TMI Blog2008 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... tock left. Therefore, the purchases and sales had to be accepted - CIT(A) was satisfied by the explanation of the assessee - CIT observed that existence of shareholders was established and money received from them was well founded. Therefore, he deleted both the additions. HELD THAT:- I am inclined to hold that assessee has not been able to establish that cash was represented sale proceeds of books. I do not find any substance in the finding of ld CIT (A) that sales should be accepted as it is recorded in the books of account of the assessee. In my considered opinion, some evidence of sale generating extraordinary income of about 100 per cent in hands of a loss making company in purchase of books from a sister concern i.e. in an item not carried in routine, was required to be placed by the assessee. Mere entries of sale to justify credit were not good enough. It is accordingly held that the assessee has failed to establish that credit represented sale consideration of books. Having held so, I am inclined to hold that addition was not made by the AO in this case. It is evident that by adding and deducting the same amount the AO practically did not make any addition for unexpla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. The ld Members of the Tribunal in the AY 1996-97 were also not called upon to examine the issue whether the assessee and M/s. Haryana Wool Allied Industries (P.) Ltd. were operating from the same premises and in their order has made only a passing observation. It is not a finding of fact. Although purchase and sale of books has been claimed by the assessee as part and parcel of transaction, yet it is different. Purchase has been claimed to be made from the sister concern for a stated consideration. Sale had been claimed to be made to other outside parties. Purchase and sale are, therefore, two distinct transactions discussed as one in orders impugned before me. It is possible that assessee may be able to establish purchase of books, though sale of the same books has not been accepted. In that case, addition of will have to be allowed as a deduction. The parties before me could not draw my attention to any relevant evidence on record on the basis of which the issue could have been resolved. Therefore, on facts, I agree with proposed order of ld AM that this question should be restored to the file of the AO for re-determination in accordance with law. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold, and also the names and addresses of the persons from whom the purchases and sales were made. 4.3 The AO further noted that the assessee had introduced cash of Rs. 1,02,21,433. The AO required the assessee to explain the source of this cash. 4.4 It was submitted on behalf of the assessee that the agents of the buyers had taken delivery of the goods on behalf of their clients who are spread outside Delhi. According to the assessee, payments were received in cash through their agents. In this regard the AO issued letters under Section 133(6) to the following parties: M/s Alkesh Shah (P) Ltd., Ludhiana; M/s Rupal Book Agency, Ahmedabad; M/s Alkesh Shah Co., Ahmedabad; Vidharthi Pustak Bhandar, Rajkot; Shital Law House, Ahmedabad; Kalanwati Law House, Ahmedabad. 4.5 In compliance to the notice, none of the parties turned up. The AO on examination of the audited balance sheet noticed that even auditors had commented that prior approval of the Central Government under Section 297 of the Companies Act, 1956 was not obtained in respect of transactions for purchase of goods amounting to Rs. 51,65,820 entered by the company with Adbros Electro Tech., a div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the decisions of the Hon'ble Supreme Court in the cases of Workmen, Associated Rubber Industry Ltd v. Associated Rubber Industry Ltd [1986] 157 ITR 77; and the decision in the case of McDowell Co. Ltd v. CTO [1985] 154 ITR 148, he made addition of Rs. 1,00,04,855 under Section 68 on account of cash credit in the books of account. He also made addition of Rs. 51,65,820 on account of bogus purchases of books. 4.10 Both of the above additions were challenged before the learned CIT(A) by the assessee. In this regard ground Nos. 1 and 2 were taken before him. 4.11 Regarding accretion to the capital by fully paid up shares and partly paid up shares, it was explained before the learned CIT(A) by the assessee that as on 31st March, 1995 the total investment made by the assessee company was at Rs. 1,87,89,000 out of which Rs. 12,18,700 was the opening balance for the year and out of the remaining amount of Rs. 1,75,70,300, investment to the tune of Rs. 1,05,70,300 was made by purchasing shares of Hare Shree Finance Ltd.; Haryana Wool Allied Industries (P) Ltd. and Gurshant Engg. Co. (P) Ltd. in the following manner: Hare Shree Finance Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scharged. It was pointed out that unlike cash credits, for investment in share capital, assessee was not required to prove the creditworthiness of the shareholders and was required only to prove the existence of the shareholders and the money having been received from them. The learned Counsel alternatively argued that even if the purchases and sales were not held to be genuine and the same were considered to be on account of the assessee, then only the peak amount which comes to Rs. 48,39,035, could be added. 