Jeewan Chandra Punetha, Champawat vs Assessee

(Applicant) (Respondent) 2 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

ASSESSEE BY : Sh. Rupesh K. Sehgal, CA REVENUE BY : Sh. P.Dam Kununjna, Sr. DR

Date of hearing : 03.03.2015 Date of pronouncement : 11 .03.2015

ORDER

PER KUL BHARAT, JUDICIAL MEMBER :

These three appeals pertaining to the assessment year

2008-09 by two different assessee and revenue are directed against

two separate orders of the Ld. CIT (Appeals) II Dehradun dated

27.12.2011 and 14.01.2013 respectively. Since the common and

inter-related issues are involved in all these appeals, these were

taken up together and are being disposed of by way of a

consolidated order for the sake of convenience.

2. First, we take up to ITA No. 1152/DEL/2012. The grounds

raised by the assessee read as under :-

"1. That having regard to the facts and circumstances of the case, Ld. Commissioner of Income Tax (Appeals-II), Dehradun has erred in law and on facts in partly confirming the action of the ld. AO in upholding that out of the total business activity carried on in the same premises, 50% belonging to the father and son respectively without any basis on assumptions and surmises completely ignoring 3 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

the details and facts furnished and verified during Assessment and Appellate proceedings and thus confirming the addition of Rs. 256,001/- on a/c of suppressed profit as per impounded material.

2. The ld. CIT(Appeals) also erred in law and on the facts of the case in confirming the addition of Rs. 177,685/- u/s 40A(3) in respect of transactions in the accounts of the firm M/s Punetha Vastra Bhandar owned by the father of the assessee upholding 50% belonging to father and 50% belonging to son (assessee) without any basis.

3. The Ld. CIT(Appeals) also erred in law and on the facts of the case in confirming the addition of Rs. 401,112/- as undisclosed sundry debtors of the firm M/s Punetha Vastra Bhandar owned by the father of the assessee upholding 50% belonging to father and 50% belonging to son (assessee) without any basis even after physically verifying the impounded material.

4. The Ld. CIT(Appeals) further erred in law and on the facts of the case in confirming the addition of Rs. 160,273/- as Cash found during survey of the firm M/s Punetha Vastra Bhandar owned by the father of the assessee upholding 50% belonging to father and 50% belonging to son (assessee) without any basis even after physically verifying the impounded material containing day book / debtors ledger confirming the receipt of such cash as collection from various debtors in the books & records of M/s Punetha Vastra Bhandar.

5. That on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in ignoring the documentary evidence and confirming addition of Rs. 250,000/- on the ground tha the donor did not have sufficient income in the ensuing year ignoring completely the past assessment records and cash flows / confirmation submitted during both the proceedings.

6. That on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in ignoring the documentary evidences and confirming addition of Rs. 160,000/- on the 4 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

ground that the asessee has not been able to prove the same being received from Shri Raj Bahadur Chand, an Income Tax Assessee who had confirmed the transfer in the bank account of the assessee in writing, for his brother who was also examined on oath by the ld. AO during Assessment Proceedings.

7. That on the facts and in the circumstances of the case the ld. CIT(Appeals) has also erred in ignoring the documentary evidence and statement on oath of Shri Girish Chandra Sharma confirming addition of Rs. 50,000/- on the ground that the assessee has not been able to prove the genuineness of the transaction and credit worthiness of the person who had confirmed the transaction personally on oath before ld. AO during Assessment Proceedings.

8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."

3. Briefly, stated facts are that a survey action u/s 133A of the

Act was carried out by the revenue at the premises of the Assessee

shri Jeewan Chandra Punetha. Subsequently, the assessee filed a

return declaring net taxable income at Rs. 1,87,469/- on 24.12.2008.

The case was picked up for scrutiny, assessment and the

assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter refer

to as the Act) was framed. Thereby the assessing officer made

various disallowance / additions on account of suppression of profit

on the basis of impounded material amounting to Rs. 7,79,999/-,

addition on account of invoking the provisions of Section 40A(3) of 5 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

the Act amounting to Rs. 3,80,069/-, addition on account of

undisclosed sundry debtors amounting to Rs. 8,02,223/-, addition on

account of discrepancy in trading account, addition on account of

unexplained cash amounting to Rs. 3,20,546/-, addition on account

of trading difference in balance sheet in respect of asset,

unexplained cash deposit of Rs. 1,60,000/-, unexplained cash deposit

of Rs. 50,000/- and addition on account of assessee's benami deposit

of Rs. 8,70,000/-.

4. Against this assessee filed an appeal before Ld. CIT(Appeal)

who after considering his submissions treated 50% of business being

carried out by the assessee. In respect of addition of Rs. 7,79,999/-,

the Ld. CIT(Appeal) reduced the addition to Rs. 2,56,001/-, in respect

of addition of Rs. 380,069/-. a direction was issued to the AO that

suppressed profit be divided into two parts hence the addition of 50%

was sustained in the hands of the assessee, in respect of addition of

Rs. 8,02,223/-, the Ld. CIT(Appeals) sustained the addition to the

extent of 50% of addition. In respect of addition Rs. 84,466/-, this

was not pressed before Ld. CIT(Appeals), in respect of addition of

Rs. 3,20,546/- made on account of cash found at the time of survey, 6 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

the Ld. CIT(Appeals) sustained the addition to the extent of 50% in

the hands of the assessee, in respect of the addition of Rs. 5,25,000/-

the difference found in balance sheet the Ld. CIT(Appeals) deleted

the addition to the extent of Rs. 2,75,000/- and sustained addition of

Rs. 2,50,000/-. In respect of addition of Rs. 1,60,000/-, it was

sustained by the Ld. CIT(Appeals) and addition on account of cash

deposits of Rs. 50,000/- was also sustained. However, the addition

in respect of addition of Rs. 8,70,000/-, was deleted from the hands

of the assessee.

5. First ground of the assessee's appeal is against the

confirmation of addition of Rs. 2, 56,601/- made on account of

suppressed profit as per impounded material. Ld. Counsel for the

assessee submitted that the Ld. CIT(Appeal) was not justified in

sustaining addition to the extent of 50% of the business. He

submitted that the assessee was only assisting his father, who was ill

on the date of survey. He submitted that even otherwise also net

profit declared by the father and son of Rs. 4,23,120/- is @ 9.75%

much above the presumed rate of 5% u/s 44 AF of the Act.

6. Ld. Counsel submitted that the authorities below have failed to

appreciate the facts in right perspective. He submitted that the 7 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

assessee has demonstrated that even if any business is to be

attributed to the assessee it should not be more than 25%. On the

contrary, Ld. Sr. Departmental Representative supported the order of

the assessing officer and submitted that the assessing officer has

rightly assessed, the entire suppressed profit in the hands of the

assessee. As there was no separate books of accounts maintained.

7. We have heard the rival contention and perused the material

available on record and gone through the orders of the authorities

below. One of the contention of the assessee is that he is engaged in

the business of retail trade, and its total turn over did not exceed the

prescribed monetary limit. The AO ought to have computed profit @

5% of total turn over as prescribed u/s 44AF of the Act. Admittedly,

the assessee has not claimed in return of income that it is entitled for

the rate as prescribed u/s 44AF of the Act for computing the

business profit. Therefore, at this stage, this contention of the Ld.

Counsel for the assessee cannot be accepted and same is rejected.

8. Another contention of the assessee is that there is no basis to

attribute 50% of the profit to the assessee. This contention of the

assessee is devoid of any merit. It is not disputed by the assessee 8 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

that he has been carrying out the business activity from the same

premises. No evidence is placed on record proving the volume of

business carried out by the assessee. The AO has given a

categorical finding that no separate stock was maintained by the

assessee and his father.

It is contended that the addition has been made by the AO

without considering the explanation offered by the assessee. This

contention is contrary to the records. It is admitted position that the

assessee was not maintaining proper books of accounts, therefore

the AO was justified in computing the profit on the basis of the

material available before him. Hence, we see no reason to interfere in

the order of Ld. CIT(A) same is hereby upheld. This ground of the

assesssee's appeal is dismissed.

9. Apropos, the ground no. 2, Ld. Counsel for the assessee

submitted that he does not wish to press this ground. Therefore, the

ground no. 2 is dismissed as not pressed.

10. Ground no. 3 of the appeal is against confirmation of addition

of Rs. 4,01,112/- . Ld. Counsel for the assessee submitted that there

are not undisclosed debtors, he submitted that there is no concealed

sales, was found. He, further submitted that sales estimated at Rs. 9 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

44,26,250/- against disclosed sales of Rs. 42,36,208/- profit of which

has already been taxed. He submitted that Ld. CIT(Appeals) was not

justified in sustaining this addition. Ld. Counsel submitted that the

assessee cannot be taxed twice. On the contrary, Ld. Sr. DR

supported the orders of the authorities below.

10.1 We have heard the rival contentions and perused the

material available on record. Ld. CIT(Appeal) has decided this issue

in para 8.1 in the impugned order reads as under -:

"The Ld. AR, on the other hand, has been content with denying ownership of these amounts since they are claimed to belong to the father. It is seen that no basis whatsoever has been given for such a denial considering that it is an admitted position that both father and son were carrying out business activities from the same premises. In view of this position on the basis of finding given earlier for apportionment of amounts between the two businesses, it is held that 50% of the impugned amount (Rs. 8,02,223/2=4,01,112) at Rs. 4,01,112/- is sustained and the remaining has to be considered shall be issued later in this appellate order."

11. The assessing officer had made addition on the basis that the

assessee neither furnished list of sundry debtors as on 31.03.2008

nor could he explain the sundry debtors despite various

opportunites. The contention of the Ld. Counsel for the assessee is 10 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

that everything was explained before the assessing officer and there

was no undisclosed sundry debtors. He drew our attention to paper

book page nos. 91, 92 and 98 to demonstrate that debtors were

recorded and duly explained. We find that the Ld. CIT(Appeal) had

observed that the assessing officer has recorded in assessment order

at pages 60 to 61 that the debtors were not disclosed by the

assessee. However, the contentions of the Ld. Counsel for the

assessee is that these debtors are duly explained and this can be

inferred from the impounded material. Therefore, there was no

occasion to make addition in this respect. After considering the

totality of the facts that if the sales effected to these debtors has been

included into the suppressed sales and addition made thereof.

Therefore, it would not be open to the Revenue to make addition of

same amount. This aspect requires verification by the Ld. AO,

therefore this ground is restored to the file of AO for verification. The

AO is hereby directed to verify whether sales effected to the debtors

in question is included into the supported sales or not and profit on

such sales is estimated or not. If AO finds that sales have been

included he would delete the addition. This ground is allowed for

statistical purposes.

11 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

12. Ground no. 4th is against the confirmation of addition of Rs.

1,60,273/- Ld. Counsel for the assessee submitted that the cash

found during the course of survey has been duly explained. He drew

our attention to paper book page no. 156 on the contrary, Ld. Sr. DR

supported the orders of authorities below.

12.1. We have heard the rival submissions and perused the

available material on the record. We find that the Ld. CIT(Appeal) has

observed that the amount could not be satisfactory explained at the

time of survey. We are of the considered view that this finding of the

Ld. CIT(Appeal) cannot be sustained. In case, the assessee is able

to demonstrate from the records that the amount so found during the

course of survey was in fact collection made in respect of sales. The

assessee has pointed out that in the impounded material collected

during the course of survey itself the assessee has shown that the

cash so found was out of the sales collections. This fact requires to

be verified at the hands of the assessing officer. Therefore, the issue

is restored to the file of AO for verification, whether the cash

found during the course of survey was collection of the sale amount.

In case, the amount pertains to sale collection same be deleted. This

ground of assessee's appeal is allowed for statistical purpose.

12 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

13. Ground no. 5 is against the confirmation of addition of Rs.

2,50,000/- Ld. Counsel for the assessee submitted that no addition

can be made in the assessment year under consideration since

these deposits / gifts pertain to the assessment year 2007- 2008.

Therefore, same cannot be subject matter of addition of assessment

year in question. On the contrary, Ld. Sr. DR supported the orders of

the authorities below.

13.1. We have heard the rival contentions and perused

material available on record. We find the Ld. CIT(Appeal) has

observed that the gift given by father is not proved and observed that

the total gifts far exceeded the income shown by the donor and thus

cannot be held to be explained. It was incumbent upon the assessee

to produce the relevant documentary evidence in support of its claim.

The assessee is required to furnish the evidence to prove

genuineness of the transaction and creditworthiness of the donors.

The authorities below have given a finding on fact that the donors

were not having sufficient fund to give gifts to the assessee. This

finding on fact is not rebutted by the assessee by placing any contray

material on record. Therefore, we do not see any reason to interfere

into finding of the Ld. CIT(Appeal) to this extent. However, the 13 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

contention of the Ld. Counsel for the assessee is that these gifts /

balances pertain to earlier year i.e. assessment year 2007-08. This

fact requires verification at the end of the assessing officer. We

hereby direct AO to verify the claim of assessee. In case, the

assessing officer finds that deposits pertain to earlier year, he would

delete the same. However, it would be open to Revenue to tax the

same in relevant Assessment Year if law so permits.

The ground of the assessee appeal is allowed for the statistical

purposes.

14. Ground no. 6 : The ground no. 6 is against the confirmation of

addition of Rs. 1,60,000/-. Ld. Counsel for the assessee submitted

that the authorities below were not justified in making addition. He

submitted that it was demonstrated by the assessee that the amount

belonged to one Shri Raj Bahadur Chand who confirmed the same.

He submitted that all evidences were furnished in support thereof,

there was no occasion to confirm the addition. He submitted that cash

was deposited in Karnataka where the appellant has no business

activity and therefore, the explanation offered by the assessee is

correct. He further submitted that no inquiry was made from the

depositor, the depositor is having PAN. On the contrary Ld. Sr. DR 14 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

supported the orders of the authorities below and submitted that the

assessing officer was justified in making addition.

14.1. We have heard the rival contention and perused the

material available on record. We find that the revenue has not placed

anything on record suggesting that the amount deposited by Raj

Bahadur Chand in fact belonged to the assessee. On the contrary,

the assessee has produced evidences in the form of bank statement

etc., therefore, we hereby direct the assessing officer to delete the

addition. Accordingly, this ground of Assessee's appeal is allowed.

15. Apropos, to ground no. 7 : Ld. Counsel for the assessee

submitted that he does not wish to press this ground. Accordingly,

this ground of the assessee appeal is dismissed as not pressed

16. Ground no. 8 is general in nature needs no separate

adjudication.

In the result of appeal of the assessee is partly allowed for

statistical purpose.

17. Now, we take up the ITA No. 1174/Del/2012 filed by the

revenue. The revenue has raised the following grounds of appeal.

"(i) In the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by holding that only 50% of the business turnover belongs to the assessee whereas the Assessing Officer has clearly established in the 15 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

assessment order that the entire business turnover relates to the assessee only and Ld. CIT(A) has not given any justification as to the basis of apportionment of business turnover equally between the assessee and his father.

(ii) In the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by allowing relief of Rs.2,75,OOO/- to the assessee out of addition of Rs.5,25,000/- on account of discrepancy in balance sheet without fully appreciating the facts and circumstances of the case and accepting the version of the assessee merely on the basis of his claim.

(iii) In the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by deleting the addition of Rs.8,70,000/- made by the Assessing Officer on account of benarni transaction without fully appreciating the relevant facts, as detailed by the Assessing Officer in the

assessment order, which held substantial force in establishing the deposits in bank A/c benarni deposits of the assessee."

18. The ground no. 1 of the revenue is against the finding of the

Ld. CIT(A). That out of the entire business turnover only 50%

business turn over belong to the assessee. Ld. Sr. DR submitted that

the Ld. CIT(Appeal) was not justified in treating that only 50% the

business turn over belonged to this assessee. He submitted that the

assessing officer in the case of assessee-son had treated the entire

business belonging to his son. On the contrary, Ld. Counsel for the

assessee adopted the argument that were addressed in ITA No.

1152/Del/2012 Ld. Counsel for the assessee adopted the arguments

that were addressed in ITA No. 1152/Del/2012. He submitted that 16 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

there was no basis for bifurcating business turnover equally between

son and father.

18.1. We have heard the rival contentions the facts are identical

as were in ITA No. 1152/ Del/2012. Following the same reasoning

as recorded in para 8 of this order. We hereby upheld the order of Ld.

CIT(Appeal). This ground of revenue appeal is rejected.

19. Ground no. 2 is against the allowance of relief of Rs.

2,75,000/-. Ld. Sr. DR submitted that the Ld. CIT(Appeal) was not

justified in deleting the addition. He submitted that the assessing

officer has given a detailed finding the same be upheld. On the

contrary, Ld. Counsel for the Assessee is supported the order of the

Ld. CIT(Appeal).

19.1. We have heard the rival contentions and perused the

material available on record, we find that the Ld. CIT(Appeal) has

given finding on fact by observing as under :-

"11.1 Considering the facts and circumstances, this amount is treated as explained in part only. It is seen that vide report dated 26.09.2011 (which has been rebutted by the ld. AR) it has been mentioned that the gift amount of Rs. 2,50,000/- shown received from father does not stand proved since there is a finding that Shri Ganesh Shanker Punetha's total income for the year was Rs. 2,30,884/- and he is shown to have even gifted an amount of Rs, 17 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

270,000/- to the wife of the appellant in this very year. Thus the sum total of gifts far exceeds the income shown in the return and thus cannot be held to be explained. Thus, out of Rs. 5,25,000/-, Rs. 2,75,000/- (i.e. 5,25,000 - 2,50,000=2,75,000) is held as explained and the addition to this extent deleted. The remaining amount of Rs. 2,50,000/- is upheld as an addition."

The above finding on fact by the Ld. CIT(Appeal) is not

controverted by the revenue by placing any contrary material on

record. Therefore, we do not see any reason to interfere to the order

of the Ld. CIT(Appeal). Same is hereby upheld. This ground of the

revenue appeal is rejected.

20. Ground no. 3 is against deletion of addition of Rs. 8,70,000

made by the assessing officer on account of benami transactions. Ld.

Sr. DR submitted that the addition was made on the basis of the

material found during the course of survey. He submitted that the

persons on whose name the bank account was held were not having

sufficient means of income he submitted that the assessing officer at

para 65 has observed that the assessee had deposited the amounts

in account no. 10925759010. He submitted that the evidence

collected during survey suggested benami transaction of assessee.

Further he submitted that he finding of Ld. CIT(A) is contrary to the 18 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

records. Ld. Counsel for the assessee supported the order of the Ld.

CIT(Appeal) and submitted that the revenue could not prove that

this amount in fact belongs to the assessee. Therefore, the Ld.

CIT(Appeal) was justified in deleting the addition.

20.1. We have heard the rival contentions and perused the

material available on record, we find that the Ld. CIT(Appeal) has

given a finding that no action is taken against the recorded bank

Account holder, no inquiry was made by the assessing officer to find

out involvement of the appellant. The Ld. CIT(Appeal) has given a

finding that the assessee was merely an introducer of bank account.

However, it is transpired from the assessment order the

Assessing Officer has observed that according to material available

on records there were certain deposits in account no. 10925759010.

Thus we are not able to accept the argument that the assessee was

merely an introduced of the account if he was merely introduces of

the account then how the details related to the account of third party

was found during the course of survey at his premises. Therefore, we

hereby set aside this issue to the file of the assessing officer as to

give a clear finding in respect of addition made what was the basis

and material available before him for making such addition.

19 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

Moreover, the Ld. CIT(Appeal) has not given any finding on this

aspect of the matter.

This ground of the revenue is allowed for the statistical purposes.

In the result appeal of the Revenue is partly allowed for statistical

purpose.

21. Now we take up ITA NO. 1485.Del.2013. The grounds

raised in this appeal read as under :-

"1. The reassessment framed by the Assessing Officer without providing any opportunity to the appellant to file any detail or rebut finding of CIT (A), in the individual case of Shri Jiwan Chand Punetha, which was the reason for reassessment and confirmation of such reassessment by CIT (A) is contrary to facts and law and therefore the reassessment order is bad in law and is therefore liable to be quashed.

2. The order of the learned CIT(A) upholding that out of total business activity carried on in the premises, 50% belonging to the appellant is based on his finding given in case of the individual assessments of the Legal Heir Sh. Jiwan Chandra Punetha is contrary to facts and law and therefore, all the additions made in the assessment of the appellant and confirmed by the CIT (A) are unlawful and are liable to be deleted.

3. Addition of Rs.2,56,001/- made by the Assessing Officer and confirmed by the CIT(A) in respect of suppressed profit is contrary to facts and law and therefore, the addition is unlawful and is liable to be deleted.

4. Addition of Rs 4,01, 112/- made by the Assessing Officer and confirmed by the CIT(A) in respect of undisclosed Sundry Debtors is contrary to facts and law and therefore, the addition is unlawful and is liable to be deleted.

20 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

5. Addition of Rs. 1 ,60,273/- made by the Assessing Officer and confirmed by the CIT(A) in respect of cash found at the time of survey is contrary to facts and law and therefore, the addition is unlawful and is liable to be deleted.

6. The appellant craves leave to add or amend any of the grounds of appeal.

21.1. Apropos to ground no. 1 no arguments were addressed

no submission was made, therefore, this ground is rejected.

22. Apropos to ground no. 2 & ground no 3 : The

Representatives of the Parties adopted the arguments as were made

in ITA No. 1152/Del/2012.

22.1. No change into facts and circumstances has been pointed

out by the Ld. Counsel for the Assessee. Therefore, for the same

reasoning as given in para 8 of this order, which is reproduced

hereinunder :-

"Another contention of the assessee is that there is no basis to attribute 50% of the profit to the assessee. This contention of the assessee is devoid of any merit. It is not disputed by the assessee that he has been carrying out the business activity from the same premises. No evidence is placed on record proving the volume of business carried out by the assessee. The AO has given a categorical finding that no separate stock was maintained by the assessee and his father.

It is contended that the addition has been made by the AO without considering the explanation offered by the assessee. This contention is contrary to the records. It is admitted position that the assessee was not maintaining proper books of accounts, therefore the AO was justified in 21 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

computing the profit on the basis of the material available before him. Hence, we see no reason to interfere in the order of Ld. CIT(A) same is hereby upheld. This ground of the assesssee's appeal is dismissed.

We hereby reject this ground of appeal.

Hence, ground no. 2 and 3 of the assessee's appeal reject.

23. Apropos to ground no. 4 the similar ground was taken in ITA

No. 1152/Del/2012 as ground as ground no. 3. The Representative

of the parties have adopted the same argument. There is no change

under facts and circumstances pointed out. Therefore, for the same

reasoning as in para 11 of the order which is reproduced hereinafter

:-

"The assessing officer had made addition on the basis that the assessee neither furnished list of sundry debtors as on 31.03.2008 nor could he explain the sundry debtors despite various opportunites. The contention of the Ld. Counsel for the assessee is that everything was explained before the assessing officer and there was no undisclosed sundry debtors. He drew our attention to paper book page 91, 92 and 98 to demonstrate that debtors were recorded and duly explained. We find that the Ld. CIT(Appeal) had observed that the assessing officer has recorded in assessment order at pages 60 to 61 that the debtors were not disclosed by the assessee. However, the contentions of the Ld. Counsel for the assessee is that these debtors are duly explained and this can be inferred from the impounded material. Therefore, there was no occasion to make addition in this respect. After considering the totality of the facts that if the sales effected to these debtors has been included into the suppressed sales and addition made thereof. Therefore, it would not be open to the Revenue to make addition of same amount. This aspect 22 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

requires verification by the Ld. AO, therefore this ground is restored to the file of AO tax verification. The AO is hereby direct to verify whether sales effected to the debtors in question is included into the supported sales or not and profit on such sales is estimated or not. If AO finds that sales have been included he would delete the addition."

Accordingly the AO is directed to decide this issue in the light of

above direction. This ground is allowed for statistical purpose.

24. Apropos to ground no. 5 :- The Representatives of the

parties have adopted their arguments as were in ITA No.

1152/Del/2012. There is no change into facts and circumstances.

Therefore following the same reasoning in para 12.1 which is

reproduced hereunder.

"We have heard the rival submissions and perused the available material on the record. We find that the Ld. CIT(Appeal) has observed that the amount could not be satisfactory explained at the time of survey. We are of the considered view that this finding of the Ld. CIT(Appeal) cannot be sustained. In case, the assessee is able to demonstrate from the records that the amount so found during the course of survey was in fact collection made in respect of sales. The assessee has pointed out that in the impounded material collected during the course of survey itself the assessee has shown that the cash so found was out of the sales collections. This fact requires to be verified at the hands of the assessing officer. Therefore, the issue is restored to the file of AO for verification, whether the cash found during the course of survey was collection of the sale amount. In case, the amount pertains to sale 23 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

collection same be deleted. This ground of assessee's appeal is allowed for statistical purpose."

The issue is restored to AO to decide in the light of above direction.

This ground of Assessee's appeal is allowed for the statistical

purpose.

25. Ground no. 6 is general in nature needs no adjudication.

In the result ITA No. 1152/Del/2012 is partly allowed for statistical

purposes, ITA No. 1174/Del/2012 is partly allowed and

1485/Del/2013 is also partly allowed for statistical purposes.

Order pronounced in open court on Wednesday, 11thday of

March, 2015.

Sd/- Sd/- (S.V.Mehrotra) (Kul Bharat) Accountant Member Judicial Member

Dated 11th March, 2015 B.Rukhaiyar Copy forwarded to 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), New Delhi.

AR, ITAT N. Delhi

24 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012

Sl. Description Date No.

1. Date of dictation by the Author 05.03.2015

2. Draft placed before the Dictating 05.03.2015 Member

3. Draft placed before the Second Member

4. Draft approved by the Second Member

5. Date of approved order comes to the Sr. PS

6. Date of pronouncement of order

7. Date of file sent to the Bench Clerk

8. Date on which file goes to the Head Clerk

9. Date of dispatch of order 25 ITA NO. 1485/ Del/2013, 1152 & 1174.Del.2012