HEDA MARBLES PVT. LTD.,AJMER vs. ITO, KISHANGARH

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of Ld. CIT(A), Ajmer dated 10.12.2014 for A.Y. 2010-11. The grounds of appeal taken by the assessee are as under:-

• Uncorroborated version, allegation and fabrication of Shri Naresh Agarwal cannot be said to be conclusive evidence-The onus on Department has not been discharged. • Jurisdictional A.O.(D.C.-Investigation wing, Ajmer) has in Assessments already treated the sums credited in Bank accounts as income of Shri Naresh Agarwal (and his wife Smt. Kiran Agarwal)

at the business premises of Shri Naresh Kumar Agarwal and Smt. Kiran

Agarwal and it was noticed that huge cash was deposited in the bank

accounts of these two persons. These persons stated that transactions

in their bank accounts actually pertain to various marble traders of the Kishangarh. Shri Naresh Kumar Agarwal stated that the sale

consideration in respect of unaccounted sales made by the marbles

traders is received through their bank accounts standing in name of Shri

Naresh Kumar Agarwal and Smt. Kiran Agarwal and amount is withdrawn and returned to the actual marble traders. He stated that sale proceeds of M/s Heda Marbles, M/s Shobha Marbles and M/s

Asharam Bapu Marbles have been deposited from various stations

(places) in their bank accounts and after withdrawing the cash at Kishangarh, same is being passed on to Shri Sharad Heda, Manager of these concerns. The AO has reproduced the statement of Shri Naresh

Agarwal recorded during survey on 18.01.2011 on Page No. 3 to 5 of the assessment order and then again recorded his statement u/s 131 on 20.01.2011 in which it was stated that the above three concerns have indulged in making sales outside the books of accounts and sale

consideration has been received in cash through the bank accounts of Shri Naresh Kumar Agarwal and his wife. In response to the query letter

from the AO, the assessee denied having any business transactions or having received any cash from Shri Naresh Kumar Agarwal and Smt

Karan Agarwal. The AO issued the summons u/s 131 and recorded the statement of Shri Naresh Kumar Agarwal during the subject proceedings

in which Shri Naresh Kumar Agarwal again reiterated his statement that amount received on behalf of Heda Marble Group (M/s Shobha Marbles,

M/s Heda Marbles & M/s Shri Asharam Bapu Marbles) was returned in cash after withdrawing from his families bank accounts to Shri Sharad

Heda against the receipt of commission of Rs. 300 per Rs. 1 lac. The AO

issued summons to Shri Sharad Heda on 11.03.2013 in response to which he did not attend the proceedings. The AO supplied the statement recorded during survey to the assessee on 11.03.2013. The assessee has given its reply reproduced by the AO at Page 12 to 24 of 4 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh the assessment order in which assessee has denied having entered into unaccounted sales and having received the cash through the bank

account of Shri Naresh Agarwal and his family and their concern. The AO

provided the copy of bank statement of Shri Naresh and Smt. Kiran

Agarwal to the assessee on 20.03.2013 and letter was issued to Shri

Sharad Heda and Shri Manish Heda to cross examine Shri Naresh Kumar

Agarwal on 20.03.2013. However, he did not attend the office of the AO

to cross examine Shri Naresh Agarwal. The AO again issued the letter

dated on 20.03.2013 to Shri Naresh Agarwal to verify contents of the statement given in affidavit of Shri Sharad Heda and Shri Manish Heda.

The outcome of the survey proceedings were brought to knowledge of A/R and bank statement of Shri Naresh Agarwal and Smt. Kiran Agarwal

was provided to the A/R and report of the Investigation Wing was also brought to the knowledge of Ld. A/R. The AO pointed out that as per

the report of the investigation wing and statement of Shri Naresh

Agarwal, he has admitted that amount received for unaccounted sales of Heda Group has been returned to Shri Sharad Heda and 90% of his

transactions related to Heda Group and Shri Sharad Heda is managing

the affairs of Shri Heda Marbles Pvt. Ltd., M/s Shri Asharam Bapu

Marbles and M/s Shobha Marbles. Summons u/s 131 were issued to Shri

Sharad Heda on 11.03.2013. The AO noted that assessee Shri Sharad Heda, manager of the assessee is purposely killing time as case is time

barring. On 22.03.2013, the statement of Shri Sharad Heda was recorded in front of Shri Naresh Agarwal and the Ld. A/R’s Shri

Dharmendra Maheshwari and Shri Ajay Somani which has been reproduced by the AO on Page 27 to 29 of the assessment order.

Thereafter the statement of Shri Naresh Agarwal was recorded and reproduced at Page No. 29 to 30 of the assessment order.

“From the statement of Shri Sharad Heda as reproduced above in answer to Question No. 16, he stated that he has made telephonic talk

daily to Shri Naresh Agarwal in financial year 2009-10 and 2010-11. He

further accepted that he meet Shri Naresh Agarwal daily in between 2-3

PM. Shri Sharad Heda accepted that in financial year 2009-10 and 2010-

11, he was making the sale bills of M/s Shobha Marbles, Shri Asharam

Bapu Marble and M/s Heda Marbles Pvt. Ltd. In affidavit filed on 18.03.2013, he has denied to take care of any affairs in these concerns.

In initial statement recorded of Shri Naresh Agarwal during survey, the number of mobile of Shri Sharad Heda told was 9829270507, the same

is told by Shri Sharad Heda. From the statement of Shri Sharad Heda,

following points have become clear:-

“From the facts narrated above, it is established that contents

mentioned in affidavit of Shri Sharad Heda are wrong. Further it is clear that Shri Sharad Heda has received amount through bank

account of Shri Naresh Agarwal and his wife on account of undisclosed sales of three concerns of his family members.”

accounts of Shri Naresh Agarwal and his family and concern. The AO

required the assessee to obtain the copy of the same from his office.

As per this record, a sum of Rs. 3,41,99,953/- has been received on account of Heda Group of concerns through the bank accounts of Shri

Naresh Agarwal and his family. The details of the amount received

have been reproduced by the AO from Page No. 32 to 50 of the assessment order. The assessee again denied having entered into any unaccounted sales and denied having received any cash from Shri

Naresh Agarwal. After consideration the reply of the assessee, the AO

finally concluded as under:- “The details of amount received through bank account of Shri Naresh

Agarwal are determined on the basis of photo copies of documents

produced by him in the evening of 22.03.2013. This detail of amount

received along with letter is sent to assessee for explanation.

