M/s Anand Transport Company, Bhopal V. The ACIT, 3(1), Bhopal

ITSSA 258/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9451 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 21-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; MRIDULA BAJPAI
• Assessee Lawyers: H P VERMA; N D PATWA
• Keywords: Additional evidence; Reasonable cause
• Section: 142(1); 148; 132; 68

Judgement Text

-: 1: - 1 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAIFA4711A I.T(SS).A.NOS. 258 TO 260 /IND/201 2 A.YS. : 2002-03 TO 2004-05 M/S.ANAND TRANSPORT COMPANY, JAWAHAR CHOWK, BHOPAL. VS. ASSISTANT COMMISSIONER OF INCOME-TAX, 3(1), BHOPAL APPELLANT RESPONDENT APPELLANT BY : SHRI H.P.VERMA AND SHRI N. D. PATWA, ADV. RESPONDENT BY : SMT. MRIDULA BAJPAI, CIT DR AND SHRI R. A. VERMA, SR. DR DATE OF HEA RING : 31 . 0 7 .201 3 DATE OF PRONOUNCEMENT : 29 . 0 8 .201 3 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 31 ST DECEMBER, 2008, FOR THE ASSESSMENT YEARS 2002-03 , 2003-04 AND 2004-05. -: 2: - 2 2. COMMON ISSUE HAS BEEN RAISED IN ALL THE YEARS, THEREFORE, ALL THE APPEALS WERE HEARD TOGETHER AND ARE NOW DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 3. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT ON 21.09.2006, A S EARCH AND SEIZURE U/S 132(1) WAS CARRIED OUT IN THE CASE OF M OHD. SHAFIQUE GROUP CASES. ASSESSEE IS A PARTNERSHIP FIR M DEALING IN TRANSPORTATION. DURING COURSE OF SEARCH, DOCUMEN TS AND INFORMATION RELATING TO THE ASSESSEE WERE ALSO FOUN D AND SEIZED. AFTER RECORDING THE REASONS THE ASSESSING O FFICER ISSUED NOTICE U/S 153C. IN RESPONSE, THE ASSESSEE FILED TH E RETURN OF INCOME OF VARIOUS YEARS AS UNDER :- ASSESSMENT YEAR RETURNED INCOME A. 2002 - 03 RS. 6,90,837/ - B. 2003 - 04 RS. 6,70,068/ - C. 2004 - 05 NIL 4. AGAINST THE ADDITION SO MADE, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND IT WAS PLEADED THAT TH E ASSESSING -: 3: - 3 OFFICER WAS NOT JUSTIFIED IN PASSING THE ORDER WITH OUT PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. IT WAS CONTEN DED BEFORE THE CIT(A) THAT A COMMON NOTICE U/S 142(1) WAS ISSU ED FOR ALL ASSESSMENT YEARS. THAT THE ASSESSING OFFICER HAS RA ISED QUERIES AT THE LAST STAGE OF ASSESSMENT PROCEEDING AND HAS NOT GRANTED ADEQUATE AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 5. HOWEVER, THE CIT(A) DISMISSED ASSESSEES GROUNDS AFTER HAVING THE FOLLOWING OBSERVATIONS :- ON EXAMINATION IT IS FOUND THAT THE ASSESSING OFFI CER HAS GIVEN ADEQUATE AND SUFFICIENT OPPORTUNITY TO TH E APPELLANT FOR EXPLAINING HIS CASE. THIS FACT IS EVI DENT FROM THE ASSESSMENT ORDER ITSELF. THE FACT THAT A COMMON QUESTIONNAIRE IS ISSUED ALONGWITH NOTICE U/S 142(1) IS NOT A DEFECT TO IMPAIR THE ASSESSMENT PROCEEDING IN ANY WAY. SINCE MANY ISSUES LIKE AGRICULTURAL INCOME, RENTAL INCOME ETC. ARE COMMON TO ALL YEARS, THE ASSESSING OFFICER WAS JUSTIFIED IN ISSUING A COMMON QUESTIONNAIRE U/S 142(1). IN VIEW OF THE ABOVE THIS GROUND OF APPEAL IS DISMISSED. -: 4: - 4 6. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT U/S 145(3) AN D ESTIMATED PROFIT AT 8%. 7. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ESTIMATION OF PROFIT AT 8 % AFTER HAVING THE FOLLOW ING OBSERVATIONS :- 5.3 I HAVE EXAMINED THE ISSUE. IT IS FOUND THAT BOOKS OF ACCOUNT AND BILLS AND VOUCHERS WERE NOT MAINTAINED BY THE APPELLANT. IN THE WRITTEN ARGUMEN T PRODUCED BEFORE ME IT IS CLAIMED THAT BOOKS WERE REGULARLY MAINTAINED. BUT NO REASON IS ASSIGNED AS TO WHY THEY WERE NOT PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE ME. IN ABSENCE OF BOOKS OF ACCOUNT AND BILLS AND VOUCHERS THE ASSESSING OFFICE R WAS JUSTIFIED IN REJECTING THE BOOK RESULTS. ESTIMA TION OF PROFIT @ 8% OF TURNOVER DONE BY THE ASSESSING OFFICER IS ALSO REASONABLE IN TRANSPORT BUSINESS. I N VIEW OF THE ABOVE THE REJECTION OF BOOKS OF ACCOUNT S AND ESTIMATION OF PROFIT @ 8% DETERMINING NET PROFI T AT -: 5: - 5 RS. 25,37,108/- IS VALID HENCE THE SAME IS CONFIRMED. 8. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 9. WITH RESPECT TO ASSESSING OFFICERS ACTION FOR REJE CTION OF ACCOUNT, IT WAS PLEADED BY LD. AUTHORIZED REPRES ENTATIVE THAT NO DEFECT OF ANY NATURE WAS FOUND IN THE BOOKS TO APPLY PROVISIONS OF SECTION 145, NOR ANY COMPARABLE CASE WAS CITED BY THE ASSESSING OFFICER OR CIT(A). ACCORDINGLY, IT WAS REQUESTED THAT ESTIMATION OF PROFIT AT 8 % WAS NOT JUSTIFIED AND THE SAME SHOULD BE DELETED. 10. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. THE FACTS OF THE CASE IN BRIEF ARE THAT T HE ASSESSEE FIRM IS CONDUCTING BUSINESS OF TRANSPORT. THE ASSES SEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND BILLS AND VOUCHERS BE FORE THE ASSESSING OFFICER. SINCE BOOKS OF ACCOUNTS AND BILL S AND VOUCHERS WERE NOT PRODUCED THE ASSESSING OFFICER RE JECTED THE BOOKS OF ACCOUNT U/S 145(3) AND ESTIMATED THE PROFI T @ 8% OF TOTAL RECEIPTS. HE DETERMINED THE PROFIT OF THE TRA NSPORTATION BUSINESS AT RS. 25,37,108/-. DURING THE COURSE OF A SSESSMENT, -: 6: - 6 THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNTS AND VOUCHERS TO SUPPORT THE EXPENDITURE CLAIMED. HOWEVE R, THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNTS AS WELL AS BILLS AND VOUCHERS BEFORE THE ASSESSING OFFICER AND CIT(A). IN THE ABSENCE OF BOOKS OF ACCOUNTS, BILLS/VOUCHERS, T HE ASSESSING OFFICER ESTIMATED PROFIT FROM TRANSPORT B USINESS AT 8 %, WHICH WAS CONFIRMED BY THE LD.CIT(A). KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS AND THE FACT THAT BOO KS OF ACCOUNTS WERE NOT PRODUCED BEFORE ANY OF THE LOWER AUTHORITIES, THE ESTIMATION OF PROFIT AT 8 % OF GRO SS TRANSPORT RECEIPT WAS JUSTIFIED. NOTHING WAS PRODUCED BEFORE US TO PERSUADE US TO DEVIATE FROM THE FINDINGS RECORDED B Y THE LOWER AUTHORITIES WITH REGARD TO NON PRODUCTION OF BOOKS OF ACCOUNTS, BILLS AND VOUCHERS. ACCORDINGLY, WE CONFI RM THE ACTION OF THE CIT(A) UPHOLDING THE ACTION OF ASSESS ING OFFICER FOR ESTIMATING NET PROFIT AT 8% OF TRANSPORT RECEIP TS. 11. THE ASSESSEE HAS ALSO CHALLENGED THE ADDITION OF RS . 31,53,364/- ON ACCOUNT OF CAPITAL CONTRIBUTION FROM PARTNERS. -: 7: - 7 12. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 6.2 BEFORE ME, IT IS PLEADED THAT THE ASSESSING OFFICER DID NOT ALLOW TIME TO SUBMIT CAPITAL CONFIR MATION FROM THE PARTNERS. THE PARTNERS CONFIRMATION IN FOR M OF AFFIDAVITS ARE PRODUCED BEFORE ME. ON EXAMINATION I T IS FOUND THAT THE ASSESSING OFFICER HAD ALLOWED ADEQUA TE AND SUFFICIENT TIME FOR SUBMITTING EVIDENCE IN SUPP ORT OF CASH CONTRIBUTION MADE BY THE PARTNERS. SINCE THE APPELLANT WAS ALLOWED ADEQUATE TIME TO SUBMIT CONFIRMATION AND OTHER DOCUMENTS IN SUPPORT OF CREDITWORTHINESS OF THE PARTNERS THE ADDITIONAL EVI DENCES ARE NOT ADMITTED SINCE THEY ARE NOT ADMISSIBLE UNDE R RULE 46A. THE ADMISSIBLE MATERIAL ON RECORD SHOWS THAT N O EVIDENCE IN SUPPORT OF CREDITWORTHINESS OF AND CASH CONTRIBUTION BY THE PARTNERS IS AVAILABLE. IN VIEW OF THESE FACTS IT IS HELD THAT THE ADDITION OF RS. 10,00,000 /- MADE U/S 68 IS VALID HENCE THE SAME IS CONFIRMED. THERE IS NO EVIDENCE FOR INTRODUCTION OF CAPITAL OF RS. 21,53,3 64/- SINCE THE SOURCE OF THIS AMOUNT INTRODUCED AS VALUE OF -: 8: - 8 TRUCK IS NOT PROVED THE ADDITION OF RS. 21,53,364/- ALSO IS CONFIRMED. IN THE RESULT, THE IMPUGNED ADDITION OF RS. 31,53,364/- IS CONFIRMED. 13. WITH RESPECT TO ADDITION ON ACCOUNT OF PARTNERS CAPITAL AMOUNTING TO RS. 31,53,364/-, CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS AS UNDER :- ON 10-11-2008 THE ID. AO REQUIRED THE ASSESSEE TO FILE DETAILS OF PARTNERS WHO HAD ALREADY OPTED OUT OF THIS PARTNERSHIP ON 01-05- 2005. IT WAS A VERY SHORT TIME FOR COMPLIANCE. THE ASSESSEE OBTAINED THE AFFIDAVITS OF 11 PARTNERS P.B. 35-41 THAT WERE FILED BEFORE THE ID. CIT (A). THE REMAINING PARTNERS SHRI SAQEER AHMED EXPIRED. THE PARTNERS CONFIRMED THE CAPITAL CONTRIBUTIONS. THE COPIES OF REGISTRATION OF TRUCKS WITH RTO WERE ALSO FILED. THESE ARE GOVERNMENT DOCUMENTS . THE DETAILS OF CAPITAL CONTRIBUTIONS BY PARTNERS ARE AS UNDER. THE P. B. MENTIONED ARE THE PAGES OF PAPER BOOK FOR 3 YEARS. -: 9: - 9 INITIAL CAPITAL CONTRIBUTION BY PARTNERS AFFIDAVITS OF THE PARTNERS WERE NOT ENTERTAINED BY THE ID. CIT (A). MANY OF THE PARTNERS ATTACHED THEIR TRUCKS WITH THE FIRM AS CAPITAL CONTRIBUTION. PROOF OF TRUCK-OWNERS WAS SUBMITTED. NO. NAME AFFIDAVIT REMARKS AMOUNT 1 MOHD. YUSUF. ASSESSE PB 35 PB36 TATA HEAVY DUTY TRUCK CPO 8287 (1980 MODEL) SINCE 1999 PB37 TATA HEAVY DUTY TRUCK MP04-C-7394 (1990 MODEL) SINCE 24.01.2001. BALANCE CAPITAL OUT OF PAST EARNINGS 4,68,124 1,00,000 5,68,1243 2. ANEES AHMED ASSESSEE PB38, 40 PB 39. TATA HEAVY DUTY TRUCK MBC 8165 (1983 MODEL) SINCE 01-06-90 TATA HEAVY DUTY MPL 3525 SINCE 1989. BALANCE CAPITAL OUT OF PAST EARNINGS. 