4.16 Apart from the above submissions, the learned Counsel further submitted before the learned CIT(A) that M/s Haryana Wool Allied Industries (P) Ltd. was a regular assessee and sale of Rs. 51,65,820 made to it had been duly reflected in the balance sheet and the P L a/c of the said company. On the basis of these documents it was argued that when purchases are accounted for there should be no doubt for sales having been made and the rejection of the transactions without evidence was arbitrary and untenable. 4.17 The learned CIT(A) accepted these arguments of the assessee and deleted the addition by observing as under: 10. I have considered the issue after going th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of Hon'ble Delhi High Court in CIT v. Steller Investment Ltd. for the proposition that it would be adequate proof to establish the existence of the shareholder and money having been received from them is well founded. In the circumstances additions made are not tenable and is hereby deleted. (Relief of Rs. 51,65,820 + Rs. 1,00,04,855 = Rs. 1,51,70,675). Thus ground Nos. 1 and 2 succeed. 5. The learned Departmental Representative has challenged the above finding of the learned CIT(A) by making reliance on the order of AO and by submitting that assessee could neither prove the genuineness of the purchases nor the sale of the material allegedly purchased by it. He further pointed out that the amount shown on account of the purchase was utilized by the assessee for making investment in the shares of the sister-concerns and in turn these sister-concerns purchased the shares of the assessee. Thus, all the transactions have been made for the purpose of money rotation. The learned Departmental Representative made reference to letter dt. 16th June, 2005 filed on behalf of the Department and by making reference to the balance sheet pointed out that in the year ending 31st March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that on account of similar transactions in the asst. yr. 1996-97 also additions were made under Sections 68 and 69 of the IT Act which were deleted by the learned CIT(A) and the deletion was upheld by the Tribunal by rejecting the grounds taken by the Revenue against such deletion. In this regard the learned Counsel made reference to the decision of Tribunal Delhi Bench B , dt. 26th June, 2006 rendered in ITA No. 521/Del/2000. 7. We have carefully considered the entire material on record and the rival submissions. On going through the order of Tribunal for asst. yr. 1996-97 it is found that in that year also some purchases made by the assessee from other sister-concerns which were held to be bogus by the AO and the accretion to the share capital by way of adjustment of the amount payable against these purchases, was also not accepted as genuine and addition of Rs. 3,70,34,500 was made under Section 69 of the IT Act which was deleted by the learned CIT(A). In that year the Revenue challenged the deletion of addition by taking following ground before Tribunal: On the facts and in the circumstances of the case, the learned CIT(A) has erred in law in deleting the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credits'. In the case of the assessee no cash has been received. Even if we assume that the provisions of Section 68 would apply in every case where any sum is found credited in the books of an assessee, the source is immediately explained by corresponding entries made in the books of accounts of alleged purchases from the share applicants themselves. The learned AO cannot rely upon one part of the same transaction while disputing the genuineness of another part of the same transaction. If on the other hand, the learned AO holds that there are no genuine purchases, it would only be logical to assume that there was no genuine allotment of shares to these parties. In other words, no income can be assessed in relation to the transaction known to be paper transaction only. In this behalf the learned CIT(A) has rightly observed that while the learned AO has relied upon McDowell's case the AO has in no way shown that any tax has been evaded by the assessee. As the sum of Rs. 10.80 lakhs there is no word in the assessment order to doubt the transaction that has taken place by account payee cheques. We, therefore, do not see any reason to interfere in the impugned order of the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The vouchers for purchases and sales continue to be retained in Departmental custody after the seizure and no material has been produced to indicate any falsity and inaccuracy therein. Be that as it may, the law on the point of unproved sales is that only the GP can be added if any adverse view is required to be taken. The assessee by its act has done just that. There is nothing on record to suggest or show that by way of sales appellant had received anything else other than what it had shown in its accounts. That being the position, the sample test to which purchases and sales had been subjected to, has not shown any notable discrepancy and the same stood accepted. That only showed that the remaining sales also were required to be accepted and approved especially in the absence of any objectionable material. It is also true that additions cannot be based on mere surmises and conjectures. In view of the above and in the absence of any corroborative material to support the stance of the Department that there was undisclosed income, the addition made by the AO cannot be justified. In this background the CIT(A) was correct in deleting the addition which finding we hereby confirm. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to buildings used as guest houses as defined in Section 37(5) and the provisions of Sections 31 and 32 would have been sufficient for that purpose. When the language of a statute is clear and unambiguous, the Courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the statute. 16. As per the above observations the deduction on account of expenditure incurred on guesthouse on repair and maintenance etc. is not allowable. However, in the order of Tribunal, the claim of the assessee has been allowed vide order dt. 30th July, 2004 by observing as under: 5. We have heard the parties with reference to material on record. The assessee had denied before the AO that no guesthouse is being maintained. The premises were used by the technical staff as the factory was yet to be set up. The assessee had also explained that the statement made in the return that rent is for guesthouse was due to inadvertence. The statement of the assessee in the return could raise suspicion in the mind of the AO but such a statement from which the assessee has resiled could not be treated as conclusive. It was the duty of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had written off this amount which it had suo motu shown to be a contingent liability. It was found that in tax audit report also this liability has been shown to be contingent. On this basis the AO held that there was no basis for deduction in this year. He thus disallowed the claim of the assessee. 20. In appeal, the learned CIT(A) has reversed the order of AO and has allowed the claim of the assessee by deleting the disallowance, by observing as under: 25. In view of the fact that the goods have been auctioned by the Bombay Port Trust authorities and that the goods have been written off by the appellant in the books of account, I see no error on the part of the appellant company, the same is allowable as deduction and the addition made by the AO on this account is deleted. Ground No. 8 succeeds, Relief of Rs. 40,26,166. 21. Before us, the learned Departmental Representative supported the order of the AO whereas the learned Counsel for the assessee placed reliance on the order of the learned CIT(A). 22. We have carefully considered the entire material on record and the rival submissions. Since the AO has treated this liability to be contingent liability, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained to the AO that the cash introduced in the books had been received on sale of legal books, which the assessee had purchased for a sum of Rs. 51,65,820 from Adbros Electro Tech, a division of Haryana Wool Allied Industries (P) Ltd. in which the four directors of the assessee company were members. The purchases had been made as per invoices from serial Nos. 1 to 109. The AO on examination of details noted that not a single transaction of purchase and sale of books had been made otherwise than by cash. The AO, therefore, asked the assessee to give details of the parties to whom the books had been sold. The assessee explained that the books had been sold to various parties spread outside Delhi. The deliveries of the books had been taken by the agents of the parties and the payments had also been received in cash through the agents. However, the assessee could produce no evidence in support of the statement given. The assessee could give the addresses of only six parties to whom the AO issued notices under Section 133(6) with a view to verifying the genuineness of the parties. However, the letters were returned back by the postal authorities with the remarks that there were no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holders was established and money received from them was well founded. After making these observations, he deleted both the additions aggrieved by which the Revenue is in appeal. 3. Before the Tribunal, the learned Authorised Representative for the assessee reiterated the submissions made before the lower authorities. He also placed heavy reliance on the decision of the Tribunal in assessee's own case in asst. yr. 1996-97 in ITA No. 521/Del/2000 which according to him covered the case of the assessee. The learned senior Departmental Representative on the other hand supported the orders of the AO. 4. I have perused the records and considered the rival contentions carefully. The addition has been made by the AO on account of investment in purchase of books to the tune of Rs. 51,65,820 and sum of Rs. 1,00,04,855 on account of cash introduced in the books under Section 68. The cash credited in the books of accounts has been explained by way of sale of books purchased from the associate company. The assessee is not in the business of sale and purchase of books and this was totally a new and different activity. No prior approval of Central Government had been taken by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that the transactions entered in the books cannot be rejected without proper evidence. This, in our view is not correct. Transactions cannot be explained by mere entry in the books. Entries have to be substantiated by the assessee by proper supporting evidence. The burden is on the assessee to explain the entries with proper evidence. In this case, burden is particular high because transactions are from the sister concern and are quite unusual and unrelated to the main line of business and on which unusually high profit margin of about 100 per cent has been shown. The purchase vouchers can be easily procured from the sister concern because of their close relationship. And even in respect of alleged purchases there is no evidence of delivery of books. 4.2 The learned Authorised Representative for the assessee has heavily relied on the decision of the Tribunal in its own case in asst. yr. 1996-97 in ITA No. 521/Del/2000. On careful perusal of the said order, we find that the case is distinguishable and does not apply to the facts of the present case. In that case, the assessee had made purchases to the tune of Rs. 2,43,87,055 from M/s Adbros Electro Tech and Rs. 2,59,49,250 fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lotment of shares to different parties because in case, the allotment is genuine, availability of cash on this account has to be accepted following the decision of the Tribunal (supra). However, the position in this regard is not clear whether the cash was received from the parties to whom the shares of assessee companies were allotted. No doubt the assessee during the year issued fresh share capital worth Rs. 57,17,000 to three associate concerns but it is not clear from the records that they had made payment by cash. Therefore, the source of investment in purchases is not clear from the order of the AO and CIT(A) and this aspect is required to be examined afresh and is accordingly restored back to the AO for a fresh decision after opportunity to the assessee. In case, availability of cash to the tune of Rs. 51,65,820 is established, the addition made by the AO to that extent on account of investment will have to be deleted. However, since the said sum had been paid by the assessee to the sister-concern, the same will not be available for set off against the cash deposits of Rs. 1,00,04,855 as claimed by the assessee. I hold accordingly. 5. In the result, appeal of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various investments and also addition of cash in accounts. As per p. 1 of the assessment order, the assessee either did not appear on the date fixed or asked for an adjournment. Just four days before the assessment was getting time-barred, it submitted a written letter dt. 26th March, 1998. Having not complied with the notices of the AO, the assessment was made on the basis of material on record. 2.1 The AO, on scrutiny of accounts, found that the assessee had shown to have purchased books from its sister-concern Adbros Electro Tech, a division of Haryana Wool Allied Industries (P) Ltd., for a sum of Rs. 51,65,820 which were allegedly sold for Rs. 1,00,04,855. The transaction of purchase and sale was carried out in cash. The AO wanted the assessee to prove cash transaction, but no evidence, in support of the transaction was filed. The assessee had claimed that agents of the purchasers had come, took delivery of books, paid sale money in cash and thus completed the transactions. The assessee gave names of only six parties who had purchased books from the assessee. The AO issued notice to these parties' under Section 133(6) of IT Act and got the report from postal authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the CIT(A), who after consideration of facts and the circumstances of the case, held that cases cited by the AO had no application to the facts of the case. The learned CIT(A) did not see any device adopted by the assessee to avoid tax liability. According to him, additions made in the assessment were untenable. He found that allotment of the shares was actually made. According to the learned CIT(A), failure of six parties to comply with letters under Section 133(6) cannot ipso facto cloud the other evidence establishing genuineness of the transactions. He accepted that appellant was a loss making company yet whether cash surplus for investment was actually available with it or not was to be settled not hypothetically but on the basis of entries in books of account. He pointed out that no error has been brought on record by the AO. If sales and purchases were through bank, there would have been no reason to suspect, but having regard to the situation and there being no legal compulsion to carry transaction in cheques only, no objection could be taken on cash transactions on suspicion. He further observed that vouchers relating to purchases from M/s Haryana Wool Allied Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f book version. It was futile to argue that in open bids carried out through auction, there would be no cash involved. He further observed that vouchers for purchase and sales continued to be retained in Departmental custody after seizure and no material had been produced to indicate any falsity and inaccuracy therein. The learned JM further held that law on the point of unproved sales was that only GP could be added if any adverse view was required to be taken. There was nothing on record to suggest or show that by way of sales appellant had received anything else, other than what has been shown in accounts. No discrepancy was noted. Further more part of sales were accepted and there was no objectionable material on record. The learned JM accordingly held that sale and purchase of books were genuine. He accordingly agreed with the view taken by the learned CIT(A). 5. The learned AM did not agree with the order proposed by the learned JM. He noted the facts and circumstances of the case including investment in shares of three companies at p. 2 of his proposed order. He also noted that assessee had introduced cash in books on different dates. He further noted claim of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected. He disagreed with the CIT(A) that transaction could be explained by mere entry in books. Entries have to be substantiated by the assessee by proper supporting evidence. The learned AM did not rely upon purchase vouchers as according to him such, vouchers can be easily procured from the sister concern because of their close relationship. 7. The learned AM also distinguished the order of the Tribunal passed in ITA No. 521/Del/2000 in the case of the assessee for asst. yr. 1996-97. After considering facts and circumstances of the case he held that that case was distinguishable and did not apply to the facts of the present case. The distinguishing features have been noted by the learned AM in the impugned order. The learned AM observed that in the case in hand the dispute was that source of cash was not explained and, therefore, addition of Rs. 1,00,04,855 was justified. The learned AM reversed the order of CIT(A) on above addition in his proposed order. 8. As for as addition of Rs. 51,65,820 was concerned, the learned AM set aside the order of CIT(A) and restored the matter to the file of the AO with the following observations: However, the position in this regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries dt. 31st Oct., 1997, 10th Nov., 1997, 23rd March, 1998, 25th March, 1998 and 26th March, 1998. In its letter dt. 26th March, 1998, it was explained that cash sales were made and delivery of books were given to the agents of buyers who were spread outside Delhi. The assessee gave names of six buyers, noted at pp. 2 and 3 of the assessment order belonging to Ahmedabad, Rajkot and Ludhiana. However, when letters were sent to these parties under Section 133(6), these were received back with postal remarks that no person at the address given by the assessee was available. No particulars of these or other buyers were furnished in spite of repeated opportunity provided to the assessee. The AO further noted that auditors of the assessee had pointed out that in respect of transaction of purchase of books amounting to Rs. 51,65,820, no prior approval under Section 297 of the Companies Act was obtained. 11. The learned Departmental Representative also pointed out that the assessee credited Rs. 1,00,04,855 on account of cash sales of books which were allegedly purchased from sister concern M/s Adbros Electro Tech for a sum of Rs. 51,65,820. The sale proceeds were claimed to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 68. In the absence of satisfactory explanation, the amount was treated as assessee's income from undisclosed sources and accordingly addition of Rs. 1,00,04,855 was justified. 12. As regards question Nos. 2 and 3, the learned Departmental Representative relied upon proposed order of learned AM. 13. Shri K. Sampath, learned Counsel for the assessee, on the other hand, read out the order of the AO and proposed order of the learned JM. He argued that the assessee and M/s Haryana Wool Allied Industries were operating from the same premises and, therefore, there was no demonstrative evidence of delivery of books. The purchase and sale of books was supported by vouchers, which stood seized with the Revenue Department. The learned CIT(A) in the impugned order has clearly recorded a finding that the AO did not verify the details from the seized material. It was argued that similar allegations of non-genuine purchases and sales were made in the case of the assessee for asst. yr. 1996-97 but the Tribunal, after thorough inquiry, accepted the claim of the assessee. Shri Sampath further argued that there is no prohibition under the law on cash sales. The sales made cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seller is further not obliged to prove the identity of the purchaser or his background as it is not his concern. The seller is interested only in his profits. Reverting to the proposed order of learned AM, Shri Sampath contended that learned AM was wrong in saying that heavy burden lay on the assessee to show that it was possible to make 100 per cent profit. In fact, learned AM had gone even beyond the assessment order and challenged delivery of books. He further submitted that other reasons given by learned AM for deciding against the assessee were mere surmises and conjectures and not facts borne out from the record. Shri Sampath accordingly supported proposed order of the learned JM which was read out extensively. 15. In the alternative, Shri Sampath submitted that even if sales were not accepted, entire sales proceeds could not be added and assessed as income. Addition only of GP earned by assessee could be made. For above proposition, Sri Sampath relied upon the decision in the case of Racmann Springs (P) Ltd. v. Dy. CIT (supra) and the decision of Hon'ble Gujarat High Court in the case of CIT v. President Industries (2000) 158 CTR (Guj) 372 : (2002) 258 ITR 654 (Guj). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd rendered no plausible explanation relating to introduction of cash of Rs. 1,00,04,855 alleged to represent the sale of books. (ii) That assessee could not furnish details of the parties to whom books were sent. (iii) That six parties claimed to have purchased books and paid cash through their agents were not found at their addresses when letters were sent to them under Section 133(6) of the IT Act. Details of other parties were not made available. (iv) That in such large transaction of alleged sale of Rs. 1,00,04,855, there was not a single sale through the banking channels. All the transactions were carried in cash. (v) That the assessee could not explain how extraordinary profit of about 100 per cent was earned on the sale of books allegedly purchased from sister concern when the assessee was a loss making company. (vi) That there was no evidence of delivery of books or receipt of consideration in cash. 19. On appeal, the learned CIT(A) did not agree with the above conclusion of the AO. His observations have been noted above in detail but for a ready reference are repeated again. On the issue involved, the learned CIT(A) noted alternative arguments of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of cash, was to be proved by the assessee under Section 68. I agree with aforesaid objection of the Revenue. The Revenue as stated by the learned Departmental Representative, has all along been contesting the claim and there was nothing undisputed as observed by learned JM. The claim of sale of books is shrouded by a number of suspicious circumstances pointed out by the AO which have not been satisfactorily explained by the assessee. Having regard to cumulative effect of all the circumstances, I am inclined to hold that assessee has not been able to establish that cash of Rs. 1,00,04,855 represented sale proceeds of books. I do not find any substance in the finding of learned CIT(A) that sales should be accepted as it is recorded in the books of accounts of the assessee. In my considered opinion, some evidence of sale generating extraordinary income of about 100 per cent in hands of a loss making company in purchase of books from a sister-concern i.e. in an item not carried in routine, was required to be placed by the assessee. Mere entries of sale to justify credit of Rs. 1,00,04,855 were not good enough. It is accordingly held that the assessee has failed to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income from undisclosed sources . In the present case, introduction of cash of Rs. 1,00,04,855 could be held to be income from undisclosed sources . As the amount already stood credited to the books of account of the assessee as income, the matter was required to be left by recording an appropriate finding as indicated above. There is no addition of above amount in the computation of the income. In the circumstances the question of deletion of Rs. 1,00,04,855 cannot arise. The effective addition made is Rs. 51,65,820 as noted above and no addition of Rs. 1,00,04,855. Therefore, relief of Rs. 1,00,04,855 cannot be allowed to the assessee. This position unfortunately has not been taken into account by the learned CIT(A) or by the learned JM. The question of sustaining addition of Rs. 51,65,820 is being separately considered under question Nos. 2 and 3. I, therefore, hold that there is no addition of Rs. 1,00,04,855 in the assessment order. The amount stood already credited in the P L a/c. It is receipt from undisclosed sources and could not be deleted. I, therefore, answer question No. 1 in the negative for the reasons recorded above. The above amount was neither required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. Sale had been claimed to be made to other outside parties. Purchase and sale are therefore two distinct transactions discussed as one in orders impugned before me. It is possible that assessee may be able to establish purchase of books, though sale of the same books has not been accepted. 24. In that case, addition of Rs. 51,65,820 will have to be allowed as a deduction. However, legal consequences of such a finding will also have to be seen and action taken in accordance with law. If books were not sold, where were they ? Could their value be added as part of the closing stock, in accordance with law ? All the above questions are related questions. The parties before me could not draw my attention to any relevant evidence on record on the basis of which the issue could have been resolved. Therefore, on facts, I agree with proposed order of learned AM that this question should be restored to the file of the AO for redetermination in accordance with law. I, therefore, agree on second and third question with the order proposed by the learned AM. 25. In the light of aforesaid discussion, the matter may now be placed before the regular Bench for an appropriate orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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