According to these details, Heda Group (M/s Shobha Marbles M/s

Shree Asharam Bapu Marbles and M/s Heda Marbles Pvt. Ltd.) has received Rs. 3,41,99,953/- through bank account of Shri Naresh

Agarwal. The assessee has filed written reply on 25.03.2013. The reply filed is considered. In reply, the assessee and ld. A/R has pointed out the defects of survey parties. The survey carried out was for limited purposes to catch the persons who are doing work of facilitator through their bank accounts for marble traders of Kishangarh. As discussed supra, 15 persons were caught in Kishangarh town who were doing the job. They have categorically

accepted that they are doing job of facilitator because they are of no means. At the time of survey, statements are recorded which is being part of assessment order. The documents produced during

assessment proceedings were not found at that time of assessment

proceeding. The details from these documents is determined and supplied to assessee on 22.03.2013. These documents are perused to 8 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh ld. A/R on 25.03.2013, the ld. A/R accepted that the documents

produced are reliable.”

“During the course of statement Shri Naresh Agarwal has stated that the amount received through his bank was returned to Shri Sharad

Heda. The amount was bringing in his account on instruction of Shri

Sharad Heda and this amount pertains to M/s Heda Marbles (P) Ltd.,

M/s Shobha Marbles and M/s Shree Asha Ram Bapu Marble,

Kishangarh. Their three concerns are of Heda Groups considering the facts of the case the amount is distributed equally in three concerns stated above. Thus Rs. 1,13,99,984/- (1/3rd of Rs. 3,41,99,953/-) are treated as undisclosed sales of the year under consideration of assessee. The declared GP rate is required to be applied on this sales

amount received through bank account of Shri Naresh Agarwal. The assessee has not shown any sale during the year under consideration. During the year under consideration, the G.P. rate

shown in case of sister concerns M/s Shobha Marble @ 25.33% and in case of M/s Shree Asharam Bapu Marbles @ 25.05%. The average

of GP rate is applied on undisclosed sales of Rs. 1,13,99,984/-. Thus

the additional income which was not disclosed by assessee comes to Rs. 28,71,656/- and thus Rs. 28,71,656/- is added to the total income

of the assessee.”

“3.3 I have considered that contention of the appellant as well as the assessment order. It is seen that as per the survey conducted in case of Shri Naresh Kumar Agarwal and Smt. Kiran Agarwal on 18.01.2011, the bank accounts of these persons were found in which the various amount

were deposited at various stations all over India and cash was withdrawn immediately at Kishangarh. Shri Naresh Kumar Agarwal had categorically stated that 90% these transactions pertain to Heda Group.

He explained that this group was indulging in unaccounted marble sales

and the money was being received from various purchasers spread at various stations in India in his own bank account, wife bank accounts

and M/s Sarveshwar Traders, a proprietary concerns bank account. The same has been withdrawn and given to Shri Sharad Heda, manager of these concerns. The similar statement was given before the AO in response to summons u/s 131. The AO had issued summons to Shri

Sharad Heda for cross examination of Shri Naresh Kumar Agarwal on 20.03.2013. However same was not availed by Shri Sharad Heda

purposely even when the case was time barring on 31.03.2013. The AO

has also provided all the statements recorded, copy of bank accounts

10 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh and copy of photocopy of records of transactions carried out by Heda

Group through the bank account of Shri Naresh Kumar Agarwal and his

family to the assessee.

Further, it has been proved by examination of Shri Sharad Heda that he

was managing the affairs of three concerns Heda Group i.e. M/s Heda

Marble Pvt. Ltd., M/s Asharam Bapu Marbles and M/s Shobha Marbles

and he was regularly meeting and telephonically talking to Shri Naresh

Kumar Agarwal on the regular basis in the year under consideration.

The record of the transactions in these bank accounts carried out by Shri

Naresh Kumar Agarwal for the Heda group was also submitted by Shri

Naresh Kumar Agarwal to the AO which was offered for examination and copy to the assessee. However assessee preferred to simply deny the transactions.

From above, it is apparent that there was evidence in the form of record

of transactions carried out on behalf of Heda Group through the bank

account of Shri Naresh Kumar Agarwal, Smt. Kiran Agarwal and their

proprietary concern Sarveshwar Traders. Shri Naresh Kumar Agarwal

had specifically explained the modus operandi adopted by the assessee

to receive the unaccounted sale proceeds through the bank account of above persons in the statement recorded by the AO during assessment

11 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh and also during the survey proceedings. It has also been pointed out

that they are persons of no means to carry out substantial transactions

noted in the bank accounts. Shri Sharad Heda, manager of the assessee

concern and a relative of the Heda family has purposely avoided the cross examination given to him by the AO.

The assessee has not been able to give any bifurcation of the various

transactions carried out through above bank accounts by three concerns

owned by Heda family i.e. M/s Heda Marbles Pvt. Ltd., Shobha Marble

and Asharam Bapu Marble. Accordingly the AO equally distributed the sale transactions among the three concerns of the assessee group. Shri

Naresh Kumar Agarwal had specifically explained the modus operandi

regarding the unaccounted sales routed through the bank accounts of Shri Naresh Kumar Agarwal, Smt. Kiran Agarwal and their concern.

Inspite of the fact that said transactions were confronted to them, they

have not been controverted. The assessee has not denied the sales

being made to the concerns stationed at the places from where sale

proceeds have originated. Shri Sharad Heda was managing the affairs

of the Heda family business concerns has accepted being in regular

contact with Shri Naresh Kumar Agarwal and the purposely avoided the cross examination inspite of all the documents being confronted and supplied to the assessee. The statement recorded of Shri Naresh Kumar Agarwal during survey by the AO u/s 131 has not been controverted by the assessee. No record regarding taxing of the income in the hands of the Shri Naresh Kumar Agarwal/Smt. Kiran Agarwal, its circumstances

and fate has been filed by the assessee.

In view of the above discussions and findings of the AO, the addition

made by the AO of Rs. 28,71,656/- is confirmed.”

us. The ld. Counsel for the assessee submitted that M/s Heda Marbles

Pvt Ltd is a company registered under the companies Act 1956. The Directors of company are Smt Madhu Heda and Smt Vimla Devi Heda.