4,37,584 50,000 4,87,548 3. NAFEES AHMED ASSESSEE PB41 PB 42. TATA HEAVY DUTY TRUCK MBE 2019 (1982 MODEL PB 43 TATA HEAVY DUTY TRUCK MP09-K-6992. ON THE NAME OF SON SHRI FAZEEL AHMED. BALANCE CAPITAL OUT OF PAST EARNING. 4,61,254 50,000 5,11,254 -: 10: - 10 4. RAKESH TYAGI PB46 TRUCK MBI 9547 SINCE 1998 BALANCE CAPITAL OUT OF PAST EARNINGS 2,65,475 50,000 3,15,475 5. MOHD. SHAHID PB47 IN SERVICE, PAST SAVINGS 1,0 0,000 6. MOHD. NASIR PB49 PB50. IN SERVICE. HAVING DRIVING LICENCE LMV-NI.PAST SAVINGS 1,00,000 7. MOHD. KHALID PB51 IN SERVICE. PAST SAVINGS 1,0 0,000 8. MOHD. SHAMEEM PB53 IN SERVICE. PAST SAVINGS 1,00,000 9. SAGEER MOHD.KHAN PB55 IN SERVICE. PAST SAVINGS 1,00,000 10. ANEES KHAN PB56 IN SERVICE. PAST SAVINGS 1,00 ,000 11. SAGEER AHMED DEAD) - PB32 TRUCK CPO 7596 PB30 PAST SAVINGS 2,45,176 1,00,000 3,45,176 12. HARISH NEMA -- PB32 TRUCK MBC 8125 PB30. PAST SAVINGS 2,75,751 50,000 3,25,751 THE CAPITAL CONTRIBUTION WAS ON THE FIRST DAY OF AC COUNT PERIOD. IN VIEW OF CIT VS. METACHEM INDUSTRIES, 245 ITR 160 MP, NO ADDITION COULD BE MADE. P.K.NOORJAHAN VS. ITO, 237 ITR 570 ( S.C.) -: 11: - 11 MITESH ROLLING MILLS PVT.LTD. VS. CIT, 258 ITR 278 (GUJ). ALTERNATIVELY AND WITHOUT PREJUDICE TO THE FOREGOIN G, WHEN BOOKS OF ACCOUNTS ARE REJECTED AND INCOME IS ESTIMA TED, NO ADDITION U/S 68 CAN BE MADE. ANANTHARAM VEERSINGHAI VS. CIT, 123 ITR 457 S.C. CIT VS. AGRAWAL ENGG. CO., 302 ITR 246 P & H. 14. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. THE FACTS OF THE ISSUE IN BRIEF ARE THAT THE ASSESSEE FIRM HAS INTRODUCED CAPITAL CONTRIBUTION IN CASH OF RS. 10,00,000/- FROM 11 PARTNERS. THE PARTNERS HAVE ALS O INTRODUCED CAPITAL IN TIME IN FORM OF TRUCKS TOTALL Y VALUED AT RS. 21,53,364/-. THE ASSESSING OFFICER HELD THAT TH AT THE ASSESSEE HAS NOT SUBMITTED ANY PROOF IN SUPPORT OF THE CREDITWORTHINESS OF THE PARTNERS HENCE TREATED THE CASH CREDITS INTRODUCED. FROM THE RECORD, WE FOUND THAT BEFORE T HE CIT(A), THE ASSESSEE HAS FILED CONFIRMATION FROM THE PARTNE RS REGARDING THEIR CAPITAL CONTRIBUTION ALONGWITH AFFI DAVITS. THE ASSESSEE HAS ALSO FILED DETAILS REGARDING CONTRIBUT ION OF CAPITAL OTHER THAN CASH WHICH WAS IN THE FORM OF TRUCKS EMP LOYED IN -: 12: - 12 THE BUSINESS AND WHICH WERE OWNED BY THE RESPECTIVE PARTNERS. THE DOCUMENTARY EVIDENCE WITH REGARD TO REGISTRATION OF TRUCK IN THE NAME OF PARTNERS WERE ALSO FILED BEFORE THE CIT(A). WITHOUT CONSIDERING THE SAME, TH E CIT(A) HAS REJECTED THE ADDITIONAL EVIDENCE. AS PER OUR CO NSIDERED VIEW, THE EVIDENCE SO FILED BY THE ASSESSEE BEFORE CIT(A), GOES TO THE ROOT OF THE ISSUE TO SUBSTANTIATE CAPITAL CO NTRIBUTED BY THE PARTNERS IN THE FORM OF CASH AND KIND. IN THE I NTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK T O THE FILE OF A.O. FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNI TY TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 15. IN THE ASSESSMENT YEAR 2002-03, THE ASSESSEE HAS ALSO CHALLENGED ADDITION OF RS. 5,35,000/- MADE U/S 68 OF THE INCOME-TAX ACT, 1961. THE FACTS OF THE ISSUE IN BRI EF ARE THAT THE ASSESSEE HAS CLAIMED TO HAVE OBTAINED UNSECURED LOAN OF RS. 5,35,000/- FROM M/S. SUNIL MAHESHWARI ROADWAYS. THE ASSESSEE DID NOT SUBMIT LOAN CONFIRMATION FROM THE CREDITOR OR ANY OTHER DOCUMENT IN SUPPORT OF CREDITWORTHINESS OF THE CREDITOR. HENCE, THE ASSESSING OFFICER MADE ADDITIO N OF RS. 5,35,000/- U/S 68. -: 13: - 13 16. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 7.2 BEFORE ME IT IS PLEADED THAT THE APPELLANT HAD APPROACHED THE CREDITOR TO GIVE LOAN CONFIRMATION B UT THE CREDITOR HAS REFUSED TO GIVE LOAN CONFIRMATION SINCE THE LOANS ARE VERY OLD AND RECORDS ARE NOT AVAILABLE. HENCE IT IS NOT POSSIBLE FOR THE APPELLA NT TO SUBMIT THE LOAN CONFIRMATION. THAT THE ADDITION U/S 68 IS NOT VALID SINCE THE NET PROFIT HAS BEEN ESTIM ATED IN THE APPELLANTS CASE. 7.3 THE FACTS OF THE CASE SHOWS THAT THE APPELLANT HAS NOT SUBMITTED EVEN A LOAN CONFIRMATION FROM THE CREDITOR. IN ABSENCE OF EVIDENCE OF CREDITWORTHINES S AND LOAN CONFIRMATION THE ASSESSING OFFICER WAS JUSTIFIED IN HOLDING THAT THE SOURCE OF CASH CREDIT S WAS NOT EXPLAINED. IN THE APPELLANTS CASE RATIO OF 123 ITR 457 S.C. DO NOT APPLY SINCE FACTS OF THE CASE ARE SUBSTANTIALLY DIFFERENT. IN VIEW OF THE AB OVE IT IS HELD THAT THE IMPUGNED ADDITION OF RS. -: 14: - 14 5,35,000/- U/S 68 IS VALID HENCE THE SAME IS CONFIRMED. 17. WITH REGARD TO ADDITION OF RS. 5,35,000/- IN THE ASSESSMENT YEAR 2002-03, THE CONTENTION OF LD. AUTH ORIZED REPRESENTATIVE WAS AS UNDER :- RS. 5,35,000 ON THE NAME OF SUNIL MAHESHWARI PROP. OF M/S MAHESHWARI ROADWAYS, ITAWARA ROAD, BHOPAL. THE CREDITOR WAS APPROACHED FOR CONFIRMATION BUT HE STATED THAT IT WAS OLD MATTER AND NOT TRACEABLE. THE LD. AO COULD HAVE CALLED THE INFORMATION FROM HIM. KINDLY SEE PB 9 FOR W.S. TO ID. CIT (A). 18. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. AS PER FINDINGS RECORDED BY THE LOWER AUTH ORITIES, THE ASSESSEE WAS UNABLE TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITOR M/S. SUNIL MA HESHWARI ROADWAYS. IT WAS EXPLAINED THAT CREDITOR HAS REFUSE D TO GIVE LOAN CONFIRMATION. AS PER OUR CONSIDERED VIEW UNDER THE PROVISIONS OF SECTION 68, ONUS IS ON THE ASSESSEE T O PROVE NOT ONLY IDENTITY BUT ALSO GENUINENESS OF LOAN TRANSACT ION AS WELL -: 15: - 15 AS CREDITWORTHINESS OF LOAN CREDITOR. SINCE THE ASS ESSEE HAS GROSSLY FAILED TO PROVE THESE INGREDIENTS, WE DO NO T FIND ANY INFIRMITY FOR THE ADDITION MADE U/S 68 OF THE INCOM E-TAX ACT, 1961. 19. IN THE ASSESSMENT YEAR 2002-03, THE ADDITION OF RS. 3,99,022/- U/S 68 WAS CHALLENGED. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE HAS SHOWN CASH CREDIT O F RS. 3,99,022/- FROM 11 CASH CREDITORS. NO EVIDENCE IN S UPPORT OF THE IDENTITY OF THE CREDITORS OR CREDITWORTHINESS O F THE CASH CREDITORS WAS SUBMITTED BEFORE THE ASSESSING OFFICE R HENCE HE HELD THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAI NED AND MADE ADDITION OF RS. 3,99,022/- U/S 68. 20. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED TH E ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 8.2 BEFORE ME THE APPELLANT HAS SUBMITTED COPIES OF AFFIDAVITS SWORN ON 15.3.2011. THE ASSESSMENT WAS COMPLETED ON 31.12.2008. THE APPELLANT HAS NOT BEEN ABLE TO GIVE ANY REASONABLE CAUSE AS TO WHY THESE EVIDENCES WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER HENCE THEY ARE NOT ADMITTED. IN ANY CASE TH E -: 16: - 16 APPELLANT HAS NOT SUBMITTED ANY EVIDENCE IN SUPPORT OF THE CREDITWORTHINESS OF THE CASH CREDITORS EVEN BEFORE ME. IN VIEW OF THESE FACTS IT IS HELD THAT ADDITION OF RS. 3,99,022/- U/S 68 IS VALID HENCE TH E SAME IS CONFIRMED. 21. WITH RESPECT TO ADDITION OF CASH CREDITORS OF RS. 3,99,022/- IN THE ASSESSMENT YEAR 2002-03, IT WAS C ONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT CREDITORS WERE ON ACCOUNT OF PURCHASE OF DIESEL, ELECTRICAL ITEMS, PE TROL AND REPAIRING WORK. MOST OF THE CREDITORS ARE TRUCK OWN ERS WHO FILED PROOF FOR THE SAME. NO. CREDITOR AMOUNT (RS.) REMARKS 1. MIS CAPITAL AUTO DIESELS. 33,671 DIESEL PURCHASE. 2. MIS SHAKIL ELECTRICALS. 46,845 ELECTRICAL WORK. 3. MIS DELUX BATTERY 31,329 BATTERY PURCHASE, CHARGING REPAIRS 4. SHERU BODY MAKER 19,478 FOR TRUCK BODY & REPAIRS. 5. KHATTUMAL 19,540 FAMOUS TRANSPORT DALAL. 6. NAVALBABU 19,847 COULD NOT BE CONTACTED. 7. MUNNE BHAI 18,351 AFFIDAVIT PB 57 TRUCK 8101 FROM 1993 YEARLY INCOME RS.50,000 8. RIYAZ BHAI I 19,890 AFFIDAVIT PB 58 TRUCK MP04-B- 7318. YEARLY INCOME 50,000 9. ARIF 19,150 AFFIDAVIT PB 59 MPC4900. YEARLY INCOME I 1 10. RAJA MIYAN - J 19,220 AFFIDAVIT PB 60 TRUCK I MP06E0788 SINCE 1999./ -: 17: - 17 I YEARLY INCOME RS.50,OOO 11. MOHD. KHALID I 19,300 AFFIDAVIT PB 61 TRUCK CIC 7923 I FROM 1998 YEARLY INCOME I RS.50,000 12. P. MOHAN 19,550 AFFIDAVIT PB 62 TRUCK MBD 821 PAN: AGDPP0663K SINCE 1989 YEARLY INCOME RS.50,000 13. ANSAR 16,620 AFFIDAVIT PB 63 TRUCK CPC I 8212 SINCE 1982 YEARLY , INCOME RS.50,000 I 14. JABBAR 18,992 AFFIDAVIT PB 64 TRUCK MP04 I 0791 SINCE 1990, YEARLY I INCOME RS.50,000 I 15. SALIM BHAI PAN 19,191 AFFIDAVIT PB 65 TRUCK MBCI BWPPS4561Q 8484 SINCE 1999 YEARLY I INCOME RS.50,000 I 16. SHOKAT BHAI 19,249 AFFIDAVIT PB 66 TRUCK MBN! 1673 SINCE 1985 YEARLY I INCOME RS.50,000 I 17. MOHD. MAQSOOD 19,540 AFFIDAVIT PB 69 TRUCK MP09 KC I 2146 SINCE 2002 YEARLY INCOME RS.50,000 18. IQBAL BHAI 19,259 AFFIDAVIT PB 68 TRUCK MP09 KA 5786 SINCE 1999 YEARLY ------------------- INCOME RS.50,000. TOTAL RS. 3,99,022 ASSESSMENT YEAR 2003-04 NO. CREDITOR AMOUNT REMARKS .- (RS.) 1. ABBAS BHAI 18,940 AFFIDAVIT PB 67 TRUCK MPC 1585 SINCE 1990 YEARLY INCOME RS. 50,000. 2. DULARE BHAI 19,450 AFFIDAVIT PB 73 TRUCK MPC I 8337 SINCE 1998 YEARLY I INCOME RS. 50,000. 3. HARJESH MOTHA AMAPM 3720B 19,420 AFFIDAVIT PB 72 TRUCK MP04K I 1067 SINCE 1997 YEARLY INCOME RS. 50,000. 4. KAMAL BHAI 18,670 AFFIDAVIT PB 71 TRUCK MPE 9186 SINCE 1999 YEARLY, INCOME RS. 50,000. -: 18: - 18 5. MUNAVVAR BHAI 18,540 AFFIDAVIT PB 70 TRUCK MPC I 8025 SINCE 1986 YEARLY INCOME RS. 50,000. 6. VIJAI BHAI 17,840 AFFIDAVIT P.B.78 TRUCK CPC 8305 SINCE 1985 YEARLY INCOME RS. 50,000 22. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT AFFIDAVITS OF THESE CREDITORS WERE FILED BEFORE THE CIT(A), SINCE VERY SHORT TIME WAS GIVEN BY THE ASSESSING OFFICER, THE SAME COULD NOT BE FILED BEFO RE THE ASSESSING OFFICER. AS PER LD. AUTHORIZED REPRESENTA TIVE, THE LD. CIT(A) WITHOUT CONSIDERING THESE AFFIDAVITS HAVE CO NFIRMED THE ADDITIONS INJUDICIOUSLY. ACCORDINGLY, IT WAS REQUES TED THAT ADDITIONS SO MADE SHOULD BE DELETED. 23. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. TO SUBSTANTIATE THE TRADE CREDITORS, THE A SSESSEE HAS FILED DETAILS OF PURCHASES ON DIESEL, ELECTRICAL IT EMS, PETROL AND REPAIRING WORK BEING CARRIED OUT BY IT. THE ASSESSE E HAS ALSO FILED RESPECTIVE AFFIDAVITS ALONGWITH VEHICLE NUMBE RS OWNED BY THE CREDITORS. SINCE VERY SHORT TIME WAS GIVEN BY T HE ASSESSING OFFICER, THE ASSESSEE WAS UNABLE TO PRODUCE THESE E VIDENCES BEFORE THE ASSESSING OFFICER. ACCORDINGLY, EVIDENCE S WERE FURNISHED BEFORE THE CIT(APPEAL), WHO HAS DECLINED TO ACCEPT -: 19: - 19 THE SAME. AS THESE EVIDENCES GO TO THE ROOT OF THE ISSUE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILE OF A.O. FOR DECIDING AFRESH AFTER CONSIDER ING EVIDENCES FILED BEFORE THE CIT(A). THE ASSESSEE IS ALSO AT LI BERTY TO FURTHER SUBSTANTIATE ITS CLAIMED BY PRODUCING EVIDENCE TO T HE SATISFACTION OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER IS TO DECIDE THE ISSUE AFRESH. WE DIRECT ACCORDINGLY. 24. IN THE ASSESSMENT YEAR 2003-04, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 94,190/- U/S 68. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE HAS SHOWN C ASH CREDIT OF RS. 94,190/- FROM 5 CASH CREDITORS. NO EVIDENCE IN SUPPORT OF THE IDENTITY OF THE CREDITORS OR CREDITWORTHINES S OF THE CASH CREDITORS WAS SUBMITTED BEFORE THE ASSESSING OFFICE R, HENCE HE HELD THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAI NED AND MADE ADDITION OF RS. 94,190/- U/S 68. BY THE IMPUGN ED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 9.2 BEFORE ME THE APPELLANT HAS SUBMITTED COPIES OF AFFIDAVITS SWORN ON 15.3.2011. THE ASSESSMENT WAS COMPLETED ON 31.12.2008. THE APPELLANT HAS NOT BEEN -: 20: - 20 ABLE TO GIVE ANY REASONABLE CAUSE AS TO WHY THESE EVIDENCES WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER HENCE THEY ARE NOT ADMITTED. IN ANY CASE TH E APPELLANT HAS NOT SUBMITTED ANY EVIDENCE IN SUPPORT OF THE CREDITWORTHINESS OF THE CASH CREDITORS EVEN BEFORE ME. IN VIEW OF THESE FACTS IT IS HELD THAT ADDITION OF RS. 94,190/- U/S 68 IS VALID HENCE THE SAME IS CONFIRMED. 25. IN VIEW OF THE DISCUSSIONS MADE HEREIN ABOVE AND TH E DETAILS FILED BY THE ASSESSEE BEFORE THE CIT(A) IN RESPECT OF CREDIT FROM ABBAS BHAI, DULARE BHAI, HARJESH MOTHA ETC., WE FOUND THAT THE ASSESSEE HAS ALSO FILED AFFIDAVITS F ROM THESE CREDITORS ALSO. IN VIEW OF THE REASONING GIVEN IN R ESPECT OF ADDITION MADE IN THE ASSESSMENT YEAR 2002-03 HEREIN - ABOVE, THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSIN G OFFICER FOR DECIDING AFRESH, KEEPING IN VIEW THE OBSERVATION MA DE BY US HEREINABOVE. WE DIRECT ACCORDINGLY. 26. IN THE ASSESSMENT YEAR 2004-05, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 76,850/- U/S 68. TH E FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE HAS SHOWN C ASH CREDIT -: 21: - 21 OF RS. 76,850/- FROM 4 CASH CREDITORS. NO EVIDENCE IN SUPPORT OF THE IDENTITY OF THE CREDITORS OR CREDITWORTHINES S OF THE CASH CREDITORS WAS SUBMITTED BEFORE THE ASSESSING OFFICE R HENCE HE HELD THAT THE SOURCE OF CASH CREDITS WAS NOT EXPLAI NED AND MADE ADDITION OF RS. 76,850/- U/S 68. 27. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 10.2 BEFORE ME THE APPELLANT HAS SUBMITTED COPIES OF AFFIDAVITS SWORN ON 15.3.2011. THE ASSESSMENT WAS COMPLETED ON 31.12.2008. THE APPELLANT HAS NOT BEEN ABLE TO GIVE ANY REASONABLE CAUSE AS TO WHY THESE EVIDENCES WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER HENCE THEY ARE NOT ADMITTED. IN ANY CASE THE APPELLANT HAS NOT SUBMITTED ANY EVIDENCE KIN SUPPORT OF THE CREDITWORTHINESS OF THE CASH CREDITOR SEVEN BEFORE ME. IN VIEW OF THESE FACTS IT IS HELD THAT ADDITION OF RS. 76,850/- U/S 68 IS VALID HENCE THE SAME IS CONFIRMED. -: 22: - 22 28. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. FOLLOWING THE SAME REASONING AS GIVEN HERE INABOVE FOR ASSESSMENT YEAR 2002-03, WE RESTORE THE ADDITIO N OF RS. 76,850/- BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH KEEPING IN VIEW THE OBSERVATION MADE BY US HEREINABOVE AND CONSIDERING THE ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A). WE DIRECT ACCORDINGLY. 29. THE ASSESSEE HAS ALSO CHALLENGED SUBSTANTIVE ADDITION IN THE HANDS OF MOHD. YUSUF IN RESPECT OF INCOME OF THE ASSESSEE FIRM. BY OBSERVING THAT THE ASSESSEE W AS UNABLE TO PRODUCE OTHER PARTNERS OF THE FIRM AND THAT WORK ING OF THE FIRM WAS LOOKED AFTER ONLY BY SHRI MOHD. YUSUF, THE ASSESSING OFFICER MADE THE SUBSTANTIVE ADDITION IN THE HANDS OF MOHD. YUSUF AND ON PROTECTIVE BASIS IN THE HANDS OF THE F IRM. 30. BEFORE THE LD. CIT(A), THE ASSESSEE HAS CHALLENGED THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF MOHD. YUSUF AND THE PROTECTIVE ADDITION MADE IN THE HANDS OF TH E ASSESSEE FIRM. BY THE IMPUGNED ORDER, THE LD. CIT(A) HELD TH AT ASSESSEE M/S. ANAND TRANSPORT COMPANY, A PARTNERSHIP FIRM, W HICH EXIST IN THE INCOME TAX RECORDS TILL DATE. ACCORDIN GLY, ADDITION -: 23: - 23 SO MADE IN THE HANDS OF THE ASSESSEE FIRM ON PROTEC TIVE BASIS AND ON SUBSTANTIVE BASIS IN THE HANDS OF MOHD. YUSU F WAS HELD TO BE NOT JUSTIFIED AND THE LD. CIT(A) HAS CON FIRMED ALL THE ADDITIONS ON SUBSTANTIVE BASIS IN THE HANDS OF ASSE SSEE FIRM, M/S. ANAND TRANSPORT COMPANY. PRECISE OBSERVATION O F CIT(A) WAS AS UNDER :- 14. THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE APPELLANT FIRM ON PROTECTIVE BASI S. HE HAS MADE SUBSTANTIVE ADDITION IN HANDS OF ONE OF THE PARTNER SHRI MOHD. YUSUF IN THE RELEVANT ASSESSMENT YEARS. ON EXAMINATION IT IS FOUND THAT THE APPELLANT FIRM WAS REGISTERED WITH THE REGISTRA R OF THE FIRM ON 1.4.2001. IT HAS REGULARLY FILED RET URN OF INCOME FOR ASSESSMENT YEAR 2002-03 TO 2005- 06. THE ASSESSING OFFICER HELD THAT SINCE THE APPELLANT IS NOT ABLE TO PRODUCE ANY DETAIL ABOUT PARTNERS OF THE FIRM EXCEPT SHRI MOHD. YUSUF APPELLANTS INCOME IS TO BE ASSESSED ON PROTECTIVE BASIS IN HANDS OF THE FIRM AND ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI MOHD. YUSUF. THE ASSESSING -: 24: - 24 OFFICER HELD THAT IT SEEMS THAT ONLY WORKING PERSONAL IN THE FIRM IS SHRI MOHD. YUSUF. THE REASONS GIVEN BY THE ASSESSING OFFICER ARE NOT ADEQUATE AND SUFFICIENT TO REJECT THE EXISTENCE OF THE APPELLANT FIRM. EVEN IF ONLY SHRI MOHD. YUSUF I S WORKING PARTNER THE EXISTENCE OF THE FIRM CANNOT BE DENIED DUE TO THAT REASON. PARTICULARLY IN VIEW OF THE FACT THAT THE FIRM HAD BEEN FILING REGULAR RETU RN OF INCOME. IF IT IS IMPORTANT TO, NOTE THAT ANAND TRANSPORT COMPANYS APPEAL AGAINST PENALTY ORDER U/S 271(1) FOR ASSESSMENT YEAR 2004-05 IS PENDING DISPOSAL IN THIS OFFICE. THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH HAS PASSED ORDER ON 31.3.2011 IN ANAND TRANSPORT COMPANYS APPEAL FOR ASSESSMENT YEAR 2004-05. THE DEPARTMENT HAS FILED APPEAL AGAINST THE I.T.A.T.S ORDER WHICH IS PENDING DISPOSAL. THESE FACTS CLEARLY SHOW THAT ANAND TRANSPORT COMPANY IS A PARTNERSHIP FIRM WHICH EXIST ON INCOME TAX RECORD TILL DATE. IN VIEW OF THIS THE ADDITIONS CONFIRMED IN -: 25: - 25 THIS ORDER ARE CONFIRMED ON SUBSTANTIVE BASIS IN HANDS OF THE FIRM. 31. SHRI H. P. VERMA AND SHRI N. D. PATWA, LD. AUTHORIZED REPRESENTATIVES APPEARED ON BEHALF OF TH E ASSESSEE AND CONTENDED AS UNDER :- THAT THE STATUS IN WHICH THE RETURN WAS FILED IS F IRM WHEREAS THE ASSESSMENTS HAVE BEEN MADE TAKING THE STATUS AS INDIVIDUAL. THAT NEITHER ANY SEARCH U/S 132 WAS CONDUCTED AT ASSESSEES PLACE NOR ANY DOCUMENT BELONGING TO THE ASSESSEE WAS FOUND IN ANY OTHER SEARCH. THE ASSESSEE FILED RETURNS FOR THE THREE YEARS IN T HE STATUS OF 'FIRM'. PARTNERSHIP DEED WAS FILED FOR TH E PERIOD BEGINNING 01-04-2001. THE FIRM WAS DISSOLVED ON 01- 04- 2004. DEED OF DISSOLUTION WAS ALSO FILED BEFORE THE ID. AO. THE CONCERN WAS THEREAFTER TAKEN OVER OF MOHD. YUSUF, INDIVIDUAL. THE AUDITED ACCOUNTS SHOWED COMPUTATION OF PARTNERS' INCOMES AFTER ALLOWING INT EREST ON THEIR RESPECTIVE CAPITAL AND THE SALARY. THE LD. AO -: 26: - 26 ASSESSED THE INCOME IN THE STATUS OF 'INDIVIDUAL' W HEN THERE WAS NO PROCEEDING PENDING AGAINST INDIVIDUAL. AS A MATTER OF FACT, THERE WAS NO INDIVIDUAL ON THE NA ME OF ANAND TRANSPORT COMPANY AT JUMERATI JAWAHAR CHOWK, BHOPAL. THIS ASPECT OF MAKING THE ASSESSMENT IN THE STATUS OF INDIVIDUAL IS DISCUSSED BY THE ID. AO ON PAGE 4 LAS T PARA OF THE ASSESSMENT ORDER FOR AY 2002-03 AS FOLLOWS: 'SINCE THE ASSESSEE IS NOT ABLE TO PRODUCE ANY DETAILS ABOUT PARTNERS OF THE FIRM EXCEPT MOHD. YOUSUF. MOHD. YOUSUF IS INDIVIDUALLY ASSESSED FOR AY 2002-03 TO 2007-08. THEREFORE IT SEEMS THAT ONLY WORKING PERSON IN THE ASSESSEE FIRM IS MOHD. YOUSUF. THEREFORE, THE ABOVE ADDITION IS PROTECTIVELY MADE HERE AND SUBSTANTIVELY IN THE HANDS OF MOHD. YOUSUF FOR THE RELEVANT YEAR.' ASSESSMENT WAS MADE IN THE STATUS OF INDIVIDUAL. IN THE SUBSEQUENT YEARS, WITHOUT ANY -: 27: - 27 DISCUSSION, THE SAME STATUS OF INDIVIDUAL HAS BEEN TAXED. THE ASSESSMENTS HAVE BEEN MADE WITH THE PRIOR APPROVAL OF THE ADDITIONAL CIT RANGE 3, BHOPAL. IT IS SUBMITTED THAT THE ASSESSMENTS MADE IN THE STATUS OF 'INDIVIDUAL' AGAINST RETURNS FILED BY FIRM ARE ILLEGAL AND NULLITY, LIABLE TO BE QUASHED. 32. IT WAS FURTHER ARGUED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE ASSESSMENT MADE IN THE HAND S OF INDIVIDUAL WAS NULLITY. AS PER LD. AUTHORIZED REPRE SENTATIVE, IF NOTICE IS ISSUED U/S 148 TO AN INDIVIDUAL AND RETUR N IS FILED IN THE STATUS OF HUF, THE RETURN OF HUF IS TO BE REGUL ARIZED BY ISSUED OF NOTICE U/S 148 TO THE HUF. IN OTHER WORDS , IF RETURN IS FILED IN THE STATUS OF A FIRM AND IF THE ASSESSM ENT IS MADE IN THE STATUS OF AN INDIVIDUAL, THE ASSESSMENT MADE IS A NULLITY. THIS IS THE PRINCIPLE LAID DOWN BY THE SUP REME COURT IN CIT V. K. ADHINARAYAN MURTY 65 ITR 607. IN THE S CHEME OF THE INCOME TAX, 'FIRM' & 'INDIVIDUAL' ARE TO BE TRE ATED AS -: 28: - 28 SEPARATE UNITS OF ASSESSMENT AND THEREFORE THE ASSE SSMENT IN THE STATUS OF INDIVIDUAL IS ULTRA VIRAS AND WITHOUT JURISDICTION. ALSO CIT V. ROHTAS 212 CTR 495 (P&H). PN SASI KUMAR & OTHERS. 170 ITR 80 (KER). RAVINDRA NARAYAN 94 ITR 612 (DEL). IT DISCUSSED REASSESSMENT NOTICE TO INDIVIDUAL. ASSESSED HUF. NO T VALID. MOHD. HANIF 27 ITR 447 (ALL.) MAHAVIR PRASAD PODDAR 102 ITR 478 (CAL.) AND 27 ITR 447 (ALL) AND RADHELAL BALMUKUND 10 ITR 131 (ALL) DECISIONS WERE RENDERED PRIOR TO CIT V. ADHINARAYAN MURTY 65 ITR 607 (SC). CIT V. RAMDAS DEVKINANDAN PRASAD 139 ITR 457 (ALL). IT DISCUSSED: CIT V. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 82 ITR 821 (SC). CIT V. ISHWAR SINGH & SONS. 131 ITR 480 (ALL). CIT V. BIBUTI BHUSAN MALLIK 165 ITR 107 (CAL.). CIT V. SOBHAGMAL MISHRILAL SEMLAVAD.- 2 23 ITR 554 (MP). -: 29: - 29 RETURN WAS FILED AS HUF. ASSESSMENT WAS MADE IN THE STATUS OF INDIVIDUAL WITHOUT PROPER AND RELEVANT NO TICE TO INDIVIDUAL. ASSESSMENT WAS NOT VALID. ALSO REFERRED : CWT V. J.K. SHRIVASTAVA & SONS 142 ITR 183 (ALL). CIT V. ASSOCIATED CEMENT & RUBBER AGENCY 147 ITR 77 6 (BOM). 33. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. WE HAD ALSO DELIBERATED ON THE CASE LAWS C ITED BY THE LD. AUTHORIZED REPRESENTATIVE WITH REFERENCE TO T HE FACTUAL MATRIX OF THE CASE. FROM THE RECORD, WE FOUND THAT THE ASSESSEE M/S. ANAND TRANSPORT COMPANY IS A PARTNERS HIP FIRM WHICH EXISTED IN THE INCOME TAX RECORDS. THIS FIRM WAS REGISTERED WITH THE REGISTRAR OF FIRM ON 1.4.2001 A ND HAS REGULARLY FILED RETURN OF ITS INCOME FOR THE ASSESS MENT YEARS 2002-03 TO 2005-06. BECAUSE OF THE FACT THAT THE A SSESSEE WAS UNABLE TO PRODUCE DETAILS ABOUT THE PARTNERS OF THE FIRM EXCEPT SHRI MOHD. YUSUF, THE ASSESSING OFFICER ASSE SSED THE ENTIRE INCOME OF THE FIRM IN THE HANDS OF MOHD YUSU F, IN HIS INDIVIDUAL CAPACITY. AS PER OUR CONSIDERED VIEW, ME RELY BECAUSE MOHD. YUSUF WAS WORKING PARTNER, THE EXISTE NCE OF THE FIRM CANNOT BE DENIED, MORE PARTICULARLY, WHEN -: 30: - 30 DEPARTMENT ITSELF HAS LEVIED PENALTY ON THE SAID A SSESSEE FIRM FOR THE ASSESSMENT YEAR 2004-05 FOR WHICH ASSESSEE WAS IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL PASSED ORDER ON 31.3.2011. THE LD. CIT(A) HAS ALSO OBSERVED THAT DE PARTMENT HAS FILED APPEAL AGAINST THE ORDER OF I.T.A.T., WHI CH IS PENDING DISPOSAL. IN VIEW OF THESE FACTS, THE LD. CIT(A) HE LD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING FI RMS INCOME ON SUBSTANTIVE BASIS IN THE CASE OF MOHD YUSUF AND ON PROTECTIVE BASIS IN THE HANDS OF ASSESSEE FIRM. ACC ORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO ASSESS THE INCOME IN THE HANDS OF ASSESSEE FIRM ON SUBSTANTIVE BASIS. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 34. ADDITION ON ACCOUNT OF CREDITORS AMOUNTING TO RS. 9 4,190/- IN THE ASSESSMENT YEAR 2002-03, RS. 76,850/- IN THE AS SESSMENT YEAR 2004-05 WAS EXPLAINED OUT OF THE FOLLOWING CREDITOR S :- NO. AY 2003-04 AY 2004-05 - I 1. 1. VIJAY RATHI PB 78 17,840 KAMAL BHAI PB 71 18,630 I 2. ABBAS KHAN PB 67 18,940 RAJA MIYA PB 60 19,980 3. HARIJESH MUTHA PB 72 19,420 MOHD. KHALID PB 51 19,250 ---,-- 4 . MUNNAWAR BHAI PB 70 18,520 SHAFIQUE PB 7 6 18,990 . -- 5 . DULARE BHAI PB 73 19,450 . TOTAL RS. 94,190 TOTAL RS. 76,850 THEIR AFFIDAVITS ARE FILED LATE AS DUE TO SHORT TIM E THESE COULD -: 31: - 31 NOT BE OBTAINED BEFORE THE ID. AO. THESE WERE PRODU CED BEFORE THE ID. CIT (A). TRUCKS WERE USED BY THE ASSESSEE A ND THE PAYMENTS RELATE TO THE HIRE CHARGES. REFERENCE PB 5 WS TO ID. CIT (A) FOR 3 YEARS. ASSESSMENTS FOR BOTH THE YEARS WERE MADE BY THE ID. AO. ASST. YEAR 2003-04 U/S 143 (3). COPY ENCLOSED.P.B.1 57-158 ASST. YEAR 2004-05. DECIDED BY THE HON'BLE ITAT. SE T-ASIDE. P.B.167-171 EARLIER ORDER CIT(A) 4-5, P. B. 177-178 IN BOTH THE ASSESSMENTS, NO ADDITION WAS MADE ON TH IS COUNT. NOTHING INCRIMINATING WAS FOUND FOR THESE YEARS. 35. IN VIEW OF THE REASONING GIVEN IN RESPECT OF ADDITI ON MADE IN THE ASSESSMENT YEAR 2002-03 AT PARA 23 HERE IN- ABOVE, THE MATTER IS RESTORED BACK TO THE FILE OF A SSESSING OFFICER FOR DECIDING AFRESH, KEEPING IN VIEW THE OB SERVATION MADE BY US HEREINABOVE. WE DIRECT ACCORDINGLY. 36. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AR E ALLOWED IN PART FOR STATISTICAL PURPOSES, IN TERMS INDICATED HEREINABOVE. -: 32: - 32 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH AUGUST, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :29 TH AUGUST, 2013. CPU* 2327288