UNEXPLAINE D PURCHASES AND GROUND NO. 8 IN THE REVENUE APPEAL IN IT( SS) A NO. 254/IND/2015 IS REGARDING THE ISSUE OF UNACCOUN TED PURCHASES. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 52 23. DURING THE FINANCIAL YEAR 2008-09 RELEVANT TO A.Y. 2009-10 THE ASSESSEE HAS SHOWN PURCHASES FROM M/S HYUNDAI EXPORTS OF RS.17,85,88,277/-. AS PER THE ASSESSING OFFICER, THE ASSESSEE COULD PRODUCE THE OR IGINAL BILLS TO THE TUNE OF RS.12,56,94,400/- AND THE REMAIN ING BILLS WERE NOT PRODUCED. THE ASSESSING OFFICER OBSE RVED THAT BILL/TAX INVOICE DOES NOT BEAR THE OFFICIAL SEAL O F THE SELLER. IN PLACE OF SELLER, THE SPACE WAS FOUND BLANK. THE BILL ISSUED ON 17.9.2008 WAS NOT FOUND TO HAVE BEEN SIGNED BY THE SELLER AND THE ORDER NUMBER, DATE OF ORDER, D ELIVERY MEMO, ETC. WERE FOUND BLANK. HE OBSERVED THAT THE B ILLS PRODUCED CANNOT BE RELIED UPON AND ACCORDINGLY ADDITION WAS MADE. 24. AGAINST THE ADDITION SO MADE BY THE ASSESSIN G OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEAR NED CIT(A) WHO OBSERVED AS UNDER :- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 53 18.2 AS IS EVIDENT ENTIRE PURCHASE ACCOUNT OF P URCHASES OF RS.17,85,88,277/- FROM M/S HUNDAI EXPORT WAS MANIPULATED ONE. HOWEVER HAVING ARRIVED AT CONCLUSI ON OF QUESTIONABLE PURCHASE FROM ONE PARTY, IT DOES NOT L EAD TO SUCH CONCLUSION AUTOMATICALLY THAT ENTIRE OF SUCH A MOUNT IS TO BE ADDED IN HANDS OF APPELLANT, UNLESS IT CAN BE ES TABLISHED THAT SUCH PURCHASES WERE NOT FOR BUSINESS OF APPELL ANT, BUT FOR HIS PERSONAL CONSUMPTION. CERTAINLY SUCH PURCHA SE WAS NOT FOR PERSONAL CONSUMPTION, WHICH INDICATES PURCH ASE OF SUCH GOLD FROM GREY MARKET BEING INTRODUCED IN BOOK S THROUGH SUCH QUESTIONABLE PURCHASE BILLS, AS AND WH EN STOCK WAS SOLD AND CONFIRMS THE VIEW TAKEN BY UNDERSIGNED THAT BOTH SALES & PROFIT WERE SUPPRESSED. SUCH QUESTIONA BLE PURCHASE BILLS LEAD US TO SAME CONCLUSION OF ENHANC EMENT OF SALES & APPLICATION OF HIGHER GP RATE. SINCE IN THI S YEAR SALES HAVE ALREADY BEEN ENHANCED FROM RS.190.26 CRORE TO RS.223.96 CRORE AND GP IS ENHANCED FROM RS.1.01 CRO RE TO RS.2.79 CRORE I.E. BY RS.1,77,80,700, THAT DULY TAK ES CARE OF SUCH QUESTIONABLE PURCHASES. HENCE WHILE SUCH PURCHASES ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 54 OF RS.17,85,88,277/- ARE HELD AS UNEXPLAINED, THEIR SEPARATE ADDITION MADE BY AO IS HEREBY DELETED, AS ON THAT BASIS AS WELL AS FOR OTHER REASONS, GP ADDITIO N IS ALREADY MADE. IN THIS SENSE, GR. NO.10 OF APPEAL IS PARTLY ALLOWED. 25. AGAINST THE ABOVE FINDINGS OF THE LEARNED CI T(A), THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 26. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS.17,85,88,277/- IN A SMALL PARAGRAPH WITH A REMARK THAT THE ASSESSEE HAS SHOWN PURCHASES OF GOLD AND SILVER FR OM HYUNDAI EXPORTS SINCE THE ASSESSEE COULD PRODUCE THE ORIGINAL BILL TO THE TUNE OF RS. 12,56,94,400/- ONL Y AND REMAINING BILLS COULD NOT BE PRODUCED. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER OBSERVED THAT ON SOME OF THE BILLS OFFICIAL SEAL OF THE SELLER WAS NOT AFFIXE D, RECEIVER OF THE BILL HAS ALSO NOT SIGNED, THE DATE OF ORDER AND COLUMN ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 55 OF ORDER NUMBER AND DELIVERY MEMO ARE FOUND BLANK AND VARIOUS BILLS WERE SIGNED BY DIFFERENT PERSONS. HE SUBMITTED THAT CONFIRMED LEDGER COPY OF ACCOUNT WAS FI LED FROM THE FIRM HYUNDAI EXPORTS. THEY HAVE CONFIRMED TH E PURCHASES MADE BY THE ASSESSEE. FOR ALL THESE PURCHASES , THE ASSESSEE HAS MADE ADVANCE PAYMENTS THROUGH BANKING CHANNELS, WHICH IS EVIDENT FROM PAGE 168 OF THE PAPER BOOK AND COPIES OF ALL THE BANK STATEMENTS WERE FILED DURIN G THE ASSESSMENT PROCEEDINGS AND ALL THE ENTRIES IN CONNECTI ON WITH THE PAYMENT FOR THESE PURCHASES WERE RECORDED I N THE BOOKS OF ACCOUNTS. HE ALSO PLEADED THAT BEFORE THE LEAR NED CIT(A) ALL THE BILLS INCLUDING THE BILLS WHICH COULD NOT BE FILED BEFORE THE ASSESSING OFFICER, WERE FILED, WHI CH WERE VERIFIED BY HIM. THE LEARNED CIT(A) OBSERVED THAT TH E ASSESSEE HAS ENTERED IN THE STOCK REGISTER DIFFERENT PURCHASES. HE FURTHER SUBMITTED THAT THE CONFIRMATION ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 56 FROM THE SELLER HAS BEEN FILED, BILLS WERE PRODUCED, PURCHASES ARE ENTERED IN THE REGULAR BOOKS OF ACCOUNTS AND ALSO IN THE STOCK REGISTER, PAYMENTS FOR ALL THESE PU RCHASES WERE MADE THROUGH BANKING CHANNELS, ALL THESE PAYMENTS ARE VERIFIED FROM BOOKS OF ACCOUNTS AND BANK STATEMENTS . HE, THEREFORE, PLEADED THAT SUCH ADDITIONS ARE UNJUSTIF IED. 27. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ASSESSMENT ORDER. 28. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE ASSESSEE HAS FILED CONFIRMATION FROM THE SELLER, THE O RIGINAL BILLS WERE PRODUCED, THE PURCHASES ARE ENTERED IN THE REGULAR BOOKS OF ACCOUNTS AND STOCK REGISTER. THE PAY MENTS FOR THESE PURCHASES WERE MADE THROUGH BANKING CHANNELS THAT TOO IN ADVANCE, WHICH ARE VERIFIABLE FROM THE BOOKS OF ACCOUNTS AS WELL AS FROM THE BANK STATEMENTS. THE ASSESSEE HAS SUBMITTED NECESSARY DOCUMENTS AND EVIDENCE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 57 IN THE PAPER BOOK. KEEPING ALL THESE FACTS IN VIEW, W E FIND NO MERIT IN SUSTAINING THE ADDITION. HENCE, WE DELETE THE SAME. 29. GROUND NO. 7 IN IT(SS) A NO. 241/IND/2015 IS REGARDING SUSTENANCE OF ADDITION OF RS. 50 LACS MADE U/ S 68 OF THE ACT WHICH WAS RECEIVED FROM M/S PRAMILA INVESTORS & FINANCE LIMITED. THE ASSESSING OFFICER M ADE THE ADDITION OF RS.50 LACS BEING SUNDRY CREDIT BALANCE IN THE NAME OF M/S PRAMILA INVESTORS & FINANCE LIMITED BY HOLDING THAT IDENTITY, INCOME TAX RETURN AND BANK STATEMENT OF THE PARTY HAVE NOT BEEN FILED. THIS ACTIO N OF THE ASSESSING OFFICER WAS SUSTAINED BY THE LEARNED CI T(A). NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 30. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE HAS FILED CONFIRMATION WITH PAN ALONG WITH INCOME TAX RETURN OF M/S PRAMILA INVESTMENT & FINANCE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 58 LTD. THIS TRANSACTION WAS THROUGH BANKING CHANNELS. HE SUBMITTED THAT THIS AMOUNT WAS NOT RECEIVED AS LOAN BUT IT WAS RECEIVED FOR FUTURE TRADING MCX BUSINESS AND THIS AMOUNT WAS RECEIVED AS ADVANCE/MARGIN MONEY FOR TRADING IN MCX. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THE FOLLOWING DOCUMENTS BEFORE US :- I) CONFIRMATION CERTIFICATE ALONG WITH PAN OF THE CREDITOR M/S. PRAMILA INVESTMENT & FINANCE LTD, II) COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME FILED BY M/S. PRAMILA INVESTMENT & FINANCE LTD. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT F ROM THE COPY OF BANK STATEMENT OF M/S PRAMILA INVESTMENT & FINANCE LTD. FOR THE PERIOD FROM 01.02.2009 TO 31.03 .2009 IT IS CLEAR THAT THIS AMOUNT OF RS. 25 LACS EACH WAS TRANSFERRED TO THE ASSESSEE THROUGH MICR ON 28.02.200 9 AND 07.03.2009 AND THERE WAS NO CASH DEPOSIT IN THIS BANK ACCOUNT. HE ALSO SUBMITTED THAT THE ASSESSEE HIMSELF REQUESTED THE ASSESSING OFFICER TO ISSUE SUMMONS U/S 131 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 59 OF THE ACT FOR CALLING THE INFORMATION U/S 133(6) OF THE ACT DIRECTLY FROM THE PARTY. THE ASSESSING OFFICER THERE AFTER ISSUED LETTER TO THE ABOVE PARTY ON 18.3.2013 ASKING F OR COMPLIANCE BY 30.3.2013. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE PERIOD GIVEN BY THE ASSESSING OFFICER TO THE ABOVE PARTY WAS VERY SHORT WI THIN WHICH IT WAS NOT POSSIBLE FOR THE ABOVE PARTY TO APPEAR, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDI TION ONLY ON THE GROUND OF NON-COMPLIANCE WITH NOTICE U/S 131 OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE, THE REFORE, SUBMITTED THAT THE LEARNED CIT(A) WITHOUT CONSIDERIN G THESE FACTS, SIMPLY REJECTED THE ASSESSEES CONTENTIO N AND SUSTAINED THE ADDITION. 31. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW WITH THE SUBMISSION THAT THE ASSESSEE FAILED TO PROVE ITS CASE BEFORE THE LEARNE D ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 60 CIT(A) AND AS SUCH HE WAS FULLY JUSTIFIED IN MAINTAINING THE ADDITION MADE BY THE ASSESSING OFFICER. 32. WE HAVE HEARD BOTH THE SIDES. WE FIND FROM THE BANK STATEMENT OF M/S PRAMILA INVESTMENT & FINANCE LIMITED THAT THERE WAS BANK BALANCE OF RS.32.5 LACS ON TH E LAST DATE OF THE FINANCIAL YEAR I.E. ON 31.3.2009. THE INTEREST WAS PAID AFTER DEDUCTING TDS. THESE FACTS ARE SUFFICIENT TO ESTABLISH THAT THE ASSESSEE WAS ABLE TO BE DISCHARGE THE OBLIGATION CASTED UPON HIM U/S 68 OF THE ACT BY ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN THIS VIEW OF THE M ATTER, WE HAVE NO ALTERNATE BUT TO DELETE THE ADDITION. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO DELE TE THE ADDITION. THIS GROUND OF THE ASSESSEE IS, THEREFORE, ALLOWED. 33. GROUND NO. 7 IN THE REVENUES APPEAL IN IT (SS) 254/IND/2015 IS AGAINST DELETING THE ADDITION OF RS.4 5 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 61 LACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 34. THE LEARNED CIT(A) HAS DELETED THE ADDITION WITH THE FOLLOWING OBSERVATIONS :- 17. GR. NO. 9 OF APPEAL IS AGAINST ADDITION OF R S.45 LAKH U/S 68 OF THE I.T. ACT ON THE GROUND OF REPAYMENT O F AMOUNT FROM M/S MP REAL ESTATE. THE SAID SUM OF RS.45 LAKH WAS INVESTED BY APPELLANT IN THAT FIRM M/S MP REAL ESTA TE & DEVELOPERS, IN EARLIER YEARS AND IN THIS YEAR, SUCH AMOUNT OF PARTNERS CONTRIBUTION WAS MERELY RETURNED BACK BY THAT FIRM & HENCE IT CANNOT BE ADDED AS CASH CREDIT U/S 68 OF I.T., AS IT IS MERELY REFUND OF PARTNERS CONTRIBUTION REPAI D THROUGH CHEQUES. HENCE ADDITION OF RS.45 LAKH IS HEREBY DEL ETED. GR. NO.9 OF APPEAL IS ALLOWED. 35. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 62 36. AFTER HEARING THE PARTIES, WE FIND THAT THE LEARNED CIT(A) HAS DELETED THE ADDITION BY HOLDING THAT THE AMOUNT OF RS. 45 LACS WAS INVESTED BY THE ASSESSEE IN THE FI RM, M.P. REAL ESTATE & DEVELOPERS IN EARLIER YEARS AND IN T HIS YEAR THIS AMOUNT WAS RECEIVED AS PARTNERS CONTRIBUTION BY THAT FIRM. HENCE, THE ADDITION U/S 68 COULD NOT BE SUSTAINED AND IT WAS MERELY REFUND OF PARTNERS CONTRIBUTION REPAID THROUGH CHEQUE. THE LEARNED DR FAI LED TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A). W E, THEREFORE, AFTER HEARING BOTH THE PARTIES, SUSTAIN THE ORDER OF THE LEARNED CIT(A). HENCE, THIS GROUND OF THE REV ENUE STANDS DISMISSED. 37. GROUND NOS. 2 TO 4 IN IN IT(SS) A NO. 242/IND/2015 AND GROUND NOS. 1 TO 5 IN IN IT(SS) A N O. 255/IND/2015 ARE ALREADY DECIDED BY US WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2009-10 IN THE EARLIER PAR T ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 63 OF THIS ORDER. THEREFORE, THESE GROUNDS ARE DECIDED ACCORDINGLY. IT(SS) A NO. 242/IND/2015 & IT(SS) A. NO. 255/IND/2 015 A.Y. 2010-11 38. IN GROUND NO. 5 IN IT(SS) A NO. 242/IND/20 15 AND GROUND NOS. 6 AND 7 IN IT(SS) A NO. 255/IND/2015 RELATE TO ARBITRATION AWARD. 39. THE FACTS OF THE CASE ARE THAT DURING THE COURSE O F SEARCH AT THE PREMISES OF SHRI KESHAV NACHANI, ONE LOO SE PAPER PAGE 53 LPS-1/7 WAS FOUND AND SEIZED. IT WAS AN ARBITRATION AWARD. AS PER THIS AWARD, THE ASSESSEE HAS ENTERED INTO AN AGREEMENT FOR SALE OF PROPERTY OWNED BY HIM AT KHAJRANA VILLAGE AND RECEIVED RS.2,50,00,000/- . FOR SOME REASON THERE WAS A DISPUTE BETWEEN BOTH THE PARTIE S. THREE ARBITRATORS WERE APPOINTED. IN THIS AWARD IT HAS BEEN STATED THAT BECAUSE OF NON-PERFORMANCE OF AGREEMENT AND ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 64 NON-REGISTRATION OF DOCUMENTS, THE ASSESSEE WOULD PAY A SUM OF RS. 5 CRORES AS UNDER :- (I) 11.8.2009 RS.1,00,00,000/- (II) 31.01.2010 RS.1,00,00,000/- (III) 30.4.2010 RS. 1,50,00,000/- (IV) 31.8.2010 RS. 1,50,00,000/- THE ASSESSING OFFICER IN HIS ORDER FOR THE ASSESSMEN T YEAR 2010-11 OBSERVED THAT THE ASSESSEE HAS PAID RS.2 CRORE S WHICH WAS FROM HIS UNDISCLOSED INCOME. HE ACCORDINGLY MADE THE ADDITION. 40. BEING AGGRIEVED BY THE ADDITION SO MADE BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFOR E THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE AND ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE, CONFIRMED THE ADDITION MADE BY THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 65 ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. 41. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE CONTENDED THAT KHAJRANA LAND BELONGS TO THE ASSESSEE AND HIS MATERNAL UNCLE, SHRI KESHAV NACHANI, WHO WAS LOOKING AFTER THIS LAND. THIS LAND WAS NOTIFIED FOR ACQUISITION BY INDORE DEVELOPMENT AUTHORITY. HE SUBMITTED THAT AS SU CH THE SAID LAND COULD NOT BE TRANSFERRED TO ANYBODY. THE AGREEMENT WAS ENTERED INTO AND THE PAYMENT OF RS.51 LAC S WAS RECEIVED WHICH WAS DULY ENTERED IN THE BOOKS OF ACCOUNTS. SINCE THE AGREEMENT COULD NOT BE ACTED UPON BECAUSE OF THE SCHEME ANNOUNCED BY THE IDA, THE MATTER WAS REFERRED FOR ARBITRATION BY THE BUYER BY APPOINTIN G THREE ARBITRATORS. THEREAFTER THE AWARD WAS MADE WHICH WAS SIGNED BY TWO ARBITRATORS ONLY AND THE THIRD ARBITRAT OR SHRI TEJENDER SINGH SUCHASINGH DID NOT SIGN THE SAME. THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 66 LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTE D THAT IN THE ABSENCE OF SIGNATURES OF ALL THE ARBITRATORS ON T HE AWARD, IT CANNOT BE SAID TO BE AN AWARD IN THE EYES OF L AW. HE FURTHER SUBMITTED THAT THIS AGREEMENT ALSO PROVIDED THAT IN CASE THE ASSESSEE ENTERS INTO AN AGREEMENT WITH THIRD PARTY FOR SALE OF THE LAND, HE WILL HAVE TO MAKE FULL PAYMENT TO THE PURCHASER. IT WAS ALSO PLEADED THAT THIS ESTABLISHES THAT THE ASSESSEE HAS NEITHER MADE ANY PAYMENT FOR NON-PERFORMANCE OF THE AGREEMENT NOR RECEIVED ANY AMOUNT EXCEPT RS. 51 LACS. IT WAS ALSO CL AIMED THAT WHEN THE ASSESSING OFFICER ASKED TO PRODUCE THE ARBITRATORS, THE ASSESSEE ARRANGED THEIR APPEARANCE ON THE APPOINTED DATE BUT THE ASSESSING OFFICER WAS NOT PRES ENT ON THE APPOINTED DATE. THEREFORE, THE ASSESSING OFFIC ERS OBSERVATION THAT THE ASSESSEE FAILED TO PRODUCE THE ARBITRATORS IS FACTUALLY INCORRECT. IT WAS ALSO POINTED O UT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 67 THAT ALL THE THREE ARBITRATORS FILED AFFIDAVITS ON 08.08. 2014, DULY NOTARIZED WHICH WERE SUBMITTED BEFORE LOWER AUTHORITIES, COPIES OF WHICH WERE SUBMITTED AT PAGE NO S. 17 TO 28 OF PAPER BOOK II. SHRI KAMAL KISHORE NACHANI, ONE OF THE ARBITRATORS, APPEARED BEFORE THE ASSESSING OFFIC ER IN RESPONSE TO SUMMONS U/S 131 OF THE ACT. HIS STATEMEN T WAS RECORDED BY THE ASSESSING OFFICER WHICH WAS NEVER CONFRONTED TO THE ASSESSEE. IT WAS ALSO PLEADED THAT TH IS ADDITION HAS BEEN MADE BY REFERRING TO SECTION 292-C O F THE ACT BUT THESE DOCUMENTS WERE NOT FOUND FROM THE PRE MISES OF THE ASSESSEE. THUS, THE BASIC PRESUMPTION, AS PROV IDED IN SECTION 292-C OF THE ACT, IS MISSING. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS AGREEMENT, IF AT AL L RELIED UPON, SHOULD BE READ AS A WHOLE. THERE IS NO DOCUMENT OR EVIDENCE THAT THE ASSESSEE HAS MADE ANY PAYMENT IN COMPLIANCE WITH THIS AWARD. COMPLETE DETAIL S ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 68 WERE FILED BEFORE THE LEARNED CIT(A) WHICH INCLUDE AFFIDAVITS OF ALL THE ARBITRATORS. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE BUYER UNDER THE AGREEMENT, M/S LAL SAI ESTATE PRIVATE LIMITED ISSUED A CHEQUE OF RS.1.99 CRORE BUT IT WAS NOT ENCASHED AS THE SCHEME WAS PRONOUNCED BY INDORE DEVELOPMENT AUTHORITY, HENCE CHEQUE WAS RETURN ED BACK AND CANCELLED. THE ASSESSMENT ORDER OF M/S LAL SAI ESTATE PRIVATE LIMITED WAS ALSO FILED BEFORE THE AUTHORI TIES BELOW. HE SUBMITTED THAT THESE FACTS ALSO FIND MENTIO N IN THE ASSESSMENT ORDER OF M/S LAL SAI ESTATE PRIVATE LIMIT ED, THE PARTY WITH WHOM SAID AGREEMENT WAS EXECUTED. IT WAS CLAIMED THAT POSSESSION OF THE LAND WAS NOT GIVEN AND TH E LAND WAS SHOWN IN FIXED ASSETS IN THE BALANCE SHEET IN AL L THESE YEARS. HE SUBMITTED THAT THE SAID LAND COULD NOT BE TRANSFERRED EVEN TODAY BECAUSE OF THE SCHEME OF IDA. HE ALSO SUBMITTED THAT THIS DOCUMENT ONLY MENTIONS THAT T HE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 69 ASSESSEE WOULD MAKE PAYMENT BUT THE ASSESSEE HAS NOT DONE SO. IT IS ALSO CLAIMED THAT THE ASSESSEE HAS NEITHE R RECEIVED ANY PAYMENT OF RS. 2,50,00,000/- AS MENTIONE D IN THE ARBITRATION AWARD NOR HAS EXECUTED ANY REGISTRY TILL DATE. 42. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS NO CASE. 43. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE SO CALLED AWARD WAS NOT COMPLETE AS ONE OF THE ARBITRATORS D ID NOT SIGN ARBITRATION AWARD. WE FURTHER FIND THAT THE ADDITION HAS BEEN MADE ONLY ON THE BASIS OF PRESUMPTION THAT THE ASSESSEE MIGHT HAVE RECEIVED THE AMOUNT AS PER THE AWARD BUT NO POSITIVE EVIDENCE HAS BEEN BROUGHT O N RECORD TO SUGGEST THAT SUCH AMOUNT WAS RECEIVED BY TH E ASSESSEE IN TERMS OF THE AGREEMENT/AWARD. IT IS ALSO A F ACT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 70 THAT THE ASSESSEE RECEIVED RS.51 LACS AS ADVANCE THROUG H BANKING CHANNEL WHICH WAS RETURNED BACK TO THE INTENDIN G BUYER. THE ASSESSEE CONTINUED TO SHOW THIS PLOT OF LAND IN THE FIXED ASSETS IN HIS BALANCE SHEET. IT IS ALSO A FACT THAT INDORE DEVELOPMENT AUTHORITY DECLARED SCHEME NO. 131 ON THIS LAND. THEREFORE, THE ABOVE AGREEMENT COULD NOT BE MATERIALIZED AND AS SUCH THE LAND COULD NOT BE TRANSFERRE D. IT WAS INFORMED THAT THIS LAND IS EVEN TODAY UNDER TH E SCHEME AND NOT TRANSFERABLE. ALL THE THREE ARBITRATORS FILED AFFIDAVITS WHICH CONTAIN THE ENTIRE DETAILS WITH THE ASSERTION THAT NO DAMAGES WERE PAID BY THE ASSESSEE BECAUSE OF NON-PERFORMANCE OF THE AGREEMENT DUE TO FOR CE- MAJEURE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND HOLD THAT THE ADDITION RS. 2 CRORES MADE BY THE ASSESSING OFFICER F OR A.Y. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 71 2010-11 IS NOT SUSTAINABLE. WE, THEREFORE, DIRECT T O DELETE THE SAME. 44. GROUND NOS. 6, 7 AND 8 ARE AGAINST SUSTAINING THE ADDITION MADE U/S 68 OF THE ACT OF RS.3 CRORES FROM M/S SAMBHAV EXPORTS, RS. 3 CRORES FROM M/S KHUSI EXPORTS AND RS. 1 CRORE FROM VINAY GEMS AND ALSO INTEREST PAID OF RS.10,71,780/- TO M/S SAMBHAV EXPORTS, RS.14,46,575/ - TO M/S KHUSHI EXPORTS AND RS.7,59,452/- TO M/S VINAY GEMS. 45. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED IN THE ASSESSMENT ORDER THAT THE ABO VE AMOUNTS WERE RECEIVED AS UNSECURED LOAN. ACCORDING TO HIM, THE ASSESSEE FAILED TO PROVE GENUINENESS AND CREDITWORTHINESS OF THESE PARTIES AND ALSO FAILED TO FU RNISH THEIR IDENTITY PROOF. HE ALSO OBSERVED THAT THE AMOUN T OUTSTANDING TOWARDS M/S KHUSI EXPORTS AND M/S VINAY ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 72 GEMS WAS WRONGLY CLUBBED UNDER THE HEAD SUNDRY CREDITORS ALTHOUGH NO GOODS WERE PURCHASED FROM THEM . FURTHER, THE ACCOUNTS OF M/S SAMBHAV EXPORTS WERE SQUARED UP DURING THE YEAR ITSELF. ON ENQUIRY BY THE DD IT (INVESTIGATION), MUMBAI, IT WAS FOUND THAT THE ABOVE CREDITORS HIRED A TABLE SPACE IN THE PREMISES OF HARSHAD GOVIND MEHTA AND IN THE STATEMENT SHRI HARSHAD GOVIND MEHTA STATED THAT THE TABLE SPACE HAS BEEN HIRED TO ABHISHEK P. JAIN BUT NEITHER ANY DIRECTOR OR EMPLOYE E WAS FOUND AT THE SPACE NOR ANY NEW ADDRESS WAS FURNISHED. THE ASSESSING OFFICER, THEREFORE, MADE THE ADDITIONS U/S 68 OF THE ACT. 46. BEING AGGRIEVED BY THE ORDER OF THE ASSESSIN G OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEAR NED CIT(A). AFTER CONSIDERING THE ARGUMENTS OF THE ASSES SEE AND THE FACTS OF THE CASE, THE LEARNED CIT(A) SUSTAINED THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 73 ADDITION BY HOLDING THAT THIS ADDITION SHALL BE OVER AND ABOVE THE ADDITION OF GROSS PROFIT AND ALSO CONFIRMED T HE DISALLOWANCE OF INTEREST PAID TO THESE PARTIES. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 47. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER :- ADDITION U/S. 68 IN THE NAME OF SAMBHAV EXPORTS L IMITED THE LD. AO HAS MADE THE ADDITIONS OF RS. 3,00,00,00 0/- BEING THE SUNDRY CREDIT BALANCE IN THE NAME OF SAMB HAV EXPORTS LIMITED ON THE GROUND THAT THE IDENTITY, AN D CREDITWORTHINESS OF THE CREDITOR HAS NOT BEEN PROVE D BY FILING THE COPY OF THE INCOME TAX RETURN AND THE BANK STATEMENTS OF THE SAID PARTY. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION WITH PAN NO. IT WOULD BE NOTICED THAT THE TRANSACTION HAS TAKEN PLACE THR OUGH BANKING CHANNEL. THE LD. AO ISSUED THE COMMISSION U/S131(1)(D) TO DDIT INVESTIGATION. IN THE REPORT T HE LD. DDIT CLEARLY MENTIONED THAT THE SAMBHAV EXPORTS LIM ITED IS IN EXISTENCE AND HAS A TABLE SPACE IN THE PREMIS ES OF HARSHAD MEHTA, HOWEVER, THE OTHER ADDRESS TO RECORD A STATEMENT WAS NOT MADE AVAILABLE. THE LD.CIT(A) HAS SIMPLY RAISED CERTAIN DOUBTS ABOUT THE TRANSACTIONS AND UPHELD THE ADDITIONS. IT IS HUMBLY SUBMITTED THAT T HE TRANSACTION IS ROUTED THROUGH BANKING CHANNEL AND T HE EXISTENCE OF M/S SAMBHAV EXPORTS WAS FULLY PROVED. THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 74 CONFIRMATION LETTER WAS FILED FROM THE ABOVE NAMED PARTY. SINCE ALL NECESSARY DETAILS HAVE BEEN FILED THE ADD ITIONS UPHELD MAY PLEASE BE DELETED. ADDITION U/S. 68 IN THE NAME OF KHUSHI EXPORTS. THE LD. AO HAS MADE THE ADDITIONS OF RS. 3,00,00,00 0/- BEING THE SUNDRY CREDIT BALANCE IN THE NAME OF M/S. KHUSHI EXPORTS ON THE GROUND THAT THE IDENTITY, THE INCOME TAX RETURN AND THE BANK STATEMENTS OF THE SAID PARTY H AVE NOT BEEN FILED. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION WITH PAN NO. IT WOULD BE NOTICED THAT THE TRANSACTION HAS TAKEN PLACE THROUGH BANKING CHANNEL . VIDE OUR LETTER DATED 11/02/2013 (PAGE 5 OF COMMON PB), THE ASSESSEE HAS REQUESTED THE LD. AO TO ISSUE NOTICE U /S, 131 OR TO CALL FOR INFORMATION U/S. 133(6) DIRECTLY FRO M THE PARTY. THE LD.CIT(A) HAS UPHELD THE ADDITIONS ON THE GROUN D THAT THE PARTY WAS NOT PRODUCED FOR VERIFICATION. SINCE ALL NECESSARY DETAILS HAVE BEEN FILED THE ADDITIONS UPH ELD MAY PLEASE BE DELETED. ADDITION U/S. 68 IN THE NAME OF VINAY GEMS. THE LD. AO HAS MADE THE ADDITIONS OF RS. 1,00,00,00 0/- BEING THE SUNDRY CREDIT BALANCE IN THE NAME OF M/S. VINAY GEMS ON THE GROUND THAT THE IDENTITY, THE INCOME TA X RETURN AND THE BANK STATEMENTS OF THE SAID PARTY HAVE NOT BEEN FILED. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION WITH PAN NO. IT WOULD BE NOTICED THAT THE TRANSACTION HAS TAKEN PLACE THROUGH BANKING CHANNEL . VIDE OUR LETTER DATED 11/02/2013 (PAGE 5 OF COMMON PB), THE ASSESSEE HAS REQUESTED THE LD. AO TO ISSUE NOTICE U /S, 131 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 75 OR TO CALL FOR INFORMATION U/S. 133(6) DIRECTLY FRO M THE PARTY. THE LD.CIT(A) HAS UPHELD THE ADDITIONS ON THE GROUN D THAT THE PARTY WAS NOT PRODUCED FOR VERIFICATION. SINCE ALL NECESSARY DETAILS HAVE BEEN FILED THE ADDITIONS UPH ELD MAY PLEASE BE DELETED. KIND ATTENTION IS INVITED TO DETAILED SUBMISSIONS M ADE BEFORE ASSESSING OFFICER (PAGE 335 TO 337 OF PAPER BOOK DA TED 07.01.2016) WHEREIN COMPLETE EXPLANATION REGARDING LOCATION OF THE COMPANY AND ITS DIRECTORS ALONG WITH PAN AND TELEPHONE NOS. WERE GIVEN. THE CONFIRMATION OF THE LANDLORD M/S. MEHTA INDUSTRIAL CORPORATION WHO HAD GIVEN THE PREMISES (TABLE SPACE) ON RENT TO THE LEN DER COMPANY WAS ALSO FILED. THE BANK STATEMENTS AND THE COPIES OF THE IT RETURNS WERE ALSO FILED WHICH PROV ES THE FACT BEYOND DOUBT THAT THE LENDER COMPANY WAS NOT A PAPER COMPANY AS ALLEGED. KIND ATTENTION IS INVITED TO PAGE NOS. 339 TO 345 OF PAPER BOOK DATED 07.01.2016 WHICH INCLUDES CONFIRMATION OF ACCOUNTS BY THE DEPOSITOR, COPY OF BANK STATEMENT OF AXIS BANK AND INDUSIND BANK AS WELL COPY OF INCOME TAX RETURN SUBMITTED BEFORE AO ARE ANNEXED WHICH PROVES NOT ON LY THE IDENTITY BUT GENUINENESS OF TRANSACTION ALSO WH ICH WAS JUST DOUBTED UPON BY THE AO. THE REPORT OF DDI T (INV.) BOMBAY WHO HAD ISSUED SUMMON U/S 131 TO THE DIRECTOR OF THE COMPANY ALSO REVEALED THE FACT THAT THE COMPANY IS IN EXISTENCE AND HAVING TABLE SPACE WITH ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 76 M/S. MEHTA INDUSTRIAL CORPORATION. THUS, NOT ONLY T HE IDENTITY OF THE COMPANY WAS PROVED FROM THE FACT TH AT IT IS DULY INCORPORATED UNDER THE COMPANIES ACT BUT IT S CAPACITY AND GENUINENESS OF TRANSACTION WAS ALSO PROVED. INTEREST WAS PAID ON THE DEPOSITS ON WHICH TAX WAS DEDUCTED AT SOURCE. IN SUPPORT OF THE ABOVE SUBMISSIONS, THE LEARNED COU NSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING JUDGMENTS :- I. CIT VS. LOVELY EXPORTS P. LTD.(2008) 11 ITJ 370 (SC ) II. METACAM INDUSTRIES 245 ITR 160 (MP). III. PITHAMPUR COETZA 244 ITR 442. IV. CIT V/S TANYA INDUSTRIES 322 ITR 394.(BOM.) V. CIT V/S JUGAL KISHORE BAKLIWAL 366 ITR 217(RAJ) VI. CIT V/S BHAWANI OIL MILLS PVT. LTD.239 ITR 445 (RAJ .) VII. CIT V/S VARINDER RAWLLEY 366 ITR 232(PUN) VIII. CIT V/S DHARAMDEV FINANCE PVT. LTD. 43 TAXMANN.COM 395 (GUJ.) IX. ANANT STEELS PVT. LTD. VS. ACIT; IT(SS)A NOS. 31, 28, 29 & 30/IND/2010 ORDER DATED 18.11.2015 (INDORE BENCH) ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 77 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT I N VIEW OF THE ABOVE JUDGMENTS, THE ADDITIONS MADE U/S 68 OF THE ACT DESERVE TO BE DELETED. 48. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 49. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE SIDES IN THE WAKE OF THE FACTS OF THE CASE AND THE DECISIONS CITED BEFORE US. WE FIND THAT INDORE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 18.11.2015 IN THE CASE OF M/S ANANT ST EEL PVT. LTD. VS. ACIT; IT(SS) A NOS. 31, 28, 29 & 30/I ND/2010 HAVE DECIDED AN IDENTICAL ISSUE AT LENGTH WHEREIN IT WAS OBSERVED AS UNDER :- 5. DURING HEARING THE LEARNED SENIOR DR CONTEN DED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNA L IN THE CASE OF M/S AGRAWAL COAL CORPORATION DECIDED BY THI S BENCH ON 31ST OCTOBER, 2011 IN ITA NOS. 151/IND/200 9, 283, 136 AND 34/IND/2010, 190/IND/09, 158/IND/2010 ETC. WE ARE NOT AGREEING WITH THIS PROPOSITION BECA USE IN ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 78 THAT CASE THE IDENTITY OF SUCH SHARE APPLICANTS WAS NOT PROVED AND EVEN THE ADDRESSES OF SUCH SHARE APPLICA NTS WERE FOUND NON-EXISTENT/BOGUS. IN VIEW OF THOSE FAC TS, THIS BENCH CONCLUDED THAT THE DECISION FROM HON'BLE APEX COURT PRONOUNCED IN LOVELY EXPORTS PRIVATE LIMITED IS NOT APPLICABLE AND THE ADDITION WAS CONFIRMED IN THE HA NDS OF THE ASSESSEE. HOWEVER, IN THE PRESENT APPEAL, SINCE THE IDENTITY OF SUCH SHARE SUBSCRIBERS, AS WE HAVE DISC USSED ABOVE, WAS ESTABLISHED, THEREFORE, NO ADDITION U/S 68 IS WARRANTED IN THE CASE OF THE ASSESSEE COMPANY. SO F AR AS THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RATHI FINLEASE LIMITED (2008) 215 C TR (MP) 249 IS CONCERNED, IN THAT CASE, DESPITE SEVERAL OPP ORTUNITIES, THE ASSESSEE WAS UNABLE TO PROVIDED CONFIRMATIONS F ROM THE CONCERNED PARTIES, THEREFORE, THE HON'BLE COURT REA CHED TO A PARTICULAR CONCLUSION, WHEREAS IN THE PRESENT APPEA LS, THE IDENTITY OF SHARE APPLICANTS, NAMELY, M/S. SHRILAL TRADERS PRIVATE LIMITED, M/S LAKEVIEW VINIMAY PRIVATE LIMIT ED, M/S SAHARSH SUPPLIERS PRIVATE LIMITED AND M/S AMBITIONS TIE UP PRIVATE LIMITED WAS ESTABLISHED, THEREFORE, IN VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOV ELY EXPORTS PRIVATE LIMITED (SUPRA), THIS JUDICIAL DECI SION FROM HON'BLE HIGH COURT MAY NOT HELP THE REVENUE. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 79 6. SO FAR AS THE ARGUMENT OF THE LEARNED SR. DR AN D THE OBJECTIONS / OBSERVATIONS OF THE LEARNED ASSESSING OFFICER/LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) THAT THESE ARE PAPER COMPANIES ONLY, THE CONTENTION RAIS ED ON BEHALF OF THE ASSESSEE IS THAT THE NET WORTH (AS ON 31.3.2007) OF SUCH SHARE SUBSCRIBERS IS RS. 317.31 LACS, RS. 424.58 LACS, RS. 385.71 LACS AND RS. 289.01 LACS. W E ARE NOT GOING ON THE ISSUE OF WORTH OF THESE SHARE APPL ICANTS BECAUSE THE HON'BLE APEX COURT IN THE CASE OF LOVEL Y EXPORTS PRIVATE LIMITED (SUPRA) HELD THAT EVEN IF SUCH SHAR E APPLICANTS ARE BOGUS, BUT THEIR IDENTITY IS PROVED, THEN NO ADDITION IS WARRANTED IN THE CASE OF THE ASSESSEE. SO FAR AS THE DECISIONS CITED IN THE IMPUGNED ORDER ARE CONCE RNED, IN VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS (SUPRA), HAS REMAINED FOR ACADEMIC I NTEREST ONLY, BEING ON DIFFERENT FACTS, THEREFORE, WE ARE R EFRAINING OURSELVES IN DEALING WITH EACH AND EVERY CASE INDIV IDUALLY, ESPECIALLY IN THE LIGHT OF THE EVIDENCES, FILED BY THE ASSESSEE, EVIDENCING THAT THE IDENTITY OF SUCH SHARE APPLICAN TS WAS VERY MUCH PROVED BY FURTHER FILING OF CONFIRMATION BY THEM. 7. IN VIEW OF THESE FACTS, THE DECISION FROM HON'BL E APEX COURT IN LOVELY EXPORTS (SUPRA) AND UNCONTROVERTED FACT THAT THE SUMMONS ISSUED TO THE IMPUGNED SHARE APPLICANTS WERE DULY RECEIVED BY THEM WITH FURTHER FILING OF CONFIR MATION BY ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 80 SUCH SHARE APPLICANTS, AT LEAST THEIR IDENTITY IS P ROVED, THEREFORE, THIS APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OAS IS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011 ) HAS HELD AS UNDER:- (I) SECTION 68 PROVIDES THAT IF THE ASSESSEE IS NOT ABLE TO GIVE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOUR CE OF A SUM FOUND CREDITED IN HIS BOOKS, THE SUM MAY BE TRE ATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. THE INITIAL BURDEN IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT AND TO DO SO, THE ASSESSEE IS REQUIRED TO PROVE (A) IDENTITY OF THE SHAREHOLDER (B) GENUINENESS OF TRANSACTION AND (C) CREDIT WORTHINESS OF SHAREHOLDERS; (A) THE IDENTITY OF THE SHAREHOLDER CAN BE PROVED BY EITHER (IF INDIVIDUAL) PRODUCING HIM BEFORE THE AO OR BY WAY OF DOCUMENTS, REGISTERED ADDRESS, PAN ETC; ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 81 (B) THE GENUINENESS OF THE TRANSACTION CAN BE SHOWN FROM THE FACT THAT THE MONEY HAS BEEN RECEIVED FROM THE SHAREHOLDER. IF THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE C HANNELS, THE GENUINENESS OF TRANSACTION WOULD BE PROVED. OTH ER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACTION CO ULD BE THE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPL ICATION FORMS, SHARE TRANSFER REGISTER, ETC; (C) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE THESE DOCUMENTS ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGE TH E ONUS CAST UPON HIM . THE AO CAN DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE WITH COGENT REASONS AND MATERIALS BUT NOT ON THE REALM OF SUSPICION; (II)IF THE ASSESSEE HAS PRODUCED DOCUMENTS LIKE PAN CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS TH E ONUS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 82 SHIFTS UPON THE AO AND IT IS FOR HIM TO REACH THE SHAREHOLDERS AND THE AO CANNOT BURDEN THE ASSESSEE MERELY ON THE GROUND THAT SUMMONS ISSUED TO THE INVESTORS WERE RETURNED BACK WITH THE ENDORSEMENT NOT TRACEABLE (V) THERE IS AN ADDITIONAL BURDEN ON THE DEPARTMEN T TO SHOW THAT EVEN IF SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED IN COME OF THE ASSESSEE. 50 . WE ALSO FIND THAT THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF SHRI BARKHA SYNTHETICS LIMITED VS. CIT (2006) 283 ITR 377 HELD THAT IF THE TRANSACTIONS ARE MAD E THROUGH BANKING CHANNELS AND ONCE THE EXISTENCE OF TH E PERSONS IS SHOWN, THE ASSESSEE COMPANY CANNOT BE HELD RESPONSIBLE TO PROVE WHETHER THAT PERSON HIMSELF HAS INVESTED THE SAID MONEY OR SOME OTHER PERSON HAD MADE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 83 INVESTMENT. THE BURDEN THEN SHIFTS ON THE REVENUE T O ESTABLISH THAT SUCH INVESTMENT HAS COME FROM THE ASSESS EE ITSELF. IN THE ABSENCE OF SUCH FINDING, ADDITION CANN OT BE MADE U/S 68 IN THE HANDS THE ASSESSEE. 51. WE, THEREFORE, FOLLOWING THE ABOVE DECISIONS OF DIFFERENT COURTS INCLUDING THE DECISION OF THE INDO RE BENCH OF THE TRIBUNAL IN THE CASE OF M/S ANANT STEEL PVT. L TD. (SUPRA), DIRECT THE AUTHORITIES BELOW TO DELETE THE AD DITION MADE U/S 68 OF THE ACT. IT(SS) A NO. 255/IND/2015 FOR A.Y. 2010-11 (REVENUES APPEAL) 52. GROUND NO. 6 IN THIS APPEAL IS AGAINST DELETING TH E ADDITION OF RS. 2 CRORES RELATING TO ARBITRATION AWARD A S DISCUSSED ABOVE. THE REVENUE CLAIMS THAT THE ADDITION H AS BEEN DELETED BY THE LEARNED CIT(A) WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD. THE REVENUE CLAIMED THAT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 84 THERE WAS NO DIRECT NEXUS BETWEEN THE INCOME OFFERED FOR TAXATION AND THE AMOUNT TAXED. 53. WE HAVE HEARD BOTH THE SIDES. WHILE DECIDING GROUND NO. 5 IN THE ASSESSEES APPEAL, WE HAVE HELD THAT THIS ARBITRATION AWARD, ON THE BASIS OF WHICH THIS ADDIT ION HAS BEEN MADE, WAS NOT EFFECTED. THEREFORE, THIS ISSUE GETS COVERED BY OUR DECISION IN GROUND NO. 5 IN THE ASSES SEES APPEAL RELATING TO ARBITRATION AWARD. WE, THEREFORE, FOR THE REASONS MENTIONED THEREIN, DISMISS THIS GROUND OF TH E REVENUE. 54. GROUND NO. 7 IN THIS APPEAL IS AGAINST DELETING T HE ADDITION OF RS. 2,71,75,000/-. THE REVENUE CLAIMS THAT THIS ADDITION HAS BEEN DELETED WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD TO PROVE THAT THE SAID AMOUNT WAS INCLUDED IN THE AMOUNT ALREADY OFFERED FOR TAXATION AND THERE WAS NO DIRECT NEXUS BETWEEN THE TWO. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 85 55. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE IN PARAS 16 AND 16.1 WHICH ARE REPRODUCED HEREUNDER :- 16. GR. NO. 10 OF APPEAL IS AGAINST THE ADDITION OF RS.2,71,75,000/- ON THE GROUND OF ENTRIES IN PEN-DR IVE. DURING SIMULTANEOUS SEARCH AT OFFICE PREMISES OF AP PELLANTS MATERNAL UNCLE SHRI KESHAV NACHANI A PEN-DRIVE INVENTORIZED AT S.NO.1 OF ANN. BS-1 DATED 26-11-201 0 WAS SEIZED FROM ORBIT MALL OFFICE. FROM THIS PEN DRIVE UNACCOUNTED INVESTMENT OF APPELLANT WAS FOUND OF A TOTAL OF RS.5.40 CRORE IN C-21 MALL BHOPAL AND GLOBUS GREEN AREA PROJECT, BHOPAL BOTH BEING PROJECT OF SHRI KESHAV N ACHANI & PARTNERS. ON THAT BASIS APPELLANT ADMITTED FOLLOWIN G UNACCOUNTED INVESTMENT:- AY 2010-11 RS.2,71,75,000/- AY 2011-12 RS.1,98,36,250/- AY 2011-12 RS.70,38,750/- (CASH SEIZED AND DISCLOSED AT RS.84 LACS) 16.1 ON THE BASIS OF SUCH ADMISSION, WHILE AO ACCEP TED THAT PART OF SUCH INVESTMENT OF RS.70,38,750/- WAS RETURNED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 86 BACK TO APPELLANT AS CASH & WAS COVERED IN DISCLOSU RE OF CASH SEIZED OF RS.84 LAKHS, HE MADE ADDITION OF RS.2,71, 75,000/- AND RS.1,98,36,250/- AS UNACCOUNTED INVESTMENT MADE BY APPELLANT IN BHOPAL PROPERTIES (C-21 MALL AND GLOBU S GREEN ACRE PROJECT) IN AY 2010-11 AND AY 2011-12. IT IS T HEREFORE HELD THAT AS PER SEIZED DOCUMENTS FROM PEN DRIVE AN D AS PER ADMISSION OF APPELLANT, THERE IS NO DOUBT THAT AMOU NT OF RS.2,71,75,000/- WAS UNACCOUNTED INVESTMENT OF APPE LLANT IN AY 2010-11, IN BHOPAL PROPERTY BUT SINCE AN ADDITIO N OF GROSS PROFIT OF RS.7.79 CRORE IS ALREADY CONFIRMED IN HAN DS OF APPELLANT , IN THIS YEAR, AS UNACCOUNTED PROFIT EAR NED, HENCE INVESTMENT OF RS.2,71,75,000/- THOUGH UNACCOUNTED W OULD BE MERELY APPLICATION OF UNACCOUNTED INCOME ALREADY TA XED IN HANDS OF APPELLANT. AS A RESULT WHILE AMOUNT OF RS.2.71 CRORE IS HELD AS UNACCOUNTED INVESTMENT, ITS ADDITI ON IS DELETED, SINCE THAT WILL TANTAMOUNT TO DOUBLE ADDIT ION. IN THIS SENSE, GR. NO.10 OF APPEAL IS PARTLY ALLOWE D. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 87 56. WE HAVE ALREADY DECIDED THE ISSUE REGARDING GROSS PROFIT WHEREIN WE HAVE DIRECTED THE ASSESSING OFFICE R TO WORK OUT THE GROSS PROFIT @ 0.25% ON THE RECORDED S ALES AND 1.25% ON THE ENHANCED TURNOVER BY 5%. THE QUANTIFICATION SHALL BE DONE BY THE ASSESSING OFFICER. THE LEARNED CIT(A) GRANTED RELIEF ON THE BASIS THAT THE ADD ITION OF GROSS PROFIT OF RS.7.79 CRORES WAS CONFIRMED IN T HE ASSESSEES CASE FOR THE ASSESSMENT YEAR 2010-11. WE, THEREFORE, FIND IT APPROPRIATE TO RESTORE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER TO WORK OUT THE ADDITIONAL P ROFIT BY APPLICATION OF GROSS PROFIT ON ENHANCED TURNOVER AS DIR ECTED IN EARLIER PARA OF THIS ORDER AND TO GIVE CREDIT FOR TH E SAME. IF ANY BALANCE TOWARDS INVESTMENT REMAINS, IT SHALL BE SUSTAINED. 57. IN GROUND NO. 8 THE REVENUE HAS RAISED THE ISSUE OF DELETING THE ADDITION OF RS. 9,47,306/-. THE LEARN ED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 88 CIT(A) HAS DEALT WITH THIS ISSUE IN PARA 17 WHICH IS REPRODUCED AS UNDER :- 17. GR. NO. 11 OF APPEAL IS AGAINST THE ADDITION OF RS.9,47,306/- AS A RESULT OF DISALLOWANCE OUT OF SA LARY EXPENSE OF MCX TRADING OF RS.9,47,306/-. AO COMPARE D SALARY EXPENSES OF AY 2008-09 WITH THAT OF RS. 2010 -11 & FOUND THEM EXCESSIVE. BUT CONSIDERING THE FACT THAT HUGE TRANSACTIONS WERE NOTICED ON MCX AS PER SEIZED PAPE RS AND AN UNACCOUNTED INCOME FROM MCX TRADING OF RS.6.07 C RORE IS ALREADY ADDED, EXPENSE ON SALARY FOR MCX TRADING SEEMS JUSTIFIED & ADDITION OF RS.9,47,306/- IS DELETED. AS A RESULT GR. NO. 11 OF APPEAL IS ALLOWED. 58. BEFORE US, THE LEARNED DR COULD NOT CONTROVERT THE FINDINGS OF THE LEARNED CIT(A). WE, THEREFORE, CONFI RM THE SAME AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. IT(SS) A NO. 243/IND/2015 A.Y. 2011-12 59. GROUND NO. 4 IN THE ASSESSEES APPEAL IS REGARD ING THE ADDITION MADE ON ACCOUNT OF ARBITRATION AWARD. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 89 60. THIS ISSUE HAS BEEN DEALT WITH BY US WHILE DECI DING GROUND NO. 5 FOR THE ASSESSMENT YEAR 2010-11 IN IT(S S)A NO. 242/IND/2015 WHEREIN WE HAVE DELETED THE ADDITION . ON THE SAID ARBITRATION AWARD, ADDITION WAS MADE AT RS. 3 CRORES FOR THIS YEAR ON THE BASIS THAT AS PER THE AFORES AID AWARD THE ASSESSEE WILL PAY RS.1.5 CRORES ON 30.04.20 10 AND RS.1.5 CRORES ON 31.08.2010. AS DISCUSSED WHILE DECIDING GROUND NO. 5 IN APPEAL FOR A.Y. 2010-11, THE AWARD DID NOT REACH ITS FINALITY, HENCE ON PRESUMPTION ADDITION MADE IN THE A.Y. 2011-12 ALSO IS NOT SUSTAINA BLE. WE, THEREFORE, DIRECT TO DELETE THE SAME. THIS GR OUND OF THE ASSESSEE IS, THEREFORE, ALLOWED. 61. GROUND NO. 5 IS REGARDING SUSTAINING THE ADDITION OF CASH FOUND OF RS. 84,84,900/-. THE REVENUE HAS ALSO TAKEN THIS ISSUE IN ITS GROUND NO. 7 IN IT(SS)A NO. 256/IND/2015. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 90 62. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE IN PARA 16 OF HIS ORDER. SINCE THE ASSESSEE HIMSELF HAS ADMIT TED THIS CASH AS UNACCOUNTED IN HIS STATEMENT U/S 131 OF TH E ACT AND BEFORE US ALSO THE ASSESSEE IS NOT ABLE TO CONT ROVERT HIS STATEMENT WITH ANY EVIDENCE, THEREFORE, WE FIND N O MERIT IN THIS GROUND OF THE ASSESSEE. IN THIS VIEW OF THE MATTER, THE ASSESSEES APPEAL IS DISMISSED WHEREAS THE DEPARTMENTAL APPEAL IS ALLOWED. 63. GROUND NO. 6 IN THE ASSESSEES APPEAL IS AGAINST SUSTAINING THE ADDITION MADE ON THE BASIS OF LOOSE PAPE R LPS-1/34 OF RS. 16,60,044/-, RS.45,30,200/-, RS.3,00,000/-, RS.4,79,215/- AND RS.1,24,456/-. THE REVENUE HAS ALSO FILED AN APPEAL ON THIS ISSUE IN GROUND NO. 10 IN IT(SS) A NO. 256/IND/2015. 64. THE LEARNED CIT(A) HAS DEALT WITH THE ISSUE IN PARA 19 OF HIS ORDER WHICH IS REPRODUCED AS UNDER :- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 91 19. GROUND NO. 13 OF APPEAL IS AGAINST ADDITION O F RS. 16,60,044/-, RS. 45,30,200/-, RS. 3,00,000/-, R S. 4,79,215/- AND RS. 1,24,456/- ON THE BASIS OF LPS-1 PAGE 34, ON THE GROUND THAT THE DATA ON THIS PAPER IS NO T PROPERLY EXPLAINED. AS DISCUSSED IN TABLE GIVE ON P AGE 92 OF THIS ORDER, MANY OF THE ENTRIES ON THIS LOOSE PA PER ARE NOT REFLECTED IN BOOKS OF ACCOUNT AND THAT PAGE WAS USE D TO ESTABLISH MODUS OPERANDI OF MANIPULATING CASH SALES , WHEREBY SALE WERE SUPPRESSED AND PROFITS WERE SUPPRESSED. THEREAFTER, INSTEAD OF ADDING THE AMOUN TS GIVEN ON THIS PAGE, SALES ITSELF WAS ENHANCED BY 17 .5% AND PROFIT OF THIS YEAR WAS CALCULATED AT 1.25% RATE IN STEAD OF 0.10% RATE AS SHOWN BY APPELLANT. THEREFORE, DATA O N THIS PAGE WAS USED TO CALCULATE GP AND MAKE ADDITION OF GP. HENCE, NO SEPARATE ADDITION CAN BE MADE FOR SUCH NO TINGS ON THIS LOOSE PAPER PAGE 34 OF LPS-1. HENCE, ALL TH E FIVE ADDITIONS MADE ON THE BASIS OF THIS PAPER ARE DELET ED. GROUND NO. 13 OF APPEAL IS ALLOWED. 65. AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT(A), THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 66. BEFORE US, THE LEARNED DR STRONGLY CONTESTED TH E ORDER OF THE LEARNED CIT(A) AND RELIED UPON THE ORDE R OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 92 ASSESSING OFFICER BY SUBMITTING THAT THERE BEING NO DIRECT NEXUS BETWEEN ESTIMATION OF GROSS PROFIT AND UNACCOUNT ED INCOME, THE LEARNED CIT(A) WAS WRONG IN GRANTING RE LIEF TO THE ASSESSEE. 67. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING SEARCH LPS-1/34 WAS SEIZED ACCORDING TO WHICH RS. 16,60,044/- WAS THE OPE NING CASH AS ON 10.7.2010. IT WAS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT SUCH CASH WAS KEPT BY THE PROPRIETORS SON WITH HIM ON BEHALF OF THE ASSESSEE O UT OF PREVIOUS DAY CLOSING OF CASH IN HAND WHICH IS VERIFIAB LE FROM THE BOOKS OF ACCOUNTS. REGARDING THE ADDITION OF RS.45,30,200/-HE SUBMITTED THAT IT WAS ALREADY INCLUDED IN TOTAL SALES EFFECTED ON 10.7.2010 OF RS.2,24,19,341/- . THIS WAS NOT ACCEPTED BY THE ASSESSING OFFICER. SO FAR THE ADDITION OF RS.4,79,215/- WAS EXPLAINED BY THE LEARNED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 93 COUNSEL FOR THE ASSESSEE AS CONTRA-ENTRY OF CHEQUE ISS UED OF RS. 3 LACS AND ANOTHER AMOUNT OF RS.1,79,215/- AS TEMPORARY ADVANCE FOR PURCHASE OF JEWELLERY. AS REGARDS THE ADDITION OF RS.1,24,456/- IT WAS EXPLAINED THAT THE ASSESSEE RECEIVED ADVANCE PAYMENT OF RS.92,50,000/- FR OM M/S JAI MATA DI BULLION AND JEWELLER AGAINST WHICH SALE BILL WAS ISSUED OF RS. 91,25,544/-. THE LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT IT IS THUS APPARENT THAT RS. 1,24,456/- WAS THE EXCESS AMOUNT OVER AND ABOVE THE BIL L ISSUED. HE FURTHER SUBMITTED THAT HOW THE EXCESS AMO UNT CAN BE TREATED AS SUPPRESSED SALE ? TO PROVE THE VERACIT Y OF THESE FACTS, THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGES 9 TO 13 OF THE ASSESSMENT ORDER. T HE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, PRAYED T HAT IN THE WAKE OF THE FACTS MENTIONED ABOVE, LEARNED CIT(A) W AS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 94 FULLY JUSTIFIED IN DELETING THE ADDITION AND AS SUCH T HE REVENUES APPEAL DESERVES TO BE DISMISSED. 68. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALREADY DECIDED THE ISSUE OF GROSS PROFIT AND ENHANCEMENT OF TURNOVER IN EARLIER PART OF THIS ORDER. THIS GROUND H AS BEEN TAKEN BY THE ASSESSEE IN HIS APPEAL AND THE LEARNED CIT( A) HAS ALLOWED THE SAME. KEEPING THESE FACTS IN VIEW, WE SUSTAIN THE ORDER OF THE LEARNED CIT(A) TO THE EFFECT THAT NO SEPARATE ADDITION CAN BE MADE FOR SUCH NOTINGS ON T HIS LOOSE PAPER PAGE 34 OF LPS-1. 69. IN GROUND NO. 7 THE ASSESSEE HAS RAISED THE ISSUE OF SUSTAINING THE ADDITION OF RS.6,07,51,227/- AS INCO ME OF MCX TRANSACTIONS NOT REFLECTED IN THE BOOKS OF ACCOUN TS. 70. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSU E IN PARAS 20 TO 20.6 OF HIS ORDER WHICH ARE REPRODUCED HEREUNDER :- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 95 20. GROUND NO. 14 OF APPEAL IS AGAINST ADDITION OF RS. 8,44,62,392/- ON THE BASIS OF SEIZED PAPER LPS-5 PA GE 107 WHICH CONTAINED A TRIAL BALANCE. ACCORDING TO APPEL LANT FOLLOWING EXPLANATION WAS FURNISHED FOR EACH OF THE ENTRY IN THE TRIAL BALANCE:- IN CASE OF RAVI BULLION & JEWELLERS, PROPRIETOR OM PRAKASH DHANWANI S. N O. DESCRIPTION UNRECORDE D ENTRIES RECORDED ENTRIES TOTAL SUBMISSION OF APPELLANT REMARKS OF CIT(A) 1. ANAND 60000 0 60000 NOT RECORDED IN BOOKS OF ACCOUNTS -- 2. ATUL RAJKOT 4500902 0 4500902 NOT RECORDED IN BOOKS OF ACCOUNTS THIS SHOWS UNACCOUNTED ADVANCE PAYMENT AGAINST SALES WHICH ESTABLISHES MODUS OPERANDI OF UNACCOUNTED CASH SALES. 3. DP JEWELLERS 134632 0 134632 NOT RECORDED IN BOOKS OF ACCOUNTS. AS PER BOOKS THE CREDIT BALANCE IS RS. 21400 AND DIFF OF RS.13232 IS NOT RECORDED IN -- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 96 BOOKS OF ACCOUNT 4. DAMU BRIJESH & CO 0 7626900 7626900 DAMU AND DAMU BRAJESH & SONS IS THE SAME PARTY & THIS IS CROSS ENTRY FOR SAUDAS . DIFFERENCE OF RS.1,00,000/- IS TYPING MISTAKE AND THAT IS WHY THERE IS TRIAL BALANCE DIFFERENCE. -- 5. LAL BPL 9000 0 9000 NOT RECORDED -- 6. LALIT BY 500000 0 500000 NOT RECORDED. TEMPORARY ADVANCE AGAINST SALES OF GOODS -- 7. MCX 0 65010406 65010406 RECORDED AS PER BOOKS OF ACCOUNT. THIS REPRESENT THE BRANCH BALANCE OF AHMEDABAD BRANCH WITH H.O. RECORDED IN BOOKS AND IT IS PART AND PARCEL OF THE CAPITAL AND LIABILITIES. VERIFIABLE FROM BOOKS. SINCE NOTING ON THIS TRIAL BALANCE ARE IN CORRECT NAMES, HENCE THIS NOTING HERE AS MCX MEANS PROFIT IN TRADING ON MCX AND BROKERAGE INCOME. 8. PAPPU JAI MATA DI 0 4800 4800 RECORDED AS PER BOOKS OF ACCOUNT -- 9. RAJESH MM 4248000 0 4248000 NOT RECORDED IN PROVES ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 97 BOOKS. ADVANCE AGAINST SALE OF GOODS. MODUS OPERANDI OF UNACCOUNTED CASH SALES 10 PVR JWELLS RSBL 0 2040700 2040700 RECORDED AS PER BOOKS OF ACCOUNT -- 11 SATISH OP 100000 0 100000 NOT RECORDED 12 CADBURY 0 47600940 47600940 RECORDED TRANSACTION. STOCK IN HAND 26.899 KG GOLD OF RS.5,41,21,082.0 0 GOLD IN THIS TRIAL BALANCE WAS FOUND SHORT IN COMPARISON OF OPENING GOLD BALANCE ON 25-11- 2010 INDICATING UNACCOUNTED CASH SALES. 13 CASH HAJAR 0 2769710 2769710 RECORDED TRANSACTION. OUT OF CASH IN HAND RS.68,86,569/- OPENING BAL DISCUSSED IN PAR 16 OF THIS ORDER 14 DAMU 0 7526900 7526900 CROSS ENTRY. THIS IS CROSS ENTRY WITH DAMU BRAJESH $ CO. -- 15 DEVA RAM 400000 0 400000 NOT RECORDED. TEMPORARY ADVANCE -- 16 GOPAL RAJKOT 14627 0 14627 NOT RECORDED -- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 98 17 JATIN 2100000 0 2100000 NOT RECORDED THIS PROVES MODUS OPERANDI OF UNRECORDED CASH SALES 18 KAPIL 0 5023673 5023673 RS.15,09,999 IN BOOKS AS DEBIT TO HITESH DHANWANI DIFF. 35,13,674/- ( KAPIL IS NICK NAME OF HITESH) IS CASH BALANCE KEPT WITH HIM WHICH WAS OUT OF OPENING CASH BALANCE IN BOOKS OF ACCOUNT AS ON 24.11.2010 (SEARCH DATE 25.11.2010), HITESH/KAPIL IS ALSO LOOKING AFTER THE BUSINESS OF THE ASSESSEE BEING SON OF THE ASSESSEE. TRANSACTION IS NOT TALLYING WITH RECORDED AMOUNT IN BOOKS OF RS.15,09,998 /- 19 NATHU ADVANCE 50000 0 50000 NOT RECORDED -- 20 RAKESH KOTHARI 128617 0 128617 NOT RECORDED -- 21 SONAL A/C 3000000 10000000 13000000 PARTIALLY RECORDED FOR RS. 1,00,00,000/- IN THE NAME OF BASK CONSTRUCTION IN MY BOOKS OF UNACCOUNTED INVESTMENT OF APPELLANT OF RS.30 LAKHS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 99 ACCOUNTS. SONAL IS DAUGHTER IN LAW OF THE ASSESSEE AND THE AMOUNT OF RS. 1,00,00,000/- IS PAID TO BASK CONSTRUCTION PVT. LTD. AS AN APPLICATION MONET FOR PURCHASES OF SHARES IN HER NAME. 22 SONU BULL CASH 01X 200000 0 200000 NOT RECORDED --- TOTAL 1545057 8 1476040 29 1630546 07 (ONLY IMPORTANT ENTRIES REPRODUCED HERE) APPELLANT HAS HIMSELF IDENTIFIED IN TRIAL BALANCE B OTH ACCOUNTED & UNACCOUNTED TRANSACTIONS. EVEN IF SUCH BIFURCATION IS TAKEN AS CORRECT, TOTAL UNACCOUNTED TRANSACTION NOT ED ON THIS PAGE COMES TO RS.1,54,50,578/-. THIS PROVES MODUS OPERAN DI OF APPELLANT OF UNACCOUNTED CASH SALES. THIS TRIAL BAL ANCE ALSO SHOWS UNACCOUNTED INVESTMENT OF APPELLANT IN SHARES NAME OF DAUGHTER-IN-LAW SONAL OF RS.30 LAKHS. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 100 20.1 MOST IMPORTANT ENTRY ON THIS PAGE IS AT S.NO.7 OF THIS TABLE, WRITTEN AS MCX RS.6,50,10,406/-. THE AFORESAID TABLE IS TRIAL BALANCE OF APPELLANT DRAWN ON 25-11-2010. ALL ENTR IES MENTIONED IN THIS TABLE ARE RELATED TO BUSINESS CONDUCTED BY APPELLANT. APPELLANT HAS DONE TWO BUSINESSES DURING THE YEAR NAMELY TRADING OF BULLION AND TRADING ON MCX. WHILE EXPLAINING THE AFORESAID TRIAL BALANCE APPELLANT HAS IDENTIFIE D VARIOUS ENTRIES RELATED TO TRADING OF BULLION AS EITHER ACCOUNTE D OR UNACCOUNTED. BUT IN CASE OF ONE SINGLE ENTRY OF M CX RS.6,50,10,406/-, APPELLANT HAS NOT IDENTIFIED IT A S ACCOUNTED/ UNACCOUNTED, BUT STATED THAT THIS TRIAL BALANCE ENT RY IN NAME OF MCX IS NOT ABOUT HIM TRADING OF MCX, BUT IT IS AHMEDABAD BRANCH CURRENT A/C BALANCE WHICH WAS RS.6,80,22,82 3/-. THIS SHOWS A LOT OF HESITATION AND RESERVATION ON THE PA RT OF APPELLANT, AND A CALCULATED MOVE TO MISLEAD THE DEPARTMENT WHI CH IS CLEARLY DISCERNABLE FROM THREE FACTS. 20.2 FIRSTLY IN THIS ENTIRE TRAIL BALANCE GIVE ABOVE, NOT A SI NGLE ENTRY IS IN CODED LANGUAGE, BUT EVERY ENTRY IS IN T HE SAME NAME AS IS USED IN BUSINESS OF APPELLANT, BOTH ACCOUNTED AS WELL AS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 101 UNACCOUNTED. FOR EXAMPLE AXIS SAVING A/C, D.P. JEWE LLERS, DAMU BRAJESH & CO., RAJESH MM, LAL BPL, PAPPU JAI MATA D I ETC ARE ALL IN REAL OR ABBREVIATED NAME, BUT NONE OF THEM IS IN BOGUS NAME. HENCE MCX IS ALSO TO BE TAKEN AS REAL NAME ESPECI ALLY WHEN APPELLANT HAS DONE HUGE TRANSACTIONS ON MCX IN NAME OF SELF AS WELL AS ON CHILD IDS AND DABBA TRADING. IN ORDER T O AVOID ANY EXAMINATION OF MCX TRADING A/C, APPELLANT TRIED TO DIVERT DEPARTMENTS ATTENTION BY STATING THAT IT WAS AHME DABAD BRANCH CURRENT A/C BALANCE WITHOUT EXPLAINING HOW NOTING AS MCX COULD MEAN AHMEDABAD BRANCH BALANCE. 20.3 SECONDLY IT IS INTERESTING TO NOTE AS TO HOW TWO ENTRIES NAMELY MCX RS.6,50,10,406/- AND AHMEDABAD BRAN CH BALANCE RS.6,80,22,823/-, WHERE BOTH NAME & AMOUNT ARE DIFFERENT, COULD BE STATED TO REPRESENT THE SAME TH ING, WHILE APPELLANT HIMSELF HAS TRIED TO RECONCILE EVEN SMALL DIFFERENCES OF FEW THOUSAND IN OTHER ACCOUNTS OF THIS TRIAL BALANC E. DESPITE ALL EFFORTS TO DIVERT THE ATTENTION, IT HAS BECOME CLEA R FROM THIS TRIAL BALANCE SEIZED AT PAGE 107 OF LPS-5 AS ALSO FROM PA GE NO.7 TO 51 OF LPS-2, THAT HUGE TRANSACTIONS WERE CARRIED OUT B Y APPELLANT FOR ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 102 SELF, AS ALSO DABBA TRADING FOR CLIENTS, WHEREIN HU GE PROFITS AND HUGE BROKERAGE WAS EARNED. TOTAL OF INCOME EARNED F ROM MCX TRADING FROM BOTH TRADING & BROKERAGE WAS RS.6,50,1 0,406/- AS ON 25-11-2010 AND MOST OF IT WAS UNACCOUNTED, OR UN RECORDED WHICH IS CLEAR FROM THE FACT THAT APPELLANT FURNISH ED FALSE EXPLANATION ABOUT THIS ENTRY BY STATING THAT IT WAS AHMEDABAD BRANCH BALANCE EVEN WHEN MCX WAS WRITTEN THERE. 20.4 THIRDLY SEIZED PAPERS AT PAGE 7 TO 51 OF LPS-2 CLEARLY SHO W HUGE NET SURPLUS IN MCX TRADING WHICH IS NOWHERE REFLECTED IN APPELLANTS BOOKS AND EVEN BROKERAGE INCOME IS HUGE LY SUPPRESSED. THIS POINT COULD BE UNDERSTOOD BY EXAMI NATION OF PAGE 7 OF LPS-2, WHICH IS MCX TRADING ACCOUNT STATE MENT FROM 20- 11-2010 TO 24-11-2010 REGARDING SHARAD JBL 25036+ VIEW, WHICH SHOWS TRADING IN COMMODITY (ZINC) IN JUST 4 D AYS OF 286420 KG PURCHASED FOR RS.196.48 CRORES & SOLD FOR RS.196 .77 CRORES, THUS EARNING A GROSS AMOUNT OF RS.28,71,670/- IN JUST 4 DAY TRADING IN THIS ONE ACCOUNT. ON SUCH 4 DAY TRADING BROKERAGE RECEIVED BY APPELLANT IS RS.2,07,773/- FROM THIS SINGLE ACCOUNT. NET EARNING FROM SUCH TRANSACTION THUS COMES AT RS. 26,63,897/- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 103 AND PARTY NET AMOUNT IS SHOWN AT RS.2,28,35,206/-. SUCH GROSS PROFIT OF RS.28,71,670/- BROKERAGE INCOME OF RS.2,0 7,773/- AND PARTY NET AMOUNT OF RS.2,28,35,206/- IS NOWHERE RE FLECTED IN BOOKS OF APPELLANT. THIS IS A TYPICAL EXAMPLE OF DABBA TRADING WHERE TRADING WAS DONE FOR ONE SHARAD FROM JABALPUR (SHARAD JBL), IN ID NO. 25036 BUT SINCE FUNDS PROVIDED BY HIM WERE UNACCOUNTED THEREFORE HIS NAME & ADDRESS, AMOUNT IN VESTED BY HIM AND PROFIT EARNED BY HIM, IS NOT DISCLOSED BY A PPELLANT. IN TURN APPELLANT HAS SUPPRESSED HIS OWN BROKERAGE INC OME AND ALSO DID NOT PAY TAX ON PARTY NET SURPLUS. 20.4.1 APPELLANT IS TCM MEMBER OF MCX WITH MEMBERSH IP NO. 12700. THEY HAVE DONE LARGE SCALE TRADING IN FI CTITIOUS NAMES LIKE CHOUDHARY -12002, ISHWAR JI - 25018, KAILASH JHANSI 25027, KISHORE JI 12026, MONTY 25012, PATNI 2 5029, PYARELAL 12038, SURESH JBL 12022, VINOD JHANS I -25047, ZAVERI 25043, SHARED JBL 25036, TONY SHARAD E TC AS PER PAGE NO.7 TO 51 OF LPS-2 SEIZED DURING SEARCH, WHIC H SHOWS LARGE NET SURPLUS IN EACH OF THE AFORESTATED ACCOUNT, TOTAL OF WHICH COMES TO RS.4,31,82,986/- AND A BROKERAGE REC EIPT OF JUST ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 104 4 DAYS FROM 20-11-22010 TO 24-11-2010 OF RS.2,47,15 2/- AS PER THE TABLE GIVEN BELOW :- BOTH OF THESE AMOUNTS I.E. NET SURPLUS IN MCX TRADI NG IN THESE 12- NAMES OF RS.4,31,82,986/- IS NOWHERE REFLECTED IN BOOKS OF ACCOUNTS AND WHILE APPELLANT HAS REFLECTED BROKERAG E INCOME FROM MCX TRADING AT ONLY RS.2,80,356/-FOR THE ENTIR E YEAR, SUCH BROKERAGE INCOME JUST FOR 4 DAYS FROM 20-11-2010 TO 24-11-2010 WAS RS.2,47,152/-, AS PER THE SEIZED PAPERS, WHICH SHOWS HUGE SUPPRESSION OF BROKERAGE INCOME. 20.4.2 BESIDES THESE 12 IDS MENTIONED ABOVE, APPEL LANT HAS DONE TRADING ON TOTAL 35 CHILD IDS ON ODIN SOFTWAR E AS WELL AS FICTITIOUS NAME NUMBER ENCLOSED ACTUAL NAME FOR NET SURPLUS BROKERAGE CHOUDHARY 12002 516827 2313/- ISHWAR JI 25018 SANJAY KUMAR 5586694 11764/- KAILASH JHANSI 25027 1766912 0 KISHORE JI 12026 3146848 5972/- MONTY 25012 MAHESH KUAMR 102960 DR. 0 PATNI 25029 SANTOSH NACHARE 810039 6185/- PYARELAL 12038 132363 3081/- SURESH JBL 12022 1220831 3384 VINOD JHANSI 25047 4654359 0 ZAVERI 25043 117801 0 TONY SHARAD JBL 2394506 6680/- SHARAD JBL 25036 22835206 2,07,773/- TOTAL 4,31,82,986/- 2,47,152/- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 105 IN BENANI NAMES SHOWN AS CLIENT ACCOUNTS NAMELY RIT U COMMODITIES, SHIV MOHAN GARG, DHIRAJ SAVLANI, NITIN KAUSHAL, GEETA BAI, KAMLA BAI MAHAJAN, PREETIBALA KOTHANA, R ADHIKA KOTHANA, SATYENDRA SINGH JADON, SANJAY MIMANI, RUCH I MIMANI, ETC MOST OF WHICH IS NOT ACCOUNTED FOR. 20.5 EVEN OTHERWISE AS TRIAL BALANCE & LOOSE PAPERS WER E SEIZED FROM APPELLANT, DEEMING PROVISIONS U/S 132(4 A) OF I.T. ACT WILL APPLY & SUCH AMOUNT WILL BE DEEMED TO BE INCOM E OF APPELLANT, MORE SO WHEN IT IS SHOWN AS CREDIT ENTRY IN TRIAL BALANCE. HENCE AMOUNT OF RS.6,50,10,406/- IS HELD AS INCOME FROM MCX TRADING AS BOTH PROFIT & BROKERAGE INCOME. OUT OF THIS SINCE RS.39,78,823/- AND RS.2,8 0,356/- IS SHOWN BY APPELLANT IN PROFIT & LOSS A/C AS INCOM E FROM FUTURE TRADE PROFIT AND BROKERAGE RECEIVED, HEN CE THOSE AMOUNTS ARE REDUCED AND NET AMOUNT RS.6,07,51,227/- IS HELD AS UNACCOUNTED INCOME REFL ECTED AS NET SURPLUS, AS ALSO UNACCOUNTED BROKERAGE INCOM E, NOT REFLECTED IN BOOKS OF ACCOUNT. IT MAY BE ADDED HERE THAT APPELLANT THROUGH SUBMISSION DATED 25-02-2015 HAVE STATED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 106 THAT SUCH INCOME IS ALREADY DISCLOSED IN OVERALL SU RRENDERED INCOME OF RS.10 CRORES, BUT THE AMOUNT ADDED IN PRO FIT & LOSS A/C AS SURRENDERED INCOME IS ONLY RS.7,28,25,000/- WHICH IS NOT ENOUGH TO COVER THE GP ADDITION OF RS.14.14 CRORE A ND THE MCX TRADING INCOME ADDITION OF RS.6.07 CRORE. 20.6 THIS ALSO TAKES CARE OF GROUND NO.18 OF THIS APPEA L WHERE RS.4,34,30,138/- WAS SEPARATELY ADDED ON THE BASIS OF SEIZED PAPERS PAGE 7 TO 51 OF LPS-2, REGARDING MCX TRADING WHICH ARE ALSO DISCUSSED IN PREVIOUS PARA. BOTH GRO UND OF APPEAL I.E. GR. NO.14 & 18 ARE MERGED TOGETHER AND NET UNCOUNTED INCOME OF RS.6,07,51,227/- IS ADDED AS N ET SURPLUS & BROKERAGE INCOME FROM MCX TRADING. SEPAR ATE ADDITION OF RS.4,34,30,138/- MADE FOR MCX TRADING I S DELETED AS THAT IS ALSO A PART OF ADDITION CONFIRMED OF RS. 6,07,51,227/-. GR. NO.14 OF APPEAL IS PARTLY ALLOWED ,SINCE OUT OF MCX RS.6,50,10,406/- AND OUT OF TOTAL ENTRIES OF RS.8,44,62,392/- IN THIS TRIAL BALANCE, ONLY AN ADD ITION OF RS.6,07,51,227/- IS CONFIRMED AS UNACCOUNTED INCOME FROM MCX TRADING WHILE BALANCE ADDITION OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 107 RS.2,37,11,165/- IS DELETED, AS SOME OF THAT AMOUNT IS ACCOUNTED FOR IN BOOKS AND FOR UNACCOUNTED TRANSACT IONS IN TRADING OF BULLION, A G.P. ADDITION IS ALREADY M ADE IN PARA 14 OF THIS ORDER. AS A RESULT GR. NO.14 OF APP EAL IS PARTLY ALLOWED. 71. AGAINST THE ABOVE FINDING OF THE LEARNED CIT(A ), THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US. 72. THE EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SO FAR AS LOOSE PAPER LPS 5 PAGE 107 IS CONCERNED, IT I S A TRIAL BALANCE AS ON 24.11.2010. HE SUBMITTED THAT THE ASSESSEE HAD GIVEN THE COMPLETE BIFURCATION OF THE ACCOUNTED AND UNACCOUNTED ENTRIES. HE ALSO SUBMITTED THAT THE UNACCOUNTED ENTRIES WERE ONLY TO THE TUNE OF RS.95,69,286/- ON THE CREDIT SIDE AND RS. 59,76,204/ - ON DEBIT SIDE. REGARDING THE ENTRY IN THE NAME OF MCX OF RS. 6,50,10,406/- IT WAS SUBMITTED THAT THIS ENTRY IS THE AMOUNT OF AHMEDABAD BRANCH BALANCE WHICH WAS TO THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 108 TUNE OF RS. 6.8 CRORES. WITHOUT PREJUDICE TO THESE SUBMISSIONS, HE SUBMITTED THAT THIS WAS A CREDIT ENTRY AND AT THE MOST THE COMMISSION @ 2% COULD BE ESTIMATED. I T WAS SUBMITTED THAT THIS TRIAL BALANCE CANNOT BE A REASON FOR REJECTING THE BOOKS. IT MIGHT CONTAIN THE UNACCOU NTED ENTRIES BUT THEY ARE ALL BALANCES AS ON A PARTICULAR DAY WHICH HAS BEEN ASSESSED TO TAX FOR THE A.Y. 2011-12. IN VIEW OF THESE FACTS, THE LEARNED COUNSEL FOR THE ASSE SSEE PRAYED THAT THE ADDITION DESERVES TO BE DELETED. 73. ON THE OTHER HAND, THE LEARNED DR RELIED UPO N THE ASSESSMENT ORDER . 74. AFTER HEARING BOTH THE SIDES AND CONSIDERING TH E DOCUMENTS AVAILABLE ON RECORD, WE FIND THAT THE CIT(A) IN PARA-20.1 OF HIS ORDER CONCLUDED THAT THE AFORESAID TABLE IS A TRIAL BALANCE OF APPELLANT DRAWN ON 25-11-2010. ALL ENTRIES MENTIONED IN THIS TABLE ARE RELATED TO BUSI NESS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 109 CONDUCTED BY APPELLANT. APPELLANT HAS DONE TWO BUSINESSES DURING THE YEAR NAMELY TRADING OF BULLION AND TRADING ON MCX. WHILE EXPLAINING THE AFORESAID TRIAL BALANCE APPELLANT HAS IDENTIFIED VARIOUS ENTRIES RE LATED TO TRADING OF BULLION AS EITHER ACCOUNTED OR UNAC COUNTED. WE FIND THAT THE ASSESSEE DID NOT IDENTIFY OR CLARI FY THE ENTRIES IN THE NAME OF MCX AT RS.6,50,10,406/-, EXC EPT THAT IT RELATES TO AHMEDABAD BRANCH. HE DID NOT CLARIFY AS TO WHAT EXTENT SUCH ENTRIES ARE ACCOUNTED/UNACCOUNTED IN THE BOOKS. ACCORDING TO THE ASSESSEE, THE SAME RELATES TO AHMEDABAD BRANCH AND SUCH BALANCE WAS APPEARING IN TH E REGULAR BOOKS OF ACCOUNT AT RS.6,80,22,823/-. THE C IT(A) DID NOT ACCEPT THIS CLAIM OF AHMEDABAD BRANCH BALANCE ON THE GROUND THAT THE NAME IN THE TRIAL BALANCE IS MC X INSTEAD OF AHMEDABAD BRANCH AND THE FIGURES ALSO DIF FER. HE FURTHER STATED IN PARA 20.5 OF HIS ORDER HENCE AMOUNT OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 110 RS. 6,50,10,406/- IS HELD AS INCOME FROM MCX TRADIN G AS BOTH PROFIT AND BROKERAGE INCOME. OUT OF THIS SINC E RS.39,78,823/- AND RS.2,80,356/- IS SHOWN BY APPELL ANT IN PROFIT & LOSS ACCOUNT AS INCOME FROM FUTURE TRADE PROFIT AND BROKERAGE RECEIVED . AS PER CIT(A), ON THE TRANSACTIONS OF RS.4,31,82,986/- NO PROFIT HAS BEEN OFFERED FOR TAX BUT ONLY BROKERAGE INCOME EARNED FROM MCX TRADING WAS REFLECT ED AT RS. 2,80,356/- THEREON. THE CLAIM OF THE ASSESSEE T HAT ALL TRANSACTIONS WERE THROUGH STOCK EXCHANGE DOES NOT PR OVE BY ITSELF THAT PROFIT EARNED IN ALL TRANSACTIONS WA S RECORDED IN THE BOOKS BECAUSE AS PER THE ASSESSEE HIMSELF UNRECORDED TRANSACTIONS OF CREDIT SIDE WERE RS.95,69, 286/- AND DEBIT SIDE WERE RS.59,76,204/- AS PER PAGE NO. 7 4 TO 76 OF PAPER BOOK-I. THE CIT(A) MERGED BOTH THE FIGURES VIDE PARA 20 OF THE HIS ORDER AND CONSIDERED UNRECORDED TRANSACTIONS AT RS.1,54,50,578/-. IT IS A MATTER OF G ENERAL ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 111 KNOWLEDGE THAT TRADING IN MCX IS BEING DONE FOR SHO RT DURATION OF A WEEKS TIME AND IN MOST OF THE CASES T HEY ARE INTRA-DAY TRANSACTIONS WHICH ARE NORMALLY SETTLED BY PAYMENT/RECEIPT OF DIFFERENCE. WHEN SUCH TRADING IS DONE ON BEHALF OF OTHERS, BROKERAGE INCOME IS EARNED. TH EREFORE, IT WOULD BE UNREALISTIC APPROACH TO CONSIDER ENTIRE T RADING TRANSACTIONS AS UNRECORDED INCOME. THE APPROACH OF THE CIT(A) TO CONSIDER CREDIT BALANCE APPEARING IN THE N AME OF MCX AS UNDISCLOSED INCOME EVEN AFTER DEDUCTING PROFI T EARNED AND RECORDED IN THE BOOKS CANNOT BE SUSTAINED . WHILE CARRYING OUT TRANSACTIONS IN ANY COMMODITY EXC HANGE LIKE MCX, NOMINAL MARGIN MONEY IS REQUIRED. THEREFO RE, IT WOULD BE FAIR AND PROPER TO ESTIMATE FURTHER ADDITI ONAL PROFIT OVER AND ABOVE DISCLOSED BY THE ASSESSEE. WE, ACCORDINGLY DIRECT TO ESTIMATE NET PROFIT @ 5% ON UNDISCLOSED INCOME ON RS.6,50,10,406/- APPEARING IN THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 112 TRIAL BALANCE IN THE NAME OF MCX. THIS GROUND OF APPE AL IS THEREFORE, PARTLY ALLOWED IN FAVOUR OF ASSESSEE. 75. THE REVENUE IS ALSO BEFORE US ON THIS ISSU E BY TAKING GROUND NO. 11 IN IT(SS) A NO. 256/IND/2015 RELATING TO DELETION OF RS.8,44,62,392/- AS UNACCOUNT ED TRANSACTIONS IN MCX. 76. BEFORE US, THE LEARNED DR SUBMITTED THAT TH E LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDIT ION OF RS.8,44,62,392/- AGAINST THE GROSS PROFIT ESTIMATED BY HIM. HE SUBMITTED THAT THE LEARNED CIT(A) DID NOT CONSIDE R THE DETAILED FINDINGS OF THE ASSESSING OFFICER WHILE MAKI NG THE ABOVE ADDITION AND HAS GROSSLY ERRED IN DELETING THE ADDITION SO MADE BY THE ASSESSING OFFICER. 77. ON THE OTHER HAND, THE LEARNED COUNSEL FOR TH E ASSESSEE WHILE OPPOSING THE SUBMISSIONS OF THE LEARNE D DR, SUBMITTED THAT THE TRIAL BALANCE CANNOT BE THE REASON ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 113 FOR MAKING THE ADDITION. THE TRIAL BALANCE MIGHT CONTAIN THE UNACCOUNTED ENTRIES WHICH CAN ONLY BE CONSIDERED FOR ASSESSMENT INSTEAD OF THE ENTIRE ENTRIES. 78. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE . WE FIND THAT THE CIT(A) WHILE SUSTAINING THE ADDITION R ELATING TO MCX TRANSACTIONS DELETED THE ADDITION OF RS.2,37,11, 165/- ON ACCOUNT OF THE DIFFERENTIAL AMOUNT OF TRIAL BALAN CE OF FOUND DURING SEARCH. TOTAL ENTRIES IN THE REFERRED T RIAL BALANCE WERE OF RS.8,44,62,392/- AGAINST WHICH AN ADDI TION OF RS.6,07,51,227/- WAS CONFIRMED BY LEARNED CIT(A) AND THE BALANCE ADDITION OF RS.2,37,11,165/- WAS DELETED ON THE GROUND THAT G.P. ADDITION MADE WOULD COVER THE SAME. ON SPECIFIC QUERY BY THE BENCH REGARDING AFORESAID FIGU RE OF RS.6,07,51,227/-, IT WAS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE CIT(A) DEDUCTED THE AMOUN T OF PROFIT OF RS.39,78,823/- AND BROKERAGE OF RS.2,80,35 6/- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 114 DISCLOSED IN BOOKS FROM THE AMOUNT OF RS.6,50,10,40 6/- IN THE NAME OF MCX. WE FURTHER FIND THAT SUCH WORKING OF CIT(A) IS NOT CORRECT BECAUSE UNEXPLAINED (UNRECORD ED) CREDIT ENTRIES OF THE TRIAL BALANCE VIDE PAGE 74 TO 76 OF PAPER BOOK-I SHOULD HAVE BEEN ADDED. IT WOULD BE FAIR AND PROPER TO CONSIDER SUCH UNEXPLAINED CREDIT AMOUNT AS ADDITI ONAL INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. WE , THEREFORE, DIRECT THAT CREDIT ENTRIES IN THE NAMES OF VARIOUS PARTIES AS APPEARING IN THE TRIAL BALANCE OF RS.95,6 9,286/- SHOULD BE ASSESSED U/S 68 OF THE ACT AS UNEXPLAINED CREDIT OVER AND ABOVE THE NET PROFIT @ 5% DIRECTED TO BE A PPLIED ON TRANSACTIONS IN MCX. THIS GROUND OF APPEAL OF THE REV ENUE IS, THEREFORE, PARTLY ALLOWED. 79. GROUND NO. 8 OF THE ASSESSEES APPEAL IT(SS) A NO . 243/IND/2015 IS AGAINST THE ADDITION MADE ON ACCOUNT OF LOOSE PAPER LPS-5 PAGES 108 AND 109 OF RS.20,27,500/-, ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 115 RS.2,34,64,832/- AND RS.20,22,924/- TREATING THE SAME AS UNRECORDED TRANSACTION. THE REVENUE HAS ALSO FILED APPE AL BY TAKING GROUND NO. (XII) IN IT(SS) A NO. 256/IND/2 015 ON THIS ISSUE. 80. BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH SOME LOOSE PAPERS WERE FOUND AND ENTRIES MADE THEREIN WERE FOUND NOT TO HAVE BEEN EXPLAINED BY THE ASSESSEE. AS PER THE ASSESSMENT ORDER (PAGE 19) THE ASSESSEE MADE CASH SALES OF RS.20,27,500/- AND MADE PURCHASES OF RS.20,22,954/- (PAGE 25). THE ASSESSING OFFICER FOUND THAT BOTH THESE TRANSACTIONS WERE NOT RECORDED IN THE BOOKS. AT PAGE 25 OF THE ASSESSMENT O RDER THE ASSESSING OFFICER OBSERVED THAT UNRECORDED SALES OF THE ASSESSEE WERE RS.2,34,64,852/- AS PER ENTRIES ON PAGE 109 OF LPS-5. HE, THEREFORE, TREATING THESE TRANSACTIONS AS OUT OF BOOK, MADE THE ADDITIONS THEREOF. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 116 81. FELT AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) VIDE PARA 21 OF HIS ORDER OBSERVED AS UNDER :- 21. GR. NO.15 OF APPEAL IS AGAINST THE ADDITION MAD E OF RS.20,22,954/- ON THE BASIS OF SEIZED PAPER PAGE 10 8-109 OF LPS-5. ACCORDING TO APPELLANT THESE PAPERS CONTAINE D DATA FOR SAUDAS ENTERED INTO BY APPELLANT & THEY WERE AL L ENTERED IS BOOKS OF ACCOUNTS. THE ENTRIES ON THE SEIZED PAP ERS ARE DISCUSSED BELOW:- S.NO. DESCRIPTION OF ENTRY REMARKS DATE NAME W.T. RATE 1. 24-11-2010 ARVIND 1000GM 20,275 CASH SALE OF RS.20,27,500/- NO T REFLECTED IN BOOKS SHOWING GAIN OF RS.27,500/- ON SALE OF ONE GOLD BAR. THIS ALSO SHOWS CASH SALE WITHOUT VAT PAYMENT. 2. 11-11-2010 15-11-2010 16-11-2010 19-11-2010 22-11-2010 22-11-2010 MUKESH K. MUKESH K. MUKESH K. MUKESH K. MUKESH K. MUKESH K. 100 GM 200 GM 100 GM 500 GM 5000 GM 1000 GM 20,495 20,298 20,277 20,081 20,288 20,285 NO DATEWISE BILLS OF 11-11-2010 , 15- 11-2010, 16-11-2010, 19-11-2011 OR 22-11-2011 SHOWN, ONLY CONSOLIDATED BILL OF LATER DATE SHOWN. 3. 19-11-2010 D.P. JEWELLERS 500 GM 20,086 REFLECTED IN BOOKS 4. 19-11-2010 GOVIND SONI 500 GM 20,110 CASH SALES NOT REFLECTED IN ANY CASH SALE BILL 5. 23-11-2010 MUKESH K. 1000 GM 20,159 REFLECTED IN BOOKS 6. 19-11-2010 19-11-2010 19-11-2010 22-11-2010 22-11-2010 PAPU JAI MATA DI ---DO---- --- DO --- --- DO --- ---DO---- 1000 GM 1000 GM 1000 GM 1000 GM 1000 GM 20,159 20,125 20,152 20,666 20,270 NO DATEWISE BILLS OF 19-11-2010 OR 22- 11-2010 ON SUCH RATES ARE THERE BUT A CONSOLIDATED BILLS WAS THERE. 7. 22-11-2010 SHREE ASHU GEMS 5000 GM 20,245 NOT SEEN IN BOOKS CLAIMED TO BE ENTERED IN SOME OTHER NAME. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 117 8. -- PUNIT JALGAON 1000 GM --- SHOWN AS AMANAT NOT REFLECTED IN BOOKS AS SHOWN IN TABLE GIVE ABOVE ALL ENTRIES ON PAGE 10 8-109 OF LPS-5 ARE RELATED TO BULLION TRADING, OUT OF WHICH SOME ARE RECORDED TRANSACTION AND SOME ARE UNRECORDED TRANSA CTIONS, AS PER NOTES GIVEN IN COLUMN REMARKS. HOWEVER SINCE ADDITION OF GROSS PROFIT OF RS.14.14 CRORE IS ALREADY MADE I N THIS YEAR TAKING INTO CONSIDERATION, THE VARIOUS UNRECOR DED TRANSACTION, HENCE NO SEPARATE ADDITION IS CALLED F OR, FOR THE ENTRIES RECORDED ON PAGE 108-109 OF LPS-5. HENC E ADDITIONS OF RS.20,27,500/-, RS.2,34,64,852/- & RS.20,22,954/- MADE ON THE BASIS OF NOTINGS ON THES E PAGES IS DELETED. GR. NO. 15 OF APPEAL IS ALLOWED. 82. AGAINST THE ABOVE FINDINGS, THE ASSESSEE AS WELL AS THE REVENUE ARE BEFORE THE TRIBUNAL. 83. THE LEARNED DR WHILE SUPPORTING THE ASSESSMENT ORDER, SUBMITTED THAT THE LEARNED CIT(A) WAS NOT JUST IFIED IN GRANTING RELIEF TO THE ASSESSEE WITHOUT ANY BASIS. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 118 84. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT LPS-5/109 WAS EXPLAINED IN DET AIL BEFORE THE AUTHORITIES BELOW AND DETAILED EXPLANATION FI NDS PLACE FROM PAGE 20 TO 25 OF THE ASSESSMENT ORDER. THE ENTRIES WERE IN THE FORM OF SAUDAS OF PURCHASE AND SALE AND THEY WERE PROPERLY RECORDED AS AND WHEN THE DELIVE RY WAS GIVEN/TAKEN. HE SUBMITTED THAT AS SUCH THERE WAS NO JUSTIFICATION IN MAKING THE ADDITION BY TREATING THE TRANSACTIONS AS UNRECORDED SALES. IT WAS, THEREFORE, SUBMITTED THAT THE LEARNED CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE ASSESSEE TO THE EFFECT THAT ENHANC EMENT TURNOVER AND APPLICATION OF GROSS PROFIT RATE WOULD COV ER SUCH DISCREPANCY, IF ANY. 85. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT TH E LEARNED CIT(A) HAS DELETED THIS ADDITION ON THE BASIS T HAT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 119 SINCE ADDITION OF GROSS PROFIT OF RS.14.14 CRORE IS ALREADY MADE IN THIS YEAR TAKING INTO CONSIDERATION, THE VARIOUS UN RECORDED TRANSACTION, HENCE NO SEPARATE ADDITION IS CALLED F OR, FOR THE ENTRIES RECORDED ON PAGE 108-109 OF LPS-5. HENCE ADDITIONS OF RS.20,27,500/-, RS.2,34,64,852/- & RS.20,22,954/- M ADE ON THE BASIS OF NOTINGS ON THESE PAGES IS DELETED. WE HAVE ALSO DECIDED THE ISSUE OF ESTIMATING THE GROSS PROFIT AND THE TURN OVER OF THE ASSESSEE IN EARLIER PART OF THIS ORDER. WE, THERE FORE, FOLLOWING OUR ABOVE ORDER, DIRECT THE ASSESSING OFFI CER TO WORK OUT THE GROSS PROFIT AS PER OUR ABOVE DIRECTION. THIS GROUND OF THE REVENUE IS DECIDED ACCORDINGLY. 86. IN GROUND NO. 9 THE ASSESSEE HAS TAKEN THE GROUND REGARDING ADDITION MADE ON THE BASIS OF LOOSE P APER LPS-55 OF RS.27,69,710/-, RS.1,12,60,200/-, RS.5 LAC S, RS. 5 LACS AND RS.79,40,236/-. ON THIS ISSUE THE REVENUE HAS ALSO COME UP IN APPEAL BY TAKING GROUND NO. 13 IN IT(SS ) A NO. 256/IND/2015. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 120 87. THE FACTS OF THE CASE, IN BRIEF, ARE THAT DURIN G THE COURSE OF SEARCH LPS-5/55 WAS FOUND BASED ON WHICH TH E ASSESSING OFFICER CONSIDERED ENTRY OF RS.27,69,710/ - AS UNEXPLAINED. THE ASSESSING OFFICER ALSO CONSIDERED CAS H SALES FOUND ENTERED IN THIS PAPER AT RS.1,12,60,200/-. HE ALSO FOUND ANOTHER ENTRY OF RS. 5 LACS WHICH WAS GIVEN AS ADVANCE TO M.J. JEWELLERS AND RS.5 LACS TO ISHWAR (MCX) ON LPS-5. SIMILARLY, THE ASSESSING OFFICER WORKED OUT UNRECORDED PURCHASES OF RS.79,40,236/- BASED ON SUCH LOOSE PAPER. THE ASSESSING OFFICER, ACCORDINGLY, MADE THE ADDITIONS AS PER DETAILED DISCUSSIONS MADE AT PAGES 29 T O 37 OF THE ASSESSMENT ORDER. 88. BEING AGGRIEVED BY THE ABOVE ACTION OF THE ASS ESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERING THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 121 SUBMISSIONS OF THE ASSESSEE IN THE WAKE OF THE FACTS O F THE CASE, OBSERVED IN PARA 22 AS UNDER :- 22. GR. NO. 16 IS AGAINST ADDITION OF RS.27,69,710 /-, RS.1,12,60,200/-, RS.5,00,000/-, RS.5,00,000/- & RS.79,40,236/- ON THE BASIS OF SEIZED PAPERS PAGE 5 5 OF LPS-5. THE AFORESAID PAPER HAS BEEN EXAMINED AT PAG E NO.96 OF THIS ORDER, WHEREIN THE TABLE GIVES DETAIL S OF ENTRIES FOUND ON THIS PAGE. AS NOTED THERE SUCH ENTRIES ARE RELATED TO BULLION TRADING, SOME OF WHICH ARE ACCOUNTED AND MANY OF THEM ARE UNACCOUNTED AND IT PROVES MANIPULATION OF CASH SALE BILLS, ON THE BASIS OF WHICH GP ADDITION OF RS .14.14 CRORE IS ALREADY MADE IN THIS YEAR IN PARA 14 OF TH IS ORDER. THEREFORE WHILE SOME TRANSACTION ON THIS SEIZED PAP ER ARE HELD TO BE UNRECORDED, ADDITION OF RS.22,69,710/-, RS.1,12,60,200/-, RS.5,00,000/- RS.5,00,000/- & RS.79,40,236/- ON ACCOUNT OF CASH BOOK OPENING BALA NCE OF RS.27,69,710/- ON 25-11-2010, CASH SALES OF RS.1.12 CRORES, UNACCOUNTED CASH PAYMENTS OF RS.5 LAKH EACH TO M.J. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 122 JEWELLERS AND TO ISHWAR (MCX) AND UNACCOUNTED CASH PURCHASES OF RS.79,40,236/-, COULD NOT BE MADE SEPA RATELY, AS ALL THOSE TRANSACTIONS INDICATE SUPPRESSION OF C ASH SALES AND SUPPRESSION OF GP, FOR WHICH SALES IS ENHANCED BY 17.5% AND GP IS ENHANCED BY RS.14.14 CRORE. THEREFORE THOUGH SEIZED PAPER SHOWS MODUS OPERANDI OF UNRECORDED TRANSACTIONS, BUT ALL FIVE ADDITIONS MAD E ON THE BASIS OF THIS PAPER ARE DELETED. GR. NO.16 O F APPEAL IS ALLOWED. 89. BEFORE US, THE LEARNED DR SUPPORTED THE ASSESSMENT ORDER. 90. ON THE OTHER HAND, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT LPS-5/55 WAS EXPLAINED IN DETAIL BEFORE THE AUTHORITIES BELOW AND DETAILED EXPLANATION FI NDS PLACE FROM PAGE 29 TO 37 OF THE ASSESSMENT ORDER. THE ENTRIES WERE OF PURCHASE AND SALE WHICH WERE PROPERLY RECORDED. AS REGARDS CASH BALANCE STATED ON THE LOOSE PAPER LPS-5/55 IT WAS EXPLAINED BY THE LEARNED COUNSEL FOR ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 123 THE ASSESSEE THAT THE SAME FORMS PART OF TOTAL CASH FOUND DURING SEARCH OVER RS. 84 LACS. THE ASSESSEE MAINTAINED CASH AT DIFFERENT LOCATIONS, HENCE, TRANSFER OF CASH FRO M ONE LOCATION TO ANOTHER LOCATION DOES NOT REFLECT IN THE M AIN CASH BOOK. HE, THEREFORE, SUBMITTED THAT THE CASH ENT RY ON THE LOOSE PAPER CANNOT BE CONSIDERED TO BE UNACCOUNTE D INCOME OF THE ASSESSEE. HOWEVER, THE LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THE ASSESSEE HAS ALREADY SURRENDERED RS. 10 CRORES AT THE TIME OF SEARCH WHIC H INCLUDES EXCESS CASH. AS SUCH, NO SEPARATE ADDITION IS CALLED FOR. IT WAS, THEREFORE, SUBMITTED THAT THE LEAR NED CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION AF TER CONSIDERING THE FACTS OF THE CASE IN RIGHT PERSPECTIV E TO THE EFFECT THAT ENHANCEMENT TURNOVER AND APPLICATION OF GROS S PROFIT RATE WOULD COVER SUCH DISCREPANCY, IF ANY. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 124 91. WE HAVE HEARD BOTH THE SIDES. THE LEARNED CIT(A) HAS DELETED THE ADDITION BY HOLDING THAT BOOKS HAVE BE EN REJECTED AND THE GROSS PROFIT HAS BEEN ESTIMATED. WE HAVE ALREADY DECIDED THIS ISSUE IN THE FOREGOING PARAGRAPHS W ITH THE DIRECTION TO THE ASSESSING OFFICER TO WORK OUT GROSS PROFIT ON ENHANCED TURNOVER IN BULLION TRADING ACCOUNT AS WELL ON MCX TRADING TRANSACTIONS. FOR THE SIMILAR REASO NS, WE SUSTAIN THE FINDINGS OF THE LEARNED CIT(A). 92. IN GROUND NO. 10 THE ASSESSEE HAS TAKEN THE ISSUE REGARDING THE ADDITION MADE ON THE BASIS OF LOOSE PAPER LPS-2 PAGES 5 AND 6 OF RS.6,47,000/-. THE REVENUE H AS ALSO TAKEN THE GROUND NO. 14 ON THIS ISSUE. 93. WE HAVE HEARD BOTH THE SIDES. THE LEARNED CI T(A) HAS DEALT WITH THIS ISSUE IN PARA 23 OF HIS ORDER WHICH IS REPRODUCED HEREUNDER :- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 125 23. GR. NO. 17 OF APPEAL IS AGAINST ADDITION OF RS.6,47,000/- ON THE BASIS OF SEIZED PAPERS PAGES 5 -6 OF LPS-2, WHICH CONTAINED VARIOUS PAYMENT. APPELLANTS ARGUMENT THAT SUCH PAPERS DO NOT BELONG TO THEM, CANNOT BE SUSTAINED, AS APPELLANT COULD NO T OVERCOME DEEMING PROVISIONS U/S 132 (4A) OF I.T. AC T, AS HE COULD NOT TELL, AS TO WHOM THESE PAPERS PERTA IN. HENCE SUCH EXPENSES ARE HELD AS UNACCOUNTED, BUT SINCE GP ADDITION IS ALREADY MADE SEPARATELY OF RS.14.14 CRORE & HENCE NO SEPARATE ADDITION OF RS.6.47 LAKH IS CALLED FOR & THAT ADDITION IS DELET ED. AS A RESULT GR. NO.17 OF APPEAL IS ALLOWED. 94. WE HAVE HEARD BOTH THE SIDES. THE LEARNED C IT(A) HAS DELETED THE ADDITION ON THE BASIS OF GROSS PROFIT. FROM A PERUSAL OF PAGES 37 AND 38 OF THE ASSESSMENT ORDER, WE FIND THAT PAGES 5 AND 6 OF LPS-2 CONTAIN CASH VOUCHERS REGARDING VARIOUS PAYMENTS MADE BY THE ASSESSEE WHICH WERE FOUND NOT RECORDED IN THE BOOKS. SECTION 69C O F THE ACT READS AS UNDER :- 69C. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATI ON ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREO F, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE 6 [ASSESSING] OFFICER, SATISFACTORY, THE AMOUNT COVER ED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MA Y BE, ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 126 MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR :] 7 [PROVIDED THAT, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, SUCH UNEXPLAINED EXPENDITURE WHICH IS DEEMED TO BE THE INCOME OF THE ASSESSEE SHALL NOT BE ALLOWED AS A DEDUCTION UNDER ANY HEAD OF INCOME.] (EMPHASIS SUPPLIED) FROM A BARE PERUSAL OF THE ABOVE SECTION IT BECOMES CRYSTAL CLEAR THAT UNEXPLAINED EXPENDITURE WHICH IS DEEMED TO BE THE INCOME OF THE ASSESSEE SHALL NOT BE ALLOWED AS A DEDUCTION UNDER ANY HEAD OF INCOME. SINCE THESE PAYMENTS WERE MADE BY THE ASSESSEE BUT NOT RECORDED IN THE BOOKS OF ACCOUNTS, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF AGAINST THE ADDITION MADE TOWARDS GROSS PROFIT. WE, THEREFORE, REVERSE THE FINDINGS OF THE LEARNED CIT(A) ON THIS I SSUE AND RESTORE THE ADDITION MADE BY THE ASSESSING OFFICE R. 95. IN THE RESULT, GROUND NO. (IX) OF THE REVENU E IS ALLOWED WHEREAS GROUND NO. 10 OF THE ASSESSEE IS DISMISSED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 127 96. IN GROUND NO. 11 THE ASSESSEE HAS CHALLENGED THE SUSTAINING OF ADDITION OF RS.1 CRORE MADE U/S 68 OF T HE ACT ON ACCOUNT OF THE AMOUNT RECEIVED IN THE NAME OF SANSK AR EXIMES PVT. LTD. AND INTEREST THEREON. 97. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE I N PARAS 26 TO 26.4 AT PAGES 118 AND 19 OF HIS ORDER WHICH ARE REPRODUCED HEREUNDER :- 26. GR. NO. 20 OF APPEAL IS AGAINST AN ADDITION OF RS.1 CRORE U/S 68 OF THE I.T. ACT AS UNEXPLAINED CA SH CREDIT RECEIVED FROM M/S SANSKAR EXIM P. LTD, ON TH E GROUND THAT CASH CREDIT IS NOT PROVED. WHEN AO VERIFIED WHEREABOUTS OF THIS COMPANY M/S SANSKAR EXIM P. LTD, BY ISSUING A COMMISSION U/S 131(1)(D) OF I.T. ACT TO DDIT UNIT IV (4), MUMBAI, IT WAS FOUND FROM ENQUIRY REPORT OF DDIT, MUMBAI THAT WHEREABOUTS OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 128 COMPANY AND DIRECTORS WERE NOT KNOWN AND THUS EVEN IDENTITY OF CREDITOR WAS NOT ESTABLISHED. 26.1 ON SPOT VERIFICATION, ON LAST KNOWN ADDRESS OF SUCH COMPANY IN MUMBAI, ONE HARSHAD H. MEHTA OWNER OF SUCH PLACE WAS FOUND, WHO STATED THAT HE ONLY PROVIDES A TABLE SPACE AND PROVIDES ADDRESS FACILITY FOR RECEIVING MAILS & MESSAGES, ON RENT PAYMENT. HENCE CREDITOR WAS MERELY A PAPER COMPANY. ON FURTHER VERIFICATION SHRI HARSHAD H. MEHTA GAVE ADDRESS OF SHRI RAVI LALCHAND MEHTA, NEW SHALIMAR APARTMENT WHO WAS SUMMONED & IN HIS STATEMENT, HE STATED THAT HE HAD BECOME DIRECTO R OF SUCH COMPANY M/S SANSKAR EXIM P. LTD AT THE REQUEST OF ONE SHRI NITIN BOHRA & RECEIVED SOME SALARY BUT IN HIS KNOWLEDGE THERE IS NO FINANCIAL TRANSACTION WITH APPELLANT COMPANY. NOTICE WAS ALSO ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 129 SENT TO SHRI NITIN BOHRA BUT REMAINED UNREPLIED. IN VIEW OF THESE FACTS IT IS ABSOLUTELY CLEAR, THAT APPELLANT FAILED TO ESTABLISH EVEN IDENTITY OF CRED ITOR COMPANY. 26.2 APPELLANT ALSO FAILED TO PROVIDE ALTERNATE OR NEW ADDRESS OF SUCH COMPANY & ALSO FAILED TO PRODUCE DIRECTOR OF SUCH COMPANY ALONGWITH BOOKS OF ACCOUNT , IN ORDER TO ESTABLISH THEIR IDENTITY. COPY OF INCOM E TAX RETURN OF SUCH COMPANY ALONGWITH BALANCE SHEET WAS ALSO NOT FURNISHED FOR AY 2011-12. IN VIEW OF SURROUNDING CIRCUMSTANCES, IT WAS PROVED BEYOND DOUBT THAT CASH CREDIT OF RS.1 CRORE FROM A PAPER COMPANY NAMELY M/S SANSKAR EXIM P. LTD REMAINED UNEXPLAINED & WHEN HE COULD NOT FACE THE COMPELLING CIRCUMSTANCES & FINDINGS OF INVESTIGATIONS OF DDIT, HE SURRENDERED THIS UNSECURED LOAN OF RS.1 CRORE, A S ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 130 HIS UNACCOUNTED INCOME, AS A PART OF HIS OVERALL DISCLOSURE OF RS.10 CRORE MADE BY APPELLANT. 26.3 AS A RESULT IT IS HELD THAT CASH CREDIT OF RS. 1 CRORE REMAINED UNEXPLAINED AND ITS ADDITION U/S 68 OF I.T. ACT IS HEREBY CONFIRMED. FOR THIS PURPOSE RELIANCE IS PLACED ON THE DECISION IN CASES OF M/S AGARWAL COAL CORP. P. LTD [2011] 17 ITJ 111 (INDORE TRIB .) WHEREIN IT WAS HELD THAT CREDIT ENTRIES TAKEN FROM PAPER COMPANIES REMAINED UNEXPLAINED AS ALSO ON THE DECISION OF JURISDICTIONAL HIGH COURT IN CAS E OF GYAN CHAND ANIL KUMAR [2002] 120 TAXMAN 842 (MP) WHEREIN ADDITION OF CASH CREDIT WAS UPHELD EVEN THOUGH SAME WAS RETURNED VERY NEXT DAY, AS ENTRIES WERE MANIPULATED ONES. RELIANCE IS ALSO PLACED ON DECISIONS IN CASES OF UMESH KRISHNANI [2013] 217 TAXMAN 13 (GUJARAT) HINDON FORGE P. LTD [2012]211 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 131 TAXMAN 113 (ALLAHABAD) AND SMT. SUMAN GUPTA [ 2012] 138 ITD 153 (AGRA). AS ADDITION OF RS.1 CRORE IS CONFIRMED, THE DISALLOWANCE OF INTEREST EXPENSE ON SUCH LOANS OF RS.7,15,397/- IS ALSO UPHELD. AS A RESULT GR. NO. 20 OF APPEAL IS DISMISSED. 26.4 IT CAN BE ADDED HERE THAT THERE IS NOTHING IN LAW WHICH PREVENTS ASSESSING OFFICER IN AN APPROPRIATE CASE IN TAXING BOTH SUNDRY CREDITS, SOU RCE & NATURE OF WHICH IS NOT SATISFACTORILY EXPLAINED A ND BUSINESS INCOME ESTIMATED AFTER REJECTING BOOKS OF ACCOUNT OF ASSESSEE AS UNRELIABLE, AS HELD IN CASES OF G.S. TIWARI & CO. [2014] 357 ITR 651 (ALLAHABAD), KALE KHAN MOHAMMAD HANIF [1963] 50 ITR 1 (SC), AGARWAL ENGINEERING CO. [2008] 302 ITR 246 AND PURSHOTTAM LAL TAMRAKER [2004] 270 ITR 314 (MP). HENCE IT IS HELD THAT ADDITIONS OF PROFIT MADE IN ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 132 HANDS OF APPELLANT AFTER REJECTING BOOKS OF ACCOUNT , EITHER ADDITION OF RS.14.14 CRORE IN GP OF BULLION TRADING OR ADDITION OF RS.6.07 CRORE IN MCX TRADING WOULD NOT PREVENT A SEPARATE AND INDEPENDENT ADDITION OF RS.1 CRORE IN HANDS OF APPELLANT U/S 68 OF THE I.T. ACT. AS A RESULT WHILE GR. NO.20 OF APPEAL IS DISMISSED, ADDITION OF RS.1 CRORE IS DIRECTED TO B E MADE OVER AND ABOVE GP ADDITION OF RS.14.14 CRORES & MCX TRADING INCOME ADDITION OF RS.6.07 CRORE. 98 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER :- LD. AO HAS MADE THE ADDITIONS OF RS.1,00,00,000/- BEING THE SUNDRY CREDIT BALANCE IN THE NAME OF SANSKAR EXIM PVT. LTD. ON THE GROUND THAT THE IDENTITY, AND CREDITWORTHINESS OF THE CREDITOR HAS NOT BEEN PROVED BY FILING THE COPY OF THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 133 INCOME TAX RETURN AND THE BANK STATEMENTS OF THE SAID PARTY. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION WITH PAN NO. IT WOULD BE NOTICED THAT THE TRANSACTION HAS TAKEN PLACE THROUG H BANKING CHANNEL. THE LD. AO ISSUED THE COMMISSION U/S131(1)(D) TO DDIT INVESTIGATION. IN THE REPORT THE LD. DDIT CLEARLY MENTIONED THAT THE SANSKAR EXIM PVT. LTD IS IN EXISTENCE AND HAS A TABLE SPACE IN THE PREMISES OF HARSHAD MEHTA, HOWEVER, THE OTHER ADDRESS TO RECORD A STATEMENT OF WORKING DIRECTOR WAS NOT MADE AVAILABLE .THE LD. DDIT EXAMINED ONE OF THE DIRECTOR WHO HAD RESIGNED FROM THE POST AND WAS ONLY A DIRECTOR FOR 5 MONTHS. THE WORKING DIRECTORS ADDRESS WAS NOT AVAILABLE WITH HIM. THE NOTICE TO THE WORKING DIRECTORSHRI NITESH BOHRA WAS SENT BUT NO REPLY WAS RECEIVED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 134 THIS PROVES THAT THE COMPANY IS IN EXISTENCE. THE LD.CIT(A) HAS SIMPLY RAISED CERTAIN DOUBTS ABOUT THE TRANSACTIONS AND UPHELD THE ADDITIONS. IT IS HUMBLY SUBMITTED THAT THE TRANSACTION IS ROUTED THROUGH BANKING CHANNEL AND THE EXISTENCE OF SANSKAR EXIM PVT. LTD. WAS FULLY PROVED. THE CONFIRMATION LETTER WAS FILED FROM THE ABOVE NAMED PARTY. SINCE ALL NECESSARY DETAILS HAVE BEEN FILED THE ADDITIONS UPHELD MAY PLEASE BE DELETED. 99. WE HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING THE ARGUMENTS OF THE PARTIES IN THE WAKE OF THE FACTS OBTAINING IN THIS CASE, WE FIND THAT SIMILAR ADDITION MAD E U/S 68 OF THE ACT IN RELATION TO DEPOSITS RECEIVED F ROM THREE DEPOSITORS HAS BEEN DELETED BY US FOR THE REASONS GI VEN IN THE FOREGOING PARAGRAPHS. THE FACTS AS WELL THE EVIDENC E PRODUCED I.E. CONFIRMATION CERTIFICATES ALONG WITH COP IES OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 135 BANK STATEMENT AND ACKNOWLEDGMENT OF RETURNS REMAIN THE SAME. THE FACTS BEING IDENTICAL, THE LOAN TAKEN FROM M/ S. SANSKAR EXIM PVT LTD. AT RS. ONE CRORE IS HELD TO BE GENUINE AND, THEREFORE, THE ADDITION MADE BY THE AUTHORITIES BELOW IS HEREBY DELETED. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. 100. IN GROUND NO. 12 THE ASSESSEE HAS TAKEN THE GROUND THAT THE LEARNED CIT(A) HAS ERRED IN MAINTAINING THE ADDITION OF RS. 17,99,014/- AND RS. 12 LACS BEING THE INTEREST PAID ON THE UNSECURED LOANS RECEIVED FROM K HUSI EXPORT AND VINAY GEMS WHICH WERE ADDED U/S 68 IN EARLI ER YEAR. 101. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECIDED THIS ISSUE IN IT(SS) A NO. 242/IND/2015 FOR THE ASSE SSMENT YEAR 2010-11 IN FAVOUR OF ASSESSEE BY HOLDING THAT ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 136 UNSECURED LOANS WERE GENUINE. FOR THE SAME REASONS, T HIS ISSUE IS DECIDED ACCORDINGLY. 102. GROUND NO. 13 IN THE ASSESSEES APPEAL IS REGARDING SUSTAINING THE ADDITION OF RS.2,74,06,204/- ON THE BASIS OF SEIZED MATERIAL LPS-2 PAGE 52. 103. WE HAVE HEARD BOTH THE SIDES. THE LEARNED C IT(A) HAS DEALT WITH THIS ISSUE IN PARA 28 OF HIS ORDER AT PAGE S 120 AND 121 OF HIS ORDER AS UNDER :- 28. GR. NO. 23 OF APPEAL IS AGAINST ADDITION OF RS.2,74,06,204/- ON THE BASIS OF SEIZED PAPER LPS-2 PAGE 52, WHICH IS A STATEMENT ISSUED BY RJO BRIEN TO M/S JITESH INTERNATIONAL, SHARJAHA. THIS DOCUMENT I S STATEMENT DATED 24-11-2010 ISSUED BY RJO BRIEN TO JITESH INTERNATIONAL (ACCOUNT NO.91091007). THE DOCUMENT CONTAINS ENTRY WITH RESPECT TO COMMODITY TRADING IN SILVER IN INTERNATIONAL MARKET. IT IS AD MITTED BY APPELLANT THAT M/S JITESH INTERNATIONAL WAS STARTED BY HIM AND JITESH IS NAME OF HIS SON, BUT H E DID NOT DO ANY TRADING IN THIS AS THAT FIRM WAS TAK EN OVER BY ONE MR. BALKRISHNA PARASRAM. BUT AS A PROOF TO THAT APPELLANT COULD NOT FURNISH A SINGLE DOCUME NT EITHER IN FORM OF PROOF OF TRANSFER OF FIRM IN TERM S OF TRANSFER DEED DULY NOTARISED OR AN AFFIDAVIT OF BALKRISHNA PARASRAM WITH COPY OF AUDITED BALANCE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 137 SHEET. IN VIEW OF THIS APPELLANT FAILED TO REBUT TH E DEEMING PROVISION OF SECTION 132 (4A) OF I.T. ACT, WHEREBY THE DOCUMENT SEIZED FROM APPELLANT IS HELD TO BE PERTAINING TO APPELLANT. RELIANCE IS PLACED O N DECISIONS IN CASES OF NARESH KUMAR AGARWAL [2011] 331 ITR 510 (DELHI) AND P.R. METRANI [2001] 251 ITR 244(KARNATAKA). OTHERWISE ALSO SINCE APPELLANT WAS RECEIVING DETAILS OF COMMODITY TRADING IN INTERNATI ONAL MARKET IN A/C NO.91091007 FROM BROKER RJO BRIEN ON HIS E-MAIL, THAT PROVES THAT APPELLANT WAS INVOLVED IN UNACCOUNTED TRADING IN INTERNATIONAL COMMODITY MARKET, BECAUSE SUCH INFORMATION IS GIVEN ONLY TO CLIENT FOR WHOM TRADING IS DONE. IT IS FOR THE APPE LLANT TO EXPLAIN HOW SUCH UNEXPLAINED TRANSACTIONS IN INTERNATIONAL COMMODITY MARKET WERE DONE, WHETHER THROUGH HAWALA OR THROUGH SOME OTHER MODE. BUT SINCE SUCH TRANSACTIONS WERE NOT DISCLOSED IN THE RETURN OF INCOME FILED IN INDIA OR IN ANY OTHER AUD ITED ACCOUNTS, HENCE THEY ARE TREADED AS UNACCOUNTED TRANSACTIONS. IT IS ALSO A FACT THAT APPELLANT IS I NVOLVED IN LARGE SCALE COMMODITY TRANSACTION ON MCX. CONSIDERING ALL THESE FACTS THE ADDITION OF RS.2,74,06,204/- MADE ON THE BASIS OF SEIZED PAPER IS HEREBY CONFIRMED. GR. NO. 23 OF APPEAL IS DISMISSED. 104. AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT(A ), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 138 105. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED AS UNDER :- ADDITION IN RESPECT OF PAPER ON INTERNET OF O-BRIE N . THE COPY OF THE SAID PAPER IS GIVEN AT PG.357 OF TH E PB. THIS PAPER WAS RECOVERED FROM THE INTERNET AND ADDRESS OF THE PARTY IS GIVEN AS JITESH INTERNATIO NAL OF SHARJAHA. THE REPLY TO THE NOTICE GIVEN IS PLACE D AT P.221 OF THE COMMON PB. IT IS SUBMITTED THAT JITESH INTERNATIONAL WAS TRANSFERRED BY THE ASSESSEE PRIOR TO THE YEAR 2001 TO SHRI BALKRISHNA PARSRAM OF DUBAI. THE DEALING IS WITH THAT FIRM WHICH IS SITUATED OUTSIDE INDIA. THE LD. AO WANTED THE ASSESSEE TO PRODUCE SHRI BALKRISHNA PARSRAM AND HIS ACCOUNTS BOOK WHICH WAS NOT POSSIBLE. DURING THE COURSE OF T HE PROCEEDINGS THE LETTER WAS FILED BY HIM STATING THA T THIS COMPANY BELONGS TO HIM. IT IS HUMBLY SUBMITTED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 139 THAT THE ASSESSEE HAS NO CONNECTION WITH THIS FIRM. THE NAME OF THE ASSESSEE HAS NOT BEEN MENTIONED ON THIS PAPER NOR IT DEPICTS THAT ANY INCOME AROSE TO THE ASSESSEE. THE LD.CIT(A) HAS SIMPLY REMARKED IN PARA 28 PG. 120 THAT THE ASSESSEE DID NOT FURNISH ANY DOCUMENT TO SHOW THAT THIS FIRM WAS TRANSFERRED TO SHRI BALKRISHNA. HE SIMPLY APPLIED THE PROVISION OF SECTION 132(4A) AND HELD THAT THE PAPER BELONGS TO THE ASSEESSEE SINCE FOUND IN HIS COMPUTER AND THE TRANSACTION HAS NOT BEEN DISCLOSED IN THE RETURN. IT IS HUMBLY SUBMITTED THAT THIS PAPER DOES NOT BELONG TO THE ASSESSEE BUT WAS FOUND ON THE INTERNE T WHICH WAS DOWNLOADED WHILE SURFING ON THE INTERNET. THE ASSESSEE HAS NO CONNECTION WITH THIS FIRM DURIN G ANY OF THE YEARS OF BLOCK PERIOD. THIS IS A CORRESPONDENCE BETWEEN TWO FOREIGN COMPANIES ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 140 WHICH IS IN NO WAY CONNECTED TO THE ASSESSEE. UNDE R THIS CIRCUMSTANCES THE ADDITION CAN NOT BE MADE IN THE HANDS OF THE ASSESSEE. WITHOUT PREJUDICE TO THE COMMON CONTENTION AND SUBMISSIONS MADE FOR ALL THE YEARS IT IS HUMBLY SUBMITTED THAT THE TOTAL CAPITAL FOUND WITH THE ASSESSEEE AND APPEARING IN THE BALANCE SHEET IS APPROXIMATELY RS.10.87 CRORES. THE TOTAL ASSETS ARE RS.17.31 CRORES AND THE SUNDRY OUTSIDE LIABILITIES ARE TO THE TUNE OF ABOUT RS. 6 CRORES. THE ASSESSEE HAS NOT BEEN FOUND TO HAVE POSSESSED ANY ASSET OTHER THAN DISCLOSED IN THE BALANCE SHEET AND AS SUCH THE HEAVY ADDITIONS MADE ON ACCOUNT OF INCOME COULD NOT HAVE BEEN MADE AND SUSTAINED. THERE IS NO PROOF OF ANY OTHER ASSET OR ANY EXPENDITURE INCURRED BY THE ASSESSEEE. THE LD. AO HAS MADE THE ADDITION OF THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 141 INCOME AS WELL AS THE INVESTMENTS. THE LD. CIT(A) HAS ADOPTED A G.P. PERCENTAGE INSPITE OF THE FACT T HAT COMPLETE RECORDS ARE MAINTAINED BY THE ASSESSEE. THE TELESCOPIC BENEFIT HAS TO BE GIVEN FOR THE INCO ME DISCLOSED BY THE ASSESSEEE AND THE INVESTMENTS MADE. IN VIEW OF THIS IT IS HUMBLY PRAYED THAT THE ASSESSEE HAS DISCLOSED THE CORRECT INCOME BY OFFERI NG THE ADDITIONAL INCOME OF RS.10 CRORES AND NO ADDITION SHOULD HAVE BEEN MADE BEYOND THIS FIGURE. 106. WE HAVE HEARD BOTH THE SIDES. THE LEARNED COUNSEL FOR THE ASSESSEE FAILED TO CONTROVERT THE FIN DINGS RECORDED BY THE LEARNED CIT(A). BEFORE US ALSO, THE L EARNED COUNSEL FOR THE ASSESSEE DID NOT FURNISH ANY DOCUMENT EITHER IN FORM OF PROOF OF TRANSFER OF FIRM IN TERMS OF TRANSFER DEED DULY NOTARISED OR AN AFFIDAVIT OF BALKRISHN A PARASRAM IN SUPPORT OF ITS CLAIM. WE, THEREFORE, SUSTAI N THE ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 142 ORDER OF THE LEARNED CIT(A) AND DISMISS THIS GROUND OF THE ASSESSEE. IT(SS) A NO. 256/IND/2015 REVENUES APPEAL 107. GROUND NO. 8 IN THIS APPEAL IS REGARDING THE DELETION OF ADDITION OF RS.70,72,244/- AND RS.11,07,7 60/- MADE ON ACCOUNT OF UNACCOUNTED JEWELLERY FOUND DURING SEARCH. 108. THE LEARNED CIT(A) HAS ACCEPTED THE CLAIM OF TH E ASSESSEE THAT THE GOLD ORNAMENTS UP TO RS. 52 LACS WERE UNACCOUNTED. THE LEARNED CIT(A) HAS DEALT WITH THIS IS SUE IN PARAS 17 AND 17.1 AT PAGES 106 AND 107 OF HIS ORDER WHICH ARE REPRODUCED HEREUNDER :- 17. GR. NO.11 OF APPEAL IS AGAINST MAKING AN ADDI TION OF RS.70,72,244/- & RS11,17,760/- U/S 69 A OF I.T. ACT, ON ACCOUNT OF INVESTMENT IN JEWELLERY. DURING SEARC H AT RESIDENCE OF APPELLANT, JEWELLERY WEIGHING 4122.230 ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 143 GM OF RS.70,72,244/- WAS FOUND, OUT OF WHICH JEWELLERY WEIGHTING 2431.831 GM OF RS.41,64,385/- WAS SEIZED. BESIDES THIS JEWELLERY OF RS.11,07,760/ - WAS FOUND IN LOCKER NO.1298, BANK OF INDIA. DURING POST SEARCH PROCEEDINGS, APPELLANT HAS ACCEPTED THAT JEWELLARY SEIZED FROM RESIDENCE & LOCKERS OF RS.52 LAKH HAS BEEN PURCHASED BY HIM, OUT OF HIS UNACCOUNTED SOURCES AND SURRENDERED THE SAME. HOWEVER THE AO CONSIDERED ENTIRE JEWELLERY FOUND AT RESIDENCE OF RS.70,72,244/- AND IN LOCKER OF RS.11,07,760/- AS UNACCOUNTED INVESTMENT OF APPELLANT AND ADDED THEM IN HANDS OF APPELLANT. 17.1 AFTER CONSIDERING ALL FACTS OF THE CASE, BOA RD CIRCULAR NO. 1916 DT. 11-05-1994, THE NUMBER OF LAD Y & GENTS FAMILY MEMBERS OF APPELLANTS HOUSEHOLD, THE CUSTOM OF RECEIVING SOME GIFTS OF GOLD AT TIME OF ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 144 MARRIAGE & OTHER OCCASION, AS ALSO THE ADMISSION OF APPELLANT, THAT INVESTMENT IN GOLD ORNAMENTS TO THE EXTENT OF RS.52 LAKH WAS UNACCOUNTED, I HOLD THAT APPELLANTS ADMISSION REGARDING UNACCOUNTED INVESTMENT OF RS.52 LACS CAN BE ACCEPTED. AS A RESU LT, OUT OF TOTAL GOLD JEWELLERY OF RS.81,80,000/-, INVE STMENT OF RS.52 LAKH IN SUCH JEWELLERY IS TREATED AS FROM UNDISCLOSED SOURCES AND BALANCE AMOUNT OF RS.29,80,000/- IS TREATED AS EXPLAINED. NOT ONLY TH AT, EVEN SUCH UNACCOUNTED INVESTMENT OF RS.52 LAKH IS N OT TO BE ADDED IN HANDS OF APPELLANT, SINCE UNACCOUNTE D PROFIT EARNED OF RS.14.14 CRORE IS ALREADY ADDED IN HAND OF APPELLANT & UNACCOUNTED INVESTMENT IN GOLD OF RS.52 LAKH IS MERELY AN APPLICATION OF SUCH INCOME. IN THIS SENSE GR. NO.11 OF APPEAL IS PARTLY ALLOWED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 145 109. THE LEARNED COUNSEL FOR THE ASSESSEE ADMITTED BEFORE US THAT THE UNDISCLOSED INVESTMENT OF RS.52 LACS IN JEWELLERY WAS MADE BY THE ASSESSEE. SINCE THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INVESTMENT DURING THE COURSE OF SEARCH, WE FIND IT APPROPRIATE T O RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER TO WORK OUT THE ADDITIONAL PROFIT BY APPLICATION OF GROSS PROF IT ON ENHANCED TURNOVER AS DIRECTED IN EARLIER PARA OF THIS OR DER AND TO GIVE CREDIT FOR THE SAME. IF ANY BALANCE TOWARDS INVESTMENT REMAINS, IT SHALL BE SUSTAINED. THIS GROUND OF THE REVENUE IS DECIDED ACCORDINGLY. 110. IN GROUND NO. 9 THE REVENUE HAS RAISED THE ISSU E REGARDING THE ADDITION MADE OF RS.1,98,36,250/- ON TH E BASIS OF ENTRIES IN THE PEN DRIVE. 111. DURING SEARCH OPERATION AT THE RESIDENCE OF THE ASSESSEES MATERNAL UNCLE, KESHAV NACHANI A PEN DRIVE WAS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 146 FOUND AND INVESTMENT IN C-21 MALL, BHOPAL AND GLOBUS GREEN AREA PROJECT, BHOPAL WAS FOUND. THE LEARNED CIT( A) HAS DEALT WITH THIS ISSUE IN PARAS 18 & 18.1 OF HIS ORD ER AS UNDER :- 18. GR. NO.12 OF APPEAL IS AGAINST ADDITION OF RS.1,98,36,250/- IN HANDS OF APPELLANT ON THE GROUN D OF ENTRIES IN THE PEN-DRIVE. DURING SIMULTANEOUS SEARC H AT OFFICE PREMISES OF APPELLANTS MATERNAL UNCLE SHRI KESHAV NACHANI A PEN-DRIVE INVENTORIZED AT S.NO.1 OF ANN. BS-1 DATED 26-11- 2010 WAS SEIZED FROM ORBIT MALL OFFICE. FROM THIS P EN DRIVE UNACCOUNTED INVESTMENT OF APPELLANT WAS FOUND OF A TOTAL OF RS.5.40 CRORE IN C-21 MALL BHOPAL AND GLOBUS GREEN AREA PROJECT, BHOPAL BOTH BEING PROJECT OF SHRI KESHAV N ACHANI & PARTNERS. ON THAT BASIS APPELLANT ADMITTED FOLLOWIN G UNACCOUNTED INVESTMENT:- AY 2010-11 RS.2,71,75,000/- AY 2011-12 RS.1,98,36,250/- AY 2011-12 RS.70,38,750/- (CASH SEIZED ANDDISCLOSED AT RS.84 LACS) ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 147 18.1 ON THE BASIS OF SUCH ADMISSION, WHILE AO ACCEP TED THAT PART OF SUCH INVESTMENT OF RS.70,38,750/- WAS RETURNED BACK TO APPELLANT AS CASH & WAS COVERED IN DISCLOSU RE OF CASH SEIZED OF RS.84 LAKHS, HE MADE ADDITION OF RS.1,98, 36,250/- AS UNACCOUNTED INVESTMENT MADE BY APPELLANT IN BHOP AL PROPERTIES (C-21 MALL AND GLOBUS GREEN ACRE PROJECT ) IN AY 2011-12. IT IS THEREFORE HELD THAT AS PER SEIZED DO CUMENTS FROM PEN DRIVE AND AS PER ADMISSION OF APPELLANT, T HERE IS NO DOUBT THAT AMOUNT OF RS.1,98,36,250/- WAS UNACCOUNT ED INVESTMENT OF APPELLANT IN AY 2011-12, IN BHOPAL PR OPERTY BUT SINCE AN ADDITION OF GROSS PROFIT OF RS.14.14 CRORE IS ALREADY CONFIRMED IN HANDS OF APPELLANT , IN THIS YEAR, AS UNACCOUNTED PROFIT EARNED, HENCE INVESTMENT OF RS.1,98,36,250/- THOUGH UNACCOUNTED WOULD BE MERELY APPLICATION OF UNACCOUN TED INCOME ALREADY TAXED IN HANDS OF APPELLANT. AS A RE SULT WHILE AMOUNT OF RS.1.98 CRORE IS HELD AS UNACCOUNTED INVE STMENT, ITS ADDITION IS DELETED, SINCE THAT WILL TANTAMOUNT TO DOUBLE ADDITION. IN THIS SENSE, GR. NO.12 OF APPEAL IS PAR TLY ALLOWED. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 148 112. WE HAVE ALREADY DECIDED THE ISSUE REGARDING GROSS PROFIT WHEREIN THE ASSESSING OFFICER SHALL WORK OUT THE GROSS PROFIT @ 0.25% ON THE RECORDED SALES AND 1.25% ON THE ENHANCED TURNOVER BY 5%. THE QUANTIFICATION SHALL B E DONE BY THE ASSESSING OFFICER. THE LEARNED CIT(A) G RANTED RELIEF ON THE BASIS THAT THE ADDITION OF GROSS PROFIT OF RS.14.14 CRORES WAS CONFIRMED IN THE ASSESSEES CASE F OR THE ASSESSMENT YEAR 2011-12. THE LEARNED COUNSEL FOR T HE ASSESSEE ADMITTED BEFORE US THAT THE UNDISCLOSED INVESTMENT OF RS.1,98,36,250/- WAS MADE BY THE ASSESSEE. SINCE THE ASSESSEE HAS ADMITTED THE UNDISCLO SED INVESTMENT DURING THE COURSE OF SEARCH, WE FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE A SSESSING OFFICER TO WORK OUT THE ADDITIONAL PROFIT BY APPLICATI ON OF GROSS PROFIT ON ENHANCED TURNOVER AS DIRECTED IN EARL IER PARA OF THIS ORDER AND TO GIVE CREDIT FOR THE SAME. IF ANY ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 149 BALANCE TOWARDS INVESTMENT REMAINS, IT SHALL BE SUSTAINED . THIS GROUND OF THE REVENUE IS DECIDED ACCORDINGLY. 113. GROUND NO. 10 IN THIS APPEAL IS THAT THE LEARNED CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 16,60 ,044/-, RS. 45,30,200/-, RS. 4,79,215/- AND RS. 1,24,456/- WITHOUT BRINGING ANY FINDING OR MATERIAL ON RECORD. 114. BEFORE US, THE LEARNED DR WHILE OPPOSING THE ORDER OF THE LEARNED CIT(A) SUPPORTED THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT THERE BEING NO DIRECT NEXUS BETWEEN ESTIMATION OF GROSS PROFIT AND UNACCOUNTED INCOME, THE LEARNED CIT(A) WAS TOTALLY WRONG IN GRANTIN G RELIEF TO THE ASSESSEE. 115. ON THE OTHER HAND, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT DURING SEARCH LPS-1/34 WAS SEIZED ACCORDING TO WHICH RS. 16,60,044/- WAS THE OPE NING CASH AS ON 10.7.2010. IT WAS EXPLAINED BY THE LEARNED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 150 COUNSEL FOR THE ASSESSEE THAT SUCH CASH WAS KEPT BY THE PROPRIETORS SON WITH HIM ON BEHALF OF THE ASSESSEE O UT OF PREVIOUS DAY CLOSING OF CASH IN HAND WHICH IS VERIFIAB LE FROM THE BOOKS OF ACCOUNTS. REGARDING THE ADDITION OF RS.45,30,200/-HE SUBMITTED THAT IT WAS ALREADY INCLUDED IN TOTAL SALES EFFECTED ON 10.7.2010 OF RS.2,24,19,341/- . THIS WAS NOT ACCEPTED BY THE ASSESSING OFFICER. SO FAR THE ADDITION OF RS.4,79,215/- WAS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS CONTRA-ENTRY OF CHEQUE ISS UED OF RS. 3 LACS AND ANOTHER AMOUNT OF RS.1,79,215/- AS TEMPORARY ADVANCE FOR PURCHASE OF JEWELLERY. AS REGARDS THE ADDITION OF RS.1,24,456/- IT WAS EXPLAINED THAT THE ASSESSEE RECEIVED ADVANCE PAYMENT OF RS.92,50,000/- FR OM M/S JAI MATA DI BULLION AND JEWELLER AGAINST WHICH SALE BILL WAS ISSUED OF RS. 91,25,544/-. THE LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT IT IS THUS APPARENT THAT RS. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 151 1,24,456/- WAS THE EXCESS AMOUNT OVER AND ABOVE THE BIL L ISSUED. HE FURTHER SUBMITTED THAT HOW THE EXCESS AMO UNT CAN BE TREATED AS SUPPRESSED SALE ? TO PROVE THE VERACIT Y OF THESE FACTS, THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGES 9 TO 13 OF THE ASSESSMENT ORDER. T HE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, PRAYED T HAT IN THE WAKE OF THE FACTS MENTIONED ABOVE, LEARNED CIT(A) W AS FULLY JUSTIFIED IN DELETING THE ADDITION AND AS SUCH T HE REVENUES APPEAL DESERVES TO BE DISMISSED. 116. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALREADY DECIDED THIS ISSUE IN THE FOREGOING PARAGRAPH AND FOR THE REASONS MENTIONED THEREIN, WE FIND NO FLAW IN THE OR DER OF THE LEARNED CIT(A) AND UPHOLD THE SAME. 117. GROUND NO. 11 OF THE REVENUE IS THAT THE LEARN ED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.8,44,62,392/- MADE ON ACCOUNT OF UNACCOUNTED ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 152 TRANSACTIONS IN MCX ON THE BASIS OF SEIZED PAPER LPS5/107. 118. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECI DED THIS GROUND ALONG WITH GROUND NO. 7 OF THE ASSESSEES APPEAL (SUPRA). THIS GROUND SHALL ALSO BE DEALT WITH AS PE R OUR DIRECTIONS ABOVE. 119. GROUND NO. 12 OF THE REVENUE IS THAT THE LEARN ED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.20,27,500/-,RS.2,34,64,852/- AND RS.20,22,954/- MADE ON ACCOUNT OF UNACCOUNTED TRANSACTIONS REFLECTING I N SEIZED PAPER PAGE NOS. 108 AND 109. 120. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECIDE D THIS GROUND ALONG WITH GROUND NO. 8 OF THE ASSESSEES APPEAL (SUPRA). THIS GROUND SHALL ALSO BE DEALT WITH AS PE R OUR DIRECTIONS ABOVE. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 153 121. GROUND NO. 13 OF THE REVENUE IS THAT THE LEARN ED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.27,69,710/-, RS.1,12,60,200/- AND RS.5,00,000/-, RS.5,00,000/- AND RS. 79,40,236/- MADE ON ACCOUNT OF UNACCOUNTED INCOME DETERMINED ON THE BASIS OF ESTIMATI ON OF GROSS PROFIT. 122. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECIDE D THIS GROUND ALONG WITH GROUND NO. 9 OF THE ASSESSEES APPEAL (SUPRA). THIS GROUND SHALL ALSO BE DEALT WITH AS PER OUR DIRECTIONS ABOVE. 123. GROUND NO. 14 OF THE REVENUE IS THAT THE L EARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.6,47,000/- ON THE BASIS OF LPS-2 WITHOUT ESTABLISH ING ANY LINK WHICH COULD PROVE UNACCOUNTED EXPENSES WERE INCLUDED IN THE UNACCOUNTED INCOME. ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 154 124. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECIDE D THIS GROUND ALONG WITH GROUND NO. 10 OF THE ASSESSEE S APPEAL (SUPRA). THIS GROUND OF THE REVENUE IS ACCORDING LY ALLOWED. 125. GROUND NO. 15 OF THE REVENUE IS THAT THE L EARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4,34,30,138/- MADE ON THE BASIS OF LPS-2. 126. WE HAVE HEARD BOTH THE SIDES. WE HAVE DECIDE D THIS GROUND ALONG WITH GROUND NO. 7 RELATING TO MCX TRANSACTIONS IN THE ASSESSEES APPEAL (SUPRA). THIS GROUN D SHALL ALSO BE DEALT WITH AS PER OUR DIRECTIONS ABOVE. 127. IN GROUND NO. 16 THE REVENUE TAKEN THE GROUND IN RESPECT OF DELETING THE ADDITION OF RS.3,85,520/- MAD E ON THE BASIS OF LPS -2. 128. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE IN PARA 25 AT PAGE 117 AS UNDER :- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 155 25. GR. NO. 19 OF APPEAL IS AGAINST ADDITION OF RS.3,85,520/- ADDED ON THE BASIS OF PAGE NO.91 OF L PS- 1/91, WHICH IS A PURCHASE BILL OF GOLD OF RS.3,85,5 20/- FROM M/S PRAKASH JEWELLERS. AO ADDED THE SAME IN APPREHENSION THAT SAME WAS NOT RECORDED IN BOOKS, WHEREAS APPELLANT PRODUCED THE BOOKS BEFORE AO SHOW ING BOTH INWARD & OUTWARD ENTRY, SHOWING THAT SUCH PURC HASE WAS CANCELLED. SINCE BOOKS WERE PRODUCED SHOWING RE VERSAL OF SUCH ENTRY, NO ADVERSE INFERENCE COULD BE DRAWN, WITHOUT ANY BASIS. HENCE ADDITION OF RS.3,85,520/- IS HEREB Y DELETED. GR. NO.19 OF APPEAL IS ALLOWED. 129. THE LEARNED DR FAILED TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A) THAT THE BOOKS OF ACCO UNTS PRODUCED REFLECTED SUCH ENTRIES AND NO ADVERSE INFER ENCE IS DRAWN. FOR THE SAME REASONS, THIS GROUND OF THE REVEN UE IS DISMISSED. 130. IN GROUND NO. 17 THE REVENUE HAS TAKEN THE ISS UE REGARDING DELETING THE ADDITION OF RS.9,43,900/- MADE ON ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 156 ACCOUNT OF TRADING ON MCX. THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE IN PARA 29 OF HIS ORDER AS UNDER : 29. GR. NO. 24 IS AGAINST DISALLOWANCE OF SALARY E XPENSE OF MCX TRADING OF RS.9,43,900/-. AO COMPARED SALARY EX PENSES OF AY 2008-09 WITH THAT OF RS. 2011-12 & FOUND THEM EXCESSIVE. BUT CONSIDERING THE FACT THAT HUGE TRANS ACTIONS WERE NOTICED ON MCX AS PER SEIZED PAPERS AND AN UNACCOUNTED INCOME FROM MCX TRADING OF RS.6.07 CROR E IS ALREADY ADDED, EXPENSE ON SALARY FOR MCX TRADING SE EMS JUSTIFIED & ADDITION OF RS.9,43,900/- IS DELETED. A S A RESULT GR. NO. 24 OF APPEAL IS ALLOWED. 131. THE LEARNED DR COULD NOT CONTROVERT THE FINDI NGS OF THE LEARNED CIT(A). THIS GROUND IS, THEREFORE, DI SMISSED. 132. GROUND NO. 18 IS THAT THE LEARNED CIT(A) ERRED IN FACTS AND LAW WHILE DECIDING THE GROUND NO. 5 OF APPEL LANT BY IGNORING THAT THE SURRENDERED AMOUNT OF RS.7,28,25,000/- IS ALREADY REDUCED FROM THE ADDITIONS ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 157 MADE ON VARIOUS ACCOUNTS IN THE COMPUTATION OF ASSESSED INCOME IN THE END OF THE ASSESSMENT ORDER. THIS GROU ND OF THE REVENUE IS GENERAL IN NATURE AND DISMISSED AS SUCH. 133. SO FAR AS TELESCOPING IS CONCERNED, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS A SETTLE D LAW THAT TELESCOPING BENEFIT SHOULD BE GIVEN FOR EXPLAINI NG ANY SUBSEQUENT INVESTMENT OR CASH CREDIT WHICH COULD NOT BE EXPLAINED TO FULL SATISFACTION. IN CASE ANY ADDITION IS S TILL SUSTAINED BY APPLYING THE GP RATE, IT WAS DEFINITELY AVAILABLE FOR INVESTMENT IN THE BOOKS. THIS IS AN ASSESSMENT OF THE UNDISCLOSED INCOME WHICH IS TAXED AS EARNED OUTSIDE THE BOOKS OF ACCOUNTS, HAS TO BE CONSI DERED FOR THE INVESTMENT AND FOR THE ENTRIES IN THE LOOSE PAPERS. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, PRA YED THAT TELESCOPIC BENEFIT BE GIVEN TO ASSESSEE. THE LEARNE D DR ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 158 OBJECTED TO THE SUBMISSIONS OF THE LEARNED COUNSEL F OR THE ASSESSEE. 134. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SI DES, WE DIRECT THE ASSESSING OFFICER TO GIVE TELESCOPIC BENEFIT WHILE GIVING EFFECT TO THIS ORDER. PRONOUNCED IN OPEN COURT ON 17 TH MAY, 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 17 TH MAY, 2016 DN/- ACIT VS. OMPRAKASH DHANWANI IT(SS) A NOS. 254 TO 256/IND/2015 OMPRAKASH DHANWANI VS. ACIT IT(SS) A NOS. 241 TO 243/IND/2015 159