During the year under consideration, return of income declaring income

at NIL, having a loss of Rs 2192/- was filed on 30/08/2010 as there was no manufacturing or trading activity. During the course of assessment

proceedings, the assessee cooperated with the department, produced all the books of accounts and filed the required details. A survey u/s 133A

was carried out by the investigation wing of the department on 18/01/2011 at the business premises of Shri Naresh Kumar Agarwal and Smt Kiran Agarwal (Third parties). During the course of survey, it was noticed that huge cash has been deposited in the bank accounts relating

to Shri Naresh Kumar Agarwal and Smt Kiran Agarwal (Third Parties).

statements of Shri Naresh Kumar Agarwal who is properitor of M/s

Sarveshwer Traders were recorded on 18/01/2011, where Shri Naresh

Kumar Agarwal categorically stated:-

(i) That he is proprietor of M/s Sarveshwer Traders and do the trading of marble. He further explained the nature of business and also stated that he regularly filed returns of income and also stated his PAN (While

answering questions no 1 at APB 61).

(ii) He further explained the address, nature and modus operandi of his

business while answering question no 2 (APB-61). He also accepted that he maintains the books of accounts for his sales & purchases(APB 64

Q.No.11).

(iii) He also explained that his wife is also a businesswoman and is assessed to Income Tax under PAN AGRPA6835C( ABP 62 answer of Q

No 3).

(iv) While answering question no 4, Shri Naresh Agarwal has categorically sated that he and his wife both enjoys cash credit limit with Punjab National Bank(APB 62).

(v) While answering question no 8 ,it was further stated that he entered

all the transactions in a diary but at present he does not know where the diary is, possibly it would have been destroyed.

(vi) In the entire statements he has not stated the name of assessee

company i.e M/s Heda Marbles (P) Ltd as a beneficiary. However he has stated the name of Heda ji, Heda Marbles, Shobha Marbles, Asha Ram

Bapu Marbles, Sharad Heda, Manish Heda.

Agarwal were again recorded u/s 131 on 20/01/2011 and in these

statements, Shri Naresh Kumar Agarwal did not stick to his earlier

statements, took a somersault and stated that his business was to provide the facility of bank accounts to the marble traders of Kishangarh

for depositing cash. However while answering question no 2, he

reconfirmed that the statement given on 18/01/2011 is true and correct.

It is not understandable that how both the statements can be true and correct atleast in respect of nature of business and in respect of name of places relating to Shri Heda ji as in the first statement dated 18/01/2011

while answering question no 10, stations relating to Shri Heda ji were told as Faridabad, Kalyan, Mathura, Jammu, Panipat, Meeruth, Mujaffar

Nagar, Jalandhar, Chennai, Jabalpur, Hoshiarpur, Thana, Srinagar, Amritsar etc. whereas in the statement dated 20/01/2011, Kalyan station

stated to be related with Kailash ji Bagada, Chennai station was stated

to be related with Sh. Yashvant ji Mandhana and stations such as Faridabad, Mathura, Panipat, Thana, Jabalpur, Hoshiarpur stated in statement on 18/01/2011 related with Shri Heda ji were not stated in the statement in 20/01/2011 relating to Shri Heda ji. In regards to the name of beneficiary, he stated in question no 9 statement dated

18/01/2011 that I gave services to 15 to 20 persons apart from Heda ji

and I do not know their name as their amount was small and I provided

services to them only one time. In the statement dated 20/01/2011 he

came with five names only and in the statement dated 11/03/2013 he

came with only five names.

Kumar Agarwal while answering question no 14-15 of his statement. He

also stated that he had no business relation with M/s Shobha Marbles, a partnership firm, Asha Ram Bapu Marble, again a partnership firm and M/s Heda Marbles (p) Ltd a company. Where he is neither a partner nor

a director or not an employee during the year under consideration.

These statements were taken in presence of Naresh Kumar Agarwal. It is therefore clear that Sh. Shard Heda has denied receiving any cash/money from Shri Naresh Kumar Agarwal and it is also clear that Shri Shard Heda is neither a partner nor a director and even not an employee of the assessee company. Therefore Shared Heda clearly and loudly denied any transaction of receipt of money on behalf of Assessee

Company from Sh. Naresh Kumar Agarwal.

about the nature of evidence, it was stated by Shri Naresh Kumar

Agarwal that said records were kept in copies i.e note books. We would

like your honour’s kind attention on the answer of question no 8 of statement dated 18/01/2011 where Shri Naresh Kumar Agarwal stated

that the diary is not traceable and now that diary has been converted

into copies/ note book in his statement dated 11/03/2013. 6. 5. It was further submitted that in the statement dated 18/01/2011,

Sh. Naresh Kumar Agarwal stated that 90% of work done by him

through above referred bank a/cs was for Heda Ji (Q no 6 & Q no 10).

In the statement dated 20/01/2011 which answering Q.No 3, Shri

Naresh Agarwal stated that 90% of work was done for Sh. Sharad Heda.

The unreliability and untruthfulness of his statement is proved simply

from the fact that the alleged total undisclosed sale of said ‘Heda Ji’ was Rs.3,41,99,953/- only which is not even 27% of total deposits (appox 13

Crore) in his bank accounts.

statements only, Ld A.O. took the view that these concerns are included

in making sales outside the books of account and sale consideration

received in cash through bank account of Shri Naresh Kumar Agarwal

and his wife. Therefore L.d. A.O. simply on the basis of statements of third party i.e Naresh Kumar Agarwal for which no effective opportunity

of cross examination was given and on the basis of the photocopies of alleged note book/diary/record maintained solely by the third party

which was shown to the assessee just before one day from the date of assessment and on the basis of certain assumptions & presumptions

held that “ since Naresh Agarwal has stated that the amount received

through his bank was returned to Sh. Sharad Heda. The amount was bringing in his account on instruction of Shri Shard Heda and this amount pertains to M/s Heda Marbles (P) Ltd, M/s Shobha Marbles and M/s shree Asha Ram Bapu Marbles kishangarh. These three concerns are of Heda group. Considering the facts of the case, the amount is distributed equally in three concerns as stated above.” Thus Rs.1,13,99,984/-(1/3rd of Rs. 3,41,99,953/-) was treated as undisclosed

sales of the year under consideration of the assessee. It was submitted

that the Ld. A.O. ignored the important fact that the assessee company

has no trading activity/ manufacturing activity during the year. This fact

has been accepted by Ld A.O. in last para of page 55 of assessment

order and further held that the declared G.P. rate is required to be applied on this sales amount received through bank account of Shri

Naresh Agarwal. The assessee has not shown any sale during the year

under consideration. During the year under consideration, the G.P. rate

shown in the case of sister concern M/s Shobha Marbles is @ 25.33%

and in case of M/s Shree Asha Ram Bapu Marbles is @ 25.05%. The average of G.P. rate of these two concerns comes to 25.19%. This 25.19% G.P. rate is applied on undisclosed sales of Rs.1,13,99,984/-.

Thus the additional income which was alleged as not disclosed by assessee comes to Rs 28,71,656/- which was added to the total income

of the assessee company.

taken by Ld A.O. while framing above assessment are as under:- (1) That Sh. Naresh kumar Agrawal and Smt. Kiran Agrawal are persons

of limited means.

(2) Their Concerns are bogus in which no kind of trading, manufacturing

or other business activities were carried out.

(3) The address given by these persons in banks and concerns are residential address. There are no separate premises from where their

concerns were operating.

(4) Assessee is indulged in making sales outside the books of account

and sale considerations is received in cash through bank accounts of Shri

Naresh kumar Agrawal & his wife. And the cash deposited in the above

bank accounts of third parties belong to the assessee company.

(5) That Sh. Shard Heda is Manager of the assessee company.

(6) That M/s Shobha Marbles, M/s Shree Asha Ram Bapu Marbles and the assessee company belong to same group known as ‘HEDA GROUP’.

(7) That Ld A.R. of the assessee company on 25/03/2013 accepted that the documents produced are reliable.

(8) That the amount brought in the account of Naresh Kumar Agarwal

pertains to M/s Heda Marbles (P) Ltd.

income of our firm for the year under consideration.

and Smt Kiran Agarwal.

than that person alone is answerable/liable for the consequences.

Kumar Agarwal & Smt. Kiran Devi.

transactions.

(a) The copies of complete proceeding & papers relating to investigation.

(b) Copies of bank statement.

(c ) Copies of documents inspected & seized.

(d) Survey report.

(e) Copies of diaries and books of accounts.

(f) Details of transaction i.e amount date, station & name of party.

(8) It was also submitted that u/s 68 or u/s 69 Sh. Naresh kumar

Agrawal & his wife are only liable to be taxed and not the assessee

company.

(9) Assessee company also submitted that both Shri Naresh Kumar

Agrawal and Smt Kiran Devi are business persons & have explained the nature of their business in Q.No 1 to 3 of his statements. It was also submitted that these third parties are trying to shift their tax burden on the assessee company.

incorrect and point wise submissions in this regard is as under:-

(i) Ld CIT (A) grossly erred in framing the appeal order on the basis

of this incorrect fact that 90% of the transaction relate to “ Hedaji “. We

would like kind attention of Hon’ble members on the fact stated by third

22 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh party Naresh Agrawal while answering question no 10 of statement

dated 18/1/11 where the third party Sh. Naresh Agrawal has stated that 90% of 13 Crores belong to Hedaji. Now your honour kindly see the para

3 of page 55 of assessment order where the amount allegedly pertaining

to Hedaji was found only Rs. 3,41,99,953/- which is only 26% of the total deposit of Rs. 13 Crore. Your honours Ld CIT (A) erred in not considering this important fact.

(ii) whether the mere statements of a third party are sufficient evidence

to treat any transaction of third party entered into the diary of third

party as a transaction of assessee without proving the said transaction

as sales of the assessee. No enquiry from the alleged buyers was made.

Assessee company has never accepted the alleged transactions as their

sales and has never accepted that the alleged amount was returned to the assessee company by the third party.

(iii) Sharad Heda is not at all related with the assessee company.

Neither he is a director nor an employee. He was never given any authority on behalf of assessee company to make any business dealing

with any other person. Therefore if any information was given to Sharad Heda to avail the opportunity of cross examination to third party Naresh Agrawal than the assessee company is not answerable and no negative presumption can be framed against the assessee company.

(iv) Ld A.O did not provide the copy of photocopy of records of transaction carried out by Heda Group to the assessee company. Ld A.O

did not provide following information’s to the assessee company even

after specific requests:-

(a) Copy of documents inspected and seized.

(b) Outcome of the survey operations.

(c) Copies of any diary/books/notebook produced by the alleged third

party before Ld A.O.

(d)Copies of two statements were also provided late i.e vide letter

dated 11/3/2013. (e)Copies of bank statements.

(f) All bank accounts of Naresh Agrawal & his family.

(g) All books of accounts

(h) All vouchers

(v) At the very outset the assessee company has no business relation

with Sh. Sharad Heda. Moreover the assessee company has not made

24 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh any sales during the year under consideration. Assessee company has not done any business activity of manufacturing or sale or purchase

during the year under consideration. Therefore there can not be any remote possibility of any management of business affairs by Sh. sharad

Heda. Sh. Sharad Heda was not related to Assessee Company. Since

there was no production or trading activity the assessee company can

not be held responsible for any telephonic talks by Sharad Heda with any third party.

Moreover Shri Sharad Heda in his statements dated 22/3/2013 has categorically denied any business transaction with Sh. Naresh Agrawal.

Sh.Sharad Heda has also forcibly denied any alleged receipt of money

from Sh. Naresh Agrawal allegedly withdrawn by Naresh Agarwal from his bank accounts. He has categorically stated that there was no business relations of him with Naresh Agrawal. He further stated that he

has not made any transaction of money with Naresh Agrawal. He also stated that he was not having any power of transaction of money on behalf of Assessee Company.

It is therefore clear from the statements of Sh. Sharad Heda that he

never did any business transaction with Sh. Naresh Agrawal on behalf of assessee company. He has not stated anywhere that he has managed

25 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh the financial affairs of business of assessee company. Rather he has denied such transaction.

Talking on phone or meeting with Sh. Naresh Agrawal was his personal

affairs as clearly stated by him. Therefore the assessee company can not be taxed simply on the basis of assumptions, presumptions, surmises &

conjectures. Any taxation on the basis of statements of Sh. Sharad

Heda/Manish Heda if leviable should be imposed in the hands of Sh.

Sharad Heda/Sh. Manish Heda and not on the assessee company.

(vi) Alleged diary/notebook/record of transaction was not produced in original before Ld A.O, only photo copy was produced. Copy of the same

was not provided to the assessee company before passing the assessment order. Is photo copy of alleged diary/ note book is a reliable

evidence. Can any assessment be framed on the basis of such evidence.

(vii) The alleged modus operandi explained by Naresh Agrawal is the creation of his mind only. No evidence in regards to the allegation that the amount deposited in the bank account of Naresh Agrawal was of assessee company was brought on the record by the Ld A.O. No other

corroborative evidence was brought on record either by the Naresh

Agrawal or by the department. No Independent evidence was brought

on the record.

(viii) Naresh Agrawal is running business. He is enjoying cash credit

limit from the banks. Naresh Agrawal is the Prop. of M/s Sarveshwar

Traders dealing in marble & other goods. He has godowns in Kishangarh

Industrial Area. His wife is Prop. of M/s Kiran Fabrics a power loom

factory. He has own residential house & factory premises. His living

standard was affluent. All such facts were brought in the knowledge of Ld A.O by the assessee company. Ld A.O has reproduced the same at last para page 51 of assessment order. It is therefore unlawful to say

that Naresh Agrawal is a person of no means.

(ix) As earlier submitted, Sh. Sharad Heda is not connected with the assessee company. Moreover no effective opportunity of cross

examination was given to the assessee company as no details were provided by Ld A.O to the assessee company even after a specific

request to provide the same.

(x) Since all the transactions of deposit in bank accounts of Naresh

Agrawal & others were not related to the assessee company and were related to Sh. Naresh Agrawal only. Therefore the assessee company

was not in position to explain the deposit entries in the bank accounts of Shri Naresh Agrawal and others. Such explanation can not be legally

expected from the assessee company.

(xi) Since the transaction were not relating to the assessee company,

assessee company is not expected to explain the same. Assessee

company has categorically denied any such transactions.

(xii) Smt. Madhu Heda director of the company has affirmed on oath

that the company has not made any sales outside the books of accounts.

Affidavit was filed. Smt Madhu Heda was not examined by Ld A.O. and her affidavit was not proved wrong therefore in the light of decision of Hon’ble Supreme Court in the case of Mehta Pareek & Co the affidavit

and its contents are to be accepted as correct.

(xiii) Assessee company has time & again in all the submissions have said that the allegations stated in statements of Naresh Kumar Agrawal

are wrong.

(xiv) Ld ACIT central circle, Ajmer in the case of Sh.Naresh Kumar

Agrawal has passed the assessment dated 20/3/2014 and held that all the transactions belong to Sh. Naresh Agrawal and has taxed accordingly

in the hands of Sh. Naresh Agrawal only. More importantly in his

assessment, Sh. Naresh Agrawal has stated that he has not maintained

any books of accounts. Therefore the existence of photocopy of alleged

diary/note book is not reliable and the statement cannot be relied upon.

of money issued by the assessee Company. There is no confirmation of assessee company confirming the transaction made by Naresh Agrawal.

There is no power of attorney in favour of Naresh Agrawal authorizing

him to collect the money on behalf of assessee company. No enquiry

from the alleged depositors was made. There is no statement of any of the depositors of money that the deposits have been made on behalf of the assessee company. No sales from outside the books of assessee was found. Assessee company has never accepted such transactions. Original

records were not produced for verification by Sh. Naresh Agrawal. Only

photo copies of alleged diary/note book was produced just 2 days before

the date of the order. There is no handwriting of any of authorized

representative of assessee company in any alleged record. Therefore

making assessment simply on the basis of statement & photo copy of alleged diary/note book in the hands of assessee company is unlawful.

We rely on Hon’ble Supreme Court in the case of CBI v/s VC Shukla

(1990) 3 SCC 40 (SC) where Hon’ble Apex Court has said that entries in books of accounts even if correct and authentic cannot fix a liability

without independent evidence. In their above decision Hon’ble Supreme Court discussed the case of Chandradhar v/s Gauhati bank [1967(1) SCR

898]. This case arose out of a suit filed by Gauhati bank against

Chandradhar for recovery of a loan of Rs. 40,000/-. In defense

Chandradhar contended that no loan was taken. The bank relied on certified copy of accounts made by them and no other evidence was produced. It was held that the bank had to prove the fact of payment

and could not rely on mere entries in the books of accounts even if they

were regularly kept in the course of business.

The Hon’’ble Apex Court also discussed the case of Yesu Vadian v/s

Subba Neicker (AIR 1919 Madras 132) where it was held that “Section 34 of the evidence act “lays down that the entries in the books of accounts regularly kept in the course of the business are relevant but such a statement will not alone be sufficient to charge any person with liability. Honourable Apex Court also discussed the case of Beni v/s

Bisandayal (AIR 1925 Nagpur 445) where it was observed that entries in books of accounts are not by themselves sufficient to charge any person

with liability. The reason being that a man can not be allowed to make

evidence for himself by what he chooses to write in his own books

behind the back of parties. The Hon’ble Supreme Court also discussed

the decision of Hon’ble Punjab and Haryana High court in the case of Heeralal Mahaveer Lal Prasad [(1967) 1 ITR Punjab & Haryana 435]

30 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh where the Honourable court observed that such entries though relevant

were only corroborative evidence and it is to be shown further by some

independent evidence that the entries represent honest and real

transaction and that moneys were paid in accordance with those entries.

company M/s Heda Marbles (P) Ltd. as a beneficiary. He has taken the name of Heda Ji, Shobha Marbles, Asha Ram Bapu Marbles, Heda

Marbles, Sharad Heda, Manish Heda but has not taken the name of assessee company or any director of the assessee company. Therefore

also making the assessment against the assessee company is unlawful.

Therefore Ld A.O grossly erred in treating the undisclosed sales of the assessee company at Rs. 1,13,99,984/-.

dated 20/1/2011 has stated the name of Shri Sharad Heda/Shri Manish

Heda only as a party while answering question no 3 & 4 of said

31 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh statements. Therefore making assessment in the hands of assessee

company is unlawful.

dated 11/3/2013 has again stated the name of Sh. Sharad Heda/Shri

Manish Heda as a name of main trader and not of the assessee

company. Therefore to assess the assessee company for the alleged

undisclosed sales is unlawful.

order has mentioned that Sh. Naresh Agrawal produced the photocopy

of alleged notebook/diary/record on 22/3/2013 (late evening). Assessee

was asked to examine the said record and obtain the photocopy of record and was asked to appear on 25/3/2013 at 10 AM. The photocopy

of any record is not a reliable document/evidence and cannot be treated

as acceptable evidence in absence of original record. No reason for not producing the original record was given. Moreover no proper opportunity

of being heard was given as the alleged records that too a photo copy

was available for verification of assessee company on 23/3/2013 and the date of hearing was given for 25/3/2013 and the assessment was made

on 26/3/2013. Therefore making assessment on the basis of photocopy

of records is unlawful.

filed her affidavits before Ld A.O affirming on oath that their company is not involved in making outside books sale or purchases and has not allowed any employee to do such act. She further affirmed that the company has not given any authority either to Sh. Sharad Heda or Sh.

Manish Heda or Sh. Naresh Agrawal or Smt. Kiran Agrawal to collect any amount from our customers or to use bank account of third party. The contents of the said affidavit should be treated as accepted as no cross

examination of the deponent was done. Affidavit was not rejected. We

rely on Hon’ble Supreme court in the case of Mehta Pareek & Co. [1956

AIR 554/ 1956 SCR 626]

examination was given to the assessee company as prior to cross

examination, copy of alleged record was not provided to the assessee

company. It is also on the record of Ld A.O that Sh. Naresh Agrawal did

not produce the original copy of records and only produced the photo

copy of records. Therefore in absence of such records there was no meaning of cross examination. Not providing opportunity of cross

examination is against the principal of natural justice. We rely on Hon’ble

Supreme Court in the case of Andman Timber Industries (Civil appeal

no. 4228 of 2006)

order dated 20/3/2014 copy is at APB 48-60. Ld ACIT Central Circle,

Ajmer assessed the profit on entire turnover of Rs. 6,55,83,749/- in the hands of Sh. Naresh Agrawal. Therefore taxing of same deposit in the hands of assessee tantamount to double taxation and is unlawful.

Agarwal was keep saying that he did not know where he had kept the diary and it might be possible that diary had been destroyed. And suddenly after more than 2 years, in the late evening of 23/03/2013, the said Naresh Agarwal has submitted the photocopy of that alleged

records.

the alleged diary which was not traceable from last 26 months, suddenly

got traced when the assessment was getting time barred. No justification/ reasons have been provided by Ld A.O. regarding

34 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh authenticity of that alleged diary. No other independent or corroborative

evidences have been submitted / brought on the records by Ld A.O. to sustain his version.

It is clear case of where third party has been be allowed to make

evidence for himself by making diary as per his own will/wish behind the back of the parties which is against the principles of natural justice.

Thus any addition on the basis of such manipulated dairy are unjustified,

needs to be deleted.

addition if any should have been made in the hands of third parties that Shri Naresh Agarwal and Smt. Kiran Agarwal only because the unexplained credits were found in their books of accounts and unexplained deposits were also found not recorded in their books of accounts. Therefore, the provision of Section 68 & 69 are applicable on third parties only.

recorded by Ld AO on 22/03/2013 has strongly denied any transaction or business with Shri Naresh Agarwal or his associate and has also denied

any receipt of money and cash from Shri Naresh Agarwal or his

Associate and has also stated that he has no business relation with the 35 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh assessee company as he is not a director, Partner or an employee in the assessee company.

has denied to have received any such payment from M/s. Dhariwal

group through Mr. Sohan Raj Mehta and since no incriminating

material was found from the residence of the assessee during the course of search and since the assessee is not dealing with M/s.

Dhariwal group in his individual capacity, therefore, respectfully

following the decisions cited above and in view of our reasonings

given earlier, we are of the considered opinion no addition in the hands of the assessee can be made. Since it is held that the assessee

has not received any amount, therefore, the question of taxing the same under section 56(2)(vi) as held by Commissioner (Appeals)

does not arise. In this view of the matter, we set aside the order of the Commissioner (Appeals) and direct the assessing officer to delete

the addition of Rs. 1 crore for assessment year 2006-07 and Rs. 20

crores for assessment year 2007-08. Grounds raised by the assessee

on this issue are accordingly allowed.”

in ITR No. 467/JP/2011 in the case of Shri Sharad U Mishra, Jaipur.

Where Hon’ble Bench held that no addition can be made simply on the basis of statements only.

Lata Mangeshkar (1974) 97 ITR 696 (Bom) has held “that mere

entries in the accounts regarding payment to the assessee was not sufficient as there was no guarantee that the entries were genuine in absence of any corroborative evidence. In that case, the income-tax

authorities sought to assessee certain income as income from undisclosed sources received by the assessee on the basis of statement by 2 persons that they had paid money in black to the assessee and entries in books belonging to them regarding alleged

payment to the assessee. The Tribunal examined the statement made

by the 2 persons and found that the evidence tendered by them

suffered from serious infirmities. It held that mere entries in the accounts regarding payments to the assessee was not sufficient as there was no guarantee that the entries were genuine. The Tribunal

therefore held that there was no proof that the amount in question

represented income from undisclosed sources belonging to the assessee. On further appeal by the Revenue, the Hon'ble High Court

37 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh held that the conclusion of the Tribunal had been reached by it on a proper appreciation of the evidence. This was finding of fact by the Tribunal and no question of law arose and no reference would lie

from the decision of the Tribunal. Accordingly, the appeal filed by the Revenue was dismissed”.

diaries), the Hon’ble Supreme court while interpretating section 34 of the evidence act held that entries in loose papers/sheets are irrelevant and admissible as evidence. Such loose papers are not books of accounts and the entries therein are not sufficient to charge

a person with liability. Even if books of accounts are regularly kept in the ordinary course of business, the entries therein shall not alone be sufficient evidence to charge any person with liability. It is incumbent

upon the person relying upon those entries to prove that they are in accordance with the facts”.

available on record. One of the contentions raised by the ld AR is that Sh Naresh Agrawal has already been brought to tax in respect of amount

found credited in his bank accounts and taxing the same bank deposits

in the hands of assessee company tantamount to double taxation and is unlawful. In this regard, it was submitted that ACIT Central Circle Ajmer

has made the assessment of Sh. Naresh Agrawal for A.Y. 2010-11 vide

assessment order dated 20/3/2014 whereby Rs. 6,55,83,749/- found

deposited in his bank accounts have been brought to tax. In our

considered view, this is the fundamental issue that arises for consideration in the present case which needs to be addressed before

we examine other contentions raised by both the parties. Whether the amounts found deposited in the bank accounts of Shri Naresh Agarwal

and Smt Kiran Agarwal can be brought to tax twice firstly in the hands of Shri Naresh Agarwal and Smt Kiran Agarwal, and then again in the hands of the assessee company as done by the Revenue. Under the scheme of the Income tax Act, the income has to be brought to tax in the hands of the assessee in whose hands the income rightfully accrues

or arises or received or deemed to be received by that person. At the same time, there are situations and circumstances where it is not possible for the Revenue to determine the person to whom the income

rightfully belongs. In such cases, where there is some ambiguity or doubt in the mind of the Assessing officer, it is open for the Assessing

39 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh officer to make assessment on two persons in respect of the same

income. Such assessments are made to protect the interest of the Revenue so much so, unless such assessment is made, assessment

proceedings against the party finally found to be liable may become

barred by time. In this regard, useful guidance can be drawn from the decision of the Hon’ble Supreme Court in case of Lalji Haridas v.

Income-tax officer [1961] 43 ITR 387 (SC) wherein it was held as under:

“In cases where it appears to the income-tax authorities that certain

income has been received during the relevant assessment year but it is not clear who has received that income and prima facie it appears that the income may have been received either by A or B or by both

together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both

against A and B. That being so, the appellant would not be justified in resisting the enquiry which was proposed to be held by respondent

No. 1 in pursuance of the impugned notice issued by him against the appellant.”

out on 18.01.2011 at the business cum residential premises of Shri

Naresh Agarwal and Smt Kiran Agarwal, the assessment proceedings

40 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh in the hands of Shri Naresh Agarwal were re-opened for the subject

assessment year 2010-11 and Rs 6,43,65,158 found deposited in the bank accounts were brought to tax. No information is available on record in respect of Smt Kiran Agarwal. Simultaneously, the assessment proceedings for AY 2010-11 in the hands of the assessee

company were completed bringing to tax Rs 1,13,99,984 in respect of amount found deposited in the bank accounts maintained in the name

of Shri Naresh Agarwal and Kiran Agarwal. We could see variance in the amount brought to tax in the hands of Shri Naresh Agarwal and the assessee company, the reason is attributed, to some extent, to the fact that the Assessing officer has distributed the total amount of Rs

3,41,99,953 among three companies including the assessee company.

The fact remains that the deposits found deposited in the same bank

accounts have been brought to tax in hands of Shri Naresh Agarwal

and the assessee company. On perusal of the assessment orders, we

find that there existed an ambiguity to determine the person to whom

the deposits and the resultant income rightfully belongs. We,

therefore, donot find anything wrong in the action of the Revenue

authorities in bringing to tax the same amount in the hands of Shri

Naresh Agarwal and the assessee company as there exist an ambiguity

41 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh or doubt as to the rightfully owner of the money found deposited in the bank accounts.

owner of the money so found deposited in the bank accounts and who

should be finally assessed to tax in respect of said bank deposits. It is noted that the Revenue’s case rests on the statements of Shri Naresh

Agarwal recorded during the course of survey and then subsequently

during the course of impunged assessment proceedings, the statement

of Shri Sharad Heda and the details of the amount received through

bank account of Shri Naresh Agarwal on the basis of the photo copies

produced by Shri Naresh Agarwal in the evening of 22.03.2013 on perusal of which the AO found that Heda Group received

Rs 3,41,99,953 from the bank account of Shri Naresh Agarwal. In our

view, these records of transaction of the bank accounts basis which the AO has determined the assessee’s company tax liability is a critical

piece of evidence which can support and corroborate the statements

so recorded. It is equally important to know the contents of these

documents and how the AO has established the necessary nexus with the assessee company. Unfortunately, the records and paperbook

submitted before us is silent on this and in absence of the same, we

42 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh are unable to take a view in the matter solely basis the statements so recorded. Further, the ld AR has raised various contentions (as noted

above) in terms of inconsistency in the statements of Shri Naresh

Agarwal, the absence of nexus with the assessee company, the locus

standi of Shri Sharad Heda and how the same cannot be relied upon and held against the assessee. In our view, what is relevant is that the statements should be read as a whole and any inconsistencies

should be examined. Further independent investigation be carried out

by the AO to determine the necessary nexus with the assessee

company with the amounts so deposited in the bank accounts and the locus standi of shri Sharad Heda, the relationship and linkage with the promoters/directors and in the affairs of the assessee company before

a final view is taken in the matter. In our view, there is not enough

material on record for us to take a view in the matter and the matter

deserves to be set-aside to the file of the ld CIT(A) to examine the same afresh.

and 2010-11 (ITA No. 940 & 941/JP/15) had come up earlier before

this Bench as part of bunch of appeals in case of Smt. Kusumdevi

Vijayvargiya and others (ITA No. 942/JP15 and others). This Bench

through its consolidated order dated 20.10.2016 has similarly

43 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh remanded the matter back to the file of the ld CIT(A) in view of insufficent material and investigation on the part of the revenue

authorities. In our view, since the matter pertaining to Shri Naresh

Agarwal and the assessee company are connected, it would be appropriate that the subject matter is also set-aside to the file of the ld

CIT(A) with the directions as contained in para 8.3 above and also taking into consideration the directions of this Bench in its order dated

“2.3 We have heard the rival contentions and perused the material available on record. The issue under consideration relates to cash deposits amounting to Rs.11,37,60,458 made in six bank accounts maintained by the assessee. The AO has held these receipts as receipts from the business of marble trading and the ld CIT(A) has held that these receipts belong to the marble traders and assessee who has facilitated these receipts should be brought to tax in terms of her commission income. Undisputedly, these bank accounts are opened in the name of the assessee and operated by the assessee herself with the assistance of her husband. The stand of the assessee is that she is not carrying on any business in the nature of marble trading as alleged by the AO. She has further stated that all these bank accounts were used by various marble traders operating in and around Kishangarh to bring cash against their unrecorded sales made to various parties from all over India. The assessee further submitted that the cash deposited by the various parties was subsequently withdrawn and handed over to the marble traders to whom the said money belong. The assessee submitted that for the activity of facilitating the receipt of cash in her bank accounts and, subsequent withdrawal and handing over the cash to the marble traders, she used to get the commission from the said

44 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh marble traders. Here it is relevant to note that the entire transactions in various bank accounts in terms of monitoring the cash deposits as well as subsequent withdrawal and handing over the cash has been carried out by the assessee herself with the assistance of her husband to whom she has authorised and not by the marble traders. Here it is also relevant to note that the AO has also stated in his order about the said market practice in the business of marble trading where there is large scale under invoicing and under billing of sales. The ld. AO has stated that “generally, for obtaining sale consideration of actual transaction from the buyers located outside the hometown or throughout India, the traders obtain part amount through cheques and for balance amount, they have been using their confidants (facility providers). The confidents are having multiple bank accounts either in their name or in the names of their family members or concern/forms. Their bank account numbers are intimated to the buyers who deposit the balance amount which is actually on-money, in the bank account of the confidants. The buyers deposit amount below Rs. 50,000/- to avoid mentioning PAN on pay-in-slips. After receipt of amount in bank account, the confidants i.e, facility providers withdraw the amount of on-money and hand over to the beneficiaries i.e. sellers.” The AO has therefore, given his prima facie finding that the assessee is found prima facie engaged in providing facility to bring cash payments of the marble traders by allowing them to use her bank account which is in conformity with the prevailing market practice in this region.

46 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh that normally, unless the contrary is established, title always follows possession. In the facts of this case, indubitably, possession of the wrist- watches was found with the petitioner. The petitioner did not adduce any evidence, far less discharge the onus of proving that the wrist- watches in question did not belong to the petitioner. Hence, the High Court held, and in our opinion rightly, that the value of the wrist- watches is the income of the assessee. In this connection, reference may be made to the views expressed by Justice Tulzapurkar, as his Lordship then was, of the Bombay High Court in the case of J.S. Parkar vs. V.B. Palekar (1974) 94 ITR 616 (Bom) : TC42R.1775, where, on a difference of opinion between Justice Deshpande and Justice Mukhi, Justice Tulzapurkar agreed with Justice Deshpande and held on the question whether the evidence established that the petitioner was the owner of the gold seized, though there was no direct evidence placed before the taxing authorities to prove that the petitioner had actually invested moneys for purchasing the gold in question, the inference of the ownership of the gold in the petitioner in that case rested upon circumstantial evidence. There also gold was seized from a motor launch belonging to the petitioner in that case. There, a contention was raised that the provision in s. 110 of the Evidence Act where a person was found in possession of anything, the onus of proving that he was not the owner was on the person who affirmed that he was not the owner, was incorrect and inapplicable to taxation proceedings. This contention was rejected. The High Court of Bombay held that what was meant by saying that the Evidence Act did not apply to the proceedings under the Act was that the rigour of the rules of evidence contained in the Evidence Act was not applicable but that did not mean that when the taxing authorities were desirous of invoking the principles of the Act in proceedings before them, they were prevented from doing so. Secondly, all that s. 110 of the Evidence Act does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a set of circumstances that satisfy its conditions.”

48 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh relevant for facts under consideration even though the assessee has not maintained books of accounts and the AO has not invoked section 68 specifically in the instant case. The Hon’ble High Court has observed as under: “Sec. 68 refers to cash credits which are found in the books of the assessee. If the explanation offered by the assessee is not satisfactory, then the sum so credited may be charged to income-tax as income of the assessee in the previous year. The burden, therefore, is on the assessee to explain satisfactorily with regard to the amounts which have been credited in the books of account by the assessee. The source and the nature of the receipt has to be proved by the assessee, and if he fails to prove satisfactorily the source and nature of the amount received, the assessing authority is entitled to draw an inference that the receipt is assessable income of the assessee. The Tribunal has cast doubts with regard to the investments and has even observed that some of them are not even genuine. A duty was cast on the Tribunal to have either remitted the matter to the CIT(A) or to the assessing authority to find out the correct position. There may be a number of creditors of similar nature, but the assessee has to discharge his burden in respect of all of them. The burden was to be discharged by the assessee and all the creditors were not produced, their addresses were not given and cogent reasons were given by the ITO. When the Tribunal was of the view that some of the investments were not genuine it should not have upheld the order of the CIT(A) and the proper course was to set aside the order of the CIT(A) with a direction to either allow such amounts for which the assessee has been able to prove satisfactorily the investment or to give him the opportunity to prove such unexplained investments. The observations of the Tribunal makes it clear that the Tribunal itself was in doubt about the correctness of its own conclusion when it observed that some of the cash credits were not genuine. Thus, the finding recorded by the Tribunal that some of the cash credits were not genuine vitiates the order passed by it. The burden to be discharged by the assessee has not been discharged and 49 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh the order of the CIT(A) could have been confirmed only if the Tribunal was satisfied that all the investments were satisfactorily explained. The Tribunal itself was not in a position to feel satisfied with regard to the explanation submitted and observed that some of the investments were not genuine. It was not justified on the part of the Tribunal in such a case to uphold the order of the CIT(A). While explaining the various credits and investments, it may be possible that the assessee may be successful in explaining some of them, but that does not by itself mean that the entire investments have to be considered as explained. Even lapse of time or inability of the assessee would not make the unexplained investment an explained one. It is each and individual entry on which the mind has to be applied by the taxing authority when an explanation is offered by the assessee. If no explanation has been offered in respect of a particular entry, the taxing authority will be justified in coming to the conclusion that the said investment is unexplained. It is not the totality of the credit entries which are to be allowed or to be disallowed. This work has to be done on the basis of the explanation offered for different entries and if the explanation of the assessee is acceptable on the basis of the evidence produced before the taxing authority, the Tribunal can come to the conclusion that such investment is fully explained. In these circumstances, the Tribunal was not justified in confirming the order of the CIT(A) and there is contradiction in its decision in holding that all investments cannot be treated as unexplained though some of them are certainly not genuine. The matter is remitted back to the Tribunal to consider each individual investment for which an explanation has been given. If the Tribunal is satisfied with the explanation submitted by the assessee, then the investment to that extent has to be allowed and the entire sum cannot be allowed in general.” (Emphasis supplied)

(1) the assessee shall provide all the requisite details in terms of names and address and other requisite particulars of the depositors as well as of the beneficiaries; (2) the assessee has to explain the nature and source of the transactions in terms of deposits and establish the necessary linkage between the deposits and the subsequent withdrawals to various individual beneficiaries; (3) The ld CIT(A) shall call for the records maintained by the Investigation Wing in respect of the survey proceedings and confront the same to the assessee to provide her a suitable opportunity; (4) The beneficiaries to be confronted with the details submitted by the asssessee and call for their confirmation and/or personal appearances and/or coordinate with their respective CITs/Assessing officers; and (5) Needles to say, both the parties shall be provided suitable opportunity and they shall equally cooperate and shall submit necessary explanation/information/documents as available and required by the ld CIT(A).

CIT(A) to examine the same a fresh. The grounds taken by the assessee company are thus allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical

purposes.

Order pronounced in the open court on 01/05/2017. 53 M/s Heda Marbles Pvt. Ltd.Vs. ITO Ward, Kishangarh ¼dqy Hkkjr ½ ¼foØe flag ;kno½ (Kul Bharat) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 01/05/2017. *GANESH*. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Heda Marbles Pvt. Ltd., 2. izR;FkhZ@ The Respondent- ITO Ward-Kishangarh 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 241/JP/2015}

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत