M/s Kundan Castings Pvt. Ltd., Kanpur V. Deputy Commissioner of Income Tax-CC-II, Kanpur

ITSSA 630/LKW/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5556 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHA KALA CHANDA
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained expenditure; Business income; Search and seizure; Document seized; Principle of natural justice; Opportunity of cross examination; Deemed to accrue or arise in india; Additional evidence; Question of law; Accommodation entries; Assessment record; Tax effect; Documents seized; Set aside
• Section: 69C; 143(3); 142(1); 153A; 143(1); 201; 143(2); 48; 13; 153; 22; 68; 6; 132; 10

Judgement Text

PAGE 1 OF 39 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW [THROUGH VIRTUAL HEARING] BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER IT(SS)A. NO.630 & 631/LKW/2019 ASST. YRS:2012-13 & 14-15 M/S KUNDAN CASTINGS (P.) LTD., 122/235 PLOT NO. 17, FAZALGANJ, KANPUR. PAN:AAACK5601N DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) IT(SS)A. NO.633 & 634/LKW/2019 ASSESSMENT YEAR:2012-13 & 14-15 M/S SHREE RADHEY RADHEY ISPAT (P.) LTD., 122/235 PLOT NO. 17, FAZALGANJ, KANPUR. PAN:AACCR7807B DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) IT(SS)A. NO.637 & 638/LKW/2019 ASSESSMENT YEAR:2012-13 & 14-15 M/S SIGMA CASTINGS LTD., 122/235 PLOT NO. 17, FAZALGANJ, KANPUR. PAN:AAGCS8962C DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) PAGE 2 OF 39 IT(SS)A. NO.643/LKW/2019 ASSESSMENT YEAR:2017-18 M/S PARAS CASTING & ALLOYS PVT. LTD. 122/235, PLOT NO. 17, FAZALGANJ, KANPUR. PAN:AACCP9180H DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) IT(SS)A. NO.678/LKW/2019 ASSESSMENT YEAR:2017-18 M/S QUALITY INDIA PVT. LTD., 133/1, JUHI GAUSHALA, KANPUR. PAN:AAACC5875C DY.C.I.T., CENTRAL CIRCLE-II, KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KUMAR, C.A. SHRI SUDHINDRA KUMAR JAIN, C.A. SMT. JASLEEN SETHI, C.A. RESPONDENT BY: SMT. ABHA KALA CHANDA, CIT (DR) DATE OF HEARING: 04 01 2021 DATE OF PRONOUNCEMENT: 01 02 2021 O R D E R PER BENCH: THESE EIGHT APPEALS HAVE BEEN FILED BY DIFFERENT AS SESSEES BELONGING TO SAME GROUP FOR DIFFERENT ASSESSMENT YE ARS AGAINST SEPARATE ORDERS OF LEARNED CIT(A), THE DETAIL OF WHICH IS GIV EN BELOW: I.T.A. NO. DATE OF ORDER OF LEARNED CIT(A) 633 & 634/LKW/2019 22/11/2019 630/LKW/2019 22/11/2019 PAGE 3 OF 39 631/LKW/2019 14/10/2019 637/LKW/2019 22/10/2019 638/LKW/2019 14/10/2019 641/LKW/2019 16/10/2019 643/LKW/2019 16/10/2019 2. ALL THESE APPEALS INVOLVE SIMILAR ISSUES AND THE SE WERE HEARD TOGETHER THEREFORE, FOR THE SAKE OF CONVENIENCE A C OMMON AND CONSOLIDATED ORDER IS BEING PASSED. THE GROUNDS OF APPEAL TAKEN BY VARIOUS ASSESSEES IN THESE APPEALS RELATE BOTH ON M ERITS AS WELL AS ON LEGAL ISSUES. HOWEVER, AT THE TIME OF HEARING, LEAR NED COUNSEL FOR THE ASSESSEE ARGUED GROUNDS ONLY ON LEGAL ISSUES, WHICH , IN VARIOUS APPEALS, ARE REPRODUCED AS UNDER: I.T.A. NO.630/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.1,00,00,000/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.8,00,000/- AND ALLEGED SHARE PREMIU M AMOUNTING TO RS.92,00,000/-, WITHOUT APPRECIATING TH AT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.2,50,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF PAGE 4 OF 39 THE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-A B-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. 6. THAT THE LD. CIT(A)-4, KANPUR HAS ERRED IN LAW AN D ON FACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE LD. AO AND IGNORING THE FACT THAT THE LD. AO HAS NEITHE R CONFRONTED ANY INCRIMINATING MATERIAL/STATEMENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSONS OF THE RICH GROUP, WHOSE STATEMENT(S)WERE RELIED UPON BY THE LD. A0,THUS, THE INFERENCES DRAWN WERE ARBITRARY, UNILATE RAL AND ARE ALSO ILLEGAL & UNSUSTAINABLE IN LAW AND ON FACTS . I.T.A. NO.631/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.1,00,00,000/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.40,00,000/- AND ALLEGED SHARE PREMI UM AMOUNTING TO RS.60,00,000/-, WITHOUT APPRECIATING TH AT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.2,50,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUME NT(S)/ EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLAN T (SEARCHED PERSON) DURING THE COURSE OF SEARCH, THER EFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF T HE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-AB-INITIO , BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. PAGE 5 OF 39 6. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.633/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.2,00,00,000/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.20,00,000/- AND ALLEGED SHARE PREMI UM AMOUNTING TO RS.1,80,00,000/-, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.5,00,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUME NT(S)/ EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLAN T (SEARCHED PERSON) DURING THE COURSE OF SEARCH, THER EFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF T HE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-AB-INITIO , BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.3,17,70,338/-, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., PAGE 6 OF 39 UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.6,35,407/- MADE BY THE A.O ., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FROM WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. 8. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.634/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.1,99,99,980/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.44,44,440/- AND ALLEGED SHARE PREMI UM AMOUNTING TO RS.1,55,55,540/-, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT PAGE 7 OF 39 MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.5,00,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUME NT(S)/ EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLAN T (SEARCHED PERSON) DURING THE COURSE OF SEARCH, THER EFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF T HE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-AB-INITIO , BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.9,07,19,565/-, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.18,41,391/- MADE BY THE A. O., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FROM WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. PAGE 8 OF 39 8. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.637/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.1,50,00,000/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.15,00,000/- AND ALLEGED SHARE PREMI UM AMOUNTING TO RS.1,35,00,000/-, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.3,75,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUME NT(S)/ EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLAN T (SEARCHED PERSON) DURING THE COURSE OF SEARCH, THER EFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF T HE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-AB-INITIO , BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.8,91,44,006/-, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., PAGE 9 OF 39 UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.17,82,880/- MADE BY THE A. O., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FROM WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. 8. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.638/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-IV, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING T HE ADDITION OF RS.1,00,00,000/- MADE BY THE LD. AO U/S 68 OF THE INCOME TAX ACT,1961, ON ACCOUNT OF ALLEGED SHARE CA PITAL AMOUNTING TO RS.25,00,000/- AND ALLEGED SHARE PREMI UM AMOUNTING TO RS.75,00,000/-, WITHOUT APPRECIATING TH AT NO INCRIMINATING MATERIAL, DOCUMENT(S)/EVIDENCE WAS FOU ND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DUR ING THE COURSE OF SEARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT PAGE 10 OF 39 MADE U/S 153A OF THE INCOME TAX ACT, 1961 AND SECON DLY THE ADDITION FOR ALLEGED UNEXPLAINED SHARE CAPITAL ARE ILLEGAL, VOID- AB-INITIO, BAD IN LAW AND LIABLE TO BE QUASHED/DELET ED. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ADDITION OF RS.2,50,000/- MADE BY TH E LEARNED ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT,196 1 ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE @ 2.5%, I N RESPECT OF SHARE CAPITAL AND SHARE PREMIUM, WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL, DOCUME NT(S)/ EVIDENCE WAS FOUND FROM THE PREMISES OF THE APPELLAN T (SEARCHED PERSON) DURING THE COURSE OF SEARCH, THER EFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/S 153A OF T HE INCOME TAX ACT, 1961 AND SECONDLY THE ADDITION FOR ALLEGED UNEXPLAINED EXPENDITURE ARE ILLEGAL, VOID-AB-INITIO , BAD IN LAW AND LIABLE TO BE QUASHED/DELETED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.5,27,24,504/-, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.10,54,490/- MADE BY THE A. O., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FROM WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. PAGE 11 OF 39 8. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.643/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.2,66,951/-, AS UNEXPLAINED CASH CREDIT BY THE LD . A.O., UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.5,339/- MADE BY THE A.O., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FRO M WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. 6. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E PAGE 12 OF 39 ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. I.T.A. NO.678/LKW/2019 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH AM OUNTING TO RS.8,44,477/-, AS UNEXPLAINED CASH CREDIT BY THE LD . A.O., UNDER SECTION 68 R/W SECTION 115BBE OF THE INCOME TA X ACT, 1961, WITHOUT APPRECIATING THAT NO INCRIMINATING MAT ERIAL, DOCUMENT(S)/EVIDENCE, WAS FOUND FROM THE PREMISES OF THE APPELLANT (SEARCHED PERSON) DURING THE COURSE OF SE ARCH, THEREFORE, FIRSTLY, THE IMPUGNED ASSESSMENT MADE U/ S 153A OF THE INCOME TAX ACT, 1961 AND SECONDLY THE TREATMENT OF PROFIT IN WHOLESALE TRADING IN CLOTH, AS UNEXPLAINED CASH CREDIT BY THE LD. A.O., ARE ILLEGAL, VOID-AB-INITIO, BAD I N LAW AND LIABLE TO BE QUASHED/DELETED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-4, KANPUR, HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION OF RS.16,890/- MADE BY THE A.O., BEING THE ALLEGED COMMISSION PAID @ 2% ON THE GROSS PROFIT FRO M WHOLESALE TRADING OF CLOTH TREATED AS UNEXPLAINED EX PENDITURE UNDER SECTION 69C OF THE IT. ACT, 1961, MERELY ON S URMISES AND CONJECTURES, WITHOUT APPRECIATING THAT NO INCRIM INATING DOCUMENT(S)/EVIDENCE WAS FOUND IN THE COURSE OF SEAR CH RELATING TO THE ABOVE ADDITION IN THE ASSESSMENT PA SSED U/S 153A OF THE INCOME TAX ACT,1961. 6. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE IMPUGNED ADDITIONS MADE BY THE ASSES SING OFFICER AND IGNORING THE FACT THAT THE ASSESSING OF FICER HAS NEITHER CONFRONTED ANY INCRIMINATING MATERIAL/STATE MENT NOR PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSON S OF THE RICH GROUP, WHOSE STATEMENT(S) WERE RELIED UPON BY TH E ASSESSING OFFICER THUS, THE INFERENCE DRAWN WERE ARB ITRARY, UNILATERAL AND ARE ALSO ILLEGAL AND UNSUSTAINABLE I N LAW AND ON FACTS. PAGE 13 OF 39 3. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE APPEALS IN ALL THESE YEARS ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF ASSESSEES ITSE LF VIDE ORDER DATED 16/12/2020. LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT HON'BLE TRIBUNAL HAD DELETED THE ADDITIONS IN SOME YEARS AS THE ADDITIONS WERE MADE THEREIN WITHOUT HAVING FOUND ANY INCRIMINATING MATERIAL AS THE ASSESSMENTS IN THOSE CASES STOOD COMPLETED. IT WAS SUBMITTED THAT IN SOME OF THE YEARS THE HON'BLE TRIBUNAL ALLOWED APPEA LS OF THE ASSESSEES ON ANOTHER GROUND OF NOT CONFRONTING THE ADVERSE MA TERIAL TO THE ASSESSEES. THEREFORE IT WAS PRAYED THAT THE APPEALS OF THE ASSESSEES MAY BE ALLOWED FOLLOWING THE ABOVE TRIBUNAL ORDER. 4. LEARNED D. R. FAIRLY AGREED THAT THE LEGAL ISSUE S INVOLVED IN THESE APPEALS ARE COVERED IN FAVOUR OF THE ASSESSEE BY TH E ABOVE SAID TRIBUNAL ORDER. HOWEVER, SHE PLACED RELIANCE ON THE ORDERS O F THE AUTHORITIES BELOW AND ALSO RELIED ON THE WRITTEN SUBMISSIONS ALREADY F ILED AND TAKEN NOTE OF BY THE TRIBUNAL IN THE ABOVE SAID TRIBUNAL ORDER. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEARCH & SEIZURE OPERATION WAS CARRIED OUT ON THE GROUP OF ASSESSEES ON 23/08/2016 AND IN THE EARLIER APPEALS WHICH WERE DECIDED BY THE TRIBUNAL VIDE ORDER DATED 1 6/12/2020, THE TRIBUNAL HAD MADE A FINDING OF FACT THAT IN ASSESSM ENT YEAR 2013-14, THE ADDITIONS COULD NOT HAVE BEEN MADE AS ADDITIONS WERE NOT MADE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMENTS IN THOSE YEARS HAD ALREADY STOOD COMPLETED. IN THE PR ESENT CASE, THE YEARS INVOLVED ARE ASSESSMENT YEARS 2012-13 AND 2014-15. IN RESPECT OF I.T.A. NO.633 & 634 FOR ASSESSMENT YEARS 2012-13 AND 2014- 15, THE ASSESSMENTS STOOD COMPLETED ON THE DATE OF SEARCH I .E. ON 23/08/2016 AS PAGE 14 OF 39 FOR ASSESSMENT YEAR 2012-13 THE RETURN WAS FILED ON 29/09/2012 WHICH IS APPARENT FROM PAGE NO. 48 OF THE PAPER BOOK AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2013 AND INTIMAT ION U/S 143(1) WAS ISSUED VIDE ORDER DATED 22/05/2013, A COPY OF WHICH IS PLACED IN PAPER BOOK PAGES 51 TO 69. SIMILARLY, FOR ASSESSMENT YEA R 2014-15 IN I.T.A. NO.634/LKW/2019, THE RETURN WAS FILED ON 26/11/2014 WHICH IS APPARENT FROM PAGE NO. 38 OF THE PAPER BOOK AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2015 AND INTIMATION U/S 143 (1) WAS ISSUED VIDE ORDER DATED 04/08/2015, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 41 TO 61. SIMILARLY, IN RESPECT OF APPEALS IN I.T.A . NO.637 & 638, THE RETURN FOR ASSESSMENT YEAR 2012-13 WAS FILED ON 30/09/2012 WHICH IS APPARENT FROM PAGE NO. 18 OF THE PAPER BOOK AND THEREFORE, T HE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2013 WHICH IS BEF ORE THE DATE OF SEARCH. SIMILARLY, FOR ASSESSMENT YEAR 2014-15, TH E RETURN WAS FILED ON 30/11/2014 WHICH IS APPARENT FROM PAGE NO. 39 OF THE PAPER BOOK AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/0 9/2015 AND INTIMATION U/S 143(1) WAS ISSUED VIDE ORDER DATED 19/12/2014, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 42 TO 47. SIMILARLY, IN RESPECT OF APPEALS IN I.T.A. NO.630 & 631, THE RETURN FOR ASSESSMENT YEAR 2012-13 WAS FILED ON 30/09/2012 WHICH IS APPARENT FROM PAGE NO. 18 OF THE PAPER BOOK AND TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/0 9/2013 WHICH IS BEFORE THE DATE OF SEARCH I.E. 23/08/2016. SIMILARLY, FOR ASSESSMENT YEAR 2014-15 THE RETURN WAS FILED ON 30/11/2014 WHICH IS APPARENT FROM PAGE NO. 37 OF THE PAPER BOOK AND THE DATE FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2015 AND INTIMATION U/S 143(1) WAS ISSUED VIDE ORDER DATED 29/12/2014, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 40 TO 48. THEREFORE, FOR ASSESSMENT YEARS 2012-13 & 2014-15 T HE ADDITIONS ARE NOT PAGE 15 OF 39 SUSTAINABLE AS THE ADDITIONS HAVE NOT BEEN MADE ON THE BASIS OF ANY SEIZED MATERIAL WHICH IS APPARENT FROM THE ASSESSMEN T ORDERS ITSELF. 6. WE HAVE ALREADY HELD IN OUR ORDER DATED 16/12/20 20 IN THE CASE OF THE PRESENT ASSESSEES ITSELF IN OTHER ASSESSMENT YE ARS THAT ADDITIONS WERE NOT MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL AS THE ASSESSING OFFICER, WHILE MAKING THE ADDITIONS, HAD NOT RELIED ON ANY SEIZED MATERIAL AND HAD RELIED ON THE DOCUMENT MARKED AS BK-2 WHICH WAS SEIZED BY THE SEARCH PARTY FROM SOME OTHER GROUP AND THERE THE SE ARCH TOOK PLACE ALMOST ONE YEAR BEFORE THE DATE OF SEARCH ON THE PR ESENT ASSESSEES. THE FINDINGS OF THE TRIBUNAL ARE CONTAINED IN PARA 5 OF THE ORDER, WHICH FOR THE SAME OF COMPLETENESS, ARE REPRODUCED BELOW: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE FI RST ARGUMENT OF LEARNED COUNSEL FOR THE ASSESSEE WAS THAT IN CASE OF COMPLETED ASSESSMENTS, THE ADDITION CANNOT BE MADE IF THERE IS NO INCRIMINATING MATERIAL. IN THIS REGARD LEARN ED COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT IN THE YEAR 201 3-14 AND 2015-16 THE ASSESSMENTS STOOD COMPLETED AND THERE WA S NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IN THIS RESPECT THE BENCH HAD ASKED BOTH THE PARTIES TO FURNISH THE MATERIAL WHICH WAS IMPOUNDED DURING THE SEARCH AND WHICH BOTH THE PARTIES HAD FILED WITH THE BENCH WHICH WE HAVE EXAMINE D AND HAVE COMPARED WITH THE MATERIAL USED BY ASSESSING OF FICER IN ASSESSMENT ORDER. WE FOUND THAT NONE OF THE MATERI AL SEIZED DURING THE SEARCH WAS USED BY THE ASSESSING OFFICER FOR MAKING ADDITION AND INSTEAD HAD RELIED ON A DOCUMEN T MARKED AS BK-2, WHICH WAS SEIZED DURING A SEARCH OPER ATION ON A DIFFERENT GROUP OF COMPANY AND THAT TOO ON 28/ 04/2015 THAT IS MORE THAN ONE YEAR BEFORE THE DATE OF SEARC H ON ASSESSEES. THIS FACT IS FURTHER STRENGTHENED FROM THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER, AT PAGE 8, HAS OBSERVED AS UNDER: PAGE 16 OF 39 IN THIS CONTEXT, IT IS NOTEWORTHY THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961 CONDUCTED UPON THE COMPANIES OF SHMSHWAT AGARWAL ON 28.04.2015 BY THE INVESTIGATION WING, KANPUR. THE INCRIMINATING DOCU MENTS WHICH WERE FOUND AND SEIZED ARE THE PREMISES ALSO INC LUDE A DIARY IDENTIFIED AS BK-2, CONTAINING LEDGERS OF DIF FERENT PARTIES. ON GOING THROUGH PAGES OF THESE LEDGERS, IT WAS FOUN D THAT THE COMPANIES OF SRI SHASHWAT AGARWAL ARE PAPER COMPA NIES AND ARE ENGAGED IN PROVIDING THE ACCOMMODATION ENTR IES OF BOGUS LTCG, UNSECURED LOAN ETC, TO VARIOUS PARTIES BY ACCEPTING UNDISCLOSED CASH FROM BENEFICIARIES. NAME OF SUCH BENEFICIARIES, DATE-WISE RECEIPT OF CASH AND ISSUANC E OF CHEQUES FROM AND TO THEM, IS RECORDED IN THIS DIARY VERY VIVIDLY. THE NAME OF SRI NAVIN JAIN AND HIS FAMILY MEMBERS SUCH AS HIS FATHER SRI NARESH KIUNAR JAIN, NARESH K UMAR JAIN HUF, HIS MOTHER SMT. SHRIMATI JAIN AND HIS WIFE NEET U JAIN ALSO FIGURE IN THIS DIARY. SHRI NAVIN JAIN AND HIS AFOREMENTIONED FAMILY MEMBERS HAVE TAKEN ACCOMMODAT ION ENTRIES OF TAX EXEMPT LONG TERM CAPITAL GAIN BY THE WAY OF PRE-ARRANGED AND MANIPULATIVE TRADING IN THE SHARES CITYON SYSTEMS (INDIA) LIMITED. THIS SALE WAS STAGE MANAGE D BY SH. SHASHWAT AGARWAL AND HIS BROTHERS AS ALL THE SHARES WERE PURCHASED BY THE COMPANIES CONTROLLED BY SH. SHASHWA T AGARWAL. 5.1 THE ABOVE OBSERVATIONS, NOTED BY THE ASSESSING OFFICER, CLEARLY DEMONSTRATE THAT A DIARY IDENTIFIED AS BK-2 WAS IMPOUNDED DURING SEARCH & SEIZURE OPERATION ON 28/0 4/2015 IN THE CASE OF SEARCH ON THE COMPANIES BELONGING TO SHRI SHASHWAT AGARWAL WHEREIN THE NAME OF SHRI NAVIN JAIN AND HIS FAMILY MEMBERS WERE MENTIONED. THE ASSESSING OF FICER NOWHERE NOTED THAT THE NAMES OF THE ASSESSEES WAS ALS O MENTIONED IN SUCH DIARY. MOREOVER, FROM THE FINDIN GS OF THE ASSESSING OFFICER, WE FIND THAT THE COMPANIES OF SHR I SHASHWAT AGARWAL WERE ENGAGED IN PROVIDING ACCOMMODAT ION ENTRIES OF BOGUS LONG TERM CAPITAL GAIN, UNSECURED LOANS ETC. TO VARIOUS PARTIES AND THERE IS NO MENTION OF BOGUS TRANSACTIONS OF CLOTH. MOREOVER, THE ABOVE FINDINGS CLEARLY INDICATE THAT THE ACCOMMODATION ENTRIES OF LONG TER M CAPITAL GAIN AND UNSECURED LOANS WERE OBTAINED BY THE INDIVI DUALS MENTIONED IN THE ASSESSMENT ORDER AND THERE IS NO M ENTION THAT THE ASSESSEES HAD TAKEN ANY ENTRY OF LONG TERM CAPITAL PAGE 17 OF 39 GAIN OR UNSECURED LOANS FROM THE COMPANIES OF SHRI SHASHWAT AGARWAL. THIS FACT IS FURTHER CORROBORATED FROM THE FACT THAT THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEES DID NOT MAKE ANY ADDITION ON ACCOUNT OF LONG TERM CAPITAL G AIN OR UNSECURED LOANS BUT HE MADE THE ADDITIONS BY HOLDIN G THE SALE AND PURCHASE OF CLOTH WHICH WAS PURCHASED FROM R ICH GROUP OF COMPANIES TO BE BOGUS. ALL THESE FACTS DE MONSTRATE THAT THE ASSESSING OFFICER HAD NOT MADE THE ADDITIO N ON THE BASIS OF ANY INCRIMINATING DOCUMENT BUT HAD MADE TH E ADDITION ON ACCOUNT OF BOGUS SALE AND PURCHASE OF C LOTH FOR WHICH NO DOCUMENT WAS FOUND DURING THE COURSE OF SEAR CH. EVEN OTHERWISE, THE DOCUMENTS RELIED ON BY THE ASSES SING OFFICER WERE FOUND AT THE PREMISES OF THE COMPANIES OF SHRI SHASHWAT AGARWAL WHEREIN THE SEARCH WAS CARRIED OUT ON 28/04/2015 AND THERE TOO THE INCRIMINATING MATERIAL , AS MENTIONED IN THE ASSESSMENT ORDER, WAS A DIARY IDENT IFIED AS BK-2 WHEREIN THE NAMES OF SOME PROMOTERS/DIRECTORS OF THE ASSESSEES WERE MENTIONED. NOWHERE THEREIN THE NAMES OF THE ASSESSEES HAVE BEEN MENTIONED. LEARNED COUNSEL FOR THE ASSESSEE HAD RELIED ON A NUMBER OF CASE LAWS FOR THE PROPOSITION THAT IN CASE NO INCRIMINATING MATERIAL IS FOUND, THE ADDITIONS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS. PARTICULAR RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CH AWLA (SUPRA) WHEREIN THE SLP FILED BY THE DEPARTMENT WAS DISMISSED BY HON'BLE SUPREME COURT. LEARNED COUNSE L FOR THE ASSESSEE HAD ALSO RELIED ON CASE LAW OF PR. CIT VS. MEETA GUTGUTIA (SUPRA), THE SLP OF WHICH HAS ALSO BEEN DIS MISSED BY HON'BLE SUPREME COURT. THOUGH THE SLP IN THE CASE OF KABUL CHAWLA WAS DISMISSED DUE TO LOW TAX EFFECT BUT THE SLP IN THE CASE OF MEETA GUTGUTIA WAS NOT DISMISSED DUE TO LOW T AX EFFECT BUT WAS DISMISSED ON MERITS. FOR THE SAKE OF COMPLETENESS, THE JUDGMENT OF HON'BLE DELHI HIGH CO URT IN THE CASE OF MEETA GUTGUTIA IS REPRODUCED BELOW: A SEARCH AND SEIZURE UNDER SECTION 132 URNS CONDUC TED IN THE PREMISES OF THE FNP GROUP WHICH COMPRISED OF VARIOUS COMPANIES, PARTNERSHIPS AND PROPRIETORSHIP CONCERNS. THE STATEMENT OF AN EMPLOYEE PG WAS RECORDED ON OATH UNDER SECTION 133A. THE ASSESSEE WA S A DIRECTOR/PARTNER/SHAREHOLDER IN THE GROUP OF COMPANIES/CONCERNS. SHE WAS THE PROPRIETOR OF THE PAGE 18 OF 39 CONCERN FNP. ON THE BASIS OF DOCUMENTS RECOVERED DURING THE SEARCH OPERATION, A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE. THEREAFTER, A NOTIC E AND QUESTIONNAIRE UNDER SECTIONS 143(2) AND 142(1) WERE ALSO ISSUED. THE ASSESSING OFFICER PASSED SEPAR ATE ORDERS IN RESPECT OF THE ASSESSMENT YEARS 2000-01 T O 2003-04. FOR THE ASSESSMENT YEAR 2004-05, AS IN THE PRECEDING YEARS, THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF FRANCHISEE COMMISSIONS PAID TO VARIOUS PARTIES. THE ASSESSING OFFICER HELD THAT THE ADDRES SES OF THE FRANCHISEES WERE NOT REVEALED AND THAT THERE WERE DISCREPANCIES IN THE DETAILS OF THE ACCOUNTS OF THE FRANCHISEES FILED BY THE ASSESSEE. CONSEQUENTLY, TH E FRANCHISEE COMMISSION PAYMENTS CLAIMED BY THE ASSESSEE WERE ADDED BACK TO HER INCOME. FOR THE ASSESSMENT YEAR 2004-05, THE ASSESSING OFFICER ALSO MADE AN ADDITION ON ACCOUNT OF STOCK. THE ASSESSING OFFICER ESTIMATED THE UNDISCLOSED INCOME, ON ACCOUN T OF FRANCHISEE FEE, AT A CERTAIN PERCENTAGE FOR THE ASS ESS- MENT YEARS 2001-02 TO 2006-07. NO ADDITION WAS MADE FOR THE ASSESSMENT YEAR 2006-07, ALTHOUGH A DISCLOS URE WAS MADE. BEFORE THE COMMISSIONER (APPEALS), THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE UNDER RULE 46 A OF THE INCOME-TAX RULES, 1962, WHICH INCLUDED COPIES OF FRANCHISEE AGREEMENTS. A REJOINDER WAS FILED BY THE ASSESSEE. ON ANALYSIS OF THE ADDITIONAL EVIDENCE, T HE COMMISSIONER (APPEALS) HELD THAT THE ACCOUNTS OF TH E ASSESSEE HAD BEEN TAX AUDITED AND THAT NO ADVERSE REMARKS HAD BEEN MADE BY THE TAX AUDITORS. HE FURTH ER HELD THAT THE ASSESSING OFFICER HAD NOT REJECTED TH E BOOKS OF ACCOUNT OF THE ASSESSEE. ACCORDINGLY, HE H ELD THAT THE DISALLOWANCE OF THE FRANCHISEE COMMISSIONS PAID WERE UNSUSTAINABLE AND DELETED THE ADDITIONS MADE. HE DELETED THE ADDITIONS MADE ON ACCOUNT OF PAYMENT OF RENT, NON-REFUNDABLE SECURITY, INCOME FR OM SELF-CONTROLLED OUTLETS AND REDUCED THE ADDITION MA DE ON ACCOUNT OF CLOSING STOCK. HE ALSO DELETED THE ADDITIONS OF UNDISCLOSED INCOME, MADE ON ACCOUNT OF FRANCHISEE FEE, ACCEPTIN G THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO DISCLOSURE MADE FOR EARLIER YEARS, OR ANY EVIDENCE UNEARTHED DURING THE SEARCH BY THE DEPARTMENT THAT PAGE 19 OF 39 SUCH FRANCHISEE FEE INCOME WAS NOT DISCLOSED BY HER. BOTH THE DEPARTMENT AND THE ASSESSEE FILED APPEALS BEFORE THE APPELLATE TRIBUNAL. ACCEPTING THE CONTEN TION OF THE ASSESSEE THAT FOR THE ASSESSMENT YEARS 2000- 01 TO 2003-04, THERE WAS NO INCRIMINATING MATERIAL SEI ZED DURING THE COURSE OF SEARCH, AND THEREFORE, THE ASSESSMENT ORDERS IN RESPECT OF THOSE YEARS OUGHT T O BE QUASHED, THE APPELLATE TRIBUNAL HELD THAT THE ASSUMPTION OF JURISDICTION UNDER SECTION 153 A FOR THOSE ASSESSMENT YEARS WAS ILLEGAL. IN RESPECT OF THE ASSESSMENT YEAR 2004-05, THE APPELLATE TRIBUNAL HEL D THAT THE ADDITIONS MADE WERE BASED ON SEIZED DOCUMENTS AND, THEREFORE, THE ASSESSMENT UNDER SECTION 153A WAS VALID. IT DISMISSED THE APPEALS FIL ED BY THE DEPARTMENT IN RESPECT OF THE DELETIONS MADE BY THE COMMISSIONER (APPEALS) AND DISMISSED THE ASSESSEE'S APPEAL FOR NON-PROSECUTION. ON APPEALS: HELD, DISMISSING THE APPEALS, (I) THAT IT WAS ONLY I F DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE REOPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS WAS FOUND THAT TH E INVOCATION OF SECTION 153 A QUA EACH OF THE ASSESSM ENT YEAR WOULD BE JUSTIFIED. 5.2 THE ABOVE JUDGMENT OF HON'BLE DELHI HIGH COURT HAS BEEN UPHELD BY HON'BLE SUPREME COURT AS THE SLP FIL ED BY REVENUE HAS BEEN DISMISSED WHICH IS REPORTED AT 96 TAXMANN.COM 468. HON'BLE DELHI HIGH COURT IN ABOVE CASE HAS DISTINGUISHED THE CASE LAW OF DAYAWANTI GUPTA VS . CIT 390 ITR 496 (DEL) WHICH LEARNED D. R. HAD HEAVILY RE LIED. THE CASE LAW OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA 367 ITR 517, THOUGH SUPPORTS THE CONTENTIONS OF THE REVENUE BUT SINCE HON'BLE SUPREM E COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF MEETA GUTGUTIA THEREFORE, THE JUDGMENT OF JURISDICT IONAL HIGH COURT WILL NOT HELP THE REVENUE. THE CONTENTION OF THE REVENUE THAT SINCE THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KA BUL CHAWLA AND MEETA GUTGUTIA AS SLP IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION 235 TAXMAN 568 (SC) HAS BEEN ADMITTED IS ALSO OF NO HELP TO REVENUE. T HEREFORE, PAGE 20 OF 39 IN VIEW OF THE ABOVE CASE LAWS, WE HOLD THAT IN CASE O F COMPLETED ASSESSMENTS, THE ADDITION CAN BE MADE ONL Y ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH . WE HAVE ALREADY HELD THAT NO INCRIMINATING MATERIAL WAS FOUN D FROM THE PREMISES OF THE ASSESSEE THEREFORE, THE ADDITIO NS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS WHICH I N THIS CASE IS APPEAL FOR ASSESSMENT YEAR 2013-14 WHEREIN I N I.T.A. NO.510 THE ASSESSMENT ORDER WAS ALREADY PASSED U/S 1 43(3) ON 22/03/2016 WHICH IS BEFORE THE SEARCH DATE OF 23/ 08/2016, COPY OF ASSESSMENT ORDER IS PLACED AT PAGES 51 TO 5 4 OF THE PAPER BOOK. SIMILARLY IN I.T.A. NO. 515, THE ASSES SMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 23/03/2016, T HE COPY OF WHICH IS PLACED AT PAGES 54 TO 57 OF THE PAPER BO OK. SIMILARLY IN I.T.A. NO.517 RELATING TO ASSESSMENT Y EAR 2013- 14, THE ASSESSMENT ORDER U/S 143(3) DATED 30/03/201 6, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 52 TO 56. THEREFORE, THE ASSESSMENTS IN THESE CASES STOOD COM PLETED. LEARNED COUNSEL FOR THE ASSESSEE HAD THOUGH ARGUED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2015-16 ALSO STOOD COMPLETED BUT IN OUR OPINION THE APPEALS FOR ASSESS MENT YEAR 2015-16 CANNOT BE SAID TO BE COMPLETED AS TIME FOR ISSUE OF NOTICE U/S 143(2) WAS STILL AVAILABLE TO THE DEPART MENT WHICH WAS UPTO 30/09/2016 WHEREAS THE SEARCH TOOK PLACE ON 23/08/2016 WHICH MEANS THAT THERE WAS TIME AVAILABLE TO THE DEPARTMENT TO ISSUE NOTICE U/S 143(2) THEREFORE, TH E APPEALS FILED FOR ASSESSMENT YEAR 2015-16 CANNOT BE SAID TO HAVE COMPLETED. IN VIEW OF THE ABOVE DISCUSSION, GROUND NO. 2 & 7 OF THE APPEALS IN I.T.A. NO.510, 515 & 517 ARE ALLO WED. 7. IN VIEW OF THE ABOVE TRIBUNAL ORDERS, FIRST LEGAL ISSUE RAISED BY ASSESSEE VIDE GROUND NUMBERS 1 & 2 IN I.T.A. NO.630 AND 631, GROUND NUMBERS 1 TO 4 IN I.T.A. NO. 633, 634, 637 AND 638 ARE ALLOWED. SINCE WE HAVE ALLOWED THE ABOVE APPEALS ON GROUND NO. 1 &2, O THER GROUNDS OF APPEAL ARE NOT ADJUDICATED. IN VIEW OF THE ABOVE, THE APPEALS FILED BY THE ASSESSEE IN I.T.A. NO.630, 631, 633, 634, 637 AND 6 38 ARE PARTLY ALLOWED. 8. NOW COMING TO APPEALS IN I.T.A. NO.643 AND 678 FO R ASSESSMENT YEAR 2017-18, WE FIND THAT ASSESSMENTS IN THESE YEAR S WERE PENDING AS ON PAGE 21 OF 39 THE DATE OF SEARCH AND ADDITIONS COULD HAVE BEEN MA DE IN THESE YEARS EVEN WITHOUT HAVING FOUND ANY INCRIMINATING MATERIAL THEREFORE, GROUND NO. 1 & 2 IN THESE APPEALS ARE DISMISSED. 9. THE OTHER LEGAL GROUND TAKEN BY ASSESSEES IN THE SE APPEALS IS VIDE GROUND NO. 6. IN THIS GROUND THE ASSESSEE HAS STATE D THAT ADVERSE MATERIAL USED BY ASSESSING OFFICER WHILE MAKING ADDITIONS WAS NOT CONFRONTED TO ASSESSEES. IN THIS RESPECT WE FIND THAT ASSESSING O FFICER HAD MADE THE ADDITIONS BY HOLDING THE SALE AND PURCHASE OF CLOTH AS BOGUS WITHOUT CONFRONTING THE SAME TO THE ASSESSEES INSPITE OF TH E FACT THAT ASSESSEES HAD SPECIFICALLY REQUESTED THE ASSESSING OFFICER FO R OPPORTUNITY TO CROSS EXAMINE THE WITNESSES. THIS IS APPARENT FROM THE PAP ER BOOK PAGES 53 IN I.T.A. NO.643 WHERE IN REPLY TO SHOW CAUSE NOTICE THE ASSESSEE HAD SPECIFICALLY ASKED FOR THE CONFRONTATION OF ADVERSE MATERIAL. 10. FOR THE SAKE OF COMPLETENESS THE REPLY TO SHOW C AUSE NOTICE WHEREIN THE ASSESSEES HAD REQUESTED FOR CONFRONTATIO N IN I.T.A. NO.643, HAS BEEN MADE PART OF THIS ORDER WHICH IS REPRODUCED BELOW: KANPUR DATED:21.12.2018 TO THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IJ, KANPUR. SIR, RE: SHOW CAUSE NOTICE 12.12.2018 IN THE CASE OF M/S. PARAS CASTINGS AND ALLOYS PVT. LTD. IN CONNECTION WITH AS SESSMENT PROCEEDINGS UNDER SECTION 153A OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2017-18 EXPLANATION REGARDING WITH REFERENCE TO YOUR NOTICE REFERRED ABOVE, WE WI SH TO EXPLAIN AND SUBMIT AS UNDER: PAGE 22 OF 39 1) PRE-CONCEIVED INFERENCES: A SEARCH WAS CONDUCTED ON 23.08.2016 (CONCLUDING ON 25.08.2016) AND DESPITE ALMOST 27 MONTHS PASSED FROM THE SAID D ATE, NO ENQUIRY EXCEPT FROM SHRI ANKUR GUPTA 2-3 QUESTIONS WERE ASKED DURING THE COURSE OF SEARCH AT THE OFFICE OF M/S. R ADHEY RADHEY ISPAT PVT. LTD. GROUP, ABOUT THE CLOTH TRADING, NO MEANINGFUL ENQUIRY WAS DONE FROM ANY RESPONSIBLE PERSON OF THE ASSESSEE GROUP TILL NOW. HOWEVER, IN THE SHOW CAUSE NOTICE B ASED ON THIRD PARTY INFORMATION, THAT TO NEVER CONFRONTED TO THE ASSESSEE FOR REBUTTAL/EXPLANATION, PRE-CONCEIVED INFERENCES HAVE BEEN DRAWN RELATING TO THE CLOTH TRADING DONE BY THE ASSESSEE. 2) TWISTING OF FACTS: CERTAIN FACTS MENTIONED IN THE SHOW CAUSE NOTICE AR E NOT PART OF ASSESSMENT RECORD OF THE ASSESSEE OR M/S. RADHEY RA DHEY ISPAT PVT. LTD. GROUP OF CASES. FOR EXAMPLE CLOTH TRADING UP TO 30.06.2017 WAS NOT SUBJECTED TO ANY VAT/SALES TAX S TILL INFERENCE HAS BEEN DRAWN BY SAYING THAT NO INFORMATION COULD BE OBTAINED FROM SALES TAX DEPARTMENT. FURTHER, THE ASSESSEE GR OUP AS A WHOLE AND ASSESSEE IN PARTICULAR WAS DEALING IN WHO LESALE BUSINESS OF UNBRANDED CLOTH, WHICH HAS HIGH MARGIN, COMPARED TO BRANDED CLOTH TRADING. WHEREAS, IN THE SHOW CAUSE NOTICE, F IRSTLY ADVERSE INFERENCE HAS ALREADY BEEN DRAWN BY PRESUMING THAT THE ASSESSEE HAD NO RETAIL OUTLET, SHOP OR RETAILERS TO DEAL WIT H. SIMILARLY CERTAIN QUESTIONS RELATING TO BUSINESS ACTIVITIES WERE ASKE D FROM MANAGER (ACCOUNTS) MR. ANKUR GUPTA, WHO WAS NOT AT ALL CONC ERNED WITH SALES, PURCHASES OR MANAGEMENT OF INVENTORY ETC. OF THE CLOTH TRADING DONE BY THE ASSESSEE. ALL THESE ISSUES CLEA RLY SHOW THAT FACTS IN THE PRESENT SHOW CAUSE HAVE BEEN TWISTED T O SUIT YOUR CONVENIENCES, WHIMS AND FANCIES. OVERALL, MANAGEMEN T OF CLOTH TRADING ON WHOLESALE BASIS WAS DONE BY SHRI NAVIN J AIN, DIRECTOR. 3) DEPENDENCE ON SEARCH IN THE CASE OF RICH GROUP OF C OMPANIES: THE SHOW CAUSE NOTICE PRIMARILY RESTS ON/AROUND A S EARCH AND HIGH COURT PROCEEDINGS OF SHRI ASHISH AGARWAL AND S HRI SHASHWAT AGANVAL AND RICH GROUP OF COMPANIES. FIRSTLY, THEIR REFERENCE IN THE PRESENT PROCEEDINGS IS UNCALLED FOR AND SECO NDLY THE ORDERS, DOCUMENTS, OTHER INFORMATION RELIED UPON AN D MENTIONED IN THE SHOW NOTICE AND LIKELY TO BE USED AGAINST THE NOTICEE WERE NEVER CONFRONTED TO THE ASSESSEE I N ACCORDANCE WITH STANDARD OPERATING PROCEDURE FOLLOW ED UNDER THE INCOME TAX LAW, THEREFORE, ALL THIS IS NO N PAGE 23 OF 39 COGNIZABLE AND CANNOT BE MADE BASIS FOR COMPLETION OF ASSESSMENT IN THE PRESENT CASE. WITHOUT PREJUDICE, YOU ARE REQUESTED TO KINDLY CONFRONT ALL INFORMATION, DOCUM ENTS, ORDERS REFERRED TO IN YOUR SHOW CAUSE NOTICE RELATI NG TO ANY THIRD PARTY TO THE ASSESSEE BY PROVIDING ORIGI NAL OR CERTIFIED TRUE COPY FOR EXPLANATION/REBUTTAL AND TI LL THEN THEY SHOULD NOT BE USED TO DRAW ANY ADVERSE INFEREN CE IN THE CASE OF THE ASSESSEE. 4) POINT-WISE EXPLANATION I) SHRI ASHISH AGARWAL AND SHRI SHASHWAT AGARWAL: AT THE OUTSET, IT IS EXPLAINED THAT THE ASSESSEE HAS NO DE ALINGS EITHER WITH SHRI ASHISH AGARWAL OR SHRI SHASHWAT AGARWA L, IN THEIR INDIVIDUAL CAPACITY. II) IT IS A COMMON UNDERSTANDING THAT AN INDIVIDUAL IS DIFFERENT FROM A JURIDICAL PERSON AND VISE VERSA. THE ASSESS EE COMPANY HAD DEALINGS WITH CERTAIN COMPANIES BUT THOS E COMPANIES ARE DIFFERENT FROM THEIR SHAREHOLDERS AND /OR DIRECTORS, HENCE THE INFERENCES DRAWN IN THE INITIAL 2-3 PARAGRAPHS OF THE SHOW CAUSE NOTICE ARE UNFOUNDED AN D UNWARRANTED. III) SALES TAX: THE ASSESSEE COMPANY IS REGISTERED UNDER UPVAT FOR TRADING IN CLOTH, HENCE THE INFERENCE RELATING TO S ALES TAX INFORMATION NOT RECEIVED FROM SALES TAX DEPARTMENT IN THE CASE OF THIRD PARTY REFERRED TO IN YOUR SHOW CAUSE N OTICE IS NEITHER RELEVANT NOR MEANINGFUL IN THE PRESENT CASE . FURTHER, A COPY OF VAT REGISTRATION, ANNUAL RETURN AND COPY OF ORDER ETC. OF THE ASSESSEE COMPANY HAS ALRE ADY BEEN FILED WITH EARLIER REPLIED. IV) GODOWN: THE ASSESSEE GROUP HAS TAKEN 2 GODOWNS AND 5 SHOPS ON RENT AS PER DETAILS GIVEN BELOW: GODOWN/SHOP NO. PREMIS ES NO. OWNER OF SHOP/ GODOWN TENANT OF SHOP/ GODOWN 1 TO 5 (FIVE SHOPS) 122/325 PLOT NO. 17, FAZALGANJ, SIGMA CASTING LTD 122/225, PLOT NO. 1.SHREE RADHEY RADHEY ISPAT PVT. LTD. PAGE 24 OF 39 2 GODOWNS KANPUR 17, FAZALGANJ, KANPUR. 2.KUNDAN CASTING (P) LTD. 3.PARAS CASTING & ALLOYS PVT. LTD. 4.SADAHARI SHAKTI PVT. LTD. THE ASSESSEE COMPANY WAS AUTHORIZED (LICENSED) USER OF GODOWN AND SHOPS FOR ITS CLOTH TRADING BUSINESS B ESIDES USING THE SAME FOR OTHER BUSINESS ACTIVITY(IES), HE NCE THE SPACE REQUIRED FOR HOLDING OF STOCK FROM TIME TO TI ME WAS SUFFICIENT AND HAVE BEEN UNNECESSARILY IGNORED TO D RAW ADVERSE INFERENCE IN THE SHOW CAUSE NOTICE. V) STOCK NOT EXISTENT AT THE TIME OF SURVEY/SEARCH : THE CLOTH TRADING WAS DISCONTINUED BY THE ASSESSEE AND SOME OTHER ASSESSEE GROUP COMPANIES WITH EFFECT FROM 31/0 3/2016, BUT THE SEARCH/SURVEY WAS CONDUCTED IN M/S RADHEY RADHE Y ISPAT PVT. LTD. GROUP ON 23/08/2016, I.E. ALMOST AFTER GAP OF 5 MONTHS, HENCE IN THE COURSE OF SEARCH, NO STOCK OF CLOTH WAS FOUND . AS AFORESAID THE ASSESSEE WAS ENGAGED IN WHOLESALE TRADING OF CLOT H AND THEREFORE, QUESTION OF FINDING OUT SAMPLES OR SOME STOCK OF SLOTH, IS TOTALLY IRRELEVANT AS ALLEGED IN THE SHOW CAUSE NOTI CE. VI) MARGIN OF PROFIT AS AFORESAID, THE ASSESSEE AND OTHER GROUP COMPANI ES WERE DEALING WITH UNBRANDED CLOTH ON WHOLESALE BASIS, WHICH HAD VERY GOOD AND HIGHER MARGIN THAN BRANDED CLOTH TRADING. IT IS NOT UNDERSTOOD HOW THE SAME WAS FOUND UNRELIABLE. VII) STAFF: IT IS ALSO NOT CORRECT THAT THE ASSESSEE COMPANY D ID NOT DEPLOY PROPER STAFF FOR WHOLESALE TRADING IN UNBRAND ED CLOTH DURING THE RELEVANT YEARS. FOLLOWING STAFF MEMBERS WERE ENG AGED IN WHOLESALE TRADING OF UNBRANDED CLOTH: S.NO. NAME OF THE STAFF WORK LOOKED AFTER DESIGNATION SALARY 1. MR. ANKUR GUPTA ACCOUNTS DEPARTMENT MANAGER 35,500 2. MR. R. S. CHAUHAN MARKETING / SALES ACCOUNTANT 8,000 PAGE 25 OF 39 3. MR. ATUL SHUKLA PURCHASE/SALES ACCOUNTS CLERK 7 ,000 4. MR. RAM PRATAP SINGH GODOWN/STOCK ACCOUNTANT 8, 000 VIII) IT IS REITERATED THAT A) WHOLESALE TRADING IN UNBRANDED CLOTH DONE BY THE AS SESSEE IN FINANCIAL YEAR 2016-17 RELEVANT TO ASSESSMENT YEAR 2017-18 FULLY MENTIONED IN THE ABOVE REFERRED SHOW CAUSE NOT ICE IS GENUINE, CARRIED ON IN THE ORDINARY COURSE OF BUSIN ESS AND FULL AND PROPER BILLS, VOUCHERS AND BOOKS OF ACCOUNT ARE MAINTAINED BY THE ASSESSEE AND ARE AMENABLE TO COMP LETE VERIFICATION. B) NO COMMISSION WAS PAID AS ALLEGED IN THE LAST PARAGR APH OF YOUR NOTICE. IN VIEW OF THE FACTS AND CIRCUMSTANCES NARRATED ABOV E AND DETAILED EXPLANATION GIVEN ON EACH POINT RAISED IN THE SHOW CAUSE NOTICE PROPOSING TO INVOKE PROVISION IN SECTION 68 AND 69C OF THE I.T. ACT AND TO TREAT CLOTH TRADING AS BOGUS AND AL LEGED COMMISSION PAID THEREON AS UNEXPLAINED EXPENDITURE IS DEVOID O F MERITS, UNFOUNDED AND BASED MERELY ON BALD HYPOTHESIS THERE FORE, NO ADVERSE INFERENCE DESERVES TO BE DRAWN ON THIS ACCOU NT. WE HOPE THAT THE ABOVE DETAILS/INFORMATION WILL MEE T YOUR REQUIREMENT AND SATISFY YOUR GOODSELF IN TERMS OF Y OUR REFERENCED SHOW CAUSE NOTICE. 11. IN SUPPORT OF CLAIM OF CLOTH TRADING, THE ASSES SEES HAD FILED ALL THE INFORMATION AND DOCUMENTS SUCH AS PURCHASE BILLS, S ALE BILLS, COPY OF ACCOUNT OF PARTIES TO WHOM SALES WERE MADE AND COPY O F ACCOUNT OF PARTIES FROM WHOM PURCHASES WERE MADE. SIMILARLY COP Y OF BANK ACCOUNT FROM WHERE THE PAYMENTS WERE MADE/RECEIVED WERE FILED. SIMILARLY VAT DOCUMENTS/RETURNS WHEREIN THE SALES OF CLOTH WAS DEC LARED WERE ALSO FILED. IN FACT THE ASSESSEES HAD SUBMITTED AS MUCH INFORMA TION AND DETAILS AS WAS POSSIBLE. THE ASSESSING OFFICER REJECTED ALL TH E EVIDENCES AND ON THE BASIS OF ADVERSE MATERIAL, WHICH WAS NOT CONFRONTED A SSESSEES, MADE THE PAGE 26 OF 39 ADDITIONS. UNDER THESE CIRCUMSTANCES, THE LUCKNOW B ENCH OF THE TRIBUNAL VIDE ORDER DATED 16/12/2020 HAS DECIDED THE ISSUE B Y HOLDING AS UNDER: 6. THE OTHER COMMON LEGAL GROUND ARGUED BY LEARNED COUNSEL FOR THE ASSESSEE IN ALL APPEALS IS THAT THE ASSESSING OFFICER HAS NOT PROVIDED OPPORTUNITY TO THE ASSESSE ES FOR CROSS EXAMINATION OF THIRD PARTIES ON WHOSE STATEMENTS THE ADDITION WAS MADE AND SUSTAINED BY THE AUTHORITIES. 7. THE RELEVANT GROUNDS OF APPEALS COVERING THIS GR IEVANCE OF THE ASSESSEE IS CONTAINED IN GROUND NO. 5 OF ALL APPEALS. IN THIS RESPECT WE FIND THAT ASSESSEES HAVE BEEN DECLA RING BUSINESS FROM CLOTH TRADING SINCE ASSESSMENT YEAR 2 011-12 AND HAVE ALSO BEEN REPORTING SUCH TURNOVER WITH THE VAT AUTHORITIES. ALL THE ASSESSEES ARE REGISTERED WITH VAT DEPARTMENT WHEREIN CLOTH HAS BEEN MENTIONED AS ONE O F THE COMMODITY FOR TRADING. THE VAT DEPARTMENT HAS PASS ED ORDERS ALSO AND HAS ACCEPTED THE TURNOVER OF CLOTH DECLARED BY THE ASSESSEES. THE RELEVANT DOCUMENTS RELATING TO VAT ARE PLACED IN PAPER BOOKS AS DETAILED BELOW: S.NO. NAME OF ASSESSEE COPY OF VAT DOCUMENTS ------- ------------------------------------------ ------ --------------------------------- 1. SIGMA CASTINGS LTD. P.B. PAGES 55 TO 61 2. KUNDAN CASTINGS (P) LTD. P.B. PAGES 58 TO 63 3. PARAS CASTINGS & ALLOYS (P) LTD. P.B. PAGES 57 TO 69 4. SHRI RADHEY RADHEY ISPAT (P) LTD. P.B. PAGES 5 7 TO 63 5. QUALITY INDIA (P) LTD. P.B. PAGES 48 TO 52 ADMITTEDLY, THE PAYMENTS AND RECEIPTS FOR ALL THE P URCHASES AND SALES HAVE BEEN MADE THROUGH BANKING CHANNELS. THE ASSESSING OFFICER, VIDE SHOW CAUSE NOTICE DATED 12/1 2/2018, CONFRONTED THE ASSESSEE THE FOLLOWING QUESTIONNAIRE: SUB:SHOW CAUSE NOTICE FOR ASSESSMENT PROCEEDINGS U/ S 153A/143(3) OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 & 2017-18 REG. PLEASE REFER TO THE ASSESSMENT PROCEEDINGS PENDING BEFORE THE UNDERSIGNED OF THE I.T. ACT FOR ASSESSMENT YEAR 2012-13 TO 2017-18. FROM THE PERUSAL OF RECORDS AND THE DE TAILS PAGE 27 OF 39 FURNISHED BY YOU, IT IS NOTICED THAT YOU HAVE CLAIM ED TO HAVE MADE PURCHASES AND SALES OF CLOTH AS PER DETAILS GI VEN BELOW: ASSESSMENT YEAR TOTAL PURCHASES (RS.) TOTAL SALES (RS.) 2012 - 13 39,84,0 4,295 48,75,48,301 2013 - 14 25,11,10,095 28,87,36,832 2014 - 15 26,90,31,480 32,17,14,504 2015 - 16 50,02,71,240 59,97,21,277 2016 - 17 49,99,04,843 61,30,18,425 2017 - 18 44,83,60,330 48,07,39,041 DURING THE COURSE OF ASSESSMENT PROCEEDINGS YOU HAV E BEEN ASKED TO SUBMIT VARIOUS INFORMATION, EXPLANATIONS A ND EVIDENCES ABOUT THE TRANSACTIONS OF PURCHASE & SALE OF CLOTH BUSINESS. FROM THE FACTS PROVIDED BY YOU, IT IS CR YSTAL CLEAR THAT ALLEGED CLOTH TRADING IS ORIGINATING FROM ONE OF THE RICH GROUP OF COMPANIES AND AFTER TRAVELLING THROUGH SIG MA GROUP OF COMPANIES, IT IS AGAIN MERGING INTO ANOTHER RICH GROUP OF COMPANIES. RICH GROUP OF COMPANIES CONSISTING OF 14 COMPANIES AND INDIVIDUALS NAMELY SHRI ASHISH AGRAWAL AND SHRI SHAS HWAT AGARWAL, HAVE BEEN ESTABLISHED TO ACCOMMODATION ENTR Y PROVIDER IN THE FORM OF PROFIT THROUGH BOGUS SALES AND PURCHASE TRANSACTIONS, UNSECURED LOANS, BOGUS LONG TERM CAPITAL GAIN AND SUBSCRIPTION OF SHARE CAPITAL AT P REMIUM TO THE PARTY BY ACCEPTING UNDISCLOSED CASH AND COMMISS ION. THE FACTS WERE ESTABLISHED DURING THE COURSE OF SURVEY/ SEARCH & SEIZURE OPERATION AS WELL AS ASSESSMENT PROCEEDINGS OF RICH GROUP OF CASES AND MOST IMPORTANTLY IT WAS ALSO HELD BY HON'BLE ALLAHABAD HIGH COURT DURING THE COURSE OF H EARING OF WRIT PETITIONS FILED BY RICH GROUP OF COMPANIES. T HE ALLEGED TRANSACTIONS IN CLOTH TRADING BY RICH GROUP OF COMP ANIES COULD NOT BE VERIFIED FROM THEIR BOOKS OF ACCOUNT AND SAL ES TAX DEPARTMENT AS WELL. FURTHER, YOU HAVE ALSO FAILED T O PROVE THAT GENUINENESS OF TRANSACTIONS IN CLOTH TRADING D URING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH IS EVIDENT F ROM THE FOLLOWING FACTS: ALL THE PURCHASES HAVE ORIGINATED FROM ONE OF RICH GROUP OF COMPANIES AND AGAIN THE SAME WAS SOLD TO RICH GROUP COMPANIES ONLY. THUS, IT IS JUST A CIRC ULAR PAGE 28 OF 39 TRADING FOR PROVIDING/GETTING ACCOMMODATION ENTRIES IN THE FORM OF BOGUS PROFIT. EVEN A LAYMAN CAN UNDERSTAND THAT THERE WAS NO LOGIC FOR MAKING PURCHASE FROM ONE OF THE RICH GROUP OF COMPANIES BY THE ASSESSEE AND AGAIN SELLING THE SAM E TO ANOTHER COMPANIES OF RICH GROUP DIRECTLY OR THRO UGH ITS SISTER CONCERN, WHEN THE MAIN BUSINESS OF ASSES SEE WAS OF MANUFACTURING AND TRADING IN IRON & STEEL. APPARENTLY, IF ONE COMPANY OF RICH GROUP WOULD HAVE REQUIRED CLOTH, IT COULD HAVE PURCHASED DIRECTLY FR OM ITS ANOTHER GROUP COMPANY, WHICH IN MOST OF THE CASES AR E SITUATED IN SAME CAMPUS, INSTEAD OF PURCHASING AND SELLING THE SAME FROM/THROUGH SIGMA GROUP OF COMPANIES. DURING THE ASSESSMENT PROCEEDINGS ASSESSEE HAS STAT ED THAT WHOLE SALE CLOTH BUSINESS DONE BY THE ASSESSEE WAS CONDUCTED AT LOWER GROUND FLOOR OF THE PROPERTY SITUATED AT 122/235, FAZALGANJ KANPUR. HOWEVER, DURING THE COURSE OF SEARCH & SEIZURE OPERATION IN SIGMA GROUP OF CASES AT THE PREMISES 122/235, FAZALGANJ, KANPUR, SHRI ANKUR GUPTA, EMPLOYEE OF M/ S SHRI RADHEY RADHEY ISPTAL PVT. LTD. AND ALSO ITS SIGNATORY, STATED THAT CLOTH TRADING HAS BEEN CONDU CTED IN SIGMA CASTING LTD. & SHREE RADHEY RADHEY ISPAT P VT. LTD. FROM FINANCIAL YEAR 2011-12 AND IN M/S KUNDAN CASTING LTD. DURING FINANCIAL YEAR 2012-13 AND 2013 -14 BUT FAILED TO GIVE ANY DETAILS AS TO WHERE STOCK OF CLOTH WAS BEING STORED AS NO TRACE OF ANY CLOTH WHATEVER WAS FOUND DURING THE SEARCH. THUS THE ASSESSEE COULD N OT SUSBSTANTIATE THE ALLEGED CLOTH TRADING DURING THE SEARCH & SEIZURE OPERATION. DURING THE SEARCH & SEIZURE OPERATION AT 122/235, FAZALGANJ, KANPUR NO STOCK OF CLOTH WAS FOUND AND EV EN SAMPLE OF CLOTH WAS ALSO NOT FOUND. THE ASSESSEE WAS ALSO ASKED TO SUBMIT NAME OF THE RETAILERS, WHERE THE CLOTH TRADED BY IT, IS AVAILABL E FOR END USERS, IT SIMPLY REPLIED THAT IT DID NOT DEAL WI TH RETAILERS. IT IS HIGHLY IMPROBABLE THAT THE ASSESS EE GROUP COMPANIES WHICH ARE HAVING HUGE TURNOVER OF AROUND 1000 CRORE FROM FINANCIAL YEAR 2011-12 TO 20 16- 17, DID NOT BOTHER TO KNOW WHERE CLOTHS TRADED BY IT ARE BEING SOLD TO END USERS (CUSTOMERS). A BUSINESS MA N PAGE 29 OF 39 CANNOT BE SO INDIFFERENT ABOUT THE PRODUCT, HE IS D EALING IN, WHEN HE IS EARNING NET PROFIT OF AROUND 15%. ASSESSEE WAS ALSO ASKED TO NAME THE DESCRIPTION OF GOODS TRADED INCLUDING ITS BRAND NAME ETC. IN ITS R EPLY ASSESSEE STATED THAT IT DEALT IN UNBRANDED GOODS AN D THE SAME WERE IDENTIFIED FROM RESOURCES POINT OR THE IR POPULAR NAME, BUT FAILED TO GIVE DETAILS OF RESOURC E POINT OR POPULAR NAME. THE RATE OF THE CLOTHS MENTIONED IN THE DIFFERENT INVOICES ARE UNREASONABLY HIGH AND SEEMS TO BE UNREALISTIC. THAT NO CORRESPONDENCE TRAIL THROUGH PAPER, E-MAIL, WHATSAPP OR PHONE ETC. HAS BEEN SEEN DURING THE COURSE OF SEARCH AS WELL AS ASSESSMENT PROCEEDINGS. THOUGH KANPUR IS THE OLDEST AND BIGGEST HUB (MANDI) OF WHOLE SALE CLOTH TRADING, IT IS SURPRISING TO NOTE T HAT ALL THE SUPPLIERS AND CUSTOMERS OF THE ASSESSEE ARE ONL Y COMPANIES OF RICH GROUP. FROM THE DETAILS PROVIDED BY YOU IT IS FOUND THAT N O MANPOWER HAS BEEN ENGAGED IN THE HUGE TRADING ACTIVITIES IN CLOTH, WHICH SHOWS THAT THE TRANSACTION CLAIMED IN CLOTH TRADING ARE ONLY PAPER/BOGUS TRANSACTIONS. IN VIEW OF THE ABOVE FACTS, IT IS CRYSTAL CLEAR THAT ALLEGED CLOTH TRADING SHOWN IN YOUR BOOKS OF ACCOUNT IS ONLY BOOK ENTRIES AND BOGUS IN NATURE. HENCE, YOU ARE REQUIR ED TO SHOW CAUSE AS TO WHY NET OF BOGUS SALE AND PURCHASE CREDITED IN YOUR BOOKS OF ACCOUNT BE NOT TREATED AS CASH CREDIT U/S 68 OF THE I.T. ACT AND COMMISSION PAID T HEREON BE NOT TREATED AS UNEXPLAINED EXPENDITURE FROM UNDISCLOSED INCOME U/S 69C OF THE I.T. ACT AND ACCO RDINGLY WHY THESE DEEMED INCOMES U/S 68 BE NOT TAXED U/S 115BBE OF THE I.T. ACT. THE DATE FIXED FOR COMPLIANCE IS 22/12/2018. 8. THE ASSESSEE VIDE LETTER DATED 21/12/2018 IN REP LY TO QUESTIONS RAISED IN THE QUESTIONNAIRE SUBMITTED THA T THE ASSESSING OFFICER WAS USING THE INFORMATION ON THE B ASIS OF STATEMENT OF THIRD PARTY WITHOUT CONFRONTING TO THE ASSESSEE WHICH WAS NOT IN ACCORDANCE WITH LAW. IN THIS RESPECT THE PAGE 30 OF 39 ASSESSEE HAD ALSO REPLIED TO OTHER QUERIES OF THE A SSESSING OFFICER. FOR THE SAKE OF COMPLETENESS THE REPLY TO THE SHOW CAUSE NOTICE PLACED AT PAGES 120 TO 122 OF THE PAP ER BOOK, IS REPRODUCED BELOW: RE: SHOW CAUSE NOTICE DATED 12.12.2018 IN THE CASE OF M/S. SIGMA CASTINGS PVT. LTD. IN CONNECTION WITH ASSESSMENT PROCEEDINGS UNDER SECTION 153 A OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2013- 14 EXPLANATION REGARDING. WITH REFERENCE TO YOUR NOTICE REFERRED ABOVE, WE WISH TO EXPLAIN AND SUBMIT AS UNDER: 1)PRE-CONCEIVED INFERENCES; A SEARCH WAS CONDUCTED ON 23.08.2016 (CONCLUDING ON 25.08.2016) AND DESPITE ALMOST 27 MONTHS PASSED FRO M THE SAID DATE, NO ENQUIRY EXCEPT FROM SHRI ANKUR GUPTA 2-3 QUESTIONS WERE ASKED DURING THE COURSE OF SEARCH AT THE OFFICE OF M/S. RADHEY RADHEY ISPAT PVT. LTD. GROUP, ABOUT THE CLOTH TRADING, NO MEANINGFUL ENQUIRY WAS DONE FROM ANY RES PONSIBLE PERSON OF THE ASSESSEE GROUP TILL NOW. HOWEVER, IN TH E SHOW CAUSE NOTICE BASED ON THIRD PARTY INFORMATION, THAT TOO NEVER CONFRONTED TO THE ASSESSEE FOR REBUTTAL/EXPLANATION , PRE- CONCEIVED INFERENCES HAVE BEEN DRAWN RELATING TO THE CLOTH TRADING DONE BY THE ASSESSEE. 2)TWISTING OF FACTS; CERTAIN FACTS MENTIONED IN THE SHOW CAUSE NOTICE ARE NOT PART OF ASSESSMENT RECORD OF THE ASSESSEE OR M/S. RADHEY RADHEY ISPAT PVT. LTD. GROUP OF CASES. FOR EXAMPLE CLOTH T RADING UP TO 30.06.2017 WAS NOT SUBJECTED TO ANY VAT/SALES TAX ST ILL INFERENCE HAS BEEN DRAWN BY SAYING THAT NO INFORMATI ON COULD BE OBTAINED FROM SALES TAX DEPARTMENT. FURTHER, THE ASSESSEE GROUP AS A WHOLE AND ASSESSEE IN PARTICULAR WAS DEALING IN WHOLESALE BUSINESS OF UNBRANDED CLOTH, WHI CH HAS HIGH MARGIN, COMPARED TO BRANDED CLOTH TRADING. WHE REAS, IN THE SHOW CAUSE NOTICE, FIRSTLY ADVERSE INFERENCE HAS ALREADY BEEN DRAWN BY PRESUMING THAT THE ASSESSEE HAD NO RET AIL OUTLET, SHOP OR RETAILERS TO DEAL WITH. SIMILARLY CE RTAIN PAGE 31 OF 39 QUESTIONS RELATING TO BUSINESS ACTIVITIES WERE ASKED FROM MANAGER (ACCOUNTS) MR. ANKUR GUPTA, WHO WAS NOT AT AL L CONCERNED WITH SALES, PURCHASES OR MANAGEMENT OF INV ENTORY ETC. OF THE CLOTH TRADING DONE BY THE ASSESSEE. ALL THESE ISSUES CLEARLY SHOW THAT FACTS IN THE PRESENT SHOW CAUSE HAV E BEEN TWISTED TO SUIT YOUR CONVENIENCE, WHIMS AND FANCIES. OVERALL, MANAGEMENT OF CLOTH TRADING ON WHOLESALE BASIS WAS D ONE BY SHRI NAVIN JAIN, DIRECTOR. 3)DENCNDENCE ON SEARCH IN THE CASE OF RICH GROUP OF COMPANIES: THE SHOW CAUSE NOTICE PRIMARILY RESTS ON/AROUND A SE ARCH AND HIGH COURT PROCEEDINGS OF SHRI ASHISH AGARWAL AN D SHRI SHASHWAT AGARWAL AND RICH GROUP OF COMPANIES. FIRSTLY THEIR REFERENCE IN THE PRESENT PROCEEDINGS IS UNCALLED FO R AND SECONDLY THE ORDERS, DOCUMENTS, OTHER INFORMATION R ELIED UPON AND MENTIONED IN THE SHOW CAUSE NOTICE AND LIKELY T O BE USED AGAINST THE NOTICEE WERE NEVER CONFRONTED TO THE ASS ESSEE IN ACCORDANCE WITH STANDARD OPERATING PROCEDURE FOLLOWED UNDER THE INCOME TAX LAW, THEREFORE, ALL THIS IS NON COGN IZABLE AND CANNOT BE MADE BASIS FOR COMPLETION OF ASSESSMENT I N THE PRESENT CASE. WITHOUT PREJUDICE, YOU ARE REQUESTED TO KINDLY CONFRONT ALL INFORMATION, DOCUMENTS, ORDERS REFERRED TO IN YOUR SHOW CAUSE NOTICE RELATING TO ANY THIRD PARTY TO THE ASSESSEE BY PROVIDING ORIGINAL OR CERTIFIED TRUE COPY FOR EXPLANATION/REBUTTAL AND TILL THEN THEY SHOULD NOT BE USED TO DRAW ANY ADVERSE INFERENCE IN THE CASE OF THE ASSESSEE. 4)POINTWISE EXPLANATION: I) SHRI ASHISH AGARWAL ARID SHRI SHASHWAT AGARWAL: AT THE OUTSET, IT IS EXPLAINED THAT THE ASSESSEE HAS NO DE ALINGS EITHER WITH SHRI ASHISH AGARWAL OR SHRI SHASHWAT AGARWAL, IN THEIR INDIVIDUAL CAPACITY. II) IT IS A COMMON UNDERSTANDING THAT AN INDIVIDUAL IS DIFFERENT FROM A JURIDICAL PERSON AND VISE VERSA. T HE ASSESSEE COMPANY HAD DEALINGS WITH CERTAIN COMPANIES BUT THOSE COMPANIES ARE DIFFERENT FROM THEIR SHAREHOLDERS AND/OR DIRECTORS, HENCE THE INFERENCES PAGE 32 OF 39 DRAWN IN THE INITIAL 2-3 PARAGRAPHS OF THE SHOW CAUSE NOTICE ARE UNFOUNDED AND UNWARRANTED. III) SALES TAX: THE ASSESSEE COMPANY IS REGISTERED UNDER UPVAT FOR TRADING IN CLOTH, HENCE THE INFERENCE RELATING TO S ALES TAX INFORMATION NOT RECEIVED FROM SALES TAX DEPARTMENT IN THE CASE OF THIRD PARTY REFERRED TO I N YOUR SHOW CAUSE NOTICE IS NEITHER RELEVANT NOR MEANINGFUL IN THE PRESENT CASE. FURTHER, A COPY OF VAT REGISTRATI ON, ANNUAL RETURN AND COPY OF ORDER ETC. OF THE ASSESSE E COMPANY HAS ALREADY BEEN FILED WITH EARLIER REPLIES. IV) GODOWN; THE ASSESSEE GROUP HAS TAKEN 2 GODOWNS AND 5 SHOPS O N RENT AS PER DETAILS GIVEN BELOW: GODOWN/SHOP NO. PREMISES NO. OWNER OF SHOP/GODOWN TENANT OF SHOP/ GODOWN 1 TO 5 (FIVE SHOPS) 2 GODOWNS 122/325 PLOT NO. 17, FAZAL GANJ KANPUR SIGMA CASTING LTD., 122/225, PLOT NO. 17, FAZALGANJ, KANPUR L)SHREE RADHEY RADHEY ISPAT PVT. LTD. 2)KUNDAN CASTING (P) LTD. 3)PARAS CASTING & ALLOYS PVT. LTD. 4)SADAHARI SHAKTI PVT. LTD. THE ASSESSEE COMPANY WAS AUTHORIZED (LICENSED) USER OF GODOWN AND SHOPS FOR ITS CLOTH TRADING BUSINESS BESI DES USING THE SAME FOR OTHER BUSINESS ACTIVITY(IES), HENCE TH E SPACE REQUIRED FOR HOLDING OF STOCK FROM TIME TO TIME WAS SUFFICIENT AND HAVE BEEN UNNECESSARILY IGNORED TO DRAW ADVERSE INFERENCE IN THE SHOW CAUSE NOTICE. STOCK NOT EXISTENT AT THE TIME OF SURVEY/SEARCH: THE CLOTH TRADING WAS DISCONTINUED BY THE ASSESSEE A ND SOME OTHER ASSESSEE GROUP COMPANIES WITH EFFECT FROM 31.0 3.2016, BUT THE SEARCH/SURVEY WAS CONDUCTED IN M/S. RADHEY R ADHEY ISPAT PVT. LTD. GROUP ON 23.08.2016, I.E. ALMOST AF TER GAP OF 5 MONTHS, HENCE IN THE COURSE OF SEARCH, NO STOCK OF CLOTH WAS PAGE 33 OF 39 FOUND. AS AFORESAID THE ASSESSEE WAS ENGAGED IN WHOL ESALE TRADING OF CLOTH AND THEREFORE, QUESTION OF FINDING OUT SAMPLES OR SOME STOCK OF CLOTH, IS TOTALLY IRRELEVANT AS AL LEGED IN THE SHOW CAUSE NOTICE. MARGIN OF PROFIT; AS AFORESAID THE ASSESSEE AND OTHER GROUP COMPANIES WERE DEALING WITH UNBRANDED CLOTH ON WHOLESALE BASIS, WHICH HAD VERY GOOD AND HIGHER MARGIN THAN BRANDED CLOTH TRAD ING. IT IS NOT UNDERSTOOD HOW THE SAME WAS FOUND UNRELIABLE. STAFF IT IS ALSO NOT CORRECT THAT THE ASSESSEE COMPANY DI D NOT DEPLOY PROPER STAFF FOR WHOLESALE TRADING IN UNBRAND ED CLOTH DURING THE RELEVANT YEARS. FOLLOWING STAFF MEMBERS WE RE ENGAGED IN WHOLESALE TRADING OF UNBRANDED CLOTH: S.N. NAME OF THE STAFF WORK LOOKED AFTER DESIGNATION SALARY 1. MR. ANKUR GUPTA ACCOUNTS DEPTT. MANAGER 35,500/- 2. MR. R.S. CHAUHAN MARKETING/SALES ACCOUNTANT 8,000/- 3. MR. ATUL SHUKLA PURCHASE/SALES ACCOUNTS CLERK 7,000/- 4. MR. RAM PRATAP SINGH GODOWN/STOCK ACCOUNTANT 8,000/- VIII) IT IS REITERATED THAT A) WHOLE SALE TRADING IN UNBRANDED CLOTH DONE BY TH E ASSESSEE IN F.Y. 2012-13 RELEVANT TO A.Y. 2013-14 F ULLY MENTIONED IN THE ABOVE REFERRED SHOW CAUSE NOTICE IS GENUINE, CARRIED ON IN THE ORDINARY COURSE OF BUSIN ESS AND FULL AND PROPER BILLS, VOUCHERS AND BOOKS OF ACCOUNT ARE MAINTAINED BY THE ASSESSEE AND ARE AMENABLE TO COMP LETE VERIFICATION. PAGE 34 OF 39 B) NO COMMISSION WAS PAID AS ALLEGED IN THE LAST PARAGRAPH OF YOUR NOTICE. IN VIEW OF THE FACTS AND CIRCUMSTANCES NARRATED ABOV E AND DETAILED EXPLANATION GIVEN ON EACH POINT RAISED IN THE SHOW CAUSE NOTICE PROPOSING TO INVOKE PROVISION IN SECTI ON 68 AND 69C OF THE INCOME TAX ACT, 1961 AND TO TREAT CLOTH TRADING AS BOGUS AND ALLEGED COMMISSION PAID THEREON AS UNEXPL AINED EXPENDITURE IS DEVOID OF MERITS, UNFOUNDED AND BASE D MERELY ON BALD HYPOTHESIS THEREFORE, NO ADVERSE INFERENCE DESERVES TO BE DRAWN ON THIS ACCOUNT. WE HOPE THAT THE ABOVE DETAILS/INFORMATION WILL MEET YOUR REQUIREMENT AND SATISFY YOUR GOODSELF IN TERMS OF Y OUR REFERENCED SHOW CAUSE NOTICE. 9. FROM THE ABOVE QUESTIONNAIRE AND REPLY TO THE QUESTIONNAIRE, IT IS CLEAR THAT THE AUTHORITIES BEL OW HAVE NOT CITED ANY STATEMENT OF THE PARTIES FROM WHOM THE PUR CHASES AND SALES WERE MADE WHEREIN THEY HAD DENIED THESE TRANSACTIONS AND IF THERE ARE ANY STATEMENTS OF THE SE PARTIES WHEREIN THEY HAD DENIED THESE TRANSACTIONS, SUCH STA TEMENTS WERE NOT MADE AVAILABLE TO THE ASSESSEE FOR CROSS EXAMINATION. THE ASSESSEE IN PARA 3 OF THE ABOVE RE PLY HAD SPECIFICALLY REQUESTED TO CONFRONT ALL INFORMATION AND DOCUMENTS ETC. BUT NO SUCH OPPORTUNITY WAS GRANTED T O ASSESSEE. THE ARGUMENT OF LEARNED D. R. THAT SINCE THE HON'BLE ALLAHABAD HIGH COURT HAD HELD THE PARTIES T O BE BOGUS THEREFORE, THERE WAS NOTHING TO BE CONFRONTED TO ASS ESSEES IS NOT HELPFUL TO THE REVENUE AS OPPORTUNITY OF CROSS EXAMINATION OF THIRD PARTIES ON WHOSE STATEMENTS THE REVENUE IS RELYING IS A LEGAL RIGHT AVAILABLE TO TH E ASSESSEE AND WHICH HAS BEEN HELD BY VARIOUS HON'BLE COURTS IN CLUDING SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES VS. CIT 281 CTR 241. MOREOVER, WE FIND THAT THE ASSESSI NG OFFICER HAD MADE THE ADDITIONS ON THE BASIS OF A RE PORT FROM THE ASSESSING OFFICER OF RICH GROUP OF COMPANIES AN D HAS NOT CARRIED OUT ANY INDEPENDENT INVESTIGATIONS FOR HOLD ING THE TRANSACTIONS OF CLOTH TRADING AS BOGUS. THE JUDGME NT OF HON'BLE ALLAHABAD HIGH COURT HAS BEEN PASSED ON T HE WRIT PETITION FILED BY TWO COMPANIES BELONGING TO RICH GROUP. PAGE 35 OF 39 THESE COMPANIES HAD PRAYED TO THE HON'BLE HIGH COUR T TO QUASH THE SEARCH DUE TO WARRANT OF AUTHORIZATION, SA TISFACTION NOTE AND INCRIMINATING MATERIAL ETC. THE HON'BLE C OURT HAS DISMISSED THE WRIT PETITIONS BY HOLDING THAT THE COM PANIES WERE TAKING CASH FROM SOME PARTIES AND WERE GIVING CH EQUES TO OTHER PARTIES AND THEREFORE, HON'BLE COURT HAD H ELD THAT THESE COMPANIES WERE DOING MONEY LAUNDERING IN THE F ORM OF UNACCOUNTED CASH. IN THE FINDINGS THE HON'BLE COUR T HAS NOWHERE COMMENTED ON THE ACTIVITIES OF CLOTH TRADING BEING UNDERTAKEN BY THESE COMPANIES. MOREOVER, THE FACT REMAINS THAT EITHER THERE WAS NO STATEMENT OF COMPANIES DEN YING CLOTH TRADING WITH THE ASSESSEES AND IF THERE WAS ONE THEN SAME HAS NOT BEEN CONFRONTED TO THE ASSESSEES FOR C ROSS EXAMINATION DESPITE SPECIFIC REQUEST OF THE ASSESSE E. THE ENTRIES OF PURCHASES AND SALES ARE SUPPORTED BY INV OICES AND ARE FURTHER SUPPORTED WITH THE FACT THAT THESE WERE R EPORTED TO VAT AUTHORITIES. THE PAYMENTS AND RECEIPTS ARE THROUGH BANKING CHANNELS. 10. THE ASSESSEE HAS RECORDED THE ENTRIES OF SALES AND PURCHASE IN ITS BOOKS OF ACCOUNT AND HAS DULY DISCL OSED THE ITEMS OF SALES AND PURCHASE IN THE PROFIT & LOSS AC COUNT AND HAS DULY DISCLOSED THE PROFIT EARNED ON THE TRADING IN THE PROFIT & LOSS ACCOUNT AND HAS OFFERED THE SAME AS B USINESS INCOME. THE ASSESSEE HAS FURNISHED AS MUCH INFORMA TION AS POSSIBLE TO JUSTIFY ITS CLAIM ABOUT THE TRANSACTION S OF CLOTH BEING GENUINE. UNDER THESE CIRCUMSTANCES, HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ODEON BUILDERS PVT. LT D. [2019] 418 ITR 315 (SC) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: 1. DELAY CONDONED. 2. WE HAVE PERUSED THE REVIEW PETITION AND FIND THAT THE TAX EFFECT IN THIS CASE IS ABOVE RS.1 CRORE, THAT IS, R S.6,59,27,298/-. ORDINARILY, THEREFORE, WE WOULD HAVE RECALLED OUR ORD ER DATED 17 TH SEPTEMBER, 2018, SINCE THE ORDER WAS PASSED ONLY O N THE BASIS THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.1 CRORE. 3. HOWEVER, ON GOING THROUGH THE JUDGMENTS OF THE CI T, ITAT AND THE HIGH COURT, WE FIND THAT ON MERITS A DISALLO WANCE OF RS.19,39,60,866/- WAS BASED SOLELY ON THIRD PARTY I NFORMATION, PAGE 36 OF 39 WHICH WAS NOT SUBJECTED TO ANY FURTHER SCRUTINY. THUS , THE CIT (APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE STATING : 'THUS, THE ENTIRE DISALLOWANCE IN THIS CASE IS BASED ON THIRD PARTY INFORMATION GATHERED BY THE INVESTIGATI ON WING OF THE DEPARTMENT, WHICH HAVE NOT BEEN INDEPENDENTLY SUBJECTED TO FURTHER VERIFICATION BY THE AO WHO HAS NOT PROVIDED THE COPY OF SUCH STATEMENTS TO THE APPELLANT, THUS DENYING OPPORTUNITY OF CROSS EXAMIN ATION TO THE APPELLANT, WHO HAS PRIMA FACIE DISCHARGED THE INITIAL BURDEN OF SUBSTANTIATING THE PURCHASES THRO UGH VARIOUS DOCUMENTATION INCLUDING PURCHASE BILLS, TRANSPORTATION BILLS, CONFIRMED COPY OF ACCOUNTS AN D THE FACT OF PAYMENT THROUGH CHEQUES, & VAT REGISTRATION OF THE SELLERS & THEIR INCOME TAX RETURN. IN VIEW OF T HE ABOVE DISCUSSION IN TOTALITY, THE PURCHASES MADE BY THE APPELLANT FROM M/S PADMESH REALTORS PVT. LTD. IS FO UND TO BE ACCEPTABLE AND THE CONSEQUENT DISALLOWANCE RESULT ING IN ADDITION TO INCOME MADE FOR RS.19,39,60,866/-, I S DIRECTED TO BE DELETED.' 4. THE ITAT BY ITS JUDGMENT DATED 16 TH MAY, 2014 RELIED ON THE SELF-SAME REASONING AND DISMISSED THE APPEAL OF THE REVENUE. LIKEWISE, THE HIGH COURT BY THE IMPUGNED JUDGMENT DA TED 5 TH JULY, 2017, AFFIRMED THE JUDGMENTS OF THE CIT AND I TAT AS CONCURRENT FACTUAL FINDINGS, WHICH HAVE NOT BEEN SHO WN TO BE PERVERSE AND, THEREFORE, DISMISSED THE APPEAL STATI NG THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FROM THE IMPUGNED ORDER OF THE ITAT. 5. IN THESE CIRCUMSTANCES, THE REVIEW PETITIONS ARE DISMISSED. 11. SIMILARLY WE FIND THAT HON'BLE SUPREME COURT IN THE CASE OF ANDMAN TIMBER INDUSTRIES VS. CIT, VIDE ORDE R DATED 2 ND SEPTEMBER, 2015 ALLOWED RELIEF TO THE ASSESSEE BY HOLDING THAT RIGHT OF CROSS EXAMINATION IS AN IMPOR TANT RIGHT AVAILABLE TO THE ASSESSEE AND NOT PROVIDING OPPORTU NITY TO CROSS EXAMINE WILL AMOUNT TO VIOLATION OF PRINCIPLE S OF NATURAL JUSTICE. THE FINDINGS OF HON'BLE SUPREME C OURT ARE REPRODUCED BELOW: INSOFAR AS THE PLEA OF THE APPELLANT THAT IT WAS NO T ALLOWED TO CROSS-EXAMINE THE DEALERS WHOSE STATEMENTS WERE PAGE 37 OF 39 RELIED UPON BY THE ADJUDICATING AUTHORITY IN PASSIN G THE ORDERS, THE TRIBUNAL REJECTED ITS PLEA IN THE FOLLO WING MANNER: '6. THE PLEA OF NO CROSS EXAMINATION GRANTED TO THE VARIOUS DEALERS WOULD NOT HELP THE APPELLANT CASE SI NCE THE EXAMINATION OF THE DEALERS WOULD NOT BRING OUT A NY MATERIAL WHICH WOULD NOT BE IN THE POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX FACTORY PRICES REMAIN STATIC. SINCE WE ARE NOT UPHOL DING AND APPLYING THE EX FACTORY PRICES, AS WE FIND THEM CONTRAVENED AND NOT NORMAL PRICE AS ENVISAGED UNDER SECTION 4(1), WE FIND NO REASON TO DISTURB THE COMMISSIONERS ORDERS.' CHALLENGING THE AFORESAID ORDER, THE PRESENT APPEAL IS PREFERRED BY THE APPELLANT-ASSESSEE. WE HAVE HEARD MR. KAVIN GULATI, LEARNED SENIOR COUN SEL APPEARING FOR THE ASSESSEE, AND MR. K. RADHAKRISHNA N, LEARNED SENIOR COUNSEL WHO APPEARED FOR THE REVENUE. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS- EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDE R NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS AD VERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPU TED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROS S- EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT T HIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT T O NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AU THORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUN ITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WIT H BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS C ONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENAB LE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION O F THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHIC H WOULD PAGE 38 OF 39 NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES T HE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION . THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPO N THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PR ICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WE RE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRIC E WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD BE THE SUB JECT MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJ UDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJ ECT MATTER OF THE CROSS-EXAMINATION AND MAKE THE REMARK S AS MENTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN E ARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN C IVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIR ECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED,, THE RE WAS NO MATERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESA ID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUS E NOTICE. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. 12. THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF MORNING GLORY VIDE ORDER DATED 15/03/2019 IN I.T.A. NO.72/LKW/2018, HAS ALLOWED RELIEF TO THE ASSESSEE WH EREIN AGAIN THE STATEMENTS OF THIRD PARTIES WERE NOT MADE AVAILABLE TO ASSESSEE FOR CROSS VERIFICATION. THE HON'BLE TRI BUNAL HAD FOLLOWED THE JUDGMENT OF HON'BLE SUPREME COURT IN TH E CASE OF ANDMAN TIMBER INDUSTRIES (SUPRA) BESIDES NOTING DOWN THE PAGE 39 OF 39 OTHER DECISIONS. THEREFORE, IN VIEW OF THE ABOVE, WE ALLOW GROUND NO. 5 IN ALL THE APPEALS. 13. HAVING ALLOWED GROUND NO. 5, THE ADDITIONS SUSTA INED BY LEARNED CIT(A) U/S 68 AND 69C ARE NOT SUSTAINABL E AND HENCE ARE DELETED. 14. NOTHING WAS ARGUED ON OTHER LEGAL GROUNDS TAKEN BY THE ASSESSEE IN THE GROUNDS OF APPEALS. THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. 15. IN VIEW OF THE ABOVE, THE APPEALS FILED BY THE A SSESSEE ARE PARTLY ALLOWED. 12. IN VIEW OF THE ABOVE, GROUND NO. 6 IN I.T.A. NO. 643 & 678 IS ALLOWED. AS SUCH THE APPEALS IN I.T.A. NO.643 AND 6 78 STAND PARTLY ALLOWED. 13. IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLOWE D. (ORDER PRONOUNCED IN THE OPEN ON 01/02/2021) SD/. SD/. ( A. D. JAIN ) ( T. S . KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:01/02/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW